Annual Report

Shinkin Central Bank

2019

Shinkin Central Bank,
the Central Bank for Shinkin Banks
As the central financial institution in Japan for the cooperative regional financial institutions, known asshinkin banks, the Shinkin Central Bank (hereinafter the SCB) occupies a well-established position in Japan’s
financial industry. Shinkin banks currently hold funds totaling some ¥143 trillion (around US$1,293 billion).

Management Philosophy and Operational Policies
Management Philosophy
As the central bank for all shinkin banks, the SCB supports the growth of the shinkin bank industry, thereby contributing to economic development
throughout Japan.

Operational Policies

1.

Strengthen the corporate base, broaden operational functions, and enhance the credit standing of shinkin banks.

2. Attract stable funds from shinkin banks and diversify funding sources.
3. Upgrade market operations and develop financial services.
4. Pursue new business to reflect changing financial circumstances.
5. Contribute to regional development and revitalization hand in hand with shinkin banks.
6. Achieve sound management through efficiency, capital adequacy, and strengthened risk management.
7.

Nurture professionals and create an attractive workplace.

8. Enhance public trust in the SCB.
Corporate Data (as of March 31, 2019)
Name:
Established:
Number of employees:
Domestic network:
Overseas network:
Total assets:
Total funds:
Paid-in capital:
Preferred shares:
Capital adequacy ratio(consolidated):
Number of member
shinkin banks:Long-term credit ratings:(as of July 31, 2019)

Shinkin Central Bank (SCB)
June 1, 1950
1,198
14
5
¥39,432 billion ($355 billion)¥37,386 billion ($336 billion)¥690 billion ($6,227 million)¥90 billion ($820 million)

Shinkin Bank
Shinkin Bank
Shinkin Bank
Shinkin Bank

23.65%259
A1 (Moody’s)
A (S&P)
A+ (R&I)
AA (JCR)* The number of employees includes full-time Directors and Corporate
Auditors. Our overseas network includes Shinkin International Ltd., asubsidiary in London.

Shinkin Bank
Shinkin Bank
Total assets: ¥39,432 billion ($355 billion)
Domestic network: 14
Overseas network: 5
Number of employees: 1,198
Number of member shinkin banks: 259

Number of shinkin banks: 259
Total assets: ¥157,690 billion($1,421 billion)
Number of branches: 7,294
Number of employees: 106,541
Number of members: 9,197,080(As of March 31, 2019)

Financial Highlights (Non-consolidated Financial Summary)Millions of Yen
For the years ended March 31,

2019

2018

Millions of US Dollars*
2017

2019

2018

2017

$2,332$2,594$2,531

For the Fiscal Year
Total income¥258,767 ¥275,792 ¥284,018

Total expenses

201,720

213,136

235,680

1,817

2,005

2,100

Net income (loss)

42,28646,49841,383

381

437

368

Net business profit (loss)

42,79150,53542,657

385

475

380

¥39,432,740 ¥38,552,702 ¥37,257,840$355,377$362,746$332,095

At the Year-end
Total assets
Loans and bills discounted

7,045,582

6,952,659

7,995,390

63,49665,41871,266

Securities

16,613,593

17,137,785

17,204,776

149,725

161,251

153,353

Total liabilities

37,799,235

36,949,667

35,654,367

340,656

347,663

317,803

Deposits

30,966,816

30,260,341

29,176,129

279,080

284,722260,059

Debentures

2,486,710

2,714,890

2,952,900

22,41025,544

26,3201,633,504

1,603,035

1,603,472

14,721

15,083

14,292

Net assets* US dollar amounts are given for convenience only, converted at the rate of ¥112.19, ¥106.28, and ¥110.96 per US$1.00, the prevailing rate as of March 31, 2017, 2018, and 2019respectively.

Contents
Financial Highlights (Non-consolidated Financial
Summary) ................................................................................. 1
Message from the President and CEO ............................. 2
Corporate Management and Auditors ............................. 4
About Shinkin Central Bank ............................................... 5
About Shinkin Banks ............................................................. 6
New Medium-Term Management Plan “SCB Strategy
2019” ......................................................................................... 8
Initiatives for Realizing a Sustainable Society ................ 11
Overseas Networks ............................................................ 13
Business Overview .............................................................. 14

Capital Adequacy ................................................................ 15
Asset Quality ....................................................................... 16
Important Management Indices ........................................ 17
Corporate Governance ..................................................... 18
Compliance System ............................................................. 19
Risk Management .................................................................. 21
Preferred Shares ................................................................. 24
Financial Section .................................................................. 25
Organization / The SCB Group ....................................... 80
International Directory ..................................................... 81

This material contains certain forward-looking statements. They are not guarantees of future performance and involve risks and uncertainties, while actual results may materiallydiffer from those contained in the forward-looking statements as a result of various factors.
US dollar amounts are converted for convenience only, at ¥110.96 per US$1.00, the prevailing rate on March 31, 2019.

1

Message from the President and CEO

The Shinkin Central Bank (the “SCB”) serves
as the central bank for Japan’s 259 shinkinbanks—regional financial institutions, which
specialize in operations with small andmedium-sized enterprises (SMEs).
Since its establishment in 1950, the SCB
has provided a wide range of financial services
in order to expand the potential of the shinkinbank industry.

Fiscal 2018 Earnings Performance
In fiscal 2018 (ended March 31, 2019), while
the Bank of Japan continued its monetary easing policy, uncertainty over the future persisted due to such factors as trade friction
between the United States and China, and theBrexit, leading to an unstable market environment characterized by concerns about theslowdown of the global economy.
Despite of this difficult business environment, as a result of conducting our flexible
operations in response to volatile market conditions, continuing our program of diversified
investments aimed at building a stable earnings base, and active promotion of loans tobusiness corporations, consolidated ordinary
income for fiscal 2018 came to ¥63.4 billion,
while profit attributable to owners of parent
was ¥44.7 billion.

Previous Medium-term Management
Plan Review
The SCB designated our “SCB Medium-term
Action Program 2016” (the “previous medium-term plan”) that ran from fiscal 2016 to
fiscal 2018 as “a period in which to strengthen
the foundations of the shinkin bank industry,so that it can leverage its collective capabili-

2ties over the next ten years”. This program
was comprised of three core plans to enable
us to contribute to the sustainable development of regional economies, in support ofwhich we implemented various initiatives.
In addition to supporting initiatives aimed
at SMEs, individual customers and regional
communities to enhance customer relationsat shinkin banks, Core Plan 1 involved measures for responding to the digitalization exemplified by “fintech”.
In terms of backing initiatives aimed at
SMEs, we have provided support matched to
the life stage of the SMEs in the form of capital-like funding for SMEs during their founding
and growth phases, as well as business matchmaking services to find partners that can help
them expand their sales channels. We also
worked to strengthen the support structure
for the overseas expansion of shinkin bankcustomers by cooperating and partneringwith overseas banks and external organizations.
As for initiatives to support individual customers, we are seeing growing demand fromour clients for the transfer of their assets between generations, and in January 2017 webegan providing trust products for individual
customers with the objective of helping themwith their inheritance and inter vivos gifts,
which are now used by many of our customers.
We have also implemented measures
aimed at supporting the regional communities, such as “Regional Revitalization Support
Package” that provides consulting services fora variety of regional revitalization themes, aswell as partnering with the Nippon Foundation to promote the regional revitalization initiatives of shinkin banks and local companies.
As part of our response to the digitalization of finance, which includes fintech, we established Digital Innovation Office and concluded investment in and business alliancewith Origami Inc., which provides smartphone-based payment services, promoting
regional revitalization through cashless payment systems.
Core Plan 2 involved supporting important shinkin bank initiatives to “boost earnings
capacity” and “enhance financial soundness”,
with the goal of enhancing their management
stability.

SCB Medium-term Action Program 2016

Core Plan 1

Core Plan 2

Assist shinkin banks
to enhancetheir customer relations

Assist shinkin banks
to enhance their
management stability

Core Plan 3
Enhance SCB’s
management stability

In terms of support for boosting earnings
capacity, we have used our trust banking business functions to begin offering investment
products for shinkin banks such as “SCB
Global Trust”, and “SCB Callable Trust”, while
establishing Portfolio Management Support
Office which provies analysis of the current
state of shinkin bank securities portfolios,
support for implementing profit simulations
and drawing up investment plans. From theperspective of improving operational efficiency and cost reduction, the SCB also took
steps such as centralizing deposit assessment
operations, which are common to all shinkinbanks.
In order to further enhance financial
soundness, we worked to maintain an orderly
financial system within the shinkin bank industry by means of the timely and appropriate
operation of a unique safety net for the shinkinbank industry, including such elements as theprovision of various consulting services andthe Shinkin Bank Management Reinforcement
System.
Core Plan 3 involved promoting measures
to diversify sources of revenue over the medium to long term, such as diversifying investments and strengthening corporate sales, inorder to enhance the financial and earnings
stability of the SCB and enable it to steadily
implement the policies described in Core Plan
1 and Core Plan 2.
We were also able to achieve the target
values of the four management indicators that
we set as goals.
In terms of backing for reconstruction after natural disasters, which was designated a
key measure, through the “Shinkin no Kizuna
Reconstruction Support Project” we provided assistance to non-profit organizations sup-Achievement of “Target Figures”
Profit attributable toowners of parent
Target:

FY2018Results:¥40.0 billion ¥44.7 billion

Outlier ratio
Target:20%
maximum

Consolidated capital adequacy ratio(domestic standard)
Target:

FY2018Results:

At least 15%

23.65%

Overhead ratio

FY2018Results:

Target:

FY2018Results:

12.53%

45%
maximum

40.77%

porting those affected by natural disasters,
and worked to help shinkin bank customers in
the affected regions on the expansion of sales
channels.

Drawing Up the New Medium-Term
Management Plan
In addition to reviewing the previous mediumterm plan, having taken into account thechanges in the internal and external environment, the SCB has drawn up its new MediumTerm Management Plan “SCB Strategy 2019”(the “new medium-term plan”), which runs
for the three-year period beginning in fiscal
2019.
Below we explain the four points in developing the new medium-term plan.
The first is that we have decided on a medium- to long-term “vision” for the SCB. The
term of the new medium-term plan is three
years, but rather than simply listing the measures for these three years, we have also comeup with a “vision” for the SCB in five to ten
years from today, to show the directions wewill take over the years.
The second is that we have presented
strategies that emphasizes the “priority” ofthe measures involved instead of their “comprehensiveness”. Rather than exhaustively
listing each and every initiative that we shouldtackle over the next three years, we havespecified the highest priority strategies necessary for achieving our “vision”.
The third is an approach grounded in going a step beyond providing “support” forshinkin banks and instead working on “cooperation” with them. For measures and so onthat would be challenging to apply to individual shinkin banks, the SCB will go a step beyond
providing “support” to shinkin banks, which
was the previous concept, and instead takethe approach of providing “cooperation” bysharing objectives with shinkin banks, andjoining its strengths to theirs to resolve difficult issues.
The fourth is enhancing collaboration
with external organizations. In order to develop the shinkin bank industry suitable forthe new Reiwa era, we have decided to accelerate our collaboration with external organizations, and proactively introduce the products, services and approaches of companies
with different viewpoints and high levels of
expertise.

ing the future where Shinkin Bank is most reliable bank in every local area, by allocating resources to each banks field of expertise”. It is
this aim that we have decided to adopt as our“vision” for the next five to ten years.
In order to achieve our aim, we have selected seven high-priority strategies to be executed over the next three years.
We will steadily implement the strategies
outlined in the plan, and strive to realize our“vision”.

Realizing a Sustainable Society
SCB Strategy 2019
Financial institutions are currently facing an
operating environment beset by fundamental
problems, such as declining birthrate, aging
population and the falling numbers of SMEs,
resulting in ailing regional economies. Together with the decline in earnings capacity caused
primarily by the Bank of Japan’s unprecedented monetary easing and the rapid advance ofdigitalization, there are many important issues, and it is vital that each financial institution adapts their own business model to thesechanges and the needs of the time being.
Under these conditions, if shinkin banks
wish to increase their presence in the regions
and become the most trusted regional financial institutions, they must prioritize the allocation of management resources to resolve
the problems faced by regional economies.
In order to achieve this, the SCB will promote increased commonality and joint usage
for shinkin bank processing operations andadministration business, as well as actively developing joint products and services with theaim of raising the efficiency of operations
management and improving problem-solving
capabilities.
Furthermore, by focusing not only onshinkin banks but also on building organic
partnerships with external organizations thattranscend the confines of the sector, the SCB,
as a hub and coordinator for the shinkin bankindustry, will drive the evolution of the industry network into a kind of “problem-solving
system” for both regions and shinkin banks,
thus maximizing the value of the network.
In this way, “together with Shinkin Banks,
SCB will aim for constructing combined operations as one banking group, improving
competitiveness of Shinkin group, and achiev-

The SCB recognizes that compliance with theinternational Sustainable Development Goals(SDGs) for realizing sustainable societies is an
important theme, and in addition to the financial initiatives, the SCB will plan and implement various environmental measures in relation to dealing with climate change and global
warming, thus responding to a range of societal demands. At the same time, the SCB willfurther enhance compliance and strengthen
corporate governance to achieve its goal of
becoming a financial institution that is valued
highly throughout the society.
We will work for an even stronger awareness of the importance of our role as the central bank for shinkin banks, whose mission isto resolve issues faced by regional economies
as a regional financial institution while striving
for the further development of the shinkinbank industry, and in turn to do everything in
our power to contribute to the prosperity ofJapan’s economy and society.
Going forward, we humbly ask for yourcontinued understanding and support.

Hiroyuki Shibata
President and CEO
July 20193

Corporate Management and Auditors

Koji Sato

Hiroyuki Shibata

Hajime Hioki

Hiroshi Nakahara

Hiroshi Sudo

Norihiro Takano

Chairman of the Board of
Directors (Part-time)

Directors

Kenichiro Mimuro

Hideki Sasaki

Masatoshi Takahashi

Koji Sato

Takashi Hanaoka

Toshiyuki Masuda

Zon Suzuki

Masao Kawamura

Kenji Tanaka

Hiroyuki Hashimoto

Chairman of the Board of Directors

Senior Managing Director

President and Chief Executive Officer

President and Chief Executive Officer

Senior Managing Director

Hiroyuki Shibata

4

Deputy President

Senior Managing Director

Tatsuo Takeda
Akihide Yokogawa

Deputy President

Director and Executive Advisor(Part-time)

Hajime Hioki

Mitsuo Tanabe

Masanori Wada

Senior Managing Directors

Directors (Part-time)

Corporate Auditor

Hiroshi Nakahara

Masatoshi Masuda

Hiromichi Chisaka

Hiroshi Sudo

Ikuo Higuchi

Norihiro Takano

Hiroshi Hiramatsu

Corporate Auditors (Part-time)

Takashi Abe

Rinichi Hoshi

Managing Directors

Tetsuji Hara

Minoru Kondo

Keisuke Izutsu

Kazuo Kobayashi

Masamichi Narita

Yuzuru Nishino

Norikazu Shibuya

Akio Okuyama

Takehiko Murotani

Shigeharu Obayashi

Hiromi Nomura(As of July 31, 2019)About Shinkin Central BankThe SCB was established as a cooperative financial institution funded by the shinkin banks, and serves as the central bank for shinkin banks
throughout Japan, which are also its members. Here we will explain the three major functions performed by the SCB in the shinkin bank industry.

Deposits(surplus funds)

SMEs
Deposits

Individual
customers

Regional
communities

Shinkinbankcustomers

Shinkinbanks
Loans
Provides financial
services

Japan’s 259 shinkin banks play a key role insupporting regional economies by lending tolocal organizations and SMEs.
However, individual shinkin banks are
sometimes restricted in performing theirbanking functions because of their scale andlimitations on their business area.
In order to supplement services thatshinkin banks cannot perform easily or efficiently on an individual basis, the SCB, an organization that unifies the group, provides
support for the various services performed by
SMEs, individual customers and regional communities.
The SCB is also involved in initiatives toassist in areas such as business matchmaking
and overseas expansion services to SMEs, asset buildup and inheritance services for individual customers, and revitalization measuresand the use of fintech in the regions, with thegoal of enabling shinkin banks to respondpromptly to the increasing sophistication anddiversity of customer needs and to deal withintensifying competition from other businesscategories.

2. Support Functions for the Managementof Shinkin BanksThe SCB offers management support to help
shinkin banks boost their earnings capacityand enhance their financial soundness.
In order to boost earnings capacity, the
SCB provides investment products for shinkin

Domestic andoverseas financial
markets and local
public entities,business corporations

Support for the
management ofshinkin banks

Investment

1. Support Functions for the Business of
Shinkin Banks

Support for thebusiness ofshinkin banks

ShinkinFund management
Centralfor the shinkin
Bank（SCB） bank industry

Investmentbanks, and works on initiatives to improve operational efficiency and reduce costs by centralizing operations that are common to all inthe shinkin bank industry.
As for enhancing financial soundness,through such measures as operating the
Shinkin Bank Management Reinforcement System, a unique safety net for the shinkin bankindustry that includes such elements as analysis of shinkin bank management, provision ofmanagement advice to shinkin banks, and increasing capital for shinkin banks, the SCB
seeks to maintain and increase the credibilityof the shinkin bank industry, and thus contribute to the stability of Japan’s financial system.

its made at shinkin banks throughout Japanand funds obtained through the issue of debentures and invests these in financial products both in Japan and overseas, and in loans
to business corporations.
Of approximately ¥38 trillion in assets,
around ¥17 trillion is invested in securities
such as government bonds, corporate bonds
and foreign securities, while ¥14 trillion is invested in short-term money markets andabout ¥7 trillion is invested in the form ofloans to governmental and local public entities, and business corporations.
The SCB thus takes an important role inJapan’s money and securities markets as aleading institutional investor.

3. Fund Management Functions for the Shinkin
Bank Industry
The SCB manages funds derived from depos-

The Shinkin Bank Management Reinforcement System
Management analysis system
Objective quantitative and qualitative analyses arecarried out on the management status of shinkin banks.

Management advisory system

ShinkinCentralBank

Discussions on management are carried out to address
overall management and individual management themesof shinkin banks.

Capital reinforcement system

Shinkinbanks

Shinkin banks that require capital reinforcement raise
additional capital as subordinated loans or preferredshares.

5

About Shinkin Banks
Shinkin banks are cooperative financial institutions. Their membership comprises local
residents and SMEs. Shinkin banks’ distinctive characteristics are that they are conveniently located; offer fine-tuned, personalized
services; and have a strong relationship of mutual trust with their customers and communities.
Cooperative financial institutions are orga­
nizations that operate under the fundamental
principle of mutual support.
Shinkin banks limit their lending, in principle, to members. However, their functions arealmost the same as those of commercial banks,
and they also deal with many people who are
not members, accepting deposits, providing
exchange services, accepting payments, including those for public utilities, and engaging inover-the-counter sales of public bonds, investment trust funds, and insurance.
Shinkin banks not only provide deposit, lending and exchange services, but also offer a diverse
range of services to customers and other members of the local community in such areas assupport for management improvement and enterprise renewal, business succession support, business start-up support, and local-area revitalization.

Outline of Shinkin Banks

Japan’s 259 shinkin banks form an extensive
network, with approximately 7,300 offices
across the country, from Hokkaido in the northto Kyushu and Okinawa in the south.
Shinkin banks dedicate themselves to providing high-quality services to local residents,
as financial institutions that are deeply rooted
in their respective regions, and contribute toregional development.
Total deposits outstanding at 259 shinkinbanks as of March 31, 2019, reached approximately ¥143 trillion ($1,293 billion), which ranks
it in third place after Japan’s city and regionalbanks, and gives shinkin banks an important position in Japanese financial markets.
Shinkin banks continue to further deepen
their presence and roles as important infrastructure for regional economies and communities.

Deposits1 Outstanding by
Bank Segment (As of March 31, 2019)
City Banks

2,409

Shinkin Banks

1,293

Second-tier Regional BanksManagement improvement /enterprise renewal

Co-financing

Succession support / M&As

Product and service expansion

Overseas expansion

Personal lending businessBusiness start-ups

Local-area revitalization

Shinkinbankcustomers

Nationwide Network of Shinkin Banks (259 banks)

Hokuriku (16 banks)
Kinki (29 banks)

Hokkaido (20 banks)

Chugoku (21 banks)
Tohoku (27 banks)

Kyushu (27 banks)

Kanto (49 banks)

Tokyo (23 banks)
Tokai (36 banks)

Okinawa (1 bank)

Shikoku (10 banks)

Deposits Outstandingat Shinkin Banks(Trillions of yen / billions of US dollars)$3,362Agricultural Cooperatives

131.9(1,098)134.7(1,195)137.9(1,229)140.9(1,326)

Loan and Bills Discounted
Outstanding at Shinkin Banks(Trillions of yen / billions of US dollars)

143.4(1,293)
65.8
(547)

67.3
(597)

69.1
(616)

70.9
(667)

71.9
(648)

930
2

590

Credit Cooperatives

186

Labor Credit Associations

183

1. Deposit includes domestic operations.
2. City banks, regional banks and second-tierregional banks do not include the special
international financial transactions account.
Sources: Japanese Bankers Association, the Norinchukin
Bank, National Central Society of Credit
Cooperatives, National Association of Labour
Banks and the SCB.

6

Shinkinbanks(Billions of US dollars)
2

Regional Banks2

Notes:

Shinkin Bank Services

2015

Note:

2016

2017

2018

2019

Items in parentheses are US dollar amounts.
They are given for convenience only, withconversion at ¥120.15, ¥112.69, ¥112.19,¥106.28 and ¥110.96 per US$1.00, the prevailingrate on March 31, 2015, 2016, 2017, 2018 and2019, respectively.
Source: The SCB.

2015

Note:

2016

2017

2018

2019

Items in parentheses are US dollar amounts.
They are given for convenience only, withconversion at ¥120.15, ¥112.69, ¥112.19,¥106.28 and ¥110.96 per US$1.00, the prevailingrate on March 31, 2015, 2016, 2017, 2018 and2019, respectively.
Source: The SCB.

Capital Adequacy Ratio of Shinkin Banks
13.17%

13.08%
12.78%

2015

The capital adequacy ratio of shinkin banks fell
to 12.26% (preliminary figure) as of March 31
2019, from 12.51% at the end of the previous
fiscal period. This decline was driven by theincrease in risk-weighted assets relating mainly
to loan growth.
The ratio maintains a level that is not inferior to that of other business categories,
and is outperforming other domestic regionalbanks (9.53%) and second-tier regional banks(9.05%).

2016

12.51%

2017201812.26%

2019(Preliminary figure)

Source: The SCB.

Nonperforming-loan Ratioof Shinkin Banks (%)

Non-consolidated Capital Adequacy
Ratio by Bank Segment (%)(as of March, 31, 2019)

5.91%
17.37%

5.30%
4.75%

12.26%

Shinkinbanks

City banks(Preliminary figure)

4.32%

9.53%

9.05%

Regional
banks

Second-tierregional banks(Domestic)

Sources: Bank disclosure document, Regional Banks Association of Japan, The
Second Association of Regional Banks.

2015

2016

2017

2018

4.05%

2019
(Preliminary figure)

Source: The SCB.

Difference between Shinkin Banks and Commercial Banks
Category

Shinkin Banks

Commercial Banks
Banking Act

Legal foundation

Shinkin Bank Act

Organization

Non-profit cooperative organization financed For-profit joint stockby its members
corporations

Membership qualifications(1) ‌Those who have an address or office in the Noneregion(2) Those who have a business office in the region(3) Those who work in the region(4) Executive officers of companies that have abusiness office in the region(In the case of businesses)
Businesses with no more than 300 employees orwith less than 900 million yen in capital

7

New Medium-Term Management Plan “SCB Strategy 2019”
The current business environment surrounding shinkin bank industry involves a number of new and important issues that must be dealt with,such as falling earnings capacity caused primarily by the Bank of Japan’s unprecedented monetary easing, and the rapid advance of digitalization.
Based on this situation, the SCB has definitely decided the medium to long term “vision”, and in pursuit of this has drawn up the new
medium-term management plan “SCB Strategy 2019” that began in April 2019, with seven high-priority strategies as its key components.

Management Philosophy
Operational Policies
Medium-Term Management Plan “SCB Strategy 2019” (fiscal 2019 to fiscal 2021)
Our vision for the SCB for the next five to ten years
Together with Shinkin Banks, SCB will aim for constructing combined operations as one banking group, improving competitiveness of Shinkin group, and achieving the future where Shinkin Bank is most reliable bank in every local area, by allocating resources to each banks field of expertise.

Seven high-priority strategies
Strategy1Strategy2Strategy
3

Assist Shinkin Banks to build
sustainable business model

Assist Shinkin Banks
to enhance risk management

Promote Shinkin Bank's
digitalization

Strategy
4
Promote to utilize network among Shinkin Banks, SCB and external organization

Strategy5Strategy
6

Pursue optimal balance among profit,
risk and capital distribute
managerial resources appropriately●Levels of management
indices that should bemaintained

8

Nurture appropriate central
financial institution's employee,create an attractive workplace

Promote efficient operation

Consolidated capital adequacy ratio(domestic standard)
At least 15%●Target level of earnings

Strategy
7

Maximum amount available for dividend
At least ¥200 billion

Profit attributable to owners of parent
Around ¥40.0 billion

Strategy

1

Assist Shinkin Banks to build sustainable business model

In order to continue providing a range of services and initiatives for resolving regional issues, shinkin banks mustensure an appropriate level of earnings, and shinkin banks themselves must grow and develop along with their customers. For that reason, we are seeking to strengthen shinkin bank’s investment management and operational efficiency.
• Strengthening Support for Investment Strategies
With the aim of strengthening shinkin bank’s investment management, and in order to put into practicethe support of shinkin banks based on the ideas jointly
held by all of the SCB group, we have drawn up the“Fundamental philosophy on support for shinkin banks
investment strategies”. By spreading this philosophy
among our group companies, we will bolster the support provided by the Group as a whole.
In order to enhance the collective ability of the
SCB and its subsidiaries to provide products, the SCB
will work to strengthen partnerships both within theGroup and with external agencies.

Strategy2• Promotion of Commonalization and Cooperation ofWork
By collaborating with external agencies, subsidiaries
and affiliated companies, the SCB promotes the commonalization and cooperation of internal procedures,such as transactions with customers and payroll, that
individual shinkin banks are working on, and will fulfill
a role as the central processing division of the industry.
Furthermore, with digitalization and the shift to
cashless transactions expected to advance rapidly, we
will investigate joint branches as well as strategic allocation in ATM networks in the shinkin bank industry.

Assist Shinkin Banks to enhance risk management

To enable shinkin banks to assign management resources to initiatives aimed at resolving client issues, we will put
in place arrangements to support the strengthening of shinkin banks’ ability to manage risk, while reinforcing
mechanisms for ensuring financial soundness.
• Strengthen the Ability of Shinkin Banks to Manage Risk
We will implement countermeasures for money laundering and the financing of terrorism, publish information in relation to reinforcing cyber security and provide consulting services to individual shinkin banks inorder to raise the bar with regard to the shinkin bankindustry’s ability to manage risk.

Strategy

3• Ensuring the Soundness of Shinkin Banks
We will strive to ensure the soundness of shinkinbanks by taking into account the management issues
and the changes in financial administration, andstrengthening our arrangements for follow-up,
such as bolstering the management analysis and introducing measures when giving management advice.

Promote Shinkin Bank's digitalization

In addition to promoting the revitalization of regional economies through the utilization of cashless payments, wewill develop and provide new products and services in response to digitalization.
• Promotion of Cashless Payments Aimed at Regional
Revitalization
In September 2018, the SCB concluded investment inand business alliance with Origami Inc., with the aim ofrevitalizing the regions through the use of the smartphone payment service “Origami Pay”, by Origami Inc.

Going forward, we will work on initiatives to attract more customers by utilizing marketing functions
such as “Origami Pay” discount coupons, and by collaborating with local governments and transportation
operating agencies.

9Strategy

4

Promote to utilize network among Shinkin Banks,
SCB and external organization

As well as bolstering initiatives that make use of the shinkin bank industry network, we will utilize our role as the
hub and coordinator of the industry to the full, and move forward to build new platforms to resolve issues.
• Building a Problem-solving Scheme Using Partnerships Both Inside and Outside the Industry
In order to support the accounting operations of theSMEs that are the customers of shinkin banks, and also

Strategy5asset formation by individual customers, we will promote the building of schemes such as those for providing a range of services in partnership with industry
organizations and external agencies.

Pursue optimal balance among profit, risk and capital
distribute managerial resources appropriately

To enable the SCB to continue to play an enduring role as the central financial institution of the shinkin bank industry, we will strive to build a financial base for stability over the medium to long term through such measures as theconstruction of a risk appetite framework, and efficient risk-taking based on the level of capital.
• Ensuring Financial Stability and Permanence
As the central financial institution for the shinkin bankindustry, the SCB intends to ensure enhanced financial
stability and permanence by building and operating a risk
appetite framework, with the aim of facilitating the provision of support for shinkin bank operations and management.

Strategy

6• Optimal and Appropriate Allocation of Management Resources
By actively increasing operational efficiency and promoting scrap-and-build programs, we will strive
for the optimal and appropriate allocation ofmanagement resources for the SCB Group as awhole.

Promote efficient operation

As well as working to enhance the robustness of operations by promoting RPA and to reduce office works, we will
pursue improvements in operational efficiency through digitalization, centralization and outsourcing.
• Utilization of Digital Technology
Having actively implemented BPR(*1), we will promote RPA(*2), introducing
electronic approval and paperless workplaces in order to fundamentally
improve efficiency.
Another goal is to improve the efficiency, speed and accuracy of theoperations interface between shinkin banks and the SCB.
*1. BPR: Business Process Re-engineering. The comprehensive review and redesign of the content of existing
operations and operational flows.
*2. RPA: Robotic Process Automation. The use of software robots to replace and automate standardized tasks
performed by humans.

Strategy7• Outsourcing of Various Operations
We will investigate the outsourcing
to external agencies of defined contribution pension operations, market-related operations, trust-related
operations and human resources related operations.

