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Credit Quality of Financial Assets and the Allowance for Credit Losses
 6 Months Ended
Sep. 30, 2024
Credit Loss [Abstract]  
Credit Quality of Financial Assets and the Allowance for Credit Losses
7.
Credit Quality of Financial Assets and the Allowance for Credit Losses
The presentation of equity method investment has been changed since fiscal 2024. The amounts of financial assets and allowance for credit losses in the previous years have been retrospectively reclassified for this change.
The Company and its subsidiaries provide the following information disaggregated by portfolio segment and class of financial assets.
 
  •  
Allowance for credit losses
 
  •  
Credit quality of financial assets
Credit quality indicators
Past-due
financing receivables
Non-accrual
 
  •  
Information about modifications of financing receivables made to debtors experiencing financial difficulty
A portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. The Company and its subsidiaries classify our portfolio segments by instruments of loans, net investment in leases and other financial assets measured at amortized cost. Classes of financial assets are determined based on the initial measurement attribute, risk characteristics of the financing receivables and the method for monitoring and assessing obligors’ credit risk and are defined as the level of detail necessary for a financial statement user to understand the risks inherent in the financial assets. Classes of financial assets generally are a disaggregation of a portfolio segment, and the Company and its subsidiaries disaggregate our portfolio segments into classes by regions, instruments or industries of our debtors.
 
The following table provides information about the allowance for credit losses for installment loans, net investment in leases and other financial assets measured at amortized cost as of March 31, 2024, and for the six months ended September 30, 2023 and 2024 :
 
   
Six months ended September 30, 2023
  
   
Millions of yen
  
   
Beginning
balance
    
Provision
(Reversal) *3
    
Allowance
of
purchased
loans

during the
reporting
period
    
Charge-offs *4
    
Recoveries
    
Other *5
    
Ending
balance
    
Collective
(pool)
assessment
    
Individual
assessment
  
Allowance for credit losses:
                  
Installment loans to consumer borrowers:
                  
Real estate loans
                  
Japan
   ¥ 4,092     ¥ (50 )    ¥ 0     ¥ (144 )    ¥ 84     ¥ 1     ¥ 3,983     ¥ 3,613     ¥ 370  
Overseas
     446       118       0       0       1       41       606       575       31  
Card loans
                  
Japan
     9,022       753       0       (450 )      8       0       9,333       8,611       722  
Other
                  
Japan
     7,759       2,970       0       (1,806 )      3       1       8,927       6,487       2,440  
Overseas
     1,889       1,370       0       (1,124 )      163       238       2,536       1,896       640  
Installment loans to corporate borrowers:
                  
Non-recourse
loans
                  
Japan
     253       (27 )      0       0       0       0       226       226       0  
The Americas
     1,494       197       0       0       0       192       1,883       837       1,046  
Other than non-recourse loans
                  
Real estate companies
                  
Japan
     777       23       0       (4 )      13       0       809       705       104  
Overseas
     1,007       (68 )      0       0       0       82       1,021       1,021       0  
Commercial, industrial and other companies
                  
Japan
     1,152       (29 )      0       (23 )      4       0       1,104       615       489  
Overseas
     19,132       434       0       (2,131 )      101       2,107       19,643       16,288       3,355  
Loans to Equity method investees
     650       90       0       0       0       82       822       410       412  
Purchased loans *1
     1,148       69       7,580       (7,612 )      1       12       1,198       511       687  
Net investment in leases:
     15,719       1,717       0       (1,234 )      17       590       16,809       12,366       4,443  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Subtotal
     64,540       7,567       7,580       (14,528 )      395       3,346       68,900       54,161       14,739  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Other financial assets measured at amortized
cost *2
     833       166       0       (178 )      5       142       968       292       676  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total
   ¥ 65,373     ¥ 7,733     ¥ 7,580     ¥ (14,706 )    ¥ 400     ¥   3,488      ¥ 69,868     ¥ 54,453     ¥ 15,415  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
 
  
March 31, 2024
 
 
  
Millions of yen
 
 
  
Ending
balance 
 
  
Collective
(pool)
assessment
 
  
Individual
assessment
 
Allowance for credit losses:
  
  
  
Installment loans to consumer borrowers:
  
  
  
Real estate loans
  
  
  
Japan
    ¥ 3,203      ¥ 2,893      ¥ 310  
Overseas
      581        526        55  
Card loans
                         
Japan
      12        12        0  
Other
                         
Japan
      91        6        85  
Overseas
      3,060        1,762        1,298  
Installment loans to corporate borrowers:
                         
Non-recourse
loans
                         
Japan
      429        429        0  
The Americas
      1,718        660        1,058  
Other than non-recourse loans
                         
Real estate companies
                         
Japan
      975        889        86  
Overseas
      1,549        1,045        504  
Commercial, industrial and other companies
                         
Japan
      857        722        135  
Overseas
      25,824        16,061        9,763  
Loans to Equity method investees
      878        422        456  
Purchased loans *1
      1,133        548        585  
Net investment in leases:
      16,780        10,866        5,914  
  
 
 
     
 
 
     
 
 
  
Subtotal
      57,090        36,841        20,249  
  
 
 
     
 
 
     
 
 
  
Other financial assets measured at amortized cost *2
      1,020        321        699  
  
 
 
     
 
 
     
 
 
  
Total
    ¥ 58,110      ¥ 37,162      ¥ 20,948  
  
 
 
     
 
 
     
 
 
  
 
   
Six months ended September 30, 2024
  
   
Millions of yen
  
   
Beginning
balance
    
Provision
(Reversal) *3
    
Allowance
of
purchased
loans

during the
reporting
period
    
Charge-offs *4
    
Recoveries
    
Other *5
    
Ending
balance
    
Collective
(pool)
assessment
    
Individual
assessment
  
Allowance for credit losses:
                  
Installment loans to consumer borrowers:
                  
Real estate loans
                  
Japan
   ¥ 3,203     ¥ 68     ¥ 0     ¥ (44 )    ¥ 35     ¥ 1     ¥ 3,263     ¥ 2,972     ¥ 291  
Overseas
     581       359       0       0       0       (49 )      891       432       459  
Card loans
                  
Japan
     12       (8 )      0       0       7       1       12       12       0  
Other
                  
Japan
     91       (2 )      0       0       4       (2 )      91       6       85  
Overseas
     3,060       1,815       0       (2,131 )      223       (121 )      2,846       1,457       1,389  
Installment loans to corporate borrowers:
                  
Non-recourse
loans
                  
Japan
     429       156       0       0       0       0       585       585       0  
The Americas
     1,718       445       0       0       0       (127 )      2,036       1,038       998  
Other than non-recourse loans
                  
Real estate companies
                  
Japan
     975       58       0       0       13       (2 )      1,044       961       83  
Overseas
     1,549       361       0       0       0       (130 )      1,780       626       1,154  
Commercial, industrial and other companies
                  
