Established 1949
Number of Employees 2,126
(As of March 31, 2011)
Subsidiaries
Nagoya Lease Co., Ltd.
Nagoya Business Service Co., Ltd.
Meigin Real Property Research Co., Ltd.
Nagoya Card Co., Ltd.
Nagoya MC Card Co., Ltd.
THE BANK OF NAGOYA, LTD.
19-17 Nishiki 3-chome, Naka-ku,
Nagoya, 460-0003 Japan
Tel: 81 52 962 9520
Fax: 81 52 961 6605
http://www.meigin.com/
Domestic Branches
Number of Branches: 111 (As of March 31, 2011)
2 branches in Gifu
1 branch in Tokyo
1 branch in Osaka
2 branches in Shizuoka
105 branches in Aichi
(55 branches in Nagoya)
Overseas
Nantong Representative Office
Nantong Hotel 501,43 Qingnian Road East,
Nantong, Jiangsu, China.
Tel 86 513 83568650
Fax 86 513 83567445
Shanghai Representative Office
Room 1809, Shanghai International Trade Center,
2201 Yan-an Road (West), Shanghai China.
Tel 86 21 62754207
Fax 86 21 62759461
Contents
Message from the Management
1
Operating Environment
2
Operating Results (Nonconsolidated basis)
3
Target Performance Indicators
4
Medium- and Long-term Management Strategies
4
Issues to Address
5
Breakdown of Loans (Nonconsolidated basis)
Balance of problem loans
under the Banking Law (risk monitored loans)
Balance of problem loans
under the Financial Reconstruction Law
7
Unrealized Gains on Securities (Nonconsolidated basis)
9
Capital Adequacy Ratio
9
Rating
9
Organization of The Bank
10
Board of Directors and Corporate Auditors
11
Principal Shareholders
11
Independent Auditors’ Report
12
Consolidated Balance Sheets
13
Consolidated Statements of Income
15
Consolidated Statements of Changes in Net Assets
17
Consolidated Statements of Cash Flows
18
Notes to Consolidated Financial Statements
19
7
8
Message from the Management
We would first like to extend our sincere gratitude to all our stakeholders for their patronage to the Bank of
Nagoya and its Group.
We have created this annual report to explain the business situation and the operating results of the Bank of
Nagoya Group in fiscal 2010.
Firstly, while praying that the souls of those taken by the Great East Japan Earthquake may rest in peace, we offer
our deepest sympathies to everyone who has suffered hardship.
Under the current circumstances, there is now greater uncertainty regarding the future of Japan’s economy. Even
in Aichi Prefecture, where the Bank is based, factors such as the soaring price of raw materials, and difficulties in
procuring materials and ingredients are impacting a broad range of industries, particularly the manufacturing industry,
but also the food processing, distribution, services and other industries. Furthermore, considering that companies may
begin to have cash-flow problems and that there is a looming problem concerning nuclear power plants, there are some
concerns as to the future direction of the economy.
On the other hand, looking at the financial situation, this fiscal year saw moves towards the integration of regional
financial institutions and the Act Concerning Temporary Measures to Facilitate Financing for Small and
Medium-Sized Enterprises (SMEs) etc. was extended by one year.
Facing these financial and economic circumstances, fiscal 2011 will be the first year of our 18th management
plan, “Reform & Challenge—Aiming to be the Region’s Top Bank.” Under the catchphrase of “Top Bank in 5
Criteria,” We aim to become the bank that customers select as the region’s top bank.
In May, 2011, the Bank became the Chair Bank of the Second Association of Regional Banks. Moreover, upon
opening the Nantong Branch in Jiangsu Province, China, we plan to adopt the standard required for internationally
active banks, which will truly make this year a year of “reform.” The Bank too is working to reinvent itself with the
management and employees working together in the aim of fulfilling our corporate social responsibility as the leading
bank in the region and brings satisfaction to all.
We call upon your even stronger support in the future.
September 2011
Kazumaro Kato
Chairman
Yukio Yanase
President
1
Operating Environment
During the year under review the Japanese economy was on a gradual
recovery trend. However, the Great East Japan Earthquake struck on March 11
and its effect on the economy has been widespread. As a result, uncertainty
towards the future of the economy increased and for a short while a sharp fall in
stock prices and an appreciating yen were occurring concurrently.
In Aichi Prefecture as well, while before the earthquake, there were signs
of steady recovery observed here and there in the economy, depending on the
type of industry. After the earthquake, however, the price of raw materials and
fuel soared and it became difficult to procure parts and materials. Consequently,
the earthquake’s impacts are observed in a broad range of industries, particularly the manufacturing industry, but also
the food processing, distribution, services and other industries. Furthermore, considering that companies may begin to
have cash-flow problems and that there is an unfolding problem concerning nuclear power plants, there are some
concerns as to the future direction of the economy.
On the other hand, looking at the financial situation, this fiscal year saw significant changes such as the
integration of regional financial institutions and the announcement of a new regulatory proposal concerning bank
capital adequacy by the Basel Committee on Banking Supervision.
In addition, the Act Concerning Temporary Measures to Facilitate Financing for Small and Medium-Sized
Enterprises (SMEs) etc. was extended by one year, and banks are now required to provide a greater consultancy
function than before. As a regional financial institution, the Bank is putting its full energy into building relationships of
trust with greater sincerity and responding as best as possible to the customers’ needs.
Operating in this economic environment, in its banking operations, the Bank proactively implemented initiatives
to promote growth of the regional economy based on the new money-lending system by the Bank of Japan’s
“Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth.” Looking ahead, we
will continue to fulfill our corporate social responsibility and, through our various initiatives, conduct our banking
operations in a way that brings satisfaction to our customers.
2
Operating Results (Nonconsolidated basis)
The following five management policies of the Bank of Nagoya are based on
the Bank’s guiding precept of “fostering regional prosperity—which shall both
develop the Bank and bring happiness to bank employees,” and, together, they
express the overall image that the bank aspires to. They are as follows: (1) contribute
to the regional community, (2) strengthen our earnings power and ensure
thoroughness in risk management, (3) provide financial services that suit the needs
of the customers, (4) put compliance into practice, and (5) establish a free and
open-minded corporate climate. Through following these basic policies, the Bank is
further boosting its corporate value as a regional financial institution that contributes
to the prosperity of the regional society. By fulfilling this role, we are establishing unwavering support and trust from
all our stakeholders, first and foremost of whom are our shareholders.
On April 5, 2011, the former Securities and International Division was split and the International Division became
a stand-alone division. Aiming to strengthen the international operations function of the Bank, the newly established
International Division is promoting the Bank’s strong business relations in China and supporting the Banks expansion
into South East Asia.
After obtaining approval of the China Banking Regulatory Commission for incorporation of the Bank of Nagoya
in China, the Bank had been advancing its preparation to open the Nantong Branch, and it will officially open in the
first half of 2011 upon receiving approvals from financial authorities of Japan and China.
The Nantong Branch will be the Bank’s first overseas branch to open in 12 years. The Bank is the only regional
bank headquartered in the three prefectures of the Tokai region and the only one among member banks of the Second
Association of Regional Banks in Japan to have an overseas branch.
When the branch opens, it will initially offer depositing and financing in Japanese yen and U.S. dollars. Targeting
Nantong, the surrounding cities in Jiangsu Province, and the adjoining city of Shanghai, the branch will offer financing
services to customers conducting business in the region. After satisfying conditions such as years of operation and
profit position, the Bank plans to begin offering Chinese-yuan denominated transactions.
The Bank is looking forward to supporting business in China under our two-office organization there: the
Nantong Branch and the Shanghai Representative Office.
Recently, apart from our customers’ business concerns in China, the number of our customers doing business in
South East Asia, especially the ASEAN countries of Thailand, Vietnam and Indonesia, has been increasing. With
respect to our customers in the automobile industry, a major local industry in the Tokai region, there have been
numerous business projects in Thailand.
To respond to this trend, the Bank has established the “Asia Support Team,” within the International Division.
This is aimed to improve its business support system for the “Asia” area,
which now includes South East Asia in addition to China.
From November 2010, the Bank has also begun to handle money
transfers in Thai baht to support our customers’ needs to make payment in
Thai baht.
The Bank’s banking profit, which is a profit derived from its core
operations, increased by ¥1,749 million year on year to ¥9,522 million.
Although there was a decrease in total interest income due to decrease in
lending interest rate, expenses were reduced, and gain on sales of bonds
increased.
Ordinary profit fell by ¥1,078 million year on year to ¥5,296 million
mainly due to decrease in a gain on sales of stocks and other securities. Net
income fell by ¥275 million to ¥3,060 million.
3
Medium-and Long-term
Management Strategies
Target Performance Indicators
In our three-year 18th management plan, “Reform
& Challenge—Aiming to be the Region’s Top Bank,”
which started in April 2011, we have set targets for the
following management indices: capital adequacy ratio
(consolidated), Tier I ratio (consolidated), net income
(non-consolidated), overhead ratio, and number of
business financing customers. The targets are as follows:
Management index
(a) Top bank in customer satisfaction
• Getting the Bank of Nagoya brand
well-established with strong market penetration
• Strengthening of product and service offering
• Enhancement of sales infrastructure
(b) Top bank in action and response
• Speedy response to customer needs
• Strengthening of community ties through
improved relationships
• Strengthening sales and marketing function of
headquarters
(c) Top bank in proposal capability
• Strengthening of Asian business support
• Strengthening of consulting function
• Provision of services by a unified Nagoya Group
(d) Top bank in trustworthiness
• Maintenance of financial soundness
• Strengthening of CSR initiatives
• Giving greater importance to compliance
(e) Top bank in passion
• Strengthening of staff quality through personnel
development
• Cultivate mercantile mindset amongst entire staff
• Boost employee satisfaction
Target
(March 31, 2014)
Capital adequacy ratio
(consolidated)
12%
Tier I ratio
(consolidated)
10%
Net income
(non-consolidated)
In our three-year 18th management plan, “Reform
& Challenge—Aiming to be the Region’s Top Bank,”
which started in April 2011, our basic position is to treat
the next three years as a period to strengthen our
standing as to top regional bank in Aichi Prefecture and
promote reform towards further advancement. Our major
strategy is to achieve top bank status in the following
five criteria:
¥5 billion
Overhead ratio
70–74%
No. of business
borrowers
25,000 companies
4
Issues to Address
In the business environment surrounding the Bank, competition is expected to further intensify in the financing
market not just from local banks in the same region but also banks of other prefectures, including the mega banks.
However, regardless of what business environment we face, as the title of our management plan states, we aim to be
the region’s top bank and grow continually through carrying out reform and embracing challenges.
Out of the regional banks of Aichi Prefecture, we are already the top regional bank in terms of volume and staffed
locations. Over the next three years, we aim to strengthen our standing as to top regional bank in Aichi Prefecture and
promote reform towards further advancement. While strengthening our standing by boosting our brand and improving
customer ties, we will proceed with reforms aimed at future advancement. In these ways, we aim to be the top regional
bank of Aichi Prefecture in both name and reality.
Management Policy
1. Contribute to the regional community
As a regional financial institution, the Bank shall advance together with the regional community by bearing in mind the
public nature of bank operations, ensuring that customers’ savings are protected, and providing high quality financial
services that contribute to the sound development of medium and small-sized enterprise and improving the lives of the
local residents.
2. Strengthen our earnings power and ensure thoroughness in risk management
To maintain the trust of our depositors and shareholders, the Bank aims for sound management practices based on a
transparent management system. To realize this, we strive to strengthen our earnings power, ensure thoroughness in risk
management to maintain soundness of management, and strengthen our management base.
3. Provide financial services that suit the needs of the customers
The Bank strives to develop operations that energetically respond to changes in the environment and provide high
quality financial services that truly suit the needs of the customers. We also strive to disclose and explain the
details of the products and services we provide to the customers and provide the necessary information for
customers to make appropriate decisions.
4. Put compliance into practice
For the Bank, compliance is not limited to the adherence of laws and regulations; compliance also means
respecting a broad range of rules, and by doing so, raising soundness of management to ensure unshakable trust
from society. To this end, each and every director and employee puts compliance policies firmly into practice.
5. Establish a free and open-minded corporate climate
The Bank quickly and flexibly responds to the changing times to maintain and further strengthen the unshakeable
trust towards banks. To achieve this, while working to develop our personnel, we work to establish a vibrant
corporate culture that allows a free and open-minded exchange of opinion and spread it throughout the entire
organization.
