Interim report
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Financial Statements for the Fiscal Year Ended March 31 , 2026 JAPAN POST BANK Co. , Ltd. and Consolidated Subsidiaries
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1. Consolidated Financial Statements (1) Consolidated Balance Sheets (Millions of yen) As of March 31, 2025 As of March 31, 2026 Assets: Cash and due from banks 64,639,102 54,349,817 Call loans 2,135,000 1,760,000 Receivables under resale agreements 8,463,537 8,270,151 Monetary claims bought 593,739 517,916 Trading account securities 224 214 Money held in trust 5,721,973 6,222,830 Securities *1, 2, 3, 4 143,588,016 *1, 2, 3, 4 145,406,910 Loans *3, 4, 5 3,130,595 *3, 4, 5 4,372,193 Foreign exchanges *3 134,261 *3 178,799 Other assets *3, 4 4,459,237 *3, 4 4,691,649 Tangible fixed assets *6 191,935 *6 176,188 Buildings 66,422 62,714 Land 63,720 63,407 Construction in progress 64 62 Other 61,728 50,003 Intangible fixed assets 101,559 97,729 Software 67,610 78,630 Other 33,948 19,099 Asset for retirement benefits 1,432 42,992 Deferred tax assets 442,748 486,791 Reserve for possible loan losses (1,057) (1,235) Reserve for possible investment losses (775) (1,373) Total assets 233,601,531 226,571,574 - 1 -
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(Millions of yen) As of March 31, 2025 As of March 31, 2026 Liabilities: Deposits *4 190,461,748 *4 186,108,700 Payables under repurchase agreements *4 26,985,038 *4 22,517,468 Payables under securities lending transactions *4 2,004,678 *4 2,433,717 Borrowed money *4 2,510,100 *4 2,819,400 Foreign exchanges 924 939 Other liabilities 2,496,676 3,381,840 Reserve for bonuses 7,555 8,349 Reserve for bonuses for management board 235 287 Liability for retirement benefits 4 6 Reserve for employee stock ownership plan trust 414 432 Reserve for management board benefit trust 630 732 Reserve for reimbursement of deposits 42,534 39,607 Total liabilities 224,510,541 217,311,484 Net assets: Capital stock 3,500,000 3,500,000 Capital surplus 3,500,000 3,497,232 Retained earnings 2,784,473 3,061,190 Treasury stock (6,384) (31,485) Total shareholders’ equity 9,778,088 10,026,937 Net unrealized gains (losses) on available-for- sale securities 390,850 628,853 Net deferred gains (losses) on hedges (1,126,952) (1,464,276) Accumulated adjustments for retirement benefits (1,833) 21,935 Total accumulated other comprehensive income (737,936) (813,487) Non-controlling interests 50,836 46,641 Total net assets 9,090,989 9,260,090 Total liabilities and net assets 233,601,531 226,571,574 - 2 -
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(2) Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Ordinary income 2,522,052 2,852,206 Interest income 1,750,168 2,270,832 Interest on loans 12,140 23,864 Interest and dividends on securities 1,555,103 1,860,830 Interest on call loans 5,756 10,411 Interest on receivables under resale agreements 8,609 32,599 Interest on receivables under securities borrowing transactions 568 ― Interest on deposits with banks 149,801 318,725 Other interest income 18,190 24,401 Fees and commissions 184,839 196,841 Other operating income 3,157 3,222 Other ordinary income 583,886 381,310 Reversal of reserve for possible loan losses 10 ― Recoveries of written-off claims 15 15 Other *1 583,860 *1 381,294 Ordinary expenses 1,937,518 2,093,056 Interest expenses 813,244 988,450 Interest on deposits 104,253 313,418 Interest on payables under repurchase agreements 332,517 304,246 Interest on payables under securities lending transactions 117,323 94,284 Interest on borrowings 2,713 8,292 Other interest expenses 256,436 268,208 Fees and commissions 28,483 29,254 Other operating expenses 70,590 71,328 General and administrative expenses *2 914,753 *2 946,425 Other ordinary expenses 110,446 57,597 Provision for reserve for possible loan losses ― 187 Other *3 110,446 *3 57,410 Net ordinary income 584,533 759,150 Extraordinary income ― 403 Gains on step acquisitions ― 403 Extraordinary loss 355 1,236 Losses on sales and disposals of fixed assets 352 596 Losses on impairment of fixed assets 3 640 Income before income taxes 584,178 758,316 Income taxes—current 168,051 229,355 Income taxes—deferred (5,149) (10,631) Total income taxes 162,901 218,723 Net income 421,277 539,592 Net income attributable to non-controlling interests 6,952 14,009 Net income attributable to owners of parent 414,324 525,583 - 3 -
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Consolidated Statements of Comprehensive Income (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Net income 421,277 539,592 Other comprehensive income (loss) *1 (830,441) *1 (75,580) Net unrealized gains (losses) on available-for- sale securities (966,686) 237,973 Net deferred gains (losses) on hedges 139,180 (337,324) Adjustments for retirement benefits (2,934) 23,769 Comprehensive income (loss) (409,164) 464,011 Total comprehensive income (loss) attributable to: Owners of parent (417,348) 450,031 Non-controlling interests 8,184 13,980 - 4 -
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(3) Consolidated Statements of Changes in Net Assets For the fiscal year ended March 31, 2025 (Millions of yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Balance at the beginning of the fiscal year 3,500,000 3,500,000 2,574,567 (1,523) 9,573,043 Cumulative effects of changes in accounting policies 47 47 Restated balance 3,500,000 3,500,000 2,574,615 (1,523) 9,573,091 Changes during the fiscal year Cash dividends (184,494) (184,494) Net income attributable to owners of parent 414,324 414,324 Repurchase of treasury stock (25,206) (25,206) Disposal of treasury stock 0 373 373 Cancellation of treasury stock (19,971) 19,971 ― Changes in equity of parent due to transactions with non- controlling shareholders ― Transfer from retained earnings to capital surplus 19,971 (19,971) ― Net changes in items other than shareholders’ equity Total changes during the fiscal year ― ― 209,858 (4,861) 204,997 Balance at the end of the fiscal year 3,500,000 3,500,000 2,784,473 (6,384) 9,778,088 - 5 -
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Accumulated other comprehensive income Non-controlling interests Total net assets Net unrealized gains (losses) on available-for- sale securities Net deferred gains (losses) on hedges Accumulated adjustments for retirement benefits Total accumulated other comprehensive income Balance at the beginning of the fiscal year 1,358,768 (1,266,085) 1,101 93,784 41,094 9,707,923 Cumulative effects of changes in accounting policies (47) (47) ― Restated balance 1,358,768 (1,266,133) 1,101 93,736 41,094 9,707,923 Changes during the fiscal year Cash dividends (184,494) Net income attributable to owners of parent 414,324 Repurchase of treasury stock (25,206) Disposal of treasury stock 373 Cancellation of treasury stock ― Changes in equity of parent due to transactions with non- controlling shareholders ― Transfer from retained earnings to capital surplus ― Net changes in items other than shareholders’ equity (967,918) 139,180 (2,934) (831,673) 9,742 (821,931) Total changes during the fiscal year (967,918) 139,180 (2,934) (831,673) 9,742 (616,933) Balance at the end of the fiscal year 390,850 (1,126,952) (1,833) (737,936) 50,836 9,090,989 - 6 -
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For the fiscal year ended March 31, 2026 (Millions of yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Balance at the beginning of the fiscal year 3,500,000 3,500,000 2,784,473 (6,384) 9,778,088 Cumulative effects of changes in accounting policies ― Restated balance 3,500,000 3,500,000 2,784,473 (6,384) 9,778,088 Changes during the fiscal year Cash dividends (208,859) (208,859) Net income attributable to owners of parent 525,583 525,583 Repurchase of treasury stock (65,368) (65,368) Disposal of treasury stock 0 260 260 Cancellation of treasury stock (40,006) 40,006 ― Changes in equity of parent due to transactions with non- controlling shareholders (2,767) (2,767) Transfer from retained earnings to capital surplus 40,006 (40,006) ― Net changes in items other than shareholders’ equity Total changes during the fiscal year ― (2,767) 276,717 (25,100) 248,848 Balance at the end of the fiscal year 3,500,000 3,497,232 3,061,190 (31,485) 10,026,937 - 7 -
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Accumulated other comprehensive income Non-controlling interests Total net assets Net unrealized gains (losses) on available-for- sale securities Net deferred gains (losses) on hedges Accumulated adjustments for retirement benefits Total accumulated other comprehensive income Balance at the beginning of the fiscal year 390,850 (1,126,952) (1,833) (737,936) 50,836 9,090,989 Cumulative effects of changes in accounting policies ― ― Restated balance 390,850 (1,126,952) (1,833) (737,936) 50,836 9,090,989 Changes during the fiscal year Cash dividends (208,859) Net income attributable to owners of parent 525,583 Repurchase of treasury stock (65,368) Disposal of treasury stock 260 Cancellation of treasury stock ― Changes in equity of parent due to transactions with non- controlling shareholders (2,767) Transfer from retained earnings to capital surplus ― Net changes in items other than shareholders’ equity 238,003 (337,324) 23,769 (75,551) (4,195) (79,747) Total changes during the fiscal year 238,003 (337,324) 23,769 (75,551) (4,195) 169,101 Balance at the end of the fiscal year 628,853 (1,464,276) 21,935 (813,487) 46,641 9,260,090 - 8 -
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(4) Consolidated Statements of Cash Flows (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Cash flows from operating activities: Income before income taxes 584,178 758,316 Depreciation and amortization 45,744 51,590 Losses on impairment of fixed assets 3 640 Losses (gains) on step acquisitions ― (403) Equity in losses (gains) of affiliates (322) (388) Net change in reserve for possible loan losses (18) 178 Net change in reserve for possible investment losses ― 597 Net change in reserve for bonuses 59 794 Net change in reserve for bonuses for management board 235 52 Net change in asset for retirement benefits (4,478) (6,998) Net change in liability for retirement benefits (2,052) 2 Net change in reserve for employee stock ownership plan trust (95) 18 Net change in reserve for management board benefit trust 203 102 Net change in reserve for reimbursement of deposits (8,416) (2,926) Interest income (1,750,168) (2,270,832) Interest expenses 813,244 988,450 Losses (gains) related to securities—net 12,843 (42,942) Losses (gains) on money held in trust—net (451,533) (223,654) Foreign exchange losses (gains)—net (423,621) (1,065,940) Losses (gains) on sales and disposals of fixed assets—net 352 596 Net change in loans 3,716,839 (1,242,195) Net change in deposits (2,338,968) (4,353,048) Net change in borrowed money 525,200 309,300 Net change in negotiable certificates of deposit ― (10,000) Net change in call loans, etc. 1,069,817 633,336 Net change in call money, etc. 2,942,412 (4,467,570) Net change in payables under securities lending transactions (369,120) 429,038 Net change in foreign exchange assets 47,070 (44,537) Net change in foreign exchange liabilities (348) 15 Interest received 1,723,342 2,173,385 Interest paid (791,366) (880,569) Other—net (569,260) 35,952 Subtotal 4,771,774 (9,229,638) Income taxes refund (paid) (174,481) (207,812) Net cash provided by (used in) operating activities 4,597,293 (9,437,450) - 9 -
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(Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Cash flows from investing activities: Purchases of securities (28,234,677) (24,962,587) Proceeds from sales of securities 2,957,649 1,724,779 Proceeds from maturity of securities 27,472,192 22,969,997 Investment in money held in trust (649,649) (874,498) Proceeds from disposition of money held in trust 1,033,508 618,434 Purchases of tangible fixed assets (23,949) (8,435) Purchases of intangible fixed assets (29,645) (34,177) Purchases of stocks of subsidiaries resulting in change in the scope of consolidation ― (262) Other—net (24) (17) Net cash provided by (used in) investing activities 2,525,403 (566,767) Cash flows from financing activities: Repurchase of treasury stock (25,206) (65,368) Proceeds from disposal of treasury stock 53 24 Proceeds from investments by non-controlling shareholders 13,308 2,410 Cash dividends paid (184,490) (208,778) Cash dividends paid to non-controlling shareholders (11,750) (19,510) Purchases of stocks of subsidiaries not resulting in change in the scope of consolidation ― (3,697) Purchases of investments of subsidiaries not resulting in change in the scope of consolidation ― (147) Net cash provided by (used in) financing activities (208,086) (295,066) Effect of exchange rate changes on cash and cash equivalents ― ― Net change in cash and cash equivalents 6,914,609 (10,299,284) Cash and cash equivalents at the beginning of the fiscal year 57,724,492 64,639,102 Cash and cash equivalents at the end of the fiscal year *1 64,639,102 *1 54,339,817 - 10 -
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Notes to Consolidated Financial Statements Basis of Presenting Consolidated Financial Statements JAPAN POST BANK Co., Ltd. (the “Bank,” together with its consolidated subsidiaries, the “Group”) became a private bank under the Banking Act of Japan (the “Banking Act”), as a wholly owned subsidiary of JAPAN POST HOLDINGS Co., Ltd., following its privatization on October 1, 2007 in accordance with the Postal Service Privatization Act. In November 2015, the Bank filed for an initial public offering. As a result, the Bank is no longer a wholly owned subsidiary of JAPAN POST HOLDINGS Co., Ltd., while a substantial portion of its shares is still held by JAPAN POST HOLDINGS Co., Ltd. The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in a) the Japanese Financial Instruments and Exchange Act and its related accounting regulations and b) the “Ordinance for the Enforcement of the Banking Act” (Ordinance of Ministry of Finance No. 10 of 1982), and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which differ in certain respects as to application and disclosure requirements from International Financial Reporting Standards. In conformity with the Japanese Financial Instruments and Exchange Act and its related accounting regulations, all Japanese yen figures in the consolidated financial statements have been rounded down to the nearest million yen amount, except for per share data. Accordingly, the total of each account may not be equal to the combined total of individual items. (Significant accounting policies for preparing consolidated financial statements) 1. Scope of consolidation (1) Consolidated subsidiaries: 18 companies Name of principal companies JAPAN POST BANK LOAN CENTER Co., Ltd. JP Asset Management Co., Ltd. Japan Post Investment Corporation Japan Post Bank Capital Partners Co., Ltd. (Change in the scope of consolidation) One company was newly included in the scope of consolidation from the fiscal year ended March 31, 2026 as the Bank acquired additional shares of JP Asset Management Co., Ltd., which had been an affiliate accounted for by the equity method, and made it a subsidiary. In addition, one newly established company was included in the scope of consolidation from the fiscal year ended March 31, 2026. (2) Non-consolidated subsidiaries Name of principal company Advanced Fintech I Limited Partnership The non-consolidated subsidiaries were excluded from the scope of consolidation since their assets, ordinary income, and our share of their net income, retained earnings and accumulated other comprehensive income did not have a material impact on, and their exclusion from the scope of consolidation would not prevent a reasonable judgment of, the Group’s financial position and business results. 2. Application of the equity method (1) Affiliates accounted for by the equity method: 1 company Name of principal companies ATM Japan Business Service, Ltd. (Change in the scope of application of the equity method) JP Asset Management Co., Ltd. was excluded from the scope of application of the equity method for the reason described in “1. Scope of consolidation” above. - 11 -
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(2) Non-consolidated subsidiaries that are not accounted for by the equity method Name of principal company Advanced Fintech I Limited Partnership (3) Affiliates that are not accounted for by the equity method Name of principal company JKK Co., Ltd. The non-consolidated subsidiaries and affiliates that are not accounted for by the equity method were excluded from the scope of the equity method since our share of their net income, retained earnings and accumulated other comprehensive income did not have a material impact, and their exclusion from the equity method would not have a significant impact, on the consolidated financial statements. 3. Fiscal years of consolidated subsidiaries (1) Balance sheet dates of the consolidated subsidiaries are as follows: December 31: 13 companies March 31: 5 companies (2) Certain consolidated subsidiaries whose balance sheet date is December 31 are consolidated using the preliminary financial statements as of March 31, while other consolidated subsidiaries are consolidated using the financial statements as of their respective balance sheet dates. Appropriate adjustments were made to material transactions during the periods between their respective balance sheet dates and the consolidated balance sheet date. 4. Accounting policies (1) Trading account securities Trading account securities are stated at fair value. (2) Securities (i) Held-to-maturity securities, which are expected to be held to maturity with the positive intent and ability to hold to maturity, are stated at amortized cost (straight-line method) determined by the moving-average method. Available-for-sale securities are stated at fair value (cost of securities sold is primarily calculated using the moving-average method). However, shares, etc. that do not have a market price are stated at cost determined by the moving-average method. Net unrealized gains or losses including foreign exchange fluctuations, but excluding cases where the fair value hedge accounting method is applied to hedge exposure to the risks of foreign exchange fluctuations, net of applicable income taxes, are stated as a separate component of net assets. (ii) For the securities that form part of trust assets in money held in trust, stocks are stated using the same method as (2) (i) above. Net unrealized gains or losses on money held in trust classified as available-for-sale are stated as a separate component of net assets. (3) Derivatives Derivatives are stated at fair value. (4) Fixed assets (i) Tangible fixed assets Depreciation of tangible fixed assets is computed using the straight-line method. The range of useful lives is principally from 3 to 50 years for buildings and from 2 to 75 years for others. - 12 -
