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Annual Report (Integrated Report)


April 1, 2021 – March 31, 2022

Editorial Policy

The purpose of this document is to provide our stakeholders with an overview of the Aozora Group and information regarding its value-creation initiatives. This document provides financial and non-financial information, taking into consideration the International Integrated Reporting Framework published by the International Integrated Reporting Council as well as the Ministry of Economy, Trade, and Industry’s “Guidance for Collaborative Value Creation”.

This document is an Annual Report (document explaining the Bank’s business operations and financial condition) created in compliance with Article 21 of the Banking Act.

Aozora Mission


Contribute to the development of society through the creation of new value-added financial services

Aozora Vision


Adapt to a rapidly changing world while remaining a trusted, valued and specialized financial service provider


Aozora Bank Group Value Creation

  1. CEO Message to Our Stakeholders
  1. Process of Value Creation

8 Message from the Executive Officer in Charge of Sustainability Management

  1. Key Sustainability Issues (ESG Materiality)
  1. CFO Message
  1. Financial Highlights
  2. Non-financialHighlights
  3. Non-financialInformation Index
  1. Aozora Sustainability Targets
  2. Timeline of the Aozora Group’s History
  1. The Aozora Group (Major Consolidated Subsidiaries)

Creating Value

30 Aozora’s Strategic Investments Business

– Promoting Industrial Transition and Realizing Financial Inclusion – *

  1. Aozora Network
  2. Customer Relations Group
  1. Institutional Banking Group
  1. Structured Finance Group
  1. International Business Group
  1. Market Group
  2. Promotion of Digitalization*
  1. GMO Aozora Net Bank Initiatives

Support Base for Value Creation

  1. Sustainability of Human Capital*
  1. Governance/Compliance*
  1. Corporate Governance
  1. Messages from Outside Directors
  1. Risk Governance

100 Compliance

  1. IT Strategy and Information Security
  1. Stakeholder Communication
  1. Aozora Bank Website

Financial and Corporate Data

  1. Corporate Data
  1. Financial Data
  1. Consolidated Information
  1. Non-consolidatedInformation

238 Disclosure Based on Basel III

Capital Accord Pillar III – Market Discipline

  1. Disclosure Related to Remuneration
  1. Share Procedure Information

Aozora’s Key Priorities


  1. Provide specialized and value-added financial services
  2. Move quickly, while responding patiently and politely
  3. Prioritize teamwork and provide a more comfortable working environment
  4. Respect one’s colleagues and support professional growth of all team members
  5. Learn from the past while adapting to and focusing on the future
  6. Take smart risks in new areas based upon our skills and experience
  7. Actively contribute to the sustainable growth of society


52 Sustainability Promotion

  1. Protection of Human Rights*
  2. Responding to Climate Change*
  1. Sustainability Integrated into Our Business
  2. Protecting and Providing for the Next Generation*
  3. Initiatives to Contribute to Society

* Sections regarding our Key Sustainability Issues (ESG Materiality)

Forward-Looking Statements

This annual report contains forward-looking statements regarding the Bank’s financial condition and results of operations. These forward- looking statements, which include the Bank’s views and assumptions with respect to future events, involve certain risks and uncertainties. Actual results may differ from forecasts due to changes in economic conditions and other factors.

CEO Message to Our Stakeholders

Aozora Bank Group Value Creation

Creating Value


Support Base for Value Creation

Value Creation Process

Kei Tanikawa

Representative Director and President

Chief Executive Officer (CEO)

To our stakeholders

The Aozora Group is a manageably sized organization with approximately 6.7 trillion yen in assets and 20 domestic offices and seven overseas offices, making us a unique financial group that has developed its business globally and throughout Japan.

The Aozora Group places a high priority on continuing to take on new business challenges in order to provide even higher quality services to our corporate and retail customers as part of the previously mentioned “Aozora Mission” to “contribute to the development of society through the creation of new value-added financial services”.

In addition to conducting our Customer Satisfaction Survey, which we have continued in order to determine whether we are adequately meeting the needs of our customers and business partners, we also verify and disclose the progress of our retail customer-oriented business management.

Through close collaboration with each of the Group companies, including, Aozora Bank, our New York, London, and Hong Kong subsidiaries, GMO Aozora Net Bank, Aozora Loan Services, Aozora Securities, Aozora Regional Consulting, Aozora Investment Management, Aozora Real Estate Investment Advisors, ABN Advisors, and Aozora Corporate Investment, as well as partnerships with regional financial institutions all over Japan and a wide range of partner companies, we are striving to create a business that has never existed before.

The success we achieved in our business areas of strength within “Aozora’s Strategic Investments Business”, which includes leveraged finance and real estate finance as key sources of revenue, as well as equity investments, environmental finance, recovery finance, and M&A advisory as growth businesses, was the result of these aforementioned efforts.

