Value Creation Processes

Value Creation Story

Top Message

Sustainability Promotion

Business Strategy

Corporate GovernanceBank Data

Financial Section

The 77 Bank Group aims to be a leading company that works to achieve prosperity in the local community, bycontinuing to offer the optimal solutions, which inspire and build trust, and at the same time working with ourstakeholders to tap new areas of opportunity in Miyagi and Tohoku.

Social issues
Market contraction
Aging society with low birthrate
Falling population
Concentration in Tokyo
Lack of corporate successors

Social diversification
Lifestyle changes
Digital transformation
Ongoing financial easing
More regulatory easing

Response to disasters, etc.
Disasters, COVID-19
Climate change

Source of value creation

Business activities ~The 77 Bank Group direction~

Value created together with stakeholders
Localcommunities

Financial capital◆Capital adequacy ratio (domestic standards, consolidated): 10.27%◆Ratings: JCR: AA, R&I: A, Moody’s: A3 (as of July 31, 2022)◆Deposits and certificates of deposits: ¥8.8 trillion (ninth among regional banks)

Create abundantlocal communities…See p28,29,48

Leading company creating a path to the futureIntellectual capital◆Group companies: 7 companies(77 Lease, 77 Shin-Yo Hosyo, 77 Card, 77 Securities, 77 Researchand Consulting, 77 Partners, 77 Capital)◆MEJAR system(Shared with Bank of Yokohama, Hokuriku Bank, Hokkaido Bank,and Higashi-Nippon Bank)◆Consulting system◆Know-how gained through reconstruction from the Great East
Japan Earthquake‥‥‥See p8
Four basic strategies

01

Corporations
Enhance
corporate value…See p28,37

Top customer satisfaction strategy
Inspire through consulting and digital technologies!

Individuals

Human capital◆Number of employees (consolidated): 2,754◆Number of employees with qualifications: 177 1st grade Certified Financial
Planner, CFP, 32 Small and Medium enterprise Management Consultants, 2In-house attorneys, 1 In-house certified public accountant

02

Double productivity strategy

Enhancehappiness…See p28,37

Reform channels and release from the burden of administrative work!

Social capital◆Regional customer baseLoans and bills discounted share in Miyagi Prefecture: 44.1%
Deposit share in Miyagi Prefecture: 57.9%◆Number of comprehensive cooperation agreements signed with
regional public bodies for regional revitalization: 38(Miyagi Prefecture and 35 municipalities in the prefecture, as well as 2 municipalities in Fukushima Prefecture)◆Management Philosophy that inherits the spirit of Eiichi Shibusawa’s“harmony of morality and the economy”◆Regional and overseas networks
Number of branches: 143; Representative office in preparation for opening: 1;
Corporate sales offices: 1; Overseas representative offices: 2 (as of July 31,2022)

03

Regional growth strategy

04

Corporate culture reform strategy

Achieve sustainable growth in the local community!

Virtuous circle of ambition, confidence, and cheerfulness!

* As of March 31, 2022, for those without a date

Shareholders
Offer growth andreturns together
with the 77 BankGroup…See p44,56

Employees
Offer work styles
based on diversevalues…See p32,52

Corporate governanceStrong corporate governance structure‥‥‥See p34,58

6

THE 77 BANK INTEGRATED REPORT

7

“Vision 2030”

Value Creation Story

Top Message

Sustainability Promotion

Business Strategy

Corporate GovernanceBank Data

Financial Section■ Our target form

■ 77 Bank Group direction

A future based on the premise of maintaining the status quo will fall into a “contracting equilibrium.” The newWe will become the 77 Bank Group that is different from a mere extension of the status quo by focusing on “our target

management plan was guided by the question: What is our vision for the 77 Bank Group to continue to fulfill its

form,” enhancing our strengths, improving our weaknesses, and revitalizing our organization.

mission?

New management plan

Leading company creating a path to the future

The 77 Bank Group aims to be a leading company thatworks to achieve prosperity in the local community, bycontinuing to offer the optimal solutions, which inspireand build trust, and at the same time working with ourstakeholders to tap new areas of opportunity in Miyagiand Tohoku.

