Printed in Japan

Interim Report 2007Six-Month Period Ended September 30, 2007

This interim report is printed on recycled paper using soy ink.

AO

ZORA

BA

NK, LTD

. Interim Report 2007

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C

Y

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M C Y BL

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5C

01/08�坂部

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297mm×

426mm

受注番号

得意先名

品　　　名

色数

サイズ

42-

1585166（株）あおぞら銀行様

2007

あおぞら銀行

Interim R

eport

日付・作業担当者

１

２

４

３

作業ＭＡＣ

進行担当

DE-03

松下

Forward-Looking StatementsThis interim report contains forward-looking statements regarding the Bank’s financial condition and results of operations. These forward-lookingstatements, which include the Bank’s views and assumptions with respect to future events, involve certain risks and uncertainties. Actual resultsmay differ from forecasts due to changes in economic conditions and other factors.

Originally established as the Nippon Fudosan Bank, Limited, under the Long-TermCredit Bank Law in 1957, the Bank changed its name to Aozora Bank, Ltd., in 2001.In April 2006, the Bank made the transition from a long-term credit bank to a full-service commercial bank. 2007 marked not only the 50th anniversary of the Bank,but also the one year anniversary of the listing of Aozora’s shares on the First Sectionof the Tokyo Stock Exchange in November 2006.

Aozora Bank is a leading provider of lending, loan syndication, securitization,business and asset revitalization, debentures and deposits, in addition to providingan advisory service to assist our corporate clients, financial institution clients, andretail clients in finding solutions to their management challenges. Our listing,together with our change of status to an ordinary commercial bank, has enhancedour ability to respond flexibly to the needs of clients.

Profile

Contents

P1 To all of our partnersaround the world,

P2 Financial HighlightsP4 TopicsP5 Business OperationsP9 Financial and Corporate DataP10 Financial DataP86 Corporate DataP92 Share Procedure Information

Established April 1957Capital stock (consolidated) ¥419.8 billionTotal assets (consolidated) ¥6,623.9 billionConsolidated capital adequacy ratio (domestic standard) 15.75%Number of employees 1,429Branch network Domestic: 19 offices

Overseas: 5 representative officesAddress 3-1, Kudan-minami 1-chome,

Chiyoda-ku, Tokyo 102-8660,Japan

Long-term credit ratings JCR AR&I A–Moody’s A2Standard and Poor’s A–Fitch Ratings A–

(As of September 30, 2007)

To all of our partners around the world,

2007 is a landmark year for AozoraBank. Not only is it our 50th anniversarysince our founding, but it is also our firstanniversary since the listing of ourshares on the First Section of the TokyoStock Exchange. To be certain, ourlengthy history is important to us, but itis the promise of a bright future thatdrives us forward with such enthusiasm,and defines who we are as Aozora Bank.

Partnership SuccessThe Aozora Bank partnership philosophy colors everythingwe do at the Bank, and it is now yielding positive results.We leverage partnerships in our wholesale business tosource deals—deals which open up new businessopportunities with our ever-expanding network of corporateclients and regional financial institutions. We leverage ourretail business, with our affluent client base, to furtherenable us to grow our suite of high-value products. Weleverage our strong relationships with regional financialinstitutions to form strategic partnerships—in May weformed a strategic alliance with the Bank of Yokohama,enabling us to share our expertise in product developmentwhile better accessing regional customers in the Bank ofYokohama’s network. As we advance our high-growthspecialty finance and global investment strategies, it willbe our long-standing partnerships that offer us growthopportunities at home and abroad.

Risk Management as a Growth DriverBy employing risk management methodologies thatexemplify global standards, we get back to our customersfaster than the competition with solutions that best meettheir needs. We work on more deals, and move forwardwith certainty that the balance of risk and reward is clearlydefined, as evidenced by the growth in our loan book andnet interest margin. With the news of our successspreading, Aozora Bank is now leveraging this solidfoundation to continue to grow our core businesses.

Achievements in an Adverse MarketIn a year that has seen the toughest global credit marketsin a decade, our financial condition remains strong.Aozora Bank’s Tier 1 Capital Ratio is amongst the highestof the Japanese banks, providing protection from the risksof volatile global credit markets. Our liquidity remains

strong as we continue to grow our loan book. Our trustedpartnerships and proven risk management processesenable us to realize the value of our strengths and liquidityto better serve our customers and focus on the controlledgrowth of our business.

It is the trusted relationships that we have with ourcustomers, shareholders, business partners and employeesthat form the basis of our sustainable growth model; and,it is our commitment to strict corporate governance,rigorous internal controls, and risk management thatenables us to execute this model successfully.

On behalf of the management team of Aozora Bank, wewould like to sincerely thank all of our customers,shareholders, and employees for their continuing support.

January 2008

Chairman and CEO,Kimikazu Noumi

President and COO,Federico J. Sacasa

1

Chairman and CEO,Kimikazu Noumi

President and COO,Federico J. Sacasa

1. Both consolidated net revenue and net income decreased due to realized and unrealized losses on bonds● Consolidated net revenue decreased by 16.0% (down ¥9.3 billion from March 31, 2007) to ¥48.8 billion as a result

of unrealized valuation losses of Asset Backed Collateralized Debt Obligations (CDOs) and losses on bond transactions.● Net income was down 19.9% (down ¥10.6 billion from March 31, 2007) to ¥42.7 billion, achieving 91.9% of the

original plan for the half.

2. Net interest income rose significantly● Net interest income increased by 28.7% (up ¥6.2 billion from March 31, 2007) to ¥27.9 billion, reflecting the

increased loan balance, favorable yield on investments and increased dividend income.● The loan balance increased by 7.8% (up ¥287.1 billion from March 31, 2007) to ¥3,971.7 billion mainly due to

growth in overseas lending. This growth rate substantially exceeded the industry average and is in line with management’starget of low double digit annual growth.

3. Maintaining a high level of asset quality● Total impaired credit disclosed under the Financial Reconstruction Law (FRL) maintained at the low level of 1.05%.● 90% of claims disclosed under the FRL are covered by collateral and reserves.

4. Maintaining the highest domestic consolidated capital adequacy ratio● The consolidated capital adequacy ratio of 15.75%, with a Tier 1 ratio of 16.92%, keeps Aozora Bank at an industry-high

level.

Financial Highlights

Consolidated operating profits

23.1

80

60

40

20

09/2006 3/2007 9/2007

33.4

62.4

(Billions of Yen)

42.7

100

75

50

20

09/2006 3/2007 9/2007

53.4

81.5

Consolidated net income(Billions of Yen)

48.8

27.9

120

90

60

30

0

Consolidated net revenueNet interest income

9/2006 3/2007 9/2007

21.7

58.1

44.9

114.4

Consolidated net revenue breakdown(Billions of Yen)

40

30

20

10

0

100

75

50

25

0

Non-consolidated disclosed claims under the Financial Reconstruction LawNon-consolidated reserve and coverage ratioNon-consolidated disclosed claim ratio

9/2006 3/2007 9/2007

91.1%96.8%

90.0%

0.69% 0.96% 1.05%

37.8

(%)

Non-consolidated disclosed claims under the Financial Reconstruction Law(Billions of Yen)

33.0

22.8

1,200

900

600

300

0

20

15

10

5

0

Regulatory capital Tier I capitalCapital adequacy ratio Tier I ratio(domestic standard) (domestic standard)

9/2006 3/2007 9/2007

774.1

17.36%

15.75%18.52%

18.74%

15.70%16.92%

765.2714.5

789.7763.6820.1

(%)

Consolidated capital adequacy ratio(Billions of Yen)

Note: The ratio of 3/2007 and 9/2007 have been calculated according to Basel II criteria.

8,000

6,000

4,000

2,000

09/2006 3/2007 9/2007

Total assets, loans and bills discounted, and securities

(Billions of Yen)

1,651.6

Total assets Loans and bills discountedSecurities

6,438.8

3,489.3

1,818.5

6,544.0

3,684.6

1,918.9

6,623.9

3,971.7

(Billions of Yen)

Mar. 31, 2007 Mar. 31, 2008 Mar. 31, 2009 Mar. 31, 2010 Mar. 31, 2011Sep. 30, 2007

Result Result Plan Plan Plan Plan

Net revenue 107.7 41.2 110.0 116.5 123.5 132.0General and administrative expenses 46.4 22.9 50.0 55.5 57.5 59.5Business profit before general loan-loss

reserve 61.3 18.3 60.0 61.0 66.0 72.5Credit-related expenses (13.6) (5.5) 3.5 11.0 11.5 12.0Net income 82.2 40.2 76.0 51.5 34.8 38.4Note: The above planned amounts were projected in August 2007.

Progress in Implementing Business Revitalization Plan (Non-Consolidated)For the six-month period ended September 30, 2007, the year ended March 31, 2007, and the years ending March 2008, 2009, 2010 and 2011

2

* Yen amounts stated in millions of yen have been truncated. Amounts expressed in billions of yen have been rounded to the nearest ¥0.1 billion.

Notes: 1. Total equities as of September 30 and March 31, 2007 as well as September 30, 2006 are in accordance with the new standard for presentation ofequity; however, those as of March 31, 2006 and September 30, 2005 are not adjusted to conform to the new presentation.

2. Deposits include negotiable certificates of deposit (NCDs).3. The Bank declared the reverse stock split of the Bank’s common stock and Class A Series 4 and Class C Series 5 preferred stocks, which took effect

on September 11, 2006. Total equity per share and basic net income per share previous to March 31, 2006 are calculated on the premise that thereverse stock split had been declared at the beginning of each fiscal period.

4. ROE is calculated as follows:

* As for the 6-month periods ended on September 30, the numerator is annualized.

Notes: 1. Total equities as of September 30 and March 31, 2007 as well as September 30, 2006 are in accordance with the new standard for presentation ofequity; however, those as of March 31, 2006 and September 30, 2005 are not adjusted to conform to the new presentation.

2. Deposits include negotiable certificates of deposit (NCDs).3. The Bank declared the reverse stock split of the Bank’s common stock and Class A Series 4 and Class C Series 5 preferred stocks, which took effect

on September 11, 2006. Total equity per share and basic net income per share previous to March 31, 2006 are calculated on the premise that thereverse stock split had been declared at the beginning of each fiscal period.

4. ROE is calculated as follows:

* As for the 6-month periods ended on September 30, the numerator is annualized.

(Millions of Yen)

Sep. 30, 2007 Sep. 30, 2006 Sep. 30, 2005 Mar. 31, 2007 Mar. 31, 2006

Operating income 102,015 92,104 70,062 188,088 163,661Business profit before general loan-loss reserve 18,348 31,372 29,378 61,252 64,201Operating profits 18,966 32,461 26,045 61,960 60,729Net income 40,204 53,109 45,201 82,168 119,920Capital stock 419,781 419,781 419,781 419,781 419,781Total equity (Note 1) 812,207 758,905 648,766 788,537 720,447Total assets 6,632,225 6,445,877 4,837,850 6,558,891 6,005,204Debentures 1,787,492 1,236,500 845,126 1,454,525 1,064,331Deposits (Note 2) 3,077,881 3,332,510 2,366,204 3,252,145 3,211,709Loans and bills discounted 3,517,123 3,237,993 2,570,665 3,362,528 3,025,391Securities 2,186,113 2,118,428 1,585,320 2,332,881 1,797,623Total equity per share (yen) (Notes 1,3) 383.52 334.99 257.29 367.85 305.41Basic net income per share (yen) (Note 3) 24.36 37.46 31.88 53.03 82.15Capital adequacy ratio (domestic standard) 15.96% 19.00% 21.00% 15.86% 19.55%Tier I ratio (domestic standard) 16.91% 18.38% 20.37% 17.23% 18.92%Return on equity (ROE) (Note 4) 12.91% 23.24% 26.12% 15.30% 30.57%

Non-ConsolidatedFor the six-month periods ended September 30, 2007, 2006 and 2005, and the years ended March 31, 2007 and 2006

(Millions of Yen)

Sep. 30, 2007 Sep. 30, 2006 Sep. 30, 2005 Mar. 31, 2007 Mar. 31, 2006

Operating income 110,085 96,710 74,133 197,545 171,946Operating profits 23,055 33,352 25,748 62,405 61,440Net income 42,748 53,354 44,897 81,510 120,114Capital stock 419,781 419,781 419,781 419,781 419,781Total equity (Note 1) 817,006 762,812 650,777 792,480 723,386Total assets 6,623,926 6,438,795 4,827,865 6,543,994 5,995,947Debentures 1,783,492 1,232,500 841,126 1,450,525 1,060,331Deposits (Note 2) 3,040,889 3,321,349 2,350,610 3,233,905 3,196,307Loans and bills discounted 3,971,671 3,489,272 2,655,018 3,684,601 3,136,255Securities 1,651,628 1,818,477 1,461,133 1,918,895 1,628,154Total equity per share (yen) (Notes 1,3) 386.01 337.31 258.71 369.81 307.49Basic net income per share (yen) (Note 3) 25.90 37.64 31.67 52.59 82.29Consolidated capital adequacy ratio (domestic standard) 15.75% 18.74% 20.92% 15.70% 19.47%Tier I ratio (domestic standard) 16.92% 18.52% 20.61% 17.36% 19.12%Return on equity (ROE) (Note 4) 13.64% 23.18% 25.79% 15.08% 30.41%

ConsolidatedFor the six-month periods ended September 30, 2007, 2006 and 2005, and the years ended March 31, 2007 and 2006

(Net income – Dividends paid on preferred stock)* ROE = { } ÷ 2( Total equity

at beginning of periodNumber of preferred shares

outstanding at beginning of periodIssueprice – x ) + Total equity

at end of periodNumber of preferred sharesoutstanding at end of period – x )( Issue

price

x 100

(Net income – Dividends paid on preferred stock)* ROE = { } ÷ 2( Total equity

at beginning of periodNumber of preferred shares

outstanding at beginning of periodIssueprice – x ) + Total equity

at end of periodNumber of preferred sharesoutstanding at end of period – x )( Issue

price

x 100

3

Topics

■ Business Alliances with RegionalFinancial Institutions

In May 2007, Aozora entered into a comprehensivebusiness alliance with the Bank of Yokohama tosupplement its investment banking business aimedat corporate customers. This business tie-up hasprovided corporate customers of the Bank ofYokohama with integrated investment bankingservices and presented an opportunity for mutualbusiness expansion in the joint provision of a diverserange of financial solutions.

Aozora’s loan structuring and risk managementcapabilities formed the basis for a comprehensivealliance with Toho Bank, Ltd., in August 2007.The two banks are engaged in operations such asthe development and application of new financingmethods, planning and development of supportpolicies and their execution with local corporationsin need of recovery.

■ Launch of Business Recovery Fund

As a step in Aozora’s medium-term growth strategyof partnering Japanese regional lenders in the areaof business recovery, Aozora Bank, in conjunctionwith AOZORA Loan services Co., Ltd., launchedthe San-In Recovery Fund with the San-In GodoBank Ltd. and San-In Loan Services in April 2007.The fund is dedicated to assisting small andmedium-sized businesses based in the San-Inregion of Japan.

This alliance has provided an opportunity tofacilitate the speedy recovery of small and medium-sized enterprises struggling with over-indebtedness,and contribute to the recovery of Japan’s regionaleconomies.

■ Establishment of the ShanghaiRepresentative Office

During 2007, we opened a representative office inShanghai to initiate active contact and informationexchange with both regulatory authorities andfinancial institutions, giving us further reach intoChina.

4

■ Structuring of Synthetic CDOs fromJ-REIT Loans

In August 2007, the Bank conducted assetsecuritization backed by pool of loans to JapaneseReal Estate Investment Trusts (J-REIT) and issuedCDOs totaling 24.5 billion yen. While the loanswere held by the Bank, the credit risk was transferredto a special purpose company (SPC) using CreditDefault Swaps (CDS), and CDOs were then issued bythe SPC. This scheme allowed the Bank to control therisk of the REIT loan portfolio, and at the same timeprovide a product to meet the needs of its investorclients. These were the first REIT loan-backed CDOsto be issued in the domestic market.

■ Long-Term Ratings Upgraded

In May 2007, Moody’s upgraded the Bank’s long-term rating from Baa1 to A2, and this was followedin June with an upgrade from BBB to A- from Stan-dard and Poor’s.

■ Revision of the Business RevitalizationPlan

In August 2007, Aozora Bank announced the revisionof its Business Revitalization Plan (BRP). The Bankhas met all P/L targets under the BRP since itsreprivatization and has already secured sufficientretained earnings for the entire remaining amountof public funds. The Bank reasserted its strategicpriority of the redemption and cancellation of allremaining preferred shares, subject to regulatoryapproval after meeting the pricing terms and othercriteria. The common stock dividend for FY 2007 isplanned to be ¥3.86 per share, which is more thandouble the actual payment for FY 2006. Further-more, Aozora plans to achieve a 20% payout ratiofor common stock in FY 2009 and FY 2010.

5

<Loans>We have a deep understanding of our clients’ businessesand types of operation, and our screening methods allowus to make projections based on strengths, such astechnology or a client’s business model. In this way, weare able to place greater emphasis on cash-flow generationpotential rather than on physical collateral. We identifythe requirements of our corporate customers and workclosely with our sales divisions to swiftly respond with theappropriate range of products and services.

<Syndicated Loans>We offer syndicated loans for project, leveraged, asset andreal estate finance to our corporate clients. We havefurther expanded our customer base through successfultransactions with mid-sized companies, as well as largecorporate clients. This has enabled our clients, whotraditionally have not had access to more liquid institutionalfunding sources, to diversify their funding base andimprove their liquidity positions.

<Derivative Products>The Bank offers a wide range of sophisticated derivativeproducts along with our integrated line of services fromstructuring and market-making through to distribution. Aswell as providing up-to-the-minute market information toour large head office clients, we have stationed head officespecialists at regional branches to advise our small tomedium-sized regional corporate clients. Following theenactment of the Financial Instruments and Exchange Law,we have strengthened our mandatory sales representativecertification program to ensure that staff are able toclearly explain the structure and risk associated with eachproduct. Our specialists provide clients with professionaladvice in order to ensure that they receive the best possiblefinancial solutions.

<Securitization>Aozora Bank helps clients with the securitization of varioustypes of financial claims to help them achieve greaterfunding diversity. The Bank is innovative in developing newtypes of securitization. Such developments allow originatorswith various types of cash flows to access the securitizationmarket, depending on their funding requirements.

<Private Placement Bonds, Trustee Services, etc.>Private placement bonds provide clients with opportunitiesto diversify funding sources. As they allow clients to tapfinancing in lower amounts, they are gaining popularity inthe corporate marketplace. The Bank provides products suchas non-collateral as well as guaranteed private placementbonds. To assist our customers in accessing capital marketsthrough bond issuance, the Bank acts as fiscal agent ortrustee for private placement and public bonds, and hasextensive experience and expertise in this field.

<Special Finance>For clients facing the challenges of a rapidly changingoperating environment, the Bank offers a full lineup ofbusiness recovery services. In addition to providingcorporate advisory services, including the formation ofbusiness recovery plans and assistance in finding newbusiness sponsors, we also provide various types of loans.These include short-tem working capital financing essentialfor business continuity, and medium and long-term loansbased on a comprehensive recovery plan. Our loan servicingsubsidiary, AOZORA Loan Services Co., Ltd., providessupport to financial institutions disposing of problemloans and develops business recovery plan proposals.

<Asset Finance>The Bank provides finance for the construction of newocean-going ships (international trading vessels) as wellas the purchase and refinance of used ships. We also focuson co-investment with regional financial institutions in theform of syndicated transactions. The Bank providesfinancing to medical institutions, nursing-care institutions,as well as healthcare funds and related M&A activities.

<Leveraged Finance>Aozora has been a key player in the Japanese leveragedfinance market since its inception and employs some ofthe country’s finest professionals. We provide finance forbusiness revitalization, including domestic managementbuyouts (MBOs) and mergers and acquisitions (M&A).Aozora supports the needs of our equity-fund and corporateclients with a broad range of tailor-made financial productsfrom senior debt to mezzanine, including subordinatedloans and preferred stock.

For Corporate Clients

Business Operations

6

1. Providing a Wide Array of Asset ManagementProducts

<Debentures and Derivative Products>Together with the regular issuance of debentures, weprovide time deposits, certificates of deposits and othershorter-duration products. Aozora Bank has establisheda coherent framework throughout our entire derivativesbusiness, and through the development of new productsand market making, we actively provide our financialinstitution clients with a range of products that satisfytheir needs. The Bank has a strong franchise in theprovision of derivative-embedded products centered uponour derivate-embedded time deposits, derivate-embeddedloans, as well as loans to corporate customers. As wellas providing up-to-the-minute market information to ourhead office clients, we have stationed head officespecialists at regional branches to advise our regionalcorporate clients. Following the enactment of the FinancialInstruments and Exchange Law, we have strengthenedour mandatory sales representative certification programto ensure that staff are able to clearly explain the structureand risk associated with each product. Our specialistsprovide clients with professional advice in order to ensurethat they receive the best possible financial solutions.

<Loan-Related Products>Using our presence in the syndicated loan market, weoffer our financial institution clients participation in loansyndicates to grow and diversify their own loan portfolios.We actively promote the use of syndicated loans not onlyto corporations, but also to real estate investment trustsand non-recourse real estate financing deals. The Bankalso offers credit-linked and asset-backed loans.

<Securitized Products>The Bank provides a wide variety of investment productsby securitizing various types of monetary claims or non-recourse real estate finance receivables and structuringthem into beneficiaries’ interest held in trust, privateplacement notes, etc., dependent on the preferences ofour clients.

<Investment Trusts>We offer a variety of fund products, including foreignregistered funds. Our comprehensive product line-upconsists of an array of fund types—including Japaneseequity funds (active, long-short, and market neutral), globalbond funds, global REIT funds, and fund of funds (theUnited States, Europe and Asia). These allow our clientsto effectively diversify their portfolio. Aozora also providesinvestor support through our well-established framework.

For Financial InstitutionClients

<Real Estate Finance>The real estate securitization market is worth over ¥10trillion annually, and in recent years has consisted mainlyof transactions conducted through real estate investmenttrusts (REITs), privately placed funds and special purposecompanies (SPCs). Aozora Bank’s skills and experience inreal estate finance and securitization enable us to delivervalue-added services to our clients who need to adapt to arapidly changing environment, including regulatory changesand other issues related to real estate securitization.

<Private Equity>Whether our clients are looking to go public with their newventures, or are small to medium-sized corporations facingbusiness succession or revitalization challenges, AozoraBank can respond to their funding needs. The Bank’sventure capital subsidiary, Aozora Investment Co., Ltd.,has a solid track record in the venture capital businessand JABOC Ltd., IDA Capital Inc., and Arise CapitalPartners, Inc., utilize their wealth of experience in buyoutinvestment to help clients find solutions to managementissues and to raise their corporate value. Our highlyexperienced team provides comprehensive advisory servicesto clients in answer to the recent increase in domesticM&A, as well as offering support in buyout investmentsand exit strategies.

7

<Financial Instruments IntermediaryBusiness>Through the Bank’s securities subsidiary, AozoraSecurities Co., Ltd., we offer our clients a variety ofEuroyen structured notes (interest rate, foreign currency,equity, credit-linked, fund-linked etc.) in response to theirinvestment needs.

2. Offering Solutions to Specific ManagementIssues

<Soundness of Assets>The disposal of problem loans continues to be a pressingissue for our financial institution clients, and the Bank’ssubsidiary, AOZORA Loan Services Co., Ltd., providessupport to improve the quality of their loan portfoliosthrough the purchase of these loans.

<Business Recovery>We provide a variety of services to clients who are in theprocess of business recovery. The Bank’s distressed loanservicing subsidiary, Aozora Loan Services, providesfinancing through its own recovery fund, and assists inthe establishment of regional revitalization funds forspecific industries such as hospitals and hotels.

3. Making Collaborative Proposals to Clients’Corporate Customers

<Derivatives>The Bank enhanced its marketing of unique derivativeproducts such as guaranteed swaps or options, as well asits advisory service to assist financial institution clientsin the development of their own derivative products fortheir corporate customers.

<Financing>We partner with regional financial institutions, helpingtheir clients who are en route to financial recovery withthe joint provision of debtor-in-possession (DIP) finance,corporate revitalization finance, and asset-based lending(ABL). We provide financial advisory services in suchareas as real estate finance, ship finance and finance tomedical institutions, as well as proposals of jointlyoriginated syndicated loan transactions.

<Financial Products and Services>We offer our customers the Excellent derivative-embeddedtime deposit series, the Aozora Time Deposit (exclusivelyfor telephone banking), Aozora Pocket Time Deposit(permits partial withdrawal before maturity), and AozoraU.S. Dollar Time Deposit as well as investment trusts andpersonal annuity insurance. Our enhanced lineup ofproducts allows us to effectively meet the savings andinvestment needs of our customers.

<Enhancement of Service Channels>Through our telephone banking service, customers canmake time deposits, purchase debentures and investmenttrusts, make account balance enquiries, and notify changesto personal information. Rather than simply using anautomated touch-tone system, our telephone bankingservice is staffed by a team of operators, ensuring evencustomers who are new to telephone banking may feel atease. Aozora Bank customers can make withdrawals anddeposits from/to saving accounts at any Postal SavingsATM without incurring usage fees.

<Detailed Financial Advisory Services>The Bank offers financial advisory services until 5 pm atall branches, tailoring clients’ investment portfolios usinginvestment products including time deposits, investmenttrusts, and annuity insurance. We support staff membersin obtaining financial planner qualifications to ensure thatwe offer top-quality advice on investments, inheritance,and business succession.

For Retail Clients

http://www.aozorabank.co.jp/english/hojin/jigyou

http://www.aozorabank.co.jp/english/about/ http://www.aozorabank.co.jp/english/investors/

Aozora Bank Web site

For Corporate Clients

About Aozora Investor Relations

For Financial Institution Clients

The Aozora Bank Web site contains a varietyof business and investor relations information,as well as news releases and importantfinancial data.

http://www.aozorabank.co.jp/english/hojin/kinyu

http://www.aozorabank.co.jp/english/Front Page

http://www.aozorabank.co.jp/english/

8

9

Financial DataConsolidated InformationCONSOLIDATED BUSINESS RESULTS . . . . . . . . . . . . . . . . 10

Consolidated Financial Highlights . . . . . . . . . . . . . . . . . . . 10

CONSOLIDATED FINANCIAL REVIEW . . . . . . . . . . . . . . . . . 11Consolidated and Equity-Method Companies . . . . . . . . . 11Analysis of Operating Performance . . . . . . . . . . . . . . . . . . 11

Analysis of Financial Position . . . . . . . . . . . . . . . . . . . . . . 13Consolidated Capital Adequacy Ratio

(Domestic Standard) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . 17

Consolidated Balance Sheets (Unaudited) . . . . . . . . . . . . 17

Consolidated Statements of Income (Unaudited) . . . . . . . 18Consolidated Statements of Changes in Equity

(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Consolidated Statements of Cash Flows (Unaudited) . . . . 20

NOTES TO CONSOLIDATED SEMIANNUAL

FINANCIAL STATEMENTS (Unaudited) . . . . . . . . . . . . . . . . 21INCOME ANALYSIS (Consolidated) . . . . . . . . . . . . . . . . . . . 40

Interest-Earning Assets and Interest-Bearing Liabilities . . . 40Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . 40Trading Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Other Operating Income (Net) . . . . . . . . . . . . . . . . . . . . . . 40

Non-Consolidated InformationNON-CONSOLIDATED BUSINESS RESULTS . . . . . . . . . . . 41

Non-Consolidated Financial Highlights . . . . . . . . . . . . . . . 41

NON-CONSOLIDATED CAPITAL ADEQUACYRATIO (Domestic Standard) . . . . . . . . . . . . . . . . . . . . . . . 42

REDUCTION OF PROBLEM LOANS AND ANALYSIS OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

NON-CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . 46Non-Consolidated Balance Sheets (Unaudited) . . . . . . . . 46Non-Consolidated Statements of Income (Unaudited) . . . . . 47

Non-Consolidated Statements of Changes in Equity (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

INCOME ANALYSIS (Non-Consolidated) . . . . . . . . . . . . . . . 49Net Revenue, Business Profit . . . . . . . . . . . . . . . . . . . . . . 49Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Yield on Interest-Earning Assets, Interest Rate on Interest-Bearing Liabilities, Net Yield/Interest Rate . . . . . 49

Average Balance of Interest-Earning Assets and Interest-Bearing Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 50Analysis of Interest Income and Interest Expenses . . . . . . 51

Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . 52Trading Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Other Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . 53General and Administrative Expenses . . . . . . . . . . . . . . . . 53

DEBENTURE OPERATIONS (Non-Consolidated) . . . . . . . . . 54

Outstanding Balance and Average of Debentures . . . . . . 54Balance by Residual Period . . . . . . . . . . . . . . . . . . . . . . . 54

Outstanding Balance of Debentures per Branch . . . . . . . . 54Outstanding Balance of Debentures per Employee . . . . . . 54

DEPOSIT OPERATIONS (Non-Consolidated) . . . . . . . . . . . . 55

Balance by Deposit Account . . . . . . . . . . . . . . . . . . . . . . 55Balance of Time Deposits by Residual Period . . . . . . . . . . 56

Outstanding Balance by Depositor . . . . . . . . . . . . . . . . . . 56Deposits per Branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Deposits per Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 56

LOAN OPERATIONS (Non-Consolidated) . . . . . . . . . . . . . . . 57Outstanding Balance of Loans . . . . . . . . . . . . . . . . . . . . . 57

Balance by Residual Period . . . . . . . . . . . . . . . . . . . . . . . 57Ratio of Loans and Bills Discounted to

Debentures/Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Loans to Small and Medium-Sized Corporations . . . . . . . 57Breakdown of Loans and Bills Discounted by Industry . . . 58

Risk-Monitored Loans by Industry . . . . . . . . . . . . . . . . . . 58Balance of Loans and Bills Discounted,

Classified by Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Breakdown of Balance of Acceptances and Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Breakdown of Loans and Bills Discounted by Collateral . . 59Breakdown of Collateral for Customers’ Liabilities

for Acceptances and Guarantees . . . . . . . . . . . . . . . . . . 59Consumer Loans Outstanding . . . . . . . . . . . . . . . . . . . . . 59Loans per Branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Loans per Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Write-Off of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Reserves for Possible Loan Losses . . . . . . . . . . . . . . . . . 60Country Risk Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Credits to Major Shareholder Groups . . . . . . . . . . . . . . . . 60

SECURITIES (Non-Consolidated) . . . . . . . . . . . . . . . . . . . . . 61Outstanding Balance and Average Balance of

Securities Held . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61Balance of Securities by Residual Period . . . . . . . . . . . . . 61Ratio of Securities to Debentures and Deposits . . . . . . . . 62

SECURITIES BUSINESS (Non-Consolidated) . . . . . . . . . . . . 62Underwriting of Public Bonds . . . . . . . . . . . . . . . . . . . . . . 62

Over-the-Counter Sales of Public Bonds and Securities Investment Trusts . . . . . . . . . . . . . . . . . . . . . . 62

Average Balance of Securities (Trading Account) . . . . . . . 62INTERNATIONAL OPERATIONS (Non-Consolidated) . . . . . . 63

Foreign Exchange Transactions . . . . . . . . . . . . . . . . . . . . 63

Balance of Assets in International Operations . . . . . . . . . . 63DERIVATIVE TRANSACTIONS (Hedging Instruments) . . . . . 64

Interest Rate Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Currency Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

OTHER OPERATIONS (Non-Consolidated) . . . . . . . . . . . . . 65

Principal Fees and Commissions . . . . . . . . . . . . . . . . . . . 65Domestic Exchange Transactions . . . . . . . . . . . . . . . . . . 65

Automated Installations . . . . . . . . . . . . . . . . . . . . . . . . . . 65CAPITALIZATION (Non-Consolidated) . . . . . . . . . . . . . . . . . 66

History of Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Major Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66Ownership and Distribution of Shares. . . . . . . . . . . . . . . . 67

Disclosure Based on Basel II CapitalAccord Pillar III—Market Discipline . . . . . . . . . . 68

Corporate Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Corporate History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Directors, Auditors and Executive Officers . . . . . . . . . . . . 89Staff Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Business Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90Office Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

Share Procedure Information . . . . . . . . . . . . . . . . . . 92

Financial and Corporate Data

10

Consolidated Business Results

Consolidated Financial HighlightsFor the six-month periods ended September 30, 2007, 2006 and 2005, and the years ended March 31, 2007 and 2006

(Millions of Yen)

Sep. 2007 Sep. 2006 Sep. 2005 Mar. 2007 Mar. 2006

Operating income . . . . . . . . . . . . . . . . . . . . . . . 110,085 96,710 74,133 197,545 171,946

Operating profits . . . . . . . . . . . . . . . . . . . . . . . . 23,055 33,352 25,748 62,405 61,440

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,748 53,354 44,897 81,510 120,114

Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,781 419,781 419,781 419,781 419,781

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 817,006 762,812 650,777 792,480 723,386

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,623,926 6,438,795 4,827,865 6,543,994 5,995,947

Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,783,492 1,232,500 841,126 1,450,525 1,060,331

Deposits (including negotiable certificates of deposits) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,040,889 3,321,349 2,350,610 3,233,905 3,196,307

Loans and bills discounted . . . . . . . . . . . . . . . . 3,971,671 3,489,272 2,655,018 3,684,601 3,136,255

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,651,628 1,818,477 1,461,133 1,918,895 1,628,154

Total equity per share (yen) . . . . . . . . . . . . . . . . 386.01 337.31 258.71 369.81 307.49

Basic net income per share (yen) . . . . . . . . . . . 25.90 37.64 31.67 52.59 82.29

Diluted net income per share (yen) . . . . . . . . . . 20.20 25.22 21.22 38.52 56.77

Consolidated capital adequacy ratio (domestic standard) (%) . . . . . . . . . . . . . . . . . 15.75 18.74 20.92 15.70 19.47

Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . (262,346) (92,351) 349,381 1,997 587,977

Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . 253,986 (170,826) (328,089) (262,219) (443,773)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . (3,896) (6,110) (10,707) (6,111) (11,582)

Cash and cash equivalents, end of period . . . . 25,937 35,238 182,490 38,194 304,527Notes: 1. Total equities as of September 30 and March 31, 2007 and September 30, 2006 are in accordance with the new standard for presentation of

equity; however, those as of March 31, 2006 and September 30, 2005 are not adjusted to conform to the new presentation.2. Total equity per share, basic net income per share and diluted net income per share are calculated by applying Financial Accounting Standard

No. 2, “Accounting Standard for Earnings per Share” and Financial Accounting Standards Implementation Guidance No. 4, “ImplementationGuidance for Accounting Standard for Earnings per Share.”

