UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May, 2003
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MITSUBISHI TOKYO FINANCIAL GROUP, INC.
(Translation of registrant's name into English)
4-1, Marunouchi 2-chome, Chiyoda-ku
Tokyo 100-6326, Japan
(Address of principal executive offices)
-----------------
[Indicate by check mark whether the registrant files or
will file annual reports under cover Form 20-F or Form 40-F.]
Form 20-F X Form 40-F
----- -----
[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.]
Yes No X
----- -----
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 26, 2003
MITSUBISHI TOKYO FINANCIAL GROUP, INC.
By: /s/ Atsushi Inamura
--------------------------------------
Name: Atsushi Inamura
Title: Chief Manager, General Affairs
Corporate Administration Division
Consolidated Summary Report
(under Japanese GAAP)
for the Fiscal Year Ended March 31, 2003
Date: May 26, 2003
Company name (code number): Mitsubishi Tokyo Financial Group, Inc. (8306)
(URL http://www.mtfg.co.jp)
Stock exchange listings: Tokyo, Osaka, New York, London
Headquarters: Tokyo
Representative: Shigemitsu Miki, President & CEO
For inquiry: Katsuhiko Ishizuka, Chief Manager - Financial Policy Division
(Phone) +81-3-3240-8211
Date of resolution of Board of Directors with respect
to the consolidated financial statements: May 26, 2003
Trading accounts: Established
1. Consolidated financial data for the year ended March 31, 2003
(1) Operating results
(in millions of yen except per share data and percentages)
----------------------------------------------------------------------------------------------------------------------------------
For the year ended March 31,
----------------------------
2003 2002
-------------------------------------------------------------------------------------------------------------------
Ordinary income 2,772,528 3,262,347
Change from the previous year (15.0)% -
-------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) (360,262) (289,345)
Change from the previous year - -
-------------------------------------------------------------------------------------------------------------------
Net income (loss) (161,495) (152,316)
Change from the previous year - -
-------------------------------------------------------------------------------------------------------------------
Net income (loss) per common share (30,238.64) (28,921.99)
-------------------------------------------------------------------------------------------------------------------
Net income per common and common equivalent share - -
-------------------------------------------------------------------------------------------------------------------
Net income (loss) as a percentage of shareholders' equity (6.2)% (5.1)%
-------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) as a percentage of total liabilities, (0.4)% (0.3)%
minority interest and shareholders' equity
-------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) as a percentage of ordinary income (13.0)% (8.9)%
-------------------------------------------------------------------------------------------------------------------
Notes:
1. Equity in earnings (loss) of affiliates
for the year ended:
March 31, 2003: (3,532) million of yen
March 31, 2002: (10,612) million of yen
2. Average number of shares outstanding for
the year ended:
March 31, 2003: (common stock) 5,616,357 shares
(preferred stock-class 1) 81,021 shares
(preferred stock-class 2) 100,000 shares
March 31, 2002: (common stock) 5,554,666 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
3. Changes in accounting policy: No
-1-
(2) Balance sheet highlights
(in millions of yen except per share data and percentages)
---------------------------------------------------------------------------------------------------------------------------
As of March 31,
----------------------------------------------------
2003 2002
---------------------------------------------------------------------------------------------------------------------------
Total assets 99,175,319 99,496,829
---------------------------------------------------------------------------------------------------------------------------
Shareholders' equity 3,046,420 3,324,445
---------------------------------------------------------------------------------------------------------------------------
Shareholders' equity as a percentage of total liabilities,
minority interest and shareholders' equity 3.1% 3.3%
---------------------------------------------------------------------------------------------------------------------------
Shareholders' equity per common share 417,951.31 516,832.48
---------------------------------------------------------------------------------------------------------------------------
Risk-adjusted capital ratio (based on the standards of (preliminary
the Bank for International Settlements, the "BIS") basis) 10.84% 10.30 %
---------------------------------------------------------------------------------------------------------------------------
Note: Number of shares outstanding as of:
March 31, 2003: (common stock) 6,228,850 shares
(preferred stock-class 1) 81,021 shares
(preferred stock-class 2) 100,000 shares
March 31, 2002: (common stock) 5,572,880 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
(3) Cash flows
(in millions of yen)
---------------------------------------------------------------------------------------------------------------
For the year ended March 31,
----------------------------------------
2003 2002
---------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 4,636,714 (36,150)
---------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (2,124,823) 125,290
---------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (186,820) (154,273)
---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of fiscal year 4,049,530 1,741,798
---------------------------------------------------------------------------------------------------------------
(4) Scope of consolidation and application of the equity method
Consolidated subsidiaries: 184 Affiliated companies accounted for by
the equity method: 31
(5) Change in the scope of consolidation and application of the equity method
Consolidated subsidiaries: Newly included: 13 Excluded: 15
Affiliated companies accounted for by
the equity method: Newly included: 1 Excluded: 7
2. Earning projections for the fiscal year ending March 31, 2004
(in millions of yen)
---------------------------------------------------------------------------------------------------------------
Ordinary income Ordinary profit Net income
---------------------------------------------------------------------------------------------------------------
For the six months ending September 30, 2003 1,395,000 150,000 70,000
---------------------------------------------------------------------------------------------------------------
For the year ending March 31, 2004 2,880,000 370,000 190,000
---------------------------------------------------------------------------------------------------------------
Projected net income per common share for the year ending March 31, 2004 (yen):
29,165.01
-2-
(Reference)
Formulas for computing ratios for the fiscal year ended March 31, 2003 are as
follows.
Net income per common share
Net income attributable to common shareholders
-----------------------------------------------------------
Average number of common stock for the fiscal year *
Net income per common and common equivalent share
Net income attributable to common shareholders + Adjustments in net income
--------------------------------------------------------------------------------
Average number of common stock for the fiscal year * + Common equivalent share
Net income as a percentage of shareholders' equity
Net income attributable to common shereholders
---------------------------------------------------------------------------x 100
{[Shareholders' equity at the beginning of the fiscal year - Number of
preferred stock at the beginning of the fiscal year x Issue price] +
[Shareholders' equity at fiscal year end - Number of preferred stock
at fiscal year end x Issue price]} / 2
Shareholders' equity per common share
Shareholders' equity at fiscal year end - Deduction from shareholders' equity**
--------------------------------------------------------------------------------
Number of common stock at fiscal year end *
Note: Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.2 "Accounting Standard for Earnings Per Share" issued by the
Accounting Standards Board of Japan (the "ASBJ") on September 25, 2002
and Financial Accounting Standards Implementation Guidance No.4
"Implementation Guidance for Accounting Standard for Earnings Per Share"
issued by the ASBJ on September 25, 2002.
Formula for computing projected earning ratio for the fiscal year ending March
31, 2004 is as follows.
Projected net income per common share
Projected net income attributable to common shareholders
-------------------------------------------------------------------------
Number of common stock at fiscal year end *
* excluding treasury stock and parent's common stock owned by subsidiaries
** number of preferred stock at fiscal year end x issue price + total
dividends on preferred stock
--------------------------------------------------------------------------------
This financial summary report and the accompanying financial highlights contain
forward looking statements and other information relating to the Company (such
statements and information are hereafter referred to as the "Forward-Looking
Statements"). The Forward-Looking Statements are not historical facts and
include, reflect or are otherwise based upon, among other things, the Company's
current projections, views, policies, business strategies, targets,
expectations, assumptions and evaluations with respect to general economic
conditions, the result of its operations, its financial condition, its
management in general and other future events.
Some Forward-Looking Statements represent targets that the Company's management
will strive to achieve through the successful implementation of the Company's
business strategies. Accordingly, they are inherently susceptible to
uncertainties, risks and changes in circumstances and are not guarantees of
future performance. The Company may not be successful in implementing its
business strategy, and actual results may differ materially, for a wide range of
possible reasons. Please see "3. Results of Operations and Financial Condition -
(1) Results of operations."
In light of the many risks, uncertainties and possible changes, you are advised
not to put undue reliance on the Forward-Looking Statements. The Company is
under no obligation - and expressly disclaim any obligation - to update or alter
the Forward-Looking Statements, except as may be required by any applicable laws
and regulations or stock exchange rules.
--------------------------------------------------------------------------------
-3-
1. Information on the Company
The Company is engaged primarily in the banking business and also conducts
trust business, securities business, asset management business and other
related financial businesses.
The Company's corporate governance structure and its major subsidiaries
are as follows:
-------------------------------------------------------------------------------------------------------------------------
General Meeting of Shareholders
-------------------------------------------------------------------------------------------------------------------------
Corporate Auditor
------------------
Board of
Corporate Auditors
-------------------------------------------------------------------------------------------------------------------------
Board of Directors Compliance Advisory Committee
-------------------------------------------------------------------------------------------------------------------------
Advisory Board Executive Committee Other Committees
-------------------------------------------------------------------------------------------------------------------------
Chief Planning Officer Chief Financial Officer Chief Risk Management Officer
-------------------------------------------------------------------------------------------------------------------------
Corporate Corporate Financial Corporate Risk Audit &
Administration Policy Policy Management Compliance
Division Division Division Division Division
-------------------------------------------------------------------------------------------------------------------------
Matters relating to the Matters relating to Matters relating to Matters relating to Matters relating to
General Meeting of business strategy raising capital, risk management the sound and
Shareholders, and business financial strategy and appropriate operation
executive secretaries, planning investment of subsidiary
human resources and management companies
general affairs
--------------------------------------------------------------------------------------------------------------------------
Major subsidiaries
--------------------------------------------------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd. The Mitsubishi Trust and Banking Corporation
--------------------------------------------------------------------------------------------------------------------------
-4-
2. Management Policy
(1) Principal management policy
The Company's management philosophy set forth below represents the core set
of principles that forms the foundation for our strategies and
decision-making process.
(Group Management Philosophy)
Founded on the key principles of trust and reliability,
Mitsubishi Tokyo Financial Group
contributes to the prosperity of its customers at home and abroad
and of the communities it serves, and
continuously creates social and economic value,
by providing comprehensive financial services.
(2) Basic policy regarding profit distribution
Given the public nature of a bank holding company, in order to strengthen
the Company's corporate constitution and continue sound management, the
Company endeavors to maintain stable dividends while maintaining the
Company's overall strength.
With respect to the annual dividends to be paid at the end of the period,
the Company plans to reduce the dividends per common share by (Yen)2,000 to
(Yen)4,000 in order to bolster the Company's capital structure and
strengthen the financial condition.
With respect to the preferred stock dividends to be paid for the end of the
period, the Company plans on the following: With respect to Class 1
Preferred Stock, a dividend in the amount of (Yen)41,250 (which together
with the interim dividend previously paid will total (Yen)82,500 per share
for the fiscal year) and with respect to Class 2 Preferred Stock, a
dividend in the amount of (Yen)8,100 (which together with the interim
dividend previously paid will total (Yen)16,200 per share for the fiscal
year).
(3) Basic policy relating to the possible lowering of the minimum investment
amount
With regard to the lowering of the minimum investment amount with respect
to the Company's stock, we do not believe the Company needs to take action
immediately. The Company, however, will continue to consider the
possibility of lowering the minimum investment amount to meet investors'
needs, taking into account the level of stock price, the number of
shareholders, liquidity issues and the transaction costs and potential
benefits of such an adjustment.
(4) Management targets/1/
The Company has set the following management targets for the year ended
March 31, 2006:
1. ROE
The Company is aiming to increase its ROE/2/ with a target of over 13%.
2. BIS
The Company is aiming to manage its assets and capital efficiently with a
target BIS ratio of approximately 12%.
--------------------
1 The assumptions for these targets are that in the year ending March 31, 2006
the Euro-yen rate (3 months): 0.6% (period average); yen-dollar exchange
rate:(Yen)120 (at the end of the period); actual GDP growth rate: 1.8%
2 ROE is calculated as follows:
Net income - Dividends on preferred stock x 100
--------------------------------------------------------------------------
{(Shareholders' equity at beginning of period - Number of preferred stocks
at beginning of period x Issue price - Land revaluation excess at
beginning of period - Unrealized gains on securities available for sale at
beginning of period) + (Shareholders' equity at end of period - Number of
preferred stocks at end of period x Issue price - Land revaluation excess
at end of period - Unrealized gains on securities available for sale at
end of period)} / 2
3. Consolidated Operating Profit (gyomu juneki) (adjusted to exclude write-down
on trust accounts and additions to general reserve for loan losses):
(Yen)1,140 billion.
4. Consolidated Net Income: The Company would like to achieve a consolidated
net income of(Yen)460 billion.
-5-
(5) Medium term management strategy
Through a further reform of its profit structure, the Company seeks to
build swiftly a business structure that can achieve stable growth.
In order to strive to achieve this target, the Company aims to restructure
the business model of the entire group by shifting to a more consolidated
and integrated management of the group.
In rebuilding the business model, Bank of Tokyo-Mitsubishi, Mitsubishi
Trust and Banking and Mitsubishi Securities will seek to reallocate their
resources, including personnel and facilities, to further enhance the
expertise of each group company, and to create a structure that can provide
customers with higher quality and more comprehensive financial services.
1. Retail business: Strengthening strategy and improving efficiency
The Company plans to strengthen operations and raise efficiency in the
growing retail business area. By developing strategies and through
integrating operations group-wide, the Company aims to achieve rapid
and customer-friendly delivery of the best products and services to
each customer through efficient channels.
2. Standardizing and integrating operations and systems
The Company further develops the standardization and integration of
office operations and systems, and pursues reduction of total group
costs while maintaining a high level of functionality, quality and
dependability.
3. Increasing expertise and operational efficiency
The Company plans to consolidate skills and functions within the group
to further increase expertise and raise operational efficiency and
productivity.
(6) Issues facing the company
The Japanese economy is in a deflationary state and the business
environment could remain unstable. In this environment, the Company is
striving to improve its business results by promptly addressing its
non-performing loan and shareholdings issues and moving towards an
"aggressive" business strategy.
In accordance with the Financial Services Agency's policy of halving the
non-performing loan ratio by the end of fiscal 2004, which is highlighted
in their "Program for Financial Revival", the Company aims to promote the
disposal of non-performing loans and the reduction of shareholdings in
order to strengthen its balance sheet. The Company seeks to increase its
profitability by increasing loan volume to creditworthy borrowers and
improving the risk-adjusted returns on the lending business, by expanding
the offerings of fee-generating value-added financial services in business
areas such as commercial banking, asset management and investment banking,
and by promoting cost efficiency through further streamlining the branch
network and personnel structure while maintaining and improving customer
convenience.
In order to effectively carry out these business objectives, the Company
intends to implement a consolidated, group management structure, while
enhancing the relationship and cooperation with its subsidiaries. The
Company will also review and modify functions and roles among the Company
and its subsidiaries within its consolidated management framework.
(7) Corporate governance principles and status of implementation of corporate
governance changes
(Corporate Governance Principles)
The "Group Management Philosophy" is the basic policy for forming
management strategies and all activities relating to the business decisions
the Company makes. The Company also established the "MTFG Code of Ethics"
which is a set of common values and ethical principles to be shared by the
employees of the Company. The Company is committed to improving the
corporate governance structure through the implementation of the "Group
Management Philosophy" and "MTFG Code of Ethics."
-6-
(MTFG Code of Ethics)
.. Establishment of Trust
----------------------
Fully cognizant of the importance of the Group's social responsibilities
and public role, we strive to maintain unwavering trust from society
through the sound and proper management of our business activities, based
on the principle of accountability.
.. Serving Our Clients First
-------------------------
We recognize that the satisfaction of our clients and their confidence in
MTFG form the foundation of the Group's very existence. As such, we
endeavor to always provide our clients with the highest quality products
and services best suited to their needs.
.. Sound and Transparent Management
--------------------------------
We endeavor to manage our affairs in a sound and transparent manner by
maintaining appropriate and balanced relationships with all stakeholders,
including clients, shareholders and others, while assuring fair, adequate
and timely disclosure of corporate information.
.. Strict Observance of Laws, Regulations, and Internal Rules
----------------------------------------------------------
We are committed to strictly observing relevant laws, regulations, and
internal rules and to acting with fairness and integrity in conformity
with the common values of society at large. As a diversified global
financial services group, we also make continuous efforts to operate in
ways that reflect internationally accepted standards.
.. Respect for Human Rights and the Environment
--------------------------------------------
We respect human rights and the environment and seek to co-exist in
harmony with society.
.. Disavowal of Anti-Social Elements
---------------------------------
We stand firmly against supporting the activities of any group or
individual that unlawfully threatens public order and safety.
(Status of Implementation of Corporate Governance Changes)
1. Corporate governance structures for decision making, administration and
supervision
The Board of Directors of the Company is comprised of ten directors, two of
whom are outside directors. The Board of Directors decides the
administration of affairs of the Company and supervises execution of duties
of the officers. The Company has a Board of Corporate Auditors pursuant to
the Japanese Commercial Code. The Board of Corporate Auditors of the
Company is comprised of five corporate auditors, two of whom are from
outside the Company. Pursuant to the audit policies and plans adopted by
the Board of Corporate Auditors, each corporate auditor oversees the
execution of duties by the officers by attending meetings, including the
Board of Directors meetings, and by reviewing business performance and
financial conditions of the Company.
Corporate Administration Division provides staffing support to all
directors and corporate auditors, including the outside directors and
outside corporate auditors.
Pursuant to the basic policies adopted by the Board of Directors, the
Executive Committee comprised of the Chairman, President and three Senior
Managing Directors, deliberates on and decides important management affairs
of the Company.
The Company has also set up various committees, including five committees
that serve as advisory bodies to the Executive Committee, the Compliance
Advisory Committee comprised of external lawyers and accountants and the
Advisory Board comprised of outside experts.
.. Management Planning Committee: The Management Planning Committee
------------------------------
deliberates on and follows up on overall group policies, capital policies
and financial planning. The committee convenes on a quarterly basis.
.. Business Planning Committee: The Business Planning Committee deliberates on
---------------------------
general management affairs and important issues related to business
operations of the Company. The committee convenes as needed.
.. Corporate Risk Management Committee: The Corporate Risk Management Committee
-----------------------------------
deliberates on important matters relating to risk management of the Company.
The committee convenes on a quarterly basis.
.. Audit & Compliance Committee: The Audit & Compliance Committee deliberates
----------------------------
on important matters relating to internal audits and legal compliance. The
committee convenes on a quarterly basis.
.. Disclosure Committee: The Disclosure Committee deliberates on the accuracy
--------------------
of disclosure and internal disclosure standards of the Company. The
committee convenes at least four times a year.
.. Compliance Advisory Committee: The Compliance Advisory Committee makes
-----------------------------
compliance related proposals and advice to the Board to improve the
effectiveness of the Company's compliance activities from an independent
standpoint. The committee convenes on a quarterly basis.
.. Advisory Board: The Advisory Board advises the Executive Committee on
--------------
all aspects of management from an independent standpoint. The committee
convenes semi-annually.
-7-
The Company's framework of operation and audit and the framework of internal
control are as follows:
--------------------------------------------------------------------------------
Shareholders
(Overseas/Domestic, Institutional/Individual)
--------------------------------------------------------------------------------
Mitsubishi Tokyo Financial Group, Inc.
--------------------------------------------------------------------------------
Proposal/Advice
--------------------------------------------------------------------------------
Compliance Advisory------------ Board of Board of
Committee Directors Corporate Auditors
----------------- ------------------
Outside Directors Outside Auditors
--------------------------------------------------------------------------------
Advisory Board----------------- Executive -------------Other Committees
Committee
--------------------------------------------------------------------------------
Advice Advice
--------------------------------------------------------------------------------
Corporate Corporate Financial Corporate Risk Audit &
Administration Policy Policy Management Compliance
Division Division Division Division Division
--------------------------------------------------------------------------------
The Company receives advice from external lawyers and accountants, if needed for
execution of duties.
2. Summary of related party transactions between the company and outside
corporate auditors and outside directors
The outside directors and outside corporate auditors have no personal ties
with other directors and corporate auditors, and do not have related party
transactions which are material or that are unusual in their nature or
conditions with the Company.
Ryotaro Kaneko, an outside director, also serves as President of Meiji Life
Insurance Company, with which the Company has a business relationship.
Kunio Ishihara, an outside director, also serves as President of Tokio
Marine & Fire Insurance Co., Ltd., with which the Company has a business
relationship.
3. Implementation of measures to strengthen the corporate governance structure
in the fiscal year ended March 2003
During fiscal year 2002, the Board of Directors met 15 times to decide the
administration of affairs, and the Executive Committee met 44 times to
deliberate on and decide important management affairs. The Board of
Corporate Auditors met 20 times and decided audit policies and plans for
the fiscal year. Pursuant to the audit policies and plans, each corporate
auditor oversaw the execution of duties by the officers by attending key
meetings, including the Board of Directors meetings, and by reviewing the
business performance and financial conditions of the Company.
The Management Planning Committee and the Business Planning Committee each
met three times during fiscal year 2002, and the Corporate Risk Management
Committee and the Audit & Compliance Committee each met quarterly during
fiscal year 2002, and all advised the Executive Committee. The Compliance
Advisory Committee met quarterly during fiscal year 2002 and advised and
made proposals to the Board. The Advisory Board met twice during fiscal
year 2002 and advised the Executive Committee. The Disclosure Committee was
established in May 2003, and has not met yet.
During fiscal year 2002, the Company took active steps with respect to the
disclosure of corporate information, including public disclosure of
quarterly financial information starting July, 2002, issuance of
"Mini-Disclosure" reports for individual customers and disclosure of
corporate information of the Company on its website.
-8-
3. Results of Operations and Financial Condition
(1) Results of operations
Although the European and United States economy began a recovery trend from the
first half of the fiscal year, uncertainty about the future grew afterwards as
international tensions heightened. During this period, steady economic growth
continued in Asian countries, lead by China, supported by strong domestic demand
in addition to strong exports. On the other hand, our economy in Japan showed
signs of recovery lead by exports in the first half of the fiscal year but
weakened in the latter half due to low levels of capital expenditures and
individual consumption. Further, consumer prices continued to fall as deflation
continued.
Regarding the financial environment during the fiscal year, the
federal fund interest rate was reduced from 1.75% to 1.25% in the United States,
and in Europe the interest rate was reduced twice. Furthermore, the Bank of
Japan supplied more monetary liquidity and also began purchasing equity
securities held by banks in September last year. During this time, short term
interest rates remained near zero percent and long term interest rates markedly
decreased. Moreover, stock prices were generally low throughout the fiscal year,
and the yen appreciated against the U.S. dollar starting out at the beginning of
the fiscal year in the (Yen)130 per U.S. dollar range and breaking below
(Yen)120 per U.S. dollar by the end of the fiscal year.
The Company's consolidated gross profits were (Yen)1,747.3 billion, an increase
of (Yen)35.6 billion over the previous fiscal year. There was a reduction in net
interest income as loan volume decreased and a decrease in trust fees that
resulted from transferring asset management operations to The Master Trust Bank
of Japan, Ltd., which was jointly established by life insurance companies and
trust banks, which was more than off set by increases in net fees and
commissions and profits from treasury operations.
General and administrative expenses were (Yen)991.2 billion, which appears on
its face to be a (Yen)24.3 billion increase over the previous fiscal year but in
fact was a result of our newly consolidating Mitsubishi Securities Co., Ltd. as
a subsidiary during the fiscal year. If the impact of that transaction is
excluded, the Company's general and administrative expenses decreased (Yen)31.4
billion from the previous fiscal year.
Provision for formula allowance for loan losses was (Yen)38.2 billion, remaining
similar level to the previous fiscal year. Although the discounted cash flow
method of determining reserves for claims under close observation was made
mandatory from this fiscal year, since the Company had already implemented the
method the Company unaffected by the change.
With respect to credit related costs, losses on loan charge-offs and provision
for specific allowance for loan losses decreased (Yen)301.0 billion, and total
credit costs including provision for formula allowance for loan losses were
(Yen)538.7 billion, fitting within the (Yen)764.2 billion of net business
profits before credit related costs. On the other hand, since we maximized the
acceleration of loan sales to the Resolution and Collection Corporation (the
"RCC") seeking the final disposal of problem loans, and sold approximately
(Yen)650 billion of loans on a book value basis, losses on the Company's sales
to the RCC amounted to (Yen)75.2 billion. As a result of such aggressive
dispositions, our consolidated risk-monitored loans decreased by (Yen)1,477.1
billion, a 37% decrease from the previous fiscal year to (Yen)2,569.4 billion.
As a result of the sharp decline in stock prices, net losses on equity
securities increased by (Yen)263.1 billion from the previous fiscal year to
(Yen)488.0 billion primarily due to write-downs of equity securities of
(Yen)348.7 billion. The Company also continued aggressive sales to an
exchange-traded fund and as a result, recorded (Yen)219.6 billion of losses on
sales of equity securities.
As a result of the above, ordinary loss were (Yen)360.2 billion and net loss,
after income tax benefit (including deferred income taxes) of (Yen)181.1
billion, was (Yen)161.4 billion.
-9-
In addition, ordinary loss by business segment is as follows: Banking segment
was (Yen)156.3 billion, Trust Banking segment was (Yen)169.3 billion, and
Securities segment was (Yen)34.1 billion. By geographic segment, whereas in
North America, Europe/Middle East, Asia/Oceania excluding Japan, the Company
recorded ordinary profit, in Japan and Latin America, the Company recorded
ordinary loss.
During the next fiscal year, the Company believes that there will be little
recovery in the economy. Interest rates will continue to be at their low
levels and financial demand will continue to be weak. The Company seeks to
increase its volume as well as interest spread (under the "Revitalizing the
Lending Business Project") and increase income from lending business as well
as strive to strengthen the fee income business. The Company believes that
its efforts to aggressively dispose of problem loans will continue to reap
positive results and credit related costs are declining. As a result of
reducing the Company's stock holdings and exposure to stock price
fluctuations, the Company believes that it will be able to reduce its losses
on equity securities.
Taking into considerations these assumptions, we have the following
projections for the year ending March 31, 2004.
------------------------------------------------------------------------------------------------
Consolidated ordinary income Consolidated ordinary profit Consolidated net income
------------------------------------------------------------------------------------------------
(Yen)2,880,000 million (Yen)370,000 million (Yen)190,000 million
------------------------------------------------------------------------------------------------
(Reference)
1. Projected net income per common share (consolidated) (Yen)29,165.01
2. Projected net income per common share (non-consolidated) (Yen)5,082.17
3. Projected dividend per share (non-consolidated) Common stock (Yen)4,000
Preferred stock-class 1 (Yen)82,500
Preferred stock-class 2 (Yen)16,200
The Company's business and results of operations may be materially affected
for a wide range of possible reasons (which may include those material to
investors), including:
.. Deterioration of economic conditions in Japan or elsewhere in the world
(especially in Asian and Latin American countries);
.. Increase of problem loans and credit-related expenses;
.. Further decline in stock prices in Japan or elsewhere in the world;
.. Possible negative effects of other companies' efforts to reduce their
shareholdings;
.. Inability to maintain BIS capital ratios above minimum levels;
.. Increase in competitive pressures;
.. Decline in the results of operations and financial conditions of the
Company's subsidiaries;
.. Risks relating to trading and investment activities;
.. Downgrade of the Company's credit ratings and the negative effect on the
Company's treasury operations;
.. Fluctuations in foreign currency exchange rates;
.. Changes in interest rates in Japan or elsewhere in the world;
.. Risks relating to the increase in corporate credibility issues;
.. Events that obligate the Company to compensate for losses in loan trusts and
jointly operated designated money trusts;
.. Risks accompanying the expansion of the Company's operation and the range of
products and services;
.. Ineffectiveness or failure of the Company's business strategies;
.. Risks relating to the increase of the Company's pension obligations;
.. Imposition of bank taxes or introduction of new taxes applicable to banks;
.. Risks relating to regulatory developments or changes in laws, rules,
including accounting rules, governmental policies and economic controls; and
.. Risks inherent in the Company's holding company structure.
For a detailed discussion of these risks and other risks, please see the
Company's public filings.
-10-
(2) Financial condition
Loans and bills discounted decreased (Yen)2,112.4 billion from the previous
fiscal year end due to decreased overseas loans reflecting the stronger yen and
final disposal of problem loans. Of the total decrease, overseas branches and
subsidiaries accounted for (Yen)1,292.6 billion, disposal of problem loans
accounted for (Yen)486.9 billion and charge-offs during the fiscal year
accounted for (Yen)292.5 billion. As a result of aggressively promoting housing
loans with an interest rate of 1%, housing loans increased (Yen)565.1 billion.
As a result of acceleration of final disposal of problem loans, the problem loan
ratio decreased from 8.1% to 5.3% and the Company is now getting closer to its
4% objective, which, if achieved, would be a reduction by half of the Company's
problem loans.
Investment securities, primarily Japanese Government Bonds and
foreign bonds, increased as a whole, but domestic equity securities decreased by
(Yen)1,907.2 billion from the previous fiscal year end to (Yen)3,231.3 billion
as a result of aggressive selling efforts and strict write downs relating to
domestic equity securities.
Deferred tax assets increased by (Yen)330.5 billion from the previous fiscal
year end, expecting an increase in tax savings in the future due to the adoption
of consolidated corporate-tax system.
On the other hand, deposits increased by (Yen)2,716.9 billion from the previous
fiscal year end mainly as a result of an increase in domestic individual
deposits.
Total shareholders' equity decreased by (Yen)278.0 billion from the previous
fiscal year end to (Yen)3,046,4 billion. Although we raised (Yen)223.1 billion
through a public offering, total shareholders' equity decreased by (Yen)278.0
billion due to a net loss of (Yen)161.4 billion and a decrease in unrealized
gains on securities available for sale of (Yen)307.4 billion.
Cash flows from operating activities recorded an increase of (Yen)4,636.7
billion primarily due to an increase in deposits, but cash flows from investing
activities recorded a decrease of (Yen)2,124.8 billion primarily due to the
purchases of investment securities. Cash flows from financing activities
recorded a decrease of (Yen)186.8 billion primarily due to the redemption of
subordinated bonds, which was partially off set by proceeds through public
offering. As a result of the above, cash and cash equivalents at end of the
fiscal year was (Yen)4,049.5 billion.
As a result of our efforts to bolster our capital and improve the risk-adjusted
capital ratio by conducting a public offering of common stock as well as a
secondary offering of common stock owned by the Company's subsidiary banks in
March 2003, as of March 31, 2003 the Company's Tier I capital was (Yen)3,128.6
billion, an increase of (Yen)75.5 billion from September 30, 2002. Risk-adjusted
assets declined by (Yen)2,140.6 billion from September 30, 2002 to (Yen)55,049.6
billion primarily due to removal of problem loans from balance sheet and
disposal of stock holdings.
As a result, consolidated risk-adjusted capital ratio (based on the
standards of the BIS) at March 31, 2003 was 10.84%, a 0.34% increase from
September 30, 2002. The trend of consolidated risk-adjusted capital ratio
for the fiscal year ended March 31, 2003 is as follows:
(in billions of yen except percentages)
----------------------------------------------------------------------------------------------------------
March 31, 2002 September 30, 2002 March 31, 2003
----------------------------------------------------------------------------------------------------------
Tier I capital 3,181.1 3,053.1 3,128.6
-----------------------------------------------------------------------------------------------------
Tier II capital (*) 3,145.3 2,942.8 2,847.6
-----------------------------------------------------------------------------------------------------
Tier III capital (*) - 29.8 30.0
-----------------------------------------------------------------------------------------------------
Deductions from total qualifying capital 105.9 23.7 37.9
-----------------------------------------------------------------------------------------------------
Total qualifying capital 6,220.5 6,002.0 5,968.4
----------------------------------------------------------------------------------------------------------
Risk-adjusted assets 60,335.8 57,190.3 55,049.6
----------------------------------------------------------------------------------------------------------
Consolidated risk-adjusted capital ratio 10.30% 10.49% 10.84%
(based on the standards of the BIS)
----------------------------------------------------------------------------------------------------------
-------------
(*) Tier II capital and Tier III capital represent amounts includable as
qualifying capital.
-11-
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Balance Sheets
---------------------------------------------------------------------------------------------------------------------
As of March 31, Increase/
2003(A) 2002(B) (Decrease)
(in millions of yen) (A) - (B)
---------------------------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 8,235,754 6,421,747 1,814,007
Call loans and bills bought 551,357 1,304,328 (752,971)
Receivables under resale agreements 482,776 1,047,717 (564,940)
Receivables under securities borrowing transactions 2,475,841 -- 2,475,841
Commercial paper and other debt purchased 500,614 460,912 39,701
Trading assets 5,612,937 5,340,726 272,210
Money held in trust 415,558 304,060 111,497
Investment securities 24,158,330 23,109,720 1,048,610
Allowance for losses on investment securities (2,067) (1,500) (566)
Loans and bills discounted 46,950,363 49,062,795 (2,112,431)
Foreign exchanges 609,944 560,783 49,161
Other assets 3,213,143 5,651,987 (2,438,843)
Premises and equipment 988,407 981,982 6,424
Deferred debenture discounts and other costs 9 158 (148)
Deferred tax assets 1,362,692 1,032,107 330,584
Deferred tax assets on land revaluation loss 1,593 4,985 (3,391)
Customers' liabilities for acceptances and guarantees 4,915,353 5,873,954 (958,600)
Allowance for loan losses (1,297,292) (1,659,640) 362,348
---------------------------------------------------------------------------------------------------------------------
Total assets 99,175,319 99,496,829 (321,509)
---------------------------------------------------------------------------------------------------------------------
Liabilities:
Deposits 62,624,363 59,907,378 2,716,984
Negotiable certificates of deposit 4,045,901 3,200,325 845,575
Debentures 636,060 2,275,570 (1,639,510)
Call money and bills sold 3,740,653 3,977,859 (237,205)
Payables under repurchase agreements 3,162,054 3,518,977 (356,922)
Payables under securities lending transactions 3,883,443 -- 3,883,443
Commercial paper 763,208 799,367 (36,159)
Trading liabilities 1,567,512 667,926 899,586
Borrowed money 1,512,729 1,844,566 (331,836)
Foreign exchanges 532,947 513,899 19,047
Short-term corporate bonds 10,000 -- 10,000
Bonds and notes 3,546,979 3,402,004 144,975
Convertible bonds -- 243,924 (243,924)
Bonds with warrants 50,528 -- 50,528
Due to trust account 1,401,617 2,282,224 (880,607)
Other liabilities 3,163,552 7,241,446 (4,077,893)
Reserve for employees' bonuses 17,028 14,304 2,724
Reserve for employees' retirement benefits 36,976 27,023 9,953
Reserve for losses on real estate-collateralized loans sold -- 7,575 (7,575)
Reserve for expenses related to EXPO 2005 Japan 50 -- 50
Reserves under special laws 799 436 363
Deferred tax liabilities 60,836 47,055 13,780
Deferred tax liabilities on land revaluation excess 133,649 128,439 5,210
Acceptances and guarantees 4,915,353 5,873,954 (958,600)
---------------------------------------------------------------------------------------------------------------------
Total liabilities 95,806,248 95,974,260 (168,012)
---------------------------------------------------------------------------------------------------------------------
Minority interest 322,650 198,122 124,527
---------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Capital stock 1,258,052 1,146,500 111,552
Capital surplus 932,016 834,644 97,371
Retained earnings 962,347 1,189,718 (227,370)
Land revaluation excess 195,418 201,654 (6,236)
Unrealized gains (losses) on securities available for sale (223,432) 84,016 (307,448)
Foreign currency translation adjustments (73,499) (26,699) (46,800)
Less treasury stock (4,482) (105,389) 100,907
---------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 3,046,420 3,324,445 (278,024)
---------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest and shareholders' equity 99,175,319 99,496,829 (321,509)
---------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
-12-
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Operations
------------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2003(A) 2002(B) (A) - (B)
------------------------------------------------------------------------------------------------------------------------------------
Ordinary income:
Interest income:
Interest on loans and discounts 1,016,256 1,258,319 (242,063)
Interest and dividends on securities 378,334 422,043 (43,709)
Interest on call loans and bills bought 6,687 9,381 (2,694)
Interest on receivables under resale agreements 17,376 52,069 (34,692)
Interest on receivables under securities borrowing transactions 26,327 -- 26,327
Interest on due from banks 71,848 174,848 (102,999)
Other interest income 174,808 308,318 (133,510)
----------------------------------------------------------------------------------------------------------------------------
Total interest income 1,691,639 2,224,981 (533,342)
Trust fees 101,442 122,779 (21,337)
Fees and commissions 428,014 401,483 26,530
Trading profits 79,907 58,402 21,505
Other business income 278,645 206,315 72,330
Other ordinary income 192,878 248,384 (55,505)
-----------------------------------------------------------------------------------------------------------------------------------
Total ordinary income 2,772,528 3,262,347 (489,818)
-----------------------------------------------------------------------------------------------------------------------------------
Ordinary expenses:
Interest expense:
Interest on deposits 231,832 471,203 (239,371)
Interest on debentures and amortization of debenture discounts 8,504 20,573 (12,069)
Interest on negotiable certificates of deposit 9,935 34,299 (24,364)
Interest on call money and bills sold 12,787 19,110 (6,323)
Interest on payables under repurchase agreements 43,064 64,465 (21,400)
Interest on payables under securities lending transactions 43,111 -- 43,111
Interest on commercial paper 4,583 14,276 (9,693)
Interest on borrowed money 55,839 71,433 (15,593)
Interest on short-term corporate bonds 0 -- 0
Interest on bonds and notes 75,967 96,158 (20,191)
Amortization of bond discounts 21 22 (0)
Interest on convertible bonds -- 7,549 (7,549)
Interest on bonds with warrants 4,969 -- 4,969
Other interest expense 143,904 320,757 (176,853)
----------------------------------------------------------------------------------------------------------------------------
Total interest expense 634,520 1,119,850 (485,329)
Fees and commissions 73,296 63,085 10,211
Trading losses -- 3,813 (3,813)
Other business expenses 126,198 118,470 7,727
General and administrative expenses 1,048,806 1,009,848 38,957
Other ordinary expenses:
Provision for allowance for loan losses 146,052 388,333 (242,281)
Other 1,103,916 848,291 255,625
----------------------------------------------------------------------------------------------------------------------------
Total other ordinary expenses 1,249,968 1,236,624 13,344
-----------------------------------------------------------------------------------------------------------------------------------
Total ordinary expenses 3,132,790 3,551,693 (418,902)
-----------------------------------------------------------------------------------------------------------------------------------
Ordinary loss (360,262) (289,345) (70,916)
-----------------------------------------------------------------------------------------------------------------------------------
Special gains:
Gains on sales of premises and equipment 3,862 6,479 (2,617)
Gains on loans charged-off 44,281 60,660 (16,379)
Other special gains 408 160 247
-----------------------------------------------------------------------------------------------------------------------------------
Total special gains 48,552 67,300 (18,748)
-----------------------------------------------------------------------------------------------------------------------------------
Special losses:
Losses on sales of premises and equipment 24,542 18,798 5,744
Provision for reserve for contingent liabilities from brokering of
securities transactions 257 73 183
Other special losses 4,232 56,167 (51,935)
-----------------------------------------------------------------------------------------------------------------------------------
Total special losses 29,031 75,039 (46,007)
-----------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes and others (340,742) (297,084) (43,657)
-----------------------------------------------------------------------------------------------------------------------------------
Income taxes-current 55,919 34,818 21,101
Income taxes-deferred (237,065) (198,311) (38,753)
Minority interest 1,898 18,725 (16,826)
-----------------------------------------------------------------------------------------------------------------------------------
Net loss (161,495) (152,316) (9,179)
-----------------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
-13-
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statement of Capital Surplus and Retained Earnings
------------------------------------------------------------------------------------------------------------------------
For the year ended
(in millions of yen) March 31,2003
------------------------------------------------------------------------------------------------------------------------
Balance of capital surplus at beginning of fiscal year 834,644
Increase: 111,552
Issuance of common stock due to capital increase 111,552
Decrease: (14,180)
Losses on sales of treasury stock, net of income taxes (14,180)
------------------------------------------------------------------------------------------------------------------------
Balance of capital surplus at end of fiscal year 932,016
------------------------------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 1,189,718
Increase: 3,228
Change in ownership percentage to a consolidated subsidiary
due to stock repurchase by the subsidiary 2,648
Decrease in companies accounted for by the equity method 580
Decrease: (230,599)
Net loss (161,495)
Cash dividends (45,943)
Bonuses to directors of consolidated subsidiaries (3)
Reduction in land revaluation excess (1,420)
Change in ownership percentage to consolidated subsidiaries and
a company accounted for by the equity method due to their merger (17,725)
Increase in consolidated subsidiaries and companies accounted for
by the equity method (4,011)
------------------------------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 962,347
------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
Consolidated Statement of Retained Earnings
------------------------------------------------------------------------------------------------------------------------
For the year ended
(in millions of yen) March 31,2002
------------------------------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 1,367,927
Increase: 3,520
Reduction in land revaluation excess 3,134
Increase in companies accounted for by the equity method 385
Decrease: (29,412)
Cash dividends (28,268)
Bonuses to directors of consolidated subsidiaries (12)
Change in ownership percentage to consolidated subsidiaries and
companies accounted for by the equity method due to business combination (1,131)
Net loss (152,316)
------------------------------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 1,189,718
------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
-14-
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
-----------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2003(A) 2002(B) (A) - (B)
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Loss before income taxes and others (340,742) (297,084) (43,657)
Depreciation 86,242 60,633 25,608
Goodwill amortization (3,937) 29,297 (33,234)
Equity in loss (earnings) of affiliates 3,532 10,612 (7,079)
Increase (decrease) in allowance for loan losses (355,043) 68,758 (423,801)
Increase (decrease) in allowance for losses on investment securities 566 1,427 (860)
Increase (decrease) in reserve for losses on real estate-collateralized
loans sold (7,575) (29,480) 21,904
Increase (decrease) in reserve for employees' bonuses 743 14,262 (13,519)
Increase (decrease) in reserve for employees' retirement benefits 228 (114,449) 114,677
Increase (decrease) in reserve for expenses related to EXPO 2005 Japan 50 -- 50
Interest income recognized on statement of operations (1,691,639) (2,224,981) 533,342
Interest expenses recognized on statement of operations 634,520 1,119,850 (485,329)
Investment securities losses (gains) 400,864 202,823 198,040
Losses (gains) on money held in trust 7,421 4,823 2,597
Foreign exchange losses (gains) (32,716) (309,805) 277,089
Losses (gains) on sales of premises and equipment 20,680 12,339 8,340
Net decrease (increase) in trading assets 100,860 792,187 (691,326)
Net increase (decrease) in trading liabilities 848,319 (2,581,880) 3,430,200
Adjustment of unsettled trading accounts (601,361) (291,024) (310,337)
Net decrease (increase) in loans and bills discounted 1,668,901 (491,866) 2,160,767
Net increase (decrease) in deposits 3,077,728 3,476,921 (399,192)
Net increase (decrease) in negotiable certificates of deposit 863,841 (617,471) 1,481,313
Net increase (decrease) in debentures (1,639,510) (1,136,679) (502,830)
Net increase (decrease) in borrowed money (excluding subordinated
borrowings) (304,049) 357,121 (661,171)
Net decrease (increase) in due from banks (excluding cash equivalents) 477,598 1,621,264 (1,143,666)
Net decrease (increase) in call loans and bills bought and others 1,208,579 2,342,085 (1,133,506)
Net decrease (increase) in receivables under securities borrowing
transactions (217,281) 425,635 (642,917)
Net increase (decrease) in call money and bills sold and others (695,559) (2,636,899) 1,941,340
Net increase (decrease) in commercial paper (75,419) 310,281 (385,700)
Net increase (decrease) in payables under securities lending
transactions 475,235 (1,411,961) 1,887,197
Net decrease (increase) in foreign exchanges (assets) (49,161) 252,186 (301,347)
Net increase (decrease) in foreign exchanges (liabilities) 19,047 80,976 (61,929)
Net increase (decrease) in issuance and redemption of short-term corporate
bonds 10,000 -- 10,000
Net increase (decrease) in issuance and redemption of unsubordinated
bonds and notes 401,567 263,009 138,557
Net increase (decrease) in due to trust account (880,607) (1,364,626) 484,018
Interest income (cash basis) 1,772,695 2,369,236 (596,541)
Interest expenses (cash basis) (718,006) (1,323,986) 605,979
Other 215,211 1,068,957 (853,745)
-------------------------------------------
Sub-total 4,681,824 52,494 4,629,330
Income taxes (45,110) (88,644) 43,534
-------------------------------------------
Net cash provided by (used in) operating activities 4,636,714 (36,150) 4,672,865
Cash flows from investing activities:
Purchases of investment securities (44,807,196) (36,929,340) (7,877,855)
Proceeds from sales of investment securities 27,103,131 28,556,435 (1,453,303)
Proceeds from maturities of investment securities 15,702,239 8,448,217 7,254,022
Increase in money held in trust (162,435) (289,742) 127,306
Decrease in money held in trust 64,037 380,991 (316,953)
Purchases of premises and equipment (42,775) (62,489) 19,714
Proceeds from sales of premises and equipment 19,099 21,219 (2,120)
Purchases of equity of newly consolidated subsidiaries (923) -- (923)
-------------------------------------------
Net cash provided by (used in) investing activities (2,124,823) 125,290 (2,250,113)
Cash flows from financing activities:
Increase in subordinated borrowings 116,000 91,062 24,937
Decrease in subordinated borrowings (137,842) (182,562) 44,720
Increase in subordinated bonds and notes and convertible bonds -- 176,800 (176,800)
Increase in subordinated bonds and notes and bonds with warrants 189,757 -- 189,757
Decrease in subordinated bonds and notes and convertible bonds -- (243,649) 243,649
Decrease in subordinated bonds and notes and bonds with warrants (625,897) -- (625,897)
Proceeds from issuance of common stock 223,104 -- 223,104
Proceeds from issuance of common stock to minority shareholders 16,195 12,218 3,976
Dividend paid by the parent (46,702) (28,272) (18,429)
Dividend paid by subsidiaries to minority shareholders (3,414) (5,071) 1,656
Purchases of treasury stock (965) (7,393) 6,428
Proceeds from sales of treasury stock 82,944 32,593 50,350
-------------------------------------------
Net cash provided by (used in) financing activities (186,820) (154,273) (32,546)
-------------------------------------------
Effect of exchange rate changes on cash and cash equivalents (48,536) 69,919 (118,455)
-------------------------------------------
Net increase (decrease) in cash and cash equivalents 2,276,534 4,785 2,271,749
Cash and cash equivalents at beginning of fiscal year 1,741,798 1,734,069 7,729
Increase in cash and cash equivalents due to consolidation of new subsidiaries 34,811 2,943 31,867
Decrease in cash and cash equivalents due to deconsolidation of subsidiaries (3,614) -- (3,614)
-------------------------------------------
Cash and cash equivalents at end of fiscal year 4,049,530 1,741,798 2,307,731
-----------------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
-15-
Notes to Consolidated Financial Statements
Notes related to the Consolidated Balance Sheet as of March 31, 2003 are as
follows:
1. Basis of Presentation
The accompanying Consolidated Balance Sheet of Mitsubishi Tokyo Financial
Group, Inc. ("MTFG") and its subsidiaries is compiled as required by the Banking
Law and in conformity with accounting principles and practices generally
accepted in Japan, which are different in certain respects as compared to the
application and disclosure requirements of International Accounting Standards.
