Citibank Japan Ltd. Interim Disclosure Report - · PDF fileCitibank Japan continues to be there for our customers, ... Head of Marketing Division . Caleb Hunt : Head of Legal Division

Citibank Japan Ltd.

Interim Disclosure Report as of September 30, 2010

Table of Contents

Message from the CEO 1

Company Overview 2

Our History 4

Management Strategy 5

Business Outline 7

Corporate Governance Framework 14

Risk Management Framework 17

Compliance Framework 18

Diversity and CSR Activities 19 Citibank Japan Ltd. FY 2010 Interim Financial Information 21

1. Matters Related to Major Business 22

2. Financial Statements 39

3. Market Value Information 53

4. Major Shareholders 57

5. Disclosure Items Based on Pillar III of Basel II 58

Citibank Japan Ltd. 1

Message from the CEO

Citibank enjoys a long and distinguished history in Japan, dating back to 1902 when we opened our first branch in Yokohama. We have since grown to become one of the leading financial institutions in Japan, providing innovative and high quality services to our customers from our retail and corporate banking divisions. Whether it be helping our individual customers manage their financial needs, or helping our corporate clients expand into new and exciting markets, Citibank Japan continues to be there for our customers, helping them succeed through all market cond Citibank Japan is well capitalized with 256.1 billion yen in total shareholders' equity as of March 31, 2010. Our capital adequacy ratio of 22.0% as of September 30, 2010 is among the highest in the banking industry in Japan and is far in excess of the minimum requirement as prescribed by the Financial Services Agency. Our business results continue to show positive momentum. In the 6 months ended September 30,

2010, Citibank Japan reported net income of 9.810 billion yen wi

itions.

th assets of approximately 5.02 trillion yen.

n

e next twelve months, bringing the total number of retail banking branches across the country to 35.

erica, Europe and Middle East as we continue to help our Japanese clients grow pan-regionally across.

xceeds client expectations while mbracing the communities in which we are privileged to do business.

January 2011

Representative Directo d

Citibank Japan continues to grow and look for new ways of serving our retail and corporate clients. In our retail banking division, we recently opened three new state of the art smart banking branches in 2010. Japan is a key market for investment in innovation and we plan to open more of these branches withith In our corporate banking division, the Japan desk coverage has been expanded further and as of January 2011 we now have 14 desks in 12 countries, in Asia Pacific, North and South Am

I would like to express my sincere gratitude to our customers and employees for their wonderful support and we look forward to continuing to build a franchise that consistently ee

Darren Buckley r, President & CEO

. Citibank Japan Lt

Company Overview

Company Profile

Company Name Citibank Japan Ltd. (“CJL”) Head Office Address Citigroup Center

3-14 Higashi-Shinagawa 2-chome, Shinagawa-ku, Tokyo 140-8639

Bank Code 0401 Head Office Branch Code 730 Telephone Number 0120-039-104 or 03-5462-5000 Commencement of Operations July 1, 2007 (International Banking Corporation (a

predecessor to Citibank) opened Yokohama branch October 1902)

Business Overview As one of Citigroup's core businesses in Japan, CJL is engaged in banking services through the Retail Banking Division, which provides banking services to a wide range of retail customers, and through the Corporate Banking Division, which is dedicated to institutional clients.

Number of Employees 1,661 （As of September 30, 2010） Number of Branches 1 head office, 27 branches, 7 sub-branches and 2

internet-only branches (including Retail Banking Division’s 26 branches, 5 sub-branches and 1 internet-only branch)

Directors and Statutory Auditors Representative Director, President Darren Buckley Representative Director, Deputy President Marc Merlino Director, Vice Chairman Junichi Maruyama Director, Deputy President Tetsuo Matsugaki Director Dennis Hussey Director (non-executive) Jun Kadoda Director (non-executive) Yukio Yoshimura Director (non-executive) Mark Hart Director (non-executive) Alison Birch Director (non-executive) Deepak Jain Statutory Auditor (full-time) Takashi Kinoshita Statutory Auditor (outside) Mamoru Sato Statutory Auditor (outside) Shigeto Tsutsumi

Executive Officers Chief Executive Officer (CEO) Darren Buckley Head of Corporate Banking Division Marc Merlino Chief Administrative Officer (CAO) Tetsuo Matsugaki Head of Retail Banking Division Dennis Hussey Head of Corporate Treasury Division Nelson Thackery Head of Marketing Division Caleb Hunt Head of Legal Division Yoshito Hirata Head of Compliance Division Koichi Tanaka Head of Control Division Masahiko Sawairi Head of Finance Division V. Prakash Head of Risk Management Division Kazuhiro Tanimoto Co-Head of Operations & Technology Division Ichiro Nakauchi Head of Human Resources Division Moira Lynam Deputy Head of Business Strategy & Planning Division and Head of Management Coordination Unit

Hiroaki Nigo

(As of January 1, 2011 except for Number of Employees)

2 Citibank Japan Ltd.

Financial Summary (From 03/2008 to 09/2010)

(Billions of Yen) 03/2008 09/2008 03/2009 09/2009 03/2010 09/2010Total Assets 6,482.3 6,737.8 6,189.2 5,148.8 4,600.7 5,028.7Deposits 5,317.4 5,768.8 5,311.0 4,346.6 3,720.9 4,017.7Total Net Assets 271.2 282.5 299.3 306.7 312.3 262.0Capital Stock 123.1 123.1 123.1 123.1 123.1 123.1Capital Adequacy Ratio 14.1％ 16.6％ 23.5% 24.6% 25.1% 22.0% *

(*) The number reflects the interim dividend payment of 61,000 million yen made on July 23, 2010.

Credit Ratings

Moody’s S&P Fitch Citibank Japan Ltd

Long term Short term

A2 * P-1

A+ * A-1

A+ ** F1+ **

Citigroup Inc. Long term Short term

A3 * P-1

A * A-1

A+ ** F1+ **

Citibank, N.A. Long term Short term

A1 * P-1

A+ * A-1

A+ ** F1+ **

(*) Outlook Negative. (**) Watch Negative. (As of January 20, 2011）

For further details, please refer to Citigroup Form 10Q files with the Securities and Exchange Commission (SEC) available at http://www.citigroup.com/citi/fin/sec.htm

Deposit Insurance

CJL has its head office located in Japan and is a member of the Deposit Insurance Corporation (DIC).

Pursuant to the Deposit Insurance System, non-interest-bearing Yen deposits for payment and settlement purposes accepted by CJL are protected in full per depositor; and interest-bearing Yen deposits accepted by CJL are protected up to a maximum of 10 million yen in principal plus related interest thereon per depositor.

Bank Agency Service

Name of Bank Agent Citigroup Global Markets Japan, Inc. (“CGMJ”) Offices of Bank Agent CGMJ Tokyo Headquarters Service Coverage Intermediary of certain produces offered by CJL’s Corporate Banking

Division (yen/foreign currency deposits and remittance services)

Information on JBA Customer Relations Center Japanese Bankers Association runs the JBA Customer relations center as contact points to which customers can go for consultation and inquiries to which they can direct their opinions and complaints about banks. Consultations and inquiries are free of charge. * JBA Customer relations Center supports only Japanese. Refer to the JBA website for more information. http://www.zenginkyo.or.jp/adr/ Contact for consultation and share your views JBA Customer Relations Center 0570-017109 or 03-5252-3772 Reception days: Mon-Fri (Excluding national holidays and bank holidays) Reception hours:9:00am - 5:00pm JBA is a designated dispute resolution organization under the Banking Act and the Norinchukin Bank Act.


http://www.citigroup.com/citi/fin/sec.htm

http://www.citibank.co.jp/ja/re/zenginkyo_inquiry.html

Our History

1812 City Bank of New York established. 1902 International Banking Corporation opened its first branch in Yokohama. 1923 International Banking Corporation opened Tokyo Branch (temporarily closed in 1941, reopened in 1946). 1973 First National City Corporation listed on Tokyo Stock Exchange (delisted in 1998 with the merger between Citicorp and Travelers Group). 1974 First National City Corporation holding company changed its name to Citicorp. 1977 Citibank N.A. launched Citicard Banking Centers, anchored by ATMs and CitiCard. The 24-hour ATMs are for the first time used for more than emergency cash. 1980 Decades of innovation and expansion lead to Citibank operations in 90 countries, making it one of the first truly global banks. 1991 Citibank Japan launches International Cash Card. 1998 Citicorp and Travelers Group merge to form Citigroup Inc. Citibank Japan starts internet banking. 2007 Citibank Japan Ltd. commences operations as a locally incorporated bank. Citigroup Inc.’s shares listed on the first section of the Tokyo Stock Exchange. 2010 Citibank Japan opens smart banking branches in Nihonbashi, Tokyo Ekimae, and Nagoya. 2011 The number of Citigroup’s Japan Desks network is expanded to 14 locations in 12 countries (as of January).



Management Strategy

Citi’s Mission Statement and Principles

Citi works tirelessly to serve individuals, communities, institutions and nations. With 200 years of experience meeting the world's toughest challenges and seizing its greatest opportunities, we strive to create the best outcomes for our clients with financial solutions that are simple, creative and responsible. An institution connecting over 1,000 cities, 160 countries and millions of people, we are your global bank; we are Citi. The four key principles—the values that guide us as we perform our mission—are:

Common Purpose — One team, with one goal: serving our clients and stakeholders. Responsible Finance — Conduct that is transparent, prudent and dependable. Ingenuity — Enhancing our clients’ lives through innovation that harnesses the breadth and depth of

our information, global network, and world-class products. Leadership — Talented people with the best training who thrive in a diverse meritocracy that demands

excellence, initiative and courage.

CJL’s Management Strategy

CJL is the first locally incorporated foreign bank in the Japanese market. CJL’s goal is to fully respond to the needs of our retail and corporate clients with innovative products and services and through Citigroup’s global network – thereby playing a leading role in the financial industry. With strategic coordination across business lines and group companies, CJL aims to increase its client and revenue base and improve its local asset-liability balance. Based on our long-term vision, we endeavor to continually develop our business and gain increased presence in the

market, leveraging our unique position as a locally incorporated foreign bank. CJL has a long and distinguished history in Japan. We have a proud legacy of focusing our energy fully on our customers, delivering new innovations and market firsts, bringing the best of the world to our local customers, providing an excellent working environment and investing in future growth. CJL is focused on a balanced growth strategy through its Retail Banking Division and Corporate Banking Division. The Retail Banking Division continually invests in new product, distribution and service innovations to grow its mass affluent customer base and expand its premier Citigold proposition. The Corporate Banking Division has a selected core group of relationships to which it leverages and delivers Citigroup's global strengths to provide high quality financial products, services and advice to help our customers succeed. Both Divisions continually look to improve the customer experience and operational efficiencies through extensive ongoing reengineering programs. CJL is subject to the very high regulatory standards expected of all Japanese banks, as well as the international standards expected by our regulators in the United States. We have rigorously pursued a sound governance and internal control structures since the localization of our banking operations in July 2007 and will continue our utmost efforts to improve these structures further to meet both Japanese and global best practices. We are committed to confront in a resolute manner any undue demands and anti-social forces that threaten social order and safety. CJL is committed to providing a working environment where its employees can thrive and achieve their full potential. By attracting and training the best people and giving them with broad career development opportunities, we aim to foster an environment where employees are able to provide our clients with outstanding financial products, service and advice.

CJL is, and will continue to be, active in diversity initiatives and the community. We have focused on enhancing the opportunities available to working parents in the workplace through our childcare center in our head office and other support programs, etc. Our community activities focus broadly on improving access to financial education and assisting those with disabilities within the communities in which we operate. In order to fully achieve the above objectives, we seek to focus on the following principles, under the overarching theme of "Growth through Innovation" and backed by a strong foundation of compliance and control frameworks. Live Client First Create a client-centric organization and value system to seamlessly meet client needs; design our

products, services and processes around the customer experience. Be the World’s Best Team Promote a cohesive “One Citi” culture across business lines and develop talent focused on

delivering the best financial products and services for our clients. Serve Stronger Value Propositions Leverage “One Citi” capabilities to respond to our clients’ increasing demand for innovative products

and services across all businesses, and continue to strive for speed and simplicity. Optimize and Protect the Franchise Strengthen the retail and corporate banking business platforms as well as business partnerships

with other group companies, focusing our resources on growth, innovation and operating efficiency driven by the relentless pursuit of excellence.

Grow Market Share and Recognition Deliver increased market share and recognition through a renewed focus on growth. Build an Iconic Brand Strengthen our brand commensurate with our 100+ year legacy in Japan based on a foundation of

trust, integrity and innovation. Deliver Financial Performance Deliver profit growth and improved operating efficiency.



