SBI Shinsei Bank : (Amendments reflected) Notice Regarding Support to TOB for Shares of SBI Shinsei Bank by SBI Regional Bank Holdings Co., Ltd., Controlling Shareholder, and Recommendation for Application for the TOB

INFORMATION

For Immediate Release

Company Name: SBI Shinsei Bank, Limited

Name of Representative: Katsuya Kawashima

President and CEO

(Code: 8303, TSE Standard Market)

Notice Regarding Support to TOB for Shares of SBI Shinsei Bank

by SBI Regional Bank Holdings Co., Ltd., Controlling Shareholder, and

Recommendation for Application for the TOB

Tokyo (Friday, May 12, 2023) --- SBI Shinsei Bank, Limited (hereinafter, "SBI Shinsei Bank") hereby announces that its board of directors resolved today to express its opinion in support of the takeover bid ("TOB") by SBI Regional Bank Holdings Co., Ltd., its controlling shareholder (the parent company) ("Bidder") for the common shares of SBI Shinsei Bank ("Shares") and to recommend its shareholders to tender their shares in the TOB, as below.

The above-mentioned resolution of the board of directors was made on the presupposition that, after the TOB and subsequent series of procedures, the Bidder, the Deposit Insurance Corporation of Japan ("DICJ"), and the Resolution and Collection Corporation ("RCC") are intended to be the only remaining shareholders of SBI Shinsei Bank and that the Shares are scheduled to be delisted.

1. Overview of the Bidder

(1)	Name	SBI Regional Bank Holdings Co., Ltd.
(2)	Address	6-1, Roppongi 1-chome,Minato-ku, Tokyo
(3)	Name and Title of	Representative Director: Shumpei Morita
Representative
		Management and administration of companies that may be
		made subsidiaries under the Banking Act and other operations
(4)	Description of Business	incidental to such operations, as well as operations that may
		be conducted by a bank holding company under the Banking
		Act.
(5)	Capital Amount	30.1 billion yen (As of March 31, 2023)
(6)	Date of Incorporation	August 25, 2015
(7)	Large Shareholder and
	Shareholding Ratio	SBI Holdings, Inc. ("SBIHD")		100%
	(As of March 31, 2023)
(8)	Relationship between Bidder and SBI Shinsei Bank
	Capital Relationship	The Bidder owns 102,159,999 Shares (Ownership Ratio (Note
	1): 50.04%).
		As of April 1, 2023, 27 officers and employees are seconded
		from SBIHD Group to 5 companies of SBI Shinsei Bank Group,
	Personnel Relationship	and 34 officers and employees are seconded from SBI Shinsei
		Bank Group to 8 companies of SBIHD Group (there is no
		concurrent secondee) (Note 2).
		The following are transactions between SBI Shinsei Bank and
		SBIHD:
		⚫ SBI Shinsei Bank is a shareholder of Regional Revitalization
		Partners Co., Ltd., and SBI PE	Holdings Co., Ltd.,
	Transactional	subsidiaries of SBIHD;
	Relationship	⚫ SBI Shinsei Bank invests in FinTech Business Innovation
		LPS, SBI AI&Blockchain LPS, SBI 4&5 Investment Limited
		Partnership, and SBI Regional Business Succession
		Investment No. 2 Limited Partnership established and
		managed by SBI Investment Co.,	Ltd., a subsidiary of
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SBIHD; and

• SBI Shinsei Bank has loan transactions with SBIHD, SBI Africa Co., Ltd., SBI Estate Finance Co.,Ltd., and SBI LYHOUR BANK PLC.

The Bidder is a controlling shareholder (the parent company) of SBI Shinsei Bank.

Status as a Related Party

SBIHD, the parent company of the Bidder, is the parent company of SBI Shinsei Bank.

(Note 1) "Ownership Ratio" is defined in "(i) Overview of the TOB" in "(2) Grounds and Reasons for the Opinion on the TOB" in "3. Details of, and Grounds and Reasons for, the Opinion on the TOB" below.

(Note 2) "SBIHD Group" and "SBI Shinsei Bank Group" are defined in "(ii) Background, purpose and decision-making process of the Bidder's decision to implement the TOB" in "(2) Grounds and Reasons for the Opinion on the TOB" in "3. Details of, and Grounds and Reasons for, the Opinion on the TOB" below. The same applies hereinafter.

