-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NoUU3fSE27JtiqYetFh2LKrx7n7ZnW91vJIgcBaleHuDYaFgPDtB9rJV7HJWwenl c+hhgBn55X+AoEzebLCF3w== 0000950131-98-003925.txt : 19980619 0000950131-98-003925.hdr.sgml : 19980619 ACCESSION NUMBER: 0000950131-98-003925 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980522 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980618 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELLER FINANCIAL INC CENTRAL INDEX KEY: 0000046738 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 361208070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06157 FILM NUMBER: 98650305 BUSINESS ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661 BUSINESS PHONE: 3124417000 MAIL ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661 FORMER COMPANY: FORMER CONFORMED NAME: HELLER WALTER E & CO /NEW/ DATE OF NAME CHANGE: 19850503 8-K 1 FORM 8-K FOR THE HELLER FINANCIAL, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: May 22, 1998 ------------ (Date of earliest event reported) HELLER FINANCIAL, INC. ---------------------- (Exact name of registrant as specified in its charter) Delaware -------- (State or other jurisdiction of incorporation) 1-6157 36-1208070 ------ ---------- (Commission File Number) (IRS Employer Identification Number) 500 West Monroe Street, Chicago, Illinois 60661 - ----------------------------------------- ----- (Address of principal executive offices) (Zip Code) (312) 441-7000 -------------- (Registrant's telephone number, including area code) Item 5. Other Events - ------- ------------ On May 22, 1998, The Fuji Bank, Limited ("Fuji Bank"), the owner of the majority of the outstanding shares of the common capital stock of Heller Financial, Inc., the registrant, issued a press release with respect to Fuji Bank's financial statements for the fiscal year ended March 31, 1998. Item 7. Financial Statements and Exhibits - ------- --------------------------------- (c) Exhibits 99 Selected pages from press release of Fuji Bank dated May 22, 1998, announcing Fuji Bank's financial results for the fiscal year ended March 31, 1998. A copy of the entire press release is available upon request from the registrant, Heller Financial, Inc., 500 West Monroe Street, Chicago, Illinois 60661, Attention: Treasurer (312-441-7000). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: May 22, 1998 ------------ HELLER FINANCIAL, INC. By: Lauralee E. Martin ------------------------------- Lauralee E. Martin Title: Executive Vice President and Chief Financial Officer 2 EXHIBIT INDEX
Exhibit Sequentially Number Numbered Pages - ------ -------------- 99 Selected pages from press release of The Fuji Bank, 4-23 Limited dated May 22, 1998, announcing the financial results of The Fuji Bank, Limited for the fiscal year ended March 31, 1998.
3 EX-99 2 PRESS RELEASE May 22, 1998 Financial Results Report for Fiscal 1997 (Non-Consolidated) The Fuji Bank, Limited 5-5, Otemachi 1-chome, Chiyoda-ku, Tokyo, Japan 1. Date of Approval by the Board of Directors: May 22, 1998 2. Date of General Meeting of Stockholders: June 26, 1998 3. Financial Highlights for Fiscal 1997 (from April 1, 1997 to March 31, 1998) (Notes) (1) Amounts less than one million yen are omitted. (2) - denotes minus. (1) Operating Results
- ------------------------------------------------------------------------------------------------ FY 1997 FY 1996 Operating Income Million Yen 2,538,739 Million Yen 2,620,696 (Change from Previous Period) (-3.1%) (-12.4%) Ordinary Profit Million Yen -576,306 Million Yen 31,252 (Change from Previous Period) (-%) (-%) Net Income Million Yen -518,701 Million Yen 53,995 (Change from Previous Period) (-%) (-%) Net Income per Share Yen -179.19 Yen 18.54 Adjusted Net Income per Share Yen - Yen 18.46 Return on Stockholder's Equity -% 3.7% Expenses-to-Income Ratio 122.7% 98.8% Total Deposits Million Yen 31,316,743 Million Yen 34,394,656 - ------------------------------------------------------------------------------------------------
(Notes) 1. Number of Average Stocks Current Period Previous Period Ordinary Stock: 2,897,615 thousand shares Ordinary Stock: 2,897,591 thousand shares Preference Stock: 70,000 thousand shares Preference Stock: 18,027 thousand shares 2. Amendment of certain accounting methods (please refer to the Attached Notes to Balance Sheet) 3. Expenses-to-Income Ratio equals Operating Expenses x 100 ------------------ Operating Income
(2) Dividend Payment
- --------------------------------------------------------------------------------------------------- FY 1997 FY 1996 Ordinary Preference Ordinary Stock Preference Stock Stock Stock Dividends Declared per Share Yen 8.5 Yen 7.5 Yen 8.5 Yen 3.75 Interim Yen -- Yen -- Yen 4.25 Yen -- Term-end Yen 8.5 Yen 7.5 Yen 4.25 Yen 3.75 Million Yen Million Yen Million Yen Million Yen Total Stock Dividends (Yearly) 24,629 525 24,629 262 Dividend Pay-out Ratio -% % 45.8% % Ratio of Total Stock Dividends to Stockholders' Equity 2.6% % 1.7% % - ---------------------------------------------------------------------------------------------------
(3)Financial Position
- ------------------------------------------------------------------------------------------------ FY 1997 FY 1996 Total Assets Million Yen 51,088,094 Million Yen 52,066,828 Stockholders' Equity Million Yen 1,140,785 Million Yen 1,672,064 Stockholders' Equity to Total Assets 2.2% 3.2% Stockholders' Equity per Share Yen 321.22 Yen 504.58 BIS Ratio (uniform international (provisional standard) figures)9.41% 9.22% - ------------------------------------------------------------------------------------------------
(Notes) (1) Total stock outstanding as of term end: Current Period Ordinary Stock: 2,897,615 thousand shares Preference Stock: 70,000 thousand shares Previous Period Ordinary Stock: 2,897,615 thousand shares Preference Stock: 70,000 thousand shares (2) Difference between book value and market value: Yen -227,406 million (3) Difference between market value of derivative transaction and contract amount etc.: Yen -1,236 million 4 4. Earnings Performance Projection for Fiscal 1998 (Year through March 31, 1999)
- --------------------------------------------------------------------------------------------- Interim Period Annual Period (first 6 months) (12 months) Yen million Yen million Operating Income 1,100,000 2,200,000 Ordinary Profit 30,000 60,000 Net Income 30,000 60,000 Annual Dividends per Share Yen Yen Ordinary stock 4.25 8.50 Preference stock 3.75 7.50 - ---------------------------------------------------------------------------------------------
