Japan Securities Finance Co., Ltd.
FY2019Financial Results Presentation

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜Table of Contents
 １．Executive summary of Financial Results for FY2019

Ｐ３

 ２．Summary Financial Results for FY2019

Ｐ４ ３．Summary Financial Results for FY2018（JSF parent）

Ｐ５ ４．Financial Highlight（Margin Loan Business）

Ｐ６

 ５．Financial Highlight（”Securities Finance” Business）

Ｐ７

 ６．Financial Highlight（Securities Investment of JSF parent）

Ｐ８ ７．Summary Financial Results for FY2018（ JSF Trust Bank）

Ｐ９

 ８．Balance Sheet Summary (Consolidated)

Ｐ１０

 ９．Estimated Figures for FY2020

Ｐ１１

 10．Return to Shareholders

Ｐ１２

 12．Dividend and Share Buyback Program（historical）

Ｐ１４

 The 6th Mid-term Management Plan (FY2020 to FY2022)

Ｐ１５

 Appendix

Ｐ２０

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

2

１．Executive Summary（¥ mil）

FY2019Full Year

YoY ⊿

⊿％

Operating
Revenues

29,101

Operating
Income

4,129

＋148

＋3.7％

Recurring
Income

4,894

▲152

△3.0％

Net
Income3,556＋4,780 ＋19.7％▲209

Copyright Japan Securities Finance Co., LTD. All Rights Reserved△5.6％

Highlight
 Margin Loan Business resulted
increase due to an increase of Stock
Loan Balance（+29.6％）
 Bond Lending boosted Securities
Lending Business（+12.8％）

 The impact (352 ¥mil) of recording
part of dividend income as
operating revenues with reviewing
on the classification of some stocks
hold.

 Loss of sales of securities（36¥mil）was recorded by consolidated
subsidiary (Nihon Building Co., Ltd.)〜 All For Securities Market 〜

3２．Summary Financial Results for FY2019
Consolidated（¥ mil）

Operating
Revenues

FY2019Full Year

YoY.⊿

Parent(%⊿)

JSF

JSF Trust Bank

Nihon Building

YoY.⊿

YoY.⊿

YoY.⊿

29,101

4,780(＋19.7%)25,3834,142

ExceptPremium Charges

20,8462,243(＋12.1%)

17,128

1,875

Operating Expenses

16,8354,550(＋37.0%)15,725

4,321

ExceptPremium Charges

8,585

2,018

(＋30.7%)

7,476

1,789

General &Administrative Expenses

8,136

80

(＋1.0%)

6,746

Operating Income

4,129

148

(＋3.7%)

Recurring Income

4,894

▲152

(△3.0%)

Gain or Loss inEquity-Method

306

58

(＋23.5%)Extraordinary
Profit or Loss

▲36

4

Net Income

3,556

▲209

2,946

407

1,282

7

1,230

286

21

1

▲7

1,118

113

661

▲27

2,911

98

597

7

599

33

3,432

▲221

620

6

728

54

(ー)

―

41

―

―

▲36

▲36

(△5.6%)

2,490

▲186

496

▲41

458

12

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

4３．Summary Financial Results for FY2019（JSF parent）
Key Points

Japan Securities Finance（parent）*excluding premium charge（¥ mil）

FY2019Full Year

YoY.⊿●Operating Revenues(%⊿)

Operating Revenues*

17,1281,875(＋12.3%)

Margin Loan Business*

4,262

319

(＋8.1%)

General Loans
Business *1

1,312

70

(＋5.7%)

Securities Lending
Business *2

7,322

840

(+13.0%)

Others4,230

644(＋18.0%)Operating Expenses*

7,476

1,789

(＋31.5%)General &Administrative Expenses

6,746

▲7

(△0.1%)

Operating Income

2,911

98

(＋3.5%)

Recurring Income

3,432

▲221

(△6.1%)

Extraordinary
Profit or Loss

―

41

（ー）

Net Income

2,490

▲186

(△7.0%)＊1 Loans of funds other than Margin Loan Business＊2 Securities lending other than Margin Loan Business
Copyright Japan Securities Finance Co., LTD. All Rights Reserved Margin Loan Business resulted inincrease due to higher stock loanbalance. Business other than Margin
Loan also showed solid performance.
̶

Recorded ¥17,128mil, up ¥1,875mil(+12.3%) YoY
̶ In General Loan Business, revenue increased
due to an increase in use of Equity repo
transactions, though the balance of loans tofinancial instruments business operators and
COM-STOCK loan decreased.
̶ Securities Lending Business resulted inincrease in revenue reflecting strong
performance in Bond Lending , though Stock
Lending had a hard time .
※For details of each business, see “Financial
Highlights for FY2019” (P6-P8)●Operating Expenses
̶̶

¥7,476 mil , Up ¥1,789mil (+31.5%) YoY
reflected that fees on borrowing securities
related to Securities Lending business, costs
on Gensaki transactions and adjustment ofinvestment portfolio increased.

●Factor of increase in operating
income(drop in recurring income)̶

The impact of recording part of dividend
income as operating revenues withreviewing on the classification of somestocks hold.

〜 All For Securities Market 〜

5

４．Financial Highlight （Margin Loan Balance）
Margin Loan Balance showed recovery trend due to “buy the dip”
in a selloff during January to March.
Stock Loan Balance turned sluggish in 4Q due to profit-taking.