Nurture appropriate central financial institution's
employee, create an attractive workplace

The SCB will also strive to strengthen skills required for central financial institution's human resources, work to
improve engagement, develop a corporate culture that nurtures human resources who generate innovation, andarrange attractive workplace.
• Transformation of Corporate Culture
The SCB will newly establish “project operations system” with the aimof transcending departmental barriers to bring together diverse humanresources to resolve problems and promote exchanges of personnel
that go beyond the financial industry.

10• Improvement of Work Environments
We will create highly productive work
environments and promote diversitythat would generate new ideas.

Initiatives for Realizing a Sustainable Society
The SCB will implement initiatives for realizing a sustainable society, so as to respond to societal demands such as the
SDGs.

About SDGs
The term stands for Sustainable Development Goals.
These are international goals for 2030 that were adopted at a UN summit
in September 2015.
They consist of 17 goals and 169 targets for the realization of a sustainable
planet.

Initiatives for the Development of Regional Society

Regional communities• Offering of CSR Private Placement Bonds

SMEs• “Shinkin no Tsubasa” Fund for Supporting
the Founding, Nurturing and Growth of
Small and Medium-sized Enterprises
In partnership with subsidiary Shinkin CapitalCo., Ltd., the SCB uses the “Shinkin no Tsubasa” fund for supporting the founding, nurturing
and growth of small and medium-sized enterprises to provide capital or capital-like funding,and to contribute to the development and revitalization of regional economies. As of March
31, 2019, investments in a total of 101 projects,
involving a total of ¥3,678 million had been decided.

• Offering of Benefits-type Private
Placement Bonds
The SCB provides “Shinkin ‘Benefit Support’Benefits-type Private Placement Bonds” withthe aim of supporting SMEs, which are the customers of shinkin banks and the issuers of private placement bonds, in their efforts to implement enhanced welfare plans and to obtaincompetent human resources. This setup, by apartnership with a benefits administrationcompany, enables the employees of the issuer
to obtain welfare services (e.g., accommodation, leisure, various kinds of lifestyle support)
at lower prices.

The SCB provides donation-type “Shinkin ‘Kagayaku Mirai’ CSR Private Placement Bonds”
to support the growth of the children who are
the future of the local communities, and tocontribute to appealing urban development.
Under this system, the customers of shinkinbanks who are the issuers of such bonds donate goods in proportion to the issue amountof the bonds to a school or a public interest
incorporated foundation of their choice.
As of March 31, 2019, 73 deals in the total
issue amount of ¥5,410 million were concluded, and the donations included grand pianos
and books, among others.

• Assistance Using the Wagamachi FundThe SCB provides a regional revitalization support scheme utilizing the Nippon Foundation’s
Wagamachi fund to support initiatives aimed
at creating new flows of money in shinkinbanks’ local communities to solve community
issues and develop next-generation leaders.
This program offers monetary gift from the
Wagamachi fund (up to ¥10 million per project) to shinkin banks and local companies
whose business activities contribute to the revitalization of their regions. The total grantamount is approximately ¥1 billion, and the
grant period is three years from fiscal 2017. Asof March 31, 2019, a total of 31 projects at 30
shinkin banks had been awarded ¥310 million.

• Support for Setting up Management-type
Urban Development Funds

the Ministry of Land, Infrastructure, Transport
and Tourism and the Organization for Promoting Urban Development, the SCB supports theestablishment of managed urban development
funds through collaboration between shinkinbanks and the Organization for Promoting Urban Development.
In fiscal 2018, four funds were establishednationwide, providing funding support for projects designed to solve community issues.

• Agreements for the Promotion of
Tourism and Industry
Working with shinkin banks in each prefecture, the SCB has concluded agreements related to partnerships with eight prefectures,for the promotion of regional industry.
Based on these agreements, we provide
support for expanding sales channels to companies in the prefecture, and for attracting
tourists to the prefecture.

• Support for Drawing up Model Travel
Itineraries
In order to support initiatives by shinkin banks
to revitalize their regions by attracting tourists, we have helped shinkin banks and local
public entities to draw up model travel itineraries, and have shared a total of 35 such itineraries with shinkin banks nationwide.
These model itineraries are expected tohelp revitalize the regional cities by increasing
the non-resident population by travelers, andhave been used by travel organizations such as
the “Nenkin Tomo no Kai”, which is sponsored by shinkin banks with 100,000 participants every year.

Based on the partner agreement signed with11

Individual customers• Seminars for Wills and Inheritances /Provision of Advice
Having concluded a business cooperationagreement with the Yuigon Sozoku Legal Network, whose parent entity is the testamentary
trust project team set up within the Japan Federation of Bar Associations, the SCB will support the hosting at shinkin banks of seminars
on wills and inheritances.
In addition, on “Yuigon no Hi (Testamentary Day)”, November 15 every year, we partner with the Japan Federation of Bar Associations to provide free legal advice regarding
wills and inheritances at shinkin banks nationwide. In fiscal 2018, 195 shinkin banks took
part in this event.

• “Oen Notes”
As part of our educational program for finance, we distributed “Oen Notes” to elementary schools in the areas where the mainbranches of shinkin banks are located. “OenNotes” are notebooks of the kind used by elementary school students on a daily basis butwith the addition of explanatory notes related
to the work performed by shinkin banks andthe way money works.

Environmental Initiatives• Endorsement of “Task Force on Climaterelated Financial Disclosures”
Recommendations
As part of measures being taken to strengthen
initiatives related to climate change and global
warming, with the aim of realizing a sustainable
society, not only has the SCB endorsed therecommendations of the “Task Force on Climate-related Financial Disclosures (TCFD)(*1)”,
which was established by the Financial Stability
Board, but it has also joined the TCFD Consortium(*2) that was established in May 2019.
Going forward, based on the TCFD recommendations, we will analyze the risks andopportunities for the shinkin bank businesscaused by climate change, and work to achieve
fuller information disclosure.
*1. The Task Force on Climate-related Financial
Disclosures (TCFD) was established in December
2015 by the Financial Stability Board at therequest of G20 finance ministers and central
bankers. In June 2017, it published a final reportoutlining a framework for the disclosure of
information with regard to climate-related risks
and opportunities, for voluntary use bycorporations.
*2. The TCFD Consortium is a venue for companies

12

and financial institutions that have endorsed the
TCFD recommendations to come together todiscuss initiatives related to climate change. The
venue is attended by observers from the Ministryof Economy, Trade and Industry, the Financial
Services Agency, and the Ministry of theEnvironment.

• Participation in the Japan Climate
Initiative
The SCB is actively involved in initiatives tocounter environmental problems, such as byusing resources efficiently, reducing waste, andproviding financial services that contribute to
the conservation of the environment. However,as one of these initiatives the SCB participatesin the Japan Climate Initiative (JCI)(*), which wasestablished with the aim of strengthening
countermeasures to deal with climate change
and achieving a decarbonized society.
Going forward, by gathering information at
JCI, we will promote measures to help achievea zero-carbon society, while further strengthening
initiatives to deal with environmental problems.
* The Japan Climate Initiative was established in July
2018 and consists of a network of companies andorganizations working on measures to deal withclimate change.

• Supporting “Metrolink Nihonbashi”
As part of our initiatives to tackle environmental
issues, the SCB is supporting the operation of“Metrolink Nihonbashi”, a free electric bus
service with low-pollution, low-noise, and lowfloor accessible buses that are friendly to bothpeople and the environment.These buses run acircular route, connecting Nihonbashi, Yaesu(the location of the SCB’s head office), andKyobashi (the location of the SCB Kyobashi
Annex).
Provision of Financial Products• ESG Investments
As part of our efforts to provide funding toprojects seeking to solve environmental
problems, the SCB invests in ESG bonds issuedby municipal governments and businesscorporations. By investing in funds that utilize

information related to environment, social andgovernance as well as financial information in
their investment process, we work to realize asustainable society and to resolve societal
issues.
• Offering ESG and Other Funds
SCB subsidiary Shinkin Asset Management Co.,
Ltd. offers the “Shinkin ESG Special Fund” and“Shinkin SRI Fund”, which focus theirinvestments on corporate social responsibility,
corporate governance and other ESG issues.
“Shinkin ESG Special Fund” is marketed to
institutional investors, while “Shinkin SRI Fund”
is marketed to individual customers throughshinkin banks.
Initiatives for Reconstruction After
Natural Disasters• “Shinkin no Kizuna” Reconstruction
Support Project
The “Shinkin no Kizuna Reconstruction
Support Project”, which the SCB established incollaboration with the Japan NPO Center,
provided assistance to 95 private NPOs (for a
total of 111 projects) up to fiscal 2017 and has
been used to support activities such asproviding mental health care to disaster victims
and helping them rebuild their daily lives.
In April 2018, we organized a networking
event to encourage cooperation amongrecipients of this reconstruction support, andwe awarded follow-up grants to 21 recipientsin April 2019.
• Recovery Support Sales Event
A recovery support sales event was held at the
SCB head office with specialty products fromTohoku area, Kumamoto prefecture and otherregions, which were supplied by customers ofshinkin banks who had been affected by natural
disasters.The event featured 48 products madeby 34 customers from 20 shinkin banks.

Overseas Networks
The SCB has offices in New York, London, Hong Kong, Shanghai, and Bangkok. These offices collect and disseminate information relating to economic and financial conditions, the investment and loan environment, and the laws, taxation regimes,
and employment situation of each region.
These offices also work with allied banks to support the overseas expansion of shinkin banks’ customers.
Moreover, as part of our support for the overseas business of SMEs, we dispatch employees to allied banks. The overseas
offices also provide shinkin bank employees with opportunities to improve their skills related to supporting the overseas businesses of their customers and contribute to human resources development in the shinkin bank industry.
Alliances with Local Banks Overseas
The SCB formed business alliances with nine
local banks overseas to increase its capability
to support shinkin bank customers who are
expanding their businesses overseas. We provide a wide range of support to shinkin bankcustomers who conduct business overseas byhelping them open local bank accounts, andproviding local currency denominated financing using standby L/C, for example.
Additionally, we seconded two employees
to Bangkok Bank and one employee each toMaybank Indonesia, Joint Stock Commercial
Bank for Investment and Development of Vietnam, and BDO Unibank, Inc.

Shinkin International Ltd.
LondonBeijingTokyo

SCB Shanghai Representative Oﬃce

Shanghai

The Bank of East Asia

Hong Kong

Mexico City

Bank of Communications

ManilaBangkokBank of Shanghai

Ho Chi Minh CityBDO Unibank, Inc.

SCB Bangkok
Representative Oﬃce
Bangkok BankNew York

Shinkin Central BankSCB Hong Kong Representative Oﬃce

Collaboration with External Institutions
In February 2019, we signed a business cooperation agreement with Organization for Small& Medium Enterprises and Regional Innovation, JAPAN. In addition, we co-host businessevents between shinkin bank customers andlocal overseas companies, promote businessmatching using the matching website operated
by that organization.
We also collaborate with foreign and domestic buyers and external experts providing
advice to shinkin bank customers aimed at cultivating overseas sales channels, and hold business matching events with buyer companies
that have overseas sales channels.
Furthermore, we signed a business cooperation agreement with Japan Bank for International Cooperation (JBIC) to support theoverseas business expansion of shinkin bankcustomers and offer dollar-denominated twostep loans to shinkin banks. This allows shinkinbanks to respond promptly and properly to
the US dollar funding needs of their customers.

SCB New York Representative Oﬃce

Bank of China

Banco Mercantil del Norte, S.A.

Joint Stock Commercial Bank for
Investment and Development of Vietnam

Jakarta

Maybank Indonesia… SCB Oﬃce…

Business Alliances(SCB employees seconded)… Business Alliances

Experts can provide consultations covering such topics as local investment environments, systems, and foreign and domestic market trends, as well as problems related tooverseas expansion and ways to solve issues
particular to overseas locations.

from our overseas representative offices andour employees seconded to allied banks.

Overseas Business Consultations
We engage in overseas business consultations
with the customers of shinkin banks considering new businesses and transactions overseas.

Expansion into Asia by Shinkin Bank Customers
South Korea: 103
China: 1,128

Hong Kong: 123
Myanmer: 32
India: 43

Thailand: 478

Taiwan: 99

Laos: 10Vietnam: 336

Philippines: 119

Providing Information
In addition to publishing “International Business Support News” and other reports forshinkin banks and their customers, we provide
up-to-date information related to doing business overseas through various seminars pertaining to overseas business support. Moreover, we provide up-to-date local information

Combodia: 33
Malaysia: 75
Singapore: 40
Indonesia: 193
Source: Twelveth Survey on the Overseas Business of Shinkin Bank Customers (2017)13

Business Overview
Earnings Performance
Looking at the financial results for fiscal 2018(ended March 31, 2019) overall, operating income amounted to ¥258 billion ($2,331 million), down ¥14 billion ($134 million), or 5.4%,
year on year because, although dividends frominvestment trust funds increased due to theeffects of diversified investment, interest anddividends on securities decreased as a resultof constraints on recognizing unrealized gains
from investment trust funds. Meanwhile, operating expenses came to ¥200 billion ($1,803
million), down ¥12 billion ($115 million), or
6.0%, year on year due to a decrease in loss onredemption of bonds, mainly in losses fromcanceling investment trust funds as part of theportfolio rebalancing in the previous fiscal
year. As a result, ordinary income came to¥58 billion ($527 million), a decrease of ¥2 billion ($19 million), or 3.4%, year on year.
Net income totaled ¥42 billion ($381 million), down ¥4 billion ($37 million), or 9.0%,
year on year due to a drop in items such as thegain on transfer of business from Shinkin Trust
Bank, Ltd., which was recorded as extraordinary income in the previous fiscal year.

Funding
In fiscal 2018, the total amount of funding increased ¥868 billion ($7,826 million) year on
year, for a total of ¥37,386 billion ($336,938
million). Of this figure, deposits received cameto ¥30,966 billion ($279,080 million), an increase of ¥706 billion ($6,366 million), whichmainly comprised fixed-term deposits fromshinkin banks.
After deducting redemptions, debentures atthe end of fiscal 2018 came to ¥2,486 billion($22,410 million), down ¥228 billion ($2,056 million) during the fiscal year, including ¥399 billion($3,604 million) in debentures issued by the SCB.
Borrowed money amounted to ¥3,933 billion ($35,446 million), a year-on-year increaseof ¥390 billion ($3,515 million), mainly comprising borrowings under a funding provision to
support increased lending by the Bank of Japan.

Asset Management
The amount of assets under management in fiscal
2018 increased ¥914 billion ($8,240 million), or
2.4%, to ¥38,381 billion ($345,901 million).

Mainly due to lower government bond holdings, outstanding invested securities decreased¥524 billion ($4,724 million), or 3.0%, to ¥16,613
billion ($149,725 million) at fiscal year end.
Loans and bills discounted increased ¥92 billion ($837 million), or 1.3%, during the year under review to ¥7,045 billion ($63,496 million) as
loans to business corporations increased whileloans to national and government agencies andorganizations decreased.
The outstanding amount of short-termmoney market assets rose ¥1,306 billion ($11,774
million), or 10.0% to ¥14,365 billion ($129,469
million). This primarily reflects Bank of Japan current deposit increases.
Securities
As of March 31, 2019, the outstanding amount of
securities was ¥16,613 billion ($149,725 million).
Government bonds, corporate bonds, andother domestic securities accounted for ¥10,627
billion ($95,773 million), and foreign securities
such as government-secured financial institution
bonds and government-agency bonds in major
developed countries, and foreign investment
trusts for ¥4,978 billion ($44,867 million), andstocks and investment trust funds for ¥810 billion ($7,305 million).
In terms of foreign securities, the SCB
mainly invests in safe assets, which include
government-secured financial institution
bonds and government-agency bonds in major
developed countries.
To advance its diversified investment
portfolio, the SCB also invests in such risk
assets as stocks and investment trust funds
not subject to interest risk, while optimizing
its portfolio in response to shifts in the financing and investment environment.
The SCB also carries out interest rate
swaps and other derivative trading, to hedge
risks linked to assets under management.
Loans and Bills Discounted
As of March 31, 2019, the outstanding amountof loans and bills discounted was ¥7,045 billion($63,496 million). Of the total amount, loans
to shinkin bank customers through thosebanks accounted for ¥347 billion ($3,135 million), while direct loans to such parties as national and government agencies and organiza-

Ordinary Income and Net Income (Non-consolidated)

14

tions, regional public corporations, andcharitable organizations accounted for ¥2,869
billion ($25,860 million). Direct loans to business corporations accounted for ¥3,131 billion($28,221 million).

Breakdown of Funding*
10.5%(¥3,933 billion)
6.7%(¥2,486 billion)

82.8%(¥30,966 billion)

Deposits
Debentures
Borrowed money

Breakdown of Asset Management*
0.5% (¥205 billion)

0.4% (¥150 billion)
37.4%(¥14,365 billion)

18.4%(¥7,045 billion)

43.3%(¥16,613 billion)

Breakdown of Securities*
1.2%(¥197 billion)

30.0%(¥4,978 billion)

28.8%(¥4,790 billion)

4.9%(¥810 billion)
28.6%(¥4,749 billion)

6.5%(¥1,087 billion)

FY2014FY2015FY2016FY2017FY2018

Ordinary income (loss)

81,19855,971

48,34260,67858,562

Net income (loss)

60,81740,87541,38346,49842,286

Government bonds
Municipal bonds
Corporate bonds& short-term
corporate bonds
Stocks & investment
trust funds
Foreign securities
OthersBreakdown of Loans and Bills
Discounted*
9.9%(¥696 billion)

National andgovernment
agencies andorganizations

4.9%(¥347 billion)
35.2%(¥2,479 billion)
44.5%(¥3,131 billion)

Regional public
corporations
and charitableorganizations
and others
Business
corporations

5.5%(¥389 billion)* As of March 31, 2019.

(Millions of yen)

Short-term market
operation
Securities
Loans and bills
discounted
Trading assets
Money held in trust

Agency loans
OthersCapital Adequacy
OutlineConsolidated Capital Adequacy Ratio

The SCB’s equity capital, as defined underregulations concerning capital adequacy ratio,
mainly comprises common shares from member
shinkin banks, public issues of preferred sharesthat supplement common shares, and internal
reserves accumulated to date by the SCB.
The SCB raises funds through the issuance of general common shares and specificcommon shares. The dividend payout ratio for
specific common shares differs from that for
general common shares.
Furthermore, in accordance with the
SCB’s articles of incorporation, the amountof residual assets distributed per specificcommon share is limited to a maximum of¥100,000 per share. This makes it possible toraise funds by issuing common shares without
diluting the residual assets distributed to preferred shareholders.
According to transitional measures basedon new Japanese domestic standards for regulations concerning capital adequacy ratio, equity capital also includes fixed-period andperpet­ual subordinated loans.

The SCB’s consolidated capital adequacy ratio
at March 31, 2019, was 23.65%.
Equity capital, the numerator for calculating the capital adequacy ratio, amounted to¥1,425 billion ($12,846 million).
Risk assets, the denominator for calculating the capital adequency ratio, amounted to¥6,026 billion ($54,310 million).

Risk Management and Capital
Adequacy Assessment
The SCB has implemented policies to manage
its capital adequacy as part of its integrated
risk management. The capital assessment division evaluates capital adequacy using a holistic
approach, measuring various types of risks
under uniform criteria and comparing quantified risks with the SCB’s capital.
In order to assess the potential impacts ofshock on its capital, the SCB conducts stresstesting to estimate losses under various scenarios and the probability of their occurrence.
Risk limits and risk exposure are reported
to senior management at the Risk Management Committee and at other meetings. The
Risk Management Committee deliberates
measures in response to the results of capital
adequacy assessments, and implements mea­sures as deemed necessary.

Capital Adequacy Ratio (Domestic Standard)

Consolidated
Non-consolidated

Capital adequacy ratio
Amount of capital
Amount of risk-weighted assets
Capital adequacy ratio(%, billions of yen)
FY2014
36.40
1,656
4,551
36.46

FY2015
41.10
1,824
4,439
42.38

FY2016
37.03
1,764
4,765
38.28

FY2017
30.57
1,645
5,381
31.62

FY2018
23.65
1,425
6,026
24.48

15

Asset Quality
Risk-Monitored Loans
The amount of risk-monitored loans as ofthe end of March 2019 was ¥82 million ($0.7
million) for loans to bankrupt borrowers,¥4,351 million ($39 million) for delinquentloans, ¥36 million ($0.3 million) for loans
past due three months or more, and ¥19,871

million ($179 million) for restructured loans.
Total risk-monitored loans decreased¥17,548 million ($158 million) to ¥24,341 million ($219 million) during the fiscal year. The
ratio of total risk-monitored loans to totalloans remained as low at 0.34%, and theRisk-monitored Loans (Non-consolidated)

(%, millions of yen)
End of March2018
93
11,22777
30,49041,889Loans to bankrupt borrowers
Delinquent loans
Loans past due three months or more
Restructured loans
Total risk-monitored loans (A)End of March
2019
82
4,351
36
19,871
24,341

Increase or
Decrease(11)(6,876)(41)(10,619)(17,548)

199

355

156

6,952,659
0.60

7,045,582
0.34

92,923(0.26)End of March2018
93
11,22777
30,49041,889End of March
2019
82
4,351
36
19,871
24,341

Increase or
Decrease(11)(6,876)(41)(10,619)(17,548)

199

355

156

6,952,660
0.60

7,038,785
0.34

86,125(0.26)

Partial direct write-offs
Total loans (B)Ratio of total risk-monitored loans to total loans (%) (A/B)

Risk-monitored Loans (Consolidated)
Loans to bankrupt borrowers
Delinquent loans
Loans past due three months or more
Restructured loans
Total risk-monitored loans (A)soundness of the SCB’s loan assets remainedhigh.

(%, millions of yen)

Partial direct write-offs
Total loans (B)Ratio of total risk-monitored loans to total loans (%) (A/B)

Asset Assessment under
the Financial Reconstruction Law
As of the end of March 2019, bankrupt andquasi-bankrupt assets amounted to ¥287
million ($2 million), doubtful assets ¥4,147
million ($37 million), and substandard assets¥19,907 million ($179 million).
Accordingly, the total amount of bad debts
under the Financial Reconstruction Law decreased ¥17,548 million ($158 million) to¥24,341 million ($219 million). The coverage

ratio of bad debts (the total of claims deemed
collectible with collateral and guarantees andthe allowance for possible loan losses divided
by total bad debts) was 69.12%.
Bankrupt and quasi-bankrupt assets arerecorded for the remaining amount after
deducting the amounts deemed collectible withcollateral and guarantees, while doubtful assets
are recorded for the loss-expected amount of

the remaining amount after similarly deducting
the amounts deemed collectible with collateraland guarantees, respectively, in the specificallowance for possible loan losses.
For substandard assets, the anticipatedloss ratio is calculated based on the loan loss
ratio and recorded in the general allowance for
doubtful accounts.

Asset Assessment under the Financial Reconstruction Law (Non-consolidated)(%, millions of yen)
Bankrupt and quasi-bankrupt assets
Doubtful assets
Substandard assets
Total claims under the Financial Reconstruction Low (FRL) (A)Normal claims
Partial direct write-offs
Total loans (B)Ratio of total claims under the FRL to total loans (%) (A/B)
Total coverage amounts on disclosed claims under the FRL (C)Coverage ratio (%) (C/A)

16

End of March2018
326
10,99430,56841,8897,004,527

End of March
2019
287
4,147
19,907
24,341
7,100,198

Increase or
Decrease(39)(6,847)(10,661)(17,548)
95,671

199

355

156

7,046,416
0.59

7,124,539
0.34

78,123(0.25)

30,28972.30

16,826
69.12(13,463)(3.18)

Important Management Indices
As the central financial institution for shinkin banks, the SCB strives
to attain and maintain sound management.

Consolidated capital
Adequacy Ratio (%)

Nonperforming Loan Ratio (%)(As of September 30, 2018)(As of September 30, 2018)25.44%

1.71%
16.67%
11.46%SCBCity banks1 Regional banks2

0.50%
SCB

Long-term Credit Rating

0.62%(As of July 31, 2019)

City banks Regional banks

23.65%

0.34%

Notes:Note:
NPL ratio = total risk-monitored loans/total loans.
Source: Japanese Bankers Association(As of March 31, 2019)(As of March 31, 2019)

1. Average of 5 city banks
2. Average of 64 regional banks
Source: Bank disclosure documents

A1

A

A+

AA

Moody’s

S&P

R&I

JCR

Note:

Symbols indicating credit rating are assigned byeach rating agency.

The SCB promotes streamlining of management through ongoingsweeping restructuring.

Funds per Employee(As of September 30, 2018)

Ratio of Expenses (%)(As of September 30, 2018)(Millions of US dollars)

247
0.82%
0.63%

39
SCB

17

City banks Regional banks

0.08%
SCB

City banks Regional banks$251 million

0.08%

Notes:Note:(As of March 31, 2019)

1. Total funds = deposits + CDs + debentures
2. US dollar amounts are converted for convenience only, at ¥113.54 and ¥110.96 per
US$1.00, the prevailing rate on September
30, 2018 and March 31, 2019, respectively.
Source: Japanese Bankers Association(As of March 31, 2019)

Ratio of expenses = total expenses/(deposits + CDs + debentures) average
outstanding balance
Source: Japanese Bankers Association

17

Corporate Governance
The SCB strives to maintain fairness andtransparency in its management by fortifying
our corporate governance system as we
implement various operational strategies. The
SCB’s goal is to gain the trust of all our stakeholders by demonstrating the strong commitment to establishing a rigorous corporate
governance system and to becoming an evermore distinguished financial institution wellrespected in society.

Institutional Structure

General Assembly of Representatives
The SCB is a cooperative financial institution
comprising 259 shinkin banks nationwide (asof March 31, 2019) that are its members andinvestors. The General Assembly of Representatives, equivalent to the general meetingof shareholders in a joint-stock company, isheld annually to elect directors and resolve
important issues.
Board of Directors
The SCB’s Board of Directors, comparable to
the Board of Directors in a joint-stock company, holds regular meetings nine times per
year, and makes decisions regarding importantbusiness matters.
There are no board members corresponding to the outside directors as defined by theCompanies Act, however, the Board of Directors includes 18 part-time directors selectedfrom among the presidents or board chairs ofshinkin banks from each region in Japan. This
is in accordance with Article 32, paragraph 4of the Shinkin Bank Act, the SCB’s Articles ofIncorporation stipulate that more than half
the total number of board members must be
executive officers of shinkin banks. The SCB is
confident that the appropriate check on management provided by the parttime directors
ensures that supervision and safeguard functions are in place and have a high degree ofobjectivity and transparency in business operations.
Corporate Auditors
The SCB’s corporate auditors, comparable
to the corporate auditors of a joint-stockcompany, audit the execution of duties by the
directors. The Board of Auditors, which consists of all the corporate auditors, regularly
holds discussions on matters concerning audit
policies and plans.
The SCB appoints one full-time corporate
auditor and two part-time corporate auditorsfrom among the presidents of shinkin banks,
and two part-time corporate auditors who
are not executives of the SCB or shinkinbanks (non-member corporate auditors),
equivalent to outside corporate auditors as defined by the Companies Act. Non-member
corporate auditors are appointed from among
persons who meet the requirements stipulated in Article 32, paragraph 5 of the Shinkin
Bank Act. There are no stipulations of standards or guidelines regarding independence forthe appointment of non-member corporate

18

auditors. The SCB is confident that non-member corporate auditors are able to utilize theirprofessional knowledge and experience toconduct audits from an independent perspective.
One of the non-member corporate auditors is a certified accountant with a wealth ofknowledge and experience regarding financeand accounting.
There are no particularly notable conflicts of interest between the SCB and nonmember corporate auditors.
Part-time Directors and Corporate Auditors
The General Affairs Division provides information and other support for part-time directors,
and the staff members exclusively assisting corporate auditors under their direction provide
the same for part-time corporate auditors, inorder to facilitate the timely and appropriate
execution of duties by part-time directors andcorporate auditors.
General Meeting for Preferred Shares
A general meeting for preferred shareholders
may be held to protect their property rights
under the Law Concerning Preferred Sharesof Cooperative Financial Institutions.

Checks on Business Operations

Execution of Business Operations
At the SCB, the Board of Directors makes
decisions on important business operations.
Based on those decisions, the president
presides over the SCB’s business operations
and the Deputy president and other full-time
directors assist the president.
In addition, the SCB has established the
Executive Committee to deliberate and makedecisions on important managerial matters,
including ones to be resolved by or reported
to the Board of Directors.
The SCB has also established various
committees of the Executive Committee tofacilitate robust discussions on all aspectsof its business operations. To ensure that
deliberations and decisions are carried out ona cross-organizational basis, each committee
comprises several directors and general managers of divisions.
Supervision and Checks
At the SCB, the Board of Directors supervises
the execution of business by the directors.
More than half of the Board of Directors are
executive officers of shinkin banks, thereby
ensuring that the Board of Directors fulfills its
checking functions.
AuditsTo facilitate audits of the directors’ executionof duties, the corporate auditors at the
SCB attend Board of Directors’ and otherimportant meetings. The corporate auditors
also receive reports from directors regarding
their execution of duties, and inspect theminutes of the Executive Committee andother important documents. In addition, thecorporate auditors hold regular meetings withindependent corporate auditors to exchange
opinions and information.
Dedicated staff members are assigned toassist the corporate auditors to ensure that
directions are given efficiently, and to help
them perform their duties in a timely andappropriate manner.
Internal Audit System
The Internal Audit Division builds an audit system that aims to realize efficient and effective
business operations by examining and assessing compliance management systems, risk
management systems and operations management systems of each division, branch, and affiliated company of the SCB, to make sure thatthey are functioning appropriately and effectively.
At the internal audit, the Internal Audit Division examines and assesses the legal andregulatory compliance status, risk management status, and operations management status, of each division, branch, and affiliatedcompany of the SCB, to make sure that they
are functioning appropriately and effectively.
When deemed necessary, the Internal Audit
Division issues guidance so that corrective
measures may be undertaken.
In addition, each division and branch is
required to carry out its own internal inspections for the prevention and early detectionof administrative errors.
Use of Outside Specialists
The SCB has appointed Ernst & Young ShinNihon LLC as its corporate auditor.
The SCB utilizes the expertise of outside
specialists, including independent auditors,
attorneys, and tax accountants. To effectively
handle more sophisticated and diversified
operational requirements, the SCB consults
with, and receives advice from, such specialists on a regular basis and as the need arises.
Appropriate Information Disclosure
The SCB’s preferred shares are listed on theTokyo Stock Exchange. The SCB strives tomaintain appropriate disclosure of corporate
information, pursuant to the Financial Instruments and Exchange Law, other related laws,
and the Securities Listing Regulations of theTokyo Stock Exchange. The SCB also strives
to maintain transparency in its management
through appropriate disclosure.

