Credit Quality of Financing Receivables and the Allowance for Credit Losses (Tables)

12 Months Ended

Mar. 31, 2020

Information about Allowance for Credit Losses

The following table provides information about the allowance for credit losses for fiscal 2018, 2019 and 2020:

	March 31, 2018
	Millions of yen
	Loans												Direct financing leases			Total
	Consumer			Corporate						Purchased loans*1
				Non-recourse loans			Other
Allowance for credit losses:
Beginning balance	¥	18,599		¥	2,951		¥	21,079		¥	6,061		¥	10,537		¥	59,227
Provision (Reversal)		11,922			(173	)		3,814			(539	)		2,241			17,265
Charge-offs		(9,784	)		(2,031	)		(4,643	)		(1,375	)		(2,733	)		(20,566	)
Recoveries		657			—			260			152			32			1,101
Other*2		(198	)		(59	)		(2,103	)		(7	)		12			(2,355	)
Ending balance	¥	21,196		¥	688		¥	18,407		¥	4,292		¥	10,089		¥	54,672
Individually evaluated for impairment		3,020			149			8,295			2,880			—			14,344
Not individually evaluated for impairment		18,176			539			10,112			1,412			10,089			40,328
Financing receivables:
Ending balance	¥	1,739,173		¥	73,305		¥	974,058		¥	18,933		¥	1,194,888		¥	4,000,357
Individually evaluated for impairment		18,911			3,745			19,385			5,101			—			47,142
Not individually evaluated for impairment		1,720,262			69,560			954,673			13,832			1,194,888			3,953,215

	March 31, 2019
	Millions of yen
	Loans											Direct financing leases			Total
	Consumer			Corporate					Purchased loans*1
				Non-recourse loans		Other
Allowance for credit losses :
Beginning balance	¥	21,196		¥	688	¥	18,407		¥	4,292		¥	10,089		¥	54,672
Provision (Reversal)		12,400			213		5,919			(331	)		4,324			22,525
Charge-offs		(13,115	)		0		(4,080	)		(822	)		(2,413	)		(20,430	)
Recoveries		687			0		246			126			158			1,217
Other*3		27			18		170			(79	)		(109	)		27
Ending balance	¥	21,195		¥	919	¥	20,662		¥	3,186		¥	12,049		¥	58,011
Individually evaluated for impairment		3,372			166		8,276			1,917			0			13,731
Not individually evaluated for impairment		17,823			753		12,386			1,269			12,049			44,280
Financing receivables :
Ending balance	¥	1,906,022		¥	99,028	¥	1,201,893		¥	16,416		¥	1,155,632		¥	4,378,991
Individually evaluated for impairment		23,163			4,448		27,452			3,764			0			58,827
Not individually evaluated for impairment		1,882,859			94,580		1,174,441			12,652			1,155,632			4,320,164

	March 31, 2020
	Millions of yen
	Loans												Net investment in leases			Total
	Consumer			Corporate						Purchased loans*1
				Non-recourse loans			Other
Allowance for credit losses :
Beginning balance	¥	21,195		¥	919		¥	20,662		¥	3,186		¥	12,049		¥	58,011
Provision (Reversal)		12,254			903			7,988			(24	)		3,304			24,425
Charge-offs		(13,723	)		(1	)		(6,548	)		(1,789	)		(2,859	)		(24,920	)
Recoveries		554			0			133			77			24			788
Other*3		262			(35	)		(877	)		8			(826	)		(1,468	)
Ending balance	¥	20,542		¥	1,786		¥	21,358		¥	1,458		¥	11,692		¥	56,836
Individually evaluated for impairment		3,602			228			8,950			667			0			13,447
Not individually evaluated for impairment		16,940			1,558			12,408			791			11,692			43,389
Financing receivables :
Ending balance	¥	2,171,139		¥	132,081		¥	1,296,854		¥	13,218		¥	1,080,964		¥	4,694,256
Individually evaluated for impairment		26,533			2,466			55,216			1,605			0			85,820
Not individually evaluated for impairment		2,144,606			129,615			1,241,638			11,613			1,080,964			4,608,436

Notes 1: Loans held for sale are not included in the table above.

2: New Lease Standard has been adopted since April 1, 2019, and the amounts of investment in direct financing leases have been reclassified to net investment in leases.

*1 Purchased loans represent loans with evidence of deterioration of credit quality since origination and for which it is probable at acquisition that collection of all contractually required payments from the debtors is unlikely.

