Presentation Material “FY2025 Financial Results and Progress on the Mid-term Plan”（1,299KB）

Contents

03

01

Key points 2

Progress on the Mid-term Plan “Aozora 2027” and FY2026 Business Strategy

----- 30

02

FY2025 Financial Results and FY2026 Earnings and Dividend Forecasts

--- 6

• Outline of Mid-term Plan “Aozora 2027” and progress on KPIs

  ----- 31

  Financial highlights 7

  FY2026 earnings and dividend forecasts 8

  P/L 10

• P/L summary 10

• Results by business segment 12

• Net interest income 17

• FY2026 business strategy 32

• Strategic Investments Unit 33

• Market & International Business Unit 35

• Customer Relations Unit 36

• Alliance with Daiwa Securities Group 37

• GMO Aozora Net Bank 38

  • Non-interest income / Gains/losses on stock transactions / Gains/losses on equity method investments

    18

    Enhancing Corporate Value 39

    04

    ---

    Balance sheet 19

  • Balance sheet summary 19

  • Loans —Domestic— 20

  • Loans —Overseas— 21

  • Asset quality 22

  • Securities 23

  • Funding 24

  • Funding policy in light of interest rate normalization 25

    --------

  • Investments & funding structure / Impact of higher yen 27

    06

    interest rates

• Improvement of PBR and ROE 40

• RORA and capital allocation 41

• Enhancement of risk management systems 42

• Aozora’s Sustainability Targets 43

• Human resources strategy 45

• Leveraging AI and cybersecurity 46

• Logic tree 47

05

Capital Policy 48

Capital adequacy ratio 28

Group companies 29

Appendix

- 51

(Note) “1Q” refers to the period from April to June,“2Q” refers to the period from July to September, “3Q” refers to the period from October to December, “4Q” er fers to the period from January to March, “1H” and “interim” refer to the period from Aprilot September, and “2H” refers to the period from October to March.

01

• Profit attributable to owners of parent : 25.7 billion yen (+17% vs. forecast, +25% yoy)

• Full-year dividend per share :  91 yen(+3 yen vs. forecast, +12 yen yoy)

  Domestic Business

• Domestic loan outstandings increased by 260 billion yen , or 9%, compared with March 31, 2025. The difference in yields between domestic loans and deposits widened by 0.12% year-on-year, leading to a 10.3 billion yen , or 41%, increase in domestic net interest income

• Non-interest income increased by 9.3 billion yen , or 25% year-on-year driven by growth in LBO loans and capital gains from investment funds resulting from increased M&A activity

• Customer and transaction referrals from the Daiwa Securi ties Group increased, with partnership effects exceeding t he plan, reaching 3.5 billion yen (on a business profit basis)

  Overseas Business

• Overseas net interest income decreased by 6.6 billion yen yea r-on-year, partly due to a decrease in overseas loan outsta ndings by 450 million U.S. dollars, or 5% compared with March 31 , 2025 and narrower market credit spreads

• With regard to U.S. office loan NPLs, the special treat ment period was completed in FY2025, and from FY2026 onward, we will shift to a more normalized risk management approach while continuin g to reduce their outstandings

  Other Growth Areas, etc.

• GMO Aozora Net Bank achieved a net income of 1.7 billion yen with corporate accounts exceeding 240,000 and deposits exceeding

  1.3 trillion yen

• Sales of fund wrap products and investment trusts to retail customers were strong, and AUM including Aozora Investmen t Management's products increased by 101.4 billion yen , or 16%, compared with March 31, 2025

• Achieved 4th place in the league table for domestic syndicated loan transacti ons*, driven by growth in our origination and distribution (O&D) business

• Initiated the disposal of legacy securities without maturity dates, reducing the balance of credit ETFs by 178 million U.S. dollars , or 38%, compared with March 31, 2025

* Source: LSEG (formerly Refinitiv) (mandated arrang er category)

Domestic loan outstandings

(trillion yen)

Loan-related fee income

(billion yen)

3.1

2.9

2.5

12.5

9.2

8.0

End-Mar. 2024

End-Mar. 2025

End-Mar. 2026

FY2023 FY2024 FY2025

Domestic net interest income and differences in yie lds between domestic loans and deposits

(billion yen)

Yield on loans

Gains/losses from limited partnership

(billion yen)