5
The Bank’s Corporate Governance
At the Bank of Nagoya, enhancing corporate governance is one of the most important management challenges.
While striving to further enhance our corporate value as a regional financial institution that fosters regional prosperity,
we shall fulfill our responsibilities as a corporate citizen and work to establish unshakeable support and trust from all
stakeholders, particularly the shareholders. Based on this principle, the Bank’s guiding precept is to “foster regional
prosperity—which shall both develop the Bank and bring happiness to bank employees” through (1) good service—a
sincere, considerate and speedy service; (2) good people—lift people, broaden people and create a cheery workplace;
and (3) good management—sound and richly innovative management that seeks full participation from employees. To
this end, we shall strive to share the basic sense of values and ethics of directors and employees of the Bank, and to
ensure that these are reflected in the Bank’s operations. We have formulated a “Code of Ethics for Bank of Nagoya
Directors and Employees” and “Regulations for Complying with Laws and Regulations etc.” and through this we are
striving to raise corporate value.
Risk Management System
Amid the rapid progress towards financial liberalization, internationalization and deregulation, the risks
surrounding banks are becoming more complex and diverse. Accordingly, with so many risks, which include not only
credit risks (default risks such as borrowers going bankrupt) administrative processing risks, but also market risks
(fluctuation risks of interest rates, prices, foreign exchange rates), liquidity risks (risk related to stable financing)
system risks and legal risks, the appropriate control of such risks is becoming more important as a management issue.
At the Bank of Nagoya, we have put in place a risk management structure under which the Risk Control Division
is the office that manages risk management. Through the Risk Control Division, the Bank strives to advance the
techniques of identifying and controlling various risks that occur in bank operations. By appropriately managing risks,
the Bank aims for soundness of management and the establishment of a stable management base.
6
Breakdown of Loans (Nonconsolidated basis)
Balance of problem loans under the Banking Law (risk monitored loans)
(Millions of yen)
(As of March 31)
Total loans and
bills discounted
Claims to borrowers
in bankruptcy *1
Past due loans *2
Accruing loans
past due 3 months or
more *3
Restructured loans *4
Ratio of risk
monitored loans
to total loans and bills
discounted
(%)
Rate of change
(%)
2011
2010
2,055,266
2,034,184
1.03
5,525
5,582
-1.01
44,979
40,249
11.75
176
500
-64.74
14,328
7,816
83.30
3.16
2.66
0.50
* Risk monitored loans cover only Loans and Bills Discounted.
*1 Claims to borrowers in bankruptcy are non-accrual loans, after the partial charge-off of claims deemed uncollectible, to
borrowers who are legally bankrupt, which are defined in Article 96, Paragraph 1, Subparagraph 3 and 4 of Enforcement
Ordinance for the Corporation Tax Law of Japan.
*2 Past due loans are non-accrual loans other than claims to borrowers in bankruptcy and loans for which interest payments are
deferred in order to assist the financial recovery of borrowers in financial difficulties.
*3 Accruing loans past due 3 months or more are loans for which the payment of the principal and/or interest is contractually past
due three months or more, excluding claims to borrowers in bankruptcy and past due loans.
*4 Restructured loans are loans for which the Bank has relaxed to the borrowers in financial difficulties the lending conditions
such as a reduction of the original rate, forbearance of interest and/or principal payment, and extension of maturity date in
order to support the borrowers in their financial recovery or restructuring, excluding claims to borrowers in bankruptcy, past
due loans and accruing loans past due 3 months or more.
7
Balance of problem loans under the Financial Reconstruction Law
(Millions of yen)
(As of March 31)
2011
Bankrupt and
quasi-bankrupt *5
Doubtful *6
Need of special
attention *7
Normal *8
2010
Rate of change
(%)
13,806
13,816
-0.07
36,965
32,475
13.82
14,504
8,316
74.39
2,022,659
2,017,162
0.27
* Claims other than loans and bills discounted are covered in problem loans under the Financial Reconstruction Law.
*5 Loans classified as “Bankrupt and quasi-bankrupt” are loans to borrowers who are currently in legal bankruptcy procedures,
including bankruptcy, liquidation, corporate reorganization, and rearrangement, and borrowers who are not currently in legal
bankruptcy, but in quasi-bankruptcy.
*6 Loans classified as “Doubtful” are loans to borrowers who are not currently in bankruptcy, but in difficult financial situations
and with a strong possibility of going into bankruptcy.
*7 Loans classified as “Need of special attention” are loans past due 3 months or more and restructured loans.
*8 Loans classified as “Normal” are loans to borrowers not having particular problems regarding their financial situations and
operating conditions, and excluding loans classified as “Bankrupt and quasi-bankrupt,” “Doubtful” and “Need of special
attention.”
At March 31, 2011, the ratio of problem loans under the Financial Reconstruction Law was 3.13%.
8
Unrealized Gains on Securities (Nonconsolidated basis)
（100 Millions of yen）
(As of March 31)
2011
2010
Equity securities
128
222
Bonds and others
13
26
Total
141
249
Capital Adequacy Ratio
The Bank maintains soundness in capital adequacy. The Bank’s capital adequacy ratio (non-consolidated) was
10.90%, which is considerably higher than the 4% minimum requirement for domestically active banks. The Tier I
ratio, which is the ratio of the Bank’s core equity capital etc to its total assets, was 10.03% (non-consolidated). The
Bank’s consolidated capital adequacy ratio is 11.05%.
Rating
Japan Credit Rating Agency, Ltd. (JCR)
A+
Rating and Investment Information, Inc. (R&I)
A-
A high level of capacity to honor the financial commitment
on the obligation.
High creditworthiness supported by a few excellent factors.
9
Organization of The Bank
General Meeting of
Shareholders
Business Supervision
Division
Corporate
Auditors
Corporate
Auditors’ Office
Board of Directors
Personal Banking
Division
International Division
Nantong
Representative Office
Capital Markets &
Treasury Division
Shanghai
Representative Office
Systems & Operations
Division
Board of Executive
Directors
Head Office
Credit Supervision
Division
Toyota Business
Division
General Planning
Division
Personnel Division
108 Branches
and 1 Sub Branch
Risk Control Division
Loan Plaza
Compliance Division
Tokyo Representative
Office
Internal Audit Division
(As of April 5, 2011)
10
Board of Directors and Corporate Auditors
(As of June 24, 2011)
Chairman
Kazumaro Kato
President
Yukio Yanase
Deputy President
Masahiro Nakamura
Senior
Managing Directors
Yasuhisa Yamamoto
Managing Directors
Ichiro Fujiwara
Mamoru Harada
Directors
Tetsundo Nakamura
Yasuhiro Kondo
Tomio Iwata
Yoshiyuki Furukawa
Ikuo Yamada
Chiharu Kozakai
Corporate Auditors
Akio Oguri
Tadashi Takeuchi
Takashi Mizuguchi
Hideji Aoyama
Akira Kanda
Executive Officers
Takashi Hattori
Yasuhisa Furumoto
Shinichi Yokota
Hideharu Ishii
Koji Kurachi
Shougo Ukai
Masaki Tsunashima
Principal Shareholders
(As of March 31, 2011)
Sumitomo Mitsui Banking Corporation
5.03%
Japan Trustee Services Bank, Ltd.
(Trust Account)
4.48%
Nippon Life Insurance Company
3.54%
Meiji Yasuda Life Insurance Company
3.39%
The Bank of Nagoya Employees’ Shareholding Association (Meigin Minori-kai)
3.24%
Japan Trustee Services Bank, Ltd.
(Toyota Motor Corporation Retirement Benefit Trust Account
Re-entrusted by The Sumitomo Trust and Banking Co., Ltd.)
2.84%
SUMITOMO LIFE INSURANCE COMPANY
2.51%
The Master Trust Bank of Japan, Ltd.
(Trust Account)
2.33%
Mitsui Sumitomo Insurance Company, Limited
2.19%
Mizuho Corporate Bank, Ltd.
2.16%
11
12
The Bank of Nagoya, Ltd. and Subsidiaries
Consolidated Balance Sheets
March 31, 2011 and 2010
Thousands of
U.S. dollars
Millions of yen
2011
Assets:
Cash and due from banks (Note 3)
¥
2010
93,882
Call loans and bills purchased (Note 3)
¥
2011
100,003
$
1,129,069
3,734
2,728
44,918
123
34
1,486
793,075
812,239
9,537,894
2,055,090
2,034,041
24,715,460
3,738
2,436
44,963
Lease receivables and investments in leased assets
(Notes 7 and 13)
23,706
25,870
285,103
Other assets (Note 7)
22,393
24,487
269,317
Tangible fixed assets (Note 6)
35,216
35,632
423,525
121
143
1,464
7,854
2,908
94,457
13,372
15,909
160,820
(23,894)
(22,920)
(287,370)
3,033,515
$ 36,421,106
Trading account securities (Notes 3 and 4)
Securities (Notes 3, 4, 7 and 11)
Loans and bills discounted (Notes 3, 5, 7, 13 and 17)
Foreign exchanges
Intangible fixed assets (Note 6)
Deferred tax assets (Note 15)
Customers’ liabilities for acceptances and
guarantees (Note 11)
Reserve for possible loan losses
Total assets
¥
3,028,414
See accompanying Notes to Consolidated Financial Statements.
13
¥
Thousands of
U.S. dollars
Millions of yen
2011
Liabilities:
Deposits (Notes 3, 7 and 8)
Call money and bills sold (Note 3)
Borrowed money (Notes 3, 7 and 9)
Foreign exchanges
Other liabilities (Notes 9 and 15)
Reserve for employee bonuses
Reserve for executive bonuses
¥
2,789,923
831
24,162
51
18,360
1,221
54
2010
¥
2011
2,789,610
21,953
32
19,595
1,216
62
$ 33,552,894
10,000
290,583
613
220,812
14,689
660
―
Reserve for employee retirement benefits (Note 10)
Reserve for executive retirement benefits
6,684
592
7,361
610
80,389
7,130
Reserve for losses on repayments of dormant bank
accounts
Reserve for contingent loss
Reserve for loss on interest repayment
Deferred tax liabilities for revaluation (Note 6)
Negative goodwill
Acceptances and guarantees (Note 11)
368
3,048
259
4,485
75
13,372
396
2,196
246
4,567
226
15,909
4,430
36,660
3,118
53,941
907
160,820
2,863,490
2,863,986
34,437,646
25,090
18,645
105,816
(231)
149,321
12,525
3,077
25,090
18,645
103,547
(207)
147,076
19,420
3,032
301,754
224,243
1,272,602
(2,787)
1,795,812
150,634
37,014
164,924
169,529
1,983,460
3,033,515
$ 36,421,106
Total liabilities
Net assets (Notes 12 and 18):
Common stock
Capital surplus
Retained earnings
Less, treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets
¥
3,028,414
See accompanying Notes to Consolidated Financial Statements.
14
¥
The Bank of Nagoya, Ltd. and Subsidiaries
Consolidated Statements of Income
For the Years Ended March 31, 2011 and 2010
Thousands of
U.S. dollars
Millions of yen
2011
Income:
Interest on:
Loans and discounts
Securities
¥
Others
2010
33,099
8,388
¥
2011
34,854
8,872
$
398,066
100,888
72
49
872
41,560
7,061
18,064
1,941
43,776
7,018
17,249
2,203
499,826
84,920
217,247
23,345
676
736
8,131
69,302
70,985
833,469
3,186
286
18
5,295
349
25
38,320
3,443
220
3,490
2,590
13,020
35,484
163
3,757
935
3,564
5,670
2,446
13,561
36,184
651
2,790
1,134
1,794
41,983
31,159
156,586
426,752
1,971
45,193
11,255
42,872
63,008
64,234
757,771
Income before income taxes and
minority interests (Note 19)
Income taxes (Note 15)
6,294
2,566
6,751
2,670
75,698
30,862
Income before minority interests
Minority interests in net income of subsidiaries
3,728
185
4,080
233
44,836
2,231
Total interest income
Fees and commissions
Other operating income
Gain on sales of stocks and other securities
Other income
Total income (Note 19)
Expenses:
Interest on:
Deposits
Borrowings and rediscounts
Others
Total interest expenses
Fees and commissions
Other operating expenses
General and administrative expenses
Impairment loss on fixed assets
Provision for possible loan losses
Loss on devaluation of stocks and other securities
Other expenses
Total expenses
¥
Net income
3,542
¥
3,847
Yen
Per share:
Net income
Cash dividends
¥
See accompanying Notes to Consolidated Financial Statements.
