citibank japan ltd. annual report...company overview company profile company name citibank japan...

Citibank Japan Ltd.

Annual Report For the Fiscal Year Ended March 31, 2013

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Table of Contents

Message from the CEO 1

Company Overview 2

Our History 5

Management Strategy 6

Business Outline 8

Risk Management Framework 17

Compliance Framework 19

Diversity and CSR Activities 20

Citibank Japan Ltd. Financial Information under Japanese GAAP 21 For the Fiscal Year Ended March 31, 2013

1. Matters Related to Principal Business 22

2. Financial Statements 40

3. Market Value Information 58

4. Major Shareholders 63

5. Disclosure Items Based on Pillar III of Basel II 64

Message from the CEO To Our Valued Customers,

In 2012, Citi marked its 200th anniversary globally and has now embarked on its third century of business. In Japan, we have a history spanning more than 110 years, where Citibank Japan has built a reputation for providing innovative and high quality services to our retail, corporate and institutional customers. I am determined to work with our employees to further strengthen our business and continue to improve the quality of our products and services for our customers in Japan and around the world. Fiscal year 2012 saw a change of government and the launch of several measures aimed at boosting the Japanese economy. This has brought with it both opportunities and challenges for Japanese individuals and corporations. Citibank Japan is well positioned to help our customers succeed in such an environment.

Citibank Japan is financially strong and well capitalized, and as a part of Citi is a member of a global financial services group that does business in more than 160 countries and jurisdictions. Citibank Japan is committed to being a bank that meets local market expectations, with a strong compliance and governance framework; to serving Japanese consumers, corporations, governments and institutions; and to making our contribution as part of Japan's society and economy. Thank you very much for your continued patronage and support.

July 2013

Kazuya Jono Representative Director, President & CEO

Citibank Japan Ltd.

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Company Overview

Company Profile

Company Name Citibank Japan Ltd. (“CJL”) Head Office Address Citigroup Center

3-14 Higashi-Shinagawa 2-chome, Shinagawa-ku, Tokyo 140-8639

Bank Code 0401 Head Office Branch Code 730 Telephone Number 0120-039-104 or 03-5462-5000 Commencement of Operations July 1, 2007 (International Banking Corporation, a

predecessor to Citibank, opened its Yokohama branch in October 1902)

Business Overview As one of Citi's core businesses in Japan, CJL is engaged in banking services through the retail banking business and the corporate banking business.

Number of Employees 1,852 (As of March 31, 2013) Number of Branches (including head office) 38 (Head Office, Okinawa, 33 for Retail Banking, 3 for

Corporate Banking)

Directors and Statutory Auditors* Director, Chairman Masatsugu Nagato Representative Director, President Kazuya Jono Representative Director Anthony P. Della Pietra, Jr. Representative Director Naoki Inoue Director Peter B. Eliot Director Shirish Apte Director Phee Boon Kang Director Ryozo Hayashi Director Masahiko Uotani Statutory Auditor (full-time, outside) Mamoru Sato Statutory Auditor (outside) Toshiaki Kawashima Statutory Auditor Toshiaki Oikawa

(*) Chronological order of appointment for the same title Executive Officers

CEO and Head of Retail Banking Division Kazuya Jono Chief Operating Officer Anthony P. Della Pietra, Jr. Chief Strategy & Planning Officer and Head of Business Strategy & Planning Division Naoki Inoue

Deputy President and Head of Corporate Banking Division Marc Merlino

Head of Transaction Services Division Timothy Tynan Head of Markets Division Kii Ko Head of Corporate Treasury Division Nelson Thackery Co-Head of Business Strategy & Planning Division Tetsuo Matsugaki Head of Legal Division Yasuto Hashinaga Head of Compliance Division Koichi Tanaka Head of Enterprise Risk Management Division Seiji Ryusekido Head of Finance Division Susan Aziz Head of Risk Management Division Chae-ll Lee Head of Human Resources Division Minoru Kondo Head of Operations & Technology Division Vikram Subrahmanyam Chief Auditor Yuichi Ito Head of Retail Banking Planning Department, Retail Banking Division Masahiko Sawairi

Deputy Head of Corporate Banking Division and Head of Corporate Banking Planning Department Katsuhisa Ishikawa

Deputy Head of Business Strategy & Planning Division and Head of Management Coordination Unit Hiroaki Nigo

(As of July 1, 2013 except for Number of Employees)

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Organizational Structure

Shareholders Meeting

Board of Statutory Auditors

Board of Directors

President & CEO Management Committee

Corporate B

anking Division

Operations &

Technology Division

Risk M

anagement D

ivision

Hum

an Resources D

ivision

Com

pliance Division

Legal Division

Finance Division

Business S

trategy & P

lanning Division

Enterprise R

isk Managem

ent Division

Transaction Services D

ivision

Internal Audit

Corporate Treasury D

ivision

Chief O

perating Officer

Chief S

trategy & P

lanning Officer

Retail B

anking Division

（As of July 1, 2013）

Markets

Division

Financial Summary (From 09/2010 to 03/2013)

(Billions of Yen) 09/2010 03/2011 09/2011 03/2012 09/2012 03/2013 Total Assets 5,028.7 4,244.8 4,070.7 4,336.5 3,970.7 4,374.5 Deposits 4,017.7 3,399.3 3,198.2 3,510.4 3,241.9 3,541.5 Total Net Assets 262.0 262.0 265.3 265.0 263.6 262.8 Capital Stock 123.1 123.1 123.1 123.1 123.1 123.1 Capital Adequacy Ratio

22.04% * 25.16% 26.46% 28.77% 29.51% 28.47%

(*) We paid Yen 61 billion interim dividend during the interim period ended on September 30, 2010. Credit Ratings

Moody's S&P Fitch Rating Outlook Rating Outlook Rating Outlook

Citibank Japan Ltd. Long Term Baa1 Stable A Stable A Stable Short Term P-2 A-1 F1

Citigroup Inc. Long Term Baa2 Negative A- Negative A Stable Short Term P-2 A-2 F1

Citibank,N.A. Long Term A3 Stable A Stable A Stable Short Term P-2 A-1 F1

(As of July 1, 2013)

For further details, please refer to Citigroup Credit Ratings at http://www.citigroup.com/citi/investor/rate.htm

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Deposit Insurance

CJL has its head office located in Japan and is a member of the Deposit Insurance Corporation (DIC). Pursuant to the Deposit Insurance System, non-interest-bearing Yen deposits for payment and settlement purposes accepted by CJL are protected in full per depositor; and interest-bearing Yen deposits accepted by CJL are protected up to a maximum of 10 million yen in principal plus related interest thereon per depositor.

Bank Agency Service

Name of Bank Agent Citigroup Global Markets Japan, Inc. (“CGMJ”) Offices of Bank Agent CGMJ Tokyo Headquarters Service Coverage Intermediary of certain produces offered by CJL’s Corporate

Banking Division (yen/foreign currency deposits and remittance services)

Foreign Bank Agency Service

Designated Dispute Resolution Organization for CJL

Japanese Bankers Association (“JBA”) Contact for consultation and exchange of views: JBA Customer Relations Center 0570-017109 or 03-5252-3772 CJL has concluded a Basic Contract for Implementation of Dispute Resolution Procedure with JBA, the Designated Dispute Resolution Organization under the Banking Act. JBA runs the JBA Customer Relations Center as a contact point to which customers can go for consultation and inquiries or to which they can direct their opinions and complaints about banks. Refer to the JBA website for more information. http://www.zenginkyo.or.jp/adr/ * JBA Customer Relations Center’s services are available only in Japanese.

Name of Affiliated Foreign Bank

Citibank, N.A.

Offices of Bank Agent CJL Head Office Shin-Marunouchi Representative Office and Osaka Branch

Service Coverage -Intermediation for acceptance of deposits or installment savings -Intermediation for making of loans or negotiation of bills/notes -Intermediation for exchange transactions -Intermediation for issuance of bank guarantee and acceptance of bills/notes

-Intermediations for other ancillary services（Letter of Credit related）

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http://www.citibank.co.jp/ja/re/zenginkyo_inquiry.html

Our History

1812 City Bank of New York established. 1902 International Banking Corporation opened its first branch in Yokohama. 1923 International Banking Corporation opened Tokyo Branch (temporarily closed

in 1941, reopened in 1946). 1973 First National City Corporation listed on Tokyo Stock Exchange (delisted in

1998 with the merger between Citicorp and Travelers Group). 1974 First National City Corporation holding company changed its name to

Citicorp. 1977 Citibank N.A. launched Citicard Banking Centers, anchored by ATMs and

CitiCard. The 24-hour ATMs are for the first time used for more than emergency cash.

1980 Decades of innovation and expansion lead to Citibank operations in

90 countries. 1991 Citibank Japan launches International Cash Card. 1998 Citicorp and Travelers Group merge to form Citigroup Inc.

Citibank Japan starts internet banking. 2007 Citibank Japan Ltd. commences operations as a locally incorporated bank.

Citigroup Inc.’s shares listed on the first section of the Tokyo Stock Exchange.

2010 Citibank Japan Ltd. opens smart banking branches in Nihonbashi,

Tokyo Ekimae, and Nagoya. 2011 Citi expands its Japan Desk network around the globe, opening in cities

such as Manila, Dubai and Sao Paulo. (Japan Desks are located in 11 countries as of July 1, 2013).

2012 Citi celebrates its 200th anniversary globally and its 110th in Japan.

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Management Strategy

Citi’s Mission: Enabling Progress

Citi works tirelessly to serve individuals, communities, institutions and nations. With 200 years of experience meeting the world's toughest challenges and seizing its greatest opportunities, we strive to create the best outcomes for our clients and customers with financial solutions that are simple, creative and responsible. An institution connecting over 1,000 cities, 160 countries and millions of people, we are your global bank; we are Citi. The four key principles—the values that guide us as we perform our mission—are:

Citibank Japan Management Strategy

Citibank Japan Ltd. (“CJL” or “Citibank Japan”) is a 100%-owned indirect subsidiary of Citigroup Inc. (“Citigroup” or “Citi”). It was established on July 1, 2007 by succeeding the operations of the Japan Branches of Citibank, N.A., thus becoming the first foreign bank in the Japanese market to locally incorporate its banking operations. The bank’s presence in Japan dates back to 1902, when the International Banking Corporation (a predecessor to Citibank) first opened a branch office in Yokohama.

CJL’s goal, in line with global trends and the needs of our client base, is to fully respond to the needs of its retail and corporate clients by leveraging Citi’s global network and local footprint to offer innovative products and services. CJL is uniquely positioned to connect and serve our Japanese corporate and individual clients that are global citizens. We strive to provide seamless global financial solutions in line with our long terms strategy of being Japan’s true global bank aligned with the three global trends of globalization, urbanization and digitization. With strategic coordination across business lines and group companies,

CJL aims to continually develop its business and gain increased presence in the Japan market, leveraging its unique position as a locally incorporated foreign bank. CJL has a long and distinguished history of over 110 years in Japan. We have a proud legacy as a bank of over 200 years of focusing our energy fully on our customers, delivering new innovations and market firsts, bringing the best of the world to our local clients, providing an excellent working environment, and investing in future growth. CJL continues to focus on a balanced growth strategy through its retail and corporate banking businesses. The retail banking business continually invests in new products, distribution and service innovations to grow its mass affluent customer base and expand its premier Citigold proposition. In addition to broadening the segments we serve and breadth and depth of products we offer, CJL continously strives to better grasp and respond to our customer’s needs as part of our broader startegy of lengthening and deepening our relationships to serve our customers better over time. The corporate banking business has a selected core group of relationships which it leverages to deliver Citi's global strengths, providing high quality financial

• Common Purpose One team, with one goal: serving our clients and stakeholders.

• Responsible Finance Conduct that is transparent, prudent and dependable.

• Ingenuity Enhancing our clients’ lives through innovation that harnesses the breadth and depth of our information, global network, and world-class products.

• Leadership Talented people with the best training who thrive in a diverse meritocracy that demands excellence, initiative and courage.

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products, services and advice to help our customers succeed. Both the retail and corporate businesses continually look to improve customer experience and operational excellence. CJL is committed to handle earnestly any consultation from Small and Medium-sized Enterprises customers related to business improvement, or those related to the amendments to the existing lending conditions, etc. In addition, CJL will continue its best efforts to fulfill corporate social responsibility to local communities. CJL has made concerted efforts to enhance its governance and internal control frameworks since the localization of its banking operations in July 2007. Nevertheless, the Financial Service Agency of Japan (“FSA”) issued an administrative action against CJL on December 16, 2011. In response, CJL submitted a business improvement plan to the FSA on January 31, 2012. CJL takes this administrative action very seriously and is committed to implementing all necessary measures to prevent future occurrence of the problems identified. CJL takes seriously its obligations to confront in a resolute manner any undue demands from anti-social forces that threaten social order and safety. CJL is committed to providing a working environment where its employees can thrive and achieve their full potential. The diversity of our workforce is a core value and a source of strength and pride for CJL and our clients. By attracting and training the best people, and providing them broad career development opportunities at every level, we aim to foster an environment where employees are able to provide our clients with outstanding financial products, services and advice that fit their needs over the long term. CJL is proud of its contributions to a broad range of diversity and community initiatives. Our community activities focus broadly on improving access to financial education, assisting those with disabilities, promoting environmental and social sustainability, as well as development of the communities in which we operate. In addition we also continue to enhance the opportunities available to working parents through our childcare center in our head office.

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Business Outline Retail Banking Division

CJL has long been bringing innovation to the banking industry in Japan, and is widely recognized for its unique customer services and products. Examples of our past successes include being the first bank in Japan to introduce “24-hour-a-day, 7-day-a-week” (“24x7”) ATMs and telephone banking services, as well as ATM cards that can be used at CDs/ATMs overseas. We also introduced the consultative model whereby CJL financial experts provide professional financial advice to our retail customers and were among the earliest providers of online banking services in Japan starting in 1998. We established a unique presence in the market by being highly responsive to changes in the business environment at a time of asset growth from foreign currency deposits and investment markets in Japan. As of July 1, 2013, CJL has a retail network of 33 branches and sub-branches (including its internet branch and Kansai mini office), two “24x7” state-of-the-art call centers, a new best-in-class internet banking platform, and 102 proprietary ATMs. In addition, we offer access to ATMs across Japan through alliances with Japan Post Bank, city banks, regional banks and convenience stores, etc. This network is the backbone which helps CJL to seamlessly meet the needs of mass affluent retail clients in Japan’s major cities. CJL continues this tradition of innovation even today. Our approach to banking continues to leverage innovation to provide more effective servicing formats and a customer centric approach. We continue to enhance our virtual banking offering through our PC and mobile online systems and call centers that make banking simpler, and more accessible and convenient for the customers that we serve. In addition to providing high levels of convenience in domestic banking services, CJL leverages its global platform to provide our customers with support overseas with cash services, global financial advice, and multiple foreign currency denominated products.

In addition to our local presence, global connectivity, and broad suite of banking products and services, CJL is able to provide our retail customers with global ATM access, market-leading foreign exchange capabilities, and a wide range of carefully selected deposit and investment opportunities. For Citigold customers, CJL also provides advice and services tailored for growth and protection of personal assets through specially trained Citigold Executives at exclusive Citigold Centers within CJL’s core branches. CJL continues to expand its core product offering to include insurance, bond, loan and structured deposits to enable our customers to access to a broader product suite to serve their long term needs more effectively. The competitive environment is intensifying as our competitors make efforts to follow our marketing strategies including a greater focus on our core target market, the retail mass affluent, as well as broadening their product offering to include foreign currency denominated products. It is with this in mind that we will simultaneously pursue both increasingly efficient business operations, and maintain our focus on continually improving both our

products and service offers to our mass affluent customers through deeper insight and customer centricity, and by expanding our sales network and upgrading our products.

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<Major Business Activities> We continued to serve our customers based on our positioning as Japan’s True Global Bank, offering a unique set of capabilities from basic banking services to more specialized wealth management offerings including local and global ATM access, market-leading foreign exchange capabilities, a wide range of carefully selected deposit and investment opportunities, insurance products, mortgages and other secured loans, and preferential “Citigold” and “Citigold Premium” services. In order to better serve our customer’s long term needs we have enhanced our banking products and services line up to offer a broader range of products across the risk spectrum. We have not only enhanced our insurance products but also strengthened our range of lending products based upon an analysis of customers’ needs. In addition we have also put greater emphasis on publically offered and privately placed fixed income bonds and structured notes. One of our primary focus areas continued to be in lending activities. We broadened the range of customers eligible for our Real Estate Advantage Loan to include our Gold as well as Premium level customers. Also, we have newly launched an unsecured personal loan product from last year to meet customers' multi-purpose needs. In addition, to help meet our clients’ needs for medium and long-term investments we have continued to expand both the breadth of our Whole Life insurance product line-up denominated in both Japanese Yen and foreign currency as well as our alliance with world leading insurance companies to provide expert insurance specialists to better advise our customers regarding their insurance needs.

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＜Retail Banking Network＞

Retail Banking Network (As of July 1, 2013) • “24x7” call centers • Internet banking platform • 33 branches and sub-branches (including Kansai mini office) • 102 proprietary ATMs • ATMs of affiliated financial Institutions (the Japan Post Bank, city banks, regional banks

and convenience stores, etc.)

Overseas Network Citibank’s ATM Banking Card is usable at approximately 1.8 million CDs/ATMs in 200 countries worldwide allowing withdrawal of funds from a Yen Savings Account in the local currency of the country where the ATM is located.

