Performance (Non-consolidated)
Business profit on core banking operations decreased ¥1,117 million, to ¥15,753 million (US$146.6 million). Business profit on core banking operations refers to net business profit plus provisions to the general reserve for possible loan losses adjusted for income (loss) on government bond operations. This decline is mainly attributable to a decrease in interest income due to weak fund demand and loan securitization to improve the soundness of our asset portfolio. Increases in fees and commissions, efforts to improve securities operations as well as cost cutting efforts proved to be insufficient to cover the decline.
    We made efforts to solidify the Bank’s base ahead of the lifting of the guarantee on deposits over ¥10 million, and undertook a review of the medium-term management plan. We revised our standards governing provisions for loan losses to bolster reserves. As a result, we registered a credit cost of ¥40,114 million, and a net loss of ¥14,064 million (US$130.9 million). The balance of deposits (primarily for those of individuals) rose, with deposits increasing ¥10,417 million, to ¥1,894,842 million (US$17,644.4 million). The balance of loans declined ¥20,524 million, to ¥1,450,651 million (US$13,508.2 million). Despite efforts to boost funding to small and medium-sized companies and expand loans to individuals in the region, fund demand remained weak. The Bank also made extensive efforts to remove non-performing loans from its balance sheets as well as reduce the book value of NPLs by implementing the partial write-off of these loans. The balance of securities was ¥631,210 million (US$5,877.7 million), up ¥61,289 million from the previous term-end.

Kazuhito Fujiwara, President