Japan Finance 18-K Annual report (foreign governments)

Exhibit 1

Japan Bank for International

Cooperation

This description of Japan Bank for International Cooperation is dated September 29, 2005 and appears as Exhibit 1 to its Annual Report on Form 18-K to the U.S. Securities and Exchange Commission.

THE DELIVERY OF THIS DOCUMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS DOCUMENT (OTHERWISE THAN AS PART OF A PROSPECTUS CONTAINED IN A REGISTRATION STATEMENT FILED UNDER THE U.S. SECURITIES ACT OF 1933) DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF JAPAN BANK FOR INTERNATIONAL COOPERATION.

TABLE OF CONTENTS

	Page
FURTHER INFORMATION	2
JAPAN BANK FOR INTERNATIONAL COOPERATION	3
CAPITALIZATION	4
STATEMENTS OF EARNINGS	6
BUSINESS	7
The Bank’s Missions	7
The Bank’s Predecessors	7
Government Control and Supervision	7
Recent Developments Regarding Special Public Institutions	8
Annual Operations results for FY 2004	10
International Financial Operations	11
Overseas Economic Cooperation Operations	17
Capital of the Bank	21
Non-performing Loans	22
Risk Management	25
MANAGEMENT	27
DEBT RECORD	28
FINANCIAL STATEMENTS OF JAPAN BANK FOR INTERNATIONAL COOPERATION AND AUDITORS	28

FURTHER INFORMATION

This document appears as an exhibit to the Annual Report of Japan Bank for International Cooperation filed with the U.S. Securities and Exchange Commission (the “Commission”) on Form 18-K. Additional information with respect to Japan Bank for International Cooperation is available in such Annual Report, in the other exhibits to such Annual Report and in amendments thereto. Such Annual Report, exhibits and amendments may be inspected and copied at the public reference room maintained by the Commission at: 100F Street, N.E., Washington, D.C. 20549. Information regarding the operations of the public reference room can be obtained by calling the Commission at 1-800-SEC-0330 or, without charge, from Japan Bank for International Cooperation by telephoning 813-5218-3304. The Annual Report and its exhibits and amendments are also available through the Commission’s Internet website at http://www.sec.gov.

In this document all amounts are expressed in Japanese Yen (“¥” or “yen”), except as otherwise specified. The spot buying rate quoted on the Tokyo Foreign Exchange Market on September 26, 2005 as reported by the Bank of Japan at 5:00 p.m., Tokyo time, was ¥112.52 =$1.00, and the noon buying rate on September 26, 2005 for cable transfers in New York City payable in yen, as reported by the Federal Reserve Bank of New York, was ¥112.28 = $1.00.

References to fiscal years of Japan Bank for International Cooperation are to the 12-month periods beginning on April 1 of the year indicated. Japan Bank for International Cooperation was established on October 1, 1999, and its initial fiscal period was the six months ended March 31, 2000.

Figures in tables may not add up to totals due to rounding.

2

JAPAN BANK FOR INTERNATIONAL COOPERATION

Japan Bank for International Cooperation (the “Bank”) was established on October 1, 1999 as a governmental financial institution. The Bank’s name and basic mandate are provided by the Japan Bank for International Cooperation Law (the “JBIC Law”). The Bank is the result of a merger between The Export-Import Bank of Japan (“JEXIM”) and the Overseas Economic Cooperation Fund, Japan (“OECF”) . The Bank’s purpose, as set forth in Article 1 of the JBIC Law, is to contribute to the sound development of Japan and the international economy and society, by promoting Japan’s exports and imports and overseas economic activities, contributing to the stability of the international financial order, and contributing to the economic and social development and economic stability of developing regions overseas. The Bank carries out the following operations formerly conducted by JEXIM and OECF:

• “International financial operations” (succeeded from JEXIM) — contributing to the promotion of Japanese exports and imports as well as Japanese economic activities overseas, and to the stability of international financial order; and

• “Overseas economic cooperation operations” (succeeded from OECF) — supporting self-reliant development efforts in developing countries.

3

CAPITALIZATION

Reflecting the different objectives of the international financial operations and the overseas economic cooperation operations, the JBIC Law provides that the Bank maintain two separate accounts for the respective operations (i.e., the international financial account and the overseas economic cooperation account). The capital of each account is segregated, and the reserves of each account can be appropriated only for losses in that account.

In respect of the international financial account, under the JBIC Law, the Bank is authorized to borrow up to an amount equal to 10 times the total of the capital and statutory reserve funds of the international financial account. As of March 31, 2005, total borrowings were ¥7,094 billion, representing 42.7% of the Bank’s borrowing authority on that date.

In respect of the overseas economic cooperation account, under the JBIC Law, the Bank is authorized to borrow up to an amount equal to three times the total of the capital and statutory reserve funds of the overseas economic cooperation account. As of March 31, 2005, total borrowings were ¥4,225 billion, representing 20.2% of the Bank’s borrowing authority on that date.

The capitalization of the Bank, its international financial account and its overseas economic cooperation account as of March 31, 2005 was as follows:

Capitalization - The Bank

	(millions of yen)
Long-term borrowings from the Government	¥	9,559,735
Bonds and notes		1,759,488
Total long-term borrowings(1)		11,319,223
Capital and reserves:
Capital of the account for international financial operations		985,500
Capital of the account for overseas economic cooperation operations		6,891,244
Reserve of the account for international financial operations		676,258
Reserve of the account for overseas economic cooperation operations		85,491
Total capital and reserves		8,638,493
Total capitalization	¥	19,957,717

⁽¹⁾ Includes current maturities.

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Capitalization - International Financial Account

	(millions of yen)
Long-term borrowings from the Government	¥	5,359,276
Bonds and notes		1,734,488
Total long-term borrowings(1)		7,643,336
Capital and reserve:
Capital		985,500
Reserve		638,582
Total capital and reserve		1,661,758
Total capitalization	¥	8,755,523

⁽¹⁾ Includes current maturities.

Capitalization - Overseas Economic Cooperation Account

	(millions of yen)
Long-term borrowings from the Government	¥	4,200,459
Bonds and notes		25,000
Total long-term borrowings(1)		4,225,459
Capital and reserve:
Capital		6,891,244
Reserve		85,491
Total capital and reserve		6,976,735
Total capitalization	¥	11,202,194

⁽¹⁾ Includes current maturities.

5

STATEMENTS OF EARNINGS

The statements of earnings of the Bank and its international financial and overseas economic cooperation accounts are set forth on pages 33, 36 and 39.

6

BUSINESS

The Bank’s Missions

The JBIC Law provides two distinct missions of the Bank, which correspond to the respective operations that the Bank assumed from its predecessor entities, the Export-Import Bank of Japan, or JEXIM, and the Overseas Economic Cooperation Fund, or OECF: (1) to provide Japanese corporations with export loans, import loans, overseas investment loans, untied loans, guarantees and equity participation in overseas projects (“international financial operations”); and (2) to provide financial assistance including Japanese official development assistance (“ODA”) loans with the basic tenet of providing concessionary long-term, low-interest funds needed for the self-help efforts of developing countries, including their economic and social infrastructure development and stabilization of their economies (“overseas economic cooperation operations”).

The Bank’s Predecessors

Pursuant to the JBIC Law, JEXIM and OECF were dissolved upon the establishment of JBIC on October 1, 1999. Also pursuant to the JBIC Law, all of the rights and obligations of JEXIM and OECF were assigned to and assumed by JBIC.

The Export-Import Bank of Japan

JEXIM was established in 1950 as a governmental financial institution. Its name and basic mandate were set by the Export-Import Bank of Japan Law in 1952. JEXIM’s purpose was to facilitate Japan’s economic interchange with foreign countries by providing a wide range of financial facilities to supplement and encourage financing by commercial banks and other financial institutions in Japan. Its activities were mainly the following: supporting the Japanese companies’ activities such as the export of ships, plants and equipment, the development and import into Japan of natural resources, the import of manufactured goods, overseas investment and extending untied direct loans to developing countries.

The Overseas Economic Cooperation Fund, Japan

OECF was established in 1961 as a governmental organization. OECF’s purpose was to promote Japan’s overseas economic cooperation by providing concessionary funds for industrial development and economic stability of developing countries. OECF traditionally provided developing countries with assistance for economic and social infrastructure development, environmental conservation and human resources development. Also, as one of the primary organizations implementing support policies, OECF (and later the Bank) in recent years placed special emphasis on avoidance of balance-of-payments crises, creation of employment, economic recovery and alleviation of poverty.

Government Control and Supervision

The Bank’s capital is wholly owned by the Japanese Government, and the Bank is under Japanese Government control and supervision in conducting its operations.

The Minister of Finance and the Minister of Foreign Affairs have supervisory power over the Bank. The Governor and Auditors of the Bank are appointed by the Minister of Finance.

The Minister of Finance draws up a budget for the government fiscal investment and loan program (“zaito”) each year that determines the allocation of funds to institutions like the Bank which implement government policy. The Bank’s budget of revenues and expenditures is included in the Government Agencies Budget for that fiscal year and need to be passed through the Diet. The Government may, within the limits of the budget, provide additional equity and may grant to the Bank an amount corresponding to a part of the expenses required for the overseas economic cooperation operations. The Bank’s accounts are audited by the Bank’s Auditor and are submitted to the Diet after examination by the Board of Audit, an independent government body.

Until the year ended March 31, 2001, the Bank’s lending operations were financed in part by funds from the program of the Japanese Government and issuances of the Bank’s bonds in the international market explicitly guaranteed by the Japanese Government. Effective April 1, 2001, the zaito program was changed from a system in which funds provided to the Bank and other relevant agencies were derived from the Government Trust Fund Bureau and Postal Life Insurance Accounts to a system in which these agencies, including the Bank, also seek to raise funds in the capital markets rather than relying on the zaito funds.

In light of this change in the zaito program, the Bank intends to diversify its fund raising sources by issuing bonds without a guarantee from the Japanese Government in the Japanese domestic market, continuing to seek borrowings from the Japanese Government, and issuing bonds guaranteed by the Japanese Government in the international market. In the fiscal year ending March 31, 2006, the Bank currently plans to issue (1) up to an equivalent of $2.5 billion in aggregate principal amount of bonds guaranteed by the Japanese Government in international markets and (2) up to ¥260 billion in aggregate principal amount of bonds without a guarantee from the Japanese Government in the Japanese market.

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International Financial Operations

As a governmental institution, the Bank conducts its international financial operations to materialize the Japanese Government’s basic external economic policies. The Bank has taken over JEXIM’s basic responsibilities with respect to its international financial operations: (1) Export Loans, (2) Import Loans, (3) Overseas Investment Loans, (4) Untied Loans, and (5) Guarantees, etc.

The Minister of Finance has supervisory powers with regard to the Bank’s international financial operations and may require it to make reports as to its operations or examine its books and records whenever the Minister deems it necessary. On the basis of any such report or examination, the Minister of Finance may issue such orders to the Bank concerning its business as the Minister deems necessary for the enforcement of the JBIC Law.

Overseas Economic Cooperation Operations

The Bank’s overseas economic cooperation operations provide Japan’s ODA loans and private-sector investment finance. The Bank’s overseas economic cooperation operations are the cornerstone of Japan’s ODA. The Bank’s policy for executing its overseas economic cooperation operations is based on Japanese government policy, and on the Medium-Term Strategy for Overseas Economic Operations, and is made public after the approval of the Minister of Foreign Affairs. As set forth in the Bank’s Medium-Term Strategy for Overseas Economic Operations for the three-year period from April 1, 2005 through March 31, 2008, ODA loan operations will place priority on the following four areas (1) Poverty Reduction, (2) Foundation for Sustained Growth, (3) Global Issues and Peace-Building and (4) Human Resource Development.

The Minister of Foreign Affairs has supervisory powers with regard to the Bank’s overseas economic cooperation operations and may require the Bank to make reports as to its operations or examine its books and records whenever the Minister deems it necessary. On the basis of any such report or examination, the Minister of Foreign Affairs may issue such orders to the Bank concerning its business as the Minister deems necessary for the enforcement of the JBIC Law.

Recent Developments Regarding Special Public Institutions

Recently the Japanese government has discussed reforming governmental financial institutions and other government-affiliated institutions, which are collectively referred to as special public institutions, including the Bank. The “Public Sector Reform Program Outline” adopted by a cabinet meeting on December 1, 2000, requires that the businesses and organizational forms of all special public institutions undergo a thorough review in light of the recent changes in Japan’s social and economic conditions. Based upon that review, the reorganization and rationalization plan for special public institutions was formulated in fiscal year 2001. Furthermore, the outline calls for the adoption of any necessary measures, including enactment of new laws, by the end of fiscal year 2005 in order to implement the reorganization and rationalization plan. To promote reform of special public institutions, the Basic Law Concerning Reform of Special Public Institutions, which provides for, among other matters, formulation of the reorganization and rationalization plan for special public institutions and establishment of a Special Public Institutions Reform Promotion Headquarters, was promulgated in June 2001.

