a new roadmap to success - jトラスト株式会社 · 2019-09-30 · a new roadmap to success...

A NEW ROADMAP

TO SUCCESS

Year Ended March 31, 2019

2019Annual Report

The Financial Group Leading the Way to Asia’s Future

In Japan, South Korea, Southeast Asia, and across Asia.

J Trust is creating new value and contributing to Asia’s economic

development through comprehensive financial services.

J Trust Group’s Corporate Philosophy and Behavioral Principles

For our customers, shareholders and ourselves, we make continuous

effort to respond quickly to changing environments and challenge

ourselves diligently to create a better future for the world.

Our focus

• Treat all stakeholders, including customers, shareholders and business partners as our customers and

take a customer-oriented approach to meet their expectations.

• Handle various issues swiftly while pursuing ingenuity and improvements without being satisfi ed with

the status quo.

• Ensure accurate and timely information disclosure and uphold high ethical standards for business

execution.

• Create new services and value to contribute to economic expansion.

J Trust Group’s Corporate Philosophy

J Trust’s Behavioral Principles are based on the six letters of the alphabet that constitute its name:

J (for “Justice”) Conduct business with integrity

T (for “Teamwork”) Respect individuals to form an organization

R (for “Revolution”) Stimulate a spirit of innovation for new value

U (for “Uniqueness”) Embrace ingenuity

S (for “Safety”) Deliver services with sincerity

T (for “Thankfulness”) Express gratitude

Behavioral Principles

J Trust Group’s Track Record of Growth........................................2

At a Glance ....................................................................................4

J Trust Group’s Business Model ....................................................6

To Our Stakeholders ......................................................................8

SPECIAL FEATUREToward continuous growth in the financial business in Indonesia—Increasing loan balances through joint financing between BJI and JTO— .............................................................................16

Financial Business in Japan ........................................................20

Financial Business in South Korea and Mongolia .......................22

Financial Business in Southeast Asia ..........................................24

Non-financial Business ................................................................26

Sustainability Highlights ..............................................................27

Ten-year Consolidated Financial Summary .................................40

Consolidated Financial Statements .............................................42

Statement of Financial Position of Principal Subsidiaries ...........46

Statement of Profit or Loss of Principal Subsidiaries ..................48

Corporate Information .................................................................50

Investor Information ....................................................................51

CONTENTS

Note on Forward-Looking Statements

This annual report contains projections related to the J Trust Group’s future performance and other matters. Such

projections reflect the judgment of management based on information currently at hand, and therefore incorporate

latent risks and uncertainties. Readers are asked to understand that actual results may differ significantly from such

projections due to various factors, such as economic trends and business conditions.

1J Trust Co., Ltd. Annual Report 2019

MONGOLIASeeing business opportunities in the growth of financial markets, we entered Mongolia in 2018.

Non-banking

Non-bankingBanking Servicer

Non-bankingBanking Servicer

SOUTH KOREAWith financial markets similar to those of Japan, we entered the South Korean market in 2011 using strengths devel-oped in Japan, and have established a three-pronged, comprehensive financial business with banking, servicing, and leasing and installment loans.

Investment base

SINGAPOREWe established a base in Singapore in 2013 to promote business development in Southeast Asia.

INDONESIASeeing a market with ASEAN’s largest population and high potential growth, we entered Indonesia in 2014 and have established a three-pronged business base with banking, servicer, and multi-finance.

Banking

CAMBODIAIn 2019, we started banking operations in Cambodia, which is experiencing rapid economic growth.

Non-banking Servicer Credit card

JAPAN

The J Trust Group is using its operational expertise gained in Japan such as credit screening, collection, and marketing to develop capabilities overseas, while at the same time integrating these capabilities with each country’s strong points to expand its fields of business across Asia.

J Trust Group’s Track Record of Growth

Proactively pursuing mergers and acquisitions to expand our comprehensive fi nancial business in Asia

3/1977 3/2008 3/2009 3/2010 3/2011

37,86237,99939,811

12,189

JapanStarted a financial business

We have built a stable earnings base with strengths in screening, collection, and marketing capabilities developed over our 40-year history.

2 J Trust Co., Ltd. Annual Report 2019

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

(Millions of yen)

Other assets*2

Overseas segment assets*1

Total Assets of the J Trust Group

*1 Figures for FY03/2012 and FY03/2013 are for the financial business in South Korea, for FY03/2014 are for the financial business in South Korea and JTRUST ASIA, for FY03/2015 through FY03/2018 are for the financial business in South Korea and the financial business in Southeast Asia and the investment business (primarily JTRUST ASIA), and for FY03/2019 the financial business in Mongolia is included as well.

*2 Consolidated total assets minus overseas segment assets*3 IFRS applied from FY03/2017

3/2016 3/2017 3/2018 3/2019

656,961 668,377

619,865

508,659

3/2012

117,546

3/2013

218,706

3/2014

334,736

3/2015

540,718

South Korea

Singapore Indonesia Indonesia

Cambodia

Indonesia

South Korea South Korea South Korea MongoliaApr. 2011 Acquired a financial business operator, Neoline Credit

Oct. 2013Established JTRUST ASIA

Nov. 2014Acquired current Bank JTrust Indonesia

June 2015Established a servicer, JTRUST INVESTMENTS INDONESIA

Aug. 2019Acquired current J Trust Royal Bank

Oct. 2018Acquired a multi-finance company, current PT JTRUST OLYMPINDO MULTI FINANCE

Oct. 2012Current JT Chinae Savings Bank commenced operations

Mar. 2014Acquired current TA Asset Management

Jan. and Mar. 2015Acquired current JT Savings Bank and JT Capital

May 2018Acquired a financial business company, current J Trust Credit NBFI


At a Glance

Financial Business in Southeast Asia

Financial Business inSouth Korea and Mongolia

Business description

• Savings bank business• Collection of accounts receivables• Capital business (leasing and installment business) • Financial business

Major subsidiaries

• JT Chinae Savings Bank • JT Savings Bank• TA Asset Management • JT Capital• J Trust Credit NBFI

General Entertainment Business


• Banking business• Collection of accounts receivables• Multi-finance business

Major subsidiaries

• Bank JTrust Indonesia• JTRUST INVESTMENTS INDONESIA• JTRUST OLYMPINDO MULTI FINANCE• J Trust Royal Bank*


• Live entertainment business• TV program production business• Planning and production of live entertainment

contents• Performing arts production

Major subsidiaries*

• KeyHolder • allfuz• ZEST • FA Project• UNITED PRODUCTIONS

Financial Business in Japan


• Credit guarantee • Collection of accounts receivables• Credit and consumer credit• Other financial business

Major subsidiaries

• Nihon Hoshou• Partir Servicer• J TRUST Card

10.7 billion yenOperating revenue

Operating revenue

Operating revenue

Operating revenue

39.6 billion yen

13.0 billion yen 1.5 billion yen

*Company names are as of August 1, 2019*As of August 19, 2019 ©2019 Zest, Inc.

J Trust Co., Ltd. Annual Report 20194

Number of Employees by Segment

Financial business in Japan 229

Financial business in South Korea and Mongolia

986

Financial business in Southeast Asia 1,868

General entertainment business 62

Real estate business 54

Investment business 5

Other business 57

Corporate (Common) 63

Total 3,324

Other Business


• IT system business• Design and construction of commercial facilities

Major subsidiaries

• J Trust System• Keynote

Operating revenue

Operating revenue

Operating revenue

Investment Business


• Investment and management support

Major subsidiary

• JTRUST ASIA

Real Estate Business


• Sales and brokerage of real estate• Purchase and sale of income properties

Major subsidiaries

• Keynote• KeyHolder

6.4 billion yen

3.2 billion yen

1.2 billion yen

J Trust Co., Ltd. Annual Report 2019 5

Non-fi nancial Non-fi nancial businessbusiness

Investment Investment businessbusiness

We develop services using Group synergies in the areas of general entertainment and real estate services.

We are steadily acting on business opportunities in Asia.

The J Trust Group has built an earnings model that is resilient against changes in the external environment, by constructing a three-pronged business model of banking, non-banking, and servicing.

J Trust Group’s Business Model

Non-banking Non-banking businessbusiness

We provide services with high added value that meet diverse customer needs including various types of loans, loan guarantees, and credit services.

(South Korea)

(Indonesia)

(Mongolia)

(Singapore)


Strengths supporting Strengths supporting continuous growthcontinuous growth

Screening and collection capabilitiesUsing our proprietary expertise in screening and collection, we are maintain-ing a high internal rate of return (IRR; for at least four years) of 40%. The delin-quency ratio* for banks in South Korea is 4.0%. * The percentage of loans at least 90 days

delinquent.

(Indonesia)

(Cambodia)

Banking businessBanking businessWe are contributing to local economic development by meeting the funding needs of regional customers as well as small and medium-sized companies.

Servicer businessServicer businessUsing our receivables collection expertise developed in Japan over many years, we are maintaining a strong presence with our servicer business in South Korea and Indonesia.

(South Korea)

(South Korea)

Operational and development capabilities

Brand and credit strength

We are maintaining continu-ous growth by providing high-value-added products and services sought by the market.

Backed by strong brand strength and credit strength, we pursue the challenge of creating new services that contribute to society’s development.

(South Korea)


To Our Stakeholders

Nobuyoshi Fujisawa

Representative Director,

President & Chief Executive Officer


We will work toward an early recovery in our financial business

in Southeast Asia for continued growth as the financial group

leading the way to Asia’s future.

Overview of FY03/2019

• Recorded large losses due to provisions booked conservatively against latent risks,

aiming for continuous growth

• Addressed anticipated risks in advance to lay the foundation for an earnings recovery

Initiatives for continuous growth

• Emphasize rebuilding of the fi nancial business in Southeast Asia for an early recovery

• Implement measures for continuous growth in the fi nancial business in Japan as well

as fi nancial business in South Korea and Mongolia

We recorded a large operating loss due to provisions booked conservatively against latent risks and rebuilt the foundation for future growth.

Overview of FY03/2019

The J Trust Group operates three core businesses: the

fi nancial business in Japan; the fi nancial business in

South Korea and Mongolia; and the fi nancial business in

Southeast Asia. The fi nancial business in Japan consti-

tutes a stable profi t base, and using the expertise we

have cultivated in Japan we are developing fi nancial busi-

nesses in South Korea and Mongolia and in Southeast

Asia, to expand our fi nancial business platform in the

Asian region. We have already established stable man-

agement bases in Japan and South Korea. We are also

implementing a variety of initiatives as future growth

drivers for the fi nancial business in Southeast Asia.

Operating revenue for FY03/2019 rose 0.8% from the

previous fi scal year to 74.9 billion yen; however, we

recorded an operating loss of 32.6 billion yen (compared

with a 4.7 billion yen operating profi t in the previous year).

As a provision for future risks, Bank JTrust Indonesia

processed almost all non-performing loans that existed

before the bank was acquired in a lump sum, and pro-

cessed a portion of loans that became non- performing

after the acquisition as well as a portion of potential

non- performing loans, resulting in the booking of a 13.0

billion yen provision in fi nancial business in Southeast

Asia. JTRUST ASIA PTE. LTD. also recorded a 20.1

billion yen provision against the entire amount of claims

of Group Lease PCL it held. These were the main factors

behind the large operating loss in FY03/2019, but future

collections against these provisions will be recorded

as profi t and will contribute to earnings. In addition,

to eliminate uncertainties related to our businesses,


Operating Revenue and Profit by Segment

(Billions of yen)

3/2018 3/2019 12/2019 Forecast*

Financial Business in JapanOperating revenue 9.1 10.7 6.9

Operating profit 4.1 4.2 2.9

Financial Business in South Korea and Mongolia

Operating revenue 35.8 39.6 28.9


Financial Business in Southeast AsiaOperating revenue 13.5 13.0 12.9

Operating profit 1.5 (17.7) (1.7)

General Entertainment BusinessOperating revenue — 1.5 7.8

Operating profit — (0.0) 0.3

Real Estate BusinessOperating revenue 6.9 6.4 5.4


Investment BusinessOperating revenue 7.5 1.2 1.0

Operating profit (2.8) (20.5) (0.6)

Others/Consolidation adjustmentOperating revenue 1.5 2.5 1.4

Operating profit (2.2) (3.4) (4.2)

Consolidated operating revenue 74.3 74.9 64.3

Consolidated operating profit 4.7 (32.6) 0.0

* FY12/2019 will be a nine-month accounting period.

and to build a foundation for a rapid recovery, we have

strategically reviewed our business portfolio and are

concentrating our efforts in businesses where continuous

growth is forecast. Through these measures, we have

addressed in advance the risks envisioned at this time,

and have laid a path for an earnings recovery from

FY12/2019 onward.* The fi nancial business in Japan and

the fi nancial business in South Korea and Mongolia can

be expected to continue to record stable profi ts, so by

rebuilding the fi nancial business in Southeast Asia we are

reestablishing the company as one that records stable

profi t. The following is an explanation of our initiatives for

continuous growth.

To Our Stakeholders

* J Trust Co., Ltd. is changing its fi scal year-end to December starting from FY12/2019 (see Page 15).

10

5

0

–2012/2019(Forecast)

4.5

9.2

3/20193/2018

–8.5Operating Profit of 3Financial Businesses(Billions of yen)

Financial Business in Japan


Financial Business in Southeast Asia


Financial business in Southeast Asia

We are focusing on rebuilding Bank JTrust Indonesia to achieve profi tability quickly, using the Group’s comprehensive strength.


5,000

4,000

3,000

2,000

1,000

0

2018 Nominal GDP of Japan and ASEAN Countries(Billions of USD)

Indonesia

1,022.5

Malaysia

354.4

Philippines

330.9

Myanmar

68.6

Laos

18.4

Thailand

487.2

Vietnam

241.3

Singapore

361.1

Cambodia

24.5

Brunei

14.1

Japan

4,971.9

Source: April 2019 edition of World Economic Outlook Databases 2019 (Data from 2018)

The fi nancial business in Southeast Asia consists of Bank

JTrust Indonesia (BJI) for banking operations, PT JTRUST

INVESTMENTS INDONESIA (JTII) for receivables collec-

tion operations, and PT JTRUST OLYMPINDO MULTI

FINANCE (JTO) for multi-fi nance in areas including auto-

mobiles and agricultural equipment. Even among the

various ASEAN countries undergoing rapid economic

growth, Indonesia’s growth stands out, and with the

largest ASEAN national popu lation of roughly 270 million

people, nominal GDP is also ASEAN’s highest, at more

than 1 trillion dollars. As with South Korea, Indonesia

constitutes a three-pronged business group with a bank,

a servicer, and a fi nance company, and we see this

structure as a major achievement.

