Strong positions in specific areas, such as real estate finance and derivative products targeting regional financial institutions Stable interest margins and relatively high profitability thanks to growth of overseas lending as spreads narrow in the domestic market Dependence on wholesale financial markets rather than deposits for foreign-currency funding Large exposure to domestic and overseas property loans, which makes earnings susceptible to changes in real estate markets and business conditions Limited business presence compared with Japan's major banks and regional banks with high market shares in specific regions The negative outlook on Japan-based Aozora Bank Ltd. reflects our view of more than a one-in-three chance we will lower the stand-alone credit profile (SACP) on the bank within the next two years.