Nationwide Branch and ATM Network Bank Code : 0401

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Corporate Banking Division In corporate banking, CJL focuses on providing comprehensive global relationship management services to a targeted set of Japan’s largest multi-national companies and institutions. We coordinate and leverage Citi’s broad range of products and services, together with Citi’s unrivaled global network, in order to support the growth ambitions of our clients both here in Japan and around the globe. CJL’s Corporate Banking Division, located in Tokyo and Osaka, focuses on delivering innovative relationship-driven solutions for our clients’ needs related to both their day-to-day operations and their strategic business objectives. We are one of the major finance providers in the syndicated loan market in Japan. Furthermore, CJL pioneered the structured finance market in Japan in the mid-1980’s and over the years has played a vitally important role as a market leader in providing innovative solutions to many of our clients. Corporate Banking Division has a client group consisting of relationship managers and a product group responsible for Corporate Finance product development and offering. Citibank Japan Limited also has product groups in Transaction Services Division and in Markets Division. The client group and product groups together provide solutions to the diversified client needs. Each client group and product group coordinates across the respective global network within Citi, which enables us to build comprehensive relationships with our clients and their affiliates both in Japan and overseas. This has been the unique and unrivaled strength of Citi. <Major Business Activities> Our client coverage model consists of 3 departments: Corporate Relationship Management Dept., Financial Institutions & Public Sector Relationship Management Dept. and Global Subsidiaries Group Relationship Management Dept. Each client coverage department is committed to serving the unique needs of their client set, by combining information and services with specialized Industry insight. By combining a deep understanding of each client’s unique needs with a view of key industry trends, we are in a position to tailor structured solutions to help our clients meet their growth ambitions. We focus on responding to our clients’ various day-to-day needs, as well as strategic business objectives by offering financing alternatives and bank capital in an effort to build and further deepen long term relationships. Corporate Banking Division works closely with 3 product groups of Citibank Japan Limited. - Transaction Services Division (Cash Management, Trade Finance, Securities Fund Services and Export Agency Finance), Markets Division (Foreign Exchange and Risk Treasury) and Corporate Finance Department (Structured Finance, Real Estate and Acquisition Finance & Syndicated Lending) - to serve our clients and provide solutions that meet their needs. We have further strengthened our capability to support our Japanese clients around the globe through “Japan Desks” offering exclusive relationship management efforts by experienced bankers. We are located in 11 countries. Many of these Japan Desks provide coverage to neighboring countries and jurisdictions. Our client support structure has become increasingly more available pan-regionally around the globe, covering North and South America, Europe, Middle East, Africa, and Asia. Citi’s Japan Desk Network is an unrivaled and unique service to our clients. Our bankers at Japan Desks leverage their vast experiences in Japan, continue to build and further deepen great relationships with our clients and colleagues around the globe, and support our clients to meet their financial needs.

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< Japan Desk Locations>

United Kingdom (London) Singapore

Russia (Moscow) China (Shanghai)

India (Delhi) United States (New York)

Thailand (Bangkok) Brazil (Sao Paulo)

Indonesia (Jakarta) United Arab Emirates (Dubai)

Philippines (Manila)

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● Japan Desk Locations

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Global Markets

Financial Advice

Acquisition Finance & Syndication Lending

Transaction Services

Managing Risks

Global Relationship Management

Investing Money Moving Money

Raising Money

Corporate Finance

Citi’s Japan Desks around the World (As of July 1, 2013)

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Transaction Services Division Transaction Services Division in CJL offers integrated cash management, trade finance, and securities services to multinational corporations, financial institutions and public sector clients in Japan and around the world. A leader in the industry, we combine capability, experience and innovation to deliver unparalleled transaction banking solutions for our clients, enabling them to be competitive and sustainable, today and in the future. Citi Transaction Services is closely aligned with three important on-going trends - globalization, urbanization and digitization – and as the business world continues to get smaller and our clients continue to expand globally, we have been stepping up support to assist our Japanese and other global clients expand. Capability Leveraging the industry's largest proprietary network, we are uniquely qualified to serve both the local and cross-border interests of clients to increase efficiency and reduce costs, effectively manage business objectives locally and globally as well as gain greater control over financial positions. As Japanese companies continue the process of rapid globalization, Citi is uniquely positioned to be their partner and Global Bank. Experience Transaction Services is part of Citi’s legacy in Japan which dates back over 110 years to when we opened our first Japanese branch. Today we are the leading foreign corporate banking franchise in Japan, with services including, cash management, trade finance, export agency finance, and security services. Ensuring our solutions cater to the needs of our clients today and in the future, the Transaction Services Division remains engaged in the fabric of the local financial services landscape both in Japan, across the region and around the world. We are trying to be a trusted thought leader with and strategic advisor on industry issues such as local securities markets, emerging markets, settlement risk, receivables and payment processes, securities infrastructure and technology integration to regulatory organizations and third-party partners. Innovation We continue to rethink how we do business leveraging Citi’s innovation Labs as a catalyst for the generation and platform development to nurture new ideas. Combined with our investments in technology, the strategy enables efficient commercialization for greater success and innovation that harnesses the true depth of our product expertise and network breadth. Our on-line portal, CitiDirect BE and its mobile version are examples of Citi’s investments in innovation that add to our offering of solutions in Japan. <Major Business Activities> Our deep and specialized industry experience provides innovative banking solutions and service flexibility to ensure that we innovate in anticipation of our clients future needs. Japanese companies are showing increasing interest in global cash management, from the need to enhance their treasury operations system to new opportunities that come with an excessively volatile market. Citi’s proprietary cash management platform "Treasury Vision" responds to such needs for Japanese companies, as does our unique Against-the-sun-Sweep product which concentrates cash around the world to Japan. Cross-border Shared Services Centers are also where Citi's cash management can be valuable when companies intend to centralize payments of multiple countries for more efficiency. Our powerful Global Concentration Engine mobilization tool which automates true end-of-day consolidation of funding was launched last year and has proven to be critical for our Japanese clients as they expand into the Asia Pacific market; allowing us to extend our leading position in global cash management in Japan. In terms of new products for our Securities Services clients, we have introduced an innovative Third Party Clearing offering allowing our intermediary clients to focus on what matters to them most, growing their core businesses, with flexible Clearing and Settlement Outsourcing Solutions. Through the industry’s largest proprietary network in 61 markets, including 16 Asia Pacific markets and outreaching the nearest competitor by 20 markets – clients doing business in Japan can leverage Citi's local market expertise and global reach to extract value across the entire investment value chain.

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The constant progress in information technology has brought new possibilities and convenience to financial services. Citi continuously invests every year for the further upgrade of our technology and build new platforms for our global Transaction Services business. Our CitiDirect on-line portal also provides best in class analytics to optimize your cash and securities portfolio. Our award-winning web-based banking platform, CitiDirect® Online Banking, is available in 138 currencies and in 24 languages, allowing Japanese clients to digitally connect to our network, linking hundreds of clearing houses, exchanges and other financial institutions, to process their transactions. 2012 Local Awards No.1 Foreign Cash Management Bank – Japan by Corporates, Asiamoney Poll 2012 No.1 Cross-border Cash Management Services – Japan by Corporates, Asiamoney Poll 2012 No.1 Domestic Cash Management Services – Japan by Corporates, Asiamoney Poll 2012 Best Corporate / Institutional Internet Bank – Japan by Global Finance, World’s Bet Internet Banks 2012 Best Subcustody Mandate: RBC Dexia Investor Services, Triple A Transaction Banking Awards by The

Asset 2012 Best ECA-backed Facility in Vietnam: National Power Transmission Vietnam, Triple A Transaction

Banking Awards by The Asset 2012 Top Rated for Leading Clients in Global Custodian’s Agent Banks in Major Markets Survey 2012

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Markets Division The Markets Division is a new division, established in July 2013, with a mission to conduct foreign exchange, money market and derivative transactions for the customers of the Corporate Banking Division and the Transaction Services Division. Prior to its establishment, these services were provided by the Markets Department in the Corporate Banking Division and the Treasury Division. Under the new structure, we will increasingly focus on market trade and aim to build more robust customer relationships by providing more valuable information. We believe that the establishment of this division has significant impact to ensure appropriate and timely compliance with market trade related laws and regulations, both in Japan and globally. The Markets Division consists of two departments, Market Sales and Risk Treasury, each responsible for the following businesses. <Major Business Activities> The Market Sales Department consists of two units, Corporate FX Sales Unit and Corporate Derivative Sales Unit, and conducts foreign exchange and derivative transactions for the customers of the Corporate Banking Division and the Transaction Service Division. The department was created in July 2013, in conjunction with the establishment of the Markets Division, and is headed by a professional experienced in market activities, who was transferred from the New York head office. The Corporate FX Sales unit leverages Citigroup’s international network and global resources to deliver real-time information to the customers. The unit also provides various types of risk-management related advices and foreign exchange transaction support, building on its well-established and powerful presence as a “market maker” in the foreign exchange market. (Citigroup was ranked as the second best FX bank by the Euromoney Foreign Exchange survey in 2013.) Corporate Derivative Sales unit was created in July 2013, in conjunction with the establishment of the Markets Division. The unit offers a wide range of derivative solutions to the customers, in order to satisfy their diverse needs. The Risk Treasury Department leverages Citigroup’s extensive international network to provide money market transactions in various currencies, in order to meet the customers’ funding and investment needs. Risk Treasury also acts as a funding department in CJL. Based on the policy decisions of the Asset Liability Committee, a sub-committee of CJL’s Management Committee, Risk Treasury ensures appropriate liquidity management and conducts Banking account management as part of the comprehensive risk management framework, in coordination with the Corporate Treasury Division, which is responsible for liquidity risk management.

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List of CJL’s Major Activities

CJL provides the following services:

1. Acceptance of Deposits Current deposit, savings deposit, deposit callable on demand (tsuchi-yokin), time deposit, negotiable certificate of deposit, foreign currency deposit, etc.

2. Fund Lending etc.

Loan on bills, loan on deeds, overdraft, discount of commercial bills, etc. 3. Fund Transfer, etc.

Outward/inward remittance, fund transfer and collection of payment 4. Foreign Exchange, etc.

Foreign exchange transactions (including foreign currency sales and purchase) 5. Others

(1) Guaranty of liabilities (acceptance of payments), issuance of letter of credit and acceptance of bills

(2) Arrangement for syndicated loan (3) Trade finance (purchase of trade notes, etc.) (4) Investment / Trading in securities (Japanese government bonds, etc.) (5) Acquisition or transfer of monetary claims, and securitization related services (6) Handling of receipt of money and other affairs pertaining to money of Government of Japan,

local public authorities, and companies, etc. (7) Dealing in financial derivatives (interest rate, currency, etc.) (8) Over-the-counter sales of mutual funds and insurance products (9) Safekeeping and transfer of securities, etc. (10) Brokerage for clearing of securities, etc. (11) Handling of private placement of securities (12) Financial instruments intermediary service (13) Money exchange (14) Foreign Bank Agency Service

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Risk Management Framework

Risk Management Structure CJL’s risk management framework balances strong corporate oversight by the Board of Directors with well defined oversight roles and responsibilities amongst the Control functions covering the various risk types. CJL has the following three layers of risk management or control:

1) Risk ownership by the business divisions 2) Oversight by the control functions 3) Independent Assessment by Internal Audit

All three layers of control work together to achieve CJL’s shared goals with the following particular items:

• To maintain a highly effective control environment and to establish efficient, proactive risk management; and

• To foster appropriate solutions for our customers and to facilitate business growth in accordance with agreed strategic goals and with the risk management capacity of CJL

CJL establishes fundamental principle “Comprehensive Risk Management Policy” which is approved by Board of Directors and it defines its risk management structure. Additionally, CJL establishes “Comprehensive Risk Management Rules” to define its risk management procedure. CJL adopts a comprehensive risk management approach and Comprehensive Risk Manager who oversees risks will ensure that Management Committee and the Board of Directors are kept advised of the risks of and to CJL in a comprehensive manner.

Type of risk to be managed CJL identifies credit risk, market risk, liquidity risk, and operational risk as major risks and those are subjected to manage.

• Credit Risk

1. Structure of Credit Risk Management: Credit risk is the risk of loss arising from decline in asset value attributable to deterioration of obligor’s credit condition. It includes the risk of difficulty to collect principal and interest due to default of obligor and decline in credit value due to increase of reserves arising from deterioration of obligor’s credit condition. CJL establishes “Credit Risk Management Policies” which defines fundamental principle to comprehensively manage its credit risk in Corporate Banking Division and Retail Banking Division. In terms of credit management in each division, CJL also establishes “Institutional Client Group Risk Management Manual”, “Global Consumer Credit and Fraud Risk Policies” and “Global Commercial Credit Policies” in order to set and govern credit risk management structure. Furthermore, Credit Risk Management Committee (“CRMC”) is established and managed by Head of the Risk Management Division to oversee CJL’s credit risk including the management of self-assessment of assets with further involvement of managements.

2. Procedure of Credit Risk Management: CJL manages credit risk based on obligor analysis and whole portfolio analysis, monitoring concentration of credit to certain industries, ratings, obligors on relationship basis and delinquency trend of a portfolio. Such portfolio view of our credit exposures is reviewed and reported to the Credit Risk Management Committee in a timely manner.

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• Market Risk / Liquidity Risk

1. Structure of Market Risk / Liquidity Risk Management: Market risk is the risk of loss resulting from fluctuating value of financial asset and debt position which CJL possesses or executes, reflecting market trend. Liquidity risk is the risk of loss resulting from unavailability to secure sufficient asset liquidity against debt due to rising financing costs or mismatch of use of funds and source of funds. In CJL, market risk and liquidity risk management structures are established and operated in accordance with the “Market Risk Management Policy” or related management policies. Furthermore, CJL establishes Asset Liability Committee (“ALCO”) which is chaired by President and Head of the Corporate Treasury Division to oversee market risk and liquidity risk, monitoring accrual portfolio and trading portfolio of CJL and managing balance sheet as well as capital adequacy.

2. Procedure of Market / Liquidity Risk Management:

CJL Market Risk Management captures consolidated profiles of interest rates and durations of the financial assets and liabilities, performs risk monitoring process using gap analysis and interest rate factor sensitivity analysis, and reports the result to the ALCO meeting on a monthly basis. CJL’s market risk amount is measured by Value-at –Risk (“VaR”) method quantitatively and its regulated compliance status is monitored..

• Operational Risk

1. Structure of Operational Risk Management: Operational risk is the risk of loss resulting from inadequate or failed internal processes, systems, or human factors, or from external events. It includes reputation and franchise risks associated with CJL’s business practices or market conduct. It also includes the risk of failing to comply with laws, regulations, ethical standards, regulatory administrative actions or Citigroup policies. To comprehensively manage operational risk, CJL establishes policies and rules for operational risk which clearly defines risks, control environment, as well as assessment and reporting procedures. CJL separately manages its Jimu risk and System risk in accordance with the established policies and standards. Moreover, CJL has established Enterprise Risk Management as a responsible division for comprehensive operational risk management. The status update of operational risk management is reported to Business Risk, Compliance & Control Committee (“BRCC”), and Jimu risk and System risk are reported to System and Operations Committee (“SOC”), with further involvement of managements.

2. Procedure of Operational Risk Management: CJL adoptｓ a Manager’s Control Assessment (“MCA”) program as a tool to manage ‘significant’ operational risk to self-assess key operational risks and controls and identify and address weaknesses in the design and/or effectiveness of internal controls that mitigate significant operational risks. Corrective actions are monitored continuously for full implementation. Results of MCA are reported managements through BRCC at quarter end. Critical operational processes of each business department are reviewed periodically in consideration of changes to the operational processes and regulatory environment, and latest information shall be reflected into MCA.

18

Compliance Framework

Basic Policy

As a bank, CJL fully recognizes the importance of its social responsibilities and the public nature of its business. We understand that conducting business with fairness and integrity based on the Code of Conduct and in compliance with laws and regulations, etc. is the basic principle of our management.

Compliance Management Framework

CJL’s Compliance Division covers compliance related matters and is independent from businesses. The Division consists of 5 units under the Head of Compliance Division; (i) Retail Banking Compliance Unit, (ii) Corporate Banking Compliance Unit, (iii) Anti-Money Laundering Compliance Unit, (iv) Infrastructure Unit and (v) Compliance Testing Unit. The first two units are responsible for compliance matters relevant to businesses, AML Compliance Unit covers matters relevant to anti-social forces and the prevention of money laundering, and Infrastructure Unit is responsible for matters relevant to overall banking operations. Compliance Testing Unit has responsibility for testing to assure that controls over compliance matters are reasonably designed and functioning effectively. The Compliance Division owns the Code of Conduct and, in accordance with Compliance Policy, promotes compliance and cultivates a compliance mindset, through following activities.

The Compliance Division reports compliance related issues and compliance status to the Business Risk, Compliance and Control Committee and the Management Committee on a regular and ad-hoc basis. Material issues are to be escalated to the Board of Director through the Management Committee.

Preventive Measures against Anti-Social Forces and Money Laundering

CJL considers that preventive measures against anti-social forces and money laundering are one of the most important parts of legal compliance as a financial institution with public nature, and has continued its efforts to establish a proper prevention framework.

Measures against the Breach of Legal Compliance

It is the responsibility of each of the directors and the employees to comply with the Code of Conduct that provides an overview of some of the key policies of which all need to be aware. We strongly encourage employees to raise concerns or questions regarding ethics and applicable laws, regulations and policies, and to report violations and suspected violations in accordance with the relevant internal policies. We believe that it is critical to identify issues at an early stage and proactively resolve those issues in order to maintain the highest standards of conduct required at a financial institution. CJL has established, in addition to the standard reporting procedures, an Ethics Hotline in order to properly take measures for a violation or a suspected violation of legal compliance.

