Fiscal 2019
Earnings Briefing Materials

June 5, 2020

IndexI. Summary of Earnings for Fiscal 2019

Pg

◎Profit and Loss Conditions in Fiscal 20193

◎Factors in Increase / Decrease in Core Business Gross Profit (Fiscal 2019)4◎Conditions in Loans, Deposits, and Assets in Custody

5◎Conditions in Credit Costs and Disclosed Non-performing Loans

6◎Conditions in Evaluation Gain on Securities and Equity Ratio

7

II. Main Strategies and Progress of the Fiscal 2018 Medium-Term Management Plan

Pg

◎Positioning of 10-year Vision and Medium-Term Management Plan
◎Progress in “Digital-Human-Digital Bank” I

10

9◎Progress in “Digital-Human-Digital Bank” II◎Major Numerical Targets of Fiscal 2018 Medium-Term Management Plan

11

◎Plans for Loans, Deposits, and Assets in Custody◎[Consulting Strategy (Personal Banking)] Provide Diversified Services Responding to “Thoughts” of More Customers◎[Consulting Strategy (Corporate Banking)] Strengthen Consulting Functions Toward Solutions to Customers’Management Issues◎[Consulting Strategy (Corporate Banking)] Expansion of Fee Businesses through Enhanced Consulting Functions

13◎[Consulting Strategy (Corporate Banking)]Efforts for Expanding and Utilizing Resources in Ship Finance17◎[Online Business Strategy] Efforts for Offering Value and Enriching Services through Direct Channels

18◎[ICT Strategy] Expansion and Improvement of Touch Point Utilizing Digital Technologies◎[BPR Strategy] Utilization of Digital Technologies to Improve Operational Efficiency and Provide Added Value

19◎[Branch Strategy] Review Branch Functions Toward Realizing “D-H-D Bank”

21◎[Regional Revitalization Strategy] Proactive Efforts for Sustainable Regional Growth

22◎[Market Strategy] Strategic Asset Allocation Responding to Volatile Financial Market

23◎[Market Strategy] Ensure Earnings from Market Investment and Flexible Foreign Currency Procurement

24◎[Personnel Strategy] Development of Capabilities for More Sophisticated and Specialized Bank Operations

25◎Efforts for SDGs

26

◎Efforts for SDGs
◎Customer Support through the Group’s Collective Strengths

27◎Improvement of Customer Support and Bank Operations with Alliance Framework◎Profit / Loss Forecasts for Fiscal 2020

29

12
14
15
16

20

28
30

1

I. Summary of Earnings
for Fiscal 2019

Profit and Loss Conditions in Fiscal 2019
 Profit was up year-on-year at every income level, exceeding the earnings forecast disclosed in November 2019
Earnings for Fiscal 2019 (Nonconsolidated)
Fiscal2019

Core business gross profit (Note 1)
Interest and dividend income
Fees and commissions
Of which, revenue on assets incustody
Other operating income (Excluding
profit/loss related to bonds including
JGBs, etc.)
Expenses ( -)Personnel expenses
Nonpersonnel expenses
Taxes
Core business net income (Note 2)(Units: Millions of yen)

YoY

Increase/
Decrease

Fiscal 2018+0.78%

76,17666,441
7,063

76,76866,200
7,114

+592
(241)
+51

1,697

(401)

2,098

3,453

+782

2,671

49,93325,833
21,225
2,873
26,835

(424)
(501)
+146
(71)
+1,017(0.84%)

50,357
26,334
21,0792,944
25,818+3.94%

Core business net income (excluding gain
(loss) on cancellation of investment trusts)

26,895+1,881Credit costs ( -) ①+②-③
Provision of reserve for general loan
losses ①
Amortization of non-performing
loans ②
Recoveries of written off claims ③
Gain (loss) related to securities
Gain (loss) related to bonds including
JGBs
Gain (loss) related to stock, etc.
Other temporary gain (loss)
Ordinary income
Extraordinary income (loss)
Income before income taxes
Net income

6,910+1,104

5,806

464

+259

205

7,192

+1,062

6,130

745
3,516

+217
(639)

528
4,155

2,021

+1,815

206

1,494
3,141
26,581(955)
25,626
18,502(2,455)
+960
+232
(428)
(195)
+240

+1.31%

3,949
2,181
26,349(527)
25,821
18,262

Ordinary revenue

106,398(824)(0.77%)

107,222

Business net income

28,392+2,573+9.97%

25,819+7.52%

25,014+0.88%(Note 1) Core business gross profit: “Business gross profit” excluding profit/loss related tobonds including JGBs, etc.
(Note 2) Core business net income: Core business gross profit -Expenses

Key factors in increase / decrease, etc. (YoY)
Core business gross profit: Up ¥592 million YoY◎Interest and dividend income down due to a decrease in gain on securities management, althoughgain on loan management increased◎Fees and commissions up due to an increase in solutions-related revenue◎Other operating income up due to increases in gain (loss) on foreign exchange transactions and gain
(loss) on derivatives

Expenses: Down ¥424 million YoY◎Personnel expenses down although nonpersonnel expenses up as strategic investments increased

Core business net income up as core business gross profit increased andexpenses decreased, up ¥1,017 million YoY
Credit costs: Up ¥1,104 million YoY◎Provision of reserve for general loan losses increased due to a rise in loan loss
result, etc.
◎Amortization of non-performing loans increased due to an increase in bankruptcies and downgrades,
etc.

Gain (loss) related to securities: Down ¥639 million
Gain(loss) related to bonds including JGBs (Up ¥1,815 million YoY)
◎Gain (loss) on sales of bonds increased due to sales of foreign bonds in view of market trends

Gain (loss) related to stock, etc. (Down ¥2,455 million YoY)
◎Loss on sale of ETF was recorded following a drop in stock prices

Other temporary gain (loss): Up ¥960 million YoY◎Temporary retirement benefit expenses down, etc.

Despite an increase in credit costs, ordinary income increased, up ¥232
million YoY, due to an increase in core business net income
Extraordinary income (loss): Down ¥428 million YoY

As a result, net income was up ¥240 million YoY

3

Factors in Increase / Decrease in Core Business Gross
Profit (Fiscal 2019) Interest and dividend income were down due to a decrease in gain on fund cancellation, etc., despite anincrease in gain on loan management in domestic and foreign currencies
 Fees and commissions were up due mainly to higher solutions-related revenue
Year-on-year (Fiscal 2019 - Fiscal 2018)(Units: Billions of yen)
(Note) Differences in yield utilize
yield differences with deposits, etc.

Gain on loan
management(¥47.0 billion)

Of which, domestic currency(¥40.9 billion)

+0.12

+0.53

Gain on securities
management(¥19.4 billion)

Core businessgross profit(¥76.7 billion)+0.41

Volume factors +0.95 (Average loan balance up ¥64.3 billion)

Of which, domestic currency(¥15.1 billion)

Volume factors (2.15) (Average securities balance down ¥150.3
billion)(2.78)(1.09)+0.59

Yield difference factors (1.50) (Yield difference down 0.03%)

Of which, foreign currency(¥6.0 billion)

Interest anddividend income(¥66.2 billion)(0.24)

Volume factors +1.62 (Average loan balance up ¥159.0 billion)

Of which, foreign currency(¥4.3 billion)

Other(-¥0.3 billion)+1.69

Yield difference factors (0.54) (Yield difference down 0.12%)

Yield difference factors +0.23
Gain on fund cancellation factors (0.86) (Decrease in gain on
cancellation of investment trusts, etc.)
Volume factors +1.90 (Average securities balance up ¥120.1
billion)Yield difference factors (0.21) (Yield difference down 0.35%)+0.32

Fees andcommissions(¥7.1 billion)

+0.05
Other
(¥3.4 billion)+0.78

Revenue on assets incustody(¥1.6 billion)(0.40)…

Insurance agency commissions (0.37) (including corporate insurance [solutions-related
revenue] (0.20)), etc.

Other(¥5.4 billion)+0.45… Solutions-related revenue +0.61, etc.

…+0.43 from gain (loss) on derivatives, +0.36 from gain (loss) on foreign exchange transactions, etc.
(including solutions-related revenues (0.22))

4

Conditions in Loans, Deposits, and Assets in Custody “Deposits, etc.” were up 0.7% year-on-year
 “Loans” were up 4.5% year-on-year. Loans and deposits both grew for the 23rd consecutive year
Balance of deposits, etc. by region
Fiscal
2019

YoY

4,413.0
230.2
166.0
250.5
146.3
425.9
80.5
5,712.6

4,536.3
234.4
163.1
242.1
152.0
398.1
28.0
5,754.3+123.3
+4.2
(2.9)
(8.4)
+5.7
(27.8)(52.5)+41.7

Increase/
Decrease
+2.8%
+1.8%
(1.7)%(3.4)%+3.9%(6.5)%(65.2)%+0.7%

The Bank

Balance of assets in custody(Units: Billions of yen)

Fiscal2018

Fiscal2019

Group assets in custody

557.4

542.2

(15.2)

Increase/
Decrease(2.7)%

Balance at the Bank

357.9

339.7

(18.2)(5.1)%

Balance at Shikoku Alliance Securities

199.5

202.4

+2.9

+1.5%

Sales of Group assets in custody

117.6

122.3

+4.7

+4.0%

Sales at the Bank

56.7

54.4

(2.3)

(4.1)%

Sales at Shikoku Alliance Securities

60.8

67.9

+7.1

+11.7%

YoY

Balance of loans by region
RegionWithin Ehime Prefecture
Shikoku (excluding Ehime)
KyushuChugoku
Kinki
Tokyo and Nagoya
Financial Market Business OfficeTotal (domestic branches)
Overseas, etc.
Total

Deposits

Within Ehime Prefecture
Shikoku (excluding Ehime)
KyushuChugoku
Kinki
Tokyo and Nagoya
Overseas, etc.
Total

Fiscal2018

Loans

RegionShare within Ehime Prefecture as of March 31, 2020
(excluding Japan Post, agricultural cooperatives, etc.)(Units: Billions of yen)

Composition byregion for balance of
deposits, etc.

Regional banksother than the BankTokyo and Nagoya

City banks /Trust banks

Secondregional banks

CreditunionsOverseas,
etc.

Kinki
Chugoku
KyushuWithin Ehime
Prefecture

Shikoku(Units: Billions of yen)

Fiscal2018

Fiscal
2019

YoY

2,351.1
294.3
295.1
410.7
361.2
625.8
109.8
4,448.4102.4
4,550.8

2,409.2
315.6
306.9
447.0
371.6
639.4
117.6
4,607.5
149.0
4,756.6

+58.1
+21.3
+11.8
+36.3
+10.4
+13.6
+7.8
+159.1+46.6+205.8

Increase/
Decrease
+2.5%
+7.2%
+4.0%
+8.8%
+2.9%
+2.2%
+7.1%
+3.6%
+45.5%+4.5%*Please refer to pages 12 and 13 of the Reference Materials section for the breakdown, etc. of thebalance of loans and deposits at the end of the period.

Composition byregion for balance ofloansTokyo and Nagoya
Kinki

Financial Market
Business Office
Overseas,etc.