3. The Bank has declared a reverse stock split of the Bank’s common stock and Class A Series 4 and Class C Series 5 preferred stocks, which tookeffect on September 11, 2006. Total equity per share, basic net income per share and diluted net income per share previous to March 31, 2006,are calculated on the premise that a reverse stock split had been declared at the beginning of each fiscal period.

11

1. Consolidated and Equity-Method Companies

2. Analysis of Operating Performance

(1) Income

Total income decreased by ¥1.0 billion (-0.8%) over the same

period last year, to ¥116.0 billion. Interest income rose ¥18.4

billion over the same period last year, to ¥69.5 billion, mainly

driven by the ¥14.9 billion increase (+42.8%) in income from

interest on loans and bills discounted. Interest on loans and

bills discounted substantially increased as the balance of

loans, especially those denominated in foreign currencies,

increased from the balance as of March 31, 2007.

Fees and commissions decreased by ¥0.7 billion (-8.5%)

over the same period last year, to ¥8.0 billion. This decrease

was attributable to a decrease in fees from such loan operations

as commitment lines of credit and syndicated loans.

The consolidated financial statements as of September 30,

2007 include the accounts of the Bank and its sixteen

consolidated subsidiaries. During the 6-month period under

review, ended September 30, 2007, two newly established

companies came under the scope of consolidation. No

subsidiaries or affiliated companies were accounted for using

the equity method.

Trading profits increased by ¥0.8 billion (+24.0%) over the

same period last year. Profits related to derivative transactions

with customers continuously had a favorable result.

Other operating income decreased by ¥3.4 billion (-12.6%)

over the same period last year, to ¥23.8 billion, mainly caused

by a decrease of gains on sales of bonds, principally gains on

sales of Real Estate Investment Trust (J-REIT).

Other income was drastically down ¥16.0 billion (-59.8%)

over the same period last year, to ¥10.8 billion. The reversal of

reserve for possible loan losses stood a ¥5.4 billion, down

¥11.6 billion in contrast with ¥17.0 billion in the same period

last year.

Consolidated Financial Review

Consolidation and Equity-Method Companies(Number of Companies)

Sep. 30, 2007 Mar. 31, 2007 Change

Consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 14 2

Subsidiaries and affiliated companies accounted for by equity method . . . 0 0 0

(Millions of Yen)

Sep. 30, 2007 Sep. 30, 2006(6 months) (6 months) Change

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,998 116,991 (993)

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,514 51,074 18,440Interest on loans and bills discounted . . . . . . . . . . . . . . . . . . . . . . 49,765 34,838 14,927Interest and dividends on securities . . . . . . . . . . . . . . . . . . . . . . . 15,892 11,668 4,224Interest on deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . 1,660 1,177 483Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,195 3,389 (1,194)

Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,980 8,717 (737)

Trading profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,904 3,149 755

Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,804 27,223 (3,419)Gains on sales of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,113 8,133 (7,020)Gains on foreign exchange transactions . . . . . . . . . . . . . . . . . . . . 2,545 1,591 954Gains on redemption of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,270 99 1,171Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,875 17,399 1,476

Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,794 26,826 (16,032)Gains on sales of stocks and other securities . . . . . . . . . . . . . . . 3,995 3,370 625Reversal of reserve for possible loan losses . . . . . . . . . . . . . . . . . 5,395 17,038 (11,643)Reversal of reserve for credit losses on off-balance-sheet instruments . . . . . . . . . . . . . . . . . . . . . . . . . . 295 419 (124)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,108 5,997 (4,889)

12

(2) Expenses

Total expenses increased by ¥23.5 billion (+36.8%) over the

same period last year, to ¥87.2 billion. This was mainly

caused by increases in interest expenses and other operating

expenses. Interest expenses rose by ¥12.2 billion (+41.6%),

to ¥41.6 billion, mainly due to the rise of interest rates and the

growth of foreign currency funding. Other operating expenses

rose by ¥12.2 billion, to ¥14.0 billion, mainly due to the increase

of losses on sales of bonds which includes the write-off of US

subprime mortgage loan related asset-backed CDOs and the

losses on sales of JGBs and overseas bonds.

General and administrative expenses were slightly down

¥0.3 billion (-1.1%) over the same period last year, to ¥26.0

billion, as we maintain a strict control on the costs while

making forward-looking investments in human resources and

IT-related infrastructure to gain profits in the future.

Other expenses were down ¥0.6 billion (-11.5%), to ¥4.7

billion, due to the decrease of losses incurred from write-off

of claims, etc.

(3) Net Income

As a result of the factors outlined above, income before

income taxes and minority interests was down ¥24.4 billion

(-45.9%) over the same period last year, to ¥28.8 billion.

Deferred tax benefit increased by ¥14.6 billion over the same

(Millions of Yen)

Sep. 30, 2007 Sep. 30, 2006(6 months) (6 months) Change

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,157 63,704 23,453

Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,578 29,368 12,210Interest on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,472 6,591 3,881Interest on debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,368 3,374 3,994Interest on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,741 3,689 1,052Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,995 15,714 3,281

Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759 885 (126)

Trading losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 — 72

Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,021 1,832 12,189Amortization of debenture issuance costs . . . . . . . . . . . . . . . . . . 186 118 68Losses on sales of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,424 863 4,561Losses on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758 — 1,758Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,650 850 5,800

General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 26,028 26,308 (280)

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,697 5,307 (610)Write-off of claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954 3,149 (2,195)Write-off of stocks and other securities . . . . . . . . . . . . . . . . . . . . 717 11 706Losses on sales of stocks and other securities . . . . . . . . . . . . . . — 99 (99)Losses on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . 127 345 (218)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,898 1,701 1,197

(Millions of Yen)

Sep. 30, 2007 Sep. 30, 2006(6 months) (6 months) Change

Income before income taxes and minority interests . . . . . . . . . . . . 28,841 53,287 (24,446)

Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,962) (158) (13,804)

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044 283 761Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,006) (442) (14,564)

Minority interests in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 91 (37)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,748 53,354 (10,606)

period last year, to ¥15.0 billion, due to the revision of the

estimation period for future taxable income from 1 year to 3

years, in accordance with the related accounting standards.

Net income decreased by ¥10.6 billion (-19.9%), to ¥42.7 billion.

13

3. Analysis of Financial Position

(1) Loans and bills discounted

The outstanding balance of loans and bills discounted

increased by ¥287.1 billion (+7.8%), from ¥3,684.6 billion as

of March 31, 2007 to ¥3,971.7 billion as of September 30,

2007. As for domestic loans, loans to finance and insurance

industries increased markedly. Offshore loans also significantly

increased due to the active loan operations executed by

foreign subsidiaries, Aozora Investment Management Limited

in London and Aozora Asia Pacific Finance Limited in Hong

Kong.

Risk-monitored loans on a consolidated basis in this fiscal

period slightly increased by ¥0.3 billion to ¥39.4 billion. Since

the ratio to loan balance still remains at the same low level as

the prior fiscal year-end and these risk-monitored loans are

very well secured and adequate reserves are taken, the impact

on the Bank’s financial conditions is considered minimal. The

breakdown of outstanding loans and bills discounted by

industry and outstanding risk-monitored loans and bills

discounted by industry are shown in the following tables.

Risk-Monitored Loans (Consolidated)(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007 Change

Risk-monitored loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,410 39,118 292

Loans to bankrupt companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,551 789 4,762Past due loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,026 29,738 (3,712)Loans overdue for three months or more . . . . . . . . . . . . . . . . . . . . . — — 0Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,832 8,590 (758)

Loan balance (end of period) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,971,671 3,684,601 287,070

Ratio to loan balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0% 1.1% (0)

Breakdown of Outstanding Loans and Bills Discounted by Type of Industries and Risk-Monitored Loansand Bills Discounted Outstanding by Type of Industries (Consolidated)

(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007

Loans and Risk-monitored Loans and Risk-monitoredbills discounted loans bills discounted loans

Loans by domestic offices (excluding Japan offshore market accounts) . . . . . . . . . . . . . . . . . 3,444,158 31,802 3,325,324 32,964

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331,336 2,398 335,933 4,300Agriculture, forestry & fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,616 — 5,208 —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,474 — 6,822 —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,708 26 57,610 63Utilities (Electricity, gas, heat supply & water) . . . . . . . . . . . . . . . . . . 49,368 — 50,020 12Information & communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,504 99 107,517 490Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,252 1,002 170,419 1,090Wholesale & retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,071 1,854 226,974 790Finance & insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606,540 222 528,132 —Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880,514 2,419 886,762 2,643Various services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,503 22,434 443,664 19,382Local government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,711 — 77,999 —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471,554 1,346 428,259 4,192

Loans by overseas offices and Japan offshore market accounts . . 527,512 7,607 359,277 6,154Financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527,512 7,607 359,277 6,154

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,971,671 39,410 3,684,601 39,188

14

(5.2%) represents securities with determinable market prices,

and thus the exposure to the market fluctuation risk should be

minimal.

The balance of other securities decreased ¥45.8 billion

(–5.9%). The Bank continuously invests in other securities –

mainly investments in domestic and overseas funds for which

higher profitability was expected, and the balance as of

September 30, 2007 was ¥732.5 billion.

(3) Deferred tax assets

The balance of deferred tax assets drastically increased by

¥15.0 billion, to ¥44.2 billion. Since the Bank has consistently

generated taxable income, effective from this interim period,

we calculate the amount of deferred tax assets on the basis

of an estimated taxable income for the subsequent 3 fiscal

years (previously for 1 year only), in accordance with the

related accounting standards. The proportion of deferred tax

assets to net assets was still only 5.4% as of September 30,

2007 at a low level, although increased from 3.7% as of March

31, 2007.

(4) Deposits, Debentures and Corporate bonds

The balance of deposits decreased in total by ¥193.0 billion

to ¥3,040.9 billion, although deposits from individual

customers, as a stable funding source, constantly increased

especially in the derivative-embedded time deposit, “Excellent

First.” The balance of debentures increased by ¥333.0 billion

to ¥1,783.5 billion, as a result of the sales to financial

institutions, etc.

(2) Securities

The balance of securities decreased by ¥267.3 billion

(–13.9%), from ¥1,918.9 billion as of March 31, 2007 to

¥1,651.6 billion as of September 30, 2007, mainly due to

the disposition of Japanese national government bonds in

response to an interest rise during a fiscal period.

The balance of Japanese stocks slightly decreased by ¥3.0

billion, to ¥35.6 billion. Only ¥1.9 billion out of ¥35.6 billion

Outstanding Balance of Securities Held (Consolidated)(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007 Change

Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883,492 1,101,908 (218,416)

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . 816,367 1,022,767 (206,400)Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 2,750 3,805 (1,055)Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,375 75,334 (10,959)

Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,619 38,647 (3,028)

Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732,516 778,339 (45,823)

Foreign securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 555,287 626,263 (70,976)Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,228 152,076 25,152

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,651,628 1,918,895 (267,267)

Deposits, Debentures and Bonds and Notes (Consolidated)(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007 Change

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,040,889 3,233,905 (193,016)

Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,726,661 2,873,999 (147,338)Liquid deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,981 338,041 (42,060)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,247 21,864 (3,617)

Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,783,492 1,450,525 332,967

Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,971 99,467 24,504Note: The total of deposits and time deposits include negotiable certificates of deposits (NCDs).

15

(5) Equity

The balance of total equity increased by ¥24.5 billion, to

¥817.0 billion. Retained earnings increased by ¥37.6 billion,

owing to ¥42.7 billion in net income. There were no changes

in capital stock and capital surplus. Net unrealized losses on

available-for-sale securities increased by ¥10.8 billion, due

to the drops in the prices of Japanese government bonds

and foreign currency-denominated debt securities including

the CDOs.

(6) Capital adequacy ratio (consolidated, domestic standards)

The consolidated BIS capital adequacy ratio as of September

30, 2007 was calculated pursuant to the new BIS regulations,

Basel II.

The balance of regulatory capital at the end of the fiscal

period increased by ¥49.1 billion, to ¥763.6 billion, due to both

an increase in Tier I capital and a decrease in capital deduction

items. The balance of risk-weighted assets also increased by

¥297.2 billion, to ¥4,845.7 billion, mainly driven by an increase

in balance-sheet exposure. Consequently, the consolidated

capital adequacy ratio in accordance with domestic standards

slightly increased by 0.05 percentage point, to 15.75%, which is

still high.

16

4. Consolidated Capital Adequacy Ratio (Domestic Standard)(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007

Tier I Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,781 419,781Non-cumulative perpetual preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,315 167,315

Newly issued stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,333 33,333Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384,086 346,439Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0Paid-in amount on treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Unappropriated profits to be distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5,196Net unrealized losses on available-for-sale securities . . . . . . . . . . . . . . . . . . . . . 17,534 6,774Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (245) 1,392Subscription rights to shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Minority interests in consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 695 732

Preferred stock issued by overseas special purpose companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Amount equal to goodwill derived from acquisitions . . . . . . . . . . . . . . . . . . . . . . — —Intangible assets derived from mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Amount equivalent to capital increased by securitization transactions . . . . . . . . — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (A) 820,115 789,707Step-up preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Tier II Forty-five percent of the difference between fair value and book value in respect of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —General reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,285 28,428Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Perpetual subordinated liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Subordinated term liabilities and subordinated term preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,285 28,428Tier II capital qualifying as capital . . . . . . . . . . . . . . . . . . . . . . . . . . (B) 30,285 28,428

Tier III Short-term subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Tier III capital qualifying as capital . . . . . . . . . . . . . . . . . . . . . . . . . . (C) — —

Items deducted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (D) 86,841 103,678

Regulatory capital (A) + (B) + (C) - (D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (E) 763,559 714,457

Risk-weighted Balance-sheet exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,183,982 3,951,048 assets Off-balance-sheet exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374,127 361,160

Credit risk asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (F) 4,558,110 4,312,208Market risk equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (G) 82,900 39,768Operational risk equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (H) 204,668 196,548(F) + (G) + (H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( I ) 4,845,679 4,548,525

Capital adequacy ratio (Domestic standard) x 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.75% 15.70.%

Tier I ratio (Domestic standard) x 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.92% 17.36%

Required capital total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193,827 181,941Notes: 1. The capital adequacy ratio is calculated using the formula stipulated in a ministerial notification based on Article 14-2 of the Banking Law. Aozora

uses the domestic standard applicable to Japanese banks without overseas branches or banking subsidiaries.The capital adequacy ratios are based on the FSA guidelines established to implement Basel II.

2. Items deducted (D) include the amount held at other financial institutions for their capital-raising purposes and the amount of our investments innon-consolidated subsidiaries and affiliated companies.

3. Methods used to calculate risk-weighted assets are as follows: credit risk asset uses the standardized approach; market risk equivalent uses theinternal models approach and the standardized approach; operational risk equivalent uses the basic indicator approach.

4. Amounts of required capital for each risk are as follows:(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007

Credit risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182,324 172,488Market risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,316 1,590Operational risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,186 7,861

(A)

( I )

(E)

( I )

17

Thousands ofU.S. Dollars

Millions of Yen (Note 1)

LIABILITIES AND EQUITY Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007

LIABILITIES:Deposits (Notes 12 and 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,040,889 ¥3,321,349 ¥3,233,905 $26,337,172Debentures (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,783,492 1,232,500 1,450,525 15,446,840Call money and bills sold (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . 197,440 329,442 313,213 1,710,031Payables under repurchase agreements (Note 12) . . . . . . . . . . . . . . 21,354 42,301 33,734 184,954Payables under securities lending transactions (Note 12) . . . . . . . . . 165,884 209,244 146,248 1,436,725Trading liabilities (Notes 4 and 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,310 76,327 64,506 487,709Borrowed money (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231,915 203,419 223,815 2,008,618Foreign exchanges (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 1 9Corporate bonds (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,971 99,463 99,467 1,073,719Other liabilities (Note 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,143 115,788 132,305 1,127,176Liability for employees’ retirement benefits . . . . . . . . . . . . . . . . . . . . 16,600 16,435 16,798 143,777Liability for directors’ retirement benefits . . . . . . . . . . . . . . . . . . . . . . 147 1,274Reserve for credit losses on off-balance-sheet instruments . . . . . . . 1,076 1,520 1,372 9,324Acceptances and guarantees (Note 10) . . . . . . . . . . . . . . . . . . . . . . 37,692 28,187 35,621 326,451

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,806,919 5,675,983 5,751,514 50,293,779

EQUITY:Capital stock (Note 16):

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252,465 147,745 252,465 2,186,606Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,315 272,036 167,315 1,449,123

Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,333 33,333 33,333 288,701Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384,055 318,254 346,410 3,326,304Net unrealized losses on available-for-sale securities . . . . . . . . . . . . (17,534) (7,395) (6,774) (151,870)Net deferred losses on derivatives under hedge accounting . . . . . . (3,061) (2,316) (2,378) (26,512)Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . (245) 530 1,392 (2,123)Treasury stock—at cost (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (0) (0) (10)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816,327 762,187 791,763 7,070,219Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679 625 717 5,883

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 817,006 762,812 792,480 7,076,102

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥6,623,926 ¥6,438,795 ¥6,543,994 $57,369,881See the accompanying notes to consolidated semiannual financial statements.

Consolidated Financial Statements

Consolidated Balance Sheets (Unaudited)Aozora Bank, Ltd. and Consolidated SubsidiariesAs of September 30, 2007 and 2006, and March 31, 2007

Thousands ofU.S. Dollars

Millions of Yen (Note 1)

ASSETS Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007

Cash and cash equivalents (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 25,937 ¥ 35,238 ¥ 38,194 $ 224,641Deposits with banks (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,804 70,619 94,238 786,457Call loans and bills bought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,692 230,707 178,826 1,608,287Receivables under securities borrowing transactions . . . . . . . . . . . . . . 282,443 453,638 281,914 2,446,242Monetary claims bought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,907 89,333 125,074 1,055,838Trading assets (Notes 4 and 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,091 74,644 67,519 710,994Money held in trust (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,877 10,215 9,213 85,550Securities (Notes 5 and 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,651,628 1,818,477 1,918,895 14,304,769Loans and bills discounted (Notes 7 and 12) . . . . . . . . . . . . . . . . . . . . 3,971,671 3,489,272 3,684,601 34,398,679Foreign exchanges (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,765 9,705 8,583 84,582Other assets (Note 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,782 138,521 109,881 1,236,639Premises and equipment (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,318 24,563 24,830 210,620Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,171 28,039 29,169 382,571Customers’ liabilities for acceptances and guarantees (Note 10) . . . . . 37,692 28,187 35,621 326,451Reserve for possible loan losses (Note 11) . . . . . . . . . . . . . . . . . . . . . . (56,857) (62,369) (62,571) (492,439)

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥6,623,926 ¥6,438,795 ¥6,543,994 $57,369,881

18

Consolidated Statements of Income (Unaudited)Aozora Bank, Ltd. and Consolidated SubsidiariesFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

Thousands ofU.S. Dollars

Millions of Yen (Note 1)

Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007(6 months) (6 months) (1 year) (6 months)

INCOME:Interest income:

Interest on loans and bills discounted. . . . . . . . . . . . . . . . . . . . . . ¥ 49,765 ¥34,838 ¥76,878 $ 431,015Interest and dividends on securities . . . . . . . . . . . . . . . . . . . . . . . 15,892 11,668 25,120 137,649Interest on deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . 1,660 1,177 2,685 14,386Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,195 3,389 5,738 19,017

Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,980 8,717 17,834 69,121Trading profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,904 3,149 5,452 33,816Other operating income (Note 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,804 27,223 54,030 206,168Other income (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,794 26,826 29,815 93,493

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,998 116,991 217,556 1,004,665

EXPENSES:Interest expenses:

Interest on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,472 6,591 15,475 90,700Interest on debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,368 3,374 8,367 63,821Interest on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,741 3,689 7,777 41,069Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,995 15,714 33,920 164,523

Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759 885 1,798 6,575Trading losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 630Other operating expenses (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . 14,021 1,832 6,004 121,437General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 26,028 26,308 52,795 225,428Other expenses (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,697 5,307 10,387 40,687

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,157 63,704 136,524 754,870

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,841 53,287 81,031 249,795

INCOME TAXES:Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044 283 910 9,043Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,006) (442) (1,572) (129,970)

Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,962) (158) (662) (120,927)

MINORITY INTERESTS IN NET INCOME . . . . . . . . . . . . . . . . . . . . . . 54 91 183 476

NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 42,748 ¥53,354 ¥81,510 $ 370,246

Yen U.S. Dollars (Note 1)

Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007(6 months) (6 months) (1 year) (6 months)

PER SHARE INFORMATION:Basic net income per share of common stock (Note 23) . . . . . . . . . ¥25.90 ¥37.64 ¥52.59 $0.22Diluted net income per share of common stock (Note 23) . . . . . . . . 20.20 25.22 38.52 0.17Cash dividends applicable to the period:

Class A Series 4 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . 10.00Class C Series 5 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . 7.44Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.78

See the accompanying notes to consolidated semiannual financial statements.

19

Consolidated Statements of Changes in Equity (Unaudited)Aozora Bank, Ltd. and Consolidated SubsidiariesFor the six-month period ended September 30, 2007, and the year ended March 31, 2007

Thousands

OutstandingNumber of Shares Millions of Yen

Net DeferredNet Unrealized Losses on Foreign

Losses on Derivatives Currency TreasuryCommon Preferred Common Preferred Capital Retained Available-for- under Hedge Translation Stock— Minority Total

Stock Stock Stock Stock Surplus Earnings sale Securities Accounting Adjustments at cost Total Interests Equity

BALANCE, April 1, 2006 . . . . . . . . . . . 2,834,870 914,811 ¥147,745 ¥ 272,036 ¥33,333 ¥270,890 ¥ (683) ¥ 64 ¥(0) ¥723,386 ¥723,386Reclassified balances as of March 31, 2006 (Note 2.o) . . . . . ¥658 658Net income . . . . . . . . . . . . . . . . . . 81,510 81,510 81,510Cash dividends . . . . . . . . . . . . . . . (5,987) (5,987) (5,987)Bonus paid to directors and corporate auditors of consolidated subsidiaries . . . . . . (3) (3) (3)Reverse stock split . . . . . . . . . . . . (1,417,435) (457,405)Conversion of preferred stock into common stock . . . . . . . . . . . 232,712 (174,534) 104,720 (104,720)Purchase of treasury stock . . . . . . (1) (0) (0) (0)Net change in the period . . . . . . . (6,090) ¥(2,378) 1,327 (7,141) 58 (7,082)

BALANCE, MARCH 31, 2007 . . . . . . . 1,650,145 282,871 ¥252,465 ¥ 167,315 ¥33,333 ¥346,410 ¥ (6,774) ¥(2,378) ¥ 1,392 ¥(0) ¥791,763 ¥717 ¥792,480Cash dividends . . . . . . . . . . . . . . . (5,103) (5,103) (5,103)Net income . . . . . . . . . . . . . . . . . . 42,748 42,748 42,748Purchase of treasury stock . . . . . . (1) (0) (0) (0)Net change in the period . . . . . . . (10,760) (682) (1,637) (13,080) (38) (13,118)

BALANCE, SEPTEMBER 30, 2007 . . . 1,650,144 282,871 ¥252,465 ¥ 167,315 ¥33,333 ¥384,055 ¥(17,534) ¥(3,061) ¥ (245) ¥(1) ¥816,327 ¥679 ¥817,006

Thousands of U.S. Dollars (Note 1)

Net DeferredNet Unrealized Losses on Foreign

Losses on Derivatives Currency TreasuryCommon Preferred Capital Retained Available-for- under Hedge Translation Stock— Minority Total

Stock Stock Surplus Earnings sale Securities Accounting Adjustments at cost Total Interests Equity

BALANCE, MARCH 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,186,606 $1,449,123 $288,701 $3,000,259 $ (58,673) $(20,604) $ 12,060 $ (5) $6,857,467 $6,212 $6,863,679Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370,246 370,246 370,246Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,201) (44,201) (44,201)Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) (5) (5)Net change in the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,197) (5,908) (14,183) (113,288) (329) (113,617)

BALANCE, SEPTEMBER 30, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . $2,186,606 $1,449,123 $288,701 $3,326,304 $(151,870) $(26,512) $ (2,123) $(10) $7,070,219 $5,883 $7,076,102

See the accompanying notes to consolidated semiannual financial statements.

20

Consolidated Statements of Cash Flows (Unaudited)Aozora Bank, Ltd. and Consolidated SubsidiariesFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

Thousands ofU.S. Dollars

Millions of Yen (Note 1)

Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007(6 months) (6 months) (1 year) (6 months)

CASH FLOWS FROM OPERATING ACTIVITIES:Income before income taxes and minority interests . . . . . . . . . . . . . ¥ 28,841 ¥ 53,287 ¥ 81,031 $ 249,795Adjustments for:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,348 784 3,843 20,342Net change in reserve for possible loan losses . . . . . . . . . . . . . . . (5,687) (19,316) (19,115) (49,255)Net change in liability for employees’ retirement benefits . . . . . . . (197) 103 466 (1,711)Net change in reserve for credit losses on off-balance-sheet instruments . . . . . . . . . . . . . . . . . . . . . . . . . . (295) (419) (568) (2,559)Interest income (accrual basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . (69,514) (51,074) (110,423) (602,067)Interest expenses (accrual basis) . . . . . . . . . . . . . . . . . . . . . . . . . 41,578 29,368 65,539 360,112Net (gains) losses on securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,401 (10,330) (16,173) 38,119Net gains on money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . (153) (99) (274) (1,329)Net foreign exchange (gains) losses . . . . . . . . . . . . . . . . . . . . . . . 5,023 (6,038) (11,376) 43,505Net losses on disposal of premises and equipment and others . . 127 345 1,384 1,104Net change in trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,571) 19,241 26,366 (126,206)Net change in trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,195) (28,581) (40,402) (70,980)Net change in loans and bills discounted . . . . . . . . . . . . . . . . . . . (291,262) (352,539) (547,168) (2,522,629)Net change in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (193,015) 125,042 37,598 (1,671,709)Net change in debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332,966 171,644 390,194 2,883,826Net change in borrowed money (excluding subordinated debt) . . . 8,100 118,004 138,629 70,154Net change in deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . 3,348 (9,157) (32,696) 29,001Net change in call loans and bills bought and others . . . . . . . . . . (3,698) (16,190) (50) (32,032)Net change in receivables under securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (528) (153,268) 18,455 (4,579)Net change in call money and bills sold, payables under repurchase agreements and others . . . . . . . . . . . . . . . . . (128,153) (62,567) (87,363) (1,109,940)Net change in payables under securities lending transactions . . . 19,636 2,589 (60,406) 170,070Net change in foreign exchanges (asset) . . . . . . . . . . . . . . . . . . . (1,182) 1,243 2,366 (10,241)Net change in foreign exchanges (liability) . . . . . . . . . . . . . . . . . . (0) 0 (0) (0)Net change in corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 23,203 99,463 99,467 200,970Interest and dividends received (cash basis) . . . . . . . . . . . . . . . . . 67,980 49,112 104,904 588,781Interest paid (cash basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43,461) (26,755) (59,327) (376,417)Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (39,563) (24,904) 18,162 (342,656)

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (261,924) (91,010) 3,066 (2,268,531)Income taxes—paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (422) (1,341) (1,068) (3,657)

Net cash provided by (used in) operating activities . . . . . . . . . (262,346) (92,351) 1,997 (2,272,188)CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,716,502) (2,765,015) (5,041,397) (14,866,646)Proceeds from sales of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 691,976 426,610 866,634 5,993,210Proceeds from maturities of securities . . . . . . . . . . . . . . . . . . . . . . . 1,281,387 2,173,820 3,926,389 11,098,108Increase in money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,175) (27,197) (37,788) (79,473)Decrease in money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,665 23,387 35,154 75,052Purchases of premises and equipment and others . . . . . . . . . . . . . . (2,760) (2,440) (12,498) (23,911)Proceeds from sales of premises and equipment and others . . . . . . 397 8 1,284 3,441

Net cash provided by (used in) investing activities . . . . . . . . . . 253,986 (170,826) (262,219) 2,199,781

CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of subordinated bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300 11,259Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,103) (5,987) (5,987) (44,201)Dividends paid to minority stockholders of consolidated subsidiaries . . (92) (123) (123) (805)Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0) (0) (4)

Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . (3,896) (6,110) (6,111) (33,751)

NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . (12,257) (269,289) (266,333) (106,158)CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . . 38,194 304,527 304,527 330,799

CASH AND CASH EQUIVALENTS, END OF PERIOD (Note 3) . . . . . ¥ 25,937 ¥ 35,238 ¥ 38,194 $ 224,641See the accompanying notes to consolidated semiannual financial statements.

21

1. Basis of Presenting Consolidated Financial Statements

Notes to Consolidated Semiannual Financial Statements (Unaudited)Aozora Bank, Ltd. and Consolidated SubsidiariesFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

The accompanying consolidated semiannual financial

statements (including semiannual and annual consolidated

financial statements, hereafter) of Aozora Bank, Ltd. (the

“Bank”) and consolidated subsidiaries (together, the “Group”)

have been prepared in accordance with the provisions set

forth in the Japanese Financial Instruments and Exchange

Law (or, prior to September 30, 2007, the Japanese Securities

and Exchange Law), the Banking Law of Japan and those

related accounting regulations, and in conformity with

accounting principles generally accepted in Japan, which are

different in certain respects as to application and disclosure

requirements from International Financial Reporting Standards.

On December 27, 2005, the Accounting Standards Board

of Japan (the “ASBJ”) published a new accounting standard

for the statement of changes in equity, which is effective for

fiscal years ending on or after May 1, 2006. The consolidated

statement of stockholders’ equity, which was previously

voluntarily prepared in line with international accounting

practices, was required under generally accepted accounting

principles in Japan and was renamed “the consolidated

statement of changes in equity.”

In preparing these consolidated semiannual financial

statements, certain reclassifications and rearrangements

have been made to the consolidated semiannual financial

statements issued domestically in order to present them in

a form which is more familiar to readers outside Japan.

The consolidated semiannual financial statements are

stated in Japanese yen, the currency of the country in which

the Bank is incorporated and operates. Japanese yen figures

of less than a million yen are rounded down to the nearest

million yen, except for per share data. As a result, the totals

do not necessarily equal the sum of the individual amounts.

The translation of Japanese yen amounts into U.S. dollar

amounts is included solely for the convenience of readers

outside Japan and has been made at the rate of ¥115.46 to

$1.00, the approximate rate of exchange at September 28,

2007. Such translations should not be construed as

representations that the Japanese yen amounts could be

converted into U.S. dollars at that or any other rate.

The Bank completed a public offering of its common

shares and became listed again on the First Section of the

Tokyo Stock Exchange on November 14, 2006.

2. Summary of Significant Accounting Policiesa. Use of Estimates—The preparation of consolidated

semiannual financial statements in conformity with generally

accepted accounting principles requires management to

make estimates and assumptions that affect the reported

amounts of assets and liabilities, disclosures of contingent

assets and liabilities at the date of the consolidated

semiannual financial statements and the reported amounts

of revenues and expenses during the reporting period.

Actual results could differ from those estimates. Material

estimates that are particularly susceptible to significant

change in the near term include, but are not limited to, those

that are related to the determination of the reserve for

possible loan losses, deferred tax assets, and the valuation

of financial instruments.

b. Consolidation—The consolidated semiannual financial

statements include the accounts of the Bank and its significant

subsidiaries. The number of consolidated subsidiaries was

16 as of September 30, 2007, 14 as of March 31, 2007 and

10 as of September 30, 2006, respectively.

In the six-month period ended September 30, 2007,

Acorn holdings and Acorn One were newly established and

included in the scope of consolidation.

In the second half of the year ended March 31, 2007,

AZURE Funding North America II, Aozora GMAC Investment

Limited and Aozora GMAC Investments LLC were newly

established, and Aozora GMAC Investment, Inc. was acquired.

These entities were included in the scope of consolidation

for the year ended March 31, 2007.

In the six-month period ended September 30, 2006, Azure

Funding Europe S.A. and Aozora Securities Co., Ltd. were

newly established and included in the scope of consolidation.

Aozora Business Service Co., Ltd., which was previously a

consolidated subsidiary until the year ended March 31,

2006, was merged with another consolidated subsidiary,

Aozora Information Systems Co., Ltd.

Under the control or influence concept, those companies

in which the Bank, directly or indirectly, is able to exercise

control over finance and operations should be fully

consolidated, and those companies over which the Group

has the ability to exercise significant influence should be

accounted for by the equity method.

Practical Issues Task Force No. 20, “Practical Solution on

Application of Control Criteria and Influence Criteria to

Investment Associations,” issued by the ASBJ, provides

additional guidance on how the control and influence concept

22

should be practically applied to the consolidation scope of

investment vehicles such as limited partnerships, Tokumei

Kumiai (a silent partnership under the Commercial Code of

Japan) in order to prevent these investment vehicles from

being intentionally excluded from consolidation.

The consolidated financial statements do not include the

accounts of certain subsidiaries such as NCM Investments

Corporation, because the combined total assets, total income,

net income and retained earnings of such subsidiaries would

not have a material effect on the accompanying consolidated

semiannual financial statements.

Investments in unconsolidated subsidiaries and affiliated

companies such as Vietnam International Leasing, Co., Ltd.

are generally stated at cost. If the equity method of

accounting had been applied to the investments in these

companies, the effect on the accompanying consolidated

semiannual financial statements would not be material.

The difference between the cost of an acquisition and the

fair value of the net assets of the acquired subsidiaries at the

date of acquisition is charged to income when incurred.

All significant inter-company balances and transactions are

eliminated in consolidation. All material unrealized profits

resulting from transactions within the Group are also eliminated.

The two special purpose entities (SPEs) are not regarded

as subsidiaries pursuant to Article 8 Paragraph 7 of the

Financial Statements Regulations for Terminology, Forms

and Preparation of Financial Statements. Accordingly, these

SPEs are not included in the scope of consolidation. Details

of those SPEs are not disclosed in the notes of the

semiannual financial statements due to their immateriality.