15
17.30
6.5
$
42,605
U.S. dollars
¥
18.78
7.0
$
0.21
0.08
The Bank of Nagoya, Ltd. and Subsidiaries
Consolidated Statement of Comprehensive Income
For the Year Ended March 31, 2011
Millions of
yen
Thousands of
U.S. dollars
2011
2011
¥
Income before minority interests
Other comprehensive income (Note 16):
Net change in unrealized gains on available-for-sale
securities
Net change in deferred losses on hedging
instruments
Total other comprehensive income
Comprehensive income
3,728
$
44,836
(6,770)
(81,425)
(0)
(1)
(6,770)
(81,426)
¥
(3,042)
$
(36,590)
¥
(3,231)
189
$
(38,863)
2,273
¥
(3,042)
$
(36,590)
Comprehensive income attributable to (Note 16):
Owners of the parent
Minority interests
Total comprehensive income
See accompanying Notes to Consolidated Financial Statements.
16
The Bank of Nagoya, Ltd. and Subsidiaries
Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2011 and 2010
Shareholders’ equity
Number of
shares issued
Common
stock
Capital
surplus
Accumulated other comprehensive income
Retained
earnings
Total
shareholders’
equity
Treasury
stock
Net unrealized
gains on
available-for-sale
securities
Net deferred
losses on
hedging
instruments
Land
revaluation
excess
¥
¥
Total Accumulated
other
comprehensive
income
Minority
interests
Total net assets
Millions of yen
Balance at March 31, 2009
205,054,873
¥
25,090
¥
18,644
¥
101,268
¥
(203)
¥
144,800
¥
1,332
(0)
3,484
¥
4,816
¥
2,802
¥
152,420
Net income for the year
–
–
–
3,847
–
3,847
–
–
–
–
–
3,847
Cash dividends
–
–
–
(1,331)
–
(1,331)
–
–
–
–
–
(1,331)
Purchases of treasury stock
–
–
–
–
(12)
(12)
–
–
–
–
–
(12)
Disposition of treasury stock
–
–
(3)
–
7
3
–
–
–
–
–
3
Reversal of land revaluation excess
Transfer from retained earnings to
capital surplus
Net changes other than shareholders’
equity
–
–
–
(232)
–
(232)
–
–
–
–
–
(232)
–
–
5
(5)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
14,371
0
232
14,603
229
14,833
205,054,873
25,090
18,645
103,547
(207)
147,076
15,703
(0)
3,716
19,420
3,032
169,529
Net income for the year
–
–
–
3,542
–
3,542
–
–
–
–
–
3,542
Cash dividends
–
–
–
(1,433)
–
(1,433)
–
–
–
–
–
(1,433)
Purchases of treasury stock
–
–
–
–
(30)
(30)
–
–
–
–
–
(30)
Disposition of treasury stock
–
–
(3)
–
6
2
–
–
–
–
–
2
Reversal of land revaluation excess
Transfer from retained earnings to
capital surplus
Increase from equity change of
subsidiary
Net changes other than shareholders’
equity
–
–
–
121
–
121
–
–
–
–
–
121
–
–
3
(3)
–
–
–
–
–
–
–
–
–
–
–
42
–
42
–
–
–
–
–
42
–
–
–
–
–
–
(6,773)
(0)
(121)
(6,895)
45
(6,849)
Balance at March 31, 2010
Balance at March 31, 2011
205,054,873
¥
25,090
¥
18,645
¥
105,816
¥
(231)
¥
149,321
¥
8,929
¥
(0)
¥
3,595
¥
12,525
¥
3,077
¥
164,924
(0)
$
44,696
$
233,558
$
36,468
$
2,038,834
Thousands of U.S. dollars
Balance at March 31, 2010
$
301,754
$
224,243
$
1,245,310
$
(2,499)
$
1,768,808
$
188,862
$
Net income for the year
–
–
42,605
–
42,605
–
–
–
–
–
42,605
Cash dividends
–
–
(17,237)
–
(17,237)
–
–
–
–
–
(17,237)
Purchases of treasury stock
–
–
–
(364)
(364)
–
–
–
–
–
(364)
Disposition of treasury stock
–
(45)
–
76
31
–
–
–
–
–
31
Reversal of land revaluation excess
Transfer from retained earnings to
capital surplus
Increase from equity change of
subsidiary
Net changes other than shareholders’
equity
–
–
1,456
–
1,456
–
–
–
–
–
1,456
–
45
(45)
–
–
–
–
–
–
–
–
–
–
513
–
513
–
–
–
–
–
513
–
–
–
–
–
(81,467)
(1)
(1,456)
(82,924)
546
(82,378)
Balance at March 31, 2011
$
301,754
$
224,243
$
1,272,602
$
(2,787)
$
See accompanying Notes to Consolidated Financial Statements.
17
1,795,812
$
107,395
$
(1)
$
43,240
$
150,634
$
37,014
$
1,983,460
The Bank of Nagoya, Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended March 31, 2011 and 2010
Thousands of
U.S. dollars
2011
Millions of yen
2011
Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Impairment loss on fixed assets
Increase in reserve for possible loan losses
Decrease in reserve for executive retirement benefits
Decrease in reserve for losses on repayments of dormant bank accounts
Increase in reserve for contingent loss
Increase (decrease) in reserve for loss on interest repayment
Interest income recognized on statement of income
Interest expenses recognized on statement of income
Net gains on securities
Net (increase) decrease in call loans and bills purchased and others
Net (increase) decrease in loans and bills discounted
Net decrease in lease receivables and investments in leased assets
Net increase (decrease) in deposits
Net increase (decrease) in call money and bills sold
Interest income received
Interest expenses paid
Other, net
Subtotal
Income taxes paid
Net cash (used in) provided by operating activities
¥
Cash flows from investing activities:
Purchases of securities
Proceeds from sales and maturities of securities
Net change in money held in trust
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Dividends paid
Purchases of treasury stock, net of disposition
Repayments to minority shareholders
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 2(b))
¥
6,294
2010
¥
6,751
$
75,698
1,838
163
974
(17)
(28)
852
12
(41,560)
3,490
(2,597)
(1,006)
(21,049)
2,164
312
831
42,448
(4,176)
3,502
(7,550)
(4,186)
(11,736)
1,897
651
966
(40)
(14)
148
(49)
(43,776)
5,670
(1,481)
4,676
22,777
2,530
(7,181)
(20,000)
44,835
(5,099)
(11,241)
2,019
(1,547)
472
22,116
1,971
11,717
(216)
(340)
10,247
149
(499,826)
41,983
(31,237)
(12,103)
(253,146)
26,031
3,756
10,000
510,507
(50,231)
42,120
(90,804)
(50,348)
(141,152)
(272,885)
281,458
－
(1,598)
282
(17)
7,240
(262,382)
210,155
1,839
(2,193)
29
(74)
(52,624)
(3,281,841)
3,384,955
–
(19,227)
3,400
(212)
87,075
(1,435)
(23)
(72)
(1,531)
6
(6,021)
99,903
93,882
(1,333)
(8)
－
(1,341)
5
(53,488)
153,392
99,903
(17,263)
(285)
(874)
(18,422)
79
(72,420)
1,201,489
1,129,069
¥
See accompanying Notes to Consolidated Financial Statements.
18
$
The Bank of Nagoya, Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial Statements
The accompanying consolidated financial statements of The Bank of Nagoya, Ltd. (the “Bank”) and its
subsidiaries (together with the Bank, the “Group”) have been prepared in conformity with accounting
principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to
application and disclosure requirements from International Financial Reporting Standards. The
accompanying consolidated financial statements have been restructured and translated into English
from the consolidated financial statements of the Bank prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the
Financial Instrument and Exchange Law of Japan. Certain supplementary information included in the
statutory Japanese language consolidated financial statements, but not required for fair presentation, is
not presented in the accompanying consolidated financial statements.
The amounts in Japanese yen are presented in millions of yen and are rounded down to the million.
Accordingly, the sum of each yen amount appearing in the accompanying consolidated financial
statements and the notes thereto may not be exactly equal to the sum of the individual account balances.
The translations of the Japanese yen amounts into U.S. dollar amounts are included solely for the
convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2011, which was
¥83.15 to US$1.00. The translations should not be construed as a representation that the Japanese yen
amounts have been, could have been or could in the future be converted into U.S. dollars at this or any
other rate of exchange.
Certain comparative figures have been reclassified to conform to the current year’s presentation.
Effective the year ended March 31, 2011, the Group has adopted the “Cabinet Office Ordinance
Partially Revising Regulation on Terminology, Forms and Preparation of Financial Statements”
(Cabinet Office Ordinance No. 5, on March 24, 2009) based on the “Accounting Standard for
Consolidated Financial Statements” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 22,
on December 26, 2008). As a result, “Income before minority interests” was separately presented on the
consolidated statements of income for the year ended March 31, 2011.
Effective the year ended March 31, 2011, the Group has adopted the “Accounting Standard for
Presentation of Comprehensive Income” (ASBJ Statement No. 25, on June 30, 2010). Accordingly,
the consolidated statement of comprehensive income has been presented. Information with respect to
comprehensive income for the year ended March 31, 2010 was disclosed in Note 16. The
consolidated balance sheet and the consolidated statement of changes in net assets as of and for the
year ended March 31, 2010 have been modified to conform with the new presentation rules of 2011.
2. Summary of Significant Accounting Policies
(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Bank and all of its
subsidiaries. Both at March 31, 2011 and 2010, the Bank had five subsidiaries primarily engaged in
the business of providing a wide range of financial services to customers. The Bank had no affiliates
at March 31, 2011 and 2010.
The difference between the cost of investments in subsidiaries and the underlying equity in their net
assets adjusted based on the fair value at the time of acquisition is deferred as goodwill and amortized
over five years using the straight-line method. Negative goodwill which was incurred and recognized
prior to April 1, 2010 is amortized over five years on a straight-line basis as permitted by the revised
19
accounting standard for business combinations (ASBJ Statement No. 21). In consolidation, all
intercompany transactions and accounts have been eliminated. In addition, all significant unrealized
profits included in assets resulting from transactions within the Group have been eliminated.
(b) Cash and cash equivalents
For the purpose of the consolidated statements of cash flows, cash and cash equivalents consisted of
cash and due from banks with an original maturity of three months or less at March 31, 2011 and 2010
as follows:
Thousands of
U.S. dollars
Millions of yen
2011
Cash and due from banks
¥
Less, due from banks whose
period exceeds three months
Cash and cash equivalents
2010
93,882
¥
－
¥
93,882
100,003
2011
$
－
(100)
¥
99,903
1,129,069
$
1,129,069
(c) Trading account securities
Trading account securities are stated at fair value at the fiscal year-end. Related gains and losses, both
realized and unrealized, are included in current earnings. Accrued interest on trading account
securities is included in “Other assets”.
(d) Securities
Debt securities for which the Group has both the intent and the ability to hold to maturity are classified
as held-to-maturity securities and are stated at amortized cost. Available-for-sale securities which
have readily determinable fair value other than those classified as trading or held-to-maturity securities
are carried at fair value based on the market price at the respective fiscal year-end, with the net
unrealized gains or losses reported as a component of accumulated other comprehensive income in net
assets, net of applicable income taxes. Available-for-sale securities whose fair value is extremely
difficult to determine are stated at moving average cost. The carrying values of individual investment
securities are reduced if necessary, through write-downs to reflect other-than-temporary declines in
value. Gains and losses on the disposal of securities are principally computed based on the moving
average method. Accrued interest on securities is included in “Other assets”.
(Change in Accounting Policies)
Effective March 31, 2010, the Group adopted the revised Accounting Standard, “Accounting Standard
for Financial Instruments” (ASBJ Statement No. 10, revised on March 10, 2008) and the “Guidance on
Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, revised on March 10,
2008). The revised standard effectively expands the scope of securities to be stated at fair value on the
balance sheet to include certain non-marketable securities and requires that fair value of all financial
instruments be disclosed unless the fair value is extremely difficult to determine.