At the same time, the fi nancial business in Southeast

Asia booked a provision to process a large amount

of non-performing loans that emerged at BJI during

FY03/2019, and BJI also stopped extending new loans

as a way to prevent further growth in non-performing

loans.

The main reason for the emergence of non-performing

loans at BJI was that as proactive marketing was carried

out in the pursuit of achieving loan balance targets, the

screening process became relaxed. Going forward, we

will emphasize achieving profi tability by “rebuilding the

foundation,” and working to “rebuild personnel and the

organization” and “strengthen risk management.”

To restructure personnel and the organization, we are

streamlining operations through staffi ng reductions and

branch mergers and closures, and have also sent some

of the Group’s outstanding managers who were success-

ful in bank rebuilding in South Korea to BJI. We have also

dispatched specialists in areas including screening,

marketing, and auditing.

To strengthen risk management, we have assigned

staff responsible for compliance to all branches in order

to enhance loan screening and establish a compliance

structure. These staff visit customers in person and con-

duct surveys to determine whether employees dealt with

them appropriately and provided suffi cient explanations,

to confi rm the appropriateness of operations and create

a strong corporate culture.

The J Trust Group is carrying out the above measures

in fi nancial business in Southeast Asia to “rebuild the

foundation” of BJI, and is also emphasizing the early col-

lection of non-performing loans at JTII. BJI is also work-

ing to increase its quality loans outstanding through joint

fi nancing with JTO (see Page 16).


50

40

30

20

10

020182017201620152014

18

30

19

31

18

30

17

30

15

35

48 50 48 4750

50

40

30

20

10

020182017201620152014

26 28 26 27 29

ANZ Royal Bank (current J Trust Royal Bank) Financial Highlights(Millions of USD)

Operating Revenue Operating Profit Net interest income Other income

Source: Data from the ANZ Royal Bank annual report

To Our Stakeholders

As an offensive measure to rebuild the fi nancial busi-

ness in Southeast Asia, BJI is using a Japan Linkage

Division. Under this framework, BJI supports customers

of Japanese regional banks that are expanding into

Indonesia, creating possibilities for win-win relationships

between BJI and regional banks. This framework is

already being established to provide loans for housing

built by a Japanese construction company in Indonesia.

The Japan Linkage Division has been well received by a

number of regional banks, and additional new proposals

are in the works. Going forward, BJI will work to grow by

increasing staff and providing detailed services that are

diffi cult for large banks.

As another offensive measure, in August 2019 we

acquired a 55.0% shareholding in ANZ Royal Bank

(Cambodia) Ltd. (ANZR), Cambodia’s 10th largest com-

mercial bank in terms of total assets (as of December

2018). ANZR is known as a top-tier bank with operations

focusing on low-risk markets, namely the top 1% of

leading companies in Cambodia and the top 5% of high-

net-worth individuals, and for the past several years has

generated annual operating profi t of roughly 3 billion yen.

Once the acquisition is completed, the bank can be

expected to contribute profi t to the J Trust Group as

J Trust Royal Bank Ltd., and in addition, by integrating

the Group’s expertise in retail fi nancing, the bank will aim

for profi t growth by offering new services and expanding

its customer base.

In preparation for the commencement of bank opera-

tions, we held a “J Trust Coming Soon” campaign in

Cambodia, and have already received many inquiries

regarding fi nancing and operational tie-ups. In addition to

rebuilding the fi nancial business in Indonesia, we will

develop the strategy for expanding J Trust Royal Bank’s

customer base to turn the fi nancial business in Southeast

Asia into a growth driver.


Nine partnered financial institutions

• The Ehime Bank, Ltd.

• Kinki Sangyo Credit Union

• Shonan Shinkin Bank

• THE TAISHO BANK, LTD.

• Shinhan Bank Japan

• THE KAGAWA BANK, LTD.

• THE SAIKYO BANK, LTD.

• Seikyo Credit Union

• The Tokyo Star Bank, Limited

(As of July 31, 2019)

Financial business in Japan

We are diversifying our guarantee products.


Backed by the J Trust Group’s strengths in areas includ-

ing screening, collection, and marketing, our business in

Japan focuses on credit guarantees and the purchase

and collection of receivables.

Our credit guarantee business involves mainly credit

guarantees for property-backed loans that are handled

by our associated fi nancial institutions. The Group’s

strengths lie in our ability to develop tailor-made products

in response to market needs and our proprietary real

estate screening capabilities. To date, we have limited the

business to properties within a roughly 10-minute walk

from a train or subway station in the urban areas of

Tokyo, Nagoya, Osaka, and Fukuoka, built up credit

guarantee balances with a focus on condominium loans

and have maintained an occupancy rate on rental hous-

ing of at least 98%. Nevertheless, with fi nancial institu-

tions’ screening standards becoming increasingly strict, it

is diffi cult to expect growth in credit guarantee balances

for condominium loans, so we are expanding our credit

guarantee products to include a business providing guar-

antees on overseas property-backed loans for high net-

worth individuals and reverse mortgages. In addition, in

March 2019 we entered into an operational tie-up with

SAMURAI&J PARTNERS Co., Ltd. to expand our guaran-

tee products, and we are involved in the joint packaging,

promotion, and credit guarantee operations for crowd-

funded products being developed by SAMURAI&J

PARTNERS as part of their investment banking opera-

tions. Nihon Hoshou Co., Ltd. is responsible for credit

guarantee services, and has credit guarantee balances

exceeding 200 billion yen. With its guarantee capabilities,

Nihon Hoshou engages in guarantees for fi nance-type

crowd funding, so that if investors can be assured that

they will be repaid their principal and interest, demand

from investors will grow.

In the business of purchasing and collecting receiv-

ables, the balance of claimed receivables is over 900 bil-

lion yen, refl ecting the strength of its domestic top-class

collection capabilities stemming from the consolidation of

expertise gained through mergers and acquisitions. The

strength of these collection capabilities gives us a com-

petitive edge when bidding to purchase claims from

fi nancial institutions and credit card companies, and we

are using this expertise in claims collection developed in

Japan in our fi nancial business in South Korea and our

fi nancial business in Southeast Asia.


500

400

300

200

100

0

5.0

4.0

3.0

2.0

1.0

03/20193/20183/2017

3.2

393.8

3.5

345.4

421.8

4.815

12

9

6

3

03/20193/20183/2017

0.99%

6.20%

7.59%

1.18%

9.59%

13.36%

0.92%

6.71%

8.18%

Assets and Operating Profit of Financial Business in South Korea and Mongolia(Billions of yen)

ROI, ROE and ROA of J Trust Group’s 4 KoreanCompanies(%)

ROA ROE ROI

To Our Stakeholders


With a foundation in place to develop comprehensive fi nancial services, shift from “quantity” to “quality” and aim for stable growth.


The Group’s operational expertise developed in Japan in

areas including screening, collection, and marketing is

leading to signifi cant success as we develop our busi-

ness in South Korea. The Group’s operations in South

Korea began with the acquisition of a savings bank

license and the commencement of operations in 2012

of JT Chinae Savings Bank Co., Ltd., which achieved

full-year profi tability in two-and-a-half years. Currently

in South Korea, banking operations are carried out by

JT Chinae Savings Bank and JT Savings Bank Co., Ltd.,

with JT Capital Co., Ltd. engaged in installment loans

and leasing operations and TA Asset Management Co.,

Ltd. handling the purchase and collection of receivables.

With this three-pronged corporate group structure, we

have established a management platform for the devel-

opment of comprehensive fi nancial services, and have

entered a phase where stable growth is expected. Going

forward, we will maintain stable customer relationships

through unsecured consumer loans, increase speed and

reduce costs using fi nancial technology (“Fintech”) in our

screening system, and strengthen our receivable collec-

tion system, while at the same time aiming for a balance

between risk and return by emphasizing “quality” over

“quantity.” In Mongolia, J Trust Credit NBFI became part

of the J Trust Group in 2018. This company is currently

focusing on loans for used cars, offering speedy fi nancing

services at reasonable interest rates.

Segment assets (left axis) Segment profi t (right axis)


15

12

9

6

3

03/2019 12/2019

(Forecast)3/2018

1.5

3/20173/20163/20153/20143/20133/20123/20113/20103/2009

4 3

2

3

3

5

5

7

5

6

6

6

6 6

1

4

3

5

5

1

1

Dividend(Yen)

Along with reducing the dividend, we have suspended or reduced directors’ compensation

To our stakeholders

J Trust recognizes that appropriate returns of profi t to

shareholders and a stable dividend are one of manage-

ment’s most important issues. We maintained the full-

year dividend at 12 yen per share for the three years

starting from FY03/2016, but in light of the major

downward revision to results for FY03/2019, we have

reduced the full-year dividend to 7 yen per share, con-

sisting of a 6 yen per share interim dividend and a 1 yen

per share year-end dividend. At the same time, to clarify

responsibility for the downward revisions to results and

the dividend, directors’ compensation has been

suspended or reduced.

In addition, because more than half of the Group’s

operating revenue is generated by overseas subsidiaries

and with many overseas subsidiaries ending their fi scal

year on December 31, we are changing to a January 1–

December 31 fi scal year to promote more globally

integrated management and increase management

transparency through timely and appropriate disclosure.

As a result, FY12/2019 will be an irregular, nine-month

fi scal year beginning April 1, 2019, and ending December

31, 2019. With regard to the dividend, given the priority

being placed on an early recovery in results again in

FY12/2019, we intend to pay a year-end dividend of

1 yen per share.

Each and every employee of the J Trust Group will

work as one toward a recovery in business results and

continuous growth. I ask for the further guidance and

support of shareholders and investors in this endeavor.

Interim dividend Year-end dividend

Notes: 1. Figures are retroactively adjusted to reflect the June 2012 stock split.

2. FY03/2016 dividend included a commemorative dividend of ¥2 per share.


Toward continuous growth in the financial business in Indonesia—Increasing loan balances through joint fi nancing between BJI and JTO—

SpecialFeature

Indonesia’s nominal GDP is Southeast Asia’s largest at more than 1 trillion dollars, and its actual GDP growth rate has continued at roughly the 5-6% level since 2010. Indonesia also has Southeast Asia’s largest population, at roughly 270 million, and the average age (29.7*1) is lower than Thailand and Vietnam. Another signifi cant feature is that the country is a group of islands. The J Trust Group is working toward continuous growth of fi nancial business in Indonesia by increasing joint fi nancing between our commercial bank PT Bank JTrust Indonesia Tbk. (BJI) and PT JTRUST OLYMPINDO MULTI FINANCE (JTO), which is engaged in multi-fi nance for automobiles and agricultural equipment and has a marketing network that covers remote islands.

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

2018 Population in IndonesiaMale

Population (Millions of people)

Source: The World Factbook

Age Female

150 3 6 9 12015 12 9 6 3

*1. Source: World Population Prospects. Data is 2020 estimates

released in 2019.

*2. Lending primarily uses BJI’s balance sheet with sales, credit screen-

ing, administration, and collection carried out by JTO. Risks are

borne by BJI and JTO in proportion to the respective portions of

the loan extended.


Overview of JTO

JTO’s predecessor company, PT. OLYMPINDO MULTI

FINANCE, was a multi-fi nance company which operated in

Indonesia for more than 40 years, focused on fi nancing for

used cars. Through its network of more than 40 locations on

Indonesia’s fi ve major islands, the company has built strong

relationships of trust with many used car dealers.

The J Trust Group acquired a 60% shareholding (common

share basis) of the company in October 2018, made it a sub-

sidiary and changed the name to JTRUST OLYMPINDO MULTI

FINANCE (JTO). Kazuyuki Matsuoka, who has a wealth of

management experience in the fi nancial industries in Japan and

South Korea and at companies incorporated overseas, was sent

to the company as President Director and Teruhiko Miwa, who

has more than 20 years of experience in the fi nancial industries

of Japan and Indonesia, was named Vice President Director.Teruhiko MiwaVice President Director

Kazuyuki MatsuokaPresident Director

The signing ceremony with PT. OLYMPINDO MULTI FINANCE

Increasing business opportunities through BJI – JTO joint fi nancing

150

120

90

60

30

0

1,500

1,200

900

600

300

02/2019 5/20194/20193/20191/2019

19.1

230

115.4

997

12/201811/201810/20189/20188/20187/20186/20185/20184/2018

Monthly amount of new loans (left axis) Monthly number of new loans (right axis)

Indonesia’s multi-fi nance industry has experienced prob-

lems involving improper accounting and non-performing

loans emerging from effectively unsecured loans related

to electrical appliances, and because of the increase in

credit risk for the industry overall, over the past few years

the environment for fund procurement by independent

multi-fi nance companies not affi liated with major banks or

manufacturers has deteriorated.

At the same time, the fund procurement environment

for JTO has improved signifi cantly with the backing of

BJI. With this stability in fund procurement, JTO has

resumed transactions with large used car dealers after

having scaled back this business, and the number of

new loans and outstanding amounts continues to grow

on a month-on-month basis. For May 2019 these fi gures

were 997 loans and 115.4 billion rupiah, respectively,

and compared with April 2018 when we acquired the

60% shareholding in PT. OLYMPINDO MULTI FINANCE,

these represent respective increases of 4.3 times and

6.0 times.

Total loans outstanding decreased over a six-month

period from April 2018, but with JTO becoming a Group

subsidiary and the commencement of joint fi nancing

starting in October 2018, this has turned around to

growth. In addition, using the screening and collection

expertise we have developed in Japan, the quality of

claims has improved signifi cantly as has the non-

performing loan ratio.