Business Outline

Retail Banking Division Citibank has been a pioneer in the retail banking arena in Japan, widely recognized for our customer service and product innovations. Examples of our past successes include being the first bank in Japan to introduce “24-hours-a-day, 7-days-a-week” (“24x7”) ATMs and telephone banking services, as well as ATM cards that can be used at CDs/ATMs overseas. We also introduced the consultative model whereby Citibank financial experts provide professional financial advice to our retail customers. We established a unique presence in the market by being highly responsive to changes in the business environment at a time of asset growth from foreign currency deposits and investment markets in Japan. We are redefining banking with a more effective, better-service banking format and customer-centric approach. Through our innovative smart banking model we are changing to make banking simpler, taking the complexity out of the products and services that we provide, and to make ourselves more accessible and convenient to the customers that we serve. We are redesigning all processes in our branches so they are designed around the customer, allowing customers to seamlessly, quickly and digitally execute transactions, while maintaining a high level of compliance and control. As announced in the Nikkei daily and Nikkei Veritas weekly newspapers, CJL was awarded the number one ranking in the annual Nikkei Retail Banking Strength Survey for 2010, in which 118 banks in Japan were rated in two main areas, one for over-the-counter service and one for product quality and lineup. Japan is a highly service intensive market, where quality standards are very high, and this is the first time that CJL has received the top ranking. We believe that the results show the strength of our customer-centric approach to service, which is designed around the customer, giving customized solutions where, how and when they want them. As of January 1, 2011, CJL boasts a retail network of 26 branches (including 3 smart banking branches), 5 sub-branches, 2 “24x7” state-of-the-art call centers, a new best-in-class internet banking platform, and 111 proprietary ATMs. We are further connected to approximately 100,000 more ATMs in Japan through alliances with Japan Post Bank, city banks, regional banks and convenience stores, etc. This network is the backbone helping CJL to seamlessly meet the needs of mass affluent retail clients in Japan’s major cities. In addition to full local presence, connectivity, and a broad suite of banking products and services, CJL is able to provide customers with global ATM access, market-leading foreign exchange capabilities, and a wide range of carefully selected deposit and investment opportunities. For our Citigold customers, advice and services tailored for growth and protection of personal assets are provided by specially trained Citigold Executives at exclusive Citigold Centers within our core branches. The competitive environment is intensifying as our competitors make efforts to follow our marketing strategies including a greater focus on our core target, the retail mass affluent. This has resulted in some dilution of our “innovative” image, and it is with this in mind that we will pursue efficient business operations and continually improve services to mass affluent customers through deeper insight and customer centricity, and by expanding our sales network and upgrading our products.

<Major Business Activities> We continued to serve our customers with our unique set of capabilities from basic banking services to more specialized offerings – e.g. local and global ATM access, market-leading foreign exchange capabilities, a wide range of carefully selected deposit and investment opportunities and preferential “Citigold” and “Citigold Premium” services. In April 2010, we opened innovative, smart banking branches in Nihonbashi and Tokyo Ekimae; and subsequently in November 2010, we relocated and renovated our Nagoya Branch, which was first established in 1951, to start its operation as the third smart banking branch. We continue to relocate and renovate branches to optimize the branch network. We take pride in the diverse range of foreign currencies that we make available to our customers. As part of efforts to further expand the range of our services, we also substantially enhanced the “Premium Deposit” (structured deposit). The service now allows real time foreign exchange rate interest rate quoting for each booking, more varieties of currency pairs including cross foreign currency combination, etc., thus responding to increasingly diversified investment needs of our clients. For investment product areas such as mutual funds and pension products as well as insurance products, we continued to focus on upgrading and expanding our product offering, training sales staff and holding investor education seminars. The investment situation, which had significantly worsened after the economic and financial market turmoil that started in 2008, has recovered and our customers’ investments and revenues have shown a positive trend towards rebound. As part of our effort to improve the quality of services we offer to retail customers, we have now introduced an “alliance credit card” product to our customers. In partnership with our group company, Citi Cards Japan, we have developed a choice of premium credit cards with features uniquely designed for CJL customers. One feature of special note is the ability to collect and obtain “points” on the alliance cards for certain banking activities.



Kansai Area Hokkaido Area024 Shinsaibashi Branch 035 Sapporo Branch025 Umeda Branch043 Kyoto Branch049 Osaka Ekimae Branch048 Ashiya Branch735 Kobe Branch

Kanto032 Makuhari Branch046 Chiba Branch047 Urawa Branch

Kyushu Area 071 Fujisawa Mini Branch045 Fukuoka Branch 075 Aobadai Mini Branch

736 Yokohama Branch

003 Shinjyuku Minamiguchi Branch003 Kichijoji Mini Branch020 Aoyama Branch021 Ohtemachi Branch022 Ginza Branch029 Tachikawa Branch030 Gotanda Branch033 Shibuya Branch037 Ikebukuro Branch038 Hiroo Branch040 Shinjyuku Higashiguchi Branch052 Nihonbashi Branch053 Tokyo Ekimae Branch072 Jiyugaoka Mini Branch731 Akasaka Branch

073 Nagoya Station Mini Branch732 Nagoya Branch

Tokai Area

Tokyo Area●

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＜Retail Banking Network＞

CJL’s Retail Banking Network (as of January 1, 2011) • “24x7” call centers • Internet banking platform • 26 branches and 5 sub-branches • 111 proprietary ATMs • Approximately 100,000 ATMs through alliances with the Japan Post

Bank, city banks, regional banks and convenience stores, etc.

Overseas Network Citibank’s ATM Banking Card is usable at approximately one million CDs/ATMs in 170 countries worldwide allowing withdrawal of funds from a Yen Savings Account in the local currency of the country where the ATM is located.

Corporate Banking Division The Corporate Banking Division, located in Tokyo and Osaka, provides comprehensive financial services to a select group of corporate, financial institution and public sector clients and their affiliates in Japan and around the world. In addition to providing a full range of corporate banking services in Japan, we also provide Global Relationship Management services, through raising money, moving money, investing money and managing risk capabilities, leveraging Citigroup’s presence in over 100 countries and our broad product capabilities for the benefit of our clients. CJL serves approximately 300 major Japanese corporate clients and the Japanese subsidiaries of over 500 global companies. With a broad set of service offerings, CJL focuses on delivering innovative relationship-driven solutions for our clients’ needs related to their day-to-day operations as well as their strategic business objectives. We are uniquely positioned as a locally incorporated foreign bank. Widely recognized as an industry leader, CJL has been consistently ranked at the top of major surveys in particular for global transaction services and foreign exchange. We are also a leading finance provider in the syndicated loan market in Japan. Further, we have been a pioneer in the structured finance market since mid-1980’s and have played an important role as a market leader in providing innovative solutions to many of our clients. CJL received three awards in the recently announced Asiamoney Polls 2010 – where CJL was named Best Foreign Cash Management Bank in Japan as voted by small-sized corporates, medium-sized corporates and large-sized corporates. In the 2010 Euromoney Polls, CJL was rated third in the overall ranking. CJL Chief FX Strategist, Osamu Takashima, was ranked first in the coveted “Best FX Strategist” category, and was also awarded “Best Technical Analyst”. <Major Business Activities> One of Citigroup’s unique competitive advantages is its global presence in more than 100 countries worldwide. CJL leverages Citigroup’s global network by providing Global Relationship Management services to our clients. In addition to the worldwide branch network, CJL continues to strengthen our ability to support our Japanese clients through Citigroup’s “Japan Desks” around the globe. The Japan Desks are staffed by experienced Japanese or Japanese-speaking bankers with deep understanding of the CJL clients. They exclusively focus their relationship management efforts on the Japanese subsidiaries and affiliates of our core clients in that country/region. Citigroup’s support structure through Japan Desks have been expanded in conjunction with the growth trajectory of the Japanese industries and clients. With the recent opening of three additional locations, Manila (Phillipines), Prague (Czech Republic) and Dubai (United Arab Emirates), the total number of Japan Desks has been expanded to 14 locations in 12 countries as of January 2011. With each of these Japan Desks and its hub function to further outreach neighbor countries and jurisdictions, our global support structure has become increasingly more available pan-regionally across the globe.



<Citigroup’s Global Coverage and Japan Desks>

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Full Client Capabilities Non-Presence Capabilities Japan Desk Locations

United Kingdom (London) Singapore

Russia (Moscow) China (Beijing, Shanghai, Guangzhou)

India (Delhi) United States (New York)

Thailand (Bangkok) Brazil (Sao Paulo)

Indonesia (Jakarta) United Arab Emirates (Dubai)

Philippines (Manila) Czech Republic (Prague)

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Citigroup’s Japan Desks around the World (as of January 2011)

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Leveraging Citigroup’s presence in over 100 countries and our broad product capabilities, CJL provides a full range of corporate banking services in Japan and globally as Global Relationship Management services for the benefit of our clients.

Global Transaction Services The Global Transaction Services (GTS) Department provides cash management for corporations and financial institutions worldwide, as well as solutions for trade finance, export agency finance and securities and custodial services. GTS provides not only services to meet the day-to-day needs of customers, but also comprehensive tailor-made payment and settlement solutions.

Global Markets The Foreign Exchange Unit makes use of Citigroup’s international networks and global resources to deliver real-time information and currency risk analysis to customers and has earned high regard as a “market-maker”. The Risk Treasury Unit utilizes Citigroup’s extensive international network to meet the liquidity needs of customers.

Corporate Finance The Corporate Finance Department is composed of a Securitization Unit and a Real Estate Unit. The Securitization Unit was established in 1986 in Japan, long before the term "securitization" became widely known here. Since then, with its consistently client-oriented perspective, it has continuously provided innovative financial solutions to the strategic business objectives of our customers.

Acquisition Finance and Syndicated Lending Since setting up its first full-fledged loan syndication transaction in Japan in 1998, the Acquisition Finance and Syndicated Lending Department has played a leading role in the expanding Japanese loan syndication market. It provides customers with advice for primarily loan transactions based on a firm understanding of client needs and the core credit market in Japan.

Global Markets

Financial Advice

Acquisition Finance & Syndicated Lending

Global Transaction Services

Managing Risks

Global Relationship Management

Investing Money Moving Money

Raising Money

Corporate Finance

List of CJL’s Major Activities

CJL provides the following services:

1. Acceptance of Deposits

Demand deposit, savings deposit, call deposit, time deposit, negotiable deposit, non-resident Yen deposit, foreign currency deposit, etc.

2. Fund Lending etc.

Loan on bills, loan on deeds, overdraft, commercial bill discount, syndicated loan, etc. 3. Domestic Fund Transfer

Remittance, transfer and collection of payment. 4. Foreign Exchange

Remittance, transfer and collection of payments, trade finance (trade bill discount, etc.), L/C, foreign exchange (foreign currency) dealing, and other variety of services related to foreign exchange.

5. Others

(1) Guaranty of liabilities (acceptance of payments) and bill acceptance. (2) Investment/Trading in securities (Japanese government bonds). (3) Acquisition and transfer of monetary claims, and securitization related services. (4) Handling of receipt of money and other affairs pertaining to money of Government of Japan,

local public bodies, etc. (5) Dealing in financial derivatives (interest rate, currency, etc.). (6) Over-the-counter sales of mutual funds and insurance products. (7) Safekeeping and transfer of securities, etc. (8) Brokerage for clearing of securities, etc. (9) Handling of private placement of securities. (10) Financial instruments intermediary service. (11) Money exchange.


Corporate Governance Framework

Organizational Structure

Shareholders Meeting

President and CEO

Board of Statutory Auditors

Board of Directors

Management Committee

Oversight Council

Retail Banking Division

Corporate Banking Division

Corporate TreasuryMarketing

CAO

FinanceRisk Management

Human Resources

Operations & Technology

Audit & Risk Review

Business Strategy & Planning

LegalComplianceControl

Roles of Major Functions

The Board of Directors is composed of 10 Directors (as of January 1, 2011) and is responsible for important decision-making regarding CJL’s management including the preparation of the annual plan. The Executive Officers in charge of business, control and other divisions report to the Board of Directors on the status of each division as appropriate. The Board meets once a month in principle. The Board of Statutory Auditors is composed of three statutory auditors (two of them are external auditors, as of January 1, 2011) and is responsible for auditing the performance of the Directors through participation in important meetings, such as the Board of Directors, and audit conducted in accordance with an audit plan. The Management Committee is composed of the heads of the divisions of CJL and so on and is responsible for the decision-making of day-to-day operations of CJL. Sub-committees are established under the Management Committee to discuss and make decisions on more technical matters. The Oversight Council is composed of external experts and offers advice and recommendations to the Board of Directors, as its advisory body, mainly on CJL’s management, control and compliance systems.

Development of Internal Control Systems

CJL has established the following basic policies on internal control to ensure appropriate operations.

1 In order to ensure that the execution of duties of its directors and employees is in compliance with

the Company Law, the Banking Law, other applicable laws and regulations, CJL’s Articles of Incorporation (“AOI”) and the rules of organizations of which CJL is a member, CJL establishes the rules, etc. at the Board of Directors’ meeting, appropriately amends or abolishes such rules, etc. and establishes additional rules and regulations (collectively the “Rules and Regulations”) as occasionally demanded by the related departments hereafter.

2 In order to ensure that the execution of duties of its directors and employees is in compliance with

the Company Law, the Banking Law, other applicable laws and regulations, CJL’s AOI and the rules of organizations of which CJL is a member, CJL implements the following:


(1) In order to ensure that the execution of duties of its directors and employees is in compliance

with laws and regulations and CJL’s AOI, CJL establishes the Legal Division and the Compliance Division pursuant to the Organization Rules;

(2) CJL reports any non-compliance with laws and regulations and CJL’s AOI, etc. to the management under the system for employees to report such non-compliance with laws and regulations and CJL’s AOI, etc. in accordance with the Incident Handling Manual, the Compliance Manual, the Code of Conduct and other regulations; and

(3) The departments in charge of the Rules and Regulations, by cooperating with each other, confirms the status of the implementation of the Rules and Regulations, and reports the results of such confirmation to the directors and the statutory auditors, on a regular basis and as the occasion demands.

3 In connection with the retention and management of information related to the execution of duties of

its directors, CJL implements the following:

(1) CJL duly retains and manages information related to the execution of duties of its directors and employees (the “Information”) in accordance with the Record Management Policy and Standards and other regulations;

(2) CJL enables its directors and the statutory auditors to review and make copies of the Information at any time in accordance with the Record Management Policy and Standards and other regulations of CJL; and

(3) The manager of each Division is in charge of managing matters in relation to the retention and management of the Information managed by such manager.

4 In connection with risk management, CJL implements the following:

(1) CJL establishes the Risk Management Division and the Finance Division pursuant to the

Organization Rules; (2) CJL implements risk management policies in accordance with the Credit Risk Management

Policy, Market Risk Management Policy, Operational Risk Management Policy and other regulations; and

(3) The Risk Management Division and the Finance Division monitor the risk result of their responsible area , and report thereof to the Board of Directors and the statutory auditors, on a regular basis and as the occasion demands.

