The 7th Japanese Financial Service Conference
- Mizuho in a New Phase -
September 2005 Agenda
1. Summary of Financial Results up to the First Quarter of FY2005 P.3-4
2. New Business Strategy and Medium-term Business Plan P.5-10
3. Securing a Sustainable Growth Track P11-13 - Core Business Strategies of 3 Global Groups
4. Securing a Sustainable Growth Track P14-22 - Mizuho Bank’s Retail Banking Strategies 1) Enhance Profitability of “Mass-Retail Transactions” P15-16 2) Strengthen Loan Business for Individuals P17-18 3) Enhance Consulting Functions P19-21 4) Reassemble Channel Network P22
5. In Closing P23 Mizuho Financial Group, Inc.
Mizuho Holdings Trust & Mizuho Asset Custody Other Group Trust & Management Mizuho Services Companies Mizuho Mizuho Banking Companies Corporate Advisory Bank Bank Bank
Mizuho Mizuho Investors Financial Securities Subsidiaries Securities which Specialize in Corporate Revitalization Shinko * Securities * An affiliate under equity method
Definitions 3 Banks: Aggregated figures for Mizuho Bank, Mizuho Corporate Bank, Mizuho Trust & Banking and their financial subsidiaries for corporate revitalization on a non-consolidated basis 2 Banks: Aggregated figures for Mizuho Bank, Mizuho Corporate Bank and their financial subsidiaries for corporate revitalization on a non-consolidated basis
1 A New Phase in Management Strategies
Management Focus on Increasing Profits through Top-line Growth
Mizuho Stock Price *
Aug.31, 2005 JPY 614,000 FY2004 April 2005 Entered into a New “Channel to Discovery” Plan Phase to Maximize Medium-term Business Plan Top-line Growth
Mar. 31, 2005 JPY 507,000 Steady Progress in FY2004 Progress toward Four Challenges Management Reforms 1. Resolution of Financial Issues 2. Acceleration of Cost-cutting Efforts 3. Repurchase and Cancellation of FY2002-2003 Preferred Shares (Public Funds) 4. Completion of IT Systems Integration Implemented a Series of Mar. 31, 2004 JPY 448,000 July 2003 Launch of “Corporate Revitalization Project” Management Reforms (950 corporate customers / JPY 4.5Tn financial claims) by Leveraging a Apr. 28, 2003 JPY 58,300 March 2003 Reformation of Group Management Structure Lowest price since listing “Sense of Crisis” (“Business Reorganization”) (during trading hours) February - March 2003 Execution of Drastic Financial Actions and Mar. 31, 2003 JPY 96,800 Capital Raising of JPY 1.1Tn November 2002 Announcement of “Change & Speed-Up Program” April 2002 Start of Operations under a Corporate Structure Legally Separated Mar. 31, 2002 JPY 302,000 According to Customer Segmentation and Business Function * Closing price on TSE. The stock price of Mizuho Holdings, Inc. before March 5, 2003 2 1. Summary of Financial Results up to the First Quarter of FY2005
3 Summary of Financial Results 1,000 Steady Financial Results 16,000 Improvement in EPS (JPY800 Bn) (JPY) Earnings per Share Consolidated Net Business Profits + Credit Costs 14,000 Fully Diluted EPS EPS 600 First Quarter 12,000
400 10,000
200 8,000
～ 0 6,0000 FY2003 FY2004 FY2005 Jun. 2004 Jun. 2005 Steady Reduction in NPLs Further Improvement in Quality of Capital
(JPY Tn)4 (Consolidated)60 2 DTAs NPL Balance (JPY Tn) (%) (3 Banks) Net DTAs 50 Net DTAs/Tier1 Ratio 40 2 30 1
20
10 0 Mar. 2003 Mar. 2004 Mar. 2005 Jun. 2005 NPL Ratio 6.2% 4.4% 2.1% 2.1% 0 0 Net NPL Ratio 3.8% 2.1% 0.7% Mar. 2003 Mar. 2004 Mar. 2005 Jun. 2005 4 2. New Business Strategy and Medium-term Business Plan
5 New Business Strategy: “Channel to Discovery” Plan
“Future-minded and Customer-oriented” Management Strategies
“Channel to Discovery” Plan Aiming to be “a financial partner that helps customers shape their future” as an “enterprising, open, and leading-edge” financial group
Reorganization of business structure into U.S./European style “3 Global Business Portfolio Strategy Groups”, on which “customer needs” are placed as a key concept: including the establishment of a PB company; business collaborations with 3 U.S. banks; and a new advisory company for financial institutions
Measures aimed at the creation of a globally competitive financial group: Corporate Management Strategy listing on the NYSE; promotion of CSR activities; and a new branding strategy
! Establish stable core earnings base, and accumulate retained earnings Medium-term Business Plan (FY2005 - FY2007) ! Enhance top-line earnings by strategically investing management resources into areas of growth