In order to implement “Public Sector Reform Program Outline” issued in December 2000, the Cabinet Headquarters for Administrative Reform, which was established in January 2001 to handle the administrative reform special project, listed the types of businesses conducted by the special public institutions and the matters to be reviewed for the respective types of businesses in April 2001. In June 2001, the Cabinet Headquarters for Administrative Reform completed and released an Interim Report Regarding the Review of the Special Public Institutions’ Businesses. On December 18, 2001, the Special Public Institutions Reform Promotion Headquarters adopted the Reorganization and Rationalization Plan for Special Public Institutions.

In the Reorganization and Rationalization Plan for Special Public Institutions, which was approved by a cabinet meeting on December 19, 2001, the reform concerning the businesses and organizational forms of special public institutions (including their abolition, integration or privatization) is detailed. With respect to the businesses of the Bank, the following plans were suggested to the Bank in the Reorganization and Rationalization Plan for Special Public Institutions:

International Financial Operations

One of the basic reform principles is to “let private entities handle as much as they are capable of doing.” In line with this policy, the Bank should review the scope of its operations in order to cut back the scale of its operations and take measures to seek to liquidify and/or securitize its loan assets to compress its outstanding loans.

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With respect to individual categories of its international financial operations, the reform calls on the Bank to take the following actions:

Export Loans: use guarantees more actively; discontinue new transactions related to advanced industrialized nations; and adjust as appropriate lending terms and conditions, such as the percentage of co-financing.

Import Loans: discontinue new transactions unrelated to natural resources (but actively use guarantees with respect to items that are essential to the Japanese economy such as aircraft); and adjust as appropriate lending terms and conditions, such as the percentage of co-financing.

Overseas Investment Loans: use guarantees more actively; discontinue new loans to advanced industrialized nations and specialize in taking various risks; and adjust as appropriate lending terms and conditions, such as the percentage of co-financing.

Re-finance: abolished.

With respect to all categories of its international financial operations, the reform calls on the Bank to: take appropriate measures regarding risk management of loan assets and disclose appropriate information on reserves; clearly identify who is responsible for setting interest rates, taking into account policy priorities and other factors; develop policy evaluation methods and introduce a system by which the evaluation of results can be reflected in operations (it is especially important to clarify the costs of policies including advance repayment).

Overseas Economic Cooperation Operations

With respect to individual categories of its overseas economic cooperation operations, the reform calls on the Bank to take the following actions:

Private-sector Investment Finance: discontinue new loans from April 1, 2003.

ODA Loans: consider reduction of the scale of operations consistent with the review of ODA loan policy.

With respect to all categories of its overseas economic cooperation operations, the reform calls on the Bank to: take appropriate measures regarding risk management of loan assets and disclose appropriate information on reserves; and develop policy evaluation methods and introduce a system by which the evaluation of results can be reflected in operations (it is especially important to clarify the costs of policies including advance repayment).

With respect to the Bank, no specific organizational reform was prescribed in the Reorganization and Rationalization Plan for Special Public Institutions. Since the beginning of 2002, an overall review of the area, scope and organizational structure of policy finance has been discussed by the Council on Economic and Fiscal Policy (“CEFP”), an advisory body for the Prime Minister. The CEFP announced “Reform of Policy Finance” on December 13, 2002. In the announcement, it was indicated that the reform should be implemented in a three-step process by:

• Step 1: actively utilizing policy finance until the end of March, 2005;

• Step 2: reviewing and reshaping the functions, scale and organization of these institutions to meet the desired standards, subject to the recovery and strength of private financial institutions, during a three-year preparatory period from April, 2005 to March, 2008; and

• Step 3: streamlining and reorganizing these institutions into new entities from April, 2008.

The Cabinet is expected to consider the CEFP’s reform proposals and to move steadily forward with reforms of the policy finance system as soon as possible taking into consideration the economic environment.

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Annual Operations results for FY 2004

Overall Operations

In fiscal 2004, the Bank made commitments in the aggregate amount of ¥1,918.9 billion for its overall loans, equity participation and guarantee operations, a year-on-year increase of 0.4%. The size of the Bank’s commitments has remained almost unchanged since fiscal 2000, when its assistance package for Asian countries hit by the currency crisis was completed.

Reflecting the utilization of the Bank’s guarantee facility in recent years, the aggregate amount of the Bank’s outstanding guarantees rose 121% from the previous year to ¥903.5 billion, while the outstanding balance of loans and equity participation decreased 3% to ¥19,995 billion as of the end of the fiscal year on March 31, 2005.

International Financial Operations

Loan and equity participation commitments and new guarantees made in the Bank’s International Financial Operations, which aim at supporting Japanese trade and investment activities as well as a stable international financial order, amounted to ¥1,120 billion in fiscal 2004, a year-on-year decrease of 15.4%.

Highlights of the Bank’s International Financial Operation in FY2004

Commitments for resource development projects intended to help secure a stable and diversified supply of energy and mineral resources in Japan, and to support the greater use of natural gas as a clean energy source, fall 38.3% from the previous year to ¥362.2 billion (import loans: ¥58.5 billion; investment loans: ¥303.7 billion), accounting for 32% of the total commitments in the Bank’s International Financial Operations. Major projects included an oil field development project in Azerbaijan and a copper mine expansion project in Chile. In providing these loans, the Bank made active use of structured finance and assumed risks of local companies.

With the intention of supplementing private financial institutions and mobilizing private funds, the Bank maintained its stance from the previous year in drawing extensively on its guarantee facility. The Bank made a total amount of ¥216.0 billion of guarantee commitments, covering guarantees for the importation of aircrafts, as well as overseas syndicated loans arranged by Japanese private financial institutions.

The Bank also utilized its guarantee facility in order to complement activities of private financial institutions and mobilize private funds for developing countries under the Asian Bond Market Initiative. For example, JBIC provided its guarantee for a Baht-denominated bond issued by Japanese affiliates in Thailand (¥7 billion) and a Korean collateralized bond obligations secured on corporate bonds issued by Korean small and medium-sized enterprises (¥7.7 billion).

Overseas Economic Cooperation Operations

Loan and equity participation commitments in the Bank’s Overseas Economic Cooperation Operations, which as part of Japanese official development assistance primarily consist of ODA loans, increased 36 percent from the previous fiscal year to ¥798.6 billion in fiscal 2004.

Highlights of the Bank’s Overseas Economic Cooperation Operations in FY2004

By region, Asia was given the top priority for the Bank’s new commitments in its Overseas Economic Cooperation Operations (accounting for 78.3% of the total amount of new commitments). By sector, transportation accounted for 38.4% of the total, followed by power/gas at 23.8%, and social services (including education and water supply/sewerage) at 22.9%. By country, India topped the list of recipients with loan commitments totaling ¥134.5 billion, followed by Indonesia with ¥114.8 billion, Turkey at ¥98.7 billion, and China at ¥85.9 billion. The first ODA loan was extended to Ukraine, making it the 96^th ODA loan recipient country.

Program loans, including the Third Poverty Reduction Support Credit for Vietnam, were provided for the first time in two years to improve institutional and policy environments in the developing countries.

Loans to environmental and poverty reduction projects have been on the rise in recent years. In FY2004, 24 loans were provided for environmental projects, including a geothermal project in Indonesia and an afforestation project in India, with their share increasing to 60% of the total volume of ODA loan commitments (from 57% in the previous year). 13 loans were provided for poverty reduction projects, including water supply and sewerage project in India, with their share increasing to 22% of the total (from 8% in the previous year).

In FY2004, preferential terms were additionally made applicable to ODA loans supporting peace-building efforts. They were first applied to three projects in Sri Lanka. The Special Term for Economic Partnership (STEP) was instituted in FY2004 to draw on advanced Japanese technology and Know-how and to raise the visibility of Japan’s ODA. These special terms applied to four loans with an aggregate total of 83.3 billion yen, including for a port development project in Vietnam. Their share increased to 10% of the total ODA loan commitments (from 6% in the previous year).

As the result of a growing number of orders won by Japanese firms for large-scale contracts (including in Turkey and Thailand) and involvement of Japanese firms in projects financed by Special ODA loans (including in the Philippines and Vietnam), the share of orders won by Japanese firms in the procurement of ODA loan-financed projects increased to 35% (from 25% in the previous year). The share of orders won by Japanese firms in the foreign currency portion of procurements increased even more significantly to 53% (from 37% in the previous year).

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The new 4-level rating system was adopted for ex-post evaluation of individual projects to improve accountability and the quality of operations.

With respect to the Medium-Term Strategy for Overseas Economic Cooperation Operations, which was prepared in March 2002, an evaluation was conducted and an evaluation report was produced. In addition, a new Medium-Term Strategy covering a 3-year period starting in FY2005 was released in April 2005 after an invitation for the public to submit comments.

Other Highlights in Overall Bank Activities

In an effort to seek public understanding of its operations and to further increase transparency, the Bank has continued to release interim and term-end financial statements in accordance with generally accepted accounting principles and practices for Japanese private corporations (“Japanese GAAP”).

The Bank released the Annual Business Performance Report for FY2003 in accordance with the “Performance Measurement for Strategic Management” system. Under this system, JBIC’s business performance is monitored in light of operational direction and targets which are set in advance. JBIC evaluated the mid-term operational strategy drawn up in March 2002 and compiled the findings in the Operational Strategy Evaluation Report for FY2002-2004. It also solicited public comments on its operational strategy, and identified changes in requests of the general public and needs of clients and beneficiaries. JBIC then responded to those changes by preparing and announcing a new operational strategy covering FY2005 and years beyond.

International Financial Operations

In this section, references to financial information of the Bank are to the relevant financial information with respect to the Bank’s international financial account.

Categories of Operations

The Bank’s international financial operations fall into seven categories: export loans, import loans, overseas investment loans, untied loans, equity participation, guarantee operations and bridge loans.

Export Loans. The Bank extends export loans to (1) Japanese exporters (supplier credits) and (2) foreign financial institutions and foreign importers in developing countries, which normally obtain a guarantee issued by a foreign government or a first ranked financial institution, in order to finance the export of plant, machinery and technologies by Japanese firms. The principal items eligible for these loans are equipment and machinery, such as power generation and communications equipment and machinery for the heavy and chemical industries, ships and aircraft and technologies.

Import Loans. The Bank provides import loans to Japanese importers and foreign exporters, in order to promote the development and import of natural resources which are deemed essential to the Japanese economy.

Overseas Investment Loans. The Bank extends overseas investment loans to (1) Japanese entities in order to provide them with funds for overseas investments in developing countries, (2) joint ventures in developing countries in which Japanese firms have equity interests and (3) foreign governments or financial institutions that make equity investments in or provide loans to the aforesaid joint ventures in developing countries. Encouraging Japanese overseas investments contributes to the improvement of the Japanese industrial structure and the achievement of a harmonized division of labor on a global basis.

Untied Loans. The Bank extends untied loans to foreign governments and financial institutions to provide them with long-term funds for development projects, especially in the infrastructure and energy fields, as well as to strengthen the industrial structure of developing countries and assist their economic restructuring programs. Untied loans are not tied to the procurement of goods and services from Japan.

Equity Participation. The Bank makes equity participations in either (1) corporations conducting business outside Japan or (2) Japanese corporations whose sole purpose is to make overseas investments in corporations conducting business overseas. To support efforts to mitigate global warming and improve energy efficiency in Asia, the Bank made equity investments totaling ¥2.2 billion in the Asia ESCO Fund, the Japan GHR Reduction Fund (JGRF) and Japan Carbon Finance, Ltd. (JCF), the first cases of equity participation since the Bank was established.

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Guarantee Operations. The Bank grants guarantees on (1) loans from Japanese private financial institutions for purposes consistent with those of the Bank, (2) bonds issued by Japanese entities, joint ventures, foreign government and financial institutions for purposes identical to those of the Bank’s overseas investment loans and untied loans. The net balance of the Bank’s guarantees outstanding as of March 31, 2005 totaled ¥903 billion.

Bridge Loans. Under certain circumstances, as part of the Japanese Government’s debt-relief measures, the Bank provides bridge loans with the authorization of the Minister of Finance. Bridge loans are short-term loans extended to foreign governments to provide short-term liquidity until the disbursement of the loans from international financial organizations such as the International Monetary Fund and the World Bank.

The Bank’s total commitments (international financial operations) for the year ended March 31, 2005 amounted to ¥1,120 billion, and the outstanding balance as of March 31, 2005 was ¥9,403 billion.