• Advice and support related to Compliance • Creation and execution of internal rules related to Compliance • Oversees the development and maintenance of adequate risk management systems related to

Compliance • Education and training related to Compliance • Monitors legal and regulatory development that affect the Bank • Oversees the development and maintenance of adequate risk management systems related to

Anti-Money Laundering activities, including customer identification and matters related to Anti Social Forces

• Conducts Compliance Testing

19

Environment

CJL believes that working to promote environmental and social sustainability is a good business practice. Under the banner of “Green Citi”, we are committed to protect the environment through the following initiatives: <Major Activities>

- The Equator Principles - The Carbon Principle (Citi was a drafting member and has adopted these principles) - Achieved LEED (Leadership in Energy and Environmental

Design) Certification Received Silver certification: Citibank Tokyo Call Center

(June 2009) Received Gold certification ・Aoyama Branch (May 2010) ・Nihonbashi Branch and Tokyo Ekimae Branch (July 2011) ・Nagoya Branch (October 2011) ・Shinjuku Higashiguchi Branch and Kobe Branch (April 2012) ・Ikebukuro branch (July 2012)

- Office Initiatives Energy and Resource Savings Paperless processes Recycling in the office

Diversity and CSR Activities

CJL pursues Corporate Social Responsibility (“CSR”) activities in alignment with Citi’s global policies and priorities. We embrace the responsibility, as a socially responsible financial group, to make a difference in the community and to promote environmental and social sustainability by building positive relationships with customers, employees and their families, the community, and stakeholders. Through our CSR activities, we respond to corporate governance and compliance initiatives and also reinforce our commitment to Financial Education, Community Development, the Environment, and Diversity with employees from various backgrounds and nationalities.

Diversity

CJL values and promotes Diversity as a strategic activity. By respecting and accepting various values, ways of thinking and attributes such as nationality, age, gender, sexual orientation, language and religion, we create an environment where differences are respected. Creating an environment where Diversity thrives, actively encourages a wide range of thoughts and ideas in support of our business goals. We encourage our employees to participate and take responsibility for their engagement in Diversity activities, internally and externally which adds to the richness of the society in which we live. <Major Activities>

- Improving career development for women; Celebrating women’s success , International Women’s day 2013

- Work-Life Balance - Encourage the hiring of people with disabilities

Financial Education

Taking advantage of our business expertise, we provide various financial education programs ranging from elementary school to mature adults. We provide learning materials and support for financial education programs, so that the next generation of children can learn not just about money and the economy, but also how to think effectively, and ultimately plan their careers and lives in order to realize their dreams. Two years ago, we launched a new financial education program for mature women. <Major Activities>

- Student City - Travel to the Future - MESE (Management Economic Simulation Exercise) - National Economics Quiz Tournament - University Program - Financial Life Skills and - Money Management for Women

In part, funded by the Citi Foundation. The Citi Foundation supports the economic empowerment and financial Inclusion of people in the communities where Citi operates.

Community Development

CJL strives to make a difference where our employees live and work. We encourage and provide support for philanthropic activities undertaken by our employees and their families, leading many of them to participate actively in the community. <Major Activities>

- Support for the disaster-impacted areas: Volunteer activities by the employees and family, Relief Donations by the employees and the customers, Grants to NPO’s actively engaged in the disaster-impacted areas.

- United Nations World Food Program (WFP) School Feeding Initiatives through Cafeteria Charity Program "Share Your Lunch"

- FIT (Financial Industry in Tokyo) for Charity Run - YMCA Charity Run - Citi Volunteer Program - Global Community Day - Supporting NPOs and NGOs

20

Citibank Japan Ltd.

Financial Information under Japanese GAAP For the fiscal year ended March 31, 2013

21

1. Matters Related to Principal Business

< Business Overview>

We had a net loss of 1.9 billion yen for the year ended March 31, 2013 compared to net income of 1.7 billion yen for the prior fiscal year.

Ordinary income totaled 64.6 billion yen, down by 11.2 billion yen from the prior fiscal year.

Interest income totaled 34.6 billion yen, down by 5.5 billion yen from the prior fiscal year. Fees and commissions totaled 15.1 billion yen, down by 2.4 billion yen from the prior fiscal

year. Trading income totaled 0.8 billion yen, down by 1.9 billion yen from the prior fiscal year. Other ordinary income totaled 12.9 billion yen, down by 1.9 billion yen from the prior fiscal

year. Ordinary expenses totaled 66.2 billion yen, down by 3.8 billion yen from the prior fiscal year.

Interest expense totaled 4.7 billion yen, down by 1.7 billion yen from the prior fiscal year. Fees and commission paid totaled 2.2 billon yen, down by 0.4 billion yen from the prior fiscal

year. Trading losses were zero, versus 0.5 billion yen in the prior fiscal year. General and administrative expenses totaled 59.0 billion yen, down by 0.8 billion yen from the

prior fiscal year. Ordinary loss was 1.5 billion yen compared to ordinary profit of 5.8 billion yen in the prior fiscal

year. Loss before income taxes (including extraordinary income and loss) was 2.0 billion yen

compared to income before income taxes of 5.7 billion yen in the prior fiscal year.

As of March 31, 2013, total assets were 4,374.5 billion yen, up by 38.0 billion yen compared to March 31, 2012.

Cash and deposits to other banks (due from banks) totaled 1,729.2 billion yen, down by 197.5

billion yen from the prior fiscal year end. Receivables under resale agreements were 688.8 billion yen, up by 84.7 billion yen from the prior

fiscal year end. Available for sales securities (“AFS securities”) were 858.7 billion yen, up by 31.9 billion yen from

the prior fiscal year end. Loans totaled 330.6 billion yen, up by 31.5 billion yen from the prior fiscal year end. Other assets totaled 247.4 billion yen, up by 86.5 billion yen from the prior fiscal year end.

As of March 31, 2013, total liabilities were 4,111.7 billion yen, up by 40.3 billion yen compared to March 31, 2012.

Deposits totaled 3,541.5 billion yen, up by 31.0 billion yen from the prior fiscal year end. Negotiable certificates of deposit totaled 35.0 billion yen, down by 120.0 billion yen from the prior

fiscal year end. Other liabilities totaled 287.9 billion yen, up by 151.3 billion yen from the prior fiscal year end.

As of March 31, 2013, total net assets were 262.8 billion yen, down by 2.2 billion yen compared to

March 31, 2012.

22

Cash flows from operating activities in the year totaled 58.1 billion yen (Inflow). Cash from investment activities was 35.4 billion yen (Outflow). As a result, cash and cash equivalents as of the fiscal year end totaled 539.8 billion yen.

The capital adequacy ratio (National standards) as of March 31, 2013 was 28.47% compared to

28.77% as of March 31, 2012.

23

<Summary of Principal Business/Financial Indicators> (Millions of Yen)

Ordinary income 191,258 112,113 96,399 75,908 64,668

Ordinary profit (loss) 44,223 21,977 18,132 5,847 (1,541)

Net income (loss) 26,357 12,170 12,509 1,796 (1,983)

Capital stock 123,100 123,100 123,100 123,100 123,100

Total Net assets 299,305 312,307 262,022 265,083 262,823

Total assets 6,189,258 4,600,730 4,244,847 4,336,501 4,374,568

Deposits 5,311,045 3,720,949 3,399,295 3,510,460 3,541,504

Loans and bills discounted 294,390 283,100 250,088 299,056 330,614

Available for sale (AFS) securities 688,830 737,742 756,974 826,775 858,729

Total shares issued (thousand shares) 244,200,000 244,200,000 244,200,000 244,200,000 244,200,000

Capital adequacy ratio (National standard) 23.56% 25.13% 25.16% 28.77% 28.47%

Dividend payment ratio - - 487.64% - -

Number of employees 1,548 1,608 1,676 1,796 1,852

March 2013 Year end

(Apr. 1, 2012 - Mar. 31, 2013)

March 2009 Year end

(Apr 1, 2008 - Mar 31, 2009)

March 2010 Year end

(Apr 1, 2009 - Mar 31, 2010)

March 2011 Year end

(Apr. 1, 2010 - Mar. 31, 2011)

March 2012 Year end

(Apr. 1, 2011 - Mar. 31, 2012)

24

<Principal Business/Financial Indicators> Gross operating profit

(Millions of Yen)

Domestic International Total Domestic International Total

Interest income 7,944 32,215 40,159 7,941 26,706 34,647

Interest expenses 747 5,687 6,435 339 4,367 4,707

Fees and commissions 8,340 9,189 17,530 7,594 7,513 15,108Fees and commissions paid 2,271 350 2,621 1,924 290 2,215

Trading income 168 2,585 2,754 (824) 1,648 824

Trading losses (218) 741 522 - - -

Other ordinary income 291 14,598 14,889 900 12,085 12,985

Other ordinary expenses 229 0 229 - 19 19

13,714 51,810 65,525 13,347 43,276 56,624

0.80% 2.71% 1.81% 0.71% 2.54% 1.58%

Gross operating profit

Gross operating profit ratio

March 2012 Year end(Apr. 1, 2011 - Mar. 31, 2012)


Interest income and expenses

Fees and commission

Trading income and losses

Other ordinary income andexpenses

（Notes）

1. Domestic operations are yen-denominated transactions and international operations are foreign currency-denominated transactions conducted in Japan. However, non-resident yen-denominated transactions and offshore account transactions, etc. are included in the international operations.

2. Gross operating profit ratio ＝(gross operating profit / average balance of interest-earning assets) x 100 ÷ (the number of days of the period / 365)

25

Average balance, Interest and Yield of Interest-Earning Assets / Interest-Bearing Liabilities (Millions of Yen)

Domestic operations

International operations Total

Domestic operations

International operations Total

Average balance 1,704,118 1,911,270 3,615,389 1,878,616 1,702,223 3,580,840

Interest 7,944 32,215 40,159 7,941 26,706 34,647

Yield (%) 0.46 1.68 1.11 0.42 1.56 0.96

Average balance 141,328 188,414 329,743 179,762 149,334 329,097

Interest 2,126 2,101 4,227 2,315 2,059 4,375

Yield (%) 1.50 1.11 1.28 1.28 1.37 1.32

AFS securities Average balance 743,146 5,971 749,117 827,351 5,948 833,299

Interest 4,924 120 5,044 4,693 120 4,814

Yield (%) 0.66 2.02 0.67 0.56 2.02 0.57

Call loans Average balance 12,147 60,051 72,199 11,860 96,879 108,740

Interest 12 370 383 12 341 354

Yield (%) 0.10 0.61 0.53 0.10 0.35 0.32

Average balance 380,952 - 380,952 387,368 35,220 422,589

Interest 375 - 375 381 448 829

Yield (%) 0.09 - 0.09 0.09 1.27 0.19

Average balance 2,951 - 2,951 3,357 - 3,357

Interest 48 - 48 54 - 54

Yield (%) 1.62 - 1.62 1.61 - 1.61

Average balance 423,589 1,572,957 1,996,546 468,865 1,284,078 1,752,943

Interest 415 28,980 29,396 439 22,990 23,429

Yield (%) 0.09 1.84 1.47 0.09 1.79 1.33

Average balance 2,048,529 1,582,900 3,631,430 1,788,629 1,818,004 3,606,633

Interest 747 5,687 6,435 339 4,367 4,707

Yield (%) 0.03 0.35 0.17 0.01 0.24 0.13

Deposits Average balance 1,908,934 1,479,903 3,388,837 1,691,625 1,713,255 3,404,880

Interest 653 5,631 6,284 273 4,333 4,607

Yield (%) 0.03 0.38 0.18 0.01 0.25 0.13

Average balance 139,537 - 139,537 96,555 - 96,555

Interest 93 - 93 63 - 63

Yield (%) 0.06 - 0.06 0.06 - 0.06

Call money Average balance 54 131 186 - 359 359

Interest 0 1 1 - 0 0

Yield (%) 0.09 0.99 0.72 - 0.14 0.14

Borrowed money Average balance 9 18 28 4 386 391

Interest 0 0 0 0 7 7

Yield (%) 0.08 1.51 1.00 0.16 2.04 2.01

Negotiable certificates of deposit

Loans and bills discounted

March 2012 Year end (Apr. 1, 2011 - Mar. 31, 2012)


Interest-earning assets

Interest-bearing liabilities

Due from banks with interest

Monetary claims bought

Receivables under resale agreements

(Notes) 1. Average balance of foreign currency-denominated transactions in Japan, which are classified as international operations,

is calculated based on the daily basis. 2. Average balance of and interest accrued from borrowing and lending between domestic and international operations are

offset. 3. Due from bank without interest is excluded from Interest-earning assets and the amount equivalent to Money held in trust

is excluded from Interest-bearing liabilities.

26

Analysis of interest received / paid (Millions of Yen)

Domestic operations

International operations

TotalDomestic operations

International operations

Total

Volume-related increase (decrease) (322) (9,886) (7,786) 813 (3,523) (383)

Rate-related increase (decrease) (201) 2,118 (505) (816) (1,985) (5,129)

Net increase (decrease) (523) (7,767) (8,291) (3) (5,509) (5,512)

Volume-related increase (decrease) (129) 1,051 962 576 (433) (8)

Rate-related increase (decrease) (76) (655) (771) (386) 391 155

Net increase (decrease) (205) 396 190 189 (42) 147

AFS Securities Volume-related increase (decrease) 203 (5) 204 555 0 564

Rate-related increase (decrease) (404) 0 (411) (786) 0 (794)

Net increase (decrease) (201) (5) (207) (230) - (230)

Call loans Volume-related increase (decrease) (14) (51) (100) 0 224 193

Rate-related increase (decrease) (1) 52 85 0 (253) (223)

Net increase (decrease) (15) 0 (15) 0 (28) (29)

Volume-related increase (decrease) (83) - (83) 5 448 37

Rate-related increase (decrease) (44) - (44) 0 - 416

Net increase (decrease) (128) - (128) 5 448 453

Volume-related increase (decrease) (1) - (1) 6 - 6

Rate-related increase (decrease) (6) - (6) 0 - 0

Net increase (decrease) (8) - (8) 6 - 6

Volume-related increase (decrease) 9 (11,243) (9,452) 40 (5,315) (3,580)

Rate-related increase (decrease) 20 3,180 1,419 (16) (675) (2,385)

Net increase (decrease) 30 (8,062) (8,032) 23 (5,990) (5,966)

Volume-related increase (decrease) (123) (1,591) (1,282) (94) 844 (42)

Rate-related increase (decrease) (800) (1,091) (2,323) (313) (2,164) (1,686)


Deposits Volume-related increase (decrease) (90) (1,688) (1,284) (65) 886 28

Rate-related increase (decrease) (723) (993) (2,212) (314) (2,184) (1,705)


Volume-related increase (decrease) (35) - (35) (25) - (25)

Rate-related increase (decrease) (72) - (72) (4) - (4)

Net increase (decrease) (108) - (108) (30) - (30)

Call money Volume-related increase (decrease) 0 0 0 0 2 1

Rate-related increase (decrease) 0 0 1 - (3) (2)

Net increase (decrease) 0 0 0 0 0 0

Borrowed Money Volume-related increase (decrease) - - - 0 5 3

Rate-related increase (decrease) 0 0 0 0 2 3

Net increase (decrease) 0 0 0 0 7 7


Negotiable certificates of deposit


Interest received

Interest paid

Loans and bills discounted

Receivables under resale agreements

Due from banks with interest

Monetary claims bought

（Note）Changes due to a combination of volume - and rate - related increase (decrease) have been included in rate - related

increase (decrease).

27

Yield on interest-earning assets, Yield on interest-bearing liabilities, Net yield/Interest rate (%)


Yield on interest-earningassets

0.46 1.68 1.11 0.42 1.56 0.96

Yield on interest-bearingliabilities including generalexpenses

1.64 2.05 1.82 1.83 1.65 1.74

Net yield / Interest rate (1.17) (0.36) (0.71) (1.41) (0.08) (0.78)



Fees and commissions

(Millions of Yen)


8,340 9,189 17,530 7,594 7,513 15,108

Fees and commissions on fundtransfer

1,086 3,040 4,127 1,214 3,371 4,585

Other fees and commissions 7,254 6,148 13,403 6,379 4,142 10,522

2,271 350 2,621 1,924 290 2,215

Fees and commissions on fundtransfer

424 225 650 431 229 661

Other fees and commissions 1,846 124 1,971 1,493 61 1,554

6,069 8,839 14,908 5,669 7,223 12,893Fees and commissions profit



Fees and commissions

Fees and commissions paid

28

Trading income and losses (Millions of Yen)


Trading income 168 2,585 2,754 (824) 1,648 824

Gains on trading accountsecurities transactions

- - - - - -

Gains on securities andderivatives related totrading transactions

- - - 706 (284) 421

Gains on trading-relatedderivatives transactions

168 2,585 2,754 (1,530) 1,932 402

Other trading income - - - - - -

Trading losses (218) 741 522 - - -

Losses on tradingsecurities and Derivatives

- - - - - -

Losses on securities andderivatives related totrading transactions

(218) 741 522 - - -

Losses on trading-relatedderivatives transactions

- - - - - -

Other trading losses - - - - - -

Trading profit 387 1,844 2,232 (824) 1,648 824



29

Other ordinary income and expenses (Millions of Yen)


Other ordinary income 291 14,598 14,889 900 12,085 12,985

Gains on foreignexchange transactions - 14,598 14,598 - 12,085 12,085

Gains on sales of bonds 291 - 291 900 - 900

Gains on redemption ofbonds - - - - - -

Income from derivativesother than for trading orhedging

- - - - - -

Others - - - - - -

Other ordinary expenses 229 0 229 - 19 19

Losses on foreignexchange transactions

- - - - - -

Losses on sales ofbonds

- - - - - -

Losses on redemption ofbonds

- - - - - -

Losses on devaluation ofbonds

- - - - - -

Expenses on derivativesother than for trading orhedging

- - - - - -

Others 229 0 229 - 19 19

Other ordinary profit 61 14,598 14,660 900 12,066 12,966



30

General and administrative expenses (Millions of Yen)

Salary 19,085 20,169

Accrued pension cost 2,994 3,180

Welfare expenses 205 159

Depreciation cost 2,395 2,223

Rental fees on land, buildings, and machinery 5,332 5,383

Maintenance cost 216 205

Supplies cost 365 342

Utilities cost 131 145

Expenses of business trip 241 260

Communication charge 1,139 1,113

Advertising expenses 2,097 1,623

Membership, Contribution and Business promotion 228 211

Tax and public charges 1,334 1,078

Others 24,144 22,960

Total 59,911 59,058



Profit ratio (%)

Ordinary profit to total assets 0.14 (0.03)

Ordinary profit to capital (net assets) 2.21 (0.58)

Net income to total assets 0.04 (0.04)

Net income to capital (net assets) 0.68 (0.75)



Ordinary profit / (Number of days of the period / 365)