2. Tender Offer Price 2,800 yen per Share

3. Details of, and Grounds and Reasons for, the Opinion on the TOB

(1) Details of the Opinion on the TOB

At the meeting of the board of directors held today, SBI Shinsei Bank expressed its opinion in support of the TOB based on the grounds and reasons described in "(2) Grounds and Reasons for the

Opinion on the TOB" below and resolved to recommend its shareholders to tender their shares in the

TOB.

The above-mentioned resolution of the board of the directors of SBI Shinsei Bank was made by the process specified in "(viii) Approval of the majority of directors of SBI Shinsei Bank without conflicts of interest and the opinion of non-objection of all auditors without conflicts of interest" in "(6) Measures to Ensure the Fairness of the TOB such as the Measures to Ensure the Fairness of the Tender Offer Price and the Measures to Avoid Conflicts of Interests" below.

(2) Grounds and Reasons for the Opinion on the TOB

The description about the Bidder in this section are based on the explanations provided by the Bidder.

1. Overview of the TOB
   The Bidder is a stock company established on August 25, 2015 for the primary purpose of strengthening the profitability of regional financial institutions and enhancing their corporate value through direct investment in regional financial institutions, utilizing the products, services, and know-how of the companies that belong to SBIHD Group and the companies in which SBIHD Group invests. As of the date of this press release, all of its outstanding shares are owned by SBIHD. As of the date of this press release, the Bidder owns 102,159,999 Shares (Ownership Ratio (Note): 50.04%) and consolidates SBI Shinsei Bank as its subsidiary. As of the date of this press release, SBIHD owns no Share directly.
   As described in "(ii) Background, purpose and decision-making process of the Bidder's decision to implement the TOB" below, SBIHD and the Bidder (collectively, SBIHD and the Bidder, "SBIHDs") have decided to implement the TOB at the meeting of the board of directors of SBIHD held today and in the resolution at the meeting of the board of directors of the Bidder as of today, as a part of transactions for the purpose of delisting of the Shares in order that the Bidder, DICJ and RCC will be the only remaining shareholders of SBI Shinsei Bank ("Transactions") by way of the Bidder acquiring all of the Shares (except for the Shares owned by the Bidder, the treasury shares owned by SBI Shinsei Bank, and the Shares owned by DICJ (26,912,888 shares, Ownership Ratio: 13.18%) and RCC (20,000,000 shares, Ownership Ratio: 9.80%) (collectively, the Shares owned by DICJ and RCC, "Untendered Shares").
   (Note 1) "Ownership Ratio" refers to the ratio (rounded to the second decimal place; unless otherwise stated, the same shall apply in the calculation of ratios) to the number of shares (204,144,971 shares), which is obtained by deducting the treasury shares owned by SBI Shinsei Bank as of March 31, 2023 (889,718 shares) from the total
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number of outstanding shares of SBI Shinsei Bank as of March 31, 2023 (205,034,689 shares), as stated in the "Financial Results for FY 2022 [Japanese GAAP] (Consolidated)" announced by SBI Shinsei Bank today ("Financial Results of SBI Shinsei Bank"). The same shall apply hereinafter.

Also, on the TOB, SBIHD executed an agreement as of today, with DICJ, RCC and SBI Shinsei Bank, concerning the treatment of public funds injected into SBI Shinsei Bank ("Four Party Agreement") (for details, please see "(ii) Background, purpose and decision-making process of the Bidder's decision to implement the TOB"), and agreed on the treatment of public funds after Transactions. In addition, on the TOB, SBIHC executed a memorandum of understanding on the Four Party Agreement ("Shareholders MOU") with DICJ and RCC as of today, and agreed that DICJ and RCC would not apply to the TOB for the Untendered Shares, provided that the board of directors of SBI Shinsei Bank resolved and announced its support and recommendation for application for the TOB and it would not withdraw or amend such resolution, and that DICJ and RCC would exercise their voting rights, which support a proposal on the Share Consolidation (as defined in "(5) Policy on Organizational Structuring, Etc. After the TOB (Matters Related to the So-CalledTwo-Tier Takeover Strategy)"; The same shall apply hereinafter.) to be presented at an Extraordinary Shareholders' Meeting (as defined in "(5) Policy on Organizational Structuring, Etc. After the TOB (Matters Related to the So-CalledTwo-Tier Takeover Strategy)"; The same shall apply hereinafter.) in order to implement a series of procedures to make the shareholders of SBI Shinsei Bank only the Bidder, DICJ and RCC ("Squeeze-out Procedures") as stated in "(5) Policy on Organizational Structuring, Etc. After the TOB (Matters Related to the So-CalledTwo-Tier Takeover Strategy)" below. For details of the Four Party Agreement and the Shareholders MOU, please see "4. Matters Concerning Material Agreements on the TOB."

