INTEGRATED REPORT 2020 for the Fiscal Year Ended March 31, 2020 Digest Version Management Principles

INTEGRATED REPORT 2020 For the fiscal year ended March 31, 2020 Digest Version Management Principles

The Shinsei Bank Group has established the following Management Redesigning Finance Principles and is working on a day-by-day basis toward their attainment. The Shinsei Bank Group is working to promote the Medium-Term Management Strategy, “Redesigning Finance” that started in fiscal 2019, both inside and outside the Group. To become a banking group that is sought out by customers, and contributes to the development of both domestic and international industrial economies, while maintaining stable profitability.

Design Concept The font color, which has an alternating blue and gray To become a banking group that values diverse talents and cultures design concept, expresses the value co-creation business and is constantly taking on new challenges presented by change, model that brings together services of not only the Shinsei based on its experiences and history. Bank Group but also other companies. The object in human form in the center of the word “finance” symbolizes our stance connecting people with finance to provide valuable new financial services.

Initiatives and External Recognition To become a banking group that strives for highly transparent management and values that is trusted by all stakeholders including Participation in United Nations Global Compact Principles for Financial Action for Women’s Empowerment Principles customers, investors, and employees. Initiatives the 21st Century (WEPs)

30% ClubJapan Equator Principles Task Force on Climate-related Financial Disclosures (TCFD)

ESG Index MSCI Bloomberg Gender-Equality Index

THE INCLUSION OF SHINSEI BANK, LIMITED IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF SHINSEI BANK, LIMITED BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Awards and Accreditation Kurumin Companies with Best Continual Efforts in IR

1 Evolution of the Shinsei Bank Group

Shinsei Bank Launched First Medium-Term Second Medium-Term Third Medium-Term Medium-Term Management Plan Management Plan Management Plan Strategies Fiscal 2019 Business Topics EPS (yen) (FY2010~2012) (FY2013~2015) (FY2016~2018) (FY2019~2021)BPS（yen） 2019 1,000 4,000 3,913 June Institutional Business ESG Established Japan Impact Investment II Limited Partnership as infrastructure for supporting and 750 3,000 developing startups aiming to solve social challenges August Shinsei Bank Group Major shareholder sold its shares

500 2,000 Individual Business Institutional Business Commenced “Shinsei Bank Smart Money Lending” for Docomo users

December Individual Business 250 Allocated reserves in connection with 1,000 its Consumer Finance business Launched a joint finance business for USEN-NEXT GROUP customers by USEN-NEXT HOLDINGS and the Shinsei Bank 190 Group 2020

0 0 January Individual Business Posted impairment losses and allocated ～～～ Established Credd Finance Co., Ltd. to offer credit services reserves in order to address dramatic ～～～ Posted impairment losses and allocated reserves in Posted impairment losses and to foreign residents in Japan with Seven Bank, Ltd. ～ changes in statutory and regulatory allocated reserves in connection connection with its Consumer Finance business ～～ requirements as well as operating conditions with its overseas assets in response as well as real estate-related and non core assets ～ in its consumer finance business -1,000 to the global financial crisis -1,000 Institutional Business ESG Shinsei Corporate Investment Limited received the “Tokyo Financial Award 2019-ESG Investment Category” FY 2000 2005 2010 2013 2016 2019 Institutional Business ESG Note: Shinsei Bank executed a 1-for-10 reverse stock split on October 1, 2017. Established a Sustainable Impact Development Division Per share data is calculated on the assumption that the said reverse stock split was executed prior to fiscal 2017. February The Shinsei Bank Group External Environment Transition of Stock Institutional Business ESG Announced support for TCFD (Task Force on Climate- 1952 2000 2005 2011 2019 Related Financial Disclosures) recommendations The Long-Term Credit Bank of Shinsei Bank launched Launched 32 colors of new cash cards for retail Issuance of new shares through international Acquired all shares of Financial Japan Co., Ltd. Japan, Limited established Name changed from The Long-Term Credit Power-Flex account customers offering Institutional Business Bank of Japan, Limited (LTCB), to Shinsei Bank, Showa Leasing Co., Ltd. converted into a consolidated Showa Leasing Co., Ltd. acquired the shares of Commenced cloud factoring service through “anew 1998 Limited subsidiary 2016 SHINKO LEASE CO., LTD. G.K.”, which was established by OLTA and Shinsei Bank Collapse of the IT bubble economy End of the government guarantee on full savings deposits Due to business failures, Showa Leasing Co., Ltd. converted into a Formulated “Redesigning Finance” Medium- temporary nationalization and wholly-owned consolidated subsidiary Term Strategies (fiscal 2019 to 2021) March special public management Preferred stock capital injection and a partial 2006 Individual Business reduction of preferred stock capital without began based on the Financial Shinsei Financial Co., Ltd. entered the Started providing partner companies with “BANKIT®”, a compensation Partial repayment of public funds Implemented a secondary offering of shares of Revitalization Law unsecured personal loan business in Vietnam common stock of the Bank Neobank Platform March 2000 Cancellation of treasury shares Introduction of negative interest rate policy Acquired treasury stock The Long-Term Credit Bank 2001 April of Japan, Limited was bought Acquisition of treasury shares Institutional Business ESG Shinsei Securities Co., Ltd. commenced COVID-19 crisis out by New LTCB Partners CV, operations 2007 Adopted Equator Principles a US private equity SHINKI Co., Ltd. (now Shinsei Personal Loan Co., Ltd.) investment consortium 2017 2003 converted into a consolidated subsidiary June comprised of Ripplewood Established the “Shinsei Bank Group ESG Holdings and J.C. Flowers & Shinsei Investment Management Co., Ltd. Conversion of preferred stock into common stock Headquarters” Co. LLC Commenced operations Introduced a restricted stock compensation plan for Acquisition of treasury shares outside directors Reduction of capital through the merger of two shares of common stock into one share Merger of 10 shares of common stock into one 2008 share Individual Business Institutional Business Bankruptcy of Lehman Brothers Concluded an agreement to acquire stocks of UDC 2004 2018 Finance Limited to make it a wholly-owned subsidiary Issuance of new shares by third-party allotment APLUS Co., Ltd. (now APLUS FINANCIAL Co., Shinsei Financial Co., Ltd. launched a new Ltd.) converted into a consolidated subsidiary Conversion of preferred stock into common stock “Lake ALSA” brand, an unsecured loan product Institutional Business Participated to consider establishment of a joint Listed the Bank’s common stock on the First GE Consumer Finance Co., Ltd. (now Shinsei Financial Determination of “Shinsei Bank Smart Money venture company to promote regional revitalization Section of the Tokyo Stock Exchange Co., Ltd.) converted into a consolidated subsidiary Lending” for Docomo users Converted the Bank’s long-term credit bank charter to an ordinary bank charter 2010 Alliance established with Global Trust Networks, Co. to establish fund to aid international European debt crisis students