Projected Net Income per Share: Yen 20.53 5 The Fuji Bank, Limited Non-Consolidated Balance Sheet as of March 31, 1998
(Millions of Yen) - ---------------------------------------------- ---------------------------------------------------- ASSETS LIABILITIES - ---------------------------------- ------------------------------- Cash and Due from Banks 2,749,927 Deposits 31,316,743 Cash on Hand 806,865 Current Deposits 1,453,144 Deposits with Banks 1,943,061 Ordinary Deposits 4,831,476 Call Loans 235,542 Savings Accounts 829,119 Bills Purchased 30,000 Deposits at Notice 1,081,040 Commercial Paper and Other Debt Time Deposits 19,479,597 Purchased 29,858 Trading Assets 2,273,891 Other Deposits 3,642,364 Trading Securities 85,898 Negotiable Certificates of Deposit 3,125,963 Derivatives of Securities Call Money 2,035,728 Related to Trading Transactions 0 Trading-Related Financial Bills Sold 220,859 Derivatives 1,445,818 Other Trading Assets 742,174 Trading Liabilities 1,458,546 Money Held in Trust 85,432 Trading Securities Sold for Short Sales 34,580 Securities 6,250,780 Derivatives of Trading Securities 16 Japanese National Government Trading-Related Financial Bonds 1,087,908 Derivatives 1,423,950 Japanese Local Government Borrowed Money 3,339,624 Bonds 368,933 Japanese Corporate Bonds 481,068 Bills Rediscounted 7,687 Japanese Corporate Stocks 3,474,690 Borrowings from Other Banks 3,331,936 Other Securities 835,880 Foreign Exchange 125,762 Loaned Securities 2,299 Due to Foreign Banks 97,243 Loans and Bills Discounted 32,030,589 Borrowing from Foreign Banks 17,426 Bills Discounted 723,771 Foreign Currency Bills Sold 2,273 Loans on Notes 4,358,183 Foreign Currency Bills Payable 8,819 Loans on Deeds 21,601,105 Bonds 100,000 Overdrafts 5,347,528 Convertible Bonds & Notes 12,582 Foreign Exchange 549,415 Other Liabilities 2,888,177 Domestic Exchange Due from Foreign Banks 49,060 Settlement Credit 3,296 Loans to Foreign Banks 101,715 Accrued Income Taxes 1,472 Foreign Currency Bills Purchased 319,595 Accrued Expenses 933,680 Foreign Currency Bills Receivable 79,043 Unearned Income 25,586 Other Assets 2,263,624 Employees' Deposits 46,038 Domestic Exchange Settlement Security Margin Deposits Debits 3,620 for Futures 4,603 Prepaid Expenses 5,083 Settlement Margin Deposits for Futures 180 Accrued Income 1,074,605 Trading Account Security Margin Deposits for Securities Borrowed 222,300 Futures Contracts 1,024 Settlement Margin Deposits for Securities Borrowed 430,569 Futures Contracts 885 Securities in Custody 656,570 Collateral on Bonds Lent 689,469 Others 521,835 Others 530,979 Reserve for Possible Loan Premises and Equipment 673,037 Losses 857,491 Reserve for Retirement Land, Building, and Equipment 584,746 Allowances 48,241 Reserve for Possible Losses on Sales of Loans 52,717 Construction in Progress 12,494 Reserve for Specific Borrowers under Support 122,300 Lease Deposits 75,796 Other Reserves 47 Customers' Liabilities for Reserve Fin. Futures Acceptances and Guarantees 3,915,992 Trans. Liabilities 47 Acceptances and Guarantees 3,915,992
Land Revaluation Account 326,529 Total Liabilities 49,947,308 -------------------- (STOCKHOLDERS' EQUITY) Common Stock 529,087 Legal Reserve 509,170 Capital Surplus 419,954 Legal Earned Reserve 89,216 Earned Surplus 102,527 Voluntary Reserves 589,921 Reserve for Losses on Overseas Investments 21 Vol. Earned Res. For Retirement Allowances 1,500 Special Voluntary Earned Reserve 588,400 Unappropriated Loss at End of Year 487,393 Net Loss 518,701 -------------------- Total Stockholders' Equity 1,140,785 -------------------- Total Liabilities and Total Assets 51,088,094 Stockholders' Equity 51,088,094 - -------------------------------------------------------------------------------------------------------
7 The Fuji Bank, Limited Notes to Non-Consolidated Balance Sheet 1. Amounts less than one million yen are omitted. 2. Trading Assets, trading liabilities Trading account transactions are transactions in which profit opportunities arise from the differences between different markets and short-term movements in rates and other indices as they apply to interest rates, currency exchange rates, and dealing in marketable securities. These transactions are included in the balance sheet as of trade date. "Trading assets" and "Trading liabilities" are valued as follows. Securities and monetary assets etc. are valued at the market price at the end of March. Swaps, futures, options and other derivatives transactions are valued on the assumption that they were settled at the end of March. 3. Securities Securities are valued on a cost basis using the moving average method. The same method is used to compute the value of securities held in separately managed trusts that have been established primarily for the purpose of investing in securities. Prior to this year, securities and securities held in separately managed trusts that were established primarily for the purpose of investing in securities were valued at the lower of cost or market value, if those securities were listed on securities exchanges and actual market prices were available. However, in conjunction with an amendment of the Uniform Accounting Standards for Banks, the cost basis method has been introduced from this term onwards. As a result of the introduction of the cost basis method, Ordinary Loss and Loss before Income Taxes both decreased by 433,195 million yen as against the amounts that would have been realized using the lower of cost or market value method. 4. Premises and Equipment Depreciation of premises and equipment is computed as follows as prescribed in the Uniform Accounting Standards for Banks. Buildings Fixed percentage of declining balance method at the rates prescribed in the tax regulations standard. Equipment Fixed percentage of declining balance method at the rates prescribed in the tax regulations standard. Others As prescribed in tax regulations. Up until now, buildings have been depreciated at a fixed percentage of the declining balance method at the rate of 160% of the tax regulations standard, as prescribed in the Uniform Accounting Standards for Banks. However, in conjunction with an amendment of the above Accounting Standards, from this settlement onwards depreciation is carried out at the rates prescribed in the tax regulations standard. As a result of this change, Ordinary Loss and Loss before Income Taxes both decreased by 6,940 million yen as against the amounts they would have realized using the rates which have been prescribed up until now. 5. Foreign Currency Items All assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rates in effect at the balance sheet dates, while income and expenses denominated in foreign currencies are measured and recorded at the exchange rates prevailing at the time of each transaction. Accounts of overseas branches are translated into Japanese yen at the exchange rate prevailing on the balance sheet dates. 