UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May, 2004
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MITSUBISHI TOKYO FINANCIAL GROUP, INC.
(Translation of registrant's name into English)
4-1, Marunouchi 2-chome, Chiyoda-ku
Tokyo 100-6326, Japan
(Address of principal executive offices)
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[Indicate by check mark whether the registrant files or
will file annual reports under cover Form 20-F or Form 40-F.]
Form 20-F __X__ Form 40-F _____
[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.]
Yes ____ No __X__
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 24, 2004
MITSUBISHI TOKYO FINANCIAL GROUP, INC.
By: /s/ Atsushi Inamura
-------------------------------------
Name: Atsushi Inamura
Title: Chief Manager, General Affairs
Corporate Administration Division
Consolidated Summary Report
[under Japanese GAAP]
for the Fiscal Year Ended March 31, 2004
Date: May 24, 2004
Company name (code number): Mitsubishi Tokyo Financial Group, Inc.
(8306) (URL http://www.mtfg.co.jp)
Stock exchange listings: Tokyo, Osaka, New York, London
Headquarters: Tokyo
Representative: Shigemitsu Miki, President & CEO
For inquiry: Katsuhiko Ishizuka, Chief Manager -
Financial Policy Division
(Phone) +81-3-3240-8211
Date of resolution of Board of Directors
with respect to the consolidated
financial statements: May 24, 2004
Trading accounts: Established
1. Consolidated financial data for the year ended March 31, 2004
(1) Operating results
(in millions of yen
except per share data
and percentages)
-----------------------------------------------------------------------------
For the year ended
March 31,
-----------------------
2004 2003
-----------------------------------------------------------------------------
Ordinary income 2,555,183 2,772,528
Change from the previous year (7.8)% (15.0)%
Ordinary profit (loss) 578,371 (360,262)
Change from the previous year -- --
Net income (loss) 560,815 (161,495)
Change from the previous year -- --
Net income (loss) per common share 87,156.63 (30,238.64)
Net income per common and common
equivalent share 85,017.34 --
Net income (loss) as a percentage of
shareholders' equity 16.7% (6.2)%
Ordinary profit (loss) as a percentage of
total liabilities, minority interest and
shareholders' equity 0.6% (0.4)%
Ordinary profit (loss) as a percentage of
ordinary income 22.6% (13.0)%
-----------------------------------------------------------------------------
Notes:
1. Equity in earnings (loss) of affiliates for the year ended:
March 31, 2004: 3,595 million yen
March 31, 2003: (3,532) million yen
2. Average number of shares outstanding for the year ended:
March 31, 2004: (common stock) 6,349,929 shares
(preferred stock-class 1) 81,022 shares
(preferred stock-class 2) 58,039 shares
March 31, 2003: (common stock) 5,616,357 shares
(preferred stock-class 1) 81,021 shares
(preferred stock-class 2) 100,000 shares
3. Changes in accounting policy: Yes (See Notes to Consolidated Financial
Statements.)
- 1 -
(2) Financial Condition
(in millions of yen
except per share data
and percentages)
----------------------------------------------------------------------------
As of March 31,
-------------------------
2004 2003
----------------------------------------------------------------------------
Total assets 106,615,487 99,175,319
Shareholders' equity 4,295,243 3,046,420
Shareholders' equity as a percentage of
total liabilities, minority interest and
shareholders' equity 4.0% 3.1%
Shareholders' equity per common share 620,797.48 417,951.31
Risk-adjusted capital ratio (based on the
standards of the Bank for (preliminary
basis)
International Settlements, the "BIS") 12.95% 10.84%
----------------------------------------------------------------------------
Note:
Number of shares outstanding as of:
March 31, 2004: (common stock) 6,473,306 shares
(preferred stock-class 1) 81,022 shares
(preferred stock-class 2) 15,000 shares
March 31, 2003: (common stock) 6,228,850 shares
(preferred stock-class 1) 81,021 shares
(preferred stock-class 2) 100,000 shares
(3) Cash flows
(in millions of yen)
-----------------------------------------------------------------------------
For the year ended
March 31,
-----------------------
2004 2003
-----------------------------------------------------------------------------
Net cash provided by (used in) operating activities 2,999,790 4,636,714
Net cash provided by (used in) investing activities (3,893,910) (2,124,823)
Net cash provided by (used in) financing activities (71,269) (186,820)
Cash and cash equivalents at end of fiscal year 3,034,525 4,049,530
-----------------------------------------------------------------------------
(4) Scope of consolidation and application of the equity method
Consolidated subsidiaries: 152 Affiliated companies
accounted for by the equity
method: 24
(5) Change in the scope of consolidation and application of the equity method
Consolidated subsidiaries: Newly included: 0 Excluded: 32
Affiliated companies accounted for by the
equity method: Newly included: 0 Excluded: 7
2. Earning projections for the fiscal year ending March 31, 2005
(in millions of yen)
--------------------------------------------------------------------------------
Ordinary income Ordinary profit Net income
--------------------------------------------------------------------------------
For the six months ending September
30, 2004 1,220,000 310,000 170,000
For the year ending March
31, 2005 2,450,000 640,000 340,000
--------------------------------------------------------------------------------
Projected net income per common share for the year
ending March 31, 2005 (yen): 51,448.44
- 2 -
(Reference)
Formulas for computing ratios for the fiscal year ended March 31, 2004 are as
follows.
Net income per common share
Net income - (Total dividends on preferred stock + Bonus paid to director)
--------------------------------------------------------------------------
Average number of common stock for the fiscal year *
Net income per common and common equivalent share
Net income - (Total dividends on preferred stock + Bonus paid to director)
+ Adjustments in net income
--------------------------------------------------------------------------------
Average number of common stock for the fiscal year * + Common equivalent share
Net income as a percentage of shareholders' equity
Net income - (Total dividends on preferred stock + Bonus paid to director)
-------------------------------------------------------------------------- X 100
{[Shareholders' equity at the beginning of the fiscal year - Number of
preferred stock at the beginning of the fiscal year X Issue price]
+ [Shareholders' equity at fiscal year end - Number of preferred stock
at fiscal year end X Issue price]} / 2
Shareholders' equity per common share
Shareholders' equity at fiscal year end - Deduction from shareholders' equity**
--------------------------------------------------------------------------------
Number of common stock at fiscal year end *
Formula for computing projected earning ratio for the fiscal year ending March
31, 2005 is as follows.
Projected net income per common share
Projected net income - Projected total dividends on preferred stock
-------------------------------------------------------------------
Number of common stock at fiscal year end *
* excluding treasury stock
**number of preferred stock at fiscal year end X issue price + total dividends
on preferred stock
--------------------------------------------------------------------------------
This financial summary report and the accompanying financial highlights contain
forward-looking statements and other forward-looking information relating to the
company and/or the group as a whole (the "forward-looking statements"). The
forward-looking statements are not historical facts and include, reflect or are
otherwise based upon, among other things, the company's current estimations,
projections, views, policies, business strategies, targets, expectations,
assumptions and evaluations with respect to general economic conditions, its
results of operations, its financial condition, its management in general and
other future events. Accordingly, they are inherently susceptible to
uncertainties, risks and changes in circumstances and are not guarantees of
future performance.
Some forward-looking statements represent targets that the company's management
will strive to achieve through the successful implementation of the company's
business strategies. The company may not be successful in implementing its
business strategy, and actual results may differ materially, for a wide range of
possible reasons. Other forward-looking statements reflect the assumptions and
estimations upon which the calculation of deferred tax assets has been based and
are themselves subject to the full range of uncertainties, risks and changes in
circumstances outlined above.
In light of the many risks, uncertainties and possible changes, you are advised
not to put undue reliance on the forward-looking statements. The company is
under no obligation - and expressly disclaims any obligation - to update or
alter the forward-looking statements, except as may be required by any
applicable laws and regulations or stock exchange rules.
For detailed information relating to uncertainties, risks and changes regarding
the forward-looking statements, please see the company's latest annual report
and other disclosures.
--------------------------------------------------------------------------------
- 3 -
1. Information on the Company
The Company is engaged primarily in the banking business and also conducts trust
business, securities business, asset management business and other related
financial businesses.
The following is an illustration of Company's corporate governance structure and
major subsidiaries as of March 31, 2004. Following the introduction of the
integrated business group system on April 1, 2004 there have been changes to the
organization of this structure, and these are illustrated on the following page.
[March 31, 2004]
[FLOW CHART APPEARS HERE]
- 4 -
[April 1, 2004]
[FLOW CHART APPEARS HERE]
- 5 -
2. Management Policy
(1) Principal management policy
The Company's management philosophy set forth below represents the core set
of principles that forms the foundation for our strategies and
decision-making process.
[Group Management Philosophy]
Founded on the key principles of trust and reliability,
Mitsubishi Tokyo Financial Group
contributes to the prosperity of its customers at home and abroad
and of the communities it serves, and
continuously creates social and economic value,
by providing comprehensive financial services.
(2) Basic policy regarding profit distribution
Given the public nature of a bank holding company, it is the Company's policy to
endeavor to maintain stable dividends and bolster its corporate constitution and
continue sound management by improving the Company group's overall strength. For
the fiscal year ended March 31, 2004, the Company plans to pay year-end
dividends of (Y)6,000 per share for common stock, (Y)41,250 per share for class
1 preferred stock (which, together with the interim dividend, shall result in a
total of (Y)82,500 per share for the fiscal year ended March 31, 2004) and
(Y)8,100 per share for class 2 preferred stock (which, together with the interim
dividend, shall result in a total of (Y)16,200 per share for the fiscal year
ended March 31, 2004).
(3) Basic policy relating to the possible lowering of the minimum investment
amount
With regard to the possible lowering of the minimum investment amount of the
Company's common stock, the Company does not believe that it needs to make any
actions immediately, after taking into account such factors as the stock price,
the number of shareholders, liquidity issues and the transaction costs and
potential benefits. The Company, however, will continue to consider, as
appropriate, the possibility of lowering the minimum investment amount, taking
into account the investors' needs and the factors described above.
(4) Management target/1/
The company has set the following management targets for the fiscal year ending
March 31, 2007:
.. The company aims to achieve consolidated net business profits before credit
costs for trust account and provision for formula allowance for loan losses
of approximately (Y)1,270 billion,
.. The company aims to achieve a consolidated net income of approximately (Y)600
billion,
.. The company strives toward efficient management of capital, setting a target
ROE/2/ of around 14%, and
.. The company strives to toward reduction of expenses, setting a target
consolidated expense ratio of around 45%.
Note 1) The assumptions for these targets are: in the year ending march 31,
2007, the euro-yen rate (3 months) of 0.5% (period average), Japanese yen-US
dollar exchange rate of (Y)105 at the end of the period and actual GDP growth
rate of 2.8%.
- 6 -
Note 2) ROE shall be calculated as follows:
Consolidated net income - Dividends on non-convertible preferred stock X 100
--------------------------------------------------------------------------
{(Consolidated shareholders' equity at the beginning of period - Number of
outstanding shares of non-convertible preferred stock at the beginning of period
x Issued price - Land revaluation excess at the beginning of period - Unrealized
gains (losses) on securities available for sale at the beginning of period) +
(Consolidated shareholders' equity at the end of period - Number of outstanding
shares of non-convertible preferred stock at the end of period X Issued price -
Land revaluation excess at the end of period - Unrealized gains (losses) on
securities available for sale at the end of period)}/ 2
(5) Medium term management strategy
MTFG has drawn up a new 3-year plan, "First Medium-Term Strategic Plan" and
"Medium-Term Business Plan (2004)" that will begin from fiscal 2004, and
has set an aspiration of becoming one of the world's top ten financial
institutions by market capitalization.
To realize this aspiration, on April 1, 2004 we introduced an integrated
business group system comprising three core business areas: Retail,
Corporate, and Trust Assets (Asset Management and Administration). These
three businesses will also be the Group's core sources of net operating
profit. In addition, the role of the holding company has shifted from
strategic coordination to integrated strategic management. As such,
Groupwide strategy will be decided by the holding company and executed by
Group companies.
Outline of the business strategies that will be pursued under this new
structure is as follows.
(1) Enhancing corporate value
First, we aim to reduce the overlap of functions within the Group, and
pursue efficiency and the benefits associated with our scale as a
Group. Second, through the integration of our diverse banking, trust
and securities functions we aim to deliver a diversity of products and
services to our customers as an integrated Group. Third, in pursuit of
integration synergies we will create and develop new services and
channels. Through these three value-creating initiatives we aim to
achieve a radical increase in gross profits while also controlling
expenses.
(2) Delivering value to customers and to society
The entire Group will be thoroughly customer focused. We intend to
shift the axis of our approach to focus on customer needs rather than
business type, and to actively approach customers in order to
actualize their latent needs. By delivering services that integrate
the specialized functions of banking, trust and securities we aim to
fulfill the true needs of our customers. In these ways we intend to
foster a deep sense of trust in MTFG and to further raise our brand
value as a comprehensive financial services provider that contributes
to the creation of value by its customers.
Furthermore, we reaffirm our commitment to contribute to the
prosperity of our customers at home and abroad and of the communities
we serve, and to continuously create social and economic value, as
described in our Group management philosophy. A commitment to provide
a better society and environment for future generations is part of our
corporate social responsibility, and we aim to achieve sustainable
growth in our corporate value by enhancing the appreciation of our
Group among customers, shareholders and other stakeholders over the
medium and long term.
(3) Pursuing enhanced business efficiency and soundness, and building a
robust management structure
The business resources released through this integration will be
injected into growth areas such as our retail and trust assets
businesses, and we will implement a focused allocation of our business
resources in pursuit of business efficiency on a Group consolidated
basis. In addition we aim to further enhance our financial strength by
continuing to dispose of non-performing loans and reduce our equity
portfolio.
- 7 -
(6) Issues facing the company
MTFG aims to build a robust management structure appropriate for a
financial institution that aims to join the global top ten. Based on our
business strategy outlined above we intend to move rapidly to deal with key
business issues. For example, in our retail business we will significantly
increase the number of sales managers as we aim for a major increase in our
marketing strength. Matching the needs of our customers at various life
stages we are developing a life cycle model that aims to deliver high
quality financial services to our customers in a wide variety of fields
including asset management and administration, loans, and settlement. At
the same time we are actively seeking to develop new, profitable
opportunities.
In our corporate business with large listed companies we are aiming to grow
profits from investment banking, trust assets business and securities by
raising our proposal strength and product competitiveness. In respect of
medium-sized clients we are not limiting our approach just to traditional
lending business but are actively approaching clients for investment
banking business such as securitization. In respect of small to
medium-sized clients we are strengthening our line up of lending products
as we aim to expand our business base.
In our trust assets business (asset management and administration) we are
joining together as a group to utilize existing infrastructure, jointly use
back office and IT systems and rapidly realize cost reductions. Through
pursuit of a unified strategy we aim to increase the satisfaction of
customers while confirming our status as a top-class domestic financial
group.
In terms of internal controls we are formulating an appropriate response to
the new BIS capital adequacy regulations and Section 404 of the
Sarbanes-Oxley Act (Appraisal of internal controls on financial reporting)
to further strengthen our management structure.
In these ways MTFG will actively pursue its integrated Group strategy. We
aim to enhance our own corporate value by mobilizing the comprehensive
strengths of the Group to meet the diversifying and increasingly
sophisticated needs of customers, while expanding our solid income base and
strengthening our competitiveness.
(7) Corporate governance principles and status of implementation of corporate
governance changes
[Corporate Governance Principles]
The "Group Management Philosophy" is the basic policy for forming
management strategies and all activities relating to the business decisions
the Company makes. The Company also established the "MTFG Code of Ethics"
which is a set of common values and ethical principles to be shared by the
employees of the Company. The Company is committed to improving the
corporate governance structure through the implementation of the "Group
Management Philosophy" and "MTFG Code of Ethics."
[MTFG Code of Ethics]
. Establishment of Trust
Fully cognizant of the importance of the Group's social responsibilities
and public role, we strive to maintain unwavering trust from society
through the sound and proper management of our business activities,
based on the principle of accountability.
. Serving Our Clients First
We recognize that the satisfaction of our clients and their confidence
in MTFG form the foundation of the Group's very existence. As such, we
endeavor to always provide our clients with the highest quality products
and services best suited to their needs.
. Sound and Transparent Management
We endeavor to manage our affairs in a sound and transparent manner by
maintaining appropriate and balanced relationships with all
stakeholders, including clients, shareholders and others, while assuring
fair, adequate and timely disclosure of corporate information.
. Strict Observance of Laws, Regulations, and Internal Rules
We are committed to strictly observing relevant laws, regulations, and
internal rules and to acting with fairness and integrity in conformity
with the common values of society at large. As a diversified global
financial services group, we also make continuous efforts to operate in
ways that reflect internationally accepted standards.
. Respect for Human Rights and the Environment
We respect human rights and the environment and seek to co-exist in
harmony with society.
. Disavowal of Anti-Social Elements
We stand firmly against supporting the activities of any group or
individual that unlawfully threatens public order and safety.
- 8 -
[Status of Implementation of Corporate Governance Changes]
i. Corporate governance structures for decision making, administration and
supervision
The Board of Directors of the Company is comprised of eleven directors, two
of whom are outside directors. The Board of Directors decides the
administration of affairs of the Company and supervises execution of duties
of the officers.
The Company has a Board of Corporate Auditors pursuant to the Japanese
Commercial Code. The Board of Corporate Auditors of the Company is
comprised of four corporate auditors, two of whom are from outside the
Company. Pursuant to the audit policies and plans adopted by the Board of
Corporate Auditors, each corporate auditor oversees the execution of duties
by the officers by attending meetings, including the Board of Directors
meetings, and by reviewing business performance and financial conditions of
the Company.
Corporate Administration Division provides staffing support to all
directors and corporate auditors, including the outside directors and
outside corporate auditors.
In order to clearly separate the functions of the oversight of business and
the execution of business and so enhance our corporate governance, an
executive officer system has been introduced along with the integrated
business group system on April 1, 2004. The Heads and Deputy Heads of the
integrated business groups and heads of the major lines are to be executive
officers, and the seven senior executive officers and eight executive
officers engage in executing business as decided by the Board of Directors.
Pursuant to the basic policies adopted by the Board of Directors, the
Executive Committee comprised of seven members, the Chairman, President,
Deputy President, two Senior Managing Directors and two directors whom
President designates, deliberates on and decides important management
affairs of the Company.
The Company has also set up various committees, including the following
committees and a meeting that serve as advisory bodies to the Executive
Committee, the Compliance Advisory Committee comprised of external lawyers
and accountants and the Advisory Board comprised of outside experts.
. Management Planning Committee: The Management Planning Committee
deliberates on and follows up on overall group policies, capital
policies and financial planning. The committee convenes on a quarterly
basis.
. Audit & Compliance Committee: The Audit & Compliance Committee
deliberates on important matters relating to internal audits and legal
compliance. The committee convenes on a quarterly basis.
. Disclosure Committee: The Disclosure Committee deliberates on the
accuracy of disclosure and internal disclosure standards of the Company.
The committee convenes at least four times a year.
. Personnel Committee: The Personnel Committee deliberates with respect to
personnel measure necessary to the management of the integrated business
system. The committee convenes as needed.
. Operation & Systems Integration Committee: The Operation & Systems
Integration Committee deliberates on the integration of Group back
office and IT systems. The committee convenes semi-annually.
. Corporate Risk Management Committee: The Corporate Risk Management
Committee deliberates on important matter relating to various risks
comprehensively across the entire Group. The committee convenes on a
quarterly basis.
. Credit & Investment Committee: The Credit & Investment Committee
deliberates on important aspects of credit risk management across the
entire Group. The committee convenes semi-annually.
. Asset & Liability Management Committee: The Asset & Liability Management
Committee deliberates on important aspects of investment and funding
activities across the entire Group. The committee convenes
semi-annually.
. Corporate Policy Meeting: The Corporate Policy Meeting deliberate and
exchange opinions from a broad perspective on fundamental policy with
respect to matters of major importance regarding the integrated
management and integrated business of the group. The meeting convenes as
needed.
. Compliance Advisory Committee: The Compliance Advisory Committee makes
compliance related proposals and advice to the Board to improve the
effectiveness of the Company's compliance activities from an independent
standpoint. The committee convenes on a quarterly basis.
. Advisory Board: The Advisory Board advises the Executive Committee on
all aspects of management from an independent standpoint. The meeting
convenes semi-annually.
- 9 -
Incidentally, major committees, etc. which were already abolished at
present on May 24, 2004 is as follows.
. Strategy Council: Strategy Council deliberates and makes decision on the
significant affairs and policies to restructure the business model of
the entire group. (It made accede to a feature to the Executive
Committee and was abolished on March 31, 2004.)
. Business Planning Committee: The Business Planning Committee deliberates
on general management affairs and important issues related to business
operations of the Company. (It made accede to a feature to Corporate
Policy Meeting and was abolished on March 31, 2004.)
. Corporate Risk Management Committee: The Corporate Risk Management
Committee deliberates on important matters relating to risk management
of the Company. (It made accede to a feature to the new Corporate Risk
Management Committee and the Credit & Investment Committee and was
abolished on April 30, 2004.)
The Company's framework of operation and audit and the framework of
internal control are as follows:
[FLOW CHART APPEARS HERE]
The Company receives advice from external lawyers and accountants, if
needed for execution of duties.
ii. Summary of related party transactions between the company and outside
corporate auditors and outside directors
The outside directors and outside corporate auditors have no personal ties
with other directors and corporate auditors, and do not have related party
transactions which are material or that are unusual in their nature or
conditions with the Company.
Ryotaro Kaneko, an outside director, also serves as President of Meiji
Yasuda Life Insurance Company, with which the Company has a business
relationship. Kunio Ishihara, an outside director, also serves as President
of Tokio Marine & Fire Insurance Co., Ltd., with which the Company has a
business relationship.
- 10 -
iii. Implementation of measures to strengthen the corporate governance structure
in the fiscal year ended March 2004
In order to clearly separate the functions of the oversight of business and
the execution of business and so enhance our corporate governance, an
executive officer system has been introduced along with the integrated
business group system on April 1, 2004.
During fiscal year 2003, the Board of Directors met 15 times to decide the
administration of affairs, and the Executive Committee met 40 times to
deliberate on and decide important management affairs.
The Board of Corporate Auditors met 19 times and decided audit policies and
plans for the fiscal year. Pursuant to the audit policies and plans, each
corporate auditor oversaw the execution of duties by the officers by
attending key meetings, including the Board of Directors meetings, and by
reviewing the business performance and financial conditions of the Company.
The Strategy Council met 50 times, the Management Planning Committee met 4
times, and the Business Planning Committee met twice during fiscal year
2003, and the Corporate Risk Management Committee and the Audit &
Compliance Committee met 4 times respectively and the Disclosure Committee
met 6 times. The Compliance Advisory Committee met 4 times and advised and
made proposals to the Board. The Advisory Board met 3 times and advised the
Executive Committee.
During fiscal year 2003, the Company took active steps with respect to the
disclosure of corporate information, including public disclosure of
quarterly financial information which started in July, 2002, issuance of
"Mini-Disclosure 2003" reports for individual customers, and disclosure of
corporate information of the Company on its website.
3. Results of Operations and Financial Condition
(1) Results of operations
With respect to the financial and economic environment for the fiscal year ended
March 31, 2004, in the beginning of the fiscal year, the growth of the overseas
economies slowed down due to the war in Iraq and the outbreak of the SARS
epidemic. After these events, however, the overseas economies moved toward
recovery, particularly in the United States which implemented a large-scale tax
reduction and in the Peoples' Republic of China where domestic demand continued
to increase. The Japanese economy continued to recover as exports and capital
expenditures increased due to a recovery in overseas demand, and conditions of
employment and personal income showed signs of improvement.
Prices of domestic corporate goods along with consumer prices for the fiscal
year ended March 31, 2004 recovered to approximately the same level as the
previous fiscal year. This was due in part to a rise in prices of raw materials
resulting from a recovery in global demand and a rise of rice prices resulting
from a cold summer in Japan.
Regarding the financial environment, in the United States, the federal fund rate
was lowered from 1.25% to 1.00% in June 2003. In the EU, the European Central
Bank's policy rate was reduced from 2.5% to 2.0%. In Japan, the Bank of Japan
continued to further strengthen its current "easy monetary policy," and the
short-term interest rate remained at near zero percent. The long-term interest
rate reached a record low in June 2003 and then rose by a large margin. The
recovery of the domestic stock prices was prominent, exemplified by the rise of
the Nikkei Stock Average by approximately 47% during the fiscal year ended March
31, 2004. The yen value fell against the U.S. dollar at one time toward the end
of the fiscal year ended March 31, 2004, but the yen generally appreciated
throughout the fiscal year.
Amidst this environment, a net income increased by (Y)722.3 billion from a net
loss of (Y)161.4 billion for the fiscal year ended March 31, 2003 to a net
income of (Y)560.8 billion for the fiscal year ended March 31, 2004. This
increase was primarily due to the following factors.
- 11 -
The first factor was a (Y)28.8 billion increase in net business profits before
credit costs for trust accounts and provision for formula allowance for loan
losses from (Y)764.2 billion for the fiscal year ended March 31, 2003 to
(Y)793.1 billion for the fiscal year ended March 31, 2004.
The second factor was a (Y)611.7 billion decrease in total credit costs from
(Y)538.7 billion for the fiscal year ended March 31, 2003 to (Y)72.9 billion
reversal of total credit costs for the fiscal year ended March 31, 2004.
The third factor was an improvement in net gains (losses) on equity securities.
For the fiscal year ended March 31, 2004, net gains on equity securities was
(Y)3.3 billion compared to net losses on equity securities of (Y)488.0 billion
for the fiscal year ended March 31, 2003.
In addition, special gains of (Y)41.9 billion refunded enterprise taxes by the
Tokyo Metropolitan Government and special gains of (Y)26.5 billion resulting
from gains on transfer of the substitutional portion of future pension
obligations were recorded for the fiscal year ended March 31, 2004. Impairment
losses of (Y)21.5 billion were recorded as special losses for the fiscal year
ended March 31, 2004. The Company applied "Accounting Standards for Impairment
of Fixed Assets" at early stage for the fiscal year ended March 31, 2004.
Ordinary profit by business segment was; (Y)391.8 billion for the banking
segment, (Y)130.9 billion for the trust banking segment and (Y)43.8 billion for
the securities segment. Ordinary profit (loss) by geographic segment was;
(Y)385.6 billion in Japan, (Y)136.6 billion in North America, (Y)52.7 billion in
Europe and the Middle East, (Y)29.7 billion in Asia and Oceania excluding Japan,
respectively, and ordinary loss of (Y)5.9 billion in Latin America.
---------------------------------------------------------------------
Consolidated ordinary Consolidated ordinary
income profit Consolidated net income
---------------------------------------------------------------------
(Y)2,450,000 million (Y)640,000 million (Y)340,000 million
---------------------------------------------------------------------
(Reference)
1. Projected net income per common share (consolidated) (Y) 51,448.44
2. Projected net income per common share (non-consolidated) (Y) 27,191.91
3. Projected dividend per share (non-consolidated) Common stock (Y) 6,000
Preferred stock-class1 (Y) 82,500
Preferred stock-class2 (Y) 16,200
The Company's business and results of operations may be materially affected for
a wide range of possible reasons (which may include those material to
investors), including:
.. Deterioration of economic conditions in Japan or elsewhere in the world
(especially in Asian and Latin American countries);
.. Increase of problem loans and credit-related expenses;
.. Possible negative effects to our equity portfolio;
.. Inability to maintain BIS capital ratios above minimum levels;
.. Risks relating to trading and investment activities;
.. Changes in interest rates in Japan or elsewhere in the world;
.. Fluctuations in foreign currency exchange rates;
.. Downgrade of the Company's credit ratings and the negative effect on the
Company's treasury operations;
.. Ineffectiveness or failure of the Company's business strategies;
.. Risks accompanying the expansion of the Company's operation and the range of
products and services;
.. Decline in the results of operations and financial conditions of the
Company's subsidiaries;
.. Disruption or impairment of the Company's business or operations due to
external circumstances or events (such as the destruction or impairment of
the Company's business sites and terrorist attacks);
- 12 -
.. Risks relating to the increase of the Company's pension obligations;
.. Events that obligate the Company to compensate for losses in loan trusts and
jointly operated designated money in trusts;
.. Risks relating to the Company's capabilities to protect confidential
information;
.. Risks inherent in the Company's holding company structure;
.. Risks relating to regulatory developments or changes in laws, rules,
including accounting rules, governmental policies and economic controls;
.. Increase in competitive pressures; and
.. Possible negative effects related to owning our shares.
For a detailed discussion of these risks and other risks, please see the
Company's public filings.
(2) Financial condition
Loans and bills discounted decreased by (Y)360.2 billion from (Y)46,950.3
billion at March 31, 2003 to (Y)46,590.1 billion at March 31, 2004. This change
consisted mainly of an increase of (Y)905.1 billion in domestic loans, a
decrease of (Y)1,142.4 billion in loans made by overseas branches, a decrease of
(Y)636.0 billion in loans made by overseas subsidiaries (UnionBanCal
Corporation, Bank of Tokyo-Mitsubishi Trust Company and Bank of Tokyo-Mitsubishi
(Australia) Ltd.), and an increase of (Y)714.2 billion in domestic hosing loans.
Investment securities increased by (Y)4,171.2 billion from (Y)24,158.3 billion
at March 31, 2003 to (Y)28,329.5 billion at March 31, 2004.
Total shareholders' equity increased by (Y)1,248.8 billion from (Y)3,046.4
billion at March 31, 2003 to (Y)4,295.2 billion at March 31, 2004.
For the fiscal year ended March 31, 2004, net cash provided by operating
activities were (Y)2,999.7 billion, net cash used in investing activities were
(Y)3,893.9 billion and net cash used in financing activities were (Y)71.2
billion. As a result, the balance of cash and cash equivalents at March 31, 2004
was (Y)3,034.5 billion.
The Company's consolidated risk adjusted capital ratio (based on the standards
of the BIS) was 12.95% at March 31, 2004.
The following table shows the Company's consolidated risk adjusted capital ratio
at March 31, 2003, September 30, 2003 and March 31, 2004.
(in billions except for percentages)
---------------------------------------------------------------------------------------------------
At March 31, At September 30, At March 31, 2004
2003 2003 (Preliminary basis)
---------------------------------------------------------------------------------------------------
Tier I capital (Y) 3,128.6 (Y) 3,683.7 (Y) 3,859.4
---------------------------------------------------------------------------------------------------
Tier II capital (Y) 2,847.6 (Y) 3,127.2 (Y) 3,157.8
---------------------------------------------------------------------------------------------------
Tier III capital (Y) 30.0 (Y) 29.9 (Y) 30.0
---------------------------------------------------------------------------------------------------
Deduction from total qualifying capital (Y) 37.9 (Y) 51.0 (Y) 54.5
---------------------------------------------------------------------------------------------------
Total qualifying capital (Y) 5,968.4 (Y) 6,789.7 (Y) 6,992.7
---------------------------------------------------------------------------------------------------
Risk-adjusted assets (Y) 55,049.6 (Y) 54,543.3 (Y) 53,996.7
---------------------------------------------------------------------------------------------------
Consolidated risk-adjusted capital ratio 10.84% 12.44% 12.95%
(based on the standards of the BIS)
---------------------------------------------------------------------------------------------------
Note) Tier II and Tier III capital represent amounts includable as qualifying
capital.
- 13 -
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Balance Sheets
----------------------------------------------------------------------------------------------------------------------
As of March 31,
(in millions of yen) 2004 (A) 2003 (B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 6,511,422 8,235,754 (1,724,332)
Call loans and bills bought 893,805 551,357 342,448
Receivables under resale agreements 1,336,995 482,776 854,218
Receivables under securities borrowing transactions 5,572,154 2,475,841 3,096,313
Commercial paper and other debt purchased 1,338,092 500,614 837,478
Trading assets 6,572,110 5,612,937 959,172
Money held in trust 469,377 415,558 53,819
Investment securities 28,329,543 24,158,330 4,171,213
Allowance for losses on investment securities (1,948) (2,067) 118
Loans and bills discounted 46,590,131 46,950,363 (360,231)
Foreign exchanges 559,382 609,944 (50,562)
Other assets 3,217,991 3,213,143 4,847
Premises and equipment 889,580 988,407 (98,827)
Deferred debenture discounts and other costs -- 9 (9)
Deferred tax assets 711,680 1,362,692 (651,011)
Deferred tax assets on land revaluation loss -- 1,593 (1,593)
Customers' liabilities for acceptances and guarantees 4,457,806 4,915,353 (457,547)
Allowance for loan losses (832,638) (1,297,292) 464,653
------------------------------------------------------------------- ------------------------------------------------
Total assets 106,615,487 99,175,319 7,440,167
=================================================================== ================================================
Liabilities:
Deposits 66,097,591 62,624,363 3,473,228
Negotiable certificates of deposit 2,819,588 4,045,901 (1,226,312)
Debentures 265,056 636,060 (371,003)
Call money and bills sold 6,879,141 3,740,653 3,138,487
Payables under repurchase agreements 3,316,268 3,162,054 154,213
Payables under securities lending transactions 3,415,952 3,883,443 (467,491)
Commercial paper 637,006 763,208 (126,201)
Trading liabilities 2,824,399 1,567,512 1,256,887
Borrowed money 1,342,691 1,512,729 (170,037)
Foreign exchanges 1,081,271 532,947 548,324
Short-term corporate bonds 340,200 10,000 330,200
Bonds and notes 3,734,610 3,546,979 187,630
Bonds with warrants 50,000 50,528 (528)
Due to trust account 1,380,268 1,401,617 (21,349)
Other liabilities 3,079,852 3,163,552 (83,700)
Reserve for employees' bonuses 16,881 17,028 (147)
Reserve for employees' retirement benefits 34,932 36,976 (2,044)
Reserve for expenses related to EXPO 2005 Japan 158 50 107
Reserves under special laws 1,160 799 360
Deferred tax liabilities 56,131 60,836 (4,705)
Deferred tax liabilities on land revaluation excess 138,926 133,649 5,276
Acceptances and guarantees 4,457,806 4,915,353 (457,547)
------------------------------------------------------------------- ------------------------------------------------
Total liabilities 101,969,895 95,806,248 6,163,647
------------------------------------------------------------------- ------------------------------------------------
Minority interest 350,347 322,650 27,696
------------------------------------------------------------------- ------------------------------------------------
Shareholders' equity:
Capital stock 1,258,052 1,258,052 --
Capital surplus 931,309 932,016 (707)
Retained earnings 1,506,576 962,347 544,228
Land revaluation excess 158,044 195,418 (37,373)
Unrealized gains (losses) on securities available for sale 560,316 (223,432) 783,748
Foreign currency translation adjustments (115,424) (73,499) (41,924)
Less treasury stock (3,631) (4,482) 851
------------------------------------------------------------------- ------------------------------------------------
Total shareholders' equity 4,295,243 3,046,420 1,248,822
------------------------------------------------------------------- ------------------------------------------------
Total liabilities, minority interest and shareholders' equity 106,615,487 99,175,319 7,440,167
=================================================================== ================================================
See Notes to Consolidated Financial Statements.
- 14 -
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Operations
----------------------------------------------------------------------------------------------------------------------
For the year ended March 31,
(in millions of yen) 2004 (A) 2003 (B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Ordinary income:
Interest income:
Interest on loans and discounts 873,427 1,016,256 (142,829)
Interest and dividends on securities 340,494 378,334 (37,839)
Interest on call loans and bills bought 5,009 6,687 (1,678)
Interest on receivables under resale agreements 12,969 17,376 (4,407)
Interest on receivables under securities borrowing
transactions 18,352 26,327 (7,974)
Interest on due from banks 47,185 71,848 (24,663)
Other interest income 120,285 174,808 (54,523)
-------------------------------------------------------------------------------------------------------------------
Total interest income 1,417,724 1,691,639 (273,915)
Trust fees 86,461 101,442 (14,980)
Fees and commissions 487,786 428,014 59,772
Trading profits 135,647 79,907 55,739
Other business income 243,377 278,645 (35,268)
Other ordinary income 184,186 192,878 (8,692)
----------------------------------------------------------------------------------------------------------------------
Total ordinary income 2,555,183 2,772,528 (217,345)
----------------------------------------------------------------------------------------------------------------------
Ordinary expenses:
Interest expense:
Interest on deposits 161,921 231,832 (69,910)
Interest on debentures and amortization of debenture
discounts 4,030 8,504 (4,473)
Interest on negotiable certificates of deposit 6,182 9,935 (3,752)
Interest on call money and bills sold 10,266 12,787 (2,520)
Interest on payables under repurchase agreements 31,061 43,064 (12,003)
Interest on payables under securities lending transactions 39,562 43,111 (3,548)
Interest on commercial paper 2,937 4,583 (1,645)
Interest on borrowed money 33,768 55,839 (22,070)
Interest on short-term corporate bonds 44 0 44
Interest on bonds and notes 67,218 75,967 (8,748)
Amortization of bond discounts -- 21 (21)
Interest on bonds with warrants 126 4,969 (4,842)
Other interest expense 33,374 143,904 (110,530)
-------------------------------------------------------------------------------------------------------------------
Total interest expense 390,496 634,520 (244,024)
Fees and commissions 66,102 73,296 (7,194)
Other business expenses 152,803 126,198 26,605
General and administrative expenses 1,047,735 1,048,806 (1,070)
Other ordinary expenses:
Provision for allowance for loan losses -- 146,052 (146,052)
Other 319,674 1,103,916 (784,242)
-------------------------------------------------------------------------------------------------------------------
Total Other ordinary expenses 319,674 1,249,968 (930,294)
----------------------------------------------------------------------------------------------------------------------
Total ordinary expenses 1,976,811 3,132,790 (1,155,978)
----------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) 578,371 (360,262) 938,633
----------------------------------------------------------------------------------------------------------------------
Special gains:
Gains on sales of premises and equipment 4,376 3,862 514
Gains on loans charged-off 26,425 44,281 (17,856)
Reduction in reserve for contingent liabilities from
brokering of financial futures transactions 26 -- 26
Reversal of allowance for loan losses 239,965 -- 239,965
Refund of enterprise taxes by the Tokyo Metropolitan
Government 41,989 -- 41,989
Gains on transfer of the substitutional portion of future
pension obligations 26,503 -- 26,503
Other special gains -- 408 (408)
----------------------------------------------------------------------------------------------------------------------
Total special gains 339,286 48,552 290,734
----------------------------------------------------------------------------------------------------------------------
Special losses:
Losses on sales of premises and equipment 15,773 24,542 (8,769)
Losses on impairment of fixed assets 21,586 -- 21,586
Provision for reserve for contingent liabilities from
brokering of securities transactions 387 257 130
Other special losses 7 4,232 (4,224)
----------------------------------------------------------------------------------------------------------------------
Total special losses 37,754 29,031 8,722
----------------------------------------------------------------------------------------------------------------------
Income (Loss) before income taxes and others 879,903 (340,742) 1,220,645
----------------------------------------------------------------------------------------------------------------------
Income taxes-current 45,956 55,919 (9,963)
Income taxes-deferred 230,650 (237,065) 467,715
Minority interest 42,480 1,898 40,581
----------------------------------------------------------------------------------------------------------------------
Net income (loss) 560,815 (161,495) 722,310
======================================================================================================================
See Notes to Consolidated Financial Statements.
- 15 -
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Capital Surplus and Retained Earnings
----------------------------------------------------------------------------------------------------------------------
For the year ended March 31,
(in millions of yen) 2004 (A) 2003 (B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Consolidated Statements of Capital Surplus
Balance of capital surplus at beginning of fiscal year 932,016 834,644 97,371
---------------------------------------------------------------- ------------------------------------------------
Increase: -- 111,552 (111,552)
Issuance of common stock due to capital increase -- 111,552 (111,552)
Decrease: (707) (14,180) 13,472
Losses on sales of treasury stock, net of income taxes (707) (14,180) 13,472
---------------------------------------------------------------- ------------------------------------------------
Balance of capital surplus at end of fiscal year 931,309 932,016 (707)
================================================================ ================================================
Consolidated Statements of Retained Earnings
Balance of retained earnings at beginning of fiscal year 962,347 1,189,718 (227,370)
---------------------------------------------------------------- ------------------------------------------------
Increase: 577,123 3,228 573,895
Net income 560,815 -- 560,815
Reduction in land revaluation excess 16,286 -- 16,286
Decrease in consolidated subsidiaries 22 -- 22
Change in ownership percentage to a consolidated subsidiary
due to stock repurchase by the subsidiary -- 2,648 (2,648)
Decrease in companies accounted for by the equity method -- 580 (580)
---------------------------------------------------------------- ------------------------------------------------
Decrease: (32,895) (230,599) 197,704
Net loss -- (161,495) 161,495
Cash dividends (32,891) (45,943) 13,052
Bonuses to directors of consolidated subsidiaries (3) (3) --
Reduction in land revaluation excess -- (1,420) 1,420
Change in ownership percentage to consolidated subsidiaries
and a company accounted for by the equity method due to
their merger -- (17,725) 17,725
Increase in consolidated subsidiaries and companies accounted
for by the equity method -- (4,011) 4,011
---------------------------------------------------------------- ------------------------------------------------
Balance of retained earnings at end of fiscal year 1,506,576 962,347 544,228
================================================================ ================================================
See Notes to Consolidated Financial Statements.