ChugokuWithin Ehime
Prefecture
KyushuShikoku5

Conditions in Credit Costs and Disclosed Non-performing Loans Credit costs were up year-on-year mainly due to increases in bankruptcies and downgrades Ratio of disclosed non-performing loans was 1.55%, remaining at a low level
Credit costs by factor(Units: Billions of yen)

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Credit costs total

0.6

3.5

5.8

6.9

+1.1

Provision of reserve for general loan
losses

(0.8)

(0.6)

0.2

0.4

+0.3

Amortization of non-performing loans

2.4

4.7

6.1

7.1

+1.1

Bankruptcies
Downgrades, etc.
Upgrades and collections

0.2
5.0
(2.9)

0.8
6.3
(2.3)

1.0
6.9
(1.8)

1.3
8.1
(2.2)

+0.2
+1.2
(0.4)

Recoveries of written off claims ( -)

0.8

0.5

0.5

0.7

+0.2

Credit management expense ratio (*)

0.02%

0.09%

0.13%

0.15%

+0.02P

YoY(*) Credit management expense ratio = Credit costs / Average loan balance

Amounts and ratios of disclosed non-performing loans
under the Financial Reconstruction Act
Loans to bankrupt or effectively
bankrupt borrowers
Doubtful assets
Credit subject to specific risk
management
Total disclosed non-performing loans
Ratio of disclosed non-performing
loans(Units: Billions of yen)

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

4.4

3.0

6.0

6.5

+0.5

39.8

44.1

46.6

53.2

+6.6

18.1

18.0

18.6

18.0

(0.6)

62.4

65.2

71.3

77.7

+6.4

1.48%

1.44%

1.48%

1.55%

+0.07P

YoY

6

Conditions in Evaluation Gain on Securities and Equity Ratio Evaluation gain on securities was ¥234.4 billion, maintaining a top level among regional banks
 Consolidated equity ratio (BIS standards) was 14.85%
Evaluation Gain on Securities (Nonconsolidated)(Hundreds ofMillions of Yen)

March
March
March
March
March
2016
2018
2019
2015
2017
Nikkei average
Gain / loss on securities(right axis)(left axis)(Note) Excludes evaluation gains / losses on money held in trust

Consolidated Gross Equity Ratio

Nikkei Average (Yen)

March
2020

March
March
March
March
2018
2016
2015
2017
Tier 1 ratio for common stock,
Gross equity ratio
etc.

March
2019

March
2020

7

II. Main Strategies andProgress of the Fiscal 2018
Medium-Term Management Plan
Second Stage for 150(April 1, 2018 –March 31, 2021)

Positioning of 10-year Vision and Medium-Term Management Plan Steady growth toward 10-year vision of the “leading financial services group in the Setouchi region in terms ofcustomer satisfaction”
10-year Vision

Sustainable growth of the Bankand revitalization of regions

Goals forthe future

Leading financial
services group

Fiscal 2021 Medium-Term
Management Plan
Third Stage for 150
─Dramatic growth─

in the Setouchi
region in terms ofcustomersatisfaction

Fiscal 2018 Medium-Term
Management Plan
Second Stage for 150
─Transitioning to a new
growth trend─
Fiscal 2015 Medium-Term
Management PlanFirst Stage for 150
─Take on new growthstrategies─

Goals forthe future

2016

2017

─ Whenever, wherever, closer to you ─

I

Strengthen ability to offer value tailored to each customer

II

Enhance productivity and reduce cost through optimum resource
allocation

III

Commit to regional revitalization actively

IV

Ensure stable, long-term earnings power through overseas and market
investment

V

Develop organizational culture that diversity of every person
is leveraged and proactively and mutually enhanced

2018

2019

2020

2021

2022

Core Strategy

Core Policy

2015

Digital-Human-Digital Bank
Consulting strategy
Online business strategy
ICT strategy, Branch
strategy, BPR strategy
Regional revitalization
strategyMarket strategy
Personnel strategy

2023～

9

Progress in “Digital-Human-Digital Bank” I
 Step-up toward the next Medium-Term Management Plan through realization of full-fledged results as a “D-H-D Bank”

Digital touch point

Fiscal 2020 Plan

Expansion of API linkage services
Renewal of “MoneyManager” smartphone app
 The scope of balance inquiry and period for account activity statement weregreatly expanded through utilization of the TSUBASA-API

Human consulting

Increase of next-generation branches 65 branches were shifted to a “place where customers’ issues are solved”
from a “place mainly for administrative tasks”

AGENT system equipped with “attentive listening function”
 Listening to customers’ issues responding to their life stage, after completing
administrative work on a tablet device

Launch of ICT consulting business Provided customer support for improving operational efficiency andstrengthening sales capabilities

Introduction of “AGENT System” counter reception tablet

Digital operation

 Increase to 12 companies

 API linkage with external services of six companies

 By eliminating customer data entry and seal, time required for
opening new account was reduced from 45 minutes to 10 minutes
 Approximately 40% of administrative tasks at Bank Branches were digitalized
through “unification from reception through processing ”

Introduction of “AGENT for Business” for corporations
 Enable advance preparation of receipt and disbursement slips and ordinary
deposit account opening forms by customer PCs

Introduction of new “HOME” digital home loan service
 Complete application through borrowing via smartphone; percentage ofapplications using “HOME” rose to 35%

Introduction of new “SAFETY” digital card loan service
 Complete application through borrowing via smartphone; bank card loans as“general tools” supporting daily life

 Addition of a transfer function
utilizing updatable API

 Increase to 106 branches Increase in branches with thissystem Staffing business Support via a support team for
COVID-19 measures

Fiscal 2021
Medium-Term
Management Plan Completion of introduction at all
branches Expansion of use at off-site
locations and events
 Improving of operational efficiency
by promoting use
 Full-scale improvement of top line
through further expansion ofservice areas
 Consider expanding service areas

10

Progress in “Digital-Human-Digital Bank” II
Digital touch point-

Human consulting

Counseling for customers

Digital operation
Relationship with customers
through digitalization

Customer contact points (touch points)◆July 2018 "Iyogin ID“ introduced◆July 2018 "Money Forward“ API linkage started◆July 2018 “finbee“ API linkage started◆December 2018 “Insurance Robot Advisor”
introduced◆December 2018 "Zaim" API linkage started◆May 2019 Full website renewal◆May 2019 “Moneytree“ API linkage started◆September 2019 "Money Manager“ smartphone
app updated◆December 2019 "Money Forward Cloud“ APIlinkage for corporations started-◆July 2018 “AI sales support system” introduced◆January 2019 "Chatbot service“ started◆August 2019 “Digital Development &Promotion Planning Department” established◆April 2020 “Investment Trusts Information Service × LINE“ started◆April 2020 "CUBE“ management system for properties in custody
introduced◆April 2020 “Twitter” account opened

Digitaltouch point
Respond to each andevery customer
through humanityand digitalization◆August 2018 “Consulting Business Division” established◆October 2018 Two “insurance plazas” established◆August 2019 ”Prime Desk” established◆September 2019 AGENT System equipped with
“attentive listening function”

Human
consulting

Consulting◆April 2018 “ICT consulting business” started◆May 2018 Operation of “Natural disaster responsive financing” started◆August 2018 “Cloud funding business“ started◆October 2018 "Lease intermediary operations“ started◆August 2019 Operation of “flood responsive financing” started◆April 2020 "Staffing business” started

Digitaloperation
Channels not depending on time and place◆April 2018 “Iyogin PayB” smartphone payment app
introduced◆June 2018 “THEO + Iyo Bank” started to be offered◆February 2019 “AGENT System” introduced◆April 2019 "AGENT for Business“ introduced◆September 2019 Entirely web-based business quickloan, “Shobai Hanjo (prosperous
business)”started◆November 2019 New “HOME” digital home loan
service introduced◆April 2020 “Push! Auto Call” automatic voice
call system introduced◆May 2020 New “SAFETY” digital card loan service
introduced

11

Major Numerical Targets of Fiscal 2018 Medium-Term
Management Plan
 Present progress is generally steady against numerical targets of the Medium-Term Management Plan
 Net income of ¥16.0 billion is planned, assuming an increase in credit costs caused by the COVID-19 outbreakand other factors, although core business gross profit is expected to reach the target for the fiscal 2020 due to
implementation of various measures.

Target items
Core business grossprofitFees andcommissions
Net income

Fiscal 2018
Targets

Fiscal 2019

Results

Results\75.0 billion \76.1 billion \76.7 billion\7.0 billion\7.0 billion\7.1 billion\18.0 billion \18.2 billion \18.5 billion

Fiscal 2020 Fiscal 2020
Targets
Forcast\76.5 billion \78.0 billion\8.5 billion\8.0 billion\20.5 billion \16.0 billion

ROE

3.0%
or more

2.99%

2.95%

3.0％ or moreCore OHR

70.0%
or less

66.10%

65.04%

65.0％ or less

Equity ratio(BIS standard)

15.0％
or more14.38%

14.85%

15.0％ or more

2.0％
or less

1.48%

1.55%

2.0％ or less

Ratio ofnon-performing loans

12Plans for Loans, Deposits, and Assets in Custody Deposits, etc., are planned to be increased approx. ¥487.0 billion during the three years of the Medium-Term
Management Plan, with an average balance totaling ¥5,941.0 billion during fiscal 2020
 Loans are planned to be increased approx. ¥711.0 billion during the three years of the Medium-Term Management
Plan, with an average balance totaling ¥4,829.0 billion during fiscal 2020
Plans for average deposits, etc., balance and assets in custody balance(Units: Billions of yen)
Fiscal 2018
Fiscal 2017
Results

Results

Fiscal 2019

YoY

Results

Fiscal 2020

YoY

Plan

YoY

Increase/decreaseduring thePlan

Average deposits, etc., balance

5,453.7

5,576.3+122.6

5,821.3+245.05,941.0+119.7+487.3

Of which, individual deposits

3,387.1

3,417.2+30.1

3,474.6+57.4

3,545.0+70.4+157.9Group assets in custody balance

544.4

557.4

+13.0

542.2

(15.2)

600.0

+57.8

+55.6

Of which, balance of assets in custody at the
Bank

343.0

357.9

+14.9

339.7

(18.2)

370.0

+30.3

+27.0

Of which, balance at Shikoku Alliance Securities

201.4

199.5

(1.9)

202.4

+2.9

230.0

+27.6

+28.6

Plans for average loan balance(Units: Billions of yen)

Fiscal 2018
Fiscal 2017
Results

Results

Fiscal 2019

YoY

Results

Fiscal 2020

YoY

Plan

YoY

Increase/decreaseduring thePlan

Average loan balance

4,118.0

4,398.6+280.6

4,621.9+223.3

4,829.0+207.1+711.0

Corporate loans

2,784.6

2,940.1+155.5

3,061.2+121.1

3,162.0+100.8+377.4

1,254.3

1,300.4+46.1

1,344.3+43.9

1,381.0+36.7+126.7

Individual loans

996.5

1,034.8+38.3

1,085.2+50.4

1,139.0+53.8+142.5

Municipal loans

236.8

241.5

+4.7

236.6

(4.9)

230.0

(6.6)

(6.8)

Financial Market Business Office

74.4

98.8

+24.4

109.3

+10.5

118.0

+8.7

+43.6

Singapore Branch

25.5

83.2

+57.7

129.6

+46.4

180.0

+50.4

+154.5 13

Of which, within Ehime[Consulting Strategy (Personal Banking)]

