[Company analysis] Aozora Bank, Ltd. (あおぞら銀行)

「Aozora Bank, Ltd. (あおぞら銀行)」is a reconstructed bank of「The Nippon Credit Bank, Ltd.(株式会社日本債券信用銀行)」. This bank is not a mega bank or a regional bank, but it has a unique positioning for market differentiation. Currently, they have 20 stores nationwide, and they specialized in customers who are related in financial business. The number of consolidated employees is approximately 2,193.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Aozora Bank, Ltd.
Company name (Japanese)	あおぞら銀行
Date of establishment	April 1957
Headquarters location	〒102-8660 東京都千代田区麹町6-1-1
Capital	100,000
Consolidated sales	160,136
Consolidated operating profit	47,796
Consolidated total assets	5,255,048
Consolidated capital	448,710
Capital adequacy ratio	8.5%
Consolidated number of employees	2,193

 

 

 

2. Summary and Features

 
The predecessor of「Aozora Bank」is the「Japan Real Estate Bank(日本不動産銀行)」. This is a bank established by the "Long-Term Credit Bank Act(長期信用銀行法)" in April 1957, based on the balance of assets of the former「Joseon Bank(朝鮮銀行)」. At the time of its establishment, this bank was engaged in business activities centering on real estate mortgage loans. In 1977, it changed its name to「The Nippon Credit Bank, Ltd.(株式会社日本債券信用銀行)」. However, due to the aftershock of collapse of bubble economy, this bank went bankrupt in 1998.

As a special public managed bank,「The Nippon Credit Bank」was placed under the control of「Deposit Insurance Organization(預金保険機構)」. In September 2000, this bank was sold to a fund created by「Softbank Corporation(ソフトバンクグループ)」and「Tokio Marine Holdings, Inc.(東京海上ホールディングス)」. Then, they changed its name to「Aozora Bank」and reborn as a general bank from 2006.

The main business of「Aozora Bank」is to provide small and medium-sized enterprises with lend through venture capital of affiliated companies. For this, they cooperate with start-up companies, non-bank / real estate investment trust companies and regional banks. Besides, they provide "Direct time deposit" which has a slightly higher interest rate than usual to individual customers, in order to acquire new customers. 

As of 2003,「SoftBank Corporation」sold the stock share of「Aozora Bank」to an American investment fund, and with a chain of events, this bank were able to relist on the Tokyo Stock Exchange in November 2006. In 2009, it was said that「Shinsei Bank」and「Aozora Bank(あおぞら銀行)」are holding discussions for business integration. However, the Shinsei Bank side turned to the final deficit in the consolidated financial statements for the fiscal year ended March 2010, and both companies failed to reach an agreement on the management policy. The negotiations were broken.

「Aozora Bank」is neither a megabank nor a regional bank. They do not have advantages based on scale or specific area. It seems that they only have mediocre ability, however, they still have business flexibility and it is a competativeness of this bank. 「Aozora Bank」is not fully funded megabank, so ifthey expand branch network, they invite relatively small resistance from local banks. At the same time, they even cooperate with regional banks in order to expand the service range. ecently,「Aozora Bank」opened an internet branch called "BANK Branch" with the interest rate on ordinary deposits is 0.2% per year. 80% of Aozora Bank's existing customers are 50s. So this action is for acquiring new customers, mainly in their 30s and 50s.

 

 

 

3. Major Business

 

■ Bank business

 

 

 

4. Financial information

 

※Unit is JPY million

	2016	2017	2018
Consolidated sales	134,704	148,819	160,136
Consolidated operating profit	51,764	57,984	47,796
Consolidated total assets	4,586,007	4,912,792	5,255,048
Consolidated net assets	420,345	437,234	448,710