ANNUAL REPORT 2017
Year ended March 31, 2017

AN NUA L R E P O RT 2 0 1 7
CONTENTS
01 Consolidated Financial Highlights

14 Consolidated Financial Statements

02 Message from the President

49 Independent Auditors’ Report

06 Medium-Term Management Plan

50 Capital Management

08 Compliance

51 Organization, Group Network

09 Risk Management

52 Affiliates and Subsidiaries, Bank Data

13 Board of Directors, Executive Officers
and Corporate Auditors

PROFILEThe Nanto Bank, Ltd. (the “Bank” or “Nanto Bank”) is based in Nara Prefecture, a region rich in tradition andculture dating back to its development as Japan’s first capital in the early 8th century. Since its establishment in
1934, Nanto Bank has achieved steady growth in partnership with its region and continues to maintain a sound financial structure. As of March 31, 2017, Nanto Bank had deposits of ¥4,737.3 billion, loans of ¥3,252.2 billion and total
assets of ¥5,815.0 billion.
Nanto Bank’s domestic network of 139 branches extends
beyond Nara Prefecture to the neighboring prefectures ofOsaka, Kyoto, Hyogo, Mie, Wakayama and Tokyo. The Bankhas become a trusted institution in communities throughout
its region thanks to its commitment to regionally focusedservices designed to meet the needs of local customers.
Nanto Bank continues to make a positive contribution toregional economic development by providing a comprehensive range of financial services, including overseas services,and maintains representative offices in Hong Kong andShanghai.

OSAKA

KYOTO

HYOGO

TOKYO
MIE

CORPORATE PHILOSOPHY
1. Pursue sound and efficient management
2. Provide superior comprehensive financial services
3. Contribute to regional prosperity
4. Strive to become a highly reliable, friendly and attractive bank

NARA (NARA PREFECTURE)
WAKAYAMA

Consolidated Financial Highlights
Thousands of
U.S. dollars

Millions of yen

2017

2016

2015

2014

2013

2017

For the year:
Total income .............................................

¥

81,230¥76,417¥

81,869¥82,717¥

88,875$724,039

Total expenses ..........................................

64,45061,58663,85762,923

77,661

574,471

Income before income taxes ....................

16,77914,83118,012

19,794

11,214

149,558

Net income ...............................................

12,50812,159

9,874

9,079

7,621

111,489

Total assets ...............................................

5,815,095

5,505,607

5,328,661

5,187,191

5,025,037

51,832,560

Loans and bills discounted .......................

3,252,218

3,188,341

3,079,175

2,972,159

2,898,844

28,988,483

Securities ..................................................

1,686,575

1,797,411

1,693,517

1,907,331

1,840,741

15,033,202

Deposits and negotiable certificatesof deposit ................................................

4,765,789

4,766,330

4,754,414

4,662,888

4,514,604

42,479,623

Total liabilities .........................................

5,563,956

5,253,894

5,077,342

4,966,542

4,809,291

49,594,045

Non-controlling interests .........................

—

—

7,935

7,336

6,658

—

Total net assets .........................................

251,139251,712251,318

220,648

215,745

2,238,515

Common stock .........................................

29,24929,24929,24929,24929,249260,709

At year-end:

Per share data:

Yen

U.S. dollars

Net income ...............................................

¥ 466.05¥ 453.22¥ 36.81¥ 33.78¥ 28.01$ 4.15

Stockholders’ equity ................................

9,353.18

9,376.62

906.92794.95774.46

83.36

Capital adequacy ratio (%) ......................

9.42

9.36

9.72

10.51

10.66

Note: U.S. dollar amounts are included solely for the convenience of readers and are calculated at the exchange rate of ¥112.19 to US$1.00, the rate prevailing on March 31, 2017.

Net Income

Total Assets(Billions of yen)(Billions of yen)

Total Net Assets(Billions of yen)
5,815.0

12.1

12.5
5,025.0

5,187.1

5,328.6

5,505.6
215.7

220.6

2013

2014

251.3

251.7

251.1

2015

2016

2017

9.8
9.0
7.6

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

1

Message
Message fromfrom thethe President
President
We would like to sincerely thank you for your support for the Nanto Bank.
The purpose of this Annual Report 2017 is to disclose our performance in fiscal 2016 (the year ended March 31, 2017) and
our initiatives conducted during the fiscal year. We would appreciate it if you would read through the report.
The future outlook for the global economy is characterized by uncertainty as a result of factors including geopolitical risks
related to the Middle East and North Korea and political trends in Europe and the US, while the Japanese economy remained ata standstill due to the influence of the global economy, despite the moderate recovery trend.
Looking at the regional economy centered around Nara Prefecture, while there were bright signs in some areas of tourism
including progress in attracting hotels and an increase in foreign tourists, overall the situation continued to fluctuate as there
were matters of concern such as sluggish personal consumption and a decrease in the working population.
Under these circumstances, we started the Bank’s medium-term management plan titled “Vitality Creation Plan II – Changing and Taking on Challenges” (April 2017 to March 2020) from April to realize the management vision of a “Vitality Creating
Bank” which creates vitality in the community and itself. In the new medium-term management plan, we have set the three
years as a period in which to strive to change to a robust structure in consideration of the changing financial climate. For theplan’s final year, coinciding with our 85th anniversary, we will endeavor to achieve good results in terms of earnings and financial position. Under the plan, we will work to create regional economic vitality, deliver customer-centric services, improve
productivity and profitability through reviewing operations and upgrade the management and controls framework.
By devoting ourselves even more in the future to improve the quality of human resources, sales, and clerical operations anddelivering high-quality services that are truly needed, we aim to contribute to the sustainable development of the regional
economy and continue growing together with the community.
We look forward to the continued understanding and support of all of our stakeholders.

Aiming to be the Number One Bank in Service as a
“Vitality Creating Bank”
Our Economic and Financial Environment
The future outlook for the global economy is characterized byuncertainty as a result of factors including geopolitical risks
related to the Middle East and North Korea and political trends
in Europe and the US, while the Japanese economy remained
at a standstill due to the influence of the global economy,
despite the moderate recovery trend.
Looking at the regional economy centered around Nara
Prefecture, while there were bright signs in some areas of tourism, including progress in attracting hotels and an increase inforeign tourists, overall the situation continued to fluctuate as
there were matters of concern such as sluggish personal consumption and a decrease in the working population.
It is also believed that conditions in the operating environment for financial institutions will remain severe due to factors
including a decline in investment yields stemming from intensified competition between financial institutions and theimpact of the Bank of Japan’s negative interest rate policy.

2

New Medium-Term Management Plan “Vitality Creation Plan II– Changing and Taking on Challenges”
In this economic and financial environment, we started thechanging financial climate. For the plan’s final year, coinciding

Bank’s medium-term management plan titled “Vitality

with our 85th anniversary, we will endeavor to achieve good

Creation Plan II – Changing and Taking on Challenges” (April

results in terms of earnings and financial position. Under the2017 to March 2020) from April to realize the management

plan, we will work to create regional economic vitality, deliver

vision of a “Vitality Creating Bank” which creates vitality incustomer-centric services, improve productivity and profitabili-

the community and itself. In the new medium-term manage-

ty through reviewing operations and upgrade the management

ment plan, we have set the three years as a period in which toand controls framework.

strive to change to a robust structure in consideration of theCreating Regional Economic Vitality
As the regional economy has undergone further changes inyear the third NANTO Success Road business plan commer-

social and economic structures, including population decline,

cialization support project to support customers that want tolower fertility and an aging population leading to a contrac-

establish or develop new businesses. Thanks to these efforts,tion in the scale of the economy, regional societies need toa total of 25 plans have been adopted, 11 of which have led

promote regional creation through joint efforts.

to commercialization. Headquarters representatives will con-Under these circumstances, each local municipality hastinue to provide support toward achieving prompt commer-

currently reached the implementation stage ofcialization while working together with external“Comprehensive Strategies for Local Community, People

organizations.

and Job Creation,” and we have been promoting the signingof cooperative agreements with the local municipalities. As
for regional economy vitalizing projects that include support
for business creation and promotion of transfers and permanent citizenship in the region, we have been actively collaborating and coordinating with the projects as a financial
institution.
Specific projects include the “Nara-machi Empty House
and Machiya Visit Tour” that matches owners of machiya(traditional houses) and businesses in order to solve the issueof the effective use of machiya in Nara City, which was thefirst such effort by a financial institution and joint participation with the Nanto Economic Research Institute in the“Regional Personnel Department Strategy Formulation

Since its foundation, we have endeavored to conduct busi-

Project” of the Ministry of Internal Affairs andness closely rooted in the region as a bank that grows togeth-

Communications in Tenri City.

er with the region. Under the new medium-term management

In addition, as an independent project by the Bank for theplan, while prioritizing the basic stance of creating regional

development of regional industry, we made a second invest-

economic vitality, we will continue to do our utmost together

ment in the Nara Prefecture Tourism Revitalization Fund inwith our customers and the community in response to chal-

March of this year after implementing in the previous fiscal

lenges in the region and link such efforts to our growth.

Delivering Customer-centric Services
The needs of customers are changing at an unprecedented

a spirit of customer satisfaction (CS) and thoroughly ensure

speed and becoming more diverse and sophisticated in line

operation management from a customer-oriented approach inwith the social and economic situation. In order to gain thean aim to be the “Number One Bank in Service.”continued support of customers in these circumstances, we

By delivering customer-centered services, we would likewould like to deliver optimal services truly desired by cus-to establish new business models in line with the times as a

tomers by constantly responding to these changes.

regional financial institution.

Based on this stance, under the new medium-term
management plan, we will aim to further instill and entrench

3Message
Message fromfrom thethe President
President
Improving Productivity and Profitability through Reviewing Operations
Under the new medium-term management plan, we will

forward, we will work to strengthen new financial services

strongly pursue the Four Reforms as core strategies: specifi-

through further channel diversification and the utilization ofcally, awareness reform, sales reform, clerical operations

FinTech in order to improve customer convenience.

reform, and expenses reform.

Next, for corporate customers, we aim to become the trueFirst, in terms of sales, we are currently reviewing themain bank for the customer through exercising the consulta-

branch and sales framework in consideration of market char-tion function and delivering solutions according to the com-

acteristics. We are aiming to achieve a balance between

pany’s growth stage.

improvements in customer convenience and efficiency

We will continue to actively support business creation andthrough efforts including the consolidation and conversion

development of new businesses through the business plan

into sub-branches and changes in bank counter business

commercialization support project, the utilization of the dedi-

hours of some branches as well as new construction and relo-cated NANTO Commercialization Support Fund 80 financ-cation of branches and the introduction of mobile ATM vehi-

ing program and the NANTO CVC Limited Liability

cles. In addition, we will work to bolster points-of-contact

Investment Partnership (known as: NANTO CVC Fund)with customers and deliver high-quality services throughnewly formed in June of this year, among other projects.

means such as the augmenting of sales representatives andIn addition, we will strengthen business matching andenhancing their specialties and the introduction of money

overseas business support and do our utmost to support busi-

advisors (MAs) who specialize in asset management consul-

ness expansion for customers through means such as con-tation at bank counters.

tinuing to hold the NANTO Manufacturing Active Company
Matching Fair and the NANTO Food and Goods Business
Panel, as well as the holding of business panels and businessseminars throughout Asia.
Furthermore, we will continue to offer financing throughthe NANTO Vitality Creation Support Fund program thatprovides funds based on business feasibility assessments thatassess factors including technological capabilities, growthand sustainability and provide business succession support
and M&A advisory services through headquarters with specialized knowledge.
As more advanced skills and know-how are required thanin the past to support the needs of customers in both the per-4

Next, in terms of initiatives for each department, for indi-

sonal department and corporate department, our sales

vidual customers, we aim to serve as the closest possible

branches, specialized personnel at headquarters and theconsultant for customers of all generations by paying proper

Nanto Bank Group will devote their full efforts while work-attention to their life stages. In an effort to strengthen ouring closely together with external organizations in order tosecurities business and inheritance business that serve as theoffer optimal solutions for customers.

pillars of our retail sales, we expanded the handling of finan-

Next, in terms of clerical operations, we will improve pro-cial product mediation services to all sales branches, exclud-

ductivity through a fundamental overhaul of sales branch anding agencies, and became the first regional bank in the Kinki

headquarters clerical operations as we transform ourselves

region to acquire a license for trust services along with bank-into an efficient organization. At sales branches, we willing services in December of last year. We also started hand-

work to further improve the efficiency of clerical operations

ing products including will trusts and will substituting trusts

from the perspective of abolition, simplification, machinefrom April of this year. In the non-face-to-face channel, we

usage/labor saving and concentration and establish branch

started accepting Internet applications for life insurance inoperations systems that are simple and convenient for cus-

January of this year, and we introduced a new mobile app intomers to use by means such as further utilizing tablet termi-

March that makes it possible to open an ordinary savings

nals. In addition, we will reduce the number ofaccount and apply for a card loan using a smartphone. Going

administrative personnel at sales branches while at the sametime increasing the number of sales personnel that provide
consulting services to customers.

In addition, in order to develop employees who are capableof thinking and acting for themselves, we have adopted the kai-

We will work to vitalize our human resources and organizationzen (improvement) and 5S approaches of manufacturers andby fostering the spirit of taking on challenges among the bankers,

will work to create an improvement culture and ethos that arebolstering the human resource development system and realizing aunique to the Bank.

work-life balance. In order to improve motivation and fulfillment

Furthermore, in terms of expenses, we will transform thein work, and ensure that each and every employee can perform toexisting expenses structure and improve productivity and prof-

100% of their ability, we will work to assign appropriate humanitability by achieving reforms in awareness, sales, clericalresources to appropriate positions, develop systems to reduce

operations and expenses under the new medium-term manage-

overtime work and support the diversification of working styles,

ment plan and raising the quality of sales clerical operations,develop the capability of young bank employees at an early stage

and human resources quality to a higher level.

and strengthen the capabilities of part-time workers.

Upgrading the Management and Controls Framework
We will continue to work to make our business management

Next, in terms of internal audits, the Internal Audit

structure more advanced in order to firmly support the busi-

Division was changed into an organization structure underness model we are aiming for under the new medium-termthe direct control of the Board of Directors in April of thismanagement plan and further improve the level of trust fromyear, and a dedicated director for the Internal Audit Divisioncustomers.

was assigned in June to strengthen the internal audit struc-Firstly, as compliance is fundamental for banks to faith-ture.

fully carry out their social responsibilities and public mis-

In addition, we will continue to invest management

sions, in order to earn the constant trust of our stakeholders,resources and develop a more advanced risk management

we are committed to instilling greater awareness of compli-

structure in order to strengthen credit risk management andance among all executives and employees as we enhance themarket risk management in response to the diversification ofefforts to build a more effective compliance framework.

investments in securities.

In Partnership with the Community
As recently announced, a public share offering was conduct-

Since the management environment surrounding regional

ed in June, and a capital increase through a third-party allot-

banks has gotten more difficult, we will strive for a respon-

ment of shares was conducted in July. Thanks to these

sive management capable of meeting the challenges.

efforts, we managed to procure approximately ¥17.0 billion

Moreover, all our executives and employees will provide

in capital.

high-quality services in order to contribute to the develop-

The Bank has grown together with the community and its
stakeholders up until now, and it hopes to contribute to thegrowth of the region going forward by responding toment of the regional economy and live up to the expectationsof our stakeholders.
We look forward to your continued support.

demands for funds even more actively.

President Takashi Hashimoto5

Medium-Term Management Plan
Start of the New Medium-Term Management Plan on April 1
The Bank embraces a management vision up to its 90th anniversary, aiming to become a bank which creates vitality in itself andthe community as “Vitality Creating Bank.” In order to achieve this management vision, the medium-term management plan titled“Vitality Creation Plan II – Changing and Taking on Challenges” was started in April of this year. This plan has set forth the threecore strategies of regional revitalization, pursuit of the Four Reforms and upgrading of management and controls. In particular, forthe pursuit of the Four Reforms, ten strategies have been set for awareness reform, sales reform, clerical operations reform andexpenses reform upon which we will strongly pursue business model reform.
Medium-Term Management Plan

Management
vision“Vitality Creating Bank” (Term: 2014 to 2024)
We aim to become a bank that creates vitality in itself and the community through i) delivering high-quality financial and consultation functions as a regional financial institution and ii) cultivating a corporate culture full of dreams and pride.

Medium-term
management
plan(Term: April 2017 to March 2020)“Vitality Creation Plan II– Changing and Taking on Challenges”
We have set the three years as a period in which to strive to change to a robust structure in consideration of
the changing financial climate. For the plan’s final year, coinciding with our 85th anniversary, we will
endeavor to achieve good results in terms of earnings and financial position.

(Positioning of the new medium-term
management plan)
The 85th
anniversary(June 2019)
The 80th
anniversary(2014)

6“Vitality Creation Plan”“Vitality Creation Plan II– Changing and Taking on
Challenges”(April 2014 toMarch 2017)(April 2017 toMarch 2020)

The 90th
anniversary(2024)

● Basic philosophy

Create regional economic vitality

Deliver customer-centric services

Make utmost efforts to revitalize our salestarget areasin pursuit of co-creation with communities

Deliver optimum and sophisticated services bypromptly meeting the increasingly diverse needs ofcustomers

Improve productivity and profitability throughenhancing the quality of sales, clerical operations andhuman resources based on the Four Reforms (toawareness, sales, clerical operations and expenses)● Priority strategies and initiatives policy

Upgrade the management and controls
framework
Bolster risk controls and earnings management, thusbuilding a management and controls framework
capable of responding to the changing environment
in a flexible manner(Initiatives policy)
Create regional vitality by playing a leading role in community,
people and job areas

1) Regional revitalization
Human resources andorganizational strategy

Vitalize our human resources and organization by fostering the spiritof taking on challenges among the bankers, bolstering the humanresource development system and realizing a work-life balance

Platform and market strategy

Revise the framework of our branches and sales, bolster points-ofcontact with customers and deliver high-quality services

Retail business strategy

Serve as the closest possible consultant for customers of all
generations by paying proper attention to their life stages

Corporate business strategy

Aim to become the true main bank for the customer through exercising the consultation
function and delivering solutions according to the company’s growth stage

Osaka strategy

Raise the Bank’s presence by actively allocating or reallocating ourcorporate resources based on branch continuity

Municipality strategy

Seek to develop relationships with individual municipalities by
delivering financing and consulting functions to themMarket investment strategy

Expand profits by diversifying our investment methods while
taking risks appropriately

Group strategy

Grow consolidated profits through delivering comprehensive
financial services by tapping into our Group’s capabilities

Clericaloperations
reformClerical operations strategy

Fundamentally overhaul the clerical operations of branches and theheadquarters, thus transforming the organization into a more efficient one

ExpensesreformExpenses strategy

Awareness
reform2) Pursuit of the Four
Reforms

Sales
reform3) Upgrading of management and controls

Medium-Term Management Plan

Improve productivity and profitability
through reviewing operations

Revise expenses as a whole to transform our expense structure
Upgrade our management and controls to firmly support thebusiness model and to obtain even greater trust from customers● Target metrics
Fiscal 2016 Result

Fiscal 2019 Target

Capital procurement

OHR

74.45%

Less than 70%

Non-interest income ratio

10.40%At least 20%

Capital adequacy ratio

9.19%

Approx. 10%

ROA

0.24%

At least 0.3%

ROE

4.88%

At least 5%

The Bank announced a “New Share Issuance andSecondary Offering of Shares” on May 2017, andas a result, it was able to raise capital of ¥15.0 billion through a public share offering in June and¥2.2 billion in a third-party allotment of shares(secondary offering through an overallotment) inJuly.
The Bank will continue to do its utmost to provide funds for SMEs and other businesses in order
to contribute to the creation of regional economic
vitality and to grow together with its customers.

Calculation formals is more common plural form for the metrics
・OHR: Expenses/Core business gross profit
・Non-interest income ratio: (Fees and commissions + Other operating
income (excluding gains/losses on bonds (JGBs,etc.))/Core gross business profit: Core capital/Risk assets
・Capital adequacy ratio
・ROA: Core net business profit/Total assets
・ROE: Net income/Net assets

7Compliance
Compliance refers to strict observance of ethics and social

The Bank takes the following approach in order tonorms as well as laws, regulations, government ordinances

increase awareness of compliance and respond to legal risks.

and the Bank’s regulations. Compliance is essential forbanks to faithfully carry out their social responsibilities andpublic missions.

Thorough Execution of Compliance

Compliance● In recognition of the public mission and social responsibilities that financial institutions need to perform, the Bank regards
compliance with laws and regulations as the most important management issue and has established a Charter of Corporate
Behavior which consists of Basic Policies and a Code of Conduct for all officers and employees to follow to gain the trust of all
our stakeholders, including local communities, our customers and our shareholders.
● To establish a basic framework for the compliance system, we have established our compliance regulations and rules fordisciplinary action and demonstrate fairness and transparency in the administration of disciplinary action as means of establishinga clear stance on compliance with laws and regulations.
● Deliberations and decisions in matters of compliance are the responsibility of the Compliance Committee, which is chaired by the
President and operates horizontally across the bank’s organizational structure. Plans and supervision of compliance are carriedout in the Compliance & Risk Management Division.
● A Compliance Program consisting of concrete plans to achieve compliance is drawn up each year and undergoes appropriate
review.
● The Bank strives to properly operate a Compliance Hotline as part of its internal reporting system that was established to prevent
legal violations and misconduct before they occur, to discover them promptly if they occur and to rectify them immediately.
● To instill a compliance mindset throughout the Bank, we have compiled a Compliance Handbook, which serves as a guide forachieving compliance and has been distributed to all officers and employees, and regularly conduct seminars and other grouptraining at the workplaces of individual workgroups.
● The Bank has established Regulations on Response to Antisocial Forces in order to take a resolute stand against anti-social forcesthat pose a threat to the order and security of civil society and takes strong measures to intervene and block any attempt by suchforces to create any relationship with the Bank.