FY2018（\ bn、%）

1Q

2Q

1H

YoY

FY20193Q

4Q

full year

1Q

2Q

1H

3Q

4Q

full year

4Q

YTD

Margin Loan

375

277

326

264

219

284

201

202

202

226

248

219

296

▲642

Margin Loan Rate

0.60

0.60

0.60

0.60

0.60

-

0.60

0.60

0.60

0.60

0.60

-

-

-

Stock Loan

265

257

261

260

262

261

332

350

341

383

268

333

54

723

Margin Loan（FY2018）
Margin Loan Rate（FY2018）

¥ tri
0.6

Margin Loan（FY2019）
Margin Loan Rate（FY2019）

Stock Loan（FY2018）
Stock Loan Rate (FY2018)

¥ tri
1.5%

0.6

Full Year Margin Loan

Stock Loan（FY2019）
Stock Loan Rate (FY2019)

1.5%

Full Year Stock Loan
FY19︓¥333bn
FY18︓¥261bn

FY19︓¥219bn
FY18︓¥284bn

0.4

1.0%

0.4

1.0%

0.2

0.5%

0.2

0.5%

1Q Margin Loan

FY19︓¥201bn
FY18︓¥375bn

2Q Margin Loan

3Q Margin Loan

FY19︓¥202bn
FY18︓¥277bn

FY19︓¥226bn
FY18︓¥264bn

Jul

Oct

4Q Margin Loan

FY19︓¥248bn
FY18︓¥219bn

0.0

0.0%
Apr

May

Jun

Aug

Sep

Nov

Dec

Jan

Feb

0.60%
Copyright Japan Securities Finance Co., LTD. All Rights Reserved

Mar

0.0

1Q Stock Loan
FY19︓¥332bn
FY18︓¥265bn

2Q Stock Loan
FY19︓¥350bn
FY18︓¥257bn

3Q Stock Loan
FY19︓¥383bn
FY18︓¥260bn

4Q Stock Loan
FY19︓¥268bn
FY18︓¥262bn

Apr

Jul

Oct

Jan

May

Jun

Aug

Sep

Nov

Dec

Feb

0.0%

Mar

0.40%

〜 All For Securities Market 〜

6５． Financial Highlight （Securities Finance Business）


In the Securities Lending Business and the General Loan
Business, both revenues increased due to the flexile response to
the needs of customers(¥ mil)Type of transaction

FY2016

Initiatives under the 5 th mid-term plan
（FY2017〜FY2019）

Securities Finance Business

The final yearof 4th MTP*FY2018FY2019Loans for Negotiablemargin transaction

77

80

80

△0.0％

 Expansion of clients, tapping further
into the demands of existing clients

General Loans,
Stabilizing funding
loan, Equity Repo, etc.

216

634

737

+16.1％ Diversification of type and currencyof transaction, eligible collateral

Loans to Individual
Investors or Firms

612

526

494

△6.1％

 Sales activity for expanding
business partners

General Stock Lending

941

1,517

1,015

△33.1%

 Expansion of channel of stock andbond procurement, transactions
with non-residents
 Responding to reducing thesettlement interval, approach todormant clients, diversification oftransaction scheme

Bond Lending
Total Revenues

YoY%

3,522

4,963

6,307

＋27.1%

5,371

7,724

8,635

＋11.8%* Mid-term Management Plan

We aim to utilize the financial and securities transaction expertise we havecultivated and strive to enhance and expand “Securities Finance” business,increasing opportunities for profit under 6th Mid-term plan.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

7６．Financial Highlight（Securities Investment of JSF parent）
Revenues from securities investment resulted in increase due to the impact ofrecording part of dividend income as operating revenues with reviewing on theclassification of some stocks and increase of income on investment trust, etc.



Revenues from securities investment（JSF）
FY2019YoY¥ 3,325 mil¥ 700 milDomestic Bonds¥ 1,326 mil▲¥ 272 mil

Others※¥ 1,999 mil¥ 972 milYen-based¥ 871 milIn foreign currencies¥ 4,196 mil

Total▲¥ 33 mil
¥ 666 milTransition of investment portfolio
EquityForeign Bonds

2.3%
7.6%

90%
90%
6.2%

85%

83.8%

80%
Mar.2017

Mar.2018

ref. Trend of Interest Rate and Hedge Cost (JPY v.s. USD, EUR)
Trend of Interest Rate
US

Germany

3.0%

3.0%

2.0%

2.0%

1.0%

1.0%

0.0%

0.0%

▲1.0%

2013

2014

2015

2016

2017

2018

2019

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

2020

▲1.0%
2013

Mar.2019

Mar.2020

source）Bloomberg

Trend of hedge cost

4.0%

Japan

Domestic Bonds

95%※ Investment Trust, etc.

4.0%

Others

100%

USD3M
EUR3M

2014

2015

2016

2017

2018

2019

2020

〜 All For Securities Market 〜

8７．Summary Financial Results for FY2019（JSF Trust Bank）

Highlights

 Trust charges remained stable, contributing from strengthening custodian type trust service.
 Interest on Loans decreased due lower interest rate on loans. Interest on investment securities
increased due to an increase in outstanding of investment securities.
 Gains on sales of bonds increased. Costs of unwinding IRS also increased.
 Recurring Income slightly increased compared with the last year, but Net Income decreased
due to an increase in income taxes.

JSF Trust Bank（¥ mil）

Recurring Revenue

FY2019Full Year

(%)

2,969

406

(＋15.8%)Trust charges

848

30

(+3.7%)

Gains on sales of
bonds

666

368

(+123.3%)

2,348

400

(＋20.5%)

Loss fromderivatives

632

426

(+207.6%)

Provision of ADR*

88

75(＋583.5%)

Recurring Income

620

6(＋1.1%)Net Income

496

▲41

(△7.7%)

Recurring Expenses¥【Point of Trust Charge】

YoY*ADR: Allowance for Doubtful Receivables
Copyright Japan Securities Finance Co., LTD. All Rights Reserved

Trust charges increased
contributing from strengthening
custodian type trust service(trusts for the separate
management of money andsecurities, ABL trust, etc).

