What is The Norinchukin Bank?

Q1. What kind of financial institution is The Norinchukin Bank?
A1.

The Norinchukin Bank is a financial institution established by Japan Agricultural Cooperatives (JA), Japan Fishery Cooperatives (JF), Japan Forestry Cooperatives (JForest) and other members of the agriculture, fishery and forestry cooperative system. As a private financial institution based on the Norinchukin Bank Law, The Norinchukin Bank plays a major role in Japanese society as a contributor to the development of the nation's economy and as a supporter of the advancement of the agricultural, fisheries and forestry industries through the provision of financial services to its members.

Q2.What kind of organization is a cooperative?
A2.

Cooperatives are organizations established under the slogan "one for all and all for one" that are based in communities and play a role in stabilizing people's lives by encouraging mutual aid between people and revitalizing communities. Their functions are performed in a wide range of fields that are concerned with people's livelihoods.
In addition to the cooperative banking business, which involves accepting deposits and making loans, we, the members of agricultural, fishery and forestry cooperatives, engage in a number of other business activities. Among these are providing "guidance" for business and day-to-day matters for farmers, fishermen, and foresters; "economic support" through sale of agricultural, fishery and forestry products as well as procurement of production materials; and "mutual insurance" services for providing mutual aid.

Q3.What is The Norinchukin Bank's role in the cooperative system?
A3.

With the stable funding base provided by capital from JA, JF, and JForest, as well as JA Bank and JF Marine Bank deposits from their individual members and customers, the Bank lends funds to members, agricultural, fishery and forestry workers, and companies related to the agricultural, fisheries and forestry industries. The Bank also conducts various lending and investment activities in Japan and abroad, efficiently manages funds and stably returns profits to its members.

Q4.What are the main services of The Norinchukin Bank?
A4.
[Initiatives toward Turning the Agricultural, Fishery and Forestry Industries into Growing Industries]
The Bank conducts initiatives to further exert its role as the central organization for agricultural, fishery and forestry cooperatives, focusing on contribution to its members and the agriculture, fishery and forestry industries as a matter of the highest priority. The Bank is implementing various financial and nonfinancial measures to achieve the practices of food and agriculture business indicated in the Medium-Term Management Plan started from fiscal 2016, which contribute to turning the agricultural, fishery and forestry industries into growing industries.
[SECURITIES INVESTMENT]
The Bank is one of the largest financial institutions in Japan and, at the same time, it is one of Japan’s leading institutional investors. Assets invested in the market by the Bank amount to approximately ¥61.0 trillion, which accounts for a major portion of the Bank’s total assets under management.
The Bank invests in securities under the basic concept of “globally diversified investment.” The goal of this approach is to achieve a high return in the mediumto long-term by investing in assets with diversified riskreturn characteristics while minimizing risks encountered each fiscal year in situations such as rising interest rates and declining stock prices. The Bank conducts a multifaceted analysis based on geographical location (Japan, the United States, Europe, and other countries and regions) and asset class (bonds, equities, credit assets and alternative investments), and then flexibly reviews its allocation of assets depending on changes in market conditions.
In pursuit of investment returns, the Bank uses external investment companies. The Bank carefully reviews the investment processes, compliance systems, management philosophy and strategies, asset management records, and other matters of external investment companies under consideration. After selection, the Bank closely monitors their performance from both quantitative and qualitative perspectives. This allows the Bank to systematically examine their performance on a continuing basis to decide whether or not to continue business relationship.

Market Assets under Management

Securities/Money Held in Trust over Time

Market Investment Portfolio

[FINANCING, etc]

Financing provided by the Bank can be broadly divided into: financing for cooperative organizations; and financing for corporations.

First, as the main bank for the agriculture, fishery and forestry industries, the Bank has created a unique cooperative financing program, aimed at providing financial support for the development of Japan’s agricultural, fisheries and forestry industries, as well as related cooperative organizations. This is accomplished by developing leaders in the agriculture, fishery and forestry industries and promoting environment-friendly agricultural practices.

Although cooperative organizations (JA, JF, JForest and related federations) are taking a leading role in these initiatives as financial contact points for leaders in the agriculture, fishery and forestry industries, the Bank is focused on providing financial support, etc., to large-scale leaders, cooperative organizations, etc. This financing for cooperative organizations, which is directly linked to the development of the agriculture, fishery and forestry industries, has been positioned as the Bank’s core business since its establishment.

Financing for corporations covers a wide range of fields, including those directly involved in the agriculture, fishery and forestry industries, such as the food industry where agricultural, fishery and forestry products are processed; the pulp and paper industries; the chemical and machinery industries that produce production materials for primary industries; and the trading, supermarket and restaurant industries that distribute primary industry products. The Bank also deals with customers in other fields, including the leasing, credit, IT, telecommunications, real estate and service industries.

Furthermore, for customers entering overseas market and requiring funding for M&A, the Bank actively responds to them using its foreign currency funding ability through cooperation among its overseas branches located in New York, London and Singapore and branches in Japan.

Additionally, besides its financial service, the Bank offers business matching services for primary, secondary and tertiary industries to act as a “bridge” linking their needs. In addition, there are various nonfinancial initiatives by making use of “Support Program for Increasing Agricultural Income and Revitalizing Local Communities,”such as support for capturing share in the global food market, support for value-adding projects which encourage streamlining including, support for improving efficiency (e.g. expansion of business of leaders) and others.