*2 Other mainly includes foreign currency translation adjustments and decrease in allowance related to sales of loans.

*3 Other mainly includes foreign currency translation adjustments.

Information about Impaired Loans

The following table provides information about the impaired loans as of March 31, 2019 and 2020:

	March 31, 2019
		Millions of yen
Portfolio segment	Class	Loans individually evaluated for impairment		Unpaid principal balance		Related allowance
With no related allowance recorded *1		¥	17,593	¥	17,521	¥	0
Consumer borrowers			1,158		1,111		0
	Real estate loans		589		542		0
	Card loans		0		0		0
	Other		569		569		0
Corporate borrowers			16,329		16,304		0
Non-recourse loans	Japan		232		232		0
	The Americas		3,404		3,404		0
Other than Non-recourse loans	Real estate companies in Japan		47		47		0
	Real estate companies in overseas		840		840		0
	Commercial, industrial and other companies in Japan		975		950		0
	Commercial, industrial and other companies in overseas		10,831		10,831		0
Purchased loans			106		106		0
With an allowance recorded *2			41,234		40,234		13,731
Consumer borrowers			22,005		21,401		3,372
	Real estate loans		3,845		3,639		835
	Card loans		3,945		3,937		633
	Other		14,215		13,825		1,904
Corporate borrowers			15,571		15,175		8,442
Non-recourse loans	Japan		0		0		0
	The Americas		812		812		166
Other than Non-recourse loans	Real estate companies in Japan		1,493		1,480		419
	Real estate companies in overseas		0		0		0
	Commercial, industrial and other companies in Japan		6,129		5,748		3,703
	Commercial, industrial and other companies in overseas		7,137		7,136		4,154
Purchased loans			3,658		3,658		1,917
Total		¥	58,827	¥	57,755	¥	13,731
Consumer borrowers			23,163		22,512		3,372
	Real estate loans		4,434		4,181		835
	Card loans		3,945		3,937		633
	Other		14,784		14,394		1,904
Corporate borrowers			31,900		31,479		8,442
Non-recourse loans	Japan		232		232		0
	The Americas		4,216		4,216		166
Other than Non-recourse loans	Real estate companies in Japan		1,540		1,527		419
	Real estate companies in overseas		840		840		0
	Commercial, industrial and other companies in Japan		7,104		6,698		3,703
	Commercial, industrial and other companies in overseas		17,968		17,967		4,154
Purchased loans			3,764		3,764		1,917

	March 31, 2020
		Millions of yen
Portfolio segment	Class	Loans individually evaluated for impairment		Unpaid principal balance		Related allowance
With no related allowance recorded *1		¥	36,528	¥	36,524	¥	0
Consumer borrowers			997		995		0
	Real estate loans		584		582		0
	Card loans		0		0		0
	Other		413		413		0
Corporate borrowers			35,423		35,421		0
Non-recourse loans	The Americas		1,705		1,705		0
Other than Non-recourse loans	Real estate companies in Japan		2,268		2,267		0
	Real estate companies in overseas		11,231		11,231		0
	Commercial, industrial and other companies in Japan		8,831		8,830		0
	Commercial, industrial and other companies in overseas		11,388		11,388		0
Purchased loans			108		108		0
With an allowance recorded *2			49,292		48,936		13,447
Consumer borrowers			25,536		25,316		3,602
	Real estate loans		5,178		5,162		817
	Card loans		3,932		3,924		632
	Other		16,426		16,230		2,153
Corporate borrowers			22,259		22,123		9,178
Non-recourse loans	The Americas		761		761		228
Other than Non-recourse loans	Real estate companies in Japan		1,233		1,219		374
	Real estate companies in overseas		1,260		1,260		486
	Commercial, industrial and other companies in Japan		3,649		3,527		2,371
	Commercial, industrial and other companies in overseas		15,356		15,356		5,719
Purchased loans			1,497		1,497		667
Total		¥	85,820	¥	85,460	¥	13,447
Consumer borrowers			26,533		26,311		3,602
	Real estate loans		5,762		5,744		817
	Card loans		3,932		3,924		632
	Other		16,839		16,643		2,153
Corporate borrowers			57,682		57,544		9,178
Non-recourse loans	The Americas		2,466		2,466		228
Other than Non-recourse loans	Real estate companies in Japan		3,501		3,486		374
	Real estate companies in overseas		12,491		12,491		486
	Commercial, industrial and other companies in Japan		12,480		12,357		2,371
	Commercial, industrial and other companies in overseas		26,744		26,744		5,719
Purchased loans			1,605		1,605		667

Note: Loans held for sale are not included in the table above.