The Consolidated Balance Sheet is not intended to present the financial position
in accordance with accounting principles and practices generally accepted in
countries and jurisdictions other than Japan. For the convenience of readers,
the presentation is modified in certain respects from the original Japanese
report. The amounts are presented in millions of yen and are rounded down to the
nearest million.
2. Trading Assets and Liabilities
Transactions for trading purposes (for purposes of seeking to capture gains
arising from short-term changes in interest rates, currency exchange rates or
market prices of securities and other market-related indices or from gaps among
markets) are included in Trading assets and Trading liabilities on a trade date
basis.
Trading securities and monetary claims purchased for trading purposes are
stated at market value at fiscal year end. Trading-related financial derivatives
such as swaps, futures or options are stated at the estimated amounts that would
be received or paid for settlement if such transactions were terminated at
fiscal year end.
3. Investment Securities
Debt securities being held to maturity are stated at amortized cost
computed by the moving-average method (straight-line amortization). Other
securities (securities available for sale) whose current value can be estimated
are stated at market value at fiscal year end (sale cost is calculated by the
moving-average method) and other non-marketable securities are stated at cost or
amortized cost computed by the moving-average method. Unrealized gains and
losses on securities available for sale are included in shareholders' equity,
net of income taxes.
4. Securities in Money Held in Trust
Securities included in Money held in trust are stated at the same method as
described in notes 2. and 3.
5. Derivatives
Derivatives for purposes other than trading are stated at market value.
6. Premises and Equipment
Depreciation for buildings and equipment of MTFG and its domestic banking
subsidiary and trust banking subsidiary is computed using the declining-balance
method.
Principal estimated useful lives are as follows:
Buildings 15 years to 50 years
Equipment and furniture 5 years to 20 years
Depreciation for buildings and equipment of other consolidated subsidiaries
is computed principally using the straight-line method based on the estimated
useful lives.
-16-
7. Software
Costs of computer software developed or obtained for internal use are
deferred and amortized using the straight-line method over the estimated useful
lives of 5 years.
8. Discounts of Debentures and Bonds, and Issuance Costs of Bonds and Stock
Discounts of debentures and bonds are deferred and amortized using the
straight-line method over the lives of the debentures and bonds. Issuance costs
of bonds and stock are charged to expenses when incurred.
9. Translation of Foreign Currency Items
Foreign currency assets and liabilities and overseas branches' accounts of
MTFG's domestic banking subsidiary and trust banking subsidiary are principally
translated into yen equivalents at the exchange rates prevailing at fiscal year
end, except equity securities of affiliated companies which are translated into
yen equivalents at the exchange rates prevailing at the acquisition date for
those securities.
In the previous fiscal year, MTFG's domestic consolidated subsidiaries had
adopted the Industry Audit Committee Report No.20, "Temporary Treatment of
Accounting and Auditing Concerning Accounting for Foreign Currency Transactions
in the Banking Industry", issued by the Japanese Institute of Certified Public
Accountants (the "JICPA") on November 14, 2000. Since the current fiscal year,
however, MTFG's domestic consolidated subsidiaries have adopted the Industry
Audit Committee Report No.25, "Treatment of Accounting and Auditing Concerning
Accounting for Foreign Currency Transactions in the Banking Industry", issued by
the JICPA on July 29, 2002.
In the current fiscal year, as MTFG's domestic consolidated subsidiaries
have adopted the transitional applications described in the Industry Audit
Committee Report No.25, "fund swap transactions", "currency swap transactions"
and "treatment of internal contract method and intercompany transactions" are
accounted for in the same method as before. The translation difference of
forward exchange transactions and other relevant transactions are presented with
the net balance of the related asset or liability.
For fund swap transactions of MTFG's domestic consolidated subsidiaries,
the amounts on the balance sheet are net yen-conversions of the principal
equivalents of assets and liabilities using the fiscal-year-end exchange rate.
Differences between spot and forward rates in fund swap transactions are
recorded in interest income or expense on an accrual basis for the period from
the settlement date of spot foreign exchange to the settlement date of forward
foreign exchange. Therefore, accrued interest income or expenses are recognized
at fiscal year end.
Fund swap transactions are foreign exchange swaps, and consist of spot
foreign exchange either bought or sold and forward foreign exchange either sold
or bought. Such transactions are contracted for the purpose of funds lending or
borrowing in a different currency. Fund swap transactions are used to convert
the principal equivalent amount into spot foreign exchange bought or sold with
regard to the corresponding funds borrowing or lending. Also, such transactions
convert the corresponding principal equivalents and foreign currency equivalents
to pay and receive, whose amounts and due dates are predetermined at the time of
the transactions, into forward foreign exchange either bought or sold.
For currency swap transactions which are for the purpose of funds
borrowing/lending in different currencies and for which spot/forward are flat
type, which means that paying or receiving amounts at the time of the currency
swap contract are equal to receiving or paying amounts at the currency swap
maturity dates and the swap rate applied to principal and interest is the
current market rate (including the currency swap transactions which are that the
principal amount of one counterparty is revised in order to reflect each
exchange rate at interest payment dates and are judged as spot/forward flat type
for each interest payment date), the amounts on the balance sheet are net
positions of financial asset and liability equivalents translated by using the
fiscal-year-end exchange rate. The equivalent amounts of interest to exchange
are recorded in interest income or expense on an accrual basis for the
corresponding contract period. Therefore, accrued interest income or expenses
are recognized at fiscal year end.
Foreign currency assets and liabilities of other consolidated subsidiaries
are principally translated into yen equivalents at the exchange rates prevailing
at fiscal year end of each company.
-17-
10. Allowance for Loan Losses
An allowance for loan losses of MTFG's primary domestic consolidated
subsidiaries is provided as detailed below, pursuant to the internal rules for
self-assessment of asset quality and the internal rules for providing allowances
for credit losses:
For claims to debtors who are legally bankrupt (due to bankruptcy, special
liquidation, suspension of transactions with banks by the rules of clearing
houses, etc.) or virtually bankrupt, an allowance is provided based on the
amount of claims, after the charge-off as stated below, net of amounts expected
to be collected through the disposal of collateral or execution of guarantees.
For claims to debtors who are likely to become bankrupt for which future
cash flows could not be reasonably estimated, an allowance is provided for the
amount considered to be necessary based on an overall solvency assessment
performed for the amount of claims, net of amounts expected to be collected
through the disposal of collateral or execution of guarantees.
For claims to debtors who are likely to become bankrupt and to be closely
watched for which future cash flows could be reasonably estimated, an allowance
is provided for the difference between the present value of expected future cash
flows discounted at the contracted interest rate and the carrying value of the
claim.
For other claims, an allowance is provided based on historical loan loss
experience.
The allowance for loans to specific foreign borrowers is provided based on
the amount of expected losses due to the political and economic situation of
their respective countries.
All claims are assessed by the branches and credit supervision divisions
based on the internal rules for self-assessment of asset quality. The credit
examination divisions, which are independent from branches and credit
supervision divisions, subsequently conduct audits of their assessments, and an
allowance is provided based on audit results.
For collateralized or guaranteed claims to debtors who are legally bankrupt
or virtually bankrupt, the amount of claims exceeding the estimated value of
collateral or guarantees, which is deemed uncollectible, has been charged-off
and the amount was (Yen)711,669 million.
An allowance for loan losses of other consolidated subsidiaries is provided
based on historical loan losses experience or estimated collectibility of
specific claims.
11. Allowance for Losses on Investment Securities
An allowance for losses on investment securities is provided based on the
estimated losses on non-marketable debt securities.
12. Reserve for Employees' Bonuses
A reserve for employees' bonuses is provided for the payment of employees'
bonuses based on estimated amounts of the future payments attributed to the
current fiscal year.
13. Reserve for Employees' Retirement Benefits
A reserve for employees' retirement benefits is provided for the payment of
employees' retirement benefits based on estimated amounts of the actuarial
retirement benefit obligation and the related pension assets. Prior service cost
is amortized using the straight-line method over 10 years. Net actuarial gain
(loss) is amortized using the straight-line method over 10 years commencing from
the next fiscal year of incurrence. The unrecognized net retirement benefit
obligation at the adoption of new accounting standard is being amortized using
the straight-line method over 5 years.
-18-
14. Equipment Used under Finance Lease Agreements
Equipment used under finance lease agreements is accounted for as equipment
leased under operating leases, except for those leases which transfer ownership
of leased equipment to the lessee, in which case the equipment is capitalized.
15. Method of Hedge Accounting
The method of hedge accounting is a "Macro Hedge" in which MTFG's domestic
banking subsidiary and trust banking subsidiary manage interest rate risks as a
whole arising from various financial assets and liabilities with derivatives
transactions in conformity with the transitional applications described in the
Industry Audit Committee Report No.24, "Treatment of Accounting and Auditing of
Application of Accounting Standard for Financial Instruments in the Banking
Industry", issued by the JICPA on February 13, 2002. They apply risk adjustment
approaches based on the Industry Audit Committee Report No.15, "Temporary
Treatment of Accounting and Auditing of Application of Accounting Standard for
Financial Instruments in the Banking Industry", issued by the JICPA on February
15, 2000. The effectiveness of the macro hedge is reviewed for a reduction in
interest rate risk exposure and for the actual risk amount of derivatives within
the permitted risk amount under their risk control policies.
They also apply deferral hedge accounting to the exchange risk of equity
securities of affiliated companies in foreign currency and fair value hedge
accounting to the exchange risk of securities available for sale in foreign
currency (other than bonds) as "portfolio hedges" defined under "Accounting
Standard for Financial Instruments" when the hedged foreign currency securities
are specified prior to the inception of the transaction and spot and forward
liabilities exist on a foreign currency basis that exceed acquisition costs of
the foreign currency securities designated as hedged items.
Other consolidated subsidiaries apply deferral hedge accounting, fair value
hedge accounting or exceptional treatments permitted for interest rate swaps for
certain assets and liabilities.
16. Consumption Taxes
The National Consumption Tax and the Local Consumption Tax are excluded
from transaction amounts. The portion of the National Consumption Tax and the
Local Consumption Tax, which were paid on the purchase of premises and equipment
and which are not deductible as a tax credit, are charged to expenses when
incurred.
17. Reserve for Expenses Related to EXPO 2005 Japan
A reserve for expenses related to EXPO 2005 Japan is provided for the
expenses related to the participation in the EXPO 2005 Japan to be held in Aichi
Prefecture in 2005. The reserve is provided pursuant to Article 287-2 of the
Commercial Code and includes the allowance provided pursuant to Article 68-52 of
the Special Taxation Measures Law.
18. Reserves under Special Laws
Pursuant to Article 82 of the Financial Futures Transactions Law, a reserve
for contingent liabilities from brokering of financial futures transactions of
(Yen)58 million was provided.
Pursuant to Article 51 of the Securities and Exchange Law, a reserve for
contingent liabilities from brokering of securities transactions of (Yen)741
million was provided.
19. Consolidated Corporate-tax System
Since the current fiscal year, MTFG and certain domestic consolidated
subsidiaries have adopted consolidated corporate-tax system, with MTFG being a
parent company under the system.
20. Due from Directors of MTFG
Due from directors of MTFG was (Yen)86 million.
-19-
21. Accumulated Depreciation
Accumulated depreciation on premises and equipment was (Yen)639,823
million.
22. Accumulated Deferred Gains on Sales of Real Estate
Accumulated deferred gains on sales of real estate of (Yen)59,433 million
were deducted from the acquisition cost of newly acquired premises and
equipment.
23. Leased Equipment
A portion of equipment, including computer equipment, used under lease
agreements is not reflected on the Consolidated Balance Sheet.
24. Nonaccrual Loans
Loans to customers in bankruptcy and past due loans are included in Loans
and bills discounted, and the amounts were (Yen)96,530 million and
(Yen)1,208,106 million, respectively. The amount of past due loans included
loans of (Yen)22,634 million entrusted through the managed trust method to the
Resolution and Collection Corporation, which facilitates the removal of problem
loans from balance sheet.
Loans are generally placed on nonaccrual status when substantial doubt is
judged to exist as to ultimate collectibility of either principal or interest if
they are past due for a certain period or for other reasons. Loans to customers
in bankruptcy represent nonaccrual loans, after the partial charge-off of claims
deemed uncollectible, to debtors who are legally bankrupt, which are defined in
Article 96, Paragraph 1, Subparagraph 3 and 4 of Enforcement Ordinance for the
Corporation Tax Law. Past due loans are nonaccrual loans other than loans to
customers in bankruptcy and loans for which interest payments are deferred in
order to assist the financial recovery of debtors in financial difficulties.
25. Accruing Loans Contractually Past Due 3 Months or More
Accruing loans contractually past due 3 months or more are included in
Loans and bills discounted, and the amount was (Yen)20,399 million. Loans
classified as loans to customers in bankruptcy or past due loans are excluded.
26. Restructured Loans
Restructured loans are included in Loans and bills discounted, and the
amount was (Yen)1,244,431 million. Such restructured loans are loans on which
concessions (e.g., reduction of the stated interest rate, deferral of interest
payment, extension of maturity date, reduction of the face amount or maturity
amount of the debt or accrued interest) have been granted to debtors in
financial difficulties to assist them in their financial recovery and eventually
to be able to repay to creditors. Loans classified as loans to customers in
bankruptcy, past due loans or accruing loans contractually past due 3 months or
more are excluded.
27. Nonaccrual Loans, Accruing Loans Contractually Past Due 3 Months or More and
Restructured Loans
Total amount of nonaccrual loans, accruing loans contractually past due 3
months or more and restructured loans was (Yen)2,569,468 million. The amount of
past due loans included loans of (Yen)22,634 million entrusted through the
managed trust method to the Resolution and Collection Corporation, which
facilitates the removal of problem loans from balance sheet.
The amounts reflected in notes 24. to 27. represent the gross receivable
amounts prior to reduction for the allowance for loan losses.
28. Bills Discounted
Bills discounted are accounted for as secured lending transactions in
conformity with the Industry Audit Committee Report No.24. Bills accepted by
other banks, commercial bills, bills of exchange, and foreign bills bought
discounted by MTFG's domestic banking subsidiary and trust banking subsidiary
are permitted to be sold or pledged and the total face value was (Yen)839,582
million.
-20-
29. Assets Pledged
Assets pledged as collateral were as follows:
Cash and due from banks (Yen)3,443 million
Trading assets (Yen)138,398 million
Investment securities (Yen)1,512,280 million
Loans and bills discounted (Yen)1,565,131 million
Premises and equipment (Yen)5,391 million
Liabilities related to the pledged assets were as follows:
Deposits (Yen)192,829 million
Call money and bills sold (Yen)1,449,700 million
Borrowed money (Yen)277,403 million
Other liabilities (Yen)60 million
Acceptances and guarantees (Yen)3,611 million
In addition, Cash and due from banks of (Yen)217,213 million, Trading
assets of (Yen)2,982 million, Investment securities of (Yen)2,596,994 million,
Loans and bills discounted of (Yen)225,072 million and Other assets of
(Yen)50,129 million were pledged as collateral for settlement of exchange or
derivatives transactions or as valuation margin.
Trading assets of (Yen)1,998,660 million and Investment securities of
(Yen)3,771,579 million were sold under repurchase agreements or lent under
secured lending transactions, and Payables under repurchase agreements of
(Yen)2,731,579 million and Payables under securities lending transactions of
(Yen)2,307,636 million were corresponding.
Bills rediscounted are accounted for secured borrowing transactions in
conformity with the Industry Audit Committee Report No.24. The total face value
of bills accepted by other banks, commercial bills, and bills of exchange
rediscounted by MTFG's domestic banking subsidiary and trust banking subsidiary
was (Yen)22,841 million.
30. Land Revaluation Excess
Pursuant to the Law concerning Revaluation of Land, promulgated on March
31,1998 and revised on March 31,2001, land used for business operations of
domestic subsidiaries has been revalued as of the following dates. Land
revaluation excess is included in Shareholders' equity, net of income taxes. The
land revaluation excess includes MTFG's ownership percentage of affiliated
companies' land revaluation excess.
Date of the revaluation:
Domestic banking subsidiary March 31, 1998
Domestic trust banking subsidiary March 31, 2002
Other domestic subsidiaries December 31, 2001
The method of the revaluation as set forth in Article 3, Paragraph 3 of
the Law:
Pursuant to Article 2, Subparagraph 4 of the Enforcement Ordinance for
the Law concerning Revaluation of Land, the land price for the
revaluation is determined based on the method established and
published by the Director General of National Tax Agency in order to
calculate the land value for a basis of determining the taxable amount
subject to land value tax prescribed by Article 16 of the Land Value
Tax Law, reflecting appropriate adjustments for land shape and timing
of the assessment and based on real estate appraisal information
defined by Article 5 of the Law.
Difference between total revalued carrying amount and total fair value of
lands revalued pursuant to Article 10 of the law at fiscal year end was
(Yen)127,191 million.
Land used for business operations of a certain affiliated company has been
revalued as of March 31, 2002.
-21-
31. Subordinated Borrowings
Subordinated borrowings of (Yen)770,607 million were included in Borrowed
money.
32. Subordinated Bonds
Subordinated bonds of (Yen)1,552,437 million were included in Bonds and
notes.
33. Guaranteed Trusts
Principal amounts of Jointly operated designated money trusts and Loan
trusts of MTFG's trust banking subsidiary, for which repayment of the principal
to the customers is guaranteed, were (Yen)850,217 million and (Yen)1,560,989
million, respectively.
34. Net Assets per Common Share
Net assets per common share were (Yen)417,951.31.
35. Write Down of Investment Securities
Marketable securities other than trading securities are written down when a
decline in the market value below the cost of the securities is substantial and
the valuation differences are recognized as losses, based upon the judgment that
the decline in market value is other than temporary at fiscal year end. A
"substantial decline in the market value" is recognized based on the
classification of issuers as follows, pursuant to the internal rules for
self-assessment of asset quality:
Issuers who are legally bankrupt, virtually bankrupt or likely to become
bankrupt: Market value is lower than cost
Issuers who are to be closely watched: Market value is 30% or more lower
than cost
Other issuers: Market value is 50% or more lower than cost
36. Market Value of Securities
Market value and valuation differences of securities were as follows.
Securities below include trading securities, trading commercial paper and
trading short-term corporate bonds classified as Trading assets, negotiable
certificates of deposits classified as Cash and due from banks and investments
in commodity investment trusts classified as Commercial paper and other debt
purchased. The same definition is applied in notes 37. to 39.
Trading securities
Balance sheet amount (Yen)4,829,854 million
Valuation gains included in Loss before
income taxes and others (Yen)981 million
-22-
Marketable debt securities being held to maturity
(in millions of yen)
Balance sheet amount Market value Differences Gains Losses
Domestic bonds 192,446 203,873 11,427 11,427 -
Municipal bonds 122,238 129,778 7,539 7,539 -
Corporate bonds 70,207 74,095 3,887 3,887 -
Other securities 273,535 278,068 4,533 4,534 1
Foreign bonds 65,886 70,419 4,533 4,534 1
Other 207,649 207,649 - - -
---------------------------------------------------------------------------------------------------------
Total 465,981 481,942 15,960 15,961 1
Marketable securities available for sale
(in millions of yen)
Balance sheet Valuation
Cost amount differences Gains Losses
Domestic equity securities 3,517,001 3,089,757 (427,244) 191,051 618,296
Domestic bonds 12,150,041 12,271,912 121,780 124,182 2,311
Government bonds 10,490,464 10,592,432 101,968 103,523 1,554
Municipal bonds 431,003 439,162 8,159 8,184 25
Corporate bonds 1,228,573 1,240,316 11,742 12,474 731
Other securities 8,191,174 8,253,913 62,738 191,220 128,481
Foreign equity securities 19,813 34,455 14,642 15,072 430
Foreign bonds 6,821,736 6,968,748 147,012 158,634 11,621
Other 1,349,624 1,250,708 (98,916) 17,513 116,429
---------------------------------------------------------------------------------------------------------
Total 23,858,217 23,615,582 (242,635) 506,454 749,089
Valuation differences, net of (Yen)20,937 million of related deferred tax
assets, were (Yen)(221,697) million. Net valuation differences, excluding
minority interest of (Yen)2,200 million and adding MTFG's ownership percentage
of affiliates' unrealized gains on securities available for sale of (Yen)465
million, were (Yen)(223,432) million and were included in Unrealized gains
(losses) on securities available for sale.
37. Securities Available for Sale Sold
Securities available for sale sold during the fiscal year were as follows:
(in millions)
Proceeds from sales Gains Losses
(Yen)27,610,331 (Yen)252,510 (Yen)280,803
38. Securities Not Stated at Market Value
The balance sheet amounts of principal securities not stated at market
value were as follows:
Balance sheet amount
Debt Securities being held to maturity
Foreign bonds (Yen)22,193 million
Securities available for sale
Domestic equity securities (Yen)121,170 million
Domestic corporate bonds (Yen)310,530 million
Foreign bonds (Yen)43,877 million
-23-
39. Redemption Schedule of Bonds
Redemption schedule of bonds classified as securities available for sale
and being held to maturity was as follows:
(in millions of yen)
Due within Due after 1 year Due after 5 years Due after
1 year through 5 years through 10 years 10 years
Domestic bonds 3,186,171 6,736,050 2,568,077 290,641
Government bonds 2,785,137 5,188,677 2,329,234 289,383
Municipal bonds 63,063 378,861 125,528 -
Corporate bonds 337,970 1,168,511 113,314 1,258
Other bonds 836,527 4,948,255 1,169,706 1,230,573
Foreign bonds 508,719 4,726,113 1,101,419 738,569
Other 327,808 222,141 68,287 492,003
---------------------------------------------------------------------------------------------------
Total 4,022,698 11,684,306 3,737,783 1,521,215
40. Money Held in Trust
Classification of Money held in trust was as follows:
Money held in trust for trading purposes
Balance sheet amount (Yen)309,800 million
Valuation losses included in Loss before
income taxes and others (Yen)(9,024) million
Other Money held in trust
(in millions)
Cost Balance sheet amount Valuation differences Gains Losses
(Yen)105,757 (Yen)105,757 - - -
41. Securities Lent/Borrowed
Unsecured securities lent for which borrowers have rights of sale or pledge
were included in Investment securities and the amount was (Yen)49,850 million.
Securities lent for which borrowers have rights of pledge but no rights of sale
were included in Investment securities and the amount were (Yen)43 million.
With respect to borrowed securities and purchased securities under resale
agreements that are permitted to be sold or pledged, (Yen)2,857,893 million were
pledged, (Yen)733,461 million were lent and (Yen)3,210,568 million were held at
hand at this fiscal year end.
42. Loan Commitments
Contracts of overdraft facilities and loan commitment limits are contracts
under which customers are lent to up to the prescribed limits in response to the
customers' application for a loan as long as there is no violation of any
condition in the contracts. The unused amount within the limits relating to
these contracts was (Yen)29,033,916 million.
Since many of these commitments expire without being drawn, the unused
amount does not necessarily represent a future cash requirement. Most of these
contracts have conditions that allow MTFG and its consolidated subsidiaries to
refuse the customers' application for a loan or decrease the contract limits
with proper reasons (e.g., changes in financial situation, deterioration in
customers' creditworthiness, etc.). At the inception of contracts, MTFG and its
consolidated subsidiaries obtain real estate, securities, etc. as collateral if
considered to be necessary. Subsequently, MTFG and its consolidated subsidiaries
perform periodic reviews of the customers' business results based on internal
rules, and take necessary measures to reconsider conditions in contracts and/or
require additional collateral and guarantees.
-24-
43. Employees' Retirement Benefits
The funded status and amounts recognized in the Consolidated Balance Sheet
were as follows:
(in millions of yen)
Projected benefit obligation (1,206,507)
Fair value of plan assets 781,429
------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets (425,078)
Unrecognized net obligation at transition 36,323
Unrecognized net actuarial loss 492,658
Unrecognized prior service cost (50,179)
------------------------------------------------------------------------
Net amount recognized in the Consolidated Balance Sheet 53,723
Prepaid pension costs 90,700
Reserve for employees' retirement benefits (36,976)
44. Reduction of Legal Capital Surplus
Pursuant to Article 289, Paragraph 2 of the Commercial Code of Japan and
Article 18, Paragraph 2 of the Banking Law, MTFG reduced Legal capital surplus
and transferred to Other capital surplus during the current fiscal year. There
is no effect to total Capital surplus attributable to the reduction.
45. External Standards Taxation on Banks
With the implementation of the "Metropolitan ordinance regarding the
imposition of enterprise taxes through external standards taxation on banks in
Tokyo" (Tokyo Metropolitan Ordinance No.145, 2000) (the "metropolitan
ordinance"), enterprise taxes which were hitherto levied on income are now
levied on gross business profit.
On October 18, 2000, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Tokyo District Court against the Tokyo
metropolitan government and the Governor of Tokyo seeking to void the
metropolitan ordinance. MTFG's domestic banking subsidiary and trust banking
subsidiary won the case eventually entirely on March 26, 2002 with a decision of
the Tokyo District Court in favor of MTFG's domestic banking subsidiary and
trust banking subsidiary, on the grounds that the metropolitan ordinance was
illegal. The District Court ordered the metropolitan government to return to
MTFG's domestic banking subsidiary and trust banking subsidiary advance tax
payments of (Yen)11,741 million and also awarded to MTFG's domestic banking
subsidiary and trust banking subsidiary damages of (Yen)300 million. On March
29, 2002, the metropolitan government lodged an appeal with the Tokyo High Court
against the decision, and on April 9, 2002, the plaintiff banks at the first
trial, including MTFG's domestic banking subsidiary and trust banking
subsidiary, also lodged an appeal. MTFG's domestic banking subsidiary and trust
banking subsidiary won the second-trial case eventually on January 30, 2003 with
a decision of the Tokyo High Court in the Bank's favor, on the grounds that the
metropolitan ordinance was illegal. The High Court ordered the metropolitan
government to return to MTFG's domestic banking subsidiary and trust banking
subsidiary advance tax payments of (Yen)30,409 million. On February 10, 2003,
the metropolitan government lodged a final appeal with the Supreme Court against
the decision, and on February 13, 2003 the plaintiff banks at the first trial,
including MTFG's domestic banking subsidiary and trust banking subsidiary also
lodged a final appeal.
It is the opinion of MTFG's domestic banking subsidiary and trust banking
subsidiary that the metropolitan ordinance is both unconstitutional and illegal.
MTFG's domestic banking subsidiary and trust banking subsidiary have asserted
this opinion in the courts and the matter is still in litigation. The fact that
during this fiscal year MTFG's domestic banking subsidiary and trust banking
subsidiary have applied the same treatment as in the previous fiscal year,
accounting for enterprise taxes through external standards taxation on banks in
Tokyo in accordance with the metropolitan ordinance, is because MTFG's domestic
banking subsidiary and trust banking subsidiary have deemed it appropriate at
this stage to continue with the same accounting treatment as before. This
accounting treatment does not constitute in any way an admission on the part of
MTFG's domestic banking subsidiary and trust banking subsidiary either of the
constitutionality or of the legality of the metropolitan ordinance. With the
implementation of the municipal ordinance, enterprise taxes relating to banks in
Tokyo were recorded in Other ordinary expenses in the amount of (Yen)19,593
million this fiscal year. As a result, there was a respective increase in
Ordinary loss of the same amount as compared with the previous standards under
which enterprise taxes were levied on income. Since the enterprise taxes in
question are not included in the calculations for accounting for tax effects,
there was a decrease in Deferred tax assets of (Yen)102,488 million as compared
with the amount that it would have been had the enterprise taxes been levied on
income instead of gross profits. There were also a decrease in Deferred tax
liabilities on land revaluation excess of (Yen)11,386 million, an increase in
Land revaluation excess by the same amount and a decrease in Unrealized gains
(losses) on securities available for sale of (Yen)12,994 million, respectively.
-25-
With the implementation of the "Municipal Ordinance regarding the
imposition of enterprise taxes through external standards taxation on banks in
Osaka" (Osaka Municipal Ordinance No.131, 2000) ("the municipal ordinance"),
enterprise taxes which were hitherto levied on income are now levied on gross
business profit.
On April 4, 2002, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Osaka District Court against the Osaka
municipal government and the Governor of Osaka seeking to void the municipal
ordinance. With the implementation of the "Revision of Municipal Ordinance
regarding the imposition of enterprise taxes through external standards taxation
on banks in Osaka" (Osaka Municipal Ordinance No.77, 2002) ("the revised
municipal ordinance 2002") on May 30, 2002, and the implementation of the
"Revision of Municipal Ordinance regarding the imposition of enterprise taxes
through external standards taxation on banks in Osaka" (Osaka Municipal
Ordinance No.14, 2003) ("the revised municipal ordinance 2003") on April 1,
2003, the special treatment regarding the tax basis is to be applicable from the
fiscal year beginning on April 1, 2003. The enterprise taxes which the banks
should pay to Osaka municipal government this fiscal year are subject to the
supplementary provision 2 of the revised municipal ordinance 2003, which
provides the banks shall pay the enterprise taxes based on the lesser of gross
business profit or income. MTFG's domestic banking subsidiary and trust banking
subsidiary, therefore, filed and paid the enterprise taxes based on income. The
fact that MTFG's domestic banking subsidiary and trust banking subsidiary filed
and paid the enterprise taxes according to the revised municipal ordinance does
not constitute in any way an admission on the part of MTFG's domestic banking
subsidiary and trust banking subsidiary either of the constitutionality or of
the legality of the revised municipal ordinance 2002 and 2003 as well as the
municipal ordinance. Since the enterprise taxes in question are not included in
the calculations for accounting for tax effects, there was a decrease in
Deferred tax assets of (Yen)17,240 million as compared with the amount that it
would have been had the enterprise taxes been levied on income instead of gross
profits. There were also a decrease in Deferred tax liabilities on land
revaluation excess of (Yen)1,919 million, an increase in Land revaluation excess
by the same amount and a decrease in Unrealized gains (losses) on securities
available for sale of (Yen)2,172 million, respectively.
46. Tax Basis of Enterprise Taxes
With the implementation of the "Revision of the Local Tax Law" (Legislation
No.9, 2003) on March 31, 2003, the tax basis of enterprise taxes, which was
stipulated as "income and liquidation income" by the 12th paragraph of Article
72 of the Local Tax Law before the revision, is to be a combination of "amount
of added value", "amount of capital" and "income and liquidation income" from
the fiscal year beginning on April 1, 2004. The enterprise taxes that have tax
bases of the "amount of added value" and the "amount of capital" are not
pertinent to the enterprise taxes that have tax bases of income-related amounts.
The "Revision of the Local Tax Law" also stipulates that the metropolitan
ordinance and the municipal ordinance are to be abolished from the fiscal year
beginning on April 1, 2004.
In connection with the "Revision of the Local Tax Law", the effective
statutory tax rates of MTFG, domestic banking subsidiary and trust banking
subsidiary used in the calculations of deferred tax assets and liabilities from
the fiscal year beginning on April 1, 2004 changed from 42.05% to 40.49%, from
37.98% to 40.46% and from 38.50% to 40.49%, respectively. As a result, there
were an increase in Deferred tax assets of (Yen)65,874 million, a decrease in
Deferred tax liabilities of (Yen)23 million and a decrease in Income
taxes-deferred of (Yen)56,623 million, respectively. There were also an increase
in Deferred tax assets on land revaluation loss of (Yen)78 million, an increase
in Deferred tax liabilities on land revaluation excess of (Yen)7,733 million, a
decrease in Land revaluation excess of (Yen)7,657 million and an increase in
Unrealized gains (losses) on securities available for sale of (Yen)9,266
million, respectively.
-26-
47. Adoption of Financial Accounting Standard No.1
Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.1 "Accounting Standard for Treasury Stock and Reversal of Legal
Reserves" issued by the Accounting Standards Board of Japan on February 21,
2002. As a result, Ordinary loss decreased by (Yen)21,444 million.
48. Change of Presentation
With the revision of the form prescribed by Ministerial Ordinance of the
Banking Law, the presentations are changed as follows:
(1) Receivables under securities borrowing transactions, included in
Other assets in the previous fiscal year, are reported separately in
the current fiscal year. Payables under securities lending
transactions, included in Other liabilities in the previous fiscal
year, are reported separately in the current fiscal year.
(2) Paper-less commercial papers, issued pursuant to the "Law
Concerning Transfers of Corporate Bonds" (Legislation No. 75, 2001)
are reported separately as Short-term corporate bonds. Commercial
papers issued as promissory notes are reported as Commercial paper.
(3) Convertible bonds, reported separately in the previous fiscal
year, are included in Bonds with warrants in the current fiscal
year.
-27-
Notes related to the Consolidated Statement of Operations for the year ended
March 31, 2003 are as follows:
1. Basis of Presentation
The accompanying Consolidated Statement of Operations is compiled as
required by the Banking Law and in conformity with accounting principles and
practices generally accepted in Japan, which are different in certain respects
as compared to application and disclosure requirements of International
Accounting Standards. The Consolidated Statement of Operations is not intended
to present the results of operations in accordance with accounting principles
and practices generally accepted in countries and jurisdictions other than
Japan. For the convenience of readers, the presentation is modified in certain
respects from the original Japanese report. The amounts are presented in
millions of yen and are rounded down to the nearest million.
2. Net Loss per Common Share
Net loss per common share was (Yen)30,238.63.
3. Trading Profits and Losses
Profits and losses on trading transactions are shown as Trading profits or
Trading losses on a trade date basis.
The amounts of the above profits and losses presented are the sum of (1)
the difference between the valuation gains or losses at the beginning and end of
the current fiscal year in the case of securities and monetary claims purchased,
and the difference between the amount of unrealized gains or losses at the
beginning and end of current fiscal year in the case of trading-related
financial derivatives, and (2) interest received or paid in cash during the
fiscal year.
4. Other Ordinary Income
Other ordinary income included gains on sales of equity securities of
(Yen)80,344 million and gains on sales of loans and other claims of (Yen)28,584
million.
5. Other Ordinary Expenses - Other
Other ordinary expenses - Other included losses on write down of equity
securities of (Yen)348,719 million, losses on sales of equity securities of
(Yen)219,654 million, losses on loan charge-offs of (Yen)211,059 million, and
losses on sales of loans and other claims of (Yen)173,755 million.
6. Other Special Gains
Other special gains were gains on reversal of reserve for losses on real
estate-collateralized loans sold.
7. Other Special Losses
Other special losses were valuation losses on premises and equipment.
8. Change of Presentation
With the revision of the form prescribed by Ministerial Ordinance of the
Banking Law, the presentations are changed as follows:
(1) Interest on receivables under securities borrowing transactions,
included in Other interest income in the previous fiscal year, are
reported separately in the current fiscal year. Interest on payables
under securities lending transactions, included in Other interest
expenses in the previous fiscal year, are reported separately in the
current fiscal year.
(2) Interest on paper-less commercial papers, issued pursuant to the
"Law Concerning Transfers of Corporate Bonds" (Legislation No. 75,
2001) is reported separately as Interest on short-term corporate
bonds. Interest on commercial papers issued as promissory notes is
reported as Interest on commercial paper.
(3) Interest on convertible bonds, reported separately in the previous
fiscal year, is included in nterest on bonds with warrants in the
current fiscal year.
-28-
Note related to the Consolidated Statement of Capital Surplus and Retained
Earnings for the year ended March 31, 2003 is as follows:
1. Basis of Presentation
The accompanying Consolidated Statement of Capital Surplus and Retained
Earnings is compiled as required by the Banking Law and in conformity with
accounting principles and practices generally accepted in Japan, which are
different in certain respects as compared to application and disclosure
requirements of International Accounting Standards. The Consolidated Statement
of Capital Surplus and Retained Earnings is not intended to present the results
of operations in accordance with accounting principles and practices generally
accepted in countries and jurisdictions other than Japan. For the convenience of
readers, the presentation is modified in certain respects from the original
Japanese report. The amounts are presented in millions of yen and are rounded
down to the nearest million.
-29-
Notes related to the Consolidated Statement of Cash Flows for the year ended
March 31, 2003 are as follows:
1. Basis of Presentation
The accompanying Consolidated Statement of Cash Flows is compiled as
required by the Banking Law and in conformity with accounting principles and
practices generally accepted in Japan, which are different in certain respects
as compared to application and disclosure requirements of International
Accounting Standards. The Consolidated Statement of Cash Flows is not intended
to present the results of operations in accordance with accounting principles
and practices generally accepted in countries and jurisdictions other than
Japan. For the convenience of readers, the presentation is modified in certain
respects from the original Japanese report. The amounts are presented in
millions of yen and are rounded down to the nearest million.
2. Definition of Cash and Cash Equivalents
For the purpose of reporting cash flows, cash and cash equivalents are
defined as those amounts included in Cash and due from banks excluding time
deposits and negotiable certificates of deposits in other banks.
3. Reconciliation to the Cash and Cash Equivalents
The reconciliation of the Cash and due from banks in the Consolidated
Balance Sheet to the Cash and cash equivalents at end of fiscal year is as
follows:
(in millions)
Cash and due from banks (Yen) 8,235,754
Time deposits and negotiable certificates of
deposit in other banks (4,186,224)
--------------
Cash and cash equivalents at end of fiscal year (Yen) 4,049,530
==============
-30-
Mitsubishi Tokyo Financial Group, Inc., and Subsidiaries
Critical Policies in Preparation of Consolidated Financial Statements
1. Scope of Consolidation
(1) Number of consolidated subsidiaries: 184
Significant companies
The Bank of Tokyo-Mitsubishi, Ltd. The Mitsubishi Trust and Banking
Corporation
(2) Number of non-consolidated subsidiaries: 3
Non-consolidated subsidiaries are excluded from the scope of consolidation
since their assets, ordinary income, and our ownership percentage of their
net income or retained earnings do not have a material impact on our
results of operations or financial condition.
2. Application of the Equity Method
(1) Number of affiliated companies accounted for by the equity method: 31
Significant companies
Diamond Lease Co., Ltd. The Master Trust Bank of Japan, Ltd.
Diamond Computer Service Co., Ltd. MTBC Bank Deutschland GmbH
BOT Lease Co., Ltd.
KOKUSAI Securities Co., Ltd., formerly an affiliated company accounted for
by the equity method, had been excluded from the scope of the equity method
due to its merger with Tokyo-Mitsubishi Securities Co., Ltd.
Tokyo-Mitsubishi Personal Securities Co., Ltd. and Issei Securities Co.,
Ltd. and became a consolidated subsidiary named Mitsubishi Securities Co.,
Ltd.
(2) Number of non-consolidated subsidiaries and affiliated companies not
accounted for by the equity method: 3
Non-consolidated subsidiaries and affiliated companies not accounted for by
the equity method are excluded from the scope of the equity method since
our ownership percentage of their net income or retained earnings do not
have a material impact on our consolidated financial statements.
(3) Although we own 29.3% of voting rights for Sanwa Tatemono Co., Ltd., we do
not regard it as an affiliated company since we do not have the ability to
exercise significant influence over the company due to its commencement of
corporate rehabilitation proceedings pursuant to the Corporate
Rehabilitation Law in June 1994.
3. Fiscal Year of Consolidated Subsidiaries
(1) Fiscal year ends of consolidated subsidiaries are as follows:
October 31 : 2 subsidiaries February 28 : 1 subsidiary
December 31 : 110 subsidiaries March 31 : 71 subsidiaries
(2) Due to the change in fiscal year ends for 5 consolidated subsidiaries
(Eiraku Jitsugyo Co., Ltd., Diamond Properties Management Co., Ltd.,
Mitsubishi TB Information System Co., Ltd., Mitsubishi TB Business Co.,
Ltd. and Ryoshin Data Co., Ltd.), we consolidated 15 months financial
statements for the subsidiaries from January 2002 to March 2003. The
treatment does not have a material impact on our consolidated financial
statements, considering their assets, ordinary income, and our ownership
percentage of their net income or retained earnings.
(3) Subsidiaries whose fiscal year ends are October 31 are consolidated based
on their financial statements ended on January 31. Other subsidiaries are
consolidated based on financial statements for their respective fiscal
year ends. Significant transactions occurred during the intervening
periods are reflected in the consolidated financial statements.
4. Valuation of Assets and Liabilities of Consolidated Subsidiaries
All assets and liabilities of consolidated subsidiaries are measured at
fair value when they are included in the scope of consolidation.
5. Amortization of Goodwill
Goodwill is charged to expenses when incurred.
6. Appropriation of Capital Surplus and Retained Earnings
Consolidated Statements of Capital Surplus and Retained Earnings is
prepared based on capital surplus and retained earnings appropriated during
the fiscal year of consolidated financial statements.
-31-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Segment Information
1. Business segment information
(For the year ended March 31, 2003) (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Trust
Banking Banking Securities Other Total (Elimination) Consolidated
-----------------------------------------------------------------------------------------------------------------------------------
Ordinary income 2,009,207 586,449 97,789 181,959 2,875,405 (102,877) 2,772,528
Ordinary income from customers 1,975,522 569,401 86,953 140,650 2,772,528 - 2,772,528
Internal ordinary income among segments 33,684 17,048 10,835 41,309 102,877 (102,877) -
-----------------------------------------------------------------------------------------------------------------------------------
Ordinary expenses 2,165,525 755,789 131,928 151,444 3,204,687 (71,896) 3,132,790
-----------------------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) (156,318) (169,339) (34,139) 30,515 (329,281) (30,980) (360,262)
-----------------------------------------------------------------------------------------------------------------------------------
Assets 77,204,126 20,366,715 4,185,210 1,726,646 103,482,699 (4,307,379) 99,175,319
-----------------------------------------------------------------------------------------------------------------------------------
Depreciation 61,738 14,207 8,331 1,964 86,242 - 86,242
-----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 68,183 25,116 15,752 1,807 110,860 - 110,860
-----------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. Other primarily includes credit card and leasing businesses.
3. With the implementation of the "Metropolitan ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Tokyo" (Tokyo Metropolitan Ordinance No.145, 2000) ("the
metropolitan ordinance"), enterprise taxes which were hitherto levied on
income are now levied on gross business profit.
On October 18, 2000, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Tokyo District Court against the Tokyo
metropolitan government and the Governor of Tokyo seeking to void the
metropolitan ordinance. MTFG's domestic banking subsidiary and trust
banking subsidiary won the case eventually entirely on March 26, 2002 with
a decision of the Tokyo District Court in favor of MTFG's domestic banking
subsidiary and trust banking subsidiary, on the grounds that the
metropolitan ordinance was illegal. The District Court ordered the
metropolitan government to return to MTFG's domestic banking subsidiary
and trust banking subsidiary advance tax payments of (Yen)11,741 million
and also awarded to MTFG's domestic banking subsidiary and trust banking
subsidiary damages of (Yen)300 million. On March 29, 2002, the
metropolitan government lodged an appeal with the Tokyo High Court against
the decision, and on April 9, 2002, the plaintiff banks at the first
trial, including MTFG's domestic banking subsidiary and trust banking
subsidiary, also lodged an appeal. MTFG's domestic banking subsidiary and
trust banking subsidiary won the second-trial case eventually on January
30, 2003 with a decision of the Tokyo High Court in the Bank's favor, on
the grounds that the metropolitan ordinance was illegal. The High Court
ordered the metropolitan government to return to MTFG's domestic banking
subsidiary and trust banking subsidiary advance tax payments of
(Yen)30,409 million. On February 10, 2003, the metropolitan government
lodged a final appeal with the Supreme Court against the decision, and on
February 13, 2003 the plaintiff banks at the first trial, including MTFG's
domestic banking subsidiary and trust banking subsidiary also lodged a
final appeal.
It is the opinion of MTFG's domestic banking subsidiary and trust banking
subsidiary that the metropolitan ordinance is both unconstitutional and
illegal. MTFG's domestic banking subsidiary and trust banking subsidiary
have asserted this opinion in the courts and the matter is still in
litigation. The fact that during this fiscal year MTFG's domestic banking
subsidiary and trust banking subsidiary have applied the same treatment as
in the previous fiscal year, accounting for enterprise taxes through
external standards taxation on banks in Tokyo in accordance with the
metropolitan ordinance, is because MTFG's domestic banking subsidiary and
trust banking subsidiary have deemed it appropriate at this stage to
continue with the same accounting treatment as before. This accounting
treatment does not constitute in any way an admission on the part of
MTFG's domestic banking subsidiary and trust banking subsidiary either of
the constitutionality or of the legality of the metropolitan ordinance.
With the implementation of the municipal ordinance, enterprise taxes
relating to banks in Tokyo were recorded in Other ordinary expenses in the
amount of (Yen)19,593 million this fiscal year. As a result, there was a
respective increase in Ordinary loss by the same amount as compared with
the previous standards under which enterprise taxes were levied on income,
and its effect in the Banking segment and the Trust Banking segment was
(Yen)14,960 million and (Yen)4,633 million, respectively. Since the
enterprise taxes in question are not included in the calculations for
accounting for tax effects, there was a decrease in Assets of (Yen)102,488
million as compared with the amount that it would have been had the
enterprise taxes been levied on income instead of gross profits, and its
effect in the Banking segment and the Trust Banking segment was
(Yen)99,307 million and (Yen)3,180 million, respectively.
With the implementation of the "Municipal Ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.131, 2000) ("the municipal
ordinance"), enterprise taxes which were hitherto levied on income are now
levied on gross business profit.
On April 4, 2002, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Osaka District Court against the Osaka
municipal government and the Governor of Osaka seeking to void the
municipal ordinance. With the implementation of the "Revision of Municipal
Ordinance regarding the imposition of enterprise taxes through external
standards taxation on banks in Osaka" (Osaka Municipal Ordinance No.77,
2002) ("the revised municipal ordinance 2002") on May 30, 2002, and the
implementation of the "Revision of Municipal Ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.14, 2003) ("the revised
municipal ordinance 2003") on April 1, 2003, the special treatment
regarding the tax basis is to be applicable from the fiscal year beginning
on April 1, 2003. The enterprise taxes which the banks should pay to Osaka
municipal government this fiscal year are subject to the supplementary
provision 2 of the revised municipal ordinance 2003, which provides the
banks shall pay the enterprise taxes based on the lesser of gross business
profit or income. MTFG's domestic banking subsidiary and trust banking
subsidiary, therefore, filed and paid the enterprise taxes based on
income. The fact that MTFG's domestic banking subsidiary and trust banking
subsidiary filed and paid the enterprise taxes according to the revised
municipal ordinance does not constitute in any way an admission on the
part of MTFG's domestic banking subsidiary and trust banking subsidiary
either of the constitutionality or of the legality of the revised
municipal ordinance 2002 and 2003 as well as the municipal ordinance.
