IYO BANK Integrated Report 2022

Integrated
reportIntegrated Report 2022

Issued: July 2022
Edited: The Iyo Bank, Ltd.
Public Relations & CSR Office, General Planning Division
1, Minami-Horibata-cho, Matsuyama 790-8514
TEL: 089-907-1011

Contents

Corporate Credo

Introduction

02

Corporate Credo

About Iyo Bank

03

History of Iyo Bank

05

Sources of Competitive Advantages (Strengths)

07

Earnings Overview

09

Financial and Non-Financial Highlights of the Group

Holding Company

11

Transition to Holding Company Structure

Letters from theManagement

13

Management Commitment

19

Message from Officer in charge of FinanceValue Creation Story 21

Business Strategy
and Plan for
Realizing the LongTerm Vision

Sustainability

Corporate Data

Meaning of Existence
Creating a bright and prosperous future for the region
Iyo Bank creates brightness and prosperity for people’s lives and businesses as acomprehensive local financial institution and establish a rich future together
with the region.

Management StanceOffering the best service and being worthy of people’s trust
Iyo Bank wholeheartedly provides comprehensive financial and information
services of cutting-edge quality, with the aim of creating a bank that meets the
expectations and is worthy of people’s trust.

Ideal State in the Long Term (Long-Term Vision)

23

Value Creation Process

25

Striving for Improving CX

27Overview and Progress of Medium-Term Management Plan

29

Corporate Related Strategies

33

Personal Related Strategies

37

Ship Related Strategies

39

Market Investment Strategies

41

BPR Strategies

43

Plan for IT

44

Plan for Branches

45

Plan for HR Development

47

Response to Climate Change

51

Initiatives for Sustainable Growth (Environment)

53

Initiatives for Sustainable Growth (Society)59

Strong Management Foundation (Governance)

63

Strong Management Foundation (Governance) Board of
Directors and Executive Officers

65

Strong Management Foundation (Governance) Risk
Management

67

Strong Management Foundation (Governance)
Compliance69

Strong Management Foundation (Governance) Message
from an Outside Director

71

Organizational Chart72

Corporate Profile
Composition of Shareholders
Major Shareholders

Code of Conduct
Rendering our best service with gratitude in our hearts
Iyo Bank works unceasingly to be innovative, starting with gratitude in ourhearts towards our customers, and act resolutely with joy and purpose.

How the Integrated Report is positioned among the disclosure documents
Financial Information

More
concise

Non-Financial Information

Iyo Bank Report (Interim Digest)
Notice of Convocation of General Meetings of Shareholders
IR Earnings Briefing Materials

Integrated Report
Culture CodeIntegrated Report (Data)
Earnings Reports, Securities Reports, etc.

Reports regarding Corporate
Governance ReportMoredetailed

Editing Policy
The Iyo Bank has hereby prepared the Iyo Bank Integrated Report 2022. By referencing the “International Integrated Reporting Framework”
presented by the International Integrated Reporting Council (IIRC) and the Ministry of Economy, Trade and Industry’s “Guidance forCollaborative Value Creation,” this Integrated Report has comprehensively compiled a framework for sustainable value creation by the Bankand local communities, through linking non-financial information such as the management credo, strategies, and ESG (environmental,social, and governance) information to financial information. In addition, the report was prepared through repeated cross-organizational
discussions with the management team, which includes the President and Outside Directors, as well as with the responsible departments.
This Integrated Report also serves as part of the disclosure documents (explanatory documents about the business and financial
condition of a bank) under Article 21 of the Banking Act. Although this Integrated Report contains statements regarding future performance,such statements are not guarantees of future performance and may differ from the figures of actual results due to changes in the
management environment and other factors.

Head Office of The Iyo Bank

1

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 20222

About Iyo Bank

History of Iyo Bank(Billions of Yen)

(Billionsof
ofDeposits,
Yen)
Balance
etc.

6,000

6,000

5,000

5,000

4,000

4,000

3,000

3,000

2,000

2,000

Matsuyama
Gojuni Bank

Imabari Yuzu
Co., Ltd.

ImabariCommercial
Bank

Iyo Bank

Toho MutualBank

Iyo Bank

Iyo Bank

Fuji Savings
CreditUnion

6,654.1

5,068.8

Value Creation Story

7,000

The 52nd
National
Bank

Allied Iyo
BankThe monument for the 29th National Bank

1,000

1,000

1943

0

1950

1960

1970

1980

1990

2000

2010

2022/3

History of Iyo Bank Group
1878
Established “The 29th
National Bank”
Established “The 52nd
National Bank”

1934
Established “The Yoshu Bank”(The 29th National Bank merged with the
Yawatahama Commercial Bank and the Ozu
Bank)

1951
Name changed to “Iyo Bank”

1985
Established “Iyogin Capital (currently
Iyogin Capital)

1975
Established “Iyo Computer Service(currently Iyogin Computer Service)”

1988
Established “Iyogin Regional Economy
Research Center”
Established “Iyogin DC Card”

1978
Established “Iyo Credit Guaranty(currently Iyogin Credit Guaranty)”

1992
Merged with Toho Mutual Bank
1994
Opened “Shanghai Representative Office”

2016Entered into “the TSUBASA Alliance”
Entered into “Shikoku Alliance”
Opened “Singapore Branch”

2012Established “Iyogin Securities (currently
Shikoku Alliance Securities)”
Opened “Singapore Representative
Office”
Opened “Internet Branch”

2018
140th anniversary of foundation
Established “Iyogin Challenge & Smile”

1989Consumption tax was
introduced

1995
The Great Hanshin-Awaji Earthquake
occurred2013
The Bank of Japan introduced “quantitativeand qualitative monetary easing”

2005The full deposit guarantee was removed

1991
Economic bubble collapsed

2008
Global financial crisis occurred

2016
The Bank of Japan introduced negativeinterest rate policy

1990
Name changed to “Iyo Bank”

1979Established “The Iyogin Business Service(currently The Iyogin Business Service)

Sustainability

1941
“Allied Iyo Bank” was established(The Imabari Commercial Bank merged with
Matsuyama Gojuni Bank and the Yoshu Bank)

1974
Established “Iyogin General Leasing(currently Iyogin Leasing)”

Business Strategy and Plan for
Realizing the Long-Term Vision0

Letters from theManagement

7,000

Loan Balance of Loans

The Yoshu
Bank

Holding Company

The Bank was established in Kawanoishi, Honai-cho, Yawatahama-shi on March 15, 1878 as Ehime
Prefecture’s first national bank, the 29th National Bank. Since then, with the mission of developing ourcustomers and local communities, we have steadily built up our history by overcoming numerous trials anddifficulties brought about by the times. Based on our Corporate Credo of “creating a bright and prosperous
future for the region,” we will continue to work together as one to “realize a sustainable and prosperous
local community” as a comprehensive financial institution in your hometown.

The 29th
National
Bank

About Iyo Bank

— History of Iyo Bank —Main Economic and Social Trends

1889
The Meiji Constitution(Constitution of the Empireof Japan) was promulgated
1928
The Banking Act was enforced

3

IYO BANK Integrated Report 2022

1949
Fixed exchange rate (1 US dollar = 360 yen) was
introduced

1973Transition to floating exchange rates
1973 oil crisis

1985
The Plaza Accord

2011
The Great East Japan Earthquake occurred20182018 Japan Devastating Floods occurred in July

Corporate Data

1873
Ehime Prefecture was established
The First National Bank
was established

2020
COVID-19 pandemic broke out

IYO BANK Integrated Report 2022

4

About Iyo Bank

Strength13Comprehensive Ability of the GroupT he Iyogin Business
ServiceBusiness
supportBanking

Lease

Creditguarantee

VenturecapitalIyogin Leasing

61.5%(1,199 ships)(¥32.9 billion)

Toyo

Nanyo

13.4%

7.4%

(¥58.6 billion)(¥570.2 billion)

Niihama and Saijo Region*2

No. 1 in JapanSea culture industry (2020)¥436.8 billion total national
production

Manufactured product shipments (2019)¥1,644.7 billion
Approx. 38.2% of shipments ofmanufactured products in Ehime(including 2 Iyogin SMART
branches)(including 22 branches withinbranches)

1 overseas

Oita

Kyushu region:
8 branches

Number of employees with official qualifications

Osaka
KagawaTokushima

Ehime

Diverse Human Resources with Expertise

Kinki region:
5 branches

Kochi

Shikoku region, excluding
Ehime: 7 branches

11 prefectures in the
Setonaikai region

Tokai region: 1 branchTokyo region: 2 branches
Singapore: 1 branch
Representative offices: 2
offices

The Iyo Bank Group considers human resources capabilities as
the source of competitiveness edge, based on theunderstanding that there is no excessive investment in humanresource development. The Group has thus strived to develop
human resources with a high level of expertise and a diverse
range of skills.
To improve customer experience (CX), we aim to be anorganization that can create and offer diverse types of value by
developing human resources who play an active role in each
person’s area of expertise. We therefore create a proactive
learning environment and support diversified career paths.

(As of March 31, 2022)

Qualification equivalent to 1st
grade financial planner*
Small and Medium EnterpriseManagement Consultants
MBA
Securities Analysts
Real Estate Transaction Agents
Fundamental Information
Technology Engineers
Applied Information Technology
Engineers

165
77
2
71
189

Corporate Data

151 domestic

Fukuoka4

Hyogo

Hiroshima

Within Ehime:
119 branches

Source: Prepared based on the Ministry of
Economy, Trade and Industry’s “Census of
Manufacture 2020” (2019 results) and theMinistry of Agriculture, Forestry and
Fisheries’ “total fishery output for 2019.”

Sustainability

Number of branches

Strength
Yamaguchi

Pulp and paper industry (2019)¥7,687.9 billion shipped in Japan*1 Iyogin Regional Economy Research Center, Inc. (IRC) estimates; the ranking in Japan excludes operators.
*2 Ranking of Ehime Prefecture

Chugoku region:
9 branches
Okayama

No. 2 in Japan*2

Business Strategy and Plan for
Realizing the Long-Term Vision

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)

Uma (Shikokuchuo) Region

Value Creation Story

Number of ocean-going vessels owned
Towels (2019)by domestic ship owners¥53.6 billion shipped in Japan(As of September 2020)*1
3,663 total vessels in Japan (including operators)

As a corporate town under the Sumitomo Group, nonferrous
metal, chemicals, steel, machinery and equipment areconcentrated particularly in the Niihama region.

Timing of opening key branches
outside of Ehime

No. 1 in Japan*2

No. 1 in Japan

Chuyo

Uwajima Region

32.7%
*2

Strong Operating Base and Broad Regional Coverage

Iyo Bank boasts the top amount of funds among regional banks in Shikoku. Headquartered in Ehime Prefecture, where the Bank has
a 35.7% share in loans and a 53.3% share in deposits, we have established a strong operating base as the top bank in the region.
We have also created the No. 1 bank network among regional banks in terms of broad regional coverage, in 13 prefectures
centered on the Setouchi region. The Bank has not only a strong operating base in Japan but also a branch in Singapore andrepresentative offices in Hong Kong and Shanghai, building a structure that can support its customers.
To use our management resources efficiently while maintaining local contact points, we have been conducting a review of branchlocations, including reorganization of branches. Simultaneously, we offer optimal services for our customers by developing newchannels using digital technologies, in order to diversify customer contact points and improve convenience.

Imabari Region

Matsuyama Region
The Matsuyama region has companies withlarge shares in products such as small oncethrough steam boilers, farm machinery, anddried bonito shavings.

Iyogin DC Card

…Total national share of Ehime Prefecture

Industries with top national shares concentrated in each region
Manufactured product shipments from Ehime Prefecture
totaled ¥4.3 trillion (45% of Shikoku) in 2019

The Iyogin Credit Guaranty

Credit cards

Iyogin Capital

2

Securities

Iyo Bank Group

Iyogin Regional Economy
Think tankResearch Center

Strength

Shikoku Alliance Securities

Ehime Prefecture can be roughly divided into three regions: Toyo, Chuyo, and Nanyo.
Toyo serves as a top-class engine of the secondary industry in Japan. Imabari, a maritime city known for shipbuilding and oceantransport, is also the top national producer of towels. Furthermore, a range of industrial cities are found, including Niihama andSaijo, where the Sumitomo Group and other large companies and a number of relevant small- and medium-sized manufacturers in
the machinery, metal, and other industries are located, and Shikokuchuo, one of the best-known places in Japan for paper
manufacturing and processing.
Chuyo is home to a variety of industries, mainly in the tertiary sector. The prefectural capital Matsuyama is known for tourism,
represented by Dogo Onsen; commerce; and the service industry. Also located in the area are factories of large manufacturers, aswell as large companies that enjoy high shares in small once-through steam boilers, farm machinery, and dried bonito shavings.
Nanyo is focused on the primary industry. Yawatahama is widely known as one of the largest citrus fruit producers in Japan.
Uwajima and Ainan are known for the sea culture industry, producing cultured sea breams, yellowtails, and pearls, as well as for the
manufacturing of food products, especially processed marine products.

Letters from theManagement

Iyogin Challenge &Smile

Systemdevelopment

Diverse Industrial Structures

Holding Company

The Iyo Bank Group consists of 10 companies, which handle banking, as well as securities, leases, credit guarantee, credit cards,
venture capital operations, system development, think tank operations, business support, and other services.
Taking advantage of each company’s functions, the Group operates in a variety of fields and businesses and satisfies diverse
needs of customers in the region.
Iyo Bank
Iyogin Computer Service

Strength

About Iyo Bank

Sources of Competitive Advantages (Strengths)

79
29*1st grade Certified Skilled Professional of Financial Planning, CFP

5

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

6

About Iyo Bank

Business Results for Fiscal 2021

About Iyo Bank

Earnings Overview
Business Performance Forecasts for Fiscal 2022
(Units: Billions of yen)Nonconsolidated
results

Fiscal 2021

80.5

84.5

+4.0

71.3

72.4

+1.1

6.2

6.2

+0.0

3.0

5.7

+2.7

Expenses (-)

49.6

49.0

(0.6)

Core business net income

30.9

35.4

+4.5

Credit costs (-)

12.5

4.2

(8.3)

Core business gross profit
Of which, interest anddividend income
Of which, fees andcommissions
Of which, otheroperating income

Gain (loss) related tosecurities

3.7

1.1

(2.6)

Ordinary income

23.7

35.2

+11.5

16.6

24.6

+8.0

Ordinary income

26.1

38.2

+12.1

Profit attributable toowners of parent

18.0

26.4

+8.4

Net income

The Bank expects an extremely challenging businessenvironment for fiscal 2022, with a still uncertain outlook
about when the COVID-19 pandemic subsides. In addition,
full-fledged interest rate rises in the United States,
expected to happen due to continuing high inflation rates,
would affect the Bank’s ship finance business, as well as
foreign bonds and other foreign-denominated assets.
Without any measures, a significant decrease in profit
is expected due to an increase in foreign currency
procurement costs following rises in US interest rates.
Under such circumstances, the Banks aims for corebusiness gross profit of ¥79.5 billion, down ¥5.0 billion
year on year, and net income of ¥21.5 billion, down ¥3.1
billion year on year. We intend to achieve this byreinforcing loan balance and increasing yields through loanbalance increase and foreign bond switching, which will
underpin the top line figures.
We plan to continue to secure a high level of profit,
while expecting an unavoidable year-on-year profit decline.

YoY

Consolidated results

Nonconsolidated
forecasts

Fiscal 2022
forecasts

YoY

Core business gross profit

79.5

(5.0)

Expenses (-)

49.0

+0.0

Core business net income

30.5

(4.9)

Credit costs (-)

5.0

+0.8

Gain (loss) related tosecurities

3.5

+2.4

Ordinary income

32.0

(3.2)

Net income

21.5

(3.1)

Ordinary income

34.5

(3.7)

Profit attributable toowners of parent

23.0

(3.4)

Consolidated
forecasts

Letters from theManagement

Fiscal 2020

Holding Company
Value Creation Story

In fiscal 2021, Iyo Bank continued to operate under
uncertainties surrounding the business environment, with
COVID-19 spreading and overseas interest rates, especiallyin the United States, starting to rise. Under suchcircumstances, the bank branches division actively engaged
in consulting sales activities based on customer needs,
mainly in the Bank’s stronghold Setouchi region. The
securities division took the opportunity of interest rate riseto switch foreign bonds in the portfolio, while hedging
risks through derivative transactions. Such efforts to secure
profit resulted in core business gross profit of ¥84.5 billion,up ¥4.0 billion year on year.
Credit costs for fiscal 2021 stood at ¥4.2 billion, down
¥8.3 billion year on year, while those for fiscal 2020 totaled¥12.5 billion mainly due to the recording of provision for
COVID-19 measures. The decrease shows the absence offull-fledged increase in credit costs attributable to the
COVID-19 pandemic.
As a result, net income amounted to ¥24.6 billion, up¥8.0 billion year on year. This was mainly due to theincrease in core business gross profit and the decrease incredit costs. Profit increased at each profit stage, and ahigh level of profit was secured.

(Units: Billions of yen)

Reference: Long-term transition of profit
Consolidated net income (left axis)(Units: Billions of yen)Core business gross profit (right axis)

90

25

85

20

80

15

75

10

70

0

0
2000

7

IYO BANK Integrated Report 2022

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Corporate Data

5

Sustainability

30

Business Strategy and Plan for
Realizing the Long-Term Vision(Units: Billions of yen)2021 (FY)IYO BANK Integrated Report 20228About Iyo Bank
About Iyo Bank

Financial and Non-Financial
Highlights of the Group
Financial Highlights

Non-financial Highlights

Balance of Loans

Consolidated Core
Business Gross Profit(Units: Billions of yen)

(Units: Billions of yen)

(Units: Billions of yen)

6,522.6

6,654.1

5,754.3

4,999.3

4,756.6

5,068.8

82.8

86.6

Ratio of Employees
Taking Childcare Leave

90.4

Overtime Work underLabor Standards Act

Female Manager Ratio(Units: Hours)(Units: %)18.0

Female100.0%

16.3

14.9

17.6

20.0

Holding Company

Balance of Deposits,
etc.

Male

4.2

4.4

4.0

January to
December
2020

January to
December
2021

January to
December2022(Target)(March 2022)
3.2
March 2020

March 2021

March 2022

March 2020

March 2021

March 2022

Consolidated Core OHR(Units: Billions of yen)

(Units: %)Fiscal 2020

Consolidated ROE(shareholders’ equity basis)

60.19

57.05

4.16

January to
December
2019

Number of students
who attended Financial
Education Class(Units: Persons)
Number of attendees(cumulative)
Number of attendees(single year)

5.34
63.36

18.0

Independent Outside
Directors Ratio(Units: %)

26.4
18.9

January to
December2015

Fiscal 2021

14,902

3.82

19,05817,55815,905

March
2016

1,653

12,592

Fiscal 2021

March 2021

March 2022

Evaluation Gain on
Securities
307.8(Units: %)

271.1

234.4

March 2020

9

14.58

March 2021

IYO BANK Integrated Report 2022

AA

14.28

AMarch 2020

March 2021

March 2022

March
2022

March
2023
(Targets)

Fiscal
2013

7,589

6,018

7,700

1,401

1,337

1,266

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2030(Targets)

Number of businessfeasibility assessments

Subsidy Amount forEnvironmental andCultural Organizations(Units: Assessments)(Units: Cases)(Units: Ten thousands of yen) Cumulative

Number of assessments(cumulative)
Number of assessments(single year)

6,257

7,057

146 145
110

232

4,468

March
2017

Environmental

281
55

298

312

60

65

37

49
391

Cultural

126

5,393

A+
Standard & Poor’s (S&P)

March
2021

-50

Number of cases for
Business Succession
and M&As Support

Rating and Investment (R&I)

14.32

March 2022

Credit Ratings

March
2020

6,296

1,139

925

864

800

March
2020

March
2021

March
2022

March
2023
(Targets)

Fiscal2015

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2022(Target)

195

225

238

247

March
2016

March
2020

March
2021

March
2022

IYO BANK Integrated Report 2022

Corporate Data

14.73

March
2016

March 2022

Japan Credit Rating Agency (JCR)

Consolidated Gross Equity Ratio

14.65

March 2021

(Units: Billions of yen)

Consolidated Tier 1 ratio for common stock, etc.
Tier 1 ratio

14.85

March 2020

-29

Sustainability

Consolidated Gross Equity
Ratio and Consolidated
Tier 1 ratio for Common
Stock, etc. Tier 1 Ratio

March 2020

8,966
7,355
-42

Business Strategy and Plan for
Realizing the Long-Term Vision

1,003
Fiscal 2020

March
2024
(Target)

1,500

1,410

Fiscal 2019

March
2022

(Units: t, %)Scope 1 emissions
Scope 2 emissions
Reduction rate compared to fiscal 2013 (combining
Scope 1 and Scope 2)

8,990
-29

6,496

(March 2022)

March
2021

CO2 Emission
Reduction Rate

2,153

38.4%

March
2020

Value Creation Story

Profit Attributable to
Owners of Parent

Fiscal 2019

6.9

Letters from theManagement

100.0%

10

Holding Company<<Purpose of the transition toa holding company structure>>
Expansion of business fields
in light of relaxation ofregulations

October 2022
Transition to aholding company
structure

Enhanced group governanceby strengthening business
management functions
Maximizing group synergies bychanging employee and officer
awareness and behavior

Corporate Credo
Meaningof Existence(Mission)

Code of
Conduct (Values)

Offering the best
service and being
worthy of people’s
trust

Rendering our best
service with gratitudein our hearts

BANK

2016

We aim to realize our long-term vision based on
the management stance of “offering the best
service and being worthy of people’s trust.”(We will address resolving issues for society’s and ourcustomers’ issues by creating and unerringly deliveringvalue needed by them, implementing these values as
an integrated group, and taking on new businesschallenges.) stablished the Ship Finance Division
E(Iyo Bank)
Opened the Singapore Branch (Iyo Bank)

Stimulation of thelocal economy

2012 stablished Iyogin Securities (currently Shikoku
E
Alliance Securities)
Current structure

After establishing the holding company

Value Creation Story

Management
StanceA corporate group that continues
to create and provide new value

Letters from theManagement

Creating a bright andprosperous future forthe region

Long-Term Vision

Holding Company

To achieve its Corporate Credo, Iyo Bank has made efforts to stabilize regional financing and stimulate thelocal economy through the expansion, etc. of finance-related services by merging with other financial
institutions and establishing group subsidiaries for leasing, securities, etc. The Group will make a transition
to a holding company structure to respond as a more cohesive group to diversified and enhanced customer
needs. We thus aim to earn the unwavering trust of our shareholders, customers, local residents, andemployees, which in turn will contribute to the realization of a sustainable society.

About Iyo BankTransition to Holding Company
Structure

Iyogin Holdings

Stabilize regional
financing erged with Fuji
M
Savings Credit Union

BANK

1992
Merged with Toho Mutual Bank stablished Iyogin Regional Economy
E
Research Center
Established Iyogin DC Card1974

Established Iyo Computer Service (currently Iyogin Computer Service)

Iyogin General Leasing (currently Iyogin Leasing)

11

IYO BANK Integrated Report 2022

The Iyogin Credit Guaranty

The Iyogin Business Service

The Iyogin Business Service

Iyogin Challenge & Smile

Iyogin Capital

4 affiliated companies

7 consolidated subsidiaries

The Iyogin Credit Guaranty

2 non-consolidated subsidiaries

Iyogin Capital

Iyogin Regional Economy Research Center

7 consolidated subsidiaries

Iyogin DC Card

2 non-consolidated subsidiaries

Iyogin Leasing

Iyogin Regional Economy Research Center

Iyogin Computer Service

Iyogin DC Card

Shikoku Alliance Securities

Iyogin Leasing

Iyogin Challenge & Smile

Iyogin Computer Service

4 affiliated companies

Shikoku Alliance Securities

On the premise that the Bank obtains the necessary approval of relevant authorities, a holding company will beestablished through the method of a sole share transfer by the bank, with the effective date of October 3, 2022,
pursuant to which. The Bank will become a wholly owned subsidiary of the holding company.
The Bank’s seven consolidated subsidiaries (i.e., The Iyogin Credit Guaranty, Iyogin Capital, Iyogin Regional
Economy Research Center, Iyogin DC Card, Iyogin Leasing, Iyogin Computer Service, and Shikoku Alliance Securities)
are expected to be reorganized with the holding company as the direct equity holding companies, with a view tostrengthen cooperation, etc. within the group.

IYO BANK Integrated Report 2022

Corporate Data

1975

Iyo Bank

Sustainability

1988

Iyo Bank

Business Strategy and Plan for
Realizing the Long-Term Vision

1999

12

Letters from the Management

Striving

IYO BANK Integrated Report 2022

Corporate Data

IYO BANK Integrated Report 2022

Sustainability

13

The Iyo Bank
President and Group CEO

Business Strategy and Plan for
Realizing the Long-Term Vision

Kenji Miyoshi

Value Creation Story

The COVID-19 pandemic, which has been ongoing since 2020, has brought aboutsignificant changes in people’s lifestyles, and in how corporate activities are
conducted. We express our sincere sympathies to all who have been affected by the
pandemic in one way or another. In addition, we are earnestly profoundly grateful toall who have been doing their utmost to prevent the spread of infections.
The COVID-19 crisis has caused a massive slowdown in social and economic
activities. In addition, the emergence of geopolitical risks such as the situation in
Ukraine has exacerbated supply chain disruptions, resulting in soaring prices of raw
materials and energy. Under such severe economic conditions, we have been strongly
reminded of the Group’s mission as a regional financial institution that supports theregional economy.
The environment surrounding the banking industry is also changing, and newmeasures are required to respond to factors such as deregulation due to the revisionof the Banking Act, and the goal of realizing carbon neutrality. The Group will strive
to respond appropriately to these opportunities and challenges, and focus on
management that contributes to regional sustainability.
In April 2021, the Group formulated a new long-term vision of becoming “acorporate group that continues to create and provide new value,” and started a new
three-year Medium-Term Management Plan. This will further deepen and evolve theDigital-Human-Digital (DHD) model, which the Group has been working on since the
Fiscal 2018 Medium-Term Management Plan. Furthermore, this autumn, we willtransition to a holding company structure and launch “Iyogin Holdings (HD).” Goingforward, we will further enhance Group synergies, and provide new and diverse
services and value that contribute to the resolution of regional issues. Also, we will
strive to achieve sustainable growth and enhance the corporate value of the Group.

Letters from theManagement

To all stakeholders:

Holding Company

to be “a corporate group
continuing to create andprovide new value”

About Iyo BankManagement
Commitment

14

Letter from the Management

IYO BANK Integrated Report 2022

Corporate Data

The goal of “deepening and evolving the DHD model” is at thecore of our efforts to realize our new long-term vision andachieve the targets of our new Medium-Term Management
Plan. D-H-D (digital, human, digital) refers to a service modelwith three steps. First, we create a mechanism for seamless
contact and continuous connection with customers throughthe use of D (digital touch points). Then, through H (humanconsulting), we make customer-oriented proposals with a senseof warmth that is unique to humans. Finally, through D (digital
operations), we can make various procedures paperless andshorten processing time, so that procedures can be completed
without the need to visit a store.
In fiscal 2015, the Bank was one of the first to develop BPR
strategies that utilize digital technology, and began structural

Sustainability

IYO BANK Integrated Report 2022

In fiscal 2021, in a business environment where the COVID-19
crisis continued, the Group swiftly implemented COVID-related
financing in order to provide financial support to customers.
Furthermore, the “Support Team for COVID-19 Measures”
established in 2020 is playing a central role in providing
customers with a wide variety of support, with the support
tailored to each customer. These include not only financial
intermediary functions, but also support for core businesses,
business restructuring, and the promotion of new businesses.
In addition, new business opportunities are emerging
against the backdrop of deregulation related to the scope ofbusiness and investment, etc., due to the revision of the

Improving CX via “deepening and evolving
the DHD model,” so that each and every
customer can make the “better choice”

Business Strategy and Plan for
Realizing the Long-Term Vision

15

Viewing deregulation as an opportunity,
contributing to the region through diverse
channels

The Group formulated the new long-term vision in April 2021,
while letting it overlap with the previous long-term vision
formulated in April 2015, with the aim of becoming “acorporate group that continues to create and provide newvalue” over the next 10 years.
We set “Leading financial services group in the Setouchi
region in terms of customer satisfaction” as the previous
long-term vision, with the desire to become the financial
services group most supported by customers in the Setouchi
region, which is our management foundation. We havepursued convenience by making full use of digital technology,
and bank employees have striven to provide meticulous
consulting services that only humans can provide. Regarding
the previous long-term vision, I was personally involved informulating it as the General Manager of the General Planning
Division, and we had repeated discussions within the bankabout what a medium- to long-term sustainable strategy
should be. This new long-term vision utilizes our experience informulating such a previous long-term vision, and also reflects
the negative interest rate monetary policy and the impact of
COVID-19, etc. Going forward, the Group will continue torespond appropriately to the trend of deregulation whileworking as the entire Group as a whole to resolve customer
issues.
In business fields that have a high degree of affinity withour core business of financial services, we will actively take on
the challenges of collaborating with other industries ordeveloping new businesses as a group.
It is undeniable that conventionally, in the banking industry,
we have worked with values that emphasized “not failing”
when it comes to risks and opportunities. However, in the
coming era, we will not see innovation if we simply follow theconventional business model of banks. The important thing isValue Creation Story

The Group celebrates its 144th anniversary this year. Up until
today, we have done our utmost to support the developmentof the local economy, and to help customers realize prosperous
lifestyles. Among the Shikoku regional banks in Shikoku, wehave the highest total amount of capital. Furthermore, in
Ehime Prefecture, we have high market shares of 35.7% forloans and 53.3% for deposits. This shows that we have built afirm management foundation that enables us to be a leadingbank not only in Ehime Prefecture but across the entire
Setouchi region.
The Setouchi region, which includes our primary market
Ehime Prefecture, has the characteristic of having a multitudeof local industries. These include primary industries like
agriculture and fishery, secondary industries such as paper andsanitary paper, machinery, and chemicals, as well as tertiaryindustries that include various services and tourism. The
Group’s strength lies in has touch points we have in each ofthese industries. Our strength lies in how we can abilities toprovide a wide range of assistance through various forms ofvalue provision, such as providing financial and consulting
services, as well as support for branding. Furthermore, last year,
we appointed an Executive Officer to be in charge of local
industries, thereby creating a system where management
support for the region is further strengthened. In fact, we
provided so much support that customers were surprised,making comments such as “I can’t believe a bank would go
this far.”
As an example of our initiatives aimed at local industries,
we provided support for the shipbuilding and ocean transportindustry. There are Ehime Prefecture has around 1,200 oceangoing vessels owned in Ehime Prefecture. The gross tonnage of
new vessels built in Ehime was 1.87 million tons, the highest
level in Japan, making the shipbuilding and ocean transportindustry one of the dominant local industries. In particular, theocean transport market has become increasingly important,
due to factors such as the surge in demand for large vessels
owing to rising demand for ocean transport in recent years.
The Group has built a relationship of trust with “Ehime
Owners (shipowners in Ehime)”, who boast a global presenceon par with Greek and Hong Kong shipowners. This trust was
built up for over more than a century, dating back to the days
when the shipowners mainly built coastal trading vessels weremainly built. The Group has supported their businessdevelopment by providing stable funding. As a member of thelocal maritime cluster, the Bank recognizes that its role in ship
finance is to contribute to the development of the entire
maritime-related industry in Japan.
Going forward, in addition to our efforts in Japan, we willcontinue contributing to the development of the shipbuilding
and ocean transport industry by utilizing the branch we openedin Singapore, the center of the maritime industry and theeconomic hub of Asia. Regarding the various other local
industries, we will also provide a wide range of support, suchas support for overseas expansion and support for market
development.

Letters from theManagement

Widely supporting a multitude of local
industries based on the trust garnered overthe past 144 years

We formulated a new long-term vision
adapted in response to current trends andchanges in the market.
“The Group as a whole” promoting “value
creation” through the Medium-Term
Management Plan

to not be limited to financial services, but to develop businesses
that accurately ascertain risks and turn them into opportunities,
without being limited to financial services, and to solve
problems for local communities and people.
For example, in recent years, it has become essential torespond to carbon neutrality. In addition to responding tofunding needs for equipment upgrades that reduce CO2
emissions or for the use of natural energy, opportunities haveemerged for a wide range of consulting proposals. There aremany other new business opportunities that come with thechanging times. Even in a situation where the local economy isshrinking due to population decline, we believe that we candraw up a scenario for sustainable growth using our ability to
predict the future.
In fiscal 2021, we started the new Medium-Term
Management Plan, which consists of “five business strategies”
and “four plans.” The former has been developed based on
local communities’ and our customers’ issues and needs. The
latter has been positioned as group-wide cross-sectoral efforts
to support the business strategies, with an eye on a structuralreform in light of long-term changes in the businessenvironment. Based on the above, we are promoting ourbusiness operations. In particular, we will provide new value
through a form of consulting where we raise problems andbring attention to latent needs that customers are not aware of.
In fiscal 2021, the first year of the plan, consolidated
ordinary income was ¥38.2 billion and profit attributable toowners of parent was ¥26.4 billion, both of which were higher
than the previous year and we secured profits exceeding
earnings forecasts as well. Therefore, profits were secured. In
fiscal 2023, the final year of the plan, we plan to secure
consolidated core business gross profit of ¥86.0 billion andconsolidated ROE at a level of 4.0%.
Going forward, as we aim to realize our new long-term
vision and achieve targets in our new Medium-Term
Management Plan, we always keep our corporate credo inmind when making management decisions. Our corporate
credo of “creating a bright and prosperous future for theregion” is our meaning of existence (purpose), and it is also
positioned as our mission. Looking ahead, we will strive torealize our new long-term vision of becoming “a corporategroup that continues to create and provide new value” byreminding all officers and employees, through the corporate
credo, of the shared attitude and mindset that should be taken
when facing customers.

Holding Company

Banking Act last year. While the conventional business model
based on investment income from deposits and loans is
becoming increasingly difficult to operate, the use of digitaltechnology, which the Group is promoting as a key strategy, iscreating new products and services. Through these efforts, wehope to create contact points with customers through a varietyof channels, and provide new, more sophisticated customer
experience value (CX). These reforms will lead to a tangible
sense of contribution to the local community and motivation
for the younger generation of our bank employees, and will
also be a great opportunity for growth in terms of humanresources.
As a new channel, we released the smartphone app“AGENT” in the previous fiscal year to realize the concept of
having “Iyo Bank on your palm.” Based on the concept of“transforming dealings with the bank from ‘a visit’ to ‘anaction’,” the app allows customers to consult with bank
employees from any location using the video chat function,
without having to visit the bank. This is a warm service that can
only be provided by regional banks. The Group intends tofurther improve CX by transforming the Bank into a form thatsuits customers without being bound by preconceived notions.

About Iyo BankManagement Commitment

16

Letter from the Management

Digital touch points

Human consulting

Digital operations

Customer contact points(user-friendly)

Bank employees of the Group(customer-oriented)

Administrative procedures(easy to complete)

Building relations with customers
by utilizing digital technology

Constantly establish new touch points
for everyday contact

Digital Touch Points
Customer consultations

Human Consulting

Consulting
Make customer-oriented proposals
Resolving problems and taking risks throughbusiness feasibility assessments
Personal asset management and investment
proposals based on fiduciary duty

actively promoting it. In addition to tech personnel who are
proficient in digital technology, through training andcertification, etc., we are developing “digital businesspersonnel” who can plan for commercialization as well,through training and certification, etc. We are in the process ofconstructing a system for nurturing expertise and appointing
employees in stages, from starters to actual workers, and thento highly skilled workers.

Responding to customer needs that arebecoming more diversified andsophisticated, by utilizing external resources
such as open innovation and alliances

For the Group, which has grown along with the developmentof the region, the concept of sustainability management has
been cherished and carefully passed down through our
corporate credo of “creating a bright and prosperous future forthe region.” For example, we support local social welfare andcultural activities, implement environmental conservation
activities, and provide financial education. Through these
activities, we will continue to work on resolving problems in
the local communities.
Last year, we announced our support for the TCFD anddisclosed our CO2 emissions reduction targets. Based on this, itis the policy of the Group to work towards the realization of asustainable local community through efforts that contribute toresolving environmental issues, including the procurement ofelectricity that is generated by renewable energy.
The promotion of sustainable finance that reduces or
avoids social and environmental risks will become increasingly
important in the future. Last year, we signed the first
Sustainability Linked Loan Agreement, first of its kind in Ehime

Corporate Data

From the customer’s point of view, there are no barriers
between the Bank and the group companies, or between thefinancial industry and other business categories. As customer
needs become more diverse and sophisticated, we need tocreate and provide new value to meet those needs when
existing businesses cannot meet them. Therefore, where theGroup’s management resources are insufficient, as amultifaceted alliance strategy, we will work to resolve customer
issues by supplementing our resources with open innovation
and alliances.
Up until now, we have collaborated with other regionalbanks such as through the Shikoku Alliance and the TSUBASA
Alliance, and utilized their functions and know-how. We havealso concluded business partnership agreements with ANA (ALLNIPPON AIRWAYS CO., LTD.) group companies, Shikoku ElectricPower Company, Incorporated, etc. to support efforts toward
carbon neutrality and regional revitalization projects. Instead ofworking only within the framework of the banking
organization, we proactively go out and innovate together withother industries. We will also take on the challenge of more
flexible and proactive “exploration of knowledge,” and theSustainability management that has been
passed down through the corporate credo

Going forward, the Group will further deepen and evolvethe “Digital-Human-Digital (DHD) model” to resolve regionaland customer issues, and establish a management foundation
for sustainable growth over the medium to long term. We will
also continue striving to return profits to investors andshareholders. We sincerely hope that you will continue tosupport the Group in all our future endeavors.

Sustainability

IYO BANK Integrated Report 2022

Construct integrated channels that enable
operations to be conducted “anytime, anywhere”
Students and workers Online/Utilize bankbranches on weekends and holidays
The elderly Bank branches/Online (notransportation required)Reform of application procedures by going
paperless, etc.

Going forward, the Group will pursue a path to sustainably
return profits to investors and other stakeholders. For instance,
beyond paying out short-term cash dividends, we will investing
accumulated capital towards the sustainability of the local
region, and by continuing to provide new value, we can enablelong-term returns. We believe that this is also the mission ofregional financial institutions and is a way to return profits.
Based on this idea, we will firmly meet expectations over the
medium to long term by pursuing sustainability together with
our stakeholders.
In this fiscal year, the second year of our new long-term
vision and new Medium-Term Management Plan, we willcontinue to take on challenges without fear of failure. Even if
we encounter a failure, we can learn from the experience andpursue new possibilities.
Looking at the conventional banking business, I suppose it
was difficult to fully develop risk-taking management. However,from now on, based on my creed of “sail through uncharteredwaters valiantly,” the Group will boldly challenge unexplored
fields, overcome difficulties and trials, and create a new future.
We plan to improve CX for local customers, and provide
employees with better work styles and create job satisfaction.

Business Strategy and Plan for
Realizing the Long-Term Vision

17

Channels that can be usedregardless of time and place

Continue challenging ourselves to create
new value as the Iyo Bank Group, with “sailthrough unchartered waters valiantly” as
our creed

Value Creation Story

reforms of its banking operations. At the same time, we madeeffective use of the time and human resources that werecreated in the streamlining process and worked on resolving
the issues of our customers. In terms of “deepening,” we will
dig deeper by reviewing and improving our existing legacy(assets), and in order to “evolve,” we will provide new value by
refining the creation of services and businesses. In both cases,
the entire Group will take on challenges as a whole, in order tochange the form of the Group.
Ultimately, the DHD model is a means and not an end.
Today, our customers would like us to provide additional value
in addition to financial intermediary functions, such assupporting for the recruitment of personnel, and help in
resolving issues including that of business succession and
M&As. After deepening and evolving the DHD model, we
expect to produce consulting proposals that provide optimalvalue for a myriad of customer needs, thereby “enabling eachand every customer to make the ‘better choice’.” Whilefinancial intermediation for deposits and loans will continue tobe our main business, we aim to provide tailor-made products
and services that meet the needs of each and every customer.
Looking ahead, we want to put the following into practice:further pursue the quality of “being customer-oriented” that
we have cultivated over many years, look to the future, andpursue CX that will satisfy our customers. As a result, these will
have the effect of improving the Group’s earnings.
In order to accelerate these efforts, we implemented the
PDCA cycle to practice and evaluate policy management, andstarted initiatives to improve CX while ensuring each front-line
officer and employee is constantly conscious of CX. We actually
believe that increasing the motivation of front-line employees
such that they act autonomously, and continuously rotating the
CX cycle where employees face customers, is leading to anincrease in earnings.
Developing digital personnel is an important measure fordeepening and evolving the DHD model, and the Group is

Digital Operations

On the precondition that we obtain the necessary approvals,
etc. from the relevant authorities, we will launch “Iyogin
Holdings (HD)” in October this year and transition to a holding
company structure. By shifting to a holding company structure,
it will become easy to expand our business fields, including into
new businesses. Also, it will be possible to optimally allocate
management resources throughout the Group, such as
promoting the mobility of personnel within the Group.
Accordingly, I believe that we can break away from the bankcentric culture and accelerate our sales as an integrated group.
In addition, the upgrading of group governance andtransformation in the awareness and behavior of officers andemployees will bring the advantage of leading to the
maximization of group synergies, such as improvement in theautonomy of group companies. This will bring the advantage
of leading to the maximization of group synergies, such as
faster decision-making.
Prior to the transition to a holding company structure, we
introduced a Group Chief Officer System in the previous fiscal
year. This will further strengthen the Group’s business
management system, promote Group-wide integrated andstrategic initiatives, and allow us to continue strengthening
group governance going forward.
We are also working on corporate governance, whichstrengthens our management foundation, as one of our top
priorities. Among our efforts, we have formulated a “Skills
Matrix” for the members of the Board of Directors, which
consists of nine items. By utilizing the criteria for selecting andappointing personnel from both within and outside the Bank,
we ensure diversity in the knowledge, expertise, and experienceof the members. This enables team management where
members can complement each other while demonstrating
their individuality, and further enhance the team’s abilities.

Letters from theManagement

Provide timely and appropriate
information and suggestions tocustomers who consult with us
Consultations about
management strategies andlife plan designs

Sincerely serving eachcustomer throughhuman and digital
approaches

Construct a mechanism that allows us to becontinuously connected to customers
Conduct periodic follow-ups efficiently using
digital technology

Launching Iyogin HD to further strengthengroup governancePrefecture, to fund the construction of a new stadium for FC
Imabari, a local professional soccer team. In addition to theabove, regarding climate change, decarbonization, etc., while
accumulating know-how by responding to the demand forfunding aimed at realizing a sustainable society, including
climate change and decarbonization, the drawing of roadmaps
for our customers’ businesses is also positioned as a new formof value provision.

Holding Company

Customer contact points(touch points)

entire Group will work together to play the role of providing
optimal solutions, as a platform with diverse responsivenessthat resolves issues in local communities.

