AOZORA BANK, LTD. Annual Report (Integrated Report) 2021: Reference Part

Financial and Corporate Data

Corporate Data

Corporate History･････････････････････････････････････ 82

Business Activities････････････････････････････････････ 83

Organization Chart････････････････････････････････････ 84

Directors, Audit & Supervisory Board Members and

Executive Officers･･･････････････････････････････････ 85

Staff Profile･･････････････････････････････････････････ 85

Office Directory･･･････････････････････････････････････ 86

Business Network････････････････････････････････････ 87

Subsidiaries and Affiliated Companies･･･････････････････ 88

Management Support and Reinvigoration of Regional Economies･･･ 89

Risk Governance･････････････････････････････････････ 90

Compliance･･････････････････････････････････････････ 98

Policies･･････････････････････････････････････････････ 99

Financial Data

Consolidated Information

CONSOLIDATED BUSINESS RESULTS

Consolidated Financial Highlights [Five-Year Summary]･･･ 116

CONSOLIDATED FINANCIAL REVIEW

Consolidated and Equity-Method Companies･････････････ 117

Analysis of Business Results･･･････････････････････････ 117

Analysis of Financial Condition･････････････････････････ 119

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheet･･･････････････････････････ 121 Consolidated Statement of Income･･････････････････････ 122 Consolidated Statement of Comprehensive Income･･･････ 122 Consolidated Statement of Changes in Equity････････････ 123 Consolidated Statement of Cash Flows･･････････････････ 124 Notes to Consolidated Financial Statements･････････････ 125

INDEPENDENT AUDITOR'S REPORT････････････････････ 170

INCOME ANALYSIS (Consolidated)

Interest-EarningAssets and Interest-BearingLiabilities････ 175 Fees and Commissions････････････････････････････････ 175 Gains on trading account transactions･･･････････････････ 175 Other Ordinary Income･･････････････････････････････ 175

Non-Consolidated Information

NON-CONSOLIDATED BUSINESS RESULTS

Non-Consolidated Financial Highlights

[Five-YearSummary]･･････････････････････････････････ 176

NON-CONSOLIDATED FINANCIAL STATEMENTS

Non-Consolidated Balance Sheet (Unaudited)････････････ 177

Non-Consolidated Statement of Income (Unaudited)･･････ 178

Non-Consolidated Statement of Changes in Equity

(Unaudited)･････････････････････････････････････････ 179

INCOME ANALYSIS (Non-Consolidated)

Net Revenue, Business Profit･･････････････････････････ 180 Ratios･･･････････････････････････････････････････････ 180 Yield on Interest-EarningAssets, Interest Rate on

Interest-Bearing Liabilities, Net Yield/Interest Rate･･･････ 180 Average Balance of Interest-Earning Assets and

Interest-BearingLiabilities････････････････････････････ 181 Analysis of Interest Income and Interest Expenses････････ 182 Fees and Commissions･･･････････････････････････････ 183 Gains on trading account transactions･･･････････････････ 183 Other Ordinary Income････････････････････････････････ 184 General and Administrative Expenses･･･････････････････ 184

DEPOSIT OPERATIONS (Non-Consolidated)

Balance of Deposits･････････････････････････････････ 185 Balance of Time Deposits by Residual Period････････････ 186 Balance of Deposits by Depositor･･････････････････････ 186 Deposits per Office･･･････････････････････････････････ 186 Deposits per Employee････････････････････････････････ 186

LOAN OPERATIONS (Non-Consolidated)

Balance of Loans･････････････････････････････････････ 187 Balance of Loans by Residual Period････････････････････ 187 Ratio of Loans and Bills Discounted to

Debentures/Deposits･････････････････････････････････ 187 Loans per Office･･････････････････････････････････････ 187 Loans per Employee･･････････････････････････････････ 188 Loans to Small and Medium-SizedEnterprises (SMEs)･･ 188 Consumer Loans Outstanding･･････････････････････････ 188 Breakdown of Loans and Bills Discounted by Industry･････ 189 Risk-MonitoredLoans by Industry･･･････････････････････ 189 Balance of Loans and Bills Discounted,

