Solid Start to FY2011 Shinsei Bank, Limited September 2011 - - PowerPoint PPT Presentation
Solid Start to FY2011 Shinsei Bank, Limited September 2011 Overview Management 1. Medium-Term Management Plan and Management Commitment Commitment 2. Off to a Good Start Highlights 3. Loan Balance Shows Signs of Bottoming-out Business 4.
Utilize our strengths to stabilize
Focus on areas that will contribute to
Strengthen role as incubator and
Reduce divestible non-core business
Achieve stable, low funding costs Providing unique housing loan
Investment Consultant Further strengthen consumer
Customer Base Product Offerings
Japanese Megabanks
Innovative Plain Vanilla Small Large
Traditional Japanese Banks
Shinsei Bank
Non- Japanese Banks Current Shinsei Bank
has stable earnings power, is depended upon by customers and contributes to the development of both domestic and international
has built on its past experience and history, values diverse talents and cultures and takes on new challenges strives for transparent management and is valued and trusted by all stakeholders, including customers, investors and employees
Strengths Opportunities
Diversity Tailor-made solutions High customer satisfaction Swift decision making, agile
execution
New customers “Responsible consumer lending” Niche businesses Ever-changing lending and
investment needs of customers Weaknesses Threats
Smaller customer base Fierce competition Political, legislative and economic
uncertainties Medium-Term Management Plan
Established subsidiary to provide capital to support corporate restructuring Alliance with India’s YES Bank Alliance with Vietnam's Baoviet Holdings
Established Healthcare Finance Division Established Corporate Support Division for SMEs Partnership with APLUS FINANCIAL in personal loan business
March 2010
Exchange offers for Tier II subordinated notes
September 2010
Shinsei Financial forged alliances with regional banks in unsecured personal loan guarantee business
December 2010
March 2011
JPY 71.8 billion of capital raising through international common share offering
Business Collaboration with Taiwan affiliate Jih Sun Joint ATM installation with Seven Bank
Repurchased USD 1,072 million of Tier I preferred securities
June 2010
New Management Announcement of Medium-Term Management Plan Announcement of Revised Medium-Term Management Plan Intensive Group-wide expense review Revision of consumer finance asset projections and credit cost control Establishment of healthcare finance, corporate restructuring and other new businesses Targeting a capital policy aligned with Basel III APLUS FINANCIAL became a subsidiary of Shinsei Financial
Consolidated Net Income JPY -140.1 billion (FY2009) Tier 1 Capital Ratio 6.35%（2010.3） 7.76%（2011.3） JPY 42.6 billion (FY2010) Launch Shinsei Bank Card Loan
Original target almost achieved in
Continued focus on more efficient
Further improve risk management Conservative reserves
1 Medium-Term Management Plan 2 Money Lending Business Control and Regulation Law
Decline in Shinsei Financial loans due to implementation of MLBL2, while maintaining market share and remaining
Continued divestiture of non-core business assets, renewal of asset composition and quality Real estate portfolio under renewal and focus on securing profitability
Operating environment remains challenging, due to economic impact of Earthquake Climate could improve due to reconstruction demand and improvements in supply chain (from 2H FY2011)
ROE (annualized)
Cash Basis ROE (annualized)
Cash Basis ROA (annualized)
ROA (annualized)
Expense-to-Revenue Ratio
FY2010
Net Interest Margin (NIM) FY2009 1Q FY2011
2010.3
2011.3
2011.6
FY2010
FY2009
1Q FY2011
(JPY billion)
1 (Reserve for loan losses + collateral + guarantees) / Amount of claims (Non-consolidated basis) 2 Cash, unencumbered JGBs and other assets pledged to Bank of Japan
2010.3
2011.3
2011.6
2010.3
2011.3
2011.6
