Shinsei IR Day

Shinsei IR DayInstitutional Business

February 2021

Institutional Investor BusinessExecutive Summary

1

Capture institutional investors’ demand for investment to seek new growth

Develop structured finance

Sustainability focus

Promote the joint investment business with institutional investors

Ⅰ

Ⅲ

Ⅱ

Investment demandof institutional investors

Our advantages(Growth fields)

Project finance for infrastructuresrenewable energy, etc.

Real estate finance

Healthcare finance

Ship and Aviationfinance

Structuredfinance

Distribution to institutional investors

Syndication

Funds

ABL

Project bonds

Distribution to institutional investors

Diversification

Real asset-type alternatives

Social, EnvironmentalInfrastructures

Environmentalreal estate

Assets that solve social issues

Environment-friendlyships/aircraft

SustainabilityESG/SDGs

Affinities

Promote sustainable finance

Infrastructures

Real estates

Healthcare assets

Ships and Aircraft

Deepen structured finance, one of our strengths


Agenda

1. Progress of the Institutional Investor Business

2. Progress of the Three Business StrategiesⅠ. Develop Structured Finance

Ⅱ. Promote the Joint Investment Business with Institutional Investors

Ⅲ. Focus on Sustainability

3. Key Takeaways

Ⅲ

Expand revenue opportunitiesby creating new growth opportunities

Realize large deal sourcing by promoting asset turnover


Institutional Investor BusinessDirection of the Medium-Term Management Strategy and the Institutional Investor Business

3

Develop new structures and asset classes

Promote the joint investment business

with institutionalinvestors

Ⅱ

Ⅰ

Develop structured

finance

Increase investors’ appetite by developing finance having ESG/sustainability factors

Originate new type of deals backed by institutional investors’ funds


3 strategies

For the InstitutionalInvestor Business

Institutional Investor BusinessGroup Structure Promoting the Institutional Investor Business

4

Sustainable finance origination for corporations

Planning, promotion and assessment of Sustainable finance

Syndicated loan distribution

Investment strategy proposal basedon discretionary investment contracts

Bond distribution

Trust entrustmentABL origination, etc.

Impact investment, ESG venture investment, etc.

Lease-type structured finance

Domestic/overseas project finance(renewable energy, etc.)

Domestic/overseas real estatenon-resource financeDomestic/overseas ship/aviation/LBO finance

Healthcare finance(Hospitals/clinics, elderly care facilities, etc.)

Domestic/overseas REIT finance



Promote the joint investmentbusiness with

institutional investors

Group Institutional B

usiness Planning Division

Healthcare Finance Division

Real Estate Business Division

Corporate Banking Business Divisions(CBBDI – III and Branches)

Sustainable Impact Assessment Department

Project Finance Division

Real Estate Finance Division

Specialty Finance Division

Sustainable Impact Development Division

Syndicated Finance Division

Shinsei Securities Co., Ltd.

Shinsei Investment Management Co., Ltd.

Shinsei Trust and Banking Co., Ltd.

New Business Promotion & Support DepartmentShinsei Corporate Investment Limited

Showa Leasing Co., Ltd.

Promotesustainable

finance


Promote the joint investment business with institutional investors Traditional syndication progressed steadily

even in the COVID-19 pandemic. In addition, proactively developed transactions with new features

Established the first infrastructure mezzanine fund and project bond in Japan

Established in February 2020 the Sustainable Impact Development Division, a section dedicated to sustainable finance

Developed ESG loan transactions and many transactions in the pipeline since the full launch of the Division

Focused on transactions targeting new asset classes such as offshore wind power and healthcare finance

Achieved sustainable growth in structured finance, one of our strengths


Institutional Investor BusinessSummary of the Progress (FY2019 – December 2020)

5

ActualArrangement 53 ; JPY349.2B

Pipeline 18; JPY180.6 B

ActualArrangement 7 ; JPY23B

Pipeline 11; JPY98.7B

ActualDistribution 28 ; JPY136.2 B

Pipeline 12; JPY87.9 B

Ⅰ

Ⅱ

Ⅲ

※ Only transactions that have new features

※ Only transactions that have conducted Shinsei Sustainable Impact Assessment

※ Only transactions that have new features

※All the figures in this material are based on internal data

Agenda

6




Ⅲ. Sustainability Focus

3. Key Takeaways

Wind Power Biomass PowerThermal Power Litsted infrastructure funds

JPY33

JPY92B

FY18 FY20(～Q3)

Institutional Investor BusinessProgress of the Three Business Strategies: Develop Structured Finance

7

With “clean energy” and “digitalization” as two core wheels, proactively handling new asset types while promoting ESG investments that will contribute to solving social problems through the development of social infrastructure

New assets such as wind power, listed infrastructure funds and geothermal power

Mezzanine finance

Social infrastructure such as offshore wind power and road construction

Enhanced sourcing of digital infrastructureOptical fiber, data centers and smart meter, etc.

