The macroeconomic scenarios for incorporating forward-looking information in the ECL measurement were updated, reflecting the recent economic forecasts. The Group assumed that the Japanese economy is expected to remain on a moderate recovery trend, supported mainly by resilient capital investment aimed at labor-saving and digital transformation, and a gradual pickup in private consumption. As for the U.S. economy, the Group assumed that the pace of economic expansion is expected to slow, driven by higher tariff costs, weaker private consumption, and worsening employment conditions, although the economy is expected to gradually stabilize from the second half of 2026 onward as the impact of tariffs wanes and interest rate cuts take effect. As for the European economy, the Group assumed that private consumption is expected to remain resilient, supported by a favorable employment environment and stable price trends. As for the Asian-Pacific economy, the Group assumed, particularly for China, that growth is expected to slow as the effects of

subsidy-led

domestic demand fade, and as it is affected by a sluggish real estate market and weak employment conditions, leading to relatively low growth for the region. This assumption was considered in determining the base scenario. The severe downside scenario is the adverse scenario and based on stressed business environments such as a serious economic recession and financial market disruption, and this scenario is in conformity with the Group’s internal stress test. Further, both the downside and upside scenarios are developed based on the premises of the base scenario and past macroeconomic experiences. Applied probability weightings for each scenario, which can vary every year, are determined mainly by statistical methods. For the severe downside scenario, the weight is determined by mapping the macroeconomic projections under the scenario against the historical distributions. The following table shows the growth rates of the Japanese, U.S., European Monetary Union (“EMU”) and Asia-Pacific GDPs and the Japanese short-term interest rate, which are key factors of the macroeconomic scenarios.

In determining the need for making additional ECL adjustments, the Group considered whether there is an increase in the credit risk for some portfolios which had a material adverse impact resulting from the situation in the Middle East, from inflation overseas driven by high U.S. tariffs on trading partners, or from the Russia-Ukraine situation, and whether the increased risk, if any, was not fully incorporated in the ECL model. For the situation in the Middle East, the Group evaluated the forward-looking impact on credit risks and losses in light of the pressure on corporate earnings of borrowers. For inflation overseas driven by high U.S. tariffs on trading partners, the Group evaluated the forward-looking impact on credit risks and losses considering the impact of such environment changes on borrowers which the Group identified in terms of country and industries. For the Russian exposure, the Group evaluated the forward-looking impact on credit risks and losses based on factors

such as the possibility that payment of principal or interest would be delayed or a request for loan restructuring would be made due to the prolonged impact of sanctions targeting Russia imposed by the Japanese government and authorities in several other jurisdictions, Russia’s measures to defend its economy and mitigate the effect of sanctions, and a deterioration of the credit condition of Russia. In addition, the Group also considered the prolonged difficulty in collecting funds, such as the payments from Russian customers, through remittances out of Russia due to orders by the Russian authorities. The Group evaluated the forward-looking impact on credit risks and losses of certain industry-related portfolios selected based on changes in factors such as the market conditions and bankruptcy trends. As a consequence, the Group decided to make ECL adjustments for the portfolios affected by the situation in the Middle East, inflation overseas driven by high U.S. tariffs on trading partners and the Russia-Ukraine situation. At March 31, 2026, the additional ECL adjustments for the portfolios affected by the situation in the Middle East was ¥30,849 million. In addition, the additional ECL adjustments for the portfolios affected by inflation overseas driven by high U.S. tariffs on trading partners and for the portfolios affected by the situation in Russia-Ukraine were ¥45,300 million and ¥64,088 million respectively.

Management estimates and judgments may change from time to time as the economic environment changes or new information becomes available. Changes in these estimates and judgments will result in a different allowance for loan losses and may have a direct impact on impairment charges. Allowance for loan losses amounted to ¥1,236,839 million and ¥1,102,522 million at March 31, 2026 and 2025, respectively. For additional information, refer to Note 10 “Loans and Advances.”

The fair values of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases, inputs to valuation techniques are based on observable data with respect to similar financial instruments or by using models. Where observable inputs are not available, the fair value is estimated based on appropriate assumptions that a market participant would take into account. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed. The Group certifies significant valuation models before they are used, and calibrates them to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only observable data; however, inputs such as credit risk (both own and counterparty), volatilities and correlations require management to make estimates. Changes in assumptions about these factors could affect the fair values of these financial instruments. More details about the Group’s valuation techniques, significant unobservable inputs used in determining fair values and sensitivity analyses are given in Note 45 “Fair Value of Financial Assets and Liabilities.”