8

Risk Management
In recent years, the management environment surrounding
financial institutions has changed drastically, and the risks
they face have become more diversified and complex.
The Bank regards risk management as one of its mostimportant management issues and aims to create an advanced

risk management system so that the Bank can maintainappropriate and sound management and provide reliable services to its customers.

Risk Management Coordination
risks by using the integrated risk management method,
intending to keep the amount of risks and its capital adequacy at appropriate levels in the light of its management vitality. Biannually, the Bank determines risk capital (risk based
amounts) for each category of risk within the scope of its
capital adequacy to limit the value of each risk (e.g., VaR) to
the amount of risk capital.
The situation of each risk is evaluated at a monthly ALM
Committee meeting which decides the appropriate level ofrisk control to implement, aiming to conduct more
effective and efficient risk and return management from theviewpoint of maintaining sound management and higher
profitability alongside effective utilization of capital.

Risk Management

To cope with the various risks that the Bank faces in its banking business, the Bank has established specific units for eachcategory of risk. The Bank also incorporates the Risk
Management Division responsible for risk management coordination in order to gain a precise understanding of thenature and extent of risks and take expeditious steps toward
their management.
Furthermore, the Bank defines its basic risk management
policies in risk management regulations and other requirements, including the Risk Management Coordination
Regulations, in an effort to appropriately manage the risks.
Moreover, the Bank has adopted a policy of Risk
Management Coordination under which it quantifies various
Risk Management Structure
Board ofDirectors

Board ofCorporate Auditors

Managing Directors’Committee

Emergency Council(Warning Council)

ALM Committee(ALM Subcommittee)

Committees

Operational Risk Management Committee(Operational Risk Management Subcommittee)

Compliance Committee(Compliance Subcommittee)

Organization

Risk Management Structure

Compliance Structure

Supervising Division

Risk Management Division

Compliance Management Division

Risk Categories

Credit Risk(

Risk
Management
Division

Main Divisionin Charge) (Market Risk

)(

)(

Risk
Management
Division

Operational Risk
(Risk Management Division)

Liquidity Risk

)(

Risk
Management
Division

Administrative Risk
Operations Support
Division

Systems Risk

Legal Risk
ComplianceManagement
Division) (Systems Division) (Personnel Risk
Personnel
Division)(

Tangible Assets Risk
General Affairs
Division) (Reputational Risk
Corporate
Planning
Division) (Operations

Divisions of Headquarters/Branches/Consolidated Subsidiaries

Auditing

Internal Audit Division)(

Compliance
Compliance Management
Division)

External Auditing

9

Risk Management• Managing Internal Capital 

Risk Management

Managing Internal Capital refers to the implementation of
measures to maintain a sufficient level of internal capital,
capital adequacy assessment and computation of the capital
adequacy ratio.
The Bank conducts a quarterly assessment of its internal
capital adequacy by analyzing factors that cause the capital
adequacy ratio to fluctuate.
We also use the integrated risk management method toquantify the various risks faced by the Bank, and we regularly compare the level of these risks with the Bank’s internal
capital so as to control and carry out the assessments of ourinternal capital adequacy for each risk.

As for the capital adequacy assessment, the Bank positions itself to be able to review the allocation of its internal
capital, discuss necessary internal capital strategies and othernecessary actions through the monthly ALM Committee
meeting. We intend to maintain a sound management withthe help of appropriate risk control practices and increase
profitability through the effective utilization of our internal
capital by fully implementing this internal capital management structure.

• Managing Credit Risk 
Credit risk is the risk of the value of assets decreasing or disappearing due to factors such as deterioration in the financial
condition of a borrower and the incurring of loss as a result.
To ensure the soundness of its assets, the Bank has established the Risk Management Division and Credit Analysis
Division as credit risk management departments that are separate and independent from business operations departments.
The Risk Management Division plans and supervises thecredit risk management structure within the Bank, conducts
credit portfolio analysis by segment and current status analysis by managing the levels of credit concentration on major
creditors for each industry and rating group and strives tobuild a sound credit portfolio by measuring credit risks using
statistical calculation methods for future potential loss.
The Credit Analysis Division consists of the Credit
Analysis Group, which handles general screening and industry-specific screening, the Management Group, which intensively supervises borrowers whose business performance has
deteriorated, and the Business Vitalization Support Office,which was established to assist borrowers with businessrestructuring and recovery initiatives. Together these units
form a structure that supports flexible risk management tailored to the specific circumstances of each customer.
Our credit analysis and risk management measures
include rigorous self-assessment, credit ratings consistent
with the borrower classifications used in the self-assessmentand other methods with which the Bank objectively recognizes and manages each customer’s credit capability. In addition, we have a policy of setting an interest rate (Pricing) tobe applied to individual customers according to their ratingbased creditworthiness. Through this, we take measures tostrengthen our credit risk management and increase profitability.
The Bank regularly and thoroughly reviews transaction
terms and establishes credit limits for borrowers with debt
exceeding a certain amount, with a view to reducing credit
risk by conducting strict credit control.

• Managing Asset Appraisals 
Asset Appraisals are for the review of assets held by financial
institutions in order to determine the accurate status of theinstitution’s assets. It is an important method of credit risk
management and a preliminary procedure to accurately
assess the amount of depreciation and allowances. Assetassessment conducted by the financial institution itself isreferred to as a self-assessment.
The Bank carries out an assessment of its assets in which
the actual assessments are conducted by its operating branches

in conformity with the Regulations on Self-Assessment of
Assets. Assessment results are then subjected to a rigorous
verification process in which the results are examined by theCredit Analysis Division and further audited by the Internal
Audit Division. According to the audit results, the Bank
determines the appropriate amounts of depreciation andallowances. In this way, the Bank strives to perform appropriate asset assessment practices and maintain and improve
the soundness of its assets.

• Managing Market Risk Market risk is the risk of fluctuations in the value of assets
and liabilities or profits of the Bank due to fluctuations ininterest rates, exchange rates, stock prices, etc., and theincurring of losses as a result.
The Bank controls its market operations under a system ofreciprocal checks and balances based on a clear demarcation

10

between front office units, which implement transactions,and back office units, which carry out administrative processing. The middle office unit responsible for risk management
is the Risk Management Division, which develops risk management systems, checks compliance with risk management
regulations and other requirements and monitors the posi-tions and profit performance of market units. The Risk
Management Division also carries out wide-ranging analyses
to quantify the risk levels of assets and liabilities, including
deposits, loans and securities. In its analyses, the divisionuses a variety of analytical techniques, including the value atrisk (VaR) and basis point value (BPV) methods and interest
rate fluctuation simulations. The results of this work are used
to provide timely reports to management.
Allowable risk limits are measured based on VaR anddetermined by the Bank’s ALM Committee biannually inconsideration of its capital status, market conditions andother factors. Market operations staff members make efforts
to generate profits while complying with these allowable risk
limits. Every month, the ALM Committee obtains actual risk
and revenue results from each market operation and discusses appropriate ways to control risks and generate earnings
efficiently by taking into account the market prospects andother conditions. In addition, the Bank conducts stress tests
by using scenarios that capture the characteristics of market
environments and its portfolios in order to understand theimpact of extreme market fluctuations exceeding VaR projections, bracing for contingency events.

Liquidity risk, also known as fund-raising risk, is defined as
the risk of loss due to an obstacle in raising the required
funds either because of a mismatch between the use and procurement of funds or an unexpected outflow of funds or
being forced to borrow at higher interest rates than usual.
According to monthly fund management plans formulatedby the ALM Committee, the Financial Investment Division
closely manages the Bank’s cash flow position on a day-today basis, and the Risk Management Division monitors the
management conditions. The ALM Committee is also

responsible for overall monitoring and management of cash
flow risk, including the monitoring of assets available for liquidation and the amount of funds that the Bank can procure.
The cash flow situation is classified into one of three levels according to financial situations: “regular phase,” “concern phase” and “crisis phase.” The Bank has developed
management systems that can be flexibly implemented ineach of these situations.

Risk Management• Managing Liquidity Risk • Managing Operational Risks Operational risk is the risk of the Bank incurring a loss due
to inadequate or failed processes of banking operations,activities of executives and employees (including part-timeand temporary and other similarly classified workers) or systems as well as external events.
At the Bank, departments in charge of operational risks
apply the perspectives of specialists to the management ofadministrative risk, systems risk, legal risk, personnel risk,

tangible assets risk and reputational risk.
In addition, information about loss from operational accidents and results of potential risk analysis, etc., are collectively reported to the Operational Risk Management
Committee, which understands and manages each risk comprehensively. This enables the Bank to preferentially deal
with major risks and minimize the effects of the risks.

• Managing Administrative Risk Administrative risk refers to the risk of incurring loss as aresult of neglecting accurate administrative processes alongside occurrences of accident or fraud.
The Bank reinforces the provisions of its administrative
regulations and requires strict staff compliance with the regulations to achieve customer confidence in its accurate andstrict administration. At the same time, the Bank aims toraise executives and employees administrative work standards by conducting regular training programs and temporary
office work guidance. In addition, the Bank intends to establish more accurate and efficient administrative operations byfacilitating the systemization and centralization of administrative processes.

• Managing System Risk 
System risk refers to failures or malfunctions of the computer system and loss incurred associated with inadequate systems, etc. Furthermore, system risk includes the risk of loss
from the unauthorized use of computers.
The Bank incorporates a system which copes with unexpected system failures or network errors and swiftly resumes
operations. It is prepared for these events with stand-by
equipment for all the existing equipment in the network system and dual communication lines. Also, the Bank has formulated a manual which directs necessary action as definedby its contingency plans in the event of a large scale disasterand has developed a decentralized data administration systemand “back-up center.”With a view to conducting strict control of customer dataand other confidential information, the Bank takes various
measures to prevent unauthorized use of the computer system and leakage of information. It addresses the provision ofsafer and more assured services by establishing security measures such as the formulation of handling regulations forclassified data, encryption of computer data and important
information such as security codes and others.

11

Risk Management
In addition, the Nanto Bank CSIRT*, which operates horizontally across the Bank’s organizational structure, was createdin March 2016 in response to the growing threat of cyberattacks, among other issues, in an effort to strengthen systems

for promptly responding to cyber-attacks through means suchas implementing various security measures and conducting
cyber-attack response drills.
*CSIRT: Computer Security Incident Response Team• Managing Legal Risk 
The term “legal risk” refers to the risk of incurring loss ordamage arising from violations of obligations resulting fromnegligence concerning customers and inappropriate business
and/or market practices.

The Bank has attempted to avoid and mitigate legal risks
via legal examination by external experts such as corporate
lawyers and the Compliance Division.

Risk Management• Managing Personnel Risk 
Personnel risk refers to the risk of loss and damage the Bank
can suffer due to unfairness/unjustness in terms of personnel
management concerning compensation, benefits, dismissal
and acts of discrimination such as sexual harassment, etc.
The Bank recognizes that economic loss, loss in confidence, etc., due to the materialization of personnel risk canhave a major impact on the Bank’s management and business
operations and strives to minimize the risk through theappropriate management of such risk.

• Managing Tangible Assets Risk 
Tangible assets risk involves the risk of loss from impairment
of or damage to tangible assets due to disaster or other
unforeseeable events.
The Bank recognizes that economic loss, loss in confidence, etc., due to the materialization of tangible asset risk

can have a major impact on the Bank’s management andbusiness operations and strives to minimize the tangible
assets risk through the appropriate management of such risk.

• Managing Reputational Risk 
Reputational risk refers to the risk of loss or damage incurred
if an organization has fallen into discredit due to the deterioration of its reputation or through damaging rumors, etc.
The Bank recognizes that economic loss, loss in confidence, etc., due to the materialization of reputational risk canhave a major impact on the Bank’s management and business
operations and strives to minimize that risk through appropriate management. In the event of the spread of damaging
rumors about the Bank, the Bank will take appropriate andswift action to curtail them and revitalize its reputation.

Internal Audit Posture
For the enhancement and reinforcement of risk management,
it is necessary for the PDCA cycle to function effectively inan aim for self-improvement while each division, branch,
etc., that conducts operations management and risk management departments conduct mutual oversight for each risk.

The Internal Audit Division, an internal auditing department, promotes risk management and strives to ensure thesoundness of management and the appropriateness of business by ascertaining the risk occurrence situation for each
operation and verifying the situation of the PDCA cycle
function and providing advice as necessary.

Crisis Management Posture

12

Along with the above risk management, the Bank has formulated a Crisis Management Plan and a Crisis Management
Plan Response Manual for each type of crisis to properly
respond to the occurrence and materialization of crises related to business operations such as natural disasters, including
large-scale earthquakes, systems malfunctions or virulent
strains of influenza or other pandemics. In the event of a crisis, the Bank responds, depending on the level of emergencyof the crisis, by having the Emergency Council, Response
Headquarters, or other divisions gather information andengaging in centralized supervision and command in aneffort to minimize the impact of the crisis on its operations.
In the meantime, the Bank, as an organization responsible
for social function maintenance, takes measures to continuously provide customer services, including improvement offacilities to continue its business operations in the event ofdisasters or other events while striving to ensure the effectiveness of the crisis management posture and continuously
improve it through measures including risk management
training provided every year.

Board of Directors, Executive Officers and Corporate Auditors(As of July 1, 2017)

Takashi Hashimoto

ChairmanPresident(Representative Director)

Board of Directors and Corporate Auditors

Yasuo Ueno

Yoshihiko Kita

Naoki Minowa

Director
Senior Managing Executive Officer(Representative Director)

Director
Senior Managing Executive Officer(Representative Director)

Toru Hagihara

Shigeyori Kawai

Director
Managing Executive Officer

Director
Managing Executive Officer(Business Planning & Promotion Headquarters)

ChairmanYasuo Ueno
President
Takashi Hashimoto
Director And Senior
Managing Executive
Officers
Yoshihiko Kita
Naoki Minowa
Director And Managing
Executive Officers
Toru Hagihara
Shigeyori Kawai(Business Planning &Promotion Headquarters)

Director And
Executive Officer
Kazuomi Nakamuro(Internal Audit Division)
Directors
Hiroshi Nakagawa
Matazaemon Kitamura
Managing Executive
Officers
Kiyohide Sawamura(Osaka Regional Headquarters)
Keizo Nishikawa(Tokyo Branch)

Executive Officers
Satoru Wada
(Credit Analysis Division)
Kazuya Yokotani(Corporate Planning Division)
Tomomi Onishi(Financial Investment Division)
Kozo Togawa(Osaka Chuo Office)Kazunobu Nishikawa(Head Office)Takahiro Konaka(Operations Support Division)Takeshi Sugiura(Sakurai Branch)

Corporate Auditors
Masaaki Hashimoto
Takao Handa
Katsuhisa Yoshikawa
Masahiro Nakamura

Note:	Hiroshi Nakagawa and Matazaemon Kitamura are outside directors pursuant to Item 15, Article 2 of the Company Law and Katsuhisa Yoshikawa and Masahiro
Nakamura are outside corporate auditors pursuant to Item 16, Article 2 of the Company Law.

13

Consolidated Financial Statements
Consolidated Balance Sheets
The Nanto Bank, Ltd. and Consolidated Subsidiaries as of March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 1)Millions of yen

Consolidated Financial Statements

2017

2016

2017

Assets:Cash and due from banks (Notes 17 and 19) .................................................
Call loans and bills bought (Note 19) ............................................................
Debt purchased (Note 19) ..............................................................................
Trading account securities (Notes 19 and 20) ................................................
Money held in trust (Notes 19 and 20) ...........................................................
Securities (Notes 5, 7, 10, 19 and 20) ............................................................
Loans and bills discounted (Notes 6, 8 and 19) .............................................
Foreign exchanges (Note 6) ...........................................................................
Lease receivables and lease investment assets ...............................................
Other assets (Note 7) ......................................................................................
Tangible fixed assets (Note 9) ........................................................................
Buildings ....................................................................................................
Land ...........................................................................................................
Construction in progress ............................................................................
Other tangible fixed assets .........................................................................
Intangible fixed assets ....................................................................................
Software .....................................................................................................
Other intangible fixed assets (Note 7) ........................................................
Deferred tax assets (Note 24) .........................................................................
Customers’ liabilities for acceptances and guarantees ...................................
Reserve for possible loan losses (Note 19) ....................................................
Total assets .................................................................................................

¥ 736,472
11,7764,304
10
31,0001,686,575
3,252,218
5,031
13,86343,17841,26812,01325,582
315
3,357
4,755
4,202
552
1,307
8,995
(25,662)¥5,815,095¥ 410,198
—
3,527
362
22,0001,797,411
3,188,341
3,754
13,226
33,83440,566
11,401
25,359
304
3,500
4,697
4,145
552
1,314
10,191(23,818)¥5,505,607$ 6,564,506
104,964
38,36389
276,316
15,033,202
28,988,483
44,843
123,567
384,864
367,840
107,077
228,023
2,807
29,92242,38337,454
4,920
11,64980,176(228,736)$51,832,560

Liabilities and net assets:
Liabilities:
Deposits (Notes 7 and 19) ..............................................................................
Negotiable certificates of deposit (Note 19) ...................................................
Payables under repurchase agreements (Notes 7 and 19) ..............................
Payables under securities lending transactions (Notes 7 and 19) ...................
Borrowed money (Notes 7, 19 and 30) ..........................................................
Foreign exchanges ..........................................................................................
Other liabilities (Note 30) ..............................................................................
Liability for retirement benefits (Note 22) .....................................................
Reserve for reimbursement of deposits ..........................................................
Reserve for contingent losses .........................................................................
Deferred tax liabilities (Note 24) ...................................................................
Acceptances and guarantees ...........................................................................
Total liabilities ...........................................................................................

4,737,336
28,453
29,203504,092
205,308
136
23,41925,115
192
965
737
8,995
¥5,563,956

4,719,323
47,007—
233,648
189,724202
19,182
27,248
164
851
6,349
10,191¥5,253,894

42,226,009
253,614260,299
4,493,199
1,830,002
1,212
208,744
223,861
1,711
8,601
6,569
80,176$49,594,045

29,24926,075
161,245

29,24926,075
150,620

260,709
232,418
1,437,249(1,828)(1,864)(16,293)214,742
43,526(409)(6,831)36,284
112
251,139¥5,815,095

204,080
57,072(620)(8,956)47,496
136
251,712¥5,505,607

1,914,092
387,966(3,645)(60,887)
323,415998
2,238,515$51,832,560

Net assets (Note 3):
Common stock: Authorized 64,000 thousand shares in 2017and 640,000 thousand shares in 2016
Issued 27,275 thousand shares in 2017 and
272,756 thousand shares in 2016 .........................................
Capital surplus ................................................................................................
Retained earnings ...........................................................................................
Less treasury stock: Issued 437 thousand shares in 2017and 4,454 thousand shares in 2016 ...............................
Total stockholders’ equity
Valuation difference on available-for-sale securities (Note 20) .....................
Deferred gains or losses on hedges (Note 21) ................................................
Accumulated adjustments for retirement benefits (Note 22) .........................
Total accumulated other comprehensive income .......................................
Stock acquisition rights ................................................................................
Total net assets ...........................................................................................
Total liabilities and net assets ....................................................................
See Notes to Consolidated Financial Statements.

14
14

Consolidated Statements of Income
The Nanto Bank, Ltd. and Consolidated Subsidiaries for the Years Ended March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 1)Millions of yen

2016

2017

¥32,372
19,824618
17,176
6,360
4,878
81,230¥34,734
17,927714
17,804
1,092
4,143
76,417$288,546
176,700
5,508
153,097
56,68943,479724,039

Expenses:
Interest expense:
Interest on deposits ....................................................................................
Interest on borrowings and rediscounts .....................................................
Interest on payables under securities lending transactions ........................
Other interest expense ................................................................................
Fees and commissions ....................................................................................
Other operating expenses (Note 13) ...............................................................
General and administrative expenses (Note 14) .............................................
Other expenses (Note 15) ...............................................................................
Total expenses ........................................................................................

1,201
475
1,725
335
8,807
3,483
43,355
5,066
64,450

2,405
351
733
303
8,834
1,483
45,1392,334
61,586

10,705
4,233
15,3752,986
78,50031,045
386,442
45,155
574,471

16,77914,831

149,558

4,624
(353)
4,270
12,508—¥12,508

898
1,469
2,367
12,463303¥12,159

41,215(3,146)38,060111,489—$111,489

Income before income taxes .............................................................................
Income taxes (Note 24):
Current ............................................................................................................
Deferred ..........................................................................................................
Total income taxes .................................................................................
Net income .........................................................................................................
Net income attributable to non-controlling interests ....................................
Net income attributable to owners of parent .................................................