Japan
     857       496       0       (125 )      16       0       1,244       773       471  
Overseas
     25,824       (1,509 )      0       (2,433 )      24       (3,507 )      18,399       11,492       6,907  
Loans to Equity method investees
     878       1,410       0       (37 )      0       (173 )      2,078       420       1,658  
Purchased loans *1
     1,133       7       597       (608 )      1       (10 )      1,120       530       590  
Net investment in leases:
     16,780       1,833       0       (1,120 )      37       (131 )      17,399       10,945       6,454  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Subtotal
     57,090       5,489       597       (6,498 )      360       (4,250 )      52,788       32,249       20,539  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Other financial assets measured at amortized cost *2
     1,020       91       0       (122 )      9       (30 )      968       268       700  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total
   ¥ 58,110     ¥ 5,580     ¥ 597     ¥ (6,620 )    ¥ 369     ¥ (4,280 )    ¥ 53,756     ¥ 32,517     ¥ 21,239  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
 
Note:
  
  
Loans held for sale and policy loan receivables of an insurance entity are not in the scope of allowance for credit losses.
 
*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
The allowance for other financial assets measured at amortized cost includes the allowance for credit losses on financing receivables, such as accounts receivable. Other financial assets measured at amortized cost are mainly “Trade notes, accounts and other receivables” on the consolidated balance sheets.
*3
“Provision for credit losses” in the consolidated statements of income amounted to provisions of ¥8,616 million and ¥7,319 million during the six months ended September 30, 2023 and 2024. The reconciliation between the above table and the amounts reported on the consolidated statements of income during the six months ended September 30, 2023 and 2024 are as follows:
 
    
Millions of yen
  
    
Six months
ended
September 30,
2023
     
Six months
ended
September 30,
2024
  
    
Provision for
credit losses
     
Provision for
credit losses
  
Net investment in leases
    ¥ 1,717      ¥ 1,833  
Installment loans
      5,850        3,656  
  
 
 
     
 
 
  
Subtotal in the above table
      7,567        5,489  
  
 
 
     
 
 
  
Other financial assets measured at amortized cost
      166        91  
  
 
 
     
 
 
  
Total in the above table
      7,733        5,580  
  
 
 
     
 
 
  
Off-balance
sheet credit exposures *3(a)
      591        1,673  
Available-for-sale
debt securities *3(b)
      292        66  
  
 
 
     
 
 
  
Amount reported on the consolidated financial statements
    ¥ 8,616      ¥ 7,319  
  
 
 
     
 
 
  
 
  *3(a)
The allowance for
off-balance
sheet credit exposure were ¥5,116 million and ¥6,010 million as of March 31, 2024 and September 30, 2024, respectively, and the amounts are recorded in “Other liabilities” on the consolidated balance sheets. For further information, see Note 24 “Commitments, Guarantees and Contingent Liabilities.”
  *3(b)
The allowance for
available-for-sale
debt securities were ¥634 million and ¥540 
million as of March 31, 2024 and September 30, 2024, respectively, and the amounts are recorded as a reduction in “Investment in securities” on the consolidated balance sheets. For further information, see Note 8 “Investment in Securities.” 
*4
Included in
Charge-off
in write-offs of purchased loans were ¥7,580 million and ¥597 million during the six months ended September 30, 2023 and 2024.
*5
Other mainly includes foreign currency translation adjustments and increases or decreases in allowance due to consolidation or deconsolidation of subsidiaries.
The following table provides information about purchased loans which were acquired for the six months ended September 30, 2023 and 2024:
 
    
Six months ended
September 30, 2023
     
Six months ended
September 30, 2024
  
Purchase price
    ¥ 1,281      ¥ 1,129  
Allowance for credit losses at acquisition date
      7,580        597  
Discount or premium attributable to other factors
      125        251  
  
 
 
     
 
 
  
Par value
    ¥ 8,986      ¥ 1,977  
  
 
 
     
 
 
  
 
The Company and its subsidiaries estimate an allowance for credit losses for all credit losses expected to occur in future over the remaining life of financial assets, and recognize the allowance adequately based on management judgement. In developing the allowance for credit losses, the Company and its subsidiaries consider, among other things, the following factors in collective assessment and individual assessment by each portfolio:
 
  •  
business characteristics and financial conditions of obligors;
 
  •  
prior
charge-off
experience;
 
  •  
current delinquencies and delinquency trends;
 
  •  
value of underlying collateral and guarantees; and
 
  •  
current economic and business conditions and expected outlook in future.
The Company and its subsidiaries manage credit risk using various indicators specific to the region, industry, and types of assets, in accordance with the group risk management policy. For credit transactions, the basic group policy is to obtain sufficient collateral and guarantees, and to diversify industries and borrowers, and the Company and its subsidiaries comprehensively evaluate and monitor the financial condition and cash flows of borrowers, underlying collateral and guarantees, and profitability. The Company and its subsidiaries also manage exposure to potentially high-risk markets by establishing appropriate credit limits through portfolio analysis.
Due to the diversity of assets and risk indicators held by the Company and its subsidiaries, the Company and its subsidiaries monitor the credit quality indicators as performing and
non-performing
assets as indicators that are common across all classes. The category of
non-performing
assets includes financing receivables for debtors who have filed for insolvency proceedings, whose bank transactions are suspended, whose bills are dishonored, whose businesses have deteriorated, whose repayment is
past-due
90 days or more, financing receivables modified to debtors experiencing financial difficulty, and performing assets include all other financing receivables. Regarding purchased loans, they are classified as
non-performing
assets when it is probable that the acquisition cost of purchased loans cannot be collected, while all the other purchased loans are included in the category of performing assets.
When certain performing financial assets mainly have similar risk characteristics to other financial assets, the performing financial assets are collectively evaluated as a pool. On the contrary, when financial assets do not have similar risk characteristics to other financial assets, the financial assets are evaluated individually.
Loans to consumer borrowers
Loans to consumer borrowers mainly consist of real estate loans and card loans.
The credit quality of real estate loans is affected by the cash flows derived from the property and its collateral value.
The credit quality of card loans is affected by the repayment ability of customers such as customer credit standing or payment history.
The Company and its subsidiaries use these factors to estimate the allowance for credit losses because they are reflected in the probability of default and loss given default in each portfolio.
Loans to corporate borrowers
Loans to corporate borrowers are classified into
non-recourse
loans and loans other than
non-recourse
loans.
The credit quality of
non-recourse
loans for which cash flows from real estate are the source of repayment depends mainly on the real estate collateral value.
Loans other than
non-recourse
loans are classified into either real estate companies or commercial, industrial and other companies, each of which are further divided into Japan and overseas.
The credit quality of real estate companies is affected by mainly Japanese and Americas real estate markets and trends.
The credit quality of commercial, industrial and other companies, which consist of various industries, is affected mainly by broader financial and economic conditions and trends in Japan, the Americas and Asian countries.
The allowance for credit losses for loans to corporate borrowers is estimated by considering, among others, debtors’ situation, as well as economic conditions and trends in its industries, the value of underlying collateral and guarantees, and probability of default and loss given default.
 