(*) Previously disclosed items and figures are not reclassified to the current format
(Consolidated, JPY billion)
Credit recovery at Shinki
Domestic real estate non-recourse finance
Asset-backed investments
Restructuring costs at subsidiaries
Domestic real estate principal investments
Impairment of intangible assets, net of tax (Shinki)
Impairment of goodwill and intangible assets, net of tax (APLUS FINANCIAL)
Asset-backed securities, asset-backed investments and European investments
Gain from corporate bonds and equities
1.6
17.7 Gain from the sale of collateralized loan obligations (CLOs) 6.3
Grey zone related provisions
29.4
Gain from buy back of preferred securities and subordinated debt
Domestic real estate principal investments
42% 26%
Securities Loans and bills discounted Other assets Borrowed money Deposits, Negotiable certificates of deposits (NCD) Other liabilities
Equity (Consolidated, JPY billion)
32% 42% 26%
4,772.5 4,291.4 4,214.0 2,832.9 3,286.3 2,703.3 3,341.6 2,653.7 2,556.6 2,000 4,000 6,000 8,000 10,000 12,000 10.6 11.3 11.6 10,947.0 10,231.5 9,473.9
(26%) (44%) (32%) (42%) (29%) (44%)
6,096.4 5,610.6 5,777.3 1,234.3 1,672.7 594.3 2,976.7 2,336.9 2,472.5 2,000 4,000 6,000 8,000 10,000 12,000 10.6 11.3 11.6 10,947.0 10,231.5 9,473.9
(56%) (55%) (61%)
10 20 30 40 10.4-6 10.7-9 10.10-12 11.1-3 11.4-6
2 Interest rates for receivables whose contracts were made under the previous
interest rate system, and for which there has been no new borrowing, are not required to be changed after the full implementation of the revised MLBL Shinsei to continue proactive development of high profitability unsecured personal loan (UPL) business, despite impact of
New customer acquisition increasing at Lake since 3Q FY2010 Rebound in UPL balance growth expected with launch of “Shinsei Bank Card Loan – Lake1” (JPY billion)
100 200 300 400 500 10.3 10.6 10.9 10.12 11.3 11.6 Lending rate over 20% (grey zone)2
(Unit: 1,000 customers)
Lending rate below 20%
1 Shinsei Bank plans to begin offering a card loan service under the
Lake brand from October 1, 2011. Shinsei Financial will continue to serve its existing customers, and focus on its credit guarantee business for Shinsei Bank as well as other banks (Guarantee alliances with 5 banks as of July 2011)
1 “Others” include retail debentures, mutual funds and variable annuities, and structured securities (financial instruments intermediary business)
Deposits 2,533.6 2,571.6 2,586.1 1,000 2,000 3,000 4,000 10.6 11.3 11.6 10 20 30 40 50 Number of accounts (lhs)
Number of outlets (rhs) 44
42 45 Others１ 29.2 29.1 36.2 53.6 45.2 20 40 60 80 100 10.4-6 10.7-9 10.10-12 11.1-3 11.4-6 10 20 30 40 50
(Unit:1,000 customers)
Amount of disbursement (lhs)
Number of customers (rhs) 45 5,062.6 4,752.2 4,794.2 1,102.1 1,176.5 1,124.8 2,000 4,000 6,000 8,000 10.6 11.3 11.6 5,869.8 6,164.7 5,919.0
(Unit: 1,000 accounts) (Unit: Locations)
(JPY billion)
41 41 42 43
651.4 512.5 411.3 405.3 298.6 281.1 247.2 239.6 500 1,000
10.9 11.3 11.6
37.0% 14.1% 11.1% 7.9% 14.8% 3.5% 3.5% 8.2% Office Retail Residential Hotel Land Development Industrial/Parking/Other Other Portfolio (Diversified) 100.0% Total Category 59.0% 14.4% 12.4% 14.2% Kanto (mainly Tokyo) Kansai (mainly Osaka) Other Regions Portfolio (Diversified) 100.0% Total Region
(as at June 30, 2011)
Real estate non-recourse bonds Real estate non-recourse loans
(JPY billion) Balance has largely bottomed out. Expect increase through new disbursement while continuing reduction of non-performing
Restarted new business for first time in 2 years, selectively executing transactions from 4Q FY2010 Diversified portfolio with appropriate management
Amount of disbursement
39% FY2012 16% FY2013 45% FY2011
As at March 31, 2011
(Note) Treatment at maturity is on a case-by- case basis, including roll-over, extensions, collection of principal, LTV improvement through deal integration, equity injections from sponsors, voluntary sales to third parties etc.