18.2

Differences in yields between domestic loans and deposits

Yield on deposits

Domestic net interest income

18.6

0.90%

0.76%

0.14%

25.2

1.14%

0.92%

0.22%

35.5

1.50%

1.04%

0.46%

11.3

6.9

6.4

12.6

FY2023 FY2024 FY2025

FY2023 FY2024 FY2025

Real estate/ Distressed loan-related

Buyout/venture-related Other

Net income* and number of corporate accounts of GMO Aozora Net Bank

(billion yen)

Outstanding balance of legacy securities and outloo k

244k

Negative carry

184k

1.7

125k

-1.8

(billion yen)

11.7

2,350

465

714

286

268

Without maturity dates

(US$ million)

-3.7

End-Mar. 2024

End-Mar. 2025

End-Mar. 2026

With maturity dates

(US$ million)

End-Mar. 2024 (FY2023)

Securities

2,225

End-Mar. 2026 (FY2025)

6.6

End-Mar. 2028

(FY2027) Targets

End-Mar. 2030

(FY2029) Targets

Net income Number of corporate accounts

AUM of investment trusts and fund wrap products for retail customers

(billion yen)

U.S. office loans (NPLs)

Credit ETFs (investment grade bonds)

U.S. govt. bonds, European govt. bonds, MBS

571.4

618.7

720.1

67.4

652.8

End-Mar. 2024

End-Mar. 2025

End-Mar. 2026

AUM of public investment trusts Fund wrap balances

* GMO Aozora Net Bank’s non-consolidated basis

02

P/L summary

Net revenue Business profit *1 Ordinary profit

(billion yen)

95.0 104%

35.0 101%

30.0 91%

Profit attributable to owners of parent 22.0 117%

Balance sheet summary

Total assets Loanｓ

Inc. domestic loans

Securities Deposit, etc.*2

4Q dividend

(trillion yen)

Full-year dividend

(+3 yen vs. initial forecast, + 12 yen vs. FY2025)

*1 Formerly referred to as “business-related profit.” Starting from full-year financial results for FY2025, business profit includes gains/losses on equity method investm ents and gains/losses on stock transactions, etc. (Gains/losses on stock transactions, etc. = Gai ns/losses on stock transactions + Net provision of allowance for investment loss + Gains/losses on equity derivatives). Re sults for FY2023 and FY2024 have been revised retrospectively.

*2 Incl. NCDs, borrowed money (excl. borrowings from the BOJ), and corporate bonds

Earnings forecast

(billion yen)

Dividend forecast

*1 Formerly referred to as “business-related profit.” Starting from full-year financial results for FY2025, business profit includes gains/losses on equity method investm ents and gains/losses on stock transactions, etc. (Gains/losses on stock transactions, etc. = Gai ns/losses on stock transactions + Net provision of allowance for investment loss + Gains/losses on equity derivatives). Re sults for FY2024 have been revised retrospectively.

*2 Maintaining dividend payments on a quarterly basis

-4.0

111.0

25.7

27.0

-8.9

FY2025

Results

Net revenue, etc.*

G&A expenses

Credit-related expenses

Tax/ Profit/loss attributable

to non-controlling interest, etc.

FY2026

Forecast

Net revenue and profit attributable to owners of pa

(billion yen)

rent

+1.4

+12.7

(billion yen)

-49.9

8.7

27.0

25.7

20.5

35.0

50.9

59.5

85.6

98.5

103.0

Changes in profit attributable to owners of parent

Net revenue

Profit attributable to owners of parent

FY2021 FY2022 FY2023 FY2024 FY2025 FY2026

Forecast

* Includes net revenue, gains/losses on equity method inve stments and gains/losses on stock transactions, etc. (Gains/losses o n stock transactions, etc. = Gains/losses on stock transactions + Ne t provision of allowance for investment loss + Gains/losses on equity derivatives)

1

Net revenue exceeded the full-year forecast, driven by domestic net interest income and non-interest income, while we improved the soundness of our securities portfolio

• Strategic Investments Business maintained strong pe rformance in Japan

• We implemented loss cuts on a portion of our legacy securities Business profit increased 30% compared with the pre vious year

2

G&A expenses were managed almost in line with budget ( 66 billion yen for FY2025), while we continued investments in human capital and GMO Aozora Net Bank incurred higher co sts associated with business expansion

3

Profit attributable to owners of parent increased 25% year-on-year. Progress in the workout of U.S. office loans resulte d in a reduced tax burden. Profit/loss attributable to non-controlling interests decreased as GMO Aozora Net Bank’s net income turned positive

* Formerly referred to as “business-related profit.” Starting from full-year financial results for FY2025, business profit includes gains/losses on equity method investme nts and gains/losses on stock transactions, etc. (Gains/losses on stock transactions, etc. = Gai ns/losses on stock transactions + Net provision of allowance for investment loss + Gains/losses on equity derivatives). Re sults for FY2024 have been revised retrospectively.