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The following table sets forth, as of the dates indicated, the total amounts of loans outstanding provided by the Bank, by type of credit and geographical distribution:

Loans Outstanding by Type of Credit and Geographical Distribution

	Japan Bank for International Cooperation
	As of March 31,
	2001				2002				2003				2004				2005
	(millions of yen)
EXPORT LOANS
Asia	¥	876,465	8.5	%	¥	893,692	8.5	%	¥	847,204	8.7	%	¥	818,544	9.0	%	¥	773,987	9.1	%
The Pacific		—	—			—	—			—	—			—	—			—	—
Europe		104,685	1.0			123,404	1.2			123,374	1.3			124,681	1.4			120,293	1.4
The Middle East		74,364	0.7			84,297	0.8			112,999	1.2			150,602	1.7			170,348	2.0
Africa		182,969	1.8			180,527	1.7			168,521	1.7			161,147	1.8			152,676	1.8
North America		—	—			—	—			—	—			—	—			—	—
Latin America		253,867	2.5			239,909	2.3			226,403	2.3			224,382	2.5			180,657	2.1
International Organizations, etc.		7,807	0.1			5,715	0.1			4,749	0.0			4,036	0.0			3,774	0.0
Total		1,500,156	14.5			1,527,544	14.5			1,483,249	15.2			1,483,392	16.3			1,401,735	16.5
IMPORT LOANS
Asia		12,687	0.1			19,975	0.2			18,201	0.2			17,420	0.2			19,820	0.2
The Pacific		26,470	0.3			39,373	0.4			40,981	0.4			37,781	0.4			41,377	0.5
Europe		41,631	0.4			30,681	0.3			21,682	0.2			15,433	0.2			10,866	0.1
The Middle East		117,153	1.1			207,400	2.0			309,910	3.2			348,585	3.8			400,956	4.7
Africa		26,463	0.3			10,252	0.1			9,096	0.1			8,369	0.1			8,452	0.1
North America		474,749	4.6			477,390	4.5			390,613	4.0			318,054	3.5			257,313	3.0
Latin America		33,470	0.3			33,470	0.3			33,470	0.3			33,470	0.4			33,470	0.4
International Organizations, etc.		3,464	0.0			3,520	0.0			3,503	0.0			3,483	0.0			3,009	0.0
Total		736,088	7.1			822,063	7.8			827,457	8.5			782,596	8.6			775,263	9.1
OVERSEAS INVESTMENT LOANS
Asia		1,984,600	19.2			2,024,290	19.2			1,793,955	18.4			1,594,992	17.6			1,474,130	17.3
The Pacific		151,698	1.5			136,635	1.3			121,771	1.2			117,754	1.3			163,709	1.9
Europe		441,338	4.3			363,712	3.4			332,487	3.4			371,421	4.1			415,939	4.9
The Middle East		316,827	3.1			396,474	3.8			369,769	3.8			354,358	3.9			389,304	4.6
Africa		17,096	0.2			37,369	0.4			50,437	0.5			79,040	0.9			67,057	0.8
North America		570,332	5.5			536,737	5.1			437,245	4.5			353,665	3.9			253,249	3.0
Latin America		661,177	6.4			743,979	7.0			736,590	7.5			721,138	7.9			621,805	7.3
International Organizations, etc.		—	—			—	—			173,635	1.8			198,720	2.2			188,352	2.2
Total		4,143,069	40.1			4,239,196	40.1			4,015,890	41.1			3,791,089	41.7			3,573,593	42.0
UNTIED LOANS
Asia		2,216,356	21.4			2,209,820	20.9			1,685,940	17.3			1,344,365	14.8			1,159,061	13.6
The Pacific		2,060	0.0			518	0.0			471	0.0			424	0.0			377	0.0
Europe		286,639	2.8			279,374	2.6			250,009	2.6			196,662	2.2			165,571	1.9
The Middle East		107,283	1.0			97,249	0.9			75,015	0.8			61,325	0.7			49,990	0.6
Africa		110,271	1.1			101,316	1.0			67,945	0.7			56,317	0.6			44,158	0.5
North America		—	—			—	—			—	—			—	—			—	—
Latin America		601,051	5.8			609,728	5.8			643,952	6.6			640,772	7.1			618,076	7.3
International Organizations, etc.		502,125	4.9			540,838	5.1			583,733	6.0			608,054	6.7			593,853	7.0
Total		3,825,785	37.0			3,838,843	36.4			3,307,064	33.9			2,907,919	32.0			2,631,085	30.9
GOVERNMENTAL LOANS(1)
Asia		42,087	0.4			39,568	0.4			37,396	0.4			35,114	0.4			32,532	0.4
The Pacific		—	—			—	—			—	—			—	—			—	—
Europe		1,948	0.0			1,909	0.0			1,876	0.0			1,761	0.0			1,679	0.0
The Middle East		45,978	0.4			45,620	0.4			45,262	0.5			44,905	0.5			44,547	0.5
Africa		27,016	0.3			26,935	0.3			27,272	0.3			25,711	0.3			25,701	0.3
North America		—	—			—	—			—	—			—	—			—	—
Latin America		17,017	0.2			16,002	0.2			15,231	0.2			14,507	0.2			13,650	0.2
International Organizations, etc.		—	—			—	—			—	—			—	—			—	—
Total		134,046	1.3			130,035	1.2			127,038	1.3			121,998	1.3			118,108	1.4
INVESTMENTS
Asia		—	—			—	—			—	—			—	—			—	—
The Pacific		—	—			—	—			—	—			—	—			—	—
Europe		—	—			—	—			—	—			—	—			—	—
The Middle East		—	—			—	—			—	—			—	—			—	—
Africa		—	—			—	—			—	—			—	—			—	—

13

	Japan Bank for International Cooperation
	As of March 31,
	2001				2002				2003				2004				2005
	(millions of yen)
North America		1,141	0.0			1,141	0.0			1,141	0.0			—	—			—	—
Latin America		—	—			—	—			—	—			—	—			—	—
International Organizations, etc.		—	—			—	—			—	—			—	—			112	0.0
Total		1,141	0.0			1,141	0.0			1,141	0.0			—	—			112	0.0
Total loans outstanding	¥	10,340,285	100.0	%	¥	10,558,822	100.0	%	¥	9,761,839	100.0	%	¥	9,086,993	100.0	%	¥	8,499,897	100.0	%

As a part of the Japan’s ODA, JEXIM conducted a part of the Government’s ODA loans. There has been no new JEXIM ODA commitment since 1987 and the Bank’s international financial operations did not take over such operations from JEXIM.

14

The following table sets forth the new loan commitments made by the Bank, by type of credit and geographical distribution in accordance with the Bank’s system of classification for the periods indicated.

Credit Commitments by Type of Credit and Geographical Distribution

	Fiscal year ended March 31,
	2001				2002				2003				2004				2005
	(millions of yen)
EXPORT LOANS
Asia	¥	68,499	6.3	%	¥	34,530	2.7	%	¥	158,401	14.9	%	¥	57,904	5.3	%	¥	31,327	3.5	%
The Pacific		—	—			—	—			—	—			—	—			—	—
Europe		22,277	2.1			4,800	0.4			6,850	0.6			1,845	0.2			22,101	2.4
The Middle East		34,077	3.1			19,600	1.6			1,026	0.1			48,397	4.5			58,724	6.5
Africa		3,471	0.3			84,226	6.7			282	0.0			5,509	0.5			821	0.1
North America		—	—			—	—			—	—			—	—			—	—
Latin America		45,660	4.2			35,656	2.8			28,311	2.7			2,553	0.2			1,720	0.2
International Organizations, etc.		—	—			—	—			—	—			—	—			118	0.0
Total		173,985	16.0			178,812	14.2			194,869	18.4			116,208	10.7			114,811	12.7
IMPORT LOANS
Asia		—	—			15,577	1.2			—	—			—	—			31,586	3.5
The Pacific		428	0.0			18,009	1.4			14,097	1.3			15,331	1.4			15,429	1.7
Europe		6,300	0.6			7,337	0.6			—	—			—	—			—	—
The Middle East		275,400	25.3			—	—			12,410	1.2			117,300	10.8			9,862	1.0
Africa		—	—			1,465	0.1			718	0.1			733	0.1			411	0.0
North America		37,232	3.4			93,491	7.4			492	0.0			—	—			1,217	0.1
Latin America		—	—			—	—			—	—			—	—			—	—
International Organizations, etc.		1,997	0.2			92	0.0			—	—			—	—			—	—
Total		321,357	29.6			135,971	10.8			27,717	2.6			133,364	12.3			58,505	6.3
OVERSEAS INVESTMENT LOANS
Asia		203,688	18.7			235,517	18.7			192,264	18.1			292,627	27.0			187,027	20.7
The Pacific		1,065	0.1			15,857	1.3			16,621	1.6			66,344	6.1			61,098	6.8
Europe		22,618	2.1			180,132	14.3			25,003	2.4			132,077	12.2			65,903	7.3
The Middle East		—	—			—	—			113,361	10.7			67,890	6.3			232,016	25.7
Africa		14,535	1.3			24,404	1.9			33,883	3.2			31,167	2.9			—	—
North America		52,426	4.8			98,374	7.8			17,680	1.7			3,215	0.3			20,384	2.3
Latin America		229,362	21.1			131,862	10.5			82,064	7.7			119,640	11.0			150,385	16.6
International Organizations, etc.		—	—			—	—			199,590	18.8			16,422	1.5			—	—
Total		523,695	48.2			686,146	54.4			680,467	64.2			729,383	67.3			716,814	79.4
UNTIED LOANS
Asia		—	—			111,361	8.8			—	—			41,256	3.8			6,540	0.7
The Pacific		—	—			—	—			—	—			—	—			—	—
Europe		5,500	0.5			—	—			—	—			—	—			—	—
The Middle East		—	—			—	—			—	—			—	—			5,400	0.6
Africa		6,600	0.6			—	—			—	—			—	—			—	—
North America		—	—			—	—			—	—			—	—			—	—
Latin America		55,300	5.1			28,700	2.3			156,780	14.8			62,880	5.8			—	—
International Organizations, etc.		—	—			119,834	9.5			—	—			—	—			—	—
Total		67,400	6.2			259,895	20.6			156,780	14.8			104,136	9.6			11,940	1.3
INVESTMENT
International Organizations, etc.																		2,243	0.2
Total																		2,243	0.2
Total credit commitments	¥	1,086,437	100.0	%	¥	1,260,823	100.0	%	¥	1,059,833	100.0	%	¥	1,083,090	100.0	%	¥	904,312	100.0	%

15

Loan and Guarantee Terms

The JBIC Law provides that the Bank’s interest rates and guarantee charges shall be determined in light of the interest rates and commissions charged for guarantees by private banks on a basis such that the Bank’s International Financial Operation revenues will cover its expenditures and losses. In addition, the Bank may not compete with private financial institutions in extending loans and guarantees, and may extend loans and guarantees only if financing by private financial institutions on ordinary terms is deemed difficult. The Bank carefully investigates the financial position of each prospective borrower and the technical and financial aspects of the project to be financed, and a loan or guarantee is extended only if there is reasonable assurance of repayment.

The Bank itself determines the interest rates, maturities, loan participation percentages, security and other terms on which it lends its funds or extends its guarantees. The interest rate to be applied to each loan is set by the Governor of the Bank, taking into consideration the Bank’s funding cost and the rate for borrowers of the highest credit standing from private banks extending long-term loans (see “Business—International Financial Operations—Sources of Funds” on page 17).

Most of the Bank’s international financial operations involve the financing of projects in cooperation with private financial institutions. All loans extended to domestic borrowers are secured by a bank guarantee, a mortgage or other collateral, or supported by a covenant requiring the borrower to provide security to the Bank at the Bank’s request. Overseas direct loans, which are usually extended to banks, governmental institutions in foreign countries or private companies with Japanese capital, are generally secured by guarantees issued by the foreign government, the foreign governmental financial institution, or by securities issued by Japanese domestic companies.

In addition to the loan terms provided in the JBIC Law, the Bank’s terms and conditions for export loans are determined, in the case of plant and equipment exports, in accordance with the OECD’s “Arrangement on Guidelines for Officially Supported Export Credits”, commonly referred to as the Consensus and, in the case of ship exports, the OECD’s “Understanding on Export Credits for Ships”, commonly referred to as the Understanding. The Consensus and the Understanding, which were established to avoid excessive competition in the area of financing for plant or ship exports, stipulate minimum interest rates, maximum credit terms and minimum down payments for officially supported medium- and long-term export credit.

The following table sets forth information concerning the balances of the Bank’s outstanding international financial operations loans as of March 31, 2004.

Loan Balances by Remainder of Term⁽¹⁾

	As of March 31, 2005
	(millions of yen)
One year or less	¥	1,135,388	13.6	%
More than 1 to 2 years		1,113,551	13.4
More than 2 years to 3 years		1,153,273	13.8
More than 3 years to 4 years		1,072,720	12.9
More than 4 years to 5 years		868,613	10.4
More than 5 years to 6 years		723,155	8.7
More than 6 years to 7 years		574,880	6.9
More than 7 years to 8 years		467,648	5.6
More than 8 years to 9 years		389,007	4.7
More than 9 years to 10 years		265,450	3.2
More than 10 years		568,904	6.8
Total	¥	8,332,589	100.0	%

⁽¹⁾ The amounts do not include principal that is overdue and unpaid, and principal that may possibly be waived according to the “Changes in Debt Relief Method” announced by the Japanese Government in December 2002.

Allowance for Possible Loan and Investment Losses

The Bank provides an allowance for possible loan and investment losses in its international financial operations, pursuant to the relevant cabinet order and related regulations. As of March 31, 2005, the Bank’s allowance totaled ¥46 billion. See Note 1 of “Notes to Financial Statements”.

As of March 31, 2005, the Bank wrote off loans totaling ¥2,517 million in its international financial operations. The amount of loans written off increased compared to the previous fiscal year, because the Bank began to write-off ODA loans waived according to the “Changes in Debt Relief Method” announced by the Japanese Government in December 2002.

