02 10-13 aozora results-q3-2

January 31, 2013

Aozora BankFY2012 3rd Quarter Financial Results

（（（（April 1 - December 31, 2012））））

Copyright © 2012 Aozora Bank, Ltd．All Rights Reserved.

Financial ‘ highlights p. 1

PL Summary 2

Net interest income 3

Net fees and commissions, etc.

4

Net other ordinary income 5

G&A expenses 6

Credit-related expenses 7

BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12

Real estate loans 13-14

FRL credit 15

Securities 16

Dividend Payment Forecast 17

Consolidated vs Non-Consolidated 18

CAR 19

Share Status 20

1

� Net income of 30.6 billion yen for the first nine months of FY2012, steady progress of 76.6% towards the full-year forecast

� Net revenue was 63.9 billion yen, an increase of 4.4 billion yen, or 7.5% year on year. Net interest income increased steadily year on year. The sale of investment products to retail customers continued to increase

� G&A expenses were 28.6 billion yen, a reduction of 0.2 billion yen, or 0.7% year on year, reflecting the Bank’s continued strict control on costs. The OHR remained low at 44.8%

� Net income was 30.6 billion yen, representing steady progress of 76.6% towards the full-year forecast of 40.0 billion yen. Quarterly net income represented a 15th consecutive quarterly profit

� Loans increased for the second consecutive quarter� Loans increased 48.8 billion yen from end-September 2012 and 140.0 billion yen from

end-June 2012

� Maintained strong financial condition� Stable base of retail funding : the percentage of retail funding to total core funding was 66.4%

� Sufficient level of liquidity reserves : approx. 600 billion yen

� Conservative allocation of loan loss reserves : Ratio of loan loss reserves to total loans outstanding was 2.60%, remaining one of the highest among major Japanese banks

� Strong capital : Tier 1 and Capital adequacy ratios are expected to remain among the highest in the Japanese banking industry (These ratios will be announced mid-February)

� Upward revision of FY2012 full-year dividend payment forecast from 12.38 yen to 12.82 yen per common share

I. Financial highlights

(Note) Unless otherwise stated, all figures are on a consolidated basis and amounts

stated in 100 million yen have been rounded to the nearest 100 million yen



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

2

ⅡⅡⅡⅡ. PL: Summary

(100 million yen, %)

3 monthsOct.-Dec.

9 monthsApr.-Dec. A

3 monthsOct.-Dec.

9 monthsApr.-Dec. B

Amount % Page

Net revenue 199 595 211 639 +44 +7.5% 830 77.0%

Net interest income 110 342 108 344 +2 +0.6% - - 3

Net interest margin 1.02% 1.05% 0.98% 1.05% - - - - 3

Net fees & commissions 20 63 17 62 -1 -1.6% - - 4

Net trading revenues 13 53 3 44 -9 -17.5% - - 4

Gains/losses on bond transactions 37 99 45 124 +25 +25.4% - - 5

21 38 39 65 +28 +73.3% - - 5

General & administrative expenses -96 -288 -94 -286 +2 -0.7% -390 73.3% 6

Business profit 104 307 117 353 +46 +15.1% 440 80.2%

Ordinary profit 90 295 108 308 +13 +4.2% 390 78.9%

Net income 91 317 98 306 -10 -3.3% 400 76.6%

-6 20 -8 -24 -44 - -30 81.3% 7

Taxes 0 21 -9 1 -20 -95.9% - -

Progress

Change B-A FY2012full-yearforecast

FY2011 FY2012

Credit-related expenses

Net other ordinary incomeexcl. gains/losses on bond transactions



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

3

ⅡⅡⅡⅡ. PL: Net interest income� Net interest income was 34.4 billion yen, representing a steady year on year