5 In order to ensure that the duties of its directors are executed efficiently, CJL implements the

following:

(1) The duties of directors and employees are executed duly and efficiently pursuant to the authority and rules for decision-making under the Organization Rules and other regulations; and

(2) In order to improve the efficiency of the execution of duties, CJL establishes the annual budget and reviews the achievements against the budget periodically.

6 In order to ensure that the entities within a corporate group (CJL and its parent company) duly

conduct business, CJL implements the following:

(1) To the extent permitted by laws and regulations, CJL cooperates with the internal audit departments of its parent company and affiliated companies, and audits such corporate group;

(2) To the extent permitted by laws and regulations, CJL exchanges information with internal audit departments of its parent company and affiliated companies on a regular basis and as the occasion demands, and determines the internal control issues of CJL, such as compliance and risk management, and improves the Internal Control System of CJL; and

(3) In order to prevent inappropriate transactions or inappropriate accounting treatment, such as improper transfer of profits or losses, between CJL, its parent company and affiliated companies, the internal control divisions of CJL exchanges sufficient information with related departments.


7 In connection with an employee to assist the statutory auditors with their duties (the “Statutory

Auditor Assistant”), CJL implements the following:

(1) The Statutory Auditor Assistant assists the statutory auditors with their duties in accordance with the requests or instructions of the statutory auditors; and

(2) Personnel matters, such as evaluation, concerning the Statutory Auditor Assistant requires

consultation in advance with the statutory auditors. 8 In connection with the report to the statutory auditors from its directors and employees, CJL

prescribes the following:

(1) The directors of CJL report the following matters to the statutory auditors: (i) Matters resolved at Management Committees; (ii) Matters which may cause substantial damage to CJL; (iii) Important matters concerning the monthly management situation; (iv) Important matters concerning the internal audit or risk management; (v) Material breaches of laws and regulations or of CJL’s AOI; and (vi) Any other important matters concerning compliance.

(2) CJL enables its employees to report to the statutory auditors in the case where the employees discover the material facts listed in Items (ii) or (v) above.

9 In order to ensure that an audit is conducted effectively by the statutory auditors, CJL implements

the following:

(1) CJL enables the statutory auditors to exploit professionals, such as lawyers and accountants, as necessary, in order to receive advice concerning the duties of the statutory auditors; and

(2) The Board of Directors examines the items and methods of auditing on a regular basis and confirms that such items cover all necessary matters, and suggests amendment of such items and methods as necessary.


Risk Management Framework

CJL’s risk management framework balances strong corporate oversight by the Board of Directors with well defined oversight roles and responsibilities amongst the Control functions covering the various risk types. CJL has the following three layers of risk management or control:

1) Risk ownership by the Business Divisions themselves; 2) Oversight by the Control Divisions (“Control Divisions”) – Compliance, Control, Risk

Management, Legal, Finance and Operations and Technology, and, for HR related risks, HR; and 3) All subject to review by Internal Audit / ARR.

All three layers of control work together to achieve CJL’s shared goals with the following particular items:

• To maintain a highly effective control environment and to establish efficient, proactive risk management; and

• To foster appropriate solutions for our customers and to facilitate business growth in accordance with agreed strategic goals and with the risk management capacity of CJL.

CJL has a Risk Management and Control governance model whereby the Business Division Heads are responsible for the risks incurred in their Divisions, and the Heads of the Control Divisions are responsible as follows:

• Risk Management Division has oversight for credit, market, operational, country and payment systems / financial market infrastructure risk;

• Compliance Division has oversight for compliance risks associated with clients, products and services, and regulatory risks;

• Finance Division has oversight for risks relating to finance and tax; and • Legal Division ensures that CJL is appropriately managing legal and regulatory related risks.

Also there are several risk oversight committees such as follows:

• Credit Risk Management Committee • Asset and Liability Committee • Business Risk, Control & Compliance Committee • Retail Banking - Products and Services Approval Committee • Corporate Banking - Capital Markets Approval Committee • System and Operations Committee

Additionally, CJL has recently adopted a comprehensive risk management approach whereby it has appointed a Comprehensive Risk Manager (“CRM”) who heads the Comprehensive Risk Management Secretariat consisting of the Coordinator of Comprehensive Risk Management and representatives from each risk oversight committee. The comprehensive risk management organization is responsible for, among other things:

• To identify those risks to be managed • To quantify or assess each risk • To make an integrated assessment of those risks • To monitor and review those identified risks • To report to the Management Committee the risks in an integrated manner • To work with Capital Adequacy team • To review and plan the comprehensive risk management improvements

Under the scheme, Comprehensive Risk Manager will ensure that the Management Committee and the Board of Directors are kept advised of the risks of and to CJL in a comprehensive and/or an integrated manner through the Comprehensive Risk Management reporting.


Compliance Framework

Basic Policy

As a bank, CJL fully recognizes the importance of its social responsibilities and public nature of its business. We understand that conducting businesses with fairness and integrity based on the Code of Conduct and in compliance with laws and regulations, etc. is the basic principle of our management, and is the true meaning of “Compliance”. In order for us to accomplish “Compliance”, the officers and employees of CJL are responsible and will continue our efforts in conducting our businesses in compliance with laws and regulations, etc., and in accordance with the Code of Conducts.

Compliance Management Framework CJL’s Compliance Division covers compliance related matters and is independent from businesses. The Division consists of 4 units under the Chief Compliance Officer; (i) Retail Banking Compliance Unit, (ii) Corporate Banking Compliance Unit, (iii) Anti-Money Laundering Compliance Unit and (iv) Infrastructure Unit. The first two units are responsible for compliance matters relevant to businesses, AML Compliance Unit covers matters relevant to anti-social forces and the prevention of money laundering, and Infrastructure Unit is responsible for matters relevant to the whole banking operations. The Compliance Division owns the Code of Conduct and, in accordance with Compliance Policy, promotes compliance and cultivates a compliance mindset, through following activities.

• Implementation, promotion and periodic follow-up of Compliance Program – a program for implementing specific measures to ensure compliance

• Implementation of Compliance Manual and other compliance-related policies, rules, guidelines, etc.

• Various Compliance Training which includes annual mandatory compliance training provided by the Compliance Division and training for Directors and Executive Officers which is provided by the Training Unit.

• Review from compliance point of view in new products and services approval committee • Development of infrastructure for the enhancement of compliance framework.

The Compliance Division reports compliance related issues and compliance status to Business Risk Control and Compliance Committee and Management Committee on a regular and ad-hoc basis. Material issues are to be escalated to Board of Director meeting through Management Committee. In addition, CJL’s legal compliance status is monitored and controlled by the Control Divisions in close coordination with Compliance Division in order to ensure that that the proper legal compliance framework is in place within the organization.

Preventive Measures against Anti-Social Forces and Money Laundering CJL considers that preventive measures against anti-social forces and money laundering are one of the most important parts of legal compliance as a financial institution with public nature, and has continued its efforts to establish a proper prevention system.

Measures against the Breach of Legal Compliance It is the responsibility of each of the directors and our employees to comply with the Code of Conduct that provides an overview of some of the key policies of which all need to be aware. We strongly encourage employees to raise concerns or questions regarding ethics and applicable laws, regulations and policies, and to report violations and suspected violations in accordance with the relevant internal policies. We believe that it is critical that we identify issues at an early stage and proactively resolve those issues in order to maintain the highest standards of conduct as a financial institution. CJL has established, in addition to the standard reporting procedures, an Ethics Hotline in order to properly take measures supporting compliance.


Diversity and CSR Activities

CJL pursues CSR (Coporate Social Responsibility) activities in alignment with Citigroup’s global policies and priorities. We embrace the responsibility, as a socially responsible financial group, to make a difference in the community to promote environmental and social sustainability by building positive relationships with customers, employees and their families, the community, and stakeholders. Through our CSR activities, we respond to corporate governance and compliance initiatives and also reinforce our commitment to Financial Education, Community Development, the Environment, and Diversity with employees from various background and nationalities.


Financial Education Environment

Taking advantage of our business expertise, we provide various financial education programs from elementary school to University. We provide learning materials and support for financial education programs, so that the next generation of children can learn not just about money and the economy, but also how to think effectively, and ultimately plan their careers and lives in order to realize their dreams.

CJL believes that working to promote environmental and social sustainability is a good business practice. Under the banner of “GreenCiti”, we are committed to protect the environment through the following initiatives: <Major Activities>

- The Equator Principles (Citi was a drafting member and has adopted these principles)

- The Carbon Principle (Citi was a drafting member and has adopted these principles) <Major Activities>

- Achieved LEED (Leadership in Energy and Environmental Design) Certification • Citibank Tokyo Call Center received Silver certification

(June, 2009)

- Travel to the Future - Student City - Citi Success Fund

Diversity

CJL values and promotes Diversity as a strategic activity which is led by our Chief Diversity Officer, a recent strategic appointment to our Management Team. By respecting and accepting various values, ways of thinking and attributes such as nationality, age, gender, sexual orientation, language and religion, we create an environment where differences are respected. Creating an environment where Diversity thrives, actively encourages a range of thoughts and ideas in support of our business goals. We encourage our employees to participate and take responsibility for their engagement in Diversity activities, internally and externally which adds to the richness of the society in which we live. <Major Activities>

- Improving career development for women

- Work-Life Balance - Encourage the hiring of people

with disabilities - Support for LGBT

- MESE (Management Economic Simulation Exercise) - National Economics Quiz Tournament

(Economics Koshien) • Aoyama Branch received Gold certification (May, 2010)

- Office Initiatives • Energy and Resource Saving - University Program • Paperless processes • Recycling in the office

Community Development

CJL strives to make a difference where our employees live and work. We encourage and provide support for philanthropic activities undertaken by our employees and their families, leading many of them to participate actively in the community. <Major Activities>

- United Nations World Food Program (WFP) School Feeding Initiatives through Cafeteria Charity Program "Share Your Lunch"

- FIT (Financial Industry in Tokyo) for Charity Run - YMCA Charity Run - Citi Volunteer Program - Global Community Day - Supporting NPOs and NGOs - Relief Donations


Citibank Japan Ltd. FY 2010 Interim

Financial Information

21

22

1. Matters Related to Major Business

＜ Business Overview＞

• Net income for this period ended September 30, 2010 was 9.8 billion yen, up by 3.6 billion yen from the same period of the last fiscal year.

• Ordinary income totaled 53.0 billion yen, down by 7.1 billion yen from the same period of the last fiscal year.

Interest income totaled 27.8 billion yen, down by 11.6 billion yen from the same period of the last fiscal year. Fees and commissions totaled 10.4 billion yen, up by 0.5 billion yen from the same period of the last fiscal

year. Other ordinary income of 12.4 billion yen, up by 2.5 billion yen from the same period of the last fiscal year.

• Ordinary expenses totaled 38.9 billion yen, down by 11.2 billion yen from the same period of the last fiscal year.

Interest expenses totaled 6.0 billion yen, down by 7.4 billion yen from the same period of the last fiscal year. General and administrative expenses totaled 30.8 billion yen, up by 0.7 billion yen from the same period of

the last fiscal year. Provision of allowance for loan losses in Other expenses was down 4.2 billion yen from the same period of

the last fiscal year. • Ordinary profit totaled 14.0 billion yen, up by 4.0 billion yen from the same period of the last fiscal year.

• Income before income taxes including extraordinary income and extraordinary losses totaled 18.0 billion yen, up

by 8.0 billion yen from the same period of the last fiscal year. • As of September 30, 2010, total assets were 5,028.7 billion yen, up by 428.0 billion yen from the last fiscal year

ended March 31, 2010.

Cash and deposits to other banks (due from banks) totaled 2,720.6 billion yen, down by 396.5 billion yen from the last fiscal year end, due in large part to reduction in placements to professional market.

Receivables under resale agreement totaled 568.9 billion yen, while no balance at last fiscal year end. Loans totaled 287.7 billion yen, up by 4.6 billion yen. Available for sales securities (“AFS securities”) decreased by 36.4 billion yen to 701.2 billion yen.

• Total liabilities were 4,766.7 billion yen, up by 478.3 billion yen from the last fiscal year ended March 31, 2010.

Deposits from customers totaled 4,017.7 billion yen, up by 296.8 billion yen from the last fiscal year end.

• Total net assets were 262.0 billion yen, down by 50.2 billion yen from the last fiscal year end including 61.0 billion yen payment as interim dividend.

• Cash flows from operating activities in the year under review totaled 193.8 billion yen (Inflow). Cash from

investing activities was 37.2 billion yen (Inflow). Cash from financing activities was 61.0 billion yen (Outflow). As a result, cash and cash equivalents as of the end of the period totaled 436.6 billion yen.

• The capital adequacy ratio (National standards) at the end of this period was 22.04%. (25.13% as of March

31,2010)

＜Summary of Major Business/Financial Indicators＞ (Millions of Yen)

Ordinary income 103,389 60,225 53,028 191,258 112,113

Ordinary profit 21,914 10,030 14,085 44,223 21,977

Net income ( Interim ) 13,571 6,119 9,810 - -

Net income - - - 26,357 12,170

Capital stock 123,100 123,100 123,100 123,100 123,100

Total Net assets 282,524 306,785 262,047 299,305 312,307

Total assets 6,737,828 5,148,830 5,028,789 6,189,258 4,600,730

Deposits 5,768,846 4,346,618 4,017,785 5,311,045 3,720,949

Loans and bills discounted 290,021 272,717 287,741 294,390 283,100

Available for sale (AFS) securities 698,312 524,423 701,253 688,830 737,742

Total shares issued (thousand shares) 244,200,000 244,200,000 244,200,000 244,200,000 244,200,000

Capital adequacy ratio (National standard) 16.61% 24.61% 22.04% 23.56% 25.13%

Number of employees 1,609 1,529 1,661 1,548 1,608

March 2010Year end

(Apr 1, 2009- Mar 31, 2010)

Interim FiscalPeriod ended

Sep. 2008(Apr 1, 2008

- Sep 30, 2008)


Sep. 2009 (Apr 1, 2009

-Sep 30, 2009)


Sep. 2010 (Apr 1, 2010

- Sep 30, 2010) *

March 2009 Year end

(Apr 1, 2008 - Mar 31, 2009)

(Note)

*Financial figures are unaudited.

