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>> Annual Report 2015

Annual Report of Toyota Kreditbank GmbH Group, Cologne,


for Financial Year 2015, 1 April 2014 – 31 March 2015
Contents

04 Foreword
10 Notes to the consolidated financial statements of
Toyota Kreditbank GmbH for the 2014/2015 financial year
12 1. General information
12 2. Consolidated companies
12 3. Consolidation principles
12 4. Accounting policies, foreign currency translation
15 5. Notes to the balance sheet
23 6. Notes to the income statement
24 7. Other disclosures
28 Consolidated Cash Flow Statement for Toyota Kreditbank Group for the period 1 April 2014 to 31 March 2015
29 Consolidated Statement of Changes in Equity of Toyota Kreditbank GmbH as at 31 March 2015
30 Segment information

34 Toyota Kreditbank GmbH


Group Management Report for the 2014/2015 financial year
36 A. General Information on the Toyota Kreditbank Group
38 B. Report on Economic Position
50 C. Events after the end of the reporting period
50 D. Opportunities and Risks Report
69 E. Outlook
72 Country by Country Reporting
73 Auditors’ Report

02 – 03
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Ladies and Gentlemen,

Toyota is pleased to reveal the most profitable year in the Successes we can be proud of
company’s history worldwide. With record sales of 10.23
million units, Toyota is once again the world’s largest car manu- The satisfactory results of the Toyota Kreditbank GmbH Group
facturer. At the same time, Toyota has continued to increase for the 2015 financial year are something to be proud of. They
its lead in innovative power concepts, particularly hybrid have been achieved in spite of strong competition and difficult
technology, and has also introduced the Mirai, the first pro- economic conditions. While Germany continues to be a highly
duction fuel-cell vehicle. For the future, the company is also competitive market, the Group achieved the best result ever
re-entering motor sport. From 2017, Toyota will return to in spite of the crisis in Russia. In France, we were able to produce
rallying with new models after an absence of 16 years. our best figures in spite of the reduced promotion of hybrid
vehicles. In both the Spanish and Italian markets, we see a
Team spirit products bring success in new car business positive trend.

Intelligent co-operation with the importer, e.g. jointly Customer proximity and team spirit between bank and dealers
financed interest schemes and racy advertising strategies were rewarded by the retailer with excellent feedback. For the
for smaller cars like the Aygo "go fun yourself" campaign, not sixth time in succession, Toyota Kreditbank was awarded the
only enthused young people in particular but also ensured title of "Best Captive". The Bankenmonitor 2014 dealer survey
high market penetration rates. in Germany awarded the industry report overall winner top
marks and, for the ninth time in succession, first place as the
Service products, such as "Toyota Komplett" and "Toyota best car bank of the major imported brands and the highest
Service Leasing" provided considerable added value for the score of all manufacturers in a good third of all individual cri-
customer with their attractive conditions and additional teria. At this point, we would also like to thank all our partners
benefits. The icing on the cake was the special finance deal for their many years of successful and loyal co-operation. In our
with "3 years’ free servicing" for many models. other markets too, we are always far ahead in the eyes of our
end customers and dealers in terms of customer satisfaction.
Our business customers were enthusiastic about the "Busi-
ness Plus Weeks", during which, in addition to their dream Well positioned and ready to accelerate
cars, they were also provided with perfectly tailored finance
and service packages. This encouraged further growth in We can draw the following conclusion: "With strong pro-
the business sector. grammes on the part of the bank and importers, which will be
further extended in the future, with excellent capital funding
Side-by-side in the used car business and successful Basel-II-IRBA implementation, we at Toyota
Kreditbank GmbH, stand side-by-side with the retailer in
At Toyota Kreditbank we are consistently implementing our pole position for the next financial year."
successful "side-by-side with the retailer" formula. Continu-
ous dialogue, support in all situations and a joint approach
to the digital world, in which, for example, online finance will
be available as required, ensure that Toyota will not lose out
on any used car business in Germany. Retailer and bank
appear as a single unit and will continue to work together
more in the future.

Ready for European banking regulation


Christian Ruben Ivo Ljubica Junichi Yamada
Managing Director Managing Director Chief Representative
Toyota Kreditbank, together with all its branches and sub- CEO COO
sidiaries, is the first captive to implement the IRB approach.
Toyota Kreditbank GmbH/ Toyota Kreditbank GmbH/ Toyota Kreditbank GmbH
Lean and transparent management has meant that additional
Toyota Leasing GmbH Toyota Leasing GmbH
costs could be absorbed. We are ready to adapt flexibly and
quickly to all situations. Because of our own internal rating
models and business model, we require less regulatory capital.
Given our sound capital funding, we are able to provide even
better support and supervision for the retailer.

04 – 05
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Consolidated balance sheet of Toyota Kreditbank GmbH, Cologne, as at 31 March 2015

31/03/2015 31/03/2014 31/03/2015 31/03/2014


Assets EUR EUR Equity and liabilities EUR EUR

1 Liquid funds 1 Liabilities to banks


a Cash 45,460.21 19,684.63 a due on demand 76,365,074.88 55,017,595.37
b Deposits with central banks, 33,880,930.81 39,711,053.48 b with fixed term or notice periods 2,638,366,907.99 2,566,360,529.51
thereof with German Federal Bank 2,714,731,982.87 2,621,378,124.88
EUR 16,886,963.91 (31/03/2014: TEUR 14,681)
33,926,391.02 39,730,738.11 2 Liabilities to customers – other liabilities
a due on demand 62,514,150.63 88,934,062.76
2 Receivables due from banks b with fixed term or notice periods 2,378,226,694.58 2,390,943,295.02
a on demand 179,589,756.88 175,754,922.03 2,440,740,845.21 2,479,877,357.78
b other receivables 133,091,130.41 69,058,690.65
312,680,887.29 244,813,612.68 3 Notes payable
securitised liabilities 548,141,482.50 515,059,828.76
3 Customer receivables 6,030,460,887.04 6,117,072,015.46
thereof secured by mortgages: 4 Other liabilities 222,780,057.00 227,808,146.34
EUR 0.00 (31/03/2014: TEUR 0)
Municipal loans EUR 0.00 (31/03/2014: TEUR 0) 5 Deferred income 520,284,365.50 554,427,716.33
4 Bonds and other interest bearing securities
Bonds and securities by public issuers 75,919,682.80 40,358,349.20 6 Accruals and provisions
a Provision for pensions and similar obligations 14,584,846.35 13,123,044.57
5 Investments - thereof 19,020.06 19,020.06 b Tax accruals 22,970,249.75 22,427,458.47
in banks: EUR 19,020.06 (31/03/2014: TEUR 19) c Other accruals 59,482,475.99 56,322,047.74
in financial services companies: EUR 0.00 (31/03/2014: TEUR 0) 97,037,572.09 91,872,550.78

6 Leasing assets 897,255,356.55 909,041,763.95 7 Subordinated liabilities 85,415,154.63 113,025,476.59

7 Intangible fixed assets 8 Equity


Purchased concessions, industrial and similar rights and assets, and a Contributed capital
licenses in such rights and assets 6,617,605.57 6,597,459.46 Share capital 30,000,000.00 30,000,000.00
b Capital surplus 345,843,161.35 345,843,161.35
8 Tangible fixed assets 14,586,123.64 16,313,797.49 c Retained Group earnings
ca Revenue reserves of consolidated companies 435,232,319.29 386,970,346.65
9 Other assets 57,875,886.52 34,220,842.21 cb Groupe net income for the year 63,361,800.76 79,983,407.12
d Currency translation differences - 62,402,424.20 -26,691,506.00
10 Prepaid expenses and deferred charges 11,334,557.36 11,128,186.97 812,034,857.20 816,105,409.12

11 Assets arising from the overfunding of pension obligations 489,919.15 258,824.99

Total of assets 7,441,166,317.00 7,419,554,610.58 Total of equity and liabilities 7,441,166,317.00 7,419,554,610.58

Other obligations

Irrevocable credit commitments 428,920,098.81 393,346,344.72

06 – 07
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Consolidated income statement of Toyota Kreditbank GmbH, Cologne,


for the period 1 April 2014 to 31 March 2015

01/04/2014 01/04/2013
to 31/03/2015 to 31/03/2014
EUR EUR

1 Interest income from


a lending and money market transactions 351,075,928.90 365,754,854.02
b fixed income securities and government ledger bonds 1,394,035.94 1,684,408.84
352,469,964.84 367,439,262.86

2 Interest expense 126,294,427.97 142,927,095.31


226,175,536.87 224,512,167.55

3 Investment income 100.00 160.00

4 Commission income 54,237,565.40 51,643,334.54

5 Commission expense 73,541,557.16 73,157,233.28


-19,303,991.76 -21,513,898.74

6 Other operating income 283,512,342.29 314,050,282.60

7 General administrative expenses


a Personnel expenses
aa Wages and salaries 41,975,286.19 42,044,952.22
ab Social security expenses 10,411,053.95 10,837,795.31
of which pension costs:
EUR 1,830,237.98 (31/03/2014: TEUR 2,181)
b Other administrative expenses 62,884,515.48 63,478,239.67
115,270,855.62 116,360,987.20

8 Depreciation and amortisation of intangible


and tangible fixed assets, including
leasing assets 210,946,910.91 230,076,115.74

9 Other operating expenses 18,608,994.40 13,204,118.08

10 Bad debts written off and allowances on


receivables and securities, together with
increases to accruals in respect of lending business 36,953,168.57 33,183,971.29

11 Profit from ordinary business activities 108,604,057.90 124,223,519.10

12 Extraordinary expenses 19,960,002.80 0.00

13 Income taxes 24,221,408.55 43,381,758.58

14 Other taxes, to the extent not included in item (9) above 1,060,845.79 858,353.40

15 Group net income for the year 63,361,800.76 79,983,407.12

08 – 09
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Notes to the consolidated financial statements of Toyota


Kreditbank GmbH for the 2014/2015 financial year

12 1. General information
12 2. Consolidated companies
12 3. Consolidation principles
12 4. Accounting policies, foreign currency translation
15 5. Notes to the balance sheet
5.1 Cash reserve
5.2 Due from banks
5.3 Customer receivables
5.4 Bonds and other fixed interest bearing securities
5.5 Investments
5.6 Leasing assets
5.7 Intangible assets
5.8 Property, plant and equipment
5.9 Fixed assets movement schedule
5.10 Other assets
5.11 Assets denominated in a foreign currency
5.12 Prepaid expenses and deferred charges
5.13 Liabilities to banks
5.14 Liabilities to customers
5.15 Securitised liabilities
5.16 Other liabilities
5.17 Deferred income
5.18 Accruals and provisions
5.19 Subordinated liabilities
5.20 Foreign currency liabilities
23 6. Notes to the income statement
6.1 Other operating income
6.2 Depreciation and amortisation of intangible assets, tangible fixed assets and leasing assets
6.3 Other operating expenses
6.4 Extraordinary expenses
6.5 Income taxes
24 7. Other disclosures
7.1 Derivative transactions
7.2 Valuation units
7.3 Other financial obligations and disclosures reported below the balance sheet (liabilities)
7.4 Auditors’ fees
7.5 Related party transactions
7.6 Executive Management (Geschäftsleitung) of the Parent Company
7.7 Receivables from members of the Executive Management of the Parent Company
7.8 Number of employees
7.9 Name and place of business of the parent company, information about the consolidated financial statements
28 Consolidated Cash Flow Statement for Toyota Kreditbank Group for the period 1 April 2014 to 31 March 2015
29 Consolidated Statement of Changes in Equity of Toyota Kreditbank GmbH as at 31 March 2015
30 Segment information

10 – 11
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

1. General disclosures For this reason, Koromo S.A. is included as a subsidiary in the taking account of cash flows achieved in the past and collat- Provisions and accruals are recognised for all identified risks
The consolidated financial statements for the period ended consolidated financial statements of Toyota Kreditbank GmbH eral held. Specific allowances are recognised on dealer finan- and for liabilities of uncertain timing and amount. Provisions
31 March 2015 of Toyota Kreditbank GmbH have been prepared in accordance with § 290 (2) no. 4 HGB. cing receivables on the basis of a case-by-case assessment. and accruals with a remaining term of more than one year are
in accordance with the regulations of the Handelsgesetzbuch General allowances are recognised on a contract-by-contract discounted to their present value using the average market
(German Commercial Code) and the requirements of the All subsidiaries are fully consolidated. basis, taking account of the likelihood of default and the ex- interest rate for the past seven years (corresponding to their
German Accounting Regulation for Banks and Financial Institu- pected loss. For the purposes of determining the probability remaining term) in accordance with § 253 (2) sentence 1 HGB.
tions (RechKredV), taking account of the specific requirements of default and the expected loss, the Group takes account, at
of the Limited Liability Company Law (GmbHG). The structure 3. Consolidation principles a minimum, of the parameters which it also uses to measure The pension provision for employees in Germany is calculated
corresponds to the formats required for banks as specified in The consolidated financial statements have been prepared uni- equity coverage of default risks using an internal ratings- for HGB purposes at 31 March 2015 using the projected-unit-
section 2 et seq. RechKredV. The applicable accounting stan- formly using the accounting policies of Toyota Kreditbank GmbH based approach (IRBA). credit method based on a discount rate of 4.37% (2013/2014:
dards of the German Financial Reporting Committee (DRSC) described below. Where necessary, the financial statements 4.83%), and assumed future salary and pension increases of
have also been taken into consideration. of the included companies have been adjusted to bring them Bonds and other fixed-interest-bearing securities are clas- 3% (2013/2014: 3%) and 2% (2013/2014: 2%) respectively.
into line with the classification regulations used by the parent sified as current assets and measured in accordance with the The 2005 mortality tables issued by Prof. Dr. Klaus Heubeck
company. strict lowest value principle pursuant to § 340e (1) sentence are used as the basis of calculation.
2. Group reporting entity 2 HGB in conjunction with § 253 (4) HGB.
Besides the parent company, Toyota Kreditbank GmbH, the The cost of investment in the consolidated subsidiaries, Toyota Toyota Kreditbank GmbH has set up Contractual Trust Arrange-
consolidated financial statements for the year ended 31 March Leasing GmbH, Toyota Bank Polska Spolka Akcyjna, Toyota Investments are stated at the lower of acquisition cost or fair ments whereby assets designated to fulfil pension obligations
2015 include the following German and foreign subsidiaries: Leasing Polska Sp. z o.o. and ZAO Toyota Bank has been con- value. have been separated from other assets and transferred to
solidated pursuant to Art. 66 (3) sentence 4 EGHG using the trustees. Assets which cannot be accessed by other creditors
― Toyota Leasing GmbH, Cologne German book value method in accordance with § 301 (1) sen- Leasing assets relate primarily to leased-out vehicles. Leasing and have been designated as being held exclusively to settle
― Toyota Bank Polska Spolka Akcýjna, Warsaw, Poland tence 2 no. 1 HGB (old version). assets are stated at acquisition cost less accumulated sched- pension obligations, are offset at the balance sheet date against
― Toyota Leasing Polska Sp. z o.o., Warsaw, Poland uled depreciation and impairment losses. The provision for the relevant obligations relating to fund-performance-based
― ZAO Toyota Bank, Moscow, Russia The equity capital of the three Dutch foundations is presented potential residual value risks has been offset against leased commitments in accordance with § 246 (2) sentence 2 HGB.
― Koromo S.A, Luxembourg in the consolidated financial statements within other liabilities assets on the assets side of the balance sheet. The surplus of assets over obligations is presented within the
due to the restricted liability function of these entities (and line item "Other assets". Pension obligations resulting from
Toyota Kreditbank GmbH holds 100% of the shares of Toyota not as minority interests). As a general rule, leasing assets are depreciated straight line the bank's previous arrangements and from guaranteed pen-
Leasing GmbH and Toyota Bank Polska Spolka Akcýjna. down to their agreed residual value over the term of the lease. sions are presented within the line item "Provisions and similar
Intragroup receivables, payables, income and expenses bet- Leasing assets of the Norwegian and Swedish branches are obligations". In these cases, there are no separate plan assets.
Toyota Bank Polska Spolka Akcyjna holds 100% of the shares ween consolidated entities are eliminated. depreciated systematically down to an agreed residual value
of Toyota Leasing Polska Sp. z o.o. over the duration of the contract with the monthly deprecia- The provision for pre-retirement part-time working ar-
Inter-company profits and losses, which would have had to be tion charge measured on the basis of the amount of capital rangements was measured at 31 March 2015 in the HGB
Toyota Kreditbank GmbH directly holds 99.9% of the shares eliminated in accordance with section 304 (1) HGB, did not tied up in the asset. Depending on their terms, the leasing balance sheet using the projected-unit-credit method and
of ZAO Toyota Bank, with the remainder held by Toyota occur in the year under review. contracts are treated either as operating leases or as finance a discount rate of 3.06% (31 March 2014: 3.68%).
Leasing GmbH. leases and the underlying assets are accordingly shown either
as leasing assets or as customer receivables. The financial statements of group subsidiaries denominated
Koromo S.A., Luxembourg, is a special purpose entity. The 4. Accounting policies, foreign currency translation in a foreign currency are converted into Euro at 31 March
shares of the special purpose entity are held by three Dutch Customer receivables resulting from instalment credit trans- Software at cost of purchase less scheduled straight-line 2015 in accordance with § 308a HGB. The translation differ-
foundations, each of which have an investment of TEUR 33 in actions and finance lease business are stated including inter- amortisation over three to five years is shown under intan- ence arising is reported within the group entity as the cur-
the company’s equity. Toyota Kreditbank GmbH has again est and charges for the remaining term. Other customer gible assets. rency translation difference on equity.
executed an ABS transaction with Koromo S.A., Luxembourg, receivables and receivables due from banks as well as other
during the 2014/2015 financial year and securitised some of assets are stated at their nominal amounts. Tangible fixed assets are stated at cost less scheduled depre- Foreign currency assets and liabilities are translated in accor-
its portfolio of instalment credit receivables. The ABS trans- ciation. Assets are all depreciated on a straight-line basis over dance with § 256a HGB (in conjunction with § 340h HGB).
action in place since the 2010/2011 financial year was closed Specific allowances are recognised to cover foreseeable risks their expected useful lives. The impairment loss previously The provisions contained in § 256a HGB are not applied if
out prior to the execution of the new ABS transaction. resulting from customer receivables. The general bad debt recorded on buildings in accordance with § 7 (5) no. 1 EStG was valuation units are created pursuant to § 254 HGB as hedges
allowance takes account of the general credit risk relating to retained in accordance with Art. 67 (4) sentence 1 EGHGB. for foreign currency items.
All of the bonds issued by the special purpose purchasing all business lines. Where deemed prudent and appropriate,
entity to refinance these transactions have been acquired by general allowances have also been recognised over and above Liabilities are stated at their expected settlement amount, The loss provisioning expense is reported in the income
Toyota Kreditbank GmbH. As a result of the sale of receivables the amounts allowed for tax purposes. including accrued interest. statement net of recoveries.
to the special purpose entity and the parallel acquisition of
bonds by the bank, the innate credit risk attached to the re- In the case of receivables from customers, specific allowances Deferred income comprises interest and fees arising primarily Deferred taxes are calculated on timing differences between
ceivables rests with Toyota Kreditbank GmbH. The receivable are recognised for contracts allocated to a default risk cat- from the instalment credit business. It is released to income the HGB carrying amounts and the tax bases of assets, liabil-
balances continue to be credit receivables for the bank in sub- egory or for which there has been a delay in payment in excess under the so-called "Rule-of-78 method". This item is also used ities and deferred items which are expected to reverse in
stance and are therefore retained on the balance sheet on the of a defined period. The level of the specific allowance is deter- to show special leasing payments from leasing business. By way subsequent years.
line "Customer receivables". mined on the basis of expected cash flows from each contract, of analogy with the leasing instalments, these are released on
a straight-line basis over the term of the contract.

