ANNUAL REPORT - shinkin.co.jp€¦ · Thank you for choosing THE SEIBU SHINKIN BANK. ... and managing in step with the local community. We look forward to your continued support and

　

Year ended March 31, 2019

2019ANNUAL REPORT

THE SEIBU SHINKIN BANK

Message

Thank you for choosing THE SEIBU SHINKIN BANK.

The fiscal year ended March 31, 2019 was the final year of our medium-term management plan,

during which we devoted ourselves to customer support activities (business support, wealth-

building/management support and community-development support) under the theme of

“Aiming to be a true cooperative financial institution: Becoming more protective of our main

customers.”

As a result, we have increased our main customers, together with deposits and loans and

achieved a net profit of ¥7.6 billion, capital adequacy ratio of 9.66%, and non-performing loan

ratio of 1.27%. Also, we have enhanced the financial soundness of the Bank by increasing the

reserve for possible loan losses of ¥13.3 billion including the special reserve of ¥10.3 billion.

These results were all thanks to your steadfast support, for which we are sincerely grateful.

The first year of Reiwa is the start of a new era and also a new start for the Bank.

We will listen even more intently to the voices of our customers, engaging earnestly in the

customer support activities at the core of the Bank’s activity, and managing in step with the

local community.

We look forward to your continued support and patronage.

1

July 2019President, THE SEIBU SHINKIN BANK

Ichiro Takahashi

Outline

THE SEIBU SHINKIN BANK, which has an operating area covering Tokyo Metropolis (excluding the Tokyo Islands) and portions

of Saitama and Kanagawa Prefectures, is a cooperative financial institution that operates based on a commonly held principle of

prosperity for all local companies and residents.

The Bank is responding to the demand for funds by deploying deposited funds from the local community for the continuous

development of the regional economy and business and better lives. By positioning itself as a Customer Support Center, the

Bank is also fulfilling its function as a consultant to bring solutions to the broad range of challenges facing the local community

and contributing to the sustainable development of the region.

Customers (Capital investors)

Deposits LoansCapital ConsultingAs of March 31, 2019

THE SEIBU SHINKIN BANKDate of establishment: June 30, 1969Location of head office: 2-29-10 Nakano,

Nakano-ku, TokyoDeposits ¥2,041.6 billionLoans ¥1,664.2 billionPaid-in members’ capital ¥24.1 billion

Number of capital investors: 104,336Core banking profit ¥18.1 billionCapital adequacy ratio 9.66%Non-performing loan ratio 1.27%Number of branches: 75 (As of May, 2019)Number of full-time personnel: 1,200

Philosophy

Contents

Basic Philosophy Management Principles“Humanism” = All for peopleThe term “humanism” refers to all officers and employees demonstrating their individuality and capabilities to the maximum extent while being part of an organization and achieving growth and development together by deepening bonds with local customers; in other words, it is a way of thinking that treats people as the origin of everything in business.

1. To fulfill societal responsibilities, the Bank manages operations soundly.

2. The Bank contributes to the growth and development of regional society through activities for supporting customers.

3. The Bank provides workplaces where all employees can demonstrate their individuality and capabilities to the maximum extent.

Numbers presented herein are, as a rule, rounded down to the whole unit. Consequently, totals and subtotals may not match the sum of their constituent line-item values. Additionally, increases/decreases and ratios are, as a rule, calculated based on the data presented in that table or graph.This publication is a disclosure document (explanation of state of business operations and assets) prepared in accordance with Article 89 of the Shinkin Bank Act (which applies, mutatis mutandis, Article 21 of the Banking Act).

Message 1

Outline 2

Business Support 3

Overseas Business Expansion Support 4

Earnings Highlights 5

Financial Statements 8

Officers, etc/Business Organization 14

Outline 15

2

Business Support

We call our bank the “Customer Support Center.” All of our staff members engage in customer support activities. In its function as a “certified management innovation support institution” of Japan, the Bank is working together with specialists to provide appropriate consulting to customers and support the sustained growth and development of all SMEs, which are the drivers of local growth.

SME consulting program

Initiatives related to management support

Business owner customersUpgrade products,

services and technologyUpgrade �nancial strength and

management capabilitiesUpgrade human resources and

organizational capabilities

THE SEIBU SHINKIN BANK

Branches Headquarters

Specialists

Pool of specialistsCustomer Support Center

Coordi nation

Resolve a broad range of issues such as development of sales channels, technological innovation, overseas expansion, capital reinforcement and business succession

Cons ulting

Allied public institutions, including national/prefectural government entities and universities

Tax accountants, SME management consultants, etc.

Seibu Shinkin Capital Corporation (subsidiary)

When it comes to establishing and developing a new business, there are many people unable to take the first step as they lack the management resources-human, products, capital and information-required for a business to succeed.The Bank has put together a menu responding to these needs and is supporting new businesses throughout the community.

Start-upStage

1. Responding to demand for funds

Business Establishment LoansIn the fiscal year ended March 31, 2019, the Bank responded to the demand for funds for business establishment issuing 559 loans totaling ¥4.238 billion.

Venture business (VB) investmentFor those taking on the challenge of a new business, the Bank provides equity funding through Seibu Shinkin Capital Corporation (a subsidiary of the Bank established in 2003).Since its founding, Seibu Shinkin Capital Corporation has made investments totaling ¥3.073 billion across 112 venture businesses.

