FY2021 Earnings Results Briefing

May 30, 2022

Today’s Key Message
1. FY2021 earnings results and FY2022 plan FY2021 earnings results: Consolidated net income was 18.3 billion yen (up 27.4% YoY).
(Profits increased for two consecutive years.)
 FY2022 plan
: Profit attributable to owners of parent is expected to be 18.6 billion
yen.
We will endeavor to attain, for the third year in a row, anincrease in profits by maintaining the upward trend.

2. Change to a holding company structure (scheduled for October 2022)
 Our goal Synergy: Expansion of service focus, appropriate allocation ofmanagement resources, evolution of the group governance“An organization capable of continuing to create new value
for the region”: (1) Develop new businesses; (2) Develop and expand existing
businesses; and (3) Cost synergy

3. Shareholder return and use of capital in the future Shareholder return Use of capital: Dividend of 28 yen per share (+5 yen);
Repurchase of own shares: 2.0 billion yen* (*Of which, the repurchase of
1.0 billion yen is ongoing.)
Total return ratio: 39.3%: Toward the achievement of our long-term management plan, we
will accelerate the accumulation of assets in growth areas andimplementation of strategic investments in new businesses.

2

I. Earnings Results for FY2021 and Forecasts for FY2022

III. Change to a Holding Company Structure

Summary5

Reasons and Objectives for the Change to a Holding Company
Structure27

Net Interest Income

6

Philosophy of the Chugin Group28

Net Fee Income

7

Holding Company Structure29

Corporate-solution-related Revenues

8Group Structure (Flow of Structure Change)

30

Revenues Related to Assets in Custody

9

Governance Structure

31

Expenses

10

Business Model

32

Credit Costs and Non-performing Loans

11

33

Major Accounts ((1) Deposits & Assets in Custody; (2)Loans; (3) Securities)

Intended Synergy Effects After Change to Holding Company
Structure

12

Earnings Forecasts

15

IV. Capital Policy, Governance and Cross-held Shares

II. Management Strategies of the Chugoku Bank Group

Capital Policy

35

Shareholder Return Policy

36

Corporate Governance37

Cross-held Shares

38

Management Plan

17

KPI of the Medium-term Management Plan

19

"Five Pillars" of the Medium-term Management Plan

20

[Reference Materials]

Alliance/Partnership Strategies

24

Initiatives for the Principal Measures (Sustainability)

39

For inquiries regarding this document, please contact:
Management Planning Department, The Chugoku Bank, Ltd. (Shimizu or Matsuo)
TEL: +81-86-234-6519

Email: souki01@chugin.jp

3Section I
Earnings Results for FY2021
andForecasts for FY2022

FY2021 Earnings Result(billion yen)

–Summary–
FY2018FY2019FY2020

FY2021[Consolidated]

YoY

vs. Plan*

Consolidated ordinary income

23.6

17.4

21.2

25.8

4.6

0.7

Profit attributable to owners of parent

16.1

11.9

14.4

18.3

3.9

0.4

Core business gross profit

77.0

74.7

76.3

80.2

3.9

1.6

Net interest income

63.0

58.2

58.8

61.6

2.8

0.3

Net fee income

14.8

15.8

15.6

17.1

1.5

0.6

Net other operating profits

- 0.8

0.6

1.8

1.5

- 0.3

0.8

Expenses (-)

54.2

54.0

52.7

51.9

- 0.8

- 0.8

OHR (%)

70.3

72.2

69.1

64.7

- 4.4

- 2.3

Core business net profit
Excl. gains or losses on cancellation of
investment trusts

22.8

20.7

23.5

28.3

4.8

2.5

21.7

20.6

23.4

28.3

4.9

2.7

Credit cost (-)

4.1

5.6

8.0

7.6

- 0.4

1.9

Bond trading loss, write-off

1.1

- 0.5

- 0.5

- 2.9

- 2.4

- 2.9

Equity trading and evaluation loss

1.4

0.0

5.5

6.0

0.5

3.2

Other

0.6

0.7

- 1.5

- 0.2

1.3

- 0.3

Ordinary profit

21.9

15.4

19.0

23.4

4.4

0.3

Net income

15.3

10.8

13.0

16.9

3.9

0.3

[Non-consolidated]*Forecast published on Nov. 12, 2021

• Profit attributable to owners of parent: 18.3 billion yen (+3.9 billion yen YoY; +0.4 billion yen vs. Plan)• On a non-consolidated basis, core business net profit increased by 4.8 billion yen year on year due togrowth of net interest income and net fee income and to a steady reduction in expenses.

5Net Interest Income[Loan yield][Factors behind change in net interest income](%)

 Yen based: ¥51.5 billion(+¥0.5 billion YoY)• Interest on loans and discounts:
Flat YoY• Interest on securities: -¥0.5 billion YoY• Yen, other:+¥1.0 billion YoY(Gains on short-term management such
as BOJ’s special deposit facility) Foreign currency-based: ¥10.0 billion(+¥2.2 billion YoY)• Interest on loans and discounts:-¥0.7 billion YoY• Interest on securities:+¥1.3 billion YoY• Foreign fund procurement cost:-¥1.5 billion YoY

Loan yield
Loan yield (yen)

1.08

0.90

0.86

FY2018(billion yen)
1.5
0.8
0.6 - 0.6

58.8

0.1 - 0.6 0.1

1.0- 1.5 0.9

0.84

FY2019

0.87

0.81

0.80

FY2020

FY2021

0.90

0.79
FY2022
Plan

- 0.0
61.6

0.4 0.1

1.04[Return on securities]
(%)
1.17
1.10

0.91

+2.8 billion yen

0.81
0.81

0.95

FY2021

Foreign currency,
other

Fund procurementfrom foreignexchange market

Interest on foreign
currency deposits

Return on foreign
currency securities

Av. Foreign
currency
securities balance

Loan yield(foreign currency)

Avg. foreign
currency
loan balance

Yen, other

Interest on yen
deposits

Return on yen
securities

Avg. yen securities
balance

Loan yield (yen)Avg. yen loanbalance

FY20200.85
Return on securities

0.75

0.77
0.72

Return on yen securities
FY2018FY2019FY2020

FY2021

FY2022Plan• Yen net interest income: Loans remained flat year on year by compensating for the decline in yield with an increase in the averagebalance. Securities decreased by 0.5 billion yen year on year due to the drop in return. Other (short-term management of the current
account deposits at BOJ, etc.) increased by 1.0 billion yen year on year, leading the total yen net interest income to a year-on-yearincrease of 0.5 billion yen.
• Foreign currency net interest income: Increased by 2.2 billion yen year on year due to stable and low interest rates on fundprocurement, the improvement of return on securities by replacement of portfolio, etc.

6

Net Fee Income[Net fee income]+1,487(million yen)

15,857

17,15915,672

14,88615,000+448
Assets in custody*1

10,000

4,467

4,319

3,074

2,932

5,155

5,444

4,767

4,375

Investment banking
business

2,092

Remittance/collection fees

5,139

+729

3,661

-630

4,814

5,000

*2

Other

3,280

3,161

2,977

FY2018FY2019FY20203,917

0*1 Four products in custody (investment trusts, insurance, municipal bonds,
financial instrument brokerage) + inheritance-related business

FY2021*2 Since FY2021, dividends on group credit life insurance, which were traditionallyaccounted for as miscellaneous income, have been posted as a deduction item of“insurance premiums paid” under the “Other” category (a positive factor for profits).

• Revenues from assets in custody and investment banking business were robust (higher than the pre-COVID-19
pandemic level).
• We improved profitability in fees and commissions and enhanced fee income by further strengthening our consulting
business.

7

Corporate-solution-related Revenues[Revenues from solutions for corporate customers](Net interest income, net fee income,
11,997net other operating profits, etc.)[Breakdown of loans to the headquarters](Balance at end of Mar. 2022)

Corporate loans

11,551+1,482(million yen)

1,171

10,515

1,143

Leasing*1

Marketable
loans

10%
32%

32%
1,177

Fees onderivatives

1,169

Other
1,222
Other investmentbanking
Intermediary fees
(M&A, consulting, etc.)

Fees oncorporate bonds
Fees onsyndicated loans

238

250

620

789

535
756
572

956

983

643

430

*All CLOs are rated AAA or AA and issued mainlyin the U.S. (Managed within a fixed investment
value after conducting stress tests)[Breakdown of intermediary fees] (million yen)

+375

1,100
1,441

956

1,066

Interest on loans*2(SF, non-Japanese)

5,748*1. Gross profit of The Chugin
Lease Co., Ltd.

Asset finance

27%
CLO*

+200

325
Investmentbankingbusiness
recorded in
net feeincomeProject finance

670

6,185

Business
succession,
other

756

Business
matching

179

M&A*2. Foreign currency loans are
extraordinary profit.

FY2020

FY2021

FY2022
Plan

266
186

Consulting

4,865

91

121

983
128
230

225

147

340

383

400

FY2020

FY2021

FY2022Plan• Growth of fees on syndicated loans which met customers’ financial needs and an increase in intermediary fees due tocollaboration with local qualified professionals and in consulting sales contributed to the increase in revenues.
Total corporate-solution-related revenues increased by 1,482 million yen year on year.
• In FY2022, we expect a reactionary decline due to an increase in derivative business in the previous fiscal year, but the
total corporate-solution-related revenues will remain at a high level.

8Revenues Related to Assets in Custody[Breakdown of revenues related to assets in custody]+605(+448)(million yen)Group total(Bank parent)

6,539(4,467)

7,330(4,767)

7,862(5,015)[Inheritance-related business]*Testamentary trusts,
inheritance support business, etc.