12 – 13
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Deferred tax liabilities at 31 March 2015 result primarily from 5. Explanatory notes to the balance sheet
the different useful lives utilised to depreciate leasing assets
of the Toyota Kreditbank GmbH branch in Norway. Deferred 5.1 Cash reserve
tax assets arise at 31 March 2015 mainly for Germany, the The cash reserve includes foreign currency amounts of
branch in France and the subsidiary in Poland. The timing differ- TEUR 16,994 (31 March 2014: TEUR 25,030).
ences at 31 March 2015 relate mostly to the different carrying
amounts of leasing assets, provisions and write-downs. In addition to the balance with the Deutsche Bundesbank, cash
balances with central banks related to the National Bank of
Deferred taxes are measured on the basis of a combined income Poland amounting to TEUR 12,356 (31 March 2014:
tax rate which covers corporation tax, municipal trade tax and TEUR 17,105) and to the Central Bank of Russia amounting to
the solidarity surcharge. Deferred taxes relating to the foreign TEUR 4,638 (31 March 2014: TEUR 7,925).
branches of Toyota Kreditbank GmbH and to the foreign sub-
sidiaries are measured using the tax rates applicable in the re- Cash on hand amounting to TEUR 45 (31 March 2014: TEUR 20)
levant tax jurisdiction. and balances with central banks amounting to TEUR 33,881
(31 March 2014: TEUR 39,711) correspond to cash funds re-
Deferred tax liabilities were set off against deferred tax assets ported in the consolidated cash flow statement.
at an overall group level. A surplus of deferred tax assets over
deferred tax liabilities is not recognised on the basis of the
accounting option available in § 274 (1) sentence 2 HGB. 5.2 Receivables from banks
Receivables from banks have the following remaining terms:
The market values of derivative financial instruments have
been determined using IT-based valuation methods (discounted
Remaining term of 31/03/2015 31/03/2014
cash flow method). Fair values are determined by the parent
company, Toyota Financial Services Corporation. Derivative up to three months TEUR 104,077 40,030
financial instruments are not recognised since they are always more than three months and up to one year TEUR 20,006 20,029
used as hedging instruments in valuation units. Only the ac- more than one year and up to five years TEUR 9,008 9,000
crued interest is shown in the balance sheet.

In compliance with IDW RS BFA 3, for the purposes of calcula- Receivables from banks include foreign currency amounts
ting a possible net obligation on transactions with interest- totalling TEUR 114,567 (31 March 2014: TEUR 47,668).
related financial instruments allocated to the banking book,
an overall assessment is made of all interest-bearing assets
and liabilities (including derivatives), also taking account of 5.3 Receivables from customers
all risk-related and administrative costs expected to be in- The caption comprises instalment credits from the financing
curred until the transactions have been processed in full. This business, lease receivables, dealer financing credits and residual-
calculation takes account of specific refinancing opportu- value receivables payable on a daily basis. Specific and general
nities available in each relevant accounting period. There was allowances including a provision to cover doubtful receivables
no net obligation at the end of the reporting period, as a and the general credit risk have been deducted from the receiv-
result of which it was not necessary to recognise a provision ables.
at that date.
The figure stated for receivables from customers includes an
Interest rate swaps are used to manage the general interest amount of TEUR 37,473 (31 March 2014: TEUR 27,845) for
rate risk in the banking book. Interest rate risks are monitored receivables due from affiliated companies.
at a banking book level and risks quantified using a value-at
risk (VaR) model. The VaR model is used to demonstrate that Analysed by remaining terms, receivables from customers
the interest rate derivatives have a risk-reducing impact. are broken down as follows:

Remaining term of 31/03/2015 31/03/2014

up to three months TEUR 1,080,338 1,094,740


more than three months and up to one year TEUR 982,300 886,681
more than one year and up to five years TEUR 3,413,923 3,639,995
more than five years TEUR 553,900 495,656

Customer receivables include foreign currency amounts of TEUR 2,243,254 (31 March 2014: TEUR 2,418,700).

14 – 15
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

5.4 Bonds and other fixed interest bearing securities 5.8 Tangible assets
The figures shown under buildings comprise the purchase
Nominal amount values less scheduled depreciation of the business premises
Issuer Term begins (Million) Interest rate (%) Maturity of Toyota Kreditbank GmbH as well as a production facility
PLN 220.0 which is used by an affiliated company of the TKG Group.
Narodowy Bank Polski (Polish National Bank) 27/03/2015 1.50 03/04/2015
(EUR 53.9) Buildings used for Toyota Kreditbank GmbH’s own business
PLN 30 6-months have a carrying amount of TEUR 1,342 (31 March 2014: TEUR
Polish Republic 18/04/2014 25/01/2017
(EUR 7.3) WIBOR + 2.80 1,654). The corresponding land is leased on a long-term
PLN 30 6-months basis from Toyota Deutschland GmbH.
Polish Republic 18/04/2014 25/01/2017
(EUR 7.3) WIBOR + 2.80

Polish Republic 08/12/2014


PLN 30 6-months
25/01/2019 Toyota Kreditbank GmbH exercises the option available in Art.
(EUR 7.3) WIBOR + 2.15 67 (4) sentence 1 EGHGB, whereby carrying amounts of assets
that have been reduced by depreciation pursuant to § 254 HGB
These state bonds are eligible for a stock exchange listing and (old version) can be rolled forward for the purposes of depre-
are actually listed. ciating the buildings. The depreciation rate is unchanged at
2.5%, in accordance with section 7 (5) EStG.

5.5 Investments
Toyota Kreditbank GmbH has a 0.01% shareholding in
Liquiditäts-Konsortialbank GmbH i. L., Frankfurt am Main.

5.6 Leasing assets


Movements in leasing assets are shown in the following table
by parent company and subsidiary:

2014/15 2014/15 2014/15


Toyota Kreditbank Toyota Leasing Total
in TEUR GmbH GmbH

Acquisition cost 636,798 672,642 1,309,440


Opening balance
Translation difference -10,298 0 -10,298
Additions 244,422 201,809 446,231
Disposals 198,535 297,633 496,168
Closing balance 672,387 576,818 1,249,205
Depreciation 169,865 230,534 400,399
Opening balance
Translation difference -2,994 0 -2,994
Additions 106,797 99,198 205,995
Disposals 101,205 150,245 251,450
Closing balance 172,463 179,487 351,950
Carrying amounts 499,924 397,331 897,255

5.7 Intangible assets


Intangible assets consist mainly of EDP software.

16 – 17
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

5.9 Fixed assets movement schedule


Movements in investments in other companies, leasing assets
and intangible and tangible fixed assets are shown in the
following table:

Amounts in TEUR Cost Depreciation, amortisation and write-downs Carrying amounts

  01/04/2014 Currency Additions Disposals 31/03/2015 01/04/2014 Currency Additions Disposals 31/03/2015 31/03/2014 31/03/2015
translation translation

Participations 19 0 0 0 19 0 0 0 0 0 19 19

Leasing assets 1,309,440 -10,298 446,231 496,168 1,249,205 400,399 -2,994 205,995 251,450 351,950 909,041 897,255

Intangible assets 38,163 -952 3,007 277 39,941 31,566 -531 2,421 132 33,324 6,597 6,617

Buildings 32,626 0 6 0 32,632 28,382 0 820 0 29,202 4,244 3,430

Other operational and 30,191 -1,810 7,655 6,335 29,701 18,122 -1,373 3,174 1,378 18,545 12,069 11,156
office equipment

Tangible assets 62,817 -1,810 7,661 6,335 62,333 46,504 -1,373 3,994 1,378 47,747 16,313 14,586

Total 1,410,439 -13,060 456,899 502,780 1,351,498 478,469 -4,898 212,410 252,960 433,021 931,970 918,477

5.10 Other assets


This line item comprises mainly taxes receivable amounting to
TEUR 41,844 (31 March 2014: TEUR 16,847), receivables from
affiliated companies amounting to TEUR 3,570 (31 March 2014:
TEUR 1,219) as well as trade accounts receivable amounting
to TEUR 3,269 (31 March 2014: TEUR 4,577).

Other assets include foreign currency amounts of TEUR 13,778


(31 March 2014: TEUR 15,133).

5.11 Foreign currency assets


Assets denominated in foreign currencies totalled
TEUR 2,680,655 (31 March 2014: TEUR 2,753,725).

18 – 19
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

5.12 Prepaid expenses and deferred charges 5.15 Securitised liabilities TEUR 4,337 (31 March 2014: TEUR 3,881). Contributions set
This line item includes prepaid general administrative expenses As at the end of the previous years, securitised liabilities aside for investments in designated plan assets amounting
amounting to TEUR 6,128 (31 March 2014: TEUR 5,050), pre- reported at 31 March 2014 relate to issued commercial paper. to TEUR 128 (31 March 2014: TEUR 126) – which are not due
paid expenses for service work to be performed in conjunction until January of the following year – are reported at the end of
with full service lease business amounting to TEUR 5,000 Securitised liabilities include foreign currency amounts the reporting period in the line item "Provisions for pensions
(31 March 2014: TEUR 5,341) and guarantee fees of TEUR 206 equivalent to TEUR 387,151 (31 March 2014: TEUR 396,629) and similar obligations".
(31 March 2014: TEUR 738) paid to raise cash funds. Expenses and include liabilities denominated in British pounds equiva-
for service work to be performed relates primarily to the Spanish lent to TEUR 275,659 (31 March 2014: TEUR 323,396) and in The amount by which pension plan assets exceed obligations
branch of Toyota Kreditbank GmbH and the Polish subsidiary US Dollars equivalent to TEUR 111,492 (TEUR 73,233). All is presented in the balance sheet line "Surplus of plan assets
company. This expenditure is spread over the term of the rele- of these securitised liabilities fall due for payment during the over liabilities". The designated plan assets had an acquisition
vant leases. financial year ending 31 March 2016. cost of TEUR 4,552 (31 March 2014: TEUR 3,965).

Other provisions consist mainly of provisions for dealer


5.13 Liabilities to banks 5.16 Other liabilities bonuses, personnel related obligations, maintenance costs,
The following shows an analysis, by remaining terms, of bank This item comprises mainly payables to affiliated companies, outstanding supplier invoices, pending losses on onerous
liabilities having fixed terms or notice periods: including liabilities relating to the factoring business of the contracts and litigation.
Italian branch of Toyota Kreditbank GmbH amounting to
31/03/2015 31/03/2014
TEUR 172,203 (31 March 2014: TEUR 163,618), payables to
up to three months TEUR 352,440 468,735 contract dealerships amounting to TEUR 9,175 (31 March
more than three months and up to one year TEUR 647,338 589,409 2014: TEUR 16,066), trade accounts payable amounting to
more than one year and up to five years TEUR 1,622,852 1,490,772 TEUR 6,054 (31 March 2014: TEUR 4,791) and tax liabilities
more than five years TEUR 15,737 17,445 amounting to TEUR 5,447 (31 March 2014: TEUR 3,001).
This line item also includes unrealised exchange gains of
Included in liabilities to banks are foreign currency amounts TEUR 3,973 (31 March 2014: TEUR 6,342), resulting from the
equivalent to TEUR 675,787 (31 March 2014: TEUR 783,923). currency translation of the allocated branch capital and loans
of Toyota Kreditbank GmbH.

5.14 Liabilities to customers In total, other liabilities include foreign currency liabilities
Liabilities to customers with fixed terms or notice periods are amounting to TEUR 24,482 (31 March 2014: TEUR 31,710).
analysed, by remaining terms, as follows:
Other liabilities at 31 March 2015 include payables to the
31/03/2015 31/03/2014
shareholder of the parent company, Toyota Financial Services
up to three months TEUR 388,183 304,585 Corporation, amounting to TEUR 311 (31 March 2014:
more than three months and up to one year TEUR 684,056 608,898 TEUR 311).
more than one year and up to five years TEUR 1,300,861 1,477,486
more than five years TEUR 5,126 0
5.17 Deferred income
The liabilities relate mainly to payables to affiliated The balance is made up primarily of interest and fees in con-
companies amounting to TEUR 2,260,138 (31 March 2014: nection with the instalment credit business and attributable
TEUR 1,819,182). to future periods, as well as upfront payments arising in con-
nection with lease contracts. This item also includes discounts
Liabilities to customers include foreign currency liabilities of of TEUR 24 (31 March 2014: TEUR 50).
TEUR 1,664,334 (31 March 2014: TEUR 1,603,086).

