Message from the President

MissionWe will look beyond any difficulties toward
hope and set forth a new future for the region,

Visionas we embark on continuous initiatives.
President

Va l u e

Hidefumi Kobayashi

Strategy
Company
Information
Financial
SectionTen years since the Great East Japan Earthquake
The Great East Japan Earthquake occurred at 14:46 on Friday,
March 11, 2011, with a magnitude of 9.0, the highest everrecorded in Japan. As a tsunami struck that far exceeded all
forecasts, Japan suffered unprecedented damage centered oncoastal areas such as Miyagi, Iwate, and Fukushima, and over
18,400 people lost their lives. It is estimated that the total
damage to homes, factories, and other buildings, as well as
roads and other infrastructure, amounted to approximately ¥17
trillion, of which the amount of damage in Miyagi Prefecture
exceeded ¥9 trillion.
Many of the Bank’s branches were affected in the disaster,
and we suffered both physical damage and harm to ourpersonnel. Many of our employees, part-time employees, theirfamilies, and others were affected by the disaster, and it was avery difficult, painful time for us.
Despite those circumstances, however, as a regional
financial institution in the affected area, we came together as anorganization to keep providing financial services and restore ourbranch network, in order to contribute to recovery in our local
area of Miyagi, as well as the Tohoku region as a whole. We also
focused all our efforts on supporting applications for subsidies
and business rehabilitation support as a means of supporting

08

recovery. As a result, as of the end of March 2021, we hadprovided 27,209 loans related to the Great East Japan
Earthquake, worth a total amount of ¥763.2 billion.
During this period, total public investment in Miyagi
Prefecture amounted to over ¥6.5 trillion, and housing
investment created more than 200,000 homes. Almost all social
capital was recovered, including railroads, roads, bridges, andriver and port facilities, while all roads on the Sanriku
Expressway, a reconstruction road, reopened throughout theprefecture. Additionally, new towns gradually opened as centersof life and human activity, with residential areas, commercial
areas, etc.
Nominal Gross Prefectural Product bottomed at ¥7.7 trillion
immediately after the disaster, but mounted a strong recovery,
driven by economic activity related to recovery from the disasterand the redevelopment of Sendai, as well as the start ofoperations at Toyota Motor East Japan, Inc. and Tokyo ElectronLtd. plants, these two companies having decided to enter theregion prior to the disaster. As such, in FY2016, the prefecture
once again recorded its highest ever Nominal Gross Prefectural
Product, at over ¥9 trillion.
Additionally, recovery work focused not just on the “hard”
aspects, but also extended to initiatives targeting the “soft”
aspects, in anticipation of the role of the next generation,

including establishing a new medical school for the first time in
37 years in Japan in order to develop personnel to support thehealthcare system of the region, the first privatization of anationally managed airport, and the “Sendai Framework for
Disaster Risk Reduction,” which was created at the Third United
Nations World Conference on Disaster Risk Reduction.
There remain differences between regions and industries, but
I believe it is fair to say that we have demonstrated strong
resilience in our efforts toward recovery, and are continuing to
make steady progress from the damage suffered by thisearthquake of never-before-seen scale.

Picturing a new tomorrow for the region
While making steady progress toward recovery following theGreat East Japan Earthquake, we were once again faced with
“unprecedented” circumstances. COVID-19, the first major
pandemic faced by the global economy in the post-war era, has
restricted accumulation and movement, two basic premises of
the global economy, and has caused demand for face-to-faceservices such as tourism and entertainment to evaporate.
Additionally, the pandemic has not only struck a major blow toeconomies; it has also highlighted various weaknesses that had
previously been the subject of concern, such as the risk ofconcentration in major urban areas and delays to digitalization in
the public and private sectors.
I believe that we must take a determined stance and tackle
multiple issues from a long-term perspective, including issues
that we have delayed responding to, such as the falling
population, super-aging society, decline of regional industry, andoutflow of young people, as well as the acceleration ofdigitalization, etc., and issues related to the economy after
recovery from the disaster, the nature of society, and new waysof life after COVID-19 recedes.
As we look to solve these issues, we will work to ensure we
continue to fulfill our mission as a regional financial institution,
under our management philosophy of “desiring communal
prosperity and serving local communities.” In order to achieve
this aim, we have formulated the ‘“Vision 2030” ~Leading
Company Creating a Path to the Future~,” our new management
plan covering a period of 10 years, from FY2022 to FY2031.
In “Vision 2030,” we aim to offer our customers the optimal
solutions by enhancing our financial services and expanding thescope of our businesses in the non-financial sector, while at thesame time deepening our capabilities as a “leading company,”
based on being a corporate group leading the region by creating
networks centered on the Miyagi and Sendai areas andexpanding the scope of our operations.

THE 77 BANK INTEGRATED REPORT| 09

― Results and issues of the previous medium-term management plan ―― Objectives and background to the formulation of Vision 2030 ―Mission3,027.2

3,000.0

2,868.50.52,600.0

FY2018FY2019FY2020

FY2021

Status of achievement of key earnings targets(Billions of yen, %)

Item

10

Midterm target

1.3

Mission

1.5

1.0

2,796.02,800.0

FY2021 results

FY2021 MTP targets

Difference

Net income[consolidated]

16.5

19.0

(2.5)

Interest on loans andbills discounted

41.6

45.0

(3.4)

Fees and commissions

9.8

11.5

(1.7)

ROE [consolidated]

3.4

3.7

(0.3)

0

VisionVision 2030
(10-year period)

0.6

FY2018FY2019FY2020FY2018FY2019FY2021(Billions of yen)

FY2020

FY2021(0.6)
Negative for eight
consecutive years(3.6)

Vision
Value

(2.5)

(5.0)

Bank Creed(Ultimate goal)

Income from customer services
0

Mission(Billions of yen)

2.0

2.0
1.5

Midterm target

Vision 2030 Positioning

Financial
Section3,151.9

Company
Information

3,200.0

Fees and commissions from corporate clients

So, we decided to think about our path to achieving futuretargets in terms of a “backcasting approach,” starting from what
we want to achieve and what we want to become in 10 years’
time, under given assumptions and restrictions.
“SDGs” are an example of a “backcasting approach” that iseasy to understand. The “SDGs” attempt to change companies’
actions based on targets, with 17 Goals and 169 Targets having
been established in order to make the economy, society, and theenvironment sustainable, based on the approach that “there canbe no sustainable future without change.”“Vision 2030” sets forth our ideal image for the future of the 77
Bank Group and provides guiding principles and ultimate targets
for all officers and employees of the Group to come together andwork toward, as we look to achieve the management philosophyof the Bank. While fulfilling our mission as a regional financial
institution and meeting the expectations of stakeholders, I intend
for us not to accept a state of contracting equilibrium, but insteadto aim for further advancement and growth, and to fulfill an evengreater mission from a long-term 10-year perspective.

