ANNUAL REPORT 2012 for the year ended March 31, 2012

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Building the No. 1 System for Each Credit Card Function on a Consolidated Basis

In the credit card business, Credit Saison and its group companies each make full use of their strategic advantages, aiming to lead the industry in terms of ability to acquire cardmembers, increase transaction volume, and grow their market shares.

In acquiring new cardmembers, we are strengthening our capabilities in growth areas such as shopping center affiliations and communications fee settlements. In tandem, we have established a new Internet Branch as part of a full-scale effort to attract new cardmembers in the Internet market, with the objective of acquiring 3 million new cardmembers per year. Among these, we will encourage acquisition of premium cardmembers by expanding service affiliations and cardmember acquisition channels supported by customers of our high-status Saison American Express Card. This will lead in turn to higher profitability in the credit card business.

By fully commercializing our cards as products and enhancing their associated services, we will create a premium for them that will differentiate us from our competition. For instance, the PARCO and Walmart cards will offer 5% discount services at affiliated stores and eligibility for discount sales held by affiliates and alliance partners. Meanwhile, we will also introduce the Eikyufumetsu ("Never Expires") Wallet service, which allows users to pay for Internet shopping using Eikyufumetsu Points that never expire, along with other initiatives to increase the benefits and convenience of credit cards and promote greater use by cardmembers.

We have also been working to break the dominance of the cash market by building a credit card-based platform. In fiscal 2011, we launched NEO Money, a prepaid card for overseas travelers. Looking ahead, we will continue to develop a cashless settlement market by developing more new innovative products, such as a virtual prepaid card for use on the Internet and expanded service for settlements using mobile phones and smartphones.

Efforts to Develop the Internet Business as a Core Business

We have positioned the Internet business as a strategic pillar because this field promises the highest growth. We will strive to expand profits from this business while streamlining operations.

The number of Internet members reached 6.96 million as of March 31, 2012, a 25.0% year-on-year increase. This increase is attributable to efforts to promote simultaneous registration for Internet membership when customers sign up for a credit card. The number of members registered to view Web-based usage statements that enable them to easily check their usage statements at any time over the Internet grew to 3.49 million as of March 31, 2012, up 49.8% year on year.

Credit Saison operates, an online shopping mall where Internet members can receive up to 20 times the number of Eikyufumetsu Points when they use their cards to shop online. Five and a half years after opening, the website now has over 500 tenants and 50,000 participating shops and, in fiscal 2011, transaction volume grew to reach approximately ¥48.0 billion, up 30% from the previous year. We are promoting the ease with which points can be accumulated at, while at the same time taking steps to make them easier to use by inaugurating the industry's first service enabling customers to use Eikyufumetsu Points to pay for Internet shopping purchases. Through these efforts we are working to make points more attractive to users. In fiscal 2012, we aim to make points even more convenient, enable users to log in through their browser toolbar, enhance the lineup of products and services available, and increase exposure through TV commercials and other mass media to boost recognition of the website. Through these measures, we are targeting an increase in transaction volume.

We will also upgrade and enhance customer information in an effort to capture revenues from a new advertising and marketing business that utilizes our customer base.

Going forward, we will continue to build systems for generating revenues from various services on the Internet as we strengthen our initiatives in this new business field. At the same time, we will increase efficiency and profitability in this business to achieve dramatic growth as we strive to establish the Internet business as one of our core businesses. website

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