5.18 Accruals and provisions


Marketable securities designated to cover specified pension
obligations and separated from other assets by Toyota Kredit-
bank GmbH in conjunction with a Contractual Trust Agreement,
are offset against the corresponding obligations. Designated
plan assets with a fair value of TEUR 5,045 (31 March 2014:
TEUR 4,140) compare with obligations amounting to

20 – 21
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

5.19 Subordinated liabilities 6. Explanatory notes to the income statement


This item comprises seven deposits from Toyota Motor
Finance (Netherlands) B.V., Amsterdam, Netherlands.
6.1 Other operating income
Interest rate Interest rate Renewed interest rate This item consists mainly of leasing revenues of TEUR 272,056
Term begins Million (%) (applicable until) to be based on Maturity
(2013/2014: TEUR 304,406). Rent and other services charged
07/11/2008 RUB 350.0 9.60 06/11/2015 Fixed interest rate p. a. 06/11/2015 to Toyota Group companies totalled TEUR 4,890 (2013/2014:
(EUR 5.2) TEUR 5,118). This item includes a figure of TEUR 2,478
28/01/2011 40.0 0.904 28/04/2014 3-months EURIBOR 28/01/2016 (2013/2014: TEUR 1,798) attributable to other periods.

11/03/2011 RUB 550.0 8.16 12/03/2018 Fixed interest rate p. a. 12/03/2018


(EUR 8.8)
6.2 Depreciation and amortisation of intangible assets,
14/03/2007 PLN 69.5 2.15 16/06/2014 3-months WIBOR 14/03/2019 tangible fixed assets and leasing assets
(EUR 17.0)
Depreciation of leasing assets relating to the branches of Toyota
01/08/2012 RUB 850,0 8.66 01/08/2019 Fixed interest rate p. a. 01/08/2019
Kreditbank GmbH in France, Sweden, Spain, Norway, to Toyota
(EUR 13.6)
Leasing Polska Sp. z.o.o. and to Toyota Leasing GmbH amounted
to TEUR 204,426 (2013/2014: TEUR 223,750).
Interest expense on subordinated liabilities for the financial
year amounted to TEUR 3,633 (2013/2014: TEUR 2,256).
6.3 Other operating expenses
In the event of the bank’s insolvency, compromise settle- This item consists mainly of losses on the disposal of items of
ments or similar proceedings to prevent the bank’s insolvency, operational and office equipment amounting to TEUR 1,115
the liabilities are subordinated behind the unsubordinated (2013/2014: TEUR 795) and expenses relating to leasing
claims of all other creditors. There is no option to convert the business amounting to TEUR 6,568 (2013/2014: TEUR 4,655).
subordinated liabilities before their maturity date. Other operating expenses include an expense of TEUR 2,070
(2013/2014: TEUR 1,127) relating to interest adjustments
Accrued interest at the end of the reporting period amounted arising from discounting long-term provisions. Other opera-
to TEUR 376 (31 March 2014: TEUR 491). ting expenses includes prior year expenses of TEUR 2 (2013/
2014: TEUR 8) resulting from the ongoing tax field audit in
Germany.
5.20 Foreign currency liabilities
Liabilities denominated in foreign currencies total Other operating expenses includes exchange rate losses
TEUR 3,191,439 (31 March 2014: TEUR 3,121,429). amounting to EUR 3,788 (2013/2014: TEUR 23), with the
increase compared to the previous year being attributable to
the measurement of allocated branch capital.

6.4 Extraordinary expenses


Extraordinary expenses amounting to TEUR 19,960 (2013/
2014: TEUR 0) relate entirely to the reimbursement of admin-
istrative fees to customers following the ruling of the German
Federal Court of Justice (BGH) in October 2014 regarding the
time limit for bringing claims in Germany.

22 – 23
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

6.5 Income taxes 7.2 Valuation units


This item comprises current German and foreign income taxes. As a general rule, the interest rate/currency swaps and forward
currency contracts are matched by a liabilities-side hedged item
FY 2014/15 FY 2013/14
with a corresponding opposite risk profile (micro-hedge).
Expected tax expense/ income (-) at an income tax rate of 32.45%
28,421 40,311
in Germany for the 2013/14 financial year The interest rate swaps are not matched by any comparable
Tax rate differences on foreign earnings - 3,330 - 2,973 liabilities-side underlying items. These swaps are used for
Non-deductible expenses - 1,123 6,261 portfolio hedging purposes (macro-hedge). The risk mitigating
Other 253 - 217 effect is documented by means of various monthly calculations.
Reported tax expense/ income (-) 24,221 43,382

The rules for the offsetting measurement of hedged and hedg-


The effective tax rate was 27.7% (2013/2014: 34.9%). ing items in conjunction with interest rate/currency swaps
and forward currency contracts were applied using the so-called
"Through Posting Method" (Durchbuchungsmethode). Fair
7. Other disclosures value gains and losses arising on hedged and hedging items
(including cash flows) will offset each other over the terms of
7.1 Derivative transactions those items due to the fact that amounts, maturities, interest
Derivative instruments have been entered into in order to rates, currency, interest rate revision and repayment dates
interest and currency risks. These are interest swaps, are identical.
interest/currency swaps and currency futures which are used
exclusively for hedging purposes. The carrying amounts of underlying transactions included in
valuation units pursuant to § 254 HGB and hedged volumes
Interest rate swaps are used to manage the interest rate risks at the balance sheet date were as follows:
in the banking book.

A Total Return Swap is in place to cover the currency and country Underlying
risk for Russia. This swap relates to the issue of subordinated Amounts in TEUR transactions Hedged amount Maximum term
loan of RUB 350 million by Toyota Motor Finance (Netherlands) Interest rate/currency risks 253,121 253,121 2017
B.V., Amsterdam, Netherlands to the bank’s Russian subsidiary. Currency risks 387,151 387,151 2015
An appropriate provision has been recognised to cover the Total amount 640,272 640,272
negative fair value of the instrument.

Derivative financial instruments comprised the following: 7.3 Other financial obligations and disclosures reported
below the balance sheet (liabilities)
Financial commitments not recognised on the balance sheet
or reported below the balance sheet as contingent liabilities
Nominal Nominal Fair values Fair values Fair values Fair values
amounts amounts positive positive negative negative relate to the commitment to contribute additional capital of
in TEUR 31/03/2014 31/03/2015 31/03/2014 31/03/2015 31/03/2014 31/03/2015 TEUR 100 in conjunction with the investment in Liquiditäts-
Konsortialbank GmbH i. L., Frankfurt am Main.
Interest rate risks 277,850 87,850 0 0 7,642 3,834
― interest swaps
Interest rate/currency risks 277,868 252,748 1,112 40,856 22,856 0 Obligations arising from lease, rental, leasing and maintenance
― interest rate/currency swaps agreements at the end of the reporting periods are as follows:
Currency risks 396,929 387,621 1,554 34,167 2,007 655
― forward currency contracts
Total return swap 10,150 10,150 0 0 3,536 5,034 Due by 31 March 2016 TEUR  7,604
Derivative instruments - total 962,797 738,369 2,666 75,023 36,041 9,523 Due between 1 April 2016 and 31 March 2020 TEUR 9,875
Due after 31 March 2020 TEUR 1,878
Total TEUR 19,357
The above figures are "dirty prices" which represent the sum
of "clean price" and accrued interest. of which due to affiliated companies TEUR 4,294

Commitments to lessees of Toyota Leasing GmbH for


ordered vehicles amounted to TEUR 21,864 (31 March 2014:
TEUR 24,817).

24 – 25
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Irrevocable credit commitments reported below the balance 7.6 Executive Management (Geschäftsleitung) of the Parent Company
sheet mainly relate to commitments for loans to dealers and The following persons acted as directors during the year under review:
retail customers and are subject to the normal credit monitor-
ing processes that apply to all credit exposures. An increased — Christian Ruben, Diplom-Kaufmann
credit loss risk has not been identified. Claims could arise at — Ivo Ljubica, Diplom-Ökonom
any time.
Mr. Ruben and Mr. Ljubica are directors (Geschäftsführer) of both Toyota Kreditbank GmbH and Toyota Leasing GmbH.

7.4 Auditors’ fees Remuneration paid to board members during the financial year under review totalled TEUR 772.
KPMG AG Wirtschaftsprüfungsgesellschaft is the external
auditor of Toyota Kreditbank GmbH. Fees charged by KPMG AG Pension provisions in respect of former members of management amounted to TEUR 3,914. Pension payments in the financial
Wirtschaftsprüfungsgesellschaft and by non-German entities year under review amounted to TEUR 268.
of the KPMG network for the financial year were as follows:

FY 2014/15 FY 2013/14 7.7 Receivables from members of the Executive Management of the Parent Company
Year end audits TEUR 744 831 Receivables from Board Members at the end of the reporting period totalled TEUR 0.
Other attestation services TEUR 0 135
Tax advisory services TEUR 216 405
Other services TEUR 197 303 7.8 Number of employees
Total TEUR 1,157 1,674 The average number of persons employed during the year under review was 705 (2013/2014: 704), comprising 250
(2013/2014: 250) in Germany, 81 (2013/2014: 83) in France, 27 (2013/2014: 26) in Sweden, 28 (2013/2014: 29) in Norway,
47 (2013/2014: 46) in Spain, 12 (2013/2014: 17) in Italy, 153 (2013/2014: 146) in Russia and 107 (2013/2014: 108) in Poland.
7.5 Related party transactions
Related parties are defined as persons or entities that can be
influenced by the reporting entity or who can exercise influence 7.9 Name and place of business of the parent company, information about the consolidated financial statements
over the Group. Persons or entities that are already included Immediate parent company:
as consolidated companies in the consolidated financial state-
ments of Toyota Kreditbank GmbH are not disclosed below. Toyota Financial Services Corporation
Nagoya Lucent Tower 15F, 6-1, Ushijima-cho, Nishi-ku, Nagoya 451-6015, Japan
Toyota Financial Services Corporation, Nagoya, Japan, is the
sole shareholder of Toyota Kreditbank GmbH. Business relations Ultimate parent company:
between the companies are conducted on an arms' length basis.
Toyota Financial Services Corporation also guarantees the Toyota Motor Corporation
Group’s European commercial paper programme. 1, Toyota-cho, Toyota City, Aichi Prefecture 441-8571, Japan

Toyota Motor Finance (Netherlands) B.V. provides Toyota Kredit-


bank GmbH refinancing funds subject to normal market con- The consolidated financial statements of Toyota Kreditbank GmbH for the year ended 31 March 2015 are published in Germany
ditions, and is also a subordinate lender. Toyota Motor Finance in the Electronic Federal Gazette. Toyota Kreditbank GmbH is part of the sub-group of Toyota Financial Services Corporation,
(Netherlands) B.V. also continues to guarantee the joint capital Nagoya, Japan. The financial statements of the sub-group are included in the consolidated financial statements of Toyota
market programme of Toyota Bank Polska S.A. and Toyota Motor Corporation, Toyota City, Japan. The consolidated financial statements are disclosed in Nagoya and Toyota City, Japan.
Leasing Polska Sp. z o.o. Liabilities at the end of the reporting
period amounted to TEUR 2,345,554 (31 March 2014: TEUR
2,472,565), expenses during the year under report totalled Cologne, 16 July 2015
TEUR 62,168 (2013/2014: TEUR 66,858).
Toyota Kreditbank GmbH
In order to support sales promotion actions, Toyota Kredit-
bank GmbH receives financial subsidies from the importer
companies of Toyota Motor Corporation, Toyota City, Japan.


Christian Ruben Ivo Ljubica

26 – 27
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Consolidated Cash Flow Statement for Toyota Kreditbank Group for the period Breakdown of cash funds at the end of the period:
1 April 2014 to 31 March 2015
31/03/2015 31/03/2014
The cash flow statement shows the changes in cash funds for the group of Toyota Kreditbank GmbH. The cash flow statement
  TEUR TEUR
consists of the cash flows from operating, investing and financing activities. The sum of these cash flows is in line with the
change of the cash funds. The cash flow statement for the group of Toyota Kreditbank GmbH has been drawn up in accordance Cash 45 20
with German Accounting Standard No. 2 and 2-10 of the German Financial Reporting Standards Board. Deposits with central banks 33,881 39,711
Liquid funds at the end oft he period 33,926 39,731

2014/15 2013/14
Consolidated cash flow statement of Toyota Kreditbank Group TEUR TEUR
Consolidated Statement of Changes in Equity of Toyota Kreditbank GmbH as at 31 March 2015
1 Net income for the year 83,322 79,983 Breakdown of consolidated equity:
  Non-cash items on reconciling items to the cash flow from operating activities: 0

2 Depreciation, amortisation, write-downs/allowances and reversals of write-downs/ 249,096 263,260 Earnings Group net
allowances in respect of receivables, tangibles and financial assets Capital Revenue brought income for Translation
TEUR Share capital surplus reserves forward the year differences Equity
3 Increase/decrease in provisions 4,934 2,251
4 Other non-cash income/expenses 0 0 As at 31 March 2013 30,000 300,201 304,523 0 109,731 1,244 745,699
5 Gains/losses on the sale of financial and tangible assets 5,326 -6,812 Addition from net 0 0 0 0 79,983 0 79,983
6 Other adjustments (net) -206,095 -180,960 income
7 Sub-total 136,583 157,722 Profit retained 2014 0 0 83,131 0 -83,131 0 0
  Change in assets and liabilities relating to operating
activities: Dividends paid 0 0 0 0 -26,600 0 -26,600
8 Receivables from Proceeds from capital 0 45,642 0 0 0 0 45,642
a — banks -67,867 -33,978 injections
b — customers 49,658 -135,815 Translation differences 0 0 -684 0 0 -27,935 -28,619
9 Securities (not classified as fixed assets) -35,561 10,586 As at 31 March 2014 30,000 345,843 386,970 0 79,983 -26,691 816,105
10 Other assets relating to operating activities -23,861 6,167 Addition from net 0 0 0 0 63,362 0 63,362
11 Liabilities due to income
a — banks 93,354 20,342 Profit retained 2015 0 0 47,453 0 -47,453 0 0
b — customers -39,137 60,510
12 Securitised debt 33,082 -30,430 Dividends paid 0 0 0 0 -32,530 0 -32,530
13 Other liabilities relating to operating activities -39,171 -30,857 Proceeds from capital 0 0 0 0 0 0 0
14 Interest and dividends received 352,653 367,564 injections
15 Interest paid -122,839 -135,234 Translation differences 0 0 809 0 0 -35,711 -34,902
16 Extrardinary payments -19,960
17 Income tax paid -23,679 -51,685 As at 31 March 2015 30,000 345,843 435,232 0 63,362 -62,402 812,035
18 Cash flow from operating activities 293,255 204,892
19 Cash received from disposals of
a — tangible fixed assets -1,124 4,598
b — leasing assets 245,584 303,957 Toyota Kreditbank GmbH’s capital is wholly owned by Toyota Financial Services Corporation (Japan).
c — intangible fixed assets 145 0
20 Cash paid for investments in 0 The Board of Directors of the Toyota Kreditbank GmbH will propose to the shareholders’ meeting that a dividend of TEUR 28,000
a — financial assets 0 0 from the net profit of Toyota Kreditbank GmbH (reduced by withholding tax payable in Germany) will be transferred to the
b — tangible fixed assets -7,661 -8,641 shareholder Toyota Financial Services Corporation (Japan).
c — leasing assets -446,231 -422,768
d — intangible fixed assets -3,007 -3,179
21 Cash flow from investing activities -212,294 -126,033
22 Cash received from equity provided 0 45,642
23 Dividends to Shareholder -32,530 -26,600
24 Movement from subordinated loans -20,000 -60,000
25 Cash flow from financing activities -52,530 -40,958
26 Cash relevant change in cash funds (Total calculated on the basis of 17,20,24) 28,431 37,901
27 Change in cash funds due to exchange rates, consolidation and valuation -34,236 -22,003
28 Cash funds at the beginning of the period 39,731 23,833
29 Cash funds at the end of the period 33,926 39,731

28 – 29
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Segment information for the Toyota Kreditbank GmbH Group for the period
1 April 2014 to 31 March 2015 (1/2)

The Toyota Kreditbank Group operates in Germany and, via its branches, in France, Sweden, Norway, Spain and Italy. The Group
also has subsidiaries in Poland and Russia. In the year under review, the Group was engaged in the instalment credit and leasing
business as well as in the financing of dealers’ car inventories, and provided loans for car dealers’ real estate and working capital.

