Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2025 (Consolidated)

This document has been translated from the Japanese original for reference purposes only. Although Japan Securities Finance intends this to serve as a faithful translation of the Japanese original, it does not guarantee the accuracy and correctness of the translation, and encourages you to refer to the Japanese original.

Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2025 [Japanese GAAP] (Consolidated)

Scheduled date for commencement of dividend payments: -

Preparation of supplementary explanatory materials on quarterly financial statements: Yes

Convening of quarterly financial results briefing: None

(Millions of yen, rounded down to nearest million)

1. Consolidated Financial Results

for the Third Quarter of Fiscal 2024 (April 1, 2024 - December 31, 2024)

(1) Consolidated Operating Results

(% change from year-on-year for those items)

(Note) Due to changes in the presentation method during this first quarter consolidated cumulative period, the operating revenue, operating income, and respective growth rates for 3rd Quarter of Fiscal 2023 have been revised to reflect the changes in presentation.

(2) Consolidated Financial Position

2. Dividends

3. Consolidated Performance Forecast for Fiscal 2024 (April 1, 2024－March 31, 2025)

(% change from the previous fiscal year)

• Notes
1. Changes in scope of significant consolidated subsidiaries (changes in the case of specified subsidiaries accompanying change in the scope of consolidation) : None
2. Adoption of specified accounting methods for quarterly consolidated financial statements : None
3. Changes in accounting policies and changes or restatement of accounting estimates
• Changes in accounting policies caused by revision of accounting standards : Yes

• Changes in accounting policies other than ① : None
  ③ Changes in accounting estimates : None
  ④ Restatements : None

(Note) See section “2. Quarterly Consolidated Financial Statements and Notes (3) Notes Regarding

1. Number of issued and outstanding shares (common stock)

• Number of issued and outstanding shares (including treasury stock)

• Average number of shares (quarter-to-date)

for nine months ended Dec. 31, 2024 : 83,539,368

for nine months ended Dec. 31, 2023 : 85,843,168

(Note) The number of treasury stock shares deducted in the calculation of the number of treasury stock shares at the end of the period and the average number of issued and outstanding shares during the period (quarter-to-date ) includes the shares of the Company held by the Share Benefit Trust (BBT).

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Note: Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: Yes (voluntary)

Note: Explanation on proper use of business performance forecasts and other notes

The Company does not disclose earnings forecasts due to the fact that the performance of its securities finance business, the Group's core business, is significantly affected by trends in the stock market, interest rates, and other factors. Instead, for the purpose of disclosing information appropriate for the Group’s type of business, we provide estimates calculated based the outstanding balance of margin loans business and other assumptions.

Furthermore, financial results are disclosed as soon as reasonable estimates can be made for each quarter.

See section “1. (3) Future Outlook” in the attached materials regarding the details.

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1. Qualitative Information on the Current Quarter Results

1. Review of Operating Results (Financial and Economic Environment)
   During the third quarter of the consolidated cumulative period (from April 1, 2024 through December 31, 2024), the economic environment continued to recover at a moderate pace against a backdrop of improved corporate earnings and inbound demand, despite continued concerns regarding downside risks to the economy from the impact of financial policies in western countries and a slowdown in the Chinese economy, as well as worries regarding rising prices and middle east affairs. In addition, after the BOJ terminated its negative interest rate policy, the demand for cash increased as market interest rates began to rise.
   Looking at the stock market, the Nikkei Stock Average (closing price) began the period at 39,803 yen and increased to its highest value on record of 42,224 yen on July 11th, driven by strong corporate earnings. After the BOJ announced an additional rate hike at the end of July, stock prices began to fall as the JPY rapidly weakened against the USD on the prediction that the interest rate gap would narrow between Japan and the U.S., reaching its lowest level for the period at 31,458 yen, with the largest decline on record occurring on August 5th. The market then recovered rapidly, but stock prices remained back-and-forth, with exchange rates and the trade policies of the next U.S. president serving as key factors, to end at 39,894 yen at the end of December.
   Looking at the outstanding balance of standardized margin transactions on the Tokyo and other markets (Tokyo Stock Exchange, Nagoya Stock Exchange, and PTS), the outstanding balance of margin buying increased from 2.91 trillion yen level at the beginning of the period, hovering around 3 trillion yen level, then peaked at 3.15 trillion yen level in late July. Later it declined during the steep decline in stock prices in August, hovering around 2.5 trillion yen level, to reach the lowest level for the period at
   2.28 trillion yen at the end of December. Meanwhile, the outstanding balance of margin selling subsequently increased from 610 billion yen level at the beginning of the period to peak at 650 billion yen in early July. It bottomed out for the period at 320 billion yen level during the steep decline in stock prices in August, and then gradually recovered with the rise in stock prices to end at 540 billion yen level at the end of December.