- 16 -
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
----------------------------------------------------------------------------------------------------------------------
For the year ended March 31,
(in millions of yen) 2004 (A) 2003 (B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Income (loss) before income taxes and others 879,903 (340,742) 1,220,645
Depreciation 106,495 86,242 20,253
Impairment losses 21,586 -- 21,586
Goodwill amortization 551 (3,937) 4,488
Equity in loss (earnings) of affiliates (3,595) 3,532 (7,128)
Increase (decrease) in allowance for loan losses (455,972) (355,043) (100,928)
Increase (decrease) in allowance for losses on investment
securities 1,194 566 627
Increase (decrease) in reserve for losses on real
estate-collateralized loans sold -- (7,575) 7,575
Increase (decrease) in reserve for employees' bonuses (147) 743 (890)
Increase (decrease) in reserve for employees' retirement
benefits (1,467) 228 (1,696)
Increase (decrease) in reserve for expenses related to
EXPO 2005 Japan 107 50 57
Interest income recognized on statement of operations (1,417,724) (1,691,639) 273,915
Interest expenses recognized on statement of operations 390,496 634,520 (244,024)
Investment securities losses (gains) 20,149 400,864 (380,714)
Losses (gains) on money held in trust (6,992) 7,421 (14,414)
Foreign exchange losses (gains) 495,113 (32,716) 527,829
Losses (gains) on sales of premises and equipment 11,395 20,680 (9,284)
Net decrease (increase) in trading assets (966,983) 100,860 (1,067,844)
Net increase (decrease) in trading liabilities 1,260,653 848,319 412,334
Adjustment of unsettled trading accounts 140,034 (601,361) 741,395
Net decrease (increase) in loans and bills discounted (41,889) 1,668,901 (1,710,790)
Net increase (decrease) in deposits 3,894,086 3,077,728 816,358
Net increase (decrease) in negotiable certificates of deposit (1,224,926) 863,841 (2,088,768)
Net increase (decrease) in debentures (371,003) (1,639,510) 1,268,506
Net increase (decrease) in borrowed money (excluding
subordinated borrowings) (89,963) (304,049) 214,086
Net decrease (increase) in due from banks (excluding cash
equivalents) 597,067 477,598 119,469
Net decrease (increase) in call loans and bills bought
and others (1,592,137) 1,208,579 (2,800,716)
Net decrease (increase) in receivables under securities
borrowing transactions (3,152,785) (217,281) (2,935,503)
Net increase (decrease) in call money and bills sold and others 3,315,174 (695,559) 4,010,733
Net increase (decrease) in commercial paper (117,078) (75,419) (41,658)
Net increase (decrease) in payables under securities lending
transactions (399,401) 475,235 (874,637)
Net decrease (increase) in foreign exchanges (assets) 50,562 (49,161) 99,723
Net increase (decrease) in foreign exchanges (liabilities) 548,324 19,047 529,276
Net increase (decrease) in issuance and redemption of short-term
corporate bonds 330,200 10,000 320,200
Net increase (decrease) in issuance and redemption of
unsubordinated bonds and notes 255,847 401,567 (145,720)
Net increase (decrease) in due to trust account (21,349) (880,607) 859,257
Interest income (cash basis) 1,466,611 1,772,695 (306,084)
Interest expenses (cash basis) (442,499) (718,006) 275,507
Other (428,749) 215,211 (643,960)
------------------------------------------------------------------- ------------------------------------------------
Sub-total 3,050,886 4,681,824 (1,630,937)
Income taxes (51,096) (45,110) (5,985)
------------------------------------------------------------------- ------------------------------------------------
Net cash provided by (used in) operating activities 2,999,790 4,636,714 (1,636,923)
Cash flows from investing activities:
Purchases of investment securities (47,839,599) (44,807,196) (3,032,403)
Proceeds from sales of investment securities 29,004,862 27,103,131 1,901,730
Proceeds from maturities of investment securities 14,981,518 15,702,239 (720,720)
Increase in money held in trust (65,949) (162,435) 96,486
Decrease in money held in trust 9,349 64,037 (54,688)
Purchases of premises and equipment (49,867) (42,775) (7,091)
Proceeds from sales of premises and equipment 59,827 19,099 40,728
Purchases of equity of newly consolidated subsidiaries -- (923) 923
Proceeds from sales of equity of subsidiaries resulting
exclusion from consolidation 5,948 -- 5,948
------------------------------------------------------------------- ------------------------------------------------
Net cash provided by (used in) investing activities (3,893,910) (2,124,823) (1,769,087)
Cash flows from financing activities:
Increase in subordinated borrowings 112,499 116,000 (3,500)
Decrease in subordinated borrowings (174,999) (137,842) (37,157)
Increase in subordinated bonds and notes and bonds with warrants 304,155 189,757 114,397
Decrease in subordinated bonds and notes and bonds with warrants (323,285) (625,897) 302,611
Proceeds from issuance of common stock 10,000 223,104 (213,104)
Proceeds from issuance of common stock to minority shareholders 38,407 16,195 22,212
Dividend paid by the parent (32,850) (46,702) 13,852
Dividend paid by subsidiaries to minority shareholders (5,678) (3,414) (2,264)
Purchases of treasury stock (467) (965) 498
Proceeds from sales of treasury stock 949 82,944 (81,995)
------------------------------------------------------------------- ------------------------------------------------
Net cash provided by (used in) financing activities (71,269) (186,820) 115,550
Effect of exchange rate changes on cash and cash equivalents (49,616) (48,536) (1,079)
------------------------------------------------------------------- ------------------------------------------------
Net increase (decrease) in cash and cash equivalents (1,015,005) 2,276,534 (3,291,539)
Cash and cash equivalents at beginning of fiscal year 4,049,530 1,741,798 2,307,731
Increase in cash and cash equivalents due to consolidation of
new subsidiaries -- 34,811 (34,811)
Decrease in cash and cash equivalents due to deconsolidation of
subsidiaries -- (3,614) 3,614
------------------------------------------------------------------- ------------------------------------------------
Cash and cash equivalents at end of fiscal year 3,034,525 4,049,530 (1,015,005)
=================================================================== ================================================
See Notes to Consolidated Financial Statements.
- 17 -
Notes to Consolidated Financial Statements
Notes related to the Consolidated Balance Sheet as of March 31, 2004 are as
follows:
1. Basis of Presentation
The accompanying Consolidated Balance Sheet of Mitsubishi Tokyo Financial
Group, Inc. ("MTFG") and its subsidiaries is compiled as required by the Banking
Law and in conformity with accounting principles generally accepted in Japan,
which are different in certain respects as compared to the application and
disclosure requirements of International Accounting Standards. For the
convenience of readers, the presentation is modified in certain respects from
the original Japanese report. The amounts are presented in millions of yen and
are rounded down to the nearest million.
2. Trading Assets and Liabilities
Transactions for trading purposes (for purposes of seeking to capture gains
arising from short-term changes in interest rates, currency exchange rates or
market prices of securities and other market-related indices or from gaps among
markets) are included in Trading assets and Trading liabilities on a trade date
basis.
Trading assets and Trading liabilities are stated at market value at fiscal
year end.
3. Investment Securities
Debt securities being held to maturity are stated at amortized cost
computed by the moving-average method (straight-line amortization). Other
securities (securities available for sale) whose current value can be estimated
are stated at market value at fiscal year end (sale cost is calculated by the
moving-average method) and other non-marketable securities are stated at cost or
amortized cost computed by the moving-average method. Unrealized gains and
losses on securities available for sale are included in shareholders' equity,
net of income taxes, other than the case that the securities embedding
derivatives are measured at fair value in their entirety and the change in the
fair value is recognized in current earnings.
4. Securities in Money Held in Trust
Securities included in Money held in trust of sole investment mainly for
the purpose of security investment are stated at the same method as described in
notes 2. and 3.
5. Derivatives
Derivatives for purposes other than trading are stated at market value in
principle.
In the previous fiscal year, MTFG's domestic banking subsidiary and trust
banking subsidiary adopted the transitional treatments prescribed in the
Industry Audit Committee Report No. 25, "Treatment of Accounting and Auditing
Concerning Accounting for Foreign Currency Transactions in the Banking Industry"
issued by the Japanese Institute of Certified Public Accountants (the "JICPA")
on July 29, 2002. According to the transitional treatments, currency swap
transactions and fund swap transactions for the purpose of funds
borrowing/lending in different currencies were accounted for on an accrual basis
as financing transactions in accordance with the Industry Audit Committee Report
No. 20, "Temporary Treatment of Accounting and Auditing Concerning Accounting
for Foreign Currency Transactions in the Banking Industry" issued by the JICPA
on November 14, 2000. In the current fiscal year, such swap transactions are
stated at market value as derivative transactions and net assets or liabilities
are recorded on the balance sheet in accordance with the standard treatments of
the Industry Audit Committee Report No. 25.
- 18 -
As a result, "Other assets" and "Other liabilities" increased by (Y)62,207
million, respectively. With respect to the currency swap transactions and fund
swap transactions which had been accounted for on an accrual basis, the change
had no effects on the results of operations since MTFG's domestic banking
subsidiary and trust banking subsidiary applied hedge accounting in accordance
with the Industry Audit Committee Report No. 25. Summary of the hedge accounting
is described in Note 16.
In the previous fiscal year, the translation adjustments of forward
exchange transactions and other relevant transactions in MTFG's domestic banking
subsidiary were reported as other in "Other assets" or other in "Other
liabilities" on a net basis by applying the transitional treatments prescribed
in the Industry Audit Committee Report No. 25. In the current fiscal year, they
are reported as trading derivative financial instruments in "Trading assets" and
"Trading liabilities" or as derivative financial instruments in "Other assets"
and "Other liabilities" on a gross basis in accordance with the standard
treatments of the Report No. 25. The translation adjustments of forward exchange
transactions and other relevant transactions in MTFG's domestic trust banking
subsidiary were reported as other in "Other assets" or other in "Other
liabilities." In the current fiscal year, they are reported as trading
derivative financial instruments in "Trading assets" and "Trading liabilities"
or as derivative financial instruments in "Other assets" and "Other
liabilities." As a result, "Trading assets" decreased by (Y)100,223 million,
"Trading liabilities" decreased by (Y)138,205 million, "Other assets" increased
by (Y)567,858 million and "Other liabilities" increased by (Y)605,840 million.
6. Premises and Equipment
Depreciation for buildings and equipment of MTFG and its domestic banking
subsidiary and trust banking subsidiary is computed using the declining-balance
method.
Principal estimated useful lives are as follows:
Buildings 15 years to 50 years
Equipment and furniture 4 years to 15 years
Depreciation for buildings and equipment of other consolidated subsidiaries
is computed principally using the straight-line method based on the estimated
useful lives.
7. Software
Costs of computer software developed or obtained for internal use are
deferred and amortized using the straight-line method over the estimated useful
lives of 5 to 10 years.
8. Bond Discount and Bond Issuance Cost
Bond discount is amortized over the remaining life of the bond.
Bond issuance cost is charged to expenses when incurred.
9. Translation of Foreign Currency Items
Foreign currency assets and liabilities and overseas branches' accounts of
MTFG's domestic banking subsidiary and trust banking subsidiary are principally
translated into yen equivalents at the exchange rates prevailing at fiscal year
end, except equity securities of affiliated companies which are translated into
yen equivalents at the exchange rates prevailing at the acquisition date for
those securities.
Foreign currency assets and liabilities of other consolidated subsidiaries
are principally translated into yen equivalents at the exchange rates prevailing
at fiscal year end of each company.
- 19 -
10. Allowance for Loan Losses
An allowance for loan losses of MTFG's primary domestic consolidated
subsidiaries is provided as detailed below, pursuant to the internal rules for
self-assessment of asset quality and the internal rules for providing allowances
for credit losses:
For claims to debtors who are legally bankrupt (due to bankruptcy, special
liquidation, suspension of transactions with banks by the rules of clearing
houses, etc.) or virtually bankrupt, an allowance is provided based on the
amount of claims, after the charge-off as stated below, net of amounts expected
to be collected through the disposal of collateral or execution of guarantees.
For claims to debtors who are likely to become bankrupt for which future
cash flows could not be reasonably estimated, an allowance is provided for the
amount considered to be necessary based on an overall solvency assessment
performed for the amount of claims, net of amounts expected to be collected
through the disposal of collateral or execution of guarantees.
For claims to debtors who are likely to become bankrupt and to be closely
watched for which future cash flows could be reasonably estimated, an allowance
is provided for the difference between the present value of expected future cash
flows discounted at the contracted interest rate and the carrying value of the
claim.
For other claims, an allowance is provided based on historical loan loss
experience.
The allowance for loans to specific foreign borrowers is provided based on
the amount of expected losses due to the political and economic situation of
their respective countries.
All claims are assessed by the branches and credit supervision divisions
based on the internal rules for self-assessment of asset quality. The credit
examination divisions, which are independent from branches and credit
supervision divisions, subsequently conduct audits of their assessments, and an
allowance is provided based on audit results.
For collateralized or guaranteed claims to debtors who are legally bankrupt
or virtually bankrupt, the amount of claims exceeding the estimated value of
collateral or guarantees, which is deemed uncollectible, has been charged-off
and the amount was (Y)528,339 million.
An allowance for loan losses of other consolidated subsidiaries is provided
based on historical loan losses experience or estimated collectibility of
specific claims.
11. Allowance for Losses on Investment Securities
An allowance for losses on investment securities is provided based on the
estimated losses on non-marketable debt securities.
12. Reserve for Employees' Bonuses
A reserve for employees' bonuses is provided for the payment of employees'
bonuses based on estimated amounts of the future payments attributed to the
current fiscal year.
13. Reserve for Employees' Retirement Benefits
A reserve for employees' retirement benefits is provided for the payment of
employees' retirement benefits based on estimated amounts of the actuarial
retirement benefit obligation and the related pension assets. Prior service cost
is amortized using the straight-line method over 10 years. Net actuarial gain
(loss) is amortized using the straight-line method over 10 years commencing from
the next fiscal year of incurrence. The unrecognized net retirement benefit
obligation at the adoption of new accounting standard is being amortized using
the straight-line method over 5 years.
14. Equipment Used under Finance Lease Agreements
Equipment used under finance lease agreements is accounted for as equipment
leased under operating leases, except for those leases which transfer ownership
of leased equipment to the lessee, in which case the equipment is capitalized.
- 20 -
15. Hedge Accounting for Interest Rate Risks
With respect to hedge accounting for interest rate risks arising from
financial assets and liabilities, in the previous fiscal year, MTFG's domestic
banking subsidiary and trust banking subsidiary principally applied the "macro
hedge" accounting for which they manage interest rate risks arising from various
deposits and loans etc. with derivative transactions as a whole in conformity
with the transitional treatments prescribed in the Industry Audit Committee
Report No. 24, "Treatment of Accounting and Auditing of Application of
Accounting Standard for Financial Instruments in the Banking Industry" issued by
the JICPA on February 13, 2002. Since the beginning of the current fiscal year,
they have adopted portfolio hedges or individual hedges prescribed in the Report
No. 24 and the Accounting Committee Report No. 14, "Practical Guidelines for
Accounting for Financial Instruments" issued by the JICPA on January 31, 2000.
The method of the hedge accounting is the deferral method other than the
exceptional method for certain interest rate swaps which meet the conditions of
the exceptional treatment.
In hedging activities to offset changes in the fair value of fixed rate
deposits and loans etc., MTFG's domestic banking subsidiary and trust banking
subsidiary distinguish hedged items by grouping the hedged items by their
maturities and designate interest rate swap transactions etc. as hedging
instruments individually or in accordance with the Industry Audit Committee
Report No. 24. In hedging activities offsetting changes in the fair value of
fixed rate bonds, they distinguish hedged items by individual bond or identical
type of bonds and designate interest rate swap transactions etc. as hedging
instruments.
In hedging activities to fix forecasted cash flows on variable rate or
short-term fixed rate deposits and loans etc., MTFG's domestic banking
subsidiary and trust banking subsidiary distinguish hedged items by grouping the
hedged items by their index interest rates and repricing terms and designate
interest rate swap transactions etc. as hedging instruments in accordance with
the Industry Audit Committee Report No. 24. Since material terms related to the
hedged items and hedging instruments are substantially identical, hedge
relationship is deemed to be highly effective and the hedge effectiveness
testing is substituted. Effectiveness is also tested by correlation of
fluctuation factors in interest rates.
Deferred hedge losses and deferred hedge gains recorded on the balance
sheet as of March 31, 2003 as a result of the macro hedge accounting are
realized as expenses or income over the remaining lives of the hedging
instruments (at most 15 years from 2003). Deferred hedge losses and deferred
hedge gains attributable to the macro hedge accounting as of March 31, 2004 were
(Y)198,066 million and (Y)239,720 million, respectively.
16. Hedge Accounting for Foreign Exchange Risks
With respect to hedge accounting for foreign exchange risks attributable to
foreign-currency-denominated financial assets and liabilities, since the
beginning of the current fiscal year, MTFG's domestic banking subsidiary and
trust banking subsidiary have applied the deferral hedge accounting by
distinguishing hedged items by grouping the foreign-currency-denominated
financial assets and liabilities by currencies and designating currency swap
transactions and forward exchange contracts (funds swap transactions) as hedging
instruments, pursuant to the Industry Audit Committee Report No. 25.
They also engage in "portfolio hedge" to hedge foreign exchange risk
attributable to foreign-currency-denominated investments in affiliated companies
and foreign-currency-denominated securities available for sale (other than
bonds), using foreign-currency-denominated liabilities and forward exchange
contracts as hedging instruments. They apply the deferral hedge method to
foreign-currency-denominated investments in affiliated companies and the fair
value hedge method to foreign-currency-denominated securities available for sale
(other than bonds).
17. Intercompany and Intracompany Swap Transactions
With respect to the intercompany and intracompany derivative transactions,
realized gains (losses) or valuation gains (losses) on the interest rate swap
transactions and currency swap transactions are reported in current earnings or
deferred as assets or liabilities without elimination if mirror transactions
with the third parties against these swap transactions designated as hedging
instruments are appropriately conducted in conformity with the non-arbitrary and
strict hedging policy in accordance with the Industry Audit Committee Report No.
24 and No. 25.
- 21 -
18. Consumption Taxes
The National Consumption Tax and the Local Consumption Tax are excluded
from transaction amounts. The portion of the National Consumption Tax and the
Local Consumption Tax, which were paid on the purchase of premises and equipment
and which are not deductible as a tax credit, are charged to expenses when
incurred.
19. Reserve for Expenses Related to EXPO 2005 Japan
A reserve for expenses related to EXPO 2005 Japan is provided for the
expenses related to the participation in the EXPO 2005 Japan scheduled to be
held in 2005 based on the estimated contractual participation expenses allocated
over the period. The reserve is provided pursuant to Article 43 of the
Commercial Code and includes the allowance provided pursuant to Article 68-52 of
the Special Taxation Measures Law.
20. Reserves under Special Laws
Pursuant to Article 82 of the Financial Futures Transactions Law, a reserve
for contingent liabilities from brokering of financial futures transactions of
(Y)31 million was provided.
Pursuant to Article 51 of the Securities and Exchange Law, a reserve for
contingent liabilities from brokering of securities transactions of (Y)1,129
million was provided.
21. Consolidated Corporate-tax System
MTFG and certain domestic consolidated subsidiaries adopt consolidated
corporate-tax system, with MTFG being a parent company under the system.
22. Due from Directors of MTFG
Due from directors of MTFG was (Y)92 million.
23. Accumulated Depreciation
Accumulated depreciation on premises and equipment was (Y)619,149 million.
24. Accumulated Impairment Losses
Accumulated impairment losses on fixed assets were (Y)21,586 million.
25. Accumulated Deferred Gains on Sales of Real Estate
Accumulated deferred gains on sales of real estate of (Y)45,867 million
were deducted from the acquisition cost of newly acquired premises and
equipment.
26. Lease Contracts
Other than premises and equipment which are reported on the consolidated
balance sheet, some electronic computers are used by the lease contracts.
- 22 -
27. Nonaccrual Loans
Loans to customers in bankruptcy and past due loans are included in Loans
and bills discounted, and the amounts were (Y)46,138 million and (Y)693,477
million, respectively. The amount of past due loans included loans of (Y)1,050
million entrusted to the Resolution and Collection Corporation, which
facilitates the removal of problem loans from balance sheet.
Loans are generally placed on nonaccrual status when substantial doubt is
judged to exist as to ultimate collectibility of either principal or interest if
they are past due for a certain period or for other reasons. Loans to customers
in bankruptcy represent nonaccrual loans, after the partial charge-off of claims
deemed uncollectible, to debtors who are legally bankrupt, which are defined in
Article 96, Paragraph 1, Subparagraph 3 and 4 of Enforcement Ordinance for the
Corporation Tax Law. Past due loans are nonaccrual loans other than loans to
customers in bankruptcy and loans for which interest payments are deferred in
order to assist the financial recovery of debtors in financial difficulties.
28. Accruing Loans Contractually Past Due 3 Months or More
Accruing loans contractually past due 3 months or more are included in
Loans and bills discounted, and the amount was (Y)12,260 million. Loans
classified as loans to customers in bankruptcy or past due loans are excluded.
29. Restructured Loans
Restructured loans are included in Loans and bills discounted, and the
amount was (Y)701,648 million. Such restructured loans are loans on which
concessions (e.g., reduction of the stated interest rate, deferral of interest
payment, extension of maturity date, reduction of the face amount or maturity
amount of the debt or accrued interest) have been granted to debtors in
financial difficulties to assist them in their financial recovery and eventually
to be able to repay to creditors. Loans classified as loans to customers in
bankruptcy, past due loans or accruing loans contractually past due 3 months or
more are excluded.
30. Nonaccrual Loans, Accruing Loans Contractually Past Due 3 Months or More
and Restructured Loans
Total amount of nonaccrual loans, accruing loans contractually past due 3
months or more and restructured loans was (Y)1,453,524 million. The amount of
past due loans included loans of (Y)1,050 million entrusted to the Resolution
and Collection Corporation, which facilitates the removal of problem loans from
balance sheet.
The amounts reflected in Notes 27. to 30. represent the gross receivable
amounts prior to reduction for the allowance for loan losses.
31. Bills Discounted
Bills discounted are accounted for as secured lending transactions in
conformity with the Industry Audit Committee Report No.24. Bills accepted by
other banks, commercial bills, bills of exchange, and foreign bills bought
discounted by MTFG's domestic banking subsidiary and trust banking subsidiary
are permitted to be sold or pledged and the total face value was (Y)730,910
million.
32. Assets Pledged
Assets pledged as collateral were as follows:
Cash and due from banks (Y)1,882 million
Trading assets (Y)189,155 million
Investment securities (Y)829,776 million
Loans and bills discounted (Y)3,961,200 million
Premises and equipment (Y)28,872 million
- 23 -
Liabilities related to the pledged assets were as follows:
Deposits (Y)199,085 million
Call money and bills sold (Y)4,405,600 million
Borrowed money (Y)109,378 million
Other liabilities (Y)10,567 million
Acceptances and guarantees (Y)1,806 million
In addition, Cash and due from banks of (Y)165,087 million, Trading assets
of (Y)2,658 million, Investment securities of (Y)3,581,458 million, Loans and
bills discounted of (Y)1,413,206 million and Other assets of (Y)76,484 million
were pledged as collateral for settlement of exchange or derivatives
transactions or as valuation margin.
Trading assets of (Y)2,258,988 million and Investment securities of
(Y)2,497,697 million were sold under repurchase agreements or lent under secured
lending transactions, and Payables under repurchase agreements of (Y)2,304,661
million and Payables under securities lending transactions of (Y)2,525,523
million were corresponding.
Bills rediscounted are accounted for secured borrowing transactions in
conformity with the Industry Audit Committee Report No.24. The total face value
of bills accepted by other banks, commercial bills, and bills of exchange
rediscounted by MTFG's domestic banking subsidiary and trust banking subsidiary
was (Y)25,199 million.
33. Land Revaluation Excess
Pursuant to the Law concerning Revaluation of Land, March 31, 1998, land
used for business operations of domestic subsidiaries has been revalued as of
the following dates. Land revaluation excess is included in Shareholders'
equity, net of income taxes. The land revaluation excess includes MTFG's
ownership percentage of affiliated companies' land revaluation excess.
Date of the revaluation:
Domestic banking subsidiary March 31, 1998
Domestic trust banking subsidiary March 31, 2002
Other domestic subsidiaries December 31, 2001
The method of the revaluation as set forth in Article 3, Paragraph 3 of the
Law:
Pursuant to Article 2, Subparagraph 4 of the Enforcement Ordinance for
the Law concerning Revaluation of Land, the land price for the
revaluation is determined based on the method established and published
by the Director General of National Tax Agency in order to calculate the
land value for a basis of determining the taxable amount subject to land
value tax prescribed by Article 16 of the Land Value Tax Law, reflecting
appropriate adjustments for land shape and timing of the assessment and
based on real estate appraisal information defined by Article 5 of the
Law.
The difference between the total fair value of the land used for business
operations which had been revalued pursuant to Article 10 of the Law and the
total book value of such land as of March 31, 2004 was (Y)107,006 million.
Land used for business operations of a certain affiliated company has been
revalued as of March 31, 2002.
34. Subordinated Borrowings
Subordinated borrowings of (Y)708,221 million were included in Borrowed
money.
35. Subordinated Bonds
Subordinated bonds of (Y)1,497,892 million were included in Bonds and
notes.
36. Guaranteed Trusts
Principal amounts of Jointly operated designated money trusts and Loan
trusts of MTFG's trust banking subsidiary, for which repayment of the principal
to the customers is guaranteed, were (Y)948,854 million and (Y)1,131,498
million, respectively.
- 24 -
37. Net Assets per Common Share
Net assets per common share were (Y)620,797.48.
38. Write Down of Investment Securities
Marketable securities other than trading securities are written down when a
decline in the market value below the cost of the securities is substantial and
the valuation differences are recognized as losses, based upon the judgment that
the decline in market value is other than temporary at the current fiscal
year-end. A "substantial decline in the market value" is recognized based on the
classification of issuers as follows, pursuant to the internal rules for
self-assessment of asset quality:
Issuers who are legally bankrupt, virtually bankrupt or likely to
become bankrupt: Market value is lower than cost
Issuers who are to be closely watched: Market value is 30% or more
lower than cost
Other issuers: Market value is 50% or more lower than cost
39. Market Value of Securities
Market value and valuation differences of securities were as follows.
Securities below include trading securities, trading commercial paper and
trading short-term corporate bonds classified as Trading assets, negotiable
certificates of deposits classified as Cash and due from banks and investments
in commodity investment trusts classified as Commercial paper and other debt
purchased. The same definition is applied in Notes 40. to 42.
Trading securities
Balance sheet amount (Y)5,655,999 million
Valuation profits included in ((Y)3,823) million
Income before income taxes and
others
Marketable debt securities being held to maturity
(in millions of yen)
Balance
sheet amount Market value Differences Gains Losses
Domestic bonds 1,159,458 1,165,842 6,383 7,602 1,218
Government bonds 998,942 999,449 507 1,724 1,217
Municipal bonds 108,576 112,230 3,703 3,704 0
Corporate bonds 51,988 54,162 2,173 2,173 --
Other securities 242,357 244,978 2,620 2,626 5
Foreign bonds 74,239 76,825 2,586 2,592 5
Other 168,118 168,152 34 34 --
--------------------------------------------------------------------------------------------------
Total 1,401,815 1,410,820 9,004 10,228 1,224
--------------------------------------------------------------------------------------------------
- 25 -
Marketable securities available for sale
(in millions of yen)
Balance Valuation
Cost sheet amount differences Gains Losses
Domestic equity securities 2,768,443 3,553,772 785,328 891,328 105,999
Domestic bonds 15,703,795 15,707,190 3,394 40,723 37,328
Government bonds 13,989,184 13,986,921 (2,263) 31,617 33,880
Municipal bonds 243,459 244,981 1,522 2,734 1,212
Corporate bonds 1,471,150 1,475,286 4,136 6,371 2,235
Other securities 7,806,986 7,965,776 158,790 182,541 23,750
Foreign equity securities 15,012 29,518 14,506 14,827 321
Foreign bonds 6,316,837 6,424,133 107,296 115,867 8,570
Other 1,457,136 1,512,124 36,987 51,846 14,858
----------------------------------------------------------------------------------------------------
Total 26,279,224 27,226,739 947,514 1,114,592 167,078
Among the valuation differences above, the amounts of shareholders' equity,
net of income taxes were (Y)947,322 million as a result of recognizing (Y)191
million profits, which were related to the securities embedding derivatives and
measured in their entirety, in current earnings. Those amounts, net of
(Y)386,296 million of related deferred tax liabilities, were (Y)561,025 million.
Net valuation differences, excluding minority interest of (Y)3,001 million and
adding MTFG's ownership percentage of affiliates' unrealized gains on securities
available for sale of (Y)2,056 million, were (Y)560,080 million which were
included in Unrealized gains on securities available for sale.
40. Securities Available for Sale Sold
Securities available for sale sold during the fiscal year were as follows:
(in millions)
Proceeds from sales Gains Losses
(Y)28,653,515 (Y)224,278 (Y)211,230
41. Securities Not Stated at Market Value
The balance sheet amounts of principal securities not stated at market value
were as follows:
Balance sheet amount
Debt Securities being held to maturity
Foreign bonds (Y)13,749 million
Securities available for sale
Domestic equity securities (Y)182,534 million
Domestic corporate bonds (Y)410,366 million
Foreign bonds (Y)18,935 million
42. Redemption Schedule of Bonds
Redemption schedule of bonds classified as securities available for sale
and being held to maturity was as follows:
(in millions of yen)
Due after 5
Due after 1 years
Due within year through through 10 Due after
1 year 5 years years 10 years
Domestic bonds 8,211,601 6,917,038 1,020,579 1,132,321
Government bonds 7,818,442 5,246,113 793,757 1,127,550
Municipal bonds 92,371 168,187 97,475 --
Corporate bonds 300,787 1,502,737 129,346 4,771
Other bonds 1,308,985 4,582,721 635,971 1,154,553
Foreign bonds 1,047,316 4,350,417 447,576 653,007
Other 261,669 232,304 188,395 501,545
-------------------------------------------------------------------------------------
Total 9,520,586 11,499,760 1,656,551 2,286,875
- 26 -
43. Money Held in Trust
Classification of Money held in trust was as follows:
Money held in trust for trading purposes
Balance sheet amount (Y)334,316 million
Valuation gains included in Income before income (Y)8,247 million
taxes and others
Other Money held in trust
(in millions)
Cost Balance sheet amount Valuation differences Gains Losses
(Y)134,664 (Y)135,061 (Y)396 (Y)396 --
Valuation differences, net of (Y)161 million of related deferred tax
liabilities, were (Y)235 million which were included in Unrealized gains on
securities available for sale.
44. Securities Lent/Borrowed
Unsecured securities lent for which borrowers have rights of sale or pledge
were included in Investment securities and the amount was (Y)18,210 million.
With respect to borrowed securities and purchased securities under resale
agreements that are permitted to be sold or pledged, (Y)2,034,714 million were
pledged, (Y)619,431 million were lent and (Y)4,916,039 million were held at hand
at this fiscal year end.
45. Loan Commitments
Contracts of overdraft facilities and loan commitment limits are contracts
under which customers are lent to up to the prescribed limits in response to the
customers' application for a loan as long as there is no violation of any
condition in the contracts. The unused amount within the limits relating to
these contracts was (Y)29,949,651 million.
Since many of these commitments expire without being drawn, the unused
amount does not necessarily represent a future cash requirement. Most of these
contracts have conditions that allow MTFG and its consolidated subsidiaries to
refuse the customers' application for a loan or decrease the contract limits
with proper reasons (e.g., changes in financial situation, deterioration in
customers' creditworthiness, etc.). At the inception of contracts, MTFG and its
consolidated subsidiaries obtain real estate, securities, etc. as collateral if
considered to be necessary. Subsequently, MTFG and its consolidated subsidiaries
perform periodic reviews of the customers' business results based on internal
rules, and take necessary measures to reconsider conditions in contracts and/or
require additional collateral and guarantees.
46. Employees' Retirement Benefits
The funded status and amounts recognized in the Consolidated Balance Sheet
were as follows:
(in millions of yen)
Projected benefit obligation (997,243)
Fair value of plan assets 958,308
Projected benefit obligation in excess of plan assets (38,935)
Unrecognized plan assets (57,822)
Unrecognized net obligation at transition 16,100
Unrecognized net actuarial loss 276,175
Unrecognized prior service cost (37,753)
Net amount recognized in the Consolidated Balance Sheet 157,764
Prepaid pension costs 189,249
Reserve for employees' retirement benefits (34,932)
- 27 -
47. Transfer of Substitutional Portion of Pension Obligations
On August 1, 2003, according to the enactment of the Defined Benefit
Pension Plan Law, MTFG's domestic banking subsidiary obtained an approval of
exemption from the substitutional portion of its future pension obligations by
the Minister of Health, Labor and Welfare. MTFG's domestic banking subsidiary
recognized extinguishment of benefit obligation and plan assets as of the date
of approval in accordance with a transitional measurement prescribed in Article
47-2 of the Accounting Committee Report No. 13, "Practical Guidelines for
Accounting for Retirement Benefits (Interim Report)" issued by the JICPA on
September 14, 1999.
As a result, special gains of (Y)26,503 million were recorded in this
fiscal year.
The substitutional portion of the plan assets which will be transferred to
the government in the subsequent year measured at the fiscal year-end was
(Y)96,729 million.
48. Derivatives Embedded in Hybrid Financial Instruments
The derivatives, which were embedded in hybrid financial instruments and
not required to be accounted separately from the host contracts, had been
accounted for on an accrual basis together with the host contracts. Since the
beginning of the current fiscal year, such embedded derivatives have been
measured at market value and their valuation gains (losses) have been reported
in current earnings if they are managed separately from the host contracts.
Such hybrid financial instruments had been risk adjusted items in the macro
hedge accounting. Since the beginning of the current fiscal year, MTFG's
domestic banking subsidiary and trust banking subsidiary have adopted the
standard treatments of the Industry Audit Committee Report No. 24 and,
therefore, valuation gains (losses) on the derivatives which used to be risk
adjusting instruments in the macro hedge accounting are reported in current
earnings. In response to this change, they changed the accounting for the
embedded derivatives, which had been accounted together with the host contracts,
and measured them at market value and reported their valuation gains (losses) in
current earnings if they are managed separately from the host contracts.
As a result, ordinary profit and income before income taxes and others
increased by (Y)10,435 million, respectively.
49. Impairment of Fixed Assets
In the previous years, valuation loss attributable to the significant
decline in the fair value of owned and unutilized land below the carrying amount
of it had been recognized. Effective April 1, 2003, the MTFG Group adopted
"Accounting Standards for Impairment of Fixed Assets" issued by the Business
Accounting Council on August 9, 2002 and Financial Accounting Standard
Implementation Guidance No. 6, "Implementation Guidance for Accounting Standard
for Impairment of Fixed Assets" issued by the Accountig Standards Board of
Japan, "ASBJ" on October 31, 2003, because their early adoption in the fiscal
year ended March 31, 2004 was permitted. The adoption had an impact on Income
before income taxes and others by (Y)15,255 million.
- 28 -
Notes related to the Consolidated Statement of Operations for the year
ended March 31, 2004 are as follows:
1. Basis of Presentation
The accompanying Consolidated Statement of Operations is compiled as
required by the Banking Law and in conformity with accounting principles
generally accepted in Japan, which are different in certain respects as compared
to application and disclosure requirements of International Accounting
Standards. For the convenience of readers, the presentation is modified in
certain respects from the original Japanese report. The amounts are presented in
millions of yen and are rounded down to the nearest million.
2. Net Income per Common Share
Net income per common share was (Y)87,156.62.
3. Net Income per Common and Common Equivalent Share
Net income per common and common equivalent share was (Y)85,017.34.
4. Trading Profits and Losses
Profits and losses on trading transactions (dividends and interest, gains
or losses on sales, and valuation gains or losses) are shown as Trading profits
or Trading losses on a trade date basis.
5. Other Ordinary Income
Other ordinary income included gains on sales of equity securities of
(Y)90,571 million.
6. Other Ordinary Expenses
Other ordinary expenses included losses on loan charge-offs of (Y)70,472
million and losses on sales of loans and other claims of (Y) 61,264 million.
7. Impairment of Fixed Assets
Impairment losses on fixed assets of MTFG's domestic banking subsidiary,
trust banking subsidiary and a certain consolidated subsidiary for the fiscal
year are as follows:
-------------------------------------------------------------------------------------------------------------
Impairment Losses
Area Principal Use Type (in millions of (Y))
-------------------------------------------------------------------------------------------------------------
Business Premises 5 1,338
Metropolitan Area Idle Properties and training Land, Building and Properties
facilities, etc. held for sale 22 8,722
-------------------------------------------------------------------------------------------------------------
Business Premises 3 2,202
Others Idle Properties and training Land, Building and Properties
facilities, etc. held for sale 14 9,322
-------------------------------------------------------------------------------------------------------------
MTFG's domestic banking subsidiary and trust banking subsidiary group
business premises by each business location (sharing physically identical
assets) such as a branch, an office, a department, etc. for which profit and
loss are continuously measured and recognized as the minimum unit of grouping,
and group unutilized assets and assets to be sold by each asset as the minimum
unit of grouping. Since the head office, training facilities, computer system
and business operation centers, company houses and dormitories, recreation
facilities, etc. do not have identifiable cash flows that are largely
independent of the cash flows of other assets and liabilities and of other asset
groups, they are grouped as shared assets.
- 29 -
Though MTFG's domestic banking subsidiary revalued land used for business
operations pursuant to the Law concerning Revaluation of Land, promulgated on
March 31, 1998, the 8 business premises described above made unrealized losses
due to declines in land prices after the revaluation of land. Since the sum of
the undiscounted future cash flows on these business premises was exceeded by
the carrying amount of the business premises after the revaluation, the carrying
amount was reduced to the recoverable amount of the business premises and the
difference of these amounts ((Y)3,541 million) was recognized as an impairment
loss and reported in Special Losses. The recoverable amount used for the
measurement of the impairment loss was the fair value less cost to sell. The
fair value less cost to sell was determined based on the method established and
published by the Director General of National Tax Agency in order to calculate
the land value for a basis of determining the taxable amount subject to land
value tax prescribed by Article 16 of the Land Value Tax Law, etc.
MTFG's domestic banking subsidiary, trust banking subsidiary and a certain
consolidated subsidiary reduced the carrying amount of the above mentioned 30
idle properties and 6 recreation facilities to be disposed to the recoverable
amount of them and the difference ((Y)18,045 million) of these amounts was
recognized as an impairment loss and reported in Special Losses. The recoverable
amount used for the measurement of the impairment loss was the fair value less
cost to sell. The fair value less cost to sell was determined based on the
expected amount for sale or real estate appraisal, etc.
8. Amortization of Bond Discount
Since the Ministerial Ordinance of the Banking Law Another Form was revised
based on Article 40 of Cabinet Ordinance relating to revising a part of the
Ministerial Ordinance, though amortization of bond discount had been reported
separately as "Amortization of debenture discounts" in the previous years, it
was included in "Interest on debentures" in the current fiscal year.
- 30 -
Note related to the Consolidated Statement of Capital Surplus and Retained
Earnings for the year ended March 31, 2004 is as follows:
1. Basis of Presentation
The accompanying Consolidated Statement of Capital Surplus and Retained
Earnings is compiled as required by the Banking Law and in conformity with
accounting principles generally accepted in Japan, which are different in
certain respects as compared to application and disclosure requirements of
International Accounting Standards. For the convenience of readers, the
presentation is modified in certain respects from the original Japanese report.
The amounts are presented in millions of yen and are rounded down to the nearest
million.
- 31 -
Notes related to the Consolidated Statement of Cash Flows for the year
ended March 31, 2004 are as follows:
1. Basis of Presentation
The accompanying Consolidated Statement of Cash Flows is compiled as
required by the Banking Law and in conformity with accounting principles
generally accepted in Japan, which are different in certain respects as compared
to application and disclosure requirements of International Accounting
Standards. For the convenience of readers, the presentation is modified in
certain respects from the original Japanese report. The amounts are presented in
millions of yen and are rounded down to the nearest million.
2. Definition of Cash and Cash Equivalents
For the purpose of reporting cash flows, cash and cash equivalents are
defined as those amounts included in Cash and due from banks excluding time
deposits and negotiable certificates of deposits in other banks.
3. Reconciliation to the Cash and Cash Equivalents
The reconciliation of the Cash and due from banks in the Consolidated
Balance Sheet to the Cash and cash equivalents at end of fiscal year is as
follows:
(in millions)
Cash and due from banks (Y) 6,511,422
Time deposits and negotiable certificates of deposit
in other banks (3,476,897)
-------------
Cash and cash equivalents at end of fiscal year (Y) 3,034,525
=============
- 32 -
Mitsubishi Tokyo Financial Group, Inc., and Subsidiaries
Significant Policies in Preparation of Consolidated Financial Statements
1. Scope of Consolidation
(1) Number of consolidated subsidiaries: 152
Significant companies
The Bank of Tokyo-Mitsubishi, The Mitsubishi Trust and Banking
Ltd. Corporation
(2) Number of non-consolidated subsidiaries: 2
Companies
KOKUSAI Europe Limited KOKUSAI America Incorporated
Non-consolidated subsidiaries are excluded from the scope of
consolidation since their assets, ordinary income, and our ownership
percentage of their net income or retained earnings do not have a
material impact on our results of operations or financial condition.
2. Application of the Equity Method
(1) Number of affiliated companies accounted for by the equity method: 24
Significant companies
Diamond Lease Co., Ltd. The Master Trust Bank of Japan, Ltd.
Diamond Computer Service Co.,
Ltd. M&T Information Technology Co., Ltd.
BOT Lease Co., Ltd. MTBC Bank Deutschland GmbH
(2) Number of non-consolidated subsidiaries and affiliated companies not
accounted for by the equity method: 2
Companies
KOKUSAI Europe Limited KOKUSAI America Incorporated
Non-consolidated subsidiaries and affiliated companies not accounted
for by the equity method are excluded from the scope of the equity
method since our ownership percentage of their net income or retained
earnings do not have a material impact on our consolidated financial
statements.
(3) Although we own 29.3% of voting rights for Suzuyo Sanwa Tatemono Co.,
Ltd. (The company's name was changed to Suzuyo Sanwa Tatemono Co., Ltd.
from Sanwa Tatemono Co., Ltd. in January, 2004. ) ,we do not regard it
as an affiliated company since we do not have the ability to exercise
significant influence over the company due to its commencement of
corporate rehabilitation proceedings pursuant to the Corporate
Rehabilitation Law in June 1994.
3. Fiscal Year Ends of Consolidated Subsidiaries
(1) Fiscal year ends of consolidated subsidiaries are as follows:
October 31 : 2 subsidiaries February 29 : 1 subsidiary
December 31 : 99 subsidiaries March 31 : 50 subsidiaries
(2) Subsidiaries whose fiscal year ends are October 31 are consolidated
based on their financial statements ended on January 31. Other
subsidiaries are consolidated based on financial statements for their
respective fiscal year ends. Significant transactions occurred during
the intervening periods are reflected in the consolidated financial
statements.
4. Valuation of Assets and Liabilities of Consolidated Subsidiaries
All assets and liabilities of consolidated subsidiaries are
measured at fair value when they are included in the scope of
consolidation.
5. Amortization of Goodwill
Goodwill is charged to expenses when incurred.
6. Appropriation of Capital Surplus and Retained Earnings
Consolidated Statements of Capital Surplus and Retained Earnings
is prepared based on capital surplus and retained earnings appropriated
during the fiscal year of consolidated financial statements.
- 33 -
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Segment Information
-------------------
1. Business segment information
[For the year ended March 31, 2004]
--------------------------------------------------------------------------------------------------------------------------------
Trust
Banking Banking Securities Other Total (Elimination) Consolidated
--------------------------------------------------------------------------------------------------------------------------------
Ordinary income 1,784,643 499,122 195,954 207,973 2,687,694 (132,510) 2,555,183
Ordinary income from customers 1,758,067 483,201 179,776 134,137 2,555,183 -- 2,555,183
Internal ordinary income among
segments 26,576 15,920 16,177 73,836 132,510 (132,510) --
Ordinary expenses 1,392,766 368,205 152,144 129,868 2,042,984 (66,173) 1,976,811
Ordinary profit 391,877 130,916 43,810 78,104 644,709 (66,337) 578,371
Assets 82,744,892 19,245,673 6,263,561 1,760,740 110,014,868 (3,399,381) 106,615,487
Depreciation 75,220 15,984 12,927 2,363 106,495 -- 106,495
Capital expenditures 124,701 22,154 9,216 5,235 161,308 -- 161,308
--------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. Other primarily includes credit card and leasing businesses.
3. In the previous fiscal year, MTFG's domestic banking subsidiary and
trust banking subsidiary adopted the transitional treatments prescribed
in the Industry Audit Committee Report No. 25, "Treatment of Accounting
and Auditing Concerning Accounting for Foreign Currency Transactions in
the Banking Industry" issued by the Japanese Institute of Certified
Public Accountants (the "JICPA") on July 29, 2002. According to the
transitional treatments, currency swap transactions and fund swap
transactions for the purpose of funds borrowing/lending in different
currencies were accounted for on an accrual basis as financing
transactions in accordance with the Industry Audit Committee Report No.