Average balance of total assets (excl. customers' liabilities for acceptances and guarantees)

Ordinary profit / (Number of days of the period / 365)

　（Beginning net assets + net assets）/2

Net income / (Number of days of the period / 365)

Average balance of total assets (excl. customers' liabilities for acceptances and guarantees)

Net income / (Number of days of the period / 365)

（Beginning net assets + net assets）/2

×100

= ×100

×100

×100

=

=

=

Ordinary profit to total assets

Ordinary profit to capital (net assets)

Net income to total assets

Net income to capital (net assets)

31

<Indicators for Deposits>

Average balance by deposit type (Millions of Yen)


Liquid deposits 1,658,376 - 1,658,376 1,556,475 - 1,556,475

Time deposits 246,225 - 246,225 129,523 - 129,523

Negotiable certificates ofdeposit

139,537 - 139,537 96,555 - 96,555

Others 4,332 1,479,903 1,484,235 5,626 1,713,255 1,718,881

Total 2,048,472 1,479,903 3,528,375 1,788,181 1,713,255 3,501,436

As of Mar. 31, 2012 As of Mar. 31, 2013

(Note) Liquid deposits ＝ current deposits ＋ ordinary deposits ＋ saving deposits ＋ deposits at notice

Time deposits balance by remaining tenor

(Millions of Yen)

Less than3 months

Over 3months,

lessthan 6months

Over 6months,

lessthan 1year

Over 1year,less

than 2years

Over 2years,less

than 3years

Over 3years

TotalLess than3 months

Over 3months,

lessthan 6months

Over 6months,

lessthan 1year

Over 1year,less

than 2years

Over 2years,less

than 3years

Over 3years

Total

Fixed interesttime deposits

130,933 27,697 13,812 1,814 488 10 174,756 58,218 22,752 12,106 1,441 603 8 95,129

Floating interesttime deposits

3,047 6,261 1,540 - 460 125 11,433 2,245 4,002 - 460 - 125 6,832

Others - - - - - - - - - - - - - -

Total 133,980 33,958 15,352 1,814 948 135 186,190 60,463 26,754 12,106 1,901 603 133 101,962

As of Mar. 31, 2012 As of Mar. 31, 2013

32

<Indicators for Loans and Bills Discounted>

Balance by loan type (1) Balance at the end of period


Loans on bills 37,630 43,457 81,087 24,410 2,139 26,550

Loans on deeds 84,303 96,556 180,860 136,247 147,427 283,674

Overdrafts 34,623 1,692 36,315 16,868 2,649 19,517

Bills discounted 792 - 792 872 - 872

Total 157,351 141,705 299,056 178,398 152,216 330,614

(Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

(2) Average balance


Loans on bills 31,365 7,194 38,559 31,782 39,997 71,780

Loans on deeds 77,302 176,315 253,618 124,931 105,932 230,863

Overdrafts 32,523 4,904 37,427 22,670 3,405 26,075

Bills discounted 137 - 137 378 - 378

Total 141,328 188,414 329,743 179,762 149,334 329,097

(Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Balance of loans and bills discounted by remaining tenor

(Millions of Yen)

Less than1 year

Over 1year,less

than 3years

Over 3years,less

than 5years

Over 5years,less

than 7years

Over 7years

TotalLess than

1 year

Over 1year,less

than 3years

Over 3years,less

than 5years

Over 5years,less

than 7years

Over 7years

Total

Fixed interestloans and bills discounted

31,823 129 94 129 562 32,739 18,290 15,104 14,080 99 548 48,123

Floating interestloans and bills discounted

106,988 62,883 20,431 13,301 62,712 266,316 89,993 77,403 10,691 21,585 82,816 282,491

Total 138,812 63,012 20,525 13,430 63,275 299,056 108,284 92,508 24,771 21,685 83,365 330,614

As of Mar. 31, 2012 As of Mar. 31, 2013

33

Balance of loans and bills discounted by collateral type (Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Type of collateral pledged Loans and bills discounted Loans and bills discounted

Deposits 9,229 6,677

Securities 6,631 4,740

Claims - -

Commodities - -

Real estates 48,626 52,181

Foundations - -

Others 14,625 11,679

Sub-total 79,112 75,278

Guarantees 43,621 67,489

Clean credits 176,322 187,846

Total 299,056 330,614 Balance of customers’ liabilities for acceptances and guarantees by collateral type

(Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Deposits 18 8,143

Securities 33,613 37,089

Claims - -

Commodities - -

Real estates - -

Foundations - -

Others - -

Sub-total 33,632 45,232

Guarantees - -

Clean credits 48,565 42,433

Total 82,197 87,666

Type of collateral pledgedCustomers' liabilities for acceptances

and guaranteesCustomers' liabilities for acceptances

and guarantees

Balance of loans and bills discounted by use

(Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Lending for equipments 92,925 116,076

Lending for operations 206,131 214,537

Total 299,056 330,614

34

Balance of loans and bills discounted by industry (Millions of Yen)

Amount (%) Amount (%)

Domestic

Manufacturing 17,586 5.88% 13,275 4.02%

Agriculture / Forestry - - - -

Fishery - - - -

Mining - - - -

Construction - - - -

Electric/gas/heat supply/water - - - -

Information and telecommunications 23,098 7.72% 11,866 3.59%

Shipping / transportation 8,017 2.68% 10,000 3.02%

Wholesale / retail 78,032 26.09% 71,051 21.49%

Finance / insurance 23,715 7.93% 59,113 17.88%

Real estate 2,987 1.01% 9,633 2.91%

Other Services 8,912 2.98% 6,719 2.03%

Central / Local government - - - -

Individuals 61,260 20.48% 60,718 18.37%

Overseas 75,446 25.23% 88,236 26.69%

Total 299,056 100% 330,614 100%

As of Mar. 31, 2012 As of Mar. 31, 2013

Balance of loans and bills discounted for small and medium size businesses

(Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Total loans and bills discounted (A) 299,056 330,614

Balance of loans for small and medium sizecorporations etc. (B)

120,900 150,864

(B) / (A) 40.42% 45.63% (Note) Small and medium size corporation etc. refers as followings;

- companies with its capital less than or equal to 300 million yen (100 million yen for wholesale businesses and 50 million yen for retail sale and services businesses), or

- companies with its full-time employees less than or equal to 300 on the payroll (100 for wholesale, 50 for retail sale and 100 for services), or

- individuals.

Balance of specified overseas claims Not applicable.

35

Loans - to - deposits ratio (%)


Balance at the end of period 7.92 8.43 8.15 9.95 8.52 9.24

Average balance 6.89 12.73 9.34 10.05 8.71 9.39

As of Mar. 31, 2012 As of Mar. 31, 2013

(Note) Negotiable certificates of deposit are included in “deposits”.

Allowance for loan losses (Millions of Yen)

CategoryBeginningbalance

Increased DecreasedEndingBalance

Beginningbalance

Increased DecreasedEndingBalance

Allowance for general loanlosses

898 1,335 898 1,335 1,335 1,159 1,335 1,159

Allowance for specific loanlosses

3,320 3,053 3,320 3,053 3,053 2,266 3,053 2,266

Specified overseas claimreserve account

- - - - - - - -

Total 4,218 4,388 4,218 4,388 4,388 3,426 4,388 3,426

As of Mar. 31, 2012 As of Mar. 31, 2013

Loan write-offs

Not applicable.

Risk management Loans

(Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Bankrupt loans - 1,185

Past due loans/non-accrual loans 7,797 4,730

Past due loans (3 months or more) 0 1,893

Restructured loans 386 15

Total 8,185 7,825

(Notes) 1. “Bankrupt loans” are loans on which accrued interest income is not recognized as there is substantial doubt about the ultimate

collectability of either principal or interest because they are past due for a considerable period of time or for other reasons (excluding write-offs, hereinafter “non-accrual loans”), and as defined in Article 96-1-3 and 96-1-4 of the Enforcement Ordinance of the Japanese Corporate Tax Law.

2. “Past due loans/non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are deferred in order to support the borrowers’ recovery from financial difficulties.

3. “Past due loans (3 months or more)” are loans on which the principal or interest is past due for three months or more from the next day of prescribed payment date, excluding “bankrupt loans” and “Past due loans/non-accrual loans”.

4. “Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness) in order to support the borrowers’ recovery from financial difficulties, excluding “bankrupt loans,” “past due loans/non-accrual loans” and “past due loans (3 months or more)”.

36

Claims under the Financial Reconstruction Law (Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Bankrupt / De facto Bankrupt 2,439 2,454

In Danger of Bankrupt 5,367 3,462

Need attention 387 1,909

Subtotal (A) 8,193 7,826

Normal 475,611 532,750

Total (B) 483,805 540,576

(A) / (B) 1.69% 1.44%

(Notes)

1. “Bankrupt / De facto Bankrupt” are claims to bankrupt borrowers in the event of filing for commencement of bankruptcy, corporate reorganization, rehabilitation proceedings and loans pursuant to these proceedings.

2. “In Danger of Bankrupt” are claims of which borrowers are not in bankruptcy but their financial status and business performance deteriorate, with a low collectability of principal and interest under the terms and conditions of the contract.

3. “Need attention” are past due loans (3 months or more) and restructured loans from “risk management loans” 4. “Normal” are claims classified as other than the credit listed in 1 to 3 above, with no problems seen with borrowers’ financial

status and business performance.

37

<Indicators for Securities >

Average balance of securities related to trading transactions (Millions of Yen)

As of Mar. 31, 2012 As of Mar. 31, 2013

Trading Japanese government bonds 241,146 226,616

Trading municipal bonds - -

Trading government guaranteed bonds - -

Other trading securities - 1,096

Total 241,146 227,713

Balance of AFS securities by remaining tenor

(Millions of Yen)

CategoryUp to 1

year1 - 5years

5 - 10years

Over 10years

Indefiniteterm

TotalUp to 1

year1 - 5years

5 - 10years

Over 10years

Indefiniteterm

Total

Japanesegovernment bonds

191,324 528,056 70,091 - - 789,472 189,719 635,510 11,464 - - 836,694

Municipal bonds - - - - - - - - - - - -

Corporate bonds 14,698 - - 16,644 - 31,343 - - - 16,121 - 16,121

Stocks - - - - - - - - - - - -

Foreign bonds - 5,960 - - - 5,960 - 5,913 - - - 5,913

Foreign stocks - - - - - - - - - - - -

Others - - - - - - - - - - - -

Total 206,022 534,017 70,091 16,644 - 826,775 189,719 641,423 11,464 16,121 - 858,729

As of Mar. 31, 2012 As of Mar. 31, 2013

Average balance of AFS securities (Millions of Yen)


Japanese government bonds 712,547 - 712,547 805,746 - 805,746

Municipal bonds - - - - - -

Corporate bonds 30,598 - 30,598 21,604 - 21,604

Stocks - - - - - -

Foreign bonds - 5,971 5,971 - 5,948 5,948

Foreign stocks - - - - - -

Others - - - - - -

Total 743,146 5,971 749,117 827,351 5,948 833,299

As of Mar. 31, 2012 As of Mar. 31, 2013

38

AFS securities - to - deposits ratio (%)


Balance at the end of period 41.34 0.35 22.55 47.60 0.33 24.01

Average balance 36.27 0.40 21.23 46.26 0.34 23.79

As of Mar. 31, 2012 As of Mar. 31, 2013

(Note) Negotiable certificates of deposit are included in “deposits.”

39

2. Financial Statements Financial figures has been audited by KPMG AZSA LLC based on article 396, paragraph 1 of the Corporation Act. <Balance Sheet>

(Millions of Yen)

As of March 31, 2012 As of March 31, 2013

Amount AmountAsset

Cash and due from banks 1,926,826 1,729,253Cash 9,139 9,136

Due from banks 1,917,686 1,720,117

Call loans 101,474 172,037Receivables under resale agreements 604,098 688,838

Receivables under securit ies borrowing transactions 18 -Monetary claims bought 3,641 3,381

Trading assets 229,384 135,529Securities related to trading transactions 180,100 97,008Derivatives of securities related to trading transactions 10 73Trading-related financial derivatives 49,272 38,448

Money held in trust 10 10

Securities 826,775 858,729

Government bonds 789,472 836,694Corporate bonds 31,343 16,121

Other securities 5,960 5,913Loans and bills discounted 299,056 330,614

Bills discounted 792 872Loans on bills 81,087 26,550

Loans on deeds 180,860 283,674

Overdrafts 36,315 19,517Foreign exchanges 98,377 118,022

Due from foreign banks (our accounts) 22,172 16,193Due from foreign banks (their accounts) 18,689 44,496

Foreign bills bought 53,796 55,555

Foreign bills receivable 3,718 1,775Other assets 160,936 247,466

Domestic exchange settlement account (debit) 89 197Prepaid expenses 8,308 4,667

Accrued income 9,728 7,810

Initial margins of futures markets 63 22Variation margins of futures markets 3 49

Derivatives other than for trading-assets 125,963 158,235Cash collateral paid for financial instruments 7,823 65,996

Others 8,955 10,486

Tangible f ixed assets 3,992 3,103Buildings 2,710 2,108

Construction in progress 147 263Other tangible f ixed assets 1,134 731

Intangible f ixed assets 4,099 2,440Software 3,378 2,440

Goodwill 720 -

Deferred tax assets - 900Customers’ liabilities for acceptances and guarantees 82,197 87,666

Allowance for loan losses (4,388) (3,426)Total assets 4,336,501 4,374,568

Account Name

40

(Millions of Yen)

As of March 31, 2012 As of March 31, 2013

Amount AmountLiabilities

Deposits 3,510,460 3,541,504Current deposits 226,007 227,439

Ordinary deposits 1,414,121 1,421,836

Time deposits 186,190 101,962Other deposits 1,684,141 1,790,266

Negotiable certif icates of deposit 155,000 35,000Trading liabilit ies 42,006 51,348

Derivatives of securities related to trading transactions 22 36Trading-related financial derivatives 41,983 51,311

Borrowed money 931 1

Borrowings from other banks 931 1Foreign exchanges 141,547 106,140

Due to foreign banks (their accounts) 115,529 105,988

Due to foreign banks (our accounts) 26,018 151

Foreign bills payable 0 0Other liabilities 136,605 287,969

Domestic exchange settlement account (credit) 566 816Income taxes payable 223 1,009

Accrued expenses 3,850 3,624

Unearned revenue 1,097 1,411Variation margins of futures markets 0 2

Derivatives other than for trading-liabilities 114,522 162,455Cash collateral received for financail instruments 11,840 10,877

Asset retirement obligations 710 706

Others 3,794 107,065Provision for bonuses 481 540

Provision for directors' bonuses 51 91Provision for retirement benefits 1,318 1,090

Provision for directors' retirement benefits 31 39Other provision 191 351Deferred tax liabilities 592 -Acceptances and guarantees 82,197 87,666

Total liabilities 4,071,417 4,111,745Net Assets

Capital stock 123,100 123,100Capital surplus 121,100 121,100

Legal capital surplus 121,100 121,100Retained earnings 16,440 14,457

Legal retained earnings 2,000 2,000Other retained earnings 14,440 12,457　　　Retained earnings brought forward 14,440 12,457Total shareholders' equity 260,640 258,657

Valuation difference on AFS securities 4,447 4,170Deferred gains or losses on hedges (4) (3)

Total valuation and translation adjustments 4,443 4,166Total net assets 265,083 262,823Total liabilities and net assets 4,336,501 4,374,568

Account Name

41

< Statement of Income >

(Millions of Yen)

75,908 64,668Interest income 40,159 34,647

Interest on loans and bills discounted 4,227 4,375Interest and dividends on securities 5,044 4,814Interest on call loans 383 354Interest on receivables under resale agreements 375 829Interest on deposits with banks 29,396 23,429Other interest income 731 844

Fees and commissions 17,530 15,108Fees and commissions on fund transfer 4,127 4,585Other fees and commissions 13,403 10,522

Trading income 2,754 824Gains on securities and derivatives related to trading transactions - 421Gains on trading-related derivatives transactions 2,754 402

Other ordinary income 14,889 12,985Gains on foreign exchange transactions 14,598 12,085Gains on sales of bonds 291 900

Other income 573 1,102Reversal of allowance for loan losses - 15Recoveries of written-off claims 0 12Gain on investments in money held in trust 0 0Others 573 1,073

　 70,060 66,209Interest expenses 6,435 4,707

Interest on deposits 6,284 4,607Interest on negotiable certif icates of deposit 93 63Interest on call money 1 0Interest on borrowings and rediscounts 0 7Interest on interest swaps 2 3Other interest expenses 53 23

Fees and commissions paid 2,621 2,215Fees and commissions on fund transfer 650 661Other fees and commissions 1,971 1,554

Trading Losses 522 -Losses on securities and derivatives related to trading transactions 522 -

Other ordinary expenses 229 19Others 229 19

General and administrative expenses 59,911 59,058Other expenses 339 209

Provision of allowance for loan losses 160 -Written-off of loans - 0Others 178 209

5,847 (1,541)37 23

Others 37 23152 501

Losses on disposal of fixed assets 152 5015,732 (2,019)

Income taxes - current 818 311Income taxes - prior year - 902Income taxes - deferred 3,118 (1,250)Total income taxes 3,936 (35)

1,796 (1,983)

Income (loss) before income taxes

Net income (loss)

Ordinary expenses

Ordinary profit (loss)Extraordinary income

Extraordinary loss

Account NameFrom April 1, 2011 to March 31, 2012

From April 1, 2012 to March 31, 2013

Ordinary income

42

<Statement of Changes in Net Assets> (Millions of Yen)



Shareholders' equityCapital stock

Balance at beginning of the period 123,100 123,100Changes in amounts during the period

Total changes in amounts during the period - -Balance at the end of the current period 123,100 123,100

Capital surplusLegal capital surplus



Retained earningsLegal retained earnings



Other retained earningsRetained earnings brought forward


Net income (loss) 1,796 (1,983)Total changes in amounts during the period 1,796 (1,983)