■Main business support services provided in March 31, 2019

Provision of specialist dispatch services 2,179

Support rendered using public support programs 465

Business matchmaking support through introductions based on business capabilities and needs 5,028

Order-booking/ordering support 1,761

Industry-academia collaboration support 270

Utilization of Seibu Business Succession Support Center 963

Overseas expansion support 454

Business startup loans funded 559

Development of business revitalization plans 272

3

Overseas Business Expansion Support

On June 14, 2011, we established an Overseas Business Expansion Support Desk in response to SMEs’ growing need for overseas business expansion. Together with expert advisors, we provide support to solve legal, accounting, tax, marketing, HR, financing and other issues involved in overseas expansion.

■Overseas Business Expansion Support

■Examples of Overseas Expansion Support

Expert advisors

Human resources

Logistics

Rental factory

Funding for overseas expansion

International taxation

Support menu

Proposal of support measures

Utilization of support menu

THE SEIBU SHINKIN BANK Customers

We strive to offer an effective lineup We aim to resolve issues by using our support menu

Matching event with Hong Kong companies held on November 1, 2018

The 19th business fair/ global sectionheld on November 6, 2018

Matching event with Philippine companies

■History2011.4.1 Overseas Expansion Support Desk established

2013.5.15 Entered into business cooperation agreement with Japan Bank for International Cooperation

2013.7.4 Entered into MOU with the Tokyo Air Service Branch of NIPPON EXPRESS CO., LTD. concerning overseas expansion support

2014.3.25 Invested in industrial park for Japanese SMEs in Ho Chi Minh City, Vietnam

2014.8.25 Funded first direct loan to an overseas subsidiary

2014.12.5 Entered into comprehensive cooperation agreement with TKC Corporation concerning overseas expansion support for SMEs

2015.7.2 Entered into MOU with Konica Minolta Business Solutions Japan Co., Ltd. concerning overseas expansion support

2015.7.10 Entered into agreement with Uniden Holdings Corporation concerning comprehensive cooperation and collaboration

2015.7.27 Entered into MOU with General Incorporated Foundation Asian Food Business Association

2015.10.1 Entered into outsourcing agreement with Nippon Export and Investment Insurance

2015.11.6 Entered into MOU with TICON Industrial Connection Public Company Limited (a company in Thailand that operates rental factories)

2016.1.28 Funded first direct foreign currency loan to an overseas subsidiary

2016.4.27 Hosted One-on-One Meetings with Thai Companies

2016.6.27 Entered into business cooperation agreement with Metropolitan Bank and Trust Company (Republic of the Philippines)

2016.11.2 Held Matchmaking Event for Foreign Students and SMEs

2016.11.22 Entered into agreements with Hong Kong Trade Development Council (HKTDC) and UPS Japan Co., Ltd.

2017.3.29 Entered into business cooperation agreement with BDO Unibank, Inc. (Republic of the Philippines)

2017.6.26 Entered into business cooperation agreement with JESCO Holdings, Inc.

2017.10.2 Entered into MOU with the Department of Trade and Industry of the Republic of the Philippines concerning business cooperation

2017.11.2 Entered into MOU with the Tokyo Branch of State Bank of India concerning business cooperation agreement

2018.7.27 Entered into MOU with Joint Stock Commercial Bank for Investment and Development of Vietnam concerning a business cooperation agreement.

2018.11.6 Entered into MOU with Pakse-Japan SME SEZ Development Co., Ltd., Laos, concerning a mutual cooperation agreement.

2019.3.27 Entered into MOU with King’s Town Bank, Co., Ltd. (Taiwan) concerning a business cooperation agreement.

4

Earnings Highlights

As a result of engaging in customer support activities, the Bank’s results were solid including increases in deposits and loans, and a profit recorded of ¥7.6 billion.

March 31, 2019

Deposits ¥2,041.6 billion

1,749.0

2,000.0(Billions of yen)

1,500.0

1,000.0

0March 31, 2017

1,935.1

March 31, 2018

2,041.6Loans ¥1,664.2 billion

1,447.0

2,000.0(Billions of yen)

1,500.0

1,000.0

0March 31, 2017

1,661.8

March 31, 2018

1,664.2

March 31, 2019

Deposits and Loans

The Bank increased both deposits and loans with the deposit balance exceeding ¥2 trillion and the loan balance recorded in the range of ¥1.6 trillion.

Change in Earnings

Item March 31, 2010 March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014

Deposits 1,295.4 1,330.8 1,360.3 1,415.1 1,488.7

Loans 891.6 916.4 956.4 994.0 1,064.8

Profit 4.0 4.7 4.2 5.7 6.3

Ordinary Profit 3.9 5.4 6.3 7.2 8.6

Net Business Profit 7.7 7.5 7.6 7.4 7.5

Core Banking Profit 7.6 7.6 7.5 7.3 7.1

5

Profit and Loss

The Bank recorded a ¥7.6 billion net profit which is the ultimate profit after deducting expenses from revenue.

(Billions of yen)

March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018 March 31, 2019 Item

1,545.1 1,643.6 1,749.0 1,935.1 2,041.6 Deposits

1,126.8 1,250.0 1,447.0 1,661.8 1,664.2 Loans

6.3 7.4 6.1 8.9 7.6 Profit

9.4 6.0 8.2 12.2 12.1 Ordinary Profit

8.8 5.3 9.7 11.9 12.4 Net Business Profit

8.2 8.6 10.5 14.4 18.1 Core Banking Profit

Pro�t ¥7.6 billion

6.1

20.0(Billions of yen)

15.0

10.0

0March 31, 2017

8.9

March 31, 2018

7.6

March 31, 2019

5.0

Core Banking Pro�t ¥18.1 billion

10.5


15.0

10.0

0March 31, 2017

14.4

March 31, 2018

18.1

March 31, 2019

5.0

Ordinary Pro�t ¥12.1 billion

8.2


15.0

10.0

0March 31, 2017

12.2

March 31, 2018

12.1

March 31, 2019

5.0

What is Core Banking Profit?The Net Business Profit, which is the operating profit reflecting

earnings of the Bank’s core business, excluding temporary

variable factors such as trading of government bonds.