16

In cases where borrowers indicate that they may be unable to meet payments on their loans, the Bank may revise the terms of repayment. In the case of direct loans to foreign governments, the international system provides several mechanisms and institutions through which countries facing repayment difficulties can effect remedial measures in agreement with their creditors (Paris Club rescheduling). Therefore, rescheduled principal and interest payments may have to be accepted in order to facilitate the collectibility of some loans or portions of loans. Should a default occur in the payment of principal or interest (whether by reason of a failure to agree on modified loan terms or otherwise), the Bank considers the related loan to be in arrears immediately to the extent of the defaulted amount. As of March 31, 2005, of the Bank’s loans, outstanding principal totaling ¥142,614 million was in arrears for six months or more, most of which were overseas direct loans. This amount decreased 24% from the previous fiscal. See “Non-performing Loans” and Note 3 of “Notes to Financial Statements”.

Sources of Funds

The following table sets forth information concerning the sources of funds for JEXIM and the Bank’s international financial operations. See also “Financial Statements—Statement of Changes in Financial Position (International Financial Account)”.

Sources of Funds

	Year ended March 31,
	2004		2005
	(millions of yen)
Borrowings from the Government Fund for Fiscal Investment and Loan Program Bonds(1)	¥	288,500	¥	321,600
Borrowings from the Postal Life Insurance Account		—		—
Bonds and notes(2)		377,267		480,630

⁽¹⁾ Includes both short-term and long-term borrowings.

⁽²⁾ Guaranteed by the Government except for the Fiscal Investment and Loan Program Agency Bond.

The Bank has raised funds for its international financial account through borrowings from the Japanese Government and issuances of Japanese Government-guaranteed bonds and notes in international markets. In accordance with the government’s policy to reform the zaito program (see “Government Control and Supervision”), the Bank began to raise funds in the Japanese domestic capital market on its own creditworthiness, starting in the fiscal year ended March 31, 2002. Specifically, the Bank issued bonds without a guarantee from the Japanese Government ¥240 billion during the fiscal years ended March 31, 2005, and plans to issue up to ¥260 billion during the fiscal year ending March 31, 2006.

Overseas Economic Cooperation Operations

In this section, references to financial information of the Bank are to the relevant financial information with respect to the Bank’s overseas economic cooperation account.

General

The Bank’s overseas economic cooperation operations fall into two categories: Official Development Assistance (ODA) loans and private-sector investment finance. All ODA loans and private-sector investment finance with a grant element of more than 25% are counted as ODA.

The Bank provides ODA loans to developing countries for their economic and social development and economic stability. All ODA loans are made according to agreements between the Japanese Government and the recipient countries. The Bank also provides private-sector investment finance to corporations in Japan and in developing countries to undertake projects in developing countries.

The Bank’s total commitments for the year ended March 31, 2005, amounted to ¥799 billion, and all of this amount is for the commitment of ODA. Total disbursements of the Bank for the year ended March 31, 2005 amounted to ¥662 billion, including ¥659,696 million of ODA loans and ¥2,416 million of private-sector investment finance. As of March 31, 2005, the outstanding balance of total ODA loans and private-sector investment finance was ¥11,496 billion.

17

Official Development Assistance Loans

The average interest rate of ODA loans committed by the Bank during the year ended March 31, 2005 was 0.98%, while the average repayment period was 34 years and 7 month (including the average grace period of 9 years and 7 months).

Measures for bridging regional income gaps in upper-middle income countries

As a result of recent rapid economic development, asymmetric growth in income across socio-economic classes and regions is becoming a serious challenge in upper-middle income countries. Encouraging their self-help efforts to address this problem, the Japanese Government will provide support for such countries by means of ODA loans.

ODA loans to upper-middle income countries have until now been limited in-principle to environmental, human resource development, and anti-seismic measures projects. In order to assist such countries to reduce regional income disparities, projects to develop specified economic and social infrastructure in low-income regions are now also included.

The following table shows the information concerning the balances of OECF’s or the Bank’s outstanding ODA loans as of the dates indicated:

Official Development Assistance Loans

	Fiscal year ended March 31,
	2001				2002				2003				2004				2005
	(millions of yen)
Asia	¥	8,496,905	79.5	%	¥	8,783,026	79.9	%	¥	9,000,862	80.2	%	¥	9,167,288	81.0	%	¥	9,306,086	82.1	%
The Middle East		544,163	5.1			530,157	4.8			519,327	4.6			508,390	4.5			491,549	4.3
Africa		991,560	9.3			1,000,366	9.1			1,000,212	8.9			973,441	8.6			875,648	7.7
Latin America and the Caribbean		584,325	5.5			608,791	5.5			626,015	5.6			580,355	5.1			565,132	5.0
Oceania		47,080	0.4			48,552	0.4			47,285	0.4			45,152	0.4			42,939	0.4
Europe		22,617	0.2			27,331	0.2			32,803	0.3			45,198	0.4			54,550	0.5
Others		—	—			—	—			—	—			—	—			—	—
Total	¥	10,686,649	100.0	%	¥	10,998,223	100.0	%	¥	11,226,503	100.0	%	¥	11,319,823	100.0	%	¥	11,335,904	100.0	%

18

The following table shows the geographic distribution of ODA loans committed by the Bank, as the case may be, for the periods indicated:

Geographical Distribution of ODA Loan Commitments

	Fiscal year ended March 31,
	2001				2002				2003				2004				2005
	(millions of yen)
Asia	¥	552,681	82.8	%	¥	616,507	89.6	%	¥	529,233	95.7	%	¥	528,370	89.9	%	¥	624,983	78.3	%
The Middle East		7,494	1.1			—	—			12,022	2.2			—	—			—	—
Africa		31,404	4.7			30,459	4.4			11,845	2.1			46,013	7.8			46,013	7.8
Latin America and the Caribbean		44,872	6.7			27,916	4.1			—	—			3,595	0.6			21,320	2.7
Oceania		5,350	0.8			—	—			—	—			—	—			—	—
Europe		25,635	3.8			12,894	1.9			—	—			9,689	1.6			47,838	6.0
Total	¥	667,436	100.0	%	¥	687,776	100.0		¥	553,100	100.0	%	¥	587,667	100.0	%	¥	798,605	100.0	%

The following table shows the sectorial distribution of ODA loans committed by the Bank, as the case may be, for the periods indicated:

Sectorial Distribution of ODA Loan Commitments

	Fiscal year ended March 31,
	2001				2002				2003				2004				2005
	(millions of yen)
Electric Power and Gas	¥	122,208	18.3	%	¥	139,361	20.3	%	¥	206,241	37.3	%	¥	281,186	47.8	%	¥	189,736	23.8	%
Transportation		352,258	52.8			370,941	53.9			110,775	20.0			132,381	22.5			306,869	38.4
Telecommunications		3,210	0.5			—	—			19,497	3.5			20,202	3.4			3,029	0.4
Irrigation and Flood Control		29,766	4.5			45,427	6.6			47,741	8.6			11,115	1.9			51,126	6.4
Agriculture, Forestry and Fisheries		12,000	1.8			7,977	1.2			52,070	9.4			24,760	4.2			31,530	3.9
Mining and Manufacturing		7,040	1.1			5,194	0.8			—	—			0	—			21,001	2.6
Social Services		135,604	20.3			118,876	17.3			109,336	19.8			118,023	20.1			182,520	22.9
Commodity Loans		5,350	0.8			—	—			7,440	1.3			0	—			12,794	1.6
Total	¥	667,436	100.0	%	¥	687,776	100.0	%	¥	553,100	100.0	%	¥	587,667	100.0	%	¥	798,605	100.0	%

19

The following table sets forth information concerning the balances of the Bank’s outstanding Overseas Economic Cooperation loans as of March 31, 2005:

Loan Balances by Remainder of Term

	As of March 31, 2005
	(millions of yen)
One year or less	¥	470,757	4.4	%
More than 1 to 2 years		501,145	4.7
More than 2 years to 3 years		530,789	5.0
More than 3 years to 4 years		556,395	5.2
More than 4 years to 5 years		578,793	5.4
More than 5 years to 6 years		581,859	5.4
More than 6 years to 7 years		579,181	5.4
More than 7 years to 8 years		559,630	5.2
More than 8 years to 9 years		555,923	5.2
More than 9 years to 10 years		552,705	5.2
More than 10 years to 11 years		535,391	5.0
More than 11 years to 12 years		512,861	4.8
More than 12 years to 13 years		512,208	4.8
More than 13 years to 14 years		480,204	4.5
More than 14 years to 15 years		441,422	4.1
More than 15 years		2,734,290	25.6
Total	¥	10,683,554	100.0	%

⁽¹⁾ The amounts do not include principal that is overdue and unpaid, and principal that may possibly be waived according to the “Changes in Debt Relief Method” announced by the Japanese Government in December 2002.

Private-sector Investment Finance

The Bank’s private-sector investment finance operations provide economic cooperation through extending loans and making equity investment for private sector activities in developing countries. The outstanding amount of private-sector investment financing by the Bank as of March 31, 2005 was ¥160 billion, including equity participation totaling ¥155 billion.

Commitment of Private Sector Investment Finance

Fiscal year ended March 31,	Amount (in millions)	Number of Commitments
2000(1)	878	1
2001	4,983	3
2002	—	—
2003(2)	486	1

⁽¹⁾ Combined data for the six months ended September 30, 1999 with respect to OECF and for the six months ended March 31, 2000 with respect to the Bank.

⁽²⁾ Private Sector Investment Finance discontinued making new loans starting April 1, 2003, in accordance with the Reorganization and Rationalization Plan for Special Public Institutions.

Allowance for Possible Loan and Investment Losses

The Bank provides an allowance for possible loan and investment losses in its overseas economic cooperation operations, pursuant to the relevant cabinet order and related regulations. As of March 31, 2005, the Bank’s allowance totaled ¥403 billion. See Note 1 of “Notes to Financial Statements”.

20

As of March 31, 2005, the Bank wrote off loans totaling ¥146,663 million in its overseas economic cooperation operations. The amount of loans written off increased compared to the previous fiscal year, because the bank began to write-off ODA loans waived according to the “Changes in Debt Relief Method” announced by the Japanese Government in December 2002.

In cases where borrowers indicate that they may be unable to meet payments on their loans, the Bank may revise the terms of repayment. In the case of direct loans to foreign governments, the international system provides several mechanisms and institutions through which countries facing repayment difficulties can effect remedial measures in agreement with their creditors (Paris Club rescheduling). Therefore, rescheduled principal and interest payments may have to be accepted in order to facilitate the collectibility of some loans or portions of loans. Should a default occur in the payment of principal or interest (whether by reason of a failure to agree on modified loan terms or otherwise), the Bank considers the related loan to be in arrears immediately to the extent of the defaulted amount. As of March 31, 2005, of the Bank’s loans, outstanding principal totaling ¥373,780 million was in arrears for six months or more, most of which related to overseas direct loans. See “Non-performing Loans” and Note 3 of “Notes to Financial Statements”.

Sources of Funds

The following table sets forth information concerning the sources of funds for the Bank’s overseas economic cooperation operations. See also “Financial Statements—Statement of Changes in Financial Position (Overseas Economic Corporation Account)”.

Sources of Funds

	Year ended March 31,
	2004		2005
	(millions of yen)
Borrowings from the Government Fund for Fiscal Investment and Loan Program	¥	294,500	¥	368,900
Capital subscriptions from the general account budget		200,300		186,600

Moreover, the Government of Japan may, within the limits of the budget, grant to the Bank an amount corresponding to a part of the expenses required for the Overseas Economic Cooperation operations.

Capital of the Bank

The following table sets forth information concerning the Bank’s total assets and equity based on both statutory financial statements (“JBIC Law financial statements”) and Japanese GAAP financial statements.

JBIC Law Financial Statements

(millions of yen)	Total						International Financial Account						Overseas Economic Cooperation Account
	Year ended March 31,
	2003		2004		2005		2003		2004		2005		2003		2004		2005
Total assets	21,881,739		21,344,307		21,024,581		10,700,034		10,143,392		9,779,508		11,181,706		11,200,915		11,245,073
Total equity	8,179,341		8,489,569		8,730,107		1,654,329		1,699,434		1,727,538		6,525,012		6,790,135		7,002,569
Capital	7,489,844		7,690,144		7,876,744		985,500		985,500		985,500		6,504,344		6,704,644		6,891,244
Reserve	889,055		659,250		761,749		608,336		638,582		676,258		280,719		20,667		85,491
Earnings	(199,559	)	140,175		91,614		60,492		75,352		65,780		(260,052	)	64,823		25,834
Total equity/Total assets	37.38	%	39.77	%	41.52	%	15.46	%	16.75	%	17.66	%	58.35	%	60.62	%	62.27	%

Japanese GAAP Financial Statements

(millions of yen)	Total						International Financial Account						Overseas Economic Cooperation Account
	Year ended March 31,
	2003		2004		2005		2003		2004		2005		2003		2004		2005
Total assets	21,294,849		20,839,757		20,653,038		10,717,200		10,146,237		9,827,312		10,577,649		10,693,520		10,825,726
Total equity	7,518,031		7,895,995		8,175,343		1,604,494		1,620,702		1,599,369		5,913,536		6,275,293		6,575,973
Capital	7,489,844		7,690,144		7,876,744		985,500		985,500		985,500		6,504,344		6,704,644		6,891,244
Reserve	28,186		205,851		298,598		618,994		635,202		613,869		(590,807	)	(429,350	)	(315,270	)
Total equity/Total assets	35.30	%	37.89	%	39.58	%	14.97	%	15.97	%	16.27	%	55.91	%	58.68	%	60.74	%

21

In the fiscal year ending March 31, 2002, the Bank began to compute its BIS based capital adequacy ratio as set forth in the table below.

