Shinsei IR Day...Institutional Investor Business Three Business Strategies (Develop Structured...

Shinsei IR Day

Institutional BusinessFebruary, 2020

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© 2020 SHINSEI BANK, LIMITED

Agenda

Framework of the Institutional Investor Business1Our advantages and Investment Demand of Institutional Investors2

Three Business Strategies3

Develop Structured FinanceⅠPromote Joint Investment Businesses with Institutional InvestorsⅡ

Focus on SustainabilityⅢ

Key Takeaways4

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Institutional Investor BusinessFramework (Three Strategies and Purposes) ①

Ⅰ

Ⅲ

Ⅱ

Three Strategies

Expand earnings opportunitiesby creating new growth

Arrangement and asset management fees, etc.

Focus on sustainability

Develop structured finance

Promote joint-investment

businesseswith institutional investors

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Institutional Investor BusinessFramework (Advantages of Shinsei Bank and Affinities to Investment Demand) ②

Project finance for Infrastructures

renewable energies, etc.

Real estate finance

InfrastructuresDistribution toinstitutional

investors

Ship and Aviationfinance

Environmental real estate

Environmentallycompliant

ships and aircrafts

Investment demandof institutional investors

Structured finance

SyndicationDistribution

to institutional investors

Real asset-typealternatives (※)

Infrastructures, real estates, etc.

SustainabilityESG/SDGs

Our advantages (Growth fields) Affinities

Real estates

Ships and Aircrafts

Syndication

Funds

Project bonds

ABLs

Diversification

※Real asset type: Targets real estate and infrastructure※Alternative: Alternative investment targeting assets different from traditional assets such as listed stocks and bonds

Assets that solve

social issues

Healthcarefinance

Social, EnvironmentalInfrastructures

renewable energies, etc.

Healthcare assets

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Agenda





Key Takeaways4

6


Institutional Investor BusinessOur advantages and Investment Demand of Institutional Investors (Understanding of the Environment) ①

Structured finance Syndication Real asset-type

alternativesSustainability

ESG/SDGs

Structuredfinance

Demand fields Specific areas

Project financefor

renewable energies

Real estate finance

Healthcare finance

Ship and aviationfinance


Our advantages(Growth fields)

Solar powerplants

Biomasspower plants

Offshorewind power

plants

InfrastructureREITs

Logistic facilitiesData centers

Officesresidences

Childcarefacilities

Elder care facilities

Hospitals/clinics

Environmentallycompliantaircrafts


ships

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Institutional Investor BusinessOur advantages and Investment Demand of Institutional Investors (Understanding of the Environment) ②

SyndicationDistribution to

institutional investors

Demand fields Finance demand

Greater demand for expanding syndication business due to larger transactions centered on project finance

Major financialinstitutions

Investor attributes Investment demands

Regional banks

Pension funds

Continued demand for syndication from a risk management perspective

Shifting from credit market products to loan products such as project finance

More diversified investment targets due to difficult environment for securities investment

Greater demand for investing in real asset-type alternative products, ESG related products(See next page for details)

✔

✔

✔

✔

✔

Structured finance

SyndicationDistribution

to institutional investors

Real asset-typealternatives




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Institutional Investor BusinessOur advantages and Investment Demand of Institutional Investors (Understanding of the Environment) ③

Real asset-typealternative


Demand field Background of the investment demand

Long-term and stable income1

Risk diversification2

Hedging inflation3

Matched long-term investment from a perspective of timeframe

1

Investment requirement in order to comply with Principles for Responsible Investment (PRI)

2

Progress of scientific researches on environmental risks and its materialization

3

Structured finance Syndication Real asset-type

alternativesSustainability

ESG/SDGs



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Agenda





Key Takeaways4

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Institutional Investor BusinessThree Business Strategies (Develop Structured Finance):Individual Strategies

DevelopStructured financeⅠ



Ⅱ Focus on sustainabilityⅢ

Offshore wind power

plant

Infrastructure

Focus fields with

growth potential

Real estate Healthcare Ship and aviation

Mezzanine investment

for renewable energy

InfrastructureREIT

related finance

High-speclogistic facilities

Environmental real estate

Hospitals and care facilities

Nurseries andChildcare facilities


ships and aircrafts

Fields to bemaintained

Solar powerplant

Officesand residences Ships and aircraft

Key business strategic fields (Develop structured finance)

Real assets

※We will continue to promote structured finance targeting other real and non-real assets (LBO, etc.), as well.

