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ROE:5.73%

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FY2023

FY2022（\ bn）

1Q

2Q

1H

3Q

4Q

Full
Year

1Q

2Q

1H

YoY
3Q

4Q

Full
Year

4Q

YTD

Margin Loan

248

256

252

253

260

254

279268

274

259

340

286

7932

Stock Loan

156

215

185

183

200

188

301

243

272

221

244

252

4463
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— Management Practice with Awareness of Our Cost of Capital and Stock Price—Analysis of the Current Situation
 Outcome of Efforts•As a result of efforts directed towards the achievement of these goals, we achieved an ROE of 5.73% in
FY2023, two years ahead of our target.

•In addition, the market’s evaluation of JSF’s corporate value has steadily improved, with the price to bookratio (PBR) recently hovering around 1.0. Our total shareholder return (TSR) has also consistentlyoutperformed the TOPIX index by a significant margin.
FY2019FY2020

FY2021

FY2022

FY2023

ROE (%)

2.66

3.03

3.79

4.36

5.73

PBR*1 (times)

0.35

0.54

0.59

0.64

0.97

TSR (%)

88.1

144.8

171.0

192.9

313.6

[Reference]
TOPIX*2 (%)

90.4

128.6

131.1

138.8

196.1

*1 Ratio at the end of the fiscal year,*2 Dividend included

Cost of Capital Approach•JSF determines its cost of equity by referencing multiple methods that employ objective, long-term
chronological data and our fundamental understanding is that our cost of equity remains in the mid-4%
range, even when taking into account the current market environment.

•JSF is licensed as a securities finance company, and as such it is legally required to maintain financial
soundness, and is restricted in its scope of its operations. As a result, our financial and business strategy risks
are relatively low.

•We believe that our low level of risk is reflected in our risk premium and therefore our cost of equity is atits natural level.

Long-Term Management Vision Our Vision of the Future
As Japan’s only securities finance company supporting the infrastructure functions of thesecurities and financial markets, JSF will continue to aim to be a distinct and uniquecompany, with a high degree of agility and flexibility, that achieves sustainable growth andenhances its corporate value, while maintaining strong financial soundness, through its
contributions to the development of securities and financial markets.

 Corporate Message

Be unique. Be a pioneer.
 The Direction of Our Long-Term Management
JSF will continue to address the trading needs of participants in the securities and financial
markets in an agile and flexible manner. Through its contributions to market development,
JSF will seek to concentrate the collective efforts of its Group companies to sustain growthand enhance its corporate value, while maintaining strong financial soundness.
• ROE: Continue to work toward the steady improvement of ROE, keeping the 8% level in mind.
• Shareholder returns: JSF will maintain a total payout ratio of 100% throughout the duration of its
Seventh Medium-Term Management Plan, and strive to enhance shareholder returns thereafter as well.
• PBR: Aim to establish a market valuation with a PBR exceeding 1.0.
• Governance: Strive to strengthen its corporate governance by tackling sustainability issues while
focusing on the further improvement of the effectiveness of deliberations by its Board of Directors andits respective committees, the further enhancement of information disclosure, and the development ofa robust human capital base.

Management Goal and Shareholder Returns
 Management Goal
In light of the Long-Term Management Vision, as well as performance in FY2023, JSF has
upwardly revised the management goals for the Seventh Medium-Term Management Plan,as follows.

ROEConsolidatedordinary profit

Maintain at a stable level above 5% and aim forfurther improvement.
Maintain at a stable level of over 10 billion yen andaim for further improvement.

 Shareholder Returns
Continue to aim for a total payout ratio of 100% on a cumulative basis for the three-year
period from FY2023 through FY2025, through dividends and flexible implementation ofshare buy-backs.
With regard to dividends, our policy for FY2024 through FY2025 is to actively pay
dividends, aiming for a target payout ratio of 70%.

Upcoming Initiatives
Continue to focus on strengthening our revenue base and also work to strengthen theinternal management systems that support these operations, in order to achieve ourmanagement goals.
Remain enhancing information disclosure in an effort to provide shareholders and various
other stakeholders with a deeper understanding of JSF.

2．Major Initiatives in Securities Financing
 Responding to JGB demandContinue to focus on transactions to provide JGBs as a Japanese financial institution, as
the growing needs for JGBs by foreign financial institutions, etc. in recent years against thebackdrop of settlement risk management and stricter international financial regulations.

 Responding to the needs for repo transactions, etc. in the active Japanesestock market
Focus on stock repo transactions, etc. for increased needs on funding repo and stocks due tothe robust Japanese stock market.

 Responding to changes in the interest rate environment and the resulting
increase in demand for funds
Responding to rising interest rate, revise the way of announcing the loan for margintransaction rate and expand the source of funding (financing by stock-repo transaction,etc.).

 Strengthening the securities procurement capability
Implementation of securities procurement for lending to institutional investors and regional
financial institutions.

 Networking with foreign counterparties
Actively participate in international conferences to deepen relationships with foreign
financial institutions and develop new transactions.

 Strengthening risk management
In repo and gensaki transactions, as the assets and liabilities are accounted in both
directions on the company‘s balance sheet, the exposures are limited even if the balance
substantially increases. Moreover, focus on risk management including offsetting positions
by reverse transactions.

２．Status of Dialogue between JSF and Its Shareholders
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4．Shareholder Returns in FY2024
Shareholder Return Policy
Continue to aim for a total payout ratio of 100% on a cumulative basis from FY2023
through FY2025, through dividends and flexible implementation of share buy-backs.

Dividends per share and Share Buy-Back amount

Our policy for FY2024
through FY2025 is toactively pay dividends,
aiming for a target
payout ratio of 70%.
⇒Shareholder returns
with more focus ondividends※The estimated performance for FY2024 was released on May 7, 2024.
In the above chart, dividends per share in FY2024 are forecasts and share buy-backamount is maximum amount of repurchase.

Dividend forecast:¥70（full-year, including
special dividend ¥6）

Share buy-back:JPY 2.6 bn.

Total payout ratio
99.7％*based on estimated performance

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＋＋1,530(＋13.6%)

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￥:milTransaction TypeFY2021

FY2022FY2023

Loans for margin transactions

283,118

254,701

286,935

Securities loned for margintransactions

175,578

188,918

252,410

9,969,762

11,473,992

12,976,822

Loans for negotiablemargin transaction

21,50918,856

34,718Equity repo transactions

585,974

697,788775,320Loans to retail

14,993

16,75920,420General stock lending

47,50963,342

121,057

9,299,775

10,677,245

12,025,305

682,499

539,931591,370

Securities financing

Bond repo and gensaki
transactions
Trust Bank Loans

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