	Year ended March 31,
	2004						2005
(millions of yen)	Total		International Financial Account		Overseas Economic Cooperation Account		Total		International Financial Account		Overseas Economic Cooperation Account
Core Capital (Tier I) (A)	7,858,320		1,583,026		6,275,293		8,142,453		1,566,479		6,575,973
Supplementary Capital (Tier II) (B)	124,683		44,798		79,884		134,550		46,980		87,570
Exclusion (C)	—		—		—		—		—		—
Total Capital (A)+(B)-(C) (D)	7,983,003		1,627,824		6,355,178		8,277,004		1,613,460		6,663,543
Risk Assets, etc (E)	21,951,340		9,589,819		12,361,521		21,582,731		9,015,272		12,567,459
Total Capital Ratio (D)/(E)	36.37	%	16.97	%	51.41	%	38.35	%	17.90	%	53.02	%
Tier I Ratio (A)/(E)	35.80	%	16.51	%	50.76	%	37.73	%	17.38	%	52.33	%

⁽¹⁾ Because general loan loss allowance of up to 1.25% of risk assets, etc (Item (E)) can be in the calculation for supplementary capital, the sum of International Financial Account and Overseas Economic Cooperation Account do not reconcile to the total figure.

Non-performing Loans

In the fiscal year ending March 31, 2001, the Bank began to assess all claims and monitor risks on its loans and other credits in accordance with the standards set forth in the Financial Inspection Manuals of the Financial Services Agency of Japan, and is applying to its assets the asset quality self-assessment standards applied by Japanese commercial financial institutions to their assets. The Bank’s asset quality self-assessment is based on its financial statements prepared in accordance with Japanese GAAP. ChuoAoyama PricewaterhouseCoopers audited the Bank’s self-assessment.

The Bank assessed its loans and other credits in accordance with disclosure requirements that are based, in all material respects, on two sets of disclosure regulations that are followed by commercial financial institutions in Japan, although the Bank is not required to follow either set of regulations. The first set of disclosure regulations includes those set forth under the Banking Law of 1981, as amended (the “Banking Law”). The Banking Law standards require “Risk-monitored Loans” to be disclosed in four categories: (1) bankrupt loans, (2) non-accrual loans, (3) past due loans (three months or more), and (4) restructured loans. The loan categories can be described in greater detail as follows:

“Bankrupt loans” are loans to borrowers which have begun bankruptcy, composition, reorganization, winding-up or special liquidation proceedings under the Bankruptcy Law, the Corporate Reorganization Law, the Commercial Code or other similar laws of Japan or have had their transactions with the promissory note clearinghouse suspended, or loans to borrowers which have begun similar proceedings under any foreign law.

“Non-accrual loans” are loans which are placed non-accrual status when collection of either the principal or interest becomes doubtful, but exclude “Bankrupt loans”.

“Past due loans (three months or more)” are loans for which principal and/or interest is past due three months or more from the date following the scheduled payment date, but exclude “Bankrupt loans” and “Non-accrual loans”.

“Restructured loans” are loans the terms of which the Bank has modified in favor of borrowers in order to expedite the borrowers’ restructuring and to support the borrower by, among other things, reducing the stated interest rate, deferring interest payments or write downs, but exclude (1) “Bankrupt loans”, (2) “Non-accrual loans”, and (3) “Past due loans (three months or more)”.

22

The following tables set forth the results of the Bank’s assessment of its loans according to the Banking Law standards as of March 31, 2004 and 2005:

Principal Amount of Non-Performing Loans

Calculated and Disclosed under Banking Law

	As of March 31, 2004
	International Financial Account		Overseas Economic Cooperation Account		Total
	(millions of yen)
Bankrupt loans	¥	83	¥	—	¥	83
Non-accrual loans		216,429		51,584		268,013
Loans past due three months or more as to principal or interest payments		16,032		54,245		70,278
Restructured loans		385,225		730,673		1,115,899
Total	¥	617,770	¥	836,504	¥	1,454,274
	As of March 31, 2005
	International Financial Account		Overseas Economic Cooperation Account		Total
	(millions of yen)
Bankrupt loans	¥	—	¥	—	¥	—
Non-accrual loans		265,797		122,764		388,561
Loans past due three months or more as to principal or interest payments		2,714		—		2,714
Restructured loans		325,428		724,275		1,049,703
Total	¥	593,940	¥	847,039	¥	1,440,979

In addition, the Bank has assessed its loans and other assets in accordance with disclosure requirements that are based, in all material respects, on the requirements set forth in the Law on Emergency Measures for the Revitalization of the Functions of the Financial System of 1998, as amended (the “Financial Revitalization Law”). The Financial Revitalization Law requires that problem assets be categorized in three categories: (1) bankrupt and quasi-bankrupt assets, (2) doubtful assets and (3) substandard loans, which may be described more fully as follows:

“Bankrupt and quasi-bankrupt assets” are loans to and other credits to debtors which have begun proceedings under the Bankruptcy Law, the Corporate Reorganization Law, the Financial Revitalization Law or other similar laws of Japan and have financially failed, as well as similar loans as so designated.

“Doubtful Assets” are loans to and other credits to debtors whose financial and operational conditions have been deteriorated and which are unlikely to make payment of principal and/or interest on a contractual basis.

“Substandard loans” are (1) “Past due loans (three months or more)” for which principal and/or interest is past due three months or more from the date following the scheduled payment date excluding “Bankrupt and quasi-bankrupt assets” and “Doubtful assets”, and (2) restructured loans on which the Bank granted concessions to borrowers in financial difficulties to assist them in their financial recovery and eventually be able to pay to creditors, but exclude “Bankrupt and quasi-bankrupt assets”, “Doubtful assets” and “Past due loans (three months or more)”.

23

The following table sets forth the result of the Bank’s assessment of its loan portfolio according to the Financial Revitalization Law standards as of March 31, 2004 and 2005:

Problem Assets

Calculated and Disclosed under Financial Revitalization Law

	As of March 31, 2004
	International Financial Account		Overseas Economic Cooperation Account		Total
	(millions of yen)
Bankrupt and quasi-bankrupt assets	¥	68,382	¥	—	¥	68,382
Doubtful assets		149,353		51,584		200,938
Substandard loans		401,257		784,919		1,186,177
Total	¥	618,994	¥	836,504	¥	1,455,498
	As of March 31, 2005
	International Financial Account		Overseas Economic Cooperation Account		Total
	(millions of yen)
Bankrupt and quasi-bankrupt assets	¥	69,780	¥	—	¥	69,780
Doubtful assets		196,173		122,764		318,937
Substandard loans		328,142		724,275		1,052,417
Total	¥	594,096	¥	847,039	¥	1,441,136

In the event that a debtor country is temporarily unable to repay its external public debt (debts to creditors that are public institutions such as central governments, trade insurance agencies and export credit agencies) due to a decline in its balance of payments, meetings of creditor countries (the “Paris Club”) may be held to discuss debt relief measures. When creditor countries agree on debt relief measures, debt rescheduling agreements between the creditors and a debtor are agreed, and repayments are made according to the agreements. During this temporary liquidity assistance effort, the debtor country implements an economic reform program pursuant to an agreement with the IMF and continues repayments of its debts. The principal amount of loans as of March 31, 2005, for which the Bank agreed to provide debt relief pursuant to the Paris Club agreements was ¥487,301 million on the International Financial Account and ¥1,282,521 million on the Overseas Economic Cooperation Account.

In the past, the Bank had not categorized the loans rescheduled under the Paris Club agreements, described above, under “Restructured loans.” This practice was based on the assumption that, unlike loans provided by private financial institutions, the Bank’s loans, as loans from a public creditor, benefit from an asset securing mechanism under the international framework which accords a high probability of repayment. However, in order to facilitate comparison with private financial institutions, effective from the fiscal year ending March 31, 2004, the Bank now classifies its loans rescheduled under the Paris Club made to borrowers classified under the Banking Law self assessment as “Watchlisted”, but not “Past due loans (3 months or more)”, as “Restructured loans”. The amount of such loans as of March 31, 2005, included in “Restructured loans” in the above table, is ¥77,863 million attributable to the International Financial Account, of which ¥74,580 million represents original principal and ¥724,275 million attributable to the Overseas Economic Cooperation Account, of which ¥570,270 million represents original principal.

24

Risk Management

The Bank manages major risks in its operations as a policy-lending institution in the following manner.

Credit Risks

Managing credit risks

The cornerstone of credit risk management at the Bank is evaluation of an individual borrower’s creditworthiness, among other factors, in the process leading to credit approval. When a new credit is processed, the relevant financing departments, credit analysis department and country economic analysis department collect and analyze information on the borrower. The overseas representative offices also play a part in collecting information on foreign governments and corporations. Credit appraisal takes place, with checks and balances at work between these different departments throughout the process, leading to the final decision by the management.

For lending to foreign governments and corporations, the Bank makes most use of its position as a public institution and exchanges views and information with governments and other authorities in recipient countries, international institutions such as the IMF and the World Bank, other regional development banks and official export credit agencies as well as private financial institutions in the industrial countries. Using all these channels, the Bank evaluates sovereign or country risk based on a broad range of information on government and government agency borrowers as well as political and economic conditions in their countries.

For credit to domestic and foreign corporations, there is need to evaluate their creditworthiness and the appropriateness of the collateral they provide. In particular, for credit related to projects overseas, credit evaluation involves checking and examining the certainty of transactions to be financed, feasibility studies of projects and the industry in which the borrower operates.

Internal credit rating

The Bank recently started an internal credit rating program that covers substantially all of its borrowers. The Bank uses its internal credit ratings for loan appraisals and to quantify its credit risks.

Internal assessment of asset portfolio

As part of its internal credit risk management, the Bank started self-assessments of its asset portfolio in the year ended March 31, 2001. The Bank is undertaking internal assessments, similar to Japanese private financial institutions, in accordance with the Financial Inspection Manuals prepared by the Financial Services Agency as well as in consultation with an auditing firm to assure the appropriateness of the Bank’s self-assessment of its loan assets. In this process, the Bank, following the examples of private financial institutions, conducts first stage assessments by the relevant financing departments, second stage assessments by the credit and country economic analysis departments, and inspections by the auditing department. The results of this internal assessment of asset portfolios are used for the disclosure of the quality of assets to enhance the transparency of the Bank’s financial position. See Note 7 of “Notes to Financial Statements”.

Quantifying credit risks

In addition to individual credit risk management, the Bank is working on quantifying credit risks with a view to reflecting them in financing policy in the future. To quantify credit risks, it is important to take into account the characteristic of the Bank’s loan portfolio that there is a significant proportion of long-term loans and loans involving sovereign risk or country risk. Also to be taken into account is the mechanism of securing assets, such as the framework of international financial assistance to debtor countries through the Paris Club, which is unique to official creditors. Currently, work is under way on measuring the volume of overall credit risks, incorporating these factors.

Market Risks

Exchange rate risk

Foreign currency-denominated loans of the Bank’s international financial operations involve risks related to exchange rate fluctuations. The Bank has a consistent policy of managing its risk by hedging the full amount of such exposure through currency swaps and forward exchange transactions. Loans provided by the Bank’s overseas economic cooperation operations do not involve exchange rate risk, since none of the loans are denominated in foreign currencies.

Interest rate risk

In the Bank’s international financial operations, interest rate risk for foreign currency-denominated loans is mainly hedged by using interest rate swaps by which both foreign currency-denominated loans and the related funding arrangements can be managed on a floating-rate basis. Interest rate risk for yen-denominated loans is limited since maturity of loans and the related funding arrangements, both on a fixed-rate basis, are generally matched. In addition, the Bank makes careful projections of its future asset/liability structure and profits and losses.

In the Bank’s overseas economic cooperation operations, the capacity for absorbing interest rate risk is enhanced by capital injection from the national budget along with borrowing under the zaito program (see “Government Control and Supervision”). As in the case of the international financial operations, careful projections are made by the Bank of its future asset/liability structure and profits and losses.

25

Derivatives transactions

Policy for derivatives transactions

The Bank engages in derivatives transactions exclusively for the purpose of hedging exchange rate and interest rate risks that are involved in its lending and funding operations.

Transactions

Derivatives transactions of the Bank include interest rate and currency swaps and forward exchange contracts. The table below gives details of these transactions as of March 31, 2005.

Credit Risk Amounts of Derivatives, etc.