increase

� Funding costs were reduced 9 bps from 0.60% to 0.51%

� The net loan margin expanded 4 bps to 1.38%. The net interest margin was 1.05%

Net interest income （100 million yen, %）

3 monthsOct.-Dec. A

9 monthsApr.-Dec. B

3 monthsOct.-Dec. C

9 monthsApr.-Dec. D

Amount % Amount %

Net interest income 110 342 108 344 -2 -1.8% +2 +0.6%

Interest income 165 517 154 489 -11 -6.7% -28 -5.4%

Interest on loans and discounts 126 387 117 354 -9 -7.3% -33 -8.5%

Interest and dividends on securities 29 97 30 109 +1 +3.3% +12 +12.1%

Other interest income 4 12 3 14 -0 -4.5% +1 +10.2%

Interest on swaps 6 20 3 13 -3 -42.4% -8 -38.2%

Interest expenses -55 -175 -46 -145 +9 - +30 -

Interest on deposits and NCDs -43 -136 -35 -111 +8 - +25 -

Interest on debentures -6 -20 -3 -11 +4 - +9 -

Interest on borrowings and rediscount -1 -3 -1 -3 -0 - -1 -

Other interest expenses -2 -7 -3 -9 -1 - -2 -

Interest on swaps -2 -8 -4 -11 -2 - -2 -Decreases in expenses are shown as positive

Net interest margin

3 monthsOct.-Dec. A

9 monthsApr.-Dec. B

3 monthsOct.-Dec. C

9 monthsApr.-Dec. D

C-A D-B

Yield on total investments (A) 1.57% 1.65% 1.45% 1.56% -0.12% -0.09%

Yield on loans (B) 1.90% 1.94% 1.85% 1.89% -0.05% -0.05%

Yield on securities 0.92% 1.01% 0.95% 1.12% +0.03% +0.11%

Yield on funding (C) 0.55% 0.60% 0.47% 0.51% -0.08% -0.09%

Net interest margin (A)-(C) 1.02% 1.05% 0.98% 1.05% -0.04% +0.00%

Net loan margin (B)-(C) 1.35% 1.34% 1.38% 1.38% +0.03% +0.04%

Change D-BChange C-A

Change

FY2011 FY2012

FY2011 FY2012



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

4

ⅡⅡⅡⅡ. PL: Net fees and commissionsNet trading revenues

� Net fees and commissions were 6.2 billion yen, a decrease of 0.1 billion yen, or 1.6% year on year

� Earnings related to the sale of investment trusts, annuity insurance, and structured bonds, targeting the needs of our mass affluent retail customers, showed steady progress, increasing 0.6 billion yen, or 26.6% year on year to 2.7 billion yen

� Net trading revenues were 4.4 billion yen, a decrease of 0.9 billion yen, or 17.5% year on year, reflecting the temporary suspension of sales of derivative - embedded time deposits

3 monthsOct.-Dec. A

9 monthsApr.-Dec. B

3 monthsOct.-Dec. C

9 monthsApr.-Dec. D

Amount % Amount %

Net fees and commissions 20 63 17 62 -3 -14.6% -1 -1.6%

Fees and commissions received 21 68 18 67 -3 -14.3% -1 -1.7%

Loans, deposits and debentures 14 45 8 37 -6 -40.6% -8 -17.1%

Securities 2 7 4 9 +2 +164.9% +2 +34.2%

Agencies 3 9 3 13 +0 +3.9% +4 +44.6%

Other 3 8 3 8 -0 -1.9% +0 +2.0%

Fee and commission payments -2 -5 -2 -5 +0 - +0 -

7 21 10 27 +3 +40.7% +6 +26.6%

Net trading revenues 13 53 3 44 -10 -75.9% -9 -17.5%

Trading-related financial derivatives 8 42 0 29 -7 -93.6% -13 -32.1%

Others 5 11 3 15 -2 -48.6% +4 +36.8%

Earnings related to the sale of investment trusts,annuity insurance, and structured bonds

FY2011 FY2012


Change D-BChange C-A

Earnings from retail related business



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

5

ⅡⅡⅡⅡ. PL: Net other ordinary income� Gains/losses on bond transactions increased 2.5 billion yen, or 25.4%

year on year to 12.4 billion yen

� Net other ordinary income, excluding gains/losses on bond transactions, increased 2.8 billion yen, or 73.3% year on year to 6.5 billion yen