As a result of this change, at March 31, 2010, securities increased by ¥456 million, deferred tax assets
decreased by ¥184 million and net unrealized gains on available-for-sale securities increased by ¥271
million from the amounts that would have been recorded with the previous accounting method. In
addition, income before income taxes and minority interests for the year ended March 31, 2010
increased by ¥85 million.
20
(e) Derivatives and hedge accounting
The Bank uses various derivative instruments. Derivatives are recorded at fair value, with changes in
fair values included in the consolidated statements of income for the period in which they arise, except
for derivatives that are designated as hedging instruments and qualify for hedge accounting.
The Bank applies the deferral method of hedge accounting for hedges of foreign exchange risks
associated with various foreign currency denominated monetary assets and liabilities in accordance
with the Industry Audit Committee Report No. 25, “Treatment of Accounting and Auditing Concerning
Accounting for Foreign Currency Transactions in Banking Industry” issued by the Japanese Institute of
Certified Public Accountants (“JICPA”). The effectiveness of the currency swap transactions,
exchange swap transactions and similar transactions that hedge the foreign exchange risks of monetary
assets and liabilities denominated in foreign currencies described above is assessed based on the
comparison of the foreign currency position of the hedged monetary assets and liabilities and the
corresponding hedging instruments.
(f) Loans and bills discounted and reserve for possible loan losses
The reserve for possible loan losses is established based on management’s judgment and assessment of
future losses. The Bank has implemented a self-assessment system for its asset quality. The quality
of all loans is assessed by the branch and business unit, and is subsequently examined by the Credit
Supervision Division in accordance with the Bank’s policy and rules for self-assessment of asset
quality.
The Bank has established a credit rating system under which customers are classified into five
categories. All loans are classified for self-assessment purposes in the following categories: “legal
bankruptcy”, “de facto bankruptcy”, “bankruptcy risk”, “watch” and “normal”. The Bank provides a
reserve for possible loan losses at an amount deemed necessary to cover possible future losses. For
the claims to borrowers in legal bankruptcy and de facto bankruptcy, a reserve is provided based on the
amounts of the claims, net of the amounts expected to be collected through the disposal of collateral or
from guarantees. For claims to borrowers with bankruptcy risk, a reserve is provided for the amounts
considered necessary based on an overall solvency assessment performed for the amounts of claims, net
of the amounts expected to be collected through the disposal of collateral or from guarantees. For
claims in the watch and the normal category, a reserve has been provided based on the historical loss
experience of the Bank for a certain past period.
The reserve of the subsidiaries has been provided for as the aggregate amounts of estimated credit loss
based on the individual financial review approach for doubtful or troubled claims and a general reserve
based on the historical loss experience for other claims.
(g) Tangible fixed assets and depreciation (except for leases)
Tangible fixed assets are principally stated at cost less accumulated depreciation. Depreciation is
computed by the declining-balance method over the estimated useful life of the asset, except for
buildings acquired on or after April 1, 1998, which are depreciated using the straight-line method.
The useful lives of tangible fixed assets range as follows:
2011 and 2010
Buildings
Equipment and other
15 years to 50 years
4 years to 20 years
(h) Intangible fixed assets and amortization (except for leases)
Intangible fixed assets are amortized using the straight-line method. Costs of computer software that
the subsidiaries have developed or obtained for internal use are principally capitalized and are
21
amortized using the straight-line method over the estimated useful life of five years.
(i)
Leases
(Accounting for leases as lessee)
The Group, as lessee, capitalizes the assets used under finance leases commencing on and after April 1,
2008, except for certain immaterial or short-term finance leases accounted for as operating leases.
Depreciation of the leased assets capitalized in finance lease transactions is computed by the
straight-line method over the lease term as the useful life and with the assumption of no residual value
unless residual value is guaranteed by the corresponding lease contracts. As permitted, finance leases
which commenced prior to April 1, 2008 and have been accounted for with the accounting treatment
similar to that used for operating leases continue to be accounted for with the accounting treatment
similar to that used for operating leases, with certain disclosure information.
(Accounting for leases as lessor)
A certain subsidiary engaged in leasing operations as lessor recognizes “investments in leased assets”
for finance leases that do not transfer ownership of the leased assets to the lessee and recognizes “lease
receivables” for finance leases that transfer ownership, in a manner similar to the accounting treatment
for ordinary sale transactions. The total amount equivalent to interest is allocated over the lease term
using the interest method, and the subsidiary recognizes the leasing income for lease payment received
from customers and related costs, net of imputed interest, when the subsidiary receives the lease
payments, as permitted by the accounting standard. With respect to finance leases commenced prior
to April 1, 2008, the appropriate book value, net of accumulated depreciation, of the fixed assets as of
March 31, 2008 is recognized as the value of the leased assets at April 1, 2008, and the total amount
equivalent to interest is allocated over the lease term using the straight-line method as the permitted
transitional manner, instead of using interest method as the principal method of the revised accounting
standard. As a result, interest revenue for the years ended March 31, 2011 and 2010 was ¥286 million
($3,444 thousand) and ¥213 million more than the amount that would have been calculated by the
interest method.
Certain transfers of lease payments to be received are accounted for as sales transactions if the
derecognition criteria under the accounting standard of financial instruments are met.
(j) Impairment of fixed assets
Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. An impairment loss should be recognized in the
income statement by reducing the carrying amount of the impaired asset or a group of assets to the
recoverable amount, measured as the higher of the asset’s net selling price or value in use. Fixed
assets include land, buildings and other forms of property as well as intangible assets and are to be
grouped at the lowest level for which there are identifiable cash flows separate from other groups of
assets. For the purpose of recognition and measurement of an impairment loss, fixed assets of the
Bank are grouped into cash generating units such as operating branches other than idle or unused
property, and fixed assets of the subsidiaries are grouped into the respective units which manage and
determine income and expenses. The Group recognized impairment loss on fixed assets, amounting to
¥163 million ($1,971 thousand) for idle or unused properties and ¥651 million for unprofitable
operating branches for the years ended March 31, 2011 and 2010, respectively. Recoverable amounts
of the assets were measured based on their net selling prices, which were based on appraisal valuations
or expected selling amounts less estimated costs of disposal and/or expected disposal amounts.
Accumulated impairment loss is deducted from the net book value of each asset.
(k) Foreign currency translation
Assets and liabilities denominated in foreign currencies of the Group are translated into Japanese yen at
the exchange rate prevailing at the fiscal year-end. Revenues and expenses are translated at the
exchange rate prevailing at transaction dates. Gains and losses resulting from transactions are
included in the determination of net income.
22
(l)
Reserve for employee bonuses
A reserve for employee bonuses is provided based on the estimated amount of future payments
attributable to the respective year.
(m) Reserve for executive bonuses
A reserve for executive bonuses is provided for the payment of bonuses to directors and corporate
auditors based on the estimated amount of the payments attributable to the respective year.
(n) Reserve for employee retirement benefits
Employees who terminate their service with the Group are entitled to retirement benefits, which are
generally determined with reference to current basic rates of pay, length of service and conditions under
which the termination occurs.
The Group principally recognizes retirement benefits, including the pension cost and the related
liability, based on the actuarial present value of the projected benefit obligation using an actuarial
appraisal approach and the value of pension plan assets available for benefits at the respective fiscal
year-ends. Unrecognized prior service cost is amortized using the straight-line method over a certain
period within the average remaining years of service of employees from the year in which it occurs.
Unrecognized actuarial differences such as changes in the projected benefit obligation or value of
pension plan assets resulting from actual experience being different from what was assumed from
changes in the assumptions themselves are amortized on a straight-line basis over a certain period
within the average remaining years of service of employees from the next year after they arise. In
respect to the amortization period for unrecognized prior service cost and actuarial differences, the
Bank recognizes an amortization period of thirteen years as a certain period within the average
remaining years of service of employees.
(Change in Accounting Policies)
Effective March 31, 2010, the Group adopted the “Partial Amendments to Accounting Standard for
Retirement Benefits (Part 3)” (ASBJ Statement No. 19 issued on July 31, 2008). The revised standard
requires the Group to use the rate of return on long-term government or gilt-edged bonds prevailing as
of the end of the fiscal year for calculating the projected benefit obligation of a defined-benefit
retirement plan. Previously, the Group was allowed to use a discount rate determined by taking into
consideration fluctuations in the yield of long-term government or gilt-edged bonds over a certain
period. This change had no impact on the accompanying consolidated financial statements for the
year ended March 31, 2010.
(o) Reserve for executive retirement benefits
A reserve for executive retirement benefits is provided for based on the Group’s internal rules in the
amount that would be payable assuming the directors and corporate auditors terminated their services at
the balance sheet date.
(p) Reserve for losses on repayments of dormant bank accounts
In order to cover the possible losses on claims from customers for the repayment of dormant bank
accounts, which were previously recognized as income, the Bank provides reserve to the extent of the
estimated losses based on the historical loss experience taking into consideration the repayment
conditions for a certain past period. A provision for losses on repayments of dormant bank accounts is
included in “Other expenses” and amounted to ¥90 million ($1,086 thousand) and ¥100 million for the
years ended March 31, 2011 and 2010, respectively.
23
(q) Reserve for contingent loss
Reserve is provided at an amount deemed necessary to cover possible future losses from the default of
loans under the responsibility sharing system on guarantees of loans related to the Credit Guarantee
Corporation based on the historical default loss experience. A provision for contingent loss is
included in “Other expenses” and amounted to ¥852 million ($10,247 thousand) and ¥148 million for
the years ended March 31, 2011 and 2010, respectively.
(r) Reserve for loss on interest repayment
In order to cover possible losses for the repayment of interest received from customers that exceeded
the upper limit of interest rates prescribed by the Interest Rate Restriction Law, a subsidiary has
provided for an allowance for losses on interest repayments to the extent of the estimated losses for
repayment claims from customers for which court settlements have not been reached based on
historical loss experience and taking into consideration the repayment conditions for a certain recent
past period.
(s) Income taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities, and their respective tax bases and
operating loss carryforward. Deferred tax assets and liabilities are measured using the enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in the period that includes the enactment date.
(t) Appropriation of retained earnings
Cash dividends are recorded in the fiscal year when a proposed appropriation of retained earnings is
approved by the Board of Directors and/or shareholders.
(u) Per share data
Net income per share is computed by dividing income available to common shareholders by the
weighted-average number of shares of common stock outstanding during the respective year. Diluted
net income per share is not disclosed as the Group had no diluted common shares for the years ended
March 31, 2011 and 2010.
Cash dividends per share shown in the accompanying consolidated statements of income represent
dividends declared as applicable to the respective year.
(v) Asset retirement obligations
Effective from the year ended March 31, 2011, the Group has adopted the “Accounting Standard for
Asset Retirement Obligations” (ASBJ Statement No. 18, on March 31, 2008) and the “Guidance on
Accounting Standard for Asset Retirement Obligations” (ASBJ Guidance No. 21, on March 31, 2008).
As a result of the adoption of these standards, asset retirement obligation of ¥18 million ($226
thousand) was recorded at March 31, 2011. The impact on income before income taxes and
minority interests from this change was immaterial.
(w) New accounting standards for business combinations
Effective from the year ended March 31, 2011, the Group has adopted the “Accounting Standard for
Business Combinations” (ASBJ Statement No. 21, issued on December 26, 2008), the “Accounting
Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, issued on December 26,
2008) and the “Revised Guidance on Accounting Standard for Business Combinations and Accounting
Standard for Business Divestitures” (ASBJ Guidance No. 10, on December 26, 2008).
24
3. Financial Instruments and related disclosures
(a) Qualitative information on financial instruments
(1) Group Policy for financial instruments
The Group operates deposit taking, loan business and financial market investment. Since the Group
has financial assets and liabilities which mainly involve interest rate risk, the Bank adopts the Asset
Liability Management system (ALM) to avoid any unfavorable influence due to interest rate fluctuation.
Derivative transactions are also used as a part of ALM.
(2) Nature and extent of risks arising from financial instruments
Financial assets held by the Group are mainly comprised of loans to domestic corporate entities and
individuals, and securities. Loans are subject to customer credit risk which represents loss on default
caused by deteriorated credit of the borrowers. Securities which are primarily comprised of equity
securities, bonds and mutual funds are held for investment and business promotion purposes. These
securities are exposed to the credit risk of issuers, interest rate fluctuation risk and market price
fluctuation risk. As for the securities denominated in foreign currencies, the amount of bonds
denominated in foreign currencies are basically purchased up to the corresponding amount of deposits
and fund procurement in foreign currencies to avoid foreign exchange fluctuation risk.