“Our target form”
to aim forover the long term

77 Bank Group strengths

77 Bank Group weaknesses

Revitalization points◦Customer base

◦Profitability (low-profitability structure)◦Appetite for new challenges◦Consulting system◦Cost consciousness (high-cost structure)◦Speed and flexibility◦‌Trust from customers and local community◦Competitiveness with other companies◦Cross-organization (vertical, horizontal, diagonal)

Enhance!

Improve!

Establish!

Stimulate demand amongcustomers and local communities
Expand the scope of operations

Dramatic improvements inproductivity

Establish an ambitious
corporate culture

Key factors in “Vision 2030”
Key factors◆ ‌Create the highest level of financial functions and consulting, while also expanding thescope of our businesses in the non-financial sector

Financial

Consulting

Non-financial

Optimal solutions

An engine (key factors) will be necessary to go beyond
our existing trajectory, and unlock a new future.

networks that combine the potential of Miyagi and the Sendai area with influential◆ Create‌customers in the Tohoku region as a whole and elsewhere

Miyagi and Sendai area

Whole Tohoku region, etc.

Expand scope of operations

Digitaltransformation

New businesses
and sectors

Humanresources

Financialfoundations

capabilities as a leading company (a collection of people with the same aspiration,◆ Deepen‌and a group of companies that act as leaders for local communities)

Leading bank

8Vision 2030

Leading company

THE 77 BANK INTEGRATED REPORT9Value Creation Story

Top Message

Sustainability Promotion

Business Strategy

Corporate GovernanceBank Data

Financial Section■ Basic strategies to achieve “our target form”“Vision 2030” shows the directions to pursue for the sustainable growth of local communities and the 77 Bank Group, based on the purposes of our SDG Declaration such as the revitalization of the regional economy and the promotion of active participation of allpeople.

01

Top customer satisfaction strategy Inspire through consulting and digital technologies!
■ KPI Let's Try!

The 77 BankGroup direction
Stimulate demand amongcustomers and local communities
Expand the scope of operations

02

Establish an ambitious
corporate culture

10

Increase the number of corporate
lending clients outside Miyagi
Prefecture by 1.5 times

Establish 10 projects in new businesses or sectors
with promise for future commercialization (byFY2024)

Raise proportion of households“holding assets” in Miyagi Prefecture
above the national average

To double the net income of Group companies byentering new businesses and sectors and expanding
existing businesses

Double productivity strategy Reform channels and release from the burden of administrative work!
Double labor productivity in core
operations

Triple rate to usage of non-face-to-face channels

Cut amount of administrative work atbank branches by 50%

03

Regional growth strategy Achieve sustainable growth in the local community!
■ KPI Let's Try!

■ Strengthen financial foundations (key factor)
FY2022

Our target formfor FY2031

JPY 22.2 bn

JPY 28.0 bn

Capital adequacy ratio (consolidated)

10.27%

Over 10%

Core OHR

58.22%

50-60%Net income (consolidated)

Ensure that 20% of the population of Miyagi
Prefecture (aged 20 to 74) use loans from the Bank

■ KPI Let's Try!

Madeconcrete inour strategies

Dramatic improvements inproductivity

Increase the proportion of companies
in Miyagi Prefecture for whom we aretheir main bank by 10%04

To support increased economic
growth rate in Miyagi Prefecture

Aim for 100% participation in regional development projects
in Miyagi Prefecture, such as “Sendai Urban Restructuring
Project” and “Next-generation synchrotron radiation facility.

To triple the number of growth
support cases for business founders

To cut 77 Bank Group CO2 emissions by 46%
compared with FY2014 and support cuts togreenhouse gas emissions in Miyagi Prefecture

Corporate culture reform strategy Virtuous circle of ambition, confidence, and cheerfulness!
■ KPI Let's Try!
To implement various initiatives to‘foster an ambitious spirit’

Increase the number of ‘specialist personnel’ thatserve a purpose for customers and local communities

To increase the proportion of womenin management positions to 30% ormore

THE 77 BANK INTEGRATED REPORT11