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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 2021 (ended March 31, 2022) overall, operating income decreased by ¥11 billion ($91 million) or 4.9% year on year to ¥216 billion ($1,765 million), mainly due to a decrease in gains on sales of government bonds. Meanwhile, operating expenses came to ¥171 billion ($1,399 million), down ¥16 billion ($131 million) or 8.6%, year on year due to a decrease in interest on payables under securities lending transactions as a result of lower foreign currency procurement interest.
As a result, ordinary income came to ¥44 billion ($366 million), an increase of ¥4 billion ($40 million), or 12.3%, year on year. Profit came to ¥34 billion ($278 million), an increase of ¥4 billion ($36 million), or 15.1%, year on year.
Funding
In fiscal 2021, the total amount of funding increased by ¥236 billion ($1,934 million) year on year, for a total of ¥41,840 billion ($341,918 million). Of this figure, deposits received came to ¥33,165 billion ($271,024 million), a decrease of ¥622 billion ($5,087 million), which mainly comprised fixed-term deposits from shinkin banks.
After deducting redemptions, debentures at the end of fiscal 2021 came to ¥1,547 billion ($12,644 million), down ¥226 billion ($1,854 million) during the fiscal year, including ¥249 billion ($2,040 million) in debentures issued by the SCB.
Borrowed money increased by ¥1,086 billion ($8,876 million) during the fiscal year to ¥7,127 billion ($58,248 million), mainly comprising borrowings under a funding provision to support increased lending by the Bank of Japan.
Asset Management
The amount of assets under management in fiscal 2021 was virtually unchanged from the end of the previous fiscal year at ¥42,677 billion ($348,755 million).
Mainly due to lower government bond holdings, outstanding invested securities decreased by ¥1,581 billion ($12,920 million) during the fiscal year to ¥16,163 billion ($132,089 million) at fiscal year end.
Loans and bills discounted decreased by ¥692 billion ($5,657 million) during the fiscal year to ¥7,758 billion ($63,403 million) at fiscal year end.
The outstanding amount of short-term money market assets increased by ¥2,223 billion ($18,172 million) during the fiscal year to ¥18,321 billion ($149,720 million) at fiscal year end, mainly reflecting Bank of Japan current deposits.
Securities
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.
Loans and Bills Discounted
As of March 31, 2022, the outstanding amount of loans and bills discounted was ¥7,758 billion ($63,403 million).
Credit Ratings (As of July 31, 2022)
| 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 ¥122.37 per US$1.00, the prevailing rate as of March 31, 2022.