Balance at the end of the current period 14,440 12,457Total retained earnings



Balance at the end of the current period 16,440 14,457Total shareholders' equity



Balance at the end of the current period 260,640 258,657Valuation and translation adjustments

Valuation difference on AFS securitiesBalance at beginning of the period 3,180 4,447Changes in amounts during the period

Net changes in amounts other than shareholders' equity 1,267 (277)Total changes in amounts during the period 1,267 (277)

Balance at the end of the current period 4,447 4,170Deferred gains or losses on hedges

Balance at beginning of the period (1) (4)Changes in amounts during the period

Net changes in amounts other than shareholders' equity (2) 0Total changes in amounts during the period (2) 0

Balance at the end of the current period (4) (3)Total valuation and translation adjustments


Net changes in amounts other than shareholders' equity 1,264 (277)Total changes in amounts during the period 1,264 (277)

Balance at the end of the current period 4,443 4,166Total net assets


Net income (loss) 1,796 (1,983)Net changes in amounts other than shareholders' equity 1,264 (277)Total changes in amounts during the period 3,061 (2,260)

Balance at the end of the current period 265,083 262,823

Account Name

43

< Statement of Cash Flows > (Millions of Yen)

Cash flows from operating activit ies

Income (loss) before income taxes 5,732 (2,019)Depreciation 2,395 2,223Goodwill amortization 2,880 720Increase (decrease) in allowance for loan losses 169 (962)Increase (decrease) in provision for bonuses (159) 58Increase (decrease) in provision for retirement benefits (738) (227)Interest income (40,159) (34,647)Interest expenses 6,435 4,707Losses (gains) on sales of AFS securities (291) (900)Losses (gains) on foreign exchanges 24 (91)Losses (gains) on dispositions of fixed assets 152 501Net decrease (increase) in trading assets 30,895 93,854Net increase (decrease) in trading liabilities (4,793) 9,342Net decrease (increase) money held in trust (10) -

Net decrease (increase) in loans and bills discounted (48,968) (31,558)Net increase (decrease) in deposits 111,165 31,043Net increase (decrease) in negotiable certificates of deposit (18,000) (120,000)Net decrease (increase) in due from banks (excluding cash equivalents) 522,648 220,326Net decrease (increase) in call loan (51,150) (70,563)Net increase (decrease) in borrowed money 929 (929)Net decrease (increase) in foreign exchange assets (4,050) (19,644)Net increase (decrease) in foreign exchange liabilities 56,308 (35,407)Interest received - cash basis 42,586 38,516Interest paid - cash basis (6,912) (5,076)Net increase (decrease) in reserve for others (31) 207

Net decrease (increase) in receivables under resale agreements (604,098) (84,739)

Net decrease (increase) in receivables under securities borrowing transactions (18) 18

Net decrease (increase) in monetary claims bought (875) 259

Net decrease (increase) in other assets 42,966 (88,292)

Net increase (decrease) in other liabilities (61,153) 150,966Others, net 159 115　Sub-total (15,960) 57,802Income taxes refunded (paid) - cash basis (3,898) 334Net cash provided by (used in) operating activities (19,858) 58,137

Cash flows from investing activities Purchases of AFS securities (150,220) (408,873)

Proceeds from sales of AFS securities 79,105 56,808Proceeds from redemption of AFS securities 674 317,604Purchases of tangible fixed assets (2,371) (524)Purchases of intangible fixed assets (849) (489)Net cash provided by (used in) investing activities (73,662) (35,475)

Cash flows from financing activitiesNet cash provided by (used in) financing activities - -

Effect of foreign exchange rate changes on cash and cash equivalents (24) 91 Net increase (decrease) in cash and cash equivalents (93,545) 22,753 Cash and cash equivalents at the beginning of the fiscal year 610,635 517,089

Cash and cash equivalents at the end of the fiscal year 517,089 539,843

Account NameFrom April 1, 2012to March 31, 2013

From April 1, 2011to March 31, 2012

44

Amounts less than one million yen have been omitted.

Accounting Policies 1. Standard for valuation of trading assets and trading liabilities / booking of income and losses for trading

purposes transaction Transactions for trading purposes, such as seeking gains arising from short-term changes in interest rates, foreign

exchange rates, or securities prices and other market related indices or from variation among markets (hereinafter referred to as “Trading Purposes”), are included in “Trading assets” or “Trading liabilities” on the balance sheet on a trade date basis. Income and Expenses on trading-purpose transactions are recognized on a trading date basis, and recorded as “Trading income” and “Trading losses”.

Securities and monetary claims purchased for trading purposes are stated at the fiscal year-end market value, and financial derivatives such as swaps, futures and options are stated at amounts that would be settled if the transactions were terminated at the fiscal year-end.

“Trading income” and “Trading losses” include interest received or paid during the fiscal year. The year-on-year valuation differences of securities and money claims are also recorded in the above-mentioned accounts. As for the derivatives, assuming that the settlement will be made in cash, the year-on-year valuation differences are also recorded in the above-mentioned accounts.

2. Standard and method for valuation of AFS securities

AFS securities that have market prices are carried at their balance sheet date market prices (cost of securities sold is calculated using primarily the moving-average method). Net unrealized gains/losses on AFS securities, net of income taxes, are included in “Net assets”.

3. Standard and method for valuation of derivative transaction

Derivative transactions (excluding those for trading purposes) are carried at fair value. 4. Depreciation method for fixed assets

(1) Tangible fixed assets Tangible fixed assets are depreciated using the declining-balance method. The estimated useful lives are as follows:

Buildings: 3 to 18 years

Others: 2 to 20 years

(Changes in accounting policies that are difficult to distinguish from changes in accounting estimates)

In accordance with the revision of the Corporation Tax Act of Japan, the depreciation method for tangible fixed assets acquired on or after April 1, 2012 has been changed to the method under the revised act from the current fiscal year.

The impact on the financial statement for current fiscal year is immaterial. (2) Intangible fixed assets

Intangible fixed assets are depreciated using the straight-line method. Capitalized software for internal use is depreciated over its estimated useful life (5 years). Goodwill is equally amortized over 5 years.

5. Standard for the translation into Japanese yen

Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rate prevailing at the balance sheet date.

6. Standard for Allowance

(1) Allowance for loan losses

Allowance for loan losses is provided as detailed below in accordance with the internal standards for write-offs and provisioning.

For claims on borrowers that have entered into bankruptcy, special liquidation proceedings or similar legal proceedings (“bankrupt borrowers”) or borrowers that are not legally or formally insolvent but are regarded as substantially in the same situation (“effectively bankrupt borrowers”), an allowance is provided based on the amount of claims, after the write-off stated in the additional paragraph below, net of the expected amount of recoveries from collateral and guarantees. For claims on borrowers that are not currently bankrupt but are perceived to have a high risk of falling into bankruptcy, an allowance is provided in the amount deemed necessary based on an overall solvency assessment of the claims, net of the expected amount of recoveries from collateral and guarantees. For other claims, an allowance is provided based on the expected loan-loss ratio assigned to each risk rating.

45

Responsible divisions for Self-Assessment and Front office mutually conduct assessment of all claims in accordance with the internal rules for self-assessment of assets, and the Internal Audit Division, independently audits their assessment. The allowance is provided based on the results of these assessments.

(2) Provision for bonuses Provision for bonuses is reported in preparation for the payment of bonuses to the employees at the amount

estimated for the payment of bonuses to the employees during the fiscal year.

(3) Provision for directors’ bonuses Provision for directors’ bonuses is reported in preparation for the payment of bonuses to the directors at the

amount estimated for the payment of bonuses to the directors during the fiscal year.

(4) Provision for retirement benefits

Provision for retirement benefits is reported in preparation for the payment of employee retirement allowance in the amount deemed accrued at the fiscal year-end, based on the projected retirement benefit obligation and the fair value of plan assets at the fiscal year-end. The unrecognized prior service cost and actuarial differences are reported as expenses as follows;

Unrecognized prior service cost:

Amortized using the straight-line method for a period, primarily over 7 years, within the employees’ average remaining service period, commencing on the fiscal year in which the services are provided.

Actuarial differences: Amortized using the straight-line method, primarily over 7 to 8 years within the employees’ average remaining service period, commencing from the next fiscal year of incurrence.

(5) Provision for directors’ retirement benefits

Provision for directors’ retirement benefits is reported in preparation for the payment of director retirement allowance out of directors’ estimated allowance for the amount allocable to the period.

7. Method for hedge accounting

For the hedge accounting method applied to hedging transactions for interest rate risk arising from financial assets and liabilities, the deferred hedge accounting method is applied.

As for the portfolio hedges to net market fluctuation, effectiveness of such hedges are assessed by classifying the hedged items (such as loans) and the hedging instruments (such as interest rate swaps) by each item.

8. Accounting for consumption taxes

National and Local Consumption Taxes are excluded from transaction amounts. Accounting standards and relevant regulations that are not yet adopted

The “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012） and the “Application Guideline for Accounting Standard Related to Retirement Benefits” (ASBJ Guideline No. 25, May 17, 2012)

(1) Overview In accordance with improvement of financial reporting and the international trend, this accounting standard mainly represents (i) an enhancement of disclosure and (ii) a revision of the calculation method for Projected Benefit Obligation and service cost.

(2) Scheduled date of application CJL is scheduled to apply (i) from the end of the fiscal year starting on April 1, 2013, and (ii) from the beginning of the fiscal year starting on April 1, 2013

(3) Impact of the adoption of this accounting standard and relevant regulation The impact of the adoption of this accounting standard and relevant regulation is currently under consideration.

Change in accounting estimates

(Changes in durable years) Due to the decision made in the current fiscal year to relocate the head office, the depreciation schedule of prepaid

expense for public facility contribution assets that can no longer be used have been reviewed and accelerated to the period ending in the planned relocation month.

The impact on the financial statement for current fiscal year is immaterial.

46

(Change in discount rate for retirement benefit obligations) To calculate more precise retirement benefit obligations, the discount rate has been changed from the one used to

be applied based on the expected average remaining service years set with reference to the yields currently available on government and high quality corporate bonds in Japan to the one based on the expected average years of the future benefit payment for the plan set with reference to the yields currently available on government and high quality corporate bonds in Japan.

As a result of this change, compared to former treatment, accrued pension costs for the next fiscal year will decrease 257 million yen and ordinary profit and income before income taxes for the next fiscal year will increase 257 million yen respectively.

Changes in presentation

(Balance Sheet) As a result of adoption of the appended form of ”Ordinance for Enforcement of the Banking Act” (Finance Ministry

Ordinance No. 10, 1982) which had been revised by “Cabinet Office Ordinance Partially Revising Regulations on Ordinance for Enforcement of the Banking Act” (Cabinet Office Ordinance No. 11, March 28, 2013), “Cash collateral paid for financial instruments” which had been included in “Others “of Other assets up to the prior fiscal year and “Cash collateral received for financial instruments” which had been included in “Others” of Other liabilities up to the prior fiscal year, have been separately listed effective from the current fiscal year. Balance sheet as of March 31, 2012 shown in above includes the reclassification from this change.

As a result, 16,778 million yen of ”Others” in Other assets shown in balance sheet disclosed in prior year are reclassified to 7,823million yen of “Cash collateral paid for financial instruments” and 8,955 million yen of “Others”.

15,634 million yen of ”Others” in Other liabilities shown in balance sheet disclosed in prior year are reclassified to 11,840 million yen of “Cash collateral received for financial instruments” and 3,794 million yen of “Others”.

47

Notes to Balance Sheet 1. For securities held as collateral under “receivables under resale agreements” and “derivative transactions” which

can be sold or pledged without restrictions, 17,014 million yen were pledged and 709,190 million yen were held by CJL as of March 31, 2013.

2. Bankrupt loans were 1,185 million yen and Past due loans/non-accrual loans were 4,730 million yen.

“Bankrupt loans” are loans on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest because they are past due for a considerable period of time or for other reasons (excluding write-offs, hereinafter “non-accrual loans”), and as defined in Article 96-1-3 and 96-1-4 of the Enforcement Ordinance of the Japanese Corporate Tax Law.

“Past due loans/non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are deferred in order to support the borrowers’ recovery from financial difficulties.

3. Past due loans (3 months or more) totaled 1,893 million yen.

“Past due loans (3 months or more)” are loans on which the principal or interest is past due for three months or more, excluding “Bankrupt loans” and “Past due loans/non-accrual loans”.

4. Restructured loans totaled 15 million yen.

“Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g. reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness) in order to support the borrowers’ recovery from financial difficulties, excluding “Bankrupt loans,” “Past due loans/non-accrual loans” and “Past due loans (3 months or more)”.

5. The total amount of “Bankrupt loans”, “Past due loans/non-accrual loans”, “Past due loans (3 months or more)” and

“Restructured loans” were 7,825 million yen. Claims shown from 2 to 5 are the amounts before the appropriate allowance.

6. Bills discounted are treated as financial transactions in accordance with JICPA Industry Audit Committee Report No.24. CJL has rights to sell or pledge bank acceptance bought, commercial bills discounted, documentary bills and foreign bills bought without restrictions. The total face value was 56,427 million yen.

7. AFS securities of 786,659 million yen and Trading assets of 37,569 million yen were pledged as collateral for

settlements of FX transactions. In addition, other assets include other guarantee deposits of 5,775 million yen. 8. Overdraft facilities and commitment line contracts on loans are agreements to lend to customers up to a prescribed

amount, as long as there is no violation of any condition established in the contracts. The amount of unused commitments was 397,871 million yen and the amount of those with remaining period

within one year was 278,850 million yen. Since many of these commitments are expected to expire without being drawn upon, the total amount of unused

commitments does not necessarily represent actual future cash flow requirements. Many of these commitments include clauses under which we can reject an application from customers or reduce the contract amounts in the event that economic conditions change, we need to secure claims, or other events occur. In addition, we may request the customers to pledge collateral such as premises and securities at the time of the contracts, and take necessary measures such as monitoring customers’ financial positions, revising contracts when need arises and securing claims after contracts are made on a periodic basis.

9. Accumulated depreciation on tangible fixed assets: 6,903 million yen. 10. Non-cancellable operating lease is as follows;

Future minimum rental payments; Within one year 793 million yen Over one year 1,710 million yen

11. Monetary assets to affiliates amounted to 1,236,675 million yen. 12. Monetary liabilities to affiliates amounted to 536,610 million yen.

48

13. Dividend is subject to the limitation of article 18 of the Banking law. Under the Banking law of Japan, 20% of the retained earnings decreased by dividends shall be appropriated as a Legal retained earnings until the aggregate amount of Legal capital surplus and Legal retained earnings equals the amount of Capital stock.

49

Notes to Statement of Income 1. Income from transactions with affiliates

Total income of funding transaction 23,017 million yen Total income of fees and commissions 1,860 million yen

Expenses from transactions with affiliates Total expenses of funding transaction 941 million yen Total expenses of fees and commissions 216 million yen Total expenses of other ordinary transactions 22,076 million yen Total expenses of other transactions 5,335 million yen

2. Information with respect to related party transaction is as follows.

Guarantees&

fee

―

8

Customers’liabilities foracceptances

and guarantees

Unearnedrevenue

4,184

0

Consumercredit

― ―Funding /Lending

Subsidiaryof

parentCFJ G.K.

Chuo-ku,Tokyo

100Million Yen

Settlement offoreign

exchange&

interest

51,574 (*2)

181

Due fromforeign banks(our accounts)

Accruedincome

14,569

6

Relation Name Address Capital BusinessPercentage ofstocks owned

Content of relations Description oftransaction

Amount(million yen)

Name ofaccount

Balance atYear end

(million yen)Directors Business

ParentCitibank,

N.A.

SouthDakota,United

States ofAmerica

USD 751Million

Banking100%

(indirect)―

Funding /Lending

Businesstransaction

&interest

1,187,816 (*2)

22,729

Due from banks

Accruedincome

1,098,329

961

Businesstransaction

&interest

404,597 (*2)

922

Deposit

Accruedexpenses

374,488

131

Fx&

Derivative

88,612 (*3)

Otherliabilities

88,612

Businesstransaction

&interest

65,953 (*2)

39

Negotiablecertificatesof deposit

―

Settlement offoreign

exchange

60,993 (*2)

Due toforeign banks

(their accounts)59,618

*1 Condition of transactions and its policy are decided as same as third party transactions. *2 Average balance for amount of transaction *3 Valuation difference based on year end market rate.

50

Notes to Statement of Changes in Net Assets

The types and number of our shares outstanding are as follows: (Thousands of Shares)

Number of shares

at beginning of the

period

Number of shares

increased during

the period

Number of shares

decreased during

the period

Number of shares

at end of the

period

Memo

Common stock 244,200,000 －－ 244,200,000

Total 244,200,000 －－ 244,200,000

Notes to Statement of Cash flow

Cash and Cash Equivalents consist of cash and due from Bank of Japan included in Cash and Due from Banks on the balance sheet.

As of March 31, 2013 (Millions of Yen)

Cash and Due from Banks 1,729,253Due from Banks excluding Bank of Japan (1,189,410)Cash and Cash Equivalents 539,843

51

Notes related to Financial Instruments

1．Disclosure on Financial Instruments

(1) Policy on Financial Instruments

CJL is engaged in banking operations such as deposit taking business, credit extension business including loans, fund transfer and clearing business both in Yen and foreign currencies and investment business including marketable securities. The ALM, Asset and Liability Management, in CJL has related across these listed businesses. CJL has conducted integrated management of the Banking Portfolio, as ALM, for the purpose of managing interest rate and fx risk associated with market movement and liquidity risk from mismatch of future cash flows. Also it aims to minimize funding cost and maximize investment returns. As part of this effort, we enter into certain derivative transactions. As the banking portfolio in CJL, liabilities are sourced mainly from customer deposit both retail and corporate customers. And in asset side, it has invested into securities, mainly in JGB, loans to customers and deposits to other Citibank N.A. entities.

(2) Types of and Risks associated with Financial Instruments

A majority of financial assets that CJL holds are Securities and placements to the banks in our group companies. Out of the customer related assets, loans to corporate customers in Japan and overseas, for which CJL is exposed to credit risks potentially arising from the obligors' default and also there are risks on material adverse changes in Economic, Politics, and social environments. Securities are mainly low credit risk Japanese government bonds, etc. held for pure investment or trading purposes. These are exposed to interest rate risk and market price risks.