Since the enterprise taxes in question are not included in the
calculations for accounting for tax effects, there was a decrease in
Assets of (Yen)17,240 million as compared with the amount that it would
have been had the enterprise taxes been levied on income instead of gross
profits, and its effect in the Banking segment and the Trust Banking
segment was (Yen)16,722 million and (Yen)517 million.
-32-
4. With the implementation of the "Revision of the Local Tax Law"
(Legislation No.9, 2003) on March 31, 2003, the tax basis of enterprise
taxes, which was stipulated as "income and liquidation income" by the 12th
paragraph of Article 72 of the Local Tax Law before the revision, is to be
a combination of "amount of added value", "amount of capital" and "income
and liquidation income" from the fiscal year beginning on April 1, 2004.
The enterprise taxes that have tax bases of the "amount of added value"
and the "amount of capital" are not pertinent to the enterprise taxes that
have tax bases of income-related amounts. The "Revision of the Local Tax
Law" also stipulates that the metropolitan ordinance and the municipal
ordinance are to be abolished from the fiscal year beginning on April 1,
2004.
In connection with the "Revision of the Local Tax Law", the effective
statutory tax rates of MTFG, domestic banking subsidiary and trust banking
subsidiary used in the calculations of deferred tax assets and liabilities
from the fiscal year beginning on April 1, 2004 changed from 42.05% to
40.49%, from 37.98% to 40.46% and from 38.50% to 40.49%, respectively. As
a result, there were an increase in Assets of (Yen)65,953 million and its
effect in the Banking segment, Trust Banking segment, Securities segment
and Other segment was an increase of (Yen)56,480 million, an increase of
(Yen)9,491 million, a decrease of (Yen)18 million and a decrease of (Yen)0
million, respectively.
5. Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.1 "Accounting Standard for Treasury Stock and Reversal of
Legal Reserves" issued by the Accounting Standards Board of Japan on
February 21, 2002. As a result, Ordinary loss decreased by (Yen)21,444
million, and its effect in the Banking segment and the Trust Banking
segment was an increase of (Yen)15,445 million and a decrease of
(Yen)36,889 million, respectively.
6. "Securities" segment is reported separately which had been included in
"Other" segment in the previous fiscal year. Business segment information
for the previous fiscal year whose Securities segment is reported
separately is as follows:
(For the year ended March 31, 2002) (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
Trust
Banking Banking Securities Other Total (Elimination) Consolidated
---------------------------------------------------------------------------------------------------------------------------------
Ordinary income 2,448,700 674,172 83,937 221,361 3,428,171 (165,824) 3,262,347
Ordinary income from customers 2,406,894 647,836 74,151 133,465 3,262,347 - 3,262,347
Internal ordinary income among segments 41,805 26,335 9,786 87,896 165,824 (165,824) -
---------------------------------------------------------------------------------------------------------------------------------
Ordinary expenses 2,600,269 762,855 106,580 179,397 3,649,103 (97,410) 3,551,693
---------------------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) (151,569) (88,683) (22,643) 41,964 (220,931) (68,414) (289,345)
---------------------------------------------------------------------------------------------------------------------------------
Assets 79,359,749 20,198,569 3,481,608 1,759,291 104,799,219 (5,302,390) 99,496,829
---------------------------------------------------------------------------------------------------------------------------------
Depreciation 41,829 17,271 602 929 60,633 - 60,633
---------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 97,611 26,290 2,464 3,780 130,147 - 130,147
---------------------------------------------------------------------------------------------------------------------------------
(For the year ended March 31, 2002) (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Trust
Banking Banking Other Total (Elimination) Consolidated
------------------------------------------------------------------------------------------------------------------------------------
Ordinary income 2,448,700 674,172 305,250 3,428,122 (165,775) 3,262,347
Ordinary income from customers 2,406,894 647,836 207,616 3,262,347 - 3,262,347
Internal ordinary income among segments 41,805 26,335 97,633 165,775 (165,775) -
------------------------------------------------------------------------------------------------------------------------------------
Ordinary expenses 2,600,269 762,855 285,932 3,649,057 (97,364) 3,551,693
------------------------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) (151,569) (88,683) 19,318 (220,934) (68,410) (289,345)
------------------------------------------------------------------------------------------------------------------------------------
Assets 79,359,749 20,198,569 5,240,633 104,798,953 (5,302,124) 99,496,829
------------------------------------------------------------------------------------------------------------------------------------
Depreciation 41,829 17,271 1,532 60,633 - 60,633
------------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 97,611 26,290 6,245 130,147 - 130,147
------------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. Other primarily includes securities and credit card businesses.
3. With the implementation of the "Metropolitan ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Tokyo" (Tokyo Metropolitan Ordinance No.145, April 1, 2000) ("the
metropolitan ordinance"), enterprise taxes which were hitherto levied on
income are now levied on "gross business profit".
On October 18, 2000, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Tokyo District Court against the Tokyo
metropolitan government and the Governor of Tokyo seeking to void the
metropolitan ordinance. MTFG's domestic banking subsidiary and trust
banking subsidiary won the case eventually entirely on March 26, 2002 with
a decision of the Tokyo District Court in favor of MTFG's domestic banking
subsidiary and trust banking subsidiary, on the grounds that the
metropolitan ordinance was illegal. The District Court ordered the
metropolitan government to return to MTFG's domestic banking subsidiary
and trust banking subsidiary advance tax payments of (Yen)11,741 million
and also awarded to MTFG's domestic banking subsidiary and trust banking
subsidiary damages of (Yen)300 million. On March 29, 2002 the metropolitan
government lodged an appeal with the Tokyo High Court against the
decision.
-33-
It is the opinion of MTFG's domestic banking subsidiary and trust banking
subsidiary that the metropolitan ordinance is both unconstitutional and
illegal. MTFG's domestic banking subsidiary and trust banking subsidiary
have asserted this opinion in the courts and the matter is still in
litigation. The fact that during this term MTFG's domestic banking
subsidiary and trust banking subsidiary have applied the same treatment as
in the previous term, accounting for enterprise taxes through external
standards taxation on banks in Tokyo in accordance with the metropolitan
ordinance, is because MTFG's domestic banking subsidiary and trust banking
subsidiary have deemed it appropriate at this stage to continue with the
same accounting treatment as before. This accounting treatment does not
constitute in any way an admission on the part of MTFG's domestic banking
subsidiary and trust banking subsidiary either of the constitutionality or
of the legality of the metropolitan ordinance. With the implementation of
the metropolitan ordinance, enterprise taxes relating to banks in Tokyo
were recorded in Other ordinary expenses in the amounts of (Yen)18,637
million. As a result, there was an increase in Ordinary loss by the same
amount as compared with the previous standards under which enterprise
taxes were levied on income, and its effect in the Banking segment and the
Trust Banking segment was (Yen)14,642 million and (Yen)3,994 million,
respectively. Since the enterprise taxes in question are not included in
the calculations for accounting for tax effects there was a decrease in
Assets of (Yen)89,359 million as compared with the amount that it would
have been had the enterprise taxes been levied on income instead of gross
profits, and its effect in the Banking segment and the Trust Banking
segment was (Yen)69,534 million and (Yen)19,824 million, respectively.
With the implementation of the "Municipal ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.131, June 9, 2000) ("the
municipal ordinance"), enterprise taxes which were hitherto levied on
income are now levied on "gross business profit".
On April 4, 2002, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Osaka District Court against the Osaka
municipal government and the Governor of Osaka seeking to void the
municipal ordinance.
It is the opinion of MTFG's domestic banking subsidiary and trust banking
subsidiary that the municipal ordinance is both unconstitutional and
illegal. MTFG's domestic banking subsidiary and trust banking subsidiary
have asserted this opinion in the Osaka District Court and the matter is
still in litigation. The fact that during this term MTFG's domestic
banking subsidiary and trust banking subsidiary have applied the treatment
accounting for enterprise taxes through external standards taxation on
banks in Osaka in accordance with the municipal ordinance, is because
MTFG's domestic banking subsidiary and trust banking subsidiary have
deemed it appropriate at this stage to apply the same accounting treatment
to Osaka as to Tokyo.
This accounting treatment does not constitute in any way an admission on
the part of MTFG's domestic banking subsidiary and trust banking
subsidiary either of the constitutionality or of the legality of the
municipal ordinance. With the implementation of the municipal ordinance,
enterprise taxes relating to banks in Osaka were recorded in Other
ordinary expenses in the amounts of (Yen)3,087 million. As a result, there
was a increase in Ordinary loss by the same amount as compared with the
previous standards under which enterprise taxes were levied on income, and
its effect in the Banking segment and the Trust Banking segment was
(Yen)2,438 million and (Yen)649 million, respectively. Since the
enterprise taxes in question are not included in the calculations for
accounting for tax effects there was a decrease in Assets of (Yen)14,947
million as compared with the amount that it would have been had the
enterprise taxes been levied on income instead of gross profits, and its
effect in the Banking segment and the Trust Banking segment was
(Yen)11,724 million and (Yen)3,222 million, respectively.
2. Geographic segment information
(For the year ended March 31, 2003) (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
North Latin Europe/ Asia/Oceania
Japan America America Mid. East excl. Japan Total (Elimination) Consolidated
------------------------------------------------------------------------------------------------------------------------------------
Ordinary income 1,900,135 578,572 66,937 302,172 145,117 2,992,935 (220,406) 2,772,528
Ordinary income from customers 1,811,995 558,864 36,366 244,205 121,097 2,772,528 - 2,772,528
Internal ordinary income among
segments 88,140 19,708 30,571 57,966 24,020 220,406 (220,406) -
------------------------------------------------------------------------------------------------------------------------------------
Ordinary expenses 2,285,305 575,764 67,687 301,134 98,344 3,328,236 (195,446) 3,132,790
------------------------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) (385,169) 2,808 (750) 1,038 46,772 (335,301) (24,960) (360,262)
------------------------------------------------------------------------------------------------------------------------------------
Assets 84,626,818 14,753,060 1,668,179 8,452,586 4,981,919 114,482,564 (15,307,244) 99,175,319
------------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. North America includes United States and Canada. Latin America primarily
includes the Caribbean, Panama and Brazil. Europe/Middle East primarily
includes United Kingdom, Germany and Netherlands. Asia/Oceania excluding
Japan primarily includes Hong Kong, Singapore and China.
3. With the implementation of the "Metropolitan ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Tokyo" (Tokyo Metropolitan Ordinance No.145, 2000) ("the
metropolitan ordinance"), enterprise taxes which were hitherto levied on
income are now levied on gross business profit.
On October 18, 2000, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Tokyo District Court against the Tokyo
metropolitan government and the Governor of Tokyo seeking to void the
metropolitan ordinance. MTFG's domestic banking subsidiary and trust
banking subsidiary won the case eventually entirely on March 26, 2002 with
a decision of the Tokyo District Court in favor of MTFG's domestic banking
subsidiary and trust banking subsidiary, on the grounds that the
metropolitan ordinance was illegal. The District Court ordered the
metropolitan government to return to MTFG's domestic banking subsidiary
and trust banking subsidiary advance tax payments of (Yen)11,741 million
and also awarded to MTFG's domestic banking subsidiary and trust banking
subsidiary damages of (Yen)300 million. On March 29, 2002, the
metropolitan government lodged an appeal with the Tokyo High Court against
the decision, and on April 9, 2002, the plaintiff banks at the first
trial, including MTFG's domestic banking subsidiary and trust banking
subsidiary, also lodged an appeal. MTFG's domestic banking subsidiary and
trust banking subsidiary won the second-trial case eventually on January
30, 2003 with a decision of the Tokyo High Court in the Bank's favor, on
the grounds that the metropolitan ordinance was illegal. The High Court
ordered the metropolitan government to return to MTFG's domestic banking
subsidiary and trust banking subsidiary advance tax payments of
(Yen)30,409 million. On February 10, 2003, the metropolitan government
lodged a final appeal with the Supreme Court against the decision, and on
February 13, 2003 the plaintiff banks at the first trial, including MTFG's
domestic banking subsidiary and trust banking subsidiary also lodged a
final appeal.
-34-
It is the opinion of MTFG's domestic banking subsidiary and trust banking
subsidiary that the metropolitan ordinance is both unconstitutional and
illegal. MTFG's domestic banking subsidiary and trust banking subsidiary
have asserted this opinion in the courts and the matter is still in
litigation. The fact that during this fiscal year MTFG's domestic banking
subsidiary and trust banking subsidiary have applied the same treatment as
in the previous fiscal year, accounting for enterprise taxes through
external standards taxation on banks in Tokyo in accordance with the
metropolitan ordinance, is because MTFG's domestic banking subsidiary and
trust banking subsidiary have deemed it appropriate at this stage to
continue with the same accounting treatment as before. This accounting
treatment does not constitute in any way an admission on the part of
MTFG's domestic banking subsidiary and trust banking subsidiary either of
the constitutionality or of the legality of the metropolitan ordinance.
With the implementation of the municipal ordinance, enterprise taxes
relating to banks in Tokyo were recorded in Other ordinary expenses in the
amount of (Yen)19,593 million this fiscal year. As a result, there was a
respective increase in Ordinary loss in Japan by the same amount as
compared with the previous standards under which enterprise taxes were
levied on income. Since the enterprise taxes in question are not included
in the calculations for accounting for tax effects, there was a decrease
in Assets of (Yen)102,488 million in Japan as compared with the amount
that it would have been had the enterprise taxes been levied on income
instead of gross profits.
With the implementation of the "Municipal Ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.131, 2000) ("the municipal
ordinance"), enterprise taxes which were hitherto levied on income are now
levied on gross business profit.
On April 4, 2002, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Osaka District Court against the Osaka
municipal government and the Governor of Osaka seeking to void the
municipal ordinance. With the implementation of the "Revision of Municipal
Ordinance regarding the imposition of enterprise taxes through external
standards taxation on banks in Osaka" (Osaka Municipal Ordinance No.77,
2002) ("the revised municipal ordinance 2002") on May 30, 2002, and the
implementation of the "Revision of Municipal Ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.14, 2003) ("the revised
municipal ordinance 2003") on April 1, 2003, the special treatment
regarding the tax basis is to be applicable from the fiscal year beginning
on April 1, 2003. The enterprise taxes which the banks should pay to Osaka
municipal government this fiscal year are subject to the supplementary
provision 2 of the revised municipal ordinance 2003, which provides the
banks shall pay the enterprise taxes based on the lesser of gross business
profit or income. MTFG's domestic banking subsidiary and trust banking
subsidiary, therefore, filed and paid the enterprise taxes based on
income. The fact that MTFG's domestic banking subsidiary and trust banking
subsidiary filed and paid the enterprise taxes according to the revised
municipal ordinance does not constitute in any way an admission on the
part of MTFG's domestic banking subsidiary and trust banking subsidiary
either of the constitutionality or of the legality of the revised
municipal ordinance 2002 and 2003 as well as the municipal ordinance.
Since the enterprise taxes in question are not included in the
calculations for accounting for tax effects, there was a decrease in
Assets of (Yen)17,240 million in Japan as compared with the amount that it
would have been had the enterprise taxes been levied on income instead of
gross profits.
4. With the implementation of the "Revision of the Local Tax Law"
(Legislation No.9, 2003) on March 31, 2003, the tax basis of enterprise
taxes, which was stipulated as "income and liquidation income" by the 12th
paragraph of Article 72 of the Local Tax Law before the revision, is to be
a combination of "amount of added value", "amount of capital" and "income
and liquidation income" from the fiscal year beginning on April 1, 2004.
The enterprise taxes that have tax bases of the "amount of added value"
and the "amount of capital" are not pertinent to the enterprise taxes that
have tax bases of income-related amounts. The "Revision of the Local Tax
Law" also stipulates that the metropolitan ordinance and the municipal
ordinance are to be abolished from the fiscal year beginning on April 1,
2004.
In connection with the "Revision of the Local Tax Law", the effective
statutory tax rates of MTFG, domestic banking subsidiary and trust banking
subsidiary used in the calculations of deferred tax assets and liabilities
from the fiscal year beginning on April 1, 2004 changed from 42.05% to
40.49%, from 37.98% to 40.46% and from 38.50% to 40.49%, respectively. As
a result, there was an increase in Assets of (Yen)65,953 million in Japan.
5. Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.1 "Accounting Standard for Treasury Stock and Reversal of
Legal Reserves" issued by the Accounting Standards Board of Japan on
February 21, 2002. As a result, Ordinary loss in Japan decreased by
(Yen)21,444 million.
(For the year ended March 31, 2002) (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
North Latin Europe/ Asia/Oceania
Japan America America Mid. East excl. Japan Total (Elimination) Consolidated
------------------------------------------------------------------------------------------------------------------------------------
Ordinary income 2,012,226 816,347 112,344 439,060 246,285 3,626,265 (363,917) 3,262,347
Ordinary income from customers 1,884,734 766,232 53,705 368,466 189,208 3,262,347 - 3,262,347
Internal ordinary income among
segments 127,492 50,115 58,639 70,594 57,077 363,917 (363,917) -
------------------------------------------------------------------------------------------------------------------------------------
Ordinary expenses 2,406,741 732,106 98,922 447,191 208,766 3,893,729 (342,036) 3,551,693
------------------------------------------------------------------------------------------------------------------------------------
Ordinary profit (loss) (394,514) 84,240 13,421 (8,130) 37,519 (267,464) (21,881) (289,345)
------------------------------------------------------------------------------------------------------------------------------------
Assets 85,115,503 16,093,151 2,544,614 9,403,348 6,042,131 119,198,749 (19,701,920) 99,496,829
------------------------------------------------------------------------------------------------------------------------------------
-35-
Notes:
1. Amounts are rounded down to the nearest million yen.
2. North America includes United States and Canada. Latin America
primarily includes the Caribbean, Panama and Brazil. Europe/Middle East
primarily includes United Kingdom, Germany and Netherlands.
Asia/Oceania excluding Japan primarily includes Hong Kong, Singapore
and China.
3. With the implementation of the "Metropolitan ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Tokyo" (Tokyo Metropolitan Ordinance No.145, April 1, 2000)
("the metropolitan ordinance"), enterprise taxes which were hitherto
levied on income are now levied on "gross business profit".
On October 18, 2000, MTFG's domestic banking subsidiary and trust
banking subsidiary filed a lawsuit with the Tokyo District Court
against the Tokyo metropolitan government and the Governor of Tokyo
seeking to void the metropolitan ordinance. MTFG's domestic banking
subsidiary and trust banking subsidiary won the case eventually
entirely on March 26, 2002 with a decision of the Tokyo District Court
in favor of MTFG's domestic banking subsidiary and trust banking
subsidiary, on the grounds that the metropolitan ordinance was illegal.
The District Court ordered the metropolitan government to return to
MTFG's domestic banking subsidiary and trust banking subsidiary advance
tax payments of (Yen)11,741 million and also awarded to MTFG's domestic
banking subsidiary and trust banking subsidiary damages of (Yen)300
million. On March 29, 2002 the metropolitan government lodged an appeal
with the Tokyo High Court against the decision.
It is the opinion of MTFG's domestic banking subsidiary and trust
banking subsidiary that the metropolitan ordinance is both
unconstitutional and illegal. MTFG's domestic banking subsidiary and
trust banking subsidiary have asserted this opinion in the courts and
the matter is still in litigation. The fact that during this term
MTFG's domestic banking subsidiary and trust banking subsidiary have
applied the same treatment as in the previous term, accounting for
enterprise taxes through external standards taxation on banks in Tokyo
in accordance with the metropolitan ordinance, is because MTFG's
domestic banking subsidiary and trust banking subsidiary have deemed it
appropriate at this stage to continue with the same accounting
treatment as before. This accounting treatment does not constitute in
any way an admission on the part of MTFG's domestic banking subsidiary
and trust banking subsidiary either of the constitutionality or of the
legality of the metropolitan ordinance. With the implementation of the
metropolitan ordinance, enterprise taxes relating to banks in Tokyo
were recorded in Other ordinary expenses in the amounts of (Yen)18,637
million. As a result, there was an increase in Ordinary loss in Japan
by the same amount as compared with the previous standards under which
enterprise taxes were levied on income. Since the enterprise taxes in
question are not included in the calculations for accounting for tax
effects there was a decrease in Assets of (Yen)89,359 million in Japan
as compared with the amount that it would have been had the enterprise
taxes been levied on income instead of gross profits.
With the implementation of the "Municipal ordinance regarding the
imposition of enterprise taxes through external standards taxation on
banks in Osaka" (Osaka Municipal Ordinance No.131, June 9, 2000) ("the
municipal ordinance"), enterprise taxes which were hitherto levied on
income are now levied on "gross business profit".
On April 4, 2002, MTFG's domestic banking subsidiary and trust banking
subsidiary filed a lawsuit with the Osaka District Court against the
Osaka municipal government and the Governor of Osaka seeking to void
the municipal ordinance.
It is the opinion of MTFG's domestic banking subsidiary and trust
banking subsidiary that the municipal ordinance is both
unconstitutional and illegal. MTFG's domestic banking subsidiary and
trust banking subsidiary have asserted this opinion in the Osaka
District Court and the matter is still in litigation. The fact that
during this term MTFG's domestic banking subsidiary and trust banking
subsidiary have applied the treatment accounting for enterprise taxes
through external standards taxation on banks in Osaka in accordance
with the municipal ordinance, is because MTFG's domestic banking
subsidiary and trust banking subsidiary have deemed it appropriate at
this stage to apply the same accounting treatment to Osaka as to Tokyo.
This accounting treatment does not constitute in any way an admission
on the part of MTFG's domestic banking subsidiary and trust banking
subsidiary either of the constitutionality or of the legality of the
municipal ordinance. With the implementation of the municipal
ordinance, enterprise taxes relating to banks in Osaka were recorded in
Other ordinary expenses in the amounts of (Yen)3,087 million. As a
result, there was a increase in Ordinary loss in Japan by the same
amount as compared with the previous standards under which enterprise
taxes were levied on income. Since the enterprise taxes in question are
not included in the calculations for accounting for tax effects there
was a decrease in Assets of (Yen)14,947 million in Japan as compared
with the amount that it would have been had the enterprise taxes been
levied on income instead of gross profits.
3. Ordinary income from overseas operations
(in millions of yen)
---------------------------------------------------------------------------------------------------------------------------
Ordinary income from overseas
Ordinary income from Consolidated operations as a percentage of
overseas operations ordinary income consolidated ordinary income
---------------------------------------------------------------------------------------------------------------------------
For the year ended %
March 31, 2003 960,533 2,772,528 34.6
---------------------------------------------------------------------------------------------------------------------------
For the year ended %
March 31, 2002 1,377,612 3,262,347 42.2
---------------------------------------------------------------------------------------------------------------------------
Notes:
1. Amounts are rounded down to the nearest million yen.
2. Ordinary income from overseas operations consists of income from
transactions of the overseas branches of MTFG's domestic banking
subsidiary and trust banking subsidiary, and MTFG's overseas
subsidiaries (excluding internal ordinary income among consolidated
companies).
-36-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Investment securities
Following tables include:
Investment securities
Trading securities and negotiable certificates of deposits in "Trading
assets"
Negotiable certificates of deposits in "Cash and due from banks"
Securities and beneficiary certificates of merchandise investment in
"Commercial Paper and other debt purchased".
1. Trading securities
(in millions of yen)
----------------------------------------------------------
As of March 31, 2002
----------------------------------------------------------
Balance sheet Valuation losses recognized on
amount statement of operations
----------------------------------------------------------
5,092,795 (456)
----------------------------------------------------------
2. Marketable debt securities being held to maturity
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
--------------------------------------------------------------------------------
Balance sheet Market value Differences
----------------------------
amount Gains Losses
-------------------------------------------------------------------------------------------------------------------
Domestic bonds 216,074 224,947 8,872 8,956 83
----------------------------------------------------------------------------------------------------------------
Government bonds 0 0 0 0 -
----------------------------------------------------------------------------------------------------------------
Municipal bonds 127,660 132,349 4,688 4,772 83
----------------------------------------------------------------------------------------------------------------
Corporate bonds 88,414 92,597 4,183 4,183 -
-------------------------------------------------------------------------------------------------------------------
Foreign bonds 142,140 146,795 4,655 4,843 188
-------------------------------------------------------------------------------------------------------------------
Other 254,746 254,746 - - -
-------------------------------------------------------------------------------------------------------------------
Total 612,962 626,489 13,527 13,799 271
-------------------------------------------------------------------------------------------------------------------
3. Marketable securities available for sale
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
------------------------------------------------------------------------------
Cost Balance sheet Valuation differences
----------------------------
amount Gains Losses
-------------------------------------------------------------------------------------------------------------------
Domestic equity securities 4,901,605 4,973,059 71,454 551,983 480,528
-------------------------------------------------------------------------------------------------------------------
Domestic bonds 11,071,960 11,151,663 79,702 83,691 3,989
----------------------------------------------------------------------------------------------------------------
Government bonds 9,289,845 9,348,331 58,486 59,085 598
----------------------------------------------------------------------------------------------------------------
Municipal bonds 444,440 454,724 10,284 10,426 142
----------------------------------------------------------------------------------------------------------------
Corporate bonds 1,337,675 1,348,606 10,931 14,179 3,248
-------------------------------------------------------------------------------------------------------------------
Foreign equity securities 28,559 54,553 25,994 26,725 731
-------------------------------------------------------------------------------------------------------------------
Foreign bonds 4,838,160 4,839,041 880 67,404 66,524
-------------------------------------------------------------------------------------------------------------------
Other 1,357,507 1,318,317 (39,189) 14,119 53,309
-------------------------------------------------------------------------------------------------------------------
Total 22,197,793 22,336,635 138,842 743,925 605,083
-------------------------------------------------------------------------------------------------------------------
4. Securities available for sale sold
(in millions of yen)
--------------------------------------------------------
For the year ended March 31,2002
--------------------------------------------------------
Proceeds Gains Losses
from sales on sales on sales
--------------------------------------------------------
28,137,984 255,369 300,345
--------------------------------------------------------
5. Principal securities not stated at market value
(in millions of yen)
--------------------------------------------------------------------------------------------
As of March 31, 2002
----------------------------
Balance sheet amount
--------------------------------------------------------------------------------------------
Debt securities being held to maturity
Foreign bonds 11,392
--------------------------------------------------------------------------------------------
Securities available for sale
Domestic equity securities 96,621
Domestic municipal bonds 45,287
Domestic corporate bonds 253,946
Foreign equity securities 11,918
Foreign bonds 25,984
--------------------------------------------------------------------------------------------
6. Repayment schedules of securities
(in millions of yen)
--------------------------------------------------------------------------------------------
As of March 31, 2002
----------------------------------------------------------------
Due within Due after 1 year Due after 5 years Due after
1 year through 5 years through 10 years 10 years
--------------------------------------------------------------------------------------------
Domestic bonds 3,715,867 6,716,062 1,233,198 1,785
-----------------------------------------------------------------------------------------
Government bonds 3,505,091 4,941,208 902,032 -
-----------------------------------------------------------------------------------------
Municipal bonds 16,034 406,601 205,036 -
-----------------------------------------------------------------------------------------
Corporate bonds 194,742 1,368,252 126,128 1,785
--------------------------------------------------------------------------------------------
Foreign bonds 709,418 2,819,025 1,084,232 403,764
--------------------------------------------------------------------------------------------
Other 338,836 530,919 226,268 376,938
--------------------------------------------------------------------------------------------
Total 4,764,122 10,066,007 2,543,700 782,487
--------------------------------------------------------------------------------------------
-37-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Money held in trust
1. Money held in trust for trading purpose
(in millions of yen)
-----------------------------------------------------------
As of March 31, 2002
-----------------------------------------------------------
Balance sheet Valuation gains recognized on
amount statement of operations
-----------------------------------------------------------
219,026 3,338
-----------------------------------------------------------
2. Money held in trust other than trading purpose and being held to maturity
(in millions of yen)
---------------------------------------------------------------------------
As of March 31, 2002
---------------------------------------------------------------------------
Cost Balance sheet Valuation differences
----------------------
amount Gains Losses
---------------------------------------------------------------------------
85,033 85,033 - - -
---------------------------------------------------------------------------
Unrealized gains on securities available for sale
The classification of unrealized gains on securities available for sale on
the consolidated balance sheet is as follows:
(in millions of yen)
------------------------------------------------------------------------------
As of March 31, 2002
------------------------------------------------------------------------------
Valuation differences 138,842
--------------------------------------------------------------------------
Securities available for sale 138,842
------------------------------------------------------------------------------
Deferred tax liabilities (49,076)
------------------------------------------------------------------------------
Net valuation differences 89,765
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Minority interest (4,145)
------------------------------------------------------------------------------
MTFG's ownership percentage of affiliates' unrealized
gains on securities available for sale (1,603)
------------------------------------------------------------------------------
Unrealized gains on securities available for sale 84,016
------------------------------------------------------------------------------
-38-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Notional principal or contract amount, market value and valuation gains (losses)
on derivatives
a. Interest rate-related transactions
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
--------------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
----------------------------------------------------------------------------------------------------------------------------------
Exchange-traded
----------------------------------------------------------------------------------------------------------------------------------
sell 4,979,785 235,364 (37,589) (37,589)
Futures -----------------------------------------------------------------------------------------------------
buy 6,782,908 660,290 27,458 27,458
-------------------------------------------------------------------------------------------------------------------------
sell 16,690,400 - (17,299) (10,658)
Options -----------------------------------------------------------------------------------------------------
buy 22,234,614 8,124 35,101 21,088
----------------------------------------------------------------------------------------------------------------------------------
Over-the-counter
-------------------------------------------------------------------------------------------------------------------------
sell 702,374 452 973 973
FRAs -----------------------------------------------------------------------------------------------------
buy 799,281 42,336 (2,649) (2,649)
-------------------------------------------------------------------------------------------------------------------------
receive-fix/pay-floater 105,883,942 81,131,283 4,109,124 4,109,124
--------------------------------------------------------------------------------------------------------------
receive-floater/pay-fix 104,900,874 79,166,025 (3,989,686) (3,989,686)
Swaps --------------------------------------------------------------------------------------------------------------
receive-floater/pay-floater 5,791,662 4,209,716 (8,915) (8,915)
--------------------------------------------------------------------------------------------------------------
receive-fix/pay-fix 194,856 100,767 (4,233) (4,233)
-------------------------------------------------------------------------------------------------------------------------
sell 7,270,211 4,439,813 (98,797) (64,203)
Others --------------------------------------------------------------------------------------------------------------
buy 5,831,717 3,499,145 102,466 68,460
----------------------------------------------------------------------------------------------------------------------------------
Total 115,954 109,168
----------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations. Derivatives which qualify for hedge-accounting are not included
in the above table.
2. Market values of exchange-traded transactions are based on closing prices on
the Tokyo International Financial Future Exchange, etc.
Market values of over-the-counter transactions are based on discounted cash
flow method, option pricing models, etc.
b. Foreign exchange-related transactions
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
-------------------------------------------------------------------------------------------------------------------
Over-the-counter
-------------------------------------------------------------------------------------------------------------------
Swaps 9,539,280 6,189,546 (109,996) (109,996)
-------------------------------------------------------------------------------------------------------------------
Forward sell 23,912 - (523) (523)
---------------------------------------------------------------------------------------------
contracts buy 16,662 - 788 788
-------------------------------------------------------------------------------------------------------------------
sell 883 - (6) 6
Options ---------------------------------------------------------------------------------------------
buy 883 - 6 (3)
-------------------------------------------------------------------------------------------------------------------
Total (109,731) (109,729)
-------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations. Derivatives which qualify for hedge-accounting and/or which
are applicable to note 3. are not included in the above table.
2. Market values are based on discounted cash flow method, option pricing
models, etc.
3. Currency swaps which are accounted for by an accrual basis are not
included in the above table. Notional principal amount, market value and
valuation gains of currency swaps which are accounted for by an accrual
basis are as follows:
(in millions of yen)
As of March 31, 2003
-------------------------------------------------------------------------
Notional principal
amount Market value Valuation losses
-------------------------------------------------------------------------
Swaps 5,800,174 (47,725) (47,725)
-------------------------------------------------------------------------
Other foreign exchange-related transactions such as forward exchange
contracts and currency options, which valuation gains (losses) had been
recognized in the consolidated statement of operations, are not included in
the above table.
Notional principal or contract amounts of those foreign exchange-related
transactions are as follows:
(in millions of yen)
----------------------------------------------------------------------------
As of March 31, 2003
---------------------
Notional principal
or contract amount
-----------------------------------------------------------------------------
Exchange-traded
----------------------------------------------------------------------------
sell 564
Futures ----------------------------------
buy 2,985
----------------------------------------------------------------------------
Over-the-counter
----------------------------------------------------------------------------
Forward sell 27,811,969
-----------------------------------
contracts buy 30,148,731
-------------------------------------------------
sell 4,991,663
Options -----------------------------------
buy 4,705,518
-----------------------------------------------------------------------------
-39-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
c. Equity-related transactions
(in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
-----------------------------------------------------------------------------------------------------------------------------
Exchange-traded
------------------------------------------------------------------------------------------------------------------
sell 96,698 - 1,560 1,560
Futures ------------------------------------------------------------------------------------------------------
buy 82 - (0) (0)
------------------------------------------------------------------------------------------------------------------
sell 19,693 - (247) 38
Options ------------------------------------------------------------------------------------------------------
buy 11,450 - 1,508 72
-----------------------------------------------------------------------------------------------------------------------------
Over-the-counter
------------------------------------------------------------------------------------------------------------------
sell 49,054 25,657 (1,980) (1,185)
Options ------------------------------------------------------------------------------------------------------
buy 69,266 39,394 2,455 1,825
------------------------------------------------------------------------------------------------------------------
receive-index swaps 38 38 - -
Swaps ------------------------------------------------------------------------------------------------------
pay-index swaps - - - -
------------------------------------------------------------------------------------------------------------------
Index sell 260 - 7 7
------------------------------------------------------------------------------------------------------
forwards buy 1,007 - (57) (57)
-----------------------------------------------------------------------------------------------------------------------------
Total 3,246 2,261
-----------------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations.
2. Market values of exchange-traded transactions are based on closing prices
on the Tokyo Stock Exchange, etc.
Market values of over-the-counter transactions are based on discounted
cash flow method, option pricing models, etc.
d. Bond-related transactions
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation
or contract amount of over 1 year gains (losses)
------------------------------------------------------------------------------------------------------------------------
Exchange-traded
---------------------------------------------------------------------------------------------------------------------
sell 539,459 27,604 (1,052) (1,052)
Futures --------------------------------------------------------------------------------------------------
buy 551,546 22,762 1,025 1,025
---------------------------------------------------------------------------------------------------------------------
sell 88,630 37,431 (139) 260
Options --------------------------------------------------------------------------------------------------
buy 202,912 37,431 276 (300)
------------------------------------------------------------------------------------------------------------------------
Over-the-counter
---------------------------------------------------------------------------------------------------------------------
sell 487,927 - (3,661) (1,187)
Options --------------------------------------------------------------------------------------------------
buy 310,284 - 691 (116)
------------------------------------------------------------------------------------------------------------------------
Total (2,859) (1,370)
------------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations. Derivatives which qualify for hedge-accounting are not
included in the above table.
2. Market values of exchange-traded transactions are based on closing prices
on the Tokyo Stock Exchange, etc.
Market values of over-the-counter transactions are based on option
pricing models, etc.
e. Commodity-related transactions
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
----------------------------------------------------------------------------------------------------------------------------
Exchange-traded
-------------------------------------------------------------------------------------------------------------------------
sell 1,123 - (41) (41)
Futures -----------------------------------------------------------------------------------------------------
buy 3,491 3,224 159 159
----------------------------------------------------------------------------------------------------------------------------
Over-the-counter
-------------------------------------------------------------------------------------------------------------------------
receive-index swaps 138,709 71,273 (14,903) (14,903)
Swaps -----------------------------------------------------------------------------------------------------
pay-index swaps 123,008 45,895 14,654 14,654
-------------------------------------------------------------------------------------------------------------------------
sell 28,774 8,192 (1,881) (505)
Options -----------------------------------------------------------------------------------------------------
buy 33,528 7,546 3,903 1,999
----------------------------------------------------------------------------------------------------------------------------
Total 1,891 1,362
----------------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations.
2. Market values of exchange-traded transactions are based on closing prices
on the International Petroleum Exchange, etc.
Market values of over-the-counter transactions are based on the price of
the commodities, contract terms, and other factors comprising the
contract of transactions.
3. Commodities are mainly related to petroleum.
-40-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
f. Credit derivatives
(in millions of yen)
As of March 31, 2003
------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation
or contract amount of over 1 year gains
--------------------------------------------------------------------------------------------------------------------------
Over-the-counter
-------------------------------------------------------------------------------------------------------------------
Credit default sell 342,536 275,427 29,452 29,452
--------------------------------------------------------------------------------------------------
options buy 489,391 334,624 648 648
-------------------------------------------------------------------------------------------------------------------
sell 3,227 - 286 286
Others --------------------------------------------------------------------------------------------------
buy - - - -
--------------------------------------------------------------------------------------------------------------------------
Total 30,386 30,386
--------------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains are recognized in the consolidated statement of operations.
2. Market values are based on discounted cash flow method, option pricing
models, etc.
3. In the above table, "sell" indicates credit risks assumed, and "buy"
indicates credit risks transferred.
g. Others
(in millions of yen)
--------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------------------------
Notional principal with maturity
or contract amount of over 1 year Market value Valuation gains
---------------------------------------------------------------------------------------------------------------------
Over-the-counter
-------------------------------------------------------------------------------------------------------------------
Weather sell 215 - (8) 26
-------------------------------------------------------------------------------------------------
derivatives buy - - - -
---------------------------------------------------------------------------------------------------------------------
Total (8) 26
---------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains are recognized in the consolidated statement of operations.
2. Market values are based on option pricing models, etc.
(Reference)
Derivatives qualified for hedge-accounting
(in billions of yen)
--------------------------------------------------------------------------------------------------
As of March 31, 2003
--------------------------------------------------------------------------------------------------
Notional principal Deferred gains Deferred losses Net gains (losses)
or contract amount Market value (A) (B) (A)-(B)
-----------------------------------------------------------------------------------------------------------------------------------
Interest rate futures 1,625.4 4.3 58.3 42.4 15.8
-----------------------------------------------------------------------------------------------------------------------------------
Interest rate swaps 42,409.9 206.0 669.6 570.6 98.9
-----------------------------------------------------------------------------------------------------------------------------------
Other interest rate-related
transactions 291.7 (0.2) 0.7 0.6 0.1
-----------------------------------------------------------------------------------------------------------------------------------
Other 662.2 (3.3) 24.8 31.1 (6.2)
-----------------------------------------------------------------------------------------------------------------------------------
Total 206.8 753.5 644.9 108.6
-----------------------------------------------------------------------------------------------------------------------------------
Notes:
1. Derivatives which are accounted for on an accrual basis based on
"Accounting standard for financial instruments" are not included in the
above table.
2. The transactions in the table above are reported on a mark-to-market basis
on the consolidated balance sheet.
The valuation differences which do not correspond to the income/expenses
accruing on hedged items are deferred asstes/liabilities.
Notional principal by the remaining life of the interest rate swaps above
is as follows.
(in billions of yen)
-------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------------------------------------------------------
Due within 1 year Due after 1 year Due after 5 year Total
through 5 years
-------------------------------------------------------------------------------------------------------------------
Receive-fix/pay-floater 12,411.5 14,407.5 1,178.1 27,997.2
-------------------------------------------------------------------------------------------------------------------
Receive-floater/pay-fix 5,624.2 7,180.3 833.0 13,637.6
-------------------------------------------------------------------------------------------------------------------
Receive-floater/pay-floater 306.2 414.8 53.8 774.9
-------------------------------------------------------------------------------------------------------------------
Total 18,342.0 22,002.8 2,065.0 42,409.9
-------------------------------------------------------------------------------------------------------------------
-41-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
Notional principal or contract amount, market value and valuation gains (losses)
on derivatives
a. Interest rate-related transactions
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
--------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
-------------------------------------------------------------------------------------------------------------------
Exchange-traded
-------------------------------------------------------------------------------------------------------------
sell 9,945,795 1,330,217 (78,510) (78,510)
Futures -----------------------------------------------------------------------------------------------------
buy 11,588,263 1,593,247 70,874 70,874
-------------------------------------------------------------------------------------------------------------
sell 4,949,268 7,955 (5,837) 1,306
Options -----------------------------------------------------------------------------------------------------
buy 5,307,916 23,784 8,993 (2,794)
------------------------------------------------------------------------------------------------------------------
Over-the-counter
-------------------------------------------------------------------------------------------------------------
sell 201,257 1,333 (97) (97)
FRAs -----------------------------------------------------------------------------------------------------
buy 190,629 42,136 (909) (909)
-------------------------------------------------------------------------------------------------------------
receive-fix/pay-floater 112,006,008 74,856,804 3,319,807 3,319,807
-----------------------------------------------------------------------------------------------------
receive-floater/pay-fix 113,791,761 74,335,547 (3,220,413) (3,220,413)
Swaps -----------------------------------------------------------------------------------------------------
receive-floater/pay-floater 4,987,418 4,144,936 (3,115) (3,115)
-----------------------------------------------------------------------------------------------------
receive-fix/pay-fix 289,172 176,939 (580) (580)
-------------------------------------------------------------------------------------------------------------
sell 7,329,000 4,488,747 (77,834) (15,669)
Others -----------------------------------------------------------------------------------------------------
buy 5,993,942 4,073,644 79,061 21,722
------------------------------------------------------------------------------------------------------------------
Total 91,439 91,619
------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations. Derivatives which qualify for hedge-accounting are not included
in the table above.
2. Market values of exchange-traded transactions are based on closing prices
on the Tokyo International Financial Future Exchange, etc. Market values of
over-the-counter transactions are based on discounted cash flow method,
option pricing models, etc.
b. Foreign exchange-related transactions
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
-------------------------------------------------------------------------------
Notional principal with maturity
amount of over 1 year Market value Valuation losses
-------------------------------------------------------------------------------------------------------------------
Over-the-counter
----------------------------------------------------------------------------------------------------------------
Swaps 9,241,514 6,560,260 (69,519) (69,519)
-------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation losses are recognized in the consolidated statement of
operations. Derivatives which qualify for hedge-accounting and/or which are
applicable to note 3. are not included in the table above.
2. Market values are based on the discounted cash flow method.
3. Currency swaps which are accounted for on an accrual basis are not included
in the table above. Notional principal amount, market value and valuation
gains (losses) on currency swaps which are accounted for on an accrual
basis are as follows:
(in millions of yen)
-------------------------------------------------------------------------------------
As of March 31, 2002
-------------------------------------------------------------------------
Notional principal
amount Market value Valuation losses
-----------------------------------------------------------------------------------
Swaps 6,686,242 (99,647) (99,647)
-----------------------------------------------------------------------------------
Other foreign exchange-related transactions such as forward
exchange contracts and currency options, whose valuation gains
(losses) have been recognized in the consolidated statement of
operations, are not included in the table above.
Notional principal or contract amounts of such foreign
exchange-related transactions are as follows:
(in millions of yen)
-------------------------------------------------------------------
As of March 31, 2002
-------------------------------------
Notional principal or contract amount
-------------------------------------------------------------------
Exchange-traded
----------------------------------------------------------------
sell 790
Futures ----------------------------------------------
buy 1,314
-------------------------------------------------------------------
Over-the-counter
----------------------------------------------------------------
Forward sell 33,994,202
----------------------------------------------
contracts buy 35,862,732
----------------------------------------------------------------
sell 4,188,375
Options ----------------------------------------------
buy 4,072,059
-------------------------------------------------------------------
-42-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
c. Equity-related transactions
(in millions of yen)
---------------------------------------------------------------------------------------------------------------
As of March 31, 2002
---------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
---------------------------------------------------------------------------------------------------------------
Exchange-traded
------------------------------------------------------------------------------------------------------------
sell 166,279 - 2,112 2,112
Futures ---------------------------------------------------------------------------------------------
buy 6,134 - 37 37
------------------------------------------------------------------------------------------------------------
sell 6,692 - (37) 20
Options ---------------------------------------------------------------------------------------------
buy 8,512 - 232 53
---------------------------------------------------------------------------------------------------------------
Over-the-counter
------------------------------------------------------------------------------------------------------------
sell 223,122 104,338 (42,827) (15,309)
Options ---------------------------------------------------------------------------------------------
buy 231,491 102,129 39,008 10,718
------------------------------------------------------------------------------------------------------------
receive-index swaps 2,422 - (95) (95)
Swaps ---------------------------------------------------------------------------------------------
pay-index swaps 11,782 4,260 379 379
---------------------------------------------------------------------------------------------------------------
Total (1,190) (2,084)
---------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations.
2. Market values of exchange-traded transactions are based on closing prices
on the Osaka Stock Exchange, etc.
Market values of over-the-counter transactions are based on discounted cash
flow method, option pricing models, etc.
d. Bond-related transactions
(in millions of yen)
------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
-----------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
------------------------------------------------------------------------------------------------------------------
Exchange-traded
---------------------------------------------------------------------------------------------------------------
sell 460,102 20,390 (672) (672)
Futures ----------------------------------------------------------------------------------------------
buy 425,757 12,045 (18) (18)
---------------------------------------------------------------------------------------------------------------
sell 493,731 - (982) 50
Options ----------------------------------------------------------------------------------------------
buy 228,111 14,811 521 (4)
------------------------------------------------------------------------------------------------------------------
Over-the-counter
---------------------------------------------------------------------------------------------------------------
sell 105,600 - (733) 119
Options ----------------------------------------------------------------------------------------------
buy 25,785 - 78 10
------------------------------------------------------------------------------------------------------------------
Total (1,808) (515)
------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations. Derivatives which qualify for hedge-accounting are not included
in the table above.
2. Market values of exchange-traded transactions are based on closing prices
on the Tokyo Stock Exchange, etc.
Market values of over-the-counter transactions are based on option pricing
models, etc.
e. Commodity-related transactions
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
--------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
-------------------------------------------------------------------------------------------------------------------
Exchange-traded
----------------------------------------------------------------------------------------------------------------
sell 2,631 326 220 220
Futures ------------------------------------------------------------------------------------------------
buy 5,193 2,415 (196) (196)
----------------------------------------------------------------------------------------------------------------
sell 2,883 - (296) 4
Options ------------------------------------------------------------------------------------------------
buy 2,003 - 56 (56)
-------------------------------------------------------------------------------------------------------------------
Over-the-counter
----------------------------------------------------------------------------------------------------------------
receive-index swaps 166,734 58,269 (3,163) (3,163)
Swaps ------------------------------------------------------------------------------------------------
pay-index swaps 154,168 42,168 (7,786) (7,786)
----------------------------------------------------------------------------------------------------------------
sell 64,758 6,506 (3,332) (140)
Options ------------------------------------------------------------------------------------------------
buy 77,370 9,992 4,681 (943)
-------------------------------------------------------------------------------------------------------------------
Total (9,817) (12,063)
-------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations.