23

＜Major Business/Financial Indicators＞ Gross operating profit

(Millions of Yen)

Domestic International Total Domestic International Total

Interest income 4,383 35,103 39,487 4,346 23,537 27,884

Interest expenses 861 12,626 13,487 899 5,121 6,021

Fees and commissions 5,147 4,777 9,925 6,158 4,277 10,435

Fees and commissions paid 1,133 166 1,299 1,226 181 1,408

Trading income - - - 1,303 255 1,558

Trading losses (1,801) 2,423 622 219 191 410

Other ordinary income 2,093 7,735 9,828 1,109 11,293 12,402

Other ordinary expenses 442 0 442 4 227 231

10,988 32,401 43,389 10,567 33,641 44,209

1.64% 1.77% 1.73% 1.20% 2.45% 1.96%

Trading income and losses

Other ordinary income and expenses

Gross operating profit Gross operating profit ratio

Interim Fiscal Period ended Sep. 2009(Apr 1, 2009 - Sep 30, 2009)


Interest income and expenses

Fees and commission

（Notes）

1. Domestic operations are yen-denominated transactions and international operations are foreign currency-denominated transactions conducted in Japan. However, non-resident yen-denominated transactions and offshore account transactions, etc. are included in the international operations.

2. Gross operating profit ratio ＝(gross operating profit / average balance of interest-earning assets) x 100 ÷ (the number of days of the period / 365)

24

Average balance of Interest-Earning Assets / Interest-Bearing Liabilities (Millions of Yen)

Domestic International Total Domestic International TotalAverage balance 1,334,573 3,647,529 4,982,103 1,747,929 2,735,935 4,483,865

Interest 4,383 35,103 39,487 4,346 23,537 27,884

Yield (%) 0.65 1.91 1.58 0.49 1.71 1.24

Loans and bills discounted Average balance 154,786 129,339 284,126 173,338 119,021 292,359

Interest 1,293 1,386 2,679 1,262 902 2,165

Yield (%) 1.66 2.13 1.88 1.45 1.51 1.47

AFS securities Average balance 567,562 6,869 574,432 668,626 6,492 675,119

Interest 2,690 71 2,762 2,562 65 2,628

Yield (%) 0.94 2.08 0.95 0.76 2.01 0.77

Call loans Average balance 14,868 69,729 84,598 33,252 71,718 104,970Interest 29 203 232 17 156 174Yield (%) 0.39 0.58 0.54 0.10 0.43 0.33

Receivables under resale agreements Average balance 300,070 - 300,070 460,725 - 460,725

Interest 176 - 176 274 - 274

Yield (%) 0.11 - 0.11 0.11 - 0.11

Monetary claims bought Average balance 3,791 - 3,791 3,273 - 3,273

Interest 31 - 31 26 - 26

Yield (%) 1.63 - 1.63 1.61 - 1.61Due from banks with interest Average balance 293,494 3,370,531 3,664,025 408,711 2,459,549 2,868,261

Interest 148 33,043 33,192 196 22,060 22,257

Yield (%) 0.10 1.95 1.80 0.09 1.78 1.54

Average balance 1,638,499 3,145,682 4,784,182 2,068,901 2,187,761 4,256,662

Interest 861 12,626 13,487 899 5,121 6,021

Yield (%) 0.10 0.80 0.56 0.08 0.46 0.28

Deposits Average balance 1,557,005 3,064,719 4,621,725 1,907,363 2,102,147 4,009,510

Interest 708 12,582 13,290 787 5,098 5,886Yield (%) 0.09 0.81 0.57 0.08 0.48 0.29

Negotiable certificatesof deposit Average balance 50,107 - 50,107 159,818 - 159,818

Interest 127 - 127 110 - 110

Yield (%) 0.50 - 0.50 0.13 - 0.13Call money Average balance 13,425 24 13,449 1,640 24 1,664

Interest 5 0 5 0 0 0

Yield (%) 0.08 2.15 0.08 0.07 0.29 0.08Payables under repurchase agreements

Average balance - - - - - -

Interest - - - - - -Yield (%) - - - - - -

Borrowed money Average balance 17,960 - 17,960 79 0 79

Interest 19 - 19 - - -

Yield (%) 0.21 - 0.21 - - -



Interest-earning assets

Interest-bearing liabilities

(Notes) 1. Average balance of foreign currency-denominated transactions in Japan, which are classified as international operations,

is calculated based on the daily basis. 2. Average balance of and interest accrued from borrowing and lending between domestic and international operations are

offset.

25

Analysis of interest received / paid

(Millions of Yen)


Volume-related increase (decrease) 1,883 (16,981) (10,981) 1,357 (8,773) (3,946)Rate-related increase (decrease) (2,624) (13,473) (20,214) (1,394) (2,792) (7,655)Net increase (decrease) (741) (30,454) (31,196) (37) (11,565) (11,602)Volume-related increase (decrease) (362) 67 (416) 154 (110) 77Rate-related increase (decrease) (170) (726) (775) (184) (373) (591)Net increase (decrease) (533) (658) (1,192) (30) (483) (514)

AFS Securities Volume-related increase (decrease) (521) 0 (533) 476 (3) 479Rate-related increase (decrease) 186 0 197 (603) (2) (613)Net increase (decrease) (335) 0 (335) (127) (6) (133)

Call loans Volume-related increase (decrease) (165) 856 (40) 35 5 55Rate-related increase (decrease) (4) (771) (45) (47) (52) (113)Net increase (decrease) (170) 84 (85) (11) (46) (58)Volume-related increase (decrease) 176 - 176 88 - 88Rate-related increase (decrease) - - - 9 -Net increase (decrease) 176 - 176 98 - 98

Monetary claimsbought

Volume-related increase (decrease)(29) (12) (38) (4) - (4)

Rate-related increase (decrease) (2) - (5) 0 - 0Net increase (decrease) (31) (12) (44) (4) - (4)Volume-related increase (decrease) 148 (16,912) (12,983) 57 (8,906) (7,181)Rate-related increase (decrease) - (12,101) (15,881) (9) (2,076) (3,753)Net increase (decrease) 148 (29,014) (28,865) 47 (10,982) (10,934)Volume-related increase (decrease) (413) (6,995) (7,861) 226 (3,844) (1,481)Rate-related increase (decrease) (849) (23,877) (24,274) (188) (3,659) (5,985)Net increase (decrease) (1,263) (30,872) (32,136) 37 (7,504) (7,466)

Deposits Volume-related increase (decrease) (247) (6,826) (7,172) 158 (3,909) (1,749)Rate-related increase (decrease) (572) (23,835) (24,309) (78) (3,574) (5,654)Net increase (decrease) (819) (30,661) (31,481) 79 (7,483) (7,404)Volume-related increase (decrease) (306) - (306) 275 - 275Rate-related increase (decrease) (59) - (59) (292) - (292)Net increase (decrease) (366) - (366) (17) - (17)

Call money Volume-related increase (decrease) (57) (5) (61) (4) 0 (4)Rate-related increase (decrease) (31) 0 (32) 0 0 0Net increase (decrease) (88) (5) (94) (4) 0 (5)Volume-related increase (decrease) - - - - -Rate-related increase (decrease) - - - - -Net increase (decrease) - - - - -

Borrow ed Money Volume-related increase (decrease) 78 (50) 167 (18) - (18)Rate-related increase (decrease) (59) - (199) 0 - 0Net increase (decrease) 18 (50) (32) (19) - (19)


9

-

-

-

Negotiablecertif icates ofdeposit

Payables underrepurchaseagreements


Interest received

Interest paid

Loans and billsdiscounted

Receivables underresale agreements

Due from banksw ith interest

（Note）Changes due to a combination of volume - and rate - related increase (decrease) have been included in rate - related

increase (decrease).

26

Yield on interest-earning assets, Yield on interest-bearing liabilities, Net yield/Interest rate (%)


Yield on interest-earningassets

0.65 1.91 1.58 0.49 1.71 1.24

Yield on interest-bearingliabilities including generalexpenses

2.12 1.64 1.80 1.73 1.65 1.69

Net yield / Interest rate (1.47) 0.27 (0.22) (1.23) 0.05 (0.45)



Fees and commissions

(Millions of Yen)


5,147 4,777 9,925 6,158 4,277 10,435

Other fees and commissions 4,634 3,003 7,637 5,624 2,590 8,215

1,133 166 1,299 1,226 181 1,408

Other fees and commissions 948 66 1,015 1,030 31 1,061

4,014 4,611 8,626 4,931 4,095 9,027

Interim Fiscal Period ended Sep. 2009 (Apr 1, 2009 - Sep 30, 2009)


Fees and commissions Fees and commissions on fundtransfer 513 1,774 2,287 533 1,687 2,220

346

Fees and commissions paid Fees and commissions on fundtransfer 184 99

Fees and commissions profit

284 196 149

27

Trading income and losses (Millions of Yen)


- - - 1,303 255 1,558

Other trading income - - - - - -

(1,801) 2,423 622 219 191 410

Other trading losses - - - - - -

1,801 (2,423) (622) 1,083 63 1,147



Trading income

Gains on trading accountsecurities transactions - - - - - -

Income from securitiesand derivatives related totrading transactions

- - - - - -

Income from trading-related derivativestransactions

- - - 1,303 255 1,558

Trading losses

Losses on tradingsecurities and Derivatives 51 - 51 - - -

-

Losses on securities andderivatives related totrading transactions

(235) 557 322

Trading profit

219 191 410

Losses on trading-relatedderivatives transactions (1,618) 1,865 247 - -

28

Other ordinary income and expenses (Millions of Yen)


2,093 7,735 9,828 1,109 11,293 12,402

Gains on sales of bonds 2,093 - 2,093 1,109 - 1,109

Gains on redemption of bonds - - - - - -

Others - 144 144 - - -

442 0 442 4 227 231

Losses on sales of bonds 442 - 442 4 - 4

Losses on redemption ofbonds - - - - - -

Losses on devaluation of bonds - - - - - -

Others - 0 0 - 227 227

1,650 7,735 9,385 1,104 11,065 12,170Other ordinary profit

- - -

Expenses on derivativesother than for trading or hedging

- - - - - -

Losses on foreign exchange transactions - - -

- - -

Other ordinary expenses

Income from derivativesother than for trading or hedging

- - -



Other ordinary income

Gains on foreign exchange transactions - 7,590 7,590 - 11,293 11,293

29

General and administrative expenses (Millions of Yen)

Salary 8,791 9,293

Accrued pension cost 844 922

Welfare expenses 94 58

Depreciation cost 1,028 1,193

Rental fees on land, buildings, and machinery 2,592 2,713

Maintenance cost 148 215

Supplies cost 137 157

Utilities cost 125 103

Expenses of business trip 79 142

Communication charge 724 704

Advertising expenses 1,113 2,121

Tax and public charges 1,242 1,112

Others 13,152 12,101

Total 30,074 30,841



Profit ratio (%)

Ordinary profit to total assets 0.37 0.58

Ordinary profit to capital (net assets) 6.60 9.78

Net income to total assets 0.22 0.40

Net income to capital (net assets) 4.02 6.81



Ordinary profit / (Number of days of the period / 365)

Average balance of total assets (excl. customers' liabilities for acceptances and guarantees)

Ordinary profit / (Number of days of the period / 365)

　（Beginning net assets + net assets）/2

Net income / (Number of days of the period / 365)

Average balance of total assets (excl. customers' liabilities for acceptances and guarantees)

Net income / (Number of days of the period / 365)

（Beginning net assets + net assets）/2

×100

= ×100

×100

×100

=

=

=

Ordinary profit to total assets

Ordinary profit to capital (net assets)

Net income to total assets

Net income to capital (net assets)

30

<Indicators for Deposits>

Average balance by deposit type (Millions of Yen)


Liquid deposits 1,356,492 - 1,356,492 1,499,671 - 1,499,671

Time deposits 195,631 - 195,631 403,550 - 403,550

Negotiable certif icates ofdeposit

50,107 - 50,107 159,818 - 159,818

Others 4,881 3,064,719 3,069,601 4,140 2,102,147 2,106,288

Total 1,607,113 3,064,719 4,671,833 2,067,181 2,102,147 4,169,328

As of Sep. 30, 2009 As of Sep. 30, 2010

(Note) Liquid deposits ＝ current deposits ＋ ordinary deposits ＋ saving deposits ＋ deposits at notice

Time deposits balance by remaining period

(Millions of Yen)

Others - - - - - - - - - - - - - -

Total 138,136 35,785 37,304 3,461 683 2,089 217,461 341,183 45,663 27,504 3,199 914 587 419,051

As of Sep. 30, 2009 As of Sep. 30, 2010

Less than3 months

Over 3months,less than6 months

Over 6months,less than

1 year

Over 1year,

less than2 years

Over 2years,

less than3 years

Over 3years

TotalLess than3 months

Over 3months,less than6 months

Over 6months,less than

1 year

Over 1year,

less than2 years

Over 2years,

less than3 years

Over 3years

Total

Fixed interesttime deposits

135,069 27,961 36,771 2,901 683 1,503 204,891 338,116 37,839 26,971 3,199 914 1 407,042

Floating interesttime deposits 3,067 7,824 533 560 - 585 12,569 3,067 7,824 533 - - 585 12,009