20, "Temporary Treatment of Accounting and Auditing Concerning
Accounting for Foreign Currency Transactions in the Banking Industry"
issued by the JICPA on November 14, 2000. In the current fiscal year,
such swap transactions are stated at market value as derivative
transactions and net assets or liabilities are recorded on the balance
sheet in accordance with the standard treatments of the Industry Audit
Committee Report No. 25.
As a result, assets increased by 62,207 million yen, and its effect in
the Banking segment and the Trust Banking segment was 59,734 million yen
and 2,473 million yen, respectively.
In the previous fiscal year, the translation adjustments of forward
exchange transactions and other relevant transactions in MTFG's domestic
banking subsidiary were reported as other in "Other assets" or other in
"Other liabilities" on a net basis by applying the transitional
treatments prescribed in the Industry Audit Committee Report No. 25. In
the current fiscal year, they are reported as trading derivative
financial instruments in "Trading assets" and "Trading liabilities" or
as derivative financial instruments in "Other assets" and "Other
liabilities" on a gross basis in accordance with the standard treatments
of the Report No. 25. The translation adjustments of forward exchange
transactions and other relevant transactions in MTFG's domestic trust
banking subsidiary were reported as other in "Other assets" or other in
"Other liabilities." In the current fiscal year, they are reported as
trading derivative financial instruments in "Trading assets" and
"Trading liabilities" or as derivative financial instruments in "Other
assets" and "Other liabilities." As a result, assets increased by
467,635 million yen, and its effect in the Banking segment and the Trust
Banking segment was 466,600 million yen and 1,034 million yen,
respectively.
4. The derivatives, which were embedded in hybrid financial instruments and
not required to be accounted separately from the host contracts, had
been accounted for on an accrual basis together with the host contracts.
Since the beginning of the current fiscal year, such embedded
derivatives have been measured at market value and their valuation gains
(losses) have been reported in current earnings if they are managed
separately from the host contracts.
Such hybrid financial instruments had been risk adjusted items in the
macro hedge accounting. Since the beginning of the current fiscal year,
MTFG's domestic banking subsidiary and trust banking subsidiary have
adopted the standard treatments of the Industry Audit Committee Report
No. 24 and, therefore, valuation gains (losses) on the derivatives which
used to be risk adjusting instruments in the macro hedge accounting are
reported in current earnings. In response to this change, they changed
the accounting for the embedded derivatives, which had been accounted
together with the host contracts, and measured them at market value and
reported their valuation gains (losses) in current earnings if they are
managed separately from the host contracts. As a result, ordinary profit
increased by 10,435 million yen, and its effect in the Banking segment
and the Trust Banking segment was 8,885 million yen and 1,550 million
yen, respectively.
- 34 -
[For the year ended March 31, 2003] (in millions of yen)
------------------------------------------------------------------------------------------------------------------
Trust
Banking Banking Securities Other Total (Elimination) Consolidated
------------------------------------------------------------------------------------------------------------------
Ordinary income 2,009,207 586,449 97,789 181,959 2,875,405 (102,877) 2,772,528
Ordinary income from
customers 1,975,522 569,401 86,953 140,650 2,772,528 -- 2,772,528
Internal ordinary
income among segments 33,684 17,048 10,835 41,309 102,877 (102,877) --
Ordinary expenses 2,165,525 755,789 131,928 151,444 3,204,687 (71,896) 3,132,790
Ordinary profit (loss) (156,318) (169,339) (34,139) 30,515 (329,281) (30,980) (360,262)
Assets 77,204,126 20,366,715 4,185,210 1,726,646 103,482,699 (4,307,379) 99,175,319
Depreciation 61,738 14,207 8,331 1,964 86,242 -- 86,242
Capital expenditures 68,183 25,116 15,752 1,807 110,860 -- 110,860
------------------------------------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. Other primarily includes credit card and leasing businesses.
3. With the implementation of the "Metropolitan ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Tokyo" (Tokyo Metropolitan Ordinance No.145, 2000) ("the
metropolitan ordinance"), enterprise taxes which were hitherto levied on
income are now levied on gross business profit.
On October 18, 2000, MTFG's domestic banking subsidiary and trust
banking subsidiary filed a lawsuit with the Tokyo District Court against
the Tokyo metropolitan government and the Governor of Tokyo seeking to
void the metropolitan ordinance. MTFG's domestic banking subsidiary and
trust banking subsidiary won the case eventually entirely on March 26,
2002 with a decision of the Tokyo District Court in favor of MTFG's
domestic banking subsidiary and trust banking subsidiary, on the grounds
that the metropolitan ordinance was illegal. The District Court ordered
the metropolitan government to return to MTFG's domestic banking
subsidiary and trust banking subsidiary advance tax payments of
(Y)11,741 million and also awarded to MTFG's domestic banking subsidiary
and trust banking subsidiary damages of (Y)300 million. On March 29,
2002, the metropolitan government lodged an appeal with the Tokyo High
Court against the decision, and on April 9, 2002, the plaintiff banks at
the first trial, including MTFG's domestic banking subsidiary and trust
banking subsidiary, also lodged an appeal. MTFG's domestic banking
subsidiary and trust banking subsidiary won the second-trial case
eventually on January 30, 2003 with a decision of the Tokyo High Court
in the Bank's favor, on the grounds that the metropolitan ordinance was
illegal. The High Court ordered the metropolitan government to return to
MTFG's domestic banking subsidiary and trust banking subsidiary advance
tax payments of (Y)30,409 million. On February 10, 2003, the
metropolitan government lodged a final appeal with the Supreme Court
against the decision, and on February 13, 2003 the plaintiff banks at
the first trial, including MTFG's domestic banking subsidiary and trust
banking subsidiary also lodged a final appeal.
It is the opinion of MTFG's domestic banking subsidiary and trust
banking subsidiary that the metropolitan ordinance is both
unconstitutional and illegal. MTFG's domestic banking subsidiary and
trust banking subsidiary have asserted this opinion in the courts and
the matter is still in litigation. The fact that during this fiscal year
MTFG's domestic banking subsidiary and trust banking subsidiary have
applied the same treatment as in the previous fiscal year, accounting
for enterprise taxes through external standards taxation on banks in
Tokyo in accordance with the metropolitan ordinance, is because MTFG's
domestic banking subsidiary and trust banking subsidiary have deemed it
appropriate at this stage to continue with the same accounting treatment
as before. This accounting treatment does not constitute in any way an
admission on the part of MTFG's domestic banking subsidiary and trust
banking subsidiary either of the constitutionality or of the legality of
the metropolitan ordinance. With the implementation of the municipal
ordinance, enterprise taxes relating to banks in Tokyo were recorded in
Other ordinary expenses in the amount of (Y)19,593 million this fiscal
year. As a result, there was a respective increase in Ordinary loss by
the same amount as compared with the previous standards under which
enterprise taxes were levied on income, and its effect in the Banking
segment and the Trust Banking segment was (Y)14,960 million and (Y)4,633
million, respectively. Since the enterprise taxes in question are not
included in the calculations for accounting for tax effects, there was a
decrease in Assets of (Y)102,488 million as compared with the amount
that it would have been had the enterprise taxes been levied on income
instead of gross profits, and its effect in the Banking segment and the
Trust Banking segment was (Y)99,307 million and (Y)3,180 million,
respectively.
With the implementation of the "Municipal Ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.131, 2000) ("the municipal
ordinance"), enterprise taxes which were hitherto levied on income are
now levied on gross business profit.
On April 4, 2002, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Osaka District Court against the
Osaka municipal government and the Governor of Osaka seeking to void the
municipal ordinance. With the implementation of the "Revision of
Municipal Ordinance regarding the imposition of enterprise taxes through
external standards taxation on banks in Osaka" (Osaka Municipal
Ordinance No.77, 2002) ("the revised municipal ordinance 2002") on May
30, 2002, and the implementation of the "Revision of Municipal Ordinance
regarding the imposition of enterprise taxes through external standards
taxation on banks in Osaka" (Osaka Municipal Ordinance No.14, 2003)
("the revised municipal ordinance 2003") on April 1, 2003, the special
treatment regarding the tax basis is to be applicable from the fiscal
year beginning on April 1, 2003. The enterprise taxes which the banks
should pay to Osaka municipal government this fiscal year are subject to
the supplementary provision 2 of the revised municipal ordinance 2003,
which provides the banks shall pay the enterprise taxes based on the
lesser of gross business profit or income. MTFG's domestic banking
subsidiary and trust banking subsidiary, therefore, filed and paid the
enterprise taxes based on income. The fact that MTFG's domestic banking
subsidiary and trust banking subsidiary filed and paid the enterprise
taxes according to the revised municipal ordinance does not constitute
in any way an admission on the part of MTFG's domestic banking
subsidiary and trust banking subsidiary either of the constitutionality
or of the legality of the revised municipal ordinance 2002 and 2003 as
well as the municipal ordinance. Since the enterprise taxes in question
are not included in the calculations for accounting for tax effects,
there was a decrease in Assets of (Y)17,240 million as compared with the
amount that it would have been had the enterprise taxes been levied on
income instead of gross profits, and its effect in the Banking segment
and the Trust Banking segment was (Y)16,722 million and (Y)517 million.
- 35 -
4. With the implementation of the "Revision of the Local Tax Law"
(Legislation No.9, 2003) on March 31, 2003, the tax basis of enterprise
taxes, which was stipulated as "income and liquidation income" by the
12th paragraph of Article 72 of the Local Tax Law before the revision,
is to be a combination of "amount of added value", "amount of capital"
and "income and liquidation income" from the fiscal year beginning on
April 1, 2004. The enterprise taxes that have tax bases of the "amount
of added value" and the "amount of capital" are not pertinent to the
enterprise taxes that have tax bases of income-related amounts. The
"Revision of the Local Tax Law" also stipulates that the metropolitan
ordinance and the municipal ordinance are to be abolished from the
fiscal year beginning on April 1, 2004.
In connection with the "Revision of the Local Tax Law", the effective
statutory tax rates of MTFG, domestic banking subsidiary and trust
banking subsidiary used in the calculations of deferred tax assets and
liabilities from the fiscal year beginning on April 1, 2004 changed from
42.05% to 40.49%, from 37.98% to 40.46% and from 38.50% to 40.49%,
respectively. As a result, there were an increase in Assets of (Y)65,953
million and its effect in the Banking segment, Trust Banking segment,
Securities segment and Other segment was an increase of (Y)56,480
million, an increase of (Y)9,491 million, a decrease of (Y)18 million
and a decrease of (Y)0 million, respectively.
5. Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.1 "Accounting Standard for Treasury Stock and Reversal of
Legal Reserves" issued by the Accounting Standards Board of Japan on
February 21, 2002. As a result, Ordinary loss decreased by (Y)21,444
million, and its effect in the Banking segment and the Trust Banking
segment was an increase of (Y)15,445 million and a decrease of (Y)36,889
million, respectively.
2. Geographic segment information
[For the year ended March 31, 2004] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
Asia/
North Latin Europe/ Oceania
Japan America America Mid. East excl. Japan Total (Elimination) Consolidated
------------------------------------------------------------------------------------------------------------------------------
Ordinary income 1,866,140 453,420 34,632 251,594 105,176 2,710,964 (155,780) 2,555,183
Ordinary income from
customers 1,791,099 445,309 12,734 212,057 93,982 2,555,183 -- 2,555,183
Internal ordinary
income among segments 75,041 8,111 21,897 39,537 11,193 155,780 (155,780) --
Ordinary expenses 1,480,462 316,804 40,581 198,885 75,377 2,112,111 (135,299) 1,976,811
Ordinary profit (loss) 385,678 136,616 (5,949) 52,709 29,798 598,853 (20,481) 578,371
Assets 89,689,123 12,381,390 1,448,174 8,874,638 4,844,420 117,237,747 (10,622,260) 106,615,487
Notes:
1. Amounts are rounded down to the nearest million yen.
2. North America includes United States and Canada. Latin America primarily
includes the Caribbean, Panama and Brazil. Europe/Middle East primarily
includes United Kingdom, Germany and Netherlands. Asia/Oceania excluding
Japan primarily includes Hong Kong, Singapore and China.
3. In the previous fiscal year, MTFG's domestic banking subsidiary and
trust banking subsidiary adopted the transitional treatments prescribed
in the Industry Audit Committee Report No. 25, "Treatment of Accounting
and Auditing Concerning Accounting for Foreign Currency Transactions in
the Banking Industry" issued by the Japanese Institute of Certified
Public Accountants (the "JICPA") on July 29, 2002. According to the
transitional treatments, currency swap transactions and fund swap
transactions for the purpose of funds borrowing/lending in different
currencies were accounted for on an accrual basis as financing
transactions in accordance with the Industry Audit Committee Report No.
20, "Temporary Treatment of Accounting and Auditing Concerning
Accounting for Foreign Currency Transactions in the Banking Industry"
issued by the JICPA on November 14, 2000. In the current fiscal year,
such swap transactions are stated at market value as derivative
transactions and net assets or liabilities are recorded on the balance
sheet in accordance with the standard treatments of the Industry Audit
Committee Report No. 25.
As a result, assets increased by 62,207 million yen, and its effect in
Japan was 22,231 million yen, and North America was 398 million yen, and
Europe/ Mid. East was 38,159 million yen, and Asia/Oceania was 1,418
million yen, respectively.
In the previous fiscal year, the translation adjustments of forward
exchange transactions and other relevant transactions in MTFG's domestic
banking subsidiary were reported as other in "Other assets" or other in
"Other liabilities" on a net basis by applying the transitional
treatments prescribed in the Industry Audit Committee Report No. 25. In
the current fiscal year, they are reported as trading derivative
financial instruments in "Trading assets" and "Trading liabilities" or
as derivative financial instruments in "Other assets" and "Other
liabilities" on a gross basis in accordance with the standard treatments
of the Report No. 25. The translation adjustments of forward exchange
transactions and other relevant transactions in MTFG's domestic trust
banking subsidiary were reported as other in "Other assets" or other in
"Other liabilities." In the current fiscal year, they are reported as
trading derivative financial instruments in "Trading assets" and
"Trading liabilities" or as derivative financial instruments in "Other
assets" and "Other liabilities." As a result, assets increased by
467,635 million yen, and its effect in Japan was 231,352 million yen,
and North America was 33,880 million yen, and Latin America was 1,937
million yen, and Europe/Mid. East was 168,528 million yen, and
Asia/Oceania was 31,935 million yen, respectively.
4. The derivatives, which were embedded in hybrid financial instruments and
not required to be accounted separately from the host contracts, had
been accounted for on an accrual basis together with the host contracts.
Since the beginning of the current fiscal year, such embedded
derivatives have been measured at market value and their valuation gains
(losses) have been reported in current earnings if they are managed
separately from the host contracts.
Such hybrid financial instruments had been risk adjusted items in the
macro hedge accounting. Since the beginning of the current fiscal year,
MTFG's domestic banking subsidiary and trust banking subsidiary have
adopted the standard treatments of the Industry Audit Committee Report
No. 24 and, therefore, valuation gains (losses) on the derivatives which
used to be risk adjusting instruments in the macro hedge accounting are
reported in current earnings. In response to this change, they changed
the accounting for the embedded derivatives, which had been accounted
together with the host contracts, and measured them at market value and
reported their valuation gains (losses) in current earnings if they are
managed separately from the host contracts. As a result, ordinary profit
increased by 10,435 million yen, and its effect in Japan and North
America was 9,974 million yen and 461 million yen, respectively.
- 36 -
[For the year ended March 31, 2003] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
Asia/
North Latin Europe/ Oceania
Japan America America Mid. East excl. Japan Total (Elimination) Consolidated
------------------------------------------------------------------------------------------------------------------------------
Ordinary income 1,900,135 578,572 66,937 302,172 145,117 2,992,935 (220,406) 2,772,528
Ordinary income from
customers 1,811,995 558,864 36,366 244,205 121,097 2,772,528 -- 2,772,528
Internal ordinary
income among segments 88,140 19,708 30,571 57,966 24,020 220,406 (220,406) --
Ordinary expenses 2,285,305 575,764 67,687 301,134 98,344 3,328,236 (195,446) 3,132,790
Ordinary profit (loss) (385,169) 2,808 (750) 1,038 46,772 (335,301) (24,960) (360,262)
Assets 84,626,818 14,753,060 1,668,179 8,452,586 4,981,919 114,482,564 (15,307,244) 99,175,319
------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. North America includes United States and Canada. Latin America primarily
includes the Caribbean, Panama and Brazil. Europe/Middle East primarily
includes United Kingdom, Germany and Netherlands. Asia/Oceania excluding
Japan primarily includes Hong Kong, Singapore and China.
3. With the implementation of the "Metropolitan ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Tokyo" (Tokyo Metropolitan Ordinance No.145, 2000) ("the
metropolitan ordinance"), enterprise taxes which were hitherto levied on
income are now levied on gross business profit.
On October 18, 2000, MTFG's domestic banking subsidiary and trust
banking subsidiary filed a lawsuit with the Tokyo District Court against
the Tokyo metropolitan government and the Governor of Tokyo seeking to
void the metropolitan ordinance. MTFG's domestic banking subsidiary and
trust banking subsidiary won the case eventually entirely on March 26,
2002 with a decision of the Tokyo District Court in favor of MTFG's
domestic banking subsidiary and trust banking subsidiary, on the grounds
that the metropolitan ordinance was illegal. The District Court ordered
the metropolitan government to return to MTFG's domestic banking
subsidiary and trust banking subsidiary advance tax payments of
(Y)11,741 million and also awarded to MTFG's domestic banking subsidiary
and trust banking subsidiary damages of (Y)300 million. On March 29,
2002, the metropolitan government lodged an appeal with the Tokyo High
Court against the decision, and on April 9, 2002, the plaintiff banks at
the first trial, including MTFG's domestic banking subsidiary and trust
banking subsidiary, also lodged an appeal. MTFG's domestic banking
subsidiary and trust banking subsidiary won the second-trial case
eventually on January 30, 2003 with a decision of the Tokyo High Court
in the Bank's favor, on the grounds that the metropolitan ordinance was
illegal. The High Court ordered the metropolitan government to return to
MTFG's domestic banking subsidiary and trust banking subsidiary advance
tax payments of (Y)30,409 million. On February 10, 2003, the
metropolitan government lodged a final appeal with the Supreme Court
against the decision, and on February 13, 2003 the plaintiff banks at
the first trial, including MTFG's domestic banking subsidiary and trust
banking subsidiary also lodged a final appeal.
It is the opinion of MTFG's domestic banking subsidiary and trust
banking subsidiary that the metropolitan ordinance is both
unconstitutional and illegal. MTFG's domestic banking subsidiary and
trust banking subsidiary have asserted this opinion in the courts and
the matter is still in litigation. The fact that during this fiscal year
MTFG's domestic banking subsidiary and trust banking subsidiary have
applied the same treatment as in the previous fiscal year, accounting
for enterprise taxes through external standards taxation on banks in
Tokyo in accordance with the metropolitan ordinance, is because MTFG's
domestic banking subsidiary and trust banking subsidiary have deemed it
appropriate at this stage to continue with the same accounting treatment
as before. This accounting treatment does not constitute in any way an
admission on the part of MTFG's domestic banking subsidiary and trust
banking subsidiary either of the constitutionality or of the legality of
the metropolitan ordinance. With the implementation of the municipal
ordinance, enterprise taxes relating to banks in Tokyo were recorded in
Other ordinary expenses in the amount of (Y)19,593 million this fiscal
year. As a result, there was a respective increase in Ordinary loss in
Japan by the same amount as compared with the previous standards under
which enterprise taxes were levied on income. Since the enterprise taxes
in question are not included in the calculations for accounting for tax
effects, there was a decrease in Assets of (Y)102,488 million in Japan
as compared with the amount that it would have been had the enterprise
taxes been levied on income instead of gross profits.
With the implementation of the "Municipal Ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.131, 2000) ("the municipal
ordinance"), enterprise taxes which were hitherto levied on income are
now levied on gross business profit.
On April 4, 2002, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Osaka District Court against the
Osaka municipal government and the Governor of Osaka seeking to void the
municipal ordinance. With the implementation of the "Revision of
Municipal Ordinance regarding the imposition of enterprise taxes through
external standards taxation on banks in Osaka" (Osaka Municipal
Ordinance No.77, 2002) ("the revised municipal ordinance 2002") on May
30, 2002, and the implementation of the "Revision of Municipal Ordinance
regarding the imposition of enterprise taxes through external standards
taxation on banks in Osaka" (Osaka Municipal Ordinance No.14, 2003)
("the revised municipal ordinance 2003") on April 1, 2003, the special
treatment regarding the tax basis is to be applicable from the fiscal
year beginning on April 1, 2003. The enterprise taxes which the banks
should pay to Osaka municipal government this fiscal year are subject to
the supplementary provision 2 of the revised municipal ordinance 2003,
which provides the banks shall pay the enterprise taxes based on the
lesser of gross business profit or income. MTFG's domestic banking
subsidiary and trust banking subsidiary, therefore, filed and paid the
enterprise taxes based on income. The fact that MTFG's domestic banking
subsidiary and trust banking subsidiary filed and paid the enterprise
taxes according to the revised municipal ordinance does not constitute
in any way an admission on the part of MTFG's domestic banking
subsidiary and trust banking subsidiary either of the constitutionality
or of the legality of the revised municipal ordinance 2002 and 2003 as
well as the municipal ordinance. Since the enterprise taxes in question
are not included in the calculations for accounting for tax effects,
there was a decrease in Assets of (Y)17,240 million in Japan as compared
with the amount that it would have been had the enterprise taxes been
levied on income instead of gross profits.
- 37 -
4. With the implementation of the "Revision of the Local Tax Law"
(Legislation No.9, 2003) on March 31, 2003, the tax basis of enterprise
taxes, which was stipulated as "income and liquidation income" by the
12th paragraph of Article 72 of the Local Tax Law before the revision,
is to be a combination of "amount of added value", "amount of capital"
and "income and liquidation income" from the fiscal year beginning on
April 1, 2004. The enterprise taxes that have tax bases of the "amount
of added value" and the "amount of capital" are not pertinent to the
enterprise taxes that have tax bases of income-related amounts. The
"Revision of the Local Tax Law" also stipulates that the metropolitan
ordinance and the municipal ordinance are to be abolished from the
fiscal year beginning on April 1, 2004.
In connection with the "Revision of the Local Tax Law", the effective
statutory tax rates of MTFG, domestic banking subsidiary and trust
banking subsidiary used in the calculations of deferred tax assets and
liabilities from the fiscal year beginning on April 1, 2004 changed from
42.05% to 40.49%, from 37.98% to 40.46% and from 38.50% to 40.49%,
respectively. As a result, there was an increase in Assets of (Y)65,953
million in Japan.
5. Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.1 "Accounting Standard for Treasury Stock and Reversal of
Legal Reserves" issued by the Accounting Standards Board of Japan on
February 21, 2002. As a result, Ordinary loss in Japan decreased by
(Y)21,444 million.
3. Ordinary income from overseas operations
(in millions of yen)
----------------------------------------------------------------------------------------
Ordinary income from overseas
Ordinary income from Consolidated operations as a percentage of
overseas operations ordinary income consolidated ordinary income
----------------------------------------------------------------------------------------
For the year ended
March 31, 2004 764,083 2,555,183 29.9%
----------------------------------------------------------------------------------------
For the year ended
March 31, 2003 960,533 2,772,528 34.6%
----------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. Ordinary income from overseas operations consists of income from
transactions of the overseas branches of MTFG's domestic banking
subsidiary and trust banking subsidiary, and MTFG's overseas
subsidiaries (excluding internal ordinary income among consolidated
companies).
- 38 -
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Investment securities
---------------------
Following tables include:
Investment securities
Trading securities, trading commercial paper and trading short-term
corporate bonds in "Trading assets"
Negotiable certificates of deposits in "Cash and due from banks"
Beneficiary certificates of commodity investment trusts in "Commercial
Paper and other debt purchased".
1. Trading securities
(in millions of yen)
----------------------------------------------
As of March 31,2003
----------------------------------------------
Balance sheet Valuation losses recognized on
amount statement of operations
----------------------------------------------
4,829,854 981
----------------------------------------------
2. Marketable debt securities being held to maturity
(in millions of yen)
------------------------------------------------------------------------------------------
As of March 31,2003
-------------------------------------------------------------
Balance sheet
amount Market value Differences Gains Losses
------------------------------------------------------------------------------------------
Domestic bonds 192,446 203,873 11,427 11,427 --
Municipal bonds 122,238 129,778 7,539 7,539 --
Corporate bonds 70,207 74,095 3,887 3,887 --
Foreign bonds 65,886 70,419 4,533 4,534 1
Other 207,649 207,649 -- -- --
------------------------------------------------------------------------------------------
Total 465,981 481,942 15,960 15,961 1
------------------------------------------------------------------------------------------
3. Marketable securities available for sale
(in millions of yen)
------------------------------------------------------------------------------------------
As of March 31,2003
-------------------------------------------------------------
Balance Valuation
Cost sheet amount differences Gains Losses
------------------------------------------------------------------------------------------
Domestic equity securities 3,517,001 3,089,757 (427,244) 191,051 618,296
Domestic bonds 12,150,041 12,271,912 121,780 124,182 2,311
Government bonds 10,490,464 10,592,432 101,968 103,523 1,554
Municipal bonds 431,003 439,162 8,159 8,184 25
Corporate bonds 1,228,573 1,240,316 11,742 12,474 731
Foreign equity securities 19,813 34,455 14,642 15,072 430
Foreign bonds 6,821,736 6,968,748 147,012 158,634 11,621
Other 1,349,624 1,250,708 (98,916) 17,513 116,429
------------------------------------------------------------------------------------------
Total 23,858,217 23,615,582 (242,635) 506,454 749,089
------------------------------------------------------------------------------------------
4. Securities available for sale sold
( in millions of yen)
--------------------------------
For the year ended March 31,2003
--------------------------------
Proceeds Gains Losses
from sales on sales on sales
--------------------------------
27,610,331 252,510 280,803
--------------------------------
5. Principal securities not stated at market value
(in millions of yen)
-------------------------------------------------------------
As of March 31,2003
-------------------------------------------------------------
Balance sheet amount
-------------------------------------------------------------
Debt securities being held to maturity
Foreign bonds 22,193
-------------------------------------------------------------
Securities available for sale
Domestic equity securities 121,170
Domestic corporate bonds 310,530
Foreign bonds 43,877
-------------------------------------------------------------
6. Repayment schedules of securities
(in millions of yen)
-------------------------------------------------------------------------------
As of March 31,2003
----------------------------------------------------------
Due within Due after 1 year Due after 5 years Due after
1 year through 5 years through 10 years 10 years
-------------------------------------------------------------------------------
Domestic bonds 3,186,171 6,736,050 2,568,077 290,641
Government bonds 2,785,137 5,188,677 2,329,234 289,383
Municipal bonds 63,063 378,861 125,528 --
Corporate bonds 337,970 1,168,511 113,314 1,258
Foreign bonds 508,719 4,726,113 1,101,419 738,569
Other 327,808 222,141 68,287 492,003
-------------------------------------------------------------------------------
Total 4,022,698 11,684,306 3,737,783 1,521,215
-------------------------------------------------------------------------------
- 39 -
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Money held in trust
-------------------
1. Money held in trust for trading purpose
(in millions of yen)
---------------------------------------------
As of March 31,2003
---------------------------------------------
Balance sheet Valuation losses recognized on
amount statement of operations
---------------------------------------------
309,800 (9,024)
---------------------------------------------
2. Money held in trust other than trading purpose and being held to maturity
( in millions of yen)
---------------------------------------------------
As of March 31, 2003
---------------------------------------------------
Balance sheet Valuation
Cost amount differences Gains Losses
---------------------------------------------------
105,757 105,757 -- -- --
---------------------------------------------------
Unrealized gains (losses) on securities available for sale
----------------------------------------------------------
The classification of unrealized gains (losses) on securities available for sale
on the consolidated balance sheet is as follows:
(in millions of yen)
---------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------
Valuation differences (242,635)
Securities available for sale (242,635)
Deferred tax assets 20,937
Net valuation differences (221,697)
===========================================================================
Minority interest (2,200)
MTFG's ownership percentage of affiliates' unrealized
gains on securities available for sale 465
Unrealized losses on securities available for sale (223,432)
---------------------------------------------------------------------------
- 40 -
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Notional principal or contract amount, market value and valuation gains (losses)
on derivatives
The publication is omitted in order to be disclosed by EDINET.
[Reference]
1. Derivatives qualified for hedge-accounting
(in billions of yen)
--------------------------------------------------------------------------
As of March 31, 2004
--------------------------------------------------------------------------
Notional principal
or contract amount Market value
--------------------------------------------------------------------------
Interest rate futures 5,921.2 2.4
Interest rate swaps 26,922.0 91.4
Currency swaps 3,994.9 17.9
Other interest rate-related transactions 3.8 0.0
Others 0.6 0.6
--------------------------------------------------------------------------
Total 112.5
--------------------------------------------------------------------------
Note: Derivatives which are accounted for on an accrual basis based on
"Accounting standard for financial instruments" are not included in the
table above.
Notional principal by the remaining life of the interest rate swaps above is as
follows.
(in billions of yen)
-------------------------------------------------------------------------------
As of March 31, 2004
--------------------------------------------------
Due within Due after 1 year Due after
1 year through 5 years 5 years Total
-------------------------------------------------------------------------------
Receive-fix/pay-floater 6,089.5 12,283.2 1,318.4 19,691.2
Receive-floater/pay-fix 3,042.5 2,685.5 1,492.7 7,220.8
Receive-floater/pay-floater -- 10.0 -- 10.0
-------------------------------------------------------------------------------
Total 9,132.0 14,978.7 2,811.2 26,922.0
-------------------------------------------------------------------------------
2. Deferred gains (losses)
(in billions of yen)
-------------------------------------------------------------------------------
As of March 31, 2004
---------------------------------------------------
Deferred gains Deferred losses Net gains (losses)
(A) (B) (A)-(B)
-------------------------------------------------------------------------------
Interest rate futures 17.7 13.8 3.8
Interest rate swaps 325.2 305.1 20.0
Currency swaps 37.2 39.1 (1.9)
Other interest
rate-related transactions 0.1 0.1 --
Others 4.0 4.4 (0.3)
-------------------------------------------------------------------------------
Total 384.3 362.6 21.6
-------------------------------------------------------------------------------
Note: Deferred gains (losses) attributable to the macro hedge accounting as of
March 31, 2004 are included in the above table.
- 41 -
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
[Reference]
Derivatives qualified for hedge-accounting
(in billions of yen)
-----------------------------------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------------------------
Notional principal Deferred gains Deferred losses Net gains (losses)
or contract amount Market value (A) (B) (A)-(B)
-----------------------------------------------------------------------------------------------------------------
Interest rate futures 1,625.4 4.3 58.3 42.4 15.8
Interest rate swaps 42,409.9 206.0 669.6 570.6 98.9
Other interest
rate-related transactions 291.7 (0.2) 0.7 0.6 0.1
Other 662.2 (3.3) 24.8 31.1 (6.2)
-----------------------------------------------------------------------------------------------------------------
Total 206.8 753.5 644.9 108.6
-----------------------------------------------------------------------------------------------------------------
Notes:
1. Derivatives which are accounted for on an accrual basis based on
"Accounting standard for financial instruments" are not included in the
above table.
2. The transactions in the table above are reported on a mark-to-market basis
on the consolidated balance sheet. The valuation differences which do not
correspond to the income/ expenses accruing on hedged items are deferred
asstes/liabilities.
Notional principal by the remaining life of the interest rate swaps above is as
follows.
(in billions of yen)
-------------------------------------------------------------------------------
As of March 31, 2003
--------------------------------------------------
Due within Due after 1 year Due after
1 year through 5 years 5 year Total
-------------------------------------------------------------------------------
Receive-fix/pay-floater 12,411.5 14,407.5 1,178.1 27,997.2
Receive-floater/pay-fix 5,624.2 7,180.3 833.0 13,637.6
Receive-floater/pay-floater 306.2 414.8 53.8 774.9
-------------------------------------------------------------------------------
Total 18,342.0 22,002.8 2,065.0 42,409.9
-------------------------------------------------------------------------------
- 42 -
Non-Consolidated Summary Report
[under Japanese GAAP]
for the Fiscal Year Ended March 31, 2004
Date: May 24, 2004
Company name (code number): Mitsubishi Tokyo Financial Group, Inc.
(8306) (URL http://www.mtfg.co.jp)
Stock exchange listings: Tokyo, Osaka, New York, London
Headquareters: Tokyo
Representative: Shigemitsu Miki, President & CEO
For inquiry: Katsuhiko Ishizuka, Chief Manager -
Financial Policy Division
(Phone) +81-3-3240-8211
Date of resolution of Board of Directors
with respect to the non-consolidated financial statements: May 24, 2004
Date of the Ordinary General Meeting of Shareholders: June 29, 2004
Interim dividends policy: Yes
Unit share system: No
1. Non-consolidated financial data for the year ended March 31, 2004
(1) Operating results
(in millions of yen except per
share data and percentages)
----------------------------------------------------------------------
For the year ended March 31,
---------------------------------
2004 2003
----------------------------------------------------------------------
Operating income 69,321 27,232
Change from the previous year 154.6% (62.5)%
Operating profit 64,735 23,991
Change from the previous year 169.8% (64.9)%
Ordinary profit 64,426 22,415
Change from the previous year 187.4% (67.1)%
Net income 64,474 23,389
Change from the previous year 175.7% (65.5)%
Net income per common share 9,003.89 2,610.44
Net income per common and common
equivalent share 8,862.27 --
Net income as a percentage of
shareholders' equity 1.5% 0.4%
Ordinary profit as a percentage of
total liabilities and shareholders'
equity 1.5% 0.5%
Ordinary profit as a percentage of
operating income 92.9% 82.3%
----------------------------------------------------------------------
Notes:
1. Average number of shares outstanding for the year ended:
March 31, 2004 : (common stock) 6,350,814 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 58,039 shares
March 31, 2003 : (common stock) 5,766,886 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
2. Changes in accounting policy : No
- 43 -
(2) Payment of dividends
(in millions of yen except per share data and percentages)
--------------------------------------------------------------------------------------------------------------------------------
For the year ended March 31,
-------------------------------------------------------------------------------------------
2004 2003
-------------------------------------------------------------------------------------------
Preferred Preferred Preferred Preferred
Common stock stock- class 1 stock- class 2 Common stock stock- class 1 stock- class 2
--------------------------------------------------------------------------------------------------------------------------------
Interim dividends per share 0 41,250 8,100 0 41,250 8,100
Term-end dividends per share 6,000 41,250 8,100 4,000 41,250 8,100
Total dividends per share paid for
the fiscal year 6,000 82,500 16,200 4,000 82,500 16,200
Total dividends for the fiscal year 38,844 6,715 576 24,922 6,715 1,620
Total dividends for the fiscal year
as a percentage of net income 67.9% 165.5%
Total dividends for the fiscal year
as a percentage of shareholders'
equity 1.0% 0.7%
--------------------------------------------------------------------------------------------------------------------------------
(3) Balance sheet highlights
(in millions of yen except per share data and percentages)
----------------------------------------------------------------------
As of March 31,
---------------------------------
2004 2003
----------------------------------------------------------------------
Total assets 4,321,389 4,264,085
Shareholders' equity 4,282,547 4,251,306
Shareholders' equity as a
percentage of total liabilities and
shareholders' equity 99.1% 99.7%
Shareholders' equity per common
share 618,015.33 609,704.98
----------------------------------------------------------------------
Notes:
1. Number of shares outstanding as of:
March 31, 2004 : (common stock) 6,474,038 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 15,000 shares
March 31, 2003 : (common stock) 6,230,506 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
2. Number of treasury stocks outstanding as of:
March 31, 2004 : 2,061 shares
March 31, 2003 : 1,655 shares
2. Earning projections for the fiscal year ending March 31, 2005
(in millions of yen except per share data)
------------------------------------------------------------------------
For the six
months ending For the year
September 30, ending March 31,
2004 2005
------------------------------------------------------------------------
Operating income 187,000 190,000
Ordinary profit 183,000 183,000
Net income 183,000 183,000
Dividend per
share: Common stock -- 6,000
Preferred stock-class 1 41,250 82,500
Preferred stock-class 2 8,100 16,200
------------------------------------------------------------------------
Projected net income per common share for the year ending
March 31, 2005 (yen): 27,191.91
- 44 -
(Reference)
Formulas for computing ratios for the fiscal year ended March 31, 2004 are as
follows.
Net income per common share
Net income - Total dividends on preferred stock
-----------------------------------------------------
Average number of common stock for the fiscal year*
Net income per common and common equivalent share
Net income - Total dividends on preferred stock + Adjustments in net income
-------------------------------------------------------------------------------
Average number of common stock for the fiscal year* + Common equivalent share
Net income as a percentage of shareholders' equity
Net income - Total dividends on preferred stock
-------------------------------------------------------------------------- X 100
{ [Shareholders' equity at the beginning of the fiscal year - Number of
preferred stock at the beginning of the fiscal year X Issue price] +
[Shareholders' equity at fiscal year end - Number of preferred stock at
fiscal year end X Issue price] } / 2
Total dividends for the fiscal year as a percentage of net income
Total dividends for the fiscal year on common stock
--------------------------------------------------------------------- X 100
Net income - Total dividends for the fiscal year on preferred stock
Total dividends for the fiscal year as a percentage of shareholders' equity
Total dividends for the fiscal year on common stock
-------------------------------------------------------------------------- X 100
Shareholders' equity at fiscal year end - Number of preferred stock at
fiscal year end X Issue price
Shareholders' equity per common share
Shareholders' equity at fiscal year end - Deduction from shereholders' equity**
--------------------------------------------------------------------------------
Number of common stock at fiscal year end*
Formula for computing projected earning ratio for the fiscal year ending March
31, 2005 is as follows.
Projected net income per common share
Projected net income - Projected total dividends on preferred stock
---------------------------------------------------------------------
Number of common stock at fiscal year end*
* excluding treasury stock
**number of preferred stock at fiscal year endXissue price + total dividends on
preferred stock
--------------------------------------------------------------------------------
This financial summary report and the accompanying financial highlights contain
forward-looking statements and other forward-looking information relating to the
company and/or the group as a whole (the "forward-looking statements"). The
forward-looking statements are not historical facts and include, reflect or are
otherwise based upon, among other things, the company's current estimations,
projections, views, policies, business strategies, targets, expectations,
assumptions and evaluations with respect to general economic conditions, its
results of operations, its financial condition, its management in general and
other future events. Accordingly, they are inherently susceptible to
uncertainties, risks and changes in circumstances and are not guarantees of
future performance.
Some forward-looking statements represent targets that the company's management
will strive to achieve through the successful implementation of the company's
business strategies. The company may not be successful in implementing its
business strategy, and actual results may differ materially, for a wide range of
possible reasons. Other forward-looking statements reflect the assumptions and
estimations upon which the calculation of deferred tax assets has been based and
are themselves subject to the full range of uncertainties, risks and changes in
circumstances outlined above.
In light of the many risks, uncertainties and possible changes, you are advised
not to put undue reliance on the forward-looking statements. The company is
under no obligation - and expressly disclaims any obligation - to update or
alter the forward-looking statements, except as may be required by any
applicable laws and regulations or stock exchange rules.
For detailed information relating to uncertainties, risks and changes regarding
the forward-looking statements, please see the company's latest annual report
and other disclosures.
--------------------------------------------------------------------------------
- 45 -
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc.
Non-Consolidated Balance Sheets
-----------------------------------------------------------------------------------------------
As of March 31, As of March 31,
(in millions of yen) 2003 2004
-----------------------------------------------------------------------------------------------
Assets:
Current assets:
Cash and bank deposits with banks 34,360 57,571
Deferred tax assets 104 32
Accounts receivable 15,544 51,315
Other 1,422 3
Total current assets 51,432 1.2 % 108,923 2.5 %
Fixed assets:
Premises and equipment:
Leasehold improvements 211 192
Equipment and furniture 156 116
Total premises and equipment 367 308
Intangible assets:
Trademarks 55 51
Computer software 315 501
Other 1 1
Total intangible assets 372 554
Investments and other assets:
Investments in subsidiaries 4,210,347 4,210,347
Deferred tax assets 12 48
Other 521 518
Total investments and other assets 4,210,881 4,210,914
Total fixed assets 4,211,622 98.8 % 4,211,778 97.5 %
Deferred charge:
Organization cost 1,031 687
Total deferred charge 1,031 0.0 % 687 0.0 %
-----------------------------------------------------------------------------------------------
Total assets 4,264,085 100.0 % 4,321,389 100.0 %
-----------------------------------------------------------------------------------------------
Liabilities:
Current liabilities:
Accounts payable 12,241 38,703
Accrued expenses 112 7
Accrued income taxes 292 3
Other 54 53
Reserve for employees' bonuses 78 74
Total current liabilities 12,779 0.3 % 38,842 0.9 %
-----------------------------------------------------------------------------------------------
Total liabilities 12,779 0.3 % 38,842 0.9 %
-----------------------------------------------------------------------------------------------
Shareholders' equity:
Capital stock 1,258,052 29.5 % 1,258,052 29.1 %
Capital surplus:
Legal capital surplus 2,350,244 2,350,244
Other capital surplus 600,000 599,962
Gain from decrease of capital stock and
capital surplus 600,000 599,962
Total capital surplus 2,950,244 69.2 % 2,950,207 68.3 %
Retained earnings:
Unappropriated 44,305 75,876
Total retained earnings 44,305 1.0 % 75,876 1.7 %
-----------------------------------------------------------------------------------------------
Less treasury stock (1,296) (0.0)% (1589) (0.0)%
-----------------------------------------------------------------------------------------------
Total shareholders' equity 4,251,306 99.7 % 4,282,547 99.1 %
-----------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity 4,264,085 100.0 % 4,321,389 100.0 %
-----------------------------------------------------------------------------------------------
See Notes to Non-Consolidated Financial Statements.
- 46 -
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc.
Non-Consolidated Statements of Income
-----------------------------------------------------------------------------------------------
For the year ended For the year ended
(in millions of yen) March 31, 2003 March 31, 2004
-----------------------------------------------------------------------------------------------
Operating income:
Dividends on investments in subsidiaries 22,067 64,548
Management fees from subsidiaries 5,165 4,773
-----------------------------------------------------------------------------------------------
Total operating income 27,232 100.0 % 69,321 100.0 %
-----------------------------------------------------------------------------------------------
Operating expenses:
General and administrative expenses 3,240 4,585
-----------------------------------------------------------------------------------------------
Total operating expenses 3,240 11.9 % 4,585 6.6 %
-----------------------------------------------------------------------------------------------
Operating profit 23,991 88.1 % 64,735 93.4 %
-----------------------------------------------------------------------------------------------
Non-operating income:
Interest on deposits 6 4
Interest on securities 4,729 --
Fees for software leases -- 15
Other 125 15
-----------------------------------------------------------------------------------------------
Total non-operating income 4,861 17.8 % 35 0.0 %
-----------------------------------------------------------------------------------------------
Non-operating expenses:
Interest on convertible bonds 4,729 --
Amortization of organization cost 343 343
Amortization of stock issuance costs 1,351 --
Other 13 0
-----------------------------------------------------------------------------------------------
Total non-operating expenses 6,437 23.6 % 344 0.5 %
-----------------------------------------------------------------------------------------------
Ordinary profit 22,415 82.3 % 64,426 92.9 %
-----------------------------------------------------------------------------------------------
Special losses:
Losses on sales of fixed assets 2 --
Losses on disposition of fixed assets 269 --
-----------------------------------------------------------------------------------------------
Total special losses 272 1.0 % -- -- %
-----------------------------------------------------------------------------------------------
Income before income taxes 22,143 81.3 % 64,426 92.9 %
-----------------------------------------------------------------------------------------------
Income taxes-current 859 (84)
Income taxes-deferred (2,105) 36
Total income taxes (1,245) (4.6)% (47) (0.1)%
-----------------------------------------------------------------------------------------------
Net income 23,389 85.9 % 64,474 93.0 %
-----------------------------------------------------------------------------------------------
Unappropriated retained earnings brought forward 25,083 15,215
Interim cash dividends 4,167 3,812
Unappropriated retained earnings at fiscal year end 44,305 75,876
-----------------------------------------------------------------------------------------------
See Notes to Non-Consolidated Financial Statements.