2. Market values of exchange-traded transactions are based on closing prices
on the International Petroleum Exchange, etc.
Market values of over-the-counter transactions are based on the price of
the commodities, contract terms, and other factors comprising the contract
of transactions.
3. Commodities are mainly related to petroleum.
-43-
Mitsubishi Tokyo Financial Group, Inc. and Consolidated Subsidiaries
f. Credit derivatives
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
------------------------------------------------------------------------------
Notional principal with maturity Valuation
or contract amount of over 1 year Market value gains (losses)
----------------------------------------------------------------------------------------------------------------------------
Over-the-counter
-----------------------------------------------------------------------------------------------------------------------
sell 373,649 307,792 76,186 76,186
Credit default options ---------------------------------------------------------------------------------------
buy 534,175 373,215 3,232 3,232
-----------------------------------------------------------------------------------------------------------------------
sell - - - -
Others ---------------------------------------------------------------------------------------
buy 130,297 16,837 (938) (938)
----------------------------------------------------------------------------------------------------------------------------
Total 78,480 78,480
----------------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains (losses) are recognized in the consolidated statement of
operations.
2. Market values are based on discounted cash flow method, option pricing
models, etc.
3. In the table above, "sell" indicates credit risks assumed, and "buy"
indicates credit risks transferred.
g. Others
(in millions of yen)
--------------------------------------------------------------------------------------------------------------------
As of March 31, 2002
--------------------------------------------------------------------------------
Notional principal with maturity
or contract amount of over 1 year Market value Valuation gains
--------------------------------------------------------------------------------------------------------------------
Over-the-counter
---------------------------------------------------------------------------------------------------------------
Weather sell 146 - 8 12
------------------------------------------------------------------------------------------
derivatives buy - - - -
--------------------------------------------------------------------------------------------------------------------
Total 8 12
--------------------------------------------------------------------------------------------------------------------
Notes:
1. Valuation gains are recognized in the consolidated statement of
operations.
2. Market values are based on discounted cash flow method, option pricing
models, etc.
-44-
Non-Consolidated Summary Report
(under Japanese GAAP)
for the Fiscal Year Ended March 31, 2003
Date: May 26, 2003
Company name (code number): Mitsubishi Tokyo Financial Group, Inc. (8306)
(URL http://www.mtfg.co.jp)
Stock exchange listings: Tokyo, Osaka, New York, London
Headquareters: Tokyo
Representative: Shigemitsu Miki, President & CEO
For inquiry: Katsuhiko Ishizuka, Chief Manager - Financial
Policy Division
(Phone) +81-3-3240-8211
Date of resolution of Board of
Directors with respect to the
non-consolidated financial
statements: May 26, 2003
Date of the Ordinary General
Meeting of Shareholders: June 27, 2003
Interim dividends policy: Yes
Unit share system: No
1. Non-consolidated financial data for the year ended March 31, 2003
(1) Operating results
(in millions of yen except per share data and percentages)
--------------------------------------------------------------------------------------
For the year ended March 31,
----------------------------
2003 2002
--------------------------------------------------------------------------------------
Operating income 27,232 72,544
Change from the previous year (62.5)% --
--------------------------------------------------------------------------------------
Operating profit 23,991 68,378
Change from the previous year (64.9)% --
--------------------------------------------------------------------------------------
Ordinary profit 22,415 68,114
Change from the previous year (67.1)% --
--------------------------------------------------------------------------------------
Net income 23,389 67,871
Change from the previous year (65.5)% --
--------------------------------------------------------------------------------------
Net income per common share 2,610.44 10,367.98
--------------------------------------------------------------------------------------
Net income per common and common equivalent share -- --
--------------------------------------------------------------------------------------
Net income as a percentage of shareholders' equity 0.4% 1.7%
--------------------------------------------------------------------------------------
Ordinary profit as a percentage of total liabilities and
shareholders' equity 0.5% 1.6%
--------------------------------------------------------------------------------------
Ordinary profit as a percentage of operating income 82.3% 93.9%
--------------------------------------------------------------------------------------
Notes:
1. Average number of shares outstanding for the year ended:
March 31, 2003: (common stock) 5,766,886 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
March 31, 2002: (common stock) 5,742,295 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
2. Changes in accounting policy : No
-45-
(2) Payment of dividends
(in millions of yen except per share data and percentages)
----------------------------------------------------------------------------------------------------------------
For the year ended March 31,
-------------------------------------------------------------
2003 2002
-------------------------------------------------------------
Preferred Preferred Preferred Preferred
Common stock- stock- Common stock- stock-
stock class 1 class 2 stock class 1 class 2
-------------------------------------------------------------
Interim dividends per share 0 41,250 8,100 - - -
----------------------------------------------------------------------------------------------------------------
Term-end dividends per share 4,000 41,250 8,100 6,000 82,500 16,200
----------------------------------------------------------------------------------------------------------------
Total dividends per share
paid for the fiscal year 4,000 82,500 16,200 6,000 82,500 16,200
----------------------------------------------------------------------------------------------------------------
Total dividends for the fiscal year 24,922 6,715 1,620 34,452 6,715 1,620
----------------------------------------------------------------------------------------------------------------
Total dividends for the fiscal year
as a percentage of net income 165.5% 57.9%
----------------------------------------------------------------------------------------------------------------
Total dividends for the fiscal year
as a percentage of shareholders' equity 0.7% 1.0%
----------------------------------------------------------------------------------------------------------------
(3) Balance sheet highlights
(in millions of yen except per share data and percentages)
----------------------------------------------------------------------------
As of March 31,
-------------------------
2003 2002
-------------------------
Total assets 4,264,085 4,301,963
----------------------------------------------------------------------------
Shareholders' equity 4,251,306 4,052,733
----------------------------------------------------------------------------
Shareholders' equity as a percentage 99.7% 94.2%
of total liabilities and shareholders' equity
----------------------------------------------------------------------------
Shareholders' equity per common share 609,704.98 628,435.11
----------------------------------------------------------------------------
Notes:
1. Number of shares outstanding as of:
March 31, 2003: (common stock) 6,230,506 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
March 31, 2002: (common stock) 5,742,093 shares
(preferred stock-class 1) 81,400 shares
(preferred stock-class 2) 100,000 shares
2. Number of treasury stocks outstanding as of:
March 31, 2003: 1,655 shares
March 31, 2002: 374 shares
2. Earning projections for the fiscal year ending March 31, 2004
(in millions of yen except per share data)
---------------------------------------------------------------------------------------
For the six months ending For the year ending
September 30, 2003 March 31, 2004
---------------------------------------------------------------------------------------
Operating income 42,000 44,000
---------------------------------------------------------------------------------------
Ordinary profit 40,000 40,000
---------------------------------------------------------------------------------------
Net income 40,000 40,000
---------------------------------------------------------------------------------------
Dividend per share: Common stock - 4,000
---------------------------------------------------------------------------------------
Preferred stock-class 1 41,250 82,500
Preferred stock-class 2 8,100 16,200
Projected net income per common share for the year
ending March 31, 2004 (yen): 5,082.17
-46-
(Reference)
Formulas for computing ratios for the fiscal year ended March 31, 2003 are as
follows.
Net income per common share
Net income attributable to common shareholders
--------------------------------------------------------
Average number of common stock for the fiscal year*
Net income per common and common equivalent share
Net income attributable to common shareholders + Adjustments in net income
--------------------------------------------------------------------------------
Average number of common stock for the fiscal year* + Common equivalent share
Net income as a percentage of shareholders' equity
Net income attributable to common shareholders
-------------------------------------------------------------------------- x 100
{[Shareholders' equity at the beginning of the fiscal year - Number of
preferred stock at the beginning of the fiscal year x Issue price]
+ [Shareholders' equity at fiscal year end - Number of preferred stock at
fiscal year end x Issue price] } / 2
Total dividends for the fiscal year as a percentage of net income
Total dividends for the fiscal year on common stock
------------------------------------------------------------------- x 100
Net income - Total dividends for the fiscal year on preferred stock
Total dividends for the fiscal year as a percentage of shareholders' equity
Total dividends for the fiscal year on common stock
--------------------------------------------------------------------- x 100
Shareholders' equity at fiscal year end - Number of preferred stock at
fiscal year end x Issue price
Shareholders' equity per common share
Shareholders' equity at fiscal year end - Deduction from shareholders' equity**
--------------------------------------------------------------------------------
Number of common stock at fiscal year end*
Note: Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.2 "Accounting Standard for Earnings Per Share" issued by
the Accounting Standards Board of Japan (the "ASBJ") on September 25,
2002 and Financial Accounting Standards Implementation Guidance No.4
"Implementation Guidance for Accounting Standard for Earnings Per
Share" issued by the ASBJ on September 25, 2002.
Formula for computing projected earning ratio for the fiscal year ending March
31, 2004 is as follows.
Projected net income per common share
Projected net income attributable to common shareholders
--------------------------------------------------------------
Number of common stock at fiscal year end*
* excluding treasury stock
**number of preferred stock at fiscal year end x issue price + total
dividends on preferred stock
This financial summary report and the accompanying financial highlights
contain forward looking statements and other information relating to the
Company (such statements and information are hereafter referred to as the
"Forward-Looking Statements"). The Forward-Looking Statements are not
historical facts and include, reflect or are otherwise based upon, among
other things, the Company's current projections, views, policies, business
strategies, targets, expectations, assumptions and evaluations with respect
to general economic conditions, the result of its operations, its financial
condition, its management in general and other future events.
Some Forward-Looking Statements represent targets that the Company's
management will strive to achieve through the successful implementation of
the Company's business strategies. Accordingly, they are inherently
susceptible to uncertainties, risks and changes in circumstances and are not
guarantees of future performance. The Company may not be successful in
implementing its business strategy, and actual results may differ
materially, for a wide range of possible reasons. Please see "3. Results of
Operations and Financial Condition - (1) Results of operations."
In light of the many risks, uncertainties and possible changes, you are
advised not to put undue reliance on the Forward-Looking Statements. The
Company is under no obligation - and expressly disclaim any obligation - to
update or alter the Forward-Looking Statements, except as may be required by
any applicable laws and regulations or stock exchange rules.
-47-
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc.
Non-Consolidated Balance Sheets
------------------------------------------------------------------------------------------------------------------
As of March 31, As of March 31,
(in millions of yen) 2002 2003
------------------------------------------------------------------------------------------------------------------
Assets:
Current assets:
Cash and bank deposits with banks 39,212 34,360
Deferred tax assets 50 104
Accounts receivable - 15,544
Other 16,037 1,422
Total current assets 55,300 1.3% 51,432 1.2%
Fixed assets:
Premises and equipment:
Leasehold improvements 261 211
Equipment and furniture 177 156
Total premises and equipment 439 367
Intangible assets:
Trademarks 56 55
Computer software 357 315
Other 2 1
Total intangible assets 415 372
Investments and other assets:
Investments in subsidiaries 4,000,070 4,210,347
Convertible bonds due from subsidiary 243,924 -
Deferred tax assets - 12
Other 436 521
Total investments and other assets 4,244,431 4,210,881
Total fixed assets 4,245,287 98.7% 4,211,622 98.8%
Deferred charge:
Organization cost 1,375 1,031
Total deferred charge 1,375 0.0% 1,031 0.0%
----------------------------------------------------------------------------------------------------------------
Total assets 4,301,963 100.0% 4,264,085 100.0%
----------------------------------------------------------------------------------------------------------------
Liabilities:
Current liabilities:
Accounts payable 250 12,241
Accrued expenses 2,772 112
Accrued income taxes 109 292
Other 59 54
Reserve for employees' bonuses 75 78
Total current liabilities 3,267 0.1% 12,779 0.3%
Long-term liabilities:
Convertible bonds 243,924 -
Deferred tax liabilities 2,038 -
Total long-term liabilities 245,962 5.7% - -%
-----------------------------------------------------------------------------------------------------------------
Total liabilities 249,230 5.8% 12,779 0.3%
-----------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Capital stock 1,146,500 26.6% 1,258,052 29.5%
Capital surplus:
Legal capital surplus 2,838,692 2,350,244
Other capital surplus - 600,000
Total capital surplus 2,838,692 66.0% 2,950,244 69.2%
Retained earnings:
Unappropriated 67,871 44,305
Total retained earnings 67,871 1.6% 44,305 1.0%
-----------------------------------------------------------------------------------------------------------------
Total 4,053,064 94.2% 4,252,602 99.7%
Less treasury stock (331) (0.0)% (1,296) (0.0)%
-----------------------------------------------------------------------------------------------------------------
Total shareholders' equity 4,052,733 94.2% 4,251,306 99.7%
-----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity 4,301,963 100.0% 4,264,085 100.0%
=================================================================================================================
See Notes to Non-Consolidated Financial Statements.
-48-
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc.
Non-Consolidated Statements of Income
------------------------------------------------------------------------------------------------------------------
For the year ended For the year ended
(in millions of yen) March 31, 2002 March 31, 2003
------------------------------------------------------------------------------------------------------------------
Operating income:
Dividends on investments in subsidiaries 67,577 22,067
Management fees from subsidiaries 4,967 5,165
------------------------------------------------------------------------------------------------------------------
Total operating income 72,544 100.0% 27,232 100.0%
------------------------------------------------------------------------------------------------------------------
Operating expenses:
General and administrative expenses 4,166 3,240
------------------------------------------------------------------------------------------------------------------
Total operating expenses 4,166 5.7% 3,240 11.9%
------------------------------------------------------------------------------------------------------------------
Operating profit 68,378 94.3% 23,991 88.1%
------------------------------------------------------------------------------------------------------------------
Non-operating income:
Interest on deposits 7 6
Interest on securities 7,137 4,729
Other 230 125
------------------------------------------------------------------------------------------------------------------
Total non-operating income 7,374 10.1% 4,861 17.8%
------------------------------------------------------------------------------------------------------------------
Non-operating expenses:
Interest on borrowed money 27 -
Interest on convertible bonds 7,137 4,729
Amortization of organization cost 343 343
Amortization of stock issuance costs - 1,351
Other 129 13
------------------------------------------------------------------------------------------------------------------
Total non-operating expenses 7,638 10.5% 6,437 23.6%
------------------------------------------------------------------------------------------------------------------
Ordinary profit 68,114 93.9% 22,415 82.3%
------------------------------------------------------------------------------------------------------------------
Special losses:
Losses on sales of fixed assets - 2
Losses on disposition of fixed assets - 269
------------------------------------------------------------------------------------------------------------------
Total special losses - -% 272 1.0%
------------------------------------------------------------------------------------------------------------------
Income before income taxes 68,114 93.9% 22,143 81.3%
------------------------------------------------------------------------------------------------------------------
Income taxes-current 306 859
Income taxes-deferred (63) (2,105)
Total income taxes 242 0.3% (1,245) (4.6)%
------------------------------------------------------------------------------------------------------------------
Net income 67,871 93.6% 23,389 85.9%
------------------------------------------------------------------------------------------------------------------
Unappropriated retained earnings brought forward - 25,083
Interim cash dividends - 4,167
Unappropriated retained earnings at fiscal year end 67,871 44,305
------------------------------------------------------------------------------------------------------------------
See Notes to Non-Consolidated Financial Statements.
-49-
Notes to Non-Consolidated Financial Statements
The accompanying Non-Consolidated Financial Statements are compiled as
required by the Securities and Exchange Law of Japan and in conformity with
accounting principles and practices generally accepted in Japan, which are
different in certain respects as compared to the application and disclosure
requirements of International Accounting Standards. The Non-Consolidated
Financial Statements are not intended to present the financial position and
results of operation in accordance with accounting principles and practices
generally accepted in countries and jurisdictions other than Japan. For the
convenience of readers, the presentation is modified in certain respects from
the original Japanese report. The amounts are presented in millions of yen and
are rounded down to the nearest million.
Critical accounting policies
1. Investments
Investments in subsidiaries are stated at cost determined by the
moving-average method.
2. Depreciation for fixed assets
Depreciation for premises and equipment is computed using the
declining-balance method based on the following estimated useful lives. The
range of estimated useful lives is principally as follows:
Leasehold improvements 3 years to 50 years
Equipment and furniture 3 years to 20 years
Amortization for intangible assets is computed by the straight-line method
over estimated useful lives. Costs of computer software developed or
obtained for internal use are deferred and amortized using the
straight-line method over the estimated useful lives of 5 years.
3. Deferred charge
Organization cost is deferred and amortized using the straight-line method
over 5 years pursuant to the Commercial Code of Japan.
Stock issuance costs are charged to expenses when incurred.
4. Reserve
A reserve for employees' bonuses is provided for the payment of employees'
bonuses based on estimated amounts of the future payments attributed to the
current fiscal year.
5. Consumption Taxes
The National Consumption Tax and the Local Consumption Tax are excluded
from transaction amounts.
6. Consolidated Corporate-tax System
Since the current fiscal year, MTFG has adopted consolidated corporate-tax
system.
Change in accounting policies
Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.1 "Accounting Standard for Treasury Stock and Reversal of Legal
Reserves" issued by the Accounting Standards Board of Japan (the "ASBJ") on
February 21, 2002. There is no effect to profit (loss) during the current fiscal
year or total shareholders' equity at fiscal year end attributable to this
change.
-50-
Notes related to the Non-Consolidated Balance Sheet are as follows:
1. Accumulated depreciation on premises and equipment (Yen)144 million
2. Aggregated number of shares authorized to be issued
Common stock 22,000,000 shares
Preferred stock 421,400 shares
Aggregated number of shares issued
Common stock 6,232,161.72 shares
Preferred stock 181,400 shares
3. Treasury stock
Common stock 1,655.46 shares
Notes related to the Non-Consolidated Statement of Income are as follows:
1. Operating income on transactions with subsidiaries
Dividends on investments in subsidiaries (Yen)22,067 million
Management fees from subsidiaries (Yen)5,165 million
2. Operating expenses on transactions with subsidiaries (Yen)732 million
3. Non-operating income on transactions with subsidiaries
Interest on securities (Yen)4,729 million
4. Non-operating expenses on transactions with subsidiaries
Interest on convertible bonds (Yen)4,729 million
5. Principal items in general and administrative expenses are as follows:
Salaries and employee benefits (Yen)1,224 million
Depreciation expenses (Yen)183 million
Rental expenses (Yen)302 million
Outsourcing expenses (Yen)528 million
A note related to securities is as follows:
Fair value is not readily determinable for Investments in subsidiaries.
Notes related to income taxes are as follows:
1. The tax effects of significant temporary differences which resulted in
deferred tax assets and liabilities are as follows:
Current assets:
Deferred tax assets:
Nondeductible expenses as Accrued enterprise taxes (Yen)75 million
Excess of deductible amount as Reserve for employees' bonuses (Yen)27 million
Other (Yen)2 million
----------------
Total (Yen)104 million
Fixed assets:
Deferred tax assets:
Other (Yen)12 million
----------------
Total (Yen)12 million
Total deferred tax assets (Yen)117 million
-51-
2. A reconciliation between the normal effective statutory tax rate and the
actual effective tax rate is as follows:
Normal effective statutory tax rate 42.05%
Reconciliation:
Dividends and others exempted for income tax purposes (38.62%)
Unrealized gains (losses) on investments in subsidiaries (9.26%)
Other 0.21%
--------
Actual effective tax rate (5.62%)
3. Change in Effective Statutory Tax Rate
With the implementation of the "Revision of the Local Tax Law" (Legislation
No.9, 2003) on March 31, 2003, the tax basis of enterprise taxes is to be a
combination of "amount of added value" and "amount of capital" from the fiscal
year beginning on April 1, 2004. The tax bases are not pertinent to the
enterprise taxes that have tax bases of income-related amounts.
In connection with the "Revision of the Local Tax Law", the effective
statutory tax rate used in the calculations of deferred tax assets and
liabilities from the fiscal year beginning on April 1, 2004 decreased from
42.05% to 40.49%. The effect to Deferred tax assets and Deferred income taxes
attributable to this change is immaterial.
Per share information:
Shareholders' equity per common share (Yen)609,704.98
Net income per common share (Yen)2,610.43
Net income per common and common equivalent share --
Since the current fiscal year, MTFG has adopted Financial Accounting
Standard No.2 "Accounting Standard for Earnings Per Share" issued by the ASBJ on
September 25, 2002 and Accounting Standards Implementation Guidance No.4
"Implementation Guidance for Accounting Standard for Earnings Per Share" issued
by the ASBJ on September 25, 2002.
If MTFG had adopted the Accounting Standard and the Implementation Guidance
set forth above for the previous fiscal year, per share information as of or for
the year ended March 31, 2002 are as follows:
Shareholders' equity per common share (Yen)626,983.46
Net income per common share (Yen)10,367.98
Net income per common and common equivalent share --
(Notes)
1. Net income per common and common equivalent share is not presented since no
potential common stock was included in the computation of net income per
common and common equivalent share due to their anti-dilutive effects.
2. Bases for computing Net income per common share:
Net income per common share (Yen)2,610.43
Net income (Yen)23,389 million
Net income attributable to common share (Yen)15,054 million
Total dividends on preferred stock (Yen)8,335 million
Average number of common shares outstanding
for the fiscal year 5,766,886 shares
Common equivalent share not included in the computation of net income per
common and common equivalent share due to their anti-dilutive effects.
Preferred stock-class 2
(Number of shares outstanding: 100,000 shares)
-52-
(Japanese GAAP)
Mitsubishi Tokyo Financial Group, Inc.
Proposed Appropriations of Retained Earnings and Other Capital Surplus
-----------------------------------------------------------------------------------------------------------------------------------
For the year ended For the year ended
(in millions of yen) March 31, 2002 March 31, 2003
-----------------------------------------------------------------------------------------------------------------------------------
Appropriations of Retained Earnings
-----------------------------------------------------------------------------------------------------------------------------------
Unappropriated retained earnings at fiscal year end 67,871 44,305
-----------------------------------------------------------------------------------------------------------------------------------
Appropriations:
Cash dividends on preferred stock-class 1 (82,500 yen per share) 6,715 (41,250 yen per share) 3,357
Cash dividends on preferred stock-class 2 (16,200 yen per share) 1,620 (8,100 yen per share) 810
Cash dividends on common stock (6,000 yen per share) 34,452 (4,000 yen per share) 24,922
-----------------------------------------------------------------------------------------------------------------------------------
Total 42,788 29,089
-----------------------------------------------------------------------------------------------------------------------------------
Unappropriated retained earnings to be carried forward 25,083 15,215
===================================================================================================================================
Appropriations of Other Capital Surplus
-----------------------------------------------------------------------------------------------------------------------------------
Other capital surplus at fiscal year end - 600,000
-----------------------------------------------------------------------------------------------------------------------------------
Other capital surplus to be carried forward - 600,000
===================================================================================================================================
-53-
Changes of Directors and Corporate Auditors
-------------------------------------------
1. Changes of Representative Directors
(1) Changes (As of May 26,2003)
Hiroshi Watanabe
New Position: Senior Managing Director
Former Position: Senior Managing Director (Representative Director),
Chief Planning Officer
Tatsunori Imagawa
New Position: Senior Managing Director (Representative Director),
Chief Planning Officer
Former Position: Director
(2) Candidate of Director (As of June 27,2003)
Asataro Miyake Senior Managing Director (Representative Director),
Chief Risk Management Officer
(3) Director who is scheduled to resign (As of June 27,2003)
Setsuo Uno Senior Managing Director (Representative Director),
Chief Risk Management Officer
2. Other Changes
(1) Candidates of Directors (As of June 27,2003)
Nobuo Kuroyanagi
Haruya Uehara
Tetsuo Iwata
(2) Candidates of Corporate Auditors (As of June 27,2003)
Setsuo Uno
Takuo Oi
(3) Director who is scheduled to resign (As of June 26,2003)
Hiroshi Watanabe Senior Managing Director
(4) Corporate Auditors who are scheduled to resign (As of June 26,2003)
Yoshikazu Takagaki Corporate Auditor (full-time)
Takashi Uno Corporate Auditor
-54-
MTFG
--------------------------------------------
Selected Financial Information
under Japanese GAAP
For the Fiscal Year Ended March 31, 2003
--------------------------------------------
Mitsubishi Tokyo Financial Group, Inc.
Mitsubishi Tokyo Financial Group, Inc.
[Contents]
1 Consolidated Financial Highlights under Japanese GAAP
for the Fiscal Year Ended March 31, 2003
1. Financial Results [Consolidated] .............. 1
2. Valuation Differences on Securities [Consolidated], [Trust] .............. 2
3. Risk-Adjusted Capital Ratio Based on the Standards of the BIS [Consolidated] .............. 3
4. Return on Equity [Consolidated] .............. 3
2. Loan Portfolio and Other
1. Risk-Monitored Loans [Consolidated], [Trust] .............. 4
[Consolidated and Trust]
2. Allowance for Loan Losses [Consolidated], [Trust] .............. 6
3. Coverage Ratio against Risk-Monitored Loans [Consolidated] .............. 6
4. Disclosed Claims under the Financial Reconstruction Law (the "FRL") [Total of the 2 Banks*] .............. 7
5. Status of Secured Coverage on Disclosed Claims under the FRL [Total of the 2 Banks*] .............. 7
6. Progress in the Disposal of Problem Assets [Total of the 2 Banks*] .............. 8
7. Classification of Loans by Type of Industry [Total of the 2 Banks*] .............. 11
[Trust]
8. Foreign Loans [Total of the 2 Banks*] .............. 13
9. Loans and Deposits [Total of the 2 Banks*] .............. 14
10. Domestic Deposits [Total of the 2 Banks*] .............. 14
11. Number of Employees [Total of the 2 Banks*] .............. 14
12. Number of Offices [Total of the 2 Banks*] .............. 14
13. Employees' Retirement Benefits [Consolidated] .............. 15
14. Earning Projections for the Fiscal Year ending March 31, 2004 [Consolidated] .............. 16
[Non-Consolidated]
Note: * "Total of the 2 Banks" stands for the aggregated non-consolidated
figures of The Bank of Tokyo-Mitsubishi, Ltd. and The Mitsubishi Trust
and Banking Corporation.
Mitsubishi Tokyo Financial Group, Inc.
1 Consolidated Financial Highlights under Japanese GAAP
for the Fiscal Year Ended March 31, 2003
1. Financial Results
(in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/ For the year ended
March 31, (Decrease) March 31,
2003 (A) (A) - (B) 2002 (B)
----------------------------------------------------------------------------------------------------------------------------------
Gross profits 1,747,325 35,679 1,711,646
----------------------------------------------------------------------------------------------------------------------------------
Net interest income 1,058,810 (49,224) 1,108,034
----------------------------------------------------------------------------------------------------------------------------------
Trust fees 101,442 (21,337) 122,779
----------------------------------------------------------------------------------------------------------------------------------
Credit costs for trust accounts (1) (8,136) 11,183 (19,319)
----------------------------------------------------------------------------------------------------------------------------------
Net fees and commissions 354,717 16,319 338,398
----------------------------------------------------------------------------------------------------------------------------------
Net trading profits 79,907 25,319 54,588
----------------------------------------------------------------------------------------------------------------------------------
Net other business income 152,447 64,602 87,845
----------------------------------------------------------------------------------------------------------------------------------
Net gains on debt securities 68,260 60,374 7,886
----------------------------------------------------------------------------------------------------------------------------------
General and administrative expenses 991,226 24,374 966,851
----------------------------------------------------------------------------------------------------------------------------------
Net business profits before credit costs for trust accounts 764,235 120 764,114
and provision for formula allowance for loan losses
----------------------------------------------------------------------------------------------------------------------------------
Provision for formula allowance for loan losses(2) 38,260 4,386 33,874
----------------------------------------------------------------------------------------------------------------------------------
Net business profits* 717,838 6,918 710,920
----------------------------------------------------------------------------------------------------------------------------------
Net non-recurring losses (1,078,100) (77,834) (1,000,266)
----------------------------------------------------------------------------------------------------------------------------------
Credit related costs (3) (492,380) 242,235 (721,245)
----------------------------------------------------------------------------------------------------------------------------------
Losses on loan charge-offs (211,059) 72,638 (283,697)
----------------------------------------------------------------------------------------------------------------------------------
Provision for specific allowance for loan losses (117,747) 228,399 (346,146)
----------------------------------------------------------------------------------------------------------------------------------
Losses on sales of loans to the Resolution and Collection Corporation (75,263) (69,100) (6,162)
----------------------------------------------------------------------------------------------------------------------------------
Other credit related costs (88,310) (3,072) (85,238)
----------------------------------------------------------------------------------------------------------------------------------
Net losses on equity securities (488,030) (263,179) (224,850)
----------------------------------------------------------------------------------------------------------------------------------
Gains on sales of equity securities 80,344 (56,508) 136,852
----------------------------------------------------------------------------------------------------------------------------------
Losses on sales of equity securities (219,654) (2,619) (217,034)
----------------------------------------------------------------------------------------------------------------------------------
Losses on write down of equity securities (348,719) (204,050) (144,668)
----------------------------------------------------------------------------------------------------------------------------------
Equity in loss of affiliates (3,532) 7,079 (10,612)
----------------------------------------------------------------------------------------------------------------------------------
Other (94,157) (62,970) (43,557)
----------------------------------------------------------------------------------------------------------------------------------
Ordinary loss (360,262) (70,916) (289,345)
----------------------------------------------------------------------------------------------------------------------------------
Net special gains (losses) 19,520 27,258 (7,738)
----------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes and others (340,742) (43,657) (297,084)
----------------------------------------------------------------------------------------------------------------------------------
Income taxes-current 55,919 21,101 34,818
----------------------------------------------------------------------------------------------------------------------------------
Income taxes-deferred (237,065) (38,753) (198,311)
----------------------------------------------------------------------------------------------------------------------------------
Minority interest 1,898 (16,826) 18,725
----------------------------------------------------------------------------------------------------------------------------------
Net loss (161,495) (9,179) (152,316)
----------------------------------------------------------------------------------------------------------------------------------
Note:
* Net business profits = The 2 Banks' non-consolidated net business profits +
Other consolidated entities' gross profits - Other consolidated entities'
general and administrative expenses - Other consolidated entities'
provision for formula allowance for loan losses - Intercompany transactions
(Reference)
----------------------------------------------------------------------------------------------------------------------------------
Total credit costs (1)+(2)+(3) 538,777 (235,661) 774,439
----------------------------------------------------------------------------------------------------------------------------------
Number of consolidated subsidiaries 184 (2) 186
----------------------------------------------------------------------------------------------------------------------------------
Number of affiliated companies accounted for by the equity method 31 (6) 37
----------------------------------------------------------------------------------------------------------------------------------
-1-
Mitsubishi Tokyo Financial Group, Inc.
2. Valuation Differences on Securities
(1) Valuation method of securities
-----------------------------------------------------------------------------------------------------------------------------------
Trading securities Market value (valuation differences are recorded as profits or loses)
-----------------------------------------------------------------------------------------------------------------------------------
Debt securities being held to maturity Amortized cost
-----------------------------------------------------------------------------------------------------------------------------------
Securities available for sale Market value (valuation differences are included in shareholders' equity, net of
income taxes)
-----------------------------------------------------------------------------------------------------------------------------------
(Reference) Securities in money held in trust
-----------------------------------------------------------------------------------------------------------------------------------
Trading purposes Market value (valuation differences are recorded as profits or loses)
-----------------------------------------------------------------------------------------------------------------------------------
Being held to maturity Amortized cost
-----------------------------------------------------------------------------------------------------------------------------------
Other Market value (valuation differences are included in shareholders' equity, net of
income taxes)
-----------------------------------------------------------------------------------------------------------------------------------
(2) Valuation differences
(in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003 As of March 31, 2002
-------------------------------------------------------------------------------------------------
Valuation differences Valuation differences
---------------------- ----------------------
Gains Losses Gains Losses
---------------
(A) (A) - (B) (B)
-----------------------------------------------------------------------------------------------------------------------------------
Debt securities being held
to maturity 15,960 2,432 15,961 1 13,527 13,799 271
-----------------------------------------------------------------------------------------------------------------------------------
Securities available for sale (242,635) (381,477) 506,454 749,089 138,842 743,925 605,083
---------------------------------------------------------------------------------------------------------------------------------
Domestic equity securities (427,244) (498,699) 191,051 618,296 71,454 551,983 480,528
---------------------------------------------------------------------------------------------------------------------------------
Domestic bonds 121,870 42,168 124,182 2,311 79,702 83,691 3,989
---------------------------------------------------------------------------------------------------------------------------------
Other 62,738 75,053 191,220 128,481 (12,314) 108,250 120,565
----------------------------------------------------------------------------------------------------------------------------------
Total (226,675) (379,045) 522,415 749,090 152,370 757,725 605,355
---------------------------------------------------------------------------------------------------------------------------------
Domestic equity securities (427,244) (498,699) 191,051 618,296 71,454 551,983 480,528
---------------------------------------------------------------------------------------------------------------------------------
Domestic bonds 133,297 44,723 135,609 2,311 88,574 92,647 4,072
---------------------------------------------------------------------------------------------------------------------------------
Other 67,271 74,931 195,755 128,483 (7,659) 113,093 120,753
----------------------------------------------------------------------------------------------------------------------------------
(3) Market Value Information for Securities in Trusts with Contracts for
Compensating the Principal
Money Trusts (jointly operated designated money in trust)
A. Market Value of Securities (in millions of yen)
---------------------------------------------------------------------------------------------
Trust Assets at period end Market Value Valuation Gains
---------------------------------------------------------------------------------------------
March 31, 2003 232,328 238,931 6,602
---------------------------------------------------------------------------------------------
Note : A fair value is given where a fair value can be calculated for
a market-value equivalent.
B. Valuation Gains of Derivative Transaction : 1,637 millions of yen
Loan Trusts
A. Market Value of Securities (in millions of yen)
------------------------------------------------------------------------------------------
Trust Assets at period end Market Value Valuation Gains
------------------------------------------------------------------------------------------
March 31, 2003 201,780 226,131 24,350
------------------------------------------------------------------------------------------
Note : A fair value is given where a fair value can be calculated for
a market-value equivalent.
B. Valuation Gains of Derivative Transaction : 12,648 millions of yen
-2-
Mitsubishi Tokyo Financial Group, Inc.
3. Risk-Adjusted Capital Ratio Based on the Standards of the BIS
(in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
(Preliminary basis)
-----------------------------------------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital ratio 10.84% 0.53% 0.34% 10.30% 10.49%
(2) Tier I capital 3,128.6 (52.4) 75.5 3,181.1 3,053.1
(3) Tier II capital includable as
qualifying capital 2,847.6 (297.7) (95.2) 3,145.3 2,942.8
i) The amount of unrealized gains on investment
securities, includable as qualifying capital - (61.2) - 61.2 -
ii) The amount of land revaluation excess
includable as qualifying capital 147.3 1.0 3.2 146.2 144.0
iii) Subordinated debt 2,012.1 (281.8) (98.0) 2,294.0 2,110.2
(4) Tier III capital includable as
qualifying capital 30.0 30.0 0.2 - 29.8
(5) Deductions from total qualifying
capital 37.9 (68.0) 14.1 105.9 23.7
(6) Total qualifying capital (2)+(3)+(4)-(5) 5,968.4 (252.1) (33.6) 6,220.5 6,002.0
(7) Risk-adjusted assets 55,049.6 (5,286.2) (2,140.6) 60,335.8 57,190.3
-----------------------------------------------------------------------------------------------------------------------------------
4. Return on Equity
(%)
--------------------------------------------------------------------------------
For the year ended Increase/ For the year ended
March 31, (Decrease) March 31,
2003 (A) (A)- (B) 2002 (B)
--------------------------------------------------------------------------------
ROE * (5.97) (0.43) (5.54)
--------------------------------------------------------------------------------
Note: * ROE is computed as follows:
(Net income - Dividends on preferred stocks)
-------------------------------------------------------------------------- x 100
{(Shareholders' equity at beginning of period - Number of preferred stocks
at beginning of period x Issue price - Land revaluation excess at beginning
of period - Unrealized gains on securities available for sale at beginning
of period)
+ (Shareholders' equity at end of period - Number of preferred stocks at
end of period x Issue price - Land revaluation excess at end of period -
Unrealized gains on securities available for sale at end of period)} / 2
-3-
Mitsubishi Tokyo Financial Group, Inc.
2 Loan Portfolio and Other
1. Risk-Monitored Loans
(Nonaccrual loans, accruing loans contractually past due 3 months or more
and restructured loans)
[Consolidated]
(in millions of yen)
---------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-----------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 96,530 (51,425) (14,430) 147,955 110,961
-----------------------------------------------------------------------------------------------------------------
Past due loans 1,208,106 (789,404) (341,496) 1,997,510 1,549,602
-----------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 20,399 (2,640) 6,429 23,039 13,970
-----------------------------------------------------------------------------------------------------------------
Restructured loans 1,244,431 (633,680) (556,158) 1,878,111 1,800,590
-----------------------------------------------------------------------------------------------------------------
Total 2,569,468 (1,477,150) (905,656) 4,046,618 3,475,124
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 46,950,363 (2,112,431) (11,449) 49,062,795 46,961,813
-------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
-----------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.20% (0.09)% (0.03)% 0.30% 0.23%
-----------------------------------------------------------------------------------------------------------------
Past due loans 2.57% (1.49)% (0.72)% 4.07% 3.29%
-----------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 0.04% (0.00)% 0.01% 0.04% 0.02%
-----------------------------------------------------------------------------------------------------------------
Restructured loans 2.65% (1.17)% (1.18)% 3.82% 3.83%
-----------------------------------------------------------------------------------------------------------------
Total 5.47% (2.77)% (1.92)% 8.24% 7.39%
-----------------------------------------------------------------------------------------------------------------
[Trust accounts]
(in millions of yen)
---------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-----------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 4,369 (4,049) (5,759) 8,419 10,129
-----------------------------------------------------------------------------------------------------------------
Past due loans 2,220 (9,745) (4,224) 12,016 6,445
-----------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 919 (180) (122) 1,100 1,041
-----------------------------------------------------------------------------------------------------------------
Restructured loans 33,655 (10,582) (7,378) 44,237 41,033
-----------------------------------------------------------------------------------------------------------------
Total 41,165 (24,607) (17,485) 65,773 58,650
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 883,501 (240,168) (85,366) 1,123,669 968,867
-------------------------------------------------------------------------------------------------------------------
[Consolidated and Trust accounts]
(in millions of yen)
---------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-----------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 100,899 (55,475) (20,190) 156,374 121,090
-----------------------------------------------------------------------------------------------------------------
Past due loans 1,210,327 (799,199) (345,721) 2,009,526 1,556,048
-----------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 21,319 (2,820) 6,306 24,139 15,012
-----------------------------------------------------------------------------------------------------------------
Restructured loans 1,278,087 (644,262) (563,536) 1,922,349 1,841,623
-----------------------------------------------------------------------------------------------------------------
Total 2,610,633 (1,501,758) (923,141) 4,112,391 3,533,775
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 47,833,865 (2,352,600) (96,815) 50,186,465 47,930,681
-------------------------------------------------------------------------------------------------------------------
-4-
Mitsubishi Tokyo Financial Group, Inc.
Classification of risk-monitored Loans
Classification by geographic area
[Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic* 2,163,416 (1,540,573) (950,020) 3,703,990 3,113,436
------------------------------------------------------------------------------------------------------------------------------------
Overseas* 406,051 63,423 44,364 342,628 361,687
------------------------------------------------------------------------------------------------------------------------------
Asia 66,666 (59,886) (16,894) 126,553 83,561
--------------------------------------------------------------------------------------------------------------------------
Indonesia 14,348 (27,181) (17,218) 41,530 31,566
Thailand 13,595 (26,869) (16,021) 40,465 29,616
Hong Kong 16,539 5,049 13,957 11,490 2,581
Other 22,183 (10,883) 2,387 33,067 19,796
------------------------------------------------------------------------------------------------------------------------------
United States of America 212,778 61,323 60,765 151,454 152,012
Other 126,606 61,987 493 64,619 126,113
------------------------------------------------------------------------------------------------------------------------------------
Total 2,569,468 (1,477,150) (905,656) 4,046,618 3,475,124
------------------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
[Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic 41,165 (24,607) (17,485) 65,773 58,650
------------------------------------------------------------------------------------------------------------------------------------
Classification by type of industry of borrowers
[Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic* 2,163,416 (1,540,573) (950,020) 3,703,990 3,113,436
------------------------------------------------------------------------------------------------------------------------------
Manufacturing 303,932 (142,579) (111,041) 446,511 414,974
Construction 257,374 (136,846) (88,440) 394,220 345,815
Wholesale and Retail 475,371 (183,289) (148,344) 658,660 623,715
Banks and other financial institutions 24,942 (68,850) (57,869) 93,792 82,811
Real estate 515,712 (745,396) (394,774) 1,261,108 910,487
Services 249,824 (196,333) (122,894) 446,157 372,719
Other industries 103,079 (24,572) (6,885) 127,651 109,964
Consumer 233,178 (42,706) (19,770) 275,885 252,949
------------------------------------------------------------------------------------------------------------------------------------
Overseas* 406,051 63,423 44,364 342,628 361,687
------------------------------------------------------------------------------------------------------------------------------
Banks and other financial institutions 6,122 (19,537) (2,932) 25,660 9,055
Commercial and industrial 379,238 72,808 77,853 306,429 301,384
Other 20,691 10,152 (30,556) 10,538 51,248
------------------------------------------------------------------------------------------------------------------------------------
Total 2,569,468 (1,477,150) (905,656) 4,046,618 3,475,124
------------------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
[Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic 41,165 (24,607) (17,485) 65,773 58,650
------------------------------------------------------------------------------------------------------------------------------
Manufacturing 4,005 (2,875) (5,421) 6,880 9,426
Construction 1,717 (1,380) (1,281) 3,098 2,999
Wholesale and Retail 2,500 (3,925) (1,414) 6,425 3,914
Banks and other financial institutions -- (25) -- 25 --
Real estate 6,619 (7,264) (4,083) 13,884 10,703
Services 1,733 (9,941) (7,224) 11,675 8,958
Other industries 18,210 2,586 2,693 15,623 15,516
Consumer 6,377 (1,781) (753) 8,159 7,131
------------------------------------------------------------------------------------------------------------------------------------
Total 41,165 (24,607) (17,485) 65,773 58,650
------------------------------------------------------------------------------------------------------------------------------------
-5-
Mitsubishi Tokyo Financial Group, Inc.
2. Allowance for Loan Losses
[Consolidated] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 1,297,292 (362,348) (200,984) 1,659,640 1,498,277
----------------------------------------------------------------------------------------------------------------------------
Formula allowance for loan losses 806,015 31,464 (36,157) 774,550 842,172
----------------------------------------------------------------------------------------------------------------------------
Specific allowance for loan losses 477,898 (379,588) (163,356) 857,487 641,255
----------------------------------------------------------------------------------------------------------------------------
Allowance for loans to specific foreign borrowers 13,378 (14,224) (1,471) 27,602 14,849
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Reserve for losses on real estate-
collateralized loans sold -- (7,575) (2,039) 7,575 2,039
--------------------------------------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Special internal reserves 8,425 (4,678) (2,725) 13,104 11,151
--------------------------------------------------------------------------------------------------------------------------------
Allowance for bad debts 1,002 109 (86) 893 1,089
--------------------------------------------------------------------------------------------------------------------------------
3. Coverage Ratio against Risk-Monitored Loans
[Consolidated] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (I) 1,297,292 (362,348) (200,984) 1,659,640 1,498,277
Risk-monitored loans (II) 2,569,468 (1,477,150) (905,656) 4,046,618 3,475,124
Coverage ratio (I)/(II) 50.48% 9.47% 7.37% 41.01% 43.11%
--------------------------------------------------------------------------------------------------------------------------------
-6-
Mitsubishi Tokyo Financial Group, Inc.
4. Disclosed Claims under the Financial Reconstruction Law (the "FRL")
[Banking and Trust accounts: Total of the 2 Banks] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 226,457 (192,623) (175,655) 419,080 402,112
--------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 1,031,373 (902,187) (355,283) 1,933,561 1,386,657
--------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 1,357,445 (559,393) (528,841) 1,916,838 1,886,287
--------------------------------------------------------------------------------------------------------------------------------
Total (1) 2,615,276 (1,654,204) (1,059,780) 4,269,481 3,675,056
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Normal claims 46,335,943 (1,795,990) 104,030 48,131,933 46,231,912
--------------------------------------------------------------------------------------------------------------------------------
5. Status of Secured Coverage on Disclosed Claims under the FRL
[Banking and Trust accounts: Total of the 2 Banks] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Secured coverage amount (2) 1,971,278 (1,270,775) (830,180) 3,242,054 2,801,459
------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 671,843 (387,397) (205,935) 1,059,240 877,778
------------------------------------------------------------------------------------------------------------------------------
Reserve for financial support to specific borrowers 531 93 281 437 250
------------------------------------------------------------------------------------------------------------------------------
Collateral, guarantees, etc. 1,298,903 (883,472) (624,526) 2,182,375 1,923,429
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 75.37% (0.56)% (0.85)% 75.93% 76.22%
--------------------------------------------------------------------------------------------------------------------------------
Secured Coverage of Each Category of Disclosed Claims under the FRL
[Banking and Trust accounts: Total of the 2 Banks] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
financial amount by
support to collateralized Coverage ratio Coverage ratio
Disclosed Allowance for specific and guaranteed [(B)+(C)] / [(B)+(C)+(D)] /
Category amount (A) loan Losses(B) borrowers (C) loans (D) [(A)-(D)] (A)
--------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 226,457 19,961 - 206,495 100.00% 100.00%
[419,080] [66,821] - [352,254] [99.99%] [99.99%]
--------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 1,031,373 386,331 - 467,567 68.52% 82.79%
[1,933,561] [723,307] [437] [860,703] [67.45%] [81.94%]
--------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 1,357,445 265,549 531 624,840 36.31% 65.63%
[1,916,838] [269,112] - [969,417] [28.40%] [64.61%]
--------------------------------------------------------------------------------------------------------------------------------
Sub total (1) 2,615,276 671,843 531 1,298,903 51.07% 75.37%
[4,269,481] [1,059,240] [437] [2,182,375] [50.77%] [75.93%]
--------------------------------------------------------------------------------------------------------------------------------
Normal claims 46,335,943
[48,131,933]
--------------------------------------------------------------------------------------------------------------------------------
Total (2) 48,951,219
[52,401,415]
--------------------------------------------------------------------------------------------------------------------------------
Sub total (1)/Total (2) 5.34%
[8.14%]
--------------------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2003. The lower figures with
bracket are as of March 31, 2002.
-7-
Mitsubishi Tokyo Financial Group, Inc.