Amounts are allocated to segments on the basis of the location of the registered office of the relevant branches and Group entities.
Due to the close connection of the business activities with TKG head office, the special purpose entity Koromo S.A., Luxembourg,
is allocated to the segment "Germany". All amounts relating to the balance sheet and income statements are presented in TEUR.

Germany France Sweden Norway Spain Italy Poland


All figures are in TEUR,
unless otherwise stated 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14

Interest income 90,671 101,033 33,137 33,421 12,390 12,617 27,850 28,072 36,487 34,980 3,989 3,864 22,016 22,810
comprising:
― Income from retail financing 75,302 81,051 28,281 28,344 11,546 11,464 27,145 27,319 34,945 33,522 0 0 6,782 7,853

14,858 16,821 4,789 5,027 842 1,151 680 706 878 860 3,555 3,271 3,171 3,951
― Income from dealer financing

Interest expense 23,169 35,683 7,060 7,703 4,464 6,928 12,212 12,022 7,024 8,596 848 649 8,693 9,507
Net interest result 67,502 65,350 26,077 25,718 7,926 5,689 15,638 16,050 29,463 26,384 3,141 3,215 13,323 13,303
Risk provisioning expense -13,982 -2,567 -3,940 -6,512 -255 -366 -723 -1,462 -6,242 -7,303 -1,596 -1,545 -828 -2,148
Net commission result -2,677 -4,365 555 513 -2,693 -2,781 1,781 479 -12,939 -6,333 2,119 1,700 -367 14
Profit/loss leasing business 28,955 33,937 22,118 31,044 7,399 7,833 879 1,100 1,902 1,961 0 0 -355 -230
Other operating income/
-2,844 -1,496 -410 -172 -522 -421 -760 -304 264 -575 -342 -506 -553 -185
expenses, net
Administrative expenses -46,437 -45,003 -15,312 -15,323 -5,685 -5,014 -5,848 -5,685 -8,982 -8,197 -2,928 -2,762 -9,947 -9,828
Profit/loss from 30,517 45,856 29,088 35,268 6,170 4,940 10,967 10,178 3,466 5,937 394 102 1,273 926
ordinary activities
Extraordinary Expenses -19,960 0 0 0 0 0 0 0 0 0 0 0 0 0
Taxes -1,303 -18,898 -8,305 -13,840 -8 -13 0 -5 -5,897 -4,529 -598 55 -3,266 -1,346
Net income for the year 9,254 26,958 20,783 21,428 6,162 4,927 10,967 10,173 -2,431 1,408 -204 157 -1,993 -420
Ratio of expenses/income 51.07% 48.17% 31.68% 26.83% 46.94% 48.59% 33.34% 32.81% 48.06% 38.24% 59.54% 62.64% 82.56% 76.17%
before taxes

Germany France Sweden Norway Spain Italy Poland


All figures are in TEUR, unless
otherwise stated 03/2015 03/2014 03/2015 03/2014 03/2015 03/2014 03/2015 03/2014 03/2015 03/2014 03/2015 03/2014 03/2015 03/2014

Liquid funds 16,931 14,691 0 0 0 0 0 0 1 1 0 8 12,356 17,106


Receivables from banks 110,843 95,991 9,020 20,971 3,730 1,018 32,709 145 3 3 78,248 97,758 169 3,498
Customer receivables 1,966,547 2,010,038 733,239 724,684 285,324 282,449 652,902 627,131 798,626 691,526 288,795 272,125 332,007 301,833
Leasing assets 397,331 442,109 295,334 261,774 176,657 173,942 10,985 17,544 16,948 13,673 0 0 0 0
Liabilities due to banks 1,907,966 1,796,618 183,652 155,384 3 3 26,045 8,416 200,448 181,161 0 28 49,006 77,778

Liabilities due to customers 504 80,323 514,516 564,618 402,923 398,558 572,551 546,708 261,288 231,750 100 100 312,325 228,899

Securitised debt 548,141 515,060 0 0 0 0 0 0 0 0 0 0 0 0


Subordinated liabilities 40,063 60,081 0 0 0 0 0 0 0 0 0 0 17,028 16,685
Equity/allotted capital 357,883 363,548 133,760 112,332 43,247 39,994 86,490 81,015 55,841 54,432 82 75 26,191 25,648

30 – 31
Annual Report of Toyota Kreditbank GmbH Group

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Segment information for the Toyota Kreditbank GmbH Group for the period
1 April 2014 to 31 March 2015 (2/2)

Russia Consolidation Total Total


All figures are in TEUR, unless
otherwise stated 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14

Interest income 126,267 133,536 -336 -2,894 352,471 367,439


comprising:
-Income from retail financing 103,926 114,790 0 0 287,927 304,343
-Income from dealer financing 15,181 17,795 0 0 43,954 49,582
Interest expense 63,161 64,733 -336 -2,894 126,295 142,927
Net interest result 63,106 68,803 0 0 226,176 224,512
Risk provisioning expense -9,388 -11,281 0 0 -36,954 -33,184
Net commission result -5,085 -10,741 0 0 -19,306 -21,514
Profit/loss leasing business 0 0 0 0 60,898 75,645
Other operating income/
-1,282 -727 -491 -489 -6,940 -4,875
expenses, net
Administrative expenses -20,622 -25,038 491 489 -115,270 -116,361
Profit/loss from ordinary activities 26,729 21,016 0 0 108,604 124,223
Extraordinary Expenses 0 0 0 0 -19,960 0
Taxes -5,906 -5,664 0 0 -25,283 -44,240
Net income for the year 20,823 15,352 0 0 63,361 79,983
Ratio of expenses/income before 36.35% 43.67% 44.19% 42.50%
taxes

Russia Consolidation Total Total


All figures are in TEUR, unless
otherwise stated 03/2015 03/2014 03/2015 03/2014 03/2015 03/2014

Liquid funds 4,638 7,925 0 0 33,926 39,731


Receivables from banks 77,959 43,007 0 -17,577 312,681 244,814
Customer receivables 973,021 1,207,286 0 0 6,030,461 6,117,072
Leasing assets 0 0 0 0 897,255 909,042
Liabilities due to banks 347,613 419,567 0 -17,577 2,714,733 2,621,378
Liabilities due to customers 376,535 428,921 0 0 2,440,742 2,479,877
Securitised debt 0 0 0 0 548,141 515,060
Subordinated liabilities 28,324 36,259 0 0 85,415 113,025
Equity/allotted capital 108,541 139,061 0 0 812,035 816,105

32 – 33
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Toyota Kreditbank GmbH


Group Management Report for the 2014/2015 financial year

36 A. General Information on the Toyota Kreditbank Group


38 B. Report on Economic Position
1. General and sector specific environment
2. Review of operations
3. Analysis of net assets, financial position and results of operations
a. Earnings performance
b. Net assets and financial position
4. Key performance indicators
50 C. Events after the end of the reporting period
50 D. Opportunities and Risks Report
1. Risk management
a. Risk management organisation
b. Risk management process
c. Risk strategy
d. Relevant risk categories
e. Risk-bearing capacity
2. Risk categories
a. Credit risk
b. Market risk
c. Liquidity risk
d. Operational risks
e. Business risk
3. Summarised description of risk situation
69 E. Outlook
1. Future macro-economic situation
2. Review of operations of the Toyota Kreditbank Group
72 Country by Country Reporting
73 Auditors’ Report

34 – 35
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

A. General Information on the Toyota Kreditbank Group Toyota Kreditbank is a classic "captive bank", whose principal The Toyota Kreditbank Group provides financing to Toyota
activity is the financing of Toyota and Lexus brand vehicles and Lexus dealerships for new, showroom and used cars. It
The Toyota Kreditbank Group offers – via its manufacturing manufactured by the Toyota Group. In the case of new cars, also provides investment loans for the purchase or moderni-
based companies – financial services aimed at supporting car financing is provided primarily for Toyota and Lexus brand sation of company real estate and working capital loans.
sales. A wide range of financing products is available to private vehicles. In the case of used cars, other brands are also fi-
and commercial customers on the one hand and to Toyota and nanced. The range of services on offer is only comparable to As well as servicing the German market, financial products are
Lexus dealers on the other. that of a "universal" bank to a limited extent, since the busi- also provided in other European countries where the Toyota
ness model is aimed almost entirely at financing the relevant Kreditbank Group has branches and subsidiaries. The Toyota
Toyota Financial Services Corporation, based in Japan, is the brands. For this reason, performance is dependent to a large Kreditbank Group has branches in France, Sweden, Norway,
parent company of the sub-group and owns all of the shares extent on the volume of cars sold within the operating terri- Spain and Italy as well as subsidiaries in Poland and Russia.
of the entities within the Toyota Kreditbank Group. The ulti- tory. The financing products offered by the Toyota Kreditbank
mate parent company is the Japanese car manufacturer, Toyota Group for Toyota and Lexus vehicles have to compete with In terms of consumer credit business with private and busi-
Motor Corporation, which, in turn, owns 100% of the shares those offered by other banks and German savings banks ness customers, the branches and subsidiaries – with the
of Toyota Financial Services Corporation. The companies con- (Sparkassen). exception of the branch in Italy – offer financing products
cerned also work very closely from a marketing perspective. comparable to those offered in Germany. The product range
The range of financing products on offer in Germany com- also covers the sale of leasing products and the arranging of
prises traditional loan contracts, final instalment financing insurance policies. In addition, the Toyota and Lexus dealers
Toyota Motor Corporation (TMC) arrangements and the sale of leasing products. This range of can apply for investment and working capital loans and are
financing products is supplemented by so-called "package" able to finance new, showroom and used cars via the Group.
100% products offered in conjunction with Toyota Insurance Service The branch in Italy only provides financing to dealerships.
and Aioi Nissay Dowa Life Insurance of Europe AG, Ismaning,
Toyota Financial Services Corporation (TFSC) and with Toyota Motor Europe SA/ NV Brussels, Belgium. In The key performance indicators used by the Toyota Kredit-
addition to a reasonable and fixed financing amount, these bank Group are based on regulatory requirements on one
all-inclusive products include access to TOYOTA service facili- hand and the interests of the shareholder on the other.
ties, a follow-on and mobility guarantee and credit insurance.
Americas Europe Africa Asia Pacific The customer can also opt to add car insurance (with rebate
protection) to the package.

Management system

Toyota Financial Market Penetration Ratio of new registrations to financed vehicles


Toyota Kreditbank Group
Services United Kingdom
Cost-income ratio Ratio expense/ income before tax
Financial
The Toyota Financial Services Group is represented in 35 coun- Average accounts Average number of accounts
tries, covering three main regions, namely the Americas,
Overall capital ratio Ratio of equity funds to risks
Europe/Africa and Asia Pacific. The Europe/Africa region con- Regulatory
sists of the two sub-groups, Toyota Financial Services United requirements Aggregate amount of risk limits (for risk-bearing capacity
Risk appetite
Kingdom and the Toyota Kreditbank Group. purposes) divided by the risk coverage amount

Toyota Kreditbank GmbH is the parent company of the Toyota


Kreditbank Group and has its registered office in Cologne.

Toyota Kreditbank GmbH


> 99%

< 1%
Toyota Leasing GmbH ZAO Toyota Bank Russia Toyota Bank Polska

Toyota Leasing Polska

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Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

B. Report on Economic Position Operating territory


Economic output in the Euro area grew in 2014 for the first
1. General and sector specific environment time since 2011, with gross national product (GNP) rising by
0.9% (compared to a drop of 0.5% in the previous year).
The global economy
The pace of global economic growth during the calendar year Economic indicators in Europe
2014 remained at a similar level to the previous year. According GNP1 GNP1 CPI2 CPI2
to figures issued by the International Monetary Fund (IMF), Change compared Change compared Change compared Change compared to
to previous year % to previous year  % to previous year % previous year %
economic output expanded – as in the calendar year 2013 – by
Countries 2014 2013 2014 2013
3.4%. Although the world's emerging economies again out-
paced industrial countries, growth rates were not as high as in European Union 1.4 0.2 0.5 1.5
previous years. Emerging economies, which had been the Euro area 0.9 -0.5 0.4 1.3
principal driver of global growth in recent years, grew by 4.6% Germany 1.6 0.2 0.8 1.6
France 0.4 0.3 0.6 1.0
in the calendar year 2014, compared with 5.0% one year earlier.
In this context, it is also worth mentioning the slow-down of Norway 2.2 0.8 2.0 2.1
the Chinese economy, which slipped from 7.8% in the calendar Sweden 2.1 1.5 -0.2 0.0
year 2013 to 7.4% in 2014. After growing by 1.6% in the Spain 1.4 -1.2 -0.2 1.5
Italy -0.4 -1.9 0.2 1.3
calendar year 2013, the Japanese economy contracted by 0.1%
Poland 3.3 1.6 0.0 0.9
in 2014, mainly as a result of the value added tax rate hike in
Russia 0.6 1.3 7.8 6.8
April 2014.
1
Source: IMF
Real gross national product based on 2005 prices
The economies of the world's industrial countries grew faster 2
Consumer Price Index covering all products
than one year earlier, with the growth rate edging up overall
from 1.4 to 1.8%.
The Euro area was able to maintain the favourable trend which The pace of growth of the Russian economy continued to slow
had started in the second quarter of 2013 and was therefore down, falling from a modest 1.3% in the calendar year 2013 to
able to post a moderate growth rate for the current year. That only 0.6% in 2014. The main factors for this continued trend
said, economic weaknesses prevailing in some of the major were lower prices during the second half of 2014, ongoing
economies, such as Italy and France, continued to exert a geopolitical risks as well as the resulting economic sanctions
negative impact, thus preventing the Euro area posting an even imposed by the USA and the EU against Russia.
faster growth rate. By contrast, good progress was made in
Ireland, Portugal and Spain, all of which had previously suf-
fered significantly as a result of the financial crisis. Similarly,
the employment market improved slightly within the European
Currency Union as a whole, with the unemployment rate fall-
ing from 12.1% in the calendar year 2013 to 11.6% in 2014.

One of the factors driving this positive development has been


the expansionary monetary policy applied by the European
Central Bank (ECB). After reducing its reference rate to a new
historical low of 0.05% in September 2014, for instance, inter-
est rates continued to drop for short- and long-term maturities.

The German economy continued the recovery phase started


during the calendar year 2013, with the first and fourth quarters
in particular contributing to an overall growth rate of 1.6% in
2014, compared with the 0.2% reported one year earlier. The
principal factors driving this economic growth were domestic
demand, a strong employment market and a sustained increase
in investment volumes.

