Management Greeting

Thank you for your continuing support of Aozora Bank.

The Bank has steadily implemented its 'Comprehensive Recapitalization Plan' that was announced in August 2012, and in addition to the start of installment repayments of public funds, we have increased our dividend payout ratio as part of our commitment to strengthening our return to shareholders. We announced 'Aozora Bank's Business Model' in February 2013, and amid significant changes in our shareholder composition, we formed a new management framework the following June to begin our new phase. FY2013 represents our first year of operations under this new framework.

The Bank's business model describes our '4 Focuses' as 'retail banking focusing on senior individual customers,' 'proactive approach to SME customers,' 'collaboration with regional financial institutions,' and 'advanced services in specialty finance areas,' and we intend to take full advantage of our strengths in these areas to expand our business franchise. In November 2013, we announced our 'Asian Business Strategy,' which is designed to support our efforts of further developing our business model.

In addition to commencing quarterly dividend payments from FY2013, we introduced a special benefit plan for shareholders in order to further enhance our return to shareholders.

Our accomplishments in our focus businesses, as well as the effective use of management resources and disciplined risk management, enabled us to record net income of 24 billion yen in the first half of the fiscal year, representing steady progress toward our full-year earnings forecast.

The Bank aims to become the 'Primary Secondary Bank: Another Reliable Partner' for its customers, and we remain committed to taking full advantage of our financial intermediary function in order to contribute to the economic and social growth of the country.

Finally, on behalf of the management team of Aozora Bank, I would like to express my gratitude for your ongoing support.

January 2014
Shinsuke Baba
Representative Director, President and Chief Executive Officer