Provide Diversified Services Tailored to “Thoughts” of More Customers
 Provide a wide variety of financial services responding to various customer needs with the arrival of “100-Year Life
Society”
70
years
old

▲ Prepare fordonation andinheritance

Retirement

Start toreceive pension

▲

60
years
old
▲

Grandchild isborn▲Child becomes
independentChild getsmarried

▲

50
years
old
▲

Buy house

40
years
old

▲ Child goes on
to higher
education▲

Have a baby

Get married

30
years
old
▲

▲

Enter university

Start a job

20
years
old

▲

▲

Birth

Needs forpreparation▲ Enter high school

10
years
old

▲

0
years
old

Whole life insurance, term insurance, income security insurance, educational endowment insurance, medical insurance, cancer insurance

Needs forincreasing
Needs forloans

NISA, investment trust, savings trust, personal pension, iDeCo, Tsumitate (regular saving) NISA

Auto loan, education loan, housing loan

Needs for Single premium whole life insurance
inheritance Testamentary trust, legacy planning

Establishment of insurance
proposal structure

Level premium insurance sales andnumber of policies held

Number of contracts on assets in custody* Contracts on assets in custody
Contracts with balances of investment trusts, single premium policies, public bonds,
foreign bonds, structured bonds, and foreign currency deposits not less than ¥1 andlevel premium insurance contracts (including Shikoku Alliance Securities)◆Insurance plazas
12 locations (32 staff members)◆Insurance consulting staff 60 locations (107※2020年4月時点
staff members)◆Medical insurance sales results in fiscal 2019 is No. 1 among regionalbanks for two consecutive years (survey by The Japan Financial News)* As of April 2020

March 2019
Results

March 2020
Results

March 2021
Plan

Number oflocations

Number ofstaff members

April 2017

April 2018

Number of
sales

April 2019

April 2020

Number of policies held

March 2018 March 2019 March 2020 March 2021
Results
Results
Plan
Results

14

[Consulting Strategy (Corporate Banking)]

Strengthen Consulting Functions Toward Solutions to Customers’Management Issues
 Share our customers’ “future vision” and management issues based on business feasibility assessment and offer smooth financing andsolution for issues
 Provide support for business succession of customers through M&As and various schemes utilizing a wide-area network centered on
the Setouchi region
Sharing of Management Issues and Optimal Offering of Value throughM&As and Business Succession
Business Feasibility Assessment◆Support customers solve management issues using the “Mirai Support Sheet” as a businessfeasibility assessment tool and the “business feasibility assessment investigationcommittee” held among the head office and branches◆Consulting on M&A for “business growth” for further enhancing corporate value increased, in
addition to that on M&A as a solution to the issue of “a lack of successors”[M&A transactions concluded as an advisor]* Results from fiscal 2016 to
fiscal 2019

Number of business feasibility assessment
conducted (accumulated)(Number)(Number)

Kyushu area
Transferer side: 3 cases
Acquirer side: 3 cases
Total 6 cases

Number of Mirai Support Sheet prepared (left axis)

Chugoku area
Transferer side: 8 cases
Acquirer side: 10 cases
Total 18 cases

Shikoku area
Transferer side: 29 cases
Acquirer side: 25 cases
Total 54 cases

Number of business feasibility assessment
investigation committee held (right axis)

Kinki area
Transferer side: 2 caseAcquirer side: 2 caseTotal 4 cases

Number of M&A contracts concluded and consulting on business succession conducted(Millions of Yen)

March
2017

March
2018

March
2019

Business succession
consulting revenue
Number of M&A
contracts
concluded

Revenue from conclusionof M&A contracts
Number of consulting on
business succession(Number)

March
2020

Total feasibility
average loanbalance of customers for which the business feasibility
business
assessment検討会実施先の総貸出金平残推移(Hundreds ofMillions of Yen)

assessment investigation committee was conducted

March
2017

March
2018

March
2019

March
2020

March
2017

March
2018

March
2019

March
2020

15

[Consulting Strategy (Corporate Banking)]

Expansion of Fee Businesses through Enhanced Consulting Functions
 Solutions-related revenue was steady at ¥2,936 million in fiscal 2019
 Improve menus and strengthen the structure further toward achieving the Fiscal 2018 Medium-Term
Management Plan target of ¥3,000 million(Millions of yen)

New Support Menus for the Fiscal 2018 Medium-Term Management Plan

Other
Corporate life insurance

April 2018

Business matching
Business
succession/M&A
Private placement bonds

May 2018

ICT consulting
business

Syndicated loans, etc.

Natural disaster
responsive financing

October 2018

August 2019

Lease intermediary
operations

Flood-responsive
financing

From April 2020
Staffing business started◆ Introduce appropriate human resources through a partner staffing
agency, responding to customers’ management issues and employment
needs to support growth and productivity◆ The Bank was selected as an entity that adopts business as a“pioneering HR business” of the Cabinet Office
Flow of introduction

Employment
needs

Provideinformation

Job offers

Registration

Introduce human resources

Customer

Fiscal 2018
Plan

Fiscal 2018
Results

Fiscal 2019
Plan

Fiscal 2019
Results

Staffing agency

Job seeker

Fiscal 2020
Plan

16

[Consulting Strategy (Corporate Banking)]

Efforts for Expanding and Utilizing Resources in Ship Finance Support further development of the maritime-related industry in Japan and overseas by utilizing expertise in
ship finance, the Bank’s strength
The Bank’s Strength in Ship FinanceAppropriate Risk Management Structure◆Accumulated good-quality loan assets through solid effortsof ship finance over a long period (transactions with 70% of
Ehime ship owners)◆Main charter destinations have shifted from “domestic operators” to“foreign operators”
Existing vessels
eligible for loans

Number of ocean-going vessels owned
by ship owners in Ehime
No. 1 in Japan

Domestic
Operators
1,051 ships

Ehime Ship
Owners
1,063 ships

Non-Ehime Ship
Owners1,459 ships
IRC survey (As of September 30, 2018)◆ Collects and provides high-quality information by regularly
visiting domestic and foreign maritime-related companies◆ Goodrelationshipbetween Singapore Branch andJapanese/non-Japanese companies in the ASEAN region

Foreign
operators
44.6%

Domestic
operators
55.4%

Foreign
operators
57.9%

December 31, 2015

Domestic
operators
42.1%

March 30, 2020

◆Efforts centered on operators which disclose proper information and withwhich communication can be ensured◆Deeper examination utilizing the network the Bank has built up thus far◆ The Bank’s original evaluation of charterers based on accumulated
information

Response to constantly fluctuating market trends◆Verification of durability of partners through periodic stress tests◆Provision of an exchange risk hedging method through currency selection
type loans(Hundreds ofMillions of Yen)

Loan balance for the maritime industry
For other maritime industry and overseas
For domestic and overseas oceantransport◆Develops professional human resources by conducting longterm dispatch to domestic operators, trade companies, etc.
and using the trainee system at the Bank
◆Established a structure for organizing syndicated loans to
respond to diversifying finance needs
March 2018

March 2019

March 2020

March 2021
Plan

17

[Online Business Strategy]

Efforts for Offering Value and Enriching Services through Direct Channels
 Expand introduction of new digital services with the purpose of improving CX, top line, and operational efficiency
 Direct sales bases are being expanded to promote online business targeting business offices and establishing structures
Introduction of New “SAFETY” Digital Card Loan Service
in May 2020

Operational Progress of “HOME,”
the New Digital Home Loan Service◆Concept: “bank card loans as ‘general tools’ supporting daily life”◆After releasing the app in November 2019, the number of applications is
steadily increasing.

Patent application was madeEstablish the position of “properly safe service” provided by abank, escaping from excessive competition◎Generally complete from application through borrowing via the app◎Assesses loanable amount in a chat form (as quick as one minute!)◎Messages on insufficient balance based on account balance, planned
receipt/disbursement, and payment amount◎Enable borrowing by one-time tapping or in specified amount based on
the amount expected to be insufficient◎Questions can be made via chat

Patent◎Generally complete from application through borrowing via the appapplication◎HOME TICKET: Assesses loanable amount in a chat form (as quick as
was madethree minutes!)◎HOME: Loan procedures that are “easily, anytime, and anywhere”◎Electronic contract and digital group credit life insurance:
Proportion of HOME in housing loans
Full digitalization and non-face-to-faceafter releasing the app
operation even for peripheral businessin November 2019(as of April 2020)
No revenue stamp fees for contracts

Paper-based
application◆Full-scale improvement of top line by further expanding service areas

Launch of “Zero Plan” Corporate Internet Banking*.*◆Addition of a new plan with no monthly charge that provides account balance andactivity statement functions only
◆Planning to establish digital touch points with business operators and expand online
business bases

Number of applications to corporate internet
banking
単位：件
Unit:
cases
Zero Plan
A and B Plans◆This service is provided on Shikoku Island, as
well as Hiroshima, Okayama, Oita, andYamaguchi Pref.

◎The service area will be further expanded
in future

January
2020

February
2020

March
2020

April
2020

18

[ICT Strategy]

Expansion and Improvement of Touch Point Utilizing Digital Technologies
 Expansion and improvement of touch points through improvement of smartphone applications, expansion of API linkage
partners and advancement of digital promotion
Improvement of Applications through the use of API and Expansion of
Linkage Services

Advancement of Digital Promotion

Improvement of “Money Manager” smartphone app

Sending more information from owned media◆An update is scheduled in November 2020, including improvement of
UI/UX through design update and installation of a transfer function
utilizing an updatable API◆ Further promotion of use of digital channels centering on adding
functions continually to the application◆A Twitter account was opened in April 2020 to start to send information actively
and provide interactive communication◆Functions and operability of “iyomemo,” editorial content with 16 thousand monthly
views, were expanded in May 2020

[Added functions][Channel utilization targets]

Release of "Money Manager"
NovemberInquiry functions for maximum
2017
of five accounts
Addition of account activity
messaging function
UpdateSeptemberGreat expansion of scope of2019
inquiry and periods
UpdateNovember
Design update and addition of2020
transfer function

NEW

Digital channels (apps, HP, IB)+

February
2018

FiscalFiscalFiscalFiscal Fiscal
2023
2019
2020
2021
2022
*Indexation with number of ATM uses as of March
2020 as 100

Active development of video promotion◆The Bank co-sponsored the "Brain Online Video Award (BOVA)" and is actively
providing promotional videos collected from creators.

Improvement of the API linkage service

Award entry videos◆Realized API linkage with external services of six companies in total including
services for individuals and business corporations◆Linkage partners will be expanded further in fiscal 2020 and new use cases will besought including linkage among different industries

External services

API infrastructure[Results]
6 companies, at present[Forecast]
12 companies, at the endof the fiscal 2020

[Individual]
TSUBASA FinTech
Common Platform[Business]
HitachiCorporation IB API linkage
serviceBank👑👑 Student Award
winning video

Efforts for visualization of advertisement effects◆Initiatives leading to efficient and effective spending are started by making cost
efficiency of various advertising measures visible◆An effect estimation simulator based on past data and an effect measurement
dashboard have been established and utilized

19

[BPR Strategy]

Utilization of Digital Technologies to Improve Operational Efficiency
and Provide Added Value Carving out time for solving customers’ issues by strengthening efforts toward a “bank where procedures are thesimplest in Japan”
Improvement of “Agent” Counter Reception Tablet
without Seal or Data Entry

New Establishment and Full Operationof Loan Operation Support Center Off-site tablet use by sales liaison clerks (scheduled to be released in June 2020)"Concentration to headquarters of loan-related administrative tasks
at Bank Branches”⇒ Counter reception tasks at off-site locations will be possible with
AGENT

Loan Operation Support Center Use at workplaces, universities, and events in shopping centers, etc.
⇒ Expansion of business opportunities by taking AGENT to events, etc.