This measure shows the fundamental profitability of the

financial institution from lending business, etc.

6

Earnings Highlights

Regulatory Capital and Capital Adequacy Ratio

Non-performing Loan Balance and Non-performing Loan Ratio

Regulatory capital, owing to the accumulation of profit, etc., rose to ¥157.0 billion. The capital adequacy ratio was 9.66% an increase of 0.35% from March 31, 2018. This far exceeds the 4% domestic standard for financial institution soundness.

Non-performing loan balance was at ¥22.1 billion reflecting a slight increase from March 31, 2018, however Non-performing loan ratio was at the low level of 1.27%.

Regulatory capital ¥157.0 billion

124.2


150.0

100.0

0March 31, 2017

146.3

March 31, 2018

157.0

March 31, 2019

Non-performing loan balance ¥22.1 billion

19.2


20.0

10.0

0March 31, 2017

16.2

March 31, 2018

22.1

March 31, 2019

Capital adequacy ratio 9.66%

9.20

12(%)

8

4

0March 31, 2017 March 31, 2018 March 31, 2019

9.31 9.66

Non-performing loan ratio 1.27%

1.32

2(%)

1

0March 31, 2017 March 31, 2018 March 31, 2019

0.96

1.27

Change in Earnings

Item March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018 March 31, 2019

Regulatory capital *1 (Billions of yen) 104.8 117.3 124.2 146.3 157.0

Capital adequacy ratio *1 (%) 10.11 10.06 9.20 9.31 9.66

Non-performing loan balance *2 (Billions of yen) 26.5 21.9 19.2 16.2 22.1

Non-performing loan ratio *2 (%) 2.34 1.74 1.32 0.96 1.27

*1 Non-consolidated; Under Domestic Standard *2 Non-Consolidated; Under Financial Reconstruction Act

7

Financial Statements

●Non-Consolidated Balance SheetsTHE SEIBU SHINKIN BANK

March 31, 2017, 2018 and 2019 Million of yen

March 31, 2019 March 31, 2018 March 31, 2017

Assets

Cash ¥ 18,873 ¥ 15,831 ¥ 13,514

Due From Banks 739,886 417,993 362,603

Money Held in Trust 2,985 9,629 9,709

Securities 89,308 105,890 122,251

Japanese Government Bonds 23,064 23,073 29,318

Local Government Bonds 908 1,115 1,539

Corporate Bonds 5,687 10,791 18,431

Stocks 4,000 4,321 3,650

Other Securities 55,645 66,589 69,311

Loans 1,664,246 1,661,855 1,447,097

Bills Discounted 3,790 4,296 3,656

Loans on Bills 27,468 42,221 38,532

Loans on Deeds 1,615,735 1,599,093 1,391,254

Overdrafts 17,250 16,244 13,653

Foreign Exchange 280 146 119

Due From Foreign Banks 280 132 119

Foreign Bills Receivable – 13 –

Other Assets 11,000 10,355 10,750

Outstanding Bank Transfer Advanced 823 354 294

Investment in the Shinkin Central Bank 6,895 6,895 6,895

Prepaid Expenses 64 64 148

Accrual Income 1,576 1,506 1,295

Derivative Transactions 0 2 1

Others 1,640 1,531 2,114

Tangible Fixed Assets 19,251 19,782 20,416

Buildings 4,551 4,774 4,924

Land 14,053 14,303 14,726

Leased Assets 65 58 41

Construction in Progress 10 7 0

Other Tangible Assets 571 638 723

Intangible Fixed Assets 809 715 735

Software 398 286 397

Leased Assets 76 93 3

Others 335 335 335

Prepaid Pension Expense 1,180 973 929

Deferred Tax Assets 1,378 1,453 1,271

Reverse Against Debt Guarantee 76,797 23,523 11,283

Reserve for Possible Loan Losses (13,356) (8,671) (7,826)

(Specific Reserve for Possible Loan Losses) (1,211) (1,108) (1,606)