U.S. dollars(Note 1)Yen

Per share of common stock (Note 28):
Net income - basic ..........................................................................................
Net income - diluted .......................................................................................
Dividends .......................................................................................................

¥466.05465.51
70.00

Consolidated Financial Statements

2017

Income:Interest income:Interest on loans and bills discounted ........................................................
Interest and dividends on securities ...........................................................
Other interest income .................................................................................
Fees and commissions ....................................................................................
Other operating income (Note 11) .................................................................
Other income (Note 12) .................................................................................
Total income ..........................................................................................

¥453.22452.60
70.00

$4.15
4.14
0.62

See Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income
The Nanto Bank, Ltd. and Consolidated Subsidiaries for the Years Ended March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 1)Millions of yen

Net income ..........................................................................................................
Other comprehensive income (Note 16):
Valuation difference on available-for-sale securities .....................................
Deferred gains or losses on hedges ................................................................
Adjustments for retirement benefits (Note 22) ...............................................
Total other comprehensive income ............................................................
Total comprehensive income for the year ...........................................................
Total comprehensive income attributable to:
Owners of parent ............................................................................................
Non-controlling interests ................................................................................
See Notes to Consolidated Financial Statements.

2017

2016

2017

¥ 12,508¥ 12,463$ 111,489(13,546)
210
2,124(11,211)¥ 1,297(1,753)47(7,676)(9,382)¥ 3,080(120,741)
1,871
18,932(99,928)$ 11,560¥ 1,297—¥ 2,784295$ 11,560—

15
15

Consolidated Financial Statements
Consolidated Statements of Changes in Net Assets
The Nanto Bank, Ltd. and Consolidated Subsidiaries for the Years Ended March 31, 2017 and 2016

Number ofshares ofcommonstock(thousands)

Commonstock

Consolidated Financial Statements

Balance at April 1, 2015 ................... 272,756 ¥29,249
Cash dividends ...............................
——Net income attributable to ownersof parent .........................................
——
Purchase of treasury stock .............
——
Disposition of treasury stock .........
——
Transfer from retained earnings tocapital surplus ................................
——
Change in treasury shares of parent
arising from transactions with noncontrolling stockholders ................
——Net changes in the items other thanstockholders’ equity .......................
——
Balance at April 1, 2016 ................... 272,756 ¥29,249
Reverse stock split ......................... (245,480)—
Cash dividends ...............................
——Net income attributable to ownersof parent .........................................
——
Purchase of treasury stock .............
——
Disposition of treasury stock .........
——
Transfer from retained earnings tocapital surplus ................................
——Net changes in the items other thanstockholders’ equity .......................
——
Balance at March 31, 2017 (Note 3) ... 27,275 ¥29,249

Commonstock

CapitalsurplusCapitalsurplusRetainedearnings¥18,813 ¥140,209

Less
treasurystockMillions of yen
Valuationdifference
Deferredongains oravailablelosses on
for-salehedgessecurities¥(1,907) ¥58,818

Accumulated
adjustments
Stock
Nonforretirement acquisition controllingrightsinterests
benefits¥(668) ¥(1,279)

16
16¥7,935 ¥251,318—(1,743)

—

—

—

—

—

—

(1,743)——(5)

12,159
—
—

—
(8)
51

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

12,159
(8)
45

5

(5)

—

—

—

—

—

—

—

7,261

—

—

—

—

—

—

—

7,261

47
(7,676)¥(620) ¥(8,956)
—
—
—
—

(10)
¥136
—
—

—
—
—
(1,745)¥26,075 ¥150,620 ¥(1,864) ¥57,072
—
—
—
—
—
(1,878)——(7,935) (17,320)— ¥251,712———(1,878)——(4)

12,508
—
—

—
(19)
55

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

12,508
(19)
50

4

(4)

—

—

—

—

—

—

—

210
2,124
¥(409) ¥(6,831)

(23)
¥112

—
—
¥26,075 ¥161,245

Retainedearnings— (13,546)¥(1,828) ¥43,526— (11,235)— ¥251,139

Thousands of U.S. dollars (Note 1)
Valuationdifference
Deferred AccumulatedLess
on available- gains or
Stock
Nonadjustments
treasury
for-salelosses on for retirement acquisition controllingstock
securities
hedgesrightsinterests Total net assets
benefits

Balance at April 1, 2016 ................... $260,709 $232,418 $1,342,543 $(16,614) $508,708 $(5,526) $(79,828)
Cash dividends ...............................
—(16,739)—————
Net income attributable to ownersof parent .........................................
—
111,489——————
Purchase of treasury stock .............
—
—
(169)
—
—
—
—
Disposition of treasury stock .........
(35)
—
490
—
—
—
Transfer from retained earnings tocapital surplus ................................
35
(35)
—
—
—
—
—
Net changes in the items other thanstockholders’ equity .......................
——— (120,741)
1,871
18,932—
Balance at March 31, 2017 (Note 3) ... $260,709 $232,418 $1,437,249 $(16,293) $387,966 $(3,645) $(60,887)
See Notes to Consolidated Financial Statements.

¥146

Total net
assets$1,212—— $2,243,622—(16,739)

—
—
—

—
—
—

111,489
(169)
445

—

—

—

(205)
$998

—
(100,142)— $2,238,515

Consolidated Statements of Cash Flows
The Nanto Bank, Ltd. and Consolidated Subsidiaries for the Years Ended March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 1)Millions of yen

Cash flows from investing activities
Purchases of securities ...................................................................................
Proceeds from sales of securities ...................................................................
Proceeds from maturities of securities ...........................................................
Increase in money held in trust ......................................................................
Decrease in money held in trust .....................................................................
Purchase of tangible fixed assets ....................................................................
Proceeds from sales of tangible fixed assets ..................................................
Purchase of intangible fixed assets .................................................................
Proceeds from state subsidy ...........................................................................
Other ...............................................................................................................
Net cash provided by (used in) investing activities ...................................
Cash flows from financing activities
Dividends paid ................................................................................................
Dividends paid to non-controlling stockholders ............................................
Purchase of treasury stock ..............................................................................
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation .....................................................
Other ...............................................................................................................
Net cash used in financing activities ..........................................................
Effect of exchange rate changes on cash and cash equivalents ....................
Net increase (decrease) in cash and cash equivalents ....................................
Cash and cash equivalents at beginning of year ............................................
Cash and cash equivalents at end of year (Note 17) ......................................

2017

2016

2017

¥ 16,779
3,714
1,843
925
27
113
(52,815)
3,738(6,208)
(86)
1,858
130
68
(68)
(63,877)
18,013(18,553)
15,583¥ 14,831
4,006(2,676)
1,509
33
(94)
(53,376)
3,795(2,353)35
25,042(483)——(109,166)
28,257(16,342)
73,602$ 149,558
33,104
16,427
8,244
240
1,007
(470,763)
33,318(55,334)(766)
16,561
1,158
606
(606)
(569,364)
160,557(165,371)
138,898

147(12,554)
29,203
270,444(1,277)(65)(734)
55,007(4,237)(5,582)
251,539(1,247)23
250,315

(343)
1,569
—
98,793
2,163
(197)
506
56,550(3,930)(25,912)
95,820(943)—
94,877

1,310(111,899)
260,2992,410,589(11,382)(579)(6,542)490,302(37,766)(49,754)
2,242,080(11,115)205
2,231,170(406,747)
281,217
216,930(10,031)
1,117(2,873)—(1,594)68(84)
78,001(528,866)
140,152
255,828(196)
160(2,179)1,200(1,281)—(95)(135,277)(3,625,519)
2,506,613
1,933,594(89,410)
9,956(25,608)—(14,208)606(748)
695,258(1,879)—(19)(1,745)(1)(8)(16,748)
—
(169)

—
1
(1,897)1
326,421407,527¥733,948(967)
0(2,722)
9(43,113)450,641¥407,527—
8(16,908)8
2,909,537
3,632,471$6,542,009

Consolidated Financial Statements

Cash flows from operating activities
Income before income taxes ...........................................................................
Depreciation ...................................................................................................
Increase (decrease) in reserve for possible loan losses ..................................
Increase (decrease) in liability for retirement benefits ...................................
Increase (decrease) in reserve for reimbursement of deposits .......................
Increase (decrease) in reserve for contingent losses ......................................
Interest income ...............................................................................................
Interest expense ..............................................................................................
Loss (gain) on investment securities ..............................................................
Loss (gain) on money held in trust .................................................................
Foreign exchange losses (gains) .....................................................................
Losses (gains) on sales of fixed assets ...........................................................
Loss on reduction of non-current assets .........................................................
State subsidy ...................................................................................................
Net decrease (increase) in loans and bills discounted ....................................
Net increase (decrease) in deposits ................................................................
Net increase (decrease) in negotiable certificates of deposit ..........................
Net increase (decrease) in borrowed money ..................................................
Net decrease (increase) in due from banks (excluding due fromthe Bank of Japan) ..........................................................................................
Net decrease (increase) in call loans and bills bought ...................................
Net increase (decrease) in call money ............................................................
Net increase (decrease) in payables under securities lending transactions ....
Net decrease (increase) in foreign exchange assets .......................................
Net increase (decrease) in foreign exchange liabilities ..................................
Net decrease (increase) in lease receivables and lease investment assets ......
Interest received .............................................................................................
Interest paid ....................................................................................................
Other ...............................................................................................................
Subtotal ......................................................................................................
Income taxes paid ...........................................................................................
Income taxes refunded ...................................................................................
Net cash provided by operating activities ..................................................

See Notes to Consolidated Financial Statements.

17
17

Consolidated Financial Statements
Notes to Consolidated Financial Statements
The Nanto Bank, Ltd. and Consolidated Subsidiaries
Years ended March 31, 2017 and 2016

Consolidated Financial Statements

1. BASIS OF PRESENTATION
The accompanying consolidated financial statements of The Nanto Bank,
Ltd. (the “Bank”) and its consolidated subsidiaries (together, the “Group”)
have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting
regulations and the Ordinance for Enforcement of the Banking Law and in
conformity with accounting principles generally accepted in Japan, which
are different in certain respects from the application and disclosure requirements of International Financial Reporting Standards.
The accompanying consolidated financial statements have been restructured and translated into English, with some expanded descriptions, fromthe consolidated financial statements of the Bank prepared in accordancewith Japanese GAAP and filed with the appropriate Local Finance Bureauof the Ministry of Finance as required by the Financial Instruments andExchange Act. Some supplemental information included in the statutory
Japanese language consolidated financial statements, but not required forfair presentation, is not presented in the accompanying consolidated financial statements.
As permitted by the Financial Instruments and Exchange Act of Japan,
amounts less than one million yen have been omitted. As a result, the totals
shown in the financial statements do not necessarily agree with the sum of
the individual amounts.
The translation of the Japanese yen amounts into U.S. dollar amounts is
included solely for the convenience of the readers outside Japan, using theprevailing exchange rate at March 31, 2017, which was ¥112.19 to
US$1.00. The translations should not be construed as representations that
the Japanese yen amounts have been, could have been or could in the future
be converted into U.S. dollars at this or any other rate of exchange.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Principles of consolidation
The accompanying consolidated financial statements include the accountsof the Bank and its ten subsidiaries at March 31, 2017 (ten in 2016).
The Bank has one (one in 2016) unconsolidated subsidiary, namely,
Nanto Sixth Industry Support Investment Limited Partnership. The unconsolidated subsidiary is excluded from the scope of consolidation because
the portion of its assets, net income (loss), retained earnings, accumulated
other comprehensive income and others that correspond to the Bank’s equity are immaterial to the extent that its exclusion from the scope of consolidation does not preclude reasonable judgment of the Group’s financial
position and results of operations.
The Bank has no affiliates over which it has the ability to exercise significant influence over operating and financial policies.
The Bank has one unconsolidated subsidiary (one in 2016) not accounted for by the equity method, namely, Nanto Sixth Industry Support Investment Limited Partnership, and one (one in 2016) affiliate not accounted forby the equity method, namely, Nara Prefecture Tourism Revitalization Investment Limited Partnership. The unconsolidated subsidiary and affiliate
not accounted for by the equity method are excluded from the scope of theequity method because its effect on the accompanying consolidated financial statements is not significant in terms of the portion of its net income(loss), retained earnings, accumulated other comprehensive income, andothers which correspond to the Bank’s equity.
All consolidated subsidiaries have fiscal years ending on March 31.
All significant intercompany accounts, transactions and unrealized
profits on transactions are eliminated.
b. Cash and cash equivalents
In preparing the consolidated statements of cash flows, cash and cash
equivalents represents cash and due from the Bank of Japan.

18
18

c. Finance leases
As lessor:
Finance leases are accounted for in a manner similar to that used for ordinary sale transactions. Revenue from finance lease transactions and related
costs are recognized upon receipt of lease payments. Finance leases whichtransfer ownership of the lease assets to the lessee are recognized as leasereceivables, and all finance leases which do not transfer ownership of thelease assets to the lessee are recognized as lease investment assets.
As for finance leases which commenced before April 1, 2008 and do nottransfer ownership of the lease assets to the lessee, the appropriate bookvalue (net of accumulated depreciation and amortization) of tangible andintangible fixed assets as of March 31, 2008 was recorded as the beginningbalance of “Lease receivables and lease investment assets,” and the total
amount of interest equivalent for the remaining lease term after the adoption of the “Accounting Standard for Lease Transactions” (AccountingStandards Board of Japan (“ASBJ”) Statement No. 13, issued on March 30,2007) is allocated over the remaining lease term using the straight-line
method.
Differences between income before income taxes for the fiscal years
ended March 31, 2017 and 2016 and income before income taxes calculated as if the accounting treatments for the ordinary sale transactions had
been applied to the finance leases which do not transfer ownership of theleased assets to the lessee are not material.
d. Securities
Trading securities are stated at fair value. Gains and losses realized on disposal and unrealized gains and losses from market value fluctuations arerecognized as gains or losses in the period of the disposal or the change.
Cost of sales for such securities is determined using the moving averagemethod. Held-to-maturity debt securities are stated at amortized cost on astraight-line method, cost of which is determined using the moving averagemethod. Available-for-sale securities with available fair values are stated atfair value in principle based on the market price as of the fiscal closing date.
Unrealized gains and losses on available-for-sale securities are reported,
net of applicable income taxes, as a separate component of accumulated
other comprehensive income. Available-for-sale securities for which it isextremely difficult to identify the fair value are stated at moving average
cost.
If the fair value of held-to-maturity debt securities or available-for-salesecurities declines significantly, the securities are stated at fair value, andthe difference between the fair value and the carrying amount is recognized
as a loss in the period of the decline. In such a case, the fair value will be
the carrying amount of the securities at the beginning of the next fiscal year.
Securities managed as trust assets in the individually managed money
held in trust primarily for securities management purposes are measured atfair value.
e. Derivatives and hedge accounting
Derivatives are measured at fair value.
To account for hedging transactions in connection with interest rate risk
arising from financial assets and liabilities, the Bank applies the deferredhedge accounting method stipulated in “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in
the Banking Industry” (JICPA Industry Audit Committee Report No. 24,
February 13, 2002). The Bank assesses the effectiveness of such hedges in
offsetting movement in the fair value from changes in interest rates by classifying the hedged items, such as loans and deposits, and the hedging instruments, such as interest rate swaps, by their maturity. Regarding cash
flow hedges, the Bank assesses the effectiveness by verifying the correlation of the hedged items with the hedging instruments.

f. Tangible fixed assets (except for leased assets)
Depreciation of tangible fixed assets of the Bank is computed by the declining-balance method, except for buildings (excluding facilities attached tobuildings and structures acquired on or before March 31, 2016 which are
depreciated by the declining- balance method) which are depreciated by thestraight-line method. The estimated useful lives of major items are as follows:
6 to 50 years
Buildings
Others3 to 20 years
Depreciation of the assets of the consolidated subsidiaries is computed
principally by the declining-balance method over the estimated useful lifeof the asset.
g. Intangible fixed assets (except for leased assets)
Amortization of intangible fixed assets is computed by the straight-line
method. Acquisition costs of software to be used internally are capitalized
and amortized by the straight-line method primarily over a useful life of
five years.
h. Lease assets
Lease assets with respect to finance leases that do not transfer ownership of
tangible fixed assets and intangible fixed assets are depreciated or amortized using the straight-line method with the assumption that the term of thelease is the useful life. Residual values of leased assets are the guaranteedvalues determined in the lease contracts or zero for assets without suchguaranteed value.
i. Reserve for possible loan losses
The reserve for possible loan losses is provided according to predetermined
standards. For loans to insolvent customers who are undergoing bankruptcy
or other special liquidation (“bankrupt borrowers”) or who are in a similar
financial condition (“effectively bankrupt borrowers”), the reserve for possible loan losses is provided based on the amount of the claims net of theamount expected to be recovered from collateral and guarantees and net ofthe deducted amount mentioned below. For the unsecured and unguaranteed portions of loans to customers not presently in the above circumstances, but for whom there is a high probability of so becoming (“likely to
become bankrupt borrowers”), the reserve for possible loan losses is provided for the estimated unrecoverable amounts determined after an evaluation of the customer’s overall financial condition. For other loans, thereserve for possible loan losses is provided for based on the Bank’s actual
rate of loan losses in the past.
All the claims are assessed by the operating divisions based on the selfassessment criteria on asset quality, and the assessment results are auditedby the Asset Audit Division, which is independent from the operating divisions.
For claims against “bankrupt borrowers” and “effectively bankrupt borrowers,” the amount exceeding the estimated value of collateral and guarantees is deemed uncollectible, and is deducted directly from those claims
in principle. At March 31, 2017 and 2016, the deducted amounts were
¥6,224 million ($55,477 thousand) and ¥7,755 million, respectively. The
reserve for possible loan losses of the consolidated subsidiaries is provided
for general claims by the amount deemed necessary based on the historicalloan-loss ratio and for certain doubtful claims by the amount deemed uncollectible based on an assessment of each claim.
j. Employee retirement benefits
In calculating projected benefit obligations, expected benefits are attributed
to each period by the benefit formula basis.
Prior service costs are recognized as profit or loss at the time of occurrence.
Actuarial gains and losses are amortized from the fiscal year following
the year in which the gains and losses are recognized by the straight-line
method over a fixed period (ten years), which is within the average remaining service years of the current employees.
Consolidated subsidiaries applied the simplified method where theamount to be required for voluntary termination at the fiscal year-end isrecorded as projected benefit obligations in the calculation of their liability
for retirement benefits and retirement benefit costs.

Consolidated Financial Statements

A portion of the deferred hedge losses and gains that were previously
accounted for under the “macro hedge method,” which had been applied inorder to manage interest rate risk arising from large volume transactions inloans, deposits and other interest earning assets and interest bearing liabilities as a whole using derivatives pursuant to “Temporary Treatment for
Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee
Report No. 15, February 15, 2000) is no longer subject to hedge accounting. The deferred hedge losses and gains are being charged to “Interest income” or “Interest expense” over a 15-year period (maximum) from March
31, 2004 according to their maturity and notional principal amount. The
total amount of deferred hedge loss under the “macro hedge method” was¥0 million ($0 thousand) in 2017 and ¥1 million in 2016.
In order to hedge risk arising from the volatility of exchange rates foravailable-for-sale securities (excluding bonds) denominated in foreign currencies, the Bank applies fair value hedge accounting on the condition thatthe hedged available-for-sale securities are designated in advance and thatsufficient on-balance (actual) or off-balance (forward) liability exposure
exists to cover the cost of the hedged securities denominated in the same
foreign currency.

k. Reserve for reimbursement of deposits
A reserve for reimbursement of deposits which were derecognized as liabilities under certain conditions is provided for possible losses on the future
claims of withdrawal based on historical reimbursement experience.
l. Reserve for contingent losses
Providing for payment of the contribution to the Credit Guarantee Corporation, the Bank provides a reserve for contingent liabilities not covered byother reserves in an amount deemed necessary based on estimated losses in
the future.
m. Foreign currency translations
Foreign currency assets and liabilities are translated at fiscal year-end exchange rates.
n. Income taxes
Deferred income taxes are recorded to reflect the tax effects of temporary
differences between the carrying amounts of assets and liabilities for tax
and financial reporting purposes.
The asset and liability approach is used to recognize deferred tax assets
and liabilities for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts for income tax purposes.
o. Recognition criteria for lease income and costs for finance leases
Lease income and costs are recognized at the time of receiving lease fees.
p. Consumption taxes
Transactions subject to national and local consumption taxes are recorded
at amounts exclusive of consumption taxes.