(¥ mil)〜 All For Securities Market 〜

9８．Balance Sheet Summary（end of Mar-2020, consolidated）\mil

Total assets
Cash & Deposit
Short-term
investments

Mar-20Change from
Mar-199,814,494

4,523,122

1,299,935
68,292309,265 Deposit at BOJ▲ 170,351

JGB and other bonds (Maturity: 1year
or less)

Margin loan / Loans for negotiable
18,784 margin transactions / General loans /Trust bank loans

Short-term loans
receivable

687,679

Receivables underresale agreements

2,747,396

2,200,854

Collateral money of
securities borrowed

3,877,826

1,740,236

Collateral money of bond borrowing
Collateral money of stock borrowing

Investments insecurities

790,182

285,018

JGB and other bonds (Maturity: morethan 1year), Stock

Total liabilities

9,687,807

4,537,228

Call money

1,176,795

160,335

Short-termborrowings

101,473

84,926

Commercial Paper

366,000

152,000

Payables under
repurchase agreements

3,923,414

2,470,062

3,104,029

1,540,598

Collateral money
received of securities
lent
Borrowed money fromtrust accountTotal net assets

869,488

126,158

126,687▲ 14,105

Features of Assets
Comprise Margin loans (short-termloans receivable) and deposits incurrent account balance at BOJ (cashand deposits) that are changing by
the day, collateral deposited for the
procurement of securities (Collateralmoney of securities borrowed), andsecurities held for the purpose of
efficient use of funds.
Cash and cash equivalents maychange significantly depending on thestatus of standby funds in the trust
account of JSF Trust and Banking Co.,
Ltd. and the status of cash
management of the Group as a whole.

Features of Liabilities
Bank borrowing
Market operation by BOJ

Collateral money of bond lending
Collateral money of stock lending

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

In addition to market funding, suchas call money and commercial paper,
which can be adjusted daily toaccommodate assets changing by theday, collateral deposits received whenlending securities (collateral money
received of securities lent).

【ref」 Capital Adequacy Ratio*
at the end of Mar 2020︓337％* based on FIEA

〜 All For Securities Market 〜 10

９．Estimated Figures for FY2020
Precondition Balance of Margin Loans
FY2020 Precondition（¥ mil）

Operating Income

3,100▲1,029ー

Recurring Income

3,800▲1,094ーNet Income

2,700

▲856

ー

Operating
Income1,800▲1,111ー

Recurring
Income

3,400

▲32

ー

Net Income

2,700

209

ー

Recurring
Income

740

119

ー

Net Income

510

13

ー

Operating
Income

565

▲34

ー

Recurring
Income

680

▲48

ー

Net Income

445

▲13

ー

Matching¥90bn
Stock Loan
¥240bnJSF（Reference）
FY2019 Results

JSF
Trust andBankingOver-lentOver-lent
Stock Loan
Margin Loan
¥195bn¥81bn

Nihon
Building

Matching¥138bnMargin Loan Stock Loan
¥333bn¥219bn⊿ fromprev. EF

YoY.⊿

Consolidated

Over-lentOver-lent
Stock Loan
Margin Loan
¥150bn¥90bn

Margin Loan
¥180bnFY2020Estimated
Figures

Preconditions of Loans for Margin Transactions●Loan Rate ︓0.60％,●Interest on Collateral Money ︓0%,●Lending Fee ︓0.40％

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 11

10．Return to Shareholders
Basic Policy (no change)

1

Retain solid equity capital to secure the financial health and management stability thatsociety demands of the company as the infrastructure of securities market, and to ensureprofits are returned to shareholders by comprehensively considering revenues environment
or investment plans. etc. (medium-term management plan, management policy)
Based upon this policy, we will strive to place more importance on shareholder return.





2

Shareholder Return Policy(１) Dividend Payment
Our policy is that the consolidated payout ratio, as a standard that reflects our businessperformance, shall not fall below the 60% level and that we shall strive to provide stabledividends that are not temporarily affected by earnings fluctuations.


Beforethechange

Our policy is that the consolidated payout ratio, as a standard that reflects our businessperformance, shall not fall below the 60% level and that we shall return profits toshareholders while taking into account the consolidated dividend on equity ratio (DOE =ratio of the dividend amount to shareholder equity).
We will strive to pay stable dividends that are not affected by temporary fluctuations inbusiness performance.

(２) Share BuybackWith a view to offering even more rewarding returns to shareholders, we will buy backshares as appropriate while comprehensively considering the company's financial
situation, equity capital levels, and stock price levels.
BeforethechangeWith a view to offering even more rewarding returns to shareholders, we will buy backshares as needed in future while considering the companyʼs financial situation, stock
price levels, and so forth.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 12

[Supplementary explanation]

Our concept behind the change The changes is to clarify the purpose that JSF has referred to DOE
from the perspective of providing stable dividends.
 The "equity capital levels" has been added as an example of factorsthat JSF has been taking into account in order to clarify as one offactors.
 With regard to share buyback, JSF has been comprehensively
considering the companyʼs financial situation and other factors indetermining whether or not to implement such buyback, and do notchange policy significantly.
 For the reason for not setting a share buyback program for FY2021― JSF completed buyback the number of shares issued by the merger with OSF.
― While JSF is well aware that our stock price levels are well below PBR1 level,
JSF needs to think conservatively about the level of equity capital neededreflecting uncertainty about the impact of the current pandemic of COVID-19
on the financial and securities markets.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 13