Strategy

Balance of corporate loans (term-end)(Billions of yen)

Given the risk of falling into a contracting equilibrium if we baseour strategy on maintaining the status quo, when we started
formulating our new medium-term management plan, “Vision
2030,” we asked ourselves, “what does the 77 Bank Group want
to become in future?” and “what should we do?” to meetstakeholders’ expectations at the same time as fulfilling our
mission, while never forgetting issues such as the shrinking of
our market as a result of the aging society and low birthrate, as
well as the falling population faced by the region.
“Vision 2030” is the Bank’s first management plan to cover along-term period of “10 years.” First, I would like to explain the
background for this decision.
Previously, the Bank has formulated medium-term management
plans based on a period of “three years.” However, considering theuncertain outlook and rapid changes affecting the current
management environment, a three-year plan would only meansetting “targets and measures that we can probably achieve” byprojecting out along our current trajectory. As such, it would not
result in any significant reforms, and would consist only of
conservatively estimated numerical targets. I felt this would prevent
our growth as a company, result in unsatisfactory businessdevelopment, and mean that we failed to adapt to major changes insociety at large.

Va l u e

I will now review the results and issues of the previous mediumterm management plan.
With regard to our foremost key strategy of the previous
medium-term management plan, “strengthen consulting-based
sales capabilities,” we enhanced awareness of this strategy within
the Bank and focused our efforts on supporting the resolution ofissues faced by customers based on business evaluations as wellas comprehensive transactions with customers. As a result, weachieved our targets both for the balance of corporate loans andfees and commissions from corporate clients.
The various different proposals that we made were often
praised by customers, and we also strengthened cooperation
within the 77 Bank Group, including the establishment of 77
Research and Consulting Co., Ltd. in July 2018. Based on thesefactors, I feel that we made significant progress as a group.
Additionally, in terms of our “initiatives to promote regional
revitalization,” we focused our efforts on supporting recovery
from the Great East Japan Earthquake and typhoon damage,while also making significant progress in terms of cooperation
between the public and private sectors, including witnessing
increased activity related to the “Miyagi wide-area PPP platform,”
started by the conclusion of “Comprehensive Cooperation
Agreements for Regional Revitalization” with all municipalities in
Miyagi Prefecture in March of this year.
In terms of “initiatives to enhance productivity,” an issue facedby the Bank, we launched measures to fundamentally reduce
administrative work at branch offices, including establishing the“Paperwork-free Promotion Committee” in March 2020, andestablishing a support office to concentrate back-officeadministrative work from branch offices at headquarters. As aresult of these measures, we successfully saved labor equivalent
to 107 employees per year. In terms of our initiatives targeting
digitalization, we have moved to paperless meeting materials via
the utilization of tablets, and online meetings have also become
established within the Group.
In addition to the above, I believe the Group has made progress
as a whole toward responding to changes in the times andreforming corporate culture, including utilizing Shichishika-kun andother characters, relaxing rules on employee clothing during
working hours, formulating the “77 Bank Group SDG Declaration,”and strengthening measures to prevent money laundering and thefinancing of terrorism, as well as stimulating debate by increasing
the number of Outside Directors, from a governance perspective.
Although we achieved results such as those described, we
also failed to achieve most of our earnings targets, partly owing
to ongoing negative interest rate policies and changes in theoperating environment as a result of COVID-19. As such, wewere regrettably unable to overcome the issue of our “high costand low profit structure.”
We are still only partway to achieving our goals in relation to
consulting in order to differentiate the 77 Bank Group fromcompetitors, including other financial institutions and companies
in other industries, digitalization as a means of fundamental
transformation, and paperwork-free initiatives, etc.

VisionWe accommodated a wide range of customer
needs, but were unable to overcome our “highcost and low profit structure”(3.3)

Strategy

Leading company creating a path to the future

Value

77 Bank Group SDG Declaration

Strategy

Short-term Management Plan

(Values shared across the Group)(Tactics)~More than ever, and forever, with our region~(4.9)

THE 77 BANK INTEGRATED REPORT| 11

The 77 Bank Group’s “Target Form”
MissionTapping new areas of opportunity in Miyagi and
TohokuCompany
Information
Financial
SectionCapitalizing on the digital transformation

Strategy

In “Vision 2030,” we have set forth three directions and four key
factors for the “77 Bank Group” to pursue in order to achieve ourtarget form for the Group.
The first direction is “stimulate demand among customers
and local communities, and expand the scope of our operations.”
This refers to efforts to further expand our business sectors whilesufficiently utilizing our “customer base,” one of the strengths of
the 77 Bank Group.
The second direction is “dramatically improve productivity.”This refers to efforts to make fundamental improvements to our“high cost and low profit structure,” a major issue for the Bank,
enabling us to prevail over other banks and companies.

Va l u e

Three directions and four key factors~Enhancing our strengths, improving ourweaknesses, and revitalizing our organization~

The first such key factor is the “digital transformation.”As the digital transformation makes dramatic leaps forward in
future, there can be no doubt that the content of services,
systems for working, and peoples’ workstyles will all change.
Amid these conditions, while placing the utmost priority on“safety and peace of mind,” we will also capitalize on theadvancing digital transformation, which accelerated as a result of
COVID-19, and work with companies in other industries to
respond to customers’ increasingly diversified needs, in addition
to promoting fundamental reforms across our banking operations
as a whole.
Specifically, in anticipation of dramatic advances in digitaltechnologies over the next 10 years, we will focus on “creating
new businesses” and promoting digital reforms, in line with“digital reforms in the banking business” as a whole.
In terms of “digital reforms in the banking business,” ourinitiatives will be based around five pillars of reform, namely,“non-face-to-face channel reform” to change our contact points
with customers, “bank branch reform” to change face-to-facesales, “paperwork-free reform” to reduce physical transactions
and paperwork, “data utilization reform” to utilize data, and“digital reforms for employees” to maximize the capabilities of ourworkforce. At the same time, we intend to invest ¥5.0 billion toensure we achieve the “best mix of face-to-face and non-face-toface services.”
Additionally, with regard to “creating new businesses,” we will
establish new businesses to revitalize the regional economy,
including offering new banking services and a new regional
ecosystem centered on the “digital native” generation.