Acquisition and cancellation of treasury stock

2 The Shinsei Bank Group’s Business, Products and Services

Group Business Profile The Shinsei Bank Group’s Products and Services

The Shinsei Bank Group continues to proactively identify underserved customer The Shinsei Bank Group leverages its strengths to provide unique, hybrid, and needs, which are not met by conventional financial products and services. At the seamless products and services, while keeping the social megatrends. same time, we provide solutions to these needs as a financial enterprise group. Targeting both individual and corporate customers, we harness the functions within the Group to deliver unique financial products and services.

Individual Business The Individual Business is composed of the retail banking business and consumer finance which provides products and services such as unsecured loans, credit cards, shopping credit and payment services for individual customers. Individual Business Institutional Business

Unsecured Loans

Shopping Credit Retail Banking Corporate Business Markets Business

Credit Cards

Leasing

Payment

Other Global Markets Businesses Consumer Finance Structured Finance Project Finance

Shinsei Financial Housing Loans Principal Transactions

Mutual Funds, Real Estate Finance Insurance

APLUS FINANCIAL JPY / FCY Deposits, Products and Services for Corporate and Structured Deposits Financial Institutions Showa Leasing

Private Equity

The Institutional Business is composed of the corporate business, structured finance business, private equity investment and business succession financing business, Individuals (including inbound leasing business, as well as delivering market services that and outbound travelers, Large, medium and small enterprises / financial institutions / provide market solutions for foreign exchange and interest foreigners, and individual public-sector entities / institutional investors business operators) rate derivatives among others. Institutional Business Customers

3 Financial and Nonfinancial Highlights

Financial Highlights Nonfinancial Highlights

Operating Assets Deposits Ratio of Outside Directors on the Board of Directors Ratio of Female Executives

（Trillions of yen) （Trillions of yen) ¥7.9 trillion 8 8 ¥6.3 trillion 71.4％ 28.6％ 6 6

4 4

2 2

0 0 （End of Mar.) 16 17 18 19 20 （End of Mar.) 16 17 18 19 20

Ratio of Nonperforming Claims Classified under the Total Revenue / Profit Attributable to Owners of Financial Revitalization Law to Total Claims the Parent Number of Registered Side Work / Concurrent Work Arrangement of Renewable Energy Project Finance (Nonconsolidated)

（％) (Billions of yen) (Billions of yen) (Employees) (Billions of yen) 1.00 250 ¥239.9 billion 100 60 57 employees 150 ¥138.5 billion

200 80 50 120 0.75 40 150 ¥45.5 60 90 billion 0.50 0.34％ 30 100 40 60 20 0.25 50 20 10 30

0.000 0 0 0 0 （End of Mar.) 16 17 18 19 20 （FY） 15 16 17 18 19 （FY） 18 19 （FY） 17 18 19

Total Revenue (Left) Profit Attributable to Owners of the Parent (Right)

Expenses / Expenses-to-Revenue Ratio Common Equity Tier 1 Ratio (International Standard) Ratio of Female Managers “MoneyConnection®” Financial Literacy Program (Management Accounting Basis)

(Billions of yen) （%）（%）（％） (Schools) 148,577 (Students) students 300 75 35 32.7％ 1,500 150,000 62.3％ 14 1,158 11.3％ 30 12 1,200 schools 120,000 25 200 50 10 17.8％ 900 90,000 ¥149.5 billion 8 20 6 15 600 60,000 100 25 4 10 300 30,000 2 5 0 0 0 0 0 0 （FY） 15 16 17 18 19 （End of Mar.) 16 17 18 19 20 （FY） 17 18 19 （FY） 17 18 19

Expenses (Left) Expenses-to-Revenue Ratio (Right) Section Leader-Level or Higher Cumulative Number of Schools Where the Program Was Held (Left) Section Manager-Level or Higher Cumulative Number of Student Participants (Right)

4 At a Glance

Individual Business Institutional Business

Total Revenue Ordinary Business Profit after Net Credit Costs Total Revenue Ordinary Business Profit after Net Credit Costs

65% 47% 32% 48%

(Billions of yen) ¥156.6 billion (Billions of yen) (Billions of yen) ¥76.8 billion (Billions of yen) 160 30 80 30 ¥24.6 billion ¥23.9 billion 120 60 20 20

80 40

10 10 40 20

0 0 0 0 （FY） 17 18 19 （FY） 17 18 19 （FY） 17 18 19 （FY） 17 18 19

Note: The percentage figures do not add up to 100% due to the contribution of Corporate / Other.

Major Businesses Major Businesses

Retail Banking Yen / foreign currency deposits, structured deposits, investment trusts, Corporate Business Provision of financial products, services and advisory services for securities brokerage services (through a partner institution), life and corporations, public-sector entities and financial institutions, healthcare nonlife insurance (through partner institutions), housing loans, provision of finance business, trust banking business financial transactions and services for individuals Structured Finance Real estate-related nonrecourse finance and corporate finance, project Shinsei Financial Unsecured loans and credit guarantees finance, specialty finance including M&A-related finance (Shinsei Financial, Shinsei Bank Card Loan L (former Shinsei Bank Lake), NOLOAN, Lake ALSA) Principal Private equity, credit trading, business succession finance and asset- backed investment, etc. APLUS FINANCIAL Shopping credit, credit cards, loans and payment services Transactions

Showa Leasing Financial products and services focused around lease finance

Other Individual Other subsidiaries Markets Business Foreign exchange, derivatives, equity-related and other capital markets business Business Other Global Securities business, asset management business, wealth management business Markets Businesses