Total Assets 2,612,641 2,259,478 1,992,855

Million of yen


Liabilities

Deposit ¥ 2,041,645 ¥ 1,935,136 ¥ 1,749,021

Current Accounts 24,017 23,841 23,575

Ordinary Deposits 790,542 750,520 698,618

Saving Deposits 6,696 6,902 7,136

Deposits at Notice 2,652 2,908 1,505

Time Deposits 1,190,546 1,124,729 990,627

Installment Savings 14,847 14,902 15,490

Other Deposits 12,343 11,330 12,067

Borrowed Money 47,364 43,167 45,530

Loans payable 47,364 43,167 45,530

Call Money 280,221 100,000 54,710

Foreign Exchange 10 0 1

Foreign Bills of Exchange Payable 10 0 1

Other Liabilities 11,185 9,206 6,326

Outstanding Bank Transfer Received 1,212 633 502

Accrued Expenses 1,084 1,130 1,113

Reserve for Future Interest Payment of Installment Savings 7 9 12

Income Taxes Payable 4,363 3,472 2,343

Unearned Income 304 463 435

Unsettled Refunds 15 112 13

Unsettled Equity Refunds 75 0 0

Deposits from Employees 1,153 1,185 1,208

Derivative Transactions 0 0 0

Lease Obligations 139 151 43

Asset Retirement Obligations 153 151 150

Other Liabilities 2,675 1,893 502

Reserve for Employee Bonuses 952 952 942

Reserve for Director's Retirement Benefits 246 875 242

Provision for Reimbursement of Deposits 126 109 38

Provision for Contingent Loss 267 210 246

Deferred Tax Liabilities for Revaluation 2,321 2,384 2,384

Debt Guarantee 76,797 23,523 11,283

Total Liabilities 2,461,140 2,115,567 1,870,727

Net Assets

Paid-in Member's Capital 24,132 24,012 11,198

Common shares 24,132 24,012 11,198

Retained Earnings 121,056 113,693 105,160

Legal reserve 15,198 11,198 11,029

Voluntary Reserve 105,857 102,495 94,130

Reserve for Specific Purpose 97,454 92,514 86,443

Reserve for Amortization (1,000) (1,000) (1,000)

Reserve for Local Industry Assistance Fund's (200) (200) (200)

Reserve for Tax Purpose Reduction Entry of Tangible Assets (591) (640) (487)

Special Reserve for Reduction (–) (–) (71)

Reserve for Specific Future Bad Debt (32) (43) (54)

Retained Earnings for Current Term 8,403 9,980 7,687

Treasury Shares (204) (8) (0)

Total Member's Equity 144,984 137,698 116,358

Unrealized Gains on Available-for-sale Securities 905 439 1

Land Revaluation and Transaction Adjustment 5,611 5,772 5,769

Deferred Gains or Losses on Hedge 6,516 6,212 5,770

Total Net Assets 151,501 143,910 122,128

Total Liabilities and Net Assets 2,612,641 2,259,478 1,992,855

* If an item is listed in the balance sheets or in the statements of income and retained earnings but has no balance against it, it is not presented here.* A special reserve for building a safeguard system to protect main clients (¥5.9 billion as of March 31, 2018, and ¥7.0 billion as of March 31, 2019) and a special reserve for financing real

estate for leasing (¥3.3 billion as of March 31, 2019) are included in reserve for possible loan losses.* Minus amounts less than one display unit are displayed as “(0).”

8

●Non-Consolidated Statements of Income and Retained EarningsTHE SEIBU SHINKIN BANK

March 31, 2017, 2018 and 2019 Million of yen


Operating Revenue ¥ 38,758 ¥ 36,714 ¥ 32,666

Interest Income 33,520 30,764 27,012

Loans 31,565 28,316 24,570

Deposits in Other Banks 583 523 651

Investment Securities 1,201 1,754 1,637

Others 169 170 152

Fees and Commissions Received 2,920 2,862 2,848

Exchange Commissions Received 1,402 1,331 1,266

Others 1,517 1,531 1,582

Other Operating Income 687 500 828

Gains on Foreign Exchange 72 73 51

Gains on Sale of Bonds Such as Japanese Government Bonds 21 76 497

Others 593 351 280

Other Income 1,630 2,587 1,976

Gain on Bad Debts Recovered 262 131 222

Gains on Sale of Shares and Other Securities 986 1,380 1,044

Gains on Money Held in Trust 71 231 150

Others 310 844 558

Operating Expenses ¥ 26,643 ¥ 24,426 ¥ 24,367

Interest Expenses 1,213 1,322 1,453

Deposits 861 913 994

Provision for Future Interest Payment of Installment Savings 3 3 5

Interest on Borrowings 359 392 426

Interest on Call Money (17) 7 21

Others 5 5 5

Fees and Commissions Paid 1,774 1,651 1,585

Exchange Commissions Paid 529 508 488

Others 1,244 1,143 1,097

Other Operating Expenses 1,130 1,212 16

Loss on Sale of Bonds Such as Japanese Government Bonds 14 0 –

Loss on Redemption of Bonds Such as Japanese Government Bonds 1,113 1,210 0

Others 2 1 15

●Statements of Appropriation of Surplus Million of yen


Unappropriated Retained Earnings at End of Year ¥ 8,403 ¥ 9,980 ¥ 7,687

Reversal of Reserve (Reversal of Reserve for Tax Purpose Reduction Entry of Tangible Assets) 11 49 9

Reversal of Reserve (Reversal of Special Reserve for Tax Purpose Reduction Entry) – – 71

Reversal of Reserve (Reversal of Reserve for Specific Future Bad Debt) 10 10 10

Appropriation of Surplus 7,722 9,399 6,775

Legal Retained Earnings 5,000 4,000 169

Dividends for Common Shares (Annual 3%) 722 (Annual 3%) 399 (Annual 4%) 443

Reserve for Tax Purpose Reduction Entry of Tangible Assets – – 163

Special Reserve for Reduction – – –

Reserve for Specific Purpose 2,000 5,000 6,000

Retained Earnings at End of Year 703 641 1,003

Million of yen


General and Administrative Expenses ¥ 15,661 ¥ 17,589 ¥ 16,939

Salaries and Employee Benefits 8,931 10,548 9,792

Other General and Administrative Expenses 6,389 6,708 6,795

Tax 340 332 352

Other Expenses 6,863 2,649 4,372

Provisions of Reserve for Possible Loan Losses 4,785 1,237 1,978

Write-off of Loans 863 538 1,669

Loss on Sale of Shares and Other Securities 646 224 328

Loss on Money Held in Trust 198 101 139

Amortization of Other Assets 24 19 18

Others 345 528 238

Operating Profit 12,115 12,287 8,298

Extraordinary Income 13 175 14

Gain on Disposal of Fixed Assets 13 175 14

Extraordinary Loss 161 71 29

Loss on Disposal of Fixed Assets 161 41 29

Impairment loss – 29 –

Profit Before Income Taxes 11,967 12,392 8,283

Income Taxes Current 4,535 3,734 2,498

Income Taxes Deferred (168) (323) (391)