Improving Internal Control Systems

The SCB regards compliance as the basic
premise of all business activities. The SCB
continues to strengthen and operate internal
control systems, based on a policy of maintaining reliable financial reporting, managing
risks flexibly and effectively in response to
those characteristics, and implementing
internal audits by utilizing the Internal Audit
Division, which is independent from theoperational divisions and branches.

Compliance System
The SCB views compliance as one of thehighest-priority management agendas. In linewith this stance, the SCB is carrying out themeasures outlined below as it strives to further strengthen its compliance system.

Strengthen Compliance System

1. The SCB has formulated the Shinkin Central Bank Code of Ethics, which stipulates
the ethical rules and behavior standards
that must be upheld by all SCB directors
and employees.
2. In order to improve customer protection
and satisfaction, the SCB formulates Customer Protection Control Policy.
3. The SCB formulates an annual Compliance
Program, which lays out its specific compliance plan for each fiscal year.
4. To clarify the rules to be followed by directors and employees, the SCB has compiled a Compliance Manual as a practicalcompliance handbook.
5. A compliance supervisory division andcompliance-related divisions have been set
up, and their respective roles clarified. A
compliance supervisor and deputy, both
responsible for compliance, are appointed
to each division and branch of the SCB.
6. In order to deliberate compliance issues,customer protection issues, and serious

accidents, the SCB has established the Risk
Management Committee.
7. In addition to conducting regular lectures
and training seminars for directors andemployees, each division and branch also
carries out its own training programs as
part of the SCB’s efforts to strengthen
compliance education.
8. The audit items used by the Internal Audit
Division include compliance-related items,
and internal audits include investigation ofwhether the compliance system is functioning adequately.
9. In cases of compliance violation, re ports from the heads of the divisions or
branches concerned are promptly called
for, and appropriate actions are taken toprevent a recurrence.
10. The SCB operates a hotline to facilitate
repor ting of compliance breaches bydirectors and employees. The SCB also
has in place strict measures to protect
whistle-blowers.
11. Pursuant to the Law on Sales of Financial
Products, the SCB has formulated andmade public its Financial Products Solicitation Policy. To ensure that solicitation iscarried out fairly, important points regarding a product must be explained to thecustomer at the time of sale.

12. Pursuant to the Law on Protection of Personal Information, the SCB has published
its Personal Information Protection Policy
on its internet website. The SCB takes
necessary and appropriate safety measures
to protect personal information.
13. In addition to publishing its Outline forManaging Conflicts of Interest on its internet website, pursuant to the Shinkin BankAct and the Financial Instruments and Exchange Law, the SCB is taking appropriate
management steps to ensure that customers’ interests are not wrongfully violated.
14. Based on the financial Alternative Dispute
Resolution (ADR) system, to respond
expeditiously, fairly, and appropriately tocustomers’ inquiries, complaints, disputes,
and other issues, the SCB has overhauled
its internal management system and is
striving to enhance its reliability.
The SCB intends to review and update thecontent of its Compliance Manual and otherpolicies on an ongoing basis. All SCB directors
and employees are working to maintain strict
compliance through coordination among related divisions, and by strengthening internal
education programs.

Compliance System Overview
Customers
Division or branch

Corporate
lawyerCorporate
Auditors

Personnel responsible for compliance (appointed by the head of compliance administration)
Personnel deputy responsible for compliance (appointed by the compliance supervisor)
Compliance supervisor (head of division or branch)Compliance supervisory division（General Affairs Division）

Deputy head ofcomplianceadministration

Head of complianceadministration(General Manager ofLegal & Compliance Office)(General Manager ofGeneral Affairs Division)

Supervisor of compliance

Compliance-related divisions
Personnel Division
Strategic Planning Division
Business Promotion DivisionInternal Audit Division

Compliance hotline

Employees

Operations Division
Systems Division(Director in charge ofGeneral Affairs Division)

Risk Management Committee

Directors (full time)

Executive Committee
Board of Directors

19Countermeasures against Money Laundering and the Financing of Terrorism

Based on societal demands related to theneed for countermeasures against money
laundering and financing of terrorism (the“money laundering and financing of terrorism
countermeasures”), the SCB has designatedthe prevention of money laundering and of
terrorist financing as one of the most important managerial issues, and is working to sophisticate its countermeasures by means of arisk-based approach.
The director in charge of General Affairs

Division is appointed supervisor of money
laundering and financing of terrorism countermeasures, and under the active involvement of
the management team will put in place risk
management arrangements in which the General Affairs Division is the second line of defense (administrative divisions), while also organizing a regulatory system. The General
Affairs Division is also providing with support,
checks and controls in relation to the first lineof defense (business divisions), and training for
employees.
Supervisors of and personnel responsible

for money laundering and financing of terrorism countermeasures are assigned to the firstline of defense (business divisions), and checks
are carried out at the time of the transactionin accordance with the Act on Prevention ofTransfer of Criminal Proceeds and so on, with
notifications being made for suspicious transactions.
The Audit Division, which is the third lineof defense (internal audit division), performs
verification of the effectiveness of money
laundering and financing of terrorism countermeasures.

Risk Management System against Money Laundering and the Financing of Terrorism
Board of Directors
ReportExecutive Committee
Resolve/Report

Risk Management Committee
Deliberate/ReportSupervisor of money laundering and financing of terrorism countermeasures(Director in charge of General Affairs Division)
Report/Consult

General Affairs DivisionFirst line: Business Divisions

Second line: Administrative and Related Divisions【Divisions responsible for money launderingand financing of terrorism countermeasures】【Divisions responsible for managing money launderingand financing of terrorism countermeasures】

Branch offices/Head office divisions(Operations Division, International Operations Center,
Operations Center, Business Promotion Division, TrustBusiness Division, Treasury Operations Division, Transfer &Clearing Division, General Affairs Division (General Affairs
Group), others)

General Affairs Division (Legal & Compliance Office)AssistCheck

Supervisor of money laundering and financing of terrorism
countermeasures (head of division or branch)
Personnel responsible for money laundering and financing ofterrorism countermeasures (personnel responsible forcompliance)

Management supervisor of money laundering and financing of terrorism
countermeasures (General Manager of General Affairs Division)
Management deputy supervisor of money laundering and financing ofterrorism countermeasures (General Manager of Legal & Compliance
Office)【Divisions involved in money laundering andfinancing of terrorism countermeasures】

Strategic Planning Division, Personnel Division, Systems Division

Verification of effectiveness

Third line: Internal Audit DivisionInternal Audit Division20

Risk Management
Learning from the experience of the financial crisis, the SCB is exhaustively implementing more highly detailed and thoroughprocesses to manage risk by pursuing more sophisticated integrated, market and credit risk management and other measureswhile also advancing predictor and interim management for credit control.
Basic Policy on Risk Management

In the wake of the global financial crisis, financial
institutions face significant changes in economic
and financial market conditions and otheraspects of their operating environment. To
respond promptly and appropriately to thesechanges, financial institutions require very finely
tuned risk management.
The SCB has positioned risk management
as a key management priority for ensuringsound management and securing adequate
profits. All directors and employees conduct
their daily duties with a full awareness of theimportance of risk management.
The SCB classifies risk in two broad categories—risk that must be controlled andrisk that must be absolutely minimized—
and manages the risks accordingly. The typesof risk that must be controlled are market,
liquidity, and credit risks. The type of risk thatmust be minimized is operational risk. The
Risk Management Division coordinates the
management of different risks to provide
comprehensive risk management.
The SCB has also established cross­organizational bodies—the Risk Management
Committee ALM Committee, and Credit Committee, —to manage risk from a Bank-wide
perspective. These committees deliberate andmake decisions on specific issues relating to theirrespective risk management functions based on
the policies determined by the Board of Directors and the Executive Committee.
To ensure the effectiveness of its risk management systems, the SCB has also establishedthe Internal Audit Division—a body indepen­
dent from its risk management systems—tomonitor the SCB’s risk management activities.

Integrated Risk Management

To manage risk in a comprehensive manner,
the SCB employs the integrated risk management method to cope with quantifiable risk.
Integrated risk management is a way tomanage its diverse risks by calculating themwith uniform criteria, such as the Value-atRisk (VaR) method, and comparing theiraggregated value to the institution’s overall
financial strength (i.e., capital adequacy).
For market risk and credit risk, the SCB
calculates the VaR. For the calculation of operational risk capital requirements, the SCB
employs the basic indicator approach, proposed under regulations concerning capital
adequacy ratios.
The SCB defines capital under its integrated risk management system and allocates quantitative risk limits, operation-

al risk and other types of risk.* Separately,
the SCB estimates losses under various
stress scenarios as part of its efforts tomonitor potential impacts on capital.
The quantit ative risk limits and re ser ve amounts for each f iscal year are
determined by the Executive Committee
following deliberation by the Risk Management Committee. The Risk Management
Division, which oversees integrated risk
management, measures the amount of risk
exposure both during and at the end of eachmonth, to ensure that quantitative limits
for each type of risk are not exceeded. The
Risk Management Division provides reports
on risk status to senior management andrelated divisions through the Risk Management Committee.
* With regard to subsidiaries within the SCB’s scope of
consolidation, the SCB monitors risk exposure at eachsubsidiary and allocates capital commensurate with theamount of risk. These allocations enable subsidiaries totake risks.

Risk Categories
Category
Market risk

Must becontrolled

Must be absolutely
minimized

Description
Market risk is the risk of loss resulting from fluctuations in asset or liability values (including offbalance-sheet items), due to changes in such market risk factors as interest rates, stock prices,and exchange rates. This includes the risk of loss due to changes in earnings generated by assets
and liabilities.

Liquidity risk

Liquidity risk is the risk that a financial institution will be unable to generate sufficient cash inflow
to meet required cash outflows; and the risk of loss resulting from the unavoidable need to procure
funds at much higher interest rates than normal (cash flow risk); and the risk that market transactions will become either impossible, or that transactions must be carried out at very unfavorable
prices due to market disruptions (market liquidity risk).

Credit risk

Credit risk is the risk of loss due to the partial or complete loss of asset value (including offbalance-sheet assets), owing to such factors as that a borrower or counterparty will fail to perform
on an obligation.

Operational risk

Operational risk is the risk of unexpected loss resulting from inadequacies in operational
processes, breaches in internal controls, employee actions, or computer systems, as well as therisk of loss resulting from external events.

Administrative risk

Administrative risk is the risk of loss resulting from administrative failures, accidents, or management or staff fraud.

Information
technology risk

Information technology risk is the risk of loss due to computer system failures, errors, orinadequacies, and the risk of loss due to the fraudulent use of computer systems.

Other operational risks are those, other than the ones mentioned above, that may be defined, as
Other operational risk necessary, by the divisions responsible for the overall management of operational risk (excluding
market, liquidity, and credit risks).

21

Risk Management System
Board of Directors
Division responsible for asset assessment
Credit Planning & Supervision Division

Executive Committee

Risk Management
Committee
Risk Management Division

Risk Management Division

Responsible for integrated risk
management

Responsible for overall management ofoperational risk

Risk Management Division(Assessment)

Operations Division

Strategic Planning Division (Policy)
Financial Management Division(Calculation)

Systems Division

Credit Planning & Supervision Division
Responsible for credit assessment

Responsible for administrative risk
management

Responsible for liquidity risk
management

Responsible for the management of otheroperational risk

Responsible for credit control

Market Risk Management Framework

In addition, the SCB manages our exposure on a variety of fronts, such as monitoring
stress losses at times of unexpected market
fluctuations, the basis-point-value (BPV)(changes in the valuation of the market value ofthe portfolio in response to changes in interest rates), and IRRBB (interest rate risk in scenarios specified by the FSA).
The status of these risk management
activities is reported to senior management at
biweekly meetings of the ALM Committee.

Board of Directors
Executive Committee
Decisions

Matters for discussion

Risk Management Committee
ALM Committee
Decisions

Decisions

Reports

Divisions responsible formarket risk management

Matters for discussion

Market divisions
Mutual checks

Mutual checks

Mutual checks

Administrative control divisions

Market Risk* Management
To maintain an accurate understanding ofmarket risk and rigorously manage this risk,
the SCB has issued a market risk management
policy. Furthermore, divisions responsible formarket risk management are clearly separated
from divisions involved in market operations,providing a risk management structure inwhich internal checks are maintained throughthe independent functions.
The SCB has established the ALM Committee as the body responsible for deliberating and making decisions on matters relating
to m arket risk m an age me nt . The A LM
Committee comprises senior management22

Responsible for market risk
management

Financial Management Division

Divisions stipulated by Risk
Management Division

Risk Management Division, Credit
Planning & Supervision Division

Risk Management Division

Risk Management Division

Responsible for information technology
risk management

Responsible for capital adequacy

ALM
Committee

CreditCommittee

and heads of divisions related to market risk.
Based on risk status information—obtained
via reports from divisions responsible formanaging market risk and other sources—
the ALM Committee deliberates widely and
expeditiously on policy relating to fundraising and management as well as proposed
market transactions.
For banking operations and trading activities, the divisions responsible for managing
market risk quantify and manage market risk
by VaR within the limit set by the Executive
Committee. In addition, market risk is further
divided into several categories, with risk
quantities monitored by category.

* Market risk includes interest rate risk and such equity­
related risk as stock price fluctuation risk.

Liquidity Risk Management
As the central financial institution for shinkinbanks, the SCB maintains a rigorous system
for managing liquidity risk to respond to
the needs of shinkin banks for daily working
capital and emergency funds.
To maintain an accurate understandingof liquidity risk and rigorously manage thisrisk, the SCB has formulated a liquidity risk
management policy. Divisions responsible
for liquidity risk management are clearly
separated from divisions involved in cash
management and market operations, allowinginternal checks to be maintained through theindependent functions. In addition, the ALM
Committee deliberates and makes decisions
on matters relating to liquidity risk management.
Methods used for managing liquidity risk
include the daily setting and monitoring ofrisk limit amounts relating to the gap between
cash receipts and payments. This is carriedout for individual currencies and periods. In
the event that a significant liquidity risk arises,
the SCB is prepared to respond rapidly, andeven secure funding sources.

Credit Risk* Management
To maintain an accurate understanding ofcredit risk and rigorously manage this risk, the
SCB has formulated a credit risk management
policy. Furthermore, the SCB has formulated
a Credit Policy, which sets out the SCB’s
fundamental philosophy. The SCB requires
strict adherence to the Credit Policy on thepart of all directors and employees involvedin credit operations. The SCB conducts ongoing internal communications emphasizing
the importance of sound ethics in all behavior
and decision making.
At the SCB, divisions responsible for
credit control, credit assessment and asset
assessment are clearly separated from divisions
involved in client services. In this way, we arebuilding a structure in which internal checks
are maintained through the independentfunctions given to each part of the system.
The SCB has established the Credit Committee and the Risk Management Committee
as the bodies responsible for deliberating andmaking decisions on matters relating to credit
risk management. The Credit Committee andthe Risk Management Committee comprisesenior management and the general managers
of related divisions. The Credit Committee deliberates on credit transactions thatexceed a designated amount, and the Risk
Management Committee deliberates broadly
and thoroughly matters relating to credit
risk management. The Executive Committee
deliberates, and makes decisions regarding,
the results of self-assessment of assets andmatters relating to self-assessment of asset
write-offs and asset reserve provisions.
Divisions responsible for credit control
manage the credit risk for each borrower
relating to loans and market trading activities.
An overall credit limit is set for each borrower according to their credit rating.
Credit ratings are based on quantitative
criteria, set by evaluating the borrower’s
financial statements, and qualitative criteria,
set by evaluating the borrower’s competitive
strength in the particular industry within
which it operates. Based on these assessmentsof credit strength, each borrower is given acredit rating on the SCB’s 10-step scale. The
credit ratings given to borrowers are reviewed
regularly, and flexibly revised as necessary.
Divisions responsible for credit control
analyze the SCB’s overall credit portfolio
according to credit rating, industry, country,
and other criteria. These analyses are used
to monitor the diversification of credit risk
as well as changes in portfolio credit risk.
Furthermore, credit risk is quantified andmanaged within the risk limit set by the Executive Committee.
The credit risk amount is measured
using VaR as well as the Monte Carlo simula-tion method.
The Credit Planning & Supervision Division—responsible for credit assessment—
accurately monitors each borrower’s financial
condition, the purposes for which funds areused, and repayment resources. In addition toappropriate assessment and post-transaction
management, the Credit Planning & Supervision Division continually inspects whether theclient service division is conducting appropriate credit controls, and provides guidanceas necessary. In the event that there should
be any problem on the borrower’s side, theCredit Planning & Supervision Division expeditously assesses the borrower’s management
situation and provides supervision. Where
necessary, action is taken to recover the loan.
The Credit Planning & Supervision Division is also responsible for asset assessment.
The division undertakes and manages operations relating to asset self-assessments, andthe calculation of asset write-offs and asset
reserve provisions.
* Credit risk includes such risk as counterparty risk forderivative transactions and securitization transaction
risk.

Operational Risk Management
To provide comprehensive management ofoperational risk, the SCB has issued a policythat governs operational risk management.
In addition, the SCB has separate policies tomanage two major types of operational risk:
administrative and information technology
risk. The Risk Management Division is responsible for overall operational risk management,
the Operations Division oversees administrative risk management, and the Systems Division is responsible for information technology
risk management. The SCB may also create
new divisions to cope with other types ofoperational risk as the need arises. With thisstructure, the SCB comprehensively manages
operational risk.
The SCB has established the Risk Management Committee to deliberate and makedecisions on matters relating to operationalrisk management. The Risk Management
Committee, comprising senior management
and heads of related divisions, deliberates andmakes decisions on comprehensive methods
for managing operational risk, including
administrative risk and systems risk.
To calculate its operational risk capitalrequirements, the SCB uses the basic indicator approach proposed under regulations
concerning capital adequacy ratios.

• Administrative Risk Management
The Operations Division oversees administrative risk management and administrative
instruction. In addition to developing andmaintaining the administrative processing
system and administrative rules, and undertaking reviews of administrative procedures,the Operations Division conducts administrative instruction programs for divisions
involved in administrative processing. With
this system, the SCB appropriately manages
administrative risk.
Furthermore, the SCB is undertaking a
range of measures to ensure accurate andefficient administrative processing. These
include the systemization of administrative
processing, the provision of various training
programs, including programs, to encourage
staff to submit proposals to improve operatingprocesses at all branches. The SCB also controls the entire process of administrative risk
management, from the identification of risk to
the implementation of corrective measures.

• Information Technology Risk Management
The Systems Division takes charge of information technology risk management. It provides
control and guidance to divisions involved insystem development, operation, and utilization.
Recognizing t h at c y ber at t ack s are
becoming increasingly sophisticated and inge­
nious, the division is stepping up measures
to reinforce its cybersecurity, including theestablishment of the Shinkin Central Bank
Computer Security Incident Response Team.
In the event of a system failure that
seriously affects the execution of business
operations, an SCB-wide response is triggered based on crisis management procedures(contingency planning). In addition to periodically conducting crisis response drills, basedon system failure crisis scenarios, the SCB also
has in place a Disaster Recovery System andother precautions based on the Business Continuity Plan.

Introduction of Risk Appetite Framework

In order for the SCB to fulfill its role as thecentral financial institution of shinkin banks,
and because it is necessary for it to take appropriate risks, which are matched to its capital and congruent with its own business modeland risk culture, to enable it to continue tosecure profits, a so-called “risk appetite
framework”(*1, *2) has been constructed and isoperated in order to put this into practice.
*1. Risk appetite: the type and size of risks that an organization attempts to take in order to achieve its
business plans, based on its own individual businessmodel.
*2. Risk appetite framework: a business management
framework used as a common language within thecompany in relation to all risk-taking policies, andwhich includes capital allocation and profit maximization in regard to risk appetite.

23

Preferred Shares
The SCB’s Preferred Shares

Trading of Preferred Shares

The SCB issues preferred shares under the
Law Concerning Preferred Shares of Cooperative Financial Institutions. The preferredshares, which are regulated by the Financial
Instruments and Exchange Law, are issued tocomplement members’ (shinkin banks’) common shares and offered publicly to increase thenet worth of cooperative financial institutions.
Although the preferred shares do notcarry the voting rights that holders of common shares receive, the preferred shares havecertain advantages over common shares, suchas the guarantee of priority in the payment
of dividends.

Like listed stocks, the SCB’s preferred sharescan be traded anytime during Tokyo Stock
Exchange trading hours through a securities
company. Credit transactions are also possible
for preferred shares, just as they are for stocks.

Listing of Preferred Shares
The SCB has issued preferred shares since
fiscal 1995 and, for the first time in Japan, thepreferred shares were listed on the Tokyo
Stock Exchange on December 22, 2000 (Securities Identification Code 8421). The SCB’s
preferred shares are marketable securities
that are very similar to preferred stocks,
and, basically, the same listing criteria anddisclosure rules apply to them.

Dividends of Preferred Shares
The SCB’s basic policy is to pay stabledividends while securing sound management,enhancing internal reserves, and boostingearnings power.
The SCB’s preferred shares pay a dividend
to the holders at the end of March of every
fiscal year. As the rule of interim dividends is
not provided in the Law Concerning Preferred
Shares of Cooperative Financial Institutions,
the SCB does not pay interim dividends.
Dividends of preferred shares comprise
preferred dividends and participating dividends.
Preferred dividends are paid before any
dividends are paid to common stock holders(shinkin banks). Participating dividends arepaid from retained earnings after preferred
dividends. They may vary depending on profits
of the SCB.

Composition of Preferred Shares (March 31, 2019)
・Number of Investors (19,516)
Foreign institutions
and others
34(0.2%)
Other corporations
204(1.0%)
Financial institutions
206(1.1%)

Other corporations
36,761(5.2%)(Closing price,yen)First day of listing (December 22, 2000) 200,500
Foreign institutions
and others
1,387(0.2%)

Highest price (March 15, 2006)

311,500

Lowest price (April 14, 2009)

102,400

Closing price (July 31, 2019)

238,600* The price of preferred shares is split-adjusted, reflecting
the stock split of preferred shares as at July 31, 2009.

Individuals
110,224(15.5%)
Individuals
19,062(97.7%)

24

Price of Preferred Shares*

・Number of Subscription (708,222)
Securities companies
6,963(1.0%)

Securities companies
10(0.0%)The SCB’s preferred shares are treatedas stocks in the taxation system, and are given
the same preferential treatment concerning
tax as stocks.
For fiscal 2018, the dividend for preferredshares was ¥6,500 ($58) per share, which
included a preferred dividend of ¥3,000 ($27)
and a participating dividend of ¥3,500 ($31).

Financial institutions
552,887(78.1%)

Financial Section

Contents
26 Five-Year Summary (Consolidated)
27 Consolidated Balance Sheet
28 Consolidated Statement of Income
29 Consolidated Statement of Comprehensive Income
30 Consolidated Statement of Changes in Net Assets
32 Consolidated Statement of Cash Flows
33 Notes to Consolidated Financial Statements
76 Independent Auditor’s Report
77 Non-Consolidated Balance Sheet
78 Non-Consolidated Statement of Income
79 Statement of Trust Account (Consolidated)

25

Five-Year
Five-Year Summary
Summary (Consolidated)(Consolidated)
FY2013
FY2014FY2014FY2015FY2015FY2016(Millions of yen)
FY2016FY2017FY2017FY2018

Total Income

307,894308,171

302,154
307,894

319,307
302,154306,892
319,307

293,808
306,892

Trust Fees

597
600

600
665

665
595

595
351

351
399

Total Expenses

255,548
223,028

223,028
242,097

242,097
266,503

266,503
244,018

244,018
231,873

Profit Attributable to Owners of Parent

62,696
37,612

42,781
62,69643,87142,781

44,46643,87144,781
44,466Comprehensive Income

48,004
173,512173,51218,30318,303
11,056

11,056
20,433

20,43353,530Net Assets

1,433,756
1,276,826

1,632,969
1,433,756

1,625,842
1,632,969

1,626,605
1,625,842

1,660,465
1,626,605

Total Assets

31,184,564
33,516,073

33,516,073
35,092,905

35,092,905
37,464,593

37,464,593
38,790,449

38,790,449
39,693,375

Net Assets per Share (yen)268,795.17
301,997.98

301,997.98
301,512.71

301,512.71
299,542.84

299,542.84
299,587.63

299,587.63
306,594.84

Net Income per Share (yen)7,537.36
12,865.13

12,865.13
7,115.71

7,115.71
6,223.20

6,223.20
6,311.86

6,311.86
6,358.89

16,603
18,957

18,957
18,115

18,115
19,603

19,603
19,603

19,603General Common Shares

14,00012,00012,00014,00012,00012,00012,00012,00012,000Specific Common Shares

－

1,512
－

1,512
3,000

3,000
3,000

3,000

Preferred Shares

4,957
4,603

4,603
4,957

4,603
4,603

4,603
4,603

4,603

Total Trust Assets

2,180,138
2,096,294

2,096,294
2,181,287

2,181,287
1,859,161

1,859,161
525,445

525,445807,201

Dividends

Notes:
1. National and local consumption tax incurred by the Shinkin Central Bank and its domestic consolidated subsidiaries are
excluded from transaction amounts.
2. In the fiscal year ended March 31, 2017 the Shinkin Central Bank started trust business; “Trust Fees” and “Total Trust Assets”
have therefore been added to the above table.
3. “Total Trust Assets” is calculated
calculated by means of simple aggregation of the trust assets for each consolidated company conducting
trust business pursuant to the “Act on Engagement in Trust
Trust BusinessBusiness Activities by Financial Institutions”. Consolidated
companies conducting
thefiscal
fiscal years
year ended
conducting such
such trust
trust businessbusinesscomprised
comprisedonly
onlyShinkin
ShinkinTrust
TrustBank,
Bank,Ltd.
Ltd.untilin theended March
March31,
31,2016,2015
infiscalinyear
endedyear
March
31, March2017 comprised
the Shinkinthe
CentralBank
and Shinkin
Bank,Ltd.,Bank,and inthe andfiscalandthe2016,
the fiscal
ended
31, 2017 comprised
ShinkinCentralBank andTrust
Shinkin
Trust
Ltd.,
in
year
endedyears
March
31, March2018 comprised
the Shinkin
Central Bank.
the fiscal
ended
31, 2018 and2019 comprised
the Shinkin Central Bank.