“Implementation Guidance on Disclosures about Certain

Special Purpose Entities” (ASBJ Guidance No. 15, issued on

March 29, 2007) is effective from the fiscal year beginning on

or after April 1, 2007, and the Group has applied the guidance

from this interim period.

c. Cash and Cash Equivalents—Cash and cash equivalents

consist of cash on hand and due from the Bank of Japan.

d. Trading Assets/Liabilities—Transactions for trading

purposes (for the purpose of seeking to capture gains arising

from short-term changes in interest rates, currency exchange

rates or market prices of securities and other market-related

indices or arbitrage opportunities) are included in “Trading

assets” or “Trading liabilities,” as appropriate, on a trade

date basis. Trading assets and liabilities are stated at fair

value. Profits and losses on transactions for trading purposes

are shown as “Trading profits” and “Trading losses,” as

appropriate, on a trade date basis.

e. Securities—All securities are classified and accounted

for, depending on management’s intent, as follows:

(1) trading securities which are held for the purpose of earning

capital gains in the near term (other than securities booked

in trading accounts) are stated at fair value, and the related

unrealized gains and losses are recognized in the consolidated

statement of income, (2) held-to-maturity debt securities

which are expected to be held to maturity with the positive

intent and ability to hold them to maturity are stated at

amortized cost and (3) available-for-sale securities are reported

at fair value, with unrealized gains and losses, net of applicable

taxes, reported in a separate component of equity. The cost

of sale of these securities is determined mainly by the

moving-average method.

Non-marketable available-for-sale securities are stated at

cost. The cost of sale of these securities is determined by

the moving-average method.

Aozora GMAC Investments LLC, a consolidated subsidiary

operating in the United States, accounts for its investment in

a limited liability company in a manner similar to the equity

method of accounting.

For other than temporary declines in fair value, the cost of

securities is reduced to net realizable value and the impairment

losses are recognized by a charge to income.

Investment funds, principally hedge funds, which the Group

holds for the purpose of earning capital gains, are classified

as trading securities if the investment is deemed to be

redeemable with reasonable frequency sufficient to provide

an investor with liquidity and the fair value of the investment

is readily determinable. Funds which do not have sufficient

liquidity are classified as available-for-sale securities.

The Group records its proportionate shares of the net

assets in investment limited partnerships and associations

under the Civil Code of Japan or Tokumei Kumiai which are

similar to investment limited partnerships, and recognizes its

share of profits or losses in a manner similar to the equity

method of accounting. The Group records such interests in

“Securities.”

Securities included in money held in trust on behalf of the

Bank are accounted for in the same manner as the securities

mentioned above.

f. Derivatives and Hedging Activities—Derivative financial

instruments (other than derivatives booked in trading

accounts) are classified and accounted for as follows:

(1) all derivatives other than those used for hedging purposes

are recognized as either assets or liabilities and measured

at fair value, with gains or losses recognized currently in

the consolidated statements of income.

23

(2) derivatives used for hedging purposes, if they meet

certain hedging criteria, including high correlation and

effectiveness between the hedging instruments and the

hedged items, are recognized as either assets or liabilities

and measured at fair value. Gains or losses on derivatives

used for hedging purpose are primarily deferred over the

terms of the hedged items and are charged to income

when gains and losses on the hedged items are

recognized.

Hedges of Interest Rate Risk

The Bank applies deferral hedge accounting to hedges of

interest rate risk associated with financial assets and liabilities

in accordance with the Industry Audit Committee Report

No. 24, “Accounting and Auditing Treatments on the

Application of Accounting Standards for Financial Instruments

in the Banking Industry,” issued by the Japanese Institute of

Certified Public Accountants (the “JICPA”) (the “JICPA

Industry Audit Committee Report No. 24”).

Under the JICPA Industry Audit Committee Report No. 24,

hedges to offset changes in fair value of fixed rate instruments

(such as loans or deposits) (“fair value hedges”) are applied

by grouping hedging instruments and hedged items by their

maturities. The assessment of hedge effectiveness is generally

based on the consideration of interest rate indices affecting

the respective fair values of the group of hedging instruments

and hedged items.

In addition, the Bank used interest rate swaps as the

hedging instruments for hedging interest rate risk for certain

fixed interest rate loans in the six-month period ended

September 30, 2006 and the year ended March 31, 2007.

Since the critical terms for hedging instruments and hedged

items were almost the same, this hedge was deemed to

have hedge effectiveness.

Hedges of Foreign Currency Risk

The Bank applies deferral hedge accounting to hedges of

foreign currency risk associated with foreign currency-

denominated financial assets and liabilities in accordance

with the JICPA Industry Audit Committee Report No. 25,

“Accounting and Auditing Treatments for Foreign Currency

Transactions in the Banking Industry” (the “JICPA Industry

Audit Committee Report No. 25”).

In accordance with the JICPA Industry Audit Committee

Report No. 25, the Bank designates certain currency swaps

and foreign exchange swaps for the purpose of funding

foreign currencies as hedges for the exposure to changes

in foreign exchange rates associated with foreign currency-

denominated assets or liabilities when the foreign currency

positions on the hedged assets or liabilities are expected to

exceed the corresponding foreign currency positions on the

hedging instruments. Hedge effectiveness is reviewed by

comparing the total currency position of hedged items with

that of hedging instruments by currency.

For hedging the foreign currency exposure of foreign

currency-denominated available-for-sale securities (other

than debt securities), which were designated in advance, fair

value hedge accounting is adopted on a portfolio basis when

the cost of the hedged securities is covered with offsetting

liabilities denominated in the same foreign currencies as the

hedged securities.

Inter- and Intra-company Derivative Transactions

For inter- and intra-company derivative transactions for

hedging purpose (“internal derivatives”), including currency

and interest rate swaps, the Bank currently recognizes gains

and losses on internal derivatives or defers them as assets

or liabilities without elimination in accordance with the JICPA

Industry Audit Committee Reports No. 24 and No. 25, which

permit a bank to retain the gains and losses on internal

derivatives in its financial statements without elimination if

the bank establishes and follows the strict hedging criteria

by entering into mirror-image offsetting transactions with

external third parties.

g. Premises and Equipment—Premises and equipment are

stated at cost. Depreciation of premises and equipment of

the Group is computed by the declining-balance method at

rates based on the estimated useful lives of the assets, while

the straight-line method is applied to buildings of the Bank.

The range of useful lives is principally from 15 to 50 years

for buildings and from 5 to 15 years for other premises and

equipment.

Effective from the six-month period ended September 30,

2007, depreciation expenses for premises and equipment

obtained after April 1, 2007, were calculated in accordance

with the method set forth in a 2007 tax law revision which

permit a company to fully depreciate the entire cost of

premises and equipment without deducting those salvage

value. Formerly, the tax law required the depreciable amount

be the cost of premises and equipment less salvage value.

The effect of this change is not material.

The salvage value of fully depreciated premises and

equipment obtained prior to March 31, 2007, is depreciated

over 5 years using the straight-line method in accordance

with the provisions of the 2007 tax law revision. The effect of

this change is not material.

24

h. Long-lived Assets—The Group reviews its long-lived

assets for impairment whenever events or changes in

circumstance indicate the carrying amount of an asset or

asset group may not be recoverable. An impairment loss

would be recognized if the carrying amount of an asset or

asset group exceeds the sum of the undiscounted future

cash flows expected to result from the continued use and

eventual disposition of the asset or asset group. The

impairment loss would be measured as the amount by which

the carrying amount of the asset exceeds its recoverable

amount, which is the higher of the discounted cash flows

from the continued use and eventual disposition of the asset

or asset group or the net selling price at disposition.

As a result of the above review, the Group recognized no

impairment loss for the six-month periods ended September

30, 2007 and 2006 and the year ended March 31, 2007.

i. Software—Costs of software developed or obtained for

internal use are depreciated over the estimated useful lives

of the software (principally five years).

j. Deferred Charges—Until the year ended March 31, 2006,

debenture issuance expenses were deferred and amortized

by the straight-line method over the shorter of the terms of

the debentures or the three-year period stipulated in the

Enforcement Regulations of the Commercial Code of Japan.

Effective April 1, 2006, debenture issuance expenses for

debentures issued after April 1, 2006 are deferred and

amortized by the straight-line method over the terms of the

debentures based on the new accounting treatment of

deferred charges due to the implementation of certain

enforcement regulations of the Company Law. The effect of

the adoption of this revised treatment was not material for

the six-month period ended September 30, 2006 and the

year ended March 31, 2007.

Corporate bonds issuance expenses are deferred and

amortized by the straight-line method over the terms of the

corporate bonds.

Until the year ended March 31, 2006, discounts on

debentures were amortized by the straight-line method over

the terms of the debentures. The amounts of debentures

were presented at par value in the consolidated balance

sheets. Effective April 1, 2006, the amount of debentures are

presented at amortized cost based on the revised accounting

standard of financial instruments due to the implementation

of certain enforcement regulations of the Company Law.

Accordingly, discounts on debentures are not presented as

assets because such amounts are deducted from the par

value of debentures in the consolidated balance sheet. As a

result of the adoption of this revised standard, the balance of

deferred charges included in “Other assets” and debentures

decreased by ¥20 million and ¥39 million as of September

30, 2006 and March 31, 2007, respectively.

k. Write-off of Loans and Reserve for Possible Loan

Losses—Loans to borrowers who are assessed as “legally

bankrupt” (in the process of legal proceedings for bankruptcy,

special liquidation, etc.) or “de facto bankrupt” (in serious

financial difficulties and are not deemed to be capable of

restructuring) under the Bank’s self-assessment guidelines

are written off to the amounts expected to be collected

through the disposal of collateral or execution of guarantees.

The written-off amounts deemed to be uncollectible were

¥7,595 million ($65,789 thousand), ¥8,542 million and

¥9,743 million at September 30, March 31, 2007 and

September 30, 2006, respectively.

For loans to borrowers who are assessed as “in danger of

bankruptcy” (not yet bankrupt but are in financial difficulties

and are very likely to go bankrupt in the foreseeable future),

a specific reserve is provided for the amount considered to

be necessary based on an overall solvency assessment of

the borrowers and expected collectible amounts through the

disposal of collateral or execution of guarantees.

For other loans, the Bank provides a general reserve by

applying the estimated loan-loss ratio determined based on

the historical experience over a defined period. A reserve for

loans to restructuring countries is provided for the amount of

expected losses based on an assessment of political and

economic condition in their respective countries.

As to the average remaining period of loans mainly used in

calculating the estimated loan-loss ratio for general reserve,

the Bank used the average contractual term until the year

ended March 31, 2006. Effective for the year ended March

31, 2007, the Bank has changed the method for calculating

the average remaining period of loans to take into account

the scheduled repayments in order to estimate the average

remaining period of loans more precisely. This change de-

creased the reserve for possible loan losses and increased

income before income taxes and minority interests by

¥11,224 million and ¥9,889 million for the six-month period

ended September 30, 2006 and the year ended March 31,

2007, respectively.

All loans are monitored in line with the internal rating rules

and self-assessment standards. Operating divisions and

branches assign internal credit ratings of debtors in accordance

with ‘borrower categories’ and these ratings are then approved

by the Credit Divisions. The Credit Review Division, which is

independent of operating divisions and branches, examines

the credit risk management, including the appropriateness of

the internal credit ratings. The Credit Review Division conducts

this process at the end of the six-month period ended

September 30, 2007 on a sampling basis.

25

Based upon the borrower categories determined by the

aforementioned process as of the balance sheet date,

operating divisions and branches compute write-offs and

reserves, and the Credit Risk Management Division and the

Credit Review Division crosscheck and verify the figures.

The consolidated subsidiaries calculate their general

reserves by applying the appropriate historical loan-loss ratio.

For doubtful loans and loans to borrowers in bankruptcy and

reorganization, consolidated subsidiaries provide a specific

reserve based on an assessment of individual loans.

l. Liability for Employees’ Retirement Benefits—The Group

accounts for the liability for employees’ retirement benefits

based on the projected benefit obligations and plan assets

at the balance sheet date. Prior service cost is amortized

using the straight-line method over the employees’ average

remaining service period at incurrence. Net actuarial gain

and loss is amortized using the straight-line method over a

period within the employees’ average remaining service

period commencing from the next fiscal year after incurrence.

m. Liability for Directors’ Retirement Benefits—Liability

for directors’ retirement benefits is recorded as the amount

that would be required if all directors and corporate auditors

retired at each balance sheet date. Formerly, the liability for

directors’ retirement benefits was expensed when they were

actually paid. However, effective from the period ended

September 30, 2007, this reserve is provided as described

above in accordance with the “Treatment for Auditing of

Reserve under Special Taxation Measures Law, Reserve

under Special Laws and Reserve for Retirement Benefits to

Directors and Corporate Auditors” (JICPA Audit and

Assurance Practice Committee Report No.42) of April 13,

2007. As a result, income before income taxes and minority

interests decreased by ¥147 miilion ($1,274 thousand).

n. Reserve for Credit Losses on Off-balance-sheet

Instruments—A reserve for credit losses on off-balance-sheet

instruments is provided for credit losses on commitments to

extend loans and other off-balance-sheet financial instruments

based on an estimated loss ratio or individually estimated

loss amount determined by the same methodology used in

determining the amount of reserve for possible loan losses.

o. Presentation of Equity—On December 9, 2005, the

ASBJ published a new accounting standard for presentation

of equity. Under this accounting standard, certain items

which were previously presented as assets or liabilities or as

a line item separate from stockholders’ equity are now

presented as components of equity. Such items include

minority interests and any deferred gain or loss on derivatives

under hedge accounting. This standard is effective for fiscal

years ending on or after May 1, 2006. The consolidated

balance sheets as of September 30, 2007 and 2006, and

March 31, 2007 are presented in line with this new standard.

p. Lease Transactions—All leases of the Bank and its

domestic consolidated subsidiaries are accounted for as

operating leases. Under Japanese accounting standards for

leases, finance leases that are deemed to transfer ownership

of the leased property to the lessees are to be capitalized,

while other finance leases are permitted to be accounted for

as operating lease transactions if certain “as if capitalized”

information is disclosed in the notes to the consolidated

semiannual financial statements.

q. Income Taxes—Deferred income taxes are recorded to

reflect expected future consequences of temporary

differences between assets and liabilities recognized for

financial reporting purposes and such amounts recognized

for tax purposes. These deferred taxes are measured by

applying currently enacted tax rates to the temporary

differences. The Bank assesses the realizability of deferred

tax assets based on consideration of the available evidence,

including future taxable income, future reversal of existing

temporary differences and tax planning strategies. The Bank

reduces the carrying amount of a deferred tax asset to the

extent that it is not probable that sufficient taxable income

will be available to allow the benefit of part or all of that

deferred tax asset to be realized. Any such reduction may be

reversed to the extent that it becomes probable that sufficient

taxable income will be available and warrant the realization of

tax benefits.

The time horizon for the projection of possible future

taxable income to estimate deferred tax assets was extended

from one year to three years in the six-month period ended

September 30, 2007. This is due to the fact that the Bank

has taxable income due to stable business results and is

more likely to achieve the targets set forth in the “Business

Revitalization Plan,” revised in August 2007.

r. Foreign Currency Items—Assets and liabilities

denominated in foreign currencies held by the Bank are

translated into Japanese yen at the exchange rates prevailing

at the balance sheet date except for investments in equity

securities of unconsolidated subsidiaries or affiliated

companies, which are translated at historical rates.

Assets and liabilities denominated in foreign currencies,

held by consolidated subsidiaries are translated into Japanese

yen at the exchange rates as of the consolidated balance

sheet date, while equity accounts are translated at historical

rates. Differences arising from such translations are shown

26

4. Trading Assets and LiabilitiesTrading assets and liabilities as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Trading assets:

Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 0 ¥ 1 $ 7

Derivatives of securities held to hedge trading transactions . . . . . . . . . . 23 3 201

Derivatives of trading transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,067 74,639 710,786

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥82,091 ¥74,644 $710,994

Trading liabilities:

Derivatives of securities held to hedge trading transactions . . . . . . . . . . ¥ 10 ¥ 27 $ 95

Derivatives of trading transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,299 76,299 487,614

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥56,310 ¥76,327 $487,709

3. Cash and Cash EquivalentsCash and cash equivalents as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Cash on hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 9,662 ¥12,290 $ 83,690

Due from the Bank of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,274 22,947 140,951

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥25,937 ¥35,238 $224,641

as “Foreign currency translation adjustments” as a separate

component of equity.

Prior to April 1, 2007, the revenue and expenses of

consolidated foreign subsidiaries was translated into Japa-

nese yen at the current rate at the consolidated balance

sheet dates. However, effective from the six-month period

ended September 30, 2007, such amounts are translated at

the average rate over the period.

This change was made due to the fact that the materiality

of consolidated foreign subsidiaries was increasing as well

as to reflect more accurately the revenue and expenses

throughout the period of the consolidated semiannual

financial statements. As a result, income before income

taxes and minority interests increased by ¥424 million

($3,681 thousand) for the six-month period ended

September 30, 2007.

s. Dividends—Payments of dividends are accounted for as

appropriations of retained earnings. Cash dividends charged

to retained earnings are those actually paid during the year.

t. Per Share Information—Basic net income per share is

computed by dividing net income available to common

stockholders by the weighted-average number of shares of

common stock outstanding for the period, retroactively

adjusted for stock splits or reverse stock splits.

Diluted net income per share reflects the potential dilution

that would occur if securities were exercised or converted

into common stock, also retroactively adjusted for stock

splits or reverse stock splits. Diluted net income per share of

common stock assumes full conversion of the preferred stock

at the beginning of the year with an applicable adjustment

for related dividends to preferred stock.

Cash dividends per share presented in the accompanying

consolidated statements of income are dividends applicable

to the respective years including dividends to be paid after

the end of the current period.

27

5. SecuritiesCertain amounts shown in the following tables include beneficiary interests in loan trusts classified as “Monetary claims bought” in

addition to “Securities” stated in the consolidated balance sheets.

Securities as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 816,367 ¥ 978,830 $ 7,070,563

Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,750 3,455 23,818

Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,375 69,274 557,556

Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,619 39,524 308,503

Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292,088 419,023 2,529,779

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,427 308,369 3,814,550

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,651,628 ¥1,818,477 $14,304,769

As of September 30, 2007, and 2006, securities included equity investments in unconsolidated subsidiaries and affiliated

companies that amounted to ¥13,340 million ($115,542 thousand) and ¥16,938 million respectively.

As of September 30, 2007, the Bank extended guarantees of ¥3,264 million ($28,275 thousand) to certain Japanese corporate

bonds issued in private placements.

The carrying amounts and aggregate fair values of securities as of September 30, 2007, were as follows:

Millions of Yen

Unrealized Unrealized FairCost Gains Losses Value

Available-for-sale:

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 817,719 ¥ 209 ¥ 5,089 ¥ 812,839

Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,358 12 15 2,355

Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 2 0 565

Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,554 420 115 1,859

Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273,540 383 12,013 261,911

Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,001 3,577 4,907 147,671

Held-to-maturity:

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 3,527 1 0 3,528

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,248,266 ¥4,607 ¥22,141 ¥1,230,732

* As for investments in partnerships classified as securities in the consolidated semiannual balance sheets, the amounts of marketable available-for-salesecurities attributable to our interests in the partnerships are included in “Other.”

Thousands of U.S. Dollars

Unrealized Unrealized FairCost Gains Losses Value

Available-for-sale:

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,082,272 $ 1,816 $ 44,078 $ 7,040,010

Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,430 108 137 20,401

Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,889 17 7 4,899

Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,462 3,642 998 16,106

Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,369,137 3,324 104,046 2,268,415

Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,290,500 30,988 42,500 1,278,988

Held-to-maturity:

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 30,553 11 0 30,564

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,811,243 $39,906 $191,766 $10,659,383

* As for investments in partnerships classified as securities in the consolidated semiannual balance sheets, the amounts of marketable available-for-salesecurities attributable to our interests in the partnerships are included in “Other.”

28

Securities whose fair value was not readily determinable as of September 30, 2007 and 2006, were mainly as follows:

Carrying Amount

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Investments in unconsolidated subsidiaries and affiliates . . . . . . . . . . . . . . ¥ 13,340 ¥ 16,938 $ 115,542

Available-for-sale:

Japanese unlisted bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,204 67,098 556,073

Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,696 36,314 291,845

Beneficial interests in loan trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,813 7,554 258,212

Investments in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,866 46,060 700,385

Foreign securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,013 93,795 840,238

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4,560 96

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥318,945 ¥272,323 $2,762,391

The carrying amounts and aggregate fair values of securities as of September 30, 2006, were as follows:

Millions of Yen

Unrealized Unrealized FairCost Gains Losses Value

Available-for-sale:

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 983,584 ¥ 73 ¥ 4,857 ¥ 978,800

Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,037 20 28 3,029

Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,598 5 2 2,601

Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,798 1,369 6 3,145

Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340,790 61 6,030 334,821

Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,785 3,025 1,025 89,784

Held-to-maturity:

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 29 0 29

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,419,609 ¥4,556 ¥11,951 ¥1,412,214

* As for investments in partnerships classified as securities in the consolidated semiannual balance sheets, the amounts of marketable available-for-salesecurities attributable to our interests in the partnerships are included in “Other.”

Individual marketable securities are written down when a

substantial decline in fair value of such securities is deemed

to be other than temporary. A decline in fair value is

determined to be substantial and other than temporary when

the fair value declines by 30% or more compared to the

acquisition cost, unless there is strong evidence that the fair

value will recover quickly and substantially from the decline.

For the period ended September 30, 2007, the Bank wrote

off marketable securities in this period to the amount of

¥4,638 million.

For the period ended September 30, 2006, no impairment

losses were recorded with respect to marketable securities.

Securities received under unsecured lending agreements

or with cash collateral, and securities received under

repurchase agreements, which permit borrowers to sell or

repledge such securities received, amounted to ¥284,992

million ($2,468,321 thousand) and ¥453,725 million as of

September 30, 2007 and 2006, respectively. There were no

loaned securities under such agreements as of September

30, 2007 and 2006. There were no repledged securities under

such agreements as of September 30, 2007 and 2006.

29

7. Loans and Bills DiscountedLoans and bills discounted as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Bills discounted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 4,122 ¥ 4,517 $ 35,709

Loans on notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,048 213,351 1,923,165

Loans on deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,482,649 2,893,774 30,163,257

Overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262,850 377,628 2,276,548

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,971,671 ¥3,489,272 $34,398,679

6. Money Held in TrustThe cost and carrying values for other money held in trust (except investment purpose and held-to-maturity purpose) as of

September 30, 2007 and 2006, were as follows:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥781 ¥3,010 $6,771

Carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 781 3,017 6,771

The following risk-monitored loans were included in loans and bills discounted as of September 30, 2007 and 2006:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Loans to bankrupt companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 5,551 ¥ 6,180 $ 48,078

Past due loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,026 15,094 225,416

Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,832 7,229 67,840

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥39,410 ¥28,504 $341,334

The above amounts are stated after write-offs of

uncollectible amounts but before deduction of the reserve for

possible loan losses.

“Loans to bankrupt borrowers” are loans to borrowers who

are legally bankrupt and are placed on non-accrual status.

“Past due loans” are non-accrual loans on which accrued

interest income is not recognized, excluding loans to bankrupt

borrowers and loans on which interest payments are deferred

in order to support the borrowers’ recovery from financial

difficulties. “Past due loans” include loans to borrowers who

are in danger of bankruptcy and de facto bankrupt under the

self-assessment guidelines.

“Loans overdue for three months or more” are accruing

loans for which principal or interest remains unpaid for at

least three months, excluding loans to bankrupt borrowers

and past due loans. There were no outstanding balances of

loans overdue for three months or more as of September 30,

2007 and 2006.

“Restructured loans” are loans where lending conditions

are relaxed, such as by reducing the interest rate, or by

forbearing interest payments or principal repayments to

support the borrowers’ recovery, excluding loans to bankrupt

borrowers, past due loans and loans overdue for three

months or more.

Under the articles of “Warranty of Loan-Related Assets”

described in the Stock Purchase Agreement regarding the

transfers of the Bank’s shares as of June 30, 2000, the Bank

was entitled to exercise its cancellation right to return certain

problem loans to the Deposit Insurance Corporation of Japan

(the “DIC”) through September 30, 2003. The Bank still held

problem loans for which the Bank exercised its cancellation

right amounting to ¥15,305 million ($132,560 thousand) and

¥15,305 million as of September 30, 2007 and 2006,

respectively. The Bank has not returned such loans to the

DIC due to certain administrative procedures pending

completion. However, such loans are excluded from the

amounts of risk monitored loans presented above as the DIC

acknowledges its obligation to buy back the loans under the

cancellation right.

Overdraft contracts and contracts for loan commitments

are those by which the Bank is bound to extend loans up to

a prearranged amount, upon the request of customers, unless

the customer is in breach of contract conditions. The unutilized

balance of these contracts amounted to ¥803,927 million

30

11. Reserve for Possible Loan LossesReserve for possible loan losses as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

General reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥41,135 ¥47,601 $356,276

Specific reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,721 14,691 136,163

Reserve for loans to restructuring countries . . . . . . . . . . . . . . . . . . . . . . . . 76

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥56,857 ¥62,369 $492,439

8. Foreign ExchangesForeign exchanges as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Assets: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Due from foreign banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥9,765 ¥9,705 $84,582

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥9,765 ¥9,705 $84,582

Liabilities:

Due to foreign banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1 ¥ 2 $ 9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1 ¥ 2 $ 9

($6,962,823 thousand) and ¥714,194 million as of September

30, 2007 and 2006, respectively. ¥577,983 million ($5,005,922

thousand) and ¥520,355 million of these amounts relate to

contracts with original contractual terms of one year or less

as of September 30, 2007 and 2006, respectively.

Bills discounted are accounted for as financing transactions

in accordance with the JICPA Industry Audit Committee

Report No. 24, although the Bank has the right to sell or

pledge them without restriction. The face values of such bills

discounted held as of September 30, 2007 and 2006 were

¥4,122 million ($35,709 thousand) and ¥4,517 million,

respectively.

The outstanding amount which was accounted for as

sales of loan to participants for loan participations in the

consolidated semiannual balance sheet in accordance with

the JICPA Accounting Standard Committee Report No. 3

issued on June 1, 1995, was ¥70,222 million ($608,194

thousand) as of September 30, 2007.

9. Premises and EquipmentPremises and equipment as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,176 ¥11,657 $105,457

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,506 9,796 82,335

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,635 3,109 22,829

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥24,318 ¥24,563 $210,620

Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥22,531 ¥24,148 $195,144

All contingent liabilities arising from acceptances and

guarantees are reflected in acceptances and guarantees.

As a contra account, customers’ liabilities for acceptances

and guarantees are shown as assets representing the Bank’s

right of indemnity from customers.

10. Customers’ Liabilities for Acceptances and Guarantees

31

12. Pledged Assets and CollateralThe carrying amounts of assets pledged as collateral and the collateralized debt as of September 30, 2007 and 2006, were as follows:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Assets pledged as collateral:

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥350,741 ¥421,295 $3,037,775

Loans and bills discounted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,145 221,026 1,880,702

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥567,887 ¥642,322 $4,918,477

Collateralized debts:

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 17,000 ¥ 19,000 $ 147,237

Call money and bills sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000 80,000 692,881

Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . 21,354 42,301 184,954

Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . 165,884 209,244 1,436,725

Borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,300 100,500 860,038

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥383,539 ¥451,045 $3,321,835

In addition, the following assets were pledged or deposited as margin money for future trading and collateral for transactions

including exchange settlement and derivatives as of September 30, 2007 and 2006:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,630 ¥ 1,630 $ 14,117

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,147 147,346 1,049,257

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥122,777 ¥148,976 $1,063,374

13. DepositsDeposits as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Current deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 26,326 ¥ 90,816 $ 228,013

Ordinary deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262,491 262,375 2,273,445

Deposits at notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,162 9,168 62,038

Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,977,131 1,951,329 17,123,950

Negotiable certificates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 749,530 982,010 6,491,685

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,247 25,649 158,041

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,040,889 ¥3,321,349 $26,337,172

32

15. Other Assets and LiabilitiesOther assets and liabilities as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Other assets:

Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 14,792 ¥ 12,663 $ 128,118

Accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,682 38,367 213,778

Investments in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 0 80

Derivatives held for purposes other than trading . . . . . . . . . . . . . . . . . . 38,920 32,029 337,089

Financial stabilization fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,628 32,628 282,591

Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,167 9,646 122,705

Deferred charges for debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 270 4,206

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,096 12,915 148,072

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥142,782 ¥138,521 $1,236,639

Other liabilities:

Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 25,408 ¥ 26,736 $ 220,060

Derivatives held for purposes other than trading . . . . . . . . . . . . . . . . . . 33,696 20,867 291,843

Matured debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,072 18,286 139,207

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,966 49,899 476,066

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥130,143 ¥115,788 $1,127,176

14. Debentures and Corporate bondsThe Bank converted its long-term credit bank charter to an

ordinary commercial bank charter on April 1, 2006. The

Financial Services Agency of Japan, however, allows the

Bank to retain the ability to issue debentures without

Debentures as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

One-year discount debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 25,078 ¥ 30,139 $ 217,203

One-year coupon debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358,200 195,700 3,102,373

Two-year coupon debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610,300 521,600 5,285,813

Three-year coupon debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434,350 168,300 3,761,909

Five-year coupon debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355,563 316,760 3,079,542

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,783,492 ¥1,232,500 $15,446,840

The Bank issued corporate bonds for the first time during the year ended March 31, 2007, after converting to an ordinary

commercial bank.

Corporate bonds as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Unsecured straight bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥122,671 ¥99,463 $1,062,460

Subordinated bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300 11,259

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥123,971 ¥99,463 $1,073,719

registration, which was one of the benefits the Bank enjoyed

as a long-term credit bank, for a period of ten years following

the conversion to an ordinary commercial bank.

33

16. EquityCapital stock as of September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Common stock—authorized, 3,772,000 thousand shares, issued,

1,650,147 thousand shares, and outstanding, 1,650,144 thousand

shares (Notes 1 and 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥252,465 ¥147,745 $2,186,606

Preferred stock, Class A Series 4—authorized, issued and outstanding,

24,072 thousand shares (Notes 1 and 2) . . . . . . . . . . . . . . . . . . . . . . . . . 12,036 12,036 104,244

Preferred stock, Class C Series 5—authorized, 433,333 thousand shares,

and issued and outstanding, 258,799 thousand shares (Notes 1 and 2) . . 155,279 260,000 1,344,878

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥419,781 ¥419,781 $3,635,728

Notes: 1. On November 9, 2006, 232,712 thousand shares of common stock were issued upon the conversion of 174,534 thousand shares of Class CSeries 5 preferred stock in connection with the Bank’s public offering.

2. The authorized number of shares of common stock and preferred stocks in the aggregate was 4,054,871 thousand as of September 30, 2007while the articles of incorporation prescribe the authorized number of shares for each class of common stock and preferred stock as is presentedin the table above.

The amount of treasury stock was ¥1 million and less than ¥1 million at September 30, 2007 and 2006, respectively. The

number of treasury stock at September 30, 2007 was 2,932 shares of common stock and at September 30, 2006 was 352

shares of common stock.

17. Other Operating IncomeOther operating income for the six-month periods ended September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Gains on sales of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,113 ¥ 8,133 $ 9,647

Gains on foreign exchange transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,545 1,591 22,044

Gains on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301

Gains on redemption of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,270 99 11,000

Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,875 17,098 163,477

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥23,804 ¥27,223 $206,168

* The “Other” category primarily included gains from investments in partnerships or investment funds.

18. Other IncomeOther income for the six-month periods ended September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Gains on sales of stocks and other securities . . . . . . . . . . . . . . . . . . . . . . . ¥ 3,995 ¥ 3,370 $34,609

Reversal of reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . 5,395 17,038 46,727

Reversal of reserve for credit losses on off-balance-sheet instruments . . . 295 419 2,559

Tax refund relating to a liquidated subsidiary . . . . . . . . . . . . . . . . . . . . . . . 2,366

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,108 3,631 9,598

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥10,794 ¥26,826 $93,493

34

21. Lease TransactionsThe Group leases certain equipment and other assets.

Lease payments under finance leases were ¥593 million

($5,136 thousand) and ¥705 million for the six-month periods

ended September 30, 2007 and 2006, respectively.

Pro forma information of leased property such as

acquisition cost, accumulated depreciation, obligation under

finance lease and depreciation expense of finance leases

that do not transfer ownership of the leased property to the

lessee on an “as if capitalized” basis for the six-month periods

ended September 30, 2007 and 2006, were as follows:

20. Other ExpensesOther expenses for the six-month periods ended September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Write-off of claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 954 ¥3,149 $ 8,266

Losses on sales of stocks and other securities. . . . . . . . . . . . . . . . . . . . . . 0 99 0

Losses on write-down of stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 11 6,216

Losses on disposal of premises and equipment and others . . . . . . . . . . . . 127 345 1,105

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,898 1,701 25,100

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,697 ¥5,307 $40,687

19. Other Operating ExpensesOther operating expenses for the six-month periods ended September 30, 2007 and 2006, consisted of the following:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Amortization of debenture issuance expenses . . . . . . . . . . . . . . . . . . . . . . ¥ 186 ¥ 118 $ 1,619

Amortization of corporate bonds issuance expenses . . . . . . . . . . . . . . . . . 38 38 336

Losses on sales of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,424 863 46,982

Losses on redemption of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298

Losses on write-down of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,638 40,177

Losses on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758 15,234

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,973 513 17,089

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥14,021 ¥1,832 $121,437

Millions of Yen Thousands of U.S. Dollars

Equipment Other Total Equipment Other Total

September 30, 2007

Acquisition cost . . . . . . . . . . . . . . . . . . . . . . . . ¥3,218 ¥1,328 ¥4,547 $27,876 $11,507 $39,383

Accumulated depreciation . . . . . . . . . . . . . . . 1,942 946 2,889 16,827 8,200 25,026

Net leased property . . . . . . . . . . . . . . . . . . . . . ¥1,275 ¥ 381 ¥1,657 $11,049 $ 3,307 $14,357

Millions of Yen

Equipment Other Total

September 30, 2006

Acquisition cost . . . . . . . . . . . . . . . . . . . . . . . . ¥4,305 ¥1,296 ¥5,602

Accumulated depreciation . . . . . . . . . . . . . . . 2,293 581 2,875

Net leased property . . . . . . . . . . . . . . . . . . . . . ¥2,011 ¥715 ¥2,726

35

Depreciation expense is calculated using the straight-line method, assuming the residual value is zero.

The amounts of acquisition cost, obligations and finance leases and depreciation expense are presented without segregating

interest expense due to its immateriality.

