Deposits
During the year under review, the Bank sought to ensure continued stable funding, but deposits fell ¥28.9 billion to ¥2,582.0 billion on a consolidated basis at the fiscal year-end. Corporate deposits increased, but individual deposits declined, chiefly reflecting diversifying asset management needs. Public authority deposits also declined, reflecting tighter regional financial policy. During the period under review, we stepped up efforts to market investment trusts and individual pension insurance products to respond to the diversification of customer needs for financial products. As a result we increased the balance of investment trusts in custody during the period under review by ¥50.6 billion to a year-end balance of ¥92.5 billion.

Loans and Bills Discounted
The balance of loans and bills discounted at the end of the fiscal year fell ¥57.1 billion to ¥1,756.6 billion. Corporate funding demand remained at a low ebb within Wakayama Prefecture and public works-related borrowing also declined. However, all Bank branches worked to attract new corporate borrowers, particularly in Osaka Prefecture, and to meet corporate funding demand. Housing loans rose ¥24.0 billion, on continuing firmness in mortgage markets.

Securities
The balance of securities holdings decreased ¥2.9 billion to ¥725.0 billion during the period under review.

Cash Flows
Net cash provided by operating activities amounted to ¥13.2 billion, chiefly reflecting reduced lending. Net cash used in investment activities came to ¥3.0 billion, due chiefly to purchases of marketable securities. Net cash used in financing activities amounted to ¥0.4 billion, due to a rollover of subordinated loans. As a result, cash and cash equivalents at the year-end stood at ¥51.5 billion, an increase of ¥9.8 billion from the previous year-end.

Capital Ratio
The capital ratio (domestic standards) improved 1.39 points to 9.11% on a consolidated basis, chiefly reflecting new procurement of subordinated loans. On a non-consolidated basis (domestic standards), it rose 1.34 points to 9.01%.

Earnings
Total income rose ¥1.2 billion year on year to ¥72.8 billion (US$678 million), reflecting a rise in fees and commissions and other income. Total expenses rose ¥5.9 billion year on year to ¥64.2 billion (US$598 million)on increases in other operating expenses and other expenses. As a result of the above, income before income taxes and minority interests came to ¥8.5 billion (US$80 million), and net income totaled ¥5.7 billion (US$54 million).