Classified by Purpose････････････････････････････････ 190 Breakdown of Balance of Acceptances and Guarantees･･･ 190 Breakdown of Loans and Bills Discounted by Collateral････ 190 Breakdown of Collateral for Customers' Liabilities

for Acceptances and Guarantees･･････････････････････ 190 Write-Offof Loans････････････････････････････････････ 190 Allowance for Loan Losses･････････････････････････････ 191 Country Risk Reserve･････････････････････････････････ 191 Disclosed Claims under the Financial Reconstruction Law････ 191 Risk-MonitoredLoans･････････････････････････････････ 192 Reserve Ratios for Each Category of Borrower,

Based on Asset-Assessments･････････････････････････ 192 Asset-Assessment, Disclosed Claims, Write-Offs,

Reserves and Risk-Monitored Loans･･･････････････････ 193 SECURITIES (Non-Consolidated)

Balance of Securities Held････････････････････････････ 194 Balance of Securities by Residual Period････････････････ 194 Ratio of Securities to Debentures and Deposits･･･････････ 194

SECURITIES BUSINESS (Non-Consolidated)

Underwriting of Public Bonds･･･････････････････････････ 195 Over-the-Counter Sales of Public Bonds and

Securities Investment Trusts･･････････････････････････ 195 INTERNATIONAL OPERATIONS (Non-Consolidated)

Foreign Exchange Transactions････････････････････････ 196 Balance of Assets in International Operations････････････ 196

TRUST BUSINESS OPERATIONS (Non-Consolidated) Statement of Trust Assets and Liabilities･････････････････ 197 Balance of Money Trusts under Management････････････ 197 Balance of Securities Related to Money Trusts･･･････････ 198 Balance of Principal of Money Trusts by Trust Period･･････ 198 Balance of Loans and Securities Held in Money Trust by Type･･ 198

CAPITALIZATION (Non-Consolidated)

History of Capitalization･･･････････････････････････････ 199

Major Shareholders･･･････････････････････････････････ 199

Ownership and Distribution of Shares･･･････････････････ 199

Disclosure Based on Basel III Capital

Accord Pillar III-Market Discipline･････････････ 200 Disclosure Related to Remuneration･････････････ 226

Share Procedure Information･････････････････････ 228

Data Corporate and Financial Data Corporate and Financial

81

Data Corporate and Financial

Data Corporate

Corporate Data

Corporate History

April	1957	Established as The Nippon Fudosan Bank, Limited (capital: ¥1 billion) in accordance with the
		Long-Term Credit Bank Law
July	1964	Started foreign exchange business as an authorized foreign exchange bank
September		Listed stock on the Tokyo Stock Exchange
February	1970	Listed stock on the Osaka Securities Exchange
October	1977	Changed name to The Nippon Credit Bank, Ltd.
February	1994	Established The Nippon Credit Trust Bank, Ltd. (currently GMO Aozora Net Bank, Ltd.)
December	1998	Started special public management and terminated listing of stock on the Tokyo Stock Exchange
		and the Osaka Securities Exchange
September	1999	NCB Servicer Co., Ltd. (currently Aozora Loan Services Co., Ltd.), commenced servicer
		operations
September	2000	Ended special public management
January	2001	Changed name to Aozora Bank, Ltd.
June	2005	Established a subsidiary, Aozora Asia Pacific Finance Limited, in Hong Kong
July		Established New York Representative Office
April	2006	Converted from 'Long-Term Credit Bank' to an 'Ordinary Bank'
		Established Aozora Securities Co., Ltd.
November		Listed on the First Section of the Tokyo Stock Exchange
May	2007	Established Shanghai Representative Office
April	2009	Established Internet Branch (currently BANK Branch) and commenced Internet banking services
August	2012	Announced the Comprehensive Recapitalization Plan
March	2013	Launched Aozora Cash Card Plus (Visa debit)
		Established Aozora Regional Consulting Co., Ltd.
February	2014	Established Aozora Investment Management Co., Ltd.
May		Established Singapore Representative Office
January	2015	Established Aozora Real Estate Investment Advisors Co., Ltd.
June		Full repayment of public funds
December		Established a subsidiary, Aozora Europe Limited, in London
May	2016	Completed conversion to new Kanjo-kei core banking system
May	2017	Moved headquarters
		Established ABN Advisors Co., Ltd.
April	2018	Established Aozora Corporate Investment Co., Ltd.
July		GMO Aozora Net Bank, Ltd. commenced Internet banking services
October		Completed transfer of trust operations from GMO Aozora Net Bank, Ltd. and started concurrent
		trust operations
June	2020	Purchased an ownership stake in Orient Commercial Joint Stock Bank, a commercial bank
		based in Vietnam (making it an equity method affiliate of Aozora)
September		Aozora North America, Inc., the Bank's New York subsidiary, commenced finance operations