Pro forma amounts of obligations under finance leases as of September 30, 2007 and 2006, were as follows:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 845 ¥1,251 $ 7,321

Due after one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812 1,475 7,035

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,657 ¥2,726 $14,356

Pro forma amounts of depreciation expense under finance leases for the years ended September 30, 2007 and 2006, were as

follows:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥593 ¥705 $5,136

The minimum rental commitments under noncancelable operating leases as of September 30, 2007 and 2006, were as follows:

Thousands ofMillions of Yen U.S. Dollars

2007 2006 2007

Due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥133 ¥153 $1,157

Due after one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 241 2,302

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥399 ¥394 $3,459

36

22. DerivativesThe Group had the following derivatives contracts, which were listed on exchanges, outstanding as of September 30, 2007 and

2006:

Millions of Yen Thousands of U.S. Dollars

Contract or Contract or

Notional Valuation Notional Valuation

Amount Fair Value Gains/(Losses) Amount Fair Value Gains/(Losses)

September 30, 2007

Interest rate contracts:

Futures written . . . . . . . . . . . . . . . . . . . . ¥ 20,241 ¥ (22) ¥ (22) $ 175,308 $ (197) $ (197)

Futures purchased . . . . . . . . . . . . . . . . . 10,472 (5) (5) 90,699 (49) (49)

Options written . . . . . . . . . . . . . . . . . . . .

Options purchased . . . . . . . . . . . . . . . . . 100,000 1 (3) 866,101 11 (32)

Bonds contracts:

Futures written . . . . . . . . . . . . . . . . . . . . 18,125 1 1 156,981 9 9

Futures purchased . . . . . . . . . . . . . . . . . 8,169 (7) (7) 70,755 (64) (64)

Futures options written . . . . . . . . . . . . . . 1,731 (8) (2) 15,000 (76) (22)

Futures options purchased . . . . . . . . . . . 2,309 16 0 20,000 144 3

September 30, 2006

Interest rate contracts:

Futures written . . . . . . . . . . . . . . . . . . . . ¥221,709 ¥(428) ¥(428)

Futures purchased . . . . . . . . . . . . . . . . . 217,150 371 371

Options purchased . . . . . . . . . . . . . . . . . 41,756 0 (3)

Bonds contracts:

Futures written . . . . . . . . . . . . . . . . . . . . 9,478 (29) (29)

Futures purchased . . . . . . . . . . . . . . . . . 6,556 5 5

Futures options written . . . . . . . . . . . . . . 1,179 1

Futures options purchased . . . . . . . . . . . 589 0 0

Equity contracts:

Futures index written . . . . . . . . . . . . . . .

Futures index purchased . . . . . . . . . . . . 805

Options index written . . . . . . . . . . . . . . .

Options index purchased . . . . . . . . . . . .

Notes: 1. Derivatives which qualify for hedge accounting are not included in the above table.2. The contracts or notional amounts of derivatives which are shown in the above table do not necessarily represent the amounts exchanged by the

parties and do not measure the exposure of the Group to credit or market risk.3. Derivative transactions for trading purposes are stated at fair value in the accompanying consolidated semiannual financial statements.4. Fair values of above derivatives are based on quoted market prices, such as by Tokyo Financial Exchange Inc.

37

The Group had the following derivatives contracts, which were not quoted on listed exchanges, outstanding as of September

30, 2007 and 2006:

Millions of Yen Thousands of U.S. Dollars

Contract or Contract or

Notional Valuation Notional Valuation

Amount Fair Value Gains/(Losses) Amount Fair Value Gains/(Losses)

September 30, 2007Interest rate contracts:

Interest rate swaps: Receive fixed and pay floating . . . . . . . . ¥ 9,891,362 ¥ (7,904) ¥ (7,904) $85,669,171 $ (68,457) $ (68,457) Receive floating and pay fixed . . . . . . . . 10,122,369 25,009 25,009 87,669,924 216,611 216,611 Receive floating and pay floating . . . . . . 1,143,106 657 657 9,900,457 5,697 5,697Other written . . . . . . . . . . . . . . . . . . . . . . . 1,769,241 (4,809) (4,809) 15,323,415 (41,657) (41,657)Other purchased . . . . . . . . . . . . . . . . . . . . 563,827 6,627 6,627 4,883,313 57,401 57,401

Foreign exchange contracts:Currency swaps . . . . . . . . . . . . . . . . . . . . 2,064,040 (780) (780) 17,876,676 (6,764) (6,764)Forward exchange contracts written . . . . . 294,472 (896) (896) 2,550,430 (7,768) (7,768)Forward exchange contracts purchased . . 466,143 13,542 13,542 4,037,272 117,291 117,291Options written . . . . . . . . . . . . . . . . . . . . . 890,404 (25,471) 1,842 7,711,798 (220,611) 15,956Options purchased . . . . . . . . . . . . . . . . . . 829,540 18,574 (3,136) 7,184,655 160,873 (27,167)

Bond contracts:Options written . . . . . . . . . . . . . . . . . . . . . 50,000 (143) 59 433,050 (1,243) 515Options purchased . . . . . . . . . . . . . . . . . . 50,000 77 (151) 433,050 669 (1,308)

Commodity derivatives:Commodity swaps: Receive fixed and pay floating . . . . . . . . 322 (52) (52) 2,793 (453) (453) Receive floating and pay fixed . . . . . . . . 312 61 61 2,710 533 533

Credit derivatives:Written . . . . . . . . . . . . . . . . . . . . . . . . . . . 603,896 (3,088) (3,088) 5,230,353 (26,752) (26,752)Purchased . . . . . . . . . . . . . . . . . . . . . . . . . 654,300 5,298 5,298 5,666,906 45,892 45,892

September 30, 2006Interest rate contracts:

Interest rate swaps: Receive fixed and pay floating . . . . . . . . ¥10,609,650 ¥ 11,291 ¥11,291 Receive floating and pay fixed . . . . . . . . 11,462,407 10,358 10,358 Receive floating and pay floating . . . . . . 735,017 248 248Other written . . . . . . . . . . . . . . . . . . . . . . . 768,337 (2,803) (2,803)Other purchased . . . . . . . . . . . . . . . . . . . . 233,822 2,784 2,784

Foreign exchange contracts:Currency swaps . . . . . . . . . . . . . . . . . . . . 1,442,339 (3,103) (3,103)Forward exchange contracts written . . . . . 300,814 (5,240) (5,240)Forward exchange contracts purchased . . 419,078 17,591 17,591Options written . . . . . . . . . . . . . . . . . . . . . 424,161 (15,088) 1,647Options purchased . . . . . . . . . . . . . . . . . . 435,906 7,776 (5,413)

Commodity derivatives:Commodity swaps: Receive fixed and pay floating . . . . . . . . 322 (1) (1) Receive floating and pay fixed . . . . . . . . 312 10 10

Credit derivatives:Written . . . . . . . . . . . . . . . . . . . . . . . . . . . 570,269 1,863 1,863Purchased . . . . . . . . . . . . . . . . . . . . . . . . . 602,603 (1,856) (1,856)

Notes: 1. Derivatives which qualify for hedge accounting are not included in the above table.2. The contracts or notional amounts of derivatives which are shown in the above table do not necessarily represent the amounts exchanged by the

parties and do not measure the exposure of the Group to credit or market risk.3. Derivative transactions for trading purposes are stated at fair value in the accompanying consolidated financial statements.4. Calculation or quotation of fair value of above derivatives are based on discount present value method or option pricing models, etc.

38

23. Per Share of Common StockThe reconciliation of the differences between basic and diluted net income per share (“EPS”) for the six-month periods ended

September 30, 2007 and 2006, is as follows:

Millions Thousandsof Yen of Shares Yen U.S. Dollars

Net Weighted-AverageIncome Shares EPS

Six-month period ended September 30, 2007

Basic EPS—Net income available to common stockholders . . . . . . . . . . . ¥42,748 1,650,145 ¥25.90 $0.22

Effect of dilutive securities—Preferred stocks . . . . . . . . . . . . . . . . . . . . . . . 465,426

Diluted EPS—Net income for computation . . . . . . . . . . . . . . . . . . . . . . . . . ¥42,748 2,115,571 ¥20.20 $0.17

Six-month period ended September 30, 2006

Basic EPS—Net income available to common stockholders . . . . . . . . . . . ¥53,354 1,417,435 ¥37.64

Effect of dilutive securities—Preferred stocks . . . . . . . . . . . . . . . . . . . . . . . 698,138

Diluted EPS—Net income for computation . . . . . . . . . . . . . . . . . . . . . . . . . ¥53,354 2,115,573 ¥25.22

24. Segment Information(a) Business Segment Information

The Group is engaged in banking activities and other activities such as trust and other businesses. Business segment

information, however, has not been presented as the percentage of the other activities is not material to the banking business.

(b) Geographic Segment Information

Information on geographic segments for the six-month period ended September 30, 2007 is as follows:

Millions of Yen

Eliminations/Japan America Europe Asia Subtotal Corporate Consolidated

Operating income . . . . . . . . . . . . . . . . .

(1) External customers . . . . . . . . . . . ¥ 90,578 ¥13,108 ¥4,246 ¥2,151 ¥110,085 ¥110,085

(2) Inter-segment . . . . . . . . . . . . . . . . 9,818 1,562 1 11,382 ¥(11,382)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,397 13,108 5,809 2,152 121,468 (11,382) 110,085

Operating expenses . . . . . . . . . . . . . . . 85,826 6,406 4,767 1,867 98,867 (11,837) 87,029

Operating profits (losses) . . . . . . . . . . . . ¥ 14,570 ¥ 6,702 ¥1,041 ¥ 285 ¥ 22,600 ¥ 455 ¥ 23,055

Thousands of U.S. Dollars

Eliminations/Japan America Europe Asia Subtotal Corporate Consolidated

Operating income . . . . . . . . . . . . . . . . .

(1) External customers . . . . . . . . . . . $784,503 $113,534 $36,781 $18,634 $ 953,452 $953,452

(2) Inter-segment . . . . . . . . . . . . . . . . 85,039 13,535 11 98,585 $ (98,585)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 869,542 113,534 50,315 18,645 1,052,037 (98,585) 953,452

Operating expenses . . . . . . . . . . . . . . . 743,344 55,484 41,291 16,174 856,293 (102,528) 753,766

Operating profits (losses) . . . . . . . . . . . . $126,198 $ 58,050 $ 9,024 $ 2,471 $ 195,743 $ 3,943 $199,686

Notes: 1. The head office and branches of the Bank and consolidated subsidiaries are classified by the above geographic segments after taking intoaccount geographic proximity, business similarity and mutual relations of activities.Operating income and operating profits (losses) in the above table are equivalent to sales and net income (losses) for non-financial institutions.

2. “America” includes the U.S. and Cayman Islands. “Europe” includes the U.K. and Luxemburg. “Asia” includes Hong Kong.3. Interest expenses on notes which were issued by consolidated subsidiaries in America and Europe segments and are held by the Bank are

calculated based on an average yield of fundings of the Bank’s international operation.4. Since the proportion of business that the Group conducted in Japan exceeded 90% of operating income and total assets for the six-month

period ended September 30, 2006, geographic segment information was not presented.5. Up to the previous year, the current rate at the consolidated balance sheet date had been applied to translate profits and losses of foreign

subsidiaries’ financial statements. However, from the six-month period ended September 30, 2007, the average rate over the period was applied.As a result, operating income of America increased by ¥430 million ($3,732 thousand) and that of Asia increased by ¥71 million ($619 thousand),while that of Europe decreased by ¥32 million ($284 thousand) for the six-month period ended September 30, 2007. Operating profits of Americaincreased by ¥425 million ($3,687 thousand) and that of Asia increased by ¥48 million ($424 thousand), while that of Europe decreased by ¥49million ($430 thousand) for the six-month period ended September 30, 2007.

39

(c) Foreign Operating Income

Foreign operating income for the six-month period ended September 30, 2007 is as follows:

Millions of Yen Thousands of U.S. Dollars

Foreign operating income (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 19,506 $168,949

Consolidated operating income (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,085 953,452

(A) / (B) (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.7% 17.7%

Notes: 1. Foreign operating income in the above table are equivalent to foreign sales for non-financial institutions.2. Foreign operating income shows the sum of operating income of foreign consolidated subsidiaries excluding income from intra-group transactions.

Since these transactions are not classified by domiciles of counterparties, segment information classified by countries or regions is not presented.3. The composition of foreign operating income had been less than 10% of consolidated operating income for the six-month period ended

September 30, 2006. Therefore, foreign operating income information was not presented.4. Up to the previous year, the current rate at the consolidated balance sheet date had been applied to translate profits and losses of foreign

subsidiaries’ financial statements. However, from the six-month period ended September 30, 2007, the average rate over the period was applied.As a result, foreign operating income increased by ¥469 million ($4,067 thousand) for the six-month period ended September 30, 2007.

40

Income Analysis (Consolidated)

Fees and CommissionsFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Net fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,221 7,831 16,035Fees and commissions income . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,980 8,717 17,834

Debentures, deposits and loan operations . . . . . . . . . . . . . . . . . . 4,554 6,056 11,685Foreign exchange operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 97 198Securities-related operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 872 891 1,787Agency services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,127 647 1,427Safekeeping and safe deposit box services . . . . . . . . . . . . . . . . . 0 0 7Guarantee operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 111 248

Fees and commissions expenses . . . . . . . . . . . . . . . . . . . . . . . . . 759 885 1,798Foreign exchange operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 38 76

Interest-Earning Assets and Interest-Bearing LiabilitiesFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen, %)

Average balance Interest income/expense Return/rates

Sep. 2007 Sep. 2006 Mar. 2007 Sep. 2007 Sep. 2006 Mar. 2007 Sep. 2007 Sep. 2006 Mar. 2007

Interest-earning assets . . . . . . . 6,282,532 5,966,825 6,027,159 69,514 51,074 110,423 2.20 1.70 1.83Deposits with banks . . . . . . . . 94,736 53,709 66,311 1,660 1,177 2,685 3.49 4.37 4.05Call loans and bills bought . . . 167,256 205,337 181,925 455 141 420 0.54 0.13 0.23Receivables under securities borrowing transactions . . . . . 279,754 408,739 334,381 790 352 829 0.56 0.17 0.24Securities . . . . . . . . . . . . . . . . 1,826,643 1,844,286 1,894,895 15,892 11,668 25,120 1.73 1.26 1.32Loans and bills discounted . . . 3,780,712 3,362,662 3,446,664 49,309 34,697 76,458 2.60 2.05 2.21

Interest-bearing liabilities . . . . . 5,464,215 5,165,511 5,207,351 41,543 29,352 65,497 1.51 1.13 1.25Deposits . . . . . . . . . . . . . . . . . 2,211,859 2,206,653 2,223,352 7,889 5,413 12,350 0.71 0.48 0.55Negotiable certificates of deposit . . . . . . . . . . . . . . . . . 825,424 970,479 916,215 2,582 1,177 3,124 0.62 0.24 0.34Debentures . . . . . . . . . . . . . . . 1,616,771 1,135,562 1,234,107 7,368 3,374 8,367 0.90 0.59 0.67Call money and bills sold . . . . 293,450 403,018 351,808 3,919 3,478 6,933 2.66 1.72 1.97Payables under repurchase agreements . . . . . . . . . . . . . 27,041 43,225 40,766 732 1,131 2,166 5.40 5.21 5.31Payables under securities lending transactions . . . . . . . 160,971 191,053 180,572 3,807 4,053 7,837 4.71 4.23 4.34Borrowed money . . . . . . . . . . 225,870 135,297 175,088 822 211 843 0.72 0.31 0.48Corporate bonds . . . . . . . . . . 111,717 87,181 93,365 843 716 1,540 1.50 1.63 1.65

Note: Interest expenses are shown after deduction of amounts of assumed cost of funding money held in trust (¥34 million for the six-month period endedSeptember 30, 2007, ¥15 million for the six-month period ended September 30, 2006, and ¥42 million for the year ended March 31, 2007).

Trading RevenuesFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Net trading revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,831 3,149 5,452Trading profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,904 3,149 5,452

Gains on trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 0 24Gains on securities related to trading transactions . . . . . . . . . . . . — 34 72Gains on trading-related financial derivatives . . . . . . . . . . . . . . . . 3,881 3,114 5,355Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0

Trading losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 — —Losses on trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Losses on securities related to trading transactions . . . . . . . . . . . 72 — —Losses on trading-related financial derivatives . . . . . . . . . . . . . . . — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

Other Operating Income (Net)For the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Net other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,783 25,391 48,026Gains on foreign exchange transactions . . . . . . . . . . . . . . . . . . . . . . 2,545 1,591 2,260Net gains (losses) on bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,679) 8,133 10,994Others – Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,917 99 34,771

41

Non-Consolidated Business Results

Non-Consolidated Financial HighlightsFor the six-month periods ended September 30, 2007, 2006 and 2005, and the years ended March 31, 2007 and 2006

(Millions of Yen)

Sep. 30, 2007 Sep. 30, 2006 Sep. 30, 2005 Mar. 31, 2007 Mar. 31, 2006

Operating income . . . . . . . . . . . . . . . . . . . . . . . 102,015 92,104 70,062 188,088 163,661

Operating profits . . . . . . . . . . . . . . . . . . . . . . . . 18,966 32,461 26,045 61,960 60,729

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,204 53,109 45,201 82,168 119,920

Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,781 419,781 419,781 419,781 419,781

Number of outstanding shares (in thousands)Common stock . . . . . . . . . . . . . . . . . . . . . . . 1,650,147 1,417,435 2,834,870 1,650,147 2,834,870Class A Series 4 preferred stock . . . . . . . . . . 24,072 24,072 48,144 24,072 48,144Class C Series 5 preferred stock . . . . . . . . . 258,799 433,333 866,667 258,799 866,667

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812,207 758,905 648,766 788,537 720,447

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,632,225 6,445,877 4,837,850 6,558,891 6,005,204

Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,787,492 1,236,500 845,126 1,454,525 1,064,331

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,077,881 3,332,510 2,366,204 3,252,145 3,211,709

Loans and bills discounted . . . . . . . . . . . . . . . . 3,517,123 3,237,993 2,570,665 3,362,528 3,025,391

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,186,113 2,118,428 1,585,320 2,332,881 1,797,623

Total equity per share (yen) . . . . . . . . . . . . . . . . 383.52 334.99 257.29 367.85 305.41

Dividends per share (yen)Common stock . . . . . . . . . . . . . . . . . . . . . . . — — — 1.78 0.89Class A Series 4 preferred stock . . . . . . . . . . — — — 10.00 5.00Class C Series 5 preferred stock . . . . . . . . . — — — 7.44 3.72

(Interim dividends per share)(Common stock) . . . . . . . . . . . . . . . . . . . . . . (—) (—) (—) (—) (—)(Class A Series 4 preferred stock) . . . . . . . . . (—) (—) (—) (—) (—)(Class C Series 5 preferred stock) . . . . . . . . . (—) (—) (—) (—) (—)

Basic net income per share (yen) . . . . . . . . . . . 24.36 37.46 31.88 53.03 82.15

Diluted net income per share (yen) . . . . . . . . . . 19.00 25.10 21.36 38.83 56.68

Dividend payout ratio (%) . . . . . . . . . . . . . . . . . — — — 3.36 2.17

Capital adequacy ratio (domestic standard) (%) . . . . . . . . . . . . . . . . . 15.96 19.00 21.00 15.86 19.55

Number of employees . . . . . . . . . . . . . . . . . . . . 1,429 1,335 1,359 1,384 1,359Notes: 1. Total equities as of September 30 and March 31, 2007 and September 30, 2006 are in accordance with the new standard for presentation of

equity; however, those as of September 30 and March 31, 2006 and September 30, 2005 are not adjusted to conform to the new presentation.2. Total equity per share, basic net income per share and diluted net income per share are calculated by applying Financial Accounting Standard

No. 2, “Accounting Standard for Earnings per Share” and Financial Accounting Standards Implementation Guidance No. 4, “ImplementationGuidance for Accounting Standard for Earnings per Share.”

3. Number of employees does not include executive officers, locally hired overseas staff or the Bank’s employees seconded to other firms.4. The Bank has declared a reverse stock split of the Bank’s common stock and Class A Series 4 and Class C Series 5 preferred stocks, which took

effect on September 11, 2006. Total equity per share, basic net income per share and diluted net income per share previous to March 31, 2006,are calculated on the premise that the reverse stock split had been declared at the beginning of each fiscal period.

5. The following per share information is for reference only and is based on the amendment of previous figures to account for the assumed effect ofthe reverse stock split. (Yen)

Sep. 30, 2006 Sep. 30, 2005 Mar. 31, 2006

Dividends per shareCommon stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1.78Class A Series 4 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 10Class C Series 5 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 7.44

42

(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007

Tier I Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,781 419,781Non-cumulative perpetual preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . 167,315 167,315

Newly issued stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Capital reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,333 33,333Other capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Earned surplus reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,865 4,844Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373,831 339,751Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0Paid-in amount on treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Unappropriated profits to be distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5,103Net unrealized losses on available-for-sale securities . . . . . . . . . . . . . . . . . . . 17,541 6,793Subscription rights to shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Amount equal to goodwill derived from acquisitions . . . . . . . . . . . . . . . . . . . — —Intangible assets derived from mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Amount equivalent to capital increased by securitization transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (A) 815,269 785,812 Step-up preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Tier II Forty-five percent of the difference between fair value and book value in respect of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —General reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,126 28,497Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Perpetual subordinated liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Subordinated term liabilities and subordinated term preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,126 28,497 Tier II capital qualifying as capital . . . . . . . . . . . . . . . . . . . . . . . (B) 30,126 28,497

Tier III Short-term subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Tier III capital qualifying as capital . . . . . . . . . . . . . . . . . . . . . . (C) — —

Items deducted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (D) 75,690 90,929

Regulatory capital (A) + (B) + (C) – (D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (E) 769,704 723,380

Risk-weighted Balance-sheet exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,176,164 3,992,296 assets Off-balance-sheet exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371,883 343,485

Credit risk asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (F) 4,548,048 4,335,782Market risk equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (G) 82,900 39,768Operational risk equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (H) 189,241 184,104(F) + (G) + (H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( I ) 4,820,190 4,559,655

Capital adequacy ratio (Domestic standard) x 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.96.% 15.86.%

Tier I ratio (Domestic standard) x 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.91.% 17.23.%

Required capital total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,807 182,386Notes: 1. The capital adequacy ratio is calculated using the formula stipulated in a ministerial notification based on Article 14-2 of the Banking Law. Aozora

uses the domestic standard applicable to Japanese banks without overseas branches or banking subsidiaries.The capital adequacy ratios are based on the FSA guidelines established to implement Basel II.

2. Items deducted (D) include the amount held at other financial institutions for their capital-raising purposes.3. Methods used to calculate risk-weighted assets are as follows: credit risk asset uses the standardized approach; market risk equivalent uses the

internal models approach and the standardized approach; operational risk equivalent uses the basic indicator approach.4. Amounts of required capital for each risk are as follows:

(Millions of Yen)

Sep. 30, 2007 Mar. 31, 2007

Credit risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181,921 173,431Market risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,316 1,590Operational risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,569 7,364

(E)

( I )(A)

( I )

Non-Consolidated Capital Adequacy Ratio (Domestic Standard)

43

Reduction of Problem Loans and Analysis of Assets

Disclosure of Claims under the FinancialReconstruction Law

The Bank is addressing the reduction of problem loans as one

of management’s key tasks. Based on stringent internal self-

assessment standards, the Bank makes the appropriate

write-offs and reserve provisions, and carries out the disposal

of problem loans where deemed optimal, after considering a

course of action for each individual problem loan.

In the first half of the fiscal year ended September 30,

2007, the Bank has promoted removing the amount of

problem loans on its balance sheet by collection, sale of some

claims and write-offs. On the other, as a result of the change

of borrower category, disclosed claims under the Financial

Reconstruction Law amounted to ¥37.8 billion, increase by

¥4.8 billion compared with that disclosed at the end of March

2007. The disclosed claim ratio at the end of September

2007 became 1.05%, from 0.96% at the end of March 2007.

Most of the disclosed claims are secured with provision of

reserves, collateral and guarantees, which makes the Bank’s

risk restrictive, in substantial terms.

Disclosed Claims under the Financial Reconstruction LawNon-consolidated

(Billions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Disclosed claims under the Financial Reconstruction Law

Bankrupt and similar credit 0.2 3.8 0.4Doubtful credit 31.4 15.0 29.2Special Attention credit 6.2 4.0 3.4

Subtotal (A) 37.8 22.8 33.0Normal credit 3,532.1 3,248.5 3,373.4

Total credit (B) 3,569.9 3,271.4 3,406.4

(A/B) 1.05% 0.69% 0.96%

Removal of Doubtful and Bankrupt and SimilarClaims from the Balance Sheet

The Bank has endeavored to effectively and rapidly reduce

the amount of problem loans on its balance sheet.

During the first half of fiscal year ended September 30, 2007,

of the disclosed claims under the Financial Reconstruction

Law, doubtful credit and bankrupt and similar credit claims

(hereinafter referred to as “doubtful and bankrupt and similar

claims”), totaling ¥7.8 billion, were removed from the Bank’s

balance sheet as a result of collection and loan sales. On the

other hand, claims newly classified into doubtful and bankrupt

and similar claims amounted to ¥9.8 billion. As a result, the

total of those as of September 30, 2007, increased by ¥2.1

billion compared with that at the end of March 2007.

The Bank will formulate a disposal plan for each individual

obligor, thereby carrying out the removal of such claims from

the Bank’s balance sheet in a well-planned manner.

Self-Assessments, Write-offs and Reserves

Self-Assessments, which involve an examination of asset

quality and probability of collection for each of its assets, are

conducted by the Bank based on internal self-assessment

standards developed in accordance with the Financial Services

Agency’s Financial Inspection Manual. Self-assessments are

the basis on which the Bank carries out the appropriate

write-offs and reserve provisions to preserve the soundness

of its assets.

Self-assessments divide borrowers into five categories.

Assets are then classified into four categories according to

the probability of collection, which is assessed by taking into

account any underlying collateral, guarantees or other security.

Removal of Doubtful and Bankrupt and Similar Claims fromthe Balance SheetNon-consolidated

(Billions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Disposals through borrower liquidation — (0.1) (0.0)Disposals through borrower reorganization (0.2) (0.2) (0.2)Reductions due to improvement in borrower performance — — —Loan sales to secondary market (1.2) (3.6) (3.6)Direct write-offs 1.3 (0.8) (1.9)Other (recovery, repayment) (7.6) (6.8) (8.0)

Subtotal (A) (7.8) (11.5) (13.6)

Claims newly classified as:Bankrupt and similar 0.0 3.5 0.1Doubtful 9.8 7.9 24.1

Subtotal (B) 9.8 11.4 24.3

Total (A+B) 2.1 (0.1) 10.7

Notes: 1. Disposals through borrower liquidation: discharge and write-offof claims against borrowers undergoing bankruptcy liquidation;Disposals through borrower reorganization: discharge ofclaims against borrowers undergoing bankruptcy reorganizationand abandonment of claims against borrowers undergoingprivate resolution;Other: recovery through disposal of collateral and improve-ment in borrower position.

Notes: 2. For claims written off, where the borrower subsequentlyundergoes legal or private resolution leading to claimdischarge or abandonment, the written-off amount is reducedaccordingly and then recoded as either a disposal throughborrower liquidation or a disposal through borrowerreorganization.

Notes: 3. The figures on Mar.2007 reflect the annual figures.

44

Reserve Provision Ratios for Each Category of Borrower,Based on Asset-AssessmentsNon-consolidated

(%)

Definition of Borrower Categories Sep. 2007 Sep. 2006 Mar. 2007

Normal 0.6 0.9 0.8Need Attention:

Other Need Attention borrowers 2.7 4.8 3.3Special Attention borrowers (Ratio of reserve to unsecured) 32.3 48.5 66.4

In Danger of Bankruptcy (Ratio of reserve to unsecured) 96.8 96.2 97.3De Facto Bankrupt and Bankrupt (Ratio of reserve to unsecured) (100.0) (100.0) (100.0)

Credit-related Expenses

In the first half of fiscal year ended September 30, 2007,

the Bank, as a result of the final disposal of problem loans,

conducted loan write-offs and specific reserve provisions.

Due to the fact that sufficient specific and general reserve

provisions had been conducted up to the previous period and

the fact that expected loss ratio had decreased, reversal of

general loan-loss reserve was made. As a result, the profit

from credit-related expenses came to ¥5.5 billion.

Credit-Related ExpensesNon-consolidated

(Billions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Expenses for the disposal of problem loans 1.0 1.0 3.1

Loan write-offs 0.6 2.9 4.0Provision to (reversal of) specific reserve 0.4 (1.7) (0.4)Provision to (reversal of) country risk reserve (0.1) (0.3) (0.3)Loss on the sale of other receivables and other items 0.1 — (0.2)

Provision to (reversal of) general loan-loss reserve (6.5) (15.7) (16.7)

Credit-related expenses (5.5) (14.7) (13.6)

Notes: 1. The figures on Mar. 2007 reflect the annual figures.2. The figures in the brackets indicate the profit.

Coverage Ratios of Disclosed Claims under theFinancial Reconstruction Law

Total disclosed claims under the Financial Reconstruction Law

amounted to ¥37.8 billion, while the secured amount including

reserve provisions, collateral and guarantees amounted to

¥34.0 billion, resulting in a coverage ratio of 90.0%.

Disclosed Claims under the Financial Reconstruction Law(After Partial and Direct Write-Offs, Non-Consolidated Basis)Non-consolidated

(Billions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Disclosed claims under the Financial Reconstruction Law (A) 37.8 22.8 33.0Normal credit 3,532.1 3,248.5 3,373.4

Total credit (B) 3,569.9 3,271.4 3,406.4

(A/B) 1.05% 0.69% 0.96%

Credit secured:Reserve for possible loan losses (C) 8.0 5.8 6.9Collateral and guarantees (D) 26.0 15.0 25.0

Total (E=C+D) 34.0 20.8 31.9

Coverage ratio (E/A) 90.0% 91.1% 96.8%

Reserve ratio (C/(A–D)) 68.1% 73.8% 86.8%

Note: Reserve for possible loan losses (C) is the sum of provisions to thespecific reserve for possible loan losses on disclosed claims underthe Financial Reconstruction Law plus general loan-loss reserve.

Risk-Monitored Loans

In addition to disclosed claims under the Financial

Reconstruction Law, the Bank also discloses risk-monitored

loans under the Banking Law. As of September 30, 2007,

risk-monitored loans (on a non-consolidated basis) amounted

to ¥31.8 billion, ¥1.2 billion down from March 31, 2007.

Risk-Monitored Loans (After Partial and Direct Write-Offs)Non-consolidated

(Billions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Risk-monitored loans:Loans to bankrupt companies 0.0 3.7 0.2Past due loans 25.6 15.1 29.3Loans overdue for three months or more — — —Restructured loans 6.2 4.0 3.4

Total (A) 31.8 22.8 33.0

Year-end balance of total loans (B) 3,517.1 3,238.0 3,362.5

(A/B) 0.90% 0.70% 0.98%

Consolidated(Billions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Risk-monitored loans:Loans to bankrupt companies 5.6 6.2 0.8Past due loans 26.0 15.1 29.7Loans overdue for three months or more — — —Restructured loans 7.8 7.2 8.6

Total (A) 39.4 28.5 39.1

Year-end balance of total loans (B) 3,971.7 3,489.3 3,684.6

(A/B) 0.99% 0.81% 1.06%

45

<Definitions of Borrower Categories>

Normal Business performance is strong and no special financialproblems exist.

Need attention Borrowers that need to be monitored carefully because ofweak business fundamentals, financial problems orproblematic lending conditions.

In danger of Borrowers that are not currently bankrupt but are highly bankruptcy likely to become bankrupt.De facto Borrowers that are substantially bankrupt but are not bankrupt legally or practically bankrupt yet.Bankrupt Borrowers that are legally or practically bankrupt.

<Definitions of Asset Classifications>

Category I Assets that present no particular risk of collectability norimpairment of value.

Category II Assets, including credits, which bear above-average riskof collectability.

Category III Assets that bear substantial risk of final collectability orimpairment of value, and are likely to incur losses.

Category IV Assets deemed to be uncollectable or valueless.

<Write-Off and Reserve Provision Rules>

Normal and Based on historical bankruptcy rates, normal status Need attention borrowers, special attention borrowers and other need borrowers attention borrowers are classified and across-the-board

provisions are made to the general loan-loss reserve.In danger of For each borrower, the expected recovery amount of bankruptcy category III assets (non-secured portion) is estimated borrowers and a provision is made to the specific loan-loss reserve

for the amount of shortfall. The expected recovery amountis the discounted present value of the estimated cashflows from future recovery of the loan principal.

De facto In principle, the full amounts of category III and IV bankrupt and credits are written off directly. Bankrupt borrowers

<Definitions of Disclosed Claims under the FinancialReconstruction Law>

Bankrupt and Bankrupt and similar credit refers to the credit of similar credit borrowers who have filed for bankruptcy, corporate

reorganization, composition, etc., as well as thoseborrowers who are in an equivalent situation.

Doubtful credit Doubtful refers to credit with serious doubt concerningthe recovery of principal and receiving of interest ascontract provisions, because the borrower’s financialcondition and business results have worsened, althoughthey have not reached the point of management collapse.

Special attention Special attention refers to loans in arrears for more than credit three months or with mitigated conditions.Normal credit Normal credit refers to credit to borrowers whose financial

condition and business results have no particular problemand which are not categorized in any of the abovecategories.

<Risk-Monitored Loans>

Loans to Loans to bankrupt borrowers are loans for which interest bankrupt in arrears has not been accrued because recovery or borrowers settlement of principal or interest is unlikely due to the

prolonged delay in payment of principal or interest (whichhereafter shall be called “non-accrual loans”) and whoseborrowers are legally bankrupt (defined below), excludingthe amount of write-offs.1. Borrowers that have applied for commencement of

company or financial institution reorganizationprocedures under the provisions of the CorporateReorganization Law.

2. Borrowers that have applied for reorganization under theprovisions of the Civil Reorganization Law.

3. Borrowers that have applied for bankruptcy under theprovisions of the Bankruptcy Law.

4. Borrowers that have applied to commence specialliquidation under the provisions of the Company Law.

5. Borrowers with reasons equivalent to 1. to 4. above asdefined by Ministry of Finance ordinances.

6. Borrowers who have applied for commencement oflegal liquidation procedures under overseas laws,corresponding to those listed above.

Past due loans Past due loans refer to non-accrual loans except those forwhich concessions on payment of interest were made inorder to assist the reorganization of bankrupt companiesand loans to them.