Realization of a “person” serves as a “bank”
Bank
employee

CustomersBank
employee

Workplaces
Bank
BranchUniversities
Shopping
center, etc.

Launch of “CUBE“ Management System
of Property in CustodyBank
BranchBank
Branch Target procedures 17 types ofprocedures including “corporate
examination,” “self assessment,” and“preparation of contracts”
 Introduction status
Introduced to 5 branches in
Matsuyama region and 16 groups (54branches in total)⇒ Creates time for loan judgement and sales activities
for employees at Bank Branches

Thorough utilization of other digital tools“Promoting digitalization and automation by considering utilization ofgroupware and RPA for all operations”“Digitalization of property in custody and various intermediation businesses byintroducing electronic signatures”
Transfered byelectronic signature

Liaison clerk

Storage and return

Workflow functionof groupware
Customer Transfer of property completed by registering property in custody on a
Windows device and receiving an electronic signature from the customer
without issuance of a receipt⇒ “Paper-based” collection slips are abolished and paperlessprocedures are realized

Automation function
for RPA dataprocessing Operational efficiency corresponding 65,000 hours annually (approx. 33
employees’ annual working hours) was realized as of the end of March 2020
(including BPR effects such as streamlining and rationalization of operations) Major examples
Digitalization of approval request flow to headquarters, automation of someloan-related administrative tasks

20[Branch Strategy]

Review Branch Functions Toward Realizing “D-H-D Bank”
 Shift branches to a “place where customers’ issues are solved” from a "place mainly for administrative tasks“(April 2020: Yogo Branch was newly built opened )General reception

Consulting lobby

Guides customers properly responding to theirneeds, utilizing digital technologies
Features◎Lobby advisor guides customers to a proper counter

Functions◎New counter reception system*Establishing a system for guidance according toneeds

Place to provide customers with solutions

Realization of cashless processing

Features◎Limited to consulting services, reception counter is

Features◎ Reduction of waiting time, cashless processing,transaction without a slip (less burden of fillingout) are realized
Functions◎ Satto Madoguchi (Quick Counter), deposit
machines at lobby , day depositor, etc.

open until 5:00 p.m. on weekdays◎ Customers’ issues are carefully listened to in a
comfortable environment with a sofa, etc.
◎Holding open seminars for digital signage

Functions◎AGENT System, large digital signage, etc.

 Expansion of introduction of next-generation branches
To be introduced to all branches in Ehime Pref. by the end of fiscal 2020
as a target
Total

March 31, 2020
Results

 Review of branches and ATM locations
Branches
Excessive branches are merged or abolishedaccording to decreases in population andcustomer traffic<Results>
Fiscal 2018: 1 branch
Fiscal 2019: 6 branches

Number of branches

Semiannual

Transaction lobby

September 30, 2020
plan

March 31, 2021
Plan

Mar 2019: Yamagoe Branch
Jul 2019: Midoridai Branch, Omachi Branch
Sep 2019: Mitsukue Branch, Ote Branch
Jan 2020: Chikami Branch, Noborimichi Branch* Utilize a “branch within a branch method”

ATMs
The excessive number of ATMs will be reduced tothe proper number, maintaining cash points forcustomers<Plan>* For fiscal 2020
Number of ATMs: reduction of 72 ATMs located inbranches (out of 644 in total)* In the future, the Bank will make efforts toimprove efficiency for ATMs outside branches,maintaining local cash points

21

[Regional Revitalization Strategy]

Proactive Efforts for Sustainable Regional Growth Support of “regional revitalization” through provision of diverse funding sources
 Establishing a support system immediately as a response to COVID-19
Foundation and Regional Revitalization Businesses
Utilizing Crowdfunding

Measures against COVID-19◆For projects within Ehime Prefecture that reached target amounts, the Bank will ◆ “JUST” Iyogin Business Support Loan J (launched on April 28)
provide amounts equivalent to 1/2 of contract fee (maximum ¥250,000)◆Stabilizing fund management and reducing the payment burden◆37 projects were organized, 30 of which achieved targets (as of April 30, 2020)◆Repayment of principal not required, and multiple-time borrowing available
during initial year
◆ In the case of refinancing with a loan on deeds after the initial year,
Project examples
repayment of the principal can be deferred for a maximum of one year
“Barley Wine” Brewing Project using
Short-term working capital isrye from Ehime Prefecture
secured in the initial year

Business Support Loan
J
Loan on bill

◆A young craft beer brewer who received many
international awards returned to hometown◆Supports brewing business in the firstyear of foundation- Contributed to funding at the time of foundation, advertisement of local
specialties, and development of sales channels -Establishment of Ozu Town Creation Fund◆In February 2020, the Bank and the Organization
for Promoting Urban Development invested¥100 million each, totaling ¥200 million toestablish the fund◆The fund provides financial support tobusinesses which renovate tradesmen’s houses
and old folk houses to operate accommodations,restaurants and others in urban areas in Ozu
City◆The first attempt for financial institutions in
Shikoku region and the largest amount of ¥200
million- Contributed to tourism and town creation
through cooperation among public and private
sectors -Deferral for maximumof one year ispossible even after
shift to long term

Shift to long term

Business Support Loan
J
Loan on deeds
Seven-year repayment
after one-year deferral

Shift to long-term or
repayment can beselected according tofund situation in thesecond year

Lump sum
repayment

Business Support Loan
J
Loan on deeds
Seven-year repayment◆Support team for COVID-19 (established in April 30)◆ Composed of headquarters members with expertise and know-how in businessconsulting◆Provides support widely for management issues in addition to consulting on fundmanagement<Support menus>
Busines matching, ICT consulting, business succession, M&A, financing, primaryindustry support, staffing, manufacturer support, overseas business support

NIPPONIA HOTEL
Ozu Castle Town
Photo provided by
KITA. MANAGEMENT◆“Business Cooperation Agreement for Disaster Countermeasures” concluded with
Development Bank of Japan◆Support is provided to business operators facing a decrease in revenue and otherimpacts due to COVID-19, natural disasters, etc. from March 202022

[Market Strategy]

Strategic Asset Allocation Responding to Volatile Financial Market
 Continue to make diversified investments emphasizing liquidity to build a portfolio with superior risk versus return for responding to themarket environment
 Ensure stable earnings by performing strategic asset allocation responding to market trends while taking risks centering on foreign currency
bonds (with/without forex hedges)

New Investment Policy by Risk Category(Risk category)Gain on Securities Management and Yield◆Gain on securities management (after deduction of procurement cost)(New investment policy)

Yen-denominatedbonds
Foreign bonds (withforex hedges)
Foreign bonds(without forex
hedges)Domestic andoverseas stocks(including
investment trust)NotchangeIncrease

Keep a certain amount as assets inversely correlated withstocks, while in view of interest trends.
In a continuing low interest environment in Japan, keep thebalance as a bond including foreign bonds with hedges.

Increase

Plan investment with forex risk to secure stable profit fromcarry trading (with strategic re-balancing to be implemented).

Decrease

Assess and classify strategic equity holdings in terms ofinvestment and policy, and sell off stocks if the necessity ofholding is not recognizedNotchangeConsider investment to secure stable carrying and portfolio
diversification.

Alternatives, etc.

Gain on securities
management(Hundreds ofMillions of Yen)

Yen-denominated bonds
Domestic and overseas stocks(including investment trust)

Foreign bonds(without forex hedges)(Units: Billions of yen)

Fiscal 2018
Results

Fiscal 2019
Results

Fiscal 2020
Plan

20.8

21.4

20.0

25.1

(Note) Gain on securities management = Interest and dividend income (after procurement
cost deduction) + gain (loss) related to securities (excluding strategic equity holdings)◆Yield(Total) Yield(Domestic
currency) Yield(Foreign
currency) Yield

March 2017 Results

Balance of Securities at Market Value by Risk Category
Foreign bonds (with forex
hedges)Alternatives, etc.

Fiscal 2017
Results

March 2018 Results

March 2020 Plan

March 2019 Results

Portfolio Risk Sensitivity and Duration◆Portfolio risk sensitivity
Impact of fluctuations in interest rates, stock prices, and exchange rates on gain (loss) on valuation of securities

New
investment● Yen-denominated bond portfolio● Foreign bond portfolio (with hedges)● Stock portfolio● Forex portfolio

10BPV¥3.2 billion
10BPV¥2.8 billion
Nikkei Stock Average ¥1,000V¥12.0 billion
USD/JPY ¥10V
¥18.2 billion(*As of March 31,

2020)◆Duration
10 years(Of which,JGBs)

8 years
6 years
4 years
Yen-denominated bonds
Foreign bonds(with forex hedges)

2 years
March 2018
Results

Balance atMarket Value

March 2019
Results

March 2020
Results

September 2020
Plan

March 2021
Plan

0 years

March 2017
Results

March 2018
Results

March 2019
Results

March 2020
Results(Note) Yen-denominated bond durations exclude variable rate government bonds from March 2018.

March 2021
Plan

23

[Market Strategy]
Ensure Earnings from Market Investment and Flexible Foreign Currency Procurement
 Increase loan amounts in growth areas such as overseas ship loans and cross border loans mainly in the Singapore Branch and Financial
Market Business Office Establish a stable system for foreign currency procurement by flexibly utilizing diverse foreign currency procurement methods

Singapore Branch(Hundreds ofMillions of Yen)

(Millions of Yen)

Gain (left axis)
Year-end balance (right axis)

Status of Foreign Currency Investment and Procurement(March 31, 2020)◆Procurement methods according to asset structures are selected◆Consideration is given to profitability through diversification of procurement
methods◆Stable procurement is possible with commitment lines established, even whenmarket conditions rapidly change<Loans + Market Investment (Securities) >Investment

Mainly assets with high liquidity
Loans

Securities, etc.

March 2018
Results

March 2019
Results

March 2020
Results

March 2021
Plan

(Note) March 2021 Plan may be revised due to impact of COVID-19

Procurement

Mainly assets with low liquidity

Short-term procurement

Repo
procurement

Flexibly utilize foreign currency procurement methods responding tomarket conditions

Financial Market Business Office(Hundreds ofMillions of Yen)

(Millions of Yen)

Long-term
procurement

Deposits, etc.

(Note) Investment and procurement of short-term funds are offset

Gain (left axis)<Only Loans>

Year-end balance (right axis)

Investment

Short-term procurement is conducted for substantial short-term loans

Loans

Loans
with multi-currency terms

Procurement

Procurement is conducted with stable funds for long-term loans

Deposits, etc.