(Results for the Third Quarter of Fiscal Year Ending March 2025)

In the third quarter cumulative period, our group posted an increase in its consolidated operating profit to 9,646 million yen (up 5.8% year-on-year). This was due to robust performance in security finance operations, such as loans for margin transactions and equity repo transactions, driven by a buoyant stock market and changes in interest rate conditions which lead to increased demand for financing. Furthermore, in trust banking business, managed trust services, centered on asset-backed loan trusts, continued to perform strongly. As a result, our consolidated ordinary profit also increased to 10,450 million yen (up 7.3% year-on-year).

In addition, the gain on the sale of real estate held by the consolidated subsidiary and the sale of unlisted stocks held by JSF were recorded as extraordinary income, and accordingly, the quarterly profit attributable to owners of parent increased significantly to 8,840 million yen (up 25.2% year-on-year).

(2) Overview of Financial Status

(Status of Assets, Liabilities, and Net Assets)

As of the end of the third quarter of the consolidated accounting period (December 31, 2024), total assets amounted to 14,223.8 billion yen (an increase of 479.1 billion yen from the previous fiscal year- end), total liabilities amounted to 14,086.4 billion yen (an increase of 486.3 billion yen from the previous fiscal year-end), and total net assets amounted to 137.3 billion yen (a decrease of 7.2 billion yen from the previous fiscal year-end).

The main factors for this are as follows. - Assets:

Cash and deposits decreased by 176.5 billion yen year-on-year, due to a decrease in deposits to the current account at the Bank of Japan.

Operating loans decreased by 401.6 billion yen from the previous fiscal year-end, due to a decrease in lending at JSF Trust and Banking Co., Ltd.

Securities purchased under gensaki resale agreements increased by 2,214.9 billion yen from the previous fiscal year-end, due to an increase in bond gensaki transactions.

Cash collateral provided for securities borrowed decreased by 910.2 billion yen from the previous fiscal year-end, due to a decrease in bond repo transactions.

- Liabilities:

Securities sold under repurchase agreements increased by 1,978.0 billion yen from the previous fiscal year-end, due to an increase in bond gensaki transactions.

Cash collateral received for securities loaned decreased by 919.5 billion yen from the previous fiscal year-end, due to a decrease in bond repo transactions.

Borrowed money from trust accounts decreased by 152.3 billion yen from the previous fiscal year-end, due to a decrease in standby funds in the trust accounts at JSF Trust and Banking Co., Ltd.

- Net assets:

Shareholders' equity increased by 0.2 billion yen from the previous fiscal year-end, due to the recognition of interim net income.

Other comprehensive accumulated income decreased by 7.5 billion yen from the previous fiscal year- end, as a result of decreases in unrealized gains on available-for-sale securities incidental to price fluctuations in securities held, and deferred gains or losses on hedges.

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[Reference]

Status of the Group's Operating Revenues by Business Sector

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Status of the Group's Transaction Balances by Business Sector (Average Balance)

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(3) Future Outlook

The Company does not disclose earnings forecasts due to the fact that the performance of its securities finance business, the Group's core business, is significantly affected by trends in the stock market, interest rates, and other factors. Instead, for the purpose of disclosing information appropriate for the Group’s type of business, we provide estimates calculated based the outstanding balance of margin loans business and other assumptions.

(Note) Revision of consolidated performance estimates, etc. in the current quarter: None

[Estimates for Consolidated Performance] (Full Year)

[Balances for Margin Transaction Business Serving as Premise for Estimates] Average balance of margin transactions: Loans 370 billion yen (-10 billion yen),

Securities lending 150 billion yen (-10 billion yen)

Margin transaction interest rates, etc.: Loan interest rate 1.04% per annum (+0.1%), Securities borrowing fees 0% per annum, Securities lending fees 0.4% per annum

(Note: Figures in parentheses are comparisons to the previously announced estimates.)

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2. Quarterly Consolidated Financial Statements and Notes

(1) Quarterly Consolidated Balance Sheet

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