Monthly Number of New Loans and Outstanding Amounts through BJI – JTO Joint Financing(Billions of IDR) (Number of new loans)


Steady growth of new fi nancing products for agricultural equipmentIn addition to its main business of fi nancing for used

cars, since July 2018 JTO has concluded an operational

tie-up with dealers handling the world’s leading brands

of agricultural equipment—Kubota, Yanmar, and Kioti (of

South Korea)—and in January 2019 concluded another

operational tie-up with PT RUTAN, which added the Iseki

Strengthening complianceJTO is increasing compliance staffi ng and conducting

training to strengthen discipline in operational manage-

ment. First, a compliance offi cer is being assigned at all

1,500

1,200

900

600

300

0

5

4

3

2

1

02/2019 5/20194/20193/20191/2019

1.921.481.581.601.821.701.931.811.851.992.07

2.552.612.09

12/201811/201810/20189/20188/20187/20186/20185/20184/2018

50

40

30

20

10

0

500

400

300

200

100

02/2019 5/20194/20193/20191/201912/201811/201810/20189/20188/20187/20186/2018

KIOTI-Net

Number of dealers (left axis)

YANMAR-Net KUBOTA-Net RUTAN, etc.

7/2018Began loan partnership

with Kubota


with YANMAR


with KIOTI


with RUTAN (ISEKI & CO.)

Cumulative number of new loans (right axis)

Loans Outstanding through BJI – JTO Joint Financing and Non-Performing Loan Ratio(Billions of IDR) (%)

Expansion of Agricultural Business Network and New Loans at JTO

BJI loan balance (left axis) JTO loan balance (left axis) Non-performing loan ratio (right axis)

brand to the lineup. Because the competitive environ-

ment for selling agricultural equipment loans is better

than for used car loans, we expect this to become a

major product within a relatively short time. The cumula-

tive number of new contracts was 27 for August 2018,

the month after JTO began handling the Kubota and

Yanmar brands, and as of May 2019 this had grown

steadily to 422.

branches to reduce operational risks and strengthen

management. As of May 31, 2019, offi cers had been

assigned at 33 of 42 branches, and hiring and training

are under way to fi ll the shortfall.


10,000

8,000

6,000

4,000

2,000

012/2019 12/2020 12/2021 12/2022 12/2023

536.01,801.0

2,757.0

4,028.0

7,428.0

5,536.0

12/2018(Actual)

Initiatives going forward—for further expansion of business opportunities

Long-term business plan— For a 6.2-times increase vs. end-2018 in total loans outstanding by the end of 2023

JTO is working to increase its acquisition of quality assets

and strengthen its collection operations in the pursuit of

further growth, while at the same time designing unique

products that address diverse customer needs and

strengthening its information technology to increase

operational speed.

Partnership with VOSPAY for database optimizationJTO is optimizing its database

through a tie-up with the

startup company VOSPAY.

This will lead to swifter new

product development and

offering of services.

JTO is forecasting a 13.9-times increase from the end of

2018 in the outstanding amount of new loans—to 7.4

trillion rupiah—by 2023. As shown on Page 18, there

was a 6.0-times increase in the amount of new loans

per month over a thirteen-month period until May 2019.

Comprehensively taking into account the business

environment in Indonesia and the status of the Group’s

Offering new car loans for Tata vehiclesJTO is offering loans for new cars through a tie-up with

Tata Motors.

Offering home improvement loansThrough tie-ups with housing

vendors supported by the

government, JTO is providing

home improvement loans.

Strengthening acquisitions of used car loansJTO operates a used car

exchange, and by providing

used car loans to dealers,

is working to strengthen its

acquisition of loan contracts.

initiatives, we expect that growth of 13.9 times over fi ve

years is an achievable plan.

In addition, we are forecasting a total outstanding loan

balance (JTO’s loans outstanding + joint fi nancing loans

outstanding with BJI) of 7.6 trillion rupiah by the end of

2023, a 6.2-times increase from the end of December

2018 (see page 25).

Planned Annual Loan Balance at JTO(Billions of IDR)


Our credit guarantee business and purchase and collection of receivables business remain solid.


Financial business in Japan maintained high profi t level again in FY03/2019Using the Group’s strengths, the fi nancial business in Japan focuses on credit guarantees for property-backed loans and the purchase and collection of receivables. The credit guarantees for property-based loans business is primarily carried out by Nihon Hoshou Co., Ltd., and Partir Servicer Co., Ltd. is the main entity for the purchase and collection of receivables business. In FY03/2019, the fi nancial business in Japan recorded growth in guarantee commissions in line with an increase in credit guarantee balances, and steady growth in inter-est income from receivables collection operations, resulting in a 17.2% increase from the previous year in operating revenue to 10.7 billion yen and a 2.0% increase in operating profi t to 4.2 billion yen.

Progress made in product diversifi cation in the business of credit guarantees for property-backed loansThe credit guarantee balance as of the end of FY03/2019 grew to 202.4 billion yen, due to increases in con-dominium loans and credit guarantees for overseas property- backed loans. Credit guarantees for overseas property- backed loans and guarantees on reverse mortgage- type loans are being developed as products which will grow over a long period of time in addition to guarantees for condominium loans. The guarantees for condominium loans are being affected by sluggish growth across the industry overall, but because of the long fi nancing period for condomin-ium loans, there is little likelihood of a sudden, drastic decrease in guarantees outstanding. As of March 2019, we had guarantees on roughly 2,000 properties, without a single default. In the business of credit guarantees for overseas property-backed loans, we have expanded our geo-graphic area for loans made by THE SAIKYO BANK, LTD., and in March 2019 we began guarantee operations with Shinhan Bank Japan. Overseas property-backed loans guaranteed by Nihon Hoshou are popular among high net worth individuals in Japan who purchase real estate in Hawaii or the continental United States, because they are able to purchase the real estate using a long-term, yen- denominated loan from a partner bank in Japan instead of having to borrow in dollars at a higher interest rate from a U.S. bank. We are expanding our business of guarantees on reverse mortgage-type loans through operational tie-ups with railway-affi liated real estate companies, railway companies, and shinkin banks. This product is proving popular as a way to utilize empty homes and make it easier for older people to change residences. With regard to guarantees for crowdfunded real estate loan funds, we concluded an operational tie-up with

Financial business in Japan maintained high profi t level again in FY03/2019

Continued to diversify products in the business of credit guarantees for property-backed loans

Trend of growth in principal balances for purchase and collection of receivables business

HIGHLIGHTS


TOPICS

SAMURAI&J PARTNERS Co., Ltd. in March 2019, and in May we released our fi rst project. Having Nihon Hoshou add its guarantee is a new way to increase opportunities to connect promising projects with investors.

Trend of growth in principal balances for purchase and collection of receivables businessCompanies that specialize in the collection of claims are called servicers, and as of June 1, 2019, there were 77 servicer companies that had been established with the approval of the Minister of Justice. Of these, roughly 10

Promoting the resolution of local issues in the Fujisawa / Kamakura areaTo help resolve local issues in the Fujisawa / Kamakura area, in February 2019 Nihon Hoshou concluded a coop-erative agreement with Odakyu Real Estate Co., Ltd. and the Shonan Shinkin Bank. With declining, rapidly aging populations, the number of vacant houses is increasing nationwide to the point of becoming a social issue. There are roughly 486,000

Condominium loans Other guarantees excluding condominium loans

Credit Guarantee Balance at Nihon Hoshou(Billions of yen)

Amount of Receivables in Servicer Business(Billions of yen)

32019

62016

9 12 32017

6 9 12 32018

6 9 12

250

200

150

100

50

03

20176 9 12 3

20183

20196 9 12

57.0

202.4 Off-balanced receivables succeeded from Takefuji to Nihon Hoshou (claimable receivables)

Claimable receivables managed by Partir Servicer

Claimable receivables include some on balance receivables.

Claimable receivables include purchased receivables and entrusted receivables for collection.

Total over 900 billion yen

730.6 729.0 773.8759.2 783.3766.4 783.1772.3 782.8782.8

Highly Experienced Management Team in Financial Business in Japan

are competitors of Partir Servicer in terms of having strength in the collection of unsecured, small-lot claims. However, our strong pricing based on our collection capabilities means we can steadily increase our pur-chases of non-performing claims from major credit card companies and consumer credit companies. As of the end of March 2019, Partir Servicer’s principal balance had grown to 782.8 billion yen, and the total principal balance for the Group’s servicer business overall exceeded 900.0 billion yen.

vacant houses in Kanagawa Prefecture, and the percent-age of vacant houses in the popular sightseeing cities of Fujisawa and Kamakura is close to 12%. To revitalize the area’s economy, the three companies have opened a consultation desk at Odakyu Real Estate’s offi ce, and their fi nance and real estate divisions are working to support startups using vacant houses as their offi ces (property information, fi nancing, etc.) and relocation for older people (reverse mortgages, etc.).

Norio UemuraPresident & Representative DirectorNihon Hoshou Co., Ltd.

A roughly 40-year career in industries including Japan’s nonbank sector

Hideo AsakuraPresident & Representative DirectorPartir Servicer Co., Ltd.

Successively held management positions in Japan’s nonbank sector

Around 110

Around 110

Around 110

Around 130

Around 140

Around 140

Around 140

Around 140

Around 150


Double-digit revenue and profi t growth for fi nancial business in South Korea and Mongolia in FY03/2019In South Korea, we are using the Group’s operational expertise developed in Japan, including screening, collection, and marketing capabilities, to establish a three-pronged management base for savings bank operations, lease operations, and a purchase and collec-tion of receivables business, and to maximize profi t by responding fl exibly and quickly to the market environ-ment. JT Chinae Savings Bank Co., Ltd. and JT Savings Bank Co., Ltd. are the core entities of the fi nancial group in South Korea, with geographical coverage focused in Seoul but covering about 70% of the country, and the combined assets of the two banks would place it among South Korea’s three largest savings banks. Leasing and installment loans are handled by JT Capital Co., Ltd., and TA Asset Management Co., Ltd. is engaged in the pur-chase and collection of receivables. In Mongolia, J Trust Credit NBFI conducts fi nancing operations. In FY03/2019, the fi nancial business in South Korea and Mongolia recorded a 10.6% increase from the previ-ous year in operating revenue, to 39.6 billion yen, on steady growth in interest income with a 37.3% increase in operating profi t, to 4.8 billion yen.

Foundation for developing comprehensive fi nancial services in place, working for continuous growth by improving quality of assetsWith an infrastructure for developing comprehensive fi nancial services in place, we are steadily expanding the scope of fi nancial business in South Korea and Mongolia by building up operating assets despite South Korea’s weak economic environment, and have achieved full-year profi tability for four consecutive years. South Korean fi nancial authorities have been lowering legal maximum lending rates in stages, with reductions to 27.9% from 34.9% in March 2016, and again to 24.0% in February 2018, and in the future the maximum rate is expected to be lowered to roughly 20%. There are also total lending volume limits on household loan disbursement, but loans with medium or low interest rates can be exempted from this, so we are working to increase claims in the low-risk interest rate range, while at the same time increasing fi nancing proposals to large corporations where the effect of these tighter regulations is minimal, to increase the quality of our assets while responding fl exibly to regulatory changes. TA Asset Management is steadily purchasing receiv-ables, and in January 2019 purchased receivables total-ing 74.4 billion won from a credit card company, bringing its principal balance to more than 300.0 billion won as of March 2019.


We aim for continuous profit growth using our strengths as a comprehensive financial group


Double-digit revenue and profi t growth for fi nancial business in South Korea and Mongolia in FY03/2019

Foundation for developing compre-hensive fi nancial services in place, working for continuous growth by improving quality of assets

HIGHLIGHTS


TOPICS

Commencement of fi nancial business in MongoliaIn May 2018, JTRUST ASIA acquired all shares of the Mongolian fi nance company Capital Continent Investment NBFI (current J Trust Credit NBFI), which

Winner of FIRST BRAND AWARD for 4th consecutive yearIn December 2018, JT Chinae Savings Bank won the Grand Prize in the savings bank category for the fourth year in a row at the 2019 FIRST BRAND AWARDS KOREA, sponsored by the Korea Consumers Council. The award selects the industry’s best practice for measuring customer satisfaction in South Korea, and this year, consumers cast a record number of roughly 310,000 votes. Nine fi nalists were chosen in the savings bank category, and JT Chinae Savings Bank received the “highest recognition” for cus-tomer satisfaction. JT Chinae Savings Bank President and Representative Director Yoon Byeng Muk expressed his

Loan Portfolio (in KGAAP Standards)(Billions of won)

Claimable Receivables in TA Asset Management(Billions of won)

*Combined total of JT Chinae Savings Bank, JT Savings Bank and JT CapitalReference rate: 1 won = 0.098 yen

12 32018

32019

632017

6 9 129

320

240

160

80

0

859

32018

6 9 12 32019

32016

96 12 32017

6 9 12

4,000

3,000

2,000

1,000

0

Secured consumer loans

Unsecured corporate loans

Secured corporate loans

Unsecured consumer loans

3,541.6306.8

Highly Experienced Management Team in Financial Business in South Korea

is currently focusing on loans for used cars. In addition, in December 2018, Capital Continent Investment NBFI concluded an agreement with BE FORWARD Co., LTD. for cooperation in automobile loan product sales and funding for used car dealers in Mongolia.

thanks, noting, “This award recognizes the efforts of every individual employee to fulfi l their responsibility to contribute to their local community as a fi nance company. Going forward, we hope to meet your expectations and gain your trust by continuing to provide fi nancial products and services from a customer perspective.”

Takashi WatanabePresident & Representative DirectorTA Asset Management Co., Ltd.

Experienced manager with background at fi nancing companies and a savings bank in Japan and South Korea

Nobuyuki WakeCEOJT Capital Co., Ltd.

Experienced manager with background at fi nancing business in Japan and South Korea

Yoon Byeng MukPresident & Representative DirectorJT Chinae Savings Bank Co., Ltd.

Experienced manager with background in major departments at Bank of Korea and various fi nancial institutions

Choi SungwookPresident & Representative DirectorJT Savings Bank Co., Ltd.

Experienced manager with background at savings banks and fi nance companies


Rebuilding business base for continuous growthRegarding the financial business in Southeast Asia, in Indonesia, which has the largest population in Southeast Asia, we have PT Bank JTrust Indonesia, Tbk. (BJI) carry-ing out banking operations, PT JTRUST INVESTMENTS INDONESIA (JTII) engaged in the purchase and collection of receivables, and PT JTRUST OLYMPINDO MULTI FINANCE (JTO) providing multi-finance primarily for automobiles and agricultural equipment. The Group has made BJI’s revitalization one of its top priorities, and with the establishment of JTII, BJI has been making improvements to its financial position by, for instance, removing non-performing loans from its balance sheet. This revitalization has not proceeded according to plan, however, so as a sweeping measure to bring about a recovery in results and continuous growth, in FY03/2019 BJI processed all of its non- performing loans, including legacy assets from before the Group acquired the bank. For FY03/2019, the financial business in Southeast Asia recorded a 4.1% decline from the previous year in operating revenue to 13.0 billion yen, which included a decrease in interest income from cutbacks in lending by BJI. In addition, with the increase in expenses related to non-performing assets, including BJI’s processing of non-performing loans, the business recorded an operating loss of 17.7 billion yen (compared with a 1.5 billion yen operating profit in the previous year).