About Iyo BankManagement Commitment

IYO BANK Integrated Report 2022

18

Letters from the Management
About Iyo Bank

Message from Officer in charge of FinanceCapital Policy and Shareholder Returns

20

Ordinary dividend
Commemorative dividend

15

2
10

1

Senior Managing Director(Representative Director)
Group CFO and CSO

5

1

8

8

9

10

March
2011

March
2012

March
2013

March
2014

12

12

12

12

March
2015

March
2016

March
2017

March
2018

14

14

14

March
2019

March
2020

March
2021

16

0
March
2022

5,000,000 shares (Upper limit)(Percentage against the total
number of issued shares (excluding
treasury stock): 1.57%)

Total
amount ofpurchase
price¥3.0 billion (Upper limit)

Purchase
periodMay 16, 2022 to July 29, 2022

Value Creation Story

Hiroshi Nagata

Total
number ofshares (tobe)
purchased

Letters from theManagement

Purchase of Treasury Stock(Yen)

Holding Company

As a regional bank, the Bank takes on various risks including loans. In order to continue supporting the local communities
that form the foundation of the Bank, we believe it is necessary to maintain adequate financial soundness by enhancing
equity, which serves as a risk buffer.
In addition, as a bank that follows BIS standards, the Bank is required to ensure soundness on the premise of expanding
equity. As our response to the finalization of Basel III, we will continue aiming to enhance equity so as to continue
maintaining the equity ratio at a high level.
As described above, in order to ensure soundness as a regional bank that supports local communities, and to achieveequity enhancement in the medium to long term based on Basel III, as an equity ratio target in the Medium-Term
Management Plan, we have set a consolidated common stock Tier 1 ratio of 15.0%.
Regarding shareholder returns, our basic policy is to maintain a stable dividend while striving to enhance equity within thecapital balance. In particular, in order to maximally meet our shareholders’ expectations, we will increase the dividend forfiscal 2021 by ¥2 from the previous year to ¥16 per share (including an interim dividend of ¥8). In addition, on May 13, we
decided to purchase treasury stock with ¥3.0 billion as the upper limit of the purchase price. Going forward, in order tocontribute to the maximization of long-term shareholder returns, we will continue to provide stable shareholder returns while
maintaining a balance with equity.

Policy on Cross-Shareholdings

Items

Fiscal 2020
Results

Fiscal 2021
Results

Targets for
Fiscal 2023
Targets(Billions of yen)

Consolidated corebusiness grossprofit¥86.6 billion ¥90.4 billion¥86.0 billion

Profit attributableto owners ofparent¥18.0 billion ¥26.4 billion¥23.0 billion

100.0

90.0

97.7
26.7

Book value of cross-shareholdings (listed)
Tier 1 ratio* (right axis)

95.0
26.1

91.5

88.7

24.4
3.82%

Consolidated core
OHR

60.19%

Consolidated
common stock
Tier 1 ratio

14.58%

5.34%

57.05%

14.28%

4.0% ormore
Approx.
60.0%

22.7
80.0

21.4

25.0

85.2
81.3
20.0

20.1
18.7

15.0

70.0

Corporate Data

Consolidated ROE(shareholders’equity basis)

87.2

(%)

30.0

Sustainability

Regarding the progress of the major numerical targets set
forth in the Fiscal 2021 Medium-Term Management Plan,in fiscal 2021, we secured high levels of profit, withconsolidated core business gross profit at ¥90.4 billion andprofit attributable to owners of parent at ¥26.4 billion. As
a result, consolidated ROE on a shareholders’ equity basis
was 5.34% and consolidated core OHR was 57.05%, bothat favorable levels.
The consolidated common stock Tier 1 ratio was
14.28%, slightly lower than the previous fiscal year, mainly
due to a decrease in evaluation gain (loss) on securities due
to sudden market fluctuations at the end of the fiscal year.
We will strive to maintain and improve the ratio by
continuing to work on asset control with an awareness of
the risk-return balance, and accumulating profits to buildup equity.

Business Strategy and Plan for
Realizing the Long-Term Vision

Progress of Fiscal 2021 Medium-Term Management Plan

When the Bank holds stocks for policy purposes, such as maintaining or strengthening business relationships or cooperative
relationships with other companies, the Bank fully analyzes the risks and returns, and strives for appropriate management ofinvestments.
Regarding cross-shareholdings, we verify the rationality of holding stocks from the “investment aspect” and the “policy
aspect.” Regarding the “investment aspect,” we evaluate whether RORA calculated from stocks and deposit and loantransactions, etc. matches the cost of shareholders’ equity, etc. based on the CAPM and dividend growth model. Regarding
the “policy aspect,” we evaluate whether the goal of increasing transactions has been achieved, in the way that was
expected at the time of implementation.
At least once a year, the Bank submits the verification results of the rationality of holding each company’s stocks to theBoard of Directors for deliberation (most recent submission: May 2022). When there is little rationality for holding certain
stocks, we will conduct negotiations to improve transactional conditions, etc. If there is no improvement, we will proceedwith the sale of the cross-shareholdings after obtaining the full understanding of the business partner.

Approx.
15.0%0March 2016

March 2017

March 2018

March 2019

March 2020

March 2021

March 2022

March 2023

March 2024

0*Tier 1 excludes components of comprehensive income

19

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

20

Value Creation Story

Long-Term Vision

About Iyo Bank

Ideal State in the Long Term(Long-Term Vision)
Future Vision Following the Long-Term Vision

Long-Term Vision
COVID-19“A Corporate group that continues to create andprovide new value”

Sustainability

Fiscal 2021
Medium-Term
Management Plan

“Leading financial services group in the Setouchi
region in terms of customer satisfaction”

 bank on your palmA
Connecting with bank
employees via video chatB ank employees
serving as the Bankat a customer siteCounters where nopens are used

*To be continued

Fiscal 2015
Fiscal 2018
Fiscal 2021
Medium-Term
Medium-Term
Medium-Term
Management Plan Management Plan Management Plan

Corporate Credo ew card loan service that issues
N
notifications on insufficient amounts

21

IYO BANK Integrated Report 2022

Deepening andevolving the DHD
model = “DX”
Change in company culture(fixed thinking)

Improvementin customer
experiencevalue (CX)

Review of existing business andreduction in technical debt
Recombination of businesses based on customer needs
Review and abolition of legacy systems
More efficient administration through introduction of RPA
Reorganization of branches through review of operation structure

Iyo Bank

Bank
Group

Offices

Trust
Customer

Individuals

Reduction of administrative work to one-third(Compared to March 2018)

Consulting staff 1,500 persons/Tech staff 150
persons
Location free operations(Omnichannel/integration of online andoffline channels)

IYO BANK Integrated Report 2022

Corporate Data

“Creating a bright and prosperous future for the region”“Offering the best service and being worthy of people’s trust”“Rendering our best service with gratitude in our hearts”

Business of otherindustries

 ouse purchasing planHwith a smartphone•

Basis of the DHD model: Utilization of Digital technologies andwarm response by Humans

For bringing “better choice” to eachand every customer

Sustainability

Corporate group
Aggressively try businessfields having high affinity
with the core businessand leading to solutions
for issues in society andcustomers

Improvement in cooperation
with other industries with highaffinity with core businessBusiness Strategy and Plan for
Realizing the Long-Term Vision

Previous 10-year vision ontinuing to createCand provide new value• Strengthening
consultation capabilities
by the entire Group• 
Improving cooperation
with other industries toexpand the business fields

Creation of newservices and new
businesses

Future Vision
Aiming to become a leading corporate group based on
the Chugoku and Shikoku regions

Value Creation Story

Deregulation, etc.

Fiscal 2021 Medium-Term Management Plan

Letters from theManagement

The Group is continuing the construction of the “DHD model”, which utilizes digital technologies to expand customer touch points
and thoroughly streamline administrative procedures, thereby allowing us to focus on customer service.
“Deepening and evolving the DHD model”, which aims to build a business model for realizing the long-term vision, is aboutchanging the company culture, and is oriented in the following two directions. “Deepening” is done by refining the power of“Humans” while utilizing digital technologies, as well as improving and further developing existing services and operations.
“Evolving” is achieved by creating new services and businesses, whereby our own form gradually changes. The Group defines thefurther deepening and evolving of this “DHD model” asunder the commonly-known category of “DX (Digital Transformation)” asgenerally referred to.
The process of “deepening and evolving the DHD model” centers around the creation of new services and businesses and thereview of existing businesses, with the aim of improving customer experience value (CX). We believe that this will lead tocontributions that help realize the wishes and dreams of our customers and of those living in local communities.
Through these initiatives, the Group will take on new challenges in business fields that contribute to local communities andcustomers, while keeping the banking business at its core. Accordingly, the Group is taking steps to transform itself into a corporategroup that is trusted by local communities, customers, as well as Group officers and employees.

Holding Company

Regarding the business environment surrounding the Bank, in addition to the structural socioeconomic changes due to Japan’s
shrinking and aging population and the maturing economy, the Bank is facing an irreversible trend of digitalization, the COVID-19
pandemic, and the need to respond to deregulation and sustainability.
Based on our recognition of such a business environment, we started at the commencement of the Fiscal 2021 Medium-Term
Management Plan. In line with the plan’s commencement, we have set our long-term vision as “a corporate group that continues tocreate and provide new value.” Under this vision, we aim to create and unerringly deliver value needed by the community and ourcustomers, strengthen consultation capabilities by the entire Group, and actively take on challenges in new business fields in order tocreate and unerringly deliver value needed by the community and our customers.
By adapting to changes in the business environment and working to transform our business model as Iyo Bank Group, we will
strive to solve the issues faced by our local communities and customers and, aim to achieve sustainable growth and enhancement of
the corporate value of the Group.

22Value Creation Story

External Environment,
Social andEnvironmental Issues

Input

Environmental Issues

Digital umber of employees (consolidated
N
group total): 3,044
Diverse human resources with expertise

Touch Points
Sincerely serving eachcustomer throughhuman and digital
touch points

Intellectual Capital

Provision of comfortable andconvenient lifestyles
Creating enriched lives by
eliminating anxiety for eachcustomer’s life event

S hip financeRisk consulting concerning the shipbuilding
and ocean transport industries
Business matching and project brokerage
between domestic and overseas oceantransport companies

Market Investment

Social and Relational
Capital (Fiscal 2021)
Customer consultations
Provide timely and appropriate
information and suggestions tocustomers who consult with us

Management foundation that
supports value creation
Nurture human resources in order toconsulting group
IT governance for maintaining a secure,banking system
Compliance

Shareholders
and Investors

Improvement
in CX

Enhancement of medium- tolong-term corporate value
Stable profit returns
Proactive dialogues

Ship Related

Consulting

 n established brand and trust fromA
the local community cultivated over
140 years of history
Comprehensive ability of the entire Group
Advanced digital shiftNo. of patent applications: 7(of which 5 have been granted)“Easy and Convenient”
Cashless payment services, various
mobile apps
“Borrowing”:
Loan products that utilize digitaltechnologies, etc.
“Saving and Increasing”
Various financial instruments, etc.
“Preparing”
Level premium insurance, etc.
“Preserving and Bequeathing”
Testamentary trusts, inheritanceconsultations, etc.

Consulting

 anaging securities with an emphasisMon liquidity
Managing market-oriented loans while
being conscious of the balance between
profitability and safety

Make customeroriented proposals

Employees
Provision of an environment
where employees can actively
take on challenges with“motivation” and “jobsatisfaction”
Further promotion of diversity
and inclusion

Environment andLocal Communities
Reduction of CO2 emissions

become astable, and safe

Location free operations

Regional revitalization by
resolving social issues

Construct integrated channels
that enable operations to be
conducted “anytime, anywhere”

Risk
management

IYO BANK Integrated Report 2022

Corporate Data

IYO BANK Integrated Report 2022

Operations

Human(Fiscal 2021)

Corporate
governance23

DigitalComprehensive training system

Operating base
Share of deposits in Ehime Prefecture:
53.3% (No. 1)
Share of loans in Ehime Prefecture:
35.7% (No. 1)	Network of domestic and overseas
branches
151 branches in Japan, and 3 branches
overseas	Has the broadest regional coverageamong regional banks
Network: 13 prefectures
	Diverse industrial structures of theregionImprovement of profitability andproductivity

Personal Related

Human Capital (Fiscal 2021)

Employees with qualification equivalent to 1st
grade financial planner: 165
Small and medium enterprise management
consultants: 77
MBA holders: 2
Securities analysts: 71
Real estate transaction agents: 189
Fundamental information technology
engineers: 79
Applied information technology engineers: 29

Resolution of management issues
through diverse and specialized
consulting

Smooth and diverse financing
Management support based on businessfeasibility assessment
Various consulting functions according tocustomer needs (M&A, businesssuccession, start-up support, businessmatching, staffing, support for ICT anddigitalization, etc.)

Sustainability

 esponse to climate change
R
Realization of carbon neutrality
Response to energy problems
Response to intensifying natural
disasters
Construction of social infrastructure

Constantly establish new touch points
for everyday contact

Customers

Corporate Related

Business Strategy and Plan for
Realizing the Long-Term Vision OVID-19
CAsset formation in the age of 100-year
lifespans
Financial inclusion
Lack of successors
Deterioration of local industries
Diversity and inclusion
Measures to realize work-life balance

Digital relations
Construct a mechanismthat allows us to becontinuously connected tocustomers

Customer Contact Points(Touch Points)

OutcomeValue Creation Story

Social Issues

DHD Model

OutputLetters from theManagement

P opulation and number of offices inlocal regions are decreasing
Acceleration of digitalization
Diversification of customer needs andcontact points
Companies in other industries
participating in financial services
Deregulation
Trends in sustainability
Heightened geopolitical risks

Stable fund raising
Balance of deposits: ¥6,654.1 billion
Healthy amount of loan assets
Balance of loans: ¥5,068.8 billion
Ratio of disclosed non-performing
loans: 1.64%
Sturdy level of equity
Consolidated gross equity ratio:
14.32%
Evaluation gain on securities:¥271.1 billion

Business Model

Holding Company

Financial Capital (Fiscal 2021)

External Environment

About Iyo Bank

Value Creation Process24Value Creation Story
Elements of CX Improvement

Elements of CX Improvement
and Rotation Cycle

In order to improve CX, we believe it is important to (1) know our customers well, (2) create various
forms of value including unprecedented new value, and (3) deliver them in a way that matches eachcustomer’s style. Accordingly, we are working on (4) the creation of new mechanisms and thedevelopment of various systems, etc. so that the entire Group can work as a whole to realize theabovementioned elements.

1) Understanding
customer needs

4) Mechanisms
2) Creating
value3) Deliveringvalue

Judging withthe brain

Feeling withthe heart

Development of the DHD Brand
In order to demonstrate our efforts in DX (deepening and evolving the DHD model) and convey our thoughts, we have renewed ourcreative contents. Wishing to realize the concept of “banks that can always make people happy,” we have expressed the following
ideas: “Transforming the Bank into a form that suits people” and “Human-friendly, affable digital technologies.”
Going forward, we will continue to provide value and experiences that are tailored to our customers.

Establishment of Business Strategies based on CX improvement and establishment ofCommittee therefor Improving CX

Business Strategy and Plan for
Realizing the Long-Term Vision

In order to resolve customer issues and needs, we aim to improve CX through the realization of a consistent customer experience
across multiple channels, and strive to improve the UX (user experience) of each channel. Through these efforts, we aim to augment
and enhance our “customer responsiveness.”
With the aim of promoting these initiatives across the Group, we have established the CX Improvement Promotion Committee.
Chaired by the President, the Committee discusses matters related to the improvement and enhancement of responses and services
at all points of contact with customers, as well as matters regarding new operations and services.

Customer Experience (CX)
A series of User
Eexperiences (UX)
Remote, manned contact points

A series of user
experiences (UX)
Face-to-face, manned contact points
Attachment

PraiseImpactComfortAttachment

PraiseImpactComfortAttachment

PraiseImpactCorporations,
corporate owners

Individuals

Maritime businesses

Business Strategies

Corporate Related

Personal Related

Ship Related

Transforming the Bank into a form
that suits people

Corporate Data

Understand needs based on
various information and data,
and deliver optimal services
tailored to each customer

Sustainability

A series ofexperiences (UX)
Remote, digital contact points
Comfort

Issues andneeds ofcustomers

Value Creation Story

In 1984, the Bank introduced Total Quality Control (TQC). In line with the three basic philosophies of “being customer-oriented,”“putting quality first” and “respecting humanity,” for nearly 40 years, the Bank has endeavored to improve quality and resolve issues
for our customers through activities of the Quality Control circles, etc.
While our stance of “being customer-oriented” remains unchanged, as the lifestyles and needs of our customers diversify andbecome more sophisticated, the Bank must also deepen and evolve what we do for our customers. Regardless of differences in touchpoints or contact methods, such as face-to-face or remote, digital or manned, we aim to improve everything that our customers
experience and feel through the Bank, and to continue providing new value to our customers. Therefore, the entire Group is working
together to improve customer experience value (CX).

Happyier with
better-thanexpected experience,feels trustworthy,
nice and kind...

Interest rates,
price, functions,product
properties...

Letters from theManagement

Purpose of Improving CX

Emotional
value

Rational value

Holding Company

Strengthening Structures at Bank Branches
CX consists of “rational value” and “emotional value,” andthe Bank aims to improve both in a well-balanced manner.
As one of our initiatives to improve emotional value, weare reinforcing structures at bank branches and focusing on
improving experiences through human interaction. Striving to
be a bank that is chosen by customers and offers a pleasantexperience, we welcomed employees from other industries
and incorporated third-party perspectives. Accordingly, thebank branches and Headquarters worked together to enhancecustomer service and response skills, and carried out activities
to enhance the environment of bank branches.

About Iyo Bank

Striving for Improving CXSpecial website:

25

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

26

Business Strategy and Plan for Realizing the Long-Term Vision

Business Strategies

Basic Policy for Business Strategies and Plans
Corporate related
strategies

Provide integrated solutions through cooperation between the Group, partnercompanies, etc. to improve customer experience value

Personal related
strategies

Provide integrated solutions for each customer in all channels and realizeenhancement in customer experience value
Appropriately grasp changes in the maritime industry’s business environmentand support business investments that are optimal for customers

Market investment
strategies

Be conscious of overall profit and loss that lead to stable profit and future
profit, and diversify investments with a focus on liquidity

BPR strategies

Aim to increase productivity of the entire group by minimizing administrativeand routine work and enhancing manpower available for customer
interactions and planning work

Plan for IT

Aim for the establishment of IT governance that not only achieves promptand flexible digital response to the external environment and customer needs,
and but also maintains a secure, stable, and safe banking system as well

Overview of Fiscal 2021 Medium-Term Management Plan

Medium-term view (3 years)
Personal related
strategies

Market investment
strategies

Ship related
strategies

BPR strategies

Plan for branches
Plan

Corporate related
strategies

To be worked on during
the three years anddeveloped according tofuture changes inenvironments

Aim to diversify customer touch points by rebuilding channels, including
branches
Aim to become an organization group creating and providing diversified value
by developing personnel who can work actively in areas of their expertise
under a basic idea of “originating from customers”

Plan for humanresources

Reassign manpower created by BPR strategies to focus areas and aim to build
a structure enabling to systematically secure manpower that carries out
business strategies

Major Numerical Targets

Plan

Plan for IT

Plan forbranches

Plan for HR
development

Plan for humanresources

Responding to issues from a long-term
perspective with an eye on adapting
to changes in the environment

Iyogin Leasing/Iyogin Computer Service/The Iyogin Credit Guaranty/The Iyogin Business

Efforts by the Group as

Service/Iyogin Capital/Iyogin Regional Economy Research Center/Iyogin DC Card/Shikoku

a whole27

IYO BANK Integrated Report 2022

Targets for Fiscal 2023

Consolidated core business gross profit¥90.4 billion¥86.0 billion

Profit attributable to owners of parent¥26.4 billion¥23.0 billion

Consolidated ROE (shareholders’ equity basis)

5.34%

4.0% or more

Consolidated core OHR

57.05%

Approx. 60.0%

Consolidated common stock Tier 1 ratio

14.28%

Approx. 15.0%

Corporate Data

Iyo Bank Group

Fiscal 2021 Results

IYO BANK Integrated Report 2022

28

Alliance Securities/Iyogin Challenge & Smile

Sustainability

Long-term view (7 to 10 years)

Items

Business Strategy and Plan for
Realizing the Long-Term Vision

Plan for HR
development

Value Creation Story

Business Strategies

Achieving a long-term vision of a “corporate group continuing to create and provide new value”

Letters from theManagement

Ship related strategies

Holding Company

Amid significant changes in the business environment, our business starts from addressing local communities’ and our customers’issues, which in turn contributes to their resolution, and leads to the Bank’s profit as well. We are keenly aware that this fundamental
cycle facilitates regional development and also strengthens our management base. Such a stance is embodied in our meaning ofexistence, “creating a bright and prosperous future for the region.” This is the exact mission of the Bank. To fulfill the mission, wedevelop and implement strategies under the Medium-Term Management Plan, taking into account expected changes in the businessenvironment. On the basis of such an approach, the Fiscal 2021 Medium-Term Management Plan was formulated in tandem with
the new long-term vision.
The Fiscal 2021 Medium-Term Management Plan consists of business strategies and plans. The former has been developed basedon local communities’ and our customers’ issues and needs. The latter has been positioned as group-wide efforts to support thebusiness strategies, with an eye on a structural reform in light of long-term changes in the business environment. The Bank will work
to further deepen and evolve the DHD model centered on the five business strategies and four plans. By doing so, we strive tostrengthen relationships of trust with local communities and customers, and aim to improve sustainability as a corporate group.

About Iyo Bank

Overview and Progress of
Medium-Term Management Plan

Business Strategy and Plan for Realizing the Long-Term Vision
Provide integrated solutions throughcooperation between the Group, partnercompanies, etc. to improve customer
experience value

Initiatives Based on Business Feasibility Assessment

Sharing of Management Issues through BusinessFeasibility Assessment
Total average loan balance
Number of Mirai Support Sheets prepared
Number of business feasibility assessment
investigation committee held

3,329

Amid the prolonged COVID-19 pandemic, in addition to the declining population and shrinking economy inrural areas, our customers’ management issues and needs have become more sophisticated and diverse.
They have extremely high expectations for financial institutions. Under such circumstances, the Bank, as aregional financial institution, intends to offer both financial and non-financial support in a comprehensive
manner. To that end, we will strive to offer consulting services in cooperation with group companies andexternal institutions.

450

Production

Shipment
Distribution

Sales
MarketingServices

Purchase
Logistics

Production

Shipment
Distribution

Sales
MarketingServices

Think tank

29

VenturecapitalCreditcards

IYO BANK Integrated Report 2022

540.0

0

2,000
1,000
0

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

2,592
Fiscal 2020

2,800
Fiscal 2021
(Plan)

4,112
202
610

3,678
171
507

4,007

3,300

3,000

Fiscal 2021

Fiscal 2022 Fiscal 2023
(Plan)(Plan)*Corporate solutions revenue: Financing-related, businesssuccession and M&A, business matching, corporate life
insurances, etc.

Key Efforts¥5.0 billion¥11.0 billion

Number of businessfeasibility assessments

864

2,400

Support for M&As and Business Succession

Staffing Business

Number of new
customers

1,109

3,900

Although M&As did not reach the plan due to the impact of

A total of 869 inquiries including 168 contracts since the

Number of cases for M&As
and business succession

COVID-19, business succession has progressed better thanservice started in April 2020. Started new job-seeking

146

435

planned, with increased inheritance support for the wealthy.

business (career advisor and recruiting advisor) in October

Number of staffing
contracts

99

320

We respond meticulously to changes in the business environment for customers by not only offering financing and othertypes of financial support but also helping customers address non-financial issues, such as COVID-19 and decarbonization.
We will continue to take flexible measures, including expansion of consulting menu according to customer needs.

2021 and focused on staffing for management positions.
(Number)

200

100
50

Smooth and diverse financing
Business matching, overseas business development,
manufacturing, efficient use of real estate, asset management,risk management, etc.
Businessfoundation

M&A / businesssuccession

Management
improvement andturnaround

Labor shortages, organizational
restructuring
Creation of businesses suited to theregion0(Number)Business succession
M&A

600
500

120

110

129

97

Productivity improvement by ICT
utilization
Branding in the primary industry andtourism

Number of new inquiries
Number of contracts

400

13

17

35

40

300

Fiscal 2020

Fiscal 2021

Fiscal 2022 (Plan)

Fiscal 2023 (Plan)

200

ICT Consulting

69

99

Fiscal 2020

Fiscal 2021

0

As a result of responding meticulously to changes in thebusiness environment for customers such as the

Number of proposals

800

Number of contracts

400
150

100
Fiscal 2022 (Plan)

Fiscal 2023 (Plan)

Financingdevelopment of remote work environments, both the(Number)

400

491

378

100

number of proposals and the number of contracts increased.

ESG/SDGs as business
opportunities

Support inconsideration ofcooperation withpartner companies,
external experts, local
public entities, etc.

554.5

3,250
306144

Started handling “ESG/SDGs Finance” and “green bonds” inApril 2021.
S upporting customers’ efforts toward sustainable management,
which is of increasing social interes

700
600

ESG/SDGs Finance and Green Bonds

500

700

400
200
100

600

483

300

252

59

75

Fiscal 2020

Fiscal 2021

60

Transition loans

Sustainability linked loans

Green bonds

70

0
Fiscal 2022 (Plan)

Green loans

Fiscal 2023 (Plan)

Corporate Data

Systemdevelopment

Securities

540.3

3,000

Formulatingconcrete supporting
measures forenhancement ofcorporate value

3,066
359115

Solution revenue

Regional and social issues
Lease

525.0

4,000

5,054
139
908

Fiscal 2021–
Fiscal 2023
Cumulative Plan

(Various issues and needs in business stages and value chains)

Strengthening
consultation capabilities
at the entire Group

505.4

496.6

400

5,000

Sustainability

Purchase
Logistics

0

6,000

Fiscal 2021
Results

Reform/DeclineMatured

1,784

1,437

OthersOverseas, derivatives
Corporate solutions
revenue*(Millions of Yen)

Identifying andsharing customers’
management issues

Key Action Plans

Customer issues and needs
Growth

2,500

500

150

Businessfoundation

5,000

Business Strategy and Plan for
Realizing the Long-Term Vision

All strategies in the Fiscal 2021 Medium-Term Management
Plan are for the improvement of customer experience. They
are formulated based on our customers’ issues and needs.
Corporate related strategies focus on measures for fundsupply, business support, and management support, based on
business feasibility assessments from ESG/SDGs perspectives.
Such perspectives take into account regional and social issues,in order to offer concrete solutions to issues and needs ourcustomers face in their business stages and value chains, andto overcome those issues and needs together based on
business feasibility assessments from ESG/SDGs perspectives,
such as regional and social issues.

7,500

Value Creation Story

Fiscal 2021 Medium-Term Management Plan

1,005

524

0

Owing to contributions from financing and derivatives, etc.,
plans for the final year (fiscal 2023) of the current MediumTerm Management Plan were achieved ahead of schedule.

Letters from theManagement

600

6,257
2,062

1,749

(Billions of Yen) 391

550

4,468

(Number)

5,393

Solution Revenue Results

Holding Company

We promote business feasibility assessment to strengthen transactions with corporate customers, our key revenue base, and help ourbusiness partners increase their corporate value. Our headquarters and branches work together to offer loans and engage in
consulting sales.
For customers that have undergone business feasibility assessments and are considered particularly important by branches, weprepare Mirai Support Sheets and hold business feasibility assessment investigation committees. Our headquarters and branches thusalign their views on business partners’ issues and how to address them, as well as on policies for future initiatives.
As a result of the above efforts, solution revenue for fiscal 2021 totaled approximately ¥5.0 billion, exceeding the plan byapproximately ¥1.8 billion. We will continue to aim to create enhanced corporate value for customers and expand Group revenue byaddressing customer issues and needs.

About Iyo Bank

Corporate Related Strategies

Financial support for customers’ sustainable management sophistication

IYO BANK Integrated Report 2022

30

Business Strategy and Plan for Realizing the Long-Term Vision

Introduction of Corporate Portal
Support for Overseas Business Development

China

Hong Kong
Representative OfficeIndia

Shanghai Representative Office

ChinaBank of Communications

State Bank of India (SBI)

International Division
ThailandToyo Business Service PCL
Dispatched one employee
Kasikorn Bank

Taiwan CTBC Bank

Thailand

Vietnam

FORVAL VIETNAM CO., LTD
Dispatched one employee

Philippines

Metropolitan Bankand Trust Company

Joint Stock Commercial Bankfor Investment and Development
Vietnam of Vietnam (BIDV)
MexicoSingapore

Banamex(Number)

United Overseas Bank (UOB)

20,000Indonesia

Singapore Branch

In August 2022, we plan to release Iyogin Business Portal. It is a corporate digital platform that takes advantage of the authentication
infrastructure for corporate internet banking and the customer base of approximately 18 thousand members, with an aim ofsupporting digitalization of companies in the religion.
Iyogin Business Portal will be available for corporate internet banking; electronic delivery of a range of forms; and inquiries of
information on other banks’ accounts, using Money Forward, Inc.’s account aggregation technology.
We also aim to establish a model for introducing customers to other services without face-to-face meetings, such as offering amenu of solutions through the portal and recommending external paid services.
We are considering the development of further functions with an eye on bank employee use, thereby expanding its use as a newcommunication channel.

PT Bank Negara Indonesia(Persero) (BNI)

17,706

17,500Central Pacific Bank

15,000

Hawaii, U.S.A.

11,394 11,893

12,50012,824 12,765

14,120

D
Collecting
data
Identifying
issuesH

ConsideringsolutionsFiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

CASE 2
Supporting export from Ehime Prefecture to
Singapore using live streaming commerce
Using live streaming commerce, we helped export-oriented
food companies in Ehime Prefecture expand overseas sales
channels. This was a great test marketing opportunity forcustomers targeting Singapore, with the participation of 20
food companies in the prefecture. We will continue to provide
indirect support for our customers’ overseas expansion.

Meeting

Recommendations(Introducing external
services to customers)

Using digital
services

Issue
solvedIdentifying issues by utilizing digital tools (D) and aiming for proposing communication solutions with humans (H) acting as agents, providing new customer experience value (H + D)

Cooperation with the Group, Partner Companies, etc.
In solving customers’ management issues, we provide
integrated solutions through not only the Bank but also
cooperation between the Group, partner companies, etc. The
entire Group will work together to address a wider range ofissues, including those in fields beyond the scope of the Bank’s
expertise, and provide one-stop contact to respond to
customer needs.

• Smooth and diverse financing • Business foundation• Business matching• M&A/business succession• Overseas business• Management improvement

development• Manufacturing• Efficient use of real estate• Asset management• Risk Management

and turnaround• Primary industries• Staffing• ICT consulting, etc.

Key Efforts of the GroupP rovide diverse funding sources amid uncertainties suchas the COVID-19 pandemicP rovide optimal solutions related to payments in linewith the business scale and needs of the company
Measures	Issuance of business owner credit
cards in cooperation with Group
companies targeting start-ups andsole proprietors
Business alliance with BNPL businesses
FutureE xpansion of B-to-B payment services
measures(purchasing cards and services
targeted at franchises)

Number of leasing contracts via the Bank’s introduction

1,500

Initiatives at the Singapore Branch

1,000

Established in December 2016, our Singapore Branch not only collects the latest local information but offers financial support mainly
to local shipowners, rolling out our long-standing know-how in loans for ships.

933

1,024

Fiscal 2020

Fiscal 2021

1,200

1,300

500
0

Fiscal 2022 (Plan)

Fiscal 2023 (Plan)

Singapore Branch Loan BalanceCooperate with IRC to facilitate local government’s
digital transformation (DX)(Billions of Yen)
250

216.4
189.7

200

102.4

100

65.1

50

1.5
March 201731

IYO BANK Integrated Report 2022

March 2018

March 2019

March 2020

March 2021

Corporate DataT he Bank has entered into a collaboration agreementwith Kihoku Town, NTT DOCOMO, INC., and Iyogin
Regional Economy Research Center, Inc. to promote DX
in Kihoku Town.
The collaboration aims to solve issues in the region bytaking advantage of the four parties’ human resources,know-how, and networks and facilitating efficient DX.

149.1

150

0

Sustainability ooperate with IDC to provide settlement services
Ctargeting corporations

Business Strategy and Plan for
Realizing the Long-Term Vision ooperate with Iyogin Leasing to support customers inCcapital investment(Number)

TOPIC

H+D
Execution ofsolutions

Value Creation Story

To support our customer’s business in India, we filed a joint application to JICA’s SMEs/SDGs business support program, with ourbusiness partners, with an eye to be accepted as a regional financial institutions cooperation project. This became the first successful
application in Shikoku. The customer can take advantage of JICA’s public nature, established reputation, and contacts and expand its
overseas business smoothly.
The Bank will continue to use support schemes offered by public institutions and strengthen support for our customers’ overseas
business development.

H+D
Proposal forsolutions

Account linking (Single sign-on)0

Supporting Business Development in India through JICA’s regional financial institutions cooperation project (first in Shikoku)

H+D

Letters from theManagement

Provisionof digitalplatform

10,000CASE 1

H+D

Holding Company

Employees with overseas experience (overseas locations:Singapore, Shanghai, and Hong Kong; overseas trainees:
Thailand and Vietnam) in the International Division, together
with overseas locations form an independent network andsupport the expansion of customers’ overseas business. To
meet increasingly sophisticated customer needs for overseas
business solutions, we work to upgrade our overseas
consulting function in close cooperation with public
institutions such as Japan External Trade Organization (JETRO),
Japan International Cooperation Agency (JICA), and Japan
Bank for International Cooperation (JBIC);, as well as overseas
partner banks; and private sector companies.

Bank of Dalian

About Iyo Bank

Corporate Related Strategies

March 2022

IYO BANK Integrated Report 2022

32

Business Strategy and Plan for Realizing the Long-Term Vision
Provide integrated solutions for eachcustomer in all channels and realizeenhancement in customer experiencevalue

Consulting and Proposals According to Life Stages
To fulfill each customer’s life plan, we provide optimal services and improve CX in response to three types of customer needs: “saving
and increasing,” “preparing,” and “preserving and bequeathing.”

Life Stages

Asset Building Stage (20s - 40s)
Get
Have
married children

Saving andIncreasing
Needs

Asset Using Stage (50s - 60s)

Homepurchase

Children leave
home

RetireAsset Bequeathing Stage (70s -)ReceivepensionPrepare for
Bequeathing

While trying to prolong the asset
life-span

For the future and elder years

Preparing

Protection in line with life events

Organizing protections for elder years

Preserving andBequeathing

For beloved family members

Holding Company

Start ajob

About Iyo Bank

Personal Related Strategies

Saving and Increasing

Customers have a range of issues and needs at different life stages, such as “easy and convenient,” “borrowing,” “saving andincreasing,” “preparing,” and “preserving and bequeathing.” Our personal related strategies strive to improve customer experience(CX) by providing, as the entire Group, integrated solutions to such issues and needs. To deliver optimal CX to each customer, it isnecessary to have contact points in all channels, whether physical or digital, channels and provide solutions at the best timing.
The Fiscal 2021 Medium-Term Management Plan aims to further deepen and evolve existing DHD services to enhance CX.

Birth–
University

Graduation–
Start a job

Get married

HavechildrenFiscal 2021 ResultsHomepurchase

Saving andIncreasing

Borrowing

Key Action Plans

Buy
insurance

Assetmanagement

Education
expensesAsset
succession

Bequeathing
and transfer

Amount of retailcashless settlements

Number of new
SAFETY contracts

HOME
HOME rate*1

Group assets incustody balance

Number of level
premium insurance
customers

Number ofinheritance trust, etc.
customers¥27.7 billion

1,550

70%

¥617.1 billion

31,328405

7,200

80% or more

¥677.0 billion*1 Percentage of housing loan application using HOME *2 Amount at the end of fiscal 2023
*3 Balance at the end of fiscal 2023 including individual time deposits in foreign currencies

33

IYO BANK Integrated Report 2022

39,500

730

565.5

553.1
202.4

245.2

246.0

267.0

285.0

199.5

366.0

350.7

360.1

371.1

377.0

392.0

300
200
100
0
March 2019 March 2020 March 2021 March 2022 March 2023 March 2024
(Plan)(Plan)

Population aging The needs for bequeathing haves been
increasing the needs for bequeathing due to the progressin aging of population, and the needs have also become
sophisticated and diverse. To fulfill wishes of each customer,
we offer a range of relevant products and services, including
a wealth of life insurance products, will writing support, civil
trust, and handling of the bequeathing process. We are thus
prepared for total support while in life before until after theactual bequeathing event occurs. In recent years, longer life
expectancy has increased the needs to prepare for nursing
care and dementia as well. To meet such needs, we provide
personalized one-stop consulting to accommodate ourcustomers’ wishes, with relevant life insurance products andMagokoro Letter, a testamentary trust introduced in April
2021 that allows withdrawal while one is still alive.

Level Premium Insurance

Number of Customers of Trust-Related Contracts

Number of Customers
Number of Policies Held

48,32361,74022,70926,33028,72268,50031,32836,000(Number)

730

800

53,82639,500

552

600

405
400
200

168

229

268

Corporate Data

¥40.0 billion*2

677.0

We provide sophisticated insurance consulting in cooperation
with HOKEN NO MADOGUCHI GROUP. This is to deliver safety
and security through protection-type insurance, in response tocustomers’ wishes to prepare for imminent risks from changes
in life events and alleviate concerns over future life design. In
Ehime Prefecture, we have established dedicated insurance
plazas and appointed insurance consultants whom customers
can speak to at branches. Online consultation is available forthose who cannot access such plazas or consultants, thereby
creating a structure to offer services to a wide range ofcustomers.

43,365

*3

400

644.0

Preserving and Bequeathing

36,712
Fiscal 2021–2023
Cumulative Plan

500

605.3

Preparing

Preserving andBequeathing

Preparing

600

The Bank

617.1

Sustainability

Easy andConvenientCarpurchase

Shikoku Alliance Securities

700

Business Strategy and Plan for
Realizing the Long-Term Vision

Customer Issues and Needs(Billions of Yen)

Value Creation Story

Fiscal 2021 Medium-Term Management Plan

Change in Group Assets in Custody Balance

Letters from theManagement

In the era of 100-year lifespans, it has become increasingly necessary for customers to design their futures,and build assets and prepare funds in a planned manner. The Bank will offer consulting services for better
lives of customers, by staying close to their lives more than ever and making proposals according to theirlife plans and needs.

To meet the needs for saving and increasing, we support
stable, long-term asset formation according to customers’
dreams and concerns. Our basic policy is to diversify in termsof time, currency, and assets. We help our customers create aprosperous future by investing in mutual funds in installments
to diversify in terms of time, taking advantage of tax breaks
from such schemes as defined contribution pension plans(iDeCo) and Nippon Individual Savings Account (NISA),
proposing portfolios using a financial asset analysis tool (iAD),and providing sophisticated consulting in cooperation with theGroup’s securities company.

0March 2019 March 2020 March 2021 March 2022 March 2023 March 2024
(Plan)(Plan)March 2019 March 2020 March 2021 March 2022 March 2023 March 2024
(Plan)(Plan)IYO BANK Integrated Report 2022

34

Business Strategy and Plan for Realizing the Long-Term Vision
House Purchasing Plan with a Smartphone

DHD Services
Simulation Tool That Allows Customers to Chart
Various Future Plans
Providing value provided for customers
 o understand how to improve financial health and whatT
product or service fits oneself most• Finding not only money, but also how to realize one’s dream• Consult with an advisor•“From simply product provider to service provider responding to customers’ essential needs”
House Purchasing without Fail

Evolving business model• Increased HOME rate (reached 70%)

• Progress of utilization of HOME TICKET at the offices of housing companies• Expanded usages of “HOME HOUSE BUILDER,” targeting housing companies (195

identifying the borrowing amount available

locations as of March 31, 2022)

Cooperation with Different Industries

Renewal of Housing Loans Line-up• From April 2022, business matching agreements with SUUMO Counter (in Ehime• From April 2022, the longest borrow period became 40 years (fixed rates for initial period type)

Prefecture) and Ie-zukuri-gakko• Ongoing special interest rate promotion (minus 0.2% from other promotions) (until• Ensure customer contact points from the house purchasing consideration phase• Enhancement of housing loans and stronger revenue from business matching fees

See here forservice details(Billions of Yen)

Balance of housing loans
HOME rate*

1,050
1,000

800

80

80

49
870.7

100

60

970.0

885.6

1,030.0

Download
here

40
20

0
Fiscal 2020

Fiscal 2021

Fiscal 2022 (Plan) Fiscal 2023 (Plan)0*Percentage of housing loan application using HOMENew Card Loan Service That Issues Notifications
on Insufficient Amount“Card loan as an ordinary tool useful in daily life”
Renewal to card loan “distinctively by bank”
in February 2022
 wo types: “Standard,” and “Premium,” which requires anTannual income certificate• Interest rates for the Premium type are based on “riskranking” instead of the “borrow amount”• With the ability to start from a smaller borrow amount,then increase the amount when necessary (approx. 20% of
the users have increased their borrow amount)•

Drawing in ‘higher-class’ and ‘needs for additional funds’
Number of cumulative contracts(Number)

7,900

8,000

*This process does not identify
an individual.
*Customers can apply forloans without going throughthe check.

35

IYO BANK Integrated Report 2022

Download
here

6,000

5,300

4,000

2,233

2,000

683
0

Fiscal 2020

Fiscal 2021

Fiscal 2022
(Plan)

Ongoing Expansion of AGENT App Functions
 doption of the agile development method has allowed aA
constant expansion of functions since the June 2021 release.
In December 2021, monthly balance, Visa debit overuse
prevention line, and other functions were added, and theapp became available for Android devices.
In April 2022, we became the first bank in Western- Japan
to issue real-time Visa debit statements.
In July 2022, a new function was added to skip part ofaccount registration procedures at branches and make iteasier to start using the system.
Further enhancement of usability and addition of functions
are planned to offer new counter service experience tousers.

Download
here

Corporate Data

Check how much you
can borrow
Just answer chat questions
online or via the app.
Complete in one minuteat the shortest.

AGENT is a smartphone app that enables access to counters from anywhere. Customers can open ordinary and time deposits
accounts, change addresses, and go through other procedures as they video chat with our staff. Based on the conversation, the staff
member in charge can register information on behalf of the customer. Those who are unaccustomed to smartphones can therefore
feel comfortable using the service.
Adoption of agile development has allowed systematic enhancement of usability and addition of functions since the app’s releasein June 2021. For example, the balance inquiry, video chat appointment, and personal loan application functions have been added.

Sustainability

Borrow through the app

Iyo Bank on Your Palm
Business Strategy and Plan for
Realizing the Long-Term Vision

SAFETY, a digital card loan service, is an app that allows
one-tap borrowing and repaying around the clock. It frees
customers from lining at an ATM. The app displays scheduled
deposits and withdrawals and notifies of insufficient balance,
based on deposit balance, scheduled amounts of deposits andwithdrawals, credit card statements, and other information.
Customers can also increase the borrow amount through theapp after starting the use. We renewed the service in February
2022 to introduce the Premium type, which offers a betterinterest rate even if the borrowing amount is small.

Value Creation Story

900
850

December 2022)• Scheduled to expand the line-up of group credit life insurance

(%)

70

70

950

• Less administrative workload on customers, housing companies, and the Bank

Letters from theManagement

 y taking action based on advance knowledge of users’ lifeB
events, it makes timely proposals for adequate advice andproduct/service possible• Enhancing appeal for customers in the mass retail category,
which has been difficult to approach, by cooperation ofvarious channels•

Expanding Support as a Housing Loans Infrastructure• With HOME TICKET, it becomes possible to formulate a house purchasing plan by

Holding Company

LIFE PALLETTE is a digital tool that simulates changes inhousehold finance balance and assets, based on future life
events entered from customers’ own smartphones or tablet
devices. Customers can check their financial health andconsult with advisors at the counter if they have any concerns.
We thus provide support for life plans tailored for eachcustomer’s life plan.