Net Business Market Full Repayment “AA” Credit Profits of Capitalization of 4 New Targets of Public Funds Ratings JPY 1Tn JPY 10Tn
6 Towards Full Repayment of Public Funds " Aim to complete full repayment of public funds preferred shares by the end of FY2006 by steadily accumulating retained earnings " The remaining amount of public funds reduced to JPY 850Bn by repurchase and cancellation of JPY616.4Bn (on an issued-price basis) in August 2005
Securing Sufficient Resources for Repayment Repayment of Public Funds Preferred Shares
Balance of Public Funds Details of Repurchase and Cancellation on August 29 (JPY3,000 Bn) # Total: JPY693.0Bn (JPY616.4Bn on an issued-price basis) nd rd Subordinated Bonds # Target Shares: 2 Series/Class II, 3 Series/Class III 1,000.0 Preferred Shares 8th Series/Class VIII, 10th Series/Class X 325.0 Fully Cancelled 2,000 Details of Remaining Preferred Shares
Target Shares Amount Type 1,000 1,949.0 1,949.0 4th Series/Class IV JPY300Bn Non-convertible 1,466.4 850.0 6th Series/Class VI JPY300Bn Non-convertible
0 7th Series/Class Convertible (redeemable at par Sep. 2002 Mar. 2004 Mar. 2005 Aug. 2005 JPY250Bn VII at our option until Sep. 30, 2006) Balance of Retained Earnings* No increase in future repayment amounts due to stock ** (Business Revitalization Plan) (JPY Bn) price fluctuations Remaining Repurchase Limits for Preferred Shares Mar. 2005 Mar. 2006 Mar. 2007 after Repurchase on August 29 1,569.8 2,492.5 2,907.1 # Remaining Repurchase Limit (valid until the closing of the next regular general meeting of shareholders) : JPY277Bn** * Aggregated Retained Earnings of Mizuho Financial Group, Mizuho Bank, Mizuho Corporate Bank, Mizuho Trust & Banking, Mizuho Securities **With respect to actual repurchase, we will act in an appropriate manner by Figure in March 2005 includes that of Mizuho Holdings consulting with the relevant authorities in light of the Revitalization Plan
7 Business Portfolio Strategy
Reorganization into 3 Global Groups which positions customer needs as a key concept
[After Reorganization]
Reorganization of strategic Mizuho Bank subsidiaries in the retail 2 banking business under Mizuho Bank (scheduled in autumn 2005) (new)
Business collaborations with 3 5 leading U.S. banks in retail and 3 asset management businesses Services Bank Services & Custody Trust Companies Management Asset (started from April 2005) Securities Investors Mizuho Mizuho Securities
Re-formation of Mizuho Holdings into an advisory 4 company “Mizuho Financial Strategy” (scheduled on October 1, 2005) ShinkoShinko SecuritiesSecurities 2 Completion of the role of Mizuho Capital financial subsidiaries for UC Card 5 corporate revitalization Mergers with parent banks (scheduled on October 1, 2005)
* The above measures are subject to the appropriate regulatory approvals and other procedures in Japan and all other relevant countries 8 Corporate Management Strategy
Establishment of the “Mizuho Brand” which befits a globally active financial group
ListingListing on on the the CorporateCorporate Social Social NewNew Branding Branding NewNew York York ResponsibilityResponsibility StrategyStrategy StockStock Exchange Exchange (CSR)(CSR) Activities Activities
•• Ensure Ensure transparencytransparency ofof PreparePrepare forfor listinglisting onon -- Strengthen Strengthen internalinternal controlscontrols forfor financialfinancial reportingreporting andand relatedrelated disclosure disclosure corporate governance in compliance with the Sarbanes-Oxley Act of 2002 corporate governance the New York Stock in compliance with the Sarbanes-Oxley Act of 2002 1 • Improve confidence of the New York Stock -- Disclosure Disclosure inin accordanceaccordance withwith U.S.U.S. GAAP,GAAP, consideredconsidered oneone ofof thethe globalglobal • Improve confidence of standards investors ExchangeExchange (NYSE)(NYSE) standards investors -- Established Established DisclosureDisclosure CommitteeCommittee inin thethe holdingholding companycompany (April(April 2005)2005)