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(ii) Intangible fixed assets The amortization of intangible fixed assets is computed using the straight-line method. Capitalized cost of computer software developed and obtained for internal use is amortized over the estimated useful life (mainly 5 years). (5) Reserve for possible loan losses The reserve for possible loan losses is provided for in accordance with the prescribed standards for write- offs and reserves as described below: Loans to normal borrowers and borrowers requiring caution, as provided by “Practical Guidance for Checking Internal Controls for Self-Assessments of Assets by Banks and Other Financial Institutions and for Audits of Loans Written Off and Loan Loss Allowance Provisions” (Japanese Institute of Certified Public Accountants (JICPA), Special Committee for Audits of Banks, etc., Report No. 4, October 8, 2025), are classified into certain groups, and a reserve is provided for each group based on the estimated rate of loan losses. For loans to doubtful borrowers, a reserve is provided in the amount of loans, net of amounts expected to be collected through disposition of collateral or through execution of guarantees, and considered to be necessary based on a solvency assessment. For loans to bankrupt or substantially bankrupt borrowers, a reserve is provided based on the amount of loans, net of amounts expected to be collected through disposition of collateral or to be recoverable under guarantees. All loans are assessed initially by the marketing and other departments based on internal rules for self- assessment of asset quality. The asset evaluation department, which is independent from the marketing and other departments, reviews these self-assessments. (6) Reserve for possible investment losses Reserve for possible investment losses, which is provided for the losses on investment, is recorded in the amount recognized to be necessary in consideration of the financial condition, etc. at the issuer of securities. (7) Reserve for bonuses The reserve for bonuses is provided for the estimated amount of employees’ bonuses attributable to the fiscal year. (8) Reserve for bonuses for management board The reserve for bonuses for management board is provided for the estimated amount of bonuses for management board attributable to the fiscal year. (9) Reserve for employee stock ownership plan trust The reserve for employee stock ownership plan trust, which is provided for the payment of the Bank’s shares to employees, is recorded in the amount expected to be incurred at the end of the fiscal year based on the estimated amount of stock benefit obligations at the end of the fiscal year. (10) Reserve for management board benefit trust The reserve for management board benefit trust, which is provided for the payment of the Bank’s shares, etc. to Executive Officers, is recorded in the amount expected to be incurred at the end of the fiscal year based on the estimated amount of stock benefit obligations at the end of the fiscal year. (11) Reserve for reimbursement of deposits The reserve for reimbursement of deposits, which is provided for depositors’ requests for refunds in relation to deposits that are no longer recorded as liabilities, is recorded in the amount of expected losses to be incurred, which is estimated based on future requests for refunds. (12) Employees’ retirement benefits The method of attributing projected benefit obligation to the periods ended on or before March 31, 2026 is the benefit formula basis. Prior service cost is amortized using the straight-line method for a fixed period (10 years), within the employees’ average remaining service period. Actuarial gains and losses are amortized using the straight-line method for a fixed period (10 years), within the employees’ average remaining service period, from the following fiscal year after they are incurred. - 13 -
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(13) Significant revenues and expenses The Group has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020). The Group recognizes revenue at the amount expected to be received in exchange for the promised goods or services when the control of its goods or services is transferred to customers. (14) Foreign currency transactions Foreign currency denominated assets and liabilities are translated into Japanese yen principally at the exchange rates in effect at the consolidated balance sheet date. (15) Hedge accounting (i) Hedging against interest rate risks The Group uses interest rate swaps to reduce its exposure to interest rate risk on its monetary assets and liabilities. The Group applies the deferred hedge accounting method, or special accounting treatment for interest rate swaps, for hedges of interest rate risk on its monetary assets and liabilities. As for portfolio hedges on groups of large-volume, small-value monetary debts, the Group applies the deferred hedge accounting method as stipulated in “Treatment of Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24, March 17, 2022). To evaluate the effectiveness of portfolio hedges on groups of large-volume, small-value monetary debts, the Group designates deposits as hedged items and interest rate swaps and others as hedging instruments and assesses how the hedging instruments offset changes in the fair value of hedged items by grouping them into their maturities. The Group considers the individual hedges to be highly effective because the Group designates the hedges in such a way that the major conditions of the hedged items are almost the same as the hedging instruments, which allows the interest rate swaps to meet conditions stipulated for special accounting treatment for interest rate swaps. (ii) Hedging against foreign exchange fluctuation risks The Group applies the deferred hedge accounting method, the fair value hedge accounting method or the allocation method to reduce its exposure to exchange rate fluctuations on the portion of the net unrealized gains or losses on available-for-sale securities exposed to the risks of foreign exchange fluctuations. In order to hedge risk arising from volatility of exchange rates for securities denominated in foreign currencies, the Group applies portfolio hedges, on the conditions that the hedged foreign securities are designated in advance and that sufficient on-balance (actual) or off-balance (forward) liability exposure exists to cover the cost of the hedged foreign securities denominated in the same foreign currencies. In case of the individual hedges, the Group considers its hedges to be highly effective because the Group designates the hedges in such a way that the major conditions of the hedged items and the hedging instruments are almost the same. (16) Accounts to record gains or losses on cancellation and redemption of investment trusts Gains or losses on cancellation and redemption of investment trusts are recorded as “interest and dividends on securities” if the underlying investment assets are bonds and bond equivalent, and as gains or losses on sales of stocks and other securities in “other ordinary income” or “other ordinary expenses” if the underlying investment assets are other than bonds and bond equivalent. However, if the total of “interest and dividends on securities” of investment trusts is a loss, such loss is recorded as losses on redemption of bonds in “other operating expenses.” (17) Scope of cash and cash equivalents on the consolidated statements of cash flows For the purpose of the consolidated statements of cash flows, cash and cash equivalents represent cash and due from banks on the consolidated balance sheets, excluding negotiable certificates of deposit in other banks. - 14 -
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(Significant accounting estimates) Items using accounting estimates reported in the consolidated financial statements for the current fiscal year that may have a significant impact on the items on the consolidated financial statements for the following fiscal year are as follows: Fair value measurement of securities The Group’s balance of securities measured at fair value is material, and it has a significant impact on the consolidated financial statements. Accordingly, the fair value of securities is considered as a significant factor in accounting estimates. (1) Carrying amount in the consolidated financial statements (Millions of yen) As of March 31, 2025 As of March 31, 2026 Securities 143,588,016 145,406,910 (2) Information that facilitates readers’ understanding of the details of the significant accounting estimates used for the identified items (i) Calculation methodology and key assumptions For bonds, the Group uses the Reference Statistical Prices for OTC Bond Transactions published by the Japan Securities Dealers Association, the comparable price method, or the price provided by third parties such as outside vendors and brokers, etc., as the fair value. The Group uses the funds’ unit price for investment trust as the fair value. Key assumptions for the comparable price method, or the price provided by third parties are inputs used for fair value measurement which include directly or indirectly observable inputs in the markets such as yield curves, spreads estimated based on the prices of similar securities, as well as inputs that are unobservable in the markets containing significant estimates. (ii) Impact on the consolidated financial statements for the following fiscal year Fair value of securities may fluctuate due to changes in inputs that are key assumptions, due to factors such as changes in market environment. (Accounting pronouncements issued but not yet adopted) * “Accounting Standard for Leases” (ASBJ Statement No. 34, September 13, 2024) * “Implementation Guidance on Accounting Standards for Leases” (ASBJ Guidance No. 33, September 13, 2024) Others include the relevant amendment to accounting standards, implementation guidance on accounting standards, practical solutions, and transferred guidelines. (1) Overview As with international accounting standards, these standards and guidance require lessees to record all leases as assets and liabilities. (2) Scheduled date of application The implementation of the guidance is scheduled to be applied from the beginning of the fiscal year ending March 31, 2028. (3) Impact from the application of these accounting standards Evaluation of the impact was ongoing at the time when these consolidated financial statements were prepared. - 15 -
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(Additional information) (Transactions for Delivery of the Bank’s Shares, etc. to its Executive Officers through Trusts) The Bank introduced a performance-linked stock compensation system and a non-performance-linked stock compensation system using a trust for the Bank’s Executive Officers. Regarding the accounting treatment of relevant trust agreements, the Bank adopted the “Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts” (Practical Issues Task Force (PITF) No. 30, March 26, 2015). (1) Overview of transactions The Bank grants points to its Executive Officers in accordance with the Stock Benefit Regulations, and delivers the Bank’s shares to Executive Officers who have satisfied the beneficiary requirements as set forth in the Stock Benefit Regulations (hereinafter the “beneficiaries”) in accordance with the number of points granted to the beneficiaries. A certain portion of the Bank’s shares scheduled to be delivered will be converted into cash and the money will be paid by the trust (the management board benefit trust). As for shares which the Bank intends to deliver to its Executive Officers, a trust bank acquires the Bank’s shares from the stock market, including those intended for future deliveries, using money entrusted by the Bank in advance to establish the trust, and such acquired shares are separately managed as trust assets. (2) Residual shares remaining in the trust The Bank recorded the shares remaining in the trust as treasury stock under net assets, at the book value in the trust (excluding incidental expenses). The book value and the number of said shares of treasury stock, as of March 31, 2025 and 2026, were ¥749 million and 716 thousand shares, and ¥1,022 million and 880 thousand shares, respectively. (Transactions for Delivery of the Bank’s Shares to its Management Employees in the Investment Division through Trusts) The Bank introduced an employee stock ownership plan using a trust for the Bank’s management employees in the Investment Division. Regarding the accounting treatment of relevant trust agreements, the Bank adopted the “Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts” (Practical Issues Task Force (PITF) No. 30, March 26, 2015). (1) Overview of transactions The Bank grants points to its management employees in the Investment Division in accordance with the Stock Benefit Regulations, and delivers the Bank’s shares to those who have satisfied the beneficiary requirements as set forth in the Stock Benefit Regulations (hereinafter the “beneficiaries”) in accordance with the number of points granted to the beneficiaries through the trust (the stock benefit trust). As for shares which the Bank intends to deliver to its management employees in the Investment Division, a trust bank acquires the Bank’s shares from the stock market, including those intended for future deliveries, using money entrusted by the Bank in advance to establish the trust, and such acquired shares are separately managed as trust assets. (2) Residual shares remaining in the trust The Bank recorded the shares remaining in the trust as treasury stock under net assets, at the book value in the trust (excluding incidental expenses). The book value and the number of said shares of treasury stock, as of March 31, 2025 and 2026, were ¥375 million and 347 thousand shares, and ¥364 million and 305 thousand shares, respectively. (Notes related to consolidated balance sheets) *1. Stocks and investments in capital of non-consolidated subsidiaries and affiliates (Millions of yen) As of March 31, 2025 As of March 31, 2026 Stocks 2,189 5,602 Investments in capital 7,038 18,076 - 16 -
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*2. Japanese government bonds in “Securities” include unsecured and secured loaned securities for which borrowers have the right to sell or pledge (securities collateralized bond lending/borrowing transactions). The amounts were as follows: (Millions of yen) As of March 31, 2025 As of March 31, 2026 3,222,274 4,398,742 The securities that the Group had the right to sell or (re-)pledge without restrictions among those purchased under resale agreements, etc. were as follows: (Millions of yen) As of March 31, 2025 As of March 31, 2026 Securities neither sold nor pledged as of the end of the fiscal year 2,083,354 4,093,147 *3. Loans under the Banking Act and the Act on Emergency Measures for the Revitalization of the Financial Functions are as follows. Loans include Japanese corporate bonds (limited to those for which redemption of the principal and payment of interest is guaranteed in whole or in part and for which the corporate bonds were issued through private placement of securities (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act)) in “securities,” “loans,” “foreign exchanges,” accrued interest and suspense payments in “other assets,” and items recorded in customers’ liabilities for acceptances and guarantees in the consolidated balance sheets. (Millions of yen) As of March 31, 2025 As of March 31, 2026 Loans to borrowers classified as bankrupt or quasi-bankrupt 0 ― Loans to borrowers classified as doubtful 0 0 Past-due loans for three months or more ― ― Restructured loans ― ― Total 0 0 Loans to borrowers classified as bankrupt or quasi-bankrupt refer to loans to borrowers who have fallen into bankruptcy due to the commencement of bankruptcy proceedings, reorganization proceedings, rehabilitation proceedings, etc., or similar loans. Loans to borrowers classified as doubtful refer to loans for which the borrowers have not yet entered into bankruptcy, but their financial condition and business performance have deteriorated and it is highly probable that the principal cannot be collected and the interest cannot be received in accordance with the contract, and exclude loans to borrowers classified as bankrupt or quasi-bankrupt. Past-due loans for three months or more refer to loans with principal or interest unpaid for three months or more after the day following the due date, excluding loans to borrowers classified as bankrupt or quasi- bankrupt and loans to borrowers classified as doubtful. Restructured loans refer to loans of which terms and conditions have been amended in favor of the borrowers, such as by a reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness, with the objective of restructuring businesses of the borrowers or supporting them, excluding the loans to borrowers classified bankrupt or quasi-bankrupt, loans to borrowers classified as doubtful and past-due loans for three months or more. Amounts of loans shown above are the amounts before the reserve for possible loan losses is deducted. - 17 -
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*4. Assets pledged as collateral and their relevant liabilities were as follows: (Millions of yen) As of March 31, 2025 As of March 31, 2026 Assets pledged as collateral: Securities 33,391,196 29,669,626 Liabilities corresponding to assets pledged as collateral: Deposits 336,328 290,835 Payables under repurchase agreements 26,985,038 22,517,468 Payables under securities lending transactions 2,004,678 2,433,717 Borrowed money 2,510,100 2,819,400 In addition, the settlement accounts of Bank of Japan overdrafts, exchange settlement transactions, or derivative transactions were collateralized, and margins for future transactions, etc. were substituted by the following: (Millions of yen) As of March 31, 2025 As of March 31, 2026 Securities 3,817,805 5,549,551 Loans 202,164 250,000 “Other assets” included initial margins for future transactions, guarantee deposits, cash collateral paid for financial instruments, margins with central counterparty and other margins, etc. The amounts were as follows: (Millions of yen) As of March 31, 2025 As of March 31, 2026 Initial margins for future transactions 47,000 10,000 Guarantee deposits 2,292 2,273 Cash collateral paid for financial instruments 2,205,844 2,391,627 Margins with central counterparty 318,833 211,944 Other margins, etc. 3,882 101,213 *5. Contracts of overdraft facilities and loan commitments are contracts with customers to lend funds up to a certain limit agreed in advance. The Group will make the loans upon the request of an obligor to draw down funds under such loan agreements, unless any terms or conditions stipulated in the relevant loan agreement are violated. The amount of unused commitment balance relating to these loan agreements were as follows: (Millions of yen) As of March 31, 2025 As of March 31, 2026 Unused commitment balance 41,931 35,247 Loans in which the term of the agreement was less than one year 3,968 4,442 (or those in which the unconditional cancellation of the agreement was allowed at any time) In many cases, the term of the agreement runs its course without the loan ever being drawn down. Therefore, the unused amount will not necessarily affect future cash flows of the Group. Conditions are included in certain loan agreements that allow the Group to decline the request for a loan draw-down when there is due cause to do so, such as when there is a change in financial condition or when it is necessary to protect the Group’s - 18 -