6.9 5.8
5 10 15 20 10.4-6 10.7-9 10.10-12 11.1-3 11.4-6 Disbursements made at ave. LTV of
NIL
50 100 150 200 250 300 8.4-9.3 9.4-10.3 10.4-11.3 Non-Interest Income1 Interest Income (Consolidated, JPY billion)
1 Includes income on leased assets and installment receivables
Decrease in interest income due to full-scale
Non-interest income improved due to strong core
Both Institutional Group and Individual Group
44.6 33.8 31.2 25.8 16.1 26.1 50 100 10.4-6 11.1-3 11.4-6
Non-Interest Income1 Interest Income
1 Includes income on leased assets and installment receivables
(Consolidated, JPY billion) Trends in General and Administrative Expenses (12 months) Trends in General and Administrative Expenses (3 months)
5,718 11.3 5,558 6,066 11.6 10.6 Decrease in both personnel and non-personnel
Continued expense discipline and considering further
Strategic allocation of expenses to core businesses
22.9 20.8 18.6 13.4 13.5 12.5 54.3% 68.7% 51.8% 50 100 10.4-6 11.1-3 11.4-6 0% 10% 20% 30% 40% 50% 60% 70%
Personnel Expenses (lhs) Non-Personnel Expenses (lhs) Expense-to-Revenue Ratio (rhs) 109.7 105.9 87.7 69.0 62.3 55.0 48.9% 59.0% 69.2% 50 100 150 200 250 08.4-09.3 09.4-10.3 10.4-11.3 0% 10% 20% 30% 40% 50% 60% 70%
Personnel Expenses (lhs) Non-Personnel Expenses (lhs) Expense-to-Revenue Ratio (rhs) (Number of employees on consolidated basis)
10.7 18.8 4.5 3.0 0.2 1.3
4 8 12 16 20 10.4-6 11.1-3 11.4-6
(Consolidated, JPY billion)
Conservative, prudent provisioning in FY2010 Substantial reduction in net credit costs due to
Net credit costs substantially down even after
(Note) Recoveries of written-
included in net credit costs from 1Q FY2011 in accordance with the amendment to “Practical Guidelines on Accounting Standards for Financial Instruments.” No retroactive adjustments have been made for the previous fiscal years
Losses on write-off of loans/Losses on sale of loans Recoveries of written-off claims (from 1Q FY2011) Net provision of reserve for loan losses Others
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 08.4-09.3 09.4-10.3 10.4-11.3
Losses on write-off of loans/Losses on sale of loans Net provision of reserve for loan losses Others
0.57% 0.62% 0.55% 2.57% 2.95% 2.47% 2.00% 1.92% 2.33%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 10.4-6 11.1-3 11.4-6 Yield/Rate on Interest-Earning Assets1/Interest-Bearing Liabilities2 and Net Interest Margin (NIM) 1
Improvement over last quarter in net interest margin (NIM) and yield on interest-earning assets due to portfolio review
Slight increase in rate on interest-bearing liabilities over last quarter due to reduction of borrowed money, while deposit
Ample potential to further lower rate on interest-bearing liabilities under the current interest rate environment
13.8 18.1 16.7 20.8 5 10 15 20 25 10.4-6 11.4-6
0.5% 0.7% 12.1% 13.2% 0.0% 5.0% 10.0% 15.0% 10.4-6 11.4-6
Annualized ROE Annualized ROA Quarterly Cash Basis Net Income Quarterly Net Income (Consolidated, JPY billion)
1 Includes income on leased assets and installment receivables
Yield on interest-earning assets1 Rate on interest-bearing liabilities2 Net Interest Margin (NIM)1
2 Rate on interest-bearing liabilities in 2Q FY2007, prior to the subprime mortgage crisis, was 1.25%
Total reduction of non-core assets: JPY 314.5 billion Moving forward ahead
6.0% 6.0% 6.4% 6.8% 7.8% 0% 2% 4% 6% 8% 10% 10.3 10.9 10.12 11.3 11.6 Non-core Assets / Total Assets (%)
(Consolidated, JPY billion)
1 Non-core assets include real estate equity investment, asset-backed investment/securities,
CLO/ACPM/CFI, housing loan warehousing etc.