Loans to equity method investees
Equity method investees are diversified in various industries and countries. The credit quality of loans to equity method investees is affected mainly by broader financial and economic conditions and trends in Japan, the Americas and Asian countries.
The allowance for credit losses for loans to equity method investees is estimated by considering, among others, debtors’ situation, as well as economic conditions and trends in its industries, the value of underlying collateral and guarantees, and probability of default and loss given default.
Net investment in leases
Net investment in leases consists of leases of various equipment types, including office equipment, industrial machinery, transportation equipment and real estate properties. The allowance for credit losses for net investment in leases is estimated based on the value of the underlying leased assets, debtors’ situation, economic conditions and trends in its industries, and probability of default and loss given default.
In common with portfolio segments, the forecasted future economic indicators correlated with the prior
charge-off
experience are reflected to the estimate of the allowance for credit losses. Economic indicators correlated with prior
charge-off
experience are determined over the reasonable and supportable forecasted period. Economic indicators include GDP growth rates, consumer price indices, unemployment rates, and government bond interest rates. It also considers forward-looking scenarios of how the selected economic indicators will change in the future. The Company and its subsidiaries use the latest economic forecasts available from the economic reports published by governments and central banks, as well as from third-party information providers as economic indicators.
On the other hand, for periods beyond which the Company and its subsidiaries are able to make or obtain reasonable and supportable forecasts of future economic indicators of the entire life of the financial asset, expected credit losses are estimated for the remaining life mainly using an appropriate reversion approach, mainly immediate reversion to historical credit loss information.
There have been no significant changes during the six months ended September 30, 2024 to methodologies and economic indicators used to estimate the allowance for Credit Losses.
When
non-performing
financial assets with deteriorated credit quality have similar risk characteristics to other financial assets, the allowance for credit losses is collectively evaluated based on mainly loss given default. On the other hand, if the
non-performing
financial assets do not have similar risk characteristics to other financial assets, the allowance for credit losses is individually evaluated.
In the individual assessment the allowance for credit losses is estimated individually based on the present value of expected future cash flows, the observable market price or the fair value of the collateral securing the financing receivables if the financing receivables are collateral-dependent.
The collateral-dependent financing receivables are defined as the finance receivables, which a debtor would be in financial difficulty and the collection significantly depend on the collateral. These financing receivables are mainly
non-recourse
loans and purchased loans for which cash flows from underlying real estate is the source of repayment.
For
non-recourse
loans, their collection depends on the real estate collateral value, which may decline as a result of a decrease in liquidity of the real estate market, a rise in vacancy rate of rental properties, a fall in rents and other factors.
For purchased loans, their collection may decrease due to a decline in the real estate collateral value and debtors’ creditworthiness. Thus, the changes in these risks affect the amount of the allowance for credit losses.
In common with all portfolio segments, the Company and its subsidiaries charge off doubtful receivables when the likelihood of any future collection is believed to be minimal, mainly based upon an evaluation of the relevant debtors’ creditworthiness and the liquidation status of collateral.
 
The following table provides information about the origination years of financial assets as of March 31, 2024 and the gross write-offs recorded during the six months ended September 30, 2023. Card loans to consumer borrowers with a revolving repayment feature that cannot be classified into the origination year are excluded from the table.
 
March 31, 2024
  
Millions of yen
  
Portfolio segment
   
Origination year (years ended March 31)
     
Total
  
Class
       
Credit Quality
   
2024
     
2023
     
2022
     
2021
     
2020
     
Prior
  
Consumer borrowers:
                     
Performing
    ¥    245,106      ¥    200,373      ¥    165,337      ¥    248,395      ¥    334,364      ¥    788,888      ¥  1,982,463  
Non-Performing
      1,139        1,224        607        292        500        11,871      ¥ 15,633  
Real estate loans
                     
Performing
      219,407        182,697        161,632        247,905        334,009        788,635      ¥ 1,934,285  
Non-Performing
      109        22        508        281        486        11,770      ¥ 13,176  
Other*
                     
Performing
      25,699        17,676        3,705        490        355        253      ¥ 48,178  
Non-Performing
      1,030        1,202        99        11        14        101      ¥ 2,457  
Corporate borrowers:
                     
Performing
      484,932        236,795        276,776        96,684        121,132        183,404      ¥ 1,399,723  
Non-Performing
      5,144        3,346        26,661        5,255        6,705        23,023      ¥ 70,134  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Non-recourse
loans
                     
Japan
                     
Performing
      97,099        22,621        10,572        6,713        1,266        7,015      ¥ 145,286  
The Americas
                     
Performing
      11,804        9,077        1,742        151        16,862        7,512      ¥ 47,148  
Non-Performing
      0        68        0        0        0        3,047      ¥ 3,115  
Other than
non-recourse
loans
                     
Real estate companies in Japan
                     
Performing
      143,553        57,185        28,355        22,836        22,907        58,195      ¥ 333,031  
Non-Performing
      37        0        0        9        656        773      ¥ 1,475  
Real estate companies in overseas
                     
Performing
      4,334        16,493        9,972        2,764        3,352        4,663      ¥ 41,578  
Non-Performing
      489        581        4,444        515        2,205        9,947      ¥ 18,181  
 
March 31, 2024
  
Millions of yen
  
Portfolio segment
   
Origination year (years ended March 31)
     
Total
  
Class
                                          
Credit Quality
   
2024
     
2023
     
2022
     
2021
     
2020
     
Prior
  
Commercial, industrial and other companies in Japan
                     
Performing
   
 
95,090
 
   
 
29,538
 
   
 
18,606
 
   
 
11,920
 
   
 
10,619
 
   
 
14,566
 
   
¥
180,339
 
Non-Performing
   
 
2
 
   
 
80
 
   
 
31
 
   
 
93
 
   
 
38
 
   
 
313
 
   
¥
557
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Commercial, industrial and other companies in overseas
                     
Performing
   
 
133,052
 
   
 
101,881
 
   
 
207,529
 
   
 
52,300
 
   
 
66,126
 
   
 
91,453
 
   
¥
652,341
 
Non-Performing
   
 
4,616
 
   
 
2,617
 
   
 
22,186
 
   
 
4,638
 
   
 
3,806
 
   
 
8,943
 
   
¥
46,806
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Loans to Equity method investees:
                     
Performing
   
 
133,587
 
   
 
27,874
 
   
 
72,407
 
   
 
2,091
 
   
 
58
 
   
 
13,983
 
   
¥
250,000
 
Non-Performing
   
 
0
 
   
 
230
 
   
 
327
 
   
 
0
 
   
 
0
 
   
 
1,372
 
   
¥
1,929
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Purchased loans:
                     
Performing
   
 
145
 
   
 
16
 
   
 
590
 
   
 
227
 
   
 
4,670
 
   
 