26

Consolidated
Balance Sheet
Consolidated Balance Sheet
Shinkin
Shinkin Central
Central Bank As of March 31,
AssetsAssetsCash andand DueDue from Banks (Note 2 (2), 26)
Cash
Bills Bought
Bought and Call Loans (Note 26)
Bills
Receivables under
under Resale Agreements (Note 26)
Receivables
26)
Receivables under
under Securities Borrowing Transactions
Receivables
Transactions (Note(Note 26)
26)
Monetary Debts
ClaimsPurchased
Bought (Note26)26)
Monetary(Note
Trading Assets
Assets (Note 3, 9, 26, 27)
Trading
Money Held
Held inin Trust (Note 26, 27)
Money
Securities (Note(Note 4, 7, 9, 26, 27)
Securities
Loans andand Bills
Bills Discounted (Note 5, 6, 9, 26)
Loans
26)
Foreign Exchanges
Exchanges Assets
AssetsForeign
Other Assets
Assets (Note(Note 9)9)
Other
Tangible Fixed
Fixed Assets
Assets (Note(Note 8,8, 14,
Tangible
14, 25)25)
Intangible Fixed
Fixed Assets
Assets (Note(Note 25)
Intangible
25)
Deferred Tax
Tax Assets
Assets (Note(Note 23)
Deferred23)
Customers’ Liabilities
Liabilities forfor Acceptances
Acceptances andCustomers’
and Guarantees
Guarantees
Reserve forfor Possible
Possible Loan
Loan Losses
LossesReserve
Total Assets
Assets
Total
Liabilities andand NetNet Assets
AssetsLiabilities
Liabilities
Liabilities
Deposits (Note(Note 26)
26)
Deposits
Debentures (Note(Note 12,
12, 26)26)
Debentures
Trading
Liabilities(Note
10, 26)
Trading Liabilities (Note 10,
26)
Borrowed Money (Note 9, 11, 26)
Borrowed Money (Note 9, 11, 26)
Bills Sold and Call Money (Note 26)
Bills Sold and Call Money (Note 26)
Payables under Repurchase Agreements (Note 9, 26)
Payables under Repurchase Agreements (Note 9, 26)
Payables under Securities Lending Transactions (Note 9, 26)
Payables under Securities Lending Transactions (Note 9, 26)
Foreign Exchanges Liabilities
Foreign Exchanges Liabilities
Borrowed Money from Trust Account
Borrowed Money from Trust Account
Other Liabilities (Note 11, 13)
Other Liabilities (Note 11, 13)
Reserve for Employee Bonuses
Reserve for Employee Bonuses
Reserve for Directors' Bonuses
Reserve for Directors' Bonuses
Net Defined Benefit Liability (Note 24)
Net Defined Benefit Liability (Note 24)
Reserve for Directors' Retirement Allowances
Reserve for Directors' Retirement Allowances
Reserve under Specific Law
Reserve under Specific Law
Deferred Tax Liabilities (Note 23)
Deferred Tax Liabilities (Note 23)
Deferred Tax Liabilities for Land Revaluation (Note 14)
Deferred Tax Liabilities for Land Revaluation (Note 14)
Acceptances and Guarantees
Acceptances and Guarantees
Total Liabilities
Total Liabilities
Net Assets
Net
AssetsCommonShares and Preferred Shares (Note 22)
CommonShares and Preferred Shares (Note 22)
Capital Surplus
CapitalSurplusRetained
Earnings
Retained
Earnings Equity
Total Shareholders'
Total
Shareholders'EquityNet Unrealized
Gains(Losses) on Other Securities (Note 23, 27)Net
Unrealized(Losses)on Other
Securities
Deferred
Gains Gains
or Losses
on Hedges(Note23, 28)(Note 23, 27)
Net
Gains
(Losses)
on14)
Hedging Instruments (Note 23, 28)
LandDeferred
Revaluation
Excess(Note
Land
Revaluation
(Note
14)
Foreign
Currency Excess
Translation
Adjustments
Foreign
Currencyof
Translation
Adjustments
Remeasurements
Defined Benefit
Plans (Note 24)
RemeasurementsofOtherDefinedBenefit Plans Income(Note 24)
Total Accumulated
Comprehensive
Total
Accumulated
Other
Comprehensive
IncomeNon-Controlling Interests
Non-controllinginterests
Total Net Assets
Total
Net Assets
Total
Liabilities
and Net Assets
Total Liabilities and Net Assets
The
these financial
financialstatements.
statements.
The accompanying
accompanying notes are an integral part of these

2018
2019

MillionsofofYen
Yen
Millions
2017
2018

Millions
Millions
ofof
U.S.Dollars
Dollars
U.S.
(Note
(Note
1)1)
2018
2019

13,346,876
12,393,632
765,887
413,259
39,99989,99923,22915,340221,732
177,359
248,586
250,424
150,31799,78916,583,668
17,108,434
7,038,785
6,952,660
21,13020,460936,752
967,208
76,866
71,353
21,57012,9994,160
3,996
244,051
256,687(30,238)(43,157)
39,693,375
38,790,449

12,393,632
10,611,955
413,259362,234
89,99919,99915,34086,206
177,359
180,477
250,424
232,088
99,789 17,108,434
17,164,425
6,952,660
7,995,391
20,46020,514
967,208
488,622
71,35373,89912,99914,843
3,996
3,895
256,687
255,536(43,157)(45,499)
38,790,449
37,464,593

120,285
116,613
6,902
3,888
360
846
209
144
1,998
1,668
2,240
2,356
1,354
938
149,456
160,975
63,43565,418
190
192
8,442
9,100
692
671
194
122
3737
2,199
2,415
(272)
(406)
357,726
364,983

30,941,297
30,230,956
2,484,300
2,705,490
72,16566,636
1,967,180
1,637,770
37,87840,313
152,777
98,373
1,784,546
1,789,012
1,397
447
14,025
5,375
198,002
204,426
1,779
1,721
86
89
42,406
41,525587
595
1
184,34578,321
6,081
6,100
244,051
256,687
38,032,909
37,163,843

30,230,956
29,150,114
2,705,490
2,950,000
66,636
84,345
1,637,770
1,203,870
40,31327,821
98,373
188,4021,789,012
1,606,958
447
368
5,375
360
204,426
234,605
1,721
1,726
89
83
41,525
41,524595
535
1
178,321
86,387
6,100
6,109
256,687
255,536
37,163,843
35,838,750

278,850
284,446
22,38925,456650
626
17,72815,409
341
379
1,376
925
16,082
16,833
12
4
126
50
1,784
1,923
16
16
0
0
382
390
5
5
0
0
760
736
54
57
2,199
2,415
342,762
349,678

690,998
690,998
100,678
100,678595,294
571,563
1,386,971
1,363,240
323,683
299,808(66,632)(50,303)
14,894
13,433(3,383)(2,848)(6,892)(7,681)
261,669
252,409
11,824
10,956
1,660,465
1,626,605
39,693,375
38,790,449

690,998
690,998
100,678
100,678
571,563546,678
1,363,240
1,338,355
299,808
348,931(50,303)(72,705)
13,433
13,455(2,848)(3,246)(7,681)(9,351)
252,409
277,083
10,956
10,403
1,626,605
1,625,842
38,790,449
37,464,593

6,227
6,501
907
947
5,364
5,377
12,49912,826
2,917
2,820
(600)
(473)
134
126
(30)
(26)
(62)
(72)
2,358
2,374
106
103
14,96415,304
357,726
364,98327

Consolidated Statement of Income

Consolidated Statement of Income
Shinkin Central Bank
Bank For
For thethe year
yearended
endedMarch
March31,
31,
IncomeInterest Income:
Income:Interest
Interest on
on Loans
Loans andand Discounts
Discounts
Interest
Interest on
on DueDue from
fromBanks
Banks
Interest
Interest on
on Bills
Bills Bought
BoughtandandCall
CallLoans
Loans
Interest
Interest on
on Receivables
Receivablesunder
underResale
ResaleAgreements
Agreements
Interest
Interest on
on Receivables
Receivablesunder
underSecurities
SecuritiesBorrowing
BorrowingTransactions
Transactions
Interest
Interest andand Dividends
Dividendson
onSecurities
Securities
OthersOthers
Trust
Trust Fees
Fees
Fees
Fees andand Commissions
Commissions (Note(Note16)
16)
Trading
Income(Note
17)
Trading Income (Note 17)
Other Operating
Other
Operating Income
IncomeOther Income
Other
Income (Note(Note 19)
19)
Total
Total Income
IncomeExpenses
Expenses
Interest Expenses:
Interest Expenses:
Interest on Deposits
Interest on Deposits
Interest on Debentures
Interest on Debentures
Interest on Borrowed Money
Interest on Borrowed Money
Interest on Bills Sold and Call Money
Interest on Bills Sold and Call Money
Interest on Payables under Repurchase Agreement
Interest on Payables under Repurchase Agreement
Interest on Payables under Securities Lending Transactions
Interest on Payables under Securities Lending Transactions
OthersOthersFees and Commissions (Note 16)
Fees and Commissions (Note 16)
Trading Losses (Note 18)
Trading Losses (Note 18)
Other Operating Expenses
Other Operating Expenses
General and Administrative Expenses
Generaland Administrative Expenses
Other Expenses (Note 20)
Other
Expenses (Note 20)
Total Expenses
Total Expenses

Profit before Income Taxes
Profit
Taxes
Incomebefore
TaxesIncome(Note 23):
Income Current
Taxes (Note 23):
Current
DeferredDeferred
Total Income Taxes
Profit Total Income Taxes
ProfitProfit attributable to non-controlling interests
Profit attributable
Attributabletotoowners
Non-Controllingof parent Interests
Profit Attributable to Owners of Parent

Net Income per Share (Note 32)
Dividend
Declaredper Share
Common Shares)
Net
Incomeper Share(Note (General
31)
Dividend Declared
Declared per
per Share
Share (Specific(GeneralCommon
CommonShares)
Shares)Shares) Shares)
Dividend Declared
Declared per
per Share
Share (Preferred(Specific Common
Dividend Declared per Share (Preferred Shares)
The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements.

28

Millions
Yen
Millions
ofof
Yen
2018
2019
2017
2018

Millions
Millions
of ofU.S.
Dollars
U.S.
Dollars
(Note
(Note
1) 1)
2019
2018

220,528
193,754
17,597
19,518
8,417
8,466
706
946
0
(336)
131 6
193,032
164,344
642
810
351
399
42,77943,6703,904
4,078
24,40633,801
14,922
18,104
306,892
293,808

201,637
220,528
17,86917,597
8,448
8,417
753
706
0 0
148
131
173,879
193,032
538
642
595
351
42,68542,7795,260
3,904
59,02824,406
10,09914,922
319,307306,892

2,074
1,746
165175
79 76
6 8
0 (3)
1 0
1,816
1,481
6 7
3 3
40239336 36229304140163
2,887
2,647

121,559
119,534
37,83940,218
5,920
4,489
7,066
3,595
461
537
1,920
1,258
15,883
23,68752,46745,746
15,38615,758133
316
54,22841,88351,64752,183
1,063
2,195
244,018
231,873

122,381
121,559
39,68937,839
7,998
5,920
8,292
7,066
254
461
1,062
1,920
9,267
15,88355,81752,467
14,784
15,386
133
74,53454,22852,04351,6472,759
1,063
266,503
244,018

1,143
1,077
356
362
55
40
66
32
4
4
18
11
149
213
493
412
144
142
1
2
510
377
485
470
10
2,295 19
2,089

62,873
61,93552,80462,873591
558

16,38913,9971,490
2,280
17,88016,27844,99245,657526
875
44,46644,781

12,19916,389(3,948)1,490
8,250
17,88044,55444,992682
526
43,871
44,46615414126
168 20423146
4411
418 7
403

2017
6,223.20
2018
3,000.00
6,311.86
1,500.00
3,000.00
6,500.00
1,500.00
6,500.00

U.S. Dollars
U.S. Dollars(Note
1)(Note 1)
2018
59.38
2019
28.22
57.30
14.11
27.03
61.15
13.51
58.57

Yen
Yen
2018
6,311.86
2019
3,000.00
6,358.89
1,500.00
3,000.00
6,500.00
1,500.00
6,500.00

Consolidated Statementof Comprehensive
Consolidated
Statement ofComprehensive Income
IncomeShinkin Central Bank For the year ended March 31,
ProfitOther Comprehensive Income (Note 21)
Net Unrealized Gains (Losses) on Other Securities
Net
Deferred
Gains(Losses)on Hedging Instruments
Deferred
Gains
or Losses
on Hedges
Land Revaluation Excess
Foreign Currency Translation Adjustments
Remeasurements of Defined Benefit Plans
Comprehensive Income
Comprehensive Income attributableparentAttributabletotoowners
Ownersofofthe
ParentComprehensive Income attributableinterests
Attributabletotonon-controlling
Non-Controlling
Interests

2018
2019

Millions of Yen

44,99245,657(24,559)
7,873(49,122)
23,874
22,401(16,328)
0
13
398
(534)
1,762
848
20,43353,53019,81452,594
618
935

2017
2018

44,55444,992(33,497)(24,559)(129,013)(49,122)
96,14522,401-0(1,593)
398
963
1,762
11,056
20,433
10,32819,814
727
618

Millions of
U.S. Dollars(Note 1)
2018
2019
423
411
(231)
70
(462)
215
210
(147)
0
3
(4)
167
192
482
186
473
58

The accompanying notes are an integral part of these financial statements.

29

Consolidated Statement
Consolidated
Statement ofof Changes
Changes inin Net
Net Assets
Assets
Shinkin2019
ShinkinCentral
CentralBank
Bank For
Forthetheyearyearended
endedMarch
March31,
31,2018

Millions
MillionsofofYen
Yen

Shareholders'Shareholders'Equity
EquityCommonCommonShares
SharesandandPreferredPreferred
SharesSharesBalance
Balanceat
atBeginning
Beginningof
ofYearYear

CapitalCapitalSurplus
Surplus690,998
690,998

Retained
RetainedEarnings
Earnings

100,678
100,678

Total
TotalShareholders’Shareholders’Equity
Equity571,563546,678

1,363,240
1,338,355

Surplus
SurplusDividends
Dividends(19,603)(19,603)(19,603)(19,603)

ProfitOwnersof
ofparent
ParentProfitAttributable
attributable toto owners

44,781
44,46644,781
44,466

Reversal
Reversalof
ofLandLandRevaluation
RevaluationExcess
Excess(1,447)22(1,447)22

Fluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year

Net
NetChanges
ChangesininItems
ItemsOther
OtherThan
ThanShareholders’Shareholders’EquityEquityduring
duringthe
theFiscal
FiscalYear
Year
Total
TotalFluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year
Balance
Balanceat
atEnd
End ofofYear
Year

--

--

23,731
24,88423,731
24,884690,998
690,998

100,678
100,678595,294
571,563

1,386,971
1,363,240

Accumulated
AccumulatedOther
OtherComprehensive
ComprehensiveIncome
IncomeNet
Foreign
Foreign
NetUnrealized
Unrealized Deferred
Net Deferred
Gains
Gains
Land Revaluation
Currency
Gains(Losses)(Losses) Gains(Losses)
Currencyor Losseson Land Revaluationon
ExcessTranslation
ExcessTranslation
onOther
Other
on
Hedging
HedgesSecurities
Adjustments
Instruments
Adjustments
Securities
Balance
Balanceat
atBeginning
Beginningof
ofYearYear

299,808
348,931(50,303)(72,705)

13,433
13,455

Total
Total
Remeasurements
Accumulated
Remeasurements Accumulated
ofofDefined
Other
DefinedBenefit
Benefit
Other
Plans
Comprehensive
Comprehensive
Plans
IncomeIncome(2,848)(3,246)(7,681)(9,351)

252,409
277,083

NonNonControlling
controlling
Interests
Interests

10,956
10,403

Total
TotalNet
Net
AssetsAssets1,626,605
1,625,842

Fluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year
Surplus
SurplusDividends
Dividends(19,603)(19,603)

ProfitOwnersof
ofparent
ParentProfitAttributable
attributable toto owners

44,781
44,466

Reversal
Reversalof
ofLandLandRevaluation
RevaluationExcess
Excess(1,447)22Net
NetChanges
ChangesininItems
ItemsOther
OtherThan
ThanShareholders’Shareholders’EquityEquityduring
duringthe
theFiscal
FiscalYear
Year23,874(49,122)(16,328)
22,401

1,460
(22)

(534)
398

788
1,670

9,260
(24,674)868
552

10,129(24,121)

Total
TotalFluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year23,874(49,122)(16,328)
22,401

1,460
(22)

(534)
398

788
1,670

9,260
(24,674)868
552

33,860763

Balance
Balanceat
atEnd
End ofofYearYear

323,683
299,808(66,632)(50,303)

14,894
13,433(3,383)(2,848)(6,892)(7,681)

261,669
252,409

11,824
10,956

1,660,465
1,626,605

Millions
MillionsofofU.S.
U.S.Dollars
Dollars(Note(Note1)1)
Shareholders'Shareholders'Equity
EquityCommonCommonShares
SharesandandPreferredPreferred
SharesSharesBalance
Balanceat
atBeginning
Beginningof
ofYearYear

CapitalCapitalSurplus
Surplus

6,227
6,501

Retained
RetainedEarnings
Earnings
907
947

Total
TotalShareholders’Shareholders’Equity
Equity5,151
5,143

12,285
12,592

Surplus
SurplusDividends
Dividends

(176)
(184)

(176)
(184)

ProfitOwnersof
ofparent
ParentProfitAttributable
attributable to owners

403
418

403
418

Reversal
Reversalof
ofLandLandRevaluation
RevaluationExcess
Excess

(13)0

(13)0

Fluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year

Net
NetChanges
ChangesininItems
ItemsOther
OtherThan
ThanShareholders’Shareholders’EquityEquityduring
duringthe
theFiscal
FiscalYear
Year
Total
TotalFluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year
Balance
Balanceat
atEnd
End ofofYear
Year

--

--

213
234

213
234

6,227
6,501

907
947

5,364
5,377

12,49912,826

Accumulated
AccumulatedOther
OtherComprehensive
ComprehensiveIncome
IncomeNet
Foreign
NetUnrealized
Unrealized
Net Deferred
Foreign
Deferred Gains
Gains
Gains(Losses)(Losses) Gains (Losses) Land
LandRevaluation
Revaluation Currency
Currencyor Losses onon
ExcessTranslation
onOtherOther
on Hedging
ExcessTranslation
HedgesSecurities
Adjustments
Securities
Instruments
Adjustments
Balance
Balanceat
atBeginning
Beginningof
ofYear
Year

2,701
3,283

(453)
(684)

121
126

(25)
(30)

Total
Total
Remeasurements
Remeasurements Accumulated
Accumulated
ofofDefined
Other
DefinedBenefit
Benefit
Other
Plans
Comprehensive
Plans
Comprehensive
IncomeIncome
(69)
(87)

2,274
2,607

NonNonControlling
controlling
Interests
Interests

98
97

Total
TotalNet
Net
AssetsAssets

14,65915,297

Fluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year
Surplus
SurplusDividends
Dividends

(176)
(184)

ProfitOwnersof
ofparent
ParentProfitAttributable
attributable to owners

403
418

Reversal
Reversalof
ofLandLandRevaluation
RevaluationExcess
ExcessNet
NetChanges
ChangesininItems
ItemsOther
OtherThan
ThanShareholders’Shareholders’EquityEquityduring
duringthe
theFiscal
FiscalYear
Year
Total
TotalFluctuation
FluctuationAmountAmountduring
duringthe
theFiscal
FiscalYear
Year
Balance
Balanceat
atEnd
End ofofYear
Year

30

(13)0
215
(462)

(147)
210

13(0)

(4)3

7
15

83
(232)

75

91
(226)

215
(462)

(147)
210

13(0)

(4)3

7
15

83
(232)

75

3057

2,917
2,820

(600)
(473)

134
126

(30)
(26)

(62)
(72)

2,358
2,374

106
103

14,96415,304

Shinkin Central Bank For the year ended March 31, 2018

Millions of Yen
Shareholders' Equity
Common Shares and Preferred
SharesBalance at Beginning of Year

Capital Surplus

690,998

Retained Earnings
100,678

Total Shareholders’ Equity
546,678

1,338,355

Surplus Dividends(19,603)(19,603)

Profit Attributable to Owners of Parent

44,46644,46622

22

Fluctuation Amount during the Fiscal Year

Reversal of Land Revaluation Excess
Net Changes in Items Other Than Shareholders’Equity during the Fiscal Year
Total Fluctuation Amount during the Fiscal Year
Balance at End of Year--

24,88424,884690,998

100,678

571,563

1,363,240

Accumulated Other Comprehensive Income
Net Unrealized
Gains (Losses)
on Other
Securities
Balance at Beginning of Year348,931

Deferred Gains
Land Revaluationor Losses on
ExcessHedges(72,705)

13,455

Foreign
Currency
Translation
Adjustments(3,246)

Total
Accumulated
Remeasurements
Otherof Defined Benefit
Comprehensive
Plans
Income(9,351)

277,083

NonControlling
Interests

10,403

Total Net
Assets1,625,842

Fluctuation Amount during the Fiscal Year
Surplus Dividends(19,603)

Profit Attributable to Owners of Parent

44,466

Reversal of Land Revaluation Excess
Net Changes in Items Other Than Shareholders’Equity during the Fiscal Year

22
(49,122)

22,401

(22)

398

1,670

(24,674)552(24,121)

Total Fluctuation Amount during the Fiscal Year(49,122)

22,401

(22)

398

1,670

(24,674)552

763

Balance at End of Year

299,808(50,303)

13,433(2,848)(7,681)

252,409

10,956

1,626,605

The accompanying notes are an integral part of these financial statements.

31

Consolidated
Statement ofof CashCash Flows
Flows
Consolidated Statement
Millions of
U.S. Dollars
Shinkin Central Bank For the year ended March 31,

Millions of Yen

2018
2017

(Note 1)2019
2018

Cash Flows from Operating Activities:
Profit before Income Taxes
Depreciation
Impairment Loss
Increase (Decrease) in Reserve for Possible Loan Losses
Increase (Decrease) in Reserve for Employee Bonuses
Increase (Decrease) in Reserve for Directors' Bonuses
Increase (Decrease) in Net Defined Benefit Liability
Increase (Decrease) in Reserve for Directors' Retirement AllowancesInterest Income
Interest Expenses
Net Losses (Gains) on Securities
Net Losses (Gains) on Money Held in Trust
Net Losses (Gains) on Foreign Exchange
Net Losses (Gains) on Disposal of Fixed Assets
Net Decrease (Increase) in Trading Assets
Net Increase (Decrease) in Trading Liabilities
Net Decrease (Increase) in Trading Receivable
Net Increase (Decrease) in Trading Payables
Net Decrease (Increase) in Loans and Bills Discounted
Net Increase (Decrease) in Deposits
Net Increase (Decrease) in Debentures
Net Increase (Decrease) in Borrowed Money (Excluding Subordinated Borrowings)
Net Decrease (Increase) in Due from Banks (Excluding Due from Central Bank)Net Decrease (Increase) in Call Loans and Others
Net Decrease (Increase) in Receivables under Securities Borrowing Transactions
Transactions
Net Increase (Decrease) in Call Money and Others
Net Increase (Decrease) in Payables under Securities Lending Transactions
Net Decrease (Increase) in Monetary Claims
Bought
Debts Purchased
Net Decrease (Increase) in Foreign Exchanges (Assets)
Net Increase (Decrease) in Foreign Exchanges (Liabilities)
Net Increase (Decrease) in Due to Trust Accounts
Interest Received
Interest Paid
Other, Net
Sub-total
Income Taxes Paid
Net Cash Provided by (Used in) Operating Activities

61,93562,873
10,260
9,691
1,567
60
(12,919)(2,341)
57
(4)
(3)
6
8810
(8)
59
(193,754)(220,528)
119,534
121,559(767)
23,339112
128(13,474)
39,214
(50)
117
1,838
(18,336)
5,529(17,709)1012,877
19,738(86,124)
1,042,731
710,341
1,080,842(221,190)(244,510)
556,400
650,100
116,589
333,793(302,627)(121,024)(7,889)70,866
51,969(77,538)(4,466)
182,054(44,372)
3,117
(669)
54
949
78
8,650
5,015
250,883
275,967(145,715)(142,068)(62,350)(516,450)
803,994
2,561,001(11,141)(17,362)
792,853
2,543,638

62,87352,804
9,691
10,64760(2,341)
(544)
(4)
(38)
63
0
1,105
59
(18)
(220,528)(201,637)
121,559
122,381
23,339(32,002)
128(224)
39,214
43,797117
11(18,336)
42,064(17,709)(45,116)
101
2,579
19,7381,042,731(1,231,567)
1,080,842
1,936,087(244,510)(102,920)
650,100
482,700
333,793
35,045(121,024)(28,146)
70,86634,334(77,538)
98,023
182,054
192,408
3,117(2,788)54(6,714)
78
112
5,015
(2,964)
275,967
268,378(142,068)(139,300)(516,450)(352,062)
2,561,001
1,176,436(17,362)(18,665)
2,543,638
1,157,771

558
591
92
91
140
(116)
(22)
0
(0)
(0)
0
70
(0)
0
(1,746)(2,074)
1,077
1,143
(6)
219
1
(121)
368
(0)
1
16
(172)
49
(166)
025
185
(776)
9,811
6,401
10,169(1,993)(2,300)
5,014
6,116
1,050
3,140
(2,727)(1,138)
(71)
666
468
(729)
(40)
1,712
(399)
29
(6)
0
80
77
47
2,261
2,596
(1,313)(1,336)(561)(4,859)7,245
24,096
(100)
(163)
7,145
23,933

Cash Flows from Investing Activities:
Acquisitions of Securities
Proceeds from Sale of Securities
Proceeds from Redemption of Securities
Increase in Money Held in Trust
Acquisitionsof Tangible
AssetsDecrease in Money
HeldFixed
in Trust
Acquisitions of Intangible
FixedAssets
AssetsTangible Fixed
Proceeds
fromof Tangible
Fixed Assets
Acquisitionsof SalesIntangible
Fixed Assets
Proceeds from Sales of Shares of Subsidiaries Resulting in Change in Scope of Consolidation
Net Cash Provided by (Used in) Investing Activities(4,304,819)(4,221,520)
2,297,629
2,326,190
2,607,537
1,805,703(50,210)(100,000)(11,835)(14,660)(1,775)153(3,416)
2,417523,793(192,401)(4,221,520)(4,333,235)
2,326,190
2,195,709
1,805,703
2,575,669(100,000)(40,000)(1,775)112,955(3,416)(4,542)(4,007)
2,417(192,401)
502,548(38,796)(39,720)
20,706
21,88723,49916,990(452)(940)(106)(132)
(16)
1
(32)
224,720(1,810)(226,990)(216,200)(19,603)(66)(246,660)(235,870)(216,200)(108,150)(19,603)(18,115)(66)(235,870)(126,332)(2,045)(2,034)
(176)
(184)
(0)
(2,222)(2,219)0(0)1,069,986
2,115,366
11,783,706
9,668,340
12,853,693
11,783,706(0)
2,115,366
1,533,987
9,668,340
8,134,353
11,783,706
9,668,340

0
(0)
9,642
19,903
106,197
90,970115,840
110,874

Cash Flows from Financing Activities:
Repayment of Subordinated Borrowings
Dividends Paid
Dividends Paid to Non-Controlling
Non-controlling Interests
Net Cash Provided by (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 Period
Cash and Cash Equivalents at End of Period (Note 2 (2) )The accompanying notes are an integral part of these financial statements.

32

2019
2018

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements
1. Basis of Presentation:
The accompanying consolidated financial statements have been
prepared from the accounts maintained by Shinkin Central Bank (the“Bank”) and its consolidated subsidiaries in accordance withaccounting principles and practices generally accepted in Japan thatare different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards.
Certain items presented in the consolidated financial statements
have been reclassified for the convenience of readers outside Japan.
The amounts in Japanese yen are presented in millions of yen by
rounding down figures. As a result, the totals in yen shown in the
consolidated financial statements do not necessarily agree with thesums of the individual account balances.
U.S. dollar amounts represent the arithmetical results oftranslating original Japanese yen amounts of the respective account¥106.28 to U.S.$1, the exchangebalances to U.S. dollars on a basis of ¥110.96
rate prevailing as of March 31, 2018.
2019. The amounts in U.S. dollars arepresented in millions of U.S. dollars by rounding down figures. As aresult, the totals in U.S. dollars shown in the consolidated financial
statements do not necessarily agree with the sums of the individual
account balances. The U.S. dollars amounts are included solely forthe convenience of readers outside Japan and this translation should
not be construed as representation that Japanese yen amounts havebeen or could be readily converted, realized or settled in U.S. dollars
at that or at any other rates.
2. Significant Accounting Policies:(1) Principles of Consolidation
The consolidated financial statements include the accounts of the
2018
Bank and its seven consolidated subsidiaries as of March 31, 2019listed below:
Ownership
Location
Name
Name
Percentage
The Shinkin Banks Information
Tokyo
System Center Co., Ltd.
50.7%
Shinkin International Ltd.
London100%
Shinkin Chukin Business Co., Ltd.
Tokyo
100%
Tokyo
Shinkin Asset Management Co., Ltd.
100%
Shinkin Securities Co., Ltd.
Tokyo
100%
Shinkin Capital Co., Ltd.
Tokyo
100%
Tokyo
Shinkin Guarantee Co., Ltd.
100%(*) Shinkin Trust Bank, Ltd. merged with Mitsubishi UFJ Trust and Banking
Unconsolidated
subsidiaries
Corporation on September
19, 2017, and, therefore, has been excluded from
Shinkin
Kizuna Investment
Partnershipthe scope noof consolidationfrom theLimited
second quarterof the current fiscal year.

