The transition to a holding company structure described in this document involves securities of a Japanesecompany. The offer is subject to disclosure requirements of Japan that are different from those of the UnitedStates. Financial information included in this document, if any, was excerpted from financial statements
prepared in accordance with foreign accounting standards that may not be comparable to the financial
statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal
securities laws, since the issuer is located in Japan and some or all of its officers and directors resideoutside of the United States. You may not be able to sue a Japanese company or its officers or directors in a
Japanese court for violations of the U.S. securities laws. It may be difficult to compel a Japanese company
and its affiliates to subject themselves to a U.S. court's judgment.
You should be aware that the issuer may purchase securities otherwise than in connection with thetransition to a holding company structure, such as in the open market or through privately negotiatedpurchases.
This document has been translated from the Japanese-language original for reference purposes only. In theevent of any conflict or discrepancy between this document and the Japanese-language original, theJapanese-language original shall prevail in all respects.

Internet Disclosure Matters for Notice of Convocation of the119th Annual General Meeting of Shareholders

Business Report
Items Regarding the Bank’s Stock Acquisition Rights .........................................2
Systems for Ensuring Properness of Business Activities andOutline of Operation of the Systems .....................................................................6
Non-consolidated Financial Statements
Non-consolidated Statement of Changes in Net Assets ..............................11
Notes to Non-Consolidated Financial Statements ......................................13
Consolidated Financial Statements
Consolidated Statement of Changes in Net Assets .....................................24
Notes to Consolidated Financial Statements ...............................................25

THE IYO BANK, LTD.

These documents have been provided to shareholders on our website (https://www.iyobank.co.jp/) pursuant toprovisions of the relevant laws and regulations as well as Article 15 of the Articles of Incorporation of the Bank.

1

2

Items Regarding the Bank’s Share Options(1)

The Bank’s share options held by its officers at the end of the fiscal year
Outline of share options

Directors(excluding
Directors
Serving as
Audit andSupervisory
Committee
Members)(i) Name
The Iyo Bank, Ltd. First Share Options(ii) Date of allotment of share options
July 15, 2011(iii) Number of share options
215 units(iv) Class and number of underlying shares
Common stock: 21,500 shares(v) Exercise period for share options
From July 16, 2011 to July 15, 2041
(vi) Exercise price¥1 per share(vii) Conditions for exercising share options
The holder of share options may exercise share options all at once
during a period of 10 days from the day immediately following thedate of forfeiture of his/her position as Director (excluding Director
Serving as Audit and Supervisory Committee Member) of the Bank.
(i) Name
The Iyo Bank, Ltd. Second Share Options(ii) Date of allotment of share options
July 17, 2012(iii) Number of share options
316 units(iv) Class and number of underlying shares
Common stock: 31,600 shares(v) Exercise period for share options
From July 18, 2012 to July 17, 2042
(vi) Exercise price¥1 per share(vii) Conditions for exercise of share options
The holder of share options may exercise share options all at once
during a period of 10 days from the day immediately following thedate of forfeiture of his/her position as Director (excluding Director
Serving as Audit and Supervisory Committee Member) of the Bank.

3

Number of persons
owning shareoptions22

Outline of share options

Directors(excluding
Directors
Serving as
Audit andSupervisory
Committee
Members)(i) Name
The Iyo Bank, Ltd. Third Share Options(ii) Date of allotment of share options
July 16, 2013(iii) Number of share options
215 units(iv) Class and number of underlying shares
Common stock: 21,500 shares(v) Exercise period for share options
From July 17, 2013 to July 16, 2043
(vi) Exercise price¥1 per share(vii) Conditions for exercising share options
The holder of share options may exercise share options all at once
during a period of 10 days from the day immediately following thedate of forfeiture of his/her position as Director (excluding Director
Serving as Audit and Supervisory Committee Member) of the Bank.
(i) Name
The Iyo Bank, Ltd. Fourth Share Options(ii) Date of allotment of share options
July 16, 2014(iii) Number of share options
255 units(iv) Class and number of underlying shares
Common stock: 25,500 shares(v) Exercise period for share options
From July 17, 2014 to July 16, 2044(vi) Exercise price¥1 per share(vii) Conditions for exercising share options
The holder of share options may exercise share options all at once
during a period of 10 days from the day immediately following thedate of forfeiture of his/her position as Director (excluding Director
Serving as Audit and Supervisory Committee Member) of the Bank.