82 Annual Report 2021

Business Activities (As of July 1, 2021)

• Deposits Deposits
• 
  Checking accounts, savings accounts, time deposits, deposits-at-notice,non-residents' deposits in yen and deposits in foreign currencies

  Negotiable certificates of deposit

• Lending Loans
  Loans on deeds, loans on notes and overdraft Discount on promissory notes
• 
  Bankers' acceptances and discounts on commercial bills
• Securities investment business
  Public bonds, local bonds, corporate bonds, equity and other securities for cash reserves for payment of the deposit and fund management
• Domestic exchange
  Such services as money orders between branches of the Bank and those of other banks, collection of payments, etc.
• Foreign exchange
  Remittance to foreign countries and other foreign currency-related businesses
• Consignment of bonds
  Consignment business for soliciting or managing public bonds and issue agent or payment agent
• Trust operations
  Management of various trust assets including cash, securities, monetary claims and real estate
• Other services
• 1. Guarantee of liabilities (acceptances and guarantees)
  2. Lending of securities
  3. Underwriting of public bonds
  4. Over-the-countersales of securities investment trusts
  5. Trust business for secured corporate bonds
  6. Agency business
  7. • Revenue agency for Bank of Japan

1. ➁ Handling of funds for regional public entities, including those in Tokyo

2. Custody services
3. Interest rate, currency and other derivative transactions
4. Over-the-countersales of insurance products
5. Financial instruments intermediary business

Data Corporate and Financial

Data Corporate

83

Data Corporate and Financial

Data Corporate

Corporate Data

Organization Chart (As of July 1, 2021)

Audit & Supervisory

Shareholders

Board Members

Audit & Supervisory

Board

Board of Directors

Office of Audit &

Supervisory Board

Management

Committee

Chief Executive

Internal

Audit Div.

Officer

(CEO)

Asset Assessment Div.

Compliance &

Governance Unit

Human Resources Unit

Corporate

Strategy Unit

Head of

Compliance &

Head of Human

Head of

Corporate

EO in

charge

EO in

charge

Governance Unit

Resources Unit

Strategy

Unit

Business Strategy Div.

Office of

Sustainability

Digital Transformation Div.

Compliance Management Div.

Human Resources Div.

Corporate

Management

Corporate Administration &

Secretary

Div.

Service Div.

Retail

Institutional

Banking Group

Allied

Specialty

International

Financial

Trust

Finance

Technology

Operations

Credit

Risk

Integrated

Banking

Banking

Finance

Finance

Markets

Business

Group

Group

Group

Management

Risk

Group

Group

Group

Group

Group

Group

Group

Management

Business

Corporate

Advisory &

Group

Banking

Banking

Investment

Group

Group

Group

Chief

Chief

EO in

Chief

Chief

Financial

Technology

charge of

Credit Risk

Risk

Officer

Officer

Operations

Officer

Officer

Group Head

Group Head

Group Head

Group Head

Group Head

Group Head

Group Head

Group Head

Group Head

(CFO)

(CTO)

Group

(CCRO)

(CRO)

Retail

Strategic Investments Group

Treasury

Trust

Financial

IT Control Div.

Operations

Credit Div. I

Risk

Banking

Funding Div.

Business Div.

Control Div.

(Cyber Security

Planning

Management

Management

Group Head

Office)

Div.

Credit Div. II

Div.

Div.

Treasury

Financial

(Financial

Institutional Banking Management Div.

Syndication & Securitization Div.

Investment

Management

Application

Operations

Workout Div.

Advisor

Div.

Div.

Management

Management

(Business Innovation Office)

Office)

Div.

Div.