19
19

Consolidated Financial Statements

Consolidated Financial Statements

q. Changes in accounting policies
For the year 2017
Due to amendments to the Japanese Corporation Tax Act, the Bank and its
domestic subsidiaries adopted “Practical Solution on a change in depreciation method due to Tax Reform 2016” (“Practical Issue Task Force No. 32,
June 17, 2016 (hereinafter, “PITF No. 32”)) from the current fiscal year andchanged the depreciation method for buildings, facilities attached to buildings and structures, which were acquired since April 1, 2016, from the declining-balance method to the straight-line method.
The impact on income before income taxes for the fiscal year ended
March 31, 2017 was immaterial.
For the year 2016
The Bank and its consolidated domestic subsidiaries adopted “Revised Accounting Standard for Business Combinations” (ASBJ Statement No. 21,
September 13, 2013 (hereinafter, “Statement No. 21”)), “Revised Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No.
22, September 13, 2013 (hereinafter, “Statement No. 22”)) and “Revised
Accounting Standard for Business Divestitures” (ASBJ Statement No. 7,
September 13, 2013 (hereinafter, “Statement No. 7”)) (together, the “Business Combination Accounting Standards”), from the current fiscal year. As
a result, the Bank changed its accounting policies to recognize in capitalsurplus the differences arising from the changes in the Bank’s ownershipinterest of subsidiaries over which the Bank continues to maintain control
and to record acquisition related costs as expenses in the fiscal year inwhich the costs are incurred. In addition, the Bank changed its accounting
policy for the reallocation of acquisition costs due to the completion following provisional accounting to reflect such reallocation in the consolidated financial statements for the fiscal year in which the businesscombination took place. The Bank also changed the presentation of net income and the term “non-controlling interests” is used instead of “minority
interests.” Certain amounts in the prior year comparative information werereclassified to conform to such changes in the current year presentation.
In the consolidated statement of cash flows, cash flows from acquisition
or disposal of shares of subsidiaries with no changes in the scope of consolidation are included in “Cash flows from financing activities” and cash
flows from acquisition related costs for shares of subsidiaries with changes
in the scope of consolidation or costs related to acquisition or disposal ofshares of subsidiaries with no changes in the scope of consolidation are
included in “Cash flows from operating activities.”
With regard to the application of the Business Combination AccountingStandards, the Bank followed the provisional treatments in Paragraph 582(4) of Statement No. 21, Paragraph 44-5 (4) of Statement No. 22 and Paragraph 57-4 (4) of Statement No. 7 with application from the beginning of
the current fiscal year prospectively.
As a result, income before income taxes for the current fiscal year decreased by ¥7,268 million and capital surplus as of the end of the current
fiscal year increased by ¥7,261 million.
Capital surplus as of the end of the current fiscal year in the consolidated statement of changes in net assets increased by ¥7,261 million.
The effects on per share information are explained in Note 28, “PERSHARE INFORMATION.”
r. Additional information
The Bank and its domestic subsidiaries adopted “Revised Implementation
Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No.
26, March 28, 2016 (hereinafter, “Guidance No. 26”)) from the current fiscal year.

3. CHANGES IN NET ASSETS(1) Type and numbers of shares issued and treasury stock for the fiscal years ended March 31, 2017 and 2016 were as follows:(Thousands of shares)

Remarks

2017

Shares issued
Common stock .............................

April 1, 2016

Increase

Decrease

March 31, 2017272,756—

245,480

27,275

Total .........................................
Treasury stock
Common stock .............................

272,756—

245,480

27,275

4,454

12

4,030

437

Total .........................................

4,454

12

4,030

437

Notes 1 & 2

Notes 1, 3 & 4

Notes: 1. On October 1, 2016, the Bank implemented a one-for-ten reverse stock split.
2. The decrease in common stock of shares issued of 245,480 thousand shares is due to the reverse stock split.
3.	The increase in common stock of treasury stock of 12 thousand shares comprises an increase of 8 thousand shares due to the purchase of shares of less than one unit executed
before the reverse stock split, an increase of 1 thousand shares due to the purchase of shares of less than one unit after the reverse stock split and an increase of 2 thousand shares
due to the purchase of fractional shares less than one unit allotted in the reverse stock split.
4.	The decrease in common stock of treasury stock of 4,030 thousand shares comprises a decrease of 129 thousand shares due to the execution of stock options, a decrease of 1
thousand shares due to sales of shares of less than one unit before the reverse stock split, a decrease of 0 thousand shares due to sales of shares of less than one unit after thereverse stock split, a decrease of 3,898 thousand shares due to the reverse stock split and a decrease of 0 thousand shares due to the disposition of shares of less than one unit in
the reverse stock split.
(Thousands of shares)

Remarks

2016

Shares issued
Common stock .............................
Total .........................................
Treasury stock
Common stock .............................
Total .........................................

April 1, 2015

Increase

Decrease

March 31, 2016

272,756
272,756————

272,756
272,756

4,556
4,556

20
20

122
122

4,454
4,454

Notes 1 & 2

Notes: 1. The increase in common stock of treasury stock of 20 thousand shares is due to the purchase of shares of less than one unit.
2.	The decrease in common stock of treasury stock of 122 thousand shares comprises a decrease of 121 thousand shares due to the execution of stock options and a decrease of 0
thousand shares due to sales of shares of less than one unit.

20
20

(2) Matters concerning Stock Acquisition Rights
For the fiscal year ended March 31, 2017
Shares expected to be acquired upon exercise of stock acquisition rights
Number of sharesClassification

April 1, 2016

Total

Increase

Decrease

March 31, 2017

(Thousands of U.S.
dollars)

—

—

—

—

¥112

$998

—

—

—

—

¥112

$998

For the fiscal year ended March 31, 2016
Shares expected to be acquired upon exercise of stock acquisition rights
Number of sharesClassification
The Bank

Breakdown
Stock acquisitionrights granted as
stock options

April 1, 2015

Total

Increase

Decrease

March 31, 2016

Balance at end ofcurrent fiscal year
(Millions of yen)

—

—

—

—

¥136

—

—

—

—

¥136

Consolidated Financial Statements

The Bank

Breakdown
Stock acquisitionrights granted as
stock options

Balance at end ofcurrent fiscal year
(Millions of yen)(3) Information on dividends is as follows:(a) Dividends paid in the fiscal year ended March 31, 2017
Resolution

Annual stockholders’ meeting held on
June 29, 2016
Board of Directors’ meeting held on
November 11, 2016

Type of shares

Millions of yen (thousands of U.S. dollars), except per share amount
Aggregate amount of
Cash dividends
dividends
per share
Record date

Effective dateCommon stock¥939 ($8,369)¥3.50 ($0.03)

March 31, 2016

June 30, 2016

Common stock¥939 ($8,369)¥3.50 ($0.03)

September 30,
2016

December 5, 2016

Dividends paid in the fiscal year ended March 31, 2016
Resolution

Annual stockholders’ meeting held on
June 26, 2015
Board of Directors’ meeting held on
November 13, 2015

Type of shares

Millions of yen, except per share amount
Aggregate amount of
Cash dividends
dividends
per share
Record date

Effective dateCommon stock

¥804

¥3.00

March 31, 2015

June 29, 2015

Common stock

¥939

¥3.50

September 30,
2015

December 7, 2015(b) Dividends to be paid in the fiscal year ending March 31, 2018
Resolution

Annual stockholders’ meeting held on
June 29, 2017

Type of shares

Common stock

Millions of yen (thousands of U.S. dollars), except per share amount
Aggregate amount of
Source ofCash dividends
dividends
dividends
per share
Record date¥939 ($8,369)

Retainedearnings¥35.00 ($0.31)

March 31, 2017

Effective dateJune 30, 2017

4. STOCKHOLDERS’ EQUITY
Under the Banking Law of Japan and the Company Law, the entire amount of the issue price of shares is required to be accounted for as capital, although
the Bank may, by resolution of its Board of Directors, account for an amount not exceeding one half of the issue price of the new shares as additional paidin capital, which is included in capital surplus.
The Banking Law provides that an amount equal to at least 20% of cash dividends and other cash appropriations be appropriated and set aside as legal
earnings reserve until the total amount of legal earnings reserve and additional paid-in capital equals 100% of common stock. The total amount of legal
earnings reserve and additional paid-in capital of the Bank has reached 100% of common stock. Therefore, the Bank is not required to provide additional
legal earnings reserve.
The legal earnings reserve and additional paid-in capital may be used to eliminate or reduce a deficit by resolution of the stockholders’ meeting or may
be capitalized by resolution of the Board of Directors. On condition that the total amount of legal earnings reserve and additional paid-in capital remains
equal to or more than 100% of common stock, they are available for distribution by resolution of the stockholders’ meeting. Legal earnings reserve is included in retained earnings in the accompanying financial statements.
The maximum amount that the Bank can distribute as dividends is calculated based on the nonconsolidated financial statements of the Bank in accordance with the Company Law.

21
21

Consolidated Financial Statements

5. SHARES OR INVESTMENTS IN CAPITAL OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES
Shares or investments in capital of unconsolidated subsidiaries and affiliates at March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars

Millions of yen

2017

2016

¥32

Shares or investments in capital .........................................................................

2017

$285

¥12

Consolidated Financial Statements

6. NONPERFORMING LOANS
Nonperforming loans at March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars

Millions of yen

Loans to bankrupt borrowers ..............................................................................
Past due loans .....................................................................................................
Past due loans (three months or more) ...............................................................
Restructured loans ..............................................................................................
Total ................................................................................................................

2017

2016

2017

¥ 1,105
55,588322
11,235¥68,252¥ 1,457
62,239169
9,914¥73,781$

9,849
495,480
2,870
100,142$608,360

Bills discounted are accounted for as financing transactions in accordance with “Treatment for Accounting and Auditing of Application of AccountingStandard for Financial Instruments in the Banking Industry” (JICPA Industry Audit Committee Report No. 24, February 13, 2002). This accounting treatment allows the Bank the right to sell or pledge them without restrictions. The total face value of commercial bills and purchased foreign exchange bills
obtained as a result of discounting was ¥18,007 million ($160,504 thousand) and ¥20,050 million at March 31, 2017 and 2016, respectively.
7. PLEDGED ASSETSAt March 31, 2017 and 2016, securities of ¥842,875 million ($7,512,924 thousand) and ¥550,250 million, respectively, and other assets of ¥1,978 million($17,630 thousand) and ¥183 million, respectively, were pledged as collateral for deposits of ¥44,652 million ($398,003 thousand) and ¥61,136 million,
respectively, payables under repurchase agreements of ¥29,203 million ($260,299) and nil, respectively, payables under securities lending transactions of¥504,092 million ($4,493,199 thousand) and ¥233,648 million, respectively, and borrowed money of ¥196,612 million ($1,752,491 thousand) and ¥181,342
million, respectively.
Securities of ¥9,203 million ($82,030 thousand) and ¥70,827 million and other assets of ¥14,000 million ($124,788 thousand) and nil were pledged fortransaction guarantees at March 31, 2017 and 2016, respectively.
Unexpired lease contract claims of ¥3,754 million ($33,461 thousand) and ¥4,516 million were pledged as collateral for borrowed money of ¥3,117
million ($27,783 thousand) and ¥3,497 million at March 31, 2017 and 2016, respectively.
At March 31, 2017 and 2016, other assets included initial margins of futures markets of ¥ 328 million ($2,923 thousand) and ¥122 million, respectively,
and security deposits of ¥1,057 million ($9,421 thousand) and ¥1,090 million, respectively, and other intangible fixed assets included key money of ¥552
million ($4,920 thousand) and ¥552 million, respectively.
8. LOAN COMMITMENTS
Commitment line contracts on overdrafts and loans are agreements to lend to customers when they apply for borrowing up to a prescribed amount as longas there is no violation of any condition established in the contract. The amounts of unused commitments at March 31, 2017 and 2016 were ¥972,010 million($8,663,962 thousand) and ¥931,177 million, respectively, and the amount of unused commitments whose original contract terms were within one year or
unconditionally cancelable at any time at March 31, 2017 and 2016 were ¥948,278 million ($8,452,428 thousand) and ¥907,347 million, respectively.
Since many of these commitment line contracts are expected to expire without being drawn upon, the total amount of unused commitments does notnecessarily affect actual future cash flow.
Many of these commitments line contracts have clauses that allow the Group to reject the application from customers or reduce the contract amounts if
economic conditions change. In addition, the Group may request that customers pledge collateral such as premises and securities or take other necessary
measures such as scrutinizing customers’ financial positions and revising contracts when the need arises to secure claims.
9. TANGIBLE FIXED ASSETS
Accumulated depreciation of tangible fixed assets were ¥44,346 million ($395,275 thousand) and ¥44,784 million at March 31, 2017 and 2016, respectively. Accumulated capital gains directly offset against the acquisition cost of tangible fixed assets to obtain tax benefits were ¥783 million ($6,979 thousand) and ¥718 million at March 31, 2017 and 2016, respectively. For the years ended March 31, 2017 and 2016, the capital gain offset from acquisition
costs was ¥68 million ($606 thousand) and nil, respectively.
10. GUARANTEESThe amount guaranteed by the Bank for privately placed bonds (stipulated by Article 2, Paragraph 3 of the Financial Instruments Exchange Act) included in“Bonds” of “Securities,” was ¥8,302 million ($73,999 thousand) and ¥4,753 million at March 31, 2017 and 2016, respectively.

22
22

11. OTHER OPERATING INCOME
For the fiscal years ended March 31, 2017 and 2016, other operating income consisted of the following:Thousands of
U.S. dollars

Millions of yen

2017

2016

¥6,132
227¥6,360¥ 823
268¥1,092

2017$54,657
2,023$56,689

12. OTHER INCOME
For the fiscal years ended March 31, 2017 and 2016, other income consisted of the following:Thousands of
U.S. dollars

Millions of yen

2017

Gains on sales of stocks and other securities ......................................................
Recovery of written-off claims ...........................................................................
State subsidy .......................................................................................................
Gains on sales of fixed assets .............................................................................
Other ...................................................................................................................
Total ................................................................................................................

2016¥2,505
978
68
—
1,325
¥4,877¥1,846
369
—
560
1,370
¥4,143

2017$22,328
8,717
606—
11,810$43,470

Consolidated Financial Statements

Gains on sales of bonds ......................................................................................
Other ...................................................................................................................
Total ................................................................................................................

13. OTHER OPERATING EXPENSES
For the fiscal years ended March 31, 2017 and 2016, other operating expenses consisted of the following:Thousands of
U.S. dollars

Millions of yen

2017

Losses on sales of bonds .....................................................................................
Other ...................................................................................................................
Total ................................................................................................................

2016¥2,1591,323¥3,483¥

0
1,483¥1,483

2017$19,244
11,792$31,045

14. GENERAL AND ADMINISTRATIVE EXPENSES
For the fiscal years ended March 31, 2017 and 2016, general and administrative expenses consisted of the following:Thousands of
U.S. dollars

Millions of yen

Salaries and allowances ......................................................................................
Retirement benefit costs .....................................................................................
Other ...................................................................................................................
Total ................................................................................................................

2017

2016

2017

¥19,363
3,969
20,021¥43,355¥22,478
2,484
20,176¥45,139$172,591
35,377
178,456$386,442

15. OTHER EXPENSES
For the fiscal year ended March 31, 2017 and 2016, other expenses consisted of the following:Thousands of
U.S. dollars

Millions of yen

2017

Write-offs of loans ..............................................................................................
Provision for possible loan losses .......................................................................
Other ...................................................................................................................
Total ................................................................................................................

¥1,0452,584
1,435¥5,066

2016

¥ 933
362
1,038
¥2,3342017$ 9,314
23,032
12,790$45,155

23
23

Consolidated Financial Statements

16. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the fiscal years ended March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars

Millions of yen

Consolidated Financial Statements

Valuation difference on available-for-sale securities:
Losses incurred during the year .....................................................................
Reclassification adjustments to net income ....................................................
Amount before tax effect ...........................................................................
Tax effect ....................................................................................................
Valuation difference on available-for-sale securities .....................................
Deferred gains or losses on hedges .....................................................................
Gains (losses) incurred during the year ..........................................................
Reclassification adjustments to net income ....................................................
Amount before tax effect ...........................................................................
Tax effect ....................................................................................................
Deferred gains or losses on hedges ................................................................
Adjustments for retirement benefits:
Gains (losses) incurred during the year ..........................................................
Reclassification adjustments to net income ....................................................
Amount before tax effect ...........................................................................
Tax effect ....................................................................................................
Adjustments for retirement benefits ...............................................................
Total other comprehensive income .....................................................................

2017

2016

2017

¥(13,617)(6,208)(19,826)
6,279(13,546)¥ (1,068)(2,353)(3,421)
1,668(1,753)$(121,374)(55,334)(176,718)
55,967(120,741)

94
209
303
(92)
210

(202)
302
100
(52)
47

837
1,862
2,700
(820)
1,871

880
2,178
3,059
(934)
2,124
¥(11,211)(11,721)735(10,986)
3,309(7,676)¥ (9,382)

7,843
19,41327,266(8,325)18,932$ (99,928)

17. STATEMENTS OF CASH FLOWS
The reconciliation between cash and due from banks in the consolidated balance sheets at March 31, 2017 and 2016 and cash and cash equivalents in the
consolidated statements of cash flows for the fiscal years then ended were as follows:
Thousands of
U.S. dollars

Millions of yen

Cash and due from banks on the consolidated balance sheets ...........................
Current deposits due from banks ........................................................................
Time deposits due from banks ............................................................................
Other due from banks .........................................................................................
Cash and cash equivalents on the consolidated statements of cash flows ..........

2017

2016

¥736,472(1,768)(600)(154)¥733,948¥410,198(1,978)(615)(77)¥407,527

2017$6,564,506(15,758)(5,348)(1,372)$6,542,009

18. LEASE TRANSACTIONS
Operating leases
As lessee:
Future minimum lease payments under operating leases which were not cancelable at March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year ............................................................................................
Due after one year ..............................................................................................
Total ................................................................................................................

2017

2016

2017

¥

¥ 125
1,067
¥1,192$ 775
8,227$9,01187923¥1,011

As lessor:
There was no applicable matter to be noted regarding future minimum lease payments under operating leases which were not cancelable at March 31, 2017and 2016.

24
24

(2) Contents and risk of financial instruments
Financial assets held by the Group are composed mainly of loans to corporate and individual customers which are exposed to credit risk arising fromthe nonperformance of its customers. In addition, loan balances are significantly concentrated to Nara prefecture, where the head office of the Bank islocated. Accordingly, changes in the economic circumstances of the region
could have a great impact on the credit risk.
Securities consist principally of Japanese government bonds, Japanese
local government bonds, equity securities, foreign securities, investment
trusts that are classified as other securities (available-for-sale), privatebonds guaranteed by the Bank that are classified as held-to-maturity debt
securities and Japanese government bonds classified as trading purpose securities. These securities are exposed to the credit risk of issuers and themarket risk of fluctuation in interest rates and market prices. Since financial
assets denominated in foreign currencies are exposed to exchange rate risk,
currency related derivative transactions are used to balance the amount offunding and amount of operations for each currency to reduce the risk.
In the banking business, financial liabilities consist principally of deposits from retail clients in Japan and are exposed to interest rate risk. In
addition, foreign currency deposits are exposed to exchange rate risk. With
respect to borrowed money, the Group may be forced to raise funds underunfavorable conditions and, accordingly, become significantly exposed toliquidity risk if the fund raising capacity of the Group significantly declined
and led to the inability to repay under circumstances such as the significant
deterioration of the financial position of the Group. Furthermore, borrowed
money with floating interest rates is exposed to interest rate risk.
Derivative transactions include interest rate swaps for interest rate related transactions, currency swaps and forward foreign exchange transactions for currency related transactions, and bond future transactions andbond option transactions for bond related transactions. In addition, certain
credit derivatives are embedded in the financial instruments. The Bank utilizes those derivative transactions in order to hedge the position of the customers as well as to capture various risks associated with transactions withcustomers and control those risks properly. The Bank also uses derivatives
for trading purposes with certain position limits.
The Bank applies the deferred hedge accounting method for derivativetransactions when used as hedging instruments. Interest rate swaps are usedas hedging instruments to avoid interest rate risks of hedged items such asloans with fixed interest rates and deposits with fixed interest rates.

Deferred hedge accounting has been applied to derivatives used as hedging
instruments.
The Bank assesses the effectiveness of hedges in offsetting movementin the fair value from changes in interest rates by classifying the hedged
items such as deposits and loans and the hedging instruments such as interest rate swaps by their maturity. For cash flow hedges, the Bank assesses theeffectiveness by verifying the correlation between the hedged items and thehedging instruments. Transactions which do not meet the requirements ofhedge accounting and derivative transactions for trading purposes are exposed to interest rate risk, foreign currency risk, price fluctuation risk andcredit risk.
(3) Risk management system for financial instruments
Credit risk management
The Group has established a framework for credit control which includes
credit reviews for individual transactions, credit limits, credit information
management, internal credit ratings, guarantees and collateral and self-assessment in accordance with the Group’s “Rules on credit risk management” and “Rules on self-assessment of assets.” These credit controls are
performed by each branch and the Credit Analysis Division, and the independent Audit Department audits the status of credit risk controls and its
results. The status of credit risk controls is periodically evaluated and reported to the Managing Directors’ Committee and board meeting.
Credit risks associated with the issuers of securities are managed by the
Financial Investment Division and Risk Control Division. With respect tothe credit risks associated with the issuer of the securities and counterparty
risk associated with derivative transactions, related credit information andfair values of the securities are periodically checked to monitor those risks.