- 47 -
Notes to Non-Consolidated Financial Statements
The accompanying Non-Consolidated Financial Statements are compiled as
required by the Securities and Exchange Law of Japan and in conformity with
accounting principles generally accepted in Japan, which are different in
certain respects as compared to the application and disclosure requirements of
International Accounting Standards. For the convenience of readers, the
presentation is modified in certain respects from the original Japanese report.
The amounts are presented in millions of yen and are rounded down to the nearest
million.
Significant accounting policies
1. Investments
Investments in subsidiaries are stated at cost determined by the
moving-average method.
2. Depreciation for fixed assets
Depreciation for premises and equipment is computed using the
declining-balance method based on the following estimated useful lives. The
range of estimated useful lives is principally as follows:
Leasehold improvements 3 years to 50 years
Equipment and furniture 3 years to 20 years
Amortization for intangible assets is computed by the straight-line method
over estimated useful lives. Costs of computer software developed or
obtained for internal use are deferred and amortized using the
straight-line method over an estimated useful life of 5 years.
3. Deferred charges
Organization costs are deferred and amortized using the straight-line
method over 5 years pursuant to the Commercial Code of Japan.
4. Reserve
A reserve for employees' bonuses is provided for the payment of employees'
bonuses based upon estimated amounts of the future payments attributed to
the current fiscal year.
5. Consumption Taxes
National Consumption Taxes and Local Consumption Taxes are excluded from
transaction amounts.
6. Consolidated Corporate-tax System
MTFG has adopted the consolidated corporate-tax system.
Change in accounting policies
Effective April 1, 2003, MTFG adopted "Accounting Standard for Impairment
of Fixed Assets" issued by the Business Accounting Council on August 9,
2002 and Financial Accounting Standard Implementation Guidance No. 6,
"Implementation Guidance for Accounting Standard for Impairment of Fixed
Assets" issued by the Accounting Standards Board of Japan on October 31,
2003, because their early adoption in the fiscal year ended March 31, 2004
was permitted. There is no effect on profit (loss) for the current fiscal
year or total shareholders' equity as of the fiscal year end attributable
to this change.
- 48 -
Notes related to the Non-Consolidated Balance Sheet are as follows :
1. Accumulated depreciation on premises and equipment (Y)215 million
2. Short-term receivables due from subsidiaries (Y)90,189 million
3. Aggregated number of shares authorized to be issued
Common stock 22,000,000 shares
Preferred stock 336,400 shares
Aggregated number of shares issued
Common stock 6,476,099.77 shares
Preferred stock 96,400 shares
4. Treasury stock
Common stock 2,061.16 shares
5. MTFG indemnifies the Bankers Association of
Deutschland for the deposit liability of the German
branches of Bank of Tokyo Mitsubishi pursuant to
regulation of the Deposit Insurance Corporation of
Deutschland. (Y)87,751 million
Notes related to the Non-Consolidated Statement of Income are as follows:
1. Operating income on transactions with subsidiaries
Dividends from investments in subsidiaries (Y)64,548 million
Management fees from subsidiaries (Y)4,773 million
2. Non-operating income on transactions with subsidiaries
Fees for software leases (Y)15 million
3. Principal items in general and administrative expenses are as follows:
Outsourcing expenses (Y)1,447 million
Salaries and employee benefits (Y)1,219 million
Rental expenses (Y)409 million
Stock exchange fees (Y)280 million
Depreciation expenses (Y)200 million
A note related to securities is as follows:
Fair value is not readily determinable for Investments in subsidiaries.
Notes related to income taxes are as follows:
1. The tax effects of significant temporary differences which resulted in
deferred tax assets and liabilities are as follows:
Current assets:
Deferred tax assets:
Excess of deductible amount as Reserve
for employees' bonuses (Y)30 million
Other (Y)2 million
-------------------
Total (Y)32 million
- 49 -
Fixed assets:
Deferred tax assets:
Operating loss carryforwards from Local taxes (Y)20 million
Operating loss carryforwards from
Inhabitant taxes (Y)16 million
Other (Y)10 million
-------------------
Total (Y)48 million
Total deferred tax assets (Y)80 million
2. A reconciliation between the normal effective statutory tax rate and the
actual effective tax rate is as follows:
Normal effective statutory tax rate 40.69%
Reconciliation:
Dividends and others exempted for income
tax purposes (40.76%)
Other 0.00%
--------
Actual effective tax rate (0.07%)
Per share information :
Shareholders' equity per common share (Y)618,015.32
Basic net income per common share (Y)9,003.89
Diluted net income per common share (Y)8,862.26
(Notes)
Bases for computing basic net income per common share and diluted
net income per common share:
Basic net income per common share (Y)9,003.89
Net income (Y)64,474 million
Total dividends on preferred stock (Y)7,292 million
Net income attributable to common shares (Y)57,182 million
Average number of common shares outstanding
for the fiscal year 6,350,814 shares
Diluted net income per common share (Y)8,862.26
Adjustment to net income (Y)576 million
Dividends on preferred stock-class 2 (Y)576 million
Increase of common shares 166,566 shares
Preferred stock-class 2 166,566 shares
- 50 -
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc.
Proposed Appropriations of Retained Earnings and Other Capital Surplus
----------------------------------------------------------------------------------------------------------------------------
For the year For the year
ended ended
(in millions of yen) March 31, 2003 March 31, 2004
----------------------------------------------------------------------------------------------------------------------------
Appropriations of Retained Earnings
----------------------------------------------------------------------------------------------------------------------------
Unappropriated retained earnings at
fiscal year end 44,305 75,876
----------------------------------------------------------------------------------------------------------------------------
Appropriations:
Cash dividends on preferred stock-class 1 (41,250 yen per share) 3,357 (41,250 yen per share) 3,357
Cash dividends on preferred stock-class 2 (8,100 yen per share) 810 (8,100 yen per share) 121
Cash dividends on common stock (4,000 yen per share) 24,922 (6,000 yen per share) 38,844
----------------------------------------------------------------------------------------------------------------------------
Total 29,089 42,323
----------------------------------------------------------------------------------------------------------------------------
Unappropriated retained earnings to be
carried forward 15,215 33,553
----------------------------------------------------------------------------------------------------------------------------
Appropriations of Other Capital Surplus
----------------------------------------------------------------------------------------------------------------------------
Other capital surplus at fiscal year end 600,000 599,962
With respect to other capital surplus,
the Company proposes to appropriate
(Y)244.2 billion to use in redeeming
the shares of Class 1 Preferred Stock
through a resolution of the Board of
Directors as provided for in the
Commercial Code and Article 15,
Paragraph 2 of the Articles of
Incorporation of the Company.
Other capital surplus to be carried forward 600,000 599,962
----------------------------------------------------------------------------------------------------------------------------
- 51 -
Mitsubishi Tokyo Financial Group, Inc.
Changes of Directors and Corporate Auditors
-------------------------------------------
Changes in Directors have been disclosed separately on May 24, 2004.
1
[LOGO OF MTFG]
----------------------------------------
Selected Financial Information
under Japanese GAAP
For the Fiscal Year Ended March 31, 2004
----------------------------------------
Mitsubishi Tokyo Financial Group, Inc.
Mitsubishi Tokyo Financial Group, Inc.
[Contents]
1 Consolidated Financial Highlights under Japanese GAAP
for the Fiscal Year Ended March 31, 2004
1. Financial Results [Consolidated] 1
2. Valuation Differences on
Securities [Consolidated], [Trust] 2
3. Risk-Adjusted Capital Ratio Based on the
Standards of the BIS [Consolidated] 3
4. Return on Equity [Consolidated] 3
2 Loan Portfolio and Other
1. Risk-Monitored Loans [Consolidated], [Trust] 4
[Consolidated and Trust]
2. Classification of Risk-Monitored Loans [Consolidated], [Trust] 5
3. Allowance for Loan Losses [Consolidated], [Trust] 6
4. Coverage Ratio against Risk-Monitored Loans [Consolidated] 6
5. Disclosed Claims under the Financial
Reconstruction Law (the "FRL") [Total of the 2 Banks*] 7
6. Status of Secured Coverage on Disclosed
Claims under the FRL [Total of the 2 Banks*] 7
7. Progress in the Disposal of Problem Assets [Total of the 2 Banks*] 8
8. Classification of Loans by Type of Industry [Total of the 2 Banks*] 12
[Trust]
9. Foreign Loans [Total of the 2 Banks*] 14
10. Loans and Deposits [Total of the 2 Banks*] 15
11. Domestic Deposits [Total of the 2 Banks*] 15
12. Number of Employees [Total of the 2 Banks*] 15
13. Number of Offices [Total of the 2 Banks*] 15
14. Status of Deferred Tax Assets [Total of the 2 Banks*] 16
15. Employees' Retirement Benefits [Consolidated] 18
16. Earning Projections for the Fiscal Year
Ending March 31, 2005 [Consolidated] 19
[Non-Consolidated]
Note: * "Total of the 2 Banks" stands for the aggregated non-consolidated
figures of The Bank of Tokyo-Mitsubishi, Ltd. and The Mitsubishi Trust
and Banking Corporation.
Mitsubishi Tokyo Financial Group, Inc.
1 Consolidated Financial Highlights under Japanese GAAP
for the Fiscal Year Ended March 31, 2004
1. Financial Results (in millions of yen)
---------------------------------------------------------------------------------------------------
Increase/
For the year ended For the year ended (Decrease)
March 31, 2003 (A) March 31, 2004 (B) (B) - (A)
---------------------------------------------------------------------------------------------------
Gross profits 1,747,325 1,763,250 16,194
Net interest income 1,058,810 1,029,154 (29,656)
Trust fees 101,442 86,461 (14,980)
Credit costs for trust accounts (1) (8,136) (10,045) (1,909)
Net fees and commissions 354,717 421,684 66,966
Net trading profits 79,907 135,647 55,739
Net other business income 152,447 90,573 (61,874)
Net gains on debt securities 68,260 (25,017) (93,278)
General and administrative expenses 991,226 980,438 (10,787)
Net business profits before credit costs for
trust accounts and provision for formula
allowance for loan losses 764,235 793,127 28,892
Provision for formula allowance for loan
losses(2) 38,260 -- (38,260)
Net business profits* 717,838 783,081 65,243
Net non-recurring losses (1,078,100) (204,710) 873,390
Credit related costs (3) (492,380) (156,963) 335,417
Losses on loan charge-offs (211,059) (70,472) 140,586
Provision for specific allowance for
loan losses (117,747) -- 117,747
Losses on sales of loans to the
Resolution and Collection Corporation (75,263) (39,418) 35,844
Provision for allowance for loans to
specific foreign borrowers 14,224 -- (14,244)
Other credit related costs (102,535) (47,072) 55,463
Net losses on equity securities (488,030) 3,371 491,401
Gains on sales of equity securities 80,344 90,571 10,227
Losses on sales of equity securities (219,654) (74,470) 145,184
Losses on write down of equity securities (348,719) (12,729) 335,990
Equity in profit (loss) of affiliates (3,532) 3,595 7,128
Other (94,157) (54,713) 39,443
---------------------------------------------------------------------------------------------------
Ordinary profit (loss) (360,262) 578,371 938,633
---------------------------------------------------------------------------------------------------
Net special gains 19,520 301,531 282,011
Reversal of allowance for loan losses (4) -- 239,965 239,965
Refund of enterprise taxes by the Tokyo
Metropolitan Government -- 41,989 41,989
Gains on transfer of the substitutional
portion of future pension obligations -- 26,503 26,503
Gain on loans charged-off (5) 44,281 26,425 (17,856)
Losses on impairment of fixed assets -- (21,586) (21,586)
Income (Loss) before income taxes and others (340,742) 879,903 1,220,645
Income taxes-current 55,919 45,956 (9,963)
Income taxes-deferred (237,065) 230,650 467,715
Minority interest 1,898 42,480 40,581
---------------------------------------------------------------------------------------------------
Net income (loss) (161,495) 560,815 722,310
---------------------------------------------------------------------------------------------------
Note:
* Net business profits = The 2 Banks' non-consolidated net business profits +
Other consolidated entities' gross profits - Other consolidated entities'
general and administrative expenses - Other consolidated entities'
provision for formula allowance for loan losses - Inter-company
transactions
(Reference)
---------------------------------------------------------------------------------------------------
Total credit costs (1)+(2)+(3)+(4) 538,777 (72,955) (611,733)
---------------------------------------------------------------------------------------------------
Total credit costs (1)+(2)+(3)+(4)+(5) 494,496 (99,380) (593,876)
---------------------------------------------------------------------------------------------------
Number of consolidated subsidiaries 184 154 (32)
Number of affiliated companies accounted for by
the equity method 31 24 (7)
---------------------------------------------------------------------------------------------------
1
Mitsubishi Tokyo Financial Group, Inc.
2. Valuation Differences on Securities
(1) Valuation method of securities
Trading securities Market value (valuation differences are recorded
as profits or losses)
Debt securities being held to
maturity Amortized cost
Securities available for sale Market value (valuation differences are included
in shareholders' equity, net of income taxes)
(Reference) Securities in money held in trust
Trading purposes Market value (valuation differences are recorded
as profits or losses)
Being held to maturity Amortized cost
Other Market value (valuation differences are included
in shareholders' equity, net of income taxes)
(2) Valuation differences
(in millions of yen)
-----------------------------------------------------------------------------------------------------
As of March 31, 2004 As of March 31, 2003
------------------------------------------------------------------
Valuation Valuation
differences differences
----------------------------- ----------------
(A) (A) - (B) Gains Losses (B) Gains Losses
-----------------------------------------------------------------------------------------------------
Debt securities being held
to maturity 9,004 (6,955) 10,228 1,224 15,960 15,961 1
Securities available for sale 947,514 1,190,149 1,114,592 167,078 (242,635) 506,454 749,089
Domestic equity securities 785,328 1,212,573 891,328 105,999 (427,244) 191,051 618,296
Domestic bonds 3,394 (118,475) 40,723 37,328 121,870 124,182 2,311
Other 158,790 96,052 182,541 23,750 62,738 191,220 128,481
Total 956,518 1,183,193 1,124,821 168,302 (226,675) 522,415 749,090
Domestic equity securities 785,328 1,212,573 891,328 105,999 (427,244) 191,051 618,296
Domestic bonds 9,778 (123,518) 48,325 38,546 133,297 135,609 2,311
Other 161,411 94,139 185,167 23,755 67,271 195,755 128,483
-----------------------------------------------------------------------------------------------------
(3) Market Value Information for Securities in Trusts with Contracts for
Compensating the Principal
Money Trusts (jointly operated designated money in trust)
A. Market Value of Securities (in millions of yen)
---------------------------------------------------
Trust Assets at Market Valuation
period end Value Gains
---------------------------------------------------
March 31, 2004 219,913 226,985 7,071
---------------------------------------------------
Note : A fair value is given where a fair value can be calculated for a
market-value equivalent.
B. Valuation Gains of Derivative Transaction : 2,721 millions of yen
Loan Trusts
A. Market Value of Securities (in millions of yen)
---------------------------------------------------
Trust Assets at Market Valuation
period end Value Gains
---------------------------------------------------
March 31, 2004 139,693 152,966 13,272
---------------------------------------------------
Note : A fair value is given where a fair value can be calculated for a
market-value equivalent.
B. Valuation Gains of Derivative Transaction : 12,024 millions of yen
2
Mitsubishi Tokyo Financial Group, Inc.
3. Risk-Adjusted Capital Ratio Based on the Standards of the BIS
(in billions of yen except percentages)
--------------------------------------------------------------------------------------------------
As of
March 31,
2004 (A) Increase/ Increase/ As of As of
(Preliminary (Decrease) (Decrease) March 31, September 30,
basis) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
--------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital ratio 12.95% 2.10% 0.50% 10.84% 12.44%
(2) Tier 1 capital 3,859.4 730.7 175.7 3,128.6 3,683.7
(3) Tier 2 capital includable as
qualifying capital 3,157.8 310.2 30.6 2,847.6 3,127.2
i) The amount of unrealized
gains on investment
securities, includable
as qualifying capital 428.0 428.0 285.5 -- 142.4
ii) The amount of land
revaluation excess
includable as qualifying
capital 133.6 (13.7) (7.1) 147.3 140.8
iii) Subordinated debt 1,993.9 (18.2) (168.1) 2,012.1 2,162.1
(4) Tier 3 capital includable as
qualifying capital 30.0 -- 0.1 30.0 29.9
(5) Deductions from total
qualifying capital 54.5 16.6 3.4 37.9 51.0
(6) Total qualifying capital
(2)+(3)+(4)-(5) 6,992.7 1,024.3 202.9 5,968.4 6,789.7
(7) Risk-adjusted assets 53,996.7 (1,052.8) (546.5) 55,049.6 54,543.3
--------------------------------------------------------------------------------------------------
4. Return on Equity
(%)
----------------------------------------------
For the year For the
ended Increase/ year ended
March 31, (Decrease) March 31,
2004 (A) (A) - (B) 2003 (B)
----------------------------------------------
ROE * 17.97 23.95 (5.97)
----------------------------------------------
Note: * ROE is computed as follows:
(Net income - Dividends on preferred stocks)
--------------------------------------------------------------------- x 100
{(Shareholders' equity at beginning of period - Number of preferred
stocks at beginning of period x Issue price - Land revaluation excess
at beginning of period - Unrealized gains on securities available for
sale at beginning of period) + (Shareholders' equity at end of period
- Number of preferred stocks at end of period x Issue price - Land
revaluation excess at end of period - Unrealized gains on securities
available for sale at end of period)} / 2
3
Mitsubishi Tokyo Financial Group, Inc.
2 Loan Portfolio and Other
1. Risk-Monitored Loans
(Non-accrual loans, accruing loans contractually past due 3 months or more
and restructured loans)
[Consolidated]
(in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 46,138 (50,391) (28,406) 96,530 74,545
Past due loans 693,477 (514,628) (239,992) 1,208,106 933,469
Accruing loans contractually
past due 3 months or more 12,260 (8,139) (5,422) 20,399 17,682
Restructured loans 701,648 (542,783) (185,693) 1,244,431 887,341
Total 1,453,524 (1,115,943) (459,515) 2,569,468 1,913,039
-------------------------------------------------------------------------------------------------------
Amount of direct reduction 528,339 (183,330) (77,033) 711,669 605,373
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 46,590,131 (360,231) 169,430 46,950,363 46,420,701
-------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
Loans to customers in bankruptcy 0.09% (0.10)% (0.06)% 0.20% 0.16%
Past due loans 1.48% (1.08)% (0.52)% 2.57% 2.01%
Accruing loans contractually
past due 3 months or more 0.02% (0.01)% (0.01)% 0.04% 0.03%
Restructured loans 1.50% (1.14)% (0.40)% 2.65% 1.91%
Total 3.11% (2.35)% (1.00)% 5.47% 4.12%
-------------------------------------------------------------------------------------------------------
[Trust accounts]
(in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 1,588 (2,781) (1,589) 4,369 3,177
Past due loans 1,292 (928) (218) 2,220 1,511
Accruing loans contractually
past due 3 months or more 370 (548) (230) 919 601
Restructured loans 32,568 (1,087) 2,822 33,655 29,745
Total 35,819 (5,345) 784 41,165 35,035
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 621,976 (261,525) (141,077) 883,501 763,053
-------------------------------------------------------------------------------------------------------
[Consolidated and Trust accounts]
(in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 47,727 (53,172) (29,995) 100,899 77,723
Past due loans 694,769 (515,557) (240,211) 1,210,327 934,980
Accruing loans contractually
past due 3 months or more 12,631 (8,687) (5,653) 21,319 18,284
Restructured loans 734,216 (543,871) (182,870) 1,278,087 917,086
Total 1,489,344 (1,121,288) (458,730) 2,610,633 1,948,075
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 47,212,108 (621,756) 28,352 47,833,865 47,183,755
-------------------------------------------------------------------------------------------------------
4
Mitsubishi Tokyo Financial Group, Inc.
2. Classification of risk-monitored Loans
Classification by geographic area
[Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Domestic* 1,126,078 (1,037,337) (505,266) 2,163,416 1,631,345
Overseas* 327,446 (78,605) 45,751 406,051 281,694
Asia 26,656 (40,010) (9,983) 66,666 36,639
Indonesia 4,578 (9,770) (5,848) 14,348 10,426
Thailand 10,562 (3,032) 1,903 13,595 8,659
Hong Kong 4,717 (11,821) (2,557) 16,539 7,274
Other 6,798 (15,385) (3,480) 22,183 10,279
United States of America 230,520 17,741 67,765 212,778 162,754
Other 70,269 (56,337) (12,030) 126,606 82,299
-------------------------------------------------------------------------------------------------------
Total 1,453,524 (1,115,943) (459,515) 2,569,468 1,913,039
-------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
[Trust accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Domestic 35,819 (5,345) 784 41,165 35,035
-------------------------------------------------------------------------------------------------------
Classification by type of industry of borrowers
[Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Domestic* 1,126,078 (1,037,337) (505,266) 2,163,416 1,631,345
Manufacturing 187,410 (116,522) 3,229 303,932 184,181
Construction 82,520 (174,853) (132,618) 257,374 215,138
Wholesale and Retail 229,195 (246,175) (115,080) 475,371 344,275
Banks and other financial
institutions 21,523 (3,419) 9,096 24,942 12,426
Real estate 312,973 (202,738) (72,661) 515,712 385,634
Services 147,493 (102,331) (35,061) 249,824 182,554
Other industries 54,793 (48,286) (24,454) 103,079 79,247
Consumer 90,168 (143,010) (137,716) 233,178 227,885
Overseas* 327,446 (78,605) 45,751 406,051 281,694
Banks and other financial
institutions 83,728 77,605 81,641 6,122 2,087
Commercial and industrial 210,576 (168,661) (62,809) 379,238 273,385
Other 33,141 12,449 26,919 20,691 6,221
-------------------------------------------------------------------------------------------------------
Total 1,453,524 (1,115,943) (459,515) 2,569,468 1,913,039
-------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
[Trust accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Domestic 35,819 (5,345) 784 41,165 35,035
Manufacturing 4,465 459 2,719 4,005 1,746
Construction 63 (1,653) (1,171) 1,717 1,235
Wholesale and Retail 2,197 (302) 163 2,500 2,033
Banks and other financial
institutions -- -- -- -- --
Real estate 5,894 (725) 145 6,619 5,748
Services 1,057 (676) (237) 1,733 1,294
Other industries 16,972 (1,237) (1,104) 18,210 18,076
Consumer 5,168 (1,209) 269 6,377 4,899
-------------------------------------------------------------------------------------------------------
Total 35,819 (5,345) 784 41,165 35,035
-------------------------------------------------------------------------------------------------------
5
Mitsubishi Tokyo Financial Group, Inc.
3. Allowance for Loan Losses
[Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Allowance for loan losses 832,638 (464,653) (210,660) 1,297,292 1,043,299
Formula allowance for loan
losses 602,263 (203,752) (81,691) 806,015 683,955
Specific allowance for loan
losses 224,102 (253,796) (126,038) 477,898 350,141
Allowance for loans to specific
foreign borrowers 6,272 (7,105) (2,929) 13,378 9,202
-------------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Special internal reserves 6,135 (2,290) (1,148) 8,425 7,283
Allowance for bad debts 799 (202) (126) 1,002 926
-------------------------------------------------------------------------------------------------------
4. Coverage Ratio against Risk-Monitored Loans
[Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Allowance for loan losses (I) 832,638 (464,653) (210,660) 1,297,292 1,043,299
Risk-monitored loans (II) 1,453,524 (1,115,943) (459,515) 2,569,468 1,913,039
Coverage ratio (I)/(II) 57.28% 6.79% 2.74% 50.48% 54.53%
-------------------------------------------------------------------------------------------------------
6
Mitsubishi Tokyo Financial Group, Inc.
5. Disclosed Claims under the Financial Reconstruction Law (the "FRL")
[Banking and Trust accounts : Total of the 2 Banks] (in millions of yen)
--------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
--------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 140,428 (86,028) (41,892) 226,457 182,320
Claims under high risk 541,309 (490,064) (204,437) 1,031,373 745,746
Claims under close observation 737,350 (620,094) (191,877) 1,357,445 929,227
--------------------------------------------------------------------------------------------------
Total (1) 1,419,088 (1,196,187) (438,207) 2,615,276 1,857,295
--------------------------------------------------------------------------------------------------
Normal claims 46,887,434 551,490 462,711 46,335,943 46,424,722
--------------------------------------------------------------------------------------------------
6. Status of Secured Coverage on Disclosed Claims under the FRL
[Banking and Trust accounts : Total of the 2 Banks] (in millions of yen)
--------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
--------------------------------------------------------------------------------------------------
Secured coverage amount (2) 993,672 (977,606) (400,145) 1,971,278 1,393,817
Allowance for loan losses 320,359 (351,483) (141,548) 671,843 461,908
Reserve for financial support
to specific borrowers -- (531) -- 531 --
Collateral, guarantees, etc. 673,312 (625,590) (258,596) 1,298,903 931,909
--------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 70.02% (5.35)% (5.02)% 75.37% 75.04%
--------------------------------------------------------------------------------------------------
Secured Coverage of Each Category of Disclosed Claims under the FRL
[Banking and Trust accounts : Total of the 2 Banks] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
financial amount by Coverage
Allowance support to collateralized ratio Coverage ratio
Disclosed for loan specific and guaranteed [(B)+(C)] / [(B)+(C)+(D)] /
Category amount (A) losses (B) borrowers (C) loans (D) [(A)-(D)] (A)
-----------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and 140,428 15,770 -- 124,654 99.97% 99.99%
substantially bankrupt debtors [226,457] [19,961] -- [206,495] [100.00%] [100.00%]
Claims under high risk 541,309 165,737 -- 286,271 64.98% 83.50%
[1,031,373] [386,331] -- [467,567] [68.52%] [82.79%]
Claims under close observation 737,350 138,852 -- 262,386 29.23% 54.41%
[1,357,445] [265,549] [531] [624,840] [36.31%] [65.63%]
Sub total (1) 1,419,088 320,359 -- 673,312 42.95% 70.02%
[2,615,276] [671,843] [531] [1,298,903] [51.07%] [75.37%]
Normal claims 46,887,434
[46,335,943]
Total (2) 48,306,522
[48,951,219]
Sub total (1) / Total (2) 2.93%
[5.34%]
-----------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2004. The lower figures with bracket
are as of March 31, 2003.
7
Mitsubishi Tokyo Financial Group, Inc.
7. Progress in the Disposal of Problem Assets [Banking and Trust accounts :
Total of the 2 Banks]
(excluding claims under close observation)
(1) Assets categorized as problem assets as of September 30, 2000 based on the FRL (in billions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of As of
September March 31, September March 31, September March 31, September March 31,
30, 2000 2001 30, 2001 2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt
debtors 513.6 280.6 274.1 213.9 253.7 68.7 34.9 23.0 (11.9)
Claims under high risk 1,580.2 1,400.4 1,141.3 840.1 378.5 37.4 33.2 8.7 (24.5)
----------------------------------------------------------------------------------------------------------------------------
Total 2,093.8 1,681.0 1,415.4 1,054.1 632.2 106.2 68.2 31.8 (36.4)
----------------------------------------------------------------------------------------------------------------------------
(A) (B)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 0.1
Re-constructive disposition 2.1
Improvements in financial status due to
re-constructive disposition 0.2
Loan sales to secondary market 5.2
Charge-off 13.9
Other 14.6
Collection of claims 14.6
Improvements in financial status 0.0
------------------------------------------------------------------
Total 36.4(B)
------------------------------------------------------------------
Above (A) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 5.3
Quasi-legal liquidation --
Split-off of problem loans 0.5
Partial charge-off of smaller balance
loans 5.8
Entrust through the managed trust
method to the Resolution and Collection
Corporation 1.3
------------------------------------------------------------------
Total 13.0
------------------------------------------------------------------
(2) Assets newly categorized as problem assets during second half of fiscal 2000 based on the FRL (in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of
March 31, September March 31, September March 31, September March 31,
2001 30, 2001 2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
-----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 117.9 103.8 99.2 46.9 28.6 27.1 17.6 (9.5)
Claims under high risk 769.0 693.0 538.9 346.0 79.4 55.7 30.9 (24.8)
-----------------------------------------------------------------------------------------------------------------------------------
Total 887.0 796.8 638.1 393.0 108.0 82.8 48.5 (34.3)
-----------------------------------------------------------------------------------------------------------------------------------
(C) (D)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 0.5
Re-constructive disposition 0.0
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 5.5
Charge-off 7.0
Other 21.0
Collection of claims 19.9
Improvements in financial status 1.0
------------------------------------------------------------------
Total 34.3(D)
------------------------------------------------------------------
Above (C) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 2.8
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 14.7
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
------------------------------------------------------------------
Total 17.6
------------------------------------------------------------------
8
Mitsubishi Tokyo Financial Group, Inc.
(3) Assets newly categorized as problem assets during first half of fiscal 2001 based on the FRL (in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of
September March 31, September March 31, September March 31,
30, 2001 2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
-----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt
debtors 30.2 42.1 27.9 19.3 12.3 7.3 (4.9)
Claims under high risk 337.1 170.3 101.6 53.7 31.7 19.4 (12.2)
-----------------------------------------------------------------------------------------------------------------------------------
Total 367.3 212.5 129.6 73.0 44.0 26.8 (17.2)
-----------------------------------------------------------------------------------------------------------------------------------
(E) (F)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 0.0
Re-constructive disposition 1.8
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 7.7
Charge-off 1.2
Other 6.4
Collection of claims 5.5
Improvements in financial status 0.8
------------------------------------------------------------------
Total 17.2(F)
------------------------------------------------------------------
Above (E) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 0.5
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 7.2
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
------------------------------------------------------------------
Total 7.8
------------------------------------------------------------------
(4) Assets newly categorized as problem assets during second half of fiscal 2001 based on the FRL (in billions of yen)
----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of
March 31, September March 31, September March 31,
2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt
debtors 63.6 44.4 22.3 17.1 6.8 (10.3)
Claims under high risk 384.0 190.9 113.7 55.2 32.0 (23.1)
----------------------------------------------------------------------------------------------------------------------------------
Total 447.7 235.3 136.0 72.3 38.9 (33.4)
----------------------------------------------------------------------------------------------------------------------------------
(G) (H)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 0.5
Re-constructive disposition 0.8
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 13.6
Charge-off (0.0)
Other 18.5
Collection of claims 11.3
Improvements in financial status 7.2
------------------------------------------------------------------
Total 33.4(H)
------------------------------------------------------------------
Above (G) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 1.4
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 5.2
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
------------------------------------------------------------------
Total 6.6
------------------------------------------------------------------
9
Mitsubishi Tokyo Financial Group, Inc.
(5) Assets newly categorized as problem assets during first half of fiscal 2002
based on the FRL
(in billions of yen)
----------------------------------------------------------------------------------------------------------------
As of As of As of As of
September March 31, September March 31,
30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt
debtors 28.9 35.2 30.1 20.4 (9.7)
Claims under high risk 369.4 179.5 98.5 58.5 (39.9)
----------------------------------------------------------------------------------------------------------------
Total 398.4 214.7 128.7 78.9 (49.7)
----------------------------------------------------------------------------------------------------------------
(I) (J)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 0.3
Re-constructive disposition 2.0
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 23.0
Charge-off 3.8
Other 20.4
Collection of claims 12.8
Improvements in financial status 7.6
------------------------------------------------------------------
Total 49.7(J)
------------------------------------------------------------------
Above (I) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 13.1
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 4.0
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
------------------------------------------------------------------
Total 17.1
------------------------------------------------------------------
(6) Assets newly categorized as problem assets during second half of fiscal 2002
based on the FRL
(in billions of yen)
-----------------------------------------------------------------------------------------------------
As of As of As of
March 31, September March 31,
2003 30, 2003 (a) 2004 (b) (b) - (a)
-----------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt
debtors 52.1 46.0 41.2 (4.8)
Claims under high risk 567.4 320.5 177.4 (143.1)
-----------------------------------------------------------------------------------------------------
Total 619.6 366.5 218.6 (147.9)
-----------------------------------------------------------------------------------------------------
(K) (L)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 1.1
Re-constructive disposition 10.6
Improvements in financial status due to
re-constructive disposition 1.2
Loan sales to secondary market 30.0
Charge-off 47.5
Other 57.4
Collection of claims 37.9
Improvements in financial status 19.5
------------------------------------------------------------------
Total 147.9(L)
------------------------------------------------------------------
Above (K) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 5.3
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 9.9
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
------------------------------------------------------------------
Total 15.2
------------------------------------------------------------------
10
Mitsubishi Tokyo Financial Group, Inc.
(7) Assets newly categorized as problem assets during first half of fiscal 2003
based on the FRL
(in billions of yen)
----------------------------------------------------------------------------------------
As of As of
September March 31,
30, 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt
debtors 14.4 9.1 (5.2)
Claims under high risk 150.7 94.1 (56.5)
----------------------------------------------------------------------------------------
Total 165.1 103.3 (61.7)
----------------------------------------------------------------------------------------
(M) (N)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 1.3
Re-constructive disposition 1.4
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 21.3
Charge-off 3.8
Other 33.8
Collection of claims 29.0
Improvements in financial status 4.7
------------------------------------------------------------------
Total 61.7(N)
------------------------------------------------------------------
Above (M) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 2.8
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 4.6
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
------------------------------------------------------------------
Total 7.5
------------------------------------------------------------------
(8) Assets newly categorized as problem assets during second half of fiscal 2003
based on the FRL
(in billions of yen)
---------------------------------------------------------------
As of
March 31,
2004
---------------------------------------------------------------
Claims to bankrupt and substantially bankrupt
debtors 14.7
Claims under high risk 120.0
---------------------------------------------------------------
Total 134.7
---------------------------------------------------------------
(9) Historical trend of problem assets based on the FRL (in billions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of As of
September March 31, September March 31, September March 31, September March 31,
30, 2000 2001 30, 2001 2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt
debtors 513.6 398.6 408.1 419.0 402.1 226.4 182.3 140.4 (41.8)
Claims under high risk 1,580.2 2,169.5 2,171.4 1,933.5 1,386.6 1,031.3 745.7 541.3 (204.4)
----------------------------------------------------------------------------------------------------------------------------
Total 2,093.8 2,568.1 2,579.6 2,352.6 1,788.7 1,257.8 928.0 681.7 (246.3)
----------------------------------------------------------------------------------------------------------------------------
11
Mitsubishi Tokyo Financial Group, Inc.
8. Classification of Loans by Type of Industry
(1) Loans by type of industry [Total of the 2 Banks] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans booked at
offshore markets) 38,961,862 1,545,729 1,045,826 37,416,133 37,916,036
Manufacturing 5,304,212 (168,767) (58,197) 5,472,979 5,362,409
Agriculture 12,360 (3,208) (1,753) 15,568 14,113
Forestry 4,887 (538) (344) 5,425 5,231
Fishery 28,511 3,218 441 25,293 28,070
Mining 34,785 (4,708) (5,866) 39,493 40,651
Construction 968,455 (259,795) (160,045) 1,228,250 1,128,500
Utilities 383,204 (34,093) (6,761) 417,297 389,965
Media and Communication 1,457,911 (38,956) (32,872) 1,496,867 1,490,783
Wholesale and Retail 4,580,742 (510,583) (262,156) 5,091,325 4,842,898
Banks and other financial institutions 4,213,921 362,342 122,056 3,851,579 4,091,865
Real estate 4,517,509 53,314 50,357 4,464,195 4,467,152
Services 4,597,651 (184,044) (497,534) 4,781,695 5,095,185
Municipal government 610,756 234,243 4,407 376,513 606,349
Other industries 12,246,946 2,097,300 1,894,089 10,149,646 10,352,857
Overseas offices and loans booked at
offshore markets 4,427,966 (1,142,459) (394,059) 5,570,426 4,822,026
-----------------------------------------------------------------------------------------------------------------------------
Total 43,389,829 403,269 651,766 42,986,559 42,738,063
-----------------------------------------------------------------------------------------------------------------------------
(2) Domestic consumer loans [Total of the 2 Banks] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 8,117,335 640,629 110,403 7,476,706 8,006,932
Housing loans 7,655,479 714,286 141,050 6,941,192 7,514,428
Others 461,855 (73,657) (30,647) 535,513 492,503
-----------------------------------------------------------------------------------------------------------------------------
(3) Domestic loans to small and medium-sized companies [Total of the 2 Banks] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized
companies 20,100,373 180,020 (94,307) 19,920,352 20,194,680
Percentage to total domestic loans 51.58% (1.65)% (1.67)% 53.24% 53.26%
-----------------------------------------------------------------------------------------------------------------------------
12
Mitsubishi Tokyo Financial Group, Inc.
(4) Loans by type of industry [Trust accounts] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans booked at
offshore markets) 735,872 (371,683) (159,721) 1,107,555 895,594
Manufacturing 40,185 (36,610) (9,240) 76,795 49,425
Agriculture -- -- -- -- --
Forestry 22 (8) (4) 30 26
Fishery 1,128 (444) (97) 1,572 1,225
Mining 61 (68) (16) 129 77
Construction 2,244 (5,628) (3,229) 7,872 5,473
Utilities 93,465 (41,739) (24,006) 135,204 117,471
Media and Communication 75,987 (48,573) (31,082) 124,560 107,069
Wholesale and Retail 8,358 (8,832) (2,314) 17,190 10,672
Banks and other financial institutions 62,226 (135,496) (38,001) 197,722 100,227
Real estate 65,070 (12,730) (6,205) 77,800 71,275
Services 26,342 (26,425) (20,313) 52,767 46,655
Municipal government 35,750 (2,023) (1,073) 37,773 36,823
Other industries 325,026 (53,108) (24,142) 378,134 349,168
Overseas offices and loans booked at
offshore markets -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
Total 735,872 (371,683) (159,721) 1,107,555 895,594
-----------------------------------------------------------------------------------------------------------------------------
(5) Domestic consumer loans [Trust accounts] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 228,089 (40,316) (18,904) 268,405 246,994
Housing loans 225,558 (39,491) (18,491) 265,050 244,050
Others 2,530 (824) (413) 3,354 2,943
-----------------------------------------------------------------------------------------------------------------------------
(6) Domestic loans to small and medium-sized companies [Trust accounts] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized
companies 472,447 (193,954) (68,912) 666,401 541,359
Percentage to total domestic loans 64.20% 4.03% 3.75% 60.16% 60.44%
-----------------------------------------------------------------------------------------------------------------------------
13
Mitsubishi Tokyo Financial Group, Inc.
9. Foreign Loans
(1) Loans to specific foreign borrowers [Total of the 2 Banks]
(in millions of yen except number of countries)
------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------
Loan to specific foreign
borrowers 37,641 (20,600) (9,822) 58,241 47,464
------------------------------------------------------------------------------------------
Number of countries 11 1 1 10 10
------------------------------------------------------------------------------------------
(2) Loans to Asian countries [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------
Thailand 191,087 (22,158) (5,563) 213,245 196,650
Indonesia 114,444 (6,205) 2,508 120,649 111,935
Malaysia 87,843 (12,132) (25,154) 99,975 112,998
Philippines 58,554 (3,640) (2,949) 62,195 61,504
South Korea 160,512 1,612 (12,722) 158,900 173,235
Singapore 255,041 11,867 32,689 243,173 222,352
Hong Kong 362,423 (55,486) (16,900) 417,910 379,324
China 219,147 4,122 20,010 215,024 199,137
Taiwan 49,964 10,473 6,306 39,491 43,658
Others 41,687 (2,923) 1,416 44,611 40,270
------------------------------------------------------------------------------------------
Total 1,540,707 (74,470) (360) 1,615,177 1,541,068
------------------------------------------------------------------------------------------
(3) Loans to Latin American countries [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------
Argentina 20,024 (17,246) (5,392) 37,271 25,416
Brazil 46,317 (26,239) (22,868) 72,557 69,186
Mexico 65,700 (37,549) (21,481) 103,249 87,182
Caribbean countries 355,036 (26,538) (9,651) 381,575 364,688
Others 84,812 (41,433) (17,820) 126,246 102,633
------------------------------------------------------------------------------------------
Total 571,893 (149,007) (77,214) 720,900 649,108
------------------------------------------------------------------------------------------
14
Mitsubishi Tokyo Financial Group, Inc.
10. Loans and Deposits [Total of 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------
Deposits (ending balance) 62,664,147 3,693,361 1,754,755 58,970,786 60,909,391
Deposits (average
balance) 60,253,507 2,826,123 381,639 57,427,383 59,871,867
Loans (ending balance) 43,389,829 403,269 651,766 42,986,559 42,738,063
Loans (average balance) 43,012,635 (664,886) 430,363 43,677,521 42,582,272
------------------------------------------------------------------------------------------
11. Domestic Deposits [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------
Individuals 33,402,365 1,237,924 435,764 32,164,441 32,966,600
Corporations and
others 20,575,149 671,328 (335,708) 19,903,820 20,910,857
Domestic deposits 53,977,514 1,909,253 100,056 52,068,261 53,877,458
------------------------------------------------------------------------------------------
Note: Amounts do not include negotiable certificates of deposit, deposits of
overseas offices and JOM accounts.
12. Number of Employees [Total of the 2 Banks]
------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------
Number of employees 20,323 (1,044) (831) 21,367 21,154
------------------------------------------------------------------------------------------
13. Number of Offices [Total of the 2 Banks]
------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------
Domestic 315 (20) (8) 335 323
Head office and
Branches 296 (13) (6) 309 302
Sub-branches and
Agencies 19 (7) (2) 26 21
Overseas 81 1 -- 80 81
Branches 48 1 1 47 47
Sub-branches 14 1 -- 13 14
Representative offices 19 (1) (1) 20 20
------------------------------------------------------------------------------------------
Total 396 (19) (8) 415 404
------------------------------------------------------------------------------------------
15
Mitsubishi Tokyo Financial Group, Inc.