6. Reserve for Possible Loan Losses The reserves for possible loan losses are made in accordance with the policies regarding write-offs and reserve standards in the Uniform Accounting Standards for Banks. The reserve for loans to borrowers which are classified as substantially bankrupt or which are bankrupt in the formal legal sense, is made based on the amount remaining after deduction of the amount of collateral considered to be disposable and amounts recoverable under guarantees. Also a reserve is made for loans to borrowers which although not actually bankrupt in the legal sense, are experiencing serious management difficulties and whose failure is imminent. In this case, the reserve is made based on the amount remaining after deduction of the amount of collateral considered to be disposable and amounts recoverable under guarantees and of the balance a reserve is made for the amount outstanding after giving full consideration to the amount the borrower is capable of repaying. In the case of all other loans, an amount is provided in the reserve on the basis of the default rates calculated using the amount of actual default rates during a fixed period in the past. The reserve relating to loans to certain lesser developed countries is provided based on the prospective loss after consideration of the relevant country's political and economic situation, etc. (including reserves for losses on overseas investments as prescribed under Article 55-2 of the Exceptions to Tax Laws Act.) The above Reserve for Possible Loan 8 losses is made on the basis of the quality of all the Bank's loan assets, using the Bank's internally established rules for self-assessment. 7. Reserve for Retirement Allowances The reserve for retirement allowances is provided in accordance with the Uniform Accounting Standards for Banks, based on the amount which would have been required to be paid if all employees covered by the retirement plan had voluntarily terminated their employment at the balance sheet date. 8. Finance leases, other than those leases with property rights which will be recognized as being transferable to the borrower, are treated in compliance with the general accounting procedures for rent transactions. 9. Consumption Tax and Regulation Consumption Tax All figures exclude consumption tax and regional consumption tax. 10. Reserve for Possible Losses on Sales of Loans Consideration is given to the value of the collateral of real estate loans which were sold to the Cooperative Credit Purchasing Company. An estimate is made of future possible losses, and the necessary amount is accounted for under the above Reserve. This Reserve is stipulated under Article 287-2 of the Commercial Code of Japan. 11. Reserve for Supporting Specific Borrowers This Reserve is provided for loans to support the rehabilitation of specific borrowers. An estimate is made of the future amount likely to be required in supporting such borrowers and the necessary amount is accounted for under the above reserve. This Reserve is stipulated under Article 287-2 of the Commercial Code Of Japan. 12. Other Reserves are accounted for as follows: The Reserve for Financial Futures Transaction Liabilities is based on Article 82 of the Financial Futures Transaction Law. In conjunction with the amendment of the Uniform Accounting Standards for Banks, reserves such as the Reserve for Price Fluctuation of Japanese National Government Bonds and the Reserve for Possible Losses from Trading Account Securities Transactions have been abolished and the relevant reserves have been liquidated. 13. The Securities balance includes 11 million yen of treasury stock of the Bank. None of the treasury stock of the Bank comes under the definition in Article 210-2-2-3 of the Commercial Code Of Japan. 14. Total value of stock held of subsidiaries amounted to 417,413 million yen. 15. Total value of due from subsidiaries amounted to 1,332,206 million yen. 16. Total value of due to subsidiaries amounted to 2,750,789 million yen. 17. Accumulated depreciation for premises and equipment amounted to 323,707 million yen. 18. The compressed book value of premises and equipment amounted to 32,841 million yen. 19. In addition to premises and equipment accounted for on the balance sheet, a portion of computer and other equipment is leased. 20. Loans and Bills Discounted: Balance of loans to companies under bankruptcy procedure: 257,512 million yen. Balance of loans non-accrual for 6 months or more: 733,762 million yen. 21. The balance of renegotiated loans at the end of March, 1998 amounted to 186,390 million yen. Renegotiated loans include loans of which the interest rates were cut to/below the official discount rate at the time of restructuring, or loans extended on negative spread basis in order to support borrowers' rehabilitation, and nonaccrual loans which were approved as such by the National Tax Agency. Items which up until now have been classified as restructured loans are now called renegotiated loans. 22. The balance of loans to companies under support programs at the end of March, 1998 amounted to 40,770 million yen. Loans to companies under support programs refers to loans extended to borrowers which have encountered economic difficulty and which the Bank supports in various ways with the approval of the National Tax Agency. 9 23. Land used for the Bank's business activities was revalued on the basis prescribed by law (Proclamation No. 34 dated March 31, 1998). The difference between the book value and the current value was included under "Liabilities". Date of revaluation March 31, 1998 Book value of land used for the Bank's business activities, before revaluation 81,094 million yen Book value of land used for the Bank's business activities, after revaluation 407,623 million yen 24. Borrowed Money includes subordinated borrowings of 1,842,225 million yen. 25. The total balance of bonds consists of subordinated bonds. 26. Net loss per share: 179.19 yen. 27. Under Article 17-2-4 of the Banking Law of Japan, 21,557 million yen of the amount of Earned Surplus cannot be applied to the payment of dividends. 