13,445
 
   
¥
19,093
 
Non-Performing
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
880
 
   
¥
880
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Net investment in leases:
                     
Performing
   
 
475,594
 
   
 
291,724
 
   
 
159,885
 
   
 
81,835
 
   
 
56,625
 
   
 
68,555
 
   
¥
1,134,218
 
Non-Performing
   
 
4,406
 
   
 
4,891
 
   
 
2,992
 
   
 
1,529
 
   
 
1,368
 
   
 
5,619
 
   
¥
20,805
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Japan
                     
Performing
   
 
199,864
 
   
 
139,133
 
   
 
100,905
 
   
 
67,932
 
   
 
46,911
 
   
 
64,436
 
   
¥
619,181
 
Non-Performing
   
 
213
 
   
 
585
 
   
 
886
 
   
 
776
 
   
 
657
 
   
 
1,796
 
   
¥
4,913
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Overseas
                     
Performing
   
 
275,730
 
   
 
152,591
 
   
 
58,980
 
   
 
13,903
 
   
 
9,714
 
   
 
4,119
 
   
¥
515,037
 
Non-Performing
   
 
4,193
 
   
 
4,306
 
   
 
2,106
 
   
 
753
 
   
 
711
 
   
 
3,823
 
   
¥
15,892
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total (excluding revolving repayment card loans)
                     
Performing
   
¥
 1,339,364
 
   
¥
   756,782
 
   
¥
   674,995
 
   
¥
   429,232
 
   
¥
   516,849
 
   
¥
 1,068,275
 
   
¥
 4,785,497
 
Non-Performing
   
¥
10,689
 
   
¥
9,691
 
   
¥
30,587
 
   
¥
7,076
 
   
¥
8,573
 
   
¥
42,765
 
   
¥
109,381
 
 
                
                
                
                
                
                
                
Six months ended September 30, 2023
  
Millions of yen
  
    
Gross write-offs
  
Portfolio segment
   
Origination year (years ended March 31)
     
Total
  
Class
   
2024
     
2023
     
2022
     
2021
     
2020
     
Prior
  
Consumer borrowers:
   
 
136
 
   
 
1,770
 
   
 
736
 
   
 
154
 
   
 
103
 
   
 
175
 
   
¥
3,074
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Real estate loans
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
144
 
   
¥
144
 
Other*
   
 
136
 
   
 
1,770
 
   
 
736
 
   
 
154
 
   
 
103
 
   
 
31
 
   
¥
2,930
 
Corporate borrowers:
   
 
101
 
   
 
4
 
   
 
225
 
   
 
73
 
   
 
112
 
   
 
1,643
 
   
¥
2,158
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Other than non-recourse loans
                     
Real estate companies in Japan
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
4
 
   
 
0
 
   
¥
4
 
Commercial, industrial and other companies in Japan
   
 
0
 
   
 
1
 
   
 
0
 
   
 
0
 
   
 
22
 
   
 
0
 
   
¥
23
 
Commercial, industrial and other companies in overseas
   
 
101
 
   
 
3
 
   
 
225
 
   
 
73
 
   
 
86
 
   
 
1,643
 
   
¥
2,131
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Purchased loans:
   
 
0
 
   
 
409
 
   
 
226
 
   
 
29
 
   
 
206
 
   
 
6,742
 
   
¥
7,612
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Net investment in leases:
   
 
0
 
   
 
7
 
   
 
409
 
   
 
234
 
   
 
139
 
   
 
445
 
   
¥
1,234
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Japan
   
 
0
 
   
 
5
 
   
 
36
 
   
 
52
 
   
 
80
 
   
 
327
 
   
¥
500
 
Overseas
   
 
0
 
   
 
2
 
   
 
373
 
   
 
182
 
   
 
59
 
   
 
118
 
   
¥
734
 
Total (excluding revolving repayment card loans)
   
 
237
 
   
 
2,190
 
   
 
1,596
 
   
 
490
 
   
 
560
 
   
 
9,005
 
   
¥
14,078
 
 
The following table provides information about the origination years of financial assets as of September 30, 2024 and the gross write-offs, corresponding to each class of financial assets by origination year, recorded during the six months ended September 30, 2024. Card loans to consumer borrowers with a revolving repayment feature that cannot be classified into the origination year are excluded from the table.
 
September 30, 2024
  
Millions of yen
  
Portfolio segment
   
Origination year (years ended March 31)
     
Total
  
Class
       
Credit Quality
   
2025
     
2024
     
2023
     
2022
     
2021
     
Prior
  
Consumer borrowers:
                     
Performing
    ¥ 214,268      ¥ 172,591      ¥ 180,441      ¥ 152,598      ¥ 237,617      ¥ 1,028,903      ¥ 1,986,418  
Non-Performing
      375        1,638        1,794        2,171        430        12,081      ¥ 18,489  
Gross write-offs
      213        928        897        80        6        51      ¥ 2,175  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Real estate loans
                     
Performing
      202,960        155,607        168,911        150,581        237,371        1,028,619      ¥ 1,944,049  
Non-Performing
      192        511        863        2,111        424        11,986      ¥ 16,087  
Gross write-offs
      0        0        0        0        0        44      ¥ 44  
Other*
                     
Performing
      11,308        16,984        11,530        2,017        246        284      ¥ 42,369  
Non-Performing
      183        1,127        931        60        6        95      ¥ 2,402  
Gross write-offs
      213        928        897        80        6        7      ¥ 2,131  
Corporate borrowers:
                     
Performing
      387,077        328,812        175,254        195,140        59,520        210,201      ¥ 1,356,004  
Non-Performing
      1,375        7,826        9,349        25,504        8,315        29,370      ¥ 81,739  
Gross write-offs
      0        43        35        2,329        14        137      ¥ 2,558  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Non-recourse
loans
                     
Japan
                     
Performing
      108,750        63,510        18,066        7,076        0        6,752      ¥ 204,154  
Gross write-offs
      0        0        0        0        0        0      ¥ 0  
The Americas
                     
Performing
      23,628        15,043        10,720        2,089        145        10,403      ¥ 62,028  
Non-Performing
      0        0        64        0        0        5,197      ¥ 5,261  
Gross write-offs
      0        0        0        0        0        0      ¥ 0  
 
September 30, 2024
  
Millions of yen
  
Portfolio segment
   
Origination year (years ended March 31)
     
Total
  
Class
       
Credit Quality
   
2025
     
2024
     
2023
     
2022
     
2021
     
Prior
  
Other than non-recourse loans
                     
Real estate companies in Japan
                     
Performing
   
 
100,107
 
   
 
96,409
 
   
 
47,681
 
   
 
25,418
 
   
 
20,547
 
   
 
74,415
 
   
¥
364,577
 
Non-Performing
   
 
0
 
   
 
0
 
   
 
32
 
   
 
0
 
   
 
9
 
   
 