Working toward growth with three-pronged business development in Indonesia as wellIn October 2018, the Group acquired a 60% sharehold-ing in the multi-finance company PT. OLYMPINDO MULTI FINANCE (current JTO). With this acquisition, Indonesia follows South Korea in having a three-pronged business group comprising a bank, a servicer, and a finance com-pany, creating a structure that is able to address diverse needs in a wide range of areas. Working with BJI, JTO will be able to make its fund procurement more stable and increase its capital efficiency. Going forward, it will develop effective marketing activities and use the Group network to provide financial services with high added value and strengthen its business base. To increase the quality of assets, BJI’s new lending is focusing on growth through joint financing with JTO in a plan to contribute to BJI’s profit. In addition, JTO is expected to achieve an operating profit in FY12/2020. We have also built a platform for an earnings recovery in servicer operations by emphasizing the collection of non-performing loans transferred to JTII from BJI. Our

24 J Trust Co., Ltd. Annual Report 2019J Trust Co., Ltd. Annual Report 2019

We have processed non- performing loans in a lump sum, including legacy assets from before acquisition, to create a framework for steady growth.


Rebuilding business base for continuous growth

Working toward growth with three-pronged business development in Indonesia as well

HIGHLIGHTS


TOPICS

forecast for future cash flow from purchased receivables is based on historical collection results. We therefore

Development of an educational loan for Indonesian students who want to study and work in JapanBJI, together with Sawayaka Club Co., Ltd. and The Hiroshima Bank Ltd., have jointly developed an educa-tional loan for Indonesian students who want to work or acquire technical training in Japan, and began selling the product in Indonesia in January 2019. To date there have been no loan products in Indonesia for individuals to support the expenses required to obtain advanced Japanese language proficiency, and because

Highly Experienced Management Team in Financial Business in Southeast Asia

Loan Balance and Non-performing Loan Ratio at BJI(Billions of IDR) (%)

32016

6 9 12 32017

6 32018

69 12 32019

9 1262015

9 12

16,000

12,000

8,000

4,000

0

16

12

8

4

0

12/2018 12/2019 12/2020 12/2021 12/2022 12/2023

7,656.0

2,011.01,237.0

4,356.0

3,040.0

5,824.0

250

200

150

100

50

0

10,000

8,000

6,000

4,000

2,000

0

Mainly receivables acquired from PT Bank Mutiara Tbk. and others (left axis)

Loan balance through BJI-JTO joint financing (left axis)

Reference rate: 1 rupiah = 0.0078 yenNon-performing loan ratio: Percentage of loan balance delinquent for 90 days or more*Loan balance since actual management structure started

Loans screened by BJI under the current management* (left axis)

Loan balance at JTO (left axis)

8,414.2

5.62%

Planned Operating Profit and Loan Balance at JTO(Billions of IDR)

244.0

believe that collecting more than the forecast cash flow will boost earnings.

Japanese immigration law requires that non-Japanese persons wishing to work or receive technical training be proficient in Japanese, the difficulty that economically dis-advantaged students face in finding opportunities to work or study in Japan has been a social issue. This educa-tional loan is conditional on the student enrolling in a lan-guage school operated by Sawayaka Club in Indonesia, and by providing a low-interest-rate loan product to exceptional, motivated students, we are contributing to both countries’ development.

Non-performing loan ratio (net) (right axis)

Operating profit (right axis)

Nobuiku ChibaExecutive Officer in charge of Financial Business in Southeast Asia

J Trust Representative Senior Managing DirectorHas more than 15 years of experience in management of banks and financial companies in Japan and overseas

Nobiru AdachiBJI President Commissioner

J Trust Senior Managing Director, Executive OfficerHas 26 years of experience in the Ministry of Finance in Japan

Ritsuo FukadaiBJI President Director

Experienced manager with background at financing companies in Southeast Asia

Kazuyuki MatsuokaJTO President Director

Experienced manager with background at financing company and savings bank in Japan and South Korea

Yoshihiko KusubaeJTII President Director

Collection specialist with more than 25 years of experience in the Japanese, South Korean, and Indonesian financial industries


We are working to enhance the Group’s corporate value through businesses including general entertainment, real estate, and investment.

Non-fi nancial Business

General entertainment businessDuring FY03/2019, the KeyHolder Group began producing live

entertainment and television programs, and also took over the

business relating to the “idol” group SKE48.

As of August 1, 2019, the KeyHolder Group’s operations are as

follows: allfuz, Inc., which handled the businesses of advertising

planning and development and live entertainment; UNITED

PRODUCTIONS, Inc., which is engaged in video production;

FA Project, Inc., which plans, develops, and produces enter-

tainment content; and ZEST, Inc., which works in the performing

arts production business.

Real estate businessKeynote operates a real estate business, and KeyHolder oper-

ates a real estate asset business. In real estate business, we are

restructuring our business portfolio for greater effi ciency. In the real

estate asset business, we focus on increasing earnings through

acquisitions of new properties.

Investment businessJTRUST ASIA operates an investment business and provides

management support for its investment recipients. The company

recorded an operating loss for FY03/2019 due to the provision

which it booked for the lending to Group Lease PCL, with which it

is currently in litigation. Funds collected in the future, however, will

be recorded as profi t, and we are forecasting a recovery in earnings

as funds are collected going forward.

Other businessesJ Trust System carries out development, operations, and adminis-

tration of the Group’s IT systems. Keynote operates a commercial

facility construction business.

http://www.keyholder.co.jp/en/©NHK (Japan Broadcasting Corporation)

©Fuji Television Network, Inc.©2018 Kohaku Production Committee

https://www.key-note.jp/(Japanese only)

http://www.jtrustasia.com/

https://www.jtrustsystem.co.jp/(Japanese only)


Sustainability Highlights

Corporate Governance ....................................28

Risk Management ............................................32

Messages from Outside Executives ................33

Directors and Audit & Supervisory Board Members ...............................................34

The J Trust Group’s CSR Activities ..................36

27J Trust Co., Ltd. Annual Report 2019 27

Corporate Governance

The J Trust Group pledges to work together with the community as it contributes to the development of a sustain-

able future. Toward this end, we will make every effort to maximize our corporate value and earn the trust, credibility

and support of our customers and shareholders. As part of this commitment, we have strengthened our corporate

governance structure to ensure effective internal controls and audit procedures and to facilitate swift decision mak-

ing, as we strive to conduct business in compliance with ethical standards, laws and regulations. To realize these

goals, we have established a Code of Ethics, set forth by the following fi ve principles, to further ensure timely

decision making and sound and transparent management practices.

Aiming to Become the Most Trusted Company in Japan

Code of Ethics

1. The Company shall acknowledge its social responsibility and public mission, conduct sound business operations as a listed company, ensure transparency in its business activities, and aim to grow into a trusted company.

2. Not only shall the Company comply with the letter of the law, it shall embrace the spirit in which it was written in its efforts to achieve a fair and more affl uent society for future generations.

3. The Company shall respect the rights of all stakeholders, contribute to the growth and development of society and economy, and honor and respect the differences in cultures and customs.

4. When faced with a confl ict of interest, the Company shall choose an ethical solution without fail and stand resolutely against any and all criminal elements.

5. When faced with a diffi cult ethical decision, the Company shall resolve to ensure a satisfactory outcome for all parties involved in the matter.

Corporate Governance Structure

Board of Directors

The Board of Directors is composed of twelve members (four of whom are outside directors, as of June 27, 2019) and is led by the Representative Director, President & Chief Executive Offi cer. The Board holds regular meetings once a month as well as ad hoc meetings, as needed, to exam-ine the necessity and validity of important management issues and individual projects, and deliberate and make decisions in the context of compliance and independence as a listed company.

Audit & Supervisory Board

The Audit & Supervisory Board is composed of three members (two of whom are outside Audit & Supervisory Board Members, as of June 27, 2019). In cooperation with the Board of Directors, Audit & Supervisory Board Members play a role in supervising the Company and audit the execution of duties by Directors. While the Group gives consideration to stakeholders’ interests, Audit & Supervisory Board Members work in cooperation with these stakeholders, to realize sound and sustainable growth and creation of corporate value over the medium and long term, with the aim of establishing a solid

corporate governance structure that can be trusted by society. Also, Audit & Supervisory Board Members may attend Committee Meetings, etc., at any time to gain an understanding of the decision-making process and status of execution, in addition to the Board of Directors’ meet-ings and Management Meeting of each Group company, and receive direct explanations from the Group’s execu-tives and employees as necessary. The Audit & Supervisory Board is led by an Audit & Supervisory Board Member who is appointed in accor-dance with the Audit & Supervisory Board regulations. The Audit & Supervisory Board holds regular meetings once a month as well as ad hoc meetings, as needed, to receive reports about the status of execution of each member’s duties, share information, and work to ensure the effi ciency of the audit.

Management Meeting

The Management Meeting is composed of the Company’s executives (full-time Directors and full-time Audit & Supervisory Board Members), executives from each Group company and other employees and executives, and is led by the Company’s Representative Director, President & Chief Executive Offi cer. At regularly scheduled Management Meetings held once a month


Board of Directors

Shareholders’ Meeting

Accounting Auditors

Audit & Supervisory

Board

Legal Counsel

Head Offi ce, Branches & Subsidiaries

Compliance & Risk Management Committee

Compliance Supervisor

Corporate Ethics Consultation Desk

Management Meeting

President

Internal Audit Division

and ad hoc meetings held as needed, the Group takes appropriate action by deliberating and reporting on the Group’s managerial policy, important matters in operational management as well as execution policy.

In-house Committees

Cross-organizational in-house committees of various kinds exist to strengthen the Group’s internal control and risk management functions.

Compliance & Risk Management Committee

The Compliance & Risk Management Committee is com-posed of executives and employees (such as Ryuichi Atsuta, Taiji Hitachi, Yukihiro Nishikawa, Yoshihide Iimori, Fumio Iguchi, Norio Igarashi (an outside director) and Ryuji Mizuta (an outside director)), nominated by the committee chairman, the Company’s Representative Director, President & Chief Executive Offi cer. This com-mittee, which is held once per quarter in principle, strives for thorough compliance and risk management by deter-mining policies and measures related to compliance and risk management in the management and operations of the Group as well as recommending corrections and improvements when a violation of laws and regulations or company rules occurs.

Information System Committee

The Information System Committee, in principle, holds a monthly meeting for the purpose of enhancing the IT system based on its Information System Basic Policy, developing a company-wide system to manage informa-tion security, and improving the risk assessment structure and information security management structure.

Outside Directors and Outside Audit &

Supervisory Board Members

The Company has appointed four outside directors and two outside Audit & Supervisory Board Members. Norio Igarashi, Ryuji Mizuta and Masami Ishizaka, outside directors, and Takaaki Kojima, an outside Audit & Supervisory Board Member, have no personal, capital or business relationship with the Group. Masanori Kaneko, an outside director, is an advisor of THE SAIKYO BANK, LTD. (hereinafter, “SAIKYO BANK”), and a trading relationship exists between the Group and SAIKYO BANK in businesses including borrowing of funds and fi nancial guarantees. In addition, Mr. Kaneko is an Audit & Supervisory Board Member of SAIKYO LEASING CORPORATION, and a capital relationship exists, in which SAIKYO LEASING CORPORATION holds 2,890,000 shares of the Company’s common stock.

Corporate Governance Structure (As of June 27, 2019)


Hideki Yamane, an outside Audit & Supervisory Board Member, was employed at SAIKYO BANK, and a trading relationship exists between the Group and SAIKYO BANK in businesses including borrowing of funds and fi nancial guarantees. The Company benefi ts from their professional knowledge and useful suggestions and opinions on the management of the Company from an objective perspec-tive as outside experts. Their responsibility includes attendance at meetings, both ordinary and extraordinary, of the Board of Directors and the Audit & Supervisory Board, to consult with directors and employees for clarifi cation on various issues, when necessary. Although the Company has not explicitly defi ned policy or criteria for independence to appoint outside Audit & Supervisory Board Members or outside directors,

judgment on appointment is made on the assumption that an adequate level of independence is ensured for execution of duties as outside experts independent from the Company’s executives, taking career history and relationship with the Company into consideration. Outside directors (Norio Igarashi, Ryuji Mizuta, Masanori Kaneko and Masami Ishizaka) are appointed as independent directors who have no confl icts of interest with general shareholders. Although the Company has no dedicated staff to assist the outside executives, the General Affairs Department is in charge of the scheduling and notifi cation of the Board of Directors’ meetings. The Department also provides advance explanation of the meetings as needed so that all concerned parties understand their purpose.

Corporate Governance

Summary of results of the evaluation of the

effectiveness of the Board of Directors

To further improve the effectiveness of the Board of Directors, the Company administers an anonymous questionnaire to all directors including outside directors, in which each director evaluates the effectiveness of the Board of Directors based on the director’s assessment. As a result, it was determined that the Board of Directors is appropriately performing its role and functioning effectively. Since the Group consists of companies of diverse business types, the understanding of outside executives will be taken into consideration when doing business. Furthermore, at the end of each term, the Representative Director, President & Chief Executive Offi cer implements a director evaluation by employees in

order to obtain broad input and evaluate the effectiveness of the Board of Directors as a whole. Based on the results of the evaluation, matters recognized as issues will be focused on, and we will work toward improving the effectiveness of the Board of Directors and the management system.

Internal Audit and Company Audit

The Company has an internal audit division to conduct internal audits to detect regulatory violations, potential risks and specifi c internal audits tailored to the business. The results are reported to the president as audit reports. Department heads are directly instructed to take correc-tive action for the issues identifi ed and they report the progress through an audit result’s improvement report.