VisionIn “Vision 2030,” we set forth “our target form” for the 77 Bank
Group to aim for over the long-term as, “a leading company thatworks to achieve prosperity in the local community, by continuing
to offer the optimal solutions, which inspire and build trust, and at
the same time working with our stakeholders to tap new areas ofopportunity in Miyagi and Tohoku.”
This is our declaration as the 77 Bank Group that: “we want
to serve a greater purpose for our customers, and increase ourcustomers,” “we want people to feel confident when using the 77
Bank Group,” and “we want to act as a corporate group that
leads business and the economy and thus enriches the region,even as uncertainty lingers regarding the future of the region.”
While further enhancing our “finance and consulting”
services, as we have been for several years, we also intend to
expand the scope of our businesses in the non-financial sector
and offer our customers the optimal solutions. Additionally, evenas the regional market is expected to shrink, we intend to build
networks that combine the potential of the Miyagi and Sendai
area with influential customers in the Tohoku region as a wholeand elsewhere, and thereby tap new areas of opportunity. In
doing so, while expanding the scope of our businesses, we willtake steps to enhance our customer base, starting from “digitaltechnologies and people” rather than bank branches. At thesame time, we intend to deepen our capabilities as a “leading
company,” namely, moving from being a “leading bank” to beinga “corporate group leading groups and local communities withthe same aspirations.”

The third direction is “establish a corporate culture of taking
on new challenges.” This refers to thinking about things from thecustomer’s perspective, even more than we have done
previously, and aiming to become an lively organization filled with
an appetite for new challenges, an appetite for growth, and an
ambitious spirit.
Now, I would like to introduce some specific examples of ourinitiatives to establish a corporate culture of taking on new
challenges.
In order to make “Vision 2030” a reality, it is key that every
employee thinks for themselves and acts proactively. In order tocommunicate this concept from the senior management of the
Bank to the employees, we are holding briefings aimed at therealization of “Vision 2030” where the President, Senior
Managing Director, and Managing Directors visit all bankbranches, as well as lively and open exchanges of views,
including Q&A sessions. In these briefings, we reinforce theconcept that “Vision 2030” lays out the future direction to betaken by the 77 Bank Group and the essence of our long-term
strategy, while also restating the importance of every employee
thinking for themselves and acting proactively, not passively.
Additionally, we also hold an “essay contest” in order to increase
employees’ sense of ownership and promote a shift toward
independent and active behavior, through their thinking about
and expressing “the actions they should take at this time.” Assuch, I feel that this is a good opportunity to reform the mindsetof our employees, as we look to “establish a corporate culture oftaking on new challenges.”

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

“Vision 2030” outline ~77 Bank Group direction“Our target form” to aim forover the long term

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 our
stakeholders to tap new areas of opportunity in Miyagi and Tohoku.

Create the highest level of financial functions andconsulting, while also expanding the scope of ourbusinesses in the non-financial sector

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

Financial

Consulting

Miyagi and Sendai area

Non-financial

Whole Tohoku region, etc.

Optimal solutions

Expand scope of operations

Stimulate demand among customers
and local communities
Expand the scope of operations

Dramatic improvements in
productivity

Establish an ambitious
corporate culture

Enhance!

Improve!

Establish!

77 Bank Group strengths

77 Bank Group weaknesses

Revitalization points

Customer baseConsulting system
Trust from customers andlocal community

Profitability (low-profitability structure)
Cost consciousness(high-cost structure)
Competitiveness with other companies

Appetite for new challenges
Speed and flexibility
Cross-organization(vertical, horizontal, diagonal)

Key factors
Deepen capabilities as a leading company (a collectionof people with the same aspiration, and a group ofcompanies that act as leaders for local communities)

12

Leading bank

Vision 2030

Leading company

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

Digitaltransformation

New businesses
and sectors

Human
resources

Financialfoundations

THE 77 BANK INTEGRATED REPORT| 13

Mission

The fourth key factor is “strengthen financial foundations.”
As a regional financial institution, we must generate
sustainable earnings and build strong financial foundations inorder to continue to support the future of our customers and local
communities, while also growing as a company and meeting the
expectations of our shareholders.
We will target a “(consolidated) capital adequacy ratio of atover 10%,” as a level that must be firmly maintained for “soundness” to remain a strength of the 77 Bank Group; “(consolidated)
net income of ¥28.0 billion,” as the level necessary to bothmaintain a sound financial position and take adequate risk; and a“core OHR of 50-60%,” as a commitment to bolstering earnings
through improved productivity.

14

Level that should be maintained based on “soundness” as astrength of the 77 Bank GroupNet income (consolidated)

JPY 28.0 bn

Necessary level for maintaining a sound financial position andtaking on riskCore OHR

50-60%

Commitment to strengthening profits through improved productivity

Four basic strategies
Next, I would like to explain our four basic strategies. These
represent a concrete expression of the three directions mentioned
above as strategies.

~Top customer satisfaction strategy~
The first basic strategy is our “top customer satisfaction strategy.”
By offering an amazing customer experience and inspirationthat competitors cannot match, we aim to be the top bank forcustomer satisfaction. We will utilize our strengths, including ouroverseas network centered on Asia and our information networkin Miyagi and the Tohoku region, to offer services that only we
can provide as a regional financial institution, based on the
combination of face-to-face consulting services and digitaltechnologies.
We have set four strategic targets: “increase the proportion ofcompanies in Miyagi Prefecture for whom we are their main bankby 10%,” “increase the number of corporate lending clientsoutside Miyagi Prefecture by 1.5 times,” “increase the proportionof households in Miyagi Prefecture holding assets to 21% orhigher,” and “ensure that 20% of the population of Miyagi
Prefecture use loans from the 77 Bank.”
Additionally, we will also utilize the “strengths” developed by
the 77 Bank Group, in combination with the digital transformation~Corporate culture reform strategy~
The fourth basic strategy is our “corporate culture reform
strategy.”
We will endeavor to promote diversity, and create a virtuous
circle where all officers and employees take on new challenges,
leading to confidence and cheerfulness.
We will move from a “defensive” stance to an “offensive”
stance, through measures such as accommodating a diverse
range of values and fundamentally overhauling personnel andorganizational systems to increase motivation, and creating anenvironment that permits trial and error and values the act oftaking on new challenges. Additionally, we will also endeavor tostrengthen compliance and risk management, and build internal
control systems that provide firm support to reforms.
We have set forth three strategic targets: “to implement various
initiatives to ‘foster an ambitious spirit,’” “to increase the proportionof women in management positions to 30% or more,” and to“increase the number of ‘specialist personnel’ that serve a purpose
for customers and local communities.”

