Shinkin Central Bank

Annual Report 2015

Shinkin Central Bank

Annual Report 2015

Shinkin Central Bank

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

Printed in Japan

Shinkin Central Bank,
the Central Bank for
Shinkin Banks

International Directory (As of July 31, 2015)
Deputy President(in charge of Treasury Operations)Katsuo Akiyama
Senior Managing Director(in charge of International Planning)
Hiroyuki Shibata

As the central financial institution in Japan forthe cooperative regional financial institutions,known as shinkin banks, the Shinkin Central Bank
(hereinafter the SCB) occupies a well-establishedposition in Japan’s financial industry. Shinkin banks
currently hold funds totaling some ¥131 trillion(around $1,098 billion) in funds.

Senior Managing Director(in charge of International Operations/
Overseas Offices)
Akira Ito
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
Director: Atsushi Kudo
International Business Solution Division(including International Operations Center/
Correspondent Banking)Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7703
Facsimile: +81-3-3278-7035
General Manager: Makoto Asahi
International Operations Center
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: Shigeo Enomoto

Management Philosophy andOperational Policies
Management Philosophy
As the central bank for all shinkin banks, the SCB supports thegrowth of the shinkin bank sector, 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 inhand 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, 2015)
Name:
Establishment:
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:

Shinkin Central Bank (SCB)
June 1, 1950
1,205
14
5
¥33,178 billion ($276 billion)¥31,726 billion ($264 billion)¥490 billion ($4,086 million)¥90 billion ($757 million)

36.40%267
A1 (Moody’s)
A+ (S&P)
A+ (R&I)
AA (JCR)		(As of July 31, 2015)
Note: ‌The number of employees includes full-time Directors and Auditors. Our
overseas network includes Shinkin International Ltd., a subsidiary in London.
The total assets and total funds are the average balances for the year ended
March 31, 2015.

Operations Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7655
Facsimile: +81-3-3278-7041
General Manager: Minoru Suzuki
Corporate Business Promotion Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7665
Facsimile: +81-3-3278-7045
General Manager: Akira Tatano
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: Kengo Kaji
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: Kenji Tanaka

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: Tomoaki Nishimura

New York

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

LondonOverseas Offices
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: Tomohiro Kishi

ShanghaiHong Kong
BangkokHong 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: Kozo Harada
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: Hiroyuki Niwa
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: Minetaka Kawai

Hokkaido

Overseas Subsidiary
Shinkin International Ltd.
Address: 1st Floor, 85 London Wall,London EC2M 7AD, U.K.
Telephone: +44-20-7562-0500
Facsimile: +44-20-7256-8544
Managing Director: Koichi Kawashima
TohokuHokuriku

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: Daigo Morishita

ChugokuOkayama Kobe
Osaka

Head Office

NagoyaShizuoka

Shikoku

FukuokaMinami-Kyushu

Head Office
BranchOffice/Subsidiary

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

81

Shinkin Central Bank Annual Report 2015

Financial Highlights (Non-Consolidated Financial Summary)Millions of Yen

Shinkin Central Bank
For the years ended March 31,

2015

Millions of U.S. Dollars

2014

2013

2015

2014

$

$

2013

For the Fiscal Year
278,236 ¥

280,971 ¥383,948

Total Expenses

197,230

232,305

344,559

1,641

2,256

3,661

Net Income (Loss)

60,81735,39632,024

506

343

340

Net Business Profit (Loss)

74,28643,25145,927

618

420

488

¥33,269,249¥30,939,429¥30,184,837$276,897$300,557$320,774

Loans and Bills Discounted

5,885,739

5,975,832

5,460,155

48,98658,051

58,025

Securities

19,132,160

18,450,501

19,681,236

159,235

179,235

209,152

Total Liabilities

31,861,297

29,684,307

28,956,639

265,179

288,365

307,721

Deposits

25,571,093

23,689,313

22,012,166

212,826

230,127

223,923

Debentures

3,007,780

3,168,110

3,548,380

25,03330,77637,7081,407,951

1,255,122

1,228,197

11,71812,192

13,052

Total Income

¥

2,315

2,729

$

4,080

At the Year-end
Total Assets

Net Assets

Note: US dollar amounts are given for convenience only, converted at the rate of ¥94.10, ¥102.94, and ¥120.15 per US$1.00, the prevailing rate as of March 31, 2013, 2014, and 2015,
respectively. Total assets and total funds amounted to ¥33,178 billion ($276 billion) and ¥31,726 billion ($264 billion) of the average balance at the year ended March 31, 2015.

Contents
Financial Highlights (Non-Consolidated Financial

Asset Quality ··············································· 12

Summary) ···················································· 1

Important Management Indices ························· 13

Message from the President and CEO ·················· 2

Corporate Governance ··································· 14

Corporate Management and Auditors ·················· 3

Strengthening the Compliance System ················· 15

The SCB: A Powerful,

Risk Management ·········································· 16

TSE-listed Financial Institution ··························· 4Corporate Social Responsibility Activities ·· ··········· 19Management Issues and Strategies ······················· 6What Are Shinkin Banks? ································ 20

Helping Recovery from the Great East Japan

Preferred Shares ··········································· 22

Earthquake···················································· 8

Financial Section ··········································· 23

Overseas Network ········································· 9Organization / The SCB Group ························· 80

Business Overview ········································ 10International Directory ··································· 81

Capital Adequacy ·········································· 11This 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 ¥120.15 per US$1.00, the prevailing rate on March 31, 2015.

1

Message from the President and CEO

The Shinkin Central Bank, or the SCB, serves
as the central bank for Japan’s 267 shinkinbanks—regional financial institutions, locatedthroughout the country, that specialize inoperations with small and medium-sizedenterprises.
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 as a whole.
Fiscal 2014 Earnings Performance
During fiscal 2014 (ended March 2015), we
continued our efforts to diversify revenue
streams and maintain a highly stable portfolio.
As a result, on a non-consolidated basis,
earnings exceeded our upwardlly revised fullyear forecasts (net income of ¥55.0 billion),with ordinary income at ¥81.1 billion (up ¥32.5
billion year on year) and net income at ¥60.8
billion (up ¥25.4 billion year on year).
Progress of Management Plan andDisaster Recovery Assistance
Fiscal 2014 was the second year of the SCB’s
current medium-term management plan, “SCB
Medium-Term Action Program 2013”. We
have designated this year as a “year to advancefurther ahead with shinkin banks for the futureof regional areas”, and implemented various

2

measures to achieve this mission. In addition,
we continued our efforts to support recovery
from the Great East Japan Earthquake.
In particular, we have expanded andenhanced the services and functions we offerto shinkin banks, by launching the Shinkin no
Tsubasa fund, designed to support the foundation, development, and growth of small andmedium-sized enterprises, or SMEs. Jointlywith shinkin banks and intended to revitalize
local communities, we also offered the Shinkin
Family Support Fixed-term Deposit, devised
to assist customers cope with life events andthe stages of their lives. In this way, we are
striving to better support the resolution ofissues related to the regional and SME financing offered by shinkin banks.
Our efforts to support recovery from theGreat East Japan Earthquake have focused on
the mental health care of disaster victims andthe rebuilding of their daily lives. We launched
the Shinkin no Kizuna Reconstruction Support
Fixed-term Deposit that makes donations to
the Shinkin no Kizuna Reconstruction Support
Project, which was established for the Japan
Earthquake Local NPO Support Fund operated by the Japan NPO Center. Through the
Shinkin no Kizuna reconstruction support
fund, we are also helping revitalize businessesof shinkin bank customers in disaster areas
while at the same time supporting volunteer
activities there.
Future Business Strategies
The SCB has designated fiscal 2015, the final
year of its medium-term management plan aswell as the so-called “first year of regional revitalization”, as a “year to make steady progresswith shinkin banks towards the true regional
revitalization”. We will strive to accomplish
various measures stated in the medium-term
management plan, and continue providing support for recovery from the Great East Japan
Earthquake.

Strengthening Internal Management
Systems
The SCB will continue its efforts to achievethoroughgoing compliance with laws andregulations, strengthen corporate governance,and contribute to society, so as to bolster its
position as a well-respected and distinguishedfinancial institution.
Recognizing our crucial responsibilities as
the central bank of the shinkin bank industry,
we will strive with the utmost commitment
to facilitate the continued development of theindustry and thus contribute to development
throughout Japan.

I would like to take this opportunity
to express my sincere gratitude to all ourshareholders and other stakeholders for theircontinued understanding and support.

Mitsuo Tanabe
President and Chief Executive Officer
July 2015

Shinkin Central Bank Annual Report 2015

Corporate Management and Auditors

Koji Omae
Chairman of the Board of Directors

Mitsuo Tanabe

President and Chief Executive Officer

Katsuo Akiyama

Hiroyuki Shibata

Akira Ito

Deputy President

Senior Managing Director

Senior Managing Director

Chairman of the Board of
Directors (Part-time)

Directors

Kenichiro Mimuro

Atsushi Kudo

Yukio Kashima

Koji Omae

Hiroshi Sudo

Toshiyuki Masuda

Naoya Okajima

Seiji Hino

President and Chief Executive Officer

Keisuke Izutsu

Hiroyuki Hashimoto

Mitsuo Tanabe

Toshio Muroi

Hiroshi Tsuboi(As of July 31, 2015)

Akihiro Hasui

Deputy President

Director and Executive Advisor

Hidetaka Nakamura

Katsuo Akiyama

Kimio Yamaguchi

Tadatoshi Inaba

Senior Managing Directors

Directors (Part-time)

Auditor

Hiroyuki Shibata

Shinji Sugiyama

Yasuhiko Hori

Akira Ito

Toshihisa Sato
Ichiro Nanakubo

Auditors (Part-time)

Managing Directors

Kei Itani

Shinji Tanamura

Hajime Hioki

Tetsuji Hara

Masatoshi Takahashi

Norihiro Takano

Kazuhiko Jinbo

Masamichi Narita

Koji Sato

Akio Okuyama

Shinichi Minowa

3

The SCB: A Powerful, TSE-listed Financial Institution
The SCB has the dual role of operating as both the central bank for shinkin banks,
and an independent financial institution.
Founded in 1950, the SCB is one of Japan’s leading financial institutions. It functions as both anindependent financial institution and the central cooperative financial institution for all shinkinbanks (see “What Are Shinkin Banks?” on page 20) nationwide.
During the fiscal year ended March 31, 2015, the SCB’s funds, comprising deposits fromshinkin banks and funds acquired through the issuance of debentures, had an average outstandingbalance of ¥31,726 billion ($264 billion), and average total assets of ¥33,178 billion ($276 billion).

Overseas Networks and Correspondent Banks
As of March 31, 2015, we had 238 overseas correspondent banks (those banks abroad with which
the SCB has an agreement for foreign exchange trading), with main branches in 49 countries.
Shinkin International Ltd. (London)
New York Representative Office

Europe76 banksAsia
103 banks

Middle East
2 banks

North America
26 banks
Japan 9 banks
Shanghai Representative OfficeHong Kong Representative Office
Bangkok Representative Office

Africa3 banks

Latin America
11 banks

Oceania
8 banks

The Central Bank of the Shinkin Bank Sector
The SCB raises funds mostly through deposits—received mainly from shinkin banks—as well as
by issuing debentures. The bank invests these funds in securities, the proceeds of which are used
to extend loans, and draws on the resulting profits to support the activities of shinkin banks.
Total assets: around ¥33 trillion ($276 billion)
Domestic network: 14
Overseas network: 5
Number of employees: 1,205
Number of member shinkin banks: 267

ShinkinBank

ShinkinBank

ShinkinBank

ShinkinBank

ShinkinBank

Number of banks: 267
Total assets: ¥143,896 billion ($1,197 billion)
Number of branches: 7,398
Number of employees: 111,477
Number of members: 9,270,457

4

ShinkinBank(As of March 31, 2015)

Roles
Central Bank for Shinkin Banks(1) S upplementing Shinkin Banks’ Operations
Japan’s 267 shinkin banks play a key role insupporting regional economies by lending tolocal organizations and small and mediumsized enterprises (SMEs). With total depositsof ¥131 trillion ($1,098 billion), shinkin banks
occupy a very important position within
Japan’s overall financial sector.
As the central financial institution forthe shinkin bank sector, the SCB is responds
to changes in the operating environment ofshinkin banks. The changes include increasingly sophisticated and diverse customer
needs, intensified competition with othertypes of financial institutions, and demands forever more stringent management control systems.
The SCB provides support for shinkinbanks’ financial services through the shinkinbanks’ network, activities in support ofregional development, management of small
and medium-sized businesses, as well as overthe-counter sales of investment trust fundproducts. Further, the SCB provides support
in the areas of asset liability management(ALM) and marketable securities portfolio
analysis to help shinkin banks raise profitability
and strengthen risk management systems.
Just as the Bank of Japan acts as a clearing house for domestic exchange transactions
among banks, the SCB serves as a clearing
house for shinkin banks. Thus, for the year
ended March 31, 2015, the SCB settled domestic exchange transactions with a substantial
total value of ¥239 trillion ($1,992 billion).
Moreover, the SCB acts as the intermediary insettling utility bills handled by shinkin banks.
The SCB also supports other shinkin bankoperations. In addition to supplementing international foreign exchange operations, the SCB
has been supplementing shinkin banks’ lending
operations, by commissioning shinkin banks tolend to local SMEs and business owners who
are their customers.
In this way, the SCB is further reinforcing
its supporting role in areas in which it is either
difficult or inefficient for shinkin banks to provide services as individual institutions.

Shinkin Central Bank Annual Report 2015(2) Enhancing Sector Creditworthiness
The SCB acts as a consultant for the shinkinbank sector, as it lends proactive support the
management of shinkin banks and provides
such safety nets as the Shinkin Bank Management Reinforcement System and the Shinkin
Bank Mutual Funding Support System. The
SCB works to maintain and enhance thecreditworthiness of the shinkin bank sector
by providing management analysis, management consulting, and capital reinforcement formember banks.
In recent decades, Japanese financial institutions have experienced several major crises,
including the collapse of the country’s asset
bubble in the 1990s and, more recently, theglobal financial crisis triggered by the Lehman
Brothers bankruptcy. During such unsettling
periods for the financial system, the SCB’s
financial functions have played a crucial role inmaintaining confidence in the shinkin bank sector and contributed to the stability of regional
economies.

Independent Financial Institution(1) Institutional Investor
Looking at the average balance for the year
ended March 31, 2015, the SCB maintained
assets under management of ¥32,915 billion ($273 billion). Of this, the SCB invested¥18,538 billion ($154 billion) in securities—asgovernment bonds, municipal bonds, corporate bonds, and foreign securities—as wellas ¥7,870 billion ($65 billion) in short-termmoney markets.
As one of Japan’s leading institutional
investors, the SCB manages a vast amount ofmoney in domestic and international markets.
(2) Comprehensive Financial Services Provider
The SCB conducts deposit-related and lending
operations—the core functions of a financial
institution—issues debentures, and conducts
foreign exchange operations.
It also undertakes auxiliary operations,such as underwriting public bonds, handlingprivate placement bonds, and issuing personalloan guarantees, as well as peripheral opera-

tions, including the provision of trust, securities, financial advice, investment trust funds,
defined contribution pensions, venture capital,and M&A-related advice.
These operations are conducted either by
the SCB itself, or through its subsidiaries.
(3) Contributor to Regional Development
In order to play a part in the development oflocal economies, the SCB cooperates withshinkin banks, which work closely with local
communities nationwide. It promotes direct
lending to regional public bodies and local companies and, through its nationwide network ofbranches, investment in regional development
projects and private finance initiative-related
entities.
In addition, the SCB has been acting asa regional financial institution and, in cooperation with shinkin banks, has been actively
supporting the revitalization of regional companies and invigoration of local communities
through relationship banking.

Shinkin Bank Management Reinforcement System

Management analysis system

ShinkinCentralBankManagement advisory system

Shinkinbanks

Capital reinforcement system

Management analysis system

Shinkin banks submit materials on their operating and financial conditions, on the basis of which the SCB conducts
management analyses. It identifies those shinkin banks that would benefit from management consultations. Whencertain standards apply, the SCB also conducts more detailed analyses.

Management advisory system

The SCB is a management consultant to shinkin banks that accept consultations and meet certain standards. The consulting covers
everything from overall management to individual issues and is designed to reinforce shinkin banks’ management capabilities. Measures toresolve management problems are proposed, information and good practices are shared, and follow-up is provided.

Capital reinforcement system

The SCB provides capital to shinkin banks to which it has provided consultations when the analyses indicate this tobe necessary. To prevent shinkin banks from facing moral hazard, the SCB provides capital only on receipt of abusiness revitalization plan, and subsequent management and operations guidance.

5Management Issues and Strategies
The SCB designated fiscal 2014, the second year of its current medium-term management plan, “SCB Medium-Term Action
Program 2013”, as a “year to advance further ahead with shinkin banks for the future of regional areas”. Under this mission,
we have been striving to enhance our support to resolve issues related to regional and SME financing offered by shinkinbanks.
Our efforts include fortifying support systems and boosting services and functions offered to shinkin banks, by focusing on
three core measures, namely strengthening support for SMEs, retail financing, and community revitalization.

Overview of the New Medium-Term Management PlanSCB Medium-Term Action Program 2013: Management Plan Overview
Working with shinkin banks for the sustainable development of regional areas
Core Plan 1:
Support shinkin bankefforts to resolve issues
related to regional and
SME financing

Support Plan 1:
Actively utilize industry
networks

Support Plan 2:
Human resources development
and establishment of robust
organizational frameworks

Core Plan 2:

Core Plan 3:

Assist in ensuring
management stability forshinkin banks

Enhance the financial andearnings stability of
the SCB

Target Figures
Capital adequacy ratio(domestic standard):
At least 15%

Net income: ¥35 billion

Outlier ratio: No more than 20%

6

Nonperforming-loan ratio:
Less than 1%

Shinkin Central Bank Annual Report 2015

Strengthening Support for SMEs

◦Initiatives to back the life stages
In June 2014, the SCB launched the Shinkin no
Tsubasa fund, to support the foundation, development, and growth of SMEs. The fund supports
the consulting services offered, at each stage ofan enterprise’s development, by shinkin banks incollaboration with Shinkin Capital Co., Ltd.
In April 2015, we established the Shinkin
Information Support Department. It manages
the provision of information to shinkin banks
through the SME Business Solution Division;
support for cooperative activities among thosebanks; and business alliances with external specialist agencies, to enhance support systems for
SMEs.
At the same time, we restructured existing support groups to reflect the development
stages of SMEs. We set up the SME Initiation& Growth Support Department, which manages the support activities of shinkin banks that
handle the establishment and business growthof SMEs; and the SME Revival & Succession Support Department, which manages the support
activities of shinkin banks handling the business
revitalization and succession of SMEs.

◦Initiatives to Support Overseas Expansion
The SCB has been advancing business allianceswith local Asian banks in order to enhance its
support structures for the overseas expansionof shinkin bank customers. In October 2014,
we concluded a business alliance agreementwith the Bank of Shanghai (China).
To provide shinkin banks and their customers with local information and opportunities
for mutual exchange, we held Shinkin Conferences in Hong Kong, Shanghai, Bangkok, andJakarta. In partnership with allied banks, we
also held seminars for local companies.
Strengthening Support for Retail
FinancingIn April 2014, the SCB began offering the
Shinkin Family Support Fixed-term Deposit.
It combines the fixed-term deposit sold byshinkin banks with the Life Support Service(offering discounts and other benefits throughhotels and resort facilities) and the Healthrelated Service (offering round-the-clock telephone health counseling).
In addition, in April 2015, the SCB transferred the Investment Trust and Pension FundGroup, under the Treasury Operations Divi-sion, to the Retail Business Solution Division.
It abolished Client Assets Business Promotion
Office, and restructured the Client Assets
Business Promotion Department in charge ofpromotional operations and the Client Assets
Business Operations Department in charge ofclerical and administrative operations.
The result is a comprehensive system toprovide support for shinkin banks in charge ofclient asset business.
Strengthening Support for Community
Revitalization◦Consultations for local communities
We provide consulting services to revitalize
local communities, such as city centers, shopping and hot spring areas, and local industries.
We also dispatch lecturers to take part incommunity revitalization courses, offered toshinkin banks, and seminars hosted by shinkinbanks.