Shinkin no Tsubasa Investment Limited Partnership
Unconsolidated
subsidiaries are excluded from the scope of
Unconsolidated subsidiaries
consolidation
becausetheir total
assets,total income, net income
LimitedPartnership
Shinkin no Kizuna Investment(amount
based
on Investment
the equity Limited
method),Partnership
retained earnings (amount
Shinkin no
Tsubasabasedon the equity
method) andother thecomprehensive
Unconsolidated
subsidiaries
are accumulated
excluded fromscope ofincome(amount
based
on
the
equitymethod)areimmaterial
and doconsolidation because their total assets, total income, net income
nothinderarational
judgmentof
theBank’sfinancialconditionand(amount based on the equity method), retained earnings (amountresultsof operation
excluded
from the scopeof consolidation.
based onthe equitywhen
method)and accumulated
othercomprehensiveThefiscal year
the equity
closingmethod)date thereof
for the financial
income(amount
basedandon theare immaterial
and dostatementsoftheconsolidated
subsidiaries
areinagreement
not hinder a rational judgment of the Bank’s financial
conditionwith
and
those
Bank, except
for Shinkin
International
which has aresultsofofthe
operation
when excluded
fromthe scope ofLtd.,
consolidation.
fiscal The
yearfiscal
endedyear
on andDecember
31. Forconsolidationof thethe closing
date thethereoffor the financial
subsidiary,Bankmakes appropriate
adjustments
any material
statements theof theconsolidated
subsidiaries
are in foragreementwithtransactions
to forDecemberthose of the subsequentBank, except
Shinkin31.
International Ltd., which has afiscal year ended on December 31. For the consolidation of the
All significant intercompany accounts and transactions havebeen eliminated in consolidation. The Bank’s share of net assets ofsubsidiary, theany material
subsidiaries
is Bankvaluedmakes
at fairappropriate
value on adjustments
acquisition. forNon-controllingtransactions
31.are valued at fair value oninterests
in subsequent
net assets toof December
subsidiaries
acquisition in the consolidated financial statements. The excess of the
All thesignificant
accounts
and transactions
have
cost overfair valueintercompanyof the underlying
net equity
in subsidiaries
onbeen eliminatedin consolidation.
The Bank’s share of net assets ofacquisitionis expensed
when incurred.
subsidiaries is valued at fair value on acquisition. Minority interests
in netapplication
assets of subsidiaries
are valued
at fair value on
acquisitionandinTheof equity-method
to unconsolidated
subsidiaries
the consolidated
financial statements. The excess of the cost over theaffiliates
is as follows:
fair valueof the underlying
net equity insubsidiaries on acquisitionisNon-consolidated
equity-method
subsidiaries:
N/A
expensed
when incurred.
Affiliatedequity-method companies:
N/A
The application subsidiaries
of equity-method
to notunconsolidated
subsidiaries
andUnconsolidated
that areaccounted forby the equity
affiliates is as follows:
method:Non-consolidated
subsidiaries:
Shinkinno Kizunaequity-method
Investment Limited
Partnership N/A
Affiliatedcompanies:
Shinkinnoequity-method
Tsubasa Investment
Limited Partnership N/A
Unconsolidated subsidiaries that are not accounted for by the
Unconsolidated
subsidiaries
that areaccounted
by thebecause
equityequitymethod are
excluded fromthe not
scopeof equityfor
methodmethod:theireffect on the accompanying consolidated financial statements, inKizuna(amount
Investment
LimitedPartnershipterms Shinkinof net no
incomebasedon theequity method) and
Shinkinno Tsubasa
Limitedretainedearnings(amountInvestment
based on theequityPartnershipmethod), would not be
Unconsolidated subsidiaries that are not accounted for by thematerial.
equity method are excluded from the scope of equity method because
their effectcompanies
on the accompanying
financialstatements,inAffiliatedto which theconsolidated
equity method
is not applied
due toterms of net income (amount based on the equity method) andimmateriality:
retainedearnings
AozoraLoan(amountServicesbasedCo., onLtd.the equity method), would not bematerial.
(2) Cash and Cash Equivalents
Affiliatedcompanies tostatement
which the ofequityappliedtoIn
the consolidated
cashmethod
flows,is not“Cashand dueCashimmateriality:consist of Cash and Due from Central Bank.
Equivalents”
Aozora Loan Services
Co.,CashLtd. and Due from Banks in the
Reconciliation
betweenconsolidated balance sheet and Cash and Cash Equivalents at March(2) Cash31,
2019 and Cash2018 Equivalents
is as follows:
In the consolidated statement of cash flows, “Cash Millions
and CashofEquivalents” consist of Cash and
Due from
Central Bank.U.S. Dollars
Millionsof YenReconciliation between
Due from Banks2019
in the2019Cash and 2018
consolidated balance sheet and Cash and Cash Equivalents at March
Cash and Due from31, 2018 and 2017 is as follows:
13,346,876 12,393,632
120,285
Banks
Millions of
Due from Banks
Millions of Yen
U.S. dollars(Excluding Due(493,182)(609,925)(4,444)
2018
2017
2018
from Central Bank)
Cash and Due from
12,393,632
10,611,955
116,613
Cash
Banksand Cash
12,853,693 11,783,706
115,840
Equivalents
Due from Banks(Excluding Due(609,925)(943,615)(5,738)(3) Trading
fromCentralAssets
Bank)and Liabilities
Transactions for “Trading Purposes” (for purposes of seeking toCash andgains
Cash arising from short-term changes in interest rates,
capture11,783,706
9,668,340
110,874
Equivalents
currency
exchange rates or market prices of financial instruments andother market related indices or from gaps among markets) are(3) TradinginAssets
and Liabilities
included“Trading
Assets” and “Trading Liabilities” on theTransactions balance
for “Trading
Purposes”(for basis.
purposesof seeking
toconsolidated
sheet ona trade date
In addition,
gains
capturegains
arisingfrom Assets”
short-term
interest rates,
andlossesfrom“Trading
and changes“Tradingin Liabilities”
arecurrency exchange
rates ormarket pricesof financialLosses”
instruments
recordedas “Trading
Income”
and “Tradingon andtheother marketstatement
related ofindices
gaps
consolidated
incomeoronfrom
a tradedateamongbasis. markets) are
includedin “Trading
Assets” Claims
and “Trading
Liabilities”
on theSecurities
and Monetary
Bought fortrading purposes
consolidatedbalancea tradebasis. In addition,
gains
are
stated at fairvaluesheet
at theon
fiscalyear dateend. Trading-related
financialand losses suchfrom as“Tradingand options“TradingareLiabilities”
derivatives
swaps, Assets”
futures andstated at are
therecordedamounts
as “Trading
Income”
and or“Trading
Losses” onthedeemedthat would
be received
paid for settlement
if suchconsolidatedwere
statementof incomea tradetransactions
terminatedat theonfiscal
yeardateend.basis.
Securities and monetary debts purchased for trading purposes
are stated at fair value at the fiscal year end. Trading-related financial
derivatives such as swaps, futures and options are stated at the33

(4) Financial Instruments(i) Securities
The Bank and its consolidated subsidiaries classify securities into
three categories: held-to-maturity debt securities, investments inaffiliates that are not accounted for by the equity method, and othersecurities. Held-to-maturity debt securities are stated at cost and areamortized by the straight-line depreciation method using themoving-average method. Investments in affiliates that are notaccounted for by the equity method are stated at cost using themoving-average method. Stocks and investment trusts in othersecurities are stated based on the average quoted market price over amonth preceding the balance sheet date and others are stated at fairvalue based on quoted market prices and other applicable information
at the balance sheet date (and the cost of securities sold is mainly
determined using the moving-average method). Other securities
where there is significant difficulty in determining fair value arestated at cost using the moving-average method.
The full amount of net unrealized gains or losses on othersecurities is recorded directly within Net Assets.
Securities included as trust property in “Money Held in Trust”
are stated in the same manner as above.
(ii) Derivative Transactions
Derivative transactions are stated at fair value.
(iii) Hedge Accounting(a) Hedge of Interest Rate Risk
The Bank applies the deferred method of hedge accounting describedin the Japanese Institute of Certified Public Accountants (JICPA)
Industry Audit Committee Report No. 24, February 13, 2002
“Accounting and Auditing Treatment of Accounting Standards for
Financial Instruments in Banking Industry” to transactions to hedge
against interest rate risk arising from the financial assets andliabilities.
Effectiveness of a fair value hedge is assessed for each of theidentified group of hedged items such as loans and deposits, andcorresponding group of hedging instruments such as interest rate
swaps with the same maturity bucket. Effectiveness of a cash flow
hedge is assessed based on the correlation between an interest raterisk factor of the hedged items and that of the hedging instruments.
For certain assets and liabilities, the exceptional treatment forinterest rate swaps is applied.
(b) Hedge of Foreign Exchange Fluctuation Risk
The deferred method of hedge accounting is applied to transactions tohedge against foreign exchange fluctuation risks associated with
monetary assets and liabilities denominated in foreign currencies inaccordance with the regulations set forth in JICPA Industry Audit
Committee Report No. 25, July 29, 2002 “Accounting and Auditing
Treatment of Accounting Standards for Foreign Currency
Transactions in the Banking Industry”.
To minimize foreign exchange fluctuation risk on monetary
assets and liabilities, the Bank has engaged in currency swaps,
foreign exchange swaps, and similar transactions. Effectiveness ofthese transactions in the hedging of foreign exchange risks ofmonetary assets and liabilities denominated in foreign currencies isassessed through comparison of the foreign currency position of thehedged monetary assets and liabilities and that of the hedging
instruments.
The Bank has also applied fair value hedge accounting to theforeign exchange risk of other securities in foreign currency (otherthan bonds) when the hedged foreign currency securities are specified

34

prior to the commencement of transactions, and there exists spot andforward liabilities exceeding the acquisition costs of the foreign
currency securities designated as hedged items on a foreign currency
basis.
(c) Internal Derivative Transactions
Internal derivative transactions between trading accounts and otheraccounts, which are designated as hedges, are not eliminated andrelated gains and losses are recognized in the consolidated statementof income or deferred under hedge accounting because the internalinterest rate swaps and currency swaps transactions, etc. designated as
hedging instruments are conducted in a manner without any
subjection and are appropriately covered by third party transactions
conducted in accordance with the standard articulated by JICPA
Industry Audit Committee Reports No. 24 and No. 25.
(5) Tangible Fixed Assets (excluding Leased Assets)
Tangible fixed assets of the Bank are depreciated by the decliningbalance method. However, buildings acquired on or after April 1,
1998 (excluding facilities installed in buildings), and facilities
installed in buildings and structures that are acquired on or after April
1, 2016, are depreciated by the straight-line method.
The estimated useful lives of major items are as follows:
Buildings ................. 5 to 50 years
Others ...................... 3 to 20 years
Tangible fixed assets of consolidated subsidiaries are, in
principle, depreciated by the declining balance method, based on theirestimated useful lives.
(6) Intangible Fixed Assets (excluding Leased Assets)
Intangible fixed assets are amortized by the straight-line method. The
costs of software for internal use are amortized by the straight-line
method, mainly 5 year period (the estimated useful life of thesoftware).
(7) Leased Assets
Leased assets of Tangible Fixed Assets and Intangible Fixed Assets
related to finance leases that do not transfer ownership are
depreciated by the straight-line method with estimated useful lives
equal to lease terms, and zero residual values.
(8) Deferred Debenture Charges
Debenture charges are expensed in the fiscal year of issuance.
(9) Reserve for Possible Loan Losses
Reserve for possible loan losses of the Bank is provided inaccordance with the Bank’s predetermined internal rules forwrite-offs and provisions as follows:
The reserve for loans to borrowers who are classified as
substantially bankrupt or who are bankrupt in the legal sense isprovided at 100% of the amount remaining after write-offs anddeduction of expected collection from the realization of collateral andthe execution of guarantees. In addition, a reserve is provided forloans to borrowers who, although not actually go bankrupt in thelegal sense, are experiencing serious financial difficulties and whose
failure is imminent. In such cases, the reserve is provided at theamount deemed necessary based on the borrower’s capability of
repayment after deduction of expected collection from the realizationof collateral and the execution of guarantees.
The Bank calculates the reserve by the cash flow estimate
method to those borrowers who owe the debts classified as Loans toProbably Bankrupt Borrowers and Restructured Loans by the Bank,

whose total credit exceeds a certain amount and also the cash flow
related to collection of the principal and interests from whom can be
estimated. The cash flow estimate method is to determine the amountof reserve for possible loan losses from the gap between the amounts
calculated by discounting the cash flow by the contracted interest rateprior to restructuring of terms and conditions of loans and their bookvalues.
For all other loans, a reserve is provided based on the ratio of
historical experiences for similar type of loans for a certain period in
the past.
All claims are assessed by the Operating Related Division basedon internal rules for self-assessments of asset quality. Subsequently,
the Asset Auditing Division, that is independent from the Operating
Related Division, audits these self-assessments. The reserve isprovided based on the results of the assessments.
For loans to Bankrupt Borrowers and Substantially Bankrupt
Borrowers, amounts deemed uncollectible, which are calculated after
deduction of expected collection from the realization of collateral andthe execution of guarantees, are written off. The amount written off
was ¥355 million ($3 million) as of March 31, 2019 and ¥199 million
as of March 31, 2018.
Reserve for possible loan losses of the consolidated subsidiaries
for general claims is provided as the amounts deemed necessary
based on the default rate calculated from actual default during acertain period in the past, and for doubtful claims as the amounts
deemed uncollectible based on the assessment of each claim.
(10) Reserve for Employee Bonuses
Reserve for Employee Bonuses is set aside to pay employee bonuseswith respect to the portion of estimated bonus payments to employeesthat correspond to this fiscal year.
(11) Reserve for Directors’ Bonuses
Reserve for Directors’ Bonuses is set aside to pay directors andcorporate auditors bonuses with respect to the portion of estimatedbonus payments to directors and corporate auditors that correspond to
this fiscal year.
(12) Reserve for Directors’ Retirement Allowances
Reserve for Directors’ Retirement Allowances provided for by the
Bank is calculated based on the estimated allowances to be paid up to
the end of this fiscal year.
(13) Reserve under Specific Law
This reserve amount is calculated pursuant to Article 46-5, Paragraph
1 of the “Financial Instruments and Exchange Act” and Article 175 of
the “Cabinet Office Ordinance on Financial Instruments Business” toindemnify any losses incurred from accidents in the conduct ofmarket derivative transactions on behalf of clients.
(14) Employees’ Retirement Benefits
The Bank accounted for retirement benefit obligation based on the
projected benefit obligations. The projected benefit obligations are
attributed to periods on a benefit formula basis. The methods foramortizing prior service costs and actuarial differences are as follows:
Prior service costs:
Prior service costs are amortized, using the straight-line method overa certain number of years (10 years) within the average remaining
service period of current employees at the time the cost is incurred.

Actuarial differences:
Actuarial differences are amortized from the following year, using thestraight-line method over a certain number of years (10 years) within
the average remaining service period of current employees at eachtime the cost is incurred.
Also, certain consolidated subsidiaries calculate the net defined
benefit liability and retirement benefit cost using the simplified
method which assumes the retirement benefit obligation to be equal
to the amount necessary to pay for the voluntary resignation for all
employees at the fiscal year-end.
(15) Translation of Foreign Currency-Denominated Assets andLiabilities
Foreign currency-denominated assets and liabilities are translated into
Japanese yen at exchange rates prevailing at the end of the fiscal year.
Foreign currency-denominated assets and liabilities of consolidated
subsidiaries are translated into Japanese yen at exchange rates
prevailing at the end of the fiscal year.
(16) Consumption Tax
National and local consumption tax incurred by the Bank and its
domestic consolidated subsidiaries are excluded from transaction
amounts. However, national and local consumption tax paid onpurchases of tangible fixed assets and intangible fixed assets, which
are not deductible as a tax credit, are expensed in this fiscal year.
(17) Amortization of Goodwill
Goodwill is fully amortized in the fiscal year incurred.
(18) Accounting Standards Issued but not yet Adopted- “Accounting Standard for Revenue Recognition” (ASBJ Statement
No. 29, issued on March 30, 2018)- “Implementation Guidance on Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 30, issued on March 30, 2018)(i) Overview
This is a comprehensive accounting standard for revenue recognition.
Specifically, the accounting standard establishes the following
five-step model that will apply to revenue from customers:
Step 1: Identify the contracts with a customer
Step 2: Identify the separate performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the separate performanceobligations
Step 5: Recognize revenue when (or as) the entity satisfies a
performance obligation by transferring good or service(ii) Date of adoption
The Bank expects to adopt this implementation guidance and others
to the consolidated financial statements from the beginning of the
fiscal year beginning on April 1, 2021.
(iii) Effects of the adoption of the accounting standards and guidance
The Bank is evaluating the effect of the adoption of this
implementation guidance and others on its consolidated financial
statements.

35

3. Trading Assets:
The details of Trading Assets as of March 31, 2019 and 2018 are as
follows:
Millions of
U.S. Dollars
2019

Millions of Yen
2019
2018
Trading AccountSecurities
Trading Bonds-Related
Financial Derivatives
Derivatives of Securities
related to Trading
Transactions
Trading-Related
Financial Derivatives

42,72133,191

385

10

5

0

6

－

0

31,82436,198286

Other Trading Assets

174,023

181,029

1,568

Total

248,586

250,4242,240

4. Securities:
The details of Securities as of March 31, 2019 and 2018 are as
follows:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Japanese Government
4,797,166 6,366,353
43,233
Bonds
Municipal Government
1,087,576
811,316
9,801
Bonds
Short-Term Corporate
45,01540,008405
Bonds
4,704,289 4,349,349
42,396
Corporate Bonds
84,94673,410

Others5,864,673

5,467,997

52,853

Total

16,583,668 17,108,434

149,456

Stocks765

Notes:
1. Stocks include investments in affiliated companies totaling ¥189
million ($1 million) as of March 31, 2019 and 2018.
2. Others include common shares and investment in unconsolidated
subsidiaries totaling ¥9,181 million ($82 million) as of March 31,
2019 and ¥10,161 million as of March 31, 2018. Others also
include preferred shares issued by Shinkin Banks which were
contributed in accordance with the Shinkin Bank Management
Reinforcement System. The amount was ¥183,324 million ($1,652
million) as of March 31, 2019 and ¥202,525 million as of March
31, 2018. Others also include foreign bonds and equities.

36

5. Loans and Bills Discounted:
Loans and Bills Discounted include the following non-performing
loans:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Loans to Bankrupt
82
93
0
Borrowers
Delinquent Loans

4,351

11,227

39

36

77

0

Restructured Loans

19,87130,490179

Total

24,341

41,889219

Loans Past Due Three
Months or More

The above amounts are the amounts before exclusion of reserves forpossible loan losses.
Loans to Bankrupt Borrowers represent non-accrual loans toborrowers who are legally bankrupt as defined in Article 96,
Paragraph 1, Item 3 (a)-(e) or Item 4 of the “Order for Enforcementof the Corporation Tax Act” (Cabinet Order No. 97 of 1965).
Delinquent Loans represent non-accrual loans other than Loans
to Bankrupt Borrowers and certain Restructured Loans withmoratorium on interest payments.
Loans Past Due Three Months or More represent loans forwhich the principal and interests are past due three months or moreother than Loans to Bankrupt Borrowers and Delinquent Loans.
Restructured Loans represent loans on which contracts weremodified in favor of the borrowers (e.g. the reduction of or exemption
from stated interests, the deferral of interest payments, the extensionof maturity dates, and the renunciation of claims in order to assist or
facilitate the business restructuring of borrowers under financial
difficulties) other than Loans to Bankrupt Borrowers, Delinquent
Loans and Loans Past Due Three Months or More.
Loans include subordinated loans with a lower priority forrepayment of principal and interests than that of other debt claims.
The amount was ¥16,500 million ($148 million) as of March 31, 2019and ¥19,200 million as of March 31, 2018. Of these amounts, ¥2,000
million ($18 million) as of March 31, 2019, and ¥4,700 million as ofMarch 31, 2018, were provided to Shinkin Banks in accordance with
the Shinkin Bank Management Reinforcement System.
Bills Discounted are accounted for as financial transactions inaccordance with JICPA Industry Audit Committee Report No. 24,
February 13, 2002 “Accounting and Auditing Treatment of
Accounting Standards for Financial Instruments in Banking Industry”.
The face value of bills of lading amounted to ¥206 million ($1million) as of March 31, 2019 and ¥186 million as of March 31, 2018.
The Bank has the right to freely dispose of, sell or re-hypothecate
such bills.
With respect to loan participation, in accordance with
“Accounting and Presentation of Loan Participation” (JICPA
Accounting Committee Report No. 3, November 28, 2014), theamount of the participation principal is accounted for as a loan to theoriginal debtor, and this amounted to ¥18,067 million ($162 million)
as of March 31, 2019 and ¥22,335 million as of March 31, 2018.

6. Commitments to Overdrafts and Loans:
Commitments related to overdrafts and loans represent agreements toextend overdrafts or loans up to a pre-agreed amount at thecustomer’s request as long as there is no violation of the conditions
stipulated in commitment agreements.
The amount of unused loan commitments may not necessarily
have a significant effect on the future cash flows of the Bank because
most of these loan commitments expire without being drawn down.
Most of these agreements have provisions which stipulate that the
Bank may not extend the loan or may decrease the amount ofcommitment when there are certain changes in the financial
conditions, certain issues relating to credit protection and otherreasons. The Bank limits the commitment to an amount not exceeding
the amount of the related customer’s time deposit. The Bank
periodically checks the financial condition of its customers based on
its internal rules and performs certain actions to secure loans orrevises the contracts, as necessary.
The amounts of unused loan commitments are ¥25,277,846
million ($227,810 million) as of March 31, 2019 and ¥24,111,394
million as of March 31, 2018.
The amounts which the Bank could unconditionally cancel at
any time or of which the original contractual maturity is less than one
year are ¥25,163,792 million ($226,782 million) as of March 31,
2019 and ¥24,028,554 million as of March 31, 2018.

7.

Special Contracts for Securities and Cash-Collateralized
Securities Lending and Borrowings:
Securities lending based on non-collateralized special contracts(securities lending and borrowings) are stated as Japanese
Government Bonds in “Securities”. The amount in total was ¥349,299
million ($3,147 million) as of March 31, 2019 and ¥397,919 million
as of March 31, 2018.
Of repurchase agreement and cash-collateralized securities
borrowings, those freely disposable for sale or re-hypothecated, andpledged as collateral amounted to ¥538 million ($4 million) as ofMarch 31, 2019 and ¥219 million as of March 31, 2018. Those heldby the Bank without being disposed of as of March 31, 2019
amounted to ¥55,630 million ($501 million) and as of March 31,2018 amounted to ¥131,192 million.
8.

Tangible Fixed Assets:
Millions of Yen
2019
2018

Accumulated Depreciation
on Tangible Fixed Assets
Accumulated Deferred
Gains on Tangible Fixed
Assets(Deferred Gains recognized
for the fiscal year)

Millions of
U.S. Dollars
201993,113

95,680

839

1,764

1,764

15

(－)

(－)

(－)

9. Assets Pledged as Collateral and Associated Liabilities:
Assets pledged as collateral for the fiscal years ended March 31, 2019and 2018 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Assets Pledged as Collateral
Trading Assets

13,036

16,722

117

3,991,073

3,395,029

35,968Loans and Bills Discounted 1,421,820

1,717,394

12,813

Total

5,425,930

5,129,146

48,8991,804,700

1,248,300

16,264

98,373

1,376

1,788,791

16,077

Securities

Liabilities associated with
Assets Pledged as Collateral
Borrowed Money

Payables under Repurchase
152,777
Agreements
Payables under Securities
1,784,010
Lending Transactions

Trading Assets of ¥501 million ($4 million) as of March 31, 2019 and¥1,203 million as of March 31, 2018 and Securities in the amount of¥154,011 million ($1,387 million) as of March 31, 2019 and¥125,123 million as of March 31, 2018, were secured as collateral for
exchange settlement transactions, etc. or as substitute for margin in
futures transactions, etc.
Other assets include Guarantee Money, Cash Collateral Pledged
for Financial Instruments, Clearing Margin Deposits for Central
Counterparty, and Cash Collateral Pledged for Repurchase
Agreement. The amounts are as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Guarantee Money
Cash Collateral
Pledged for Financial
Instruments
Clearing Margin
Deposits for Central
Counterparty
Cash Collateral
Pledged for
Repurchase
Agreement

328

335

2

182,652

170,786

1,646

700,000

684,438

6,308

500

－

4

10. Trading Liabilities:
The details of Trading Liabilities as of March 31, 2019 and 2018 are
as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Trading Bonds Sold

23,597

12,753212

Trading-Related Financial
Derivatives

48,56853,882

437

Total

72,16566,636650

37

11. Borrowed Money and Lease Obligations:
Balance as of
Category
April 1, 2018
(Millions of Yen)
1,637,770
Borrowings

Balance as ofMarch 31, 2019
(Millions of Yen)
1,967,180

1,637,770

1,967,180

17,728

0.09

813

812

7

0.92

－

559

756

6

2.39

May 2020Jan. 2025

Borrowed Money
Lease Obligations Due for Repayment
within One Year
Lease Obligations (Excluding Those
Due for Repayment within One Year)

Balance as of
Average
March 31, 2019
Interest Rate (%)(Millions of U.S. Dollars)
17,7280.09

Maturity－
July 2019Mar. 2029

Notes:
1. Average interest rates were computed by the weighted average method using the interest rates and the balances at the fiscal year-end.
2. The repayment schedule within 5 years after the balance sheet date is as follows:
Millions of Yen
Over 1 year,
Over 2 years,
Over 3 years,
Over 4 years,
Within 1 year
within 2 years
within 3 years
within 4 years
within 5 years
134,300
468,000
646,000
556,400－
Borrowed Money
812
231
232
135
118
Lease Obligations

Within 1 year

Millions of U.S. Dollars
Over 1 year,
Over 2 years,
Over 3 years,
within 2 years
within 3 years
within 4 years

Over 4 years,
within 5 years

1,210
4,217
5,821
5,014
－
Borrowed Money
7
2
2
1
1
Lease Obligations
3. Borrowed Money includes subordinated borrowings of ¥162,480 million ($1,464 million) as of March 31, 2019 and ¥389,470 million as ofMarch 31, 2018.

12. Debentures:
IssuerThe Bank

The Bank

The Bank
Total

Name of Issue

No. 281-352
5-yearInterest-bearing
debentures
No. 2
7-yearInterest-bearing
debentures
No. 2
10-yearInterest-bearing
debentures－

Balance as of Balance as of Balance as ofApril 1,March 31,
March 31,
2018
2019
2019
(Millions of (Millions of (Millions of
Yen)
Yen)
U.S. Dollars)

CouponRate (%)

Collateral

Redemption
Date

Apr. 2013Mar. 2019

2,675,490

2,454,300

22,1180.010.40－

Apr. 2018Mar. 2024

Sep. 25, 2015

10,00010,000

90

0.29

－

Sep. 27, 2022

Sep. 25, 2015

20,00020,000

180

0.52

－

Sep. 26, 2025－

2,705,490

2,484,300

22,389

－

－

－

Note:
The redemption schedule within 5 years after the balance sheet date is as follows:
Millions of Yen
Over 1 year,
Over 2 years,
Over 3 years,
Within 1 year
within 2 years
within 3 years
within 4 years
637,930
598,460
476,330
351,650

Over 4 years,
within 5 years
399,930

Millions of U.S. Dollars
Over 2 years,
Over 3 years,
within 3 years
within 4 years
4,292
3,169

Over 4 years,
within 5 years
3,604

Within 1 year
5,749

38

Issuance Date

Over 1 year,
within 2 years
5,393

13. Asset Retirement Obligations:
The details of Asset Retirement Obligations were omitted because theamount was one-hundredth or less of the total balance of Liabilities
and Net Assets as of April 1, 2018 and as of March 31, 2019.

14. Land Revaluation:
Based on the “Act on the Revaluation of Land” (Act No. 34,
promulgated on March 31, 1998), land used for business was revalued.
Deferred tax on the revaluation of the land was recorded as “Deferred
Tax Liabilities for Land Revaluation” under Liabilities, and unrealized
gain on the revaluation of the land, net of deferred tax, was recorded as“Land Revaluation Excess” under Net Assets.
Date of Revaluation: March 31, 1999
Revaluation method in accordance with Article 3, Paragraph 3 of Act
No. 34: Revaluations were made based on the method, determined by
the Commissioner of the National Tax Administration, which formed
the basis for calculating land value taxes (prescribed by the “Land
Value Tax Law”), as set forth in Article 2, Item 4 of the “Order for
Enforcement of the Act on Revaluation of Land” (Government
Ordinance No. 119, dated March 31, 1998), with appropriate
adjustments.

15. Trusts with contracts:
The details of principal amounts of trusts with contracts forcompensation of principal for the fiscal years ended March 31, 2019and 2018 are as follows:
Millions of
U.S. Dollars
Millions of Yen
2019
2018
2019
Money Trust
123
13,724
5,054

16. Fees and Commissions:
The details of Fees and Commissions for the fiscal years ended March
31, 2019 and 2018 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Deposit, Fixed Income
517
533
4
Securities and Lending
400
412
3
Exchange Business
9,505
9,371
85
Securities Related Business
2,128
2,156
19
Agency Business
10,705
10,376
96
Guarantee Business
19,691
19,395177
Trustee Business
721
534
6
OthersIncome on Fees and43,67042,779393
Commissions Businesses
221
223
1
Exchange
15,537
15,163140
OthersExpenses on Fees and15,75815,386
142
Commissions Businesses

17. Trading Income:The details of Trading Income for the fiscal years ended March 31,
2019 and 2018 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
Income from Trading
Account Securities
Income from
Trading-Related Securities
Income from
Trading-Related Financial
Derivatives
Other Trading Income
Total

2018

2019

351

303

3

－

－

－

3,690

3,579

33

36
4,078

21
3,904

0
36

18. Trading Losses:
The details of Trading Losses for the fiscal years ended March 31,
2019 and 2018 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
Expenses from
Trading-Related Securities
Total

2018

2019

316

133

2

316

133

2

19. Other Income:The details of Other Income for the fiscal years ended March 31, 2019and 2018 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Gains on Sale of Stocks and
5,259
10,37547
Other Securities
Gain on Sales of Shares of
Subsidiaries
Reversal of Allowance for Loan
LossesOthers
Total

－

2,200

－

12,727

2,341

114

117
18,104

5
14,922

1
163

20. Other Expenses:
The details of Other Expenses for the fiscal years ended March 31,
2019 and 2018 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2019
2018
2019
Losses on Sale of Stocks and
471
752
4
Other Securities
Impairment Losses on Fixed
Assets (*)

1,567

60

14

Others

156

250

1

Total

2,195

1,063

19

39

(*) Impairment losses on fixed assets:
Each business location such as head office, the assets used in the head office, facilities for employee welfare and branch office are the smallest
unit of asset group. Each consolidated subsidiary is treated as a single unit for the asset grouping.
Certain facilities and other assets are designated to be disposed due to obsolescence or other factors. The carrying amount is reduced to therecoverable amount and the reduction amount is recorded as impairment losses as below. The recoverable amount used for measurement of
impairment losses is the net selling value and this is derived from real estate appraisal value and others.
For the fiscal year ended March 31, 2019
Location

Principal Use

Category

Kanagawa Prefecture, and others

EmployeehousingLand and buildings

Millions ofMillions of

Yen

U.S. Dollars
1,567

14

For the fiscal year ended March 31, 2018
Data omitted due to immateriality.
21. Consolidated Statement of Comprehensive Income:For the fiscal years ended March 31, 2019 and 2018
Reclassification adjustment amount and tax effect amount related to Other Comprehensive Income
Millions ofMillions of Yen
2019

U.S. Dollars
2018

2019

Net Unrealized Gains (Losses) on Other Securities:
The Amount Arising during the Period

33,048(99,316)

Reclassification Adjustment Amount368

31,137297
3

Prior to Tax Effect Adjustment

33,416(68,179)

301

Tax Effect Amount(9,542)

19,057(86)

Net Unrealized Gains (Losses) on Other Securities

23,874(49,122)215(65,666)(6,565)(591)

Reclassification Adjustment Amount

43,02237,648387

Prior to Tax Effect Adjustment(22,643)

31,082(204)

Deferred Gains or Losses on Hedges:
The Amount Arising during the Period

Tax Effect Amount

6,315(8,681)

56(16,328)

22,401(147)

The Amount Arising during the Period

－

－

－

Reclassification Adjustment Amount

－

－

－

Prior to Tax Effect Adjustment
Tax Effect Amount

－
13

－
0

－
0

Land Revaluation Excess

13

0

0

The Amount Arising during the Period

(534)

398

(4)

Reclassification Adjustment Amount

－

－

－

Prior to Tax Effect Adjustment

－

－

－

Tax Effect Amount

－

－

－

(534)

398

(4)

Deferred Gains or Losses on Hedges
Land Revaluation Excess:Foreign Currency Translation Adjustments:

Foreign Currency Translation Adjustments
Remeasurements of Defined Benefit Plans:

40

The Amount Arising during the Period

(609)

494

(5)

Reclassification Adjustment Amount

1,802

1,976

16

Prior to Tax Effect Adjustment

1,193

2,470

10

Tax Effect Amount

(344)

(708)

(3)

Remeasurements of Defined Benefit Plans

848

1,762

7

Other Comprehensive Income

7,873(24,559)70

22. Changes in Net Assets:(1) Class and Number of Shares Outstanding, and Class and Number of Shares of Treasury Shares
Number of Share Units at
Number of Share Units at
Increase During the Fiscal Decrease During the Fiscal
March 31, 2019
April 1, 2018 (Thousand
Year (Thousand Units)
Year (Thousand Units)(Thousand Units)
Units)
Shares Outstanding
General Common Shares

4,000

－

－

4,000

Specific Common Shares

2,000

－

－

2,000

Preferred Shares (Type-A)

708

－

－

708

6,708

－

－

6,708

General Common Shares

－

－

－

－

Specific Common Shares

－

－

－

－

Preferred Shares (Type-A)

－

－

－

－

－

－

－

－

Total
Treasury Shares

Total(2) Dividends
Dividends paid during the fiscal year ended March 31, 2019
Resolution

Annual General Meeting of
Shareholders, June 20, 2018

Class of ShareTotal Dividend
Amount (Million Yen)

Amount Per Share(Yen)

Record Date

Effective Date

GeneralCommon Shares

12,0003,000

March 31, 2018

June 20, 2018

Specific
Common Shares

3,000

1,500

March 31, 2018

June 20, 2018

Preferred Shares(Type-A)

4,603

6,500

March 31, 2018

June 20, 2018

Among the dividends whose record date falls within the fiscal year ended March 31, 2019, those whose effective date will fall within thefollowing fiscal year:
Resolution

Annual General Meeting of
Shareholders, June 19, 2019

Class of ShareTotal Dividend
Amount (Million Yen)

Resource ofDividends

Amount Per Share(Yen)

Record Date

Effective Date

GeneralCommon Shares

12,000Retained Earnings

3,000

March 31, 2019 June 19, 2019

Specific
Common Shares

3,000

Retained Earnings

1,500

March 31, 2019 June 19, 2019

Preferred Shares(Type-A)

4,603

Retained Earnings

6,500

March 31, 2019 June 19, 201941

23. Income Taxes:(1) Breakdown of Deferred Tax Assets and Liabilities is as follows:
Millions ofMillions of Yen
U.S. Dollars
2019

2018

2019

Depreciation

2,949

2,907

26

Reserve for Possible Loan
Losses

1,701

5,558

15

Net Defined Benefit Liability

12,257

12,004

110

Write-Downs for Securities

1,458

1,482

13

Deferred Gains or Losses on
Hedges25,80919,494

232

－

2

－

Others

4,105

3,137

37

Valuation Allowances(3,212)(3,210)(28)

Total Deferred Tax Assets

45,07041,377406

Net Unrealized Gains on Other(124,809) (115,268)
Securities(1,124)

Deferred Tax Assets:

Tax Loss Carryforwards

Deferred Tax Liabilities:

Others

(445)

(435)

(4)

Total Deferred Tax Liabilities(125,254) (115,703)(1,128)Net Deferred Tax Liabilities(80,184)(74,326)(722)(3) Amendments to the amounts of deferred tax assets and deferred
tax liabilities owing to the changes in corporate tax rates
The “Act for Partial Amendment of the Local Tax Act, etc.” (Act No.
2 of 2019) is enacted on March 27, 2019, and the rate of corporate
enterprise tax was reduced as a special corporate enterprise tax is tobe established in the fiscal year beginning on or after October 1,
2019. As a result, the effective statutory tax rate used to measure theBank’s deferred tax assets and liabilities, relating to the temporary
differences expected to be reversed in the fiscal year beginning April
1, 2020 onwards and is changed from 27.93% to 27.92%.
There is no significant impact on the consolidated financial
statements as a result of this change of tax rate.