Urban redevelopment

project

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Institutional Investor BusinessThree Business Strategies (Develop Structured Finance) :Achievements①

435.9 323.1 395.1 339.9 406.2 520.1638.1 666.9 708.6

535.0

378.9 427.1 487.6

483.8

556.7

652.6 725.4

781.1

Real estate financeProject finance, Ship and aviation finance

Balance of key structured finance fields Unit: JPY BN

The balance has grown steadily centered on project finance and real estate finance Established a position as one of key arrangers in the domestic renewable energy and project finance areas

Structured finance Syndication Real asset-typealternatives


DevelopStructured financeⅠ Promote

joint-investment businessesⅡ Focus on sustainabilityⅢ

Solar power63%

Wind power7%

Biomass10%

Thermal power 20%

Attributes of domestic project finance

Balance as of Dec. 31, 2019, including commitment amount

※ Operating asset balance

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Institutional Investor BusinessThree Business Strategies (Develop Structured Finance) :Achievements②

Client investors are expanding, including major institutional investors and regional banks The ratio of sales to investors to the syndicated amount (the syndication ratio) has grown significantly in

domestic project finance

Originated and syndicated amounts of domestic project finance nit: JPY BN

3.0 13.3 9.6 25.8 44.471.0

29.4

57.520.1

94.4 59.9

71.5

9.26%18.78%

32.30%21.44%

42.59%49.82%

Syndication amountOur final hold amountSyndication ratio(to total arrangement amount)

Structured finance SyndicationDistribution to institutional investors





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Agenda





Key Takeaways4

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Institutional Investor BusinessThree Business Strategies (Promote joint-investment businesses):Individual Strategies

Infrastructure senior debt funds

Infrastructure mezzanine debt funds

Investment funds foroperational assets

Debt funds for health care

facilities

Reform loansInvestment funds

Infrastructure Real estate Healthcare

Key business strategic fields (joint-investment) *including group business

Main Fields to bepromoted

Fields to be maintained Syndicated Loan

Real assets

Fields underconsideration Project bonds and ABLs

Debt funds for Environmental

real estate





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Institutional Investor BusinessThree Business Strategies (Promote joint-investment businesses):Framework

The whole framework for the joint-investment businesses

Infrastructureassets

renewable energy, etc.

Senior loansProject finance

Mezzanine loansProject finance

Equity

Business operators（Sponsors）

Infrastructure project Institutional Investors

Infrastructuresenior debt

funds

InfrastructureMezzanine

andEquity FundsInfrastructure

Joint business funds

Joint investment

Life insurancecompanies

Cooperative financial institution

Major Banks

Regional banks

Non-banks

Pension funds





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Agenda





Key Takeaways4

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Institutional Investor BusinessThree Business Strategies (Focus on Sustainability): Framework

Our own Sustainability/ESG assessment

Develop the institutional investor business focusing on sustainability

Build Shinsei Bank’s own assessment model

Assess investment transactions and provide assessment such results to the investors of the transactions

Develop structured financeⅠ

Promote joint-investment businessesⅡ

Establish the Sustainable Impact Development Division

Integrating sustainability/ESG components into the explained strategies

＋





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Institutional Investor BusinessThree Business Strategies (Focus on Sustainability):Establish a Dedicated Division

Sustainable impact

Marge social impactand sustainability

Institutional business

Institutional investorbusiness

Institutional business merged with sustainable impact

＋＝ Institutional investorbusiness

Build a framework for conducting Shinsei’s own sustainability/ESG assessment and for providing products responding to the investment demand of institutional investors

In addition, establish a dedicated division for promoting the sustainable impact (*) strategy of the entire Institutional Business