◦Initiatives for regional revitalization
The Japanese government has been working
on the implementation of regional revitalization initiatives that are part of its growth strategy under the “third arrow” of Abenomics.
Since regional revitalization is what shinkinbanks have been striving for over the years, it
is time to leverage the banks’ roles and functions.
Thus, in April 2015, we established the
Shinkin Vitalizing Local Economy Support
Center, at the Research Institute. The center, which supports those shinkin banks that
address regional revitalization, now also carries out the functions formerly the purview
of the Regional Innovation Support Office. In
addition, we established the Regional Revitalization Promotion Liaison Office as a crosssector conference system for divisions incharge of regional revitalization. A regional
revitalization administrator was appointed toeach branch to serve as the contact for shinkinbanks and local governments committed toregional revitalization.
Together with shinkin banks, we will continue to strive for the proper revitalization ofregional areas, while focusing on the Shinkin
Vitalizing Local Economy Support Center andproviding support for the formulation of integrated regional strategies, as well as the establishment of support systems for shinkin banks
and other initiatives.

The SCB Principle of Action
Whether the SCB will be able to realize thepolicies set out in the medium-term management plan depends on human resources. Oneof the action program’s support plans aims todevelop human resources—people who takepride in working for a central financial institution and have a high level of professional expertise. To cultivate pride and ambition among the
SCB’s directors and employees as membersof the central financial institution for shinkinbanks, we formulated the SCB Principle of
Action. All SCB directors and employees are
expected to heed the principles, which are ourunified fundamental guidelines for decisionmaking and behavior during the conduct ofbusiness operations.

The SCB Principle of Action
As directors and employees of the central
financial institution for shinkin banks, we will
always conduct our business with pride, astrong sense of responsibility, and based on
the following guidelines.
Action Guidelines
1. Be customer oriented
From the perspective of the customers,
including shinkin banks, we should try toprovide optimum products, services, andfunctions.
2. Be innovative
We should be aware of issues and costconscious;
regardless of precedent, we should always
seek to improve our operations.
3. Be professional
We should work to improve our expertiseand skills in our specialties through continuous self-development.
Action Characteristic
1. Speed
2. Challenge
3. Basic

7

Helping Recovery from the Great East Japan Earthquake
The shinkin bank industry has been providing ongoing and coordinated support for thereconstruction of disaster-affected areas
since immediately following the March 2011
earthquake and tsunami.
Four years have passed since the disaster, and fiscal 2015 is the final year of theintensive post-quake reconstruction period.
Currently, over 200,000 residents still live inshelters and the reconstruction of disasterareas is far from complete. There are concerns about the fading memories of thosein unaffected areas and, under such circumstances, local residents’ reliance on, andexpectations of, shinkin banks are becoming stronger. These shinkin banks, with theirstrong roots in the community, have longprovided the financial services necessary forbusiness operators and residents.
The initiatives we introduce here arethose addressed by the entire shinkin bankindustry, including the National Association of
Shinkin Banks (Zenshinkyo) and other relatedorganizations, by tapping shinkin bank networks nationwide.
We will strive to continue providing
industry-wide support until the reconstruction of the Tohoku region’s earthquakerelated disaster areas has been complete.
Donations to Reconstruction Project
In fiscal 2014, we offered the Shinkin no

Kizuna Reconstruction Support Fixed-term
Deposit at shinkin banks nationwide. This wasdone to assist the earthquake victims by providing post-disaster mental health care andhelping them rebuild their lives. We collected
a total of ¥58 billion, of which we donated¥145 million, or 0.25% of the total, to the
Shinkin no Kizuna Reconstruction Support
Project. The first subsidy was offered to 20
companies.
Tohoku Partnership Promotion
By tapping into industry and other networks,
we have been providing ongoing reconstruction support, and have participated in
the New Tohoku Partnership Promotion
Committee, set up by the Reconstruction
Agency. In fiscal 2014, we became membersof the Finance Network for Reconstruction
and the Distribution Channel Development
Support Team, as a result of which we wereable to share information and exchanged opinions regarding industrial reconstruction issues.
Employee Volunteer Activities
As part of its earthquake-related recovery
aid, since fiscal 2011 (ended March 31, 2012),
the SCB has been helping shinkin banks andrelated organizations nationwide support volunteer activities. About 2,000 executives andemployees have participated to date.

Support for Shinkin Banks
In November 2011, a new mutual support
system for the industry was establishedbased on the Act on Special Measures forStrengthening Financial Functions (known as
the Financial Functions Strengthening Act).
The system allows the disaster area’s shinkinbanks to smoothly provide long-term financial
intermediary functions in order to support
recovery and reconstruction.
In February 2012, four shinkin banks that
had been seriously damaged in the disasterwere provided with ¥63.0 billion in capitalincreases (¥54.7 billion of which represented
government capital participation), based on
the special law.
The SCB is providing these four shinkinbanks with ongoing support, which includes
sending personnel, providing advice, and monitoring the banks’ policies. This is designed sothat they might maintain their strong financial
intermediary role, and steadily implement
reconstruction-related strategies.
Shinkin Reconstruction FundThe SCB established the Shinkin no Kizuna
reconstruction support fund in December
2011, to support the revival of shinkin banks’customer businesses. At the end of March
2015, a total of ¥1,994 million had been committed for investment in 38 businesses in thedisaster area.

Shinkin executives and employees carryingout volunteer activities in the disaster area.

8

Shinkin Central Bank Annual Report 2015

Overseas Network
The SCB has offices in New York, Hong
Kong, Shanghai, Bangkok, and London. Bycollecting and analyzing information on local
economies, financial markets, investment
environments, and consumer markets, theseoffices enable the SCB to support Japan’s
shinkin banks.
The overseas representative offices also
help Japan-side human resource development
programs by accepting trainees, visitors andmissions from shinkin banks.
New York Representative OfficeSince the Overseas Economic Instituteo f t h e S C B o p e n e d i t s N e w Yo r k
office in November 1983, the New York
Representative Office has been researching US markets and assisting head office
explore new investment oppor tunities.
Taking advantage of its location at the centerof global financial activities, the New York
Representative Office is well placed to identify the latest financial markets trends andobtain information vital to the SCB’s treasury
operations.
The New York office offers wide-ranging
support by providing shinkin banks withinformation on the fast-changing US economy and financial markets.
Hong Kong Representative OfficeSince the SCB established a Hong Kong
business off ice in November 1994, theRepresentative Office there has supported
the activities of shinkin bank customers in
Asian countries. This it has done by providing information such as that on local
bank services, legal systems, tax systems,
and employment, particularly for its customers in southern China. The Hong Kong
Representative Office, meanwhile, provides
shinkin banks and their customers with economic and financial data, and information on
the investment environment in Asian countries.
Shanghai Representative Office
Set up in September 2004, the Shanghai
office has been providing information relating to economic and financial conditions,the investment and loan environment, andthe laws, taxation regimes and employment situation of each region. The Shanghai
Representative Office also has been offering
support and detailed advice to shinkin bankcustomers moving to China and those planning such a move in the future.
Bangkok Representative OfficeThis office opened in October 2012, andprovides shinkin bank customers expanding,or planning to expand, to Thailand, Vietnam,
and Indonesia with information on the rel-evant economic and financial conditions, theinvestment and financing environment, as
well as local laws, taxation, and employment.
The office also offers advice and a variety of
support.

policy of strengthening its support infrastructure for shinkin bank customers undertaking
overseas business expansion.

Shinkin International Ltd. (London)
This wholly owned subsidiary of the SCB,
was established in London in 1990 as anoverseas office to conduct securities business in order to expand investment opportunities for the shinkin bank sector.
The company arranges Eurobonds in astrong relationship with issuing bodies andoffers these securities to the shinkin banksector in close cooperation with Shinkin
Securities Co., Ltd., another subsidiary of the
SCB. The company also serves its customers’
secondary market-trading needs, and provides
the necessary market information the market.

Provision of Information
In addition to printed materials, such as theInternational Business Support Office Monthly
and the China Business Guidebook, the SCB
provides shinkin banks and their customers with up-to-date information in a variety
of formats, including overseas investment
seminars. From time to time we also provide
investment climate survey reports that focus
on Asia and the latest information from ouroverseas networks.
We have overseas networks in Hong
Kong, Shanghai, and Bangkok, where we holdinformation exchange meetings for shinkinbank customers that are expanding overseas.

Support for the Expansion of Overseas
Channels

Supporting Overseas Expansion

Alliances with Asian Banks

As globalization of the international economy
advances, the SCB anticipates that SMEs—
shinkin bank customers—will increasingly
look to expand overseas and engage in trading activities, particularly in China and other
Asian countries.
Thus, the SCB supports shinkin bankcustomers that are expanding overseas, specifically through SCB offices in Hong Kong,
Shanghai, and Bangkok.
Since 2010, the SCB has been advancing
business alliances with local Asian banks, inorder to better support the overseas business expansion in the region of shinkin bankcustomers. In October 2014, we concluded
a business alliance with Bank of Shanghai(China).
These relationships are part of the SCB’s

Trade and Investment Consultations
Staff with particular expertise hold phoneor interview-format trade and investment
consultations for shinkin bank customers
expanding or conducting business transactions overseas, and for those customers considering the prospects of overseas businessor conducting new transactions.
In the area of trade and investment, staff
with expertise in overseas business operations offer support to meet individual customer needs. Information is provided on
the local investment environment, local legal
issues, and domestic and overseas market
trends.

Expansion into Asia by Shinkin Bank Customers
South Korea: 86
China: 1,365

Hong Kong: 126
Taiwan: 78

Thailand: 422
Vietnam: 226

Philippines: 79
Malaysia: 68

Business Allianceswith Asian Banks• Bangkok Bank (Thailand)• Bank of Communications (China)• Bank of China (China)• Bank International Indonesia(Indonesia)• Joint Stock Commercial Bank for
Investment and Development ofVietnam (Vietnam)• The Bank of East Asia (Hong Kong)• Bank of Shanghai (China)

Singapore: 30
Indonesia: 156
Source: Tenth Survey on the Overseas Business of Shinkin Bank Customers (2013).

9

0.9%
¥145 Billion
19.7%¥3,238 Billion

Business Overview

5.1%¥835 Billion

1.3%¥214 Billion

59.5%¥9,767 Billion

9.5%¥1,558 Billion

Earnings Performance
Reviewing the SCB’s operating results for fiscal
2014, operating income decreased ¥2 billion($19 million) or 0.8%, to ¥278 billion ($2,315
million). This mostly was due to an increasein other income—such as a gain on the saleof stocks and other securities—despite adecrease in interest income, including interest
on loans and discounts, and securities’ interestand dividends.
Meanwhile, operating expenses decreased¥34 billion ($290 million) or 15.0 % to ¥197
billion ($1,639 million). This mainly was due toa decline in interest expenses, such as interest on deposits and debentures, as well as a
reduction in other operating expenses, including a loss on bond sales.
As a result, ordinary income was up ¥32
billion ($270 million) year on year to ¥81 billion ($675 million). Net income rose ¥25 billion ($211 million) year on year to ¥60 billion($506 million).
Funding
During fiscal 2014, the total amount of fundingrose ¥2,104 billion ($17,511million) or 7.2% toclose the year at ¥31,251 billion ($260,107 million). Deposits received during the fiscal year
totaled ¥25,565 billion ($212,778 million),
mainly due to an increase in fixed-term deposits at shinkin banks.
The SCB issued ¥639 billion ($5,319 million) worth of debentures during the fiscal
year. The outstanding amount of debentures
decreased ¥160 billion ($1,334 million) or 5.0%
to ¥3,007 billion ($25,033 million).
Asset Management
The amount of assets under management infiscal 2014 increased ¥2,352 billion ($19,582
million) or 7.6% to ¥33,041 billion ($274,998
million).
Mainly due to expanded corporate bondand foreign securities holdings, the outstanding amount of invested securities grew ¥681
billion ($5,673 million), or 3.6%, to reach¥19,132 billion ($159,235 million) at fiscal yearend.

As a result chiefly of a decrease in loans
to companies, loans and bills discounted
decreased ¥90 billion ($749 million) or 1.5%
during the year under review to ¥5,885 billion($48,986 million).
The outstanding amount of short-termmoney market assets rose ¥1,763 billion($14,675 million) year on year, or 29.5%, to¥7,730 billion ($64,338 million). This primarily reflects Bank of Japan current deposit
increases.
Securities
As of March 31, 2015, the outstanding amountof securities was ¥19,132 billion ($159,235 million). Government bonds, corporate bonds,
and other domestic securities accounted for¥15,040 billion ($125,176 million), and foreign
securities for ¥4,092 billion ($34,058 million).
In terms of foreign securities, the SCB mainly
invests in safe assets, which include government-secured financial institution bonds andgovernment-agency bonds in major developed
countries.
In order to advance its diversified investment portfolio, the SCB also invests in suchrisk assets as stocks and investment trust
funds not subject to interest risk, while taking
steps to optimize its portfolio in response toshifts in the financing and investment environment.
Loans and Bills Discounted
The SCB conducts a variety of loan-related
business. As of March 31, 2015, the outstanding amount of loans and bills discounted was¥5,885 billion ($48,986 million). Of the total
amount, loans to shinkin bank customers
through those banks accounted for ¥265 billion ($2,212 million), while direct loans to suchparties as national or governmental agencies
and organizations, regional public corporations, and charitable organizations accountedfor ¥3,212 billion ($26,741 million). Directloans to business corporations accounted for¥1,914 billion ($15,937 million).

Ordinary Income and Net Income (Non-consolidated)

10(Millions of yen)

FY2010FY2011FY2012FY2013

FY2014

Ordinary income (loss)

36,66235,575

41,16348,651

81,198Net income (loss)

27,38729,00732,02435,39660,817

Breakdown4.0%
of Funding¥651 Billion(As of March 31, 2015)

Government Bonds
Municipal Bonds
Corporate Bonds
Securities
Investment Trusts
Foreign Securities
Others8.6%¥2,673 billion
9.6%¥3,007 billion
19.7%¥3,238 Billion
0.0%¥5.81.3%
billion¥214 Billion

5.1%¥835 Billion81.8%¥25,565 billion
59.5%¥9,767 Billion

9.5%¥1,558 Billion

4.0%

Deposits
Government
Bonds
Negotiable
Deposits
Municipal Bonds
Debentures
Corporate
Bonds
Borrowed Money
Securities
Investment Trusts
Foreign Securities
OthersBreakdown¥651
of Asset
Management
Billion(As of March 31, 2015)
0.4% ¥132 billion

23.4%¥7,730 billion

0.5% ¥160 billion
17.8%¥5,885 billion

Short-term Market
Operation
57.9%¥19,132 billion

Securities
Loans and Bills
Discounted
Trading Assets
Money Held in Trust

Breakdown of Securities(As of March 31, 2015)

1.3%¥251 billion
21.4%¥4,092 billion
2.9%¥560 billion
19.7%¥3,238 Billion
14.8%¥2,8291.3%
billion¥214 Billion

58.7%¥11,223 billion
5.1%¥835 Billion
0.9%
59.5%
¥175 billion¥9,767 Billion

9.5%¥1,558 Billion

Government Bonds
Municipal Bonds
Corporate Bonds
Stocks & Investment
Trust
Funds Bonds
Government
Foreign
Securities
Municipal
Bonds
OthersCorporate Bonds
Securities
Investment Trusts

Breakdown4.0%
of Loans and Bills
Foreign Securities¥651 Billion
Discounted (As of March 31, 2015)Others
8.4%¥492 billion

National andGovernmental
Agencies andOrganizations

4.5%¥265 billion

32.5%¥1,914 billion

48.3%¥2,843 billion

Regional Public
Corporations
and Charitable
Organizations
and Others
Business
Corporations

6.3%¥369 billion

Agency Loans
OthersShinkin Central Bank Annual Report 2015

Capital Adequacy
OutlineThe SCB’s equity capital, as defined underregulations concerning capital adequacy ratios,
mainly comprises common shares from member shinkin banks, public issues of preferredshares that supplement common shares, andinternal reserves accumulated to date by the
SCB. As per the application of transitional
measures based on new domestic Japanesestandards, equity capital also includes fixedperiod and perpetual subordinated loans.
Measures to Enhance Capital Adequacy
Based on the recognition that increasing
equity capital is the most important way tosecure the sound management of financial
institutions, the SCB has raised capital inphases while working to accumulate internal
reserves.

Capital Raising
The SCB plans to raise ¥200 billion in specificcommon shares from the shinkin bank sector,
with September 30, 2015 as the payment date,in order to improve and enhance its financial
position in preparation for possible changes in
the regulatory framework.
The SCB is permitted to raise funds
through the issuance of general commonshares and specific common shares. In order
to execute a capital increase using com-

mon shares without causing a dilution in the
distribution of residual assets for preferredshareholders, the bank has amended part ofits Articles of Incorporation. As a result, thedistribution of residual assets regarding specific common shares should be up to one unit(¥100,000) of contribution, the same amountof payment (¥100,000) as in the case of acapital increase.
Therefore, there is no dilution in the distribution of residual assets for the preferredshareholders, and we have no plan to takeanti-dilution measures.
Note: ‌If the capital increase by general common sharesis determined, instead by specific common shares,
a dilution will be caused in the distribution ofresidual assets for preferred shareholders. In thiscase, there is no change in the normal policy toconduct anti-dilution measures.

Consolidated Capital Adequacy Ratio
The SCB’s consolidated capital adequacy ratio
at March 31, 2015, was 36.40%.
Equity capital, the numerator for calculating the capital adequacy ratio, amounted to¥1,656 billion ($13,790 million).
Risk assets, the denominator for calculating the capital adequacy ratio, amounted to¥4,551 billion ($37,880 million).

Risk Management and Capital Adequacy
Assessment
To maintain capital adequacy against the risk
level, the SCB has implemented policies tomanage its capital adequacy. As part of its
integrated risk management, the capital assessment division evaluates the capital adequacy using a holistic approach, measuring
various types of risks under uniform criteria
and comparing quantified risks with the
SCB’s capital.
By adopting integrated risk management
as a method of assessing capital adequacy, the
SCB sets limits on the amount of risks according to the amount of capital allocated to eachcategory and thereby controls risks withinthese limits.
In order to monitor the potential impactsof shocks on its capital, the SCB further
conducts stress testing to estimate losses
under various scenarios, taking into accountthe gravity of each case and probability of its
occurrence.
The situation regarding risk limits and theamount of risk exposure is reported to senior
management at the Risk Management Committee and at other meetings. Furthermore,in principle, the Risk Management Committee
deliberates on measures in response to theresults of capital adequacy assessments, andimplements 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)
FY2010
31.76
1,344
4,233
31.78

FY2011
32.43
1,379
4,253
32.54

FY2012
33.57
1,422
4,236
33.42

FY2013
37.86
1,692
4,469
37.84

FY2014
36.40
1,656
4,551
36.46

Note: Figures for FY2010 through FY2012 are based on the previous standard, while figures for FY2013 and FY2014 are based on the new standard.

11Asset Quality
Risk-Monitored Loans
The amount of risk-monitored loans as of theend of March 2015 was ¥123 million ($1million) for loans to bankrupt borrowers,¥11,494 million ($95 million) for delinquentloans, ¥28 million ($0.2 million) for loans past
due three months or more, and ¥31,452

million ($261 million) for restructured loans.
Total risk-monitored loans increased ¥5,226
million ($43 million) to ¥43,099 million ($358
million) during the fiscal year.
The ratio of total risk-monitored loans tototal loans remained as low at 0.73%, and theRisk-monitored Loans (Non-consolidated) (%, millions of yen)
End of March
2014
125
8,734
86
28,92637,873Loans to bankrupt borrowers
Delinquent loans
Loans past due three months or more
Restructured loans
Total risk-monitored loans (A)Partial direct write-offs
Total loans (B)Ratio of total risk-monitored loans to total loans (%) (A/B)

soundness of the SCB’s loan assets remainedhigh.

End of March
2015
123
11,49428
31,45243,099

Increase or
decrease
(2)
2,760
(58)
2,526
5,226

951

584

(367)

5,975,832
0.63

5,885,739
0.73(90,093)
0.1

End of March
2014
125
8,734
86
28,92637,873End of March
2015
123
11,49428
31,45243,099Risk-monitored Loans (Consolidated)

(%, millions of yen)

Loans to bankrupt borrowers
Delinquent loans
Loans past due three months or more
Restructured loans
Total risk-monitored loans (A)Partial direct write-offs
Total loans (B)Ratio of total risk-monitored loans to total loans (%) (A/B)

Increase or
decrease
(2)
2,760
(58)
2,526
5,226

951

584

(367)

5,975,834

5,885,741
0.73(90,093)
0.1

0.63

Asset Assessment under
the Financial Reconstruction Law

As of the end of March, 2015, bankrupt andquasi-bankrupt assets amounted to ¥863
million ($7 million), doubtful assets ¥10,754
million ($89 million), and substandard assets¥31,481 million ($262 million).
Accordingly, the total amount of bad debts
under the Financial Reconstruction Law rose
¥5,226 million ($43 million) to ¥43,099 million($358 million).
The coverage ratio of bad debts (the totalof claims deemed collectible with collateral andguarantees and the allowance for possible loan
losses divided by total bad debts) was 70.22%.
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.

