A group interview in regard to Shinsei Bank's corporate governance was conducted among Mr. Ernest M. Higa, Outside Director, Mr. Hideyuki Kudo, President and Chief Executive Officer, and Mr. Shigeki Toma, Advisor to Shinsei Bank (the previous President and Chief Executive Officer), with Mr. Ken Takamiya, a bank sector analyst at Nomura Securities Co., Ltd., serving as the moderator. (Interview was conducted in April 2015)


From left

Shigeki Toma
Advisor, Shinsei Bank
Hideyuki Kudo
President & CEO, Shinsei Bank
Ken Takamiya(Moderator)
Bank Sector Analyst Nomura Securities Co., Ltd.
Ernest M. Higa
Outside Director, Shinsei Bank

"The effects of the central bank? negative interest rate policy will require that we reconsider what kind of business model can utilize to increase corporate value."

Nakamura:As you implement the Third MTMP in an environment negatively pressured by the Bank of Japan? negative interest rate policy, what changes can stakeholders expect from Shinsei Bank. What will you change and what will remain the same, and how will they affect corporate value?

Kudo:The negative interest rate policy will have a negative effect on commercial banks. For Shinsei Bank, however, it will result in lower funding costs, as our costs have been comparatively high. We therefore hope to offset the overall negative impact on our financials as much as possible through the positive impact of lower funding costs as well as the shift of focus to businesses that generate relatively high yields. Whether those positives will translate into an increase in corporate value will depend on the magnitude of their contributions being greater than our expectations. We believe we can potentially accomplish this and in order to do so we must naturally expand revenues as we accentuate our differences with other companies and achieve the enhancement of our corporate value together with the revision of our business model. I believe the results will also enable us to provide a solid return to shareholders.

"Group integration will result in changes to our organization and corporate culture that will enable the diverse range of people working to display their individual talents and realize their potential. It is management? job to create the mechanisms and provide the leadership that will support such a working environment."

Nakamura:As you proceed with Group integration, what changes do you envision for your organization in order to enable your employees to realize their full potential and how do you anticipate your corporate culture will change?

Kiyotani:Integration is not merely a buzz word. It requires concrete action by people and the involvement of younger employees in various projects. In that sense, I believe Group integration will have a positive impact on our employees.

Watanabe:Group integration requires more than simply engineering the smooth integration of the Bank with other Group companies. I believe it is a natural progression that results from everyone? recognition that times are changing. It is management? duty to accurately read the changes taking place in the world and take proper action, which includes providing employees with educational programs and training that will encourage the natural fl ow of ideas that break down the barriers between our various business formats.

Sugie:We want to be the team that has the talented individuals on the front lines of our businesses drive business forward. We will not be able to succeed unless the people toiling on the front lines and those making decisions work directly together as a team in implementing the PDCA cycle. To form a winning team, we must seek out the most talented people in our Group, regardless of whether they come from a banking or nonbanking background and challenge them to become leaders who will advance our businesses. Also, to achieve the integration of such a highly diversified Group we must stress the importance of maintaining and enhancing diversity. I want to nurture a corporate culture in which we look for each individual? strengths and provide him or her with opportunities to use those talents.

Kudo:I think human resources is the area in which our management resources are most limited. We cannot easily increase the number of high-quality employees and staff capable of being a force in the Group. It is therefore essential that we find ways to fully utilize the resources we already have. We have people with a diverse range of talents and I want to be able to say that we have created a working environment that enables each employee to use all of his or her unique talents. We must search for the mechanisms and operations that will enable employees to utilize their full potential and move forward step by step in that direction.

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