641
 
   
¥
682
 
Gross write-offs
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
¥
0
 
Real estate companies in overseas
                     
Performing
   
 
9,118
 
   
 
2,722
 
   
 
10,456
 
   
 
4,958
 
   
 
1,299
 
   
 
7,383
 
   
¥
35,936
 
Non-Performing
   
 
78
 
   
 
685
 
   
 
6,363
 
   
 
7,054
 
   
 
977
 
   
 
14,035
 
   
¥
29,192
 
Gross write-offs
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
¥
0
 
Commercial, industrial and other companies in Japan
                     
Performing
   
 
62,419
 
   
 
61,058
 
   
 
25,078
 
   
 
14,380
 
   
 
10,658
 
   
 
21,038
 
   
¥
194,631
 
Non-Performing
   
 
420
 
   
 
10
 
   
 
132
 
   
 
30
 
   
 
87
 
   
 
131
 
   
¥
810
 
Gross write-offs
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
6
 
   
 
119
 
   
¥
125
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Commercial, industrial and other companies in overseas
                     
Performing
   
 
83,055
 
   
 
90,070
 
   
 
63,253
 
   
 
141,219
 
   
 
26,871
 
   
 
90,210
 
   
¥
494,678
 
Non-Performing
   
 
877
 
   
 
7,131
 
   
 
2,758
 
   
 
18,420
 
   
 
7,242
 
   
 
9,366
 
   
¥
45,794
 
Gross write-offs
   
 
0
 
   
 
43
 
   
 
35
 
   
 
2,329
 
   
 
8
 
   
 
18
 
   
¥
2,433
 
Loans to Equity method investees:
                     
Performing
   
 
438
 
   
 
112,903
 
   
 
2,807
 
   
 
0
 
   
 
1,824
 
   
 
14,467
 
   
¥
132,439
 
Non-Performing
   
 
0
 
   
 
0
 
   
 
217
 
   
 
3,247
 
   
 
0
 
   
 
1,284
 
   
¥
4,748
 
Gross write-offs
   
 
0
 
   
 
0
 
   
 
0
 
   
 
37
 
   
 
0
 
   
 
0
 
   
¥
37
 
Purchased loans:
                     
Performing
   
 
0
 
   
 
16
 
   
 
16
 
   
 
568
 
   
 
289
 
   
 
16,286
 
   
¥
17,175
 
Non-Performing
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
0
 
   
 
951
 
   
¥
951
 
Gross write-offs
   
 
0
 
   
 
0
 
   
 
0
 
   
 
57
 
   
 
255
 
   
 
296
 
   
¥
608
 
Net investment in leases:
                     
Performing
   
 
252,115
 
   
 
387,147
 
   
 
227,595
 
   
 
118,781
 
   
 
61,849
 
   
 
89,491
 
   
¥
1,136,978
 
Non-Performing
   
 
2,097
 
   
 
5,298
 
   
 
5,134
 
   
 
2,605
 
   
 
1,186
 
   
 
6,050
 
   
¥
22,370
 
Gross write-offs
   
 
0
 
   
 
120
 
   
 
337
 
   
 
218
 
   
 
151
 
   
 
294
 
   
¥
1,120
 
Japan
                     
Performing
   
 
104,398
 
   
 
167,171
 
   
 
119,297
 
   
 
83,232
 
   
 
53,143
 
   
 
81,489
 
   
¥
608,730
 
Non-Performing
   
 
34
 
   
 
405
 
   
 
702
 
   
 
887
 
   
 
632
 
   
 
2,018
 
   
¥
4,678
 
Gross write-offs
   
 
0
 
   
 
3
 
   
 
49
 
   
 
97
 
   
 
122
 
   
 
250
 
   
¥
521
 
Overseas
                     
Performing
   
 
147,717
 
   
 
219,976
 
   
 
108,298
 
   
 
35,549
 
   
 
8,706
 
   
 
8,002
 
   
¥
528,248
 
Non-Performing
   
 
2,063
 
   
 
4,893
 
   
 
4,432
 
   
 
1,718
 
   
 
554
 
   
 
4,032
 
   
¥
17,692
 
Gross write-offs
   
 
0
 
   
 
117
 
   
 
288
 
   
 
121
 
   
 
29
 
   
 
44
 
   
¥
599
 
Total (excluding revolving repayment card loans)
                     
Performing
   
¥
853,898
 
   
¥
1,001,469
 
   
¥
586,113
 
   
¥
467,087
 
   
¥
361,099
 
   
¥
1,359,348
 
   
¥
4,629,014
 
Non-Performing
   
 
3,847
 
   
 
14,762
 
   
 
16,494
 
   
 
33,527
 
   
 
9,931
 
   
 
49,736
 
   
¥
128,297
 
Gross write-offs
   
 
213
 
   
 
1,091
 
   
 
1,269
 
   
 
2,721
 
   
 
426
 
   
 
778
 
   
¥
6,498
 
 
Note: Loans held for sale, policy loan receivables of an insurance entity and financing receivables, such as accounts receivable are not included in the table above.
 
*
Other in loans to consumer borrowers includes claims receivable arising from payments on guarantee of consumer loans. For further information, see Note 24 “Commitments, Guarantees and Contingent Liabilities.”
 
The information about card loans to consumer borrowers with a revolving repayment feature that cannot be classified into the origination year as of March 31, 2024 and the gross write-offs recorded during six months ended September 30, 2023 is as follows:
 
   
March 31, 2024
  
   
Millions of yen
  
Portfolio segment
  
Revolving repayment
card loans
    
Modification of
collection condition
by relief of contract
condition
     
Total—revolving
repayment card
loans
     
Total—

origination year

(excluding revolving

repayment card
loans)
     
Total—

financial assets
measured at amortized
cost
  
Credit quality
             
Consumer borrowers:
             
Performing
   ¥ 72,353     ¥ 0      ¥ 72,353      ¥ 4,785,497      ¥ 4,857,850  
            
 
 
  
Non-Performing
     0       0        0        109,381      ¥ 109,381  
            
 
 
  
 
   
Six months ended September 30, 2023
  
   
Millions of yen
  
   
Gross write-offs
  
Portfolio segment
  
Revolving repayment
card loans
    
Modification of
collection condition
by relief of contract
condition
     
Total—revolving
repayment card
loans
     
Total—

origination year

(excluding revolving

repayment card
loans)
     
Total—

financial assets
measured at amortized
cost
  
Consumer borrowers:
   ¥ 375     ¥ 75      ¥ 450      ¥ 14,078      ¥ 14,528  
            
 
 
  
The information about card loans to consumer borrowers with a revolving repayment feature that cannot be classified into the origination year as of September 30, 2024 and the gross write-offs, corresponding to card loans, recorded during the six months ended September 30, 2024 is as follows:
 
   
September 30, 2024
  
   
Millions of yen
  
Portfolio segment
  
Revolving repayment
card loans
    
Modification of
collection condition
by relief of contract
condition
     
Total—revolving
repayment card
loans
     
Total—

origination year

(excluding revolving

repayment card
loans)
     