Consolidated Financial Statements

19. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
a. Matters relating to the status of financial instruments(1) Policy on financial instruments
The Group is composed of the Bank and ten consolidated subsidiaries andprovides financial services such as banking, securities, leasing and credit
guarantee businesses.
Its major banking business includes (i) the acceptance of deposits, lending services, bills discounting and remittance, and (ii) the guarantee ofdebt, acceptance of bills and other services related to the banking business.
The securities business includes underwriting and dealing in securities,
over-the-counter derivative transactions and other related services including security index future transactions in accordance with the Financial Instruments and Exchange Act.
The Bank, in addition to being a money lender and borrower in the interbank market to adjust surplus and deficit of funds, raises funds by loans
and bonds with consideration for the financial market conditions and thebalance of length.
The Bank conducts asset and liability management (ALM) and manages, identifying various types of risk exposures associated with the banking business, since the Bank holds financial assets and liabilities exposed tothe market risk associated with the fluctuation of interest rates. As part ofits risk management, the Bank utilizes derivative transactions such as interest rate swaps. The Bank also enters into derivative transactions for trading
purposes with certain position limits.

Market risk management(a) Interest rate risk
From the perspective of ALM, the Group manages market risk such as interest rate risk associated with assets and liabilities, including loans, deposits and securities comprehensively. The Group’s “Rules on Market Risk
Management” articulates that the Bank makes efforts to manage the market
sector effectively, taking risk and reward into account as well as avoiding
excessive risk taking by setting appropriate risk limits based on the Group’s
ability to take risk and identifying market risk properly.
The ALM Committee, the decision making entity for the managementof market risks, sets certain semiannual risk limits determined by VaRbased upon the Bank’s capital adequacy and market conditions. The Bank
pursues profit opportunities within the risk limits. The Risk Control Division assesses interest rate risk by VaR, reports to the ALM Committee on amonthly basis and properly monitors its operations. Other methodologies
such as BPV and the simulation of the interest rate fluctuation are also used
so that the Bank can capture and analyze risk from a broader point of view.
(b) Foreign currency risk
With regard to foreign currency risk associated with operations and procurement of financial instruments denominated in foreign currency, theGroup manages risk by balancing the amount of funding and amount ofoperations for each currency. In addition, as for foreign currency exchangetransactions for investment purposes, the Risk Control Division assesses
the foreign currency risk by VaR, reports to the ALM committee on amonthly basis and properly monitors its operations.
(c) Price fluctuation risk
With regard to investments in securities, the Group prepares its asset management plan semiannually and makes investment decisions at the ALM
Committee based upon expected returns and correlations between investment items and related market fluctuation risk. The Financial Investment
Division plays a part in investments for investment purposes, and the Corporate Business Division plays a part in investments for the purpose ofbusiness alliances and capital affiliation. Continuous monitoring of market

25
25

Consolidated Financial Statements

conditions and restrictions on investments in riskier assets such as securitized instruments help to avoid unnecessary price fluctuation risk.
The Risk Control Division assesses the price fluctuation risk of equity
securities, etc. by VaR, reports monthly to the ALM Committee aboutcompliance with risk limits and properly manages the risk.
Consolidated Financial Statements(d) Derivative transactions
With respect to derivative transactions for hedging purposes, the Groupestablishes internal rules defining the authority and hedge policies which
are governed by the Risk Control Division. With respect to derivativetransactions for trading purposes, certain trading limits and loss limit rules
are set semiannually by the ALM Committee. The Risk Control Division,
which serves as the middle office, monitors compliance and calculates thetotal amount of risk. The Financial Investment Division, which serves as
the back office, checks each derivative transaction, marked-to-market
position, and evaluates the profit and loss from the transactions on a daily
basis. Combined with those functions, the related divisions check eachother so as not to exceed limits on loss.
The directors of the Bank are reported to from both the middle officeand the back office and monitor the risks associated with the Bank’s
portfolio as a whole, including loans, deposits and securities at the ALM
Committee.
(e) Quantitative information relating to market risk
The Group manages the quantity of market risk for financial instruments
such as loans, deposits, securities and derivatives by VaR To calculate
VaR, the historical method (confidence level of 99%, observation period
of 1,250 business days, holding period of 120 business days [holding
period for equity securities other than purely for investment purposes are
240 business days] and the correlation of risk categories are notconsidered.) is adopted.

At March 31, 2017, the Group’s total market risk (decrease inestimated economic value) was ¥59,428 million ($529,708 thousand)(¥53,513 million in 2016). In addition, the Group conducted back tests
comparing actual income with the VaR calculated by the model. However,VaR is a statistical measure of market risk based on past fluctuations in
the market and certain probability of occurrence. It may not be possible tocapture the risk if the market fluctuates rapidly under extraordinary
circumstances.
Management of liquidity risk associated with financing activities
The Financial Investment Division manages the Bank’s cash position based
upon the monthly funding plan designed by the ALM Committee, while theRisk Control Division monitors the situation. The ALM Committee manages financing risk comprehensively by understanding the amount of cash
for which the Bank can liquidate and also can raise from the market on aregular basis.
In addition, the Group categorizes its financing situation into “RegularPhase” “Concern Phase” and “Crisis Phase,” and prepares appropriate management structures for each phase so that the Group can take proper action
accordingly.
(4) Supplementary explanation on the fair value of financial instruments
The fair values of financial instruments comprise the values determinedbased on quoted market prices and values calculated on a reasonable basis
when no market price is available. Certain assumptions are used for the
calculation of such amounts, and, accordingly, the result of such calculations may vary if different assumptions are used.

b. Fair value of financial instruments
The table below summarizes the carrying amounts, fair values and differences of financial instruments as of March 31, 2017 and 2016.
Note that unlisted equity securities for which it is extremely difficult to identify the fair value and immaterial accounts are not included in the table (seeNote 2 below).
Millions of yen

2017

Cash and due from banks ...........................................................................
Call loans and bills bought .........................................................................
Debt purchased ...........................................................................................
Trading account securities .........................................................................
Trading securities ...................................................................................
Money held in trust ....................................................................................
Securities
Held-to-maturity debt securities ............................................................
Available-for-sale securities ..................................................................
Loans and bills discounted .........................................................................
Reserve for possible loan losses (*1) ....................................................
Total assets .................................................................................................
Deposits ......................................................................................................
Negotiable certificates of deposit ...............................................................
Payables under repurchase agreements ......................................................
Payables under securities lending transactions ..........................................
Borrowed money ........................................................................................
Total liabilities ...........................................................................................
Derivative transactions (*2) .......................................................................
Hedge accounting not applied ...............................................................
Hedge accounting applied .....................................................................
Total derivative transactions .......................................................................

26
26

Carrying amount

Fair value¥ 736,472
11,7764,304¥ 736,472
11,7764,304

Difference

10
31,00010
31,000——8,302
1,675,414
3,252,218(25,045)
3,227,173¥5,694,453¥4,737,336
28,453
29,203504,092
205,308¥5,504,394

8,338
1,675,414

35—

3,250,545¥5,717,861¥4,737,624
28,453
29,203504,092
205,205¥5,504,579

23,372¥23,408
¥ 288
—
—
—
(103)
¥ 185

(2,049)(448)¥(2,497)(2,049)(448)¥(2,497)

—
—
—

¥

¥

—
—
—

Millions of yen

2016
Carrying amount

Fair value¥ 410,198
3,527¥ 410,198
3,527

362
22,000362
22,000——4,753
1,790,864
3,188,341(23,291)
3,165,050¥5,396,755¥4,719,323
47,007
233,648
189,724¥5,189,703

4,795
1,790,864

42—

3,193,563¥5,425,310¥4,719,729
47,007
233,648
189,680¥5,190,065

28,512¥28,554
¥ 406
—
—
(44)
¥ 362

11,838(706)
11,131

11,838(706)
11,131———

Total assets .................................................................................................
Deposits ......................................................................................................
Negotiable certificates of deposit ...............................................................
Payables under securities lending transactions ..........................................
Borrowed money ........................................................................................
Total liabilities ...........................................................................................
Derivative transactions (*2) .......................................................................
Hedge accounting not applied ...............................................................
Hedge accounting applied .....................................................................
Total derivative transactions .......................................................................

¥¥

Difference

¥

¥

—
—

Consolidated Financial Statements

Cash and due from banks ...........................................................................
Debt purchased ...........................................................................................
Trading account securities
Trading securities ...................................................................................
Money held in trust ....................................................................................
Securities
Held-to-maturity debt securities ............................................................
Available-for-sale securities ..................................................................
Loans and bills discounted .........................................................................
Reserve for possible loan losses (*1) ....................................................

Thousands of U.S. dollars

2017
Carrying amount

Cash and due from banks ...........................................................................
Call loans and bills bought .........................................................................
Debt purchased ...........................................................................................
Trading account securities
Trading securities ...................................................................................
Money held in trust ....................................................................................
Securities
Held-to-maturity debt securities ............................................................
Available-for-sale securities ..................................................................
Loans and bills discounted .........................................................................
Reserve for possible loan losses (*1) ....................................................
Total assets .................................................................................................
Deposits ......................................................................................................
Negotiable certificates of deposits .............................................................
Payables under repurchase agreements ......................................................
Payables under securities lending transactions ..........................................
Borrowed money ........................................................................................
Total liabilities ...........................................................................................
Derivative transactions (*2) .......................................................................
Hedge accounting not applied ...............................................................
Hedge accounting applied .....................................................................
Total derivative transactions .......................................................................

Fair value

Difference$ 6,564,506
104,964
38,363$ 6,564,506
104,964
38,36389
276,31689
276,316——

73,99914,933,719
28,988,483(223,237)
28,765,246$50,757,224
42,226,009
253,614260,299
4,493,199
1,830,002$49,063,142

74,32014,933,719

311—

28,973,571$50,965,870
42,228,576
253,614260,299
4,493,199
1,829,084$49,064,791

208,325$208,646
2,567
—
—
—
(918)
$ 1,648(18,263)(3,993)(22,256)(18,263)(3,993)(22,256)

—
—
—

$

$

$

$

—
—
—

(*1) General reserve for possible loan losses and specific reserve for possible loan losses corresponding to loans are deducted.
(*2) Assets and liabilities arising from derivative transactions are presented on a net basis, and net liabilities are presented in parentheses.

(Note 1) Computation method for fair value of financial instruments
AssetsCash and due from banks:
With respect to due from banks without maturities, the carrying amount ispresented as the fair value as the fair value approximates the carrying
amount. With respect to due from banks with maturities, the fair value iscalculated for each category of maturity by discounting the cash flow at theinterest rate assumed if the same due from banks were newly executed.
Call loans and bills bought and debt purchased:
The carrying amount is presented as the fair value as the residual maturity
is less than one year and the fair value approximates the carrying amount.

Trading account securities:
The fair value of securities held for trading purposes is determined based onquoted market prices or values calculated on a reasonable basis if no market
price is available.
Money held in trust:
The fair value of securities managed as trust assets in individually managed
money held in trust primarily for securities management purposes is determined based on the values presented by the trust bank. For additional information on money held in trust categorized by holding purposes, see Note
17, “SECURITIES AND MONEY HELD IN TRUST.”

27
27

Consolidated Financial Statements

Consolidated Financial Statements

Securities:
The fair value of equity securities is determined using the market price atthe exchanges. The fair value of debt securities is determined based onmarket prices or values calculated on a reasonable basis if no market priceis available. The fair value of listed investment trusts is determined using
the market price at the exchanges and the fair value of other investment
trusts is determined using standard prices published by the Investment
Trust Association, Japan or presented from the financial institutions withwhich they are transacted. The fair value of the private bonds guaranteed by
the Bank is calculated by discounting the aggregate value of principle andinterest at the interest rate assumed if the same bond were newly issued foreach category based on term, redemption method and guarantees. With respect to the private bonds guaranteed by the Bank issued by “bankrupt borrowers,” “effectively bankrupt borrowers” and “likely to become bankrupt
borrowers,” the amount of possible loan losses is computed based on thepresent value of estimated future cash flow or the recoverable amounts
from collateral and guarantees. Therefore, the fair value approximates the
carrying amount, net of reserve for possible loan losses, and such amount ispresented as the fair value.
For additional information on securities categorized by holding purposes, see Note 17, “SECURITIES AND MONEY HELD IN TRUST.”
Loans and bills discounted:
The fair value of loans with floating interest rates is presented using thecarrying amount as the fair value approximates the carrying amount, aslong as the credit situation of the borrowers does not vary significantly after
they execute the loans, since they reflect market interest rates due to theirshort-term nature. The fair value of loans with fixed rates is computed, by
discounting the aggregate value of principal and interest at the interest rate
assumed if the same loans were newly executed, for each category of typeof loans, internal ratings and maturities. As for the loans whose maturity isless than one year, the carrying amount is presented as the fair value as thefair value approximates the carrying amount.
With respect to receivables from “bankrupt borrowers,” “effectively
bankrupt borrowers” and “likely to become bankrupt borrowers,” theamount of possible loan losses is computed based on the present value ofthe estimated future cash flow or the recoverable amounts from collateraland guarantees. Therefore, the fair value approximates the carrying amount,net of reserve for possible loan losses, and this amount is presented as thefair value.
The fair value of loans without a predetermined repayment date due totheir lending amounts being limited within the values of the applicable collateral is presented using the carrying amount, as the fair value is deemed

to approximate the carrying amounts considering the estimated repayment
term and interest rates. The fair value of embedded derivative loans is presented using market prices at financial institutions.
Liabilities
Deposits and negotiable certificates of deposits:
With respect to on-demand deposits, the payment obligation due when demanded at the balance sheet date, which is the carrying amount, is deemed
to be the fair value. The fair value of time deposits is computed using thepresent value by discounting future cash flows for each category of a certain period. The interest rate to be applied when a new deposit is taken isused as the discount rate. For deposits whose residual maturity is less than
one year, the carrying amount is presented as the fair value as the fair value
approximates the carrying amount.
Payables under repurchase agreements
The carrying amount is presented as the fair value as the fair value isdeemed to approximate the carrying amount since the interest rate is thefloating interest rate which reflects the market interest rate due to the shortterm nature.
Payables under securities lending transactions:
The carrying amount is presented as the fair value as the residual maturity
is less than one year and the fair value approximates the carrying amount.
Borrowed money:
The fair value of borrowed money with floating interest rates is presented
using the carrying amount as the fair value approximates the carrying
amount since the interest rate reflects the market interest rate due to theshort-term nature and the credit situation of the Group does not vary significantly after executing the borrowing. The fair value of borrowed moneywith fixed interest rate is computed, by discounting the aggregate value ofprincipal and interest at the interest rate assumed if the same borrowing
were newly executed, for each category of type of maturities. As for the
borrowed money whose maturity is less than one year, the carrying amountis presented as the fair value as the fair value approximates the carrying
amount.
Derivative transactions
For derivative transactions, see Note 18, “DERIVATIVE TRANSACTIONS.”(Note 2) The table below summarizes financial instruments whose fair value is extremely difficult to estimate: Note that these instruments are not includedin the above table regarding the fair value of financial instruments.
Carrying amountThousands of
U.S. dollars

Millions of yen

2017

Unlisted equity securities (*1) (*2) ....................................................................
Investment in partnerships (*3) ..........................................................................
Total ....................................................................................................................

¥1,642
1,215¥2,8572016¥1,642151¥1,7932017$14,635
10,829$25,465(*1)	The fair value of unlisted equity securities is not disclosed, since there is no market price and it is extremely difficult to estimate the fair value.
(*2)	No impairment loss was recognized for the fiscal year ended March 31, 2017. The Bank recognized impairment loss of ¥0 million on unlisted equity securities for the fiscal year ended
March 31, 2016.
(*3)	The fair value of unlisted equity securities among the investment in partnerships is not disclosed since there is no market price and it is extremely difficult to estimate the fair value.

28
28

(Note 3) Redemption schedule of monetary claims and securities with maturities
Millions of yen

2017
Due within one
year or lessDue after three
years throughfive years

Due after five
years throughseven years

Due after sevenyears through ten
years

Due after ten
years¥ 689,396
11,776
4,304
133,658
1,724
1,724

¥

—
—
—
294,172
2,918
2,918

¥

—
—
—
378,809
2,943
2,943

¥

—
—
—
160,294
716
716

¥

—
—
—
274,337
—
—

¥

—
—
—
97,354——

131,934
54,000
7,069
12,90457,960496,025¥1,335,161

291,253
206,500
31,970
11,204
41,579625,936¥920,108375,866
215,000
32,97531,74096,150437,952¥816,762

159,578
61,50028,43042,862
26,785315,922¥476,216

274,337
60,00073,556
26,451
114,330
364,039¥638,377

97,354—
4,412
56,90636,036691,686¥789,041

Due after sevenyears through ten
years

Due after ten
years

Consolidated Financial Statements

Due from banks ..............................................
Call loans and bills bought .............................
Debt purchased ...............................................
Securities ........................................................
Held-to-maturity debt securities ................
Bonds .....................................................
Available-for-sale securities with
contractual maturities ................................
Japanese government bonds ..................
Japanese local government bonds .........
Corporate bonds ....................................
Other ......................................................
Loans and bills discounted (*) .......................
Total ...............................................................

Due after one
year throughthree years

Millions of yen

2016
Due within one
year or lessDue from banks ..............................................
Debt purchased ...............................................
Securities ........................................................
Held-to-maturity debt securities ................
Bonds .....................................................
Available-for-sale securities with
contractual maturities ................................
Japanese government bonds ..................
Japanese local government bonds .........
Corporate bonds ....................................
Other ......................................................
Loans and bills discounted (*) .......................
Total ...............................................................

Due after one
year throughthree years

Due after three
years throughfive years

Due after five
years throughseven years¥ 367,096
3,527
215,947
974
974

¥

—
—
256,871
2,274
2,274

¥

—
—
417,663
1,047
1,047

¥

—
—
228,692
457
457

¥

—
—
398,090——¥——
10,600——214,973
130,500
14,284
13,831
56,357872,086¥1,458,657

254,596
107,000
32,46821,90893,220471,337¥728,209

416,615
274,000
19,88730,534
92,194
310,197¥727,860

228,234
142,500
21,351
37,32927,054
239,659¥468,352

398,090
68,50095,67333,386200,530
314,304¥712,394

10,600——10,6000607,550¥618,151

Due after sevenyears through ten
years

Due after ten
years

Thousands of U.S. dollars

2017
Due after one
year throughthree years

Due after three
years throughfive years

Due after five
years throughseven years$ 6,144,897
104,964
38,363
1,191,353
15,366
15,366$———2,622,087
26,00926,009$———3,376,495
26,232
26,232$———
1,428,772
6,382
6,382

$

—
—
—
2,445,289——$

1,175,987
481,326
63,009115,019
516,623
4,421,294$11,900,891

2,596,069
1,840,627
284,963
99,866370,612
5,579,249$8,201,337

3,350,262
1,916,391
293,921282,912857,028
3,903,663$7,280,167

1,422,390
548,177
253,409
382,048
238,746
2,815,955$4,244,727

2,445,289
534,807655,637
235,769
1,019,074
3,244,843$5,690,141

867,760—
39,326507,228
321,205
6,165,308$7,033,077

Due within one
year or lessDue from banks ..............................................
Call loans and bills bought ..............................
Debt purchased ...............................................
Securities ........................................................
Held-to-maturity debt securities ................
Bonds .....................................................
Available-for-sale securities with
contractual maturities ................................
Japanese government bonds ..................
Japanese local government bonds .........
Corporate bonds ....................................
Other ......................................................
Loans and bills discounted (*) .......................
Total ...............................................................

———
867,760——(*) Loans from “bankrupt,” “effectively bankrupt” and “likely to become bankrupt” borrowers, which are not expected to be repaid, and amounting to ¥47,255 million ($421,205 thousand)and ¥63,415 million at March 31, 2017 and 2016, respectively, are not included.
Loans whose payment term is not determined amounting to ¥273,399 million ($2,436,928 thousand) and ¥309,789 million at March 31, 2017 and 2016, respectively, are not included.

2929

Consolidated Financial Statements(Note 4) Redemption schedule of bonds payable, borrowed money and interest bearing liabilities
Millions of yen

2017

Consolidated Financial Statements

Deposits (*) ....................................................
Negotiable certificates of deposits .................
Payables under repurchase agreements ..........
Payables under securities lending transactions ...
Borrowed money ............................................
Total ...............................................................

Due within one
year or lessDue after one
year throughthree years

Due after three
years throughfive years

Due after five
years throughseven years

Due after sevenyears through ten
years

Due after ten
years¥4,199,138
28,453—504,092
39,011¥4,770,696¥468,473———
89,662¥558,136¥ 69,723—
29,203—76,487¥175,414

¥ —
—
—
—
108
¥108

¥—
—
—
—
37
¥37

¥—
—
—
—
—
¥—

Millions of yen

2016

Deposits (*) ....................................................
Negotiable certificates of deposits .................
Payables under securities lending transactions ...
Borrowed money ............................................
Total ...............................................................

Due within one
year or lessDue after one
year throughthree years

Due after three
years throughfive years

Due after five
years throughseven years

Due after sevenyears through ten
years

Due after ten
years¥4,128,635
46,896
233,648
84,112¥4,493,291¥518,020
111—
24,100¥542,231¥ 72,667——
81,385¥154,052

¥—
—
—
60
¥60

¥—
—
—
67
¥67

¥—
—
—
—
¥—

Thousands of U.S. dollars

2017
Due within one
year or less

Deposits (*) ....................................................
Negotiable certificates of deposits .................
Payables under repurchase agreements ..........
Payables under securities lending transactions ...
Borrowed money ............................................
Total ...............................................................