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credit. At the inception of contracts, the Group has the obligor pledge collateral to the Group in the form of real estate, securities, etc., if considered to be necessary. Subsequently, the Group reviews the obligor’s financial condition in accordance with the Group’s established internal procedures and takes necessary measures to protect the Group’s credit. *6. Accumulated depreciation of tangible fixed assets (Millions of yen) As of March 31, 2025 As of March 31, 2026 Accumulated depreciation 191,549 204,519 (Notes related to consolidated statements of income) *1. “Other ordinary income” included the following: (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Gains on sales of stocks and other securities 83,207 98,797 Gains on money held in trust 460,912 225,659 Income from investment limited partnerships, etc. 29,818 52,439 *2. “General and administrative expenses” included the following: (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Commissions on bank agency services, etc. paid to JAPAN POST Co., Ltd. 302,872 297,858 Contributions paid to the Organization for Postal Savings, Postal Life Insurance and Post Office Network 246,735 263,079 *3. “Other ordinary expenses” included the following: (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Losses on sales of stocks and other securities 96,703 49,004 - 19 -
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(Notes related to consolidated statements of comprehensive income) *1. Reclassification adjustments and income taxes and tax effect of other comprehensive income (loss) (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Net unrealized gains (losses) on available-for-sale securities: Amount arising during the fiscal year (516,904) 966,422 Reclassification adjustments (873,745) (614,860) Before income taxes and tax effect adjustments (1,390,650) 351,561 Income taxes and tax effect 423,963 (113,588) Net unrealized gains (losses) on available-for-sale securities (966,686) 237,973 Net deferred gains (losses) on hedges: Amount arising during the fiscal year (511,108) (1,169,479) Reclassification adjustments 695,456 673,050 Adjustments of assets’ acquisition costs (624) (351) Before income taxes and tax effect adjustments 183,723 (496,780) Income taxes and tax effect (44,543) 159,456 Net deferred gains (losses) on hedges 139,180 (337,324) Adjustments for retirement benefits: Amount arising during the fiscal year (3,046) 34,561 Reclassification adjustments (1,216) 145 Before income taxes and tax effect adjustments (4,263) 34,707 Income taxes and tax effect 1,328 (10,938) Adjustments for retirement benefits (2,934) 23,769 Total other comprehensive income (loss) (830,441) (75,580) - 20 -
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(Notes related to consolidated statements of changes in net assets) For the fiscal year ended March 31, 2025 1. Type and number of shares issued and treasury stock (Thousand shares) Number of shares at the beginning of the fiscal year Increase Decrease Number of shares at the end of the fiscal year Notes Shares issued Common stock 3,617,602 ― 13,266 3,604,335 (*) Treasury stock Common stock 1,449 16,546 13,617 4,378 (**) (***) (****) (*****) * The decrease of 13,266 thousand shares of common stock issued represents a decrease of 13,266 thousand shares due to the cancellation of treasury stock. ** The number of shares of treasury stock at the beginning of the fiscal year and that at the end of the fiscal year included 1,379 thousand shares and 1,064 thousand shares of treasury stock held by the stock benefit trust. *** The breakdown of the increase of 16,546 thousand shares of treasury stock is as follows. Repurchase of treasury stock: 16,511 thousand shares Purchase by the stock benefit trust: 35 thousand shares Purchase of shares less than one unit: 0 thousand shares **** The breakdown of the decrease of 13,617 thousand shares of treasury stock is as follows. Cancellation of treasury stock: 13,266 thousand shares Grant and sale of treasury stock by the stock benefit trust: 350 thousand shares Sale of treasury stock in response to requests to purchase additional shares less than one unit: 0 thousand shares ***** At the Board of Directors meeting held on February 27, 2025, the Bank passed a resolution on matters related to the repurchase of treasury stock pursuant to Article 39, Paragraph 1 of the Bank’s Articles of Incorporation complying with Article 459, Paragraph 1, Item 1 of the Companies Act. In addition, the Bank passed a resolution on matters related to the cancellation of treasury stock pursuant to the provisions of Article 178 of the Companies Act. Of the shares of treasury stock repurchased but not completely cancelled as of the end of the fiscal year are as follows. Book value: ¥5,154 million Class of shares: Common stock Number of shares: 3,244 thousand shares The above shares and the shares of treasury stock repurchased from April 1, 2025 to May 14, 2025 were completely cancelled as of May 30, 2025. Total number of shares cancelled: 28,456 thousand shares 2. Dividends (1) Dividends distributed during the fiscal year Resolution Type Cash dividends (Millions of yen) Cash dividends per share (Yen) Record date Effective date May 15, 2024 at the meeting of the Board of Directors Common stock 184,494 51.00 March 31, 2024 June 19, 2024 Note: The total amount of dividends resolved by the Board of Directors’ meeting held on May 15, 2024 included dividends of ¥70 million for the Bank’s shares held by the stock benefit trust. (2) Dividends with the record date within the fiscal year and with the effective date coming after the end of the fiscal year Resolution Type Cash dividends (Millions of yen) Resource of dividends Cash dividends per share (Yen) Record date Effective date May 15, 2025 at the meeting of the Board of Directors Common stock 208,859 Retained earnings 58.00 March 31, 2025 June 25, 2025 Note: The total amount of dividends resolved by the Board of Directors’ meeting held on May 15, 2025 included dividends of ¥61 million for the Bank’s shares held by the stock benefit trust. - 21 -
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For the fiscal year ended March 31, 2026 1. Type and number of shares issued and treasury stock (Thousand shares) Number of shares at the beginning of the fiscal year Increase Decrease Number of shares at the end of the fiscal year Notes Shares issued Common stock 3,604,335 ― 28,456 3,575,878 (*) Treasury stock Common stock 4,378 38,230 28,677 13,932 (**) (***) (****) * The decrease of 28,456 thousand shares of common stock issued represents a decrease of 28,456 thousand shares due to the cancellation of treasury stock. ** The number of shares of treasury stock at the beginning of the fiscal year and that at the end of the fiscal year included 1,064 thousand shares and 1,186 thousand shares of treasury stock held by the stock benefit trust. *** The breakdown of the increase of 38,230 thousand shares of treasury stock is as follows. Repurchase of treasury stock: 37,887 thousand shares Purchase by the stock benefit trust: 342 thousand shares Purchase of shares less than one unit: 0 thousand shares **** The breakdown of the decrease of 28,677 thousand shares of treasury stock is as follows. Cancellation of treasury stock: 28,456 thousand shares Grant and sale of treasury stock by the stock benefit trust: 220 thousand shares Sale of treasury stock in response to requests to purchase additional shares less than one unit: 0 thousand shares 2. Dividends (1) Dividends distributed during the fiscal year Resolution Type Cash dividends (Millions of yen) Cash dividends per share (Yen) Record date Effective date May 15, 2025 at the meeting of the Board of Directors Common stock 208,859 58.00 March 31, 2025 June 25, 2025 Note: The total amount of dividends resolved by the Board of Directors’ meeting held on May 15, 2025 included dividends of ¥61 million for the Bank’s shares held by the stock benefit trust. (2) Dividends with the record date within the fiscal year and with the effective date coming after the end of the fiscal year Resolution Type Cash dividends (Millions of yen) Resource of dividends Cash dividends per share (Yen) Record date Effective date May 15, 2026 at the meeting of the Board of Directors Common stock 263,671 Retained earnings 74.00 March 31, 2026 June 24, 2026 Note: The total amount of dividends resolved by the Board of Directors’ meeting held on May 15, 2026 included dividends of ¥87 million for the Bank’s shares held by the stock benefit trust. - 22 -
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(Notes related to consolidated statements of cash flows) *1. The reconciliation between cash and cash equivalents in the consolidated statements of cash flows and cash and due from banks in the consolidated balance sheets as of March 31, 2025 and 2026 (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Cash and due from banks 64,639,102 54,349,817 Due from banks, –negotiable certificates of deposit in other banks ― (10,000) Cash and cash equivalents 64,639,102 54,339,817 2. Details of significant non-cash transactions (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Cancellation of treasury stock 19,971 40,006 (Leases) Operating lease transactions: Future lease payments on non-cancelable operating leases (Lessees) (Millions of yen) As of March 31, 2025 As of March 31, 2026 Due within one year 922 700 Due over one year 2,685 2,280 Total 3,608 2,980 (Lessors) (Millions of yen) As of March 31, 2025 As of March 31, 2026 Due within one year 92 100 Due over one year ― 344 Total 92 444 - 23 -
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(Financial instruments) 1. Notes related to the conditions of financial instruments (1) Policy for handling financial instruments The Group’s operations comprise deposit-taking up to designated limits, syndicated loans and other lending, securities investment, domestic and foreign exchange, retail sales of Japanese government bonds, investment trusts, and insurance products, intermediary services including mortgages, and credit card operations. The Group raises funds primarily through deposits from individuals, and subsequently manages those funds by investing in securities including Japanese bonds and foreign bonds as well as by making loans. Most of these financial assets and liabilities are subject to price fluctuations associated with market movements and other risks, making it necessary to manage them so that future interest rate and foreign exchange rate movements do not have a negative impact on the Group including affecting the stability of its earnings. The Group therefore strives to appropriately manage its earnings and risks using integrated asset- liability management (ALM), and as part of this, engages in derivative transactions including interest rate swaps, currency swaps and others. Since its incorporation in October 2007, the Group has diversified its earnings sources through investment diversification and consequently the outstanding amount of financial assets with credit risk has steadily grown. However, these investments are made with careful regard to the securities in which the Group invests and the amount invested so that the occurrence of a credit risk event or other factors will not result in excessive losses. (2) Details of financial instruments and associated risks The financial assets held by the Group are securities including Japanese bonds and foreign bonds. These financial assets contain credit risk with regard to the issuer and risks associated with interest rate fluctuations, market price movements, and other factors. Financial assets also include loans and stock investments via money held in trust, but the amounts of these investments are less than those of bonds and other securities. From the viewpoints of the Group’s ALM, the Group utilizes interest rate swaps and others as hedging instruments for interest rate-related transactions to avoid the risks of changes in future economic values and interest rates (cash flows) of securities, loans, and time deposits on fluctuations of the yen interest rate. For currency-related transactions, the Group utilizes currency swaps and others as hedging instruments to avoid the risk of foreign exchange fluctuations in connection with the translation of foreign currency-denominated securities held by the Group and related yen translation amounts of redemption of principal and interest. Derivative transactions which meet certain requirements are accounted for by the hedge accounting method to control the effect on financial accounting within a fixed range when utilizing derivatives for hedging purposes. The hedging instruments, the hedged items, the hedging policy, and the way to evaluate the effectiveness of hedges are included in the section “Significant accounting policies for preparing of consolidated financial statements 4. Accounting policies (15) Hedge accounting.” (3) Risk management structure for financial instruments (i) Basic policy The Executive Committee has established special advisory committees, the Risk Management Committee and the ALM Committee, to handle risk management responsibilities. These advisory committees submit risk management reports based on the nature of each risk and discuss risk management policies and measures. (ii) Credit risk The Group manages credit risk using Value at Risk (VaR: a statistical method that identifies the maximum loss possible based on designated probabilities in the financial assets and liabilities held) based on internal guidelines to quantitatively measure the amount of credit risk. The Group sets appropriate risk limits to reflect risk capital allocations and then ensures the amounts of credit risk do not exceed its limits based on - 24 -
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its financial strength, which is driven by a number of factors including capital. In order to control credit concentration, the Group has set upper limits of exposure for individual companies, corporate groups, countries and regions to monitor and manage such risk. The Risk Management Department oversees credit risk management activities including credit risk measurement, management of credit concentration risk and the Group’s internal credit rating system. The Credit Department assigns internal credit ratings, monitors borrower status, watches large borrowers, and judges individual loans. The Risk Management Committee, the ALM Committee, and the Executive Committee regularly hold meetings to discuss matters related to the maintenance and management of the credit risk management structure, and matters related to the implementation of credit risk management. (iii) Market risk As per the Group’s ALM policy, the Group makes investments in instruments including Japanese and foreign bonds and equities as part of its banking operations, and these investments may therefore be affected by interest rate, exchange rate, stock price and other fluctuations. However, based on internal guidelines regarding market risk management, the Group measures the amount of market risk using the VaR statistical method. The Group sets appropriate risk limits to reflect risk capital allocations and then ensures the amounts of market risk do not exceed its limits based on its financial strength, which is driven by a number of factors including capital. The main financial instruments held by the Group or transactions undertaken by the Group that are affected by changes in variable components of major market risk (interest rates, currency exchange rates, stock prices) are call loans, monetary claims bought, money held in trust, securities, loans, deposits and derivative transactions. The Group measures and manages market risk using the VaR method. For its market risk measurement model, the Group uses a historical simulation method (holding period of 240 business days (one year); confidence interval of 99%; and observation period of 1,200 business days (five years)). For liability measurement, the Group uses its own internal model. As of March 31, 2025, the Group calculated the amounts of its market risk exposure (estimated potential losses from such risk) at ¥3,557,257 million. As of March 31, 2026, the Group calculated the amounts of its market risk exposure (estimated potential losses from such risk) at ¥2,965,155 million. VaR provides the major market risk exposure which is statistically calculated under certain probability based on historical market fluctuations. Thus, it may not capture fully the risk stemming from extraordinary changes in the market environment that are normally considered improbable. To complement such risks, the Group conducts stress testing using a variety of scenarios. The Risk Management Committee, the ALM Committee, and the Executive Committee regularly hold meetings to discuss matters related to the maintenance and management of the market risk management structure, and matters related to the implementation of market risk management. In addition, the Group has a distinctive asset and liability structure, with marketable securities accounting for the majority of its assets and deposits for the majority of its liabilities. Recognizing the importance of the impact of interest rate risk on the Group’s profit structure, the Group closely monitors and carefully controls interest rate risk by performing earnings simulations based on various market scenarios as part of its ALM. Policy with regard to its ALM is discussed and determined at meetings of the Executive Committee, and the status of its implementation is reported to the ALM Committee and the Executive Committee. The Group manages market risk that arises from derivative transactions by separating the responsibilities of executing transactions, evaluating the effectiveness of hedges and operational management, and by establishing an internal control structure, based on internal guidelines related to derivatives. - 25 -
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(iv) Funding liquidity risk The Group’s funding liquidity risk management consists primarily of closely monitoring funding conditions and taking timely and appropriate actions. It then maintains appropriate liquidity reserves for unexpected fund outflows. Through these steps, the Group sets, monitors, and analyzes its funding liquidity indicators to ensure stable liquidity management. The Risk Management Committee, the ALM Committee, and the Executive Committee regularly hold meetings to discuss matters related to the maintenance and management of the funding liquidity risk management structure and matters related to the implementation of funding liquidity risk management. (4) Supplementary explanation of items related to the fair value of financial instruments The Group determines the fair value of financial instruments based on various assumptions, and the value may be changed if different assumptions and other factors are applied. - 26 -