Loans overdue Loans overdue for three months or more refers to those for three loans, excluding loans to bankrupt companies and past months or due loans for which principal or interest remains unpaid more for at least three months.Restructured Restructured loans refer to those loans, excluding loans loans to bankrupt companies, past due loans and loans

overdue for three months or more for which agreementwas made to provide reduction or a moratorium oninterest payments, or concessions in the borrower’s favoron interest or principal payments or to waive claims forthe purpose of assisting the reconstruction of insolventborrowers.

<Differences Between Disclosed Claims under theFinancial Reconstruction Law and Risk-Monitored Loans>

• Disclosed ClaimsDisclosure: Loans and other claims equivalent thereof (foreign

exchange, acceptances and guarantees, suspensepayments, as well as loaned securities that requirenotation [limited to only those subject to a usage andlending or lending agreement], etc.).

Disclosed: By borrower (by loan for substandard credit)

• Risk-Monitored LoansDisclosure: Loans onlyDisclosed: By loan

(Billions of Yen)

Borrower categoriesfor self-assessment

Bankrupt borrowers

In Danger ofBankruptcyborrowers

Normal borrowers

De Facto Bankruptborrowers

Disclosed claims underthe FRL

Loans Other

Doubtful credit31.4

Special attention credit6.2

(Normal credit 3,532.1)

Bankrupt and similar credit0.2

Disclosed claims underthe FRL37.8

Total credit 3,569.9

Reserve and coverage for claims underthe FRL

Total reserve 56.1

Collateral/Guarantee coverage 26.0Reserve 8.0

Estimated collections 3.8

Collateral/Guarantee coverage 0.2Reserve 0.0(Partial, direct write-offs of loans 5.6)

Collateral/Guarantee coverage 24.9Reserve 6.3 Estimated collections 0.2

Collateral/Guarantee coverage 0.9Reserve 1.8

Reserve-to-unsecured-credit

ratio

Reserve andcoverage ratio

100.0%

99.3%

42.6%

100.0%

96.8%

33.1%

Risk-monitored loans

Restructured loans6.2

Risk-monitored loans31.8

Reserve and coverage ratio for disclosed claims

under the FRL90.0%

Reserve ratio for disclosed claims

under the FRL68.1%

Loans overdue for three months or more

—

Past due loans25.6

Loans to bankrupt borrowers 0.0

Estimated collections 3.6

Need Attentionborrowers

FRL: Financial Reconstruction Law

Asset-Assessment, Disclosed Claims, Write-offs, Reserves and Risk-Monitored Loans(After Partial and Direct Write-Offs, Non-Consolidated Basis) as of September 30, 2007

46

Non-Consolidated Financial Statements

Non-Consolidated Balance Sheets (Unaudited)Aozora Bank, Ltd.As of September 30, 2007 and 2006, and March 31, 2007

Thousands ofMillions of Yen U.S. Dollars

ASSETS Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 25,936 ¥ 35,167 ¥ 38,192 $ 224,635Deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,989 61,807 59,312 545,550Call loans and bills bought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,692 230,707 178,826 1,608,287Receivables under securities borrowing transactions . . . . . . . . . . . . . . 282,443 453,638 281,914 2,446,241Monetary claims bought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,127 57,716 84,056 693,982Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,278 74,644 67,519 712,614Money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,446 10,205 9,203 73,153Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,186,113 2,118,428 2,332,881 18,933,951Loans and bills discounted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,517,123 3,237,993 3,362,528 30,461,835Foreign exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,765 9,705 8,583 84,582Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,322 140,005 111,367 1,249,978Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,076 22,343 22,776 191,207Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,382 27,465 28,382 375,732Customers’ liabilities for acceptances and guarantees . . . . . . . . . . . . . 37,635 28,187 35,621 325,963Reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,108) (62,137) (62,275) (485,953)

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥6,632,225 ¥6,445,877 ¥6,558,891 $57,441,757

Thousands ofMillions of Yen U.S. Dollars

LIABILITIES AND EQUITY Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007

LIABILITIES:Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,077,881 ¥3,332,510 ¥3,252,145 $26,657,561Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,787,492 1,236,500 1,454,525 15,481,484Call money and bills sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197,440 329,442 313,213 1,710,031Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . 21,354 42,301 33,734 184,954Payables under securities lending transactions . . . . . . . . . . . . . . . . 165,884 209,244 146,248 1,436,725Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,310 76,327 64,506 487,709Borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231,800 201,800 223,700 2,007,622Foreign exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 1 9Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,971 99,963 99,967 865,854Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,222 113,489 129,279 1,101,872Liability for employees’ retirement benefits . . . . . . . . . . . . . . . . . . . . 15,786 15,634 15,989 136,726Liability for directors’ retirement benefits . . . . . . . . . . . . . . . . . . . . . . 121 1,051Reserve for credit losses on off-balance-sheet instruments . . . . . . . 1,115 1,568 1,421 9,657Acceptances and guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,635 28,187 35,621 325,963

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,820,017 5,686,972 5,770,354 50,407,218

EQUITY:Capital stock

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252,465 147,745 252,465 2,186,606Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,315 272,036 167,315 1,449,123

Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,333 33,333 33,333 288,701Retained earnings

Legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,865 4,844 4,844 50,798Unappropriated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373,831 310,691 339,751 3,237,757

Net unrealized losses on available-for-sale securities . . . . . . . . . . . . (17,541) (7,429) (6,793) (151,924)Net deferred losses on derivatives under hedge accounting . . . . . . (3,061) (2,316) (2,378) (26,512)Treasury stock–at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (0) (0) (10)

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812,207 758,905 788,537 7,034,539

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥6,632,225 ¥6,445,877 ¥6,558,891 $57,441,757Note: The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has been

made at the rate of ¥115.46 to $1.00, the approximate rate of exchange at September 28, 2007.

47

Non-Consolidated Statements of Income (Unaudited)Aozora Bank, Ltd.For the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

Thousands ofMillions of Yen U.S. Dollars

Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007(6 months) (6 months) (1 year) (6 months)

INCOME:Interest income:

Interest on loans and bills discounted . . . . . . . . . . . . . . . . . . . . . . ¥ 34,661 ¥ 27,635 ¥ 58,157 $ 300,204Interest and dividends on securities . . . . . . . . . . . . . . . . . . . . . . . 28,340 18,566 43,038 245,455Interest on deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . 1,082 826 1,921 9,375Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,194 3,389 5,738 19,011

Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,441 7,054 14,250 55,787Trading profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,832 3,149 5,428 33,193Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,084 25,914 51,442 182,613Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,659 26,008 28,298 92,325

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,297 112,545 208,275 937,963

EXPENSES:Interest expenses:

Interest on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,498 6,599 15,487 90,929Interest on debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,386 3,385 8,393 63,977Interest on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,741 3,671 7,666 41,064Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,982 15,716 33,926 164,404

Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 723 888 1,661 6,262Trading losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 630Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,025 1,918 5,185 121,476General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 23,309 23,868 48,309 201,882Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,435 3,935 6,808 29,755

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,174 59,983 127,439 720,379

INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 25,122 52,561 80,835 217,584

INCOME TAXES:Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82) (204) (73) (714)Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,000) (343) (1,260) (129,915)

Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,082) (547) (1,333) (130,629)

NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 40,204 ¥ 53,109 ¥ 82,168 $ 348,213

Yen U.S. Dollars

Sep. 30, 2007 Sep. 30, 2006 Mar. 31, 2007 Sep. 30, 2007(6 months) (6 months) (1 year) (6 months)

PER SHARE INFORMATION:Basic net income per common stock . . . . . . . . . . . . . . . . . . . . . . . . ¥24.36 ¥37.46 ¥53.03 $0.21Diluted net income per common stock . . . . . . . . . . . . . . . . . . . . . . . 19.00 25.10 38.83 0.16Cash dividends applicable to the period:

Class A Series 4 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . 10.00Class C Series 5 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . 7.44Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.78

Note: The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has beenmade at the rate of ¥115.46 to $1.00, the approximate rate of exchange at September 28, 2007.

48

Non-Consolidated Statements of Changes in Equity (Unaudited)Aozora Bank, Ltd.For the six-month period ended September 30, 2007 and the year ended March 31, 2007

Thousands

OutstandingNumber of Shares Millions of Yen

Net DeferredRetained Net Unrealized Losses on

Earnings— Retained Losses on Derivatives TreasuryCommon Preferred Common Preferred Capital Legal Earnings— Available-for- under Hedge Stock— Total

Stock Stock Stock Stock Surplus reserve Unappropriated sale Securities Accounting at Cost Equity

BALANCE, April 1, 2006 . . . . . . . . . 2,834,870 914,811 ¥147,745 ¥ 272,036 ¥33,333 ¥3,646 ¥264,768 ¥ (1,081) ¥(0) ¥720,447Net income . . . . . . . . . . . . . . . . . 82,168 82,168Cash dividends . . . . . . . . . . . . . . 1,197 (7,185) (5,987)Reverse stock split . . . . . . . . . . . (1,417,435) (457,405)Conversion of preferred stock into common stock . . . . . . . . . . 232,712 (174,534) 104,720 (104,720)Purchase of treasury stock . . . . . (1) (0) (0)Net change in the period . . . . . . . (5,711) ¥(2,378) (8,090)

BALANCE, March 31, 2007 . . . . . . 1,650,145 282,871 ¥252,465 ¥ 167,315 ¥33,333 ¥4,844 ¥339,751 ¥ (6,793) ¥(2,378) ¥(0) ¥788,537Net income . . . . . . . . . . . . . . . . . 40,204 40,204Cash dividends . . . . . . . . . . . . . . 1,020 (6,124) (5,103)Purchase of treasury stock . . . . . (1) (0) (0)Net change in the period . . . . . . . (10,747) (682) (11,429)

BALANCE, September 30, 2007 . . . 1,650,144 282,871 ¥252,465 ¥ 167,315 ¥33,333 ¥5,865 ¥373,831 ¥(17,541) ¥(3,061) ¥(1) ¥812,207

Thousands of U.S. Dollars

Net DeferredRetained Net Unrealized Losses on

Earnings— Retained Losses on Derivatives TreasuryCommon Preferred Capital Legal Earnings— Available-for- under Hedge Stock— Total

Stock Stock Surplus reserve Unappropriated sale Securities Accounting at Cost Equity

BALANCE, March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . $2,186,606 $1,449,123 $288,701 $41,958 $2,942,586 $ (58,838) $(20,604) $ (6) $6,829,526Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348,213 348,213Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,840 (53,042) (44,202)Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . (4) (4)Net change in the period . . . . . . . . . . . . . . . . . . . . . . . (93,086) (5,908) (98,994)

BALANCE, September 30, 2007 . . . . . . . . . . . . . . . . . . . $2,186,606 $1,449,123 $288,701 $50,798 $3,237,757 $(151,924) $(26,512) $(10) $7,034,539

Note: The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has beenmade at the rate of ¥115.46 to $1.00, the approximate rate of exchange at September 28, 2007.

49

Income Analysis (Non-Consolidated)

Net Revenue, Business ProfitFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Net interest income . . . . . . . . . . 24,705 22,092 2,612 21,061 21,350 (288) 43,423 40,943 2,479Interest income . . . . . . . . . . . . 66,279 41,999 28,034 50,418 31,924 19,918 108,855 66,753 45,974

[3,755] [1,424] [3,872]Interest expenses . . . . . . . . . . 41,574 19,906 25,422 29,356 10,574 20,207 65,431 25,809 43,494

[3,755] [1,424] [3,872]Net fees and commissions . . . . 5,718 4,994 723 6,166 5,889 276 12,588 11,419 1,168

Fees and commissions (income) . . . . . . . . . . . . . . . . 6,441 5,354 1,086 7,054 6,331 723 14,250 12,281 1,969Fees and commissions (expenses) . . . . . . . . . . . . . . 723 359 363 888 441 446 1,661 861 800

Net trading revenues . . . . . . . . 3,759 1,442 2,316 3,149 (12,346) 15,495 5,428 (12,143) 17,571Trading profits . . . . . . . . . . . . . 3,832 1,522 2,309 3,149 (12,346) 15,495 5,428 (12,143) 17,571Trading losses . . . . . . . . . . . . 72 79 (6) — — — — — —

Net other operating income . . . 7,058 2,144 4,914 23,995 14,694 9,300 46,256 21,864 24,392Other operating income . . . . . 21,084 7,867 13,216 25,914 16,388 9,525 51,442 25,575 25,867Other operating expenses . . . 14,025 5,722 8,302 1,918 1,694 224 5,185 3,710 1,474

Net revenue . . . . . . . . . . . . . . . . 41,241 30,674 10,566 54,372 29,588 24,784 107,697 62,084 45,612Net revenue ratio (%) . . . . . . . . 1.30 1.02 1.62 1.81 1.06 4.66 1.78 1.10 4.07Business profit . . . . . . . . . . . . . 18,348 — — 31,372 — — 61,252 — —

Notes: 1. Domestic operations include yen-denominated transactions by domestic offices, while international operations include foreign currency-denominatedtransactions by domestic offices and transactions by overseas offices. Yen-denominated nonresident transactions and Japan offshore bankingaccounts are included under international operations.

2. Interest expenses are shown after deduction of amounts equivalent to interest expenses on money held in trust (¥34 million for the six-month periodended September 30, 2007, ¥15 million for the six-month period ended September 30, 2006, and ¥42 million for the year ended March 31, 2007).

3. Figures in brackets [ ] indicate interest received/paid as a result of interdepartmental lending and borrowing activities between domestic andinternational operations.

4. Net revenue ratio is calculated as follows:net revenue*

Net revenue ratio =average balance of interest-bearing assets

X 100

* As for the 6-month periods ended on September 30, the numerator is annualized.5. Business profit is calculated by deducting the net provision to general loan-loss reserve, and general and administrative expenses from net revenue.

RatiosFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(%)

Sep. 2007 Sep. 2006 Mar. 2007

Ordinary profit to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.58 1.06 1.00Ordinary profit to equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.72 8.75 8.21Net income to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24 1.73 1.33Net income to equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01 14.32 10.89Note: 1. Return on assets, as calculated ordinary profit or net income*

using ordinary profit or net income =

(average balance of total assets – customers’ liabilities for acceptances and guarantees)X 100

2. Return on equity, as calculated ordinary profit or net income*using ordinary profit or net income

=(equity, beginning of period + equity, end of period) ÷ 2

X 100

* As for the 6-month periods ended on September 30, the numerator is annualized.

Yield on Interest-Earning Assets, Interest Rate on Interest-Bearing Liabilities, Net Yield/Interest RateFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(%)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Yield on interest-earning assets . 2.09 1.41 4.30 1.68 1.14 3.74 1.80 1.18 4.10Interest rate on interest-bearing liabilities . . . . . . . . . . . . . . . . . . . 2.34 1.58 4.25 2.01 1.32 4.26 2.13 1.41 4.35Net yield/interest rate . . . . . . . . . (0.25) (0.17) 0.05 (0.33) (0.18) (0.52) (0.33) (0.23) (0.25)

50

Average Balance of Interest-Earning Assets and Interest-Bearing Liabilities(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Balance of interest- Average balance [943,633] [630,100] [709,743 ] earning assets 6,295,883 5,940,550 1,298,965 5,977,150 5,546,568 1,060,682 6,039,469 5,629,876 1,119,336

Interest income/expense [3,755] [1,424] [3,872]66,279 41,999 28,034 50,418 31,924 19,918 108,855 66,753 45,974

Return/rates (%) 2.09 1.41 4.30 1.68 1.14 3.74 1.80 1.18 4.10

Deposits with banks Average balance 63,580 22,616 40,964 45,139 11,301 33,837 49,048 10,983 38,065Interest income/expense 1,082 68 1,014 826 6 820 1,921 36 1,884Return/rates (%) 3.39 0.60 4.93 3.65 0.11 4.83 3.91 0.32 4.95

Call loans Average balance 166,440 165,696 743 189,241 188,000 1,241 173,677 172,539 1,137Interest income/expense 453 432 21 139 111 27 417 360 57Return/rates (%) 0.54 0.52 5.70 0.14 0.11 4.44 0.24 0.20 5.01

Receivables under Average balance 279,754 279,754 — 408,739 408,739 — 334,381 334,381 — securities borrowing Interest income/expense 790 790 — 352 352 — 829 829 — transactions Return/rates (%) 0.56 0.56 — 0.17 0.17 — 0.24 0.24 —

Bills bought Average balance 816 816 — 16,096 16,096 — 8,247 8,247 —Interest income/expense 1 1 — 2 2 — 3 3 —Return/rates (%) 0.45 0.45 — 0.02 0.02 — 0.03 0.03 —

Securities Average balance 2,300,860 1,284,432 1,016,428 2,078,771 1,242,197 836,573 2,189,255 1,299,255 889,970Interest income/expense 28,340 7,462 20,877 18,566 4,012 14,554 43,038 7,822 35,216Return/rates (%) 2.45 1.15 4.09 1.78 0.64 3.47 1.96 0.60 3.95

Loans and bills Average balance 3,392,402 3,161,282 231,119 3,181,591 3,001,815 179,775 3,218,592 3,039,037 179,554 discounted Interest income/expense 34,205 28,243 5,961 27,494 23,128 4,365 57,736 49,248 8,488

Return/rates (%) 2.01 1.78 5.14 1.72 1.53 4.84 1.79 1.62 4.72

Balance of interest- Average balance [943,633] [630,100] [709,743] bearing liabilities 5,483,957 5,149,070 1,278,520 5,181,960 4,784,817 1,027,244 5,225,885 4,853,411 1,082,217

Interest income/expense [3,755] [1,424] [3,872]41,574 19,906 25,422 29,356 10,574 20,207 65,431 25,809 43,494

Return/rates (%) 1.51 0.77 3.96 1.12 0.44 3.92 1.25 0.53 4.01

Deposits Average balance 2,239,475 2,219,900 19,574 2,219,934 2,179,705 40,228 2,238,286 2,205,545 32,740Interest income/expense 7,916 7,807 108 5,421 4,888 533 12,362 11,467 895Return/rates (%) 0.70 0.70 1.10 0.48 0.44 2.64 0.55 0.51 2.73

Negotiable certificates Average balance 825,424 825,424 — 970,479 970,479 — 916,215 916,215 — of deposit Interest income/expense 2,582 2,582 — 1,177 1,177 — 3,124 3,124 —

Return/rates (%) 0.62 0.62 — 0.24 0.24 — 0.34 0.34 —

Debentures Average balance 1,620,771 1,620,771 — 1,139,562 1,139,562 — 1,238,107 1,238,107 —Interest income/expense 7,386 7,386 — 3,385 3,385 — 8,393 8,393 —Return/rates (%) 0.90 0.90 — 0.59 0.59 — 0.67 0.67 —

Call money Average balance 293,450 166,154 127,295 345,748 223,115 122,633 323,095 204,713 118,382Interest income/expense 3,919 460 3,459 3,462 184 3,277 6,917 525 6,392Return/rates (%) 2.66 0.55 5.41 1.99 0.16 5.33 2.14 0.25 5.39

Payables under Average balance 27,041 — 27,041 43,225 — 43,225 40,766 — 40,766 repurchase Interest income/expense 732 — 732 1,131 — 1,131 2,166 — 2,166 agreements Return/rates (%) 5.40 — 5.40 5.21 — 5.21 5.31 — 5.31

Payables under Average balance 160,971 — 160,971 191,053 — 191,053 180,572 — 180,572 securities lending Interest income/expense 3,807 — 3,807 4,053 — 4,053 7,837 — 7,837 transactions Return/rates (%) 4.71 — 4.71 4.23 — 4.23 4.34 — 4.34

Bills sold Average balance — — — 57,269 57,269 — 28,713 28,713 —Interest income/expense — — — 15 15 — 15 15 —Return/rates (%) — — — 0.05 0.05 — 0.05 0.05 —

Borrowed money Average balance 225,755 225,755 — 134,430 134,430 — 174,471 174,471 —Interest income/expense 821 821 — 193 193 — 732 732 —Return/rates (%) 0.72 0.72 — 0.28 0.28 — 0.42 0.42 —

Corporate bonds Average balance 99,967 99,967 — 87,431 87,431 — 93,698 93,698 —Interest income/expense 829 829 — 720 720 — 1,548 1,548 —Return/rates (%) 1.65 1.65 — 1.64 1.64 — 1.65 1.65 —

Notes: 1. Interest-earning assets are shown after deduction of the average balance of non-interest-earning deposits. Interest-bearing liabilities are shownafter deduction of amounts equivalent to the average balance of money held in trust and corresponding interest.

2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and overseasoperations and corresponding interest income/expenses.

3. The average balance of foreign currency-denominated transactions by domestic offices in international operations has been calculated using thedaily current method.

51

Analysis of Interest Income and Interest Expenses(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Interest income Volume-related increase (decrease) 2,688 2,267 4,474 13,000 9,729 5,206 23,330 17,139 9,371Rate-related increase (decrease) 13,171 7,807 3,641 (4,986) (8,202) 2,028 (3,180) (9,925) 5,873Net increase (decrease) 15,860 10,074 8,116 8,013 1,527 7,234 20,150 7,213 15,245

Deposits with banks Volume-related increase (decrease) 337 6 172 309 0 143 782 0 407Rate-related increase (decrease) (82) 55 20 104 6 264 95 35 434Net increase (decrease) 255 61 193 414 6 408 877 36 841

Call loans Volume-related increase (decrease) (16) (13) (11) 13 0 (1) 20 1 (19)Rate-related increase (decrease) 331 334 4 102 109 7 335 355 19Net increase (decrease) 314 321 (6) 116 110 5 356 356 (0)

Receivables under Volume-related increase (decrease) (111) (111) — 10 10 — 13 13 — securities borrowing Rate-related increase (decrease) 549 549 — 328 328 — 788 788 — transactions Net increase (decrease) 437 437 — 339 339 — 801 801 —

Bills bought Volume-related increase (decrease) (2) (2) — 0 0 — (0) (0) —Rate-related increase (decrease) 1 1 — 1 1 — 2 2 — Net increase (decrease) (0) (0) — 2 2 — 2 2 —

Securities Volume-related increase (decrease) 1,983 136 3,129 3,705 631 3,559 8,243 1,455 6,703Rate-related increase (decrease) 7,789 3,314 3,193 2,136 913 736 5,235 1,197 4,122Net increase (decrease) 9,773 3,450 6,322 5,841 1,545 4,295 13,478 2,652 10,825

Loans and bills Volume-related increase (decrease) 1,821 1,228 1,246 5,895 4,943 1,504 10,509 8,926 2,186 discounted Rate-related increase (decrease) 4,889 3,886 349 (1,260) (2,687) 873 1,473 (292) 1,162

Net increase (decrease) 6,711 5,115 1,596 4,634 2,256 2,378 11,983 8,634 3,348

Interest expenses Volume-related increase (decrease) 1,710 805 4,942 4,449 1,829 4,031 9,393 3,464 7,988Rate-related increase (decrease) 10,506 8,527 272 9,582 2,774 6,144 19,914 10,292 9,871Net increase (decrease)　 12,217 9,332 5,215 14,032 4,604 10,175 29,308 13,757 17,859

Deposits Volume-related increase (decrease) 47 90 (273) 929 863 138 1,669 1,548 135Rate-related increase (decrease) 2,446 2,829 (151) 505 133 299 2,405 2,219 172Net increase (decrease) 2,494 2,919 (424) 1,435 997 437 4,075 3,767 307

Negotiable Volume-related increase (decrease) (175) (175) — 54 54 — 96 96 — certificates Rate-related increase (decrease) 1,581 1,581 — 1,030 1,030 — 2,801 2,801 — of deposit Net increase (decrease) 1,405 1,405 — 1,084 1,084 — 2,897 2,897 —

Debentures Volume-related increase (decrease) 1,429 1,429 — 742 742 — 1,791 1,791 —Rate-related increase (decrease) 2,571 2,571 — 742 742 — 2,640 2,640 —Net increase (decrease) 4,001 4,001 — 1,485 1,485 — 4,431 4,431 —

Call money Volume-related increase (decrease) (523) (47) 124 (106) (2) 289 (573) (8) 293Rate-related increase (decrease) 980 322 56 1,747 169 1,185 3,104 494 1,750 Net increase (decrease) 456 275 181 1,641 166 1,474 2,530 486 2,043

Payables under Volume-related increase (decrease) (423) 0 (423) (687) (0) (437) (1,026) (0) (657) repurchase Rate-related increase (decrease) 25 — 25 661 — 412 1,011 — 642 agreements Net increase (decrease) (398) 0 (398) (26) (0) (25) (15) (0) (14)

Payables under Volume-related increase (decrease) (638) 0 (638) 397 (0) 438 (76) (0) (38) securities lending Rate-related increase (decrease) 392 — 392 1,199 — 1,158 2,009 — 1,972 transactions Net increase (decrease) (246) 0 (246) 1,596 (0) 1,597 1,933 (0) 1,933

Bills sold Volume-related increase (decrease) (15) (15) — (0) (0) — (1) (1) —Rate-related increase (decrease) — — — 15 15 — 15 15 —Net increase (decrease) (15) (15) — 15 15 — 13 13 —

Borrowed money Volume-related increase (decrease) 131 131 — 99 99 — 211 211 —Rate-related increase (decrease) 497 497 — 39 39 — 418 418 —Net increase (decrease) 628 628 — 138 138 — 630 630 —

Corporate bonds Volume-related increase (decrease) 103 103 — — — — — — —Rate-related increase (decrease) 6 6 — 720 720 — 1,548 1,548 —Net increase (decrease) 109 109 — 720 720 — 1,548 1,548 —

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

52

Fees and Commissions(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Net fees and commissions . . . . 5,718 4,994 723 6,166 5,889 276 12,588 11,419 1,168

Fees and commissions income . . . . . . . . . . . . . . . . . 6,441 5,354 1,086 7,054 6,331 723 14,250 12,281 1,969

Debentures, deposits and loan operations . . . . . . . . 3,899 2,990 908 5,493 4,749 744 10,504 8,733 1,771Foreign exchange operations . . . . . . . . . . . . 105 67 37 103 62 40 205 124 80Securities-related operations . . . . . . . . . . . . 882 882 — 891 705 185 1,787 1,601 185Agency services . . . . . . . . . 1,138 1,093 45 647 623 23 1,439 1,385 53Safekeeping and safe deposit box services . . . . 0 0 — 0 0 — 7 7 —Guarantee operations . . . . 152 55 96 111 65 46 248 128 119Others . . . . . . . . . . . . . . . . 263 265 (1) (193) 124 (317) 57 298 (241)

Fees and commissions expenses . . . . . . . . . . . . . . . 723 359 363 888 441 446 1,661 861 800

Foreign exchange operations . . . . . . . . . . . . 46 33 13 38 30 7 76 61 15Others . . . . . . . . . . . . . . . . 676 326 350 849 410 438 1,585 800 784

Trading Revenues(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Net trading revenues . . . . . . . . 3,759 1,442 2,316 3,149 (12,346) 15,495 5,428 (12,143) 17,571

Trading profits . . . . . . . . . . . . 3,832 1,522 2,309 3,149 (12,346) 15,495 5,428 (12,143) 17,571Gains on trading securities . . . . . . . . . . . . . 0 0 — 0 0 — 0 0 —Gains on securities related to trading transactions . . . . . . . . . . . — — — 34 95 (60) 72 104 (31)Gains on trading-related financial derivatives . . . . . 3,832 1,522 2,309 3,114 (12,441) 15,556 5,355 (12,248) 17,603Others . . . . . . . . . . . . . . . . — — — — — — — — —

Trading losses . . . . . . . . . . . . 72 79 (6) — — — — — —Losses on trading securities . . . . . . . . . . . . . — — — — — — — — —Losses on securities related to trading transactions . . . . . . . . . . . 72 79 (6) — — — — — —Losses on trading-related financial derivatives . . . . . — — — — — — — — —Others . . . . . . . . . . . . . . . . — — — — — — — — —

53

Other Operating Income(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Net other operating income . . . 7,058 2,144 4,914 23,995 14,694 9,300 46,257 21,864 24,392

Other operating income . . . . 21,084 7,867 13,216 25,914 16,388 9,525 51,442 25,575 25,867Gains on foreign exchange transactions . . . . . . . . . . . 3,100 — 3,100 1,591 — 1,591 2,239 — 2,239Gains on sales of bonds . . 1,113 825 288 8,133 5,562 2,571 12,182 8,879 3,303Gains on redemption of bonds . . . . . . . . . . . . . 1,270 — 1,270 99 — 99 386 — 386Gains on derivatives . . . . . — — — 301 124 176 465 278 187Other . . . . . . . . . . . . . . . . . 15,599 7,042 8,557 15,788 10,702 5,086 36,167 16,417 19,749

Other operating expenses . . 14,025 5,722 8,302 1,918 1,694 224 5,185 3,710 1,474Losses on foreign exchange transactions . . . . . . . . . . . — — — — — — — — —Losses on sales of bonds . . 5,424 3,678 1,745 863 835 28 1,575 1,146 429Losses on redemption of bonds . . . . . . . . . . . . . — — — 298 180 117 — — —Losses on write-off of bonds . . . . . . . . . . . . . . 4,638 — 4,638 — — — — — —Amortization of debenture and corporate bonds issuance expenses . . . . . 225 225 — 157 157 — 368 368 —Losses on derivatives . . . . . 1,752 363 1,389 — — — — — —Other . . . . . . . . . . . . . . . . . 1,983 1,454 529 599 521 78 3,240 2,195 1,045

General and Administrative Expenses(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 23,309 23,868 48,309Salaries and related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,285 7,273 15,102Retirement benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954 1,527 3,061Welfare expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 307 600Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410 458 3,354Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,670 996 —Rent and lease expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,440 2,468 4,982Building and maintenance expenses . . . . . . . . . . . . . . . . . . . . . . . . . 50 144 219Supplies expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 161 272Water, lighting and heating expenses . . . . . . . . . . . . . . . . . . . . . . . . 320 321 634Traveling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 248 468Communication expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366 403 751Publicity and advertising expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 696 605 1,352Taxes, other than income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,287 1,707 3,036Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,171 7,242 14,472

54

Debenture Operations (Non-Consolidated)

Outstanding Balance and Average of Debentures(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Term-end Average Term-end Average Term-end Average balance balance balance balance balance balance

Aozora debentures . . . . . . . . . . . . . . . . . . 1,762,413 1,594,543 1,206,360 1,106,959 1,427,068 1,207,388

Discounted Aozora debentures . . . . . . . . . 25,078 26,228 30,139 32,602 27,456 30,718

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,787,492 1,620,771 1,236,500 1,139,562 1,454,525 1,238,107Note: Debentures do not include debenture subscriptions.

Balance by Residual Period(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Discounted Discounted DiscountedAozora Aozora Aozora Aozora Aozora Aozora

Total debentures debentures Total debentures debentures Total debentures debentures

Less than 1 year . . . . . . . . . . 739,450 714,386 25,063 484,124 453,993 30,130 585,387 557,973 27,4131–3 years . . . . . . . . . . . . . . . . 942,188 942,173 14 620,745 620,736 9 760,313 760,270 423–5 years . . . . . . . . . . . . . . . . 105,852 105,852 131,630 131,630 108,824 108,8245–7 years . . . . . . . . . . . . . . . . 1 1 — — 0 0Over 7 years . . . . . . . . . . . . . — — — — — —

Total . . . . . . . . . . . . . . . . . . . 1,787,492 1,762,413 25,078 1,236,500 1,206,360 30,139 1,454,525 1,427,068 27,456

Outstanding Balance of Debentures per Branch(Number of Branches, Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic Overseas Domestic Overseas Domestic OverseasTotal branches branches Total branches branches Total branches branches

Number of branches . . . . . . . 19 19 — 18 18 — 19 19 —Outstanding balance of debentures per branch . . . . 94,079 94,079 — 68,694 68,694 — 76,553 76,553 —

Outstanding Balance of Debentures per Employee(Number of Employees, Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic Overseas Domestic Overseas Domestic OverseasTotal offices offices Total offices offices Total offices offices

Number of employees . . . . . . 1,378 1,378 — 1,273 1,273 — 1,290 1,290 —Outstanding balance of debentures per employee . . 1,297 1,297 — 971 971 — 1,127 1,127 —Note: Number of employees represents the average number of employees in each fiscal year. The number of employees in domestic offices includes head

office staff.

55

Deposit Operations (Non-Consolidated)

Balance by Deposit Account(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

DepositsLiquid deposits Average balance 317,385 317,385 — 321,519 321,519 — 317,022 317,022 —

(%) (14.17) (14.30) (14.48) (14.75) (14.16) (14.37)Term-end balance 306,609 306,609 — 373,284 373,284 — 355,675 355,675 —(%) (13.17) (13.27) (15.88) (16.05) (15.14) (15.27)

Interest-bearing Average balance 281,313 281,313 — 267,826 267,826 — 268,081 268,081 — deposits (%) (12.56) (12.67) (12.06) (12.29) (11.98 ) (12.15 )

Term-end balance 279,900 279,900 — 282,467 282,467 — 299,958 299,958 —(%) (12.02) (12.11) (12.02) (12.14) (12.77 ) (12.88 )

Time deposits Average balance 1,899,907 1,899,907 — 1,855,944 1,855,944 — 1,886,058 1,886,058 — (in general) (%) (84.84) (85.59) (83.60) (85.15) (84.26) (85.51)

Term-end balance 2,003,260 2,003,260 — 1,951,544 1,951,544 — 1,971,248 1,971,248 —(%) (86.04) (86.69) (83.03) (83.90) (83.91) (84.62)

Deregulated Average balance 1.337,534 1,337,534 1,505,720 1,505,720 1,472,100 1,472,100 interest rate (%) (59.73) (60.25) (67.83) (69.08) (65.77 ) (66.75 ) time deposits Term-end balance 1,403,323 1,403,323 1,534,242 1,534,242 1,434,043 1,434,043 (fixed) (%) (60.27) (60.72) (65.27) (65.96) (61.04 ) (61.56 )

Deregulated Average balance 562,373 562,373 350,223 350,223 413,958 413,958 interest rate (%) (25.11) (25.33) (15.78) (16.07) (18.49 ) (18.77 ) time deposits Term-end balance 599,936 599,936 417,302 417,302 537,205 537,205 (floating) (%) (25.77) (25.96) (17.75) (17.94) (22.87 ) (23.06 )

Others Average balance 22,183 2,608 19,574 42,470 2,241 40,228 35,205 2,464 32,740(%) (0.99 ) (0.12) (100.00) (1.91) (0.10) (100.00) (1.57) (0.11 ) (100.00)Term-end balance 18,481 1,088 17,393 25,671 1,329 24,341 22,241 2,723 19,518(%) (0.83 ) (0.05) (100.00) (1.09) (0.06) (100.00) (0.95) (0.12 ) (100.00)

Subtotal Average balance 2,239,475 2,219,900 19,574 2,219,934 2,179,705 40,228 2,238,286 2,205,545 32,740(%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)Term-end balance 2,328,351 2,310,957 17,393 2,350,500 2,326,158 24,341 2,349,165 2,329,647 19,518(%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)

Negotiable certificates Average balance 825,424 825,424 — 970,479 970,479 — 916,215 916,215 — of deposit Term-end balance 749,530 749,530 — 982,010 982,010 — 902,980 902,980 —

Total Average balance 3,064,899 3,045,325 19,574 3,190,413 3,150,184 40,228 3,154,502 3,121,761 32,740Term-end balance 3,077,881 3,060,487 17,393 3,332,510 3,308,168 24,341 3,252,145 3,232,627 19,518

Notes: 1. Time deposits (in general) = Time depositsDeregulated interest rate time deposits (fixed) = Deregulated interest rate time deposits for which the interest up to the due date is determined

when the deposits are made.Deregulated interest rate time deposits (floating) = Deregulated interest rate time deposits for which the interest varies according to changes in

market interest rates during the period of deposit.2. Liquid deposits = Deposits at notice + ordinary deposits + current deposits3. Average balance of domestic offices’ foreign currency-denominated transactions in the international operations sector has been computed by the

daily current method.