� Mainly due to profit from limited partnerships including venture capital

* The accounting treatment related to the impairment of securitized products including CMBS changed in the fourth quarter(Jan.-Mar.) of FY2011. Gains/losses on bond transactions in FY2011 do not reflect this change. If we reflect this change in accounting treatment on the first nine months of FY2011 (Apr.-Dec. 2011), losses of 2.8 billion yen included in Others would be reclassified mainly into credit-related expenses


3 monthsOct.-Dec. A

9 monthsApr.-Dec. B

3 monthsOct.-Dec. C

9 monthsApr.-Dec. D

Amount % Amount %

Net other ordinary income 58 136 83 189 +26 +44.7% +53 +38.6%

Gains/losses on bond transactions 37 99 45 124 +8 +20.6% +25 +25.4%

Japanese government bonds (JGB) 16 38 11 28 -5 -31.4% -11 -27.4%Foreign government bonds & mortgage-backed securities 36 89 22 71 -15 -40.3% -18 -20.5%Others -14 -29 13 25 +27 - +54 -

Hedge fund investments (AFS) 1 6 0 2 -1 -89.5% -4 -62.1%Others* -15 -34 12 23 +28 - +57 -

Net other ordinary income excl. gains/losses on bond transactions 21 38 39 65 +18 +88.0% +28 +73.3%

Gains/losses on foreign currency transactions 1 -19 12 1 +11 - +20 -Gains/losses on derivatives other than trading, net -0 -1 -2 -4 -2 - -4 -

Profit from limited partnerships 0 23 23 42 +23 - +19 +82.4%Real estate related 5 16 4 11 -0 -7.8% -6 -34.3%Distressed loan related 3 12 4 13 +1 +41.3% +2 +15.3%Other (venture capital, etc.) -7 -5 15 18 +22 - +23 -

Gains on distressed loans (Aozora Loan Services) 4 16 5 15 +1 +23.4% -1 -7.3%

Debenture issue cost -0 -0 -0 -0 +0 - +0 -

Others 16 18 1 12 -15 -93.9% -7 -37.5%

FY2011 FY2012 Change C-A Change D-B



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

6

ⅡⅡⅡⅡ. PL: G&A expenses� G&A expenses were 28.6 billion yen, a reduction of 0.2 billion yen, or 0.7%

year on year, as a result of the Bank’s continued strict control on costs

� The OHR was 44.8%, remaining one of the lowest among major Japanese banks



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

7

ⅡⅡⅡⅡ. PL: Credit-related expenses � Credit-related expenses were a net expense of 2.4 billion yen

� The credit cost ratio (credit-related expenses as a percentage of loan balance as of end-December 2012) remained low at 0.12%

� Ratio of loan loss reserves to loan balance was 2.60% remaining one of the highest among major Japanese banks


End-Mar.2012

End-Sep.2012

End-Dec.2012

Allowance for loan losses A 770 684 679

26,722 25,656 26,145

2.88% 2.67% 2.60%A / B

Loan balance B

3 monthsOct.-Dec. A

9 monthsApr.-Dec. B

3 monthsOct.-Dec. C

9 monthsApr.-Dec. D

C-A D-B

-6 20 -8 -24 -2 -44

Write-off of loans -3 -10 3 -8 +5 +3

Loss on disposition of loans 0 -2 -19 -55 -19 -53

-100 -135 -28 -142 +72 -7

90 158 36 166 -54 +8

5 -1 -1 1 -6 +1

Recoveries of written-off claims 2 9 2 13 -0 +4

Credit-related expenses

ChangeFY2011 FY2012

Reserve for credit losses onoff-balance-sheet instruments

(100 million yen)

Specific allowance for loan losses

General allowance for loan losses



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

8

ⅢⅢⅢⅢ. Balance Sheet: Summary � Total assets were 5,082.5 billion yen, a decrease of 15.0 billion yen, or 0.3%,

compared to end-March 2012

� Total liabilities increased 50.0 billion yen, or 1.1% to 4,539.9 billion yen as compared to end-March 2012