14. Status of Deferred Tax Assets
(1) Tax Effects of the Items Comprising Net Deferred Tax Assets
(Total of the two banks) (in billions of yen)
----------------------------------------------------------
Mar. 31, 2004
------------
vs. Mar. 31,
2003
----------------------------------------------------------
1 Deferred Tax Assets 1,117.2 (273.9)
2 Allowance for loan losses 353.8 (178.3)
3 Write down of investment
securities 99.6 9.8
4 Net operating loss
carryforwards 662.8 (105.1)
5 Reserve for employees'
retirement benefits 35.9 (1.7)
6 Unrealized losses on
securities available for sale -- (113.4)
7 Other 55.3 3.7
8 Valuation allowance (90.4) 111.1
9 Deferred tax liabilities 404.2 385.9
10 Gains on placing trust
for retirement benefits 7.3 (1.3)
11 Unrealized gains on
securities available for sale 387.4 387.4
12 Other 9.5 (0.1)
----------------------------------------------------------
13 Net Deferred Tax Assets 712.9 (659.8)
----------------------------------------------------------
(Consolidated)
----------------------------------------------------------
14 Net Deferred Tax Assets 655.5 (646.3)
----------------------------------------------------------
(2) Balance of Net Deferred Tax Assets and % of Tier I Capital
[CHART APPEARS HERE]
(3) Net Business Profits before Credit Costs and Taxable Income (Current Fiscal
Year)
(Total of the two banks) (in billions of yen)
----------------------------------------------
FY 2003
----------------------------------------------
15 Net business profits before
credit costs 654.8
16 Credit related costs (105.7)
17 Income before income taxes 719.0
18 Reconciliation to taxable income (448.3)
19 Taxable income 270.7
----------------------------------------------
(4) Net Business Profits before Credit Costs and Taxable Income (Past Five
Fiscal Years)
(Total of the two banks) (in billions of yen)
----------------------------------------------------------------------------
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
----------------------------------------------------------------------------
20 Net business profits
before credit costs 888.0 578.6 552.0 619.5 689.9
----------------------------------------------------------------------------
21 Credit related costs 1,393.1 652.4 730.5 666.3 485.9
----------------------------------------------------------------------------
22 Income before income
taxes (124.7) 409.4 (199.0) (359.3) (485.2)
----------------------------------------------------------------------------
23 Reconciliation to
taxable income 421.0 (76.3) 304.4 142.0 (1,021.4)
----------------------------------------------------------------------------
24 Taxable income 296.2 333.1 105.3 (217.2) (1,506.7)
----------------------------------------------------------------------------
(5) Comparison with Past Fiscal Years
[CHART APPEARS HERE]
16
Mitsubishi Tokyo Financial Group, Inc.
(6) Classification Based on Prior Year Operating Results as Provided in the
JICPA Audit Committee Report No. 66
-------------------------------------------------------------------------------------------------------
Estimable period of future taxable income
-----------------------------------------
Estimable No
Classification Prior year operating results 1 year 5 years period limitation
-------------------------------------------------------------------------------------------------------
1 Sufficient taxable income for more than
three consecutive fiscal years XXXXX XXXXX XXXXX XXXXX
-------------------------------------------------------------------------------------------------------
2 Stable but insufficient taxable income for
three consecutive fiscal years XXXXX XXXXX XXXXX
-------------------------------------------------------------------------------------------------------
3 Precarious and insufficient operating
results due to volatile profit XXXXX XXXXX
-------------------------------------------------------------------------------------------------------
4 Material net operating loss carryforwards XXXXX
-------------------------------------------------------------------------------------------------------
Exception Net operating loss carryforwards are
attributable to extraordinary factors XXXXX XXXXX
-------------------------------------------------------------------------------------------------------
5 Tax loss for three consecutive fiscal years
and tax loss for the current fiscal year is
expected Cannot estimate future taxable income
-------------------------------------------------------------------------------------------------------
Although we recorded taxable income for the fiscal year ended March 31,
2004, we are classified as "4" described above since we have material net
operating loss carryforwards. However, since we believe the net operating loss
carryforwards are attributable to extraordinary factors such as changes in laws
and regulations, we apply the exception to classification 4. (Five years' future
taxable income is estimable.)
(7) Extraordinary Factors Such as Changes in Laws and Regulations
Our net operating loss carryforwards were incurred due to, among other
things, the followings: (i) we accelerated the final disposal of nonperforming
loans in response to both the "Emerging Economic Package," which provided
guidance to major banks to remove from their balance sheets claims to debtors
classified as "likely to become bankrupt" or below, and the "Program for
Financial Revival," which urged major banks to reduce the ratio of disclosed
claims to total claims by about half; and (ii) we reduced our holdings of
strategic equity investments under the "Law Concerning Restriction, etc. of
Banks' Shareholdings etc."
(8) Realizability of Deferred Tax Assets at March 31, 2004 (Assumptions)
(in billions of yen)
---------------------------------------------------------------------
Five year
total
(2004 to
2008)
---------------------------------------------------------------------
1 Net business profits (based on our business plan)(*1) 4,620.0
2 Net business profits (basis of realizability
determination)(*2) 3,990.0
3 Income before income taxes (basis of realizability
determination) 3,240.0
4 Taxable income before adjustments (basis of
realizability determination)(*3) 3,880.0
5 Temporary difference + net operating loss carryforwards
(for which deferred tax assets shall be recognized) 2,750.0
6 Deferred tax assets at March 31, 2004 (*4) 1,119.0
---------------------------------------------------------------------
(*1) Total of the two banks, before credit costs
(*2) Based on the scenario that current short-term interest rate level continues
for the next five years
(*3) Before reversals of existing deductible temporary differences and net
operating loss carryforwards
(*4) Line"5" multiplied by effective tax rate (consolidated corporate-tax basis)
[CHART APPEARS HERE]
(Reference) Assumptions for Business Plan
----------------------------------------------------------------------------
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
S/T interest rate (3 m/s TIBOR) 0.09% 0.13% 0.50% 0.57% 0.88%
L/T interest rate (10 year JGB) 1.48% 1.90% 2.30% 2.03% 2.58%
Exchange rate (USD/Yen) (Y)105 (Y)105 (Y)105 (Y)105 (Y)105
----------------------------------------------------------------------------
17
Mitsubishi Tokyo Financial Group, Inc.
15. Employees' Retirement Benefits
(1) Benefit obligation
[Consolidated] (in millions of yen)
------------------------------------------------------------------------------
As of
March 31, 2004
------------------------------------------------------------------------------
Projected benefits obligation (A) 997,243
Discount rates:
Domestic subsidiaries : 1.1% to 2.2%,
Overseas subsidiaries : 5.4% to 6.25%
Fair value of plan assets (B) 958,308
Prepaid pension cost (C) 189,249
Reserve for employees' retirement benefits (D) 34,932
Unrecognized plan assets (E) 57,822
Total amount unrecognized (A-B+C-D+E) 251,074
Unrecognized net obligation by the
change of accounting policy 16,322
Unrecognized prior service cost (37,753)
Unrecognized net actuarial loss 272,505
------------------------------------------------------------------------------
Note Discount rate : The Bank of Tokyo-Mitsubishi, Ltd. 2.1%, The Mitsubishi
Trust and Banking Corporation 2.2%.
(2) Net periodic pension cost
[Consolidated] (in millions of yen)
-------------------------------------------------------------
For the year
ended March
31, 2004
-------------------------------------------------------------
Net periodic cost of the employees' retirement
benefits 92,730
Service cost 29,849
Interest cost 24,592
Expected return on plan assets (28,586)
Amortization of net obligation by the change
of accounting policy 16,543
Amortization of prior service cost (3,205)
Amortization of net actuarial loss 41,124
Other 12,412
-------------------------------------------------------------
18
Mitsubishi Tokyo Financial Group, Inc.
16. Earning Projections for the Fiscal Year Ending March 31, 2005
[Consolidated] (in billions of yen)
-------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2005 March 31, 2004
-------------------------------------------------------------------------
Ordinary income 2,450.0 2,555.1
( First half 1,220.0 ) ( First half 1,360.9 )
Ordinary Profit 640.0 578.3
( First half 310.0 ) ( First half 273.4 )
Net income 340.0 560.8
( First half 170.0 ) ( First half 301.8 )
[Non-consolidated] (in billions of yen)
-------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2005 March 31, 2004
-------------------------------------------------------------------------
Operating income 190.0 69.3
( First half 187.0 ) ( First half 42.4 )
Ordinary profit 183.0 64.4
( First half 183.0 ) ( First half 40.2 )
Net income 183.0 64.4
( First half 183.0 ) ( First half 40.3 )
-------------------------------------------------------------------------
19
[LOGO OF MTFG]
----------------------------------------
Selected Financial Information
under Japanese GAAP
For the Fiscal Year Ended March 31, 2004
----------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd.
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
[Contents]
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended March 31, 2004
1. Consolidated Balance Sheets 20
2. Consolidated Statements of Operations 21
3. Consolidated Statements of Capital Surplus and
Retained Earnings 22
4. Non-Consolidated Balance Sheets 23
5. Non-Consolidated Statements of Operations 24
6. Notional Principal or Contract Amount, Market
Value and Valuation Gains (Losses) on Derivatives 25
[Consolidated]
7. Financial Results [Consolidated], [Non-Consolidated] 26
8. Average Interest Rate Spread [Non-Consolidated] 28
9. Valuation Differences on Securities [Consolidated], [Non-Consolidated] 28
10. Risk-Adjusted Capital Ratio Based on the
Standards of the BIS [Consolidated], [Non-Consolidated] 29
2 Loan Portfolio and Other
1. Risk-Monitored Loans [Consolidated], [Non-Consolidated] 30
2. Classification of Risk-Monitored Loans [Consolidated] 31
3. Allowance for Loan Losses [Consolidated], [Non-Consolidated] 32
4. Coverage Ratio against Risk-Monitored
Loans [Consolidated], [Non-Consolidated] 32
5. Disclosed Claims under the Financial
Reconstruction Law (the "FRL") [Non-Consolidated] 33
6. Status of Secured Coverage on Disclosed
Claims under the FRL [Non-Consolidated] 33
7. Progress in the Disposal of Problem Assets [Non-Consolidated] 34
8. Classification of Loans by Type of
Industry [Non-Consolidated] 38
9. Loans and Deposits [Non-Consolidated] 39
10. Domestic Deposits [Non-Consolidated] 39
11. Number of Employees [Non-Consolidated] 39
12. Number of Offices [Non-Consolidated] 39
13. Status of Deferred Tax Assets [Non-Consolidated] 40
14. Employees' Retirement Benefits [Non-Consolidated] 41
15. Earning Projections for the Fiscal Year
Ending March 31, 2005 [Consolidated], [Non-Consolidated] 42
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended March 31,
2004
(Japanese GAAP)
1. Consolidated Balance Sheets
-----------------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of yen) 2004 (A) 2003 (B) (A)-(B)
-----------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 5,840,013 7,366,450 (1,526,437)
Call loans and bills bought 953,941 678,407 275,533
Receivables under resale agreements 1,409,963 576,814 833,149
Receivables under securities borrowing transactions 4,603,993 1,561,391 3,042,602
Commercial paper and other debt purchased 1,297,241 484,195 813,045
Trading assets 6,296,997 5,276,242 1,020,755
Money held in trust 462,424 405,882 56,541
Investment securities 20,960,352 16,600,079 4,360,272
Allowance for losses on investment securities (1,923) (2,067) 143
Loans and bills discounted 38,017,560 38,668,577 (651,017)
Foreign exchanges 553,711 594,767 (41,055)
Other assets 2,450,786 2,067,540 383,245
Premises and equipment 721,219 801,917 (80,698)
Deferred debenture discounts and other costs -- 9 (9)
Deferred tax assets 517,036 1,008,726 (491,690)
Customers' liabilities for acceptances and guarantees 4,233,353 4,518,715 (285,361)
Allowance for loan losses (630,054) (1,016,265) 386,211
-----------------------------------------------------------------------------------------------------
Total assets 87,686,618 79,591,387 8,095,230
-----------------------------------------------------------------------------------------------------
Liabilities:
Deposits 55,910,135 52,095,330 3,814,804
Negotiable certificates of deposit 1,528,477 2,625,077 (1,096,599)
Debentures 265,957 636,060 (370,103)
Call money and bills sold 5,993,188 3,013,869 2,979,318
Payables under repurchase agreements 2,812,279 2,828,308 (16,029)
Payables under securities lending transactions 1,571,280 1,996,214 (424,934)
Commercial paper 241,006 312,208 (71,201)
Trading liabilities 2,751,586 1,455,493 1,296,092
Borrowed money 1,153,916 1,303,831 (149,915)
Foreign exchanges 1,068,413 512,676 555,737
Short-term corporate bonds 300,200 10,000 290,200
Bonds and notes 3,350,710 3,188,379 162,330
Bonds with warrants 50,000 50,528 (528)
Other liabilities 2,612,359 2,166,328 446,031
Reserve for employees' bonuses 13,050 12,531 519
Reserve for employees' retirement benefits 32,140 26,429 5,711
Reserve for expenses related to EXPO 2005 Japan 97 31 66
Reserves under special laws 1,160 799 360
Deferred tax liabilities 56,137 61,037 (4,899)
Deferred tax liabilities on land revaluation excess 130,408 133,453 (3,045)
Acceptances and guarantees 4,233,353 4,518,715 (285,361)
-----------------------------------------------------------------------------------------------------
Total liabilities 84,075,860 76,947,306 7,128,554
-----------------------------------------------------------------------------------------------------
Minority interest 357,087 330,812 26,274
-----------------------------------------------------------------------------------------------------
Shareholder's equity:
Capital stock 871,973 871,973 --
Capital surplus 681,928 681,928 --
Retained earnings 1,256,278 858,177 398,100
Land revaluation excess 167,631 197,489 (29,858)
Unrealized gains (losses) on securities available for sale 383,572 (227,826) 611,399
Foreign currency translation adjustments (107,713) (68,474) (39,239)
-----------------------------------------------------------------------------------------------------
Total shareholder's equity 3,253,670 2,313,268 940,401
-----------------------------------------------------------------------------------------------------
Total liabilities, minority interest
and shareholder's equity 87,686,618 79,591,387 8,095,230
-----------------------------------------------------------------------------------------------------
20
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
2. Consolidated Statements of Operations
-----------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2004 (A) 2003 (B) (A) - (B)
-----------------------------------------------------------------------------------
Ordinary income:
Interest income: 1,128,672 1,347,905 (219,233)
Interest on loans and discounts 768,626 886,442 (117,815)
Interest and dividends on securities 182,125 216,381 (34,256)
Trust fees 15,974 18,515 (2,540)
Fees and commissions 427,748 377,440 50,307
Trading profits 133,520 76,654 56,865
Other business income 193,403 218,914 (25,511)
Other ordinary income 145,941 146,742 (801)
-----------------------------------------------------------------------------------
Total ordinary income 2,045,260 2,186,174 (140,913)
-----------------------------------------------------------------------------------
Ordinary expenses:
Interest expense: 312,949 491,872 (178,922)
Interest on deposits 134,327 183,936 (49,609)
Interest on debentures and
amortization of debenture discounts 4,035 8,504 (4,468)
Fees and commissions 52,843 66,074 (13,230)
Other business expenses 112,499 72,104 40,395
General and administrative expenses 857,740 855,093 2,647
Other ordinary expenses 262,701 973,652 (710,950)
-----------------------------------------------------------------------------------
Total ordinary expenses 1,598,735 2,458,796 (860,061)
-----------------------------------------------------------------------------------
Ordinary profit (loss) 446,524 (272,622) 719,147
-----------------------------------------------------------------------------------
Special gains 326,824 39,919 286,904
Special losses 29,874 24,658 5,216
-----------------------------------------------------------------------------------
Income (Loss) before income taxes and others 743,474 (257,361) 1,000,835
-----------------------------------------------------------------------------------
Income taxes-current 77,438 54,906 22,531
Income taxes-deferred 190,905 (178,443) 369,349
Minority interest 45,846 4,293 41,553
-----------------------------------------------------------------------------------
Net income (loss) 429,283 (138,117) 567,401
-----------------------------------------------------------------------------------
21
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
3. Consolidated Statements of Capital Surplus and Retained Earnings
----------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
----------------------------------------------------------------------------------------------------------
Balance of capital surplus at beginning of fiscal year 681,928 595,925 86,003
Increase: -- 86,003 (86,003)
Issuance of common stock due to capital increase -- 86,003 (86,003)
----------------------------------------------------------------------------------------------------------
Balance of capital surplus at end of fiscal year 681,928 681,928 --
----------------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 858,177 1,026,305 (168,127)
Increase: 446,977 7,021 439,956
Net income 429,283 -- 429,283
Reduction in land revaluation excess 17,694 4,130 13,563
Change in ownership percentage to a consolidated subsidiary
due to stock repurchase by the subsidiary -- 2,648 (2,648)
Decrease in consolidated companies accounted for by the equity
method -- 242 (242)
Decrease: (48,877) (175,148) 126,271
Net loss -- (138,117) 138,117
Cash dividends (48,873) (17,384) (31,489)
Bonuses to directors of consolidated subsidiaries (3) (3) --
Change in ownership percentage to consolidated subsidiaries and
a company accounted for by the equity method due to their merger -- (15,896) 15,896
Increase in consolidated subsidiaries and companies accounted
for by the equity method -- (3,746) 3,746
----------------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 1,256,278 858,177 398,100
----------------------------------------------------------------------------------------------------------
22
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
4. Non-Consolidated Balance Sheets
---------------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
---------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 5,418,791 7,107,314 (1,688,523)
Call loans 838,128 478,160 359,967
Receivables under resale agreements 458,662 156,108 302,553
Receivables under securities borrowing transactions 2,757,662 787,680 1,969,981
Commercial paper and other debt purchased 457,187 293,492 163,694
Trading assets 4,204,602 4,150,726 53,875
Money held in trust 414,457 365,381 49,075
Investment securities 20,766,910 16,351,043 4,415,866
Allowance for losses on investment securities (1,923) (2,067) 143
Loans and bills discounted 34,816,640 34,724,836 91,803
Foreign exchanges 557,677 603,344 (45,667)
Other assets 1,731,951 1,247,816 484,135
Premises and equipment 580,409 637,663 (57,253)
Deferred tax assets 527,692 1,018,553 (490,861)
Customers' liabilities for acceptances and guarantees 3,377,138 3,795,648 (418,509)
Allowance for loan losses (468,577) (809,374) 340,796
---------------------------------------------------------------------------------------------------
Total assets 76,437,410 70,906,329 5,531,080
---------------------------------------------------------------------------------------------------
Liabilities:
Deposits 51,819,415 47,827,174 3,992,241
Negotiable certificates of deposit 1,626,476 2,720,083 (1,093,607)
Debentures 265,957 636,060 (370,103)
Call money 2,456,412 2,364,965 91,446
Payables under repurchase agreements 1,818,440 2,149,826 (331,386)
Payables under securities lending transactions 386,061 1,273,929 (887,868)
Bills sold 3,247,400 576,500 2,670,900
Commercial paper -- 15,000 (15,000)
Trading liabilities 800,207 1,273,940 (473,733)
Borrowed money 1,344,764 1,588,979 (244,214)
Foreign exchanges 1,068,964 514,781 554,183
Short-term corporate bonds 300,200 10,000 290,200
Bonds and notes 2,567,140 2,203,400 363,740
Other liabilities 2,066,730 1,588,857 477,873
Reserve for employees' bonuses 6,053 6,945 (891)
Reserve for employees' retirement benefits 13,272 6,691 6,581
Reserve for expenses related to EXPO 2005 Japan 97 31 66
Reserves under special laws 31 58 (26)
Deferred tax liabilities on land revaluation excess 130,408 133,453 (3,045)
Acceptances and guarantees 3,377,138 3,795,648 (418,509)
---------------------------------------------------------------------------------------------------
Total liabilities 73,295,173 68,686,327 4,608,846
---------------------------------------------------------------------------------------------------
Shareholder's equity:
Capital stock 871,973 871,973 --
Capital surplus 681,928 681,928 --
Capital reserve 681,928 681,928 --
Retained earnings 1,041,547 712,972 328,574
Revenue reserve 190,044 190,044 --
Voluntary reserves 475,701 592,908 (117,206)
Unappropriated profit 375,801 (69,979) 445,781
Net income 359,754 (92,116) 451,871
Land revaluation excess 167,704 197,563 (29,858)
Unrealized gains (losses) on securities
available for sale 379,082 (244,435) 623,518
---------------------------------------------------------------------------------------------------
Total shareholder's equity 3,142,236 2,220,001 922,234
---------------------------------------------------------------------------------------------------
Total liabilities, minority interest
and shareholder's equity 76,437,410 70,906,329 5,531,080
---------------------------------------------------------------------------------------------------
23
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
5. Non-Consolidated Statements of Operations
-------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
-------------------------------------------------------------------------------------
Ordinary income:
Interest income: 887,752 1,034,757 (147,004)
Interest on loans and discounts 569,937 635,436 (65,498)
Interest and dividends on securities 182,201 191,193 (8,991)
Fees and commissions 205,938 186,807 19,130
Trading profits 57,961 49,467 8,493
Other business income 205,278 211,157 (5,878)
Other ordinary income 114,075 129,082 (15,007)
-------------------------------------------------------------------------------------
Total ordinary income 1,471,005 1,611,272 (140,266)
-------------------------------------------------------------------------------------
Ordinary expenses:
Interest expense: 255,402 381,843 (126,440)
Interest on deposits 110,763 148,216 (37,452)
Interest on debentures and
amortization of debenture discounts 4,035 8,413 (4,377)
Fees and commissions 52,541 53,833 (1,292)
Trading losses 3,221 -- 3,221
Other business expenses 122,362 70,110 52,252
General and administrative expenses 505,343 508,060 (2,717)
Other ordinary expenses 241,912 897,463 (655,550)
-------------------------------------------------------------------------------------
Total ordinary expenses 1,180,784 1,911,312 (730,527)
-------------------------------------------------------------------------------------
Ordinary profit (loss) 290,221 (300,040) 590,261
-------------------------------------------------------------------------------------
Special gains 325,586 33,532 292,054
Special losses 28,088 20,825 7,263
-------------------------------------------------------------------------------------
Income (Loss) before income taxes and others 587,719 (287,333) 875,052
-------------------------------------------------------------------------------------
Income taxes-current 44,462 22,925 21,537
Income taxes-deferred 183,503 (218,141) 401,644
-------------------------------------------------------------------------------------
Net income (loss) 359,754 (92,116) 451,871
-------------------------------------------------------------------------------------
Unappropriated retained earnings brought forward 16,769 18,006 (1,237)
Reduction in land revaluation excess 17,694 4,130 13,563
Interim dividends 18,416 -- 18,416
Unappropriated retained earnings 375,801 (69,979) 445,781
-------------------------------------------------------------------------------------
24
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
6. Notional Principal or Contract Amount, Market Value and Valuation Gains
(Losses) on Derivatives
The publication is omitted in order to be disclosed by EDINET.
[Reference]
1. Derivatives qualified for hedge-accounting [Consolidated]
(in billions of yen)
-----------------------------------------------------------
As of March 31, 2004
-----------------------------------------------------------
Notional principal Market
or contract amount value
-----------------------------------------------------------
Interest rate futures 5,921.2 2.4
Interest rate swaps 20,775.2 90.9
Currency swaps 2,016.8 (6.2)
Other interest rate-related
transactions 3.8 0.0
Others 0.6 0.6
-----------------------------------------------------------
Total 87.8
-----------------------------------------------------------
Note : Derivatives which are accounted for on an accrual basis based on
"Accounting standard for financial instruments" are not included in the
table above.
Notional principal by the remaining life of the interest rate swaps above is as
follows:
(in billions of yen)
------------------------------------------------------------------------------------
As of March 31, 2004
------------------------------------------------------------------------------------
Due within Due after 1 year Due after
1 year through 5 years 5 years Total
------------------------------------------------------------------------------------
Receive-fix/pay-floater 4,737.2 8,392.5 1,208.7 14,338.5
Receive floater/pay-fix 2,870.7 2,260.7 1,295.1 6,426.6
Receive floater/pay-floater -- 10.0 -- 10.0
Total 7,608.0 10,663.2 2,503.9 20,775.2
------------------------------------------------------------------------------------
2. Deferred gains (losses) [Consolidated]
(in billions of yen)
------------------------------------------------------------------------------
As of March 31, 2004
Deferred Deferred Net gains (losses)
gains (A) losses (B) (A) - (B)
------------------------------------------------------------------------------
Interest rate futures 17.7 13.8 3.8
Interest rate swaps 239.6 218.7 20.8
Currency swaps 35.5 37.7 (2.1)
Other interest rate-related
transactions 0.1 0.1 --
Others 4.0 4.4 (0.3)
Total 297.1 274.9 22.1
------------------------------------------------------------------------------
Note : Deferred gains (losses) attributable to the macro hedge accounting as of
March 31, 2004 are included in the above table.
25
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
7. Financial Results (The Bank of Tokyo-Mitsubishi, Ltd. and Consolidated
Subsidiaries)
(in millions of yen)
-------------------------------------------------------------------------------------------------------------
For the year For the year
ended ended Increase/
March 31, March 31, (Decrease)
2003 (A) 2004 (B) (B) - (A)
-------------------------------------------------------------------------------------------------------------
Gross profits 1,411,032 1,422,934 11,902
Net interest income 857,686 817,631 (40,054)
Trust fees 18,515 15,974 (2,540)
Net fees and commissions 311,366 374,904 63,538
Net trading profits 76,654 133,520 56,865
Net other business income 146,809 80,903 (65,906)
Net gains on debt securities 63,178 (32,715) (95,894)
General and administrative expenses 813,531 810,895 (2,635)
Net business profits before provision for formula allowance for
loan losses 597,500 612,039 14,538
Provision for formula allowance for loan losses (1) 42,739 -- (42,739)
Net business profits* 554,761 612,039 57,277
Net non-recurring losses (827,384) (165,514) 661,870
Credit related costs (2) (349,921) (139,284) 210,637
Losses on loan charge-offs (165,727) (59,979) 105,747
Provision for specific allowance for loan losses (39,809) -- 39,809
Losses on sales of loans to the Resolution and Collection
Corporation (73,030) (39,549) 33,480
Other credit related costs (71,354) (39,754) 31,599
Net losses on equity securities (386,611) (1,068) 385,543
Gains on sales of equity securities 52,997 66,779 13,781
Losses on sales of equity securities (184,774) (59,219) 125,555
Losses on write down of equity securities (254,835) (8,628) 246,206
Equity in loss of affiliates (9,009) (733) 8,276
Other (81,841) (24,428) 57,413
Ordinary profit (loss) (272,622) 446,524 719,147
Net special gains (losses) 15,261 296,949 281,688
Reversal of allowance for loan losses (3) -- 243,281 243,181
Refund of enterprise taxes by the Tokyo Metropolitan Government -- 32,141 32,141
Gains on transfer of the substitutional portion of future
pension obligations -- 26,503 26,503
Gain on loans charged-off (4) 36,463 21,402 (15,061)
Losses on impairment of fixed assets -- (19,740) (19,740)
Income (Loss) before income taxes and others (257,361) 743,474 1,000,835
Income taxes-current 54,906 77,438 22,531
Income taxes-deferred (178,443) 190,905 369,349
Minority interest 4,293 45,846 41,553
Net income (loss) (138,117) 429,283 567,401
Note:
* Net business profits = Net business profits of The Bank of
Tokyo-Mitsubishi, Ltd. + Other consolidated entities' gross profits -
Other consolidated entities' general and administrative expenses - Other
consolidated entities' provision for formula allowance for loan losses -
Inter-company transactions.
(Reference)
Total credit costs (1)+(2)+(3) 392,661 (103,996) (496,657)
Total credit costs + Gain on loans charged-off (1)+(2)+(3)+(4) 356,197 (125,398) (481,596)
Number of consolidated subsidiaries 150 132 (18)
Number of affiliated companies accounted for by the equity method 23 23 --
26
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
Financial Results (The Bank of Tokyo-Mitsubishi, Ltd.)
(in millions of yen)
-------------------------------------------------------------------------------------------------------------
For the year For the year
ended ended Increase/
March 31, March 31, (Decrease)
2003 (A) 2004 (B) (B) - (A)
-------------------------------------------------------------------------------------------------------------
Gross profits 978,054 925,311 (52,742)
Domestic gross profits 545,956 510,310 (35,645)
Net interest income 427,416 427,497 80
Net fees and commissions 71,532 93,182 21,650
Net trading profits 16,764 8,410 (8,354)
Net other business income 30,243 (18,778) (49,022)
Net gains on debt securities 32,186 (30,104) (62,290)
Non-domestic gross profits 432,097 415,000 (17,096)
Net interest income 227,149 206,762 (20,387)
Net fees and commissions 61,441 60,214 (1,226)
Net trading profits 32,703 46,329 13,626
Net other business income 110,803 101,693 (9,109)
Net gains on debt securities 30,034 (2,211) (32,246)
General and administrative expenses 466,499 458,498 (8,000)
Personnel expenses 183,535 172,273 (11,261)
Non-personnel expenses 260,226 262,415 2,188
Taxes 22,737 23,809 1,071
Net business profits before provision for formula allowance for
loan losses 511,555 466,813 (44,741)
Provision for formula allowance for loan losses (1) 49,698 -- (49,698)
Net business profits 461,856 466,813 4,956
Net non-recurring losses (761,896) (176,591) 585,304
Credit related costs (2) (291,389) (107,187) 184,202
Losses on loan charge-offs (141,491) (24,592) 116,898
Provision for specific allowance for loan losses 3,140 -- (3,140)
Losses on sales of loans to the Resolution and Collection
Corporation (66,378) (38,273) 28,105
Other credit related costs (86,660) (44,321) 42,339
Net losses on equity securities (370,560) (20,916) 349,644
Gains on sales of equity securities 73,897 85,756 11,858
Losses on sales of equity securities (184,528) (59,515) 125,013
Losses on write down of equity securities (259,928) (47,156) 212,772
Others (99,946) (48,488) 51,458
Ordinary profit (loss) (300,040) 290,221 590,261
Net special gains (losses) 12,707 297,498 284,791
Reversal of allowance for loan losses (3) -- 242,574 242,574
Refund of enterprise taxes by the Tokyo Metropolitan Government -- 32,141 32,141
Gains on transfer of the substitutional portion of future
pension obligations -- 26,503 26,503
Gain on loans charged-off (4) 30,350 21,257 (9,092)
Losses on impairment of fixed assets -- (19,459) (19,459)
Income (Loss) before income taxes (287,333) 587,719 875,052
Income taxes-current 22,925 44,462 21,537
Income taxes-deferred (218,141) 183,503 401,644
Net income (loss) (92,116) 359,754 451,871
Total credit costs (1)+(2)+(3) 341,088 (135,386) (476,475)
Total credit costs + Gain on loans charged-off (1)+(2)+(3)+(4) 310,738 (156,644) (467,383)
27
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
8. Average Interest Rate Spread
[Non-Consolidated] (percentage per annum)
-------------------------------------------------------------------------------------------------------------
For the year ended
March 31, Increase/
------------------------------ (Decrease)
2004(A) 2003(B) (A) - (B)
-------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 1.50 1.78 (0.28)
Average interest rate on Loans and bills discounted 1.64 1.82 (0.18)
Average interest rate on Investment securities 0.99 1.13 (0.13)
Total average interest rate on interest-bearing liabilities (b) 1.11 1.41 (0.29)
Average interest rate on Deposits, NCD and Debentures 0.22 0.32 (0.09)
Average interest rate on external liabilities 0.81 1.28 (0.47)
Total average interest rate spread (a)-(b) 0.38 0.37 0.01
-------------------------------------------------------------------------------------------------------------
Average interest rate spread in domestic business segment: (percentage per annum)
-------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 1.09 1.16 (0.06)
Average interest rate on Loans and bills discounted 1.44 1.53 (0.09)
Average interest rate on Investment securities 0.51 0.57 (0.06)
Total average interest rate on interest-bearing liabilities (b) 0.78 0.88 (0.10)
Average interest rate on Deposits, NCD and Debentures 0.03 0.06 (0.02)
Average interest rate on external liabilities 0.58 0.98 (0.40)
Total average interest rate spread (a)-(b) 0.31 0.27 0.04
-------------------------------------------------------------------------------------------------------------
9. Valuation Differences on Securities
(1) Valuation method of securities
Trading securities Market value (valuation differences are recorded as profits or losses)
Debt securities being held to maturity Amortized cost
Securities available for sale Market value (valuation differences are included in shareholders'
equity, net of income taxes)
(Reference) Securities in money held in trust
Trading purposes Market value (valuation differences are recorded as profits or losses)
Being held to maturity Amortized cost
Other Market value (valuation differences are included in shareholders'
equity, net of income taxes)
(2) Valuation differences
[Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2004 As of March 31, 2003
-------------------------------------------------------------------------------------
Valuation differences Valuation differences
(A) (A) - (B) Gains Losses (B) Gains Losses
------------------------------------------------------------------------------------------------------------------------------
Debt securities being held to maturity 1,974 33 3,197 1,223 1,940 1,942 1
Securities available for sale 650,296 897,240 792,943 142,647 (246,944) 298,039 544,984
Domestic equity securities 607,544 897,948 693,953 86,409 (290,404) 168,888 459,293
Domestic bonds (15,007) (80,166) 21,033 36,041 65,158 67,259 2,100
Other 57,760 79,458 77,955 20,195 (21,698) 61,892 83,590
Total 652,270 897,274 796,141 143,870 (245,003) 299,982 544,985
Domestic equity securities 607,544 897,948 693,953 86,409 (290,404) 168,888 459,293
Domestic bonds (14,620) (79,779) 22,638 37,259 65,158 67,259 2,100
Other 59,347 79,104 79,548 20,201 (19,757) 63,834 83,591
------------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2004 As of March 31, 2003
-------------------------------------------------------------------------------------
Valuation differences Valuation differences
(A) (A) - (B) Gains Losses (B) Gains Losses
------------------------------------------------------------------------------------------------------------------------------
Debt securities being held to maturity 683 397 1,903 1,220 286 287 1
Stocks of subsidiaries and affiliates 493,508 297,263 493,517 8 196,245 270,299 74,054
Securities available for sale 638,310 915,467 759,175 120,864 (277,157) 259,275 536,432
Domestic equity securities 599,889 890,419 674,637 74,747 (290,529) 163,410 453,940
Domestic bonds (15,038) (80,204) 21,002 36,041 65,165 67,259 2,094
Other 53,459 105,252 63,535 10,075 (51,793) 28,605 80,398
Total 1,132,502 1,213,128 1,254,596 122,094 (80,626) 529,862 610,488
Domestic equity securities 770,981 1,132,563 845,729 74,747 (361,581) 166,412 527,994
Domestic bonds (14,651) (79,816) 22,607 37,258 65,165 67,259 2,094
Other 376,171 160,381 386,259 10,087 215,789 296,190 80,400
------------------------------------------------------------------------------------------------------------------------------
28
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
10. Risk-Adjusted Capital Ratio Based on the Standards of the BIS
[Consolidated] (in billions of yen except percentages)
-----------------------------------------------------------------------------------------------------------------------------
As of
March 31,
2004 (A) Increase/ Increase/ As of As of
(Preliminary (Decrease) (Decrease) March 31, September 30,
basis) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital ratio 11.97% 1.53% 0.07% 10.43% 11.89%
(2) Tier 1 capital 2,876.0 475.7 (6.2) 2,400.2 2,882.2
(3) Tier 2 capital includable as qualifying capital 2,415.3 123.9 (23.6) 2,291.3 2,438.9
i) The amount of unrealized gains on investment
securities, includable as qualifying capital 294.0 294.0 210.1 -- 83.9
ii) The amount of land revaluation excess
includable as qualifying capital 134.0 (14.8) (6.8) 148.9 140.9
iii) Subordinated debt 1,509.0 (72.1) (160.3) 1,581.1 1,669.4
(4) Tier 3 capital includable as qualifying capital 30.0 -- 0.1 30.0 29.9
(5) Deductions from total qualifying capital 41.7 7.8 2.8 33.9 38.8
(6) Total qualifying capital (2)+(3)+(4)-(5) 5,279.5 591.8 (32.6) 4,687.7 5,312.1
(7) Risk-adjusted assets 44,093.8 (809.1) (552.2) 44,903.0 44,646.1
-----------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in billions of yen except percentages)
-----------------------------------------------------------------------------------------------------------------------------
As of
March 31,
2004 (A) Increase/ Increase/ As of As of
(Preliminary (Decrease) (Decrease) March 31, September 30,
basis) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital ratio 12.18% 1.94% (0.04)% 10.24% 12.23%
(2) Tier 1 capital 2,437.5 445.5 (21.0) 1,991.9 2,458.5
(3) Tier 2 capital includable as qualifying capital 2,232.3 263.7 (3.2) 1,968.5 2,229.0
i) The amount of unrealized gains on investment
securities, includable as qualifying capital 287.3 287.3 216.2 -- 71.0
ii) The amount of land revaluation excess
includable as qualifying capital 134.1 (14.8) (6.8) 148.9 141.0
iii) Subordinated debt 1,461.1 (68.1) (160.2) 1,529.3 1,621.3
(4) Tier 3 capital includable as qualifying capital 12.4 (10.9) (6.3) 23.4 18.7
(5) Deductions from total qualifying capital 4.5 (0.1) (0.5) 4.6 5.0
(6) Total qualifying capital (2)+(3)+(4)-(5) 4,677.7 698.4 (23.5) 3,979.2 4,701.2
(7) Risk-adjusted assets 38,375.3 (471.9) (61.5) 38,847.2 38,436.9
-----------------------------------------------------------------------------------------------------------------------------
29
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
2 Loan Portfolio and Other
1. Risk-Monitored Loans
(Non-accrual loans, accruing loans contractually past due 3 months or more
and restructured loans)
[Consolidated]
(in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 22,684 (31,025) (15,435) 53,709 38,119
Past due loans 519,109 (404,120) (167,044) 923,229 686,154
Accruing loans contractually
past due 3 months or more 12,260 (5,818) (4,993) 18,078 17,253
Restructured loans 508,913 (468,570) (192,587) 977,483 701,501
-----------------------------------------------------------------------------------------------------------------------------
Total 1,062,966 (909,534) (380,061) 1,972,501 1,443,028
-----------------------------------------------------------------------------------------------------------------------------
Amount of direct reduction 300,610 (114,649) (67,353) 415,259 367,964
Loans and bills discounted 38,017,560 (651,017) 84,484 38,668,577 37,933,075
-----------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.05% (0.07)% (0.04)% 0.13% 0.10%
Past due loans 1.36% (1.02)% (0.44)% 2.38% 1.80%
Accruing loans contractually
past due 3 months or more 0.03% (0.01)% (0.01)% 0.04% 0.04%
Restructured loans 1.33% (1.18)% (0.51)% 2.52% 1.84%
-----------------------------------------------------------------------------------------------------------------------------
Total 2.79% (2.30)% (1.00)% 5.10% 3.80%
-----------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated]
(in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 15,177 (32,175) (9,066) 47,352 24,244
Past due loans 445,124 (380,342) (139,716) 825,467 584,840
Accruing loans contractually
past due 3 months or more 11,835 (5,250) (3,918) 17,085 15,753
Restructured loans 507,440 (531,407) (191,561) 1,038,848 699,002
-----------------------------------------------------------------------------------------------------------------------------
Total 979,578 (949,175) (344,263) 1,928,753 1,323,841
-----------------------------------------------------------------------------------------------------------------------------
Amount of direct reduction 243,437 (112,341) (74,610) 355,778 318,047
Loans and bills discounted 34,816,640 91,803 556,179 34,724,836 34,260,461
-----------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.04% (0.09)% (0.02)% 0.13% 0.07%
Past due loans 1.27% (1.09)% (0.42)% 2.37% 1.70%
Accruing loans contractually
past due 3 months or more 0.03% (0.01)% (0.01)% 0.04% 0.04%
Restructured loans 1.45% (1.53)% (0.58)% 2.99% 2.04%
-----------------------------------------------------------------------------------------------------------------------------
Total 2.81% (2.74)% (1.05)% 5.55% 3.86%
-----------------------------------------------------------------------------------------------------------------------------
30
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
2. Classification of Risk-Monitored Loans
Classification by geographic area
[Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Domestic* 807,675 (828,736) (392,580) 1,636,411 1,200,256
Overseas* 255,291 (80,798) 12,519 336,090 242,772
Asia 22,645 (34,064) (10,736) 56,710 33,382
Indonesia 4,090 (8,340) (5,825) 12,431 9,916
Thailand 7,863 (3,016) 400 10,879 7,462
Hong Kong 4,717 (8,347) (1,926) 13,064 6,643
Other 5,974 (14,360) (3,385) 20,335 9,360
United States of America 184,060 8,213 43,146 175,847 140,913
Other 48,585 (54,946) (19,891) 103,532 68,477
-----------------------------------------------------------------------------------------------------------------------------
Total 1,062,966 (909,534) (380,061) 1,972,501 1,443,028
-----------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
Classification by type of industry of borrowers
[Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Domestic* 807,675 (828,736) (392,580) 1,636,411 1,200,256
Manufacturing 101,319 (101,776) (8,999) 203,095 110,318
Construction 43,813 (75,120) (51,040) 118,934 94,854
Wholesale and Retail 189,632 (209,464) (102,882) 399,097 292,514
Banks and other financial institutions 14,943 (2,144) 5,193 17,087 9,749
Real estate 275,472 (160,765) (48,026) 436,237 323,498
Services 81,953 (91,830) (24,624) 173,784 106,578
Other industries 20,394 (49,607) (27,800) 70,001 48,194
Consumer 80,146 (138,026) (134,400) 218,172 214,546
Overseas* 255,291 (80,798) 12,519 336,090 242,772
Banks and other financial institutions 80,588 74,465 79,172 6,122 1,415
Commercial and industrial 166,429 (157,206) (70,651) 323,635 237,080
Other 8,274 1,942 3,997 6,331 4,276
-----------------------------------------------------------------------------------------------------------------------------
Total 1,062,966 (909,534) (380,061) 1,972,501 1,443,028
-----------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
31
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
3. Allowance for Loan Losses
[Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 630,054 (386,211) (144,431) 1,016,265 774,485
Formula allowance for loan losses 478,090 (186,481) (66,458) 664,572 544,549
Specific allowance for loan losses 146,054 (193,087) (75,261) 339,141 221,315
Allowance for loans to specific foreign borrowers 5,908 (6,642) (2,711) 12,551 8,620
-----------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 468,577 (340,796) (110,945) 809,374 579,522
Formula allowance for loan losses 349,680 (156,886) (45,890) 506,566 395,571
Specific allowance for loan losses 112,987 (177,268) (62,342) 290,256 175,330
Allowance for loans to specific foreign borrowers 5,908 (6,642) (2,711) 12,551 8,620
Reserve for financial assistance to specific
borrowers -- -- (1,371) -- 1,371
-----------------------------------------------------------------------------------------------------------------------------
4. Coverage Ratio against Risk-Monitored Loans
[Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (a) 630,054 (386,211) (144,431) 1,016,265 774,485
Risk-monitored loans (b) 1,062,966 (909,534) (380,061) 1,972,501 1,443,028
Coverage ratio (a)/(b) 59.27% 7.75% 5.60% 51.52% 53.67%
-----------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (a) 468,577 (340,796) (110,945) 809,374 579,522
Risk-monitored loans (b) 979,578 (949,175) (344,263) 1,928,753 1,323,841
Coverage ratio (a)/(b) 47.83% 5.87% 4.05% 41.96% 43.77%
-----------------------------------------------------------------------------------------------------------------------------
32
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
5. Disclosed Claims under the Financial Reconstruction Law (the "FRL")
[Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 90,966 (45,692) (32,977) 136,659 123,943
Claims under high risk 382,536 (389,464) (123,572) 772,000 506,108
Claims under close observation 519,276 (536,657) (195,479) 1,055,933 714,756
-----------------------------------------------------------------------------------------------------------------------------
Total (1) 992,778 (971,814) (352,030) 1,964,593 1,344,808
-----------------------------------------------------------------------------------------------------------------------------
Normal claims 37,852,472 452,103 549,782 37,400,369 37,302,689
-----------------------------------------------------------------------------------------------------------------------------
6. Status of Secured Coverage on Disclosed Claims under the FRL
[Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-----------------------------------------------------------------------------------------------------------------------------
Secured coverage amount (2) 675,687 (789,997) (314,167) 1,465,684 989,854
Allowance for loan losses 210,381 (288,590) (95,425) 498,971 305,806
Reserve for financial support to specific
borrowers -- -- -- -- --
Collateral, guarantees, etc. 456,305 (501,407) (218,741) 966,712 684,047
Secured coverage ratio (2)/(1) 68.06% (6.54)% (5.54)% 74.60% 73.60%
-----------------------------------------------------------------------------------------------------------------------------
Secured Coverage of Each Category of Disclosed Claims under the FRL
[Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
financial amount by
support collater- Coverage Coverage
Disclosed Allowance to specific alized and ratio ratio
amount for loan borrowers guaranteed [(B)+(C)] / [(B)+(C)+(D)]
Category (A) losses (B) (C) loans (D) [(A)-(D)] / (A)
-----------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and 90,966 5,283 -- 85,683 100.00% 100.00%
substantially bankrupt debtors [136,659] [11,460] -- [125,198] [100.00%] [100.00%]
Claims under high risk 382,536 105,087 -- 210,741 61.17% 82.56%
[772,000] [267,551] -- [364,388] [65.63%] [81.85%]
Claims under close observation 519,276 100,011 -- 168,880 28.54% 51.78%
[1,055,933] [219,959] -- [477,126] [38.00%] [66.01%]
Sub total (1) 992,778 210,381 -- 465,305 39.88% 68.06%
[1,964,593] [498,971] -- [966,712] [50.00%] [74.60%]
Normal claims 37,852,472
[37,400,369]
Total (2) 38,845,250
[39,364,962]
Sub total (1) / Total (2) 2.55%
[4.99%]
-----------------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2004. The lower figures with bracket
are as of March 31, 2003.
