Note 1-35

35 Concretely, 23 types of financial indexes utilized in the FY1993-FY2001 period by the world's top 20 banks were used in terms of total financial assets, and typical characteristics as components of the banks' financial soundness were extracted using the principal component analysis method. In analyzing the characteristics of the principal components, greatest attention was given to the financial indexes' group with high absolute value of the characteristic vector. Component No. 1 "basic profitability" had a contribution ratio of 45%, and component No. 2 "safety" had a contribution ratio of 17%. Next, by integrating the numerical values of each financial index as a share of the characteristic vector, the score of principal components for each separate bank was extracted. For details, see Omura, Mizukami and Takahashi (2002).