HOME, a smartphone-based digital housing loan service, allows customers to apply for housing loans and sign loan agreements
around the clock.
The service has become more convenient with the enhancement of such related services as HOME TICKET, which simulates theborrowing amount available, and HOME HOUSE BUILDER, an online service for housing companies.
In April 2022, we renewed our housing loan product (fixed rates for initial period type products) line-up for the first time inapproximately 11 years, for which the longest borrow period for fixed rates for initial period type products was extended from 35
years to 40 years. We have thus created a structure to meet a wide range of needs.

About Iyo Bank

Personal Related Strategies

Fiscal 2023
(Plan)IYO BANK Integrated Report 2022

36

Business Strategy and Plan for Realizing the Long-Term Vision
Appropriately grasp changes in themaritime industry’s business environmentand support business investments thatare optimal for customers

Ehime
Ehime

15.7%

32.7%

(1.87 million
gross tons)

Other than
Ehime 67.3%

Other than
Ehime 84.3%

No. 1 in Japan

3,663 total vessels in Japan

11.92 million gross tons of new vessels(including operators)

constructed in Japan

1,064.4

37

IYO BANK Integrated Report 2022

665.6

730.3

709.1

768.4

September
2020

March
2021

September
2021

March
2022

603.9

645.1

September
2019

March
2020

(Billions of Yen) [Breakdown of changes in balance for domestic and overseas ocean transport
in the second half of fiscal 2021]
800
780

768.4

(36.3)
760

+38.7

+76.0
740
720

*Ranking excluding vessels owned by major oceantransport companies

280.9

242.7

203.5

296.0

266.1

221.8

700

(19.1)

Compared
to Sep. 2021
+59.3

709.1
September
2021

New
transactions

Scheduledpayment

Advance Impact of foreign March
repayment exchange rates
2022

IYO BANK Integrated Report 2022

Corporate Data

No. 1 in JapanFor other maritime industries and overseas (Billions of Yen)
For Domestic and overseas ocean transport

Sustainability(1,199 vessels)

Loan Balance for the Maritime Industry
Business Strategy and Plan for
Realizing the Long-Term Vision

New vessels constructed in Japan
Fiscal 2020

As a result of the above initiatives, the loan balance for the
maritime industry as of March 31, 2022 stood at ¥1,064.4
billion. Of the total loan balance, the balance for domestic
ship finance was ¥768.4 billion, an increase of ¥59.3 billion
from September 30, 2021. The balance for ship finance has
been increasing thanks to the weaker yen, as well as to the
support from ship owners who appreciate our stance onloans and have been regular customers of our financing. The
increase has been taking place despite a reactionary decrease
after last-minute constructions to complete by 2020 to meetthe regulations and an increase in advance repayments due
to ship sales against the backdrop of a used ship price surge.
Loans for shipbuilding yards and other maritime-related
businesses also increased since we responded to the needs forloans related to COVID-19 countermeasures and The Nippon
Foundation’s business foundation enhancement loans. In
addition, the balance for overseas has been increasing steadily.
The Bank will continue to actively engage in relevant
initiatives, with the major goal of supporting optimal
investments for customers, and without being bound only bychanges in the loan balance.

Value Creation Story

Number of ocean-going vessels
owned by domestic ship owners(As of September 2020)

Balance for the Maritime Industry

Letters from theManagement

In Ehime Prefecture, there are approximately 80 offices of ocean-going vessel owners, and they effectively own roughly 32% of
all ocean-going vessels owned by Japanese companies. Ocean-going vessel owners in Ehime are known in the world as “Ehime
owners.”When it comes to shipbuilding, approximately 15% of all ships constructed in Japan are from Ehime Prefecture. The figure rises
to roughly 30% if combined with the proportion of ships constructed in other prefectures by Ehime-headquartered shipbuilding yard
groups. Thus, shipbuilding also can thus be considered as an important local industry in Ehime, ranked top-class in Japan. The Bank’s
ship finance aims to support the growth and development of these local maritime and shipbuilding industries, as well as the entire
maritime cluster that includes relevant industries. We have long grown together with our customers.
As described above, the role of our ship finance is to, as a member of the local maritime cluster, help the development of Japan’smaritime-related industries in general. Based on such an understanding, we actively engage in business activities every day.

Under the basic policy of “appropriately grasping changes in the maritime industry’s business environment and supporting business
investments that are optimal for customers”, ship related strategies in the Fiscal 2021 Medium-Term Management Plan focus on the“improvement in risk consulting capabilities concerning the shipbuilding and ocean transport industries”, “improvement in research
and analysis capabilities concerning the maritime industry in general”, “control of credit concentration risk concerning ship finance”,
and “enrichment in activities connecting domestic andoverseas maritime industries” as its principal measures. We
Improvement in Research
Improvement in Risk
and Analysis Capabilities
Consulting Capabilities
have been actively working on relevant initiatives.
Concerning the Maritime
Concerning the
For example, we have been considering productivity
Industry in General
Shipbuilding and Ocean
improvement and other measures together with shipbuilding
Transport Industries
yards to address issues identified through discussions with
Deepening into Bank-wide
Understanding the industry andthem.
efforts for more appropriate
advancing efforts to solve problems
We have also made risk hedge proposals utilizing financial
business feasibility assessments
through wide-ranging cooperation
derivatives, and are striving every day to explore and proposeof the maritime industry
with maritime clusters centered on
Tokyo and Imabaribetter ways to control various risks for ship owners.
Furthermore, we aim to link active information exchangewith a wide range of maritime businesses, mainly conducted
Provision of Diverse
Enrichment in Activities
by the Tokyo Desk of Ship Finance Division, to business
Funding
Sources
Connecting
Domestic andmatching and case intermediation between maritime
Overseas
Maritimebusinesses.
Industries
Going forward, our activities will be directed toward
Implementing syndicated loans
Aiming to provide new value
broader and deeper win-win relationships with ship owners,
for high-priced ships, based on
unique to the Bank for businessthe framework of the TSUBASA
opportunities such as chartering
shipbuilding yards, ship equipment manufacturers, and otherAlliance, etc.
and selling ships
members of the maritime cluster.

Holding Company

Ship Finance as Support to Local Industries and Role as a Member of the Maritime Cluster

Fiscal 2021 Medium-Term Management Plan

About Iyo Bank

Ship Related Strategies

38

Business Strategy and Plan for Realizing the Long-Term Vision
Be conscious of overall profit and loss
that lead to stable profit and future
profit and diversify investments with afocus on liquidity

Balance of Securities at Market Value by Risk Category

2,000

620.0
757.6
335.0

1,500

Of
which,
JGBs

)

427.4

362.5
500

Duration(Years)

540.0

348.9

6

300.0

408.8

374.2

380.0

2

142.8
March 2021

146.7

160.0
March 2024
(Expected)

0March 2022

Foreign bonds (with forex hedges)

8

300.2

297.9

Yen-denominated bonds

10

295.6

192.7

105.6
0
March 2020

530.0

520.1
100.0

188.5

•

4

March
2020

March
2019

March
2021

March
2022

March 2024
(Expected)

Holding Company

(

1,000

Yen-denominated bond portfolio
10BPV ¥2.8 billion
Foreign bond portfolio (with forex hedges)
10BPV ¥1.8 billion• Foreign bond portfolio (without forex hedges) 10BPV ¥1.8 billion / Exchange ¥10V ¥24.5 billion• Stock portfolio
Nikkei Stock Average ¥1,000V ¥9.9 billion•

Yen-denominated bonds
Foreign bonds (with hedges)
Foreign bonds (without hedges)
Domestic and overseas stocks (including investment trust)
Alternatives, etc.

(Billions of Yen)

Portfolio Risk Sensitivity (As of March 31, 2022)

About Iyo Bank

Market Investment Strategies

Policies for Loan Management and Foreign Currency Procurement

Risk category

Foreign bonds(with forex
hedges)Foreign bonds(without forex
hedges)Investment policy
Keep the balance as a bond including foreign
bonds as assets inversely correlated with stocks.
• For foreign bonds (with forex hedges), the balanceis temporarily shrunk in anticipation of risinginterest rates. In the future, the balance is planned
to be restored gradually.
•

Restorebalance

Adjust the balance and implement strategic rebalancing according to the situation while keeping
a certain amount to secure stable profit from carrytrading.

•Notchange

130.0

130
120

120

58.3%

10.9%

March 2021

March 2022

March 2024
(Plan)

Japan
EuropeMiddle East

North America
Asia/Oceania
Central and South America, etc.

NotchangeConsider investment to secure stable carrying andportfolio diversification.

•Electricity and gas
Manufacturing
Finance

Transportation
Various services
Other

Status of Foreign Currency Investment and Procurement [March 31, 2022]<Loans + Market Investment (Securities)><Only Loans>

400
101.4
286.8

90
60
30

300
200

24.2

30.8

28.2

26.7

Mainly assets with high liquidity

Investment

100

Loans 69.1%

Securities, etc. 30.9%

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

Investment

0
March 2020

(9.7)

March 2021

March 2022

1.64%

1.69%

(1.54%)(1.54%)(1.85%)(1.94%)

Total Yield

Mainly assets with low liquidity

Stability gap is positive(excessive investment)

1.64%(Domestic currency yield)(1.43%)(Foreign currency yield)(2.32%)

0
Total for thelast 10 years(right axis)

Procurement Deposits, etc. 31.6%

Long-term
procurement
25.8%

Short-term
procurement
18.3%

Repo
procurement
24.3%

Procurement Deposits, etc. 43.2%

Choose foreign currency procurement methods in linewith asset composition

0

20

40

Loans withmulti-currency terms

Loans, etc.

•

Alternatives,
etc.

55.6%

10.7%

100

March 2020

Realized profit/loss (= Interest and dividend income + gain (loss) related to securities)
Total profit/loss (= Periodic profit/loss + change in gain/loss on evaluation)(Billions of Yen)
(Billions of Yen)
150
500
453.9

10.7%

14.6%

110

4.0%

10.2%
11.2%

119.3

118.0

117.6

<Industry>

60

80

Long-term
procurement
35.1%

Liquidity gap is negative(excessive procurement)
Commitment
line
28.4%

Cash flow risk is guaranteed with commitment lines

100 (%)

0

20

40

60

80

100

120

140 (%)

Corporate Data

Sell off stocks held for strategic purposes if thenecessity of holding is not recognized.
Domestic and•
Decrease Purchase stocks held solely for investment
overseas stocks
purposes of which growth is expected in themedium- to long-term view.

(Billions of Yen)
140

8.1%

2.8%

Sustainability

Yendenominatedbonds

Direction<Region>

2.9%

0

Securities Performance

Portfolio by Region and Industry (Financial Market
Business Office)Business Strategy and Plan for
Realizing the Long-Term Vision

Investment Policy by Risk Category

Loan Balance Plan (Financial Market Business Office)Value Creation Story

We manage securities under the basic policy of “be conscious of overall profit and loss that lead to stable profit and future profit anddiversifying investments with a focus on liquidity”. It is our policy to keep Aa certain proportion of bonds are kept as assets inversely
correlated with risk in stocks.
We have been taking a restrictive stance on holding yen-denominate bonds due to the negative interest rate and yield curve
control in Japan, because such policies not only make new investments in yen-denominated bonds unprofitable but also result ininsufficient diversifying effects with limited scope of interest rate fluctuations. Meanwhile, we were increasing the balance of foreign
bonds (with forex hedges), expecting relative advantage of investing in them.
Anticipated interest rate rise worldwide, however, prompted us to restrict new investments and sell those bonds in fiscal 2021,
significantly reducing the balance. In addition, the duration became shorter. As a result, we believe that we were able to rein in the
expansion of evaluation loss caused by an interest rate rise, and the current portfolio ensures sufficient investment capacity that leads
to future profit. Going forward, we plan to keep a close eye on interest rate trends and restore the balance by fiscal 2023, the final
year of the Medium-Term Management Plan.
The duration of foreign bonds (without forex hedges) has become shorter as well, although the balance has remained roughly
the same. The rapidly weakening yen expanded evaluation gain, and bond switching during the fiscal year improved investment
yields. We plan to adjust the balance and implement strategic re-balancing according to the situation, while keeping a certain
amount of balance.

Letters from theManagement

Investment Policy for Investing in Securities

Since its establishment in 2014, the Financial Market Business Office has accumulated high-quality loan assets centered around
domestic and overseas project finance, while being mindful of diversifying the portfolio. Our portfolio by region, while focusing onloans with the final risk lying in Japan, such as loans for solar, biomass, and wind power generation and other types of renewableenergy and loans guaranteed or insured by a Japanese export credit agency,. Meanwhile, we diversify risk across the world, including
North America, Europe, and Asia/Oceania. We will continue to accumulate loan assets with a focus on not only profitability andsafety buts also ESG, etc., which is attracting increasing interest in recent years. We aim for a loan balance of ¥130 billion by the endof fiscal 2023, the final year of the current Medium-Term Management Plan.
We choose foreign currency procurement methods according to asset characteristics, thereby ensuring stable procurement andcoping with interest rate fluctuations in the procurement. In addition, commitment lines are set above the necessary amount ofprocurement for each period, ensuring stability in the face of sudden changes in the market environment and other contingencies.

Stability gap: Loans, etc. - (Deposits, etc. + Long-term procurement)
Liquidity gap: Loans, etc. - (Deposits, etc. + Long-term procurement +Commitment line)

39

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

40

Business Strategy and Plan for Realizing the Long-Term Vision
Aim to increase productivity of the entire group by minimizing
administrative and routine work and enhancing manpower
available for customer interactions and planning work

Other Measures

Headquarters-centralizing measures include centrally receiving
phone calls, centrally keeping retained documents at theheadquarters, setting up the Administrative Work Support
Center and Loan-Related Administrative Work Support Center(centrally handles loan-related administrative work related toloan operations of bank branches). By expanding the scope ofbranch administrative work centrally handled by theheadquarters, we are reducing administrative workload atbank branches.

• UBE system for management of customer property in ourCcustody
Using Windows terminals, the system electronically manages
receiving, returning, and processing of customer property
that comes in our custody through sales activities, etc.
• Electronic contracts for business feasibility loans
In accordance with the Act on Electronic Signatures andCertification Business, the system enables online contract
execution by replacing paper documents with electromagnetic
records and signatures and seals with electronic signatures.

Productivity Improvement at Headquarters

Branches Shift Focus from Administrative Work to Problem Solving

Digitization and Simplification of Administrative WorkAs a result of taking various BPR measures, we reduced 341 ofadministrative staff members in charge of operations (as ofMarch 31, 2022) and 29 of those in charge of loans (as ofMarch 31, 2022) from March 31, 2018. To allocate more timeto problem solving for customers, surplus human resources
generated by the reduction are reassigned to work in the sales
field or on further headquarters-centralizing to enhanceservices in the digital field, thereby allocating more time toproblem solving for customers.
As of March 31, 2022, yearly workload at theheadquarters has decreased by approximately 133 thousand
hours (equivalent to 68 staff members). We will take measures
to further increase efficiency, with the goal of reducing yearly
workload by 200 thousand hours by the final year of thecurrent Medium-Term Management Plan.

Staff in Charge of Operations

Staff in Charge of Loans

Effect of Headquarters Workload Reduction(Persons)

AGENT tablet

500

433

400

350

1,200

1,306

1,253

900

Administrative workload (Thousand seconds)
500
Number of administrative
staff members
400
1,142
1,026

300

965
800

600
300

200
100

0

0
March
2018

March
2019

March
2020

March
2021

March
2022

March
2024
(Plan)

200 thousand
hours/year(Ten thousand hours)

20

RPA
BPR

16

133 thousand
hours/year

12

Sustainability

100
200

8
50

100

4

0
March
2020

March
2021

March 2024
(Plan)

March
2022

0

0

March
2018

March
2019

March
2020

March
2021

March
2022

March
2024
(Plan)

Yearly Working Hours (Per Person)

Cashless Processing(Hours)

2,107

2,102

2,100

2,055

2,000

2,014
1,943

1,936

1,931

1,900
Satto Madoguchi(Quick Counter)<Higher awareness on BPR by employees andofficers>
Contribute to work style reforms
176-hour reduction of yearly working hours

1,800

between 2015 and 2021
2015

2016

2017

2018

2019

2020

2021 (FY)*Reference: 8 hours × 245 days (365 days - annual holidays) = 1,960 hours
IYO BANK Integrated Report 2022

Corporate Data

2,200

0

41

150

300

AGENT app

As a cashless processing initiative, we have introduced Satto
Madoguchi (Quick Counter) at next-generation branches andlinked transactions by Satto (Quick) ATMs installed at thecounters with those by branch terminals. By centrally
managing account transactions at the counter and cash
receipt and payment transactions, we have established astructure to minimize cash handling at counters.

(Thousand seconds)
Administrative workload
200
Number of administrative staff members
404
403(Persons)

1,500

Business Strategy and Plan for
Realizing the Long-Term Vision

We started full-fledged introduction of the reception tablet
device AGENT in February 2019, and have completed theinstallation at all bank branches.
Looking to be the bank with the simplest administrative
procedures in Japan, we have digitized approximately 40% of
reception-related administrative work at bank branches.
In June 2021, the AGENT banking app was introduced. It
is the first app in Japan that allows customers to go throughbank procedures via video chat. Using the video chat function,customers can open bank accounts or change addresses as
they listen to our staff and select answers to chat-stylequestions. Their identities are also checked online, and paper
forms and seals are unnecessary. Being a new channel thatoffers the same user experience (UX) as branch counters, theapp has made us realized “a bank on your palm,” accessible
from any location with customers’ smartphones.

Effects of Administrative Staff Downsizing and Workload Reduction

Value Creation Story

Since the Fiscal 2015 Medium-Term Management Plan, BPR strategies have been positioned as an important task for increasing
productivity. We not only simplified administrative work processes but also grasped the reality through research on administrative
workload. We have thus carried out a fundamental review of administrative work, exploring the possibility of abolishingadministrative tasks themselves.
Bank branches have taken measures under such concepts as “digitization and simplification of administrative work,” “cashlessprocessing,” and “headquarters-centralized.” Specifically, we are minimizing administrative work at bank branches by introducing
AGENT tablets, CUBE system for management of customer property in our custody, “electronic contracts for business feasibility loans”,
and other digital tools, have been introduced. In addition, we are minimizing administrative work at bank branches and also by
promoting Satto Madoguchi (Quick Counter) to reduce cash handling, expanding the area of headquarters-centralized operations, andcooperating with group companies. Our bank branches thus aim to shift their focus from administrative work to problem solving.

Letters from theManagement

As productivity improves at bank branches, the headquarters is also working on the improvement of operational efficiency.
In December 2017, the CoE was set up in the General Planning Division., We have which has been striving to reduce workload at
the headquarters mainly by using RPA to automate operations and making various application procedures digital and paperlessthrough groupware use. In addition to automation, digitization, and other BPR measures including abolishment and simplification ofadministrative work, the Headquarters Administrative Work Support Center was set up in August 2020 to further reduce
administrative workload. The center centrally handles general affairs operations in the headquarters.

Holding Company

Headquarters-Centralizing Measures

About Iyo BankBPR Strategies

IYO BANK Integrated Report 2022

42

Business Strategy and Plan for Realizing the Long-Term Vision

Business Strategy and Plan for Realizing the Long-Term Vision

Plan for IT

Plan for Branches

Overview of Plan for IT

Aim to diversify customer touch points by rebuilding
channels, including branches

Optimization of Branch and ATM Locations(3) Establishment of IT GovernanceWe aim for the optimization of IT investment by controlling IT
investment costs and establishing and reviewing investment
rules.

(1) Prompt and Flexible Digital Response to the
Changing External Environment and Customer
Needs
To improve customer experience (CX), we will establish anomnichannel system that offers better CX through any
channel, upgrade each channel, and develop and upgrade thereadiness for data use that creates added value.

 chieve omnichannelAcoordination
Upgrade each channel
Upgrade data use(2) Maintenance of a Secure, Stable, and Safe Banking
System148
140

Bar: Number of branches* (ATMs)
Line: Number of ATMs
650

635
142
134

600

130

128
550

120

530

100
0

March
March
March
2019
2021
2020
*Excluding branches within branches

527

524

March
2022

March 2024
Plan

500
0

Extension of Business Hours and Introduction of Next-generation Branches
Upgrade the core system
Develop internal systeminfrastructure

Establishment of IT governance ontrol IT investment costs, establish and review
C
investment rules

Having branches is regional banks’ strength absent from online banks. As a place to solve customers’ problems, which can only be doneby humans, the importance of branches is increasing. Since October 2021, the Bank has extended business hours of consultation
counters to 5 p.m. at 33 regional core branches, while increasing efficiency of branch operations. We thus work to improve convenienceand deliver added value for our customers.
Review of Branch Functions
In addition, we have introduced 101 next-generation
Extension of business hours: 33 branches *Excluding
Review of businessaccount transactions
branches, for which Satto Madoguchi (Quick Counter; semi-selfhours
Adoption of lunch break: 7 branches
terminals) and AGENT tablets etc. have been introduced, haveCore branches (full-service banking): 28 branches
Introduction of the
been introduced to 101 next-generation branches as of March
Linked branches (branches specialized in individualGroup Head system
31, 2022. We will continue with the layout changes in a plannedand counter services): 57 branches
Shift to labor-saving
manner to turn all branches into next-generation branches.
Branches located in government offices: 5 branches
branches

Efforts for Optimization of IT Investment

Effective Use of Branches and Assets<Current situation><Direction to aim for in the future>
Investment limit

Strategic

From 2021
onwardIT costs are on the rise due to strategic
investment

Issues to be addressed (1)Appropriate control of rising IT costs

 ptimization of constantly increasing IT
OassetsReduce base costs
Make room for strategic investment
IT investment based on overall
optimization

Sophistication of long-term investment forecasts

Rebuilding Channels of Contact Points with Customers
Main touch points between customers and banks have conventionally been branches. As a new channel succeeding branches andATMs, we released in June 2021 the AGENT app, which can provide the same customer experience as at a counter reception. Iyogin
SMART and Iyogin SMART plus have also been introduced as new branch styles. Thus, we are striving to diversify customer touch points.
We will continue to diversify channels through which we connect with customers, by expanding branch functions and upgradingbanking apps. In addition, we will link real channels, digital channels, and humans with each other and strive to build channels that are
locally rooted and convenient for customers.

 isualization of current IT costs from different perspectives,
Vsuch as by system or by category, as well as refined forecast
for long-term IT costs.

Establishment and review of IT investment rules
 evelopment of criteria for IT asset renewal and disposal
D(trial IT asset assessment)
Assess the business value of existing IT assets and develop andimplement criteria for disposing of low-value IT assets
 rioritization of IT investment and development projects andP
review of the plan formulation process

Contact Points with Customers (Expected)
Building Digital Channels
IB, etc.

Expanding usage of apps
and internet banking

apps

Change of lifestyles
Better IT literacy

40% decrease in customers
visiting bank branchAppsIB, etc.

10% decrease in ATM usage
ATM

VisitingbankbranchIyogin SMART

Sophistication of Digital Channels

IB, etc.
ATM

Past

VisitingbankbranchCurrent

Prevalence of cashless
payment

ATM

Depopulation and lesspreference for over-thecounter communications

Visitingbank branch

10 years fromnow

S ince the COVID-19 pandemic, contact points with customers havechanged drastically

43

IYO BANK Integrated Report 2022

<Illustration of reconstructedrenovated Nagoya Branch>

 ewly establishing micro branches for the purposeNof maintaining contact points with local customers
Introduced in August 2021 (2 branches)- Nakayama and Kaminada
Iyogin SMART plus

Corporate Data

Issues to be addressed (2)Classify investment costs into strategic investment and base<Illustration of reconstructedrenovated Fukuoka Branch>

Sustainability

Base

Rule setting such as priority
Strategically consider budgetarymeasures
Invested base cost
Areas to be reduced

Broad regional coverage, a strength of the Bank, means that we have many branches at convenient locations. We have taken theopportunity of renovating aged branches to consider including rental spaces in the reconstructed building, targeting at third parties,
based on regional needs.
Preparations are underway for the renovation of Fukuoka
Branch and Nagoya Branch. We are considering their effective
use as office buildings based on regional needs. We willcontinue to use the Bank’s branches and assets effectively andcontribute to liveliness and revitalization according to regional
needs.

Business Strategy and Plan for
Realizing the Long-Term Vision

To control rising IT costs appropriately, we visualize the current situation from different perspectives, such as by system or by category.
We have also been working to refine forecasts for system renewal costs and other long-term IT costs.
In addition, we aim to reduce base IT costs and invest in IT based on overall optimization. To this end, we will assess the businessvalue of existing IT assets will be assessed, develop and implement criteria for disposing of low-value IT assets will be developed andimplemented, and review the process for formulating IT investment and development projects will be reviewed.

Value Creation Story

As a foundation for credibility and trust, we will continue toensure stable operation of the core system. Internal systeminfrastructure will also be developed with an eye on mediumto long-term productivity improvement.

Maintenance of asecure, stable, andsafe banking system

Since the previous Medium-Term Management Plan, we havebeen reviewing our branch locations while maintaining
customer touch points, in light of the decline in regional
population and branch foot traffic.
The number of installed ATMs has also been reduced
against a background of increases in cashless settlements.
We will continue to aim for optimal allocation of branches
and ATMs in line with changing customer behavioral patterns
and diversifying needs.

160

Letters from theManagement

Prompt and flexible
digital response to
the changing
external environmentand customer needs

Review of Branches and ATM Locations(Branches) 650

Holding Company

Our plan for IT focuses on (1) prompt and flexible digital
response to the changing external environment and customer
needs, (2) maintenance of a secure, stable, and safe banking
system, and (3) establishment of IT governance to achieve (1)and (2).

About Iyo Bank

Aim for the establishment of IT governance that not only achieves prompt andflexible digital response to the external environment and customer needs, andbut also maintains a secure, stable, and safe banking system as well

 ewly establishing branches specialized in transactions
N
to respond to customers’ diversified needs
To be introduced in August 2022 (4 branches)- Wake, Johoku, Kuwabara, and Awai

IYO BANK Integrated Report 2022

44

Business Strategy and Plan for Realizing the Long-Term Vision
Aim to become an organization group creating andproviding diversified value by developing personnel
who can work actively in areas of their expertise
under a basic idea of “originating from customers”

About Iyo Bank

Plan for HR Development

Improving Special Skills

Overview of Plan for HR Development

Improving Base Skills
Corporation/Individual/Ship/Planning•• ispatching employees for corporate academy training Training program for young employees
DDispatching employees on assignments outside the Group Acquisition of external expertiseMarket••Technology••

Attending cloud-related training
Skill Compass Level 3 or higher

Improving IT-related skills
Improving the skills of developers

Short-term dispatch training in the Funds Operation & Securities Division
Dispatching employees for corporate academy training Acquisition of market knowledge

Planning (Digital Business)
Redefine and clarify development policies• Sorting according to level into “Starter,” “Operating Personnel,” and “High Level Personnel”•(1) Personnel with an Area of Expertise
Personnel with an Area of Expertise•Classify specialized skills into eight career fields

SpecialskillsBase
SkillsBasic operation knowledge and skills/Finance and IT
literacy/Business skills/Common sense and morals, etc.

(3) Responses to Diversifying Careers
Responses to Diversifying Careers
Introducing training programs by business (field) open to
all employees• Promotion of challenges to advanced qualifications
Continuation and expansion of qualificationacquisition incentive system•

We aim to improve base skills of all employees and officers bymaking Information Technology Passport a requirement for
promotion and having them go through digital businesslearning and DIA testing.
For extra skills, Digital Business Basic Workshop open to all
employees, digital personnel short-term trainee training, and
TSUBASA joint training for digital personnel constantly take place.
We thus identify and develop digital personnel candidates.

(2) Operating Personnel(Personnel with knowledge in digital planning anddesign, data analysis, etc., capable of smoothly
promoting projects and operations)Through OJT, external training, and other opportunities, we aim
to develop personnel, mainly employees in the headquarters,with knowledge and skills above a certain level.
Since March 2022, we have been offering practicalknowledge and skills through “practical training on digitalbusiness”, which is for employees who do not have muchprofessional experience in the digital field. The training allows
participants to learn necessary knowledge and skills as operating
personnel, such as IT, system development, requirement
definition, and project management. The course includes lecturesby specialized divisions and departments and external speakers
and e-learning.

Policy for digital business HR development
High Level Personnel
Personnel with high levels of expertise in digital planning and design,
data analysis, etc., capable of leading projects and operations, andguiding and supporting operating personnel
Improvement on higher-leveled
and more professional skills

Operating Personnel
Personnel with knowledge in digital planning and design, data
analysis, etc., capable of smoothly promoting projects and operations
OJT, external training and secondment
Training related to data utilization• Practical training on digital business•

Improvement on practical skills•(Targeting 50 trainees at the end of March 2024)

Starter
Personnel with basic knowledge in digital affairs and digital literacy••

Improvement on base andextra skills

TSUBASA Joint training for digital personnel
Digital Business Basic Workshop,
short-term trainees(Targeting 136 trainees at the end of March 2024)

 aking Information Technology Passport
M
a requirement for promotion• Digital business learning•

Improvement on base skills

Corporate Data

We have made training programs by business field open to all
employees, instead of nominating participants. We have also
eased location restrictions by implementing online training, in
response to workstyle changes happening due to diversified
values. In addition, our public qualification acquisition
incentive system has been expanded to motivate employees toobtain advanced qualifications. We thus develop personnel
with high levels of expertise.

(Personnel with basic knowledge in digital affairs anddigital literacy)

We develop high level personnel, who has high levels of
expertise based on accumulated project leader experiences
and obtaining highly-difficult qualifications, and can guide andsupport operating personnel.
In addition, we intend to actively recruit mid-career
personnel with specialized knowledge and experience.

SustainabilityImplementing online
training and start ofshorter classes on
demand• Introduction of educationand training apps for all
new employees• Expansion of online
learning tools•(1) Starter(Personnel with high levels of expertise in digital planningand design, data analysis, etc., capable of leading projects andoperations, and guiding and supporting operating personnel)

Business Strategy and Plan for
Realizing the Long-Term Vision

Establishment of an
Environment Which
Facilitates Autonomous
Learning

Under the Fiscal 2021 Medium-Term Management Plan, we
have formulated a plan for the development of digital businesspersonnel. We classify the kind of personnel we aim todevelop into three layers: “Starter,” “Operating Personnel,”and “High Level Personnel.” Training and other development
programs are implemented for each layer.

(3) High Level Personnel

Value Creation Story

SupportRisk management

Planning

Technology

MarketShip

Individual(2) Establishment of an Environment Which Facilitates
Autonomous Learning
For employees’ autonomous learning and growth, we plan tovisualize skill requirements for each career field and provide
guidance to help them envision on the directions they willgrow.
We have also developed an environment where employees
can make effective use of their time to learn. Specific initiatives
include continuation and expansion of online training,
introduction of education and training apps for all new
employees, and expansion of online learning tools.

Digital Business HR Development

Review of personnel system

Corporation

We revised our personnel system and reclassified the generalist
career track into eight career fields: corporation, individual,
ship, market, technology, planning, risk management, andsupport. We thus facilitate capacity and skill development witha focus on strengths and areas of expertise and aim to develop
higher-level personnel. Other initiatives include introduction of
screening tests to assign personnel with high aptitude andprevent mismatches, as well as expansion of the short-term
trainee system to offer trial opportunities.

Letters from theManagement

Base skills range from common sense, morals, and general manners to business skills and finance and IT literacy. They also include
basic knowledge and skills about corporate and individual operations knowledge and skills required for a wide range of employees.
We expect all employees and officers to identify and develop their strengths and improve base skills to collectively form a group of
consultants. To that end, our HR development measures are centered around three pillars: (1) development of personnel with an areaof expertise, instead of generalists; (2) establishment of an environment which facilitates autonomous learning; and (3) responses todiversifying careers.

Holding Company

Our plan for HR development continues to aim to become an organization creating and providing diversified value by developing
personnel who can work actively in areas of their expertise under a basic idea of “originating from customers.” Based on this stance,
we take measures to improve base skills and special skills.

As for special skills, we develop personnel with higher-level skills in four fields: “corporation/individual/ship/planning”, “market”,“technology”, and “planning (digital business)”.
Our policy is to improve special skills by implementing development in which and develop personnel who can deliver greater value
to customers. Departments in charge at the headquarters may play a central role in the development, and employees may be dispatchedto specialized institutions, including those outside the Group, to develop personnel who can deliver greater value to customers.

(Training and testing by videos)• orrespondence course, seminarsCon day-offs, and DIA testing

Base
45

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

46

Sustainability

Initiatives for TCFD Recommendations*1 TCFD (Task Force on Climate-related Financial Disclosures)

1. Governance

While being a risk to the Bank, climate change that havesignificant impacts on local communities are considered as
one of the important management issues that would create
new business opportunities.
As it is necessary for the entire organization to proceedwith considering the response to the TCFD
recommendations, we have been investigating anddiscussing the way of corporate activities toward therealization of decarbonization in a cross-organizationalmanner, involving the management planning divisions andthe risk management divisions, etc.
Matters to be discussed are submitted and reported to
the Sustainability Committee chaired by the President. The
Committee deliberates the status of responses to andinformation disclosures about environmental issues
including climate change.
We have also established the system in which importantmatters are appropriately reported to the Board of Directors
as necessary, and given its supervision appropriately.

The Board of Directors(Audit and Supervisory Committee)
Supervision

Reporting

Sustainability Committees
Discussion
and Reporting

Instruction

Subsidiary Meeting Bodies
Local Economy
Revitalization
Subcommittees

Sustainability
Subcommittees

CSR Promotion
Subcommittees

Matters to be discussed
 atters related to the formulation of a basic policy onMsustainability, and identification of material issues regarding
sustainability
Important matters concerning initiatives that contribute to
an improvement of sustainability

Composition and StructureMembers: Directors, General Managers of related
divisions of the headquarters, and presidents ofgroup companies

47

IYO BANK Integrated Report 2022

S etting of sustainable finance target
Conclusion of “Collaboration Agreement with Shikoku
Electric Power Company, Incorporated to Support Initiatives
toward Local Carbon Neutrality” with Shikoku ElectricPower Company, Incorporated
Establishment of support team for carbon neutrality measures
Expressing endorsement to “GX League Basic Concept”

As risks of climate change, we recognize transition migration risks and physical risks are recognized. It is required to takemeasures for both direct impacts on our own business activities and indirect impacts caused by customers being affected.

Transition Risks

Physical Risks

Assumed transition risks include an increase in creditrelated expense for sectors to be subject to impacts causedby responding to strengthened climate-related regulations,such as restrictions on carbon emissions, a hike in carbon
tax, and other risks. Target sectors are selected byevaluating the importance of the risk with two axes, risk
evaluation by sector (degree of impact) in light of a resultof consideration in “UNEP FI Principles for Responsible
Banking”, etc.; and the composition ratio in the Bank’s
portfolio (credit amount).

Assumed physical risks include an increase in the Bank’s
credit-related expense arising from a deterioration incustomers’ business performances and damages on
real-estate collateral with typhoons, floods, and othernatural disasters.
In addition, risks of being unable to continue businessdue to damages on the head office, branches, and otherholdings, and increases in costs arising fromcountermeasures and restoration are assumed.

<Scenario Analysis>
Transition Risks
In relation to transition risks, for our “electricity and gas”
sector, we will consider initiatives related to risks such as
strengthened regulations, etc. for transition to a lowercarbon decarbonized society are considered, based on“Orderly scenario*2” and “Disorderly Scenario*3”
announced by the Network for Greening the Financial
System (NGFS).

Physical Risks
In relation to physical risks, for the Bank’s businessborrowers, we implemented the scenario analysis about
an increase in credit-related expense caused by occurrenceof flood damage which resulted in financial impacts on
business borrowers and damages on real-estate collateraldue to occurrence of flood damage, under “RCP 2.6
Scenario (2˚C Scenario)” and “RCP 8.5 Scenario (4˚C
Scenario)”. The analysis result is as shown right*2 In this scenario, as an emission reduction policy is early introduced early andgradually strengthened, impacts of both the migration transition risks and thephysical risks are assumed to remain at relatively low levels.
*3 In this scenario, as the implementation of emission reduction policy is delayed,or countries, regions, and sectors are in disarray about the introduction andprogress of the policy or progress of countermeasures, impacts of transition
risks come to surface, while the impacts of physical risks are assumed to besmall. However, with the emission reduction policy finally introduced, impactsof physical risks are assumed to be small.

Results of Scenario Analysis Concerning Physical Risks
Occurrence of flood damage causedby climate change
Financial impacts on
business borrowers
Direct damage

Decrease in sales
due to suspensionof operations

Damage on real-estatecollateral
Impairment of collateral value

Increase in credit-related expense uponoccurrence of flood damage
RCP 2.6 Scenario (2˚C Scenario) and RCP 8.5 Scenario

Scenarios (4˚C Scenario) publicized by the Intergovernmental
Panel on Climate Change (IPCC)

Analysistarget

The Bank’s business borrowers

Analysis
methodCalculate an increase in credit-related expenses inconsideration of financial impacts on business borrowers
and damage on real-estate collateral upon occurrence offlood damage and damage on real-estate collateral, as wellas the probability of flood damage for each of the climatechange scenarios.

Analysis
periodUntil 2050, based on data as of March 31, 2021

Analysis
resultA total of ¥4.6 billion to ¥7.5 billion increase incredit-related expense

IYO BANK Integrated Report 2022

Corporate Data

Chairperson: President

Major agendas in fiscal 2021 (related toenvironmental and climate change)<Risks>Sustainability

Purpose of establishment
To discuss matters that contribute to the improvement ofsustainability overall across the Group from the perspectivesof both business activities and social contribution activities, forthe purpose of realizing sustainable environment/society andincreasing the Group’s corporate value in the medium andlong term.

We have proactively supported customers’ investments in renewable energy business and capital investment that would
contribute to a reduction in environmental burdens, and financially helped customers reduce greenhouse gas emissions andincrease energy efficiency. Thus, we are working on the realization of a lower-carbon society.
Also in non-financial aspects, in order to provide solutions for supporting customer’s decarbonization such as consulting
services for measures against climate change, we have started initiatives toward the development of regions that are robust
over climate change and the establishment of sustainable businesses, including the conclusion of a comprehensive
collaboration agreement with a local electric power company.

Business Strategy and Plan for
Realizing the Long-Term Vision<Structure>

Under the Corporate Credo of “creating a bright andprosperous future for the region”, we have established“Environmental Policy”, and proactively and continuously
worked on reducing our environmental burdens andsupporting our customers’ environmental conservation
activities.

<Opportunities>

Value Creation Story<Policy>

Considering responses to climate change from perspectives of both opportunities and risks, theBank is proceeding with respective initiatives.

Letters from theManagement

A task force for stabilizing financial systems established under Financial Stability Board (FSB) in 2015. On
the assumption that physical impacts of climate change such as abnormal weather, and drastic shift to thedecarbonized economy may threaten the stability of financial systems, TCFD requires all companies todisclose information in the below-mentioned manner: 1) use multiple climate scenarios, 2) evaluate thecompany’s own climate-related risks and opportunities, 3) reflect the evaluation in management strategies
and risk management, and 4) comprehend their financial impacts and disclose them.

2. Strategies

Holding Company

In February 2021, we expressed support for the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD*1) to contribute to the realization of a decarbonized society while assuming
the risks that climate change poses to our customers and the Bank. Believing that pursuing both therealization of sustainable global environment and business activities will lead to creation of new
business opportunities, we will strengthen information disclosure related to climate change, based on
the framework of TCFD Recommendations.

About Iyo Bank

Response to Climate Change

48

Sustainability
Initiatives for TCFD Recommendations

3. Risk Management

About Iyo Bank

Response to Climate Change

4. Benchmark and Targets<Management system for risks of climate change><Policies on investments and loans for specified sectors><CO2 emission reduction>
Reduction target: By Fiscal 2030, reducing our CO2 emissions*4 by 50% compared to the level in fiscal 2013
Results of emissions and reduction
Fiscal 2013

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Scope 1 (Direct emission)—

1,521 t1,401 t1,337 t1,266 tScope 2 (Indirect emission)—

7,630 t7,589 t6,018 t7,700 t12,592 t

9,151 t8,990 t7,355 t8,966 t—(27.3) %(28.6) %(41.6) %(28.8) %Total
Results of reduction(compared to fiscal 2013)

Policies on investments and loans by sector*4 Total of Scope 1 (direct emission) and Scope 2 (indirect emission) calculated in accordance with the criteria of a regular report under the Act on Rationalizing Energy Use.

PolicyCoal-fired power
generation businessCompared to other power generation methods, the coal-fired power generation emits
more greenhouse gases, and includes a risk of growing concern over climate change andair pollution. Accordingly, we will not make investments and loans for funding for the
purpose of construction of new coal-fired power plants.

(Unit: t-CO2)

15,00012,000CO2 emissions

12,5929,000(%)

Reduction rate

-27%
9,151

0

-29%
8,990

6,000

-42%
7,355

-29%
-50%
8,966

3,000
0

Fiscal 2013

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

-40
-60

6,296
Fiscal 2030

-80
-100

<Sustainable finance>
Target of cumulative transaction amount: ¥ 1,400.0 billion (including ¥700.0 billion in the environmental area)
Subject period: fiscal 2021 to fiscal 2030

From a public and humanitarian perspective, we prohibit investments and loans forcompanies that manufacture cluster bombs, regardless of the purpose of funds.

Definition of “sustainable finance” in Iyo Bank: F inance that contributes to the realization of sustainable local society
through supporting customers’ initiatives for sustainability, toward
the resolution of environmental/social issues

Examples of subject investments and loans<Integration into business feasibility assessment>

Green loans/bonds, transition loans, and environmental private placement bonds, as wellas environmentally conscious investments and loans such as ones related to renewableenergySocial area

Private placement bonds such as “Manabiya” and “Chiiki no Mirai” supporting home
towns, and SDGs private placement bonds, as well as investments and loans responding
to social issues such as loans responding to earthquake disasters

Other area

Sustainability-linked loans, as well as investments and loans related to business foundation
and business succession

Results in Fiscal 2021: ¥92.6 billion (including ¥60.9 billion in the environmental area)

49

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

Corporate Data

In order to comprehend customers’ responses to climate change and initiatives for environmental conservation, andcontribute to the extraction of management issues and resolution thereof, we added an item about environmental
consideration (business status in consideration of management conscious of climate change and environment) to assessment
items in the “business feasibility assessment”, on which the Bank has put efforts into.

Environmental area

Sustainability

Cluster bomb
manufacturing businessBusiness Strategy and Plan for
Realizing the Long-Term Vision

Businesses that involve deforestation, such as palm oil/wood processing businesses andother businesses including deforestation may cause environmental issues due to illegal
logging, as well as infringement of rights of local citizens, and human rights issues such as
child labor.
We will consider how to work on investments and loans, in full consideration ofenvironmental impacts, the presence or absence of trouble with local citizens and childlabor, and other factors.

