Management Greeting

Thank you for your continuing support of Aozora Bank.

FY2013 represented the first year of operations under the Bank's new management framework, established amid significant changes in the Bank's shareholder composition following a secondary offering of Aozora shares by the Bank's former parent company, Cerberus. Our net income of 42.3 billion yen exceeded the full-year earnings forecast and represented a strong start for the first year of Aozora's new phase.

The Bank's positive results reflect our ongoing efforts to expand our business franchise by strengthening our business model, announced in February 2013, which describes our '4 Focuses' as 'retail banking focusing on senior individual customers', 'proactive approach to SME and other corporate customers', 'collaboration with regional financial institutions' and 'advanced services in specialty finance areas'.

In accordance with the Bank's 'Comprehensive Recapitalization Plan', announced in August 2012, we are making steady installment repayments of public funds, and have raised our dividend payout ratio to 40% of consolidated net income. We also commenced the payment of dividends on a quarterly basis from FY2013 and introduced a special benefit plan for our shareholders.

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 social and economic 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.

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