Filed by The Bank of Yokohama, Ltd.
Pursuant to Rule 425 under the U.S. Securities Act of 1933
Subject Companies: The Bank of Yokohama, Ltd. (File Number: 132-02790) and
The Higashi-Nippon Bank, Limited (File Number: 132-02789)
Dated October 5, 2015
Filed by The Bank of Yokohama, Ltd. Pursuant to Rule 425 under the U.S. Securities Act of 1933 Subject Companies: The Bank of Yokohama, Ltd. (File Number: 132-02790) and The Higashi-Nippon Bank, Limited (File Number: 132-02789) Dated October 5, 2015 Outline of synergy measures o The new financial group aims to reduce costs by promoting streamlining of and improvements in efficiency in administration, IT systems and branches to generate personnel to place into growing areas and business fields. The two banks will also aim to complement each other using their know-how in areas in which they have strengths in order to increase transactions with small- and medium-sized enterprises and individuals in the Tokyo area. Major synergy measures Target (5 years after integration) Promote streamlining and improvements in efficiency (cost synergies) o Promote integration of administration and IT systems o Consolidate various administration centers and financial subsidiaries o Integrate market divisions and administration centers o Streamline headquarter organizations o Consolidate overlapping branches (approximately 5 branches) and convert branches to satellite branches o Introduce low-cost operations and joint purchase Cost reduction: 3 billion yen (cumulative total in 5 years: 6.7 billion yen) Shifted personnel: 200 (Reassign personnel to departments with higher earnings) Generate and shift sales personnel Strategically place personnel and funds into growing areas and business fields Reinforce recruitment of new employees Build business structure (earnings synergies) (Bank of Yokohama) Increase of transactions mainly with individuals o Open new branches individually and jointly (approximately 5 branches) and share Higashi-Nippon Bank's existing branches as a sales base (approximately 10 bases) o Strengthen consulting services to high net worth individuals o Expand introduction of customers to securities subsidiary for a fee o Strengthen card loans through expanded ATM network (Higashi-Nippon Bank) Increase of transactions mainly with small- and medium-sized enterprises o Open new branches individually and jointly (approximately 15 branches) and share Bank of Yokohama's existing branches as a sales base (approximately 5 bases) o Enhance risk-taking ability (funding capability) o Strengthen foreign exchange transactions and overseas operations through the use of overseas presence o Strengthen sales of investment products Strengthen business structure Open approx. 20 new branches (5 of which will be shared branches) Establish approx. 15 shared sales bases Loans: approx. +1 trillion yen Gross operating income: approx. +15 billion yen (cumulative total in 5 years: approx. +35 billion yen) 7 |
Management objectives for fiscal 2020 o The new financial group will aim to achieve 290 billion yen in gross operating income and 100 billion yen in profit attributable to owners of parent for fiscal 2020 by maximizing synergy achieved through the steady implementation of management strategy. Actual results for fiscal 2014 Bank of Yokohama Higashi-Nippon Bank New financial group (simple aggregation) Average balance of deposits (non-consolidated) 116,524 17,565 134,090 Average balance of loans (non-consolidated) ( ) indicates synergy impact 96,367 14,833 111,201 Gross operating income (non-consolidated) ( ) indicates amount in Tokyo ( ) indicates synergy impact 2,044(237) 318 (208)2,363 (445) Core net business profit (non-consolidated) 1,040 86 1,127 Profit attributable to owners of parent (consolidated)* 763 (669) 85 (39) 848 (708) OHR (non-consolidated) 49.1% 72.8% 52.3% ROE (consolidated)* 8.3% (7.3%) 7.8% (3.6%) 8.3% (6.9%) Total capital ratio (non-consolidated) 12.9% 9.0% 12.3% (Unit: 100 million yen) Target for fiscal 2020 New financial group Increase or Decrease (in 6 years) Compound Annual Growth Rate 160,000 +19% +2.9% 140,000 (+10,000) +25% +3.9% 2,900 (650) (+150) +22% (+46%) +3.4% (+6.5%) 1,550 +37% +5.4% 1,000 (1,000) +17% (+41%) +2.7% (+5.9%) Upper 40% - - Upper 7% - - Approx. 12% - - * The amount in ( ) excludes the impact of gains on bargain purchase and gains or losses related to stock (Shareholder return policy following the integration) The new financial group plans to follow Bank of Yokohama's current shareholder return policy. 8 |
The Higashi-Nippon Bank, Limited and The Bank of Yokohama, Ltd., or one of them, may file a registration statement on Form F-4 ("Form F-4") with the U.S. Securities and Exchange Commission (the "SEC") in connection with the possible business combination (or integration) between the two companies, if it is consummated. The Form F-4 (if filed) will contain a prospectus and other documents. If a Form F-4 is filed and declared effective, the prospectus contained in the Form F-4 will be mailed to U.S. shareholders of The Higashi-Nippon Bank, Limited and The Bank of Yokohama, Ltd., or one of them, prior to the shareholders' meeting(s) at which such business combination (or integration) will be voted upon. The Form F-4 and prospectus (if the Form F-4 is filed) will contain important information about the two companies, such business combination (or integration) and related matters. U.S. shareholders to whom the prospectus is distributed are urged to read the Form F-4, the prospectus and other documents that may be filed with the SEC in connection with such business combination (or integration) carefully before they make any decision at the respective shareholders' meeting with respect to such business combination (or integration). Any documents filed with the SEC in connection with such business combination (or integration) will be made available when filed, free of charge, on the SEC's web site at www.sec.gov. In addition, upon request, the documents can be distributed for free of charge. To make a request, please refer to the following contact information. The Bank of Yokohama, Ltd. Corporate Planning Department, Public Relations Office Tel: 045-225-1141 The Higashi-Nippon Bank, Limited Corporate Planning Department, Public Relations Office and CSR Tel: 03-3273-4073 |