No. of successful
contracts
196

171

6,725
(4,319)

132
2,847

Group
subsidiaries+158(Securities, asset
management)

2,072

2,564

2,406
FY2019FY2020

FY2021250
Inheritance
relatedFinancial
instrument
brokerage

261

119
207

1,023

+102

1,119
128

1,221
23

[Tsumitate NISA][iDeCo contracts]

Sales value(billion yen)

Cumulative number ofparticipants (persons)65

31

12,426

0.95

1,132

Municipal bonds

1,597

1,339

12,046

1,331

1,074

11,6600.63Life insurance

0.39

+243
Investment trusts

1,599

1,886

2,129

2,030

FY2020

FY2021

FY2022FY2019 FY2020 FY2021

FY2019FY2019 FY2020 FY2021

Plan• Total revenues related to assets in custody increased by 605 million yen year on year due to the increase in investment
trusts and financial instruments brokerage on the back of the strengthened cooperation with the Group companies and of
responses to customers’ asset succession needs.
• In FY2022, we will continue to endeavor to further increase revenues by responding to customers’ asset-related needs inour group-wide efforts.

9Expenses[Expenses](billion yen)

-0.8

60

54.2
Taxes

54.0

30

51.9

3.0

2.8

3.1

3.0

Other property
expenses

12.1

12.0

11.6

Deposit insurance
premium

2.0

2.0

2.0

Systemexpenses

9.0

8.7

8.3

-0.8

7.5

Personnel
expenses

27.8

28.2

27.7

+0.3

28.0

(of which, retirement
benefit cost portion)

(0.5)

(1.0)

(1.3)

(0.9)

FY2018FY2019FY2020

FY2021

50

40

52.7

-0.2

11.4
2.1

20

10

0

• System expenses decreased by 0.8 billion yen due to a decline in software investments in reaction against the system
renewal conducted in the previous fiscal year and to a decrease in maintenance expense.
• Personnel expenses increased by 0.3 billion yen due to increases in expenses relating to personnel system reform andan increase in bonuses. Total expenses decreased by 0.8 billion yen.

10

Credit Costs and Non-performing Loans[Credit costs](billion yen)

Other credit costs*
Provision of general allowance for loan losses
Provision of specific allowance for loan losses*Other credit costs: Writing off of loans, allowance for credit to specific foreign
borrowers, allowance for loss on sale of loans, loss on sale of loans, andrecoveries of written-off receivables

8.0
0.0

7.6
0.2

[Non-performing loans (NPL) (Loans disclosed
under the Financial Revitalization Act)](billion yen)
*The Chugoku Bank does not carry out partial direct write-offs.

NPL ratio*NPL ratio afterpartial direct
write-offs

5.6
0.0

5.0

2.3

3.2

FY2019

1.77%

1.50%

1.53%

1.45%

1.18%

91.6
72.9

3.7

1.73%

31.1
311

95.7
283
28.3

Substandard

22.9
229

Doubtful

28.1
281

383
38.3

46.4
464

Bankrupt

218
21.8

220
22.0

20.9
209

FY2019FY2020

FY2021

4.2
2.3
FY2020

FY2021(Reference) Calculation method of general allowance for loan losses• The expected loss rate is calculated based on the actual loan loss rates for three consecutive calculation periods, with one period being three years
and each moved one year forward.
• The expected loss rate shall be either the “most recent three-period average” or the “most recent two-period average,” or the “long-term average
starting from FY2008,” whichever is larger (changed from FY2021).
• Loans to healthy accounts and substandard I accounts are adjusted by taking into consideration the average remaining period of the receivables.

• Total credit cost remained at 7.6 billion yen, roughly unchanged from the previous fiscal year.
General allowance for loan losses increased on the back of a rise in actual loan loss rates and due partly to changes in
the calculation method.
• The NPL ratio remained flat at a low level (1% level).

11

(Reference) Major Accounts: (1) Deposits & Assets in Custody[Average balance of deposits and assets in custody](billion yen)

8,500

Total assets incustody(Deposits + NCD)

7,838.3(6,826.0)

144.0
275.0
420.5

Municipal bonds

174.9
282.0

Insurance

407.0

586.1

Financial instrument
brokerage

7,500

8,386.8(7,409.3)
7,719.5(6,715.5)

156.3
590.1

138.0

+7.9%

190.1
292.7
5,500

436.2

465.1

Other
Deposits + NCD

Domestic
corporate clients
Deposits + NCD

152.1
257.3

148.3

Investment trusts

6,500

+4.9%

8,803.4(7,801.5)

371.1

2,015.2

1,866.0
1,645.9

150.1
492.0
1,596.0

+4.8%

4,500
Domestic
corporate clients
Deposits + NCD

4,627.4

4,715.0

FY2018FY20194,957.0

5,196.2

3,500

FY2020

FY2021*Financial instrument brokerage represents the average balance based on the acquisition price. Municipal bonds are based on the face value. Insurance is based on
the average balance that takes into account cancellations. Investment trusts are based on the average balance of net assets (including defined contribution pensions).

• Deposits + NCD increased significantly for both corporate and retail clients due to payment of COVID-19-related benefits,
securing funds on hand, and curbed consumer spending.

12

(Reference) Major Accounts: (2) Loans+2.4%[Average loan balance](billion yen)

4,734.4

5,000

21.8

3,000

5,175.7

24.4

25.1

4,811.6

23.3
+3.3%

Hong Kong Branch

4,000

5,053.1

1,210.0

1,170.6
1,100.6

1,141.9

Loans to theheadquarters*3

459.6

484.0

Local government
loans

493.2

477.0

Urban
development*2

620.9

584.4

Personal loans

542.9

633.7

467.5

451.3

623.2

631.1

2,000
Almostunchanged

1,000

Local
development*1

2,038.0

2,100.8

2,224.0

2,224.3

FY2018FY2019FY2020

FY20210*1 Local: Regions other than Tokyo and Osaka *2 Urban: Tokyo and Osaka *3 Loans to the headquarters: Non-Japanese loans and SF centers• Local development remained flat, reflecting consistent financial support during the COVID-19 pandemic. Personal loans
maintained strong growth mainly in housing loans. In response to the increase in deposits, etc., loans to the headquarters
increased the balance while curbing risks. Total loans increased by 2.4% year on year.

13

(Reference) Major Accounts: (3) Securities[Average balance of securities]

2,435.6(billion yen)
Investment
partnerships

2,304.9

Investment
trustsForeigncurrency
bonds*1

2,352.4

16.6

15.4
16.0

Equity2,000[Unrealized
gains/losses]

+83.2

84.7

91.6

84.5
+17.7

167.9

150.2
150.8
329.8

+75.5

405.3

310.7

End of Mar. End of Mar.
2021
2022

(billion yen)
Total

YoY

136.6

94.5

- 42.1

Held to maturity

0.2

0.1

- 0.1

Other securities

136.4

94.4

- 42.0Equity

62.2

53.7

- 8.5

Investment trusts

53.4

48.3

- 5.1

Foreign currency bonds- 0.2- 12.0- 11.8

Yen bonds

20.0

3.8

- 16.2[Duration of bonds]
Yen bonds

5.8

5.5

4.2

4.2

End of Mar. 2021

End of Mar. 2022

5.5

1,772.1
1,735.8

1,761.2
3.7
Yen bonds
Foreign currency bonds

End of Mar. 2020

1,000
FY2019FY2020

FY2021*1. Includes foreign currency investment trusts• Average balance of securities hovered at a high level on the back of growth of the deposit/loan balance due to anincrease in deposits.
• Regarding foreign currency bonds, the positions were reduced and management policy was reviewed in response torising interest rates in the U.S since the beginning of 2022.

14

Earnings Forecasts

Consolidated(billion yen)

FY2021

FY2022

ResultForecast

Consolidated net income

ChangeConsolidated ordinary profit

25.8

27.1

1.3

Consolidated net income

18.3

18.6

0.3

18.3

18.6

FY2021

FY2022

16.1
14.4

Non-consolidated

11.9

Core business gross profit

80.2

79.5

- 0.7

Net interest income

61.6

61.8

0.2

Net fee income

17.1

16.7

- 0.4

Net other operating profits

1.5

0.9

- 0.6

Expenses (-)

51.9

51.1

- 0.8

Core business net profit

28.3

28.4

0.1

Credit cost (-)

7.6

6.7

- 0.9

Provision of general allowance forloan
Provision of specific allowance for
loan

5.0

2.3

- 2.7

2.3

4.4

2.1

Securities-related gains/losses

3.0

3.0

0.0

Other

- 0.2

0.2

0.4

Ordinary profit

23.4

24.9

1.5

Net income

16.9

17.3

0.4

FY2018FY2019FY2020Core business net profit

22.8

FY201828.3

28.4

FY2021

FY202223.5

20.7

FY2019FY2020• We will strive to maintain the trend of higher profit in FY2022, the final fiscal year of the Medium-term Plan, with the
emergence of the effects of past measures taken.
• Furthermore, we will work to achieve further growth as the “Chugin Financial Group” by changing to a holding company
and aggressively investing in new businesses.

15Section II
Management Strategies of the
Chugoku Bank GroupLong-term Management Plan “Vision 2027:
Plan for Creating the Future Together” as the Basis In March 2017, we formulated our 10-year Long-term Management Plan “Vision 2027: Plan for Creating the Future Together” basedon our long-term vision to “Create with Our Community, Customers and Employees a Rich Future that We Can All Share” withthe aim of establishing a sustainable business model by overcoming the declines in population and profitability.