Financial liabilities include mainly deposits from customers and are subject to liquidity risk. As for
variable interest deposits, such deposits are exposed to interest rate fluctuation risk.
Derivative transactions include interest rate swaps, forward foreign currency contracts, etc. The
Group uses derivative transactions for the purpose of optimizing ALM in order to avoid interest rate
fluctuation risk in relation to deposits and loans, and to fulfill the customer’s hedging requirements of
market risk of fluctuation in foreign currency exchange rates. Hedge accounting is applied for certain
transactions, making a distinction between the hedge transactions offsetting market fluctuations and
fixing cash flows, and specifying necessary tests for effectiveness of hedge transactions. Derivative
transactions which do not meet the hedge accounting criteria are exposed to foreign exchange
fluctuation risk and interest rate fluctuation risk.
(3) Risk management for financial instruments
(i)
Credit Risk Management
The Group manages its credit risk by maintaining a credit exposure management framework in
relation to loans in accordance with “the Credit Policy” which stipulates basic ideas in relation to
credit exposure management and administration rules regarding credit risk. The framework
includes credit administration on each loan, credit lines, administration of credit records, internal
ratings, and also includes setting guaranty or collateral, and handling outstanding loans. These
credit exposure managements are held by each sales branch and loan department and are reported
to managing committee and/or Board of Directors’ meeting on a routine basis.
Credit risk of issuers of securities and counterparty’s risk of derivative transactions are managed
by international securities department recognizing credit information and fair value on a regular
basis.
(ii) Market risk management
(a) Interest risk management
The Group established the ALM committee for the purpose of recognizing and managing interest
rate fluctuation risk comprehensively and pursuing an appropriate ALM system. The ALM
committee stipulates risk control methods and procedures in ALM committee codes, operates the
25
committee in accordance with the management policy of ALM determined by the Board of
Directors’ meeting, monitors the status of implementation and discusses at the Board of Directors’
meetings the actions to be taken in the future. On a daily basis, the risk control department
checks interest rates and periods of financial assets and liabilities comprehensively, monitors risks
using gap analysis and maturity ladder approach, and reports to the ALM committee and Board of
Directors’ meeting monthly. Interest rate swap transactions are also used under ALM system to
avoid interest rate fluctuation risk.
(b) Foreign exchange risk management
The Group enters into forward foreign currency contracts, and manages each transaction to avoid
foreign exchange fluctuation risk on transactions with customers.
(c) Market price fluctuation risk management
The Group holds investment products including marketable securities based on marketable
securities investment planning determined by managing committee in accordance with market
fluctuation risk management rules under the Board of Directors’ meeting. Since the international
securities department purchases investment products from outside, the market price fluctuation risk
is reduced through consecutive monitoring as well as preliminary review and setup for investment
limits. Most of the equity securities held by the corporate planning department are for the
business promotion purpose, and market condition and financial status of customers are monitored
and reported to the managing committee on a regular basis.
(d) Derivative transactions
As for the derivative transactions, an internal check system has been established through
segregating the operation, custody and valuation of the effectiveness of hedge transactions.
(e) Quantitative information on market risk
i) Financial instruments for trading purpose
The Group uses historical simulation method (based on the assumptions of a holding period of
120 business days, 99% confidence level and observation period of 1,200 business days) for
the calculation of interest-related Value at Risk (“VaR”) of trading account securities. As of
March 31, 2011, the market risk exposure (the expected maximum loss) of the Group’s
trading operation amounted to ¥2 million ($29 thousand).
ii) Financial instruments for other than trading purpose
Market risk is the primary risk factor to the Group. Major financial instruments subject to
market risk are “Loans and bills discounted”, bond and equity securities, investment trusts
included in “Securities”, “Deposits” and interest rate swaps included in “Derivatives”. The
historical simulation method (based on the assumptions of a holding period of 120 business
days, 99% confidence level and observation period of 1,200 business days) is used for the
calculation of VaR of these financial assets and liabilities. As of March 31, 2011, the
market risk exposures (the expected maximum loss) of the Group’s banking operations were
as follows:
Value at Risk
Millions of
Thousands of
yen
U.S. dollars
2011
Securities for investment purpose (*1)
Strategically held equity securities
Loans and deposits (*2)
26
¥
15,453
22,936
16,212
2011
$
185,853
275,842
194,974
Notes:
(*1) Securities for investment purpose: yen bonds, foreign bonds, equity securities for
investment purpose, investment trusts and OTC options.
(*2) Loans and deposits: due from banks, certificate of deposits, loans, interest rate swaps for
ALM hedging purpose, call loans, deposits and others.
iii) Supplementary explanation about quantitative information on market risk
The Group evaluates the effectiveness of the measurement model by performing
back-testing procedures to compare VaR calculated by the measurement system with actual
losses. VaR provides the market risk exposure which is statistically calculated under
certain probability based on historical market fluctuations; therefore, it may not be able to
capture the risks when the market environment changes extraordinarily.
(iii) Liquidity risk management
The Group regards stable fund raising as a top priority, and conducts asset management on a timely
basis. Liquidity risk is managed by diversification of means of fund raising and adjustment of
balance of long-term and short-term loans.
(4) Supplemental information on fair values
Fair value of financial instruments includes quoted price in the active markets. If quoted price is not
available, other rational valuation techniques are used instead. Since certain assumptions are used
when calculating fair values, different assumptions may lead to different fair values.
(b) Fair value of financial instruments
Carrying values and fair values of financial instruments at March 31, 2011 and 2010 were as follows:
Carrying
value
March 31, 2011
Cash and due from banks
Call loans and bills purchased
¥
Trading account securities
Securities - Available-for-sale securities (* 1)
Loans and bills discounted:
Fair
value
Millions of yen
93,882
3,734
93,882
3,734
¥
–
–
123
123
–
788,411
788,411
–
2,057,158
24,571
2,055,090
Reserve for possible loan losses (*2)
(22,503)
Loans and bills discounted – subtotal
2,032,587
Total
¥
Unrealized
gain/(loss)
¥
2,918,739
¥
2,943,310
¥
24,571
Deposits
¥
¥
2,791,869
831
24,229
2,816,930
¥
¥
2,789,923
831
24,162
2,814,916
¥
Call money and bills sold
Borrowed money
Total
¥
1,946
–
67
2,014
¥
(1,028)
¥
(1,028)
¥
–
Derivative transactions (* 3):
To which hedge accounting is not applied
To which hedge accounting is applied
Total
(9)
¥
27
(1,037)
(9)
¥
(1,037)
–
¥
–
Carrying
value
March 31, 2010
Cash and due from banks
Call loans and bills purchased
¥
100,003
2,728
Trading account securities
Securities - Available-for-sale securities (* 1)
Loans and bills discounted:
Fair
value
Millions of yen
1
–
–
807,541
807,541
–
2,044,901
31,305
2,034,041
Loans and bills discounted – subtotal
2,013,595
Total
¥
34
(20,445)
Deposits
Borrowed money
100,005
2,728
34
Reserve for possible loan losses (*2)
Total
¥
Unrealized
gain/(loss)
¥
2,923,903
¥
2,955,210
¥
31,307
¥
¥
¥
2,792,714
22,052
2,814,766
¥
¥
2,789,610
21,953
2,811,563
¥
3,103
99
3,203
¥
(762)
¥
(762)
¥
–
Derivative transactions (* 3):
To which hedge accounting is not applied
To which hedge accounting is applied
Total
(48)
¥
(811)
(48)
¥
Carrying
value
March 31, 2011
(811)
–
¥
Fair
value
–
Unrealized
gain/(loss)
Thousands of U.S. dollars
Cash and due from banks
$
Call loans and bills purchased
$
44,918
–
–
1,486
1,486
–
9,481,802
–
24,444,826
24,740,332
295,506
$
35,102,101
$ 35,397,607
$
295,506
$
33,552,894
$ 33,576,302
$
23,408
10,000
10,000
–
$
290,583
33,853,477
291,398
$ 33,877,700
$
815
24,223
$
(12,365)
$
$
–
Loans and bills discounted:
Reserve for possible loan losses (* 2)
(270,634)
Loans and bills discounted – subtotal
Call money and bills sold
Borrowed money
Total
1,129,069
9,481,802
24,715,460
Securities - Available-for-sale securities(*1)
Deposits
$
44,918
Trading account securities
Total
1,129,069
Derivative transactions (* 3):
To which hedge accounting is not applied
To which hedge accounting is applied
Total
(112)
$
28
(12,477)
(12,365)
(112)
$
(12,477)
–
$
–
Notes:
(*1) The following securities are excluded from the above table because management of the Bank concluded that their
fair values are virtually impossible to estimate.
Thousands of
U.S. dollars
2011
Millions of yen
March 31,
Unlisted securities *1
2011
¥
4,652
¥
4,664
Investments in partnerships *2
Total
*1
*2
(*2)
(*3)
2010
¥
11
4,676
$
55,951
21
¥
4,697
141
$
56,092
The Group wrote off unlisted securities amounting to ¥18 million ($228 thousand) and ¥372
million for the years ended March 31, 2011 and 2010, respectively.
The fair value of investments in partnerships, comprised of assets whose fair value cannot be
reliably determined such as unlisted securities, is exempt from disclosure.
General and individual reserves for possible loan losses corresponding to loans and bills discounted are to be
deducted.
Derivative transactions show the net amount after offsetting the receivables and payables.
Details of the methodologies and assumptions used to estimate fair value of financial instruments are
summarized below:
Financial assets:
Cash and due from banks
Since the fair value of due from banks with demand or short maturities (within one year) is
approximately equal to the carrying value, the carrying value of these instruments is deemed as fair
value. As for the due from banks with maturities exceeding one year, present value is calculated by
discounting at rates based on the assumption of new deposit to the groups over the remaining period.
Fair value of structured deposits is determined by considering the valuation of derivatives made by the
financial institutions in addition to the present value mentioned above.
Call loans and bills purchased
The carrying value of call loans and bills purchased approximates fair value because of their short
maturities (within one year).
Trading account securities
The fair value of trading account securities held for trading business is measured at the quoted market
price of the exchange or the price provided by financial institutions.
Securities
The fair value of equity securities, bonds and mutual funds is measured at the quoted market price of
the exchange, the price provided by financial institutions, and net asset value publicly notified,
respectively. The fair value of privately placed bonds is determined by discounting the sum of
principal and interest, which is sorted by the internal rating and period at the Group’s assumed
corporate rate for new issuance. The fair value of securities issued by legal bankruptcy, de facto
bankruptcy and bankruptcy risk is calculated on the basis of present value of estimated future cash flow
or net of the amount expected to be collected through disposal of collateral or from guarantees.
Loans and bills discounted
The fair value of commercial paper, loans on notes and overdrafts which have short maturities (within
one year) is approximately equal to the carrying value unless the credit status of the borrower has
changed dramatically after the execution because of their quick reflection of market interest rate.
Therefore, the carrying value of the instruments is deemed as fair value. The fair value of loans on
29
deeds is determined by discounting the sum of principal and interest, which is sorted by the nature of
loans, and internal rating and period, at the Group’s assumed corporate rate for new loan. The fair
value of structured loans is determined by considering the value calculated by using the option pricing
model in addition to the fair value mentioned above. As for the loans to borrowers in legal
bankruptcy, de facto bankruptcy or bankruptcy risk, since reserve for possible loan losses is estimated
based on the present value of estimated future cash flow or net of the amount expected to be collected
through disposal of collateral or from guarantees, the fair value approximates the carrying amount
shown on the consolidated balance sheet at the closing date minus present estimated reserve for
possible loan losses, which is deemed as fair value. The carrying amount of loans and bills
discounted without repayment terms such as limiting loans to the range of collateral assets is deemed as
fair value since the fair value is approximately equal to the carrying value considering the expected
repayment period and interest rate conditions.
Financial liabilities:
Deposits
The fair value of demand deposits in Japanese yen is deemed as the amount payable (carrying amount)
if demanded on the consolidated balance sheet date. The fair value of time deposits and certificates of
deposit is determined by discounting future cash flow on each classification based on a certain period.
