Company history

Fuyo General Lease was incorporated in May 1969 in Otemachi, Tokyo, with capital of ¥100 million subscribed by six companies of the Fuyo Group — the corporate grouping built around the lending relationships of Fuji Bank, formalized in 1964 and ranked alongside the Mitsubishi, Mitsui and Sumitomo keiretsu — with the trading house Marubeni-Iida and Fuji Bank at its centre. Its customers were, from day one, the group itself: Marubeni, Fuji Bank, Nippon Kokan, Showa Denko.

The timing was the point. Japanese manufacturers and distributors in the late 1960s had enormous appetite for plant and equipment, but bank lending left them owning the assets and carrying the depreciation and maintenance. American-style leasing took all of that off the customer’s books and sold only the use of the machine, and it was spreading fast in Japan. Fuyo General Lease built its sales route out of two borrowed assets — Fuji Bank’s credit standing and Marubeni’s commercial network — and grew through leases of industrial equipment, information systems and office machines.

From the late 1980s the whole Japanese leasing industry began to specialize, and Fuyo did it by joint venture rather than by department: an auto-leasing subsidiary in January 1987, a rental and leasing company with Yokogawa Electric in the same month, a US subsidiary in 1988 to serve Japanese companies in North America. The most consequential of these looked minor at the time — in July 1999 the company set up an aircraft-leasing entity in Ireland, the world’s densest cluster of aircraft lessors, tiny at first but the foundation of a heavy-asset business it would build out fifteen years later. A joint venture with Nichii Gakkan the same year opened medical and welfare leasing.

The 1990s had already forced a rethink: Fuji Bank was consumed by bad property loans, and an industry whose growth depended on a parent bank’s credit lines found that model shaking. Fuyo moved down the value chain into resale and rental — construction-equipment rental in 1994, a sales company for off-lease assets in 1996 — building the gains on asset disposals that would later show up as a main pillar of the leasing and instalment segment.

Then the banking system reordered itself. Dai-Ichi Kangyo, Fuji and the Industrial Bank of Japan merged into Mizuho Financial Group in September 2000, and the affiliated operating companies of all three had to be rationalized. Fuyo General Lease became the vehicle: it absorbed Anshin Lease, from the old Yasuda Trust Bank, in April 2001, Yasuda Lease, from Yasuda Life, in April 2002, and the leasing finance division of Fuyo General Development. Three Fuyo-affiliated lessors were folded into one, and the customer base expanded at a stroke — unconsolidated sales of ¥370.4 billion and recurring profit of ¥18.3 billion by the year to March 2006.

What the enlarged company still lacked was funding independence. Leasing is asset-intensive — every contract begins with buying the equipment — and borrowing almost exclusively from Mizuho Bank left a single channel supporting the whole balance sheet. Competitors had already solved this: Orix had pulled far ahead through diversification, and Mitsubishi UFJ Lease, Hitachi Capital and Tokyo Leasing were all listed. Fuyo prepared for four years, and on 7 December 2004 listed on the Tokyo First Section at an offer price of ¥2,200, lifting capital from ¥125 million to ¥10.5 billion. The Fuyo shareholders stayed, but thirty-five years after its founding the company had become an independent listed financial firm rather than a group subsidiary. It used the freedom immediately, consolidating the mortgage securities house Nihon Teito Shoken in May 2007 to put real-estate finance alongside leasing as a second pillar.

In April 2008 Fuyo paid Sharp $301.9M (¥31bn) for 65% of Sharp Finance, a specialist in leasing and instalment finance sold through the dealers of office machines, IT equipment and medical devices. Fuyo’s own business was the opposite shape: single large contracts negotiated directly with corporate customers. What it bought was not merely earnings but a business model — vendor finance, in which the distributor originates the deal, the credit quality is screened at the point of sale, and the lessor’s own sales cost falls. That template would be reused in every major acquisition Fuyo made afterwards. It also proved its worth immediately: when Lehman Brothers collapsed five months later and credit seized across the Japanese leasing industry, Fuyo’s consolidated sales for the year to March 2009 slipped only slightly, to ¥372.3 billion, protected by a diversified book and by the simple fact that lease payments keep arriving through a downturn.