6. Progress in the Disposal of Problem Assets [Banking and Trust accounts:
Total of the 2 Banks] (excluding claims under close observation)
(1) Assets categorized as problem assets as of September 30, 2000 based on the FRL (in billions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of
----------
September 30, March 31, September 30, March 31, September 30, March 31, (b) - (a)
2000 2001 2001 2002 2002 (a) 2003 (b)
--------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 513.6 280.6 274.1 213.9 253.7 68.7 (184.9)
--------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 1,580.2 1,400.4 1,141.3 840.1 378.5 37.4 (341.0)
--------------------------------------------------------------------------------------------------------------------------------
Total 2,093.8 1,681.0 1,415.4 1,054.1 632.2 106.2 (526.0)
--------------------------------------------------------------------------------------------------------------------------------
(A) (B)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Disposition by borrowers' liquidation 142.7
------------------------------------------------------------------
Re-constructive disposition 15.7
------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition 0.8
------------------------------------------------------------------
Loan sales to secondary market 121.4
------------------------------------------------------------------
Charge-off 42.2
------------------------------------------------------------------
Other 202.9
------------------------------------------------------------------
Collection of claims 51.3
-------------------------------------------------------------
Improvements in financial status 151.5
------------------------------------------------------------------
Total 526.0 (B)
------------------------------------------------------------------
Above (A) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Legal liquidation 33.0
------------------------------------------------------------------
Quasi-legal liquidation 0.6
------------------------------------------------------------------
Split-off of problem loans 11.5
------------------------------------------------------------------
Partial charge-off of smaller balance loans 10.3
------------------------------------------------------------------
Entrust through the managed trust method to
the Resolution and Collection Corporation 22.9
------------------------------------------------------------------
Total 78.5
------------------------------------------------------------------
(2) Assets newly categorized as problem assets during second half of fiscal 2000 based on the FRL (in billions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of
------------
March 31, September 30, March 31, September 30, March 31, (b) - (a)
2001 2001 2002 2002 (a) 2003 (b)
--------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 117.9 103.8 99.2 46.9 34.8 (12.1)
--------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 769.0 693.0 538.9 346.0 134.6 (211.4)
--------------------------------------------------------------------------------------------------------------------------------
Total 887.0 796.8 638.1 393.0 169.5 (223.5)
--------------------------------------------------------------------------------------------------------------------------------
(C) (D)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Disposition by borrowers' liquidation 10.5
------------------------------------------------------------------
Re-constructive disposition 6.4
------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition 9.1
------------------------------------------------------------------
Loan sales to secondary market 46.1
------------------------------------------------------------------
Charge-off 88.1
------------------------------------------------------------------
Other 63.0
------------------------------------------------------------------
Collection of claims 48.8
-------------------------------------------------------------
Improvements in financial status 14.1
------------------------------------------------------------------
Total 223.5 (D)
------------------------------------------------------------------
Above (C) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Legal liquidation 4.5
------------------------------------------------------------------
Quasi-legal liquidation -
------------------------------------------------------------------
Split-off of problem loans -
------------------------------------------------------------------
Partial charge-off of smaller balance loans 7.3
------------------------------------------------------------------
Entrust through the managed trust method to
the Resolution and Collection Corporation -
------------------------------------------------------------------
Total 11.8
------------------------------------------------------------------
-8-
Mitsubishi Tokyo Financial Group, Inc.
(3) Assets newly categorized as problem assets during first half of fiscal 2001 based on the FRL (in billions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of
---------------
September 30, March 31, September 30, March 31, (b) - (a)
2001 2002 2002 (a) 2003 (b)
------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 30.2 42.1 27.9 17.0 (10.9)
------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 337.1 170.3 101.6 37.8 (63.8)
------------------------------------------------------------------------------------------------------------------------------
Total 367.3 212.5 129.6 54.8 (74.7)
------------------------------------------------------------------------------------------------------------------------------
(E) (F)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Disposition by borrowers' liquidation 0.7
------------------------------------------------------------------
Re-constructive disposition 11.0
------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition 4.5
------------------------------------------------------------------
Loan sales to secondary market 21.5
------------------------------------------------------------------
Charge-off 8.8
------------------------------------------------------------------
Other 27.8
------------------------------------------------------------------
Collection of claims 24.6
-------------------------------------------------------------
Improvements in financial status 3.2
------------------------------------------------------------------
Total 74.7 (F)
------------------------------------------------------------------
Above (E) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Legal liquidation 4.4
------------------------------------------------------------------
Quasi-legal liquidation -
------------------------------------------------------------------
Split-off of problem loans -
------------------------------------------------------------------
Partial charge-off of smaller balance loans 11.9
------------------------------------------------------------------
Entrust through the managed trust method to
the Resolution and Collection Corporation -
------------------------------------------------------------------
Total 16.4
------------------------------------------------------------------
(4) Assets newly categorized as problem assets during second half of fiscal 2001 based on the FRL
(in billions of yen)
---------------------------------------------------------------------------------------------------
As of As of As of
--------------
March 31, September 30, March 31, (b) - (a)
2002 2002 (a) 2003 (b)
---------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 63.6 44.4 20.6 (23.7)
---------------------------------------------------------------------------------------------------
Claims under high risk 384.0 190.9 103.6 (87.3)
---------------------------------------------------------------------------------------------------
Total 447.7 235.3 124.2 (111.0)
---------------------------------------------------------------------------------------------------
(G) (H)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Disposition by borrowers' liquidation 1.3
------------------------------------------------------------------
Re-constructive disposition 13.8
------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition -
------------------------------------------------------------------
Loan sales to secondary market 34.3
------------------------------------------------------------------
Charge-off 21.3
------------------------------------------------------------------
Other 40.1
------------------------------------------------------------------
Collection of claims 35.1
-------------------------------------------------------------
Improvements in financial status 4.9
------------------------------------------------------------------
Total 111.0 (H)
------------------------------------------------------------------
Above (G) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Legal liquidation 4.2
------------------------------------------------------------------
Quasi-legal liquidation -
------------------------------------------------------------------
Split-off of problem loans -
------------------------------------------------------------------
Partial charge-off of smaller balance loans 11.0
------------------------------------------------------------------
Entrust through the managed trust method to
the Resolution and Collection Corporation -
------------------------------------------------------------------
Total 15.3
------------------------------------------------------------------
-9-
Mitsubishi Tokyo Financial Group, Inc.
(5) Assets newly categorized as problem assets during first half of fiscal 2002
based on the FRL
(in billions of yen)
-----------------------------------------------------------------------------------------
As of As of
---------------
September 30, March 31, (b) - (a)
2002 (a) 2003 (b)
-----------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 28.9 34.5 5.5
-----------------------------------------------------------------------------------------
Claims under high risk 369.4 160.2 (209.2)
-----------------------------------------------------------------------------------------
Total 398.4 194.7 (203.7)
-----------------------------------------------------------------------------------------
(I) (J)
Progress in the disposal of problem assets (in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Disposition by borrowers' liquidation 4.4
------------------------------------------------------------------
Re-constructive disposition 13.4
------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition 9.7
------------------------------------------------------------------
Loan sales to secondary market 42.4
------------------------------------------------------------------
Charge-off 19.2
------------------------------------------------------------------
Other 114.4
------------------------------------------------------------------
Collection of claims 101.3
-------------------------------------------------------------
Improvements in financial status 13.0
------------------------------------------------------------------
Total 203.7 (J)
------------------------------------------------------------------
Above (I) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------
Legal liquidation 24.9
------------------------------------------------------------------
Quasi-legal liquidation -
------------------------------------------------------------------
Split-off of problem loans -
------------------------------------------------------------------
Partial charge-off of smaller balance loans 7.8
------------------------------------------------------------------
Entrust through the managed trust method to
the Resolution and Collection Corporation -
------------------------------------------------------------------
Total 32.7
------------------------------------------------------------------
(6) Assets newly categorized as problem assets during second half of fiscal 2002
based on the FRL
(in billions of yen)
------------------------------------------------------------------
As of March 31, 2003
------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 50.5
------------------------------------------------------------------
Claims under high risk 557.6
------------------------------------------------------------------
Total 608.1
------------------------------------------------------------------
Histrical trend of problem assets based on the FRL (in billions of yen)
-------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of
---------
September 30, March 31, September 30, March 31, September 30, March 31, (b) - (a)
2000 2001 2001 2002 2002 (a) 2003 (b)
-------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 513.6 398.6 408.1 419.0 402.1 226.4 (175.6)
-------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 1,580.2 2,169.4 2,171.4 1,933.5 1,386.6 1,031.3 (355.2)
-------------------------------------------------------------------------------------------------------------------------------
Total 2,093.8 2,568.0 2,579.6 2,352.6 1,788.7 1,257.8 (530.9)
-------------------------------------------------------------------------------------------------------------------------------
-10-
Mitsubishi Toyko Financial Group, Inc.
7. Classification of Loans by Type of Industry
(1) Loans by type of industry [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans booked
at offshore markets) 37,416,133 (665,900) 254,558 38,082,034 37,161,574
-----------------------------------------------------------------------------------------------------------------------------------
Manufacturing 5,472,979 (362,420) (205,323) 5,835,399 5,678,302
Agriculture 15,568 (3,022) (990) 18,590 16,558
Forestry 5,425 (330) 41 5,755 5,384
Fishery 25,293 9,869 5,798 15,424 19,495
Mining 39,493 (8,903) (1,650) 48,396 41,143
Construction 1,228,250 (242,446) (115,503) 1,470,696 1,343,753
Utilities 417,297 29,326 44,336 387,971 372,961
Media and Communication 1,496,867 (340,500) (481,541) 1,837,367 1,978,408
Wholesale and Retail 5,091,325 (527,536) (394,076) 5,618,861 5,485,401
Banks and other financial institutions 3,851,579 (334,040) (362,216) 4,185,619 4,213,795
Real estate 4,464,195 (485,262) (189,092) 4,949,457 4,653,287
Services 4,781,695 234,944 454,997 4,546,751 4,326,698
Municipal government 376,513 121,155 84,175 255,358 292,338
Other industries 10,149,646 1,243,264 1,415,600 8,906,381 8,734,045
------------------------------------------------------------------------------------------------------------------------------------
Overseas offices and loans booked at
offshore markets 5,570,426 (1,009,393) (223,921) 6,579,819 5,794,347
------------------------------------------------------------------------------------------------------------------------------------
Total 42,986,559 (1,675,294) 30,637 44,661,854 42,955,922
------------------------------------------------------------------------------------------------------------------------------------
(2) Domestic consumer loans [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 7,464,720 485,123 211,300 6,979,596 7,253,420
--------------------------------------------------------------------------------------------------------------------------------
Housing loans 6,941,192 565,187 243,559 6,376,005 6,697,632
--------------------------------------------------------------------------------------------------------------------------------
Others 523,527 (80,063) (32,259) 603,591 555,787
------------------------------------------------------------------------------------------------------------------------------------
(3) Domestic loans to small and medium-sized companies [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized companies 19,920,352 (1,721,314) (965,336) 21,641,666 20,885,689
------------------------------------------------------------------------------------------------------------------------------------
Percentage to total domestic loans 53.24% (3.58)% (2.96)% 56.82% 56.20%
------------------------------------------------------------------------------------------------------------------------------------
-11-
Mitsubishi Toyko Financial Group, Inc.
(4) Loans by type of industry [Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans
booked at offshore markets) 1,107,555 (275,882) (71,418) 1,383,437 1,178,974
--------------------------------------------------------------------------------------------------------------------------------
Manufacturing 76,795 (26,700) (2,681) 103,495 79,476
Agriculture - - - - -
Forestry 30 (7) (3) 37 33
Fishery 1,572 230 615 1,342 957
Mining 129 (192) (94) 321 223
Construction 7,872 (10,062) (3,965) 17,934 11,837
Utilities 135,204 (42,325) (17,029) 177,529 152,233
Media and Communication 124,560 (47,833) (35,524) 172,393 160,084
Wholesale and Retail 17,190 (7,959) 1,921 25,149 15,269
Banks and other financial institutions 197,722 135,747 48,835 61,975 148,887
Real estate 77,800 (33,979) (11,361) 111,779 89,161
Services 52,767 (32,308) (15,228) 85,075 67,995
Municipal government 37,773 (3,571) (2,680) 41,344 40,453
Other industries 378,134 (206,922) (34,225) 585,056 412,359
-----------------------------------------------------------------------------------------------------------------------------------
Overseas offices and loans booked
at offshore markets - - - - -
-----------------------------------------------------------------------------------------------------------------------------------
Total 1,107,555 (275,882) (71,418) 1,383,437 1,178,974
------------------------------------------------------------------------------------------------------------------------------------
(5) Domestic consumer loans [Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 268,405 (48,207) (22,957) 316,612 291,362
----------------------------------------------------------------------------------------------------------------------------------
Housing loans 265,050 (47,171) (22,474) 312,222 287,524
----------------------------------------------------------------------------------------------------------------------------------
Others 3,354 (1,035) (482) 4,390 3,837
------------------------------------------------------------------------------------------------------------------------------------
(6) Domestic loans to small and medium-sized companies [Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized companies 666,401 (117,204) (3,601) 783,605 670,002
------------------------------------------------------------------------------------------------------------------------------------
Percentage to total domestic loans 60.16% 3.52% 3.33% 56.64% 56.82%
------------------------------------------------------------------------------------------------------------------------------------
-12-
Mitsubishi Toyko Financial Group, Inc.
8. Foreign Loans
(1) Loans to specific foreign borrowers [Total of the 2 Banks] (in millions of yen except number of countries)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Loan to specific foreign borrowers 58,241 (73,803) (17,746) 132,045 75,987
------------------------------------------------------------------------------------------------------------------------------------
Number of countries 10 (1) - 11 10
------------------------------------------------------------------------------------------------------------------------------------
(2) Loans to Asian countries [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Thailand 213,245 (65,347) (33,580) 278,592 246,826
Indonesia 120,649 (63,181) (24,892) 183,830 145,541
Malaysia 99,975 (20,493) (11,627) 120,469 111,603
Philippines 62,195 (13,980) (3,801) 76,176 65,997
South Korea 158,900 66,375 51,531 92,524 107,368
Singapore 243,173 (71,817) (29,840) 314,991 273,014
Hong Kong 417,910 (49,108) 25,344 467,018 392,566
China 215,024 (31,304) (6,715) 246,329 221,739
Taiwan 39,491 2,945 3,333 36,545 36,157
Others 44,611 (28,616) (10,068) 73,227 54,679
------------------------------------------------------------------------------------------------------------------------------------
Total 1,615,177 (274,527) (40,316) 1,889,705 1,655,494
------------------------------------------------------------------------------------------------------------------------------------
(3) Loans to Latin American countries [Total of the 2 Banks] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Argentina 37,271 (47,293) (28,852) 84,564 66,123
Brazil 72,557 (12,914) (12,019) 85,472 84,577
Mexico 103,249 (5,558) (5,721) 108,808 108,970
Caribbean countries 381,575 (83,261) (44,793) 464,836 426,368
Others 126,246 (25,612) 9,495 151,858 116,750
------------------------------------------------------------------------------------------------------------------------------------
Total 720,900 (174,640) (81,890) 895,540 802,790
------------------------------------------------------------------------------------------------------------------------------------
-13-
Mitsubishi Tokyo Financial Group, Inc.
9. Loans and Deposits [Total of the 2 Banks]
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Deposits (ending balance) 58,970,786 2,353,101 2,088,709 56,617,684 56,882,076
------------------------------------------------------------------------------------------------------------------------------------
Deposits (average balance) 57,427,383 3,260,502 809,189 54,166,881 56,618,194
------------------------------------------------------------------------------------------------------------------------------------
Loans (ending balance) 42,986,559 (1,675,294) 30,637 44,661,854 42,955,922
------------------------------------------------------------------------------------------------------------------------------------
Loans (average balance) 43,677,521 245,484 290,905 43,432,037 43,386,616
------------------------------------------------------------------------------------------------------------------------------------
10. Domestic Deposits [Total of the 2 Banks]
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Individuals 32,164,441 2,654,552 1,275,997 29,509,889 30,888,443
------------------------------------------------------------------------------------------------------------------------------------
Corporations and others 19,903,820 578,541 763,960 19,325,278 19,139,860
------------------------------------------------------------------------------------------------------------------------------------
Domestic deposits 52,068,261 3,233,094 2,039,957 48,835,167 50,028,304
------------------------------------------------------------------------------------------------------------------------------------
Note: Amounts do not include negotiable certificates of deposit, deposits of
overseas offices and JOM accounts.
11. Number of Employees [Total of the 2 Banks]
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Number of employees 21,367 (894) (936) 22,261 22,303
------------------------------------------------------------------------------------------------------------------------------------
12. Number of Offices [Total of the 2 Banks]
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic: 335 (16) (7) 351 342
------------------------------------------------------------------------------------------------------------------------------
Head office and Branches 309 (12) (5) 321 314
Sub-branches & Agencies 26 (4) (2) 30 28
------------------------------------------------------------------------------------------------------------------------------------
Overseas: 80 (3) (3) 83 83
------------------------------------------------------------------------------------------------------------------------------
Branches 47 (2) (2) 49 49
Sub-branches 13 (1) (1) 14 14
Representative offices 20 - - 20 20
------------------------------------------------------------------------------------------------------------------------------------
Total 415 (19) (10) 434 425
------------------------------------------------------------------------------------------------------------------------------------
-14-
Mitsubishi Tokyo Financial Group, Inc.
13. Employees' Retirement Benefits
(1) Benefit obligation
(in millions of yen)
------------------------------------------------------------------------------------------------------
As of
March 31, 2003
------------------------------------------------------------------------------------------------------
Projected benefits obligation (A) 1,206,507
Discount rate:
Domestic subsidiaries 1.1%~1.9%, Overseas subsidiaries 5.5%~7.25%
----------------------------------------------------------------------------------------------------
Fair value of plan assets (B) 781,429
----------------------------------------------------------------------------------------------------
Prepaid pension cost (C) 90,700
----------------------------------------------------------------------------------------------------
Reserve for employees' retirement benefits (D) 36,976
----------------------------------------------------------------------------------------------------
Total amount unrecognized (A-B+C-D) 478,802
-------------------------------------------------------------------------------------------------
Unrecognized net obligation at transition 36,323
-------------------------------------------------------------------------------------------------
Unrecognized prior service cost (50,179)
-------------------------------------------------------------------------------------------------
Unrecognized net actuarial loss 492,658
------------------------------------------------------------------------------------------------------
Note: Discount rate of The Bank of Tokyo-Mitsubishi, Ltd. and The Mitsubishi
Trust and Banking Corporation is 1.9%.
(2) Net periodic pension cost
(in millions of yen)
------------------------------------------------------------------------------------------------------
For the year ended
March 31, 2003
------------------------------------------------------------------------------------------------------
Net periodic cost of the employees' retirement benefits 83,779
------------------------------------------------------------------------------------------------------
Service cost 30,433
----------------------------------------------------------------------------------------------------
Interest cost 30,413
----------------------------------------------------------------------------------------------------
Expected return on plan assets (33,002)
----------------------------------------------------------------------------------------------------
Amortization of net obligation at transition 18,154
----------------------------------------------------------------------------------------------------
Amortization of prior service cost (2,808)
----------------------------------------------------------------------------------------------------
Amortization of net actuarial loss 26,544
----------------------------------------------------------------------------------------------------
Other 14,046
------------------------------------------------------------------------------------------------------
-15-
Mitsubishi Tokyo Financial Group, Inc.
14. Earning Projections for the Fiscal Year Ending March 31, 2004
[Consolidated] (in billions of yen)
-------------------------------------------------------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2004 March 31, 2003
-------------------------------------------------------------------------------------------------------------------------
Ordinary income 2,880.0 2,772.5
(First half 1,395.0) (First half 1,425.4)
-------------------------------------------------------------------------------------------------------------------------
Ordinary Profit (loss) 370.0 (360.2)
(First half 150.0) (First half (193.3))
-------------------------------------------------------------------------------------------------------------------------
Net income (loss) 190.0 (161.4)
(First half 70.0) (First half (188.0))
-------------------------------------------------------------------------------------------------------------------------
[Non-consolidated] (in billions of yen)
-------------------------------------------------------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2004 March 31, 2003
-------------------------------------------------------------------------------------------------------------------------
Operating income 44.0 27.2
(First half 42.0) (First half 24.1)
-------------------------------------------------------------------------------------------------------------------------
Ordinary profit 40.0 22.4
(First half 40.0) (First half 22.3)
-------------------------------------------------------------------------------------------------------------------------
Net income 40.0 23.3
(First half 40.0) (First half 22.0)
-------------------------------------------------------------------------------------------------------------------------
-16-
MTFG
Selected Financial Information
under Japanese GAAP
For the Fiscal Year Ended March 31, 2003
The Bank of Tokyo-Mitsubishi, Ltd.
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
[Contents]
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended March 31, 2003
1. Consolidated Balance Sheets ........ 17
2. Consolidated Statements of Operations ........ 18
3. Consolidated Statement of Capital Surplus and Retained Earnings ........ 19
4. Notional principal or contract amount, market value and valuation gains (losses) on derivatives ........ 20
[Consolidated]
5. Financial Results [Consolidated], [Non-Consolidated] ........ 23
6. Average interest rate spread [Non-Consolidated] ........ 25
7. Valuation Differences on Securities [Consolidated] ........ 25
8. Risk-Adjusted Capital Ratio Based on the Standards of the BIS [Consolidated] ........ 26
2 Loan Portfolio and Other
1. Risk-Monitored Loans [Consolidated], [Non-Consolidated] ........ 27
2. Allowance for Loan Losses [Consolidated], [Non-Consolidated] ........ 29
3. Coverage Ratio against Risk-Monitored Loans [Consolidated], [Non-Consolidated] ........ 29
4. Disclosed Claims under the Financial Reconstruction Law (the "FRL") [Non-Consolidated] ........ 30
5. Status of Secured Coverage on Disclosed Claims under the FRL [Non-Consolidated] ........ 30
6. Progress in the Disposal of Problem Assets [Non-Consolidated] ........ 31
7. Classification of Loans by Type of Industry [Non-Consolidated] ........ 34
8. Loans and Deposits [Non-Consolidated] ........ 35
9. Domestic Deposits [Non-Consolidated] ........ 35
10. Number of Employees [Non-Consolidated] ........ 35
11. Number of Offices [Non-Consolidated] ........ 35
12. Earning Projections for the Fiscal Year Ending March 31, 2004 [Consolidated], [Non-Consolidated] ........ 36
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended
March 31, 2003
(Japanese GAAP)
1. Consolidated Balance Sheets
-------------------------------------------------------------------------------------------------------------------------
As of March 31, Increase/
2003 (A) 2002 (B) (Decrease)
(in millions of yen) (A) - (B)
-------------------------------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 7,366,450 6,046,692 1,319,757
Call loans and bills bought 678,407 1,532,567 (854,160)
Receivables under resale agreements 576,814 1,048,130 (471,316)
Receivables under securities borrowing transactions 1,561,391 - 1,561,391
Commercial paper and other debt purchased 484,195 451,737 32,457
Trading assets 5,276,242 4,929,662 346,580
Money held in trust 405,882 304,060 101,822
Investment securities 16,600,079 16,766,117 (166,038)
Allowance for losses on investment securities (2,067) (1,500) (566)
Loans and bills discounted 38,668,577 39,994,893 (1,326,316)
Foreign exchanges 594,767 546,574 48,192
Other assets 2,067,540 3,407,899 (1,340,358)
Premises and equipment 801,917 792,720 9,196
Deferred debenture discounts and other costs 9 158 (148)
Deferred tax assets 1,008,726 763,281 245,444
Customers' liabilities for acceptances and guarantees 4,518,715 5,394,983 (876,268)
Allowance for loan losses (1,016,265) (1,259,662) 243,397
-------------------------------------------------------------------------------------------------------------------------
Total assets 79,591,387 80,718,319 (1,126,932)
=========================================================================================================================
Liabilities:
Deposits 52,095,330 49,329,946 2,765,384
Negotiable certificates of deposit 2,625,077 1,955,432 669,644
Debentures 636,060 2,275,570 (1,639,510)
Call money and bills sold 3,013,869 3,610,489 (596,619)
Payables under repurchase agreements 2,828,308 3,050,219 (221,911)
Payables under securities lending transactions 1,996,214 - 1,996,214
Commercial paper 312,208 339,367 (27,159)
Trading liabilities 1,455,493 574,197 881,296
Borrowed money 1,303,831 1,617,957 (314,125)
Foreign exchanges 512,676 490,543 22,132
Short-term corporate bonds 10,000 - 10,000
Bonds and notes 3,188,379 3,053,783 134,595
Convertible bonds - 445,361 (445,361)
Bonds with warrants 50,528 - 50,528
Other liabilities 2,166,328 5,531,978 (3,365,650)
Reserve for employees' bonuses 12,531 10,186 2,344
Reserve for employees' retirement benefits 26,429 13,017 13,411
Reserve for losses on real estate-collateralized loans sold - 7,233 (7,233)
Reserve for expenses related to EXPO 2005 Japan 31 - 31
Reserves under special laws 799 436 363
Deferred tax liabilities 61,037 46,936 14,100
Deferred tax liabilities on land revaluation excess 133,453 128,249 5,203
Acceptances and guarantees 4,518,715 5,394,983 (876,268)
-------------------------------------------------------------------------------------------------------------------------
Total liabilities 76,947,306 77,875,894 (928,587)
-------------------------------------------------------------------------------------------------------------------------
Minority interest 330,812 201,655 129,157
-------------------------------------------------------------------------------------------------------------------------
Shareholder's equity:
Capital stock 871,973 785,969 86,003
Capital surplus 681,928 595,925 86,003
Retained earnings 858,177 1,026,305 (168,127)
Land revaluation excess 197,489 209,355 (11,866)
Unrealized gains (losses) on securities available for sale (227,826) 46,260 (274,087)
Foreign currency translation adjustments (68,474) (23,046) (45,428)
-------------------------------------------------------------------------------------------------------------------------
Total shareholder's equity 2,313,268 2,640,770 (327,501)
-------------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest
and shareholder's equity 79,591,387 80,718,319 (1,126,932)
=========================================================================================================================
-17-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
2. Consolidated Statements of Operations
------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2003 (A) 2002 (B) (A) - (B)
------------------------------------------------------------------------------------------------------------------------
Ordinary income:
Interest income: 1,347,905 1,828,671 (480,766)
Interest on loans and discounts 886,442 1,094,249 (207,806)
Interest and dividends on securities 216,381 262,104 (45,723)
Other interest income 245,082 472,318 (227,236)
Trust fees 18,515 22,064 (3,549)
Fees and commissions 377,440 351,306 26,134
Trading profits 76,654 57,319 19,334
Other business income 218,914 173,977 44,937
Other ordinary income 146,742 174,483 (27,740)
------------------------------------------------------------------------------------------------------------------------
Total ordinary income 2,186,174 2,607,823 (421,649)
------------------------------------------------------------------------------------------------------------------------
Ordinary expenses:
Interest expense: 491,872 908,214 (416,342)
Interest on deposits 183,936 376,580 (192,643)
Interest on debentures and amortization of debenture discounts 8,504 20,573 (12,069)
Other interest expense 299,431 511,060 (211,629)
Fees and commissions 66,074 56,934 9,140
Trading losses - 5,510 (5,510)
Other business expenses 72,104 68,469 3,635
General and administrative expenses 855,093 812,163 42,929
Other ordinary expenses 973,652 942,423 31,228
------------------------------------------------------------------------------------------------------------------------
Total ordinary expenses 2,458,796 2,793,717 (334,920)
------------------------------------------------------------------------------------------------------------------------
Ordinary loss (272,622) (185,893) (86,729)
------------------------------------------------------------------------------------------------------------------------
Special gains 39,919 153,987 (114,068)
Special losses 24,658 22,076 2,582
------------------------------------------------------------------------------------------------------------------------
Loss before income taxes and others (257,361) (53,981) (203,379)
------------------------------------------------------------------------------------------------------------------------
Income taxes-current 54,906 30,771 24,134
Income taxes-deferred (178,443) (147,344) (31,099)
Minority interest 4,293 18,681 (14,387)
------------------------------------------------------------------------------------------------------------------------
Net loss (138,117) 43,909 (182,027)
=========================================================================================================================
-18-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
3. Consolidated Statement of Capital Surplus and Retained Earnings
------------------------------------------------------------------------------------------------------
For the year ended
(in millions of yen) March 31, 2003
------------------------------------------------------------------------------------------------------
Balance of capital surplus at beginning of fiscal year 595,925
Increase: 86,003
Issuance of common stock due to capital increase 86,003
------------------------------------------------------------------------------------------------------
Balance of capital surplus at end of fiscal year 681,928
------------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 1,026,305
Increase: 7,021
Reduction in land revaluation excess 4,130
Change in ownership percentage to a consolidated subsidiary 2,648
due to stock reperchase by the subsidiary
Decrease in consolidated companies accounted for by the equity method 242
Decrease: (175,148)
Net loss (138,117)
Cash dividends (17,384)
Bonuses to directors of consolidated subsidiaries (3)
Change in ownership percentage to consolidated subsidiaries and (15,896)
a company accounted for by the equity method due to their merger
Increase in consolidated subsidiaries and companies accounted (3,746)
for by the equity method
------------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 858,177
======================================================================================================
Consolidated Statement of Retained Earnings
------------------------------------------------------------------------------------------------------
For the year ended
(in millions of yen) March 31, 2002
------------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 1,055,929
Increase: 3,134
Reduction in land revaluation excess 3,134
Decrease: (76,668)
Cash dividends (76,658)
Bonuses to directors of consolidated subsidiaries (10)
Net income 43,909
------------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 1,026,305
======================================================================================================
-19-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
4. Notional principal or contract amount, market value and valuation gains
(losses) on derivatives
a. Interest rate-related transactions
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains
or contract amount of over 1 year (losses)
-------------------------------------------------------------------------------------------------------------------------------
Exchange-traded
---------------------------------------------------------------------------------------------------------------------------
sell 4,979,785 235,364 (37,589) (37,589)
Futures -------------------------------------------------------------------------------------------------------------
buy 6,778,166 656,231 27,420 27,420
---------------------------------------------------------------------------------------------------------------------------
sell 16,690,400 - (17,299) (10,658)
Options -------------------------------------------------------------------------------------------------------------
buy 22,231,699 8,124 35,101 21,091
-------------------------------------------------------------------------------------------------------------------------------
Over-the-counter
---------------------------------------------------------------------------------------------------------------------------
sell 702,374 452 973 973
FRAs -------------------------------------------------------------------------------------------------------------
buy 799,281 42,336 (2,649) (2,649)
---------------------------------------------------------------------------------------------------------------------------
receive-fix/pay-floater 103,210,682 79,667,570 3,953,096 3,953,096
-------------------------------------------------------------------------------------------------------------
receive-floater/pay-fix 102,240,024 77,692,511 (3,831,879) (3,831,879)
Swaps -------------------------------------------------------------------------------------------------------------
receive-floater/pay-floater 5,773,332 4,191,386 (8,903) (8,903)
-------------------------------------------------------------------------------------------------------------
receive-fix/pay-fix 194,856 100,767 (4,233) (4,233)
---------------------------------------------------------------------------------------------------------------------------
sell 6,956,713 4,267,621 (98,417) (64,355)
Others -------------------------------------------------------------------------------------------------------------
buy 5,520,093 3,334,827 102,102 68,476
-------------------------------------------------------------------------------------------------------------------------------
Total 117,722 110,789
-------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains (losses) are recognized in the consolidated
statement of operations. Derivatives which qualify for
hedge-accounting are not included in the above table.
2. Market values of exchange-traded transactions are based on
closing prices on the Tokyo International Financial Futures
Exchange, etc. Market values of over-the-counter transactions
are based on discounted cash flow method, option pricing models,
etc.
b. Foreign exchange-related transactions
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
----------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains
or contract amount of over 1 year (losses)
----------------------------------------------------------------------------------------------------------------------
Over-the-counter
------------------------------------------------------------------------------------------------------------------
Swaps 9,419,404 6,111,382 (110,061) (110,061)
------------------------------------------------------------------------------------------------------------------
sell 23,912 - (523) (523)
Forward contracts ------------------------------------------------------------------------------------------
buy 16,662 - 788 788
------------------------------------------------------------------------------------------------------------------
sell 883 - (6) 6
Options -------------------------------------------------------------------------------------------------
buy 883 - 6 (3)
----------------------------------------------------------------------------------------------------------------------
Total (109,796) (109,794)
----------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains are recognized in the consolidated statement of
operations. Derivatives which qualify for hedge-accounting
and/or which are applicable to notes 3. are not included in the
above table.
2. Market values of over-the-counter transactions are based on
discounted cash flow method, option pricing models, etc.
3. Currency swaps which are accounted for by an accrual basis are
not included in the above table.
Notional principal amount, market value and valuation gains of
currency swaps which are accounted for by an accrual basis are
as follows:
(in millions of yen)
--------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------
Notional principal amount Market value Valuation losses
--------------------------------------------------------------------------------------
Swaps 2,829,937 (47,410) (47,410)
--------------------------------------------------------------------------------------
Other foreign exchange-related transactions such as forward
exchange contracts and currency options, which valuation gains
(losses) had been recognized in the consolidated statement of
operations, are not included in the above table.
Notional principal or contract amounts of those foreign
exchange-related transactions are as follows:
----------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------
Notional principal or contract amount
----------------------------------------------------------------------------------------
Exchange-traded
-------------------------------------------------------------------------------------
sell 564
Futures ----------------------------------------------------------------
buy 2,985
----------------------------------------------------------------------------------------
Over-the-counter
-------------------------------------------------------------------------------------
sell 25,591,471
Forward contracts ----------------------------------------------------------------
buy 26,879,793
-------------------------------------------------------------------------------------
sell 4,926,775
Options ----------------------------------------------------------------
buy 4,633,370
----------------------------------------------------------------------------------------
-20-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
c. Equity-related transactions (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains (losses)
or contract amount of over 1 year
---------------------------------------------------------------------------------------------------------------------------
Exchange-traded
---------------------------------------------------------------------------------------------------------------------------
sell 96,698 - 1,560 1,560
Futures -------------------------------------------------------------------------------------------------------
buy 82 - (0) (0)
---------------------------------------------------------------------------------------------------------------------------
sell 19,693 - (247) 38
Options -------------------------------------------------------------------------------------------------------
buy 11,450 - 1,508 72
---------------------------------------------------------------------------------------------------------------------------
Over-the-counter -
---------------------------------------------------------------------------------------------------------------------------
sell 49,054 25,657 (1,980) (1,185)
Options --------------------------------------------------------------------------------------------------------
buy 69,266 39,394 2,455 1,825
---------------------------------------------------------------------------------------------------------------------------
receive-index swaps 38 38 - -
Swaps --------------------------------------------------------------------------------------------------------
pay-index swaps - - - -
---------------------------------------------------------------------------------------------------------------------------
Index sell 260 - 7 7
--------------------------------------------------------------------------------------------------------
forwards buy 1,007 - (57) (57)
---------------------------------------------------------------------------------------------------------------------------
Total 3,246 2,261
---------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains (losses) are recognized in the consolidated statement
of operations.
2. Market values of exchange-traded transactions are based on closing
prices on the Tokyo Stock Exchange, etc. Market values of
over-the-counter transactions are based on discounted cash flow
method, option pricing models, etc.
d. Bond-related transactions (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
----------------------------------------------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains (losses)
or contract amount of over 1 year
----------------------------------------------------------------------------------------------------------------------------
Exchange-traded
----------------------------------------------------------------------------------------------------------------------------
sell 525,471 27,604 (1,020) (1,020)
Futures -----------------------------------------------------------------------------------------------------
buy 551,546 22,762 1,025 1,025
----------------------------------------------------------------------------------------------------------------------------
sell 88,630 37,431 (139) 260
Options -----------------------------------------------------------------------------------------------------
buy 202,912 37,431 276 (300)
----------------------------------------------------------------------------------------------------------------------------
Over-the-counter
----------------------------------------------------------------------------------------------------------------------------
sell 487,927 - (3,661) (1,187)
Options -----------------------------------------------------------------------------------------------------
buy 310,284 - 691 (116)
----------------------------------------------------------------------------------------------------------------------------
Total (2,827) (1,338)
----------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains (losses) are recognized in the consolidated statement
of operations. Derivatives which qualify for hedge-accounting are not
included in the above table.
2. Market values of exchange-traded transactions are based on closing
prices on the Tokyo Stock Exchange, etc. Market values of
over-the-counter transactions are based on option pricing models,
etc.
e. Commodity-related transactions (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
----------------------------------------------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains (losses)
or contract amount of over 1 year
----------------------------------------------------------------------------------------------------------------------------
Exchange-traded
----------------------------------------------------------------------------------------------------------------------------
sell 1,123 - (41) (41)
Futures ---------------------------------------------------------------------------------------------------------
buy 3,491 3,224 159 159
----------------------------------------------------------------------------------------------------------------------------
Over-the-counter
----------------------------------------------------------------------------------------------------------------------------
receive-index swaps 138,709 71,273 (14,903) (14,903)
Swaps ---------------------------------------------------------------------------------------------------------
pay-index swaps 123,008 45,895 14,654 14,654
----------------------------------------------------------------------------------------------------------------------------
sell 28,774 8,192 (1,881) (505)
Options ---------------------------------------------------------------------------------------------------------
buy 33,528 7,546 3,903 1,999
----------------------------------------------------------------------------------------------------------------------------
Total 1,891 1,362
----------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains (losses) are recognized in the consolidated statement
of operations.
2. Market values of exchange-traded transactions are based on closing
prices on the International Petroleum Exchange, etc. Market values of
over-the-counter transactions are based on the price of the
commodities, contract terms, and other factors comprising the
contract of transactions.
3. Commodities are mainly related to petroleum.
-21-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(Japanese GAAP)
f. Credit derivatives (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains
or contract amount of over 1 year
------------------------------------------------------------------------------------------------------------------------------------
Over-the-counter
------------------------------------------------------------------------------------------------------------------------------------
sell 342,536 275,427 29,452 29,452
Credit default options ------------------------------------------------------------------------------------------------------
buy 489,391 334,624 648 648
------------------------------------------------------------------------------------------------------------------------------------
sell 3,227 - 286 286
Others ------------------------------------------------------------------------------------------------------
buy - - - -
------------------------------------------------------------------------------------------------------------------------------------
Total 30,386 30,386
------------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains(losses) are recognized in the consolidated statement
of operations.
2. Market values are based on discounted cash flow method, option
pricing models, etc.
3. In the above table, "sell" indicates credit risks assumed, and "buy"
indicates credit risks transferred.
g. Others (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains
or contract amount of over 1 year
------------------------------------------------------------------------------------------------------------------------------------
Over-the-counter
------------------------------------------------------------------------------------------------------------------------------------
sell 215 - (8) 26
Weather derivatives ------------------------------------------------------------------------------------------------------
buy - - - -
------------------------------------------------------------------------------------------------------------------------------------
Total (8) 26
------------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains (losses) are recognized in the consolidated statement
of operations.
2. Market values are based on option pricing models, etc.
(Reference)
Derivatives qualified for hedge-accounting
(in billions of yen)
------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
--------------------------------------------------------------------------------------
Notional principal Market value Deferred hedge Deferred hedge Deferred hedge
or contract amount profit loss profit and loss
------------------------------------------------------------------------------------------------------------------
Interest Rate futures 1,410.0 4.2 57.5 41.9 15.6
------------------------------------------------------------------------------------------------------------------
Interest Rate Swaps 20,715.8 135.7 356.3 286.6 69.6
------------------------------------------------------------------------------------------------------------------
Others 65.5 (0.1) 0.2 0.3 (0.1)
(interest rate-related transactions)
------------------------------------------------------------------------------------------------------------------
Others 545.1 (2.4) 24.6 29.8 (5.2)
------------------------------------------------------------------------------------------------------------------
Total 137.3 438.7 358.8 79.9
------------------------------------------------------------------------------------------------------------------
Notes: 1. Derivatives which qualify for hedge-accounting are
included in the above table.
2. The transactions in the table above are reported on a
mark-to-market basis on the consolidated balance sheet.
The valuation differences which do not correspond to the
income/expenses accruing on hedged items are deferred
assets/liabilities.
Notional principal by the remaining life of the interest rate swaps
above is as follows:
(in billions of yen)
------------------------------------------------------------------------------------------------------------
As of March 31, 2003
-----------------------------------------------------------------------------------
Due within 1 year Due after 1 year Due after 5 years Total
through 5 years
------------------------------------------------------------------------------------------------------------
Receive-fix/pay-floater 7,275.8 6,499.4 1,086.6 14,861.9
------------------------------------------------------------------------------------------------------------
Receive-floater/pay-fix 2,145.8 2,821.5 737.3 5,704.7
------------------------------------------------------------------------------------------------------------
Receive-floater/pay-floater 19.2 76.7 53.1 149.1
------------------------------------------------------------------------------------------------------------
Total 9,441.0 9,397.7 1,877.0 20,715.8
------------------------------------------------------------------------------------------------------------
-22-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
5. Financial Results (The Bank of Tokyo-Mitsubishi, Ltd. and Consolidated
Subsidiaries)
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/ For the year ended
March 31, (Decrease) March 31,
2003 (A) (A) - (B) 2002 (B)
------------------------------------------------------------------------------------------------------------------------------------
Gross profits 1,411,032 14,119 1,396,912
-------------------------------------------------------------------------------------------------------------------------------
Net interest income 857,686 (65,473) 923,159
-------------------------------------------------------------------------------------------------------------------------------
Trust fees 18,515 (3,549) 22,064
-------------------------------------------------------------------------------------------------------------------------------
Net fees and commissions 311,366 16,994 294,372
-------------------------------------------------------------------------------------------------------------------------------
Net trading profits 76,654 24,845 51,808
-------------------------------------------------------------------------------------------------------------------------------
Net other business income 146,809 41,301 105,507
----------------------------------------------------------------------------------------------------------------------------
Net gains on debt securities 63,178 34,382 28,796
------------------------------------------------------------------------------------------------------------------------------------
General and administrative expenses 813,531 31,676 781,855
------------------------------------------------------------------------------------------------------------------------------------
Net business profits before 597,500 (17,556) 615,057
provision for formula allowance for loan losses
------------------------------------------------------------------------------------------------------------------------------------
Provision for formula allowance for loan losses (1) 42,739 18,393 24,345
------------------------------------------------------------------------------------------------------------------------------------
Net business profits* 554,761 (35,949) 590,711
------------------------------------------------------------------------------------------------------------------------------------
Net non-recurring losses (827,384) (50,779) (776,605)
-------------------------------------------------------------------------------------------------------------------------------
Credit related costs (2) (349,921) 214,888 (564,810)
----------------------------------------------------------------------------------------------------------------------------
Losses on loan charge-offs (165,727) 70,358 (236,086)
----------------------------------------------------------------------------------------------------------------------------
Provision for specific allowance for loan losses (39,809) 225,777 (265,586)
----------------------------------------------------------------------------------------------------------------------------
Losses on sales of loans to the Resolution and Collection
Corporation (73,030) (69,124) (3,906)
----------------------------------------------------------------------------------------------------------------------------
Other credit related costs (71,354) (12,123) (59,231)
-------------------------------------------------------------------------------------------------------------------------------
Net losses on equity securities (386,611) (187,202) (199,409)
----------------------------------------------------------------------------------------------------------------------------
Gains on sales of equity securities 52,997 (16,628) 69,626
----------------------------------------------------------------------------------------------------------------------------
Losses on sales of equity securities (184,774) (4,282) (180,491)
----------------------------------------------------------------------------------------------------------------------------
Losses on write down of equity securities (254,835) (166,290) (88,544)
-------------------------------------------------------------------------------------------------------------------------------
Equity in loss of affiliates (9,009) 2,495 (11,505)
-------------------------------------------------------------------------------------------------------------------------------
Other (81,841) (80,961) (880)
------------------------------------------------------------------------------------------------------------------------------------
Ordinary loss (272,622) (86,729) (185,893)
------------------------------------------------------------------------------------------------------------------------------------
Net special gains 15,261 (116,650) 131,911
------------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes and others (257,361) (203,379) (53,981)
------------------------------------------------------------------------------------------------------------------------------------
Income taxes-current 54,906 24,134 30,771
------------------------------------------------------------------------------------------------------------------------------------
Income taxes-deferred (178,443) (31,099) (147,344)
------------------------------------------------------------------------------------------------------------------------------------
Minority interest 4,293 (14,387) 18,681
------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) (138,117) (182,027) 43,909
------------------------------------------------------------------------------------------------------------------------------------
Note:
* Net business profits = Net business profits of The Bank of Tokyo-Mitsubishi, Ltd. + Other
consolidated entities' gross profits - Other consolidated entities' general and
administrative expenses - Other consolidated entities' provision for formula allowance
for loan losses - Intercompany transactions.
(Reference)
---------------------------------------------------------------------------------------------------------------------------------
Total credit costs (1) + (2) 392,661 (196,495) 589,156
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Number of consolidated subsidiaries 150 (1) 151
---------------------------------------------------------------------------------------------------------------------------------
Number of affiliated companies accounted for by the equity method 23 (3) 26
---------------------------------------------------------------------------------------------------------------------------------
-23-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
Financial Results (The Bank of Tokyo-Mitsubishi, Ltd.)
