Financial Information

  • Business Overview
  • Credit Ratings
  • Annual Reports/Documents
  • What Are Shinkin Banks?

Financial Information

The Central Bank of the Shinkin Bank Industry

The SCB raises funds mostly through deposits—received mainly from shinkin banks—as well as by issuing debentures. It invests these funds in securities, the proceeds of which are used to extend loans, and draws on the resulting profits to support the activities of shinkin banks.

Business Overview

Earnings Performance

Looking at the financial results for fiscal 2016 overall, operating income amounted to ¥284 billion ($2,531 million), up ¥14 billion ($128 million), or 5.3%, year on year. The increase mainly reflected an increase in gains on sales of bonds associated with the sell-offs of hedged securities, which outweighed a decline in interest income due to a decline in interest rates. Meanwhile, operating expenses came to ¥235 billion ($2,100 million), up ¥22 billion ($196 million), or 10.3%, year on year, mainly reflecting an increase in financial derivative expenses associated with the unwinding of hedge transactions, which was partially offset by a decline in fund procurement expenses following the decline in interest rates.
As a result, ordinary income came to ¥48 billion ($430 million), a decline of ¥7 billion ($68 million), or 13.6%, year on year. However, net income was mainly flat year on year at ¥41 billion ($368 million), reflecting a decline in income taxes.

Funding

In fiscal 2016 (ended March 31, 2017), the total amount of funding increased ¥2,505 billion ($22,334 million) year on year, for a total of ¥35,148 billion ($313,298 million). Of this figure, deposits received came to ¥29,176 billion ($260,059 million), an increase of ¥1,939 billion ($17,286 million), which mainly comprised fixed-term deposits from shinkin banks.
After deducting redemptions, debentures at the end of fiscal 2016 came to ¥2,952 billion ($26,320 million), down ¥102 billion ($914 million) during the fiscal year, including ¥476 billion ($4,248 million) in debentures issued by the SCB.
Borrowed money amounted to ¥3,019 billion ($26,918 million), a year-on-year increase of ¥669 billion ($5,963 million), mainly comprising borrowings under a funding provision to support increased lending by the Bank of Japan and foreign currency denominated repurchase transactions.

Asset Management

The amount of assets under management in fiscal 2016 increased ¥1,982 billion ($17,672 million), or 5.7%, to ¥36,636 billion ($326,555 million).
Mainly due to lower government bond holdings, outstanding invested securities decreased ¥634 billion ($5,656 million), or 3.5%, to ¥17,204 billion ($153,353 million) at fiscal year end.
As a result chiefly of an increase in loans to business corporations and national and government agencies and organizations, loans and bills discounted increased ¥1,231 billion ($10,977 million), or 18.2%, during the year under review to ¥7,995 billion ($71,266 million).
The outstanding amount of short-term money market assets rose ¥1,493 billion ($13,314 million) year on year, or 15.3%, to ¥11,230 billion ($100,101 million). This primarily reflects Bank of Japan current deposit increases.

Securities

As of March 31, 2017, the outstanding amount of securities was ¥17,204 billion ($153,353 million).
Government bonds, corporate bonds, and other domestic securities accounted for ¥12,058 billion ($107,481 million), and foreign securities for ¥4,173 billion ($37,197 million).
In terms of foreign securities, the SCB mainly invests in safe assets, which include government-secured financial institution bonds and government-agency bonds in major developed countries.
To advance its diversified investment portfolio, the SCB also invests in such risk assets as stocks and investment trust funds not subject to interest risk, while optimizing its portfolio in response to shifts in the financing and investment environment.
The SCB also carries out interest rate swaps and other derivative trading, to hedge risks linked to assets under management.

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Loans and Bills Discounted

The SCB conducts a variety of loan-related business. As of March 31, 2017, the outstanding amount of loans and bills discounted was ¥7,995 billion ($71,266 million). Of the total amount, loans to shinkin bank customers through those banks accounted for ¥257 billion ($2,298 million), while direct loans to such parties as national and government agencies and organizations, regional public corporations, and charitable organizations accounted for ¥4,696 billion ($41,863 million). Direct loans to business corporations accounted for ¥2,392 billion ($21,323 million).

Credit Ratings (As of July 31, 2017)

Moody's S&P R&I JCR
Long-Term Credit Rating A1 A A+ AA

Symbols indicating credit rating are assigned by each rating agency.

Annual Reports/Documents

What Are Shinkin Banks?

Shinkin banks are cooperative financial institutions. Their membership comprises local residents and small and medium-sized enterprises. Shinkin banks’ distinctive characteristics are that they are conveniently located; offer fine-tuned, personalized services; and have a strong relationship of mutual trust with their customers and communities.
Cooperative financial institutions are organizations that operate under the fundamental principle of mutual support.
Shinkin banks limit their lending, in principle, to members. However, their functions are almost the same as those of commercial banks, and they also deal with many people who are not members, accepting deposits, providing exchange services, accepting payments, including those for public utilities, and engaging in over-the-counter sales of public bonds, investment trust funds, and insurance.
Shinkin banks not only provide deposit, lending and exchange services, but also offer a diverse range of services to customers and other members of the local community in such areas as support for management improvement and enterprise renewal, business succession support, business start-up support, and local-area revitalization.

Note: US dollar amounts are given for convenience only, converted at the rate of ¥112.19 per US$1.00, the prevailing rate as of March 31, 2017.

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