Financial
Section

The third key factor is to “develop human resources.”
Even as the times change and digitalization advances at anaccelerated pace, there will be no change to the fact that people
form the core of any company.
There are many tasks that must be performed by people,
including customer sales, planning, and marketing. As such, thequality and level of our employees differentiates us from ourcompetitors.
The 77 Bank Group aims to develop human resources with thefollowing qualities: “unending ambition,” “filled with ability to takeon new challenges,” “ability to act independently,” “rich humanpotential,” and a “strong sense of ethics.” Going forward, we will
utilize the qualities of each individual to develop “human resourcesthat serve a purpose for customers and local communities” and“human resources that contribute to corporate reform,” while alsoutilizing diversity to transform into a group of professionals thatacts with life and vigor, based on the idea that human resources
are the most important asset of the 77 Bank Group.
Education will be essential for us to achieve this goal. As
such, in order to further strengthen our specialist expertise, wewill actively enhance our opportunities for external training, etc.,
to enable employees to increase their knowledge andexperience, including training seminars to contribute tostrengthen consulting capabilities in both corporate and retail
operations, as well as the dispatching of employees to otherbanks and private companies for training purposes.
Furthermore, the “77 President’s School” is an initiative that weestablished in the previous fiscal year for this purpose. The school
is aimed at fostering an understanding of management among
midlevel employees in their thirties by deepening their understanding of changes in the environment surrounding the Bank, themanagement issues facing the Bank, and other factors.

Over 10%The second basic strategy is our “double productivity strategy.”
In this strategy, we will double productivity by releasing bankbranches from the burden of administrative work andstrengthening our consulting systems, and enhancing theabilities of each individual. Additionally, the reduction ofadministrative work at bank branches through paperwork cuts,
the concentration of administrative work, etc., together with ourefforts to enhance and promote the usage of non-face-to-facetransactions, will enable us to spend more time on consultingwith customers.
We have set three strategic targets: “double labor productivity
in core operations,” “cut amount of administrative work at bankbranches by 50%,” and “triple rate to usage of non-face-to-facechannels.” Through these initiatives, we will rebalance ourmanagement resources in a way tailored to the needs of ourcustomers, including enhancing our non-face-to-face channels
and optimizing our network of contact points, educating andreallocating our workforce to strengthen our consulting capabilities, and reducing the size of our workforce through natural
attrition.

The third basic strategy is our “regional growth strategy.”
In this strategy, we will work to achieve sustainable growth
together with the local community by making the region attractive
and supporting the growth of inspirational local companies. We
aim to achieve sustainable growth and ensure abundant local
communities by promoting public-private cooperation between
regional public bodies, external institutions, private companies,
and universities, while also promoting recovery and regional
revitalization.
We have set four strategic targets: “to support increased
economic growth rate in Miyagi Prefecture,” to triple the numberof growth support cases for business founders,” “to aim for 100%
participation in regional development projects in Miyagi
Prefecture,” and “to cut 77 Bank Group CO2 emissions by 46%
compared with FY2014 and support cuts to greenhouse gas
emissions in Miyagi Prefecture,” as a means of responding toissues related to climate change.

Company
Information

Develop human resources

Capital adequacy ratio (consolidated)~Double productivity strategy~~Regional growth strategy~

Strategy

Our second key factor is to “develop new businesses and sectors.”
Although we will maintain banking operations at our core, wewill utilize our customer base, one of the strengths of the 77 Bank
Group, to enter new business domains with the aim of solving theissues faced by our customers and local communities.
While closely following changes in customer needs andmoves to ease regulations surrounding business operations andbanking, we have also set forth a KPI of utilizing our Group
companies, alliances, etc., to establish 10 projects in new
businesses or sectors by FY2024 with the potential to become
viable businesses in future, as part of our efforts to cover adiverse range of business domains.
We will also hold a business planning contest in order tofoster creative capabilities unbounded by conventional ideas anda spirit of taking on new challenges among the officers andemployees of the Group as we look to establish these projects.
In order to encourage active participation in this contest, thewinners will be appointed members of a project team aimed atturning the ideas into businesses.

and our alliances, to expand the breadth of our solutions andsolve the issues faced by our customers and local communities.
As I mentioned above, we have two strategic targets: “toestablish 10 projects in new businesses or sectors by FY2024,”
and “to double the net income of Group companies by entering
new businesses and sectors and expanding existing businesses.”

Va l u eStrengthen financial foundations

VisionDevelop new businesses and sectors

Four basic strategies

The 77 Bank
Group direction
Stimulate demand amongcustomers and local communities
Expand the scope of operations
Dramatic improvements in
productivity
Establish an ambitious
corporate cultureMadeconcrete inour strategies

01

Top customer
satisfaction
strategy

Inspire throughconsulting and digitaltechnologies!

02

Doubleproductivity
strategy

Reform channels andrelease from the burdenof administrative work!

03

Regional growthstrategy

Achieve sustainablegrowth in the local
community!

04

Corporate
culture reform
strategy

Virtuous circle ofambition, confidence,and cheerfulness!

THE 77 BANK INTEGRATED REPORT| 15

─ Toward Achieving “Our Target Form” ─Mission

77 Bank Group profit increase concept

FY2021

FY2026

FY2031 (Our target form)

Loans and bills
discounted

JPY 5.7 tn

JPY16.5 bn

JPY21.0 bn

JPY28.0 bn

Deposits + NCD

JPY 8.5 tn

Capital adequacy ratio (consolidated)

10.39%

Over 10%

Over 10%

Securities

JPY 3 tn

Core OHR

62.27%

55-60%

50-60%

Group balance ofassets in custody

JPY 1 tn

FY2021

FY2026

FY2031 (Our target form)

Net income (consolidated)

2. KPI

Proportion of companies in Miyagi
Prefecture for whom we are their mainbank [main bank trends surveys*]

–
[56%]

Vs. FY2021 +5%[59%]

Vs. FY2021 +10%
[62%]

Number of corporate lending clients outside
Miyagi Prefecture

–

1.2x

1.5x

14%

17%

Over 21%

Proportion of households in Miyagi
Prefecture holding assets
Proportion of individuals in Miyagi Prefectureusing loans from the 77 Bank

17.0%

20.0%

(FY2020) JPY 1.6 bn

JPY 2.0 bn

JPY 3.0 bn

Labor productivity in core operations(*)(FY2020) JPY 8 mn

JPY 13 mn

JPY 16 mn

Administrative work at bank branches–

Vs. FY2021 (50%)

Vs. FY2021 (50%)

Usage of non-face-to-face channels(Corporate) 11%(Retail) 11%(Corporate) 20%(Retail) 20%(Corporate) 30%(Retail) 30%

CO2 emissions
Proportion of female managers

Profit increase concept

Double productivity strategy
Cut expenses withpaperwork-free policies andincreased efficiency

Reduction in profits fromchanges in businessenvironment

Net income

Interest on yendenominated bonds
and remittances

(5.0)
16.5
Creditexpenses[7.6]