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Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Currency developments The Russian Rouble had already depreciated significantly during
Under the prevailing macroeconomic and political conditions, the calendar year 2013 as a reaction to investors' general loss
some exchange rates remained highly volatile during the year of confidence in the world's emerging economies. This trend
under review. The US Dollar/Euro exchange rate fluctuated continued throughout the year under review, culminating in
over the twelve month period between 1.05 and 1.39. particularly hefty loss in value during the fourth quarter 2014,
At the end of the reporting period, the Euro, at almost 1.07, was reflected in fluctuations in the EUR/RUB exchange rate of
stronger than at the beginning of the financial year. The Japanese between 49.92 and 91.52. By March 31 2015, the exchange
Yen gained 10.4% in value against the Euro over the twelve rate had recovered somewhat to 62.44. Lower oil prices com-
month period, whereas the Russian Rouble fell by 21.9% against bined with international economic sanctions against Russia
the Euro during the same period. exposed the country's underlying structural weaknesses and
brought about a further loss of confidence in Russia on the part
Exchange rates of potential investors. These negative developments all contri-
buted to the substantial decreases in the US Dollar and Euro
Currency 31/03/2015 31/03/2014
exchange rates described above.
Euro 1.0000 1.0000
US Dollar 1.0759 1.3788 The situation in the money and capital markets was also favour-
British Pound 0.7273 0.8282 ably influenced by the global economic recovery. The expan-
Japanese Yen 128.9500 142.4200 sionary monetary measures applied by the ECB were primarily
Norwegian Krone 8.7035 8.2550 aimed at combating deflationary worries and encouraging
Swedish Krone 9.2901 8.9483 banks to lend more. As a result of the quantitative easing
Russian Rouble 62.4400 48.7800
measures adopted, the European common currency lost in
Polish Zloty 4.0854 4.1719
value against various currencies, including the US Dollar, the
Source: Bloomberg British pound and the Japanese Yen.

Review of the automobile market


Global sales of passenger vehicles grew moderately in the
2014 calendar year. According to a study undertaken by the
Center Automotive Research of the University of Duisburg-
Essen, passenger vehicle sales were 3.8 percent up on the
previous year.

The Chinese and North American markets in particular made


good contributions to the overall moderate growth rate.
While the North American market expanded at an above aver-
age rate of 5.6%, the Chinese market performed even better,
posting a double digit growth rate of 11.9%.

The European automobile market grew slightly in the calendar


year 2014 (by 1.1%), after contracting one year earlier by
2.5%. The German automobile market performed somewhat
better than Europe as a whole during the calendar year 2014,
growing at a rate of 2.8%. The automobile market in Russia,
which had seen steady growth in previous years, contracted
as a result of the weakening economy. Total sales volume in
this market in 2014 fell by 10.3%, whereas in the calendar
year 2013, the figures had still been rising. Despite these
developments, Toyota once again chalked up a new sales
volume record in this difficult trading environment. Compared
to the 2013 calendar year, Toyota sold 6.2% more of its
Group-brand vehicles.

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Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

With worldwide sales of 10.23 million vehicles in the 2014 2. Course of business
calendar year, Toyota remained the world's largest automobile Despite that fact that economic conditions and developments
manufacturer. For the first time ever, more than ten million in the automobile sector were generally positive, the financial
Toyota vehicles were sold in a single calendar year. year 2014/2015 was nevertheless a challenging one for the
Toyota Kreditbank Group. In the wake of two rulings of the
New car registrations Toyota Europe German Federal Court of Justice (BGH) concerning the appro-
priateness and time limit for charging administration fees,
Toyota Kreditbank GmbH – like many other banks – became
CY 2014 CY 2013 CY 2012 CY 2011
exposed to a surge of reimbursement claims from customers in
Europe 888,015 847,540 837,969 822,386 Germany. The ensuing repayments had a negative impact on
The bank’s operating territory 514,692 486,901 411,087 398,743 the bank's earnings for the year.

Toyota was able to continue the positive trend in Europe in Key performance figures
terms of new registrations. Sales within the Toyota Kreditbank
Group's operating territory also increased on a calendar year
Disclosures in EUR million FY 2014/15 FY 2013/14
basis, rising year-on-year by 5.7% to 514,692 units, a slightly
better performance than the increase of the European market Credit disbursed to customers (before allowances) 6,186.6 6,299.0
as a whole. Thereof:
— retail customers 4,691.7 4,553.8
Toyota and Lexus models in Europe — contract dealerships 1,494.9 1,745.2
Leasing assets 897.3 909.0
Sales volume Sales volume Sales volume
CY 2014 CY 2013 CY 2012

All models 888,015 847,540 837,969


Thereof: Retail business
―Y  aris 181,105 184,795 201,923 Toyota Kreditbank Group's lending business is shaped pri-
―A  uris 142,105 131,928 83,012 marily by loans to retail customers. The bank's performance
in this sector is dependent to a large extent on the number
of new registrations in the territory in which it operates.
The Yaris and Auris remain Toyota's most popular models in
Europe. The overall range was also boosted by the addition of
New car registrations Toyota Kreditbank Group Europe New vehicle penetration
the Lexus NX. Hybrid vehicles continued to sell well, with the
total number sold worldwide in the past calendar year rising
FY 2014/15 FY 2013/14 FY 2014/15 FY 2013/14
to 1,266,070 million units. As a proportion of all Toyota and
Lexus vehicles sold, sales of hybrid vehicles continued to Germany 70,688 75,948 45.3% 43.3%
increase in 2014 – approximately 12.4% world-wide, almost France 75,919 76,670 30.7% 30.1%
20% in Europe and as much as 26.2% in Germany. Sweden 22,554 20,843 35.9% 38.6%
Norway 19,555 20,753 43.2% 39.3%
Spain 48,809 40,589 41.1% 36.6%
Poland 34,655 28,507 32.0% 34.5%
Russia 169,444 174,301 17.3% 23.1%
Total 441,624 437,611 30.0% 31.3%

New registrations in the territory in which the Group operates


rose by 0.9%. The number of financing and leasing contracts
for new vehicles went down by 3.5%. Despite the decrease in
the volume of new Toyota vehicles sold in Germany, the number
of new contracts signed in Germany (including lease contracts)
was maintained at the previous year's level thanks to an increase
in the penetration rate. clearly reflecting the success of the
bank’s attractive and competitively priced product range. The
new vehicle penetration rate fell slightly from 31.3% to 30.0%.

42 – 43
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Analysis of financing and leasing contracts Dealership financing


Number of new contracts concluded by the Toyota The Toyota Kreditbank Group provides loans to contract dealer-
Kreditbank Group ships to finance showroom cars, working capital and invest-
ments. In the field of inventory financing, the Toyota Kreditbank
Group is an important financing partner for dealerships with
FY 2014/15 FY 2013/14
operations focused on Germany, France, Spain, Italy and Russia.
Total financing contracts 141,264 149,338
New vehicles 90,497 99,050
Used vehicles 50,767 50,288 Dealership financing
Total leasing contracts 43,781 40,048
New vehicles 41,877 38,116 Disclosures in Working capital/
Used vehicles 1,904 1,932 EUR million investment loans Showroom vehicle financing
New car registrations 441,624 437,611
New vehicle penetration 30.0% 31.3% Change Change
Thereof: Financing 20.5% 22.6% 31/03/2015 31/03/2014 31/03/2015 31/03/2014
Thereof: Leasing 9.5% 8.7% Germany 95.0 101.4 -6.4 335.8 343.9 -8.1
Foreign 142.0 141.5 0.5 921.2 868.0 53.2
Total 237.0 242.9 -5.9 1,257.0 1,211.9 45.1

Analysis of financing and leasing contracts


Number of new contracts by country
Inventory financing volumes in Germany were slightly lower
than in the previous year in line with the overall development
Financing Leasing
of sales figures. This decrease was compensated for by the
increase recorded outside Germany. Overall, the total volume
Change Change
FY 2014/15 FY 2013/14 in % FY 2014/15 FY 2013/14 in % of dealership financing was at a high level during the year under
review. The volume of working capital credits continued to
Germany 51,811 53,828 -3.7 10,195 8,426 21.0 decrease in Germany, whilst rising slightly outside Germany.
France 13,891 14,442 -3.8 14,223 13,489 5.4
Sweden 11,609 11,041 5.1 4,336 4,987 -13.1
Overall, the Toyota Kreditbank Group strengthened its position
Norway 6,730 6,540 2.9 5,494 5,524 -0.5
as an important financing partner for dealerships.
Spain 20,029 15,296 30.9 1,228 900 36.4
Poland 4,598 4,624 -0.6 8,305 6,722 23.5
Russia 32,596 43,567 -25.2 0 0 0.0
Total 141,264 149,338 -5.4 43,781 40,048 9.3

The Toyota Kreditbank Group only operates in the field of


finance leasing via its branches in France, Sweden, Norway
and Spain and the subsidiary in Poland. In Germany, leasing
business is handled by the subsidiary, Toyota Leasing GmbH.

New business developed positively in general terms. Overall,


more contracts were concluded than in the previous year,
mainly reflecting increased demand outside Germany. In Spain,
the government funded stimulus programme "Plan PIVE" for
efficient vehicles was continued. Similarly, in France, the ECO
Bonus system encouraged the sale of hybrid models, whereby
the existence of attractive, comprehensive programmes re-
sulted in a shift between financing and leasing. The bank con-
tinued to offer financing arrangements in Sweden and Norway
at extremely favourable annual interest rates. Due to the
ongoing Ukraine crisis, the number of new contracts signed
in Russia fell by 25.2%.

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Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

3. Analysis of net assets, financial position and results of General administrative expenses
operations The following table shows the breakdown of general
administrative expenses.
a. Earnings performance
Group net income for the year fell from EUR 80.0 million to
EUR 63.4 million. The decrease was primarily attributable to the FY 2014/15 FY 2013/14 Change Change
reimbursement of administration fees in Germany. The Group in EUR million in EUR million in EUR million in %
was unable to achieve its forecast of maintaining overall earn- Personnel expense 52.4 52.9 -0.5 -0.9
ings at the previous year's level. This was primarily due to the Other expenses 62.9 63.5 -0.6 -0.9
fact that Toyota Kreditbank GmbH (as well as other banks) was Total 115.3 116.4 -1.1 -0.9
required to settle a massive volume of reimbursement claims
from customers in the wake of two BGH rulings concerning the
appropriateness and time limit for charging administration fees.
Administrative expenses were reduced by EUR 1.1 million
The profit generated by the Group’s branches amounted to thanks to a range of cost saving measures.
EUR 35.3 million (2013/2014: EUR 38.0 million).
Other operating income and expense
Overall, the Toyota Kreditbank Group reports satisfactory earn- The net positive amount of other operating income and ex-
ings for the financial year 2014/2015. The anticipated increase pense was EUR 265.0 million (2013/2014: EUR 300,8 million).
in new registrations throughout the bank's operating territory The decrease was mainly attributable to the reduced volume
as a whole, combined with low market interest rates, had a of leasing income in Germany.
positive impact on earnings, whereas the reimbursement of
administration fees by the parent company had a significant Amortisation and depreciation
negative impact. Amortisation and depreciation on intangible assets, property
plant and equipment, and leasing assets decreased to
EUR 210.9 million (2013/2014: EUR 230.1 million), mainly
Earnings reflecting the lower volume of leasing assets carried in
Germany, Spain and Norway.
FY 2014/15 FY 2013/14 Change Change
in EUR million in EUR million in EUR million in % Risk provisioning expense
Net interest income 226.2 224.5 1.7 0.8
The net expense for write-offs and allowances on receivables
Income from investments 0.0 0.1 -0.1 -100.0 and some marketable securities together with additions to
Net commission income -19.3 -21.5 2.2 -10.2 accruals and provisions relating to lending business amounted
Other operating income/expense (net) 265.0 300.8 -35.8 -11.9 to EUR 37.0 million (2013/2014: EUR 33.2 million).
Administrative expense -115.3 -116.4 1.1 -0.9
Amortisation and depreciation -210.9 -230.1 19.2 -8.3 Tax expense
Risk provisioning expense -37.0 -33.2 -3.8 11.4 The expense for income taxes for the financial year went down
Profit before tax 108.7 124.2 -15.5 -12.5 by EUR 19.2 million to EUR 24.2 million. Most of the tax charge
Extraordinary expense -20.0 0 -20.0 relates to the branches. The effective tax rate is 27.7%, com-
Tax expense -25.3 -44.2 18.9 -42.8 pared to 35.6% one year earlier.
Net income for the year 63.4 80.0 -16.6 -20.8
Please refer to the note on segment information for a regional
breakdown of the Group's net income for the year.
Net interest result Net commission income
The net interest result improved by EUR 1.7 million to The Group recorded a net commission expense of EUR 19.3
EUR 226.2 million, mainly reflecting the continued low level million in the year under report (2013/2014: net commission
of market interest rates. Within this environment, the Toyota expense of EUR 21.5 million). Commission income rose to
Kreditbank Group was able to obtain even better financing EUR 54.2 million (2013/2014: EUR 51.6 million), Commission
conditions from banks and affiliates, with the consequence expense amounted to EUR 73.5 million (2013/2014: EUR 73,2
that interest expense fell by EUR 16.7 million to EUR 126.3 million). The increase in commission expense was mainly
million. attributable to higher disbursements to contract dealerships
outside Germany (in particular Spain) as a result of the higher
volume of instalment credit and leasing business.

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Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

b. Net assets and financial position 4. Key performance indicators


The balance sheet total (total assets/total equity and liabilities) The key financial performance indicators used by the Toyota
of the Toyota Kreditbank Group edged up over the course of the Kreditbank Group are based on groupwide requirements
financial year 2014/2015 by EUR 21.6 million to EUR 7,441.2 stipulated by the parent company, Toyota Financial Services
million. in Japan, whereas specific performance indicators are, to a
certain extent, set and managed on a decentralised basis for
Customer receivables remained the most significant item on each country.
the assets side of the balance sheet, accounting for 81.1% of
total assets at the end of the reporting period. Leasing assets The following table sets out the key performance indicators
accounted for 12.1% of total assets. of the Toyota Kreditbank Group:

Receivables from customers (before allowances) went down


Cost/Income ratio Average number of accounts Penetration rate
from EUR 6,299.0 million to EUR 6,186.6 million, with the over-
all increase of EUR 112.4 million relating to German (EUR 44.2
2015 2014 2015 2014 2015 2014
million) and non-German operations (EUR 68.2 million).
Germany 52.1%*) 49.0% 198,561 206,401 45.3% 43.3%
Overall, leasing assets went down during the 2014/2015 France 31.7% 26.8% 80,521 76,353 30.7% 30.1%
financial year, with reductions in Germany and in the branches Spain 48.1% 38.2% 62,964 58,600 41.1% 36.6%
in Spain and Norway, which were not fully offset by increases Norway 33.3% 32.8% 33,075 30,007 43.2% 39.3%
Sweden 46.9% 48.6% 41,716 39,217 35.9% 38.6%
in France and Sweden.
Italy 59.5% 62.6% n.a. n.a. n.a. n.a.
Poland 82.6% 76.2% 75,200 76,139 32.0% 34.5%
On the equity and liabilities side, the principal items are
Russia 36.3% 43.7% 76,722 65,166 17.3% 23.1%
liabilities to customers and liabilities to banks.
 before consolidation
*)

Liabilities
The average number of contracts in Germany continued to
31/03/2015 31/03/2014 Change Change decrease, mainly reflecting the lower volume of new vehicles
in EUR million in EUR million in EUR million in % sold by the importer.
— to banks 2,714.7 2,621.4 93.3 3.6 FY 2014/15 FY 2013/14
— to customers 2,440.7 2,479.9 -39.2 -1.6
— securitised liabilities 548.1 515.1 33.0 6.4 Risk appetite 90.0% 73.8%
Total 5,703.5 5,616.4 87.1 1.6 Overall capital ratio 19.8% 18.2%

In addition to financial performance indicators, the Toyota


Compared to the end of the previous financial year, liabilities Kreditbank Group also uses financial performance indicators
to banks were EUR 93.3 million higher at EUR 2,714.7 million, to manage the business. The Toyota Way, which is founded on
with the increase relating primarily to Germany. The excellent the Toyota organisation’s corporate philosophy, is actively
refinancing conditions available to the main branch in Germany put into practice. The two main pillars of the Toyota Way are
were also used in part to finance demand for lending outside "Continuous Improvement" and "Respect for Others". Recom-
Germany. The Toyota Kreditbank Group was able to place mendations made by staff with a view to achieving continuous
further securitised liabilities in conjunction with a group-wide improvement are documented in conjunction with so-called
commercial paper issue programme. "Kaizen" procedures and are rewarded as part of a competition
for employees.
Accruals and provisions went up by EUR 5.1 million to
EUR 97.0 million.