543.0 571.5 618.7 662.4 709.9 886.0
200 400 600 800 1,000 10.3 10.9 10.12 11.3 11.6 13.3 Plan
Divestible non-core assets Non-core assets held to maturity
*Reduce divestible non-core assets by approximately 50% by end of MTMP (March 31, 2013)
NPL balance steadily decreasing over past five quarters, with JPY25.0 billion reduction in 1Q FY2011 Increase in total claims contributed to NPL ratio falling to 6.04% at June 30, 2011, 74 basis points lower than March 2011 Continue to use conservative valuation standards for real estate collateral and maintain high coverage ratio 103.5 62.5 60.8 212.1 210.7 183.2 5.3 6.4 10.5 6.04% 6.78% 6.38% 50 100 150 200 250 300 350 400 450 500 10.6 11.3 11.6 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%
321.0 279.6 254.5
(as at June 30, 2011)
NPL ratio (rhs) Claims against bankrupt and quasi-bankrupt
Doubtful claims (lhs) Substandard claims (lhs)
(Non-consolidated, JPY billion)
(Ref.) Balance as at March 31, 2011
Partial Write- Off
Coverage Ratio
Reserves for Loan Losses
Collateral/ Guarantees
Balance
1 Interest repayment amount is net of refunds subject to GE indemnification
Debt Write-off Amount Reserves Interest Repayment Amount
10.2 13.4 13.8 16.6 19.6 23.7
10 20 30 40 50 1 . 1
1 . 4
1 . 7
1 . 1
2 1 1 . 1
1 1 . 4
9.8 11.7 10.0 11.8 13.5 15.1
10 20 30 40 50 10.1-3 10.4-6 10.7-9 10.10-12
15.4 18.0 15.9 31.1 21.1 18.2
10 20 30 40 50 1 . 1
1 . 4
1 . 7
1 . 1
2 1 1 . 1
1 1 . 4
26.6 3.1 4.0 1.6 1.6 9.0 1.7 3.1 2.1 2.3 2.8 1.9 1.8 2.5 1.9 3.2 2.7 1.8
Certain portion of Shinsei Financial’s portfolio is covered by GE indemnity contract
Peak level
(Unit: thousands)
A diversified individual deposit base from over 2.5 million retail banking customers Enhance efficiency of funding while continuing to maintain robust liquidity
(JPY billion）
0.59% 1.08% 0.81% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 08.4-09.3 09.4-10.3 10.4-11.3 Funding Costs
1 Funding costs equals the interest of interest-bearing liabilities divided by the average balance of interest-bearing liabilities, which
consist of deposits, negotiable certificates of deposit, debentures, borrowed money, corporate bonds, and other interest liabilities
82% 20% 18% 15% 85% 80% 0% 20% 40% 60% 80% 100% 09.3 10.3 11.3
Retail Deposits Institutional Deposits
1
Minimum Required Reserve Level Actual Liquidity Reserves
2
2 Minimum liquidity reserve required to keep cash surplus throughout a period of time based on cash gap analysis regarding ALM liquidity stress test
8.12% 7.76% 6.85% 6.97% 6.95% 6.35% 9.93% 9.76% 8.85% 8.94% 8.97% 8.35% 4% 6% 8% 10% 12% 10.3 10.6 10.9 10.12 11.3 11.6
Non-Perpetual Subordinated Debt and Bonds
Perpetual Subordinated Debt and Bonds
Preferred Securities
Tier I Capital Ratio
Change
Total Capital Adequacy Ratio
Deduction
Risk Weighted Assets
Total Capital
Amount Eligible for Inclusion in Capital (Tier II)
(Reference) 2010.6 Basic Items (Tier I) (Consolidated, JPY billion) Total Capital adequacy ratio Tier I capital ratio
1 Certain deductible items under Basel III are not deducted in the calculation of Common Equity Tier I ratio considering the phase-in application of deductions 2 Estimates based on Shinsei Bank’s calculations using documents disclosed by the these Basel Committee on Banking Supervision. Since actual figures will be calculated based on the