Sato Takashi, who had joined Fuji Bank in 1977 and risen to managing executive officer at Mizuho Corporate Bank, became president in November 2009, charged with the post-Lehman rebuild and with integrating Sharp Finance. A Chinese subsidiary followed in October 2011 — after the United States and Ireland, a third pole in Asia — and sales reached ¥408.5 billion with recurring profit of ¥27.1 billion in the year to March 2011. In July 2014 the company bought a British firm specializing in managing aircraft during their lease terms and reselling them afterwards, giving it, fifteen years after the Irish entity, an end-to-end aircraft business: an asset class where a single airframe costs billions of yen and where residual-value judgement is the whole skill.

From the year to March 2015 the segments were redrawn, with the old lending business renamed finance and broken out beside leasing. The proportions showed why: in the year to March 2016, of ¥493.8 billion of sales, leasing and instalment supplied 95%, finance 2% and everything else 2%. The point of separating them was to make the small non-leasing businesses visible enough to be grown. The industry left no choice. The 2008 revision of lease accounting had pushed lessees to put contracts on their own balance sheets, IFRS 16 was coming, and low interest rates were compressing lease yields — so lessors everywhere were shifting towards heavy assets, fund investment and project finance, and adjacent services. In a 2014 newspaper interview Sato put it plainly: raise the share of the business that is not leasing.

Tsujita Yasunori — Fuji Bank 1981, later deputy president of Mizuho Bank and of Mizuho FG — became president in April 2016, an appointment that said as much about leasing’s standing inside Mizuho as about the man. He turned his predecessor’s slogan into deals. In January 2017 Fuyo took 51% of Accretive by tender offer for about $101.6M (¥11bn): a Don Quijote subsidiary providing factoring — buying trade receivables for early cash — and back-office outsourcing for retailers. It brought high-turnover small-ticket finance next to the slow, heavy lease book, and it lifted the “other” segment from ¥16.8 billion of sales in the year to March 2018 to ¥85.4 billion the year after. More followed on the same pattern: an office-equipment subscription business in 2018, the BPO group LN Holdings in 2019, Daiwa House’s Yamato Lease in 2020, and Toshiba’s WorkVision, which sells IT systems to local governments, in October 2021.

The identity caught up with the portfolio. Fuyo published its first integrated report in 2018, folding ESG and financial disclosure together, and adopted a corporate slogan about leasing ideas and expertise rather than machines. Sales reached ¥740.3 billion in the year to March 2021 with recurring profit of ¥48.0 billion, and the final year of the Stage III medium-term plan, to March 2023, set records across the board: ¥688.7 billion of sales, ¥59.7 billion of recurring profit and ¥38.9 billion of net profit. Over Tsujita’s six years recurring profit more than doubled.

Oda Hiroaki — Fuji Bank 1986, continuing a presidential succession spaced almost exactly five years apart by bank intake year — took over in April 2022 and launched a five-year plan, Fuyo Shared Value 2026, that places shared-value creation at the centre of strategy and regroups the businesses into three tracks: energy and environment, BPO and ICT and healthcare; mobility, logistics and the circular economy; and real estate and aircraft. By the year to March 2025 the group reported ¥678.4 billion of sales, ¥64.8 billion of operating profit — already above the plan’s ¥64–66 billion target — and net profit of $302.7M (¥45bn). Leasing and instalment still supplied 86% of sales, finance 6% and the rest 8%, which is the honest measure of how far the diversification has travelled: it now carries much of the profit, but the core business still carries the revenue. Two acquisitions in early 2025 — a healthcare M&A brokerage and a logistics-equipment dealer — filled in the plan’s priority areas in the way the company has always filled them in, by buying somebody else’s subsidiary.