Since SBIHDs attempt to delist the Shares in order that the Bidder, DICJ and RCC will be the only remaining shareholders of SBI Shinsei Bank by the TOB, the maximum number of shares to be purchased is not set in the TOB. Further, as described in "(ii) Background, purpose and decision-making process of the Bidder's decision to implement the TOB" below, SBIHDs believes that making the Shares of SBI Shinsei Bank delisted by the TOB will not only contribute to the sustained improvement of the business valuation of SBIHD Group, including SBI Shinsei Bank Group, but also be beneficial to minority shareholders of SBI Shinsei Bank who are granted the opportunity to sell their shares at a fair price. Therefore, the minimum number of shares to be purchased is not set in the TOB in order to ensure the implementation of such delisting. In this regard, in the TOB, in addition to the large ratio of the Shares owned by the Bidder (102,159,999 shares) (Ownership Ratio: 50.04%), which is the largest shareholder of SBI Shinsei Bank (as of March 31, 2023), DICJ (26,912,888 shares, Ownership Ratio: 13.18%) and RCC (20,000,000 shares, Ownership Ratio: 9.80%), which are the second- (as of March 31, 2023) and the third-largest (as of March 31, 2023) shareholders of SBI Shinsei Bank respectively, have also agreed not to apply for the TOB. Therefore, the ratio of the number of the Shares which are planned to be purchased (55,072,084 shares) is small in the TOB (Ownership Ratio: 26.98%), and if the minimum number of shares to be purchased is set in the TOB, the success of the TOB can be easily hindered by acquisition of a small number of shares through such means as third parties' purchase of the Shares. As a result, SBIHDs believe that it would make the success of the TOB unstable and ultimately not be of benefit to minority shareholders of SBI Shinsei Bank who wish to sell their shares through the Transactions. Furthermore, the implementation of the Share Consolidation as a part of Squeeze-out Procedures requires a special resolution at the general meeting of shareholders as set forth in Article 309, Paragraph 2 of the Companies Act (Act No. 86 of 2005, as amended, "Companies Act"). However, the number of voting rights (1,021,599) relating to the Shares owned by the Bidder (102,159,999 shares, Ownership Ratio: 50.04%) and the number of voting rights (DICJ: 269,128, RCC: 200,000) relating to the Shares owned by DICJ and RCC (DICJ: 26,912,888 shares, (Ownership Ratio: 13.18%), RCC: 20,000,000 shares, (Ownership Ratio: 9.80%)) who have agreed with SBIHD as to the exercise of voting rights which support a proposal on the Share Consolidation to be presented at the Extraordinary Shareholders' Meeting will total (1,490,727) at least 2/3 of the number of the total voting rights (2,041,449) relating to the number of shares (204,144,971 shares) calculated by deducting the number of the treasury shares owned by SBI Shinsei Bank as of March 31, 2023 (889,718 shares) from the total number of outstanding shares of SBI Shinsei Bank as of March 31, 2023 (205,034,689 shares) which are listed on the Financial Results of SBI Shinsei Bank. Based on these facts, it is considered that Squeeze-out Procedures will be certainly carried out without setting the minimum number of shares to be purchased in

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the TOB.

As indicated above, since neither the maximum nor minimum number of shares to be purchased has been set in the TOB, the Bidder will purchase all of the share certificates, etc. for which an application for sale was made in response to the TOB.