FY2021

16

8.0

(4.5)

Top customer
satisfaction strategy

13.0Interest on loans and bills discounted
Fees and commissions from
corporate clients
Fees and commissions fromassets in custodyGroup companies
New businesses / new sectors

Dramatic increase in net income

Strengthen foundations through regional growth strategies andcorporate culture reform strategies

2,000

3,000

10,000t

9,069t

13.4%

18.0%

30.0%

*TEIKOKU DATABANK, Ltd. research“2014 Nationwide Consumption Trends Survey,” Statistics
Bureau of Japan (proportion of households holding shares or
equity investment trusts)*(Interest on loans and bills discounted + fees and commissions - interest
on deposits, etc. - expenses + personnel expenses + depreciation) /number of employees (part-time employees counted as 0.4)

“Rebalancing of management assets”●Enhance non-face-to-face channels and optimize
branch network in accordance with customers’ needs●Educate, redistribute, and streamline (natural attrition)
workforce in order to strengthen consulting capabilities■Establish 10 projects in new businesses or sectors (by FY2024)■Implement various initiatives to “foster an ambitious spirit”■Support increased rate of economic growth in Miyagi Prefecture■Increase the number of “specialist personnel” that serve a■Aim for 100% participation in regional development projects in Miyagi Prefecture purpose for customers and local communities

Net income(Our target form)

Financial
Section

Other items(Billions of yen)

1,181
(FY2020) 12,327t

Notes
Comprehensive assessment utilizing customer
surveys and various indicators

Company
Information

12.6%

Group companies net income

Cases of growth support for founders

Taxes, etc.

(Reference: Expected portfolio after 10 years)

Strategy

In order to implement fundamental reforms over a medium- tolong-term timeframe, we will set midterm targets to achieve infive years. At the same time, we will also formulate short-term
management plans to clarify the sectors we must focus on

In order to achieve “our target form” for FY2031, it will first be vitalthat we achieve our midterm targets for FY2026. Key points inthis regard will be the strengthening of our profitability throughour top customer satisfaction strategy and management ofprogress toward cost reductions through our double productivity
strategy. We will also bolster our efforts to achieve KPIs related
to the “proportion of companies in Miyagi Prefecture for whom
we are their main bank,” the “number of corporate lending clientsoutside Miyagi Prefecture,” etc., which are linked to financial
targets, by managing progress toward these targets in short-term
management plans.

1. Strengthen financial foundations (key factor)

Va l u e

PDCA cycle based on “our target form”

Midterm targets to achieve “our target form”

Midterm targets to achieve “our target form”
VisionIn terms of the specific figures and our concept of how profit will
increase, we are targeting consolidated net income, which was¥16.5 billion in FY2021, of ¥28.0 billion in FY2031. In this target,
we have factored in a decline in interest on yen-denominatedbonds from Japanese government bonds, etc., and fees andcommissions on remittances, together with increases in profit
from reduced expenses via paperwork-free initiatives, etc., andincreases in interest on loans and bills discounted, fees andcommissions from corporate clients, and other items.
On the other hand, we expect credit-related expenses tocontinue for 10 years at a level of ¥8.0 billion - the level of ourreserves during the COVID-19 pandemic - and this target
therefore also anticipates an increase in bad debts in future andinvestment in digitalization.
Furthermore, our “expected portfolio after 10 years” consistsof ¥5.7 trillion in loans, ¥8.5 trillion in deposits (including
certificates of deposits), ¥3 trillion in securities, and ¥1 trillion inGroup assets in custody.

depending on changes in the management environment and thestatus of progress in our various measures, and ensure that we
make progress each year. In this way, we will steadily progress
toward “our target form.” Additionally, we will commit to thisprogress by disclosing our targets for the relevant fiscal years at
corporate briefings, etc., as well as forecasts for the next fiscal
year.
Through these initiatives, we intend to ensure the flexibility of
specific initiatives while also making progress toward major
targets. In addition, we will also anticipate changes in theenvironment and revise “our 10-year target form” every five
years, as we continuously implement the PDCA cycle.

To Our Stakeholders

28.0
Capitaladequacy
ratio:
Over 10%
Core OHR:
50-60%

Creditexpenses[8.0]

FY2031

Eiichi Shibusawa has recently been the focus of significant
attention, including his image being featured on the new ¥10,000
banknote to be issued in 2024, as well as his story being taken
up in Reach Beyond the Blue Sky, the popular Taiga drama
shown on NHK. In fact, Shibusawa has a strong connection with
The 77 Bank, including providing the Bank with both tangible andintangible support at the time of our founding.
Shibusawa advocated for the “harmony of morality and theeconomy,” in which he cautioned against the monopolization of
profits and promoted the “coexistence of both profits and public
interests” through the return of profits to society. Indeed, thisphilosophy has taken root in the hearts of all the Bank’s officers
and employees, and is reflected in one line of the Bank’s “Creed,”
our management philosophy, which states “the Bank’s progressgoes hand in hand with prosperity in the local community.” It issaid that Shibusawa’s spirit of coexistence should serve as areference for corporate managers, and is also reflected in thephilosophy of the SDGs (Sustainable Development Goals).

Against this background, as part of our objective ofcontributing to the sustainable growth of regional society, we
announced the “77 Bank Group SDG Declaration” in July 2020,
as well as our “Lending Policy” for businesses that pose a risk ofnegative impact to the environment and society.
Additionally, we have positioned our response to climatechange, which poses a significant risk to the sustainability ofsociety, as an important management strategy issue. As such, in
July 2021, we expressed our support for the recommendations of
the “Task Force on Climate-related Financial Disclosures(TCFD)” and have been developing related systems.
The 77 Bank Group aims to ensure the prosperity of local
communities by inspiring and accumulating trust with the optimal
solutions, and becoming a leading company tapping new areasof opportunity in Miyagi and Tohoku. In doing so, we will fulfill the
expectations of our stakeholders, including customers, local
communities, employees, and shareholders, and I therefore
would like to ask for your continued support.

THE 77 BANK INTEGRATED REPORT| 17

VisionVision 2030 (10-year period)

MissionVisionStrategy

Response to the COVID-19 pandemic

Value

77 Bank Group SDG Declaration

Strategy

Short-term Management Plan

(Values shared across the Group)(Tactics)~More than ever, and forever, with our region~~More than ever, and forever, with our region.~
The 77 Bank Group, in keeping with the philosophy of the Bank Creed passed down from ourfounders—“The Bank’s progress goes hand in hand with prosperity in the local community”—aims
to contribute to the future of the region and the realization of a sustainable society by working toward
the achievement of the Sustainable Development Goals (SDGs) on a Group-wide basis.