	As of March 31, 2005
	Notional Amount		Credit Risk
	(billions of yen)
Interest Rate Swap	¥	2,310	¥	57
Currency Swaps		4,168		706
Forward Exchange Contracts		1.4		0.0
Other Derivatives		—		—
Credit Risk Reductions through Netting		—		(168	)
Total	¥	6,479	¥	596

Risks involved in derivatives transactions and policies for addressing risks

Credit risk. Potential loss from the failure of a counterparty to perform its obligations in accordance with terms and conditions of the contract governing transactions due to bankruptcy or deteriorating business conditions.

The Bank constantly monitors the market value of derivatives transactions as to each counterparty and the amount of its credit exposure to and creditworthiness of each counterparty in order to ascertain the appropriateness of entering into or maintaining a transaction with each counterparty.

Liquidity Risk. Liquidity risk refers to the risk of cash flow tightening due to worsening fund-raising capability that arises from deterioration of creditworthiness or mismatches in the maturity of assets and liabilities. The Bank is minimizing the liquidity risk through effective cash flow management and diversification of its funding sources. The Bank borrows under the zaito program and issues government-guaranteed bonds in the international capital markets. The Bank started to issue bonds without a government guarantee in the domestic capital market in the year ending March 31, 2001.

26

MANAGEMENT

The JBIC Law stipulates that Bank’s management consists of a Governor, two Deputy Governors and Managing Directors and up to seven Senior Executive Directors. In addition to these officers, the Bank shall have up to two Auditors. The Governor and the Auditors are appointed by the Minister of Finance and the Deputy Governors and Managing Directors are appointed by the Governor with the consent of the Minister of Finance. Senior Executive Directors are appointed by the Governor.

The Governor is the Bank’s chief executive officer, and the Deputy Governors and Managing Directors are his alternates. The Senior Executive Directors exercise various management functions in accordance with delegations from the Governor, but final authority in all matters resides exclusively with the Governor.

The Auditors audit the business of the Bank and may submit their views to the Governor or the supervising Ministers (the Minister of Finance and the Minister of Foreign Affairs) when they deem it necessary. Every half year, the Auditors audit the Bank’s statutory financial statements. Their opinion, together with the statutory financial statements, is submitted to the Minister of Finance within two months after termination of the first six-month period of each fiscal year and within three months after termination of each fiscal year.

The Bank’s Executive Officers (as of September 1, 2005)

Title	Name
Governor	Kyosuke Shinozawa
Deputy Governor and Managing Director	Koji Tanami
Deputy Governor and Managing Director	Yoshihiko Morita
Senior Executive Director	Takayuki Yamada
Senior Executive Director	Akihiko Furuya
Senior Executive Director	Tadashi Iwashita
Senior Executive Director	Iwao Okamoto
Senior Executive Director	Keiichi Tango
Senior Executive Director	Shigeru Nozaki
Senior Executive Director	Fumio Hoshi
Auditor	Yasuo Furutachi
Auditor	Hiromasa Toyooka
Executive Director, JBIC Institute	Shozo Kitta
Resident Executive Director, Osaka Branch	Junichi Kondo
Executive Director	Shigeru Takeda
Executive Director	Koji Sumiya
Resident Executive Director for Asia and Oceania	Wataru Yoshida
Resident Executive Director for Europe and the Middle East	Kuniaki Ito
Resident Executive Director for Africa	Hiroshi Haruta
Resident Executive Director for the Americas	-

27

DEBT RECORD

There has been no default on any obligation of the Bank.

FINANCIAL STATEMENTS OF JAPAN BANK FOR INTERNATIONAL

COOPERATION AND AUDITORS

The JBIC Law requires the Bank to prepare statutory financial statements twice a year and to submit them, with an opinion of the Bank’s Auditors thereon, to the Minister of Finance. The accounts of the Government Agencies, which include the Bank, are examined semi-annually by the Board of Audit to determine compliance with certain statutory requirements. The Board of Audit is an independent body created by the Constitution of Japan, and its Examination Reports on the accounts of the Bank and the other Government Agencies, together with its Audit Reports on the final accounts of the Government, are submitted to the Diet through the Cabinet.

Since the fiscal year ended March 31, 2001, the Bank has prepared and made public financial statements in accordance with generally accepted accounting principles and practices for Japanese private corporations (Japanese GAAP), in addition to preparing the statutory financial statements in accordance with the JBIC Law and regulations thereunder. The Bank’s Japanese GAAP financial statements consist of a balance sheet, statement of operations, statement of cash flows, statement of equity, and accompanying notes, all presented in accordance with Japanese GAAP and available in English as well as in Japanese (see Exhibit 4 to this Annual Report on Form 18-K). The Bank’s Japanese GAAP financial statements have been audited by ChuoAoyama PricewaterhouseCoopers, independent accountants, as stated in their report, which is incorporated in Exhibit 4 to this Annual Report on Form 18-K. JBIC may from time to time review its financial statements and accounting procedures and to make appropriate changes to them reflecting market practices and regulations. In preparing the financial statements presented in accordance with Japanese GAAP, the Bank made necessary adjustments to its statutory financial statements, which were prepared based on the Bank’s statutes and related regulations as well as accounting principles applied to special public corporations. The principal differences in accounting practice between the two sets of financial statements pertain to the calculation of the provision for allowance for possible loan losses, the calculation of the allowance for employee retirement benefits, and the accounting treatment of foreign currency transactions and financial products.

28

Key Differences Between the Japanese GAAP and JBIC Law Financial Statements

	Japanese GAAP Financial Statements	JBIC Law Financial Statements
Profit distribution	•      Payments to the National Treasury are classified as profit distribution	•      The JBIC Law and Cabinet orders provide that half of profits in the International Financial Account shall be transferred to reserves. All profits in the Overseas Economic Cooperation Account shall be transferred to reserves
		•      Profits remaining in the International Financial Account after providing for reserves shall be paid to the National Treasury
Loan loss reserve	•      Provided based on the results of a self-assessment of assets according to the Financial Inspection Manuals	•      JBIC provides an allowance based on the rate established in a MOF Notification (Actual reserve rate indicated by MOF)
	•      Conducts a self-assessment of loan assets and provide a general allowance based on a projected loss rate for loans to Normal borrowers and Watch borrowers	<International Financial Account>
		•      In principle, provided at 3/1,000 (3/1,000) of loans outstanding at the fiscal year-end
	•      Establishes specific reserves / depreciation for Category III and Category IV loans	•      For loans to countries subject to Paris Club relief measures (Naples term), the allowance is provided within a range of 1/2 (300/1,000) of the agreed reduced rate
		•      The allowance is provided equal to 100% of each of the following outstanding loans: (i) loans to the countries which are categorized as HIPCs, and have reached the Completion Point at fiscal year-end, (ii) loans to the HIPCs which have not reached the Decision Point at the end of FY2002, and (iii) loans under TDB scheme
		<Overseas Economic Cooperation Account>
		•      For ODA loans, provided within a range of 15/1,000 (0.1/1,000) of loans outstanding at fiscal year-end
		•      For private-sector investment finance, provided within a range of 30/1,000 (30/1,000) of loans outstanding at fiscal year-end
		•      For equity participation, to cover undistributed losses of invested corporations, provided in proportion to JBIC’s investment against total investment to the corporations
		•      The allowance is provided equal to 100% of each of the outstanding loans to the HIPCs which have not reached the Decision Point at the end of FY 2002

29

	Japanese GAAP Financial Statements	JBIC Law Financial Statements
Allowance for employee retirement benefits	•      Calculates retirement benefit obligations and provides allowance after deducting the current market value of pension assets	•      Not provided
Translation of foreign currency transactions	•      Previous month-end TTM for transactions during the year. Fiscal year-end stock at fiscal year-end TTM	•      Non-exchange transactions are stated at the Basic Rate of Exchange (revised semi-annually in January and July by The Bank of Japan). Transactions covered by a forward exchange contract are stated at the contract rate
Financial products (derivatives)	•      In principle, stated at current market value in the income statements. However, hedge accounting is employed for items recognized as for hedge purpose and after their effectiveness is confirmed. Hedge accounting is employed for all interest rate swaps and the market value of these transactions is recorded on the balance sheet	•      Off balance sheet transactions
	•      Foreign currency swaps are recorded on the balance sheet and the income statement on an accrual basis in accordance with “the transitional application described in JICPA Industry Audit Committee Report No. 25,” which is adopted by the private banks

Differences between the Japanese GAAP and JBIC Law Financial Statements with regard to total assets and equity as of 31 March, 2005

	Total						International Financial Account						Overseas Economic Cooperation Account
	Japanese GAAP		JBIC Law ‚		 – ‚		Japanese GAAP		JBIC Law ‚		 – ‚		Japanese GAAP		JBIC Law‚		 – ‚
	(billions of yen)
Total Assets	20,653		21,025		(372	)	9,827		9,780		47		10,826		11,245		(419	)
Total Equity	8,175		8,730		(555	)	1,599		1,728		(129	)	6,576		7,003		(427	)
Capital	7,877		7,877		—		986		986		—		6,891		6,891
Reserves	299		762		(463	)	614		676		(62	)	(315	)	85		(400	)
Total Equity/ Total Assets	39.58	%	41.52	%	(1.94	)%	16.27	%	17.66	%	(1.39	)%	60.74	%	62.27	%	(1.53	)%

30

JAPAN BANK FOR INTERNATIONAL COOPERATION

4-1, Ohtemachi 1-chome

Chiyoda-ku, Tokyo

As auditors of Japan Bank for International Cooperation, we have audited the balance sheet of Japan Bank for International Cooperation as of March 31, 2005 and the related statement of earnings for the year ended March 31, 2005. Our audit was made in accordance with the Japan Bank for International Cooperation Law and regulations thereunder.

In our opinion, the financial statements referred to above present fairly the financial position of Japan Bank for International Cooperation as of March 31, 2005 and the results of its operations for the year then ended, in conformity with the Japan Bank for International Cooperation Law and regulations thereunder and accounting principles generally accepted in Japan.

YASUO FURUTACHI

Auditor

Japan Bank for International Cooperation

HIROMASA TOYOOKA

Auditor

Japan Bank for International Cooperation

September 29, 2005

JAPAN BANK FOR INTERNATIONAL COOPERATION

BALANCE SHEET (THE BANK)

	March 31, 2005			March 31, 2004
	(Millions of Yen)
ASSETS:
Cash and Cash Equivalents	¥	169,036		¥	219,862
Loans (Note 2)		19,840,270			20,412,648
Investments		155,172			153,336
Securities		—			—
Accrued Interest Income		144,162			150,136
Miscellaneous Assets		231,558			82,605
Premises and Equipment		26,367			27,448
Deferred Charges		3,556			2,926
Customers’ Liabilities for Acceptances and Guarantees		903,483			745,734
Allowance for Possible Loan and Investment Losses		(449,023	)		(450,389	)
TOTAL ASSETS	¥	21,024,581		¥	21,344,307
LIABILITIES, CAPITAL AND RESERVES:
Liabilities:
Borrowings (Note 4):	¥	9,559,735		¥	10,392,925
Bonds and Notes		1,759,488			1,641,318
Accrued Interest Expenses		64,353			68,304
Miscellaneous Liabilities		7,414			6,457
Allowance for Possible Loan and Investment Losses		—			—
Acceptances and Guarantees		903,483			745,734
TOTALLIABILITIES		12,294,474			12,854,737
Capital and Reserves:
Capital of the Account for International Financial Operations (Note 5)		985,500			985,500
Capital of the Account for Overseas Economic Cooperation Operations (Note 5)		6,891,244			6,704,644
Reserve of the Account for International Financial Operations (Note 6)		676,258			638,582
Net Earnings of the Account for International Financial Operations		65,780			75,352
Reserve of the Account for Overseas Economic Cooperation Operations (Note 6)		85,491			20,667
Net Earnings of the Account for Overseas Economic Cooperation Operations		25,834			64,823
TOTALCAPITALANDRESERVES		8,730,107			8,489,569
TOTAL LIABILITIES, CAPITALAND RESERVES		21,024,581			21,344,307

See “Notes to Financial Statements”.

JAPAN BANK FOR INTERNATIONAL COOPERATION

STATEMENT OF EARNINGS (THE BANK)

	Fiscal Year Ended March 31, 2005			Fiscal Year Ended March 31, 2004
	(Millions of Yen)
Ordinary Income:
Interest on Loans	¥	472,683		¥	487,903
Guarantee Commissions		3,897			3,084
Dividends on Investments		3,455			2,307
Grant from General Account		30,000			30,000
Interest on Deposits in Banks		2,495			1,679
Interest on Swaps and Miscellaneous Interest Received		59,936			62,715
Commissions		1,972			2,450
Foreign Exchange Gains		1,619			772
Interest on Securities		—			—
Other Income		1,448			2,974
Reversal of Allowance for Possible Loan and Investment Losses		450,389			454,912
Net Earnings of the Account for Overseas Economic Cooperation Operations		(260,052	)		(260,052	)
Total	¥	1,027,894		¥	1,048,796
Ordinary Expenses:
Interest on Borrowings	¥	220,571		¥	244,356
Interest on Bonds and Notes		45,056			43,184
Interest on Swaps and Miscellaneous Interest Payment		29,029			23,774
Administrative Expenses		24,437			24,461
Depreciation of Premises and Equipment		1,212			1,371
Commissions		5,787			5,855
Foreign Exchange Losses		5,783			5,088
Write-off of Loans		149,180			105,473
Loss from Disposal of Investments		—			1,561
Amortization of Discounts on Bonds and Notes		673			751
Amortization of Bond and Note Issue Expenses		1,065			746
Other Expenses		4,463			1,612
Provision for Allowance for Possible Loan and Investment Losses		449,023			450,389
		936,281			908,621
Net Earnings of the Account for International Financial Operations		65,780			75,352
Net Earnings of the Account for Overseas Economic Cooperation Operations		25,834			64,823
Total	¥	1,027,894		¥	1,048,796

See “Notes to Financial Statements”.