The discount rate is the rate used for accepting new deposits. Since all maturities of deposits in
foreign currencies are short (within one year) and the fair value approximates the carrying value, the
carrying value is deemed as fair value.
Call money and bills sold
Since maturities are short (within one year) and the fair value approximates the carrying value, the
carrying value is deemed as fair value.
Borrowed money
The carrying value of borrowed money with variable interest rate is deemed as fair value because of
quick reflection to the market interest rate, and immaterial changes of the credit status of the Bank and
the consolidated subsidiaries after execution. The fair value of borrowed money with fixed interest
rate is the present value determined by discounting the sum of principal and interest, which is sorted by
a certain period at the Group’s assumed corporate rate for similar borrowing. The carrying amount of
borrowed money with short maturities (within one year) is deemed as fair value since the fair value
approximates the carrying value.
30
(c) Maturity analysis for financial assets and securities with contractual maturities
March 31, 2011
Due in one
year or less
Due after
one year
through
three years
Due after
three years
through
five years
Due after
five years
through
seven years
Due after
seven years
through
ten years
Due after
ten years
Millions of yen
Due from banks
Call loans and bills
purchased
Securities:
Available-for-sale
securities with
maturity(* 1)
National
government
bonds
Local
government
bonds
Bonds and
debentures
¥
57,269
¥
–
¥
–
¥
–
¥
–
¥
–
3,734
–
–
–
–
–
–
105,601
109,700
18,200
50,200
–
2,924
14,866
43,175
4,334
15,429
–
30,980
89,455
109,817
34,058
36,516
1,717
Others (* 2)
2,578
10,903
12,883
7,431
6,365
1,000
Securities - total
Loans and bills
discounted (* 3)
36,483
220,827
275,576
64,024
108,510
2,717
715,948
434,541
274,131
143,467
128,698
307,316
Total
¥
813,436
¥
655,369
¥
549,708
¥
207,491
¥
237,209
¥
310,034
$
–
$
–
Thousands of U.S. dollars
Due from banks
Call loans and bills
purchased
Securities:
Available-for
-sale securities
with maturity (*1 )
National
government
bonds
Local
government
bonds
Bonds and
debentures
Others (* 2)
Securities - total
Loans and bills
discounted (* 3)
$
688,753
$
–
$
–
$
–
44,918
–
–
–
–
–
–
1,270,012
1,319,302
218,882
603,728
–
35,170
178,793
519,253
52,125
185,564
–
372,582
31,013
438,765
1,075,838
131,132
2,655,775
1,320,713
154,943
3,314,211
409,604
89,375
769,986
439,158
76,551
1,305,001
20,659
12,026
32,685
8,610,328
5,225,999
3,296,833
1,725,401
1,547,791
3,695,934
Total
$ 9,782,764
$ 7,881,774
$ 6,611,044
$ 2,495,387
$ 2,852,792
$ 3,728,619
Notes:
*1. Amounts of securities are stated on the basis of estimated redemption amounts regarding a principal which is not matched
with the amount shown in the consolidated balance sheet.
*2. “Others” includes Samurai bonds, Euro-Yen bonds and foreign currency bonds.
*3. The portion whose timing of collection is unforeseeable, such as loans to “legal bankruptcy” borrowers, loans to “de facto
bankruptcy” borrowers and loans to “bankruptcy risk” borrowers, amounting to ¥50,985 ($613,173 thousand), is not
included in the above table.
31
(d) Repayment schedule for borrowed money and other debts with contractual maturities
March 31, 2011
Due after
one year
through
three years
Due in one
year or less
Due after
three years
through
five years
Due after
five years
through
seven years
Due after
seven years
through
ten years
Due after
ten years
Millions of yen
Deposits (* 1)
Call money and
bills sold
Borrowed money
Total
¥ 2,602,830
¥
172,130
¥
12,826
¥
760
¥
1,375
–
831
–
–
–
–
–
12,837
8,475
2,850
–
–
–
¥
1,375
–
$
16,538
–
¥ 2,616,498
¥
180,605
¥
15,676
¥
760
Thousands of U.S. Dollars
Deposits (* 1)
Call money and
bills sold
Borrowed money
$ 31,302,829
$ 2,070,122
$
154,263
10,000
–
–
–
–
–
154,384
101,924
34,275
–
–
–
16,538
–
Total
$ 31,467,213
$ 2,172,046
$ 188,538
Note:
*1. Deposits on demand are included in “Due in one year or less”.
$
9,142
$
9,142
$
4. Trading Account Securities and Securities
At March 31, 2011 and 2010, securities consisted of the following:
Thousands of
U.S. dollars
Millions of yen
2011
National government bonds
Local government bonds
Bonds and debentures
Equity securities
Other securities
2010
2011
¥
285,471
81,473
303,999
74,323
47,807
¥
318,765
74,303
278,128
85,189
55,852
$
3,433,211
979,839
3,656,043
893,849
574,952
¥
793,075
¥
812,239
$
9,537,894
Securities are classified as trading, held-to-maturity or available-for-sale. The classification
determines the respective accounting method as stipulated by the accounting standard for financial
instruments. Monetary claims bought, trading account securities and securities in the accompanying
consolidated balance sheets included marketable securities traded on stock exchanges.
At March 31, 2011 and 2010, the carrying values of trading account securities and the related net
unrealized gains or losses included in the current earnings were as follows:
32
Carrying
value
Unrealized
gain/(loss)
Carrying
value
Unrealized
gain/(loss)
Millions of yen
2011
Trading account
securities
¥
123
Carrying
Unrealized
value
gain/(loss)
Thousands of
U.S. dollars
2010
¥
0
¥
34
2011
(0)
¥
$
1,486
$
7
At March 31, 2011 and 2010, gross unrealized gains and losses on available-for-sale securities with fair
value were summarized as follows:
Gross
Gross
Fair and
unrealized
unrealized
carrying
Acquisition
cost
gains
losses
value
Millions of yen
Available-for-sale securities with fair value at March 31, 2011:
Equity securities
¥
56,786
¥
15,229
Bonds:
National government bonds
284,923
1,801
Local government bonds
81,154
591
Bonds and debentures
302,630
2,294
Others
48,719
¥
774,214
197
¥
20,114
Available-for-sale securities with fair value at March 31, 2010:
Equity securities
¥
58,233
¥
23,185
Bonds:
National government bonds
318,264
2,422
Local government bonds
73,289
1,024
Bonds and debentures
275,482
3,043
Others
57,304
362
¥
782,575
¥
¥
30,038
(2,345)
¥
69,671
(1,253)
(272)
(924)
285,471
81,473
303,999
(1,121)
47,795
¥
(5,916)
¥
788,411
¥
(906)
¥
80,512
(1,921)
(10)
(397)
(1,836)
¥
(5,073)
318,765
74,303
278,128
55,830
¥
807,541
$
837,900
Thousands of U.S. dollars
Available-for-sale securities with fair value at March 31, 2011:
Equity securities
$
682,944
$
183,162
Bonds:
National government bonds
3,426,615
21,668
Local government bonds
975,999
7,112
Bonds and debentures
3,639,570
27,593
Others
585,925
2,371
$
9,311,053
$
241,906
$
(28,206)
(15,072)
(3,272)
(11,120)
(13,487)
$
(71,157)
3,433,211
979,839
3,656,043
574,809
$
9,481,802
At March 31, 2011 and 2010, net unrealized gains on available-for-sale securities, net of applicable
income taxes and minority interests, and included in accumulated other comprehensive income of net
assets on the accompanying consolidated balance sheets were as follows:
33
Thousands of
U.S. dollars
Millions of yen
2011
Unrealized gains
Deferred tax liabilities
¥
2010
14,197
(5,265)
Minority interests portion
¥
24,965
(9,262)
(2)
Net unrealized gains in net assets
¥
8,929
2011
$
0
¥
15,703
170,749
(63,320)
(34)
$
107,395
During the years ended March 31, 2011 and 2010, the Group sold available-for-sale securities and
recorded gains of ¥4,713 million ($56,683 thousand) and ¥3,903 million, respectively, and losses of
¥422 million ($5,078 thousand) and ¥1,264 million, respectively, on the accompanying consolidated
statements of income.
For the years ended March 31, 2011 and 2010, the Group recorded a loss on the write-down of
available-for-sale securities with fair value due to other-than-temporary declines in value amounting to
¥941 million ($11,322 thousand) and ¥770 million, respectively.
5. Loans and Bills Discounted
At March 31, 2011 and 2010, loans and bills discounted consisted of the following:
Millions of yen
2011
Bills discounted
Loans on notes
Loans on deeds
Overdrafts
Others
Thousands of
U.S. dollars
2010
2011
¥
49,817
161,055
1,601,081
236,838
6,297
¥
49,038
172,359
1,565,330
240,175
7,137
$
599,128
1,936,927
19,255,340
2,848,331
75,734
¥
2,055,090
¥
2,034,041
$
24,715,460
Bills discounted are accounted for as finance transactions in accordance with the JICPA Industry Audit
Committee Report No. 24, “Accounting and Auditing Treatment of Accounting Standards for Financial
Instruments in Banking Industry”. The Group has rights to sell or pledge bankers’ acceptances,
commercial bills, documentary bills and foreign exchanges without restrictions. The total face value
of these bills amounted to ¥51,740 million ($622,260 thousand) and ¥50,491 million at March 31, 2011
and 2010, respectively.
At March 31, 2010, loans and bills discounted account included the portion of loans extended to
originators based on loan participation agreements, as permitted by the JICPA Accounting Committee
Report No. 3, in the amount of ¥4,631 million.
Claims to borrowers in bankruptcy and past due loans are included in “Loans and bills discounted” and
amounted to ¥50,985 million ($613,173 thousand) and ¥46,529 million at March 31, 2011 and 2010,
respectively. Loans are generally placed on non-accrual status when substantial doubt is judged to
exist as to the ultimate collectability of either the principal or interest if they are past due for a certain
period or for other reasons. Interest revenue accruals are suspended when loans are classified as
claims to borrowers in bankruptcy and past due loans. Claims to borrowers in bankruptcy represent
non-accrual loans after the partial charge-off of claims is deemed uncollectible to borrowers who are
34
legally bankrupt and are defined in Article 96, Paragraph 1, Subparagraph 3 and 4 of the Enforcement
Ordinance for the Corporation Tax Law of Japan. Past due loans are non-accrual loans other than
claims to borrowers in bankruptcy and loans for which interest payments are deferred in order to assist
the financial recovery of borrowers in financial difficulties.
At March 31, 2011 and 2010, accruing loans for which the payment of the principal and/or interest is
contractually past due three months or more, excluding non-accrual loans amounted to ¥176 million
($2,121 thousand) and ¥500 million, respectively.
At March 31, 2011 and 2010, restructured loans for which the Bank has relaxed to borrowers in
financial difficulties the original lending conditions such as a reduction of the original interest rate,
forbearance of interest and/or principal payments, and extension of maturity date in order to support
them in their financial recovery or restructuring, excluding non-accrual and accruing loans
contractually past due three months or more disclosed above, amounted to ¥17,250 million ($207,463
thousand) and ¥9,117 million, respectively.
Total non-performing loans, net of charge-offs, which consisted of non-accrual loans, accruing loans
contractually past due three months or more, and restructured loans amounted to ¥68,412 million
($822,757 thousand) and ¥56,147 million at March 31, 2011 and 2010, respectively.
6. Tangible Fixed Assets and Intangible Fixed Assets
At March 31, 2011 and 2010, the major classifications of the accounts were as follows:
Thousands of
U.S. dollars
Millions of yen
2011
Land
Buildings and structures
Equipment
Leased assets as lessee
Construction in progress
Tangible fixed assets
2010
2011
¥
23,768
8,236
3,007
15
188
¥
24,509
8,218
2,697
20
186
$
285,855
99,053
36,169
184
2,264
¥
35,216
¥
35,632
$
423,525
At March 31, 2011 and 2010, accumulated depreciation for tangible fixed assets amounted to ¥31,314
million ($376,605 thousand) and ¥30,636 million, respectively. Intangible fixed assets included
software.