The Bidder intends to take SBI Shinsei Bank private in order that the Bidder, DICJ and RCC will be the only remaining shareholders of SBI Shinsei Bank, and if failing to acquire all of the Shares (except for the Shares owned by the Bidder, the treasury shares owned by SBI Shinsei Bank and the Shares owned by DICJ and RCC) in the TOB, plans to acquire all of the Shares (except for the Shares owned by the Bidder, the treasury shares owned by SBI Shinsei Bank, and the Shares owned by DICJ and RCC) by implementing Squeeze-out Procedures after the success of the TOB. Although the Shares are listed on the Standard Market of Tokyo Stock Exchange, Inc. ("TSE") as of today, the Shares may, as described in "(4) Possibility of Delisting and Reasons Therefor" below, be delisted through prescribed procedures in accordance with the Delisting Criteria of TSE depending on the result of the TOB. Also, even if the Shares do not meet such criteria at the time of the success of the TOB, as described in "(5) Policy on Organizational Structuring, Etc. After the TOB (Matters Related to the So-CalledTwo-Tier Takeover Strategy)" below, the Bidder plans to carry out Squeeze-out Procedures after the success of the TOB. In such case, the Shares will be delisted through prescribed procedures in accordance with the Delisting Criteria of TSE.

1. Background, purpose and decision-making process of the Bidder's decision to implement the
   TOB
   SBI Shinsei Bank has been explained by the Bidder about the background, purposes, and its decision-making process to implement the TOB, as follows.
   SBIHD, the wholly-owning parent company of the Bidder, was established in July 1999 as a subsidiary of Softbank Finance Corporation (currently SoftBank Corp.) to start venture capital business. In December 2000, it listed its shares on the Nasdaq Japan market of the Osaka Securities Exchange and then on the First Section of TSE in February 2002. In June 2003, as a result of the merger with E*TRADE Japan K.K., E*TRADE SECURITIES Co., Ltd. (currently SBI SECURITIES Co., Ltd., "SBI Securities") became its subsidiary. In July 2005, it changed the company name to SBI Holdings, Inc. and split its business such as fund management business and make them succeeded by Softbank Ventures, Inc. and changed that company name to Softbank Investment Co., Ltd. (currently SBI Investment Co., Ltd.). In August 2006, it dissolved its capital ties with SoftBank Corp.
   SBIHD and the business group that consists of its subsidiaries (563 companies as of December 31, 2022) and equity method affiliates (60 companies as of the same date) (excluding SBI
   Shinsei Bank Group, "SBIHD Group") are operating the business focusing on: "Financial Services Business" that focuses on business related to securities, banking, and insurance; "Asset Management Business" that provides investment management and advisory services, including establishment, offering, and management of investment trust; "Investment Business" that focuses on private equity business that manages venture capital fund and others; "Crypto- asset Business" that operates crypto-asset exchange business and other related business; and
   "Non-financial Business" that encompasses: Biotechnology, Healthcare & Medical Informatics business, which promotes the manufacturing and sales of pharmaceuticals, health foods, and cosmetics, as well as digitalization of healthcare data and use of healthcare big data; Web 3.0- related business that provides platforms for sales of NFT (Non-Fungible Token) based on blockchain technology and traceability services; and export of used cars to the African region and provision of incidental services.
   Currently, SBIHD is pursuing formulation of alliances with numerous companies and expansion of various business areas, including digital areas such as financial services for smartphones. Furthermore, in addition to reinforcing relationships with regional financial institutions in order to contribute to regional revitalization as a social mission, SBIHD established a presiding company that promotes regional revitalization (Regional Revitalization Partners Co., Ltd. ("Regional Revitalization Partners")) with several partner companies and engages in: providing regional financial institutions with uniform systems; providing functions that promote revitalization of local economies; and establishing companies that invest in or extend loans to venture companies.
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On the other hand, the Bidder was established under the umbrella of SBIHD Group companies on August 25, 2015 under the company name ER Six Co., Ltd. Subsequently, the Bidder changed its company name to SBI Bank Holdings, Inc. in July 2019 and then to SBI Regional Bank Holdings, Co., Ltd. in April 2020, which has remained unchanged since. On October 11, 2022, the Bidder obtained from the Financial Services Agency the authorization for bank holding company under Article 52-17 of the Banking Act (Act No. 59 of 1981, as amended; the same applies hereinafter the "Banking Act"). From October 12, 2022 to October 19, 2022, the Bidder acquired the Shares through trading on the market, held 102,159,999 Shares (Ownership Ratio: 50.04%: Ownership Ratio at the Timing (Note): 50.05%) on October 19, 2022, and became a bank holding company on October 21, 2022 when the same-day settlement of the acquired Shares completed. The Bidder is engaged in (i) the management and administration of banks and companies that may be made subsidiaries under the Banking Act; (ii) all operations incidental and related to the operations in (i); and (iii) other operations that a bank holding company may engage in under the Banking Act, in addition to the operations in (i) and (ii). In order to improve the profitability of SBI Shinsei Bank, the Bidder is promoting cooperation with companies belonging to SBIHD Group, including SBI Shinsei Bank Group, as well as with business partners and investee companies of SBIHD Group, including SBI Shinsei Bank Group. (Note) "Ownership Ratio at the Timing" means the ratio to the number of shares (204,119,088

