Shinsei Bank Strengthens Tier I Capital Applying Certain Measures

Board of Directors of Shinsei Bank, Limited, at a meeting held on Friday, March 6, 2009, approved the following measures to strengthen Shinsei Bank's Tier I Capital as outlined below 1. Overview In order to strengthen its Tier I Capital,

By None

Board of Directors of Shinsei Bank, Limited, at a meeting held on Friday, March 6, 2009, approved the following measures to strengthen Shinsei Bank’s Tier I Capital as outlined below:

1. Overview

In order to strengthen its Tier I Capital, Shinsei Bank has decided to implement two measures. First, Shinsei Bank will issue Tier I preferred securities to institutional investors in Japan that will invest a portion of the proceeds they receive from APLUS Co. Ltd. (“APLUS”), after it acquires and cancels a portion of its Class-D preferred shares from these investors. This transaction will allow Shinsei Bank to transfer a portion of its Tier II capital to Tier I capital as Class-D preferred shares of APLUS are presently included in Shinsei Bank’s Tier II capital. Second, Shinsei Bank will also issue Tier I preferred securities to a select group of institutional and corporate investors in Japan. Both measures are expected to be implemented in March 2009.

2. Details of Individual Measures

a) Establishment of overseas special purpose subsidiary for private placements of preferred securities to qualified institutional investors in Japan

Shinsei Bank will establish Shinsei Finance III (Cayman) Limited for private placements of preferred securities to qualified institutional investors in Japan that are presently holders of APLUS Class-D preferred shares. The preferred securities to be issued are step-up and non-step up non-cumulative perpetual preferred securities that qualify for the inclusion in Tier I capital as outlined under the Basel Capital Accord. Specific terms and conditions will be determined at a later date. Please refer to “3. Description of Preferred Securities to be Issued” for an overview of terms and conditions.

b) Acquisition and cancellation of a portion of Class-D preferred shares issued by APLUS, as well as the issuance of Class-H preferred shares by APLUS

APLUS has decided to acquire and cancel, from a portion of its holders excluding Shinsei, its cumulative Class-D preferred shares. APLUS will issue the same amount in non-cumulative Class-H preferred shares as the Class-D preferred shares to be acquired and cancelled, and Shinsei Bank will subscribe to all of these Class-H preferred shares.

A portion of the capital returned to investors of Class-D preferred shares that will be acquired by APLUS is scheduled to be reinvested in the preferred securities to be issued by Shinsei Finance III (Cayman) Limited, as listed in a) above. The measures as discussed in a) and b) above will result in a partial reclassification from Tier II to Tier I capital as outlined under the Basel Capital Accord, and is therefore expected to contribute to enhance the Tier I capital base of Shinsei Bank.

c) Establishment of overseas special purpose subsidiary for private placements of preferred securities to a limited number of select institutional and corporate investors in Japan

Shinsei Bank will establish Shinsei Finance IV (Cayman) Limited for private placements of preferred securities to a limited number of select institutional and corporate investors in Japan. The preferred securities to be issued are step-up and non-step up non-cumulative perpetual preferred securities that qualify for the inclusion in Tier I capital as outlined under the Basel Capital Accord. Specific terms and conditions will be determined at a later date. Please refer to “3. Description of Preferred Securities to be Issued” for an overview of terms and conditions.

D.C.

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