5 Corporate Value Creation Mechanism

Seamlessly integrating the Group’s management resources that cross over a wide range of corporate entities and industries, Shinsei Bank is looking to directly help realize a society that can enjoy the benefits of financial and nonfinancial products and services that meet the underserved needs of individual customers and Created Value companies through a process of co-creation with external partners. Society in 2030

The Shinsei Bank Core Strategy Group’s Value Grow through Creation Process Value Output Outcome Co-Creation Access to finance Business Model Society-Related Capital Core Strategy Fund flows that fit  Improve access to finance Enhance / society’s needs  Build and plan ecosystems in partnership with Leverage Our companies in other industries Solutions through Capabilities Input  Deeper understanding of our customers integration with  Maintain higher level of customer satisfaction Self-Contained Model Value Co-Creation Model external services Deploy Ranked in the top three in “Internet Banking” products / services category of Oricon’s customer satisfaction survey Fulfill our social Human Resources know-how for three consecutive years responsibilities Value creation from Generation of synergies by integrating data,  Diverse human resources that internal resources know-how with external services generates innovative ideas Consolidated employees: 5,349 Intellectual Capital

 Provide customer-centric financial function and Quick, flexible business deployment Greater value for our customers solution Organization  Provide financial literacy program “MoneyConnection®” financial literacy program Enhance  An organizational structure that cumulative number of student participants products / services enables customer-oriented business Flexible Internalized Deeper (since fiscal 2007): 148,577 know-how Finance as response to products / understanding of a Service customer needs services our customers Natural Capital Operation  Financing renewable energy projects  Stable and productive operating Results of bilateral and joint arrangement: ¥138.5 billion system

Source of Our Strengths Growth Opportunities Human and Organizational Capital  Active participation of women in the workplace Information Financial Management Governance Ratio of females at the executive officer level: Capital Strengths Technology Technology Infrastructure 17.1%  Financial infrastructure supporting Ratio of females at the section manager-level or higher: 32.7% “Redesigning Finance”  An organizational structure that allows a Operating assets: ¥7.9 trillion competitive and diverse human resource Deposits: ¥6.3 trillion Foundation for meeting Address social and Fulfill our social Number of employees registering concurrent our goals / responsibilities environmental issues responsibilities business or side business: 57  Access to finance  Fund flows that fit society’s needs  Social infrastructure services Financial Capital  Solutions through integration with  Customer-oriented services external services  ROE 5.1%  Common Equity Tier 1 (CET 1) Ratio 11.3%

(As of March 31, 2020)

Priority Management Issues (Materiality)

Capital Expertise and Execution Operations Governance People Organization 6 CEO Message

Overview of Medium-Term Strategies

Capabilities Business Model Created Value

Core Strategy Core Strategy Sustainable Growth

Address social and Enhance / Leverage Grow through Value Co-Creation environmental issues Our Capabilities Fulfill our social Input Output responsibilities People Foundation for Value Organization Self-Contained meeting our goals / Co-Creation Model responsibilities Model Operations Profitability Hideyuki Kudo Capital President and Chief Financial Targets Executive Officer

Row out on the Ocean Under the Name of “New Normal” with a Ship Called Materiality for the Shinsei Bank Group: Opportunities and Risks

“Redesigning Finance” Address social and environmental issues Fulfill our social responsibilities Opportunities Risks Access to finance Social infrastructure services  Provide services for customer needs which are not  Firmly provide fundamental financial functions The spread of COVID-19 worldwide is rapidly slowing the globalization of humans satisfied by traditional financial services (deposit, loan, payment etc.) as social infrastructure  Provide payment methods with emerging technology  Maintain cyber security and goods and dividing and blocking the material world. At the same time,  Prevent money laundering Fund flows that fit society’s needs through the persistent endeavors of medical professionals, and a process of trial  Provide solutions for supporting sustainable social capital Customer-oriented services  Place customer’s benefit first and error, everyday life is beginning to resume in a new way through the virtual Solutions through integration with external  Give information that is accurate and easy to digest services world using “digital” means as a tool. However, once we overcome this global  Build / participate in ecosystems, use of digital technology crisis or after we become accustomed to it, the values and behaviors of the world are likely to enter a “new normal” and would not return to pre-COVID-19 Support these Support these conditions. In addition to fulfilling its responsibilities and missions as a part of the SDGs: SDGs: overall social infrastructure, institutions that are responsible to provide finance functions, which are indispensable to people’s daily lives and social activities, must contribute to activities that create new daily lives in the new normal. Last Foundation for meeting our goals / responsibilities year, the Shinsei Bank Group embarked on a variety of new initiatives under the Expertise and Execution Governance Organization banner of “Redesigning Finance.” I believe it is necessary to have a ship called People Operations Capital

“Redesigning Finance” to reconsider the way finance should be approached to Support these go to the coastal sea area of this rough new normal. SDGs:

7 Medium-Term Management Strategy

Core Strategies Value that the Shinsei Bank Group Wants to Impact Society: Nonfinancial KPIs

Materiality Main business Nonfinancial KPIs Progress Increase access point • Deployment of the Shinsei ❶Providing platform by the Shinsei Bank Group: BANKIT® to finance, both Bank Group’s platforms and ❷Establishment of joint ventures with partner companies: Credd directly and indirectly, ecosystems Finance and Shinsei Bridge for foreigners’ ecosystems; anew for more people • Participation of partner for cloud factoring for SMEs and micro-businesses Grow through Value Enhance / Leverage Our Address companies in platforms and ❸Participation of partners in platforms and ecosystems: social and ecosystems collaboration with USEN NEXT HOLDINGS and collaboration Co-Creation Capabilities environmental with Docomo issues Expand financing to In the institutional investor ❶Established the Sustainable Impact Development Division help resolve climate business, ❷Bilateral and joint arrangement of domestic renewable energy Integration with external services Diverse people and flexible workstyle change and social ❶Amount of new origination project finance: Fiscal 2019: ¥138.5 billion issues ❷Amount of new distribution Finance as a Service Customer-centric organization Provide reliable • Initiatives to ensure cyber ❶Cooperation with external specialist organizations Fulfill our social financial services in a security ❷Implementation of measures against cyber attacks on Deeper understanding of our Productive operations responsibilities stable manner information systems ❸Training and education customers Optimal capital usage Have strong ❶Evolution of board governance ❶Number of outside directors: 5 out of 7 directors governance, ❷Initiatives for organizational Directors’ skill diversity: Skill matrix employees respect issues based on the Group’s Transparency and objectivity of remuneration and each other’s organizational survey nomination: strengths, and work ❸Promoting diversity Discussion by the nomination and compensation committee, together to create which is comprised of outside directors new value ❷Implementation of effective measures • Management of evaluation and compensation: System design changes, including the introduction of a group-wide personnel Foundation for system meeting our • Development of team management skills for managers: goals / Establishment of team management skills and career support Maximization of customer value Optimal usage of our resources responsibilities for subordinates as evaluation items for managers, expansion of training for managers, etc. • Human resource management: Appropriate manpower allocation and reduction of work volume, human resource development, utilization of senior human resources, etc. • Communication: Transmission of information from executives through town hall meetings, revitalizing group organizations through the launch of new projects, etc. ❸ Ratio of women in managerial positions on a Group basis (Fiscal 2019: 13.9%, Fiscal 2022: 18% or above) Business Strategies