domestic rules after Basel III takes effect, there are factors that may cause estimates to diverge from actual figures
Earnings growth boosted total capital and improved capital ratios together with risk weighted asset reduction Capital quality improved with further increase in the Common Equity Tier I ratio (estimate) under Basel III Decline in risk weighted assets due to non-core asset divestiture, but decline has now largely bottomed out
Under new Basel III framework as of June 30, 2011 “common equity Tier I capital ratio” estimated to be 5.9%, 30 basis points up from 5.6% as of March 31, 2011 while Tier I capital ratio estimated to be 6.4% and TCAR estimated to be 9.5%1, 2
(JPY billion)
1Cash basis net income is calculated by excluding amortization of goodwill and other intangible assets, net of tax benefit
1 Net Interest Margin 2 Medium-Term Management Plan
Name Shinsei Bank, Limited Address Nihonbashi Muromachi Nomura Building, 4-3, Nihonbashi-muromachi 2-chome, Chuo-ku, Tokyo, Japan Established December, 1952 Representative Director, President Shigeki Toma Number of Employees : Shinsei Bank 1,913 Shinsei Bank and Consolidated Subsidiaries 5,558 Branches (Non-consolidated) Domestic : 30 branches including head
Number of Common Shares 2,750,346 thousand Capital Stock 512.2 billion yen Total Assets (Consolidated) 9,473.9 billion yen Deposits, Including NCDs (Consolidated) 5,777.3 billion yen Loans and Bills Discounted (Consolidated) 4,214.0 billion yen Securities (Consolidated) 2,703.3 billion yen Total Capital Adequacy Ratio 9.93% Non-consolidated Capital Adequacy Ratio 12.65%
(As of June 30, 2011)
Strategy Development and Business Execution Business Groups and Subsidiaries and Affiliates
Business Group and Head of Group Target Customer and Business
Asset Optimization Project Team
Shinki Shinsei Financial APLUS FINANCIAL Retail Banking Treasury Shinsei Trust & Banking Financial Institutions Shinsei Securities Markets Shinsei Investment Management
Major Subsidiaries and Affiliates
(Reports directly to president)
Executive Committee (2 Executive Directors, 19 Executive Officers and 1 Standing Statutory Auditor)
Representative Director, President and CEO Shigeki Toma Board of Directors (2 Executive Directors and 4 Outside Directors) Board of Statutory Auditors (1 Standing Statutory Auditor and 2 Outside Auditors) As of July 1, 2011
Risk Management Group （RD, CRO, SMEO） Yukio Nakamura Banking Infrastructure Group （SMEO） Michiyuki Okano Finance Group （CFO, SMEO） Shigeru Tsukamoto Individual Group （SMEO） Sanjeev Gupta RD: Representative Director, SMEO: Senior Managing Executive Officer, MEO: Managing Executive Officer. Global Markets Group （MEO） Akira Watanabe Corporate Staff Group （MEO） Masashi Yamashita
Consumer Finance Asset Management Advisory Showa Leasing Institutional Business Structured Finance Principal Transactions Real Estate Finance Corporate Support Division Healthcare Finance Division Corporate Public Sector
Institutional Group （SMEO） Hitomi Sato
0.0 5.0 10.0 15.0 20.0 25.0 30.0
9.9 8.2 6.6 5.3 4.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0
(JPY Trillion)
07.3 08.3 09.3 10.3 13.3 (Estimate)
1 1
11.3 (Estimate)
07.3 08.3 09.3 10.3 13.3 (Estimate) 11.3 (Estimate)
(JPY Trillion) Sales finance/credit card Consumer Finance Bank/shinkin (other financing) Bank/shinkin (card loan etc.) 27.4 19.8 16.8