Deposits are mainly from retail and corporate customers, and group companies. They are exposed to liquidity risk where we may not be able to be repaid timely on maturities. Interest rate exposure is managed by establishing risk limits, etc.

Derivative contracts include interest rate swaps, currency swaps, and FX forward for ALM purpose. In addition, we have trading bonds as well as trading positions that include interest rate related derivatives and currency related derivatives. These financial products are exposed to interest rate risk, foreign exchange rate risk, price risk and credit risk, etc.

(3) Risk Management System relating to Financial Instruments

(A) Credit Risk Management

CJL establishes consistent risk management framework and controls credit risks related to loans etc. by credit analysis conducted on transaction basis, controlling credit line, credit information, internal obligor risk rating, pledge of guarantee and collateral and managing classified or delinquent accounts, in accordance with Credit Risk Management Policy and related rules and procedures.

Credit risk control aforementioned is conducted by Risk Management Division and will be reported to Credit Risk Management Committee (“CRMC”) and Board of Directors’ meeting (“BOD”), which is taken place regularly. Moreover, the process of credit risk control is assessed by internal auditor periodically.

Credit risk of issuers and counterparty risk of derivatives are controlled and monitored by Credit Risk Management Services Unit and Portfolio Management Unit in Risk Management Division by obtaining credit information and marked-to market periodically.

(B) Market Risk Management

① Risk Management of Banking Accounts

CJL manages interest-rate risks on banking book through ALM. The risk management methods and procedures are clearly described in the "Market Risk Management for Accrual Portfolios Policy and Standards". CJL monitors and reviews its activity implementation status, also discusses action plans in the monthly Asset Liability Committee (“ALCO”) meeting as per the ALCO Regulation which has been constituted by the Management Committee.

On a day to day basis, Market Risk Management Unit captures consolidated profiles of interest rates and durations of the financial assets and liabilities, performs risk monitoring process using the gap analysis and interest rate factor sensitivity analysis, and reports the results to the ALCO meeting on a monthly basis. For the purpose of hedging interest-rate risks, CJL transacts some derivative trades such as interest rate swaps.

52

② Risk Management of Trading Accounts

CJL mainly manages interest-rate risks and foreign exchange price risks on trading book following the Market Risk Management Policy and ALCO Regulation determined by Management Committee. CJL's market risk amount is measured by Value-at-Risk (“VaR”) method and its regulated compliance status is monitored and reported to ALCO meeting on a monthly basis.

③ Quantitative information on Market Risks

a) Trading purpose financial instruments

CJL adopted the Monte Carlo Method that simulates variance and covariance estimated from the historical times series data for VaR calculation (holding period of one day, with the confidence level of 99%) for trading purpose securities and trading purpose derivative products.

CJL market risk amount for trading activities (probable loss amount) as of March 31, 2013 was 161 million yen.

CJL also conducts VaR back testing which is a comparative analysis of the VaR result calculated by the validated model against the actual profit and loss (P&L). As per the VaR back testing result for the period of April 2012 through March 2013, no exceptions were observed. However, VaR still may not pick up all probability of event under unpredictable market conditions so long as it is based on the certain probability calculated by statistical method using historical market movement.

b) Non-trading purpose financial instruments

In CJL, the main financial instruments which to be influenced by interest rates as one of the key risk variables are, “Placements”, "Loans and bills discounted", "AFS securities", "Deposits", “Negotiable certificate of deposits”, "Borrowings" and "Hedge Swaps". On the financial Assets and Liabilities, CJL calculates the effect amounts on profits and losses in the next one year when simulating reasonably expected moving range in the quantitative analysis for the purpose of managing interest rate risks. With respect to the revenue effect amount calculation, CJL splits respective financial asset and liability balances into groups of fixed or floating rate groups by tenor buckets responding to holding maturities and applies the interest rate moves by tenors. CJL has exercised results that the net income before taxes would increase by 2,083 million yen on the scenario that benchmark JPY interest rate to increase by 100 basis points (1%) as of March 31, 2013. On the same basis, CJL's net income before taxes would increase by 219 million yen on the scenario that benchmark USD interest rate to increase by 100 basis points (1%). These results are based on the stable risk variables excluding interest rates, and no correlation between interest rates and other risk variables are considered in the calculation. In case of any unexpected moves over the 100 basis points (1%) moving range, there can be larger effect than the reported effect amounts on P&L.

(C) Management of Liquidity Risk associated with Funding Activities

Liquidity risk management has been regulated by related policies and procedures. ALCO, which is subject to supervision of the Management Committee, has been constituted to ensure that CJL maintains adequate liquidity, has sufficient capital to meet regulatory and business needs, has appropriate funding for business growth. ALCO's monitoring and reviewing of capital, liquidity, balance sheet and the banking account management is an integral part of the overall risk management framework of CJL.

(4) Supplement Explanation for Fair Value of Financial Instruments

Fair value of financial instruments includes market prices as well as reasonably calculated prices in cases where there are no market prices available. Since the calculations of such prices are implemented under certain conditions and assumptions, the result of calculations may vary if different assumptions are used.

53

2．Fair Value of Financial Instruments Fair value and balance sheet amount of financial instruments as of March 31, 2013 are shown below.

(Millions of Yen)

Balance sheetamount

Fair value Difference

(1) Cash and due from banks 1,729,253 1,733,795 4,541

(2) Call loans 172,037 172,037 -

(3) Receivables under resale agreements 688,838 688,850 11

（4） Monetary claims bought　(*1) 3,372 3,372 -

（5） Trading assets

Trading securities 97,008 97,008 -

（6） Securities　(*1)

Other securities 858,728 858,728 -

（7） Loans and bills discounted 330,614

　　Allowance for loan losses　(*1) (3,016)

327,598 332,619 5,021

（8） Foreign exchange　(*1) 117,929 117,929 -

Total Assets 3,994,767 4,004,342 9,574

(1) Deposits 3,541,504 3,541,180 (324)

(2) Negotiable certificates of deposits 35,000 35,000 -

(3) Foreign exchange 106,140 106,140 -

Total Liabilities 3,682,645 3,682,323 (324)

Derivative transactions　(*2)

Trading (16,992) (16,992) -

Hedge accounting applied (6) (6) -

Total derivative transactions (16,998) (16,998) -

Others Contract amount Fair value

Overdraft facilities and commitment line (*3) 397,871 (45)

(*1) General allowance for loan losses and specific allowance for loan losses provided to “Loans and bills discounted” are separately shown in the above table. Allowance for loan losses provided to “Monetary claims bought”, “Securities” and “Foreign exchange” are directly deducted from the book value due to immateriality.

(*2) Derivatives included in “Trading assets”, “Trading liabilities”, “Other assets” and “Other liabilities” are shown together. Negative amount indicates in case of liabilities exceeding the assets.

(*3) Contract amount of Overdraft facilities and commitment line are unused amount.

(Notes) Valuation method of financial instruments

(Assets)

(1) Cash and due from banks For due from banks without maturity, the carrying amount is presented as the fair value, as the fair value

approximates such carrying amount. For due from banks with maturity, fair value is determined as present value of total future cash flows, discounted by interest rate that would be applied to new acceptances. Total future cash flows are contractual payment of principal and interest. For due from banks with short remaining period (within 1 year), the carrying amount is presented as the fair value, as the fair value approximates such carrying amount.

(2) Call loans

For Call loans, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because they have short remaining period (within 1 year).

54

(3) Receivables under resale agreements

For Receivables under resale agreements with remaining period exceeding 1 year, fair value is determined as present future cash flows, discounted by interest rate that would be applied to new acceptance. Total future cash flows are contractual payment of principal and interest.

For Receivables under resale agreements with short remaining period (within 1 year), the carrying amount is presented as the fair value, as the fair value approximates such carrying amount.

(4) Monetary claims bought

For monetary claims bought, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because they have short remaining period (within 1 year).

(5) Trading assets For securities such as bonds that are held for trading, the fair value is calculated based on their market prices.

(6) Securities For securities such as bonds that are available for sale, the fair value is calculated based on their market prices.

(7) Loans and bills discounted

For loans without maturity, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because of their estimated maturity length and the interest rate conditions. For loans with short remaining period (within 1 year), the carrying amount is presented as the fair value, as the fair value approximates such carrying amount.

For loan with remaining period exceeding 1 year, fair value is determined as present value of total future cash flows, discounted by interest rate that would be applied to newly accepted loans. Total future cash flows are contractual payment of principal and interest.

As for the loans to bankrupt, de facto bankrupt, and potentially bankrupt borrowers, credit loss is estimated based on factors such as the present value of expected future cash flow or the expected amount to be collected from collaterals and guarantees. Since the fair value of these items approximates the carrying amount net of the currently expected credit loss amount, such carrying amount is presented as the fair value.

(8) Foreign exchange

Foreign exchanges consist of foreign currency deposits with other banks (due from other foreign banks), short-term loans involving foreign currencies (due from other foreign banks), export bills etc. (purchased foreign bills), and loans on notes using import bills (foreign bills receivables). For these items, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because most of these items are deposits without maturity or have short contract term (within 1 year).

(Liabilities)

(1) Deposits (2) Negotiable certificate of deposits

For demand deposits, the amount payable on demand as of balance sheet date is considered to be the fair value. Time deposits are grouped by certain maturity lengths. The fair value of such deposits is the present value discounted by expected future cash flow. The discount rate is the risk free rates adjusted with funding spread of CJL as of balance sheet date. For deposits with short remaining period (within 6 months), the carrying amount is presented as the fair value as the fair value approximates such carrying amount.

(3) Foreign exchange

Among foreign exchange contracts, foreign currency deposits accepted from other banks and non-resident yen deposits are deposits without maturity. Furthermore, foreign currency short-term borrowing have no maturity. Thus, for the foreign exchanges, the carrying amount is presented as the fair value as the fair value approximates such carrying amount.

55

(Derivative transactions)

Derivatives include interest rate related instruments (interest rate futures, interest rate options, interest rate swaps, etc.), currency related instruments (forward foreign exchange, currency options, currency swaps, etc.) and bond related instruments (bond futures, bonds future options, etc.). Fair value of these derivatives are based on market prices at exchanges, discounted present values, or amount calculated under the option pricing model.

(Others)

For overdraft facilities and commitment line, fair value is the present value discounted by the difference between the expected future cash flow calculated by contractual rate and fee rate that would be applied to newly acceptance at the balance sheet date for the contract with remaining period exceeding 1 year.

56

Notes related to Deferred tax accounting 1．The main causes for the deferred tax assets and deferred tax liabilities are as follows:

Deferred tax assets (Millions of Yen)

Allowance for loan losses 1,221

Accrued expense 751

Fixed Assets 685

Provision for retirement benefits 393

Provision for bonuses 205

Asset Retirement Obligations 195

Other 1,035

Deferred tax assets total 4,488

Deferred tax liabilities

Valuation difference on AFS securities 2,361

Prepaid pension cost 1,004

Other 221

Deferred tax liabilities total 3,588

Net deferred tax assets 900

2．A reconciliation of the actual ratio of income taxes reflected in income statement to the effective statutory tax rate

Omitted as loss before income taxes was recorded. Indicators by Share

1. Net assets per share: 1.07 yen 2. Net loss per share: 0.00 yen

57

3. Market Value Information <Securities>

Matters concerning securities market value, valuation difference, etc. are as follows. As well as “Japanese government bonds”, “Corporate bonds”, “Other securities“ and “Securities related to trading transactions” are included in securities.

(1) Securities classified as trading purpose

(Millions of Yen)

Balance sheetamounts

Valuations gains (losses)included in P/L during the

Previous Period



Current Period

Securities classified astrading purposes

180,100 26 97,008 174

As of Mar. 31, 2012 As of Mar. 31, 2013

(2) Other securities (Millions of Yen)

TypeBalance sheet

amountsAcquisition

costValuations

gains/(losses)Balance sheet

amountsAcquisition

costValuations

gains/(losses)

Bonds 766,156 759,543 6,612 787,801 781,695 6,106

Japanese Government Bonds

749,511 743,517 5,994 771,680 766,573 5,106

Corporate Bonds 16,644 16,025 618 16,121 15,121 999

Others 5,960 5,500 460 5,913 5,500 413

Sub total 772,116 765,043 7,073 793,715 787,195 6,520

Bonds 54,659 54,704 (44) 65,013 65,025 (11)

Japanese Government Bonds

39,960 40,004 (43) 65,013 65,025 (11)

Corporate Bonds 14,698 14,699 0 - - -

Sub total 54,659 54,704 (44) 65,013 65,025 (11)

826,775 819,747 7,028 858,729 852,220 6,508

As of Mar. 31, 2013

Total

As of Mar. 31, 2012


exceedingacquisition cost

Balance sheetamountsequal orless than

acquisition cost

(Notes) The figures are based on market value. (3) Other securities sold during the fiscal year

(Millions of Yen)

Sold amount Gains on sales Losses on sales Sold amount Gains on sales Losses on sales

Bonds 79,105 291 - 56,808 900 -

　　Japanese　　Government Bonds

79,105 291 - 56,808 900 -

Total 79,105 291 - 56,808 900 -



58

<Money Held in Trust> Money Held in Trust for Investment

(Millions of Yen)

Balance sheet amountsValuations gains (losses)included in P/L during the

Previous PeriodBalance sheet amounts


Current Period

Money Held in trust forInvestment

10 - 10 -

As of Mar. 31, 2012 As of Mar. 31, 2013

59

<Derivatives Market Value Information> (1) Interest rate-related transactions

(Millions of Yen)

Category TypeContractamount

Over 1 yearin contract

amount

Marketvalue

Revaluationgains/losses

Contractamount


amount

Marketvalue


Exchange-traded

Futures - - - - 9,803 - 1 1

　Sell - - - - - - - -

　Buy - - - - 9,803 - 1 1

Future Options - - - - - - - -

　Sell - - - - - - - -

　Buy - - - - - - - -

Over-the -counter

Forward rate agreements - - - - - - - -

　Sell - - - - - - - -

　Buy - - - - - - - -

Interest rate swaps 1,049,276 885,091 (424) (424) 570,657 570,657 (586) (586)

　Receive fixed/ pay floating swaps

480,255 480,255 13,392 13,392 253,029 253,029 12,728 12,728

　Receive floating/ pay fixed swaps

568,643 404,457 (13,817) (13,817) 317,195 317,195 (13,314) (13,314)

　Receive floating/ pay floating swaps

377 377 - - 432 432 - -

　Receive fixed/pay fixed swaps

- - - - - - - -

Interest rate options - - - - - - - -

　Sell - - - - - - - -

　Buy - - - - - - - -

Total - - (424) (424) - - (584) (584)

As of Mar. 31, 2012 As of Mar. 31, 2013

(Notes) 1. These transactions were marked to market, and revaluation gains and losses are reported on the statement of income. In

accordance with “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24), derivatives transactions to which the hedge accounting method is applied are excluded.

2. Calculation of market value Market value is calculated based on closing/final price of the Tokyo International Financial Futures Exchange (TIFFE) etc. for exchange-traded transactions, and on discounted cash flow method or option price calculation models for over-the-counter (OTC) transactions.

60

(2) Currency-related transactions (Millions of Yen)

CategoryContractamount


amount

Marketvalue


Contractamount


amount

Marketvalue


Futures - - - - - - - -

　 Sell - - - - - - - -

　 Buy - - - - - - - -

Currency Swaps 703,805 533,214 7,714 7,714 697,694 667,253 (12,278) (12,278)

Forward contracts 11,978,813 866,083 11,447 11,447 15,660,528 505,387 (4,212) (4,212)

　 Sell 7,882,027 578,121 (54,062) (54,062) 9,596,293 359,185 (67,931) (67,931)

　 Buy 4,096,786 287,961 65,509 65,509 6,064,235 146,201 63,718 63,718

Currency options 534,417 229,536 0 58 480,184 189,060 0 34

　 Sell 267,208 114,768 (5,259) 1,967 240,092 94,530 (6,151) (97)

　 Buy 267,208 114,768 5,259 (1,909) 240,092 94,530 6,151 131

Total - - 19,162 19,220 - - (16,491) (16,457)

Over-the -counter

As of Mar. 31, 2012 As of Mar. 31, 2013

Type

Exchange-traded

(Notes) 1. These transactions were marked to market, and revaluation gains and losses are reported on the statement of income. In

accordance with “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24), derivatives transactions to which the hedge accounting method is applied are excluded.

2. Calculation of market value Market value is calculated based on discounted cash flow method or option price calculation models for over-the-counter (OTC) transactions.

(3) Stock-related transactions

Not applicable.

61

(4) Bond-related transactions

(Millions of Yen)`

CategoryContractamount

Over 1year

in contractamount

Marketvalue


Contractamount

Over 1year

in contractamount

Marketvalue


Exchange-traded

Bond futures 18,645 - (12) (12) 26,604 - 36 36

　Sell 13,375 - (12) (12) 26,242 - 37 37

　Buy 5,270 - 0 0 361 - (1) (1)

Bond future options 8,000 - 0 9 20,000 - 0 (5)

　Sell 4,000 - 0 8 10,000 - 0 0

　Buy 4,000 - 0 0 10,000 - 1 (5)

Over-the -counter

Bond OTC options - - - - - - - -

　Sell - - - - - - - -

　Buy - - - - - - - -

Total - - (12) (3) - - 36 30

As of Mar. 31, 2012 As of Mar. 31, 2013

Type

(Notes)

1. These transactions were marked to market, and revaluation gains and losses are reported on the statement of income. In accordance with “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24), derivatives transactions to which the hedge accounting method is applied are excluded.

2. Calculation of market value Market value is calculated based on closing/final price of the Tokyo Stock Exchange (TSE) etc. for exchange-traded transactions.

(5) Commodity-related transactions Not applicable.

(6) Credit derivatives transactions

Not applicable.