4

Number of persons
owning shareoptions2

3

Outline of share options

Directors(excluding
Directors
Serving as
Audit andSupervisory
Committee
Members)(i) Name
The Iyo Bank, Ltd. Fifth Share Options(ii) Date of allotment of share options
July 15, 2015(iii) Number of share options
190 units(iv) Class and number of underlying shares
Common stock: 19,000 shares(v) Exercise period for share options
From July 16, 2015 to July 15, 2045(vi) Exercise price¥1 per share(vii) Conditions for exercising share options
The holder of share options may exercise share options all at once
during a period of 10 days from the day immediately following thedate of forfeiture of his/her position as Director (excluding Director
Serving as Audit and Supervisory Committee Member) of the Bank.
(i) Name
The Iyo Bank, Ltd. Sixth Share Options(ii) Date of allotment of share options
July 15, 2016(iii) Number of share options
430 units(iv) Class and number of underlying shares
Common stock: 43,000 shares(v) Exercise period for share options
From July 16, 2016 to July 15, 2046
(vi) Exercise price¥1 per share(vii) Conditions for exercising share options
The holder of share options may exercise share options all at once
during a period of 10 days from the day immediately following thedate of forfeiture of his/her position as Director (excluding Director
Serving as Audit and Supervisory Committee Member) of the Bank.

5

Number of persons
owning shareoptions44Outline of share options

Directors(excluding
Directors
Serving as
Audit andSupervisory
Committee
Members)(2)

Number of persons
owning shareoptions(i) Name
The Iyo Bank, Ltd. Seventh Share Options(ii) Date of allotment of share options
July 14, 2017(iii) Number of share options
483 units(iv) Class and number of underlying shares
Common stock: 48,300 shares(v) Exercise period for share options
From July 15, 2017 to July 14, 2047
(vi) Exercise price¥1 per share(vii) Conditions for exercising share options
The holder of share options may exercise share options all at once
during a period of 10 days from the day immediately following thedate of forfeiture of his/her position as Director (excluding Director
Serving as Audit and Supervisory Committee Member) of the Bank.

The Bank’s stock acquisition rights issued to employees and others during the current fiscal year
Not applicable.