28. From this settlement accounting period onwards, the Bank has adopted a new accounting treatment for trading accounts as prescribed under Article 17-2 of the Banking Law of Japan, with the permission of the Ministry of Finance. As a result of the valuation of securities and monetary assets etc. relating to trading assets and trading liabilities, and the notional settlement of derivatives, there was an increase in the Bank's assets of 1,842,739 million yen and an increase in the Bank's liabilities of 1,814,168 million yen. There has been a partial amendment of the Enforcement Regulations of the Banking Law concerning the establishment of trading account transactions. As a result of the adoption of the new accounting treatment, the format of the balance sheet has been amended as follows: (1) "Trading Account Securities" is now included in "Trading Assets". "Trading securities sold for short sales" was included in "Other Liabilities", and is now included in "Trading Liabilities". The underwritten amount of underwriting agreements for treasury bonds etc. whose subscription period has not yet terminated as of the balance sheet date is also included in the "Trading account securities". (2) Derivatives of trading account securities are included in "Trading assets" and "Trading liabilities". The premium paid or received on option transactions relating to trading account securities transactions, which up until now has been included in "Other assets" and "Other liabilities", is now included in "Derivatives of Trading Securities" in "Trading assets" and "Trading liabilities". (3) "Securities" for the purpose of the securities transactions prescribed under Article 17-2-1-2 of the Banking Law of Japan is now included in "Securities related to trading transactions" in "Trading assets". "Trading securities sold for short sales", for the purpose of the securities transactions prescribed under Article 17-2-1-2 of the Banking Law of Japan, was included in "Other Liabilities", and is now included in "Securities related to trading transactions sold for short sales" in "Trading liabilities". (4) Derivatives relating to securities transactions for the purpose prescribed under Article 17-2-1-2 of the Banking Law of Japan are included in "Trading assets" and "Trading liabilities". The premium paid or received on option transactions for the purpose of the securities transactions prescribed under Article 17-2-1-2, which up until now was included in "Other assets" and "Other liabilities", is now included in "Trading assets" and "Trading liabilities". (5) Derivatives for the purpose of trading account transactions (except for those relating to securities transactions) are now included in "Derivatives of securities related to trading transactions" in "Trading assets" and "Trading liabilities". Therefore, the premium paid or received on interest rate option transactions for the purpose of trading account transactions, which up until now was included in "Other assets" and "Other liabilities", is now included in "Derivatives of securities related to trading transactions" in "Trading assets" and "Trading liabilities". (6) Of those assets which up until now have been included in "Cash and due from banks" and "Commercial paper and other debt purchased", those which are assets for the purpose of trading account transactions are now included in "Other trading assets" in Trading assets. (7) Of the "Borrowed securities" which have been included up until now in "Other liabilities", securities for the purpose of the securities transactions prescribed under Article 17-2-1-2 of the Banking Law of Japan are included in "Borrowed securities related to trading transactions" under "Other liabilities". 10 29. Collateral on Bonds Lent, which up until now has been included in "Other liabilities", is now indicated separately in "Collateral on Bonds Lent". 11 Non-Consolidated Statement of Income for Fiscal 1997 (for the period from April 1, 1997 to March 31, 1998)
(Millions of Yen) - -------------------------------------------------------------------------------- Operating Income 2,538,739 Interest Income: 2,008,606 Interest on Loans and Discounts 995,571 Interest and Dividends on Securities 152,901 Interest on Call Loans 15,303 Interest on Bills Purchased 304 Interest on Deposits with Banks 149,164 Interest on Interest Rate Swaps 621,978 Other Interest Income 73,382 Fees and Commissions 109,787 Domestic and Foreign Exchange 49,047 Others 60,740 Trading Revenue 19,060 Revenue from Trading Securities and Derivatives 99 Revenue from Trading-Related Financial Derivatives Transactions 16,216 Other Trading Revenue 2,745 Other Operating Income 126,928 Gains on Foreign Exchange Transactions 17,625 Gains on Sales of Bonds 105,130 Gains on Redemption of Bonds 3,818 Others 353 Other Income 274,356 Gains on Sales of Stocks and Other Securities 268,654 Gains on Money Held in Trust 904 Others 4,797 --------- Operating Expenses 3,115,046 Interest Expenses: 1,505,595 Interest on Deposits 618,068 Interest on Negotiable Certificates of Deposit 72,549 Interest on Call Money 29,998 Interest on Bills Sold 12,092 Interest on Borrowed Money 68,900 Interest on Bonds 5 Interest on Convertible Bonds 191 Interest on Interest Rate Swaps 648,135 Other Interest Expenses 57,653 Fees and Commissions 44,776 Domestic and Foreign Exchange 13,586 Others 31,189 Trading Expenses 617 Expenses on Securities and Derivatives Related to Trading Transactions 517 Other Operating Expenses 44,614 Loss on Sales of Bonds 28,347 Loss on Redemption of Bonds 2,671 Loss on Devaluation of Bonds 112 Others 13,482 General and Administrative Expenses 385,780 Other Expenses: 1,133,761 Transfer to Reserve for Possible Loan Losses 303,556 Written-off Claims 68,966 Transfer to Reserve for Possible Losses on Sales of Loans 24,017 Transfer to Reserve for Specific Borrowers under Support 122,300 Loss on Sales of Stocks and Other Securities 2,120 Loss on Devaluation of Stocks and Other Securities 56,999 Loss on Money Held in Trust 1,817 Enterprise Tax 86 Others 553,896 --------- --------- Ordinary Loss 576,306 Extraordinary Profits: 68,550 Gains on Dispositions of Premises and Equipment 45,617 Collection of Written-Off Claims 70 Deduction from Reserve for Price Fluctuation of Japanese National Government Bonds 7,492 Deduction from Reserve for Possible Losses from Trading Account Securities 13,362
- -------------------------------------------------------------------------------- 12