Total—

financial assets
measured at amortized
cost
  
Credit quality
             
Consumer borrowers:
             
Performing
   ¥ 69,436     ¥ 0      ¥ 69,436      ¥ 4,629,014      ¥ 4,698,450  
            
 
 
  
Non-Performing
     0       0        0        128,297      ¥ 128,297  
            
 
 
  
Gross write-offs
     0       0        0        6,498      ¥ 6,498  
            
 
 
  
Of
non-performing
assets, the Company and its subsidiaries consider smaller balance homogeneous loans (including real estate loans and card loans, among others, which are not restructured) and net investment in leases as the 90 days or more
past-due
financing receivables not individually evaluated, and consider all others as the loans individually evaluated. After the Company and its subsidiaries have set aside a provision for those
non-performing
assets, the Company and its subsidiaries continue to monitor at least on a quarterly basis the quality of any underlying collateral, the business conditions of the debtors and other important factors in order to report to management and develop additional provision for credit losses as necessary.
 
The following table provides information about the
past-due
financial assets as of March 31, 2024 and September 30, 2024:
 
    
March 31, 2024
  
         
Millions of yen
  
         
Past-due
financial assets
         
Portfolio segment
   
Class
   
30-89 days

past-due
     
90 days

or more

past-due
     
Total

past-due
     
Total

financing

receivables
  
Consumer borrowers
       ¥ 3,994      ¥ 4,458      ¥ 8,452      ¥ 2,070,449  
   Real estate loans      2,064        2,178        4,242        1,947,461  
   Card loans      0        0        0        72,353  
   Other      1,930        2,280        4,210        50,635  
Corporate borrowers
         12,576        27,469        40,045        1,469,857  
Non-recourse
loans
    Japan      0        0        0        145,286  
   The Americas      2,502        1,126        3,628        50,263  
Other than
non-recourse
loans
    Real estate companies in Japan      113        115        228        334,506  
   Real estate companies in overseas      1,080        17,619        18,699        59,759  
  
Commercial, industrial and
other companies in Japan
      1,666        355        2,021        180,896  
  
Commercial, industrial and
other companies in overseas
      7,215        8,254        15,469        699,147  
Loans to Equity method investees
         0        0        0        251,929  
Net investment in leases
         23,376        18,995        42,371        1,155,023  
   Japan      2,525        4,372        6,897        624,094  
   Overseas      20,851        14,623        35,474        530,929  
     
 
 
     
 
 
     
 
 
     
 
 
  
Total
       ¥ 39,946      ¥ 50,922      ¥ 90,868      ¥ 4,947,258  
     
 
 
     
 
 
     
 
 
     
 
 
  
    
September 30, 2024
  
         
Millions of yen
  
         
Past-due
financial assets
         
Portfolio segment
   
Class
   
30-89 days

past-due
     
90 days

or more

past-due
     
Total

past-due
     
Total

financing

receivables
  
Consumer borrowers
       ¥ 4,150      ¥ 4,918      ¥ 9,068      ¥ 2,074,343  
   Real estate loans      2,505        2,812        5,317        1,960,136  
   Card loans      0        0        0        69,436  
   Other      1,645        2,106        3,751        44,771  
Corporate borrowers
         8,845        42,181        51,026        1,437,743  
Non-recourse
loans
    Japan      0        0        0        204,154  
   The Americas      0        3,386        3,386        67,289  
Other than
non-recourse
loans
    Real estate companies in Japan      151        109        260        365,259  
   Real estate companies in overseas      136        28,005        28,141        65,128  
  
Commercial, industrial and
other companies in Japan
      2,305        156        2,461        195,441  
  
Commercial, industrial and
other companies in overseas
      6,253        10,525        16,778        540,472  
Loans to Equity method investees
         0        0        0        137,187  
Net investment in leases
         21,334        21,351        42,685        1,159,348  
   Japan      2,639        4,180        6,819        613,408  
   Overseas      18,695        17,171        35,866        545,940  
     
 
 
     
 
 
     
 
 
     
 
 
  
Total
       ¥ 34,329      ¥ 68,450      ¥ 102,779      ¥ 4,808,621  
     
 
 
     
 
 
     
 
 
     
 
 
  
 
Note: Loans held for sale, policy loans receivable of an insurance entity and purchased loans are not included in the table above.
In common with all classes, the Company and its subsidiaries consider
financial
assets as
past-due
financial assets when principal or interest is
past-due
30 days or more. Loans whose terms have been modified are not classified as
past-due
financial assets if the principals and interests are not
past-due
30 days or more in accordance with the modified terms.
 
The following table provides information about
non-accrual
of financial assets as of March 31, 2024 and September 30, 2024:
 
           
March 31, 2024
  
           
Millions of yen
  
           
Beginning balance
     
Ending balance
     
Interest income
recognized during
the reporting
period
     
Balance not
associated
allowance for credit
losses among
financial assets
measured at
amortized cost,
which is
suspending
recognition of
income
  
Non-accrual
of financial assets:
 
            
Installment loans to consumer borrowers:
 
            
Real estate loans
               
  
 
Japan
 
    ¥ 1,693      ¥ 1,095      ¥ 246      ¥ 129  
  
 
Overseas
 
      547        1,107        0        100  
Card loans
   
 
Japan
 
      1,367        0        27        0  
Other
               
  
 
Japan
 
      5,429        96        169        7  
  
 
Overseas
 
      1,105        2,574        0        35  
Installment loans to corporate borrowers:
 
            
Non-recourse
loans
   
 
The Americas
 
      3,248        3,116        0        0  
Other than non-recourse loans
               
Real estate companies
 
            
  
 
Japan
 
      219        115        45        4  
  
 
Overseas
 
      12,804        16,093        0        0  
Commercial, industrial and other
companies
 
            
    
Japan
        1,118        355        312        42  
    
Overseas
        20,470        27,636        0        2,319  
Loans to Equity method investees
 
      667        1,929        0        1,282  
     
 
 
     
 
 
     
 
 
     
 
 
  
Net investment in leases
 
      16,627        19,002        0        0  
     
 
 
     
 
 
     
 
 
     
 
 
  
Total
       ¥ 65,294      ¥ 73,118      ¥ 799      ¥ 3,918  
  
 
 
     
 
 
     
 
 
     
 
 
  
 
 
  
 
 
  
September 30, 2024
 
 
  
 
 
  
Millions of yen
 
 
  
 
 
  
Beginning balance
 
  
Ending balance
 
  
Interest income
recognized during
the reporting
period
 
  
Balance not
associated
allowance for credit
losses among
financial assets
measured at
amortized cost,
which is
suspending
recognition of
income
 
Non-accrual
of financial assets:
 
  
  
  
  
Installment loans to consumer borrowers:
 
  
  
  
  
Real estate loans
  
  
  
  
  
  
 