(Source) FSA report based on data from Japan Financial Services Association
1 Estimates of market size at 11.3 and 13. 3 are Shinsei Financial’s estimates
(Source) Statistics from Bank of Japan and Japan Financial Services Association
1 1
Japanese UPL market has shrunk significantly due to revised
Although bank borrowing is also declining due to slumping
Decline at consumer finance companies is expected to
Bank card loans will bottom out due to megabanks ramping
Consumer finance companies’ UPL market has shrunk
However, market size expected to remain at around
Consumer Finance 25.1 23.5
1 Estimates of market size at 11.3 and 13. 3 are Shinsei Financial’s estimates
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Key factors in brand selection are (1) reliable company, (2) major player (3) company with good image (Shinsei Financial survey) Expect market expansion through capturing needs of potential UPL users with the reliability and peace-of-mind of bank-based business Shinsei will become more familiar presence as the first bank in Japan to offer UPL services through a large-scale unmanned branch
Transfer of the network enables huge expansion of outlets for Shinsei Bank card loan business
Potential Bank-based UPL users
Market Expansion
Base Target
(Interest rate)
Current consumer finance users Convenience
23.6 516.7 34.2 10.0 20.5 49.5 56.8 60.6 1.4
72.5 55.0 79.4 512.2
Basic Items (Tier I) Capital Stock 476.2 512.2 Capital Surplus 43.5 79.4 Retained Earnings 12.4 70.5 Treasury Stock (-) 72.5 72.5 Expected income distribution (-)
Securities (-)
Stock Acquisition Rights 1.6 1.3 Minority Interests in Consolidated Subsidiaries 168.9 60.2 Preferred Securities Issued by Foreign SPC 159.8 56.7 Goodwill (-) 57.8 47.5 Other Intangible Assets Acquired in Business Consolidation (-) 25.2 19.4 Gain on Sale of Securitization (-) 9.4 9.7 50% of Expected Loss Provision Shortfall (-) 46.3 38.7 Total Tier I 490.7 533.2 Step-up Preferred Securities 83.4 23.5
9.76% 7.76% 649.9 98.6 231.8 231.8 193.5 28.8 222.4 9.4
Supplementary Items (Tier II) General Reserve for Loan Losses 10.9 9.3 Subordinated Debt and Bonds 257.7 212.1 Perpetual Subordinated Debt and Bonds 38.0 28.6 Non-Perpetual Subordinated Debt and Bonds 219.6 183.4 Total 268.7 221.5 Amount Eligible for Inclusion in Capital 268.7 221.5 Deduction 114.0 103.0 Total Capital 645.4 651.7 Tier I Capital Ratio 6.35% 9.93% Capital Adequacy Ratio (Domestic Standard) 8.35% 8.12% (Consolidated, JPY billion)
6.4% 6.2% Tier I Capital Ratio (estimate) 9.5% 9.3% Capital Adequacy Ratio (estimate) 5.6% 2011.3 2011.6 Common Equity Tier I Capital Ratio (estimate) 5.9% (Reference: Basel III Estimate1)
1 Certain deductible items under Basel III are not deducted in the calculation of Common
Equity Tier I ratio considering the phase-in application of deductions. Estimates based on Shinsei Bank’s calculations using documents disclosed by the these Basel Committee on Banking Supervision. Since actual figures will be calculated based on the domestic rules after Basel III takes effect, there are factors that may cause estimates to diverge from actual figures
(%)
Number of common shares (thousands) SATURN IV SUB LP (JPMCB 380111)
Deposit Insurance Corporation of Japan
THE RESOLUTION AND COLLECTION CORPORATION
MORGAN STANLEY & CO. INC
GOLDMAN, SACHS & CO. REG
SATURN JAPAN III SUB C.V. (JPMCB 380113)
SHINSEI BANK, LIMITED