-20

Value Creation Story

SectorPalm oil/wood processing
business

Letters from theManagement

In investments and loans for specified sectors that are highly likely to facilitate negative impacts on the environment andsociety including climate change, we have determined and publicized our policy of making decisions on transactions after
indicating the environmental and social risks, etc. to recognize, and taking measures in light of respective properties. In orderto mitigate or avoid such risks, we take measures in light of respective properties by checking how the customer has
responded to the risks, for example.
Especially, our attitude for the initiatives has been stipulated as a rule in order to strictly control investments and loans forthe “coal-fired power generation” sector which includes risks of increasing concern over climate change and air pollution.

As targets related to climate change, Iyo Bank has set targets for the reduction in its own CO2emissions and for sustainable finance for customers.

Holding Company

We are aware that transition risks and physical risks caused by climate change have impacts on the Bank’s business activities,
and financial positions, etc.
Going forward, we will comprehend and analyze impacts related to such risks, and consider the establishment of amanagement system in the framework of integrated risk management.

50

Sustainability<Support Team for Carbon Neutrality Measures>Support by the Support Team for Carbon Neutrality Measures
Major support menu

We provide training menus that deepen understanding about
Regarding SDGs, which is highly compatible with initiatives
toward carbon neutrality of local communities and companies,
we provide training menus that deepen its understanding, justlike playing games.

Under the “Agreement on Forest Creation Activities” which
was entered into with Ehime Prefecture, Ozu City and Forest
Fund of Ehime in 2008, we are making efforts to foster forests
in four locations in Ehime Prefecture.
Area of activities

Iyo Bank Evergreen Forest in Ozu

7.62haIyo Bank Evergreen Forest in Toon

7.63haIyo Bank Evergreen Forest in Toyo

6.37haIyo Bank Evergreen Forest in Matsuyama

1.69haWe partly subsidize activities by organizations and individuals that are engaged in environmental preservation activities in Ehime Prefecture.
In commemoration of the 130th anniversary in business, we established the foundation in 2008, and have granted subsidies ofapprox. ¥65 million to 179 organizations and individuals in total.
OutlineEntities eligible
for subsidy
Proposals
to partnercompanies

Partnercompanies

Organizations and individuals who haveprincipal locations in Ehime Prefecture

Projects
eligible forsubsidy

A wide range of activities for conserving
natural environment and biodiversity in
Ehime Prefecture, and creating anddeveloping rich environment for local society

SubsidyamountWithin ¥500,000 per activity, in principle

Trustor

The Iyo Bank, Ltd.

Trustee

Sumitomo Mitsui Trust Bank, Limited“Tada Eco-group Tanpopo”, a grantee in Fiscal 2021

<Collaboration Agreement with Shikoku Electric Power Company, Incorporated>

Purpose of Collaboration<Society for promoting development of community with forest>
The Bank is serving as a secretariat of this society which was inaugurated in August 2010. Aiming to create real forests all over atown, the society is conducting activities to green a community by planting trees. So far, 89 companies and groups have joined thesociety, and approx. 52,000 trees in total have been planted.
Also, in commemoration of the 10th anniversary, “Grow into a forest”, a picture book to teach children the importance of trees
and forests, was produced in August 2020, and was distributed to children who participated in tree-planting activities.

Sustainability

On February 25, 2022, the Bank entered into a collaboration agreement with Shikoku Electric Power Company, Incorporated tosupport initiatives toward local carbon neutrality.
Regarding initiatives for climate change issues as one of the important management issues, Shikoku Electric Power Company andthe Bank will contribute to the realization of a sustainable society by powerfully supporting initiatives toward carbon neutrality in an
entire region, in addition to reducing the companies’ own greenhouse gas emissions.

Business Strategy and Plan for
Realizing the Long-Term Vision

Support visualization ofemissions and considerationof measures

Details of major activities

 ctivities to foster forests by the Group’s officers, employees,A
and their families (volunteer)• Planting approx. 3,250 trees in total (contributing to approx. 66t
increase in carbon sink)• Periodical weeding• Holding forest school
Donation to forest creation activities, etc. (¥1 million every
fiscal year)
Disseminating information on details of activities<Iyo Bank Environment Foundation “Evergreen” (public trust)>

Consider measures leading to reductions in
CO2 emissions and energy costs, in light ofdata and customer’s requests.

Needs foremission
calculation

Area

Value Creation Story

Select measures meeting customer’s requestfrom know-how held by partner companies.
Create data of energy consumption, costs,
and CO2 emissions, etc. based on theprovided data

CO22 emission
reductioncustomers•

SDGs Card Game

In cooperation with partner companies, we support“visualization” of customer’s CO2 emissions.

Visualizationof dataCorporate Consulting Division
Regional Vitalization Division• Iyogin Regional Economy ResearchCenter (IRC)•

Letters from theManagement

Support for calculating CO2 emission

Business matching service
Support for calculating CO2 emission
Support for applying for subsidies, etc.
Support for introducing renewableenergy system• Finance
ESG/SDGs Finance• Consulting Service
Iyogin SDGs Diagnosis Service• Support service for autonomous bodies
Support for creation of private-public
initiatives• Training service
SDGs card game•

<Iyo Bank Evergreen Forest>

Structure

Holding Company

In order to support the realization of carbon neutrality ofregional society and companies, the “Support Team for
Carbon Neutrality Measures” was established in March 2022,
for the purpose of enabling bank branches and theheadquarters to work together on customer needs which arediversifying day to day. Regarding initiatives for climate change
issues as one of the important management issues, Iyogin
Group is aiming to realize the sustainable society bysupporting initiatives toward regional carbon neutrality.

About Iyo Bank

Initiatives for Sustainable Growth Environment

Support initiatives for carbon neutrality of local communities andcompanies mainly in Ehime prefecture, by promoting mutual close
collaboration and cooperative activities between Shikoku Electric Power
Company and the Bank.

P roviding information and proposals to support initiatives toward
carbon neutrality
Introducing products and services, etc., that the two companies(including Group companies) provide to support initiatives toward
carbon neutrality
Development of products and services, etc., to support initiatives
toward carbon neutrality
Activities raising awareness to support initiatives toward carbon neutrality

51

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

Corporate Data

Overview of Collaboration

Please scan the
QR code to visit
the website.

52

Sustainability

Initiatives for Sustainable Growth

About Iyo Bank

Society<Revitalization of Local Economy in Cooperation with ANA Group>

Our Regional Vitalization Division provides extensive support for business foundation from development of a business plan throughfinancing. With fulfilling solution menus, we solve issues customers face, and provide close support from an early stage to a growthstage.
In cooperation with administrative bodies and regional industrial support organizations, we also hold “Iyogin Future Start-up
School” (business foundation seminar) to learn a wide range of matters from the mindset during the early stage to know-how onmanagement, and “Iyogin Business Plan Competition” in which participants compete on their business plans. Thus, we have beenworking to establish an ecosystem to create new business in a region together with regional stakeholders.

In August 2021, we entered into the collaboration agreement on services related to promotion of regional revitalization with ANA
Akindo Co., Ltd. engaged in regional revitalization services in ANA Group, for the first time as a financial institution in Japan.
The purposes of this agreement are to work on the dissemination of information on Ehime Prefecture, development of products
using regional resources, and expansion of sales channels, by using the Bank’s regional network, and domestic and overseas sales
channels and human resources possessed by ANA Group.
So far, by using subsidies from Japan Tourism Agency, we have jointly implemented the “development project for new souvenirsof Ehime” in which development and sales of souvenirs using products made in Ehime are supported, as well as “Green Tourism
Monitor Tour.”“The 7th Iyogin Business Plan Competition” held in July 2021
Determined eight prize winners from among 68 applicants in total

 ntered into the collaboration agreement on services
E
related to promotion of regional revitalization
Letters from theManagement

Outline of the agreement

Grand Prix

Opening up sales channels of local products
Discovery/assistance and marketing of new businessFacilitating support for promotion activities, such as ensuring
human resources in primary industries and finding new sales
channels

Optieum Biotechnologies Inc.

ANA Akindo Co., Ltd.

* The company engaged in regional revitalization
services in ANA GroupIyo Bank
Value Creation Story enture company founded in cooperation with Ehime
V
University
Invested by Iyogin Capital (September 2021)
Awarded in the innovation category at “the 4th Shikoku
Alliance Business Plan Competition”

Details of previous initiatives<Revitalization of Local Economy throughCrowd Funding>

Development of new souvenirs of Ehime
Proposal of crowd funding for souvenirs developers
Implementation of Green Tourism Monitor Tour

Number (cumulative)(Projects)
70

65
57

60
46

50
36

40
28

30
20
10

50

19

Mar. 2019 Sep. 2019 Mar. 2020 Sep. 2020 Mar. 2021 Sep. 2021 Mar. 2022

Using historical resources such as townhouses and traditional Japanese houses remaining in a castle town in Ozu City, we have beenworking on development of a tourist town, where “the development of a community” aiming to have local citizens lead fulfilling
lives and “tourism promotion” to attract people from outside are implemented in an integrated manner. The Bank is playing roles offinancing, provision of information on real estates, and inviting store operators.

Time

August 2018 February 2020
July 2020 -53

IYO BANK Integrated Report 2022

Entered into the Collaboration Agreement among Ozu city,
Value Management Co., Ltd., NOTE (general incorporated
association), NOTE K.K., and Iyo Bank
Dispatched our bank employee to KITA. MANAGEMENT, aregional DMO (general incorporated association) establishedby Ozu City
A total of ¥200 million Ozu town development fund set up
with investment by Organization for Promoting Urban
Development (general incorporated foundation) and Iyo Bank
“NIPPONIA HOTEL OZU CASTLE TOWN”, a distributed hotel,(22 buildings with 28 rooms as of April 2022) and “OZUCASTLE STAY” started

In March 2022, we entered into the “Comprehensive Collaboration Agreement to Promote DX with Industries That Utilize SpaceTechnology” with Ehime Prefecture and Japan Manned Space Systems Corporation. (This is the first initiative for which Japan Manned
Space Systems Corporation entered into the collaboration agreement with a financial institution.)In the recent space industry, AI, IoT, and other new technologies have been more utilized, and, in terms of players, a paradigm shift
from public sectors to private sectors has progressed. Accordingly, private use of space technologies has been getting closer to us.
Under such circumstances, the purpose of this agreement is to promote DX of various industries by conducting educational activities
for business operators in the prefecture about the use of space technologies, etc., in collaboration with Japan Manned Space Systems
Corporation, one and only private company in the domestic manned space industry.
Going forward, it is scheduled to conduct activities for introducing a farm field management system using an artificial satellite
provided by Japan Manned Space Systems Corporation, and hold seminars on the space industry for business operators.

Entered into “Comprehensive Collaboration Agreement to Promote DX with Industries That Utilize Space Technology”
Contents Overview of Collaboration
DX utilizing space technology
Matching with companies in Ehime PrefectureResponding to consultations on development of spacetechnology and taking part in space industries

Ehime
Prefecture

Japan Manned
Space Systems
Corporation

Corporate Data

April 2018

Details<Revitalization of Local Economy in Cooperation with Autonomous Bodies and Companies in Other Industries>

Sustainability<“Tourist Town Development Project Using Historical Resources” in Ozu City>

First in regional banks

Business Strategy and Plan for
Realizing the Long-Term Vision

We formed a business tie-up with a crowd funding operator in
September 2018, and started subsidiary business that support
projects related to business foundation and regional
revitalization, in commemoration of the Bank’s 140th
anniversary of its foundation. (Details of subsidy: The Bank
grants subsidies equal to a half of commission to be paid to a
crowd funding operator (up to ¥250,000) to those whoachieved the target amount of a project.)
We have supported 65 projects as of the end of March
2022, and will support those who started or aim to startbusiness, as well as business operators who make efforts forregional revitalization.

Holding Company<Revitalization of Local Economy by Business Foundation Support>

Iyo Bank
First in regional banks

IYO BANK Integrated Report 2022

54

Sustainability

Initiatives for Sustainable Growth

About Iyo Bank

<Iyogin SDGs Diagnosis Service>Society

Initiatives for Social Contribution

Number of contracts(contracts)

300

In accordance with the corporate credo, “Creating a bright and prosperous future for the region”, the Iyo Bank Group has worked onsocial contribution activities for many years, along with business activities. Going forward, we will continue to make efforts for solving
issues of regional society through provision of support in a wide range of areas such as culture, education, and welfare.

259

250
200

•

150
100

•

70

50
0

Fiscal 2020

12,000
9,000
6,000
3,000

10,980

9,800

9,120

310

1,040
1,910

1,580

1,190

4,940

6,020

3,770

250
2,510

80
1,700

3,440

2,530

3,020

3,420

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

1,630
5,220

4,050

1,730

(issues)

150
120

Private Placement Bonds for Supporting
Welfare Program “Kaisha-no-Mirai”
SDGs Private Placement Bonds
Private Placement Bonds for Supporting
Home Town “Chiiki no Mirai”

112

140

121

125

18

13

18

3

70

20
8

66

40

27

30

25

30

25

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

(Hundreds ofMillions of Yen)

Number of cases responded to by Support Team for COVID-19
Measures

3,000

Association
ProperNo. of cases

Business matching

105

Financing

34

ICT

50

Crowd Funding

8

Manufacturing

13

Subsidies for BusinessRestructuring Subsidies

377

Business succession, M&A

6

Other

47

IYO BANK Integrated Report 2022

Since 1989, “IRC New Leader Seminar” has been held for young business operators. This seminar had been held for the purpose of fostering young business
operators who will play important roles in the next generation, and thereby contributing to sustainable development of regional society, through provision ofpractical opportunities for personal development that are helpful for management, as well as ones for mutual exchange and creation of networks. (As of theend of March 2022, a total of 1,298 participants). The seminar, a period of which is one year, includes lectures with prestigious lecturers, and active opinion
exchanges through group presentation.

<Financial Education Class>Since 2007, the Bank has held “Financial Education Class” for the purpose of enabling children who will play
important roles in the future of the region to gain correct financial knowledge. As of the end of March 2022, a total of
approx. 18,000 children has participated in the class.
In recent years, with the implementation of new high school curriculum guidelines and lowering the age ofadulthood, it is required to build up knowledge on financial instruments, financial troubles, and asset formation, etc.
Therefore, in addition to conventional programs mainly in elementary and junior-high school, we are working on
provision of financial education for high school students who will be members of society soon.

Due to the declining birthrate, aging population and depopulation, theimprovement of social welfare and the young human resource
development for the next generation in local societies have become social
issues. As a financial institution responsible for the region, Iyo Bank,
aiming at the realization of sustainable society, established this fund in
1976, and has worked on activities such as granting scholarships to highschool students, and donation of social welfare equipment to social
welfare institutions, etc. over 45 years.

Granting scholarships to high school
students in single or no parent families(A total of ¥485 million to 965 students)

Employment subsidies for children living inchild welfare institutions, etc.
(A total of ¥27 million to 1,598 students)<Iyo Bank Social Welfare Fund>
Donation of social welfare equipment tosocial welfare institutions, etc.
(A total of ¥189 million to 376 institutions)

Donation of subsidies for buying books tohigh schools, etc.
(¥67 million every year to 16 schools)

640

2,000
1,500

2,034
811

8,000

2,215
852

1,000
500

1,223

1,363

March 31, 2021

March 31, 2022

<Tennis club/Women’s softball club>
We have made efforts to improve regional competitive abilities andpromote sports in the region, for example, by holding sports classes forchildren with major players who are active in domestic top leagues. Also,
the women’s softball club has participated in “NITORI JD.LEAGUE”, a
new league which started in March 2022.

6,000

4,000

2,000

0

0

While Ehime Prefecture is a region where diverse tradition and culture
have taken root, a number of organizations have difficulties in continuing
activities due to a shortage of successors and operational funds. In lightof such contexts, the Bank established this program in 1992, and has
worked on succession of regional tradition and culture, through granting
part of funds for activities of parties which carry out “grassroots” culturalactivities in Ehime. (¥247 million to 1,274 groups in total)

Corporate Data

55

Items

8,342

7,474

2,500

Total

2018

Sustainability

Mainly for the service industry, which has been considerably affected by the COVID-19 pandemic, we have provided financial aid
amounting to approx. ¥220 billion, putting emphasis on proposals consistent with customer’s situation and needs.
With the Support Team for COVID-19 Measures established on April 30, 2020, we have responded to various issues customers
would face when conducting business activities, for example, business matching, ICT consulting, business succession, M&A, staffing,
manufacturer support, tourism/primary industries support, and overseas business support.
By providing strong financial and non-financial support for customers
Cumulative amount of COVID-19-related
facing difficulties, we will minimize negative impacts of the COVID-19
loans
infection, and assist management adapted to the era of coexistence with
(Number)NumberWith Credit Guarantee
COVID-19.
10,000No. of cases

2007<Regional Cultural Activity Assistance Program><Response to COVID-19>

Items

1992

Established Iyogin Challenge& Smile<Iyo Bank Social Welfare Fund (Public Interest Incorporated Foundation)>
70
2

55
39

46

13

4

60

0

Private Placement Bonds for Supporting
Home Town “Manabiya”
Environmental Private Placement Bonds

124

90

30

4,270
Fiscal 2017

Private Placement Bonds for
Supporting Home Town “Manabiya”
Environmental Private Placement Bonds

12,4101989

F inancial Education Class
Museum 88 Card Collectingin Shikoku

Business Strategy and Plan for
Realizing the Long-Term Vision0

Number of issues

12,300

1985•

Value Creation Story

15,000Women’s softball clubR egional Cultural Activity
Assistance Program

Letters from theManagement(Millions of Yen)

1976

•

•

<IRC New Leader Seminar>

We financially support customers working on ESG/SDGs through, for example, “SDGs Private Placement Bonds” in which companies
making efforts for achieving SDGs receive favorable treatment in a coupon rate, and Private Placement Bonds for Supporting Welfare
Program “Kaisha-no-Mirai (Future of Company)” in which part of bond issue commissions is used to partly subsidize expenses for
improving welfare programs.

Private Placement Bonds for Supporting
Welfare Program “Kaisha-no-Mirai”
SDGs Private Placement Bonds
Private Placement Bonds for Supporting
Home Town “Chiiki no Mirai”

1967

IRC New Leader Seminar• Tennis Club•

Fiscal 2021

<ESG/SDGs-related Private Placement Bonds>

AmountChoral groupIyo Bank Social
Welfare Fund•

Holding Company

Since December 2020, for the purpose of supporting efforts
for SDGs by local companies, we have been providing “Iyogin
SDGs Diagnosis Service.” The number of cases of supporting
SDGs declaration was 329 in total. We will support customers
who are making efforts for achieving SDGs, through provisionof reports on the results of evaluation of progress in theinitiatives for SDGs, as well as assistance for formulating an
SDGs declaration.

<Iyogin Challenge & Smile Co., Ltd.>
Iyogin Challenge & Smile Co., Ltd. has been established as a special subsidiarycompany with the purpose of promoting employment of persons withdisabilities. It engages in various initiatives aiming to create a workplace
where they can work actively along with the local community, including
development of goods, sales of goods at rest stops, event venues, etc. incooperation with local companies, and succession of traditional industries.
IYO BANK Integrated Report 2022

56

Sustainability

Initiatives for Sustainable Growth

About Iyo Bank

Society<Promotion of Women’s Participation>

Diversity & Inclusion

To be a company where female employees can happily work, pursuing both private life and work

<Work Style Reforms>
To be a company where people can autonomously work
In the Bank-wide campaign “Smart Working Challenge”, we are striving for the management reforms, the changes in mindset, theoperational reforms, and the ability development. In terms of systems, we have introduced the complete flexible working hoursystem, the working-hour interval system, and the telecommuting system to promote autonomous and flexible ways of working andreduce overtime work. In addition, to transform into an autonomous organization with diversity, we have introduced the businesscasual attire and the side job system.
Apart from them, we have improved tools to respond to ways of working in the era of coexistence with COVID-19. For example,
we distribute smartphones and iPads for business use, and computers exclusively for telecommuting, as well as introducing devices
dedicated for Zoom as well.
As a result, overtime working hours and paid leave utilization rate became 4.4 hours and 73.3%, respectively, in 2021.

Female Manager Ratio/Average Years of Service

10 years

4.4
hours

55.3%

65.2%

67.1%

69.6%

73.3%

Jan.-Dec.
2015

Jan.-Dec.
2018

Jan.-Dec.
2019

Jan.-Dec.
2020

Jan.-Dec.
2021

Jan.-Dec.
2015

Jan.-Dec.
2018

Jan.-Dec.
2019

Jan.-Dec.
2020

Jan.-Dec.
2021

About 30 employees have side jobs.
Growing into human capital assets
with extensive knowledge andskillsTelecommuting System

The corporate sustainable growth is supported by “human resources.” Therefore, without each employee’s mental and physicalhealth, sound development of companies cannot be expected. With such mindset, in addition to initiatives to maintain and increase
employees’ mental and physical health, we also strive to increase employees’ awareness of health, and proactively support theirvoluntary activities for health.
To be more specific, as a population approach, we lend a wearable terminal “Fitbit”, subsidize costs for health checkups, andsuppress long working hours. As a high-risk approach, we obligate employees at 40 years old or over to take health checkups,
provide health guidance using the health management system, and take measures for preventing health disorders of employees
working for long hours (face-to-face guidance by an industrial doctor). With such efforts, we are working to improve absenteeism
and presenteeism.
In addition, we are conducting activities conscious about well-being. For example, we have participated, as an initial member, in“Well-being Ehime”, Japan’s first regional organization, which aims at promoting health andproductivity management in the region in collaboration. The organization collaborates withcompanies, autonomous bodies, schools, etc. within Ehime Prefecture. and also provides support for
employees working while receiving medical treatment, such as introducing the system of shorter
working hours for cancer treatment, etc.
With these efforts, the Bank was recognized in the 2022 Certified Health & Productivity
Management Outstanding Organizations Recognition Program (large enterprise category).

Business Casual AttireIntroduced the telecommuting
system for employees who want
to work at home in April 2021

P ilot run from August 2020 andofficial introduction in April 2021

Changes in ratio of health checkups taken

Computer for telecommuting

 reator of animation
CReferee of soccer
Website development, etc.

57

IYO BANK Integrated Report 2022

53.2%

40 40

0

53.6%

62.3%

40 years old
or older
2018

2019

2020

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

100 persons

21 persons

34 persons

18 persons

Ratio of employees who exercise regularly
All employees

32.9%

20 20
0

100.0%

65.8%

60 60

Bank

100.0%

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

18.1%

22.8%

23.2%

24.5%

Corporate Data

92.6%

80 80

Home

Changes in the number of employees who worked
overtime for over 70 hours(%)

100 100

Examples of side jobs

Mar. 2022

Sustainability

Side Job System

Mar. 2021

Business Strategy and Plan for
Realizing the Long-Term Vision

4.2
hours

Mar. 2020

To be a company that supports employees’ mental and physical health

Changes in paid leave utilization rate

3.2
hours

Mar. 2019<Health and Productivity Management>

To improve productivity, it is required to strive not only to reduce input (labor input) with a reduction in working hours and anincrease in paid leave utilization rate, but also to maximize output (added value) by improving engagement of each worker (anindicator for how much workers are making proactive efforts with self-motivation for contribution.)
Iyo Bank has introduced “wevox”, an engagement detection tool, for all employees. By conducting a simple questionnaire survey
using a smartphone once a month, each workplace’s status of engagement is visualized and analyzed. Based on its result, the PDCA
cycle is quickly implemented to improve engagement through meetings at respective workplaces, aiming at leading it toenhancement of organizational abilities and an improvement in business results. With such efforts, we will aim at creating aworkplace in which employees can feel much more worth working for pride.

6.6
hours

12 years and 17.6%
10 years and 11 years and 4 months
8 months
11 months
12 years
16.3%
and
14.9%
13.7%
11 months

Value Creation Story

Mar. 2016

18.0
hours

Obtained “Eruboshi
Certification (three stars)”

6.9%

To be a company where people can work vigorously in a highly productive way

Changes in overtime working hours

Obtained “Platinum
Kurumin Certification”

Letters from theManagement

We believe it is important to change men’s consciousness about child rearing in order to be a company where women can work
comfortably. Therefore, we encourage male employees to take the childcare leave, and have achieved 100% of the childcare leave
utilization rate for men and women since fiscal 2016.
Also, in order to support women’s continuous employment and career building, we established a day-care center for children ona premise, “Iyogin Kid’s’ Land.” As corporate social responsibility, we will develop an environment where children who will be
responsible for the next generation can grow up healthily, and support employees who raise children while working.
With these efforts, the female manager ratio and the average years of service of female employees have been improved year by
year. Accordingly, we have obtained “Platinum Kurumin Certification” (for companies supporting child rearing) and “Eruboshi
Certification (three stars)” (for companies excellent in efforts for promotion of women’s participation).

Holding Company

We position Regarding Diversity & Inclusion as a source of competitiveness, and, as part of its value creation process, we haveworked on the three issues collectively, i.e., the work style reforms, the promotion of women’s participation, and healthmanagement. Thereby, we are aiming to be the best company in the Setouchi region, where people can work comfortably, at whichpeople want to work, and which contributes to creation of the region’s future as growing with it in the Setouchi region.

2021 (FY)IYO BANK Integrated Report 2022

58

Sustainability<Basic Concept>

About Iyo Bank

Strong Management Foundation (Governance)
Board of Directors

Composition of the Board of Directors

Businessstrategies andcorporate
management

Iwao Otsuka

Corporate Governance Guideline
Please refer to our website.
https://www.iyobank.co.jp/about/csr/governance/guideline.html

Directors Not
Serving as
Audit andSupervisory
Committee
Members<Corporate Governance Structure>

General Meeting of Shareholders
Appoints/Dismisses
Board of Directors

Management
Deliberation Committee

ReportingAppoints/Dismisses

Business Execution
Directors

Chairman
Audit and Supervisory
Committee

Cooperates
Dismisses

Independent
Auditors

Directs
Instruction

President

ReportingCompliance Committee

Whistleblowing

Internal Audit
Division

Audits internally

IYO BANK Integrated Report 2022

Managing Director
Managing Director

Koichi Kihara

Managing Director

Yuichi Ohashi

Digital and
ICT

Finance andaccounting

Law and legal
affairs

Audit and Supervisory
Committee Member
Audit and Supervisory
Committee Member(Outside)
Audit and Supervisory
Committee Member(Outside)
Audit and Supervisory
Committee Member(Outside)
Audit and Supervisory
Committee Member(Outside)
Audit and Supervisory
Committee Member(Outside)*In relation to concurrent positions at other companies of Directors (including Directors serving as Audit and Supervisory Committee Members), the policy is to make Directors (including
Directors serving as Audit and Supervisory Committee Members) avoid concurrently serving as an officer at other listed company as much as possible so that they can appropriately fulfill
their responsibilities and roles. Concurrent positions that they serve as an officers at other listed companies are as follows.
• Iwao Otsuka (Chairman): Director (Audit and Supervisory Committee Member) (Outside), Shikoku Electric Power Company, Incorporated• Tetsuo Takeuchi (Director (Audit and Supervisory Committee Member)): Director (Audit and Supervisory Committee Member) (Outside), Daiki Axis Co., Ltd.
• Yoriko Noma (Director (Audit and Supervisory Committee Member)): Auditor & Supervisory Board Member (Outside), AJIS Co., Ltd.; Director (Outside), Wellco Holdings Co., Ltd

Accounting
auditInternal
control audit

S tatus of voting rights execution for cross-shareholdings, andverification of reasonableness of holdings
Application for selection of new market segment associatedwith the changes in market segments of the Tokyo Stock
ExchangeSetting targets for reducing CO2 emissions based on TCFD
Recommendations
Amendments to “Policies on investments and loans for
specified sectors” and publication thereof
Setting and disclosure of the sustainable finance targets
Consideration about the transition to the holding company
system utline of amendments to the Corporate Governance Code,O
and our present situation and issues
Response to COVID-19
Amendments to “the Basic Policy Concerning
Countermeasures against Money Laundering and Terrorism
Funding”
Formulation of “Management Plan for Fiscal 2022”
Implementation of evaluation of the Board of Directors
Issuance of Integrated Report

Cooperates

Audit and Supervisory Committee
In accordance with the law, Articles of Incorporation and Audit and Supervisory Committee Regulations, the Audit and Supervisory
Committee, together with the Board of Directors and the Chairman, provides a supervisory function and also audits the execution ofbusiness by Directors. In accordance with the provisions of the Companies Act, the majority of Directors (Audit and Supervisory
Committee Members) shall be Outside Directors. In selection of candidates for Directors (Audit and Supervisory Committee
Members), those who have abundant knowledge and experience are selected from various areas such as corporate management,
legal affairs, finance and academic knowledge, in a well-balanced manner.
IYO BANK Integrated Report 2022

Corporate Data

Directs
Instruction

Credit Risk Administration Committee

59

Masamichi Ito
Hirohisa Senba

Keiji Joko

Corporate
screening

Sustainability[Management Planning Council][Budgeting and Integrated Risk Management Council][Screening Council] [Compliance Council]

Head Ofﬁce, Bank
Branches

Managing Director

Junko Miyoshi

Assetmanagement
andinternational
affairs

Major agendas and resolved matters of the Board of Directors in fiscal 2021

ReportingExecutive Committee

Operational Risk Administration Committee

Hiroshi Nagata
Kensei Yamamoto

Yoriko Noma

Audits/Supervises

Advisory Board

Directors(Audit andSupervisory
Committee
Members)

Riskmanagement

Business Strategy and Plan for
Realizing the Long-Term Vision

Consult

Appoints/Dismisses

President
Senior Managing
Director

Kaname Saeki

Personnel
affairs andtalentdevelopment

Chairman

Kenji Miyoshi

Tetsuo Takeuchi

Marketing

Value Creation Story

The Bank has adopted the system of “Company with an Audit and Supervisory Committee” for the purpose of strengthening audit/
supervision functions and corporate governance, and increasing management efficiency by swiftly making decisions with delegationof authority. The Bank has also introduced the executive officer system to further enhance corporate governance by separating themanagement decision making and supervisory functions from business execution to strengthen each function.

Skills Matrix

Letters from theManagement“Meaning of Existence” Creating a bright and prosperous
future for the region“Management Stance” Offering the best service andbeing worthy of people’s trust“Code of Conduct” Rendering our best service withgratitude in our hearts

We have formulated a “Skills Matrix” which is a list of the following nine items selected as knowledge, experience, and ability
required for Directors from perspectives of “skills deemed necessary for basic management activities”, “bank-specific skills”, and“skills to become increasingly important”,: which consist of “Business strategies and corporate management”, “Marketing”,“Personnel affairs and talent development”, “Risk management”, “Asset management and international affairs”, “Corporate
screening”, “Digital and ICT”, “Finance and accounting”, and “Law and legal affairs.”

Holding Company

Iyo Bank has established a corporate credo that clarifies corporate missions, the basic policy of corporate management, and themindset and behavior to embody them, as shown below.
Under the corporate credo, the Bank has recognized corporate governance as one of our top priority management issues andstriven to reinforce and improve it, for the purpose of establishing unshakable trust among shareholders, customers, regional citizens,and our employees and other stakeholders, etc., and improving corporate value and management soundness while fulfilling social
responsibilities as a regional bank.
In order to achieve sustainable growth and improvement in medium- and long-term corporate value through realization of
appropriate corporate governance, the Bank has established and publicized the “Corporate Governance Guideline” which stipulates
the basic concept and framework of our corporate governance.

60Sustainability

Management Deliberation Committee

About Iyo Bank

Strong Management Foundation (Governance)

Management Deliberation
Committee<Evaluation of the Board of Directors>

ss
i n e D ir e

Board ofDirectorsE
ct xe cuors tio nC h airmaA
S u
C ou p ed it am rvis n d
m i o rytte eConsult
Deliberations on thenomination of andcompensations for Directors,
etc. and important mattersregarding management

Evaluations andprovides advice on the
Bank’s management
strategies andgovernancen

In relation to the evaluation of the Board of Directors in Fiscal 2021, with an outside organization involved, an anonymous survey oncomposition and operation of the Board of Directors, and support systems for Directors was conducted for all Directors who aremembers of the Board of Directors. At the Board of Directors meeting in April 2022, results of the survey were reported by theoutside organization. The results were In April and May in 2022, the Board of Directors analyzed, discussed, and evaluated at theBoard of Directors meetings held in April and May 2022the results.

Audit and Supervisory Committee

Advisory Board

Independent Outside
Directors

Internal
Directors• One third or more of Directors are
Independent Outside Directors.
• Appointment of female Directors• Enhancing audit and supervisory functions,and revitalizing the Board of Directors

Measures for Future Issues• As a result, the Board of Directors was positively evaluated,
deemed to function without problems, in general.
• Meanwhile, it is considered as an issue to strive to further
improve the Board of Directors’ functions. To this end, an
efficiency in discussion should be increased withimprovement in preparation of materials and explanation
method by a responsible divisions and a better way of
explanation, and more opportunities should be provided toshare awareness of important management issues, anddiscuss them with Outside Directors.

• For the matters recognized as issues in Fiscal 2021 as shownin the left column, we intend to compose the Board of
Directors’ materials focusing on priorities to increase theefficiency and improve deliberations.
• In order to improve the effectiveness of the Board of
Directors, we will also make efforts to provide more
opportunities to allow Representative Directors and Outside
Directors to have free discussions so that they can shareawareness and discuss each other by, for example, increasing
opportunities for free discussions among them.

List of Outside Directors
Significant concurrent positions

Kaname Saeki——

Director, Minamimatsuyama
Hospital Eye Center, Social Medical
Corporation Jinyuukai

Yoriko Noma

Partner, Miyakezaka Sogo Law
Offices
Audit & Supervisory Board Member(Outside), AJIS Co., Ltd.
Director (Outside), Wellco Holdings
Co., Ltd.

Ms. Yoriko Noma has a wealth of experience, high-level insight, and advanced expertiseon corporate legal affairs as an attorney. For the reason above, the Bank has appointed
her as an Outside Director in the expectation that her appropriate supervision and advice
primarily in the view of legal compliance and diversity promotion will contribute to theimprovement of corporate value of the Bank over the medium to long term.

*Among the above five Outside Directors, there are ordinary finance or other transactions between the Bank and entities where four Outside Directors excluding Ms. Noma are from or
holding significant concurrent positions. However, none of them violates the standards of independence provided for by the Bank.
*For the standards of independence provided for by the Bank, please see “Reference Documents for the General Meeting of Shareholders” of NOTICE OF CONVOCATION OF THE 119TH
ANNUAL GENERAL MEETING OF SHAREHOLDERS on our website. https:www.iyobank.co.jp/about/ir/kabusikikabunusijouhou/soukai.html

61

IYO BANK Integrated Report 2022

Total amount of compensations, etc. (Millions of Yen)
Segment of Director

Number of
persons

Base pay

Ratio ofperformancePerformanceNonbased portion
based
monetary
compensation compensation

Directors (excluding Directors serving as Audit andSupervisory Committee Members)

9 persons

314

195

34

84

14.8%

Directors (Audit and Supervisory Committee
Members)

9 persons

54

54

0

0

—

*The above number of persons and the amount of compensations, etc. to be paid include two Directors (excluding Directors serving as Audit and Supervisory Committee Members) andthree Directors serving as Audit and Supervisory Committee Members who left office at the General Meeting of Shareholders held on June 29, 2021.

Indicators of performance results related to the performance-based compensation, and amount calculation
method (in and after July 2021)
The performance-based compensation is comprised of a short-term incentive based on the Bank’s performance and a medium-term
incentive based on the qualitative evaluation of individual Directors (excluding Directors serving as Audit and Supervisory Committee
Members).
An amount of the short-term incentive for each Director (excluding Directors serving as Audit and Supervisory Committee) is
calculated by multiplying a base payment amount determined with non-consolidated core business gross profit, non-consolidated
core business net income, and profit attributable to owners of parent as indicators by points distributed according to a job position,in order to make the incentive related to comprehensive earning capacity in consideration of not only the Iyo Bank’s business results,
but also consolidated business results.
An amount of the medium-term incentive for each Director (excluding Directors serving as Audit and Supervisory Committee
Members) is calculated by multiplying a base payment amount according to a job position by the payment multiplier calculated
based on the qualitative evaluation for each fiscal year taking into account a commitment to the Medium-term Management Planand his/her own duties.

IYO BANK Integrated Report 2022

Corporate Data

Yuichi Ohashi

Total amount of compensations, etc. by segment of Director, and total amount of compensations, etc. by type (Fiscal 2021)

Sustainability

Keiji Joko

Mr. Kaname Saeki has been engaged in the management of IYOTETSU Group Co., Ltd.
for many years and held important positions in local groups including the Chairman of
the Ehime Prefectural Federation of Chambers of Commerce and Industry, and has awealth of experience and high-level insight on corporate management and organizational
operation. For the reason above, the Bank has appointed him as an Outside Director in
the expectation that his supervision and advice primarily in the view of business strategies,
risk management and a stronger governance structure, will contribute to theimprovement of corporate value of the Bank over the medium to long term.
Ms. Junko Miyoshi has been engaged in the management of Ability Center inc. for many
years, and has a wealth of experience and high-level insight on corporate management.
For the reason above, the Bank has appointed her as an Outside Directors in the
expectation that her appropriate supervision and advice primarily in the view of businessstrategies, risk management, and diversity and inclusion promotion will contribute to theimprovement of corporate value of the Bank over the medium- to long-term.
Mr. Keiji Joko held important positions in the area of public administration including the
Deputy Governor of Ehime prefecture, and has a wealth of experience and high-levelinsight on organizational operation and local public administration. For the reason above,
the Bank has appointed him as an Outside Directors in the expectation that his
appropriate supervision and advice primarily in the view of a stronger governancestructure and regional development will contribute to the improvement of corporate
value of the Bank over the medium- to long-term.
Mr. Yuichi Oohashi held important positions including the President of Ehime University
and Director of Ehime University Hospital, and has a wealth of experience and high-levelinsight on organizational operation and industry-academia collaboration, as well as
advanced expertise in the educational field. For the reason above, the Bank has selected
him as an Outside Director in the expectation that his appropriate supervision and advice
primarily in the view of a stronger governance structure, industry-academia collaborationand human resource development will contribute to the improvement of corporate valueof the Bank over the medium to long term.

<Compensation System for Officers>

Business Strategy and Plan for
Realizing the Long-Term Vision

Junko Miyoshi Chairman, Ability Center inc.

Reasons for appointment

Value Creation Story<Reasons for Appointment of Outside Directors>

Results of Effectiveness Evaluation

Letters from theManagement

The Bank has established the Advisory Board chaired by thepresident, in order to introduce external perspectives regarding
the Group’s management strategies and governance, aiming
at. To ensure the management transparency and objectivity of
the Group, further strengthening the management base andcontributing to the local community, we are introducing
external perspectives regarding the Group’s management
strategies and governance.

OutsideDirectors

Holding Company

We annually implement the self-evaluation/analysis about effectiveness of the Board of Directors for the purpose of improving
functions of the Board of Directors to increase corporate value.

Reporting

B us

The Bank has established the Management Deliberation
Committee (a voluntary nomination and compensationcommittee) as an advisory body to the Board of Directors, toenhance independence, objectivity, and accountability of theBoard of Directors’ functions related to nominations andcompensation, etc. for Directors and Executive Officers. The
Management Deliberation Committee, which is positioned as
an advisory body to the Board of Directors, is composed of amajority of members who are Independent Outside Directors.

Advisory Board

62

Sustainability(Governance)

Board of Directors and Executive Officers

Directors(as of June 29, 2022)
Directors Serving as Audit and Supervisory Committee Members
OutsideAudit and Supervisory Committee Member

Audit and Supervisory Committee Member

Audit and Supervisory Committee Member

Iwao Otsuka

Kenji Miyoshi

Hiroshi Nagata

Tetsuo Takeuchi

Kaname Saeki

Junko Miyoshi

April 1976 Joined the Bank
June 2003 General Manager, Oita Branch
August 2006 General Manager, Human Resources Division
June 2007 Director, General Manager, Human Resources Division
June 2008	Director, General Manager, Head Office, Business
Department
June 2010	Managing Director, General Manager, Branch Banking Group
June 2011 Senior Managing Director (Representative Director)
June 2012 President (Representative Director)
April 2020 Chairman (Representative Director)
April 2021 Chairman (current position)

April 1982 Joined the Bank
August 2009 General Manager, Osaka Kita Branch
August 2012 General Manager, Funds Operation & Securities Division
June 2014	Executive Officer, General Manager, General Planning Division;
General Manager, Subsidiaries & Affiliates Department,
General Planning Division; General Manager, ICT Strategy
Planning Department, General Planning Division
June 2015	Managing Executive Officer, General Manager, General
Planning Division; General Manager, Subsidiaries & Affiliates
Department, General Planning Division; General Manager, ICTStrategy Planning Department, General Planning Division
June 2016	Managing Executive Officer, Deputy General Manager,
Branch Banking Group
June 2017 Managing Director
June 2019 Senior Managing Director (Representative Director)
April 2020 President (Representative Director) (current position)

April 1987 Joined the Bank
February 2015 Acting General Manager, General Planning Division
June 2016	General Manager, General Planning Division; General
Manager, Subsidiaries & Affiliates Department, General
Planning Division
June 2017	Executive Officer, General Manager, General Planning
Division; General Manager, Subsidiaries & Affiliates
Department, General Planning Division
June 2019	Managing Executive Officer, General Manager, General
Planning Division; General Manager, Subsidiaries &Affiliates Department, General Planning Division
June 2021 Managing Director
June 2022	Senior Managing Director (Representative Director)(current position)

April 1980
Joined the Bank
February 2008	Acting General Manager, Systems Development Division
August 2009 General Manager, Systems Development Division
June 2011	Director, General Manager, Systems Development
Division
June 2015	Managing Executive Officer, General Manager ofSystems Development Division
June 2016
Managing Director, Chief Information Officer
June 2020
Senior Managing Director, Chief Information Officer
April 2021
Senior Managing Director
June 2021	Director (Audit and Supervisory Committee Member)(current position)

April 1968 Joined Teito Rapid Transit Authority
March 1975 Joined Iyo Railway Co., Ltd. (currently IYOTETSU Group Co., Ltd.)
June 1995	General Manager, Engineering Division, Iyo Railway Co., Ltd.
(currently IYOTETSU Group Co., Ltd.)
June 1997	Director, General Manager, Engineering Division. Iyo Railway Co.,
Ltd. (currently IYOTETSU Group Co., Ltd.)May 1998	Director, General Manager, Railway Division, Iyo Railway Co., Ltd.
(currently IYOTETSU Group Co., Ltd.)
June 1999	Director, General Manager, Railway & Vehicles Division, Iyo
Railway Co., Ltd. (currently IYOTETSU Group Co., Ltd.)
June 2001	Managing Director, Iyo Railway Co., Ltd. (currently IYOTETSU Group Co.,Ltd.)
June 2005	Senior Managing Director, Iyo Railway Co., Ltd. (currently
IYOTETSU Group Co., Ltd.)
April 2006	President and Representative Director, Iyo Railway Co., Ltd.
(currently IYOTETSU Group Co., Ltd.)
June 2012	Outside Auditor, the Bank
June 2015	Representative Director and Chairman, Iyo Railway Co., Ltd.
(currently IYOTETSU Group Co., Ltd.)
June 2015	Director (Audit and Supervisory Committee Member), the Bank
(current position)
June 2020	Director and Advisor, IYOTETSU Group Co., Ltd.
June 2022 Retired as Director and Advisor, IYOTETSU Group Co., Ltd.