56

Balance of Time Deposits by Residual Period(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Deregulated Deregulated Deregulated Deregulated Deregulated Deregulatedinterest rate interest rate interest rate interest rate interest rate interest rate

Total (fixed) (floating) Total (fixed) (floating) Total (fixed) (floating)

Less than 3 months . . . . . . . . 379,358 379,108 250 336,188 336,188 — 441,266 434,666 6,6003–6 months . . . . . . . . . . . . . . 141,186 140,186 1,000 243,100 241,200 1,900 150,348 150,348 —6 months–1 year . . . . . . . . . . 263,509 248,309 15,200 295,211 288,611 6,600 290,376 289,026 1,3501–2 years . . . . . . . . . . . . . . . . 231,519 214,619 16,900 324,455 310,505 13,950 198,448 174,698 23,7502–3 years . . . . . . . . . . . . . . . . 349,272 274,124 75,147 203,702 190,532 13,170 281,495 260,595 20,900More than 3 years . . . . . . . . . 638,414 146,974 491,439 548,887 167,205 381,682 609,313 124,708 484,605

Total . . . . . . . . . . . . . . . . . . . 2,003,260 1,403,323 599,936 1,951,544 1,534,242 417,302 1,971,248 1,434,043 537,205

Outstanding Balance by Depositor(Millions of Yen, %)

Sep. 2007 Sep. 2006 Mar. 2007

Balance Share Balance Share Balance Share

Corporations . . . . . . . . . . . . . . . . . . . . . . . 472,567 20.30 552,448 23.58 512,914 21.84Individuals . . . . . . . . . . . . . . . . . . . . . . . . . 1,439,193 61.82 1,354,834 57.82 1,384,983 58.98Public sector . . . . . . . . . . . . . . . . . . . . . . . 30,115 1.29 98,410 4.20 49,211 2.10Financial institutions . . . . . . . . . . . . . . . . . 386,186 16.59 337,529 14.40 400,943 17.08

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,328,063 100.00 2,343,222 100.00 2,348,052 100.00Note: The above balance does not include negotiable certificates of deposit and deposits in offshore market accounts.

Deposits per Branch(Number of Branches, Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic Overseas Domestic Overseas Domestic OverseasTotal branches branches Total branches branches Total branches branches

Number of branches . . . . . . . 19 19 — 18 18 — 19 19 —Deposits per branch . . . . . . . 161,994 161,994 — 185,139 185,139 — 170,138 170,138 —Note: Deposits include negotiable certificates of deposit.

Deposits per Employee(Number of Employees, Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic Overseas Domestic Overseas Domestic OverseasTotal offices offices Total offices offices Total offices offices

Number of employees . . . . . . 1,378 1,378 — 1,273 1,273 — 1,290 1,290 —Deposits per employee . . . . . 2,234 2,234 — 2,511 2,511 — 2,505 2,505 —Notes: 1. Deposits include negotiable certificates of deposit.

2. Number of employees represents the average number of employees in each fiscal year. The number of employees in domestic offices includeshead office staff.

57

Loan Operations (Non-Consolidated)

Outstanding Balance of LoansFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Loans on deeds Average balance 2,935,650 2,704,744 230,905 2,568,558 2,388,782 179,775 2,652,334 2,472,958 179,375Term-end balance 3,027,601 2,714,633 312,967 2,641,795 2,459,729 182,066 2,898,732 2,700,370 198,362

Loans on notes Average balance 196,228 196,014 214 251,029 251,029 — 232,863 232,684 178Term-end balance 222,548 221,454 1,094 214,051 214,051 — 207,262 207,262 —

Overdrafts Average balance 257,050 257,050 — 358,306 358,306 — 329,804 329,804 —Term-end balance 262,850 262,850 — 377,628 377,628 — 251,793 251,793 —

Bills discounted Average balance 3,473 3,473 — 3,696 3,696 — 3,589 3,589 —Term-end balance 4,122 4,122 — 4,517 4,517 — 4,739 4,739 —

Total Average balance 3,392,402 3,161,282 231,119 3,181,591 3,001,815 179,775 3,218,592 3,039,037 179,554Term-end balance 3,517,123 3,203,061 314,061 3,237,993 3,055,926 182,066 3,362,528 3,164,166 198,362

Notes: 1. The average balance of foreign currency-denominated transactions by domestic offices in international operations has been calculated using thedaily current method.

2. The Bank carries out partial and direct write-off of loans. This also applies to the table shown below.

Balance by Residual Period(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Fixed Floating Fixed Floating Fixed FloatingTotal interest interest Total interest interest Total interest interest

Less than 1 year . . . . . . . . . . 1,213,788 1,236,574 1,140,9791–3 years . . . . . . . . . . . . . . . . 895,795 308,559 587,236 876,880 349,581 527,298 888,756 311,350 577,4053–5 years . . . . . . . . . . . . . . . . 820,269 296,250 524,018 709,797 247,688 462,109 788,873 299,447 489,4265–7 years . . . . . . . . . . . . . . . . 309,510 92,153 217,356 219,290 84,616 134,674 276,671 101,966 174,705Over 7 years . . . . . . . . . . . . . 277,409 103,730 173,678 195,029 101,190 93,838 266,852 104,340 162,512Indefinite period . . . . . . . . . . . 349 — 349 421 — 421 394 — 394

Total . . . . . . . . . . . . . . . . . . . 3,517,123 3,237,993 3,362,528Note: No distinction has been made between fixed interest and floating interest for loans with a residual period of less than 1 year.

Ratio of Loans and Bills Discounted to Debentures/Deposits(Millions of Yen, %)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Loans and bills discounted (A) 3,517,123 3,203,061 314,061 3,237,993 3,055,926 182,066 3,362,528 3,164,166 198,362Debentures and deposits (B) . . 4,865,374 4,847,980 17,393 4,569,010 4,544,668 24,341 4,706,671 4,687,153 19,518

(A)/(B) . . . . . . . . . . . . . . . . . . 72.28 66.07 1,805.57 70.86 67.24 747.95 71.44 67.50 1,016.28

Average during the year . . . . 72.39 67.75 1,180.70 73.47 69.97 446.88 73.27 69.70 548.41Notes: 1. Debentures do not include debenture subscriptions.

2. Deposits include negotiable certificates of deposit.

Loans to Small and Medium-Sized Corporations(Number of Borrowers, Millions of Yen, %)

Sep. 2007 Sep. 2006 Mar. 2007

Number of Number of Number ofborrowers Value borrowers Value borrowers Value

Total domestic loans (A) . . . . . . . . . . . . . . 3,504 3,509,483 3,823 3,214,296 3,674 3,352,574

Loans to small and medium-sized corporations (B) . . . . . . . . . . . . . . . . . . . . 2,836 1,747,699 3,123 1,600,898 2,953 1,588,476

(B)/(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.94 49.80 81.69 49.81 80.37 47.38Notes: 1. In this table, the balance of loans and bills discounted does not include offshore banking accounts.

2. Small and medium-sized corporations, etc., are defined as companies having capital of not more than ¥300 million (¥100 million in wholesale, and¥50 million in retail and services business categories), or companies with not more than 300 full-time employees (100 in wholesale, 50 in retail and100 in services business categories), and individuals.

58

Breakdown of Loans and Bills Discounted by Industry(Millions of Yen, %)

Sep. 2007 Sep. 2006 Mar. 2007

Balance of loans Share Balance of loans Share Balance of loans Share

Loans by domestic offices (excluding Japan Offshore Market accounts) . . . . . . . . . . . . . . . . . 3,509,483 100.00 3,214,296 100.00 3,352,574 100.00

Manufacturing . . . . . . . . . . . . . . . . . . . . 331,336 9.44 337,780 10.51 335,933 10.02Agriculture, forestry and fisheries . . . . . 5,616 0.16 5,659 0.18 5,208 0.16Mining . . . . . . . . . . . . . . . . . . . . . . . . . . 6,474 0.18 7,138 0.22 6,822 0.20Construction . . . . . . . . . . . . . . . . . . . . . 63,708 1.82 60,575 1.88 57,610 1.72Utilities (Electricity, gas, heat supply & water) . . . . . . . . . . . . . . . . . . . . . . . . 49,368 1.41 17,499 0.54 50,020 1.49Information and communications . . . . . 81,825 2.33 167,750 5.22 108,515 3.24Transport . . . . . . . . . . . . . . . . . . . . . . . . 196,252 5.59 177,953 5.54 170,419 5.08Wholesale and retail . . . . . . . . . . . . . . . 217,071 6.19 222,644 6.93 226,974 6.77Financial and insurance . . . . . . . . . . . . . 607,040 17.30 459,499 14.30 528,632 15.77Real estate . . . . . . . . . . . . . . . . . . . . . . 880,514 25.09 871,428 27.11 886,762 26.45Various services . . . . . . . . . . . . . . . . . . 454,503 12.95 477,107 14.84 443,664 13.23Local government . . . . . . . . . . . . . . . . . 80,711 2.30 19,329 0.60 77,999 2.33Others . . . . . . . . . . . . . . . . . . . . . . . . . . 535,058 15.25 389,928 12.13 454,011 13.54

Loans by overseas offices (including Japan Offshore Market accounts) . . . . . . . . . . . . . . . . . 7,639 100.00 23,697 100.00 9,954 100.00

Financial institutions . . . . . . . . . . . . . . . — — — — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . 7,639 100.00 23,697 100.00 9,954 100.00

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,517,123 3,237,993 3,362,528Note: “Domestic” refers to the Bank’s head office and branch offices; “overseas” refers to the Bank’s overseas branch offices.

Risk-Monitored Loans by Industry(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Loans by domestic offices (excluding Japan Offshore Market accounts)

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,398 5,985 4,300Agriculture, forestry and fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 177 63Utilities (Electricity, gas, heat supply & water) . . . . . . . . . . . . . . . . . . — 17 12Information and communications . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 328 490Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,002 990 1,090Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,854 1,765 790Financial and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 2,647 —Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,419 2,440 2,643Various services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,434 7,254 19,382Local government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,346 1,219 4,192

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,802 22,826 32,964

Balance of Loans and Bills Discounted, Classified by Purpose(Millions of Yen, %)

Sep. 2007 Sep. 2006 Mar. 2007

Balance of loans Share Balance of loans Share Balance of loans Share

Funds for capital investment . . . . . . . . . . . 645,359 18.35 576,840 17.81 615,418 18.30Funds for working capital . . . . . . . . . . . . . 2,871,763 81.65 2,661,152 82.19 2,747,110 81.70

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,517,123 100.00 3,237,993 100.00 3,362,528 100.00

59

Loans per Branch(Number of Branches, Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic Overseas Domestic Overseas Domestic OverseasTotal offices offices Total offices offices Total offices offices

Number of branches . . . . . . . 19 19 — 18 18 — 19 19 —Loans per branch . . . . . . . . . 185,111 185,111 — 179,888 179,888 — 176,975 176,975 —

Breakdown of Balance of Acceptances and Guarantees(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Acceptances of bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,635 28,187 35,621

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,635 28,187 35,621

Breakdown of Loans and Bills Discounted by Collateral(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,829 87,059 127,843Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,212 51,780 80,397Merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395,872 505,143 419,788Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,855 77,610 70,835

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516,770 721,594 698,864

Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229,947 162,257 242,664Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,770,405 2,354,141 2,421,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,517,123 3,237,993 3,362,528

Breakdown of Collateral for Customers’ Liabilities for Acceptances and Guarantees(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 321 356Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,213 3,115 2,359

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,330 3,436 2,716

Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,723 — 579Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,582 24,751 32,325

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,635 28,187 35,621

Consumer Loans Outstanding(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,713 21,805 35,986Housing loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,242 12,785 22,547Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,470 9,019 13,438

Note: Consumer loans outstanding includes personal housing loans, as well as personal loans for general spending purposes and tax payments, and doesnot include business loans to sole proprietorships or their owners.

60

Loans per Employee(Number of Employees, Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic Overseas Domestic Overseas Domestic OverseasTotal offices offices Total offices offices Total offices offices

Number of employees . . . . . . 1,378 1,378 — 1,273 1,273 — 1,290 1,290 —Loans per employee . . . . . . . 2,552 2,552 — 2,543 2,543 — 2,606 2,606 —Note: Number of employees represents the average number of employees in each fiscal year. The number of employees in domestic offices includes head

office staff.

Write-Off of Loans(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Write-off of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 597 2,933 4,031

Reserves for Possible Loan LossesFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Reduction during period Reduction during period Reduction during year

General reserve . . 46,567 40,386 — 46,567 40,386 62,699 47,370 — 62,699 47,370 62,699 46,567 — 62,699 46,567

Specific reserve . . 15,653 15,721 320 15,332 15,721 18,653 14,691 2,278 16,375 14,691 18,653 15,653 2,561 16,092 15,653related to non-residents . . 373 670 20 352 670 — 134 — — 134 — 373 — — 373

Reserve for loans to restructuring countries . . . . . . 54 — — 54 — 355 76 — 355 76 355 54 — 355 54

Balanceat

beginningof period

Provision Used forspecificpurpose

Other

Balanceat end of

period

Balanceat

beginningof period

Provision Used forspecificpurpose

Other

Balanceat end of

period

Balanceat

beginningof year

Provision Used forspecificpurpose

Other

Balanceat end of

year

Country Risk Reserve(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 7,905 6,019Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 7,905 6,019(Percentage of total assets) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.12%) (0.09%)Note: Receivables associated with specific overseas countries consist of loans and bills discounted, and are provided for as reserves for possible loan

losses (country risk reserve).

Credits to Major Shareholder Groups(Number of Borrowers, Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Cerberus Group (Number of borrowers) 2 2 2(Credit balance) 26,325 28,583 28,597

ORIX Group (Number of borrowers) 5(Credit balance) 40,867

Tokio Marine & Nichido Fire (Number of borrowers) 3Insurance Group (Credit balance) 1,551Total (Number of borrowers) 2 10 2

(Credit balance) 26,325 71,001 28,597Notes: 1. Figures for credit balances refer to credit extended by Aozora Bank, its subsidiaries and affiliated companies.

2. The Bank’s “major shareholder groups” refer to major shareholders (i.e. those with over 10% of the Bank’s shareholder voting rights) as well astheir subsidiaries and affiliated companies. The ORIX Corporation group and the Tokio Marine & Nichido Fire Insurance Co., Ltd., group were notincluded in the major shareholder groups from November 14, 2006, as their shareholder voting rights were less than 10%.

3. Credit balance consists of loans, acceptances and guarantees, equity holdings/interest and derivative transactions.

61

(Millions of Yen)

Sep. 2006

Japanese national Japanese local Japanesegovernment government corporate Japanese

bonds bonds bonds stocks Others

Less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789,533 116 7,720 107,4721–3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,002 594 20,484 214,4623–5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,220 795 25,686 77,6665–7 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,013 213 12,967 9,4867–10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,043 1,313 2,300 109,401Over 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,987 421 — 154,424Indefinite period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 47,158 346,939

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 978,800 3,455 69,159 47,158 1,019,853

Securities (Non-Consolidated)

Outstanding Balance and Average Balance of Securities Held(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Total Average balance 2,300,860 1,284,432 1,016,428 2,078,771 1,242,197 836,573 2,189,225 1,299,255 889,970(%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)Term-end balance 2,186,113 1,152,693 1,033,420 2,118,428 1,239,230 879,197 2,332,881 1,352,022 980,859(%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)

Japanese national Average balance 956,467 956,467 — 973,768 973,768 — 1,029,995 1,029,995 —government (%) (41.57) (74.47) — (46.84) (78.39) — (47.05 ) (79.28 ) —bonds Term-end balance 812,839 812,839 — 978,800 978,800 — 1,022,737 1,022,737 —

(%) (37.18) (70.52) — (46.20) (78.98) — (43.85 ) (75.65 ) —

Japanese local Average balance 4,320 4,320 — 3,548 3,548 — 3,550 3,550 —government (%) (0.19) (0.34) — (0.17) (0.29) — (0.16) (0.27) —bonds Term-end balance 2,750 2,750 — 3,455 3,455 — 3,805 3,805 —

(0.13) (0.24) — (0.16) (0.28) — (0.16) (0.28) —

Japanese Average balance 71,222 71,222 — 73,228 73,228 — 71,283 71,283 —corporate (%) (3.10) (5.55) — (3.52) (5.90) — (3.25) (5.49) —bonds Term-end balance 64,260 64,260 — 69,159 69,159 — 75,220 75,220 —

(%) (2.94) (5.57) — (3.26) (5.58) — (3.22) (5.56) —

Japanese Average balance 45,931 45,391 — 46,190 46,190 — 46,129 46,129 —stocks (%) (1.97) (3.53) — (2.22) (3.72) — (2.11) (3.55) —

Term-end balance 47,782 47,782 — 47,158 47,158 — 50,797 50,797 —(%) (2.19) (4.15) — (2.23) (3.81) — (2.18) (3.76) —

Others Average balance 1,223,458 207,030 1,016,428 982,034 145,460 836,573 1,038,267 148,296 889,970(%) (53.17) (16.12) (100.00 ) (47.24) (11.71) (100.00 ) (47.43 ) (11.41 ) (100.00 )Term-end balance 1,258,481 225,061 1,033,420 1,019,853 140,655 879,197 1,180,320 199,461 980,859(%) (57.57) (19.52) (100.00 ) (48.14) (11.35) (100.00 ) (50.59 ) (14.75 ) (100.00 )

Notes: 1. Total for Others is the sum of domestic operations and international operations.2. The average balance of foreign currency-denominated transactions by domestic offices in international operations has been calculated using the

daily current method.

Balance of Securities by Residual Period(Millions of Yen)

Sep. 2007

Japanese national Japanese local Japanesegovernment government corporate Japanese

bonds bonds bonds stocks Others

Less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514,489 311 9,733 9,3061–3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,043 884 18,596 87,4253–5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,296 234 14,162 26,4425–7 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 340 7,700 323,2657–10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,550 586 — 187,447Over 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,461 393 14,068 132,595Indefinite period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 47,782 491,998

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812,839 2,750 64,260 47,782 1,258,481

62

Securities Business (Non-Consolidated)

Ratio of Securities to Debentures and Deposits(Millions of Yen, %)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic International Domestic International Domestic InternationalTotal operations operations Total operations operations Total operations operations

Securities (A) . . . . . . . . . . . . . 2,186,113 1,152,693 1,033,420 2,118,428 1,239,230 879,197 2,332,881 1,352,022 980,859Debentures and deposits (B) . . 4,865,374 4,847,980 17,393 4,569,010 4,544,668 24,341 4,706,671 4,687,153 19,518

Ratio (A)/(B) . . . . . . . . . . . . . . 44.93 23.77 5,941.24 46.36 27.26 3,611.86 49.56 28.84 5,025.33Average during the year . . . . 49.10 27.52 5,192.56 48.00 28.95 2,079.53 49.83 29.80 2,718.24Notes: 1. Debentures do not include debenture subscriptions.

2. Deposits include negotiable certificates of deposits.

Underwriting of Public Bonds(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . — — —Japanese local government bonds and government-guaranteed bonds . . . — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

Over-the-Counter Sales of Public Bonds and Securities Investment Trusts(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . — — —Japanese local government bonds and government-guaranteed bonds . . . — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

Securities investment trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,139 34,553 82,275

Average Balance of Securities (Trading Account)(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Japanese national government bonds (trading account) . . . . . . . . . . . 0 2 0

Japanese local government bonds (trading account) . . . . . . . . . . . . . . — — —

Japanese government-guaranteed bonds (trading account) . . . . . . . . — — —

Debentures (trading account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 2 0

Note: The Bank has established a trading account.

Balance of Securities by Residual Period(Millions of Yen)

Mar. 2007

Japanese national Japanese local Japanesegovernment government corporate Japanese

bonds bonds bonds stocks Others

Less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629,398 283 14,762 56,7621–3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,551 369 15,766 92,6743–5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,785 845 17,208 52,6205–7 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,058 196 13,782 7,9157–10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,717 1,703 — 384,549Over 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,225 407 13,701 134,213Indefinite period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 50,797 451,585

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,022,737 3,805 75,220 50,797 1,180,320

63

International Operations (Non-Consolidated)

Foreign Exchange Transactions(Millions of U.S. Dollars)

Sep. 2007 Sep. 2006 Mar. 2007

Outward exchanges: Foreign bills sold . . . . . . . . . . . . . . 5,302 4,395 9,136Foreign bills bought . . . . . . . . . . . — — 0

Incoming exchanges: Foreign bills payable . . . . . . . . . . . 1,779 1,854 4,236Foreign bills receivable . . . . . . . . . — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,082 6,250 13,372

Balance of Assets in International Operations(Millions of Yen)

Sep. 2007 Sep. 2006 Mar. 2007

Domestic Overseas Domestic Overseas Domestic OverseasTotal offices offices Total offices offices Total offices offices

Balance of assets in international operations . . . . 1,552,608 1,552,608 — 1,240,038 1,240,038 — 1,151,255 1,151,255 —

64

Hedge accounting for interest rate risk• The Bank applied hedge accounting in accordance with the rules stipulated in JICPA Industry Audit Committee Report No. 24.

Hedge accounting for foreign currency risk• The Bank applied hedge accounting in accordance with the rules stipulated in JICPA Industry Audit Committee Report No. 25.

Notes: 1. Unrealized gains or losses on hedging instruments that qualify for hedge accounting are shown below.2. Valuation gains (losses) from interest rate swaps included accrued interest income on interest rate swap transactions of ¥567 million as of

September 30, 2007 and ¥1,080 million as of September 30, 2006.3. Valuation gains (losses) from currency swaps included accrued interest expenses on currency swap transactions of ¥3,508 million as of

September 30, 2007 and ¥2,919 million as of September 30, 2006.

Interest Rate SwapsFor the six-month periods ended September 30, 2007 and 2006

(Millions of Yen)

Sep. 2007 Sep. 2006

Contract amount Valuation Contract amount ValuationOver one year Fair value gains (losses) Over one year Fair value gains (losses)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,524,000 1,119,800 (2,741) (2,741) 1,453,600 1,078,300 (1,655) (1,655)

Receivable fixed rate/

Payable floating rate . . . . . . . . . . . . . . 1,524,000 1,119,800 (2,741) (2,741) 1,443,600 1,068,300 (1,671) (1,671)

Receivable floating rate/

Payable fixed rate . . . . . . . . . . . . . . . . — — — — 10,000 10,000 15 15

Receivable floating rate/

Payable floating rate . . . . . . . . . . . . . . — — — — — — — —

Currency SwapsFor the six-month periods ended September 30, 2007 and 2006

(Millions of Yen)

Sep. 2007 Sep. 2006

Contract amount Valuation Contract amount ValuationOver one year Fair value gains (losses) Over one year Fair value gains (losses)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655,334 449,139 (3,261) (3,261) 466,963 23,584 (2,500) (2,500)

Derivative Transactions (Hedging Instruments)

65

Other Operations (Non-Consolidated)

Automated Installations

As of September 30, 2007

Automated teller machines (ATMs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Principal Fees and Commissions(As of September 30, 2007)

To Other Banks

By Wire By Telegraph

Transfers Handled at Clients with On transfers up to ¥210 ¥525 ¥420(Note 1) the counter accounts at ¥30,000

the Bank On transfers exceeding ¥420 ¥735 ¥630¥30,000

Clients without On transfers up to ¥210accounts at ¥30,000the Bank On transfers exceeding ¥420

¥1,000 ¥1,000

¥30,000

Collection of For same-site (local) payment Per item ¥210 ¥210payments For different-site (remote) payment Per item ¥420 Urgent Normal

¥840 ¥630

Checks and notes Checks cost ¥630 for one book of 50 sheetsNotes cost ¥1,050 for one book of 50 sheets

Cashier’s checks ¥525 per check

Document/Card reissuing ¥1,050 to reissue each account book, transaction receipt orcertificate¥1,050 to reissue each card

Balance verification ¥420 per section each timeNotes: 1. Changed February 1, 2007.

2. Amounts include 5% consumption tax and regional tax.

To Aozora BankHead Office/

Branch

Domestic Exchange TransactionsFor the six-month periods ended September 30, 2007 and 2006, and the year ended March 31, 2007

(Millions of Yen, Thousands of Transactions)

Sep. 2007 Sep. 2006 Mar. 2007

Value of Number of Value of Number of Value of Number oftransactions transactions transactions transactions transactions transactions

Money transfer Sent . . . . . . . . . . . . . . . . . . . . . . . 3,955,214 419 5,187,590 344 9,898,889 729 Received . . . . . . . . . . . . . . . . . . . 3,521,215 233 4,370,405 175 7,897,524 393

Money transfer by check Sent . . . . . . . . . . . . . . . . . . . . . . . 50,352 4 43,644 3 86,617 9 Received . . . . . . . . . . . . . . . . . . . 32,363 4 34,263 4 72,395 9

66

(Millions of Yen)

Capital CapitalMonth/Year

increases thereafterRemarks

Sep. 2000 66,666 419,781 Compensatory private placement (common stock, 333,334 thousand shares);Issue price ¥300; Transfer to capital ¥200

Oct. 2000 (260,000) 159,781 Non-compensatory reduction of capital• Capital reduction of ¥105,287 million by redemption of the 2nd preferred

stock, 102,000 thousand shares; the 3rd preferred stock, 386,398 thousandshares; and the 4th preferred stock, 71,856 thousand shares

• Capital reduction of ¥154,712 million exceeding face amount of commonstock and transferred to capital

Oct. 2000 260,000 419,781 Compensatory private placement (the 5th preferred stock, 866,667 thousandshares); Issue price ¥300; Transfer to capital ¥300

Capitalization (Non-Consolidated)

History of Capitalization

Major Shareholders(As of September 30, 2007)

c. Class C Series 5 Preferred Stock

Number of shares held Percentage oftotal outstanding shares

The Resolution and Collection Corporation . . . . . . . . . . . . . . . . . . 258,799,500 100.00%

b. Class A Series 4 Preferred Stock

Number of shares heldPercentage of

total outstanding shares

Deposit Insurance Corporation of Japan . . . . . . . . . . . . . . . . . . . . 24,072,000 100.00%

a. Common Stock

Number of shares heldPercentage of

total outstanding shares

Cerberus NCB Acquisition, L.P., General Partner Cerberus Aozora GP LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618,659,000 37.49%

ORIX Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,981,500 9.09

Tokio Marine & Nichido Fire Insurance Co., Ltd. . . . . . . . . . . . . . . 149,974,500 9.09

The Master Trust Bank of Japan, Ltd. (Trust Account) . . . . . . . . . . 38,235,000 2.32

Japan Trustee Services Bank, Ltd. (Trust Account) . . . . . . . . . . . . 32,648,000 1.98

BNY FOR GCM CLIENT ACCOUNTS (E)ISG . . . . . . . . . . . . . . . . . 21,513,208 1.30

MORGAN STANLEY & CO. INC . . . . . . . . . . . . . . . . . . . . . . . . . . 20,333,499 1.23

MORGAN WHITEFRIARS EQUITY DERIVATIVES . . . . . . . . . . . . . 20,213,967 1.22

CREDIT SUISSE ZURICH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,548,000 1.00

CREDIT SUISSE (HONGKONG) LIMITED . . . . . . . . . . . . . . . . . . . 16,543,000 1.00

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565,497,678 34.28

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,650,147,352 100.00

67

Ownership and Distribution of Shares(As of September 30, 2007)

a. Common StockStock Status (1 tangen unit = 1,000 shares)

National Foreign Investors Fractionaland Financial Other shares of

municipal Financial instruments domestic Other than Individuals commonClassification government institutions firms companies individuals Individuals and others Total stock

Number of shareholders. . — 183 33 1,226 218 13 48,195 49,868 —Number of shares held (tangen) . . . . . . . . . . . . — 354,715 7,330 182,169 954,365 27 151,501 1,650,107 40,352Percentage of total number of shares . . . . . — 21.50 0.44 11.04 57.84 0.00 9.18 100.00 —Notes: 1. Treasury stock of 2,932 shares comprises two tangen units under Individuals and others and 932 shares under Fractional shares of common stock.

2. In the Other domestic companies column, shares in the name of Japan Securities Depository Center, Inc., represent 91 tangen units.

b. Class A Series 4 Preferred Stock

Stock Status (1 tangen unit = 1,000 shares)

National Foreign Investors Fractionaland Financial Other shares of

municipal Financial instruments domestic Other than Individuals commonClassification government institutions firms companies individuals Individuals and others Total stock

Number of shareholders. . — — — 1 — — — 1 —Number of shares held (tangen) . . . . . . . . . . . . . . — — — 24,072 — — — 24,072 —Percentage of total number of shares . . . . . . — — — 100.00 — — — 100.00 —

c. Class C Series 5 Preferred StockStock Status (1 tangen unit = 1,000 shares)

NationalForeign Investors

Fractionaland Financial Other shares of

municipal Financial instruments domestic Other than Individuals commonClassification government institutions firms companies individuals Individuals and others Total stock

Number of shareholders. . — 1 — — — — — 1 —Number of shares held (tangen) . . . . . . . . . . . . . . — 258,799 — — — — — 258,799 500Percentage of total number of shares . . . . . . — 100.00 — — — — — 100.00 —

68

Quantitative Disclosure

1. Names and aggregate capital for unconsolidated subsidiaries that are deducted from consolidatedregulatory capital and have less than the compulsory amount of capital

(As of Mar. 31, 2007 and Sep. 30, 2007)None of the unconsolidated subsidiaries whose capital are deducted from consolidated regulatory capital is assigned compulsorycapital requirements for FY March-End 2007 and FY September-End 2007.

2.Items pertaining to capital structuresThese items are described in the Consolidated Financial Review: Consolidated Capital Adequacy Ratio (Domestic Standard) andthe Non-Consolidated Information: Non-Consolidated Capital Adequacy Ratio (Domestic Standard).

3.Items pertaining to capital adequacy

Disclosure Based on Basel II Capital Accord Pillar III—Market DisciplineThis section describes the information consistent with FSA Notification Number 15, Basel II Pillar III—Market Discipline, based onArticle 19-2.1.5.d and 19-3.1.3.c of the Bank Law Enforcement Rule (Ministry of Finance Ordinance Number 10, 1982) issued onMarch 23, 2007. “Notification” in this section refers to FSA Notification Number 19, Basel II Pillar I—Required Capital, issued onMarch 27, 2006.

(1) Breakdown by Portfolios (Non-Consolidated)(100 Million Yen)

Mar. 2007 Outstanding Amount Sep. 2007 Outstanding Amount

Amount of Amount of Amount of Amount ofAmount of Credit Capital Amount of Credit Capital

Category Exposure Risk Asset Requirements Exposure Risk Asset Requirements

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 — — 97 — —Claims on Japanese government/bank . . . . . . . . . . . . . . . . . . . . . . . . . 15,170 — — 12,531 — —Claims on foreign central government/bank . . . . . . . . . . . . . . . . . . . . . 1,746 2 0 843 5 0Claims on Bank of International Settlement (BIS) . . . . . . . . . . . . . . . . . — — — — — —Claims on Japanese local public bodies . . . . . . . . . . . . . . . . . . . . . . . . 826 7 0 842 8 0Claims on non-central government public sector entities (PSEs) of foreign countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,204 241 10 1,079 216 9Claims on multilateral development banks (MDBs) . . . . . . . . . . . . . . . . — — — — — —Claims on organs affiliated with the Japanese government . . . . . . . . . 1,262 126 5 1,485 125 5Claims on three major local public corporations . . . . . . . . . . . . . . . . . . 53 3 0 86 1 0Claims on financial institutions and securities firms . . . . . . . . . . . . . . . . 3,991 972 39 5,203 1,329 53Claims on corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,135 27,068 1,083 28,998 23,020 921Claims on SMEs and individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Mortgage-backed housing loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 29 10 0Claims on projects including acquisition of real estate properties . . . . . 1,451 1,451 58 1,678 1,419 57Loans past due for three months or more . . . . . . . . . . . . . . . . . . . . . . . 452 520 21 436 512 20Cash items in process of collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Loans guaranteed by Credit Guarantee Association etc. . . . . . . . . . . . 3 0 0 3 0 0Loans guaranteed by Industrial Revitalization Corporation of Japan (IRCJ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Equity etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,163 2,058 82 2,338 2,243 90Securitization (as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 8 0 37 12 0

Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 8 0 17 8 0Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 4 4 0Capital deduction (as transitional arrangement under Article 15 of Supplementary Provision) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Capital deduction (other) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 — — 16 — —

Securitization (not as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . 6,927 5,371 215 6,439 4,713 189Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,191 1,355 54 2,290 1,186 47Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,757 4,016 161 3,305 3,528 141Capital deduction (transitional arrangement under Article 15 of the Supplementary Provision) . . . . . . . . . . . . . . . . . . . . . . . . . . . 553 — — 420 — —Capital deduction (other) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 — — 424 — —

Fund (look-through approach) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,235 4,758 190 8,183 10,632 425Risk weight 0% to 20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 1 0 114 0 0Risk weight > 20% ≤_ 50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 13 1 43 11 0Risk weight > 50% ≤_ 100% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675 590 24 521 442 18Risk weight > 100% ≤_ 150% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,205 1,651 66 6,257 7,503 300Risk weight > 150% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 2,503 100 1,160 2,676 107Capital deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 — — 88 — —

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771 771 31 1,236 1,235 49Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,516 43,358 1,734 71,541 45,480 1,819Notes 1: Amount of Exposure • After deducting the amount equivalent to partial direct write-offs (before applying credit risk mitigation effect).

