[Provisional Translation]
Financial Services Agency
August 1, 2003

The Status of Non Performing Loans as of end-March 2003

1. Non Performing Loans (NPLs) based on the Financial Reconstruction Law (FRL)

The total amount of NPLs of all banks based on the definition of the FRL as of end-March 2003 is 35.3 trillion yen. The figure decreased by 7.9 trillion yen from 43.2 trillion yen as of end-March 2002.

In spite of the weakened business activities in the stagnant economy, the total amount of loans classified as ''doubtful'' and ''bankrupt/de facto bankrupt'' decreased by 8.0 trillion yen, as a result of aggressive efforts of banks to remove these loan assets from their balance sheets (15.1 trillion yen). The amount of loan assets removed exceeded that of newly accumulated non-performing loan assets.

The total amount of loans classified as ''special attention,'' which have relatively lower risk levels, increased by 0.1 trillion yen. While the degree of increase of loan assets in the category resulting from banks' application of stricter classification of NPLs was significantly smaller than previous years, the increase of 0.1 trillion yen reflects the facts that there was a new accumulation of loans of this category due to the weakened business activities in the stagnant economy and that there was an increase of upward migration of loans that belonged to ''doubtful'' or lower categories in the previous period. The increase of upward migration reflects progress in restructuring of the NPLs that facilitated the rehabilitation of the business of borrowers.

[Table] Breakdown of the factors of changes in NPLs based on the FRL as of end-March 2003

2. Specific Provision for Loan Losses

The total amount of specific provision for loan losses as of end-March 2003 stands 6.1 trillion yen, a decrease by 1.8 trillion yen from 7.9 trillion yen as of end-March 2002. This reflects a decrease of the loans of ''doubtful'' and ''bankrupt/de facto bankrupt,'' for which specific provisions are required. The decrease of these loan assets was due mainly to aggressive efforts of banks to remove these loan assets from their balance sheets.

3. Total Loss Amount from the Disposals of NPLs

The total loss amount from the disposals of NPLs in 2003 was 6.7 trillion yen, a decrease of 3.1 trillion yen from the previous year, 9.7 trillion yen.

Table-1	The Status of Non-Performing Loans held by all banks (as of end-March 2003) (PDF format)
Table-2	The Status of Non-Performing Loans (NPLs) of All Banks based on the Financial Reconstruction Law (as of end-March 2003) (PDF format)
Table-3	Transition of Non-Performing Loans (NPLs) based on the Financial Reconstruction Law (PDF format)
Table-4	Total Losses on Disposal of Non-Performing Loans of All Banks (PDF format)
(Reference)	The Status of Risk Management Loans of All Banks (as of end-March 2003) (PDF format)