� Total net assets were 542.6 billion yen, representing a decrease of 65.0 billion yen, or 10.7%, in comparison with end-March 2012� Mainly due to the repurchase and retirement of a part of the Series 5 preferred shares

and the repurchase of common shares based on the comprehensive recapitalization plan

Amount %

Total assets 50,974 51,301 50,825 -150 -0.3%Loans and bills discounted 26,722 25,656 26,145 -577 -2.2% 11-14Securities 13,223 12,700 12,534 -689 -5.2% 16Cash and due from banks 2,604 3,799 3,791 +1,188 +45.6%

4,776 5,118 4,680 -96 -2.0%Others 3,650 4,028 3,674 +25 +0.7%

Total liabilities 44,898 45,136 45,399 +500 +1.1% 9

Deposits 27,197 27,285 27,290 +94 +0.3%Negotiable certificates of deposit 2,098 2,198 2,537 +439 +20.9%Debentures 2,231 1,845 1,747 -485 -21.7%

2,150 2,448 2,170 +20 +0.9%Trading liabilities 3,088 3,627 3,823 +735 +23.8%Others 8,134 7,734 7,832 -302 -3.7%

Total net assets 6,076 6,165 5,426 -650 -10.7%Capital stock 4,198 4,198 1,000 -3,198 -76.2%Capital surplus 336 336 3,307 +2,971 +884.8%Retained earnings 1,735 1,788 1,886 +150 +8.7%

33 77 68 +35 +103.5% -154 -154 -764 -610 -

Others -72 -79 -70 +2 -

Total liabilities and net assets 50,974 51,301 50,825 -150 -0.3%

Page

Change B-AEnd-Mar.2012 A

End-Sep.2012

Valuation difference on available-for-sale securities

End-Dec.2012 B


Trading assets

Treasury stock

Borrowed money



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

9

ⅢⅢⅢⅢ. Balance Sheet: Funding

� The percentage of retail funding to total core funding was stable at 66.4%

� Maintained sufficient liquidity reserves of approximately 600 billion yen

Funding sources



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

10

ⅢⅢⅢⅢ. Balance Sheet: Funding rate

� The Bank’s overall yield on funding has steadily declined, reflecting its ongoing effort to reduce funding costs

*Yield on funding = Interest expenses / Average balance of interest-bearing liabilities



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

11

ⅢⅢⅢⅢ. Balance Sheet: Loans - By Industry� Loans were 2,614.5 billion yen, a decrease of 57.7 billion yen, or 2.2% from

end-March 2012

� Loans increased from end-September, 2012 by 48.8 billion yen, representing an increase for the second consecutive quarter


Balance % Balance % Balance % Amount %

Loans by domestic offices

(excluding Japan offshore market accounts) 25,461 95.3% 24,572 95.8% 25,042 95.8% -420 -1.6%