October 1986 Joined Ability Center inc.
August 1987	Representative Senior Managing Director, Ability Centerinc.
October 1990 President and Representative Director, Ability Center inc.
June 2016	Director (Audit and Supervisory Committee Member), theBank (current position)
June 2018 Chairperson, Ability Center inc. (current position)

Managing Director, General Manager, Corporate BranchBanking Group, Group CWBO*

Kensei Yamamoto

Masamichi Ito

Hirohisa Senba

April 1985 Joined the Bank
August 2013	General Manager, Solution Business Division; General
Manager, Corporate Growth Support Office, Solution
Business Division; General Manager, Growth
Industrialization Support Office, Solution Business Division
May 2015	Group Head, Yawatahama Group; General Manager,
Yawatahama Branch
June 2015	Executive Officer, Group Head, Yawatahama Group;
General Manager, Yawatahama Branch
June 2017	Managing Executive Officer, Deputy General Manager, BranchBanking Group; General Manager, Corporate & Retail
Banking Planning Division; General Manager, BusinessSupport Center, Corporate & Retail Banking Planning Division
August 2018	Managing Executive Officer, General Manager, Head
Office, Business Department
June 2020 Managing Director, General Manager, Branch Banking Group
June 2021 Managing Director (current position)

April 1985 Joined the Bank
June 2014 General Manager, Oita Branch
August 2016 General Manager, Hiroshima Branch
June 2017 Executive Officer, General Manager, Hiroshima Branch
June 2019	Managing Executive Officer, General Manager, Ship
Finance Division
June 2021 Managing Director (current position)

April 1988 Joined the Bank
October 2016	Group Head, Hashihama Group; General Manager,
Hashihama Branch
August 2017 General Manager, Credit Division
June 2018 Executive Officer, General Manager, Credit Division
June 2019	Executive Officer, General Manager, Tokyo Branch;
General Manager, Financial Market Business Office
June 2020	Managing Executive Officer, General Manager, Tokyo
Branch; General Manager, Financial Market Business Office
June 2021	Managing Director, General Manager, Branch Banking Group
June 2022	Managing Director, General Manager, Corporate BranchBanking Group (current position)

Group Chief Executive Officer (Group CEO)

Roles
Decisions on management plans and business execution of
the entire Group

Group Chief Financial Officer (Group CFO)

Overseeing finance and accounting for the entire Group*Excluding the matters to be resolved by the Board of Directors

Group Chief Strategy Officer (Group CSO)

Koichi Kihara
April 1989
Joined the Bank
February 2016 General Manager, Shinjuku Branch
August 2018	General Manager, Corporate & Retail Banking Planning
Division
June 2019	Executive Officer, General Manager, Corporate & Retail
Banking Planning Division
June 2020	Managing Executive Officer, General Manager,
Corporate & Retail Banking Planning Division
June 2021	Managing Executive Officer, Deputy General Manager,
Branch Banking Group
June 2022	Managing Director, General Manager, Personal BranchBanking Group (current position)

IYO BANK Integrated Report 2022

Overseeing management plans for the entire Group

Group Chief Risk Officer (Group CRO)

Overseeing risk and compliance for the entire Group

Group Chief Credit Officer (Group CCO)

Overseeing credit screening and management for the entire
Group

Group Chief Whole Business Officer (Group CWBO)

Overseeing corporate business for the entire Group

Group Chief Retail Business Officer (Group CRBO)
Group Chief Information Officer (Group CIO)

Overseeing personal business for the entire Group
Overseeing system and administrative operations for theentire Group

Audit and Supervisory Committee Member

Keiji Joko

Yuichi Ohashi

Yoriko Noma

April 1968 Joined Ehime Prefectural Government
April 2006	General Manager, Economics and Labor Department,
Ehime Prefecture
April 2008	General Manager, Agriculture, Forestry and Fisheries
Department, Ehime Prefecture
April 2010 Advisor, Ehime Prefecture
December 2010 Assistant to the Governor, Ehime Prefecture
April 2012 Deputy Governor, Ehime Prefecture
August 2014 Special Advisor, Ehime Prefecture
June 2015 Retired as Special Advisor, Ehime Prefecture
June 2015 Chairman, Ehime Guarantee
March 2019 Retired as Chairman, Ehime Guarantee
June 2019	Director (Audit and Supervisory Committee Member), theBank (current position)

July 1992
Professor, Ehime University School of Medicine
March 2003 Director, Ehime University Hospital
March 2006 Executive Director, Ehime University
April 2009 Executive Director and Vice President, Ehime University
April 2015 President, Ehime University
March 2021 Retired as President, Ehime University
April 2021	Director, Minamimatsuyama Hospital Eye Center, Social
Medical Corporation Jinyuukai (current position)
June 2021	Director (Audit and Supervisory Committee Member), theBank (current position)

April 1986 Registered as attorney-at-law
April 1986	Joined Hayakawa Sogo Law Offices (currently
TOKYO-HIRAKAWA Patent/Law Office, Cosmo Law Office)November 1992 Joined Sakura Kyodo Law Offices
January 1995 Joined Oshima Sogo Law Offices
February 1999 Partner, Miyakezaka Sogo Law Offices (current position)
June 2002 Auditor, Oracle Corporation Japan
June 2008 Retired as Auditor, Oracle Corporation Japan
April 2017 Director, Japan Intellectual Property Arbitration Center
March 2018	Retired as Director, Japan Intellectual Property Arbitration
CenterJune 2021	Director (Audit and Supervisory Committee Member), theBank (current position)(Significant concurrent positions)Auditor & Supervisory Board Member (Outside), AJIS Co., Ltd.
Director (Outside), Wellco Holdings Co., Ltd

Executive Officer
Senior Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer
Managing
Executive Officer

Keijiro Joko
Shinya Fujita
Yasuji FujitaGroup CIO
Chairman, Iyogin Computer Service Company Limited
President and Representative Director, Iyogin Leasing
Company Limited
Group Head, Imabari Group; General Manager, Imabari
Branch; General Manager, Nakahama Branch; General
Manager, Chikami Branch

General Manager, International Division; General
Manager, International Affairs Office, International
Division
General Manager, Tokyo Branch; General Manager,
Financial Market Business OfficeNiihama Group Head; General Manager, Niihama
Branch; General Manager, Noborimichi Branch
General Manager, Human Resources Division; General
Manager, Diversity Promotion Office, Human Resources
Division; General Manager, Health Management
Promotion Office

Executive Officer

Kazushige Yano

Executive Officer

Masahiko Kimura

Executive Officer

Sasaki Nobuyuki

Executive Officer

Takeshi Watanabe

Executive Officer

Takashi Sagayama

General Manager, Business Marketing Division

Executive Officer

Takashi Murakami

General Manager, Osaka Branch

Kazuya Chikata

General Manager, Internal Audit Division

Yoshiki Kume

In charge of local industries, Branch Banking Group

Naoaki Fujita

General Manager, Funds Operation & Securities Division

Takashi Tokunaga

General Manager, Head Office, Business Department

Executive Officer

Ryuji NishiharaGroup Head, Takamatsu Group; General Manager,
Takamatsu Branch

Executive Officer

Toshiki Hamaguchi

President and Representative Director, Iyogin CapitalCompany Limited

Executive Officer

Tetsuya Matsuzaki

General Manager, Hiroshima Branch

Executive Officer

Yasumi Inada

General Manager, Systems Development Division

Executive Officer

Shuhei Kurita

Executive Officer

Norihiko Kawasaki

General Manager, Corporate Consulting Division

Shikoku Alliance Securities Co., Ltd.
President and Representative Director

IYO BANK Integrated Report 2022

Corporate DataManaging Director, General Manager, Personal BranchBanking Group, Group CRBO*

Audit and Supervisory Committee Member

SustainabilityGroup Chief Officers

Audit and Supervisory Committee Member

Business Strategy and Plan for
Realizing the Long-Term Vision

Managing Director, Group CCO*

OutsideValue Creation Story

Managing Director, Group CRO*

OutsideLetters from theManagement

Senior Managing Director (Representative Director),
Group CFO*; CSO*

Holding Company

President (Representative Director), Group CEO** The Group Chief Officer System has been introduced, and under the overall supervision of the Group CEO, Group Chief
Officers are assigned as persons in charge of key areas in order to promote unified and strategic initiatives across theGroup, thereby building an integrated Group management control structure. * Currently, the following Group Chief
Officers have been assigned.

63

OutsideChairman

OutsideAbout Iyo Bank

Strong Management Foundation

64

Sustainability

Strong Management Foundation(Governance)

About Iyo Bank

Risk management<Basic Concept>

Risk Category

Credit risk

As a division to manage credit risks, the Risk Management Division, which is completely independent from sales
promotion divisions and credit-related divisions, is responsible for the appropriate operation of the “internal rating
system”, which underlies the management, such as design, verification, and monitoring of operation of the system. On
the other hand, the credit-related divisions (Credit Division, Ship Finance Division, Customer Loan Center) conduct strict
and comprehensive screening in consideration of customers’ financial condition, purposes for the loan and ability to
repay, ensuring independence from the sales promotion divisions.

Operational risk

The Bank classified operational risk into five risk categories, i.e., 1) administrative risk, 2) system risk, 3) legal risk, 4)
human-error risk, and 5) fixed asset risk, so as to comprehensively and effectively manage all of these risks. Divisions
responsible for each type of risk management manage respective risks from a professional perspective, and Risk
Management Division, as a supervisor for operational risk, comprehends and manages the entire operational risk.
Striving to identify not only risks which came to surface but also potential ones, the Operational Risk Administration
Committee is playing a main role in making the operational risk management more sophisticated.

Reputational risk

With regard to reputational risk, we have enhanced management of various risks that are sources of the reputationalrisk, and are further making efforts for developing corporate culture in which people naturally comply with ethics, laws
and regulations, and internal rules, etc. In addition, we have in place a system where complaints from customers, etc.
are dealt with by the Customer Satisfaction Enhancement Ofﬁce, promptly reported to management, and reflected inoperations.

<Comprehensive Risk Management Structure>

Risk Management Framework [Current]
Board of Directors

Audit and Supervisory Committee

Management Planning Council(CX Enhancement Committee)

In order to respond to the threat of cyberattacks, a crossorganizational body I-CSIRT*1 has been established for the
purpose of facilitating mutual cooperation and communication
among respective divisions including the Group companies
under emergency and normal situations to respond to threatof cyberattacks, a cross-organizational body I-CSIRT*1 has been
established to develop a system for early warning andemergency responses against cyberattacks.

Apart from these risk management structures, we haveformulated a business continuity plan based on the business
continuity policy in a time of emergency established in
preparation for the occurrence of emergency situations which
may threaten our business continuity, such as large-scale
earthquakes and other natural disasters, as well as the spreadof infectious diseases.
Also, to improve effectiveness of the business continuity
plan, a Director in charge of General Planning Division is
assigned as a business continuity management supervisor.
Under his/her instructions and supervision, the business
continuity structure is developed, where various measures aretaken even at normal times in preparation for the Nankai
Trough earthquake, heavy rainfall, cyberattacks, and the
spread of infectious diseases, and the effectiveness of thebusiness continuity plan is verified through periodical drills toimprove the plan continuously.

Compliance Council

Emergency OfficeFinancial Services
AgencyBank of Japan
PoliceEmergency Office (Secretariat:
General Planning Division)

Credit Risk Administration
Committee (Secretariat: Risk
Management Division)Operational Risk Administration
Committee (Secretariat: Risk
Management Division)

I-CSIRT (*1)

Compliance Committee(Secretariat: Compliance Division)

Under normal
situations

Operational risk
Liquidity
risk

Risk Management
Division

Credit risk

Risk
Management
Division

Administrative
System risk
risk

Legal risk

Humanerror risk

Fixed asset
risk

Risk Management Division

Operations
SystemCredit-Related Management Development Compliance
Division
Divisions*
Division
Division

Human
Resources
Division

GeneralAffairs
Division

Reputationalrisk

Customer
Satisfaction
Enhancement
Ofﬁce

Compliance

Compliance Division

Head Ofﬁce, Bank Branches*Credit Division, Ship Finance Division, Customer Loan Center

65

IYO BANK Integrated Report 2022

Under emergency
Responses to incidents
situations

National Center of Incident Readinessand Strategy for Cybersecurity
Financials ISAC Japan(*2)
JPCERT/CC (*3)
Japanese Bankers Association/
Regional Banks Association of Japan

Head Office, Bank Branches,
and Group companies

Corporate Data

Divisions
responsible
for each typeof riskmanagement

Market risk

Internal Audit Division

Risk
Categories

Information gathering/analysis/
evaluation, security measures,monitoring activities, threat/vulnerability management
education/exercise/drill

Sustainability

Budgeting and Integrated Risk
Management Council<Business Continuity Structure>

President, Officers in charge of General
Planning Division

Executive Committee
Management Planning Council(ALM Committee)<Measures for Cybersecurity>

Business Strategy and Plan for
Realizing the Long-Term Vision

The Bank’s risk management framework has the following four main pillars: 1. legal observance under the Compliance Committee; 2.
managing revenue-generating risk assets under the ALM Committee; 3. risk management that focuses on curbing credit risk by theCredit Risk Administration Committee; and 4. management of operational risk that should be minimized such as administrative andsystem risks, under the Operational Risk Administration Committee.
The ALM Committee assesses the Bank’s risk exposure is assessed by the ALM Committee by quantifying market and credit risk,
aiming to put in place optimal fund management and procurement structures are put in place, and to assure stable earnings over the
medium and long term.
Additionally, the Credit Risk Administration Committee works to manage credit risks, design and evaluate frameworks for theInternal Rating System, and resolve issues concerning Basel Regulations.
On the other hand, the Operational Risk Administration Committee is taking measures to refine operational risk management
through the formulation of organization-wide measures for important topics after identifying, assessing, and monitoring actual
operational risks. With regard to administrative risk, system risk, legal risk, human-error risk, and fixed asset risk, which together
constitute operational risk, organization-wide responses, including the establishment assignment of supervising offices for each risk
category of risk, and rigorous risk management. At the same time, as a supervisory body, the Risk Management Division is
responsible for improving the management system.
In addition, the Group CRO is assigned to supervise risk management of the Group as a whole.

Value Creation Story

Liquidity risk

The Bank semiannually formulates financial plans considering the balance of investment and procurement, and examines
differences between monthly-prepared forecasts/actual results and the plan. Abnormal changes in trading in the market
are checked and reported to the ALM Committee every month. Thereby, the occurrence of losses caused by liquidity
risks that came to surface are prevented.

Letters from theManagement

Market risk

In order to properly manage market risk and maintain the Bank’s soundness and profitability, the Bank has conducted
integrated management of market risk under a risk management structure centering on the ALM Committee. The ALM
Committee also coordinates basic policies on investment and procurement, risk management plans, and hedging
strategies by analyzing the profitability structure and forecasting the market and the economic environment. The Risk
Management Division, set up as an a supervisor independent from divisions that execute transactions and administrative
divisions responsible for settlement, etc., checks the appropriateness of market transactions dealt with by other divisions.

Holding Company

In its daily business operations, a bank is exposed to credit risks, market risks and other risks. These risks are growing in diversity andcomplexity as deregulation progresses and the business of banking grows ever more complex. Therefore, finding ways ofappropriately managing risk has become a vital challenge for a bank.
On the other hand, for a bank, risk-taking is essential for generating revenue. Only by assuming a reasonable level of risk, it ispossible to ensure appropriate earnings. Such relation exists between risks and earnings.
Accordingly, it is necessary for the bank to set reasonable profit targets after factoring in all conceivable risks, and control therisks with appropriate measures.
Under such circumstances, Iyo Bank treats risk management as a priority issue. Each fiscal year, the Board of Directors compiles arisk management plan, and makes best efforts to further strengthen the risk management system and improve the level of risk
management.

Security vendor(*1) CSIRT of Iyo Bank. CSIRT is a collective term of organizations which deal withmatters related to computer security.
(*2) Organization which shares and analyzes information related to cybersecurity among
Japanese financial institutions(*3) Organization which receives reports on domestic computer security incidents arisingthrough the internet, and considers countermeasures, and provides advice thereforfrom a technical perspective.

IYO BANK Integrated Report 2022

66

Sustainability

Strong Management Foundation(Governance)

About Iyo Bank

Compliance

Measures for overseas loans<Compliance Structure>
Board of Directors
Compliance Council(Executive Committee)

Recommends

Audit and Supervisory
Committee

Compliance Committee

ReportingDirects

ReportingDirects

Compliance Division

Board of Directors

President

Audit and Supervisory
Committee

ReportingManagement

The Council meets every month<Participants>
Directors, General Managers of
Relevant Divisions

Compliance Council (Executive Committee)
Reporting and deliberation on matters related
to preventing anti-money laundering
Reporting

The Committee meets every month<Participants>
Responsible Officers, General
Managers of Relevant Divisions

Compliance Division(Contact for reports and consultations)

Instructions/Directions

Compliance Committee
Supervisors (responsible officers)
Reporting

Verification
Audit

Instructions/Directions
Compliance Division

Audit and Supervisory Committee<(Whistle-blowing hotline)>

Information Sharing*

Investigation/Correction DivisionCorporate lawyers and other lawyers(External contact for consultation)*Information sharing is limited to the scopeto which the whistle-blower agrees.

Conduct investigations and takecorrective measures in cooperation
with the Compliance Division

Whistle-blowing/Feedback

Instructions/Directions

2nd
line

In respective measures such as domestic/foreign exchange AML/CFT (including
anti-social forces), and correspondent management, etc. 1) Improve management
structure, establish various rules, 2) Supervise and give directions to the 1st line
(effectiveness measurement - reflecting in risk assessment)

In order to ensure a structure to allow customers to make transactions without anxieties, and improve convenience for customers,
we have continuously verified and improved operations from a viewpoint of customers, working on management including customer
protection. For personal information, with a privacy policy and other rules developed, we are making efforts for the protection of
personal information by educating our bank staff on a regular basis.

Reporting
1st line

Monitoring/Warning

Operations Management Division, International Division,and other related divisions
Administrative operations related to anti-money laundering

Business Strategy and Plan for
Realizing the Long-Term Vision

Reporting<Customer Protection (Management of customer protection, etc.)>

3rd line
Internal Audit
Division

Monitoring/Warning
Directions/Support

Directions on
administrative operations

Inquiry
Sales Division

Measures for anti-money laundering in operations facing customers

Transaction filtering/monitoring

With personnel and supervising division responsible forcountermeasures against money laundering and terrorism
funding determined, we have established a centralized control
structure, and are taking the cross-organizational measures
under coordinated efforts in cooperation with relevant divisions.

In September 2016, we introduced a transaction filtering system
to prevent transactions with high-risk customers by checking
against multiple blacklists collectively. In October 2016, with atransaction monitoring system introduced, we established amechanism to detect suspicious transactions and have been
appropriately operating it.

Continuous Customer Management
As continuous customer management, we have been checking
customer information on a regular basis since October 2020.

67

IYO BANK Integrated Report 2022

Joint consideration with TSUBASA AML Center
In October 2020, the AML Center was established within
TSUBASA Alliance Co., Ltd.
Aiming to advance AML measures with collective
knowledge of each bank and streamline overlapping
operations, AML Center has operated smoothly.

Head Offices
Branches

IYO BANK Integrated Report 2022

Corporate Data

Establishment of Centralized Control Structure

Sustainability<Countermeasures against Money Laundering and Terrorism Funding>Based on the Act on Prevention of Transfer of Criminal Proceeds and Guidelines for Anti-Money Laundering and Combating the
Financing of Terrorism, the Bank has striven to maintain and develop sound financial system by strengthening the management
structure for preventing illegal use of accounts, etc.

Value Creation Story

For the purpose of early detection and correction of violation of laws and regulations, etc., we are making efforts for the appropriate
operation of the whistle-blowing system.
Various contacts have been set taking into account the convenience of whistle-blowers, for example, a contact for reports andconsultations set in the Compliance Division, a hotline for whistle-blowing set at the Audit and Supervisory Committee, andcorporate lawyers and other lawyers as external contacts for consultation.
In accordance with the Whistleblower Protection Act, we thoroughly keep the secret and prohibit disadvantageous treatment inorder to enable a whistle-blower to use the contacts and hotline without hesitation.

Letters from theManagement

Organizational structure for preventing anti-money laundering<Whistle-blowing System>

Whistleblowers

Holding Company

To improve the compliance structure, we formulate acompliance program for each fiscal year.
Compliance Council (Executive Committee) chaired by the
President has been established, and progress in the complianceprogram and other compliance-related matters are reported.
In addition, for the purpose of fostering and improving
mindset for compliance, lectures on compliance are held at alllevel-based workshops, and compliance training sessions arealso held at each workplace on a regular basis.

In relation to officers, shareholders, and substantial controllingpersons, etc. of overseas corporate customers, we conduct
thorough investigations and verifications by checking against
respective sanction lists, and even searching past negative
information covered across the world. Furthermore, in the ship
finance with a lot of overseas corporate customers, sea routesof vessels subject to loans are monitored to detect entry insanctioned countries in real time. Like this, we have conductedinvestigation and verification with advanced methods.

68Sustainability(Governance)

Message from an Outside Director

About Iyo Bank

Strong Management Foundation

Building up group governance following the transition to a holding company structure

Director serving as Audit andSupervisory Committee Member

Yoriko Noma

Advanced initiatives and a corporate culture of openness

69

IYO BANK Integrated Report 2022

The Bank celebrates its 145th anniversary in this fiscal year. Up until now, we have experienced turmoil, such as wars andfinancial crises. I believe the Bank’s credibility is a gift we have received owing to our constant commitment to selftransformation, and how we are always thinking about a “prosperous future” and striving to “provide advanced, highquality, comprehensive financial information services wholeheartedly.” Today, we live in times that is very difficult to navigate.
However, conversely, I also see this as an opportunity for the Bank to repeatedly self-transform while keeping these traditions,so as to achieve further development.
Although Ehime has a strong economic foundation, going forward, I believe that we should contribute to new initiatives
such as nurturing startup companies from Ehime.
Even after the transition to a holding company structure, it is important for each group company to be proud ofthemselves, and to flexibly promote various activities to “create a bright and prosperous future for the region.”
Even before I became a Director, I have been riding a road bike, which is my hobby, and have traveled around the
Shimanami Kaido, etc. many times. I love Iyo because of its
scenic beauty and warm climate. I strongly hope that thisbeautiful land will remain forever, and that more industries will
flourish and more people will come to gather here. To that end,
the role played by the Bank is significant, and by constantly
working on self-improvement, I would like to be fully involved inthis endeavor.

Corporate Data

As a lawyer, I mainly specialize in intellectual property rights, corporate law, and corporate revitalization. By capitalizing on
the knowledge I have accumulated thus far, I wish to contribute to the strengthening of risk management and compliancesystems in banking operations. For instance, I speak in light of my own awareness of diversity, etc., and offer opinions related
to intellectual property from the viewpoint of an expert. In the future, I believe that the Bank will be required to makeeffective use of the intellectual property it owns.
In addition, since I am not from Ehime Prefecture, and I am a woman, to some extent, I can be deemed as being in aminority position among the Officers of the Bank. I plan to make proposals that can be utilized in management from a newperspective, such as the utilization of diverse human resources.

Wanting to contribute to the local economy with the pride of the Group

Sustainability

Raising awareness of intellectual property within the GroupI believe that it is imperative for the Bank to promote initiatives for diversity management. Organizations tend to lose theirvitality when they are too homogenous. To prevent this from happening, it is essential to recruit, promote, and utilize diverse
human resources. Going forward, the Bank must encourage diverse personnel to come up with good ideas and provide newvalue to customers through clashes of their diverse perspectives and values.
Governance reform centered on sustainability is also an urgent issue. The Bank has set the following goals: reduce CO2
emissions by 50% compared to fiscal 2013 by 2030, and achieve a total of ¥1.4 trillion in sustainability finance from fiscal
2021 to fiscal 2030, of which ¥700 billion is in the environmental sector. We are working on SDGs by newly establishing the
Sustainability Committee and its subsidiary meeting body, the Sustainability Subcommittees.
I believe it is important for the Bank to conduct the following two practices: set an example as a leading company in theregion by implementing diversity management and sustainability initiatives, and actively support companies that are making
similar efforts.

Business Strategy and Plan for
Realizing the Long-Term Vision

A year has passed since I was appointed as an Outside Director in June last year. Until then, through cases I undertook as alawyer, my image of banks was one of rigidity. However, after taking office, that image was overturned in a good way.
The Bank actively implements advanced initiatives, such as the smartphone app “AGENT” that allows customers to havethe same experience as visiting a bank in person through a video call, the adoption of business casual attire, mandatory
childcare leave for men, and opening branches that are like salons. I truly feel that the Bank is putting into practice its longterm vision of being “a corporate group that continues to create and provide new value.”
The Bank’s atmosphere is one of openness, where it is easy to participate in meetings, and at the same time, informationis thoroughly shared. In 2015, the Bank transitioned to a company with an Audit and Supervisory Committee. Currently, theBoard of Directors has 13 members, of whom six are Directors serving as Audit and Supervisory Committee Members, five are
independent Outside Directors, and two are women. Communication between Representative Directors and the Audit andSupervisory Committee takes place frequently at Directors’ meetings and other periodic meetings, etc. Frank exchanges of
opinions have been possible regarding management issues and the preparation of an audit environment for the Audit andSupervisory Committee.

Promotion of diversity management and sustainability

Value Creation Story

Q1 Regarding the Governance System

Q2 The Future of Iyo Bank

Letters from theManagement

Creating a new awarenessof governance in the Groupthrough transition toa holding company structure

Holding Company

With the transition to a holding company structure scheduled for October this year, the Bank is striving to upgrade its
governance system through initiatives to reform its governance.
The Group contains a wide range of companies, from financial services companies to software companies and thinktanks. There is a need to break away from the corporate culture that has been centered on banks, and to improve theindependence of group companies by upgrading group governance and reforming the awareness and behavior of officers
and employees. In order to prevent the Bank from looking down on the Group from above, and to prevent group companies
from thinking of themselves as subsidiaries, I will continue to monitor the effectiveness of the Group’s business management
structure and business management more than ever before.

IYO BANK Integrated Report 2022

70

Corporate Data (as of March 31, 2022)
About Iyo Bank

Organizational Chart

Consolidated Balance SheetThe Iyo Bank, Ltd. and its Consolidated Subsidiaries
March 31, 2022

Chairman

2022

Audit and Supervisory Committee

Vice President
Senior Managing Director
Managing Director

Branches/Sub-Branches

Branches

LIABILITIES AND NET ASSETS
Liabilities
Deposits (Note 2-4)
Call money and bills soldPayables under repurchase agreements (Note 2-4)
Payables under securities lending transactions (Note 2-4)
Borrowed money (Note 2-4)
Foreign exchange
Borrowed money from trust account
Other liabilities
Accrued employees’ bonuses
Net defined benefit liability
Reserve for losses on repayment of dormant bank accounts
Reserve for contingent losses
Reverse for share-based payments
Reserve under the special laws
Deferred tax liabilities
Deferred taxes on revaluation excess (Note 2-6)
Acceptances and guarantees
Total liabilities¥6,626,125
7,343
74,232
139,898
750,302
1,837
554
86,086
1,781
10,712
1,175
881
413
3
73,7309,520
28,396
7,812,998¥6,495,645
61,624
199,289
91,604
743,645266
576,058
1,785
11,326
1,652
703
289
3
87,228
9,573
28,796
7,809,498$54,139,431
59,996
606,520
1,143,050
6,130,419
15,0094,526
703,374
14,551
87,523
9,600
7,198
3,374
24
602,418
77,784232,01263,836,898

Net assets
Common stock
Authorized — 600,000,000 shares
Issued — 323,775,366 shares
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
Valuation difference on available-for-sale securities
Net deferred gains (losses) on derivatives under hedge accounting
Land revaluation excess (Note 2-6)
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

20,94820,289468,487(4,871)
504,854
190,431
1,152
19,058
8,973
219,616208
7,119
731,798¥8,544,797

20,94820,352446,871(5,045)483,127
222,338(374)
19,1788,279
249,421273
8,418
741,240¥8,550,739

171,157
165,773
3,827,820(39,799)
4,124,961
1,555,935
9,412
155,71573,314
1,794,394
1,699
58,166
5,979,230$69,816,136

See Notes to Consolidated Financial Statements.

71

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

Corporate Data

In charge of BusinessIn charge of Foreign Exchange

In charge of Loans

In charge of Operations

In charge of BusinessIn charge of Foreign Exchange

In charge of Loans

In charge of Operations

Business Section

Foreign Exchange Section

Loans Section

Operations Section$12,376,501
50,747
4,289
47,11913,739,880
41,237,004(307,214)
92,409245,052
1,118,057
592,425
76,999309,191
1,609
232,012$69,816,136

Sustainability

Branches / Sub-Branches¥1,415,522
6,834
649
6,427
1,897,768
4,975,984(37,043)
8,596
31,680100,097
72,991
9,035
33,201
195
28,796¥8,550,739

Business Strategy and Plan for
Realizing the Long-Term VisionGroup¥1,514,760
6,211
525
5,767
1,681,624
5,046,997(37,600)
11,31029,992
136,839
72,507
9,424
37,842
197
28,396¥8,544,797

Value Creation Story

Funds Operation & Foreign Exchange Office

Promotion Office for Operationalization of Primary Industries
Official Office

Overseas Representative OfficeInternational Affairs Office

Payment Business Office

Real Estate Investigation Office
Loan Business Support Center
Market Loan Screening Office
Corporate Support OfficeFinancial Instruments Operation Management Office
Administrative Concentration Center

Headquarters Operations Support Center

Promotion Office for Health Management

Promotion Office for Diversity

Preparatory Office for Transition to Holding Company Structure
Promotion Office for Shikoku AllianceBusiness Continuity Management Office
ICT Strategy Planning Department
Subsidiaries & Affiliates Department(Overseas Bank Branches)(Domestic Bank Branches)

Audit and Supervisory Committee OfficeInternal Audit DivisionTokyo Representative Office
General Secretariat Section
Compliance Division
Customer Satisfaction Enhancement Office
Risk Management Division
Financial Market Business Office

Funds Operation & Securities Division

Regional Vitalization DivisionInternational Division
Customer Support Center
Personal Consulting DivisionCorporate Consulting Division

Business Marketing Division

Customer Loan Center
Ship Finance Division

Credit Division
Systems Development Division

Operations Management Division

General Affairs Division

Human Resources Division
Public Relations & CSR Office

General Planning Division

Bank Branches

2022

Letters from theManagement

Branch Banking Group

2021

ASSETSCash and due from banks
Monetary claims purchased
Trading account securities
Money held in trust
Securities (Notes 2-1,2-4 and 2-8)
Loans and bills discounted (Notes 2-2,2-3,2-4 and 2-5)
Reserve for loan losses
Foreign exchange (Note 2-3)
Lease receivables and investment assets
Other assets (Note 2-4)
Tangible fixed assets (Note 2-7)
Intangible fixed assets
Net defined benefit asset
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Total assets

Holding Company

President

Head Office, Business Department

Thousands of U.S.
dollars (Note 1-1)

Millions of yen

The Board of Directors

72Consolidated Statement of Changes in Net Assets

The Iyo Bank, Ltd. and its Consolidated Subsidiaries
For the year ended March 31, 2022

The Iyo Bank, Ltd. and its Consolidated Subsidiaries
For the year ended March 31, 2022

2022

2022
For the year ended March 31, 2022

¥ 48,852
24,816—
2,028
14,41536,656
7,220
133,990¥ 49,572
25,530(160)
1,049
14,321
29,882
4,655
124,852

1,722
974
187
12
1,479
5,319
21,30851,90916,13899,052
25,79910,302847
11,14926,626208¥ 26,417
Yen¥83.3983.32
16.00

84,173
6,920
91,094
217,550
1,699$ 215,842
U.S. dollars (Note 1-1)

¥57.12
57.05
14.00

$0.68
0.68
0.13

Retainedearnings

Treasurystock¥20,948¥20,352¥446,871¥(5,045)¥483,127

20,94820,352(167)
446,704(5,045)(167)
482,959(4,754)
26,417

119

—

(62)

21,782

174

21,894¥20,948¥20,289¥468,487¥(4,871)¥504,854

Thousands of U.S. dollars (Note 1-1)
Stockholders’ equity

For the year ended March 31, 2022

Balance at the beginning of
the accounting period
Cumulative effects of changes inaccounting polices
Restated balance
Changes during the accounting period
Dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of land revaluation excess
Changes in items other thanstockholders’ equity, net
Total changes during
the accounting period
Balance at the endof the accounting period

Commonstock

Capitalsurplus$171,157$166,288 $3,651,205

171,157

166,288(41,220)972—$171,157(506)

177,972$165,773 $3,827,820

1,421(1,364)
3,946,065(38,843)
215,842(5,212)
6,127
972

178,887$(39,799) $4,124,961

Thousands of U.S.
dollars (Note 1-1)

2021

2022

¥26,626(31,213)(33,435)
1,527
693¥ (4,587)¥18,250
64,42856,666(1,167)
8,929¥82,678$217,550(255,029)(273,184)
12,476
5,662$ (37,478)¥ (3,267)(1,319)¥81,4131,265$ (26,693)(10,777)Land
revaluation
excessRemeasure- Total accumuments oflated otherdefinedcomprehenbenefit plans sive income

Stockacquisitionrights

Noncontrollinginterests

Total net
assets¥222,338¥ (374)¥19,178¥8,279¥249,421¥273¥ 8,418¥741,240

222,338(374)

19,1788,279

249,421

273

8,418

(167)
741,073(4,754)
26,417
(638)
750
119

(31,906)

1,527

(119)

693

(29,804)(65)(1,299)(31,169)(31,906)

1,527

(119)

693

(29,804)(65)(1,299)(9,274)¥190,431¥1,152¥19,058¥8,973¥219,616¥208¥ 7,119¥731,798

IYO BANK Integrated Report 2022

Corporate Data

2022

Balance at the beginning of
the accounting period
Cumulative effects of changes inaccounting polices
Restated balance
Changes during the accounting period
Dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of land revaluation excess
Changes in items other thanstockholders’ equity, net
Total changes during
the accounting period
Balance at the endof the accounting period

Net deferred
Valuation
gains (losses)
difference on on derivatives
available-for- under hedge
sale securities accounting

Sustainability

For the year ended March 31, 2022

Millions of yen

IYO BANK Integrated Report 2022$(41,220) $3,947,438(5,212)
6,634

(506)

Total
stockholders’equityMillions of yen

The Iyo Bank, Ltd. and its Consolidated Subsidiaries
For the year ended March 31, 2022

73

(1,364)
3,649,840

Treasurystock

Accumulated other comprehensive income

Consolidated Statement of Comprehensive Income

See Notes to Consolidated Financial Statements.

Retainedearnings(38,843)
215,842

See Notes to Consolidated Financial Statements.

ProfitOther comprehensive income (Note 4-1)
Valuation difference on available-for-sale securities
Net deferred gains (losses) on derivatives under hedge accounting
Remeasurements of defined benefit plans
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Noncontrolling interests

(638)
812

(62)

(4,754)
26,417
(638)
750
119

Business Strategy and Plan for
Realizing the Long-Term Vision

Per share of common stock (yen and U.S. dollars):
Basic net income
Diluted net income
Dividends

8,845(1,295)
7,549
18,250162¥ 18,088

12,492
2,091
571
637
8,840
41,114249,383
406,659
64,302
786,126
308,652

Balance at the beginning of
the accounting period
Cumulative effects of changes inaccounting polices
Restated balance
Changes during the accounting period
Dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of land revaluation excess
Changes in items other thanstockholders’ equity, net
Total changes during
the accounting period
Balance at the endof the accounting period

Capitalsurplus

Value Creation Story

1,529
256
70
78
1,082
5,032
30,522
49,771
7,870
96,214
37,776$ 399,150
202,761—
16,569117,779
299,501
58,991
1,094,778

Total
stockholders’equityCommonstock

Letters from theManagement

EXPENSESInterest expense:
Interest on deposits
Interest on borrowings and rediscounts
Interest on payables under repurchase agreements
Interest on payables under securities lending transactions
Other interest expense
Fees and commissions
Other operating expenses
General and administrative expenses (Note 3-1)
Other expenses (Notes 3-2)
Total expenses
Income before income taxes
Income taxes
Current
Deferred
Total taxes
ProfitProfit attributable to noncontrolling interests
Profit attributable to owners of parent

2021

Stockholders’ equity

Holding Company

INCOMEInterest and dividend income:Interest on loans and discounts
Interest and dividends on securities
Interest on receivables under resale agreements
Other interest income
Fees and commissions
Other operating income
Other income
Total income

Millions of yen

Thousands of U.S.
dollars (Note 1-1)

Millions of yen

About Iyo Bank

Consolidated Statement of Income74About Iyo Bank

Consolidated Statement of Cash Flows
The Iyo Bank, Ltd. and its Consolidated Subsidiaries
For the year ended March 31, 2022

Thousands of U.S. dollars (Note 1-1)$(3,055)

Stockacquisitionrights$156,695$67,644 $2,037,919$2,230Noncontrollinginterests

Total net
assets$ 68,780 $6,056,377(1,364)(3,055)

156,695

67,644

2,037,919

2,230

68,7806,055,012(38,843)
215,842(5,212)
6,127
972

12,476

(972)

5,662

(243,516)(531)(10,613)(254,669)

12,476

(972)

5,662

(243,516)(531)(10,613)(75,774)$ 9,412$155,715$73,314 $1,794,394$1,699$ 58,166 $5,979,230

Millions of yen
Stockholders’ equity
Retainedearnings

Treasurystock¥20,948¥14,578¥433,082¥(5,131)(4,436)18,088
(0)
86

11
137
5,761

Total
stockholders’equity¥463,478(4,436)18,088
(0)
98
137
5,761

—

5,773

13,78985

19,648¥20,948¥20,352¥446,871¥(5,045)¥483,127

Millions of yen
Accumulated other comprehensive income

For the year ended March 31, 2021

75

IYO BANK Integrated Report 2022

¥166,775

¥792

Land
revaluation
excess¥19,315

Remeasure- Total accumuments oflated otherdefinedcomprehenbenefit plans sive income¥(650)¥186,233

Stockacquisitionrights

Noncontrollinginterests

Total net
assets¥343¥21,792¥671,848(4,436)18,088(0)
98
137(5,761)—

55,563(1,167)

(137)

8,929

63,187(69)(7,612)55,50555,563(1,167)

(137)

8,929

63,187(69)(13,374)

69,392¥222,338¥(374)¥19,178¥8,279¥249,421¥273¥8,418¥741,240

Cash flows from financing activities
Proceeds from share issuance to noncontrolling stockholders
Repayments to noncontrolling shareholders
Cash dividends paid
Cash dividends paid to noncontrolling stockholders
Purchases of treasury stock
Proceeds from sales of treasury stock
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation
Net cash provided by (used in) financing activities
Foreign currency translation adjustments
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of year (Note 6-1)¥

25,799
5,089
200
5,668
136
(14,467)(1,160)
(741)
111
97
0
(75,992)
4,376(3,604)(14)(9,498)171(242,893)
766,902(26,732)(759)
356,890
12,938(106,832)
2,144
(29)
2,123
(23)
74,857(5,171)
16,990786,579(7,845)
778,734$

308,652
41,482
3,439
4,551
(24)
(37,911)(5,016)(3,889)
1,454
1,004
0
(618,498)
24,650(9,551)
400(298,978)
334(580,210)
1,066,100
54,383(4,428)4,984(1,465,291)
394,582(22,166)
12,836
13,783
4,485
630,893(26,105)
93,782(410,221)(81,991)(492,213)(1,027,100)
1,039,949
155,652(83)
910(2,517)84(3,254)
163,640(864,892)
594,326
206,516(3,073)
3,516(2,849)154(3,448)(69,750)(8,392,025)
8,497,009
1,271,770
(678)
7,435
(20,565)686(26,587)
1,337,037

22(0)(4,754)
(2)
(638)
638

52
(3)
(4,436)
(5)
(0)
0

179
(0)
(38,843)(16)(5,212)
5,212—(4,734)(8,921)(13,314)—(38,679)

33
98,696
1,413,563¥ 1,512,259

6
695,675
717,887¥1,413,563

269
806,405
11,549,660$12,356,066

Corporate Data

Balance at the beginning of
the accounting period
Changes during the accounting period
Dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of land revaluation excess
Increase (decrease) in equity resulting
from the acquisition of shares of aconsolidated subsidiary
Changes in items other thanstockholders’ equity, net
Total changes during
the accounting period
Balance at the endof the accounting period

Net deferred
Valuation
gains (losses)
difference on on derivatives
available-for- under hedge
sale securities accounting

37,776
5,077
421
557
(3)
(4,640)
(614)
(476)
178
123
0
(75,698)
3,017(1,169)49(36,592)
41(71,012)130,480
6,656
(542)
610
(179,337)
48,293(2,713)
1,571
1,687
549
77,215(3,195)
11,478(50,207)(10,035)(60,242)2022

Sustainability

Cash flows from investing activities
Purchases of securities
Proceeds from sales of securities
Proceeds from maturities of securities
Increase in money held in trust
Decrease in money held in trust
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchases of intangible fixed assets
Net cash provided by (used in) investing activities

2021

Business Strategy and Plan for
Realizing the Long-Term Vision

Balance at the beginning of
the accounting period
Changes during the accounting period
Dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of land revaluation excess
Increase (decrease) in equity resulting
from the acquisition of shares of aconsolidated subsidiary
Changes in items other thanstockholders’ equity, net
Total changes during
the accounting period
Balance at the endof the accounting period

Capitalsurplus¥

2022

Value Creation Story

For the year ended March 31, 2021

Commonstock

Cash flows from operating activities
Income before income taxes
Depreciation
Impairment losses
Increase (decrease) in reserve for loan losses
Increase (decrease) in accrued employees’ bonuses
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Increase (decrease) in reserve for losses on repayment of dormant bank accounts
Increase (decrease) in reserve for contingent losses
Increase (decrease) in reserve for share-based payments
Increase (decrease) in reserve under special laws
Interest and dividend income
Interest expense
Securities losses (gains), net
Money in trust losses (gains), net
Foreign exchange losses (gains), net
Losses (gains) on disposal of tangible fixed assets, net
Net changes in loans and bills discounted
Net changes in deposits
Net changes in borrowed money (excluding subordinated borrowings)
Net changes in due from banks
Net changes in call loans
Net changes in call money
Net changes in payables under securities lending transactions
Net changes in foreign exchange assets
Net changes in foreign exchange liabilities
Net changes in lease receivables and investment assets
Net increase (decrease) in borrowed money from trust accountInterest income received
Interest expense paid
Other
Subtotal
Income taxes paid
Net cash provided by (used in) operating activities

Letters from theManagement

Balance at the beginning of
the accounting period$1,816,635
Cumulative effects of changes inaccounting polices
Restated balance
1,816,635
Changes during the accounting period
Dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stockReversal of land revaluation excess
Changes in items other thanstockholders’ equity, net(260,691)
Total changes during
the accounting period(260,691)
Balance at the endof the accounting period$1,555,935

Land
revaluation
excessRemeasure- Total accumuments oflated otherdefinedcomprehenbenefit plans sive income

Holding Company

For the year ended March 31, 2022

Net deferred
Valuation
gains (losses)
difference on on derivatives
available-for- under hedge
sale securities accounting

Thousands of U.S.
dollars (Note 1-1)

Millions of yen

Accumulated other comprehensive income

See Notes to Consolidated Financial Statements.