New transactions:14; JPY131.2B

Pipeline: 7; JPY100.7B

Ⅲ

Ⅰ

ⅡProject finance

Solar

Biomass and gas thermal power

Gas pipeline

Biomass and offshore transmission cable

Domestic Overseas

JPY44B

Domestic projects by attribute(excluding solar power projects)

Domestic project finance: Origination amount

Accumulated origination amountFor listed

investment fundsWind power

JPY58.9B

upup 03/2019JPY101.8B

12/2020JPY218.5B

Wind powerJPY82B

New transactions:7; JPY32.3B


- FY2018

Medium-Term Strategies(FY2019 - FY2021)

FY2018

FT2019

FY2020

FY2021

※Accumulated origination amount

Accumulated origination amount from 2012

Ranked 5th in APAC Renewable Energy Project Finance League Table FY2020APAC renewable energy project finance volume by MLA(Project Finance Rankings 2020, Dealogic)

JPY38B

JPY82B

0

50

100

FY18 FY20（～3Q）

（JPY1B）

0

40

80

120

160

FY15 FY16 FY17 FY18 FY19 FY20（～3Q）

（JPY1B)

0

25

50

75

100

FY17-18 FY19-20（～3Q）

（JPY1B）

- FY2018

Medium-TermStrategies(FY2019 - FY2021)

FY2018

FY2019

FY2020

FY2021


8

Continue to Promote the asset turnover business through syndication and so on, while continue to promote transactions with major domestic real estate developers, domestic funds, global investment funds and asset managers, etc. considering risk and return

Real estate finance

Origination of High-spec logistic facilities, data centers and student dormitories, etc.

Expansion of green real estate

Diversification of the investor base

Commercial properties(Offices, hotels, retail facilities and logistic facilities)

Residential properties

Ⅲ

Ⅰ

Ⅱ

Topic 1Example of a finance for large high-spec logistic facilities As e-commerce expands, the demand for large high-spec logistics facilities is increasing as a

solution for eliminating bottlenecks in supply chains. Many logistics facilities obtain an environmentreal estate certification when they are developed, and the subject property has also obtained “A”from CASBEE, the Comprehensive Assessment System for Built Environment Efficiency. Withstrong investor interest, the finance was partially distributed to investors.

Through collaboration with sponsors and institutional investors, will expand financing this asset typethat will contribute to solving social problems.

Transactions targeting new asset types whose market began to expand

Non-recourse loans for freezer and refrigerator warehouses Non-recourse loans for student apartments (dormitories) Non-recourse loans for trunk roomsWill continue to promote transactions targeting new asset types whose market began to expand

New transactions: 19; JPY133.9B

Pipeline: 4;JPY40.8B

Topic 2

Growth of disbursement amount for high-spec logistic facilities

JPY45.5B

JPY81.3B

0

10

20

30

40

FY18 FY20（3Q）Scrubber(retrofit)Scrubber fitted shipsdual-fuel ships

（JPY1B）


9

Supports transition of the shipping industry for a sustainable future through financing shipowners/operators using environmental-friendly ships such as scrubber-fitted ships and dual-fuel ships and promoting lower carbon footprints

Finance for scrubber devices complying with Sox emission regulations

Finance for dual-fuel ships

Finance for next-generation environmental-friendly ships

Ship finance

Finance for domestic/overseas operators

Finance for domestic/overseas shipowners

Ⅲ

Ⅰ

Ⅱ

Topic 1

Originated a syndicated loan with a multi currency option for a major shipownerBuilt a scheme and a structure considering customer needs, the foreign currency funding of participating institutional investors and cumbersome paperwork. Will continue to capture similar needs in the shipping industry