62

4. Major Shareholders <Major Shareholders>

(As of March 31, 2013)

Name of shareholder Numbers of shares Shareholding ratio

Citibank Overseas Investment Corporation 244,200,000 thousand shares 100%

Total 244,200,000 thousand shares 100%

63

5. Disclosure Items Based on Pillar III of Basel II

This section describes the information consistent with FSA Notification Number 15 based on Article 19.2.1.5d of the Bank Law Enforcement Rule (Refer to Ministry of Finance Ordinance Number 10). With regard to the internal controls structures governing calculation of the capital adequacy ratio, KPMG AZSA LLC conducted certain procedures as an independent audit firm. The certain procedures performed on our internal control framework for calculating the capital ratio are based on procedures agreed upon by CJL and the external auditor and are not a validation of appropriateness of the capital ratio itself or opinion on the internal controls related to the capital ratio calculation.

QUALITATIVE DISCLOSURE (1) Types of Capital Instruments CJL’s capital is solely funded through issuance of common stocks. (2) Capital Adequacy Assessment Process Regulatory capital and risk assets are reported to Management on a monthly basis for verification of the appropriateness of CJL’s capital adequacy. We believe the current level of CJL’s capital adequacy to be sufficiently high. We aim to maintain our regulatory capital ratio above 10.5%, in accordance with the capital plan approved by the Board of Directors (“BOD”). (3) Credit Risk Management Policies and Procedures 1. Overview of risk management policies and procedure

CJL manages its credit risk in accordance with the established “Credit Risk Management Policies.” We manage credit risk based on credit risk analysis of each customer and also manage credit risk on a portfolio basis, monitoring concentration of credit to certain industries, ratings, clients or industrial groups and delinquency trend of a portfolio. Such a portfolio view of our credit exposures is reviewed and discussed at the Credit Risk Management Committee (“CRMC”) on a monthly basis, and reported to the MC and BOD. CJL may sell loans (risk participation) when there is a client’s needs in excess of the “Limit of Granting of Credit, etc to One Person” provided in the Article 13 of the Banking Act take, sell loans once CJL provided as is the case with loan syndication, or sell loans or obtain bank guarantee in order to reduce the amount of risk capital, however, CJL is not involved in any of measures such as exchange of portfolio or securitization of its own assets at present. For details, please refer to Quantitative Disclosure (2) for Capital Adequacy and (3) for Credit Risk Exposure as of the fiscal year-end.

CJL applies the Standardized Approach for the Basel II calculation of credit risk assets. (Corporate Banking Division) On all the customers to whom credit is extended, CJL assigns Obligor Risk Ratings (“ORR”). On all the credit facilities established, a Facility Risk Rating (“FRR”) is assigned based on the types or nature of a transaction. An FRR can differ from the ORR of the customer only if there is a credit enhancement on that credit facility. The assignment of ORR and establishment of credit facilities are done at the time of initiating a credit relationship. After the credit relationship is initiated, ORR and credit facilities are reviewed at least once a year. For approval of credit facilities (“Credit Approval”), the Credit Policy requires sign off by at least two Credit Officers (“CO”s) or Senior Credit Officers (“SCO”s). COs and SCOs are Bank officers who are given the authority to approve credit. SCOs are appointed by the CRMC and COs are appointed by a SCO. The appointment to CO/SCO is based on Risk Management Department’s assessment on working experience in credit-related job functions, experience in credit risk training, credit judgment skills, knowledge, and aptitude. The amount of credit a SCO can approve depends on the authorized “Approval Level. CRMC determines the Approval Level based on each officer’s experience and past record. The Level required for Credit Approval is determined by the matrix of the ORR assigned to the customer and the amount of credit facilities proposed. The lower (worse) the ORR and the larger the proposed credit facilities amount, the higher the required Approval Level.

64

Of the minimum two credit officers required for Credit Approval, at least one must be a Business Sponsoring Officer of the client, who is the account officer for the customer, and the other must be a Risk Management CO/SCO who is independent from business divisions. This requirement is aimed to establish and maintain check and balance mechanism within CJL. (Retail Banking Division) In the Retail Banking Division, the credit approval authority is determined on a product-by-product basis. Credit extension must be approved by COs/SCOs. At least one of the credit officers approving the credit must hold the Approval Level for the amount of the proposed credit. Credit approval authority is not granted to officers belonging to Sales, Marketing, Management Control or bank branches. COs and SCOs are Bank officers who are given the authority to approve credit. COs and SCOs are appointed by the Retail Banking Credit Risk Management. The appointment to CO/SCO is based on the Retail Banking Credit Risk Management’s assessment on working experience in credit-related job functions, experience in credit risk training, credit judgment skills, knowledge, and aptitude. The Approval Level that is required for Credit Approval is determined by the loan amount and the deviation of a transaction from the prescript credit criteria. The higher the loan amount and the larger the deviation, the higher the required Approval Level. As a part of portfolio level risk management, risk profile of applications and loan disbursements, credit performance are being monitored.

Standard for Allowance for loan losses is described in Accounting Policies.

2. The following items on portfolios are subject to the standardized approach

A. Name of the eligible credit rating agency, etc. used to calculate the risk weights

Standard & Poor’s Ratings Services (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”) and Organization for Economic Co-operation and Development (“OECD”)

B. Relationship between the type of exposure and eligible credit rating agency, etc., used by type of exposure.

The eligible External Credit Assessment Institutions (“ECAI”) etc., we use by the type of credit exposure are as shown below. i. OECD - Country Risk Score - Exposures to the central government and central bank - Exposures to the Government of Japan and the Bank of Japan - Exposures to financial institution and regulatory security firm that apply to the standards of capital ratio

provided by Basel Committee on Banking Supervision or similar standards to this.

ii. External Rating of S&P and Moody’s - Exposures to corporates - Exposures to financial institutions and regulatory security firm that don't apply to the standards of capital ratio provided by Basel Committee on Banking Supervision or similar standards to this.

(4) Credit Risk Mitigation Policies and Procedures 1. Overall Credit Risk Mitigation

CJL applies a comprehensive Credit Risk Mitigation approach based on the Standardized Approach for the Basel II calculation of credit risk assets. Its credit risk assets and regulatory capital ratio are calculated based on the risk weights and the net exposures, reflected the revaluation of exposures and the devaluation of collaterals. These evaluations are utilized by the haircut value reflecting its volatility risks.

2. Overall Credit Risk Mitigation Control Process

CJL reviews credit facilities at least once a year, and collaterals and ability to perform guarantees are also evaluated periodically for securing its portfolio. Types of collaterals and guarantees are shown in 3. Risk Mitigation Techniques below. At present, CJL does not use credit derivatives in its calculation of its risk assets and regulatory capital ratio. CJL takes into account bilateral netting agreements as risk mitigation measures for derivatives and repo transactions, if they are effective in light of regulation, etc. of the transaction country.

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3. Risk Mitigation Techniques

A. Eligible financial assets as collaterals

The following assets that satisfy all the conditions stipulated by the FSA Notice No.19 of 2006 Article 89 and 90 are used as eligible collateral to reduce risk assets. Cash, deposits with CJL, gold, debt securities and equity securities.

B. Guarantees

The guarantee provided by the government, the central bank, government agencies which meet to all the conditions stipulated by the FSA Notice No.19 of 2006 Article 118, 119, and 122 must be met.

C. On-balance netting

Exposures that are used to calculate capital ratio shall be netted with deposits if whose exposures meet all the conditions stipulated by the FSA Notice No.19 of 2006 Article 117.

(5) Policies and Procedures for Counterparties of Derivative Products and Transactions with a

Long-Horizon Settlement Period 1. Credit risks of counterparties

Credit risk of a counterparty of derivative transactions, etc. is defined as the sum of current replacement costs based on mark-to-market and a simulated amount of potential increase due to the future fluctuation of market value until settlement date.

2. Management of credit facilities

Counterparty credit facilities for derivative transactions, etc. are managed as part of total credit facilities, together with all credit facilities on-balance sheet transactions.

3. Protection by collateral and policy for loss reserve

CJL has ISDA Credit Support Annex (“CSA”) concluded with a number of financial institutions. CJL carries Derivative Transactions at fair value, for which CJL does not establish loss reserve. CJL does not have Transactions with a Long-Horizon Settlement Period.

(6) Securitization Exposure Risk Management Policies and Procedures

1. CJL’s engagement for securitization transactions

CJL’s engagement in securitization transactions can be described as follows:

A. Originator

CJL is not engaged in any securitization transaction of loan receivables for its own funding purposes or balance sheet management.

B. Investor

CJL holds securitization exposure through arranging and providing funds to various securitization transactions (ABL, Asset Backed Commercial Paper (“ABCP”), etc.) that its clients undertake for funding purpose.

C. Swap provider

CJL may provide foreign exchange forwards or interest rate swaps to mitigate the issuer’s foreign exchange or interest rate in the securitization transactions arranged by CJL.

D. Others

CJL provides certain types of commitment lines related to liquidity facilities covering securitization transactions arranged by CJL, in connection with the ABCP business, etc.

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2. Overview of risk management policies, risk characteristics, and monitoring system (including its operational status)

With regard to holding securitization exposure, CJL applies internal ratings and makes evaluations by assessing each such transactions and carefully managing the exposure together with other direct loan assets, in addition to capturing accurate understanding of the actual risk profile through due diligence from the viewpoint of investors. CJL will analyze and periodically monitor the credit risk amount of securitization transaction in the same manner as with other standard credit exposures. Also, CJL recognizes that credit risks related to CJL’s securitization transactions include those associated with committed facilities, where CJL commits to supply funds when funding through the ABCP market becomes unavailable for certain reasons. In the case of such committed facilities provided to securitization transactions, the primary source of repayment is cash to be collected from the securitized assets. Therefore, the credit risk of committed facilities provided to securitization transactions is defined as the risk of being unable to recover the amount of credit extended from the securitized assets in the full amount. CJL manages credit risk in committed facilities provided to securitization transactions through: (1) setting the ratio of the future cash flows from the securitized assets to the securitization exposure amount sufficiently high to cover expected credit loss (over-collateralization); (2) ensuring any other necessary credit enhancement; and (3) monitoring appropriately after the execution. Such risk management procedures are the same for the loans extended to securitization transactions arranged by CJL CJL mainly uses special purpose companies (SPC) or Japanese Trusts as the securitization conduit when undertaking securitization transactions associated with third party assets. As to credit risk management of foreign exchange forwards or interest rate swaps associated with securitization transactions, the policies and procedures are the same as for those transactions not associated with securitization transactions

3. Name of the approach used by CJL to calculate the amount of credit risk assets in securitization

exposures The Standardized Approach

4. Accounting policies for securitization transactions

CJL complies with Accounting Standard Board of Japan Statement No. 10, Accounting Standard for Financial Instruments (Business Accounting Council, January 22, 1999) in recognizing, evaluating, and booking the occurrence or extinguishment of financial assets or liabilities related to securitization transactions.

5. Names of the eligible credit rating agency used in the assessment of risk weight in securitization exposures (the reason if there has been a change in the eligible credit rating agency used) and the relationship between the type of securitization exposure and the eligible credit rating agency used

As for the eligible external credit agencies, CJL refer to S&P and Moody’s in determining securitization exposure risk weight.

(7) Market Risk Management Policies and Procedures

1. Overview of risk management policies and procedures

The Market Risk Management Unit (“MRM”), is independent from the business divisions and is given control authority by the Board to identify interest rate, foreign exchange rate or other types of risk factors which impact assets and liabilities (including off-balance sheet assets and liabilities) in the banking and trading books; establish evaluation methods (factor sensitivity or VaR etc.); and monitor risk exposures (including stress tests and market risk limit utilization) based on the defined CJL “Market Risk Management Policy”. MRM also coordinates management reporting to Asset-Liability Committee (“ALCO"), in addition to providing recommendations in risk analysis on a regular and timely basis.

2. Name of the approach used to calculate the market-risk-equivalent amount. Range of portfolios

using each model where the standardized approach or internal model approach is used. Standardized method

3. Methodology on Mark-to-Market calculation for Trading products based on its nature considering

expected holding period and the possibility of exceeding expected holding period.

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CJL limits trading products to highly liquid securities, foreign exchange or derivative transactions, and performs mark-to-market evaluation by applying theoretical prices based on market prices and other market data for the trading book. Target transactions and the method of the mark-to-market evaluation are defined by internal procedures.

4. Assumptions and valuation method for internal evaluation of capital adequacy on market risk

Risk Capital is calculated based on VaR and Stress test, and Capital Adequacy is measured together with Operational Risk and Credit Risk.

(8) Operational Risk Management Policies and Procedure 1. General Description of Operational Risk Management Policy and Procedures

Operational risk refers to the risk of loss resulting from inadequate or failed internal processes, systems, human factors or from external events. As with other risk types, operational risk is managed through an overall framework with checks and balances that includes: • Recognized ownership of the risk by the business divisions; • Oversight by Control Functions; and • Independent review by the Internal Audit Division. CJL’s approach to operational risk is defined in the CJL “Operational Risk Management Policy”. Specific operational risks - IT Risk, Jimu Risk, and Continuity of Business Risk - are subject to additional specialized policies and regulations. The objective of the Policy is to establish a consistent, value-added framework for assessing and communicating operational risk and the overall effectiveness of the internal control environment. CJL adopts Manager’s Control Assessment (“MCA”) as a comprehensive tool to identify, evaluate qualitatively and monitor operational risk. MCA was established as the process whereby ‘significant’ risks inherent in business activities are identified by senior business and functional managers and the effectiveness of the key controls over those risks are evaluated and monitored. In MCA processes, Annual Risk Assessment is conducted to identify significant processes; define significant risks and controls; identify optimum monitoring methods and assessment activities to assess the extent to which processes and control continue to operate effectively. These significant processes are reviewed periodically in consideration of changes to the operational processes and regulatory environment, and latest information shall be reflected in to MCA. On a quarterly basis, the results of assessment of overall effectiveness of internal controls are reviewed and approved at Business Risk, Compliance & Control (“BRCC”) Committee, and including in periodic management reporting. Since operational risk is inherent throughout the activities of CJL, all activities are subject to the Operational Risk process. Operational risk issues and trends are reported at the CJL Risk Oversight Committees responsible for operational risk management – BRCC and System and Operations Committee (“SOC”).

2. Methodology to Calculate Operational Risk

Basic Indicator Approach

(9) Equity Exposure Risk Management Policies and Procedures There is no Equity Exposure.

(10) Banking Book Interest Rate Risk Management

1. Overview of risk management policies and procedures

The Market Risk Management Unit (“MRM”), is independent from the business divisions and is given control authority by the Board to manage interest rate risk in the banking; and based on the defined CJL “Market Risk Management Policy”. MRM also coordinates management reporting to Asset-Liability Committee (“ALCO"), in addition to providing recommendations in risk analysis on a regular and timely basis.

2. Banking book interest rate risk calculation method for internal management purpose CJL measures interest rate risks in the banking book on a daily basis by applying the re-pricing ladder method, and considers changes of economic value per 1% interest rate increase for each currency as an index for internal

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control. CJL’s holding assets and liabilities are constructed into ladders sorted by the remaining durations for fixed rate items and by the durations till next re-pricing period for variable rate items, respectively. Liquid deposits, which do not have a clearly defined re-pricing period, or prepayment of housing loans require practical assumptions on runoff tenors and balances, and the independent market risk manager approves their relevancy. The monitored amount of interest rate risks for internal control purpose is not necessarily identical with the total amount of interest rate risks calculated in a form of the outlier ratio as per the Standardized Approach.