24. Retirement Benefit Plans:(1) Retirement Benefit Scheme
The Bank and some of its consolidated domestic subsidiaries have adefined benefit plan that offers lump-sum payments upon retirement
and contributes to the Employees’ Pension Fund for all shinkin banks
nationwide.
With regard to notes related to employees’ retirement benefits
based on a multiple-employer plan, they are included in notes related
to employees’ retirement benefits based on a defined benefit plan.
(2) Defined Benefit Plan as of March 31, 2019 and 2018 is asfollows:(i) Reconciliation of beginning- and end-of-period balance ofRetirement Benefit Obligation
Millions ofMillions of Yen
U.S. Dollars
2019

2018

2019

(2) Reconciliation between the effective statutory tax rate and theactual effective tax rate for the fiscal years ended March 31, 2019 and
2018:
2019
2018

Retirement Benefit
Obligation at Beginningof Period

64,36663,454580

Service Cost

2,972

3,013

26

Statutory effective tax rate

Interest Cost

247

244

2

Actuarial Difference
Incurred

(478)

(568)

(4)

(1,781)(1,777)(16)

27.92 %

－ %(Adjustments)
Change in Valuation Allowances

0.00 %－ %Retirement Benefits Paid

Dividends received, not taxable(1.01 %)－ %Prior Service Cost

－

－

－

Others(0.63 %)

－ %

Other

－

－

－

Actual effective income tax rate after
the application of tax effect accounting

26.28 %

－ %65,32564,366588

Note:
In the previous fiscal year, since the difference between the statutory
effective tax rate and the actual effective income tax rate after theapplication of tax effect accounting was less than 5% of the statutory
effective tax rate, notes on this are omitted.

42

Retirement Benefit
Obligation at End of
Period(ii) Reconciliation of beginning- and end-of-period balance ofPension Plan Assets
Millions ofMillions of Yen
U.S. Dollars
Balance of Pension Plan
Assets at Beginning of
PeriodExpected Return on
Pension Plan Assets
Actuarial Difference
IncurredContributions by the
Employer and Employees
Retirement Benefits Paid

2019

2018

22,841

21,929

205

685

438

6

(1,088)

(74)

(9)

1,499

1,491

(1,018)

2018

2019

Service Cost

2,972

3,013

26

Interest Cost

247

244

2

(438)

(6)

1,802

1,976

16

－

－

－

13

Other

(556)

(548)

(5)

(944)

(9)

3,780

4,247

34

－

－

－

Retirement Benefit
Expenses Related toDefined Benefit Plan

22,91922,841

206

2019

2018

Funded Plan Retirement
Benefit Obligation

53,86653,018485

Pension Plan Assets(22,919)(22,841)

30,946
11,45942,4062019

Note:
Other includes the employee contribution amount to the Employees’
Pension Fund.
(v) Remeasurements of Defined Benefit Plan
Remeasurements of Defined Benefit Plan (before tax effects)
comprise the following.
Millions ofMillions of Yen
U.S. Dollars
2019

2018

2019

Prior Service Cost

－

－

－

(206)

Actuarial Differences

1,193

2,470

10

30,177

278

Other

－

－

－

11,347

103

Total

1,193

2,470

10

41,525382

Millions of
U.S. Dollars

Millions of Yen
2019

2018

42,406

41,525382

Net Defined Benefit Asset

－

－

－

Net Amount of Liabilities
and Assets Presented on
the Consolidated Balance
Sheet42,406

41,525382

Net Defined Benefit
Liability

2019

(685)

(iii) Reconciliation of end-of-period balance of Retirement Benefit
Obligation and Pension Plan Assets with Net Defined Benefit
Liability and Net Defined Benefit Asset presented on the consolidatedbalance sheet
Millions ofMillions of Yen
U.S. Dollars

Unfunded Plan Retirement
Benefit Obligation
Net Amount of Liabilities
and Assets Presented on
the Consolidated Balance
Sheet

Millions of
U.S. Dollars

Millions of Yen

Expected Return on
Pension Plan Assets
Amortization ofActuarial Differences
Amortization of Prior
Service Cost

Other
Balance of Pension Plan
Assets at End of Period

2019(iv) Breakdown of Retirement Benefit Expense

2019(vi) Accumulated Remeasurements of Defined Benefit Plan
Accumulated Remeasurements of Defined Benefit Plan (before tax
effects) comprise the following.
Millions ofMillions of Yen
U.S. Dollars
2019
UnrecognizedPrior Service Cost
Unrecognized
Actuarial Differences

2018

2019

－

－

－

10,47911,673

94

Other

－

－

－

Total

10,47911,67394

43

(vii) Pension Plan Assets(a) The ratios by main asset categories in total pension plan assets are
as follows:
2019
2018
Bonds

63 %

62 %

Stocks27 %27 %Cash and Deposits

7%

8%

Other

3%

3%

Total

100 %

100 %

(b) Method for setting the Expected Long-Term Rate of Return
To set the Expected Long-Term Rate of Return on Pension Plan
Assets, the Bank takes into account past return performance and thecurrent and future expected rate of return on the diverse range ofassets that makes up the pension assets.
(viii) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2019 and2018 are as follows:

Discount Rate
Expected Long-Term Rate of
Return on Pension Plan Assets
Estimated Rate of Salary
Increase

2019

2018

0.0～0.6 %0.0～0.6 %

3.0 %

2.0 %

0.0～7.4 %0.0～7.4 %25. Leases:
1. Finance Leases(1) Finance leases that do not transfer ownership(i) Outline of lease assets(a) Tangible fixed assets
Hardware related to computer equipment(b) Intangible fixed assets
Software related to computer equipment(ii) Lease asset depreciation method
Depreciation method is described in the “Significant Accounting
Policies”.
(2) Finance leases that do not transfer ownership accounted for inaccordance with the ordinary lease transaction method
Data omitted due to immateriality.
2. Operating Leases
Future lease payments related to non-cancelable operating leases:
Data omitted due to immateriality.

44

26. Financial Instruments:
1. Matters concerning financial instruments(1) Policies on financial instruments
Shinkin Central Bank Group (the “Group”) works to ensure the stable
funding through the acceptance of deposits mainly from its Shinkin
Bank members and through the issuance of debentures. Additionally,
the Group takes steps to diversify its funding methods by procuring
funds from short-term money markets depending on market
conditions.
Procured funds are invested in short-term money market
instruments, marketable securities, and loans.
Moreover, the Group uses derivative transactions for the
purpose of risk-hedging in ALM (asset liability management)
activities and engages in short-term trading of securities andderivatives.
To appropriately manage the various risks that result from thesefinancial instruments, the Group engages in ALM activities including
the above-mentioned derivative transactions. For its trading activities,
the Group establishes risk limit and loss cut limits amounts andengages in transactions within the scopes of these risk limits, as a way
to maintain a financial soundness and to ensure stable earnings.
(2) Types and related risks of financial instruments
Financial assets held by the Group consist mainly of short-term funds,
securities, and loans assets.
Short-term funds are invested in the call loan.
These investments are exposed to the counterparty credit risk,
and market risks such as interest rate risk and foreign currency
exchange risk.
Securities portfolios of the Group consist of domestic securities
including Japanese government bonds (JGBs), corporate bonds andother bonds as well as foreign securities such as government bonds,
government-guaranteed bonds, and agency bonds issued in the majorindustrialized countries. The Group also invests in equity securities
and investment funds to diversify its portfolio.
These investments are exposed to the individual issuers’ credit
risk as well as market risks such as interest rate risk, price fluctuation
risk, and foreign currency exchange risk, and market liquidity risk.
Loans assets consist of direct loans to low-risk borrowers
including Shinkin Banks, central and local governments, public
service corporations, good standing domestic and overseas companies,
and agency loans provided through Shinkin Banks.
These loans are exposed to counterparty credit risk, and market
risks such as interest rate risk and foreign currency exchange risk.
Meanwhile, financial liabilities of the Group consist mainly of
deposits and debentures.
Deposits include current deposits, ordinary deposits, deposits at
notice, term deposits, and foreign currency-denominated deposits,
most of which are deposits from Shinkin Bank members.
These deposits are exposed to market risks such as interest raterisk and foreign currency exchange risk, and liquidity risk.
As a debenture issuer, the Group issues interest-bearing
debentures.
These debentures are exposed to interest rate risk and liquidity
risk.
Furthermore, the Group engages in derivative transactions.

Specifically, the Group trades interest rate derivatives (interest
swaps, interest futures, and interest options), currency derivatives(foreign currency forwards and currency swaps) and bond derivatives(bond futures and bond futures options).
These transactions are exposed to counterparty credit risk, andmarket risks such as interest rate risk and foreign currency exchangerisk.
The Bank hedges market risks of its financial assets andliabilities through ALM activities.
The Group partially avoids exposure to market risks by
mitigating (i) interest rate risk through interest rate swaps and(ii) foreign currency exchange risk of foreign currency-denominatedassets through foreign currency-denominated funding, currency
swaps, and forex swaps.
Hedge accounting is applied to risk hedging through ALM
activities including the use of derivatives. With regard to hedge
accounting, hedging instruments, hedged items, hedging policies, andmethods of hedge effectiveness assessment, etc. are described in the“Significant Accounting Policies”.
(3) Risk management frameworks of financial instruments
The basic policies for risk management of the Bank are broadly
divided into “risks to be minimized” and “risks to be controlled”.
Credit risk, market risks, and liquidity risks fall into the latter
category. Both categorized risks are managed by risk management
divisions that are independent of the client service divisions. The Risk
Management Division comprehensively manages these risks.
<Integrated risk management>
For the integrated management of risks, the Bank has introduced
integrated risk management for quantifiable risks. Integrated risk
management is a risk management method of measuring various risks
using a uniform risk measure such as Value at Risk (VaR),
aggregating the measurements, and comparing the aggregatedamounts with the Bank’s capital. The Bank measures credit risks andmarket risks using VaR methodology, and monitors this on a daily
basis to prevent risk limits from being breached.
These risk limit amounts are reviewed each fiscal year by the
Risk Management Committee and determined at the Executive
Committee. The values of risk are measured weekly by the Risk
Management Division, which takes steps to prevent any of thevarious risk limits from being breached, and through the Risk
Management Committee, reports regularly to the management andrelevant divisions.
The values of risk at consolidated subsidiaries are aggregatedand managed through the integrated risk management framework.
(i) Credit risk management
For the accurate identification and strict management of credit risk,
the Bank has established credit risk management policies. Moreover,the Bank has created a structure in which divisions responsible for
credit control, credit management and credit assessment are clearly
segregated from divisions involved in client services, with mutuallyindependent tasks to ensure effective internal checking functions.
The Bank established the Credit Committee and the Risk
Management Committee, comprised of senior management and headsof divisions related to credit risk, as bodies to deliberate and makedecisions on matters relating to credit risk management. The Credit
Committee deliberates on credit transactions that exceed the credit

limit, while the Risk Management Committee deliberates on theestablishment and the review of policies regarding credit management.
The Executive Committee deliberates and makes decisions on mattersrelated to asset self-assessments including the results of asset
self-assessments, asset write-offs and asset reserve provisions.
Divisions responsible for credit control manage the credit riskfor each borrower relating to loans and market trading activities. An
overall credit limit is set for each borrower according to the credit
rating of the borrower. These divisions analyze the Bank’s overall
credit portfolio according to credit rating, industry, country and othercriteria. These analyses are used to monitor the diversification of
credit risk as well as changes in portfolio credit risk. Additionally,
divisions responsible for credit control quantify credit risk in VaR
methodology using Monte Carlo simulation methods and manage
credit risks based on the limits set at the Executive Committee.
Divisions responsible for credit management accurately monitor
each borrower’s financial condition, the purposes for which funds areused and repayment resources. In addition to appropriate assessment
and post-transaction management, these divisions continually check
whether the client service divisions are conducting appropriate credit
control, and provide guidance as necessary.
Divisions responsible for credit assessment undertake andmanage operations relating to asset self-assessments, and thecalculation of asset write-offs and asset reserve provisions.
Credit risks of consolidated subsidiaries are added to the credit
risk of the Bank by each borrower and monitored.
(ii) Market risk management
To maintain an accurate understanding of market risk and rigorously
manage this risk, the Bank has issued a market risk management
policy. Furthermore, divisions responsible for market risk
management are clearly separated from divisions involved in market
operations, providing a risk management structure in which internal
checks are maintained through independent functions.
The Bank has established the ALM Committee as the body
responsible for deliberating and making decisions on matters relating
to market risk management. The ALM Committee is comprised ofsenior management and heads of divisions related to market risk.
Based on risk status information—obtained via reports from divisions
responsible for market risk management and other sources—the ALM
Committee deliberates broadly and in a timely manner ALM related
policies and market transactions including the Bank’s fund-raisingand management as well as the usage of hedging transactions
involving derivatives such as interest rate swaps.
Divisions responsible for market risk management quantify andmanage market risk mainly by VaR within the limit set by the
Executive Committee. In addition, market risk is classified into
several categories, and the amount of risk for each category ismonitored. Market risk management at the Bank not only uses VaR
methodology but takes multi-faceted approaches, that is, monitoring
sensitivity to change in individual risk factors such as the basis pointvalue (BPV: the amount of the change in a portfolio’s market value
from a specific change in the interest rate), stress loss amounts from
unexpected market changes, and appraisal losses from financial
instruments. For stress loss amounts, in particular, a supplementary
framework has been incorporated into the integrated risk management,in addition to the above monitoring system. In this way, market risks

45

including those that cannot be captured through VaR methods alone
are managed.
Moreover, for trading operations, clear regulations are in placeconcerning the trading instruments and trading management methods,
enabling appropriate trading operations by setting specific loss cut
limits.
Market risks of consolidated subsidiaries are not directly added
to the values of market risk of the Bank but are managed separately
under integrated risk management.
<Quantitative information on market risk>(a) Financial instruments held for trading purposes
The Bank uses VaR analysis for quantifying market risk of trading
securities held within securities and interest-rate andforeign-exchange instruments held for trading purposes withinderivative transactions. The VaR model is based on the delta method
and uses a 99.0% confidence interval, a holding period of fivebusiness days and an observation period of one year. In addition, withregard to market risk related to trading operations at consolidated
subsidiaries, which is managed separately within the integrated risk
management framework, the Bank uses a market risk-equivalentamount under the regulations on banks’ capital ratio.
The market risk amount (estimated loss amount) of the Bank’s
trading operations was ¥67 million ($0 million) as of March 31, 2019and ¥167 million as of March 31, 2018, and the market risk amount(estimated loss amount) of the trading operations of the Bank’s
consolidated subsidiaries was ¥922 million ($8 million) as of March
31, 2019 and ¥871 million as of March 31, 2018.
The Bank conducts back testing to compare VaR calculatedusing the model with actual loss amounts. Based on the results ofback testing covering the fiscal year ended March 31, 2019, the actual
loss amount exceeded the VaR calculated losses on three occasions,and the Bank believes that the measurement model it uses has anadequate level of accuracy to capture market risk. However, it should
be noted that VaR measures the amount of market risk at certain
probability levels statistically calculated based on historical market
fluctuation. Hence, there may be cases where market risk cannot be
captured in situations where market conditions change
unprecedentedly.
(b) Financial instruments other than those held for trading purposes
The Bank uses VaR analysis for quantifying market risk of due frombanks, securities not held for trading purposes, loans and bills
discounted, deposits, debentures, payables under securities lendingtransactions and, within derivative transactions, interest-rate andforeign-exchange instruments not held for trading purposes. The VaRmodel is based on the delta method and uses a 99.0% confidence
interval, a holding period of one year and an observation period offive years. In addition, with regard to market risk at consolidated
subsidiaries related to operations other than trading operations, which
is managed separately within the integrated risk management
framework, such risk is calculated in accordance with methods usedby the Bank.

46

The Group’s market risk amount (estimated loss amount) otherthan for trading purposes was ¥327,326 million ($2,949 million) as ofMarch 31, 2019 and ¥316,153 million as of March 31, 2018. The
Bank conducts back testing to compare VaR calculated using themodel with actual loss amounts, and believes that the measurement
model it uses has an adequate level of accuracy to capture market risk.
However, it should be noted that VaR measures the amount of market
risk at certain probability levels statistically calculated based on
historical market fluctuation. Hence, there may be cases where
market risk cannot be captured in situations where market conditions
change unprecedentedly.
(iii) Liquidity risk management related to fund-raising
For the accurate identification and strict management of liquidity risk,
the Bank has established liquidity risk management policies.
Divisions responsible for liquidity risk management are clearly
separated from divisions involved in cash management and market
operations, allowing internal checks to be maintained through theindependent functions. In addition, the ALM Committee deliberates
and makes decisions on matters relating to liquidity risk management.
Methods used for managing liquidity risk include the setting
and daily monitoring of risk limit amounts relating to the gap between
cash receipts and payments. This is carried out for individual
currencies and periods. In the event that a significant liquidity riskarises, the Bank has preparations to respond rapidly, including thesecuring of funding sources.
The liquidity risk management frameworks created by the Bank
include subsidiaries as well, by providing overdraft facilities forconsolidated subsidiaries with operations involving fund movements
in relatively large amounts.
(4) Supplementary explanation concerning the fair values of financial
instruments
Fair values of financial instruments, in addition to values based onmarket prices, also include values based on reasonable estimates ifmarket prices are unavailable. Since value estimates are predicated on
certain assumptions, values may vary if the underlying assumptions
change.

2. Fair value of financial instruments (and other information)
Carrying values stated on the consolidated balance sheet, fair value and differences between them are as follows. Unlisted stocks and similar
items with significant difficulty in determining fair value are not included in the table below. (See Note 2.)
Immaterial items have been omitted.
As of March 31, 2019
Millions of Yen
Carrying Value

Fair Value

Difference(1) Cash and Due from Banks

13,346,876

13,346,889

12(2) Bills Bought and Call Loans

765,887

765,887－(3) Receivables under Resale Agreements

39,99939,999－(4) Receivables under Securities Borrowing Transactions

23,22923,229－(5) Monetary Claims Bought (*1)

221,725

221,732

7

Trading Securities

216,744

216,744－(7) Money Held in Trust

150,317150,317－546,171627,223

81,051

15,829,599

15,829,599－

7,011,721

7,059,621

47,899Total Assets

38,152,272

38,281,243

128,971(1) Deposits

30,941,297

30,942,413

1,116(2) Debentures

2,484,300

2,489,550

5,250

23,597

23,597－(6) Trading Assets(8) Securities
Held-to-Maturity Debt Securities
Other Securities(9) Loans and Bills Discounted
Reserve for Possible Loan Losses (*1)

7,038,785(27,064)(3) Trading Liabilities
Trading Bonds Sold
(4) Borrowed Money

1,967,180

1,975,337

8,157(5) Bills Sold and Call Money37,87837,878－(6) Payables under Repurchase Agreements

152,777

152,777－(7) Payables under Securities Lending Transactions

1,784,546

1,784,546－

Total Liabilities

37,391,577

37,406,102

14,524

To which Hedge Accounting is not applied(2,811)(2,811)－

To which Hedge Accounting is applied(94,109)(168,543)(74,433)(96,920)(171,354)(74,433)

Derivatives (*2)

Total Derivatives

47

Millions of U.S. Dollars
Carrying Value

Fair Value

Difference(1) Cash and Due from Banks

120,285

120,2850(2) Bills Bought and Call Loans

6,902

6,902

－

(3) Receivables under Resale Agreements

360

360

－

(4) Receivables under Securities Borrowing Transactions

209

209

－

1,998

1,998

0

Trading Securities

1,953

1,953

－

(7) Money Held in Trust

1,354

1,354

－

4,922

5,652

730

142,660

142,660－

63,623431(5) Monetary Claims Bought (*1)
(6) Trading Assets(8) Securities
Held-to-Maturity Debt Securities
Other Securities(9) Loans and Bills Discounted
Reserve for Possible Loan Losses (*1)

63,435(243)
63,191

Total Assets

343,838

345,000

1,162(1) Deposits

278,850

278,860

10(2) Debentures

22,38922,436

47

212

212

－

17,72817,802

73

341

341

－

(3) Trading Liabilities
Trading Bonds Sold
(4) Borrowed Money(5) Bills Sold and Call Money(6) Payables under Repurchase Agreements

1,376

1,376

－

(7) Payables under Securities Lending Transactions

16,082

16,082－

Total Liabilities

336,982

337,113130

To which Hedge Accounting is not applied

(25)

(25)

－

To which Hedge Accounting is applied(848)(1,518)

(670)

(873)

(1,544)(670)

Derivatives (*2)

Total Derivatives*1. General and specific reserves for possible loan losses of Loans and Bills Discounted have been deducted. Loss reserves for Monetary
Claims Bought are immaterial and have therefore been deducted directly from the carrying value.
*2. Derivative transactions stated in trading assets and liabilities, and other assets and liabilities are shown as a single amount.
For net claims and obligations derived from derivative transactions, net amounts are stated. Sums that represent net obligations areshown in parenthesis.

48

As of March 31, 2018
Millions of Yen
Carrying Value

Fair Value

Difference(1) Cash and Due from Banks

12,393,632

12,393,641

8(2) Bills Bought and Call Loans

413,259

413,259－(3) Receivables under Resale Agreements

89,99989,999－(4) Receivables under Securities Borrowing Transactions

15,34015,340－(5) Monetary Claims Bought (*1)

177,356

177,3593

Trading Securities

214,220

214,220－(7) Money Held in Trust

99,78999,789－918,259

1,005,204

86,944

15,964,904

15,964,904－

6,913,088

6,950,953

37,865

Total Assets

37,199,851

37,324,673

124,822(1) Deposits

30,230,956

30,233,884

2,927(2) Debentures

2,705,490

2,710,093

4,603

12,75312,753－

1,637,770

1,646,986

9,216

40,31340,313－(6) Trading Assets(8) Securities
Held-to-Maturity Debt Securities
Other Securities(9) Loans and Bills Discounted
Reserve for Possible Loan Losses (*1)

6,952,660(39,572)(3) Trading Liabilities
Trading Bonds Sold
(4) Borrowed Money(5) Bills Sold and Call Money(6) Payables under Repurchase Agreements

98,373

98,373－(7) Payables under Securities Lending Transactions

1,789,012

1,789,012－

Total Liabilities

36,514,669

36,531,417

16,748

To which Hedge Accounting is not applied(5,234)(5,234)－

To which Hedge Accounting is applied(63,543)(132,023)(68,479)(68,777)(137,257)(68,479)

Derivatives (*2)

Total Derivatives*1. General and specific reserves for possible loan losses of Loans and Bills Discounted have been deducted. Loss reserves for Monetary
Claims Bought are immaterial and have therefore been deducted directly from the carrying value.
*2. Derivative transactions stated in trading assets and liabilities, and other assets and liabilities are shown as a single amount.
For net claims and obligations derived from derivative transactions, net amounts are stated. Sums that represent net obligations areshown in parenthesis.
Note 1: Calculation method of fair value for financial instruments
Assets(1) Cash and Due from Banks
For deposits that do not mature and have maturities with variable-interest-rates, since fair value approximates carrying value, carrying value isused as fair value. For deposits that have maturities with fixed-interest-rate, present value is calculated by discounting future cash flows using the
expected interest rate that would be applied to new deposits. For term deposits with short maturities, since fair value approximates carrying value,
carrying value is used as fair value.
(2) Bills Bought and Call Loans, (3) Receivables under Resale Agreements and (4) Receivables under Securities Borrowing Transactions
Since contract durations are short-term and fair value approximates carrying value, carrying value is used as fair value.
(5) Monetary Claims Bought
Monetary Claims Bought is stated at amounts obtained from brokers, etc.

49(6) Trading Assets
Securities including bonds held for trading are stated at market prices, etc.
(7) Money Held in Trust
Securities managed as trust assets of money held in trust whose main purpose is securities investment are valued at the prices quoted by theexchanges in the case of listed equity shares and at market prices in the case of bonds.
Note concerning securities categorized by holding purpose is stated in “Fair Value of Securities and Money Held in Trust”.
(8) Securities
Stocks are valued at the price quoted by the exchanges. Investment trusts are valued at the announced standard price. Bonds are valued at thequoted market prices or price calculated on the basis of rational estimation, etc.
For overseas Collateralized Loan Obligations (CLOs), fair value has been determined using a valuation technique that management believes
provides a reasonable estimate of the securities’ fair value at the end of the fiscal year. Fair value based on management’s reasonable estimates iscalculated using the discounted cash flow approach, with the primary price variables including default rates for similar assets, recovery rates,
early redemption rates, and discount rates.
Note concerning securities categorized by holding purpose is stated in “Fair Value of Securities and Money Held in Trust”.
(9) Loans and Bills Discounted
For floating rate loans, since market interest rates are reflected in fair value in short term and fair value approximates carrying value unless theborrower’s credit standing after the lending undergoes significant change, carrying value is used as fair value. For fixed rate loans, categorized bytype of loan and internal credit rating, fair value is determined by discounting loans to present value using the interest rate that would conceivably
be applied in case of a newly made loan of the same principal and interest total. For loans with short contractual maturities, since fair value
approximates carrying value, carrying value is used as fair value.
With regard to loans to Bankrupt Borrowers, Substantially Bankrupt Borrowers or Probably Bankrupt Borrowers, the Bank estimates loan
loss based on the present value of estimated future cash flows or the estimated recoverable value from collateral and guarantees. Since fair value
therefore approximates the total loan value on the consolidated balance sheet at the closing date less the total recorded value of the reserve forpossible loan losses, this value is used for fair value.
Liabilities(1) Deposits
For demand deposits, the amount payable upon demand on the balance sheet date (carrying value) is used as fair value. For term deposits, fairvalue is calculated by discounting future cash flows to present value. The discount rate is the interest rate that would be applicable to newly taken
deposits. For term deposits with short contractual maturities and term deposits with variable interest rates, since fair value approximates carrying
value, carrying value is used as fair value.
(2) Debentures
For debentures issued by the Bank, market prices are used as fair value.
(3) Trading Liabilities
For trading bonds sold, market prices, etc. are used as fair value.
(4) Borrowed Money
For borrowed money, categorized by types of loans, fair value is calculated by discounting borrowed money to present value using the interest
rate that would conceivably be applied in case of a newly made loan of the same principal and interest total.
In instances with short contractual maturities, since fair value approximates carrying value, the carrying value is used as fair value.
(5) Bills Sold and Call Money, (6) Payables under Repurchase Agreements, and (7) Payables under Securities Lending Transactions
Since contract durations are short term and fair value approximates carrying value, carrying value is used as fair value.
Derivative Transactions
With regard to derivative transactions, these are noted in “Derivatives”.
Note 2: The following financial instruments have significant difficulty in determining fair value and are not included in fair value
information of financial instruments.
Millions of Yen
Category
Unlisted stocks, etc. (*1)

2019Millions of U.S. Dollars
2019

2018
190,498

208,698

1,716

Investment in investment partnerships (*2)

17,398

16,571

156

Total

207,897

225,270

1,873*1. Unlisted stocks, etc. means unlisted common shares and preferred shares held by the Bank. Since unlisted stocks, etc. have no market prices
and therefore are with significant difficulty in determining fair value, unlisted stocks, etc. are not included in fair value disclosure
information.
*2 Investment in investment partnerships is not included in fair value disclosure information given that investment partnership assets include
items such as unlisted stocks, etc., which are with significant difficulty in determining fair value.