Specific loan-loss reserves and reserves for specific overseas loans are not subject to the deduction.• The amount is equivalent to credit extension set forth in the Notification (after the effect of deducting the

amount equivalent to credit extension under the close-out netting agreement).2: Amount of Credit Risk • After applying credit risk mitigation effect.3: Amount of Capital Requirements • As the standardized approach and domestic standard are adopted by Aozora Bank, the amount is calculated

with the following formula: 4% X amount of credit risk asset.4: Indication Method after • The amount is rounded to the nearest whole number. Same applies to the charts below.

the Decimal Point

69

(2) Amount of capital required to cover credit risk related to exposures for which credit risk assets are deemed applicable:This topic has already been addressed in “Quantitative Disclosure 3. (1)” above.

Breakdown by Portfolios (Consolidated)(100 Million Yen)

Mar. 2007 Outstanding Amount Sep. 2007 Outstanding Amount

Amount of Amount of Amount of Amount ofAmount of Credit Capital Amount of Credit Capital

Category Exposure Risk Asset Requirements Exposure Risk Asset Requirements

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 — — 97 — —Claims on Japanese government/bank . . . . . . . . . . . . . . . . . . . . . . . . . 15,170 — — 12,566 — —Claims on foreign central government/bank . . . . . . . . . . . . . . . . . . . . . 1,746 2 0 843 5 0Claims on Bank of International Settlement (BIS) . . . . . . . . . . . . . . . . . — — — — — —Claims on Japanese local public bodies . . . . . . . . . . . . . . . . . . . . . . . . 826 7 0 842 8 0Claims on non-central government public sector entities (PSEs) of foreign countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,204 241 10 1,079 216 9Claims on multilateral development banks (MDBs) . . . . . . . . . . . . . . . . — — — — — —Claims on organs affiliated with the Japanese government . . . . . . . . . 1,262 126 5 1,485 125 5Claims on three major local public corporations . . . . . . . . . . . . . . . . . . 53 3 0 86 1 0Claims on financial institutions and securities firms . . . . . . . . . . . . . . . . 3,972 968 39 5,196 1,327 53Claims on corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,890 26,617 1,065 33,537 28,116 1,125Claims on SMEs and individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Mortgage-backed housing loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 29 10 0Claims on projects including acquisition of real estate properties . . . . . 1,451 1,451 58 1,678 1,678 67Loans past due for three months or more . . . . . . . . . . . . . . . . . . . . . . . 1,246 1,710 68 921 1,235 49Cash items in process of collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Loans guaranteed by Credit Guarantee Association etc. . . . . . . . . . . . 3 0 0 3 0 0Loans guaranteed by Industrial Revitalization Corporation of Japan (IRCJ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Equity etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,913 1,808 72 2,086 1,991 80Securitization (as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 8 0 17 8 0

Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 8 0 17 8 0Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Capital deduction (as transitional arrangement under Article 15 of the Supplementary Provision) . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —Capital deduction (other) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 — — 0 — —

Securitization (not as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . 7,116 5,560 222 6,591 4,866 195Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,191 1,355 54 2,387 1,283 51Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,946 4,205 168 3,360 3,583 143Capital deduction (transitional arrangement under Article 15 of Supplementary Provision) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553 — — 420 — —Capital deduction (other) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 — — 424 — —

Fund (look-through approach) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,242 3,482 139 2,866 4,448 178Risk weight 0% to 20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 1 0 113 0 0Risk weight > 20% ≤_ 50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 6 0 38 9 0Risk weight > 50% ≤_ 100% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531 471 19 430 370 15Risk weight > 100% ≤_ 150% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384 509 20 1,058 1,418 57Risk weight > 150% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 995 2,495 100 1,145 2,651 106Capital deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 — — 83 — —

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,137 1,137 45 1,545 1,546 62Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,357 43,122 1,725 71,467 45,581 1,823Notes 1: Amount of Exposure • After deducting the amount equivalent to partial direct write-offs (before applying credit risk mitigation effect).

Specific loan-loss reserves and reserves for specific overseas loans are not subject to the deduction.• The amount is equivalent to credit extension set forth in the Notification (after the effect of deducting the

amount equivalent to credit extension under the close-out netting agreement).2: Amount of Credit Risk • After applying credit risk mitigation effect.3: Amount of Capital Requirements • As the standardized approach and domestic standard are adopted by Aozora Bank, the amount is calculated

with the following formula: 4% X amount of credit risk asset.

70

(3) Amount of capital required to cover market risk and amounts presented by each method used bythe Consolidated Group:

(4) Amount of capital required to cover operational risk and amounts presented by each method used by theConsolidated Group:This information is described in the Consolidated Financial Review: Consolidated Capital Adequacy Ratio (Domestic Standard),

the Non-Consolidated Information: Non-Consolidated Capital Adequacy Ratio (Domestic Standard).

(5) Capital adequacy ratio and Tier I ratio:These ratios are described in the Consolidated Financial Review: Consolidated Capital Adequacy Ratio (Domestic Standard),

and the Non-Consolidated Information: Non-Consolidated Capital Adequacy Ratio (Domestic Standard).

(6) Total capital requirements:The aggregate amount is described in the Consolidated Financial Review: Consolidated Capital Adequacy Ratio (Domestic

Standard), and the Non-Consolidated Information: Non-Consolidated Capital Adequacy Ratio (Domestic Standard).

4.Items pertaining to credit risk(1) Breakdown of term-end credit risk exposure balance by area, industry and residual period, as well as category:

Breakdown of Exposure by Area (Non-Consolidated)(100 Million Yen)

Outstanding Exposure as of Mar. 2007 Outstanding Exposure as of Sep. 2007

OTC OTCArea Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Japan . . . . . . . . . . . . . . . . . . . . . . 39,794 13,528 2,017 55,339 43,133 11,891 2,244 57,268Overseas . . . . . . . . . . . . . . . . . . . . 3,497 9,801 879 14,177 3,257 9,970 1,046 14,273

Total . . . . . . . . . . . . . . . . . . . . . . . 43,291 23,329 2,896 69,516 46,390 21,861 3,290 71,541Notes 1: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.Notes 2: Disclosure of Average Balance is not made because there is no big discrepancy between the average risk position of the exposure for the term

and the balance at the term-end.

Breakdown of Exposure by Area (Consolidated)(100 Million Yen)

Outstanding Exposure as of Mar. 2007 Outstanding Exposure as of Sep. 2007

OTC OTCArea Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Japan . . . . . . . . . . . . . . . . . . . . . . 40,546 12,440 2,017 55,003 43,621 11,222 2,244 57,087Overseas . . . . . . . . . . . . . . . . . . . . 7,225 6,250 879 14,354 8,600 4,731 1,048 14,380

Total . . . . . . . . . . . . . . . . . . . . . . . 47,771 18,690 2,896 69,357 52,222 15,953 3,292 71,467Notes 1: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.Notes 2: Disclosure of Average Balance is not made because there is no big discrepancy between the average risk position of the exposure for the term

and the balance at the term-end.

(Millions of Yen)

Mar. 31, 2007 Sep. 30, 2007

Standardized Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 953 2,051Interest Rate Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 1,037Equity Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0Foreign Exchange Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 13Commodities Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10Options Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 990

Internal Models Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637 1,264

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,590 3,316Notes: The calculation methods are as follows:

1. Internal Models ApproachGeneral market risk for the linear risk portion of interest rates, foreign exchange (major currencies), equity and CDS trading.

2. Standardized ApproachGeneral market risk not applicable to the internal model and specific risk for CDS trading.

71

Breakdown of Exposure by Industry Sector (Non-Consolidated)(100 Million Yen)

Outstanding Exposure as of Mar. 2007 Outstanding Exposure as of Sep. 2007

OTC OTCIndustry Sector Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Sovereign. . . . . . . . . . . . . . . . . . . 7,270 13,183 14 20,467 6,998 10,043 19 17,061Financial Institution . . . . . . . . . . . 2,556 323 1,239 4,118 3,519 405 1,406 5,330Manufacturer . . . . . . . . . . . . . . . . 3,987 229 422 4,638 4,029 91 578 4,699Agriculture/Forestry/Fisheries . . . 54 — 1 55 58 — 1 59Mining . . . . . . . . . . . . . . . . . . . . . 71 — — 71 75 — — 75Construction . . . . . . . . . . . . . . . . 439 3 70 512 507 5 64 576Utilities (Electric Power/Gas/ Heat Supply/Water Service) . . . . 600 3 33 637 647 — 46 693Information & Telecommunication 1,254 264 14 1,532 984 253 1 1,239Transport . . . . . . . . . . . . . . . . . . . 1,863 11 24 1,898 2,490 11 17 2,518Wholesale/Retail . . . . . . . . . . . . . 2,459 49 242 2,749 2,427 58 311 2,796Other Financial Business (Moneylending, Leasing) . . . . . . 9,077 7,839 214 17,129 8,986 9,217 720 18,922Real Estate . . . . . . . . . . . . . . . . . 9,211 570 23 9,804 8,997 561 26 9,584Various Services (excluding Leasing) . . . . . . . . . . 3,033 161 15 3,208 4,925 118 21 5,063Others . . . . . . . . . . . . . . . . . . . . . 1,418 695 586 2,698 1,748 1,099 80 2,928

Total . . . . . . . . . . . . . . . . . . . . . . 43,291 23,329 2,896 69,516 46,390 21,861 3,290 71,541Notes 1: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.Notes 2: The category of Sovereign includes the exposures to sovereign as stipulated in the Notification.Notes 3: The category of Financial Institution includes exposures to financial institutions as stipulated in the Notification.

Breakdown of Exposure by Industry Sector (Consolidated)(100 Million Yen)

Outstanding Exposure as of Mar. 2007 Outstanding Exposure as of Sep. 2007

OTC OTCIndustry Sector Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Sovereign. . . . . . . . . . . . . . . . . . . 7,270 13,183 14 20,467 6,998 10,078 19 17,096Financial Institution . . . . . . . . . . . 2,537 214 1,239 3,991 3,510 296 1,408 5,214Manufacturer . . . . . . . . . . . . . . . . 5,085 230 422 5,737 5,844 92 578 6,514Agriculture/Forestry/Fisheries . . . 56 — 1 57 76 — 1 77Mining . . . . . . . . . . . . . . . . . . . . . 141 — — 141 165 — — 165Construction . . . . . . . . . . . . . . . . 442 4 70 516 527 5 64 596Utilities (Electric Power/Gas/ Heat Supply/Water Service) . . . . 668 3 33 704 783 — 46 829Information & Telecommunication 2,406 255 14 2,675 2,373 244 1 2,618Transport . . . . . . . . . . . . . . . . . . . 1,944 11 24 1,980 2,692 11 17 2,720Wholesale/Retail . . . . . . . . . . . . . 2,657 49 242 2,948 2,703 58 311 3,072Other Financial Business (Moneylending, Leasing) . . . . . . 9,021 2,798 214 12,033 8,583 3,002 720 12,305Real Estate . . . . . . . . . . . . . . . . . 9,233 571 23 9,826 9,055 562 26 9,642Various Services (excluding Leasing) . . . . . . . . . . 3,741 118 15 3,874 6,011 114 21 6,145Others . . . . . . . . . . . . . . . . . . . . . 2,568 1,255 586 4,409 2,903 1,490 80 4,474

Total . . . . . . . . . . . . . . . . . . . . . . 47,771 18,690 2,896 69,357 52,222 15,953 3,292 71,467Notes 1: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.Notes 2: The category of Sovereign includes the exposures to sovereign as stipulated in the Notification.Notes 3: The category of Financial Institution includes exposures to financial institutions as stipulated in the Notification.

72

Breakdown of Exposure by Remaining Period (Non-Consolidated)(100 Million Yen)

Outstanding Exposure as of Mar. 2007 Outstanding Exposure as of Sep. 2007

OTC OTCRemaining Period Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

< 1 year . . . . . . . . . . . . . . . . . . . . 13,521 6,998 145 20,664 15,308 5,336 67 20,710≥_ 1 year < 5 years . . . . . . . . . . . . 18,378 8,844 1,537 28,759 18,337 2,663 1,940 22,940≥_ 5 years . . . . . . . . . . . . . . . . . . . 11,391 7,487 1,214 20,092 12,745 13,863 1,283 27,891

Total . . . . . . . . . . . . . . . . . . . . . . 43,291 23,329 2,896 69,516 46,390 21,861 3,290 71,541Notes 1: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.Notes 2: Exposures with remaining period 5 years also include the transactions for which no maturity period is stipulated.

Breakdown of Exposure by Remaining Period (Consolidated)(100 Million Yen)

Outstanding Exposure as of Mar. 2007 Outstanding Exposure as of Sep. 2007

OTC OTCRemaining Period Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

< 1 year . . . . . . . . . . . . . . . . . . . . 13,356 6,998 145 20,499 14,667 5,336 69 20,071≥_ 1 year < 5 years . . . . . . . . . . . . 19,103 7,040 1,537 27,680 18,277 2,663 1,940 22,880≥_ 5 years . . . . . . . . . . . . . . . . . . . 15,312 4,652 1,214 21,178 19,277 7,955 1,283 28,515

Total . . . . . . . . . . . . . . . . . . . . . . 47,771 18,690 2,896 69,357 52,222 15,953 3,292 71,467Notes 1: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.Notes 2: Exposures with remaining period 5 years also include the transactions for which no maturity period is stipulated.

(2) Balance of term-end exposures on loans overdue three months or more and breakdown by area and industry:

Breakdown of Exposure Overdue for Three Months or More by Area (Non-Consolidated)(100 Million Yen)

Outstanding Exposure Overdue for Outstanding Exposure Overdue forThree Months or More as of Mar. 2007 Three Months or More as of Sep. 2007

OTC OTCArea Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Japan . . . . . . . . . . . . . . . . . . . . . 407 3 1 411 394 8 19 421Overseas . . . . . . . . . . . . . . . . . . . 41 — — 41 14 — — 14

Total . . . . . . . . . . . . . . . . . . . . . . 448 3 1 452 409 8 19 436Note: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.

Breakdown of Exposure Overdue for Three Months or More by Area (Consolidated)(100 Million Yen)

Outstanding Exposure Overdue for Outstanding Exposure Overdue forThree Months or More as of Mar. 2007 Three Months or More as of Sep. 2007

OTC OTCArea Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Japan . . . . . . . . . . . . . . . . . . . . . 1,188 3 1 1,192 815 8 19 842Overseas . . . . . . . . . . . . . . . . . . . 55 — — 55 79 — — 79

Total . . . . . . . . . . . . . . . . . . . . . . 1,242 3 1 1,246 894 8 19 921Note: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.

73

Breakdown of Exposure Overdue for Three Months or More by Industry Sector (Non-Consolidated)(100 Million Yen)

Outstanding Exposure Overdue for Outstanding Exposure Overdue forThree Months or More as of Mar. 2007 Three Months or More as of Sep. 2007

OTC OTCIndustry Sector Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Sovereign. . . . . . . . . . . . . . . . . . . 9 — — 9 — — — —Financial Institution . . . . . . . . . . . — — — — — — — —Manufacturer . . . . . . . . . . . . . . . . 36 — 0 36 19 — — 19Agriculture/Forestry/Fisheries . . . — — — — — — — —Mining . . . . . . . . . . . . . . . . . . . . . — — — — — — — —Construction . . . . . . . . . . . . . . . . 27 — — 27 26 — — 26Utilities (Electric Power/Gas/ Heat Supply/Water Service) . . . . 0 — — 0 — — — —Information & Telecommunication 16 — 0 16 41 — 0 41Transport . . . . . . . . . . . . . . . . . . . 11 — — 11 10 — — 10Wholesale/Retail . . . . . . . . . . . . . 7 2 1 11 18 2 19 39Other Financial Business (Moneylending, Leasing) . . . . . . 5 — — 5 2 5 0 7Real Estate . . . . . . . . . . . . . . . . . 118 — — 118 94 — — 94Various Services (excluding Leasing) . . . . . . . . . . 220 1 0 221 196 1 0 197Others . . . . . . . . . . . . . . . . . . . . . 1 — — 1 1 — — 1

Total . . . . . . . . . . . . . . . . . . . . . . 448 3 1 452 409 8 19 436Note: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.

Breakdown of Exposure Overdue for Three Months or More by Industry Sector (Consolidated)(100 Million Yen)

Outstanding Exposure Overdue for Outstanding Exposure Overdue forThree Months or More as of Mar. 2007 Three Months or More as of Sep. 2007

OTC OTCIndustry Sector Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

Sovereign. . . . . . . . . . . . . . . . . . . 9 — — 9 — — — —Financial Institution . . . . . . . . . . . — — — — — — — —Manufacturer . . . . . . . . . . . . . . . . 46 — 0 47 42 — — 42Agriculture/Forestry/Fisheries . . . — — — — — — — —Mining . . . . . . . . . . . . . . . . . . . . . — — — — — — — —Construction . . . . . . . . . . . . . . . . 27 — — 27 26 — — 26Utilities (Electric Power/Gas/ Heat Supply/Water Service) . . . . 4 — — 4 42 — — 42Information & Telecommunication 16 — 0 16 41 — 0 41Transport . . . . . . . . . . . . . . . . . . . 11 — — 11 10 — — 10Wholesale/Retail . . . . . . . . . . . . . 7 2 1 11 18 2 19 39Other Financial Business (Moneylending, Leasing) . . . . . . 5 — — 5 2 5 0 7Real Estate . . . . . . . . . . . . . . . . . 118 — — 118 94 — — 94Various Services (excluding Leasing) . . . . . . . . . . 220 1 0 221 196 1 0 197Others . . . . . . . . . . . . . . . . . . . . . 781 — — 781 421 — — 421

Total . . . . . . . . . . . . . . . . . . . . . . 1,242 3 1 1,246 894 8 19 921Note: Loans etc. include on-balance and off-balance sheet exposures such as loans and commitment line etc. other than securities and OTC derivatives

above.

74

Outstanding Reserves as of Mar. 2007

Reserve for Loans toArea General Reserve Specific Reserve Restructuring Countries Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 153 — 153Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4 1 4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 157 1 623

Reserves (Differrence)

Reserve for Loans toArea General Reserve Specific Reserve Restructuring Countries Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 15 — 15Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3 (1) 2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62) 18 (1) (44)

Outstanding Reserves as of Mar. 2007

Reserve for Loans toArea General Reserve Specific Reserve Restructuring Countries Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 153 — 153Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4 1 4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 157 1 626

Reserves (Differrence)

Reserve for Loans toArea General Reserve Specific Reserve Restructuring Countries Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 16 — 16Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4 (1) 4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62) 20 (1) (43)

(3) Term-end balances and year-on-year changes for general reserve for possible loan losses, specific loanreserve and country risk reserve:

Breakdown of Reserves by Area (Non-Consolidated)(100 Million Yen)

Outstanding Reserves as of Sep. 2007

Reserve for Loans toArea General Reserve Specific Reserve Restructuring Countries Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 168 — 168Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 7 — 7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404 175 — 579

Breakdown of Reserves by Area (Consolidated)(100 Million Yen)

Outstanding Reserves as of Sep. 2007

Reserve for Loans toArea General Reserve Specific Reserve Restructuring Countries Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 168 — 168Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8 — 8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406 176 — 583

75

Outstanding Reserves as of Mar. 2007

Reserve for Loans toIndustry Sector General Reserve Specific Reserve Restructuring Countries Total

Sovereign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 105 — 105Financial Institution . . . . . . . . . . . . . . . . . . . . . . . — — — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8 — 8Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . — — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . — — — —Information & Telecommunication . . . . . . . . . . . . — 4 — 4Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4 — 4Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . — 6 — 6Other Financial Business (Moneylending, Leasing) . — 5 — 5Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Various Services (excluding Leasing) . . . . . . . . . . — 23 1 24Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 157 1 623

Reserves (Differrence)

Reserve for Loans toIndustry Sector General Reserve Specific Reserve Restructuring Countries Total

Sovereign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (10) — (10)Financial Institution . . . . . . . . . . . . . . . . . . . . . . . — — — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 — 1Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . — — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . — — — —Information & Telecommunication . . . . . . . . . . . . — (3) — (3)Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . — 12 — 12Other Financial Business (Moneylending, Leasing) . — 14 — 14Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8 — 8Various Services (excluding Leasing) . . . . . . . . . . — (3) (1) (4)Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62) 18 (1) (44)

Breakdown of Reserves by Industry Sector (Non-Consolidated)(100 Million Yen)

Outstanding Reserves as of Sep. 2007

Reserve for Loans toIndustry Sector General Reserve Specific Reserve Restructuring Countries Total

Sovereign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 95 — 95Financial Institution . . . . . . . . . . . . . . . . . . . . . . . — — — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9 — 9Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . — — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . — — — —Information & Telecommunication . . . . . . . . . . . . — 1 — 1Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4 — 4Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . — 18 — 18Other Financial Business (Moneylending, Leasing) . — 19 — 19Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9 — 9Various Services (excluding Leasing) . . . . . . . . . . — 20 — 20Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404 175 — 579

76

Outstanding Reserves as of Mar. 2007

Reserve for Loans toIndustry Sector General Reserve Specific Reserve Restructuring Countries Total

Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 105 — 105Financial Institution . . . . . . . . . . . . . . . . . . . . . . . — — — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8 — 8Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . — — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . — — — —Information & Telecommunication . . . . . . . . . . . . — 4 — 4Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4 — 4Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . — 6 — 6Other Financial Business (Moneylending, Leasing) . — 5 — 5Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Various Services (excluding Leasing) . . . . . . . . . . — 23 1 24Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 157 1 626

Reserves (Differrence)

Reserve for Loans toIndustry Sector General Reserve Specific Reserve Restructuring Countries Total

Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (10) — (10)Financial Institution . . . . . . . . . . . . . . . . . . . . . . . — — — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3 — 3Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . — — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . — — — —Information & Telecommunication . . . . . . . . . . . . — (3) — (3)Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . — 12 — 12Other Financial Business (Moneylending, Leasing) . — 14 — 14Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8 — 8Various Services (excluding Leasing) . . . . . . . . . . — (3) (1) (4)Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62) 20 (1) (43)

Breakdown of Reserves by Industry Sector (Consolidated)(100 Million Yen)

Outstanding Reserves as of Sep. 2007

Reserve for Loans toIndustry Sector General Reserve Specific Reserve Restructuring Countries Total

Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 95 — 95Financial Institution . . . . . . . . . . . . . . . . . . . . . . . — — — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 11 — 11Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . — — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . — — — —Information & Telecommunication . . . . . . . . . . . . — 1 — 1Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4 — 4Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . — 18 — 18Other Financial Business (Moneylending Leasing) . . — 19 — 19Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9 — 9Various Services (excluding Leasing) . . . . . . . . . . — 20 — 20Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406 176 — 583

77

(4) Breakdown of Write-Offs by Industry Sector (Non-Consolidated)(100 Million Yen)

Write-offs

Industry Sector Mar. 2007 Sep. 2007

Sovereign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Financial Institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . . . . . . . . . . . . . . . . . — —Information & Telecommunication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 —Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0Other Financial Business (Moneylending, Leasing) . . . . . . . . . . . . . . . . . . . . . . 27 5Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Various Services (excluding Leasing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 7

Breakdown of Write-Offs by Industry Sector (Consolidated)(100 Million Yen)

Write-offs

Industry Sector Mar. 2007 Sep. 2007

Sovereign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Financial Institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0Agriculture/Forestry/Fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Utilities (Electric Power/Gas/Heat Supply/Water Service) . . . . . . . . . . . . . . . . . — —Information & Telecommunication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 —Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Wholesale/Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0Other Financial Business (Moneylending, Leasing) . . . . . . . . . . . . . . . . . . . . . . 27 5Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Various Services (excluding Leasing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 7

(5) Outstanding Exposure after Recognizing Credit Risk Mitigations by Risk Weight (Non-Consolidated)(100 Million Yen)

Mar. 2007 Sep. 2007

Amount of Exposure Amount of Exposure

Application of Amount of Application of Amount ofRisk Weight External Rating Capital Deduction External Rating Capital Deduction

0% . . . . . . . . . . . . . . . . . . . . . . . . . 19,616 1,734 — 16,367 825 —> 0% ≤_ 10% . . . . . . . . . . . . . . . . . 1,523 0 — 1,417 101 —> 10% ≤_ 20% . . . . . . . . . . . . . . . . 7,941 7,853 — 8,957 7,649 —> 20% ≤_ 50% . . . . . . . . . . . . . . . . 4,692 3,770 — 5,895 5,537 —> 50% ≤_ 75% . . . . . . . . . . . . . . . . 502 268 — 1,284 874 —> 75% ≤_ 100% . . . . . . . . . . . . . . . 28,508 4,247 — 27,993 5,254 —> 100% ≤_ 150% . . . . . . . . . . . . . . 2,075 39 — 7,351 234 —> 150% . . . . . . . . . . . . . . . . . . . . . 3,420 244 — 1,282 121 —Capital Deduction . . . . . . . . . . . . . 1,238 41 909 956 8 717

Total . . . . . . . . . . . . . . . . . . . . . . . 69,516 18,196 909 71,501 20,602 717Notes 1: In the “Application of External Rating” section, the exposures to which an external rating is applied in the calculation of risk weight are included.

2: Capital Deduction above includes the amount deducted from capital in accordance with Article 43.1.2 and 43.1.5 of the Notification.

78

5. Items pertaining to credit risk mitigation techniques

Outstanding Exposure after Recognizing Credit Risk Mitigations by Risk Weight (Consolidated)(100 Million Yen)

Mar. 2007 Sep. 2007

Amount of Exposure Amount of Exposure

Application of Amount of Application of Amount ofRisk Weight External Rating Capital Deduction External Rating Capital Deduction

0% . . . . . . . . . . . . . . . . . . . . . . . . . 23,806 1,734 — 16,215 825 —> 0% ≤_ 10% . . . . . . . . . . . . . . . . . 1,523 0 — 1,403 101 —> 10% ≤_ 20% . . . . . . . . . . . . . . . . 7,921 7,833 — 8,949 7,631 —> 20% ≤_ 50% . . . . . . . . . . . . . . . . 4,675 3,770 — 5,850 5,546 —> 50% ≤_ 75% . . . . . . . . . . . . . . . . 468 268 — 1,196 874 —> 75% ≤_ 100% . . . . . . . . . . . . . . . 27,239 5,160 — 31,827 7,035 —> 100% ≤_ 150% . . . . . . . . . . . . . . 1,253 1,362 — 3,785 1,382 —> 150% . . . . . . . . . . . . . . . . . . . . . 1,239 244 — 1,267 121 —Capital Deduction . . . . . . . . . . . . . 1,233 41 904 934 8 695

Total . . . . . . . . . . . . . . . . . . . . . . . 69,357 20,410 904 71,427 23,522 695Notes 1: In the “Application of External Rating” section, the exposures to which an external rating is applied in the calculation of risk weight are included.

2: Capital Deduction above includes the amount deducted from capital in accordance with Article 31.1.3 and 31.1.6 of the Notification.

Breakdown of Exposure for which Credit Risk Mitigations Are Applied (Non-Consolidated)(100 Million Yen)

Amount of Exposure Amount of ExposureCredit Risk Mitigant Mar. 2007 Sep. 2007

Eligible Financial Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573 354Cash and Deposits at Aozora . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 105Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 33Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 217Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Guarantees and Credit Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,205 2,571Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544 956Credit Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,661 1,615

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,779 2,925Notes 1: The exposure above does not include the amount for which the credit risk mitigant is recognized through netting between loan and deposits at the

Bank under the netting agreement (Article 117 of the Notification).2: Regarding the issuers of equities and debt securities included in Eligible Financial Assets, we have confirmed that the risk of concentration in

individual companies or industries is modest.

Breakdown of Exposure for which Credit Risk Mitigations Are Applied (Consolidated)(100 Million Yen)

Amount of Exposure Amount of ExposureCredit Risk Mitigant Mar. 2007 Sep. 2007

Eligible Financial Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573 354Cash and Deposits at Aozora . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 105Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 33Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 217Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Guarantees and Credit Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,205 2,571Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544 956Credit Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,661 1,615

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,779 2,925Notes 1: The exposure above does not include the amount for which the credit risk mitigant is recognized through netting between loan and deposits at the

Bank under the netting agreement (Article 117 of the Notification).2: Regarding the issuers of equities and debt securities included in Eligible Financial Assets, we have confirmed that the risk of concentration in

individual companies or industries is modest.

79

Breakdown of Eligible Financial Collateral Associated with Derivatives by Type (Non-Consolidated, Consolidated)(As of March 31, 2007 and September 30, 2007)

No applicable transactions exist.

6. Items pertaining to counterparty risk on derivative product transactions

Breakdown of Derivative Products (Non-Consolidated)(100 Million Yen)

Mar. 2007 Sep. 2007

Credit- Credit-Credit- Equivalent Credit- Credit- Equivalent Credit-

Equivalent Amount Equivalent Equivalent Amount Equivalent Amount Reduction Amount Amount Reduction Amount

(before credit Effect through (after credit (before credit Effect through (after creditGross risk mitigating Eligible risk mitigating Gross risk mitigating Eligible risk mitigating

Replacement Gross effect is Financial effect is Replacement Gross effect is Financial effect isCost Add-On recognized) Collateral recognized) Cost Add-On recognized) Collateral recognized)

Type of Transaction (A) (B) (C) = (A) +(B) (D) (E) = (C) + (D) (A) (B) (C) = (A) +(B) (D) (E) = (C) + (D)

Forex and Gold-Related . . . . . . . . . . . . . . . 330 512 842 — 842 572 693 1,265 — 1,265Interest Rate-Related . . . . . . . . . . . . . . . . . 650 799 1,449 — 1,449 645 842 1,487 — 1,487Equity-Related . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — —Precious Metal-Related (excluding Gold-Related) . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — —Other Commodity-Related . . . . . . . . . . . . . 0 1 1 — 1 1 1 1 — 1Credit Derivatives (Counterparty Risk) . . . . . 17 327 344 — 344 41 226 266 — 266Credit-Equivalent Amount Reduction Effect through Close-Out Netting Agreement . . . — (1,149) (1,149) — (1,149) — (1,196) (1,196) — (1,196)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997 490 1,487 — 1,487 1,258 565 1,823 — 1,823Note: The credit-equivalent amount is calculated by applying the current-exposure method.

Breakdown of Derivative Products (Consolidated)(100 Million Yen)

Mar. 2007 Sep. 2007

Credit- Credit-Credit- Equivalent Credit- Credit- Equivalent Credit-

Equivalent Amount Equivalent Equivalent Amount Equivalent Amount Reduction Amount Amount Reduction Amount

(before credit Effect through (after credit (before credit Effect through (after creditGross risk mitigating Eligible risk mitigating Gross risk mitigating Eligible risk mitigating

Replacement Gross effect is Financial effect is Replacement Gross effect is Financial effect isCost Add-On recognized) Collateral recognized) Cost Add-On recognized) Collateral recognized)

Type of Transaction (A) (B) (C) = (A) +(B) (D) (E) = (C) + (D) (A) (B) (C) = (A) +(B) (D) (E) = (C) + (D)

Forex and Gold-Related . . . . . . . . . . . . . . . 330 512 842 — 842 572 693 1,265 — 1,265Interest Rate-Related . . . . . . . . . . . . . . . . . 650 799 1,449 — 1,449 645 842 1,487 — 1,487Equity-Related . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — —Precious Metal-Related (excluding Gold-Related) . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — —Other Commodity-Related . . . . . . . . . . . . . 0 1 1 — 1 1 1 1 — 1Credit Derivatives (Counterparty Risk) . . . . . 17 327 344 — 344 41 228 268 — 268Credit-Equivalent Amount Reduction Effect through Close-Out Netting Agreement . . . — (1,149) (1,149) — (1,149) — (1,196) (1,196) — (1,196)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997 490 1,487 — 1,487 1,258 567 1,826 — 1,826Note: The credit-equivalent amount is calculated by applying the current-exposure method.

80

7. Items pertaining to securitization transactions

Breakdown of Credit Derivative Transactions (Non-Consolidated)(100 Million Yen)

Mar. 2007 Sep. 2007

Purchase or Supply Purchase or SupplyType of Transaction of Guarantee Notional Principal of Guarantee Notional Principal

Transactions subject to the calculation of credit equivalent amount. . . . . . . . . . 6,781 7,829Credit Derivatives (Credit Reference Asset of Single Organization) . . . . . . . . . Purchase 3,009 Purchase 3,242. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply 3,653 Supply 4,488

First-to-Default Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — Purchase —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply 120 Supply 100

Second-to-Default Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — Purchase —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply — Supply —

Transactions not subject to the calculation of credit-equivalent amount . . . . . . . Purchase 1,852 Purchase 2,089Note: The amount used in order to recognize the effect of credit risk mitigant is provided in the transactions not subject to the calculation of credit-

equivalent amount.

Breakdown of Credit Derivative Transactions (Consolidated)(100 Million Yen)

Mar. 2007 Sep. 2007

Purchase or Supply Purchase or SupplyType of Transaction of Guarantee Notional Principal of Guarantee Notional Principal

Transactions subject to the calculation of credit equivalent amount. . . . . . . . . . 6,781 7,850Credit Derivatives (Credit Reference Asset of Single Organization) . . . . . . . . . Purchase 3,009 Purchase 3,262. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply 3,653 Supply 4,488

First-to-Default Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — Purchase —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply 120 Supply 100

Second-to-Default Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — Purchase —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply — Supply —

Transactions not subject to the calculation of credit-equivalent amount . . . . . . . Purchase 1,852 Purchase 1,830Note: The amount used in order to recognize the effect of credit risk mitigant is provided in the transactions not subject to the calculation of credit-

equivalent amount.

