Japan Securities Finance Co., Ltd. Third quarter, FY2022 Financial Results Presentation
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Japan Securities Finance

Key Points
● Gross Profit
▷ Based on firm earnings from securities financing, gross profit increased by ¥1,559 million YoY to ¥9,479 million (+19.7%). -Securities financing revenues increased on higher balances for bond lending and equity repo. -Income from Others (mainly securities investment) increased slightly due to the repositioning of held securities to enable future portfolio management.
● General & Administrative Expenses
▷ System depreciation expenses decreased but expenses increased slightly YoY due to the removal of special factors from the previous fiscal year (recorded reversal following revision of the method to calculate the allowance for doubtful accounts)  . 5
Margin loan balances low, down YoY. Stok loan balance remained steady at a level higher than the same period of the previous fiscal year
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口口Bond lending and equity repo benefitted from capturing diverse needs to continue upward trend Also secured income for Others that was largely unchanged YoY
* General Loans, stabilizing funding loan, equity repo, etc. Copyright Japan Securities Finance Co., LTD. All Rights Reserved 7
口Repositioned for future portfolio management in response to rising interest rates overseas and other changes in operating environment. This resulted in recording gains on sales of domestic bonds and losses on sales of foreign currency bonds. Gains on management of market assets (JSF)
Ref. Trend of Interest Rate Source) Bloomberg Changes in Investment Portfolio ■Others   ■Foreign Bonds   ■Equity   ■Domestic Bonds Copyright Japan Securities Finance Co., LTD. All Rights Reserved
● Custodian type trust services, particularly asset-backed loan trusts, drove increased revenues from trust fees. Highlights ● Recurring revenues increased on growth in trust fees and having recorded gains on sale of securities.
JSF Trust Bank 【Trust Fees】
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Precondition
FY2022 Estimate
Matching ¥90bn Margin Loan Stock Loan ¥250bn ¥170bn (Reference) FY2021 Results Over-lent Over-lent Stock Loan ¥74bn Matching ¥101bn Stock Loan Margin Loan ¥283bn ¥175bn
●Loan Rate: 0.60%,●Interest on Collateral Money: 0%,●Lending Fee: 0.40% <Approach to Estimated Figures for FY2022> ✓ In light of strong securities financing performance for Japan Securities Financing, we conducted an upward revision to previously announced figures. 10
Policy for shareholder returns
● To further enhance shareholder returns, we aim at cumulative total payout ratio of 100% through dividends and the flexible implementation of share buy-backs in the period from FY2021 through FY2025 (achieving the goal of ROE 5%). -With regard to dividends, our aim is to aggressively pay annual dividends in the period from FY2022 through FY2025 at a level that does not fall below the amount of JPY 30 per share.
Shareholder returns in FY2022
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Appendix

Data)
Note for FY2022 (Forecast) ● The number of shares and the amount of the “Share Buyback“ are both subject to a repurchase limit ●  The “Annual Dividend per share” is a forecast ● "Net income (consolidated)" refers to the estimated figure announced on May 10, 2022. Moreover, EPS and DPR have been calculated using this estimated figure. Copyright Japan Securities Finance Co., LTD. All Rights Reserved
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¥ mil

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Note) Figures for each Group company are on a non-consolidated basis (before elimination of consolidation), and the sum of these figures does not correspond to the figures for “Operating Revenues (A)” and “Gross Profit (A-B)” . Copyright Japan Securities Finance Co., LTD. All Rights Reserved Breakdown of Operating Revenues by Business
ロ Margin loan balances decreased YoY, resulting in decreased revenues when excluding premium charges for over-lent stock loans Changes in Operating Revenues Quarterly
Revenues from lending fees decreased due to YoY decline in stock loan balances. Revenues from interest on loans decreased due to YoY decline in margin loan balances. 16
ロ Loans to securities companies resulted in an increase. Outstanding balance of equity repo transactions contributed to the result. Changes in Operating Revenues Quarterly
companies resulted in an increase. Outstanding balance of equity repo transactions contributed to the ✓ Loan to retail increased. Loans to securities companies:  General loans, bon financing, loans for negotiable margin transactions, stabilizing fund loans, equity repo (cash-secured stock lending transactions) Loan to retail:  Com-STOCK loans Copyright Japan Securities Finance Co., LTD. All Rights Reserved 17 o
口Bond lending revenues increased on growth in gensaki transaction and repo transaction balances ■ General stock lending largely unchanged YoY thanks to recovery of borrowing Changes in Operating Revenues Quarterly *Genera stock lending is … Lending stock  to securities companies depending on their various demands (ex. fail-cover and arbitrage),んexcept on demand to settle margin transactions. 18
口Balances for crypto asset related trusts declined due to downturn on crypto asset market but secured increase in trust fees on continued favorable performance of asset-backed loan trusts. Changes in Trust Fees Quarterly ¥ mil 1,011 (+7.3%) *Consolidated base 1-3Q Point
Trust Lineup
Trusts for the separate management of money and securities Trusts for currency future trading Crypto-asset related trust Trust for segregated deposits which securities companies receive from customers Trust for segregated guarantee deposits which FX business operators receive from customers Trust for segregated guarantee deposits which crypt-asset exchangers receive from customers Asset Backed Loan (ABL) Trust For setting up ABL, which is an investment product for institutional investors, JSFTB provides functions as SPC. Copyright Japan Securities Finance Co., LTD. All Rights Reserved 19