The Bank elected an one-time revaluation to restate the cost of land used for the banking business at
values rationally reassessed and reflecting appropriate adjustments for land shape and other factors
based on the appraisal values issued by the Japanese National Tax Agency effective on March 31,
1998 under the Law Concerning Revaluation of Land. According to the Law, the amount equivalent
to the tax effect on the excess of reassessed values over the original book values is recorded as deferred
tax liabilities for revaluation, and the rest of such excess, net of the tax effect, is recorded as land
revaluation excess in the accumulated other comprehensive income of net assets in the consolidated
balance sheets. At March 31, 2011 and 2010, the difference in the carrying values of land used for
the banking business after revaluation over the current market value at the fiscal year-end amounted to
¥8,394 million ($100,951 thousand) and ¥6,514 million, respectively.
As permitted by the accounting principles and practices generally accepted in Japan, deferred capital
gains on sales on real property are deducted from the original acquisition cost of property which is
newly acquired for replacement purposes in the same line of business as the property sold by the Bank.
35
At March 31, 2011 and 2010, ¥1,794 million ($21,580 thousand) and ¥1,797 million were directly
reduced from the acquisition cost of land, respectively.
7. Pledged Assets
The carrying amounts of assets pledged as collateral and the collateralized debt or bill settlements at
March 31, 2011 and 2010 were as follows:
Thousands of
U.S. dollars
Millions of yen
2011
Assets pledged:
Securities
Loans and bills discounted
Investments in leased assets
Other assets
Related collateralized debts:
Deposits
Borrowed money
2010
2011
¥
35,466
2,626
7,303
20
¥
34,105
2,559
5,548
20
$
426,535
31,591
87,834
245
¥
14,544
12,682
¥
12,452
10,108
$
174,915
152,520
In addition, securities amounting to ¥65,723 million ($790,422 thousand) and ¥65,788 million at March
31, 2011 and 2010, respectively, were pledged as collateral for the settlement of exchange, derivatives
and other transactions.
8. Deposits
At March 31, 2011 and 2010, deposits consisted of the following:
Millions of yen
2011
Demand deposits
Time deposits
Other deposits
¥
Subtotal
Negotiable deposits
2010
1,417,946
1,285,513
48,375
¥
2,751,835
38,088
¥
2,789,923
¥
Thousands of
U.S. dollars
2011
1,389,362
1,324,268
39,660
$ 17,052,870
15,460,179
581,781
2,753,290
36,320
33,094,830
458,064
2,789,610
$ 33,552,894
9. Borrowed Money and Finance Lease Obligations
Borrowed money consisted principally of borrowings from financial institutions due through February
2016 with the average interest rate of 1.02% and 1.34% per annum at March 31, 2011 and 2010,
respectively. Finance lease obligations of ¥16 million ($201 thousand) and ¥21 million at March 31,
2011 and 2010, respectively were included in “Other liabilities” in the accompanying consolidated
balance sheets.
36
At March 31, 2011, the annual maturities of borrowed money and finance lease obligations were as
follows:
Millions of yen
Borrowed
Finance lease
money
obligations
Years ending March 31,
2012
2013
2014
2015
¥
2016
12,837
5,150
3,325
2,025
¥
5
5
4
0
825
¥
Thousands of U.S. dollars
Borrowed
Finance lease
money
obligations
$
154,384
61,936
39,988
24,354
0
24,162
¥
16
$
68
70
58
4
9,921
$
290,583
1
$
201
10. Employee Retirement Benefits
The Bank has defined benefit pension plans and lump-sum retirement benefit plans that substantially
cover all employees. One of the subsidiaries participates in a certain corporate pension plan under a
multi-employer pension program as a part of a lump-sum retirement benefit plan. The other four
subsidiaries adopt only lump-sum retirement benefit plans.
The following table reconciles the benefit liability and net periodic retirement benefit expense as of and
for the years ended March 31, 2011 and 2010:
Thousands of
U.S. dollars
Millions of yen
2011
Reconciliation of benefit liability:
Projected benefit obligation
¥
Less fair value of pension plan assets at end of year
Projected benefit obligation in excess of
pension plan assets
Unrecognized actuarial differences
Unrecognized prior service cost
Net amounts of reserve for employee
retirement benefits recognized on the
consolidated balance sheets
Prepaid pension cost
Reserve for employee retirement benefits
¥
40,527
2010
¥
40,988
2011
$
487,397
(30,756)
(32,334)
(369,886)
9,770
(11,615)
(51)
8,653
(11,080)
(68)
117,511
(139,688)
(618)
(1,895)
8,579
(2,495)
9,857
(22,795)
103,184
6,684
¥
7,361
$
80,389
Note: The projected benefit obligation of the subsidiaries was calculated using the simplified calculation method as
permitted by the accounting standard for employee retirement benefits.
37
Thousands of
U.S. dollars
Millions of yen
2011
Components of net periodic retirement benefit expense:
Service cost
¥
1,282
Interest cost
611
Expected return on pension plan assets
(683)
Amortization of prior service cost
17
Amortization of actuarial differences
1,269
Net periodic retirement benefit expense
¥
2,498
2010
2011
¥
1,265
600
(593)
17
1,817
$
15,423
7,359
(8,216)
206
15,269
¥
3,106
$
30,041
Major assumptions used in the calculation of the above information for the years ended March 31, 2011
and 2010 were as follows:
Method attributing the projected benefits to periods of services
Discount rate
Expected rate of return on pension plan assets
Amortization period of prior service cost
Amortization period of actuarial differences
2011
2010
Straight-line
method
1.50%
3.30%
13 years
13 years
Straight-line
method
1.50%
3.30%
13 years
13 years
11. Acceptances and Guarantees
The Bank provides guarantees for the liabilities of its customers for the payment of loans or other
liabilities with other financial institutions. As a contra account, “Customers’ liabilities for
acceptances and guarantees” is shown in assets on the accompanying consolidated balance sheets,
indicating the Bank’s right of indemnity from customers.
Guarantees are provided on certain privately placed bonds included in investment securities in
accordance with Paragraph 3 of Article 2 of the Financial Instrument and Exchange Law of Japan.
The guarantees amounted to ¥16,403 million ($197,270 thousand) and ¥19,142 million at March 31,
2011 and 2010, respectively.
12. Net Assets
At March 31, 2011 and 2010, the authorized number of shares of common stock without par value was
50 million, and the number of shares of common stock issued was 205,054,873 shares. At March 31,
2011 and 2010, the number of shares of treasury stock held by the Group was 398 thousand and 295
thousand shares, respectively.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated
as common stock. However, a company may, by a resolution of the Board of Directors, designate an
amount not exceeding one-half of the issue price of the new shares as additional paid-in capital, which
is included in capital surplus.
Capital surplus consists principally of additional paid-in capital. The Banking Law of Japan provides
that an amount equivalent to at least 20% of the cash payments as appropriation of retained earnings be
38
appropriated as the legal earnings reserve until a total amount of additional paid-in capital and such
reserve equals 100% of capital stock. Legal earnings reserve is included in the retained earnings in
the accompanying consolidated balance sheets. Under the Law, legal earnings reserve and additional
paid-in capital can be used to eliminate or reduce a deficit by a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. All
additional paid-in capital and all legal earnings reserve may be transferred to other capital surplus and
retained earnings, respectively, which are potentially available for dividends. Both at March 31, 2011
and 2010, legal earnings reserve amounted to ¥8,029 million ($96,572 thousand).
The maximum amount that the Bank can distribute as dividends is calculated based on the
nonconsolidated financial statements of the Bank in accordance with Japanese laws and regulations.
13. Commitments
(a) Loan commitments
Overdraft facilities and loan commitment lines are contracts whereby the Bank is obligated to advance
funds up to predetermined amount to a customer upon request, provided that the customer has met the
terms and conditions of the contract. At March 31, 2011 and 2010, the unused amounts within the
limits relating to these contracts amounted to ¥636,584 million ($7,655,859 thousand) and ¥599,917
million, respectively. Such outstanding contract amounts included contracts which expire within one
year or are revocable by the Bank at any time without any conditions in the amount of ¥629,740
million ($7,573,542 thousand) and ¥593,243 million at March 31, 2011 and 2010, respectively.
Since many of these commitments expire without being drawn down, the unused amount does not
necessarily represent a future cash requirement. Most of these contracts have conditions that allow
the Bank to refuse customers’ applications for loans or decrease the contract limits for appropriate
reasons (e.g., changes in financial situation, deterioration in customers’ creditworthiness). At the
inception of the contracts, the Bank obtains real estate, securities, etc. as collateral if considered
necessary. Subsequently, the Bank performs periodic reviews of the customers’ business results
based on internal rules, and may take necessary measures that include reconsidering conditions of the
contracts and/or requiring additional collateral and guarantees.
(b) Lease commitments
(Lessee contracts)
The Group leases certain office space and equipment, as lessee, under long-term non-cancelable lease
contracts. As disclosed in Note 2(i), the leased assets in finance lease transactions which do not
transfer ownership of the leased assets to the lessee and commenced prior to April 1, 2008 were not
capitalized and the related rental and lease expenses were charged to income as incurred. There was
no balance of such finance lease transactions that were accounted for by the accounting treatment
similar to operating leases at March 31, 2011 and 2010.
The aggregate future minimum lease commitments for non-cancellable operating leases at March 31,
2011 and 2010 were as follows:
Thousands of
U.S. dollars
Millions of yen
2011
Operating leases as lessee:
Due within one year
Due after one year
2010
2011
¥
477
1,055
¥
430
1,331
$
5,747
12,691
¥
1,533
¥
1,761
$
18,438
39
(Lessor contracts)
A subsidiary engaged in leasing operations as lessor entered into various long-term, non-cancelable
lease contracts with third parties, which were categorized as finance leases. At March 31, 2011 and
2010, investments in leased assets as lessor consisted of the following:
Thousands of
U.S. dollars
Millions of yen
2011
Future minimum lease payments to
be received
Estimated residual value
¥
25,688
1,284
Imputed interest
Investments in leased assets
2010
¥
28,699
1,589
(3,266)
¥
2011
$
308,937
15,445
(4,418)
23,706
¥
25,870
(39,279)
$
285,103
The aggregate annual maturities of future minimum lease payments to be received related to
investments in leased assets at March 31, 2011 were as follows:
Millions of
yen
Years ending March 31,
2012
2013
2014
2015
2016
¥
Thousands of
U.S. dollars
9,016
7,020
4,906
2,936
1,245
2017 and thereafter
$
108,439
84,433
59,005
35,318
14,984
6,758
$
308,937
561
¥
25,688
At March 31, 2011 and 2010, future lease payments to be received for non-cancellable operating leases
were as follows:
Thousands of
U.S. dollars
Millions of yen
2011
Operating leases as lessor:
Due within one year
Due after one year
2010
2011
¥
107
113
¥
102
160
$
1,296
1,369
¥
221
¥
263
$
2,665
14. Derivative Instruments
At March 31, 2011 and 2010, derivative instruments other than those to which hedge accounting was
applied were stated at fair value with valuation gains and losses recognized as current earnings as
follows:
40
Notional principals or
contract amounts
Over one
year
Total
Valuation
gain/(loss)
Fair value *
Millions of yen
At March 31, 2011:
Interest rate swaps
Foreign exchange forward contracts
¥
At March 31, 2010:
Interest rate swaps
Foreign exchange forward contracts
¥
20,000
2,159
¥
20,000
2,427
¥
20,000
¥
(1,031)
3
¥
(1,031)
3
¥
(752)
(10)
¥
(752)
(10)
–
20,000
–
Thousands of U.S. dollars
At March 31, 2011:
Interest rate swaps
Foreign exchange forward contracts
$
240,529
25,969
$
240,529
$
–
(12,410)
45
$
(12,410)
45
Note: * Fair values are calculated based on the discounted cash flow method, etc.
Derivative instruments to which hedge accounting was applied at March 31, 2011 and 2010 were as
follows:
Contract
amount
Hedged
Contract
over one
Fair
item
amount
year
value *
Millions of yen
Currency swap contracts:
As of March 31, 2011
As of March 31, 2010
Loans
Loans
¥ 1,051
¥ 1,825
¥
¥
–
–
(9)
(48)
Thousands of U.S. dollars
Currency swap contracts：
As of March 31, 2011
Loans
$ 12,644
$ (112)
–
Note: Fair values are calculated based on the discounted cash flow method, etc.