Long-term
procurement

Commitment line

Cash flow risk is guaranteed with commitment lines
March 2018
Results

March 2019
Results

March 2020
Results

March 2021
Plan

24

[Personnel Strategy]

Development of Capabilities for More Sophisticated and Specialized
Bank Operations
 Developing and securing human resources with flexible/innovative ideas and positiveness to respond to changes
Creation of Workplaces Where Employees Can
Actively Work

Development of Human Resources with Positiveness Introduction of an “attentive listening function to the AGENT tablet”
A first step for realizing services that only “humans” can provide, by thoroughly
utilizing digital technologies
Shifting Bank Branches from a place for administrative procedures to valuable
places for customers

Providing value

Serving customers using an attentive listening function

Recommendation

Proposal
based onanalysisMoreproposals
based onattentive
listening toissues Introduction of a “full flex time system”
Facilitating an autonomous working style by abolishing core time
7:00

Abolished

11:00
Flexible timeCore time
Time during which all employees
are supposed to work

16:00

20:00
Flexible time Introduction of a “side business system”
A side business system (solopreneur type) is
introduced for the purpose of securing
diverse and excellent human resources withknowledge, skills, and a personal network,etc., gained outside of the Bank
Knowing customers and deepening trust

After administrative
procedures arecompleted with a tablet, Raising initial salaries
Initial salaries are raised for the first time in 12 years to the highest
level among regional banks, and salaries for employees in their 10s and
20s were are also raised to enhance motivation of young employees Introduction of a health improvement tool using a wearable
deviceAttentively listen to
customer issues
according to life stage

Wearable devices are lent to all employees if they choose, as apopulation approach which facilitates autonomous changes inbehavior such as improvement in their lifestyles

25

Efforts for SDGs
 Efforts toward realizing sustainable local communities through the core business are promoted based on“Iyogin Declaration on SDGs”
2. Financial andinformation services

1. Local economy andcommunity Contribution to revitalization of local economy and creationofemployment
through
continual
supportcommercialization of creative business plansfor Expansion of ESG-related loan products Financial support for customers engaged in SDGs
 The actual ESG-related loan amount for fiscal 2019 was¥10,980 million, exceeding the target of ¥10,000 million<Results of IYO BANK Business Plan Contest>(Total for past six contests from 2014 to 2019)

Number of applicants

511<ESG-related loan results (fiscal 2019)>

Number of businesses founded72

Product name

Numberexecuted

Execution amount

SDGs private placement bonds

20¥1,910 million(as of March 31, 2020)

Environment private placement bonds

25¥2,530 million

69 businesses¥95 million“Manabiya” (schoolhouse) hometown
support private placement bonds

55¥3,770 million

19 businesses¥79 million“Chiiki no Mirai (future in the region)”
hometown support private placement
bonds“Kaisha-no-Mirai (Future of theCompany)” welfare support private
placement bonds

8¥1,730 million

13¥1,040 million

121¥10,980 million<Transaction status with businesses founded>
Deposittransaction
Loantransaction

 Continual efforts have been made such as donating welfare

equipment and granting scholarships with a view to improvingsocial welfare and assisting human resource development for the
next generation<Iyo Bank Social Welfare Fund ＞(Public Interest Incorporated Foundation)◎ Cumulative total of ¥655 million has been granted since its
foundation in 1976

Total

26

Efforts for SDGs
3. Strong managementfoundation

5. Environmental
protection

 Appropriate establishment and implementation of a whistle-blowing

system which is an important element of corporate governance Further promotion of compliance management
Registered for the “Whistleblowing Compliance Management System
certification” under the Consumer Affairs Agency

 Promotion of financial contributing toenvironmental preservation
 The Bank received the Bronze Prize inthe "ESG Finance Awards Japan (loancategory )" sponsored by the Ministryof the Environment<Number of arranged project finance for renewable energy>

4. Diversity and work
style reforms(Total as of March 31, 2020)

 Productivity improvement through work style reforms<Change in overtime work under the Labor Standards Act>

13.8
hours

6.6
hours

3.2
hours

January to December
2017

January to December
2018

January to December
2019<Change in paid leave utilization rate>

62.5%

65.2%

67.1%

January to December
2017

January to December
2018

January to December
2019

Solar power generation

12

Biomass generation

3<Number of other environmental loans executed>(Total as of March 31, 2020)

Loans relating to the interest subsidy business implemented
by the Ministry of the Environment

9

Arrangement of syndicated loans for investment funds forgreen bonds

127

Customer Support through the Group’s Collective Strengths
 Exhibit higher value-added consulting functions and respond to various customer needs by fully utilizing the Iyo
Bank Group’s collective strengths

Iyo Bank Group
Shikoku Alliance Securities
Iyogin Computer Service
ICT consulting, consigned information
processing business, softwaredevelopment business

Asset management proposals,
securities businessIyogin Regional Economy Research Center
Human resource consulting, investigation and researchbusiness regarding industry, economics, finance, etc.

Iyogin DC Card

Iyogin Leasing

Credit card business, guarantee
business, etc.

Lease business, auto maintenance lease

The Iyogin Business Service

Iyogin Capital

Cash organization and inspection
business, maintenance and managementbusiness of automated cash facilities

Investment business for stocks andcorporate bonds, etc., managementof investment funds

The Iyogin Credit Guaranty

Iyogin Challenge & Smile

Credit guarantee business for housing
loans and consumer loans

Special subsidiary company underthe ”Act on Employment Promotion etc.
of Persons with Disabilities”
Manufacturing business for novelties,
office supplies, etc.

Iyo Bank

28

Improvement of Customer Support and Bank Operations
with Alliance Framework Responding widely to various customer needs by fully utilizing the alliance framework
Shikoku Alliance(Comprehensive Cooperation Among Four
Regional Banks in Shikoku)◆Utilization of “Shikoku Alliance Securities Co., Ltd.” by three◆A regional trading firm, SHIKOKU BRAND inc., was founded through joint
investment by the four banks (as of April 1)◆Japan’s first regional trading firm founded by multiple banks utilizing thesystem of advanced banking service company◆ Delivers the attractiveness of Shikoku’s resources by carrying out
operations from branding to development of sales channels at one location

banks led to a record high in fiscal 2019
Utilization amount by three banks(hundreds of millions of yen)●Six full-time workers
dispatched from thefour banks
First half
2017

Second half
2017

First half
2018

Second half
2018First half
2019

Second half
2019

TSUBASA Alliance(A wide-area alliance, the largest class forregional banks)◆Over 1,000 cases of business matching concluded (three-year total)
Number of business matching concluded by the four banks (cases)◆ Bank of The Ryukyus, Limited joined in
April 2020
◆New measures are carried out through awide-area alliance among ten banks in total

First half
2017

Second half
2017

First half
2018

Second half
2018First half
2019

Second half
2019

◆Holding “BCP development seminars” in the four Shikoku
prefectures●Last July, “BCP development seminars” in the preparation for natural
disasters and emergencies were held in the four Shikoku prefectures, making
use of the “Shikoku Alliance” framework

29Profit / Loss Forecasts for Fiscal 2020
 Interest and dividend income to increase due to increases in both gain on loan management and gain on securities management
 Fees and commissions to increase due to increases in revenue on assets in custody, etc.
 Net income to record ¥16.0 billion assuming an increase in credit costs in the COVID-19 environment, despite an increase in core businessnet income(Units: Billions of yen)
Fiscal 2019
results
Intermediate
results
Core business grossprofit37.8

76.7

Factors Contributing to Increase / Decrease inCore Business Gross Profit (Fiscal 2020 - Fiscal 2019)

Fiscal 2020 forecast
Intermediate
forecast

39.5(Note) Differences in yield utilize yield
differences with deposits, etc.

(Units: Billions of yen)

YoY
+1.6

Gain on loan
management(¥48.5 billion)

YoY
78.0

+1.2
Interest anddividend
Income(¥68.0 billion)

Of which, interestand dividend income

32.4

66.2

34.0

+1.6

68.0

+1.8

Of which, fees andcommissions

3.7

7.1

3.8

+0.1

8.0

+0.9

Expenses ( -)

25.3

49.9

25.5

+0.2

50.5

+0.6

Of which, personnel
expenses

13.0

25.8

12.8

(0.2)

25.5

(0.3)

Of which,
nonpersonnel
expenses

10.7

21.2

11.0

+0.3

22.0

+0.8

Core business net
income

12.4

26.8

14.0

+1.5

27.5

+0.7

Fees andcommissions(¥8.0 billion)

Credit costs ( -)

3.2

6.9

4.9

+1.7

12.0

+5.1

+0.9

Gain (loss) related tosecurities

4.0

3.5

3.0

(1.1)

6.5

+3.0

Other
(¥2.0 billion)

Ordinary income

14.9

26.5

13.0

(2.0)

23.0

(3.6)

Net (intermediate)
income

10.8

18.5

9.0

(1.8)

16.0

(2.5)

Core businessgross profit(¥78.0 billion)

+1.8

+1.5
Gain onsecurities
management(¥20.5 billion)

+1.0
Other
(-¥1.0 billion)

+1.2

(1.5)

Volume factors +2.1
(Average loan balance up ¥207.1
billion)Yield difference factors, etc. (0.6)(Yield difference down 0.01%)
Volume factors +1.5
(Average securities balance up¥108.6 billion)
Yield difference factors, etc.
(1.0)
Gain on fund cancellation
factors +0.5

(0.7)

Increase in revenue on assets in custody, etc.

Decrease in gain (loss) on foreign exchangetransactions, etc.

30Connecting hearts.
Connecting theregion.

<For inquiries regarding this document> Nakatani, General Planning Division, Iyo Bank TEL:089-941-1141/FAX:089-946-9104
Future business results contained in this document are based on information available as of announcement and assumptions regarding uncertain factors that may
affect future business results. Future business results may differ due to changes in the management environment, etc.