Japan
 
    ¥ 1,095      ¥ 1,107      ¥ 125      ¥ 124  
  
 
Overseas
 
      1,107        1,729        0        95  
Card loans
   
 
Japan
 
      0        0        0        0  
Other
               
  
 
Japan
 
      96        88        1        0  
  
 
Overseas
 
      2,574        2,299        0        29  
Installment loans to corporate borrowers:
 
            
Non-recourse
loans
   
 
The Americas
 
      3,116        5,261        0        0  
Other than non-recourse loans
 
            
Real estate companies
 
            
  
 
Japan
 
      115        108        20        0  
  
 
Overseas
 
      16,093        28,006        0        0  
Commercial, industrial and other companies
 
            
    
Japan
        355        155        10        41  
    
Overseas
        27,636        29,543        0        2,687  
Loans to Equity method investees
 
      1,929        4,748        0        1,284  
Net investment in leases
         19,002        21,356        0        0  
     
 
 
     
 
 
     
 
 
     
 
 
  
Total
       ¥ 73,118      ¥ 94,400      ¥ 156      ¥ 4,260  
     
 
 
     
 
 
     
 
 
     
 
 
  
The Company and its subsidiaries suspend accruing interest on
past-due
installment loans and net investment in leases when principal or interest is
past-due
90 days or more, or earlier, if management determines that their collections are doubtful based on factors such as individual debtors’ creditworthiness, historical loss experience, current delinquencies and delinquency trends. The Company and its subsidiaries return to accrual status
non-accrual
loans and net investment in leases when it becomes probable that the Company and its subsidiaries will be able to collect all amounts due according to the contractual terms of these loans and lease receivables, as evidenced by continual payments from the debtors. The period of such continual payments before returning to accrual status varies depending on factors that are considered relevant in assessing the debtor’s creditworthiness, such as the debtor’s business characteristics and financial conditions as well as relevant economic conditions and trends.
 
The following table provides information about modifications of financing receivables made to debtors experiencing financial difficulty that occurred during the six months ended September 30, 2023 and 2024:
 
Six months ended September 30, 2023
  
 
  
Millions of yen
  
 
  
Portfolio segment
   
Interest rate reduction
     
Term extension
     
Principal forgiveness
  
 
   
 
 
     
 
 
     
 
 
  
Class
   
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
  
 
   
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Consumer borrowers
    ¥ 245        0.0      ¥ 2,354        0.1      ¥ 45        0.0  
Real estate loans
      3        0.0        1        0.0        1        0.0  
Card loans
      222        0.1        1        0.0        41        0.0  
Other
      20        0.0        2,352        2.9        3        0.0  
Corporate borrowers
      0        0        862        0.1        58        0.0  
Other than
Non-recourse
loans
      0        0        862        0.1        58        0.0  
Real estate companies in Japan
      0        0        35        0.0        0        0  
Commercial, industrial and other companies in Japan
      0        0        542        0.2        0        0  
Commercial, industrial and other companies in overseas
      0        0        285        0.0        58        0.0  
Net investment in leases
      0        0        0        0        0        0.0  
Overseas
      0        0        0        0        0        0.0  
  
 
 
        
 
 
        
 
 
     
Total
    ¥ 245        0.0      ¥ 3,216        0.1      ¥ 103        0.0  
  
 
 
        
 
 
        
 
 
     
Six months ended September 30, 2023
  
 
  
Millions of yen
  
 
  
Portfolio segment
   
Combination - interest rate

reduction and term extension
     
Combination - interest rate

reduction and principal
forgiveness
     
Combination - term
extension and principal
forgiveness
  
 
   
 
 
     
 
 
     
 
 
  
Class
   
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
  
 
   
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Consumer borrowers
    ¥ 14        0.0      ¥ 583        0.0      ¥ 264        0.0  
Real estate loans
      0        0        0        0        0        0  
Card loans
      0        0        563        0.3        0        0  
Other
      14        0.0        20        0.0        264        0.3  
Corporate borrowers
      0        0        0        0        0        0  
Other than
Non-recourse
loans
      0        0        0        0        0        0  
Real estate companies in Japan
      0        0        0        0        0        0  
Commercial, industrial and other companies in Japan
      0        0        0        0        0        0  
Commercial, industrial and other companies in overseas
      0        0        0        0        0        0  
Net investment in leases
      0        0        0        0        0        0  
Overseas
      0        0        0        0        0        0  
  
 
 
        
 
 
        
 
 
     
Total
    ¥ 14        0.0      ¥ 583        0.0      ¥ 264        0.0  
  
 
 
        
 
 
        
 
 
     
 
Six months ended September 30, 2024
  
 
  
Millions of yen
  
 
  
Portfolio segment
   
Interest rate reduction
     
Term extension
     
Principal forgiveness
  
 
   
 
 
     
 
 
     
 
 
  
Class
   
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
  
 
   
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Consumer borrowers
      ¥0        0.0        ¥44        0.0        ¥0        0.0  
Other
      0        0.0        44        0.1        0        0.0  
Corporate borrowers
      0        0        1,875        0.1        11        0.0  
Other than
non-recourse
loans
      0        0        1,875        0.2        11        0.0  
Real estate companies in Japan
      0        0        1,345        0.4        0        0  
Commercial, industrial and other companies in Japan
      0        0        530        0.3        0        0  
Commercial, industrial and other companies in overseas
      0        0        0        0.0        11        0.0  
Loans to Equity method investees
      0        0        891        0.6        0        0.0  
  
 
 
        
 
 
        
 
 
     
Total
      ¥0        0.0        ¥2,810        0.1        ¥11        0.0  
  
 
 
        
 
 
        
 
 
     
Portfolio segment
   
Combination - interest rate

reduction and term
extension
     
Combination - interest rate

reduction and principal
forgiveness
     
Combination - term

extension and principal
forgiveness
  
 
   
 
 
     
 
 
     
 
 
  
Class
   
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
     
Amortized
cost basis
     
% of total
class of
financing
receivable
  
 
   
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Consumer borrowers
      ¥106        0.0        ¥0        0.0        ¥0        0.0  
Other
      106        0.2        0        0.0        0        0.0  
Corporate borrowers
      4,895        0.3        0        0        0        0.0  
Other than
non-recourse
loans
      4,895        0.4        0        0        0        0.0  
Real estate companies in Japan
      0        0        0        0        0        0  
Commercial, industrial and other companies in Japan
      0        0        0        0        0        0  
Commercial, industrial and other companies in overseas
      4,895        0.9        0        0        0        0.0  
Loans to Equity method investees
      0        0        0        0        0        0.0  
  
 
 
        
 
 
        
 
 
     
Total
      ¥5,001        0.1        ¥0        0.0        ¥0        0.0  
  
 
 
        
 
 
        
 
 
     
The Company and its subsidiaries offer various types of concessions to the debtors to protect as much of the investment as possible in modifications of financing receivables made to debtors experiencing financial difficulty. For the debtors of all financing receivables, the Company and its subsidiaries offer concessions including an interest rate reduction and a term extension. In addition, for the debtors of all financing receivables other than
non-recourse
loans, the Company and its subsidiaries also offer concessions such as a principal forgiveness or a temporary reduction in the interest payments. Furthermore, the Company and its subsidiaries may acquire collateral assets from the debtors in modifications of financing receivables made to debtors experiencing financial difficulty to satisfy fully or partially the loan principal or past due interest.
In common with all portfolio segments, financing receivables modified to debtors experiencing financial difficulty are recognized as impaired and are individually evaluated for allowance for credit losses, taking into account payment default and repayment status after modifications. In most cases, these financing receivables have already been considered impaired and individually evaluated for allowance for credit losses prior to the modifications. However, as a result of the modification, the Company and its subsidiaries may recognize additional allowance for credit losses for the modified receivables.
 
