Response to Proposals Relating to the “Public Funds Full Repayment Plan” by Resona Holdings at the Annual Shareholders’ Meeting

Press Release

Date: June 21, 2013

Resona Holdings, Inc. (“Company”) made proposals relating to the “Public Funds Full Repayment Plan” at the annual shareholders’ meeting.

The Deposit Insurance Corporation of Japan (“DICJ”) considered the proposals based on its “Basic Policy in Exercising the Voting Right as a Shareholder,” (Note 1) and did not find any special problems. Therefore, today, the DICJ agreed to the proposals at the annual shareholders’ meeting and executed a related agreement with the Company.

Note 1: “Basic Policy in Exercising the Voting Right as a Shareholder” (December 2008)
  From the viewpoint of ensuring its own interests as a shareholder, the DICJ exercises its voting rights in an appropriate manner while giving consideration to the following points:
 
  • Does the vote contribute to maintaining the soundness of bank management ?
  • Does the vote contribute to securing a fund source for the repayment of public funds ?
  • Is the vote in accordance with the purposes of the act, such as facilitating finance, which constitute the basis of capital injection using public funds ?
  In addition, the DICJ pays attention to whether its votes are consistent with administrative policies and measures.
 

○Outline of the proposals relating to the “Public Funds Full Repayment Plan” at the annual shareholders’ meeting

 (1) Partial Amendment to the Articles of Incorporation relating to the “Public Funds Full Repayment Plan”

  • Extension of the Mandatory Acquisition Date of Early Strengthening Act Preferred Shares (Class C Preferred Shares and Class F Preferred Shares) (extension up to the date immediately following the date of the annual shareholders’ meeting regarding the fiscal year ending March 2018)
  • Payment of special preferred dividend on Early Strengthening Act Preferred Shares

    (For the next 5 years until 2018, the Company will make annual installment repayments of ¥12.0 billion for Class C Preferred Shares and ¥20.0 billion for Class F Preferred Shares. The aggregate amount of repayment of Early Strengthening Act Preferred Shares will be ¥160.0 billion.)

  • Gradual reduction(Note 2) of basic preferred dividend amount in line with the reduction of the balance of remaining Early Strengthening Act Preferred Shares
Note 2: The content of this part is to gradually reduce the basic dividend amount of preferred shares of each fiscal year by the following formula:
  Current basic preferred dividend amount × (1- Accumulated amount of special preferred dividend payments )  
¥160.0 billion

※There is no change of conversion rights into common share which the Japanese government owns.

 (2) Capitalization of Retained Earnings (Other Retained Earnings) and the Reduction of the Amount of Capital Stock and Capital Reserve

  • Other retained earnings in the amount of ¥320.0 billion will be transferred to the capital stock.
  • Capital stock in the amount of ¥610.0 billion (including ¥320.0 billion above) shall be changed and transferred into other capital surplus.
  • Capital reserve in the amount of ¥290.0 will be changed and transferred into other capital surplus. As a result, ¥900.0 billion of other capital surplus will be provided as a source for repayment of the public funds.

Each of the class shareholders’ meetings of ordinary shares, Class C Preferred Shares, Class F Preferred Shares and First Series Class Three Preferred Shares were held and the same proposal as (1) Partial Amendment to the Articles of Incorporation relating to the “Public Funds Full Repayment Plan” was proposed. The DICJ responded in the same way as at the annual shareholders’ meeting.

 

○Outline of the agreement (Agreement on Handling of Shares as Public Funds) executed

  • The outstanding balance of the public funds relating to Early Strengthening Act Preferred Shares (Class C Preferred Shares and Class F Preferred Shares) is ¥160.0 billion, and the Japanese government does not require the Company to repay the amount exceeding this amount.
  • The Japanese government does not sell Early Strengthening Act Preferred Shares to a third party so long as the repayments are continuing in accordance with the agreement on Early Strengthening Act Preferred Shares.
  • In principle, the Company will repay the outstanding repayment amount of Early Strengthening Act Preferred Shares as soon as the conditions for repayment are met such as share price rises.
  • Regarding public funds relating to Deposit Insurance Act Preferred Shares (First Series Class Three Preferred Shares), the Company will make an effort to repay ¥300.0 billion (in the amount based on the acquisition price) by the end of March 2014, and to repay the remaining balance by the end of March 2018.
 

(Reference) Outline of public funds

Class of shares Resona Holdings, Inc. ordinary shares
Total amount acquired ¥296,438,428,000(Note 3)
Number of shares acquired 570,073,900 shares(Note 4)
Acquisition price ¥520 per share
Amount currently held ¥261,696,500,000(Note 5)
Number of shares currently held 503,262,500 shares
Note 3. In June 2003, the DICJ subscribed from Resona Bank, based on the Deposit Insurance Act.
Note 4. The number of shares reflects the adjustments for consolidation of shares in August 2005 and share splitting in January 2009.
Note 5. Aggregate total of ¥34,741,928,000 was disposed in February 2005, June 2008 and December 2008.
Class of shares Resona Holidng Inc. Class C Preferred Shares
Issue amount ¥60,000,000,000(Note 6)
Number of shares issued 12,000,000 shares(Note 4)
Issue price ¥5,000 per share
Mandatory acquisition date (old) April 1, 2015
Mandatory acquisition date (new) Date immediately following the date of the annual shareholders’ meeting regarding the fiscal year ending March 2018
Class of shares Resona Holidng Inc. Class F Preferred Shares
Issue amount ¥100,000,000,000(Note 7)
Number of shares issued 8,000,000 shares(Note 4)
Issue price ¥12,500 per share
Mandatory acquisition date (old) December 1, 2014
Mandatory acquisition date (new) Date immediately following the date of the annual shareholders’ meeting regarding the fiscal year ending March 2018
Note 6. In April 2001, the Resolution and Collection Corporation (RCC) subscribed from Kinki Osaka Bank, based on the Early Strengthening Act.
Note 7. In March 1999, the RCC subscribed from the former Asahi Bank, based on the Early Strengthening Act.
Class of shares Resona Holidng Inc. First Series Class Three Preferred Shares
Issue amount ¥550,000,000,000(Note 8)
Number of shares issued 275,000,000shares(Note 4)
Issue price ¥2,000 per share
Mandatory acquisition date N/A
Amount currently held ¥450,000,000,000(Note 9)
Number of shares currently held 225,000,000 shares
Note 8. In June 2003, the DICJ subscribed from Resona Bank, based on the Deposit Insurance Act.
Note 9. In March 2011, ¥100,000,000,000 was disposed.

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