Long-term vision
Create with Our Community, Customers and Employees a Rich Future that We Can All Share

[Framework for achieving the long-term vision]

Initiatives for creating a rich future─ Improve the quality of the services we provide─ Increase opportunities to provide services

Initiatives for creating the foundation of management
─ Enhance our capabilities to provide services
─ Reform the mindsets of individuals and the organizational culture17Positioning of the Medium-term Management Plan
“Plan for Creating the Future Together: Stage II”
 Based on the achievements of the structural reforms (strategic investments and streamlining operations and enhancing sales capabilities
through BPR measures) under the previous Medium-term Management Plan, we will establish “our proprietary business model,” which canquickly respond to changes of the external environment and enables the Group and local communities to grow together.
 To that end, we will strengthen our organizational power and human resources development under the new Medium-term Management
Plan.
FY2017

3 years

FY20203 years

FY20234 years

FY2026Long-term Management Plan “Vision 2027: Plan for Creating the Future Together”
Previous Medium-term Management Plan
“Plan for Creating the Future Together: Stage I”

New Medium-term Management Plan “Plan for
Creating the Future Together: Stage II”

HOP Enhance tangible aspects

STEP Enhance intangible aspects

ThoroughstructuralreformSecure personnel
and time for sales
activities

Domestic exchange & counterreception
Teller operation reforms

Headquarters

Sales offices

Sales
Sales activity reforms(organization and human resources)

Reduction of HQ operations
Workstyle reforms

JUMP Culmination of efforts

1
Enhancement ofinitiatives for regional
revitalizationand the2
SDGs
Deepening ofcustomer-oriented
sales activities

Five
Pillars

Loans
Concentration of loan administration
to HQ and streamlining“Plan for Creating the Future Together:
Stage III”

5

3

Vitalization of theorganization

4
Enhancement of
the digitalization
strategy

Establish a businessmodel that enables
the Group and local
communities to growtogether
The Chugoku Bank
Group will become
the regional platform

Establishment of asustainable growth
model

18

Key Performance Indicators (KPIs) of the Medium-termManagement Plan “Plan for Creating the Future Together: Stage II”• We have set the value we can provide stakeholders as the KPIs of the Medium-term Management Plan “Plan for Creating the Future
Together: Stage II.”
• We will aim to increase the regional (East Setouchi Economic Zone*1) population and GDP in the long run by achieving the KPIs.

Stakeholder

KPI
Number of projects addressing local
issues and contributing to the SDGs

Local community(1) Sum of the number of startups for which
we provided support*2 and the number ofcompanies we provided support inbusiness succession*3(2) Activities contributing to the improvementof financial literacy*4

FY2021ResultFinal year of theMedium-term Plan
(FY2022)

Continuous improvement Continuous improvement

133 (in 2 years)－

200 companies in
3 years－

Continuous improvement－397 (in 2 years)
More than 7,000
participants at lectures

Final year of theLong-term Plan
(FY2026)

Customers

Customer satisfaction*5(Retail and corporate)

FY2020: Corporate
questionnaire 74% satisfaction
FY2021: Retail questionnaire
65% satisfaction

Employees

Labor share in core business net profit
before payment of personnel cost*6

49.75％At least 54%－

Profit attributable to owners of parent(Over the final-year target)

15.0 billion yen

30.0 billion yen

Consolidated total capital adequacy ratio(Basel III)13.83％

Consolidated ROE

3.29％

Shareholders, etc.
(All stakeholders)

18.3 billion yen*1. East Setouchi Economic Zone: Okayama Prefecture, Kagawa Prefecture, eastern Hiroshima Prefecture (Bingo region),
western Hyogo Prefecture (Harima region)*2. Number of startups for which we provided support: Number of startups as a result of our event for startup support, etc.
*3. Number of companies we provided support in business succession: Number of companies to which we provide
business succession consulting services*4. Activities contributing to the improvement of financial literacy: Number of events and study sessions that contributed tothe improvement of financial literacy, business skills, etc.

Continuous improvement Continuous improvement

Maintained stably at 12% Maintained stably at 12%－

At least 5%(single-year basis)*5. Customer satisfaction: Sum of “Satisfied” and “Somewhat satisfied” replies in customer
questionnaires (Corporate and retail customer questionnaires are conducted every otheryear.)*6. Labor share in core business net profit before payment of personnel cost: Personnel
expenses divided by the sum of core business net profit and personnel expenses

19

Five Pillars of the Medium-term Management Plan
“Plan for Creating the Future Together: Stage II”

1Enhancement of initiatives for regional revitalization and the SDGs
 Confront the various issues surrounding the local areas and aim to solve the issues, create new businesses and work
toward the SDGs.
 Solve social and environmental issues by providing our know-how to customers, forming various partnerships, and working
toward the SDGs.

2

Deepening of customer-oriented sales activities As The Chugoku Bank Group, provide new value to customers and solve their various issues.
 Strengthen integrated sales by sales offices and the HQ, enhance services including non-financial services, enter new
business areas including personnel placement, local trading companies and business consulting services, and strengthensynergies within the Group.

3

4

5

Vitalization of the organization
 Position employees as the Group’s important stakeholder and raise their job satisfaction and offer support in self-fulfillment
and development.
 Establish an organizational system where employees can work with greater job satisfaction than before by reforming thepersonnel system, reviewing the performance commendation system, and further delegating authority to blocks and sales
offices.
Enhancement of the digitalization strategy
 The rapid progress of digitalization of finance provides a significant business opportunity for the Group.
 Aim to increase customer contact points and create new customer experience using digital technologies throughincreasing/improving smartphone apps for retail customers and opening a portal website for corporate customers. Further
streamline banking operations through digitalization.
Establishment of a sustainable growth model To respond to the harsh market environment, such as sustained negative interest rates, strive to stabilize revenue in thecore business, including new business areas, and fundamentally review the cost structure to achieve sustainable profit
growth.

20

Five Pillars of the Medium-term Management Plan
“Plan for Creating the Future Together: Stage II”[Summary: Progress and achievements of the five pillars]
Major initiatives to date1

Enhancement of initiatives for regional
revitalization and the SDGs
 Establishment of a dedicated section and theSustainability Committee Promotion of regional revitalization involving local
communities and customers

2

Deepening of customer-oriented sales activities
 Introduction of local headquarters systems andindependent goal setting Deepening of consulting sales activities andacceleration of new businesses

3

Vitalization of the organization
 The first “overall revision” of the personnel system
in 17 years
 Promotion of diversity

4

Enhancement of the digitalization strategy
 Acceleration of digitalization of sales, clerical andheadquarter businesses
 Release of “Chugin application”*For details of the “Five pillars” initiatives,
please see the attached Reference Materials.

Achievements in FY2021[Number of startups forwhich we provided support*][Support for initiatives of
local governments]

Eight

Front-running area of
decarbonization(Increased by five startups
compared with FY2019)*Startups as a result of our event forstartup support, etc.

Establishment of a sustainable growth model Expense control, reorganization of sales offices,personnel reallocation, etc.

Digital Suburban
Health Special Zone
(Kibichuo Town)[Corporate-related revenues*][Retail-related revenues*]

11.9 billion yen

7.3 billion yen(Increased by 2.9 billion yen(Increased by 0.8 billion yen

compared with FY2019)

compared with FY2019)*Corporate-solution-related revenues[New businesses]
Three newly establishedcompanies*(Consulting, personnel placement,
and investment-specific companies)*Including companies to be established[Chugin app]5

(Nishiawakura Village)

70,000 customers(Nine-month total)*Assets in custody-related revenues[New personnel system]
Expansion of fields for those
who can play active part
Fostering of autonomous andchallenging culture(Establishment of internal startups
and expert positions, abolishment of
restrictions on career path, etc.)

[OHR]

64.7%
(Decreased by
7.5 percentage points
compared with FY2019)21

Five Pillars of the Medium-term Management Plan
“Plan for Creating the Future Together: Stage II”[Future additional growth investment (to increase assets)]
Sustainable Finance

Increase Revenues from Loans

Goal forEnvironmental and social finance
FY2030 Invested amount: 1,500 billion yen(Balance: approx. 700 billion yen)

• Loans for renewable energy, sustainable loans, storage batteries,
EVs, medical care, nursing care, education, regional-revitalizationrelated loans, COVID-19-related loans, etc.
• Utilization of accumulated know-how of the Headquarters Loan
Department, and enhancement of cooperation with local
governments by regional headquarters and the consulting
services subsidiary to be established (offering proposals fromupstream)

The Group companies will lead the regional initiatives for
decarbonization and sustainability.

 Image of future implementation(Accumulated total)
1,500



Middle-risk clients, ocean-going ship clients, etc.
(balance: approx. 200 billion yen)
• Risks are taken appropriately for local development in whichrisks can be assessed (increasing average balance and yields).
Target for
FY2026

Personal loans

Housing, apartment houses, unsecured loans, etc.
(balance: approx. 100 billion yen)
• Stimulation by our life plan advisors of the customers’ needfor inheritance measures
Enhancement of card loans under the advertising strategy

The balance of loans will increase to over 1 trillion yen in
the future.

¥1.5 trillion

Sustainable Finance(Of which, environment related)billion yen¥1 trillion• Capital adequacy ratio: an impact of approx. 2% decrease (*roughly
estimated using the most recent local development RW)• Interest on loans will increase by approx. 6.5 billion yen (*roughly
estimated using the yields on yen new loans), and attached net fee
income (such as consulting fees) will also increase.

The growth of the top line by taking the above risks will becomea growth driver in the future.