The following table provides information about the financial effect of the modifications of financing receivables made to debtors experiencing financial difficulty that occurred during the six months ended September 30, 2023 and 2024:
 
Six months ended September 30, 2023
 
Millions of yen
 
Portfolio segment
   
Financial effect
 
   
 
Class
   
Interest rate reduction
   
Term extension
   
Principal forgiveness
 
   
 
Consumer borrowers
         
Real estate loans
   
Reduced weighted-average
contractual interest rate from 3.9% to 0.0%.		   
Added a weighted-average

1.0 years to the life of loans.		    Reduced the amortized cost basis of the loans by ¥1 million.
Card loans
    Reduced weighted-average contractual interest rate from 12.6% to 0.4%.    Added a weighted-average
6.6 years to the life of loans.		    Reduced the amortized cost basis of the loans by ¥92 million.
Other
    Reduced weighted-average contractual interest rate from 14.2% to 2.5%.    Added a weighted-average
4.8 years to the life of loans.		    Reduced the amortized cost basis of the loans by ¥336 million.
Corporate borrowers
         
Other than Non-recourse
loans
    —     —     — 
Real estate companies in Japan
    —     Added a weighted-average
0.5 years to the life of loans.		    — 
Commercial, industrial and other companies in Japan
    —     Added a weighted-average
0.6 years to the life of loans.		    — 
Commercial, industrial and other companies in overseas
    —     Added a weighted-average
4.7 years to the life of loans.		    Reduced the amortized cost basis of the loans by ¥108 million.
Net investment in leases
         
Overseas
    —     —     Reduced the amortized cost basis of the loans by ¥0 million.
Six months ended September 30, 2024
 
Millions of yen
 
Portfolio segment
   
Financial effect
 
   
 
Class
   
Interest rate reduction
   
Term extension
   
Principal forgiveness
 
   
 
Consumer borrowers
         
Other
    Reduced weighted-average contractual interest rate from 16.8% to 11.9%.    Added a weighted-average
2.4
years to the life of loans.		   
— 
Corporate borrowers
         
Other than
non-recourse
loans
    —     —     — 
Real estate companies in Japan
    —     Added a weighted-average
2.6
years to the life of loans.		    — 
Commercial, industrial and other companies in Japan
    —     Added a weighted-average
1.0
years to the life of loans.		    — 
Commercial, industrial and other companies in overseas
    Reduced weighted-average contractual interest rate from 14.3% to 12.9%.    Added a weighted-average
2.3 years to the life of loans.		    Reduced the amortized cost basis of the loans by ¥7 million.
Loans to Equity method investees
    —     Added a weighted-average
0.5 years to the life of loans.		    — 
During the six months ended September 30, 2023 there was no financing receivable that had a payment default and had been modified, when the debtor was experiencing financial difficulty, within the previous 12 months preceding the payment default date. The following table provides information about financing receivable that had a payment default and had been modified, when the debtor was experiencing financial difficulty, within the previous 12 months preceding the payment default date during the six months ended September 30, 2024.
 
Six months ended September 30, 2024
  
 
  
Millions of yen
  
 
  
Portfolio segment
                  
 
            
Class
  
Interest rate
reduction
    
Term extension
    
Principal
forgiveness
    
Combination - interest rate

reduction and term
extension
    
Combination - interest rate

reduction and principal
forgiveness
    
Combination - term

extension and principal
forgiveness
  
 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Consumer
borrowers
   ¥ 0     ¥ 0     ¥ 0     ¥ 20     ¥ 0     ¥ 0  
Other
     0       0       0       20       0       0  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total
   ¥ 0     ¥ 0     ¥ 0     ¥ 20     ¥ 0     ¥ 0  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The Company and its subsidiaries consider financing receivables whose terms have been modified to debtors experiencing financial difficulty as defaulted receivables when principal or interest is
past-due
90 days or more in accordance with the modified terms.
 
The following table provides information about the
past-due
financial assets modified to debtors experiencing financial difficulty within the previous 12 months from March 31, 2024 and September 30, 2024:
 
March 31, 2024
 
 
  
Millions of yen
 
Portfolio segment
  
Current
 
  
30-89
days

past-due
 
  
90 days

or more

past-due
 
Class
Consumer borrowers
      ¥35        ¥91        ¥7  
Real estate loans
      1        0        0  
Other
      34        91        7  
Corporate borrowers
      6,140        0        284  
Non-recourse
loans
      1,277        0        0  
The Americas
      1,277        0        0  
Other than
non-recourse
loans
      4,863        0        284  
Real estate companies in Japan
      37        0        32  
Commercial, industrial and other companies in Japan
      481        0        230  
Commercial, industrial and other companies in overseas
      4,345        0        22  
  
 
 
     
 
 
     
 
 
  
Loans to Equity method investees
      4,347        0        0  
  
 
 
     
 
 
     
 
 
  
Total
      ¥10,522        ¥91        ¥291  
  
 
 
     
 
 
     
 
 
  
September 30, 2024
  
    
Millions of yen
  
Portfolio segment
   
Current
     
30-89 days

past-due
     
90 days

or more

past-due
  
Class
Consumer borrowers
    ¥ 11      ¥ 186      ¥ 12  
Other
      11        186        12  
Corporate borrowers
      8,630        0        66  
Non-recourse loans
      1,204        0        0  
The Americas
      1,204        0        0  
Other than
non-recourse
loans
      7,426        0        66  
Real estate companies in Japan
      1,316        0        29  
Commercial, industrial and other companies in Japan
      714        0        19  
Commercial, industrial and other companies in overseas
      5,396        0        18  
  
 
 
     
 
 
     
 
 
  
Loans to Equity method investees
      4,138        0        0  
  
 
 
     
 
 
     
 
 
  
Total
    ¥ 12,779      ¥ 186      ¥ 78  
  
 
 
     
 
 
     
 
 
  
As of March 31, 2024 and September 30, 2024, there were no foreclosed residential real estate properties. The carrying amounts of installment loans in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure were ¥119 million and ¥160 million as of March 31, 2024 and September 30, 2024, respectively.