50

Note 3: Amounts of monetary claims and securities with maturities scheduled for redemption after the consolidated balance sheet date
As of March 31, 2019
Millions of Yen
Within 1 year

Over 1 year,
within 3 years

Over 3 years,
within 5 years

Over 5 years,
within 7 years

Over 7 years,
within 10 years

Over 10 years

Due from Banks (*1)
Bills Bought and Call Loan
Receivables under Resale Agreements
Receivables under Securities Borrowing
Transactions
Monetary Claims Bought
Securities
Held-to-Maturity Debt Securities
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Other Securities with maturities
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Loans and Bills Discounted (*2)

13,156,294
765,887
39,999128,328－－

35,192
－
－

－
－
－

－
－
－

－
－
－

23,229

－

－

－

－

－

28,48817,52538,00815,98016,161

104,934

90,56990,000－－－1,731,264
713,900
77,19145,000675,2023,040,462

5,993
－
－
－
－
4,232,172
1,658,800
280,379－
1,782,122
1,449,739

8,996
7,000
－
－
－
2,856,155
856,500
324,865－
1,269,512
1,110,219

70,54270,000－－－1,256,941
272,000
276,783－
569,349
536,787

230,000
230,000－－－
1,217,951
160,000
112,464－
188,656
686,409

135,000
135,000－－－
1,131,576
419,000－－
151,246
213,302

Total

18,876,197

5,833,758

4,048,572

1,880,251

2,150,522

1,584,813

Millions of U.S. Dollars

Due from Banks (*1)
Bills Bought and Call Loan
Receivables under Resale Agreements
Receivables under Securities Borrowing
Transactions

Within 1 year

Over 1 year,
within 3 years

Over 3 years,
within 5 years

Over 5 years,
within 7 years

Over 7 years,
within 10 years

Over 10 years

118,567
6,902
360

1,156
－
－

317
－
－

－
－
－

－
－
－

－
－
－

209

－

－

－

－

－

Monetary Claims Bought
Securities
Held-to-Maturity Debt Securities
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Other Securities with maturities
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Loans and Bills Discounted (*2)

256

157

342

144

145

945

816
811
－
－
－
15,602
6,433
695
405
6,085
27,401

54－－－－
38,141
14,9492,526－
16,06013,06581
63－－－
25,740
7,718
2,927
－
11,441
10,005

635
630
－
－
－
11,327
2,451
2,494
－
5,131
4,837

2,072
2,072
－
－
－
10,976
1,441
1,013
－
1,700
6,186

1,216
1,216
－
－
－
10,198
3,776
－
－
1,363
1,922

Total

170,117

52,57536,486

16,945

19,381

14,282*1. Current deposits, ordinary deposits, deposits at notice, and transfer deposits, included in “Due from Banks”, are stated under amounts
redeemable “Within 1 year”.
*2. The loans of ¥2,085 million ($18 million) which obligor categories are Bankrupt Borrowers, Substantially Bankrupt Borrowers or Probably
Bankrupt Borrowers and which amounts of redemption cannot be foreseen are not included in Loans and Bills Discounted.

51

As of March 31, 2018
Millions of Yen
Within 1 year

Over 1 year,
within 3 years

Over 3 years,
within 5 years

Over 5 years,
within 7 years

Over 7 years,
within 10 years

Over 10 years

Due from Banks (*1)
Bills Bought and Call Loan
Receivables under Resale Agreements
Receivables under Securities Borrowing
Transactions
Monetary Claims Bought
Securities
Held-to-Maturity Debt Securities
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Other Securities with maturities
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Loans and Bills Discounted (*2)

12,125,995
413,259
89,999191,188－－

48,628
－
－

－
－
－

－
－
－

－
－
－

15,340

－

－

－

－

－

10,831

21,13025,808

8,244

9,522

101,842

365,760
365,000－－－
2,208,556
953,600
51,53740,000865,561
3,561,058

91,36890,000－－－3,276,691
1,526,700
151,195－
1,181,296
1,270,969

20,9327,000－－－
3,643,894
1,661,000
291,264－
1,261,932
977,50340,30440,000－－－1,454,644
373,500
138,386－
666,756
405,473240,000
240,000－－－
1,426,933
325,000
166,373－204,274
546,251

155,000
155,000－－－
978,866
394,000－－
105,893
182,673

Total

18,790,801

4,851,348

4,716,766

1,908,667

2,222,707

1,418,382*1. Current deposits, ordinary deposits, deposits at notice, and transfer deposits, included in “Due from Banks”, are stated under amounts
redeemable “Within 1 year”.
*2. The loans of ¥8,655 million which obligor categories are Bankrupt Borrowers, Substantially Bankrupt Borrowers or Probably Bankrupt
Borrowers and which amounts of redemption cannot be foreseen are not included in Loans and Bills Discounted.

52

Note 4: Amounts of deposits, debentures and other interest bearing debt scheduled for repayment after the balance sheet date
As of March 31, 2019
Millions of Yen
Within 1 year

Over 1 year,
within 3 years

Over 3 years,
within 5 years

Over 5 years,
within 7 years

Over 7 years,
within 10 years

Over 10 years

Deposits (*)

24,216,923

5,405,506

135,447

25,165

1,158,255－

Debentures

637,930

1,074,790

751,580

20,000－－Borrowed Money

134,300

1,114,000

556,400－

162,480－

Bills Sold and Call Money37,878

－

－

－

－

－

Payables under Repurchase Agreements

152,777

－

－

－

－

－

Payables under Securities Lending
Transactions

1,784,546

－

－

－

－

－

Total

26,964,355

7,594,296

1,443,427

45,165

1,320,735－

Millions of U.S. Dollars
Within 1 year

Over 1 year,
within 3 years

Deposits (*)

218,249

48,7151,220

226

10,438－Debentures

5,749

9,686

6,773

180

－

－

Borrowed Money

1,210

10,039

5,014

－

1,464

－

Bills Sold and Call Money

Over 3 years,
within 5 years

Over 5 years,
within 7 years

Over 7 years,
within 10 years Over 10 years

341

－

－

－

－

－

Payables under Repurchase Agreements

1,376

－

－

－

－

－

Payables under Securities Lending
Transactions

16,082

－

－

－

－

－

Total
243,009
68,441
13,008* Demand deposits, included in “Deposits”, are stated under amounts payable “Within 1 year”.

407

11,902－As of March 31, 2018
Millions of Yen
Within 1 year

Over 1 year,
within 3 years

Over 3 years,
within 5 years

Over 5 years,
within 7 years

Over 7 years,
within 10 years

Over 10 years

Deposits (*1)

20,716,136

8,021,640

131,182

4,597

1,357,400－

Debentures

627,7101,230,390

827,390－

20,000－Borrowed Money (*2)

134,300

468,000

646,000－－

162,480

Bills Sold and Call Money40,313

－

－

－

－

－

Payables under Repurchase Agreements

98,373

－

－

－

－

－

Payables under Securities Lending
Transactions

1,789,012

－

－

－

－

－

Total

23,405,845

9,720,030

1,604,572

4,597

1,377,400

162,480*1. Demand deposits, included in “Deposits”, are stated under amounts payable “Within 1 year”.
*2. Borrowed Money without maturity is not included.

5327. Fair Value of Securities and Money Held in Trust:
1. Securities
The following tables contain information relating to Securities, Trading Assets (trading account securities and short-term corporate bonds), Cashand Due from Banks (negotiable certificates of deposit) and Monetary Claims Bought (beneficiary rights) in the consolidated balance sheet.
(1) Trading Securities

Millions of Yen

Net Unrealized Gains (Losses)
Recognized as Income

2019
412

Millions of U.S. Dollars
2019

2018
47

3

(2) Held-to-Maturity Debt Securities
As of March 31, 2019
Millions of Yen

537,259－－－
7,527
544,787
－
－
－
－
1,384
1,384

618,076－－－
7,786
625,862
－
－
－
－
1,361
1,361

Unrealized
Gains (Losses)
80,816－－－
258
81,074
－
－
－
－
(22)
(22)

546,171627,223

81,051

Carrying Value

Items with Fair
Value Exceeding
Carrying Value

Items with Fair
Value notExceeding Carrying
Value

Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Total

Fair Value

Millions of U.S. Dollars
Carrying Value

Items with Fair
Value Exceeding
Carrying Value

Items with Fair
Value notExceeding Carrying
Value

Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Total

54

4,841
－
－
－
67
4,909
－
－
－
－
12
12
4,922

Fair Value
5,570
－
－
－
70
5,640
－
－
－
－
12
12
5,652

Unrealized
Gains (Losses)
728
－
－
－
2
730
－
－
－
－
(0)
(0)
730

As of March 31, 2018
Millions of Yen

903,265－－－
14,271
917,536
－
－
－
－
722
722

988,427－－－
16,057
1,004,484
－
－
－
－
720
720

Unrealized
Gains (Losses)
85,161－－－
1,786
86,947
－
－
－
－
(2)
(2)

918,259

1,005,204

86,944

Carrying Value

Items with Fair
Value Exceeding
Carrying Value

Items with Fair
Value notExceeding Carrying
Value

Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Total

Fair Value(3) Other Securities
As of March 31, 2019
Millions of Yen
Carrying Value

Items with Carrying
Value Exceeding
Acquisition Cost

Items with Carrying
Value notExceedingAcquisition Cost

Stocks
Bonds
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Stocks
Bonds
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Total

72,434
8,919,357
4,144,366
988,868
45,015
3,741,106
4,341,116
13,332,908
5,341
1,177,430
115,540
98,707－963,182
1,548,126
2,730,898
16,063,807

Acquisition Cost
27,6298,723,559
3,989,590
982,604
44,996
3,706,368
4,096,590
12,847,778
5,439
1,178,563
116,279
98,745－963,538
1,583,875
2,767,879
15,615,658

Unrealized
Gains (Losses)
44,804
195,798
154,776
6,263
19
34,738244,526
485,129(98)(1,133)
(739)
(38)
－
(355)
(35,749)(36,980)
448,149

55

Millions of U.S. Dollars

Stocks
Bonds
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others652
80,38337,3508,911
405
33,715
39,123249
78,61835,9558,855
405
33,402
36,919Unrealized
Gains (Losses)
403
1,764
1,394
56
0
313
2,203

Total
Stocks
Bonds
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Total

120,159
48
10,611
1,041
889
－
8,680
13,952
24,611
144,771

115,787
49
10,621
1,047
889
－
8,683
14,27424,944
140,732

4,372
(0)
(10)
(6)
(0)
－
(3)
(322)
(333)
4,038

Carrying Value

Items with Carrying
Value Exceeding
Acquisition Cost

Items with Carrying
Value notExceedingAcquisition Cost

Acquisition Cost

As of March 31, 2018
Millions of Yen
Carrying Value

Items with Carrying
Value Exceeding
Acquisition Cost

Items with Carrying
Value notExceedingAcquisition Cost

Stocks
Bonds
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others
Total
Stocks
Bonds
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
OthersTotal
Total(4) Held-to-Maturity Debt Securities Sold during the Fiscal Year
Not applicable.

56

62,342
8,583,200
5,445,124
482,605
40,0082,615,462
3,264,610
11,910,154
4,895
2,080,560
17,963
328,710－
1,733,887
2,174,563
4,260,020
16,170,174

Acquisition Cost
27,7208,357,512
5,254,363
478,400
39,996
2,584,751
3,051,400
11,436,633
5,435
2,082,285
18,072
328,979－
1,735,233
2,230,263
4,317,985
15,754,618

Unrealized
Gains (Losses)
34,622
225,688
190,760
4,205
11
30,710213,209473,520(539)(1,724)
(109)
(268)
－
(1,346)(55,699)(57,964)
415,556

(5) Other Securities Sold during the Fiscal YearFor the Fiscal Year Ended March 31, 2019

StocksAmounts ofSecurities Sold
41,114

Millions of Yen
Aggregate Gains on
Sale
5,145

Aggregate Losses on
Sale
(471)

Bonds

740,804

20,795(670)

Japanese Government Bonds

734,955

20,795(633)

Municipal Government Bonds

5,849

－

(36)

Short-Term Corporate Bonds

－

－

－

Corporate Bonds

－

－

－

Others

1,094,477

5,864(10,786)

Total

1,876,395

31,806(11,927)

StocksAmounts ofSecurities Sold
370

Bonds

Millions of U.S. Dollars
Aggregate Gains on
Aggregate Losses on
Sale
Sale
46
(4)

6,676

187

(6)

Japanese Government Bonds

6,623

187

(5)

Municipal Government Bonds

52

－

(0)

Short-Term Corporate Bonds

－

－

－

Corporate Bonds

－

－

－

Others

9,863

52

(97)

Total

16,910286(107)

Amounts ofSecurities Sold
64,941Millions of Yen
Aggregate Gains on
Sale
10,321Aggregate Losses on
Sale
(752)

For the Fiscal Year Ended March 31, 2018

StocksBonds

748,860

7,620

(379)

Japanese Government Bonds

744,686

7,620

(284)

Municipal Government Bonds

－

－

－

－

－

－

4,173

0

(94)

Short-Term Corporate Bonds
Corporate Bonds
Others965,759

6,522(12,930)

Total

1,779,561

24,465(14,062)(6) Impaired Securities
Of Securities other than Trading Securities (excluding those where there is significant difficulty in determining fair value), if the fair value falls
by 30% or more compared with the acquisition price and it is not expected to recover up to the acquisition price in view of the rate of decline overpast periods, the securities are devalued and the fair value is recorded as the carrying amount on the consolidated balance sheet. In addition, thedifference between the fair value and the acquisition price is recognized as impairment losses in the fiscal year.
In the case where the issuer is in bankruptcy, de facto bankruptcy, or has a likelihood of falling into bankruptcy, impairment loss isrecognized for securities when the market price is below the acquisition price.
In the fiscal year ended March 31, 2019, the amount of impairment losses on securities was ¥1 million ($0 million) (all impairment losses
were incurred on stocks).
In the fiscal year ended March 31, 2018, there were no impairment losses.

57

2. Money Held in Trust(1) Money Held in Trust for Trading Purposes
As of March 31, 2019

Millions of Yen
Unrealized Gains (Losses)
Recognized as Income

Carrying Value
Money Held in Trust for
Trading Purposes

99,778Carrying Value
Money Held in Trust for
Trading Purposes－
Millions of U.S. Dollars
Unrealized Gains (Losses)
Recognized as Income899

As of March 31, 2018－

Millions of Yen
Unrealized Gains (Losses)
Recognized as Income

Carrying Value
Money Held in Trust for
Trading Purposes

99,789－(2) Held-to-Maturity Money Held in Trust
Not applicable.
(3) Other Money Held in Trusts (Money Held in Trust other than Held for Trading Purposes or Held-to-Maturity)
As of March 31, 2019
Millions of Yen
Carrying
Value
Other Money Held in Trusts

50,538Acquisition
Cost

Unrealized
Gains(Losses)

50,000538

Items with
Carrying Value
ExceedingAcquisition Cost

Items with
Carrying Valuenot Exceeding
Acquisition Cost

538－

Items with
Carrying Value
ExceedingAcquisition Cost

Items with
Carrying Valuenot Exceeding
Acquisition Cost

Millions of U.S. Dollars
Carrying
Value

Acquisition
Cost

Unrealized
Gains(Losses)

Other Money Held in Trusts
455
450
4
4
－
Note:
Components of “Unrealized Gains (Losses)” are shown in “Items with Carrying Value Exceeding Acquisition Cost” and “Items with Carrying
Value not Exceeding Acquisition Cost”.
As of March 31, 2018
Not applicable.

583. Net Unrealized Gains on Other Securities and Other Money Held in Trust
Components of Net Unrealized Gains on Other Securities in the consolidated balance sheet are as follows:
As of March 31, 2019
Millions of
U.S. Dollars
Millions of Yen
Other Securities

447,958

4,037

538

4

Net Unrealized Gains

448,497

4,041

Deferred Tax Liabilities

124,814

1,124

Net Unrealized Gains(Prior to Equity Method Adjustment)

323,683

2,917

Non-Controlling Interests’ Portion－－

Parent Company’s Portion of Valuation Differential for Other
Securities Held by Equity-Method-Applicable Companies－－

323,683

2,917

Other Money Held in Trust

Net Unrealized Gains

Note:
Unrealized Gains on foreign currency translations of foreign currency-denominated other securities where there is significant
difficulty in determining fair value are included in “Other Securities” under “Net Unrealized Gains”.
As of March 31, 2018
Other Securities
Other Money Held in Trust

Millions of Yen
415,080－

Net Unrealized Gains

415,080

Deferred Tax Liabilities

115,271

Net Unrealized Gains(Prior to Equity Method Adjustment)

299,808

Non-Controlling Interests’ Portion－

Parent Company’s Portion of Valuation Differential for Other
Securities Held by Equity-Method-Applicable Companies－

Net Unrealized Gains

299,808

Note:
Unrealized Gains on foreign currency translations of foreign currency-denominated other securities where there is significant
difficulty in determining fair value are included in “Other Securities” under “Net Unrealized Gains”.

5928. Derivatives:
1. Derivative transactions to which hedge accounting is not applied
The following summarizes the notional amount or the contracted principal equivalents, fair values, net unrealized gains (losses) and the valuation
methods of the fair values of the Bank’s derivative transactions that do not qualify for hedge accounting as of the consolidated balance sheet date,
which are classified by types of financial instruments. Please note that the notional amount in themselves do not reflect the market risk associatedwith the Bank’s derivative transactions.
(1) Interest-Rate-Related Transactions
As of March 31, 2019
Millions of Yen
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Total
Notional
AmountNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Interest Rate Futures:
Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought－－－－Fixed Rate Receivable/Floating Rate Payable

7,133,635

5,713,507

136,122

136,122

Floating Rate Receivable/Fixed Rate Payable

7,116,808

5,269,272(118,498)(118,498)

Floating Rate Receivable/Floating Rate Payable

204,130130,130

(122)

(122)

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

Sold

1,149,740

541,140(17,036)(6,433)

Bought1,335,100

655,000(3,151)(12,576)(2,686)(1,508)Interest Rate Options:Over the Counter Transactions
Interest Rate Forwards:

Interest Rate Swaps:

Fixed Rate Receivable/Fixed Rate Payable
Interest Rate Options:

Others:

Total

60

Millions of U.S. Dollars
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Total
Notional
AmountNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Interest Rate Futures:
Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought－－－－Fixed Rate Receivable/Floating Rate Payable

64,29051,491

1,226

1,226

Floating Rate Receivable/Fixed Rate Payable

64,13847,488(1,067)(1,067)

Floating Rate Receivable/Floating Rate Payable

1,839

1,172

(1)

(1)

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

Sold

10,361

4,876

(153)

(57)

Bought12,032

5,903

(28)

(113)

(24)

(13)

Interest Rate Options:Over the Counter Transactions
Interest Rate Forwards:

Interest Rate Swaps:

Fixed Rate Receivable/Fixed Rate Payable
Interest Rate Options:

Others:

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statement of income.
2. Fair value calculation: Exchange-Traded Transactions are valued on the basis of closing prices, mainly on the Tokyo Financial ExchangeInc. Over the counter transactions are valued using discounted present value or calculation models for option
prices, etc.

61

As of March 31, 2018
Millions of Yen
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Total
Notional
AmountNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Interest Rate Futures:
Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought－－－－Fixed Rate Receivable/Floating Rate Payable

7,343,328

6,496,389

117,569

117,569

Floating Rate Receivable/Fixed Rate Payable

7,266,359

5,850,172(92,013)(92,013)

Floating Rate Receivable/Floating Rate Payable

190,630

190,630

(17)

(17)

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

Sold

1,808,600

1,020,600(24,532)(4,185)

Bought

1,919,200

1,092,300(6,361)(21,418)(5,354)(65)

Interest Rate Options:Over the Counter Transactions
Interest Rate Forwards:

Interest Rate Swaps:

Fixed Rate Receivable/Fixed Rate Payable
Interest Rate Options:

Others:

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statement of income.
2. Fair value calculation: Exchange-Traded Transactions are valued on the basis of closing prices, mainly on the Tokyo Financial ExchangeInc. Over the counter transactions are valued using discounted present value or calculation models for option
prices, etc.

62(2) Currency-Related Transactions
As of March 31, 2019
Total Notional
AmountMillions of Yen
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Net Unrealized
Gains (Losses)

Exchange-Traded Transactions
Currency Futures:
Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

6,652

6,120

67

67

Sold

278,790

1,804

501

501

Bought292,020

1,851

(494)

(494)

Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

73

73

Currency Options:Over the Counter Transactions
Currency Swaps:
Forward Foreign Exchange Contracts:

Currency Options:

Others:Total

63

Total Notional
AmountMillions of U.S. Dollars
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Net Unrealized
Gains (Losses)

Exchange-Traded Transactions
Currency Futures:
Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

59

55

0

0

Sold

2,512

16

4

4

Bought

2,631

16

(4)

(4)

Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

0

0

Currency Options:Over the Counter Transactions
Currency Swaps:
Forward Foreign Exchange Contracts:

Currency Options:

Others:

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statement of income.
2. Fair value calculation: Transactions are valued using discounted present value, etc. (for currency swaps, fair value is calculated after
deduction of principal.)64

As of March 31, 2018
Total Notional
AmountMillions of Yen
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Net Unrealized
Gains (Losses)

Exchange-Traded Transactions
Currency Futures:
Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

7,195

6,770

94

94

Sold

199,188

215

1,090

1,090

Bought236,733

－

(828)

(828)

Currency Options:Over the Counter Transactions
Currency Swaps:
Forward Foreign Exchange Contracts:

Currency Options:
Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

355

355

Others:

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statement of income.
2. Fair value calculation: Transactions are valued using discounted present value, etc. (for currency swaps, fair value is calculated after
deduction of principal.)(3) Stock-Related Transactions
Not applicable.

65(4) Bond-Related Transactions
As of March 31, 2019
Millions of Yen
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Total
Notional
AmountNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Bond Futures:
Sold

8,876

－

(13)

(13)

Bought

3,059

－

6

6

Bond Futures Options:
Sold

－

－

－

－

Bought

7,000

－

10

1

Sold

－

－

－

－

Bought－－－－Over the Counter Transactions
Bond Options:

Others:
Sold

－

－

－

－

Bought

－

－

－

－

2

(6)

Total

Millions of U.S. Dollars
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Total
Notional
AmountNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Bond Futures:
Sold

79

－

(0)

(0)

Bought

27

－

0

0

Sold

－

－

－

－

Bought

63

－

0

0

Sold

－

－

－

－

Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－

0

(0)

Bond Futures Options:Over the Counter Transactions
Bond Options:

Others:

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statement of income.
2. Fair value calculation: Exchange-Traded Transactions are valued on the basis of closing prices, mainly on the Osaka Exchange, Inc.
Over the counter transactions are valued using calculation models for option prices, etc.

66

As of March 31, 2018
Millions of Yen
Notional Amount(Over 1 Year until
Fair Value
Settlement or Expiry)

Total
Notional
AmountNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Bond Futures:
Sold
Bought30,764

－

7

7

－

－

－

－

Bond Futures Options:
Sold

－

－

－

－

Bought

6,500

－

5

(0)

Sold

－

－

－

－

Bought－－－－Over the Counter Transactions
Bond Options:

Others:
Sold

－

－

－

－

Bought

－

－

－

－

13

6

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statement of income.
2. Fair value calculation: Exchange-Traded Transactions are valued on the basis of closing prices, mainly on the Osaka Exchange, Inc.
Over the counter transactions are valued using calculation models for option prices, etc.

(5) Commodity-Related Derivative Transactions
Not applicable.

(6) Credit Derivative Transactions
Not applicable.

672. Derivative transactions to which hedge accounting is applied
The following summarizes the notional amount or the contracted principal equivalents, fair values and the valuation methods of the fair values of
the Bank’s derivative transactions that qualify for hedge accounting as of the consolidated balance sheet date, which are classified by types offinancial instruments and methods for hedge accounting. Please note that the notional amount in themselves do not reflect the market risk
associated with the Bank’s derivative transactions.
(1) Interest-Rate-Related Transactions
As of March 31, 2019
Method for Hedge
Accounting
Basic Treatment

Exceptional
Treatments forInterest Rate
Swaps

Items

Millions of Yen
Notional Amount(Over 1 Year until
Settlement or Expiry)

Total Notional
AmountInterest Rate Swaps
Fixed Rate Receivable/Floating Rate Payable

－

－

－

Floating Rate Receivable/Fixed Rate Payable

4,004,924

3,606,831(96,756)

Fixed Rate Receivable/Floating Rate Payable

－

－

－

Floating Rate Receivable/Fixed Rate Payable

1,144,962

1,020,889

Interest Rate Swaps

Total

Method for Hedge
Accounting
Basic Treatment

Exceptional
Treatments forInterest Rate
Swaps

Fair Value(74,433)(171,189)

Items

Millions of U.S. Dollars
Notional Amount
Total Notional(Over 1 Year until
AmountSettlement or Expiry)

Fair Value

Interest Rate Swaps
Fixed Rate Receivable/Floating Rate Payable

－

－

－

Floating Rate Receivable/Fixed Rate Payable

36,09332,505(871)

Fixed Rate Receivable/Floating Rate Payable

－

－

－

Floating Rate Receivable/Fixed Rate Payable

10,318

9,200

(670)

Interest Rate Swaps

Total(1,542)

Notes:
1. Most of hedged items with respect to Basic Treatment are Interest-bearing assets and liabilities such as Loans and Bills Discounted,
Other Securities (Bonds) and Deposits.
2. Hedged items with respect to Exceptional Treatments for Interest Rate Swaps are Loans and Bills Discounted, Held-to-Maturity Debt
Securities and Debentures.
3. The deferred method of hedge accounting is primarily applied to the transactions mentioned above based on the JICPA Industry Audit
Committee Report No. 24, February 13, 2002 “Accounting and Auditing Treatment of Accounting Standards for Financial Instruments in
Banking Industry”.
4. Fair value calculation: Exchange-Traded Transactions are valued on the basis of closing prices, mainly on the Tokyo Financial ExchangeInc. Over the counter transactions are valued using discounted present value or calculation models for option
prices, etc.

68

As of March 31, 2018
Method for Hedge
Accounting
Basic Treatment

Exceptional
Treatments forInterest Rate
Swaps

Items

Millions of Yen
Notional Amount(Over 1 Year until
Settlement or Expiry)

Total Notional
AmountFair Value

Interest Rate Swaps
Fixed Rate Receivable/Floating Rate Payable

80,000－676

Floating Rate Receivable/Fixed Rate Payable

4,460,428

3,714,664(76,433)

Fixed Rate Receivable/Floating Rate Payable

－

－

－

Floating Rate Receivable/Fixed Rate Payable

1,201,286

963,556

Interest Rate Swaps

Total(68,479)(144,236)

Notes:
1. Most of hedged items with respect to Basic Treatment are Interest-bearing assets and liabilities such as Loans and Bills Discounted,
Other Securities (Bonds) and Deposits.
2. Hedged items with respect to Exceptional Treatments for Interest Rate Swaps are Loans and Bills Discounted, Held-to-Maturity Debt
Securities and Debentures.
3. The deferred method of hedge accounting is primarily applied to the transactions mentioned above based on the JICPA Industry Audit
Committee Report No. 24, February 13, 2002 “Accounting and Auditing Treatment of Accounting Standards for Financial Instruments in
Banking Industry”.
4. Fair value calculation: Exchange-Traded Transactions are valued on the basis of closing prices, mainly on the Tokyo Financial ExchangeInc. Over the counter transactions are valued using discounted present value or calculation models for option
prices, etc.
(2) Currency-Related Transactions
As of March 31, 2019
Millions of Yen
Method for Hedge
Accounting
Basic Treatment

Items
Currency Swaps

Notional Amount(Over 1 Year until
Settlement or Expiry)

Total Notional
AmountFair Value

463,786

399,287(4,504)57,408

－

(74)

－

－

－

Forward Foreign Exchange Contracts:
Sold
BoughtTotal(4,579)Millions of U.S. Dollars

Method for Hedge
Accounting
Basic Treatment

Items
Currency Swaps

Notional Amount(Over 1 Year until
Settlement or Expiry)

Total Notional
AmountFair Value

4,179

3,598

(40)

Sold

517

－

(0)

Bought－－－Forward Foreign Exchange Contracts:

Total

(41)

Notes:
1. Most of hedged items are foreign currency-denominated securities, Due from Banks, etc.
2. The deferred method of hedge accounting is primarily applied to the transactions mentioned above based on the JICPA Industry Audit
Committee Report No. 25, July 29, 2002 “Accounting and Auditing Treatment of Accounting Standards for Foreign Currency
Transactions in the Banking Industry”.
3. Fair value calculation: Transactions are valued using discounted present value, etc. (for currency swaps, fair value is calculated after
deduction of principal.)69

As of March 31, 2018
Millions of Yen
Method for Hedge
Accounting
Basic Treatment

Items
Currency Swaps

Notional Amount(Over 1 Year until
Settlement or Expiry)

Total Notional
AmountFair Value

412,096

260,654(3,266)150,018

－

2,394

－

－

－

Forward Foreign Exchange Contracts:
Sold
Bought
Total

(871)

Notes:
1. Most of hedged items are foreign currency-denominated securities, Due from Banks, etc.
2. The deferred method of hedge accounting is primarily applied to the transactions mentioned above based on the JICPA Industry Audit
Committee Report No. 25, July 29, 2002 “Accounting and Auditing Treatment of Accounting Standards for Foreign Currency
Transactions in the Banking Industry”.
3. Fair value calculation: Transactions are valued using discounted present value, etc. (for currency swaps, fair value is calculated after
deduction of principal.)(3) Stock-Related Transactions
Not applicable.
(4) Bond-Related Transactions
Not applicable.

29. Related Party Transactions:
For the Fiscal Year Ended March 31, 2019
There were no significant related-party transactions.
For the Fiscal Year Ended March 31, 2018
There were no significant related-party transactions.