The Group has property, plant and equipment, which consist of assets for rent, land, buildings, right of use assets and others. Property, plant and equipment are tested for impairment if events or changes in circumstances indicate that it may not be recoverable at the end of each reporting period. If any such indication exists, then its recoverable amount is estimated. The process to determine the recoverable amount is inherently uncertain because such recoverable amount is determined based on management estimates and judgments. Changes in management judgments may result in different impairment test results and different impairment amounts recognized. For the fiscal years ended March 31, 2026, 2025 and 2024, impairment losses on property, plant and equipment were ¥3,815 million, ¥5,461 million and ¥4,168 million, respectively. For additional information, refer to Note 12 “Property, Plant and

Equipment.”

estimated. The process to determine the recoverable amount is inherently uncertain because such recoverable amount is determined based on a number of management estimates and judgments. The Group determines the recoverable amount using the estimated future cash flows,

pre-tax

discount rates, growth rates, and other factors. The estimation of future cash flows inherently reflects management judgments, even though such forecasts are prepared taking into account actual performance and external economic data. The

pre-tax

discount rates and growth rates may be significantly affected by market interest rates or other market conditions, which are beyond management’s control, and therefore significant management judgments are made to determine these assumptions. These management judgments are made based on the facts and circumstances at the time of the impairment test, and may vary depending on the situation and the time. Changes in management judgments may result in different impairment test results and different impairment amounts recognized. For the fiscal years ended March 31, 2026, 2025 and 2024, impairment losses on goodwill were nil

, ¥

8,032

million and

nil

, respectively. For additional information, refer to Note 14 “Intangible Assets.”

The Group has other intangible assets, not including goodwill, which consist of software, contractual customer relationships, trademarks and others. These are divided into other amortizing intangible assets and other

non-amortizing

intangible assets. Other amortizing intangible assets are tested for impairment if events or changes in circumstances indicate that it may not be recoverable at the end of each reporting period. Other

non-amortizing

intangible assets are tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that it may not be recoverable. If any such indication exists, then its recoverable amount is estimated. The process to determine the recoverable amount is inherently uncertain because such recoverable amount is determined based on a number of management estimates and judgments as described in “—Impairment of goodwill.” Changes in management judgments may result in different impairment test results and different impairment amounts recognized. For the fiscal years ended March 31, 2026, 2025 and 2024, impairment losses on other intangible assets were ¥2,389 million, ¥1,551 million and ¥9,648 million, respectively. For additional information, refer to Note 14 “Intangible Assets.”

Provision for interest repayment represents management’s estimate of future claims for the refund of

so-called

“gray zone interest” (interest on loans in excess of the maximum rate prescribed by the Interest Rate Restriction Act (ranging from 15% to 20%) up to the 29.2% maximum rate permitted under the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates), taking into account historical experience such as the number of customer claims for a refund, the amount of repayments and the characteristics of customers, and the length of the period during which claims are expected to be received in the future.

Management estimates and judgments may change from time to time as the legal environment and market conditions change or new information becomes available. Changes in these estimates and judgments could affect the balance of provision for interest repayment. Provision for interest repayment is recorded in provisions as a liability, and it totaled ¥177,420 million and ¥209,659 million at March 31, 2026 and 2025, respectively. For additional information, refer to Note 21 “Provisions.”

The Group has defined benefit plans such as defined benefit pension plans and

lump-sum

severance indemnity plans. The present value of the defined benefit obligation is calculated based on actuarial valuations that are dependent upon a number of assumptions, including discount rates, mortality rates and future salary (benefit) increases. The discount rates are equivalent to market yields of AA credit-rated corporate bonds that have terms to maturity approximating those of the related obligations. Future mortality rates are based on the official mortality table generally used for actuarial assumptions in Japan. Other assumptions used for the calculation of the defined benefit obligation are based on historical records. Due to the long-term nature of these

plans, such estimates are subject to significant uncertainty. Any change in these assumptions will impact actuarial gains and losses, as well as the present value of the defined benefit obligation and the net retirement benefit expense for each period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in the year, and return on plan assets excluding interest income are recognized in other comprehensive income and are never reclassified to profit or loss.

The difference between the fair value of the plan assets and the present value of the defined benefit obligation at the end of the reporting period is recognized as assets and liabilities in the consolidated statements of financial position. When this calculation for each plan results in a benefit to the Group, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan (“asset ceiling”). An economic benefit is available to the Group, if it is realizable during the life of the plan or on settlement of the plan obligation. The net total of assets and liabilities in the consolidated statements of financial position amounted to net assets of ¥593,472 million and ¥478,072 million at March 31, 2026 and 2025, respectively. For additional information, refer to Note 24 “Retirement Benefits.”

Deferred tax assets relating to tax losses carried forward and deductible temporary differences are recognized, only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the deductible temporary differences can be utilized. This assessment requires significant management estimates and judgments. Future taxable profit is estimated based on, among other relevant factors, forecasted results of operations, which are based on historical financial performance and the business plans that management believes to be prudent and feasible. While the Group carefully assesses the realization of tax losses carried forward and deductible temporary differences, the actual taxable profit in the future may be less than the forecast. The deferred tax assets amounted to ¥94,526 million and ¥63,176 million in the consolidated statements of financial position at March 31, 2026 and 2025, respectively, while the net total of deferred tax assets and liabilities amounted to net liabilities of ¥203,397 million and ¥202,591 million at March 31, 2026 and 2025, respectively. For additional information, refer to Note 23 “Deferred Income Tax.”