$37,428,808
253,614
4,493,199
347,722$42,523,362

Due after one
year throughthree years

Due after three
years throughfive years

Due after five
years throughseven years

Due after sevenyears through ten
years

Due after ten
years$4,175,710———
799,197$4,974,917$ 621,472—
260,299—
681,763$1,563,543

$ —
—
—
—
962
$962

$ —
—
—
—
329
$329

$—
—
—
—
—
$—

(*) Demand deposits are included in “Due within one year or less.”

20. SECURITIES AND MONEY HELD IN TRUSTThe securities in this note include “Trading account securities” and beneficial trust interests under “Debt purchased,” in addition to “Securities” classified
on the consolidated balance sheets.
(1) Information on trading account securities and securities with available fair values at March 31, 2017 and 2016 was as follows:(a) Trading securities
Thousands of
U.S. dollars

Millions of yen

2017

2016

¥(2)

Amount of net unrealized gains (losses) included in the statements of income ....

2017

¥2

$(17)

(b) Held-to-maturity debt securities
Millions of yen

2017

30
30

Carrying amount

Fair value

Fair value exceeding carrying amount:
Corporate bonds .........................................................................................
Subtotal ......................................................................................................

Unrealized gains (losses)¥5,941¥5,941¥5,983¥5,983¥42¥42

Fair value not exceeding carrying amount:
Corporate bonds .........................................................................................
Subtotal ......................................................................................................
Total ...........................................................................................................

¥2,361¥2,361¥8,302¥2,354¥2,354¥8,338

¥(6)
¥(6)
¥35

Millions of yen

2016
Fair value

Fair value exceeding carrying amount:
Corporate bonds .........................................................................................
Subtotal ......................................................................................................

Unrealized gains (losses)¥4,753¥4,753¥4,795¥4,795¥42¥42

Fair value not exceeding carrying amount:
Corporate bonds .........................................................................................
Subtotal ......................................................................................................
Total ...........................................................................................................

¥ —¥ —¥4,753¥ —¥ —¥4,795¥—¥—¥42

Thousands of U.S. dollars

2017
Carrying amount

Fair value

Fair value exceeding carrying amount:
Corporate bonds .........................................................................................
Subtotal ......................................................................................................

Unrealized gains (losses)$52,954$52,954$53,329$53,329$374$374

Fair value not exceeding carrying amount:
Corporate bonds .........................................................................................
Subtotal ......................................................................................................
Total ...........................................................................................................

$21,044$21,044$73,999$20,982$20,982$74,320$ (53)$ (53)$311

Consolidated Financial Statements

Carrying amount(c) Available-for-sale securities
Millions of yen

2017

Carrying amount exceeding acquisition cost:
Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Japanese corporate bonds ......................................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Subtotal ......................................................................................................
Carrying amount not exceeding acquisition cost:
Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Japanese corporate bonds ......................................................................
Others .........................................................................................................
Foreign securities included ..................................................................
Subtotal ......................................................................................................
Total ...........................................................................................................

Carrying amount

Acquisition cost¥

94,094
912,199
593,497
175,079
143,621211,525
184,037¥1,217,818¥

48,818888,650
578,736
169,303
140,610
206,654
180,403¥1,144,123¥ 45,275
23,54814,760
5,776
3,010
4,871
3,633
¥ 73,695

¥

¥

¥

4,840
70,193
20,102
8,921
41,169383,560
191,234¥ 458,595¥1,676,414

5,126
70,77820,1399,094
41,545398,205
198,383¥ 474,109¥1,618,233

Unrealized gains (losses)

(286)
(584)
(37)
(172)
(375)
(14,644)(7,149)¥(15,514)¥ 58,1803131

Consolidated Financial Statements

Millions of yen

2016

Consolidated Financial Statements

Carrying amount

Acquisition cost¥

79,353
1,073,639
731,597
191,298
150,744534,694
473,054¥1,687,687¥

45,0591,041,369
710,647
183,624
147,097518,278
459,191¥1,604,707¥34,294
32,26920,9497,674
3,646
16,415
13,863¥82,979¥¥¥ (1,206)
(28)
(27)
(0)
(1)
(3,737)(1,034)¥ (4,972)¥78,006

Carrying amount exceeding acquisition cost:
Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Japanese corporate bonds ......................................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Subtotal ......................................................................................................
Carrying amount not exceeding acquisition cost:
Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Japanese corporate bonds ......................................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Subtotal ......................................................................................................
Total ...........................................................................................................

8,815
15,443
14,83629
576
78,918
17,830¥ 103,177¥1,790,864

Unrealized gains (losses)

10,021
15,472
14,86430
577
82,655
18,865¥ 108,150¥1,712,857

Thousands of U.S. dollars

2017
Carrying amount

Carrying amount exceeding acquisition cost:
Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Japanese corporate bonds ......................................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Subtotal ......................................................................................................
Carrying amount not exceeding acquisition cost:
Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Japanese corporate bonds ......................................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Subtotal ......................................................................................................
Total ...........................................................................................................

Acquisition cost

Unrealized gains (losses)$

838,7028,130,840
5,290,106
1,560,557
1,280,158
1,885,417
1,640,404$10,854,960$

435,136
7,920,937
5,158,534
1,509,073
1,253,320
1,842,000
1,608,013$10,198,083$ 403,556
209,893
131,562
51,484
26,82943,41732,382$ 656,876$$$

43,141
625,661
179,178
79,516366,957
3,418,843
1,704,554$ 4,087,663$14,942,633

45,690630,876
179,507
81,058370,3093,549,380
1,768,277$ 4,225,947$14,424,039(2,549)(5,205)(329)(1,533)(3,342)(130,528)(63,722)$(138,283)$ 518,584(2) Held-to-maturity debt securities sold for the fiscal years ended March 31, 2017 and 2016
Not applicable.
(3) Available-for-sale securities sold for the fiscal years ended March 31, 2017 and 2016
Millions of yen

2017

Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Total ...........................................................................................................

32
32

Sales amount

Gains on sales

Losses on sales¥ 10,750
15,35915,120239
240,999
239,506¥267,109¥2,140
116
116
—
6,381
5,881
¥8,638

¥ 269
0
—
0
2,159
2,159
¥2,429

Millions of yen

2016
Sales amount

¥

5,802
66,991
59,991
5,067
1,932
52,79552,795¥125,589¥1,706
470
450
2
17
494
494
¥2,670Losses on sales

¥158
0
—
0
0
—
—
¥159

Thousands of U.S. dollars

2017
Sales amount

Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Total ...........................................................................................................

$

95,819136,901
134,7712,130
2,148,132
2,134,824$2,380,862

Gains on sales

Losses on sales$19,074
1,033
1,033
—
56,87652,420$76,994$ 2,3970—
0
19,244
19,244$21,650

Consolidated Financial Statements

Stocks .........................................................................................................
Bonds .........................................................................................................
Japanese government bonds ..................................................................
Japanese local government bonds ..........................................................
Japanese corporate bonds ......................................................................
Others .........................................................................................................
Foreign securities included ....................................................................
Total ...........................................................................................................

Gains on sales(4) Information on money held in trust at March 31, 2017 and 2016 was as follows:
Money held in trustThousands of
U.S. dollars

Millions of yen

Carrying amount (fair value) ..............................................................................
Amount of net unrealized gains (losses) included in the statements of income ..

2017

2016

2017

¥31,000
22¥22,000
48$276,316
196(5) The components of the valuation difference on available-for-sale securities recorded under net assets at March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars

Millions of yen

Valuation difference ............................................................................................
Deferred tax liabilities ........................................................................................
Amounts equivalent to difference on available-for-sale securities .....................
Non-controlling interests adjustment .................................................................
Valuation difference on available-for-sale securities ..........................................

2017

2016

2017

¥ 58,180(14,654)¥ 43,526—¥ 43,526¥ 78,006(20,934)¥ 57,072—¥ 57,072$ 518,584(130,617)$ 387,966—$ 387,966(6) Securities reclassified for the fiscal years ended March 31, 2017 and 2016
Not applicable.
(7) Impairment loss on securities
In the event that the fair value of securities, except trading securities, with available fair values declines significantly compared with the acquisition cost andthe fair value is not expected to recover, such securities are stated at fair value and the difference between the fair value and the acquisition cost is recognized
as loss in the period of the decline (“impairment loss”). The fair value is regarded as “significantly declined” when (i) the fair value as of the end of the fiscal year declines by more than 50% of the acquisition cost or (ii) the fair value as of the end of the fiscal year declines by more than 30% but less than 50%of the acquisition cost, and is not expected to recover within one year. No impairment loss was recognized for the fiscal year ended March 31, 2017. Impairment loss recognized on equity securities was ¥158 million for the fiscal year ended March 31, 2016.

33
33

Consolidated Financial Statements

21. DERIVATIVE TRANSACTIONS(1) Derivative contracts to which hedge accounting is not appliedWith respect to derivatives to which hedge accounting is not applied, the contract amount or notional principal amount defined in the contract, fair value,
unrealized gains (losses) and calculation method of fair value by transaction type as of March 31, 2017 and 2016 were as follows:
Note that the contract amount does not represent the market risk exposure of the derivative transactions themselves.
Consolidated Financial Statements(a) Interest rate related transactions
Millions of yen

2017
Category

Transaction typeInterest rate futures
Sold ..........................................................
Bought ......................................................
Interest rate options
Sold ..........................................................
Bought ......................................................
Over-the-counter Forward rate agreements
transactions
Sold ..........................................................
Bought ......................................................
Interest rate swaps
Receive fixed rate/pay floating rate ..........
Receive floating rate/pay fixed rate ..........
Receive floating rate/pay floating rate ......
Interest rate options
Sold ..........................................................
Bought ......................................................
Other
Sold ..........................................................
Bought ......................................................
Total ........................................................................................

Contract amount

Exchangetransactions

Contract amount due
after one year

Fair value

Unrealized gains (losses)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

¥ 257
4,272
—

¥ —
3,768
—

¥ 2
(204)
—

¥ 2
(204)
—

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
¥(201)——¥(201)¥¥

Millions of yen

2016
Category

Transaction typeInterest rate futures
Sold ..........................................................
Bought ......................................................
Interest rate options
Sold ..........................................................
Bought ......................................................
Over-the-counter Forward rate agreements
transactions
Sold ..........................................................
Bought ......................................................
Interest rate swaps
Receive fixed rate/pay floating rate ..........
Receive floating rate/pay fixed rate ..........
Receive floating rate/pay floating rate ......
Interest rate options
Sold ..........................................................
Bought ......................................................
Other
Sold ..........................................................
Bought ......................................................
Total ........................................................................................

Contract amount

Exchangetransactions

34
34

Contract amount due
after one year

Fair value

Unrealized gains (losses)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

¥ 323
4,851
—

¥ 323
4,851
—

¥ 9
(307)
—

¥ 9
(307)
—

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
¥(298)——¥(298)¥¥

Thousands of U.S. dollars

2017
Category

Transaction type

Unrealized gains (losses)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
33,585—$ 17(1,818)—$17(1,818)
—

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
$(1,791)——$(1,791)$ 2,290
38,078—$Fair value$$

Consolidated Financial Statements

Interest rate futures
Sold ..........................................................
Bought ......................................................
Interest rate options
Sold ..........................................................
Bought ......................................................
Over-the-counter Forward rate agreements
transactions
Sold ..........................................................
Bought ......................................................
Interest rate swaps
Receive fixed rate/pay floating rate ..........
Receive floating rate/pay fixed rate ..........
Receive floating rate/pay floating rate ......
Interest rate options
Sold ..........................................................
Bought ......................................................
Other
Sold ..........................................................
Bought ......................................................
Total ........................................................................................

Contract amount

Exchangetransactions

Contract amount due
after one year

Notes: 1. The above transactions are measured at fair value, and unrealized gains (losses), except as in Note 3, are recognized in the consolidated statements of income.
2. The fair values of exchange transactions are based on the closing price at the Tokyo Financial Exchange Inc., etc.
		 The fair values of over-the-counter transactions are based on the discounted cash flow method, option pricing model, etc.
3. As of March 31, 2017 and 2016, “Receive floating rate/pay fixed rate” of interest rate swaps includes the contract amount of ¥4,014 million ($35,778 thousand) and ¥4,528
million, fair value of ¥(202) million ($(1,800) thousand) and ¥(299) million, and unrealized gains (losses) of ¥(202) million ($(1,800) thousand) and ¥(299) million, respectively,
for which the application of hedge accounting was cancelled since they have not met the requirement of hedge accounting. Unrealized gains (losses) on “Receive floating rate/
pay fixed rate” of ¥(195) million ($(1,738) thousand) and ¥(245) million were deferred over the hedge period due to the cancellation, respectively.

(b) Currency related transactions
Millions of yen

2017
Category

Transaction type

Currency futures
Sold ..........................................................
Bought ......................................................
Currency options
Sold ..........................................................
Bought ......................................................
Over-the-counter Currency swaps
transactions
Forward foreign exchange contracts
Sold ..........................................................
Bought ......................................................
Currency options
Sold ..........................................................
Bought ......................................................
Other
Sold ..........................................................
Bought ......................................................
Total ........................................................................................

Contract amount

Exchangetransactions

Contract amount due
after one year

Fair value

Unrealized gains (losses)

—
—

—
—

—
—

—
—

—
—
¥393,351——¥255,457——¥(1,843)——¥(1,843)

2,722
202

—
—

(4)
0

(4)
0

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
¥(1,847)——¥(1,847)

¥

¥

35
35

Consolidated Financial Statements

Millions of yen

2016
Category

Transaction type

Contract amount

Exchangetransactions
Consolidated Financial Statements

Currency futures
Sold ..........................................................
Bought ......................................................
Currency options
Sold ..........................................................
Bought ......................................................
Over-the-counter Currency swaps ...........................................
transactions
Forward foreign exchange contracts
Sold ..........................................................
Bought ......................................................
Currency options
Sold ..........................................................
Bought ......................................................
Other
Sold ..........................................................
Bought ......................................................
Total ........................................................................................

Contract amount due
after one year

Fair value

Unrealized gains (losses)

—
—

—
—

—
—

—
—

—
—
¥513,557——¥278,462——¥12,008——¥12,008

4,632
311

—
—

136
(8)

136
(8)

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
¥12,136——¥12,136¥¥

Thousands of U.S. dollars

2017
Category

Transaction type

Currency futures
Sold ..........................................................
Bought ......................................................
Currency options
Sold ..........................................................
Bought ......................................................
Over-the-counter Currency swaps ...........................................
transactions
Forward foreign exchange contracts
Sold ..........................................................
Bought ......................................................
Currency options
Sold ..........................................................
Bought ......................................................
Other
Sold ..........................................................
Bought ......................................................
Total ........................................................................................

Contract amount

Exchangetransactions

Contract amount due
after one year

Fair value

—
—

—
—

—
—

—
—

—
—
$3,506,114——$2,277,003——$(16,427)——$(16,427)

24,262
1,800

—
—

(35)
0

(35)
0

—
—

—
—

—
—

—
—

—
—
—

—
—
—

—
—
$(16,463)——$(16,463)$$

Notes: 1. The above transactions are measured at fair value, and unrealized gains (losses) are recognized in the consolidated statements of income.
2. The fair values are based on the discounted present value, etc.

(c) Stock related transactions
None(d) Bond related transactions
None(e) Commodity related transactions
None(f) Credit derivative transactions
None

36
36

Unrealized gains (losses)

(2) Derivative contracts to which hedge accounting is appliedWith respect to derivatives to which hedge accounting is applied, the contract amount or notional principal amount defined in the contract, fair value andcalculation method of fair value by transaction type and by hedge accounting method as of March 31, 2017 and 2016 were as follows:
Note that the contract amount does not represent the market risk exposure of the derivative transactions themselves.
(a) Interest rate related transactions
2017
Hedge accounting method

Transaction type

Major hedged items

Fundamental method

Interest rate swaps:
Receive fixed rate/pay
floating rate
Receive floating rate/pay
fixed rate

Interest bearing
assets and liabilities
such as loans anddeposits

Contract amountContract amount due after
one year

Fair value

—

—

—

¥13,405¥7,670¥(448)

—
—
—

—
—
—

—
—
—

—

—

—

—
—

—
¥(448)

Interest rate futures
Interest rate options
Other
Exceptional accounting Interest rate swaps—
method for interest rate
Receive fixed rate/pay
swaps
floating rate
Receive floating rate/pay
fixed rate
Total
—

¥

—
—

¥

Consolidated Financial Statements

Millions of yen

Millions of yen

2016
Hedge accounting method

Transaction type

Major hedged items

Fundamental method

Interest rate swaps:
Receive fixed rate/pay
floating rate
Receive floating rate/pay
fixed rate

Interest bearing
assets and liabilities
such as loans anddeposits

Contract amountContract amount due after
one year

Fair value

—

—

—

¥16,246¥14,814¥(706)

—
—
—

—
—
—

—
—
—

—

—

—

—
—

—
¥(706)

Interest rate futures
Interest rate options
Other
Exceptional accounting Interest rate swaps—
method for interest rate
Receive fixed rate/pay
swaps
floating rate
Receive floating rate/pay
fixed rate
Total
—

¥

—
—

¥

Thousands of U.S. dollars

2017
Hedge accounting method

Transaction type

Major hedged items

Fundamental method

Interest rate swaps:
Receive fixed rate/pay
floating rate
Receive floating rate/pay
fixed rate

Interest bearing
assets and liabilities
such as loans anddeposits

Interest rate futures
Interest rate options
Other
Exceptional accounting Interest rate swaps—
method for interest rate
Receive fixed rate/pay
swaps
floating rate
Receive floating rate/pay
fixed rate
Total—

Contract amountContract amount due after
one year

Fair value

—

—

—

$119,484$68,366$(3,993)

—
—
—

—
—
—

—
—
—

—

—

—

—
—

—
$(3,993)

$

—
—

$

Notes: 1. Gain/loss on the above contacts is deferred until maturity of the hedged items under the fundamental method in accordance with the “Treatment for Accounting and Auditing ofApplication of Accounting Standard for Financial Instruments in the Banking Industry” (JICPA Industry Audit Committee Report No. 24, February 13, 2002).
2. The fair values of exchange transactions are based on the closing price at the Tokyo Financial Exchange Inc., etc.
		 The fair values of over-the-counter transactions are based on the discounted cash flow method, option pricing model, etc.

3737

Consolidated Financial Statements(b) Currency related transactions
None(c) Stock related transactions
None
Consolidated Financial Statements(d) Bond related transactions
None
22. PROJECTED BENEFIT OBLIGATIONS(1) Outline of employees’ retirement allowance
The Bank has a contributory defined benefit pension plan and a non-contributory unfunded lump-sum retirement allowance plan.
Ten consolidated subsidiaries have non-contributory unfunded lump-sum retirement allowance plans as defined benefit plans, and apply the simplified
method in the calculation of their liability for retirement benefits and retirement benefit costs using the method in which the necessary amounts to be paid
for retirement benefits on a voluntary basis is regarded as the retirement benefit obligations.
(2) Defined benefit plans(a) Movement in projected benefit obligations
Thousands of
U.S. dollars

Millions of yen

Balance at the beginning of the fiscal year .........................................................
Service cost ....................................................................................................
Interest cost ....................................................................................................
Actuarial loss (gain) .......................................................................................
Benefits paid ...................................................................................................
Balance at the end of the fiscal year ...................................................................
Note:

2017

2016

2017

¥65,416
2,095
455
116
(2,683)¥65,400¥55,877
1,652
871
9,599
(2,585)¥65,416$583,082
18,673
4,055
1,033(23,914)$582,939

Plans based on the simplified method have been included in the above.

(b) Movements in plan assets
Thousands of
U.S. dollars

Millions of yen

Balance at the beginning of the fiscal year .........................................................
Expected return on plan assets .......................................................................
Actuarial gain (loss) .......................................................................................
Contributions paid by the employer ...............................................................
Benefits paid ...................................................................................................
Balance at the end of the fiscal year ...................................................................
Note:

2017

2016

2017

¥38,167
759
997
2,235
(1,874)¥40,284¥41,124775(2,122)
10(1,620)¥38,167$340,199
6,765
8,886
19,921(16,703)$359,069

Plans based on the simplified method have been included in the above.

(c) Reconciliation from projected benefit obligations and plan assets to liability (asset) for retirement benefits
Thousands of
U.S. dollars

Millions of yen

Funded projected benefit obligations
Plan assets
Unfunded projected benefit obligations
Net liability (asset) for retirement benefits recorded on the consolidatedbalance sheet
Liability for retirement benefits
Asset for retirement benefits
Net liability (asset) for retirement benefits recorded on the consolidatedbalance sheet
Note:

38
38

Plans based on the simplified method have been included in the above.