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2. Notes related to the fair value of financial instruments The amounts in the consolidated balance sheets, the fair values, and the differences between the two were as follows. Notes on cash and due from banks, call loans, receivables under resale agreements, payables under repurchase agreements, and payables under securities lending transactions are omitted as their fair values are approximately the same as their book values due to the short settlement period. As of March 31, 2025 (Millions of yen) Amount on the consolidated balance sheet Fair value Difference (1) Monetary claims bought 593,739 593,739 ― (2) Trading account securities: Securities classified as trading purposes 224 224 ― (3) Money held in trust (*) 2,101,358 2,101,358 ― (4) Securities: Held-to-maturity securities 45,169,875 42,333,134 (2,836,741) Available-for-sale securities (*) 98,230,288 98,230,288 ― (5) Loans: 3,130,595 Reserve for possible loan losses (**) (152) 3,130,443 3,015,926 (114,516) Total assets 149,225,928 146,274,671 (2,951,257) (1) Deposits 190,461,748 189,985,446 (476,301) (2) Borrowed money 2,510,100 2,502,732 (7,367) Total liabilities 192,971,848 192,488,179 (483,669) Derivative transactions (***): For which hedge accounting is not applied (62,683) (62,683) ― For which hedge accounting is applied (1,744,563) (1,744,563) ― Total derivative transactions (1,807,247) (1,807,247) ― * Investment trusts for which the funds’ unit prices are deemed as the fair value in accordance with Paragraphs 24-3 and 24-9 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021) are included. ** Reserve for possible loan losses is the general reserve for possible loan losses and the specific reserve for possible loan losses corresponding to loans. *** Figures are total derivative instruments recorded in other assets or other liabilities. The net amount is shown for net claims and obligations arising from derivative transactions, with totals that are net obligations shown in parentheses. Derivatives under the allocation method, such as foreign exchange forward contracts, are treated as being an inseparable part of the securities being hedged, and their fair value is therefore included in that of the corresponding securities. - 27 -
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As of March 31, 2026 (Millions of yen) Amount on the consolidated balance sheet Fair value Difference (1) Monetary claims bought 517,916 517,916 ― (2) Trading account securities: Securities classified as trading purposes 214 214 ― (3) Money held in trust (*) 2,288,715 2,288,715 ― (4) Securities: Held-to-maturity securities 52,680,226 47,384,570 (5,295,656) Available-for-sale securities (*) 92,495,492 92,495,492 ― (5) Loans: 4,372,193 Reserve for possible loan losses (**) (208) 4,371,984 4,213,152 (158,831) Total assets 152,354,550 146,900,062 (5,454,487) (1) Deposits 186,108,700 185,652,028 (456,672) (2) Borrowed money 2,819,400 2,814,606 (4,793) Total liabilities 188,928,100 188,466,634 (461,465) Derivative transactions (***): For which hedge accounting is not applied (144,999) (144,999) ― For which hedge accounting is applied (2,258,125) (2,258,125) ― Total derivative transactions (2,403,124) (2,403,124) ― * Investment trusts for which the funds’ unit prices are deemed as the fair value in accordance with Paragraphs 24-3 and 24-9 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021) are included. ** Reserve for possible loan losses is the general reserve for possible loan losses and the specific reserve for possible loan losses corresponding to loans. *** Figures are total derivative instruments recorded in other assets or other liabilities. The net amount is shown for net claims and obligations arising from derivative transactions, with totals that are net obligations shown in parentheses. Derivatives under special accounting treatment for interest rate swaps or under the allocation method, such as foreign exchange forward contracts, are treated as being an inseparable part of the securities being hedged, and their fair value is therefore included in that of the corresponding securities. - 28 -
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(Note 1) The amounts in the consolidated balance sheets of shares, etc. that do not have a market price and investments in partnerships were as follows. The fair value information of these financial instruments is not included in “Assets (3) Money held in trust” and “Assets (4) Securities.” As of March 31, 2025 (Millions of yen) Type Amount on the consolidated balance sheet Money held in trust (*)(**) 3,620,615 Securities Unlisted stocks, etc. (*) 39,827 Investments in partnerships (**) 148,025 Total (***) 3,808,468 * Unlisted stocks, etc. are not included in the scope of fair value disclosures in accordance with Paragraph 5 of the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020). ** Investments in partnerships are not included in the scope of fair value disclosures in accordance with Paragraph 24-16 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021). *** An impairment loss of ¥550 million was recognized in the fiscal year ended March 31, 2025. As of March 31, 2026 (Millions of yen) Type Amount on the consolidated balance sheet Money held in trust (*)(**) 3,934,115 Securities Unlisted stocks, etc. (*) 50,697 Investments in partnerships (**) 180,492 Total (***) 4,165,305 * Unlisted stocks, etc. are not included in the scope of fair value disclosures in accordance with Paragraph 5 of the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020). ** Investments in partnerships are not included in the scope of fair value disclosures in accordance with Paragraph 24-16 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021). *** An impairment loss of ¥162 million was recognized in the fiscal year ended March 31, 2026. - 29 -
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(Note 2) Scheduled redemption amounts of monetary claims and securities with a maturity date subsequent to the fiscal year As of March 31, 2025 (Millions of yen) One Year or Less > One and ≤ Three Years > Three and ≤ Five Years > Five and ≤ Seven Years > Seven and ≤ Ten Years Over Ten Years Monetary claims bought 1,022 26,155 52,385 59,669 208,925 256,964 Securities: 10,550,557 15,835,802 13,600,967 7,106,640 18,420,367 29,300,171 Held-to-maturity securities 2,492,975 6,234,120 5,372,730 2,491,678 13,666,352 15,312,233 Japanese government bonds 600,000 60,900 846,900 ― 11,231,600 12,682,600 Japanese local government bonds 550,838 1,396,076 1,165,212 1,010,252 647,715 ― Japanese corporate bonds 667,038 2,012,804 1,668,560 635,784 633,460 1,038,167 Other securities 675,099 2,764,339 1,692,057 845,641 1,153,576 1,591,466 Available-for-sale securities (with maturity date) 8,057,581 9,601,682 8,228,236 4,614,961 4,754,014 13,987,937 Japanese government bonds 4,422,937 694,857 899,909 1,216,894 931,884 8,639,400 Japanese local government bonds 256,891 507,318 80,396 ― ― ― Short-term corporate bonds 679,000 ― ― ― ― ― Japanese corporate bonds 669,716 823,850 337,521 445,500 104,659 543,282 Other securities 2,029,037 7,575,656 6,910,410 2,952,567 3,717,470 4,805,254 Loans (*) 893,678 652,460 655,198 413,523 248,383 264,341 Total 11,445,258 16,514,419 14,308,551 7,579,832 18,877,676 29,821,477 * Loans do not include ¥0 million in loans, etc. to bankrupt, substantially bankrupt and doubtful borrowers, for which redemption cannot be expected. - 30 -
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As of March 31, 2026 (Millions of yen) One Year or Less > One and ≤ Three Years > Three and ≤ Five Years > Five and ≤ Seven Years > Seven and ≤ Ten Years Over Ten Years Monetary claims bought 1,039 17,744 18,438 102,052 149,111 252,912 Securities: 9,116,139 16,805,184 11,673,560 5,959,479 25,124,340 30,441,656 Held-to-maturity securities 3,062,627 6,840,057 4,922,306 2,546,642 19,630,471 16,351,535 Japanese government bonds 60,900 771,900 96,700 190,000 17,061,600 13,272,800 Japanese local government bonds 721,262 1,277,318 1,398,288 796,573 870,202 ― Japanese corporate bonds 941,029 2,134,852 1,455,681 545,870 800,620 1,272,177 Other securities 1,339,436 2,655,986 1,971,637 1,014,199 898,048 1,806,558 Available-for-sale securities (with maturity date) 6,053,511 9,965,127 6,751,254 3,412,837 5,493,869 14,090,120 Japanese government bonds 376,436 679,261 1,538,964 561,707 1,330,801 8,449,200 Japanese local government bonds 226,970 293,211 28,490 ― ― ― Short-term corporate bonds 824,000 ― ― ― ― ― Japanese corporate bonds 478,650 531,121 441,700 227,307 47,700 501,047 Other securities 4,147,454 8,461,533 4,742,099 2,623,822 4,115,367 5,139,873 Loans (*) 2,234,813 707,754 647,987 373,544 177,130 228,414 Total 11,351,991 17,530,683 12,339,987 6,435,077 25,450,582 30,922,983 * Loans do not include ¥0 million in loans, etc. to bankrupt, substantially bankrupt and doubtful borrowers, for which redemption cannot be expected. - 31 -
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(Note 3) Scheduled repayment amounts of interest-bearing liabilities subsequent to the fiscal year As of March 31, 2025 (Millions of yen) One Year or Less > One and ≤ Three Years > Three and ≤ Five Years > Five and ≤ Seven Years > Seven and ≤ Ten Years Over Ten Years Deposits (*) 136,247,090 14,308,382 15,671,940 9,137,404 15,096,931 ― Borrowed money 1,216,500 1,272,500 21,100 ― ― ― Total 137,463,590 15,580,882 15,693,040 9,137,404 15,096,931 ― * Demand deposits are included in “One Year or Less.” As of March 31, 2026 (Millions of yen) One Year or Less > One and ≤ Three Years > Three and ≤ Five Years > Five and ≤ Seven Years > Seven and ≤ Ten Years Over Ten Years Deposits (*) 135,598,784 12,983,176 11,020,790 4,556,309 21,949,639 ― Borrowed money 1,525,800 1,293,600 ― ― ― ― Total 137,124,584 14,276,776 11,020,790 4,556,309 21,949,639 ― * Demand deposits are included in “One Year or Less.” 3. Fair value information by level within the fair value hierarchy The financial instruments are classified into the following three levels of fair value hierarchy according to the observability and materiality of inputs used to measure fair value. Level 1 fair value: Fair value measured using observable inputs, i.e. quoted prices in active markets for assets or liabilities that are the subject of the measurement. Level 2 fair value: Fair value measured using observable inputs other than Level 1 inputs. Level 3 fair value: Fair value measured using unobservable inputs. If multiple inputs are used that are significant to the fair value measurement, the financial instruments are categorized in their entirety in the level of the lowest level input that is significant to the entire measurement. - 32 -
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(1) Financial instruments booked at fair value on the consolidated balance sheets As of March 31, 2025 (Millions of yen) Fair value Level 1 Level 2 Level 3 Total Monetary claims bought ― ― 593,739 593,739 Money held in trust (*) 1,808,231 ― ― 1,808,231 Trading account securities and securities: Securities classified as trading purposes Japanese government bonds 224 ― ― 224 Available-for-sale securities Japanese stocks 8,616 ― ― 8,616 Japanese government bonds 15,182,054 123,211 ― 15,305,265 Japanese local government bonds ― 835,418 ― 835,418 Short-term corporate bonds ― 678,731 ― 678,731 Japanese corporate bonds ― 2,836,196 ― 2,836,196 Others 12,230,567 58,487,137 95,822 70,813,527 Foreign bonds 12,230,567 6,777,962 95,315 19,103,844 Investment trusts (*) ― 51,709,175 ― 51,709,175 Total assets 29,229,693 62,960,695 689,561 92,879,950 Derivative transactions (**): Interest rate-related derivatives ― 50,135 ― 50,135 Currency-related derivatives ― (1,857,382) ― (1,857,382) Total derivative transactions ― (1,807,247) ― (1,807,247) * Investment trusts for which the funds’ unit prices are deemed as the fair value in accordance with Paragraphs 24-3 and 24-9 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021) are not included. Investment trusts to which the treatment in Paragraph 24-3 is applied amounted to ¥7,752,533 million in the consolidated balance sheets. Investment trusts to which the treatment in Paragraph 24-9 is applied amounted to ¥182,583 million in the consolidated balance sheets. ** Figures are total derivative instruments recorded in other assets or other liabilities. The net amount is shown for net claims and obligations arising from derivative transactions, with totals that are net obligations shown in parentheses. - 33 -
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As of March 31, 2026 (Millions of yen) Fair value Level 1 Level 2 Level 3 Total Monetary claims bought ― ― 517,916 517,916 Money held in trust (*) 1,940,140 ― ― 1,940,140 Trading account securities and securities: Securities classified as trading purposes Japanese government bonds 214 ― ― 214 Available-for-sale securities Japanese stocks 44,511 ― ― 44,511 Japanese government bonds 10,452,128 133,884 ― 10,586,012 Japanese local government bonds ― 541,180 ― 541,180 Short-term corporate bonds ― 823,599 ― 823,599 Japanese corporate bonds ― 2,091,294 ― 2,091,294 Others 12,353,024 57,116,566 88,865 69,558,457 Foreign bonds 12,343,308 6,901,394 88,358 19,333,062 Investment trusts (*) 9,716 50,215,171 ― 50,224,888 Total assets 24,790,019 60,706,525 606,782 86,103,326 Derivative transactions (**): Interest rate-related derivatives ― 169,513 ― 169,513 Currency-related derivatives ― (2,572,638) ― (2,572,638) Total derivative transactions ― (2,403,124) ― (2,403,124) * Investment trusts for which the funds’ unit prices are deemed as the fair value in accordance with Paragraphs 24-3 and 24-9 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021) are not included. Investment trusts to which the treatment in Paragraph 24-3 is applied amounted to ¥8,850,437 million in the consolidated balance sheets. Investment trusts to which the treatment in Paragraph 24-9 is applied amounted to ¥192,285 million in the consolidated balance sheets. ** Figures are total derivative instruments recorded in other assets or other liabilities. The net amount is shown for net claims and obligations arising from derivative transactions, with totals that are net obligations shown in parentheses. - 34 -
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(2) Financial instruments other than those booked at fair value on the consolidated balance sheets As of March 31, 2025 (Millions of yen) Fair value Level 1 Level 2 Level 3 Total Money held in trust ― 110,543 ― 110,543 Securities: Held-to-maturity securities Japanese government bonds 22,766,025 ― ― 22,766,025 Japanese local government bonds ― 4,620,049 ― 4,620,049 Japanese corporate bonds ― 6,408,433 ― 6,408,433 Others 3,590,691 4,947,934 ― 8,538,625 Loans ― ― 3,015,926 3,015,926 Total assets 26,356,716 16,086,961 3,015,926 45,459,605 Deposits ― 189,985,446 ― 189,985,446 Borrowed money ― 2,502,732 ― 2,502,732 Total liabilities ― 192,488,179 ― 192,488,179 As of March 31, 2026 (Millions of yen) Fair value Level 1 Level 2 Level 3 Total Money held in trust ― 156,289 ― 156,289 Securities: Held-to-maturity securities Japanese government bonds 26,537,289 ― ― 26,537,289 Japanese local government bonds ― 4,811,313 ― 4,811,313 Japanese corporate bonds ― 6,669,605 ― 6,669,605 Others 3,496,120 5,870,241 ― 9,366,362 Loans ― ― 4,213,152 4,213,152 Total assets 30,033,410 17,507,449 4,213,152 51,754,012 Deposits ― 185,652,028 ― 185,652,028 Borrowed money ― 2,814,606 ― 2,814,606 Total liabilities ― 188,466,634 ― 188,466,634 (Note 1) Explanation of the valuation techniques and inputs used in the fair value measurements Assets Monetary claims bought The Group uses the price provided by third parties such as brokers, etc. as the fair value, and classifies the monetary claims bought as Level 3 fair value. Money held in trust For the securities representing trust assets in money held in trust, the Group uses the price at the exchange market for stocks and investment trusts that have a quoted market price and uses the Reference Statistical Prices for OTC Bond Transactions published by the Japan Securities Dealers Association for bonds as the fair value. As a result, the trust assets in money held in trust are principally classified as Level 1 fair value. For investment trusts that do not have quoted market prices, in case there are significant restrictions that market participants would require compensation for risk with respect to cancellation or repurchase request, the Group adopts the accounting treatment that funds’ unit prices are deemed as the fair value in accordance with Paragraph 24-9 of the “Implementation - 35 -