12．Dividend and Share Buyback Program (historical)

FY
2014

Annual Dividend per share

FY
2015

FY
2016

FY
2017

FY
2018

FY
2019

FY
2020

Forecast/
Framework

¥22

¥15

¥16

¥18

¥26

¥22

¥22

Interim ¥8Year-end ¥10(shs)

7.46mil

3mil

0.63mil

1.5mil2.0mil1.0mil―（amount）¥4.6bn¥1.9bn¥0.3bn¥0.9bn¥1.2bn¥0.5bn―<Consolidated> : Net
Income¥3.5bn¥2.6bn¥3.0bn¥4.2bn¥3.7bn¥3.5bn¥2.7bn

: EPS

¥33.9

¥26.9

¥31.9

¥44.2

¥40.0

¥38.4

¥29.4

: DPR

44.2%

59.5%

56.4%

58.8%

55.0%

57.2%

74.7%

: DOE

1.2%

1.2%

1.2%

1.8%

1.4%

1.5%

1.6%

173.9%

133.1%

66.3%

79.3%

87.8%

71.0%

74.7%

Share Buyback(reference) Total Return Ratio

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 14

The 6th Mid-term Management Plan
(FY2020 to FY2022)

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 Achievements under the 5th Medium-Term Management Plan
(FY2017 to FY 2019)
 Strengthen Margin Loan Business as part of securities market infrastructure by applying
steadily to shortening the settlement cycle (T+2).
 Strengthen the earnings base by expanding operations other than margin loans (security
financing)

StrategyStrengthen Margin Loan
Business as part of securities
market infrastructure

Flexibly addressing the needsof domestic and foreign
financial instrument companies









Strengthening business
management structure

Developing an employee-friendly
work environment and making
the company more dynamic







Achievements

Ongoing issues

Apply to shorten the stock
settlement cycle (T+2)
Began handling loans for
margin transactions for PTS

Maintaining ourfinancial soundness,required as a key player
in the securities market
infrastructure

Expansion of tradable
currencies
Sophistication oftransaction types
Expansion of suppliers of
securities
Strengthening Cyber
Security Measures
Improving BusinessContinuity management
Enhancement of corporate
governanceFlexible working hours
Promotion of Telework

Copyright Japan Securities Finance Co., LTD. All Rights Reserved Use of our resources
including human resources Further strengthen Margin
Loan Business, a licensed
business
 Diversify revenue sources Building a quick andefficient business
management structure toenhance ourcompetitiveness〜 All For Securities Market 〜 16 The 6th Mid-term Management Plan（FY2020-FY2022）I

Corporate
Philosophy

As an institution specializing in securities finance, JSF has a mission tocontribute to the development of the securities market by proactively
meeting the diverse needs of the securities and financial sectors and toenhance the long-term interests of users, while always maintaining akeen awareness of its public role.

Management
Principles⑴ To practice sound business management by thoroughly implementing
compliance, corporate governance, and risk management under a
new governance structure and thereby establish solid credibility,
while always maintaining a keen awareness of our social
responsibilities as a securities finance company.
⑵ To enhance enterprise value while maintaining solid equity capital inorder to ensure stability in management and the financial healthrequired of a company that is a key player in securities market
infrastructure, to give comprehensive consideration to the earnings
environment, investment plans, etc., and to ensure profits are
returned to shareholders.
⑶ To further enhance JSFʼs core margin loan business while also
striving to expand the finance- and securities-related services
provided by JSF and Group companies, develop new business, and tofurther grow and solidify our base.
⑷ To build a quick and efficient business management structure andstrengthen our competitive base in order to address changes in thebusiness environment in a flexible manner.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 17 The 6th Mid-term Management Plan（FY2020〜FY2022）IIManagement
Goals

Given that the margin loan business, JSFʼs core business, is greatly affectedby market fluctuation, we will strengthen its base by steadily increasing ournumber of loanable stock issues and stabilize our role as part of the securities
market infrastructure by diversifying revenue sources and steadily increasing
our basic profit (recurring income calculated based on the assumed grossoperating profit of margin loan business)

Strategies

Enhancing the Margin Loan
Business as part of securities
market infrastructure

Developing and realizing
new business

Diversified management of
securities as an efficientuse of capital
Facilitating diverse work
styles and making JSF more
dynamic

Expanding and enhancing
the “Securities Finance”
businessStrengthening business
management structure

Strengthening ourcompetitive base throughefficient business operation＜Framework to integrate management goals and strategies with risk management＞

Use of Risk Appetite Framework
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 18

【Ref】 Key Performance Indicators under 6th Mid-term Management Plan

Management
Goals

Given that the margin loan business, JSFʼs core business, isgreatly affected by market fluctuation, we will strengthen its
base by steadily increasing our number of loanable stock
issues and stabilize our role as part of the securities market
infrastructure by diversifying revenue sources and steadily
increasing our basic profit (recurring income calculated basedon the assumed gross operating profit of margin loan business).