JAPAN BANK FOR INTERNATIONAL COOPERATION

STATEMENTS OF CHANGES IN FINANCIAL POSITION (THE BANK)

	Fiscal Year Ended March 31, 2005			Fiscal Year Ended March 31, 2004
	(millions of yen)
Funds Brought Forward from the Prior Fiscal Period	¥	219,862		¥	288,244
SOURCEOF FUNDS:
Investments from Government		186,600			200,300
Grant from Government		30,000			30,000
Long-term Borrowings from Government Trust Fund Bureau		690,500			583,000
Long-term Borrowings from Government Post Office Life Insurance Fund		—			—
Short-term Borrowings from Private Banks		—			9,085
Bonds and Notes		480,630			377,267
Collection from Loans		1,908,713			2,146,233
Interest on Loans		440,801			451,661
Guarantee Commissions		3,685			2,882
Income on Securities		—			—
Interest on Deposits in Banks		2,495			1,679
Interest on Swaps and Miscellaneous Interest Received		136,303			119,229
Others		4,681			10,379
TOTAL SOURCES	¥	3,884,408		¥	3,931,714
USE OF FUNDS:
Loans		1,683,151			1,780,018
Investments		2,528			263
Repayment of Borrowings from Government Trust Fund Bureau		1,462,284			1,341,182
Repayment of Borrowings from Government Post Office Life Insurance Fund		61,406			67,574
Repayment of Borrowings from Private Banks		—			9,085
Redemption of Bonds and Notes		304,032			340,607
Purchase of Premises and Equipment		174			887
Interest on Borrowings from Government Trust Fund Bureau		223,692			244,842
Interest on Borrowings from Government Post Office Life Insurance Fund		4,642			6,590
Interest on Borrowings from Private Banks		—			1
Interest on Bonds and Notes		43,775			45,356
Interest on Swaps and Miscellaneous Interest Payment		93,856			81,523
Outsourcing Costs		5,782			5,847
Administrative Expenses		24,235			24,253
Miscellaneous Expenses for Bond Issuance		201			208
Others		(11,070	)		13,402
Payment to National Treasury		36,547			38,459
TOTAL USES	¥	3,935,235		¥	4,000,097
Funds Carried Forward to the Next Fiscal Period	¥	169,036		¥	219,862

See “Notes to Financial Statements”.

JAPAN BANK FOR INTERNATIONAL COOPERATION

BALANCE SHEET

(INTERNATIONAL FINANCIAL ACCOUNT)

	March 31, 2005			March 31, 2004
	(Millions of Yen)
ASSETS:
Cash and Cash Equivalents	¥	105,346		¥	185,185
Loans (Note 2)		8,499,785			9,086,993
Investments		112			—
Securities		—			—
Accrued Interest Income		62,833			68,881
Miscellaneous Assets		231,009			82,024
Premises and Equipment		19,465			20,230
Deferred Charges		3,551			2,916
Customers’ Liabilities for Acceptance and Guarantee		903,483			745,734
Allowance for Possible Loan and Investment Losses		(46,076	)		(48,570	)
TOTAL ASSETS	¥	9,779,508		¥	10,143,392
LIABILITIES, CAPITAL AND RESERVES:
Liabilities:
Borrowings (Note 4):	¥	5,359,276		¥	6,027,018
Bonds and Notes		1,734,488			1,616,318
Accrued Interest Expenses		47,960			51,081
Miscellaneous Liabilities		6,763			3,807
Acceptances and Guarantees		903,483			745,734
TOTAL LIABILITIES		8,051,970			8,443,958
Capital and Reserves:
Capital (Note 5)		985,500			985,500
Reserve (Note 6)		676,258			638,582
Net Earnings for the Period		65,780			75,352
TOTAL CAPITAL AND RESERVES		1,727,538			1,699,434
TOTAL LIABILITIES, CAPITAL AND RESERVES	¥	9,779,508		¥	10,143,392

See “Notes to Financial Statements”.

JAPAN BANK FOR INTERNATIONAL COOPERATION

STATEMENT OF EARNINGS

(INTERNATIONAL FINANCIAL ACCOUNT)

	Fiscal Year Ended March 31, 2005		Fiscal Year Ended March 31, 2004
	(Millions of Yen)
Ordinary Income:
Interest on Loans	¥	213,011	¥	218,856
Guarantee Commissions		3,897		3,084
Interest on Deposits in Banks		2,495		1,679
Interest on Swaps and Miscellaneous Interest Received		59,936		62,714
Commissions		1,286		1,819
Foreign Exchange Gains		1,619		772
Interest on Securities		—		—
Other Income		1,132		2,409
Reversal of Allowance for Possible Loan and Investment Losses		48,570		52,950
Total	¥	331,945	¥	344,283
Ordinary Expenses:
Interest on Borrowings	¥	117,362	¥	123,266
Interest on Bonds and Notes		44,316		42,444
Interest on Swaps and Miscellaneous Interest Payment		28,676		23,774
Administrative Expenses		15,245		15,261
Depreciation of Premises and Equipment		859		976
Commissions		3,588		3,630
Foreign Exchange Losses		5,783		5,088
Write-off of Loans		2,517		2,359
Loss from Disposal of Investments		—		1,141
Amortization of Discounts on Bonds and Notes		668		746
Amortization of Bond and Note Issue Expenses		1,065		746
Other Expenses		9		930
Provision for Allowance for Possible Loan and Investment Losses		46,076		48,570
		266,166		268,931
Net Earnings		65,780		75,352
Total	¥	331,945	¥	344,283

See “Notes to Financial Statements”.

JAPAN BANK FOR INTERNATIONAL COOPERATION

STATEMENTS OF CHANGES IN FINANCIAL POSITION

(INTERNATIONAL FINANCIAL ACCOUNT)

	Fiscal Year Ended March 31, 2005			Fiscal Year Ended March 31, 2004
	(millions of yen)
Funds Brought Forward from the Prior Fiscal Period	¥	185,185		¥	228,712
SOURCE OF FUNDS:
Long-term Borrowings from Government Trust Fund Bureau		321,600			288,500
Long-term Borrowings from Government Post Office Life Insurance Fund		—			—
Short-term Borrowings from Private Banks		—			9,085
Bonds and Notes		480,630			377,267
Collection from Loans		1,393,398			1,630,865
Interest on Loans		207,939			223,636
Guarantee Commissions		3,685			2,882
Income on Securities		—			—
Interest on Deposits in Banks		2,495			1,679
Interest on Swaps and Miscellaneous Interest Received		136,303			119,228
Others		1,486			6,454
TOTAL SOURCES	¥	2,547,536		¥	2,659,597
USE OF FUNDS:
Loans		1,028,633			1,157,693
Investment		112			—
Repayment of Borrowings from Government Trust Fund Bureau		949,880			822,932
Repayment of Borrowings from Government Post Office Life Insurance Fund		39,462			45,514
Repayment of Borrowings from Private Banks		—			9,085
Redemption of Bonds and Notes		304,032			340,607
Purchase of Premises and Equipment		108			550
Interest on Borrowings from Government Trust Fund Bureau		121,339			125,637
Interest on Borrowings from Government Post Office Life Insurance Fund		2,954			4,248
Interest on Borrowings from Private Banks		—			1
Interest on Bonds and Notes		43,035			44,616
Interest on Swaps and Miscellaneous Interest Payment		93,503			81,523
Outsourcing Costs		3,585			3,625
Administrative Expenses		15,045			15,055
Miscellaneous Expenses for Bond Issuance		199			206
Others		(11,059	)		13,373
Payment to National Treasury		36,547			38,459
TOTAL USES	¥	2,627,375		¥	2,703,124
Funds Carried Forward to the Next Fiscal Period	¥	105,346		¥	185,185

JAPAN BANK FOR INTERNATIONAL COOPERATION

BALANCE SHEET

(OVERSEAS ECONOMIC COOPERATION ACCOUNT)

	March 31, 2005			March 31, 2004
	(Millions of Yen)
ASSETS:
Cash and Cash Equivalents	¥	63,689		¥	34,677
Loans (Note 2)		11,340,485			11,325,655
Investments		155,060			153,336
Accrued Interest Income		81,328			81,255
Miscellaneous Assets		549			581
Premises and Equipment		6,902			7,218
Deferred Charges		5			10
Allowance for Possible Loan and Investment Losses		(402,946	)		(401,819	)
TOTAL ASSETS	¥	11,245,073		¥	11,200,915
LIABILITIES, CAPITAL AND RESERVES:
Liabilities :
Borrowings (Note 4):	¥	4,200,459		¥	4,365,907
Bonds and Notes		25,000			25,000
Accrued Interest Expenses		16,393			17,222
Miscellaneous Liabilities		651			2,650
TOTAL LIABILITIES		4,242,504			4,410,780
Capital (Note 5)		6,891,244			6,704,644
Reserve (Note 6)		85,491			20,667
Net Earnings for the Period		25,834			64,823
TOTAL CAPITAL AND RESERVES		7,002,569			6,790,135
TOTAL LIABILITIES, CAPITAL AND RESERVES	¥	11,245,073		¥	11,200,915

See “Notes to Financial Statements”.

JAPAN BANK FOR INTERNATIONAL COOPERATION

STATEMENT OF EARNINGS

(OVERSEAS ECONOMIC COOPERATION ACCOUNT)

	Fiscal Year Ended March 31, 2005		Fiscal Year Ended March 31, 2004
	(Millions of Yen)
Ordinary Income:
Interest on Loans	¥	259,672	¥	269,047
Dividends on Investments		3,455		2,307
Grant from General Account		30,000		30,000
Interest on Deposits in Banks		—		0
Miscellaneous Interest Received		0		0
Commissions		686		630
Foreign Exchange Gains		—		—
Interest on Securities		—		—
Other Income		317		566
Reversal of Allowance for Possible Loan and Investment Losses		401,819		401,962
Net Earnings		260,052		260,052
Total	¥	695,949	¥	704,513
Ordinary Expenses:
Interest on Borrowings	¥	103,210	¥	121,090
Interest on Bonds and Notes		740		740
Miscellaneous Interest Payment		353		—
Administrative Expenses		9,192		9,200
Depreciation of Premises and Equipment		353		395
Commissions		2,199		2,225
Foreign Exchange Losses		—		—
Write-off of Loans		146,663		103,114
Loss from Disposal of Investments		—		420
Amortization of Discounts on Bonds and Notes		5		5
Other Expenses		4,454		682
Provision for Allowance for Possible Loan and Investment Losses		402,946		401,819
		670,115		639,690
Net Earnings		25,834		64,823
Total	¥	695,949	¥	704,513

See “Notes to Financial Statements”.

JAPAN BANK FOR INTERNATIONAL COOPERATION

STATEMENTS OF CHANGES IN FINANCIAL POSITION

(OVERSEAS ECONOMIC COOPERATION ACCOUNT)

	Fiscal Year Ended March 31, 2005			Fiscal Year Ended March 31, 2004
	(millions of yen)
Funds Brought Forward from the Prior Fiscal Period	¥	34,677		¥	59,533
SOURCEOF FUNDS:
Investments from Government		186,600			200,300
Grant from Government		30,000			30,000
Long-term Borrowings from Government Trust Fund Bureau		368,900			294,500
Long-term Borrowings from Government Post Office Life Insurance Fund		—			—
Collection from Loans		515,315			515,367
Interest on Loans		232,862			228,025
Income on Securities		—			—
Interest on Deposits in Banks		—			0
Interest on Swaps and Miscellaneous Interest Received		0			0
Others		3,195			3,924
TOTAL SOURCES	¥	1,336,872		¥	1,272,117
USEOF FUNDS:
Loans		654,518			622,325
Investment		2,416			263
Repayment of Borrowings from Government Trust Fund Bureau		512,404			518,250
Repayment of Borrowings from Government Post Office Life Insurance Fund		21,944			22,060
Purchase of Premises and Equipment		66			337
Interest on Borrowings from Government Trust Fund Bureau		102,353			119,205
Interest on Borrowings from Government Post Office Life Insurance Fund		1,688			2,342
Interest on Bonds and Notes		740			740
Interest on Swaps and Miscellaneous Interest Payment		353			—
Outsourcing Costs		2,197			2,222
Administrative Expenses		9,190			9,198
Miscellaneous Expenses for Bond Issuance		2			2
Others		(11	)		28
TOTAL USES	¥	1,307,860		¥	1,296,972
Funds Carried Forward to the Next Fiscal Period	¥	63,689		¥	34,677

1. Summary of Principal Accounting Policies:

Basis of presentation

The accompanying financial statements of Japan Bank for International Cooperation (the “Bank”) are prepared in conformity with the Japan Bank for International Cooperation Law (the “JBIC Law”) and the regulations thereunder and accounting principles and practices generally accepted in Japan. The Bank was established on October 1, 1999. The Bank is the result of a merger between The Export-Import Bank of Japan (“JEXIM”) and the Overseas Economic Cooperation Fund, Japan (“OECF”).