Total Income Taxes 4,367 3,411 2,107

Profit 7,600 8,980 6,175

Retained Earnings at Beginning of Year 641 1,003 1,118

Cumulative Effects of Changes in Accounting Policies – – 273

Restated Balance – – 1,391

Reversal of Land Revaluation Excess 161 (3) 120

Unappropriated Retained Earnings at End of Year 8,403 9,980 7,687

●Audit by the Accounting AuditorThe Bank’s financial statements, based on the provisions of Article 38-2, paragraph 3, of the Shinkin Bank Act are audited by PricewaterhouseCoopers Aarata LLC and the Bank has received an

audit report attesting that the statements are true and fair.

●Affirmation of the appropriateness and validity of the financial statements by a Representative Director.We affirm the appropriateness of the balance sheets, statements of income, and statements of appropriation of surplus (hereafter the “financial statements”) for the fiscal year ended March

31, 2019 and the validity of the internal audit related to the preparation of the financial statements.

June 28, 2019 THE SEIBU SHINKIN BANK President Ichiro Takahashi

9

Performance Indicators

●Principal Management Benchmark Million of yen

March 31, 2019 March 31, 2018 March 31, 2017 March 31, 2016 March 31, 2015

Profit or Loss

Operating Revenue ¥ 38,758 ¥ 36,714 ¥ 32,666 ¥ 31,702 ¥ 30,552

Operating Expenses 26,643 24,426 24,367 25,657 21,116

Operating Profit 12,115 12,287 8,298 6,045 9,436

Net Business Profit 12,431 11,960 9,772 5,325 8,832

Core Banking Profit 18,121 14,438 10,549 8,673 8,285

Profit 7,600 8,980 6,175 7,405 6,389

Balance

Deposits and Savings 2,041,645 1,935,136 1,749,021 1,643,616 1,545,185

Loans and Bills Discounted 1,664,246 1,661,855 1,447,097 1,250,046 1,126,827

Securities 89,308 105,890 122,251 148,852 156,618

Net Assets 151,501 143,910 122,128 116,802 108,607

Total Assets 2,612,641 2,259,478 1,992,855 1,826,759 1,698,233

Share Capital

Paid-in Members' Capital 24,132 24,012 11,198 11,029 8,671

Dividends (Per Share) (Yen) 1.5 1.5 2 2 2

Number of Capital Investors 104,336 103,942 105,240 103,958 102,803

Number of Shares (Million Shares) 478 480 223 220 173

Capital Adequacy Ratio (Non-Consolidated) 9.66% 9.31% 9.20% 10.06% 10.11%

Non-Performing Loan Ratio(Non-Consolidated; Under Financial Reconstruction Act) 1.27% 0.96% 1.32% 1.74% 2.34%

Number of Directors and Other Officers 16 15 15 14 14

Of Which, Number of Full-Time Directors and Other Officers 12 11 11 11 11

Number of Personnel 1,188 1,175 1,153 1,164 1,134

10

●Gross Operating Profit Million of yen


Net Interest Income ¥ 32,311 ¥ 29,447 ¥ 25,565

Interest Income 33,520 30,764 27,012

Interest Expenses 1,208 1,316 1,446

Net Fees and Commissions 1,146 1,210 1,263

Fees and Commissions Received 2,920 2,862 2,848

Fees and Commissions Paid 1,774 1,651 1,585

Net Other Operating Income (Expenses) (442) (712) 812

Other Operating Income 687 500 828

Other Operating Expenses 1,130 1,212 16

Gross Operating Profit 33,014 29,945 27,640

Gross Operating Profit Ratio 1.31% 1.36% 1.40%

(Notes) 1. Interest Expenses exclude expenses commensurate with expenses for money held in trust (¥5 million for the fiscal year ended March 31, 2018 and ¥4 million for the fiscal year ended March 31, 2019).

2. Gross operating profit ratio = Gross operating profit / Average balance of interest-earning assets × 100

3. There is no distinction made between the domestic divisions and the international divisions.

●Profit Ratios and Margins


Return on Assets

Ratio of Operating Profit to Total Assets 0.47% 0.54% 0.41%

Ratio of Profit to Total Assets 0.29% 0.40% 0.30%

Total Margins

Yield on Interest-Earning Assets 1.33% 1.40% 1.37%

Cost Ratio of Interest-Bearing Liabilities 0.72% 0.85% 0.96%

Total Margins 0.61% 0.55% 0.41%

(Note) Ratio of operating profit (profit) to total assets = Operating profit (profit) / Average balance of total assets (excluding Debt guarantees as per contra) × 100

●Increase/Decrease in Interest Receivable/Payable Million of yen


Changes Due to Balance

Changes Due to Interest Rate Net Change Changes Due to

BalanceChanges Due to

Interest Rate Net Change Changes Due to Balance

Changes Due to Interest Rate Net Change

Increase (Decrease) in Interest Receivable ¥ 4,297 ¥ (1,541) ¥ 2,755 ¥ 3,148 ¥ 604 ¥ 3,752 ¥ 3,517 ¥ (2,374) ¥ 1,142

Of Which, Loans and Bills Discounted 2,780 468 3,248 4,014 (268) 3,745 3,090 (1,199) 1,890

Of Which, Deposits (Excl. Interest-Free) 165 (105) 59 39 (167) (127) 187 (560) (372)

Of Which, Securities (148) (404) (552) (395) 512 116 (76) (296) (372)

Increase (Decrease) in Interest Payable 139 (248) (109) 109 (240) (130) 247 (277) (30)

Of Which, Deposits and Savings 82 (134) (52) 75 (158) (82) 80 (122) (42)

Of Which, Borrowed Money (20) (12) (33) (20) (13) (33) 12 (19) (7)

(Notes) 1. Factors that increase or decrease both balance and interest rate are allocated based on the proportion of the increase or decrease in the balance and interest rate.2. There is no distinction made between the domestic divisions and the international divisions.