 We set “Number of loanable stock issues” and “Basic profit”
as KPIs under 6th Mid-term Management Plan and will
regularly publish the information to the public.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 19Appendix
 Financial Result (Historical data) Breakdown of Operating Revenues by business(Historical data) Breakdown of Operating Revenues by business(Quarterly) Analysis of YoY Change in Operating Revenue bybusiness (Quarterly) Operating profit by business (JSF parent) Outstanding Loan Balance Margin Transactions & Loans for Margin transactions

Copyright Japan Securities Finance Co., LTD. All Rights Reserved Structure of Margin Transaction & Loans for Margin
Transactions
 Revenue structure of Loans for margin transactions
 Margin Loan Rates
 Securities Holdings
 JSF Trust Bank (Loan Balance) Corporate Vision and Management Policyof JSF Trust Bank Our Group Companies Rating Information〜 All For Securities Market 〜 The Trend of Financial Result (consolidated)¥ mil
FY2014FY2015FY2016FY2017FY2018FY201920,30022,03523,06626,33324,321

29,101

15,856

16,16016,522

18,38318,603

20,8469,450

11,537

11,892

13,33012,284

16,835

Ex Premium charges

5,008

5,672

5,358

5,385

6,566

8,585

General & Administrative
Expenses

7,824

7,939

8,371

9,121

8,056

8,136

Operating Income

3,025

2,558

2,802

3,881

3,981

4,129

Gain or Loss inEquity-Method

▲144

54

92

123

248

306

Recurring Income

4,230

3,349

3,611

4,685

5,046

4,894

54

−

▲52

131

▲41

▲36

3,520

2,645

3,078

4,225

3,765

3,556

Operating
Revenues
Ex Premium charges

OperatingExpenses

Extraordinary
Profit or LossNet Income

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 21 Breakdown of Operating Revenues by business(Historical data)\ mil

Securities Finance BussinessMargin Loan Business
Interest on Loans

Mar-14Mar-15Mar-16

Mar-17Mar-18Mar-19Mar-2016,363

17,162

17,776

19,40722,487

20,96925,3699,240(47.2%)
4,012

9,667
(47.6%)
3,111

10,579(48.0%)
2,720

10,721(46.5%)
1,694

13,253(50.3%)
2,225

9,661
(39.7%)
1,799

12,517(43.0%)
1,420

436

611

575

887

1,073

708

1,178

4,132
3,371
761

5,389
4,443
945

6,840
5,874
966

7,771
6,543
1,227

9,481
7,949
1,531

6,819
5,717
1,101

9,662
8,255
1,407

1,959
(0.0%)
2,217(11.3%)
425
1,791
2,946
(15.1%)
2,838

2,107
(0.0%)
2,294(11.3%)
784
1,509
3,094
(15.2%)
2,979

1,753
(7.9%)
2,241(10.2%)
907
1,334
3,201
(14.5%)
3,111907(3.9%)
4,453(19.3%)
941
3,512
3,325
(14.4%)
3,305

917(3.5%)
5,035(19.1%)
1,458
3,576
3,281
(12.5%)
3,263

1,242
(5.1%)
6,480(26.7%)
1,517
4,962
3,586
(14.8%)
3,530

1,312
(4.5%)
7,308(25.1%)
1,015
6,293
4,230
(14.5%)
4,196(11.9%)
317
485
1,494

(11.2%)
186
545
1,507

(15.7%)
144
627
2,645

(12.1%)
147
668
1,899

(11.3%)
89
741
2,087

(10.1%)
58
746
1,590

(9.8%)
50
784
1,997

(4.5%)(4.3%)(3.7%)(3.8%)(3.3%)(3.6%)(3.1%)

19,566
16,19520,30015,85622,035
16,16023,066
16,522

26,333
18,38324,321
18,603

29,101
20,846

Interest on collateral money of securities borrowed
Fees on Lending Securities
Premium Charges
Lending Fees
Business other than Margin Loan Business
Loan to Securities companies & Investors
Securities Lending Business
Stock Lending
Bond Lending
OthersBond Investment (Parent only)

Trust Business
Interest on Loans
Trust Charges
Bond Investment

Real Estate Management Business
Operating Revenues(excluded Premium Charges)

2,322

880

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

2,269

868

3,451

807

2,792

865

2,971

873

2,467

884

2,832

899

〜 All For Securities Market 〜 22 Breakdown of Operating Revenues by business(Quarterly・Full Year)
Margin Loan Business resulted in large increase due to higher level ofStock Loan Balance, though Margin Loan Balance remained sluggish.
【Operating Revenues Transition】
Quarterly(mil）Full Year

Margin Loan
Business

¥ mil
9,662
(8,255)

6,819

Fees onLending
Securities(5,717)(1,101)

1,783(1,506)

1,859(1,587)

2,066

2,823
(2,453)(1,719)

(277)

(272)

(347)

(370)

178

198

285

314

424

344

3Q
FY2018

4Q

323

1Q

329

(1,407)

2,785
1,987
(2,378)
(406)

368
370

2Q
FY2019

3Q

1,799

1,420

(1,703)
(284)

398

708

1,178

208

4Q

Full Year Full Year
FY2018

Copyright Japan Securities Finance Co., LTD. All Rights Reserved（ex premium
charges）

FY20194Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

2,674

12,517(＋6.6%)

970(＋5.3%)

1,987(＋6.9%)

1,703

Premium
Charges(＋7.3%)

LendingFees(＋4.3%)

284

Interest
on
Loans

398

(＋15.8%)Interest on
collateralmoney ofsecurities
borrowed

208(＋5.0%)

Full Year
Point(＋29.6%)

 Operating revenues
this business,
4,262 ofexcept Premium(＋8.1%)
Charges, resulted inincrease.

9,662  Fees on Lending(＋41.7%)8,225(＋44.4%)

1,407(＋27.8%)1,420

Securities resulted
in large increase,because Stock Loanbalance remained at
higher level of thesame period of theprevious year andpremium charges on
over-lent issues
increased.