31

<Indicators for Loans and Bills Discounted>

Balance by loan type (1) Balance at the end of period


Loans on bills 24,172 1,776 25,949 23,132 363 23,495

Loans on deeds 96,189 113,939 210,129 115,291 107,104 222,396

Overdrafts 32,771 3,215 35,986 39,267 2,558 41,825

Bills discounted 652 - 652 23 - 23

Total 153,786 118,930 272,717 177,715 110,025 287,741

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

(2) Average balance (Millions of Yen)


Loans on bills 23,574 1,745 25,319 23,403 1,707 25,110

Loans on deeds 106,664 122,647 229,312 113,080 112,493 225,573

Overdrafts 23,997 4,945 28,943 36,527 4,820 41,348

Bills discounted 550 - 550 327 - 327

Total 154,786 129,339 284,126 173,338 119,021 292,359

As of Sep. 30, 2009 As of Sep. 30, 2010

Balance of loans and bills discounted by remaining term

(Millions of Yen)

Less than1 year

Over 1year,lessthan

3 years

Over 3years,lessthan

5 years


7 years

Over 7years Total

Less than1 year

Over 1year,lessthan

3 years


5 years


7 years

Over 7years Total

Fixed interestloans and bills discounted 51,763 1,305 126 105 141 53,441 24,483 63 113 105 286 25,052

Floating interestloans and bills discounted 75,624 20,077 18,746 27,471 77,355 219,275 136,116 28,813 23,817 19,865 54,075 262,688

Total 127,388 21,383 18,872 27,577 77,496 272,717 160,600 28,877 23,930 19,970 54,362 287,741

As of Sep. 30, 2009 As of Sep. 30, 2010

32

Balance of loans and bills discounted by collateral type (Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Type of collateral pledged Loan and bills discounted Loan and bills discounted

Deposits 11,971 10,602

Securities 9,083 7,660

Claims - -

Commodities - -

Real estate 40,103 43,046

Foundations - -

Others 11,177 8,231

Sub-total 72,335 69,540

Guarantees 63,594 54,629

Clean credit 136,787 163,571

Total 272,717 287,741

Balance of customers’ liabilities for acceptances and guarantees by collateral type

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Deposits 1,948 1,507

Securities 37,647 29,937

Claims - -

Commodities - -

Real estate - -

Foundations - -

Others - -

Sub-total 39,596 31,445

Guarantees - -

Clean credit 45,331 51,452

Total 84,927 82,898

Type of collateral pledgedCustomers' liabilities for acceptances

and guaranteesCustomers' liabilities for acceptances

and guarantees

Balance of loans and bills discounted by use

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Lending for equipments 128,638 112,852

Lending for operations 144,078 174,888

Total 272,717 287,741

33

Balance of loans and bills discounted by industry

(Millions of Yen)

As of Sep. 30, 2010 As of Sep. 30, 2009

Amount Amount (%) (%)

Domestic

Manufacturing 39,727 18,515 6.79% 13.81%

- Agriculture - - -

Forestry - - - -

Fishery - - - -

- Mining - - -

Construction - - - -

- Electric/gas/heat supply/water - - -

7,076 2.46%Information and telecommunications 4,559 1.67%

Shipping / transportation 0.00%- - 1

Wholesale / retail 14,102 20,904 7.67% 4.90%

28,662 Finance / insurance 14,641 5.37% 9.96%

Real estate 32,250 34,923 12.81% 11.21%

3,383 1.17%Services 6,205 2.27%

- Local government - - -

61,082 21.23%Individuals 58,687 21.52%

Overseas 101,454 114,280 41.90% 35.26%

Total 287,741 272,717 100% 100%

Balance of loans and bills discounted for small and medium size businesses

(Millions of Yen)

As of Sep. 30, 2010 As of Sep. 30, 2009

Total loans and bills discounted (A) 272,717 287,741

Balance of loans for small and medium size145,858 170,466corporations etc. (B)

(B) / (A) 53.48% 59.24%

(Note) Small and medium size corporation etc. refers as followings;

- companies with its capital less than or equal to 300 million yen (100 million yen for wholesale businesses and 50 million yen for retail sale and services businesses)

- companies with its full-time employees less than or equal to 300 on the payroll (100 for wholesale, 50 for retail sale and 100 for services)

- individuals.

Balance of specified overseas claims

CJL does not hold specified overseas claims.

34

Deposit-loan ratio (%)


Average balance 9.90 3.23 5.47 8.38 5.66 7.01

As of Sep. 30, 2009 As of Sep. 30, 2010

Balance at the end of period 11.47 3.29 5.52 8.32 5.26 6.80

(Note) Negotiable certificates of deposit are included in “deposits”.

Allowance for loan losses (Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Beginning EndingEnding BeginningCategory Increase Increase Decrease Decreasebalance BalanceBalance balance

Allowance for general loan 2,937 6,791 1,176 6,696 2,937 6,791 6,696 1,176losses

Allowance for specific loan 518 890 2,764 1,978 518 890 1,978 2,764losses

Specified overseas claim - - - - - - - -reserve account

Total 3,455 7,682 3,940 8,674 3,455 7,682 8,674 3,940

Loan write-offs

None

35

Risk management Loans (Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Bankrupt loans 1,776 -

Past due loans/non-accrual loans 1,251 3,137

Past due loans (3 months or more) 26,911 26,296

Restructured loans 1,957 40

Total 31,896 29,475

(Notes)

1. “Bankrupt loans” are loans on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest because they are past due for a considerable period of time or for other reasons (excluding write-offs, hereinafter “non-accrual loans”), and as defined in Article 96-1-3 and 96-1-4 of the Enforcement Ordinance of the Japanese Corporate Tax Law.

2. “Past due loans/non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are deferred in order to support the borrowers’ recovery from financial difficulties.

3. “Past due loans (3 months or more)” are loans on which the principal or interest is past due for three months or more from the next day of prescribed payment date, excluding “bankrupt loans”. Of the total amount of “Past due loans (3 months or more)” one loan of 26,250 million yen was successfully closed in sale transaction on October 1, 2010.

4. “Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness) to support the borrowers’ recovery from financial difficulties, excluding “bankrupt loans,” “past due loans/non-accrual loans” and “past due loans (3 months or more).”

Claims under the Financial Reconstruction Law (Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Bankrupt / De facto Bankrupt 2,152 1,456

In Danger of Bankrupt 940 1,746

Need attention 28,868 26,337

Subtotal (A) 31,961 29,540

Normal 414,310 440,310

Total (B) 446,272 469,851

(A) / (B) 7.16% 6.28%

(Notes) 1. “Bankrupt / De facto Bankrupt” are claims to bankrupt borrowers in the event of filing for commencement of bankruptcy,

corporate reorganization, rehabilitation proceedings and loans pursuant to these proceedings. 2. “In Danger of Bankrupt” are claims of which borrowers are not in bankruptcy but their financial status and business performance

deteriorate, with a low collectability of principal and interest under the terms and conditions of the contract. 3. “Need attention” are past due loans (3 months or more) and restructured loans from “risk management loans”. Of the total

amount of “Need attention” one loan of 26,250 million yen was successfully closed in sale transaction on October 1, 2010. 4. “Normal” are claims classified as other than the credit listed in 1 to 3 above, with no problems seen with borrowers’ financial

status and business performance.

36

<Indicators for Securities >

Average balance of trading securities

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Trading Japanese government bonds 36,005 -

Trading municipal bonds - -

Trading government guaranteed bonds - -

Other trading securities - -

Trading bonds lending - -

Total 36,005 -

Average balance of securities related to trading transactions

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Trading Japanese government bonds - 21,564

Trading municipal bonds - -

Trading government guaranteed bonds - -

Other trading securities - -

Trading bonds lending - -

Total 21,564-

Balance of AFS securities by remaining period

(Millions of Yen)

As of Sep. 30, 2010 As of Sep. 30, 2009

Up to 1 5 - 10 5 - 10 Over 10 1 - 5 Over 10 Indefinite IndefiniteUp to 1 1 - 5Category TotalTotalyear years years years term years years term year years

Japanese 20,098 397,802 99,559 33,028 - 517,460 55,528 591,924 680,481- - -Government bonds

Municipal bonds - - - - - - - - - - - -

Corporate bonds - - - - - 14,689 14,689- - - - -

- - - - - Stocks - - - - - - -

Foreign bonds 1,015 - 5,948 6,081 - - - 6,963 - - - 6,081

Foreign stocks - - - - - - - - - - - -

Others - - - - - - - - - - - -

Total 21,113 397,802 105,508 39,110 - - - 524,423 55,528 606,613 - 701,253

37

Average balance of AFS securities (Millions of Yen)

As of Sep. 30, 2010 As of Sep. 30, 2009

International Domestic International Total Domestic Total

Japanese Government bonds 567,473 - 664,506567,473 664,506-

- - - - - -Municipal bonds

Corporate bonds 88 - 4,12088 4,120-

- - Stocks - - - -

Foreign bonds 6,492 - 6,869 6,869 6,492-

Foreign stocks - - - - - -

Others - - - - - -

Total 567,562 6,492 6,869 574,432 668,626 675,119

Deposits-AFS securities ratio

(%)


Average balance 35.31 0.22 12.29 32.34 0.30 16.19

As of Sep. 30, 2009 As of Sep. 30, 2010

Balance at the end of period 28.63 0.26 11.92 32.57 0.29 16.59

(Note) Negotiable certificates of deposit are included in “deposits.”

38

2. Financial statements <Balance Sheet>

(Millions of Yen)

As of September 30, 2009 As of September 30, 2010 (*)

Amount Amount

Cash and due from banks 3,421,636 2,720,674Call loans 291,504 72,390Receivables under resale agreements 49,992 568,966Monetary claims bought 2,730 2,849Trading assets 170,569 212,500Securities 524,423 701,253Loans and bills discounted 272,717 287,741Foreign exchanges 85,198 95,821Other assets 231,563 273,031Tangible fixed assets 3,663 3,285Intangible fixed assets 12,499 8,839Deferred tax assets 5,086 2,477Customers’ liabilities for acceptances and guarantees 84,927 82,898Allowance for loan losses (7,682) (3,940)

5,148,830 5,028,789

Deposits 4,346,618 4,017,785Negotiable certificates of deposit 51,900 207,800Call money 10,000 -Trading liabilities 68,059 65,184Borrowed money 2 1Foreign exchanges 66,069 119,477Other liabilities 209,146 269,695

Income taxes payable 4,510 6,097Asset Retirement Obligations - 693Others 204,636 262,904

Provision for bonuses 1,408 1,571Provision for directors' bonuses 73 86Provision for retirement benefits 2,347 2,063Provision for directors' retirement benefits 14 21Reserves for restructuring 375 69Reserves for business reorganization 1,099 86Acceptances and guarantees 84,927 82,898

4,842,044 4,766,741

Capital stock 123,100 123,100Capital surplus 121,100 121,100

Legal capital surplus 121,100 121,100Retained earnings 57,084 11,945

Legal retained earnings - 2,000Other retained earnings 57,084 9,945

Retained earnings brought forward 57,084 9,945Total Shareholders' equity 301,284 256,145Valuation difference on AFS securities 5,502 5,903Deferred gains or losses on hedges (1) (2)Total Valuation and translation adjustments 5,501 5,901Total net assets 306,785 262,047Total liabilities and net assets 5,148,830 5,028,789

Total liabilitiesNet Assets

Account Name

Assets

Total assetsLiabilities

(Note)*Financial figures are unaudited.

39

<Income Statement> (Millions of Yen)

60,225 53,028Interest income 39,487 27,884

(Interest on loans and bills discounted) 2,679 2,165(Interest and dividends on securities) 2,762 2,628

Fees and commissions 9,925 10,435Trading income - 1,558Other ordinary income 9,828 12,402Other income 984 747

　 50,194 38,942Interest expenses 13,487 6,021

(Interest on deposits) 13,290 5,886Fees and commissions paid 1,299 1,408Trading losses 622 410Other ordinary expenses 442 231General and administrative expenses 30,074 30,841Other expenses 4,267 28

10,030 14,085Extraordinary income 0 4,710Extraordinary losses 24 757

10,006 18,039Income taxes - current 3,887 6,063Income taxes - deferred - 2,165

Total income taxes 3,887 8,2286,119 9,810

Ordinary expenses

Ordinary profit

Income before income taxes

Net income

Account NameFrom Apr. 1, 2009

to September 30, 2009From Apr. 1, 2010

to September 30, 2010(*)

Ordinary income

(Note)*Financial figures are unaudited.