Pipeline: 1;JPY4.1B

Balance of the loans for environment-friendly assets

JPY4.3B

JPY35.3B

- FY2018


FY2018

FY2019

FY2020

FY2021

Topic 2

Expanding support to environmental responses in the shipping industry

Aiming to sign the Poseidon Principles by the end of 2021 to make financial contribution to the shipping industry’s actions for climate change risk

Support the transition of the shipping industry for a sustainable future through financing shipowners and operators using environmental-friendly ships such as next-generation fuel ships (i.e., sailing ships, hydrogen fueled ships and ammonium fueled ships) and promoting lower carbon footprints

※ Initiatives for moving green in the future from the perspective of promoting lower carbon footprints

0

20

40

60

80

FY18 FY20（～3Q）

（JPY1B）

- FY2018


FY2018

FY2019

FY2020

FY2021


10

Proactively financing businesses addressing and reducing specific social challenges,businesses bringing social impact

Finance for licensed nursery schools/facilities

Finance for geriatric health services facilities and the first transaction targeting an integrated facility for medical and long-term care

Proactively developed social loans

Healthcare finance

Facilities for the elderly (paid nursing homes with care services and assisted living residences for elderly people)

Hospitals, clinics and other medical facilities

Ⅲ

Ⅰ

Ⅱ

Topic

Full-scale development of social loans

1August 2020

Shinsei Social Loan No.1: Originated a non-recourse loan targeting a geriatric health services facility

2 Shinsei Social Loan No.2: Originated a non-recourse finance targeting an assisted living residence for elderly people

3 October 2020 Shinsei Social Loan No.3: Originated the first non-recourse loan targeting a nursing care complex including an integratedfacility for medical and long-term care



Healthcare finance: Growth of non-recourse loan balance

※including loans for REIT

JPY49.4B

JPY65B

Agenda





3. Key Takeaways

Structured finance:Distribution

※ Including traditional syndications

Institutional Investor BusinessProgress of the Three Business Strategies: Promote the Joint Investment Business with Institutional Investors

12

Continue to promote traditional syndications by expanding target assets/customersIn addition, diversify distribution methods such as project bonds, ABL and funds

Distribution of structured finance having new features and sustainable finance

Launch of infrastructure/mezzanine funds

Origination and sales in the form of project bonds (Shinsei Securities)

Distribution in the form of syndicated loans

Ⅲ

Ⅰ

Ⅱ

Topic 1

Promotion of the joint mezzanine fund origination business with Daiwa Energy & Infrastructure

Built together with Daiwa Energy & Infrastructure a framework for providing mezzanine finance in project finance for renewable energy power plants (Launched on October 28, 2020)

This is an initiative to jointly accumulate mezzanine finance under a joint investment scheme including money trust targeting JPY40B and to establish funds incorporating these monetary claims and stakes.



JPY273.4B81 companies

JPY361.5B125 companies

Project bond initiatives

Originate project bonds for multiple projects targeting completed high pressure solar power plants after obtaining an external rating. Create beneficiary rights for part of senior loans through money trust which will be underwritten and sold by Shinsei Securities

Expand approaches to not only loan-oriented investors but also marketable securities-oriented investors

- FY2018

Medium-Term Strategies(FY2019 - FY2021)

FY2018

FY2019

FY2020

FY2021

Topic 2

0

100

200

300

400

500

FY17-18 FY19-20（3Q）Project Finance Real Estate FinanceShip Finance

（JPY1B）

Agenda





3. Key Takeaways

- FY2018

Medium-term Strategies(FY2019 – FY2021)

FY2018

FY2019

FY2020

FY2021

Institutional Investor BusinessProgress of the Three Business Strategies: Sustainability Focus

14

Established the Sustainable Impact Development Division, a dedicated division for Sustainable finance Promoting division-wide and group-wide Sustainable finance

Started to add a sustainability perspective to all transactions to be consistentwith the market standard (Sustainability focus)

– Started to adopt and comply with the Equator Principles

– Built Shinsei Green, Social and Sustainability Finance frameworks

– Started to promote, in full scale, Sustainable finance with Shinsei Sustainable Impact Assessment