Title Name Main activities Attendance at meetings

Director Norio Igarashi He expressed opinions and offered suggestions based on his specialist knowledge and experience as an attorney.

He attended 18 out of 21 Board of Directors’ meetings (attendance rate: 85.7%).

Director Ryuji Mizuta He expressed opinions and offered suggestions based on his specialist knowledge and experience at the National Police Agency.


Director Masanori Kaneko He expressed opinions and offered suggestions based on his abundant knowledge and experience as an executive at fi nancial institutions.


Director Masami Ishizaka He expressed opinions and offered suggestions based on his abundant knowledge and experience at the Ministry of Finance and as an executive at listed companies.

He attended 15 out of 15 Board of Directors’ meetings (attendance rate: 100%).**Calculated after his appointment in June 2018

Audit & Supervisory Board Member

Hideki Yamane He expressed opinions and offered suggestions based on his abundant knowledge and experience as an executive at fi nancial institutions.

He attended 20 out of 21 Board of Directors’ meetings (attendance rate: 95.2%) and 14 out of 14 Audit & Supervisory Board meetings (attendance rate: 100%).

Audit & Supervisory Board Member

Takaaki Kojima He expressed opinions and offered suggestions based on his specialist knowledge and experience as a for-mer member of the Ministry of Foreign Affairs, includ-ing ambassador extraordinary and plenipotentiary and other important positions.

He attended 20 out of 21 Board of Directors’ meetings (attendance rate: 95.2%) and 13 out of 14 Audit & Supervisory Board meetings (attendance rate: 92.9%).

Main Activities of Outside Executives for FY03/2019


Classification of executivesTotal amount of

compensation, etc. (Millions of yen)

Total amount of compensation, etc., by category(Millions of yen)

Number of corresponding

executives Base salary Stock options Bonus Retirement benefits

Directors (excluding outside directors) 246 246 — — — 11

Audit & Supervisory Board Members(excluding outside Audit & Supervisory Board Members)

20 20 — — — 2

Outside executives 48 48 — — — 6Total 315 315 — — — 19

Notes: 1. Amount of compensation of directors does not include compensation as employees (with regard to directors who concurrently serve as employees).

2. Amount of compensation of directors includes compensation of one who retired on September 20, 2018.

Compensation for Executives (FY03/2019)Total amount of compensation, etc., per classification of executives, total amount of compensation, etc., by classification, and number of executives for such compensation, etc.

Furthermore, internal audit reports are circulated among relevant directors and department heads to help improve the performance of the corresponding depart-ment. In addition, a Corporate Ethics Consultation Desk has been established within the internal audit divi-sion as a Group contact point for internal reporting, to prevent in advance any acts that may create unfavorable circumstances for the Company. The internal audit division monitors the results of sub-sidiaries’ internal audits to ensure the sound operation of subsidiaries and, if necessary, offers advice and propos-als, etc., to the subsidiaries’ internal audit division. In addition, a structure is in place in which the internal audit division conducts direct audits of subsidiaries within legal boundaries to determine whether inappropriate conduct or illegal acts have been committed, and in cases where they are identified, for the internal audit division to issue an improvement order to address the matter. The Company has an Audit & Supervisory Board system, which is composed of three members (two of whom are outside members). The Audit & Supervisory Board meeting is held once a month to conduct legal audits, mainly by full-time members, to examine whether each director’s execution of duties is based on laws and regulations as well as on the Company’s Articles of Incorporation. Also, in close cooperation with the internal audit division, the Audit & Supervisory Board ascertains whether employees’ execution of duties is compliant with laws and regulations. The Company’s accounting auditor and the Company’s Audit & Supervisory Board Members discuss and exchange views whenever necessary to gather informa-tion and to further develop an enhanced auditing system. Outside directors gather necessary information and collaborate with each other through attending Compliance & Risk Management Committee meetings

and discussing and exchanging views with Audit & Supervisory Board Members. Outside Audit & Supervisory Board Members receive internal audit reports from the internal audit division and also discuss and exchange opinions with the Company’s accounting audi-tor to gather information. Outside Audit & Supervisory Board Members, the internal audit division and the Company’s accounting auditor collaborate with each other through these means.

Accounting Audit The accounting audit by Grant Thornton Taiyo LLC is based on regulations under the Companies Act and Financial Instruments and Exchange Act. There is no conflict of interest requiring mention as per the Certified Public Accountant Act between the Company, Grant Thornton Taiyo LLC, and managing members with regard to the execution of duties. The names of certified public accountants who conducted the audit and the composi-tion of assistants involved in the accounting audit for FY03/2019 are as follows:

Name of certified public accountant who conducted the Company’s accounting audit

Audit corporation to which the accountant belongs

Years of continuous audit

Designated Partner, Managing MemberRyouichi Komatsu

Grant Thornton Taiyo LLC

Three years

Designated Partner, Managing MemberTakeshi Iwasaki


One year

Designated Partner, Managing MemberTakuya Ishigami


Three years

Note: Assistants involved in the accounting audit included 12 certified public accountants, 5 persons who have passed the certified public accountant examination, and 17 others.


Risk Management

Overview

The J Trust Group has established a set of guidelines, the Risk Management Regulations, for managing risk across the entire Group. Under these guidelines, the Group takes appropriate measures to manage risk effec-tively, and further, to minimize the effects of actualized risks on the Group and to reduce any harm that may result, while ensuring that business operations remain uninterrupted and the integrity of the organization is maintained. In addition, the Group has published a Risk Management Manual, which, along with the Risk Management Regulations, is stored in a database to be consulted by both executives and employees. The basic policy of our risk management is to have systems and structures in place so that (1) each depart-ment at all Group companies manages risks proactively and responsibly; (2) identifying, understanding and monitoring of risks beyond the management capability of each Group company are primarily carried out by the J Trust Compliance & Risk Management Committee and the Group company’s risk management staff; and (3) centralized Group risk management is possible, with appropriate involvement of management and the risk management secretariat.

Risk Management System

The Group, regarding ensuring compliance as the premise of risk management in all respects, has the Compliance & Risk Management Committee to realize a better internal compliance structure. This Committee sets

Strengthening Compliance to Mitigate Risk

internal regulations for compliance-related matters to ensure high-level compliance awareness and, by collecting information on the risk realized through daily activities and analyzing results, considers/discusses proper responses to any signifi cant risk information. Also, the Group makes every effort to prevent/mitigate risk through Monthly Reporting, which allows employees to offer opinions/proposals to the president, and the Corporate Ethics Consultation Desk, which receives consultations/reports on corporate ethics from executives and employees. Furthermore, the Group promotes the development of internal structures to prevent leakage of personal infor-mation by stipulating the Personal Information Protection Policy on how to handle/manage personal infor mation, following the implementation of the Act on the Protection of Personal Information.

Collection, Analysis, and Evaluation of Risk

The J Trust Group collects information concerning risks at each department of all Group companies in accor-dance with the Risk Management Manual. These risks are classifi ed into six categories* by department risk managers, and the department’s risk levels are judged based on severity (eight levels) in case of occurrence and frequency (eight levels). According to the judged risk level, the Group considers how to respond to the risk by determining an order of priorities for its response.

* 1. Credit, Market & Liquidity Risk, 2. Operational & Business Risk, 3. System Risk, 4. Management, Legal & Compliance Risk, 5. Information & Reputational Risk, 6. Disaster & Environmental Risk

Risk level Defi nition

Level A High priority risk

The biggest risk in which severity is large and frequency is high, and excessive losses and damages are expected in case of occurrence

Level B Priority risk

A major risk in which severity is large in case of occurrence, but frequency is not high.

Level C Frequent risk

A risk in which severity is relatively small by itself, but frequency is high, and severity becomes large due to repeated occurrences

Level D Ordinary risk

A risk in which severity is small and frequency is low, and there is little infl uence on loss and damage; however, it should be monitored in the ordinary course of business

Risk Level and Defi nition


The J Trust Group is undergoing dramatic growth in business scope and employee numbers due to its powerful drive to expand its business domains. In recent years, it has also increased the pace of overseas corporate acquisitions and investments. These factors underscore the increasing need for transparent group-wide compliance and governance, as well as risk management. I have many years of business and auditing experience in fi nancial institutions. As an outside Audit & Supervisory Board Member in this context, I pay particular attention to monitoring the operating environments and associated risks specifi c to the Group’s overseas businesses, in addition to offering advice on information gathering and analysis, and appropriate risk management. A major responsibility of an outside Audit & Supervisory Board Member is to monitor the decision-making process to ensure fair and transparent operations and thus maximize returns to general shareholders and the company itself. From the perspective of contributing to sound, sustained growth, and advancement, Audit & Supervisory Board Members stand united with the top management team, including outside directors, and share the same responsibilities. In accordance with the Corporate Governance Code, J Trust appointed four outside directors, and I believe this has further strengthened the Group’s corporate governance structure. Furthermore, outside directors are working even more closely with Audit & Supervisory Board members to hold monthly meetings and put in place the most appropriate management for the Group’s global expan-sion. We are also assisting with the establishment and improvement of the Group’s corporate governance and compliance structures.

I contribute to the healthy development of the J Trust Group as a “fresh, outside set of eyes”.

I will help build compliance and governance systems suited to global business advancement.

J Trust is engaged in proactive investment, always taking a forward-looking, multidimensional view that is not restricted by preconceived concepts or by country. This is combined with a process of thorough investigation of the target company’s fi nances and the legal structure and geopolitical risk of the country in which it operates, always utilizing the expertise of relevant specialists. Over the past few years in particular, there has been a rapid increase in overseas investment opportunities we screen or judge. I believe this makes the role of J Trust’s four outside directors, with their knowledge of and experience in fi nance, public safety, public administration, and law even much more important. The role expected of outside directors is to be a “fresh, outside set of eyes”. Since becoming an outside director in June 2014, I have striven to contribute to the Company’s healthy management by providing opinions to ensure that there are no concerns of confl ict of interest in decisions made by the Board of Directors, that decisions are fair, impartial, and not prejudiced, and that they are aligned with the interests of shareholders. Going forward, I will fulfi ll my duties as an independent director by helping the J Trust Group develop through healthy business activities. To realize this, as a legal specialist, I will ensure the J Trust Group strictly complies with laws as a member of society and strengthens corporate governance.

Norio IgarashiOutside Director

Messages from Outside Executives

Hideki YamaneFull-Time Outside Audit & Supervisory Board Member


Nobuyoshi FujisawaRepresentative Director, President & Chief Executive Officer

Jun 2008 Representative Director & Chairman, J Trust Co., Ltd.

Jun 2011 President & CEO, J Trust Co., Ltd.Oct 2013 Managing Director & CEO, JTRUST

ASIA PTE. LTD. [incumbent]Mar 2015 Director & Chairman, JT Capital Co.,

Ltd. [incumbent]Jun 2015 Director, ADORES, Inc. (currently

KeyHolder, Inc.) [incumbent]

Nobuiku ChibaRepresentative Director, Senior Managing Executive Officer in charge of Financial Business in Southeast Asia

Aug 2011 Representative Director & Chairman, KC Card Co., Ltd. (currently J TRUST Card Co., Ltd.)

Aug 2012 Director, Chinae Co., Ltd. (currently JT Chinae Savings Bank Co., Ltd.)

Mar 2015 Representative Director, JT Capital Co., Ltd.

Sep 2018 President Commissioner, PT JTRUST INVESTMENTS INDONESIA [incumbent]

Oct 2018 President Commissioner, PT OLYMPINDO MULTI FINANCE (currently PT JTRUST OLYMPINDO MULTI FINANCE) [incumbent]

Mar 2019 Commissioner, PT Bank JTrust Indonesia Tbk. [incumbent]

Nobiru AdachiSenior Managing Director, Executive Officer in charge of promotion of global banking business and overseas legal affairs

Apr 1980 Joined Ministry of FinanceJul 1995 Associate Professor, Faculty of Law,

The University of TokyoJun 2005 Director-General, Hakodate CustomsJun 2013 Managing Director, J Trust Co., Ltd.Jun 2014 Representative Director and Senior

Managing Director in charge of Corporate Management Department, J Trust Co., Ltd.

Dec 2014 President Commissioner, PT Bank Mutiara Tbk. (currently PT Bank JTrust Indonesia Tbk.) [incumbent]

Mar 2018 Director, JTRUST ASIA PTE. LTD. [incumbent]

Directors and Audit & Supervisory Board MembersAs of June 26, 2019

Ryuichi AtsutaManaging Director, Executive Officer, General Manager of Finance Department

Apr 1987 Joined The Industrial Bank of Japan, Limited. (currently, Mizuho Financial Group, Inc.)

Apr 2001 Managing Director, Head of FX and Treasury, Bank of America N.A., Tokyo Branch

Jun 2010 Head of Trading, The Hongkong and Shanghai Banking Corporation Limited, Tokyo Branch

Sep 2015 Executive Officer, Corporate Planning Department in charge of new business, J Trust Co., Ltd.

Jun 2017 Director, Executive Officer, General Manager of Finance Department, J Trust Co., Ltd.

Jun 2019 Director, Nihon Hoshou Co., Ltd. [incumbent]

Yoshihide IimoriDirector, Executive Officer, Head of Audit Office

Apr 1980 Joined Kokunai Shinpan Co., Ltd. (currently J TRUST Card Co., Ltd.)

Jun 2006 Executive Officer, Rakuten KC Co., Ltd. (currently J TRUST Card Co., Ltd.)

Aug 2011 Managing Director, KC Card Co., Ltd. (currently J TRUST Card Co., Ltd.)

Feb 2015 General Manager of Corporate Management Department, J Trust Co., Ltd.

Jun 2015 President & CEO, J TRUST Card Co., Ltd.

Jun 2016 Director, Executive Officer, General Manager of Corporate Management Department, J Trust Co., Ltd.

Jun 2018 Director, Nihon Hoshou Co., Ltd.Dec 2018 Director, Executive Officer, General

Manager of General Affairs Department, J Trust Co., Ltd.

Fumio IguchiDirector, Executive Officer, General Manager of Internal Control Department

Apr 1978 Joined The Mitsui Bank, Ltd. (currently, Sumitomo Mitsui Banking Corporation)

Nov 2015 Head of Internal Control & Audit Office, J Trust Co., Ltd.

Jun 2017 Full-Time Audit & Supervisory Board Member, J Trust Co., Ltd.