1. Revitalization of the regional economy

activities of our employees

We are creating an organization where each and every
employee and officer can engage in a diverse range of activities.

2. Responding to global warming and climate

4. Advancing corporate governancechangeThrough our responses to climate change, we will contribute to
the protection of Earth from destruction and contribute to urban
development that is more in harmony with nature.

18

3. Encouraging and supporting the

We aim to contribute to the realization of a sustainable society
through consulting with, and building partnerships with, local
governments and corporate and individual customers.

We will collaborate appropriately with our stakeholders tostrengthen and enhance corporate governance.

Activities of the COVID-19
Emergency Support Team

Financial
Section

77 Bank Group SDG Declaration

In order to respond quickly to management consultations from
customers affected by the spread of COVID-19, in March 2020 weestablished a “COVID-19 Emergency Support Team” consisting of
employees responsible for sales and credit supervision fromheadquarters with expert knowledge, experience, and experience, andhave since been consulted about various different topics.
Going forward, the Bank will continue to provide finely tuned
support aimed at solving the issues faced by regional customers
through the smooth provision of funds and consulting services.

Company
Information

Value(Ultimate goal)

Strategy

Bank Creed

For five days, between January 28 and February 3, 2021, we held thesecond “77 Regional Revitalization Business Matching Event.”
The purpose of this event is to promote collaboration between
regional public bodies and private companies as a means of finding
solutions to the challenges faced by regional public bodies. Thisinitiative has attracted significant attention from around Japan,
including receiving an award from the Minister in charge of Regional
Revitalization in FY2020 as a “unique initiative” by a financial
institution, etc. that contributes to regional revitalization.
Looking ahead, the Bank will continue to cooperate with regional
public bodies as we actively promote initiatives aimed at improving
community value.

Va l u e

MissionSecond “77 Regional Revitalization Business Matching Event”

VisionWe will work to achieve a sustainable society, even as we directly face issues that may affect the regional economy,
including social issues such as the falling population and environmental issues, as well as the spread of COVID-19.
As part of our efforts to achieve this goal, we announced the “77 Bank Group SDG Declaration” in July 2020, basedon our support for the purpose of the “SDGs (Sustainable Development Goals,” as they are in line with thephilosophy of our Bank Creed of “desiring communal prosperity and serving local communities,” which has been in
our DNA since our founding. With the SDG Declaration as “values shared across the Group,” the 77 Bank Group iscommitted to moving forward with our region, growing with our region, and creating the future with our region.

The Bank aims to contribute to the realization of a sustainable society through consulting with, and building partnerships
with, regional public bodies and corporate and individual customers.

Mission

77 Bank Group SDG Declaration| 1 | Revitalization of the Regional Economy●Consulting Promotion Division employees were stationed at core branches in
Miyagi Prefecture and supported clients●Credit Supervision Division employees visited each branch for credit supervision●COVID-19 related loan performance

7,510 cases /JPY 368.8 billion●Status of loans with effectively nil interest rate,

5,137 cases /JPY 104.6 billion(including changes in loan conditions)involving no collateral (in Miyagi Prefecture)●Consultations concerning matters other thanloans related to COVID-19, by the COVID-19
Emergency Support Team8,348 cases

Business matching: 1,515 cases, Business succession and M&A: 1,065 cases, Asset management:
787 cases, Real estate: 502 cases, Subsidies: 378 cases, Privately placed corporate bonds: 164cases, Funds: 75 cases, Various lending consultations, etc.: 2,668 cases, Other: 1,194 cases* The data above is as of March 31, 2021

THE 77 BANK INTEGRATED REPORT| 19

| 2 | Responding to Global Warming and Climate Change
MissionVisionTaking into consideration the fact that climate change has become an issue shared by the whole global community, including
unusual global weather phenomena and increasing damage from natural disasters, the Bank announced its support for therecommendations of the TCFD* in July 2021. In order to contribute to the protection of Earth from destruction and contributeto urban development that is more in harmony with nature, the Bank will actively implement initiatives that target issues suchas climate change.
Our responses to four items proposed in the TCFD recommendations are described below.
*TCFD（Task Force on Climate-related Financial Disclosures）
A taskforce established in December 2015 by the Financial Stability Board (FSB) and led by private-sector companies with the aim of promoting the disclosure of climate-related financial information by companies

Lending policies for specific businesses

Response to TCFD recommendations
Details of response

GovernanceIn future, we will consider measures such as the establishment of a committee to actively deliberate a
response to issues related to climate change, etc.

Indicatorsand targets

Based on the “Environmental Policy” that we established in 2012, we are promoting activities aimed at conserving theenvironment, and we have set a target in our new management plant, “Vision 2030,” of reducing CO2 emissions acrossthe 77 Bank Group by 46% by FY2031 compared with FY2014. Furthermore, in FY2020, we succeeded in reducing CO2
emissions by 26.6% compared with FY2014.

20

As a general rule, we will not finance the construction of new coal-fired power plants. In the case of replacement projects,
we will consider lending only to projects that employ eco-friendly high-efficiency power generation technologies(ultra-supercritical pressure technology or technologies providing equivalent power generation performance), with final
decisions to be made carefully based on comprehensive analysis of the project’s impact on the environment, etc.

1. Prevention of human rights violations
We will not finance business operators involved in human trafficking, child labor, or forced labor, regardless of the
purpose for the loan.

2. Elimination of inhumane weapons
We will not finance business operators involved in the development and manufacturing of inhumane weapons, such as
cluster munitions, regardless of the purpose for the loan.

Environmental Policy
In 2012, the Bank established an “Environmental Policy,” and we are promoting activities aimed at conserving the environment, in orderto create a sustainable society.

Basic Principle
The 77 Bank believes that it has a social responsibility to protect the beautiful and abundant natural environment and to pass it down to the next
generation in an improved state as a good corporate citizen. Based on the mindset to “Elevate the Spirit of Voluntary Service,” which is the first itemin the Bank Creed, our basic principle of management, the Bank aims to be a company that coexists with regional society, and for this reason the Bankis actively and continuously engaged in environmental conservation activities aimed at creation of a sustainable society.

Lending to solar sharing project
In January 2021, the 77 Bank Group provided financing to a large-scale
agricultural power business (solar sharing) operated by Nihommatsu
Agricultural Solar Co., Ltd. in Nihommatsu City, Fukushima, which will
generate solar power while also operating an agricultural business.
This solar sharing business is a large-scale power generation businessthat will utilize approximately 68,000 m2 of farmland in Nihommatsu City,
Fukushima. Sunlight is shared between agricultural production and power
generation, and the business has attracted attention as a model for the
next-generation utilization of farmland.
The Bank will continue to contribute to achieving the SDGs by supporting
the introduction of power generated from renewable energy and othermeans.

