Financial Resultsfor 3rd Quarter of

FY2013

【　INDEX　】

Ⅰ. 【Consolidated】 1【Non-consolidated】 2

Ⅱ. 【Consolidated】 3

Ⅲ. 【Non-consolidated】 4

Ⅳ. 【Non-consolidated】 4

Ⅴ. 【Consolidated】 5Disclosure of exposure to securitized products

Summary of Revenue and Expenses

Securities

Disclosed Claims under the Financial Reconstruction Law ("FRL Credit")

Allowance and Coverage for FRL Credit

Aozora Bank, Ltd.

１．Summary of Revenue and Expenses【Consolidated】

(Unit: JPY millions)

FY 20133rd Quarter

FY 20123rd Quarter

(A) (A)-(B) (B)

Consolidated net revenue　*1 1 60,137 (3,769) 63,906Net interest income 2 33,069 (1,322) 34,391Net fees and commissions 3 9,295 3,089 6,206Net trading income 4 6,580 2,182 4,398Net other ordinary income 5 11,191 (7,718) 18,909

General and administrative expenses 6 (28,905) (307) (28,598)Business profit　*2 7 31,232 (4,076) 35,308Credit-related expenses 8 (2,900) (461) (2,439)

Write-off of loans 9 (1,267) (469) (798)Provision of specific allowance for loan losses 10 (2,243) 11,947 (14,190)Provision of general allowance for loan losses 11 (8,168) (24,769) 16,601 Provision of allowance for loans to restructuring countries 12 - - - Loss on disposition of loans 13 1,601 7,066 (5,465)Recoveries of written-off claims 14 7,525 6,176 1,349 Provision of reserve for credit losses on off-balance-sheet instruments 15 (348) (411) 63

Gains (losses) on stock transactions 16 11,905 12,264 (359)Income from interests in associated undertakings 17 - - - Other 18 1,097 2,839 (1,742)Ordinary profit 19 41,334 10,567 30,767Extraordinary income (loss) 20 (14) 140 (154)Income before income taxes and minority interests 21 41,319 10,707 30,612income taxes-current 22 (2,069) (640) (1,429)Income taxes-deferred 23 (5,065) (6,581) 1,516Minority interests in income 24 (48) 5 (53)Net income 25 34,136 3,490 30,646

(Scope of Consolidation and Equity-Method Application） (Number of companies)

December 31, 2013 December 31, 2012

(A) (A)-(B) (B)

Consolidated subsidiaries 15 3 12Affiliated companies applying equity-method 0 0 0

The amounts are rounded down to the nearest JPY millions.(Note)

Consolidated net revenue = (Interest income - Interest expenses) + (Fees and commissions - Fees and commissions payments) + (Trading income- Trading expenses) + (Other ordinary income - Other ordinary expenses)

*1

Business profit = Consolidated net revenue - General and administrative expenses*2

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Aozora Bank, Ltd.

【Non-consolidated】(Unit: JPY millions)

FY 20133rd Quarter

FY 20123rd Quarter

(A) (A)-(B) (B)

Net revenue 1 62,658 1,743 60,915(Excluding gains(losses) on bond transactions) 2 63,135 14,600 48,535Net interest income 3 38,462 3,961 34,501Net fees and commissions 4 8,678 2,667 6,011Net trading income 5 5,154 1,584 3,570Net other ordinary income 6 10,363 (6,469) 16,832 (Gains(losses) on bond transactions) 7 (476) (12,856) 12,380

8 (26,639) (75) (26,564)Personnel 9 (13,253) (420) (12,833)Property and equipment 10 (12,069) 276 (12,345)Taxes 11 (1,316) 69 (1,385)

Business profit before general allowance for loan losses 12 36,018 1,668 34,350Excluding gains (losses) on bond transactions 13 36,495 14,525 21,970

Credit-related expenses 14 (2,470) (676) (1,794)Written-off of loans 15 (636) (98) (538)Provision of specific allowance for loan losses 16 (2,305) 11,974 (14,279)Provision of general allowance for loan losses 17 (8,215) (24,754) 16,539Provision of allowance for loans to restructuring countries 18 - - - Loss on disposition of loans 19 1,601 6,434 (4,833)Recoveries of written-off claims 20 6,985 5,670 1,315

21 100 98 2

Gains (losses) on stock transactions 22 5,592 5,951 (359)Other 23 1,172 2,861 (1,689)Ordinary profit 24 40,314 9,806 30,508Extraordinary income (loss) 25 (13) 139 (152)Income before income taxes 26 40,300 9,945 30,355Income taxes-current 27 (1,809) (562) (1,247)Income taxes-deferred 28 (5,067) (6,596) 1,529Net income 29 33,423 2,786 30,637

30 27,803 (6,547) 34,350

(Note) The amounts are rounded down to the nearest JPY millions.

General and administrative expenses

Business profit

Provision of reserve for credit losses on off-balance-sheet instruments

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Aozora Bank, Ltd.