Asset Assessment under the Financial Reconstruction Law (Non-consolidated)
Bankrupt and quasi-bankrupt assets
Doubtful assets
Substandard assets
Total claims under the 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)

12

End of March
2014
758
8,102
29,01237,8736,030,135

For substandard assets, the anticipatedloss ratio is calculated based on the loan loss
ratio and recorded in the general allowance for
doubtful accounts.

(%, millions of yen)

End of March2015
863
10,754
31,48143,0995,964,342

Increase or
decrease
105
2,652
2,469
5,226
(65,793)

951

584

(367)

6,068,008
0.62

6,007,441
0.71(60,567)
0.09

27,84230,26570.22

2,423(3.29)

73.51

Shinkin Central Bank Annual Report 2015

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

Capital Adequacy Ratio (%)(As of September 30, 2014)38.29%NPL Ratio (%)(As of September 30, 2014)

2.46%

16.01%

1.29%

12.45%

Long-term Credit Rating

0.61%
SCB

City Banks Regional BanksSCB(As of July 31, 2015)
City Banks Regional Banks

36.40%

0.73%(As of March 31, 2015)(As of March 31, 2015)

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

Note: NPL ratio = total risk-monitored loans/total loans.
Source: Japanese Bankers Association

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

Ratio of Expenses (%)(Millions of U.S. dollars)(As of September 30, 2014)(As of September 30, 2014)

0.95%

217

0.81%

34
SCB

16

City Banks Regional Banks

0.08%
SCB

City Banks Regional Banks$197Million

0.08%

Notes:	1. Total funds = deposits+CDs+debentures
2. U S dollar amounts are conver ted forconvenience only, at ¥109.45 and ¥120.15
per US$1.00, the prevailing rate on September 30, 2014 and March 31, 2015, respectively.
Source: Japanese Bankers Association

Note:(As of March 31, 2015)(As of March 31, 2015)

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

13

Corporate Governance
The SCB strives to maintain fairness andtransparency in its management by fortifying
our corporate governance system as we
implements 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 anever more distinguished financial institution
well respected in society.
Institutional Structure
General Assembly of Representatives (General
Meeting)
The SCB is a cooperative financial institution
comprising of 267 shinkin banks nationwide (asof March 31, 2015) 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.
The Board of Directors includes 12 fulltime directors, and 18 part-time directors. In
accordance with Article 32-4 of the Shinkin
Bank Act, the SCB’s Articles of Incorporation
stipulate that more than half the total numberof board members must be executive officersof shinkin banks. As such, part-time directors
are selected from among the presidents
or board chairs of shinkin banks from eachregion in Japan. There are no board members
corresponding to the outside directors as
defined by the Companies Act.
The SCB is confident that the appropriate
check on management provided by the parttime directors ensures that supervision andsafeguard functions are in place and have ahigh degree of objectivity and transparency inbusiness operations.
Auditors
The SCB’s auditors, comparable to the corporate auditors of a joint-stock company, audit
the execution of the duties by the directors.
The SCB selects one full-time auditor andtwo part-time auditors from among the presidents and board chairs of shinkin banks, andtwo part-time auditors who are not executivesof the SCB or shinkin banks (non-member
auditors), equivalent to outside auditors as
defined by the Companies Act. Non-member
auditors are selected from among persons whomeet the requirements stipulated in Article
32-5 of the Shinkin Bank Act. There are no
stipulations of standards or guidelines regarding independence for the selection of nonmember auditors. The SCB is confident that
non-member auditors are able to utilize theirprofessional knowledge and experience to con-14

duct audits from an independent perspective.
One of the non-member auditors is acertified accountant with a wealth of knowledge and experience regarding finance andaccounting.
There are no particularly notable conflictsof interest between the SCB and non-member
auditors.
General Meeting for Preferred Shares
The SCB’s preferred shares are listed on theTokyo Stock Exchange (see page 22).
Preferred shareholders have no voting
rights at the General Assembly of Representatives. However, a general meeting forpreferred shareholders may be held to protect
their property rights under the Law Concerning Preferred Shares of Cooperative Financial
Institutions.
Part-time Directors and Auditors
The General Affairs Division provides information and other support for part-time directors,
and the staff members exclusively assisting
auditors under their direction provide the samefor part-time auditors, in order to facilitate thetimely and appropriate execution of duties by
part-time directors and auditors.
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 the Boardof Directors and those to be reported to theBoard 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 resolutions are carried out
on a cross-organizational basis, each committee comprises several directors and generalmanagers 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
check functions.
AuditsTo facilitate audits of the directors’ executionof duties, the auditors at the SCB attend
meetings of the Board of Directors and otherimportant meetings. The auditors also receive
reports from directors regarding their execution of duties and inspect the minutes of the

Executive Committee and other important
documents. In addition, the auditors conduct
regular meetings with the independent auditors to exchange opinions and information.
In addition, exclusive staff members are
assigned to assist the auditors under theirdirection, so as to facilitate the timely andappropriate execution of duties by the auditors.
Internal Audit System
The SCB is building an internal audit systemthat aims to realize efficient and effective business operations by utilizing the Internal Audit
Division that is independent from operational
divisions and branches. 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, andreceives audits conducted by the company.
In addition, the SCB utilizes the expertiseof outside specialists, including independent
auditors, attorneys, and tax accountants. To
effectively handle more sophisticated anddiversified operational requirements, the SCB
consults with, and receives advice from, suchspecialists on a regular basis and as the needarises.
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.

Shinkin Central Bank Annual Report 2015

Strengthening the 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.
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, reports
from the heads of the divisions or branches concerned are promptly called for, andappropriat actions are taken to prevent 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 Bank
Law 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
lawyerAuditors

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

Gene

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

Risk Management Committee

Directors (full time)

Executive Committee
Board of Directors

15

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 believes that its future depends onrisk management, and that a strong risk management system is a prerequisite for maintaining
sound management and securing adequate profits.
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. Risk
is managed by divisions that are independent
from those involved in business operations.
The Risk Management Division coordinates
the management of different risks to provide
comprehensive risk management.
The SCB has also established five 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 independent 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 their aggregated 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 underregulations concerning capital adequacy ratios.
The SCB defines capital under its integrated risk management system and allocates risk limit amounts for operationalrisk and other types of risk.1 Separately, theSCB estimates losses under various stressscenarios as part of its efforts to monitor
potential impacts on capital.
The quantitative risk limits and reserveamounts for each fiscal year are determined by
the Executive Committee following deliberation by the Risk Management Committee. The
Risk Management Division, which oversees
integrated risk management, measures theamount of risk exposure both during and at theend of each month, 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.
Note
1. 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 and Definitions

Risk Categories
Market risk

Risks that must
Liquidity risk
be controlled

Risks that must
be minimized

Risk Definitions
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, andexchange rates. This includes the risk of loss due to changes in earnings generated by assets andliabilities.
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 off-balance-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).

16

Shinkin Central Bank Annual Report 2015

Overview of the SCB’s Risk Management System
Board of Directors
Division responsible for asset assessment
Credit Planning & Supervision Division

Executive Committee

Risk Management
Committee
Division responsible for integrated risk
management

Divisions responsible forthe overall management of operational risk

Risk Management Division

Risk Management Division

Divisions responsible for capital adequacy

CreditCommittee

ALM
Committee

Division responsible for
credit assessment
Credit Planning & Supervision Division

Division responsible for market risk
management
Risk Management Division

Division responsible for administrativerisk management

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

Divisions responsible for liquidity risk
management

Operations Division

Division responsible for information
technology risk management

Divisions responsible for credit control

Risk Management Division, Credit
Planning & Supervision Division

Systems Division

Risk Management Division

Divisions responsible for the
management of other operational risk

Financial Management Division

Divisions stipulated by Risk
Management Division

The SCB’s Market Risk Management Framework
Board of Directors
Executive Committee
Decisions

Matters for discussion

Risk Management Committee
ALM Committee
Decisions

Decisions

Reports, etc.

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 relatingt o m arke t risk m an age me nt . The A LM
Committee comprises senior management
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 fund-raisingand 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.
Note: ‌Market risk includes interest rate risk and such
equity-related risk as stock price fluctuation risk.

In addition, the SCB manages market
risk by monitoring a wide range of measures
under various scenarios. These include theinterest rate risk amount calculated using
outlier standards; the possible stress loss
during a period of very high market volatility;
the basis-point-value (BPV) indicator, whichmeasures the potential change in portfolio
market value for every 0.01 percentage point
fluctuation in interest rates.
The status of these risk management
activities is reported to senior management at
biweekly meetings of the ALM Committee.
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

17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 assessments of credit strength, each borrower isgiven a credit rating on the SCB’s 10-stepscale. The credit ratings given to borrowers
are reviewed regularly, and flexibly revised asnecessary.

18

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 aswell as changes in portfolio credit risk. Furthermore, credit risk is quantified and managed within the risk limit set by the Executive
Committee.
The credit risk amount is measured using
VaR as well as the Monte Carlo simulation
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 checks 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 rapidly
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.
Note: ‌Credit risk includes such risk as counterpar ty
risk for derivative transactions and securitizationtransaction 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 operating processes at all branches. The SCB also
controls the entire process of administrativerisk management, from the identificationof 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.
In the event of a system failure that
seriously affects the execution of business
operations, a Bank-wide response is triggered
based on crisis management procedures(contingency planning). The SCB also periodically conducts crisis response drills, based on
system failure crisis scenarios.
To prevent damage caused by system
failure, the SCB has issued a security policy
and undertakes internal communications
programs to ensure that all directors andemployees have a thorough understanding of
the SCB’s security policy.

Shinkin Central Bank Annual Report 2015

Corporate Social Responsibility Activities
The SCB aims to be a financial institution highly valued throughout society.
The SCB consistently strives to conduct its duties according to its management philosophy: As the central bank for all shinkinbanks, the SCB supports the growth of the shinkin bank sector, thus contributing to economic development throughout Japan.
The Bank’s duties include assisting shinkin banks handle regional and SME financing, as well as maintaining and improving
the credibility of the shinkin bank industry, so as to contribute to the development of local economies as well as the shinkinbank industry.
The SCB believes that it should fulfill its corporate social responsibility (CSR) steadily performing its duties, that is, playing
a leading role as the central bank for shinkin banks and practicing its management philosophy.
Regional Financial Institution
Since the SCB’s funds are principally deposits
received from many local shinkin banks, we
believe it appropriate that they be used forthe social and economic development of local
communities.
To this end, the SCB is working on making available direct loans for local public agencies and business entities.
Further, in collaboration with shinkinbanks, the SCB contributes to the development and revitalization of local communities
by providing support for syndicated loans, private finance initiatives, and SMEs according totheir life stage, as well as promoting regional
industry research and local contributions.
Provision of Financial Products
Charitable Trusts
Shinkin Trust Bank, Ltd., a wholly owned
subsidiary of the SCB, sets up and manages
charitable trusts on behalf of individuals andcompanies, in order to contribute to activities
for the public good, including environmental
conservation, scholarships, academic research, and subsidies for social welfare.

Socially Responsible Investing (SRI) Funds
Shinkin Asset Management Co., Ltd., a wholly
owned SCB subsidiary, offers the Shinkin SRI
Fund, which focuses on the social responsibility of companies and investments.
SRI is based on the philosophy that“companies with the best potential for steady
growth are those that maintain sustainableeconomic growth by fulfilling their corporatesocial responsibilities.” Consequently, SRI
funds investment on the basis of research andanalysis carried out from a broad range ofperspectives, including financial, environmental, social, and ethical considerations.

Community and Environmental
As part of its efforts to contribute to local
communities, the SCB sponsors Metrolink Nihonbashi, to realize human- and environmentfriendly transportation in the Tokyo metropolitan government’s urban planning vision.
Metrolink Nihonbashi uses low-emission,
low-noise electric buses that provide a highdegree of accessibility through a low-floor
design. The buses serve a circular route thatruns through Nihonbashi and Yaesu, near to
the SCB’s head office, providing shoppers andpeople working in the area with a transportation option that is convenient and free ofcharge. This service aims to revitalize the local
area by helping to improve the environmentand by attracting shoppers and sightseers.
In addition, to promote the spread ofmusic and the arts, and contribute to the advancement of culture in society, the SCB is asponsor of the Tokyo Philharmonic Orchestra.

Assisting Local Society
Shinkin banks are born of their communities,
and develop together with them. The Shinkin
Bank Social Contribution Award was createdin 1997 to help publicize the shinkin bank industry’s dedication to community and social
contributions in a wide range of fields, and tofurther enhance the value of shinkin banks inthe community.
The 18th Shinkin Bank Social Contribution Award elicited submissions for 559 social
contribution initiatives in a wide range ofareas, from 160 shinkin banks and five relatedorganizations, between November 2014 andJanuary 2015. Activities were evaluated on thebasis of continuity, social significance, integrity
with the community, and impact on the local
society. Awards were presented for activities
at six shinkin banks, with individual prizes
conferred on three people, as good examples
for shinkin bank employees.

Metrolink Nihonbashi

Shinkin Bank Social
Contribution Award

Contributing to SocietyWith branches and offices throughout Japanand overseas, the SCB aims to contribute not
only to local communities, but also to society
in the broadest possible way.
The SCB has become a supporter of theTable For Two program, a social contribution
project that began in Japan. Table For Two enables consumers to contribute to famine relief
efforts in developing countries, while enhancing their health. When a customer purchases
an item on the healthy menu offered at the
SCB head office cafeteria, part of the priceof the meal (¥20) is donated to a developing
country.

19

What Are Shinkin Banks?
Shinkin banks are cooperative financial institutions. Their membership comprises local
residents and small and medium-sized companies. Shinkin banks’ distinctive characteristics
are that they (1) are close and convenient, (2)offer fine-tuned, personalized services, and(3) have a strong relationship of mutual trustwith their customers and communities.
Cooperative financial institutions are organizations 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 the Banks
Japan’s 267 shinkin banks form an extensive
network, with approximately 7,400 locations
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 theirrespective regions and contribute to regional
development.
Total deposits outstanding at 267 shinkinbanks as of March 31, 2015, reached approximately ¥131 trillion ($1,098 billion), which ranks
after Japan’s city and regional banks, and gives
shinkin banks an important position in Japanesefinancial markets.
Shinkin banks continue to further deepen
their presence and roles as important infrastructure for regional economies and communities.

Deposits Outstanding by
Bank Segment (As of March 31, 2015)(Billions of U.S. dollars)

City Banks
Regional BanksManagement improvement / enterprise renewal

Co-financing

Succession support / M&A

Product and service expansion

Overseas expansion

Personal lending businessBusiness start-up

Local-area revitalization

Shinkinbank

Hokuriku (17 banks)
Kinki (29 banks)

Hokkaido (23 banks)

Chugoku (21 banks)
Tohoku (27 banks)

Kyushu (28 banks)

Kanto (49 banks)

Tokyo (23 banks)
Tokai (39 banks)

Okinawa (1 bank)

Shikoku (10 banks)

Deposits Outstandingat Shinkin Banks

1,098

Agricultural Cooperatives

779

Second-tier Regional Banks

526

Credit Cooperatives

159

Labor Credit Associations

152

Loan and Bills Discounted
Outstanding at Shinkin Banks(Trillions of yen / billions of U.S.dollars)(Trillions of yen / billions of U.S.dollars)
131.9<1,098>2,019

Shinkin Banks

Shinkinbankcustomers

Nationwide Network of Shinkin Banks$2,529Notes: 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

20

Shinkin Bank Services

119.7<1,440>

2011

122.5
<1,490>

2012

124.8
<1,327>

2013

128.0
<1,244>

2014

2015

Note: Items in parentheses are US dollar amounts.
	They are given for convenience only, withconversion at ¥83.15, ¥82.22, ¥94.10, ¥102.94,
and ¥120.15 per US$, the prevailing rate on
March 31, 2011, 2012, 2013, 2014, and 2015,
respectively.
Source: The SCB.

63.7
<766>

63.7
<775>

63.6
<676>

2011

2012

2013

64.4
<626>

2014

65.8
<547>

2015

Note: Items in parentheses are US dollar amounts.
	They are given for convenience only, withconversion at ¥83.15, ¥82.22, ¥94.10, ¥102.94,
and ¥120.15 per US$, the prevailing rate on
March 31, 2011, 2012, 2013, 2014, and 2015,
respectively.
Source: The SCB.

Shinkin Central Bank Annual Report 2015

Capital Adequacy Ratio of Shinkin Banks
12.85%

12.67%

2011

13.04%

13.16%

2013

2014

2012

The capital adequacy ratio of shinkin banks asof March 31, 2015, increased 0.01 percentage
point over the previous fiscal period to 13.17%(preliminary figure).
The capital adequacy ratio of shinkin banks
maintains a standard which is by no means
inferior compared with other business categories, and is outperforming the standardsof other domestic regional banks (10.59%) or
second-tier regional banks (9.92%).

13.17%

2015(Preliminary Figure)

Source: The SCB

Non-consolidated
Capital Adequacy Ratio
by Bank Segment (%)

Nonperforming-loan Ratioof Shinkin Banks (%)(as of March, 31, 2015)16.86%
6.80%

13.17%
10.59%

Shinkin
Banks

City Banks(Preliminary Figure)9.92%

Regional Second-tierBanks Regional Banks

6.84%
6.45%

6.44%

5.91%

2011

2012

2013

2014

Sources: Bank disclosure document,
Regional Banks Association of JapanThe Second Association of Regional Banks

2015(Preliminary Figure)(Domestic)

Source: The SCB

The Difference between Shinkin Banks and Commercial Banks
Category

Shinkin Banks

Commercial Banks

Legal foundation

Shinkin Bank Act

Banking Act

Organization

Cooperative organizationFor-profit joint stock
corporations

Membership qualifications• Those who have an address or location inNone

the region• Those who have a business office in the region• Those who work in the region21Preferred Shares
The SCB’s 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.
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, andbasically apply the same listing criteria anddisclosure rules with them.
Trading of Preferred Shares
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 forstocks.
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 at 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.
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 2014, the dividend for preferredshares was ¥7,000 ($58) per share, which

Composition of Preferred Shares (March 31, 2015)
・Number of Investors (Total 19,989)
Foreign institutions
and others
56(0.3%)
Other corporations
201(1.0%)
Financial institutions
211(1.1%)

Other corporations
39,372(5.6%)(Closing price,
in yen)First day of listing (December 22, 2000) 200,500
Foreign institutions
and others
4,490(0.6%)

Highest price (March 15, 2006)

311,500

Lowest price (April 14, 2009)

102,400

Closing price (July 31, 2015)

224,800

Note:	The price of preferred shares are split-adjusted,	reflecting the stock split of preferred shares witha recorded date of July 31, 2009.

Individuals
117,842(16.6%)
Individuals
19,513(97.6%)

22

Price of Preferred Shares

・Number of Subscription (Total 708,222)
Securities companies
6,729(1.0%)

Securities companies
8(0.0%)

included a preferred dividend of ¥3,000 ($24)
and a participating dividend of ¥3,500 ($29),
plus a special dividend of ¥500 ($4).

Financial institutions
539,789(76.2%)

Financial Section

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

23Five-Year
Summary(Consolidated)
Five-Year Summary(Consolidated)(Millions of yen)
FY2010FY2011FY2012FY2013

FY2014

Total Income

361,820395,277

408,917308,171

307,894

Total Expenses

322,361

357,662

367,469

255,548

223,028

Net Income

27,88729,80532,862

37,612

62,696Comprehensive Income

35,97063,791

171,545

48,004

173,512Net Assets

1,043,267

1,092,354

1,249,229

1,276,826

1,433,756

Total Assets

31,502,697

30,248,492

30,410,702

31,184,564

33,516,073

Net Assets per Share (yen)219,425.69

229,768.12

263,016.93

268,795.17

301,997.98

Net Income per Share (yen)5,471.96

5,879.26

6,528.60

7,537.36

12,865.13

14,603

14,603

16,603

16,603

18,957

Common Shares

10,00010,00012,00012,00014,000Preferred Shares

4,603

4,603

4,603

4,603

4,957

Dividends

Notes:
1. Consumption tax and local consumption tax incurred by the Bank and its domestic consolidated subsidiaries are excluded
from transaction amounts.
2. Net assets per share is obtained by deducting preferred dividends from net assets and is divided by the number of shares atterm-end. This calculation complies with ASBJ (Accounting Standards Board of Japan) statement No. 2, September 25,
2002 “Accounting Standards for Earnings Per Share” and ASBJ Guidance No. 4, September 25, 2002 “Guidance on
Accounting Standards for Earnings Per Share”.
3. Net income per share is obtained by dividing the value obtained by deducting preferred dividends from current profit. This
calculation complies with ASBJ statement No. 2, September 25, 2002 “Accounting Standards for Earnings Per Share” andASBJ Guidance No. 4, September 25, 2002 “Guidance on Accounting Standards for Earnings Per Share”.