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/ For the year ended
March 31, (Decrease) March 31,
2003 (A) (A) - (B) 2002 (B)
-----------------------------------------------------------------------------------------------------------------------------------
Gross profits 978,054 27,604 950,449
------------------------------------------------------------------------------------------------------------------------------
Domestic gross profits 545,956 5,555 540,401
---------------------------------------------------------------------------------------------------------------------------
Net interest income 427,416 (25,388) 452,805
---------------------------------------------------------------------------------------------------------------------------
Net fees and commissions 71,532 7,129 64,402
---------------------------------------------------------------------------------------------------------------------------
Net trading profits 16,764 2,868 13,895
---------------------------------------------------------------------------------------------------------------------------
Net other business income 30,243 20,945 9,297
-------------------------------------------------------------------------------------------------------------------------
Net gains on debt securities 32,186 20,613 11,572
------------------------------------------------------------------------------------------------------------------------------
Non-domestic gross profits 432,097 22,048 410,048
---------------------------------------------------------------------------------------------------------------------------
Net interest income 227,149 (7,725) 234,875
---------------------------------------------------------------------------------------------------------------------------
Net fees and commissions 61,441 (4,689) 66,130
---------------------------------------------------------------------------------------------------------------------------
Net trading profits 32,703 5,450 27,252
---------------------------------------------------------------------------------------------------------------------------
Net other business income 110,803 29,012 81,790
-------------------------------------------------------------------------------------------------------------------------
Net gains on debt securities 30,034 15,490 14,543
-----------------------------------------------------------------------------------------------------------------------------------
General and administrative expenses 466,499 (20,634) 487,133
------------------------------------------------------------------------------------------------------------------------------
Personnel expenses 183,535 (5,600) 189,135
------------------------------------------------------------------------------------------------------------------------------
Non-personnel expenses 260,226 (12,316) 272,543
------------------------------------------------------------------------------------------------------------------------------
Taxes 22,737 (2,717) 25,455
-----------------------------------------------------------------------------------------------------------------------------------
Net business profits before 511,555 48,238 463,316
provision for formula allowance for loan losses
-----------------------------------------------------------------------------------------------------------------------------------
Provision for formula allowance for loan losses 49,698 28,700 20,998
-----------------------------------------------------------------------------------------------------------------------------------
Net business profits 461,856 19,537 442,318
-----------------------------------------------------------------------------------------------------------------------------------
Net non-recurring losses (761,896) 15,309 (777,206)
------------------------------------------------------------------------------------------------------------------------------
Credit related costs (291,389) 172,445 (463,835)
---------------------------------------------------------------------------------------------------------------------------
Losses on loan charge-offs (141,491) 35,291 (176,782)
---------------------------------------------------------------------------------------------------------------------------
Provision for specific allowance for loan losses 3,140 220,112 (216,972)
---------------------------------------------------------------------------------------------------------------------------
Net losses on sale of domestic bad loans and similar claims (81,591) (64,321) (17,270)
---------------------------------------------------------------------------------------------------------------------------
Provision for allowance for loans to specific foreign borrowers 13,370 27,325 (13,954)
---------------------------------------------------------------------------------------------------------------------------
Losses on financial assistance to subsidiaries (26,616) (18,684) (7,932)
---------------------------------------------------------------------------------------------------------------------------
Other credit related costs (58,201) (27,277) (30,923)
------------------------------------------------------------------------------------------------------------------------------
Net losses on equity securities (370,560) (83,367) (287,193)
---------------------------------------------------------------------------------------------------------------------------
Gains on sales of equity securities 73,897 (196) 74,094
---------------------------------------------------------------------------------------------------------------------------
Losses on sales of equity securities (184,528) (4,505) (180,023)
---------------------------------------------------------------------------------------------------------------------------
Losses on write down of equity securities (259,928) (78,664) (181,264)
and provision for allowance for losses on investment securities
------------------------------------------------------------------------------------------------------------------------------
Others (99,946) (73,768) (26,177)
-----------------------------------------------------------------------------------------------------------------------------------
Ordinary loss (300,040) 34,847 (334,888)
-----------------------------------------------------------------------------------------------------------------------------------
Net special gains 12,707 (4,747) 17,454
------------------------------------------------------------------------------------------------------------------------------
Net losses on sale of premises and equipment (13,893) (3,162) (10,731)
------------------------------------------------------------------------------------------------------------------------------
Gain on loans charged-off 30,350 (2,750) 33,101
-----------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes (287,333) 30,100 (317,433)
-----------------------------------------------------------------------------------------------------------------------------------
Income taxes-current 22,925 30,161 (7,236)
-----------------------------------------------------------------------------------------------------------------------------------
Income taxes-deferred (218,141) (133,172) (84,968)
-----------------------------------------------------------------------------------------------------------------------------------
Net loss (92,116) 133,111 (225,228)
-----------------------------------------------------------------------------------------------------------------------------------
-24-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
6. Average interest rate spread
[Non-Consolidated] (percentage per annum)
------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
---------------------
2003(A) 2002(B) (A) - (B)
------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 1.78 2.39 (0.60)
--------------------------------------------------------------------------------------------------------
Average interest rate on Loans and bills discounted 1.82 2.21 (0.39)
--------------------------------------------------------------------------------------------------------
Average interest rate on Investment securities 1.13 1.56 (0.43)
------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-bearing liabilities (b) 1.41 2.04 (0.63)
--------------------------------------------------------------------------------------------------------
Average interest rate on Deposits, NCD and Debentures 0.32 0.76 (0.43)
--------------------------------------------------------------------------------------------------------
Average interest rate on external liabilities 1.28 1.54 (0.25)
------------------------------------------------------------------------------------------------------------
Total average interest rate spread (a)-(b) 0.37 0.34 0.02
------------------------------------------------------------------------------------------------------------
Average interest rate spread in domestic business segment: (percentage per annum)
------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 1.16 1.33 (0.17)
--------------------------------------------------------------------------------------------------------
Average interest rate on Loans and bills discounted 1.53 1.70 (0.17)
--------------------------------------------------------------------------------------------------------
Average interest rate on Investment securities 0.57 0.84 (0.27)
------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-bearing liabilities (b) 0.88 1.06 (0.17)
--------------------------------------------------------------------------------------------------------
Average interest rate on Deposits, NCD and Debentures 0.06 0.14 (0.08)
--------------------------------------------------------------------------------------------------------
Average interest rate on external liabilities 0.98 1.06 (0.08)
------------------------------------------------------------------------------------------------------------
Total average interest rate spread (a)-(b) 0.27 0.27 (0.00)
------------------------------------------------------------------------------------------------------------
7. Valuation Differences on Securities
(1) Valuation method of securities
--------------------------------------------------------------------------------
Trading securities Market value (valuation differences
are recorded as profits or loses)
--------------------------------------------------------------------------------
Debt securities being held to maturity Amortized cost
--------------------------------------------------------------------------------
Securities available for sale Market value (valuation differences
are included in shareholders' equity,
net of income taxes)
--------------------------------------------------------------------------------
(Reference) Securities in money held in trust
--------------------------------------------------------------------------------
Trading purposes Market value (valuation differences
are recorded as profits or loses)
--------------------------------------------------------------------------------
Being held to maturity Amortized cost
--------------------------------------------------------------------------------
Other Market value (valuation differences
are included in shareholders' equity,
net of income taxes)
--------------------------------------------------------------------------------
(2) Valuation differences
[Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------
As of March 31, 2003 As of March 31, 2002
-----------------------------------------------------------------------
Valuation differences Valuation differences
----------------- -----------------
Gains Losses Gains Losses
----------
(A) (A)-(B) (B)
------------------------------------------------------------------------------------------------
Debt securities being
held to maturity 1,940 515 1,942 1 1,424 1,547 122
-----------------------------------------------------------------------------------------------
Securities available
for sale (246,944) (331,133) 298,039 544,984 84,188 529,303 445,114
---------------------------------------------------------------------------------------------
Domestic equity
securities (290,404) (355,793) 168,888 459,293 65,388 433,492 368,104
---------------------------------------------------------------------------------------------
Domestic bonds 65,158 26,174 67,259 2,100 38,984 42,084 3,100
---------------------------------------------------------------------------------------------
Other (21,698) (1,514) 61,892 83,590 (20,184) 53,725 73,910
-----------------------------------------------------------------------------------------------
Total (245,003) (330,617) 299,982 544,985 85,613 530,850 445,237
---------------------------------------------------------------------------------------------
Domestic equity
securities (290,404) (355,793) 168,888 459,293 65,388 433,492 368,104
---------------------------------------------------------------------------------------------
Domestic bonds 65,158 26,174 67,259 2,100 38,984 42,084 3,100
---------------------------------------------------------------------------------------------
Other (19,757) (998) 63,834 83,591 (18,759) 55,273 74,032
------------------------------------------------------------------------------------------------
-25-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
8. Risk-Adjusted Capital Ratio Based on the Standards of the BIS
(in billions of yen)
-------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
(Preliminary basis)
-------------------------------------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital ratio 10.43% 0.14% 0.00% 10.29% 10.43%
(2) Tier I capital 2,400.2 (156.4) (25.6) 2,556.6 2,425.8
(3) Tier II capital includable as
qualifying capital 2,291.3 (265.3) (104.7) 2,556.6 2,396.0
i) The amount of unrealized gains on
investment securities, includable as
qualifying capital - (36.6) - 36.6 -
ii) The amount of land revaluation excess
includable as qualifying capital 148.9 (2.9) (0.7) 151.8 149.6
iii)Subordinated debt 1,581.1 (269.1) (109.0) 1,850.3 1,690.2
(4) Tier III capital includable as
qualifying capital 30.0 30.0 0.2 - 29.8
(5) Deductions from total
qualifying capital 33.9 (69.1) 8.2 103.0 25.6
(6) Total qualifying capital (2)+(3)+(4)-(5) 4,687.7 (322.5) (138.3) 5,010.2 4,826.0
(7) Risk-adjusted assets 44,903.0 (3,754.8) (1,366.2) 48,657.8 46,269.2
-------------------------------------------------------------------------------------------------------------------------------
-26-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd)
2 Loan Portfolio and Other
1. Risk-Monitored Loans
(Nonaccrual loans, accruing loans contractually past due 3 months or
more and restructured loans)
[Consolidated]
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 53,709 (59,868) (28,602) 113,577 82,311
---------------------------------------------------------------------------------------------------------------------------
Past due loans 923,229 (568,462) (205,748) 1,491,691 1,128,978
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually 18,078 293 4,475 17,785 13,603
past due 3 months or more
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 977,483 (557,931) (447,826) 1,535,415 1,425,310
---------------------------------------------------------------------------------------------------------------------------
Total 1,972,501 (1,185,969) (677,702) 3,158,470 2,650,203
---------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 38,668,577 (1,326,316) 525,774 39,994,893 38,142,802
----------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
---------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.13% (0.14)% (0.07)% 0.28% 0.21%
---------------------------------------------------------------------------------------------------------------------------
Past due loans 2.38% (1.34)% (0.57)% 3.72% 2.95%
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually 0.04% 0.00% 0.01% 0.04% 0.03%
past due 3 months or more
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 2.52% (1.31)% (1.20)% 3.83% 3.73%
---------------------------------------------------------------------------------------------------------------------------
Total 5.10% (2.79)% (1.84)% 7.89% 6.94%
---------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated]
(in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 47,352 (42,230) (15,210) 89,583 62,563
---------------------------------------------------------------------------------------------------------------------------
Past due loans 825,467 (601,716) (239,390) 1,427,183 1,064,857
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually 17,085 1,023 5,774 16,062 11,311
past due 3 months or more
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 1,038,848 (481,378) (421,844) 1,520,227 1,460,693
---------------------------------------------------------------------------------------------------------------------------
Total 1,928,753 (1,124,302) (670,671) 3,053,056 2,599,425
---------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 34,724,836 (895,980) 561,391 35,620,817 34,163,445
----------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
---------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.13% (0.11)% (0.04)% 0.25% 0.18%
---------------------------------------------------------------------------------------------------------------------------
Past due loans 2.37% (1.62)% (0.73)% 4.00% 3.11%
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually 0.04% 0.00% 0.01% 0.04% 0.03%
past due 3 months or more
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 2.99% (1.27)% (1.28)% 4.26% 4.27%
---------------------------------------------------------------------------------------------------------------------------
Total 5.55% (3.01)% (2.05)% 8.57% 7.60%
---------------------------------------------------------------------------------------------------------------------------
-27-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
Classification of risk-monitored Loans
Classification by geographic area
[Consolidated] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------------------------
Domestic* 1,636,411 (1,205,670) (705,656) 2,842,081 2,342,067
----------------------------------------------------------------------------------------------------------------------------------
Overseas* 336,090 19,701 27,953 316,388 308,136
----------------------------------------------------------------------------------------------------------------------------
Asia 56,710 (59,019) (14,427) 115,729 71,137
----------------------------------------------------------------------------------------------------------------------
Indonesia 12,431 (23,147) (12,701) 35,579 25,133
Thailand 10,879 (26,897) (15,496) 37,776 26,375
Hong Kong 13,064 1,677 10,482 11,386 2,581
Other 20,335 (10,652) 3,288 30,987 17,047
----------------------------------------------------------------------------------------------------------------------------
United States of America 175,847 36,829 49,071 139,017 126,775
Other 103,532 41,890 (6,690) 61,641 110,222
----------------------------------------------------------------------------------------------------------------------------------
Total 1,972,501 (1,185,969) (677,702) 3,158,470 2,650,203
----------------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
Classification by type of industry of borrowers
[Consolidated] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------------------------
Domestic* 1,636,411 (1,205,670) (705,656) 2,842,081 2,342,067
------------------------------------------------------------------------------------------------------------------------------
Manufacturing 203,095 (158,468) (112,451) 361,563 315,546
Construction 118,934 (118,512) (76,583) 237,446 195,518
Wholesale and Retail 399,097 (215,650) (155,141) 614,747 554,239
Banks and other financial institutions 17,087 (52,138) (41,429) 69,226 58,516
Real estate 436,237 (440,708) (195,960) 876,946 632,198
Services 173,784 (159,175) (102,456) 332,959 276,241
Other industries 70,001 (22,346) (3,304) 92,347 73,305
Consumer 218,172 (38,671) (18,328) 256,844 236,501
----------------------------------------------------------------------------------------------------------------------------------
Overseas* 336,090 19,701 27,953 316,388 308,136
------------------------------------------------------------------------------------------------------------------------------
Banks and other financial institutions 6,122 (14,076) (2,932) 20,198 9,055
Commercial and industrial 323,635 37,691 30,675 285,944 292,960
Other 6,331 (3,914) 210 10,245 6,120
----------------------------------------------------------------------------------------------------------------------------------
Total 1,972,501 (1,185,969) (677,702) 3,158,470 2,650,203
----------------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
-28-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
2. Allowance for Loan Losses
[Consolidated] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 1,016,265 (243,397) (106,278) 1,259,662 1,122,543
-------------------------------------------------------------------------------------------------------------------------------
Formula allowance for loan losses 664,572 36,000 (15,734) 628,572 680,307
-------------------------------------------------------------------------------------------------------------------------------
Specific allowance for loan losses 339,141 (266,026) (89,331) 605,168 428,472
-------------------------------------------------------------------------------------------------------------------------------
Allowance for loans to specific foreign borrowers 12,551 (13,370) (1,212) 25,921 13,763
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Reserve for losses on real estate-collateralized loans sold - (7,233) (1,687) 7,233 1,687
----------------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 809,374 (226,459) (94,218) 1,035,833 903,592
-------------------------------------------------------------------------------------------------------------------------------
Formula allowance for loan losses 506,566 49,698 (9,832) 456,867 516,399
-------------------------------------------------------------------------------------------------------------------------------
Specific allowance for loan losses 290,256 (262,787) (83,173) 553,043 373,429
-------------------------------------------------------------------------------------------------------------------------------
Allowance for loans to specific foreign borrowers 12,551 (13,370) (1,212) 25,921 13,763
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Reserve for financial assistance to specific borrowers - - (10,336) - 10,336
----------------------------------------------------------------------------------------------------------------------------------
Reserve for losses on real estate-collateralized loans sold - (7,233) (1,687) 7,233 1,687
----------------------------------------------------------------------------------------------------------------------------------
3. Coverage Ratio against Risk-Monitored Loans
[Consolidated] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses(a) 1,016,265 (243,397) (106,278) 1,259,662 1,122,543
----------------------------------------------------------------------------------------------------------------------------
Risk-monitored loans(b) 1,972,501 (1,185,969) (677,702) 3,158,470 2,650,203
----------------------------------------------------------------------------------------------------------------------------
Coverage ratio(a)/(b) 51.52% 11.63% 9.16% 39.88% 42.35%
----------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (a) 809,374 (226,459) (94,218) 1,035,833 903,592
----------------------------------------------------------------------------------------------------------------------------
Risk-monitored loans (b) 1,928,753 (1,124,302) (670,671) 3,053,056 2,599,425
----------------------------------------------------------------------------------------------------------------------------
Coverage ratio (a)/(b) 41.96% 8.03% 7.20% 33.92% 34.76%
----------------------------------------------------------------------------------------------------------------------------
-29-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
4. Disclosed Claims under the Financial Reconstruction Law (the "FRL")
[Non-Consolidated] (in millions of yen)
-------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt debtors 136,659 (185,686) (204,931) 322,345 341,590
-------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 772,000 (670,060) (213,329) 1,442,061 985,329
-------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 1,055,933 (480,355) (416,070) 1,536,289 1,472,004
-------------------------------------------------------------------------------------------------------------------------------
Total (1) 1,964,593 (1,336,102) (834,331) 3,300,695 2,798,925
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Normal claims 37,400,369 (1,000,002) 516,803 38,400,371 36,883,565
-------------------------------------------------------------------------------------------------------------------------------
5. Status of Secured Coverage on Disclosed Claims under the FRL
[Non-Consolidated] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage amount (2) 1,465,684 (988,348) (659,900) 2,454,033 2,125,585
----------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 498,971 (265,622) (121,853) 764,594 620,824
----------------------------------------------------------------------------------------------------------------------------
Reserve for financial support to specific borrowers - - - - -
----------------------------------------------------------------------------------------------------------------------------
Collateral, guarantees, etc. 966,712 (722,726) (538,047) 1,689,439 1,504,760
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 74.60% 0.25% (1.33)% 74.34% 75.94%
---------------------------------------------------------------------------------------------------------------------------------
Secured Coverage of Each Category of Disclosed Claims under the FRL
[Non-Consolidated] (in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
financial amount by
support to collateralized Coverage ratio Coverage ratio
Category Disclosed Allowance for specific and guaranteed [(B)+(C)]/ [(B)+(C)+(D)]/
amount(A) loan losses (B) borrowers (C) loans (D) [(A)-(D)] (A)
-----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 136,659 11,460 - 125,198 100.00% 100.00%
[322,345] [62,345] - [259,999] [100.00%] [100.00%]
-----------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 772,000 267,551 - 364,388 65.63% 81.85%
[1,442,061] [486,938] - [643,242] [60.95%] [78.37%]
-----------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 1,055,933 219,959 - 477,126 38.00% 66.01%
[1,536,289] [215,309] - [786,196] [28.70%] [65.18%]
-----------------------------------------------------------------------------------------------------------------------------------
Sub total (1) 1,964,593 498,971 - 966,712 50.00% 74.60%
[3,300,695] [764,594] - [1,689,439] [47.45%] [74.34%]
-----------------------------------------------------------------------------------------------------------------------------------
Normal claims 37,400,369
[38,400,371]
-----------------------------------------------------------------------------------------------------------------------------------
Total (2) 39,364,962
[41,701,067]
-----------------------------------------------------------------------------------------------------------------------------------
Sub total (1) / Total (2) 4.99%
[7.91%]
-----------------------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2003. The lower figures with bracket are as of March 31, 2002.
-30-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
6. Progress in the Disposal of Problem Assets [Non-Consolidated]
(excluding claims under close observation)
(1) Assets categorized as problem assets as of September 30, 2000 based on the FRL (in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of -------
September 30, March 31, September 30, March 31, September 30, March 31, (b)-(a)
2000 2001 2001 2002 2002 (a) 2003 (b)
------------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 274.3 144.3 150.6 144.9 210.9 38.7 (172.1)
------------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 1,053.5 944.9 758.4 538.4 193.6 13.5 (180.0)
------------------------------------------------------------------------------------------------------------------------------------
Total 1,327.8 1,089.2 909.0 683.4 404.6 52.3 (352.2)
------------------------------------------------------------------------------------------------------------------------------------
(A) (B)
Progress in the disposal of problem assets (in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Disposition by borrowers' liquidation 120.3
---------------------------------------------------------------------------
Re-constructive disposition 15.2
---------------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition -
---------------------------------------------------------------------------
Loan sales to secondary market 68.4
---------------------------------------------------------------------------
Charge-off 11.9
---------------------------------------------------------------------------
Other 136.2
----------------------------------------------------------------------
Collection of claims 20.6
----------------------------------------------------------------------
Improvements in financial status 115.6
---------------------------------------------------------------------------
Total 352.2 (B)
---------------------------------------------------------------------------
Above (A) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Legal liquidation 18.4
---------------------------------------------------------------------------
Quasi-legal liquidation -
---------------------------------------------------------------------------
Split-off of problem loans -
---------------------------------------------------------------------------
Partial charge-off of smaller balance loans 6.2
---------------------------------------------------------------------------
Entrust through the managed trust method to the
Resolution and Collection Corporation -
---------------------------------------------------------------------------
Total 24.6
---------------------------------------------------------------------------
(2) Assets newly categorized as problem assets during second half of fiscal 2000 based on the FRL (in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of -------
March 31, September 30, March 31, September 30, March 31, (b)-(a)
2001 2001 2002 2002 (a) 2003 (b)
------------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 106.8 98.3 94.3 44.0 24.9 (19.1)
------------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 635.3 575.4 447.4 269.3 127.8 (141.4)
------------------------------------------------------------------------------------------------------------------------------------
Total 742.1 673.7 541.8 313.3 152.7 (160.6)
------------------------------------------------------------------------------------------------------------------------------------
(C) (D)
Progress in the disposal of problem assets (in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Disposition by borrowers' liquidation 10.5
---------------------------------------------------------------------------
Re-constructive disposition 3.2
---------------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition 9.1
---------------------------------------------------------------------------
Loan sales to secondary market 46.0
---------------------------------------------------------------------------
Charge-off 29.4
---------------------------------------------------------------------------
Other 62.2
----------------------------------------------------------------------
Collection of claims 48.0
----------------------------------------------------------------------
Improvements in financial status 14.1
---------------------------------------------------------------------------
Total 160.6 (D)
---------------------------------------------------------------------------
Above (C) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Legal liquidation 1.6
---------------------------------------------------------------------------
Quasi-legal liquidation -
---------------------------------------------------------------------------
Split-off of problem loans -
---------------------------------------------------------------------------
Partial charge-off of smaller balance loans 6.6
---------------------------------------------------------------------------
Entrust through the managed trust method to the
Resolution and Collection Corporation -
---------------------------------------------------------------------------
Total 8.2
---------------------------------------------------------------------------
-31-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(3) Assets newly categorized as problem assets during first half of fiscal 2001 based on the FRL (in billions of yen)
-------------------------------------------------------------------------------------------------------------------------
As of As of As of As of -------
September 30, March 31, September 30, March 31, (b)-(a)
2001 2002 2002 (a) 2003 (b)
-------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 27.1 25.6 26.4 15.6 (10.8)
-------------------------------------------------------------------------------------------------------------------------
Claims under high risk 257.0 140.1 79.9 31.3 (48.6)
-------------------------------------------------------------------------------------------------------------------------
Total 284.2 165.8 106.3 46.9 (59.4)
-------------------------------------------------------------------------------------------------------------------------
(E) (F)
Progress in the disposal of problem assets (in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Disposition by borrowers' liquidation 0.7
---------------------------------------------------------------------------
Re-constructive disposition 10.6
---------------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition -
---------------------------------------------------------------------------
Loan sales to secondary market 21.4
---------------------------------------------------------------------------
Charge-off 8.7
---------------------------------------------------------------------------
Other 17.7
---------------------------------------------------------------------------
Collection of claims 15.0
----------------------------------------------------------------------
Improvements in financial status 2.6
---------------------------------------------------------------------------
Total 59.4 (F)
---------------------------------------------------------------------------
Above (E) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Legal liquidation 4.0
---------------------------------------------------------------------------
Quasi-legal liquidation -
---------------------------------------------------------------------------
Split-off of problem loans -
---------------------------------------------------------------------------
Partial charge-off of smaller balance loans 10.3
---------------------------------------------------------------------------
Entrust through the managed trust method to the
Resolution and Collection Corporation -
---------------------------------------------------------------------------
Total 14.4
---------------------------------------------------------------------------
(4) Assets newly categorized as problem assets during second half of fiscal
2001 based on the FRL
(in billions of yen)
----------------------------------------------------------------------------------------------------------------
As of As of As of -------
March 31, September 30, March 31, (b)-(a)
2002 2002 (a) 2003 (b)
----------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 57.3 35.4 13.1 (22.3)
----------------------------------------------------------------------------------------------------------------
Claims under high risk 315.9 162.4 94.0 (68.4)
----------------------------------------------------------------------------------------------------------------
Total 373.2 197.9 107.1 (90.8)
----------------------------------------------------------------------------------------------------------------
(G) (H)
Progress in the disposal of problem assets (in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Disposition by borrowers' liquidation 1.3
---------------------------------------------------------------------------
Re-constructive disposition 13.0
---------------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition -
---------------------------------------------------------------------------
Loan sales to secondary market 33.0
---------------------------------------------------------------------------
Charge-off 12.5
---------------------------------------------------------------------------
Other 30.8
---------------------------------------------------------------------------
Collection of claims 25.9
----------------------------------------------------------------------
Improvements in financial status 4.8
---------------------------------------------------------------------------
Total 90.8 (H)
---------------------------------------------------------------------------
Above (G) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Legal liquidation 2.1
---------------------------------------------------------------------------
Quasi-legal liquidation -
---------------------------------------------------------------------------
Split-off of problem loans -
---------------------------------------------------------------------------
Partial charge-off of smaller balance loans 8.4
---------------------------------------------------------------------------
Entrust through the managed trust method to the
Resolution and Collection Corporation -
---------------------------------------------------------------------------
Total 10.5
---------------------------------------------------------------------------
-32-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
(5) Assets newly categorized as problem assets during first half of fiscal 2002
based on the FRL
(in billions of yen)
----------------------------------------------------------------------------------------------
As of As of -------
September 30, March 31, (b)-(a)
2002 (a) 2003 (b)
----------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 24.6 19.0 (5.5)
----------------------------------------------------------------------------------------------
Claims under high risk 279.9 124.2 (155.6)
----------------------------------------------------------------------------------------------
Total 304.5 143.3 (161.2)
----------------------------------------------------------------------------------------------
(I) (J)
Progress in the disposal of problem assets (in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Disposition by borrowers' liquidation 4.4
---------------------------------------------------------------------------
Re-constructive disposition 13.2
---------------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition -
---------------------------------------------------------------------------
Loan sales to secondary market 40.4
---------------------------------------------------------------------------
Charge-off 5.9
---------------------------------------------------------------------------
Other 97.1
---------------------------------------------------------------------------
Collection of claims 86.7
----------------------------------------------------------------------
Improvements in financial status 10.3
---------------------------------------------------------------------------
Total 161.2 (J)
---------------------------------------------------------------------------
Above (I) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
---------------------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------------------
Legal liquidation 9.8
---------------------------------------------------------------------------
Quasi-legal liquidation -
---------------------------------------------------------------------------
Split-off of problem loans -
---------------------------------------------------------------------------
Partial charge-off of smaller balance loans 6.9
---------------------------------------------------------------------------
Entrust through the managed trust method to the
Resolution and Collection Corporation -
---------------------------------------------------------------------------
Total 16.7
---------------------------------------------------------------------------
(6) Assets newly categorized as problem assets during second half of fiscal
2002 based on the FRL
(in billions of yen)
---------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 25.1
---------------------------------------------------------------------------
Claims under high risk 380.9
---------------------------------------------------------------------------
Total 406.1
---------------------------------------------------------------------------
Histrical trend of problem assets based on the FRL (in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of --------
September 30, March 31, September 30, March 31, September 30, March 31, (b)-(a)
2000 2001 2001 2002 2002 (a) 2003 (b)
-----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 274.3 251.2 276.1 322.3 341.5 136.6 (204.9)
-----------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 1,053.5 1,580.2 1,590.9 1,442.0 985.3 772.0 (213.3)
-----------------------------------------------------------------------------------------------------------------------------------
Total 1,327.8 1,831.4 1,867.0 1,764.4 1,326.9 908.6 (418.2)
-----------------------------------------------------------------------------------------------------------------------------------
-33-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
7. Classification of Loans by Type of Industry
(1) Loans by type of industry [Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans
booked at offshore markets) 29,656,931 (194,264) 680,151 29,851,195 28,976,779
------------------------------------------------------------------------------------------------------------------------------------
Manufacturing 4,304,829 (288,853) (181,059) 4,593,682 4,485,888
Agriculture 14,021 (3,105) (1,163) 17,126 15,184
Forestry 5,325 (330) 41 5,655 5,284
Fishery 2,654 (403) (403) 3,057 3,057
Mining 33,449 (7,672) (971) 41,121 34,420
Construction 956,403 (209,055) (93,202) 1,165,458 1,049,605
Utilities 265,547 1,996 19,977 263,551 245,570
Media and Communication 650,340 (567,761) (559,363) 1,218,101 1,209,703
Wholesale and Retail 4,402,155 (378,244) (282,321) 4,780,399 4,684,476
Banks and other financial institutions 1,891,000 (414,681) (216,240) 2,305,681 2,107,240
Real estate 3,431,293 (212,966) (39,150) 3,644,259 3,470,443
Services 4,105,321 476,854 631,741 3,628,467 3,473,580
Municipal government 32,709 2,578 1,042 30,131 31,667
Other industries 9,561,885 1,407,377 1,401,222 8,154,507 8,160,662
------------------------------------------------------------------------------------------------------------------------------------
Overseas offices and loans booked
at offshore markets 5,067,905 (701,716) (118,760) 5,769,622 5,186,665
------------------------------------------------------------------------------------------------------------------------------------
Total 34,724,836 (895,980) 561,391 35,620,817 34,163,445
------------------------------------------------------------------------------------------------------------------------------------
(2) Domestic consumer loans [Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 7,199,314 459,437 185,029 6,739,877 7,014,285
------------------------------------------------------------------------------------------------------------------------------------
Housing loans 6,693,677 523,964 216,503 6,169,713 6,477,174
--------------------------------------------------------------------------------------------------------------------------------
Others 505,637 (64,527) (31,474) 570,164 537,111
------------------------------------------------------------------------------------------------------------------------------------
(3) Domestic loans to small and medium-sized companies [Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized companies 17,200,890 (803,853) (71,785) 18,004,743 17,272,676
------------------------------------------------------------------------------------------------------------------------------------
Percentage to total domestic loans 57.99% (2.31)% (1.60)% 60.31% 59.60%
------------------------------------------------------------------------------------------------------------------------------------
-34-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
8. Loans and Deposits [Non-Consolidated]
(in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Deposits (ending balance) 47,827,174 2,485,120 2,111,520 45,342,053 45,715,654
--------------------------------------------------------------------------------------------------------------------------------
Deposits (average balance) 46,254,741 2,922,918 730,712 43,331,822 45,524,028
--------------------------------------------------------------------------------------------------------------------------------
Loans (ending balance) 34,724,836 (895,980) 561,391 35,620,817 34,163,445
--------------------------------------------------------------------------------------------------------------------------------
Loans (average balance) 34,818,393 460,943 253,258 34,357,449 34,565,134
--------------------------------------------------------------------------------------------------------------------------------
9. Domestic Deposits [Non-Consolidated]
(in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Individuals 25,483,181 2,218,763 1,099,211 23,264,417 24,383,970
--------------------------------------------------------------------------------------------------------------------------------
Corporations and others 16,844,358 844,554 882,143 15,999,804 15,962,215
--------------------------------------------------------------------------------------------------------------------------------
Domestic deposits 42,327,540 3,063,318 1,981,354 39,264,221 40,346,185
--------------------------------------------------------------------------------------------------------------------------------
Note: Amounts do not include negotiable certificates of deposit, deposits of
overseas offices and JOM accounts.
10. Number of Employees [Non-Consolidated]
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Number of Employees 15,179 (541) (673) 15,720 15,852
--------------------------------------------------------------------------------------------------------------------------------
11. Number of Offices [Non-Consolidated]
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Domestic: 282 (14) (5) 296 287
--------------------------------------------------------------------------------------------------------------------------
Head office and Branches 260 (10) (3) 270 263
Sub Branches & Agencies 22 (4) (2) 26 24
--------------------------------------------------------------------------------------------------------------------------------
Overseas: 72 (3) (3) 75 75
--------------------------------------------------------------------------------------------------------------------------
Branches 42 (2) (2) 44 44
Sub - branches 13 (1) (1) 14 14
Representative offices 17 - - 17 17
--------------------------------------------------------------------------------------------------------------------------------
Total 354 (17) (8) 371 362
--------------------------------------------------------------------------------------------------------------------------------
-35-
Mitsubishi Tokyo Financial Group, Inc.
(The Bank of Tokyo-Mitsubishi, Ltd.)
12. Earning Projections for the Fiscal Year Ending March 31, 2004
[Consolidated]
(in billions of yen)
----------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2004 March 31, 2003
----------------------------------------------------------------------------
Ordinary income 2,300.0 2,186.1
----------------------------------------------------------------------------
Ordinary Profit (loss) 300.0 (272.6)
----------------------------------------------------------------------------
Net income (loss) 155.0 (138.1)
----------------------------------------------------------------------------
[Non-consolidated]
(in billions of yen)
----------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2004 March 31, 2003
----------------------------------------------------------------------------
Operating income 1,700.0 1,611.2
----------------------------------------------------------------------------
Ordinary profit (loss) 185.0 (300.0)
----------------------------------------------------------------------------
Net income (loss) 115.0 (92.1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net business profits before
provision for formula allowance
for loan losses 540.0 511.5
----------------------------------------------------------------------------
-36-
MTFG
Selected Financial Information
under Japanese GAAP
For the Fiscal Year Ended March 31, 2003
The Mitsubishi Trust and Banking Corporation
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
[Contents]
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended March 31, 2003
1. Consolidated Balance Sheets ........ 37
2. Consolidated Statements of Operations ........ 38
3. Consolidated Statement of Capital Surplus and Retained Earnings ........ 39
4. Notional principal or contract amount, market value and valuation gains (losses) on derivatives ........ 40
[Consolidated]
5. Comparison of Statement of Trust Assets and Liabilities [Trust], [Non-Consolidated] ........ 43
6. Financial Results [Consolidated], [Non-Consolidated] ........ 46
7. Average interest rate spread [Non-Consolidated] ........ 48
8. Valuation Differences on Securities [Consolidated], [Trust] ........ 48
9. Risk-Adjusted Capital Ratio Based on the Standards of the BIS [Consolidated] ........ 49
2 Loan Portfolio and Other
1. Risk-Monitored Loans [Consolidated], [Non-Consolidated], [Trust]........ 50
[Consolidated and Trust], [Non-Consolidated and Trust]
2. Allowance for Loan Losses [Consolidated], [Non-Consolidated], [Trust]........ 53
3. Coverage Ratio against Risk-Monitored Loans [Consolidated], [Non-Consolidated] ........ 53
4. Disclosed Claims under the Financial Reconstruction Law (the "FRL") [Non-Consolidated], [Trust] ........ 54
[Non-Consolidated and Trust]
5. Status of Secured Coverage on Disclosed Claims under the FRL [Non-Consolidated], [Trust] ........ 55
[Non-Consolidated and Trust]
6. Progress in the Disposal of Problem Assets [Non-Consolidated and Trust] ........ 57
7. Classification of Loans by Type of Industry [Non-Consolidated], [Trust] ........ 60
[Non-Consolidated and Trust]
8. Loans and Deposits [Non-Consolidated] ........ 63
9. Domestic Deposits [Non-Consolidated] ........ 63
10. Number of Employees [Non-Consolidated] ........ 63
11. Number of Offices [Non-Consolidated] ........ 63
12. Earning Projections for the Fiscal Year ending March 31, 2004 [Consolidated], [Non-Consolidated] ........ 64
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
1 Financial Highlights under Japanese GAAP for the Fiscal Year Ended March
31, 2003
(Japanese GAAP)
1. Consolidated Balance Sheets
--------------------------------------------------------------------------------------------------------------------------------
As of March 31, Increase/
2003(A) 2002(B) (Decrease)
(in millions of yen) (A) - (B)
--------------------------------------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks 1,333,630 1,023,093 310,536
Call loans and bills bought 256,132 300,000 (43,867)
Receivables under securities borrowing transactions 1,535,155 - 1,535,155
Commercial paper and other debt purchased 16,418 9,175 7,243
Trading assets 350,573 427,000 (76,426)
Money held in trust 9,675 - 9,675
Investment securities 7,577,895 6,757,663 820,231
Loans and bills discounted 8,287,748 9,081,942 (794,193)
Foreign exchanges 19,228 14,256 4,971
Pledged money for securities borrowing transactions - 1,580,670 (1,580,670)
Other assets 1,143,264 1,175,019 (31,754)
Premises and equipment 184,212 186,968 (2,756)
Deferred tax assets 353,929 249,468 104,460
Deferred tax assets on land revaluation losses 1,593 4,985 (3,391)
Customers' liabilities for acceptances and guarantees 410,230 490,893 (80,663)
Allowance for loan losses (281,027) (399,978) 118,950
--------------------------------------------------------------------------------------------------------------------------------
Total assets 21,198,661 20,901,159 297,501
================================================================================================================================
Liabilities:
Deposits 10,986,946 11,250,776 (263,829)
Negotiable certificates of deposit 1,453,650 1,283,592 170,057
Call money and bills sold 1,125,546 895,608 229,938
Payables under repurchase agreements 333,746 468,757 (135,011)
Payables under securities lending transactions 2,601,972 - 2,601,972
Commercial paper 451,000 460,000 (9,000)
Trading liabilities 125,897 109,665 16,232
Borrowed money 220,247 240,958 (20,711)
Foreign exchanges 20,280 23,359 (3,079)
Bonds and notes 358,600 354,600 4,000
Due to trust account 1,401,617 2,282,224 (880,607)
Pledged money for securities lending transactions - 1,251,772 (1,251,772)
Other liabilities 1,000,431 1,020,331 (19,900)
Reserve for employees' bonuses 4,418 4,042 376
Reserve for employees' retirement benefits 9,261 13,157 (3,896)
Reserve for losses on real estate-collateralized loans sold - 342 (342)
Reserve for expenses related to EXPO 2005 Japan 19 - 19
Deferred tax liabilities 51 68 (16)
Deferred tax liabilities on land revaluation excess 196 190 6
Acceptances and guarantees 410,230 490,893 (80,663)
--------------------------------------------------------------------------------------------------------------------------------
Total liabilities 20,504,115 20,150,342 353,772
--------------------------------------------------------------------------------------------------------------------------------
Minority interest 2,951 4,129 (1,178)
--------------------------------------------------------------------------------------------------------------------------------
Shareholder's equity:
Capital stock 324,279 305,143 19,135
Capital surplus 274,752 255,617 19,135
Retained earnings 102,888 210,676 (107,787)
Land revaluation excess (2,071) (7,700) 5,629
Unrealized gains (losses) on securities available for sale (3,228) (13,396) 10,167
Foreign currency translation adjustments (5,025) (3,653) (1,371)
--------------------------------------------------------------------------------------------------------------------------------
Total shareholder's equity 691,594 746,687 (55,092)
--------------------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest
and shareholder's equity 21,198,661 20,901,159 297,501
================================================================================================================================
-37-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
2. Consolidated Statements of Operations
-------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
(in millions of yen) 2003(A) 2002(B) (A) - (B)
-------------------------------------------------------------------------------------------------------------------------
Ordinary income:
Trust fees 82,927 96,233 (13,306)
Interest income: 367,962 425,647 (57,684)
(Interest on loans and discounts) 128,412 160,143 (31,730)
(Interest and dividends on securities) 166,982 168,445 (1,463)
Fees and commissions 54,017 48,661 5,355
Trading profits 3,501 2,303 1,197
Other business income 60,104 32,264 27,839
Other ordinary income 41,098 58,960 (17,862)
-------------------------------------------------------------------------------------------------------------------------
Total ordinary income 609,611 664,072 (54,461)
-------------------------------------------------------------------------------------------------------------------------
Ordinary expenses:
Interest expense: 169,362 242,485 (73,123)
(Interest on deposits) 55,466 110,092 (54,625)
Fees and commissions 7,146 6,020 1,125
Trading losses 248 - 248
Other business expenses 54,105 49,794 4,311
General and administrative expenses 179,737 173,610 6,126
Other ordinary expenses 399,574 248,644 150,930
-------------------------------------------------------------------------------------------------------------------------
Total ordinary expenses 810,175 720,556 89,618
-------------------------------------------------------------------------------------------------------------------------
Ordinary loss (200,564) (56,484) (144,080)
-------------------------------------------------------------------------------------------------------------------------
Special gains 12,754 21,450 (8,696)
Special losses 10,412 59,459 (49,047)
-------------------------------------------------------------------------------------------------------------------------
Loss before income taxes and others (198,221) (94,492) (103,728)
-------------------------------------------------------------------------------------------------------------------------
Income taxes-current 3,989 3,688 300
Income taxes-refund 3,839 - 3,839
Income taxes-deferred (100,783) (11,072) (89,711)
Minority interest (219) 548 (768)
-------------------------------------------------------------------------------------------------------------------------
Net loss (97,369) (87,657) (9,711)
=========================================================================================================================
-38-
Mitsubishi Tokyo Financing Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
3. Consolidated Statement of Capital Surplus and Retained Earnings
-----------------------------------------------------------------------------------------------------
For the year ended
(in millions of yen) March 31, 2003
-----------------------------------------------------------------------------------------------------
Balance of capital surplus at beginning of fiscal year 255,617
Increase: 19,135
Issuance of common stock due to capital increase 19,135
-----------------------------------------------------------------------------------------------------
Balance of capital surplus at end of fiscal year 274,752
-----------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 210,676
Decrease: (107,787)
Net loss (97,369)
Cash dividends (4,683)
Reduction in land revaluation excess (5,551)
Decrease in companies accounted for by the equity method (184)
-----------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 102,888
=====================================================================================================
Consolidated Statement of Retained Earnings
-----------------------------------------------------------------------------------------------------
For the year ended
(in millions of yen) March 31, 2002
-----------------------------------------------------------------------------------------------------
Balance of retained earnings at beginning of fiscal year 312,190
Increase: 5,657
Increase due to merger 5,271
Increase in companies accounted for by the equity method 385
Decrease: (19,513)
Cash dividends (19,513)
Net loss (87,657)
-----------------------------------------------------------------------------------------------------
Balance of retained earnings at end of fiscal year 210,676
=====================================================================================================
-39-
Mitsubishi Tokyo Financial Group Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
4. Notional principal or contract amount, market value and valuation
gains (losses) on derivatives
a. Interest rate-related transactions
(in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
----------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains
or contract amount of over 1 year (losses)
-----------------------------------------------------------------------------------------------------------------------------
Exchange-traded
-----------------------------------------------------------------------------------------------------------------------------
sell - - - -
Futures --------------------------------------------------------------------------------------------------------
buy 4,741 4,058 38 38
-------------------------------------------------------------------------------------------------------------------------
sell - - - -
Options --------------------------------------------------------------------------------------------------------
buy 2,914 - 0 (2)
-----------------------------------------------------------------------------------------------------------------------------
Over-the-counter
-----------------------------------------------------------------------------------------------------------------------------
receive-fix/pay-floater 2,740,596 1,516,029 160,295 160,295
--------------------------------------------------------------------------------------------------------
Swaps receive-floater/pay-fix 2,728,185 1,525,830 (162,073) (162,073)
--------------------------------------------------------------------------------------------------------
receive-floater/pay-floater 18,330 18,330 (12) (12)
-------------------------------------------------------------------------------------------------------------------------
sell 162,677 148,431 (258) (232)
Caps/Floors --------------------------------------------------------------------------------------------------------
buy 152,954 136,798 231 191
-------------------------------------------------------------------------------------------------------------------------
sell 150,821 23,760 (120) 384
Others --------------------------------------------------------------------------------------------------------
buy 158,669 27,519 132 (207)
-----------------------------------------------------------------------------------------------------------------------------
Total (1,767) (1,620)
-----------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains (losses) are recognized in the consolidated
statement of operations. Derivatives which qualify for
hedge-accounting are not included in the above table.
2. Market values of exchange-traded transactions are based on
closing prices on the Tokyo International Financial Futures
Exchange, etc. Market values of over-the-counter transactions
are based on discounted cash flow method, option pricing
models, etc.
b. Foreign exchange-related transactions
(in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
----------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains
or contract amount of over 1 year (losses)
-----------------------------------------------------------------------------------------------------------------------------
Over-the-counter
-----------------------------------------------------------------------------------------------------------------------------
Swaps 119,876 78,163 65 65
-----------------------------------------------------------------------------------------------------------------------------
Total 65 65
-----------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains are recognized in the consolidated statement
of operations. Derivatives which qualify for hedge-accounting
and/or which are applicable to notes 3. are not included in
the above table.
2. Market values of over-the-counter transactions are based on
discounted cash flow method.
3. Currency swaps which are accounted for by an accrual basis
are not included in the above table. Notional principal
amount, market value and valuation gains of currency swaps
which are accounted for by an accrual basis are as follows:
(in millions of yen)
----------------------------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------
Notional principal amount Market value Valuation gains (losses)
----------------------------------------------------------------------------------------------------------
Swaps 2,970,237 (315) (315)
----------------------------------------------------------------------------------------------------------
Other foreign exchange-related transactions such as forward
exchange contracts and currency options, which valuation gains
(losses) had been recognized in the consolidated statement of
operations, are not included in the above table.
Notional principal or contract amounts of those foreign
exchange-related transactions are as follows:
----------------------------------------------------------------------------------
As of March 31, 2003
---------------------------------------------
Notional principal or contract amount
----------------------------------------------------------------------------------
Over-the-counter
----------------------------------------------------------------------------------
sell 2,323,309
Forward contracts ----------------------------------------------------------
buy 3,370,153
----------------------------------------------------------------------------------
sell 66,090
Options ----------------------------------------------------------
buy 73,378
----------------------------------------------------------------------------------
-40-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
c. Equity-related transactions : N/A
d. Bond-related transactions
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
------------------------------------------------------------------------------------
Notional principal with maturity Market value Valuation gains
or contract amount of over 1 year (losses)
------------------------------------------------------------------------------------------------------------------------------
Exchange-traded
--------------------------------------------------------------------------------------------------------------------------
sell 13,987 - (32) (32)
Futures ------------------------------------------------------------------------------------------------------
buy - - - -
------------------------------------------------------------------------------------------------------------------------------
Total (32) (32)
------------------------------------------------------------------------------------------------------------------------------
Notes: 1. Valuation gains (losses) are recognized in the consolidated
statement of operations. Derivatives which qualify for
hedge-accounting are not included in the above table.
2. Market values of exchange-traded transactions are based on
closing prices on the Tokyo Stock Exchange, etc. Market values
of over-the-counter transactions are based on option pricing
models, etc.
e. Commodity-related transactions : N/A
f. Credit derivatives : N/A
-41-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(Japanese GAAP)
(Reference)
Derivatives qualified for hedge-accounting
(in billions of yen)
-----------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003
-------------------------------------------------------------------------------------------
Notional principal Deferred hedge Deferred hedge Deferred hedge
or contract amount Market value profit loss profit and loss
-----------------------------------------------------------------------------------------------------------------------------
Interest Rate futures 215.4 0.1 0.7 0.5 0.1
-----------------------------------------------------------------------------------------------------------------------------
Interest Rate Swaps 21,694.0 70.3 313.3 284.0 29.3
-----------------------------------------------------------------------------------------------------------------------------
Others 226.2 (0.0) 0.5 0.2 0.2
(interest rate-related transactions)
-----------------------------------------------------------------------------------------------------------------------------
Others 117.1 (0.9) 0.2 1.2 (1.0)
-----------------------------------------------------------------------------------------------------------------------------
Total 69.5 314.8 286.1 28.6
-----------------------------------------------------------------------------------------------------------------------------
Notes: 1. Derivatives which qualify for hedge-accounting are included in
the above table.
