Sumitomo Mitsui Banking Corporation

ORIXrix Corporation

 

 

SMBC and& ORIX Collaborate on Joint Business Development of
ORIX Credit Corporation

 

 

TOKYO , Japan – May 7, 2009 ---– Sumitomo Mitsui Banking Corporation (SMBC, President: Masayuki Okuhereinafter) and ORIX Corporation (TSE: 8591; NYSE: IX; ORIX, President and COO: Yukio Yanasehereinafter) announced today that SMBC and ORIX have reachedreaching of an agreement on a joint business development of ORIX Credit Corporation (OCC, President: Masatoshi Kenmochihereinafter), pursuant to approval of relevant authorities, as follows.subject to regulatory approval.

 

1. Purpose of the Collaboration.

Consumer values and lifestyles are diversifying and demand for consumer finance remains strong. Meanwhile, the implementation of ceilings on loan interest rates and the introduction of an upper limit on aggregate borrowingsamounts are expected in the course of the regulatory reform of the consumer finance industry in Japan which will lead to further market contraction and intensification of competition.

 

SMBC and ORIX, respectively, have focused so far on the consumer finance business intensively by responding sound customers’ needs to promote the growth of Japanese consumer finance market. MeanwhileHowever, to give more influence on the changing consumer finance market, SMBC and ORIX have concluded that, in order to enhance market presence in the changing consumer finance market, it is necessarythe collaboration could become one of the drivers to of market growth expand market share and business efficiency through a new collaboration initiative between the two companies.and also promote business efficiency. Therefore, SMBC and ORIX have reached an agreement on a joint business development of OCC aiming for theconcerning expansion of both companies’ corporateshareholder value through further growth of OCC.

 

OCC, established in 1979, offers a wide-ranging varietymenu of card loan products from the viewpoint of customers, and launched. Its “VIP Card Loan” brand, launched with low interest rate and large credit line in 1987, which is mainly  targeting businessperson in their 30s and 40s with low interest rate (5.5% - 15.0%) non-secured loans. OCC, presently hasolds approximately 300 billion yen outstanding in unsecured loans for high-income customers including “VIP Card Loan” and holds the top market share (approximately 300 billion yen in loans outstanding) of the unsecured loan marketin the market with interest rate ranging from 5.5% to 15.0%.

 

 

 

Through this collaborationtie-up, OCC strives to contribute to the sound growth of Japanese consumer finance market, along with responding diversified customers’ needs by utilizing human resourcesadditional personnel and expertise of ORIX and SMBC in addition to those of ORIX on top ofbased on OCC’sits own business expertise.  　

 

2. Outline of the Collaboration.

SMBC and ORIX will collaborate with each other on following items as follows for the purpose of a joint business development of OCC.

 

(1)    By July 2009, SMBC will acquire a 51% stake in OCC from ORIX by July 2009., As a result,resulting in OCC will becomeing a consolidated subsidiary of SMBC and an equity method affiliate of ORIX.

 

(2)    SMBC will provide OCC with personnel human resources and expertise to further increase the corporate valuefor the further growth of OCC.

 

 

Contact Information:

Sumitomo Mitsui Banking Corporation, Public Relations, Tel: +81-3-5512-2681

ORIX Corporation, Corporate Communications, Tel: +81-3-5419-5102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  ○ Profile of Sumitomo Mitsui Banking Corporation

Trade Name	Sumitomo Mitsui Banking Corporation
Description of Principal Business	Banking business
Date of Incorporation	June 6, 1996
Location of Head Office	1-2, Yuraku-cho 1-chome, Chiyoda-ku, Tokyo
Name and Title of Representative	Masayuki Oku, President
Amount of Capital	JPY 664,986 million (As of September 30, 2008)
Number of Employees	22,113 (Non-Consolidated) (As of September 30, 2008)

 

  ○ Profile of ORIX Corporation

Trade Name	ORIX Corporation
Description of Principal Business	Integrated financial services
Date of Incorporation	April 17, 1964
Location of Head Office	1-23, Shiba 4-chome, Minato-ku, Tokyo
Name and Title of RepresentativeName and Title of Representative	Yukio Yanase, President and Chief Operating Officer
Amount of Capital	JPY 102,207 million (As of September 30, 2008)
Number of Employees	19,827 (Consolidated) (As of September 30, 2008)

 

  ○ Profile of ORIX Credit Corporation

Trade Name	ORIX Credit Corporation
Description of Principal Business	Loan business, shopping credit business, guarantee business
Date of Incorporation	June, 1979
Location of Head Office	22-20, Akebonochou 2-chome, Tachikawa-shi, Tokyo
Name and Title of Representative	Masatoshi Kenmochi, President
Amount of Capital	JPY 1,170 million (As of September 30, 2008)
Number of Employees	456 (As of September 30, 2008)