24Consolidated Balance Sheet
Consolidated Balance Sheet
Millions of Yen
Shinkin Central Bank As of March 31,
AssetsCash and Due from Banks (Note 2 (2), 9, 24)
Bills Bought and Call Loans (Note 24)
Receivables under Resale Agreements (Note 24)
Receivables under Securities Borrowing Transactions (Note 24)
Monetary Debts Purchased (Note 24)
Trading Assets (Note 3, 9, 24, 25)
Money Held in Trust (Note 24, 25)
Securities (Note 4, 7, 9, 24, 25)Loans and Bills Discounted (Note 5, 6, 9, 24)
Foreign Exchanges Assets
Other Assets (Note 9)
Tangible Fixed Assets (Note 8, 14, 23)
Intangible Fixed Assets (Note 23)
Deferred Tax Assets (Note 21)
Customers’ Liabilities for Acceptances and Guarantees
Reserve for Possible Loan Losses
Reserve for Investment Losses
Total Assets

Liabilities and Net Assets
Liabilities
Deposits (Note 24)
Debentures (Note 12, 24)
Trading Liabilities (Note 10, 24)
Borrowed Money (Note 9, 11, 24)
Bills Sold and Call Money (Note 9, 24)
Payables under Repurchase Agreements (Note 9, 24)
Payables under Securities Lending Transactions (Note 9, 24)
Foreign Exchanges Liabilities
Other Liabilities (Note 13)
Reserve for Employee Bonuses
Reserve for Directors' Bonuses
Net Defined Benefit Liability(Note 22)
Reserve for Directors' Retirement Allowances
Reserve under Specific Law
Deferred Tax Liabilities (Note 21)
Deferred Tax Liabilities for Land Revaluation (Note 14)
Acceptances and Guarantees
Total Liabilities

Net Assets
Common Shares and Preferred Shares (Note 20)
Capital Surplus
Retained Earnings
Total Shareholders' Equity
Net Unrealized Gains (Losses) on Other Securities (Note 21, 25)
Net Deferred Gains (Losses) on Hedging Instruments (Note 21, 26)
Land Revaluation Excess (Note 14)
Foreign Currency Translation Adjustments
Remeasurements of Defined Benefit Plans (Note 22)
Total Accumulated Other Comprehensive Income
Minority Interests
Total Net Assets
Total Liabilities and Net Assets
The accompanying notes are an integral part of these financial statements.

Millions of
U.S. Dollars(Note 1)
2015

2015

2014

6,861,925
510,601
49,987
142,726
231,858
217,866
132,774
19,101,480
5,885,741
9,178
87,29475,67914,687
3,370
234,952(44,051)
33,516,073

4,938,807
578,351
86,980173,390
269,583
237,261
132,854
18,418,791
5,975,834
5,212
137,41373,92915,537
3,896
176,908(40,183)(5)
31,184,564

57,111
4,249
416
1,187
1,929
1,813
1,105
158,980
48,986
76
726
629
122
28
1,955
(366)
278,951

25,555,350
3,000,680
146,314935,320
415,108
73,944
1,299,828
264
272,465
1,616
80
27,906524
1111,851
6,106
234,952
32,082,317

23,677,799
3,161,810
158,537
937,320
408,067
35,437
966,659558
282,706
1,593
78
28,414508
165,2306,106
176,908
29,907,738

212,695
24,974
1,217
7,784
3,454
615
10,818
2
2,267
13
0
232
4
0
930
50
1,955
267,018

490,998
100,678
497,099
1,088,776
440,090(114,477)
13,457(1,285)(2,563)335,222
9,758
1,433,756
33,516,073

490,998
100,678
450,930
1,042,607
286,413(69,436)
13,441(1,865)(3,489)225,064
9,154
1,276,826
31,184,564

4,086
837
4,137
9,061
3,662
(952)
112
(10)
(21)
2,790
81
11,933278,95125

Consolidated
Statement of Income
Consolidated Statement of Income
Millions of
U.S. Dollars(Note 1)
2015

Millions of Yen
Shinkin Central Bank For the year ended March 31,
IncomeInterest Income:Interest on Loans and Discounts
Interest on Due from Banks
Interest on Bills Bought and Call Loans
Interest on Receivables under Resale Agreements
Interest on Receivables under Securities Borrowing Transactions
Interest and Dividends on Securities
OthersFees and Commissions (Note 15)
Trading Income (Note 16)
Other Operating Income
Other Income (Note 18)
Total Income

Expenses
Interest Expenses:
Interest on Deposits
Interest on Debentures
Interest on Borrowed Money
Interest on Bills Sold and Call Money
Interest on Payables under Repurchase Agreement
Interest on Payables under Securities Lending Transactions
OthersFees and Commissions (Note 15)
Trading Losses (Note 17)
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses

Income before Income Taxes and Minority Interests
Income Taxes (Note 21):
Current
Deferred
Total Income Taxes
Income before Minority Interests
Minority Interests in Net Income
Net Income

Net Income per Share (Note 29)
Dividend Declared per Share (Common Shares)
Dividend Declared per Share (Preferred Shares)
The accompanying notes are an integral part of these financial statements.

26

2014

2015
219,763
27,652
7,481
1,107
58
279
181,761
1,422
37,122
18,83622,542
9,630
307,894

230,006
33,258
6,495
891
104
367
186,990
1,898
34,287
15,462
21,355
7,060
308,171

1,829
230
62
9
0
2
1,512
11
308
156
187
80
2,562

130,841
48,542
13,921
11,224731
97
2,237
54,086
12,363
231
29,092
46,1604,337
223,028

141,383
53,32023,540
9,701
696
1
2,621
51,502
11,301
224
45,58444,89012,164
255,548

1,088
404
115
93
6
0
18
450
102
1
242
384
36
1,856

84,86652,622706

18,9882,594
21,58363,282586
62,696

3,282
11,021
14,30438,318706
37,612

158
21
179
526
4
521

2014
7,537.36
3,000.00
6,500.00

U.S. Dollars
2015
107.07
29.13
58.26

Yen
2015
12,865.13
3,500.00
7,000.00

Consolidated
Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income
Millions of Yen
Shinkin Central Bank For the year ended March 31,
Income before Minority Interests
Other Comprehensive Income (Note 19)
Net Unrealized Gains (Losses) on Other Securities
Net Deferred Gains (Losses) on Hedging Instruments
Land Revaluation Excess
Foreign Currency Translation Adjustments
Remeasurements of Defined Benefit Plans
Comprehensive Income
Comprehensive Income attributable to owners of the parent
Comprehensive Income attributable to minority interests

2015
63,282110,229
153,676(45,041)
4
580
1,009
173,512
172,842670

2014
38,318
9,685(12,408)
20,656(10)
1,448
48,00447,297
706

Millions of
U.S. Dollars(Note 1)
2015
526
917
1,279
(374)
0
4
8
1,444
1,438
5

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

27

Consolidated Statement of Changes in Net Assets
Consolidated Statement of Changes in Net Assets

Shinkin Central Bank For the year ended March 31,2015

Millions of Yen
Shareholders' Equity

Common Shares and Preferred
SharesBalance at Beginning of Year

Capital Surplus

490,998

Total Shareholders’ Equity

Retained Earnings

100,678

450,930

1,042,60787

87

451,017

1,042,694

Surplus Dividends(16,603)(16,603)

Net Income

62,696

62,696(11)(11)

Cumulative Effects of Changes in Accounting
Policies
Restated balance

490,998

100,678

Fluctuation Amount during the Fiscal YearThe revarsal 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--

46,081

46,081490,998

100,678

497,099

1,088,776

Accumulated Other Comprehensive Income
Net Unrealized Net Deferred
Gains (Losses) Gains (Losses)
on Hedging
on Other
Instruments
Securities
Balance at Beginning of Year

Land
Revaluation
ExcessForeign
Currency
Translation
Adjustments

Total
Remeasurements Accumulated
Otherof Defined
Benefit Plans Comprehensive
IncomeMinority
Interests

Total Net
Assets286,413(69,436)

13,441(1,865)(3,489)225,064

9,154

1,276,826

286,413(69,436)

13,441(1,865)(3,489)225,064

9,154

1,276,914

Cumulative Effects of Changes in Accounting
Policies
Restated balance87

Fluctuation Amount during the Fiscal Year
Surplus Dividends(16,603)

Net Income

62,696

The revarsal of Land Revaluation Excess
Net Changes in Items Other Than Shareholders’Equity during the Fiscal Year(11)
153,676(45,041)

16

580

925

110,157603

110,761

Total Fluctuation Amount during the Fiscal Year

153,676(45,041)

16

580

925

110,157603

156,842

Balance at End of Year

440,090(114,477)

13,457(1,285)(2,563)335,222

9,758

1,433,756

Millions of U.S. Dollars (Note 1)
Shareholders' Equity
Common Shares and Preferred
SharesBalance at Beginning of Year

Capital Surplus

4,086

Total Shareholders’ Equity

Retained Earnings
837

3,753

Cumulative Effects of Changes in Accounting
Policies

8,677

0

0

3,753

8,678

Surplus Dividends

(138)

(138)

Net Income

521

521

The revarsal of Land Revaluation Excess

(0)

(0)

Restated balance

4,086

837

Fluctuation Amount during the Fiscal YearNet Changes in Items Other Than Shareholders’Equity during the Fiscal Year
Total Fluctuation Amount during the Fiscal Year
Balance at End of Year

-

-

383

383

4,086

837

4,137

9,061

Accumulated Other Comprehensive Income
Net Unrealized Net Deferred
Gains (Losses) Gains (Losses)
on Hedging
on Other
Instruments
Securities
Balance at Beginning of Year

2,383

(577)

Land
Revaluation
Excess111

Foreign
Currency
Translation
Adjustments
(15)

Total
Remeasurements Accumulated
Otherof Defined
Benefit Plans Comprehensive
Income(29)

1,873

Minority
Interests

Total Net
Assets76

Cumulative Effects of Changes in Accounting
Policies
Restated balance

10,626
0

2,383

(577)

111

(15)

(29)

1,873

76

10,627

Fluctuation Amount during the Fiscal Year
Surplus Dividends(138)

Net Income521

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

28

(0)
1,279

(374)

0

4

7

916

5

921

Total Fluctuation Amount during the Fiscal Year

1,279

(374)

0

4

7

916

5

1,305

Balance at End of Year

3,662

(952)

112

(10)

(21)

2,790

81

11,933

Shinkin Central Bank For the year ended March 31,2014

Millions of Yen
Shareholders' Equity

Common Shares and Preferred
SharesBalance at Beginning of Year

Capital Surplus

490,998

Total Shareholders’ Equity

Retained Earnings

100,678

429,841

1,021,518

Surplus Dividends(16,603)(16,603)

Net Income

37,612

37,61279

79

Fluctuation Amount during the Fiscal YearThe revarsal 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--

21,08821,088490,998

100,678

450,930

1,042,607

Accumulated Other Comprehensive Income
Net Unrealized Net Deferred
Gains (Losses) Gains (Losses)
on Hedging
on Other
Instruments
Securities
Balance at Beginning of Year

298,822(90,092)

Land
Revaluation
Excess13,532Foreign
Currency
Translation
Adjustments(3,313)Total
Remeasurements Accumulated
Otherof Defined
Benefit Plans Comprehensive
Income-218,948

Minority
Interests

8,763

Total Net
Assets1,249,229

Fluctuation Amount during the Fiscal Year
Surplus Dividends(16,603)

Net Income

37,612

The revarsal of Land Revaluation Excess
Net Changes in Items Other Than Shareholders’Equity during the Fiscal Year79
(12,408)

20,656

(90)

1,448

(3,489)

6,116

391

6,508

Total Fluctuation Amount during the Fiscal Year

(12,408)

20,656

(90)

1,448

(3,489)

6,116

391

27,596

Balance at End of Year

286,413(69,436)

13,441(1,865)(3,489)225,064

9,154

1,276,826

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

29

Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Millions of
U.S. Dollars
Millions of Yen
Shinkin Central Bank For the year ended March 31,
Cash Flows from Operating Activities:
Income before Income Taxes and Minority Interests
Depreciation
Loss on Impairment of Fixed Assets
Increase (Decrease) in Reserve for Possible Loan Losses
Increase (Decrease) in Reserve for Investment 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 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
Net Increase (Decrease) in Call Money and Others
Net Increase (Decrease) in Payables under Securities Lending Transactions
Net Decrease (Increase) in Monetary 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

2014(Note 1)
2015

84,866
8,442
64
3,867
(5)
22
2
(507)
15
(219,763)
130,841(11,585)(1,465)(183,218)
128
19,394(12,222)(2,607)90,093
1,877,551(161,130)(2,000)594,734
104,743
30,66345,547333,169
37,724(3,965)(293)(61)
312,999(176,962)(19,646)
2,879,440(3,857)2,875,582

52,622
9,033
10,836
(46)
84
1
600
(42)
(230,006)
141,383
14,890716(326,395)(9)
237,764
10,198(19,038)(515,664)
1,677,489(375,540)(37,050)(96,021)51,918
13,632(115,583)(670,409)
61,174
(799)
371
(107)
338,837(198,296)
17,82754,376(1,046)53,330

706
70
0
32
(0)
0
0
(4)
0
(1,829)
1,088
(96)
(12)
(1,524)
1
161
(101)
(21)
749
15,626(1,341)
(16)
4,949
871
255
379
2,772
313
(33)
(2)
(0)
2,605
(1,472)(163)
23,965(32)
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
Decrease in Money Held in Trust
Acquisitions of Tangible Fixed Assets
Acquisitions of Intangible Fixed Assets
Proceeds from Sales of Tangible Fixed Assets
Net Cash Provided by (Used in) Investing Activities(4,093,109)
1,832,394
1,929,034(21,048)
21,000(5,876)(3,660)(341,264)(5,062,421)
2,838,619
3,706,085
㻔㻡㻝㻘㻜㻜㻜㻕
㻝㻜㻜㻘㻜㻜㻜
(3,773)(2,648)793
1,525,654(34,066)
15,25016,055
(175)
174
(48)
(30)
(2,840)Cash Flows from Financing Activities:
Proceeds from Subordinated Borrowings
Dividends Paid
Dividends Paid to Minority Interests
Net Cash Provided by (Used in) Financing Activities(16,603)(66)(16,670)

162,480(16,603)(66)
145,809

(138)
(0)
(138)

0
2,517,648
3,112,521
5,630,169

01,724,794
1,387,726
3,112,521

0
20,95425,90546,859Effect 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.

30

2015

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 accountbalances to U.S. dollars on a basis of ¥120.15 to U.S.$1, theexchange rate prevailing as of March 31, 2015. The amounts in U.S.
dollars are presented in millions of U.S. dollars by rounding down
figures. As a result, the totals in U.S. dollars shown in the
consolidated financial statements do not necessarily agree with thesums of the individual account balances. The U.S. dollars amounts
are included solely for the convenience of readers outside Japan andthis translation should not be construed as representation thatJapanese yen amounts have been 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 Bank and its eight consolidated subsidiaries as of March 31, 2015
listed below:
Ownership
Location
Name
Percentage
The Shinkin Banks Information
System Center Co., Ltd.
Tokyo
 50.7%
Shinkin International Ltd.
London 100%
Shinkin Chukin Business Co., Ltd.
Tokyo
 100%
Shinkin Asset Management Co., Ltd.
Tokyo
 100%
Shinkin Trust Bank, Ltd.
Tokyo
 100%
Shinkin Securities Co., Ltd.
Tokyo
 100%
Shinkin Capital Co., Ltd.
Tokyo
 100%
Shinkin Guarantee Co., Ltd.
Tokyo
 100%
Unconsolidated subsidiaries
Shinkin Capital No. 2 Limited Liability Investment Partnership
Shinkin no Kizuna Limited Liability Investment Partnership
Shinkin no Tsubasa Limited Liability Investment Partnership
Unconsolidated subsidiaries are excluded from the scope of
consolidation because their total assets, total income, net income(amount based on the equity method), retained earnings (amountbased on the equity method) and accumulated other comprehensive
income (amount based on the equity method) are immaterial and do
not hinder a rational judgment of the Bank’s financial condition andresults of operation when excluded from the scope of consolidation.
The fiscal year and the closing date thereof for the financial
statements of the consolidated subsidiaries are in agreement withthose of the Bank, except for Shinkin International Ltd., which has afiscal year ended on December 31. For the consolidation of thesubsidiary, the Bank makes appropriate adjustments for any materialtransactions subsequent to December 31.
All significant intercompany accounts and transactions havebeen eliminated in consolidation. The Bank’s share of net assets ofsubsidiaries is valued at fair value on acquisition. Minority interests
in net assets of subsidiaries are valued at fair value on acquisition in
the consolidated financial statements. The excess of the cost over thefair value of the underlying net equity in subsidiaries on acquisitionis expensed when incurred.
The application of equity-method to unconsolidated subsidiaries
and affiliates is as follows: Non-consolidated equity-method subsidiaries:
N/A Affiliated equity-method companies:
N/A
Unconsolidated subsidiaries that are not accounted for by theequity method: Shinkin Capital No. 2 Limited Liability Investment Partnership Shinkin no Kizuna Limited Liability Investment Partnership
Shinkin no Tsubasa Limited Liability Investment Partnership
Unconsolidated subsidiaries that are not accounted for by theequity method are excluded from the scope of equity method because
their effect on the accompanying consolidated financial statements, interms of net income (amount based on the equity method) andretained earnings (amount based on the equity method), would not bematerial.
Affiliated companies to which the equity method is not applied
due to immateriality:
Aozora Loan Services Co., Ltd.
(2) Cash and Cash Equivalents
In the consolidated statement of cash flows, “Cash and Cash
Equivalents” consist of Cash and Due from Central Bank.
Reconciliation between Cash and Due from Banks in the
consolidated balance sheet and Cash and Cash Equivalents at March
31, 2015 and 2014 is as follows:
Millions ofMillions of Yen
U.S. dollars
2015
2014
2015
Cash and Due fromBanks

6,861,925

4,938,807

57,111

Due from Banks(Excluding Duefrom Central Bank )(1,231,755)(1,826,286)(10,251)

Cash and Cash
Equivalents

5,630,169

3,112,521

46,859(3) Trading Assets & Liabilities
Transactions for “Trading Purposes” (for purposes of seeking
to capture gains arising from short-term changes in interest rates,
currency exchange rates or market prices of financial instruments andother market related indices or from gaps among markets) are
included in “Trading Assets” and “Trading Liabilities” on the
consolidated balance sheet on a trade date basis. In addition, gains
and losses from “Trading Assets” and “Trading Liabilities” arerecorded as “Trading Income” and “Trading Losses” on the
consolidated statement of income on a trade date 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 thedeemed amounts that would be received or paid for settlement if suchtransactions were terminated at the fiscal year end.