Business Strategy Individual BusinessBusiness Strategy Institutional Business Economic Value that the Shinsei Bank Group Wants to Create: Financial KPIs

Focus Area Small-Scale FinanceFocus Area Institutional Investors

Enhance service offerings through building / Provide one-stop services for alternative EPS Growth Rate Growth Profit Share of Focus Areas Growth participating in ecosystems, using digital investments (Share of operating business profit after net credit costs, excluding one-time factors) Annual average Small-scale finance Businesses for institutional investors technology and data analysis excluding the share buyback effect FY2018 FY2021 FY2018 FY2021 % or more 2 45% 50% 10% 15%

Organization Infrastructure ROE Profitability OHR Efficiency CET 1 Ratio Soundness In the medium term FY2018 In the medium term FY2018 FY2021 Less than FY2018 Minimum Focus Area Group OrganizationFocus Area Productivity Reforms 6.0% 8.0% 63.0% 50% 12.0% 10%

Integrate business functions across the Group Cost structure reform including usage of Shinsei Bank aims to maintain or improve the total shareholder return ratio, depending on financial conditions and Shareholder market environment, considering total shareholder return policy as outlined in the Revitalization Plan.* digital technology and channel optimization Return * As mentioned in the Revitalization Plan submitted to the Financial Services Agency on March 25, 2020, we will continue to aim to maintain and improve our shareholder return, taking into consideration the level of the general total shareholder return ratio of Japanese domestic banks.

8 Special Features of Business

Individual Business Institutional Business

What is Small-Scale Finance? What is Institutional Investor Oriented Business?

Core Customers Value Co-Creation Core Customers Value Co-Creation

Individuals and small businesses  Investment managers sponsoring equity Build / participate in ecosystems, share data to better understand investments Provide alternative investment services 3 our customers  Asset owners such as financial institutions, 3  Investment opportunities for wide variety of institutional investors Product / Service Lineup  Provide functions (credit assessment, guarantees, collection, payments pension funds etc.  Senior, mezzanine and equity financing, and advisory services etc.) based on partner needs  Enhancing structuring capabilities including debt and equity funds Small-size, high-frequency credit and  Share and use customer data and know-how Product / Service Lineup payment transactions:  Serve foreign nationals and freelancers  Unsecured loans, shopping credit Alternative investment solutions focusing  Credit guarantee, rent guarantee on real assets (renewable energy,  Credit cards, prepaid cards infrastructure, real estate):  Other cashless payments Strengthen core capabilities, integrate with payment platforms Arrange syndicated loans  Arrangement, advisory, financing, equity,  Utilize AI / RPA to analyze data and streamline operations  Partner with regional financial institutions to provide senior loans 2 risk hedging solutions etc. 2  Deploy all-in-one platform for payments, credit assessment and other  Target assets: Renewable energy, real estate, others services Our Capabilities Our Capabilities

 Large and diverse customer portfolio  Expertise in real assets  Strong analytical capabilities for marketing,  Our connections with institutional investors credit assessment and loan collection  Structuring know-how using trusts  Stable operations Self-Contained Model Self-Contained Model Streamline and speed-up existing processes Arrange bilateral structured finance 1  Scale up multi-payment services to meet increasing cashless payments 1  Independently provide senior loans  Gather outside UI / UX expertise  Target assets: Renewable energy, real estate, others

Unsecured Loan Business Structured Finance Business Create added values from our unique positioning that is Lake ALSA Strengths and Strategies The Shinsei Bank Group’s Strengths different from both megabanks and regional financial institutions • Development of customer base and customer data using major As neither a megabank nor a regional financial institution, the consumer finance brand - Lake Shinsei Bank maintains a unique position with the following strengths. • Use of conventional scoring models derived from nonbank credit- Many customers apply on smartphones • We are better able to tackle projects with a focus on flexibility and risk control methods, plus use of AI to enhance credit assessment / speed than megabanks. Expertise and high Flexibility and collection • We have more expertise and greater analytical skill given our analytical skills mobility that can be • Optimization of operation costs using digital technology extensive experience than regional financial institutions. based on extensive realized only by a Application Can apply on smartphones 24 hours / day experience small-sized bank • Fixed-term, no-interest loans for new customers • We are able to do business from an independent standpoint with 1. Customers with a contract amount under ¥2 million, no interest a broad range of customers because we do not belong to a for 180 days for loans up to ¥50,000, or specific capital group. Credit Results of screening shown on smartphone 2. 60-day no-interest loan, website application only Screening Cooperation with Tailor-made • Customers’ smartphones can act as a substitute for a branch, screen regional financial structuring and enabling them to receive services in real time 24-hours a day. institutions provision of finance Smartphones can also be used to make repayments, increase Contract Forms submitted by e-mail credit limits and receive other services without being restricted to time or place. Neutral position not • Loan disbursement and loan repayments are also possible using a Relationships with belonging to any card issued especially for this purpose. Beginning in May 2018, Loan No need to visit a branch. Loan disbursed regional financial major corporate customers can make “cardless” transactions at Seven Bank ATMs. in customer’s account institutions groups / Networks with investors globally