1,000

Consolidated
ROE

5%
3.29%
¥30.0
billion500

Consolidated
net income

0
FY2020

FY2022

FY2024FY2026

Target for
FY2026

Local development

FY2028FY2030¥18.3
billionFY2021・・・

・・・
FY2026

FY203022

Five Pillars of the Medium-term Management Plan
“Plan for Creating the Future Together: Stage II”[Additional future growth investment (strategic investment)]
New Businesses

New risk taking
in newbusinesses

Consulting services subsidiary(to be established in September 2022)
 Provision of consulting services centering on
digital transformation (DX) and sustainability
transformation (SX)

Chugin Capital Partners, Limited(Established in April 2022)
 Support and development of companies engaging
in business succession through fund investment
and hands-on support, startups, regional
revitalization business companies, etc.
 Promotion of introduction of renewable energy in theregion through investment in renewable energy PPA
model* led by municipal governments

Chugin Human Innovations Co., Ltd.
(Established in May 2022 to start operationsin October 2022)
 Personnel placement business has been started by the
Bank since August 2019.
 Provision of solutions for customers’ sophisticated needsof “human resources” will be enhanced by establishing apersonnel placement company.
*PPA model:
A business model in which an electric power consumer provides areas,such as land or roofs, for a PPA business operator to install, operate
and maintain electric power generation equipment, such as solar
panels, for free, and the power consumer pays the electricity charge.

The investment amount is
unknown (to beconsidered in the next
medium-term plan).

DigitalDigital strategy vision of The Chugoku Bank:“Pursue comprehensive services business toserve every aspect of customers’ lives andbusinesses”
Effective use of
information owned• Customers’ attributes, financial
position, accounts, backgroundof negotiations, etc.

Coordination with otherindustries and TSUBASA:
OnAd Co., Ltd.

Development of digitaltalents• Enhancement of mid-career
recruitment, and coordination
with a consulting services
subsidiary

Future contacts with customers
Chugin app(started in July 2021)

Best mix of“real” and “digital”

ID The mainstream contact
with customers will be
digitalized.

Password

ログイン

Corporate portal
services (to be openedin August 2022)
業績予測 各種情報提供

 Customer-oriented
optimum channel
strategy (Omni-channel)

業務サービス
営業支援
資金調達
受発注
会計
生産管理

Our
goals:

 Sales offices will
become consulting
service offices.

Release of bank’s functions to otherindustries (BaaS)
Establish position as the regional platformer

23

Alliance/Partnership Strategies
TSUBASA Alliance:－ We pursue scale advantage and synergies in this broad and large-scale alliance.
 Total assets of 96 trillion yen represent
the largest following those of Japanesemega banks (as of Mar. 2022).
 Twenty-six million retail customers and2.2 million corporate customers
correspond to those of the Japanesemega banks.

TSUBASA Alliance Co., Ltd.


Responds to member banks’ common key challenges andconsolidates operations
Advanced services and functions developed by member
banks will be applied horizontally.
Business Strategy
Department

AML Center

Head office location

 Prevent money launderingand terrorist financing

Branch location

T&I Innovation Center
Co., Ltd.
 API common infrastructure,
FinTechOnAd Co., Ltd.

Since
October 2021

CoordinationDX
ESG/SDGs
New businesses
Human resources
development
 Consolidation and effective
use of information

Operation started
in April 2022.

 New initiatives born from alliance Cost reduction, streamlining of operations
Sharing the mission-critical system

Sharing operation departments

TSUBASA FinTech foundation

Sharing sub-systems

Sophisticating AML operations

TSUBASA Smile A joint venture established by Nomura Holding, Inc., The Chiba Bank,
Ltd., Daishi Hokuetsu Bank，Ltd. and The Chugoku Bank, Limited

 Enhancing the top line
Coordinated finance

Effective use of group companies

Inheritance-related business

Personnel exchange

M&A business platform

Provides new financial consulting services specialized
in online advice
Three characteristics

Strengthen coordination by sharing each bank’s
knowledge◆Neutrality ◆Specializing in provision of advice◆Services completed online

24

Alliance/Partnership Strategies
Regional coordination strategy－ Accelerate coordination over the borders of industries toward regional
development
October 2019

February 2021

February 2022

Okayama Co-creation Partnership• Coordination with local financial
institutions
Support for startups, business meetings,
personnel exchange, etc.

Regional Decarbonization
and Creation Okayama
Consortium
Okayama Future
Co-creation Alliance• Coordination with Okayama
University
Contribute to regional developmentby sharing mutual information andknow-how and achieving SDGs

Coordination with local governments(regional revitalization, etc.)• Okayama Prefecture, Okayama City,
Kurashiki City, Mimasaka City,
Tamano City, Fukuyama City, Mitoyo City

March 2022

• Industry-university-government-financial
institution collaboration in Okayama
Prefecture
A unique regional revitalization anddecarbonized society will be realized byeffectively using the regional
characteristics and resources.
(Secretariat)
Chugoku-Shikoku Regional Environment
Office of the Ministry of the Environment
The Chugoku Bank, Ltd.
Okayama University

Coordination agreement
concerning regional revitalization
Major coordination• Achieve, penetrate and promote
SDGs• Build partnerships in the region• Promote industry-academia
cooperation• Provide support for venture capital• Digital transformation• Human resources development, etc.

• Coordination with PwC Consulting LLC, aleading general consulting firm
• Provide full-fledged community-based
consulting services centering on DX and SX
support= Establish new regional revitalization models

25Section III
Change to a Holding Company StructureReasons and Objectives for the Change to a Holding Company StructureWith the intention of building a sustainable business model that will mutually develop together with bothregional society and customers, the Bank will change to a holding company structure in order to continue
implementing a framework geared toward realizing its 10-year strategy at a higher level.

To a holding company
structure

The Bank's corporate principle was to "remain firm in self-driven sound management to develop in
step with regional society by providing unwavering trust and superior comprehensive financial
services." To this end, to date it has undertaken activities to develop regional society by creating asound corporate culture that can accurately respond to customer needs.
Meanwhile, regional society today faces various social issues and rapid changes that include
social structural changes, such as a decreasing population and aging society, the spread of
COVID-19, and the digitalization development opportunities that it affords, as well as theacceleration of global decarbonization efforts to combat global warming. This type of environment
greatly affects the lifestyles of individuals and the business activities of corporations and makes theissues faced by regional society and customers ever greater and more complex, leading tosignificant changes in the role to be played by regional financial institutions.
In order for the Group to contribute to the sustainable development of regional society in this typeof business environment, it has decided to change to a holding company structure as anorganizational structure that will allow it to enhance its service menu even further than that to datethrough an “expansion of service focus,” implement an “appropriate allocation of management
resources” so it can continue to provide that enhanced service menu, and continue to pursue “theevolution of group governance.” Moreover, in order to foster unity as a group, in place of thecorporate principle set forth above, it has newly enacted as the group corporate principle its longterm vision to “create with our community, customers and employees a rich future that we can all
share,” which was prescribed in the long-term management plan. Under this new corporate
principle, the Group will strive to improve corporate value by establishing a sustainable businessmodel that will mutually develop together with both regional society and customers andevolving into a comprehensive services business focused on finance while also flexibly
responding to changes in the business environment.

October
2022
A new company(to be established)
Chugin Human
Innovations Co., Ltd.
(to be established)

2020

2010

2000

1987

1982

Evolution into a “comprehensive services businessfocused on finance”

1981
1979

Toward an organization that cancontinually create new value for the region

1930

2022

Establishment of
Chugin CapitalPartners, Limited
Establishment of
SETONOWA Co., Ltd.

Establishment of Chugin
Securities Co., Ltd.

Establishment of The Chugin
Operation Center Co., Limited

Establishment of The Chugin Card
Company, Limited
Establishment of Chugin AssetManagement Company, Limited

Establishment of The Chugin
Lease Company, Limited

Establishment of CBS
Company, Limited

Establishment of The Chugin
Credit Guarantee Co., Limited

Changes in the Chugin Group

Founding of The
Chugoku Bank, Limited*Chugin Human Innovations and the company to be newly established will be established before the establishment of
the holding company, subject to approvals, etc. of the competent authorities.

27

Philosophy of the Chugin GroupAs the corporate principle that truly expresses the mission that must be accomplished by the Chugin Group, we haveadopted a phrase from the long-term vision set forth in our long-term management plan, “Vision 2027: Plan for Creating the
Future Together,” as our group corporate principle.
In addition to this corporate principle, our philosophical system consists of the management vision, which describes ourintended form and the Chugin values, which are the values shared by all officers and employees.

MissionMission we must
accomplish in society(Our raison d’être)VisionOur intended form

Group Corporate Principle
Create with our community, customers and employees arich future that we can all share

Management Vision
A comprehensive financial services group that is “chosen” and“trusted” by customers in the region

Chugin Values
Value
Values shared by all officers
and employees

Code of Conduct
Standards of conduct that must be observedby all officers and employees(Successor to the former “Chugin-no-kokoro”)

To customers: We aim for a win-win with customers.
As an individual : We realize our dreams through work.
As a company : We provide job satisfaction andopportunity for growth.
Corporate Codeof Conduct

Basic matters that must be observed without fail as amember of society when carrying out corporate activities

Guidelines for the
Basic standards for judgment that must be considered
Conduct of Bankby each officer and employee when executing business
Clerks:The Chugin Group has decided to establish the above-mentioned implementation as the“Sustainability Basic Policy.”

28

Holding Company StructureWith the intention of building a sustainable business model that will mutually develop together with bothregional society and customers, the Bank will change to a holding company structure in order to continue
implementing a framework geared toward realizing its 10-year strategy at a higher level.