IYO BANK Integrated Report 2022

76

The Iyo Bank, Ltd. and Its Consolidated Subsidiaries
For the year ended March 31, 2022

(4) Tangible and intangible fixed assets and lease assets①	Tangible and intangible fixed assets are generally stated at cost, lessthe accumulated depreciation.
		
Depreciation of tangible fixed assets, except for lease assets,of the Bank and its consolidated subsidiaries is recorded using thedeclining balance method. However, buildings acquired after April 1,
1998 and accompanying facilities and structures acquired on or after
April 1, 2016 are depreciated using the straight-line method. The
estimated useful lives of these assets are 15 – 40 years for buildings
and 5 – 10 years for equipment.
②	Depreciation for intangible fixed assets, except for lease assets, ofthe Bank and its consolidated subsidiaries is recorded using thestraight-line method. Internal use software costs of the Bank andits consolidated subsidiaries are depreciated using the straight-line
method over the estimated useful life of mainly five years.
③	Both tangible and intangible lease assets under finance leases thatare not deemed to transfer ownership of the lease property to thelessee are depreciated using the straight-line method over the leaseterm with zero residual value. In cases in which there is a residual
value guarantee in the contract, the residual value is the guaranteedvalue. In other cases, it is deemed to be zero.

(7) Reserve for losses on repayment of dormant bank accounts
Reserve for losses on repayment of dormant bank accounts is provided inconnection with inactive bank accounts the balances of which have been
derecognized as liabilities. The reserve is provided for the possible future
demands on claims of withdrawal from these accounts in an amountbased on historical reimbursement experience.
(8) Reserve for contingent losses
Reserve for contingent losses is maintained to provide against possible
losses from contingencies which are not covered by other specificreserves. The amount of reserve is based on an estimate of the amountpossible future losses.
(9) Reserve for share-based payments
Reserve for share-based payments is provided for the estimated amountof share benefit obligations at the end of the current fiscal year in orderto prepare for delivery of the bank’s shares to the bank’s directors(excluding the audit committee members) and executive officers under
the internal share delivery regulations.
(10) Reserve under special laws
Reserve under special laws is provided for contingent liabilities fromfinancial instruments and exchange. This is a reserve pursuant to Article
46-5 of the Financial Instruments and Exchange Act and Article 175
of Cabinet Office Ordinance on the Financial Instruments Business toindemnify losses incurred in connection with the purchase and sale ofsecurities and derivatives and other financial related transactions.

IYO BANK Integrated Report 2022

Corporate Data

(5) Reserve for possible loan losses
The Bank and its consolidated subsidiaries write off loans and makeprovisions for possible loan losses. For loans to insolvent customers who
are undergoing bankruptcy or other collection proceedings or who arein a similar financial condition, the reserve for possible loan losses isprovided in the full amount of such loans, excluding amounts written off
and the portion that is estimated to be recoverable due to the existenceof security interests or guarantees. For the unsecured and unguaranteed
portions of loans to customers not in the above circumstances but for who
there is a high probability of becoming so, the reserve for possible loan
losses is provided for the estimated unrecoverable amounts determined
after an evaluation of the customer’s overall financial condition.

(6) Accrued employees’ bonuses
Accrued employees’ bonuses are provided for the future payment of
employees’ bonuses based on the estimated amounts of the future
payments that are attributed to the current fiscal year.

Sustainability

3 The fiscal year of consolidated subsidiaries
The consolidated financial statements include the accounts of 7
consolidated subsidiaries with fiscal years that end December 31.
Appropriate adjustments are made for significant transactions during
the period from December 31 to March 31, the date of the consolidated
financial statements.
All significant intercompany balances, transactions and unrealized
profits and losses included in assets and liabilities are eliminated.

(3) Derivatives and hedge accounting
Derivative transactions are valued at fair value with changes in fair value
included in current income.

Business Strategy and Plan for
Realizing the Long-Term Vision

IYO BANK Integrated Report 2022

2 Affiliated companies not accounted for by the equity method
The consolidated financial statements exclude the following affiliatedcompanies.
• Iyogin REVIC Investments Company Limited• Shikoku Alliance Capital Co., Ltd.
• Ozu Town Creation Fund
• Shikoku Brand Co., Ltd.
Iyogin REVIC Investments Company Limited, Shikoku Alliance CapitalCo., Ltd, Ozu Town Creation Fund and Shikoku Brand Co., Ltd. are
excluded from the scope of the equity method because their net income
and retained earnings are immaterial to the consolidated financial
statements.

(2) Securities①	Held-to-maturity debt securities are stated at amortized cost by thestraight-line method. Available-for-sale securities with available fairmarket values are stated at fair market value. Realized gains andlosses on the sale of such securities are computed using moving
average cost. Note that, however, equity and other securities without
fair market value are stated at cost using the moving average cost.
Unrealized gains and losses on these securities are reported, net of
applicable income taxes, as a separate component of net assets.
②	Securities included in the money held in the trust account are treatedin the same manner as the securities mentioned above.

For loans, other than to insolvent customers mentioned above,that have been restructured due to the impact of the COVID-19 or for
debtors in specific industries that are highly affected by the COVID-19,
an allowance is provided for the amount of claims, net of the expectedamount of recoveries from the disposable security and guarantees,
multiplied by a certain ratio of the remaining amount.
With regard to other receivables, the Bank principally posts
estimated losses for the next 1 year or the estimated losses for the next
3 years. The estimated losses are calculated based on actual averageloan loss ratios for certain 1 year or 3 years periods with necessary
adjustments.
Assessments and classifications are made by each business and credit
supervision department and are audited by the Credit Administration
Department, an independent department. The reserve for possible loan
losses is provided based on such procedures.
The estimated unrecoverable portions of loans to insolvent
customers who are undergoing bankruptcy or other collection
proceedings or who are in a similar financial condition are written off.
The estimated unrecoverable amounts are determined after excluding
amounts considered recoverable due to the existence of security
interests or guarantees. As of March 31, 2022 and 2021, the estimatedunrecoverable amounts were ¥20,345 million ($166,230 thousand) and¥19,347 million, respectively.
The consolidated subsidiaries write off loans and make provisions forpossible loan losses based on the actual rate of loan losses in the past.
However, unrecoverable amounts of loans to customers who have a highprobability of becoming bankrupt are separately estimated and a reservefor possible loan losses is provided based on those estimations.

Value Creation Story

77(2) The consolidated financial statements exclude the following
subsidiary.
• Iyogin-Ehime University Originated Venture Support Fund Investment
Business Limited Partnership• Iyo Evergreen Business Succession Support Fund II Investment Business
Limited Partnership
Iyogin-Ehime University Originated Venture Support Fund Investment
Business Limited Partnership and Iyo Evergreen Business Succession
Support Fund II Investment Business Limited Partnership are excluded
from the scope of consolidation because its assets, ordinary income,net income, retained earnings and accumulated other comprehensive
income are immaterial to the consolidated financial statements.
No unconsolidated subsidiary is accounted for by the equity method.
Iyogin-Ehime University Originated Venture Support Fund Investment
Business Limited Partnership and Iyo Evergreen Business Succession
Support Fund II Investment Business Limited Partnership are excluded
from the scope of the equity method because its net income andretained earnings are immaterial to the consolidated financial statements.

4 Significant accounting policies(1) Trading account securities
Trading account securities of the Bank and its consolidated subsidiaries
are stated at fair market value. Gains and losses realized on the disposal
and unrealized gains and losses from market value fluctuations of thesesecurities are recognized as gains and losses in the period of the change.
Realized gains and losses on the sale of such trading account securities
are computed using moving average cost.

Letters from theManagement(Basis of Presenting Consolidated Financial Statements)
1 Scope of consolidation(1) Principles of consolidation
The consolidated financial statements include the accounts of the Bankand the following 16 consolidated subsidiaries.
• The Iyogin Credit Guaranty Company Limited• The Iyogin Business Service Company Limited• Iyogin Capital Company Limited• Iyogin Venture Fund Corporation Limited IV• Iyogin Venture Fund Corporation Limited V• Iyogin Venture Fund Corporation Limited VI• Iyo Evergreen Sixtiary Industrialization Support Fund Investment
Business Limited Partnership• Iyo Evergreen Agriculture Support Fund Investment Business Limited
Partnership• Iyo Evergreen Agriculture Support Fund II Investment Business Limited
Partnership• Iyo Evergreen Business Succession Support Fund Investment Business
Limited Partnership• Iyogin Regional Economy Research Center, Inc.
• Iyogin DC Card Co., Ltd.
• Iyogin Challenge & Smile Co., Ltd.
• Iyogin Leasing Company Limited• Iyogin Computer Service Company Limited• Shikoku Alliance Securities Co., Ltd.

Holding Company

1-1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying consolidated financial statements have been
prepared in accordance with the provisions set forth in the Financial
Instruments and Exchange Act and its related accounting regulations
and in conformity with accounting principles generally accepted inJapan (“Japanese GAAP”), which are different in certain respects as
to application and disclosure requirements from International Financial
Reporting Standards.
The accompanying consolidated financial statements havebeen restructured and translated into English with certain expandeddisclosures from the consolidated financial statements of The Iyo Bank,
Ltd. (the “Bank”) prepared in accordance with Japanese GAAP and filedwith the appropriate Local Finance Bureau of the Ministry of Financeas required by the Financial Instruments and Exchange Act. Some
supplementary information included in the statutory Japanese language
consolidated financial statements, but not required for fair presentation,
is not presented in the accompanying consolidated financial statements.
Japanese yen amounts are rounded down to the nearest million.
Translations of the Japanese yen amounts into U.S. dollar amounts were
included solely for the convenience of readers outside Japan, using theprevailing exchange rate at March 31, 2022, which was ¥122.39 to
U.S. $1.00. The translations should not be construed as representations
that the Japanese yen amounts have been, could have been or couldin the future be converted into U.S. dollars at this or any other rate ofexchange.
Under Japanese laws and regulations, including the Companies Act(the “Act”), the entire amount paid for new shares is required to be
designated as common stock. However, a company may, by a resolutionof the Board of Directors, designate an amount not exceeding one halfof the price of the new shares as additional paid-in capital, which isincluded in capital surplus.
Under the Act and the Banking Law, in cases in which a dividend
distribution of surplus is made, the smaller of an amount equal to 20%of the dividend or the excess, if any, of 100% of common stock over
the total of additional paid-in capital and legal earnings reserve must
be set aside as additional paid-in capital or legal earnings reserve. Legalearnings reserve is included in retained earnings in the accompanying
consolidated balance sheets.
Under the Act, legal earnings reserve and additional paid-in capitalcan be used to eliminate or reduce a deficit or can be capitalized by aresolution of the stockholders’ meeting. Additional paid-in capital andlegal earnings reserve may not be distributed as dividends. Under the
Act and the Banking Law, however, by resolution of the stockholders’meeting, all additional paid-in capital and all legal earnings reserve
may be transferred to other capital surplus and retained earnings,
respectively, which are potentially available for dividends.
The maximum amount that the Bank can distribute as dividends is
calculated based on the unconsolidated financial statements of the Bankin accordance with Japanese laws and regulations.

About Iyo Bank

Notes to Consolidated Financial Statements78

(Additional Information)
The share-based payment program using the trust
The Bank has introduced a share-based payment program using a trust
for its directors (excluding audit committee members) and executive
officers with the aim of raising awareness of contribution to the Bank’s
medium to long-term performance and enhancement of its corporate
value.
(1) Overview of transactions
The trust acquires shares of the Bank using funds contributed by theBank.
In accordance with internal share delivery policies set forth by the
Board of Directors of the Bank, the Bank grants points to its directors(excluding audit committee members) and executive officers. At thetime of retirement, shares of the Bank and money will be delivered inaccordance with the points through the trust.
(2) Shares of the Bank held by the trust①	Shares of the Bank held by the trust are recorded as treasury stock in
net assets at the book value in the Bank.
②	The book value of the trust at March 31, 2022 and 2021 was ¥781
million ($6,381 thousand) and ¥191 million, respectively.
③	The number of shares of the Bank held by the Trust at March 31,
2022 and 2021 was 1,186 thousand shares and 247 thousand
shares, respectively.

(Notes to Consolidated Balance Sheet)
2-1. STOCKS AND INVESTMENTS IN UNCONSOLIDATEDSUBSIDIARIES AND AFFILIATES
Stocks in unconsolidated subsidiaries and affiliates amounted to ¥100
million ($817 thousand) and ¥100 million at March 31, 2022 and 2021,
respectively.
Investments in unconsolidated subsidiaries and affiliates amounted
to ¥264 million ($2,157 thousand) and ¥212 million at March 31, 2022
and 2021, respectively.

IYO BANK Integrated Report 2022

Corporate Data

2-2. LOANS AND BILLS DISCOUNTED
The amounts of loans disclosed under the Banking Act and the Act on
Emergency Measures for the Revitalization of Financial Functions are as
described below. These loans include corporate bonds recorded under“Securities” (limited to corporate bonds for which the payment ofprincipal and interest is wholly or partially guaranteed and which were
issued through the private placement of securities as defined in Article 2,
Paragraph 3 of the Financial Instruments and Exchange Act), loans andforeign exchange, accrued interest, suspense payments and customers’
liabilities for acceptances and guarantees recorded under “Other assets,”

Sustainability

IYO BANK Integrated Report 2022

(Accounting standards not yet adopted)
Implementation Guidance on Accounting Standard for Fair Value
Measurement (ASBJ Guidance No. 31, June 17, 2021)

3 The impact of the adoption of this accounting standard is expected to
be insignificant.

Business Strategy and Plan for
Realizing the Long-Term Vision

79(17) Significant Accounting Estimates
Reserve for loan losses①	Carrying amounts were ¥37,600 million ($307,214 thousand) and¥37,043 million at March 31,2022 and 2021, respectively.
(Note) The amount includes ¥7,310 million ($59,727 thousand) and¥8,681 million at March 31,2022 and 2021, respectively,reflecting the effects of the COVID-19.
②	Information on the nature of significant accounting estimates for
identified items(a) Method in making the accounting estimates
For the calculation of Reserve for loan losses, See (5) Reserve forpossible loan losses of “4 Significant accounting policies. “(b) Key assumptions used in making the accounting estimates
The main assumption is “Credit risk of loans in determining
debtor classification.” “Credit risk of loans in determining debtor
classification” was determined by evaluating the repayment
capacity of each debtor based on its financial condition, cash
flow, profitability, etc.
In addition, for loans that have been restructured due to theimpact of the COVID-19 or for debtors in specific industries thatare highly affected by the COVID-19, it was highly assumed tohave a deterioration in their future financial condition, cash flow,
profitability, etc. than other debtors.
(c) The effect on the next year’s financial statements
Changes for the original assumption due to the inflection in theperformance of individual debtors or the impact of the spreadof the COVID-19 could effect on reserve for loan losses of theconsolidated financial statements for the following fiscal year.

2. Application of Accounting Standard for Fair Value
Measurement, etc.
The Bank has applied the Accounting Standard for Fair Value
Measurement (ASBJ Statement No. 30, July 4, 2019; hereinafter the“Fair Value Measurement Standard”) and other standards from the
beginning of the current fiscal year. In accordance with Paragraph 8of the Fair Value Measurement Standard, the Bank has revised its fairvalue adjustment method used to determine the fair value of derivativetransactions to maximize the use of relevant observable inputs estimatedfrom derivatives and other instruments traded in the market. This
revision comes in line with the application of the Fair Value Measurement
Standard and other standards. In accordance with the transitional
treatment provided for in Paragraph 20 of the Fair Value Measurement
Standard, the cumulative effects of retrospective application of the new
accounting policy prior to the beginning of the current fiscal year werereflected in retained earnings at the beginning of the current fiscal year.
As a result, retained earnings, other assets, other liabilities, deferred
tax liabilities and stockholders’ equity per share as of April 1, 2021
decreased by ¥167 million, ¥382 million, ¥141 million, ¥73 million and¥0.52, respectively.
In the notes to its financial instruments, the Bank has decided tomake notes regarding matters related to the breakdown of fair value by
the level of the financial instruments. In accordance with the transitional
treatment stipulated in the Implementation Guidance on Disclosure of
Fair Value of Financial Instruments (ASBJ Guidance No. 19, July 4th,2019) Paragraph 7(4), however, notes to the relevant matters of theprevious fiscal year were not provided.

2 Effective date
Effective from the beginning of the fiscal year ending March 31, 2023.

Value Creation Story(14) Significant hedge accounting methods①	Hedge interest rate risk
	In order to hedge the interest rate risk associated with various
financial assets and liabilities, the Bank applies the deferred hedge
accounting method stipulated in JICPA Industry-specific Committees
Guidance No. 24, March 17, 2022, “Treatment for Accounting
and Auditing of Application of Accounting Standard for Financial
Instruments in the Banking Industry.” The effectiveness of hedging
is assessed for (i) each identified group of hedged items, such as
deposits, loans and similar instruments and (ii) the corresponding
group of hedging instruments, such as interest rate swaps, in thesame maturity bucket.

(16) Application of consolidated tax payment system
The Bank and certain of its consolidated subsidiaries have adopted aconsolidated tax payment system with the Bank as the taxable parent
company. The Bank submitted a required notification of not transitioning
to the group tax sharing system before the end of the current fiscal year.

(Changes in Accounting Policies)
1. Application of Accounting Standard for Revenue Recognition,
etc.
The Bank has applied the Accounting Standard for Revenue Recognition(ASBJ Statement No. 29, March 31, 2020) and other standards fromthe beginning of the current fiscal year. In line with the application, theBank recognizes revenue upon the transfer of control of promised goods
or services to customers in an amount that reflects the consideration towhich the Bank expects to be entitled in exchange for those goods andservices. The impact of this application on the consolidated financial
statements for the current fiscal year was immaterial.
In accordance with the transitional treatment stipulated in
Accounting Standard for Revenue Recognition Paragraph 89(3), notes torevenue recognition for the previous fiscal year are not provided.

1 Overview
The handling of the calculation and notes for the market value ofinvestment trusts and the handling of the notes for the market value ofinvestment in partnerships, etc., that record the amount equivalent tothe share in the balance sheet in net amount have been stipulated.

Letters from theManagement(13) Recognition of significant revenue and expenses①	Recognition of revenue from contracts with customers
	Revenue from contracts with customers is received primarily as
consideration for the provision of services incidental to, among
other services, deposit and lending services, exchange services andsecurities-related services. Revenue is recognized when the promised
goods or services are transferred to the customer through theprovision of services to customers in an amount that reflects theconsideration to which the Bank expects to be entitled in exchange
for those goods or services.
②	Recognition of revenue related to finance lease transactions
	Revenue and cost of sales are recognized upon the receipt of leasecharges.
③	Recognition of revenue related to operating lease transactions
	Lease charges corresponding to lease periods are recognized on thebasis of monthly lease charges to be received under lease contracts.

(15) Cash flow statements
In preparing the consolidated statements of cash flows, cash on handand deposits with the Bank of Japan are considered to be cash and cash
equivalents.

(18) Per share data
Net income per share is based on the weighted average number ofshares of common stock outstanding during the year, excluding treasury
stock. Diluted net income per share reflects the potential dilution that
could occur if stock options were exercised. Diluted net income per shareof common stock assumes the full exercise of outstanding warrants atthe time of issuance.
Cash dividends per share shown in the accompanying consolidated
statements of income represent dividends declared as applicable to therespective year.

Holding Company(12) Foreign currency translations
Foreign currency assets and liabilities and the accounts of overseas
branches of the Bank are translated into yen at the rates prevailing at
the consolidated balance sheet date. Consolidated subsidiaries’ foreign
currency assets and liabilities are translated into yen at the rate prevailingat their respective balance sheet dates.

②	Hedge against fluctuation in foreign exchange rates
	For certain assets and liabilities, the Bank and its consolidated
subsidiaries apply the exceptional treatment permitted for interest
rate swaps. The Bank applies the deferred method of hedge
accounting to hedge foreign exchange risk associated with various
foreign currency denominated monetary assets and liabilities as
stipulated in JICPA Industry-specific Committees Guidance No.
25, October 8, 2020, “Treatment for Accounting and Auditingof Accounting for Foreign Currency Transactions in the Banking
Industry.” The effectiveness of the currency swap transactions,exchange swap transactions and similar transactions that hedge theforeign exchange risk of monetary assets and liabilities denominatedin foreign currencies is assessed based on a comparison of the foreign
currency positions of the hedged monetary assets and liabilities andthe hedging instruments.
		
The Bank also applies fair value hedge accounting to portfolio
hedges of the foreign exchange risk associated with foreign currency
denominated available-for-sale securities (other than bonds) identified
as hedged items in advance as long as the amount of spot andforward foreign exchange contracts payable exceeds the acquisition
costs of the hedged securities in foreign currency.

About Iyo Bank

(11) Accounting method for retirement benefits
In calculating retirement benefit obligations, the benefit formula basis isused to attribute the projected amount of retirement benefits to periods
up to the end of the current fiscal year. Prior service cost and actuarial
differences are amortized as follows:
Prior service cost:
Prior service cost is amortized using the straight-line method over acertain number of years (10 years) within the average remaining service
years of employees at the time of recognition.
Actuarial differences:
Actuarial differences are amortized on a pro-rata basis using thestraight-line method over a certain number of years (10 years) within
the average remaining service years of employees from the fiscal year
following the respective fiscal year of recognition.
Some consolidated subsidiaries use a simplified method to calculate
net defined benefit liability and retirement benefit cost. This simplified
method assumes the Company’s retirement benefit obligations to beequivalent to the benefits that would be payable upon the voluntary
retirement of all employees at the fiscal year-end to calculate net defined
benefit liability and retirement benefit cost.

80Thousands of
U.S. dollars(Note 1-1)

Millions of yen

Bankrupt and quasi-bankrupt
loans
Doubtful loans
Substandard loans
Loans overdue threemonths or more
Restructured loans
Subtotal
Normal loans
Total

¥

1,980
63,38823,7802,076
21,704
89,1485,257,437¥5,346,586

2022

2021
¥

3,823
54,228
16,845

1,790
15,05574,897
5,187,898¥5,262,796$

16,177517,918
194,296

16,962
177,334
728,392
42,956,426$43,684,827

The above pledged assets secure the following liabilities:
Thousands of
U.S. dollars(Note 1-1)

Millions of yen

Deposits
Payables under repurchaseagreements
Payables under securities
lending transactions
Borrowed money

2022¥ 26,345

2021¥ 26,029

2022$ 215,254

74,232

199,289

606,520

139,898
736,356

91,604732,257

1,143,050
6,016,471

In addition to the above, assets pledged as collateral for transactions
such as exchange settlement transactions and others were as follows:
Thousands of
U.S. dollars(Note 1-1)

Millions of yen

Securities
Other assets

2022
¥ 406
35,0002021¥ 434
50,0002022$ 3,317285,971

Other assets above mentioned were as follows:
Thousands of
U.S. dollars(Note 1-1)

Millions of yen

Initial margins of futures
markets
Cash collateral paid forfinancial instruments
Guarantees
Security deposits

2022

2021

2022

¥ 2,612¥292$ 21,341

35,98372
295

10,23974276

294,002588
2,410

2-5. COMMITMENT LINES
Commitment line agreements related to loans are agreements which
oblige the Bank and its consolidated subsidiaries to lend funds up
to certain limits agreed to in advance. The Bank and its consolidated
subsidiaries will lend the funds upon the request of an obligor to draw
down the funds under the loan agreement as long as there is no breach of
the various terms and conditions stipulated in the relevant loan agreement.
The unused commitment balances related to these loan agreements at
March 31, 2022 and 2021 amounted to ¥1,270,918 million ($10,384,165
thousand) and ¥1,247,214 million, respectively. Of these amounts,¥1,115,276 million ($9,112,476 thousand) and ¥1,105,322 million asof March 31, 2022 and 2021, respectively, related to loans in which theterm of the agreement was one year or less or in which unconditional
cancellation of the agreement was allowed at any time.
In many cases, the term of the loan agreement runs its course without
the loan ever being drawn down. Therefore, unused loan commitments
do not necessarily affect future cash flows.
Conditions are included in certain loan agreements which allow the
Bank and its consolidated subsidiaries either to decline the request for aloan draw-down or to reduce the agreed limit when there is cause to doso, such as when there is a change in the financial condition of the obligor
or when it is necessary to protect the Bank’s or a consolidated subsidiary’s

2-6. LAND REVALUATION EXCESSIn accordance with the Revaluation Act of Land Properties, the Bank
revalued land used in the ordinary course of business as of March 31,
1998. The revaluation excess, net of deferred taxes, is shown as aseparate component of net assets. The current market value of therevalued land was lower than the revalued amount by ¥13,271 million($108,432 thousand) and ¥12,635 million at March 31, 2022 and 2021,
respectively.
2-7. TANGIBLE FIXED ASSETS
Accumulated depreciation of tangible fixed assets at March 31, 2022
and 2021 amounted to ¥55,193 million ($450,960 thousand) and¥54,267 million, respectively. The amounts that were directly offset
against acquisition costs as of March 31, 2022 and 2021 were ¥8,224
million ($67,195 thousand) and ¥8,243 million, respectively.
2-8. GUARANTEE OBLIGATIONS
Guarantee obligations for private placement bonds in securities inaccordance with the Article 2, Paragraph 3 of the Financial Instruments
and Exchange Act amounted to ¥61,743 million ($504,477 thousand)and ¥62,323 million at March 31, 2022 and 2021, respectively.
2-9. MONEY TRUSTS TO BE INDEMNIFIED
The principal amount of money trusts to be indemnified by the Bank andits consolidated subsidiaries was ¥554 million ($4,526 thousand) and ¥5
million at March 31, 2022 and 2021, respectively.

Thousands of
U.S. dollars(Note 1-1)

Millions of yen

Valuation difference on
available-for-sale securities
Incurred during the period
Reclassification adjustments
Before tax effectadjustments
Tax effect
Valuation difference on
available-for-sale securities
Net deferred gains (losses)
on derivatives under hedge
accounting
Incurred during the period
Reclassification adjustments
Before tax effectadjustments
Tax effect
Net deferred gains(losses) on derivatives
under hedge accounting
Remeasurements ofdefined benefit plans
Incurred during the period
Reclassification adjustments
Before tax effectadjustments
Tax effectRemeasurements ofdefined benefit plans
The total amount of othercomprehensive income

2022

2021

2022

¥(47,547)(1,188)¥ 85,864(3,717)$(388,487)(9,706)(48,736)
15,30082,147(25,480)(398,202)
125,010(33,435)

56,666(273,184)

1,322
875

(2,895)1,215

10,801
7,149

2,197
(670)

(1,680)512

17,950(5,474)

1,527(1,167)

12,476

3,015(2,016)

13,263(415)

24,634(16,471)

998
(304)

12,848(3,918)

8,154(2,483)

693

8,929

5,662

¥(31,213)¥ 64,428$(255,029)(Notes to Consolidated Statement of Income)3-1. GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses included salaries and allowancesin the amount of ¥21,146 million ($172,775 thousand) and ¥21,173
million at March 31, 2022 and 2021, respectively.
3-2. OTHER EXPENSES
Other expenses consisted of the following:
Millions of yen

Loans written off
Securities written off

2022
¥ 16
274

2021
¥ 20
106

Thousands of
U.S. dollars(Note 1-1)

2022
$ 130
2,238

Corporate Data

IYO BANK Integrated Report 2022

2022
$ 4,687,409
5,576,444$10,263,861

Sustainability

81

2021
¥ 710,931
661,447¥1,372,378

Business Strategy and Plan for
Realizing the Long-Term Vision

2-3. COMMERCIAL BILLS
Bills discounted are accounted for as financing transactions in accordancewith JICPA Industry-specific Committees Guidance No. 24, March
17, 2022, “Treatment for Accounting and Auditing of Application of
Accounting Standard for Financial Instruments in the Banking Industry.”
although the Bank has the right to sell or pledge them without
restrictions. The total face value of commercial bills and purchased
foreign exchange bills obtained as a result of discounting was ¥13,719
million ($112,092 thousand) and ¥13,187 million at March 31, 2022 and
2021, respectively.

2022¥ 573,692
682,501¥1,256,194

Value Creation Story(Changes in presentation method)
In line with the enforcement of the Cabinet Office Ordinance for Partial
Revision of the Ordinance for Enforcement of the Banking Act, etc.,(Cabinet Office Ordinance No. 3, January 24, 2020) as of March 31,
2022, the classification of “risk management loans” required to bedisclosed under the Banking Act is presented in accordance with theclassification of loans to be disclosed defined in the Act on Emergency
Measures for the Revitalization of Financial Functions.

Securities
Loans
Total

(Notes to Consolidated Statement of Comprehensive Income)
4-1. RECLASSIFICATION ADJUSTMENTS AND THE RELATED TAX
EFFECTS CONCERNING OTHER COMPREHENSIVE INCOME

Letters from theManagement

Bankrupt and quasi-bankrupt loans are loans to debtors who are subject
to bankruptcy, corporate reorganization or rehabilitation or other similar
proceedings and other debtors in serious financial difficulties.
Doubtful loans are loans to debtors who have not gone bankrupt
but whose financial position and operating results have so deteriorated
that it is unlikely that the principal and interest on the loans will berecovered under the contract, excluding bankrupt and quasi-bankrupt
loans.
Loans overdue three months or more are loans whose principal and/or interest payments have been past due for three months or more,excluding bankrupt and quasi-bankrupt loans and doubtful loans.
Restructured loans are loans that have been restructured to grantcertain concessions favorable to the debtors, such as reduced interest
rates or the deferral or waiver of interest and/or principal payments to
support or financially rehabilitate such debtors, excluding bankrupt andquasi-bankrupt loans, doubtful loans and loans overdue three months or
more.
Normal loans are loans that do not fall under the categories ofbankrupt and quasi-bankrupt loans, doubtful loans, loans overdue threemonths or more or restructured loans, and in which the debtors have noproblem with their financial position or operating results.
The above amounts of loans are before the deduction of reserve forloan losses.

Thousands of
U.S. dollars(Note 1-1)

Millions of yen

credit. The Bank and its consolidated subsidiaries take various measures
to protect their credit, including having the obligor pledge collateral in
the form of real estate, securities, etc., on signing the loan agreement orin accordance with the Bank and its consolidated subsidiaries’ establishedinternal procedures for confirming an obligor’s financial condition, etc., atregular intervals.

Holding Company

2022

2-4. ASSETS PLEDGED
Assets pledged as collateral were as follows:

About Iyo Bankas well as securities if the Bank lent such securities which are required
to be disclosed in the notes to its consolidated balance sheet (they are
limited to loans for use or lending under rental contract).

IYO BANK Integrated Report 2022

82

Shares issued
Common stock
Total
Treasury stock
Common stock
Total

5-3. Dividends
The following dividends were paid in the year ended March 31, 2022 and March 31, 2021, respectively.

Number of shares at the end of
the accounting period

323,775
323,775————

323,775
323,775

7,104
7,104

1,001
1,001

1,142
1,142

6,962
6,962

Number of shares at the beginningof the accounting period

—
—

—
—

323,775
323,775

7,222
7,222

1
1

119
119

7,104
7,104

The Bank

Stock acquisition rights
as stock options

Type of shares
to be issued

Total

The Bank

Stock acquisition rights
as stock options

Total

¥7.00

$0.05

Common stock¥2,535$20,712¥8.00$0.06 September 30, 2021 December 10, 2021

1. The total amount of dividends on common stock resolved at the Directors’ meeting held on May 14, 2021 includes ¥1 million ($8 thousand) in
dividends to the Bank’s shares held by the Trust for the share-based payment system.
2. The total amount of dividends on common stock resolved at the Directors’ meeting held on November 12, 2021 includes ¥1 million ($8 thousand) in
dividends to the Bank’s shares held by the Trust for the share-based payment system.
Dividends whose record date is attributable to the year ended March 31, 2022 but which became effective after March 31, 2022

Date of resolution

Directors’ meeting held on
May 13, 2022

Type ofsharesAmount of dividends
Thousands of U.S.
Millions of yen dollars (Note 1-1)

Commonstock¥2,543

Date of resolution

Directors’ meeting held on
May 26, 2020
Directors’ meeting held on
November 6, 2020

¥8.00

Record date

$0.06 March 31, 2022

Effective dateJune 9, 2022

Amount ofdividends

Cashdividends
per share

Type of shares

Millions of yen

Yen

Record date

Effective dateCommon stock¥2,217¥7.00

March 31, 2020

June 5, 2020

Common stock¥2,218¥7.00

September 30, 2020

December 10, 2020

1. The total amount of dividends on common stock resolved at the Directors’ meeting held on May 26, 2020 includes ¥1 million in dividends to the
Bank’s shares held by the Trust for the share-based payment system.
2. The total amount of dividends on common stock resolved at the Directors’ meeting held on November 6, 2020 includes ¥1 million in dividends to the
Bank’s shares held by the Trust for the share-based payment system.

Closing balance
Thousands of U.S.
Millions of yen dollars (Note 1-1)

—

208

1,699

—

208

1,699

Number of shares subject to stock acquisition rights
Closing balance
Beginningbalance
Increase
Decrease
Closing balance Millions of yen

—

273

—

273

Date of resolution

Directors’ meeting held on
May 14, 2021

Amount ofdividends

Type ofsharesMillions of yen

Commonstock¥2,218Source ofdividends
Retainedearnings

Cashdividends
per share
Yen

Record date

¥7.00 March 31, 2021

Effective dateJune 8, 2021

The total amount of dividends on common stock includes ¥1 million in dividends to the Bank’s shares held by the Trust for the share-based payment
system.

(Notes to Consolidated Statement of Cash Flows)
6-1. CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the consolidated statements of cash flows
included due from banks, except for deposits with the Bank of Japan, as
follows:
Thousands of
U.S. dollars(Note 1-1)

2022

2021

2022

¥1,514,760¥1,415,522$12,376,501(2,500)(1,958)(20,426)¥1,512,259¥1,413,563$12,356,066(Notes to Financial Instruments)
1 Financial instruments(1) Policy on financial instruments
The Bank and its consolidated subsidiaries engage mainly in thefinancial services business and provide lending services and leasing
services. Accordingly, the Bank holds financial assets and liabilities
that are subject to interest rate fluctuations and undertakes asset andliability management (ALM) in order to curb any unfavorable impact
from interest rate fluctuations. The Bank also engages in derivativetransactions as part of its ALM.
(2) Descriptions and risks of financial instruments
The financial assets of the Bank and its consolidated subsidiaries consist
mainly of loans to customers, which are subject to default risk. Also, theBank holds securities that are mainly stocks, bonds and mutual funds for

IYO BANK Integrated Report 2022

Corporate Data

Cash and due from banks
in the balance sheets
Due from banks, except
for deposits with the Bankof JapanCash and cash equivalentsin the statements ofcash flows

IYO BANK Integrated Report 2022

Cash dividends per share
U.S. dollars
Yen(Note 1-1)

2021

Millions of yen

83$20,777

Source ofdividends
Retainedearnings

Sustainability

Division

Type of shares
to be issued$18,122

Dividends whose record date is attributable to the year ended March 31, 2021 but which became effective after March 31, 2021

2021
Details of stockacquisition rights

June 8, 2021

¥2,218Business Strategy and Plan for
Realizing the Long-Term Vision

5-2. Stock acquisition rights and own stock acquisition rights
Stock acquisition rights and own stock acquisition rights in the year ended March 31, 2022 and 2021 were as follows:

Details of stockacquisition rights

March 31, 2021

Common stock

Number of shares at the end of
the accounting period

1 The increase in number of shares of treasury stock was from the purchase of fractional shares (1 thousand shares)
2 The decrease in number of shares of treasury stock was due to the delivered shares of the Bank through the Trust (36 thousand shares) and theexercise of stock acquisition rights (82 thousand shares).
3 The number of shares of treasury stock at the beginning of the current fiscal year and at the end of the current fiscal year includes the Bank’s shares
held by the Trust for the share-based payment system (284 thousand shares and 247 thousand shares, respectively).

Division

Effective date

The total amount of dividends on common stock includes ¥9 million ($73 thousand) in dividends to the Bank’s shares held by the Trust for the sharebased payment system.

323,775
323,775

2022
Number of shares subject to stock acquisition rights
Beginningbalance
Increase
Decrease
Closing balance

Record date

Value Creation Story

Shares issued
Common stock
Total
Treasury stock
Common stock
Total(Thousands)
2021
Increase in number of shares
Decrease in number of shares
during the accounting period
during the accounting period

Type of shares

Cash dividends per share
U.S. dollars
Yen(Note 1-1)

Letters from theManagement

1 The increase in number of shares of treasury stock was due to the purchase of treasury stock by the Trust for the share-based payment system (1,000
thousand shares) and the purchase of fractional shares (1 thousand shares).
2 The decrease in number of shares of treasury stock was due to the disposal of treasury stock in line with a third-party allotment of newly issued sharesto the Trust for the share-based payment system (1,000 thousand shares), the delivered shares of the Bank through the Trust (61 thousand shares)
and the exercise of stock acquisition rights (81 thousand shares).
3 The number of shares of treasury stock at the beginning of the current fiscal year and at the end of the current fiscal year includes the Bank’s shares
held by the Trust for the share-based payment system (247 thousand shares and 1,186 thousand shares, respectively).

Date of resolution

Directors’ meeting held on
May 14, 2021
Directors’ meeting held on
November 12, 2021

2022
Amount of dividends
Thousands of U.S.
Millions of yen dollars (Note 1-1)

Holding Company

Number of shares at the beginningof the accounting period(Thousands)
2022
Increase in number of shares
Decrease in number of shares
during the accounting period
during the accounting period

About Iyo Bank

(Notes to Consolidated Statement of Changes in Net Assets)
5-1. Type and number of shares issued and treasury stock
Type and number of shares issued and treasury stock in the year ended March 31, 2022 and 2021 were as follows:

84

¥

6,211

Difference

¥

—

$

50,747 $

50,747$—

4,289
47,1194,289
47,119———(467,407)$(467,407)$(3,832)(0)(2,647)$(6,479)

525
5,767

525
5,767

—
—

1,660,146
5,046,997(35,923)
5,011,073¥6,683,724¥6,021,850
604,275
750,302¥7,376,428

1,660,146
4,953,866—

4,953,866¥6,626,517¥6,021,381
604,275
749,978¥7,375,634(57,206)¥(57,206)¥ (469)(0)(324)¥ (793)

13,564,392 13,564,392
41,237,004 40,476,068(293,512)
40,943,483 40,476,068$54,610,049 $54,142,634$49,202,140 $49,198,308
4,937,290
4,937,290
6,130,419
6,127,771$60,269,858 $60,263,371¥(7,533)¥(7,533)¥—$(61,549) $(61,549)$—(18,844)¥(26,378) ¥(18,844)(26,378)

¥

—
—

$

(153,966)(215,524) $(153,966)(215,524)—$—(*1) General and specific reserves for loan losses relevant to loans and bills discounted are excluded.
(*2) D erivative transactions recorded in other assets and liabilities are presented as a lump sum. Net claims and debts that arise from derivative transactions arepresented on a net basis.
(*3) Derivative transactions to which hedge accounting is applied are interest rate swaps, etc., designated as hedging instruments to offset market fluctuationsof loans and bills discounted in hedged items. The Bank uses mainly deferred hedges. The Bank applies the Practical Solution on the Treatment of Hedge
Accounting for Financial Instruments that Reference LIBOR (PITF No. 40, March 17, 2022) to these hedging relationships.
(*4) Immaterial items are omitted.

(1) Monetary claims purchased(2) Trading account securities
Trading securities(3) Money held in trust(4) Securities
Available-for-sale securities(5) Loans and bills discounted
Reserve for loan losses (*1)

¥6,834¥6,834

649
6,427

649
6,427

—
—

1,878,329
4,975,984(35,526)
4,940,458¥6,832,699¥5,963,676
531,969
743,645¥7,239,291

1,878,329
4,896,054—

4,896,054¥6,788,295¥5,963,765
531,969
743,686¥7,239,421(44,403)¥(44,403)
¥
89
—
40
¥
130

¥2,329¥2,329¥—(7,166)¥(4,837)(7,166)¥(4,837)¥——

Difference¥—

Sustainability

Total Assets(1) Deposits(2) Negotiable certificates of deposit(3) Borrowed money
Total Liabilities
Derivative Transactions (*2)
Derivative transactions to which hedge accounting is
not applied
Derivative transactions to which hedge accounting isappliedTotal Derivative Transactions

Book value

Millions of yen
2021
Fair value

Business Strategy and Plan for
Realizing the Long-Term Vision(*1) G eneral and specific reserves for loan losses relevant to loans and bills discounted are excluded.
(*2) D erivative transactions recorded in other assets and liabilities are presented as a lump sum. Net claims and debts that arise from derivative transactions arepresented on a net basis.
(*3) Derivative transactions to which hedge accounting is applied are interest rate swaps, etc., designated as hedging instruments to offset market fluctuationsof loans and bills discounted in hedged items. The Bank uses mainly deferred hedges. The Bank applies the Practical Solution on the Treatment of Hedge
Accounting for Financial Instruments that Reference LIBOR (PITF No. 40, September 29, 2020) to these hedging relationships.
(*4) Immaterial items are omitted.

IYO BANK Integrated Report 2022

Corporate Data

IYO BANK Integrated Report 2022

Total Assets(1) Deposits(2) Negotiable certificates of deposit(3) Borrowed money
Total Liabilities
Derivative Transactions (*2)
Derivative transactions to which hedge accounting is
not applied
Derivative transactions to which hedge accounting isapplied (*3)
Total Derivative Transactions¥6,211

Thousands of U.S. dollars (Note 1-1)
2022
Book value
Fair value
Difference

Value Creation Story

85(4) Supplementary explanation of matters related to fair values offinancial instruments and others
As the fair values of financial instruments are estimated on certain
assumptions, the values may differ when other assumptions are applied.

Book value(1) Monetary claims purchased(2) Trading account securities
Trading securities(3) Money held in trust(4) Securities
Available-for-sale securities(5) Loans and bills discounted
Reserve for loan losses (*1)

Millions of yen
2022
Fair value

Letters from theManagement② Market risk management
In order to properly manage market risk and maintain the Bank’ssoundness and profitability, the Bank has established a comprehensive
risk management structure set forth by the ALM Committee. The ALM
Committee uses various measures such as the gap method, market
value analysis, periodic income/loss simulation and the VaR method tocontrol risk. The ALM Committee also coordinates risk management
plans and hedging strategies by analyzing the profitability structure andforecasting the market and the economic environment. RMD, set up③ Liquidity risk management
The liquidity risk management of the Bank is conducted through assetliability management (ALM) and the duration of funds procured withconsideration for the market environment.

2 Fair values of financial instruments
The table below summarizes book values, fair values and any differences between them. Equity and other securities without fair market value andinvestments in partnerships, etc., were excluded from the table (see Note i). Notes are omitted for cash and due from banks, call money and bills
sold, payables under repurchase agreements and payables under securities lending transactions because their fair market values approximate thecorresponding book values due to their short-term settlements.