*1 “With no related allowance recorded” represents impaired loans with no allowance for credit losses as all amounts are considered to be collectible.

*2 “With an allowance recorded” represents impaired loans with the allowance for credit losses as all or a part of the amounts are not considered to be collectible.

Information about Average Recorded Investments in Impaired Loans and Interest Income

The following table provides information about the average recorded investments in impaired loans and interest income on impaired loans for fiscal 2018, 2019 and 2020:

	March 31, 2018
		Millions of yen
Portfolio segment	Class	Average recorded investments in impaired loans *		Interest income on impaired loans		Interest on impaired loans collected in cash
Consumer borrowers		¥	17,799	¥	402	¥	300
	Real estate loans		4,143		191		121
	Card loans		4,081		60		52
	Other		9,575		151		127
Corporate borrowers			30,661		204		196
Non-recourse loans	Japan		210		8		8
	The Americas		4,972		6		6
Other than Non-recourse loans	Real estate companies in Japan		3,549		52		52
	Real estate companies in overseas		2,108		1		—
	Commercial, industrial and other companies in Japan		10,698		136		129
	Commercial, industrial and other companies in overseas		9,124		1		1
Purchased loans			6,304		18		3
Total		¥	54,764	¥	624	¥	499
	March 31, 2019
		Millions of yen
Portfolio segment	Class	Average recorded investments in impaired loans *		Interest income on impaired loans		Interest on impaired loans collected in cash
Consumer borrowers		¥	20,601	¥	392	¥	356
	Real estate loans		4,099		133		129
	Card loans		4,020		59		52
	Other		12,482		200		175
Corporate borrowers			25,381		289		276
Non-recourse loans	Japan		247		7		7
	The Americas		2,851		0		0
Other than Non-recourse loans	Real estate companies in Japan		1,606		38		38
	Real estate companies in overseas		876		0		0
	Commercial, industrial and other companies in Japan		5,943		106		95
	Commercial, industrial and other companies in overseas		13,858		138		136
Purchased loans			4,678		88		87
Total		¥	50,660	¥	769	¥	719

	March 31, 2020
		Millions of yen
Portfolio segment	Class	Average recorded investments in impaired loans *		Interest income on impaired loans		Interest on impaired loans collected in cash
Consumer borrowers		¥	24,721	¥	446	¥	403
	Real estate loans		5,077		141		137
	Card loans		3,926		57		50
	Other		15,718		248		216
Corporate borrowers			37,103		121		119
Non-recourse loans	Japan		137		2		2
	The Americas		2,954		0		0
Other than Non-recourse loans	Real estate companies in Japan		1,621		30		30
	Real estate companies in overseas		5,785		0		0
	Commercial, industrial and other companies in Japan		6,754		76		75
	Commercial, industrial and other companies in overseas		19,852		13		12
Purchased loans			3,108		139		139
Total		¥	64,932	¥	706	¥	661

Note: Loans held for sale are not included in the table above.

* Average balances are calculated on the basis of fiscal beginning and quarter-end balances.

Information about Credit Quality Indicators

The following table provides information about the credit quality indicators as of March 31, 2019 and 2020:

	March 31, 2019
		Millions of yen
				Non-performing
Portfolio segment	Class	Performing		Loans individually evaluated for impairment		90+ days past-due loans not individually evaluated for impairment		Subtotal		Total
Consumer borrowers		¥	1,870,447	¥	23,163	¥	12,412	¥	35,575	¥	1,906,022
	Real estate loans		1,593,005		4,434		1,388		5,822		1,598,827
	Card loans		239,523		3,945		1,671		5,616		245,139
	Other		37,919		14,784		9,353		24,137		62,056
Corporate borrowers			1,269,021		31,900		0		31,900		1,300,921
Non-recourse loans	Japan		48,881		232		0		232		49,113
	The Americas		45,699		4,216		0		4,216		49,915
Other than Non-recourse loans	Real estate companies in Japan		287,311		1,540		0		1,540		288,851
	Real estate companies in overseas		65,358		840		0		840		66,198
	Commercial, industrial and other companies in Japan		259,572		7,104		0		7,104		266,676
	Commercial, industrial and other companies in overseas		562,200		17,968		0		17,968		580,168
Purchased loans			12,652		3,764		0		3,764		16,416
Direct Financing leases			1,140,825		0		14,807		14,807		1,155,632
	Japan		787,081		0		6,158		6,158		793,239
	Overseas		353,744		0		8,649		8,649		362,393
Total		¥	4,292,945	¥	58,827	¥	27,219	¥	86,046	¥	4,378,991

