Annual Report 2008 Annual Report 2008 This annual report is printed on waterless. We use non-VOC ink and FSC-certified paper. Printed in Japan 08_SFH_E_FH_0805.indd 1 08.8.5 5:33:35 PM Contents Sony Financial Holdings Financial Highlights . 1 About the Sony Financial Holdings Group...............2 Sony Financial Holdings Group Strengths . 4 Message from the Management .....................6 Corporate Governance............................9 Compliance...................................11 Risk Management . 12 Privacy Policy . 20 Internal Audits .................................21 Social Contribution and Environmental Activities.........22 History of the Sony Financial Holdings Group ...........24 FY2007 Topics . 26 About Sony Life................................28 About Sony Assurance...........................32 About Sony Bank...............................36 Analysis of Operating Performance for FY2007 .........40 Financial Data .................................58 Financial Data . .58 Capital Adequacy Status . .66 Risk-Monitored Loans..........................73 Sony Life’s Financial Data .......................74 Sony Assurance’s Financial Data ..................80 Sony Bank’s Financial Data ......................84 “Lifeplanner” and “Lifeplanner Value” are registered Stock Information . 89 trademarks of Sony Life Insurance Co., Ltd. “MONEYKit”, “MONEYKit-ACTIVE” and “MONEYKit GLOBAL” Corporate Information . .90 are registered trademarks of Sony Bank Inc. “PostPet” is registered trademark of So-net Entertainment Senior Management of the SFH Group Companies .......91 Corporation. “RiskGrade” is registered trademark of RiskMetrics Group. SFH’s Website Information . 93 2 08_SFH_E_FH_0805.indd 2 08.8.5 5:33:35 PM Financial Highlights Sony Financial Holdings Group (Millions of yen) 2004 2005 2006 2007 2008 Sony Financial Holdings (Consolidated) For the years ended March 31 Ordinary revenues . — 653,259 758,711 759,280 822,153 Ordinary profit. — 12,269 25,377 18,354 44,500 Net income. — 6,375 11,537 10,021 24,255 As of March 31 Total assets. — 3,282,269 3,917,048 4,323,780 4,977,450 Net assets(2). — 182,817 263,040 270,179 261,627 Consolidated capital adequacy ratio (Domestic criteria) (3). —% 12.17% 9.99% 12.01% 14.62% Sony Life (Non-consolidated) For the years ended March 31 Ordinary revenues . 580,972 604,093 696,426 689,591 741,250 Ordinary profit. 30,478 17,070 24,359 14,895 39,290 Net income. 13,932 10,102 9,616 7,494 18,514 Sony Financial Holdings As of March 31 Total assets. 2,375,828 2,617,266 3,103,241 3,445,970 3,659,786 Net assets(2). 132,478 141,142 217,833 216,568 182,671 Sony Assurance For the years ended March 31 Ordinary revenues . 31,066 38,159 45,703 51,020 55,649 Ordinary profit (loss). (1,941) (2,806) (764) 2,044 2,817 Net income (loss). (1,330) (1,981) (441) 1,598 2,185 As of March 31 Total assets. 40,121 46,685 56,103 67,468 78,645 Net assets(2). 14,061 12,086 11,709 13,320 15,385 Sony Bank (Non-consolidated) Financial Highlights For the years ended March 31 Ordinary revenues . 7,406 11,353 17,225 19,470 25,988 Ordinary profit (loss). (2,202) (1,659) 2,228 1,354 2,746 Net income (loss). (2,206) (1,663) 3,258 1,023 4,492 As of March 31 Total assets. 489,432 618,459 754,768 806,848 1,211,000 Net assets(2). 27,111 35,318 34,715 36,878 35,712 Non-consolidated capital adequacy ratio (Domestic criteria) (4). 10.29% 11.97% 9.24% 11.49% 9.15% Notes: 1. All figures above are stated in millions of yen after discarding fractional amounts of less than ¥1 million. 2. From the fiscal year ended March 31, 2007, the “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Statement No. 5) and the “Implementation Guidance for the Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Implementation Official Notification No. 8) have been applied to the calculation of net assets and total assets. 3. Calculations of SFH’s consolidated capital adequacy ratio for the fiscal years ended March 31, 2007 and 2008, are based on Article 52-25 of the Banking Law of Japan. The standards used to determine the capital adequacy ratio are based on Financial Services Agency (“FSA”) Public Announcement No. 20 of 2006. SFH has employed Standard 2 (domestic criteria). Calculations for the fiscal year ended March 31, 2006, and prior fiscal years have been made in accordance with the previous standard, stipulated by Article 52-25 of the Banking Law, Ministry of Finance Public Announcement No. 62 of 1998. For all periods, insurance subsidiaries are excluded from calculation of the consolidated capital adequacy ratio. 4. Sony Bank’s non-consolidated capital adequacy ratio (domestic criteria) for the fiscal years ended March 31, 2007 and 2008 were calculated based on the standard stipulated in the FSA public ministerial announcement No. 19 of 2006. Calculations for the fiscal year ended March 31, 2006, and prior fiscal years have been made in accordance with the standard stipulated in the former public ministerial announcement. 