(△21.1%)

 Interest on Loansdecreased, because
average balance ofMargin Loan
1,178
remained sluggish..
(＋66.3%)〜 All For Securities Market 〜 23 Breakdown of Operating Revenues by business(Quarterly・Full Year)
General Loans Business resulted in increase mainly due to an increase inuse of Equity Repo.
【Operating Revenues Transition】
Quarterly

Full Year(¥ mil）

¥ mil

526

494
(80)

(80)

132

124

123

(16)

(22)

(18)

125

177

148

163

164

3Q

4Q

1Q

2Q

(17)

FY2018

123
(21)

205

FY2019

3Q

123
(20)

715

817

Loan toIndividual
Investors
or
Firms
Loan toSecurities
Companies

4Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

123

(△1.4%)

284(＋91.5%)494(△6.1%)

817(＋14.3%)284
4Q

Full Year Full Year
FY2018Loans for
Negotiable
MarginTransaction

20(＋20.8%)80(△0.0%)

Full YearPoint
An increase inuse of Equity
Repo lead toincreased
revenue,thoughoutstandingbalance ofLoan toSecurities
Companies
and Individual
Investors of
Firms
decreased.

FY2019＜ Loan Lineup ＞
 Loan to Securities Companies ・・・ General Loans, Bond Financing, Loans for Negotiable margin Transaction,
Stabilizing fund loan, Equity Repo(Cash-secured Stock Lending Transaction)
 Loan to Individual Investors or Firms ・・・ Com-STOCK Loan
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 24 Breakdown of Operating Revenues by business(Quarterly・Full Year)
Securities Lending Business resulted in increase driven by growth ingensaki transactions outstanding in Bond Lending【Operating Revenues Transition】
Quarterly

Full Year(¥ mil）

¥ mil
1,015

GeneralStock
Lending

1,517

350

279

280

259

214

240

1,350

1,237

1,407

1,311

1,580

1,994

3Q

4Q

1Q

2Q

3Q

4Q

FY2018FY20194,962

4Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

280

(＋8.0%)

6,293

Bond
Lending

1,994(+61.2%)

Full Year
Point

Revenue decreased.
Because borrowing
1,015 demands for(△33.1%)establishing equity
positions decreased.
Revenue increased
6,293 driven by growth in(+26.8%) gensaki transaction
outstanding.

Full Year Full Year
FY2018FY2019※ Genera Stock Lending is ・・・
Lending stock to securities companies depending on their various demands (ex. Fail-cover, arbitrage), except
on demand to settle Margin Transaction
 Main business partner ‒ 【Lenders】 Institutional investors, etc 【Borrowers】 Securities Companies



Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 25 Breakdown of Operating Revenues by business(Quarterly・Full Year)
JSF Trust Bank︓Trust charges remained steady.
【Trust charges Transition】
Quarterly

Full Year(¥ mil）

¥ mil

746

182

192

192

3Q

4Q

1Q

FY2018

190

194

206

2Q

3Q

4Q

FY2019Full Year
Revenue

(YoY)

(YoY)

784

Trust
Charges
Full Year Full Year
FY2018

4Q
Revenue

FY2019206(＋7.0%)

Full Year
Point

Trust charges
continued
increasing,
contributing fromstrengthening
custodian type
784 trust service(+5.1%) (trusts for the
separate
management ofmoney andsecurities, ABL
trust, etc).

【Trust Lineup】
Trusts for the separate managementof money and securities

Trust for protecting deposits which securities companies received from
customers

Trusts for currency future trading

Trust for protecting guarantee deposits which FX business operators
received from customers

Asset Backed Loan (ABL) Trust

For setting up ABL, which is investment product for institutional
investors, JSFTB provides functions as SPC.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 26 Analysis of YoY Change in Operating Revenue by Business(Quarterly, Full Year)【Quarterly】 YoY ＋ 2,678mil¥（＋65.1%）【Full Year】 YoY
¥ mil

¥ mil

+2,856＋70＋ 4,780mil¥（ ＋19.7%）
+828

+644

+365

+14

29,101
24,321+1,602
+164

+133

+777

＋６
△6

6,794

4,115

FY20184Q

MarginLoan

GeneralLoans

Sec
Lending

OthersSecurities Finance Business

ー

ー

Trust
Bank

Real
EstateFY20194Q

FY2018Full Year

MarginLoan

GeneralLoans

Sec
Lending

OthersSecurities Finance Business

ー

ー

Trust
Bank

Real
EstateFY2019Full Year〜 Summary of the point for quarterly 〜〜 Summary of the points for Full Year 〜 Margin Loan Business ︓ Both Margin Loan Balanceand Stock Loan Balance increased.

 Margin Loan Business : The revenue increased due
to increases in Stock Loan Balance.

 General Loan Business︓Resulted in increase driven
by an increase in use of Equity Repo.

 Securities Lending Business : Resulted in increase
driven by solid performance in Bond Lending.

 Securities Lending Business ︓ Both General Stock
Lending Bond Lending resulted in increase.

 Others ︓ (Dividend) Income frominvestment trust ,etc. increased.

 Others ︓ (Dividend) Income frominvestment trust ,etc. increased.

 Trust Bank : Trust Charge remained steady andgains on sales of bonds increased.

equities

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

and

equitiesand〜 All For Securities Market 〜 27 Operating profit by business (JSF parent)¥ mil

FY2019Operating Revenues（excluding premium charge） A
Margin Loan Business

Securities
Finance17,1284,262

Loans for Negotiable Margin Transactions

80

Loan to Securities Companies

737

Loan to Individual Investors or Firms

494

General Stock Lending

1,015

Bond Lending

6,307

Others（mainly securities investment）

4,230

Operating Expense (excluding premium charge) B

7,476

Operating Profit （ A ‒ B ）9,657

Margin Loan Business

3,959

Loans for Negotiable Margin Transactions

62

Loan to Securities Companies

611

Loan to Individual Investors or Firms

354

General Stock Lending

562

Bond Lending

911

Others（mainly securities investment）

3,196

Securities
Finance

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 28 Outstanding Loan Balance(Year average and 4Q end balance)\ mil

Margin Loansavg.
term-end

avg.
Loans of funds other thanterm-end
Margin Loans

Trust Bank Loansavg.
term-end
avg.