33
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
7. Progress in the Disposal of Problem Assets [Non-Consolidated]
(excluding claims under close observation)
(1) Assets categorized as problem assets as of September 30, 2000 based on the FRL (in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of As of
September 30, March 31, September 30, March 31, September 30, March 31, September 30, March 31,
2000 2001 2001 2002 2002 2003 2003 (a) 2004 (b) (b) - (a)
-----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt
and substantially
bankrupt debtors 274.3 144.3 150.6 144.9 210.9 38.7 19.0 14.9 (4.0)
Claims under high
risk 1,053.5 944.9 758.4 538.4 193.6 13.5 10.3 7.4 (2.8)
-----------------------------------------------------------------------------------------------------------------------------------
Total 1,327.8 1,089.2 909.0 683.4 404.6 52.3 29.3 22.4 (6.9)
-----------------------------------------------------------------------------------------------------------------------------------
(A) (B)
Progress in the disposal of problem assets (in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Disposition by borrowers' liquidation 0.1
Re-constructive disposition 2.1
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 2.8
Charge-off 0.3
Other 1.4
Collection of claims 1.4
Improvements in financial status 0.0
--------------------------------------------------------
Total 6.9(B)
--------------------------------------------------------
Above (A) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Legal liquidation 0.8
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 2.8
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
--------------------------------------------------------
Total 3.6
--------------------------------------------------------
(2) Assets newly categorized as problem assets during second half of fiscal 2000 based on the FRL (in billions of yen)
---------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of
March 31, September 30, March 31, September 30, March 31, September 30, March 31,
2001 2001 2002 2002 2003 2003 (a) 2004 (b) (b) - (a)
---------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt
debtors 106.8 98.3 94.3 44.0 18.6 17.8 14.7 (3.1)
Claims under high risk 635.3 575.4 447.4 269.3 72.5 49.1 30.7 (18.4)
---------------------------------------------------------------------------------------------------------------------------
Total 742.2 673.7 541.8 313.3 91.2 67.0 45.5 (21.5)
---------------------------------------------------------------------------------------------------------------------------
(C) (D)
Progress in the disposal of problem assets (in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Disposition by borrowers' liquidation 0.5
Re-constructive disposition 0.0
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 4.8
Charge-off 0.0
Other 15.9
Collection of claims 14.8
Improvements in financial status 1.0
--------------------------------------------------------
Total 21.5(D)
--------------------------------------------------------
Above (C) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Legal liquidation 0.9
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 13.6
Entrust through the managed trust method
to the Resolution and Collection
Corporation --
--------------------------------------------------------
Total 14.6
--------------------------------------------------------
34
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(3) Assets newly categorized as problem assets during first half of fiscal 2001 based on the FRL (in billions of yen)
----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of
September 30, March 31, September 30, March 31, September 30, March 31,
2001 2002 2002 2003 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially 27.1 25.6 26.4 17.8 11.4 6.7 (4.6)
bankrupt debtors
Claims under high risk 257.0 140.1 79.9 47.2 27.9 17.7 (10.1)
----------------------------------------------------------------------------------------------------------------------------------
Total 284.2 165.8 106.3 65.1 39.4 24.5 (14.8)
----------------------------------------------------------------------------------------------------------------------------------
(E) (F)
Progress in the disposal of problem assets (in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Disposition by borrowers' liquidation 0.0
Re-constructive disposition 1.8
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 7.3
Charge-off 0.9
Other 4.7
Collection of claims 3.8
Improvements in financial
status 0.8
--------------------------------------------------------
Total 14.8(F)
--------------------------------------------------------
Above (E) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Legal liquidation 0.4
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller
balance loans 6.3
Entrust through the managed trust method
to the Resolution and Collection
Corporation --
--------------------------------------------------------
Total 6.7
--------------------------------------------------------
(4) Assets newly categorized as problem assets during second half of fiscal 2001 based
on the FRL (in billions of yen)
-------------------------------------------------------------------------------------------------
As of As of As of As of As of
March 31, September 30, March 31, September 30, March 31,
2002 2002 2003 2003 (a) 2004 (b) (b) - (a)
-------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially
bankrupt debtors 57.3 35.4 14.7 12.3 4.7 (7.6)
Claims under high risk 315.9 162.4 104.1 48.5 28.3 (20.1)
Total 373.2 197.9 118.9 60.8 33.0 (27.7)
-------------------------------------------------------------------------------------------------
(G) (H)
Progress in the disposal of problem assets (in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Disposition by borrowers' liquidation 0.5
Re-constructive disposition 0.3
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 12.8
Charge-off 0.3
Other 13.7
Collection of claims 7.6
Improvements in financial
status 6.0
--------------------------------------------------------
Total 27.7(H)
--------------------------------------------------------
Above (G) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Legal liquidation 0.9
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller
balance loans 3.7
Entrust through the managed trust method
to the Resolution and Collection
Corporation --
--------------------------------------------------------
Total 4.7
--------------------------------------------------------
35
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(5) Assets newly categorized as problem assets during first half of fiscal 2002
based on the FRL
(in billions of yen)
----------------------------------------------------------------------------------------------------
As of As of As of As of
September 30, March 31, September 30, March 31,
2002 2003 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 24.6 19.8 16.7 9.1 (7.6)
Claims under high risk 279.9 143.5 82.7 47.2 (35.4)
----------------------------------------------------------------------------------------------------
Total 304.5 163.3 99.5 56.4 (43.0)
----------------------------------------------------------------------------------------------------
(I) (J)
Progress in the disposal of problem assets (in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Disposition by borrowers' liquidation 0.3
Re-constructive disposition 2.0
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 20.3
Charge-off 2.8
Other 17.5
Collection of claims 9.8
Improvements in financial
status 7.6
--------------------------------------------------------
Total 43.0(J)
--------------------------------------------------------
Above (I) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Legal liquidation 1.9
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller
balance loans 3.6
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
--------------------------------------------------------
Total 5.6
--------------------------------------------------------
(6) Assets newly categorized as problem assets during second half of fiscal
2002 based on the FRL
(in billions of yen)
----------------------------------------------------------------------------------------
As of As of As of
March 31, September 30, March 31,
2003 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------
Claims to bankrupt and substantially 26.7 32.0 22.0 (9.9)
bankrupt debtors
Claims under high risk 390.7 169.1 115.7 (53.3)
----------------------------------------------------------------------------------------
Total 417.5 201.2 137.8 (63.3)
----------------------------------------------------------------------------------------
(K) (L)
Progress in the disposal of problem assets (in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Disposition by borrowers' liquidation 1.1
Re-constructive disposition 8.2
Improvements in financial status due
to re-constructive disposition --
Loan sales to secondary market 26.2
Charge-off 3.2
Other 24.4
Collection of claims 19.2
Improvements in financial
status 5.1
--------------------------------------------------------
Total 63.3(L)
--------------------------------------------------------
Above (K) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Legal liquidation 1.4
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller
balance loans 7.9
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
--------------------------------------------------------
Total 9.3
--------------------------------------------------------
36
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(7) Assets newly categorized as problem assets during first half of fiscal 2003
based on the FRL
(in billions of yen)
----------------------------------------------------------------------------
As of As of
September 30, March 31,
2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 14.3 8.8 (5.4)
Claims under high risk 118.2 73.3 (44.8)
----------------------------------------------------------------------------
Total 132.5 82.2 (50.3)
----------------------------------------------------------------------------
(M) (N)
Progress in the disposal of problem assets (in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Disposition by borrowers' liquidation 1.3
Re-constructive disposition 1.3
Improvements in financial status due
to re-constructive disposition --
Loan sales to secondary market 15.6
Charge-off 2.7
Other 29.2
Collection of claims 25.1
Improvements in financial
status 4.0
--------------------------------------------------------
Total 50.3(N)
--------------------------------------------------------
Above (M) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
--------------------------------------------------------
Second half of
fiscal 2003
--------------------------------------------------------
Legal liquidation 2.8
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller
balance loans 4.5
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
--------------------------------------------------------
Total 7.3
--------------------------------------------------------
(8) Assets newly categorized as problem assets during second half of fiscal
2003 based on the FRL
(in billions of yen)
--------------------------------------------------------
As of
March 31,
2004
--------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 9.5
Claims under high risk 61.8
--------------------------------------------------------
Total 71.3
--------------------------------------------------------
(9) Historical trend of problem assets based on the FRL
(in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of As of
September 30, March 31, September 30, March 31, September 30, March 31, September 30, March 31,
2000 2001 2001 2002 2002 2003 2003 (a) 2004 (b) (b) - (a)
-----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt
and substantially
bankrupt debtors 274.3 251.2 276.1 322.3 341.5 136.6 123.9 90.9 (32.9)
Claims under high
risk 1,053.5 1,580.2 1,590.9 1,442.0 985.3 772.0 506.1 382.5 (123.5)
-----------------------------------------------------------------------------------------------------------------------------------
Total 1,327.8 1,831.4 1,867.0 1,764.4 1,326.9 908.6 630.0 473.5 (156.5)
-----------------------------------------------------------------------------------------------------------------------------------
37
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
8. Classification of Loans by Type of Industry
(1) Loans by type of industry [Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic offices (excluding
loans booked at offshore
markets) 30,677,641 1,020,710 897,301 29,656,931 29,780,340
Manufacturing 4,121,870 (182,959) (47,617) 4,304,829 4,169,487
Agriculture 10,595 (3,426) (1,727) 14,021 12,322
Forestry 4,887 (438) (344) 5,325 5,231
Fishery 2,453 (201) (121) 2,654 2,574
Mining 30,597 (2,852) (4,674) 33,449 35,271
Construction 796,770 (159,633) (67,878) 956,403 864,648
Utilities 248,536 (17,011) (14,351) 265,547 262,887
Media and Communication 603,963 (46,377) (41,323) 650,340 645,286
Wholesale and Retail 3,956,862 (445,293) (221,401) 4,402,155 4,178,263
Banks and other financial
institutions 1,885,739 (5,261) (94,283) 1,891,000 1,980,022
Real estate 3,455,104 23,811 13,891 3,431,293 3,441,213
Services 3,898,202 (207,119) (525,142) 4,105,321 4,423,344
Municipal government 33,067 358 1,946 32,709 31,121
Other industries 11,628,996 2,067,111 1,900,325 9,561,885 9,728,671
Overseas offices and loans
booked at offshore markets 4,138,998 (928,906) (341,121) 5,067,905 4,480,120
------------------------------------------------------------------------------------------------------
Total 34,816,640 91,803 556,179 34,724,836 34,260,461
------------------------------------------------------------------------------------------------------
(2) Domestic consumer loans [Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Total domestic consumer
loans 7,798,965 599,651 86,525 7,199,314 7,712,440
Housing loans 7,363,459 669,782 115,565 6,693,677 7,247,894
Others 435,506 (70,131) (29,040) 505,637 464,546
------------------------------------------------------------------------------------------------------
(3) Domestic loans to small and medium-sized companies [Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic loans to small and
medium-sized companies 17,328,991 128,100 (126,354) 17,200,890 17,455,345
Percentage to total domestic
loans 56.48% (1.51)% (2.12)% 57.99% 58.61%
------------------------------------------------------------------------------------------------------
38
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
9. Loans and Deposits [Non-Consolidated]
(in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Deposits (ending balance) 51,819,415 3,992,241 1,421,457 47,827,174 50,397,958
Deposits (average balance) 49,286,149 3,031,408 506,752 46,254,741 48,779,396
Loans (ending balance) 34,816,640 91,803 556,179 34,724,836 34,260,461
Loans (average balance) 34,660,436 (157,957) 286,724 34,818,393 34,373,711
------------------------------------------------------------------------------------------------------
10. Domestic Deposits [Non-Consolidated]
(in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Individuals 26,667,948 1,184,767 435,543 25,483,181 26,232,405
Corporations and others 17,732,845 888,486 (186,635) 16,844,358 17,919,481
Domestic deposits 44,400,794 2,073,254 248,907 42,327,540 44,151,886
------------------------------------------------------------------------------------------------------
Note: Amounts do not include negotiable certificates of deposit, deposits of
overseas offices and JOM accounts.
11. Number of Employees [Non-Consolidated]
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Number of Employees 14,468 (711) (594) 15,179 15,062
------------------------------------------------------------------------------------------------------
12. Number of Offices [Non-Consolidated]
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic 267 (15) (6) 282 273
Head office and Branches 249 (11) (5) 260 254
Sub-branches and Agencies 18 (4) (1) 22 19
Overseas 73 1 -- 72 73
Branches 43 1 1 42 42
Sub-branches 14 1 -- 13 14
Representative offices 16 (1) (1) 17 17
------------------------------------------------------------------------------------------------------
Total 340 (14) (6) 354 346
------------------------------------------------------------------------------------------------------
39
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
13. Status of Deferred Tax Assets [Non-Consolidated]
(1) Tax Effects of the Items Comprising Net Deferred Tax Assets
[Non-Consolidated] (in billions of yen)
----------------------------------------------------------
Mar. 31, 2004
vs. Mar. 31, 2003
----------------------------------------------------------
Deferred tax assets 801.3 (231.8)
Allowance for loan losses 232.2 (159.0)
Write down of investment
securities 83.4 13.5
Net operating loss
carryforwards 485.1 (42.3)
Reserve for employees'
retirement benefits 30.2 (3.7)
Unrealized losses on -- (112.1)
securities available for
sale
Other 37.7 (0.1)
Valuation allowance (67.4) 72.0
Deferred tax liabilities 273.6 259.0
Gains on placing trust for
retirement benefits 7.3 0.0
Unrealized gains on
securities available for
sale 259.4 259.4
Other 6.9 (0.4)
Net deferred tax assets 527.6 (490.8)
[Consolidated]
Net deferred tax assets 460.8 (486.7)
(2) Net Business Profits before Credit Costs and Taxable Income (Current Fiscal
Year)
[Non-Consolidated] (in billions
of yen)
--------------------------------------------------------
FY 2003
--------------------------------------------------------
Net business profits 466.8
before credit costs
Credit related costs (135.3)
Income before income taxes 587.7
Reconciliation to taxable income (405.6)
Taxable income 182.0
--------------------------------------------------------
(3) Net Business Profits before Credit Costs and Taxable Income (Past Five
Fiscal Year)
[Non-Consolidated] (in billions of yen)
-----------------------------------------------------------------
1998 1999 2000 2001 2002
-----------------------------------------------------------------
Net business 604.7 400.8 388.9 463.3 511.5
profits before
credit costs
Credit related costs 889.5 504.5 554.0 484.8 341.0
Income before 69.8 279.9 (225.3) (317.4) (287.3)
income taxes
Reconciliation to 178.6 82.1 393.0 137.3 (821.7)
taxable income
Taxable income 248.5 362.1 167.6 (180.0) (1,109.0)
-----------------------------------------------------------------
(4) Classification Based on Prior Year Operating Results as Provided in the
JICPA Audit Committee Report No.66
Although we recorded taxable income for the year ended March 31, 2004, we
are classified as "4" described above since we have material net operating loss
carryforwards. However since we believe the net operating loss carryforwards are
attributable to extraordinary factors such as changes in laws and regulations,
we apply the exception to classification 4. (Five years' future taxable income
is estimable.)
[Extraordinary Factors Such as Changes in Laws and Regulations]
Our net operating loss carryforwards were incurred due to, among other
things, the followings : (i) we accelerated the final disposal of nonperforming
loans in response to both the "Emerging Economic Package," which provided
guidance to major banks to remove from their balance sheets claims to debtors
classified as "likely to become bankrupt" or below, and the "Program for
Financial Revival," which urged major banks to reduce the ratio of disclosed
claims to total claims by about half; and (ii) we reduced our holdings of
strategic equity investments under the "Law Concerning Restriction, etc. of
Banks'Shareholdings etc."
(5) Realizability of Deferred Tax Assets at March 31, 2004 (Assumptions)
(in billions of yen)
--------------------------------------------------------
Five year
total (2004 to
2008)
--------------------------------------------------------
Net business profits (based on our
business plan) (*1) 3,590.0
Net business profits (basis of
realizability determination) (*2) 3,070.0
Income before income taxes (basis of
realizability determination) 2,490.0
Taxable income before adjustments
(basis of realizability
determination) (*3) 2,980.0
Temporary difference + net operating
loss carryforwards (for which deferred
tax assets shall be recognized) 1,987.2
Deferred tax assets at March 31,
2004 (*4) 801.3
--------------------------------------------------------
(*1) Total of the two banks, before credit costs
(*2) Based on the scenario that current short-term interest rate level continues
for the next five years
(*3) Before reversals of existing deductible temporary differences and net
operating loss carryforwards
(*4) Temporary difference + net operating loss carryforwards (for which deferred
tax assets shall be recognized) multiplied by effective tax rate
(consolidated corporate-tax basis)
(Reference) Assumptions for Business Plan
------------------------------------------------------------------------------
FY 2004 FY 2005 FY2006 FY2007 FY2008
------------------------------------------------------------------------------
S/T interest rate (3 m/s TIBOR) 0.09% 0.13% 0.50% 0.57% 0.88%
L/T interest rate (10 year JGB) 1.48% 1.90% 2.30% 2.03% 2.58%
Exchange rate (USD/Yen) (Y)105 (Y)105 (Y)105 (Y)105 (Y)105
------------------------------------------------------------------------------
40
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
14. Employees' Retirement Benefits
(1) Benefit obligation
(in millions of yen)
-----------------------------------------------------------------------
As of
March 31,
2004
-----------------------------------------------------------------------
Projected benefits obligation (A) 576,803
Fair value of plan assets (B) 505,989
Prepaid pension cost (C) 54,417
Reserve for employees' retirement benefits (D) 13,272
Total amount unrecognized (A-B+C-D) 111,957
Unrecognized net obligation by the change
of accounting policy 11,192
Unrecognized prior service cost (31,370)
Unrecognized net actuarial loss 132,136
-----------------------------------------------------------------------
Note: Discount rate is 2.1%.
(2) Net periodic pension cost
(in millions of yen)
--------------------------------------------------------
For the year
ended
March 31, 2004
--------------------------------------------------------
Net periodic cost of the employees'
retirement benefits 58,555
Service cost 14,893
Interest cost 13,014
Expected return on plan assets (14,851)
Amortization of net obligation by
the change of accounting policy 11,802
Amortization of prior service cost (4,055)
Amortization of net actuarial loss 28,884
Other 8,867
--------------------------------------------------------
41
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
15. Earning Projections for the Fiscal Year Ending March 31, 2005
[Consolidated] (in billions of yen)
----------------------------------------------------------
For the year ending For the year ended
March 31, 2005 March 31, 2004
----------------------------------------------------------
Ordinary income 2,000.0 2,045.2
Ordinary profit 525.0 446.5
Net income 275.0 429.2
----------------------------------------------------------
[Non-consolidated] (in billions of yen)
----------------------------------------------------------
For the year ending For the year ended
March 31, 2005 March 31, 2004
----------------------------------------------------------
Ordinary income 1,500.0 1,471.0
Ordinary profit 380.0 290.2
Net income 210.0 359.7
----------------------------------------------------------
----------------------------------------------------------
Net business
profits before
provision for
formula
allowance for
loan losses 500.0 466.8
----------------------------------------------------------
42
[LOGO OF MTFG]
----------------------------------------
Selected Financial Information
under Japanese GAAP
For the Fiscal Year Ended March 31, 2004
----------------------------------------
The Mitsubishi Trust and Banking Corporation
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
[Contents]
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended March 31,
2004
1. Consolidated Balance Sheets 43
2. Consolidated Statements of Operations 44
3. Consolidated Statements of Capital 45
Surplus and Retained Earnings
4. Non-Consolidated Balance Sheets 46
5. Non-Consolidated Statements of Operations 47
6. Notional Principal or Contract Amount, Market Value
and Valuation Gains (Losses)on Derivatives 48
[Consolidated]
7. Comparison of Statement of Trust Assets
and Liabilities [Non-Consolidated], [Trust] 49
8. Financial Results [Consolidated], [Non-Consolidated] 52
9. Average interest rate spread [Non-Consolidated] 54
10. Valuation Differences on Securities [Consolidated], [Non-Consolidated] 54
[Trust]
11. Risk-Adjusted Capital Ratio Based on the
Standards of the BIS [Consolidated], [Non-Consolidated] 55
2 Loan Portfolio and Other
1. Risk-Monitored Loans [Consolidated], [Non-Consolidated], [Trust] 56
[Non-Consolidated and Trust], [Consolidated and Trust]
2. Classification of Risk-Monitored Loans [Consolidated and Trust] 58
3. Allowance for Loan Losses [Consolidated], [Non-Consolidated], [Trust] 59
4. Coverage Ratio against Risk-Monitored Loans [Consolidated], [Non-Consolidated] 59
5. Disclosed Claims under the Financial
Reconstruction Law(the"FRL") [Non-Consolidated], [Trust] 60
[Non-Consolidated and Trust]
6. Status of Secured Coverage on Disclosed
Claims under the FRL [Non-Consolidated], [Trust] 61
[Non-Consolidated and Trust]
7. Progress in the Disposal of Problem Assets [Non-Consolidated and Trust] 63
8. Classification of Loans by Type of Industry [Non-Consolidated], [Trust] 67
[Non-Consolidated and Trust]
9. Loans and Deposits [Non-Consolidated] 70
10. Domestic Deposits [Non-Consolidated] 70
11. Number of Employees [Non-Consolidated] 70
12. Number of Offices [Non-Consolidated] 70
13. Status of Deferred Tax Assets [Non-Consolidated] 71
14. Employees' Retirement Benefits [Non-Consolidated] 72
15. Earning Projections for the Fiscal Year
Ending March 31, 2005 [Consolidated], [Non-Consolidated] 73
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended March 31,
2004
(Japanese GAAP)
1. Consolidated Balance Sheets
----------------------------------------------------------------------------------------------
Increase/
As of March 31 (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
----------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 1,311,942 1,333,630 (21,688)
Call loans and bills bought 211,800 256,132 (44,332)
Receivables under securities borrowing transactions 1,042,049 1,535,155 (493,106)
Commercial paper and other debt purchased 40,851 16,418 24,432
Trading assets 277,967 350,573 (72,606)
Money held in trust 6,953 9,675 (2,722)
Investment securities 7,415,627 7,577,895 (162,267)
Allowance for losses on investment securities (25) -- (25)
Loans and bills discounted 8,588,926 8,287,748 301,178
Foreign exchanges 10,717 19,228 (8,511)
Other assets 790,162 1,143,264 (353,101)
Premises and equipment 166,218 184,212 (17,993)
Deferred tax assets 186,617 353,929 (167,311)
Deferred tax assets on land revaluation losses -- 1,593 (1,593)
Customers' liabilities for acceptances and guarantees 230,475 410,230 (179,754)
Allowance for loan losses (202,584) (281,027) 78,443
----------------------------------------------------------------------------------------------
Total assets 20,077,700 21,198,661 (1,120,960)
==============================================================================================
Liabilities:
Deposits 10,846,664 10,986,946 (140,282)
Negotiable certificates of deposit 1,348,411 1,453,650 (105,239)
Call money and bills sold 1,157,889 1,125,546 32,342
Payables under repurchase agreements 503,988 333,746 170,242
Payables under securities lending transactions 1,991,528 2,601,972 (610,443)
Commercial paper 396,000 451,000 (55,000)
Trading liabilities 75,374 125,897 (50,522)
Borrowed money 202,124 220,247 (18,122)
Foreign exchanges 12,865 20,280 (7,415)
Short-term corporate bonds 40,000 -- 40,000
Bonds and notes 383,899 358,600 25,299
Due to trust account 1,380,268 1,401,617 (21,349)
Other liabilities 504,940 1,000,431 (495,490)
Reserve for employees' bonuses 3,756 4,418 (662)
Reserve for employees' retirement benefits 1,068 9,261 (8,192)
Reserve for expenses related to EXPO 2005 Japan 60 19 41
Deferred tax liabilities 91 51 39
Deferred tax liabilities on land revaluation excess 8,517 196 8,321
Acceptances and guarantees 230,475 410,230 (179,754)
----------------------------------------------------------------------------------------------
Total liabilities 19,087,926 20,504,115 (1,416,188)
----------------------------------------------------------------------------------------------
Minority interest 4,499 2,951 1,548
----------------------------------------------------------------------------------------------
Shareholder's equity:
Capital stock 324,279 324,279 --
Capital surplus 274,752 274,752 --
Retained earnings 216,076 102,888 113,187
Land revaluation excess (9,586) (2,071) (7,514)
Unrealized gains (losses) on securities available
for sale 187,336 (3,228) 190,565
Foreign currency translation adjustments (7,584) (5,025) (2,558)
----------------------------------------------------------------------------------------------
Total shareholder's equity 985,273 691,594 293,679
----------------------------------------------------------------------------------------------
Total liabilities, minority interest
and shareholder's equity 20,077,700 21,198,661 (1,120,960)
==============================================================================================
43
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
2. Consolidated Statements of Operations
----------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
----------------------------------------------------------------------------------------------
Ordinary income:
Trust fees 70,487 82,927 (12,440)
Interest income: 300,665 367,962 (67,297)
(Interest on loans and discounts) 100,352 128,412 (28,060)
(Interest and dividends on securities) 158,415 166,982 (8,566)
Fees and commissions 63,582 54,017 9,564
Trading profits 2,612 3,501 (888)
Other business income 50,094 60,104 (10,010)
Other ordinary income 34,044 41,098 (7,053)
----------------------------------------------------------------------------------------------
Total ordinary income 521,485 609,611 (88,125)
----------------------------------------------------------------------------------------------
Ordinary expenses:
Interest expense: 94,821 169,362 (74,541)
(Interest on deposits) 34,794 55,466 (20,672)
Fees and commissions 11,850 7,146 4,704
Trading losses 244 248 (3)
Other business expenses 40,419 54,105 (13,686)
General and administrative expenses 176,601 179,737 (3,135)
Other ordinary expenses 50,145 399,574 (349,429)
----------------------------------------------------------------------------------------------
Total ordinary expenses 374,083 810,175 (436,091)
----------------------------------------------------------------------------------------------
Ordinary profit (loss) 147,402 (200,564) 347,966
----------------------------------------------------------------------------------------------
Special gains 16,486 12,754 3,731
Special losses 23,881 10,412 13,469
----------------------------------------------------------------------------------------------
Income (Loss) before income taxes and others 140,006 (198,221) 338,228
----------------------------------------------------------------------------------------------
Income taxes-current (31,401) 3,989 (35,390)
Income taxes-refund -- 3,839 (3,839)
Income taxes-deferred 39,708 (100,783) 140,491
Minority interest 1,452 (219) 1,671
----------------------------------------------------------------------------------------------
Net income (loss) 130,247 (97,369) 227,616
==============================================================================================
44
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubisi Trust and Banking Corporation)
(Japanese GAAP)
3. Consolidated Statements of Capital Surplus and Retained Earnings
----------------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Balance of capital surplus at beginning of fiscal year 274,752 255,617 19,135
Increase: -- 19,135 (19,135)
Issuance of common stock due to capital increase -- 19,135 (19,135)
----------------------------------------------------------------------------------------------------------------------
Balance of capital surplus at end of fiscal year 274,752 274,752 --
----------------------------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 102,888 210,676 (107,787)
Increase: 130,270 -- 130,270
Net income 130,247 -- 130,247
Decrease in comsolidated subsidiaries 22 -- 22
Decrease: (17,082) (107,787) 90,705
Net loss -- (97,369) 97,369
Cash dividends (15,674) (4,683) (10,991)
Reduction in land revaluation excess (1,407) (5,551) 4,143
Decrease in companies accounted for by the equity method -- (184) 184
----------------------------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 216,076 102,888 113,187
----------------------------------------------------------------------------------------------------------------------
45
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
4. Non-Consolidated Balance Sheets
----------------------------------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 1,221,929 1,191,315 30,614
Call loans 176,600 256,132 (79,532)
Receivables under securities borrowing transactions 450,049 983,156 (533,107)
Bills bought 35,200 -- 35,200
Commercial paper and other debt purchased 40,851 16,418 24,432
Trading assets 277,967 350,573 (72,606)
Money held in trust 6,953 9,675 (2,722)
Investment securities 7,416,391 7,589,206 (172,815)
Allowance for losses on investment securities (25) (157) 132
Loans and bills discounted 8,573,188 8,261,722 311,465
Foreign exchanges 10,717 19,268 (8,551)
Other assets 783,933 1,136,410 (352,477)
Premises and equipment 141,787 159,504 (17,716)
Deferred tax assets 185,281 354,317 (169,035)
Deferred tax assets on land revaluation losses -- 1,593 (1,593)
Customers' liabilities for acceptances and guarantees 245,371 409,773 (164,402)
Allowance for loan losses (201,986) (278,996) 77,009
----------------------------------------------------------------------------------------------------------------------
Total assets 19,364,209 20,459,916 (1,095,706)
----------------------------------------------------------------------------------------------------------------------
Liabilities:
Deposits 10,844,731 11,143,611 (298,880)
Negotiable certificates of deposit 1,347,875 1,453,650 (105,774)
Call money 505,489 652,346 (146,857)
Payables under repurchase agreements 503,988 333,746 170,242
Payables under securities lending transactions 1,334,914 1,769,364 (434,450)
Bills sold 652,400 473,200 179,200
Commercial paper 396,000 451,000 (55,000)
Trading liabilities 75,374 125,897 (50,522)
Borrowed money 319,922 341,545 (21,623)
Foreign exchanges 12,875 20,291 (7,416)
Short-term corporate bonds 40,000 -- 40,000
Bonds and notes 242,800 212,000 30,800
Due to trust account 1,380,268 1,401,617 (21,349)
Other liabilities 474,024 970,310 (496,286)
Reserve for employees' bonuses 3,013 3,629 (615)
Reserve for employees' retirement benefits -- 8,250 (8,250)
Reserve for financial assistance to specific borrowers -- 531 (531)
Reserve for expenses related to EXPO 2005 Japan 60 19 41
Deferred tax liabilities on land revaluation excess 6,508 -- 6,508
Acceptances and guarantees 245,371 409,773 (164,402)
----------------------------------------------------------------------------------------------------------------------
Total liabilities 18,385,618 19,770,787 (1,385,168)
----------------------------------------------------------------------------------------------------------------------
Shareholder's equity:
Capital stock 324,279 324,279 --
Capital surplus 274,752 274,752 --
Capital reserve 274,752 274,752 --
Retained earnings 202,359 95,871 106,487
Revenue reserve 49,526 47,429 2,097
Voluntary reserves 19,207 139,208 (120,000)
Unappropriated profit 133,624 (90,766) 224,390
Net income 122,781 (95,327) 218,109
Land revaluation excess (9,403) (2,342) (7,061)
Unrealized gains (losses) on securities available for
sale 186,603 (3,431) 190,035
----------------------------------------------------------------------------------------------------------------------
Total shareholder's equity 978,590 689,128 289,461
----------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest
and shareholder's equity 19,364,209 20,459,916 (1,095,706)
----------------------------------------------------------------------------------------------------------------------
46
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
5. Non-Consolidated Statements of Operations
----------------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2004(A) 2003(B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Ordinary income:
Trust fees 70,487 82,927 (12,440)
Interest income: 286,713 347,379 (60,665)
(Interest on loans and discounts) 98,734 126,167 (27,432)
(Interest and dividends on securities) 158,871 165,780 (6,909)
Fees and commissions 56,645 47,689 8,955
Trading profits 648 1,947 (1,299)
Other business income 49,554 60,514 (10,960)
Other ordinary income 28,547 33,384 (4,837)
----------------------------------------------------------------------------------------------------------------------
Total ordinary income 492,595 573,842 (81,246)
----------------------------------------------------------------------------------------------------------------------
Ordinary expenses:
Interest expense: 83,861 153,224 (69,363)
(Interest on deposits) 35,737 57,360 (21,623)
Fees and commissions 12,444 9,534 2,909
Trading losses 244 248 (3)
Other business expenses 38,460 50,999 (12,538)
General and administrative expenses 165,912 166,652 (739)
Other ordinary expenses 53,158 397,702 (344,544)
----------------------------------------------------------------------------------------------------------------------
Total ordinary expenses 354,082 778,362 (424,279)
----------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) 138,513 (204,519) 343,032
----------------------------------------------------------------------------------------------------------------------
Special gains 15,993 15,622 370
Special losses 23,208 9,062 14,146
----------------------------------------------------------------------------------------------------------------------
Income (Loss) before income taxes and others 131,297 (197,958) 329,256
----------------------------------------------------------------------------------------------------------------------
Income taxes-current (32,920) 2,121 (35,042)
Income taxes-refund -- 3,459 (3,459)
Income taxes-deferred 41,436 (101,293) 142,729
----------------------------------------------------------------------------------------------------------------------
Net income (loss) 122,781 (95,327) 218,109
----------------------------------------------------------------------------------------------------------------------
Unappropriated retained earnings brought forward 17,356 10,104 7,252
Reduction in land revaluation excess (619) (5,542) 4,923
Interim dividends 5,776 -- 5,776
Transfer to legal reserve 117 -- 117
Unappropriated retained earnings 133,624 (90,766) 224,390
----------------------------------------------------------------------------------------------------------------------
47
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
6. Notional Principal or Contract Amount, Market Value and Valuation Gains
(Losses) on Derivatives
The publication is omitted in order to be disclosed by EDINET.
[Reference]
1. Derivatives qualified for hedge-accounting [Consolidated]
(in billions of yen)
--------------------------------------------------------------------
As of March 31, 2004
--------------------------------------
Notional principal
or contract amount Market value
--------------------------------------------------------------------
Interest rate futures -- --
Interest rate swaps 6,151.8 0.5
Currency swaps 1,978.0 24.1
Other interest rate-related
transactions -- --
Others -- --
Total 24.7
--------------------------------------------------------------------
Note: Derivatives which are accounted for on an accrual basis based on
"Accounting standard for financial instruments" are not included in the
table above.
Notional principal by the remaining life of the interest rate swaps above is as
follows:
(in billions of yen)
---------------------------------------------------------------------
As of March 31, 2004
-------------------------------------------
Due after
1 year
Due within through Due after
1 year 5 years 5 years Total
---------------------------------------------------------------------
Receive-fix/pay-floater 1,352.2 3,895.6 109.7 5,357.6
Receive floater/pay-fix 171.7 424.7 197.5 794.1
---------------------------------------------------------------------
Total 1,524.0 4,320.4 307.2 6,151.8
---------------------------------------------------------------------
2. Deferred gains (losses) [Consolidated]
(in billions of yen)
------------------------------------------------------------------------------
As of March 31, 2004
---------------------------------------------------
Deferred gains Deferred losses Net gains (losses)
(A) (B) (A) - (B)
------------------------------------------------------------------------------
Interest rate futures -- -- --
Interest rate swaps 85.6 86.3 (0.7)
Currency swaps 1.6 1.3 0.2
Other interest
rate-related transactions -- 0.1 (0.1)
Others -- -- --
------------------------------------------------------------------------------
Total 87.2 87.9 (0.7)
------------------------------------------------------------------------------
Note: Deferred gains (losses) attributable to the macro hedge accounting as of
March 31, 2004 are included in the above table.
48
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
7. Comparison of Statement of Trust Assets and Liabilities
(1) Comparison of Statement of Trust Assets and Liabilities
The Mitsubishi Trust and Banking Corporation
-------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of Yen) 2004 (A) 2003 (B) (A) - (B)
-------------------------------------------------------------------------------------------
Assets:
Loans and bills discounted 735,872 1,107,555 (371,683)
Securities 6,156,235 6,659,887 (503,651)
Beneficiary rights to the trust 9,664,593 8,988,740 675,853
Securities held in custody accounts 4,225,797 3,205,694 1,020,102
Money claims 3,988,567 2,926,071 1,062,496
Premises and equipment 2,327,330 1,532,783 794,546
Surface rights 548 -- 548
Lease rights 23,695 21,819 1,876
Other claims 1,193,978 973,227 220,750
Call loans 520,517 294,567 225,949
Due from banking account 1,380,268 1,401,617 (21,349)
Cash and due from banks 1,557,583 1,484,012 73,570
-------------------------------------------------------------------------------------------
Total assets 31,774,989 28,595,978 3,179,011
-------------------------------------------------------------------------------------------
Liabilities:
Money trusts 7,525,601 7,989,136 (463,534)
Pension trusts 63,411 73,937 (10,526)
Property formation benefit trusts 12,958 12,174 783
Loan trusts 792,932 1,128,339 (335,406)
Investment trusts 9,424,449 8,758,551 665,897
Money entrusted other than money trusts 291,449 231,072 60,376
Securities trusts 7,276,403 5,689,577 1,586,825
Money claim trusts 3,876,931 3,040,282 836,648
Equipment trusts -- 225 (225)
Land and fixtures trusts 127,435 174,931 (47,495)
Other trusts 2,383,417 1,497,749 885,667
-------------------------------------------------------------------------------------------
Total liabilities 31,774,989 28,595,978 3,179,011
-------------------------------------------------------------------------------------------
Note:
Joint trust assets under the management as of March 31, 2004 : 31,853,153
of other companies millions of yen
as of March 31, 2003 : 31,929,580
millions of yen
[Reference]
Of the joint trust assets the management of other companies mentioned above
Note, the balance at the end of the business period of fiscal year includes the
trust assets which were entrusted to The Mitsubishi Trust and Banking
Corporation and Master Trust assets of the Service-Shared Co-Trusteeship (here
in after referred to as Trust Assets under Service-Shared Co-Trusteeship).
The comparison of statement of trust assets and liabilities which is obtained by
adding up Trust Assets under Service-Shared Co-Trusteeship is given on the next
page.
49
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
The Comparison of Statement of Trust Assets and Liabilities which is obtained by
adding up Trust Assets under Service-Shared Co-Trusteeship
-------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of Yen) 2004 (A) 2003 (B) (A) - (B)
-------------------------------------------------------------------------------------------
Assets:
Loans and bills discounted 735,872 1,107,555 (371,683)
Securities 26,511,148 26,349,274 161,874
Beneficiary rights to the trust 10,911,534 9,806,748 1,104,786
Securities held in custody accounts 4,241,080 3,206,357 1,034,723
Money claims 4,034,942 2,932,873 1,102,068
Premises and equipment 2,327,330 1,532,783 794,546
Surface rights 548 -- 548
Lease rights 23,695 21,819 1,876
Other claims 1,768,093 1,344,798 423,295
Call loans 1,406,530 1,069,204 337,325
Due from banking account 1,702,841 1,732,451 (29,610)
Cash and due from banks 2,212,768 1,706,589 506,179
-------------------------------------------------------------------------------------------
Total assets 55,876,387 50,810,455 5,065,931
-------------------------------------------------------------------------------------------
Liabilities:
Money trusts 19,604,145 18,867,760 736,384
Pension trusts 8,274,971 7,423,101 851,870
Property formation benefit trusts 12,958 12,174 783
Loan trusts 792,932 1,128,339 (335,406)
Investment trusts 9,424,449 8,758,551 665,897
Money entrusted other than money trusts 2,010,336 2,223,773 (213,436)
Securities trusts 7,291,686 5,690,240 1,601,445
Money claim trusts 3,876,931 3,040,282 836,648
Equipment trusts -- 225 (225)
Land and fixtures trusts 127,435 174,931 (47,495)
Other trusts 4,460,539 3,491,074 969,465
-------------------------------------------------------------------------------------------
Total liabilities 55,876,387 50,810,455 5,065,931
-------------------------------------------------------------------------------------------
50
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(2) Supplemental Data (As of March 31, 2004)
The component items of trusts with contracts for compensating the principal,
including trusts for which the beneficiary interests are re-entrusted for
investing in trust assets, are presented below.
Money trusts (Jointly operated designated money in trust) (in millions of Yen)
--------------------------------------------------------------------------------
Assets: Liabilities:
Loans and bills discounted 223,355 Principal 948,854
Securities 219,913 Reserve for possible loan
losses 799
Other 506,679 Other 294
--------------------------------------------------------------------------------
Total 949,948 Total 949,948
--------------------------------------------------------------------------------
Loan trusts (in millions of Yen)
--------------------------------------------------------------------------------
Assets: Liabilities:
Loans and bills discounted 398,621 Principal 1,131,498
Securities 139,693 Special reserve funds 6,135
Other 603,701 Other 4,383
--------------------------------------------------------------------------------
Total 1,142,016 Total 1,142,016
--------------------------------------------------------------------------------
(3) Financial Highlights [Non-Consolidated]
-------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of Yen) 2004 (A) 2003 (B) (A) - (B)
-------------------------------------------------------------------------------------------
Total funds 40,877,615 40,028,638 848,977
Deposits 10,844,731 11,143,611 (298,880)
Negotiable certificates of deposit 1,347,875 1,453,650 (105,774)
Money trusts 19,604,145 18,867,760 736,384
Pension trusts 8,274,971 7,423,101 851,870
Property formation benefit trusts 12,958 12,174 783
Loan trusts 792,932 1,128,339 (335,406)
Loans and bills discounted 9,309,061 9,369,278 (60,217)
Banking account 8,573,188 8,261,722 311,465
Trust account 735,872 1,107,555 (371,683)
Investment securities 33,927,539 33,938,480 (10,941)
-------------------------------------------------------------------------------------------
Note:
The balance at the end of the business period of fiscal year, trust accounts
figures adding up trust assets and liabilities which were entrusted to The
Mitsubishi Trust and Banking Corporation and Master Trust assets of the
Service-Shared Co-Trusteeship.