2017

2016

2017

¥54,408(40,284)
14,124
10,991¥54,422(38,167)
16,254
10,994$484,963(359,069)
125,893
97,967¥25,115¥27,248$223,861¥25,115—¥27,248—$223,861—¥25,115¥27,248$223,861

(d) Retirement benefit costs
Thousands of
U.S. dollars

Millions of yen

2017

Note:

2016

¥2,095
455
(759)
2,178
¥3,9692017¥1,652
871
(775)
735
¥2,484$18,673
4,055(6,765)
19,413$35,377

Retirement benefit costs of consolidated subsidiaries which have applied the simplified method are included in “Service cost.”(e) Adjustments for retirement benefits
The components of adjustments for retirement benefits (before tax effect) were as follows:
Thousands of
U.S. dollars

Millions of yen

2017

Actuarial gain (loss)
Total¥3,059¥3,05920162017¥(10,986)¥(10,986)$27,266$27,266

Consolidated Financial Statements

Service cost
Interest cost
Expected return on plan assets
Net actuarial loss amortization
Total retirement benefit costs(f) Accumulated adjustments for retirement benefits
The components of accumulated adjustments for retirement benefits (before tax effect) were as follows:
Thousands of
U.S. dollars

Millions of yen

Unrecognized actuarial gain (loss)
Total

2017

2016

2017

¥(9,820)¥(9,820)¥(12,879)¥(12,879)$(87,530)$(87,530)(g) Plan assets
1) Plan assets comprise:
2017

Bonds ............................................................................................................................................................
Stocks ...........................................................................................................................................................
Cash and deposits .........................................................................................................................................
Life insurance general accounts ...................................................................................................................
Other .............................................................................................................................................................
Total ..............................................................................................................................................................
Note:

17.1%
31.3%
4.7%
33.5%
13.4%
100%

2016

19.1%
33.4%
2.9%
34.3%
10.3%
100%

Total plan assets include retirement benefit trusts which were set up for a corporate pension fund plan (nil and 0.2% of total plan assets at March 31, 2017 and 2016, respectively).

2) Long-term expected rate of return
Current and target asset allocations and historical and expected returns on various categories of plan assets have been considered in determining the longterm expected rate of return.
(h) Actuarial assumptions
The principal actuarial assumptions for the fiscal years ended March 31, 2017 and 2016 were as follows:
2017

Discount rate .................................................................................................................................................
Long-term expected rate of return ................................................................................................................
Estimated rate of increase in salary ..............................................................................................................

0.70%
2.00%
3.90%

2016

0.70%
2.00%
3.90%

23. STOCK OPTIONS(a) Items and amounts expensed related to stock options were as follows:
Thousands of
U.S. dollars

Millions of yen

2017

General and administrative expenses ..................................................................

2016

¥25

2017

¥35

$222

39
39

Consolidated Financial Statements(b) Stock options outstanding at March 31, 2017 were as follows:a. Outline of stock options
Beneficiaries qualifying for stock option rights are entitled to acquire common stock upon the exercise of their rights. The following table summarizes thenumber of shares upon exercise of the stock option rights granted by the Bank outstanding at March 31, 2017:

Consolidated Financial Statements

Stockoptions

Persons
granted2010
Stock Options
2011
Stock Options
2012
Stock Options
2013
Stock Options
2014
Stock Options

15 directorsof the Bank
14 directorsof the Bank
15 directorsof the Bank
15 directorsof the Bank
14 directors(excluding
outsidedirectors)of the Bank
13 directors(excluding
outsidedirectors)of the Bank
7 directors(excluding
outsidedirectors)of the Bank

2015
Stock Options

2016
Stock Options

Note:

Number ofoptions granted(Note)

Date of
grant

Exercise
price

ExerciseperiodVesting
conditions

Target ofservice period

Common stock
9,440 shares
Common stock
10,940 shares
Common stock
13,620 shares
Common stock
11,950 shares
Common stock
9,970 shares

July 29, 2010¥1($0.00)¥1($0.00)¥1($0.00)¥1($0.00)¥1($0.00)From July 30, 2010
to July 29, 2040
From July 30, 2011
to July 29, 2041
From July 28, 2012
to July 27, 2042
From July 27, 2013
to July 26, 2043
From July 26, 2014
to July 25, 2044

Not definedNot definedNot definedNot definedNot definedNot definedNot definedNot definedNot definedNot defined

Common stock
8,400 shares

July 24, 2015

¥1($0.00)From July 25, 2015
to July 24, 2045

Not definedNot defined

Common stock
6,560 shares

July 29, 2016¥1($0.00)From July 30, 2016
to July 29, 2046

Not definedNot defined

July 29, 2011
July 27, 2012
July 26, 2013
July 25, 2014

The number of stock options has been converted to the number of shares after the one-for-ten reverse stock split implemented on October 1, 2016.

b. Stock option activity:
1) Number of stock options
Number of shares

2010
2011
2012
2013
2014
2015
2016
Stock Options Stock Options Stock Options Stock Options Stock Options Stock Options Stock Options

Non-vested
March 31, 2016 – Outstanding ..........................
Granted ..............................................................
Forfeited ............................................................
Vested ................................................................
March 31, 2017 – Outstanding .........................
VestedMarch 31, 2016 – Outstanding ..........................
Vested ................................................................
Exercised ...........................................................
Forfeited ............................................................
March 31, 2017 – Outstanding ..........................
Note:

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

3,600
—
1,070
—
2,530

4,670
—
1,340
—
3,330

6,340
—
1,600
—
4,740

7,500
—
2,670
—
4,830

7,500
3,260
—
4,240

1,970
—
1,970
—

—
6,560
—
4,920
1,640

6,300
1,970
3,020
—
5,250

—
4,920
—
—
4,920

The number of stock options has been converted to the number of shares after the one-for-ten reverse stock split implemented on October 1, 2016.

2) Price information
Yen

2010
2011
2012
2013
2014
2015
2016
Stock Options Stock Options Stock Options Stock Options Stock Options Stock Options Stock Options

Exercise price ........................................................
Average stock price at exercise date ......................
Fair value price at grant date .................................

¥
1
3,260
4,410

¥
1
3,260
3,860

¥
1
3,260
3,030

¥
1
3,167
3,720

¥
1
3,195
4,010

¥
1
3,209
3,970

¥

1
—
3,660

U.S. dollars Yen

2010
2011
2012
2013
2014
2015
2016
Stock Options Stock Options Stock Options Stock Options Stock Options Stock Options Stock Options

Exercise price ........................................................
Average stock price at exercise date ......................
Fair value price at grant date .................................

40
40

Note:

$ 0.0029.05
39.30$ 0.0029.05
34.40$ 0.0029.05
27.00$ 0.0028.22
33.15$ 0.0028.47
35.74$ 0.0028.60
35.38$ 0.00—32.62“Average stock price at exercise date” and “Fair value price at grant date” has been converted to the price after the one-for-ten reverse stock split implemented on October 1, 2016.

(d) Estimation method for the total number of vested stock option rights
The total number of stock option rights issued is deemed to reflect the actual number of stock option rights expired due to difficulties in estimating reasonably the number of stock option rights that will expire in the future.
24. INCOME TAXESThe Group is subject to a number of taxes based on the income such as corporation tax, inhabitant tax and enterprise tax, which, in the aggregate, indicate
a statutory tax rate in Japan of approximately 30.6 % and 32.8% for the fiscal years ended March 31, 2017 and 2016, respectively.
Significant components of deferred tax assets and liabilities as of March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Excess bad debt expense ................................................................................
Liability for retirement benefits .....................................................................
Depreciation ...................................................................................................
Write-down of land ........................................................................................
Loss on impairment of fixed assets ................................................................
Valuation loss on securities ............................................................................
Tax loss carryforwards ...................................................................................
Net deferred loss on hedging instruments ......................................................
Other ...............................................................................................................
Subtotal deferred tax assets: ............................................................................
Valuation allowance ............................................................................................
Total deferred tax assets ...................................................................................
Deferred tax liabilities:
Valuation difference on available-for-sale securities .....................................
Other ...............................................................................................................
Total deferred tax liabilities .............................................................................
Net deferred tax assets (liabilities) ..................................................................
Note:

Consolidated Financial Statements(c) Assumptions used to measure the fair value of stock options
The assumptions used to measure the fair value of the stock options granted in the fiscal year ended March 31, 2017 were as follows:
1) The Black-Scholes option pricing model was used as a measurement method.
2) Assumptions used for the Black-Scholes option pricing model:
1. Volatility of stock price: 27.95% calculated using the market price of the Bank’s stock from November 2010 to July 2016.
2.	Estimated remaining outstanding period: 5.7 years, which was the average remaining tenure of directors at the date of issue, determined by theaverage time from appointment to retirement and time from appointment to the date of issue.
3. Estimated dividend: ¥7 per share, which was calculated based on the actual amount of dividends for the fiscal year ended March 31, 2016.
4. Risk-free interest rate: (0.37)%, determined using the yield of national bonds equivalent to the estimated remaining outstanding period.

2017

2016

2017

¥ 7,293
7,651
817
1,031
1,247
3,375
46
180
1,852
23,496(8,226)
15,270¥ 7,825
8,340
759
1,031
1,304
3,708
68
273
1,915
25,227(9,251)
15,976$ 65,005
68,196
7,282
9,189
11,11530,082410
1,604
16,507
209,430(73,322)
136,108(14,654)(45)(14,700)¥ 570(20,934)(78)(21,012)¥ (5,035)(130,617)(401)(131,027)$ 5,080

Net deferred tax assets (liabilities) as of March 31, 2017 and 2016 are included in the following accounts in the consolidated balance sheets:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets ..............................................................................................
Deferred tax liabilities ........................................................................................

2017

2016

2017

¥ 1,307737¥ 1,314
6,349$11,649
6,569

The following table summarizes the significant differences between the statutory tax rate and the effective tax rate for financial statement purposes for the
fiscal years ended March 31, 2017 and 2016:
Statutory tax rate ...........................................................................................................................................
Valuation allowance ................................................................................................................................
Non-deductible expenses ..........................................................................................................................
Non-taxable income .................................................................................................................................
Adjustment of deferred tax assets for enacted changes in tax laws and rates ..........................................
Other .........................................................................................................................................................
Effective tax rate ...........................................................................................................................................

2017

2016

30.6%
(6.0)%
0.2%(0.6)%
—%
1.3%
25.4%

32.8%
(20.0)%
0.4%(0.7)%
3.4%
0.1%
15.9%

41
41

Consolidated Financial Statements

Consolidated Financial Statements

For the year 2016
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 15 of 2016) and “Act for Partial Amendment of the Local Tax Act, etc.” (Act No. 13
of 2016) were enacted at the Diet on March 29, 2016, and as a result, income tax rate, etc. was reduced effective for the fiscal years beginning on or after
April 1, 2016. As a result, the effective statutory tax rate used to measure the Group’s deferred tax assets and liabilities was changed from 32.0% to 30.6%
for the temporary differences expected to be realized or settled for the fiscal years beginning on April 1, 2016 and 2017, and to 30.4% for the fiscal years
beginning on or after April 1, 2018.
The effect of the change in the effective statutory tax rate as of and for the fiscal year ended March 31, 2016 was to decrease deferred tax assets, deferred
tax liabilities, deferred gains or losses on hedges, and accumulated adjustments for retirement benefits by ¥6 million, ¥376 million, ¥12 million and ¥197
million, respectively, and increase valuation difference on available-for-sale securities and deferred income taxes by ¥1,095 million and ¥515 million, respectively, from the amounts that would have been reported without the change.
25. BUSINESS COMBINATIONS
For the year 2017
Not applicable.
For the year 2016
Transactions under Common Control
Additional Acquisition of Subsidiaries’ Shares(1) Overview of the transactions
a. Company names and business descriptions subject to the business combination
Company Names Subject to the Business Combination
Nanto Credit Guarantee Co., Ltd.
Nanto Lease Co., Ltd.
Nanto Computer Service Co., Ltd.
Nanto Investment Management Co., Ltd.
Nanto DC Card Co., Ltd.
Nanto Card Services Co., Ltd.

Business Descriptions
Other (Credit guarantee)
Leasing
Other (Computer software development and services)
Other (Investment advisory services)
Other (Credit card business)
Other (Credit card business)b. Effective date of the business combination
September 30, 2015c. Legal form of the business combination
The transactions were classified as share acquisitions from non-controlling stockholders.
d. Company names following the business combination
The companies’ names have not been changed following the business combination.
e. Other matters
The Bank raised the ownership ratio of its subsidiaries to 100% through acquiring their shares held by non-controlling stockholders for the purposes ofencouraging to “strengthen the Group’s capabilities”, which is placed as one of key strategies of the Bank’s medium-term management plan called “Vitality
Creation Plan” that covers the three-year period from April 2014 to March 2017 .
(2) Overview of accounting procedures implemented
The transactions were accounted for as transactions with non-controlling stockholders, which are classified as transactions under common control, based on
the “Revised Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013) and the “Revised Guidance on AccountingStandard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, September 13, 2013).
(3) Additional acquisition of shares in subsidiaries
Acquisition cost and consideration paid

Consideration paid for acquisition: Cash and due from banks ...............................................................
Acquisition cost .......................................................................................................................................

Millions of yen

¥967
¥967

(4) Changes in the portion held by the Bank in connection with the transactions with non-controlling interests
a. Main reasons for changes in capital surplus
Additional acquisition of subsidiaries’ sharesb. Increase in capital surplus due to transactions with non-controlling interests¥7,261 million4242

(2) Basis of measurement for reported segment profit (loss), segment assets, segment liabilities and other material items
The accounting method used for reportable business segments is presented in accordance with Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES.” The reportable segment profit figures are based on operating profit. Income arising from intersegment transactions is based on arm’s length
prices.
(3) Information about reported segment profit (loss), segment assets, segment liabilities and other material items
Segment information for the fiscal years ended March 31, 2017 and 2016 is summarized as follows:
Millions of yen

2017

Consolidated Financial Statements

26. SEGMENT AND RELATED INFORMATION(1) Overview of the reportable segments
The Bank’s reportable segments are determined on the basis that separate financial information for such segments is available and examined periodically by
the Board of Directors to make decisions regarding the allocation of management resources and assess the business performances of such segments within
the Group. The Group’s main operations are banking services. The Bank also provides securities services and operates credit guarantee business and leasing
and credit card businesses. The Group has divided its business operations into the two reportable segments of “Banking and Securities” and “Leasing.”
Banking and Securities includes banking and the securities business, and Leasing includes leasing.

Reportable segments
Banking and
Securities

Ordinary income:Outside customers ......................................
Intersegment income ...................................
Total ........................................................
Segment profit .................................................
Segment assets ................................................
Segment liabilities ...........................................
Other item:
Depreciation ...............................................
Interest income ...........................................
Interest expense ..........................................
Extraordinary gain ......................................
Extraordinary loss .......................................
Tax expense ................................................
Increase in tangible
and intangible fixed assets ..........................

¥

Leasing

73,379830
74,21016,0595,802,932
5,556,156¥ 5,537
970
6,507
421
23,46819,272

3,453
53,401
3,745
—
118
3,824
4,187

Total

¥

Other

Total

¥

80,9903,875
84,866
17,483
5,844,443
5,584,434

Adjustment

Consolidated¥¥

78,9171,800
80,71816,4805,826,401
5,575,428¥ 2,073
2,074
4,147
1,002
18,042
9,005

170(3,875)(3,704)(574)(29,348)(20,477)

81,161—
81,161
16,9095,815,095
5,563,956

118
2
109
—
0
108

3,572
53,403
3,855
—
118
3,933

86
36
14
68
80
366

3,658
53,440
3,870
68
199
4,300

55
(625)
(132)
—
—
(29)

3,714
52,815
3,738
68
199
4,270

136

4,324

196

4,520

(52)

4,468

Notes: 1.	Ordinary income (“Total income” less extraordinary gain included in “Other income” in the consolidated statements of income) is presented in place of net sales of operatingcompanies of other industry groups.
2.	“Other” includes business segments which are not included in the reportable segments and comprises credit guarantees, real estate leasing and management, softwaredevelopment and credit cards.
3. Adjustments are as below:		 (1) Adjustment of ordinary income for outside customers of ¥170 million is mainly the recovery of written off claims included in “Leasing.”		 (2) Adjustment of segment profit of negative ¥574 million is the elimination of intersegment transactions.
		 (3) Adjustment of segment assets of negative ¥29,348 million is the elimination of intersegment transactions.
		 (4) Adjustment of segment liabilities of negative ¥20,477 million is the elimination of intersegment transactions and the adjustment of liability for retirement benefits.
		 (5) Adjustment of depreciation of ¥55 million is the elimination of intersegment transactions.
		 (6) Adjustment of interest income of negative ¥625 million is the elimination of intersegment transactions.
		 (7) Adjustment of interest expense of negative ¥132 million is the elimination of intersegment transactions.
		 (8) Adjustment of tax expense of negative ¥29 million is the elimination of intersegment transactions.
		 (9) Adjustment of increase in tangible and intangible fixed assets of negative ¥52 million is the elimination of intersegment transactions.
4.	Segment profit is reconciled to ordinary profit, which represents ordinary income less ordinary expenses. Ordinary expenses represent “Total expenses” less extraordinary loss
included in “Other expenses” in the consolidated statements of income. Therefore, consolidated segment profit, which shows ordinary profit, is reconciled to “Income before
income taxes” through the addition/deduction of extraordinary gain/loss, net.

43
43

Consolidated Financial Statements

Millions of yen

2016
Reportable segments
Banking and
Securities

Consolidated Financial Statements

Ordinary income:Outside customers ......................................
Intersegment income ...................................
Total ........................................................
Segment profit .................................................
Segment assets ................................................
Segment liabilities ...........................................
Other item:
Depreciation ...............................................
Interest income ...........................................
Interest expense ..........................................
Extraordinary gain ......................................
Extraordinary loss .......................................
Tax expense ................................................
Increase in tangible
and intangible fixed assets ..........................

¥

Leasing

68,256304
68,56013,101
5,494,616
5,244,740¥ 5,633
936
6,569
189
21,912
19,0083,725
53,424
3,796
560
76
1,878
3,239

Total

¥

Other

Total

¥

75,784
3,458
79,243
14,3595,534,093
5,272,398

Adjustment¥

72(3,458)(3,386)(11)(28,485)(18,503)

Consolidated

73,8901,240
75,13013,2905,516,528
5,263,749¥ 1,894
2,217
4,112
1,068
17,5648,649¥

75,856—75,856
14,347
5,505,607
5,253,894

156
2
137
51
0
78

3,881
53,427
3,934
612
76
1,957

85
46
15
645
0
351

3,967
53,473
3,949
1,257
77
2,308

39
(97)
(154)
(696)
—
59

4,006
53,376
3,795
560
77
2,367

192

3,431

83

3,515

(54)

3,461

Notes: 1.	Ordinary income (“Total income” less extraordinary gain included in “Other income” in the consolidated statements of income) is presented in place of net sales of operatingcompanies of other industry groups.
2. 	“Other” includes business segments which are not included in the reportable segments and comprises credit guarantees, real estate leasing and management, softwaredevelopment and credit cards.
3. Adjustments are as below:		 (1) Adjustment of ordinary income for outside customers of ¥72 million is mainly the recovery of written off claims included in “other.”		 (2) Adjustment of segment profit of negative ¥11 million is the elimination of intersegment transactions.
		 (3) Adjustment of segment assets of negative ¥28,485 million is the elimination of intersegment transactions.
		 (4) Adjustment of segment liabilities of negative ¥18,503 million is the elimination of intersegment transactions and the adjustment of liability for retirement benefits.
		 (5) Adjustment of depreciation of ¥39 million is the elimination of intersegment transactions.
		 (6) Adjustment of interest income of negative ¥97 million is the elimination of intersegment transactions.
		 (7) Adjustment of interest expense of negative ¥154 million is the elimination of intersegment transactions.
		 (8) Adjustment of extraordinary gain of negative ¥696 million is the elimination of intersegment transactions.
		 (9) Adjustment of tax expense of ¥59 million is the elimination of intersegment transactions.
		 (10) Adjustment of increase in tangible and intangible fixed assets of negative ¥54 million is the elimination of intersegment transactions.
4.	Segment profit is reconciled to ordinary profit, which represents ordinary income less ordinary expenses. Ordinary expenses represent “Total expenses” less extraordinary loss
included in “Other expenses” in the consolidated statements of income. Therefore, consolidated segment profit, which shows ordinary profit, is reconciled to “Income before
income taxes” through the addition/deduction of extraordinary gain/loss, net.

44
44

Thousands of U.S. dollars

2017
Reportable segments
Banking and
Securities

Increase in tangible
and intangible fixed assets ..........................