Develop and promote products for corporate customers such as positive impact loans and financing programs

※Sustainable impact: A concept which merges “sustainability” and “ESG/SDGs” with “social impact” aiming to provide positive impacts on the entire society, such as environment, poverty, education, welfare and economy

Establish the Sustainable Impact Development Division (effective February 1, 2020)

Sustainable impactassessment

Institutional Investor Business

Business strategyfor corporate

customers

(New)Sustainable Impact Development Division

Promote the following functions related to sustainable impact





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Institutional Investor BusinessThree Business Strategies (Focus on Sustainability): Achievements ①

A large number of renewable energy project finance transactions As of December 31, 2019: Solar: 53 (1,479MW), Wind: 8 (210MW), Biomass: 4 (181MW）

Renewable energyproject finance

Senior loanfor infrastructure

REITs

Senior loan for Canadian Solar Infrastructure Fund with Green bonds assessment by JCR

Senior loan for Tokyo Infrastructure Energy Investment Corporation

Healthcare finance

Established a healthcare REIT mainly targeting nursing care facilities Healthcare asset finance through collaboration with REITs and investment funds A new type of real estate non-recourse loan for a clinic in Osaka and a nursery in Tokyo

respectively

Ship finance Ship finance for a major ship owner installing equipment for complying with

environmental regulations Installment-type finance for a large oceangoing-cargo vessel installing equipment for

complying with environmental regulations by Showa Leasing

Representative investment transactions including both real asset-type alternative and sustainability/ESG components

Representative structured finance transactions






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Institutional Investor BusinessThree Business Strategies (Focus on Sustainability): Achievements ②

Impact Investment Fund by Shinsei Corporate Investment Limited and Shinsei Impact Investment Limited

Total fund size: JPY500M Targets: Companies operating child-care related businesses such as daycare, after-

school care, education, household support, “double-care” which supports balanced child raising and nursing care, support for career development of women and work-life balance

Japan Impact Investment I Limited Partnership

(Child Care Support Fund)

Japan Impact Investment II Limited Partnership

(Second fund)

Total fund size: JPY2,600M (as of December 31, 2019) Targets: “Childcare, nursing care and new workstyle related businesses” such as

companies contributing to the creation of an environment allowing people to continue working despite life events including childcare and nursing care, companies providing education/childcare services for developing next generation human resources and companies operating businesses that support balanced childcare and nursing care

Selected as “Zenin Shiawase (Everybody Happy)” JAPAN NEW INNOVATOR 99 by Forbes JAPAN Won the Childcare Support Award of Nikkei WOMAN Woman of the Year 2019 by Nikkei BP Received Tokyo Financial Award 2019-ESG Investment Category






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Agenda





Key Takeaways4

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Key Takeaways

1We will achieve further growth in our structured finance field by promoting a new fund business (joint-investment business) while developing existing structured finance business.

2 We will promote our Institutional Investor Business by adding sustainability/ESG approaches through our own assessment framework.

3 Furthermore, we will incorporate our sustainability / ESG initiative into our whole institutional business.

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Disclaimer

• The preceding description of Shinsei Bank Group’s Medium-Term Strategies contains forward-lookingstatements regarding the intent, belief and current expectations of our management with respect to ourfinancial condition and future results of operations. These statements reflect our current views with respectto future events that are subject to risks, uncertainties and assumptions. Should one or more of these risksor uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may varymaterially from those we currently anticipate. Potential risks include those described in our annualsecurities report filed with the Kanto Local Finance Bureau, and you are cautioned not to place unduereliance on forward-looking statements.

• Unless otherwise noted, the financial data contained in these materials are presented under JapaneseGAAP. Shinsei Bank Group 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 financialsare shown on a consolidated basis.

• Information concerning financial institutions and their subsidiaries other than Shinsei Bank Group arebased on publicly available information.

• These materials do not constitute an invitation or solicitation of an offer to subscribe for or purchase anysecurities and neither this document nor anything contained herein shall form the basis for any contract orcommitment whatsoever.

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