Iyo Bank Fiscal 2019 Earnings Briefing:
Reference Materials

0June 5, 2020

Index of Reference Materials

Overview of the Iyo Bank

Pg

Conditions in Loans and Deposits

Pg◎Iyo Bank Profile

2

12◎Branch Network◎Breakdown of Balance of Loans and Deposits at End of Period
Period3◎Balance and Composition of Loans by Industry

13◎Summary of the Iyo Bank Group

4◎Table of Changes in Borrower Classification

14

Environment Surrounding the Iyo Bank

Pg

Pg

◎Main Industries in Ehime Prefecture

5

Status of Securities Management and Risk
Management◎Manufacturing Industry in Ehime Prefecture◎Market Strategy: Management by Risk Category

15

6◎Industrial Structure of the Setouchi Region◎Status of Integrated Risk Management

16

7◎Economic Indicators of the Setouchi Region I◎Dividend Trends and Shareholder Benefit Program17

8◎Economic Indicators of the Setouchi Region II

9

Status of Ocean Transport-Related Market

Pg◎Shipbuilding Yards in Ehime Prefecture

10◎Outlook of Dry Bulk Market Conditions

11

1

Iyo Bank Profile
Head Office

Matsuyama, Ehime Prefecture

Year of foundation
foundation

March 15, 1878 (The 29th National Bank)

Capital¥20,900 million (Total number of issued shares: 323,775 thousand shares)

Number of
employees

12 Officers, 2,738 employees (excluding temporary staff)
149 domestic (including 8 branches within branches, 7 sub-branches), 1 overseas(Singapore)

Number of
branches

2 overseas representative offices (Shanghai, Hong Kong)
A+: Rating and Investment (R&I)

External
credit ratings (*)

A-: Standard & Poor’s (S&P)
AA: Japan Credit Rating Agency (JCR)* As of May 31, 2020 for external credit ratings

Consolidated equity ratio (BIS standards)

14.85%

Consolidated subsidiaries

16 companies

Consolidated employees (excluding temporary staff)

3,109 persons(As of March 31, 2020)2

Branch Network
 Created the No. 1 regional bank in terms of broad regional coverage, in 13 prefectures centered on the Setouchi region
 Established a strong operating base by expanding outside of Ehime Prefecture from long ago
Timing of opening key branches outside of Ehime
1909: Usuki (Oita); 1919: Nigata (currently Kure,
Hiroshima);
1947: Takamatsu (Kagawa), Kochi, Oita; 1950: Hiroshima;
1952: Osaka; 1954: Tokyo; 1958: Tokushima;
1963: Kitakyushu (Fukuoka); 1964: Okayama;
1965: Nagoya (Aichi); 1966: Kobe (Hyogo);
1971: Fukuoka; 1979: Tokuyama (Yamaguchi)

Number of
branches

Chugoku region:
9 branches

149 domestic
1 overseas
Hyogo

Hiroshima

Okayama
Osaka

Yamaguchi
KagawaFukuoka

Within Ehime:
117 branches
Oita

Kyushu region:
8 branches

Tokushima

Kinki region:
5 branches

Kochi

Shikoku region, excluding
Ehime: 7 branches
11 prefectures in the
Setonaikai region

Tokai region: 1 branchTokyo region:
2 branches
Overseas: 1 branch
Representative offices:
2 offices(As of March 31, 2020)(Note) The Internet branch is included in the number of branches within Ehime Prefecture.

3

Summary of the Iyo Bank Group
Consolidated Earnings Summary(Units: Millions of Yen)

[Consolidated]

Fiscal 2019

Increase/
Decrease

YoY

Fiscal 2018

Consolidatednonconsolidated
Difference (Note)

Ordinary revenue

126,506

220

+0.2%

126,286

20,108

Ordinary income

29,413755+2.6%

28,658

2,832

Profit attributable to owners ofparent18,922395+2.1%

18,527420(Note) The difference between
consolidated andnonconsolidated.

List of Iyo Bank Group Companies
Banking business

Head office and 142 branches,
7 sub-branches, and13 consolidated subsidiaries

The Iyogin Credit Guaranty Company Limited
The Iyogin Business Service Company Limited
Iyogin Capital Company Limited

Iyo Bank

Iyogin Venture Fund Corporation Limited IV
Iyogin Venture Fund Corporation Limited V

Investment business to venture firms

Iyogin Venture Fund Corporation Limited VI

Investment business to venture firms

Iyo Evergreen Sixtiary Industrialization Support Fund Investment Business
Limited Partnership

Investment business to agricultural companies

Iyo Evergreen Agriculture Support Fund Investment Business Limited Partnership II

Investment business to agricultural companies

Iyo Evergreen Business Succession Support Fund Investment Business Limited Partnership

Investment business to business succession targets

Iyogin DC Card Co., Ltd.

Other

1 consolidated
subsidiary
2 consolidated
subsidiaries

3 non-equity method affiliates

Investigation and research business regarding industry, economics,
finance, etc.
Credit card business, guarantee business, etc.

Iyogin Challenge&Smile Co., Ltd.

Manufacturing business for office supplies, etc.

Iyogin Leasing Company Limited

Lease business, etc.
Consigned information processing business, software development
business, etc.

Iyogin Computer Service Company Limited
Shikoku Alliance Securities Co., Ltd.

1 non-consolidated non-equity method subsidiary

Investment business to sixtiary industrialization bodies

Iyo Evergreen Agriculture Support Fund Investment Business Limited Partnership

Iyogin Regional Economy Research Center, Inc.

Leasing business

Credit guarantee business for housing loans and consumer loans, etc.
Cash organization and inspection business, maintenance and managementbusiness of automated cash facilities, etc.
Investment business for stocks and corporate bonds, etc., management ofinvestment funds, etc.
Investment business to venture firms

Iyogin-Ehime University Originated Venture Support Fund Investment Business Limited Partnership

Securities businessIyogin REVIC Investments Co., Ltd.

Investment business in startup companies originating in Ehime
University
Investment fund management business

Shikoku Alliance Capital Co., Ltd.

Investment fund management business

Ozu Community Development Fund Limited Liability Partnership

Investment business to community development business(As of March 31, 2020)

4

Main Industries in Ehime Prefecture Industries with top national share concentrated in each region
 Manufactured product shipments from Ehime Prefecture totaled ¥4.3 trillion (45% of Shikoku) in 2018

Imabari Region

Total national share of Ehime Prefecture

Matsuyama Region
The Matsuyama region has companies withlarge shares in products such as “small
once-through steam boilers,” “farmmachinery,” and “dried bonito shavings.”

Uwajima Region
14.1%(¥68.4 billion)

No. 1 in Japan(Note 2)

Sea culture industry (2018)¥486.1 billion total national
production

29.8%(1,063 ships)

63.2%(¥36.7 billion)

No. 1 in Japan

No. 1 in Japan

Number of ocean-going vessels owned
by domestic ship owners (2018) (Note 1)
3,573 total vessels in Japan (including operators)

Niihama Region(Note 2)

Towels (2017)¥58.0 billion shipped in Japan

Shikokuchuo Region

Manufactured product shipments(2017)

7.2%(¥542.1 billion)¥1,622.5 billion

Approx. 39% of shipments ofmanufactured products in Ehime
As a corporate town under the Sumitomo
Group, nonferrous metal, chemicals, steel,machinery and equipment are concentrated
particularly in the Niihama region.

No. 2 in Japan(Note 2)

Pulp and paper industry (2018)¥7,543.6 billion shipped in Japan(Note 1) Iyogin Regional Economy Research Center, Inc. (IRC) estimates; the ranking in Japan excludes operators.
Source: Prepared based on the Ministry of Economy, Trade and Industry’s “Census of Manufacture 2019” (2018 results, preliminary) and(Note 2) Ranking of Ehime Prefecture“Census of Manufacture 2018” (2017 results) and the Ministry of Agriculture, Forestry and Fisheries’ “total fishery output for 2018.”

5

Manufacturing Industry in Ehime Prefecture
 Ehime Prefecture has manufacturing industries distinctive to each region

Composition of manufactured goods shipment by city (top five cities)
Production
machinery

OthersTransportation
machinery
Coal and oil

Matsuyama¥391.1 billion

OthersGeneralpurpose
machinery

Imabari¥1,009.2 billion
FibersFood products
MetalsCeramics andquarrying

Chemicals
Foodproducts

Fibers
Production machinery
Food productsElectric
machinery
OthersOthersGeneralpurpose
machineryTransportation
machinery
Production
machinery

Saijo¥825.2 billion

OthersNonferrous
metal

Plastics

Plastics
Nonferrous
metal
Niihama¥797.4 billion

Beverages
andtobaccoSteel

Chemicals

Shikokuchuo¥677.3 billion
Pulp, paper, andpaper processing(Note) The shipment amount of “coal and oil” for Imabari City is a concealed value for statistical purposes, thus it is included in “others.”
Source: Prepared by Iyogin Regional Economy Research Center, Inc. (IRC) based on the Ministry of Economy, Trade and Industry’s “Census of Manufacture 2018” (2017 results).

6

Industrial Structure of the Setouchi Region
 The Setonaikai coastal region has established various industrial structures
Automotive, oil
refining, steel

Automotive,
shipbuilding, electronics

Shipbuilding, oceantransport, oil, towels
and garments
Okayama
Shipbuilding, textiles
Hiroshima
KagawaElectronics, farm machinery,
chemicals, tourism

ImabariNiihama
Saijo
Matsuyama

Citrus, food processing

Shikokuchuo
Paper manufacturing
and processing

Ozu
Yawatahama
Oita

Chemicals, electronics,
nonferrous metal,
general machinery

UwajimaSteel, automotive,
electronics, tourism

Culture fishery7Economic Indicators of the Setouchi Region I
Total population(Population
estimate)

Total area

Number of offices(Geospatial Information
Authority of Japan)(Private sector,
excluding public sector)

October 2019
(Persons)
1,339,215
956,347
727,977

January 2020
（ｋ㎡）
5,676
1,877
4,147

2016
(Offices)
63,310

Kochi
Oita

698,029
1,135,434

7,104
6,341

Fukuoka
Yamaguchi

5,103,679
1,358,336

4,987
6,113

35,36652,973Hiroshima
Okayama(B)/(C)2,804,177
1,889,586
16,012,780
12.7%
5,466,190
21,478,970
17.0%

8,480
7,114
51,83713.7%
8,401
60,23815.9%

212,649
61,385127,057
79,870715,23713.4%
214,169
929,406
17.4%

National total (C)126,166,948

377,975

5,340,783

Ehime
KagawaTokushima

Total of the above nine
prefectures (A)(A)/(C)
Hyogo

Total of ten prefectures (B)Total of ten
prefectures
17.0%

Total population(Population
estimate)(October 2019)46,77435,853

Number of employees(Private sector,
excluding public sector)

2016
Fiscal 2017
(Persons)(Billions of yen)
566,761
5,149.8
429,167
3,845.9
301,688
3,156.9

Prefectural grossPrefectural
product growth
income per capita
rate (Real)Fiscal 2017

Fiscal 2017(%)

(Thousands of yen)

＋ 2.6
＋ 1.5
＋ 2.1

2,741
3,018
3,091

279,196483,206

2,494.5
4,510.0

＋ 0.4
＋ 3.5

2,650
2,710

2,236,269
577,791

19,679.2
6,413.1

＋ 2.3
＋ 2.6

2,888
3,261

1,302,074
820,656
6,996,808
12.3%
2,203,102
9,199,910
16.2%

11,790.8
7,813.2
64,853.4
11.8%
21,328.8
86,182.2
15.7%

＋ 0.5
＋ 2.2

3,167
2,839

＋ 2.2

2,966

＋1.9 (note)

3,164 (note)

56,872,826 547,586.0 (note)

Total of ten
prefectures
15.7%

Total of nine
prefectures
12.7%

Total population(Population
estimate)(October 2019)

Prefecture total
production(Nominal)

Gross prefectural
product(Nominal)(Fiscal 2017)

Total of nine
prefectures(excluding Hyogo)
11.8%

Gross prefectural
product(Nominal)(Fiscal 2017)(Note) The figures of national total are those for fiscal 2017 in the Cabinet Office’s “FY2018 Annual Estimates of GDP”
Source: Prepared based on the Statistics Bureau of Japan’s “Population Estimates,” the Geospatial Information Authority of Japan’s “Statistical reports on the land area by prefectures and municipalities in Japan,” theMinistry of Internal Affairs and Communications’ and Ministry of Economy, Trade and Industry’s “Economic Census,” each prefecture’s “Prefectural Accounts” and the Cabinet Office’s “FY2018 Annual Estimates of GDP”

8

Economic Indicators of the Setouchi Region II
Manufactured product Annual wholesale sales
shipments

amountAnnual retailsales amount

2018

2016

2016

(Millions of yen)

(Millions of yen)

(Millions of yen)