9 Digital Strategies in the Shinsei Bank Group

Deployment of Digital Strategies in Business Strategy Initiatives of the Neobank Platform “BANKIT®”

In API Strategy, we will utilize our API platform to deepen our self-contained businesses by providing The Shinsei Bank Group began offering the Neobank Platform “BANKIT®” to our partner companies who channels and apps to tailor customers’ needs and providing products and services by collaborating within have been considering entry to the financial and settlement business. the Shinsei Bank Group. We will also develop value co-creation businesses by providing financial functions Through the provision of BANKIT® services, we will leverage the Shinsei Bank Group’s financial licensing, to FinTech companies and platformers, and by creating unique ecosystems centered on the Shinsei Bank financial and payment systems to collaborate with partner companies and FinTech companies that have a Group. The Data Strategy supports self-contained businesses and value-creating businesses by utilizing customer base, to develop the financial and payment services needed for the next generation, and data in marketing and credit screening. provide new financial experiences.

Productivity Reforms Points We will work to improve the efficiency of business processes and operations using digital tools, and to • To reduce the pain points when partner companies enter the financial business reform the IT expense structure using the cloud. • To obtain a license • Building systems and operations Aspects of DX in the Society Major Initiatives • Provides highly flexible financial services such as financial services platforms, and settlement and credit • Supporting customer contact points and actual operation Transformation of Omni Experience Development of Shinsei • Initiatives in which the Shinsei Bank Group companies cooperate to bring their respective strengths to Deploy in the business strategies (API strategy) PowerDirect App API platform and its utilization to address each business fruition of the self-contained model and value co-creation model Development of API HUB

Transformation of Operation Model Seeking to utilize business in collaboration Retailers Manufacturers IT Service Providers Deploy in the business strategies (Data strategy) Business utilization of data Data utilization areas and their deployment in each business of the self-contained model and value co- Transformation of Information creation model

Reform of IT cost structure Deploy in productivity enhancement IT cost structure reform utilizing digital technologies and Transformation of Workforce Resource platforms, and the introduction of digital tools API API API

Examples Customers Customers in the Shinsei Bank Group Customers out of the Shinsei Bank Group APLUS Prepaid, Code Deferred Platformer etc. Wallet accounts Partners, Ecosystem for Settlement Service Electronic Settlement settlements payment Channels Foreigners Shinsei’s System Providers Services Operators BANKIT® ATM (deposits Shinsei Bank Remittance Deposits and withdrawals) OAuth OpenAPI Operator Small-Scale Finance Management API HUB Platform API Platforms (Microservices) Shinsei Domestic Foreign Credit Shopping Investments Deposits Loans remittances remittances ATM Cards Prepaid Credit Financials Lending

Core System, Bank YUI Platform DWH Shinsei Financial APLUS FINANCIAL Data Platform Others Coupon Stocks Insurance

Neobank Platform

10 Corporate Governance

Board of Directors

Hideyuki Kudo Yoshiaki Kozano Ernest M. Higa Yuko Kawamoto Jun Makihara Rie Murayama Ryuichi Tomimura Representative Director, Director Outside Director Outside Director Outside Director Outside Director Outside Director President and Chief Executive Officer Nomination and Compensation Nomination and Compensation Chairperson, Nomination and Nomination and Compensation Nomination and Compensation Chairman of Board Committee Member Committee Member Compensation Committee Committee Member Committee Member

Ownership: Common shares 23,072 Ownership: Common shares 8,367 Ownership: Common shares 4,286 Ownership: Common shares 20,000 Ownership: Common shares 0 Ownership: Common shares 0 Ownership: Common shares 0 Attendance rate: 100% Attendance rate: 100% Attendance rate: 100% Attendance rate: 100% Attendance rate: 100% Attendance rate: 100%

Reasons for Nomination Reasons for Nomination

Mr. Hideyuki Kudo has an abundant experience Mr. Yoshiaki Kozano has a wealth of experience Mr. Ernest M. Higa was asked to stand as an Ms. Yuko Kawamoto was asked to stand as an Mr. Jun Makihara was asked to stand as an Ms. Rie Murayama was asked to stand as an Mr. Ryuichi Tomimura was asked to stand as an and insight, focusing on corporate and risk and results, focusing on corporate operations. Outside Director in order to reflect in the Bank’s Outside Director in order to reflect in the Bank’s Outside Director in order to reflect in the Bank’s Outside Director in order to reflect in the Bank’s Outside Director in order to reflect in the Bank’s management operations. Since his appointment Since his appointment in 2017, he has been management, his experience and deep insight of management, her wealth of expertise in finance management, his extensive knowledge of finance, management, her wide range of expertise based management, his extensive experience and wide as the president, he has been contributing to planning and promoting the Group’s business business for consumers. and extensive experience as a management and his domestic and international experience. on her experience as Outside Director at other range of knowledge including information improved corporate value by establishing and strategy as the Director, Chief Officer, Group consultant and professor at university. companies, as well as her knowledge based on systems as a management executive and a implementing the core strategies of Business Strategy and contributing to the her extensive experience at an investment bank, consultant. “enhance/leverage our capabilities” and “grow enhancement of corporate value through particularly related to business and risk-analysis through value co-creation” outlined in the reorganization of the Group and creation of in real estate, mortgage, construction and Medium-Term Management Plan that starts in business opportunities. related sector. fiscal 2019.