- -------------------------------------------------------------------------------- Transfer from Reserve for Securities Transaction Liabilities 5 --------- Extraordinary Losses 5,040 Loss on Disposition of Premises and Equipment 5,023 Transfer to Reserve for Financial Futures Transaction Liabilities 16 --------- --------- Loss before Income Taxes 514,796 Provision for Income Taxes 3,905 --------- Net Loss 518,701 Retained Earnings Brought Forward from Previous Year 31,308 --------- Unappropriated Loss at End of Fiscal Year 487,393
- -------------------------------------------------------------------------------- 13 The Fuji Bank, Limited Notes to Non-Consolidated Statement of Income 1. Amounts less than one million yen are omitted. 2. From this fiscal year onwards, the Bank has adopted a new accounting treatment for trading accounts under Article 17-2 of the Banking Law of Japan, with the permission of the Ministry of Finance. In the case of trading transactions, the profit or loss from these transactions is included in the profit and loss statement on the basis of the trade date, under "Trading revenue" and "Trading expenses." "Trading revenue" and "Trading expenses" are entered in the profit and loss account in the following way. The increase or decrease in the evaluation profit/loss from securities and fund assets is added to the interest paid or received during the term. In the case of derivatives, the increase or decrease in the profit or loss equivalent amount from the notional settlements at the end of the preceding term and the end of this term is added to the interest paid or received during the term. As a result of the adoption of the new accounting treatment for trading accounts from this fiscal year, the evaluation profit or loss and the profit or loss equivalent amount from the notional settlement at the end of the preceding term have been included in one lump sum in this term. The effect of the introduction of the trading accounts on profit/loss was as follows:
Operating income : 40,185 million yen increase Interest income : 25,400 million yen increase Trading revenue : 14,785 million yen increase Operating expenses : 18,634 million yen increase Interest expenses : 38,894 million yen increase Trading expenses : 20,260 million yen decrease Ordinary loss : 21,551 million yen decrease
Due to the partial amendment of the Enforcement Regulations of the Banking Law concerning the establishment of trading transactions, the format of the Profit and Loss Statement has been modified. The related profit and loss items have been reclassified as follows: (1) Evaluation profit/loss and "Gains/losses from sale/purchase of trading securities" which up until now have been included in "Other operating income/expenses", have been included in "Revenue from/expenses on trading securities and derivatives in "Trading revenue" and "Trading expenses". "Revenue from/expenses on trading securities and derivatives" also includes interest paid and received etc. relating to trading securities transactions in "Interest income (Interest and dividends on securities)" and "Interest expenses", and underwriting fees relating to those trading securities transactions included in "Fees and commissions", together with securities exchange duties and securities transaction taxes relating to those trading securities transactions included in "General and administrative expenses". (2) "Revenue from/expenses on securities and derivatives related to trading transactions" in "Trading revenue" and "Trading expenses", now includes profit and loss and evaluation profit/loss from "Gains on sales of bonds", "Gains on redemption of bonds", "Loss on sales of bonds", "Loss on redemption of bonds" and "Loss on devaluation of bonds" when those profits and losses arise from securities transactions for the purpose prescribed under Article 17-2-1-2 of the Banking Law of Japan. Evaluation profit/loss is included in "Other operating income/expenses". "Revenue from/expenses on securities and derivatives related to trading transactions" also includes interest paid and received, etc. relating to securities transactions for the above purpose included in "Interest income (Interest and dividends on securities)" and "Interest expenses", and securities exchange duties and securities transaction taxes relating to those securities transactions for the above purpose included in "General and administrative expenses". (3) Revenue from/expenses on trading-related financial derivatives transactions" in "Trading revenue" and "Trading expenses" now include evaluation profit/loss and interest paid or received in "Interest (paid/received) on interest swaps", "Other interest income", and "Other income expenses", when this interest arises from trading- related financial derivatives transactions. Evaluation profit/loss and interest paid/received is included in "Interest Income" and "Interest expenses". "Revenue from/expenses on trading-related financial derivatives transactions" also includes those securities transaction taxes relating to "General and Administrative Expenses" concerning trading-related financial derivatives. 14 (4) Evaluation profit/loss and interest relating to Negotiable certificates of deposit and Commercial paper and other debt purchased for the purpose of trading transactions, have been added to "Other trading revenue" and "Other trading expenses" in "Trading revenue" and "Trading expenses". Evaluation profit/loss and interest is included in "Other income expenses". 3. "Others" in other expenses includes: a 202,768 million yen loss incurred from sales of real estate loans to the Cooperative Credit Purchasing Company, and a 226,637 million yen loss incurred from supporting certain borrowers including Japan Mortgage Co., Ltd. 4. Total income from transactions with the subsidiaries: 276,161 million yen Total expenses from transactions with the subsidiaries: 342,452 million yen 15
The Fuji Bank, Limited (Selected Financial Data) 1. Gross Profit (Gyomu Ararieki) (Millions of Yen) - ------------------------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Comparison (1) Gross Profit from Domestic Operations 447,770 457,490 -9,720 (Gross profit margin) (1.52%) (1.55%) (-0.03%) (2) Gross Profit from International Operations 222,335 245,503 -23,167 (Gross profit margin) (1.31%) (1.46%) (-0.14%) (3) Gross Profit Total 670,106 702,993 -32,887 (Gyomu Ararieki) (4) Net Business Profit 320,396 327,100 -6,703 (Gyomu Juneki) - -------------------------------------------------------------------------------------------------------------------
* Figures for the previous year provided for reference in the case of accounts influenced by the introduction of mark-to-market accounting.