31

(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 theweighted-average method. Investments in affiliates that are notaccounted for by the equity method are stated at cost using theweighted-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 weighted-average method). Other securities
where there is significant difficulty in determining fair value arestated at cost using the weighted-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
described in the Japanese Institute of Certified Public Accountants(JICPA) Industry Audit Committee Report No. 24 “Accounting and
Auditing Treatment of Accounting Standards for Financial
Instruments in Banking Industry” to transactions to hedge againstinterest rate risk arising from the financial assets and liabilities.
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 asset 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 totransactions to hedge against foreign exchange fluctuation risks
associated with monetary assets and liabilities denominated inforeign currencies in accordance with the regulations set forth in
JICPA Industry Audit Committee Report No. 25 “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 prior to the commencement of transactions, and there exists

32

spot and forward liabilities exceeding the acquisition costs of theforeign currency securities designated as hedged items on a foreign
currency basis.
(c) Internal Derivative Transactions
Internal derivative transactions between trading accounts andother accounts, which are designated as hedges, are not eliminatedand related gains and losses are recognized in the consolidated
statement of income or deferred under hedge accounting because theinternal interest 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
declining balance method, except for buildings acquired on or after
April 1, 1998 (excluding facilities installed in buildings), which 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 using the declining balance method, based on
their estimated 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 thestraight-line method, mainly over a 5 year period (the estimateduseful life of the software).
(7) Leased Assets
Leased assets of Tangible Fixed Assets and Intangible Fixed
Assets related to finance leases that do not transfer ownership are
depreciated using 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 disposal of collateral andthe execution of guarantees. In addition, a reserve is provided forloans to borrowers who, although not actually bankrupt in the legal
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 disposal ofcollateral 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 relaxation of terms and conditions of loans and their bookvalues.
For all other loans, a reserve is provided based on the ratio of
actual defaults for a certain period in the past.
All claims are assessed by the Operating Related Division
based on internal rules for self-assessment of asset quality.
Subsequently, the Asset Auditing Division, that is independent fromthe Operating Related Division, audits these self-assessments. The
reserve is provided 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 disposal of collateral andthe execution of guarantees, are written off. The amount written off
was ¥584 million ($4 million) as of March 31, 2015 and ¥951 million
as of March 31, 2014.
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 Investment Losses
Reserve for Investment Losses is allocated in an amountconsidered necessary to provide against possible future losses frominvestments, taking into consideration the financial condition of thecompany issuing the securities and other factors.
(11) Reserve for Employee Bonuses
Reserve for Employee Bonuses is set aside to pay employee
bonuses with respect to the portion of estimated bonus payments toemployees that correspond to this fiscal year.
(12) 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.
(13) 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.
(14) Reserve under Specific Law
This reserve amount is calculated pursuant to Article 46-5,
Paragraph 1 of the Financial Instruments and Exchange Act andArticle 175 of the Cabinet Office Ordinance on Financial Instruments
Business to indemnify any losses incurred from accidents in the
conduct of market derivative transactions on behalf of clients.
(15) 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
for amortizing prior service costs and actuarial differences are as
follows:
Prior service costs:
Prior service costs are amortized, using the straight-line method
over a certain number of years (10 years) within the averageremaining service period of current employees at the time the cost isincurred.
Actuarial differences:
Actuarial differences are amortized from the following year,
using the straight-line method over a certain number of years (10years) within the average remaining service period of current
employees at each time 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 necessary payments of the voluntary retirement for all
employees at the fiscal year-end.
(16) Translation of Foreign Currencies
Foreign currency-denominated assets and liabilities aretranslated 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.
(17) Leases
Finance lease transactions for the Bank and its domestic
consolidated subsidiaries that do not transfer ownership which werecommenced before the fiscal year beginning April 1, 2008 are
accounted for as operating leases.
(18) Consumption Tax
Consumption tax and local consumption tax incurred by the
Bank and its domestic consolidated subsidiaries are excluded fromtransaction amounts. However, consumption tax and local
consumption tax paid on purchases of tangible fixed assets andintangible fixed assets, which are not deductible as a tax credit, areexpensed at the end of the fiscal year.
(19) Amortization of Goodwill
Goodwill is fully amortized in the fiscal year incurred.
(20) Changes in Accounting Policies
Adoption of the “Accounting Standard for Retirement Benefits”
From this fiscal year, the Bank adopted provisions of the“Accounting Standard for Retirement Benefits” (AccountingStandards Board of Japan (ASBJ) Statement No. 26, May 17, 2012)
and “Guidance on Accounting Standard for Retirement Benefits”(ASBJ Guidance No. 25, March 26, 2015). In accordance withparagraph 35 of the main text of the “Accounting Standard for
Retirement Benefits” and paragraph 67 of the main text of the“Guidance on Accounting Standard for Retirement Benefits.”, theBank has revised its method for period attribution of the expected
benefit amount from a straight-line basis to a benefit formula basis.
In addition, the Bank changed its method for determining thediscount rate, from the method using the estimated average service
period up to the payment of retirement benefits to the method using asingle weighted-average discount rate reflecting the estimated benefit
payment period and the amount for each estimated period.
With regard to the adoption of the aforementioned accounting
standard and guidance, in accordance with the transitional provisions
stipulated in paragraph 37 of the “Accounting Standard for
Retirement Benefits,” the Bank reflected the effects of changes in themethod of calculating retirement benefit obligation and service costs
in retained earnings at the beginning of this fiscal year.
The impact of these changes on the Bank’s financial statements
for this fiscal year was immaterial.

33

The effect on per share information is stated in the relevant partof these notes.
3.

Trading Assets:
The details of Trading Assets as of March 31, 2015 and 2014
are as follows:
Millions ofMillions of Yen
U.S. Dollars
2015

2014

57,71775,166

480

6

－

0

Trading-Related
Financial Derivatives

55,153

48,107459

Other Trading Assets

104,989

113,987

873

Total

217,866

237,261

1,813

Trading AccountSecurities
Trading Bonds-Related
Financial Derivatives

Securities:
The details of Securities as of March 31, 2015 and 2014 are as
follows:
Millions ofMillions of Yen
U.S. Dollars
2015
2014
2015
Japanese Government
11,238,729 11,489,925
93,539Bonds
Municipal Government
Bonds

175,837

185,304

1,463

Short-term Corporate
Bonds

14,997

14,996124

2,814,263

2,408,050

23,422

Stocks74,13346,441

617

Others4,783,519

4,274,073

39,812

Total

19,101,480 18,418,791

158,980

Notes:
1. Stocks include investments in affiliated companies totaling ¥189
million ($1 million) as of March 31, 2015 and 2014.
2. Others include common shares and investment in unconsolidated
subsidiaries totaling ¥9,440 million ($78 million) as of March 31,
2015 and ¥5,147 million as of March 31, 2014. Others also include
preferred shares issued by Shinkin Banks which were contributedin accordance with the Shinkin Bank Management Reinforcement
System. The amount was ¥239,190 million ($1,990 million) as ofMarch 31, 2015 and ¥237,190 million as of March 31, 2014,
respectively. Others also include foreign bonds and equities.

34

Loans and Bills Discounted:
Loans and Bills Discounted include the following non-performing
loans:
Millions ofMillions of Yen
U.S. Dollars
2015

2014

2015

Loans to Bankrupt
Borrowers

123

125

1

Delinquent Loans

11,494

8,734

95

28

86

0

Restructured Loans

31,452

28,926261

Total

43,09937,873

358

2015

4.

Corporate Bonds

5.

Loans Past Due Three
Months or More

The above amounts are the amounts before exclusion ofreserves for possible loan losses.
Loans to Bankrupt Borrowers represent non-accrual loans toborrowers who are legally bankrupt as defined in Article 96-1-3 or 4of the Order for Enforcement of the Corporation Tax Act (Article 97
of 1965 Cabinet Order).
Delinquent Loans represent non-accrual loans other than Loans
to Bankrupt Borrowers and Restructured Loans.
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 wereamended in favor of the borrowers (e.g. the reduction of or
exemption from stated interests, the deferral of interest payments, theextension of maturity dates, and the renunciation of claims in order toassist or facilitate the business restructuring of borrowers underfinancial difficulties) other than Loans to Bankrupt Borrowers,
Delinquent Loans and Loans Past Due Three Months or More.
Loans include subordinated loans with a covenant stipulatingthat repayment of principal is preceded by that of general credits. The
amount was ¥47,000 million ($391 million) as of March 31, 2015and ¥49,400 million as of March 31, 2014, respectively. Of theseamounts, ¥20,200 million ($168 million) as of March 31, 2015, and¥22,600 million as of March 31, 2014, respectively, 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“Accounting and Auditing Treatment of Accounting Standards for
Financial Instruments in Banking Industry”. The face value of bills of
lading amounted to ¥217 million ($1 million) as of March 31, 2015and ¥215 million as of March 31, 2014, respectively. The Bank has
the right to freely dispose of, sell or re-collateralize such bills.
With respect to loan participation, in accordance with
“Accounting and Presentation of Loan Participation” (JICPA
Accounting Committee Report No. 3), the amount of theparticipation principal is accounted for as a loan to the original debtor,
and this amounted to ¥46,890 million ($390 million) as of March 31,
2015 and ¥66,044 million as of March 31, 2014.

6.

Commitments to Overdrafts and Loans:
Commitments related to overdrafts and loans represent
agreements to extend overdrafts or loans up to a pre-agreed amount at
the customer’s request as long as there is no violation of theconditions stipulated in commitment agreements.
The amount of unused commitment lines does not necessarily
have a significant effect on the future cash flows of the Bank because
most of these commitment lines are terminated without being
exercised. Most of these agreements have provisions which stipulatethat the Bank may not extend the loan or may decrease thecommitment when there are certain changes in the financial
conditions, certain issues relating to collateral and other reasons. The
Bank limits the commitment line to an amount below the amount of
the related customer’s time deposit. The Bank periodically checks thefinancial condition of its customers based on its internal rules andperforms certain actions to secure loans or revises the contracts, asnecessary.
The amounts of unused commitment lines under suchagreements are ¥19,673,398 million ($163,740 million) as of March
31, 2015 and ¥17,848,727 million as of March 31, 2014, respectively.
The amounts which the Bank could cancel at any time without
penalty or of which the original contractual maturity is less than one
year are ¥19,587,477 million ($163,025 million) as of March 31,
2015 and ¥17,764,762 million as of March 31, 2014, respectively.

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 and Others in “Securities.” The amount in total
was ¥135,291 million ($1,126 million) as of March 31, 2015 and¥123,308 million as of March 31, 2014.
Of cash-collateralized securities borrowings, those freely
disposable for sale or re-collateralized, and pledged as collateralamounted to ¥9,567 million ($79 million) as of March 31, 2015 and¥729 million as of March 31, 2014. Those held by the Bank without
being disposed of as of March 31, 2015 amounted to ¥164,501
million ($1,369 million) and as of March 31, 2014 amounted to¥248,905 million.

8.

Tangible Fixed Assets:
Millions of Yen
2015
2014

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
2015

9.

Assets Pledged as Collateral and Associated Liabilities:
Assets pledged as collateral for the fiscal years ended March 31,
2015 and 2014 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2015
2014
2015
Assets Pledged as Collateral
Cash and Due from Banks

0

0

0

12,834

23,593106

3,136,284 2,887,707

26,103Loans and Bills Discounted 2,285,468 2,439,166

19,021

Total

45,231

Trading Assets
Securities

5,434,586 5,350,466

Liabilities associated with
Assets Pledged as Collateral
Borrowed Money

121,500

123,500

1,011

Bills Sold and Call Money

210,000

213,300

1,747

35,437615

965,928

10,738

Payables under Repurchase
73,944
Agreements
Payables under Securities
1,290,211
Lending Transactions

Trading Assets of ¥528 million ($4 million) as of March 31,
2015 and ¥705 million as of March 31, 2014 and Securities in theamount of ¥1,082,445 million ($9,009 million) as of March 31, 2015and ¥989,487 million as of March 31, 2014, respectively, weresecured as collateral for exchange settlement transactions, etc. or
futures or as substitute for margin money in futures transactions, etc.
Other Assets included margin money. The amount was ¥338
million ($2 million) as of March 31, 2015, and ¥291 million as ofMarch 31, 2014. Other Assets also included guarantee money
amounting to ¥555 million ($4 million) as of March 31, 2015, and¥379 million as of March 31, 2014, respectively.

10. Trading Liabilities:
The details of Trading Liabilities as of March 31, 2015 and2014 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2015
2014
2015
Trading Bonds Sold

47,054

68,836

391

－

22

－

85,79382,381

714

Derivatives of Securities
related to Trading Transactions

1,764

1,764

14

Trading-Related Financial
Derivatives

99,26089,677826

Total

146,314

158,537

1,217

（－)

（－)

（－)

35

11. Borrowed Money and Lease Obligations:
Balance as ofApril 1, 2014
(Millions of Yen)

Balance as ofMarch 31, 2015
(Millions of Yen)

Balance as ofMarch 31, 2015
(Millions of U.S.
Dollars)

Borrowings

937,320

935,320

Borrowed Money

937,320

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

Category

Average
Interest Rate (%)

Maturity

7,784

1.17

－

935,320

7,784

1.17

Jun. 2015～
No maturity

1,367

1,566

13

2.27

－

4,085

2,986

24

2.05

May. 2016～
May. 2022

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
111,500
10,000－－－Borrowed Money
1,566
1,244
1,057
497
180
Lease Obligations
Millions of U.S. Dollars
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
928
83
－
－
－
Borrowed Money
13
10
8
4
1
Lease Obligations
3. Borrowed Money includes subordinated borrowings of ¥813,820 million ($6,773 million) as of March 31, 2015 and 2014.
12. Debentures:
IssuerName of Issue

No.233-304
5-yearThe Bank
Interest-bearing
debentures
 Total     －Issuance Date

Balance as of Balance as of Balance as ofApril 1,March 31,
March 31,
2014
2015
2015
(Millions of (Millions of (Millions of
Yen)
Yen)
U.S. Dollars)Interest
Rate (%)

Collateral

Redemption
Date

Apr. 2009～
Mar. 2015

3,161,810

3,000,680

24,974

0.20～
1.35

－

Apr. 2014～
Mar. 2020－

3,161,810

3,000,680

24,974

－

－

－

Note:
The redemption schedule within 5 years after the balance sheet date is as follows:
Millions of Yen
Within 1 year
581,020

Over 1 year,
within 2 years
578,860

Over 2 years,
within 3 years
579,460

Over 3 years,
within 4 years
626,110

Over 4 years,
within 5 years
635,230

Over 3 years,
within 4 years
5,211

Over 4 years,
within 5 years
5,286

Millions of U.S. Dollars
Within 1 year
4,835

36

Over 1 year,
within 2 years
4,817Over 2 years,
within 3 years
4,822

13. Asset Retirement Obligations:
The details of Asset Retirement Obligations were omitted
because the amount was one-hundredth or less of the total balance of
Liabilities and Net Assets as of April 1, 2014 and as of March 31, 2015,
respectively.

16. Trading Income:The details of Trading Income for the fiscal years ended March 31,
2015 and 2014 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2015

14. Land Revaluation:
Based on the Act on the Revaluation of Land (Law 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 3-3 of Law 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 2-4 of theOrder for Enforcement of the Act on Revaluation of Land
(Government Ordinance No. 119, dated March 31, 1998), withappropriate adjustments.
The difference between the total fair value at the end of thisfiscal year and the total post-revaluation book value of land thatis used for business and has been revalued pursuant to Article 10of Law 34.: ¥ 3,948 million ($32 million) as of March 31, 2015,and ¥ 5,257 million as of March 31, 2014.

15. Fees and Commissions:
The details of Fees and Commissions for the fiscal years ended
March 31, 2015 and 2014 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2015
2014
2015
Deposit, Fixed Income
431
661
3
Securities and Lending
573

405

4

Securities Related Business

7,803

7,075

64

Agency Business

2,259

2,278

18

Guarantee Business

7,339

5,691

61

Trustee Business

18,016

17,645

149

697

528

5

37,122

34,287308

Exchange

236

226

1

Others12,127

11,074

100

Expenses on Fees andCommissions Businesses

12,363

11,301

102

Exchange Business

OthersIncome on Fees andCommissions Businesses

Income from Trading
Account Securities
Income from Trading-Related
Financial Derivatives
Other Trading Income
Total

2014

2015

651

737

5

17,996

14,480

149

188

244

1

18,836

15,462156

17. Trading Losses:
The details of Trading Losses for the fiscal years ended March 31,
2015 and 2014 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2015
2014
2015
Expenses from
231
224
1
Trading-Related Securities
Total

231

224

1

18. Other Income:The details of Other Income for the fiscal years ended March 31,
2015 and 2014 are as follows:
Millions ofMillions of Yen
U.S. Dollars
2015
2014
2015
Gains on sale of stocks and other
8,114
6,516
67
securities
Others

1,515

543

12

Total

9,630

7,060

80

37

19. Consolidated Statement of Comprehensive Income:For the fiscal year ended March 31, 2015 and 2014
Reclassification adjustment amount and tax effect amount related to Other Comprehensive Income
Millions ofMillions of Yen
2015

U.S. Dollars
2014

2015

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

175,794(34,386)

Reclassification Adjustment Amount

39,425

17,908

1,463
328

Prior to Tax Effect Adjustment

215,220(16,477)

1,791

Tax Effect Amount(61,543)

4,069

(512)

Net Unrealized Gains (Losses) on Other Securities

153,676(12,408)

1,279

The Amount Arising during the Period(119,268)(20,708)(992)

Reclassification Adjustment Amount

56,77849,280472

Prior to Tax Effect Adjustment(62,489)

28,571(520)

Tax Effect Amount

17,448(7,915)145

Net Deferred Gains (Losses) on Hedging Instruments(45,041)

20,656(374)

The Amount Arising during the Period

－

－

－

Reclassification Adjustment Amount

－

－

－

Prior to Tax Effect Adjustment

－

－

－

Tax Effect Amount

4

(10)

0

Land Revaluation Excess

4

(10)

0

The Amount Arising during the Period

580

1,448

4

Reclassification Adjustment Amount

－

－

－

Prior to Tax Effect Adjustment

－

－

－

Tax Effect Amount

－

－

－

Foreign Currency Translation Adjustments

580

1,448

4

Net Deferred Gains (Losses) on Hedging Instruments :Land Revaluation Excess:Foreign Currency Translation Adjustments:

Remeasurements of Defined Benefit Plans:

38

The Amount Arising during the Period

709

－

5

Reclassification Adjustment Amount

727

－

6

Prior to Tax Effect Adjustment

1,436

－

11

Tax Effect Amount

(426)

－

(3)

Remeasurements of Defined Benefit Plans

1,009

－

8

Other Comprehensive Income

110,229

9,685

917

20. 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, 2015
April 1, 2014 (Thousand
Year (Thousand Units)
Year (Thousand Units)(Thousand Units)
Units)
Shares Outstanding
General Common Shares

4,000

－

－

4,000

Preferred Shares (Type-A)

708

－

－

708

4,708

－

－

4,708

General Common Shares

－

－

－

－

Preferred Shares (Type-A)

－

－

－

－

－

－

－

－

Amount Per Share(Yen)

Record Date

Effective Date

Total
Treasury Shares

Total(2) Dividends
Dividends paid during the fiscal year ended March 31, 2015
Resolution

Class of share

Total Dividend
Amount (Million Yen)

Common shares

12,0003,000

Mar 31, 2014

Jun 20, 2014

Preferred shares

4,603

6,500

Mar 31, 2014

Jun 20, 2014

Annual General Meeting of
Shareholders, June 20, 2014

Among the dividends whose record date falls within the fiscal year ended March 31, 2015, those whose effective date will fall within thefollowing fiscal year:
Resolution

Class of share

Total Dividend
Amount (Million Yen)

Resource ofDividends

Amount Per Share(Yen)

Record Date

Effective Date

Common shares

14,000Retained Earnings

3,500

Mar 31, 2015

Jun 19, 2015

Preferred shares

4,957

Retained Earnings

7,000

Mar 31, 2015

Jun 19, 2015

Annual General Meeting of
Shareholders, June 19, 201539

21. Income Taxes:(1) Breakdown of Deferred Tax Assets and Liabilities is as follows:
Millions ofMillions of Yen
U.S. Dollars
2015

2014

2015

Depreciation

2,906

2,857

24

Reserve for Possible Loan
Losses

6,656

5,518

55

Net Defined Benefit Liability

6,533

8,480

54

Write-Downs for Securities

4,417

4,675

36

Net Deferred Losses on
Hedging Instruments

44,342

26,895369

Tax Loss Carryforwards

7

5,006

0

Others

4,058

1,817

33

Valuation Allowances(7,653)(8,438)(63)

Total Deferred Tax Assets

61,26846,812509

tax rate has been reduced. As a result, the effective statutory tax rateused by certain consolidated subsidiaries to calculate deferred tax
assets and deferred tax liabilities was changed.
The impact of this change on the financial statements for thisfiscal year is immaterial.