Apr. 1987 Joined The Dai-Ichi Kangyo Bank, Ltd. Apr. 1986 Joined The Long-Term Credit Bank of Apr. 1976 Joined Higa Industries Co., Ltd. Apr. 1982 Joined the Bank of Tokyo, Ltd. Sep. 1981 Joined Goldman Sachs & Co. Nov. 1988 Joined CS First Boston Securities Oct. 1983 Joined IBM Japan, Ltd. (Predecessor of Mizuho Bank, Ltd.) Japan, Ltd. (Predecessor of Shinsei Bank, Apr. 1983 President and Chief Executive Officer, (Predecessor of MUFJ Bank, Ltd.) Nov. 1992 Partner, Goldman Sachs & Co. Mar. 1993 Joined Goldman Sachs Tokyo Branch Oct. 1991 General Manager, Network Integration May 2001 General Manager, Advisory Department Limited) Higa Industries Co., Ltd. Sep. 1988 Joined McKinsey & Company, Inc. Nov. 1996 Co-Branch Manager, Goldman Sachs (Predecessor of Goldman Sachs Japan Division, Recruit Co. Ltd. (Predecessor of No. II, Investment Banking Division, Nov. 2003 General Manager, Credit Trading Division, Apr. 2008 Board Member, The Tokyo New Jul. 2001 Senior Expert, McKinsey & Company, Tokyo Branch (Predecessor of Goldman Co., Ltd.) Recruit Holdings Co., Ltd.) Mizuho Securities Co., Ltd. Shinsei Bank, Limited BusinessConference (Current) Inc., Tokyo Office Sachs Japan Co., Ltd.) Nov. 2001 Managing Director, Goldman Sachs Jan. 1994 Managing Partner, Pricewaterhouse Aug. 2003 Director, Acquisition Group, Aetos Japan, Jul. 2006 Head of Corporate Business Solutions May 2009 Board of Overseers, Columbia Business Apr. 2004 Professor, Waseda Graduate School of Jul. 2000 Chairman of the Board, Neoteny Co., Ltd. Tokyo Branch (Predecessor of Goldman Consultant LLC Sub-Group, Shinsei Bank, Limited School (Current) Finance, Accounting and Law Jun. 2006 Director, Monex Group, Inc. (Current) Sachs Japan Co., Ltd.) Oct. 2002 Managing Director, IBM Business May 2005 Managing Director, Aetos Japan, LLC Dec. 2007 Head of Principal Transactions Sub- Jun. 2010 Director, JC Comsa Corporation (Predecessor of Business and Finance) Jun. 2011 Director, Shinsei Bank, Limited (Current) Jun. 2016 Director, RENOVA, Inc. Consulting Service KK, Vice President, Jun. 2006 Representative Director, President, MID Group, Shinsei Bank, Limited (Current) (Current) Sep. 2014 Director, Philip Morris International Inc. Apr. 2017 Chairman & Representative Director, IBM Corporation Business Consulting Urban Development Co., Ltd. Jun. 2011 Managing Executive Officer, Head of Mar. 2011 Chief Executive Officer, Wendy’s Japan, Jun. 2004 Director, Osaka Exchange, Inc. (Current) ComTech, Ltd. Service, Asia Pacific (Predecessor of Kanden Realty & Principal Transactions Sub-Group, LLC (Predecessor of Japan Exchange Group, Jun. 2017 Director, KATITAS Co., Ltd. Feb. 2004 Representative Director, Senior Executive Development Co., Ltd.) Shinsei Bank, Limited Jun. 2013 Director, Shinsei Bank, Limited (Current) Inc.) Jun. 2019 Director, Shinsei Bank, Limited (Current) Vice President, Japan Telecom Co., Ltd. Jan. 2007 Vice Chairman, MID Urban Development Apr. 2015 Managing Executive Officer, Deputy Head Apr. 2015 Chairman, President & Chief Executive Jun. 2006 Audit & Supervisory Board Member, Jun. 2020 Director, MAEDA CORPORATION (Predecessor of SoftBank Corp.) Co., Ltd. (Predecessor of Kanden Realty of Institutional Group, Shinsei Bank, Officer, Higa Industries Co., Ltd. Tokio Marine Holdings, Inc. (Current) Dec. 2007 Representative Director, Managing & Development Co., Ltd.) Limited (Current) Jun. 2013 Director, Mitsubishi UFJ Financial Group, Director, RHJ International Japan, Inc. Jun. 2007 Managing Director, Investments Division, Apr. 2016 Managing Executive Officer, Special Sep. 2016 Chairman & Representative Director, Inc. Apr. 2010 Executive Vice President, Director, Aetos Japan, LLC Assignment (Head of Group Business Wendy’s Japan K. K. (Current) Jun. 2020 Director, Shinsei Bank, Limited (Current) SIGMAXYZ Inc. (Current) Sep. 2010 Managing Executive Officer, Deputy Head Strategy, Shinsei Bank, Limited) Apr. 2017 Board of Trustees, Showa Women’s Jun. 2020 Director, SoftBank Group Corp. (Current) Aug. 2012 Director, Plan•Do•See Inc. of Institutional Group, Shinsei Bank, Jun. 2016 Director, APLUS FINANCIAL Co., Ltd. University (Current) Jun. 2020 Director, Panasonic Corporation Jun. 2014 Audit & Supervisory Board Member, Limited (Current) (Current) Shinsei Bank, Limited Apr. 2011 Managing Executive Officer, Head of Apr. 2017 Chief Officer, Group Business Strategy, Jun. 2015 Director, Shinsei Bank, Limited (Current) Structured Finance Sub-Group, Shinsei Managing Executive Officer, Special Jun. 2016 Executive Vice President, Representative Bank, Limited Assignment, Shinsei Bank, Limited Director, SIGMAXYZ Inc. Apr. 2013 Managing Executive Officer, Chief Risk Apr. 2018 Chief Officer, Group Business Strategy Jun. 2018 President, Representative Director, Officer, Head of Risk Management Group, (Equivalent to Senior Managing SIGMAXYZ Inc. (Current) Shinsei Bank, Limited Executive Officer) May 2020 Director, VECTOR INC. (Current) Apr. 2015 Managing Executive Officer, Shinsei Bank, Jun. 2018 Director, Chief Officer, Group Business Limited Strategy, Shinsei Bank, Limited Jun. 2015 Representative Director, President and (Equivalent to Senior Managing Chief Executive Officer, Shinsei Bank, Executive Officer), Shinsei Bank, Limited Limited (Current) (Current)

11 Corporate Governance

Message from Chairperson of Nomination and Compensation Committee Audit & Supervisory Board Members

I would like to say that no set of written rules or procedures can guarantee a good outcome for any of the above questions. The most important thing is to have a board that works well together and works well with the CEO. Above all, a board and CEO that have an open and honest dialogue is the key to successful corporate governance. Jun Makihara Outside Director Chairperson, Nomination and Shinya Nagata Ikuko Akamatsu Shiho Konno Compensation Committee Audit & Outside Audit & Outside Audit & Supervisory Board Member Supervisory Board Member Supervisory Board Member