•• Exercise Exercise responsibilityresponsibility asas aa -- Position Position CSRCSR activitiesactivities asas “major“major pillarpillar ofof corporatecorporate behaviorbehavior forfor thethe PromotePromote CorporateCorporate creationcreation andand developmentdevelopment ofof aa newnew corporatecorporate value”value” globalglobal corporatecorporate groupgroup Social Responsibility -- Enhance Enhance initiativesinitiatives forfor protectingprotecting thethe environmentenvironment andand forfor supportingsupporting 2 • Contribute to economic Social Responsibility educational programs for finance • Contribute to economic (CSR) Activities educational programs for finance developmentdevelopment (CSR) Activities -- Encourage Encourage responsiveresponsive dialoguesdialogues withwith stakeholdersstakeholders -- Established Established CSRCSR CommitteeCommittee inin thethe holdingholding companycompany (May(May 2005)2005)
EstablishEstablish aa brandbrand whichwhich StrengthenStrengthen BrandingBranding -- Establish Establish “Mizuho“Mizuho Brand”:Brand”: aa financialfinancial groupgroup thatthat isis “enterprising,“enterprising, open,open, embodies a “future-minded and leading-edge” 3 embodies a “future-minded Strategy to establish and leading-edge” andand customer-oriented”customer-oriented” Strategy to establish -- Reorganized Reorganized thethe PublicPublic RelationsRelations intointo thethe CorporateCorporate CommunicationsCommunications “Mizuho Brand” (May(May 2005)2005) corporatecorporate groupgroup “Mizuho Brand”
9 Medium-term Business Plan Increase top-line earnings by investing management resources into the retail banking business and other areas of growth " Gross Profits: +JPY 380Bn, 23% increase Profits Plan (3 Banks) (FY2007(plan) over FY2004(actual)) Global Asset & Wealth Management Group: Mizuho Trust & Banking [Breakdown] Global Corporate Group: Mizuho Corporate Bank (JPY Bn) Global Retail Group: Mizuho Bank $ Global Retail Group # Gross Profits: +JPY 250Bn, 27% increase # Expense Ratio: 61% (FY2004) % approx. 45% (FY2007) $ Global Corporate Group # Gross Profits: +JPY 100Bn, 17% increase 2,000 # Non-Interest Income Ratio: 33%(FY2004)%approx.45%(FY2007) $ Global Asset & Wealth Management Group # Gross Profits: +JPY 32Bn, 21% increase 1,500 of which revenues from trust and asset management business account for approx. 60%
1,000 " G&A Expenses: Nearly level off, including strategic expenses Expense Ratio will fall substantially due to 500 an increase in Gross Profits (FY2004: 50.9% FY2007: Approx.41%)
0 $ Further reduction in base expenses: Approx.-JPY103Bn Base (FY2007(plan) over FY2004(actual)) Expenses # Reduction in development, operating and outsourcing costs for IT systems, as a result of the IT systems integration -500 # Promotion of business process reengineering and additional consolidation of domestic branch network Strategic -1,000 Expenses $ Strategic expenses for measures to increase profits: Approx. JPY107Bn (FY2007) FY2004 FY2005** FY2006 FY2007 # Mizuho Bank: Approx. JPY43Bn – Establish framework for consulting Net Business businesses, reform branch network and channels, etc. Profits JPY800Bn JPY1,180Bn # Mizuho Corporate Bank: Approx. JPY16Bn – Expand the syndicated loan business, etc. Consolidated * # IT Systems Expenses (above 2 banks): Approx. JPY35Bn – Promote IT Net Income JPY318Bn JPY650Bn systems investments for improving customer satisfaction and reducing costs * Excluding JPY 308Bn special factor of Supreme Court’s judgment regarding Mizuho Corporate Bank’s write-off of credits against Japan Housing Loan, Inc. # Mizuho Trust & Banking: Approx. JPY13Bn – Allocate resources to growth ** Excluding JPY 120Bn in dividends from the financial subsidiaries for corporate revitalization business areas (real estate, private banking, etc.) 10 3. Securing a Sustainable Growth Track - Core Business Strategies of 3 Global Groups
11 Strategies of 3 Global Groups and “Business Alliances” Pursuit of group synergies and flexible, speedy business alliances to utilize the largest domestic customer base
Credit Saison Nikko Cordial Global Retail Group Global Corporate Group Group
JR-East Mizuho Corporate Mizuho Bank The Norinchukin Bank Bank Group Mizuho Mileage Club 14 Corporate Partners Mizuho Investors Shinko Mizuho Securities Securities Securities Monex Beans Orient Group Corporation UC Card Pursuit of 3 Regional Banks Monex Beans Group (Security Brokerage Synergies Business) Group Mizuho Capital
Wachovia Global CMS Partners: Bank Mizuho Trust & Banking China Construction Bank, Agricultural Bank of China, ABN AMRO Wells Fargo 3 Asset Mizuho Private Wealth Trust & Custody Management … Bank Management (New) Services Bank Companies
The Bank of Global Asset & Wealth New York Management Group … Kyoritsu Cornes & Insurance Galerie Nichido … Brokers of Japan Company