By being named “Chugin,” which is the brand that has been built up group-wide to date, we
make it clear that it is the Group’s holding company and incorporate the wish that we want tocontinue to develop with regional society and customers while keeping our finance focus that
we have cultivated for many years.
Location of head
office15-20, Marunouchi 1-chome, Kita-ku, Okayama City

Representative

Sadanori Kato, Director and President (Representative Director) (Current Director andPresident of The Chugoku Bank)

Business details

1. Management of banks and other companies that can be held as subsidiaries pursuant
to the Banking Act, and all other business incidental or related thereto; and2. Business that can be conducted by the holding company of a bank pursuant to the
Banking Act other than the business set forth in the preceding item

Stated capital

16.0 billion yen

Date ofestablishment

October 3, 2022

Book-closing date

March 3129

Group Structure (Flow of Structure Change)
STEP１

By establishing the holding company through a share transfer solely by the Bank on October 3, 2022 as theeffective date, the Bank will become a wholly owned subsidiary of the holding company.

STEP２

After the establishment of the holding company, the Bank plans to reorganize a total of eight companies as
direct investment subsidiaries of the holding company: “The Chugin Lease,” “Chugin Securities,” “The Chugin
Card,” “Chugin Asset Management,” “SETONOWA,” “Chugin Capital Partners,” “Chugin Human Innovations,”
and the “strategic consulting company.”

Current Status
Before establishment of holding
company

STEP１
At establishment of holding company

STEP2
After establishment of holding
company (same date as STEP 1)

Shareholders

Shareholders

Shareholders

The Chugoku Bank

Chugin Financial Group

Chugin Financial GroupThe Chugoku BankThe Chugoku BankThe Chugin Credit Guarantee
CBS

The Chugin Credit Guarantee

The Chugin Credit Guarantee

The Chugin Operation Center

CBS

CBS

The Chugin Operation Center

The Chugin Operation Center

The Chugin Lease

The Chugin Lease

The Chugin Lease

Chugin Securities

Chugin Securities

The Chugin Card

The Chugin Card

Chugin Asset Management

Chugin Asset Management

SETONOWASETONOWASETONOWA

Chugin Capital Partners

Chugin Capital Partners

Chugin Capital Partners

Chugin Securities
The Chugin Card
Chugin Asset Management

Chugin Human Innovations (planned)

Strategic consulting company (planned)

Chugin Human Innovations (planned)

Strategic consulting company (planned)* Chugin Human Innovations and the “strategic consulting company” are planned to be established before the establishment of the holding company, subject
to approvals, etc. of the competent authorities.

30

Governance Structure
We will work to evolve group governance by making the holding company a company with an audit and supervisorycommittee and by the Board of Directors working to separate execution and supervision. By proceeding with the transfer
of authority to group companies, we will create quick decision-making and an efficient operational posture.
Each group company will increase its autonomy as an organization by planning and implementing specific plans andmeasures itself based on the holding company’s group-wide management policies, etc.

Chugin Financial Group, Inc.

Group companies
The Chugoku Bank

General Meeting of Shareholders

Audit and Supervisory
Committee

Audit and Supervisory
Committee Office

AuditGroup Management
MeetingNomination andCompensation Committee

Advisory

Committees:
Compliance Committee
ALM Committee
Risk Management Committee, etc.

Instruction/
reportingCorporate
Administration
Department

Sustainability
Promotion Department

Human Resources
Strategy Department

NEXT 10 Promotion
Department

Group Business
Strategy Department

The Chugin Lease
Chugin Securities
The Chugin Card
Chugin Asset Management

SETONOWA

Audit & Inspection
Department
Corporate Planning
Department

Consultation/
reporting

Advisory/
response

Instruction/
management

Disclosure/explanation

Election/dismissal

Board ofDirectors

The Chugin Credit Guarantee
The Chugin Operation Center, CBS

Audit

Chugin Capital Partners

Audit
Chugin Human Innovations

Secretariat
Strategic consulting company

31

Business Model
We will provide solutions to customers’ diverse needs and social issues as a close-knit group and work
to combine both further development of regional society and customers with sustainable growth andimproved corporate value for the Chugin Group.

Extrinsic motivation
Environmental issues:
Climate change/resources/
biodiversity, etc.

Social issues:
Diversity/human rights, etc.

CSR

New
domains

Existing
domains❶ Expansion ofservice focus❷ Appropriate allocation of management resources❸ Evolution of group governance

Respond to environmental and social issues through business
Provide added value in response toneeds and issues

Chugin Values

Chugin Financial GroupManagement Vision

Potential needs/actualized needs

Through the three objectives of “expansion of service
focus,” “appropriate allocation of management
resources,” and “evolution of group governance,” we will
construct a flexible organizational structure that willwithstand changes in the business environment.

Group Corporate Principle

The Chugoku Bank/group companies

Chugin Group

Intrinsic motivation

Furtherdevelopmentof regionalsociety andcustomers

Mutualdevelopment

Sustainablegrowth andimproved
corporate
value for the
ChuginGroup

Strengthening of corporate governance, risk management and compliance system

Chugin Group value creation process32Intended Synergy Effects After Change to Holding Company Structure
The Chugin Group aims to maximize group synergies and become a comprehensive services business focused on
finance by strengthening unified group operations with the “expansion of service focus,” “appropriate allocation ofmanagement resources,” and “evolution of group governance” as their growth drivers.

Improved
revenues
throughdevelopment of
new business

Improved
revenues throughdevelopment andexpansion ofexisting business

Improved profit
through costsynergies

Demonstrate capacity to solve problems by providing new
added value Provide new added value that was lacking within the group to date
 Pursue synergy effects through strengthening of cooperation with existing
businessStrengthening of group sales system Pursue sales synergies in existing business companies through strengthening ofcooperation between group companies Group companies work in unison to provide diverse solutions for problem solving

Greater efficiency and concentration of management resources
through consolidation, etc. of back-office departments
 Cost reduction through review of overlapping operations between companies within
the group Concentrated investment in focus businesses through review of allocation ofmanagement resources within the group33

Section IV
Capital Policy, GovernanceandCross-held Shares

Capital Policy[Capital balance]
The three points consisting of soundness, profitability and enhanced shareholder
returns will be well-balanced.
• Stable management baseSoundness• Response to local customers’ financing needs, implementationof growth investments• Improvement of profitability, enhancement of shareholder returns

Profitability

Enhanced
shareholder
returns Viewpoints of regional community/customers,
shareholders/investors and the soundness of banking
business should be satisfied in a good balance.

Consolidated ROE (%)

Consolidated capital adequacy (%, billion yen)

5% or more in the
final fiscal year of
the Long-termManagement Plan

13.83
13.50

Consolidated
13.22
capital adequacy
ratio (%)

12.88

39,691
3,969.1

40,867
4,086.7

13.04
4.03

38,485
3,848.5

41,556
4,155.6

4,028.6
40,286

3.29

3.01
2.68
2.27

Risk assets(billion yen)

*On a consolidated net assets basis
including valuation difference on
available-for-sale securities
'18/3

'19/3

'20/3

'21/3

'22/3

FY2017 FY2018 FY2019 FY2020 FY2021

・・・

FY202635

Shareholder Return Policy[Shareholder return policy for FY2022] Shareholder return ratio of at least 35% throughdividends and share buybacks (consolidated basis)ーEnhancement of shareholder returns by stable and continuous increase in dividends and flexible
share buybacksー
Shareholder
return ratio

35.1％* On a non-consolidated
basis up to FY2019
On a consolidated
basis since FY2020

36.9%(+1 yen)(+2 yen)

20 yenTotal amount ofreturns¥6.8 billion

22 yen22 yen39.3％

35% ormore

3.0

28 yen28 yen23 yen¥7.2 billion¥5.5 billion¥5.3 billion

1.4¥4.1 billion

1.0

3.8

4.1

4.1

4.3

FY2017FY2018FY2019FY2020*Share buybacks arethose carried out within ayear from the general
meeting of shareholders.

Total dividends

38.2％(+5 yen)Dividend per
share

Share buybacks

36.2％

2.0

5.2

FY2021

FY2022

Shareholder return policy: “35% or more of profit attributable to owners of parent”• In FY2021, dividend per share was increased by 5 yen to 28 yen, and share buybacks amounted to 2.0 billion
yen (of which, 1.0 billion is in progress).

36

Corporate GovernanceWe pursue “sound and sustainable growth” concurrently with “medium- to long-term
improvement of corporate value” by enhancing corporate governance.
The Chugoku Bank  We selected the Prime Market, where more sophisticated governance is required.
 The Sustainability Committee was established (as announced on April 27, 2022).

(After the change to holding company) Chugin Financial Group
Outside Director

Board of Directors of the holding
company(Executive) Directors

Audit & Supervisory
Committee Members

Holding Company Structure Percentage of independent outside directors: 44.4%(4 of 9 directors; including 1 female director)

Nomination andCompensation Committee(arbitrary committee)

 Establishment of the Nomination and Compensation
Committee (plan): (The Chugoku Bank established the committee on
December 22, 2017.)

One Outside Director

 Formulation of the “Basic Policy for Successor Plan ofRepresentative Director” (plan): (The Chugoku Bank established theThree Outside Directors
Chaired by an outside director

plan on December 21, 2018.)