2. Transition to a low-carbon society

Financial
SectionWe are aware that physical and transitional risk associated with climate change may have a major financial impact on
the 77 Bank Group in future. As such, in future, we will take steps to build risk management systems related to climatechange, within the context of an integrated risk management framework.

We will not support projects that may have a significant negative impact on the environment, such as illegal
deforestation or the development of palm oil plantations that damage biodiversity.

Company
Information

Risk
management

Societal issues■Risks and scenario analyses
We are aware of both physical and transitional risks related to climate change, and will consider such matters as
methods of scenario analysis related to climate change in future.
●In terms of physical risks, we envision credit risk caused by climate change affecting the business activities andchanging the businesses circumstances of the Bank’s clients, etc., as well as operational risks associated withdamage to bank branches, etc.
●In terms of transitional risks, we envision risks such as increased credit risk related to clients receiving financing thatare affected by the transition to a low-carbon society, such as those that must respond to stronger climate-related
regulation, etc.

1. Environmental protection
Strategy

Strategy■Opportunities
We understand that there are business opportunities in businesses and innovation that contribute to easing or adapting toclimate change, such as renewable energy, and that are necessary for the transition to the “decarbonized society” targetedby the Paris Agreement and the SDGs. Based on this understanding, we are supporting the transition to a low-carbon society
from a financial perspective through project financing related to relevant projects, arranging financing, and other means.
●Renewable energy-related funding: 354 cases / ¥162.7 billion (as of March 31, 2021)

Lending policies for specific businesses
Environmental issues

Based on the understanding that responding to sustainability issues, including climate change, is a key management
issue, we have positioned the “77 Bank Group SDG Declaration” as values shared across the Group within our new
management plan “Vision 2030.” In addition to the “77 Bank Group SDG Declaration,” which focuses on “responding to
global warming and climate change” as a priority issue, we will also actively support businesses, etc. that contribute tosolving environmental and social issues, determine “Lending Policies for Specific Businesses” based around notfinancing businesses that pose a risk of negative impact to the environment and society, and actively engage ininitiatives related to financing for renewable energy, etc.

In order to contribute to achieving a sustainable society, the Bank will actively support businesses, etc. that work to solve
environmental and social issues, and has also set forth the following Lending Policy related to businesses that pose a risk ofnegative impact to the environment and society.

Va l u e

Item

Action Guidelines
1. We will comply with laws and regulations, agreements, and other matters related to the environment to which the Bank has agreed.
2. We will promote energy conservation, resource conservation and recycling activities, and work to reduce our environmental burden.
3. We will support customers involved in environmental conservation through the provision of environmentally-friendly financial products and services.
4. We will conduct awareness raising activities to deepen the awareness of each and every officer and employee regarding the environment andpromote environmental conservation activities in regional society.

CO2 emissions from the Bank’s facilities(t-CO2)FY2014FY2015FY2016FY2017FY2018FY2019FY202016,795

15,903

15,341

13,823

13,28912,476

12,327

Concept image of completed facility (actual facility will be approximately 40 times larger)

THE 77 BANK INTEGRATED REPORT| 21

Mission| 3 | Encouraging and Supporting
the Activities of Our Employees
The Bank is committed to creating a highly productive organization where each and every officer and employee canparticipate in a diverse range of activities in a healthy state of mind and body, and with a sense of “job accomplishment”
and “fulfillment” toward their work.

VisionExternal evaluation of our efforts

Va l u e

Certified as “Health and productivity
Management Organization 2021
(White 500)”

Certified Platinum Kurumin, a special
certification pursuant to the Act on
Advancement of Measures to Support
Raising Next-Generation Children

Certified “Gold Certified Company” forsuccessfully utilizing the potential of
female talent in Miyagi Prefecture

Certified “Eruboshi (Grade 3),” commending generalbusiness proprietors for promoting female participation,
pursuant to the Act on Promotion of Women's
Participation and Advancement in the Workplace

Chosen as a constituent of MSCI Japan Empowering
Women Index, which recognizes companies withoutstanding efforts in promoting the participation andadvancement of women in the workplace*(as of June 2021)

Selected as company to receive “Commendation for a Model
Business Committed to Creating Attractive Workplace” from
Miyagi Prefecture and Miyagi Labour Bureau

Won top award in Miyagi Prefecture FY2021 awards
for “Companies Supporting Active Participation by
Men and Women and Cheerful Child-raising”

Promote health and productivity management ~A healthy body is capital~

Establish an environment where diverse human resources can demonstrate their full potential

1. Formulation of the Health and Productivity
Management Declaration

1. Strengthening initiatives to promote the active
participation of women

3. Improving the work environment
4. Raising employee awareness of healthmanagement~Rewarding working environments~

Certified as “Health and productivity Management
Organization 2021 (White 500)”
The Bank is implementing initiatives aimed at conserving and promoting the health of
employees, such as making all Bank sites completely non-smoking. On March 4,2021, the Bank was certified as a “Health and Productivity Management Organization
2021 (White 500)” for the second consecutive year, under the “Health andProductivity Management Organization Certification System” implemented by the
Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi.

2. Utilizing seniors, part-timers, etc.

3. Revision of personnel evaluation systems
4. Introduction of Business Casual Day

Company
Information

2. Strengthening health management measures

Strategy*Notes on MSCI indexes and logos, etc. THE INCLUSION OF The 77 Bank, Ltd., IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF The 77 Bank, Ltd., BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Formulation of action plan

1. Fostering an organizational culture of self-education●Period of plan: April 1, 2021 to March 31, 2026 (five years)

10

(%)
20

18.0

13.4

Financial
Section

Proportion of female managers

Develop promising human capital ~People make companies~

From the perspective of creating a working environment that enables
women to heighten their awareness of advancing in their career andtackle their work with a positive attitude, while also maximizing theabilities of each individual and enabling them to play an active role atwork, the Bank formulated the “Action Plan for General Businesses(Third),” based on the “Act on Promotion of Women’s Participation andAdvancement in the Workplace.”

8.5●Target: (1) Increase the percentage of women in management
positions to 18% or more

2. Enhancement of consulting capabilities through human resources
development programs, etc.

(2) Reduce the average number of hours worked on days off
to less than 10 hours per person per month

3. Initiatives aimed at career development support(3) Maintain an annual rate of taking paid time off of 70% or
more

4. Initiatives aimed at improving abundant personal capabilities

0Mar-11

Mar-21

Mar-26(target)Training of specialist personnel through external secondments
The 77 Bank Group utilizes the qualities of each individual to develop “human resources that serve a purpose for customers and local
communities” and “human resources that contribute to corporate reform,” which will serve as an asset for the Bank into the future.