Ⅱ. Securities

1. Held-to-maturity bonds that have market prices or reasonably determinable prices (Unit: JPY millions)

Book Value Fair Value Difference Book Value Fair Value Difference Book Value Fair Value Difference

Government bonds - - - - - - - - -

Local government bonds - - - - - - - - -

Short-term corporate bonds - - - - - - - - -

Corporate bonds - - - - - - - - -

Others - - - - - - - - -

Total - - - - - - - - -

Fair Value is based on market price or reasonably determinable price at the end of the accounting period.

2. Available-for-sale securities that have market prices or reasonably determinable prices (Unit: JPY millions)

Cost Book Value Difference Cost Book Value Difference Cost Book Value Difference

Stocks 935 1,751 815 935 1,632 696 935 1,443 508

Bonds 344,590 346,038 1,447 453,762 455,571 1,808 534,414 540,514 6,099

Government bonds 273,884 275,504 1,619 369,578 371,534 1,956 459,048 465,014 5,965

Local government bonds 13,897 13,895 (1) 15,651 15,741 89 11,143 11,331 187

Short-term corporate bonds - - - - - - - - -

Corporate bonds 56,808 56,638 (169) 68,533 68,295 (237) 64,222 64,168 (53)

Others 666,437 659,748 (6,689) 591,928 588,737 (3,191) 671,589 683,508 11,919

Total 1,011,963 1,007,538 (4,425) 1,046,627 1,045,941 (685) 1,206,939 1,225,466 18,527

(Note)

(Note)

1. Certain amounts shown in the tables include certain beneficiary interests in trust classified as 'Monetary claims bought ,'inaddition to 'Securities' stated in the consolidated balance sheets.

2. Book Value is based on market price or reasonably determinable price at the end of the accounting period.

3. Floating rate JGBs were valued based on the reasonably calculated price 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.

December 31, 2013 September 30, 2013 March 31, 2013

December 31, 2013 September 30, 2013 March 31, 2013

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Aozora Bank, Ltd.

Ⅲ. Disclosed Claims under the Financial Reconstruction Law ("FRL Credit")

□ After partial and direct written-off

【Non-consolidated】 (Unit: JPY millions)

December 31, 2013 September 30, 2013 March 31, 2013

(A) (A) - (B) (A) - (C) (B) (C)

Bankrupt and similar credit 4,111 1,305 (3,039) 2,806 7,150

Doubtful credit 65,319 6 (13,845) 65,313 79,164

Special attention credit 20,084 317 84 19,767 20,000

Total (a) 89,515 1,628 (16,800) 87,887 106,315

Ⅳ. Allowance and Coverage for FRL Credit

□ After partial and direct written-off

【Non-consolidated】 (Unit: JPY millions)

December 31, 2013 September 30, 2013 March 31, 2013

(A) (A) - (B) (A) - (C) (B) (C)

Allowance & Coverage (b) 81,376 2,312 (13,572) 79,064 94,948

Allowance for loan losses (c) 31,332 1,144 (3,461) 30,188 34,793

Collateral / guarantee coverage (d) 50,044 1,169 (10,110) 48,875 60,154

（Note）Allowance for loan losses (c) is the sum of specific allowance for loan losses and general allowance for loan losses for FRL Credit.

Coverage Ratio b/a

December 31, 2013 September 30, 2013 March 31, 2013

(A) (A) - (B) (A) - (C) (B) (C)

90.9% 0.9% 1.6% 90.0% 89.3%

Allowance Ratio c/(a-d)

December 31, 2013 September 30, 2013 March 31, 2013

(A) (A) - (B) (A) - (C) (B) (C)

79.4% 2.0% 4.0% 77.4% 75.4%

After partial and direct written-off

After partial and direct written-off

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Aozora Bank, Ltd.

V. Disclosure of exposure to securitized products 1. CDO, CMBS and RMBS Exposure Exposure of the Group to CDO (Collateralized Debt Obligation), CMBS (Commercial Mortgage-Backed Securities) and RMBS (Residential Mortgage-Backed Securities) is as follows: (Unit: 100 million JPY)

2013/9 2013/12 CDO 2 1 North America 2 1CMBS 111 67

Japan 67 19Asia 25 27

North America 19 21RMBS 10 10 Japan 10 10 2. Leveraged Finance

The exposure of the Group to leveraged finance is as follows:

The following amount is the aggregated amount of loan balance rendered for M&A finance

(including refinance for M&A deals in the past). It excludes loans that are in investment grade or equivalent ratings.

(Unit: 100 million JPY)

2013/9 2013/12

Loan balance 1,464 1,448

Commitment line 37 31(Unfunded)

Total leveraged finance 1,501 1,479

Geographical distribution

Total leveraged finance (Unit: 100 million JPY)

2013/9 2013/12

North America 599 600

Europe 110 117

Asia - -

Japan 695 664

Oceania 97 99

Total 1,501 1,479

(Note) The figures stated in 100 million yen are rounded to the nearest 100 million yen.

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