Manufacturing 2,729 10.2% 2,641 10.3% 2,732 10.4% +3 +0.1%

Agriculture, forestry and fisheries 34 0.1% 29 0.1% 23 0.1% -11 -32.8%

Mining, quarry, gravel extraction 31 0.1% 28 0.1% 26 0.1% -5 -15.5%

Construction 436 1.6% 369 1.4% 415 1.6% -21 -4.8%

Electricity, gas, heat supply and water 62 0.2% 58 0.2% 55 0.2% -7 -11.8%

Information and communications 451 1.7% 538 2.1% 522 2.0% +72 +15.9%

Transport, postal services 1,525 5.7% 1,427 5.6% 1,613 6.2% +88 +5.7%

Wholesale and retail sale 1,328 5.0% 1,104 4.3% 1,111 4.3% -217 -16.3%

Financial and insurance 4,147 15.5% 4,426 17.3% 4,477 17.1% +331 +8.0%

Real estate 8,920 33.4% 8,287 32.3% 8,128 31.1% -792 -8.9%

5,906 66.2% 5,416 65.4% 5,289 65.1% -617 -10.4%

Leasing 613 2.3% 612 2.4% 631 2.4% +18 +2.9%

Other services 1,721 6.4% 1,708 6.7% 1,673 6.4% -48 -2.8%

Local governments 640 2.4% 727 2.8% 609 2.3% -31 -4.9%

Others 2,823 10.6% 2,620 10.2% 3,026 11.6% +203 +7.2%

2,242 8.4% 2,044 8.0% 2,450 9.4% +208 +9.3%

1,260 4.7% 1,085 4.2% 1,103 4.2% -157 -12.5%

Total 26,722 100.0% 25,656 100.0% 26,145 100.0% -577 -2.2%

Domestic loans 23,219 86.9% 22,528 87.8% 22,591 86.4% -628 -2.7%

Overseas loans （（（（A+B）））） 3,503 13.1% 3,128 12.2% 3,554 13.6% +51 +1.5%

Overseas loans with no final risk residing in Japan 3,036 11.4% 2,702 10.5% 3,136 12.0% +100 +3.3%

Loans and bills discountedby industry

Non-recourse loans (Ratio is % of Real estate loans)

Overseas (Headquarters booked) A

Change B-A

Loans by overseas offices incl. Japan offshore market accounts B

A

End-Sep. 12

End Mar. 12 End-Dec. 12

B



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

Asia17%

North America59%

Europe11%

Oceania6%

Others7%

12

Overseas loans as of end-December 2012 (313.6 billion yen) *

＜By industry＞＜By region＞

� * Overseas loans with no final risk residing in Japan

ⅢⅢⅢⅢ. Balance Sheet: Loans - Overseas� Portfolio well diversified by industry� The percentage of overseas loans* to total loans was 12%

＜Proportion of overseas loans and overseas LBO loans＞(100 million yen,%)

End-Mar. 2012 End-Sep. 12 End-Dec. 12

Total loans　A 26,722 25,656 26,145

Overseas loans　B 3,036 2,702 3,136

B/A 11.4% 10.5% 12.0%

Overseas LBO loans （Based on FSB） 1,209 937 882

Manufacturing17%

Mining, quarry, gravel extraction

3%

Construction1%

Electricity, gas, heat supply and

water7%

Information and communications

13%

Transport, postal service

14%

Wholesale and retail trade

2%

Financial and insurance

10%

Real estate14%

Leasing1%

Other services15%

Local governments

3%



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

13

ⅢⅢⅢⅢ. Balance Sheet: Loans - Real estate sector(1/2)

Changes in loans to the real estate sector

� Loans to the real estate sector were 812.8 billion yen of which non-recourse loans were 528.9 billion yen



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

Tokyo80%

Tokyo-Metro4%

Hokkaido8%

Osaka1%

Aichi1%

Fukuoka2%

Others4%

14

� Tokyo-metro focused. Most non-recourse loans were office or residential

ⅢⅢⅢⅢ. Balance Sheet: Loans - Real estate sector(2/2)

� Approx. 90% of the portfolio remained LTV 70% or below

Non-recourse loans as of end-December 2012

＜Area＞＜Sector＞

LTV Status （As of end-Dec. 2012

）

70% or below 89.5%80% or below 95.0%

Cumulative % of portfolio

Residential39%

Office43%

Retail14%

Logistics / Others

1%

Hotel3%

Non-recourse loans

as of end-Dec. 2012 5% 11% 15% 17% 53%

FY2015 FY2016 or laterFY2012 FY2014FY2013　　　　　　 Legal maturity Balance



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

15

ⅢⅢⅢⅢ. Balance Sheet: FRL credit (Non-consolidated)

Non-consolidated

� Financial Reconstruction Law (FRL) claims were 113.0 billion yen, an increase of 3.9 billion yen, or 3.6% from end-March 2012 and the FRL ratio was 4.21%

�The impact on credit-related expenses was limited due to the Bank’s conservative allocation of reserves to date

� The percentage of FRL claims covered by reserves, collateral and guarantees remained high at 91.8%

Coverage 1,120 931 _1,038 354 363 369 766 568 669

87.8% 85.3% 91.8% Ratio of coverage by reserves, collateral and guarantees to FRL claims

