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 2018 (ended March 31, 2019) overall, operating income amounted to ¥258 billion ($2,331 million), down ¥14 billion ($134 million), or 5.4%, year on year because, although dividends from investment trust funds increased due to the effects of diversified investment, interest and dividends on securities decreased as a result of constraints on recognizing unrealized gains from investment trust funds. Meanwhile, operating expenses came to ¥200 billion ($1,803 million), down ¥12 billion ($115 million), or 6.0%, year on year due to a decrease in loss on redemption of bonds, mainly in losses from canceling investment trust funds as part of the portfolio rebalancing in the previous fiscal year. As a result, ordinary income came to ¥58 billion ($527 million), a decrease of ¥2 billion ($19 million), or 3.4%, year on year.
Net income totaled ¥42 billion ($381 million), down ¥4 billion ($37 million), or 9.0%, year on year due to a drop in items such as the gain on transfer of business from Shinkin Trust Bank, Ltd., which was recorded as extraordinary income in the previous fiscal year.

Funding

In fiscal 2018, the total amount of funding increased ¥868 billion ($7,826 million) year on year, for a total of ¥37,386 billion ($336,938 million). Of this figure, deposits received came to ¥30,966 billion ($279,080 million), an increase of ¥706 billion ($6,366 million), which mainly comprised fixed-term deposits from shinkin banks.
After deducting redemptions, debentures at the end of fiscal 2018 came to ¥2,486 billion ($22,410 million), down ¥228 billion ($2,056 million) during the fiscal year, including ¥399 billion ($3,604 million) in debentures issued by the SCB.
Borrowed money amounted to ¥3,933 billion ($35,446 million), a year-on-year increase of ¥390 billion ($3,515 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 2018 increased ¥914 billion ($8,240 million), or 2.4%, to ¥38,381 billion ($345,901 million).
Mainly due to lower government bond holdings, outstanding invested securities decreased ¥524 billion ($4,724 million), or 3.0%, to ¥16,613 billion ($149,725 million) at fiscal year end.
Loans and bills discounted increased ¥92 billion ($837 million), or 1.3%, during the year under review to ¥7,045 billion ($63,496 million) as loans to business corporations increased while loans to national and government agencies and organizations decreased.
The outstanding amount of short-term money market assets rose ¥1,306 billion ($11,774 million), or 10.0% to ¥14,365 billion ($129,469 million). This primarily reflects Bank of Japan current deposit increases.

Securities

As of March 31, 2019, the outstanding amount of securities was ¥16,613 billion ($149,725 million).
Government bonds, corporate bonds, and other domestic securities accounted for ¥10,627 billion ($95,773 million), and foreign securities such as government-secured financial institution bonds and government-agency bonds in major developed countries, and foreign investment trusts for ¥4,978 billion ($44,867 million), and stocks and investment trust funds for ¥810 billion ($7,305 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

As of March 31, 2019, the outstanding amount of loans and bills discounted was ¥7,045 billion ($63,496 million). Of the total amount, loans to shinkin bank customers through those banks accounted for ¥347 billion ($3,135 million), while direct loans to such parties as national and government agencies and organizations, regional public corporations, and charitable organizations accounted for ¥2,869 billion ($25,860 million). Direct loans to business corporations accounted for ¥3,131 billion ($28,221 million).

Credit Ratings (As of July 31, 2019)

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 ¥110.96 per US$1.00, the prevailing rate as of March 31, 2019.

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