15. Income Taxes
Income taxes for the years ended March 31, 2011 and 2010 consisted of the following:
Thousands of
U.S. dollars
Millions of yen
2011
Income taxes:
Current
Deferred
2010
2011
¥
3,596
(1,030)
¥
3,462
(791)
$
43,249
(12,387)
¥
2,566
¥
2,670
$
30,862
41
At March 31, 2011 and 2010, income taxes (including enterprise tax) payable amounting to ¥1,798
million ($21,630 thousand) and ¥2,323 million, respectively, were included in “Other liabilities” in the
accompanying consolidated balance sheets.
The tax effects of temporary differences that give rise to a significant portion of deferred tax assets and
liabilities at March 31, 2011 and 2010 were as follows:
Thousands of
U.S. dollars
Millions of yen
2011
Deferred tax assets:
Reserve for possible loan losses
Reserve for employee retirement
benefits
Loss on write-down of securities
Depreciation
Others
¥
Less valuation allowance
Subtotal
Deferred tax liabilities:
Unrealized gains on
available-for-sale securities
Gain on transfer of investment
securities to trusts for
retirement benefit plan
Others
Subtotal
Net deferred tax assets
¥
8,786
2010
¥
8,443
2011
$
105,667
5,533
3,016
1,599
4,201
5,283
2,778
1,591
3,811
66,551
36,278
19,240
50,526
(5,026)
(4,743)
(60,446)
18,111
17,163
217,816
(5,265)
(9,262)
(63,320)
(4,877)
(115)
(4,877)
(115)
(58,655)
(1,384)
(10,257)
(14,254)
(123,359)
7,854
¥
2,908
$
94,457
In assessing the realizability of deferred tax assets, the management of the Group considers whether
some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the periods in which those
temporary differences become deductible. At March 31, 2011 and 2010, a valuation allowance was
provided to reduce the deferred tax assets to the extent that the management believed the deferred tax
assets would not be realized.
The Group is subject to Japanese national and local income taxes which in aggregate resulted in an
effective statutory tax rate of approximately 40.5%. A reconciliation between the Japanese statutory
effective tax rate and the actual effective income tax rate on pre-tax income reflected in the
accompanying consolidated statements of income for the year ended March 31, 2011 and 2010 were
not disclosed because the difference was not material.
42
16. Comprehensive Income
Comprehensive income for the year ended March 31, 2010 was as follows:
Millions of yen
Comprehensive income attributable to:
Owners of the parent
Minority interest
Total comprehensive income
¥
18,218
232
¥
18,451
Other comprehensive income for the year ended March 31, 2010 was as follows:
Millions of yen
Net change in unrealized gains on
available-for-sale securities
Net change in deferred losses on hedging
instruments
¥
14,370
0
Total other comprehensive income
¥
14,370
17. Related Party Transactions
During the years ended March 31, 2011 and 2010, the Bank had significant transactions with the
Bank’s directors and corporate auditors, or their immediate families and/or the companies in which
they hold a majority voting interest.
A summary of the significant related party transactions as of and for the years ended March 31, 2011
and 2010 is as follows:
Thousands of
U.S. dollars
Millions of yen
2011
For the year:
Number of related parties
New lending loan transactions
At year-end:
Loans and bills discounted
2010
¥
10
126
¥
120
43
2011
¥
7
82
$
1,523
¥
77
$
1,450
18. Subsequent Event
Shareholders of the Bank approved the following appropriation of retained earnings at the annual
general meeting held on June 24, 2011:
Millions of
yen
Cash dividends (¥3.50 per share)
¥
716
Thousands of
U.S. dollars
$
8,615
19. Segment Information
Effective from the year ended March 31, 2011, the Group has adopted the “Accounting Standard for
Disclosures about Segments of an Enterprise and Related Information” (ASBJ Statement No. 17, on
March 27, 2009) and the “Guidance on Accounting Standard for Disclosures about Segments of an
Enterprise and Related information” (ASBJ Guidance No. 20, on March 21, 2008). Information about
industry segments as of and for the year ended March 31, 2010 has been restated in conformity with the
requirement of the new standard in the table below.
(a) General information about reportable segments
The Group defines a reportable segment as a component of the Group for which separate financial
information is available and whose operating results are regularly reviewed by the Board of Directors to
make decisions about resources to be allocated to the segment and assess its performance.
The Group engages in financial services primarily in banking and also in comprehensive finance leasing
services. The reportable segments of the Group are determined based on the type of financial services as
follows:
“Banking” –– head office and branches
• Deposits and loans
• Domestic and foreign exchange transactions
• Securities investments
• Trading of marketable securities
• Underwriting and registration of corporate bonds
“Leasing” –– Nagoya Lease Co., Ltd., a domestic subsidiary of the Bank
• Comprehensive finance leasing business
(b) Basis of measurement about reported segment profit, segment assets, segment liabilities and other
material items
The measurement basis for the operating segment information follows the accounting principles used in
the consolidated financial statements as described in Note 2, “Summary of Significant Accounting
Policies”. The measure of segment profit is “Ordinary income”, which is defined as total income less
certain special income included in the accompanying consolidated statements of income, and
intersegment profit is accounted for based on prices of ordinary transactions with independent third
parties.
44
(c) Information about reported segment profit, segment assets, segment liabilities and other material items
Segment information as of and for the years ended March 31, 2011 and 2010 is as follows:
Reported segment
Banking
For the year 2011:
Ordinary income (*1):
External customers
Intersegment
¥
53,733
195
Leasing
¥
Other (*2)
Total
Millions of yen
13,576
329
¥
67,310
525
¥
Total
1,807
527
¥
69,117
1,052
Segment profit
53,929
5,281
13,906
733
67,835
6,014
2,334
313
70,170
6,328
Segment assets
2,999,417
32,284
3,031,701
10,965
3,042,666
Segment liabilities
2,840,263
28,177
2,868,440
6,729
2,875,170
Other material items:
Depreciation and amortization (*3)
Interest income
Interest expenses
Provision for possible loan losses
Changes in tangible and intangible fixed
assets
¥
1,439
41,339
3,221
3,418
¥
391
6
361
138
1,551
¥
59
1,830
41,346
3,582
3,556
¥
1,610
8
320
15
200
¥
11
1,838
41,667
3,598
3,757
1,622
Reported segment
Banking
For the year 2010:
Ordinary income (*1):
External customers
Intersegment
¥
55,029
216
Leasing
¥
14,011
363
Other (*2)
Total
Millions of yen
¥
69,041
580
¥
Total
1,787
575
¥
70,829
1,156
Segment profit
55,246
6,357
14,375
553
69,621
6,911
2,363
431
71,985
7,342
Segment assets
3,002,238
34,911
3,037,149
10,942
3,048,092
Segment liabilities
2,837,890
30,565
2,868,456
7,373
2,875,829
Other material items
Depreciation and amortization (*3)
Interest income
Interest expenses
Provision for possible loan losses
Changes in tangible and intangible fixed
assets
¥
1,479
43,511
5,331
2,470
1,994
¥
412
7
434
146
225
¥
1,892
43,518
5,765
2,616
2,219
¥
5
379
24
173
7
45
¥
1,897
43,898
5,790
2,790
2,227
Reported segment
Banking
For the year 2011:
Ordinary income (*1):
External customers
Intersegment
$
646,228
2,352
Leasing
$
Other(*2)
Total
Thousands of U.S. dollars
163,278
3,966
$
809,506
6,318
$
Total
21,739
6,338
$
831,245
12,656
Segment profit
648,580
63,521
167,244
8,817
815,824
72,338
28,077
3,768
843,901
76,106
Segment assets
36,072,365
388,267
36,460,632
131,873
36,592,505
Segment liabilities
34,158,308
338,876
34,497,184
80,934
34,578,118
Other material items:
Depreciation and amortization (*3)
Interest income
Interest expenses
Provision for possible loan losses
Changes in tangible and intangible fixed
assets
$
17,315
497,173
38,742
41,116
18,658
$
4,704
83
4,342
1,662
710
$
22,019
497,256
43,084
42,778
$
19,368
97
3,853
190
2,415
$
139
22,116
501,109
43,274
45,193
19,507
Notes: 1. “Ordinary income” represents total income less certain special gains included in the accompanying consolidated statements of income.
2. The “Other” business segment included principally credit card, guarantor operations, and clerical outsourcing business.
3. Depreciation and amortization includes amounts relating to information technology investments.
46
(d) Reconciliation of the totals of each segment items to corresponding the Group’s amounts
Thousands of
U.S. dollars
Millions of yen
2011
Ordinary income:
Total reported segment
Other
Intersegment elimination
Amortization of negative
goodwill
Special gains
Total income on consolidated
statements of income
Segment profit:
Total reported segment
Other
Intersegment elimination
Amortization of negative
goodwill
Special gains (losses), net
Income before income taxes and
minority interests on
consolidated statements of
income
Segment assets:
Total reported segment
Other
Intersegment elimination
Total assets on consolidated
balance sheets
Segment liabilities:
Total reported segment
Other
Intersegment elimination
Negative goodwill
Total liabilities on consolidated
balance sheets
¥
2010
67,835
2,334
(1,052)
¥
2011
69,621
2,363
(1,156)
$
815,824
28,077
(12,656)
150
150
1,814
69,268
34
70,979
6
833,059
410
¥
69,302
¥
70,985
$
833,469
¥
6,014
313
(9)
¥
6,911
431
(9)
$
72,338
3,768
(110)
¥
150
150
1,814
6,469
(175)
7,484
(733)
77,810
(2,112)
6,294
¥
6,751
$
75,698
¥ 3,031,701
10,965
(14,251)
¥ 3,037,149
10,942
(14,577)
$ 36,460,632
131,873
(171,399)
¥ 3,028,414
¥ 3,033,515
$ 36,421,106
¥ 2,868,440
6,729
(11,755)
75
¥ 2,868,456
7,373
(12,070)
226
$ 34,497,184
80,934
(141,379)
907
¥ 2,863,490
¥ 2,863,986
$ 34,437,646
47
Millions of yen
2011
Other material items:
Depreciation and amortization
Interest income
Interest expenses
Provision for possible loan losses
Changes in tangible and intangible
fixed assets
Total reported
segment
¥
1,830
41,346
3,582
3,556
Other
¥
1,610
8
320
15
200
Reconciliation
¥
–
(106)
(107)
–
11
–
Consolidated
¥
1,838
41,560
3,490
3,757
1,622
Millions of yen
2010
Other material items:
Depreciation and amortization
Interest income
Interest expenses
Provision for possible loan losses
Changes in tangible and intangible
fixed assets
Total reported
segment
¥
1,892
43,518
5,765
2,616
2,219
Other
¥
5
379
24
173
7
Reconciliation
¥
–
(121)
(119)
–
–
Consolidated
¥
1,897
43,776
5,670
2,790
2,227
Thousands of U.S. dollars
2011
Other material items:
Depreciation and amortization
Interest income
Interest expenses
Provision for possible loan losses
Changes in tangible and intangible
fixed assets
Total reported
segment
$ 22,019
497,256
43,084
42,778
19,368
48
Other
$
97
3,853
190
2,415
139
Reconciliation
$
–
(1,283)
(1,291)
–
–
Consolidated
$ 22,116
499,826
41,983
45,193
19,507
(e) Related information as enterprise-wide disclosure
(1) Information about services
Loans
Ordinary income from
external customers
¥ 32,972
Security
investments
¥ 13,099
Leasing
Millions of yen
2011
¥ 13,576
Other
¥
Total
9,469
¥
69,117
Thousands of U.S. dollars
2011
Ordinary income from
external customers
$ 396,544
$ 157,541
$ 163,278
$ 113,882
$ 831,245
(2) Information about geographical areas for the years ended March 31, 2011 and 2010 is omitted since
income accounted for in Japan was more than 90% of the total consolidated income and all tangible
fixed assets were located in Japan.
(3) Information about major customers for the year ended March 31, 2011 is omitted since there was no
single external customer accounting for 10% or more of the consolidated income.
(f) Information about impairment loss on fixed assets in reported segment
Impairment loss on fixed assets
Impairment loss on fixed assets
Reported segment
Banking
Leasing
Total
Other
Millions of yen
2011
¥
163
¥
–
¥
163
¥
–
$
1,971
Thousands of U.S. dollars
2011
–
$ 1,971
$
$
(g) Information with regard to goodwill in reported segments: None.
49
–
Total
¥
163
$
1,971