Deferred Tax Assets:
22. Retirement Benefit Plans:(1) Retirement Benefit Scheme
The Bank and some of its consolidated domestic subsidiaries
have a defined benefit plan that offers lump-sum payments uponretirement 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, 2015 and 2014 is as follows:(i) Reconciliation of beginning- and end-of-period balance ofRetirement Benefit Obligation
Millions ofMillions of Yen
U.S. Dollars
2015

2014

48,12046,428

400

(120)

－

(1)

Restated Balance

47,999－399

Service Cost

2,251

2,158

18

Interest Cost

672

650

5

Actuarial Difference
Incurred

(170)

264

(1)

(1,445)(1,381)(12)

Prior Service Cost

－

－

－

Other

－

－

－

49,307

48,120410

Deferred Tax Liabilities:
Net Unrealized Gains on Other
Securities
Others(169,298) (107,755)(449)(1,409)

(390)

(3)

Total Deferred Tax Liabilities(169,748) (108,146)(1,412)

Net Deferred
Tax Liabilities(108,480)(902)(61,334)(2) Reconciliation between the effective statutory tax rate and theactual effective tax rate for the fiscal years ended March 31, 2015
and 2014:

Statutory effective tax rate

2015

2014

27.87 %

29.65 %

Retirement Benefit
Obligation at Beginningof Period
Cumulative effects of
Changes in Accounting
Policies

Retirement Benefits Paid

2015

(Adjustments)
Change in Valuation Allowances(2.50%)(0.58%)

Dividends received, not taxable(1.49%)(3.02%)

Reduction and adjustment of Deferred
Tax Assets due to changes in tax rate

0.06 %

0.34 %

Others1.49 %

0.79 %

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

25.43 %

27.18 %

(3) Revision of amounts of deferred tax assets and deferred tax
liabilities due to a change in the corporate tax rate
Following the promulgation on March 31, 2015, of the Act for
Partial Amendment of the Income Tax Act, etc. (Act No. 9, 2015),
from fiscal years beginning on or after April 1, 2015, the corporate

40

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
2015
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

19,7062015

18,369

164

492

642

4

538

30

4

1,490

1,476

12

(827)

(813)

(6)

－

－

－

21,40019,706178

Other
Balance of Pension Plan
Assets at End of Period

2014(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
consolidated balance sheets
Millions ofMillions of Yen
U.S. Dollars
2015

2014
38,812

331

Pension Plan Assets(21,400)(19,706)(178)

18,433

19,106

153

9,473

9,307

78

27,9062015

28,414232

Millions of
U.S. Dollars

Millions of Yen

2,251

2,158

18

672

650

5

(492)

(642)

(4)

722

736

6

4

(257)

0

Other

(554)

(548)

(4)

Retirement Benefit
Expenses Related toDefined Benefit Plan

2,604

2,096

21

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

Notes: 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
2014

2015

4

－

0

1,431

－

11

Other

－

－

－

Total

1,436

－

11

Prior Service Costs
Amortization ofActuarial Differences(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
2015

2015

2014

27,90628,414232

Net Defined Benefit Asset

－

－

－

Net Amount of Liabilities
and Assets Presented on
the Consolidated Balance
Sheets27,90628,414

232

2015

2015

Interest Cost

Unrecognized
Actuarial Differences
UnrecognizedPrior Service Cost

Net Defined Benefit
Liability

2014

Service Cost

2015

39,833

Millions of
U.S. Dollars

Millions of Yen

2015

Funded Plan Retirement
Benefit Obligation

Unfunded Plan Retirement
Benefit Obligation
Net Amount of Liabilities
and Assets Presented on
the Consolidated Balance
Sheets(iv) Breakdown of Retirement Benefit Expense

2014

2015

4

9

0

3,920

5,352

32

Other

－

－

－

Total

3,925

5,361

32

41

(vii) Pension Plan Assets(a) The ratios by main asset categories in total pension plan assets are
as follows:
2015
2014
Bonds

67 %

75 %

Stocks24 %19 %Cash and Deposits

7%

4%

Other

2%

2%

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 andthe current 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,
2015 and 2014, are as follows:

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

2015

2014

1.1～1.5 %1.1～1.5 %

2.5 %

3.5 %

0.0～7.0 %0.0～7.0 %23. 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
Accounting Policies".

the"Significant(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 operatingleases: Not applicable42

24. Financial Instruments:
1. Matters concerning financial instruments(1) Policies on financial instruments
Shinkin Central Bank Group (the “Group”) works to ensure
the stable procurement of funds through the acceptance of deposits
mainly from its Shinkin Bank members and through the issuance ofdebentures. 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 fromthese financial instruments, the Group engages in ALM activities
including the above-mentioned derivative transactions. For its
trading activities, the Group establishes risk limit and loss limit
amounts and engages in transactions within the scopes of these risk
limits, as a way to preserve a sound management and to ensurestable 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 and euro-yen
deposits.
These investments are exposed to market risks such as thecounterparty credit risk, interest rate risk, and foreign currency risk.
Securities portfolios of the Group consist of domestic
securities including Japanese government, corporate bonds andothers as well as foreign securities such as government,
government-guaranteed, 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 market risks such as theindividual issuers’ credit risk, interest rate risk, price fluctuation risk,
and foreign currency risk, as well as 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 market risks such as counterparty
credit risk, interest rate risk, and foreign currency 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
rate risk and foreign currency risk, as well as liquidity risk.
As a debenture issuer, the Group issues 5-year interest-bearing
debentures each month.
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 bondderivatives (bond futures and bond futures options).
These transactions are exposed to market risks such ascounterparty credit risk, interest rate risk, and foreign currency risk.
The Bank hedges market risks of its financial assets andliabilities through ALM activities.
The Group partially avoids market risks by mitigating (i)interest rate risk through interest rate swaps and (ii) foreign
currency risk of foreign currency-denominated assets throughforeign currency-denominated fund procurement, currency swaps,
and forex swaps.
Hedge accounting is applied to risk hedges through ALM
activities including the use of derivatives. As for the hedge
accounting, hedged items, hedging methods, policies, and methodsof 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 arebroadly divided into “risks to be minimized” and “risks to becontrolled”. Credit risk, market risks, and liquidity risks fall into thelatter category. Both categorized risks are managed by risk
management divisions that are independent of the client service
divisions. For the comprehensive management of these risks, Risk
Management Division has been established.
<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 Valueat Risk (VaR), aggregating the measurements, and comparing theaggregated amounts with the Bank’s capital. The Bank measurescredit risks and market risks using VaR methodology, and monitors
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, on the other hand, are measured
weekly by the Risk Management Division, which takes steps toprevent any of the various risk limits from being breached, andthrough a Risk Management Committee, reports regularly to the
management and relevant 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 mutually independent tasks to ensure effective
internal checking functions.
The Bank established the Credit Committee and the Risk
Management Committee, comprised of senior management andheads of divisions related to credit risk, as bodies to deliberate andmake decisions on matters relating to credit risk management. The

43

Credit Committee deliberates on credit transactions that exceed thecredit limit, while the Risk Management Committee deliberates on
the establishment and the review of policies regarding credit
management. The Executive Committee deliberates and makes
decisions on matters related to asset self-assessments including theresults 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. They 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 whichfunds are used and repayment resources. In addition to appropriate
assessment and post-transaction management, they continuallycheck 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 thecredit risk of the Bank by each borrower and monitored.
(ii) Market risk management
To maintain an accurate understanding of market risk andrigorously 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 inmarket operations, providing a risk management structure in whichinternal checks are maintained through independent functions.
The Bank has established the ALM Committee as the body
responsible for deliberating and making decisions on mattersrelating to market risk management. The ALM Committee iscomprised of senior management and heads of divisions related tomarket risk. Based on risk status information—obtained via reports
from divisions responsible for market risk management and othersources—the ALM Committee deliberates broadly and in a timely
manner ALM related policies and market transactions including theBank’s fund-raising and management as well as the usage ofhedging transactions involving derivatives such as interest rate
swaps.
Divisions responsible for market risk management quantify
and manage 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 interest
rate risk based on outlier standard and the basis point value (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

44

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 thisway, market risks including those that cannot be captured throughVaR 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 a
specific loss limit amount.
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,with regard 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-equivalent amount under the regulations on banks’ capital ratio.
The market risk amount (estimated loss amount) of the Bank’s
trading operations was ¥646 million ($5 million) as of March 31,
2015 and ¥558 million as of March 31, 2014 and the market risk
amount (estimated loss amount) of the trading operations of theBank’s consolidated subsidiaries was ¥1,099 million ($9 million) as
of March 31, 2015 and ¥1,027 million as of March 31, 2014.
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, 2015, theactual loss amount exceeded the VaR model on one occasion, andthe 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 atcertain probability levels statistically calculated based on historicalmarket 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 ofdue from banks, securities not held for trading purposes, loans andbills discounted, deposits, debentures, payables under securities
lending transactions and, within derivative transactions, interest-rate
and foreign-exchange instruments not held for trading purposes.
The VaR model is based on the delta method and uses a 99.0%
confidence interval, a holding period of one year and an observation
period of five 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 withmethods used by the Bank.
The Group’s market risk amount (estimated loss amount)
other than for trading purposes was ¥260,684 million ($2,169

million) as of March 31, 2015 and ¥235,098 million as of March 31,
2014. The Bank conducts back testing to compare VaR calculatedusing the model with actual loss amounts, and believes that themeasurement model it uses has an adequate level of accuracy tocapture 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 insituations where market conditions change unprecedentedly.
(iii) Liquidity risk management related to fund-raising
For the accurate identification and strict management ofliquidity risk, the Bank has established liquidity risk management
policies. Divisions responsible for liquidity risk management areclearly separated from divisions involved in cash management andmarket operations, allowing internal checks to be maintained
through the independent 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 forindividual currencies and periods. In the event that a significant
liquidity risk arises, the Bank has preparations to respond rapidly,
including the securing of funding sources.
The liquidity risk management frameworks created by the
Bank include subsidiaries as well, by providing overdraft facilities
for consolidated subsidiaries with operations involving fundmovements in relatively large amounts.
(4) Supplementary explanation concerning the fair values of  
financial instruments
Fair values of financial instruments, in addition to values
based on market prices, also include values based on reasonableestimates if market prices are unavailable. Since value estimates are
predicated on certain assumptions, values may vary if theunderlying assumptions change.

45

2. Matters concerning fair value and others of financial instruments
Carrying values stated on the consolidated balance sheet, fair value and differences between them are as follows. Unlisted stocks andsimilar 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, 2015
Millions of YenCarrying Value

Fair Value

Difference(1) Cash and Due from Banks

6,861,925

6,861,925－(2) Bills Bought and Call Loans

510,601

510,601－(3) Receivables under Resale Agreements

49,98749,987－(4) Receivables under Securities Borrowing Transactions

142,726

142,726－

(5) Monetary Debts Purchased (※1)

231,839

231,858

19

Trading Securities

162,707

162,707－(7) Money Held in Trust

132,774

132,774－

Held-to-Maturity Debt Securities

1,860,770

1,984,444

123,674

Other Securities

16,983,171

16,983,171－(6) Trading Assets(8) Securities(9) Loans and Bills Discounted
Reserve for Possible Loan Losses (※1)

5,885,741


(39,653)
5,846,087

5,902,295

56,208

Total Assets

32,782,591

32,962,492

179,901(1) Deposits

25,555,350

25,562,742

7,391(2) Debentures

3,000,680

3,008,919

8,239(3) Trading Liabilities
47,05447,054－(4) Borrowed Money935,320

959,514

24,194(5) Bills Sold and Call Money

415,108

415,108－(6) Payables under Repurchase Agreements

73,94473,944－(7) Payables under Securities Lending Transactions

1,299,828

1,299,828－Total Liabilities

31,327,286

31,367,112

39,825

To which Hedge Accounting is not applied(14,497)(14,497)－To which Hedge Accounting is applied(213,144)(283,042)(69,898)(227,641)(297,539)(69,898)

Trading Bonds Sold

Derivatives (※2)

Total Derivatives

46

Millions of U.S.Dollars


Carrying Value

Fair Value

Difference(1) Cash and Due from Banks

57,111

57,111－(2) Bills Bought and Call Loans

4,249

4,249

－

416

416

－

(4) Receivables under Securities Borrowing Transactions

1,187

1,187

－

(5) Monetary Debts Purchased (※1)

1,929

1,929

0

Trading Securities

1,354

1,354

－

(7) Money Held in Trust

1,105

1,105

－

(3) Receivables under Resale Agreements(6) Trading Assets(8) Securities
Held-to-Maturity Debt Securities

15,487

16,516

1,029

Other Securities

141,349

141,349－(9) Loans and Bills Discounted
Reserve for Possible Loan Losses (※1)

48,986


(330)
48,65649,124467

Total Assets

272,847

274,3441,497(1) Deposits

212,695

212,75661(2) Debentures

24,97425,04368(3) Trading Liabilities
391

391

－

(4) Borrowed Money

7,784

7,985

201

(5) Bills Sold and Call Money

3,454

3,454

－
－

Trading Bonds Sold

(6) Payables under Repurchase Agreements

615

615

(7) Payables under Securities Lending Transactions

10,818

10,818－Total Liabilities

260,734

261,066

331

(120)

(120)

－

(1,773)(2,355)(581)(1,894)(2,476)(581)

Derivatives (※2)
To which Hedge Accounting is not applied
To which Hedge Accounting is applied
Total Derivatives※1. General and specific reserves for possible loan losses of Loans and Bills Discounted have been deducted. Loss reserves for Monetary
Debts Purchased 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.

47

As of March 31, 2014
Millions of YenCarrying Value

Fair Value

Difference(1) Cash and Due from Banks

4,938,807

4,938,807－(2) Bills Bought and Call Loans

578,351

578,351－(3) Receivables under Resale Agreements

86,98086,980－(4) Receivables under Securities Borrowing Transactions

173,390

173,390－(5) Monetary Debts Purchased (※1)

269,564

269,561(3)

Trading Securities

189,153

189,153－(7) Money Held in Trust

132,854

132,854－

Held-to-Maturity Debt Securities

2,117,999

2,232,967

114,968

Other Securities

16,050,519

16,050,519－(6) Trading Assets(8) Securities(9) Loans and Bills Discounted
Reserve for Possible Loan Losses (※1)

5,975,834
(35,509)5,940,325

5,994,535

54,210Total Assets

30,477,947

30,647,123

169,175(1) Deposits

23,677,799

23,688,362

10,563(2) Debentures

3,161,810

3,176,809

14,999(3) Trading Liabilities
68,836

68,836－(4) Borrowed Money

937,320

960,779

23,459(5) Bills Sold and Call Money408,067

408,067－(6) Payables under Repurchase Agreements

35,43735,437－

Trading Bonds Sold

(7) Payables under Securities Lending Transactions
Total Liabilities

966,659

966,659－

29,255,929

29,304,952

49,022

Derivatives (※2)
To which Hedge Accounting is not applied(11,063)(11,063)－To which Hedge Accounting is applied(160,852)(210,150)(49,297)(171,916)(221,214)(49,297)

Total Derivatives※1. General and specific reserves for possible loan losses of Loans and Bills Discounted have been deducted. Loss reserves for Monetary
Debts Purchased 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.
Note1: 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 is used 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 approximatescarrying 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 Debts Purchased
Monetary debt purchased is stated at amounts obtained from brokers.

48

(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
the exchanges 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
the quoted market prices or price calculated on the basis of rational estimation, etc.
For Floating-Rate Japanese Government Bonds, since the Bank believes that current market prices may not accurately reflect the bonds’
fair value, the Bank used a valuation technique at the end of the fiscal year that management believes provides a reasonable estimate of thebonds’ fair value. Fair value based on management’s reasonable estimates is calculated using the discounted cash flow approach and others,with the primary price variables including government bond yields and swaption volatility and others.
For overseas Collateralized Loan Obligations (CLOs) and certain other securitized products, fair value has been determined using avaluation 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 is calculated 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 is 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, categorizedby type 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, sincefair 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 consolidated closing date less the total recorded value of thereserve for possible 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,
fair value is calculated by discounting future cash flows to present value. The discount rate is the interest rate that would be applicable to newly
made deposits. For term deposits with short contractual maturities and term deposits with variable interest rates, since fair value approximatescarrying 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 theinterest 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
Derivative transactions consist of interest-rate-related transactions (interest rate futures, interest rate options, interest rate swaps, etc.),
currency-related transactions (currency futures, currency swaps, etc.), and bond-related transactions (bond futures, bond future options, etc.),
and are stated at exchange-traded transaction prices, discounted present value, or amounts calculated using option pricing models, etc.

49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

2015

Millions of U.S.Dollars
2014

2015

Unlisted stocks, etc.(※1) (※2)

244,745

242,784

2,037

Investment in investment partnerships(※3)

12,792

7,487

106

Total

257,538

250,272

2,143※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. In the fiscal year ended March 31, 2015, the Bank recognized impairment losses totaling ¥23 million ($0 million) on unlisted stocks.
※3. 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.
Note 3: Amounts of monetary claims and securities with maturities scheduled for redemption after the consolidated balance sheet date
As of March 31, 2015
Millions of Yen

50

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

6,771,462
510,601
49,987

9,007－－

63,022
－
－

1,000
－
－

－
－
－

－
－
－

142,726

－

－

－

－

－

Due from Banks (※1)
Bills Bought and Call Loan
Receivables under Resale Agreements
Receivables under Securities Borrowing
Transactions
Monetary Debts Purchased
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)

47,023

6,471

7,659

18,854

9,868

141,858

93,68476,600－－15,4002,418,746
1,425,600
50,39515,000342,476
3,497,311

623,846
619,400－－－
3,466,535
2,243,800
50,366－748,992
963,413498,811456,400400－－
2,656,604
1,667,500
40,182－
655,156
717,701

143,7291,800－－－
2,732,802
1,878,800
7,746－
445,297
317,338

114,596
49,300－－－2,475,509
1,243,500
23,814－515,480
234,693

404,488395,500－－－
1,039,290
799,000－－
29,014
146,601

Total

13,531,543

5,069,274

3,943,799

3,213,724

2,834,668

1,732,238

Millions of U.S.Dollars
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 Debts Purchased
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)

56,358
4,249
416

74
－
－

524
－
－

8
－
－

－
－
－

－
－
－

1,187

－

－

－

－

－

391

53

63

156

82

1,180

779
637
－
－
128
20,131
11,865
419
124
2,850
29,107

5,192
5,155
－
－
－
28,851
18,674
419
－
6,233
8,018

4,151
3,798
3
－
－
22,11013,878
334
－
5,452
5,973

1,196
14
－
－
－
22,744
15,637
64
－
3,706
2,641

953
410
－
－
－
20,603
10,349
198
－
4,290
1,953

3,366
3,291
－
－
－
8,649
6,650
－
－
241
1,220

Total

112,622

42,191

32,823

26,747

23,592

14,417※1. Current deposits, ordinary deposit, deposits at notice, and transfer deposits, included in “Due from banks,” are stated under amounts
redeemable “Within 1 year.”※2. The loans of ¥8,785 million ($73 million) which obligor categories are Bankrupt Borrowers, Substantially Bankrupt Borrowers or Probably
Bankrupt Borrowers and which periods of redemption cannot be foreseen are not included in Loans and Bills Discounted.
As of March 31, 2014
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

4,899,763
578,351
86,980

5,573－－

23,588
－
－

2,000
－
－

－
－
－

－
－
－

173,390

－

－

－

－

－

Due from Banks (※1)
Bills Bought and Call Loan
Receivables under Resale Agreements
Receivables under Securities Borrowing
Transactions
Monetary Debts Purchased
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)

3,714

49,7789,701

16,276

8,899

181,096

235,272
205,700－－
28,443
1,651,629
625,000
49,20415,000451,4223,715,739

377,611
360,300－－
15,4004,423,027
2,886,500
67,286－
695,742881,687

723,788
701,400200－－
2,370,871
1,597,000
39,068－484,912648,617

194,431
91,600200－－
1,891,401
1,355,000
6,753－
306,004
335,018

129,971
9,700－－－
3,028,927
2,126,000
19,896－357,688
231,299475,425
435,000－－－
957,080759,000－－
19,324
157,552

Total

11,344,842

5,737,679

3,776,566

2,439,127

3,399,097

1,771,154※1. Current deposits, ordinary deposit, deposits at notice, and transfer deposits, included in “Due from banks,” are stated under amounts
redeemable “Within 1 year.”※2. The loans of ¥6,484 million which obligor categories are Bankrupt Borrowers, Substantially Bankrupt Borrowers or Probably Bankrupt
Borrowers and which periods of redemption cannot be foreseen are not included in Loans and Bills Discounted.

51

Note 4: Amounts of deposits, debentures and other interest bearing debt scheduled for repayment after the consolidated balance sheet date
As of March 31, 2015
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)

13,428,175

Debentures

581,020

9,626,162957,648

189,464

1,353,900－

1,158,320

1,261,340－－

Borrowed Money (※2)

111,500－

10,000－108,150

216,200

162,480

Bills Sold and Call Money

415,108－－

Payables under Repurchase Agreements

73,944

－

－

－

－

－

－

－

Payables under Securities Lending
Transactions－

1,299,828

－

－

－

－

－

Total

15,909,577

10,794,482

2,218,988

297,614

1,570,100

162,480

Millions of U.S.Dollars
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)

111,761

80,117

7,970

1,576

11,268－Debentures

4,835

9,640

10,498－－－Borrowed Money (※2)

928

83

－

900

1,799

1,352

Bills Sold and Call Money

3,454

－

－

－

－

－

615

－

－

－

－

－

Payables under Securities Lending
Transactions

10,818

－

－

－

－

－

Total

132,41489,841

18,4682,477

13,067

1,352

Over 3 years,
within 5 years

Over 5 years,
within 7 years

Over 7 years,
within 10 years

Over 10 years

Payables under Repurchase Agreements※1. Demand deposits, included in “Deposits,” are stated under amounts payable “Within 1 year.”※2. Borrowed Money without maturity is not included.