【1-3Q】YoY ￥ 9,275 mil(+41.5%)
Summary of the Significant Points for quarterly
Margin Loan Business ● Margin loan revenues increased but revenues decreased when excluding premium charges for over-lent stock loans due to a decline in financing and stock loan balances Securities Financing  Business ● Revenues from capital loans to securities companies increased on high balances for equity repo. ● Revenues from loans to retail increased on higher balances for COM-STOCK loans. ● General stock lending largely unchanged YoY thanks to recovery of borrowing demand for fail-cover. ● Bond Lending revenues increased on high balances for gensaki transactions and repo transactions. Others ● Revenues increased YoY on recording gain on sales of held securities (also recorded loss on sales). Trust Business ● Revenues increased on growth in trust fees. 20
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海JSF Stock Exchange Clearing Facilities
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Margin Loans (A) Stock Loans (B) Income Statement 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)×funding rate ◆Besides the above, premium charges are posted in operating revenues (fees on lending securities) in part of over-lent stock loans. However, the same amount is 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) = Expenses: Fees on borrowing securities (premium charges) = (C)ʻ×rate of premium charges Copyright Japan Securities Finance Co., LTD. All Rights Reserved 24

Features of Assets
The major components of assets are margin loans (short-term loans receivable), deposits in current account balance at the BOJ (cash and deposits), both of which are subject to daily fluctuations, collateral deposited for the procurement of securities (collateral money of securities borrowed/receivables under resale agreements), and securities held for investment. Cash and cash equivalents may change significantly depending on the amount of standby funds in the trust account of JSF Trust and Banking Co., Ltd. and the surplus of cash position of the Group as a whole.
Features of Liabilities
In addition to market funding, such as call money and commercial paper, which can be adjusted daily in order to address daily changes in assets, major liabilities are collateral deposits received against lending securities (collateral money received of securities lent/payables under repurchase agreements). Ref) Capital adequacy ratio* at the end of Dec 2022: 360% *Based on FIEA ～ All For Securities Mark 25
Interest on Collateral Money: 0% ✦ Loan Rate
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 an interest rate to monetary base n   Jan 2016  Embraced negative interest rates ▪ Sep 2016  Introduced QQE with yield curve control
Margin Loan Rate
◾ 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%) ◆ The margin loan rate is decided by reflecting the changes in market rates and the BOJ’s Policy Interest Rate. Copyright Japan Securities Finance Co., LTD. All Rights Reserved 26
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Yen Bond Portfolio(JSF)
Yen Bond Portfolio (JSF Trust Bank)
=Over 10 years    ==5 years to 10 years    ==1 year to 5 years — Within 1 year    — — Average remaining period (Note) The average remaining period is calculated excluding held-to-maturity bonds and bonds for which hedge-accounting is applied Copyright Japan Securities Finance Co., LTD. All Rights Reserved

● Loan Balnance by Industry

@ JSF

～ All For Securities Market ～

The development of infrastructure that forms the foundation of socio-economic activities is a key element to realize a sustainable society. It is also one of the Sustainable Development Goals (SDGs:  Goal 9). Our Group provides a variety of services, including the Margin Loan Business, as a part of the infrastructure of the securities market and strives to improve the liquidity of securities and financial markets and to improve convenience for market participants. Through these activities, we aim to play a role that includes supporting market participants who are engaged in similar initiatives to realize a sustainable society. Our Group believes that it is important to build a system that ensures stable operations even under various circumstances as it assumes responsibility for the infrastructure of securities and financial markets. To this end, it is important not only to respond to disasters in a narrow sense, but also to ensure the stability and high reliability of our business base. In addition, we believe that there are issues to which we can contribute by utilizing the know-how and other resources that our Group has cultivated over the years. Based on this perspective, we are currently aware of the following material issues (materialities). Our Group recognizes the roles expected of our Group in addressing these material issues (materialities) and will advance various initiatives while flexibly responding to future changes in the social environment.

Important issues we recognize

Specific Initiatives on Key Issues

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Corporate Philosophy
As an institution specializing in securities finance, JSF has a mission to contribute to the development of the securities market by proactively meeting the diverse needs of the securities and financial sectors and to enhance the long-term interests of users, while always maintaining a keen awareness of its public role.
Our History to Date
◾ Focus on stable management of the margin loan business and improving convenience as infrastructure for securities markets ■ We will also engage in new operations that meet market needs.
⇒ Roots as a licensed company stipulated in the Financial Instruments and Exchange Law response to requests trom the securities industry with the aim of stabilizing and promoting the securities market Copyright Japan Securities Finance Co., LTD. All Rights Reserved
Lender Money Market, etc. Investors and Securities Companies, etc. Copyright Japan Securities Finance Co., LTD. All Rights Reserved
es  Market  〜
This document includes statements relating to business forecasts. These statements do not guarantee future business performance; they contain risks and uncertainties. Future business performance may vary significantly depending on the stock market and financial conditions or other factors.
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