Receivables are tested regularly for recoverability. Adequate


allowances and provisions have been recognised to cover
lending business risks.

The Toyota Kreditbank Group's equity for accounting purposes


totalled EUR 812.0 million at the end of the reporting period
(31 March 2014: EUR 816.1 million). The reduction was at-
tributable entirely to the unfavourable exchange rate of the
Russian Rouble.

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Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

Kaizen activities Opportunities for further profitable growth are identified and
included in the decision making process as part of the overall
FY 2014/15 FY 2013/14
strategic process as well as the medium and long-term business
Germany 34 23 planning process. Business opportunities are not reported as
Spain 14 19 part of the risk management system. Instead, they are recorded
Norway 13 16 in conjunction with strategic and medium-term forecasts and
France 2 11 monitored during the year as part of the periodic reporting
Italy 25 7 process.
Sweden 43 56
Poland 74 58
A stronger economic upturn may boost group-brand sales,
Russia 24 24
thus, in turn, generating additional growth for the Toyota
Total 229 214
Kreditbank Group. Assuming a constant penetration rate, any
increase in new registrations results in an upward trend for
new business.
C. Events after the end of the reporting period
No significant events have occurred after the end of the re- Further opportunities arise for the Toyota Kreditbank Group
porting period which have a significant impact on the bank's through the creation of new products for end-user customers
net assets, financial and earnings position. and by moving into growth segments in which customers'
needs are focused on even more closely. This approach also
helps to improve the penetration rate in the long-term.
D. Opportunities and Risks Report
The Toyota Kreditbank Group has applied a stable, strategic In relation to credit business risks, an opportunity may also
business model for years. Its success is attributable firstly to present itself if actual losses incurred within the bank's core
its conservative risk profile combined with effective risk business turn out to be lower than previously expected losses.
management and secondly to its strategic business model of On account of the general economic conditions, the bank has
a "captive" financing company, offering financing for the applied a conservative approach to risk provisioning in recent
vehicles of the Toyota Group within its operating territory. years. If the economies in the countries which are relevant for
the bank continue to stabilise, such that the creditworthiness
Responsibility for the early recognition and control of business of borrowers improves, there may be an opportunity to reverse
risks and opportunities lies with the Executive Management previously recorded risk provisions.
of the parent company.

The Toyota Kreditbank Group is exposed to various other risks


which are usual for the sector in which it operates. In this con-
text, a risk is defined as the danger of incurring a loss or damage
by an outcome that is less favourable than originally expected.

At the same time, it is important for the Toyota Kreditbank


Group to identify and exploit potential opportunities with a
controlled management process with a view to safeguarding
and developing its competitive position. An opportunity refers
to the possibility of using events, current developments or
actions to ensure or exceed the Toyota Kreditbank Group's
planned targets.

Business performance is dependent to a large extent on the


volume of group-brand car sales within the operating territory.
The extent to which opportunities can be exploited is highly
dependent on this situation.

50 – 51
Annual Report of Toyota Kreditbank GmbH Group

Foreword Consolidated financial statements Report Auditors’ Report

1. Risk management Consideration of stress tests is a key component of the approach


to managing the overall risk profile of the Toyota Kreditbank
a. Risk management organisation Group. Stress tests, along with the maintenance of a risk inven-
Decisions are taken by the Toyota Kreditbank Group (and its tory and the assessment of risk-bearing capacity, are further
foreign branches and affiliates) on the basis of an ongoing components of the risk management approach, helping the
assessment of the balance between realisable returns and Toyota Kreditbank Group to manage its overall risk portfolio.
risks to be incurred within the framework of the risk-bearing
capacity.

The Executive Management of the parent company is respon- Business & Overall Risk Strategy
sible for the organisation of risk management throughout the
Toyota Kreditbank Group, including its foreign branches and
affiliates. A risk management organisation has been set up Sub-strategies for significant risks
which forms the basis for risk and cost oriented management
of the bank as a whole (overall bank management). Rules specified in writing
(including organisational structure, separation of duties, model concepts)

Group Risk Controlling Commitee


– Reporting lines to Group Risk Controlling Function –

Executive Group Risk Compliance


Directors
Management Controlling Function Function Risk inventory

Risk-bearing capacity concept


OpRisk
Risk Management
Management
Treasury Finances Stress testing concept

Credit Risk Operational Risks Liquidity Risk Business Risk


The task of risk control is carried out in decentralised manage-
ment units. The actual monitoring of risks – identification,
Market Risk
assessment and monitoring of risks and countermeasures,
reporting and specification of methods – is also organised on
a decentralised basis.
The Group Risk Controlling Committee plays a key role in the
Toyota Kreditbank Group's risk management organisation. Its In order to allow a thorough assessment of the risk impact of
main task consists of the implementation and monitoring of new products (including the potential impact on the overall
the risk strategy defined by the Executive Management. The bank risk profile), all relevant organisational units are integrat-
Group Risk Controlling Committee assesses the individual and ed into the new product development process.
overall risk situation of the Toyota Kreditbank Group, specifi-
cally taking into account the limits established in conjunction The internal Audit Department reviews and and assesses all
with the assessment of its risk-bearing capacity. The aim is to activities of the Toyota Kreditbank Group. Audits are planned
identify risks at the earliest possible stage and to decide on a and conducted using a risk-based approach. The assessment
set of suitable risk mitigation measures. of the risk situation, the proper processing of transactions and
the effectiveness of the internal control system are important
Risk reporting is addressed directly to Executive Management audit criteria.
and the members of the Group Risk Controlling Committee.
Risk trends and the current situation are reported on and dis- Reports on the audits conducted during the financial year,
cussed at the quarterly meetings of the Group Risk Control- together with audit findings, were submitted to the Executive
ling Committee. Management.

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Foreword Consolidated financial statements Report Auditors’ Report

b. Risk management process The Toyota Kreditbank Group, as a financial services provider d. Relevant risk categories
The business strategy of the Toyota Kreditbank Group provides whose primary function is to support the sale of cars, provides As part of the process of drawing up the risk inventory, the next
the framework for the risk strategy. One important aspect of financing for Toyota dealers and retail customers. The resulting step – after identifying all risks – is to perform a quantitative
this risk strategy is that risks will only be entered into after due overall banking risk is therefore significantly lower than that and qualitative analysis of the various risk categories as the
consideration of the level of economic and regulatory capital, of banks offering a full range of banking services. Under the basis for determining materiality. The main risk categories
while at the same time ensuring liquidity, and maintaining a Toyota Kreditbank Group’s business model, concentration risks result directly from banking operations and are of particular
prudent risk profile. The risk management system is therefore are knowingly assumed within reasonable limits. Within the importance for the ongoing management of the Toyota Kredit-
a key component of managing the Toyota Kreditbank Group's retail portfolio, concentration risks are only of secondary im- bank Group. The following risks were identified as material
performance. portance in view of the overall customer structure. By con- risk categories in conjunction with the annual risk inventory:
trast, concentration risks are higher in the business customer
The objective of the risk management system is to assume and dealership financing portfolio due to the relatively small
customary banking risks within a defined framework, including number of customers.
strict compliance with risk-bearing capacity requirements.
Liquidity Operational Business
The core elements of the risk management system are the risk In line with the overall risk strategy, specific sub-strategies Credit Risk Market Risk Other Risk
Risk Risk Risk
strategy, the management of risk-bearing capacity and the are defined for each main risk category, which, together with
internal control system. The internal control system consists the risk inventory, the risk-bearing capacity concept, the stress
of a set of defined rules and an organisational structure, includ- testing concept and the organisational rules, form the basis
ing the specific processes applied to manage and control risks. for the Toyota Kreditbank Group’s risk management system. Interest Short-term Operational
Default Return Strategic
Rate Liquidity Risk
Over the years, the risk management process has been refined,
as a result of which the Toyota Kreditbank Group now has a
full range of tried and tested tools at its disposal. In addition
Higher
to organisational rules, such as competency guidelines and Migration Currency Legal Reputational
Liquidity Cost
process/system documentation, methods have been continu-
ously developed to identify, measure and manage risks.

A new methodology for capital planning was implemented


during the financial year 2014/2015 and the scope of stress Counterparty Spread Model
tests expanded.

c. Risk strategy Markek


Issuer
The risk strategy – in conjunction with the risk-bearing capacity Liquidity
concept – provides the overall framework for risk management.
The risk profile and underlying approach to risk taking are
determined after taking into account all risks identified in the
Investment/
various lines of business and in accordance with all relevant Collateral
Share Price
statutory and regulatory requirements.

The focus of the risk strategy is to ensure long-term going-


concern status and an appropriate balance between return
Countries Residual Value
and risk. Consciously choosing to take risks – having given
due consideration to economic and regulatory capital levels –
is a component of the risk strategy and is derived from the
overall banking strategy.
Concentration Significant Risks

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e. Risk-bearing capacity concept In both the going concern and liquidation approaches, only
The Toyota Kreditbank Group has implemented a risk-bearing part of the risk coverage potential counts towards the risk
capacity concept for the regular assessment of the risk situation coverage amount. The respective risk coverage amount
at a total bank level. The risk-bearing capacity specifies the allocated, as well as the risk appetite, the overall limit and the
extent to which the risks assumed can be covered by the defined allocation limits among the different risk categories are stipu-
risk coverage amounts. The concept was further refined during lated each year by the Executive Management and are based
the financial year 2014/2015. on the business strategy and the associated willingness to
assume risk.
Determining risk-bearing capacity sets the framework for risk
management and control within the Toyota Kreditbank Group. Part of the available risk coverage potential was not allocated
Measuring and ensuring the appropriateness of the capacity to offset potential losses from the material risk categories,
to bear risks is therefore a fundamental aspect of the manage- thus taking account of the risks not limited in the risk-bearing
ment of the Toyota Kreditbank Group as a whole. capacity concept.

Under the current concept, both a balance-sheet-based going In order to ensure the Toyota Kreditbank Group's risk-bearing
concern approach and a liquidation approach are considered capacity, risks (quantified by appropriate instruments) and
to assess the risk-bearing capacity. limits are compared for each risk category.

The going concern approach assumes that operations will be In addition, stress scenarios are also tested, based on scenario
continued, whereas the liquidation approach focuses more and sensitivity analyses which take into account institution-
on the protection of creditors. The Toyota Kreditbank Group specific and general market factors for all material risk catego-
considers both approaches. The going concern approach has ries, thus ensuring an overall consideration of the situation
been defined by the Executive Management of Toyota Kredit- across all risk categories. The so-called "normal case" con-
bank GmbH as being that which is more relevant for managing sidered in the risk-bearing capacity assessment corresponds
the business. to the current relevant economic situation. The historical
recession simulates – for all significant risk categories – the
The risk coverage potential totaling EUR 364.6 million com- stress that would be caused by a severe economic slump
prises subscribed capital, capital surplus, retained earnings (comparable with the Lehman crisis in 2008/2009).
and current year earnings. Under the going concern approach,
the part of the regulatory capital which is necessary as a mini- Risk category correlation effects are not taken into account
mum to comply with the minimum capital requirements pur- to measure the amount of limit utilised. Likewise, the Toyota
suant to the Capital Requirement Regulation (CRR) is not Kreditbank Group does not consider any correlation effects
taken into account for risk coverage purposes. Furthermore, between and/or within the various risk categories. In view of
under the going-concern approach, a budgeted profit is also the nature and scale of business transactions, the Toyota
taken into consideration. In order to comply with MaRisk Kreditbank Group assumes a correlation coefficient of one
requirements and take into account only a prudently budgeted within the material risk categories. As a result, potential capi-
profit, the business risk is deducted from the risk coverage tal-saving diversification effects are not taken into account,
potential as a corrective factor. reflecting the enterprise's prudent approach to risk assess-
ment.
Limit Amount utilised in %
Risk-bearing capacity 31/03/2015 31/03/2015 31/03/2015 The Toyota Kreditbank Group's ability to bear risk (i.e. its risk-
Required capital in economic terms (in EUR million) 328.1 216.5 66.0 bearing capacity) was ensured at all times during the financial
— thereof for customer credit risk 156.0 112.7 72.2 year 2014/2015.
— thereof for interest rate risk 50.0 29.0 58.0  
— thereof for liquidity risk 24.0 4.2 17.5
— thereof for operational risks 25.0 12.0 48.0
— thereof cushion for market fluctuations 73.1 58.5 80.0
Risk coverage potential utilisation 90.0% 59.4%
Maximum risk appetite 90.0%

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2. Risk categories Toyota Kreditbank GmbH's Risk Management Department is Elements of credit risk management
A risk is defined as the danger of incurring a loss or damage responsible for implementing and applying these measure- The Toyota Kreditbank Group uses a range of instruments to
by an outcome that is less favourable than originally expected. ment tools as well as for other operational credit risk control manage credit risk, as described in detail below.
The following risks were identified as material risks in con- measures. Risk monitoring is the key component here. As an
junction with the annual risk inventory: independent function within the risk management system,
risk monitoring concentrates on the identification, analysis,
a. Credit risk measurement, control and monitoring of the default and Instruments used to manage credit risk
Credit risk is defined as the risk of a possible loss arising from credit concentration risks throughout the Toyota Kreditbank
deterioration in the creditworthiness rating or payment default Group as a whole. The Treasury Department is responsible for Strategic Credit risk Operational Monitoring and
of a counterparty. Within credit risk, the following distinctions monitoring issuer and trading counterparty risks. components measurement components communication
can be made depending on the underlying transaction:
- Allocation of risk coverage Internal procedures for - Credit decision processes - Management reporting
Credit risk strategy amount assessing creditworthiness - limits - Risk monitoring
Default risk is defined as the traditional credit business risk – The Toyota Kreditbank Group considers credit risk to be a key - collateral and guarantees
i.e. the core business of the Toyota Kreditbank Group. component of its operations. As such, credit risks are entered - amount of receivable on - intensive management
Default risk refers here to the possible loss arising from de- into in full knowledge of the facts and are subject to proactive default - risk provisionning
- probability of default
terioration in the creditworthiness rating or payment default control, measurement and monitoring. This is particularly true - loss ratio
of a borrower. in the case of default and credit concentration risks. Generally, - expected loss
the materiality of default risks is assessed in conjunction with - unexpected loss
Issuer risk is defined as the default risk in the case of a secu- the annual risk inventory. - stress tests
rities transaction. The credit risk strategy conforms to the guidelines set out in
the business and general risk strategy, thus reflecting the
Trading counterparty risk is defined as risk of default by the prudent approach adopted by the Group. Risk coverage amount (capital cushion)
contracting party in the case of a derivatives transaction. The parent company's Executive Management and Group Risk
As a general rule, default risks are only entered into in accor- Controlling Function jointly assign the risk coverage amount
Credit concentration risk is defined as the risk of the reali- dance with the general risk strategy. Credit decisions and available for credit risks. The risk coverage amount is determined
sation of multiple default risks, issuer risks or trading counter- exposure amounts are always determined on the basis of at group level as well as for each subsidiary and branch individ-
party risks resulting from concentration of the portfolio on creditworthiness. This involves an analysis of the borrower's ually and is assigned as part of the general capital planning
a few individual contracting parties, groups of contracting ability to service debts currently and in the future. process in line with the general risk appetite.
parties or concentrations on individual market sectors.
The Toyota Kreditbank Group recognises appropriate levels of
The Toyota Kreditbank Group’s core business consists of dealer- risk provision to take account of losses from credit business.
ship financing and vehicle financing for end-user customers in
the Corporate and Retail lines of business. Default and credit
concentration risk (dealer financing and corporate end-user
customer exposures) are therefore the principal sources of credit
risk. The principal focus of credit risk management is therefore
placed on the assessment and control of these risks. Trading
counterparty risks arise on account of the hedging of market
risks. Since the securities portfolio is currently very small, issuer
risk is not material at present.