The approximately 2,400 Group employees involved in these characteristic business initiatives will contribute to smart risk-taking in new areas through our skill base and

Process of Value

Creation P6

Aozora Network P34

Customer Satisfaction

Surveys P36


Business Management


The Aozora Group

(Major Consolidated

Subsidiaries) P24

I would like to extend my appreciation to all of Aozora’s stakeholders for their ongoing interest and support. I would also like to extend my deepest sympathies to everyone who has been affected by the global COVID-19 pandemic and increasing geopolitical risk.

Based on our Mid-term Plan which we announced in May 2020, entitled “Aozora 2022”, we have been focused on our Strategic Investments Business which is designed to foster new business and support corporate restructuring and business recovery through selective risk-taking as part of the “Aozora Mission” to “contribute to the development of society through the creation of new value-added financial services”, as described in our Management Philosophy.

Management Philosophy – inside cover

organizational flexibility. We have organized “Aozora’s Key Priorities (Action)”, into seven categories focused on team work and respecting a diverse range of values and working styles.

As a result of these initiatives, we have achieved high profitability and efficiency characterized by a high ROE and ROA, as well as a low OHR. Our policy is to expand our financial and non-financial capital through the generation of added value in order to maintain financial strength, as well as to continue reinvesting in the foundations and capital needed for sustainable creation of added value and stable shareholder returns.

Capital and

Shareholder Return

Policies P15

Despite the significant impact of COVID-19 throughout the year, both in Japan as well as overseas, the overall global economic environment in FY2021 continued on its recovery trend. I am pleased to report that our full-year earnings exceeded the forecast as a result of our strong customer-related business.

We also announced the establishment of the “Aozora Sustainability Targets” in September 2021, which span each business and support group across the entire Aozora Group, and are proactively promoting initiatives designed to achieve these targets.

FY2022, the final year of the “Aozora 2022” Mid-term Plan, will be an important year to establish a sound foundation for our future business as we develop our next Mid-term Plan in light of the further acceleration of the transition of our customers’ industrial structure. While we expect our customer-related business initiatives, including Aozora’s Strategic Investments Business, that we are currently working on to grow, we will at the same time strive to achieve our earnings forecast through careful analysis and appropriate judgment of a wide range of risks in the face of large-scale changes in the financial markets amid rising inflation and emerging geopolitical risk.

This Annual Report is designed to provide an easy-to-understand explanation of Aozora and its value creation initiatives for all of our stakeholders. We hope that it proves useful in providing a deeper understanding of our company.

At this time, I would like to once again express my gratitude to all of our stakeholders for their continued interest and support.

CFO Message P14

Financial Highlights P16

Earnings and Dividend Forecasts P15

FY2022 Key Risks P99

Sustainable Human Capital

We derive our competitive edge from its “sustainable human capital”, and in addition to designating it as a “Key Sustainability Issue (ESG Materiality)” as described below, Aozora strives to create a corporate culture that enables employees with diverse viewpoints and values feel fulfilled in their work and play active roles.

Our human resources strategy is designed to evaluate and develop teamwork, expertise, and taking on new challenges through our three career courses, “Global Professional”, “Regional Professional”, or “IT Professional”, as well as a contract employment system that allows employees with a high level of expertise to play active roles regardless of seniority. We strive to support the promotion of employees to more senior positions by assessing candidates’ ability and performance, and as a result, our percentage of managers who are mid-career recruits exceeds 40%, while our employees’ average years of service is approximately 15 years for both men and women, which are the characteristics of Aozora’s human resource.

In order to implement our mission to continue taking on new business challenges, executives and employees are encouraged to extend beyond the scope of their own roles and work closely with other business groups, Group companies, and various partner companies. We believe that “co-work” is essential, and we offer various training programs that respect the career plans and initiatives of employees with a diverse range of values. In order to further promote “co-work”, we have launched a training platform within the

Aozora Group’s HR Strategy P70

Aozora’s Human


Development P72

Creation of Training Platform P74

Aozora internal portal website designed to make use of a wide range of training programs, teaching materials, and expertise from each business group. We have created a system that allows anyone to learn independently, and many of our employees have taken advantage of it.

In addition, we started the “Digital Talents Development Program” in FY2021 with the aim of changing our way of thinking and expanding the range of options for transforming our business. We expect to expand our DX human resources base while leveraging it to support putting the acquired skills into practice as well as our customers’ digitalization needs.

In response to the COVID-19 pandemic, working styles have become more diversified over the past two years. We are focused on gathering more feedback from employees and increasing the participation rate of our ongoing employee questionnaire. Currently, about 80% of respondents said that Aozora has a comfortable working environment while approximately 60% of respondents find value in their job, and management’s aim is to promote initiatives designed to improve these points.