●Components of Net Interest Income Million of yen


Interest-Earning Assets

Ave. Balance ¥ 2,503,057 ¥ 2,194,973 ¥ 1,970,183

Interest 33,520 30,764 27,012

Yield 1.33% 1.40% 1.37%

Of Which, Loans and Bills Discounted

Ave. Balance 1,703,807 1,551,867 1,331,893

Interest 31,565 28,316 24,570

Yield 1.85% 1.82% 1.84%

Of Which, Deposits with Banks (Excl. Interest-Free)

Ave. Balance 690,171 523,793 488,158

Interest 583 523 651

Yield 0.08% 0.10% 0.13%

Of Which, Securities

Ave. Balance 101,990 112,256 142,616

Interest 1,201 1,754 1,637

Yield 1.17% 1.56% 1.14%

Interest-Bearing Liabilities

Ave. Balance 2,380,446 2,093,589 1,876,843

Interest 1,213 1,322 1,453

Yield 0.05% 0.06% 0.07%

Of Which, Deposits and Savings

Ave. Balance 2,024,648 1,850,972 1,709,642


Yield 0.04% 0.04% 0.05%

Of Which, Borrowed Money

Ave. Balance 41,950 44,406 46,673


Yield 0.85% 0.88% 0.91%

(Notes) 1. The average balance of non-interest deposits with banks (¥3,957 million for the fiscal year ended March 31, 2018, and ¥4,459 million for the fiscal year ended March 31, 2019) is excluded from interest-earning assets. The average balance of an amount commensurate with money held in trust (¥9,698 million for the fiscal year ended March 31, 2018, and ¥9,248 million for the fiscal year ended March 31, 2019) and the corresponding interest (¥5 million for the fiscal year ended March 31, 2018, and ¥4 million for the fiscal year ended March 31, 2019) are excluded from interest-bearing liabilities.


●Loan-to-Deposit Ratio/Securities-to-Deposit Ratio


Loan-to-Deposit Ratio

End of Period 81.51% 85.87% 82.73%

Average during Period 84.15% 83.84% 77.90%

Securities-to-Deposit Ratio

End of Period 4.37% 5.47% 6.98%

Average during Period 5.03% 6.06% 8.34%

(Notes) 1. Loan-to-deposit ratio = Loans and bills discounted / (Deposits and savings + Negotiable certificates of deposit) × 100

2. Securities-to-deposit ratio = Securities / (Deposits and savings + Negotiable certificates of deposit) × 100


11

Service Indicators

Deposits

Loans

●Average Balance of Deposits and Negotiable Certificates of Deposit Million of yen


Composition Ratio Composition

Ratio Composition Ratio

Liquid Deposits ¥ 791,045 39.07% ¥ 737,796 39.85% ¥ 684,691 40.04%

Of Which, Interest-Bearing Deposits 714,840 35.30% 666,553 36.01% 622,690 36.42%

Fixed-term Deposits 1,224,045 60.45% 1,104,244 59.65% 1,016,500 59.45%

Of Which, Time Deposits with Fixed Interest Rates 1,208,936 59.71% 1,088,988 58.83% 1,000,653 58.52%

Of Which, Time Deposits with Floating Interest Rates 72 0.00% 80 0.00% 70 0.00%

Other Deposits 9,558 0.47% 8,931 0.48% 8,450 0.49%

Subtotal 2,024,648 100.00% 1,850,972 100.00% 1,709,642 100.00%

Negotiable Certificates of Deposit – – – – – (–)

Total 2,024,648 100.00% 1,850,972 100.00% 1,709,642 100.00%

(Notes) 1. Liquid deposits: Current deposits + Ordinary deposits + Saving deposits + Deposits at notice

2. Fixed-term deposits: Time deposits + Installment savings Time deposits with fixed interest rate: Time deposits whose interest rate until date of maturity is determined when deposited Time deposits with floating interest rate: Time deposits whose interest rates vary in response to changes in market rates during the term of deposit


●Average Balance by Loans and Bills Discounted Account Million of yen




Bills Discounted ¥ 3,572 0.20% ¥ 3,768 0.24% ¥ 3,755 0.28%

Loans on Bills 37,882 2.22% 40,598 2.61% 41,340 3.10%

Loans on Deeds 1,646,257 96.62% 1,493,629 96.24% 1,274,524 95.69%

Overdrafts 16,095 0.94% 13,871 0.89% 12,272 0.92%

Total 1,703,807 100.00% 1,551,867 100.00% 1,331,893 100.00%

(Note) There is no distinction made between the domestic divisions and the international divisions.

