Better Banking Better Banking –– Better ValueBetter Value

June, 2004

BUILDING A JAPANESE BANKING LEADER

(TSE : 8303)

Investors Meeting FY2003

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The following materials contain statements that constitute forward-looking statements, plans for the future, management targets, etc. relating to the Company and its subsidiaries. These forward-looking statements are based on current assumptions of future events andtrends, which may be incorrect. Actual results may differ materially from those in the statements as a result of various factors.

Unless otherwise noted, the financial data contained in these materials are presented under Japanese GAAP. The Company disclaims any obligation to update or to announce any revision to forward-looking statements to reflect future events or developments. Unless otherwise specified, all the financials are shown on a consolidated basis.

Information concerning financial institutions other than the Company and its subsidiaries are based on publicly available information.

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FY2003: Full Year Operational Highlights

• Net profit rose 25.2% to JPY 66.4 billion

• Non-interest revenue was JPY 66.3 billion

• NPL’s fall to 2.8% of total claims or JPY 97.3 billion- an overall decline of JPY 135.9 billion during FY2003

• 56% of total customer funding from retail customers- up 6% over last year

• Credit rating upgrades

Significant Progress in All Key Areas

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Financial OverviewJPY Bn

FY’01 FY’02 FY’03Total Revenue 120 108 124Total Expenses 70 70 70Net Income 61 53 66

ROA 0.7% 0.7% 1.0%ROE (2) 10.1% 8.1% 9.4%Adjusted ROE (3) 9.9% 10.2% 14.6%

FY2003 Full Year: Stronger Returns

1. Reflects JPY 20Bn of realized losses from Shinsei’s US bond portfolio2. Based on total shareholders’ equity3. Adjusted ROE=Net income / Average adjusted total shareholders’ equity

(Adjusted total shareholders’ equity=Risk weighted assets x 10% (assuming 10% Tier 1 ratio))

(1)

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Total Revenue and Net Income

Total RevenueJPY Bn

Total RevenueJPY Bn

120108

124

0

20

40

60

80

100

120

140

FY2001 FY2002 FY2003

Total Revenue

Net IncomeJPY Bn

Net IncomeJPY Bn

61 5366

0

20

40

60

80

100

120

140

FY2001 FY2002 FY2003

Net Income

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ROA and ROE

ROA and Total Assets% JPY Bn

ROA and Total Assets% JPY Bn

0.7% 0.7%

1.0%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

FY2001 FY2002 FY20033,000

4,000

5,000

6,000

7,000

8,000

9,000

ROA Total Assets

ROE and Equity% JPY Bn

ROE and Equity% JPY Bn

10.1%8.1%

9.4%

0.0%

4.0%

8.0%

12.0%

16.0%

FY2001 FY2002 FY2003400

500

600

700

800

ROE Equity

(Total Assets and Equity are as at March 31 of each fiscal year)

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Driving Profitability and Returns

Institutional BankingIntegrated teams of product specialists and relationship managersDeliver solutions and grow quality assetsCross selling of diversified services to broaden customer relationships

Retail BankingLow cost direct banking model to build customer baseProvide innovative products and customer centric servicesSegmentation and initiative aimed at affluent customers

Strong Balance Sheet / Better Funding

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Institutional Banking:Distinctive Features and Focus

Traditional Products: - Loans- Debentures- Forex／Derivative

New Products, Services: - Credit Trading- Securitization　（ABS、MBS）- Non Recourse Financing- Corporate Revitalization, Private Equity- M&A Advisory- Non-Bank

Real Estate Secured LoansUnsecured LoansHousing LoansInstallment Loans

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Retail Banking:Innovative Products and Quality Services

Traditional Products: - Savings- Time Deposits- Debentures

New Products: - PowerFlex – Integrated Account- Foreign Currency Savings / Deposits- Mutual Funds- Variable Annuity Insurance- High Net-Worth Special Products- PowerSmart Housing Loan

New Services: - 24x7(ATM, Call center, Internet Banking)

- ATM networks- International Cash Card

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Growth in PowerSmart Housing LoansJPY Bn Customers (Thousands)

Growth in PowerSmart Housing LoansJPY Bn Customers (Thousands)Growth in PowerFlex Deposits and Accounts

JPY Tn Accounts (Thousands)

Growth in PowerFlex Deposits and AccountsJPY Tn Accounts (Thousands)