Major factors for change in profit attributable to owners of parent

-9.2

35.0 101%

-1.1

-

-

Business profit*1

FY2024 Strategic Market & GMO Investments Inter- Aozora

Net Bank

Customer Relations Unit, etc.

Credit- Absence of Other FY2025 related one-time gain

Unit

national Business Unit

expenses

from the liquidation of an overseas subsidiary

Other*2

Improved the soundness of our securities portfolio, including the disposal of legacy assets

+6.6 billion yen

mainly in LBO finance

-1.5

20.5

25.7

-2.3

-1.4

-3.6

+0.9

+2.3

+10.8

(billion yen)

(FY2024 vs FY2025)

Business profit* by segment* 1

*1 Formerly referred to as “business-related profit.” Management accounting basis

*2 “Other” includes (i) business-related profit not included in the business units (e.g., G&A expenses not allocated to each unit, gains/losses on the sale of equities not inclu ded in any units), (ii) gains/losses on the sale of equities held solely for invest ment purposes, and (iii) revenue adjustment related to funding contribution.

• Net interest income increased due to growth in domestic loan outstandings as well as the difference in yields betwe en domestic loans and deposits

• Loan-related fee income from LBO finance, capital gain s from investment funds as well as revenue from sales of der ivatives all increased in response to strong customer demand

• Customer and transaction referrals from the Daiwa Securi ties Group increased

  Business profit

  (billion yen)

  FY2025 plan:

  26.7 bn yen

  (progress rate: 145%)

  Net revenue by business* 3

  Other (Environmental finance, M&A business) 7%

  Business recovery finance

  • Net interest income

    • Interest on loans and discounts

  • Non-interest income

    27.7

    38.6

    13%

    Domestic real estate finance 15%

    1. billion yen

       (+10.8 billion yen*4)

       LBO finance

       37.9

       1.0

       -23.1

       22.8

36%

• Loan-related and M&A fee income

• Gains/losses from limited partnerships

• Revenue from the sale of derivatives

• Other*2

  Domestic corporate business (corporate loan, venture debt, equity investments with a

  primary focus on engagement) 29%

  Major businesses in the Strategic Investments Unit

• G&A expenses

  *1 Management accounting basis

  FY2024

  FY2025

  • LBO finance

  • Environmental finance

  • Domestic real estate finance

  • Business recovery finance

  • M&A / business succession advisory services

  • Domestic corporate loans

  • Venture debt

  • Equity investments with a primary focus on engagement

  Areas of collaboration with Daiwa Securities Group

  *2 “Other” includes “Gains/losses on equity method investments,” “Gains/losses on stock transactions, etc.,” and “Amount o f revenue commensurate with the degree of contributionrelated to funding activity.” Starting from FY2025, the amount of revenue commensurate with the degree of contribution related to funding activity, which is a growth base in “Aozora 2027,” was included in net revenue of each unit. (Results for FY2024 have been re vised retrospectively.)

  *3 Based on the net revenue for each business group

  *4 Year-on-year comparison

  Business profit, etc. in major business groups

  Acquisition & Structured Finance Group

  (LBO finance)

  Corporate Business Group

  (domestic corporate business, venture debt, equity investme nts with a

  (billion yen)

• Net interest income

• Non-interest income

• Other*2

• G&A expenses

  12.5

  FY2024

  19.1

  7.6

  0.0

FY2025

Although spreads declined slightly due to a temporary factor related to a specific transaction, spreads

primary focus on engagement)

(billion yen)

6.9

• Net interest income

• Non-interest income

• Other*2

  -8.6

• G&A expenses

FY2024

8.8

1.2

-9.8

FY2025

Declined due to an increase in higher credit borrowers as

Loan outstandings and spread* 3

(billion yen)

generally remained at a stable level

Loan outstandings and spread* 3

(billion yen)

a result of enhancing our customer base

245 bps 247 bps 235 bps

448.0

66 bps 61 bps 57 bps

988.2 1,068.0 1,153.4

300.7 319.0

End-Mar. 2024

End-Mar. 2025

End-Mar 2026

End-Mar. 2024

End-Mar. 2025

End-Mar 2026

Loan outstandings Loan spread

*1 Management accounting basis

Loan outstandings Loan spread

*2 “Other” includes “Gains/losses on equity method investments,” “Gains/losses on stock transactions, etc.,” and “Amount o f revenue commensurate with the degree of contributionrelated to funding activity.” Starting from FY2025, the amount of revenue commensurate with the degree of contribution related to funding activity, which is a growth base in “Aozora 2027,” was included in net revenue of each unit. (Figures for FY2024 have been r evised retrospectively.)

