ANNUAL REPORT 2011 for the year ended March 31, 2011

To Our Stakeholders

The Japanese credit industry is currently experiencing a challenging business environment due to various regulatory changes, including the revision of the Money-Lending Business Control and Regulation Law, and the Installment Sales Law.
In the face of these challenges, Credit Saison is harnessing its customer base of 35.7 million people, network of alliances spanning a wealth of industries, and innovative products and services, and combining these advantages to create a unique and powerful strategy called "Collaborative Management." By executing this strategy, we are determined to become No. 1 in the cashless settlement market.

Hiroshi rinno President and Ceo Head of Audit office and Credit Card division

We would like to express our heartfelt sympathy to all those affected by the Great East Japan Earthquake, and our hopes for the earliest possible recovery of the disaster-stricken areas. Working with customers, we were able to raise about ¥600 million in financial donations for the disaster appeal. We would like to thank our customers for their generosity.

The dominance of the cash market remains unbroken in Japan. Although the share of total consumption settled by credit card in Japan continues to increase each year, to about 11% currently, cash payment is still strongly entrenched and accounts for some 60% of consumption.The credit card industry faces a structural slump with poor medium-term prospects for profits, which have been depressed by the impact of stricter regulations in the Money-Lending Business Control and Regulation Law and the Installment Sales Law. We recognize that business model reform is essential to create the additional growth required to overcome these difficult sector conditions.
Credit Saison has grown into one of the Japan's largest credit card companies with a customer base of 35.7 million people by pursuing an independent course of business expansion relatively free of capital affiliations.Collaborative alliances to leverage the size of our customer base-our greatest asset-form the core of our business strategy for fiscal 2011 and beyond, which we refer to as "Collaborative Management." This collaborative approach entails building high-quality networks across traditional industry lines to develop innovative services such as our Eikyufumetsu Points program. Besides credit card operations, we also aim to build a wide range of non-bank financial services, including leases, credit guarantee and long-term fixed-rate mortgage loans such as"Flat 35."Collaborating with strategic partners that have settlement capabilities also helps us marshal the resources of the Credit Saison Group to seize growth opportunities by making the most of the expertise that we have cultivated over many years. We see important medium-to-long-term growth opportunities through our alliance with American Express®, which is developing our credit card services portfolio by creating a status card channel; second, development of fast-growth online shopping businesses such as Eikyufumetsu.com; and, third, joint ventures with the Seven & i Group. Our goal is to become Japan's leader in cashless settlement with a 30% share of the card shopping market.

We are promoting business model reforms to employees as the Group's"rebirth."We aim to meet the expectations of stakeholders by maximizing corporate value through this new growth trajectory for Credit Saison.

Hiroshi rinno President - sign

September 2011
Hiroshi Rinno, President and CEO

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