J.P. MORGAN CLEARING CORP-CLEARING
JAPAN TRUSTEE SERVICE BANK, LTD. (TRUST ACCOUNT)
SSBT OD05 OMNIBUS ACCOUNT-TREATY CLIENTS
Total (including treasury shares)
(Note) 1. As of March 31, 2011, a group of investors, including affiliates of J.C. Flowers & Co. LLC., holds 734,429,693 common shares or 27.67% of Shinsei’s outstanding common shares, excluding treasury shares 2. As of March 31, 2011, in total, the Deposit Insurance Corporation and the Resolution and Collection Corporation hold 469,128,888 common shares or 17.67% of Shinsei’s outstanding common shares, excluding treasury shares
(as of March 31, 2011) (Note) 1. “Japanese Financial Institutions and Insurance Companies” includes the Resolution and Collection Corporation 2. “Other Japanese Corporations” includes the Deposit Insurance Corporation 3. “Japanese Individuals and Other” includes treasury shares
Issuance of 690 million common shares increased Shinsei’s capital by JPY 71.8 billion in March 2011 A group of investors including affiliates of J.C. Flowers & Co. LLC. holds 27.67% of common shares (excluding treasury
Deposit Insurance Corporation and the Resolution and Collection Corporation hold 17.67% of common shares (excluding
Monitoring Period Common Equity Tier I Ratio Tier I Capital Ratio Capital Adequacy Ratio Source: Basel Committee on Banking Supervision (BCBS) Common Equity Tier I Other Tier I Tier II
(Unit : %) Capital Buffer
Bank Financial Strength Rating (BFSR)/ Bank Fundamental Strength Rating
(As of August 31, 2011)
1 On August 24, 2011, Moody's downgraded ratings of most rated Japanese banks including Shinsei Bank, following its downgrade of Japanese
Government Bond (JGB) ratings to Aa3 from Aa2. Moody’s commented in their press release, "The rating downgrades primarily reflect the combined impact of the change in the rating of the Government of Japan -- as a supporting entity -- and Moody's reduced assumptions for government support to the banking system in a stress scenario. Specifically, the rating actions reflect 1) our concern that, notwithstanding continued strong government willingness to support the banking system, there is an increasing risk that the government's capacity to provide support to banks in a future crisis has diminished; and 2) our assumption that under conditions of extreme stress, the authorities will become increasingly selective in their distribution of support, with a bias in favor of the most systemically important banks."
Exposure to affected areas is limited comparative to
Total of JPY6.1 billion in earthquake-related credit costs
Total of JPY0.6 billion in other impairments in credit
(As at March 31, 2011)
(Consolidated, JPY billion)
1 Derivatives and credit trading within Shinsei Bank 2 Includes housing loans purchased from Shinsei Financial and card loans issued by Shinsei
Bank
3 Market and Investment Banking Group, before organizational changes were made
The above description of Shinsei’s medium-term plan contains forward-looking statements regarding the intent,
Unless otherwise noted, the financial data contained in these materials are presented under Japanese GAAP. The
Information concerning financial institutions other than the Company and its subsidiaries are based on publicly
These materials do not constitute an invitation or solicitation of an offer to subscribe for or purchase any