Management Greeting

Thank you for your support of Aozora Bank.

The banking sector continued to face a difficult business environment due to the decline in market interest rates following the introduction of negative interest rates in Japan, as well as ongoing uncertainty in global markets. In the face of these conditions, we were pleased to report a favorable net revenue result in the first half of fiscal year 2016, as well as achieving 60% of our full-year net income forecast of 43.0 billion yen. These results were a product of several factors including our ongoing focus on disciplined balance sheet management and diversification of income sources.

As part of our ongoing effort to enhance returns to shareholders, in May 2015 Aozora announced a revised capital policy in which the Bank adopted a dividend payout ratio of 50% of consolidated net income. Based on our full-year earnings forecast of 43.0 billion yen for fiscal year 2016, our full-year dividend forecast is 18.40 yen per common share. The dividend payment was 4.00 yen per common share in both the first and second quarters of fiscal year 2016. We will continue the payment of dividends on a quarterly basis.

Looking ahead, we remain committed to leveraging our expertise and the provision of differentiated services in order to further enhance Aozora’s corporate value, while properly responding to ongoing changes in the business environment. We also reaffirm our commitment to quality communications with our stakeholders. In addition, we expect to provide full support for our customers as well as contribute to the economic and social development of Japan.

On behalf of the management team of Aozora Bank, I would like to thank all of our stakeholders for their continued support.

January 2017
Shinsuke Baba
Representative Director, President
and Chief Executive Officer