– Commercialized Sustainable Impact Capital Loans

Divisions/branches handled Sustainable finance individually

Ⅲ

Ⅰ

Ⅱ

TopicEnhancement/upgrading of sustainability management promotion structures

Sustainability Planning Department

Group InstitutionalBusiness Planning Division

Group IndividualBusiness Planning Division


Sustainability Promotion Department

Sustainable Impact Development

Division

Group Corporate Planning Division

Established in January 2021

Enhance/upgrade sustainability management promotion structures

In addition to the establishment of the Sustainable Impact Development Division in February 2020, Group Sustainability Committee, as one of the Group’s core committees, the Sustainability Planning Department in the Group Corporate Planning Division and the Sustainability Promotion Department in the Group Individual Business Planning Division was newly established as of January 1, 2021 to enhance and upgrade sustainability management promotion structures and to promote Group-wide sustainability management.


Sustainable Impact Development Division


15

Frameworks and logos of Sustainable finance Our sustainable impact initiatives have prepared a framework for supporting

borrowers’ sustainability initiatives based on the criteria we created and centered on “agreement and engagement” with the borrowers in addition to frameworks focusing on the consistency with the Principles such as Shinsei Green/Social/Sustainability Finance Framework which limits the use of proceeds to businesses contributing to the improvement of environmental/social problems.

The Sustainable Impact Assessment Department checks the conformity with the frameworks

Six logos have been established depending on the purpose of funds assessment criteria

Ⅲ

Ⅰ

Ⅱ

Compliance with the Principles Agreement and Engagement

Shinsei product

Shinsei Green Finance Shinsei Social Finance Shinsei Sustainability Finance

Shinsei Sustainability-Linked Loan Sustainable Impact Capital Loan

Outline

Loans for environment and climate change related projects

Loans for projects that will have social impacts

Loans for projects whose purposes of funds include both green and social aspects

Loans with interest changing in conjunction with the sustainability performance targets set in advance, aiming to support the borrower’s achievement of sustainability goals

Support sustainability initiatives throughengagement with the borrower as well assupporting preventive capital funding of thesubject company for its business continuity

Key reference principles

The Green Bond Principles（ICMA）

The Social Bond Principles（ICMA）

The Sustainability Bond Guidelines（ICMA）

Sustainability Linked Loan Principles（LMA、APLMA、

LSTA）ー

Green Social Overall sustainability

Focus on the consistency with principles such as the Green Bond Principles and the Social Bond Principles

Assess Sustainable finance based on the criteria created by Shinsei, centered on “agreement and engagement”


16

ⅢⅠ

ⅡTrack record of Shinsei sustainable impact finance

Sustainable Impact Capital Loan

Shinsei Green Loan

No.1 August 20, 2020 Construction of a wind farm

No.2 November 5, 2020 Construction of a solar power plant

No.3 November 26, 2020 Construction of a wood biomass gas power plant

No.4 December 1, 2020 Infrastructure investment corporation acquiring a solar power plant

Launched Sustainable Impact Capital Loan(November 25, 2020)Started offering Sustainable Impact Capital Loan which incorporates ESG elements in capital loans. Supports sustainability initiatives of subject companies as well as supporting their preventive capital funding for their business continuity even in the COVID-19 crisis by providing long-term capital products by discussing ESG/SDGs initiatives with target companies

Shinsei Social Loan

No.1August 18, 2020

Geriatric health services facility

No.2 Assisted living residence

No.3 October 1, 2020 The first loan targeting a nursing care complex including a nursing care clinic

JPY294.8B

JPY401.0B

March 31, 2019

December 31, 2020

Growth of ESG assets※

※define the above items as ESG assets

※Dates are announcement dates to the outside

Renewable Energy Shinsei Green LoanHealthcare Shinsei Social LoanGreen Real Estate

Agenda





3. Key Takeaways

Key Takeaways

18

ⅠThe three business strategies are progressing steadily. We will continue to create opportunities for further growth.

ⅡWe will connect the loan assets diversified through developing of structured finance with the Institutional Investor Business and will accelerate this trend.

ⅢWe will seek further development of the three business strategies by adding sustainable finance to these frameworks.

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 withrespect to future events that are subject to risks, uncertainties and assumptions. Should one or more ofthese risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actualresults may vary materially from those we currently anticipate. Potential risks include those described inour annual securities report filed with the Kanto Local Finance Bureau, and you are cautioned not toplace undue reliance 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 thefinancials are 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 contractor commitment whatsoever.

Disclaimer

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