As of March 31, 2014
Millions of Yen
Within 1 year

Over 1 year,
within 3 years

Deposits (※1)

12,161,005

9,336,656

847,704

157,303

1,160,629

14,500Debentures

798,960

1,159,380

1,203,470－－－

Borrowed Money (※2)

113,500

10,000－－324,350

162,480

Bills Sold and Call Money408,067

－

－

－

－

－

Payables under Repurchase Agreements

35,437

－

－

－

－

－

Payables under Securities Lending
Transactions

966,659

－

－

－

－

－

14,483,629

10,506,036

2,051,174

157,303

1,484,979

176,980

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

5225. 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), Cash and Due from Banks (negotiable certificates of deposit) and Monetary Debts Purchased (loaned claims in trust) in the
consolidated balance sheet.
(1) Trading Securities
Millions of Yen
2015
Net Unrealized Gains (Losses)
Recognized as Income

Millions of U.S. Dollars
2015

2014
89

99

0

(2) Held-to-Maturity Debt Securities
As of March 31, 2015

Millions of Yen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



Items with Fair
Value notExceeding Carrying
Value1,319,456
422－
15,414
265,439
1,600,733
383,710
－
－
－
2,000
385,710

1,862,770

1,986,444

123,674

Fair Value

Millions of U.S. Dollars



Items with Fair
Value Exceeding
Carrying Value

1,223,479
400－
15,400236,356
1,475,636
385,134
－
－
－
2,000
387,134

Unrealized
Gains (Losses)
95,97722－
1429,083125,097(1,423)－－－－
(1,423)Carrying Value

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

Unrealized
Gains (Losses)

10,182
3
－
128
1,967
12,281
3,205
－
－
－
16
3,222

10,981
3
－
128
2,209
13,322
3,193
－
－
－
16
3,210

798
0
－
0
242
1,041
(11)
－
－
－
－
(11)

15,503

16,533

1,029

53

As of March 31, 2014

Millions of YenItems with Fair
Value Exceeding
Carrying Value

Items with Fair
Value notExceeding Carrying
Value

1,314,524
400－
40,141
258,875
1,613,941
499,857
－
－
3,802
397
504,058

1,400,438
426－
40,255
288,708
1,729,829
498,947
－
－
3,801
389
503,138

Unrealized
Gains (Losses)
85,91326－
114
29,833
115,887
(910)
－
－
(1)
(7)
(919)

2,117,999

2,232,967

114,968

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, 2015

Millions of Yen 

Items with Carrying
Value Exceeding
Acquisition Cost

Items with Carrying
Value notExceedingAcquisition Cost

54

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

Carrying Value
68,57912,289,438
9,611,891
161,700
14,9972,500,848
4,101,037
16,459,055－
329,975
18,224
13,736－
298,014411,639
741,615
17,200,670

Acquisition Cost
26,90812,002,801
9,352,998
159,760
14,9952,475,046
3,793,147
15,822,857－
330,351
18,29813,754－298,299
422,133
752,484
16,575,342

Unrealized
Gains (Losses)
41,671
286,636
258,8931,940
125,801
307,889
636,198
－
(376)
(73)
(17)
－
(285)
(10,493)(10,869)
625,328Millions of U.S. Dollars

Stocks
Bonds
Japanese Government Bonds
Municipal Government Bonds
Short-Term Corporate Bonds
Corporate Bonds
Others570
102,284
79,9991,345
124
20,814
34,132

223
99,89877,844
1,329
124
20,59931,570

Unrealized
Gains (Losses)
346
2,385
2,154
16
0
214
2,562

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

136,987
－
2,746
151
114
－
2,480
3,426
6,172
143,159

131,692
－
2,749
152
114
－
2,482
3,513
6,262
137,955

5,295
－
(3)
(0)
(0)
－
(2)
(87)
(90)
5,204

 

Items with Carrying
Value Exceeding
Acquisition Cost

Items with Carrying
Value notExceedingAcquisition Cost

Carrying Value

Acquisition Cost

As of March 31, 2014

Millions of Yen 

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

Carrying Value
40,848
11,718,637
9,495,242
174,440
14,9962,033,958
3,522,239
15,281,725－
520,911
180,300
10,463－
330,147
522,118
1,043,029
16,324,755

Acquisition Cost
27,022
11,497,500
9,291,061
172,508
14,9952,018,934
3,339,934
14,864,457－
521,336
180,339
10,489－330,507527,033
1,048,370
15,912,828

Unrealized
Gains (Losses)
13,825
221,137
204,1811,931
015,024
182,304
417,268
－
(425)
(39)
(25)
－
(359)
(4,915)(5,340)411,927(4) Held-to-Maturity Debt Securities Sold during the Fiscal Year
Not applicable.

55(5) Other Securities Sold during the Fiscal YearFor the Fiscal Year Ended March 31, 2015  Millions of Yen
Amounts ofSecurities Sold 

Aggregate Gains on
Sales

Aggregate Losses on
Sales

Stocks37,372

8,106

62

Bonds

1,263,314

18,3192,463

Japanese Government Bonds

1,250,457

18,3192,283

Municipal Government Bonds

－

－

－

Short-Term Corporate Bonds

－

－

－

12,857－

179

Others200,778

1,535

862

Total

1,501,464

27,962

3,387

Corporate Bonds   Millions of U.S. Dollars
Amounts ofSecurities Sold 

Aggregate Gains on
Sales

Aggregate Losses on
Sales

Stocks

311

67

0

Bonds

10,514152

20

Japanese Government Bonds

10,407152

19

Municipal Government Bonds

－

－

－

Short-Term Corporate Bonds

－

－

－

Corporate Bonds

107

－

1

Others

1,671

12

7

Total

12,496232

28

For the Fiscal Year Ended March 31, 2014
  

 

Amounts ofSecurities Sold

Aggregate Gains on
Sales

Aggregate Losses on
Sales

Stocks20,023

6,155

168

Bonds

1,104,718

11,128

1,222

Japanese Government Bonds

1,097,469

11,1191,218

Municipal Government Bonds

－

－

－

Short-Term Corporate Bonds

－

－

－

7,249

8

4

Others1,529,994

5,799

27,390Total

2,654,736

23,08328,781

Corporate Bonds

56

Millions of Yen

(6) Impaired Securities
Of Securities other than Trading Securities (excluding those where there is significant difficulty in determining fair value), if the fairvalue 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 therate of decline over past periods, the securities are devalued and the fair value is recorded as the carrying amount on the consolidated
financial balance sheet. In addition the difference between the fair value and the acquisition price is treated as impairment losses in thefiscal year.
In the fiscal year ended March 31, 2015, the amount of impairment losses on securities was ¥249 million ($2 million) (all impairment
losses were incurred on other securities).
In the fiscal year ended March 31, 2014, there were no impairment losses.

2. Money Held in Trust(1) Money Held in Trust for Trading Purposes
As of March 31, 2015
Millions of Yen
Unrealized Gains (Losses)
Recognized as Income

Carrying Value
Money Held in Trust for
Trading Purposes

132,774

Carrying Value
Money Held in Trust for
Trading Purposes

36

Millions of U.S. Dollars
Unrealized Gains (Losses)
Recognized as Income

1,105

0

As of March 31, 2014
Millions of Yen
Unrealized Gains (Losses)
Recognized as Income

Carrying Value
Money Held in Trust for
Trading Purposes

131,852(157)(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, 2015
 Not applicable.
As of March 31, 2014

Carrying
Value
Other Money Held in Trusts

Acquisition
Cost

1,002

1,000

Millions of Yen
Items with
Carrying Value
ExceedingAcquisition Cost
2
2

Unrealized
Gains(Losses)

Items with
Carrying Valuenot Exceeding
Acquisition Cost－

Note:
"Items with Carrying Value Exceeding Acquisition Cost" and "Items with Carrying Value not Exceeding Acquisition Cost"each present a breakdown of "Unrealized Gains (Losses)".

57

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 sheets are as follows:
As of March 31, 2015
Millions of Millions of Yen
U.S. Dollars
Other Securities

609,393

5,071

－

－

Net Unrealized Gains

609,393

5,071

Deferred Tax Liabilities

169,303

1,409

Net Unrealized Gains(Prior to Equity Method Adjustment)

440,090

3,662

Minority Interests’ Portion－－

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

440,090

3,662

Other Money Held in Trust

Net Unrealized Gains

Note:
Unrealized Gains on foreign currency translations of foreign currency-denominated other securities where there issignificant difficulty in determining fair value are included in “Other Securities” under “Net Unrealized Gains”.
As of March 31, 2014
Millions of Yen
Other Securities
Other Money Held in Trust

394,171
2

Net Unrealized Gains

394,173

Deferred Tax Liabilities

107,760

Net Unrealized Gains(Prior to Equity Method Adjustment)

286,413

Minority Interests’ Portion－

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

Net Unrealized Gains

286,413

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

5826. Derivatives:
1. Derivative transactions to which hedge accounting is not applied
The following summarizes the contract values or the contracted principal equivalents, fair values, net unrealized gains (losses) and thevaluation methods of the fair values of the Bank’s derivative transactions that do not qualify for hedge accounting as of the consolidatedbalance sheet date, which are classified by types of financial instruments. Please note that the contract values in themselves do not reflect themarket risk associated with the Bank’s Derivative Transactions.
(1) Interest-Rate-Related Transactions
As of March 31, 2015
Millions of Yen
Total
Contract
Value

Contract Value(Over 1 Year until
Settlement or Expiry)

Fair ValueNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Interest Rate Futures:


Sold

－

－

－

－



Bought－－－－Interest Rate Options:


Sold

－

－

－

－



Bought－－－－Over the Counter Transactions
Interest Rate Forwards:


Sold

－

－

－

－



Bought－－－－Fixed Rate Receivable/Variable Rate Payable

9,648,211

8,339,757

154,881

154,881

Variable Rate Receivable/Fixed Rate Payable

9,586,236

7,355,887(103,717)(103,717)

Variable Rate Receivable/Variable Rate Payable

44,20024,2008

8

Fixed Rate Receivable/Fixed Rate Payable

30,00020,000－－Interest Rate Swaps:

Interest Rate Options:


Sold

－

－

－

－



Bought－－－－Others:Sold

3,948,400

2,580,000(58,453)(7,766)

Bought3,956,750

2,737,300(6,045)(30,306)－－(13,325)

13,099Total

59

Millions of U.S. Dollars
Total
Contract
Value

Contract Value(Over 1 Year until
Settlement or Expiry)

Fair ValueNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Interest Rate Futures:


Sold

－

－

－

－



Bought－－－－Interest Rate Options:


Sold

－

－

－

－



Bought－－－－Over the Counter Transactions
Interest Rate Forwards:


Sold

－

－

－

－



Bought－－－－Interest Rate Swaps:
Fixed Rate Receivable/Variable Rate Payable

80,301

69,411

1,289

1,289



Variable Rate Receivable/Fixed Rate Payable

79,78561,222

(863)

(863)

Variable Rate Receivable/Variable Rate Payable

367

201

0

0

Fixed Rate Receivable/ Fixed Rate Payable

249

166

－

－

Sold

－

－

－

－

Bought

－

－

－

－



Interest Rate Options:

Others:Sold32,862

21,473

(486)

(64)



Bought32,931

22,782

(50)

(252)

－

－

(110)

109

Total

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

60

As of March 31, 2014
Millions of Yen
Total
Contract
Value

Contract Value(Over 1 Year until
Settlement or Expiry)

Fair ValueNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Interest Rate Futures:


Sold

9,981

－

(0)

(0)



Bought

9,981

－

－

－

Interest Rate Options:


Sold

－

－

－

－



Bought－－－－Over the Counter Transactions
Interest Rate Forwards:


Sold

－

－

－

－



Bought－－－－Fixed Rate Receivable/Variable Rate Payable

12,614,058

10,047,075

198,444

198,444

Variable Rate Receivable/Fixed Rate Payable

12,266,614

9,132,797(159,467)(159,467)

Variable Rate Receivable/Variable Rate Payable

54,20044,20022

22

Fixed Rate Receivable / Fixed Rate Payable

30,00030,000－－Interest Rate Swaps:

Interest Rate Options:


Sold

－

－

－

－



Bought－－－－Others:Sold4,684,400

2,844,400(48,808)(1,921)

Bought4,320,666

2,905,250(1,522)(20,917)－－(11,332)

16,159Total

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

61(2) Currency-Related Transactions
As of March 31, 2015
Millions of Yen
Contract Value(Over 1 Year until
Settlement or Expiry)

Total Contract
Value
Exchange-Traded Transactions
Currency Futures:

Net Unrealized
Gains (Losses)

Fair Value










   Sold

－

－

－

－

   Bought

－

－

－

－

  Currency Options:









   Sold

－

－

－

－

   Bought

－

－

－

－





29,268

9,756

(367)

(367)

   Sold

63,339342(1,268)(1,268)   Bought

74,315

324

1,027

1,027

   Sold

－

－

－

－

   Bought

－

－

－

－

   Sold

－

－

－

－

   Bought

－

－

－

－

Total

－

－

(607)

(607)

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

62

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

Total Contract
Value
Exchange-Traded Transactions
Currency Futures:

Net Unrealized
Gains (Losses)

Fair Value










   Sold

－

－

－

－

   Bought

－

－

－

－

  Currency Options:









   Sold

－

－

－

－

   Bought

－

－

－

－





243

81

(3)

(3)

   Sold

527

2

(10)

(10)

   Bought

618

2

8

8

   Sold

－

－

－

－

   Bought

－

－

－

－

   Sold

－

－

－

－

   Bought

－

－

－

－

Total

－

－

(5)

(5)

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

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated statements
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)

63

As of March 31, 2014
Millions of Yen
Contract Value(Over 1 Year until
Settlement or Expiry)

Total Contract
Value
Exchange-Traded Transactions
Currency Futures:

Net Unrealized
Gains (Losses)

Fair Value










   Sold

－

－

－

－

   Bought

－

－

－

－

  Currency Options:









   Sold

－

－

－

－

   Bought

－

－

－

－





38,92425,076(87)(87)

   Sold

87,058

142

(485)

(485)

   Bought

64,397

－

719

719

   Sold

－

－

－

－

   Bought

－

－

－

－

   Sold

－

－

－

－

   Bought

－

－

－

－

Total

－

－

146

146

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

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated statements
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.

64(4) Bond-Related Transactions
As of March 31, 2015
Millions of Yen
Total
Contract
Value

Contract Value(Over 1 Year until
Settlement or Expiry)

Fair ValueNet Unrealized
Gains (Losses)

13(0)

Exchange-Traded Transactions
Bond Futures:



Sold

7,080

－

Bought

736

－

13
(0)

Bond Futures Options:


Sold

－

－

－

－



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

Sold

－

－

－

－



Bought

2,000

－

6

(0)

－

－

Others:


Sold

－

－



Bought

－

－

－

－

－

－

19

12

Fair ValueNet Unrealized
Gains (Losses)

Total

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

Total
Contract
Value
Exchange-Traded Transactions
Bond Futures:


Sold

58

－



Bought

6

－

0
(0)

0
(0)

Sold

－

－

－

－

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

Sold

－

－

－

－



Bought

16

－

0

(0)

Others:


Sold

－

－

－

－



Bought

－

－

－

－

－

－

0

0

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statements of income.
2. Fair value calculation: Transactions on exchanges 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.

65

As of March 31, 2014
Millions of Yen
Total
Contract
Value

Contract Value(Over 1 Year until
Settlement or Expiry)

Fair ValueNet Unrealized
Gains (Losses)

Exchange-Traded Transactions
Bond Futures:


Sold

4,633

－



Bought10,869

－

5
(23)

5
(23)

Bond Futures Options:


Sold

－

－

－

－



Bought

－

－

－

－

Sold

－

－

－

－

Bought

－

－

－

－
－

Over the Counter Transactions
Bond Options:

Others:


Sold

－

－

－



Bought

－

－

－

－

－

－

(17)

(17)

Total

Notes:
1. Transactions mentioned above are valued at fair value, and Net Unrealized Gains (Losses) are accounted for in the consolidated
statements of income.
2. Fair value calculation: Transactions on exchanges 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.

662. Derivative transactions to which hedge accounting is applied
The following summarizes the contract values or the contracted principal equivalents, fair values and the valuation methods of the Bank’s
derivative transactions that qualify for hedge accounting as of the consolidated balance sheet date, which are classified by types of financial
instruments. Please note that the contract values in themselves do not reflect the market risk associated with the Bank’s Derivative
Transactions.
(1) Interest-Rate-Related Transactions
As of March 31, 2015
Method for Hedge
Accounting
Basic Treatment



Items

Fair Value

Fixed Rate Receivable/Variable Rate Payable

120,000

80,000

4,796

Variable Rate Receivable/Fixed Rate Payable

5,795,775

5,071,745(174,149)

Variable Rate Receivable/Variable Rate Payable

113,930－(1,425)

Fixed Rate Receivable/Variable Rate Payable

820,000

540,000

4,244

Variable Rate Receivable/Fixed Rate Payable

979,306

979,306(74,142)－－(240,676)Interest Rate Swaps



Total

Method for Hedge
Accounting

Total Contract
Value

Interest Rate Swaps

Exceptional
Treatments forInterest Rate
Swaps

Basic Treatment

Millions of Yen
Contract Value(Over 1 Year until
Settlement or Expiry)

Items

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

Total Contract
Value

Fair Value

Interest Rate Swaps
Fixed Rate Receivable/Variable Rate Payable

998

665

39

Variable Rate Receivable/Fixed Rate Payable

48,23742,211(1,449)Variable Rate Receivable/Variable Rate Payable

948

－

(11)

Fixed Rate Receivable/Variable Rate Payable

6,824

4,494

35

Variable Rate Receivable/Fixed Rate Payable

8,150

8,150

(617)

－

－

(2,003)

Exceptional
Treatments forInterest Rate
Swaps

Interest Rate Swaps



Total

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, “Accounting and Auditing Treatment of Accounting Standards for Financial Instruments in Banking Industry”.
4. Fair value calculation: Transactions on exchanges are valued on the basis of closing prices, mainly on the Tokyo Financial Exchange Inc.
Over the counter transactions are valued using discounted present value or calculation models for option prices, etc.

67

As of March 31, 2014
Method for Hedge
Accounting
Basic Treatment

Items

Millions of Yen
Contract Value(Over 1 Year until
Settlement or Expiry)

Total Contract
Value

Fair Value

Interest Rate Swaps



Fixed Rate Receivable/Variable Rate Payable

635,000

120,000

6,834

Variable Rate Receivable/Fixed Rate Payable

5,387,830

5,067,331(111,509)

Variable Rate Receivable/Variable Rate Payable

118,340

118,340(4,975)

Exceptional
Treatments forInterest Rate
Swaps

Interest Rate Swaps



Total

Fixed Rate Receivable/Variable Rate Payable

980,000

820,000

6,927

Variable Rate Receivable/Fixed Rate Payable

920,020920,020(56,225)－－(158,948)

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, “Accounting and Auditing Treatment of Accounting Standards for Financial Instruments in Banking Industry”.
4. Fair value calculation: Transactions on exchanges are valued on the basis of closing prices, mainly on the Tokyo Financial Exchange Inc.
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, 2015


Method for Hedge
Accounting
Basic Treatment

Millions of Yen
Items

Currency Swaps

Contract Value(Over 1 Year until
Settlement or Expiry)

Total Contract
Value

Fair Value

419,012263,397(901)

Forward Foreign Exchange Contracts:
806,775

－

1,903



㻌 Sold㻌㻌 Bought㻌

－

－

－



Total

－

－

1,002





Method for Hedge
Accounting
Basic Treatment

Millions of U.S.Dollars
Items

Currency Swaps

Contract Value(Over 1 Year until
Settlement or Expiry)

Total Contract
Value

Fair Value

3,487

2,192

(7)

Forward Foreign Exchange Contracts:

68㻌 Sold㻌

6,714

－

15



㻌 Bought㻌

－

－

－



Total

－

－

8

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, “Accounting and Auditing Treatment of Accounting Standards for Foreign Currency Transactionsin 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)

As of March 31, 2014

Method for Hedge
Accounting
Basic Treatment

Millions of Yen
Items

Currency Swaps

Contract Value(Over 1 Year until
Settlement or Expiry)

Total ContractValue
606,086

Fair Value

273,255(1,819)Forward Foreign Exchange Contracts:
1,115,258－(9,168)㻌 Bought㻌㻌 Sold㻌

－

－

－



Total

－

－

(10,988)

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, “Accounting and Auditing Treatment of Accounting Standards for Foreign Currency Transactionsin 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.