Audit & Supervisory Board Member, J TRUST Card Co., Ltd.

Taiji HitachiDirector, Executive Officer in charge of General Accounting Department

Apr 1998 Joined Asahi & Co. (currently KPMG AZSA LLC)

Apr 2001 Registered as Certified Public Accountant

Oct 2011 General Manager of Accounting Department, J Trust Co., Ltd.

Jun 2013 Director, General Manager of Accounting & Planning Department, J Trust Co., Ltd.

Jun 2016 Director, Executive Officer, General Manager of General Accounting Department, J Trust Co., Ltd.

Yukihiro NishikawaDirector, Executive Officer, General Manager of Corporate Planning Department and General Manager of General Affairs Department

Apr 1995 Joined CREDIA Co., Ltd.Jun 2011 Director, General Manager of Legal

Department, General Manager of Personnel Department, and in charge of General Affairs Department, J Trust Co., Ltd.

Jun 2013 Representative Director, NL Value Capital Co., Ltd. [incumbent]

Jul 2015 Director, Nihon Hoshou Co., Ltd.Jun 2016 Director, Executive Officer, General

Manager of Corporate Planning Department and in charge of Legal Division, J Trust Co., Ltd.

Jul 2018 Director, Capital Continent Investment NBFI (currently J TRUST CREDIT NBFI) [incumbent]


Norio IgarashiDirector Outside

Apr 1966 Joined Tokyo District Public Prosecutors Office as a prosecutor

Jan 1991 Chief, Special Investigation Department, Tokyo District Public Prosecutors Office

Jul 1993 Prosecutor, Supreme Public Prosecutors Office

Jul 1998 Chief Public Prosecutor of the Yokohama District Public Prosecutors Office

May 2010 Visiting Attorney, Yamada Ozaki Law Office [incumbent]

Ryuji MizutaDirector Outside

Apr 1974 Joined National Police AgencyJul 1994 Miyazaki Prefectural Police ChiefMar 2006 Director-General of Kyushu

Regional Police BureauJul 2012 Advisor, Sumitomo Life Insurance

CompanyJul 2017 Advisor of OHBA CO., LTD.

[incumbent]

Masanori KanekoDirector Outside

Apr 1978 Joined Yamaguchi Sogo Bank, Ltd. (currently THE SAIKYO BANK, LTD.)

Jun 2011 Full-Time Audit & Supervisory Board Member, THE SAIKYO BANK, LTD.

Jun 2015 Advisor, THE SAIKYO BANK, LTD. [incumbent]

Jun 2017 Audit & Supervisory Board Member, SAIKYO LEASING CORPORATION [incumbent]

Audit & Supervisory Board Member, Hoken Eye Saikyo K.K. [incumbent]

Masami Ishizaka Director Outside

Apr 1963 Joined the Ministry of FinanceJun 1993 Director-General, Financial BureauJul 1995 Administrative Vice Minister,

Environment AgencyAug 2016 Advisor, Okura Zaimu Kyokai

[incumbent]Jul 2017 Advisor, J Trust Co., Ltd.

Takaaki KojimaAudit & Supervisory Board Member Outside

Apr 1971 Joined Ministry of Foreign AffairsJul 2004 Ambassador Extraordinary and

Plenipotentiary of Japan to Republic of Singapore

Sep 2007 Ambassador Extraordinary and Plenipotentiary of Japan to Australia

Jul 2010 Ambassador in charge of International Counter-Terrorism Cooperation, Ministry of Foreign Affairs

Apr 2013 Advisor, Libera Corporation [incumbent]

Apr 2015 Adjunct Professor, National University of Singapore [incumbent]

Hideki YamaneFull-Time Audit & Supervisory Board Member Outside

Apr 1976 Joined Yamaguchi Sogo Bank, Ltd. (currently THE SAIKYO BANK, LTD.)

Apr 2005 Head of Shimonoseki Branch and Executive Manager of Shimonoseki area, THE SAIKYO BANK, LTD.

Jun 2007 Full-Time Auditor, THE SAIKYO BANK, LTD.

Jun 2011 Advisor, THE SAIKYO BANK, LTD. (Compliance Control Dept.)

Jun 2013 Audit & Supervisory Board Member, Partir Servicer Co., Ltd. [incumbent]

Masato InoueAudit & Supervisory Board Member

Apr 1973 Joined Nomura Securities Co., Ltd.Jun 1996 Director, Tokai International Securities

Co., Ltd. (currently Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.)

Jul 2007 Established Inoue Office [incumbent]Jun 2011 Outside Director of Nihon Hoshou

Co., Ltd.


CustomersWe work on product development from the customer’s point of view and on providing top quality services.

We work proactively for environmental protection.Environment

EmployeesWe value the diversity of our employees and work towards creating a comfortable workplace.

ShareholdersInvestors

We build relationships of trust through timely and fair information disclosures.

Social Welfare We are helping to make normalization* a reality.

Local CommunitiesWe contribute to making local communities active through the development of sports.

*The concept of disabled and non-disabled people sharing their social lives without discrimination

To ensure continued growth as a company trusted by society, the J Trust

Group places great importance on its relationships with stakeholders, including

customers, shareholders, employees, business partners, and local communi-

ties. This requires management decision making that values our relationships

with these stakeholders and takes into account the impact of our actions on

them. We are also conscious of the global environment, and proactively partici-

pate in social contribution activities as members of society. We consider it

important to build relationships of trust with customers and local communities.

All of us at J Trust, beginning with myself, carry out our work with a sense of

vitality, to create a corporate group that contributes to the development of cus-

tomers and local communities and is highly regarded by shareholders and

other investors. I believe that being a corporate group that is trusted by society

means that the Group is making a contribution toward the creation of a better

world for future generations.

Nobuyoshi FujisawaRepresentative Director, President & Chief Executive Officer

We are fulfilling our social responsibility as a company, to create a better world for future generations.

The J Trust Group’s CSR Activities

Our CSR approach

By building sound relationships with all stakeholders, we aim to become a corporate group that is trusted by society.

Structure of the J Trust Group’s CSR


Earnings presentation

Bank JTrust Indonesia branch offi ce in Indonesia

Get IR information fast with the J Trust IR app!

Our app delivers the latest IR information including J Trust’s latest news and fi nancial results.

See our offi cial Facebook page!Our Facebook page delivers a variety of informa-tion about Group companies not only in Japan, but also in places such as South Korea and Southeast Asia.

ISMS accreditedJ Trust System Co., Ltd. (Tokyo Head Offi ce and Osaka branch offi ce)

Privacy Mark accreditedPartir Servicer Co., Ltd.

The J Trust Group is committed to developing products from the customer’s perspective and services which are superior to those of our competitors so that customers can rely on our services such as savings accounts and loans to plan for the future.

Enhancing service qualityThe J Trust Group strives to provide quality services by acquiring fi nance-related expertise and enhancing the level of customer services, as part of the business improvement projects led by the President. We have established a structure to provide consultation for customers. Employees qualifi ed as experts and holders of national qualifi cations are available at sales offi ces and call centers, which are the points of contact with our customers. To improve our services, we ensure that our business conduct refl ects the requests of our customers, whether it be through personal interaction with them or from their views collected in questionnaires.

Enhancing information security The J Trust Group is working to enhance information security based on its Basic Policy on Information Security. Group companies that handle large quantities of personal information obtain ISMS and Privacy Mark certifi cation, and strive to improve the level of information security.

The J Trust Group believes that an appropriate return of profi ts to sharehold-ers is one of our most important management issues, and our basic policy is to continue stable return of profi ts while considering the overall future management environment and industry trends.

Communication with shareholders and investorsThe J Trust Group is supported by more than 16,000 shareholders (as of March 31, 2019). We hold earnings presentations for institutional investors on a continuous basis, and make these briefi ngs as well as shareholders’ meetings available as an on-demand streaming video service via the Internet. We also offer an e-mail service for distributing IR-related information.

Enhanced website usabilityWe strive to enhance the usability of our website with features including a screen reader function for users with visual impairments, English- and Korean-language pages, and version of the site accessible by smartphone.

Engaging with customers

Engaging with all our shareholders and investors


The J Trust Group continues to conduct activities supporting the realization of normalization and supporting the socially vulnerable such as single mothers, orphans, homeless, and elderly people living alone.

Ramadan fast-breaking feast with orphans (Indonesia)Bank JTrust Indonesia (BJI) has continued its activities to support orphan-ages. On May 24, 2019, BJI made donations to the Al-Fajr Foundation and held a Ramadan fast-breaking feast (“Iftar”) for the fi fth time. Fifty orphans participated in the event, in which they played various games. A workshop on fi nancial instruments was also held.

Spring Sports Day with local children (South Korea)The J Trust Group’s four South Korean companies (JT Chinae Savings Bank, JT Savings Bank, JT Capital, and TA Asset Management) donate to the local General Social Welfare Center and hold Sports Days for children. The sixth Sports Day was held on May 11, 2019 in a suburb of Seoul. 110 local children together with 240 executives and employees of the J Trust Group participated and enjoyed various events.

Donation of sales from LINE character stamps (South Korea)The J Trust Group’s four South Korean companies donated all sales from LINE character stamps to charity. In 2019, donations were made to promote the “Animal Assisted Therapy Program” conducted by Seoul’s Animal Therapy Association. This program, which is geared toward elementary school students with hearing impairments, aims to foster communication skills with friends by conducting various kinds of therapy through pets such as dogs.

Support for normalization (Japan)J Trust supports activities of the Japan Blind Marathon Association (JBMA). JBMA is engaged in putting normalization into practice through activities such as popularizing blind marathons, training escort runners, and strengthening athletes.

The J Trust Group contributes to vitalizing communities and nurturing youth through sports and exchanges in local societies.

Deepening friendships with communities through Japanese culture (Indonesia)BJI has participated in ENNICHISAI, one of the world’s biggest Japanese festivals which is held in Jakarta, four years in a row as a sponsor. At the ENNICHISAI held on June 22 and 23, 2019, BJI together with JTRUST OLYMPINDO MULTI FINANCE hosted an exhibition at a joint booth, welcomed Ms. Yuki Kato, an Indonesian-Japanese actress who serves as an ambassador for the J Trust Group, to a talk event and deepened communications with visitors through events such as a meet-and-greet and mini games.

Japanese-made surgical masks distributed at hospitals in Ulaanbaatar (Mongolia)Mongolia uses coal to generate electricity and heat, so air pollution due to smoke is becoming a social issue. Employees from J Trust Credit NBFI, which develops automobile loan business in Mongolia, visited four hospitals

Engaging with social welfare

For local communities

Ramadan fast-breaking feast

Spring Sports Day

LINE character stamps

ENNICHISAI

Japanese-made surgical masks distributed at hospitals in Ulaanbaatar

Marathon for the visually impaired participated


The J Trust Group strives to create workplaces in which employees with diverse backgrounds can work with a sense of vitality and advance their careers.

Work-life balanceThe J Trust Group offers employees leave to look after sick children or elderly relatives, as well as childcare leave and shortened working hours while raising a family. In June 2013, our Group company KeyHolder was awarded the “Kurumin Mark” by the Ministry of Health, Labour and Welfare in rec-ognition of having met the ministry’s benchmarks for child-rearing support.

Creating a vital workplaceThe J Trust Group has created a variety of support mechanisms to enable employees to work with a sense of vitality and ambition, and with sound mind and bodies. These include harassment awareness seminars and other human rights education, the establishment of internal and external hotlines, contracts with industrial physicians for the Group, and support for employees to obtain various qualifi cations for career improvement.

Through our business activities and social contribution activities, the J Trust Group works to preserve the global environment in a variety of ways.

Prevention of global warmingThe J Trust Group has introduced measures promoted by the government to address global warming, including “super cool biz” and “warm biz” (setting offi ce temperatures higher in the summer and lower in the winter, and allow-ing employees to dress accordingly), the installation of LED lighting, and the planting of greenery on our head offi ce building. The Group has also made the “Fun to Share” declaration toward the realization of a low-carbon society.

within Ulaanbaatar and distributed Japanese-made surgical masks to people visiting or staying in the hospitals with the support of the hospital staff.

Issuance of CSR private placement bond (Japan)On March 25, 2019, J TRUST Card issued a corporate social responsibility (CSR) private placement bond called “With”, underwritten by Miyazaki Bank, Ltd. and raised 300 million yen. CSR private placement bonds are bonds issued in recognition of an enterprise’s fi nancial soundness and CSR activi-ties. J TRUST Card donated 0.2% of the issued amount of the CSR private placement bond to the non-profi t organization “Miyazaki Children Culture Center”, which supports child-rearing in the local community.

Support for ACT SAIKYO (Japan)J Trust has been a sponsor of the non-profi t organization ACT SAIKYO since June 2012. ACT SAIKYO holds regular badminton lessons to promote sports and to foster such recreation as a community activity, under the banner of “Leading the way in promoting active engagement with local communities”.

For employees

For the global environment

Kurumin Mark

Issuance of CSR private placement bond

ACT SAIKYO badminton players

A training session for BJI employees

Greenery planted on roof of head offi ce building


J-GAAP

2010 2011 2012 2013 2014

Operating Results

Operating revenue ¥16,541 ¥16,908 ¥ 24,508 ¥ 55,683 ¥ 61,926

Operating profit (loss) 4,165 4,324 5,539 12,005 13,745

Ordinary profit (loss) 4,303 4,323 5,486 13,704 13,351

Profit (loss) attributable to owners of parent

4,108 3,233 34,500 13,309 11,145

Cash Flows

Net cash provided by (used in) operating activities

¥ (6,819) ¥ 9,234 ¥ (16,489) ¥ 9,378 ¥ 11,434

Net cash provided by (used in) investing activities

(34) (310) (12,424) 36,764 (17,775)

Net cash provided by (used in) financing activities

10,067 (908) 24,165 (2,441) 74,464

Cash and cash equivalents at end of period

6,131 14,148 9,410 56,288 131,349

Financial Position

Total assets ¥37,999 ¥37,862 ¥117,546 ¥ 218,706 ¥ 334,736

Net assets 11,005 13,961 49,471 70,895 184,230

Equity capital 10,967 13,894 48,067 63,625 177,263

Per Share Information

Net profit (loss) per share ¥ 69.56 ¥ 54.30 ¥ 575.96 ¥ 214.44 ¥ 109.66

Diluted net profit per share 69.12 53.85 567.68 208.30 108.05

Net assets per share 185.03 232.39 798.17 1,013.89 1,502.54

Dividends per share 5.00 5.00 6.00 7.00 10.00

Key Management Indices, etc.