Holding Company(3) Risk management system for financial products① Credit risk management
The Bank prescribes its credit risk management policy in its “RiskManagement Plan,” which is issued by the Board of Directors biannually.
In particular, the Bank diversifies credit risk by ensuring that credit
granted is not overconcentrated in certain customers, groups orindustries. The Bank periodically analyzes and evaluates the credit
conditions classified by internal ratings, business area and industry.
The Bank strives to optimize its credit portfolio by promoting effective
credit risk management. Feedback regarding credit risk management isreported to the Board of Directors on a regular basis.
The Bank manages each customer’ credit in compliance with its“Internal Rating System,” part of the Bank’s credit risk management.
The Risk Management Division (RMD), which is completely independent
from other banking business divisions, is responsible for planning andadministrating the internal rating system and conducting, coordinating
and monitoring the internal ratings. The Loan Group is responsible forsupervising the individual credit granted and examining each customers’
finances, purpose for the loan and ability to repay. The group is
independent from the business promotion group and is divided into
three divisions: the Credit Division - responsible for planning creditrelated services, assessing customers’ loans, offering management
consultations on corporate rehabilitation, managing problem loans,assessing collaterals and providing other services; the Ship Finance
Division – responsible for assessing loans, including those in the
shipping and shipbuilding industries; and the Customer Loan Center responsible for assessing personal loans. The assets are initially assessedby each branch and then by the head office, followed by a validation by
RMD, which is also responsible for the formulation of the assessment
standards.
The credit granted by the consolidated subsidiaries is managed foreach customer along with the credit granted by the Bank. RMD also
manages the credit risk of issuers and counterparty risk in derivativetransactions by monitoring and periodically evaluating credit informationand market prices.

as an independent supervisor, evaluates the appropriateness of market
transactions dealt with by other divisions.
The Bank sets limits on the quantity of risk that may be undertaken
in its “Risk Management Plan,” which is developed by the Board of
Directors biannually. RMD monitors compliance with the plan andreports to the Board of Directors on a monthly basis.
(Quantitative information on market risk)
The Bank measures market risk based on the VaR method. The variancecovariance model (holding period: 120 business days; confidence
interval: 99.9%; and historical observation period: 1,200 business days)
is applied in the measurement of VaR.
The major market risks for the Bank are equity risk and interest raterisk. Financial instruments affected by interest rate risk are loans andbills discounted, available-for-sale securities, deposits, borrowed money,
interest swap transactions and interest rate cap derivative transactions.
At March 31, 2022 and 2021, the quantity of market risk (expected loss),which included equity risk and interest rate risk, amounted to ¥174.0
billion ($1,421 million) and ¥199.8 billion, respectively.
The Bank confirms the validity of the measurement model by
biannually performing back-testing which compares VaR with actualfluctuations in profit and loss during the observation period. However,
VaR, the quantity of market risk which is statistically measured withhistorical market fluctuations, may not reflect drastic changes in themarket.

About Iyo Bank

investment, management or trading purposes. They are subject to theissuer’s credit risk, interest rate risk and market price risk.
The foreign currency denominated financial assets and liabilities
are subject to foreign currency risk. The Bank uses currency swaps tomanage the risk.
The Bank’s derivative transactions include interest rate swaps. The
Bank applies hedge accounting to the interest on loans to hedge interest
rate risks regarding the interest rate swaps as hedge instruments. The
effectiveness is ensured by maintaining a balance of hedge instrumentsthat does not exceed the balance of the hedged items, which aregrouped by incidence and remaining period.
Other transactions not qualifying for hedge accounting expose the
Bank to foreign exchange and interest rate risks.

86

Millions of yen

2021¥13,649
5,788

Within 1 year

2022
$111,814
63,665(*1) E quity and other securities without fair market value include unlisted stocks, which are not included in the disclosure of fair value in accordance with Paragraph
5 of the Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19, March 31, 2020).
(*2) A n impairment loss of ¥66 million was recorded for unlisted stocks during the current fiscal year.
(*3) Investments in partnerships, etc., include mainly silent partnerships and investment partnerships. These items are not included in the disclosure of fair value inaccordance with Paragraph 27 of the Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, July 4, 2019).

Note ii. Expected redemption of monetary claims and securities with maturities¥——279,954—279,954
9,500
32,031
43,386
906,863¥1,186,818¥——251,122—251,12257,50062,86915,106
726,860¥977,982

Within 1 year

1-3 years

Millions of yen
2021
3-5 years
5-7 years¥1,365,176
3,911
147,030—
147,030
91,10030,40820,3101,152,470¥2,668,588¥——104,177—
104,177—
30,816
41,937895,548¥999,725¥——
190,471—
190,471
63,50043,231
23,722745,139¥935,610¥——
189,328—
189,328
10,00062,875
2,277
539,493¥728,822¥——
202,469—
202,469
3,500
63,955962
530,836¥733,306

7-10 years¥——
242,870—
242,870—
77,556
1,366
556,469¥799,339

7-10 years¥——
315,186—
315,186
10,00076,9482,459
539,218¥854,404$11,947,675
33,123393,765—
393,765—
125,786
181,795
9,577,212$21,951,785$——
2,287,392—
2,287,392
77,620261,712354,489
7,409,616$9,697,017$——
2,051,817—
2,051,817
469,809513,677
123,425
5,938,883$7,990,701$——
1,546,923—
1,546,923
81,706
513,726
18,604
4,407,982$5,954,914$——
1,984,394—
1,984,394—
633,679
11,161
4,546,686$6,531,080

¥—
2,157
123,518—
123,518
16,00041,206
10,267
1,052,488¥1,178,165

Over 10 years

¥—
2,911
341,650—
341,650
16,00040,335
12,197
1,024,919¥1,369,481

Over 10 years$—
17,623
1,009,216—
1,009,216
130,729
336,677
83,8878,599,460$9,626,317

Deposits (*)
Negotiable certificates of deposit
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Total¥347,87810———
185,028¥532,917¥30,535————
22,487¥53,023¥1,213————891¥2,105

Within 1 year

1-3 years

Millions of yen
2021
3-5 years
5-7 years¥5,598,460
531,969
61,624
199,289
91,604
435,587¥6,918,535¥328,346————
105,313¥433,660¥ 34,025————
202,138¥236,163¥1,047————238¥1,286

7-10 years¥1,922————773¥2,695

7-10 years¥1,795————236¥2,032

Within 1 year

Thousands of U.S. dollars (Note 1-1)2022
1-3 years
3-5 years
5-7 years
7-10 years$46,084,639
4,937,208
59,996
606,520
1,143,050
4,411,185$57,242,626$2,842,372
81———
1,511,790$4,354,252$249,489————
183,732$433,229$9,910
—
—
—
—
7,280
$17,199$15,703
—
—
—
—
6,315
$22,019

Over 10 years

¥—
—
—
—
—
1,235
¥1,235

Over 10 years

¥—
—
—
—
—
130
¥130

Over 10 years

$—
—
—
—
—
10,090$10,090(*) Demand deposits are included in “Within 1 year.”

3. Fair value information by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to the observability and materiality of inputs used to measure
the fair value.
Level 1 fair value: Fair value measured using observable inputs, i.e., quoted prices in active markets for assets or liabilities that are the subject of themeasurement.
Level 2 fair value: Fair value measured using observable inputs other than Level 1 inputs.
Level 3 fair value: Fair value measured using unobservable inputs.
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement is categorized in its entirety at the level of thelowest level input that is significant to the entire measurement.

Sustainability

Within 1 year

Thousands of U.S. dollars (Note 1-1)2022
1-3 years
3-5 years
5-7 years
7-10 years

Over 10 years

1-3 years

Business Strategy and Plan for
Realizing the Long-Term Vision

Due from banks
Monetary claims purchased
Securities
Held-to-maturity debt securities
Securities with maturities
Japanese government bonds
Municipal bonds
Corporate bonds
Loans and bills discounted (*)
Total

1-3 years¥1,462,276
4,054
48,193—48,193—
15,39522,2501,172,155¥2,686,679

Deposits (*)
Negotiable certificates of deposit
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Total¥5,640,299
604,265
7,343
74,232
139,898
539,885¥7,005,925

Value Creation Story

Due from banks
Monetary claims purchased
Securities
Held-to-maturity debt securities
Securities with maturities
Japanese government bonds
Municipal bonds
Corporate bonds
Loans and bills discounted (*)
Total

Within 1 year

Millions of yen
2022
3-5 years
5-7 years

Deposits (*)
Negotiable certificates of deposit
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Total

Millions of yen
2022
3-5 years
5-7 years

Letters from theManagement

Due from banks
Monetary claims purchased
Securities
Held-to-maturity debt securities
Securities with maturities
Japanese government bonds
Municipal bonds
Corporate bonds
Loans and bills discounted (*)
Total

Note iii. Amounts to be repaid for borrowed money and other interest bearing liabilities

Holding Company

Equity and other securities without fair market value (*1) (*2)
Investments in partnerships, etc. (*3)

2022
¥13,685
7,792

Thousands of
U.S. dollars(Note 1-1)

About Iyo Bank

Note i. Consolidated balance sheet amounts of equity and other securities without fair market value and investments in partnerships, etc., are described
below and are not included in “Available-for-sale securities” of the fair market value information on financial instruments.

(*) Loans and bills discounted on which full repayment is not expected from debtors such as bankrupt obligors, substantially bankrupt obligors and intensively
controlled obligors amounted to ¥65,199 million ($532,715 thousand) and ¥57,924 million at March 31, 2022 and 2021, respectively, and loans and bills with nomaturities amounted to ¥27,466 million ($224,413 thousand) and ¥29,928 million at March 31, 2022 and 2021, respectively.

Corporate Data

87

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IYO BANK Integrated Report 2022

88

TotalLevel 1¥—¥—¥2,157¥2,157

$—

$—

525
—

—
—

—
1,507

525
1,507

4,289
—

—
—

18,130——331,294456,549¥806,499

81,845
294,005
50,295449
150,038¥576,635——
62,393—
11,273¥77,332

99,975
294,005
112,689
331,744617,861¥1,460,467

148,133——
2,706,871
3,730,280$6,589,582

668,722
2,402,197
410,940
3,668
1,225,900$4,711,455¥5,115(31,492)——¥(26,377)

¥—
—
—
(0)
¥(0)

¥5,115(31,492)—(0)¥(26,378)

$—
—
—
—
$—

$41,792(257,308)——$(215,515)

Total$17,623 $17,623—
12,313

4,289
12,313—816,855—
2,402,197
509,788920,736—2,710,548
92,107
5,048,296$631,849 $11,932,894$— $41,792—(257,308)
—
—
(0)
(0)
$(0) $(215,524)(2) Financial instruments other than those measured at fair value
As of March 31, 2022

Level 1

Total

Level 1Thousands of U.S. dollars (Note 1-1)
Fair value
Level 2
Level 3

Total

¥—
—
—
¥—
¥—

¥—
—
—
¥—
¥6,021,381¥4,0544,260
4,953,866¥4,962,181¥—¥4,0544,260
4,953,866¥4,962,181¥—$— $— $33,123 $33,123——
34,80634,806—— 40,476,068 40,476,068$— $— $40,544,006 $40,544,006$— $49,198,308 $— $———¥—

604,275
749,978¥7,375,634

—
—
¥—

—
—
¥—

—
4,937,290———
6,127,771——$— $60,263,371 $— $—

Note 1: A description of the valuation techniques and inputs used in the fair value measurements

Money held in trust
Of money held in trust, the components of trust property are measured
based on prices quoted by correspondent financial institutions and areclassified as Level 3 fair value according to component levels.

89

IYO BANK Integrated Report 2022

Significant
unobservable
input

Valuation technique

Weighted
average of
inputsRange ofinputsSecurities: Corporate bonds Discounted present value method Discount rate 0.1%-16.8%

0.50%(2) A reconciliation from the beginning balances to the ending balances and gains or losses on valuation of financial assets and financial liabilities held at
the end of the reporting period
included in profit or loss for the period (as of March 31, 2022)
Millions of yen
Profit or loss or othercomprehensive income forthe period

Beginningbalance

Monetary claims purchased
Money held in trust
Securities:
Available-for-sale securities
Corporate bonds
OthersTotal Derivative Transactions
Credit derivatives

Purchases,
sales,
issuances,
RecognizedandRecognizedin otherin profit or comprehensive settlements(net)loss (*1)
income (*2)

Transfer
into
Level 3

Transferout ofLevel 3

Gains or losses
on valuation offinancial assets
and financial
liabilities heldat the end of
the reporting
periodincluded in
profit or loss
for the period(*1)

Endingbalance¥ 2,922
1,257

¥ —
(85)

¥ (11)
252¥ (753)
83

¥—
—

¥—
—

¥ 2,157
1,507

¥ —
(85)

63,137
12,583

1
—

4
(9)

(749)
(1,300)————62,393
11,273

—
—

(2)

1

—

—

—

—

(0)

(0)

IYO BANK Integrated Report 2022

Corporate Data

Trading account securities
Trading account securities are classified as Level 1 fair value because they aregovernment bonds and use unadjusted market prices in active markets.

Securities
Securities using unadjusted market prices in active markets are classified
as Level 1 fair value. These Level 1 securities include mainly listed stocks
and government bonds.
Securities that use announced market prices but are not traded in active
markets are classified as Level 2 fair value. These Level 2 securities
include municipal bonds and corporate bonds.
Of corporate bonds, private placement bonds with guarantee obligations
are measured as the present value discounted at a rate that reflects theproper market rate corresponding to the remaining period and credit risk
based on the internal rating. As these discount rates are unobservable
inputs, such private placement bonds are classified as Level 3 fair value.
Securities that do not fall under these classifications are measured basedon prices quoted by correspondent financial institutions and are classified
as Level 3 fair value based on the inputs used for the quoted prices.

Classification

Sustainability

AssetsMonetary claims purchased
Of monetary claims purchased, trustee beneficial rights are measured
based on prices quoted by correspondent financial institutions and areclassified as Level 3 fair value based on the inputs used for the quoted
prices. Monetary claims purchased other than trustee beneficial rights
are classified as Level 3 fair value. This is because their book value isconsidered as the fair value, taking into consideration that such items fallunder short contractual terms and their fair value approximates the bookvalue.

Note 2: Information on Level 3 fair value of the financial instruments that are recognized at fair value in the consolidated balance sheet(1) Quantitative information on significant unobservable inputs (as of March 31, 2022)

Business Strategy and Plan for
Realizing the Long-Term Vision

Classification
Monetary claims purchased
Money held in trust
Loans:
Total Assets
Deposits:
Negotiable certificates ofdepositBorrowed money:
Total Derivative Transactions

Millions of yen
Fair value
Level 2
Level 3Liabilities
Deposits and negotiable certificates of deposit
The fair value of demand deposits is considered the payable amount asof the consolidated balance sheet date (the book value). In addition, thefair value of fixed-term deposits and negotiable certificates of deposit
is calculated as the present value, discounting the future cash flow at a

Derivative transactions
Derivative transactions using unadjusted market prices in active markets
are classified as Level 1 fair value and includes bond futures.However, as
most derivative transactions are traded over the counter and their market
prices are not announced, their fair value is calculated using valuation
techniques, including the present value model and the option pricing
model. These valuation techniques input mainly interest rates, foreignexchange rates, volatilities and others. In addition, the valuation amountis adjusted based on the credit risk of counterparties and the Bank.
If unobservable inputs are not used or their impact is insignificant, thosederivative items are classified as Level 2 fair value and include interest
rate swaps and forward exchange contracts.
If significant unobservable inputs are used, the items are classified as
Level 3 fair value.

Value Creation Story(*) The above table does not include investment trusts that applied the transitional treatment stipulated in Paragraph 26 of the Implementation Guidance on
Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, July 4, 2019). The amount of such investment trusts in the consolidated balance sheet
was ¥203,869 million ($1,665,732 thousand).

Borrowed money
The fair value of borrowed money with a floating rate is consideredequal to the book value because the fair value of these items
approximates the book value, taking into account that the rate reflects
the market rate in a short period and that the creditworthiness of the
Bank and its consolidated subsidiaries and subsidiary corporations, etc.,
has not changed significantly since the inception date. The fair valueof borrowed money with a fixed rate is calculated as the present value,
discounting future cash flows for its principal and interest at a rate thatreflects the proper market rate corresponding to the remaining period
and credit risk of the Bank. These items are classified as Level 2 fairvalue.

Letters from theManagement

Level 1

¥—
—
—
—
¥—

Thousands of U.S. dollars (Note 1-1)
Fair value
Level 2
Level 3rate that reflects the proper market rate corresponding to the remaining
period and credit risk of the Bank. The fair value of deposits with shortcontractual terms (within one year) is considered equal to the bookvalue since the fair value approximates the book value. These items areclassified as Level 2 fair value.

Holding Company

Classification
Monetary claims purchased
Trading account securities
Trading securities
Japanese government
bonds
Money held in trust
Securities:
Available-for-sale securities
Japanese government
bonds
Municipal bonds
Corporate bonds
Equity securities
OthersTotal Assets
Derivative transactions
Interest rate-related
derivatives
Currency-related derivatives
Bond-related derivatives
Credit derivatives
Total Derivative Transactions

Millions of yen
Fair value
Level 2
Level 3Loans and bills discounted
Loans and bills discounted with floating rates are classified as Level
3 fair value. This is because their book value is considered as the fairvalue, taking into account that the rates reflect the market rate ina short period and that the fair value approximates the book value
unless the borrower’s creditworthiness changes significantly after the
inception date. Loans and bills discounted with fixed rates are classified
as Level 3 fair value. This is because their fair value is measured as thepresent value, discounting future cash flows arising from principal andinterest at a rate that reflects the proper market rate corresponding to
the remaining period and credit risk based on the internal rating andbecause these discount rates are unobservable inputs.
Loans and bills with short-term contractual terms (within one year) areclassified as Level 3 fair value because their fair value approximates thebook value and such book value is considered as the fair value.
In addition, loans to bankrupt borrowers, substantially bankrupt
borrowers and potentially bankrupt borrowers are classified as Level 3
fair value. Their fair value approximates the consolidated balance sheet
amount as of the consolidated balance sheet date less the reserve forloan losses since the loan losses are calculated based on the estimatedcollectable amount from collateral and/or guarantees.
Of loans and bills discounted, loans and bills discounted with no maturity
due to conditions such as limiting the loans to the value of pledged
assets are classified as Level 3 fair value.
Their fair value is deemed as the book value since the fair value is
expected to approximate the book value considering the estimated loan
period, interest rate and other conditions.

About Iyo Bank

(1) Financial instruments measured at fair value
As of March 31, 2022

90

Total Derivative Transactions
Credit derivatives$ 23,874
10,270$Transferout ofLevel 3Endingbalance—(694)$ (89)
2,058$ (6,152)
678

$—
—

$—
—

$ 17,623
12,313$—(694)

515,867
102,810

8
—

32
(73)

(6,119)(10,621)————509,788
92,107

—
—

(16)

8

—

—

—

—

(0)

(0)

(*1) P rofit or loss is included mainly in Other operating income, Other operating expenses, Other income and Other expenses of Consolidated Statement of Income.
 ther comprehensive income is included in Valuation difference on available-for-sale securities in Other comprehensive income of Consolidated Statement of(*2) O
Comprehensive Income.

(4) Sensitivity of the fair value measurement to changes in significant unobservable inputs
Of corporate bonds, the fair value of private placement bonds with guarantee obligations is calculated by adjustment rates against standard market interest
rates such as LIBOR and swap rates. These adjustment rates comprise risk premiums required by market participants against uncertainties on cash flows
arising mainly from credit risks. A significant increase (decrease) in discount rates generally leads to a significant decrease (rise) of fair value.

Thousands of
U.S. dollars(Note 1-1)

Millions of yen

2022
Unrealized gains (losses) included in profit
and loss for the fiscal year

¥(16)

2022
$(155)¥ 314,181
301,341¥

69,125
292,616¥245,055
8,725¥ 363,242
431,109¥70,440421,561¥292,801
9,547$ 2,567,047 $ 564,792
2,462,137
2,390,848$2,002,246
71,28899,975
137,594
63,771
561,494¥1,177,017

95,587
134,524
62,504
513,993¥ 875,735

4,388
3,070
1,266
47,501¥301,282

119,985
226,478
84,645632,551¥1,426,903

116,895
221,733
82,933
584,427¥1,076,429

3,090
4,745
1,712
48,123¥350,473

816,855
781,003
1,124,225
1,099,142
521,047
510,695
4,587,744
4,199,632$ 9,616,937 $ 7,155,282

35,85225,083
10,343
388,111$2,461,655¥

23,577
206,860¥ (6,013)(1,531)¥¥

21,489172,815¥ (5,141) $ 143,500 $ 192,638(1,526)
1,677,653
1,690,170$—
157,517
49,343272,817503,255¥1,378,990—(1,106)(425)(10,424)(17,969)¥283,312

68,552
63,852
38,885
266,711454,349¥1,881,252

69,37564,09639,344
278,091
472,396¥1,548,825

(823)
—
—
(243)
1,277,972
1,287,008(459)
399,681403,162(11,379)
2,143,908
2,229,079(18,046)
3,965,070
4,111,896¥332,426 $13,582,016 $11,267,178—(9,036)(3,472)(85,170)(146,817)$2,314,829

LossesMillions of yen
2021
Amount sold
Gains

Securities with unrealized losses
Equity securities¥ 17,563
Bonds
205,328
Japanese government
bonds—
Municipal bonds
156,411
Corporate bonds
48,917
Other262,393
Total
485,285
Total¥1,662,303

16,347
171,289(49,129)(12,509)

4 Available-for-sale securities sold:Millions of yen
2022
Amount sold
Gains

Equity securities
Bonds
Corporate bonds
Other
Total

¥

8,483
523
523
929,886¥938,893¥ 4,7831
1
13,685¥18,470¥818——
16,170¥16,988

5 Securities impaired
Certain securities other than trading securities (excluding equity
and other securities without fair market value and investments inpartnerships, etc.) are written down to the fair value, and the difference
between the acquisition cost and the fair value is treated as loss for the
fiscal year (impairment (devaluation)) if the fair value has significantly
deteriorated from the acquisition cost, unless it is deemed that there isa possibility of a recovery in the fair value. The amount of impairment(devaluation) was ¥246 million ($2,009 thousand), including ¥208
million ($1,699 thousand) of equity securities and ¥38 million ($310
thousand) of bonds at March 31, 2022, and ¥16 million, including ¥16
million of equity securities at March 31, 2021. A security is deemed tohave “significantly deteriorated” if the fair value has decreased to 50%
or less of the acquisition cost. If the fair value exceeds 50% but is 70%
or less of the acquisition cost, the security may be deemed “significantly
deteriorated” considering the change in the quoted market price duringa certain period in the past, the related business performance and otherfactors.

¥

4,704
589
589
488,156¥493,449¥ 2,7632
2
8,259¥11,025

Losses

¥ 223
—
—
7,116
¥7,340Thousands of U.S. dollars (Note 1-1)
2022
Amount sold
Gains
Losses$69,311
4,273
4,273
7,597,728$7,671,321$ 39,0798
8
111,814$150,911

$

6,683
—
—
132,118$138,802(Notes to Money Held in Trust)
The following table summarizes the book values (fair values) andamounts of net unrealized gains and losses for money held in trust
included in profit and loss for the fiscal year.
Thousands of
U.S. dollars(Note 1-1)

Millions of yen

2022
Money held in trust forinvestment
Book value (fair value)
Amount of net
unrealized gain (loss)
included in profit andloss for the fiscal year
Other money held in trustBook value (fair value)
Acquisition cost
Difference
Unrealized gains
Unrealized losses

2022

2021

¥

—

¥

—

$

—

¥

—

¥

—

$

—

5,767
5,436
330
330
—

6,427
6,349
78
78
—

47,11944,415
2,696
2,696
—

Sustainability

2 Held-to-maturity debt securities:
None

¥(19)

2021

Thousands of U.S. dollars (Note 1—1)
2022
Acquisition
Book value
cost
Difference

Business Strategy and Plan for
Realizing the Long-Term Vision(Notes to Securities)*1 In addition to “Securities” on the consolidated balance sheets, this includes “Trading account securities” and trust beneficiary interests in “Monetaryclaims purchased.”
1 Trading securities:

Millions of yen
2021
Acquisition
Book value
cost
Difference

Value Creation Story(3) A description of valuation processes used for fair value measurements
The Risk Management Division of the Group has established policies and procedures for measuring fair value and procedures for using the fair value
valuation model. The Bank verifies whether the fair value obtained is measured using valid valuation techniques and inputs and whether they are classified
into an appropriate level of the fair value hierarchy. When using quoted prices obtained from third parties as fair values, the Bank verifies whether the prices
are valid using appropriate methods, such as by confirming the valuation techniques and inputs used and comparing them with the fair value estimated by
the Bank.

Securities with unrealized gains
Equity securities
Bonds
Japanese government
bonds
Municipal bonds
Corporate bonds
Other
Total

Millions of yen
2022
Acquisition
Book value
cost
Difference

Letters from theManagement

Monetary claims purchased
Money held in trust
Securities:
Available-for-sale securities
Corporate bonds
OthersTransfer
into
Level 3

Gains or losses
on valuation offinancial assets
and financial
liabilities heldat the end of
the reporting
periodincluded in
profit or loss
for the period(*1)

Holding Company

Beginningbalance

Purchases,
sales,
issuances,
RecognizedandRecognizedin otherin profit or comprehensive settlements(net)loss (*1)
income (*2)

About Iyo Bank

3 Available-for-sale securities:

Thousands of U.S. dollars (Note 1-1)
Profit or loss or othercomprehensive income forthe period

Corporate Data

91

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92

Contract
amount2022

2021

Millions of yen
2022
Portionmaturing over
one year
Fair value

Thousands of U.S. dollars (Note 1-1)
2022
PortionRecognizedContract
maturing overgains
amountone year
Fair value(losses)

Recognized
gains(losses)Over-the-counter transactions:¥283,437¥ 332,426$2,315,850

330(86,927)78(102,228)

2,696(710,245)

196,841(6,409)230,276(7,938)

1,608,309(52,365)¥190,431¥ 222,338$1,555,935

Credit default swaps
Sell
Buy
Total

¥1,000
—
—

¥—
—
—

¥ (0)
—
¥ (0)

¥ (0)
—
¥ (0)

$8,170
—
—

$—
—
—

$(0)
—
$(0)

$(0)
—
$(0)

Holding Company

The above transactions are measured at fair value, and recognized gains (losses) are charged to the consolidated statements of income.
(4) Others(Note) E xchange translation differences, etc., related to foreign currency
denominated equity and other securities without fair market value andinvestments in partnerships, etc., are included above in Available-forsale securities of Valuation gains.

Millions of yen
2022
Portionmaturing over
one year
Fair value

Contract
amountThousands of U.S. dollars (Note 1-1)
2022
PortionRecognizedContract
maturing overgains
amountone year
Fair value(losses)

Recognized
gains(losses)Over-the-counter transactions:(Notes to Derivative Transactions)
At March 31, 2022
1 Derivative transactions to which hedge accounting was not applied
Derivative transactions to which hedge accounting was not applied are set forth in the tables below.
The contract amount do not reflect the market risk associated with the derivatives.

Earthquake derivatives
Sell
Buy
Total

¥2,050
2,050
—

¥—
—
—

¥(24)
24
¥ —

¥—
—
¥—

$16,749
16,749—$———$(196)
196
$ —

$—
—
$—

The above transactions are measured at fair value, and recognized gains (losses) are charged to the consolidated statements of income.

Recognized
gains(losses)¥110,664¥110,654¥(1,021)¥(1,021)$904,191$904,109$ (8,342)$ (8,342)

110,664—

110,654—

2,295¥ 1,274

2,295¥ 1,274

904,191—

904,109—18,751$10,40918,751$10,409

The above transactions are measured at fair value, and recognized gains (losses) are charged to the consolidated statements of income.
(2) Currency and foreign exchange contracts

Contract
amount¥493,137¥416,969

333,693
255,749

61,056
60,83775,50575,505—49,25349,253—¥247

Recognized
gains(losses)¥Thousands of U.S. dollars (Note 1-1)
2022
PortionRecognizedContract
maturing overgains
amountone year
Fair value(losses)

247$4,029,226$3,406,887

$

2,018

(22,530)
13,514(22,530)
13,514

2,726,472
2,089,623

498,864
497,074(184,083)
110,417(184,083)
110,417(2,768)2,729¥ (8,807)

(609)
909
¥ (8,467)

616,921616,921—402,426
402,426—(22,616)
22,297$ (71,958)(4,975)7,427$ (69,180)

The above transactions are measured at fair value, and recognized gains (losses) are charged to the consolidated statements of income.

$

2,018

(1) Interest rate contracts

Hedgeditems
Method of hedge accounting
Deferral hedge
methodInterest rate swaps
Loans
Receive fixed rate
and pay floating rate
Receive floating rate
and pay fixed rate
Total—

Millions of yen
2022
Portionmaturing over
one yearContract
amountHedgeditems

Fair value

—

—

—

¥364,756—¥364,756—¥3,840¥3,840—Thousands of U.S. dollars (Note 1-1)
2022
PortionContract
maturing overamountone year
Fair value

—

—

—

$2,980,276—$2,980,276—$31,375$31,375

The above transactions are accounted for with the deferral hedge accounting treatment stipulated in JICPA Industry-specific Committees Guidance No. 24, March 17,2022, “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in the Banking Industry.”(2) Currency and foreign exchange contracts

Method of hedge accounting
Deferral hedge method
Currency swaps
Fund related swaps
Total

Hedged items

Foreign currency
monetary assets

Contract
amount¥261,245
649—

Millions of yen
2022
Portionmaturing over
one year¥212,289——

Fair value¥(22,691)
5¥(22,685)

Thousands of U.S. dollars (Note 1-1)
2022
PortionContract
maturing overamountone year
Fair value$2,134,528
5,302—$1,734,528——$(185,399)
40$(185,350)

Sustainability

Over-the-counter transactions:
Currency swaps
Forward exchange contracts:
Sell
Buy
Currency options:
Sell
Buy
Total

Millions of yen
2022
Portionmaturing over
one year
Fair value

2 Derivative transactions to which hedge accounting was applied
Derivative transactions to which hedge accounting was applied are set forth in the tables below.
The contract amount do not reflect the market risk associated with the derivatives.

Business Strategy and Plan for
Realizing the Long-Term Vision

Over-the-counter transactions:Swaps:
Receive fixed rate and pay
floating rate
Receive floating rate and pay
fixed rate
Total

Contract
amountThousands of U.S. dollars (Note 1-1)
2022
PortionRecognizedContract
maturing overgains
amountone year
Fair value(losses)Value Creation Story(1) Interest rate contracts
Millions of yen
2022
Portionmaturing over
one year
Fair value

Letters from theManagement

Valuation gains
Available-for-salesecurities
Other money held in
trust
Deferred tax liabilities
Valuation difference on
available-for-sale securities(before adjustment forminority interests)
Noncontrolling interests
Valuation difference on
available-for-sale securities(3) Credit derivatives

Thousands of
U.S. dollars(Note 1-1)

Millions of yen

2022

About Iyo Bank

(Notes to Valuation difference on available-for-sale securities)
Valuation difference on available-for-sale securities were as follows:

The above transactions are accounted for with the deferral hedge accounting treatment stipulated in JICPA Industry-specific Committees Guidance No.
25, October 8, 2020, “Treatment for Accounting and Auditing of Accounting for Foreign Currency Transactions in the Banking Industry.”

Corporate Data

93

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94

2 Derivative transactions to which hedge accounting was applied
Derivative transactions to which hedge accounting was applied are set forth in the tables below.
The contract amount do not reflect the market risk associated with the derivatives.
(1) Interest rate contracts

Contract
amount¥81,450¥76,292¥1,619¥1,61981,450—76,292
—

(669)
¥ 950

(669)
¥ 950

The above transactions are measured at fair value, and recognized gains (losses) are charged to the consolidated statements of income.

Millions of yen
2021
Portionmaturing over
one year
Fair value

150

Recognized
gains(losses)¥389,160¥362,590¥

267,668
226,168

135,092
29,942(3,055)
4,286(3,055)
4,286

80,82280,822—53,07053,070—(2,462)
2,462¥ 1,381378
273¥ 2,034¥

150

The above transactions are measured at fair value, and recognized gains (losses) are charged to the consolidated statements of income.
(3) Credit derivatives
Millions of yen
2021
Portionmaturing over
one year
Fair value

Recognized
gains(losses)Over-the-counter transactions:Credit default swaps
Sell
Buy
Total

¥1,000——¥1,000
—
—

¥ (2)
—
¥ (2)

¥ (2)
—
¥ (2)

(4) Others
Millions of yen
2021
Portionmaturing over
one year
Fair value

Recognized
gains(losses)Over-the-counter transactions:¥1,500
1,500
—

¥—
—
—

¥ (27)
27
¥ —

¥—
—
¥—

Transactions above for which the values were not readily determinable are stated at cost.

95

IYO BANK Integrated Report 2022—

¥302,523—¥302,523—¥(722)¥(722)

The above transactions are accounted for with the deferral hedge accounting treatment stipulated in JICPA Industry-specific Committees Guidance No. 24, March 17,2022, “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in the Banking Industry.”

Contract
amountHedged item

Method of hedge accounting
Deferral hedge method
Currency swaps
Fund related swaps

Millions of yen
2021
Portionmaturing over
one year

Foreign currency
monetary assets

Fair value¥218,488
3,120¥195,039—¥(6,392)
(52)

—

—

¥(6,444)

Total

The above transactions are accounted for with the deferral hedge accounting treatment stipulated in JICPA Industry-specific Committees Guidance No.
25, October 8, 2020, “Treatment for Accounting and Auditing of Accounting for Foreign Currency Transactions in the Banking Industry.”(Notes to Retirement Benefits)
1 Outline of retirement and severance benefits plans
The retirement benefit plans of the Bank consist of a defined benefit
corporate pension fund plan and a retirement lump-sum grant system.
Extra retirement benefits may be paid upon the retirement of employees.
In addition, the Bank set up a retirement benefit trust. On April 1, 2014,
the Bank transformed its corporate pension fund plan to a cash balance
plan and established a defined contribution pension plan.
On April 1,2021, consolidated subsidiaries established a defined
contribution pension plan.
Consolidated subsidiaries use the simplified method in calculating
net defined benefit liability and retirement benefit expenses for theirretirement lump-sum grant systems.

(2) Reconciliation of pension assets between the beginning andthe end of the period

2 Defined benefit plan
(1) Reconciliation of retirement benefit obligations between the
beginning and the end of the period(Note) Pension assets include assets in the retirement benefit trust.

Millions of yen

Pension assets at the
beginning of the period
Expected return on
pension assets
Actuarial differences
incurred
Employer’s contributions
Retirement benefits paid
Pension assets at the endof the period

2022

2021

2022

¥91,750¥78,279$749,652

786

1,042

6,422

2,163
2,728
(2,363)

12,0032,726(2,301)

17,67322,289(19,307)

95,06691,750776,746

Thousands of
U.S. dollars(Note 1-1)

Millions of yen

Retirement benefit
obligations at the
beginning of the period
Service cost
Interest cost
Actuarial differences
incurred
Retirement benefits paid
Prior service cost
Retirement benefit
obligations at the end of
the period

Thousands of
U.S. dollars(Note 1-1)

2022

2021

2022

¥69,876
2,305
234¥72,0322,362
170$570,928
18,833
1,911(851)(3,627)—(1,259)(3,429)—(6,953)(29,634)—

67,93669,876555,078

Corporate Data

Earthquake derivatives
Sell
Buy
Total

—

Sustainability

The above transactions are measured at fair value, and recognized gains (losses) are charged to the consolidated statements of income.

Contract
amount—Business Strategy and Plan for
Realizing the Long-Term Vision

Contract
amountFair value

Value Creation Story

Over-the-counter transactions:
Currency swaps
Forward exchange contracts:
Sell
Buy
Currency options:
Sell
Buy
Total

Contract
amount(2) Currency and foreign exchange contracts(2) Currency and foreign exchange contracts

Contract
amountHedgeditems
Method of hedge accounting
Deferral hedge
methodInterest rate swaps
Loans
Receive fixed rate
and pay floating rate
Receive floating rate
and pay fixed rate
Total—

Letters from theManagement

Over-the-counter transactions:Swaps:
Receive fixed rate and pay
floating rate
Receive floating rate and pay
fixed rate
Total

Recognized
gains(losses)Millions of yen
2021
Portionmaturing over
one year

Holding Company(1) Interest rate contracts
Millions of yen
2021
Portionmaturing over
one year
Fair value

About Iyo BankAt March 31, 2021
1 Derivative transactions to which hedge accounting was not applied
Derivative transactions to which hedge accounting was not applied are set forth in the tables below.
The contract amount do not reflect the market risk associated with the derivatives.

IYO BANK Integrated Report 2022

96Millions of yen

Retirement benefit
obligations of thesavings plan
Pension assets

2021

2022

¥ 67,487(95,066)(27,578)¥ 69,460(91,750)(22,289)$ 551,409(776,746)(225,328)

449

415

3,668

(27,129)
10,712(37,842)(21,874)
11,326(33,201)(221,660)
87,523(309,191)(27,129)(21,874)(221,660)(Note) Pension assets include assets in the retirement benefit trust.

(4) Retirement benefit cost and its breakdown
Millions of yen

Service cost
Interest cost
Expected return on
pension assets
Recognized actuarial
differences
Amortization of priorservice cost2022
¥ 2,113234

2021¥ 2,171170

2022$ 17,264
1,911

(789)

(1,042)(6,446)(1,419)181(11,594)

(597)
(456)

(597)
883

(4,877)(3,725)(5) Remeasurements of defined benefit plans
The breakdown of items included in remeasurements of defined benefit
plans (before applicable tax effects) was as follows:
Millions of yen

2021¥ (597)
13,445
12,8482022$ (4,877)
13,032
8,154(6) Remeasurements of defined benefit plans
The breakdown of items included in remeasurements of defined benefit
plans (before applicable tax effects) was as follows:
Millions of yen

97

IYO BANK Integrated Report 2022

2022

2021

2022

¥ (1,462)¥ (2,059)$ (11,945)(11,448)(12,910)(9,853)(11,912)(93,537)(105,482)(8) Actuarial assumptions
The weighted average rate for assumptions used for the actuarial
computation of the retirement benefit obligations for the years ended
March 31, 2022 and 2021 were as follows:
2022
2021
Discount rates
Retirement lump-sum
grant system
0.20%
0.10%
Corporate pension
fund plans
0.50%
0.40%
Long-term expected
return on assets
Pension assets ofcorporate pension fund
2.00%
1.37%
Retirement benefit trust(Retirement lump-sum
grant system andcorporate pension
fund plans)
0.00%
0.00%
(Note) A point system is applied to the substantive portion of the retirement
lump-sum grant system and a cash balance plan to defined benefit
corporate pension fund plans, respectively. The “Estimate rate of salary
increase” is not disclosed due to the insignificant impact it would haveon the calculation of retirement benefit obligations.

3 Defined contribution plan
The amount of required contribution of the Bank and its consolidated
subsidiaries to the defined contribution plans was ¥361 million ($2,949
thousand) and ¥334 million at March 31, 2022 and 2021, respectively.

(*) Reported in terms of shares of stock(2) Stock options granted and changes
The table below represents stock options outstanding at the year-end and the number of stock options is converted into the number of stock.
① Number of stock options
2017
Stock Options
shares

2016
Stock Options
shares2015
Stock Options
shares2014
Stock Options
shares2013
Stock Options
shares2012
Stock Options
shares2011
Stock Options
shares81,000——18,00063,00077,900——17,40060,50029,900——5,600
24,30038,200——8,800
29,40031,900——10,40021,50046,800——15,20031,60027,800——6,300
21,500—18,00018,000———17,40017,400
—
—

—
5,600
5,600
—
—

—
8,800
8,800
—
—

—
10,40010,400———15,20015,200
—
—

—
6,300
6,300
—
—

Average exercise
price

2017
Stock Options
Yen (U.S. dollars)¥ 1 ($0)
per share¥543 ($4)
per share

2016
Stock Options
Yen (U.S. dollars)¥ 1 ($0)
per share¥543 ($4)
per share2015
Stock Options
Yen (U.S. dollars)¥
1 ($0)
per share¥ 543 ($4)
per share2014
Stock Options
Yen (U.S. dollars)¥ 1 ($0)
per share¥543 ($4)
per share2013
Stock Options
Yen (U.S. dollars)¥ 1 ($0)
per share¥543 ($4)
per share2012
Stock Options
Yen (U.S. dollars)¥ 1 ($0)
per share¥543 ($4)
per share

2011
Stock Options
Yen (U.S. dollars)¥ 1 ($0)
per share¥543 ($4)
per share

Fair value at the
grant date

¥867 ($7)
per share¥601 ($4)
per share¥1,473 ($12)
per share¥989 ($8)
per share¥918 ($7)
per share¥550 ($4)
per share¥704 ($5)
per share

Before vesting
Previous fiscal
year-end
GrantedForfeited
VestedOutstanding
After vesting
Previous fiscal
year-end
VestedExercised
Forfeited
Exercisable② Price information

Exercise price2 Method of estimating the number of stock options vested
Only the actual number of forfeited stock options is reflected because it is difficult to rationally estimate the actual number of stock options that will be
forfeited in the future.

Corporate Data

Unrecognized prior service
cost
Unrecognized actuarial
differences
Total

Thousands of
U.S. dollars(Note 1-1)

②	Determination of the long-term expected rate of return on pension
assetsThe long-term expected rate of return on pension assets is determinedbased on the average investment yield on the pension assets for the past
three years. When the average rate is below 1.25% or above 2.0%, it isstated as 1.25% and 2.0%, respectively.

2017
2016
2015
2014
2013
2012
2011
Stock Options
Stock Options
Stock Options
Stock Options
Stock Options
Stock Options
Stock Options
Title and number
Directors of the
Directors of the
Directors of the
Directors of the
Directors of the
Directors of the
Directors of theof grantees
Bank: 8
Bank: 7
Bank: 7
Bank: 16
Bank: 18
Bank: 17
Bank: 17
Executive Officers Executive Officers Executive Officers Executive Officersof the Bank: 12of the Bank: 15of the Bank: 14of the Bank: 4
Number of stock
Common shares: Common shares: Common shares: Common shares: Common shares: Common shares: Common shares:
options (*)
140,900
184,600
79,500123,100
140,900
199,500
156,800
Grant dateJuly 14, 2017
July 15, 2016
July 15, 2015
July 16, 2014
July 16, 2013
July 17, 2012
July 15, 2011
Conditions for vesting
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Requisite service
period
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Exercise period
July 15, 2017 to July 16, 2016 to July 16, 2015 to July 17, 2014 to July 17, 2013 to July 18, 2012 to July 16, 2011 toJuly 14, 2047
July 15, 2046
July 15, 2045
July 16, 2044
July 16, 2043
July 17, 2042
July 15, 2041

Sustainability

Prior service cost
Actuarial differences
Total

2022
¥ (597)
1,595
998

Thousands of
U.S. dollars(Note 1-1)

(Note) 34.3% of the total pension assets as of March 31, 2022 (33.4% as ofMarch 31, 2021) represent assets in the retirement benefit trust for the
corporate pension fund, 4.1% of which as of March 31, 2022 (4.0% as
of March 31, 2021) corresponds to the lump-sum grant system.

Business Strategy and Plan for
Realizing the Long-Term Vision(Note 1) Retirement benefit costs of consolidated subsidiaries using thesimplified method are included in “Service cost.”(Note 2) Employee contribution to the corporate pension fund is deducted from“Service cost.”