12 Core Business Strategies of Major Operating Subsidiaries
Mizuho Bank (Global Retail Group) Mizuho Corporate Bank (Global Corporate Group)
Mass Retail " Enhance profitability through Mizuho Mileage Club " Maintain position as the dominant leader in the syndicated loan business Individuals " Increase loans to individuals through alliance with Syndicated Loans (Market share: approx. 40%) Loans to Orient Corporation (Orico) Individuals " Increase housing loans through channel " Establish a market-oriented indirect financial expansion model
Consulting " Increase sales capacity of investment products International " Enhance overseas customer base and network Operations Channel Network " Reassemble branch network Investment " Further strengthen financing arrangement Banking business SMEs Middle Credit " Strengthen loans to Middle Credit Risk Risk Loans Corporations Solution-style " Restructure corporate revitalization business Solution Marketing Business " Promote solution business
Mizuho Trust & Banking (Global Corporate Group) (Global Asset & Wealth Management Group) Mizuho Securities
Target: " Further expand business and profitability and aim to Creation of New Consolidated achieve the medium- to long-term goal of JPY 100Bn " Launch new businesses and products Ordinary Profits of in profits Trust Business JPY 100Bn " Equity Group: Strengthen presence in primary and Increase Profits secondary markets Further Increase " Pursue group synergies " Fixed Income Group: Expand customer base and of Market Share of each Business strengthen business promotion in each industry Group for Existing " Further enhance consulting functions " Capture large-scale M&A transactions and further Business promote principal finance Enhance " Implement organizational reform, promote Business Structure globalization and develop middle and back offices and Infrastructure Reinforcement of " Proactively allocate resources to growth business areas " Nikko Cordial Group (January 2005) Management Strategic " The Norinchukin Bank Group (September 2004) Infrastructure " Establish new channel network Business " Monex Beans Group (August 2004) Alliances " Alliances with 3 Regional Banks, etc. (Securities Brokerage Business) 13 4. Securing a Sustainable Growth Track - Mizuho Bank’s Retail Banking Strategies
14 Enhance Profitability of “Mass-Retail Transactions” Mizuho Mileage Club (1)
Platform of the New Membership Service: [ Mizuho Mileage Club Card] ATM Card with Credit Card Function without Annual Fee (UC Version) (Saison Version) Mizuho Mileage Club (MMC)
Encourage “mass-retail Increase sales of customers” to upgrade investment products their status to “targeted and loans to customers” Mileage Function individuals Retention of (“Hello Kitty” Design Card) Cross-Selling Customers MMC ATM Card with Increase Cross-Selling through MMC Credit Card Function Purchase Records (Revolving Credit Function) of Credit Card Accumulate points by Enhance event driven approach Profits from investment products by utilizing credit card purchase + Credit Card Business records credit card usage and annuities
Accumulate points by Improve profitability from housing loan “mass-retail customers” + credit card usage and " Offer indefinite accumulative mileage points, which can be account of paycheck Acquire new customers used to obtain preferential conditions on deposits and loans, Accumulate points by and retain existing by banking transactions and credit card usage credit card usage & customers by " Enhance data-based marketing by sharing customer’s credit account of paycheck mileage function card purchase records Life Starting Purchasing Retirement " Share profits from credit card business with credit card Events Job House companies " Introduce state-of-the-art security protection Young Age Middle Age Elder Age (IC ATM card + IC credit card)
15 Enhance Profitability of “Mass-Retail Transactions” Mizuho Mileage Club (2)
Number of Members and Profits* of MMC Improve Card Functions and Promote Marketing
* No. of MMC Members " Introduction of new revolving credit function (Nov. 2004) (Thousands of * Customers may choose the upper limit of monthly payment members) " Improvement of services through Internet 5,000 # Provide high-quality online securities brokerage service through cooperation with Monex Beans and Mizuho Investors Securities
