Highest capital ratio among Japan's major banks Downward pressure on earnings and asset quality Relatively weak business profile Downward pressure on capital Aozora Bank Ltd.'s (BBB+/Stable/A-2) earnings are on a declining trend. Although the bank posted positive earnings after gaining independence from state control, it revised its net loss forecast for fiscal 2008 (ended March 31, 2009) substantially downward to ¥196 billion, following a net loss forecast of ¥27 billion in November 2008. The downward revision is attributable to significant losses arising from overseas investments and a substantial increase in credit costs. The bank's credit-related costs, which were negative for four consecutive fiscal years until fiscal 2007 (ended March 31, 2008) are now pressuring earnings due to the recent domestic