51
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
8. Financial Results (The Mitsubishi Trust and Banking Corporation and
Consolidated Subsidiaries)
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------
For the year For the year
ended ended Increase/
March 31, March 31, (Decrease)
2003 (A) 2004 (B) (B) - (A)
----------------------------------------------------------------------------------------------------------------------
Gross profits 337,688 340,122 2,433
(Gross ordinary profit before trust accounts charge-offs) 345,824 350,167 (4,343)
Trust fees 82,927 70,487 (12,440)
Credit costs for trust accounts (1) (8,136) (10,045) (1,909)
Net interest income 198,638 205,861 7,222
Net fees and commissions 46,870 51,731 4,860
Net trading profits 3,253 2,367 (885)
Net other business income 5,998 9,674 3,676
Net gains on debt securities 5,799 7,723 1,924
General and administrative expenses 169,297 161,728 (7,568)
Net business profits before credit costs for trust accounts
and provision for formula allowance for loan losses* 176,526 188,439 11,912
Provision for formula allowance for loan losses (2) (4,478) (17,256) (12,777)
Net business profits** 172,869 195,649 22,780
Net non-recurring losses (373,433) (48,247) 325,185
Credit related costs (3) (142,459) (37,167) 105,291
Losses on loan charge-offs (45,331) (10,492) 34,839
Provision for specific allowance for loan losses (77,937) (19,952) 57,985
Losses on sales of loans to the Resolution and Collection
Corporation (2,232) 131 2,364
Provision for allowance for loans to specific foreign
borrowers 853 463 (389)
Other credit related costs (17,810) (7,317) 10,492
Net gains (losses) on equity securities (220,253) 4,045 224,298
Gains on sales of equity securities 26,534 23,329 (3,204)
Losses on sales of equity securities (151,982) (15,226) 136,756
Losses on write down of equity securities (94,804) (4,058) 90,746
Equity in loss of affiliates (1,335) (1,158) 176
Other (9,385) (13,966) (4,580)
----------------------------------------------------------------------------------------------------------------------
Ordinary income (loss) (200,564) 147,402 347,966
----------------------------------------------------------------------------------------------------------------------
Net special gains (losses) 2,342 (7,395) (9,737)
Refund of enterprise taxes by the Tokyo Metropolitan Government -- 9,847 9,847
Gain on loans charged-off (4) 7,817 5,023 (2,794)
Losses on impairment of fixed assets -- (1,771) (1,771)
Net losses on sales of premises and equipment (3,281) (5,113) (1,832)
Amortization of net obligation at transition (5,141) (5,141) --
Losses on placing financial assets to the trust for retirement
benefits (1,174) (10,946) 9,771
Income (Loss) before income taxes and others (198,221) 140,006 338,228
Income taxes-current 3,989 (31,401) (35,390)
Income taxes-refund 3,839 -- (3,839)
Income taxes-deferred (100,783) 39,708 140,491
Minority interest (219) 1,452 1,671
----------------------------------------------------------------------------------------------------------------------
Net income (loss) (97,369) 130,247 227,616
----------------------------------------------------------------------------------------------------------------------
Notes:
* Net business profit before credit costs for trust accounts and provision
for formula allowance for loan losses = Consolidated net business profit +
credit costs for trust accounts + provision for formula allowance for loan
losses
** Net business profits = Net business profits of The Mitsubishi Trust and
Banking Corporation + Other consolidated entities' gross profits - Other
consolidated entities' general and administrative expenses - Other
consolidated entities' provision for formula allowance for loan losses -
Inter-company transactions.
(Reference)
----------------------------------------------------------------------------------------------------------------------
Total credit costs (1)+(2)+(3) 146,116 29,957 (116,159)
Total credit costs + Gain on loans charged-off (1)+(2)+(3)+(4) 138,298 24,934 (113,364)
----------------------------------------------------------------------------------------------------------------------
Number of consolidated subsidiaries 30 16 (14)
Number of affiliated companies accounted for by the equity method 13 6 (7)
----------------------------------------------------------------------------------------------------------------------
52
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
Financial Results (The Mitsubishi Trust and Banking Corporation)
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------
For the year For the year
ended ended Increase/
March 31, March 31, (Decrease)
2003 (A) 2004 (B) (B) - (A)
----------------------------------------------------------------------------------------------------------------------
Gross profits 326,489 329,054 2,564
(Gross ordinary profit before trust accounts charge-offs)* 334,625 339,099 (4,473)
Domestic gross profits 220,492 214,178 (6,314)
Trust fees 82,927 70,487 (12,440)
Trust fees before trust accounts charge-offs* 91,063 80,532 (10,530)
Loan trusts and money trusts fees (Jointly operated
designated money trusts before trust accounts
charge-offs)* 48,815 37,450 (11,364)
Other trust fees 42,247 43,081 834
Credit costs for trust accounts** (1) (8,136) (10,045) (1,909)
Losses on loan charge-offs (5,740) (9,406) (3,665)
Other losses incurred from sales of loans (2,395) (639) 1,756
Net interest income 107,295 98,507 (8,788)
Net fees and commissions 38,196 44,691 6,495
Net trading profit (loss) 3,005 (783) (3,789)
Net other business income (10,931) 1,275 12,207
Net losses on debt securities (11,457) (3,521) 7,935
Non-domestic gross profits 105,997 114,876 8,878
Net interest income 86,897 104,361 17,464
Net fees and commissions (41) (490) (449)
Net trading profit (loss) (1,305) 1,186 2,492
Net other business income 20,446 9,817 (10,628)
Net gains on debt securities 17,256 11,245 (6,011)
General and administrative expenses 156,212 151,040 (5,172)
Personnel expenses 71,059 61,992 (9,067)
Non-personnel expenses 80,825 83,939 3,114
Taxes 4,327 5,107 780
Net business profits before credit costs for trust accounts
and provision for formula allowance for loan losses* 178,412 188,059 9,646
Provision for formula allowance for loan losses (2) (3,524) (17,479) (13,954)
Net business profits 173,801 195,493 21,691
Net non-recurring losses (378,320) (56,979) 321,340
Credit related costs (3) (140,276) (37,090) 103,186
Losses on loan charge-offs (44,582) (10,293) 34,289
Provision for specific allowance for loan losses (76,731) (20,074) 56,656
Losses on sales of loans to the Resolution and Collection (2,232) 131 2,364
Provision for allowance for loans to specific foreign
borrowers 853 463 (389)
Other credit related costs (17,583) (7,317) 10,266
Net losses on equity securities (222,054) (335) 221,719
Gains on sales of equity securities 26,477 23,284 (3,192)
Losses on sales of equity securities (151,898) (15,226) 136,672
Losses on write down of equity securities (96,633) (8,393) 88,239
Others (15,989) (19,554) (3,564)
----------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) (204,519) 138,513 343,032
----------------------------------------------------------------------------------------------------------------------
Net special gains (losses) 6,560 (7,215) (13,775)
Refund of enterprise taxes by the Tokyo Metropolitan Government -- 9,847 9,847
Gain on loans charged-off (4) 7,754 4,803 (2,950)
Losses on impairment of fixed assets -- (1,771) (1,771)
Net losses on sales of premises and equipment (1,943) (4,540) (2,596)
Amortization of net obligation at transition (5,141) (5,141) --
Losses on placing financial assets to the trust for retirement
benefits (1,174) (10,946) (9,771)
Income (Loss) before income taxes and others (197,958) 131,297 329,256
Income taxes-current 2,121 (32,920) (35,042)
Income taxes refund 3,459 -- (3,459)
Income taxes-deferred (101,293) 41,436 142,729
----------------------------------------------------------------------------------------------------------------------
Net income (loss) (95,327) 122,781 218,109
----------------------------------------------------------------------------------------------------------------------
Notes:
* Amounts before credit costs for loans in trusts with contracts for
compensating the principal
** Credit costs for loans in trusts with contracts for compensating the
principal
----------------------------------------------------------------------------------------------------------------------
Total credit costs (1)+(2)+(3) 144,888 29,656 (115,231)
----------------------------------------------------------------------------------------------------------------------
Total credit costs + Gain on loans charged-off (1)+(2)+(3)+(4) 137,133 24,852 (112,280)
----------------------------------------------------------------------------------------------------------------------
53
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
9. Average Interest Rate Spread
[Non-Consolidated] (percentage per annum)
----------------------------------------------------------------------------------------------------------------------
For the year ended March 31, Increase/
------------------------------- (Decrease)
2004 (A) 2003 (B) (A) - (B)
----------------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 1.62 1.93 (0.31)
Average interest rate on Loans and bills discounted 1.18 1.42 (0.24)
Average interest rate on Investment securities 2.23 2.34 (0.10)
Total average interest rate on interest-bearing liabilities (b) 0.47 0.86 (0.39)
Average interest rate on Deposits 0.30 0.47 (0.16)
Total average interest rate spread (a)-(b) 1.15 1.07 0.08
----------------------------------------------------------------------------------------------------------------------
Average interest rate spread in domestic business segment: (percentage per annum)
----------------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 0.94 1.03 (0.09)
Average interest rate on Loans and bills discounted 1.09 1.18 (0.09)
Average interest rate on Investment securities 0.93 0.99 (0.05)
Total average interest rate on interest-bearing liabilities (b) 0.17 0.26 (0.08)
Average interest rate on Deposits 0.14 0.19 (0.05)
Total average interest rate spread (a)-(b) 0.76 0.77 (0.00)
----------------------------------------------------------------------------------------------------------------------
10. Valuation Differences on Securities
(1) Valuation method of securities
--------------------------------------------------------------------------------
Trading securities Market value (valuation differences are recorded as
profits or losses)
--------------------------------------------------------------------------------
Debt securities being Amortized cost
held to maturity
--------------------------------------------------------------------------------
Securities available for Market value (valuation differences are included in
sale shareholders' equity, net of income taxes)
--------------------------------------------------------------------------------
(Reference) Securities in money held in trust
--------------------------------------------------------------------------------
Trading purposes Market value (valuation differences are recorded as
profits or losses)
--------------------------------------------------------------------------------
(2) Valuation differences
[Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2004 As of March 31, 2003
---------------------------------------------------------------------------------
Valuation differences Valuation differences
--------- ------------------- ---------------------
(A) (A) - (B) Gains Losses (B) Gains Losses
-----------------------------------------------------------------------------------------------------------------------------
Debt securities being held to maturity 7,030 (6,989) 7,030 0 14,019 14,019 --
Securities available for sale 316,997 319,728 340,339 23,342 (2,731) 207,233 209,964
Domestic equity securities 197,564 341,444 216,065 18,500 (143,879) 20,982 164,862
Domestic bonds 18,402 (38,309) 19,689 1,286 56,711 56,922 210
Other 101,030 16,593 104,585 3,554 84,436 129,328 44,891
Total 324,027 312,739 347,370 23,342 11,288 221,252 209,964
Domestic equity securities 197,564 341,444 216,065 18,500 (143,879) 20,982 164,862
Domestic bonds 24,399 (43,739) 25,686 1,287 68,138 68,349 210
Other 102,063 15,034 105,618 3,554 87,029 131,920 44,891
-----------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2004 As of March 31, 2003
--------------------------------------------- ---------------------------------
Valuation differences Valuation differences
--------- ------------------- ---------------------
(A) (A) - (B) Gains Losses (B) Gains Losses
-----------------------------------------------------------------------------------------------------------------------------
Debt securities being held to maturity 6,889 (6,705) 6,890 0 13,595 13,595 --
Securities available for sale 314,617 318,049 337,959 23,342 (3,431) 206,523 209,955
Domestic equity securities 195,184 339,765 213,685 18,500 (144,581) 20,272 164,853
Domestic bonds 18,402 (38,309) 19,689 1,286 56,711 56,922 210
Other 101,030 16,593 104,585 3,554 84,437 129,328 44,890
Total 321,507 311,343 344,850 23,342 10,163 220,118 209,955
Domestic equity securities 195,184 339,765 213,685 18,500 (144,581) 20,272 164,853
Domestic bonds 24,399 (43,739) 25,686 1,287 68,138 68,349 210
Other 101,923 15,317 105,478 3,554 86,605 131,496 44,890
-----------------------------------------------------------------------------------------------------------------------------
54
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(3) Market Value Information for Securities in Trusts with Contracts for
Compensating the Principal Money Trusts (jointly operated designated money in
trust)
A. Market Value of Securities (in millions of yen)
---------------------------------------------------------------------
Trust Assets
at period end Market Value Valuation Gains
---------------------------------------------------------------------
March 31, 2004 219,913 226,985 7,071
---------------------------------------------------------------------
Note : A fair value is given where a fair value can be calculated for a
market-value equivalent.
B. Valuation Gains of Derivative Transaction : 2,721 millions of yen
Loan Trusts
A. Market Value of Securities (in millions of yen)
---------------------------------------------------------------------
Trust Assets
at period end Market Value Valuation Gains
---------------------------------------------------------------------
March 31, 2004 139,693 152,966 13,272
---------------------------------------------------------------------
Note : A fair value is given where a fair value can be calculated for a
market-value equivalent.
B. Valuation Gains of Derivative Transaction : 12,024 millions of yen
11. Risk-Adjusted Capital Ratio Based on the Standards of the BIS
[Consolidated] (in billions of yen except percentages)
----------------------------------------------------------------------------------------------------
As of
March 31,
2004 (A) Increase/ Increase/ As of As of Sept-
(Preliminary (Decrease) (Decrease) March 31, ember 30,
basis) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
----------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital
ratio 15.03% 3.02% 0.89% 12.00% 14.13%
(2) Tier 1 capital 785.9 99.2 38.7 686.7 747.2
(3) Tier 2 capital
includable as
qualifying capital 751.2 194.7 74.6 556.5 676.6
i) The amount of
unrealized gains on
investment securities,
includable as
qualifying capital 142.6 142.6 81.6 -- 61.0
ii) The amount of land
revaluation excess
includable as
qualifying capital (0.4) 1.0 (0.2) (1.5) (0.1)
iii) Subordinated debt 484.9 53.9 (7.8) 431.0 492.7
(4) Deductions from total
qualifying capital 16.2 10.2 11.1 5.9 5.1
(5) Total qualifying
capital (2)+(3)-(4) 1,520.9 283.6 102.3 1,237.2 1,418.6
(6) Risk-adjusted assets 10,117.1 (190.1) 82.8 10,307.2 10,034.2
----------------------------------------------------------------------------------------------------
[Non-Consolidated] (in billions of yen except percentages)
----------------------------------------------------------------------------------------------------
As of
March 31,
2004 (A) Increase/ Increase/ As of As of Sept-
(Preliminary (Decrease) (Decrease) March 31, ember 30,
basis) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
----------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital
ratio 15.16% 3.93% 0.82% 11.23% 14.34%
(2) Tier 1 capital 776.0 94.1 35.1 681.9 740.8
(3) Tier 2 capital
includable as
qualifying capital 748.8 185.6 80.7 563.2 668.1
i) The amount of
unrealized gains on
investment securities,
includable as
qualifying capital 141.5 141.5 81.1 -- 60.4
ii) The amount of land
revaluation excess
includable as
qualifying capital (1.3) 0.4 0.7 (1.7) (2.0)
iii) Subordinated debt 484.9 53.9 (7.8) 431.0 492.7
(4) Deductions from total
qualifying capital 12.4 9.5 9.5 2.9 2.9
(5) Total qualifying
capital (2)+(3)-(4) 1,512.4 270.2 106.3 1,242.2 1,406.0
(6) Risk-adjusted assets 9,970.3 (1,083.5) 165.3 11,053.9 9,805.0
----------------------------------------------------------------------------------------------------
55
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
2 Loan Portfolio and Other
1. Risk-Monitored Loans
(Non-accrual loans, accruing loans contractually past due 3 months or more and
restructured loans)
[Consolidated]
(in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 23,454 (19,353) (12,971) 42,807 36,425
Past due loans 174,368 (110,496) (72,947) 284,864 247,315
Accruing loans contractually
past due 3 months or more -- (2,314) (429) 2,314 429
Restructured loans 192,734 (74,213) 6,894 266,948 185,840
-------------------------------------------------------------------------------------------------------
Total 390,557 (206,376) (79,452) 596,934 470,010
-------------------------------------------------------------------------------------------------------
Amount of direct reduction 227,729 (68,681) (9,680) 296,410 237,409
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 8,588,926 301,178 89,351 8,287,748 8,499,575
-------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.27% (0.24)% (0.15)% 0.51% 0.42%
Past due loans 2.03% (1.40)% (0.87)% 3.43% 2.90%
Accruing loans contractually
past due 3 months or more -- (0.02)% (0.00)% 0.02% 0.00%
Restructured loans 2.24% (0.97)% 0.05% 3.22% 2.18%
-------------------------------------------------------------------------------------------------------
Total 4.54% (2.65)% (0.98)% 7.20% 5.52%
-------------------------------------------------------------------------------------------------------
[Non-Consolidated]
(in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 23,436 (13,547) (12,969) 36,984 36,406
Past due loans 174,102 (116,759) (73,025) 290,861 247,127
Accruing loans contractually
past due 3 months or more -- (2,314) (429) 2,314 429
Restructured loans 191,162 (76,097) 5,331 267,259 185,831
-------------------------------------------------------------------------------------------------------
Total 388,701 (208,718) (81,092) 597,420 469,794
-------------------------------------------------------------------------------------------------------
Amount of direct reduction 225,042 (69,126) (9,599) 294,169 234,642
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 8,573,188 311,465 95,587 8,261,722 8,477,601
-------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.27% (0.17)% (0.15)% 0.44% 0.42%
Past due loans 2.03% (1.48)% (0.88)% 3.52% 2.91%
Accruing loans contractually
past due 3 months or more -- (0.02)% (0.00)% 0.02% 0.00%
Restructured loans 2.22% (1.00)% 0.03% 3.23% 2.19%
-------------------------------------------------------------------------------------------------------
Total 4.53% (2.69)% (1.00)% 7.23% 5.54%
-------------------------------------------------------------------------------------------------------
56
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
[Trust accounts : Loans in Trusts with Contracts for Compensating the Principal] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 1,588 (2,781) (1,589) 4,369 3,177
Past due loans 1,292 (928) (218) 2,220 1,511
Accruing loans contractually
past due 3 months or more 370 (548) (230) 919 601
Restructured loans 32,568 (1,087) 2,822 33,655 29,745
-------------------------------------------------------------------------------------------------------
Total 35,819 (5,345) 784 41,165 35,035
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 621,976 (261,525) (141,077) 883,501 763,053
-------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.25% (0.23)% (0.16)% 0.49% 0.41%
Past due loans 0.20% (0.04)% 0.00% 0.25% 0.19%
Accruing loans contractually 0.05% (0.04)% (0.01)% 0.10% 0.07%
past due 3 months or more
Restructured loans 5.23% 1.42% 1.33% 3.80% 3.89%
-------------------------------------------------------------------------------------------------------
Total 5.75% 1.09% 1.16% 4.65% 4.59%
-------------------------------------------------------------------------------------------------------
[Banking : Non-Consolidated and Trust Accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 25,025 (16,329) (14,558) 41,354 39,583
Past due loans 175,394 (117,687) (73,244) 293,082 248,639
Accruing loans contractually
past due 3 months or more 370 (2,862) (659) 3,233 1,030
Restructured loans 223,730 (77,184) 8,153 300,915 215,576
-------------------------------------------------------------------------------------------------------
Total 424,521 (214,064) (80,308) 638,585 504,829
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 9,195,165 49,940 (45,490) 9,145,224 9,240,655
-------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.27% (0.18)% (0.15)% 0.45% 0.42%
Past due loans 1.90% (1.29)% (0.78)% 3.20% 2.69%
Accruing loans contractually
past due 3 months or more 0.00% (0.03)% (0.00)% 0.03% 0.01%
Restructured loans 2.43% (0.85)% 0.10% 3.29% 2.33%
-------------------------------------------------------------------------------------------------------
Total 4.61% (2.36)% (0.84)% 6.98% 5.46%
-------------------------------------------------------------------------------------------------------
[Banking : Consolidated and Trust Accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 25,042 (22,134) (14,560) 47,176 39,602
Past due loans 175,660 (111,424) (73,166) 287,085 248,826
Accruing loans contractually
past due 3 months or more 370 (2,862) (659) 3,233 1,030
Restructured loans 225,302 (75,301) 9,717 300,603 215,585
-------------------------------------------------------------------------------------------------------
Total 426,377 (211,722) (78,668) 638,099 505,045
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Loans and bills discounted 9,210,903 39,653 (51,725) 9,171,249 9,262,629
-------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.27% (0.24)% (0.15)% 0.51% 0.42%
Past due loans 1.90% (1.22)% (0.77)% 3.13% 2.68%
Accruing loans contractually
past due 3 months or more 0.00% (0.03)% (0.00)% 0.03% 0.01%
Restructured loans 2.44% (0.83)% 0.11% 3.27% 2.32%
-------------------------------------------------------------------------------------------------------
Total 4.62% (2.32)% (0.82)% 6.95% 5.45%
-------------------------------------------------------------------------------------------------------
57
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
2. Classification of Risk-Monitored Loans
Classification by geographic area
[Banking : Consolidated and Trust Accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Domestic* 354,222 (213,914) (111,901) 568,137 466,123
Overseas* 72,154 2,192 33,232 69,961 38,921
Asia 4,010 (5,945) 753 9,956 3,257
Indonesia 487 (1,429) (23) 1,916 510
Thailand 2,699 (16) 1,502 2,716 1,196
Hong Kong -- (3,474) (631) 3,474 631
Other 824 (1,024) (94) 1,848 919
United States of America 46,459 9,528 24,618 36,931 21,841
Other 21,683 (1,390) 7,861 23,074 13,822
-------------------------------------------------------------------------------------------------------
Total 426,377 (211,722) (78,668) 638,099 505,045
-------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
Classification by type of industry of borrowers
[Banking : Consolidated and Trust Accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Domestic* 354,222 (213,914) (111,901) 568,137 466,123
Manufacturing 90,556 (14,286) 14,947 104,842 75,608
Construction 38,770 (101,386) (82,749) 140,157 121,519
Wholesale and Retail 41,760 (37,013) (12,034) 78,774 53,794
Banks and other financial
institutions 6,580 (1,274) 3,903 7,855 2,677
Real estate 43,395 (42,698) (24,489) 86,094 67,884
Services 66,596 (11,177) (10,674) 77,774 77,271
Other industries 51,371 83 2,241 51,288 49,129
Consumer 15,190 (6,160) (3,046) 21,351 18,237
Overseas* 72,154 2,192 33,232 69,961 38,921
Banks and other financial 3,140 3,140 2,468 -- 672
institutions
Commercial and industrial 44,147 (11,454) 7,842 55,602 36,304
Other 24,867 10,507 22,922 14,359 1,944
-------------------------------------------------------------------------------------------------------
Total 426,377 (211,722) (78,668) 638,099 505,045
-------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
58
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
3. Allowance for Loan Losses
[Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Allowance for loan losses 202,584 (78,443) (66,228) 281,027 268,813
Formula allowance for loan
losses 124,172 (17,270) (15,233) 141,442 139,405
Specific allowance for loan
losses 78,048 (60,709) (50,777) 138,757 128,825
Allowance for loans to specific
foreign borrowers 363 (463) (218) 827 581
-------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Allowance for loan losses 201,986 (77,009) (66,363) 278,996 268,350
Formula allowance for loan
losses 123,974 (17,479) (15,367) 141,453 139,341
Specific allowance for loan
losses 77,649 (59,067) (50,777) 136,716 128,426
Allowance for loans to specific
foreign borrowers 363 (463) (218) 827 581
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Reserve for financial assistance to
specific borrowers -- (531) -- 531 --
-------------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Special internal reserves 6,135 (2,290) (1,148) 8,425 7,283
Allowance for bad debts 799 (202) (126) 1,002 926
-------------------------------------------------------------------------------------------------------
4. Coverage Ratio against Risk-Monitored Loans
[Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Allowance for loan losses (a) 202,584 (78,443) (66,228) 281,027 268,813
Risk-monitored loans (b) 390,557 (206,376) (79,452) 596,934 470,010
Coverage ratio (a)/(b) 51.87% 4.79% (5.32)% 47.07% 57.19%
-------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Allowance for loan losses (a) 201,986 (77,009) (66,363) 278,996 268,350
Risk-monitored loans (b) 388,701 (208,718) (81,092) 597,420 469,794
Coverage ratio (a)/(b) 51.96% 5.26% (5.15)% 46.70% 57.12%
-------------------------------------------------------------------------------------------------------
59
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
5. Disclosed Claims under the Financial Reconstruction Law (the "FRL")
[Banking : Non-Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 46,423 (36,724) (7,181) 83,148 53,604
Claims under high risk 149,286 (103,747) (84,755) 253,034 234,042
Claims under close observation 194,779 (78,554) 4,974 273,334 189,804
-------------------------------------------------------------------------------------------------------
Total (1) 390,490 (219,027) (86,961) 609,517 477,451
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Normal claims 8,448,804 355,567 54,790 8,093,237 8,394,014
-------------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 3,038 (3,610) (1,733) 6,649 4,772
Claims under high risk 9,486 3,147 3,890 6,338 5,596
Claims under close observation 23,294 (4,881) (1,372) 28,176 24,666
-------------------------------------------------------------------------------------------------------
Total (1) 35,819 (5,345) 784 41,165 35,035
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Normal claims 586,156 (256,179) (141,861) 842,336 728,018
-------------------------------------------------------------------------------------------------------
[Banking : Non-Consolidated and Trust accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
-------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 49,462 (40,335) (8,914) 89,798 58,377
Claims under high risk 158,773 (100,600) (80,865) 259,373 239,638
Claims under close observation 218,074 (83,436) 3,602 301,511 214,471
-------------------------------------------------------------------------------------------------------
Total (1) 426,309 (224,373) (86,177) 650,682 512,487
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Normal claims 9,034,961 99,387 (87,071) 8,935,574 9,122,032
-------------------------------------------------------------------------------------------------------
60
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
6. Status of Secured Coverage on Disclosed Claims under the FRL
[Banking : Non-Consolidated] (in millions of yen)
----------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
----------------------------------------------------------------------------------------------------
Secured coverage amount (2) 295,735 (182,996) (86,740) 478,732 382,476
Allowance for loan losses 109,978 (62,893) (46,123) 172,871 156,101
Reserve for financial support to
specific borrowers -- (531) -- 531 --
Collateral, guarantees, etc. 185,757 (119,571) (40,617) 305,328 226,374
----------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 75.73% (2.80)% (4.37)% 78.54% 80.10%
----------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
----------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
----------------------------------------------------------------------------------------------------
Secured coverage amount (2) 22,249 (4,611) 762 26,861 21,487
Allowance for loan losses -- -- -- -- --
Reserve for financial support to
specific borrowers -- -- -- -- --
Collateral, guarantees, etc. 22,249 (4,611) 762 26,861 21,487
----------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 62.11% (3.13)% 0.78% 65.25% 61.32%
----------------------------------------------------------------------------------------------------
[Banking : Non-Consolidated and Trust accounts] (in millions of yen)
----------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
----------------------------------------------------------------------------------------------------
Secured coverage amount (2) 317,985 (187,608) (85,978) 505,593 403,963
Allowance for loan losses 109,978 (62,893) (46,123) 172,871 156,101
Reserve for financial support to
specific borrowers -- (531) -- 531 --
Collateral, guarantees, etc. 208,006 (124,183) (39,854) 332,190 247,861
----------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 74.59% (3.11)% (4.23)% 77.70% 78.82%
----------------------------------------------------------------------------------------------------
61
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
Secured Coverage of each category of Disclosed Claims under the FRL
[Banking : Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
financial amount by Coverage
Allowance support to collateralized ratio Coverage ratio
Disclosed for loan specific and guaranteed [(B)+(C)] / [(B)+(C)+(D)] /
Category amount (A) losses (B) borrowers (C) loans (D) [(A)-(D)] (A)
-----------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and 46,423 10,487 -- 35,935 100.00% 100.00%
substantially bankrupt debtors [83,148] [8,501] -- [74,647] [100.00%] [100.00%]
Claims under high risk 149,286 60,649 -- 66,967 73.67% 85.48%
[253,034] [118,780] -- [97,433] [76.33%] [85.44%]
Claims under close observation 194,779 38,841 -- 82,853 34.70% 62.47%
[273,334] [45,590] [531] [133,248] [32.92%] [65.62%]
Sub total (1) 390,490 109,978 -- 185,757 53.71% 75.73%
[609,517] [172,871] [531] [305,328] [57.00%] [78.54%]
Normal claims 8,448,804
[8,093,237]
Total (2) 8,839,295
[8,702,755]
-----------------------------------------------------------------------------------------------------------------------
Sub total (1) / Total (2) 4.41%
[7.00%]
-----------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2004. The lower figures with bracket
are as of March 31, 2003.
Coverage ratios for Claims under high risk and for Claims under close
observation are listed under allowance for possible loan losses, following
concurrent application of the discount cash flow method.
[Trust accounts] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
financial amount by Coverage
Allowance support to collateralized ratio Coverage ratio
Disclosed for loan specific and guaranteed [(B)+(C)] / [(B)+(C)+(D)] /
Category amount (A) losses (B) borrowers (C) loans (D) [(A)-(D)] (A)
-----------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 3,038 -- -- 3,035 99.89%
[6,649] -- -- [6,649] [100.00%]
Claims under high risk 9,486 -- -- 8,562 90.26%
[6,338] -- -- [5,745] [90.64%]
Claims under close observation 23,294 -- -- 10,651 45.72%
[28,176] -- -- [14,466] [51.34%]
Sub total (1) 35,819 -- -- 22,249 62.11%
[41,165] -- -- [26,861] [65.25%]
Normal claims 586,156
[842,336]
Total (2) 621,976
[883,501]
-----------------------------------------------------------------------------------------------------------------------
Sub total (1) / Total (2) 5.75%
[4.65%]
-----------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2004. The lower figures with bracket
are as of March 31, 2003.
Allowance for possible loan losses are not booked for the trust account,
but the Bank executes the direct write-off of trust account "Claims to
bankrupt and substantial bankruptcy " and "Claims under high risk" in
accordance with standards applied to allowance for possible loan losses in
the banking account.
The Bank allocated a total of 6.9 billion yen to the special internal
reserve and allowance for bad debt in the trust account, as of March 31,
2004.
[Banking : Non-Consolidated and Trust accounts] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
financial amount by Coverage
Allowance support to collateralized ratio Coverage ratio
Disclosed for loan specific and guaranteed [(B)+(C)] / [(B)+(C)+(D)] /
Category amount (A) losses (B) borrowers (C) loans (D) [(A)-(D)] (A)
-----------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 49,462 10,487 -- 38,971 99.99%
[89,798] [8,501] -- [81,297] [100.00%]
Claims under high risk 158,773 60,649 -- 75,529 85.76%
[259,373] [118,780] -- [103,179] [85.57%]
Claims under close observation 218,074 38,841 -- 93,505 60.68%
[301,511] [45,590] [531] [147,714] [64.28%]
Sub total (1) 426,309 109,978 -- 208,006 74.59%
[650,682] [172,871] [531] [332,190] [77.70%]
Normal claims 9,034,961
[8,935,574]
Total (2) 9,461,271
[9,586,256]
-----------------------------------------------------------------------------------------------------------------------
Sub total (1) / Total (2) 4.50%
[6.78%]
-----------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2004. The lower figures with bracket
are as of March 31, 2003.
62
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
7. Progress in the Disposal of Problem Assets [Banking and Trust accounts]
(excluding claims under close observation)
(1) Assets categorized as problem assets as of September 30, 2000 based on the FRL (in billions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of As of
September March 31, September March 31, September March 31, September March 31,
30, 2000 2001 30, 2001 2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
----------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt
debtors 239.2 136.2 123.5 68.9 42.7 30.0 15.8 8.0 (7.8)
Claims under high risk 526.7 455.5 382.9 301.7 184.8 23.8 22.9 1.3 (21.6)
----------------------------------------------------------------------------------------------------------------------------
Total 766.0 591.8 506.4 370.7 227.6 53.8 38.8 9.3 (29.4)
----------------------------------------------------------------------------------------------------------------------------
(A) (B)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation 0.0
Re-constructive disposition --
Improvements in financial status due
to re-constructive disposition 0.2
Loan sales to secondary market 2.4
Charge-off 13.5
Other 13.1
Collection of claims 13.1
Improvements in financial status --
------------------------------------------------------------------
Total 29.4 (B)
------------------------------------------------------------------
Above (A) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 4.4
Quasi-legal liquidation --
Split-off of problem loans 0.5
Partial charge-off of smaller balance
loans 3.0
Entrust through the managed trust
method to the Resolution and
Collection Corporation 1.3
------------------------------------------------------------------
Total 9.3
------------------------------------------------------------------
(2) Assets newly categorized as problem assets during second half of fiscal 2000 based on the FRL (in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of As of
March 31, September March 31, September March 31, September March 31,
2001 30, 2001 2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
-----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 11.0 5.5 4.8 2.8 9.9 9.2 2.8 (6.4)
Claims under high risk 133.7 117.5 91.4 76.7 6.8 6.5 0.1 (6.3)
-----------------------------------------------------------------------------------------------------------------------------------
Total 144.8 123.0 96.3 79.6 16.7 15.8 3.0 (12.7)
-----------------------------------------------------------------------------------------------------------------------------------
(C) (D)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation --
Re-constructive disposition --
Improvements in financial status due
to re-constructive disposition --
Loan sales to secondary market 0.6
Charge-off 7.0
Other 5.1
Collection of claims 5.1
Improvements in financial status --
------------------------------------------------------------------
Total 12.7 (D)
------------------------------------------------------------------
Above (C) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 1.9
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 1.0
Entrust through the managed trust
method to the Resolution and
Collection Corporation --
------------------------------------------------------------------
Total 3.0
------------------------------------------------------------------
63
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(3) Assets newly categorized as problem assets during first half of fiscal 2001
based on the FRL
(in billions of yen)
------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of
September March 31, September March 31, September March 31,
30, 2001 2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt
debtors 3.0 16.4 1.5 1.4 0.8 0.5 (0.2)
Claims under high risk 80.0 30.2 21.6 6.4 3.7 1.6 (2.1)
------------------------------------------------------------------------------------------------------
Total 83.1 46.7 23.2 7.8 4.6 2.2 (2.4)
------------------------------------------------------------------------------------------------------
(E) (F)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation --
Re-constructive disposition --
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 0.4
Charge-off 0.2
Other 1.7
Collection of claims 1.6
Improvements in financial status 0.0
------------------------------------------------------------------
Total 2.4 (F)
------------------------------------------------------------------
Above (E) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 0.1
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance loans 0.8
Entrust through the managed trust method
to the Resolution and Collection Corporation --
------------------------------------------------------------------
Total 1.0
------------------------------------------------------------------
(4) Assets newly categorized as problem assets during second half of fiscal
2001 based on the FRL
(in billions of yen)
-------------------------------------------------------------------------------------------
As of As of As of As of As of
March 31, September March 31, September March 31,
2002 30, 2002 2003 30, 2003 (a) 2004 (b) (b) - (a)
-------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt
debtors 6.3 8.9 7.5 4.8 2.0 (2.7)
Claims under high risk 68.0 28.4 9.5 6.6 3.7 (2.9)
-------------------------------------------------------------------------------------------
Total 74.4 37.3 17.1 11.5 5.8 (5.6)
-------------------------------------------------------------------------------------------
(G) (H)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Disposition by borrowers' liquidation --
Re-constructive disposition 0.4
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 0.7
Charge-off (0.4)
Other 4.8
Collection of claims 3.6
Improvements in financial status 1.2
------------------------------------------------------------------
Total 5.6 (H)
------------------------------------------------------------------
Above (G) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
------------------------------------------------------------------
Second half of
fiscal 2003
------------------------------------------------------------------
Legal liquidation 0.4
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance loans 1.4
Entrust through the managed trust method
to the Resolution and Collection Corporation --
------------------------------------------------------------------
Total 1.9
------------------------------------------------------------------
64
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(5) Assets newly categorized as problem assets during first half of fiscal 2002
based on the FRL
(in billions of yen)
---------------------------------------------------------------------------------------------------
As of As of As of As of
September 30, March 31, September 30, March 31,
2002 2003 2003 (a) 2004 (b) (b) - (a)
---------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 4.3 15.4 13.3 11.2 (2.1)
Claims under high risk 89.5 35.9 15.8 11.3 (4.5)
---------------------------------------------------------------------------------------------------
Total 93.9 51.3 29.2 22.5 (6.6)
---------------------------------------------------------------------------------------------------
(I) (J)
Progress in the disposal of problem assets (in billions of yen)
-------------------------------------------------------------------
Second half of fiscal 2003
-------------------------------------------------------------------
Disposition by borrowers' liquidation --
Re-constructive disposition --
Improvements in financial status due to
re-constructive disposition --
Loan sales to secondary market 2.6
Charge-off 1.0
Other 2.9
Collection of claims 2.9
Improvements in financial status 0.0
-------------------------------------------------------------------
Total 6.6 (J)
-------------------------------------------------------------------
Above (I) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
-------------------------------------------------------------------
Second half of fiscal 2003
-------------------------------------------------------------------
Legal liquidation 11.1
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller
balance loans 0.3
Entrust through the managed trust
method to the Resolution and
Collection Corporation --
-------------------------------------------------------------------
Total 11.5
-------------------------------------------------------------------
(6) Assets newly categorized as problem assets during second half of fiscal 2002
based on the FRL
(in billions of yen)
-------------------------------------------------------------------------------
As of As of As of
March 31, September 30, March 31,
2003 2003 (a) 2004 (b) (b) - (a)
-------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 25.3 14.0 19.1 5.1
Claims under high risk 176.6 151.3 61.6 (89.7)
-------------------------------------------------------------------------------
Total 202.0 165.3 80.7 (84.6)
-------------------------------------------------------------------------------
(K) (L)
Progress in the disposal of problem assets (in billions of yen)
----------------------------------------------------------------
Second half of fiscal 2003
----------------------------------------------------------------
Disposition by borrowers' liquidation --
Re-constructive disposition 2.3
Improvements in financial status due
to re-constructive disposition 1.2
Loan sales to secondary market 3.7
Charge-off 44.3
Other 32.9
Collection of claims 18.6
Improvements in financial status 14.3
----------------------------------------------------------------
Total 84.6 (L)
----------------------------------------------------------------
Above (K) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
-------------------------------------------------------------------
Second half of fiscal 2003
-------------------------------------------------------------------
Legal liquidation 3.9
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller balance
loans 1.9
Entrust through the managed trust
method to the Resolution and Collection
Corporation --
-------------------------------------------------------------------
Total 5.8
-------------------------------------------------------------------
65
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(7) Assets newly categorized as problem assets during first half of fiscal 2003
based on the FRL
(in billions of yen)
-------------------------------------------------------------------------
As of As of
September 30, March 31,
2003 (a) 2004 (b) (b) - (a)
-------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 0.1 0.2 0.1
Claims under high risk 32.4 20.8 (11.6)
-------------------------------------------------------------------------
Total 32.6 21.1 (11.4)
-------------------------------------------------------------------------
(M) (N)
Progress in the disposal of problem assets (in billions of yen)
----------------------------------------------------------------
Second half of fiscal 2003
----------------------------------------------------------------
Disposition by borrowers' liquidation --
Re-constructive disposition 0.1
Improvements in financial status due
to re-constructive disposition --
Loan sales to secondary market 5.6
Charge-off 1.1
Other 4.5
Collection of claims 3.8
Improvements in financial status 0.7
----------------------------------------------------------------
Total 11.4 (N)
----------------------------------------------------------------
Above (M) includes the following figures which facilitates the final disposal of
problem assets.