Othersterm-end

Total

Stock Loansavg.
term-end
avg.
term-end

FY2014FY2015FY2016428,329541,052
223,484
254,71758,677
54,831
32,50032,500742,991
883,101

401,400
324,113
162,347
95,04654,561
136,089
28,71812,500647,027
567,748

222,031316,544

227,422258,656

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

FY2017FY2018FY2019265,458
350,175
368,508
519,590
44,84046,33140,87258,142
149,956
273,561
176,371425,197
7,008
152
2,000
−
467,262
670,220587,752 1,002,931

284,225
249,304
81,13354,687431,292
364,903−−796,651
668,894

219,979
189,194
72,69950,584473,808
447,899−−
766,486
687,679

291,392
393,698

261,603
433,072

333,949
397,395

366,147
369,852〜 All For Securities Market 〜 29 Margin Transactions & Loans for Margin Transactions
3.0

¥ tri

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Margin Buying Balance
Margin Loan Balance
Ratio

2.5
2.0
1.5
1.0
0.5
0.0
08

09

10

11

12

13

14

15

16

17

18

19

1.0 ￥tri

100%
Margin Selling Balance
Stock Loan Balance
Ratio

0.9
0.8

90%
80%

0.7

70%

0.6

60%

0.5

50%

0.4

40%

0.3

30%

0.2

20%

0.1

10%
0%

0.0
08

09

10

11

12

13

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

14

15

16

17

18

19

〜 All For Securities Market 〜 30

 Structure of Margin Transaction& Loans for Margin Transaction
MarginTransaction

Loans for Margin
Transaction
Margin Loan application
Stock Loan application

Margin buying order
Margin selling order

Institutional
Investors

Fund for Purchasing
Stock to sell

Fund (Margin loan)
Stock (Stock loan)

JSF

Securities
Companies

BrokerInvestor

Stock

Funds

Call Market

Purchased Stock
Sale ProceedBank of Japan

Stock Exchange
Clearing facilities
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 31 Revenue structure of Loans for margin transactions

Over-lent

Income statement

Margin Loans

Over-lent(E)=(A)-(D)Stock Loans ※(C)matching(D)=(B)-(C)matching(D)=(B)-(C)Margin Loans(A)

Stock Loans(B)【Operating revenues】
Interest on loans＝(A)×0.60%
Fee on lending securities (lending fees)＝(B)×0.40％
Interest on collateral money of
securities borrowed＝(C)×0.60％【Operating expenses】
Interest on borrowing＝(E)×fundingrateBesides the above, Premium Charges are posted in Operating Revenues (Fees on Lending
Securities) in a part of Over-lent Stock Loan. But the same amount are posted in Operating
Expenses (Fees of Borrowing Charges), so the amount of Premium Charges does not affect our
profit.
【revenue】 Fees on lending securities (premium charges) = 【expense】 Fees on borrowing
securities (premium charges) = (C)ʻ×rate of Premium charges
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 32 Margin Loan Rate

Loan Rate
0.60%

Stock Loan

JSF

Securities
Company

Margin Loan

Lending
Fee
0.40%

BOJ Policy Interest RateJul 2006 Uncollateralized O/N Call Rate:0.25％



Feb 2007 Uncollateralized O/N Call Rate:0.50％



Oct 2008 Uncollateralized O/N Call Rate:0.30％（▲0.20%）

Dec 2008 Uncollateralized O/N Call Rate:0.10％（▲0.20%）



Oct 2010 Uncollateralized O/N Call Rate:0〜0.10％（▲0.10~0%）
Apr 2013 Switched from interest rate to monetary baseJan 2016 Embraced negative interest rates
Sep 2016 Introduced QQE with Yield Curve Control

Interest on Collateral Money
0%

1.2%

Loan Rate
Lending Fee
Interest Rate on Collateral Money of Stock Loan
BOJ Policy Rate

Margin Loan Rate



1.0%




0.8%



0.6%




0.4%
Apr.2013〜
Monetary base start

0.2%

0.0%

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

27/Jul/2006 0.74％（+0.14％）
22/Sep/2006 0.86％（+0.12％）
15/Mar/2007 1.02％（+0.16％）
05/Apr/2007 1.11％（+0.09％）
29/Jan/2009 0.97％（▲0.14％）
22/Nov/2010 0.77％（▲0.20％）
06/Aug/2014 0.64％（▲0.13％）
09/Mar/2016 0.60％（▲0.04％）

 Margin Loan Rates are decided by reflecting thechange of market rates and BOJʼs Policy Interest
Rate.

〜 All For Securities Market 〜 33 Loan Rate of Loans for Margin Transactions
2.00%

Loan Rate
Lending Fee

1.60%

1.20%

0.6%
0.80%

0.40%

0.4%
0.00%

97

98

99

00

01

02

03

04

05

06

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

07

08

09

10

11

12

13

14

15

16

17

18

19

20

〜 All For Securities Market 〜 34 Securities Holdings\ mil
Mar-19Securities Holdings

Unrealized profits andloses

B/S Amountnotes

Mar-20
Unrealized profits andloses

B/S Amount

Equity13,323

8,118

12,176

7,198

Bond

694,835

32,715809,00224,209623,00933,538518,829

26,712

Corporate Bond

41,424

31

253,617▲567 Government Guaranteed Bond ,etc.