●Loan Portfolio by Use of Loans Million of yen




Equipment Funds ¥ 1,124,483 67.56% ¥ 1,088,287 65.48% ¥ 874,353 60.42%

Operating Capital 247,312 14.86% 271,195 16.31% 274,246 18.95%

Personal Housing 292,449 17.57% 302,371 18.19% 298,496 20.62%

Total 1,664,246 100.00% 1,661,855 100.00% 1,447,097 100.00%

●Balance by Type of Time Deposits Million of yen


Time Deposits with Fixed Interest Rate ¥ 1,190,477 ¥ 1,124,657 ¥ 990,533

Time Deposits with Floating Interest Rate 68 72 93

Total 1,190,546 1,124,729 990,627

●Ending Balance by Type of Loans Million of yen


Loans with Fixed Interest Rate ¥ 282,135 ¥ 319,213 ¥ 302,199

Loans with Floating Interest Rate 1,382,111 1,342,642 1,144,897

Total 1,664,246 1,661,855 1,447,097

●Loan Portfolio by Type of Collateral Million of yen


Deposits and Savings with the Bank ¥ 11,831 ¥ 12,556 ¥ 12,137

Securities 10,410 11,210 10,660

Movables – – –

Real Estate 1,243,341 1,223,641 998,992

Secured by Credit Guarantee Corporation and Credit Insurance 142,898 138,586 133,306

Guarantee 217,207 236,632 242,130

Creditability 37,344 38,035 48,861

Others 1,211 1,191 1,007

Total 1,664,246 1,661,855 1,447,097

●Debt Guarantees as Per Contra by Type of Collateral Million of yen


Deposits and Savings with the Bank ¥ 50 ¥ 44 ¥ 44

Securities – – –

Movables – – –

Real Estate 73,203 22,114 10,336

Secured by Credit Guarantee Corporation and Credit Insurance – – –

Guarantee 15 17 19

Creditability 3,527 1,346 879

Others 0 0 3

Total 76,797 23,523 11,283

12

●Loan Portfolio by Industry Million of yen


Number of Customers

Balance

Number of Customers

Balance

Number of Customers

Balance

Composition Ratio

Composition Ratio

Composition Ratio

Composition Ratio

Composition Ratio

Composition Ratio

Manufacturing ¥ 1,265 2.70% ¥ 44,064 2.64% ¥ 1,312 2.76% ¥ 50,447 3.03% ¥ 1,349 2.88% ¥ 52,067 3.59%

Agriculture and Forestry 11 0.02% 196 0.01% 10 0.02% 564 0.03% 7 0.01% 487 0.03%

Fisheries – – – – – – – – – – – –

Mining and Quarrying of Stone and Gravel 3 0.00% 1,623 0.09% 3 0.00% 1,640 0.09% 3 0.00% 1,908 0.13%

Construction 2,058 4.39% 44,151 2.65% 2,108 4.44% 48,159 2.89% 2,153 4.61% 45,741 3.16%

Electricity, Gas, Heat Supply and Water 38 0.08% 2,248 0.13% 33 0.06% 2,173 0.13% 25 0.05% 2,044 0.14%

Information and Communications 1,364 2.91% 22,692 1.36% 1,243 2.62% 22,911 1.37% 1,124 2.40% 20,655 1.42%

Transport and Postal Activities 266 0.56% 11,982 0.71% 273 0.57% 15,072 0.90% 282 0.60% 14,055 0.97%

Wholesale and Retail Trade 2,493 5.32% 65,000 3.90% 2,579 5.44% 69,347 4.17% 2,621 5.61% 72,677 5.02%

Financial and Insurance 66 0.14% 8,871 0.53% 62 0.13% 7,086 0.42% 59 0.12% 16,721 1.15%

Real Estate 1,353 2.89% 186,248 11.19% 1,237 2.60% 199,464 12.00% 1,096 2.34% 170,033 11.74%

Real Estate Lessors 5,729 12.23% 767,187 46.09% 5,438 11.47% 725,272 43.64% 4,666 9.99% 560,946 38.76%

[Of Which, Specializing in This Category] [4,274] [9.13%] [573,307] [34.44%] [3,982] [8.40%] [539,287] [32.45%] [3,237] [6.93%] [399,920] [27.63%]

Goods Rental and Leasing 49 0.10% 2,154 0.12% 53 0.11% 2,180 0.13% 53 0.11% 1,859 0.12%

Scientific Research, Professional and Technical Services 1,138 2.43% 24,539 1.47% 1,042 2.19% 23,773 1.43% 930 1.99% 20,271 1.40%

Accommodations 35 0.07% 3,024 0.18% 31 0.06% 2,777 0.16% 23 0.04% 2,043 0.14%

Restaurant 1,403 2.99% 25,355 1.52% 1,355 2.85% 24,709 1.48% 1,274 2.72% 22,591 1.56%

Living-related and Personal Services and Amusement Services 819 1.74% 15,092 0.90% 773 1.63% 14,477 0.87% 733 1.57% 14,503 1.00%

Education, Learning Support 210 0.44% 9,562 0.57% 187 0.39% 9,371 0.56% 179 0.38% 8,388 0.57%

Medical, Health Care and Welfare 771 1.64% 41,992 2.52% 753 1.58% 43,426 2.61% 731 1.56% 41,957 2.89%

Miscellaneous Services 1,333 2.84% 39,688 2.38% 1,292 2.72% 42,229 2.54% 1,232 2.63% 37,763 2.60%

Subtotal 20,404 43.58% 1,315,677 79.05% 19,784 41.74% 1,305,085 78.53% 18,540 39.71% 1,106,718 76.47%

National and Local Government Bodies, etc. 7 0.01% 1,302 0.07% 8 0.01% 2,903 0.17% 8 0.01% 2,287 0.15%

Individuals (Funds for Housing, Consumption, Tax Payment, etc.) 26,401 56.39% 347,266 20.86% 27,606 58.24% 353,865 21.29% 28,138 60.27% 338,091 23.36%

Total 46,812 100.00% 1,664,246 100.00% 47,398 100.00% 1,661,855 100.00% 46,686 100.00% 1,447,097 100.00%

(Notes) 1. The industrial classification is shown in accordance with divisions of Japan Standard Industrial Classification.2. In the event that the same debtor receives a business loan and a consumer loan, the borrower is counted under both an appropriate industry and "Individuals" category.3. Foreign loans are classified in the same way as domestic loans and included in relevant industries.4. [Specializing in This Category] represents loans spent to build or acquire properties for real estate leasing among "Real Estate Lessors."