30. Segment Information:(1) Description of Reportable Segments
The Group classifies the businesses of the Bank and its consolidated subsidiaries as individual business segments. Among those businesssegments, the business of the Bank is deemed as the reportable segment.
The Bank, as an individual financial institution, provides such services as deposits, debentures, lending, market fund management, trading
operations, clearing and trust business. As the central financial institution for Shinkin Banks, the Bank complements the functions of the Shinkin
Banks and operates the shinkin bank industry’s own safety net, including the Shinkin Bank Management Reinforcement System. By doing so, theBank strives to maintain an orderly financial system within the shinkin bank industry.
(2) Method of Calculating Amounts by Reportable Segment
The accounting methods of the reportable segment are the same as those described in the “Significant Accounting Policies”. Reportable segment
profit is based on profit attributable to owners of parent.

70

(3) Amounts by Reportable Segment
For the Fiscal Year Ended March 31, 2019

(Millions of Yen)

Reportable segment
Shinkin Central Bank
business

Other

Total

Adjustment

Amount presented
in the consolidated
financial statements

IncomeExternal customers

255,816

38,027

293,843(35)

293,808

2,951

1,679

4,630

(4,630)－

Total

258,767

39,707

298,474(4,665)

293,808

Segment profit

42,286

3,849

46,135(1,354)44,781

Segment assets

39,432,740

336,552

39,769,293(75,917)

39,693,375

Segment liabilities

37,799,235

254,239

38,053,474(20,565)

38,032,909

Depreciation
Interest Income

5,178
193,711

5,082
143

10,261
193,855(0)(100)

10,260193,754

Interest Expenses

119,523

49

119,573(38)

119,534

Income Taxes

14,7601,702

16,463(185)

16,278

Increase in Tangible andIntangible Fixed Assets

6,075

20,42026,496－

26,496

Inter-segment

Other items(Millions of U.S. Dollars)
Reportable segment
Shinkin Central Bank
business

Other

Total

Adjustment

Amount presented
in the consolidated
financial statements

IncomeExternal customers
Inter-segment
Total

2,305

342

2,648

(0)

2,647

26

15

41

(41)

－

2,332

357

2,689

(42)

2,647

Segment profit

381

34

415

(12)

403

Segment assets

355,377

3,033

358,411(684)

357,726

Segment liabilities

340,656

2,291

342,947(185)

342,762

Depreciation
Interest Income

46
1,745

45
1

92
1,747

(0)
(0)

92
1,746

Interest Expenses

1,077

0

1,077

(0)

1,077

Income Taxes

133

15

148

(1)

146

Increase in Tangible andIntangible Fixed Assets

54

184

238

－

238

Other items

Notes:
1. The “Other” is outside of business segments in our segment information and includes businesses performed by consolidated subsidiaries.
The Bank’s consolidated subsidiaries provide such financial services as brokerage & dealing, asset management, consumer credit
guarantees, investment, M&A advisory operations, and data processing services.
2. Adjustment comprises the following.
(i) Within adjustment of segment profit, reduction of ¥1,354 million ($12 million) comprises reduction of ¥875 million ($7 million) on
profit attributable to non-controlling interests and ¥478 million ($4 million) on inter-segment eliminations, etc.
(ii) Within adjustment of segment assets, reduction of ¥75,917 million ($684 million) comprises reduction of ¥43,114 million ($388
million) on eliminations relating to capital consolidation and ¥32,802 million ($295 million) on inter-segment eliminations, etc.
(iii) The adjustment for other items including reduction of ¥20,565 million ($185 million) on the adjustment of segment liabilities
comprises inter-segment eliminations, etc.
3. Segment profit has been adjusted from profit attributable to owners of parent presented in the consolidated statement of income.

71For the Fiscal Year Ended March 31, 2018

(Millions of Yen)

Reportable segment
Other

Shinkin Central Bank
business

Total

Amount presented
in the consolidated
financial statements

Adjustment

IncomeExternal customers

269,734

37,176306,911(19)

306,892

6,058

1,705

7,764

(7,764)－

Total

275,792

38,882

314,675(7,783)306,892

Segment profit

46,4982,278

48,777(4,311)

44,466

Segment assets

38,552,702

316,665

38,869,368(78,919)

38,790,449

Segment liabilities

36,949,667

237,304

37,186,971(23,128)

37,163,843

Depreciation
Interest Income

4,515
223,718

5,176
171

9,691
223,889(0)(3,361)

9,691
220,528

Interest Expenses

121,536

34

121,571(11)

121,559

Income Taxes

16,157

1,941

18,098(218)

17,880

Increase in Tangible andIntangible Fixed Assets

2,465

2,726

5,191

－

5,191

Inter-segment

Other items

Notes:
1. The “Other” is outside of business segments in our segment information and includes businesses performed by consolidated subsidiaries.
The Bank’s consolidated subsidiaries provide such financial services as brokerage & dealing, asset management, consumer credit
guarantees, investment, M&A advisory operations, and data processing services.
Shinkin Trust Bank, Ltd., which had performed trust and banking businesses, has been excluded from the scope of consolidation from thesecond quarter of the previous fiscal year since it was taken over by Mitsubishi UFJ Trust and Banking Corporation on September 19,
2017.
2. Adjustment comprises the following.
(i) Within adjustment of segment profit, reduction of ¥4,311 million comprises reduction of ¥526 million on profit attributable tonon-controlling interests and ¥3,784 million on inter-segment eliminations, etc.
(ii) Within adjustment of segment assets, reduction of ¥78,919 million comprises reduction of ¥43,114 million on eliminations relating tocapital consolidation and ¥35,804 million on inter-segment eliminations, etc.
(iii) The adjustment for other items including reduction of ¥23,128 million on the adjustment of segment liabilities comprises
inter-segment eliminations, etc.
3. Segment profit has been adjusted from profit attributable to owners of parent presented in the consolidated statement of income.

(Related Information)
For the Fiscal Year Ended March 31, 2019
1. Information by service(Millions of Yen)

Securities investment
operations
Income from externalcustomers

197,358

Lending operations

Other

19,546

Total
76,904

293,808(Millions of U.S. Dollars)

Securities investment
operations
Income from externalcustomers

72

1,778

Lending operations
176

Other

Total
693

2,647

2. Information by geographic region(1) IncomeJapan
161,201

Japan

United States
32,833

EuropeUnited States

EuropeOther
15,926

83,846

Other

1,452
295
143
Note: Income from derivative transactions and Trading income are included in Other.

(Millions of Yen)
Total
293,808(Millions of U.S. Dollars)
Total
755
2,647

(2) Tangible fixed assets
The Group’s tangible fixed assets located in Japan account for over 90% of the tangible fixed assets presented in the consolidated balance sheet.
Consequently, this information is omitted.

3. Information by principal customer
Name of customer
The Government of Japan

IncomeName of customer
The Government of Japan

Income47,090(Millions of Yen)
Related segment
Shinkin Central Bank business

424(Millions of U.S. Dollars)
Related segment
Shinkin Central Bank business

For the Fiscal Year Ended March 31, 2018
1. Information by service(Millions of Yen)

Securities investment
operations
Income from externalcustomers

Lending operations

227,630

17,597

Other

Total
61,663

2. Information by geographic region(1) Income
Japan

United States
EuropeOther
168,458
33,387
15,19589,850Note: Income from derivative transactions and Trading income are included in Other.

306,892(Millions of Yen)
Total
306,892(2) Tangible fixed assets
The Group’s tangible fixed assets located in Japan account for over 90% of the tangible fixed assets presented in the consolidated balance sheet.
Consequently, this information is omitted.

3. Information by principal customer
Name of customer
The Government of Japan

Income56,603(Millions of Yen)
Related segment
Shinkin Central Bank business73

(Information related to Impairment losses of Fixed Assets by Reportable Segment)
For the Fiscal Year Ended March 31, 2019

Impairment losses

Reportable segment
Shinkin Central Bank business
1,567

Impairment losses

Reportable segment
Shinkin Central Bank business
14(Millions of Yen)

Other

Total
1,567

－

(Millions of U.S. Dollars)
Other

Total
14

－

Note: The “Other” is outside of business segments in our segment information and includes businesses performed by consolidated
subsidiaries.
The Bank’s consolidated subsidiaries provide such financial services as brokerage & dealing, asset management, consumer credit
guarantees, investment, M&A advisory operations, and data processing services.
For the Fiscal Year Ended March 31, 2018

Impairment losses(Millions of Yen)

Reportable segment
Shinkin Central Bank business
60

Other

Total
60

－

Note: The “Other” is outside of business segments in our segment information and includes businesses performed by consolidated
subsidiaries.
The Bank’s consolidated subsidiaries provide such financial services as brokerage & dealing, asset management, consumer credit
guarantees, investment, M&A advisory operations, and data processing services.

(Information related to Amortization of Goodwill and Balance of Unamortized Goodwill by Reportable Segment)
Not applicable.
(Information related to Accrual of Income from Negative Goodwill by Reportable Segment)
Not applicable.

31. Amounts per Share:

Yen
2019

Net Assets per Share

306,594.84

299,587.63

2,763.11

Net Income per Share

6,358.89

6,311.86

57.30

－

－

－

Net Income per Share after Adjustment for Common
Share equivalents

74

U.S. Dollars
2019

2018

Notes:1. The basis for calculation of net assets per share is as follows:
2019

2018

2019

Total Net Assets

Millions of Yen

1,660,465

1,626,605

Millions of U.S.
Dollars

14,964

Amount Deducted from Total Net Assets

Millions of Yen

216,949

216,080

Millions of U.S.
Dollars

1,955

Non-Controlling Interests

Millions of Yen

11,824

10,956

Millions of U.S.
Dollars106

Preferred Dividends

Millions of Yen

2,124

2,124

Millions of U.S.
Dollars

19

Dividend Attributable to SpecificCommon Shares

Millions of Yen

3,000

3,000

Millions of U.S.
Dollars

27

Distribution of Residual Assets
Millions of Yen
Attributable to Specific Common Shares

200,000

200,000

Millions of U.S.
Dollars

1,802

Millions of Yen

1,443,516

1,410,525

Millions of U.S.
Dollars

13,009Number of Share Units at Fiscal Year-end
Used to Calculate Net Assets per ShareUnit

4,708,222

4,708,222－－

Number of General Common Share
Units

Unit

4,000,000

4,000,000－－

Number of Preferred Share UnitsUnit

708,222708,222－－

Net Assets at Fiscal Year-end Used to
Calculate Net Assets per Share* When calculating net assets per share, of dividend attributable to preferred shares, preferred dividends are deducted from total net assets
whereas participating dividends are not deducted from total net assets.
Dividend attributable to specific common shares and distribution of residual assets attributable to specific common shares are
deducted from total net assets, and the number of specific common shares is not included within the number of shares.
2. The basis for calculation of net income per share is as follows:
2019

2018

2019

Millions of Yen

44,781

44,466

Millions of U.S.
Dollars

Amount Deducted from Profit Attributable
Millions of Yen
to Owners of Parent

2,124

2,124

Millions of U.S.
Dollars

19

Millions of Yen

2,124

2,124

Millions of U.S.
Dollars

19

Profit Attributable to Owners of Parent
Used to Calculate Net Income per Share

Millions of Yen

42,65642,341Millions of U.S.
Dollars

384

Average Number of Share Units for the
Fiscal YearUnit

6,708,222

6,708,222－－

Average Number of General Common
Share Units

Unit

4,000,000

4,000,000－－

Average Number of Specific Common
Share Units

Unit

2,000,000

2,000,000－－

Average Number of Preferred
Share UnitsUnit

708,222708,222－－

Profit Attributable to Owners of Parent

Preferred Dividend403* When calculating net income per share, of dividends attributable to preferred securities, dividends attributable to preferred shares are
deducted from profit attributable to owners of parent whereas participating dividends are not deducted from profit attributable to ownersof parent.
3. Net income per share after adjustment for common share equivalents is not listed as there are no dilutive securities.

32. Subsequent Events:
Not applicable.

75

76

Non-Consolidated Balance
Non-Consolidated
Balance Sheet
Sheet
Shinkin Central Bank As of March 31,
Shinkin Central Bank As of March 31,
AssetsAssetsCash and Due from Banks
Cash and Due from Banks
Call Loans
Call Loans
Receivables under Resale Agreements
Receivables under Resale Agreements
Monetary Debts Purchased
Receivables under Securities Borrowing Transactions
Trading Assets
Monetary Debts Purchased
Money Held in Trust
Trading Assets
Securities
Money Held in Trust
Loans and Bills Discounted
Securities
Foreign Exchanges Assets
Loans and Bills Discounted
Other Assets
Foreign Exchanges Assets
Tangible Fixed Assets
Other Assets
Intangible Fixed Assets
Tangible Fixed Assets
Customers’ Liabilities for Acceptances and Guarantees
Intangible Fixed Assets
Reserve for Possible Loan Losses
Customers’ Liabilities for Acceptances and Guarantees
Total Assets
Reserve for Possible Loan Losses
Total Assets
Liabilities and Net Assets
Liabilities
Liabilities and Net Assets
Deposits
Liabilities
Debentures
Deposits
Trading Liabilities
Debentures
Borrowed Money
Trading Liabilities
Call Money
Borrowed Money
Payables under Repurchase Agreements
Call Money
Payables under Securities Lending Transactions
Payables under Repurchase Agreements
Foreign Exchanges Liabilities
Payables under Securities Lending Transactions
Borrowed Money from Trust AccountForeign Exchanges Liabilities
Other Liabilities
Borrowed Money from Trust AccountReserve for Employee Bonuses
Other Liabilities
Reserve for Directors’ Bonuses
Reserve for Employee Bonuses
Reserve for Employee Retirement Benefits
Reserve for Directors’ Bonuses
Reserve for Directors’ Retirement Allowances
Reserve for Employee Retirement Benefits
Deferred Tax Liabilities
Reserve for Directors’ Retirement Allowances
Deferred Tax Liabilities for Land Revaluation
Deferred Tax Liabilities
Acceptances and Guarantees
Deferred Tax Liabilities for Land Revaluation
Total Liabilities
Acceptances and Guarantees
Total Liabilities
Total Net Assets
Total Liabilities and Net Assets
Total Net Assets
Total Liabilities and Net Assets

2019
2018

Millions
Millions ofof Yen
Yen

2018
2017

Millions ofMillions of
U.S. Dollars
U.S. Dollars
2019
2018

13,338,309
12,378,801
765,887
413,259
39,99989,999221,732
205,854
177,359
150,317217,220
16,613,593
99,7897,045,582
17,137,785
21,1306,952,659
930,347
20,46067,233
961,269
7,695
68,99454,8797,179(29,822)70,65339,432,740(42,730)
38,552,702

12,378,801
10,591,676
413,259362,234
89,99919,999177,359
77,522
217,220
178,977
99,789205,696
17,137,785
6,952,659
17,204,776
20,4607,995,390
961,269
20,514
68,994484,467
7,179
70,05470,6538,000(42,730)
83,63238,552,702(45,103)37,257,840

120,208
116,473
6,902
3,888
360
846
1,998
1,855
1,668
1,354
2,043
149,725
938
63,496161,251
190
65,418
8,384
192
605
9,044
69
649
494
67
(268)
664
355,377(402)
362,746

30,966,816
2,486,710
30,260,341
48,554
2,714,890
1,967,180
53,882
22,878
1,637,770
152,777
25,313
1,776,263
98,373
1,397
1,776,158
14,025447
190,350
5,375
1,329
196,352
86
1,334
23,461
89435
22,02386,009456
6,081
80,10554,8796,100
37,799,235
70,65336,949,667
1,633,504
39,432,740
1,603,035
38,552,702

30,260,341
2,714,890
29,176,129
53,882
2,952,900
1,637,770
76,41325,313
1,203,870
98,37324,821
1,776,158
188,402447
1,602,791
5,375
368
196,352
74
1,334
227,760
89
1,311
22,02383456
20,337
80,105389
6,100
88,97470,653
6,109
36,949,667
83,63235,654,367
1,603,035
38,552,702
1,603,472
37,257,840

279,080
22,410284,722437
25,544
17,728506
206
15,4091,376
238
16,008925
1216,712
126
4
1,715
50
11
1,847
0
12
211
0
3
207
775
4
54
753
494
57
340,656664
347,663
14,721
355,377
15,083362,74677

Non-ConsolidatedStatement
Statementof
ofIncome
IncomeNon-Consolidated
Shinkin Central Bank For the year ended March 31,
Shinkin Central Bank For the year ended March 31,
IncomeIncomeInterest Income:Interest Income:Interest on Loans and Discounts
Interest on Loans and Discounts
Interest on Due from Banks
Interest on Due from Banks
Interest on Call Loans
Interest on Call Loans
Interest on Receivables under Resale Agreements
Interest on Receivables under Resale Agreements
Interest on Receivables under Securities Borrowing Transactions
Interest on Receivables under Securities Borrowing Transactions
Interest and Dividends on Securities
Interest and Dividends on Securities
OthersOthersTrust Fees
Trust Fees
Fees and Commissions
Fees and Commissions
Trading Income
Trading Income
Other Operating Income
Other Operating Income
Other Income
Other Income
Total Income
Total Income

Expenses
Expenses
Interest Expenses:
InterestInterest
Expenses:on Deposits
Interest
on Deposits
Interest
on Debentures
Interest
on Debentures
Interest
on Borrowed Money
Interest
on Borrowed
Money
Interest
on Call Money
Interest
on
Call
Money
Interest on Payables under Repurchase Agreement
Interest
on Payables
under
Repurchase
Interest
on Payables
under
SecuritiesAgreement
Lending Transactions
Intereston
Payablesunder
Securities
Lending Transactions
Interest Payable on Interest Rate Swaps
Interest
Payable on Interest Rate Swaps
OthersOthersFees and Commissions
Fees
and Commissions
Trading
LossesTrading
OtherLosses
Operating Expenses
Other
OperatingExpenses
Generaland Administrative
Expenses
Generaland
Administrative
Expenses
Other Expenses
OtherTotal
Expenses
Expenses
Total Expenses

Income before Income Taxes
IncomebeforeIncome Taxes
IncomeTaxes
IncomeCurrent
Taxes
Current
DeferredDeferred
Total Income Taxes
Total
Income Taxes
Net
IncomeNet Income

Millions of Yen
Millions of Yen

2019
2018

2018
2017

78

2019
2018

193,711
223,718
19,546
17,597
8,454
8,407
946
706
(336)
0
4
115
164,286
196,249
809
642
399
117
8,289
8,295
3,727
3,600
34,54725,162
18,092
14,897258,767
275,792

223,718
201,454
17,597
17,868
8,407
8,431
706
753
0
0
115
133
196,249
173,730
642
536
117
0
8,295
8,263
3,600
4,738
25,16259,434
14,897
10,127
275,792
284,018

1,745
2,104
176
165
76
79
8
6
(3)
0
0
1
1,480
1,846
7
6
3
1
74
78
33
33
311
236
163
140
2,332
2,594

119,523
121,536
40,21937,841
4,499
5,930
3,571
7,040541
463
1,258
1,920
23,686
15,872
44,79050,964956
1,502
6,743
6,520317
136
42,07554,38930,86729,5002,192
1,052
201,720
213,136

121,536
122,340
37,841
39,690
5,930
8,005
7,040
8,244463
254
1,920
1,062
15,872
9,265
50,964
52,831
1,502
2,985
6,520
6,605136
4
54,38974,76829,50029,234
1,052
2,728
213,136
235,680

1,077
1,143362
356 40
55 32
66 4
4 11
18213
149403
479 8
14 60
61 2
1379
511278277 19
9
1,817
2,005

57,04762,65662,65648,338514
589

12,18914,3892,570
1,768
14,76016,15742,28646,49814,38910,555
1,768(3,601)
16,157
6,954
46,49841,383109
135 2316133
152381437

Yen

Net Income Per Share
NetDividend
Income Per
Share per Share (General Common Shares)
DeclaredDividend
DeclaredperperShare(GeneralCommonShares)Dividend
Declared
Share(Specific
CommonShares)Dividend
Declaredper
Share(Specific
CommonShares)Dividend Declared per Share (Preferred Shares)
Dividend Declared per Share (Preferred Shares)

Millions ofMillions of
U.S. Dollars
U.S. Dollars

Yen
2019
2018 5,987.00
6,614.86
3,000.00
3,000.00
1,500.00
1,500.00
6,500.00
6,500.0020182017 6,614.86

5,852.33
3,000.00
3,000.00
1,500.00
1,500.00
6,500.00
6,500.00

U.S. Dollars
U.S. Dollars
2019
2018

53.95
62.23
27.03
28.22
13.51
14.11
58.57
61.15

Statement ofof Trust
Trust Account
Account (Consolidated)
Statement(Consolidated)
Shinkin Central Bank
As of March 31,
Shinkin Central Bank
As of March 31
AssetsAssetsSecurities
Securities
Beneficiary Rights
Beneficiary
RightsSecurities Held in Custody Accounts
Securities
Held
in Custody Accounts
Monetary Claims
Monetary
ClaimsOther Claims
Other
ClaimsDue from
Banking AccountDue
fromBanking
Cash and Due fromAccountBanks
Cash andDuefrom Banks
Total
AssetsTotal assets

MillionYen
Millions
of of
Yen
2018
2019
2017
2018
6,000
6,000
617,068
381,740
63,00063,000106,191
60,392
2
14,025 4
5,375
913
8,932
807,201
525,445

6,000
8,507
381,740
1,694,135
63,00063,00060,39264,163
4
5,375 88,932360
28,986525,445
1,859,161

Millions ofMillions of
U.S. Dollars
U.S. Dollars
2019
2018
54
56
5,561
3,591
567
957 592
0 568
126 0
8 50
7,274 84
4,943

Liabilities
Liabilities
Money Trust
35,87924,866
224
Money
Trust
81,36035,879Investment
Trusts
15,532
139 337
Investment
1,450,501
Money HeldTrustsin Trust Other than Money Trust
23,814
16,077 144 Money
Held
in
Trust
Other
than
Money
Trust
Securities Trusts
111,000
23,814
102,700
925 224
Monetary Trusts
Claims Trusts
61,415
Securities
116,300
107,190966
111,000
1,044
CompositeClaims
Trusts Trusts
293,335
540,835
4,874 577
Monetary
65,14961,415525,445
TotalTrusts
Liabilities
807,201
7,274
Composite
145,849
293,335
2,760(NoteTotal
1) Consolidated
in Trust Business
Activities by Financial
1,859,161
liabilities companies conducting trust business pursuant to the “Act on Engagement
525,445
4,943
Institutions”
comprised
only
the
Bank
in
the
fiscal
years
ended
March
31,
2019
and
2018.
(Note1) The figures in this statement are calculated by means of simple aggregation of trust accounts for each consolidated company(Note 2) Notrust
trustbusinessassets were
entrustedotherontrustbanks for in
asset
administration
as of March
31, 2019Institutions.”
and 2018. Consolidated companies
conducting
pursuant
to theto“ActEngagement
Trust
Business Activities
by Financial
conducting such trust business comprised only the Bank in the fiscal year ended March 31, 2018, and comprised the Bank and Shinkin Trust
Bank, Ltd. in the fiscal year ended March 31, 2017.
(Note2) No trust assets were entrusted to other trust banks for asset administration as of March 31, 2018 and 2017.

79Organization (As of July 31, 2019)
General Meeting of Members
Corporate Auditors
Board of Directors
Chairman of the Board of Directors (part-time)
President and Chief Executive Officer
Deputy President
Senior Managing Directors
Managing Directors
Directors

Chief Secretary
Internal Audit Division
General Affairs Division
Legal & Compliance Office
Personnel Division
Strategic Planning Division
Digital Innovation Office
Shinkin Business Transformation Office
Investor & Public Relations OfficeFinancial Management Division
Risk Management Division
Credit Planning & Supervision Division
Trust Business Division
Business Promotion Division
Disaster Recovery & Reconstruction
Support Office*SME Business Solution Division
Shinkin Networks Promotion OfficeInternational Business Solution DivisionInternational Operations Center
Retail Business Solution Division
Support & Advisory Division for Shinkin Banks
Consulting Office
Portfolio Management Support OfficeTransfer & Clearing Division
Management Office for Domestic FundTransfer System
Operations Division
Operations Center
Systems Division
Systems Center
Corporate Business Promotion Division
Project Finance OfficeTreasury Business Division
Treasury Division
Credit & Alternative Investment Division
Treasury Operations Division
Research Institute
SDB Office
Regional Innovation Support Center

Corporate Business Division I
Corporate Business Division II
Osaka Corporate Business DivisionTokyo Business Division
Kanto Business Division I
Kanto Business Division II
Hokkaido Branch
Tohoku Branch(Disaster Recovery & Reconstruction Support office)

Hokuriku Branch
Shizuoka Branch
Nagoya Branch
Osaka Branch
Kobe Branch
Okayama Branch
Chugoku Branch
Shikoku Branch
Fukuoka Branch
Minami-Kyushu Branch
New York Representative OfficeHong Kong Representative Office
Shanghai Representative Office
Bangkok Representative Office* Located in the Tohoku Branch.

The SCB Group (As of July 31, 2019)The SCB Group
Securities

Personal loan
guarantees

Investment and
M&A advisory

Data processing
consignment

Consigned
clerical work

Shinkin
CapitalThe Shinkin Banks
Information
System Center

Shinkin
ChukinBusiness

Data processing
consignment(handles SCB
administrative work)

Softwaredevelopment

Computing

Shinkin
Securities

ShinkinInternational

Shinkin AssetManagement

Shinkin
Guarantee

Dealing

Underwriting new
bonds and agency
business in theeuro market

Management
services fordiscretionary
investment contract
assetsDebt guarantee
business(guarantees for
unsecuredpersonal loans
provided byshinkin banks)

Brokerage
Underwriting

Dealing andbrokering forexisting euro
bonds
Foreign securities
investment andconsulting¥20bn in capital(100% ownership);¥10bn capitalreserve80

Assetmanagement£30mn in capital(100% ownership)
London local
securities entity

Management
services forinvestment trust
assets¥200mn in capital(100% ownership)¥1.0bn in capital(100% ownership)

Investment banking
M&A
brokering
Corporatebusiness
consulting¥490mn in capital(100% ownership)

Computer
consulting andtraining¥4.5bn in capital(50.7% stake;
49.2% owned byshinkin banks);¥1.5bn capitalreserve

Promissory
note exchange
Branch,dormitory, andother property
management¥70mn in capital(100% ownership)

International Directory (As of July 31, 2019)
Senior Managing Director(in charge of Corporate Business Promotion/
Treasury Operations/Reserch Institute)
Hiroshi Nakahara
Senior Managing Director(in charge of Strategic Planning/
International Business Solution/
Credit & Alternative Investment/
Overseas Offices)
Hiroshi Sudo
Senior Managing Director(in charge of Treasury Business)
Norihiro Takano
Managing Director(in charge of Treasury)
Keisuke Izutsu
Strategic Planning Division(including International Planning)
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7624
Facsimile: +81-3-3278-7033
General Manager: Yoshinori Jinno
International Business Solution Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7703
Facsimile: +81-3-3278-7035
General Manager: Koichi Kawashima
International Operations Center(including Correspondent Banking)Address: 8-1, Kyoubashi 3-chome,
Chuo-ku, Tokyo 104-0031
Telephone: +81-3-5250-1700
Facsimile: +81-3-5250-1780
SWIFT: ZENB JPJT
General Manager: Hideo Okada
Corporate Business Promotion Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7679
Facsimile: +81-3-3278-7045
General Manager: Atsushi Toyoshima
Treasury Business Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7642
Facsimile: +81-3-3278-7040
SWIFT: ZENB JPJT
General Manager: Masao Ino

Research Institute
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7671
Facsimile: +81-3-3278-7048
General Manager: Eiichi Matsuzaki

Overseas Offices
New York
New York Representative Office
Address: 655 Third Avenue, Suite 2620,
New York, NY 10017, U.S.A.
Telephone: +1-212-642-4700
Facsimile: +1-212-730-6000
Chief Representative: Kentaro Sone

Treasury Operations Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7666
Facsimile: +81-3-3278-7046
SWIFT: ZENB JPJT
General Manager: Minoru Suzuki

LondonHong Kong
Hong Kong Representative Office
Address: Suite 4008, 40/F, Central Plaza, 18
Harbour Road, Wan Chai, Hong Kong, P.R. of China
Telephone: +852-2537-3777
Facsimile: +852-2537-4002
Chief Representative: Masao Yamaguchi

ShanghaiHong Kong
Bangkok

Shanghai
Shanghai Representative Office
Address: Room 508, Shanghai International Trade
Center, 2201 Yan-An Xi Road
Shanghai, P.R. of China
Telephone: +86-21-6270-3091
Facsimile: +86-21-6270-3095
Chief Representative: Yosuke Abe
Bangkok
Bangkok Representative Office
Address: 19th Floor, 1903, Athenee Tower, 63
Wireless Road, Lumpini, Pathumwan, Bangkok
10330, Thailand
Telephone: +66-2-168-8796
Facsimile: +66-2-168-8799
Chief Representative: Naoto Seita

Overseas Subsidiary

Hokkaido(Sapporo)

LondonShinkin International Ltd.
Address: 1st Floor, 85 London Wall,London EC2M 7AD, UK
Telephone: +44-20-7562-0500
Facsimile: +44-20-7256-8544
Managing Director: Takuya Sakamoto

Treasury Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7660
Facsimile: +81-3-3278-7043
SWIFT: ZENB JPJT
General Manager: Hiroyuki Tanaka
Credit & Alternative Investment Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7664
Facsimile: +81-3-3278-7044
General Manager: Norihisa Kawamura

New York

Tohoku(Sendai)

Hokuriku(Kanazawa)
Chugoku(Hiroshima)

Okayama Kobe
Osaka
Shikoku(Takamatsu)

FukuokaMinami-Kyushu(Kumamoto)Head Office

NagoyaShizuokaHead Office
BranchOffice/subsidiary

Shinkin Central Bank Head Office3-7, Yaesu 1-chome, Chuo-ku, Tokyo 103-0028, Japan
Telephone: +81-3-5202-7711
https://www.shinkin-central-bank.jp/

81

Shinkin Central Bank Annual Report 2019

Shinkin Central Bank

3-7, Yaesu 1-chome, Chuo-ku, Tokyo 103-0028, Japan
Telephone: +81-3-5202-7711
https://www.shinkin-central-bank.jp/
Printed in Japan