Capital Ratio (Domestic standard)
On March 31, 2003, the Bank’s capital ratio stood at 9.77% on a non-consolidated basis and at 9.83% on a consolidated basis. (The Bank does not issue subordinated loans.) The ratio of Tier I capital, which represents the fundamental portion of capital, was 8.29% (non-consolidated basis) and 8.36% (consolidated basis), comfortably above the 8% mark required for a soundly managed bank.

Non-Performing Loans
The Bank continues to rigorously write down non-performing loans and provide reserves for possible loan losses. Our activities here conform to the guidelines issued by the Financial Services Agency. Based on the results of asset assessments according to the Financial Revitalization Law, the fiscal year-end total of non-performing loans* — the sum of unrecoverable loans, risk loans, and special-attention loans — was ¥132.1 billion (US$1,099 million), and the ratio of these non-performing loans to total credit was 8.63%.
   The Bank does not carry out “partial charge-offs” — direct reduction of the remaining portion (amounts classified as Category IV assets) of loans to legally or effectively bankrupt borrowers deemed under the Bank’s asset self-assessment to be recoverable through collateral or guarantees. But had such measures been taken, the balance of non-performing loans under the law would have amounted to ¥109.5 billion and its ratio to total credit to about 7.26%. Our common stock, capital surplus, retained earnings, reserves for possible loan losses, and collateral and guarantees totaled ¥236.1 billion (US$1,964 million), representing an ample coverage level.

* Claims subject to mandatory disclosure under the Financial Revitalization Law include claims other than loans. However, amounts of other claims are negligible.

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