May 13, 2016
Company name: Ashikaga Holdings Co., Ltd.
Representative: Masanao Matsushita, President
and Chief Executive Officer(Code number: 7167 FirstSection, Tokyo Stock Exchange)

Launch of the Mid Term Management Plan, “ASHIGIN WAY 2016”
Ashikaga Holdings Co., Ltd (President: Masanao Matsushita) and Ashikaga Bank, Ltd (President: MasanaoMatsushita) have created the new mid-term management plan named “ASHIGIN WAY 2016”NOTE whose planning
period is FY2016. The contents of the plan are as stated in the APPENDIX.
The plan does not include the effects and influences of the business integration through a share exchange of The
Joyo Bank, Ltd (President: Kazuyoshi Terakado) and Ashikaga Holdings Co., Ltd (together, the “Companies”)
scheduled on October 1, 2016. The plan only covers 1 year because a newly created plan including the synergy effects ofthe business integration of the Companies will be announced when the business integration takes effect. The key
performance indicators of the plan are those of Ashikaga Bank, Ltd, a major consolidated subsidiary, since the business
forecast for the entire fiscal year of Ashikaga Holdings Co., Ltd on a consolidated basis cannot be expected as thebusiness integration is scheduled in the middle of this fiscal year.
The measures and target of the synergy were announced in the “Notice Regarding Definitive Agreement
Concerning the Business Integration of The Joyo Bank, Ltd. and Ashikaga Holdings Co., Ltd through a Share Exchange”
of April 25, 2016.
(NOTE) “ASHIGIN” is an abbreviation of “Ashikaga Ginkou” which means “Ashikaga Bank” in Japanese.

End<Contacts for inquiries regarding this notice>
Ashikaga HD
Ebihara and Yagi, Corporate Planning Department, Public Relations and IR Group Tel: 028-626-0401,0404

APPENDIX

Mid-term Management Plan
ASHIGIN ＷＡＹ 2016

Ashikaga Holdings Co., Ltd.
The Ashikaga Bank, Ltd.

Contents

１．Outline
１－１ Long-term Vision/ Mid-termManagement Targets
１－２ Key Performance Indicators（KPIs）
１－３ Basic Concepts
１－４ Basic Strategies

２．Individual Customer Strategy
２－１ Initiative based on “Relationshipbased” Approach
２－２ Initiative based on “Function-based”
Approach
２－３ Important Indicators

３．Corporate Customer Strategy
３－１ Corporate Customer Strategy
３－２ Enhancement of Business Nature Evaluation
Method４．Regional Economic Revitalization
Strategy５．Securities Strategy
６．Strategy to Enhance Management
Functions６－１ Strategy to Enhance Management Functions
６－２ Human Resource Development
６－３ Improvement of Productivity1１－１ Long-term Vision/ Mid-term Management Targets
Growth in harmony
with our region
Investment ofmanagement
resources

Our region

Enhancementof operational
base

Provision of services
required by our region
Stable and sustainableprofit base The bank that grows in harmony
with our region
 Enhance our core strengths forthat purpose

Our mission is contribution to the growth of our region
Become the bank that grows in harmony with our region, in compliance with our corporate
philosophies ：“In harmony with our region” and ”To contribute to the creation of affluence”.

Enhance our core strength for the growth of our region
A stable and sustainable profit base is required in order to continue to provide services
required by our region and to contribute to the growth of our region for many years

Mid termmanagementtargetContribute to the regional revitalization through “Enhancement ofour core strength” and “Realization of the integration synergy”
2１－２ Key Performance Indicators（KPIs）≪The Ashikaga Bank, Ltd. (Non-Consolidated basis)≫

Profitability

FY2016Gross Business Profit¥81bn

Net business income¥32.5bn(before general allowance for loan losses)

Deposits (Average Balance)¥5.4tnLoans(Average Balance)¥4.2tnLoans to corporate customers (exc. Tokyo branch and prefectural
office branch) + Loans to individual customers¥3.3tnInvestment Trust under Custody¥370bnOHR

50-60%

Capital Adequacy Ratio

8.5%

GrowthEfficiency

Soundness

Non-performing Loan Ratio

less than

2.2%
3

１－３ Basic Concepts
Contribution to the regional
economic growthBusiness scopes identifying the businessenvironment

・Proactively promote regional revitalization inorder to overcome the regional economic
contraction due to population decline

・Expand service and product lineup and enhance provision of them,considering increase of population ages 65+
・Through consulting based on business nature evaluation, proactively
solve our customers’ business challenges caused by regional economic
contraction , etc.
・Explore the possibilities of new business portfolios including practicaluse of Fin Tech, considering progress of ICT and financial deregulation

・Contribute to the regional economic
revitalization by supporting local businesses’
growth through business nature evaluation“Relationship-based approach” and “Function-based approach"“Relationship-based approach” ＝ Consulting and business nature evaluation“Function-based approach” ＝ Improvement of familiarity and convenience
・Provide more extensive services and products, including consulting services based on business nature evaluation, while theprofitability of loans is lowering
・Help individual customers invest their assets through customer-oriented consulting
・Provide services with more familiarity and convenience by strengthening our planning capability. Focus especially on
unsecured loans for which there are strong customer needs

