Investor Presentaiton

Pattern 3 Phase of widening credit spreads (Net asset value [fair value] decrease) (Ref.) What are Non-revenue Dividends from Foreign Bond Investment Trusts? 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Σ Business Governance Asset Management Dividends are classified into revenue dividends or non-revenue dividends and paid to the Bank by each fund (quarterly). The Bank recognizes only revenue dividends as income (non-revenue dividends are accounted for as the repayment of principal). 1. Revenue dividends: Dividends that are within unrealized gains (net asset value [fair value] - individual principal [book value]>0; the same applies hereafter) 2. Non-revenue dividends: Dividends that exceed unrealized gains and are equivalent to the repayment of principal General outline of non-revenue dividends (for Sep. dividends) +100 +100 +150 Pattern 1 Phase of tightening credit spreads (Net asset value [fair value] increase) Dividends For simplicity, each fund is viewed as a single bond. gains Unrealized Dividends Bond price value Net asset Bond price principal Individual Pattern 2 1,050 +100 +70 gains Unrealized Dividends Bond price value Net asset +100 (20) Unrealized losses Dividends Bond price value Net asset Bond price principal Individual 1,000 Book value 970 Fair value at dividend payment time (Specific date in early Sep.) Revenue dividends: 70 Non-revenue dividends: 30 (Repayment of principal: 30) 1,000 Book value The amount exceeding unrealized gains 880 Fair value at dividend payment time (Specific date in early Sep.) Non-revenue dividends: 100 (Repayment of principal: 100) Non-revenue dividends are accounted for as the repayment of principal, therefore the gains and losses improve by the amount equivalent to the non-revenue dividends when investment trusts mature or contracts expire after bonds held are redeemed, unless there are defaults on bonds held, etc. or others. Bond price principal Individual Fair value at dividend payment time (Specific date in early Sep.) 1,000 Book value Revenue dividends: 100 3-month cumulative total (May-July) Note: In some cases, there are no dividends. Dividends and fund's unrealized gains and losses (as of a specific date in early Sep.) are compared to classify whether revenue dividends or non-revenue dividends. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 48

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