2021
46.9%
46.3%
6.8%
100.0%

Value Creation Story

Thousands of
U.S. dollars(Note 1-1)

2022
48.1%
44.8%
7.1%
100.0%

Letters from theManagement

Retirement benefit
obligations of thenon-savings plan
Net liabilities and assets
recorded on the
consolidated balance sheets
Net defined benefit liability
Net defined benefit asset
Net liabilities and assets
on the consolidatedbalance sheets

2022

Bonds
Equity securities
Other
Total

(Notes to Stock Options)
1 Outline of stock options and changes
At the 115th Ordinary General Meeting of Shareholders held on Jun. 28, 2018, the Bank abolished compensation type stock options and introduced ashare-based payment system using the trust.
In line with the introduction of this system, the Bank will not grant new stock options. However, the unexercised stock acquisition rights alreadygranted as stock options will continue to exist.
(1) Outline of stock options

Holding Company

Thousands of
U.S. dollars(Note 1-1)

(7) Pension assets① Pension asset portfolio

About Iyo Bank

(3) Reconciliation of retirement benefit obligations and pension
assets at the end of the period to net defined benefit liability
and net defined benefit asset in the consolidated balance
sheetsIYO BANK Integrated Report 2022

98

Thousands of
U.S. dollars(Note 1-1)

Millions of yen¥ 16,221671¥ 15,910
622$ 132,535
5,482

536
488

546
497

4,379
3,987

441

399

3,603

358
2,281
(943)

503
2,319
(924)

2,925
18,637(7,704)20,056

19,875

163,869¥(86,853)¥(102,138)$(709,641)(5,338)(3,873)(43,614)

(893)

(896)

(7,296)(505)—(4,126)(93,590)¥(73,533)(106,908)¥ (87,032)

Ordinary income
Customers
Intersegment
Total
Segment profit
Segment assets
Segment debt
Other items
Depreciation
Interest income received
Interest expense paid
Extraordinary income
Gain on disposal of noncurrent assets
Extraordinary losses
Losses on disposal of fixed assets
Impairment loss
Provision of reserve for financial products
transaction liabilities
Tax expense
Increase in tangible fixed assets
and intangible fixed assets(Notes to Revenue Recognition)
Disaggregation of revenue from contracts with customers (as of March 31, 2022)

¥

3,531
3,226
965
3,808

¥

—
—
—
—

¥

3,531
3,226
965
3,808

¥

—
—
1,236
267

Total

¥

Thousands of U.S. dollars (Note 1-1)
Reportable segments
Commercial
Other
Banking
LeasingTotalbusinesses

3,531
3,226
2,202
4,076

$ 28,850
26,358
7,884
31,113

$

—$
—
—
—

28,85026,358
7,884
31,113

$

Total

—$
—
10,0982,181

28,85026,35817,99133,303—

11,532

1,503

13,036

94,223—

94,223

12,280106,511103,170

16,468

119,638

1,296

120,935

842,961

134,553

977,514

10,589988,111¥114,702¥16,468¥131,170¥2,800¥133,971$937,184$134,553 $1,071,737

Otherbusinesses¥ 114,702
541¥ 115,244¥ 37,284¥8,521,345¥7,804,876¥16,468358¥16,826¥ 521¥55,768¥35,497¥ 131,170899¥ 132,070¥ 37,805¥8,577,114¥7,840,374¥ 2,800
1,901¥ 4,701¥ 424¥13,759¥ 6,658

¥

¥

¥

¥

5,091
75,672
3,002
19
(19)
482
(60)
(421)

34
130
104
—
—
—
—
—

5,126
75,803
3,107
19
(19)
482
(60)
(421)

Total

¥ 133,971
2,801¥ 136,772¥ 38,230¥8,590,874¥7,847,032

38 ¥
3
4
—
—
0
(0)
—

5,164
75,806
3,112
19
(19)
482
(60)
(421)

Adjustments¥—(2,801)¥ (2,801)¥
9¥(46,076)¥(34,033)¥

Consolidated
total¥ 133,971—¥ 133,971¥ 38,239¥8,544,797¥7,812,998(87) ¥
(108)
(94)
—
—
—
—
—

5,077
75,698
3,017
19
(19)
482
(60)
(421)

—
10,812—
169—
10,981

(0)
163

(0)
11,145—4(0)
11,149

6,007

3

6,011

30

6,041

(82)

5,958

Notes:
1. Ordinary income is presented as the counterpart of sales of companies in other industries. The difference between ordinary income and operating income in the
consolidated statement of income is in “Adjustments.”
2. ”Other businesses” includes software development, information processing and securities business not included in the reportable segments.
3. Adjustments are as below.
(1) Adjustment of segment profit includes eliminations of intersegment transactions of ¥9 million ($73 thousand).
(2) Adjustment of segment assets includes eliminations of intersegment transactions of negative ¥46,076 million ($376,468 thousand).
(3) Adjustment of segment debt includes eliminations of intersegment transactions of negative ¥34,033 million ($278,070 thousand).
(4) Eliminations of intersegment transactions include adjustment of depreciation of negative ¥87 million ($710 thousand), adjustment of interest income received ofnegative ¥108 million ($882 thousand), adjustment of interest expense paid of negative ¥94 million ($768 thousand), adjustment of tax expense of ¥4 million($32 thousand) and adjustment of increase in tangible fixed assets and intangible fixed assets of negative ¥82 million ($669 thousand).
4. Segment profit is adjusted to ordinary income in the consolidated statement of income.

Sustainability

11,532

Total$22,877 $1,094,623

Notes: The “Other businesses” category is a business segment not included in reportable segments and represents information processing entrustment and thesoftware development business and securities business.

IYO BANK Integrated Report 2022

Corporate Data

(Notes to Segment Information)
1 Summary of reportable segments
Reportable segments are components of the Bank and its consolidated subsidiaries for which separate financial information is available and is subject toperiodic examination by the Board of Directors to determine the allocation of management resources and assess performances.
The Bank and 16 consolidated subsidiaries (16 consolidated subsidiaries as of March 31, 2021) are engaged mainly in the financial services businessthat includes commercial banking services and leasing services. Therefore, the Bank and its consolidated subsidiaries’ reportable segments comprise‘Commercial Banking’ and ‘Leasing’ and are distinguished by the financial services provided. ‘Commercial Banking’ includes deposit services, lending
services, securities investment services and exchange services. ‘Commercial Banking’ represents the Bank’s banking services as well as the consolidated
subsidiaries’ business support services, credit guarantee services, credit card services, securities trading services and fund management services. ‘Leasing’
includes leasing services by Iyogin Leasing Company Limited, one of the consolidated subsidiaries.

99

Business Strategy and Plan for
Realizing the Long-Term Vision

Fees and commissions
Deposit and loan services
Foreign exchange services
Securities-related services
Other services
Ordinary income fromcontracts with customers
Ordinary income from otheritems above
Ordinary income fromexternal customers

Millions of yen
2022
Reportable segments
Commercial
Banking
Leasing(764,686)$(600,808)

Millions of yen
Reportable segments
Commercial
Other
Banking
LeasingTotalbusinesses

3 Information about reported ordinary income, profits and losses, amounts of assets, debts and other items
Segment information as of and for the years ended March 31, 2022 and 2021 were as follows:

Value Creation Story

2022

Letters from theManagement

Deferred tax liabilities:
Valuation difference
on available-for-salesecurities
Retirement benefit
asset
Deferred gains on real
property
Net deferred gains(losses) on derivatives
under hedge accounting
Total deferred
tax liabilities
Net deferred tax liabilities:

2021

2 Methods used to calculate ordinary income, profit and loss, amounts of assets, debt and other items by reportable segment
The accounting policies described int the Note in (Basis of Presenting Consolidated Financial Statements) have been adopted for the reportablesegments. Reportable segment profit corresponds to ordinary profits. Ordinary income arising from intersegment transactions is based on arm’s length
prices.

Holding Company

Deferred tax assets:
Excess reserve for loan
lossesImpairment loss on land
Accrued employees’
bonuses
Excess depreciation
Write-down ofsecurities
Reserve for losses on
repayments on
dormant bank accounts
Other
Valuation reserve
Total deferred
tax assets

2022

2 A reconciliation of the statutory tax rate and effective tax
rate for the years ended March 31, 2022 and 2021 were as
follows:
For the fiscal year ended March 31, 2022 and 2021, a reconciliation of
the statutory tax rate and the effective income tax rate is not stated as
the difference between the two was less than 5% of the statutory tax
rate.

About Iyo Bank

(Notes to Income Taxes)
1 Significant components of deferred tax assets and liabilities
were as follows:

IYO BANK Integrated Report 2022

100

Reportable segments
Commercial
Banking
Leasing¥ 104,986
598¥ 105,584¥ 25,093¥8,517,978¥7,797,071¥16,692424¥17,117¥ 583¥65,562¥40,009¥¥¥ 121,678
1,023¥ 122,702¥ 25,677¥8,583,541¥7,837,080

29 ¥
119
115
—
—
0
(0)
—

5,160
76,106
4,474
34
(34)
406
(206)
(200)

—
7,201

—
196

7,506

89

¥ 3,138
1,968¥ 5,107¥ 489¥15,304¥ 8,462¥

Total

Adjustments¥ 124,817
2,992¥ 127,809¥ 26,167¥8,598,846¥7,845,543

46 ¥
3
6
—
—
0
(0)
—

5,206
76,110
4,481
34
(34)
407
(206)
(200)

—
7,397

(0)
159

7,595

36

¥

—
(2,992)¥ (2,992)¥
5¥(48,106)¥(36,044)¥¥ 124,817—¥ 124,817¥ 26,172¥8,550,739¥7,809,498(117) ¥
(118)
(105)
—
—
—
—
—

5,089
75,992
4,376
34
(34)
407
(206)
(200)

(0)
7,556

—
(7)

(0)
7,549

7,631

(92)

7,539

$134,553 $ 1,071,737
2,925
7,345
$137,478 $ 1,079,091$ 4,256 $ 308,889$455,658 $70,080,186$290,031 $64,060,576
$

Total

$ 22,877 $ 1,094,623
15,532
22,885$ 38,410 $ 1,117,509$ 3,464 $ 312,362$112,419 $70,192,613$ 54,399 $64,114,976
$

310 $
24
32
—
—
0
(0)
—

—
1,380

—
89,721

(0)
1,331

24

49,113245

42,192
619,380
25,426
155
(155)
3,938
(490)
(3,439)— $ 1,094,623(22,885)—$ (22,885) $ 1,094,623$
73 $ 312,435$(376,468) $69,816,136$(278,070) $63,836,898$(710) $
(882)
(768)
—
—
—
—
—

41,482
618,498
24,650
155
(155)
3,938
(490)
(3,439)(0)
91,061—32(0)91,09449,358(669)

48,680¥21,922

Total¥133,971

2021
Securities
investments

Loans

Ordinary income customers¥52,795

Other
businesses

Lease¥36,895¥16,692¥18,434

Total¥124,817

Thousands of U.S dollars (Note 1-1)
2022
Securities
investments

Loans$425,140

Ordinary income customers

Otherbusinesses

Lease$355,805$134,553$179,115

Total$1,094,623

Millions of yen
2022
Reportable segments
Commercial
Banking¥421

Impairment loss

Leasing

Otherbusinesses

Total

¥—

¥421

¥—

Total

¥421

Millions of yen
2021
Reportable segments
Commercial
Banking
Leasing

Impairment loss

¥200

¥—

Other
businesses

Total

¥200

¥—

Total

¥200

Thousands of U.S dollars (Note 1-1)
2022
Reportable segments$3,439

Leasing$—

Otherbusinesses

Total$3,439Total$—$3,439Account

Outstandingbalance(Millionsof yen)(Notes to Related Party Transactions)
For the year ended March 31, 2022
(1) Transactions between the Bank and related parties.
Directors or major individual stockholders

Type

Name

Companies inwhich a majorityof voting rights
Ability Center,is owned by aInc
director or the
director’s close
relatives

Type

Name

Companies inwhich a majorityof voting rights
Ability Center,is owned by aInc
director or the
director’s close
relatives

Capital(Millions
Location of yen)

Ehime

¥50

Capital(Thousandsof U.S.
Location dollars)

Ehime

$408

Business

Temporarystaffing

Business

Temporarystaffing

Transaction
amountOwnerships of(Millionsvoting rights (%) Relationship Transactionsof yen)—Temporary Temporary
staffing
staffing¥2

Transaction
amount(Thousands
Ownerships ofof U.S.
voting rights (%) Relationship Transactions
dollars)—

Temporary Temporary
staffing
staffing$16—

Account—¥—

Outstandingbalance(Thousandsof U.S.
dollars)$—(Notes)1 The conditions of the above transactions were the same as these of arm’s length transactions.
2 Ms. Junko Miyoshi, a director and Supervisory Committee member, has a close relative who owns a majority of the voting rights of Ability Center, Inc.

101

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

Corporate Data

41,882
619,356
25,386
155
(155)
3,938
(490)
(3,439)$¥16,468

Sustainability

277 $
1,062
849
—
—
—
—
—

Consolidated
total¥43,547

Millions of yen

Impairment loss
Adjustments

Otherbusinesses

Lease

Business Strategy and Plan for
Realizing the Long-Term Vision

Ordinary income
Customers$ 937,184
Intersegment
4,420
Total
$ 941,612
Segment profit$ 304,632
Segment assets$69,624,519
Segment debt
$63,770,536
Other items
Depreciation$
41,596
Interest income received
618,285
Interest expense paid
24,528Extraordinary income
155
Gain on disposal of noncurrent assets(155)
Extraordinary losses
3,938
Losses on disposal of fixed assets(490)
Impairment loss
(3,439)Provision of reserve for financial products
transaction liabilities—
Tax expense
88,340
Increase in tangible fixed assets and intangible
fixed assets
49,080Other
businesses¥52,033

Ordinary income customers

Commercial
Banking

Thousands of U.S. dollars (Note 1-1)
2022

Total

Securities
investments

Loans

Value Creation Story

Notes:
1. Ordinary income is presented as the counterpart of sales of companies in other industries. The difference between ordinary income and operating income in the
consolidated statement of income is in “Adjustments.”
2. ”Other businesses” includes software development, information processing and securities business not included in the reportable segments.
3. Adjustments are as below.
(1) Adjustment of segment profit includes eliminations of intersegment transactions of ¥5 million.
(2) Adjustment of segment assets includes eliminations of intersegment transactions of negative ¥48,106 million.
(3) Adjustment of segment debt includes eliminations of intersegment transactions of negative ¥36,044 million.
(4) Eliminations of intersegment transactions include adjustment of depreciation of negative ¥117 million, adjustment of interest income received of negative ¥118
million, adjustment of interest expense paid of negative ¥105 million, adjustment of tax expense of negative ¥7 million and adjustment of increase in tangible
fixed assets and intangible fixed assets of negative ¥92 million.
4. Segment profit is adjusted to ordinary income in the consolidated statement of income.

Reportable segments
Commercial
Banking
Leasing

Millions of yen
2022

Consolidated
total

Letters from theManagement

5,130
75,986
4,358
34
(34)
406
(206)
(200)

Other
businesses

Holding Company

Ordinary income
Customers
Intersegment
Total
Segment profit
Segment assets
Segment debt
Other items
Depreciation
Interest income received
Interest expense paid
Extraordinary income
Gain on disposal of noncurrent assets
Extraordinary losses
Losses on disposal of fixed assets
Impairment loss
Provision of reserve for financial products
transaction liabilities
Tax expense
Increase in tangible fixed assets and intangible
fixed assets

Total

About Iyo Bank

(4) Related information
Information by service

Millions of yen
2021

102

Type

Name

Capital(Millions
Location of yen)

Type

Name

Ehime

¥50

Temporarystaffing

Capital(Thousandsof U.S.
Location dollars)

Ehime

$408

Business

Temporarystaffing¥22

Account

Otherliabilities

Transaction
amount(Thousands
Ownerships ofof U.S.
voting rights (%) Relationship Transactions
dollars)

Account

Direct Temporary Temporary
19.2% holding
staffing
staffing

Otherliabilities$179

Outstandingbalance(Millionsof yen)¥0

Outstandingbalance(Thousandsof U.S.
dollars)$0

For the year ended March 31, 2021

Name

Ability Center,
Inc

Ehime

¥50

Business

Temporarystaffing—

Temporarystaffing

Temporarystaffing¥2

Account—

Outstandingbalance(Millionsof yen)¥—(Notes)1. The conditions of the above transactions were the same as those of arm’s length transactions.
2. Ms. Junko Miyoshi, a director and Supervisory Committee member, has a close relative who owns a majority of the voting rights of Ability Center, Inc.

(2) Transactions between consolidated subsidiaries of the Bank and related parties.
Directors or major individual stockholders

Type

Ability Center,
Inc

Capital(Millions
Location of yen)

Ehime

¥50

Business

Temporarystaffing

Direct Temporary
19.2% holding
staffing

Temporarystaffing¥26

Account

Otherliabilities(Notes)1. The conditions of the above transactions were the same as those of arm’s length transactions.
2. Ms. Junko Miyoshi, a director and Supervisory Committee member, has a close relative who owns a majority of the voting rights of Ability Center, Inc.

IYO BANK Integrated Report 2022

291

270

2,377

1,435

1,544

11,724

The weighted average interest rates on the outstanding balances at
March 31, 2022 and 2021 were as follows:
2022
2021
Borrowings from banks
0.06%
0.02%
Lease liabilities(due within one year)——
Lease liabilities(due after one year)——

Outstandingbalance(Millionsof yen)¥—(Significant subsequent events)(Transition to Holding Company Structure through a Sole Share
Transfer)
The Bank resolved to transform to a holding company structure byincorporating “Iyogin Holdings, Inc.” a holding company (the wholly
owning parent company) (the “Holding Company”) at the Board of
Directors meeting held on May 13, 2022 through a sole-share transfer(the “Share Transfer”) dated October 3, 2022 (scheduled), on theassumption that approval at the annual stockholder’s meeting andnecessary approvals of the relevant authorities would be obtained.
The Share Transfer plan was approved at the annual stockholder’smeeting on June 29, 2022.
1. Objectives of the Share Transfer
The Bank defined the meaning of its existence in its corporate credo:“creating a bright and prosperous future for the region,” and has madeefforts to stabilize regional financing and stimulate the local economy
through the expansion, etc., of finance-related services by merging withToho Mutual Bank and Fuji Savings Credit Union and establishing groupsubsidiaries for leasing services and securities services, etc.
While doing so, the business environment surrounding regional
financial institutions has changed greatly due to circumstances such as
the normalization of a low-interest policy, changes in spending behavior,changes to the social structure such as the decreasing population andthe diversification and enhancement of customer needs in conjunction
with progressing digitalization. In response, the Bank is seeking to
improve its corporate value as a group, grounded on the importanceof sustainability and in light of the impact of the COVID-19 pandemic,
and it recognizes that it faces the task of changing its business model tocontribute to growth in the local economy.
Therefore, the Bank established its long-term vision to become a“corporate group continuing to create and provide new value” in its
Fiscal 2021 Medium-Term Management Plan that commenced in April
last year, further deepening and evolving the “Digital-Human-Digital
Model”* it has been pursuing and has worked as a unified group totransform its business model.
In order to further move forward with this transformation, theBank has decided to transition to a holding company structure with theobjective of expanding its fields of business in light of the relaxation of* Focusing on customer service by utilizing digital technology to expand
points of contact with customers and thoroughly streamline administrative
procedures.

2. Outline of the Share Transfer(1) Schedule
Record date for ordinary general meeting of shareholders: March 31,
2022 (Thursday)
Board of directors meeting to approve the share transfer plan: May 13,2022 (Friday)
Ordinary general meeting of shareholders to approve the share transfer
plan: June 29, 2022 (Wednesday)
Delisting of the shares of the Bank: September 29, 2022 (Thursday)(scheduled)
Registration of establishment of the Holding Company (effective date):
October 3, 2022 (Monday) (scheduled)
Listing of the shares of the Holding Company: October 3, 2022 (Monday)(scheduled)
Note that this schedule is subject to change as necessary due to theprogress in the Share Transfer procedures or for any other reasons.
(2) Format
Sole share transfer with the Holding Company as the wholly owningparent company incorporated through a share transfer and the Bank as
the wholly owned subsidiary resulting from a share transfer.
(3) Details of allotment
Company name

Iyogin Holdings, Inc.
The Iyo Bank, Ltd.
(wholly owning parent (wholly owned subsidiarycompany incorporated
resulting from a sharethrough a share transfer)transfer)
Share transfer ratio
11(i) Ratio
All shareholders of the Bank entered or recorded in the Bank’s
shareholder register immediately prior to the time that the Holding
Company acquires all of the issued shares of the Bank pursuant to the
Share Transfer (the “Reference Time”) will receive an allotment of one
share of common stock of the Holding Company per share of common
stock of the Bank that they hold.
(ii) Number of shares per unit
The Holding Company will adopt a share unit system with one unit
equaling 100 shares.

IYO BANK Integrated Report 2022

Corporate Data

103

2022
$6,130,419

Sustainability

Companies inwhich a majorityof voting rights
is owned by adirector or the
director’s close
relatives

Name

Transaction
amountOwnerships of(Millionsvoting rights (%) Relationship Transactionsof yen)2021¥743,645

Business Strategy and Plan for
Realizing the Long-Term Vision

Type

Companies inwhich a majorityof voting rights
is owned by adirector or the
director’s close
relatives

Borrowings from banks
Lease liabilities(due within one year)
Lease liabilities(due after one year)

Value Creation Story(1) Transactions between the Bank and related parties.
Directors or major individual stockholders
Transaction
amountOwnerships of(Millionsvoting rights (%) Relationship Transactionsof yen)Millions of yen

2022¥750,302(Note) The “average interest rate” is not shown for lease obligations because the
Bank uses a method in which amounts equal to the interest in the total
capital lease obligations are spread equally over each fiscal year of the lease
period.

(Notes)1. The conditions of the above transactions were the same as those of arm’s length transactions.
2. Ms. Junko Miyoshi, a director and Supervisory Committee member, has a close relative who owns a majority of the voting rights of Ability Center, Inc.

Capital(Millions
Location of yen)Thousands of
U.S. dollars(Note 1-1)

Letters from theManagement

Companies inwhich a majorityof voting rights
Ability Center,is owned by aInc
director or the
director’s close
relatives

Direct Temporary Temporary
19.2% holding
staffing
staffing

Transaction
amount(Millionsof yen)regulations, enhancing group governance by strengthening business
management functions and maximizing group synergies.
With the transition to a holding company structure, the Bank will
strive to grow the Iyogin group sustainably and improve its corporate
value by promoting changes in employee and officer awareness andbehavior and creating a structure that can respond as a cohesive group
to diversified and enhanced customer needs, with the aim of earning
the unwavering trust of its shareholders, customers, employees and local
residents, which in turn will contribute to the realization of a sustainable
society.
As a result of the Share Transfer, the Bank will become a wholly
owned subsidiary of the Holding Company and the shares of the Bank
will be delisted. However, we plan to make an application to list theHolding Company shares that will be delivered to all shareholders as
consideration for the Bank’s shares on the Prime Market of the Tokyo
Stock Exchange, Inc. (“TSE”). The listing date is subject to review by TSE,
but is planned for October 3, 2022, which is the date of registration
for the establishment of the Holding Company (the effective date of
the Share Transfer), and we intend to effectively maintain the listing ofshares.

Holding Company

Companies inwhich a majorityof voting rights
Ability Center,is owned by aInc
director or the
director’s close
relatives

Business

Ownerships ofvoting rights (%) Relationship Transactions(Consolidated Supplementary Schedules)
1 BORROWED MONEY AND LEASE LIABILITIES
Borrowed money consisted of the following:

About Iyo Bank

(2) Transactions between consolidated subsidiaries of the Bank and related parties.
Directors or major individual stockholders

104About Iyo Bank

Nonconsolidated Balance Sheet (Unaudited)2022¥1,513,960
6,211
525
1,507
1,686,455
5,068,841(33,749)
11,310121,272
71,531
9,397
26,95428,396¥8,512,616¥1,415,244
6,834
649
1,257
1,890,539
4,999,333(32,784)
8,596
84,24371,896
9,013
23,166
28,796¥8,506,787$12,369,964
50,747
4,289
12,313
13,779,352
41,415,483(275,749)
92,409990,865
584,451
76,779220,230
232,012$69,553,198

LIABILITIES AND NET ASSETS
Liabilities
Deposits
Call money
Payables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Foreign exchange
Borrowed money from trust account
Other liabilities
Accrued employees’ bonuses
Employees’ severance and retirement benefits
Reserve for losses on repayment of dormant bank accounts
Reserve for contingent losses
Reserve for share-based payments
Deferred tax liabilities
Deferred taxes on revaluation excess
Acceptances and guarantees
Total liabilities¥6,654,132
7,343
74,232
139,898
744,751
1,837
554
74,5401,613
12,286
1,175
881
413
67,142
9,520
28,396
7,818,723¥6,522,633
61,624
199,289
91,604
738,176266
563,008
1,626
12,789
1,652
703
289
76,848
9,573
28,796
7,808,888$54,368,265
59,996
606,520
1,143,050
6,085,064
15,0094,526
609,036
13,179100,384
9,600
7,198
3,374
548,590
77,784232,01263,883,675

Net assets
Common stock
Authorized — 600,000,000 shares
Issued — 323,775,366 shares
Capital surplus
Legal reserve
Other retained earnings
Treasury stock
Valuation difference on available-for-sale securities
Net deferred gains (losses) on derivatives under hedge accounting
Land revaluation excess
Stock acquisition rights
Total net assets
Total liabilities and net assets

20,948
10,48020,948438,382(6,103)
188,816
1,152
19,058208
693,892¥8,512,616

20,948
10,48020,948418,816(6,508)214,136(374)
19,178273
697,899¥8,506,787

171,157
85,627
171,157
3,581,844(49,865)
1,542,740
9,412
155,715
1,699
5,669,515$69,553,198

Sustainability(Repurchase of Treasury Stock)
The Bank resolved to repurchase its treasury stock in accordance with
Article 33 of Articles of Incorporation based on Article 459, Paragraph 1,
Item 1 of the Companies Act of Japan at its Board of Directors meeting
held on May 13, 2022 in order to enhance shareholder return, toimprove capital efficiency and implement flexible capital policies.
1. Class of Share: Common Stock
2. Total number of shares of common stock to be repurchased: Up to
5,000,000 shares
3. Total amount: Up to ¥3,000 million ($24 million)
4. Repurchase method: Auction market on Tokyo Stock Exchange
5. Period: From May 16, 2022 to July 29, 2022

2021

Business Strategy and Plan for
Realizing the Long-Term Vision

4. Outline of Accounting Treatment of the Share Transfer
The Share Transfer constitutes a common control transaction for the
purpose of corporate accounting and, therefore, does not affect profit
and loss.

2022

ASSETSCash and due from banks
Monetary claims purchased
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Reserve for loan losses
Foreign exchange
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Customers’ liabilities for acceptances and guarantees
Total assets

Value Creation Story(5) Handling of new listing of the Holding Company
The Bank intends to make an application to list the shares of the newly
established Holding Company on the Prime Market of TSE (TechnicalListing) as of October 3, 2022. Because the Bank will become a wholly
owned subsidiary of the Holding Company through the Share Transfer,the shares of the Bank are expected to be delisted from the Prime
Market of TSE as of September 29, 2022, before listing the shares of theHolding Company.
The delisting date may change as determined in accordance with
TSE’s rules.

(1) Name
Iyogin Holdings, Inc.
(2) Address
1 Minami-Horibata-cho, Matsuyama-shi, Ehime(3) Representatives, Chairman
directors andIwao Otsuka (Currently: Chairman, Iyo Bank)
executives, etc. President and Director (Representative Director)
expected toKenji Miyoshi (Currently: President, Iyo Bank)
assume office Director, Senior Managing Executive Officer(Representative Director)
Hiroshi Nagata (Currently: Senior Managing
Director, Iyo Bank)
Director, Managing Executive Officer
Kensei Yamamoto (Currently: Managing Director,
Iyo Bank)
Director (Audit and Supervisory Committee Member)
Tetsuo Takeuchi (Currently: Director, Iyo Bank)
Director (Audit and Supervisory Committee Member)
Junko Miyoshi (Currently: Outside Director, Iyo
Bank)
Director (Audit and Supervisory Committee Member)
Keiji Joko (Currently: Outside Director, Iyo Bank)
Director (Audit and Supervisory Committee Member)
Yoriko Noma (Currently: Outside Director, Iyo Bank)(Note) The Directors (Audit and Supervisory
Committee Members) Ms. Junko Miyoshi, Mr. Keiji
Joko, and Ms. Yoriko Noma are outside directors
defined in Article 2(xv) of the Companies Act.
(4) Amount of¥20,000 million ($163 million)
stated capital(5) Net assets
Not yet decided(6) Total assets
Not yet decided(7) Description of • Management and operation of banks and otherbusinesscompanies that may be subsidiaries pursuant to the
Banking Act and any and all business incidental or
related thereto• Other business that may be conducted by a holding
company of a bank pursuant to the Banking Act

Thousands of
U.S. dollars

Millions of yen

Letters from theManagement(4) Matters regarding share options and bonds with share options
involved with the Share Transfer
The holders of stock options issued by the Bank will be delivered andallotted equivalent stock options of the Holding Company in exchange
for the stock options of the Bank. The Bank has not issued bonds withshare options.

3. Outline of the Holding Company to be Newly EstablishedThrough the Share Transfer (wholly owning parent company
incorporated through a share transfer) (scheduled)

Holding Company(iii) Basis for calculation of the share transfer ratio
The Share Transfer will establish the Holding Company alone as thewholly owning parent company of the Bank by the Bank’s sole sharetransfer, and there will be no change in the shareholding structure of
the Bank or the Holding Company at the time of the Share Transfer.
Therefore, with the principal concern that no disadvantage be caused tothe shareholders of the Bank, each shareholder will receive an allotmentof one share of the common stock of the Holding Company per share of
the common stock of the Bank. Therefore, no third-party calculation of
the share transfer ratio has been conducted.
(iv) Results, methods and the basis of calculation by a third party
organization
For the reasons described in (iii) above, no third party organization has
calculated the share transfer ratio.
(v) Number of new shares to be delivered
Number of new shares: 317,998,884 shares of common stock (subject
to change)
However, if there is a change in the total number of issued shares of the
Bank prior to the Share Transfer taking effect, there will also be a change
in the number of new shares to be delivered by the Holding Company.
Because the treasury shares held by the Bank that are able to be retired
in practice will be retired by the Reference Time, the 5,776,482 treasury
shares held by the Bank as of March 31, 2022 are excluded from the
new shares to be delivered in the above calculation. Furthermore, if thenumber of treasury shares held by the Bank as of March 31, 2022 haschanged by the Reference Time, such as the case in which the Bank’s
shareholders have exercised the right to request a purchase of shares,
the number of new shares to be delivered by the Holding Company willchange accordingly.

The Iyo Bank, Ltd.
March 31,2022

Corporate Data

105

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022106

Nonconsolidated Statement of Changes in Net Assets (Unaudited)

The Iyo Bank, Ltd.
For the year ended March 31, 2022

The Iyo Bank, Ltd.
For the year ended March 31, 2022

2022

Capital surplus
For the year ended March 31, 2022

¥ 48,929
24,506—
2,022
12,625
18,776
7,301
114,161¥ 49,654
25,176(160)
1,041
12,664
11,321
4,764
104,463$399,779
200,228—
16,520103,153
153,41159,653
932,764

1,724
956
187
12
1,477
6,462
5,767
49,37015,10081,05823,404

12,492
1,977
571
637
8,824
51,679124,658
385,979
61,802648,664
284,100

9,404
706¥24,660

8,093(1,368)¥ 16,679

76,836
5,768$201,487¥52.67
52.61

$0.63
0.63

Capitalreserve

Other capitalsurplus

Total capitalsurplus¥20,948¥10,480¥—¥10,480

20,948

10,480—

10,480

(292)
292

(292)
292

—
—

—
¥10,480—¥20,948—¥10,480¥

Thousands of U.S. dollars
Stockholders’ equity
Capital surplus
For the year ended March 31, 2022

Balance at the beginning of the accounting period
Cumulative effects of changes in accounting polices
Restated balance
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stockTransfer of loss on disposal of treasury stockReversal of land revaluation excessChanges in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period

Commonstock

Capitalreserve

Other capitalsurplus

Total capitalsurplus$171,157$85,627$—$85,627

171,157

85,627—85,627(2,385)2,385(2,385)
2,385

—
—

—
$85,627—$171,157—$85,627$

Millions of yen
Stockholders’ equity
Retained earnings
Other retained earnings

107

IYO BANK Integrated Report 2022

¥20,948¥2,041¥398,594

20,9482,041

398,594(6)
12,000Total retained
earnings¥ 18,180(167)
18,013¥439,765(167)
439,598(4,754)
6(12,000)
24,660(4,754)——
24,660Treasurystock¥(6,508)(6,508)—¥20,948(6)¥2,03512,000¥410,594

(292)
119

7,739
¥ 25,752

19,732¥459,330¥464,686(167)
464,519(4,754)

(638)
1,043
(292)
119

Total
stockholders’equity405¥(6,103)

24,660
(638)
750
—
119
20,137¥484,656

IYO BANK Integrated Report 2022

Corporate Data

Balance at the beginning of the accounting period
Cumulative effects of changes in accounting polices
Restated balance
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stockTransfer of loss on disposal of treasury stockReversal of land revaluation excessChanges in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period

Generalreserve

Retainedearnings
brought
forwardSustainability

For the year ended March 31, 2022

Legal
reserve

Deferred gains
on realproperty

Business Strategy and Plan for
Realizing the Long-Term Vision¥77.84
77.78

U.S. dollars

Balance at the beginning of the accounting period
Cumulative effects of changes in accounting polices
Restated balance
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stockTransfer of loss on disposal of treasury stockReversal of land revaluation excessChanges in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period

Commonstock

Value Creation Story

1,529
242
70
78
1,080
6,325
15,25747,2407,564
79,39034,771

Yen

Basic net income per share
Diluted net income per share

2022

Letters from theManagement

EXPENSESInterest expense:
Interest on deposits
Interest on borrowings and rediscounts
Interest on payables under repurchase agreements
Interest on payables under securities lending transactions
Other interest expense
Fees and commissions
Other operating expenses
General and administrative expenses
Other expenses
Total expenses
Income before income taxes
Income taxes:
Current
Deferred
Net income

2021

Stockholders’ equity

Holding Company

INCOMEInterest and dividend income:Interest on loans and discounts
Interest and dividends on securities
Interest on receivables under resale agreements
Other interest income
Fees and commissions
Other operating income
Other income
Total income

Millions of yen

Thousands of
U.S. dollars

Millions of yen

About Iyo Bank

Nonconsolidated Statement of Income (Unaudited)108

About Iyo Bank

Thousands of U.S. dollars

Millions of yen

Stockholders’ equity

Stockholders’ equity

Retained earnings

Capital surplus

Other retained earnings$171,157$16,676 $3,256,753

171,157

16,676

3,256,753

Total retained
earnings$148,541 $3,593,144(1,364)(1,364)
147,177 3,591,780(38,843)
49(98,047)
201,487(49)
98,047

Treasurystock$(53,174) $3,796,764(1,364)(53,174) 3,795,399(38,843)——
201,487(38,843)(2,385)972

201,487(5,212)
6,127
—
972

63,232
161,222$210,409 $3,753,002

3,309
164,531$(49,865) $3,959,931(5,212)8,521(2,385)972—$171,157(49)
98,047$16,627 $3,354,800

Total
stockholders’equityBalance at the beginning of the accounting period
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer of loss on disposal of treasury stockReversal of land revaluation excess
Changes in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period¥20,948¥10,480—¥20,948¥214,136¥ (374)¥19,178¥232,939¥273

214,136(374)

19,178232,939273¥697,899(167)
697,732(4,754)
24,660(638)
750(25,320)(25,320)¥188,816

1,527
1,527
¥1,152

Balance at the beginning of the accounting period
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer of loss on disposal of treasury stockReversal of land revaluation excess
Changes in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period

Deferred gains
on realpropertyLegal
reserve¥20,948¥2,048Generalreserve

Retainedearnings
brought
forward

Total retained
earnings¥384,594¥ 19,799¥427,390(4,436)
6(14,000)
16,679(4,436)——
16,679(6)
14,000Treasury
stock

Total
stockholders’equity¥(6,611)¥452,208(4,436)(0)
104—¥20,948(6)¥2,041

14,000¥398,594

(6)
137

(6)
137

(1,618)¥ 18,180

12,374¥439,765103¥(6,508)

StockacquisitionrightsTotal net
assets

16,679(0)
98—
137
12,477¥464,686

(119)
(119)
¥19,058(23,911)(23,911)¥209,027

(65)
(65)
¥208

Land
Total valuation
revaluation and translation
excessadjustments$(3,055)$156,695 $1,903,251(3,055)

156,695

1,903,251

For the year ended March 31, 2021

StockacquisitionrightsTotal net
assets$2,230 $5,702,255(1,364)2,230 5,700,890(38,843)(972) (195,367)(972) (195,367)$155,715 $1,707,876

Balance at the beginning of the accounting period
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer of loss on disposal of treasury stockReversal of land revaluation excess
Changes in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period

Net deferred
Valuation
gains (losses)
difference on on derivatives
available-for- under hedge
sale securities accounting¥163,329

¥ 792

Land
Total valuation
revaluation and translation
excessadjustments¥19,315¥183,437¥343¥635,989(4,436)
16,679(0)98

50,80750,807¥214,136(1,167)(1,167)¥(374)(137)(137)¥19,178

49,50249,502¥232,939

(69)
(69)
¥273

137
49,432
61,910¥697,899
Corporate Data

201,487(5,212)
6,127
12,476
12,476$ 9,412Valuation and translation adjustments

Sustainability

Net deferred
Valuation
gains (losses)
difference on on derivatives
available-for- under hedge
sale securities accounting

Balance at the beginning of the accounting period $1,749,620
Cumulative effects of changes in accounting polices
Restated balance
1,749,620
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stockTransfer of loss on disposal of treasury stockReversal of land revaluation excessChanges in items other than stockholders’ equity, net (206,879)
Total changes during the accounting period(206,879)
Balance at the end of the accounting period$1,542,740

IYO BANK Integrated Report 2022—
¥10,480

Millions of yen

Valuation and translation adjustments

109

—
¥—

Retained earnings

119(23,977)(3,839)¥693,892

Thousands of U.S. dollars

For the year ended March 31, 2022

(6)
6

Business Strategy and Plan for
Realizing the Long-Term Vision

Balance at the beginning of the accounting period
Cumulative effects of changes in accounting polices
Restated balance
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stockTransfer of loss on disposal of treasury stockReversal of land revaluation excessChanges in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period(6)
6

Value Creation Story

For the year ended March 31, 2022

Total net
assets¥10,480

Other retained earnings

For the year ended March 31, 2021

Stockacquisitionrights¥—Millions of yen

Valuation and translation adjustments

Land
Total valuation
revaluation and translation
excessadjustments

Total capitalsurplus

Stockholders’ equity

Millions of yen
Net deferred
Valuation
gains (losses)
difference on on derivatives
available-for- under hedge
sale securities accounting—¥10,480

Other capitalsurplus

Letters from theManagement

Balance at the beginning of the accounting period
Cumulative effects of changes in accounting polices
Restated balance
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase of treasury stock
Disposal of treasury stockTransfer of loss on disposal of treasury stockReversal of land revaluation excessChanges in items other than stockholders’ equity, net
Total changes during the accounting period
Balance at the end of the accounting period

Generalreserve

For the year ended March 31, 2021

Capitalreserve

Holding Company

For the year ended March 31, 2022

Deferred gains
on realpropertyLegal
reserve

Retainedearnings
brought
forwardCommonstock972(531) (195,906)(531)(31,366)$1,699 $5,669,515

IYO BANK Integrated Report 2022

110About Iyo Bank

Corporate Profile
Head Office

1, Minami-Horibata-cho, Matsuyama-shi, Ehime, JapanFoundation

March 15, 1878 (The 29th National Bank)

Number of employees
Number of branches

Holding Company¥20,900 million (Total number of issued shares:
323,775 thousand shares)
13 Officers, 2,670 employees (excluding temporary andsecondment staff)
151 domestic (including 22 branches within branches, 9 sub-branches), 1 overseas(Singapore)

Capital2 overseas representative offices (Shanghai, Hong Kong)
Consolidated equity ratio (BIS standards)

14.32%

Consolidated subsidiaries

16 companies

Consolidated employees(excluding temporary staff)

3,044 persons

Status of shares (one unit represents 100 shares)
Classification

Financial
institutions

Foreign corporations, etc.

Financial
instruments
business
operators

Other
corporations

Shareholders
other than
individual
shareholders

Individual
shareholders

Individuals andothers

Total

2

55

26

1,147

189

35

24,94926,4038,019

1,251,189

44,218933,408

340,620387

656,6873,234,528

0.25

38.68

1.37

28.86

10.53

0.01

20.30

100.00

Proportion(%)

Status of odd
stocks (numberof shares)—
322,566—(Note) Of the 5,776,482 shares of treasury shares, 57,764 units are included in “Individuals and others” and 82 shares are included in “Status of odd stocks”.

Value Creation Story

Number ofshareholders(persons)
Number ofshares held (inunits)

National
or localgovernmentsof JapanLetters from theManagement

Composition of Shareholders

Major Shareholders

The Master Trust Bank of Japan, Ltd.
Custody Bank of Japan, Ltd.
Nippon Life Insurance Company
Meiji Yasuda Life Insurance Company
Daio Kaiun Co., Ltd.

Employee stock ownership of Iyo Bank
Sompo Japan Insurance Inc.
IYOTETSU Group Co., Ltd.
Total

2-11-3 Hamamatsu-cho, Minato-ku, Tokyo
1-8-12 Harumi, Chuo-ku, Tokyo
1-6-6 Marunouchi, Chiyoda-ku, Tokyo
2-1-1 Marunouchi, Chiyoda-ku, Tokyo
7-35 Mishimakamiya-cho, Shikokuchuoshi, Ehime
1-3-2 Otemachi, Chiyoda-ku, Tokyo
7-18-24 Tsukiji, Chuo-ku, Tokyo
1, Minami-Horibata-cho, Matsuyamashi, Ehime, Japan
1-26-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
4-4-1 Minatomachi, Matsuyama-shi,
Ehime—

Shares held
(thousands of shares)

Ratio of acquired shares tototal number of issued shares(excluding treasury shares) (%)

36,00832,807
8,878
8,867

11.32
10.31
2.79
2.78

6,000

1.88

5,911
5,415

1.85
1.70

4,985

1.56

4,293

1.35

3,844

1.20

117,013

36.79

Sustainability

Sumitomo Forestry Co., Ltd.
Sumitomo Life Insurance Company

Location

Business Strategy and Plan for
Realizing the Long-Term Vision

Name(Notes) 1. The number of shares held by The Master Trust Bank of Japan, Ltd., associated with trust services is 36,008 thousand shares. The breakdown of which is 35,308 thousand sharesin the trust account and 700 thousand shares in the retirement benefit trust account.

111

IYO BANK Integrated Report 2022

IYO BANK Integrated Report 2022

Corporate Data

2. The number of the shares held by Custody Bank of Japan, Ltd., associated with trust services is 32,807 thousand shares are related to the trust business. The breakdown of which is
25,359 thousand shares in the trust account, 6,049 thousand shares in the retirement benefit trust account, 182 thousand shares in the pension trust account, 196 thousand sharesin the pension tokkin special pension account (a type of corporate investment fund managed by a trust bank), and 1,019 thousand shares in the securities investment trust account.

112