Pursuant to the JBIC Law, the Bank’s international financial operations (succeeded from JEXIM) and overseas economic cooperation operations (succeeded from OECF) are accounted for separately in the international financial account and the overseas economic cooperation account, respectively. The Bank reports the results of operations of the Bank as a whole as well as those of its international financial account and its overseas economic cooperation account separately.

The United States dollar amounts included herein are presented solely for convenience and are stated, as a matter of arithmetical computation only, at the exchange rate effective as of the end of the fiscal year, that is, ¥109 per US$1 for the amounts as of March 31, 2005 and for the year then ended.

Translation of foreign currencies

Foreign currency loans, bonds and notes are translated into yen equivalent at the Basic Rate of Exchange (revised semi-annually by the Minister of Finance based on the market rates prevailing during the preceding six-month period), except for those covered by forward exchange contracts, which have been translated into yen equivalent at the contracted rates.

Securities

Total average cost method

Allowance for possible loan and investment losses

Pursuant to the relevant cabinet order and regulations, the Bank is required to provide an allowance for possible loan and investment losses. The proportion of such an allowance to outstanding loans and investments amount is determined by the Minister of Finance.

i) International Financial Account

The Bank provided an allowance in the amount of ¥25,499 million equal to 0.3% of outstanding loan amount as of March 31, 2005.

For loans to the poorest and most indebted countries eligible for the Naples Terms, the Bank provided a separate allowance to cover possible losses in the amount of ¥4,221 million.

In addition, for (i) loans to the countries, which are categorized as Heavily Indebted Poor Countries (“HIPCs”), which have not reached the Decision Point at the end of the fiscal year ended March 31, 2003, and (ii) loans under TDB (the Trade and Development Board) scheme, the Bank provided a separate allowance to cover possible losses in the amount of ¥2,086 million and ¥14,269 million, respectively, equal to 100% of each of the outstanding loans as of March 31, 2005.

ii) Overseas Economic Cooperation Account

For official development assistance (ODA) loans, the Bank provided an allowance in the amount of ¥1,134 million equal to 0.01% of outstanding loans as of March 31, 2005.

For loans for private-sector investment finance, the Bank provided an allowance in the amount of ¥137 million equal to 3% of outstanding loans as of March 31, 2005.

In addition, for loans to the HIPCs, which have not reached the Decision Point at the end of the fiscal year ended March 31, 2003, the Bank provided a separate allowance to cover possible losses in the amount of ¥365,378 million equal to 100% of outstanding loans as of March 31, 2005.

For investments, the Bank provided an allowance in the amount of ¥36,297 million to cover possible losses: the amount of such an allowance is calculated in proportion to the ratio of accumulated losses of each invested firm/fund to the total capital hereof.

Bank premises and equipment and depreciation

Premises and equipment are stated at cost. Depreciation has been computed by the declining-balance method for buildings (other than those acquired on or after April 1, 1998 by the Bank or its predecessors), furniture and fixtures, and by the straight-line method for intangible assets, based on the estimated useful lives as prescribed by the Corporate Tax Law of Japan. Accumulated depreciation amount is ¥18,915 million as of March 31, 2005.

Consumption tax

Consumption tax (including local consumption tax) are included in the transaction amount.

Method of amortization for deferred charges

“Discounts of bonds and notes” are amortized over terms of redemption (5, 10, 11 and 12 years), and “Bonds and notes issuance cost” are amortized over 3 years, on a straight-line basis in accordance with the regulation 293 of the Ministry of Finance dated as of September 30, 1999.

2. Loans:

Loans are stated at face value. Loans of the Bank as of March 31, 2005 consisted of the following:

	March 31, 2005		March 31, 2005
	(millions of yen)		(millions of U. S. dollars)
International financial account:
Loans in Japanese yen	¥	3,869,391	$	35,499
Loans in foreign currency		4,630,394		42,481
Subtotal	¥	8,499,785	$	77,980
Overseas economic cooperation account:
Loans in Japanese yen	¥	11,340,485	$	104,041
Loans in foreign currency		—		—
Subtotal	¥	11,340,485	$	104,041
Total loans in Japanese yen	¥	15,209,875	$	139,540
Total loans in foreign currency		4,630,394		42,481
Total loans	¥	19,840,270	$	182,021

3. Loans Past Due:

Loans of the Bank include the following non-performing loans:

	March 31, 2005
	(millions of yen)
	International Financial Account		Overseas Economic Cooperation Account		Total
Loans past due	¥	142,614	¥	373,780	¥	516,394

“Loans past due” are loans which are placed on non-accrual status if they are past due for more than six months or for other reasons in accordance with the regulation 293 of the Ministry of Finance dated as of September 30, 1999.

In the event that a debtor country requests debt restructuring with respect to external public debt, meetings of creditor countries (“The Paris Club”) will be held about debt relief measures. When creditor countries agree on debt relief measures, a rescheduled agreement between a creditor and a debtor is agreed, and repayments are made according to the agreement. Therefore, loans which are agreed on debt relief on the Paris Club are excluded from “Loans past due.” Such amount excluded from “Loan past due” and the amounts which are decided by the Japanese government to be waivered are:

	March 31, 2005
	(millions of yen)
	International Financial Account		Overseas Economic Cooperation Account		Total
Amounts agreed at the Paris Club	¥	55,827	¥	95,525	¥	151,352
Amounts decided by the Japanese government to be waived		1,475		88,282		89,757

4. Borrowings:

With respect to the Bank’s international financial account, borrowings, including borrowings due within one year, as of March 31, 2005 consisted of the following:

	March 31, 2005		March 31, 2005
	(millions of yen)		(millions of U. S. dollars)
BORROWINGS FROM:
Government Fund for Fiscal Investment and Loan Program	¥	5,263,934	$	48,293
Government Post Office Life Insurance Fund		95,342		875
Total borrowings from the Government	¥	5,359,276	$	49,168

With respect to the Bank’s overseas economic cooperation account, borrowings, including borrowings due within one year, as of March 31, 2005 consisted of the following:

	March 31, 2005		March 31, 2005
	(millions of yen)		(millions of U. S. dollars)
BORROWINGS FROM:
Government Fund for Fiscal Investment and Loan Program	¥	4,140,383	$	37,985
Government Post Office Life Insurance Fund		60,076		551
Total borrowings from the Government	¥	4,200,459	$	38,536

5. Capital:

In accordance with the provisions of the JBIC Law and regulations thereunder, the capital of the Bank as of March 31, 2005 consisted of ¥985,500 million with respect to its international financial account and ¥6,891,244 million with respect to its overseas economic cooperation account, all of which had been contributed in cash by the Government.

The Government is the sole owner of the equity interest, which is evidenced at the Registration Office of the Legal Affairs Bureau of Japan.

6. Reserve:

In accordance with the JBIC Law and the cabinet order with respect to its international financial account, the Bank is required to appropriate out of net earnings, as a reserve, up to an amount equivalent to 50% of net earnings until it reaches the same amount as the capital contributed into the international financial account. This reserve amounted to ¥676,258 million as of March 31, 2005.

The reserve so provided may only be used to cover net losses. The balance of the net earnings remaining each year, after provision for this reserve, is to be paid to the National Treasury of Japan by May 31 of the following fiscal year.

In accordance with the JBIC Law, with respect to its overseas economic cooperation account, the Bank is required to cover any loss brought forward from the previous fiscal year if, upon calculation of profit and loss of the overseas economic cooperation account for each year, there is a surplus. If there is a surplus thereafter, the Bank is required to accumulate such surplus as a reserve until it reaches the same amount as the capital contributed to the overseas economic cooperation account. Such reserve amounted to ¥85,491 million as of March 31, 2005.

Pursuant to the JBIC Law, the reserves of the international financial account and the overseas economic cooperation account can be appropriated only for such losses.

7. Debt Assumption Agreements:

Based on debt assumption agreements with financial institutions, the Bank has transferred the debt repayment obligation for certain bonds to such financial institutions. As of March 31, 2005, the Bank had contingent obligations in respect to the following bonds. Bond and note discounts for the following bonds have been amortized in a lump sum at the end of March 31, 2005.

	(millions of yen)
FILP Agency Bond 5 (*)	¥	50,000
FILP Agency Bond 7	¥	60,000
FILP Agency Bond 9	¥	50,000

(*) Fiscal Investment and Loan Program Agency Bond: Non-government guaranteed bonds issued in domestic market.

						(in millions)
Government-guaranteed bonds and notes issued in overseas markets as of March 31, 2005(1)
U.S. Dollar obligations
	6.25	%	Guaranteed Bonds due 2005 ($300) issued in 1993			¥	32,700
	6.5	%	Guaranteed Bonds due 2005 ($500) issued in 1995				54,500
	7.0	%	Guaranteed Bonds due 2009 ($1,000) issued in 1999				109,000
	7.125	%	Guaranteed Bonds due 2005 ($1,000) issued in 2000				109,000
	3 month LIBOR + 0.0625% Guaranteed Floating Rate Notes due 2006 ($1,000) issued in 2001						109,000
	4.625	%	Guaranteed Bonds due 2014 ($500) issued in 2004				54,500
	4.125	%	Guaranteed Bonds due 2010 ($750) issued in 2005				81,750
			Subtotal	($5,050	)	¥	550,450
Sterling Pound obligations
	8.0	%	Guaranteed Bonds due 2007 (STG400) issued in 1997				73,837
			Subtotal	(STG400	)	¥	73,837
Japanese yen obligations
	2.875	%	Guaranteed Bonds due 2005 (¥60,000) issued in 1995				77,168
	0.35	%	Guaranteed Bonds due 2008 (¥60,000) issued in 2003				54,949
			Subtotal	(¥120,000	)	¥	132,117
Euro obligations
	6.625	%	Guaranteed Bonds due 2007 (EUR229) issued in 1996				31,902
	5.75	%	Guaranteed Bonds due 2008 (EUR305) issued in 1997				37,982
	5.75	%	Guaranteed Bonds due 2007 (EUR511) issued in 1997				63,060
	3.25	%	Guaranteed Bonds due 2008 (EUR500) issued in 2003				61,699
	4.5	%	Guaranteed Bonds due 2013 (EUR500) issued in 2003				64,032
	4.375	%	Guaranteed Bonds due 2014 (EUR750) issued in 2004				99,408
			Subtotal	(EUR2,795	)	¥	358,085
Non-government guaranteed bonds issued in domestic market as of March 31, 2005
Japanese yen obligations
	0.51	%	FILP Agency Bonds due 2006 (¥50,000) issued in 2001			¥	50,000
	1.45	%	FILP Agency Bonds due 2011 (¥50,000) issued in 2001				50,000
	0.61	%	FILP Agency Bonds due 2007 (¥50,000) issued in 2002				50,000
	1.52	%	FILP Agency Bonds due 2012 (¥50,000) issued in 2002				50,000
	1.19	%	FILP Agency Bonds due 2012 (¥50,000) issued in 2002				50,000
	0.65	%	FILP Agency Bonds due 2013 (¥60,000) issued in 2003				60,000
	1.47	%	FILP Agency Bonds due 2013 (¥70,000) issued in 2004				70,000
	0.70	%	FILP Agency Bonds due 2009 (¥50,000) issued in 2004				50,000
	1.60	%	FILP Agency Bonds due 2014 (¥50,000) issued in 2004				50,000
	1.91	%	FILP Agency Bonds due 2019 (¥20,000) issued in 2004				20,000
	0.86	%	FILP Agency Bonds due 2009 (¥50,000) issued in 2004				50,000
	1.74	%	FILP Agency Bonds due 2014 (¥50,000) issued in 2004				50,000
	2.07	%	FILP Agency Bonds due 2019 (¥20,000) issued in 2004				20,000
			Subtotal	(¥620,000	)	¥	620,000
			Total bonds and notes			¥	1,734,488

⁽¹⁾ The actual foreign currency amounts of obligations are set forth in parentheses (in millions of units of relevant foreign currency) for foreign borrowings. Translations of actual foreign currency amounts into yen amounts have been made in accordance with the method stated in Note 1 of “Notes to Financial Statements”.

						(in millions)
Government-guaranteed bonds issued in the domestic market as of March 31, 2005
Japanese yen obligations
	3.0	%	Guaranteed Bonds due 2005 (¥15,000) issued in 1995			¥	15,000
	2.9	%	Guaranteed Bonds due 2006 (¥10,000) issued in 1996				10,000
			Subtotal	(¥25,000	)	¥	25,000
			Total bonds			¥	25,000
				($4,600	)

Non-government guaranteed bonds issued in domestic market as of March 31, 2004