Securitization-Related TransactionsSecuritization Exposure Held by the Bank (Non-Consolidated)

(100 Million Yen)

Exposure as of Mar. 2007 Exposure as of Sep. 2007

Category of Underlying Asset Case of Originator Case of Investor Total Case of Originator Case of Investor Total

Project Finance . . . . . . . . . . . . . . . — 121 121 — 182 182Equities . . . . . . . . . . . . . . . . . . . . . — 862 862 — 859 859Loans to Businesses . . . . . . . . . . . — 468 468 20 566 585Residential Loan Receivables . . . . — 379 379 — 409 409Ships/Aircrafts . . . . . . . . . . . . . . . . — 166 166 — 190 190Real Estate . . . . . . . . . . . . . . . . . . 32 3,933 3,964 17 3,309 3,326Non-Performing Loans . . . . . . . . . — 535 535 — 461 461Lease Receivables . . . . . . . . . . . . . — 30 30 — 58 58Consumer Loan Receivables . . . . . — 397 397 — 379 379Others . . . . . . . . . . . . . . . . . . . . . . — 35 35 — 26 26Total . . . . . . . . . . . . . . . . . . . . . . . 32 6,927 6,959 37 6,439 6,476

Securitization Exposure Held by the Bank (Consolidated)(100 Million Yen)

Exposure as of Mar. 2007 Exposure as of Sep. 2007

Category of Underlying Asset Case of Originator Case of Investor Total Case of Originator Case of Investor Total

Project Finance . . . . . . . . . . . . . . . — 211 211 — 237 237Equities . . . . . . . . . . . . . . . . . . . . . — 862 862 — 859 859Loans to Businesses . . . . . . . . . . . — 568 568 — 663 663Residential Loan Receivables . . . . — 379 379 — 409 409Ships/Aircrafts . . . . . . . . . . . . . . . . — 166 166 — 190 190Real Estate . . . . . . . . . . . . . . . . . . 32 3,933 3,964 17 3,309 3,326Non-Performing Loans . . . . . . . . . — 535 535 — 461 461Lease Receivables . . . . . . . . . . . . . — 30 30 — 58 58Consumer Loan Receivables . . . . . — 397 397 — 379 379Others . . . . . . . . . . . . . . . . . . . . . . — 35 35 — 26 26Total . . . . . . . . . . . . . . . . . . . . . . . 32 7,116 7,148 17 6,591 6,608

81

Securitization-Related TransactionsOutstanding Securitization Exposure Held by the Bank by Risk Weight (in an Appropriate Number) and CapitalRequirement Thereof (Non-Consolidated)

(100 Million Yen)

Mar. 2007 Sep. 2007

Case of Originator Case of Investor Total Case of Originator Case of Investor Total

Capital Capital Capital Capital Capital CapitalRisk Weight Outstanding Requirement Outstanding Requirement Outstanding Requirement Outstanding Requirement Outstanding Requirement Outstanding Requirement

0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —> 0% ≤_ 20% . . . . . . . . . . . . . . . . . . . . . . . . — — 1,081 9 1,081 9 — — 1,277 10 1,277 10> 20% ≤_ 50% . . . . . . . . . . . . . . . . . . . . . . . 17 0 669 14 686 14 17 0 659 13 676 14> 50% ≤_ 100% . . . . . . . . . . . . . . . . . . . . . . — — 3,535 146 3,535 146 4 0 3,100 124 3,104 124> 100% ≤_ 350% . . . . . . . . . . . . . . . . . . . . . — — 664 45 664 45 — — 552 41 552 41> 350% . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Capital Deduction . . . . . . . . . . . . . . . . . . . . 15 — 978 — 993 — 16 — 851 — 868 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 0 6,927 214 6,959 214 37 0 6,439 189 6,476 189

Outstanding Securitization Exposure Held by the Bank by Risk Weight (in an Appropriate Number) and CapitalRequirement Thereof (Consolidated)

(100 Million Yen)

Mar. 2007 Sep. 2007

Case of Originator Case of Investor Total Case of Originator Case of Investor Total

Capital Capital Capital Capital Capital CapitalRisk Weight Outstanding Requirement Outstanding Requirement Outstanding Requirement Outstanding Requirement Outstanding Requirement Outstanding Requirement

0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —> 0% ≤_ 20% . . . . . . . . . . . . . . . . . . . . . . . . — — 1,081 9 1,081 9 — — 1,277 10 1,277 10> 20% ≤_ 50% . . . . . . . . . . . . . . . . . . . . . . . 17 0 669 14 686 14 17 0 659 13 676 14> 50% ≤_ 100% . . . . . . . . . . . . . . . . . . . . . . — — 3,724 153 3,724 153 — — 3,252 130 3,252 130> 100% ≤_ 350% . . . . . . . . . . . . . . . . . . . . . — — 664 45 664 45 — — 552 41 552 41> 350% . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Capital Deduction . . . . . . . . . . . . . . . . . . . . 15 — 978 — 993 — 0 — 851 — 852 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 0 7,116 221 7,148 221 17 0 6,591 195 6,608 195

82

Securitization-Related Transactions Originated by AozoraBreakdown of Major Underlying Assets by Type (Non-Consolidated)

(100 Million Yen)

Mar. 2007 Sep. 2007

Amount of Underlying Asset Amount of Amount of Underlying Asset Amount ofExposure Exposure

Securitization Overdue Securitization OverdueExposure Aseet for Three Exposure Aseet for Three

Held as an Transfer Synthetic Months Losses for Held as an Transfer Synthetic Months Losses forCategory of Underlying Asset Originator Total Securitization Securitization or More the Term Originator Total Securitization Securitization or More the Term

Project Finance . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Equities . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Loans to Businesses . . . . . . . . . . . . . . — — — — — — 20 259 — 259 — —Residential Loan Receivables . . . . . . . — — — — — — — — — — — —Ships/Aircrafts . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Real Estate . . . . . . . . . . . . . . . . . . . . . 32 201 201 — — — 17 183 183 — — —Non-Performing Loans . . . . . . . . . . . . — — — — — — — — — — — —Lease Receivables . . . . . . . . . . . . . . . . — — — — — — — — — — — —Consumer Loan Receivables . . . . . . . . — — — — — — — — — — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 32 201 201 — — — 37 442 183 259 — —

Breakdown of Major Underlying Assets by Type (Consolidated)(100 Million Yen)

Mar. 2007 Sep. 2007

Amount of Underlying Asset Amount of Amount of Underlying Asset Amount ofExposure Exposure

Securitization Overdue Securitization OverdueExposure Aseet for Three Exposure Aseet for Three

Held as an Transfer Synthetic Months Losses for Held as an Transfer Synthetic Months Losses forCategory of Underlying Asset Originator Total Securitization Securitization or More the Term Originator Total Securitization Securitization or More the Term

Project Finance . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Equities . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Loans to Businesses . . . . . . . . . . . . . . — — — — — — — — — — — —Residential Loan Receivables . . . . . . . — — — — — — — — — — — —Ships/Aircrafts . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Real Estate . . . . . . . . . . . . . . . . . . . . . 32 201 201 — — — 17 183 183 — — —Non-Performing Loans . . . . . . . . . . . . — — — — — — — — — — — —Lease Receivables . . . . . . . . . . . . . . . . — — — — — — — — — — — —Consumer Loan Receivables . . . . . . . . — — — — — — — — — — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 32 201 201 — — — 17 183 183 — — —

83

Securitization-Related Transactions (Consolidated)Securitization Exposure Deducted from Equity Capital in Accordance with Article 247 of the Notification and Breakdown ofMajor Underlying Assets by Type (Consolidated) (100 Million Yen)

Amount of Capital Deduction as of Mar. 2007 Amount of Capital Deduction as of Sep. 2007

Case of Originator Case of Investor Total Case of Originator Case of Investor Total

Amount of Amount of Amount of Amount of Amount of Amount ofAmount of Capital Amount of Capital Amount of Capital Amount of Capital Amount of Capital Amount of Capital

Category of Underlying Asset Exposure Deduction Exposure Deduction Exposure Deduction Exposure Deduction Exposure Deduction Exposure Deduction

Project Finance . . . . . . . . . . . . . . . . . . . . . — — 5 5 5 5 — — 5 5 5 5Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 18 18 18 18 — — — — — —Loans to Businesses . . . . . . . . . . . . . . . . . — — 34 34 34 34 — — 8 8 8 8Residential Loan Receivables . . . . . . . . . . — — — — — — — — — — — —Ships/Aircrafts . . . . . . . . . . . . . . . . . . . . . . — — 30 30 30 30 — — 29 29 29 29Real Estate . . . . . . . . . . . . . . . . . . . . . . . . 15 15 883 558 898 573 0 0 774 540 774 540Non-Performing Loans . . . . . . . . . . . . . . . — — 11 7 11 7 — — 11 6 11 6Lease Receivables . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Consumer Loan Receivables . . . . . . . . . . . — — — — — — — — — — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 35 35 35 35 — — 26 26 26 26Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 15 1,014 685 1,029 700 0 0 851 612 852 613Note: The figures above include the amount of capital deduction by applying the Supplementary Article 15 of the Notification.

Securitization-Related Transactions (Non-Consolidated)Securitization Exposure Deducted from Equity Capital in Accordance with Article 247 of the Notification and Breakdown ofMajor Underlying Assets by Type (Non-Consolidated) (100 Million Yen)

Amount of Capital Deduction as of Mar. 2007 Amount of Capital Deduction as of Sep. 2007

Case of Originator Case of Investor Total Case of Originator Case of Investor Total

Amount of Amount of Amount of Amount of Amount of Amount ofAmount of Capital Amount of Capital Amount of Capital Amount of Capital Amount of Capital Amount of Capital

Category of Underlying Asset Exposure Deduction Exposure Deduction Exposure Deduction Exposure Deduction Exposure Deduction Exposure Deduction

Project Finance . . . . . . . . . . . . . . . . . . . . . — — 5 5 5 5 — — 5 5 5 5Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 18 18 18 18 — — — — — —Loans to Businesses . . . . . . . . . . . . . . . . . — — 34 34 34 34 16 16 8 8 23 23Residential Loan Receivables . . . . . . . . . . — — — — — — — — — — — —Ships/Aircrafts . . . . . . . . . . . . . . . . . . . . . . — — 30 30 30 30 — — 29 29 29 29Real Estate . . . . . . . . . . . . . . . . . . . . . . . . 15 15 883 558 898 573 0 0 774 540 774 540Non-Performing Loans . . . . . . . . . . . . . . . — — 11 7 11 7 — — 11 6 11 6Lease Receivables . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — —Consumer Loan Receivables . . . . . . . . . . . — — — — — — — — — — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 35 35 35 35 — — 26 26 26 26Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 15 1,014 685 1,029 700 16 16 851 612 868 629Note: The figures above include the amount of capital deduction by applying the Supplementary Article 15 of the Notification.

Securitization-Related Transactions Originated by AozoraOutline of Exposures Securitized for the Current Term (Including the Amount of Exposure Securitized for theCurrent Term and Breakdown of Major Underlying Assets by Type) (Non-Consolidated) (100 Million Yen)

Mar. 2007 Sep. 2007

Amount Amount Profit & Loss on Sale Amount Amount Profit & Loss on SaleSecuritized for Equivalent to Recognized During Securitized for Equivalent to Recognized During

Category of Underlying Asset the Current Term Equity Capital the Current Term the Current Term Equity Capital the Current Term

Project Finance . . . . . . . . . . . . . . . — — — — — —Equities . . . . . . . . . . . . . . . . . . . . . — — — — — —Loans to Businesses . . . . . . . . . . . — — — 259 — —Residential Loan Receivables . . . . — — — — — —Ships/Aircrafts . . . . . . . . . . . . . . . . — — — — — —Real Estate . . . . . . . . . . . . . . . . . . 198 — — — — —Non-Performing Loans . . . . . . . . . — — — — — —Lease Receivables . . . . . . . . . . . . . — — — — — —Consumer Loan Receivables . . . . . — — — — — —Others . . . . . . . . . . . . . . . . . . . . . . — — — — — —Total . . . . . . . . . . . . . . . . . . . . . . . 198 — — 259 — —Note: The amount equivalent to the increased equity capital in tandem with securitization originated by Aozora Bank is provided as the amount equivalent

to equity capital. The applicable transactions do not exist in the total year ended March 31, 2007 and the 1st half ended September 30, 2007.

84

Securitization-Related Transactions Originated by AozoraOutline of Exposures Securitized for the Current Term (Including the Amount of Exposure Securitized for theCurrent Term and Breakdown of Major Underlying Assets by Type) (Consolidated)

(100 Million Yen)

Mar. 2007 Sep. 2007

Amount Amount Profit & Loss on Sale Amount Amount Profit & Loss on SaleSecuritized for Equivalent to Recognized During Securitized for Equivalent to Recognized During

Category of Underlying Asset the Current Term Equity Capital the Current Term the Current Term Equity Capital the Current Term

Project Finance . . . . . . . . . . . . . . . — — — — — —Equities . . . . . . . . . . . . . . . . . . . . . — — — — — —Loans to Businesses . . . . . . . . . . . — — — — — —Residential Loan Receivables . . . . — — — — — —Ships/Aircrafts . . . . . . . . . . . . . . . . — — — — — —Real Estate . . . . . . . . . . . . . . . . . . 198 — — — — —Non-Performing Loans . . . . . . . . . — — — — — —Lease Receivables . . . . . . . . . . . . . — — — — — —Consumer Loan Receivables . . . . . — — — — — —Others . . . . . . . . . . . . . . . . . . . . . . — — — — — —Total . . . . . . . . . . . . . . . . . . . . . . . 198 — — — — —Note: The amount equivalent to the increased equity capital in tandem with securitization originated by Aozora Bank is provided as the amount equivalent

to equity capital. The applicable transactions do not exist in the total year ended March 31, 2007 and the 1st half ended September 30, 2007.

(2) Back-testing results and explanations in the event actual losses strayed significantly downward from VaR numbersThe following graph represents the results of the back testing for trading businesses with internal models over the 245 business

days from October 1, 2006 to September 30, 2007. The actual daily losses exceeded daily VaR on one business day. This resultsupports the reliability of the Bank’s VaR.

8. Items pertaining to market risk(1) The Value at Risk (VaR) number at term-end as well as the highest, lowest and average VaR numbers during the

disclosure period The Value at Risk (VaR) number at term-end

The highest, lowest and average VaR number during the disclosure period(Billions of Yen)

Mar. 2007 Sep. 2007

as of Mar. as of Sep.Average Highest Lowest 2007 Average Highest Lowest 2007

Trading . . . . . . . . . . . . . . . . . . . . . . 0.2 0.3 0.1 0.2 0.3 0.6 0.2 0.6Banking . . . . . . . . . . . . . . . . . . . . . 3.7 4.4 3.3 3.8 4.4 5.1 4.0 4.5

(Billions of Yen)

as of Mar. 2007 as of Sep. 2007

Interest Funds and Interest Funds andrate Equity Forex others Total rate Equity Forex others Total

Trading . . . . . 0.2 0.0 0.1 0.1 0.2 0.2 0.0 0.3 0.2 0.6Banking . . . . 1.6 1.5 0.0 2.0 3.8 1.0 2.2 0.0 2.4 4.5

Total . . . . . . 1.6 1.5 0.1 2.1 3.9 1.1 2.2 0.3 2.6 4.9Notes 1: “Funds and others” includes hedge funds, REITs and credit derivatives.Notes 2: The above figures are based on a 1-day holding period and a 99% confidence level.Notes 3: The figures for total VaR do not represent the sum of individual components, due to correlations.

1

2

85

(1) Balance sheet amount(Millions of Yen)

Mar. 2007 Sep. 2007

Non-Consolidated Consolidated Non-Consolidated Consolidated

(Consolidated) Balance sheet amount . . . . . . . . . 216,299 191,289 233,750 208,561Listed stock exposures . . . . . . . . . . . . . . . . . . 63,423 63,446 84,484 84,495Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152,876 127,843 149,265 124,066

9. Items pertaining to equity exposures in the banking book

(2) Gains and losses on sales, and write-offs of equity exposure(Millions of Yen)

Mar. 2007 Sep. 2007

Non-Consolidated Consolidated Non-Consolidated Consolidated

Gains on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,511 12,878 4,552 4,552Losses on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 450 526 526Write-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 27 — —

(4) Unrealized gains/losses not recognized on the balance sheet or the statement of income(For Mar. 2007 and Sep. 2007)

Consolidated: Not applicableNon-Consolidated: Not applicable

10. Amount of exposures to which credit risk asset calculation is appliedThis item is described in Quantitative Disclosure 3. (1) above.

11. Losses on interest rate shocks based on internal measures for interest rate risk related to the bankingbook, and changes in economic prices

(3) Unrealized gains/losses recognized on the balance sheet but not recognized on the statement of income(Millions of Yen)

Mar. 2007 Sep. 2007

Non-Consolidated Consolidated Non-Consolidated Consolidated

Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . 2,806 2,825 (3,231) (3,225)

(Billions of Yen, %)

Mar. 2007 Sep. 2007

P/L Impact of Interest Rate Shock . . . . . . . . 27.5 13Outlier Ratio (Ratio to Tier I and Tier II) . . . . . 3.4 1.5Note: Interest rate shock is defined as the 99th percentile of the interest rate movement distribution based on 1-year holding period observed during

the past 5 years.

86

Corporate Data

Corporate History

April 1957 Established as The Nippon Fudosan Bank, Limited (capital: ¥1 billion) in accordance with the

Long-Term Credit Bank Law

November Started issuance of debentures

September 1958 Started issuance of discount debentures

July 1964 Started foreign exchange business as an authorized foreign exchange bank

September Listed stock on the Tokyo Stock Exchange

February 1970 Listed stock on the Osaka Securities Exchange

October 1977 Changed name to The Nippon Credit Bank, Ltd.

May 1991 Established NCB Private Equity Co., Ltd. (currently Aozora Investment Co., Ltd.)

February 1994 Established The Nippon Credit Trust Bank, Ltd. (currently Aozora Trust Bank, Ltd.), the first

domestic subsidiary classified as other type of business

December 1998 Started special public management in accordance with the Financial Reconstruction Law and

terminated listing of stock on the Tokyo Stock Exchange and the Osaka Securities Exchange

June 1999 Established NCB Servicer Co., Ltd. (currently AOZORA Loan Services Co., Ltd.), and

commenced servicer operations in September 1999

September 2000 Share Purchase Agreement regarding the transfer of the Bank’s shares was signed between

Deposit Insurance Corporation and SOFTBANK CORP., ORIX Corporation, The Tokio Marine and

Fire Insurance Co., Ltd. (currently Tokio Marine & Nichido Fire Insurance Co., Ltd.), and other

financial institutions

Ended special public management

November Commenced telephone banking services

January 2001 Changed name to Aozora Bank, Ltd.

April Launched Aozora Direct Time Deposit as a product exclusively available through telephone

banking

October 2002 Commenced over-the-counter sales of personal pension life insurance policies

March 2003 Moved headquarters

September Through a common stock tender offer conducted in accordance with the Securities Exchange

Law, all common stock of the Bank held by SOFTBANK CORP. was transferred to the ownership

of Cerberus NCB Acquisition, L.P., General Partner Cerberus Aozora GP LLC

October 2004 Launched Aozora Pocket Time Deposit (permits partial withdrawals before maturity)

June 2005 Launched Excellent First time deposit (callable time deposit)

April 2006 Converted from “Long-Term Credit Bank” to an “Ordinary Bank”

Issued Straight Bond

Established a security subsidiary, “Aozora Securities Co., Ltd.”

November Listed on the First Section of the Tokyo Stock Exchange

Established Tokyo Nihonbashi branch

May 2007 Established Shanghai Representative Office

87

● Deposits

Deposits

Checking accounts, savings accounts, deposits-at-notice, time deposits, specified deposits, tax-savings deposits,

non-residents deposits in yen and deposits in foreign currencies

Negotiable certificates of deposit

● Debentures

Issuance of debentures and discounted debentures

● Lending

Loans

Loans on deeds, loans on notes and overdraft

Discount on promissory notes

Bankers’ acceptances and discounts on commercial bills and documentary drafts

● Securities investment business

Public bonds, local bonds, corporate bonds, equity and other securities for cash reserves for payment of the deposit and fund

management

● Domestic exchange

Such services as money orders between branches of the Bank and those of other banks, collection of payments, etc.

● Foreign exchange

Remittance to foreign countries and other foreign-currency-related businesses

● Consignment of bonds and registration

Consignment business for soliciting or managing public bonds, registration of public bonds as a registered institution and issue

agent or payment agent

● Other services

1. Guarantee of liabilities (acceptances and guarantees)

2. Lending of securities

3. Underwriting of public bonds

4. Over-the-counter sales of public bonds, including national government bonds, and securities investment trusts

5. Trust business for secured corporate bonds

6. Agency business

➀ Revenue agency for Bank of Japan and agency business for national bonds

➁ Receipt of public funds of local public entities, including Tokyo

➂ Japan Finance Corporation for Small and Medium Enterprises; Organization for Workers’ Retirement Allowance Mutual Aid;

Government Pension Investment Fund; Japan National Oil Corporation; and Welfare and Medical Service Agency

7. Custody services and rental of safe-deposit boxes

8. Interest rate, currency and other derivative transactions

9. Over-the-counter sales of insurance products

10. Financial instruments intermediary business

Business Activities

88

RetailBankingGroup

GroupHead

CorporateBankingGroup

GroupHead

InvestmentBankingGroup

GroupHead

SeniorRelationship

BankingGroup

GroupHead

GlobalInvestment

Group

GroupHead

CMRO

(ChiefMarket Risk

Officer)

CFO

(ChiefFinancialOfficer)

CTO

(ChiefTechnology

Officer)

CCRO

(ChiefCredit Risk

Officer)

Retail Operation &TechnologyDiv.

Retail Products &MarketingDiv.

WealthManagementDiv.

Loan Center

Retail Banking Div. Branch Retail Business I

Branch Retail Business II

CorporateBusiness Div. I

CorporateBusiness Div. II

MarketingDiv.

SpecialFinance Div.

Real EstateFinance Div.

LeveragedFinance Div.

AssetFinance Div.

PrivateEquity Div.

CapitalMarkets Div.

ALS

AIC

DerivativesSalesDiv.

Treasury Div.

SecuritiesInvestmentDiv.

FundInvestmentDiv.

Financial Institutions Management Div.

SecuritiesBusinessDiv.

CapitalMarketsDiv.

Financial Institutions Div.

Aozora Trust

AozoraSecurities

GlobalInvestmentDiv.

OverseasRepresentativeOffices(New York,Singapore,Seoul, Jakarta, Shanghai)

Structured Credit Div.

AIML

AAPF

FinancialControlDiv.

Financial ManagementDiv.

FinancialSystems &ArchitectureDiv.

FinancialReportingControl Div.

OperationsManagementDiv.

Crisis ManagementDiv.

IT ManagementDiv.

BankingAdministrationDiv.

Corporate BankingServices Div.

Markets &InternationalAdministrationDiv.

AIS

Market RiskManagementDiv.

OperationalRiskManagementDiv.

IntegratedRiskManagementDiv.

Credit Risk ManagementDiv.

Credit Div. I

Credit Div. II

WorkoutDiv.

Legal &Compliance

Div.

Head of Compliance & Governance

InternalAuditDiv.

President

Chairman

SMEO

OCEOffice of

Chief Executive

Office of CorporateSecretary

CorporateDevelopment

Div.

HumanResources

Div.

CreditReview

Div.

Shareholders &Regulators

CommunicationDiv.

Board of Directors

ShareholdersCorporateAuditors

Board of Corporate Auditors

Office of Corporate Auditors

[Branches]

Kansai Br., Nagoya Br., Fukuoka Br., Sendai Br., Sapporo Br., Hiroshima Br., Takamatsu Br., Kanazawa Br.,

Shinjuku Br., Nihonbashi Br., Shibuya Br., Ueno Br., Ikebukuro Br., Yokohama Br., Chiba Br., Osaka Br., Umeda Br., Kyoto Br.

Head ofCorporate &Investment

Banking Group

Head ofIntegrated

Risk ManagementGroup

FinancialInstitution

Group

GroupHead

FinancialMarketsGroup

GroupHead

Organization Chart (As of December 1, 2007)

89

Directors, Auditors and Executive Officers(As of December 1, 2007)

Directors and Auditors

Chairman Kimikazu Noumi*

President Federico J. Sacasa*

Director James Danforth Quayle

Frank W. Bruno

Pieter Korteweg

Lawrence B. Lindsey

John L. Steffens

Kiyoshi Tsugawa

Marius J. L. Jonkhart

Lee Millstein

Hiroshi Amemiya

Gerardus Johannes Schipper

Shunsuke Takeda

Standing Auditor Tadaaki Satoyoshi

Auditor Mitch R. Fulscher

Akira Tachimoto

* Serving as Executive Officer concurrently

Executive Officers

Senior Managing Executive Officer David Hackett

Yuji Inagaki

Izumi Ogura

Takeyoshi Morikawa

Hiroshi Jinno

Katsutoshi Ishida

Shinsuke Baba

Hiroshi Nishihara

Hiromi Watanabe

James Mudie

Ambi Venkateswaran

Kenji Fujii

Managing Executive Officer Hirokazu Takino

Ryoichi Kawai

Executive Officer Tadashi Umino

Tetsuo Matsui

Shigeyuki Tsuchida

Staff Profile (As of September 30, 2007)

Number of Employees Average Age Average Years of Service Average Yearly Salary

1,429 (361) 38.8 14.1 9,585 thousand yenNotes: 1. The number of employees includes executive officers and locally hired staff overseas, but excludes temporary employees.

2. The figure in parentheses is the average number of temporary employees for the year.3. Average yearly salary includes bonuses and pay other than fixed wages.4. Average yearly salary is calculated from October 2006 to September 2007.

90

Business Network(As of September 30, 2007)

Subsidiaries(As of September 30, 2007)

(%)

AozoraCompany Name Location Business Activities Established Capital Bank

Group

ShareholdingShareholding

Aozora Trust Bank, Ltd. 3-1, Kudan-minami 1-chome, Trust services, February 28, 5,437 100.0 —Chiyoda-ku, Tokyo banking operations 1994 milions of JPY

AOZORA Loan Services 13-5, Kudan-kita 1-chome, Distressed loan June 18, 500 67.6 — Co., Ltd. Chiyoda-ku, Tokyo servicing 1996 milions of JPY

Aozora Investment Co., Ltd. 3-1, Kudan-minami 1-chome, Venture capital May 17, 20 100.0 —Chiyoda-ku, Tokyo investment 1991 milions of JPY

Aozora Information Systems 3-1, Kudan-minami 1-chome, Systems development April 1, 150 100.0 — Co., Ltd. Chiyoda-ku, Tokyo Administrative temporary 1967milions of JPYstaff services

AOZORA SOFTWARE 3-1, Kudan-minami 1-chome, Systems development May 9, 12 — 100.0 CORPORATION Chiyoda-ku, Tokyo 1973 milions of JPY

Aozora Securities Co., Ltd. 17-11, Kanda-nishikicho 3-chome, Securities services April 27, 3,000 100.0 —Chiyoda-ku, Tokyo 2006 milions of JPY

AZURE Funding North Cayman Islands, British Investment vehicle August 6, 0 — — America I West Indies 2004 thousands of USD

Aozora Asia Pacific Finance Hong Kong Financial services June 29, 100,000 100.0 — Limited 2005 thousands of USD

Aozora Investment London Financial services March 28, 3,500 100.0 — Management Limited 2006 thousands of GBP

Azure Funding Europe S.A. Luxembourg Investment vehicle April 3, 31 99.9 —2006 thousands of EUR

AZURE Funding North Cayman Islands, British Investment vehicle October 10, 0 — — America II West Indies 2006 thousands of USD

Aozora GMAC London Investments November 6, 502,000 100.0 — Investment Limited 2006 thousands of USD

Aozora GMAC Delaware, USA Investments November 21, 145,180 — 100.0 Investment, Inc. 2006 thousands of USD

Aozora GMAC Delaware, USA Investments November 22, 500,000 — 100.0 Investments LLC 2006 thousands of USD

Acorn Holdings 1-1, Marunouchi 3-chome, Financial services April 13, 3 — —Chiyoda-ku, Tokyo 2007 milions of JPY

Acorn One 1-1, Marunouchi 3-chome, Financial services May 18, 0 — —Chiyoda-ku, Tokyo 2007 milions of JPY

*All companies listed below are consolidated subsidiaries.

Aozora Bank, Ltd.

Banking operations

Securities services

Trust services

Other operations

Head Office and branchesMain affiliate (Aozora Trust Bank, Ltd.)

Head Office and branchesMain affiliate Aozora Securities Co., Ltd.

Main affiliate Aozora Trust Bank, Ltd. Trust services, banking operations

Distressed loan servicingVenture capital investmentSystems developmentFinancial servicesInvestment vehicleInvestment vehicleInvestment vehicleFinancial servicesInvestmentsInvestmentsInvestmentsFinancial servicesFinancial services

Main affiliates AOZORA Loan Services Co., Ltd.Aozora Investment Co., Ltd.Aozora Information Systems Co., Ltd.Aozora Investment Co., Ltd.AZURE Funding North America IAZURE Funding North America IIAzure Funding Europe S.A.Aozora Asia Pacific Finance LimitedAozora GMAC Investment LimitedAozora GMAC Investment, Inc.Aozora GMAC Investment LLCAcorn HoldingsAcorn One

Securities services

91

Office Directory(As of December 1, 2007)

Ueno

6-12, Ueno 2-chome, Taito-ku,Tokyo 110-0005Tel: 03-3835-7511

Ikebukuro

28-13, Minami-Ikebukuro 2-chome,Toshima-ku, Tokyo 171-0022Tel: 03-3988-0911

Chiba

3-1, Fujimi 2-chome, Chuo-ku,Chiba 260-0015Tel: 043-227-3111

Yokohama

4-1, Kita-saiwai 1-chome, Nishi-ku,Yokohama 220-0004Tel: 045-319-1588

Kanazawa

37, Takaokacho 2-chome,Kanazawa 920-0864Tel: 076-231-4151

Nagoya

5-28, Meieki 4-chome, Nakamura-ku,Nagoya 450-0002Tel: 052-566-1900

Kyoto

Oike-Kado, Kawaramachi-dori,Nakagyo-ku, Kyoto 604-8006Tel: 075-211-3341✻ The Kyoto Branch will relocate to the

following address in February 2008:Muromachi-Higashiiru, Shijo-dori,Shimogyo-ku, Kyoto 600-8009

Kansai

5-7, Honmachi 3-chome,Chuo-ku, Osaka 541-0053Tel: 06-6263-2512(Kansai Branch deals solely with corporate clients.)

Osaka

2-3, Namba 2-chome, Chuo-ku,Osaka 542-0076Tel: 06-4708-2051

Umeda

47, Kakutacho 8-chome, Kita-ku,Osaka 530-0017Tel: 06-6315-1111

Hiroshima

13-13, Motomachi, Naka-ku,Hiroshima 730-0011Tel: 082-211-0125

Takamatsu

6-1, Bancho 1-chome,Takamatsu 760-0017Tel: 087-821-5521

Fukuoka

14-18, Tenjin 1-chome, Chuo-ku,Fukuoka 810-0001Tel: 092-751-9627

Domestic Network

● HEAD OFFICE3-1, Kudan-minami 1-chome,Chiyoda-ku, Tokyo 102-8660,JapanTel: +81-3-3263-1111Telex: J26921, J28788(General)NCBTOKSWIFT: NCBTJPJT

● BRANCH OFFICESSapporo

1-4, Kita Sanjo-Nishi 4-chome,Chuo-ku, Sapporo 060-0003Tel: 011-241-8171

Sendai

2-1, Chuo 3-chome, Aoba-ku,Sendai 980-0021Tel: 022-225-1171

Shinjuku

37-11, Shinjuku 3-chome,Shinjuku-ku, Tokyo 160-0022Tel: 03-3354-1600

Nihonbashi

3-11, Nihonbashi 3-chome,Chuo-ku, Tokyo 103-0027Tel: 03-3517-7888

Shibuya

24-12, Shibuya 1-chome, Shibuya-ku,Tokyo 150-0002Tel: 03-3409-6411

Overseas Network

● Representative Offices

SeoulRepresentative Office

Senior RepresentativeMasayuki Ohga

Address12th Floor,Kyobo Building,1, Jongno-1 Ga,Jongno-Gu,Seoul 110-714,Republic of KoreaTel: +82-2-734-8120Fax: +82-2-734-8126

JakartaRepresentative Office

Chief RepresentativeHiroshi Matsumoto

Address17th Floor, Jakarta StockExchange BuildingTower II,Jl. Jend. Sudirman Kav.52-53, Jakarta 12190,IndonesiaTel: +62-21-515-5155Fax: +62-21-515-5156

New YorkRepresentative Office

Chief RepresentativeToshiki Yoshizawa

Address780 Third Avenue,11th Floor, New York,NY 10017, U.S.A.Tel: +1-212-759-3900Fax: +1-212-759-3911

SingaporeRepresentative Office

Head of South East AsiaMasanao Kobayashi

Address6 Temasek Boulevard,#23-02 Suntec Tower Four,Singapore 038986,SingaporeTel: +65-6333-6781Fax: +65-6333-6807

ShanghaiRepresentative Office

Chief RepresentativeMasakazu Arai

AddressUnit 3559, CITIC Square,1168 Nanjing RoadWest,Shanghai 200041, ChinaTel: +86-21-5117-8952Fax: +86-21-5117-8953

92

Share Procedure Information

● Fiscal year From April 1 to March 31

● Annual general shareholders’ meeting Held in June

● Record date for determination March 31 and September 30 (interim dividends)

of dividends

● Record date Annual General Shareholders’ Meeting: March 31 (also to be held in other

cases as deemed necessary, whereby the record date will be set and advance

notice given).

● Newspaper notices The Nihon Keizai Shinbun

● Listed on The First Section of the Tokyo Stock Exchange

● Securities code 8304

● Number of shares 1,000 stocks

constituting one unit

● Transfer agent 5-33, Kitahama 4-chome, Chuo-ku, Osaka

The Sumitomo Trust and Banking Co., Ltd.

● Transfer agent location 4-4, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Stock Transfer Agency Department,

The Sumitomo Trust and Banking Co., Ltd.

(Mailing address) 1-10, Nikkocho, Fuchu City, Tokyo, 183-8701

Stock Transfer Agency Department, The Sumitomo Trust and Banking Co., Ltd.

(Contact number) (Ask for notification of change of address, etc.)

0120-175-417

(Other reference)

0120-176-417

● Agent offices Head Office and branches of The Sumitomo Trust and Banking Co., Ltd.

Published: January 2008Corporate Communication Group,Financial Management Division,AOZORA BANK, Ltd.

3-1, Kudan-minami 1-chome, Chiyoda-ku, Tokyo 102-8660, JapanTel: +81-3-3263-1111

Printed in Japan

Interim Report 2007Six-Month Period Ended September 30, 2007

This interim report is printed on recycled paper using soy ink.

AO

ZORA

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NK, LTD

. Interim Report 2007

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受注番号

得意先名

品　　　名

色数

サイズ

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1585166（株）あおぞら銀行様

2007

あおぞら銀行

Interim R

eport

日付・作業担当者

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