ANNUAL REPORT 2012 for the year ended March 31, 2012

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Results for Fiscal 2011

The credit industry in Japan continued to experience a severe business environment due to the effects of revisions to the Money-Lending Business Control and Regulation Law and other laws and regulations. Amid this environment, Credit Saison aspires to be a non-bank finance company with multiple revenue sources. During fiscal 2011, therefore, we built a settlement platform around our credit card business and strengthened our finance business, including the lease business, credit guarantee business, and Flat 35 long-term, fixed-rate mortgage loan business. In this way, we developed multiple core revenue sources. At the same time, we focused on expanding our fee revenues by utilizing our cardmember base, mainly our Internet members, while improving the quality of receivables and restructuring costs for greater operational efficiency. In this way, we worked to create a foundation in preparation for new growth.

In the Credit Service Segment, the customer base expanded steadily. The Group acquired 2.6 million new credit card applications, bringing the total number of cardmembers to 24.75 million. Moreover, most of the new cardmembers applied for the Saison American Express Card, which has a high usage rate, increasing the number of active cardmembers by 130,000* year on year to 12.99 million.


  (Billions of yen)
Operating revenues Operating income (loss)
2012 % change 2012 % change
Credit Service 198.8 86.1 27.1 170.0
Lease 14.6 101.5 5.0 101.2
Finance 15.7 100.9 7.7 114.5
Real estate-related 3.0 24.8 (10.1)
Entertainment 12.9 93.3 2.0 118.9
 Total 245.3 85.4 31.9 116.7
Intersegment transactions (1.3) (0.0)
Consolidated 244.0 85.4 31.8 116.4

(Year ended March 31)


  Figures in parentheses are year-on-year comparisons.
2012 % change
New applications (millions) 2.60 101.2
New cards issued (millions) 1.96 92.5
Total cardmembers (millions) 24.75
Active cardmembers (millions) 12.99
Transaction volume (¥ billion) 3,669.3 84.8
 Card shopping (¥ billion) 3,402.4 86.1
 Cash advances (¥ billion) 266.9 71.9

(Year ended March 31)

In the credit card shopping business, transaction volume grew 3.3%* year on year. The spread of smartphones has seen the use of credit cards to pay communications service fees increase. There was also an increase in use at supermarkets, where sales of daily necessities such as food products and power-saving products have expanded, and at shopping centers catering to family needs. The spread of Internet shopping also contributed to the overall transaction volume.

In cash advances, the balance of cash advances declined with the full enactment of the Money-Lending Business Control and Regulation Law, which restricts the total amount of loans per individual.

In the Lease Segment, we strengthened ties with existing customers and stepped up sales efforts to acquire new partner merchants. In the rental business, we worked to expand LED lighting sales channels in response to customers' needs.

In the Finance Segment, we expanded profits from our credit guarantee business, where we team up with financial institutions to guarantee free-loans for customers, and also from Flat 35 long-term, fixed-rate mortgage loans.

As a result, operating revenues declined by 14.6% year on year to ¥244.0 billion.

In terms of costs, the cost of uncollectable receivables decreased 53.7% from the previous fiscal year due to improved risk management. Improvements included rigorous credit risk management, such as strengthening the collection system, and a decrease in the number of new claims handled by lawyers and other proxies. Along with further progress in streamlining operations, ordinary income increased 14.3% year on year to ¥38.5 billion.

Net income declined 26.3% to ¥9.4 billion. The main factor in the decline was an extraordinary loss of ¥59.7 billion recorded for the business reorganization of Atrium Co., Ltd. On the positive side, we booked extraordinary income of ¥13.2 billion mainly for a partial reversal of the allowance for losses from a natural disaster.

* Excluding the impact of the transfer of the affinity card business with Sogo & Seibu Co., Ltd. to Seven CS Card Service Co., Ltd.

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