37,320

Leasing

Total

Other

703,422
16,044
719,475
146,893
51,933,336
49,696,300$ 18,477
18,48636,964
8,931
160,816
80,265

1,051
17
971
—
0
962

31,838476,004
34,361—
1,051
35,056

766
320
124
606
713
3,262

32,605476,334
34,495606
1,773
38,327490(5,570)(1,176)——(258)

33,104
470,763
33,318606
1,773
38,0601,212

38,541

1,747

40,288(463)

39,825$ 49,353
8,646
57,9993,752
209,180
171,780

$

Total

$

Adjustment

721,900
34,539756,448
155,833
52,094,152
49,776,575

Consolidated$

1,515 $ 723,424(34,539)—(33,015)
723,424(5,116)
150,717(261,591) 51,832,560(182,520) 49,594,045

Consolidated Financial Statements

Ordinary income:Outside customers ...................................... $ 654,060
Intersegment income ...................................
7,398
Total ........................................................
661,467
Segment profit .................................................
143,141
Segment assets ................................................ 51,724,146
Segment liabilities ........................................... 49,524,520
Other item:
Depreciation ...............................................
30,778475,987
Interest income ...........................................
Interest expense ..........................................
33,380Extraordinary gain ......................................
—
Extraordinary loss .......................................
1,051
Tax expense ................................................
34,085

Notes: 1.	Ordinary income (“Total income” less extraordinary gain included in “Other income” in the consolidated statements of income) is presented in place of net sales of operatingcompanies of other industry groups.
2.	“Other” includes business segments which are not included in the reportable segments and comprises credit guarantees, real estate leasing and management, softwaredevelopment and credit cards.
3. Adjustments are as below:		 (1) Adjustment of ordinary income for outside customers of $1,515 thousand is mainly the recovery of written off claims included in “Leasing.”		 (2) Adjustment of segment profit of negative $5,116 thousand is the elimination of intersegment transactions.
		 (3) Adjustment of segment assets of negative $261,591 thousand is the elimination of intersegment transactions.
		 (4) Adjustment of segment liabilities of negative $182,520 thousand is the elimination of intersegment transactions and the adjustment of liability for retirement benefits.
		 (5) Adjustment of depreciation of $490 thousand is the elimination of intersegment transactions.
		 (6) Adjustment of interest income of negative $5,570 thousand is the elimination of intersegment transactions.
		 (7) Adjustment of interest expense of negative $1,176 thousand is the elimination of intersegment transactions.
		 (8) Adjustment of tax expense of negative $258 thousand is the elimination of intersegment transactions.
		 (9) Adjustment of increase in tangible and intangible fixed assets of negative $463 thousand is the elimination of intersegment transactions.
4.	Segment profit is reconciled to ordinary profit, which represents ordinary income less ordinary expenses. Ordinary expenses represent “Total expenses” less extraordinary loss
included in “Other expenses” in the consolidated statements of income. Therefore, consolidated segment profit, which shows ordinary profit, is reconciled to “Income before
income taxes” through the addition/deduction of extraordinary gain/loss, net.

(4) Information about services
Millions of yen

2017

Ordinary income from outside customers ......

Banking

Securities andinvestments¥32,434¥29,166

Leasing¥5,537

OthersTotal¥14,022¥81,161

Millions of yen

2016

Ordinary income from outside customers ......

Banking

Securities andinvestments¥34,788¥20,645

Leasing¥5,633

OthersTotal¥14,788¥75,856

Thousands of U.S. dollars

2017

Ordinary income from outside customers ......
Note:

Banking

Securities andinvestments

Leasing

OthersTotal$289,098$259,969$49,353$124,984$723,424

Ordinary income (“Total income” less extraordinary gain) is presented in place of net sales of operating companies of other industry groups.

(5) Information about geographic areasa. Ordinary income
The ratio of ordinary income from outside customers within Japan to the total ordinary income in the consolidated statements of income exceeded 90% forboth fiscal years ended March 31, 2017 and 2016; therefore, no information about geographic areas is required to be disclosed.

45
45

Consolidated Financial Statements

b. Tangible fixed assets
The ratio of tangible fixed assets located in Japan to the total tangible fixed assets in the consolidated balance sheets exceeded 90% for both fiscal years
ended March 31, 2017 and 2016; therefore, no information about geographic areas is required to be disclosed.

Consolidated Financial Statements(6) Information about major customers
Ordinary income from a specific customer exceeding 10% of the total consolidated ordinary income did not exist for either fiscal year ended March 31, 2017or 2016. Therefore, information about major customers is not required to be disclosed.
(7) Information on loss on impairment of fixed assets for each reportable segment
There is no loss on impairment of fixed assets for the fiscal years ended March 31, 2017 and 2016.
(8) Information on amortization of goodwill and its remaining balance for each reportable segment
There is no information to be reported on amortization of goodwill and its remaining balance.
(9) Information on gain on negative goodwill for each reportable segment
There is no information to be reported on gain on negative goodwill.
27. RELATED PARTY TRANSACTIONS
For the fiscal year ended March 31, 2017, related party transactions were as follows:
Relationshipwith the Bank

Relatives ofofficers of the
Bank

Name

Paid-in
Votingcapital BusinessrightsLocation (millions
line
ownershipof yen)(%)

Relationship ofrelated parties

Eldest son of
Masaaki Hashimoto Lending of money*2(Corporate Auditor) Interest receivable
Loans
Son-in-law ofSatoru Wada
Lending of money*2(Executive Officer) Interest receivable
Loans

AtsutoHashimoto——Publicofficer—

Masato Ibi——

Officeworker

—

10

Metal
processing

—

Loans

32

Forestry

Direct1.55

10Real estate—

NIKKEN
A company in BLAST CO., Daito City
Osaka
which majority LTD. *3of voting rights Kitamura
are held byCity
Forestry Co., Osaka
relatives ofOsaka
officers of the Ltd. *4
Sawamura Ikoma City
Bank
Co., Ltd. *5
NaraDetails oftransactions

Transaction
amount(millions ofyen)Transaction
Year-end
Year-end
amountAccounting balancebalancetitle(millions of (thousands of(thousands ofyen)
U.S. dollars)
U.S. dollars)

0

0

Loans
—

18
—

160
—

0

0

Loans
—

27
—

240
—

Lending of money
Interest receivable

—
0

—
0

Loans
—

105
—

935
—

Loans

Lending of money
Interest receivable

90
2

802
17

Loans
—

200
—

1,782
—

Loans

Lending of money
Interest receivable

10
0

89
0

Loans
—

13
—

115
—

Policies regarding and terms and conditions of the transactions
Notes: 1. Terms and conditions of loans are determined on an arm’s length basis.
2. Real estate is accepted as collateral for loan transactions.
3. Relatives of Naoki Minowa (Managing Director of the Bank) have 62.5% of voting rights of this company directly.
4. Matazaemon Kitamura who took office as a Director of the Bank on June 29, 2016 and his relatives have 6% and 94% of voting rights, respectively, of this company directly. The
above table presents the transactions during the period from June 29, 2016 through March 31, 2017.
5. Kiyohide Sawamura (Managing Executive Officer of the Bank) and his relatives each have 49.25% of voting rights.

For the fiscal year ended March 31, 2016, related party transactions were as follows:
Relationshipwith the Bank

Name

Location

Relatives ofofficers of theBank

AtsutoHashimoto—A company inwhich majorityof voting rights NIKKEN
Daito City
are held by
BLAST CO., Osaka
relatives ofLTD. *3
officers of theBank

Paid-in
Votingcapital Businessrights(millionsline
ownershipof yen)(%)—

Publicofficer

—

10

Metal
processing—

Relationship ofrelated parties

Details oftransactions

Eldest son of
Masaaki Hashimoto Lending of money*2(Corporate Auditor) Interest receivable
Loans

Loans

Lending of money
Interest receivable

Year-end
Transaction
amount Accounting balance
title(millions of(millions of
yen)
yen)
20
0

Loans
—

19
—

90
1

Loans
—

145
—

Policies regarding and terms and conditions of the transactions
Notes: 1. Terms and conditions of loans are determined on an arm’s length basis.
2. Real estate is accepted as collateral for loan transactions.
3. Relatives of Naoki Minowa (Managing Director of the Bank) have 62.5% of voting rights of this company directly.
4. Hiroki Matsuoka retired from the position of Director of the Bank on June 26, 2015. The Bank has loans to his son-in-law, Tetsuya Matsubara, in the amount of ¥28 million as ofthat day.

46
46

28. PER SHARE INFORMATION
Net assets per share at March 31, 2017 and 2016 and net income per share for the fiscal years then ended were as follows:
Yen

2016

2017

¥9,353.18
466.05465.51¥9,376.62
453.22452.60$83.36
4.15
4.14

Note: 	The Bank implemented a one-for-ten reverse stock split on October 1, 2016. Net assets per share, basic net income per share and diluted net income per share are computed basedon the assumption that the reverse stock split was implemented at the beginning of the fiscal year ended March 31, 2016.

Basic information in computing the above per share data was as follows:
Thousands of
U.S. dollars

Millions of yen(Net assets per share)
Net assets ............................................................................................................
Amounts to be deducted from net assets: ...........................................................
Stock acquisition rights ................................................................................
Net assets attributed to common stock ...............................................................
Outstanding number of shares of common stock at end of year
(unit: thousands of shares) ................................................................................
(Basic and diluted net income per share)
Net income attributable to owners of parent .......................................................
Net income attributable to common stockholders of parent ...............................
Average outstanding number of shares during the year
(unit: thousands of shares) ................................................................................
Adjustment to net income attributable to owners of parent ................................
Increase in number of shares of common stock: ................................................
Stock acquisition rights ..................................................................................
Convertible securities not diluting net income per share ....................................

2017

2016

2017

¥251,139
112(112)
251,026¥251,712
136(136)
251,576$2,238,515
998
(998)
2,237,507

26,83826,830—¥ 12,508
12,508¥ 12,159
12,159$ 111,489
111,489

26,838—31(31)—26,828
—
36
(36)
—

—
—
—
—
—

Consolidated Financial Statements

Net assets per share ............................................................................................
Net income per share – basic ..............................................................................
Net income per share – diluted ...........................................................................

U.S. dollars

2017

For the year 2016
As described in Note 2 (q), “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Changes in accounting policies,” effective from the fiscal year
ended March 31, 2016, with respect to the application of the Business Combination Accounting Standards, the Group has applied the provisional treatments
in Paragraph 58-2(4) of Statement No. 21, Paragraph 44-5 (4) of Statement No. 22 and Paragraph 57-4 (4) of Statement No. 7.
As a result, basic and diluted net income per share decreased by ¥27.06 and ¥27.02, respectively, for the fiscal year ended March 31, 2016.
There were no effects on net assets per share.
29. SUBSEQUENT EVENTSThe Bank has implemented an issuance of new shares and a secondary offering of the shares of the Bank pursuant to a resolution at the meeting of the Boardof Directors held on May 23, 2017 concerning the issuance of new shares by public offering and third-party allocation and secondary offering of the sharesof the Bank. The overview is as follows:
1. Issuance of new shares by public offering (general offering)a. Type and number of shares to be issued:
Common stock of the Bank 5,000,000 sharesb. Issue price:¥3,147 ($28.05) per sharec. Total issue price:¥15,735 million ($140,253 thousand)d. Amount to be paid-in:¥3,017.20 ($26.89) per sharee. Total amount to be paid-in¥15,086 million ($134,468 thousand)f. Amounts of common stock and additional paid-in capital to be increased:
Common stock to be increased:¥7,543 million ($67,234 thousand)
Additional paid-in capital to be increased: ¥7,543 million ($67,234 thousand)g. Subscription period:
June 1, 2017 through June 2, 2017h. Date of payment:
June 7, 2017
2. Secondary offering of the shares of the Bank (secondary offering by overallotment)
a. Type and number of shares to be offered:Common stock of the Bank 750,000 sharesb. Entity who engages in secondary offering: Nomura Securities Co., Ltd. (hereinafter “Nomura”)
c. Secondary offering price:¥3,147 ($28.05) per shared. Total amount of secondary offering:¥2,360 million ($21,035 thousand)e. Method of secondary offering:
Nomura will implement secondary offering of 750,000 shares of common stock of the Bank borrowed
from the Bank’s shareholders as a result of taking into consideration demand status of public offering.
f. Subscription period:
June 1, 2017 through June 2, 2017
g. Date of delivery:
June 8, 201747
47

Consolidated Financial Statements

Consolidated Financial Statements

3. Issuance of new shares by third-party allocation designated to Nomura
a. Type and number of shares to be issued:
Common stock of the Bank 750,000 sharesb. Amount to be paid-in:¥3,017.20 ($26.89) per sharec. Total amount to be paid-in:¥2,262 million ($20,162 thousand)d. Amounts of common stock and additional paid-in capital to be increased:
Common stock to be increased:¥1,131 million ($10,081 thousand)
Additional paid-in capital to be increased:¥1,131 million ($10,081 thousand)e. Date of subscription:
July 3, 2017
f. Date of payment:
July 4, 2017
4. Use of funds
The Bank plans to appropriate the funds obtained by this public offering and third-party share issuance to working capital such as loans for the small- andmedium- sized companies by the end of March 2018 to stimulate the capital demand leading to the regional growth and positively provide the funds toward
regional vitalization which is one of the strategic priorities of the medium-term management plan of the Bank.
30. BORROWED MONEY, BONDS PAYABLE AND LEASE OBLIGATIONS
a. The details of borrowed money as of March 31, 2017 and 2016 were as follows:
Thousands of
U.S. dollars

Millions of yen

Borrowed money
Due from April 2017 through May 2025
Average interest rate: 0.25% p.a. ....................................................................

2017

2016

2017

¥205,308¥189,724$1,830,002

Millions of yen

Thousands of
U.S. dollars¥39,011
3,013
86,64876,098388
146¥205,308$347,722
26,856772,332
678,295
3,458
1,301$1,830,002

Millions of yen

Thousands of
U.S. dollars

Annual maturities of borrowed money as of March 31, 2017 were as follows:
2018 .........................................................................................................................................................
2019 .........................................................................................................................................................
2020 .........................................................................................................................................................
2021 .........................................................................................................................................................
2022 .........................................................................................................................................................
2023 and thereafter ..................................................................................................................................
Total .........................................................................................................................................................
b. The details of bonds payable as of March 31, 2017 and 2016 were as follows:
Not applicable.
c. Lease obligations
Lease obligations are included in “Other liabilities” in the accompanying consolidated balance sheets.
Annual maturities of lease obligation as of March 31, 2017 were as follows:
2018 .........................................................................................................................................................
2019 .........................................................................................................................................................
Total .........................................................................................................................................................

¥0
0
¥0

$0
0
$0

Average interest rates are omitted since the interest equivalent amount included in total lease charges is allocated over the related period using the straightline method.
d. Other
The Group has not issued commercial paper by way of promissory notes for funding for operating activities.

48
48

Independent Auditors’ Report

Independent Auditors’ Report49
49

Capital Management
Consolidated Capital Adequacy Ratio
As of March 31, 2017 and 2016
Millions of yen(1) Capital adequacy ratio ((2)/(3)) ..............................................................................................................
(2) Capital .....................................................................................................................................................
(3) Risk-weighted assets ...............................................................................................................................
(4) Requisite capital ......................................................................................................................................

2017

2016

9.42%
¥ 219,303
2,327,732
93,1099.36%¥ 206,945
2,209,741
88,389Note: The capital adequacy ratio was calculated on the basis of the formula provided by the Ministry of Finance under Provision 14, Clause 2 of the Banking Law.

Capital Management

Nonconsolidated Capital Adequacy Ratio
As of March 31, 2017 and 2016
Millions of yen(1) Capital adequacy ratio ((2)/(3)) ..............................................................................................................
(2) Capital .....................................................................................................................................................
(3) Risk-weighted assets ...............................................................................................................................
(4) Requisite capital ......................................................................................................................................

2017

2016

9.19%
¥ 211,545
2,300,789
92,031

9.11%¥ 198,913
2,181,192
87,247

Note: The capital adequacy ratio was calculated on the basis of the formula provided by the Ministry of Finance under Provision 14, Clause 2 of the Banking Law.

50
50

Organization, Group Network(As of July 3, 2017)

ORGANIZATIONSTOCKHOLDERS’ MEETINGHEADQUARTERS
General Secretariat

BOARD OF DIRECTORS

Corporate Planning Division

Business Planning& Promotion Headquarters

Risk Management Division

ChairmanPresident
Directors

Directors

Business Support DivisionCorporate Business Division
Personal Business Division
Private Banking Division
Public Institutions & Regional Vitality Creation Division• DOMESTIC
OFFICES

Osaka Regional Headquarter

Organization, Group Network

Compliance Management Division

MANAGING DIRECTORS’COMMITTEE

Credit Analysis Division
Financial Investment Division

BOARD OF CORPORATE AUDITORS

Operations Support Division
Systems Division
Personnel DivisionCorporate Auditors

General Affairs DivisionCorporate Auditors’ OfficeInternal Audit Division

NANTO BANK GROUP(As of July 3, 2017)
The Nanto Group, which consists of the Nanto Bank and its 10 consolidated subsidiaries, offers financial
services related to credit guarantees and leasing as well as its primary business, banking services.

THE NANTO BANK, LTD.

BankingHead Office and 108 Branches
27 Sub-branches
3 Agencies (Nanto Bank Agency Co., Ltd.’s business offices)
2 Representative Offices (Hong Kong and Shanghai)

Credit Guarantees

Nanto Credit Guarantee Co., Ltd.

Leasing

Nanto Lease Co., Ltd.

Computer Software
Development andServices

Nanto Computer Service Co., Ltd.

Credit Card Business

Nanto DC Card Co., Ltd.
Nanto Card Services Co., Ltd.

Other Operations

Nanto Estate Co., Ltd.
Nanto Business Service Co., Ltd.
Nanto Investment Management Co., Ltd.
Nanto Staff Service Co., Ltd.
Nangin Agency Co., Ltd.

Companies indicated with a pink square are consolidated subsidiaries.

51
51

Affiliates and Subsidiaries, Bank Data

(As of July 3, 2017)

Outline of Consolidated Subsidiaries
Indirect
Direct holdings holdings through
Capital(millions of yen) of the Bank (%) subsidiaries (%) Business line

Affiliates and Subsidiaries, Bank Data

Subsidiaries

Address

Established

Nanto Estate Co., Ltd.

16, Hashimoto-cho
Nara City, Nara, Japan

November 8,
1969

¥30

100%

—

Leasing and managementof real estate

Nanto Business Service
Co., Ltd.

93-2, Minami-Kyobate-cho
1-chome, Nara City, Nara, Japan

June 1,
1984

10

100

—

Centralized processing ofclerical operations for the Bank

Nanto Credit
Guarantee Co., Ltd.

1-1, Shimo-Sanjo-cho Nara City,
Nara, Japan

October 9,
1984

10

100

—

Credit guarantee

Nanto Lease Co., Ltd.

52-1, Omori-cho Nara City,
Nara, Japan

December 22,
1984

500

100

—

Leasing

Nanto Computer Service
Co., Ltd.

93-2, Minami-Kyobate-cho
1-chome, Nara City, Nara, Japan

July 1,
1986

10

100

—

Computer softwaredevelopment and services

Nanto Investment
Management Co., Ltd.

297-2, Omiya-cho 4-chome Nara
City, Nara, Japan

November 21,
1986

120

100

—

Investment advisory
services

Nanto DC Card Co., Ltd.

61-7, Higashi-Ikoma
October 12,
1-chome, Ikoma City, Nara, Japan 1990

50

100

—

Credit card business

Nanto Card Services
Co., Ltd.

61-7, Higashi-Ikoma
December 10,
1-chome, Ikoma City, Nara, Japan 1990

50

100

—

Credit card business

Nanto Staff Service
Co., Ltd.

297-2, Omiya-cho 4-chome Nara
City, Nara, Japan

March 18,
1991

20

100

—

Dispatch of temporary staff

Nangin Agency Co., Ltd.

297-2, Omiya-cho 4-chome Nara
City, Nara, Japan

October 6,
2009

50

100

—

Bank agency services

HEAD OFFICECORPORATE DATA (As of March 31, 2017)16, Hashimoto-cho
Nara City, Nara 630-8677, Japan
Phone: (0742) 22-1131
URL: http://www.nantobank.co.jp/

Authorized shares:
Outstanding shares:
Stated capital:
Number of stockholders:Date of incorporation:
Domestic network:
Overseas network:
Number of employees:
Ordinary stockholders’ meeting:Stock listings:

HONG KONG REPRESENTATIVE OFFICEROOM 1709,
17/F, HUTCHISON HOUSE,
10 HARCOURT ROAD,
HONG KONG
Phone: 852-2868-9932

SHANGHAI REPRESENTATIVE OFFICE
16F, Hang Seng Bank Tower, 1000 Lujiazui Ring Road,
Pudong New Area, Shanghai, China
Phone: 86-21-6841-2771

64,000,000
27,275 thousand
29,249 million
9,373
June 1934
139 offices
2 representative offices
2,615
June 29, 2017
Tokyo Stock Exchange

MAJOR STOCKHOLDERS (As of March 31, 2017)
Number of shares(thousands)

Percentage
(%)

1,053

3.86

(standing proxy: Trust & Custody Services Bank, Ltd.)

1,043

3.82

Japan Trustee Services Bank, Ltd.
(trust account)
The Nanto Bank Employees’ Stockholders Association
Sumitomo Life Insurance Co.

1,001
774

3.67
2.83

662

2.42

540
508
476

1.98
1.86
1.74

451
418
6,929

1.65
1.53
25.40

Nippon Life Insurance Co.

(standing proxy: The Master Trust Bank of Japan, Ltd.)

Meiji Yasuda Life Insurance Co.

(standing proxy: Japan Trustee Services Bank, Ltd.)

Japan Trustee Services Bank, Ltd(trust account 9)
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
DMG MORI Co., Ltd.
The Master Trust Bank of Japan, Ltd.
(trust account)
Kitamura Forestry Co., Ltd.
Total

52
52

THE NANTO BANK, LTD.
16, Hashimoto-cho, Nara City, Nara 630-8677, Japan
Phone: (0742)22-1131