530 Thousand # Account aggregation service exclusive to MMC members* (Nov. 2004) * Customers are able to check their deposits, investment trusts and credit-card accounts 0 on one screen on the Web Jun. 2005 Mar. 2006 Mar. 2007 Mar. 2008 (Plan) (Plan) (Plan) " Enhance marketing methods by utilizing customer information #Examine the development of a system for promoting cross-selling Measures to Increase Memberships and joint marketing " Improve card functions by expanding the affiliations with " Expand customer base through business alliances with Corporate Partners* top brands * Services which offer bonus points for using Mizuho Mileage Club Card (credit card) at Partner # Alliance with Credit Saison: “Mizuho Mileage Club
16 Strengthen Loan Business for Individuals Approach to Consumer Credit Market
Mega Bank’s Unsecured Loan Balance for Individuals (estimates) Balance of “Captive Loans” 1. Strengthen loan business for (JPY Bn) individuals through Orico’s 1,400 Bank CFC subsidiaries (JPY Bn) 237.0 affiliated merchant network 1,200 ・Increase “Captive Loans” 1,000 200 185.5 guaranteed by Orico 800 2. Utilize Orico’s underwriting, 600 loan collection and marketing 400 100 69.6 capabilities 200 ・Transferred unsecured loan guarantee business 0 0 ・Introduce new jointly-developed Mar.04 Mar.05 Mar.08 Mar.04 Mar.05 Mar.04Mar.05 Mar.04 Mar.05 (Plan) Sep. 2004 Mar. 2005 Jun. 2005 loan products Mizuho Bank Bank A Bank B Bank C
17 Strengthen Loan Business for Individuals Housing Loan Business Strategies Current Status & Plan for Housing Loans Revision of Underwriting System & Distribution Network and Reinforcing Housing Loan Products on Fa (Long-term) Loans “Flat” Securitization-type Housing on Fa (Long-term) Loans “Flat” Securitization-type Housing Balance of Residential Housing Loans Establishment of underwriting system & distribution network responding flexibly to the market (JPY Tn) 12 " Establish underwriting system which enables same-day underwriting and capturing eligible applications by developing a 11 35 new underwriting procedure and collateral evaluation system, etc. 10 " Increase Housing Loan Centers and sales staff 9 Sep. 2004 Mar. 2005 Mar. 2006 (Plan) 8 Housing Loan Centers 75 82 100 7 Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 No. of Sales Staff 360 356 600 (Plan) (Plan) (Plan) " Continue weekend and after-hours operation of Housing Loan Centers Analysis of Mizuho’s Housing Loan Business " Expand weekend consultations for housing loans
1. Increased Competition Promote Securitization-type Housing Loans (“Flat35”) in alliance with Government Housing Loan Corp. (GHLC) ・Slightly outnumbered by competitors in volume due to operations emphasized on the quality of loans GHLC will be transformed into an Origination amount of “Flat35” independent administrative ・Weak in capturing eligible applications by slower speed institution (end of FY2006) (JPY Bn) for underwriting Further contraction of public financing by GHLC Housing loan balance rebounded during FY2004 - Capture share of above 100 market by increasing efforts 2. Steady improvement in the quality of loans for securitization-type 50 housing loans ・ Delinquency rate over 3 months is decreasing - Develop securitization market 0 (Mar. 2004: approx. 0.4% % Mar. 2005: approx. 0.3%) and establish model for fee 1H of FY2004 2H of FY2004 FY2005 business (Plan)
18 Enhance Consulting Functions Promotion of Strategies by Customer Segments
Promote Efficient Sales and Cross-Selling through Strategies by Customer Segments
Strategies by Segments Major Channels
" Enhance Consulting Function 1. Reassemble Private Banking (PB) strategies Private Bankers 2. Establish consulting services “Targeted promptly 3. Increase product lineup “Consulting Customers” (Collaborations with Wachovia, Wells Fargo, Counters” The Bank of New York, and etc.) (Approx. 800 thousand) RMDM* " Improve Data-Based Marketing
1. Promote data-based marketing Call Centers RMDB** by utilizing RMDB High/Low Counters at Branch “Mass-Retail " Promote Lower Cost Operation Customers” DM (Approx. 25 million) 1. Reassemble branch network 2. Integrate and enhance call “Mizuho Direct” Telephone Banking/ Mobile centers Banking/ Internet Banking ATM
* One to One Direct Mail **Relationship Marketing Database 19 Enhance Consulting Functions Enhance Consulting Functions Increase Sales of Investment Products through Enhancement of Consulting Functions to Targeted Customers