Ownership: Common shares 2,583 Ownership: Common shares 0 Ownership: Common shares 0 Attendance rate: 100% Attendance rate: 100% Attendance rate: 100%

Diversified Experiences and Skills Required for Outside Directors Reasons for Nomination Reasons for Nomination

Mr. Shinya Nagata was asked to stand as an Audit & Ms. Ikuko Akamatsu was asked to stand as an Ms. Shiho Konno was asked to stand as an Outside Supervisory Board Member based on the judgment Outside Audit & Supervisory Board Member in order to Audit & Supervisory Board Member in order to reflect Ernest M. Yuko Jun Rie Ryuichi that he is suitable as a corporate auditor who can play reflect in the Bank’s audit operations, her expertise in in the Bank’s audit operations, her expertise and Higa Kawamoto Makihara Murayama Tomimura a central role in all areas of corporate audit. Through compliance and governance, etc. and to take on the extensive experience as a lawyer, and based on her his long work experience at Shinsei Bank, Shinya promotion of diversity, as well as for her professional experience as an outside director at listed companies Corporate Nagata has gained a deep understanding of the knowledge and experience as a certified public as well as her expertise in corporate governance and 〇〇 Group’s business, and with his extensive knowledge accountant and a certified fraud examiner, and to take on the promotion of diversity. Management Management and experience in finance and accounting, he is able to extensive experience as a consultant based on the make useful remarks and suggestions at the Board of aforementioned expertise. Experience Outside Directors meetings and the Audit & Supervisory Board 〇〇〇〇〇 meetings. Director Apr. 1981 Joined The Long-Term Credit Bank of Japan, Jan. 1995 Joined Showa Ota & Co. (Predecessor of Ernst Apr. 1991 Registered Dai-Ichi Tokyo Bar Association Debt Finance 〇〇〇 Ltd. (Predecessor of Shinsei Bank, Limited) & Young ShinNihon LLC) Jun. 2005 Audit & Supervisory Board Member, Yahoo Dec. 2001 General Manager, Financial and Regulatory Dec. 2010 Chief Researcher, Management Training and Japan Corporation Equity 〇〇 Accounting Division, Shinsei Bank, Limited Consulting Division, Institute of Management, Mar. 2008 Audit & Supervisory Board Member, Advanced Financial Experience Oct. 2006 General Manager, Group Regulatory SANNO University Softmaterials Inc. Investment Accounting and Tax Division, General Aug. 2018 Director, TOP’S Inc. (Current) Apr. 2009 Professor, Waseda Law School, Waseda Risk Manager, Group Financial Projects Division, Apr. 2019 Senior Researcher, Management Training and University 〇〇 Shinsei Bank, Limited Consulting Division, Institute of Management, Apr. 2014 Member, Committee on Realization of a Management Apr. 2009 General Manager, Group Regulatory SANNO University Gender-Equal Society of Japan Federation of Accounting and Tax Division, General Jun. 2019 Audit & Supervisory Board Member, Shinsei Bar Associations (Current) Consumer Manager, Group Financial Accounting Division, Bank, Limited (Current) Aug. 2014 Auditor, Japan Corporate Governance 〇 Shinsei Bank, Limited Jun. 2020 Director, CAWACHI LTD. (Current) Network Business Sep. 2009 General Manager, Group Regulatory Jun. 2020 Audit & Supervisory Board Member, Toyo Mar. 2015 Established Shiho Konno Habataki Law Office Accounting and Tax Division, Shinsei Bank, Seikan Group Holdings, Ltd. (Current) (Current) Real Estate Limited Jun. 2015 Director, Watami Co., Ltd. Other Necessary 〇 Jun. 2010 General Manager, Group Regulatory Jun. 2016 Director, Kakaku.com, Inc. Business Accounting and Tax Division, General Jun. 2017 Director, Alfresa Holdings Corporation Experience Manager, Group Financial Accounting Division, Jun. 2018 Audit & Supervisory Board Member, Shinsei IT / Digital 〇 Shinsei Bank, Limited Bank, Limited (Current) Sep. 2010 Executive Officer, General Manager, Group Jun. 2018 Director, Monex Group, Inc. (Current) Administration Regulatory Accounting and Tax Division, General Manager of Group Financial Bureau Accounting Division, Shinsei Bank, Limited Oct. 2010 Executive Officer, General Manager, Financial Comprehensive Consulting 〇〇 and Regulatory Accounting Division, Shinsei Bank, Limited Knowledge Above Academia 〇 Jun. 2012 Audit & Supervisory Board Member, Shinsei Bank, Limited (Current)

12 Initiatives for Global Environmental Issues through Our Core Businesses

Corporate Governance Strategy: Opportunities

Shinsei Bank has endorsed the recommendations of TCFD (Task Force on Climate-related Financial Promotion of Businesses That Contribute to Renewable Energy Project Finance Disclosures). the Improvement of Global Environmental Arrangement Results The Shinsei Bank Group has positioned the Group ESG Management Policy as the starting point for Issues formulating management strategies, and by contributing to the creation of a sustainable society, we aim The Shinsei Bank Group is actively promoting investment Since 2012, Shinsei Bank has actively promoted to fulfill our corporate social responsibilities and acquire sustainable growth opportunities. and lending to improve and resolve environmental and syndicated loans for renewable energy businesses such Responding to global environmental issues, including climate change, is indispensable for a sustainable social issues through project finance for renewable as solar, wind, and biomass, and has been supporting the energy businesses, and investment and lending for spread of renewable energy in cooperation with regional society. We will strive to create social value and increase the corporate value of the Shinsei Bank Group facilities which reduce the environmental impact of real financial institutions. over the medium to long term through a variety of initiatives, including investment and financing to estate and ship finance. clients’ climate change-related projects.