	March 31, 2020
		Millions of yen
				Non-performing
Portfolio segment	Class	Performing		Loans individually evaluated for impairment		90+ days past-due loans not individually  evaluated for impairment		Subtotal		Total
Consumer borrowers		¥	2,134,342	¥	26,533	¥	10,264	¥	36,797	¥	2,171,139
	Real estate loans		1,877,227		5,762		1,370		7,132		1,884,359
	Card loans		218,011		3,932		1,708		5,640		223,651
	Other		39,104		16,839		7,186		24,025		63,129
Corporate borrowers			1,371,253		57,682		0		57,682		1,428,935
Non-recourse loans	Japan		48,566		0		0		0		48,566
	The Americas		81,049		2,466		0		2,466		83,515
Other than Non-recourse loans	Real estate companies in Japan		297,483		3,501		0		3,501		300,984
	Real estate companies in overseas		119,403		12,491		0		12,491		131,894
	Commercial, industrial and other companies in Japan		242,831		12,480		0		12,480		255,311
	Commercial, industrial and other companies in overseas		581,921		26,744		0		26,744		608,665
Purchased loans			11,613		1,605		0		1,605		13,218
Net investment in leases			1,065,618		0		15,346		15,346		1,080,964
	Japan		741,636		0		5,971		5,971		747,607
	Overseas		323,982		0		9,375		9,375		333,357
Total		¥	4,582,826	¥	85,820	¥	25,610	¥	111,430	¥	4,694,256

Notes	1: Loans held for sale are not included in the table above.
	2: New Lease Standard has been adopted since April 1, 2019, and the amounts of investment in direct financing leases have been reclassified to net investment in leases.

Information about Nonaccrual and Past Due Financing Receivables

The following table provides information about the non-accrual and past-due financing receivables as of March 31, 2019 and 2020:

	March 31, 2019
		Millions of yen
		Past-due financing receivables
Portfolio segment	Class	30-89 days past-due		90 days or more past-due		Total past-due		Total financing receivables		Non-accrual
Consumer borrowers		¥	5,783	¥	15,647	¥	21,430	¥	1,906,022	¥	15,647
	Real estate loans		1,721		2,654		4,375		1,598,827		2,654
	Card loans		548		2,127		2,675		245,139		2,127
	Other		3,514		10,866		14,380		62,056		10,866
Corporate borrowers			4,960		13,753		18,713		1,300,921		27,979
Non-recourse loans	Japan		0		0		0		49,113		0
	The Americas		2,925		2,457		5,382		49,915		3,818
Other than Non-recourse loans	Real estate companies in Japan		0		552		552		288,851		552
	Real estate companies in overseas		2		0		2		66,198		840
	Commercial, industrial and other companies in Japan		78		4,656		4,734		266,676		4,656
	Commercial, industrial and other companies in overseas		1,955		6,088		8,043		580,168		18,113
Direct financing leases			7,181		14,807		21,988		1,155,632		14,807
	Japan		679		6,158		6,837		793,239		6,158
	Overseas		6,502		8,649		15,151		362,393		8,649
Total		¥	17,924	¥	44,207	¥	62,131	¥	4,362,575	¥	58,433
	March 31, 2020
		Millions of yen
		Past-due financing receivables
Portfolio segment	Class	30-89 days past-due		90 days or more past-due		Total past-due		Total financing receivables		Non-accrual
Consumer borrowers		¥	6,604	¥	13,607	¥	20,211	¥	2,171,139	¥	13,607
	Real estate loans		1,863		2,469		4,332		1,884,359		2,469
	Card loans		595		2,114		2,709		223,651		2,114
	Other		4,146		9,024		13,170		63,129		9,024
Corporate borrowers			3,365		26,999		30,364		1,428,935		44,622
Non-recourse loans	Japan		0		0		0		48,566		0
	The Americas		0		2,466		2,466		83,515		2,466
Other than Non-recourse loans	Real estate companies in Japan		0		586		586		300,984		586
	Real estate companies in overseas		1		12,386		12,387		131,894		12,491
	Commercial, industrial and other companies in Japan		226		2,409		2,635		255,311		2,409
	Commercial, industrial and other companies in overseas		3,138		9,152		12,290		608,665		26,670
Net investment in leases			13,702		15,346		29,048		1,080,964		15,346
	Japan		2,755		5,971		8,726		747,607		5,971
	Overseas		10,947		9,375		20,322		333,357		9,375
Total		¥	23,671	¥	55,952	¥	79,623	¥	4,681,038	¥	73,575