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QUANTITATIVE DISCLOSURE (1) Outline of means of Raising Equity Capital

Tier 1

Capital 123,100 123,100

Surplus capital 121,100 121,100

Retained earnings 16,440 14,457

(Estimated distributed income) - -

(Valuation loss of other securities) 0 0

New share reservation rights - -

(Trade rights equivalent) 720 -

(Goodwill equivalent) - -

(Intangible f ixed asset equivalent reported by business combination) - -

(Equity capital equivalents increased due to securitization transaction) - -

Subtotal （A） 259,920 258,657

Preferred securities with step-up interest rate clauses - -

Tier 2

Amount equivalent to 45% of the land revaluation excess - -

General allowance for loan losses 1,335 1,159

Eligible provision in excess of expected loss - -

Debt capital instruments etc. - -

Perpetual subordinated debt - -

Fixed-term perpetual subordinated debt and fixed-term preferred stocks - -

(Exclusion from Tier 2 capital) - -

Total 1,335 1,159

of which included in Capital （B） 1,335 1,159

Deductible item （C） 10 10

Capital （A）+（B）-（C）（D） 261,245 259,806

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

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(2) Capital adequacy Amount of Required Capital for Credit Risk

On balance sheet asset items

Cash 0 0 0 0

Exposures to Japanese government and central bank 0 0 0 0

Exposures to foreign government and central bank 672 26 648 25

Exposures to the Bank for International Settlements - - - -

Exposures to local authorities - - - -

Exposures to overseas public sectors other than centralgovernment

3,895 155 2,372 94

Exposures to the International Bank for Reconstruction andDevelopment

- - - -

Exposures to Japan finance organization for municipal enterprises - - - -

Exposures to Japan government-affiliated organization 6,150 246 3,027 121

Exposures to land development corporation, local housingcorporations, local public road corporations

- - - -

Exposures to financial institutions and regulated securitiescompanies

295,891 11,835 240,970 9,638

Corporate exposures 187,628 7,505 224,021 8,960

Exposures to small and medium size enterprises and individuals - - - -

Residential mortgage exposures 11,598 463 12,956 518

Retail exposures related to real-estate acquisition 4,356 174 9,643 385

Exposures three months or more in arrears 6,858 274 6,313 252

Bills before collection 349 13 385 15

Exposures to the Credit Guarantee Association etc. - - - -

Exposures guaranteed by Industrial Revitalization Corporation ofJapan

- - - -

Exposures to investment - - - -

Securitization exposures (originator) - - - -

Securitization exposures (other than the originator) - - - -

Assets backed up with several assets (so-called funds) whichindividual asset is ungraspable

- - - -

Others 39,155 1,566 34,427 1,377

On-balance sheet asset items total 556,556 22,262 534,767 21,390

Off-balance sheet asset items

Derivative transactions 79,326 3,173 122,752 4,910

Others 86,088 3,443 93,681 3,747

Off-balance sheet asset items total 165,414 6,616 216,433 8,657

Total 721,970 28,878 751,201 30,048

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

Risk weightedexposure

Required capitalRisk weighted

exposureRequired capital

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Amount of Required Capital for Market Risk

Standardized method of which

Interest Rate Risk - 35,904 1,436 - 29,436 1,177

Equity Risk - - - - - -

Foreign Exchange Risk - 2,832 113 - 2,858 114

Commodity Risk - - - - - -

Total - 38,736 1,549 - 32,294 1,291

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

SpecificRisk

GeneralMarket Risk

RequiredCapital

SpecificRisk

GeneralMarket Risk

RequiredCapital

Amount of Required Capital for Operational Risk

147,068 5,882 129,052 5,162Basic Indicator Approach

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

Operational Risk Required Capital Operational Risk Required Capital

Total Capital Adequacy Ratio and Tier I Capital Ratio

Tier 1 （A） 259,920 258,657

Tier 2 （B） 1,335 1,159

Deductible item （C） 10 10

Total Capital （A)＋（B）－（C）（D） 261,245 259,806

Risk assets

　　　On balance sheet transaction 556,556 534,767

　　　Off-balance sheet transaction 165,414 216,433

Credit Risk exposure 721,970 751,201

Operational Risk exposure divided by 8% 147,068 129,052

Market Risk exposure divided by 8% 38,736 32,294

Total （E） 907,775 912,548

Tier 1 Capital Ratio （A）／（E）×100 28.63 28.34

Total Capital Adequacy Ratio（D）／（E）×100 28.77 28.47

Total required Capital (Domestic Criteria) （E）×4％ 36,311 36,501

(Millions of Yen, %)

as of Mar. 31, 2012 as of Mar. 31, 2013

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(3) Credit Exposure (Millions of Yen)

Loans etc. Derivatives Loans etc. Derivatives

Domestic

Manufacturing 81,011 - 19,174 100,185 72,691 - 23,835 96,526

Agriculture andForestry

- - - - - - - -

Fishery - - - - - - - -

Mining - - - - - - - -

Construction 15 - 274 290 46 - 143 190

Electric power, gas,water supply

670 - 678 1,348 - - 3 3

Information andcommunication

28,607 - 24 28,632 17,715 - 28 17,743

Transportation 8,759 - 2,488 11,248 10,716 - 477 11,193

Wholesale and retail 151,713 - 8,622 160,335 144,898 - 5,664 150,562

Financial Institutionsand Insurance

868,306 30,751 47,429 946,488 986,475 15,139 92,779 1,094,394

Real estate 3,009 - - 3,009 9,643 - - 9,643

Other Services 22,624 - 766 23,391 7,507 - 312 7,820

Central, Localgovernment

507,950 784,806 1,000 1,293,756 560,593 802,665 - 1,363,259

Individuals 59,830 - 2,109 61,939 60,421 - 662 61,083

Others 32,526 - - 32,526 29,737 - - 29,737

Overseas

Sovereign 32,147 3,003 4,270 39,421 40,372 3,003 361 43,737

Financial Institutions 1,375,367 - 45,018 1,420,386 1,310,452 - 60,382 1,370,835

Others 35,029 2,500 544 38,074 59,678 2,500 394 62,574

Total 3,207,571 821,061 132,402 4,161,035 3,310,950 853,378 185,046 4,319,305

　　　　　　　　　　　　　

Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

To 1 year 2,159,398 205,502 102,292 2,467,194 2,103,232 159,766 170,583 2,433,582

1 to 3 years 706,106 284,347 13,938 1,004,393 406,880 437,391 12,596 856,868

3 to 5 years 147,267 245,528 8,190 400,987 510,715 200,125 180 711,021

Over 5 years 82,599 85,682 7,980 176,263 191,007 26,025 1,685 218,718

Undefined 112,197 - - 112,197 99,114 - - 99,114

Total 3,207,571 821,061 132,402 4,161,035 3,310,950 823,308 185,046 4,319,305

(by Remaining Tenor)

as of Mar. 31, 2012 as of Mar. 31, 2013

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

Securities Total Securities Total

Past-due over 3 months or Default Exposure

Domestic

Corporate 1,709 2,017

Individuals 826 706

Overseas 4,867 7,639

Total 7,402 10,363

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

(Note) "Past-due over 3 months or default exposure" is the exposure either in principal or interest payment is delayed more than 3 months or risk weight is 150% before the consideration of loan loss reserve.

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Allowance for Loan Losses

Specific Reserve

Corporate 806 (80) 726 726 453 1,179 726 420 1,147

Individuals 2,415 (162) 2,253 2,253 (498) 1,754 2,253 (1,175) 1,078

Others 97 (23) 73 73 (32) 41 73 (32) 41

General Reserve 898 436 1,335 1,335 70 1,405 1,335 (175) 1,159

Loan loss reserve for restructuring country

(Millions of Yen)

as of Mar. 31, 2012 as of Sep. 30, 2012 as of Mar. 31, 2013

Ending

Not applicable.

Change Ending Beginning ChangeBeginning Change Ending Beginning

Credit Risk Exposure after Credit Risk Mitigation by Risk weight under Standardized Approach

(Millions of Yen)

Rated Unrated Rated Unrated

0% - 1,303,419 136 1,369,192

20% 1,400,548 136,659 1,082,817 134,606

35% - 33,139 - 37,017

50% 111,581 8,821 105,607 14,634

75% - - - -

100% 84,015 241,738 81,323 334,258

150% - 3,711 - 2,158

Deduction from Capital - - - -

Total 1,596,144 1,727,488 1,269,884 1,891,867

as of Mar. 31, 2012 as of Mar. 31, 2013

(4) Credit Risk Mitigation

Eligible Financial Collateral

Cash 137,425 366,642

Bonds 636,384 702,381

Stocks 1,944 260

Others - -

Guarantee and Credit Derivatives

Guarantee 61,647 88,268

Credit Derivatives - -

Total 837,401 1,157,552

as of Mar. 31, 2012 as of Mar. 31, 2013

(Millions of Yen)

(Note) On-balance netting was adopted for the interbank Money Market transaction with Citibank, N.A. overseas main branches.

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(5) Counterparty Credit Risk of OTC Derivatives

i．Measurement of Credit exposure Current Exposure Method

ii．Total amount of gross positive fair value 171,347 194,481

iii．Credit exposure before Credit Risk Mitigation

FX related 87,098 184,372

Interest rate related 40,033 311

Total 127,131 184,684

iv．The amount deducting iii from sum of ii and gross add-on

(Reduction by Netting agreements)

182,580 174,171

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

v. Collateral type Not applicable. vi. Credit exposure after Credit Risk Mitigation Same as iii vii. Notional amount of credit derivatives which have counterparty risk Not applicable. viii. Notional amount of credit derivatives which cover exposures by Credit Risk Mitigation Not applicable. (6) Securitization i．Securitization exposure as Originator

Not applicable. ⅱ. Securitization exposure as Investor a. Information by Type of Underlying Assets

as of Mar. 31, 2012 as of Mar. 31, 2013

Claims on corporate customers - -

Residential Mortgage Loan - -

Claims on individual customers(ex. Residential Mortgage Loan)

- -

Others 10 10

Total 10 10

(Millions of Yen)

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b. Exposure by Risk Weight Category and Amount of Required Capital

c. Deduction Amount from Capital Pursuant to Article 247 of the FSA Capital Adequacy Ratio Notification by Type of Underlying Assets

d. Credit Risk-Weighted Assets Calculated Pursuant to Article 15 of Supplementary Provisions of the FSA Capital Adequacy Ratio

Notification Not applicable. (7) Market Risk (under Internal Model Approach) Not applicable.

(8) Equity Exposure in Banking Book Not applicable.

(9) Amount in regarded exposure under the Accord article 167 Not applicable. (10) Interest Rate Risk in the Banking Book - the increase/(decrease) in economic value for 1%

upward rate shocks according to internal management's method.

Exposure Required Capital Exposure Required Capital

20% - - - -

50% - - - -

100% - - - -

350% - - - -

Deduction from Capital 10 10 10 10

Total 10 10 10 10

as of Mar. 31, 2012 as of Mar. 31, 2013

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

Claims on corporate customers - -

Residential Mortgage Loan - -

Claims on individual customers(ex. Residential Mortgage Loan)

- -

Others 10 10

Total 10 10

(Millions of Yen)

as of Mar. 31, 2012 as of Mar. 31, 2013

Japanese Yen 17,389 10,845

US Dollar (2,572) (2,236)

Euro 914 807

Others (803) (181)

Total 14,927 9,235

(Millions of Yen)

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DISCLOSURE OF REMUNERATIONS (1) Matters relating to the development of the remuneration and other systems of the subject officer

and employee of Citibank Japan Ltd. (hereafter, “the Bank”) 1. The scope of “subject officer and employee”

The scope of "subject officer" and "subject employee" (collectively, "subject officer and employee") for which the remuneration announcement stipulates the disclosure is as below.

A. The scope of “subject officer”

Subject officers are directors and auditors of the Bank, excluding outside directors, outside auditors and part-time directors not receiving remuneration and other payments.

B. The scope of “subject employee, etc.” Among officers, other than subject officers, and employees, "those who receive a large remuneration, etc.” or “those who have a significant influence on the management and the status of the property of the Bank” are disclosed as "subject employees”. ⅰ. The scope of “major consolidated subsidiaries, etc ”

The Bank has no consolidated subsidiaries.

ⅱ. The scope of “those who receive a large remuneration, etc ” "Those who receive a large remuneration, etc.” are persons who receive remuneration more than the “average of the subject officers’ remunerations” calculated by dividing the total amount of the remunerations the “subject officers” received for the fiscal year by “the number of the subject officers”. As for "those who receive a large remuneration, etc.”, we have one person. Specifically, we have seven subject officers and their remunerations are 473 Million yen in total and 79 Million yen on average.

ⅲ. The scope of “those who have a significant influence on the management and the status of the property of the Bank” The scope of “those who have a significant influence on the management and the status of the property of the Bank” are hereinafter referred to as “Covered Employees”, as determined by Citi’s Independent Risk. “Group 2” Covered Employees are employees who, acting individually, have influence over the material risks of the Bank or the material risk of a business unit that is material to Citi. “Group 3” Covered Employees are other employees who are compensated similarly and who acting together could have influence over the material risks of the Bank or the material risks of a material business unit. Covered Employees can include subject officers, subject employees and persons in charge of the Risk Management Division and Risk Treasury. For the purpose of this section (ⅲ.only, the scope of “those who have a significant influence on the management and the status of the property of the Bank”), excludes subject officers who have a significant influence on the management and the status of the property of the Bank”.

2. Determination of the remuneration for the subject officer

A. Determination of the remuneration for the subject officer The total amount of officers’ remunerations (the maximum amount) is determined at the shareholders’ general meeting. As for the remuneration for the subject officer, determination is made according to the officer’s remuneration rules. Additionally, all directors’ annual remuneration (basic annual remuneration, bonus and stocks) is reviewed in respect of the appropriateness of the amount by the Chief Executive Officer, Compliance Head and Human Resources Head of the Bank.

B. Determination of the remuneration for the subject employee, etc. The remuneration for an employee of the Bank is determined and paid according to our remuneration rules. For the rules, their system design and documentation have been conducted by Human Resources Division, which is independent from Sales & Distribution Management. Please note that the remuneration for our executive officer is included in the category of subject employee, etc. and is not determined in the procedure ① above. Additionally, any employee with an annual remuneration (basic annual remuneration, bonus and stocks) exceeding 30-million yen or 300-thousand US dollar is reviewed in respect of the appropriateness of the amount by the Chief Executive Officer, Compliance Head and Human Resources Head of the Bank.

3. Determination of the remunerations for the employee in Risk Management Division and

Compliance Division The remunerations for the employee in Risk Management Division and Compliance Division are determined according to the remuneration rules of the Bank and each payment amount is fixed according to the performance appraisal ultimately decided by the division head. In that way, their remunerations are decided independently from Sales & Distribution Management.

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4. The total remuneration amount paid to the Remuneration Committee members and the number of meetings held There is not Remuneration Committee or an equivalent organization within the Bank.

(2) Matters relating to the assessment of the appropriateness of the design and operation of the

remuneration and other systems of the subject officer and employee of the Bank

1. Remuneration policy A. Policy of the remuneration for the “subject officer”

With respect to the remunerations for officers, officer remuneration system has been established according to the officer’s remuneration rules. Specifically, the system determines the composition of the remuneration: ・ Annual base remuneration ・ Bonus ・ Various allowances ・ Shares (or options to purchase shares) of Citigroup stock ・ Retirement benefits ・ Cash denominated awards (that earn notional investment returns). Annual base remuneration is determined based on the roles, profile, performance, etc. as an officer, while bonus is determined based on the performance of the Bank. Stocks (shares of Citigroup Inc. listed in the United States) are provided to align employee interests with those of shareholders, clients and other stakeholders.

B. Policy of the remuneration for the “subject employee, etc.” The remuneration for an officer or an employee of the Bank is determined depending on the role, personnel evaluation, ability and performance according to the remuneration rules of the Bank.

2. Significant change in the remuneration system design and operation There is no significant change aside from implementing enhanced compensation and risk management linkages for Covered Employees, which will be discussed in the following Section (3) .

(3) Consistency of the remuneration system of the subject officer and subject employee and the

risk management, and matters relating to linkage of the remuneration and performance

1. Methodology to take the risk into account for determining the compensation For Group 2 Covered Employees, there is an annual control function review process pursuant to which the control functions (Compliance, Finance, Independent Risk, Internal Audit, and Legal) provide an evaluation of risk behaviors.

2. Performance-linked portion to determine the remuneration for the subject officer or employee

A. Calculation method for the performance-linked portion The rating from the independent review process is included in the performance evaluation system to inform the performance review conducted by the employees’ manager. The performance evaluation system includes formal risk goals for covered senior managers as well as a formal manager-provided risk rating. When incentive compensation recommendations are made, both the individual goals and risk performance goals are included in the compensation worksheet for consideration.

B. Methodology to make adjustment to the performance linked portion

For Covered Employees, provisions also allow for the cancellation of deferred incentive compensation awarded in the event of serious financial or reputational harm to Citi, and can allow for cancellation if a failure to supervise or monitor risks results in such significant responsibility. Separately if the global reference business of a Covered Employee has pre-tax losses in any year of the deferral period, the portion of the deferred stock award that is scheduled to vest in the year following the loss year will be reduced.

C. Confirmation as to whether the compensation system is not too focused on the linkage to the short-term performance It is confirmed that the compensation system is not too focused on the linkage to the short-term performance as the structure of annual incentive awards made to Covered Employees discourages imprudent risk-taking. Also the risk mitigates include substantial deferrals; vesting periods, broad-based clawbacks, and management discretion to clawback nonvested deferred compensation for improper risk-taking behavior.

D. Ensuring effective controls and risk-adjustment procedures including monitoring individual manipulation of risk when determining compensation Compensation is determined based on year-end performance evaluations that focus on mission-critical goals with

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an emphasis on risk management. Performance evaluations reflect multiple inputs including multi-perspective feedback; review of performance against key business financial, risk and client metrics as well as qualitative and/or non-financial elements of performance; manager’s review of qualitative risk behavior; and independent review of qualitative risk behavior conducted by the Control Functions (Independent Risk, Compliance, Audit, Legal and Finance)

3. Adjustment of the deferred payment

Please refer to 2.B.Methodology to make adjustment to the performance linked portion. (4) Matters such as the categories of the remunerations for the subject officer and employee of the Bank and

the amounts and payment methods. The total amount of remunerations for the subject officers and employees (from April 1, 2012 to March 31, 2013)

(Millions of Yen)

Categories No. of subject persons

Remuneration, etc. total

Fixed remuneration Basic

remuneration

In the form of stocks/ Stock Option

Other

Variable remuneration Basic

remuneration Bonus Other

Retirement benefits

Subject Officers (excluding outside officers)

7 473 204 167 - 37 243 - 112 158 26

Subject Employees, etc.

48 1,708 1,060 999 - 61 647 - 420 227 -

(Note)

1. Other fixed remuneration includes housing or other allowances provided to the dispatched from Citigroup entities overseas.

2. Other variable remuneration includes deferred remunerations . (5) Other information relevant to the remuneration and other systems of the subject officers and employees of

the Bank.

As previously discussed, for Covered Employees, Citi adopted a new provision allowing cancellation of certain deferred incentive compensation awarded for 2012. This provision allows for cancellation of deferred cash awards in the event of significant responsibility of material adverse outcome. Citi will also consider the potential for impact on deferred stock awards if there is an annual pre-tax loss at any of the following four globally reportable financial segments: Citigroup (the entire company), Securities and Banking, Citi Transaction Services, and Global Consumer Banking. The above is in reference to deferred awards made in February 2013 which vest ratably over a four-year period from January 2014.

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Confirmation

July 31, 2013

Representative Director, President & CEO Kazuya Jono I confirm, to the best of my knowledge, the following matters concerning the Citibank Japan Ltd. financial statements for the Period from April 1, 2012 to March 31, 2013:

1. Matters concerning the financial statements are in conformity with “The Regulations regarding Terminology, Format and Method of Preparation of Financial Statements, etc” and “Enforcement Regulation of the Banking Law” and others, and the financials present fairly in all material respects.

2. Citibank Japan Ltd. establishes and maintains the appropriate internal control systems as below,

and fairly presents financial statements based on it.

(1) Assignment of duties and the corresponding units in charge are clearly defined, and the system for accomplishment of operation is appropriately established.

(2) Internal Audit Division assesses the appropriateness and effectiveness of internal control systems for each responsible unit, and reports the material matters to the Management and Board of Statutory Auditors.

(3) All material information concerning Citibank Japan Ltd. is adequately reported to the Management and Board of Directors as necessary.

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