Retail Banking:Rapid Retail Deposit and Loan Growth

• “PowerFlex” growth in 2003: 15%• “PowerSmart” reached JPY 140 billion

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

6/01 9/01 3/02 9/02 3/03 9/03 3/040

100

200

300

400

500

600

700

Deposits Outstanding Accounts

0

20

40

60

80

100

120

140

160

3/02 9/02 3/03 9/03 3/040

1

2

3

4

5

6

7

Loans Outstanding Customers

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Revenue Mix Continues to Diversify

Revenue CompositionJPY Bn %

Revenue CompositionJPY Bn %

16.031.3 41.6

66.3

85.8

88.4 66.1

57.2

54%

15%

27%39%

46%

85%

73%

61%

0

30

60

90

120

150

3/2001 3/2002 3/2003 3/20040%

20%

40%

60%

80%

100%

Net Interest Income/RevenueNon Interest Income/Revenue

Net Interest IncomeNon Interest Income

• Further progress in revenue diversification

• Non-interest income growth more than offsetting interest income decrease

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Better Asset / Loan Composition in FY2003

1. Internal Facility Rating Basis (Transformed to corresponding ratings of R&I)

Improving Loan Portfolio Quality (1)

%

Improving Loan Portfolio Quality (1)

%

8678

54

79

14

713

33

0

20

40

60

80

100

3/2002 3/2003 3/2004BBB- or above B- to BB+ below B-

1. Internal category, differ from financial balance sheet

Major Risk Asset Categories (1)

%

Major Risk Asset Categories (1)

%

1322 16

231312

13

95

48

5670

0

20

40

60

80

100

3/2002 3/2003 3/2004JGBs Loans Structured Loans Other

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Funding CompositionFunding Composition

Better Mix of Funding• Dramatic change in liability composition:

low-cost and varied sources of funding

72%61%

50% 44%

20%21%

17%17%

8%18%

33% 39%

0%

20%

40%

60%

80%

100%

3/2001 3/2002 3/2003 3/2004

Institutional Deposits/Debentures Retail Debentures Retail Deposits

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Reduction of NPLs (1)

JPY Bn %

Reduction of NPLs (1)

JPY Bn %NPL Coverage Ratio (1)

As of 3/2004, %

NPL Coverage Ratio (1)

As of 3/2004, %

Balance Sheet Gets Even Stronger• Decreased NPLs by JPY 1.8 trillion (or 94%) over 4 years• The best NPL coverage ratio compared to the Japanese mega banks• Remains conservatively reserved

1. Non-consolidated basis

74%78%80%

70%

99%

Shinsei MTFG SMFG Mizuho UFJ

1. Non-consolidated basis

1,865

1,2961,114

23397

20.0%

22.0%

2.8%

5.7%

19.0%

0

500

1,000

1,500

2,000

2,500

3/2000 3/2001 3/2002 3/2003 3/20040%

5%

10%

15%

20%

25%

NPL Amount NPL Ratio

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Further Capital Base Improvement

• Industry leading regulatory capital levels• High quality of capital

Regulatory Capital RatioAs of 3/2004, %

Regulatory Capital RatioAs of 3/2004, %

4.7%5.8%6.0%7.1%

16.2%

9.2%11.4%11.4%

13.0%

21.1%

Shinsei MTFG SMFG Mizuho UFJ

Tier 1 Ratio BIS Ratio

Tier 1 Capital QualityAs of 3/2004, %

Tier 1 Capital QualityAs of 3/2004, %

36%

66%53%

83%97%

64%

34%47%

17%3%

-15%

5%

25%

45%

65%

85%

105%

Shinsei MTFG SMFG Mizuho UFJ

Core Capital Net DTAs

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Significant Accomplishments in FY2003

• Achieved financial targets

• Proof of strength of Shinsei business model

• Successful IPO / Tokyo Stock Exchange Listing

• Change of charter to “ordinary” bank

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Shinsei Bank: Clear Priorities

• Uniquely positioned to leverage product expertise and customer knowledge in institutional banking

• Innovative, customer centric approach to retail banking in Japan

• Strength in asset quality, funding mix and capital

• Management focused on long-term growth of corporate value– Strategy– Action Plan– Budget

Generating Value and Superior Returns

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• Shinsei Bank is a Japanese banking institution founded on global standards of governance and management. With over $60 billion in assets and 29 branches throughout Japan, Shinsei provides a broad range of value-added financial solutions to institutional and individual customers under the banner of “Better Banking.” Our PowerFlex account, free ATM network and internet banking service, and customer friendly financial centers have redefined the Japanese retail banking experience. Shinsei is committed to long-term growth and profitability by expanding its customer-focused business model.