(in billions of yen)
-------------------------------------------------------------------
Second half of fiscal 2003
-------------------------------------------------------------------
Legal liquidation 0.0
Quasi-legal liquidation --
Split-off of problem loans --
Partial charge-off of smaller
balance loans 0.0
Entrust through the managed trust
method to the Resolution and
Collection Corporation --
-------------------------------------------------------------------
Total 0.1
-------------------------------------------------------------------
(8) Assets newly categorized as problem assets during second half of fiscal 2003
based on the FRL
(in billions of yen)
-----------------------------------------------
As of
March 31,
2004
-----------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 5.1
Claims under high risk 58.1
-----------------------------------------------
Total 63.3
-----------------------------------------------
(9) Historical trend of problem assets based on the FRL
--------------------------------------------------------------------------------------------------------
As of As of As of As of As of
September 30, March 31, September 30, March 31, September 30,
2000 2001 2001 2002 2002
--------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 239.2 147.3 132.0 96.7 60.5
Claims under high risk 526.7 589.2 580.5 491.5 401.3
--------------------------------------------------------------------------------------------------------
Total 766.0 736.6 712.6 588.2 461.8
--------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
As of As of As of
March 31, September 30, March 31,
2003 2003 (a) 2004 (b) (b) - (a)
-------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 89.7 58.3 49.4 (8.9)
Claims under high risk 259.3 239.6 158.7 (80.8)
-------------------------------------------------------------------------------------
Total 349.1 298.0 208.2 (89.7)
-------------------------------------------------------------------------------------
66
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
8. Classification of Loans by Type of Industry
(1) Loans by type of industry [Banking:Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic offices (excluding
loans booked at offshore
markets) 8,284,221 525,018 148,525 7,759,202 8,135,696
Manufacturing 1,182,342 14,192 (10,580) 1,168,150 1,192,922
Agriculture 1,765 218 (26) 1,547 1,791
Forestry -- (100) -- 100 --
Fishery 26,058 3,419 562 22,639 25,496
Mining 4,188 (1,856) (1,192) 6,044 5,380
Construction 171,685 (100,162) (92,167) 271,847 263,852
Utilities 134,668 (17,082) 7,590 151,750 127,078
Media and Communication 853,948 7,421 8,451 846,527 845,497
Wholesale and Retail 623,880 (65,290) (40,755) 689,170 664,635
Banks and other financial
institutions 2,328,182 367,603 216,339 1,960,579 2,111,843
Real estate 1,062,405 29,503 36,466 1,032,902 1,025,939
Services 699,449 23,075 27,608 676,374 671,841
Municipal government 577,689 233,885 2,461 343,804 575,228
Other industries 617,950 30,189 (6,236) 587,761 624,186
------------------------------------------------------------------------------------------------------
Overseas offices and loans
booked at offshore markets 288,967 (213,552) (52,937) 502,520 341,905
------------------------------------------------------------------------------------------------------
Total 8,573,188 311,465 95,587 8,261,722 8,477,601
------------------------------------------------------------------------------------------------------
(2) Domestic consumer loans [Banking:Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Total domestic consumer
loans 318,370 40,978 23,878 277,392 294,492
Housing loans 292,020 44,504 25,485 247,515 266,534
Others 26,349 (3,526) (1,607) 29,876 27,957
------------------------------------------------------------------------------------------------------
(3) Domestic loans to small and medium-sized companies [Banking:Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic loans to small and
medium-sized companies 2,771,382 51,920 32,047 2,719,462 2,739,335
Percentage to total domestic
loans 33.45% (1.59)% (0.21)% 35.04% 33.67%
------------------------------------------------------------------------------------------------------
67
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(4) Loans by type of industry [Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic offices (excluding
loans booked at offshore
markets) 735,872 (371,683) (159,721) 1,107,555 895,594
Manufacturing 40,185 (36,610) (9,240) 76,795 49,425
Agriculture -- -- -- -- --
Forestry 22 (8) (4) 30 26
Fishery 1,128 (444) (97) 1,572 1,225
Mining 61 (68) (16) 129 77
Construction 2,244 (5,628) (3,229) 7,872 5,473
Utilities 93,465 (41,739) (24,006) 135,204 117,471
Media and Communication 75,987 (48,573) (31,082) 124,560 107,069
Wholesale and Retail 8,358 (8,832) (2,314) 17,190 10,672
Banks and other financial
institutions 62,226 (135,496) (38,001) 197,722 100,227
Real estate 65,070 (12,730) (6,205) 77,800 71,275
Services 26,342 (26,425) (20,313) 52,767 46,655
Municipal government 35,750 (2,023) (1,073) 37,773 36,823
Other industries 325,026 (53,108) (24,142) 378,134 349,168
------------------------------------------------------------------------------------------------------
Overseas offices and loans
booked at offshore markets -- -- -- -- --
------------------------------------------------------------------------------------------------------
Total 735,872 (371,683) (159,721) 1,107,555 895,594
------------------------------------------------------------------------------------------------------
(5) Domestic consumer loans [Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Total domestic consumer
loans 228,089 (40,316) (18,904) 268,405 246,994
Housing loans 225,558 (39,491) (18,491) 265,050 244,050
Others 2,530 (824) (413) 3,354 2,943
------------------------------------------------------------------------------------------------------
(6) Domestic loans to small and medium-sized companies [Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic loans to small and
medium-sized companies 472,447 (193,954) (68,912) 666,401 541,359
Percentage to total domestic
loans 64.20% 4.03% 3.75% 60.16% 60.44%
------------------------------------------------------------------------------------------------------
68
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(7) Loans by type of industry [Banking:Non-Consolidated and Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic offices (excluding
loans booked at offshore
markets) 9,020,093 153,335 (11,196) 8,866,758 9,031,290
Manufacturing 1,222,528 (22,418) (19,819) 1,244,946 1,242,347
Agriculture 1,765 218 (26) 1,547 1,791
Forestry 22 (108) (4) 130 26
Fishery 27,187 2,976 465 24,211 26,722
Mining 4,249 (1,924) (1,208) 6,173 5,457
Construction 173,929 (105,791) (95,396) 279,720 269,325
Utilities 228,134 (58,821) (16,416) 286,955 244,550
Media and Communication 929,936 (41,152) (22,631) 971,088 952,567
Wholesale and Retail 632,240 (74,121) (43,069) 706,361 675,309
Banks and other financial
institutions 2,390,409 232,107 178,338 2,158,302 2,212,071
Real estate 1,127,475 16,772 30,261 1,110,703 1,097,214
Services 725,792 (3,349) 7,295 729,141 718,497
Municipal government 613,440 231,863 1,389 381,577 612,051
Other industries 942,976 (22,919) (30,378) 965,895 973,354
------------------------------------------------------------------------------------------------------
Overseas offices and loans
booked at offshore markets 288,967 (213,552) (52,937) 502,520 341,905
------------------------------------------------------------------------------------------------------
Total 9,309,061 (60,217) (64,134) 9,369,278 9,373,196
------------------------------------------------------------------------------------------------------
(8) Domestic consumer loans [Banking:Non-Consolidated and Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Total domestic consumer
loans 546,459 661 4,973 545,797 541,486
Housing loans 517,579 5,012 6,994 512,566 510,584
Others 28,880 (4,351) (2,020) 33,231 30,901
------------------------------------------------------------------------------------------------------
(9) Domestic loans to small and medium-sized companies
[Banking:Non-Consolidated and Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic loans to small and
medium-sized companies 3,243,829 (142,034) (36,866) 3,385,863 3,280,695
Percentage to total domestic
loans 35.96% (2.22)% (0.36)% 38.18% 36.32%
------------------------------------------------------------------------------------------------------
69
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
9. Loans and Deposits [Non-Consolidated]
(in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Deposits (ending balance) 10,844,731 (298,880) 333,297 11,143,611 10,511,433
Deposits (average balance) 10,967,357 (205,284) (125,112) 11,172,642 11,092,470
Loans (ending balance) 8,573,188 311,465 95,587 8,261,722 8,477,601
Loans (average balance) 8,352,199 (506,929) 143,638 8,859,128 8,208,560
------------------------------------------------------------------------------------------------------
10. Domestic Deposits [Non-Consolidated]
(in millions of yen)
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Individuals 6,734,416 53,157 221 6,681,259 6,734,195
Corporations and others 2,842,303 (217,157) (149,072) 3,059,461 2,991,376
Domestic deposits 9,576,720 (164,000) (148,851) 9,740,721 9,725,571
------------------------------------------------------------------------------------------------------
Note: Amounts do not include negotiable certificates of deposit, deposits of
overseas offices and JOM accounts.
11. Number of Employees [Non-Consolidated]
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Number of Employees 5,855 (333) (237) 6,188 6,092
------------------------------------------------------------------------------------------------------
12. Number of Offices [Non-Consolidated]
------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2004 (A) (A) - (B) (A) - (C) 2003 (B) 2003 (C)
------------------------------------------------------------------------------------------------------
Domestic 48 (5) (2) 53 50
Head office and Branches 47 (2) (1) 49 48
Sub-branches and Agencies 1 (3) (1) 4 2
Overseas 8 -- -- 8 8
Branches 5 -- -- 5 5
Representative offices 3 -- -- 3 3
------------------------------------------------------------------------------------------------------
Total 56 (5) (2) 61 58
------------------------------------------------------------------------------------------------------
70
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
13. Status of Deferred Tax Assets [Non-Consolidated]
(1) Tax Effects of the Items Comprising Net Deferred Tax Assets
[Non-Consolidated] (in billions of yen)
------------------------------------------------------------------
Mar. 31, 2004
------------
vs. Mar. 31,
2003
------------------------------------------------------------------
Deferred tax assets 315.8 (42.1)
Allowance for loan losses 121.6 (19.2)
Write down of investment
securities 16.2 (3.6)
Net operating loss carryforwards 177.7 (62.7)
Reserve for employees' retirement
benefits 5.6 2.0
Unrealized losses on securities
available for sale -- (1.3)
Other 17.6 3.8
Valuation allowance (23.0) 39.0
Deferred tax liabilities 130.6 126.9
Gains on placing trust for
retirement benefits -- (1.3)
Unrealized gains on securities
available for sale 128.0 128.0
Other 2.5 0.3
------------------------------------------------------------------
Net deferred tax assets 185.2 (169.0)
------------------------------------------------------------------
[Consolidated]
------------------------------------------------------------------
Net deferred tax assets 186.5 (167.3)
------------------------------------------------------------------
(2) Net Business Profits before Credit Costs and Taxable Income (Current Fiscal
Year)
[Non-Consolidated] (in billions of yen)
-----------------------------------------
FY 2003
-----------------------------------------
Net business profits before
credit costs 188.0
Credit related costs 29.6
Income before income taxes 131.2
Reconciliation to taxable income (42.6)
Taxable income 88.6
-----------------------------------------
(3) Net Business Profits before Credit Costs and Taxable Income (Past Five
Fiscal Year)
[Non-Consolidated] (in billions of yen)
------------------------------------------------------------------------
1998 1999 2000 2001 2002
------------------------------------------------------------------------
Net business profits before
credit costs 283.2 177.7 163.0 156.2 178.4
Credit related costs 503.5 147.9 176.4 181.5 144.8
Income before income taxes (194.6) 129.5 26.3 (41.9) (197.9)
Reconciliation to taxable income 242.3 (158.4) (88.6) 4.6 (199.7)
Taxable income 47.7 (28.9) (62.3) (37.2) (397.6)
------------------------------------------------------------------------
(4) Classification Based on Prior Year Operating Results as Provided in the
JICPA Audit Committee Report No.66
Although we recorded taxable income for the year ended March 31, 2004, we
are classified as "4" described above since we have material net operating loss
carryforwards. However since we believe the net operating loss carryforwards are
attributable to extraordinary factors such as changes in laws and regulations,
we apply the exception to classification 4. (Five years' future taxable income
is estimable.)
[Extraordinary Factors Such as Changes in Laws and Regulations]
Our net operating loss carryforwards were incurred due to, among other
things, the followings : (i) we accelerated the final disposal of nonperforming
loans in response to both the "Emerging Economic Package," which provided
guidance to major banks to remove from their balance sheets claims to debtors
classified as "likely to become bankrupt" or below, and the "Program for
Financial Revival," which urged major banks to reduce the ratio of disclosed
claims to total claims by about half; and (ii) we reduced our holdings of
strategic equity investments under the "Law Concerning Restriction, etc. of
Banks'Shareholdings etc."
(5) Realizability of Deferred Tax Assets at March 31, 2004 (Assumptions)
(in billions of yen)
----------------------------------------------------------------------
Five year total
(2004 to 2008)
----------------------------------------------------------------------
Net business profits (based on our business plan)(*1) 1,030.0
Net business profits (basis of realizability
determination)(*2) 920.0
Income before income taxes (basis of realizability
determination) 740.0
Taxable income before adjustments (basis of
realizability determination)(*3) 880.0
Temporary difference + net operating loss
carryforwards (for which deferred tax assets shall
be recognized) 757.9
Deferred tax assets at March 31, 2004 (*4) 315.8
----------------------------------------------------------------------
(*1) Total of the two banks, before credit costs
(*2) Based on the scenario that current short-term interest rate level continues
for the next five years
(*3) Before reversals of existing deductible temporary differences and net
operating loss carryforwards
(*4) Temporary difference + net operating loss carryforwards (for which deferred
tax assets shall be recognized) multiplied by effective tax rate
(consolidated corporate-tax basis)
(Reference) Assumptions for Business Plan
----------------------------------------------------------------------------
FY 2004 FY 2005 FY 2006 FY 2007 FY2008
----------------------------------------------------------------------------
S/T interest rate (3 m/s TIBOR) 0.09% 0.13% 0.50% 0.57% 0.88%
L/T interest rate (10 year JGB) 1.48% 1.90% 2.30% 2.03% 2.58%
Exchange rate (USD/Yen) (Y) 105 (Y) 105 (Y) 105 (Y) 105 (Y) 105
----------------------------------------------------------------------------
71
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
14. Employees' Retirement Benefits
(1) Benefit obligation
[Non-Consolidated] (in millions of yen)
------------------------------------------------------------------
As of
March 31,
2004
------------------------------------------------------------------
Projected benefits obligation (A) 273,953
Fair value of plan assets (B) 326,777
Prepaid pension cost (C) 103,227
Reserve for employees' retirement benefits (D) --
Unrecognized plan assets (E) 57,595
------------------------------------------------------------------
Total amount unrecognized (A-B+C-D+E) 107,999
Unrecognized net obligation by the
change of accounting policy 5,141
Unrecognized prior service cost (3,545)
Unrecognized net actuarial loss 106,403
------------------------------------------------------------------
Note: Discount rate is 2.2%.
(2) Net periodic pension cost
[Non-Consolidated] (in millions of yen)
------------------------------------------------------------------
For the year ended
March 31, 2004
------------------------------------------------------------------
Net periodic cost of the employees' retirement
benefits 27,438
Service cost 7,524
Interest cost 5,385
Expected return on plan assets (5,274)
Amortization of net obligation by the
change of accounting policy 5,141
Amortization of prior service cost (350)
Amortization of net actuarial loss 11,502
Other 3,510
------------------------------------------------------------------
72
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
15. Earning Projections for the Fiscal Year Ending March 31, 2005
[Consolidated] (in billions of yen)
----------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2005 March 31, 2004
----------------------------------------------------------------------------
Ordinary income 470.0 521.4
Ordinary income 125.0 147.4
Net income 65.0 130.2
----------------------------------------------------------------------------
[Non-Consolidated] (in billions of yen)
----------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2005 March 31, 2004
----------------------------------------------------------------------------
Ordinary income 450.0 492.5
Net business profits before credit
costs for trust accounts and
provision for formula allowance
for loan losses 160.0 188.0
Ordinary income 120.0 138.5
Net income 65.0 122.7
----------------------------------------------------------------------------
73
[LOGO OF MTFG]
--------------------------------------------
Financial Highlights of FY 2003 Results
&
First Medium-Term Strategic Plan
--------------------------------------------
I. Financial Highlights of
Fiscal Year 2003 Results (Japanese GAAP)
II. Overview of
First Medium-Term Strategic Plan
May 24, 2004
Mitsubishi Tokyo Financial Group, Inc.
Mitsubishi Tokyo Financial Group, Inc.
I. Financial Highlights under Japanese GAAP for the Fiscal Year Ended
March 31, 2004
1. Highlights of Consolidated Statements of Operations
------------------------------------------------------
(in billions of yen)
------------------------------------------------------------------------------------------------------------
For the year For the year
ended March ended March
31, 2003 (A) 31, 2004 (B) (B) - (A)
------------------------------------------------------------------------------------------------------------
1 Gross profits 1,747.3 1,763.5 16.1
2 Mitsubishi Securities Co., Ltd. 51.0 117.2 66.2
3 Net interest income 1,058.8 1,029.1 (29.6)
4 Trust fees 101.4 86.4 (14.9)
5 Credit costs for trust accounts (8.1) (10.0) (1.9)
6 Net fees and commissions 354.7 421.6 66.9
7 Net trading profits 79.9 135.6 55.7
8 Net other business income 152.4 90.5 (61.8)
9 Net gains (loss) on debt securities 68.2 (25.0) (93.2)
10 General and administrative expenses 991.2 980.4 (10.7)
11 Mitsubishi Securities Co., Ltd. 76.2 88.6 12.3
12 Net business profits before credit costs for trust accounts and
provision for formula allowance for loan losses 764.2 793.1 28.8
13 Provision for formula allowance for loan losses (38.2) [194.5] [232.8]
14 Net business profits 717.8 783.0 65.2
15 Net non-recurring gains (losses) (1,078.1) (204.7) 873.3
16 Credit related costs (492.3) (156.9) 335.4
17 Losses on loan charge-offs (211.0) (70.4) 140.5
18 Provision for specific allowance for loan losses (117.7) [38.2] [156.0]
19 Provision for allowance for loans to specific foreign
borrowers 14.2 [7.1] [(7.1)]
20 Losses on sales of loans to the Resolution and
Collection Corporation (75.2) (39.4) 35.8
21 Other credit related costs (102.5) (47.0) 55.4
22 Net gains (losses) on equity securities (488.0) 3.3 491.4
23 Gains on sales of equity securities 80.3 90.5 10.2
24 Losses on sales of equity securities (219.6) (74.4) 145.1
25 Losses on write down of equity securities (348.7) (12.7) 335.9
26 Other (97.6) (51.1) 46.5
27 Foreign exchange loss on convertible bonds (43.6) -- 43.6
28 Ordinary profit (loss) (360.2) 578.3 938.6
29 Net special gains 19.5 301.5 282.0
30 Reversal of allowance for loan losses -- 239.9 239.9
31 Refund of enterprise taxes by the Tokyo Metropolitan Government -- 41.9 41.9
32 Gains on transfer of the substitutional portion of future
pension obligations -- 26.5 26.5
33 Gains on loans charged-off 44.2 26.4 (17.8)
34 Impairment losses -- (21.5) (21.5)
35 Income (Loss) before income taxes and others (340.7) 879.9 1,220.6
36 Income taxes-current 55.9 45.9 (9.9)
37 Income taxes-deferred (237.0) 230.6 467.7
38 Minority interest 1.8 42.4 40.5
39 Net income (loss) (161.4) 560.8 722.3
------------------------------------------------------------------------------------------------------------
40 Total credit costs (5+13+16+30) (538.7) 72.9 611.7
------------------------------------------------------------------------------------------------------------
41 Total credit costs + gains on loans charged-off (5+13+16+30+33) (494.4) 99.3 593.8
------------------------------------------------------------------------------------------------------------
Operating Results of Significant Subsidiaries for the Year Ended March 31, 2004
-----------------------------------------------------------------------------------------------------------------
General and Net business
administrative profits before
Gross profits expenses credit costs Net income
-----------------------------------------------------------------------------------------------------------------
42 The Bank of Tokyo-Mitsubishi, Ltd. 925.3 458.4 466.8 359.7
43 The Mitsubishi Trust and Banking Corporation 329.0 151.0 188.0 122.7
44 Mitsubishi Securities Co., Ltd. 117.2 88.6 28.6 36.1
45 UnionBanCal Corporation 248.3 149.6 98.7 62.9
-----------------------------------------------------------------------------------------------------------------
1
Mitsubishi Tokyo Financial Group, Inc.
2. Highlights of Consolidated Balance Sheets
--------------------------------------------
(in billions of yen except percentages)
-------------------------------------------------------------------------------------------------------------
As of March As of March
31, 2003 (A) 31, 2004 (B) (B) - (A)
-------------------------------------------------------------------------------------------------------------
1 Loans and bills discounted 46,950.3 46,590.1 (360.2)
2 Domestic loans 29,939.4 30,844.5 905.1
3 Overseas branches 5,570.4 4,427.9 (1,142.4)
4 Overseas subsidiaries (UnionBanCal Corporation, Bank of
Tokyo-Mitsubishi Trust Company and Bank of Tokyo-Mitubishi
(Australia) Ltd.) 3,599.0 2,963.0 (636.0)
5 Domestic housing loans 6,941.1 7,655.4 714.2
6 Domestic other consumer loans 535.5 461.8 (73.6)
7 Book value of loans sold during the fiscal year (total
of the two Banks*) (486.9) (183.3) 303.6
8 Sold to the Resolution and Collection Corporation ("RCC") (234.9) (42.1) 192.7
9 [Sold to the RCC before charge-offs] [(647.8)] [(79.5)] [568.2]
10 Other loans sold (251.9) (141.1) 110.8
11 Charge-offs during the fiscal year (total of the two Banks*) (292.5) (48.6) 243.9
12 Investment securities 24,158.3 28,329.5 4,171.2
13 Domestic equity securities 3,229.6 3,736.3 506.6
14 Japanese Government Bonds (total of the two Banks *) 10,591.7 14,984.5 4,392.8
15 Foreign bonds (total of the two Banks *) 6,657.5 5,744.3 (913.1)
16 Book value of investment securities sold during the fiscal
year (total of the two Banks*) (1,279.6) (747.3) 532.3
17 Transferred to an exchange-traded fund (366.1) (81.5) 284.5
18 Sold in the market or by other means (913.5) (665.7) 247.8
19 Write down during the fiscal year (total of the two Banks*) (356.5) (55.5) 301.0
20 Deposits 62,624.3 66,097.5 3,473.2
21 Total of the two Banks * 58,970.7 62,664.1 3,693.3
22 Overseas branches 5,943.5 7,852.1 1,908.6
23 Individuals 32,164.4 33,402.3 1,237.9
24 Corporations and others 19,903.8 20,575.1 671.3
25 Total shareholders' equity 3,046.4 4,295.2 1,248.8
26 Capital stock 1,258.0 1,258.0 --
27 Capital surplus 932.0 931.3 (0.7)
28 Retained earnings 962.3 1,506.5 544.2
29 Unrealized gains (losses) on securities available for sale (223.4) 560.3 783.7
30 Less treasury stock (4.4) (3.6) 0.8
31 BIS risk-adjusted capital ratio 10.84% 12.95% 2.10%
32 Tier I ratio 5.68% 7.14% 1.46%
33 Tier I capital 3,128.6 3,859.4 730.7
34 Risk-adjusted assets 55,049.6 53,996.7 (1,052.8)
-------------------------------------------------------------------------------------------------------------
[Valuation gains (losses) on securities available for sale]
(in billions of yen)
-------------------------------------------------------------------------------------------------------------
As of March As of March
31, 2003 (A) 31, 2004 (B) (B) - (A)
-------------------------------------------------------------------------------------------------------------
35 Total securities available for sale (242.6) 947.5 1,190.1
36 Domestic equity securities (427.2) 785.3 1,212.5
37 Domestic bonds 121.8 3.3 (118.4)
38 Foreign bonds 147.0 107.2 (39.7)
-------------------------------------------------------------------------------------------------------------
* "Total of the two Banks" represents the aggregated non-consolidated figures
of The Bank of Tokyo-Mitsubishi, Ltd. and The Mitsubishi Trust and Banking
Corporation.
2
Mitsubishi Tokyo Financial Group, Inc.
3. Disclosed Claims under the Financial Reconstruction Law ("FRL")
---------------------------------------------------------------
(1)Status of Disclosed Claim under the FRL [prompt report] (in billions of yen)
-------------------------------------------------------------------------------------------------------------------
As of As of As of As of Increase/ Increase/
March 31, March 31, September 30, March 31, (Decrease) (Decrease)
2002(A) 2003(B) 2003(C) 2004(D) (D)-(B) (D)-(C)
-------------------------------------------------------------------------------------------------------------------
1 Claims to bankrupt and substantially
bankrupt debtors 419.0 226.4 182.3 140.4 (86.0) (41.8)
2 Claims under high risk 1,933.5 1,031.3 745.7 541.3 (490.0) (204.4)
3 Claims under close observation 1,916.8 1,357.4 929.2 737.3 (620.0) (191.8)
4 Total Disclosed Claims (A) 4,269.4 2,615.2 1,857.2 1,419.0 (1,196.1) (438.2)
5 Total Credit Exposure (B) 52,401.4 48,951.2 48,282.0 48,306.5 (644.6) 24.5
6 Disclosed Claims Ratio (A/B) 8.14% 5.34% 3.84% 2.93% (2.40%) (0.90%)
-------------------------------------------------------------------------------------------------------------------
[CHART APPEARS HERE]
(2) Status of Non Performing Assets [prompt report]
a.Six months results ended March 31, 2004 (in billions of yen)
---------------------------------------------------------------------------------------------------
As of As of March
September Inflows Outflows 31, 2004 Net increase
30, 2003 (A) (B) (C) A+B-C (B-C)
---------------------------------------------------------------------------------------------------
7 Claims to bankrupt and substantially
bankrupt debtors 182.3 14.7 (56.5) 140.4 (41.8)
8 Claims under high risk 745.7 120.0 (324.4) 541.3 (204.4)
---------------------------------------------------------------------------------------------------
9 Total 928.0 134.7 (381.0) 681.7 (246.3)
---------------------------------------------------------------------------------------------------
b.Six months results ended September 30, 2003 (in billions of yen)
---------------------------------------------------------------------------------------------------
As of
September
As of March Inflows Outflows 30,2003 Net increase
31,2003 (A) (B) (C) A+B-C (B-C)
---------------------------------------------------------------------------------------------------
10 Claims to bankrupt and
substantially bankrupt debtors 226.4 14.4 (58.5) 182.3 (44.1)
11 Claims under high risk 1,031.3 150.7 (436.3) 745.7 (285.6)
---------------------------------------------------------------------------------------------------
12 Total 1,257.8 165.1 (494.9) 928.0 (329.7)
---------------------------------------------------------------------------------------------------
3
Mitsubishi Tokyo Financial Group, Inc.
c.Six months results ended March 31,2003 (in billions of yen)
---------------------------------------------------------------------------------------------------
As of As of March Net increase
September Inflows Outflows 31,2003 ------------
30,2002 (A) (B) (C) A+B-C (B-C)
---------------------------------------------------------------------------------------------------
1 Claims to bankrupt and substantially
bankrupt debtors 402.1 52.1 (227.8) 226.4 (175.6)
2 Claims under high risk 1,386.6 567.4 (922.7) 1,031.3 (355.2)
---------------------------------------------------------------------------------------------------
3 Total 1,788.7 619.6 (1,150.5) 1,257.8 (530.9)
---------------------------------------------------------------------------------------------------
d.Six months results ended September 30,2002 (in billions of yen)
---------------------------------------------------------------------------------------------------
As of
As of March September Net increase
31,2002 Inflows Outflows 30,2002 ------------
(A) (B) (C) A+B-C (B-C)
---------------------------------------------------------------------------------------------------
4 Claims to bankrupt and substantially
bankrupt debtors 419.0 28.9 (45.9) 402.1 (16.9)
5 Claims under high risk 1,933.5 369.4 (916.3) 1,386.6 (546.9)
---------------------------------------------------------------------------------------------------
6 Total 2,352.6 398.4 (962.3) 1,788.7 (563.8)
---------------------------------------------------------------------------------------------------
(3) Status of Secured Coverage on Disclosed Claims under the FRL [prompt report]
(in billions of yen)
-------------------------------------------------------------------------------------------------------------------------
Disclosed Collateral, Unsecured Reserves Coverage Ratio Coverage Ratio(as
amount Guarantees, etc (A) (B) (B/A) of March 31,2003)
-------------------------------------------------------------------------------------------------------------------------
7 Claims to bankrupt and
substantially bankrupt debtors 140.4 124.6 15.7 15.7 99.97% 100.00%
8 Claims under high risk 541.3 286.2 255.0 165.7 64.98% 68.52%
9 Claims under close observation 737.3 262.3 474.9 138.8 29.23% 36.31%
-------------------------------------------------------------------------------------------------------------------------
10 Total 1,419.0 673.3 745.7 320.3 42.95% 51.07%
-------------------------------------------------------------------------------------------------------------------------
11 (Change from March 31,2003) (1,196.1) (625.5) (570.5) (352.0) (8.12%) --
-------------------------------------------------------------------------------------------------------------------------
12 Normal claims 46,887.4 -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
(4) Status of Secured Coverage on Self-Assessment of Assets [prompt report]
--------------------------------------------------------------------------------------------
As of March As of March As of March
31,2002 31,2003 31,2004 -------
(A) (B) (C) (C)-(B)
--------------------------------------------------------------------------------------------
13 Normal 0.18% 0.17% 0.14% (0.02%)
14 Close Watch 8.11% 9.30% 9.41% 0.11%
15 Close Watch 3.97% 3.31% 4.81% 1.50%
16 Borrowers with Credit under Close
Observation 14.39% 21.16% 21.10% (0.06%)
17 Likely to become Bankrupt (excluding secured
assets) 67.54% 67.44% 65.23% (2.21%)
--------------------------------------------------------------------------------------------
Note:Above figures exclude certain mortgage and consumer loans.
4
Mitsubishi Tokyo Financial Group, Inc.
4. Status of Deferred Tax Assets
-----------------------------
(1) Tax Effects of the Items Comprising Net Deferred Tax Assets
(Total of the two banks) (in billions of yen)
------------------------------------------------------
Mar. 31, 2004
------------
vs. Mar. 31,
2003
------------------------------------------------------
1 Deferred Tax Assets 1,117.2 (273.9)
2 Allowance for loan losses 353.8 (178.3)
3 Write down of investment 99.6 9.8
securities
4 Net operating loss 662.8 (105.1)
carryforwards
5 Reserve for employees' 35.9 (1.7)
retirement benefits
6 Unrealized losses on -- (113.4)
securities available for sale
7 Other 55.3 3.7
8 Valuation allowance (90.4) 111.1
9 Deferred tax liabilities 404.2 385.9
10 Gains on placing trust for 7.3 (1.3)
retirement benefits
11 Unrealized gains on 387.4 387.4
securities available for
sale
12 Other 9.5 (0.1)
13 Net Deferred Tax Assets 712.9 (659.8)
------------------------------------------------------
(Consolidated)
------------------------------------------------------
14 Net Deferred Tax Assets 655.5 (646.3)
------------------------------------------------------
(2) Balance of Net Deferred Tax Assets and % of Tier I Capital
[CHART APPEARS HERE]
(3) Net Business Profits before Credit Costs and Taxable Income (Current Fiscal
Year)
(Total of the two banks) (in billions of yen)
------------------------------------------
FY 2003
------------------------------------------
15 Net business profits
before credit costs 654.8
16 Credit related costs (105.7)
17 Income before income
taxes 719.0
18 Reconciliation to
taxable income (448.3)
19 Taxable income 270.7
------------------------------------------
(4) Net Business Profits before Credit Costs and Taxable Income (Past Five
Fiscal Years)
(Total of the two banks) (in billions of yen)
----------------------------------------------------------------------------
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
----------------------------------------------------------------------------
20 Net business 888.0 578.6 552.0 619.5 689.9
profits before credit costs
21 Credit related costs 1,393.1 652.4 730.5 666.3 485.9
22 Income before
income taxes (124.7) 409.4 (199.0) (359.3) (485.2)
23 Reconciliation to
taxable income 421.0 (76.3) 304.4 142.0 (1,021.4)
24 Taxable income 296.2 333.1 105.3 (217.2) (1,506.7)
(5) Comparison with Past Fiscal Years
[CHART APPEARS HERE]
5
Mitsubishi Tokyo Financial Group, Inc.
(6) Classification Based on Prior Year Operating Results as Provided in the
JICPA Audit Committee Report No. 66
-------------------------------------------------------------------------------------------
Estimable period of future taxable income
-----------------------------------------
Classifi- Estimable No
cation Prior year operating results 1 year 5 years period limitation
-------------------------------------------------------------------------------------------
1 Sufficient taxable income for more
than three consecutive fiscal years XXXXX XXXXX XXXXX XXXXX
-------------------------------------------------------------------------------------------
2 Stable but insufficient taxable
income for three consecutive fiscal
years XXXXX XXXXX XXXXX
-------------------------------------------------------------------------------------------
3 Precarious and insufficient operating
results due to volatile profit XXXXX XXXXX
-------------------------------------------------------------------------------------------
4 Material net operating loss
carryforwards XXXXX
-------------------------------------------------------------------------------------------
Exception Net operating loss carryforwards are
attributable to extraordinary factors XXXXX XXXXX
-------------------------------------------------------------------------------------------
5 Tax loss for three consecutive fiscal
years and tax loss for the current
fiscal year is expected Cannot estimate future taxable income
-------------------------------------------------------------------------------------------
Although we recorded taxable income for the fiscal year ended March 31,
2004, we are classified as "4" described above since we have material net
operating loss carryforwards. However, since we believe the net operating loss
carryforwards are attributable to extraordinary factors such as changes in laws
and regulations, we apply the exception to classification 4. (Five years' future
taxable income is estimable.)
(7) Extraordinary Factors Such as Changes in Laws and Regulations
Our net operating loss carryforwards were incurred due to, among other
things, the followings: (i) we accelerated the final disposal of nonperforming
loans in response to both the "Emerging Economic Package," which provided
guidance to major banks to remove from their balance sheets claims to debtors
classified as "likely to become bankrupt" or below, and the "Program for
Financial Revival," which urged major banks to reduce the ratio of disclosed
claims to total claims by about half; and (ii) we reduced our holdings of
strategic equity investments under the "Law Concerning Restriction, etc. of
Banks' Shareholdings etc."
(8) Realizability of Deferred Tax Assets at March 31, 2004 (Assumptions)
(in billions of yen)
------------------------------------------------------------------------
Five year total
(2004 to 2008)
------------------------------------------------------------------------
1 Net business profits (based on our business plan) (*1) 4,620.0
2 Net business profits (basis of realizability
determination) (*2) 3,990.0
3 Income before income taxes (basis of realizability
determination) 3,240.0
4 Taxable income before adjustments (basis of
realizability determination) (*3) 3,880.0
5 Temporary difference + net operating loss carryforwards
(for which deferred tax assets shall be recognized) 2,750.0
6 Deferred tax assets at March 31, 2004 (*4) 1,119.0
------------------------------------------------------------------------
(*1) Total of the two banks, before credit costs
(*2) Based on the scenario that current short-term interest rate level continues
for the next five years
(*3) Before reversals of existing deductible temporary differences and net
operating loss carryforwards
(*4) Line"5" multiplied by effective tax rate (consolidated corporate-tax basis)
[CHART APPEARS HERE]
(Reference) Assumptions for Business Plan
----------------------------------------------------------------------------
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
----------------------------------------------------------------------------
S/T interest rate (3 m/s TIBOR) 0.09% 0.13% 0.50% 0.57% 0.88%
L/T interest rate (10 year JGB) 1.48% 1.90% 2.30% 2.03% 2.58%
Exchange rate (USD/Yen) (Y)105 (Y)105 (Y)105 (Y)105 (Y)105
----------------------------------------------------------------------------
6
Mitsubishi Tokyo Financial Group, Inc.
5. Earning Projections for the Fiscal Year Ending March 31, 2005
-------------------------------------------------------------
[Non-consolidated] (in billions of yen)
-----------------------------------------------------------------------------
For the fiscal For the fiscal For the six
year ended year ending months ending
March 31, 2004 March 31, 2005 September
(actual) 30, 2004
-----------------------------------------------------------------------------
1 Operating income 69.3 190.0 187.0
2 Ordinary profit 64.4 183.0 183.0
3 Net income 64.4 183.0 183.0
-----------------------------------------------------------------------------
[Cash dividends] (in yen)
---------------------------------------------------------------------------
Annual dividend Annual dividend
per share for per share for
the fiscal year the fiscal year Interim dividend
ended March 31, ending per share
2004 March 31, 2005
----------------------------------------------------------------------------
4 Common stock 6,000 6,000 --
----------------------------------------------------------------------------
[Consolidated] (in billions of yen)
----------------------------------------------------------------------------
For the fiscal For the six
year ended For the fiscal months ending
March 31, 2004 year ending September 30,
(actual) March 31, 2005 2004
----------------------------------------------------------------------------
5 Ordinary income 2,555.1 2,450.0 1,220.0
6 Ordinary profit 578.3 640.0 310.0
7 Net income 560.8 340.0 170.0
----------------------------------------------------------------------------
7
Mitsubishi Tokyo Financial Group, Inc.
II. Overview of MTFG's First Medium-Term Strategic Plan
1. Aspiration - To join the Global Top Ten
-----------------------------------------------------------------
Within three years MTFG aims to become one of the world's top ten
financial institutions by market capitalization
-----------------------------------------------------------------
2. Basic strategy to achieve our aspiration
----------------------------------------------------------------------
. Enhance our corporate value by pursuing integration synergies
utilizing three value-creating initiatives, and significantly
strengthen core net operating profit by considerably expanding
gross profits while also controlling expenses.
. Create value for customers through a thorough focus on customers
and an integrated Group strategy.
. Pursue efficiency on a consolidated Group basis by improving and
unifying management and administration of the Group.
. Promote measures to achieve renewed growth. The holding company has
assumed the role of providing integrated strategic management, and
has introduced an integrated business group system. In addition to
personnel development and training and strategic deployment of IT
systems, we aim to build a robust management structure that is
appropriate for a member of the global top ten.
----------------------------------------------------------------------
(1) Enhancement of corporate value
------------------------------
. Three value-creating initiatives
X Reduce overlaps and pursue scale merits
We intend to mobilize the comprehensive strengths of the Group
to provide financial services to retail and corporate customers
and to achieve scale merits and efficiencies that are difficult
to achieve within the individual banking, trust and securities
businesses.
X Promote cross-selling between banking, trust and securities
businesses
Based on a thorough understanding of customers' needs and through
intra-Group collaboration, we intend to provide customers with truly
unified financial services and realize integration synergies.
8
Mitsubishi Tokyo Financial Group, Inc.
X Create and develop new services and channels
In each of our business areas - retail, corporate and trust
assets (asset management and administration) - we seek
integration synergies by creating and developing new services
and channels.
MTFG Plaza - Integrated retail outlets that seek to provide
convenience of time and place.
Global partner - A team approach combining the expertise of
banking, trust and securities.
New investment trust company - Integrate the Group's asset
management platform and further utilize our
marketing channels under the Mitsubishi brand.
. Solid income base
By enhancing the core competencies of the Group, which include a high
quality customer base, a full line-up of products and services and the
leading global network among Japanese banks, we aim to maintain and
expand our solid income base.
(2) Delivery of value to customers and to society
---------------------------------------------
. Thorough customer focus
We intend to shift the axis of our approach to focus on customer needs
rather than business type and build a structure that can rapidly and
efficiently deliver innovative products and services. By actively
approaching customers we will actualize the latent needs of our
customers, and aim to fulfill their true needs by delivering services
that integrate the specialized functions of banking, trust and
securities. In these ways we intend to foster a sense of trust in MTFG
and further raise our brand value as a comprehensive financial services
provider that contributes to the creation of value by its customers.
. Socially responsible management
We reaffirm our commitment to contribute to the prosperity of our
customers at home and abroad and of the communities we serve, and to
continuously create social and economic value, as described in our Group
management philosophy. A commitment to provide a better society and
environment for future generations is part of our corporate social
responsibility, and we aim to achieve sustainable growth in our
corporate value by enhancing the appreciation of our Group among
customers, shareholders and other stakeholders over the medium and long
term.
9
Mitsubishi Tokyo Financial Group, Inc.
(3) A business strategy to create corporate value
---------------------------------------------
. Basic business strategy
X Unified Group strategy formulation
New business strategy and strategy with respect to particular
customers will be formulated by the Executive Committee and
each integrated business group of the holding company as we
seek to implement our strategies as a unified Group.
X Focused allocation of business resources to strategic areas
Business resources released through the integration of Group
functions will be injected into strategic growth areas such as
our retail and trust assets businesses.
X Reduction of expense ratio by expanding gross profits
We aim to reduce the expense ratio by significantly increasing
gross profits while controlling Group consolidated expenses.
X Creation of new products and services
The new integrated business groups will combine banking, trust
and securities functions to develop new products and services
that aim to fulfill the requirements of the most sophisticated
customers and that can be standardized for other customers.
X Continue to further reduce our balance of NPLs and equity
holdings
. Disposal of non-performing loans
Further reduce our balance of NPLs and target an NPL
ratio of 1 to 2% (sum of BTM & MTBC non-consolidated
figures) by fiscal 2006.
. Reduction of equity holdings (Book-value basis)
Continue to reduce equity holdings and target a level of
around 50% of core capital by fiscal 2006.
. Overall management and administration of the Group
We are introducing a Groupwide appraisal system as part of our
initiative to foster a consolidated Group mindset and pursuing the
improvement and unification of various kinds of management and
administration including finances, risk management and asset &
liability management. We seek to further improve our business
efficiency through unified management and administration.
. Pursue efficiency as a consolidated Group
We aim to improve business efficiency through concentrating and
streamlining the corporate center functions of MTFG, BTM and MTBC,
conducting joint procurement and joint office space management,
reviewing investment costs, improving productivity, and radically
redesigning and speeding up business processes.
10
Mitsubishi Tokyo Financial Group, Inc.
(4) Measures to achieve renewed growth
----------------------------------
. Personnel development and training
We will implement large-scale personnel exchanges, aiming for the
most effective deployment of staff within the Group. We will also
train professional experts in various areas of business to
aggressively pursue the creation of new value.
. Organization
The role of the holding company has shifted from strategic
coordination to integrated strategic management, and we have
introduced an integrated business group system by reorganizing our
business focused on the axis of customer needs. Furthermore,
through improvement of corporate governance, we aim to speed up
business management.
. IT Systems
We will improve IT systems and infrastructure and are considering
sharing these systems and infrastructure within the Group.
. Building a robust management structure
We aim to build a robust management structure that is appropriate
for a financial group that aims to join the global top ten. We are
formulating an appropriate response to the new BIS capital adequacy
regulations and Section 404 of the Sarbanes-Oxley Act (Appraisal of
internal controls on financial reporting) while using a number of
business performance indicators as part of our new structure to
comprehensively progress reforms of the Group.
3. Financial Targets (Fiscal 2006 Targets)
. Consolidated Financial Targets
The fiscal 2006 targets assume the following:
A 3-month yen Tibor of 0.5% (the average for the plan period)
A dollar/yen exchange rate of 105 yen (at the end of the plan
period)
Real Japanese GDP growth of 2.8% (in fiscal 2006)
-------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2003 Fiscal 2006
(Actual) (Actual) (Target)
-------------------------------------------------------------------------------
Consolidated net operating profit*1 ((Y)
Billion) 764.2 793.1 1,270
Consolidated net income ((Y) Billion) (161.4) 560.8 600
Consolidated ROE*2 (5.9%) 17.9% approx. 14%
Consolidated expense ratio*3 56.4% 55.2% approx. 45%
-------------------------------------------------------------------------------
Notes:
1. Before trust account write-offs and general provision for loan losses
2. (Net income - non-convertible preferred share dividends) / (average capital
(excluding the value of non-convertible preferred shares, appraisal gains))
3. General and administrative expenses / Gross profits (before trust account
write-offs)
11
Mitsubishi Tokyo Financial Group, Inc.
. Profit targets by business area
We aim to approximately double the total net operating profit
contributed by our three businesses of retail, corporate and trust
assets (core net operating profit) from the fiscal 2003 level. (Retail
business more than 3 times, Corporate business approximately 1.5 times
and Trust Assets business more than 4 times (each compared to fiscal
2003)).
----------------------------------------------------------------------------
Fiscal 2006
(Target)
Fiscal 2003 (compared to Fiscal
Net operating profit ((Y) Billions) (Actual) 2003)
----------------------------------------------------------------------------
Integrated Retail Banking Business Group 95.1 More than 3 times*
Integrated Corporate Banking Business Group 403.2 Around 1.5 times
Integrated Trust Assets Business Group 9.5 More than 4 times
TOTAL (Core net operating profit) 507.9 Approx. 2 times
----------------------------------------------------------------------------
* Assuming no increase in interest rates, more than 2 times.
. Business portfolio targets
We aim to grow the combined share of total net operating profits
contributed by the three business groups from 63% in fiscal 2003 to more
than 75% in fiscal 2006. Target shares of total net operating profit for
each business group are as follows: The retail business from 12 % in
fiscal 2003 to more than 25 % in fiscal 2006; the corporate business
from 50 % in fiscal 2003 to 45-50 % in fiscal 2006; and the trust assets
business from 1% in fiscal 2003 to 3-5% in fiscal 2006.
[CHART APPEARS HERE]
--------------------------------------------------------------------------------
These materials contain forward-looking statements and other forward-looking
information relating to the Company and/or the Group as a whole (the
"forward-looking statements"). The forward-looking statements are not historical
facts and include, reflect or are otherwise based upon, among other things, the
Company's current estimations, projections, views, policies, business
strategies, targets, expectations, assumptions and evaluations with respect to
general economic conditions, its operations, its financial condition, its
management in general and other future events and general economic conditions
including adverse economic conditions in Japan, United States or other countries
and declining real estate and/or stock prices. Accordingly, they are inherently
susceptible to uncertainties, risks and changes in circumstances and are not
guarantees of future performance. Some forward-looking statements represent
targets that the Company's management will strive to achieve through the
successful implementation of the Company's business strategies. The Company may
not be successful in implementing its business strategy, and actual results may
differ materially, for a wide range of possible reasons. Other forward-looking
statements reflect the assumptions and estimations upon which the calculation of
deferred tax assets has been based and are themselves subject to the full range
of uncertainties, risks and changes in circumstances outlined above. In light of
the many risks, uncertainties and possible changes, you are advised not to put
undue reliance on the forward-looking statements. The Company is under no
obligation - and expressly disclaims any obligation - to update or alter the
forward-looking statements, except as may be required by any applicable laws and
regulations or stock exchange rules.
For detailed information relating to uncertainties, risks and changes regarding
the forward-looking statements, please see the Company's latest annual report
and other disclosure materials.
--------------------------------------------------------------------------------
12