2. Interest Margin % - ------------------------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Comparison (1) Return on Earning Assets (A) (Total) 4.44 4.71 -0.26 (Domestic) 2.24 2.39 -0.15 (i) Loans and Bills Discounted (Total) 2.90 2.94 -0.03 (Domestic) 2.20 2.37 -0.16 (ii) Securities (Total) 2.46 2.06 0.40 (Domestic) 1.69 1.87 -0.17 (2) Cost of Funds (B) (Total) 4.27 4.30 -0.03 (Domestic) 2.18 2.20 -0.01 (i) Deposits and Others (Total) 1.82 1.79 0.02 (Domestic) 0.52 0.60 -0.07 (ii) Other External Liabilities (Total) 1.81 1.60 0.21 (Domestic) 1.21 1.17 0.04 (3) Net Interest Margin (A)-(B) (Total) 0.17 0.40 -0.22 (Domestic) 0.06 0.19 -0.13 - ------------------------------------------------------------------------------------------------------------------
* Figures for the previous year provided for reference in the case of accounts influenced by the introduction of mark-to-market accounting. 3. Dividend Policies Fuji Bank is always aware that it must first satisfy its shareholders by providing regular dividend payments, utilizing its financial and management resources in the most effective way to consolidate its retained earnings. In the run-up to the "Prompt Corrective Action" introduced in April 1998, the Bank has conducted a rigorous self-assessment of the quality of all the Bank's loan assets. The Bank incurred a large net loss as a result of the write-offs and reserves deemed necessary in consequence of the assessment. However, the Bank has been able to provide appropriate reserves on its problem loan portfolio, including those pertaining to its affiliated financial companies, and it can now get on with the job of making a sound financial recovery. Regarding our dividend policy, it is therefore our intention to propose the following to our shareholders at the Annual General Meeting. (1) An annual dividend payment of 8.50 yen per share of ordinary stock (2) An annual dividend payment as stipulated of 7.50 yen per share of preference stock Although from the point of sound management we elected not to make interim dividend payments, while giving full consideration to the concerns arising from the very volatile stock market and the stagnant Japanese economy, we now propose to maintain our annual dividend payment per share as announced in May 1997. The Japanese economy still faces some rough times ahead. However we will continue to pursue our strengths and to build on our financial fundamentals, taking advantage of the many new profit opportunities, while at the same time maintaining stable regular dividend payments to our shareholders in the future. 16
The Fuji Bank, Limited (Selected Financial Data) 4. Reserve for Possible Loan Losses (100 Millions of Yen) - ---------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Comparison (1) Breakdown of Reserve for Possible Loan Losses (i) General Reserve for Possible Loan Losses 740 1,035 -295 (ii) Specific Reserve for Possible Loan Losses 7,826 8,788 -962 (iii) LDC Reserve 8 11 -3 (2) Reserve for Possible Losses on Certain Doubtful Loans (i) Provision for Specific Reserve 3,891 2,237 1,653 (ii) Reversal from Specific Reserve (exclude reversal for the purpose of writing-off) 563 837 -273 (iii) Net Provision 3,327 1,400 1,926 (3) LDC Reserve (i) Number of countries covered 10 countries 7 countries 3 countries (ii) Amount of Exposure 83 134 -50 (iii) Provision for LDC Reserve - - - (iv) Reversal from LDC Reserve 3 12 -9 (4) Write-off of Loans 689 257 431 - ----------------------------------------------------------------------------------------------------
5. Securities (100 Millions of Yen) - ---------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Comparison (1) Sales of Bonds (i) Gains on Sales 1,051 827 223 (ii) Gains on Redemption 38 17 21 (iii) Losses on Sales 283 458 -175 (iv) Losses on Redemption 26 22 4 (v) Devaluation 1 1 -0 (vi) Total 778 362 415 (2) Sales of Stocks (i) Gains on Sales 2,686 2,913 -226 (ii) Losses on Sales 21 2 18 (iii) Devaluation 569 1,910 -1,340 (iv) Total 2,095 1,000 1,094 (3) Unrealized Gains or Losses (i) Listed Securities -2,274 3,849 -6,123 (Stocks) -2,487 3,352 -5,840 (ii) Derivative Transaction -12 -4 - ----------------------------------------------------------------------------------------------------
6. BIS Ratio (uniform international standard) (100 Millions of Yen) - ---------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Comparison Capital Ratio (provisional figures) 9.41% 9.22% 0.19% (2) Tier I 18,098 19,506 -1,408 (3) Tier II 17,446 18,015 -568 (i) Unrealized gains on securities, included as Tier II - 1,742 -1,742 (ii) Land Revaluation Account 1,469 - 1,469 (iii) Subordinated borrowings (bonds) 14,612 14,712 -99 (4) Risk-Adjusted Assets 377,595 406,638 -29,043 - ----------------------------------------------------------------------------------------------------
7. Loans and Bills Discounted (100 Millions of Yen) - ---------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Comparison (1) Balance of Consumer Loans 57,473 55,671 1,802 (i) Housing Loans 52,560 50,906 1,653 (ii) Other Consumer Loans 4,913 4,764 148 (2) Share of Loans to Small and Medium-size Companies (Term end balance) 75.7% 78.1% -2.4% (3) Balance of Loans to Real Estate Business 22,719 22,301 418 (4) Balance of Loans to Companies under Bankruptcy Procedure 2,575 2,722 -147 (% to Loans and Bills Discounted) (0.80%) (0.80%) (0.00%) Balance of Loans Non-accrual for 6 Months or more 7,337 8,748 -1,411 (% to Loans and Bills Discounted) (2.29%) (2.57%) (-0.28%) (5) Renegotiated Loan 1,863 4,348 -2,484 (% to Loans and Bills Discounted) (0.58%) (1.28%) (-0.70%) (6) Loans to Companies under Support 407 2,577 -2,169 - ----------------------------------------------------------------------------------------------------
17
- ---------------------------------------------------------------------------------------------------- Programs (% to Loans and Bills Discounted) (0.13%) (0.76%) (-0.63%) Loans past due for 3 months or more 3,378 - - Restructured Loan 3,635 - - - ----------------------------------------------------------------------------------------------------
* "Loans past due for 3 months or more" refers to loans in whose case 3 months or more has elapsed since the agreed date for payment of principal or interest. "Balance of Loans to Companies under Bankruptcy Procedure" or to "Balance of Loans Non-accrual for 6 months or more" are not included. "Restructured Loan" includes loans made to support the rehabilitation of certain borrowers which are encountering economic difficulties, with the intention of ensuring recovery of the loan by providing easier repayment terms, etc. It also includes "Renegotiated loan" and "Loans to Companies under Support Programs". * Items which up until now have been classified as "Restructured Loan" is now called "Renegotiated Loan."