40

<Statement of Changes in Net Assets> (Millions of Yen)

From Apr. 1, 2009 to Sep. 30, 2009

From Apr. 1, 2010 to Sep. 30, 2010

Shareholders' equityCapital stock

Balance at the end of previous period 123,100 123,100Changes of items during the interim period

Total changes of items during the interim period - -Balance at the end of the current interim period 123,100 123,100

Capital surplusLegal capital surplus


Total changes of items during the interim period - -Balance at the end of the current interim period 121,100 121,100

Retained earningsLegal retained earnings

Balance at beginning of the period - -Changes in amounts during the interim period

Dividends of retained earnings - 2,000Total changes of items during the interim period - 2,000

Balance at the end of the current interim period - 2,000Other retained earnings

Earned surplus brought forwardBalance at the end of previous period 50,964 63,135Changes of items during the interim period

Dividends of retained earnings - (63,000)Net income 6,119 9,810Total changes of items during the interim period 6,119 (53,189)

Balance at the end of the current interim period 57,084 9,945Total retained earnings

Balance at beginning of the period 50,964 63,135Changes in amounts during the interim period


Balance at the end of the current interim period 57,084 11,945Total shareholders' equity



Balance at the end of the current interim period 301,284 256,145Valuation and translation adjustments

Valuation difference on AFS securitiesBalance at the end of previous period 4,153 4,972Changes of items during the interim period

Net changes of items other than shareholders' equity 1,349 930Total changes of items during the interim period 1,349 930

Balance at the end of the current interim period 5,502 5,903Deferred gains or losses on hedges

Balance at the end of previous period (12) (1)Changes of items during the interim period

Net changes of items other than shareholders' equity 11 (1)Total changes of items during the interim period 11 (1)

Balance at the end of the current interim period (1) (2)Total valuation and translation adjustments


Net changes of items other than shareholders' equity 1,360 929Total changes of items during the interim period 1,360 929

Balance at the end of the current interim period 5,501 5,901Total net assets


Dividends of retained earnings - (61,000)Net income 6,119 9,810Net changes of items other than shareholders' equity 1,360 929Total changes of items during the interim period 7,480 (50,260)

Balance at the end of the current interim period 306,785 262,047

Account Name

41

<Cash Flow Statement> (Millions of Yen)

Cash flows from operating activitiesIncome before income taxes 10,006 18,039Depreciation 1,028 1,193Goodwill amortization 1,440 1,440Increase (decrease) in allowance for loan losses 4,227 (4,734)Increase (decrease) in provision for bonuses 728 757Increase (decrease) in provision for retirement benefits (94) (28)Interest income (39,487) (27,884)Interest expenses 13,487 6,021Losses (gains) on sales of AFS securities (1,650) (1,104)Losses (gains) on foreign exchanges 30 38Losses (gains) on dispositions of fixed assets 24 44Net decrease (increase) in trading assets (65,850) (139,469)Net increase (decrease) in trading liabilities 6,049 688Net decrease (increase) in loans and bills discounted 21,672 (4,640)Net increase (decrease) in deposits (964,426) 296,835Net increase (decrease) in negotiable certificates of deposit 32,400 17,300Net decrease (increase) in due from banks (excluding cash equivalents) 898,200 566,529Net decrease (increase) in call loan (205,381) 108Net increase (decrease) in call money (7,240) (5,000)Net increase (decrease) in borrowed money (39,998) 0Net decrease (increase) in foreign exchange assets (11,171) (43,961)Net increase (decrease) in foreign exchange liabilities 1,701 42,135Interest received - cash basis 42,029 30,280Interest paid - cash basis (20,256) (5,759)Net increase (decrease) in reserve for others (431) (166)Net decrease (increase) in receivables under resale agreements (20,025) (568,966)Net decrease (increase) in monetary claims bought 1,347 148Net decrease (increase) in other assets 38,176 (102,728)Net increase (decrease) in other liabilities (18,156) 119,176Others, net 196 (208)　Sub-total (321,421) 196,083Income taxes - cash basis (8,381) (2,276)Net cash provided by (used in) operating activities (329,803) 193,806

Cash flows from investing activities Purchases of AFS securities (214,079) (111,191)

Proceeds from sales of AFS securities 331,876 128,180Proceeds from redemption of AFS securities 50,018 21,000Purchases of tangible fixed assets (627) (454)Proceeds from sales of tangible fixed assets 532 19Purchases of intangible fixed assets (622) (350)Net cash provided by (used in) investing activities 167,097 37,202

Cash flows from financing activitiesDivedends paid - (61,000)Net cash provided by (used in) financing activities - (61,000)

Effect of foreign exchange rate changes on cash and cash equivalents (30) (38) Net increase (decrease) in cash and cash equivalents (162,736) 169,970 Cash and cash equivalents at the beginning of the fiscal year 469,880 266,721 Cash and cash equivalents at the end of the interim fiscal year 307,143 436,691

Account Name From April 1, 2009to September 30, 2009

From April 1, 2010to September 30, 2010

42

<Notes for FY 2010 Interim> Amounts less than one million yen have been omitted.

Accounting Policies

1. Standard for valuation of trading assets and trading liabilities / booking of income and expenses for trading purposes transaction

Transactions for trading purposes, such as seeking gains arising from short-term changes in interest rates, foreign exchange rates, or securities prices and other market related indices or from variation among markets (hereinafter referred to as “Trading Purposes”), are included in “Trading assets” or “Trading liabilities” on the balance sheet on a trade date basis. Income and Expenses on trading-purpose transactions are recognized on a trading date basis, and recorded as “Trading income” and “Trading expenses”.

Securities and monetary claims purchased for trading purposes are stated at the interim fiscal year-end market value, and financial derivatives such as swaps, futures and options are stated at amounts that would be settled if the transactions were terminated at the interim fiscal year-end.

“Trading income” and “Trading expenses” include interest received or paid during the interim fiscal year. The year-on-year valuation differences of securities and money claims are also recorded in the above-mentioned accounts. As for the derivatives, assuming that the settlement will be made in cash, the year-on-year valuation differences are also recorded in the above-mentioned accounts.

2．Standard and method for valuation of AFS securities

AFS securities that have market prices are carried at their balance sheet date market prices (cost of securities sold is calculated using primarily the moving-average method). Net unrealized gains/losses on AFS securities, net of income taxes, are included in “Net assets”.

3．Standard and method for valuation of derivative transaction

Derivative transactions (excluding those for trading purposes) are carried at fair value. 4．Depreciation method for fixed assets

(1) Tangible fixed assets Tangible fixed assets are depreciated using the declining-balance method. The estimated useful lives are as follows:

Buildings: 3 to 18 years Others: 2 to 20 years

(2) Intangible fixed assets

Intangible fixed assets are depreciated using the straight-line method. Capitalized software for internal use is depreciated over its estimated useful life (5 years). Goodwill is equally amortized over 5 years.

5．Standard for Allowance

(1) Allowance for loan losses Allowance for loan losses is provided as detailed below in accordance with the internal standards for write-

offs and provisioning. For claims on borrowers that have entered into bankruptcy, special liquidation proceedings or similar legal

proceedings (“bankrupt borrowers”) or borrowers that are not legally or formally insolvent but are regarded as substantially in the same situation (“effectively bankrupt borrowers”), an allowance is provided based on the amount of claims, after the write-off stated in the additional paragraph below, net of the expected amount of recoveries from collateral and guarantees. For claims on borrowers that are not currently bankrupt but are perceived to have a high risk of falling into bankruptcy, an allowance is provided in the amount deemed necessary based on an overall solvency assessment of the claims, net of the expected amount of recoveries from collateral and guarantees. For other claims, an allowance is provided based on the expected loan-loss ratio assigned to each risk rating.

Marketing-related businesses conduct the primary assessment of all claims, independent Risk Management conducts the secondary assessment in accordance with the internal rules for self-assessment of assets, and the Audit and Risk Review, independently audits their assessment. The allowance is provided based on the results of these assessments.

43

(2) Provision for bonuses Provision for bonuses is reported in preparation for the payment of bonuses to the employees at the amount

estimated for the payment of bonuses to the employees during the interim fiscal year. (3) Provision for directors’ bonuses

Provision for directors’ bonuses is reported in preparation for the payment of bonuses to the directors at the amount estimated for the payment of bonuses to the directors during the interim fiscal year.

(4) Provision for retirement benefits

Provision for retirement benefits is reported in preparation for the payment of employee retirement allowance in the amount deemed accrued at the interim fiscal year-end, based on the projected retirement benefit obligation and the fair value of plan assets at the interim fiscal year-end. The actuarial differences are reported as expenses as follows;

Unrecognized prior service cost:

Amortized using the straight-line method for a period, primarily over 7 years, within the employees’ average remaining service period, commencing on the fiscal year in which the services are provided.

Actuarial differences: Amortized using the straight-line method, primarily over 7 to 9 years within the employees’ average remaining service period, commencing from the next fiscal year of incurrence.

(5) Provision for directors’ retirement benefits

Provision for directors’ retirement benefits is reported in preparation for the payment of director retirement allowance out of directors’ estimated allowance for the amount allocable to the period under review.

(6) Reserves for restructuring

Reserve for restructuring is reported in preparation for the payment and expenses of restructuring program based on estimated amounts of future payments.

(7) Reserves for business reorganization

Reserve for business reorganization is reported in preparation for the payment and expenses for Private Bank Division closure based on estimated amounts of future payments.

6．Standard for the translation into Japanese yen

Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rate prevailing at the balance sheet date.

7．Method for hedge accounting

For the hedge accounting method applied to hedging transactions for interest rate risk arising from financial assets and liabilities, the deferred hedge accounting method is applied.

As for the portfolio hedges to net market fluctuation, effectiveness of such hedges are assessed by classifying the hedged items (such as loans) and the hedging instruments (such as interest rate swaps) by their maturity.

8．Accounting for consumption taxes

National and Local Consumption Taxes are excluded from transaction amounts.

44

Change in Accounting principles, Accounting procedures and Others for the preparation of quarterly statements (Accounting standard for Asset Retirement Obligations)

CJL has applied “Accounting Standard Related to Asset Retirement Obligations” (Accounting Standard No. 18, March 31, 2008) and “Application Guidance for Accounting Standard Related to Asset Retirement Obligations” (Guidance No. 21, March 31, 2008) from this period. This change caused decrease of 40 million yen in ordinary profit and decrease of 493 million yen in income before income taxes. The impact to Asset Retirement Obligations was 693 million yen.

(Tax calculation method)

CJL has applied actual tax calculation (principle method) for quarterly financial statement changed from estimated tax calculation (simplified method) in this 2nd quarter period. This change caused decrease of 614 million yen in net income for this interim period. Additional information

With the revision of the appendix forms of “Banking Law Enforcement Regulations” (Ministry of Finance Ordinance No. 10, 1982) by the “Cabinet Office Ordinance No.22, March 31, 2010”, Asset Retirement Obligations are shown as a component of Other Liabilities from this period.

45

Notes to Balance Sheet 1．For securities purchased under resale agreement which can be sold or pledged without restrictions, 569,457 million

yen are held in hand as of September 30, 2010. 2．There were no Bankrupt loans and Past due loans/non-accrual loans were 3,137 million yen.

“Bankrupt loans” are loans, after write-off, to legally bankrupt borrowers as defined in Article 96-1-3 (a) through (e) and 96-1-4 of the Enforcement Ordinance of the Japanese Corporate Tax Law and on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest because they are past due for a considerable period of time or for other reasons.

“Past due loans/non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are deferred in order to support the borrowers’ recovery from financial difficulties.

3．Past due loans (3 months or more) totaled 26,296 million yen.

“Past due loans (3 months or more)” are loans on which the principal or interest is past due for three months or more, excluding “Bankrupt loans” and “Past due loans/non-accrual loans”.

4．Restructured loans totaled 40 million yen.

“Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g. reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness) in order to support the borrowers’ recovery from financial difficulties, excluding “Bankrupt loans,” “Past due loans/non-accrual loans” and “Past due loans (3 months or more)”.

5．The total amount of “Bankrupt loans”, “Past due loans/non-accrual loans”, “Past due loans (3 months or more)” and

“Restructured loans” was 29,475 million yen. Claims shown from 2 to 5 are the amounts before the appropriate allowance.

Of the total amount of the "Past due loans (3 months or more)" one loan of 26,250 million yen was successfully closed in a sale transaction on October 1, 2010.

6．Bills discounted are treated as financial transactions in accordance with JICPA Industry Audit Committee Report

No.24. CJL has rights to sell or pledge bank acceptance bought, commercial bills discounted, documentary bills and foreign bills bought without restrictions. The total face value was 37,464 million yen.

7．The outstanding amount, which was accounted for as sales of loans to participants for loan participations in

accordance with the JICPA Accounting Standard Committee Report No. 3 issued on June 1, 1995, was 4,046 million yen as of September 30, 2010.

8．AFS securities of 670,501 million yen are pledged as collateral for settlements of FX transactions. In addition, other

assets include collateral based on ISDA Credit Support Annex of 20,910 million yen, initial margins of futures markets 302 million yen and other guarantee deposits of 6,889 million yen.

9．Overdraft facilities and commitment line contracts on loans are agreements to lend to customers up to a prescribed

amount, as long as there is no violation of any condition established in the contracts. The amount of unused commitments was 331,175 million yen and the amount of those with remaining period within

one year was 259,137million yen. Since many of these commitments are expected to expire without being drawn upon, the total amount of unused

commitments does not necessarily represent actual future cash flow requirements. Many of these commitments include clauses under which we can reject an application from customers or reduce the contract amounts in the event that economic conditions change, we need to secure claims, or other events occur. In addition, we may request the customers to pledge collateral such as premises and securities at the time of the contracts, and take necessary measures such as monitoring customers’ financial positions, revising contracts when need arises and securing claims after contracts are made on a periodic basis.

10．Accumulated depreciation on tangible fixed assets: 8,995 million yen 11．Net assets per share: 1.07 yen

46

12．Non-cancellable operating lease is as follows; Future minimum rental payments;

Within one year 1,062 million yen Over one year 382 million yen

Notes to Statement of Income 1．Net income per share 0.04 yen

2．”Extraordinary income” includes 4,684 million yen of Reversal of allowance for loan losses.