Appraisal Div.

(Facilitation of Financing Promotion Office)

Equity Investment Div.

Credit

Corporate

(Portfolio Management Innovation Office)

Customer

Investment

Communica-

Infrastructure

Corporate

(Regional Business Support Office I ·

GMO Aozora Net Bank, Ltd

Support Div.

Div.

tion Div.

Management

Banking

Regional Business Support Office II)

Div.

Service Div.

Retail

Market

Corporate

Corporate

M&A Advisory

Financial

Special

International

Business

Products Div.

Crisis

Service Div.

Business

Business

Div.

Institutions

Situations Div.

Business

Management

Div. VII

Div. II

Div. I

Management

Derivatives

Div.

Retail

Asian Business

Real Estate

Div.

Sales Div.

Banking Div.

Corporate

Corporate

Solutions Div.

Financial

Finance Div.

Business

Business

Institutions

International

Market

BANK Br.

Div. VIII

Div. III

Private Equity

Div. II

Global

Business Div.

Products

Investment Div.

Real Estate

Development

Aozora

Public

Strategic

Aozora

Structured

Overseas

Div.

Securities

Institutions

Finance Div.

Venture

Regional

Debt Div.

Representa-

Co., Ltd.

Div.

Business Div.

Consulting

tive Offices

Acquisition &

Co., Ltd.

Corporate

(New York,

Aozora

Project

ABN Advisors

Business

Shanghai,

Investment

Finance Div.

Co., Ltd.

[Aozora

Div. I

Singapore)

Management

Securities

Co., Ltd.

Aozora

Co., Ltd.]

Corporate

Aozora Asia

Corporate

Business

Pacific

Investment

[Aozora

Div. V

Finance

Co., Ltd.

Investment

Limited

Management

Aozora Loan

Co., Ltd.]

Services

Aozora

Co., Ltd.

Europe

Aozora

Limited

Real Estate

Aozora North

Investment

America, Inc.

Advisors

Co., Ltd.

[Branches]

Kansai Br., Nagoya Br., Fukuoka Br., Sendai Br., Hiroshima Br., Sapporo Br., Takamatsu Br., Kanazawa Br.

Shinjuku Br., Nihonbashi Br., Shibuya Br., Ueno Br., Ikebukuro Br., Yokohama Br., Chiba Br., Osaka Br., Umeda Br., Kyoto Br., Financial Oasis Jiyugaoka

84 Annual Report 2021

Directors, Audit & Supervisory Board Members and Executive Officers (As of July 1, 2021)

Directors and Audit & Supervisory Board Members		Executive Officers
Representative Director	Kei Tanikawa*		Senior Managing Executive Officers	Akira Sakai
and President				Masayoshi Ohara
				Fumihiko Hirose
Representative Directors	Koji Yamakoshi*			Takeshi Ito
and Deputy Presidents	Hideto Oomi*			Takashi Kato
Director and	Tomomi Akutagawa*		Managing Executive Officers	Masaki Onuma
Senior Managing Executive Officer				Tomoyuki Yamada
				Kazuhiro Yasuda
Directors	Shunsuke Takeda			Tetsuji Okuda
	Hiroyuki Mizuta
	Ippei Murakami		Executive Officers	Jun Shinozaki
	Tomonori Ito			Akemi Hashimoto
				Toru Takahashi
Standing Audit & Supervisory Board	Satoshi Hashiguchi			Hiroki Nakazato
Member				Hiroshi Suzuki
Audit & Supervisory Board Members	Kiyoto Hagiwara			Shu Takahashi
	Toraki Inoue			Yukiko Morita
				Naoko Tanaka
*Serving as Executive Officer concurrently				Takashi Hagio
				Jun Nakashima
				Hiroshi Kaneko

Staff Profile (As of March 31, 2021)

Number of Employees	Average Age	Average Years of Service	Average Yearly Salary
1,933 (125)	43.3	14.9	8,089 thousand yen

Notes: 1. The number of employees includes executive officers and locally hired staff overseas, but excludes temporary employees.

1. The figure in parentheses is the average number of temporary employees for the year.
2. The average yearly salary includes bonuses and pay other than fixed wages.

Data Corporate and Financial

Data Corporate

85