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Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021) but does not classify the fair value into any level of fair value hierarchy. Notes pertaining to money held in trust by holding purpose are included in the section “Money held in trust.” Trading account securities The Group uses the purchase price provided by the Bank of Japan as the fair value and classifies the trading account securities as Level 1 fair value as unadjusted quoted prices in active markets are available. Securities For stocks and investment trusts that have a quoted market price, since price on the stock exchange is quoted as fair value of stocks where unadjusted market price in active market is available, fair value of stocks is classified as Level 1 fair value. For bonds, the Group uses the Reference Statistical Prices for OTC Bond Transactions published by the Japan Securities Dealers Association, the comparable price method, or the price provided by third parties such as outside vendors and brokers, etc., as the fair value. Of bonds that use the Reference Statistical Prices for OTC Bond Transactions published by the Japan Securities Dealers Association and the comparable price method as the fair value, Japanese government bonds and treasury discount bills are principally classified as Level 1 fair value, while bonds other than those are classified as Level 2 fair value. Bonds that use the price provided by third parties such as outside vendors and brokers, etc. as the fair value are classified as either of Level 1, 2 or 3, based on observability of the prices obtained and inputs, etc. in the market. For bonds subject to special accounting treatment for interest rate swaps or the allocation method, such as foreign exchange forward contracts, etc., the fair value of such interest rate swaps or foreign exchange forward contracts, etc. is reflected. For investment trusts that do not have quoted market prices, in case there are no significant restrictions that market participants would require compensation for risk with respect to cancellation or repurchase request, the Group uses the funds’ unit prices as the fair value and classifies it as Level 2 fair value. In case there are significant restrictions, the Group adopts the accounting treatment that funds’ unit prices are deemed as the fair value in accordance with Paragraph 24-3 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021) but does not classify the fair value into any level of fair value hierarchy. Notes pertaining to securities by holding purpose are included in the section “Securities.” Loans Loans with floating interest rates reflect market interest rates within the short term. When a borrower’s credit standing does not change significantly after the loan was originated, the fair value is approximately the same as the book value, and therefore the Group uses the book value as the fair value. The fair value of fixed-rate loans is stated at the present value of each loan, which is calculated by discounting the total principal and interest amounts at the interest rate that reflects the remaining tenor and credit risk of the borrower. As a result, fixed-rate loans are classified as Level 3 fair value. For loans that are limited to within a designated percentage of the amount of pledged assets, such as loans secured by deposit, the fair value is approximately the same as the book value based on the repayment period, interest rate conditions, etc., and therefore the Group uses the book value as the fair value. As a result, such loans are classified as Level 3 fair value. Liabilities Deposits For demand deposits including transfer deposits and ordinary deposits, the Group uses the amount that might be paid on demand on the consolidated balance sheet date (the book value) as the fair value and classifies demand deposits as Level 2 fair value. For fixed-term deposits, the Group categorizes the deposits by specified tenors and calculates the present value by discounting the projected future cash flow, which is used as their fair value. As a result, fixed-term deposits are classified as Level 2 fair value. For TEIGAKU deposits, the Group categorizes the deposits by specified tenors and calculates the present value by discounting the projected future cash flow, reflecting an early cancellation rate calculated using historical results, which is used as their fair value. When unobservable inputs are not significant to the fair value measurement, these TEIGAKU deposits are classified as Level 2 fair value. When significant unobservable inputs are used for measurement, the TEIGAKU deposits are classified as Level 3 fair value. The Group uses the interest rates on newly accepted deposits as the discount rates applied to fixed-term deposits and TEIGAKU deposits. - 36 -
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Borrowed money The fair value of borrowed money is stated at its present value, which is calculated by discounting the projected future cash flow, using the refinancing rate applicable to a similar loan. The fair value of borrowed money of which the remaining tenor is short (due within one year) is approximately the same as the book value, and therefore the Group uses the book value as the fair value and classifies borrowed money as Level 2 fair value. Derivative transactions The derivative instruments are classified as Level 1 fair value when unadjusted quoted prices in active markets are available for the measurement. However, since most of the derivative instruments are traded over the counter and there are no quoted market prices, the Group measures their fair value using valuation techniques including the discounted cash flow method according to their transaction type and maturity period. Major inputs used for these measurement methods are interest rates and exchange rates. Measurement reflects price adjustments, as necessary, based on counterparty credit risk and the Bank’s own credit risk. When unobservable inputs are not used or their impact is insignificant, such derivative instruments, e.g. plain vanilla interest rate swap transactions, foreign exchange forward contracts, etc., are classified as Level 2 fair value. When significant unobservable inputs are used for measurement, these derivative instruments are classified as Level 3 fair value. (Note 2) Information about Level 3 fair value of financial instruments that are recorded on the consolidated balance sheets at their fair value (1) Quantitative information on significant unobservable inputs As of March 31, 2025 As the Bank does not conduct estimation of inputs it cannot observe itself, the quantitative information is not provided. As of March 31, 2026 As the Bank does not conduct estimation of inputs it cannot observe itself, the quantitative information is not provided. (2) Reconciliation from the beginning balance to the ending balance and unrealized gains or losses recognized in profit or loss for the fiscal year As of March 31, 2025 (Millions of yen) Beginning Balance Profit or loss or other comprehensive income for the fiscal year ended March 31, 2025 Net amount of purchase, sale, issuance and settlement Transfer into Level 3 fair value Transfer out of Level 3 fair value Ending balance Unrealized gains or losses of financial assets and financial liabilities held at the end of the period included in profit or loss for the fiscal year ended March 31, 2025 (*) Recognized in profit or loss (*) Recognized in other comprehen- sive income (**) Monetary claims bought 515,606 (6) (6,127) 84,266 ― ― 593,739 ― Securities Available- for-sale securities Others 106,945 (662) (1,856) (8,604) ― ― 95,822 (1,664) * Principally included in “other operating income” in the consolidated statements of income. - 37 -
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** Included in “net unrealized gains (losses) on available-for-sale securities” under “other comprehensive income (loss)” in the consolidated statements of comprehensive income. As of March 31, 2026 (Millions of yen) Beginning Balance Profit or loss or other comprehensive income for the fiscal year ended March 31, 2026 Net amount of purchase, sale, issuance and settlement Transfer into Level 3 fair value Transfer out of Level 3 fair value Ending balance Unrealized gains or losses of financial assets and financial liabilities held at the end of the period included in profit or loss for the fiscal year ended March 31, 2026 (*) Recognized in profit or loss (*) Recognized in other comprehen- sive income (**) Monetary claims bought 593,739 90 (10,962) (64,950) ― ― 517,916 ― Securities Available- for-sale securities Others 95,822 641 (1,238) (6,359) ― ― 88,865 ― * Principally included in “other operating income” in the consolidated statements of income. ** Included in “net unrealized gains (losses) on available-for-sale securities” under “other comprehensive income (loss)” in the consolidated statements of comprehensive income. (3) Explanation of valuation processes used for fair value measurements The fair value verification department has established policies and procedures for measuring fair value, and each fair value measurement department measures fair value accordingly. The fair value verification department that is independent from the fair value measurement departments verifies whether the fair value obtained is measured using valid valuation techniques and inputs, and based on the verification results, financial instruments are classified into an appropriate level of the fair value hierarchy. The results of the verification are reported to the ALM Committee to ensure that the policies and procedures for measuring fair value are appropriate. In measuring fair value, the Group uses a valuation model that most appropriately reflects the nature, characteristics and risks of each financial instrument. In addition, when using quoted prices obtained from third parties, the Group verifies whether the prices are valid using appropriate methods, such as confirming the valuation techniques and inputs used and comparing them with the fair value of similar financial instruments. (4) Explanation of an impact on fair value in the case of changing significant unobservable inputs As the Bank does not conduct estimation of inputs it cannot observe itself, the explanation is not provided. - 38 -
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(Note 3) Information about investment trusts for which the funds’ unit prices are deemed as the fair value in accordance with Paragraphs 24-3 and 24-9 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021) (1) Reconciliation from the beginning balance to the ending balance for the fiscal year of the investment trusts to which the treatment in Paragraph 24-3 is applied As of March 31, 2025 (Millions of yen) Beginning Balance Profit or loss or other comprehensive income for the fiscal year ended March 31, 2025 Net amount of purchase, sale, and redemption Amount by which the funds’ unit price has become regarded as the fair value of investment trusts Amount for which the treatment provided for in Paragraph 24-3 has ceased to be applied Ending balance Unrealized gains or losses of investment trusts held at the end of the period included in profit or loss for the fiscal year ended March 31, 2025 Recognized in profit or loss (*) Recognized in other comprehen- sive income (**) 6,923,184 82,647 (64,449) 811,150 ― ― 7,752,533 ― * Principally included in “other ordinary income” in the consolidated statements of income. ** Included in “net unrealized gains (losses) on available-for-sale securities” under “other comprehensive income (loss)” in the consolidated statements of comprehensive income. As of March 31, 2026 (Millions of yen) Beginning Balance Profit or loss or other comprehensive income for the fiscal year ended March 31, 2026 Net amount of purchase, sale, and redemption Amount by which the funds’ unit price has become regarded as the fair value of investment trusts Amount for which the treatment provided for in Paragraph 24-3 has ceased to be applied Ending balance Unrealized gains or losses of investment trusts held at the end of the period included in profit or loss for the fiscal year ended March 31, 2026 Recognized in profit or loss (*) Recognized in other comprehen- sive income (**) 7,752,533 96,810 339,437 661,657 ― ― 8,850,437 ― * Principally included in “other ordinary income” in the consolidated statements of income. ** Included in “net unrealized gains (losses) on available-for-sale securities” under “other comprehensive income (loss)” in the consolidated statements of comprehensive income. - 39 -
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(2) Reconciliation from the beginning balance to the ending balance for the fiscal year of the investment trusts to which the treatment in Paragraph 24-9 is applied As of March 31, 2025 (Millions of yen) Beginning Balance Profit or loss or other comprehensive income for the fiscal year ended March 31, 2025 Net amount of purchase, sale, and redemption Amount by which the funds’ unit price has become regarded as the fair value of investment trusts Amount for which the treatment provided for in Paragraph 24-9 has ceased to be applied Ending balance Unrealized gains or losses of investment trusts held at the end of the period included in profit or loss for the fiscal year ended March 31, 2025 Recognized in profit or loss (*) Recognized in other comprehen- sive income (**) 165,320 1,492 2,254 13,515 ― ― 182,583 ― * Principally included in “other ordinary income” in the consolidated statements of income. ** Included in “net unrealized gains (losses) on available-for-sale securities” under “other comprehensive income (loss)” in the consolidated statements of comprehensive income. As of March 31, 2026 (Millions of yen) Beginning Balance Profit or loss or other comprehensive income for the fiscal year ended March 31, 2026 Net amount of purchase, sale, and redemption Amount by which the funds’ unit price has become regarded as the fair value of investment trusts Amount for which the treatment provided for in Paragraph 24-9 has ceased to be applied Ending balance Unrealized gains or losses of investment trusts held at the end of the period included in profit or loss for the fiscal year ended March 31, 2026 Recognized in profit or loss (*) Recognized in other comprehen- sive income (**) 182,583 1,204 3,393 5,104 ― ― 192,285 ― * Principally included in “other ordinary income” in the consolidated statements of income. ** Included in “net unrealized gains (losses) on available-for-sale securities” under “other comprehensive income (loss)” in the consolidated statements of comprehensive income. (3) Breakdown by contents of restrictions on cancellation or repurchase request as of the consolidated balance sheet date (Millions of yen) Main contents of restrictions on cancellation or repurchase request As of March 31, 2025 As of March 31, 2026 e.g., low liquidity of investment trusts comprising trust assets and longer interval between cancelable dates of investment trust 7,752,533 8,850,437 - 40 -
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(Securities) The fair value information of securities was as follows. Securities discussed here include trading account securities, negotiable certificates of deposit recorded under cash and due from banks, monetary claims bought, as well as securities listed on the consolidated balance sheets. 1. Trading account securities As of March 31, 2025 There were no unrealized gains or losses from trading account securities included in the profit and loss recorded in the consolidated statements of income. As of March 31, 2026 There were no unrealized gains or losses from trading account securities included in the profit and loss recorded in the consolidated statements of income. 2. Held-to-maturity securities As of March 31, 2025 (Millions of yen) Type Amount on the consolidated balance sheet Fair value Difference Those for which the fair value exceeds the amount on the consolidated balance sheet Japanese government bonds ― ― ― Japanese local government bonds 16,026 16,044 18 Japanese corporate bonds 14,371 14,384 12 Others: 5,512,265 5,854,535 342,270 Foreign bonds 5,512,265 5,854,535 342,270 Total 5,542,662 5,884,963 342,300 Those for which the fair value does not exceed the amount on the consolidated balance sheet Japanese government bonds 25,037,387 22,766,025 (2,271,361) Japanese local government bonds 4,749,430 4,604,005 (145,425) Japanese corporate bonds 6,632,775 6,394,048 (238,726) Others: 3,207,618 3,134,088 (73,530) Foreign bonds 3,207,618 3,134,088 (73,530) Total 39,627,212 36,898,167 (2,729,044) Total 45,169,875 42,783,131 (2,386,743) - 41 -
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As of March 31, 2026 (Millions of yen) Type Amount on the consolidated balance sheet Fair value Difference Those for which the fair value exceeds the amount on the consolidated balance sheet Japanese government bonds ― ― ― Japanese local government bonds 17,897 18,000 102 Japanese corporate bonds ― ― ― Others: 7,534,907 8,266,122 731,215 Foreign bonds 7,534,907 8,266,122 731,215 Total 7,552,804 8,284,122 731,317 Those for which the fair value does not exceed the amount on the consolidated balance sheet Japanese government bonds 30,851,871 26,537,289 (4,314,582) Japanese local government bonds 5,014,820 4,791,202 (223,617) Japanese corporate bonds 7,115,017 6,663,289 (451,727) Others: 2,145,712 2,110,356 (35,356) Foreign bonds 2,145,712 2,110,356 (35,356) Total 45,127,421 40,102,138 (5,025,283) Total 52,680,226 48,386,260 (4,293,965) - 42 -
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3. Available-for-sale securities for which fair value is available As of March 31, 2025 (Millions of yen) Type Amount on the consolidated balance sheet Acquisition cost Difference (*) Those for which the amount on the consolidated balance sheet exceeds the acquisition cost Japanese stocks 3,275 2,628 647 Bonds: 1,714,256 1,665,383 48,873 Japanese government bonds 1,608,696 1,560,435 48,260 Japanese local government bonds 12,237 11,908 329 Short-term corporate bonds ― ― ― Japanese corporate bonds 93,323 93,040 283 Others: 60,875,532 56,820,797 4,054,735 Foreign bonds 15,967,762 13,418,220 2,549,542 Investment trusts (**) 44,878,484 43,373,320 1,505,164 Total 62,593,065 58,488,808 4,104,256 Those for which the amount on the consolidated balance sheet does not exceed the acquisition cost Japanese stocks 5,340 6,087 (746) Bonds: 17,941,354 19,798,143 (1,856,789) Japanese government bonds 13,696,569 15,449,953 (1,753,383) Japanese local government bonds 823,180 834,502 (11,321) Short-term corporate bonds 678,731 678,731 ― Japanese corporate bonds 2,742,872 2,834,956 (92,083) Others: 18,284,266 18,662,783 (378,516) Foreign bonds 3,136,081 3,202,104 (66,022) Investment trusts (**) 14,583,224 14,884,266 (301,042) Total 36,230,962 38,467,014 (2,236,052) Total 98,824,027 96,955,822 1,868,204 * Of the difference shown above, ¥1,548,817 million gains were included in the consolidated statements of income due to the application of fair value hedge accounting. ** Investment trusts are mainly invested in foreign bonds. Note: Shares, etc. that do not have a market price and investments in partnerships which are not included above were as follows: (Millions of yen) Amount on the consolidated balance sheet Unlisted stocks, etc. 37,623 Investments in partnerships 141,001 Total 178,624 - 43 -
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As of March 31, 2026 (Millions of yen) Type Amount on the consolidated balance sheet Acquisition cost Difference (*) Those for which the amount on the consolidated balance sheet exceeds the acquisition cost Japanese stocks 21,261 18,836 2,425 Bonds: 1,333,625 1,319,298 14,327 Japanese government bonds 1,320,165 1,305,975 14,189 Japanese local government bonds 8,645 8,530 115 Short-term corporate bonds ― ― ― Japanese corporate bonds 4,815 4,793 21 Others: 70,401,515 64,858,460 5,543,054 Foreign bonds 17,830,641 14,206,358 3,624,283 Investment trusts (**) 52,570,619 50,651,848 1,918,771 Total 71,756,402 66,196,595 5,559,807 Those for which the amount on the consolidated balance sheet does not exceed the acquisition cost Japanese stocks 23,250 27,082 (3,832) Bonds: 12,708,460 15,397,462 (2,689,002) Japanese government bonds 9,265,846 11,807,373 (2,541,526) Japanese local government bonds 532,534 541,052 (8,517) Short-term corporate bonds 823,599 823,599 ― Japanese corporate bonds 2,086,479 2,225,437 (138,958) Others: 8,535,296 8,804,986 (269,689) Foreign bonds 1,502,420 1,537,736 (35,315) Investment trusts (**) 6,504,706 6,716,693 (211,987) Total 21,267,006 24,229,531 (2,962,524) Total 93,023,409 90,426,126 2,597,282 * Of the difference shown above, ¥1,954,026 million gains were included in the consolidated statements of income due to the application of fair value hedge accounting. ** Investment trusts are mainly invested in foreign bonds. Note: Shares, etc. that do not have a market price and investments in partnerships which are not included above were as follows: (Millions of yen) Amount on the consolidated balance sheet Unlisted stocks, etc. 45,080 Investments in partnerships 162,431 Total 207,511 4. Held-to-maturity securities sold during the fiscal year There were no held-to-maturity securities sold during the fiscal years ended March 31, 2025 and 2026. - 44 -
