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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© 2020 SHINSEI BANK, LIMITED
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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© 2020 SHINSEI BANK, LIMITED
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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© 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
6
© 2020 SHINSEI BANK, LIMITED
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
Investment demandof institutional investors
Our advantages(Growth fields)
Solar powerplants
Biomasspower plants
Offshorewind power
plants
InfrastructureREITs
Logistic facilitiesData centers
Officesresidences
Childcarefacilities
Elder care facilities
Hospitals/clinics
Environmentallycompliantaircrafts
Environmentallycompliant
ships
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© 2020 SHINSEI BANK, LIMITED
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)
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✔
✔
✔
✔
Structured finance
SyndicationDistribution
to institutional investors
Real asset-typealternatives
SustainabilityESG/SDGs
Investment demandof institutional investors
Our advantages(Growth fields)
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© 2020 SHINSEI BANK, LIMITED
Institutional Investor BusinessOur advantages and Investment Demand of Institutional Investors (Understanding of the Environment) ③
Real asset-typealternative
SustainabilityESG/SDGs
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
Investment demandof institutional investors
Our advantages(Growth fields)
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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
10
© 2020 SHINSEI BANK, LIMITED
Institutional Investor BusinessThree Business Strategies (Develop Structured Finance):Individual Strategies
DevelopStructured financeⅠ
Promote joint-investment
businesseswith institutional investors
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
Environmentallycompliant
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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© 2020 SHINSEI BANK, LIMITED
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
SustainabilityESG/SDGs
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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© 2020 SHINSEI BANK, LIMITED
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
Real asset-typealternatives
SustainabilityESG/SDGs
DevelopStructured financeⅠ Promote
joint-investment businessesⅡ Focus on sustainabilityⅢ
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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
14
© 2020 SHINSEI BANK, LIMITED
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
DevelopStructured financeⅠ
Promote joint-investment
businesseswith institutional investors
Ⅱ Focus on sustainabilityⅢ
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© 2020 SHINSEI BANK, LIMITED
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
DevelopStructured financeⅠ
Promote joint-investment
businesseswith institutional investors
Ⅱ Focus on sustainabilityⅢ
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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
17
© 2020 SHINSEI BANK, LIMITED
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
+
DevelopStructured financeⅠ
Promote joint-investment
businesseswith institutional investors
Ⅱ Focus on sustainabilityⅢ
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© 2020 SHINSEI BANK, LIMITED
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
DevelopStructured financeⅠ
Promote joint-investment
businesseswith institutional investors
Ⅱ Focus on sustainabilityⅢ
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© 2020 SHINSEI BANK, LIMITED
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
Structured finance SyndicationDistribution to institutional investors
Real asset-typealternatives
SustainabilityESG/SDGs
DevelopStructured financeⅠ Promote
joint-investment businessesⅡ Focus on sustainabilityⅢ
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© 2020 SHINSEI BANK, LIMITED
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
Structured finance SyndicationDistribution to institutional investors
Real asset-typealternatives
SustainabilityESG/SDGs
DevelopStructured financeⅠ Promote
joint-investment businessesⅡ Focus on sustainabilityⅢ
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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
22
© 2020 SHINSEI BANK, LIMITED
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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© 2020 SHINSEI BANK, LIMITED
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.