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 2017 overall, operating income amounted to ¥273 billion ($2,574 million), down ¥10 billion ($97 million), or 3.6%, year on year. In addition to dividends from Shinkin Trust Bank, Ltd., interest income increased due to distributions from investment trust funds and gain from their cancellations, but was offset by a decrease in gains on sales of bonds, which was associated with a reduction in trades to cancel hedge positions. Meanwhile, operating expenses came to ¥212 billion ($2,003 million), down ¥22 billion ($213 million), or 9.6%, year on year, mainly resulting from a decline in financial derivative expenses associated with a reduction in trades to cancel hedge positions.
As a result, ordinary income came to ¥60 billion ($570 million), an increase of ¥12 billion ($116 million), or 25.5%, year on year. However, reflecting an increase of ¥9 billion ($86 million) in income taxes, net income totaled ¥46 billion ($437 million), up ¥5 billion ($48 million), or 12.3%, year on year.

Funding

In fiscal 2017 (ended March 31, 2018), the total amount of funding increased ¥1,369 billion ($12,883 million) year on year, for a total of ¥36,518 billion ($343,603 million). Of this figure, deposits received came to ¥30,260 billion ($284,722 million), an increase of ¥1,084 billion ($10,201 million), which mainly comprised fixed-term deposits from shinkin banks.
After deducting redemptions, debentures at the end of fiscal 2017 came to ¥2,714 billion ($25,544 million), down ¥238 billion ($2,239 million) during the fiscal year, including ¥341 billion ($3,216 million) in debentures issued by the SCB.
Borrowed money amounted to ¥3,542 billion ($33,336 million), a year-on-year increase of ¥523 billion ($4,921 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 2017 increased ¥830 billion ($7,815 million), or 2.2%, to ¥37,466 billion ($352,529 million).
Mainly due to lower government bond holdings, outstanding invested securities decreased ¥66 billion ($630 million), or 0.3%, to ¥17,137 billion ($161,251 million) at fiscal year end.
Loans and bills discounted decreased ¥1,042 billion ($9,811 million), or 13.0%, during the year under review to ¥6,952 billion ($65,418 million), centering on loans to national and government agencies and organizations, despite an increase of loans to business corporations.
The outstanding amount of short-term money market assets rose ¥1,829 billion ($17,209 million) year on year, or 16.2%, to ¥13,059 billion ($122,877 million). This primarily reflects Bank of Japan current deposit increases.

Securities

As of March 31, 2018, the outstanding amount of securities was ¥17,137 billion ($161,251 million).
Government bonds, corporate bonds, and other domestic securities accounted for ¥11,560 billion ($108,769 million), and foreign securities for ¥4,622 billion ($43,492 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, 2018, the outstanding amount of loans and bills discounted was ¥6,952 billion ($65,418 million). Of the total amount, loans to shinkin bank customers through those banks accounted for ¥283 billion ($2,667 million), while direct loans to such parties as national and government agencies and organizations, regional public corporations, and charitable organizations accounted for ¥3,339 billion ($31,424 million). Direct loans to business corporations accounted for ¥2,675 billion ($25,178 million).

Credit Ratings (As of July 31, 2018)

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 ¥106.28 per US$1.00, the prevailing rate as of March 31, 2018.

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