Enhancement of Management Functions for the bothapproaches

Effective relocation ofmanagement resources

・Cultivate consulting related staff for the sales promotion based on“Relationship-based approach”
・Improve productivity of administrative staff and sales promotion staff inorder to carve out time for customer relations

・Relocate limited management
resources into areas expected togrow4

１－４ Basic Strategies≪Relationship≫ ➢Enhancement of sales promotion of asset under custody primarily to
middle class and wealthy senior generation➢Establishment of asset succession business≪Function≫➢Expansion of customer base through improvement of familiarity andconvenience

Corporate customer strategy≪Relationship≫ ➢Business support through business nature evaluation➢Enhancement of fee business through consulting≪Function≫➢Efficient small loan promotion
Regional economic revitalization strategy➢ Support for startups and second startups to increase number of establishments and employees in the region➢Enhancement of customers’ corporate value through consulting services based on business nature evaluation➢”Regional Revitalization” in corporation with local governments➢Support for development of social infrastructure

Securities strategy➢Expansion of securities portfolio by taking appropriate levels of risk

Enhancement of our core strength

Individual customer strategy

Strategy to strengthen management functions➢Human resource development ➢Improvement of productivity➢Improvement of function of channels and outlets ➢Enhancement of marketing functions➢Advancement of profit management ➢Sophistication of credit management

5２－１

Individual Customer Strategy
Initiative Based on “Relationship-based Approach”

 Enhance sales promotion of asset under custody and inheritance related business primarily
targeting increasing middle class and wealthy senior generation.
Initiative based on “Relation-based approach”
Offer advanced consultancy by a newly establishedprivate banking teamWealthy Customers

Transfer know how obtained by the teamIn all regions

Enhance sales promotion of asset under custody➢Increase transactions with senior generation※➢Increase asset under custody through Core-satellite strategy※The strategy is a way of recommendation to incorporate stably managedfunds(cores) and actively managed funds(satellites) into customers'
portfolios in consideration of their life stages and risk tolerances.

➢Strengthen insurance sales through consulting➢Enhance sales of foreign currency deposits

Strengthen inheritance related business
Saitama area

Increase of population ages 65+

Strong customer base inTochigi Prefecture
Vicinity to growth
areas

Know how and customer base of sales of asset
under custody

Middle Class Customers

Develop asset-under-custody business into Saitama area
➢Approach to wealthy individuals such as corporate owners andapartment owners
6２－２

Individual Customer Strategy
Initiative Based on “Function-based Approach”

 Increase the number of customers and amount of transactions, by seeking to improvefamiliarity and convenience for customers.
 Focus on unsecured loans for which there are strong customers’ needs.
Initiative based on “Function-based approach”
Products

Efficient sales promotions

Function

DepositAccount opening app

Familiarity

Investment
product
Credit card
Housing loan

Internet banking
Call centerConvenience

Increase innumber ofcustomers

Internet branchCross sales

Usability

EBM
Unsecuredloan

OutcomeMass advertising

Increase inamount oftransactions

Stimulation ofpotential needs

Enhancement of “Function-based approach”
 Seek to improve the usability
・Product revision ・Enhance non face-to-face sales
 Meet diversifying customers’ needs by expansion of theproduct lineup Reduce contract documents and visit frequency required.

7

２－３

Individual Customer Strategy
Important Indicators

 Important indicators concerning “Relationship-based approach” and “Function-basedapproach” are shown below.
Investment trust balance（¥bn）

Balance of housing loans（¥ bn）

Number of investment
trust holders

100k

Balance of unsecured loans（¥ bn）

Number of inheritance relatedtransactions per annual ※300
※Inheritance related transaction =Testamentary trust, Testamentary execution
and Inheritance procedure support8

３－１ Corporate Customer Strategy
 Improve profitability through power shift to consulting services based on business natureevaluation.
Importantindicators➢Loans to corporate customers（exc. Tokyo branch and prefectural
office branch/Average balance) ¥1,460bn➢Corporate customer related fees ¥1,800mRelationship-based approach➢Support business growth of corecustomers➢Enhance business succession planningand M&A support➢Enhance relationship with middle riskcustomers➢Cultivate growth industries➢Expand fee business➢Launch leasing business・Enhance business nature evaluation
method・Capture inheritance-related needs
・Business support through improvement ofcustomers’ financial conditions andcorporate revitalization advisory
・Medical treatment and nursing,
Healthcare, Aerospace , etc.
・Expand scope of business matching

Shift of personnel

Function-based approach➢Launch small loan products ➢Improve efficiency of sales promotion

9３－２ Enhancement of Business Nature Evaluation Method
 Share management challenges with customers through business nature evaluation.
 Support customers’ business growth and management improvement, by solving theshared challenges.
Customers

Branches
Two-way
communication

Introduction
2nd startup

Understand customers’ current
situations and consider what type ofconsulting they need to tackle theirbusiness challenges by customer

CreateGrowth

DeclineMaturity

Business nature evaluation sheet

Financial intermediaryfunctions in line withcustomers’ life event

Business deal guidelines

Share
Headquarters/Management

Enhancement of business nature evaluation method➢ Active communication with customers ➢Support for human recourses➢ Utilize external expert institutions※An aim of business nature evaluation is to appropriately evaluate borrowers’ business potentials without
excessively relying on financial data, collateral and guarantees.

