FY2021

1st Quarter

Financial

Results

Overview

August 2, 2021

Copyright © 2021 Aozora Bank, LtdAll Rights Reserved.

1st Quarter Financial Highlights

Strong progress towards the full-year forecast

Net revenue

Business profit

Profit attributable to owners of parent

26.7 billion yen

(5.4 billion yen increase year-on-year, progress rate: 28%)

13.4 billion yen

(4.9 billion yen increase year-on-year, progress rate: 32%)

11.5 billion yen

(4.1 billion yen increase year-on-year, progress rate: 39%)

Key points

  • Net interest income was approximately the same as 4Q of FY2020, while it declined by 0.5 billion yen year-on- year
  • Non-interestincome increased by 5.9 billion yen year-on-year, mainly due to strong customer-related income, including gains from distressed loan-related and buyout-related limited partnerships, fee income from GMO Aozora Net Bank, and earnings from the sale of investment products to retail customers
  • Credit-relatedexpenses were a net reversal of 2.0 billion yen, mainly due to reversals of the Bank's general loan loss reserves as a result of improvements in the credit ratings of previously Need Attention overseas exposures and the repayment of overseas real-estatenon-recourse loans associated with a recovery in the U.S. real estate market

Dividend for 1Q: 32 yen per common share (25% of the full-year dividend forecast of 128 yen)

(Note) Unless otherwise stated, all amounts stated in 1 billion yen have been rounded down to the nearest 0.1 billion yen.

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1

PL summary

  • Net revenue, business profit and profit attributable to owners of parent all increased significantly compared to the previous year

FY2020

FY2021

Change B - A

Apr.-Jun.

Apr.-Jun.

Amount

%

(billion yen)

A

B

Net revenue

21.3

26.7

+5.4

+25.5%

Net interest income

12.4

11.8

-0.5

Non-interest income

8.9

14.9

+5.9

General & administrative expenses

-12.8

-13.8

-1.0

Gains/losses on equity method investments

-

0.5

+0.5

Business profit

8.5

13.4

+4.9

+58.2%

Credit-related expenses

0.1

2.0

+1.8

Gains/losses on stock transactions

1.0

0.0

-1.0

Ordinary profit

8.7

15.6

+6.8

+78.5%

Extraordinary profit/loss

-

-

-

Profit before income taxes

8.7

15.6

+6.8

+78.5%

Taxes

-1.9

-4.4

-2.5

Gains/losses attributable to non-controlling interests

0.6

0.3

-0.2

Profit attributable to owners of parent

7.4

11.5

+4.1

+55.1%

FY2021

Full-yearProgress

Forecast

97.0 28%

42.5 32%

42.5 37%

30.0 39%

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2

Net interest income

  • Net interest income decreased by 0.5 billion yen year-on-year mainly due to lower interest and dividends on securities arising from lower foreign currency ETF balances, while it was maintained at approximately the same level as 4Q of FY2020
  • Lending margins (yield on loans - yield on funding) increased by 3 bps compared to 4Q of FY2020

FY2020

FY2021

Change

Apr. - Jun. Apr. - Jun.

B - A

(billion yen)

A

B

Net interest income

12.4

11.8

-0.5

Interest income

18.2

15.6

-2.6

Interest on loans and discounts

12.6

10.8

-1.8

Interest and dividends on securities

5.4

4.5

-0.9

Other interest income

0.1

0.2

+0.0

Interest expenses

-5.8

-3.7

+2.1

Interest on deposits and NCDs

-1.5

-1.4

+0.1

Interest on debentures and bonds

-0.5

-0.6

-0.0

Interest on borrowings and rediscount

-0.6

-0.3

+0.2

Other interest expenses

-0.6

-0.2

+0.4

Interest on swaps

-2.4

-1.0

+1.3

(Note) Decreases in expenses are shown as positive.

FY2020

FY2021

Change

Apr. - Jun. Apr. - Jun.

B - A

A

B

Yield on total investments (A)

1.55%

1.26%

-0.29%

Yield on loans (B)

1.70%

1.44%

-0.26%

Yield on securities

1.97%

1.32%

-0.65%

Yield on funding (C)

0.49%

0.28%

-0.21%

Net interest margin (A)-(C)

1.06%

0.98%

-0.08%

Lending margin (B)-(C)

1.21%

1.16%

-0.05%

Lending margin

1.24%

1.21%

1.20%

1.16%

1.13%

1%

FY2020

FY2021

1Q

2Q

3Q

4Q

1Q

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3

Non-interest income

  • Non-interestincome was 14.9 billion yen, an increase of 5.9 billion yen year-on-year
    This result was approximately the same as 4Q of FY2020

FY2020

FY2021

Change

Apr.-Jun.Apr.-Jun.

B - A

(billion yen)

A

B

Non-interest income

8.9

14.9

+5.9

Net fees and commissions

1.9

2.4

+0.4

Net trading revenues

-0.7

6.4

+7.2

Gains/losses on bond transactions

7.9

1.5

-6.4

Net other ordinary income excl.

-0.2

4.5

+4.7

gains/losses on bond transactions

Incl. Gains from limited partnerships

0.8

3.5

+2.6

(Ref.) Ratio of gains/losses on

37%

6%

bond transactions to net revenue

Non-interest income

(billion yen)

15.5 14.9

8.9

10.6

11.3

0

FY2020FY2021

1Q

2Q

3Q

4Q

1Q

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Aozora Bank Ltd. published this content on 02 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2021 12:21:08 UTC.