Realize work-life balance ~From work-work to work-life~

Main organizations accepting secondments

1. Strengthen efforts aimed at
reducing total working hours

Digital technology

Japan Digital Design, Inc., MEJAR Digital Innovation Hub

2 personsInternational businessand markets

Japan External Trade Organization (UK), Bangkok Bank (Thailand), Miyagi Prefecture’s Dalian Office(China), etc.

9 persons

Solutions business field

Mizuho Bank, MUFG Bank, Development Bank of Japan, etc.

11 persons

Regional revitalization
field

Regional public bodies (Miyagi Prefecture and Sendai City) , (General Incorporated Association)Tohoku
Tourism Promotion Organization

3 persons

As of May 31, 2021

22

25 persons

2. Supporting employees tobalance work andchildcare/nursing, etc.

“Diversity Promotion Course” day-off seminar
We held a “Work Work Sukoyaka (Healthy) Club”
seminar online for employees taking time off forchildcare, etc., and a total of 32 employees took part,
including people participating as married couples. On
the day, Sayuri Takeshita, Representative Director of
Fathering Japan TOHOKU, an NPO, spoke aboutbalancing childcare, housework, and work with aview to making a smooth return to the workplace.

THE 77 BANK INTEGRATED REPORT| 23

| 4 | Advancing corporate governance
MissionVisionThe Bank endeavors to strengthen and enhance corporate governance in accordance with the following basic approach,while appropriately cooperating with stakeholders.
・In accordance with the Bank Creed, which is our basic principle of management, we will operate business that give constantconsideration to the public mission of a regional bank — contributing to the development of the regional economy andsociety — through banking operations.
・We will improve the transparency of management and the appropriateness of processes and work together appropriately
with stakeholders including the regional society, clients, and shareholders for the Bank’s sustained growth andimprovements in corporate value over the medium- to long-term.
■ Steps to enhance and strengthen governanceIntroduced
Executive Officer
system2015

2017●Established “Corporate Governance Policy”●Transitioned to a company with an audit & supervisory committee●Established “Corporate Governance Committee”

2018●Revised officer compensation plan (introduced

performance-linked compensation plan)

Audit &
Supervisory
Committee
MemberAudit &
Supervisory
Committee
MemberJun-19Audit &
Supervisory
Committee
MemberFrom
Jun-20

Audit &
Supervisory
Committee
MemberOutside Director
12
persons2
persons2
persons3
persons8
persons3
persons2
persons3
persons8
persons3
persons2
persons4
persons7
persons4
persons2
persons4
persons

Director

OutsideDirectorFemaleDirector

Since the introduction of an Executive Officer system in 2014,
The 77 Bank has taken steps to strengthen and speed up
functions related to the execution of business operations byincreasing the number of Executive Officers and other means. In
order to further strengthen systems related to the execution ofbusiness execution by Executive Officers, The 77 Bank
established an “Operating Officer Committee” in June 2021.

Total number
of Directors

Ratio of Outside Directors

19
persons

26.3%
5/19
persons■ Revitalization of our organization through

37.5%
6/16
persons

In order to strengthen risk management and consider policies
that take changes in the times into consideration, the Bank has
established various cross-organizational committees consistingof officers and persons responsible for our operations.

16
persons

Ratio of female Directors

various committees

6.2%
1/16
persons

Changes in the number of Executive Officers(people)
15
10

9

9

Jun-18Jun-1917
persons17
persons41.1%
7/17
persons

11.7%
2/17
persons

47.0%
8/17
persons

11.7%
2/17
persons

The Bank’s “Corporate Governance Policy” stipulates that the effectiveness of the Board of Directors as a whole is analyzed andevaluated at the end of each fiscal year, and a summary of the results is disclosed.
After deliberation by the Corporate Governance Committee, the Board of Directors conducted an analysis and evaluation of theoverall effectiveness of the Board of Directors for FY2021 at its annual meeting on May 14, 2021.
In this context, we have confirmed that the effectiveness of the Board of Directors as a whole has been ensured.
On the other hand, with the aim of further improving the effectiveness of the Board of Directors, the following matters have been
confirmed and shared, and we intend to make improvements in the future.
・To endeavor to strengthen supervisory functions in anticipation of the advancement of the digital transformation, etc.
・To review the management of the Board of Directors to further invigorate discussions.

■ Enhancement of IR and SR activities

The Bank is actively involved in IR and SR activities including
the holding of corporate briefings for institutional investors andindividual investors (IR), and engaging in dialogue to build
relationships of trust with shareholders (SR), so that stakeholders can understand the management conditions of the Bank.

12

12

Jun-20Jun-21

50

Jun-17●Compliance Committee●Internal Control Committee●Operating Officers

Committee●ALM / Earnings

Management Committee■ Evaluating the effectiveness of the board of directors

24

Creation of “Operating
Officers Committee”●Earthquake Reconstruction and

Financial Facilitation Promotion
Committee●Digital Strategy Investigation
Committee●Paperwork-free Promotion
Committee●Senior Service Support Investigation
Committee

Financial
SectionJun-18

Increased number of
Outside Directors

Company
Information

Jun-172021■ Creation of operating officers committee

The Bank transitioned in June 2017 from a company with the Board of Corporate Auditors to a company
with an Audit & Supervisory Committee to improve corporate value through further enhancement ofcorporate governance, which was followed by initiatives for developing further effective corporate
governance structure through appointing Outside Directors and female Directors.
Director●Elected female officer

2020

Increased numberof Outside Directors(female)Strategy■ Improvements in governance●Revised Executive Officer system

2019

Va l u e

2014

Recent holding of corporate briefings (year and month held / number of participants)
Corporate briefings for
institutional investors(Conference calls)

12 in 2020: 92 participants
6 in 2021: 80 participants

Corporate briefings forindividual investors(Online briefings)

1 in 2021: 848 participants
7 in 2021: 907 participants■ Communication of message to employees

In order to deepen employees’ understanding of changes in theenvironment surrounding the Bank, the management issues
facing the Bank, and other issues, the Bank has been holding the“77 President’s School,” led by the President of the Bank.
Additionally, in order to promote an understanding of “Vision2030” and communicate the concept that it is key that every
employee thinks for themselves and acts proactively as amessage from senior management, we are also holding “Vision
2030 Briefings” at headquarters and bank branches, withspeakers including the President, Senior Managing Director, andManaging Directors. At these briefings, we ensure there is a lively
exchange of opinions, including Q&A sessions, as part of our aim
to “establish a corporate culture of taking on new challenges.”

THE 77 BANK INTEGRATED REPORT| 25