 Outside Directors with diverse career backgrounds
were appointed.
Principal background
Expected area
Former Representative Director and Managing Director,
ITOCHU Corporation
Corporate
Former President, Chairman & Representative Director,
management
ITOCHU ENEX Co., Ltd.
Former Director, Managing Executive Officer, Kao
Corporate
Corporation
management
Finance andCertified public accountant
accounting

Outside Directors (subject to approval at the general
meeting of shareholders, and after the change to holding company)
Name
Akira Kodera
Holdingcompany

ChugokuBank

Toshihide Saito (Audit and Supervisory
Committee Member)
Kazuhiro Tanaka (Audit and Supervisory
Committee Member)
Yukiyo Kiyono (Audit and Supervisory
Committee Member)
Hiromichi Furuya (Audit and Supervisory
Committee Member)
Yasuhiro Hitomi (Audit and Supervisory
Committee Member) (newly appointed)* The Outside Director resigning: Yoshiro Sato

Attorney at law

Legal matters

Former Vice-Governor, Okayama Prefecture

Economic policy

Former Director in charge of Development and Design
Department, Fishing Operations Division, SHIMANO INC.

Corporate
management37

Cross-held Shares
We pursue improvement of capital efficiency by constantly reducing cross-held shares.
The Board of Directors will examine
the status on a regular basis.

Initiatives toward reducing cross-held shares The relevant shares are held only when it is considered asnecessary for continuous growth and corporate value
improvement of the issuers of the shares and the Group.
 From the perspectives of capital efficiency and the reductionof shareholding risks, we will reduce the shares throughcommunication with the issuers.
Outstanding cross-held shares
19.1
17.1

982
98.2

11.5

919
91.9
617
61.7

605
60.5

End of Mar.
2017

End of Mar.
2018

End of Mar.
2019

• Negotiate improvement oftransaction profitability• Negotiate reduction of thenumber of shares held

Consolidated capital adequacy ratio (%)(Market value basis)

Consolidated capital adequacy ratio (%)(Book value basis)

10.8

894
89.4

624
62.4

• Profitability, taking cost of capital
into account• Relationship with local economy• Viewpoint on managerial strategy

Book value (billion yen)

16.6

11.2

[Shares not satisfying theshareholding criteria]Market value (billion yen)

14.5
12.1

[Judging whether or not theshares should be held]

15.5
13.9

9.7
869
86.9

740
74.0

9.1

Further reduction will beconsidered in the next
Medium-term Plan.

765
76.5

551
55.1

54.3
543

50.2
502

End of Mar.
2020

End of Mar.
2021

End of Mar.
2022
*Including deemed holding shares

38

[Reference Materials]

Initiatives for the Principal
Measures (Sustainability)
1. Enhancement of initiatives forregional revitalization and SDGs

40-44

2. Deepening of customer-oriented
sales activities

45-47

3. Vitalization of the organization

48-49

4. Enhancement of the digitalization
strategy

50-51

5. Establishment of a sustainablegrowth model52

1. Enhancement of Initiatives for Regional Revitalization and theSDGs: Initiatives for Regional Revitalization
Initiatives for Regional
Revitalization

Positioning the regional revitalization and SDGs as the “First Pillar” of the current Mediumterm Plan, we will strengthen the initiatives toward regional sustainable development together
with the Chugoku Bank Group, as a whole.

Roles of the Chugoku Bank Group

Mutualcooperation

Human
resources,
information,
funds
Information on
industries andcompanies

Partner companies forrealization

Local
governments

Group

Universities,
research
institutions, etc.

 Through the provision of “human resources,” information,” “Funds,” and “know-how,” we will proactively
revitalize regions in collaboration with local relevant groups and companies.

Establish a place forco-creation(a platform)

Okayama Prefecture as anadvanced prefecture in SDGs

SDGs future cities• Okayama City, Maniwa City, Kurashiki
City, Nisiawakura Village

Japan SDGs Award• Okayama University• Geography and History Club,
Sanyo Gakuen Junior HighSchool / High School, etc.

 Okayama

Initiatives to date
Momosta (Momotary Startup Cafe)

Okayama Innovation Project• A base located in front of Okayama
Station to support entrepreneurs andthose who try to start up a business.

• “School” for learning how to start abusiness and “Contest” for discoveringand awarding talented persons.

COVID-19related loans

Approx. 9,800

Amount of loans
providedNumber of loans
provided

Science Castle• Research presentation
opportunities for junior highschool and high school
students.
The gateway to future
researchers.

Support for startups
Support for
innovation

Okayama Tech Planter• Creates industries andincubates ventures bydeveloping science
technologies.

May 2020

Approx. 330
billion yen

Mar. 2021

Mar. 2022(of which, loans ofapprox. 180 billion
yen were provided
to Credit Guarantee
Corporation)

Issuance of social bonds (corona bonds)• For maintenance of local economy and employment throughfinancial support(Our message to customers by issuing corona bonds)• Maintenance of soundness, generation of surplus capacity forrisk taking, improvement of capital efficiency40

1. Enhancement of Initiatives for Regional Revitalizationand the SDGs: Addressing Climate Change
Addressing Climate
ChangeThrough thorough discussions at the Board Meetings, we are determined to
improve support for and disclosure of the shift to decarbonization in the region.

Challenges in mind
 Risk that local companies may fall behind the decarbonization• Industrial structure of Okayama Prefecture (There are many manufacturers,
including the Mizushima chemical complex and Mitsubishi Motors-relatedcompanies.)• Our credit portfolio also contains many manufacturing companies, which arestrongly aware of the transition risk to decarbonization.
 Risk of occurrence of natural disasters• Although Okayama Prefecture enjoys a mild climate and experienced few natural
disasters in the past, the risk of occurrence of disasters, such as Torrential Rain in
Western Japan (July 2018), has been rising.
 Risk of stranded assets such as loans and securities• Review of portfolio and risk management are needed.

Composition of Okayama gross domestic
product by economic activity (%)
Manufacture
30.0

21.9
Real estate
11.2

10.1
9.2
8.9

12.5
7.5

41.8

46.9

Okayama Prefecture

Nationwide

Wholesale and retail
Public health and social
business
Other

Source: “FY2018 Annual Report on Prefectural
Accounts” Cabinet Office

Initiatives
Our efforts to date: Policy for Responsible Financing and Investment Activity(Apr. 2021)• We clarified that we will carefully examine financing andinvestment activities* that pose a risk or a negative impact on theenvironment or society and make efforts to reduce or avoid theimpact of such elements.
(*Weapons, coal-fired power generation, palm oil plantation
development, logging business)
 Initiatives for “SDGs through our core business”• Private placement bonds for social contribution: The proceeds are
partially applied to themes of SDGs.
• Chugin sustainable loans: Interest rates link to the achievement ofgoals set.
• Chugin SDGs support: Support for the preparation of customers’
SDGs declaration, etc.

Future initiatives
 TCFD* (June 2022)
Governance

Strategy*Task Force on Climate-related
Financial Disclosures
Risk
management

Indicators andtargets

 Reduction of CO2 emissions
Net zero in Scopes 1 and 2* by the end of FY2030*Scope 1: Direct emissions by the Bank through fuel consumption(gas, gasoline, etc.)
Scope 2: Indirect emissions from materials provided by othercompanies (electricity, heat, etc.)

 Sustainable finance
1,500 billion yen by the end of FY2030 (of which,
1 trillion yen is for environment-related initiatives)411. Enhancement of Initiatives for Regional Revitalization and
the SDGs: Promotion Structure The special dedicated section “Regional Revitalization and SDGs Promotion Department” was newly established, and the
Basic Policy of Sustainability and the Sustainability Committee were established.
 From the perspective of the improvement of corporate value over the medium to long term, we will accelerate responses tosustainability issues with the unified efforts of the entire Group.

Startups• Support business forstartups• Industry-academia
coordination, etc.

CSR
• Cooperation,
donation• Planning andimplementation of
CSR events• Formulation of the entire Chugin Group’s
principles of initiatives concerning regional
revitalization SDGs, and provision of support
for regional headquarters and sales offices

Discussion
and reporting

Supervisionand instruction

Board of Managing Directors• Representative Director, President<Matters deliberated>• Identification and review of sustainability
Sustainability Committee
issues• Measures and principles of regional
Management Planning Department / Regional
revitalization SDGs, and the status of the
Revitalization & SDGs Promotion Department
initiatives
Cooperation• Measures and principles of environmental
issues, and the status of the initiatives• Measures and principles of social issues,and the status of the initiatives• Measures for CSR, and the status of theinitiatives• Other matters incidental to the abovementioned items• Concurrently with identifying and reviewing the sustainability issues, we will
deliberate the measures, principles and the status of implementation
concerning “environmental issues,” such as climate change and biodiversity,and “social issues,” such as diversity, labor environment and human rights.
Groupcompanies

Local government• Coordination withlocal governments• Tourism-related
business, etc.

SDGs
• Planning andimplementation of
measures• Planning for sales
offices, etc.

Board of Directors

Headquarters

SDGs<Structure>

Sales Office

Regional
Revitalization[The Chugin Group’s Basic Principles of
Sustainability]＝Implementation of the Chugin Group’s“mission,” “vision,” “value,” and “codeof conduct”[Sustainability Committee]<Chairperson>

Supervision

Regional Revitalization and
SDGs Promotion Department

Basic Principles of Sustainability / Sustainability Committee (since April 2022)

Execution

Regional Revitalization and SDGs
Promotion Department (since June 2021)

421. Enhancement of Initiatives for Regional Revitalization and theSDGs: Local Trading Company and Personnel Placement
 We will establish a business model that enables the Group and local communities to grow together by using the know-how,information and networks of the Group.
 We will contribute to the development of the local economy by accelerating our support for customers’ main businesses
through a local trading company and personnel placement.