2. The transactions in the table above are reported on a
mark-to-market basis on the consolidated balance sheet.
The valuation differences which do not correspond to the
income/expenses accruing on hedged items are deferred
assets/liabilities.
Notional principal by the remaining life of the interest rate swaps
above is as follows:
(in billions of yen)
-------------------------------------------------------------------------------------------------------------
As of March 31, 2003
------------------------------------------------------------------------------
Due within 1 year Due after 1 year Due after 5 years Total
through 5 years
-------------------------------------------------------------------------------------------------------------
Receive-fix/pay-floater 5,135.6 7,908.1 91.5 13,135.3
-------------------------------------------------------------------------------------------------------------
Receive-floater/pay-fix 3,478.3 4,358.8 95.6 7,932.9
-------------------------------------------------------------------------------------------------------------
Receive-floater/pay-floater 287.0 338.0 0.7 625.7
-------------------------------------------------------------------------------------------------------------
Total 8,901.0 12,605.0 187.9 21,694.0
-------------------------------------------------------------------------------------------------------------
-42-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
5. Comparison of Statement of Trust Assets and Liabilities
(1) Comparison of Statement of Trust Assets and Liabilities
The Mitsubishi Trust and Banking Corporation
--------------------------------------------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of Yen) 2003 (A) 2002 (B) (A) - (B)
--------------------------------------------------------------------------------------------------------------------------------
Assets:
Loans and bills discounted 1,107,555 1,383,437 (275,882)
Securities 6,659,887 29,585,083 (22,925,196)
Securities held for investment trusts - 3,349,256 (3,349,256)
Foreign investments held for investment trusts - 1,048,300 (1,048,300)
Beneficiary rights 8,988,740 189,162 8,799,578
Securities held in custody accounts 3,205,694 3,431,739 (226,045)
Money claims 2,926,071 2,612,238 313,832
Premises and equipment 1,532,783 967,340 565,442
Lease rights 21,819 21,911 (92)
Other claims 973,227 1,014,480 (41,252)
Bills bought - 13,524 (13,524)
Call loans 294,567 2,279,456 (1,984,889)
Due from banking account 1,401,617 2,282,224 (880,607)
Cash and due from banks 1,484,012 2,043,534 (559,521)
--------------------------------------------------------------------------------------------------------------------------------
Total assets 28,595,978 50,221,692 (21,625,713)
================================================================================================================================
Liabilities:
Money trusts 7,989,136 17,678,364 (9,689,228)
Pension trusts 73,937 7,604,453 (7,530,515)
Property formation benefit trusts 12,174 12,675 (501)
Loan trusts 1,128,339 1,997,536 (869,197)
Investment trusts 8,758,551 5,803,288 2,955,263
Money entrusted other than money trusts 231,072 2,792,466 (2,561,393)
Securities trusts 5,689,577 5,900,215 (210,637)
Money claim trusts 3,040,282 1,900,922 1,139,360
Equipment trusts 225 345 (119)
Land and fixtures trusts 174,931 183,409 (8,478)
Other trusts 1,497,749 6,348,014 (4,850,264)
--------------------------------------------------------------------------------------------------------------------------------
Total liabilities 28,595,978 50,221,692 (21,625,713)
================================================================================================================================
Note:
Joint trust assets under the management of other
companies as of March 31, 2003 : 31,929,580 millions of yen
as of March 31, 2002 : 10,133,641 millions of yen
(Reference)
Of the joint trust assets the management of other companies mentioned above
Note, the balance at the end of the business period of fiscal 2002 includes
the trust assets of 22,289,006 millions of yen which were entrusted to The
Mitsubishi Trust and Banking Corporation and Master Trust assets of the
Service-Shared Co-Trusteeship (here in after referred to as Trust Assets
under Service-Shared Co-Trusteeship). The comparison of statement of trust
assets and liabilities which is obtained by adding up Trust Assets under
Service-Shared Co-Trusteeship is given on the next page.
-43-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
The Comparison of Statement of Trust Assets and Liabilities which is
obtained by adding up Trust Assets under Service-Shared Co-Trusteeship
--------------------------------------------------------------------------------------------------------------------------------
Increase/
As of March 31, (Decrease)
(in millions of Yen) 2003 (A) 2002 (B) (A) - (B)
--------------------------------------------------------------------------------------------------------------------------------
Assets:
Loans and bills discounted 1,107,555 1,383,437 (275,882)
Securities 26,349,274 29,585,083 (3,235,809)
Securities held for investment trusts - 3,349,256 (3,349,256)
Foreign investments held for investment trusts - 1,048,300 (1,048,300)
Beneficiary rights 9,806,748 189,162 9,617,586
Securities held in custody accounts 3,206,357 3,431,739 (225,382)
Money claims 2,932,873 2,612,238 320,635
Premises and equipment 1,532,783 967,340 565,442
Lease rights 21,819 21,911 (92)
Other claims 1,344,798 1,014,480 330,317
Bills bought - 13,524 (13,524)
Call loans 1,069,204 2,279,456 (1,210,252)
Due from banking account 1,732,451 2,282,224 (549,772)
Cash and due from banks 1,706,589 2,043,534 (336,945)
--------------------------------------------------------------------------------------------------------------------------------
Total assets 50,810,455 50,221,692 588,762
================================================================================================================================
Liabilities:
Money trusts 18,867,760 17,678,364 1,189,396
Pension trusts 7,423,101 7,604,453 (181,351)
Property formation benefit trusts 12,174 12,675 (501)
Loan trusts 1,128,339 1,997,536 (869,197)
Investment trusts 8,758,551 5,803,288 2,955,263
Money entrusted other than money trusts 2,223,773 2,792,466 (568,693)
Securities trusts 5,690,240 5,900,215 (209,974)
Money claim trusts 3,040,282 1,900,922 1,139,360
Equipment trusts 225 345 (119)
Land and fixtures trusts 174,931 183,409 (8,478)
Other trusts 3,491,074 6,348,014 (2,856,940)
--------------------------------------------------------------------------------------------------------------------------------
Total liabilities 50,810,455 50,221,692 588,762
================================================================================================================================
Note:
Service-Shared Co-Trusteeship started at May, 2002, at the end of the
business period of fiscal 2001 mentioned The Mitsubishi Trust and Banking
Corporation.
-44-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(2) Supplemental Data (As of March 31, 2003)
The component items of trusts with contracts for compensating the
principal, including trusts for which the beneficiary interests are
re-entrusted for investing in trust assets, are presented below.
Money trusts (Jointly operated designated money in trust) (in millions of Yen)
---------------------------------------------------------------------------------------------------------------------
Assets: Liabilities:
Loans and bills discounted 372,091 Principal 850,217
Securities 232,328 Reserve for possible loan losses 1,002
Other 247,242 Other 442
---------------------------------------------------------------------------------------------------------------------
Total 851,663 Total 851,663
---------------------------------------------------------------------------------------------------------------------
Loan trusts
---------------------------------------------------------------------------------------------------------------------
Assets: Liabilities:
Loans and bills discounted 511,409 Principal 1,560,989
Securities 201,780 Special reserve funds 8,425
Other 861,096 Other 4,871
---------------------------------------------------------------------------------------------------------------------
Total 1,574,287 Total 1,574,287
---------------------------------------------------------------------------------------------------------------------
(3) Financial Highlights [Non-Consolidated]
-----------------------------------------------------------------------------------------------------
As of March 31, Increase/
2003 (A) 2002 (B) (Decrease)
(in millions of Yen) (A) - (B)
-----------------------------------------------------------------------------------------------------
Total funds 40,028,638 39,851,231 177,406
Deposits 11,143,611 11,275,630 (132,019)
Negotiable certificates of deposit 1,453,650 1,282,570 171,079
Money trusts 18,867,760 17,678,364 1,189,396
Pension trusts 7,423,101 7,604,453 (181,351)
Property formation benefit trusts 12,174 12,675 (501)
Loan trusts 1,128,339 1,997,536 (869,197)
Loans and bills discounted 9,369,278 10,424,475 (1,055,196)
Banking account 8,261,722 9,041,037 (779,314)
Trust account 1,107,555 1,383,437 (275,882)
Investment securities 33,938,480 36,346,517 (2,408,036)
-----------------------------------------------------------------------------------------------------
Note:
The balance at the end of the business period of fiscal 2002, trust
accounts figures adding up trust assets and liabilities which were
entrusted to The Mitsubishi Trust and Banking Corporation and Master
Trust assets of the Service-Shared Co-Trusteeship.
-45-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
6. Financial Results (The Mitsubishi Trust and Banking Corporation and
Consolidated Subsidiaries)
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/ For the year ended
March 31, (Decrease) March 31,
2003 (A) (A) - (B) 2002 (B)
-----------------------------------------------------------------------------------------------------------------------------------
Gross profits 337,688 30,717 306,971
(Gross ordinary profit before trust accounts charge-offs) (345,824) (19,533) (326,290)
------------------------------------------------------------------------------------------------------------------------------
Trust fees 82,927 (13,306) 96,233
---------------------------------------------------------------------------------------------------------------------------
Credit costs for trust accounts (1) (8,136) 11,183 (19,319)
------------------------------------------------------------------------------------------------------------------------------
Net interest income 198,638 15,316 183,322
------------------------------------------------------------------------------------------------------------------------------
Net fees and commissions 46,870 4,229 42,640
------------------------------------------------------------------------------------------------------------------------------
Net trading profits 3,253 949 2,303
------------------------------------------------------------------------------------------------------------------------------
Net other business income 5,998 23,528 (17,529)
---------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on debt securities 5,799 25,220 (19,421)
--------------------------------------------------------------------------------------------------------------------------------
General and administrative expenses 169,297 1,283 168,014
--------------------------------------------------------------------------------------------------------------------------------
Net business profits before credit costs for trust accounts
and provision for formula allowance for loan losses* 176,526 18,249 158,276
--------------------------------------------------------------------------------------------------------------------------------
Provision for formula allowance for loan losses (2) (4,478) (16,627) 12,149
--------------------------------------------------------------------------------------------------------------------------------
Net business profits** 172,869 46,061 126,807
--------------------------------------------------------------------------------------------------------------------------------
Net non-recurring losses (373,433) (190,141) (183,291)
------------------------------------------------------------------------------------------------------------------------------
Credit related costs (3) (142,459) 12,425 (154,884)
---------------------------------------------------------------------------------------------------------------------------
Losses on loan charge-offs (45,331) 2,273 (47,605)
---------------------------------------------------------------------------------------------------------------------------
Provision for specific allowance for loan losses (77,937) 1,100 (79,038)
---------------------------------------------------------------------------------------------------------------------------
Losses on sales of loans to the Resolution and Collection Corporation (2,232) 23 (2,256)
---------------------------------------------------------------------------------------------------------------------------
Other credit related costs (16,956) 9,027 (25,984)
------------------------------------------------------------------------------------------------------------------------------
Net losses on equity securities (220,253) (200,576) (19,677)
---------------------------------------------------------------------------------------------------------------------------
Gains on sales of equity securities 26,534 (25,394) 51,928
---------------------------------------------------------------------------------------------------------------------------
Losses on sales of equity securities (151,982) (118,252) (33,730)
---------------------------------------------------------------------------------------------------------------------------
Losses on write down of equity securities (94,804) (56,929) (37,875)
------------------------------------------------------------------------------------------------------------------------------
Equity in loss of affiliates (1,335) (374) (960)
------------------------------------------------------------------------------------------------------------------------------
Other (9,385) (1,615) (7,769)
--------------------------------------------------------------------------------------------------------------------------------
Ordinary loss (200,564) (144,080) (56,484)
--------------------------------------------------------------------------------------------------------------------------------
Net special gains 2,342 40,351 (38,008)
--------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes and others (198,221) (103,728) (94,492)
--------------------------------------------------------------------------------------------------------------------------------
Income taxes-current 3,989 300 3,688
--------------------------------------------------------------------------------------------------------------------------------
Income taxes-refund 3,839 3,839 -
--------------------------------------------------------------------------------------------------------------------------------
Income taxes-deferred (100,783) (89,711) (11,072)
--------------------------------------------------------------------------------------------------------------------------------
Minority interest (219) (768) 548
--------------------------------------------------------------------------------------------------------------------------------
Net loss (97,369) (9,711) (87,657)
--------------------------------------------------------------------------------------------------------------------------------
Notes:
* Net business profit before credit costs for trust accounts and provision
for formula allowance for loan losses = Consolidated net business profit +
credit costs for trust accounts + provision for formula allowance for loan
losses
** Net business profits = Net business profits of The Mitsubishi Trust and
Banking Corporation + Other consolidated entities' gross profits - Other
consolidated entities' general and administrative expenses - Other
consolidated entities' provision for formula allowance for loan losses -
Intercompany transactions.
(Reference)
------------------------------------------------------------------------------------------------------------------------------
Total credit costs (1)+(2)+(3) 146,116 (40,236) 186,353
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Number of consolidated subsidiaries 30 (1) 31
------------------------------------------------------------------------------------------------------------------------------
Number of affiliated companies accounted for by the equity method 13 (2) 15
------------------------------------------------------------------------------------------------------------------------------
-46-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
Financial Results (The Mitsubishi Trust and Banking Corporation)
(in millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/ For the year ended
March 31, (Decrease) March 31,
2003 (A) (A) - (B) 2002 (B)
--------------------------------------------------------------------------------------------------------------------------------
Gross profits 326,489 29,816 296,672
(Gross ordinary profit before trust accounts charge-offs)* (334,625) (18,633) (315,992)
------------------------------------------------------------------------------------------------------------------------------
Trust fees 82,927 (13,306) 96,233
----------------------------------------------------------------------------------------------------------------------------
Trust fees before trust accounts charge-offs* 91,063 (24,490) 115,553
----------------------------------------------------------------------------------------------------------------------------
Loan trusts and money trusts fees (Jointly operated designated 48,815 (12,673) 61,488
money trusts before trust accounts charge-offs)*
--------------------------------------------------------------------------------------------------------------------------
Other trust fees 42,247 (11,817) 54,064
----------------------------------------------------------------------------------------------------------------------------
Credit costs for trust accounts** (1) (8,136) 11,183 (19,319)
----------------------------------------------------------------------------------------------------------------------------
Losses on loan charge-offs (5,740) 5,473 (11,213)
--------------------------------------------------------------------------------------------------------------------------
Losses on real estate-collateralized loans sold to the CCPC*** (2,010) 5,431 (7,441)
--------------------------------------------------------------------------------------------------------------------------
Other losses incurred from sales of loans (385) 279 (664)
------------------------------------------------------------------------------------------------------------------------------
Net interest income 194,193 14,703 179,489
------------------------------------------------------------------------------------------------------------------------------
Net fees and commissions 38,155 2,491 35,663
------------------------------------------------------------------------------------------------------------------------------
Net trading profits 1,699 893 806
------------------------------------------------------------------------------------------------------------------------------
Net other business income 9,514 25,034 (15,519)
------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on debt securities 5,799 25,182 (19,383)
--------------------------------------------------------------------------------------------------------------------------------
General and administrative expenses 156,212 (3,537) 159,750
--------------------------------------------------------------------------------------------------------------------------------
Personnel expenses 71,059 2,728 68,331
------------------------------------------------------------------------------------------------------------------------------
Non-personnel expenses 80,825 (4,609) 85,435
------------------------------------------------------------------------------------------------------------------------------
Taxes 4,327 (1,656) 5,983
--------------------------------------------------------------------------------------------------------------------------------
Net business profits before credit costs for trust accounts
and provision for formula allowance for loan losses* 178,412 22,170 156,242
--------------------------------------------------------------------------------------------------------------------------------
Provision for formula allowance for loan losses (2) (3,524) (15,088) 11,563
--------------------------------------------------------------------------------------------------------------------------------
Net business profits 173,801 48,442 125,358
--------------------------------------------------------------------------------------------------------------------------------
Net non-recurring losses (378,320) (198,581) (179,739)
------------------------------------------------------------------------------------------------------------------------------
Credit related costs (3) (140,276) 10,403 (150,680)
----------------------------------------------------------------------------------------------------------------------------
Losses on loan charge-offs (44,582) 2,194 (46,777)
----------------------------------------------------------------------------------------------------------------------------
Provision for specific allowance for loan losses (76,731) (973) (75,758)
----------------------------------------------------------------------------------------------------------------------------
Losses on real estate-collateralized loans sold to the CCPC*** (193) 2,365 (2,559)
----------------------------------------------------------------------------------------------------------------------------
Provision for allowance for loans to specific foreign borrowers 853 (1,625) 2,479
----------------------------------------------------------------------------------------------------------------------------
Other credit related costs (19,622) 8,442 (28,064)
------------------------------------------------------------------------------------------------------------------------------
Net losses on equity securities (222,054) (202,405) (19,648)
----------------------------------------------------------------------------------------------------------------------------
Gains on sales of equity securities 26,477 (25,480) 51,957
----------------------------------------------------------------------------------------------------------------------------
Losses on sales of equity securities (151,898) (118,167) (33,730)
----------------------------------------------------------------------------------------------------------------------------
Losses on write down of equity securities (96,633) (58,757) (37,875)
------------------------------------------------------------------------------------------------------------------------------
Others (15,989) (6,579) (9,410)
--------------------------------------------------------------------------------------------------------------------------------
Ordinary loss (204,519) (150,138) (54,380)
--------------------------------------------------------------------------------------------------------------------------------
Net special gains 6,560 (5,884) 12,444
------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on sale of premises and equipment (1,943) (5,022) 3,078
------------------------------------------------------------------------------------------------------------------------------
Gain on loans charged-off 7,754 (8,412) 16,166
------------------------------------------------------------------------------------------------------------------------------
Expenses for retirement benefits (5,141) 123 (5,264)
------------------------------------------------------------------------------------------------------------------------------
Gains on sales of software 7,065 7,065 -
------------------------------------------------------------------------------------------------------------------------------
Net losses on retirement benefits trust foundation (1,174) (1,174) -
--------------------------------------------------------------------------------------------------------------------------------
Loss before income taxes and others (197,958) (156,022) (41,936)
--------------------------------------------------------------------------------------------------------------------------------
Income taxes-current 2,121 (4) 2,126
--------------------------------------------------------------------------------------------------------------------------------
Income taxes refund 3,459 3,459 -
--------------------------------------------------------------------------------------------------------------------------------
Income taxes-deferred (101,293) (89,921) (11,371)
--------------------------------------------------------------------------------------------------------------------------------
Net loss (95,327) (62,636) (32,691)
--------------------------------------------------------------------------------------------------------------------------------
Notes:
* Amounts before credit costs for loans in trusts with contracts for
compensating the principal
** Credit costs for loans in trusts with contracts for compensating the
principal
*** CCPC stands for the Cooperative Credit Purchasing Company, Limited.
(Reference)
--------------------------------------------------------------------------------------------------------------------------------
Total credit costs (1)+(2)+(3) 144,888 (36,675) 181,563
--------------------------------------------------------------------------------------------------------------------------------
-47-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
7. Average interest rate spread
[Non-Consolidated] (percentage per annum)
------------------------------------------------------------------------------------------------------------------------------------
For the year ended Increase/
March 31, (Decrease)
--------------------------------------
2003 (A) 2002 (B) (A) - (B)
------------------------------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 1.93 2.53 (0.59)
------------------------------------------------------------------------------------------------------------------------------------
Average interest rate on Loans and bills discounted 1.42 1.73 (0.31)
--------------------------------------------------------------------------------------------------------------------------------
Average interest rate on Investment securities 2.34 2.52 (0.18)
------------------------------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-bearing liabilities (b) 0.86 1.46 (0.59)
------------------------------------------------------------------------------------------------------------------------------------
Average interest rate on Deposits 0.47 0.95 (0.48)
------------------------------------------------------------------------------------------------------------------------------------
Total average interest rate spread (a)-(b) 1.07 1.06 0.00
------------------------------------------------------------------------------------------------------------------------------------
Average interest rate spread in domestic business segment: (percentage per annum)
------------------------------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-earning assets (a) 1.03 1.13 (0.10)
--------------------------------------------------------------------------------------------------------------------------------
Average interest rate on Loans and bills discounted 1.18 1.21 (0.02)
--------------------------------------------------------------------------------------------------------------------------------
Average interest rate on Investment securities 0.99 1.14 (0.15)
------------------------------------------------------------------------------------------------------------------------------------
Total average interest rate on interest-bearing liabilities (b) 0.26 0.40 (0.14)
--------------------------------------------------------------------------------------------------------------------------------
Average interest rate on Deposits 0.19 0.31 (0.11)
------------------------------------------------------------------------------------------------------------------------------------
Total average interest rate spread (a)-(b) 0.77 0.72 0.04
------------------------------------------------------------------------------------------------------------------------------------
8. Valuation Differences on Securities
(1) Valuation method of securities
------------------------------------------------------------------------------------------------------------------------------------
Trading securities Market value (valuation differences are recorded as profits or loses)
------------------------------------------------------------------------------------------------------------------------------------
Debt securities being held to maturity Amortized cost
------------------------------------------------------------------------------------------------------------------------------------
Securities available for sale Market value (valuation differences are included in shareholders' equity, net of income
taxes)
------------------------------------------------------------------------------------------------------------------------------------
(Reference) Securities in money held in trust
------------------------------------------------------------------------------------------------------------------------------------
Trading purposes Market value (valuation differences are recorded as profits or loses)
------------------------------------------------------------------------------------------------------------------------------------
(2) Valuation differences
[Consolidated]
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------
As of March 31, 2003 As of March 31, 2002
------------------------------------------------------------------------------
Valuation difference Valuation difference
------------------------------------------------------------------------------
Gains Losses Gains Losses
(A) (A) - (B) (B)
------------------------------------------------------------------------------------------------------------------------
Debt securities being held to maturity 14,019 1,916 14,019 - 12,102 12,251 148
----------------------------------------------------------------------------------------------------------------------
Securities available for sale (2,731) 10,222 207,233 209,964 (12,953) 215,075 228,028
----------------------------------------------------------------------------------------------------------------------
Domestic equity securities (143,879) (82,338) 20,982 164,862 (61,540) 118,943 180,484
--------------------------------------------------------------------------------------------------------------------
Domestic bonds 56,711 15,994 56,922 210 40,717 41,607 889
--------------------------------------------------------------------------------------------------------------------
Other 84,436 76,567 129,328 44,891 7,869 54,524 46,655
----------------------------------------------------------------------------------------------------------------------
Total 11,288 12,139 221,252 209,964 (850) 227,326 228,177
--------------------------------------------------------------------------------------------------------------------
Domestic equity securities (143,879) (82,338) 20,982 164,862 (61,540) 118,943 180,484
--------------------------------------------------------------------------------------------------------------------
Domestic bonds 68,138 18,548 68,349 210 49,590 50,563 972
--------------------------------------------------------------------------------------------------------------------
Other 87,029 75,929 131,920 44,891 11,099 57,820 46,720
------------------------------------------------------------------------------------------------------------------------
-48-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(3) Market Value Information for Securities in Trusts with Contracts for
Compensating the Principal
Money Trusts (jointly operated designated money in trust)
A. Market Value of Securities (in millions of yen)
-----------------------------------------------------------------------------------------------
Trust Assets
at period end Market Value Valuation Gains
-----------------------------------------------------------------------------------------------
March 31, 2003 232,328 238,931 6,602
-----------------------------------------------------------------------------------------------
Note: A fair value is given where a fair value can be calculated for a
market-value equivalent.
B. Valuation Gains of Derivative Transaction: 1,637 millions of yen
Loan Trusts
A. Market Value of Securities (in millions of yen)
-----------------------------------------------------------------------------------------------
Trust Assets
at period end Market Value Valuation Gains
-----------------------------------------------------------------------------------------------
March 31, 2003 201,780 226,131 24,350
-----------------------------------------------------------------------------------------------
Note: A fair value is given where a fair value can be calculated for a
market-value equivalent.
B. Valuation Gains of Derivative Transaction: 12,648 millions of yen
9. Risk-Adjusted Capital Ratio Based on the Standards of the BIS
(in billions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
(Preliminary basis)
------------------------------------------------------------------------------------------------------------------------------
(1) Risk-adjusted capital ratio 12.00% 1.17% 0.55% 10.83% 11.44%
(2) Tier I capital 686.7 (67.1) (43.6) 753.8 730.4
(3) Tier II capital includable as
qualifying capital 556.5 (23.2) (4.7) 579.7 561.2
(i) The amount of unrealized gains
on investment securities,
includable as qualifying capital -- -- (6.3) -- 6.3
(ii) The amount of land revaluation
excess includable as qualifying
capital (1.5) 4.0 4.0 (5.6) (5.6)
(iii) Subordinated debt 431.0 (12.6) 10.9 443.6 420.0
(4) Deductions from total qualifying
capital 5.9 (18.3) 1.4 24.3 4.5
(5) Total qualifying capital
(2)+(3)-(4) 1,237.2 (71.9) (49.8) 1,309.2 1,287.1
(6) Risk-adjusted assets 10,307.2 (1,778.0) (934.7) 12,085.2 11,242.0
---------------------------------------------------------------------------------------------------------------------------
-49-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
2 Loan Portfolio and Other
1. Risk-Monitored Loans
(Nonaccrual loans, accruing loans contractually past due 3 months or more
and restructured loans)
[Consolidated]
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 42,807 8,429 14,158 34,377 28,649
---------------------------------------------------------------------------------------------------------------------------
Past due loans 284,864 (220,954) (135,760) 505,818 420,624
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 2,314 (2,940) 1,951 5,254 362
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 266,948 (75,748) (108,331) 342,696 375,280
---------------------------------------------------------------------------------------------------------------------------
Total 596,934 (291,213) (227,982) 888,147 824,916
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 8,287,748 (794,193) (534,815) 9,081,942 8,822,563
------------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
---------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.51% 0.13% 0.19% 0.37% 0.32%
---------------------------------------------------------------------------------------------------------------------------
Past due loans 3.43% (2.13)% (1.33)% 5.56% 4.76%
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 0.02% (0.02)% 0.02% 0.05% 0.00%
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 3.22% (0.55)% (1.03)% 3.77% 4.25%
---------------------------------------------------------------------------------------------------------------------------
Total 7.20% (2.57)% (2.14)% 9.77% 9.35%
---------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated]
(in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 36,984 7,620 13,208 29,364 23,775
---------------------------------------------------------------------------------------------------------------------------
Past due loans 290,861 (215,099) (125,351) 505,961 416,212
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 2,314 (2,940) 1,951 5,254 362
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 267,259 (74,827) (108,011) 342,086 375,271
---------------------------------------------------------------------------------------------------------------------------
Total 597,420 (285,246) (218,202) 882,666 815,622
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 8,261,722 (779,314) (530,754) 9,041,037 8,792,477
------------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
---------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.44% 0.12% 0.17% 0.32% 0.27%
---------------------------------------------------------------------------------------------------------------------------
Past due loans 3.52% (2.07)% (1.21)% 5.59% 4.73%
---------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 0.02% (0.03)% 0.02% 0.05% 0.00%
---------------------------------------------------------------------------------------------------------------------------
Restructured loans 3.23% (0.54)% (1.03)% 3.78% 4.26%
---------------------------------------------------------------------------------------------------------------------------
Total 7.23% (2.53)% (2.04)% 9.76% 9.27%
---------------------------------------------------------------------------------------------------------------------------
-50-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
[Trust accounts: Loans in Trusts with Contracts for Compensating the Principal] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 4,369 (4,049) (5,759) 8,419 10,129
-------------------------------------------------------------------------------------------------------------------------
Past due loans 2,220 (9,795) (4,224) 12,016 6,445
-------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 919 (180) (122) 1,100 1,041
-------------------------------------------------------------------------------------------------------------------------
Restructured loans 33,655 (10,582) (7,378) 44,237 41,033
-------------------------------------------------------------------------------------------------------------------------
Total 41,165 (24,607) (17,485) 65,773 58,650
-------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 883,501 (240,168) (85,366) 1,123,669 968,867
----------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.49% (0.25)% (0.55)% 0.74% 1.04%
-------------------------------------------------------------------------------------------------------------------------
Past due loans 0.25% (0.81)% (0.41)% 1.06% 0.66%
-------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 0.10% 0.00% (0.00)% 0.09% 0.10%
-------------------------------------------------------------------------------------------------------------------------
Restructured loans 3.80% (0.12)% (0.42)% 3.93% 4.23%
-------------------------------------------------------------------------------------------------------------------------
Total 4.65% (1.19)% (1.39)% 5.85% 6.05%
-------------------------------------------------------------------------------------------------------------------------
[Banking: Non-Consolidated and Trust Accounts] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 41,354 3,570 7,449 37,783 33,905
-------------------------------------------------------------------------------------------------------------------------
Past due loans 293,082 (224,894) (129,575) 517,977 422,658
-------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 3,233 (3,120) 1,828 6,354 1,404
-------------------------------------------------------------------------------------------------------------------------
Restructured loans 300,915 (85,409) (115,389) 386,324 416,304
-------------------------------------------------------------------------------------------------------------------------
Total 638,585 (309,854) (235,687) 948,439 874,273
-------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 9,145,224 (1,019,482) (616,120) 10,164,706 9,761,345
----------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.45% 0.08% 0.10% 0.37% 0.34%
-------------------------------------------------------------------------------------------------------------------------
Past due loans 3.20% (1.89)% (1.12)% 5.09% 4.32%
-------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 0.03% (0.02)% 0.02% 0.06% 0.01%
-------------------------------------------------------------------------------------------------------------------------
Restructured loans 3.29% (0.51)% (0.97)% 3.80% 4.26%
-------------------------------------------------------------------------------------------------------------------------
Total 6.98% (2.34)% (1.97)% 9.33% 8.95%
-------------------------------------------------------------------------------------------------------------------------
[Banking: Consolidated and Trust Accounts] (in millions of yen)
----------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 47,176 4,379 8,398 42,796 38,778
-------------------------------------------------------------------------------------------------------------------------
Past due loans 287,085 (230,749) (139,984) 517,834 427,070
-------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 3,233 (3,120) 1,828 6,354 1,404
-------------------------------------------------------------------------------------------------------------------------
Restructured loans 300,603 (86,330) (115,709) 386,934 416,313
-------------------------------------------------------------------------------------------------------------------------
Total 638,099 (315,821) (245,467) 953,920 883,566
-------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Loans and bills discounted 9,171,249 (1,034,362) (620,181) 10,205,611 9,791,431
----------------------------------------------------------------------------------------------------------------------------
Percentage of total loans and bills discounted
----------------------------------------------------------------------------------------------------------------------------
Loans to customers in bankruptcy 0.51% 0.09% 0.11% 0.41% 0.39%
-------------------------------------------------------------------------------------------------------------------------
Past due loans 3.13% (1.94)% (1.23)% 5.07% 4.36%
-------------------------------------------------------------------------------------------------------------------------
Accruing loans contractually
past due 3 months or more 0.03% (0.02)% 0.02% 0.06% 0.01%
-------------------------------------------------------------------------------------------------------------------------
Restructured loans 3.27% (0.51)% (0.97)% 3.79% 4.25%
-------------------------------------------------------------------------------------------------------------------------
Total 6.95% (2.38)% (2.06)% 9.34% 9.02%
-------------------------------------------------------------------------------------------------------------------------
-51-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
Classification of risk-monitored Loans
Classification by geographic area
[Banking:Consolidated and Trust Accounts] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------------
Domestic* 568,137 (359,543) (261,878) 927,681 830,015
---------------------------------------------------------------------------------------------------------------------------------
Overseas* 69,961 43,722 16,410 26,239 53,551
----------------------------------------------------------------------------------------------------------------------------
Asia 9,956 (867) (2,467) 10,823 12,423
-----------------------------------------------------------------------------------------------------------------------
Indonesia 1,916 (4,034) (4,516) 5,951 6,433
Thailand 2,716 27 (525) 2,688 3,241
Hong Kong 3,474 3,371 3,474 103 -
Other 1,848 (231) (900) 2,080 2,748
----------------------------------------------------------------------------------------------------------------------------
United States of America 36,931 24,493 11,694 12,437 25,236
Other 23,074 20,096 7,183 2,978 15,890
---------------------------------------------------------------------------------------------------------------------------------
Total 638,099 (315,821) (245,467) 953,920 883,566
---------------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
Classification by type of industry of borrowers
[Banking:Consolidated and Trust Accounts] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------------
Domestic* 568,137 (359,543) (261,878) 927,681 830,015
----------------------------------------------------------------------------------------------------------------------------
Manufacturing 104,842 13,013 (4,011) 91,828 108,854
Construction 140,157 (19,715) (13,138) 159,872 153,295
Wholesale and Retail 78,774 28,436 5,382 50,337 73,391
Banks and other financial institutions 7,855 (16,737) (16,440) 24,592 24,295
Real estate 86,094 (311,952) (202,897) 398,047 288,991
Services 77,774 (47,100) (27,662) 124,874 105,436
Other industries 51,288 360 (887) 50,927 52,175
Consumer 21,351 (5,848) (2,223) 27,200 23,575
---------------------------------------------------------------------------------------------------------------------------------
Overseas* 69,961 43,722 16,410 26,239 53,551
----------------------------------------------------------------------------------------------------------------------------
Banks and other financial institutions - (5,461) - 5,461 -
Commercial and industrial 55,602 35,116 47,178 20,485 8,423
Other 14,359 14,067 (30,767) 292 45,127
---------------------------------------------------------------------------------------------------------------------------------
Total 638,099 (315,821) (245,467) 953,920 883,566
---------------------------------------------------------------------------------------------------------------------------------
Note:* "Domestic" and "Overseas" are classified by domicile of borrowers.
-52-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
2. Allowance for Loan Losses
[Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 281,027 (118,950) (94,706) 399,978 375,733
---------------------------------------------------------------------------------------------------------------------------
Formula allowance for loan losses 141,442 (4,535) (20,422) 145,978 161,865
---------------------------------------------------------------------------------------------------------------------------
Specific allowance for loan losses 138,757 (113,561) (74,025) 252,319 212,782
---------------------------------------------------------------------------------------------------------------------------
Allowance for loans to specific foreign borrowers 827 (853) (258) 1,680 1,085
---------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Reserve for losses on real estate-
collateralized loans sold -- (342) (352) 342 352
------------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 278,996 (118,061) (91,121) 397,058 370,118
------------------------------------------------------------------------------------------------------------------------------
Formula allowance for loan losses 141,453 (3,524) (20,044) 144,978 161,497
---------------------------------------------------------------------------------------------------------------------------
Specific allowance for loan losses 136,716 (113,683) (70,818) 250,399 207,534
---------------------------------------------------------------------------------------------------------------------------
Allowance for loans to specific foreign borrowers 827 (853) (258) 1,680 1,085
---------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Reserve for financial assistance to specific
borrowers 531 93 281 437 250
------------------------------------------------------------------------------------------------------------------------------
Reserve for losses on real estate-
collateralized loans sold -- (342) (352) 342 352
------------------------------------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------
Special internal reserves 8,425 (4,678) (2,725) 13,104 11,151
------------------------------------------------------------------------------------------------------------------------------
Allowance for bad debts 1,002 109 (86) 893 1,089
------------------------------------------------------------------------------------------------------------------------------
3. Coverage Ratio against Risk-Monitored Loans
[Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (a) 281,027 (118,950) (94,706) 399,978 375,733
------------------------------------------------------------------------------------------------------------------------------
Risk-monitored loans (b) 596,934 (291,213) (227,982) 888,147 824,916
------------------------------------------------------------------------------------------------------------------------------
Coverage ratio (a)/(b) 47.07% 2.04% 1.53% 45.03% 45.54%
------------------------------------------------------------------------------------------------------------------------------
[Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses (a) 278,996 (118,061) (91,121) 397,058 370,118
------------------------------------------------------------------------------------------------------------------------------
Risk-monitored loans (b) 597,420 (285,246) (218,202) 882,666 815,622
------------------------------------------------------------------------------------------------------------------------------
Coverage ratio (a)/(b) 46.70% 1.71% 1.32% 44.98% 45.37%
------------------------------------------------------------------------------------------------------------------------------
-53-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
4. Disclosed Claims under the Financial Reconstruction Law (the "FRL")
[Banking: Non-Consolidated] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt debtors 83,148 6,868 40,031 76,279 43,117
--------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 253,034 (226,301) (140,442) 479,335 393,477
--------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 273,334 (74,062) (107,552) 347,396 380,887
--------------------------------------------------------------------------------------------------------------------------------
Total (1) 609,517 (293,494) (207,963) 903,012 817,481
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Normal claims 8,093,237 (580,428) (344,891) 8,673,665 8,438,129
--------------------------------------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt debtors 6,649 (13,806) (10,755) 20,455 17,404
--------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 6,338 (5,825) (1,511) 12,164 7,850
--------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 28,176 (4,975) (5,218) 33,152 33,395
--------------------------------------------------------------------------------------------------------------------------------
Total (1) 41,165 (24,607) (17,485) 65,773 58,650
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Normal claims 842,336 (215,560) (67,881) 1,057,896 910,217
--------------------------------------------------------------------------------------------------------------------------------
[Banking: Non-Consolidated and Trust accounts] (in millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
--------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially bankrupt debtors 89,798 (6,937) 29,276 96,735 60,521
--------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 259,373 (232,126) (141,953) 491,500 401,327
--------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 301,511 (79,037) (112,771) 380,549 414,282
--------------------------------------------------------------------------------------------------------------------------------
Total (1) 650,682 (318,102) (225,448) 968,785 876,131
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Normal claims 8,935,574 (795,988) (412,772) 9,731,562 9,348,346
--------------------------------------------------------------------------------------------------------------------------------
-54-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
5. Status of Secured Coverage on Disclosed Claims under the FRL
[Banking: Non-Consolidated] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage amount (2) 478,732 (257,074) (158,469) 735,806 637,202
---------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 172,871 (121,774) (84,082) 294,646 256,953
------------------------------------------------------------------------------------------------------------------------------
Reserve for financial support to specific borrowers 531 93 281 437 250
------------------------------------------------------------------------------------------------------------------------------
Collateral, guarantees, etc. 305,328 (135,393) (74,668) 440,722 379,997
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 78.54% (2.94)% 0.59% 81.48% 77.94%
---------------------------------------------------------------------------------------------------------------------------------
[Trust accounts] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage amount (2) 26,861 (25,352) (11,810) 52,214 38,671
---------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses - - - - -
------------------------------------------------------------------------------------------------------------------------------
Reserve for financial support to specific borrowers - - - - -
------------------------------------------------------------------------------------------------------------------------------
Collateral, guarantees, etc. 26,861 (25,352) (11,810) 52,214 38,671
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 65.25% (14.13)% (0.68)% 79.38% 65.93%
---------------------------------------------------------------------------------------------------------------------------------
[Banking: Non-Consolidated and Trust accounts] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage amount (2) 505,593 (282,427) (170,280) 788,020 675,873
---------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 172,871 (121,774) (84,082) 294,646 256,953
------------------------------------------------------------------------------------------------------------------------------
Reserve for financial support to specific borrowers 531 93 281 437 250
------------------------------------------------------------------------------------------------------------------------------
Collateral, guarantees, etc. 332,190 (160,745) (86,478) 492,936 418,669
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Secured coverage ratio (2)/(1) 77.70% (3.63)% 0.55% 81.34% 77.14%
---------------------------------------------------------------------------------------------------------------------------------
-55-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
Secured Coverage of each category of Disclosed Claims under the FRL
[Banking:Non-Consolidated] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
Allowance financial amount by Coverage ratio Coverage ratio
Category Disclosed for loan support to collateralized [(B)+(C)]/ [(B)+(C)+(D)]/
amount(A) losses(B) specific and guaranteed [(A)-(D)] (A)
borrowers(C) loans(D)
---------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and 83,148 8,501 - 74,647 100.00% 100.00%
substantially bankrupt debtors [76,279] [4,475] - [71,803] [100.00%] [100.00%]
---------------------------------------------------------------------------------------------------------------------------
Claims under high risk 253,034 118,780 - 97,433 76.33% 85.44%
[479,335] [236,368] [437] [207,142] [86.99%] [92.61%]
---------------------------------------------------------------------------------------------------------------------------
Claims under close observation 273,334 45,590 531 133,248 32.92% 65.62%
[347,396] [53,802] - [161,776] [28.98%] [62.05%]
---------------------------------------------------------------------------------------------------------------------------
Sub total (1) 609,517 172,871 531 305,328 57.00% 78.54%
[903,012] [294,646] [437] [440,722] [63.83%] [81.48%]
---------------------------------------------------------------------------------------------------------------------------
Normal claims 8,093,237
[8,673,665]
---------------------------------------------------------------------------------------------------------------------------
Total (2) 8,702,755
[9,576,677]
---------------------------------------------------------------------------------------------------------------------------
Sub total (1) / Total (2) 7.00%
[9.42%]
-------------------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2003. The lower figures with
bracket are as of March 31, 2002.
Coverage ratios for Claims under high risk and for Claims under
close observation are listed under allowance for possible loan
losses, following concurrent application of the discount cash flow
method.
[Trust accounts] (in millions of yen)
---------------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
Allowance financial amount by Coverage ratio Coverage ratio
Category Disclosed for loan support to collateralized [(B)+(C)]/ [(B)+(C)+(D)]/
amount(A) losses(B) specific and guaranteed [(A)-(D)] (A)
borrowers(C) loans(D)
---------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and 6,649 - - 6,649 100.00%
substantially bankrupt debtors [20,455] - - [20,451] [99.97%]
---------------------------------------------------------------------------------------------------------------------------
Claims under high risk 6,338 - - 5,745 90.64%
[12,164] - - [10,318] [84.81%]
---------------------------------------------------------------------------------------------------------------------------
Claims under close observation 28,176 - - 14,466 51.34%
[33,152] - - [21,445] [64.68%]
---------------------------------------------------------------------------------------------------------------------------
Sub total (1) 41,165 - - 26,861 65.25%
[65,773] - - [52,214] [79.38%]
---------------------------------------------------------------------------------------------------------------------------
Normal claims 842,336
[1,057,896]
---------------------------------------------------------------------------------------------------------------------------
Total (2) 883,501
[1,123,669]
---------------------------------------------------------------------------------------------------------------------------
Sub total (1) / Total (2) 4.65%
[5.85%]
---------------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2003. The lower figures with
bracket are as of March 31, 2002.
Allowance for possible loan losses are not booked for the trust
account, but the Bank executes the direct write-off of trust
account "Claims to bankrupt and substantial bankruptcy " and
"Claims under high risk" in accordance with standards applied to
allowance for possible loan losses in the banking account. The Bank
allocated a total of 9.4 billion yen to the special internal
reserve and allowance for bad debt in the trust account, as of
March 31, 2003.
[Banking: Non-Consolidated and Trust accounts] (in millions of yen)
-------------------------------------------------------------------------------------------------------------------------------
Reserve for Collectable
Allowance financial amount by Coverage ratio Coverage ratio
Category Disclosed for loan support to collateralized [(B)+(C)]/ [(B)+(C)+(D)]/
amount(A) losses(B) specific and guaranteed [(A)-(D)] (A)
borrowers(C) loans(D)
-------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and 89,798 8,501 - 81,297 100.00%
substantially bankrupt debtors [96,735] [4,475] - [92,255] [99.99%]
-------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 259,373 118,780 - 103,179 85.57%
[491,500] [236,368] [437] [217,460] [92.42%]
-------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 301,511 45,590 531 147,714 64.28%
[380,549] [53,802] - [183,221] [62.28%]
-------------------------------------------------------------------------------------------------------------------------------
Sub total (1) 650,682 172,871 531 332,190 77.70%
[968,785] [294,646] [437] [492,936] [81.34%]
-------------------------------------------------------------------------------------------------------------------------------
Normal claims 8,935,574
[9,731,562]
-------------------------------------------------------------------------------------------------------------------------------
Total (2) 9,586,256
[10,700,347]
-------------------------------------------------------------------------------------------------------------------------------
Sub total (1) / Total (2) 6.78%
[9.05%]
-------------------------------------------------------------------------------------------------------------------------------
Note: The upper figures are as of March 31, 2003. The lower figures with
bracket are as of March 31, 2002.
-56-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
6. Progress in the Disposal of Problem Assets [Banking and Trust accounts]
(excluding claims under close observation)
(1) Assets categorized as problem assets as of September 30, 2000 based on the FRL (in billions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of As of ------------
September 30, March 31, September 30, March 31, September 30, March 31, (b) - (a)
2000 2001 2001 2002 2002 (a) 2003 (b)
---------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 239.2 136.2 123.5 68.9 42.7 30.0 (12.7)
---------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 526.7 455.5 382.9 301.7 184.8 23.8 (161.0)
---------------------------------------------------------------------------------------------------------------------------------
Total 766.0 591.8 506.4 370.7 227.6 53.8 (173.7)
---------------------------------------------------------------------------------------------------------------------------------
(A) (B)
Progress in the disposal of problem assets (in billions of yen)
----------------------------------------------------------------
Second half of fiscal 2002
----------------------------------------------------------------------
Disposition by borrowers' liquidation 22.3
----------------------------------------------------------------------
Re-constructive disposition 0.4
----------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition 0.8
----------------------------------------------------------------------
Loan sales to secondary market 53.0
----------------------------------------------------------------------
Charge-off 30.2
----------------------------------------------------------------------
Other 66.7
----------------------------------------------------------------------
Collection of claims 30.7
-------------------------------------------------------------------
Improvements in financial status 35.9
----------------------------------------------------------------------
Total 173.7 (B)
----------------------------------------------------------------------
Above (A) includes the following figures which facilitates the final
disposal of problem loans.
(in billions of yen)
----------------------------------------------------------------------
Second half of fiscal 2002
----------------------------------------------------------------------
Legal liquidation 14.6
----------------------------------------------------------------------
Quasi-legal liquidation 0.6
----------------------------------------------------------------------
Split-off of problem loans 11.5
----------------------------------------------------------------------
Partial charge-off of smaller balance loans 4.1
----------------------------------------------------------------------
Entrust through the managed trust method to
the Resolution and Collection Corporation 22.9
----------------------------------------------------------------------
Total 53.8
----------------------------------------------------------------------
(2) Assets newly categorized as problem assets during second half of fiscal 2000 based on the FRL (in billions of yen)
---------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of
----------------
March 31, September 30, March 31, September 30, March 31, (b) - (a)
2001 2001 2002 2002 (a) 2003 (b)
---------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 11.0 5.5 4.8 2.8 9.9 7.0
---------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 133.7 117.5 91.4 76.7 6.8 (69.9)
---------------------------------------------------------------------------------------------------------------------------------
Total 144.8 123.0 96.3 79.6 16.7 (62.8)
---------------------------------------------------------------------------------------------------------------------------------
(C) (D)
Progress in the disposal of problem assets (in billions of yen)
----------------------------------------------------------------
Second half of fiscal 2002
-----------------------------------------------------------------------
Disposition by borrowers' liquidation -
-----------------------------------------------------------------------
Re-constructive disposition 3.2
-----------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition -
-----------------------------------------------------------------------
Loan sales to secondary market 0.0
-----------------------------------------------------------------------
Charge-off 58.7
-----------------------------------------------------------------------
Other 0.8
-----------------------------------------------------------------------
Collection of claims 0.8
--------------------------------------------------------------------
Improvements in financial status -
-----------------------------------------------------------------------
Total 62.8 (D)
-----------------------------------------------------------------------
Above (C) includes the following figures which facilitates the final disposal
of problem loans.