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5. Available-for-sale securities sold during the fiscal year For the fiscal year ended March 31, 2025 (Millions of yen) Type Sales proceeds Total realized gains Total realized losses Japanese stocks 778 377 ― Bonds: 1,067,375 381 (768) Japanese government bonds 1,050,938 380 (666) Japanese corporate bonds 16,436 0 (102) Others: 1,889,495 85,441 (97,724) Foreign bonds 608,833 2,612 (1,020) Investment trusts 1,280,662 82,829 (96,703) Total 2,957,649 86,200 (98,493) For the fiscal year ended March 31, 2026 (Millions of yen) Type Sales proceeds Total realized gains Total realized losses Japanese stocks 3,774 1,718 (62) Bonds: 610,576 807 (9,629) Japanese government bonds 609,529 807 (9,626) Japanese corporate bonds 1,047 ― (2) Others: 1,110,429 99,279 (49,008) Foreign bonds 176,316 2,200 (65) Investment trusts 934,113 97,079 (48,942) Total 1,724,780 101,805 (58,700) 6. Securities for which accounting for impairment was applied For securities (excluding shares, etc. that do not have a market price and investments in partnerships) other than trading securities, whose fair value shows a substantial decline from their acquisition cost and is not judged to recover to their acquisition cost, the Group reduces its book value of securities to fair value on the consolidated balance sheet and charges valuation differences to income (hereafter “impairment losses”) in the fiscal year in which they are recognized. No impairment losses were recognized for the fiscal years ended March 31, 2025 and 2026. The criteria for determining if a security’s fair value shows a “substantial decline,” as a general principle, are as follows: a) Bonds and bonds equivalent • Securities whose fair value is 70% or less than the acquisition cost b) Securities other than a) • Securities whose fair value is 50% or less than the acquisition cost, or • Securities whose fair value is 70% or less but over 50% of the acquisition cost and the market price continues to be less than a certain level However, domestic listed stocks, etc. are determined using the value calculated based on the average market price during the period of one month before the fiscal year-end, instead of the fair value in b) above. - 45 -
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(Money held in trust) The fair value information of money held in trust was as follows. 1. Money held in trust for the purpose of trading As of March 31, 2025 The Group did not hold money held in trust for the purpose of trading. As of March 31, 2026 The Group did not hold money held in trust for the purpose of trading. 2. Money held in trust for the purpose of being held-to-maturity As of March 31, 2025 The Group did not hold money held in trust for the purpose of being held-to-maturity. As of March 31, 2026 The Group did not hold money held in trust for the purpose of being held-to-maturity. 3. Money held in trust (excluding trading and held-to-maturity purposes) As of March 31, 2025 (Millions of yen) Amount on the consolidated balance sheet Acquisition cost Difference Those for which the amount on the consolidated balance sheet exceeds the acquisition cost Those for which the amount on the consolidated balance sheet does not exceed the acquisition cost Money held in trust classified as: Available-for-sale 2,101,358 1,937,818 163,539 330,946 (167,406) Notes: 1. “Those for which the amount on the consolidated balance sheet exceeds the acquisition cost” and “Those for which the amount on the consolidated balance sheet does not exceed the acquisition cost” represent the breakdown of the “Difference” for the respective items. 2. Money held in trust classified as available-for-sale consisting of shares, etc. that do not have a market price and investments in partnerships which is not included above was as follows: (Millions of yen) Amount on the consolidated balance sheet Money held in trust classified as: Available-for-sale 3,620,615 - 46 -
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As of March 31, 2026 (Millions of yen) Amount on the consolidated balance sheet Acquisition cost Difference Those for which the amount on the consolidated balance sheet exceeds the acquisition cost Those for which the amount on the consolidated balance sheet does not exceed the acquisition cost Money held in trust classified as: Available-for-sale 2,288,715 2,118,940 169,774 397,129 (227,355) Notes: 1. “Those for which the amount on the consolidated balance sheet exceeds the acquisition cost” and “Those for which the amount on the consolidated balance sheet does not exceed the acquisition cost” represent the breakdown of the “Difference” for the respective items. 2. Money held in trust classified as available-for-sale consisting of shares, etc. that do not have a market price and investments in partnerships which is not included above was as follows: (Millions of yen) Amount on the consolidated balance sheet Money held in trust classified as: Available-for-sale 3,934,115 4. Money held in trust for which accounting for impairment was applied For the securities (excluding shares, etc. that do not have a market price and investments in partnerships) that form part of the trust assets in money held in trust other than that for the purpose of trading, whose fair value shows a substantial decline from their acquisition cost and is not judged to recover to their acquisition cost, the Group reduces its book value of securities to fair value on the consolidated balance sheets and charges valuation differences to income (hereafter “impairment losses”) in the fiscal year in which they are recognized. Impairment losses for the fiscal years ended March 31, 2025 and 2026 amounted to ¥1,879 million and ¥3,285 million, respectively. The criteria for determining if a security’s fair value shows a “substantial decline,” as a general principle, are as follows: a) Bonds and bonds equivalent • Securities whose fair value is 70% or less than the acquisition cost b) Securities other than a) • Securities whose fair value is 50% or less than the acquisition cost, or • Securities whose fair value is 70% or less but over 50% of the acquisition cost and the market price continues to be less than a certain level However, domestic listed stocks, etc. are determined using the value calculated based on the average market price during the period of one month before the fiscal year-end, instead of the fair value in b) above. - 47 -
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(Net unrealized gains (losses) on available-for-sale securities) Net unrealized gains (losses) on available-for-sale securities consisted of the following: As of March 31, 2025 (Millions of yen) Amount Valuation differences: 575,077 Available-for-sale securities 337,166 Money held in trust classified as: Available-for-sale 237,910 Deferred tax assets (liabilities) (175,847) Net unrealized gains (losses) on available-for-sale securities (before adjustment) 399,229 Amount corresponding to non-controlling interests (8,379) Amount corresponding to net unrealized gains (losses) on available-for-sale securities owned by affiliates, which is attributable to the Bank ― Net unrealized gains (losses) on available-for-sale securities 390,850 Notes: 1. In addition to the difference shown above, ¥1,548,817 million gains were included in the consolidated statements of income due to the application of fair value hedge accounting. 2. “Valuation differences” included the following: • Foreign currency translation adjustment, etc. related to shares, etc. that do not have a market price and investments in partnerships that are denominated in foreign currencies: ¥17,779 million gains • Foreign currency translation adjustment, etc. related to shares, etc. that do not have a market price and investments in partnerships that are denominated in foreign currencies and included in the underlying investment assets of money held in trust: ¥74,370 million gains As of March 31, 2026 (Millions of yen) Amount Valuation differences: 926,638 Available-for-sale securities 664,808 Money held in trust classified as: Available-for-sale 261,830 Deferred tax assets (liabilities) (289,435) Net unrealized gains (losses) on available-for-sale securities (before adjustment) 637,203 Amount corresponding to non-controlling interests (8,349) Amount corresponding to net unrealized gains (losses) on available-for-sale securities owned by affiliates, which is attributable to the Bank ― Net unrealized gains (losses) on available-for-sale securities 628,853 Notes: 1. In addition to the difference shown above, ¥1,954,026 million gains were included in the consolidated statements of income due to the application of fair value hedge accounting. 2. “Valuation differences” included the following: • Foreign currency translation adjustment, etc. related to shares, etc. that do not have a market price and investments in partnerships that are denominated in foreign currencies: ¥21,551 million gains • Foreign currency translation adjustment, etc. related to shares, etc. that do not have a market price and investments in partnerships that are denominated in foreign currencies and included in the underlying investment assets of money held in trust: ¥92,055 million gains - 48 -
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(Derivatives) 1. Derivatives for which hedge accounting is not applied For derivative transactions for which hedge accounting is not applied, the contract amounts at the balance sheet date for each type of underlying instrument, the principal equivalent amount stipulated in the contract, the fair value, and unrealized gains or losses are as follows. The amount shown as the contract amount, etc., does not show market risk related to the derivative transactions. (1) Interest rate-related derivatives As of March 31, 2025 There were no interest rate-related derivatives. As of March 31, 2026 There were no interest rate-related derivatives. (2) Currency-related derivatives As of March 31, 2025 (Millions of yen) Category Type Contract amount, etc. Portion of contract amount, etc., exceeding one year Fair value Unrealized gains/losses OTC Currency swaps 2,012,843 1,294,354 (61,602) (61,602) Foreign exchange forward contracts: Sold 85,647 ― (1,037) (1,037) Bought 325,714 ― (43) (43) Total ― ― (62,683) (62,683) Note: The above transactions are stated at fair value and unrealized gains (losses) are charged to income or expenses in the consolidated statements of income. As of March 31, 2026 (Millions of yen) Category Type Contract amount, etc. Portion of contract amount, etc., exceeding one year Fair value Unrealized gains/losses OTC Currency swaps 1,821,537 981,700 (145,118) (145,118) Foreign exchange forward contracts: Sold 64,181 ― (13) (13) Bought 231,355 ― 132 132 Total ― ― (144,999) (144,999) Note: The above transactions are stated at fair value and unrealized gains (losses) are charged to income or expenses in the consolidated statements of income. (3) Equity-related derivatives As of March 31, 2025 There were no equity-related derivatives. As of March 31, 2026 There were no equity-related derivatives. - 49 -
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(4) Bond-related derivatives As of March 31, 2025 There were no bond-related derivatives. As of March 31, 2026 There were no bond-related derivatives. (5) Commodity-related derivatives As of March 31, 2025 There were no commodity-related derivatives. As of March 31, 2026 There were no commodity-related derivatives. (6) Credit derivatives As of March 31, 2025 There were no credit derivatives. As of March 31, 2026 There were no credit derivatives. - 50 -
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2. Derivatives for which hedge accounting is applied For derivative transactions for which hedge accounting is applied, the contract amount at the balance sheet date for each type of underlying instruments for each hedge accounting method, the principal equivalent amount stipulated in the contract, and the fair value are as follows. The amount shown as the contract amount, etc., does not show market risk related to the derivative transactions. (1) Interest rate-related derivatives As of March 31, 2025 (Millions of yen) Hedge accounting method Type Primary hedged instrument Contract amount, etc. Portion of contract amount, etc., exceeding one year Fair value Standard treatment Interest rate swap transactions: Available-for-sale securities (Japanese government bonds and foreign securities), Deposits Pay floating swaps, receive fixed swaps 3,945,000 3,185,000 (50,914) Pay fixed swaps, receive floating swaps 3,449,035 3,309,715 101,049 Total ― ― ― 50,135 Note: The deferred hedge accounting method is applied as the hedge accounting method for interest rate risks arising from financial assets and liabilities. As of March 31, 2026 (Millions of yen) Hedge accounting method Type Primary hedged instrument Contract amount, etc. Portion of contract amount, etc., exceeding one year Fair value Standard treatment Interest rate swap transactions: Available-for-sale securities (Japanese government bonds and foreign securities), Deposits Pay floating swaps, receive fixed swaps 3,185,000 2,010,000 (52,922) Pay fixed swaps, receive floating swaps 4,171,480 3,387,965 222,436 Special accounting treatment for interest rate swaps Interest rate swap transactions: Held-to-maturity securities (Japanese local government bonds, Japanese corporate bonds and foreign securities) Pay fixed swaps, receive floating swaps 411,799 411,799 (Note 2) Total ― ― ― 169,513 Notes: 1. The deferred hedge accounting method is primarily applied as the hedge accounting method for interest rate risks arising from financial assets and liabilities. 2. Derivatives under special accounting treatment for interest rate swaps are treated as being an inseparable part of the securities being hedged, and their fair value is therefore included in that of the corresponding securities under Note “Financial instruments.” - 51 -
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(2) Currency-related derivatives As of March 31, 2025 (Millions of yen) Hedge accounting method Type Primary hedged instrument Contract amount, etc. Portion of contract amount, etc., exceeding one year Fair value Standard treatment Currency swaps Available-for- sale securities (Foreign securities) 8,550,039 7,192,713 (1,783,833) Accounting method for recognizing gains and losses on hedged items Currency swaps Available-for- sale securities (Foreign securities) 74,846 74,846 (11,018) Foreign exchange forward contracts: Sold 24,462 ― 153 Allocation method, such as foreign exchange forward contracts Currency swaps Held-to- maturity securities (Foreign securities) 5,396,503 4,886,504 (Note 2) Total ― ― ― (1,794,699) Notes: 1. The deferred hedge accounting method is primarily used to hedge the risk from market exchange rate fluctuations for foreign currency-denominated securities. 2. Derivatives under the allocation method, such as foreign exchange forward contracts, are treated as being an inseparable part of the securities being hedged, and their fair value is therefore included in that of the corresponding securities under Note “Financial instruments.” As of March 31, 2026 (Millions of yen) Hedge accounting method Type Primary hedged instrument Contract amount, etc. Portion of contract amount, etc., exceeding one year Fair value Standard treatment Currency swaps Available-for- sale securities (Foreign securities) 7,957,953 6,589,461 (2,415,708) Accounting method for recognizing gains and losses on hedged items Currency swaps Available-for- sale securities (Foreign securities) 44,410 ― (9,545) Foreign exchange forward contracts: Sold 95,012 ― (2,385) Allocation method, such as foreign exchange forward contracts Currency swaps Held-to- maturity securities (Foreign securities) 6,348,398 5,324,761 (Note 2) Total ― ― ― (2,427,639) Notes: 1. The deferred hedge accounting method is primarily used to hedge the risk from market exchange rate fluctuations for foreign currency-denominated securities. 2. Derivatives under the allocation method, such as foreign exchange forward contracts, are treated as being an inseparable part of the securities being hedged, and their fair value is therefore included in that of the corresponding securities under Note “Financial instruments.” - 52 -
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(3) Equity-related derivatives As of March 31, 2025 There were no equity-related derivatives. As of March 31, 2026 There were no equity-related derivatives. (4) Bond-related derivatives As of March 31, 2025 There were no bond-related derivatives. As of March 31, 2026 There were no bond-related derivatives. - 53 -
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(Retirement benefits) 1. Outline of employees’ retirement benefit plans adopted by the Group The Group has a lump-sum retirement payment plan for employees based on its retirement benefit rule, and the Bank established a retirement benefit trust on March 29, 2024. In addition, started from October 1, 2015, the new retirement pension plan has been applied to the Bank. The plan is based on the “Act for Partial Amendment of the Act on National Public Officers’ Retirement Allowance, etc., for the Purpose of Review over the Levels of the Retirement Benefits for National Public Officers (Act No. 96 of 2012),” which was introduced as a new pension system to replace the discontinued occupational portion (third-tier portion) of the mutual pension. 2. Defined-benefit plan (1) Reconciliations of the projected benefit obligation at the beginning and the end of the fiscal years (Millions of yen) Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Projected benefit obligation at the beginning of the fiscal year 132,056 130,498 Service cost 6,397 6,293 Interest cost on projected benefit obligation 923 913 Net actuarial (gains) losses arising during the fiscal year 941 (16,630) Retirement benefits paid (9,550) (10,021) Other (270) (90) Projected benefit obligation at the end of the fiscal year 130,498 110,961 (2) Reconciliations of the plan assets at the beginning and the end of the fiscal years (Millions of yen) Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Plan assets at the beginning of the fiscal year 130,000 131,925 Expected return on plan assets 4,030 4,089 Net actuarial (gains) losses arising during the fiscal year (2,104) 17,931 Plan assets at the end of the fiscal year 131,925 153,946 - 54 -
