Based on our analysis of the main risks described above, we have described below the main issues relating to risks to our business and other risks which we believe may have a material impact on your investment decision. Additionally, to proactively disclose information to investors, we have outlined issues that do not necessarily correspond to these risk factors, but that we believe are important to you in making an investment decision. We will endeavor, with the understanding that such risks may arise, to avoid the occurrence of such risks and to deal with such risks if they do occur.

This section contains forward-looking statements which, unless otherwise indicated, reflect our understanding as of the filing date of this annual securities report.

Risks related to our business environment

1.

Risks associated with deteriorating economic conditions in Japan and around the world

Economic conditions in Japan and around the world may deteriorate due to various factors such as
COVID-19[female[feminine pandemic and measures implemented in response to the pandemic, including restrictions on travel, store operations and other economic activities, in Japan and other countries and regions. Uncertainty over the Japanese and global economies persists not only due to the unpredictability of the timing of the containment of the COVID-19[female[feminine but also due to other factors such as concerns about political developments in the United States, concerns about the conflict between the United States and China, changes in the European economy after the withdrawal of the United Kingdom from the European Union, and economic stagnation and political unrest in various parts of the world. In addition, external events, such as earthquakes, typhoons, floods and other natural disasters, terrorism and other political and social conflicts, kidnappings and health pandemics or epidemics, can lead to deterioration of economic conditions and market instability in the affected areas.

Deteriorating economic conditions in Japan and around the world may cause, among other things, impairment or loss in value of securities and other assets we hold due to the decline in the market value of these assets, an increase of our not performing loans and credit costs due to deterioration of borrowers ?? performance of the company, a decrease in our profits due to the deterioration of the creditworthiness of counterparties in market transactions, a reduction in the liquidity of financing in foreign currencies, an increase in our costs of financing in foreign currencies and a increase in the level of risk and the balance of risky assets that we hold. Our profitability can be affected by a variety of other factors, including a decline in our net interest income caused by factors such as changes in the monetary policies of central banks in various jurisdictions. In addition, an economic downturn may lead to a decline in new investment and business transactions from customers due to stagnant economic activity, weak consumer spending, lower investor appetite. for investments in uncertain financial markets and a decrease in our assets under custody or management.

In the event of financial market turbulence or depression resulting from significant volatility in bond and stock markets or exchange rates, or from a global financial crisis, the market value of the financial instruments we hold may decline significantly, Properly quoted market prices of such instruments may become unavailable for valuation or financial markets may become dysfunctional. As a result, we may suffer write-downs or losses in value on the financial instruments in our portfolio.

Any of the above factors could have a material and adverse effect on our business, results of operations and financial condition.

2.

Risks related to external circumstances or events (such as conflicts, terrorist attacks and natural disasters)

As a major financial institution incorporated in Japan and operating in major international financial markets, our business operations, ATMs and other IT systems, staff and facilities and other physical assets are subject to the risk of earthquakes, typhoons. , floods and other natural disasters. , terrorism and other political and social conflicts, kidnappings, pandemics or health epidemics and other disruptions caused by external events, which are beyond our control. Such external events may result in the loss of facilities and human and other resources, the suspension or delay of all or part of our operations, the inability to implement strategic business measures or respond to market changes or the regulatory environment as expected; and other disruptions to our operations. In addition, we may be required to incur significant costs and expenses, including those incurred for preventive or corrective measures, to deal with the consequences of such external events. As a result, our business, results of operations and financial condition could be materially and adversely affected.

For example, the COVID-19[female[feminine the pandemic forced us to temporarily close some of our commercial sites, which resulted in a reduction of our and our suppliers ?? operational capacity due to mobility restrictions, and has had other negative impacts on us. Although we have taken various steps including the creation of a group crisis event monitoring headquarters led by our group CEO and the implementation of remote work and off-peak hours commuting policies and programs, designed to ensure the safety of our employees and suppliers as well as the continuity of our operations, should a large number or concentrated groups of employees among us and our suppliers become infected with the virus or if the pandemic continues to spread or is not sufficiently controlled, we could be further affected.

Like other Japanese companies, we are at increased risk from large-scale natural disasters, especially earthquakes. In particular, a large-scale earthquake occurring in the Tokyo metropolitan area and other areas where we perform our significant business functions could have a material adverse effect on our business, results of operations and financial condition.

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