*3 Loan outstandings and spread for each business group (excl . NPLs)

• Initiated the sale of legacy securities without maturity dates, reducing the balance of credit ETFs by 38%. In addi tion, conducted a repositioning of the ALM securities investment portfolio

• Continued disciplined portfolio management of overseas co rporate loans, focused on credit quality

  Business profit

  (billion yen)

  • Net interest income

  • Non-interest income

  • Other*2

  • G&A expenses

    FY2025 plan:

    Business profit in major business groups

    Financial Markets Group International Business Group

    (ALM & securities) (overseas corporate loans)

    (billion yen) (billion yen)

    9.6

    9.1

    -4.4

    -3.8

    FY2024

    -5.5

    FY2025

    FY2024

    FY2025

    -0.0

    -11.2

2.8

2.2

1.7

2.7

10.6 bn yen

(progress rate: 37%)

12.5 11.8

6.9 10.1 2.7 1.7

0.0 2.2 2.8

-4.3 -4.4

-0.0 -7.8 -7.2

-6.5

-11.2

7.5 3.9

2.2

FY2024 FY2025

Major businesses in the Market & International Business Unit

• ALM & securities

• Overseas corporate loans

• Overseas real estate non-recourse loans

*1 Management accounting basis

*2 “Other” includes “Gains/losses on equity method investments,” “Gains/losses on stock transactions, etc.,” and “Amount o f revenue commensurate with the degree of contributionrelated to funding activity.” Starting from FY2025, the amount of revenue commensurate with the degree of contribution related to funding activity, which is a growth base in “Aozora 2027,” was included in net revenue of each unit. (Figures for FY2024 have been r evised retrospectively.)

• Sales of fund wrap products provided by Daiwa Securities a nd investment trusts to retail customers were strong; AUM including Aozora Investment Management's products increased

• Our origination and distribution (O&D) business also gre w

  Business profit

  (billion yen)

  -10.4

3.5

3.9

■

FY2025 plan:

Business profit in business groups

Allied Banking Group Retail Banking Group (financial institutions business) (retail banking business) (billion yen) (billion yen)

2.3

1.4

-0.8

-0.2

FY2024

FY2025

FY2024

FY2025

1.5

1.6

0.3 bn yen

(progress rate: 355%)

1.4 1.1

Net interest income

• Non-interest income

• Other*2

• G&A expenses

  FY2024 FY2025

  Major businesses in the Customer Relations Unit

  • Financial institutions business

    (financial institution network, asset securitization business)

  • Retail banking business

  (deposits, wealth management business)

  Areas of collaboration with Daiwa Securities Group

  *1 Management accounting basis

  *2 “Other” includes “Gains/losses on equity method investments,” “Gains/losses on stock transactions, etc.,” and “Amount o f revenue commensurate with the degree of contributionrelated to funding activity.” Starting from FY2025, the amount of revenue commensurate with the degree of contribution related to funding activity, which is a growth base in “Aozora 2027,” was included in net revenue of each unit. (Results for FY2024 have been re vised retrospectively.)

• GMO Aozora Net Bank achieved positive net income on a full -year basis as non-interest income (fee income) and net in terest income both grew due to an increase in the number of corporate accou nts and deposit balances

  Business profit* 1

  (billion yen)

  1.9

  Number of corporate accounts and deposit balances

  77k

Deposit balances (billion yen)

1,315.1

946.7

615.9

244k

413.4 184k

125k

Number of corporate accounts

• Net interest income

• Non-interest income

  • Fee income (mainly from remittances and debit cards)

• G&A expenses

  2.1

  9.7

-0.4

End-Mar. 2023

End-Mar. 2024

End-Mar. 2025

End-Mar. 2026

FY2024

FY2025

Number of transfer transactions

Net revenue and net income *2

(billion yen)