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(3) Reconciliations of the projected benefit obligation and plan assets at the end of the fiscal years, and the liability for retirement benefits and asset for retirement benefits recorded on the consolidated balance sheets (Millions of yen) Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Funded projected benefit obligation 130,493 110,954 Plan assets (131,925) (153,946) (1,432) (42,992) Unfunded projected benefit obligation 4 6 Net liabilities and assets recorded on the consolidated balance sheets (1,427) (42,985) Liability for retirement benefits 4 6 Asset for retirement benefits (1,432) (42,992) Net liabilities and assets recorded on the consolidated balance sheets (1,427) (42,985) (4) Total retirement benefit costs and components (Millions of yen) Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Service cost 6,397 6,293 Interest cost on projected benefit obligation 923 913 Expected return on plan assets (4,030) (4,089) Amortization of net actuarial (gains) losses 101 399 Amortization of prior service cost (1,318) (254) Other (49) (35) Total retirement benefit costs related to the defined-benefit plan 2,024 3,226 (5) Adjustments for retirement benefits Adjustments for retirement benefits (before income taxes and tax effect) consisted of the following: (Millions of yen) Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Prior service cost (1,318) (254) Net actuarial (gains) losses (2,944) 34,961 Total (4,263) 34,707 (6) Accumulated adjustments for retirement benefits Accumulated adjustments for retirement benefits (before income taxes and tax effect) consisted of the following: (Millions of yen) Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Unrecognized prior service cost 1,355 1,101 Unrecognized net actuarial gains (losses) (4,031) 30,930 Total (2,675) 32,032 - 55 -
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(7) Matters concerning the plan assets (i) Composition of the total plan assets by category is as follows: Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Investment trusts 99.9% 99.9% Other 0.1% 0.1% Total 100.0% 100.0% Note: Total plan assets include 100% of the retirement benefit trust established for the lump-sum retirement payment plan. (ii) Method for determining the long-term expected rate of return on plan assets The long-term expected rate of return on plan assets is determined by considering the present and expected allocation of plan assets, as well as the present and future long-term rate of return expected from the diverse assets that compose the plan assets. (8) Actuarial assumptions The major actuarial assumptions used were as follows: Category For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Discount rate 0.7% 2.3% Long-term expected rate of return on plan assets 3.1% 3.1% - 56 -
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(Stock options, etc.) For the fiscal year ended March 31, 2025 There were no stock options. For the fiscal year ended March 31, 2026 There were no stock options. (Deferred tax assets/liabilities) 1. The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities (Millions of yen) As of March 31, 2025 As of March 31, 2026 Deferred tax assets: Reserve for possible loan losses 225 287 Liability for retirement benefits 40,520 27,420 Accrued enterprise taxes 5,359 7,839 Net deferred losses on hedges 513,210 671,143 Reserve for reimbursement of deposits 13,367 12,483 Depreciation 7,565 10,178 Unrealized losses of money held in trust 1,137 1,355 Other 40,872 50,115 Subtotal deferred tax assets 622,258 780,824 Valuation allowance (107) (163) Total deferred tax assets 622,150 780,661 Deferred tax liabilities: Net unrealized gains on available-for-sale securities (175,847) (289,435) Other (3,554) (4,434) Total deferred tax liabilities (179,402) (293,870) Net deferred tax assets (liabilities) 442,748 486,791 2. The reconciliation of the effective statutory tax rate of the Group to the effective income tax rate As of March 31, 2025 As of March 31, 2026 Effective statutory tax rate 30.62% 30.62% Adjustments for: Permanent differences (e.g., Entertainment expenses) 0.04 0.04 Permanent differences (e.g., Cash dividends received) (0.27) (0.14) Per capita inhabitants’ taxes, etc. 0.04 0.03 Revision of increase in deferred tax assets at the end of the fiscal year due to tax rate change (0.37) ― Tax credit (1.18) (1.09) Other (0.98) (0.61) Effective income tax rate 27.88% 28.84% - 57 -
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(Revenue recognition) 1. Disaggregation of revenue from contracts with customers (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Fees and commissions: 182,575 194,548 Exchange and settlement-related fees 93,581 104,032 Other ordinary income 454 245 Revenue from contracts with customers 183,029 194,794 2. Useful information in understanding revenue Main performance obligations in revenue from contracts with customers are the provision of exchange and settlement services, and the Group has an obligation to provide services every time its customer makes a request. The performance obligation is in principle deemed satisfied when an exchange transaction or a settlement is completed, and the Group recognizes revenue. No estimate of significant variable consideration and financing component is included in revenue from contracts with customers. 3. Useful information in understanding revenue for the fiscal year ended March 31, 2026 and for the following fiscal years Notes are omitted due to immateriality. - 58 -
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(Segment information, etc.) Segment information Segment information is omitted since the Group comprises only one segment, which is defined as banking services. Related information For the fiscal year ended March 31, 2025 1. Information about services (Millions of yen) Lending Securities investment Fees and commissions Other Total Ordinary income from external customers 12,140 2,215,355 184,839 109,717 2,522,052 Note: Ordinary income is presented instead of net sales, which is typical for companies in other industries. 2. Information about geographical areas (1) Ordinary income Information about ordinary income by geographical area is omitted as ordinary income from external customers in Japan accounted for more than 90% of the total ordinary income in the consolidated statements of income. (2) Tangible fixed assets Information about tangible fixed assets by geographical areas is omitted as related assets located in Japan accounted for more than 90% of the tangible fixed assets in the consolidated balance sheets. 3. Information about major customers Information about major customers is omitted as there was no single external customer that accounted for 10% or more of the total ordinary income in the consolidated statements of income. For the fiscal year ended March 31, 2026 1. Information about services (Millions of yen) Lending Securities investment Fees and commissions Other Total Ordinary income from external customers 23,864 2,281,877 196,841 349,623 2,852,206 Note: Ordinary income is presented instead of net sales, which is typical for companies in other industries. 2. Information about geographical areas (1) Ordinary income Information about ordinary income by geographical area is omitted as ordinary income from external customers in Japan accounted for more than 90% of the total ordinary income in the consolidated statements of income. (2) Tangible fixed assets Information about tangible fixed assets by geographical areas is omitted as related assets located in Japan accounted for more than 90% of the tangible fixed assets in the consolidated balance sheets. 3. Information about major customers Information about major customers is omitted as there was no single external customer that accounted for 10% or more of the total ordinary income in the consolidated statements of income. - 59 -
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Information about losses on impairment of fixed assets by reported segments The related information is omitted as the Group comprises only one segment, which is defined as banking service. Information about amortization of goodwill and unamortized balance by reported segments The related information is omitted as the Group comprises only one segment, which is defined as banking service. Information about recognized gain on negative goodwill by reported segments There were no recognized gains on negative goodwill. - 60 -
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(Related party transactions) 1. Transactions with related parties Transactions between the Group and related parties (1) Transactions between the Group and the parent company, or major corporate shareholders For the fiscal year ended March 31, 2025 (Millions of yen) Type Name of company, etc. Location Capital Business description Ownership of voting rights held Nature of transactions Details of transactions Transaction amount Account Outstanding balance at the end of the fiscal year Parent company JAPAN POST HOLDINGS Co., Ltd. Chiyoda- ku, Tokyo 3,500,000 A holding company 50.05% of the Bank’s shares (direct) Management of JAPAN POST GROUP Concurrent holding of positions by executive management directors Contract for using IT system service Payment of brand royalty fees (*) 4,481 Other liabilities 410 Payment of IT system service charge (**) 15,348 Other liabilities 1,216 Transaction conditions and policies on determining transaction conditions, etc. * The Bank belongs to JAPAN POST GROUP and receives benefits from the brand value of JAPAN POST GROUP that reflects the Bank’s performance, and pays brand royalty fees calculated at a certain rate of the average deposit balance for the previous fiscal year, which is considered as the representative performance metric. ** Payment is made for IT system service within JAPAN POST GROUP at rates determined based on the arm’s length principle. For the fiscal year ended March 31, 2026 (Millions of yen) Type Name of company, etc. Location Capital Business description Ownership of voting rights held Nature of transactions Details of transactions Transaction amount Account Outstanding balance at the end of the fiscal year Parent company JAPAN POST HOLDINGS Co., Ltd. Chiyoda- ku, Tokyo 1,750,000 A holding company 49.88% of the Bank’s shares (direct) Management of JAPAN POST GROUP Concurrent holding of positions by executive management directors Contract for using IT system service Payment of brand royalty fees (*) 4,414 Other liabilities 404 Payment of IT system service charge (**) 12,372 Other liabilities 1,148 Transaction conditions and policies on determining transaction conditions, etc. * The Bank belongs to JAPAN POST GROUP and receives benefits from the brand value of JAPAN POST GROUP that reflects the Bank’s performance, and pays brand royalty fees calculated at a certain rate of the average deposit balance for the previous fiscal year, which is considered as the representative performance metric. ** Payment is made for IT system service within JAPAN POST GROUP at rates determined based on the arm’s length principle. - 61 -
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(2) Transactions between the Group and unconsolidated subsidiaries or affiliates For the fiscal year ended March 31, 2025 There were no transactions between the Group and unconsolidated subsidiaries or affiliates. For the fiscal year ended March 31, 2026 There were no transactions between the Group and unconsolidated subsidiaries or affiliates. (3) Transactions between the Group and companies with the same parent or subsidiaries of the Group’s affiliates For the fiscal year ended March 31, 2025 (Millions of yen) Type Name of company, etc. Location Capital Business description Ownership of voting rights held Nature of transactions Details of transactions Transaction amount Account Outstanding balance at the end of the fiscal year Subsidiary of parent company JAPAN POST Co., Ltd. Chiyoda -ku, Tokyo 400,000 Postal counter operations, etc. Postal business and domestic/ international logistics business Nil Concurrent holding of positions by executive management directors Commissions on bank agency services, etc. Bank counter services agreement Consignment contracts for logistics operations Payment of commis- sions on bank agency services, etc. (*) Receipt and payment of funds related to bank agency services Payment of consignment fees for logistics operations (****) 302,872 Other liabilities 27,939 861,857 Other assets (**) 740,000 ― (***) Other liabilities (***) 46,530 2,613 Other liabilities 291 Accrued expenses 43 Transaction conditions and policies on determining transaction conditions, etc. * The figures are determined based on costs, etc., incurred in connection with commissions on bank agency services, etc. ** The figures represent advance payments of funds necessary for delivery of deposits in bank agency services. The transaction amounts are presented on an average balance basis for the fiscal year ended March 31, 2025. *** The figures represent the unsettled amount between the Bank and JAPAN POST Co., Ltd. in connection with receipt/payment operations with customers in bank agency services. Transaction amounts are not presented because, being settlement transactions, these amounts are substantial. **** Payment is made for consigned operations, such as loading and unloading, storage, and delivery of articles at rates determined based on the arm’s length principle. Note: In addition to the above transactions, pursuant to the Act on Organization for Postal Savings, Postal Life Insurance and Post Office Network, from the fiscal year ended March 31, 2020, of the costs necessary to maintain the post office network, the costs that are indispensable for securing the universal services (except for those incurred by JAPAN POST Co., Ltd.) are covered by the subsidy from the Organization for Postal Savings, Postal Life Insurance and Post Office Network granted to JAPAN POST Co., Ltd. The subsidy has been funded by contributions from the Bank and JAPAN POST INSURANCE Co., Ltd. The contribution made by the Bank for the fiscal year ended March 31, 2025 was ¥246,735 million. - 62 -
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For the fiscal year ended March 31, 2026 (Millions of yen) Type Name of company, etc. Location Capital Business description Ownership of voting rights held Nature of transactions Details of transactions Transaction amount Account Outstanding balance at the end of the fiscal year Subsidiary of parent company JAPAN POST Co., Ltd. Chiyoda -ku, Tokyo 700,000 Postal counter operations, etc. Postal business and domestic/ international logistics business Nil Concurrent holding of positions by executive management directors Commissions on bank agency services, etc. Bank counter services agreement Consignment contracts for logistics operations Payment of commis- sions on bank agency services, etc. (*) Receipt and payment of funds related to bank agency services Payment of consignment fees for logistics operations (****) 297,858 Other liabilities 27,489 846,000 Other assets (**) 750,000 ― (***) Other liabilities (***) 15,953 2,885 Other liabilities 365 Accrued expenses 47 Transaction conditions and policies on determining transaction conditions, etc. * The figures are determined based on costs, etc., incurred in connection with commissions on bank agency services, etc. ** The figures represent advance payments of funds necessary for delivery of deposits in bank agency services. The transaction amounts are presented on an average balance basis for the fiscal year ended March 31, 2026. *** The figures represent the unsettled amount between the Bank and JAPAN POST Co., Ltd. in connection with receipt/payment operations with customers in bank agency services. Transaction amounts are not presented because, being settlement transactions, these amounts are substantial. **** Payment is made for consigned operations, such as loading and unloading, storage, and delivery of articles at rates determined based on the arm’s length principle. Note: In addition to the above transactions, pursuant to the Act on Organization for Postal Savings, Postal Life Insurance and Post Office Network, from the fiscal year ended March 31, 2020, of the costs necessary to maintain the post office network, the costs that are indispensable for securing the universal services (except for those incurred by JAPAN POST Co., Ltd.) are covered by the subsidy from the Organization for Postal Savings, Postal Life Insurance and Post Office Network granted to JAPAN POST Co., Ltd. The subsidy has been funded by contributions from the Bank and JAPAN POST INSURANCE Co., Ltd. The contribution made by the Bank for the fiscal year ended March 31, 2026 was ¥263,079 million. (4) Transactions between the Group and directors and/or executive officers, or major individual shareholders For the fiscal year ended March 31, 2025 There were no transactions between the Group and directors and/or executive officers, or major individual shareholders. For the fiscal year ended March 31, 2026 There were no transactions between the Group and directors and/or executive officers, or major individual shareholders. 2. Notes related to the parent company and/or significant affiliates (1) Information on the parent company JAPAN POST HOLDINGS Co., Ltd. (Listed on the Tokyo Stock Exchange) (2) Information on significant affiliates There were no significant affiliates. - 63 -
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(Per share data) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Net assets per share Yen 2,511.18 2,586.63 Net income per share Yen 114.60 147.10 Notes: 1. Diluted net income per share is not presented since there has been no potential dilution. 2. Net assets per share were calculated based on the following: As of March 31, 2025 As of March 31, 2026 Net assets Millions of yen 9,090,989 9,260,090 Amounts deducted from net assets Millions of yen 50,836 46,641 Non-controlling interests Millions of yen 50,836 46,641 Net assets attributable to common stock at the end of the fiscal year Millions of yen 9,040,152 9,213,449 Number of common stock at the end of the fiscal year used for the calculation of net assets per share Thousand shares 3,599,956 3,561,946 3. Net income per share was calculated based on the following: For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Net income attributable to owners of parent Millions of yen 414,324 525,583 Amount not attributable to common shareholders Millions of yen ― ― Net income attributable to owners of parent attributable to common stock Millions of yen 414,324 525,583 Average number of common stock outstanding during the fiscal year Thousand shares 3,615,355 3,572,944 4. To calculate net assets per share, the treasury stock held by the stock benefit trust was included in the treasury stock deducted from the number of common stock outstanding at the end of the fiscal year. To calculate net income per share, the treasury stock held by the stock benefit trust was included in the treasury stock deducted to calculate the average number of outstanding shares for the fiscal year. In the calculation of net assets per share, the number of treasury stock deducted as of March 31, 2025 and 2026 was 1,064 thousand shares and 1,186 thousand shares, respectively. In the calculation of net income per share, the number of treasury stock deducted to calculate the average number of outstanding shares for the fiscal years ended March 31, 2025 and 2026 was 1,123 thousand shares and 1,188 thousand shares, respectively. (Significant subsequent events) There were no significant subsequent events. - 64 -