Risk Management Objectives, Organization, and Action Renewable Energy Project Finance Policies of the Sustainable Impact Arrangement Results Adoption of the Equator Principles Investment and Loan Policies for Development Division (Billions of yen) Specified Business In February 2020, we established the Sustainable Impact 150 138.5 In April 2020, Shinsei Bank became the seventh The Shinsei Bank Group considers transactions Development Division to further deepen the initiative mentioned above. At the same time, the Sustainable Japanese financial institution to adopt the with companies that do not pay due attention to Impact Assessment Department was established to 100 Equator Principles. environmental and social issues to be structure a unique evaluation system of sustainable By reviewing the environmental and social management risks and has prohibited or finance based on ongoing engagement impacts of projects and making comprehensive restricted transactions in connection with with customers. The Sustainable Impact 50 decisions based on the Equator Principles, we will investments and lending for certain specific Development Division supports the fulfill our corporate social responsibility and businesses based on the recognition that there creation of positive impacts on environmental and social issues by enhance our environmental and social risk are serious risks to the environment and society. management. planning and promoting sustainable 0 From the standpoint of climate change finance, developing and supplying (FY) 16 17 18 19 countermeasures, new investment and lending to investment products for institutional coal-fired thermal power plants will not be investors based on this evaluation. provided either in Japan or overseas, in principle, based on a preventive approach.

Ratios & Targets Strategy: Risks

We believe that climate change influences the Shinsei Bank Group’s portfolios principally through the CO2 Emissions, Electricity Usage following two channels:

Environment Impact Data (FY) FY2015 FY2016 FY2017 FY2018 FY2019 Physical Risk: Direct impacts such as property Carbon-related asset exposures (the ratio of damage caused by floods, storms and other carbon-related assets to total exposure = energy climate events, and indirect impacts such as and utilities (excluding project finance such as CO2 Emissions (t) 2,806 2,746 2,602 2,575 2,425 disruptions to the global supply chain and solar and wind power)) is 4.2% as of March 2019, resource depletion. and 4.2% as of March 2020, and we have begun quantifying the impacts of transition risks and Electricity Usage (kWh) 5,163,522 5,093,523 5,069,080 5,027,896 5,013,949 Transition Risk: Risks arising from the physical risks. revaluation of financial assets with high GHG (Greenhouse Gas) emissions as a result of the Future Policy transition to a low-carbon economy.

In measurement of GHG emission we plan to cover Scope 1 and Scope 2 to each of our group companies as a first step, and then we plan to respond to Scope 3.

13 Social Initiatives

Initiatives for Employees Initiatives for Customers

The Shinsei Bank Group’s Human Resources Strategy Customer-Oriented Business Conduct

As a guideline for conducting business have reaffirmed the importance of Our Medium-Term Strategies operations with top priority on customers’ “Pursuing customer-oriented business “Redesigning Finance,” one of our “best interests,” the Bank established the conduct and contributing to our customers’ basic strategies is to pursue the “Policy on Customer-Oriented Business asset formation,” and by firmly committing strengthening and leveraging of Conduct” (hereinafter referred to as the to customer-oriented business operations, organizational capabilities that are “Policy”) and an “Action Plan” to put this we will contribute to the sustainable the source of corporate growth. Policy into practice. growth and development of society and Each Shinsei Bank Group company and all the economy. Hideyuki Kudo executives and employees of the Group President and Chief Executive Officer Social Initiatives

® Creation of Sustainable Corporate Value Our Approach “MoneyConnection ” Financial Literacy Program Maximization of Human Resource through Promoting Diversity The Shinsei Bank Group promotes In cooperation with Sodateage.net, an employee-driven philanthropic activities, authorized specified nonprofit organization, whereby approximately 721 employees the Shinsei Bank Group holds throughout the entire Group participated in “MoneyConnection®,” a financial literacy Career Diversity Gender Diversity Workstyle Diversity Talent Diversity 26 activities in fiscal 2019 (ended March program that aims to help younger people 31, 2020). avoid situations where they are not in employment, education or training (NEET). Contributions for COVID-19 The Shinsei Bank Group’s Action Plan Based on the Act on Promotion of Women’s Participation Nurturing and Advancement in the Workplace (From April 2020 to March 31, 2023) the Next Environment In fiscal 2019, the Shinsei Bank Group Generation Achieve a ratio of 18% or more for women in managerial positions* at five group companies contributed a combined total of ¥30 million to Target 1 (also set separately for each company) Support children, youth Protect our earth support the continuation of medical activities, and physically and and the environment lives of students including their entry to the Target 2 intellectually challenged we live in Achieve 100% for the child-care-related leave utilization rate for both males and females people who create higher grades and freelance artists’ activities. our future * Positions of Senior Manager, or Higher Together with USEN-NEXT HOLDINGS Co., Ltd., we donated a total of 100 thousand Target Ratio of Women in Management Positions (Senior Manager or Above) (as of March 1, 2020) masks to corporate and sole proprietorship Shinsei Disaster Relief businesses including restaurants, beauty APLUS Shinsei Shinsei Bank Showa Leasing Investment & Total FINANCIAL Financial salons, and various retail stores in accordance Finance Support the areas with our strategy of “Growth through Value affected by the Target 20% 8% 15% 18％ 17％ 18％ or more Great East Japan Co-Creation” under the Medium-Term Earthquake Strategies. Result 17.8％ 4.1％ 11.1％ 12.3％ 13.0％ 13.9％

14 Disclaimer

• The preceding description of the Shinsei Bank Group’s Medium-Term Strategies contains forward-looking statements regarding the intent, belief and current expectations of our management with respect to our financial condition and future results of operations. These statements reflect our current views with respect to future events that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may vary materially from those we currently anticipate. Potential risks include those described in our annual securities report filed with the Kanto Local Finance Bureau, and you are cautioned not to place undue reliance on forward-looking statements.

• Unless otherwise noted, the financial data contained in these materials are presented under Japanese GAAP. The Shinsei Bank Group disclaims any obligation to update or to announce any revision to forward-looking statements to reflect future events or 4-3, Nihonbashi-muromachi 2-chome, Chuo-ku, developments. Unless otherwise specified, all the financials are shown on a consolidated basis. Tokyo 103-8303, Japan • Information concerning financial institutions and their subsidiaries other than the Shinsei Bank Group are based on publicly available information. TEL: 81-3-6880-7000 • These materials do not constitute an invitation or solicitation of an offer to subscribe for or purchase any securities and neither this URL: https://www.shinseibank.com/english/ document nor anything contained herein shall form the basis for any contract or commitment whatsoever.