• Net revenue

■■ Net income

5.7

9.8

15.0

FY2022 FY2023 FY2024 FY2025

827

629

454

A standalone service that offers GMO Aozora Net Bank’s ban king functions to financial and non-financial companies, allowing them to promote operational efficiency and create financial services

Total number of “BaaS byGMO Aozora” contracts

3.2

1.7

1,088

-4.1 -3.7

-1.8

FY2022 FY2023 FY2024 FY2025

*1 Management accounting basis

*2 GMO Aozora Net Bank’s non-consolidated results

End-Mar. 2023

End-Mar. 2024

End-Mar. 2025

End-Mar. 2026

Overseas

Interest income

Domestic

Net interest income

(billion yen)

Domestic net interest income maintained an upward trend, driven by larger differences in yields between loans and deposits resulting from the cumulative effect of higher yen interest rates, as well as an increase in domestic loan outstandings

1

2

Overseas net interest income declined year-on-year due to a decrease in loan balances as well as narrower market credit

Incl. interest on loans and discounts

Incl. interest and dividends on securities

Interest expenses

Incl. interest on deposits and NCDs

Incl. repurchase interest, etc. Incl. interest on swaps

Net interest income

(billion yen)

48.7 52.3

spreads, but showed some signs of recovery

Net interest margin, lending margin and securities margin

1.39% 1.48% 1.29%

0.91% 1.08% 0.98%

0.05%

0.09%

0.33%

FY2023 FY2024 FY2025

Net interest margin Lending margin Securities margin

24.7 23.9 24.3

28.0

Differences in yields between domestic loans and dep osits

2

1

1.50%

0.90% 1.14%

1

0.76% 0.92% 1.04%

0.46%

0.22%

FY2024 1H FY2024 2H FY2025 1H FY2025 2H

Domestic Overseas

0.14%

FY2023 FY2024 FY2025

Differences in yields between domestic loans and d eposits Yield on loans

Yield on deposits

P/L

Non-interest income / Gains/losses on stock transactions / Gains/losses on equity method investments

1

Net fees and commissions increased mainly due to an increase in loan-related fee income from LBO finance and GMO Aozora Net Bank’s fee income

72.9

79.1

* Uses an exchange rate of 0.0058 yen per 1 Vietnamese d ong

—Orient Commercial Joint Stock Bank—

Aozora’s equity method affiliate (Vietnam)

* Management accounting and mark-to-market basis. Investment income includes gains/losses from limited partnerships, gains/losses on stock tr ansactions, and interest and dividends on securities.

End-Mar.

2026

End-Mar.

2025

End-Mar.

2024

End-Mar.

2023

Other (incl. overseas debt funds)

Domestic/overseas equity investments

Venture funds Buyout funds

Investment in

business recovery claims

Real estate-related equities

325.2

295.6

36.5

33.9

31.7

75.2

294.9

43.9

35.7

26.4 42.8

76.1

70.6

291.8

36.3

33.6

(billion yen)

2

Recognized losses on ALM securities as part of the reposition ing of portfolio as well as on the disposal of legacy securitie s. As a result, losses on bond transactions were 6.9 billion yen in 4Q

Balance sheet summary

Vs. March 31, 2025

+839.2 bn yen

Total assets: 8.6 trillion yen

Balance Sheet

Earning Assets*

Total of loans and securities

(excl. loans to the government, government bonds, etc.)

“Aozora 2027”

Mar. 31, 2025 Mar. 31, 2026 Mar. 31, 2028 plan

4.5 tn yen 4.7 tn yen 5.5 tn yen

Domestic

3.6 tn yen

2.8 tn yen

3.0 tn yen

End-Mar. 2025

End-Mar. 2026

End-Mar. 2028 plan

Overseas

1.7 tn yen 1.7 tn yen

Other

1.4 tn yen

+437.7 bn yen

Net assets

0.4 tn yen

+31.9 bn yen

Loans

4.4 tn yen

+279.8 bn yen

+261.4

bn yen

+18.3

bn yen

Other

(current assets, etc.)

2.6 tn yen

+480.0 bn yen

Securities

1.4 tn yen +79.3 bn yen

Deposit, etc.

6.6 tn yen

+369.5 bn yen

Incl. NCDs, borrowed money (excl. borrowings from the BOJ) , and bonds

1.9 tn yen

End-Mar. 2025

* Management accounting basis

End-Mar. 2026

End-Mar. 2028 plan