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(5) Consolidated Supplementary Schedules Borrowed money and lease obligations Category Amount at the beginning of the fiscal year (Millions of yen) Amount at the end of the fiscal year (Millions of yen) Average interest rate (*) (%) Maturity for repayment Borrowed money: 2,510,100 2,819,400 0.40 ― Borrowings 2,510,100 2,819,400 0.40 July 2026— October 2028 Lease obligations (**) 0 1,059 ― April 2026— April 2033 * Average interest rate is calculated (weighted average) by the interest rate and the amount at the end of the fiscal years ended March 31. ** The average interest rate of lease obligations is not presented above because lease obligations are recorded in the consolidated balance sheets in the amount before deducting interest included in the total amount of lease payments. Note: Scheduled repayment amounts of borrowings and lease obligations within five years subsequent to the fiscal year are as follows: (Millions of yen) One Year or Less > One and ≤ Two Years > Two and ≤ Three Years > Three and ≤ Four Years > Four and ≤ Five Years Borrowings 1,525,800 1,272,500 21,100 ― ― Lease obligations 221 210 189 159 142 As the banking service is engaged in the acceptance of deposits and funding from and investments on the call and bill markets as operating activities, the schedule of borrowed money and lease obligations states the breakdown of “Borrowed money” and lease obligations included in “Other liabilities,” both of which are under “Liabilities” in the consolidated balance sheets. Reference: No promissory note-type commercial paper was issued in the funding conducted as part of operating activities. Asset retirement obligations The schedule of asset retirement obligations is omitted as the amounts of asset retirement obligations at the beginning and the end of the fiscal year ended March 31, 2026 accounted for 1% or less of the amounts of total liabilities and net assets at the beginning and the end of the fiscal year ended March 31, 2026. - 65 -
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Independent auditor’s report To the Board of Directors of JAPAN POST BANK Co., Ltd.: Opinion We have audited the accompanying consolidated financial statements of JAPAN POST BANK Co., Ltd. (“the Company”) and its consolidated subsidiaries (collectively referred to as “the Group”), which comprise the consolidated balance sheet as at March 31, 2026, the consolidated statements of income and comprehensive income, changes in net assets and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2026, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in Japan. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements of public interest entities in Japan and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Reasonableness of the valuation of available-for-sale securities categorized within Level 2 and Level 3 The key audit matter How the matter was addressed in our audit In the consolidated balance sheet of the Group as of March 31, 2026, securities of ¥145,406,910 million were recognized, accounting for approximately 64% of the consolidated total assets. The Group manages funds raised primarily through deposits by investing them in The primary procedures we performed to assess whether the valuation of certain illiquid Bonds categorized within Level 2 and Level 3 was reasonable included the following: (1) Internal control testing We tested the design and operating effectiveness of - 66 -
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securities, including Japanese government bonds, Japanese corporate bonds, foreign bonds and investment trusts. As described in the Note “Financial instruments, 3. Fair value information by level within the fair value hierarchy,” available-for-sale securities booked at fair value on the consolidated balance sheet include Japanese corporate bonds and foreign bonds included in Others (“Bonds”) of ¥8,992,689 million categorized within Level 2 and Bonds of ¥88,358 million categorized within Level 3. The Group used the fair value based on prices mainly obtained from third parties including information vendors and brokers. However, as described in the Note “Significant accounting estimates,” directly or indirectly observable market inputs such as spreads estimated based on prices of similar securities and unobservable market inputs including significant estimates, are used as key assumptions in the prices obtained from third parties. These key assumptions may be affected by a sudden change in market environment or a distortion in the financial markets that results in, for example, a significant widening of bid-ask spreads or a significant increase in liquidity risk premiums, and in particular, for the fair-value valuation of certain illiquid Bonds categorized within Level 2 and Level 3 (such as private placement bonds and securitized products), their estimates may have high estimation uncertainty. Accordingly, using the prices obtained from third parties as fair value involved significant management judgment, and the use of a price based on inappropriate assumptions may have a significant impact on the consolidated financial statements. We, therefore, determined that our assessment of the reasonableness of the valuation of certain illiquid Bonds categorized within Level 2 and Level 3 was of most significance in our audit of the consolidated financial statements for the current fiscal year, and accordingly, determined a key audit matter. certain of the Group’s internal controls relevant to the valuation of certain Bonds categorized within Level 2 and Level 3. In this assessment, we focused our testing on the following controls: controls to validate the reasonableness of the price to be used as fair value through the comparison with prices obtained from multiple third parties; and controls to validate the reasonableness of the price to be used as fair value through the examination of spreads estimated based on prices. (2) Assessment of the reasonableness of fair value For the individually selected Bonds categorized within Level 2 and Level 3 of which prices varied widely amongst various third parties as well as securitized products, we involved financial instrument valuation specialists from our member network firm and performed the following procedures: We assessed whether the price used by the Group as fair value was within a reasonable range by comparing it with the prices obtained directly from third parties; and We assessed whether the price used by the Group as fair value was within a reasonable range by comparing it with the price independently estimated. - 67 -
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Other Information The other information comprises the information included in the Financial Statements, but does not include the consolidated financial statements, and our auditor’s report thereon. Management is responsible for the preparation and presentation of the other information. The audit committee is responsible for overseeing the executive officers’ and directors’ performance of their duties with regard to the design, implementation and maintenance of the reporting process for the other information. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with accounting principles generally accepted in Japan. The audit committee is responsible for overseeing the executive officers’ and directors’ performance of their duties with regard to the design, implementation and maintenance of the Group’s financial reporting process. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - 68 -
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, while the objective of the audit is not to express an opinion on the effectiveness of the Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate whether the presentation and disclosures in the consolidated financial statements are in accordance with accounting standards generally accepted in Japan, the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for the purpose of the group audit. We remain solely responsible for our audit opinion. We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Fee-related Information Fees paid or payable to our firm and to other firms within the same network as our firm for audit and non-audit services provided to the Company and its subsidiaries for the current year are 252 million yen and 49 million yen, respectively. Interest required to be disclosed by the Certified Public Accountants Act of Japan We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan. - 69 -
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/S/ KANNO Masako Designated Engagement Partner Certified Public Accountant /S/ MORIMOTO Yohei Designated Engagement Partner Certified Public Accountant /S/ OKADA Hideki Designated Engagement Partner Certified Public Accountant KPMG AZSA LLC Tokyo Office, Japan August 6, 2026 Notes to the Reader of Independent Auditor’s Report: This is a copy of the Independent Auditor’s Report and the original copies are kept separately by the Company and KPMG AZSA LLC. - 70 -
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2. Non-Consolidated Financial Statements (1) Non-Consolidated Balance Sheets (Unaudited) (Millions of yen) As of March 31, 2025 As of March 31, 2026 Assets: Cash and due from banks 64,607,384 54,336,427 Cash 280,120 300,501 Due from banks 64,327,264 54,035,926 Call loans 2,135,000 1,760,000 Receivables under resale agreements 8,463,537 8,270,151 Monetary claims bought 593,739 517,916 Trading account securities 224 214 Trading Japanese government bonds 224 214 Money held in trust 5,721,973 6,222,830 Securities 143,565,339 145,374,043 Japanese government bonds 40,342,652 41,437,884 Japanese local government bonds 5,600,875 5,573,898 Short-term corporate bonds 678,731 823,599 Japanese corporate bonds 9,483,343 9,206,311 Japanese stocks 33,383 75,271 Other securities 87,426,352 88,257,077 Loans 3,130,595 4,372,193 Loans on deeds 3,062,399 4,313,809 Overdrafts 68,195 58,384 Foreign exchanges 134,261 178,799 Due from foreign banks 134,261 178,799 Other assets 4,459,004 4,691,301 Domestic exchange settlement accounts - debit 31,209 30,200 Prepaid expenses 4,029 7,298 Accrued income 276,842 313,662 Initial margins for future transactions 47,000 10,000 Derivatives other than trading 177,353 237,156 Cash collateral paid for financial instruments 2,205,844 2,391,627 Other 1,716,724 1,701,355 Tangible fixed assets 191,678 175,851 Buildings 66,264 62,499 Land 63,720 63,407 Construction in progress 64 62 Other 61,629 49,882 Intangible fixed assets 101,053 97,367 Software 67,136 78,272 Other 33,916 19,094 Prepaid pension costs 4,107 10,960 Deferred tax assets 440,981 496,707 Reserve for possible loan losses (1,043) (1,214) Total assets 233,547,839 226,503,549 - 71 -
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(Millions of yen) As of March 31, 2025 As of March 31, 2026 Liabilities: Deposits 190,465,032 186,113,094 Transfer deposits 12,166,082 11,877,911 Ordinary deposits 112,670,829 112,175,379 Savings deposits 840,749 809,182 Time deposits 8,601,820 10,290,352 Special deposits 321,067 275,183 TEIGAKU deposits 55,722,082 50,560,617 Other deposits 142,399 124,467 Payables under repurchase agreements 26,985,038 22,517,468 Payables under securities lending transactions 2,004,678 2,433,717 Borrowed money 2,510,100 2,819,400 Borrowings 2,510,100 2,819,400 Foreign exchanges 924 939 Foreign bills payable 924 939 Other liabilities 2,494,629 3,380,399 Domestic exchange settlement accounts - credit 53,430 50,118 Income taxes payable 47,191 67,583 Accrued expenses 218,120 313,849 Unearned income 28,540 28,308 Derivatives other than trading 1,984,601 2,640,281 Cash collateral received for financial instruments 81 — Lease obligations — 1,057 Asset retirement obligations 40 57 Other 162,623 279,143 Reserve for bonuses 7,253 7,519 Reserve for bonuses for management board 183 183 Reserve for employee stock ownership plan trust 414 432 Reserve for management board benefit trust 630 732 Reserve for reimbursement of deposits 42,534 39,607 Total liabilities 224,511,418 217,313,495 Net assets: Capital stock 3,500,000 3,500,000 Capital surplus 3,500,000 3,500,000 Legal capital surplus 3,500,000 3,500,000 Retained earnings 2,777,217 3,057,327 Other retained earnings 2,777,217 3,057,327 Retained earnings brought forward 2,777,217 3,057,327 Treasury stock (6,384) (31,485) Total shareholders’ equity 9,770,832 10,025,842 Net unrealized gains (losses) on available-for- sale securities 392,541 628,489 Net deferred gains (losses) on hedges (1,126,952) (1,464,276) Total valuation and translation adjustments (734,411) (835,787) Total net assets 9,036,421 9,190,054 Total liabilities and net assets 233,547,839 226,503,549 - 72 -
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(2) Non-Consolidated Statements of Income (Unaudited) (Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Ordinary income 2,509,855 2,840,757 Interest income 1,750,285 2,266,821 Interest on loans 12,140 23,864 Interest and dividends on securities 1,555,220 1,856,819 Interest on call loans 5,756 10,411 Interest on receivables under resale agreements 8,609 32,599 Interest on receivables under securities borrowing transactions 568 — Interest on deposits with banks 149,801 318,724 Other interest income 18,190 24,401 Fees and commissions 184,109 195,717 Fees and commissions on domestic and foreign exchanges 91,192 101,746 Other fees and commissions 92,917 93,970 Other operating income 3,157 3,222 Gains on sales of bonds 2,993 3,007 Income from derivatives other than for trading or hedging 164 214 Other ordinary income 572,302 374,996 Reversal of reserve for possible loan losses 16 — Recoveries of written-off claims 15 15 Gains on sales of stocks and other securities 82,829 97,079 Gains on money held in trust 460,912 225,659 Other 28,529 52,242 - 73 -
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(Millions of yen) For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 Ordinary expenses 1,936,343 2,092,681 Interest expenses 813,244 988,450 Interest on deposits 104,253 313,418 Interest on payables under repurchase agreements 332,517 304,246 Interest on payables under securities lending transactions 117,323 94,284 Interest on borrowings 2,713 8,292 Interest on interest rate swaps 254,005 266,830 Other interest expenses 2,431 1,377 Fees and commissions 29,237 30,010 Fees and commissions on domestic and foreign exchanges 3,715 4,105 Other fees and commissions 25,521 25,904 Other operating expenses 71,571 75,787 Losses on foreign exchanges 69,781 66,091 Losses on sales of bonds 1,789 9,695 General and administrative expenses 911,511 941,089 Other ordinary expenses 110,779 57,342 Provision for reserve for possible loan losses — 180 Losses on sales of stocks and other securities 96,703 49,004 Losses on devaluation of stocks and other securities — 162 Losses on money held in trust 9,378 2,005 Other 4,697 5,990 Net ordinary income 573,511 748,076 Extraordinary loss 351 1,236 Losses on sales and disposals of fixed assets 348 595 Losses on impairment of fixed assets 3 640 Income before income taxes 573,159 746,840 Income taxes—current 167,730 228,297 Income taxes—deferred (5,128) (10,433) Total income taxes 162,602 217,863 Net income 410,557 528,976 - 74 -
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(3) Non-Consolidated Statements of Changes in Net Assets (Unaudited) For the fiscal year ended March 31, 2025 (Millions of yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Legal capital surplus Other capital surplus Total capital surplus Other retained earnings Retained earnings brought forward Balance at the beginning of the fiscal year 3,500,000 3,500,000 ― 3,500,000 2,571,077 Cumulative effects of changes in accounting policies 47 Restated balance 3,500,000 3,500,000 ― 3,500,000 2,571,125 Changes during the fiscal year Cash dividends (184,494) Net income 410,557 Repurchase of treasury stock Disposal of treasury stock 0 0 Cancellation of treasury stock (19,971) (19,971) Transfer from retained earnings to capital surplus 19,971 19,971 (19,971) Net changes in items other than shareholders’ equity Total changes during the fiscal year ― ― ― ― 206,091 Balance at the end of the fiscal year 3,500,000 3,500,000 ― 3,500,000 2,777,217 - 75 -
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Shareholders’ equity Valuation and translation adjustments Total net assets Treasury stock Total shareholders’ equity Net unrealized gains (losses) on available-for- sale securities Net deferred gains (losses) on hedges Total valuation and translation adjustments Balance at the beginning of the fiscal year (1,523) 9,569,554 1,357,803 (1,266,085) 91,718 9,661,272 Cumulative effects of changes in accounting policies 47 (47) (47) ― Restated balance (1,523) 9,569,601 1,357,803 (1,266,133) 91,670 9,661,272 Changes during the fiscal year Cash dividends (184,494) (184,494) Net income 410,557 410,557 Repurchase of treasury stock (25,206) (25,206) (25,206) Disposal of treasury stock 373 373 373 Cancellation of treasury stock 19,971 ― ― Transfer from retained earnings to capital surplus ― ― Net changes in items other than shareholders’ equity (965,262) 139,180 (826,082) (826,082) Total changes during the fiscal year (4,861) 201,230 (965,262) 139,180 (826,082) (624,851) Balance at the end of the fiscal year (6,384) 9,770,832 392,541 (1,126,952) (734,411) 9,036,421 - 76 -
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For the fiscal year ended March 31, 2026 (Millions of yen) Shareholders’ equity Capital stock Capital surplus Retained earnings Legal capital surplus Other capital surplus Total capital surplus Other retained earnings Retained earnings brought forward Balance at the beginning of the fiscal year 3,500,000 3,500,000 ― 3,500,000 2,777,217 Cumulative effects of changes in accounting policies Restated balance 3,500,000 3,500,000 ― 3,500,000 2,777,217 Changes during the fiscal year Cash dividends (208,859) Net income 528,976 Repurchase of treasury stock Disposal of treasury stock 0 0 Cancellation of treasury stock (40,006) (40,006) Transfer from retained earnings to capital surplus 40,006 40,006 (40,006) Net changes in items other than shareholders’ equity Total changes during the fiscal year ― ― ― ― 280,110 Balance at the end of the fiscal year 3,500,000 3,500,000 ― 3,500,000 3,057,327 - 77 -
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Shareholders’ equity Valuation and translation adjustments Total net assets Treasury stock Total shareholders’ equity Net unrealized gains (losses) on available-for- sale securities Net deferred gains (losses) on hedges Total valuation and translation adjustments Balance at the beginning of the fiscal year (6,384) 9,770,832 392,541 (1,126,952) (734,411) 9,036,421 Cumulative effects of changes in accounting policies ― ― ― Restated balance (6,384) 9,770,832 392,541 (1,126,952) (734,411) 9,036,421 Changes during the fiscal year Cash dividends (208,859) (208,859) Net income 528,976 528,976 Repurchase of treasury stock (65,368) (65,368) (65,368) Disposal of treasury stock 260 260 260 Cancellation of treasury stock 40,006 ― ― Transfer from retained earnings to capital surplus ― ― Net changes in items other than shareholders’ equity 235,947 (337,324) (101,376) (101,376) Total changes during the fiscal year (25,100) 255,009 235,947 (337,324) (101,376) 153,633 Balance at the end of the fiscal year (31,485) 10,025,842 628,489 (1,464,276) (835,787) 9,190,054 - 78 -