(in billions of yen)
---------------------------------------------------------------
Second half of fiscal 2002
-----------------------------------------------------------------------
Legal liquidation 2.9
-----------------------------------------------------------------------
Quasi-legal liquidation -
-----------------------------------------------------------------------
Split-off of problem loans -
-----------------------------------------------------------------------
Partial charge-off of smaller balance loans 0.6
-----------------------------------------------------------------------
Entrust through the managed trust method to
the Resolution and Collection Corporation -
-----------------------------------------------------------------------
Total 3.5
-----------------------------------------------------------------------
-57-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(3) Assets newly categorized as problem assets during first half of fiscal 2001
based on the FRL
(in billions of yen)
----------------------------------------------------------------------------------------------------------
As of As of As of As of
September 30, March 31, September 30, March 31, (b) - (a)
2001 2002 2002 (a) 2003 (b)
----------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 3.0 16.4 1.5 1.4 (0.1)
----------------------------------------------------------------------------------------------------------
Claims under high risk 80.0 30.2 21.6 6.4 (15.2)
----------------------------------------------------------------------------------------------------------
Total 83.1 46.7 23.2 7.8 (15.3)
----------------------------------------------------------------------------------------------------------
(E) (F)
Progress in the disposal of problem assets (in billions of yen)
-----------------------------------------------------------------------------
Second half of fiscal 2002
-----------------------------------------------------------------------------
Disposition by borrowers' liquidation -
-----------------------------------------------------------------------------
Re-constructive disposition 0.4
-----------------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition 4.5
-----------------------------------------------------------------------------
Loan sales to secondary market 0.0
-----------------------------------------------------------------------------
Charge-off 0.0
-----------------------------------------------------------------------------
Other 10.1
-----------------------------------------------------------------------------
Collection of claims 9.6
-------------------------------------------------------------------------
Improvements in financial status 0.5
-----------------------------------------------------------------------------
Total 15.3 (F)
-----------------------------------------------------------------------------
Above (E) includes the following figures which facilitates the final disposal of
problem loans.
(in billions of yen)
-----------------------------------------------------------------------------
Second half of fiscal 2002
-----------------------------------------------------------------------------
Legal liquidation 0.3
-----------------------------------------------------------------------------
Quasi-legal liquidation -
-----------------------------------------------------------------------------
Split-off of problem loans -
-----------------------------------------------------------------------------
Partial charge-off of smaller balance loans 1.6
-----------------------------------------------------------------------------
Entrust through the managed trust method
to the Resolution and Collection Corporation -
-----------------------------------------------------------------------------
Total 1.9
-----------------------------------------------------------------------------
(4) Assets newly categorized as problem assets during second half of fiscal 2001
based on the FRL
(in billions of yen)
-------------------------------------------------------------------------------------------------
As of As of As of
March 31, September 30, March 31, (b) - (a)
2002 2002 (a) 2003 (b)
-------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 6.3 8.9 7.5 (1.3)
-------------------------------------------------------------------------------------------------
Claims under high risk 68.0 28.4 9.5 (18.8)
-------------------------------------------------------------------------------------------------
Total 74.4 37.3 17.1 (20.2)
-------------------------------------------------------------------------------------------------
(G) (H)
Progress in the disposal of problem assets (in billions of yen)
-----------------------------------------------------------------------------
Second half of fiscal 2002
-----------------------------------------------------------------------------
Disposition by borrowers' liquidation 0.0
-----------------------------------------------------------------------------
Re-constructive disposition 0.8
-----------------------------------------------------------------------------
Improvements in financial status due to
re-constructive disposition -
-----------------------------------------------------------------------------
Loan sales to secondary market 1.3
-----------------------------------------------------------------------------
Charge-off 8.7
-----------------------------------------------------------------------------
Other 9.3
-----------------------------------------------------------------------------
Collection of claims 9.2
-------------------------------------------------------------------------
Improvements in financial status 0.0
-----------------------------------------------------------------------------
Total 20.2 (H)
-----------------------------------------------------------------------------
Above (G) includes the following figures which facilitates the final disposal of
problem loans.
(in billions of yen)
-----------------------------------------------------------------------------
Second half of fiscal 2002
-----------------------------------------------------------------------------
Legal liquidation 2.1
-----------------------------------------------------------------------------
Quasi-legal liquidation -
-----------------------------------------------------------------------------
Split-off of problem loans -
-----------------------------------------------------------------------------
Partial charge-off of smaller balance loans 2.6
-----------------------------------------------------------------------------
Entrust through the managed trust method to the
Resolution and Collection Corporation -
-----------------------------------------------------------------------------
Total 4.7
-----------------------------------------------------------------------------
-58-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(5) Assets newly categorized as problem assets during first half of fiscal 2002
based on the FRL
(in billions of yen)
--------------------------------------------------------------------------------------------------
As of As of ----------------
September 30, March 31, (b) - (a)
2002 (a) 2003 (b)
--------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 4.3 15.4 11.1
--------------------------------------------------------------------------------------------------
Claims under high risk 89.5 35.9 (53.6)
--------------------------------------------------------------------------------------------------
Total 93.9 51.3 (42.5)
--------------------------------------------------------------------------------------------------
(I) (J)
Progress in the disposal of problem assets (in billions of yen)
---------------------------------------------------------------
Second half of fiscal 2002
---------------------------------------------------------------
Disposition by borrowers' liquidation -
---------------------------------------------------------------
Re-constructive disposition 0.1
---------------------------------------------------------------
Improvements in financial status due to
re-constructive deposition 9.7
---------------------------------------------------------------
Loan sales to secondary market 2.0
---------------------------------------------------------------
Charge-off 13.2
---------------------------------------------------------------
Other 17.3
----------------------------------------------------------
Collection of claims 14.6
----------------------------------------------------------
Improvements in financial status 2.6
---------------------------------------------------------------
Total 42.5 (J)
---------------------------------------------------------------
Above (I) includes the following figures which facilitates the final disposal
of problem loans.
(in billions of yen)
------------------------------------------------------------------------------
Second half of fiscal 2002
------------------------------------------------------------------------------
Legal liquidation 15.1
------------------------------------------------------------------------------
Quasi-legal liquidation -
------------------------------------------------------------------------------
Split-off of problem loans -
------------------------------------------------------------------------------
Partial charge-off of smaller balance loans 0.9
------------------------------------------------------------------------------
Entrust through the managed trust method to the
Resolution and Collection Corporation -
------------------------------------------------------------------------------
Total 16.0
------------------------------------------------------------------------------
(6) Assets newly categorized as problem assets during second half of fiscal 2002
based on the FRL
(in billions of yen)
---------------------------------------------------------------
As of March 31, 2003
---------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 25.3
---------------------------------------------------------------
Claims under high risk 176.6
---------------------------------------------------------------
Total 202.0
---------------------------------------------------------------
Histrical trend of problem assets based on the FRL
----------------------------------------------------------------------------------------------------------------------------------
As of As of As of As of As of
September 30, March 31, September 30, March 31, September 30,
2000 2001 2001 2002 2002 (a)
----------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 239.2 147.3 132.0 96.7 60.5
----------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 526.7 589.2 580.5 491.5 401.3
----------------------------------------------------------------------------------------------------------------------------------
Total 766.0 736.6 712.6 588.2 461.8
----------------------------------------------------------------------------------------------------------------------------------
Histrical trend of problem assets based on the FRL (in billions of yen)
-------------------------------------------------------------------------------------
As of -----------------
March 31, (b) - (a)
2003 (b)
-------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 89.7 29.2
-------------------------------------------------------------------------------------
Claims under high risk 259.3 (142.0)
-------------------------------------------------------------------------------------
Total 349.1 (112.7)
-------------------------------------------------------------------------------------
-59-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
7. Classification of Loans by Type of Industry
(1) Loans by type of industry [Banking: Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans booked
at offshore markets 7,759,202 (471,637) (425,592) 8,230,839 8,184,795
------------------------------------------------------------------------------------------------------------------
Manufacturing 1,168,150 (73,567) (24,264) 1,241,717 1,192,414
Agriculture 1,547 83 173 1,464 1,374
Forestry 100 - - 100 100
Fishery 22,639 10,272 6,201 12,367 16,438
Mining 6,044 (1,231) (679) 7,275 6,723
Construction 271,847 (33,391) (22,301) 305,238 294,148
Utilities 151,750 27,330 24,359 124,420 127,391
Media and Communication 846,527 227,261 77,822 619,266 768,705
Wholesale and Retail 689,170 (149,292) (111,755) 838,462 800,925
Banks and other financial institutions 1,960,579 80,641 (145,976) 1,879,938 2,106,555
Real estate 1,032,902 (272,296) (149,942) 1,305,198 1,182,844
Services 676,374 (241,910) (176,744) 918,284 853,118
Municipal government 343,804 118,577 83,133 225,227 260,671
Other industries 587,761 (164,113) 14,378 751,874 573,383
------------------------------------------------------------------------------------------------------------------
Overseas offices and loans booked at
offshore markets 502,520 (307,676) (105,161) 810,197 607,681
------------------------------------------------------------------------------------------------------------------
Total 8,261,722 (779,314) (530,754) 9,041,037 8,792,477
------------------------------------------------------------------------------------------------------------------
(2) Domestic consumer loans [Banking: Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 265,406 25,686 26,271 239,719 239,135
------------------------------------------------------------------------------------------------------------------
Housing loans 247,515 41,223 27,056 206,292 220,458
------------------------------------------------------------------------------------------------------------------
Others 17,890 (15,536) (785) 33,427 18,676
------------------------------------------------------------------------------------------------------------------
(3) Domestic loans to small and medium-sized companies [Banking: Non-Consolidated] (in millions of yen)
------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized companies 2,719,462 (917,461) (893,551) 3,636,923 3,613,013
------------------------------------------------------------------------------------------------------------------
Percentage to total domestic loans 35.04% (9.13)% (9.09)% 44.18% 44.14%
------------------------------------------------------------------------------------------------------------------
-60-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(4) Loans by type of industry [Trust accounts] (in millions of yen)
----------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans
booked at offshore markets) 1,107,555 (275,882) (71,418) 1,383,437 1,178,974
----------------------------------------------------------------------------------------------------------------
Manufacturing 76,795 (26,700) (2,681) 103,495 79,476
Agriculture - - - - -
Forestry 30 (7) (3) 37 33
Fishery 1,572 230 615 1,342 957
Mining 129 (192) (94) 321 223
Construction 7,872 (10,062) (3,965) 17,934 11,837
Utilities 135,204 (42,325) (17,029) 177,529 152,233
Media and Communication 124,560 (47,833) (35,524) 172,393 160,084
Wholesale and Retail 17,190 (7,959) 1,921 25,149 15,269
Banks and other financial institutions 197,722 135,747 48,835 61,975 148,887
Real estate 77,800 (33,979) (11,361) 111,779 89,161
Services 52,767 (32,308) (15,228) 85,075 67,995
Municipal government 37,773 (3,571) (2,680) 41,344 40,453
Other industries 378,134 (206,922) (34,225) 585,056 412,359
----------------------------------------------------------------------------------------------------------------
Overseas offices and loans booked
at offshore markets - - - - -
----------------------------------------------------------------------------------------------------------------
Total 1,107,555 (275,882) (71,418) 1,383,437 1,178,974
----------------------------------------------------------------------------------------------------------------
(5) Domestic consumer loans [Trust accounts] (in millions of yen)
----------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 268,405 (48,207) (22,957) 316,612 291,362
-------------------------------------------------------------------------------------------------------------
Housing loans 265,050 (47,171) (22,474) 312,222 287,524
-------------------------------------------------------------------------------------------------------------
Others 3,354 (1,035) (482) 4,390 3,837
----------------------------------------------------------------------------------------------------------------
(6) Domestic loans to small and medium-sized companies [Trust accounts] (in millions of yen)
----------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
----------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized
companies 666,401 (117,204) (3,601) 783,605 670,002
----------------------------------------------------------------------------------------------------------------
Percentage to total domestic loans 60.16% 3.52% 3.33% 56.64% 56.82%
----------------------------------------------------------------------------------------------------------------
-61-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
(7) Loans by type of industry [Banking:Non-Consolidated and Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic offices (excluding loans
booked at offshore markets 8,866,758 (747,519) (497,011) 9,614,277 9,363,769
------------------------------------------------------------------------------------------------------------------------------------
Manufacturing 1,244,946 (100,267) (26,944) 1,345,213 1,271,890
Agriculture 1,547 83 173 1,464 1,374
Forestry 130 (7) (3) 137 133
Fishery 24,211 10,502 6,816 13,709 17,395
Mining 6,173 (1,424) (774) 7,597 6,947
Construction 279,720 (43,453) (26,265) 323,173 305,985
Utilities 286,955 (14,995) 7,330 301,950 279,625
Media and Communication 971,088 179,428 42,298 791,660 928,790
Wholesale and Retail 706,361 (157,252) (109,834) 863,613 816,195
Banks and other financial institutions 2,158,302 216,388 (97,141) 1,941,914 2,255,443
Real estate 1,110,703 (306,274) (161,302) 1,416,977 1,272,005
Services 729,141 (274,219) (191,973) 1,003,360 921,114
Municipal government 381,577 115,005 80,452 266,572 301,125
Other industries 965,895 (371,036) (19,848) 1,336,931 985,743
------------------------------------------------------------------------------------------------------------------------------------
Overseas offices and loans booked
at offshore markets 502,520 (307,676) (105,161) 810,197 607,681
------------------------------------------------------------------------------------------------------------------------------------
Total 9,369,278 (1,055,196) (602,172) 10,424,475 9,971,451
------------------------------------------------------------------------------------------------------------------------------------
(8) Domestic consumer loans [Banking:Non-Consolidated and Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Total domestic consumer loans 533,812 (22,520) 3,314 556,332 530,497
------------------------------------------------------------------------------------------------------------------------------------
Housing loans 512,566 (5,948) 4,582 518,514 507,983
----------------------------------------------------------------------------------------------------------------------------------
Others 21,245 (16,571) (1,268) 37,817 22,514
------------------------------------------------------------------------------------------------------------------------------------
(9) Domestic loans to small and medium-sized companies [Banking:Non-Consolidated and Trust accounts] (in millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
------------------------------------------------------------------------------------------------------------------------------------
Domestic loans to small and medium-sized
companies 3,385,863 (1,034,666) (897,152) 4,420,529 4,283,015
------------------------------------------------------------------------------------------------------------------------------------
Percentage to total domestic loans 38.18% (7.79)% (7.55)% 45.97% 45.74%
------------------------------------------------------------------------------------------------------------------------------------
-62-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
8. Loans and Deposits [Non-Consolidated]
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------------
Deposits (ending balance) 11,143,611 (132,019) (22,810) 11,275,630 11,166,422
-------------------------------------------------------------------------------------------------------------------------------
Deposits (average balance) 11,172,642 337,583 78,477 10,835,059 11,094,165
-------------------------------------------------------------------------------------------------------------------------------
Loans (ending balance) 8,261,722 (779,314) (530,754) 9,041,037 8,792,477
-------------------------------------------------------------------------------------------------------------------------------
Loans (average balance) 8,859,128 (215,459) 37,646 9,074,587 8,821,481
-------------------------------------------------------------------------------------------------------------------------------
9. Domestic Deposits [Non-Consolidated]
(in millions of yen)
-------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------------
Individuals 6,681,259 435,788 176,786 6,245,471 6,504,473
-------------------------------------------------------------------------------------------------------------------------------
Corporations and others 3,059,461 (266,012) (118,183) 3,325,474 3,177,644
-------------------------------------------------------------------------------------------------------------------------------
Domestic deposits 9,740,721 169,775 58,603 9,570,945 9,682,118
-------------------------------------------------------------------------------------------------------------------------------
Note: Amounts do not include negotiable certificates of deposit, deposits of
overseas offices and JOM accounts.
10. Number of Employees [Non-Consolidated]
-------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------------
Number of Employees 6,188 (353) (263) 6,541 6,451
-------------------------------------------------------------------------------------------------------------------------------
11. Number of Offices [Non-Consolidated]
-------------------------------------------------------------------------------------------------------------------------------
As of Increase/ Increase/ As of As of
March 31, (Decrease) (Decrease) March 31, September 30,
2003 (A) (A) - (B) (A) - (C) 2002 (B) 2002 (C)
-------------------------------------------------------------------------------------------------------------------------------
Domestic: 53 (2) (2) 55 55
----------------------------------------------------------------------------------------------------------------------------
Head office and Branches 49 (2) (2) 51 51
Sub Branches & Agencies 4 - - 4 4
-------------------------------------------------------------------------------------------------------------------------------
Overseas: 8 - - 8 8
----------------------------------------------------------------------------------------------------------------------------
Branches 5 - - 5 5
Sub - branches - - - - -
Representative offices 3 - - 3 3
-------------------------------------------------------------------------------------------------------------------------------
Total 61 (2) (2) 63 63
-------------------------------------------------------------------------------------------------------------------------------
-63-
Mitsubishi Tokyo Financial Group, Inc.
(The Mitsubishi Trust and Banking Corporation)
12. Earning Projections for the Fiscal Year Ending March 31, 2004
[Consolidated] (in billions of yen)
--------------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2004 March 31, 2003
--------------------------------------------------------------------------------
Ordinary income 580.0 609.6
--------------------------------------------------------------------------------
Ordinary income (loss) 70.0 (200.5)
--------------------------------------------------------------------------------
Net income (loss) 35.0 (97.3)
--------------------------------------------------------------------------------
[Non-Consolidated] (in billions of yen)
--------------------------------------------------------------------------------
For the year ending For the year ended
March 31, 2004 March 31, 2003
--------------------------------------------------------------------------------
Ordinary income 550.0 573.8
--------------------------------------------------------------------------------
Net business profits before
credit costs for trust accounts
and provision for formula
allowance for loan losses 160.0 178.4
--------------------------------------------------------------------------------
Ordinary income (loss) 70.0 (204.5)
--------------------------------------------------------------------------------
Net income (loss) 35.0 (95.3)
--------------------------------------------------------------------------------
-64-
MTFG
Financial Highlights of FY 2002 Results
I. Financial Highlights of
Fiscal Year 2002 Results (Japanese GAAP)
II. Progress in Addressing Key Issues
III. Consolidated Management of the Group
May 26, 2003
Mitsubishi Tokyo Financial Group, Inc.
Mitsubishi Tokyo Financial Group, Inc.
I. Financial Highlights under Japanese GAAP for the Fiscal Year Ended March 31,
2003
1. Highlights of Consolidated Statements of Operations
------------------------------------------------------
(in billions of yen except percentages)
For the year ended For the year ended
March 31, 2002 (A) March 31, 2003 (B) (B) - (A)
-----------------------------------------------------------------------------------------------------------------------------------
1 Gross profits 1,711.6 1,747.3 35.6
2 Net interest income 1,108.0 1,058.8 (49.2)
3 Trust fees 122.7 101.4 (21.3)
4 Credit costs for trust accounts (19.3) (8.1) 11.1
5 Net fees and commissions 338.3 354.7 16.3
6 [% of Net fees and commissions to Gross profits] [19.7%] [20.3%] [0.6%]
7 Net trading profits 54.5 79.9 25.3
8 Net other business income 87.8 152.4 64.6
9 Net gains on debt securities 7.8 68.2 60.3
10 [% of Net trading profits and Net other business income to
Gross profits] [8.3%] [13.2%] [4.9%]
11 General and administrative expenses 966.8 991.2 24.3
12 Mitsubishi Securities Co., Ltd. 20.7 76.5 55.7
13 Net business profits before credit costs for trust accounts and
provision for formula allowance for loan losses 764.1 764.2 0.1
14 Provision for formula allowance for loan losses 33.8 38.2 4.3
15 Net business profits 710.9 717.8 6.9
16 Net non-recurring gains (losses) (1,000.2) (1,078.1) (77.8)
17 Credit related costs (721.2) (492.3) 228.8
18 Losses on loan charge-offs (283.6) (211.0) 72.6
19 Provision for specific allowance for loan losses (346.1) (117.7) 228.3
20 Losses on sales of loans to the Resolution and Collection Corporation (6.1) (75.2) (69.1)
21 Other credit related costs (85.2) (88.3) (3.0)
22 Net gains (losses) on equity securities (224.8) (488.0) (263.1)
23 Gains on sales of equity securities 136.8 80.3 (56.5)
24 Losses on sales of equity securities (217.0) (219.6) (2.6)
25 Losses on write down of equity securities (144.6) (348.7) (204.0)
26 Other (54.1) (97.6) (43.5)
27 Foreign exchange loss on convertible bond - (43.6) (43.6)
28 Ordinary loss (289.3) (360.2) (70.9)
29 Net special gains (losses) (7.7) 19.5 27.2
30 Loss before income taxes and others (297.0) (340.7) (43.6)
31 Income taxes (163.4) (181.1) (17.6)
32 Minority interest 18.7 1.8 (16.8)
33 Net loss (152.3) (161.4) (9.1)
34 Total credit costs (4+14+17) (774.4) (538.7) 235.6
35 Net business profits after total credit costs (13-34) (10.3) 225.4 235.7
36 Risk-monitored loans at fiscal year end 4,046.6 2,569.4 (1,477.1)
Operating Results of Significant Subsidiaries for the Year Ended March 31, 2003
Net business profits
Gross profits Efficiency ratio before credit costs Net income (loss)
-----------------------------------------------------------------------------------------------------------------------------------
37 The Bank of Tokyo-Mitsubishi, Ltd. 978.0 47.69% 511.5 (92.1)
38 Mitsubishi Trust and Banking Corporation 326.4 47.84% 178.4 (95.3)
39 UnionBanCal Corporation 262.4 56.72% 113.5 63.2
- 1 -
Mitsubishi Tokyo Financial Group, Inc.
2. Highlights of Consolidated Balance Sheets
--------------------------------------------
(in billions of yen)
As of March 31, As of March 31,
2002 (A) 2003 (B) (B) - (A)
------------------------------------------------------------------------------------------------------------------------------------
1 Loans and bills discounted 49,062.7 46,950.3 (2,112.4)
2 Overseas branches 6,579.8 5,570.4 (1,009.3)
3 Overseas subsidiaries (UnionBanCal Corporation and Bank of 3,725.6 3,442.2 (283.3)
Tokyo-Mitsubishi Trust Company)
4 Domestic housing loans 6,376.0 6,941.1 565.1
5 Book value of loans sold during the fiscal year (total of the two (210.7) (486.9) (276.1)
Banks *)
6 Sold to the Resolution and Collection Corporation (the "RCC") (14.3) (234.9) (220.6)
7 [Sold to the RCC before charge-offs] [(56.9)] [(647.8)] [(590.9)]
8 Other loans sold (196.4) (251.9) (55.5)
9 Charge-offs during the fiscal year (total of the two Banks *) (271.5) (292.5) (21.0)
10 % of disclosed claims under the Financial Reconstruction Law to 8.1% 5.3% (2.8)%
total claims
11 Investment securities 23,109.7 24,158.3 1,048.6
12 Domestic equity securities 5,138.6 3,231.3 (1,907.2)
13 Japanese Government Bonds (total of the two Banks *) 9,347.6 10,591.7 1,244.1
14 Foreign bonds (total of the two Banks *) 4,590.3 6,657.5 2,067.1
15 Book value of investment securities sold during the fiscal year (total of (916.7) (1,279.6) (362.9)
the two Banks *)
16 Transferred to an exchange-traded fund (450.9) (366.1) 84.8
17 Sold in the market or by other means (465.8) (913.5) (447.7)
18 Write down during the fiscal year (total of the two Banks *) (219.1) (356.5) (137.4)
19 Deferred tax assets 1,032.1 1,362.6 330.5
20 [% of Deferred tax assets to Tier I] [32.4%] [43.5%] [11.1%]
21 Total of the two Banks * 995.2 1,372.8 377.5
22 Allowance for loan losses 757.0 532.3 (224.6)
23 Write down of investment securities 111.5 11.7 (99.8)
24 Net operating loss carryforwards 76.8 725.2 648.4
25 Other (primarily accrued severance indemnities and pension liabilities) 49.8 103.5 53.6
26 Total assets 99,496.8 99,175.3 (321.5)
27 Deposits 59,907.3 62,624.3 2,716.9
28 Total of the two Banks * 56,617.6 58,970.7 2,353.1
29 Overseas branches 7,079.4 5,943.5 (1,135.8)
30 Individuals 29,509.8 32,164.4 2,654.5
31 Corporations and others 19,325.2 19,903.8 578.5
32 Weighted average rate on domestic loans (total of the two banks *) 1.66% 1.58% (0.08)%
33 Weighted average rate on domestic deposits (total of the two banks *) 0.18% 0.09% (0.09)%
34 Spread between domestic loans and domestic deposits (total of the
two banks *) 1.48% 1.50% 0.02%
35 Total shareholders' equity 3,324.4 3,046.4 (278.0)
36 Capital stock 1,146.5 1,258.0 111.5
37 Capital surplus 834.6 932.0 97.3
38 Capital increase - 111.5 111.5
39 Retained earnings 1,189.7 962.3 (227.3)
40 Unrealized gains (losses) on securities available for sale 84.0 (223.4) (307.4)
41 Less treasury stock (105.3) (4.4) 100.9
42 BIS risk-adjusted capital ratio 10.30% 10.84% 0.53%
43 Tier I ratio 5.27% 5.68% 0.41%
44 Tier I capital 3,181.1 3,128.6 (52.4)
45 Risk-adjusted assets 60,335.8 55,049.6 (5,286.2)
* "Total of the two Banks" represents the aggregated non-consolidated figures of
The Bank of Tokyo-Mitsubishi, Ltd. and The Mitsubishi Trust and Banking
Corporation.
-2-
Mitsubishi Tokyo Financial Group, Inc
3. Disclosed Claims under the Financial Reconstruction Law ("FRL")
------------------------------------------------------------------
(1) Status of Disclosed Claim under the FRL (prompt report)
(in billions of yen, except percentage)
------------------------------------------------------------------------------------------------------------------------------------
March 31, 2002 September 30, 2002 March 31, 2003
------------------------------------------------------------------------------------------------------------------------------------
Claims to bankrupt and
substantially bankrupt debtors 419 402 226
------------------------------------------------------------------------------------------------------------------------------------
Claims under high risk 1,934 1,387 1,031
------------------------------------------------------------------------------------------------------------------------------------
Claims under close observation 1,917 1,886 1,357
------------------------------------------------------------------------------------------------------------------------------------
Disclosed Claim Ratio 8.10% 7.30% 5.30%
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
As of As of As of
March 31, 2002 September 30, 2002 March 31, 2003 Increase/(Decrease)
(A) (B) (C) (C)-(A) (C)-(B)
------------------------------------------------------------------------------------------------------------------------------------
1 Claims to bankrupt and
substantially bankrupt debtors 419.0 402.1 226.4 (192.6) (175.6)
------------------------------------------------------------------------------------------------------------------------------------
2 Claims under high risk 1,933.5 1,386.6 1,031.3 (902.1) (355.2)
------------------------------------------------------------------------------------------------------------------------------------
3 Claims under close observation 1,916.8 1,886.2 1,357.4 (559.3) (528.8)
------------------------------------------------------------------------------------------------------------------------------------
4 Total Disclosed Claims (A) 4,269.4 3,675.0 2,615.2 (1,654.2) (1,059.7)
====================================================================================================================================
5 Total Credit Exposure (B) 52,401.4 49,906.9 48,951.2 (3,450.1) (955.7)
------------------------------------------------------------------------------------------------------------------------------------
6 Disclosed Claims Ratio (A)/(B) 8.1% 7.3% 5.3% (2.8%) (2.0%)
------------------------------------------------------------------------------------------------------------------------------------
(2) Status of Non Performing Assets (prompt report)
(in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Six months Six months Six months Six months
results ending results ending results ending results ending
September 30, 2001 March 31, 2002 September 30, 2002 March 31, 2003
------------------------------------------------------------------------------------------------------------------------------------
Inflow 367 448 398 608
------------------------------------------------------------------------------------------------------------------------------------
Outflow -356 -675 -962 -1,139
------------------------------------------------------------------------------------------------------------------------------------
a. Six months results ending March 31, 2003
(in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of As of
September 30, 2002 Inflows Outflows March 31, 2003 Net increase
(A) (B) (C) (A)+(B)-(C) (B)-(C)
------------------------------------------------------------------------------------------------------------------------------------
7 Claims to bankrupt and substantially
bankrupt debtors 402.1 50.5 (226.2) 226.4 (175.6)
------------------------------------------------------------------------------------------------------------------------------------
8 Claims under high risk 1,386.6 557.6 (912.9) 1,031.3 (355.2)
------------------------------------------------------------------------------------------------------------------------------------
9 Total 1,788.7 608.1 (1,139.1) 1,257.8 (530.9)
------------------------------------------------------------------------------------------------------------------------------------
b. Six months results ending September 30, 2002
(in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of As of
March 31, 2002 Inflows Outflows September 30, 2002 Net increase
(A) (B) (C) (A)+(B)-(C) (B)-(C)
------------------------------------------------------------------------------------------------------------------------------------
10 Claims to bankrupt and
substantially bankrupt debtors 419.0 28.9 (45.9) 402.1 (16.9)
------------------------------------------------------------------------------------------------------------------------------------
11 Claims under high risk 1,933.5 369.4 (916.3) 1,386.6 (546.9)
------------------------------------------------------------------------------------------------------------------------------------
12 Total 2,352.6 398.4 (962.3) 1,788.7 (563.8)
------------------------------------------------------------------------------------------------------------------------------------
-3-
Mitsubishi Tokyo Financial Group, Inc
c. Six months results ending March 31, 2002
(in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Inflows Outflows As of Net increase
September 30, 2001 March 31, 2002
(A) (B) (C) (A)+(B)-(C) (B)-(C)
------------------------------------------------------------------------------------------------------------------------------------
1 Claims to bankrupt and
substantially bankrupt debtors 408.1 63.6 (52.7) 419.0 10.9
------------------------------------------------------------------------------------------------------------------------------------
2 Claims under high risk 2,171.4 384.0 (621.9) 1,933.5 (237.9)
------------------------------------------------------------------------------------------------------------------------------------
3 Total 2,579.6 447.7 (674.7) 2,352.6 (227.0)
------------------------------------------------------------------------------------------------------------------------------------
d. Six months results ending September 30, 2001
(in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
As of Inflows Outflows As of Net increase
March 31, 2001 September 30, 2001
(A) (B) (C) (A)+(B)-(C) (B)-(C)
------------------------------------------------------------------------------------------------------------------------------------
4 Claims to bankrupt and substantially
bankrupt debtors 398.5 30.2 (20.6) 408.1 9.5
------------------------------------------------------------------------------------------------------------------------------------
5 Claims under high risk 2,169.4 337.1 (335.1) 2,171.4 1.9
------------------------------------------------------------------------------------------------------------------------------------
6 Total 2,568.0 367.3 (355.8) 2,579.6 11.5
------------------------------------------------------------------------------------------------------------------------------------
(3) Status of Secured Coverage on Disclosed Claims under the FRL (prompt report)
(in billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Disclosed Collateral, Unsecured Reserves Coverage Ratio Coverage Ratio
amount Guarantees, etc (A) (B) (B)/(A) (March 31, 2002)
------------------------------------------------------------------------------------------------------------------------------------
7 Claims to bankrupt and
substantially bankrupt debtors 226.4 206.4 19.9 19.9 100.0% 99.9%
------------------------------------------------------------------------------------------------------------------------------------
8 Claims under high risk 1,031.3 467.5 563.8 386.3 68.5% 67.4%
------------------------------------------------------------------------------------------------------------------------------------
9 Claims under close observation 1,357.4 624.8 732.6 266.0 36.3% 28.4%
------------------------------------------------------------------------------------------------------------------------------------
10 Total 2,615.2 1,298.9 1,316.3 672.3 51.0% 50.7%
------------------------------------------------------------------------------------------------------------------------------------
11 (Change from March 31, 2002) (1,654.2) (883.4) (770.7) (387.3) 0.3% -
-----------------------------------------------------------------------------------------------------------------------------------
12 Normal claims 46,335.9 - - - -
------------------------------------------------------------------------------------------------------------------------------------
(4) Status of Secured Coverage on Self-Assessment of Assets (prompt report)
As of As of As of
March 31, 2002 September 30, 2002 March 31, 2003
(A) (B) (C) (C)-(A) (C)-(B)
------------------------------------------------------------------------------------------------------------------------------------
13 Normal 0.18% 0.19% 0.17% (0.00%) (0.01%)
------------------------------------------------------------------------------------------------------------------------------------
14 Close Watch 8.11% 8.75% 9.30% 1.19% 0.54%
------------------------------------------------------------------------------------------------------------------------------------
15 Close Watch 3.97% 3.57% 3.31% (0.65%) (0.26%)
------------------------------------------------------------------------------------------------------------------------------------
16 Borrowers with Credit under
Close Observation 14.39% 17.44% 21.16% 6.78% 3.72%
------------------------------------------------------------------------------------------------------------------------------------
17 Likely to become Bankrupt
(excluding secured assets) 67.54% 66.51% 67.44% (0.08%) 0.93%
------------------------------------------------------------------------------------------------------------------------------------
Note: Above figures exclude certain mortgage and consumer loans.
-4-
Mitsubishi Tokyo Financial Group, Inc
4. Earning Projections for the Fiscal Year Ending March 31, 2004
----------------------------------------------------------------
(Non-consolidated) (in billions of yen)
------------------------------------------------------------------------------------------------
For the year ended For the year For the six
March 31, 2003 ending months ending
(actual) March 31, 2004 September 30, 2003
------------------------------------------------------------------------------------------------
1 Operating income 27.2 44.0 42.0
------------------------------------------------------------------------------------------------
2 Ordinary profit 22.4 40.0 40.0
------------------------------------------------------------------------------------------------
3 Net income 23.3 40.0 40.0
------------------------------------------------------------------------------------------------
(Cash dividends) (in yen per share)
------------------------------------------------------------------------------------------------
Annual dividends Annual dividends
per share per share
for the year for the year Interim
ended ending dividends per
March 31, 2003 March 31, 2004 share
------------------------------------------------------------------------------------------------
4 Common stock 4,000 4,000 -
------------------------------------------------------------------------------------------------
(Consolidated) (in billions of yen)
------------------------------------------------------------------------------------------------
For the year For the six
ended For the year months ending
March 31, 2003 ending September 30,
(actual) March 31, 2004 2003
------------------------------------------------------------------------------------------------
5 Ordinary income 2,772.5 2,880.0 1,395.0
------------------------------------------------------------------------------------------------
6 Ordinary profit (loss) (360.2) 370.0 150.0
------------------------------------------------------------------------------------------------
7 Net income (loss) (161.4) 190.0 70.0
------------------------------------------------------------------------------------------------
-5-
Mitsubishi Tokyo Financial Group, Inc.
II. Progress in Addressing Key Issues
Medium-Term Business Plan: Highlights of progress made in fiscal 2002
1. Addressing the problem loan issue
-------------------------------------
Rapid removal from the balance sheet of loans categorized as "Under high
risk of bankruptcy" or below
. Concentrated effort to remove outstanding loans within two years and
newly arising problem loans within three years
Rapid reduction of problem loan ratio
. Aim to reduce the ratio by approximately half by the end of fiscal year
2004 from the level at the end of fiscal year 2001
- Through aggressive utilization of the Resolution and Collection Corp.
(RCC) and other measures, and rapidly removing from the balance sheet
loans to customers categorized as "Under high risk of bankruptcy" or
below, the total amount of problem loans held by the Group as of
March 31, 2003 decreased by 1.65 trillion yen compared to one year
earlier. This was achieved in spite of continued high levels of newly
arising problem loans.
- The ratio of problem loans as of March 31, 2003 fell 2.8 percentage
points from the year before to 5.34%.
Disclosed Claims under the Financial Reconstruction Law
(in billions of yen)
-------------------------------------------------------------------------------------------------------
As of As of Increase /
March 31, 2002 March 31, 2003 (decrease)
-------------------------------------------------------------------------------------------------------
Total 4,269.4 2,615.2 (1,654.2)
-------------------------------------------------------------------------------------------------------
Claims to bankrupt and substantially
bankrupt debtors 419.0 226.4 (192.6)
------------------------------------------------------------------------------------------------------
Claims under high risk 1,933.5 1,031.3 (902.1)
------------------------------------------------------------------------------------------------------
Claims under close observation 1,916.8 1,357.4 (559.3)
=======================================================================================================
Ratio of problem loans 8.14% 5.34% (2.80%)
-------------------------------------------------------------------------------------------------------
2. Reduction of equity portfolio
---------------------------------
As of March 31, 2003, the balance of equity holdings had been reduced to
around the level of tier one capital.
From the standpoint of overall risk management, the Group plans to sell a
further 750 billion yen of equity holdings during fiscal 2003.
- The Group disposed of approximately 1.28 trillion yen of equity
holdings during fiscal 2002, including transfers to exchange-traded
funds and sales to the Bank of Japan.
Balance of equity holdings (on MTFG's consolidated balance sheet)
(in billions of yen)
-------------------------------------------------------------------------------------------------------
As of March 31, As of March 31, Increase /
2002 2003 (decrease)
-------------------------------------------------------------------------------------------------------
Securities available for sale -
marketable stock 5,027.6 3,124.2 (1,903.4)
-------------------------------------------------------------------------------------------------------
Tier 1 Capital 3,181.1 3,128.6 (52.4)
-------------------------------------------------------------------------------------------------------
-6-
Mitsubishi Tokyo Financial Group, Inc.
3. Cost cuts
------------
(1) Personnel cuts
- Forecast 18,000-18,500 staff* at the end of March 2005
(reduction of 4,000 - 4,500 from March 2001 level)
Number of staff*
---------------------------------------------------------------------------------------------------------------
As of March 31, 2001 As of March 31, 2002 As of March 31, 2003
---------------------------------------------------------------------------------------------------------------
Change from March 2001
---------------------------------------------------------------------------------------------------------------
MTFG 22,438 21,385 20,603 (1,835)
--------------------------------------------------------------------------------------------------------
BTM 16,556 15,720 15,179 (1,377)
--------------------------------------------------------------------------------------------------------
MTBC 5,882 5,665 5,424 (458)
---------------------------------------------------------------------------------------------------------------
*Total of BTM and MTBC full-time, domestic staff (non-consolidated)
(2) Reduction in the number of branch offices
- Plan to reduce number of domestic branches by around 50 by the end of
March 2005
(Compared to end of September 2001 level)
Number of offices (Head office and domestic branches, sub-branches and
agencies)
---------------------------------------------------------------------------------------------------------------
As of Sept. 30, 2001 As of March 31, 2002 As of March 31, 2003
---------------------------------------------------------------------------------------------------------------
Change from Sept. 2001
---------------------------------------------------------------------------------------------------------------
MTFG 361 351 335 (26)
--------------------------------------------------------------------------------------------------------
BTM 302 296 282 (20)
--------------------------------------------------------------------------------------------------------
MTBC 59* 55 53 (6)
---------------------------------------------------------------------------------------------------------------
*For MTBC, the number of branches as of Oct. 1, 2001 (after merger of the three
trust banks)
For reference: Medium-Term Business Plan (2003)
-----------------------------------------------
We have revised our assumptions for the outlook for interest rates etc.,
and made Medium-Term Business Plan (2003) for the fiscal periods from 2003
to 2005 *1. The financial plan for fiscal 2005 is as follows:
Consolidated (in billions of yen)
------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2005 Change
Actual Target
------------------------------------------------------------------------------------
Net operating profit *2 764.2 1,140 +380 (approx.)
-------------------------------------------------------------------------------------
Net Income (loss) (161.4) 460 +620 (approx.)
-------------------------------------------------------------------------------------
ROE *3 (5.9%) 13%+ +19% (approx.)
-------------------------------------------------------------------------------------
BIS Capital Adequacy Ratio 10.84% Around 12% +1.2% (approx.)
(Tier 1 Capital) (5.68%) (Around 7%) (+1.3%)(approx.)
-------------------------------------------------------------------------------------
(Reference) Non-consolidated aggregates (in billions of yen)
------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2005 Change
Actual Target
------------------------------------------------------------------------------------
Gross Operating profit 1,312.6 1,565 +250 (approx.)
------------------------------------------------------------------------------------
Operating Expenses 622.7 613 (10)(approx.)
(Expense ratio) (47%) (39%) (8%)
------------------------------------------------------------------------------------
Net Operating Profit *4 689.9 952 +260 (approx.)
------------------------------------------------------------------------------------
Net Income (187.4) 385 +570 (approx.)
------------------------------------------------------------------------------------
*1. For fiscal 2005 we assume the following: A three-month euro-yen rate
averaging 0.6% over the period, an exchange rate of 120 yen / dollar as
of March 31, 2006, and growth in Japanese GDP in real term of 1.8%.
*2. Before trust account write-offs and general provision for loan losses.
*3. (Net income - non-convertible preferred share dividends) / (average
capital (excluding the value of non-convertible preferred shares,
appraisal gains)).
*4. Before trust account write-offs and general provision etc. for loan
losses.
-7-
Mitsubishi Tokyo Financial Group, Inc.
III. Consolidated Management of the Group
Through a further reform of its profit structure, the Group seeks to build
swiftly a business structure that can achieve stable growth.
As we strive to achieve this target, we will implement the additional
initiatives listed below. Taking this opportunity, we aim to restructure the
business model of the entire Group, by shifting to a more consolidated and
integrated management of the Group.
In rebuilding the business model, Bank of Tokyo-Mitsubishi (BTM), Mitsubishi
Trust & Banking Corporation (MTBC) and Mitsubishi Securities will seek to
reallocate their resources, including personnel and facilities, to further
enhance the expertise of each Group company, and to create a structure that can
provide customers with higher quality and more comprehensive financial services.
1. Retail Business: Strengthening Strategy and Improving Efficiency
-------------------------------------------------------------------
Strengthen operations and raise efficiency in the growing retail business area.
By developing strategies and through integrating operations group-wide, we aim
to achieve rapid and customer-friendly delivery of the best products and
services to each customer through efficient channels.
(1) Establish MTFG Plaza*, a new comprehensive financial services channel for
retail customers
- MTFG Plaza will be a new delivery channel providing comprehensive
financial services from BTM, MTBC and Mitsubishi Securities.
- Providing integrated and comprehensive financial services and products
in a one-stop location, MTFG Plaza will offer BTM's banking services,
MTBC's trust banking services and securities services from Mitsubishi
Securities.
- Growth of MTFG Plaza outlets will lead to further development of joint
branches between BTM and Mitsubishi Securities, the streamlining of
certain existing MTBC branches and the establishment of new,
streamlined MTBC branches. We aim to fully integrate and raise the
efficiency of our group-wide channels for retail customers.
(2) Utilize IT and telecommunications to develop Virtual MTFG Plaza*
- In addition to MTFG Plaza outlets, we will diversify our channels
through the development of a Virtual MTFG Plaza. This channel will
utilize IT and telecommunications technology to provide products and
services from each Group company.
- For example, we are considering the introduction of automated
contracting machines at non-MTFG Plaza branches, through which
customers can access banking, trust and securities services.
*(Provisional name)
- 8 -
Mitsubishi Tokyo Financial Group, Inc.
(3) Develop a Group operational strategy
- Develop as a Group an overall strategy for business with individuals
(mass market, high net worth and workplace based) and increase
efficiency through common use of infrastructure and resources.
- In order to provide comprehensive service to individuals as a Group, we
will revamp our product line up to attract individuals' funds, and will
also consider the development of composite banking, trust and
securities services and products.
2. Standardizing and Integrating Operations and Systems
--------------------------------------------------------
Further develop the standardization and integration of office operations
and systems, and pursue reduction of total group costs while maintaining a
high level of functionality, quality and dependability.
(1) Continue concentration and integration of large volume operations
- The concentration and integration of delivery operations for cash
and bills etc. between BTM and MTBC is now complete. We are also
examining jointly how to streamline office operations and reduce
running costs through concentration and integration of back-office
operational centers.
(2) Consider the standardization and integration of system platforms
- Start to consider standardizing the banking business IT systems of
BTM and MTB based on BTM's existing systems.
- We aim to reduce costs across the Group by sharing open system
assets for services such as online banking and ATM's in convenience
stores, by integrating systems maintenance, and by sharing network
platforms.
(3) Combine and integrate facilities, resources and outsourcing
- Accelerate the integration and sharing of operational and system
sites between the two banks.
- Examine the joint outsourcing of operations and systems functions.
-9-
Mitsubishi Tokyo Financial Group, Inc.
3. Increasing expertise and operational efficiency
--------------------------------------------------
Consolidate skills and functions within the Group to further increase expertise
and raise operational efficiency and productivity.
(1) Strengthen investment banking
- In strengthening our Group's investment banking business in response to
our clients' sophisticated needs, we will concentrate our specialized
skills and business capabilities to deliver high-level services and
raise business efficiency.
- In concrete terms, we will bring together group-wide human resources to
strengthen our syndicated loans function, and will consider shifting
the mergers & acquisition and derivatives business of MTBC to
Mitsubishi Securities as well as other measures.
(2) Pursue a Group strategy in asset management and asset administration
businesses
- In order to raise competitiveness, we will restructure the growing
asset management business and the highly competitive asset
administration business on a Group basis.
- In concrete terms, we will fully utilize the know-how of MTBC in the
investment trust, 401K and custody businesses etc.
(3) Launch a comprehensive solution business for corporate clients
- Through cooperation and collaboration among BTM, MTBC and Mitsubishi
Securities, the Group will provide a fully integrated and comprehensive
solutions service to corporate clients. In addition, we will radically
raise our business efficiency through an allocation of roles that meets
the needs of corporate clients.
(4) Concentrate corporate center functions to increase expertise and raise
efficiency
- Through concentration of corporate center functions within the Group
and their joint use by each Group company, we aim to raise efficiency
through shared policy, know-how and infrastructure, and to enhance the
management systems for risk management, internal audit and compliance
etc.
* * *
These materials contain forward-looking statements relating to us including,
among other things, current projections, targets with respect to the results of
operations, financial conditions and other future events.
These forward-looking statements are not a guarantee of future results and
involve risks and uncertainties. Actual results may differ from those in the
forward-looking statements as a result of various factors. For a detailed
discussion of these risks and other risks, uncertainties, and possible changes,
please see our latest financial summary report, annual report or other public
filings.
-10-