ReservesCollateral and guarantees

352 377206

804640

877

119

7547

1,275

1,091 1,130

4.59%

3.99%4.21%

1%

2%

3%

4%

5%

500

1,000

1,500

End-Mar. 11 End-Mar. 12 End-Dec. 12

(100 million yen) Bankrupt

Doubtful

Special attention

The FRL Ratio(Ratio of FRL claimsto total claims)



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

16

ⅢⅢⅢⅢ. Balance Sheet: Securities

Floating rate JGBs as of December 31, 2012, were valued in the same way as at March 31, 2012, on the basis of internal calculations pursuant to Practical Issues Task Force No.25, ‘Practical Solution on Measurement of Fair Value for Financial Assets’ issued by the Accounting Standards Board of Japan. A portion of beneficial interests in investment trusts within ‘monetary claims bought’ are marked at fair value from March 31, 2010, but the amounts (balance sheet total 9.4 billion yen; valuation loss 0.3 billion yen as of December 31, 2012) are not included in the table above.

� Securities were 1,253.4 billion yen, a decrease of 68.9 billion yen, or 5.2%, in comparison with end-March 2012

� ETFs, particularly US dollar denominated, were increased for the purpose of investment portfolio diversification, while JGBs decreased

� Total unrealized gains amounted to 10.8 billion yen(100 m illion yen, % )

A mount %

JG B s 6,160 5,446 5,123 -1,037 -16.8% 58 64 58 -0

TD B on ly 2,002 2,037 2,026 + 24 + 1.2% -0 -0 -0 -0

1 5Y flo a ting ra te on ly 1,485 1,485 1,488 + 3 + 0.2% 55 55 58 + 3

M unic ipal bonds 143 89 80 -62 -43.7% 1 1 1 -1

Corporate bonds 706 627 623 -83 -11.8% -2 -4 -3 -1

E quit ies 267 265 267 -1 -0.2% -0 1 2 + 2

F oreign bonds 4,073 3,717 4,107 + 34 + 0.8% -13 38 6 + 20

US Treas ury 2,532 2,416 2,464 -68 -2.7% -16 8 -5 + 10

M B S 1,037 957 1,200 + 163 + 15.7% -0 25 4 + 4

504 344 443 -61 -12.0% 2 5 7 + 5

CDO 2 2 2 -1 -25.0% 1 1 1 -0

O thers 501 343 441 -60 -12.0% 2 4 7 + 5

O thers 1,874 2,555 2,334 + 460 + 24.5% 17 25 44 + 27

Hedge funds 105 84 91 -13 -12.8% 15 14 17 + 2

E TF s 232 688 455 + 224 + 96.6% 1 8 11 + 10

Inves tm ents in lim ited partners hips 582 543 513 -69 -11.9% 0 2 3 + 2

RE IT 142 144 155 + 13 + 9.4% 2 3 14 + 12

O thers 814 1,097 1,120 + 305 + 37.5% -1 -1 -0 + 1

G M A C only 12 11 13 + 1 + 5.3% - - - -

M oney m arket funds 701 1,001 1,001 + 300 + 42.9% 1 1 1 + 0

Total 13,223 12,700 12,534 -689 -5.2% 60 126 108 + 48

End-Dec .2012 D

End-Mar.2012 C

Others

Unrealiz ed gains / los s es

End-Sep.2012

End-Sep.2012

ChangeD-C

Change B-AEnd-Mar.2012 A

End-Dec .2012 B

B ook value



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

17

ⅣⅣⅣⅣ. Dividend Payment Forecast� Revised dividend forecast from 12.38 yen to 12.82 yen per common

share, reflecting progress in the repurchase of common shares

*Calculated by dividing the total dividend payment, which is 40% of consolidated net income forecast for the full year, by the total number of common shares issued excluding treasury stock as of end-December 2012

Based on the comprehensive recapitalization plan, the Bank resolved to make a common share buyback of 330 million shares (upper limit) between October 1, 2012 and September 30, 2013. Total number of shares repurchased : 249 million common shares as of end-December 2012