Others30,402▲854

36,555▲1,935 Foreign government bonds

JGB&Municipal Bond

Other Securities
Total

10,926

1,137

13,943▲1,678719,085

41,970835,12129,730ー(25,714)ー(6,075)（included the eﬀects ofderivatives）

held-to-maturity bonds

Unrealized profits andloses

B/S Amount

JGB

1,513

Unrealized profits andloses

B/S Amount

244

1,512

notes

208

※Unrealized proﬁts and losses is not inclueded the eﬀects of hedging with derivatives

Yen Bond Portfolio （JSF Trust Bank）

Yen Bond Portfolio（JSF）
12,00010,000
8,000
6,000
4,000
2,000
010 years 9,424（億円） over
2.69
14/3（¥ 100 mil）
7,000
6,000

5,678

5,296

5 years
to9,798
10 years
2.32
14/9

5,286

5,000

9,210
2.819,498
1 year to 5 years
2.69
2.41
14/12
15/3
（year） （¥ 100 mil）
6.0
7,000

4.69

4,930
4,274

4.0
3,660

4,000

3.0

3,000
2,000

5.0

2.50

2.0

2.57
2.10

1.99

2.10

1,000

1.0

0

0.0

Sep.17

Mar.18

Sep.18Mar.19Sep.19Mar.20

6.0
5.0
4.0

3.0
2.0
1.0
0.0
3.948,378（年）
Averageremaining
period
3.54
15/12

3.67
within3.23
1 year8,158
15/9（year）
6.0

6,000

4.26

5,000
4,000

4.0

3,764

3,000

3,186
2,279

0

1,310
1,255

2,000
1,000
0.94

Sep.17

5.0

1.24

1.18

Mar.18

Sep.18

3,584

1.92

3.0
2.0

1.06

1.0
0.0

Mar.19Sep.19Mar.20(Note) Average remaining period is calculated excluding Floating JGB, held-to-maturity bonds, bonds for which hedge-accounting is applied
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 35 JSF Trust Bank （Loan Balance）● Loan Banance by Industry\mil

Mar-19Loan
Balance
ManufacturingSep-19ratio

Loan
BalanceMar-20ratio

Loan
Balance

ratio

2,000

0.5%

2,000

0.4%

0

0.0%

Fishery

0

0.0%

0

0.0%

0

0.0%

Mining

0

0.0%

0

0.0%

0

0.0%

Construction

0

0.0%

0

0.0%

0

0.0%

Energy & Utilities

0

0.0%

0

0.0%

0

0.0%

Communication

0

0.0%

0

0.0%

0

0.0%

Transportation

1,069

0.3%

689

0.1%

689

0.2%

800

0.2%

800

0.2%

800

0.2%

0

0.0%

0

0.0%

0

0.0%

200

0.1%

0

0.0%

4,100

0.9%

Real Estate

0

0.0%

3,000

0.6%

1,500

0.3%

Service Industries

0

0.0%

0

0.0%

0

0.0%

360,83498.9%

495,17898.7%

440,81098.4%

Wholesale
RetailFinance & Insurance

Governments
Total

364,903

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

501,667

447,899〜 All For Securities Market 〜 36 Corporate Vision and Management Policy of JSF Trust Bank

【Corporate Vision】
In addition to playing a part in the JSF Group and providing important
infrastructure functions in the financial capital markets, we aim to become ahighly specialized trust bank that grows together with its customers throughsupporting investment and economic activities of various entities byenhancing our unique services centered on the field of managed trusts.
[Management Policy]
 Establish No. 1 position in management-type trusts, such as security trusts and assetbacked loan trusts, and expand the scope of trust business by utilizing the knowledge
cultivated in this field Banking will be restructured by lending to financial instruments business operators andother financial sectors, while appropriately responding to trends in prudential
regulations.
 Securities investment is positioned as an earnings supplement business necessary forthe smooth promotion of the above business, and it will be stably operated underappropriate risk management.
 We will enhance our internal control and governance systems, steadily carry out a seriesof operations under them, realize the smooth development of core systems, andincrease our corporate value.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 37 Our Group Companies
Subsidiary
Affiliate（ ) Shareholding Ratio

Japan Securities Finance（100%）
JSF
Trust Bank

（100%）Nihon
Building（20.0%）
Japan Information
Processing

Capital（20.8%）
JSFIT

Shareholding
Ratio

Name

100%

JSF Trust and Banking Co., Ltd.

14,000100%

Nihon Building Co., Ltd.

100

Real estate ownership and leasing
Real estate trading and brokerage

20.0%

Japan Information Processing Service Co., Ltd

2,460

Information processing services
Software development and sales

20.8%

JSF Information Technology Co., Ltd

100

Information processing services
Software development and sales

Copyright Japan Securities Finance Co., LTD. All Rights Reserved(mill yen)

Business overview
Trust service, Banking service〜 All For Securities Market 〜 38 Rating Information

JCR

R&I

As of 31/Mar/2020
Japan
Securities
Finance

JSF TrustBank

Standard &Poor’sRatingOutlookRatingOutlookRatingOutlookLong-term

AA-

StableAA-

StableA

StableShort-term

J-1+

a-1+

（Highest）（Highest）

CP Issue

¥1tri

¥1tri

Long-termA+

Short-term

J-1+

Stable

A+
a-1

A-1
―
Stable――――（Highest）

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 39NoticeThis document includes statements for business forecast. Thesestatements donʼt guarantee companyʼs future achievement and thatinvolve risk or uncertain factors. Companyʼs future achievement may
be changed drastically up to stock market or financial conditions.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