Notes	1: Loans held for sale are not included in the table above.
	2: New Lease Standard has been adopted since April 1, 2019, and the amounts of investment in direct financing leases have been reclassified to net investment in leases.

Information about Troubled Debt Restructurings of Financing Receivables

The following table provides information about troubled debt restructurings of financing receivables that occurred during fiscal 2018, 2019 and 2020:

	March 31, 2018
		Millions of yen
Portfolio segment	Class	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment
Consumer borrowers		¥	9,632	¥	7,015
	Real estate loans		12		12
	Card loans		2,169		1,589
	Other		7,451		5,414
Corporate borrowers			7,983		7,872
Non-recourse loans	The Americas		3,460		3,460
Other than Non-recourse loans	Commercial, industrial and other companies in Japan		111		—
Other than Non-recourse loans	Commercial, industrial and other companies in overseas		4,412		4,412
Total		¥	17,615	¥	14,887
	March 31, 2019
		Millions of yen
Portfolio segment	Class	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment
Consumer borrowers		¥	13,280	¥	9,294
	Real estate loans		222		105
	Card loans		2,106		1,393
	Other		10,952		7,796
Corporate borrowers			6,002		6,001
Other than Non-recourse loans	Commercial, industrial and other companies in overseas		6,002		6,001
Total		¥	19,282	¥	15,295

	March 31, 2020
		Millions of yen
Portfolio segment	Class	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment
Consumer borrowers		¥	12,041	¥	9,025
	Real estate loans		19		17
	Card loans		1,899		1,396
	Other		10,123		7,612
Corporate borrowers			4,785		4,779
Non-recourse loans	The Americas		751		751
Other than Non-recourse loans	Commercial, industrial and other companies in overseas		4,034		4,028
Total		¥	16,826	¥	13,804

The following table provides information about financing receivables modified as troubled debt restructurings within the previous 12 months from March 31, 2018 and for which there was a payment default during fiscal 2018:

	March 31, 2018
		Millions of yen
Portfolio segment	Class	Recorded investment
Consumer borrowers		¥	99
	Card loans		25
	Other		74
Corporate borrowers			7,872
Non-recourse loans	The Americas		3,460
Other than Non-recourse loans	Commercial, industrial other companies in overseas		4,412
Total		¥	7,971

The following table provides information about financing receivables modified as troubled debt restructurings within the previous 12 months from March 31, 2019 and for which there was a payment default during fiscal 2019:

	March 31, 2019
		Millions of yen
Portfolio segment	Class	Recorded investment
Consumer borrowers		¥	2,013
	Card loans		22
	Other		1,991
Total		¥	2,013

The following table provides information about financing receivables modified as troubled debt restructurings within the previous 12 months from March 31, 2020 and for which there was a payment default during fiscal 2020:

	March 31, 2020
		Millions of yen
Portfolio segment	Class	Recorded investment
Consumer borrowers		¥	1,687
	Card loans		22
	Other		1,665
Consumer borrowers			25
Other than Non-recourse loans	Commercial, industrial and other companies in overseas		25
Total		¥	1,712

Purchased loans

Information about Allowance for Credit Losses

Changes in the allowance for uncollectible accounts relating to the purchased loans for fiscal 2018, 2019 and 2020 are as follows:

	Millions of yen
	2018			2019			2020
Beginning balance	¥	6,061		¥	4,292		¥	3,186
Provision (Reversal)		(539	)		(331	)		(24	)
Charge-offs		(1,375	)		(822	)		(1,789	)
Recoveries		152			126			77
Other*		(7	)		(79	)		8
Ending balance	¥	4,292		¥	3,186		¥	1,458

* Other includes foreign currency translation adjustments.