Balance of Investment Products AUM: Establishment of a Full-Fledged Private Banking (PB) Company Foreign Currency Deposits Individual Annuities JPY500M "Establish “Mizuho Private Wealth Management” Investment Trusts (excluding MMF) or more (scheduled on October 1, 2005) (JPY Tn) % PBs
800 Thousand Targeted Customers 6 Further Improvement of Products and AUM: Increase of Sales to High-Net Worth Customers 4 JPY100M " Enhance business strength or more • Establish new PB Department and increase staff (incl. outside hiring) 2 % PBs (Staff: 22 % 40) • Enhance development and sales of PB products (hedge fund 0 investment trusts, etc.) Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 AUM: (Plan) (Plan) (Plan) JPY30M or more Establishment of Consulting Services % 1st Class FCs " Foster and deploy staff to support consulting Mar. 2005 Sep. 2005 Mar. 2006 functions (Plan) (Plan) • 2,000 Financial Consultants (FCs) in FY2005 FCs 893 1,420 2,000 AUM: • Recruiting (500 consultants in FY2004 and FY2005) JPY10M " Enhance consulting channels • Expand installation of “Premium Salons” Premium or more Salons 26 110 250 % 2nd /3rd • Enhance channels to promote group synergies such as “Planet Booth”* Class FCs * " Improve consulting services Planet Booths 41 61 100 • Accumulate and utilize customer information " Enhance services to targeted customers * Securities consulting booths of Mizuho Investors Securities in the lobbies of Mizuho Bank branches (In addition to Planet Booths, promote group • Installed “Mizuho Premium Cub” in March 2005 synergies using video phones)
20 Enhance Consulting Functions Enhance Consulting Channels Introduce “Lobby Concierge” Install “Premium Salon”
“Lobby Concierge” Reception System Make full use of comprehensive " Guide customers according " Guide customers financial consulting skills and utilize to customer segments interfacing with RMDB “Virtual Consulting” within the Mizuho " Promote various products group (video phones)
[ Establishment of new customer interface] Mizuho Investors ATM High Counters Low Counters Securities
Deposit, withdrawal, transfer, etc. Services which ATM doesn’t provide Opening accounts, consulting Mizuho Trust & Banking
“Virtual Consulting” within the group through video phones ATM Mass-Retail Potential customers customers customers “Premium Salon” Targeted All services Lobby customers Concierge
21 Reassemble Channel Network Reassemble Branch Network
Establish Efficient & Profitable Branch Network
" Promotion of Area-Marketing Introduce “Area Branch System” (Since August 2005) - Promote retail banking services appropriate for each ・Reassemble branch network into “Area Core Branches” with segmented area full retail banking services and “Area Member Branches” with - Further strengthen ability of capturing customers small staff and space through centralization of operations and back office functions " Promotion of streamlining branch network ・Improve sales promotion capability in the area in charge by cooperation and supplement between “Area Core Branches” - Optimization of branch functions & scale through and “Area Member Branches” centralization of operations (Cost-cutting through abolishing full service branches) Open approx. 100 Streamlined Branches by around the end of March 2008* ・Enhance ability of capturing market through opening a certain number of streamlined branches in areas with high market potential
Area Core Full Service Branch Centralization Branch Optimization of Full Service Branch of Operations Scale Area Member Branch
Area Member Full Service Branch Optimization of Branch Scale Area Member New Branch Full Service Branch Area Member Branch Branch
* On the “Business Revitalization Plan” basis 22 5. In Closing
23 This announcement contains forward-looking statements that are based on our current expectations and are subject to significant risks and uncertainties. Actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in overall economic conditions, changes in market rates of interest, declines in the value of equity securities or real estate, the deterioration of the quality of loans to certain industry sectors and the effect of new legislation or government directives. We disclaim any obligation to update or revise the forward-looking statements, except as may be required by any applicable laws and regulations. This document is prepared in order to provide information and does not constitute an offer for sale or solicitation for investment or other similar activity in or outside of Japan.