Ehime
KagawaTokushima
Kochi

4,264,004
2,761,936
1,853,134
594,417

2,511,264
2,619,010
904,487
874,256

1,528,554
1,169,352
757,121753,371

Oita
Fukuoka
Yamaguchi
Hiroshima
Okayama

4,438,834
10,225,524
6,700,282
10,024,903
8,359,134
49,222,168
14.9%

1,344,689
16,970,699
1,641,957
9,166,762
3,543,971
39,577,095
9.1%(B)/(C)

16,486,978
65,709,146
19.8%

National total (C)331,354,775

Total of the above nine
prefectures (A)(A)/(C)
Hyogo

Total of ten prefectures (B)Total of ten
prefectures
19.8%

Manufactured
product
shipments(2018)

Industrial
production index(annual average)

2018

Number of new
housing starts

2019

Jobs-to-Overall unemployment

applicants ratio

rate (annual average)(annual average)

2019(Homes)
7,756
5,680
4,122
3,310

1,235,257
5,864,032
1,488,895
3,309,726
2,093,111
18,199,419
12.5%

95.4
107.4
105.3
100.3
103.6

6,926
39,8607,311
18,845
13,200107,010
11.8%

1.53
1.57
1.62
2.05
2.02

2.0
2.9
1.8
2.4
2.4

10,219,241
49,796,336
11.4%

5,726,476
23,925,895
16.5%

104.7

31,245
138,255
15.3%

1.43

2.4

436,522,525

145,103,822

104.2

905,123

1.60

2.4

Total of nine
prefectures(excluding Hyogo)
14.9%

Manufactured
product
shipments(2018)

Total of ten
prefectures
15.3%

Number of new
housing starts(2019)(Times)2019

2015＝100
99.0
110.6
102.0
103.1

1.64
1.80
1.50
1.29

(%)

1.6
2.0
1.9
1.9

Total of nine
prefectures(excluding Hyogo)
11.8%

Number of new
housing starts(2019)

Source: Prepared based on the Ministry of Economy, Trade and Industry’s “Census of Manufacture” (preliminary), the Ministry of Internal Affairs and Communications’ and Ministry of Economy, Trade andIndustry’s “Economic Census,” each prefecture’s materials, the Ministry of Land, Infrastructure, Transport and Tourism’s “Survey of Building Construction Work Started,” the Ministry of Health, Labour andWelfare’s “Employment referrals for general workers” and the Statistics Bureau of Japan’s “Labour Force Survey”

9Shipbuilding Yards in Ehime Prefecture
Fujiwara Shipbuilding Co., Ltd.
I-S Shipyard Co., Ltd.
Yamanaka Shipbuilding Co., Ltd.
Namikata Shipbuilding Co., Ltd.
Okashima Zosen Co., Ltd.

Iwagi Zosen Co., Ltd.

Kadota Dock Yard Co., Ltd.
Kurinoura Dockyard Co., Ltd.
Honai Jukogyo Co., Ltd.

Akamatsu Shipbuilding Co., Ltd.
Matsuda Shipbuilding Co., Ltd.
Miyoshi Shipbuilding Co., Ltd.

Hakata Shipbuilding Co., Ltd.
Murakami Hide Shipbuilding Co., Ltd.
Shimanami Shipyard Co., Ltd.

Onishi Shipyard,
Shin Kurushima Dockyard Co., Ltd.

Asakawa Shipbuilding Co., Ltd.
Head Office and Shipyard, Imabari Shipbuilding
Co., Ltd.
Shin Kurushima Hashihama Dockyard Co., Ltd.
Higaki Shipbuilding Co., Ltd.
Yano Shipbuilding Co., Ltd.

Saijo Shipyard, Imabari Shipbuilding Co., Ltd.

15 Groups, 22 Offices

Source: Prepared by the Bank based on “Documents for Shipbuilding Under Jurisdiction” published by the Shikoku Land Transport Office*Shipbuilding facilities currently in operation either constructing or repairing steel vessels of at least 500 gross tons or 50 m or longer

10Outlook of Dry Bulk Market Conditions
Dry Bulk Transport Demand and Supply

Future Market Outlook◆Volume of cargo movement and shipping tonnage◆Baltic Dry Index (BDI) trends

Growth rate of cargo
movement
Growth rate of shipping
tonnage

Maximum value
11,793 (May 2008）
Average from 2000
onward: 2,293

Minimum value
290 (February 2016)
626(March 2020)(Plan)(Plan)

Source: ”Clarkson Research Shipping Review & Outlook” (Spring 2020)”◆Dry bulk transport demand and supply●Shipping tonnage of dry bulk vessels for 2020 is expected to increase by
2.7% (up 238 thousand tons) from 2019. The growth is still at a high level
despite a slowdown from the increase in 2019. The volume of cargo
movement is expected to be limited to a slight 0.5% increase as it has
been weak since the start of the year due to the impact of COVID-19.
●The growth rate of shipping tonnage is expected to come to 1.8% in 2021
as growth of 16.4 million tons is expected. Meanwhile, cargo movement is
expected to grow at 2.4%, which indicates improvement. However, if global
economic activities continue to be sluggish for a longer period of time
due to the impact of COVID-19, this may turn downward.

◆Future market outlook● In early 2020, the capesize spot market remained at a low level
consecutively from the previous year as the pace of iron ore shipments
by major resource companies lost momentum due mainly to the impact ofpoor weather in Brazil.
●Thereafter, affected by the sluggish global economy due to the impact of
COVID-19, the market remains at a low level as severe as that of themaritime depression in 2016.
●In the future, the greatest concern is the eradication of COVID-19. In
China, some plants restarted and shipments to China are on a recovery
trend. However, transport demand may decline again if the stagnation of
economic activities is prolonged in the U.S. and Europe, which are export
destinations. Thus, the outlook is extremely uncertain.

11

Breakdown of Balance of Loans and Deposits at End of Period
1. Breakdown of balance of loans at end of period
March 2016
Total loans
General loans

September

3,911.1

2016
3,936.3

3,677.4

3,705.5

March 2017

September

4,043.3

2017
4,132.4

3,802.3

3,899.0

March 2018

September

4,292.6

2018
4,431.5

4,054.6

4,192.2

March 2019

September

4,550.8

2019
4,617.5

4,310.7

4,387.7(Units: Billions of Yen)
March 2020

Vs. March 2019

4,756.6

205.8

4,522.2

211.5

Corporate loans (incl. overseas, etc.)

2,717.0

2,729.5

2,807.4

2,891.8

3,030.6

3,146.0

3,238.2

3,291.1

3,397.9

159.7

Corporate loans (domestic branches)

2,717.0

2,729.5

2,806.0

2,864.4

2,965.5

3,060.4

3,135.8

3,158.3

3,248.8

113.0

Individual financing

960.3

976.0

994.9

1,007.1

1,024.0

1,046.2

1,072.4

1,096.5

1,124.3

51.9

Housing loans

700.0

710.6

723.8

731.2

742.6

758.2

781.0

805.3

831.8

50.8

Apartment and building loans

173.3

179.1

184.0

186.3

191.3

198.0

202.2

203.1

205.2

3.0

Card loans

28.6

29.2

29.6

30.0

29.6

29.1

28.3

27.9

26.9

(1.4)

Municipal loans, etc.

233.8

230.7

241.0

233.4

238.1

239.2

240.1

229.7

234.3

(5.8)

(Note) The figures shown for apartment and building loans are the total of the "institutional finance" portion.
2. Breakdown of balance of assets in custody such as deposits, etc. at end of period
SeptemberMarch 2016
March 20172016
Total deposits, etc. + assets in custody A
5,676.5
5,644.4
5,789.1
Total deposits, etc.

5,343.1

5,317.8

5,457.0

September
2017
5,765.3
5,424.5

March 2018

September

5,889.0

2018
5,894.2

5,546.0

5,542.2

March 2019

September

6,070.6

2019
6,174.5

5,712.6

5,817.3(Units: Billions of Yen)
March 2020

Vs. March 2019

6,094.1

23.5

5,754.3

41.7

Total deposits

5,018.0

4,892.9

5,006.8

4,987.1

5,099.6

5,057.7

5,247.1

5,288.5

5,265.6

18.5

Individual

3,348.3

3,343.4

3,354.6

3,376.3

3,392.1

3,412.0

3,423.6

3,450.2

3,512.5

88.9

General companies

1,397.6

1,392.1

1,434.4

1,429.1

1,442.0

1,455.4

1,555.4

1,553.7

1,564.4

9.0

204.0

117.1

146.6

135.8

164.4

111.4

126.4

113.2

119.8

(6.6)

Financial

44.0

31.3

36.0

23.1

53.8

37.4

61.0

31.9

40.8

(20.2)

Overseas / offshore

24.1

8.7

35.2

22.6

47.3

41.3

80.5

139.4

28.0

(52.5)

Public

NCD
General companies
PublicGeneral company funds (incl. NCD)

325.1

424.9

450.2

437.4

446.4

484.4

465.5

528.8

488.7

23.2

295.9

293.5

354.7

319.6

375.4

345.1

348.2

390.0

367.0

18.8

29.2

131.4

95.5

117.7

71.0

139.2

117.3

138.7

121.7

4.4

1,693.5

1,685.7

1,789.1

1,748.8

1,817.4

1,800.6

1,903.6

1,943.8

1,931.4

27.8

Public funds (incl. NCD)

233.3

248.5

242.1

253.5

235.4

250.7

243.7

252.0

241.5

(2.2)

Foreign currency deposits (balance)

102.9

115.6

97.1

104.1

118.3

111.0

111.0

101.6

89.3

(21.7)

Individual deposits+individual assets in custody
Individual deposits
Individual assets in custody

3,665.6

3,654.9

3,673.2

3,703.7

3,722.5

3,751.4

3,769.1

3,795.6

3,841.4

72.3

3,348.3

3,343.4

3,354.6

3,376.3

3,392.1

3,412.0

3,423.6

3,450.2

3,512.5

88.9

317.2

311.5

318.6

327.3

330.4

339.3

345.4

345.4

328.8

(16.6)(18.2)<Assets in custody (Term-end basis)>
333.4

326.5

332.0

340.7

343.0

351.9

357.9

357.1

339.7

JGBs

40.1

32.5

27.2

25.0

25.4

24.0

22.4

20.3

19.8

(2.6)

Investment trusts

93.5

85.9

85.1

81.0

71.6

71.5

68.6

66.7

53.8

(14.8)(1.5)

Assets in custody at the Bank (excl. deposits, etc.) B

184.9

187.8

191.5

202.1

206.2

210.8

215.7

216.4

214.2

Financial product intermediary

Single premium policies

14.9

20.3

28.3

32.5

39.7

45.5

51.0

53.6

51.7

0.7

Shikoku Alliance Securities balance Ｃ

131.5

140.1

163.7

192.7

201.4

208.3

199.5

207.8

202.4

2.9

Balance of Group's assets in custodyＢ+Ｃ＝Ｄ

464.9

466.6

495.8

533.5

544.4

560.3

557.4

565.0

542.2

Assets in custody composition (Ｄ/Ａ+Ｃ)

8.0%

8.1%

8.3%

9.0%

8.9%

9.2%

8.9%

8.9%

8.6%

(15.3)－(Note) The figures shown for foreign currency deposits (balance) are the total excluding overseas / offshore.