shares) obtained by deducting the number of treasury shares owned by SBI Shinsei Bank as of September 30, 2022 (54,915,601 shares) from the total number of outstanding shares of SBI Shinsei Bank as of the same date, as stated in the "Quarterly Securities Report" submitted by SBI Shinsei Bank on November 21, 2022 (259,034,689 shares).

On the other hand, SBI Shinsei Bank was established on December 1, 1952 as "The Long-Term Credit Bank of Japan, Limited" under the Long Term Credit Bank Act (Act No. 187 of 1952, as amended; the same applies hereinafter the "Long Term Credit Bank Act"). Subsequently, along with the rapid growth of the Japanese economy, its business expanded and the Shares were successfully listed on the First Section of TSE and the First Section of the Osaka Exchange in April 1970. After that, the rapid increase in loans to specific industries such as real estate and non-banks in the bubble economy after 1985 resulted in a large amount of non-performing loans due to the subsequent collapse of the bubble economy. As a result, on October 23, 1998, SBI Shinsei Bank became subject to a decision on the commencement of special public management under Article 36, Paragraph 1 of the Act on Emergency Measures for the Revitalization of the Financial Functions (Act No. 132 of 1998, as amended; the same applies hereinafter the "Financial Revitalization Act") and a decision on the acquisition of shares under Article 38, Paragraph 1 of the Financial Revitalization Act. On October 28 of the same year, all of the Shares and the Second Preferred Shares (Note 1) of SBI Shinsei Bank issued and outstanding at that time were acquired by DICJ (Note 2) under Article 39, Paragraph 1 of the Financial Revitalization Act. Then, the Shares were delisted on October 24, 1998.

On March 1, 2000, New LTCB Partners C.V. ("Partners") (Note 3) acquired from DICJ the Shares it held (Note 4), and the special public management ended on the same day. In the Share Purchase Agreement dated February 9, 2000 between Partners, SBI Shinsei Bank and DICJ, which was executed upon the acquisition of the Shares by Partners, it was agreed that if SBI Shinsei Bank makes an application for undertaking of shares under Article 4, Paragraph 2 of the Act on Emergency Measures for Early Strengthening of Financial Functions (Act No. 143 of 1998, as amended) ("Application for Undertaking") after the acquisition of the Shares by Partners, DICJ shall acquire non-voting preferred shares newly issued by SBI Shinsei Bank subject to the approval from the Financial Reconstruction Commission. Thus, SBI Shinsei Bank made an Application for Undertaking on March 3, 2000, and on March 31 of the same year, RCC, all of whose outstanding shares were held by DICJ, undertook 600 million of the Third Class B Preferred Shares of Shinsei Bank, Limited ("Third Preferred Shares") for 240 billion yen in total (400 yen per share) (Note 5).

Subsequently, SBI Shinsei Bank changed its name from "The Long-Term Credit Bank of Japan, Limited" to "Shinsei Bank, Limited" in June 2000 and successfully relisted on the First Section of TSE in February 2004. Then, in April 2004, SBI Shinsei Bank converted itself from a long-term credit bank under the Long-Term Credit Bank Act to an ordinary bank under the Banking Act in accordance with the Act on Mergers and Conversions of Financial Institutions (Act No. 86 of

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