Local Trading Company

Personnel Placement
Introduce
personnel as a
candidate for an
executive manager

Analysis, strategy(Localnewspaper) Product planning anddevelopment
Branding
Channel development
Promotion(Branding, design)(Localdepartment
store)(Advertising and producing)

Strengths• Complements knowledge that banks lack, such as indistribution, promotion, design and marketing, through joint
ventures with companies representing the region• Disseminates the region’s appeal by making the most of theknow-how and networks of the five participating companies
and the bank’s managerial resources

Number of
consultations

Breakdown(by product)
1
15

149

13

79
41

Food

Number of contracts
concluded: 49

Artifacts

Consulting: 17

Industrial
products
Technology

Of which, marketing: 9

Other

Of which, planning anddevelopment: 8
Channel development: 32

From Nov. 2020
to Mar. 2022

The Chugoku Bank“SETONOWA”

Management
issues will besolved.

Identify customers’ needs
 Change of generations

Customer

Local trading company

 Reorganization
 Development of new
businesses, etc.

Discussion Sheet on Management
Issues Business process Business trend, strengths andweaknesses of the company
 President’s pending concerns, etc.

“Personnel Placement” Business(since August 2019)
We interview both job seekers and recruiting
companies (“Both-hands style”).
• We deeply investigate the recruiting company’s needs
by effectively using the management issue discussion
sheets. We not only provide information to personnel
placement companies but also the Chugoku Bank itself
directly scouts after interviewing a job seeker.
• Another new company was established in May 2022:
Chugin Human Innovations Co. Ltd.
⇒ We will further contribute to customers’ growth andregional development.

Number of
successful contracts
25
21

3
FY2019 FY2020 FY2021

43

1. Enhancement of Initiatives for Regional Revitalization and theSDGs: SDGs and ESG through Our Core Business We provide strong support for our customers’ achievements in decarbonization and SDGs, etc. by accelerating
SDGs and ESG through our core business.
 We endeavor to improve our corporate value continuously over the long term through support for the local
community and customers.
SDGs and ESG through our core business
Customers’ major SPTs (*)

Customer

Loan

Third-party’s opinion
on the lending scheme

Set environmental targets and report
Check environmental targets
and the reports

Okayama Economic
Research Institute

The Chugoku Bank

“Chugin Sustainable Loan”

Rating and Investment
Information, Inc.

 Ratio of CO2 reduction to net sales (%) Total amount of Recovery and regeneration rate of
implementations
chlorofluorocarbon (%)
 Annual power generation of renewable 2,170 million yen
energy Power consumption reduction rate (%)*Sustainability Performance Targets

May 2021“Chugin SDGs Support”

Mar. 2022

Details of support

The Chugoku Bank will support
your efforts toward the SDGs.

Illustration of Chugin SDGs Support
Sorting of efforts toward the SDGs

Sept. 2021

Assisting preparation of an
SDGs declaration document

Assisting PR of efforts
toward the SDGs

 Simplified examination of the status of
SDGs efforts and feedback Assisting preparation of an SDGs
declaration document
 PR of efforts on website, etc., posting of
the declaration as a news release on our
website, if the customer wishes
299

Total number ofapplications:417

84

Apr. 2021

Sept. 2021

Mar. 2022

44

2. Deepening of Customer-oriented Sales Activities: Corporate Solutions
 Corporate solutions: Sales offices and the HQ unite to propose the optimal solutions for thecustomer.
Local support activities (corporate solutions)■ Assigned a Relationship Management rep at HQ
High-quality
sales offeredby salesoffices and
HQ in unison• Carries out sophisticated solution sales that link
information of the sales sites and professional
knowledge of HQ to establish a deeper relationship withlarge-volume clients■ Established the Ship Finance Center• Consolidates lending operations for ocean-going ships in
the Bingo district of Hiroshima Pref.
• Offers high-quality sales by professionals in charge ofships■ Strengthening consulting business through external
partnerships• Provides consulting services to customers with managerial
issues on business succession, M&A, business plan
formulation, etc.
Capital contribution,
Optimalsolution forthe customer

Capital contribution, Okayama Capital
human resources
Management

The Chugoku
Bank

SMEs withmanagerial
issueshuman resourcesLong Black
Partners Co.,Ltd

■ Assisting through investment in funds• Startup support “Chugin Infinity Fund”• Business succession support “Succession Japan Fund”(measure of the TSUBASA alliance)• Subsidiary specialized in investment “Chugin CapitalPartners”

Customers for relationship management
Both sales offices and the headquarters are continuously incharge of customers whose impact on the local economy issignificant and who are very likely to expand transactions with
the Chugoku Bank.

Proposals with higher added value
Sharing of management issues, andprovision of solutions• Consulting on business succession,
consulting on personnel affairs• Business matching, finance, etc.

Final fiscal yearof the Mediumterm Plan

200
customers

61
61
51
customers customers customers
20
customers

1H
FY20202H
FY20201H
FY2021

2H
FY2021・・・

2H
FY2022

Chugin Infinity Fund (Investment framework: 0.5 billion yen)
Operates in cooperation with the Bank’s programs concerning startup andfoundation, including “Innovation Project” and “Tech Planter”
Supports formulation of growth strategies by effectively using equity, andsupports their growth(FY2021 result: 7 projects equivalent to 170 million yen)

Chugin Capital Partners (April 2022)
Provides proactive support for and develops companies with businesssuccession issues, startups, regional revitalization business operators, etc.
Privateequityfund
VenturecapitalLocal
company

Coordination

Startup

T he
ChugokuBank Group
company

ChuginCapitalPartners45

2. Deepening of Customer-oriented Sales Activities:
Retail Solutions and Group Synergies
 Retail solutions: We support customers’ life plan from both financial and non-financial aspects according to thecustomer segment and sales channel.
 Group synergies: Higher synergies are pursued by seconding or assigning active bank employees to the positionof president of the Group companies, etc.
Life plan support activities (retail solution)

Increase transactions with customers
Life Plan Center (Five centers as of March 2022)

Face-toface
channels
Non-face-toface
channels

Non-financial
services Increase number of branches that conductbusiness on holidays (Life Plan Center, sales offices) Develop an optimal branch network
 Improve customer convenience throughdigitalization• Remote consultation, completing transactions
online, partnerships with fintech companies

 “Chugin Okomarigoto Kaiketsu (Problemsolving) Support”• Inheritance, end-of-life preparations, realestate, housework, nursing care, etc.

Maximization of group synergies
 Strategic assignment of active bank employees
Strategic
group
companies

Expandingthe service
focus(*The underlines indicate an active bank employee took
the position of the president of the company.)•

Insurance

Loan•Manage-ment

Cross-selling with housing loans as an entry point
Renewal ofConclusion of housing
Redemption
interest rate
loan contract
Insurance, Tsumitate NISA, App, unsecured loan, Okomarigoto Kaiketsu(Problem-solving) Support
Insurance reconsideration, asset
management

Average balance of personal loans (billion yen)
Other personal loans

337.8

The Chugin Lease, Chugin Securities, Chugin CapitalPartners, The Chugin Card, Chugin Asset Management,
Local trading company “SETONOWA”, etc.

 Consideration of new business areas• Newly established three companies (company specialized
in investment, personnel placement, support for SX/DX)• New lease areas, utilization of real estate The conventional functions of the housing loan
center were strengthened and the name waschanged to Life Plan Center. (Sales Offices
provided customers with information on holiday
channels.) Consulting sales and cross-selling are conductedaccording to customers’ life plans, with housing
loans and various kinds of insurance as an entry
point.

339.5

831.1

Housing loans
339.3

870.7

804.1

FY2019 result

FY2020 result

FY2021 result

Steadyexpansion ofbusinessfoundation

FY2022 (Final fiscal yearof the Medium-term Plan)46

2. Deepening of Customer-oriented Sales Activities:
Regional Headquarters Structure and Autonomously Set Goals
 Regional Headquarters Structure: Cooperation with region (city, town, village) will be further strengthened by establishingseven regional headquarters according to the administrative divisions.
 Autonomously set goals: Independent and self-disciplined sales activities will be strengthened based on the regional
characteristics and markets of sales offices and regional headquarters.

Introduction of regional headquarters

Bingo
Hiroshima

BicchuHanshin
Bizen

Shikoku

Objectives of the regional headquarters structure: Understanding the challenges and needs that become more
complicated and diversified in each region
 The “Regional Headquarters,” being closest to the field, will lead inplanning and implementation of the sales strategies and regional
revitalization SDGs measures.
• Transfer of authority (cooperation with the region, strategy
planning, personnel system, etc.)• Functional enhancement: (research and analysis, liaison with theheadquarters, sales support, etc.)

Areal analysis andstrategy planning• Regional
headquarters’ activity
policy• Characteristics andinformation of theregionSWOT analysis• Putting the measuresof the headquarters
into practice, etc.
Budgetmeeting

Headquarters

Chuo• Challenges and needsof the region• Situation of eachregion, demographics,
industries, number ofsales offices, market
share, etc.

Regional headquarters andsales officeMimasaka

Customers in the region

Sevenregional
headquarters

Introduction of “Autonomously set goals” by sales offices

Objectives of autonomously set goals:Independent and self-disciplined planning of strategy and activities
based on the regional characteristics and markets.

Establishment of sales systems in which the sales office, theheadquarters and the Group companies have a sense of unity.

Further pursuit of customer-oriented sales activities andimprovement of earnings power.