Capital adequacy ratio (%) 28.9 36.7 40.9 29.1 53.0

Return on equity (%) 46.1 26.0 111.4 23.8 9.3

Return on assets (%) 10.6 8.5 44.4 7.9 4.0

Number of employees 394 538 1,148 2,105 2,322

Total number of outstanding shares (thousand shares)

29,752 30,009 30,225 63,162 118,385

Ten-year Consolidated Financial SummaryAs of or for the consolidated fi scal years ended March 31

Notes: 1. The Company implemented a two-for-one split of its common shares on June 1, 2012. The above per share figures have been adjusted to reflect this stock split. 2. Fully diluted net profit is not shown because shares with potential dilution existed in 2016 and 2017, but the Company recorded a net loss per share. 3. The 2016 dividend included a 2 yen per share commemorative dividend. 4. The J Trust Group adopted International Financial Reporting Standards (IFRS) from 2018.


(Millions of yen)

2015 2016 2017

¥ 63,281 ¥ 75,478 ¥ 85,031

(5,217) (4,114) (5,769)

(2,385) (4,678) (6,747)

10,143 (5,712) (9,876)

¥ 15,452 ¥ (32,435) ¥ (14,434)

(15,148) (7,896) (4,774)

(20,593) 13,026 10,935

118,060 88,226 78,650

¥ 540,718 ¥ 508,659 ¥ 608,650

194,865 168,656 151,663

188,034 163,115 145,752

¥ 85.92 ¥ (49.65) ¥ (92.82)

85.61 — —

1,591.09 1,455.90 1,415.91

10.00 12.00 12.00

34.8 32.1 23.9

5.6 — —

2.3 — —

3,986 3,226 2,751

118,589 112,447 112,536

IFRS (Millions of yen)

2017 2018 2019

Operating Results

Operating revenue ¥ 66,453 ¥ 74,321 ¥ 74,935

Operating profit (loss) 606 4,759 (32,600)

Loss attributable to owners of parent (1,270) (731) (36,107)

Cash Flows

Net cash provided by (used in) operating activities

¥ (12,413) ¥ 4,581 ¥ 18,831

Net cash provided by (used in) investing activities

(4,468) (7,603) (15,190)

Net cash provided by (used in) financing activities

10,612 7,798 (525)

Cash and cash equivalents at end of period

80,666 84,723 87,150

Financial Position

Total assets ¥ 619,865 ¥ 656,961 ¥668,377

Total equity 155,913 150,776 110,727

Total equity attributable to owners of parent

150,284 144,366 104,173

Per Share Information

Basic earnings per share ¥ (11.94) ¥ (7.11) ¥ (349.70)

Diluted earnings per share (11.94) (7.10) (349.70)

Equity per share attributable to owners of parent

1,459.94 1,401.64 983.96

Dividends per share 12.00 12.00 7.00

Key Management Indices, etc.

Ratio of equity attributable to owners of parent to total assets (%)

24.2 22.0 15.6

Ratio of profit to equity attributable to owners of parent (%)

— — —

Ratio of profit before income taxes to total assets (%)

— 0.5 —

Number of employees 2,751 2,509 3,324

Total number of outstanding shares (thousand shares)

112,536 112,596 115,469


(Millions of yen)

2018 2019

Assets

Cash and cash equivalents ¥ 84,723 ¥ 87,150

Trade and other receivables 92,723 106,735

Marketable securities for banking business 37,159 46,599

Loans by banking business 343,400 326,234

Operational investment securities 3,242 2,855

Marketable securities 208 1,179

Other financial assets 46,300 33,416

Investments accounted for using the equity method 144 126

Inventories 6,937 6,742

Assets held for sale 1,807 2,310

Property, plant and equipment 3,028 5,119

Investment property 610 916

Goodwill 29,578 33,508

Intangible assets 3,087 3,790

Deferred tax assets 1,502 2,373

Other assets 2,505 9,317

Total assets 656,961 668,377

Liabilities

Trade and other payables 9,811 14,613

Deposits by banking business 403,509 437,010

Bonds and borrowings 78,727 86,002

Other financial liabilities 5,272 13,383

Income taxes payable 629 1,215

Provisions 353 1,114

Deferred tax liabilities 850 1,076

Other liabilities 7,029 3,233

Total liabilities 506,184 557,650

Equity

Share capital 53,638 54,760

Capital surplus 52,713 53,844

Treasury shares (7,685) (7,685)

Retained earnings 47,555 6,424

Other components of equity (1,854) (3,170)

Total equity attributable to owners of parent 144,366 104,173

Non-controlling interests 6,409 6,554

Total equity 150,776 110,727

Total liabilities and equity ¥656,961 ¥668,377

Consolidated Statements of Financial PositionAs of March 31


(Millions of yen)

2018 2019Continuing operations

Operating revenue ¥74,321 ¥ 74,935Operating expenses 47,451 78,253Selling, general and administrative expenses 24,128 28,488Other income 2,239 366Other expenses 222 1,159Operating profit (loss) 4,759 (32,600)Finance income 47 1,612Finance costs 1,895 110Share of loss of investments accounted for using the equity method (12) (36)Profit (loss) before income taxes 2,898 (31,135)Income taxes 1,012 2,753Profit (loss) from continuing operations 1,885 (33,888)

Discontinued operationsLoss from discontinued operations (1,808) (2,787)

Profit (loss) 77 (36,676)

Profit (loss) attributable to:Owners of parent (731) (36,107)Non-controlling interests 809 (568)Profit (loss) 77 (36,676)

Earnings (loss) per share (attributable to owners of parent)Basic earnings (loss) per share (yen)

Continuing operations 16.43 (322.70)Discontinued operations (23.54) (27.00)Total (7.11) (349.70)

Diluted earnings (loss) per share (yen)Continuing operations 16.42 (322.70)Discontinued operations (23.52) (27.00)Total ¥ (7.10) ¥(349.70)

Consolidated Statements of Comprehensive IncomeFor the fi scal years ended March 31, 2018 and 2019

Consolidated Statements of Profi t or LossFor the fi scal years ended March 31, 2018 and 2019

(Millions of yen)

2018 2019Profit (loss) ¥ 77 ¥(36,676)

Other comprehensive incomeItems that will not be reclassified to profit or loss

Remeasurements of defined benefit plans (52) (69)Net change in fair value of equity instruments measured at fair value through other comprehensive income — (85)Total of items that will not be reclassified to profit or loss (52) (154)

Items that may be reclassified subsequently to profit or lossExchange differences on translation of foreign operations (2,987) (615)Net change in fair values of available-for-sale financial assets (857) —Net change in fair value of debt instruments measured at fair value through other comprehensive income — (437)Provision for expected credit losses on debt instruments measured at fair value through other comprehensive income — 25Share of other comprehensive income of investments accounted for using the equity method (11) —Total of items that may be reclassified subsequently to profit or loss (3,855) (1,028)

Other comprehensive income, net of tax (3,908) (1,183)Comprehensive income (3,830) (37,859)

Comprehensive income attributable to:Owners of parent (4,677) (37,302)Non-controlling interests 847 (557)Comprehensive income ¥(3,830) ¥(37,859)


(Millions of yen)

Share capital

Capital surplus

Treasury shares

Retained earnings

Other components

of equity

Total equity attributable to owners of parent

Non-controlling interests Total equity

Balance as of April 1, 2017 ¥53,630 ¥52,743 ¥(7,685) ¥49,504 ¥ 2,091 ¥150,284 ¥5,628 ¥155,913

Profit (loss) — — — (731) — (731) 809 77

Other comprehensive income — — — — (3,945) (3,945) 37 (3,908)

Total comprehensive income — — — (731) (3,945) (4,677) 847 (3,830)

Issuance of new shares 8 8 — — — 16 — 16

Dividends of surplus — — — (1,235) — (1,235) — (1,235)

Purchase of treasury shares — — (0) — — (0) — (0)

Other — (24) — 17 — (7) — (7)

Total contributions by and distributions to owners 8 (16) (0) (1,218) — (1,226) — (1,226)

Changes in ownership interest in subsidiaries — — — — — — (0) (0)

Dividends to non-controlling interests — — — — — — (79) (79)

Other — (13) — — — (13) 13 (0)

Total changes in ownership interest in subsidiaries — (13) — — — (13) (66) (79)

Total transactions with owners 8 (29) (0) (1,218) — (1,240) (66) (1,306)

Balance as of March 31, 2018 ¥53,638 ¥52,713 ¥(7,685) ¥47,555 ¥(1,854) ¥144,366 ¥6,409 ¥150,776

Cumulative effect of accounting change — — — (3,784) (123) (3,908) (42) (3,950)

Restated balance as of April 1, 2018 53,638 52,713 (7,685) 43,770 (1,978) 140,458 6,367 146,825

Profit (loss) — — — (36,107) — (36,107) (568) (36,676)

Other comprehensive income — — — — (1,194) (1,194) 11 (1,183)

Total comprehensive income — — — (36,107) (1,194) (37,302) (557) (37,859)

Issuance of new shares 1,121 1,118 — — — 2,240 — 2,240

Dividends of surplus — — — (1,236) — (1,236) — (1,236)

Purchase of treasury shares — — (0) — — (0) — (0)

Transfer from other components of equity to retained earnings — — — (5) 5 — — —

Other — 20 — 3 — 23 — 23

Total contributions by and distributions to owners 1,121 1,139 (0) (1,238) 5 1,027 — 1,027

Changes in ownership interest in subsidiaries — (8) — — (0) (8) 20 11

Dividends to non-controlling interests — — — — — — (79) (79)

Other — — — — (2) (2) 803 801

Total changes in ownership interest in subsidiaries — (8) — — (2) (10) 744 733

Total transactions with owners 1,121 1,130 (0) (1,238) 2 1,016 744 1,761

Balance as of March 31, 2019 ¥54,760 ¥53,844 ¥(7,685) ¥ 6,424 ¥(3,170) ¥104,173 ¥6,554 ¥110,727

Consolidated Statements of Changes in EquityFor the fi scal years ended March 31, 2018 and 2019


(Millions of yen)

2018 2019Cash flows from operating activities

Profit (loss) before income taxes ¥ 2,898 ¥ (31,135)Profit (loss) before income taxes from discontinued operations (1,540) (2,786)Depreciation and amortization 2,456 1,535Impairment losses 220 368Impairment losses on other financial assets 1,438 18,731Interest and dividend income (53,986) (57,362)Interest expenses 16,833 19,332Other (profit) loss (371) (4,310)Decrease (increase) in trade and other receivables (11,644) 497Increase (decrease) in deposits for banking business 49,354 39,554Net decrease (increase) in loans for banking business (42,789) (5,395)Decrease (increase) in operational investment securities 3,615 —Increase (decrease) in trade and other payables 353 4,853Interest and dividend income received 56,177 59,293Interest paid (16,595) (18,818)Income taxes paid (2,231) (2,332)Income taxes refund 649 880Other (257) (4,073)Net cash provided by (used in) operating activities 4,581 18,831

Cash flows from investing activitiesPurchase of investments accounted for using the equity method — (549)Proceeds from sale of investments accounted for using equity method — 200Decrease (increase) in time deposits 188 198Purchase of property, plant and equipment, and investment property (1,474) (1,941)Proceeds from sales of property, plant and equipment, and investment property 270 48Purchase of intangible assets (794) (1,983)Purchase of investment securities for banking business (106,170) (105,252)Proceeds from sale of investment securities for banking business 97,229 95,565Proceeds from redemption of investment securities for banking business 984 5,869Purchase of shares of subsidiaries — (2,838)Proceeds from sale of subsidiaries 2,474 —Payments for sales of shares of subsidiaries (49) (149)Payments for acquisition of businesses — (3,399)Other (263) (957)Net cash provided by (used in) investing activities (7,603) (15,190)

Cash flows from financing activitiesNet increase (decrease) in notes discounted (96) 310Net increase (decrease) in short-term borrowings 4,112 (4,929)Net increase (decrease) in short-term bonds payable 5,915 (5,487)Repayments of long-term borrowings (18,938) (26,946)Proceeds from long-term borrowings 17,850 31,964Redemption of bonds (6,577) (5,956)Proceeds from issuance of bonds 7,060 9,540Repayments of lease obligations (233) (48)Payments for purchase of treasury shares (0) (0)Proceeds from exercise of employee share options 8 2,232Dividends paid (1,235) (1,236)Dividends paid to non-controlling interests (79) (79)Proceeds from partial sales of interests in subsidiaries to non-controlling interests — 11Other 11 100Net cash provided by (used in) financing activities 7,798 (525)

Net increase (decrease) in cash and cash equivalents 4,776 3,116Cash and cash equivalents at beginning of period 80,666 84,723Effect of exchange rate changes on cash and cash equivalents (718) (689)Cash and cash equivalents at end of period ¥ 84,723 ¥ 87,150

Consolidated Statements of Cash FlowsFor the fi scal years ended March 31, 2018 and 2019


Nihon Hoshou

Partir Servicer

J TRUST Card

JT Chinae Savings Bank

JT Savings Bank

Assets

Cash and cash equivalents ¥ 6,422 ¥ 907 ¥ 572 ¥ 33,129 ¥ 14,056

(a) Loan balance 2,095 — 2,655 179,298 98,579

Operating loans 2,095 — 4 — —

Loans for banking business — — — 179,298 98,579

Advances paid—installments — — 2,650 — —

Finance lease receivables — — — — —

Purchased receivables 12,604 1,778 — — —

Other accounts receivables 16,292 — — 1,300 649

Other operational securities — — — — —

Securities 67 — — 10,942 5,354

Other financial assets 1,900 256 141 11,488 6,157

Allowance against potential loan losses (2,023) (179) (23) (9,817) (3,476)