Organisation of credit risk management


Executive Management is responsible for effective, sound
management of the bank's credit risks. Furthermore, Executive
Management and the Group Risk Controlling Function have
joint responsibility for introducing appropriate tools to measure
credit risk.

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Credit risk measurement Other lending transactions which do not relate to the TKG
Internal creditworthiness assessment procedures and stress Group's core business are combined across countries in the
tests are applied to measure and assess credit risks. The Toyota "Other lending transactions" sub-portfolio. Treasury trans-
Kreditbank Group has opted to use the Advanced Internal actions are also shown separately.
Ratings Based Approach (A-IRBA) for the purposes of measu-
ring and assessing credit risks. An application to apply the Measurement Permitted
A-IRBA approach was submitted as of 31 March 2008. In order Country Type of business Customer group approach since
to be able to use the A-IRBA approach on a permanent basis,
End customers Small customers (retail) A-IRBA 04/2008
the regulator requires at least 92% of the portfolio to be mea-
Germany (vehicle financing) Major customers A-IRBA 04/2008
sured through appropriately certified internal rating pro-
cedures. The remaining 8% may continue to be measured Dealership financing Dealerships A-IRBA 04/2008
using the Credit Risk Standardised Approach (CRSA). In order Small customers (retail) A-IRBA 02/2011
End-user customers
to achieve this coverage rate, the Toyota Kreditbank Group Small customers (businesses) A-IRBA 10/2014
France (vehicle financing)
has successively switched over the various sub-portfolios to Major customers CRSA -
the A-IRBA approach by developing rating procedures specific Dealership financing Dealerships A-IRBA 06/2012
to each of them. These sub-portfolios are defined for each Small customers (retail) A-IRBA 09/2009
country as follows: End-user customers
Small customers (businesses) A-IRBA 09/2009
Sweden (vehicle financing)
Major customers CRSA -
— Small customers (end-user customers vehicle
Dealership financing Dealerships CRSA -
financing): end-user customers with an exposure of less
End-user customers Small customers (retail) A-IRBA 10/2010
than TEUR 250. In the small-sized customer segment, a
Norway (vehicle financing) Major customers CRSA -
further distinction is drawn between retail (private
individuals and sole traders) and corporate customers. Dealership financing Dealerships CRSA -
Small customers (retail) A-IRBA 02/2011
End-user customers
— Major customers (end-user customers vehicle financing): Small customers (businesses) A-IRBA 07/2013
Spain (vehicle financing)
end-user customers with an exposure or limit of more Major customers CRSA -
than TEUR 250. Dealership financing Dealerships A-IRBA 09/2009
Italy Dealership financing Dealerships A-IRBA 07/2013
— Dealerships: financing of dealerships.
End-user customers Small customers CRSA -
Poland (vehicle financing) Major customers CRSA -
Dealership financing Dealerships CRSA -
End-user customers
Small customers (retail) A-IRBA 12/2013
Russia (vehicle financing)
Dealership financing Dealerships A-IRBA 12/2013
Other lending transactions Various CRSA -
Over-arching
Treasury Bank CRSA -

Toyota Kreditbank GmbH is responsible for developing rating


procedures within the bank as a whole. The procedures used
are based mainly on statistical models. Rating procedures are
calibrated individually for each sub-portfolio. Responsibility
for the development, quality and monitoring of the use of
rating procedures for risk management purposes lies with the
Risk Monitoring Department.

The values calculated using the various rating procedures are


input to the relevant internal controlling system and to the
reporting system used to measure the risk-bearing capacity.
Risk premiums and credit risk costs are calculated in conjunc-
tion with the Controlling Department on the basis of past em-
pirical values on the one hand and planned changes in the
credit portfolio on the other.

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The accuracy of the statistical models is checked monthly by The master scale comprises eleven classes for active exposures Operational components Provision for credit risk is recognised in the form of specific
back-testing against actual amounts realised. Anomalies and three classes for exposures at default. For exposures at The credit decision making process relies on both credit allowances and portfolio-based allowances. A specific allow-
identified during this process are examined further in detailed default, the three classes reflect the various stages in the de- application procedures and rating models. In the case of retail ance is required to be recognised if it is likely that the customer
analyses. Furthermore, the models are validated each year in fault process. For the eleven creditworthiness classes for active business, this process is largely automated. In the case of will be unable to fulfil all interest and repayment obligations
accordance with a pre-defined procedure. Where necessary, exposures, the master scale indicates a minimum and a maxi- dealer financing business, credit approvals have to be con- in the future. In the case of contracts for which no specific allow-
the rating procedures are recalibrated with the approval of mum probability of default. As part of the process of calibrat- firmed manually by credit committees. Local credit committees ances are recognised, allowances are calculated at portfolio
Executive Management. ing the models specific to the various sub-portfolios, the at the individual branches and subsidiaries of the Toyota Kredit- level with the aid of the IRBA parameters.
creditworthiness classes are each assigned a final default pro- bank Group consist in each case of front and back office repre-  
The main technical terms relevant for the A-IRBA-certified bability, specific to each sub-portfolio. This is based on the sentatives. A European Credit Committee (ECC) is in place at
rating procedure are explained below. maximum and minimum default probabilities specified by the group level.
master scale. The default probability of an exposure results
The definition of loss is based on the Capital Requirement from the application of this final default probability by refer- Depending on the nominal amount of the credit application,
Regulation (CRR). This defines loss as "economic loss, includ- ence to the creditworthiness class and the sub-portfolio. the relevant credit committee is convened and makes its
ing material discount effects, and direct and indirect costs decision with respect to the credit application. In the event
associated with the recovery of outstanding balances for The loss given default (LGD) refers to the expected percentage that the front office and back office representatives within a
the transaction". of the exposure at default which will be lost in the event of local credit committee reach a different decision, the credit
default. As in the case of the default probability, the LGD of an application is transferred to the ECC and the decision is taken
With respect to the Toyota Kreditbank Group's core business, exposure is determined using a statistical model. For the pur- there.
the loss therefore corresponds to receivables outstanding poses of calibrating the statistical models used, particular
after all recovery efforts. This includes discounting effects and consideration is given to actual proceeds realised historically. Credit exposure limits have been introduced to limit default
costs arising in conjunction with recovery efforts. and credit concentration risks. The limits are determined on
The expected loss refers to the loss from credit risks which, the basis of the customer's creditworthiness. Limits are in
Exposure at default (EAD) is defined as the expected amount at the relevant reporting date, is expected to be incurred place both for both individual borrowers and groups of bor-
of the credit exposure at the time of default. within one year. This is a statistical average value which is rowers. Where appropriate, limits are also set for specific pro-
A uniform definition of default, complying with the CRR, is calculated considering the default probability, the LGD and ducts. For exposures to major customers, the amount of the
applied at group level. According to this definition, an expo- the EAD. limit used is monitored on a daily basis in accordance with the
sure is considered to be in default when either or both of the Banking Act (Kreditwesengesetz)
following events have occurred: The unexpected loss (UL) refers to potential losses which
exceed the expected loss. “Potential” for these purposes By way of analogy, limits are also defined and monitored for
― The Toyota Kreditbank Group considers it to be very un- means that, based on a going-concern approach, there is a hedging and securities transactions at the level of individual
likely that the borrower will repay its debt without further 99% probability that actual losses incurred within one year counterparties and issuers.
action by the institution. will not exceed the UL. The UL, which is therefore a key inter-
nal control parameter, is calculated on the basis of the regu- A standardised process is in place within the section for deal-
― The borrower has been in arrears for more than 90 days latory requirements applicable to A-IRBA procedures. More erships and major customers to handle the measurement of
in succession with respect to a material proportion of its specifically, the calculation is based on the default probabil- guarantees and collateral. These serve to compensate for
total debt. ities and loss given defaults determined using the applicable losses in the event of default by the counterparty. The Credit
rating procedure. The issue of concentration risks is Manual defines the type of guarantees or collateral that can
An exposure which is not in default is referred to as an active addressed by taking into account the granularity of the port- be accepted. The extent to which guarantees and collateral
exposure. folio. Model-based default probabilities and loss given de- are acceptable varies from portfolio to portfolio on account of
  faults are not available for portfolio components rated using differing regulatory requirements. Within the retail business,
The probability of default expresses the probability of at the credit risk standardised approach (CRSA) and are there- it is the financed vehicles themselves that primarily serve as
least one default by a borrower over a one-year period. The fore replaced by expert estimates. collateral. In the dealership segment, other collateral may also
probability of default of a borrower is determined in con- be accepted on a case-by-case basis.
junction with the relevant internal rating procedure. Stress tests are carried out at least monthly. These serve on
the one hand to check the capital adequacy calculated and on An early warning system, based on the internal credit ratings,
For this purpose, each exposure is first assigned to a credit- the other to identify events and market changes which could has been installed for dealership and major customer business.
worthiness class, based on the rating procedure allowed for have an adverse impact on the Toyota Kreditbank Group so This system has the function of identifying borrowers with
the relevant sub-portfolio. The creditworthiness classes are that countermeasures can be taken at an early stage. Firstly, impending financial difficulties. A borrower identified to be in
defined uniformly across the various sub-portfolios on the the sensitivity of the risk model with respect to various risk this position receives special attention in the form of intensive
basis of a so-called "master scale" that is valid throughout factors is measured on the basis of stress tests. Secondly, management so that measures are taken to reduce the risk
the group. scenario analyses are carried out to examine the effects of and prevent default. Furthermore, a watch list is maintained
economic stress events on the portfolio. For this purpose, showing borrowers directly under threat of default.
both historical events and fictitious events are considered.

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Monitoring and communication b. Market risk For the purposes of determining which party actually bears
Risk Monitoring draws up a monthly management report for Market risks are defined as risks which may arise as a result of residual value risks, a distinction is made between direct and
distribution to Executive Management and the Group Risk changes in rates of return, exchange rates and prices on the indirect residual value risks. Direct residual value risks are
Controlling Function. In addition to general information on financial markets. This can give rise to a loss since these risks those that are borne directly by the Toyota Kreditbank Group.
the risk situation of the Toyota Kreditbank Group, this contains have an impact on the measurement of open interest rates, These residual values are monitored within the Toyota Kredit-
aggregated quantitative information derived from the A-IRBA equity investment and currency exposures. The main risks for bank Group. Appropriate risk provisions have been recorded
procedure. These reports represent a key component of the the Toyota Kreditbank Group are interest rate risk and to take account of the current situation in used car markets.
risk and management control system. exchange rate risk. An indirect residual value risk exists when the risk has been
transferred to a third party as a result of a residual value guar-
The reliability of the information derived from the A-IRBA Strategy antee.
procedure is examined monthly by Risk Monitoring and, where The Toyota Kreditbank Group has set out a general framework
necessary, communicated to the Group Risk Controlling Func- for the management of assets and liabilities as part of its Under the Toyota Kreditbank Group’s current range of pro-
tion and Executive Management. The latter also monitors the current group risk strategy. This framework takes the concrete ducts, the residual value risk is transferred either to the lessee
credit risk of the individual sub-portfolios by means of detailed form of internal group instructions and other guidelines/ (residual value leases) or to the dealership (distance driven
reports. The reports are communicated on a quarterly basis manuals. leases) with the consequence that a counterparty risk arises
to the Group Risk Controlling Function and Executive Manage- in the first instance with regards to the residual value guaran-
ment. Derivative instruments are used as a general rule to hedge tee. If the residual value guarantor defaults or the calculated
interest and currency risks. The derivative instruments used residual value cannot be realised, the leased asset (and hence
The tables below present the Toyota Kreditbank Group’s (interest swaps, interest/currency swaps and currency futures) the related residual value risk) is transferred to the Toyota
credit portfolio, broken down according to various risk are used exclusively for hedging purposes. In each case, the Kreditbank Group.
classes. hedging instruments are matched by a liabilities-side hedged
item with a corresponding opposite risk profile. Interest rate
swaps are exclusively used to manage the general interest rate
UL (EUR million) risk in the banking book.

31/03/2015 31/03/2015 31/03/2014 31/03/2014 The Toyota Kreditbank Group does not run a trading book and
in EUR millon in % in EUR millon in % does not engage in any commercial transactions in the sense
Germany 37.93 33.6 38.35 31.0
of aiming to make a short-term profit by exploiting market
France 21.01 18.6 21.71 17.6 price fluctuations. All trading transactions serve to create an
Italy 10.49 9.3 15.04 12.1 efficient bank book structure from the point of view of risk and
Spain 19.44 17.2 15.29 12.3 return.
Norway 3.00 2.7 3.53 2.8
Sweden 2.05 1.8 1.84 1.5 Money market transactions and the issue of own instruments
Poland 4.48 4.0 11.69 9.4 are executed primarily with a view to securing the Toyota Kredit-
Russia 14.33 12.7 16.49 13.3 bank Group's liquidity. Surplus liquidity may be invested with
Total 112.72 100.0 123.95 100.0 selected credit institutions.

Foreign currency risk


It is not a strategic objective of the Toyota Kreditbank Group
EAD (EUR million) to take up foreign currency positions. For this reason, Treasury
endeavours where possible to hedge foreign currency balances
31/03/2015 31/03/2015 31/03/2014 31/03/2014 and/or future foreign currency cash flows arising from trading
in EUR millon in % in EUR millon in % contracts by appropriate offsetting transactions. Foreign cur-
Low risk (creditworthiness classes 1-7) 6,362.83 85.44 6,230.7 83.39
rency risks arising from strategic investments in the branches
At watch (creditworthiness classes 8-9) 571.37 7.67 633.2 8.47 in Sweden and Norway are subject to continuous monitoring.
At risk (creditworthiness classes 10-11) 356.14 4.78 454.3 6.08
Default 156.79 2.11 153.8 2.06 Residual value risk
Total 7,447.13 100.00 7,472.0 100.00 Residual value risks arise from negative variances between the
actual and imputed residual value of a leasing asset. Depending
on local circumstances and past experience gained marketing
used cars, updated internal and external information regarding
changes in residual values is fed continually into residual value
forecasts.