8. Others (100 Millions of Yen) - ---------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Comparison (1) Income on Fees and Commissions (i) Profit Amount 1,097 1,075 22 (ii) Ratio of Fees and Commissions to Operating Income 4.3% 4.1% 0.2% $ million $ million $ million (2) Foreign Exchange Transaction Dealing Amount 1,694,506 1,454,753 139,752 (3) Foreign Exchange Transaction Profit 176 66 109 - ----------------------------------------------------------------------------------------------------
18
(Reference Materials) Securities Gains and Losses (Millions of Yen) The Fuji Bank, Limited - -------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Sales Gains 268,654 291,333 Sales Losses 2,120 223 Devaluation 56,999 191,036 Total 209,534 100,072 - --------------------------------------------------------------------------------
Sales of Bonds (Millions of Yen) - -------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 Sales Gains 105,130 82,779 Gains on Redemption 3,818 1,705 Sales Losses 28,347 45,867 Losses on Redemption 2,671 2,228 Devaluation 112 154 Total 77,817 36,234 - --------------------------------------------------------------------------------
Recruitment Plan (Millions of Yen) - -------------------------------------------------------------------------------- April 30, 1999 April 30, 1998 Plan Actual Administrative Staff 220 210 SE 30 25 General Operating Staff 530 430 Total 780 665 - --------------------------------------------------------------------------------
Number of Employees (at the End of Fiscal Year) - ------------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 March 31, 1996 Number of Employees 14,615 15,168 15,780 - -------------------------------------------------------------------------------------------------------
Number of Branches - ----------------- (Domestic) - ------------------------------------------------------------------------------------------------------- March 31, 1998 March 31, 1997 March 31, 1996 HO and Branches 290 290 289 Sub-branches 43 49 55 Others 7 7 8 - ------------------------------------------------------------------------------------------------------- (Overseas) - ------------------------------------------------------------------------------------------------------- Branches 25 24 21 Sub-branches 1 1 1 Representative Offices 21 22 23 Subsidiaries* 18 20 19 - -------------------------------------------------------------------------------------------------------
*Direct majority shareholding more than 50%, or combined total direct/indirect shareholding more than 50% ROE - ---
- ------------------------------------------------------------------------------------------------------- March 31, 1998 September 30,1997 March 31, 1997 Net Business Profit 22.78% 16.10% 21.09% Net Income 1.29% 3.48% - -------------------------------------------------------------------------------------------------------
(Annual Basis)
Capital ratio (Millions of Yen) - ------------------------------------------------------------------------------------------------------- March 31, 1998 September 30, 1997 March 31, 1997 (Provisional) Total Capital Ratio 9.41% 9.41% 9.22% TIER 1 1,809,846 1,967,847 1,950,652 TIER 2 1,744,682 1,738,365 1,801,534 Risk-adjusted Assets 37,759,543 39,359,929 40,663,855 - -------------------------------------------------------------------------------------------------------
The effect of adopting the cost basis method for long-term securities: 1.03% The effect of land revaluation account: 0.38%
Net Business Profit Forecast (100 Millions of Yen) - ------------------------------------------------------------------------------------------------------- 1st half of FY 98 2nd half of FY 98 FY 1998 Net Business Profit 1,500 1,300 2,800 - -------------------------------------------------------------------------------------------------------
19 May 22, 1998 Financial Results Report for Fiscal 1997 (Consolidated) The Fuji Bank, Limited 5-5, Otemachi 1-Chome, Chiyoda-ku, Tokyo, Japan 1. Financial Highlights for Fiscal 1997 (from April 1, 1997 to March 31, 1998) (Notes) 1. Amounts less than one million yen are omitted. 2. * denotes minus. (1) Operating Results
- -------------------------------------------------------------------------------------------------- (change (change (change Operating from Ordinary from Net from Income previous Income previous Income previous period) period) period) Million Yen % Million Yen % Million Yen % Current Period 2,812,522 (3.7) *517,295 (---) *345,309 (---) Previous Period 2,711,312 (*11.0) 75,425 (---) 109,044 (---) - --------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------- Ratio of Adjusted Net Return on Ordinary Income Ratio of Net Income Income per Stockholders' to Total Ordinary Income per Share Share Equity Liabilities and to Operating Net Worth Income Yen Yen % % % Current Period *119.35 ----- --- --- --- Previous Period 37.54 37.27 6.5 0.1 2.8 - -------------------------------------------------------------------------------------------------- (Notes) Equity in Earnings of Affiliates and Unconsolidated Subsidiaries 4,735 million (Previous period 5,163 million)
(2) Financial Position
- -------------------------------------------------------------------------------------------------- Stockholders' Stockholders' Total Assets Stockholders' Equity to Equity Equity Total Assets per Share Million Yen Million Yen % Yen Current Period 55,113,509 1,576,455 2.9 471.58 Previous Period 56,211,154 1,934,349 3.4 595.9 - --------------------------------------------------------------------------------------------------