27. Related Party Transactions:
For the Fiscal Year Ended March 31, 2015
There were no significant related-party transactions.
For the Fiscal Year Ended March 31, 2014
There were no significant related-party transactions.

6928. Segment Information:
(1) Description of Reportable Segments
The Group classifies the businesses of the Bank and its consolidated subsidiaries as individual business segments. Among thosebusiness segments, the business of the Bank is deemed as the reportable segment.
  The Bank, as an individual financial institution, provides such financial services as deposits, debentures, lending, market fundmanagement, trading operations and clearing. As the central financial institution for Shinkin Banks, the Bank complements the functionsof the Shinkin Banks and operates the shinkin bank industry’s own safety net, including the Shinkin Bank Management Reinforcement
System. By doing so, the Bank 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 net income.
(3) Amounts by Reportable Segment
For the Fiscal Year Ended March 31, 2015
(Millions of Yen) 

Reportable segment

 

Shinkin Central Bank
business

Other

Total

Adjustment

Amount presented
in the consolidated
financial statements

Income External customers

275,92132,076

307,997(103)

307,894

2,314

2,147

4,462

(4,462)－

Total

278,236

34,224

312,460(4,565)

307,894

Segment profit

60,817

2,916

63,734(1,037)

62,696

Segment assets

33,269,249

320,182

33,589,431(73,357)

33,516,073

Segment liabilities

31,861,297

235,304

32,096,601(14,284)

32,082,317

 Depreciation

4,025

4,417

8,443

(0)

8,442

 Interest Income

219,379464

219,844(80)

219,763

 Interest Expenses

130,710151

130,862(20)

130,841

 Income Taxes

20,187

1,375

21,562  

20

21,583

Increase in Tangible andIntangible Fixed Assets

5,181

4,354

9,536

－

9,536

 Inter-segment

Other items

70

(Millions of U.S. Dollars) 

Reportable segment

 

Shinkin Central Bank
business

Other

Total

Adjustment

Amount presented
in the consolidated
financial statements

Income External customers

2,296

266

2,563

(0)

2,562

19

17

37

(37)

－

2,315

284

2,600

(37)

2,562

Segment profit

506

24

530

(8)

521

Segment assets

276,897

2,664

279,562(610)

278,951

Segment liabilities

265,179

1,958

267,137(118)

267,018

 Depreciation

33

36

70

(0)

70

 Interest Income

1,825

3

1,829

(0)

1,829

 Interest Expenses

1,087

1

1,089

(0)

1,088

 Income Taxes

168

11

179

0

179

Increase in Tangible andIntangible Fixed Assets

43

36

79

－

79

 Inter-segment
Total

Other items

Notes:
1. The “Other” classification comprises the Bank’s eight consolidated subsidiaries which are not included within the reportable segment.
The Bank’s consolidated subsidiaries provide such financial services as trust and banking, securities, asset management, consumer credit
guarantees, venture capital and M&A intermediary, and data processing outsourcing.
2. Adjustment comprises the following.
(i)Within adjustment of segment profit, reduction of ¥1,037 million ($8 million) comprises reduction of ¥586 million ($4 million) on
minority interests and ¥451 million ($3 million) on inter-segment eliminations, etc.
(ii)Within adjustment of segment assets, reduction of ¥73,357 million ($610 million) comprises reduction of ¥53,114 million ($442
millions) on eliminations relating to capital consolidation and ¥20,242 million ($168 million) on inter-segment elimination, etc.
(iii) Reduction of ¥14,284 million ($118 millions) on the adjustment of segment liabilities comprises inter-segment eliminations, etc.
(iv)The adjustment for other items comprises inter-segment eliminations, etc.
3. Segment profit has been adjusted from Net Income presented in the Consolidated Statement of Income.

71For the Fiscal Year Ended March 31, 2014
(Millions of Yen) 

Reportable segment

 

Shinkin Central Bank
business

Other

Total

Amount presented
in the consolidated
financial statements

Adjustment

Income External customers

278,879

29,390308,270(98)

308,171

2,092

2,192

4,285

(4,285)－

Total

280,971

31,583

312,555(4,383)308,171

Segment profit

35,396

2,821

38,218(606)

37,612

Segment assets

30,939,429

312,993

31,252,423(67,858)

31,184,564

Segment liabilities

29,684,307

231,589

29,915,896(8,158)29,907,738

 Depreciation

4,839

4,195

9,034

(0)

9,033

 Interest Income

229,617473

230,091(84)

230,006

 Interest Expenses

141,222

189

141,411(27)

141,383

 Income Taxes

13,2691,463

14,732(428)

14,304

Increase in Tangible andIntangible Fixed Assets

4,269

2,153

6,422

－

6,422

 Inter-segment

Other items

Notes:
1. The “Other” classification comprises the Bank’s eight consolidated subsidiaries which are not included within the reportable segment.
The Bank’s consolidated subsidiaries provide such financial services as trust and banking, securities, asset management, consumer credit
guarantees, venture capital and M&A intermediary, and data processing outsourcing.
2. Adjustment comprises the following.
(i)Within adjustment of segment profit, reduction of ¥606 million comprises reduction of ¥706 million on minority interests and additionof ¥100 million on inter-segment eliminations, etc.
(ii)Within adjustment of segment assets, reduction of ¥67,858 million comprises reduction of ¥53,114 million on eliminations relating tocapital consolidation and ¥14,743 million on inter-segment elimination, etc.
(iii) Reduction of ¥8,158 million on the adjustment of segment liabilities comprises inter-segment eliminations, etc.
(iv)The adjustment for other items comprises inter-segment eliminations, etc.
3. Segment profit has been adjusted from Net Income presented in the Consolidated Statement of Income.

(Related Information)
For the Fiscal Year Ended March 31, 2015
1. Information by service(Millions of Yen)
Income from externalcustomers

Securities investment
operations
211,483

Lending operations

Other

27,652

Total
68,758307,894(Millions of U.S. Dollars)
Income from externalcustomers

72

Securities investment
operations
1,760

Lending operations
230

Other

Total
572

2,562

2. Information by geographic region(1) Income                                 JapanEuropeUnited States
179,728
18,48324,159Other
85,523                             JapanEuropeUnited States
1,495
153
201

(Millions of Yen)
Total
307,894(Millions of U.S. Dollars)
Total
711
2,562

Other

Note:
Income from derivative transactions and Trading income is included in Other.
(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

Income77,758(Millions of Yen)
Related segment
Shinkin Central Bank business

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

For the Fiscal Year Ended March 31, 2014
1. Information by service(Millions of Yen)
Securities investment
operations

Income from externalcustomers

Lending operations

212,876

Other

33,257

2. Information by geographic region(1) Income                                 JapanEuropeUnited States
170,031
28,112
23,145

Total
61,702

Other
86,548307,837(Millions of Yen)
Total
307,837

Note:
Income from derivative transactions and Trading income is included in Other.
(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

Income78,912(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, 2015
(Millions of Yen)

Impairment losses

Reportable segment
Shinkin Central Bank business
64

Impairment losses

Reportable segment
Shinkin Central Bank business
0



Other

Total
－

64
(Millions of U.S. Dollars)



Other

Total
－

0

For the Fiscal Year Ended March 31, 2014
Not applicable.
Note:
The “Other” classification comprises the Bank’s eight consolidated subsidiaries which are not included within the reportable segment.
The Bank’s consolidated subsidiaries provide such financial services as trust and banking, securities, asset management, consumer credit
guarantees, venture capital and M&A intermediary, and data processing outsourcing.

(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.

7429. Amounts per Share:
Yen
2015
Net Assets per ShareNet Income per Share

U.S. Dollars
2015

2014

301,997.98

268,795.17

2,513.50

12,865.13

7,537.36

107.07－－－Net Income per Share after Adjustment for Common
Share equivalents

Notes:
1. In the calculation of net assets per share and net income per share, preferred dividends are deducted from current net income. However,participating dividends are not deducted from current net income.
2. The basis for calculation of net assets per share is as follows:
2015
2015
2014
Total Net Assets

Millions of Yen

1,433,756

1,276,826

Millions of U.S.
dollars

11,933

Amount Deducted from Total Net Assets

Millions of Yen

11,883

11,279Millions of U.S.
dollars

98

Minority Interests

Millions of Yen

9,758

9,154

Millions of U.S.
dollars81

Preferred Dividends

Millions of Yen

2,124

2,124

Millions of U.S.
dollars

17

Millions of Yen

1,421,873

1,265,547

Millions of U.S.
dollars

11,834Unit

4,708,222

4,708,222－－

Number of 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
Number of Share Units at Fiscal Year-end

3. The basis for calculation of net income per share is as follows:
2015

2015

2014

Net Income

Millions of Yen

62,696

37,612Millions of U.S.
dollars

521

Amount Deducted from Net Income

Millions of Yen

2,124

2,124

Millions of U.S.
dollars

17

Millions of Yen

2,124

2,124

Millions of U.S.
dollars

17

Millions of Yen

60,57135,487

Millions of U.S.
dollars504

Unit

4,708,222

4,708,222－－

Average Number of Common
Share Units

Unit

4,000,000

4,000,000－－

Average Number of Preferred
Share UnitsUnit

708,222708,222－－

Preferred Dividend
Net Income Used to Calculate
Net Income per share
Average Number of Share Units for the
fiscal year75

4.As stated in the note regarding “Changes in Accounting Policies,” from this fiscal year, the Bank adopted provisions of the “AccountingStandard for Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012) and “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25, March 26, 2015). Specifically, the Bank adopted provisions described in paragraph 35 of the main textof the “Accounting Standard for Retirement Benefits”, paragraph 67 of the main text of the “Guidance on Accounting Standard for
Retirement Benefits.”, and for transitional provisions, paragraph 37 of the “Accounting Standard for Retirement Benefits.”
The impact of these changes on net assets per share and net income per share is immaterial.
5.Net income per Share after adjustment for Common share equivalents is not listed as there are no dilutive securities.

30.

Subsequent Events:
On April 24, 2015, the Board of Directors passed a resolution for capital-raising through a private offering of specific common shares.
Details of the offering are as follows.
1. Summary of Share Offering(1) Investors
Shinkin Banks(2) Offering Amount
Approximately ¥200 billion (Notes 1 and 2)(3) Funding Method
Specific common shares (Through a change in the Bank’s Articles of Incorporation, the amount of distribution of residual assets per
share shall be made up to the amount of contribution, but limited to ¥100,000 per share.)(4) Closing Date
September 30, 2015(5) Estimated dividend¥1,500 per share (1.5% per annum)(6) Condition precedent
Regarding the change to the Bank’s Articles of Incorporation relating to the private offering of specific common shares, approval by
the annual General Assembly of Representatives and authorization by regulatory authorities are set as conditions precedent. (Note 3)
Notes:
1. The issuance price per share is ¥100,000, and the number of shares to be issued is 2,000,000 shares.
2. All of the capital raised will be included in Common Shares and Preferred Shares.
3. At the annual General Assembly of Representatives held on June 19, 2015, the change in Articles of Incorporation relating to theprivate offering of specific common shares was approved.
2. Purpose of the Capital Increase
The purpose of the Capital Increase is to further enhancing and strengthen the Bank’s financial base in preparation for expected
tightening of financial regulations.

76

77

Non-Consolidated Balance Sheet
Non-Consolidated Balance Sheet
Millions of
U.S. Dollars

Millions of Yen
Shinkin Central Bank As of March 31,
AssetsCash and Due from Banks
Call Loans
Receivables under Resale Agreements
Receivables under Securities Borrowing Transactions
Monetary Debts Purchased
Trading Assets
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchanges Assets
Other Assets
Tangible Fixed Assets
Intangible Fixed Assets
Customers’ Liabilities for Acceptances and Guarantees
Reserve for Possible Loan Losses
Allowance for Investment Losses
Total Assets

78

2015

2014

6,854,374
510,601
49,98785,418229,858
160,130
132,774
19,132,160
5,885,739
9,178
79,741
69,773
4,543
108,691(43,723)
33,269,249

4,927,322
578,351
86,980104,692
269,583
162,090132,854
18,450,501
5,975,832
5,212
130,148
68,797
4,602
82,383(39,919)(5)
30,939,429

57,048
4,249
416
710
1,913
1,332
1,105
159,235
48,986
76
663
580
37
904
(363)
276,897

Liabilities and Net Assets
Liabilities
Deposits
Debentures
Trading Liabilities
Borrowed Money
Call Money
Payables under Repurchase Agreements
Payables under Securities Lending Transactions
Foreign Exchanges Liabilities
Other Liabilities
Reserve for Employee Bonuses
Reserve for Directors’ Bonuses
Reserve for Employee Retirement Benefits
Reserve for Directors’ Retirement Allowances
Deferred Tax Liabilities
Deferred Tax Liabilities for Land Revaluation
Acceptances and Guarantees
Total Liabilities

25,571,093
3,007,780
99,260935,320
382,108
73,944
1,281,700
264
263,554
1,235
80
18,049358
111,750
6,106
108,691
31,861,297

23,689,313
3,168,110
89,700937,320
366,767
35,437
950,945558
273,344
1,214
78
17,537327
65,164
6,106
82,38329,684,307

212,826
25,033
826
7,784
3,180
615
10,667
2
2,193
10
0
150
2
930
50
904
265,179

Total Net Assets
Total Liabilities and Net Assets

1,407,951
33,269,249

1,255,122
30,939,429

11,718276,8972015

Non-Consolidated Statement of Income
Non-Consolidated Statement of Income
Millions of
U.S. Dollars

Millions of Yen
Shinkin Central Bank For the year ended March 31,
IncomeInterest Income:Interest on Loans and Discounts
Interest on Due from Banks
Interest on Call Loans
Interest on Receivables under Resale Agreements
Interest on Receivables under Securities Borrowing Transactions
Interest and Dividends on Securities
OthersFees and Commissions
Trading Income
Other Operating Income
Other Income
Total Income

Expenses
Interest Expenses:
Interest on Deposits
Interest on Debentures
Interest on Borrowed Money
Interest on Call Money
Interest on Payables under Repurchase Agreement
Interest on Payables under Securities Lending Transactions
Interest Payable on Interest Rate Swaps
OthersFees and Commissions
Trading Losses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses

2014

2015

2015

219,379
27,652
7,454
1,107
58
180
181,504
1,422
7,774
18,18523,266
9,630
278,236

229,61733,257
6,471
891
104
255
186,739
1,897
7,485
14,72422,087
7,055
280,971

1,825
230
62
9
0
1
1,510
11
64
151
193
80
2,315

130,710
48,545
13,938
11,129695
97
2,216
52,240
1,845
6,223
238
29,366
26,418
4,273
197,230

141,22253,32323,564
9,584
652
1
2,593
㻡㻜㻘㻞㻢㻤
1,233
6,518
243
45,851
26,39012,079232,305

1,087
404
116
92
5
0
18
434
15
51
1
244
219
35
1,641

81,00548,665674

17,6862,501
20,18760,817

1,845
11,423
13,26935,396

147
20
168
506

Income before Income Taxes
Income Taxes
Current
Deferred
Total Income Taxes
Net Income

Yen
2015

Net Income Per ShareDividend Declared per Share (Common Shares)
Dividend Declared per Share (Preferred Shares)

12,466.12
3,500.00
7,000.00

U.S. Dollars
2014

7,066.76
3,000.00
6,500.00

2015

103.75
29.13
58.26

79

Organization (As of July 31, 2015)
General Meeting of Members
Auditors
Board of Directors
Chairman of the Board of Directors (Part-Time)
President and Chief Executive Officer
Deputy President
Senior Managing Director
Managing Directors
Directors

Chief Secretary
Internal Audit Division
General Affairs Division
Legal & Compliance OfficeBusiness Continuity Management Office
Personnel Division
Strategic Planning Division
Investor & Public Relations OfficeFinancial Management Division
Risk Management Division
Credit Planning & Supervision 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 DivisionCorporate 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

Support & Advisory Division for Shinkin Banks
Consulting 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
Shinkin Vitalizing Local Economy Support Center

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 Tohoku Branch

SCB Group
SCB Group
Trust businessBanking

Shinkin
Trust Bank

80

Shinkin
Securities

Trust business
Fund trust
Special money trust
Securities
investment trust
Negotiablesecurities trust
Money debentures
trust
Designated gift
trust
Public interest trust
Land trust■

Dealing■

Brokerage■

Underwriting■

Banking■■¥10bn in capital(100% ownership)

■

Asset
management

Personal loan
guarantee

Venture capital
M&A advisory

Data processing
consignment

Consigned
clerical works

Shinkin AssetManagement

Shinkin
Guarantee

Shinkin
CapitalThe Shinkin Banks
Information
System Center

Shinkin
ChukinBusiness■

Data processing
consignment(handles SCB
administrative work)■

Softwaredevelopment■

Computing■

Promissory
note exchange■

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

Securities

ShinkinInternational■■■¥20bn in capital(100% ownership) ;¥10bn capitalreserve■

Underwriting new
bonds and agency
business in theeuro market
Dealing andbrokering forexisting euro
bonds
Foreign securities
investment andconsulting
30mn pounds incapital (100%ownership)
London local
securities entity

■

■

■

Management
services fordiscretionary
investment contract
assets■Management
services forinvestment trust
assets¥200mn in capital(100% ownership)■

Debt guarantee
business(guarantees for
unsecuredpersonal loans
provided byshinkin banks)¥1.0bn in capital(99.1% stakewith Shinkin
Trust Bank at 0.8%) ;¥0.8bn capitalreserve■

Venturecapitalbusiness■

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

Shinkin Central Bank,
the Central Bank for
Shinkin Banks

International Directory (As of July 31, 2015)
Deputy President(in charge of Treasury Operations)Katsuo Akiyama
Senior Managing Director(in charge of International Planning)
Hiroyuki Shibata

As the central financial institution in Japan forthe cooperative regional financial institutions,known as shinkin banks, the Shinkin Central Bank
(hereinafter the SCB) occupies a well-establishedposition in Japan’s financial industry. Shinkin banks
currently hold funds totaling some ¥131 trillion(around $1,098 billion) in funds.

Senior Managing Director(in charge of International Operations/
Overseas Offices)
Akira Ito
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
Director: Atsushi Kudo
International Business Solution Division(including International Operations Center/
Correspondent Banking)Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7703
Facsimile: +81-3-3278-7035
General Manager: Makoto Asahi
International Operations Center
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: Shigeo Enomoto

Management Philosophy andOperational Policies
Management Philosophy
As the central bank for all shinkin banks, the SCB supports thegrowth of the shinkin bank sector, 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 inhand 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, 2015)
Name:
Establishment:
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:

Shinkin Central Bank (SCB)
June 1, 1950
1,205
14
5
¥33,178 billion ($276 billion)¥31,726 billion ($264 billion)¥490 billion ($4,086 million)¥90 billion ($757 million)

36.40%267
A1 (Moody’s)
A+ (S&P)
A+ (R&I)
AA (JCR)		(As of July 31, 2015)
Note: ‌The number of employees includes full-time Directors and Auditors. Our
overseas network includes Shinkin International Ltd., a subsidiary in London.
The total assets and total funds are the average balances for the year ended
March 31, 2015.

Operations Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7655
Facsimile: +81-3-3278-7041
General Manager: Minoru Suzuki
Corporate Business Promotion Division
Address: 3-7, Yaesu 1-chome,
Chuo-ku, Tokyo 103-0028
Telephone: +81-3-5202-7665
Facsimile: +81-3-3278-7045
General Manager: Akira Tatano
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: Kengo Kaji
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: Kenji Tanaka

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: Tomoaki Nishimura

New York

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

LondonOverseas Offices
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: Tomohiro Kishi

ShanghaiHong Kong
BangkokHong 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: Kozo Harada
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: Hiroyuki Niwa
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: Minetaka Kawai

Hokkaido

Overseas Subsidiary
Shinkin International Ltd.
Address: 1st Floor, 85 London Wall,London EC2M 7AD, U.K.
Telephone: +44-20-7562-0500
Facsimile: +44-20-7256-8544
Managing Director: Koichi Kawashima
TohokuHokuriku

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: Daigo Morishita

ChugokuOkayama Kobe
Osaka

Head Office

NagoyaShizuoka

Shikoku

FukuokaMinami-Kyushu

Head Office
BranchOffice/Subsidiary

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

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Shinkin Central Bank

Annual Report 2015

Shinkin Central Bank

Annual Report 2015

Shinkin Central Bank

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

Printed in Japan