47

3. Vitalization of the Organization
 On the basis of “Chugin Heart,” we will build a corporate culture from the bottom up to establish a flexible organization capableof responding to internal and external environmental changes.
 We will create an environment where employees can maximize their potential by providing a “comfortable working environment”
and improving “job satisfaction” to provide more customer-oriented quality services as The Chugoku Bank Group.
Activate the organization by responding toenvironmental changes

October 2022
We will endeavor to realize thetransition to a holding company

April 2020
Revision of the performancecommendation system• The commendation system waschanged from quantitativeevaluation to qualitative evaluation.
October 2017
Introduction of “Flat Meeting”• “Meeting for casual but serious discussion”
Communication among employees is deepened
and various ideas and improvement measures
are proposed by the participants.

June 2021, October 2021
Introduction of Regional Headquarters
Structure and Autonomously Set Goals• Transfer of authority and functional
enhancement are promoted by establishingregional headquarters in each region.
• Independent and self-disciplined sales
activities are strengthened by autonomously
set goals by the sales offices

June 2015
Establishment of “NEXT 10
Promotion Department”• CS, ES, diversity, and “Chugin
Heart” are centrally controlled andpromoted while always taking thenext decade into consideration.

Changes in the external
environment
Changes in the internal
environment

April 2021
Revision to the personnel systemof The Chugoku Bank Group• The overall personnel system was revised for the first time in about 17 years, with the aim ofcreating “a group of human resources desired internally and externally.”• Expansion of fields in which one can demonstrate capability, and development of a corporate
culture of self-discipline and challenge
Career path

April 2014
Establishment of “Chugin Heart”

Work styleSelf-discipline• “The standards and sense of value of behavior and judgment” for the directors
and employees of The Chugoku Bank Group were clarified.

Challenge48

3. Vitalization of the Organization
Promotion of diversity

We pursue the improvement of corporate value on a medium- to long-termbasis through employees’ workstyle reforms and active roles played bydiverse human resources.

Health and Productivity Management

Monthly overtime hours worked

Initiatives for the promotion of work-life balance and workstyle reforms• Introduction of flex-time system, working-hour interval system andstaggered working hours• Introduction of a system to precisely record the time of employees’
arrival and leaving, such as log-in records of personal computers• Annual paid leave must be taken by the hour, and 10-day paid leavemust be taken.
• Promotion of Iku-boss (a boss sympathetic to male employees
spending time with their children) and promotion for bothmale and female employees to take childcare leave up to
the maximum number of days they are entitled to

12 hours 30 minutes

Reduction of overtime hours
worked by improving
productivity and workstylereform5 hours 23 minutes↓
Improve working environment
FY2017 FY2018 FY2019 FY2020 FY2021 so that diversified personnel
can play their roles actively

Rate of taking childcare leave
Male

FemaleSupport for balancing work and family life
• Improve systems to enable employees to continue to work without
concerns in the event of child-rearing and nursing care
• We obtained a “Platinum Kurumin” certificate, which is granted toenterprises that support employees in their childcare period.
• We have established the Job Return system in order to enable retired
employees to work again for the Chugoku Bank.

Diversity (employment of those with diverse values and expertise)• Since 2019, we have proactively hired personnel with special skills,
such as consultants and lawyers from diversified industries other thanfinancial institutions.
• We have introduced training programs for mid-career recruits (forimprovement of satisfaction and abilities of the employed).
• In October 2021, a special course was established. (A career path tobecome a specialist in a specific field)

83%

Number and rate of female
executive personnel

100%*The rate indicates employees whosechild was born from April 1, 2020 toMarch 31, 2021, and took child-careleave by March 31, 2022.

10.5

11.2

118

126

Mar.
2019

Mar.
2020

12.7

13.8 (%)(persons)

142

Mar.
2021

158

Mar.
2022

 Personnel who were appointed as General
Manager at the Headquarters in June 2021
• A mid-career recruit (General Manager,
International Department)• A female (General Manager, Regional
Revitalization & SDGs Promotion Department) There are already many mid-career recruits andfemale Branch Managers.

49

4. Enhancement of the Digitalization Strategy
 Digital strategy vision of The Chugoku Bank: “Pursue comprehensive services business to serve every aspect ofcustomers’ lives and businesses”
 We will powerfully promote digitalization by using people (sales), products (sales offices) and information as aregional financial institution.
Step1. (This Medium-term Plan)
Improve user convenience ofexisting services

Step 2. (Next Medium-term Plan)
New financial services

Expand digitalization

Combination of physicaland digital businesses

Retail customers

 Digitalize sales offices(Less back office andmanager operations)(Completion of transactions
on tablets at sales offices) Improve convenience ofretail app

Highly convenient
smartphone app• Used all the time
• Optimal proposals• Liaison with realtransactions(Less clerical work, consulting service)

 Sophisticationof proposals(Omni-channel)(Utilization of AI)

Next-generationtype sales office

Provision of services forevery aspect of life
Introduce and provide physical anddigital services beyond finance on adaily basis
Drugstore

CaféHospital

TravelShopping
mall

Username:

Password:

Sales office tablet“TSUBASA Smile”

SUBMIT

Deepening of digital channels
Enhancement of digitalarmament

Development ofdigital channel
 Provision of corporate portal services(Non-face-to-face loan application)(Digitalization of loan
Corporate platform
agreements)

 Enhanced online
meetings(website and app) Mail marketing for the
purpose of providing
information･･･

Coordination with crossindustrial coordination channel

July 1, 2020
Establishment of Digital Innovation
Promotion Center

Corporate Next-generation-type sales office

Step 3. (2030)
Comprehensive services,
including non-financial services

業績予測 Sophistication and one-stop
service on a corporate portal

各種情報提供業務サービス
資金調達 営業支援
会計

受発注
生産管理

 Sophistication of online financing
and provision of information (using AI)

A partner for business &management consulting
All external sales reps will shift tobecoming consultants who support local
companies’ important decision-making.
Network ofexperts

In-house knowledge
database

AI
Quickly provides appropriate dataaccording to the proposal fromamong a vast sea of data

Bank’s customer
base network

Industry and region
information50

4. Enhancement of the Digitalization Strategy:
Effective Use of “Chugin App”
 On July 7, 2021, “Chugin app” for retail customers started.
 We will realize our new retail sales style, focusing on the use of “Chugin app” in the future.

Chugin app

Effective use of app for future retail sales activity

ID




Password
ログイン

The Chugin app enables customers toaccess various procedures, including
making an appointment to visit a sales
office and applying for loans andcredit cards. Recommendation notices
are being sent according tocustomers’ needs. More functions will
be added.

Status of the use of app (Total)

Approx. 120,000

Passbook app

Approx. 70,000

Chugin app
Released inJuly 2021
1H FY2019 2H FY2019 1H FY2020 2H FY2020 1H FY2021 2H FY2021

Non-face-to-faceChecking bank balances anddeposit/withdrawal statement
Bank transfer (between Head
Office and branches) and booktransfer
Remittance (to other banks)★
Notice of scheduled automaticwithdrawal★
Borrowing and repayment ofcard loans★

Data analysis of customer
informationFace-to-face

Develop the app as the “Main channel”
that connect us to retail customers

Offered functions (★since June 2022)

・Sales offices
・Life Plan Center
Starting
point・Chugin app
・Website, SNS, mail・Call center, etc.

Number of customers who
underwent face-to-facemeeting
Approx. 230,000

Lead them to face-to-facemeeting to offer higher
value-added proposals
Number of customers who
have not undergone faceto-face meeting
Approx. 1,770,000

 We offer higher value-added proposals tocustomers in face-to-face meetings.
• We precisely ascertain customer needs for
conducting problem-solving consulting services.
• We will endeavor to approach customers whom
we haven’t met to date.
 Clerical work will be shifted to non-face-to-face
operations.
• Improve customer convenience, and reduce
clerical work at sales offices51

5. Establishment of a Sustainable Growth Model

We have succeeded in thoroughly streamlining operations due to the digitalization and BPR that we promoted under
the previous Medium-term Plan.
We will carry out fundamental cost reductions toward a sustainable growth model while maintaining and improving
customer convenience.
[Reference] Expected improvement of BOJ standard OHR(% change vs FY2019)

Reduction
targetExpenses (billion yen)

-1% (BOJ’s improvement standard)-3%-3.2 billion yen vs. FY2019-4%- 4.4%

55.6

54.2

54.0

52.7

- 4.9%

51.9- 9.2%

Strive to achieve the standard by
improving profitability and reducing costs
FY2017FY2018FY2019FY2020

FY2021FY2019FY2022

FY2020

FY2021

FY2022*The reduction target includes the end of the 1.4 billion yen peryear amortization of the TSUBASA mission-critical system.

Number of employees

2,961• The number of employees will decrease
under BPR initiatives.
• The effects of improved productivity will
emerge under the current Medium-term
Plan.

2,831

(Previous Medium-term Plan)
BPR period
Mar. 2018

Mar. 2019

No. of offices 159
in Japan
Branch-withina-branch

2,884

Achieve the medium- to long-termtarget to reduce employees to 2,800

Number of sales offices

2,792
2,725

*Non-consolidated number of employees(excluding seconded employees)

Retail banking
offices andsubbranches
Full-banking
services• Achieve 145 sales offices under the
Medium-term Plan
• Consider further improving efficiency

155
151
145

1

6

10

33

34

30

126

121

121

114

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022(Current Medium-term Plan)
Emergence of effects

Mar. 2020

Mar. 2021

Mar. 2022

17
31*Excludes overseas and internet branches

52

This material contains forward-looking statements. These statements do notguarantee our future business performance and include risks and uncertainties. It
should be noted that future performance may differ from the targets mentioned herein
due to changes in the management environment and other factors.