12Balance and Composition of Loans by Industry
 There are no major changes in the composition of loans by industry, and the loans are well-balanced(Units: Billions of Yen, %)March 2016

March 2017

Composition

Manufacturing

March 2018

Composition

March 2019

Composition

Vs. March 2019

March 2020

Composition

Composition

Balance

Rat e of balanceincrease/decrease

593.8

15.2

583.0

14.4

611.7

14.5

643.0

14.5

650.5

14.1

+ 7.5

+ 1.2%

Agricultural

2.8

0.1

2.8

0.1

2.6

0.1

2.7

0.1

2.6

0.1

(0.1)

(3.7%)

Forestry

0.1

0.0

0.2

0.0

0.3

0.0

0.3

0.0

0.4

0.0

+ 0.1

+ 33.3%

Fishing

12.6

0.3

13.8

0.3

12.1

0.3

11.3

0.3

11.9

0.3

+ 0.6

+ 5.3%

Mining

9.0

0.2

8.8

0.2

8.7

0.2

8.6

0.2

7.1

0.2

(1.5)

(17.4%)

116.0

3.0

112.6

2.8

112.9

2.7

116.3

2.6

116.0

2.5

(0.3)

(0.3%)

Electricity, gas, heat provision, water

92.9

2.4

92.9

2.3

108.1

2.6

134.0

3.0

154.4

3.4

+ 20.4+ 15.2%

Information communications

28.1

0.7

28.8

0.7

21.8

0.5

22.0

0.5

18.9

0.4

(3.1)

(14.1%)

615.2

15.7

629.9

15.6

679.7

16.1

717.9

16.1

769.7

16.7

+ 51.8+ 7.2%

511.3

13.1

510.3

12.6

542.1

12.8

580.3

13.0

639.3

13.9

+ 59.0+ 10.2%Wholesale and retail

466.7

11.9

471.2

11.7

469.4

11.1

511.6

11.5

504.3

10.9

(7.3)

(1.4%)

Finance and insurance

170.5

4.4

192.7

4.8

205.7

4.9

200.2

4.5

185.3

4.0

(14.9)(7.4%)

Real estate

198.0

5.1

221.4

5.5

255.6

6.0

270.5

6.1

299.8

6.5

+ 29.3+ 10.8%

Various services

382.5

9.8

412.7

10.2

435.1

10.3

438.5

9.9

467.6

10.1

+ 29.1+ 6.6%

169.6

4.3

181.3

4.5

193.7

4.6

192.2

4.3

197.2

4.3

+ 5.0

+ 2.6%

Regional public entities

232.9

6.0

240.2

5.9

232.7

5.5

234.8

5.3

230.0

5.0

(4.8)

(2.0%)

Other

989.3

25.3

1,030.8

25.5

1,071.2

25.3

1,136.1

25.5

1,188.5

25.8+ 52.4+ 4.6%

3,911.1

100.0

4,041.8

100.0

4,227.5

100.0

4,448.4

100.0

4,607.5

100.0+ 159.1+ 3.6%

Construction

Transportation
Of which, ocean transport

Of which, medical-related

Total(For domestic branches, excludes special international transactions account)*“Goods rental” is included in “real estate” from the six months ended September 30, 2009.
“Real estate” for the year ended March 31, 2020, excluding “goods rental,” was ¥277.8 billion, which is an increase of ¥26.1 billion (+10.4%) compared with the year ended
March 31, 2019. In addition, “other” includes “home renting by individuals” (¥214.1 billion for the year ended March 31, 2020).
*As “ocean transport” displays balances applicable to the “ocean transport industry” according to Japan Standard Industrial Classification, this figure does not match “Loan13balance for the maritime industry” on page 17 of the Earnings Briefing.

Table of Changes in Borrower Classification
 Activities for supporting enhancement of corporate value are conducted through business feasibility assessments of customers
 Corporate revitalization support is provided mainly by the Corporate Consulting Division
Use of various types of revitalization schemes, such as reconstruction funds and the SME Business Rehabilitation Support Co-operative, as
well as solution sales[Changes in borrower classification for business borrowers] (one year)
Rate of degradation

March 31, 2020

Upper row: Number of borrowers
Lower row: Credit amount

Total(Hundreds of millions of yen)NormalBorrowers requiring

Borrowers under strict

Borrowers at risk of

Substantiallyborrowers

close monitoring

observation

bankruptcy

bankrupt borrowers

to at risk ofBankrupt
borrowers

bankruptcy or

Improvement Degradation

below

19,64017,742

17,166

506

20

31

8

11

0.25%

576

33,47332,87132,095

748

7

16

1

4

0.06%

776

1,940

1,836

391

1,374

24

45

1

1

2.42%

391

71

3,634

3,616

585

2,885

36

110

0

0

3.04%

585

147

Borrowers
under strict
observation

139

123

12

11

84

9

6

1

11.51%

23

16

267

249

34

24

169

22

1

0

8.53%

57

23

Borrwers at
risk ofbankruptcy

284

255

14

13

10

210

6

2

37

8

454

414

5

8

24

368

4

4

38

8

Substantiallybankrupt
borrowers

98

71

0

0

0

0

66

5

0

5

37

36

0

0

0

0

12

23

0

23

41

17

0

0

0

0

0

17

0

19

11

0

0

0

0

0

11

0

22,142

20,044

17,583

1,904

138

295

87

37

451

676

37,88437,19632,718

3,664

237

516

18

42

679

976

Normalborrowers
Borrowers
requiringclose
monitoring

March 31, 2019

Bankrupt
borrowers(Note 1) The chart displays the changes in the borrower classification from March 31, 2019 to March 31, 2020.
(Note 2) The balances after changes are the balances after write-offs as of March 31, 2020.

14

Market Strategy: Management by Risk Category(Units: Billions of yen)
Year ended March 31, 2020
Risk Category(*1)

Yen-denominated bonds
Of which, JGBs
Of which, inflation-indexed
JGBs

Book
balance

Evaluation
gain / loss

MarketbalanceComposition

Vs. March
2019

Total

Interest and dividend income

profit /Interest
received

loss (*2)(*3)

Procurement

Profit / loss frompurchase, sale,and amortization

cost

Increase/decrease on gain /Source of main revenue and profit

loss on evaluation
vs. March 2019

746.7

+11.0

757.6

44.1% (10.0%)

(3.3)

6.6

6.6

0.0

0.2

(10.1) Difference in long and short term interest on yen interest

330.6

+4.4

335.0

19.5%

(8.5%)

(2.9)

3.3

3.3

0.0

0.2

(6.5)

79.7

(1.3)

78.4

4.6%

+0.1%

(1.9)

(0.3)

(0.3)

0.0

0.0

(1.6) Rise in expected inflation rate

Foreign currency bonds (with hedges)

333.4

+29.1

362.5

21.1%

+5.3%

28.7

3.8

6.8

3.0

0.9

+24.0 Difference in long and short term interest on overseas interest

Foreign currency bonds (without hedges)

181.7

+10.9

192.7

11.2%

+8.2%

13.8

2.5

2.5

0.0

0.4

+10.9 Gain on foreign exchange / interest revenue

Domestic and overseas stocks (incl. stock trusts)

116.0+181.9

297.9

17.4%

(3.3%)

(3.1)

5.7

5.7

0.0

1.5

(10.3) Growth in domestic companies centered on transaction partners

Alternatives, etc.

103.8

+1.8

105.6

6.2%

(0.3%)

(5.3)

2.0

2.0

0.0

0.5

(7.9)

Hedge funds

33.2

(0.9)

32.4

1.9%

(0.5%)

(0.9)

(0.1)

(0.1)

0.0

0.0

(0.8) Strategic diversification by external consigned management

Real estate-related

55.0

+4.3

59.3

3.5%

+0.3%

(3.0)

2.2

2.2

0.0

0.5

(5.7) Revenue from real estate rentals and profit from price increase

Private equity

8.3

+0.0

8.3

0.5%

+0.1%

(0.1)

(0.0)

(0.0)

0.0

0.0

(0.1) Rise in enterprise value due to management improvement of unlisted stocks, etc.

Emerging stocks

4.2

(1.6)

2.6

0.2%

(0.1%)

(1.4)

0.0

0.0

0.0

0.0

(1.4) Growth and foreign exchange gains in emerging markets

Other (corporate management, etc.)

3.0

+0.0

3.0

0.2%

(0.0%)

(0.0)

(0.0)

(0.0)

0.0

0.0

+0.0 Seeking short-term profits due to market views

1,481.6+234.7

1,716.3

100.0%

-

30.8

20.7

23.7

3.0

3.5

+6.6

Total

*1 Assets invested by the Financial Market Division calculated based on primary risk, regardless of accounting item (on the basis of including money held in trust, unsecured repurchase agreement, etc.)*2 "Total profit / loss" and "interest and dividend income" eliminate three-month LIBOR interest, etc., as procurement costs, but this differs from actual procurement costs.
*3 Interest received includes gain / loss on cancellation of funds, etc., recorded in asset management revenue.

<Of yen-denominated bonds and foreign currency bonds, investment conditions in credit risk and securitized products, etc.>
Credit risk
Securitized products
Subtotal

233.7

(0.7)

233.0

13.6%

+0.4%

(0.7)

2.2

3.0

0.9

0.2

(3.0) Business continuity of domestic and foreign companies

4.1

+0.0

4.1

0.2%

(0.1%)

(0.0)

0.0

0.0

0.0

0.0

(0.0) Loan interest revenue from housing loans, etc.

237.8

(0.6)

237.2

13.8%

+0.3%

(0.7)

2.2

3.0

0.9

0.2

(3.0)

15

Status of Integrated Risk Management(Units:Hundreds ofmillions of yen)

[Status of Integrated Risk Management (March 31, 2020)]○ Operational risk
・Calculated by The Standardized Approach○ Market risk (holding period of six months, 99.9%)

BufferCommon stock, etc.
Tier 1(Nonconsolidated)

・Take into account correlation between
different risks
・Core deposits: Use an internal model・Stock VaR: Includes strategic equity
holdings

Operationalrisk

Not utilized○ Credit risk (holding period of one year, 99.9%)
・Business loans, etc.: Monte Carlo method
・Loans for individuals: Analysis method

Market risk

Credit risk
Risk capital(¥591.8 billion)

Risk limit
First half of fiscal
2020(¥335.0 billion)

Risk limit
Second half of fiscal
2019(¥305.0 billion)

Risk amountMarch 2020
results(¥216.1 billion)

16

Dividend Trends and Shareholder Benefit Program
Dividend Trends

Shareholder Benefit Program◆Strive to maintain the business base and stable dividends bystrengthening the financial position with internal reserves(Yen)
Ordinary
dividend

Shareholders holding 100 or more
but less than 1,000 shares◆Grant shareholder benefits(Imabari towel)

Commemorative
dividend* Image for illustrative purposes.

Shareholders holding 1,000 sharesor moreSelect one of the following three choices◆Goods made in Ehime Prefecture and special
goods jointly designed by the TSUBASA Alliance◆Preferential time deposit accounts forshareholders◆Donation to the Japanese Red Cross Society

March
2011

March
2012

March
2013

March
2014

March
2015

March
2016

March
2017

March
2018

March
2019

March
2020

March
2021
(Plan)

17