3．”Extraordinary losses” includes 713 million yen of Asset retirement obligation related expense (including expenses

for sublease contracts of offices). Notes to Statement of Changes in Net Assets 1．The types and number of our shares outstanding are as follows:

(Thousands of Shares)

Number of shares

at prior year end

Number of shares

increased during

the period

Number of shares

decreased during

the period

Number of shares at

the end of period

Memo

Common stock 244,200,000 －－ 244,200,000

Total 244,200,000 －－ 244,200,000

2. Information on Dividends

(Millions of Yen, except per share data)

Date of resolution Type of shares Cash

dividends Cash dividends

per share Balance sheet

date Effective date

Meeting of the Board of Directors held on July 13, 2010

Common stock 61,000 0.24 March 31, 2010 July 23, 2010

Notes to Statement of Cash flow 1. Cash and Cash Equivalents consist of cash and due from Bank of Japan included in Cash and Due from Banks on

the balance sheet. As of September 30, 2010 (Millions of Yen)

Cash and Due from Banks 2,720,674 Due from Banks excluding Bank of Japan (2,283,983) Cash and Cash Equivalents 436,691

47

Notes related to Financial Instruments 1．Disclosure on Financial Instruments

(1) Policy on Financial Instruments

C

A

D

D

, we have trading bonds as well as trading positions that include interest rate related derivatives and cu

(3) Risk Management System relating to Financial Instruments

(A) Credit Risk Management

risk management framework and controls credit risks related to loans etc. by credit an

ement Division and such issues will be re

issuers and counterparty risk of derivatives are controlled and monitored by Risk Management C

(B) Market Risk Management

ⅰ. Risk Management of Banking Accounts

nking book through Asset and Liability Management (ALM). The ris

files of interest rates and du

ⅱ . Risk Management of Trading Accounts

CJL mainly manages interest-rate risks and foreign exchange price risks on trading book following the M

JL is engaged in banking operations such as credit extension business including loans, fund transfer and clearing business both in Yen and foreign currencies and investment business including marketable securities. In order to conduct these businesses, CJL raises funds mainly as deposits from retail and corporate clients as well as from the group companies and also through other borrowings. Given that CJL owns financial assets and liabilities that are subject to interest rates and foreign exchange rates, CJL conducts comprehensive asset-liability management (ALM) in order to eliminate negative impact from interest rates and foreign exchange rages and for the purpose of funding cost reduction as well as efficient investment management. As part of such effort, we enter into certain derivative transactions.

(2) Types of and Risks associated with Financial Instruments majority of financial assets that CJL holds are placements to the banks in our group. Out of the customer related

assets, loans to corporate customers in Japan and overseas, for which CJL is exposed to credit risks potentially arising from the obligors' default. Out of total outstanding loan balance as of September 30, 2010, 35.0% is for foreign companies. In case any material adverse changes in economic, politics, and social environments, there is a possibility that any of our obligors would fall in event of default against credit terms on which CJL extends loans. In addition, securities are mainly low credit risk government bonds, etc. held for pure investment or trading purposes. These are exposed to interest rate risk and market price risks.

eposits are mainly from retail, corporate customers, and group companies. They are exposed to liquidity risk where we may not be able to repay timely on maturities. Interest rate exposure is managed by establishing risk limits, etc.

erivative contracts include interest rate swaps, currency swaps, and FX forward for ALM purpose. We implement hedge accounting on such hedge instruments against interest rate risks of the underlying assets or liabilities. In addition

rrency related derivatives. These financial products are exposed to interest rate risk, foreign exchange rate risk, price risk and credit risk, etc.

CJL establishes consistentalysis conducted on transaction basis, controlling credit line, credit information, obligor risk rating, pledge of

guarantee and collateral and managing classified or delinquent accounts, in accordance with Credit Risk Management Policy and related rules and procedures. Credit risk control aforementioned is conducted by Risk Manag

ported to CRMC (Credit Risk Management Committee) and BOD (Board of Directors’ meeting), which is taken place periodically. Moreover, the process of credit risk control is assessed by internal auditor periodically. Credit risk of

redit Risk Management Services by obtaining credit information and marked-to market periodically.

CJL manages interest-rate risks on bak management methods and procedures are clearly described in the "Market Risk Management for

Accrual Portfolios Policy and Standards". CJL monitors and reviews its activity implementation status, also discusses action plans in the monthly ALCO(Asset Liability Committee) meeting as per the ALCO Regulation which has been constituted by the CJL BOD Management Committee.

On a day to day basis, CJL Market Risk Management captures consolidated prorations of the financial assets and liabilities, performs risk monitoring process using the gap analysis and

interest rate factor sensitivity analysis, and reports the results to the ALCO meeting on a monthly basis. For the purpose of hedging interest-rate risks, CJL transacts some derivative trades such as interest rate swaps.

arket Risk Management Policy and ALCO regulation which have been constituted by the CJL BOD. CJL's market risk amount is measured by Value-at-Risk (VaR) method and its regulated compliance status is monitored and reported to ALCO meeting on a monthly basis.

48

(C) Management of Liquidity Risk associated with Capital Raising Activities

Li

F

quidity risk management has been regulated by related policies and procedures. ALCO, which is subject to supervision of the Management Committee, has been constituted to ensure that CJL maintains adequate liquidity, has sufficient capital to meet regulatory and business needs, has appropriate funding for business growth. ALCO's monitoring and reviewing of capital, liquidity, balance sheet and the banking account management is an integral part of the overall risk management framework of CJL.

(4) Supplement Explanation for Fair Value of Financial Instruments

air value of financial instruments includes market prices as well as reasonably calculated prices in cases where there are no market prices available. Since the calculations of such prices are implemented under certain conditions and assumptions, the result of calculations may vary if different assumptions are used.

49

2．Fair Value of Financial Instruments Fair value and balance sheet amount of financial instruments as of September 30, 2010 are shown below.

(Millions of Yen)Balance sheet Difference Fair valueamount

(1) Cash and due from banks 2,735,342 2,720,674 14,668(2) Call loans 72,390 72,390 -(3) Monetary claims bought (*1) 2,835 2,835 -

(4) Trading assetsTrading securities 109,977 109,977 -

(5) Securities (*1)

Other securities 701,252 701,252 -(6) Loans and bills discounted 287,741

(3,634) Allowance for loan losses (*1)

285,158 284,106 1,051(7) Foreign exchange (*1) 95,785 95,785 -

4,002,742 15,719Total Assets 3,987,022(1) Deposits 4,017,970 4,017,785 184(2) 207,800 Negotiable certificates of deposits 207,800 -(3) Borrowed money 1 1 -(4) Foreign exchange 119,477 119,477 -

Total Liabilities 4,345,248 4,345,063 184Derivative transactions (*2)

Hedge accounting not applied 36,179 36,179 -Hedge accounting applied (3) (3) -

Total derivative transactions 36,175 36,175 -

Others Contract amount Fair value(1) (671) Overdraft facilities and commitment line *3 331,175（）

(*1) General allowance for loan losses and specific allowance for loan losses provided to “Loans and bills discounted”

separately shown in the above table. Allowance for loan losses provided to “Monetary claims bought”, “securities” “Foreign exchange” are directly deducted from the book value due to immateriality.

areand

tog

F

(*2) Derivatives included in “Trading assets”, “Trading liabilities”, “Other assets” and “Other liabilities” are shown ether. Negative amount indicates in case of liabilities exceeding the assets.

(*3) Contract amount of Overdraft facilities and commitment line are unused amount.

(Notes) Valuation method of financial instruments

(Assets) (1) Cash and due from banks

For due from banks without maturity, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount. For due from banks with maturity, fair value is determined as present value of total future cash flows, discounted by interest rate that would be applied to newly acceptance. Total future cash flows are contractual payment of principal and interest. For due from banks with short remaining period (within 1year), the carrying amount is presented as the fair value, as the fair value approximates such carrying amount.

(2) Call loans

or Call loans, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because they have short remaining period (within 1year).

50

(3) Monetary claims bought F

F

F

F

S ue

A

D

F

or monetary claims bought, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because they have short remaining period (within 1year).

(4) Trading assets

For securities such as bonds that are held for trading, the fair value is determined based on the price quoted by the exchange.

(5) Securities

For securities such as bonds that are held for available for sale, the fair value is determined based on the price quoted by the exchange.

(6) Loans and bills discounted

or loans without maturity, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because of their estimated maturity length and the interest rate conditions. For loans with short remaining period (within 1year), the carrying amount is presented as the fair value, as the fair value approximates such carrying amount.

or loan with remaining period exceeding 1 year, fair value is determined as present value of total future cash flows, discounted by interest rate that would be applied to newly accepted loans. Total future cash flows are contractual payment of principal and interest.

As for the loans to bankrupt, de facto bankrupt, and potentially bankrupt borrowers, credit loss is estimated based on factors such as the present value of expected future cash flow or the expected amount to be collected from collaterals and guarantees. Since the fair value of these items approximates the carrying amount net of the currently expected credit loss amount, such carrying amount is presented as the fair value.

(7) Foreign exchange

Foreign exchanges consist of foreign currency deposits with other banks (due from other foreign banks), short-term loans involving foreign currencies (due from other foreign banks), export bills etc. (purchased foreign bills), and loans on notes using import bills (foreign bills receivables). For these items, the carrying amount is presented as the fair value, as the fair value approximates such carrying amount because most of these items are deposits without maturity or have short contract term (within 1year).

(Liabilities)

(1) Deposits (2) Negotiable certificate of deposits or demand deposits, the amount payable on demand as of balance sheet date is considered to be the fair value.

Time deposits are grouped by certain maturity lengths. The fair value of such deposits is the present value discounted by expected future cash flow. The discount rate is the risk free rates adjusted with funding spread of CJL as of balance sheet date. For deposits with short remaining period (within 6 months), the carrying amount is presented as the fair value as the fair value approximates such carrying amount.

(3) Borrowed money

ince all of borrowed money is without maturity, the carrying amount is presented as the fair value as the fair valapproximates such carrying amount.

(4) Foreign exchange

mong foreign exchange contracts, foreign currency deposits accepted from other banks and non-resident yen deposits are deposits without maturity. Furthermore, foreign currency short-term borrowing have no maturity. Thus, for the foreign exchanges, the carrying amount is presented as the fair value as the fair value approximates such carrying amount.

(Derivative transactions)

erivatives include interest rate related instruments (interest rate futures, interest rate options, interest rate swaps, etc.), currency related instruments (currency futures, currency options, currency swaps, etc.) and bond related instruments (bond futures, bonds future options, etc.). Fair value of these derivatives are based on market prices at exchanges, discounted present values, or amount calculated under the option pricing model. (Others)

or overdraft facilities and commitment line, fair value is the present value discounted by the difference between the expected future cash flow calculated by contractual rate and fee rate that would be applied to newly acceptance at the balance sheet date for the contract with remaining period exceeding 1 year.

51

Notes related to Deferred tax accounting 1．The main causes for the deferred tax assets and deferred tax liabilities are as follows:

Deferred tax assets (Millions of Yen)

Goodwill (calculated on tax basis) 2,904

Accrued expense 2,021

Allowance for loan losses 1,594

Provision for retirement benefits 835

Provision for bonuses 636

Other 1,538

Deferred tax assets total 9,530

Deferred tax liabilities

Valuation difference on AFS securities 4,039

Prepaid pension cost 2,793

Other 219

Deferred tax liabilities total 7,052

Net deferred tax assets 2,477

2．A reconciliation of the actual ratio of income taxes reflected in income statement to the effective statutory tax rate is

as follows: Effective statutory tax rate 40.46 ％ Goodwill amortization 3.23 Permanent difference such as entertainment expenses, etc 0.23 Inhabitant tax per capita levy, etc 0.22 Others 1.45 Actual ratio of income taxes reflected in income statement 45.61 ％

52

3. Market value information <Securities>

Matters concerning securities market value, valuation difference, etc. are as follows. As well as “Japanese government bonds”, “corporate bonds”, “other securities” and “trading securities” are included in securities.

(1) Trading securities (Millions of Yen)

As of Sep. 30, 2010 As of Sep. 30, 2009

Net unrealized gains Net unrealized gainsBalance sheet amount Balance sheet amount (losses) included in P/L (losses) included in P/L

during the Previous Period during the Previous Period

Trading securities 0 69,998 (218) 109,977

(2) Other securities (Millions of Yen)

As of Sep. 30, 2010 As of Sep. 30, 2009

Balance Net changes Net changes BalanceAcquisition Acquisitionsheet in valuation Gains (Losses)in valuation Gains (Losses) sheet cost cost

amount (gains/losses)(gains/losses) amount

Bonds JapaneseGovernment 508,678 517,460 9,342 8,781 8,781 0 671,139 680,481 9,342 -Bonds

Corporate (7) - - 14,697 14,689 (7)- - - -Bonds

Others 6,500 6,963 581 463 463 5,500 6,081 581- -

Total 515,178 524,423 9,916 9,244 9,244 0 691,336 701,253 9,924 (7)

(Notes) 1. The figures are based on market value. 2. Gains and Losses are breakdown of Net changes in valuation. (3) Other securities sold during the period

(Millions of Yen)

Interim Fiscal Period ended Sep. 2009 Interim Fiscal Period ended Sep. 2010(Apr 1, 2009 - Sep 30, 2009) (Apr 1, 2010 - Sep 30, 2010)

Sales Value Gains on sales Losses on sales Sales Value Gains on sales Losses on sales331,876 2,093 1,109 442 128,180 4Other securities

<Money Held in Trust>

None

53

<Derivatives Market Value Information> (1) Interest rate-related transactions

(Millions of Yen)

Category TypeContractamount

Over 1year in

contractamount

Marketvalue

Revaluationgains/losses

Contractamount

Over 1year in

contractamount

Marketvalue


Exchange-traded Futures 338,984 134,401 (65) (65) 403,846 - (56) (56)

　Sell 134,401 134,401 (62) (62) 105,252 - 0 0

　Buy 204,583 - (3) (3) 298,594 - (57) (57)

Future Options - - - - - - - -

　Sell - - - - - - - -

　Buy - - - - - - - -

Over-the -counter Forw ard rate agreements - - - - - - - -

　Sell - - - - - - - -

　Buy - - - - - - - -

Interest rate sw aps 1,408,924 1,408,924 (1,962) (1,962) 1,515,322 1,515,322 (1,238) (1,238)

　Receive f ixed/ pay f loating sw aps 719,497 719,497 19,838 19,838 827,368 827,368 23,701 23,701

　Receive f loating/ pay f ixed sw aps 689,014 689,014 (21,800) (21,800) 687,571 687,571 (24,940) (24,940)

　Receive f loating/ pay f loating sw aps 412 412 0 0 383 383 - -

　Receive f ixed/pay f ixed sw aps - - - - - - -

Options 70,415 70,415 - - 77,723 77,723 - -

　Sell 35,207 35,207 (624) (624) 38,861 38,861 (315) (315)

　Buy 35,207 35,207 624 624 38,861 38,861 315 315

Total - - (2,027) (2,027) - - (1,295) (1,295)

As of Sep. 30, 2009 As of Sep. 30, 2010

-

(Notes) 1. These transactions were marked to market, and revaluation gains and losses are reported on the statement of income. In

accordance with “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24), derivatives transactions to which the hedge accounting method is applied are excluded.