1 08_SFH_E_FH_0805.indd 1 08.8.5 5:33:35 PM About the Sony Financial Holdings Group We create new financial services by generating ideas from the fundamentals Founded on April 1, 2004, the Sony Financial Holdings Group (SFH Group) became Japan’s first financial group to offer life insurance, non-life insurance and banking services under one umbrella. The SFH Group is a financial services group that consists of Sony Financial Holdings Inc. (SFH), Sony Life Insurance Co., Ltd. (Sony Life), Sony Assurance Inc. (Sony Assurance) and Sony Bank Inc. (Sony Bank), as well as other group companies. Sony Financial Holdings Corporate Vision The SFH Group aims to integrate the diverse functions that are inherent to such financial services as savings, invest- About the Sony Financial Holdings Group ment, borrowing and protection; offer high-value-added products and quality services that meet individual customers’ economic needs; and become one of Japan’s most trusted financial services groups. Corporate Philosophy Customer-Oriented We consider each customer’s input carefully and provide services to their satisfaction, helping them lead lives that are abundant and trouble-free. Contributing to Society We understand that financial services businesses have a certain public nature. As we pursue our vision, we contribute to society by maintaining high ethical standards and levels of responsibility. We also fulfill our other obligations as a mem- ber of society and a good corporate citizen. Pursuing Originality We always generate ideas from the fundamentals, and pursue originality and innovation while remaining unfet- tered by convention. Corporate Culture with a Spirit of Freedom and Open-Mindedness Our ideal for the financial services business recognizes the importance of each employee’s contribution. Our corporate culture features a spirit of freedom and open-mindedness and takes full advantage of individuality and ability. 2 08_SFH_E_FH_0805.indd 2 08.8.5 5:33:35 PM Information on the Sony Financial Holdings Group Companies (As of July 1, 2008) Sony Financial Holdings Inc. Established April 1, 2004 Head office 1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo, Japan Business Management control of subsidiaries (life insurance companies, non-life insur- ance companies, banks and others) specified by the Insurance Business Law of Japan and the Banking Law of Japan and all duties incidental to that role Common stock ¥19,900 million Total number of shares outstanding 2,175,000 shares Major shareholder Sony Corporation 60% (see the information on major shareholders on page 89) Sony Life Insurance Co., Ltd. Sony Financial Holdings Established August 10, 1979 Head office 1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo, Japan Business Life insurance business Common stock ¥70,000 million Total number of shares outstanding 70,000,000 shares Share ownership Sony Financial Holdings Inc. 100% Sony Assurance Inc. Established June 10, 1998 Head office 37-1, Kamata 5-chome, Ota-ku, Tokyo, Japan Business Non-life insurance business About the Sony Financial Holdings Group Common stock ¥20,000 million Total number of shares outstanding 400,000 shares Share ownership Sony Financial Holdings Inc. 100% Sony Bank Inc. Established April 2, 2001 Head office 9-11, Akasaka 2-chome, Minato-ku, Tokyo, Japan Business Banking business Common stock ¥28,000 million Total number of shares outstanding 560,000 shares Share ownership Sony Financial Holdings Inc. 100% Sony Life Insurance (Philippines) Corporation Established August 26, 1998 Head office Makati City, Philippines Business Life insurance business Common stock 937 million Philippine pesos Total number of shares outstanding 9,370,000 shares Share ownership Sony Life Insurance Co., Ltd. 100% Sony Bank Securities Inc. Established June 19, 2007 Head office 17-22, Akasaka 2-chome, Minato-ku, Tokyo, Japan Business Financial products and exchange business Common stock ¥1,500 million Total number of shares outstanding 30,000 shares Share ownership Sony Bank Inc. 100% 3 08_SFH_E_FH_0805.indd 3 08.8.5 5:33:35 PM Sony Financial Holdings Group Strengths A Business Model Specifically for Individual Customers SFH Group Growth Strategies The Sony Financial Holdings Group uses uniquely differentiated sales channels to provide high-quality Our group growth strategy is to promote the sustainable and stable expansion of each business, while financial services consistently and from the customer’s viewpoint. ensuring the financial soundness of each group company. In addition to individual company growth, we While respecting the management independence of the companies under its umbrella, Sony Financial work to enhance our synergistic effects in the provision of products and services as well as in the Holdings (SFH), a holding company which holds Sony Life, Sony Assurance and Sony Bank as its core sharing or mutual use of sales channels and infrastructure to offer high-value-added products and companies, works to design and implement integrated and comprehensive groupwide financial services that traditional financial institutions have not been capable of providing in the past.