Assets held for sale — — — — —

Tangible assets 63 55 44 272 169

Investment properties 75 — — — —

Goodwill 126 — — 922 —

Intangible assets 154 26 33 465 520

Other assets 605 35 15,022 298 80

Total assets 38,383 2,880 18,445 228,300 122,091

Liabilities

Deposits — — — 205,766 108,283

Total interest-bearing liabilities 5,337 852 1,793 — —

Loans 5,127 852 1,499 — —

Liabilities 210 — 294 — —

Other liabilities 15,317 879 532 5,632 3,015

Total liabilities 20,655 1,732 2,326 211,398 111,298

Equity

Attributable to owners of parent 17,728 1,147 16,118 16,901 10,793

Non-controlling interests — — — — —

Total equity 17,728 1,147 16,118 16,901 10,793

Total equity and liabilities 38,383 2,880 18,445 228,300 122,091

(Size of guarantee) 202,810 — — — —

(b) Loans delinquent over 90 days 403 — 0 10,371 3,526

(c) Allowance against potential loan losses 2,023 179 23 9,817 3,476

(1) Allowance against potential loan losses 71 — 23 9,777 3,451

NPL rate (Gross) (b)÷(a) 19.3% — 0.0% 5.8% 3.6%

NPL rate (Net) ((b)–(1))÷(a) 15.8% — 0.0% 0.3% 0.1%

(2) Allowance against potential loan losses 1,952 179 0 40 24

Statement of Financial Position of Principal SubsidiariesAs of March 31, 2019

Note: Please refer to our website for the quarterly data for the year ended December 31, 2019 and after. (IR Information_IR Library_Quarterly Earnings)https://www.jt-corp.co.jp/en/ir/library/ir_data_00/


(Millions of yen)

JT Capital

TA Asset Management

Bank JTrust Indonesia

JTRUST INVESTMENTS

INDONESIA

JTRUST OLYMPINDO

MULTI FINANCE

JTRUST ASIA

Other/Adjustments

Consolidated

¥ 5,531 ¥1,034 ¥ 9,370 ¥ 666 ¥ 109 ¥ 51 ¥ 15,303 ¥ 87,150

57,138 3,950 63,577 — 5,991 — 4,801 418,084

54,931 3,950 — — 5,991 — 1,121 68,092

— — 63,577 — — — 3,456 344,910

— — — — — — 0 2,650

2,207 — — — — — 223 2,430

— 3,165 — 14,422 — — 181 32,150

276 17 968 — — 1,637 324 21,463

— — — — — 2,855 0 2,855

— — 30,302 — — — 1,113 47,778

1,065 256 18,345 4 64 26,296 (7,734) 58,238

(2,496) (2,124) (10,136) (11,312) (239) (21,611) (115) (63,551)

— — 1,534 2 478 — 296 2,310

160 37 1,226 594 2,268 21 210 5,119

— — — — — — 841 916

— — — — — — 32,460 33,508

107 28 722 0 95 0 1,640 3,790

388 3,410 21,588 546 175 3,662 (27,249) 18,560

62,171 9,776 137,497 4,926 8,945 12,914 22,049 668,377

— — 123,677 — — — (716) 437,010

47,052 486 8,670 3,073 6,556 — 12,183 86,002

19,517 486 7,004 3,073 6,556 — 11,451 55,565

27,535 — 1,666 — — — 731 30,436

1,373 468 4,765 13,111 781 246 (11,483) 34,636

48,425 954 137,114 16,185 7,338 246 (21) 557,650

13,745 8,821 383 (11,258) 1,606 12,668 15,521 104,173

— — — — — — 6,554 6,554

13,745 8,821 383 (11,258) 1,606 12,668 22,075 110,727

62,171 9,776 137,497 4,926 8,945 12,914 22,049 668,377

13 — 3,680 — — — 1 206,504

4,429 2,169 6,437 — 152 — 54 27,541

2,496 2,124 10,136 11,312 239 21,611 115 63,551

2,487 2,105 5,473 — 239 — (21) 23,605

7.8% 54.9% 10.1% — 2.6% — 6.6%

3.4% 1.6% 1.5% — 0.0% — 0.9%

9 18 4,663 11,312 — 21,611 137 39,945


Nihon Hoshou

Partir Servicer

J TRUST Card

JT Chinae Savings Bank

JT Savings Bank

Operating revenue ¥9,264 ¥1,856 ¥375 ¥21,695 ¥10,156

Total interest revenue 6,576 833 11 20,370 9,396

Interest revenue (Loans, credit cards, etc.) 5,240 395 11 19,853 9,153

Book value adjustment gain/loss 1,294 395 — — —

Gain on bad debts recovered 42 41 — 120 86

Interest from securities — — — 395 155

Total revenue other than interest 2,687 1,023 364 1,324 759

Guarantee commission received 2,166 — — — —

Gain on sale of securities — — — 1 4

Commission fees 416 1,007 364 394 269

Sales from real estate business — — — — —

Sales from general entertainment business — — — — —

Other operating revenue 104 15 0 928 486

Operating expenses 1,957 237 30 13,328 5,950

Total interest expenses 140 15 25 5,342 2,677

Interest on deposits — — — 5,166 2,673

Interest on loans 109 13 25 167 —

Interest on liabilities — — — — —

Other interest 30 2 — 8 3

Total expenses other than interest 1,816 221 5 7,986 3,273

Loss on sale of securities — — — 13 —

Expenses related to bad debts 1,635 218 3 6,124 2,681

Other costs — — — 166 —

Other operating expenses 181 2 1 1,682 592

SG&A expenses 3,166 1,468 317 5,939 2,557

Personnel expenses 907 920 135 3,241 1,474

Depreciation 41 43 13 481 122

Other SG&A expenses 2,218 505 168 2,215 960

Other revenue 56 9 5 64 7

Other expenses 803 0 12 32 2

Operating profit 3,393 160 20 2,459 1,653

Financial revenue 39 0 — — —

Financial expenses 4 — 0 1 0

Gain from equity investment method — — — — —

Loss from equity investment method — — — — —

Profit before tax 3,429 160 19 2,457 1,652

Income tax expenses 1,708 124 1 (97) 365

Profit (loss) (continued operations) 1,720 36 18 2,554 1,287

Profit (loss) (discontinued operations)

Profit (loss) 1,720 36 18 2,554 1,287

Profit (loss) attributable to owners 1,720 36 18 2,554 1,287

Non-controlling interests — — — — —

ROA (Annualized) 4.75% 1.39% 0.10% 1.17% 1.10%

Statement of Profi t or Loss of Principal SubsidiariesFor the fi scal year ended March 31, 2019

Note: Please refer to our website for the quarterly data for the year ended December 31, 2019 and after. (IR Information_IR Library_Quarterly Earnings)https://www.jt-corp.co.jp/en/ir/library/ir_data_00/


(Millions of yen)

JT Capital

TA Asset Management

Bank JTrust Indonesia

JTRUST INVESTMENTS

INDONESIA

JTRUST OLYMPINDO

MULTI FINANCE

JTRUST ASIA

KeynoteOther/

AdjustmentsConsolidated

¥5,938 ¥1,993 ¥11,779 ¥ 388 ¥ 989 ¥ 1,214 ¥8,906 ¥ 382 ¥ 74,935

5,518 1,879 10,805 390 823 1,214 — (203) 57,612

5,415 938 9,025 324 691 1,214 — (257) 52,002

— 906 — 65 — — — 58 2,718

103 33 57 — 132 — — 4 618

— — 1,722 — — — — 1 2,273

419 114 974 (1) 165 — 8,906 588 17,322

1 — 59 — — — — 1 2,227

1 — 174 — — — — 1 181

232 1 84 — 149 — — (982) 1,934

— — — — — — 6,294 146 6,440

— — — — — — 1,520 1,520

184 113 655 (1) 15 — 2,612 (94) 5,017

3,881 264 11,472 11,628 716 20,188 7,764 838 78,253

2,167 9 8,386 263 485 10 — (314) 19,205

— — 7,893 — — — — (72) 15,660

1,213 9 106 263 479 10 — (243) 2,151

219 — — — — — — 2 221

734 — 387 — 6 — — 1 1,171

1,714 254 3,086 11,365 231 20,178 7,764 1,155 59,048

— — 181 — — — — 0 194

1,712 254 1,530 11,365 193 20,176 — 81 45,972

— — — — — — 7,764 1,185 9,115

1 — 1,374 — 37 2 — (106) 3,766

2,010 849 5,332 138 690 1,592 1,016 3,414 28,488

1,235 461 2,288 43 396 110 520 1,376 13,106

130 24 206 9 22 5 5 347 1,448

645 363 2,838 85 271 1,476 491 1,698 13,933

1 9 136 28 3 0 35 13 366

— 1 1,012 — — 1 54 (758) 1,159

47 887 (5,901) (11,350) (415) (20,568) 107 (3,092) (32,600)

— 367 — 24 0 1,529 0 (347) 1,612

1 1 — 21 2 692 110 (722) 110

— — — — — — — 0 —

— — — — — — — 36 36

46 1,253 (5,901) (11,347) (418) (19,730) (3) (2,752) (31,135)

28 294 (35) 85 (0) 25 (8) 263 2,753

18 959 (5,866) (11,432) (417) (19,756) 4 (3,013) (33,888)

(2,787) (2,787)

18 959 (5,866) (11,432) (417) (19,756) 4 (5,801) (36,676)

18 959 (5,866) (11,432) (417) (19,756) 4 (5,232) (36,107)

— — — — — — — (568) (568)

0.03% 9.02% (4.31%) (318.23%) (8.37%) (92.47%) 0.06% (5.45%)


Corporate Information

Corporate Profi le (As of March 31, 2019)

Trade name: J Trust Co., Ltd.

Capital: ¥54,760 million

Established: March 1977

Headquarters: Toranomon First Garden, 1-7-12 Toranomon, Minato-ku, Tokyo 105-0001, Japan

Phone: +81-3-4330-9100 (main)

Type of business entity: Holding company

Number of employees: 3,324 (consolidated)

Major Consolidated Subsidiaries (As of March 31, 2019)

Name EstablishedCapital

(Millions of yen)Percentage of voting rights Principal business


Nihon Hoshou Co., Ltd. Mar. 1970 95 100%Credit guarantee servicesCollection of accounts receivables

Partir Servicer Co., Ltd. Aug. 2007 500 100% Collection of accounts receivables

J TRUST Card Co., Ltd. Apr. 1963 90 99.90%Credit and consumer credit services


JT Chinae Savings Bank Co., Ltd. Aug. 20125,313

(KRW71.7 billion)100% Savings bank business

JT Savings Bank Co., Ltd. Dec. 200610,798

(KRW99.9 billion)100% Savings bank business

TA Asset Management Co., Ltd. June 2006833

(KRW8.7 billion)100% Collection of accounts receivables

JT Capital Co., Ltd. Dec. 200711,739

(KRW108 billion)100%

Installment loan and leasing business

J Trust Credit NBFI Apr. 2014107

(2.5 billion Mongolian tugrik)

100% Financial business


PT Bank JTrust Indonesia Tbk. Dec. 2004116,654

(IDR12.2 trillion)97.19% Banking business

PT JTRUST INVESTMENTS INDONESIA

June 2015573

(IDR61.2 billion)99.15% Collection of accounts receivables

PT JTRUST OLYMPINDO MULTI FINANCE

Nov. 19931,575

(IDR207.3 billion)60.00% Multi-finance business

General entertainment business

KeyStudio, Inc. Apr. 2018 100 100% Live entertainment business

KeyProduction, Inc. Apr. 2018 100 100% TV program production business

FA Project, Inc. July 2018 9 62.00%Planning and production of live entertainment contents

SKE, Inc. Jan. 2019 100 80.00% Performing arts production

Real estate business

Keynote Co., Ltd. July 1996 30 100%Sales and brokerage of real estate Renovation of existing housing

KeyHolder, Inc. Dec. 1967 4,405 42.92% Property asset business

Investment business

JTRUST ASIA PTE. LTD. Oct. 201332,639

(SGD410 million)100%

Investment business and management and support business for investees

Other businessKeynote Co., Ltd. July 1996 30 100% Commercial facility construction

J Trust System Co., Ltd. May 2009 80 100% IT system business


Foreign companies, etc.: 21,571,760 (20.4%)Financial institutions: 3,457,800 (3.3%)

Financial instruments business operators: 3,481,195 (3.3%)Other companies: 33,826,356 (31.9%)

Individuals and others: 43,534,261 (41.1%)

Investor InformationAs of March 31, 2019

Share Information

Number of authorized shares: 240,000,000

Number of issued and outstanding shares: 115,469,910

Number of shareholders: 16,927

Name Number of shares held Shareholding ratio (%)

NLHD Co., Ltd. 26,697,872 25.2

Nobuyoshi Fujisawa 14,907,272 14.1

TAIYO HANEI FUND, L.P. 5,100,500 4.8

STATE STREET BANK AND TRUST COMPANY 505019 4,153,600 3.9

TAIYO FUND, L.P. 3,806,200 3.6

SAIKYO LEASING CORPORATION 2,890,000 2.7

JAPAN POCKET Co., Ltd. 1,780,000 1.7

GOLDMAN SACHS INTERNATIONAL 1,620,967 1.5

Japan Trustee Services Bank, Ltd. (trust account 9) 1,458,500 1.4

Japan Trustee Services Bank, Ltd. (trust account) 1,203,900 1.1

Note: The share ownership and shareholding ratio are based on the number of outstanding shares excluding 9,598,538 treasury shares.

Major Shareholders (Top 10 shareholders)

Website

J Trust’s latest fi nancial reports and news releases are available on the Investor Relations webpage:

https://www.jt-corp.co.jp/en/ir

Stock listing: Tokyo Stock Exchange, Second Section

Local code: 8508

Shareholder registry administrator and special account manager:

Mitsubishi UFJ Trust and Banking CorporationSecurities Agency Division 1-1 Nikkouchou, Fuchu-shi, Tokyo, JapanPhone: 0120-232-711 (toll-free within Japan)

Accounting auditor: Grant Thornton Taiyo LLC** YUSEI Audit & Co., which had previously provided audit attestation services to the Company, merged with Grant Thornton Taiyo LLC on July 2, 2018, and changed its name to Grant Thornton Taiyo LLC.

Contact: Finance DepartmentJ Trust Co., Ltd. Toranomon First Garden, 1-7-12 Toranomon, Minato-ku, Tokyo 105-0001, JapanPhone: +81-3-4330-9100 (main)

Share Ownership


Printed in Japan

J Trust Co., Ltd.

Toranomon First Garden, 1-7-12 Toranomon, Minato-ku, Tokyo 105-0001, Japan

+81-3-4330-9100 (main)

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