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Interest rate risk c. Liquidity risk Responsibility for the management and control of operational
The Toyota Kreditbank Group pursues a dual control approach The liquidity risk is defined as the risk that it may not be pos- risks lies with the centralised Risk Management Department.
to interest rate risk. Monitoring and control are based on a sible to meet present and future payment obligations on time OpRisk Managers at branches and subsidiaries are responsible
value-at-risk indicator and the square hedge ratio. Limits/ranges, or in full (short-term liquidity) or that, in the event of a liqui- for ensuring close cooperation between head office and local
within which the respective figures should fall, are set for the dity crisis, funds are obtainable for refinancing only at higher departments and are responsible for assessing operational
relevant indicator. market rates (higher liquidity cost). risks and implementing operational risk management pro-
cesses locally.
The square hedge ratio is determined by dividing the sum of In line with its overall banking strategy, the Toyota Kreditbank
all refinancing amounts across all maturity ranges by the sum Group's liquidity risk strategy is aimed at ensuring a stable, The remit of the centralised Risk Management Department
of the assets to be refinanced across all maturity ranges1. comfortable liquidity position, thus – in particular – preventing includes the specification of methods to be used to identify,
insolvency and limiting any losses arising from refinancing on quantify and control operational risks as well as appropriate
The value-at-risk model is based on a historic simulation. The the money and capital markets. reporting to the OpRisk Committee, which, in turn, reports to
parameters used for the calculation are a confidence level of Executive Management and the Group Risk Controlling Func-
99%, a holding period of 250 days and a mirrored interest rate These risks are managed with the aid of overnight and term tion on the risk situation and measures taken.
history of 1,001 days. deposits, repo transactions with the European Central Bank,
the issue of commercial paper and promissory notes (Schuld- As part of the annual scenario based OpRisk inventory, opera-
scheindarlehen). tional risks are allocated to four levels of risk using a risk matrix,
Value-at-Risk Sensitivity of the banking book depending on frequency and loss potential. In the case of
Square hedge ratio in EUR millon in EUR millon2 As part of the risk measurement process, the refinancing risk risks in the top two levels, risk mitigation strategies must be
Germany 87% -5.0 -8.6
(higher liquidity cost) is determined by means of regular devised and the resulting measures implemented in order to
France 85% -1.4 -3.5 scenario analyses (LVaR) based on present value calculations. reduce the risks to an acceptable level.
Spain 81% -4.1 -7.0 The present value measures the additional refinancing costs
Sweden 79% -0.3 -0.3 for the coming twelve months in the event of an ad hoc in- Risk capital requirements for the purpose of measuring risk-
Norway 75% -3.1 -3.8 crease in refinancing costs around a specified number of basis bearing capacity are calculated with the aid of a Monte Carlo
Italy n.a. -0.8 -0.1 points. An indicator (DAF2) is calculated for the short-term simulation after aggregating the results of individual scenarios
Poland 71% -1.3 -0.8 liquidity risk reflecting the number of days for which secure applied in conjunction with the OpRisk inventory. The OpRisk
Russia 84% -13.0 -3.3 sources of liquidity are currently available in order to cover Committee notifies Executive Management and the Group
future payment obligations (including new business). Risk Controlling Function if the groupwide limits are exceeded.
 in each case up to the end of the currently valid fixed interest rate period
1

 200 bp ad-hoc interest rate shock


2
The short-term liquidity risk is not taken into consideration This combination of procedures ensures that the sum of all
in the calculation of risk-bearing capacity, since the liquidity risks is always covered by the amount allocated to cover this
Management of market risks risk relates to payments and not to earnings. By contrast, the particular risk category in accordance with the risk-bearing
The direction, timing and scope of future market price chan- higher liquidity cost risk is included in the risk-bearing capacity capacity concept, thus safeguarding the bank's going concern
ges are, by their very nature, unknown. The Toyota Kreditbank calculation. status.
Group manages market risks by limiting the impact of market
price changes on earnings and the risk coverage amount. In order to protect against legal risks, Toyota Kreditbank GmbH
Limits are monitored systematically using sensitivity and pre- d. Operational risks requires the use of standardised framework agreements which
sent value analyses. Operational risks are defined as the danger of incurring losses have been checked in advance by the Legal Department. Legis-
as a result of the inappropriateness or failure of internal pro- lation and court rulings that are relevant for the bank's business
Monitoring and communication cedures, employees, the internal infrastructure or as a result are monitored by the Legal department. Non-standard con-
The parent company's Treasury department in Cologne draws of external factors. tractual provisions are examined by the Legal Department.
up the relevant reports on a monthly and/or quarterly basis
for the Group as a whole. The reporting system contains the Within the Toyota Kreditbank Group, the definition of opera- "Business Continuity Plan" and "Business Continuity Manage-
necessary information to ensure that stipulated limits and re- tional risks also covers model risks arising from inappropriate ment" guidelines are in place for all locations in Germany and
quirements are monitored. models and legal risks from contractual agreements or statu- abroad, including communication plans, work instructions,
tory requirements. system descriptions and rules of conduct.

The principal objective in terms of the management of opera-


tional risks is to identify potential causes for losses in good
time and to avoid disruptions to operations (e.g. through
serious damage to key equipment). For this reason, a compre-
hensive and integrated approach is applied to identifying,
analysing and assessing the full range of operational risks.

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e. Business risk E. Outlook


Business risk is defined as the risk of unexpected decreases in
earnings and negative variances from budget, which do not As a financial services provider, the Toyota Kreditbank Group
have their origin in other defined risk categories. Business risk offers a range of financing and leasing products to Toyota
can be caused by changes in customer behaviour or changes dealerships and retail customers within a defined operating
in economic conditions which do not have their origin in legis- territory in order to support the sale of cars. The scope of
lation. The Toyota Kreditbank Group plans income and expenses opportunities available is significantly lower by comparison
as part of its forecasting process. Forecasting, however, is to that of banks offering a full range of banking services. The
always subject to a degree of uncertainty. For instance, fiercer Toyota Kreditbank Group's performance is also highly depen-
competition or a poor reputation – either of the Toyota brand dent on sales of Toyota and Lexus brand vehicles within the
or of the Toyota Kreditbank Group – could have a negative operating territory. For this reason, positive developments in
impact on operating results. the market as a whole do not necessarily correlate with the
performance of the Toyota Kreditbank Group.
In order to manage forecasting variances, the Toyota Kredit-
bank Group has created a scenario model based on key fore-
casting figures. This involves subjecting the key indicators 1. Future macro-economic situation
"retail new vehicle sales", "average dealership financing", The global economy is expected to grow in the calendar year
"retail penetration", "retail margin" and "dealership financing 2015 at a similar level to 2014. The IMF forecasts global GDP
margin" to stress after gathering expert opinion and deter- growth of 3.5 % for 2015, compared with 3.4 % one year earlier.
mining the negative impact on forecast earnings. Under the
going concern approach, the forecast profit included in the
risk coverage potential calculation is reduced by the business Real GNP and consumer prices 2015-2017
risk. Under the liquidation approach – in which forecast profit
is not included in the risk coverage potential calculation –
GNP Change compared to Consumer prices
the business risk is deducted only if the scenario calculation
previous year % Change compared to previous year %
gives rise to a forecast loss.
Countries 2015 2016 2017 2015 2016 2017

3. Summarised description of risk situation Euro area 1.5 1.6 1.7 0.1 1.0 1.4
At no stage during the financial year 2014/2015 did the total Germany 1.6 1.7 1.7 0.2 1.3 1.7
amount of risks entered into exceed the Toyota Kreditbank Poland 3.5 3.5 3.5 -0.8 1.2 2.0
Russia -3.8 -1.1 1.3 17.9 9.8 6.9
Group's risk coverage potential, thus demonstrating its capa-
Source: IMF (2015, 2016), Focus Economics (2017)
city to bear risk throughout the year under review.

There are no indications of risks which could pose a threat to


the Group’s going concern status or which could have a ma- GNP increased by 0.9% in the Euro area in the calendar year
terial adverse impact on its net assets, financial position or 2014. The forecast for 2015 is an increase of 1.5%, driven by
results of operations for the current year. Germany's expected growth rate of 1.6%. Low interest rates and
a stable situation on the employment market will strengthen
The Toyota Kreditbank Group’s strategy of achieving a sus- consumer spending further. In addition to a slight increase in
tainable risk conscious growth in business volumes is based consumer spending, the coming year should also see a rise in
on the intention of remaining within the risk coverage poten- investment activities.
tial. Based on current forecasts, risk-bearing capacity require-
ments will be complied with in the 2014/2015 financial year.

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In view of the circumstances and in order to overcome on- 2. Review of operations of the Toyota Kreditbank Group As a result of the pressure on margins, profit from ordinary
going sovereign debt problems and potential deflation con- The following section describes the expected future develop- activities for the 2015/2016 financial year is expected to be
cerns, the ECB is set to continue its expansionary monetary ment of the Toyota Kreditbank Group, based on the general at a similar level or slightly lower than profit reported for the
and low interest rate policies in 2015 in order to underpin business and economic conditions described above. The 2014/2015 financial year and hence still at a satisfactory level.
economic recovery in the Euro area. The ECB reduced its main following outlook is based on forecasts (and specific budgets)
refinancing rate at the beginning of September 2014 to 0.05%. drawn up at the end of 2014 for the individual markets includ- Based on its coherent business concept, good liquidity and
In addition, it announced its intention of buying government ed in the Toyota Kreditbank Group's operating territory. The refinancing structure, the strong partnership with the dealer
and private bonds for a monthly amount of up to EUR 60 billion forecast period covers the 2015/2016 financial year. The network and its efficient organisation, management considers
in the period from spring 2015 to autumn 2016, with a view forward looking assertions contained therein are based partly that the Toyota Kreditbank Group is well positioned to rise to
to lifting the inflation rate back to approximately 2.0%. on general expectations of future macro-economic develop- future challenges. Comprehensive mobility concepts, financing
The Toyota Kreditbank Group does not expect any significant ments, with a primary focus on the automobile sector. packages combined with service and insurance products as
rise in short-term interest rates in the near future; if there is well as new digital sales and marketing instruments are set to
any change in the situation, it is only expected to entail small We expect to achieve stable levels of lending by focusing on play a key role in the future strategic direction of the business.
rises in medium- and long-term interest rates. The ECB's low retail customers and offering a comprehensive range of services
interest rate policy will result in higher credit disbursement to dealers. As in the previous year, there are plans to expand the
by the banks and hence to a more competitive market envi- bank's leasing portfolio in Germany and abroad by the addition Cologne, 16 July 2015
ronment for the Toyota Kreditbank Group. of new products tailored to commercial customers' require-
ments, in the hope that the leasing business in Germany also
According to a study undertaken by the Center Automotive settles down at the previous year's level. Toyota Kreditbank Group
Research of the University of Duisburg-Essen, the global
growth rate of 3.5 % forecast by the IMF for the calendar year The net interest result is expected to be at a similar level to Executive Management
2015 should also be reflected in increased global demand the 2014/2015 financial year.
for passenger vehicles. An average growth rate of 3.0% is
predicted for passenger vehicle sales. According to the study, The Toyota Kreditbank Group will continue to apply a policy of
the principal drivers of growth will be China and the USA. rigorous cost management in order to ensure that cost levels
remain commensurate with business volumes. Due to invest-
Automobile sales may well develop differently in the various ments in strategic business segments, however, the Toyota
countries covered by the bank's operating territory. Whereas Kreditbank Group forecasts a slight increase in administrative
the predicted rates of growth in Germany and France are low expenses for the 2015/2016 financial year.
and in Russia even negative, vehicle sales in Italy and Spain
are expected to grow at above average rates. The risk provisioning expense for lending business is likely to
be at a similar level in 2015/2016 to the past financial year.
New registrations of Toyota vehicles are again expected to Appropriate levels of risk provision have been recognised to
rise slightly year-on-year in the various markets in the coming take account of macro-economic developments in the territory
financial year. Despite restructuring of the dealership network in which the Toyota Kreditbank Group operates.
in Germany that is planned for the coming calendar year, we
expect registration figures for the German market to come in The negative impact on the Russian economy caused by the
at the previous year's level. Ukraine crisis, including a massive loss in value of the Rouble
and a rise in benchmark interest rates in Russia, is already
showing signs of stabilising. In view of the political and eco-
nomic situation, we forecast lower overall vehicle sales in
Russia, with the Toyota brand achieving a stable market share.
In the medium term, we expect vehicle sales to return to a
positive trend, thus generating a rising volume of vehicle
financing.

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Foreword Consolidated financial statements Report Auditors’ Report

Country by Country Reporting as of March 31, 2015 Auditors’ Report The audit includes assessing the annual financial statements of
We have audited the consolidated financial statements prepared those entities included in consolidation, the determination of
According to § 26a KWG Turnover is the profit before tax as shown in financial state- by Toyota Kreditbank GmbH, Cologne, comprising the consoli- entities to be included in consolidation, the accounting and con-
The requirements of EU guideline 2013/36/EU ("Capital ments before consolidation effects, risk provisioning and other dated balance sheet, consolidated income statement, notes to solidation principles used and significant estimates made by
Requirement Directive", CRD IV) was transposed into German operating expenses. the consolidated financial statements, consolidated cashflow management, as well as evaluating the overall presentation of
law with § 26a (1) sentence 2 KWG. statement, consolidated statement of changes in equity and the consolidated financial statements and group management
Taxes on profit/loss are are shown as in financial statements. segment reporting together with the group management report report. We believe that our audit provides are a reasonable
CRR institutes are required to publish the following for the business year from 1 April 2014 to 31March 2015. The basis for our opinion.
information under "Country by Country Reporting". This report contains the relevant data of fully consolidated preparation of the consolidated financial statements and the
companies as of March 31, 2015. group management report in accordance with German commer- Our audit has not led to any reservations.
1. company name, type of activity and cial law are the responsibility of the parent company’s manage-
geographical position of branches The average number of employees is shown in terms of full time ment. Our responsibility is to express an opinion on the consoli- In our opinion, based on the findings of our audit, the consolidat-
2. turnover equivalents according to § 267 (5) HGB. dated financial statements and on the group management report ed financial statements comply with the legal requirements
3. average number of employees in Full Time based on our audit. and give a true and fair view of the net assets, financial position
Equivalent (FTE) and results of operations of the Group in accordance with these
4. profit/loss before tax  We conducted our audit of the consolidated financial statements requirements. The group management report is consistent with
5. income taxes and profit/loss in accordance with Article 317 HGB ("Handelsgesetzbuch": the consolidated financial statements and as a whole provides a
6. government aid received "German Commercial Code") and generally accepted German suitable view of the Group’s position and suitably presents the
standards for the audit of financial statements promulgated by opportunities and risks of future development.
the Institut der Wirtschaftsprüfer (Institute of Public Auditors
in Germany, IDW). Those standards require that we plan and
perform the audit such that misstatements materially affecting Düsseldorf, 17 July 2015
profit/loss income taxes government the presentation of the net assets, financial position and results
turnover average number before tax on profit/loss aid received
of operations in the consolidated financial statements in accor- (Original German version signed by)
in EUR of employees in EUR in EUR in EUR
dance with German principles of proper accounting and in the
Germany 60,186,583.09 250 7,949,662.26 1,260,401.74 0,00 group management report are detected with reasonable assur- KPMG AG
France 26,222,264.63 81 28,309,634.80 7,525,071.84 0,00 ance. Knowledge of the business activities and the economic Wirtschaftsprüfungsgesellschaft
Sweden 4,710,829.33 27 6,169,230.37 7,896.51 0,00 and legal environment of the Group and expectations as to
Norway 16,659,199.88 28 10,967,344.16 0.00 0,00
possible misstatements are taken into account in the determina-
Spain 16,788,147.67 47 3,404,596.38 5,836,246.69 0,00
tion of audit procedures. The effectiveness of the accounting Kügler, Wirtschaftsprüfer
Italy 4,917,747.27 12 393,402.73 597,594.84 0,00
related internal control system and the evidence supporting Ernstberger, Wirtschaftsprüfer
Poland 12,401,839.90 107 1,098,740.18 423,625.38 0,00
the disclosures in the consolidated financial statements and the
Russia 56,759,052.91 153 26,744,348.89 5,901,237.31 0,00
group management report are examined primarily on a test
basis within the framework of the audit.

type of activity place of business country

Toyota Kreditbank GmbH bank Cologne Germany


Toyota Leasing GmbH financial services Cologne Germany
Toyota France Financement bank Vaucresson France
Toyota Kreditbank GmbH Tyskland, Sverige Filial bank Sundbyberg Sweden
Toyota Kreditbank GmbH, Norsk Filial bank Drammen Norway
Toyota Kreditbank GmbH, Sucursal en Espana bank Madrid Spain
Toyota Kreditbank Germany, Filiale Italiana bank Rome Italy
Toyota Bank Polska S. A. bank Warsaw Poland
Toyota Leasing Polska Sp. z o.o. financial services Warsaw Poland
ZAO Toyota Bank Russia bank Moscow Russia

In the event of the publication or transmission of a version of the consolidated financial statements and/or the consolidated management report which diverges
from the version on which we delivered our opinion, including translations into other languages, in so far as our audit opinion is quoted or our audit referred to,
a fresh opinion must be obtained from us. In this respect, the reader is referred to Section 328 of the German Commercial Code.

72 – 73
toyota-bank.de

Toyota Kreditbank GmbH


50415 Köln
Deutschland

Tel. +49 (0) 2234 102 10


Fax +49 (0) 2234 102 70
www.toyota-bank.de