[DEPOSIT SERVICES]

Features of the Bank’s Deposits

Deposits from member cooperatives comprise the majority of the Bank’s deposits. Other deposits consist primarily of those from companies involved in the agriculture, fishery and forestry industries and nonprofit organizations, such as local public bodies. This is due to the Bank’s role as the national-level cooperative financial institution for the agriculture, fishery and forestry industries.

Deposits from JA Bank and JF Marine Bank Members

Savings deposited with JA and JF by their individual members and local customers are used to finance individual members, local customers, companies, local public bodies and other such organizations. Surplus funds are then deposited with JA Shinnoren (Prefectural Banking Federations of Agricultural Cooperatives) or JF Shingyoren (Prefectural Banking Federations of Fishery Cooperatives) at the prefectural level. These funds, in turn, are used by JA Shinnoren or JF Shingyoren to finance agricultural and fisheries organizations, companies involved in the agricultural and fisheries industries, local public bodies and other such organizations. Surplus funds are then deposited with the Bank.

In its capacity as the national-level cooperative banking institution in the cooperative banking system, the Bank is responsible for centrally managing funds steadily deposited in this manner.

To enable individual members and local customers to deposit their valued savings with a sense of security, JA, JF, JA Shinnoren, JF Shingyoren and the Bank are protected under the Agricultural and Fishery Cooperative Savings Insurance System, a public system that insures deposits.

[NORINCHUKIN BANK DEBENTURES]

In accordance with the Norinchukin Bank Law, the Bank is authorized to issue Norinchukin Bank Debentures as a source of funding. The Bank regularly issues two types of debentures: the Ritsuki Norinsai, primarily issued to institutional investors as a five-year investment product, and the Zaikeisai, issued as a savings product.

The balance of issued and outstanding debentures as of March 31, 2016 totaled ¥3,133.0 billion. The funds raised through the issuance of Norinchukin Bank Debentures have been used for purposes that include financing for the agriculture, fishery and forestry industries as well as for companies related to these industries.

[SETTLEMENT SERVICES]

Cooperative financial institutions, comprising JA, JA Shinnoren, JF, JF Shingyoren and the Bank, have one of the largest networks among private financial institutions in Japan, with approximately 8,200 branches (as of March 31, 2016). At the heart of this network is the Cooperative Settlement Data Transmission System, which is operated jointly by the cooperative financial institutions.

Domestic Exchange Business Leveraging Special Characteristics of Cooperatives

As the national-level financial institution for Japan’s agricultural, fishery and forestry cooperatives, the Bank has focused on expanding and upgrading settlement services for all relevant cooperatives. Domestic exchange business plays an important role in the settlement of proceeds from the sale of agricultural, fishery and forestry products that connect points of consumption and production. Leveraging the special characteristics of the cooperatives with their extensive nationwide network, the Bank conducts domestic exchange transactions with banks that are members of the national bank domestic exchange system through the Interbank Online Data Telecommunication System in Japan (Zengin System).

Cash Dispenser and ATM Network

Through the JA Online Savings Service and the JF Online Savings Service, cooperative banking institutions are developing a nationwide network of ATM machines and cash dispensers. In addition, as a member of the Multi-Integrated Cash Service (MICS) network, a crosssector online alliance service of cash dispenser and ATM operators, the cooperative banking institutions are part of an alliance of seven private sector banks (city banks, regional banks, trust banks, second-tier regional banks, shinkin banks, credit associations and labor banks). This enables savings withdrawals and balance inquiries at cash dispensers and ATMs, not only at the cooperative banking institutions, but also at most other financial institutions throughout Japan. Cooperative institutions have expanded their ATM networks through affiliation with Japan Post Bank and convenience store ATMs, and they now leads in the number of ATMs usable for free during the day on weekdays, including affiliated ATMs.

Direct Deposit and Fund Transfer Services

Massive volumes of various data related, for instance, to direct deposit of salary and pension and direct transfer of utility payments are swiftly processed in cooperation with the Cooperative Data Transmission System and unified IT infrastructure platforms for JA and JF. By connecting to the Zengin System, the Bank receives data on the direct deposits of salary and other information from other financial institutions.

Networks with Customers in Japan and Overseas

The Bank has formed a network for customer transactions placing the Cooperative Data Transmission System and the Norinchukin Online Banking System at its core. It also offers a diversified range of sophisticated services, such as remittance services through the “firm banking” system for cooperative banking customers, and uses the Society for Worldwide Interbank Financial Telecommunication (SWIFT) settlement system for transactions between the Bank’s head office or overseas branches and overseas financial institutions.

Q5.What is the relationship between The Norinchukin Bank and JA Bank and JF Marine Bank?
A5.

JA Bank is the name of a group that essentially functions as a financial institution and consists of JA, JA Shinnoren, and The Norinchukin Bank, which are all JA Bank members. For details, please see The Norinchukin Bank annual report or visit the JA Bank website.

JF Marine Bank is the name of a nationwide financial group consisting of JF Marine Bank members (JF that engage in the cooperative banking business including deposits and loans, JF Shingyoren, The Norinchukin Bank, and JF Zengyoren).
For details, please see The Norinchukin Bank annual report or visit the JF Marine Bank website.

Q6.Can individuals conduct business with the Bank?
A6.

At present, Norinchukin Bank debentures cannot be issued to and new investment trust accounts cannot be opened by individual customers. Please see the JA Bank and JF Marine Bank websites regarding individual customer transactions.

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