●Write-off of Loans Million of yen


Write-off of Loans ¥ 863 ¥ 538 ¥ 1,669

●Ending Balance and Increase/Decrease During Period of General Reserve and Specific Reserve for Possible Loan Losses Million of yen


Increase during Period

Decrease during Period Ending Balance Increase during

PeriodDecrease during

Period Ending Balance Increase during Period

Decrease during Period Ending Balance

General Reserve for Possible Loan Losses ¥ 12,145 ¥ 7,562 ¥ 12,145 ¥ 7,562 ¥ 6,219 ¥ 7,562 ¥ 6,219 ¥ 4,945 ¥ 6,219

Specific Reserve for Possible Loan Losses 1,211 1,108 1,211 1,108 1,606 1,108 1,606 1,147 1,606

Total 13,356 8,671 13,356 8,671 7,826 8,671 7,826 6,093 7,826

13

Human Resources andRemuneration Committee

Business ImprovementCommittee

MemberRepresentatives

Meeting

Business Development Department 1In Charge of Business Development Department 1

In Charge of Network

In Charge of Business Development Department 2

In Charge of Business Planning

In Charge of Business Support

In Charge of Community-Development Support

In Charge of Wealth-Building/Management Support

In Charge of Internet Banking

In Charge of International Business

In Charge of Foreign Exchange

In Charge of Credit Department 1

In Charge of Agency

In Charge of Credit Department 2

In Charge of Business Solutions

In Charge of Asset Valuation

In Charge of Credit Control

In Charge of Data Management

In Charge of Planning and Advertising

In Charge of Accounting

In Charge of Securities Investment

In Charge of Cash Management

In Charge of Human Resources

In Charge of General Affairs

In Charge of Human Resource Development

In Charge of Welfare

In Charge of Recruit

In Charge of Administration Support

In Charge of Business Guidance

In Charge of Business Integration

In Charge of System Planning

In Charge of System Management

In Charge of Compliance

In Charge of Anti-social Forces Countermeasures and AML CFT

In Charge of Risk Management

In Charge of Cyber Security

In Charge of Customer Support

In Charge of Audit

Business Development Department 2

Business Planning Department

Business Support Department

Private Business Department

International Business Department

Credit Department 1

Credit Department 2

Business Solutions Department

Credit Operation Department

Corporate Planning Department

General Finance Department

Human Resources and General Affairs Department

Administration Department

System Planning Department

Risk Management Department

Audit Department

Auditors’Meeting

Directors’Meeting

Directors’Meeting

(full time)

Officers, etc./Business Organization

Ichiro Takahashi, President (Representative Director)

Yoshihiro Hanzawa, Senior Managing Director (Representative Director)

Norihide Goto, Managing Director

Yasuhiko Tamura, Managing Director

Takayoshi Nagasawa, Director

Kiyoshi Kurashige, Chairman, Council Chairperson Osamu Tani, Corporate Attorney

Tomotaka Kondo, Corporate Attorney

Hideo Yamada, Corporate Attorney

Nobuo Gohara, Corporate Attorney, Compliance Advisor

Hongo Tsuji Tax & Consulting, Tax Advisor

PricewaterhouseCoopers Aarata LLC, Financial Auditor

Takashi Komachi, Director

Hiroaki Tanaka, Director

Yasunori Seki, Director

Kumiko Usami, Director *1

Norimichi Udagawa, Director *1

Shigeki Sato, Auditor

Hanjuro Tamura, Auditor

Takao Takasaki, Non-member Auditor *2

*1. Non-executive directors pursuant to the shinkin bank industry’s Industry Arrangement Concerning Measures to Improve the Functions of Member Representatives Meetings.*2. A non-member auditor as stipulated in Article 32, paragraph 5 of the Shinkin Bank Act.

●Officers As of June 28, 2019

●Headquarters Organization Chart As of May 24, 2019

●Special Positions As of June 28, 2019 ●Counselor, etc. As of March 31, 2019

Ikuo Shiraishi

Tsuneyuki Sakamoto

Yuji Soda

Daisuke Usami

Tomio Kawagoe

Wataru Naitou

Takeshi Hara

●Executive Officer As of June 28, 2019

14

Date of establishment: June 30, 1969

Location of head office: 2-29-10 Nakano, Nakano-ku, Tokyo

Number of full-time personnel: 1,200

Number of branches: 75

ATM (Subbranch): 36

Total assets: ¥2,611.6 billion

Paid-in members’ capital (dividend payable on paid-in capital: 3% p.a.): ¥24.1 billion

Number of capital investors: 104,336

＜Inquiries＞THE SEIBU SHINKIN BANKInternational Business Department

Location of head office:2-29-10 Nakano, Nakano-ku, Tokyo

Pilot number: +81-3-3384-6110http://www.seibushinkin.jp/

■Head Office　■BranchBranch list (As of March, 2019)

Outline

Bank Data (As of March, 2019)

(As of July, 2019)

TokyoTokyo

SaitamaSaitama

KanagawaKanagawa

15

Documents

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