2. Calculation of market value Market value is calculated based on closing/final price of the Tokyo International Financial Futures Exchange (TIFFE) etc. for exchange-traded transactions, and on discounted cash flow method or option price calculation models for over-the-counter (OTC) transactions.

54

(2) Currency-related transactions (Millions of Yen)

CategoryContractamount

Over 1year

in contractamount

Marketvalue


Contractamount

Over 1year

in contractamount

Marketvalue


Futures - - - - - - -

　 Sell - - - - - - -

　 Buy - - - - - - -

Currency Sw aps 794,577 794,577 34,550 34,550 954,083 936,963 38,660 38,660

Forw ard contracts 11,500,303 728,293 35,300 35,300 13,961,092 778,778 (1,313) (1,313)

　 Sell 7,101,493 444,467 130,402 130,402 8,591,900 523,726 78,561 78,561

　 Buy 4,398,809 283,826 (95,101) (95,101) 5,369,191 255,052 (79,875) (79,875)

Options 782,244 149,490 9 (80) 566,477 140,051 128 231

　 Sell 367,698 74,840 (6,826) (949) 278,817 70,053 (8,961) (1,683)

　 Buy 414,546 74,649 6,836 869 287,659 69,997 9,089 1,915

Total - - 69,860 69,770 - - 37,475 37,579

Over-the -counter

As of Sep. 30, 2009 As of Sep. 30, 2010

Type

Exchange-traded

-

-

-



2. Calculation of market value Market value is calculated based on discounted cash flow method or option price calculation models for over-the-counter (OTC) transactions.

(3) Stock-related transactions

None

55

(4) Bond-related transactions

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Over 1 Over 1Contract year Market Revaluationyear Market Revaluation ContractType Category amount in contract value gains/lossesin contract value gains/losses amount

amount amount

Exchange- 12,290 (41) - Bond futures (41)(11) (11) 58,580-traded 7,421 (96) - Sell (96)(10) (10) 34,290-

Buy 4,869 - 54 5424,290- 0 0

Bond future options 28,000 - 15 4436 43,000- 0

14,000 (1) - Sell 55(10) 25 19,000-

Buy 14,000 - 17 (10)10 10 24,000-

Over-the - Bond OTC options - - - - - - - -counter

- - - Sell - - - - -

Buy - - - - - - - -

Total (25) - - (11) 24- - 2



2. Calculation of market value Market value is calculated based on closing/final price of the Tokyo Stock Exchange (TSE) etc. for exchange-traded transactions.

(5) Commodity-related transactions

None

(6) Credit derivatives transactions

None

56

4. Major shareholders <Major Shareholders>

(As of Sep 30, 2010)

Name of shareholder Numbers of shares Shareholding ratio

Citibank Overseas Investment Corporation 244,200,000 thousand shares 100%

Total 244,200,000 thousand shares 100%

57

5. Disclosure items based on Pillar III of Basel II

This section describes the information consistent with FSA Notification Number 15 based on Article 19.2.1.5d of the Bank Law Enforcement Rule (Refer to Ministry of Finance Ordinance Number 10). With regard to the internal controls structures governing calculation of the capital adequacy ratio, Azusa (KPMG) conducted certain procedures as an independent audit firm. QUANTITATIVE DISCLOSURE (1) Outline of means of raising equity capital

Tier I

Capital 123,100 123,100

Surplus capital 121,100 121,100

Retained earnings 57,084 11,945

(Estimated distributed income) - -

(Valuation loss of other securities) 0 0

New share reservation rights - -

(Trade rights equivalent) 7,922 5,041

(Goodw ill equivalent) - -

(Intangible f ixed asset equivalent reported by business combination) - -

(Equity capital equivalents increased due to securitization transaction) - -

Subtotal （A） 293,361 251,104

Preferred securities w ith step-up interest rate clauses - -

Tier 2

Amount equivalent to 45% of the land revaluation excess - -

General allow ance for loan losses 6,791 1,176

Eligible provision in excess of expected loss - -

Debt capital instruments etc. - -

Perpetual subordinated debt - -

Fixed-term perpetual subordinated debt and f ixed-term preferred stocks - -

Exclusion from Tier 2 capital (△) - -

Total 6,791 1,176

of w hich included in Capital （B） 6,791 1,176

Deductible item （C） - -

Capital （A)＋（B）－（C）（D） 300,153 252,280

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

58

(2) Capital adequacy Amount of required capital for Credit Risk

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Risk weighted RequiredRisk weighted Requiredexposure Capitalexposure Capital

On balance sheet items

Cash 0 0 0 0

0 Exposures to Japanese government and central bank 0 0 0

638 Exposures to foreign government and central bank 601 24 25

- Exposures to the Bank for International Settlements - - -

- Exposures to Local Authorities - - -

Exposures to overseas public sectors other than central 3,781 3,392 136 151government

Exposures to the International Bank for Reconstruction and - - - -Development

- Exposures to Japan Finance Organization for Municipal Enterprises - - -

2 ,938 Exposures to Japan Government-affiliated organization - - 1 17

Exposures to land development corporation, local housing - - - -corporations, Local Public Road Corporations

Exposures to financial institutions and Regulated securities 447,469 17,898543,654 21,746companies

154,153 6,166Corporate exposures 137,997 5,520

- Exposures to small and medium size enterprises and individuals -- -

10,559 Residential Mortgage Exposures 9,256 370 422

6,003 240Retail Exposures related to real-estate acquisition 35,561 1,422

Exposures three months or more in arrears 45,225 3,425 137 1,809

Bills before collection 489 480 19 19

- Exposures to the Credit Guarantee Association - - -Exposures guaranteed by Industrial Revitalization Corporation of

- - - -JapanExposures to Investment - - - -

Securitization exposures (originator) - - - -

- Securitization exposures (other than the originator) - - -

Assets backed up with several assets (so-called funds) which - - - - individual asset is ungraspable

Others 31,263 46,356 1,854 1,250

On-balance sheet items total 702,524 780,726 31,229 28,100

Off-balance sheet items 99,017 Derivative transactions 97,394 3,896 3,960

Others 85,409 90,218 3,609 3,416

Off-balance sheet items total 184,427 187,612 7,504 7,377

Total 886,951 968,339 38,734 35,478

59

Amount of required capital for Market Risk

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

General Specific General Required Specific RequiredMarket Risk Risk Market Risk Capital Risk Capital

Standardized method of which Interest Rate Risk 67,122

Amount of required capital for Operational Risk

Total Capital Adequacy Ratio and Tier I Capital Ratio

Tier 1 （A） 293,361 251,104

Tier 2 （B） 6,791 1,176

Deductible item （C） - -

Total Capital （A)＋（B）－（C）（D） 300,153 252,280

Risk assets

　　　On balance sheet transaction 780,726 702,524

　　　Off-balance sheet transaction 187,612 184,427

Credit Risk exposure 968,339 886,951

Operational Risk exposure divided by 8% 190,379 184,733

Market Risk exposure divided by 8% 60,681 72,634

Total （E） 1,219,399 1,144,319

Tier 1 Capital Ratio （A）/（E）×100 24.0 21.9

Total Capital Adequacy Ratio（D）/（E）×100 24.6 22.0

Total required Capital (Domestic Criteria) （E）×4％ 48,776 45,772

(Millions of Yen, %)

As of Sep. 30, 2009 as of Sep. 30, 2010

- 54,955 2,198 2,684- Equity Risk - - - - - - Foreign Exchange Risk 5,509 - 5,726 229 220- Commodity Risk - - - - - - Options - - - - 2 0

Total - 72,634 60,681 2,427 - 2,905

(Millions of Yen)

As of Sep. 30, 2010 As of Sep. 30, 2009

190,379 Operational Risk Required Capital Operational Risk Required Capital

Basic Indicator Approach 7,615 184,733 7,389

60

61

(3) Credit Exposure

Past-due over 3 months or default exposure

Loans etc. Derivatives Loans etc. Derivatives

Domestic

Manufacturing 58,603 - 10,074 68,678 85,521 - 8,609 94,130

Mining - - - - - - - - Construction 17 - 731 749 45 - 1,139 1,184

Electric power, gas, water supply 800 - 65 865 871 - - 871

Information and communication 7,398 - 619 8,018 9,375 - 990 10,366

Transportation 695 - 12,950 13,646 721 - 11,901 12,623

Wholesale and retail 50,074 - 1,180 51,255 57,574 - 2,182 59,757

Financial Institutions and Insurance 60,553 - 25,630 86,183 61,898 2,938 40,170 105,007

Real estate 34,955 - 396 35,352 45,378 - 279 45,658

Services 4,109 - 1,904 6,013 2,964 - 1,385 4,350

Central, Local government - - - - - - - - Individuals 30,254 - 4,366 34,621 27,864 - 3,844 31,708

Others 47,141 - - 47,141 31,753 - - 31,753

Overseas Sovereign 1,608 1,302 - 2,910 68 1,100 - 1,169

Financial Institutions 531,286 - 34,319 565,606 424,859 - 27,128 451,987

Others 42,142 - 5,154 47,296 34,998 - 1,386 36,384

Total 869,643 1,302 97,394 968,339 783,893 4,039 99,017 886,951

Loans etc. Securities Derivatives Total Loans etc. Securities Derivatives Total

To 1 year 439,818 201 62,436 502,456 432,331 - 66,493 498,824

1 to 3 years 285,164 - 12,362 297,526 184,793 2,938 18,978 206,710

3 to 5 years 27,991 - 16,637 44,628 61,859 - 847 62,707

Over 5 years 55,547 1,100 5,957 62,606 35,440 1,100 12,698 49,239

Undefined 61,121 - - 61,121 69,469 - - 69,469

Total 869,643 1,302 97,394 968,339 783,893 4,039 99,017 886,951

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Securities Total Securities Total

(by Maturity) (Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

DomesticCorporate - 32,776Individuals 563 512

Overseas - - Total 563 33,288

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Loan loss reserve

Specif ic ReserveCorporate - - - - - - - - - Individuals 355 405 760 355 1,493 1,848 1,848 817 2,666Others 162 (32) 129 162 (32) 129 129 (32) 97

General Reserve 2,937 3,854 6,791 2,937 3,758 6,696 6,696 (5,519) 1,176Loan loss reserve for restructuring country

Ending

None

Change Ending Beginning ChangeBeginning Change Ending Beginning

(Millions of Yen)

Interim Fiscal Period ended Sep. 2009 Fiscal Year ended Mar. 2010 Interim Fiscal Period ended Sep. 2010

Credit Risk exposure after Credit Risk Mitigation by Risk weight under Standardized approach

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

0% 0 020% 576,040 477,07835% 9,256 10,55950% 27,678 27,24575% - - 100% 339,066 324,264150% 16,297 47,803Deduction from Capital - - Total 968,339 886,951

(4) Credit Risk Mitigation

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Eligible Financial Collateral 133,430 Cash 63,78237,647 Bonds 29,937

409 Stocks 1,069Others - -

Guarantee and Credit DerivativesGuarantee 77,600 66,716

- Credit Derivatives -Total 249,088 161,505

(Note) On-balance netting was adopted for the interbank Money Market transaction with Citibank, N.A. overseas main branches.

62

(5) Counterparty Credit Risk of Derivatives

Measurement of Credit exposure Current Exposure Methodi．

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Total amount of gross positive fair value ii 268,388 289,933．

Credit exposure before Credit Risk Mitigationiii．FX related 210,752 160,512Interest rate related 17,364 46,833Total 228,117 207,346

iv The amount deducting iii from sum of ii and gross add-on．

(Reduction by Netting agreements)

160,523 227,371

v. Collateral type None vi. Credit exposure after Credit Risk Mitigation Same as iii vii. Notional amount of credit derivatives which have counterparty risk None viii. Notional amount of credit derivatives which cover exposures by Credit Risk Mitigation None (6) Securitization None (7) Market Risk (under Internal Model Approach) None (8) Equity Exposure in Banking Book None (9) Amount in regarded exposure under the Accord article 167 None (10) Interest Rate Risk in the Banking Book - the increase/(decrease) in economic value for 1%

upward rate shocks according to internal management's method.

(Millions of Yen)

As of Sep. 30, 2009 As of Sep. 30, 2010

Japanese Yen 10,027 9,156US Dollar (3,345) (3,029)Euro 427 688Others (669) (652)Total 6,440 6,163

63

64

Confirmation

January 31, 2011

Representative Director, President & CEO Darren Buckley I confirm, to the best of my knowledge, the following representations about matters concerning the Citibank Japan Ltd. financial statements for the Period from April 1, 2010 to September 30, 2010.

1. Matters concerning the financial statements are in conformity with “The Regulations regarding Terminology, Format and Method of Preparation of Financial Statements, etc” and “Enforcement Regulation of the Banking Law” and others, and the financial present fairly in all material respects.

2. Citibank Japan Ltd. promotes and manages the appropriate internal control systems as below, and

appropriately prepare financial statements based on it.

(1) Assignment of duties and responsible unit are clarified, and the system for accomplishment of operation is appropriately established.

(2) Internal Control Department reviews and assesses the propriety and effectiveness of internal control systems for each responsible unit, and reports the material information to the Management and Statutory Auditors’ Meeting.

(3) All material activities of Citibank Japan Ltd. are reported to the Management and Board of Directors Meeting as necessary.

65

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