10

４ Regional Economic Revitalization Strategy
 In order to grow along with the region, revitalize regional economy through developing
connector-hub enterprises and increasing number of establishment in the region.
Local governments’ “Comprehensive strategy for overcoming population decline
and revitalization local economies”➢Attraction and retention of enterprises➢Sixth industrialization support ➢Vitalization of tourist resorts

Revitalize regional economies“Regional Revitalization” in corporation with local governments

Increase number of establishments andemployees

Development of connector-hub enterprises through businessnature evaluation➢Support for startups and second startups➢Sales channel development（Business matching）➢Business succession planning/M&A support➢Corporate revitalization advisory➢Cultivation of growth industries（Medical treatment andnursing, Healthcare, Aerospace and so on）➢Globalizing support（Cooperation with JETRO）

Enhance customers’
corporate value

cooperate

Support for development of social infrastructure➢PFI support for local businesses ➢Financing for redevelopment projects
11５ Securities Strategy
 Achieve stable and sustainable profitability by expanding securities portfolio through taking
appropriate levels of risk.
ImportantindicatorInterests and dividends on securities ¥18bn

Investment strategy
 Pursue diversified Investment
Construct a portfolio that is less subject to market fluctuation through diversified
investment
 Improve investment yield under the low interest rate environment
Secure sources of stable earnings by purchasing foreign bonds, alternative
investment trusts, and so on
 Diversify risk-taking activities※
Diversify sources of gains through purchases of yield-curve-strategy fund , etc.
※An yield curve strategy is an investment strategy to earn excess returns on portfolios by anticipating yield
curve movements.

Funding strategy
 Stabilize foreign currency funding※

Diversify foreign currency funding through currency basis swaps※A currency basis swap is an agreement between two institutions to exchange principal and/or interest
payment denominated in two different currencies.

12６－１ Strategy to Enhance Management Functions
 Implement measures below to build a competitive advantage in the focused business areas.
Develop human resources Cultivate consulting staff
 Enhance young employees’
fundamental skills
 Cultivate management staff
 Revitalize the organization
Improve function of channels andoutlets
 Enhancement of customer contacts
through Omni-channelization
・Enhancement of non face-to-face sales
・Internet branch・Open a branch in a growth area

Advance profit management
 Enhance profitability management
・Improve profitability of each transaction
by utilizing target RAROA・Specify highly profitable segments

Improve productivity
 Enhance low-cost businessprocessing through improvement ofadministrative workflow
 Improve productivity of sales
promotion staff
Enhance marketing functions
 Offer appropriate services in linewith customers’ life events・Enhance hypothesis-testing sales
promotion approach・Utilize of event-based-marketing

Sophisticate credit management
 Restrain number of defaults
・Sophisticate early warning system fordefaults
・Enhance credit exposure management
by industries13６－２ Human Resource Development
 Cultivate human resources and revitalize the organization, in order to maximize the effect of
the strategies.

Cultivate consulting-related staff
 Cultivate financial
planning staff

Enhance young employees’
fundamental skills

 Develop problem solving
skills Cultivate next generation
consulting staff• Establish financial planningtrainer positions• Develop business natureevaluation capability• Expand training programs foremployees hired last year

• Company-wide sharing ofknow-how obtained by theprivate banking team

• Develop skills for businesssuccession planning and M&A
supportSupport for obtaining
qualifications（CFP , etc.）

Cultivate management-minded staff
 Enhance management skills for strategicplanning and implementation of the strategies• Improve judgment in decision making through “Nextgeneration leaders program”• Develop management skills through training programs

Revitalize organization• Clarify personnel requirements and careerpath• Develop work systems to support
diversified life style• Actively promote women to managerial
positions14

６－３ Improvement of Productivity
 Review business processing in order to improve productivity of administrative staff.
 Improve productivity of sales promotion staff in order to carve out consulting time.

Enhance low-cost businessprocessing

Improve productivity of sales
promotion staff

 Continue business process reengineering
・Utilize paperless work flow system
・Expand centralization of paper work・Improve document storage system

 Corporate loan promotion staff（Increase the amount of activity by 10%）

 Reduce cost of clerical processing
・Expand general employees and part-time
employees’ scope of work Asset under custody promotion staff（Increase consulting time by 10%)

 Review branch management structure Centralize debt collection operation toheadquarters
・Establish a debt collection team・Clarify rolls ・Utilize mobile devices
・Enhance behavioral management

・Review administrative work flow andcustomer coverage
・Utilize internet banking
 Housing loan promotion staff（Increase amount of housing loans made percapita by 10%)・Enhance non face-to-face sales
・Reduce time to contract by utilizing internetbanking , etc.
15