The full-year dividend payment per common share is subject to change depending on the level of consolidated net income and the number of shares repurchased going forward

First Half Second Half Full-year

Current Forecast（FY2012） 12.82 yen* 12.82 yen*

Payments in previous term（FY2011）

9.00 yen 9.00 yen

Dividend per common share



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

(100 million yen)

Consolidated net income 306

Non-consolidated net income 306

Difference 0

Business groupin charge

Aozora Investment Co., Ltd. （100%） CBG 0

Aozora Trust Bank, Ltd. （100%） RBBG -0

Aozora Securities Co., Ltd. （100%） RBBG 0

Aozora Loan Services Co., Ltd. （67.6%） SFG 2

Aozora Asia Pacific Finance Limited (AAPF) （100%） SFG -1

AZB CLO 1-4 （100%） SFG -1

AZB Funding （100%） SFG 0

Aozora GMAC （100%） SFG 2

Consolidation elimination - - -2

Company name

18

ⅤⅤⅤⅤ.Reference : Consolidated, Non-consolidated Difference

� Difference between consolidated and non-consolidated net income

*

*Aozora Investment Co., Ltd. was liquidated as of end-October 2012



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

19

ⅤⅤⅤⅤ.Reference : Capital Adequacy Ratio (As of end-September 2012)

30,165 30,310 29,743

5,109 5,414 5,701 5,561 5,873 6,077

16.93%17.86%

19.16%18.43%19.37% 20.43%

0%

5%

10%

15%

20%

0

10,000

20,000

30,000

40,000

50,000

End-Mar.11 End-Mar.12 End-Sep.12

(100 million yen)

Risk-weighted assets Regulatory capital Tier 1 capital Capital adequacy ratio Tier 1 capital ratio

� Tier 1 and capital adequacy ratios are expected to remain among the highest in the Japanese banking industry (To be announced mid-February)

� These ratios are expected to decline compared to end-September 2012 due to the implementation of the comprehensive recapitalization plan



PL Summary 2



4


G&A expenses 6


BS Summary 8

Funding 9-10

Loans 11

Overseas loans 12


FRL credit 15

Securities 16



CAR 19

Share Status 20

20

ⅤⅤⅤⅤ. Reference : Share Status

� Common shares

� Preferred shares (Public funds)

*Based on the comprehensive recapitalization plan, common share buybacks have been conducted since October 1, 2012 As of end-Dec. 2012, Total number of shares repurchased：249 million shares （upper limit：330 million shares）

1,650

403

1,248

Number of shares issued

Treasury stock

Number of shares(million shares)

Shares outstanding (After deduction of treasury stock)

Common shares

(as of end-Dec. 2012)

24

@ 1,000

215

@ 600

Total 1,528 -

June 2022

June 2022

-

Conversion price(yen)

200

-

450～540

406

Mandatoryconversion

Current number of commonshares equivalent(million shares)

120

Per share (yen)

Number of shares (million)

286

(as of end-Dec. 2012)Accounting book value (100 million yen)

5th preferred shares 1,287

4th preferred shares 241


This presentation contains forward-looking statements regarding the Bank’s financial condition and results of operations. These forward-looking statements, which include the Bank’s views and assumptions with respect to future events, involve certain risks and uncertainties. Actual results may differ from forecasts due to changes in economic conditions and other factors including the effects of changes in general economic conditions, changes in interest rates, stock markets and foreign currency, and any ensuing decline in the value of our securities portfolio, incurrence of significant credit-related cost and the effectiveness of our operational, legal and other risk management policies

< Inquiries >

AOZORA BANK, LTD.

Corporate Communication Division

TEL: 03-5212-9253

FAX: 03-3239-8065

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

Mr. Hiroyuki Kajitani [email protected]

Mr. Richard Roylance [email protected]

Ms. Junko Matsumoto [email protected]

Mr. Yasunari Shimizu [email protected]

Ms. Yasuko Fukai [email protected]

02 10-13 aozora results-q3-2

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