Digital Talents

Development Program


Positive Workplace

and High Job

Satisfaction P76

Aozora Bank Group Value Creation

Creating Value


Support Base for Value Creation

As mentioned above, we are working to ensure a level of diversity in our hiring for managerial positions that play a core part in corporate management, and over 40% of our managers are mid-career recruits. Starting in FY2021, we have set new goals and tracked the progress of initiatives designed to contribute to workplace where our employees can play active roles, including increasing the percentage of female managers and creating a safe working environment for employees with disabilities.

Key Sustainability Issues and Aozora’s Sustainability Targets

Currently, our society is facing a set of unprecedented changes, such as industrial transition, a worsening climate crisis, prolonged pandemics, demographic changes, digitalization and cyber risk, rising geopolitical risk, increased consideration of human rights issues, and financial market volatility triggered by inflation.

In light of these social trends, the expectations and requests from our stakeholders, and the importance of the Aozora Group’s corporate management, we have positioned areas integral to realizing its Management Philosophy as Key Sustainability Issues (ESG Materiality). Approximately 200 topics were identified from among current environmental and social issues, and these items were classified into 20 categories. This process led to multiple discussions within the Sustainability Committee, and the following eight items have been designated as having ESG Materiality: (1) response to climate change, (2) respect for human rights, (3) promoting industrial transition, (4) realizing financial inclusion,

  1. promoting digitalization, (6) protecting and providing for the next generation,
  1. sustainability of human capital, and (8) governance and compliance.
    The reasoning behind these selections and the overlap with current initiatives and business strategies are described in this Annual Report, but we will focus on designing initiatives to address each item while continuing to review them as appropriate via an effective PDCA cycle.

As mentioned earlier, we announced the establishment of the “Aozora Sustainability Targets” in September 2021, which span each business and support group across the entire Aozora Group, and are proactively promoting initiatives designed to achieve them.

Of the above eight materiality categories, we are working to realize financial inclusion for start-up companies and companies experiencing financial hardship due to existing debt and promoting the industrial transition of our business partners who wish to transform themselves by setting goals. In addition, we have also set goals centered on Aozora’s strengths, such as sustainable finance as a response to climate change and consulting for retail customers to aid them in passing on businesses and assets to the next generation. We made positive progress in each category during FY2021, the first year of this initiative.

Diversity & Inclusion

Initiatives for Diversity- oriented Career Support of Core Talent P78

Creating a Comfortable Working Environment for Employees with Disabilities P80

Key Sustainability

Issues (ESG

Materiality) P10

Materiality Issues,

Specific Initiatives and

Associated Business

Strategies P12

Aozora Sustainability Targets P21

Aozora’s Strategic Investments Business

As I have previously discussed, Aozora has developed specialized business areas as a result of our continued efforts to embark on new ventures in order to provide even better services to our corporate and retail customers.

As our society faces a set of unprecedented changes and the shift towards decarbonization and industrial transition continues to accelerate, we believe we have now entered a crucial turning point that will enable us to contribute to the development of our business partners and society as a whole by focusing on these business areas.

Our Strategic Investments Business is a practical initiative designed to foster new industries and proactively support the business restructuring and revitalization of our business partners who wish to transition to new business areas through long-term contributions via financing from debt to equity in addition to proposals and dialogue with their management teams.

We are also promoting the “Aozora venture ecosystem”, which is a support service for venture companies still in the early stages of development that utilizes the Aozora Group network. We provide a wide range of services to venture companies to support their growth, including providing growth financing from debt to equity as well as GMO Aozora Net bank’s embedded financial services.

We are also engaged in leveraged finance, environmental finance, and M&A advisory services for companies that have grown to maturity and are working towards industrial transition, both in Japan and overseas.

We also leverage the Aozora Group’s skills and expertise in order to meet the needs of our retail customers, such as by providing M&A advisory services to meet their business succession needs.

As a way to contribute to the business recovery of regional areas, we work together with regional financial institutions across Japan to develop “recovery finance” initiatives that fully leverages Aozora Loan Services’ operations.

In addition to private equity investments, we have also begun making equity investments with a primary focus on engagement. Aozora regards its customers as business partners who it works together with to find solutions to issues. By engaging in dialogue to better understand their business, we strive to realize growth alongside them through active involvement and management advice.

