Copyright(C)2019 JTRUST Co.,Ltd. All Rights Reserved.

ＪTrustCurrent Situation ofFinancial Businessin South Korea

January 2019J Trust Co., Ltd.

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１. Greeting

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Presented by：JT Chinae Savings BankDirector & Chief Executive OfficerGeorge Eguchi

（Term of employment in South Korea: November 2012～present）

※ Please understand that the explanations in this presentation rely on figures from the September 2018 business period (Q2 FY2019/03) prior to the disclosure of figures from the December 2018 period (Q3 FY2019/03).

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２. Overview & Performanceof Financial Business in South Korea

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After entering into the South Korean financial business in 2011,J Trust acquired six companies.

20132011 2017201520142012 20182016

Purchased a consumer finance company and entered into financial

business in South Korea

Took over and revived a failed savings bank

business

Purchased two additional consumer finance companies

Purchased a savings bank and nonbank from global finance group Standard

Chartered

2019

From M&A to Organic GrowthMoving along a trajectory of continual

growth through business restructuring and proactive marketing

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As of 2019, J Trust has restructured four companies which it currently manages.

Savings Bank

Nonbank Servicer

Total Employees：1,043Total Locations：25

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Our outstanding loan balance has increased twelve times over since 2012.

* K-GAAP accounting standards

0

10,000

20,000

30,000

40,000

'12.10 '13.3 '14.3 '15.3 '16.3 '17.3 '18.3 '18.9

JT Chinae Savings Bank JT Savings Bank JT CapitalUnit: 100 million won

3,102

36,256

Outstanding Loan Balance of 3 Companies

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Total net profit of 4 companies combined as of September 2018, using IFRS standards

ROA ROE1.1% 8.9%

Segment profit for six months of FY 2019/03 was much better than initially estimated.

Current Net Profit2.3 billion JPY

September 2018 figures annualized

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3. Circumstances and regulations surrounding Financial Business in South Korea

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South Korea’s GDP is expected to experience either stagnation or a slight degradation.

The Bank of Korea predicts that the 2019 GDP growth rate will be 2.7%, the same as in 2018. The Korean Development Institute predicts that the 2019 economic growth rate will be 2.6%, slightly lower than the 2018 rate of 2.7%

GDP growth rate

4.5%

7.4%

2.9%

4.9%

3.9%

5.2%5.5%

2.8%

0.7%

6.5%

3.7%

2.3%

2.9%3.3%

2.8%2.9% 3.1%2.7%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

2.7%2.6%

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-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

2016.1 2016.7 2017.1 2017.7 2018.1 2018.7

全国 首都圏 地方Nationwide Capital area Rural areas

4.3%3.5%

4.3%

3.4%

4.3%3.8%

3.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2016.3 2016.9 2017.3 2017.9 2018.3 2018.9

Real estate market Job market

The feeling is that everything is moving along just as predicted and that it is all manageable.

Real estate market＝ Housing prices are generally stable, despite variations from region to region.Job market＝Policies have been enacted by the government such as a 10.9% increase to minimum wage and a reduction of working hours.

* Source: Korea Appraisal Board * Source: National Statistical Office

Changes in home selling index price Unemployment rate

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Legal maximum interest rate

Regulatory enhancements appear to be progressing as anticipated Ⅰ

Legal maximum interest rate＝ The current administration has promised to lower the interest rate to 20% while in office.Increase to rate of reserve for doubtful accounts ＝ Increases in local accounting standards have had an effect on the BIS ratio.

Increase to ratio of allowance for doubtful accounts

Over three years, the rate of reserve for doubtful accounts fordepending on the classification ofdelinquencies increased.

Loan loss reserve ratio for performingloans: from 0.5％→ MAX 1.5％

Loan loss reserve ratiofor risk-monitored loans:from 2％→MAX 15％

66.0

49.0 44.0

39.0 34.9

27.9 24.0

20.0

36.5

25.0

40.0

30.0

Money Lending Business Act

Interest Rate Restriction Act(new)

Interest Rate Restriction

Act (old)

Unit：%

Changes to legal maximum interest rate

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Consumer protection enhancement

Regulatory enhancements appear to be progressing as anticipated Ⅱ

Consumer protection enhancement＝ Reduced payment periods and increases to amount of exemptions for individual rehabilitationRestrictions on total volume of consumer loans＝ Administrative guidance given to restrict increases to consumer loans (both unsecured and secured)

Restrictions on total volume of consumer loans

Reduced payment periods and increases of amount of exemptions for personal rehabilitation

Strengthening claims to lower interest rates

The 2018 volume restrictions, which restricted the total growth rate of consumer loans to 7% annually from the 2017 year end, are likely to continue into 2019.

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4. Strategy for Financial Business in South Korea

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J Trust will propel gradual growth even amid enhanced regulationsand shift the focus from “quantity” to “quality”

【Prior strategy】We greedily pursued possibilities in all directions, determined to

increase the size of our assets first.

【Future strategy】We will actively work on flexible adjustment

of loan portfolios and aim for reasonable returns according to credit risk while

maintaining a certain amount of asset size.

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Shift to “high quality” loans through careful selection of customers and a focus on credit quality of the asset Ⅰ

Shifting our focus from loans with an interest rate more than 20% to loans with interest rates around 15%, thereby staying ahead of the competition-- we will aspire toward “Middle Risk, Middle Return”

With regard to business loans, the standards for lending will be to thoroughly examine:

• “Is the use of funds reasonable?”

• “Is collateral liquidity enough?”

Targeting a higher class of consumer for unsecured

private loans

Attention given to the purpose of the loan, the background of the project, and the liquidity of the asset

What does it mean to “actively work on flexible adjustment of loan portfolios and aim for reasonable returns according to the credit risk while maintain a certain amount of asset size”？

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Shift to “high quality” loans through careful selection of customers and a focus on credit quality of the asset Ⅱ

Reduce expected losses through a highly-refined screening process for unsecured consumer loans by way of a credit scoring system that incorporates machine learning

Not only increasing the number of employees, but making sure each employee understands that that one phone call, that one collection letter and that one visit are directly connected to revenue

A screening system that utilizes Fintech

Further enhancements to our system of receivables

collection

What does it mean to “actively work on flexible adjustment of loan portfolios and aim for reasonable returns according to the credit risk while maintain a certain amount of asset size”？

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Our servicer business is also contributing to profit.

Even if NPLs at Korean financial institutions were to multiply at an alarming rate...

Investment and collection of NPLs is the businesswhich the J Trust Group does best.

TAA is recognized as a major playereven within the industry.

↓The troubled market conditions provide a

business opportunity for TAA.

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5. Conclusion

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