(3) Principles of Consolidation The consolidated financial statements include the accounts of The Fuji Bank, Limited and 114 of its subsidiaries including among others Fuji Bank (Schweiz) AG, The Fuji Bank and Trust Company and Fuji America Holdings, Inc. 34 subsidiaries are not consolidated, none of which is accounted for by the equity method. 25 affiliates are not consolidated, 16 of which are accounted for by the equity method. 2. Earnings Performance Projection for Fiscal 1998 (Year through March 31, 1999)
- -------------------------------------------------------------------------------------------------- Operating Income Ordinary Income Net Income Million Yen Million Yen Million Yen Next Period 2,500,000 110,000 40,000 - --------------------------------------------------------------------------------------------------
20 The Fuji Bank, Limited Consolidated Balance Sheets as of March 31, 1998
(Millions of Yen) - ---------------------------------------------------------------------------------------------------------- (ASSETS) (LIABILITIES) Cash and Due from Banks 2,821,634 Deposits 31,366,873 Call Loans and Bills Purchased 1,453,230 Negotiable Certificates of Deposit 3,185,488 Commercial Paper and Other Debt Purchased 43,216 Call Money and Bills Sold 3,755,273 Trading Assets 3,265,412 Trading Liabilities 2,057,167 Money Held in Trust 84,989 Borrowed Money 2,947,169 Securities 6,044,830 Foreign Exchange 113,221 Loans and Bills Discounted 34,028,201 Bonds and Debentures 1,657,224 Foreign Exchange 580,018 Convertible Bonds and Notes 12,582 Other Assets 3,326,086 Other Liabilities 4,381,799 Premises and Equipment 693,955 Reserve for Possible Loan Losses 904,217 Deferred Taxes 441,043 Reserve for Retirement Allowances 48,312 Consolidation Difference 8,153 Reserve for Possible Losses on Sales Customers' Liabilities for of Loans 52,717 Acceptances and Guarantees 2,322,736 Reserve for Specific Borrowers under Support 122,300 Reserves under Special Laws in Japan 1,048 Monetary Interest in Consolidated Subsidiaries 282,392 Acceptances and Guarantees 2,322,736 Land Revaluation Account 326,529 Total Liabilities 53,537,054 STOCKHOLDERS' EQUITY Common Stock 529,087 Capital Surplus 419,954 Legal Earned Reserve 69,216 Earned Surplus 538,210 Treasury Common Stock 11 Total Stockholders' Equity 1,576,455 Total Liabilities and Total Assets 55,113,509 Stockholders' Equity 55,113,509 - ----------------------------------------------------------------------------------------------------------
(Notes) Amounts less than one million yen are omitted. 21 The Fuji Bank, Limited Consolidated Statement of Income for Fiscal 1997 (for the period from April 1, 1997 to March 31, 1998)
(Millions of Yen) - ---------------------------------------------------------------------- Operating Income 2,812,522 Interest Income: 2,183,037 Interest on Loans and Discounts 1,166,637 Interest and Dividends on Securities 121,337 Interest on Call Loans and Bills Purchased 233,069 Interest on Deposits with Banks 147,154 Miscellaneous Other Interest Earned 514,837 Fees and Commissions 137,765 Trading Revenue 56,913 Other Operating Income 151,504 Other Income 283,302 Operating Expenses 3,329,817 Interest Expenses 1,640,975 Interest on Deposits 626,048 Interest on Negotiable Certificates of Deposit 77,393 Interest on Call Money and Bills Sold 269,422 Interest on Borrowed Money 76,289 Interest on Bonds and Debentures 72,349 Interest on Convertible Bonds 191 Other Interest Expenses 519,280 Fees and Commissions 49,247 Other Operating Expenses 46,816 General and Administrative Expenses 470,091 Other Expenses 1,122,687 Transfer to Reserve for Possible Loan Losses 326,519 Others 796,167 Ordinary Loss 517,295 Extraordinary Profits 66,767 Gains on Dispositions of Premises and Equipment 45,814 Collection of Written-off Claims 70 Reversal of Reserves for Price Fluctuation of Japanese National Government Bonds 7,513 Reversal of Reserves for Possible Losses from Trading Account Securities 13,362 Reversal of Reserves for Securities Transaction Liabilities 5 Extraordinary Losses 5,548 Losses on Dispositions of Premises and Equipment 5,027 Transfer to Reserves for Possible Losses from Trading Account Securities 503 Transfer to Reserves for Financial Futures Transactions Liabilities 16 Transfer to Reserves for Securities Transaction Liabilities 1 Loss before Income Tax and Others 456,076 Provision for Income Taxes 17,528 Tax Adjustment (133,182) Minority Interest in Net Income 7,584 Amortization on Consolidation Differences 2,038 Equity in Earnings of Affiliates and Unconsolidated Subsidiaries 4,735 Net Loss 345,309 - ----------------------------------------------------------------------
22 The Fuji Bank, Limited Consolidated Statement of Earned Surplus for Fiscal 1997 (for the period from April 1, 1997 to March 31, 1998)
(Millions of Yen) - -------------------------------------------------------------------------------- Balance at Beginning of Year 898,696 Deductions 15,177 Transfer to Legal Reserve 2,600 Dividends 12,577 Net Loss 345,309 Balance at End of Year 538,210 - --------------------------------------------------------------------------------
(Notes) Amounts less than one million yen are omitted. 23 -----END PRIVACY-ENHANCED MESSAGE-----