Aozora’s Strategic

Investments Business


Aozora Bank Group Value Creation

Creating Value


Support Base for Value Creation

Process of Value Creation

Acceleration of



Advancement of


More concern for

Shifts in the

More frequent

Diversification of

Global movement

climate change


monetary policy

pandemic impact

digital technologies

geopolitical risks

human rights

occurrence of


towards industrial

More frequent and

Aging population

Volatility in the

(living with


Supply chain

Serious human

corporate fraud/

New approaches



with declining

economic and


cyber-security risks


rights abuse


to living


natural disasters

birthrates in Japan

financial markets

Management Philosophy:

Aozora Mission

Contribute to the development

of society through the creation

of new value-added

financial services

Realization of


Determine key challenge areas to realize the management philosophy in light of their importance to the Aozora Group’s

corporate management as well as expectations/demands from stakeholders and social trends


Management Resources

Human capital

• Manageable size

Number of employees (consolidated basis): 2,382

  • Proximity between officers and employees, close communication
    Number of officers/employees who attended small-sized meetings*1: approximately 1,500
  • Personnel with a diverse range of backgrounds/values Number of female executive officers: 5
    Ratio of mid-career managers: 43.7%

Intellectual capital

  • Strong level of expertise/knowledge/experience in real estate finance, business recovery and leveraged finance
  • Personnel development to respond to digitalization “Digital Talents Development Program – Advanced Course*2” attended by 3% of all employees
    IT Passport holders: 12% of all employees

Social and relational capital

  • Unique market position as “not a mega bank nor a regional bank”
    20 domestic offices nationwide and 7 overseas offices Group companies’ business areas covering business recovery, securities, investment trusts and M&A
  • Strong nationwide network with regional financial institutions for over 60 years
    Relationship with 80% of all regional financial institutions
  • Diverse shareholder mix

Number of retail investors: approximately 90,000

Financial capital

• Manageable asset size

Total assets: 6,728.6 billion yen

• Sound financial base

Capital adequacy ratio: 10.37%

Credit ratings: BBB+/A-/A (S&P/R&I/JCR)

• High profitability and efficiency

OHR: 56%, ROE: 7.2%, Business profit ROA: 0.8%

Environment-related capital

• Greenhouse gas emissions (Scope 1 & 2): 4,994t-CO2

Key Sustainability

  1. Response to climate change (2) Respect for
  1. Realizing financial inclusion (5) Promoting next generation (7) Sustainability of human

Promotion of Aozora’s Strategic

Investments Business

Revenue areas

Leveraged finance

Real estate finance

Growth areas

Equity investments

Environmental finance

Recovery finance

M&A advisory

Customer network

Network of regional financial institutions

Retail customers

Promotion of sustainability

Support Base for




of human




Issues (ESG Materiality)

human rights (3) Promoting industrial transition digitalization (6) Protecting and providing for the capital (8) Governance/Compliance

Aozora’s Sustainability Targets

  • Number of venture-related investments: 100 transactions
  • Account openings for small businesses & start-ups: 200,000
  • Number of business recovery fund-based transactions: 100 transactions
  • Number of equity investments with a primary focus on engagement: 100 transactions
  • Sustainable financing amount: 1 trillion yen
  • CO2 emissions as a business entity: 50% reduction by FY2030 (compared to FY2020), 0 (net zero) by FY2050
  • Amount of project financing for coal-fired power plants: 0 (net zero) by FY2040
  • Number of business/asset succession consulting contracts: 1,800

Key Performance Indicators

(KPIs) (Mid-term Plan)

• Overhead ratio (OHR): Below 55% • ROE: 8% or higher

• Business profit ROA: 1% • Capital adequacy ratio: 9.5%

Value Creation

IT strategy and






Creation of social/economic value

Contribution to environment

and society

Contribute to solving environmental and social issues through initiatives as a business entity

Contribution to customers

Provide support for the sustainable

growth of retail, corporate and financial institution customers

Contribution to shareholders

Enhance corporate value and

achieve shareholder returns through

sustainable growth

Contribution to employees

Support the creation of a working

environment that allows for

employees’ job satisfaction and active roles as well as their growth and pursuit of self-fulfillment





(Note) All figures are taken from business results in FY2021 or as of the end of March 31, 2022.



For small-sized meetings, please refer to page 105.


Annual Report 2022


For “Digital Talents Development Program – Advanced Course,” please refer to pages 73-74.

This is an excerpt of the original content. To continue reading it, access the original document here.


Aozora Bank Ltd. published this content on 16 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 September 2022 06:09:01 UTC.

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All news about AOZORA BANK, LTD.

Sales 2023 97 381 M
679 M
679 M
Net income 2023 33 981 M
237 M
237 M
Net Debt 2023

P/E ratio 2023 9,23x
Yield 2023 5,63%
Capitalization 315 B
2 193 M
2 193 M
Capi. / Sales 2023 3,23x
Capi. / Sales 2024 3,07x
Nbr of Employees 2 382
Free-Float 93,3%

Duration :

Period :

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Technical analysis trends AOZORA BANK, LTD.

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Income Statement Evolution



Mean consensus UNDERPERFORM
Number of Analysts 5
Last Close Price 2 694,00 JPY
Average target price 2 694,00 JPY
Spread / Average Target 0,00%

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