66

Systems for Ensuring Properness of Business Activities andOutline of Operation of the Systems
1. Development of systems for ensuring the properness of business activities
The Bank has been striving to develop the systems to ensure the properness of business activities inaccordance with the Basic Policy for Development of Internal Control System stipulated by the
Board of Directors. Note that the development of systems for ensuring the properness of businessactivities described below is a status as of the end of the current fiscal year.
A. Legal compliance system(a) Practicing corporate credo
To fulfill our corporate credo “Creating a bright and prosperous future for the region [Significanceof Existence]”; “Offering the best service and being worthy of people’s trust [Management
Stance]”; and “Rendering our best service with gratitude in our hearts [Code of Conduct]”, allmanagement and employees observe the action guidelines that detail behavioral standards for the
corporate credo.
(b) Establishing a corporate culture focusing on legal complianceWith legal compliance at the top of management agenda, the Directors shall take the lead withintegrity to establish an ethical corporate culture emphasizing on compliance with laws, ordinancesand regulations.
Especially, the President shall show the Bank’s initiatives toward legal compliance at every
possible opportunity, such as new year’s greetings, branch managers’ meetings, and internal
trainings.
(c) Putting in place rules and regulations
The Board of Directors shall formulate standards that must be shared and observed by all
employees from the branch level to top management. These standards shall be reviewed as neededin response to enactment, revision, or abolition of laws and regulations or a change in the businessenvironment and other conditions.
The Board of Directors shall also determine specific implementation plan concerning legal
compliance in each fiscal year.
(d) Establishing an organization
A control division for legal compliance shall be established. Also, compliance officers shall be
appointed at all head office and branch business departments. The compliance officers shall assess
and report a progress in compliance-related matters in each organization as well as organize
training and consulting activities focusing on legal compliance.
In addition, a Compliance Council chaired by the President shall be established to deliberatematters relating to organization-wide legal compliance system. The results of deliberation shall bereported or suggested to the Board of Directors.
(e) Establishing reporting and consulting system
A reporting, including whistle-blowing, and consulting system shall be put in place and properly
conducted in the case of detection of any fact or possibility of a behavior that may violate legal
compliance.
A division shall also be established to sincerely respond to requests or complaints from customers
and collectively manage and inspect the details. This division reports the status to the Executive
Committee every month.
(f) Enhancing education and training systems
Directors shall actively participate in external training and study sessions to collect information ormaterials on legal compliance.
The Compliance Division and compliance officers in each division or department shall enhance
the training systems for legal compliance at internal group training and study sessions at individualorganizations.
(g) Monitoring
The Compliance Division and each division or department concerned shall periodically monitor
7the status of legal compliance.
In addition, the Internal Audit Division shall conduct an internal audit to determine whether thelegal compliance system is appropriate and effective based on the monitoring result reported by theCompliance Division.
(h) Responding to antisocial forces
The Bank shall strive to keep a resolute attitude and stay away from businesses with antisocial
forces, which threaten public order and safety.
(i) Taking countermeasures against money laundering and terrorism funding
The Bank shall conduct businesses with an internal management system developed for preventing
money laundering and terrorism funding.
B. Information storage/management(a) Information storage/management
Each division or department concerned shall appropriately store and manage the following
documents, which record information on the Board of Directors’ performance of duties, for eachspecified period: the minutes of annual general meeting of shareholders, Board of Directors
meetings, Executive Committee meetings, and other meetings and committees; draft proposals forapproval; and other key documents.
(b) Information security
Each division or department concerned shall put in place administrative regulations and otheroperational rules on information security to appropriately protect the information assets owned by
the Bank.
C. Risk management system(a) Developing a risk management plan
The Board of Directors shall issue Risk Management Plan biannually to determine and strengthenrisk management against business risks.
(b) Putting in place rules and regulations
Each risk management control division or department shall put in place management rules andregulations while considering the characteristics of each risk. Based on these rules and regulations,risks shall be appropriately managed.
(c) Establishing an organization
A department shall be established to control overall risk management.
The ALM Committee, chaired by the President, shall also be established, where fundamental
policies on fund management and procurement structures are examined.
Additionally, the Operational Risk Administration Committee, chaired by the director in charge of
the Risk Management Division, and the Credit Risk Administration Committee shall beestablished, where the organization-wide status of risk management is checked, and how toenhance the management system is discussed.
(d) Monitoring
The Risk Management Division and each division or department concerned shall periodicallymonitor the management status and the methods of managing risks.
In addition, the Internal Audit Division shall conduct an internal audit to determine whether therisk management system is appropriate and effective based on the monitoring result reported by
the Risk Management Division.
D. Efficient system for executing duties(a) Directors with special titles
For quicker decision-making and efficient management, Directors with special titles shall be
appointed by a resolution of the Board of Directors, along with assigned departments, divisions,and blocks of which such Directors with special titles shall be in charge.
(b) Executive Committee8In accordance with the Executive Committee Regulations stipulated by the Board of Directors, theExecutive Committee consisting of Directors with special titles shall be established to support the
President’s duties. The Executive Committee shall discuss important issues affecting all areas ofoperations, based on the fundamental policies decided upon by the Board of Directors.
(c) Structure, segregation of duties, and office organization
Structure, segregation of duties, and office organization shall be established to enable the
Directors to efficiently perform their duties.
(d) Development of management plans and progress management
For planned and systematic conduct of duties, the Board of Directors shall determine the MediumTerm Management Plan, Management Plan for each fiscal year, and Cash Budget at beginning ofterm.
The progress of these plans shall be grasped, and the content shall be revised as needed in
response to a change in the business environment and other factors.
(e) Use of IT and other technologies
IT (information technology), information systems, and other technologies shall be used to
streamline the Directors’ duties.
E. Group management system(a) Reliability assurance of financial reporting
The Bank and group companies (subsidiary companies stipulated in Article 2, Paragraph 8 of the
Banking Act and subsidiary corporations, etc. stipulated in Article 4-2-2 of the Order for
Enforcement of the Banking Act) shall comply with laws and regulations, accounting standards,
and other requirements to ensure the reliability of financial reporting.
(b) Management of the group companies
i. Putting in place rules and regulations
The Board of Directors shall put in place rules and regulations to appropriately manage thegroup companies.
ii. Establishing an organization
A department shall be established to control training and support that are provided to the groupcompanies. The Bank shall hold periodic meetings with the group companies. Also, to prevent
losses of group companies, a risk management system shall be introduced, where the groupcompanies consult or report to the Bank about important matters regarding their management.
iii. Business management
The Bank shall provide the group companies with training and support for establishing legal
compliance and risk management systems to ensure that Directors of the group companies canefficiently conduct their duties. Also, the Bank’s Internal Audit Division shall conduct aninternal audit of the group companies to ensure the group-wide properness of businessactivities.
In addition, a system shall be established that enables all management and employees of thegroup companies to consult the Bank’s Audit and Supervisory Committee or the Compliance
Division about matters related to legal observance.
F. Items regarding assistance in auditing work of the Audit and Supervisory Committee(a) Establishing an organization
A division or department shall be established as the secretariat of the Audit and Supervisory
Committee to assist administrative work.
(b) Allocating assistants and ensuring their independence and effectiveness of instructions
The secretariat of the Audit and Supervisory Committee shall be staffed with employees assisting
the duties of the committee. The said employees shall not hold any other posts concurrently. In thecase of personnel changes of them or other adjustment, the Audit and Supervisory Committee shallfirst be consulted for advice and the President makes a final decision while considering the adviceof the committee members.
G. Report to the Audit and Supervisory Committee and systems for ensuring audit
9effectiveness(a) Attendance at major meetings and committees
The Audit and Supervisory Committee Members can attend and voice opinions at the Executive
Committee and other major committees and meetings, which shall be stated in relevant rules orregulations.
(b) Periodic meetings between the President and the Audit and Supervisory Committee
Representative Directors shall hold periodic meetings with the Audit and Supervisory Committee
to discuss issues to be addressed and risks to the Bank as well as the status of developing theauditing environment of the Audit and Supervisory Committee and important auditing matters.
Through the meetings, the Representative Directors shall strive to deepen mutual understanding
and reliability with the committee members.
(c) Report to the Audit and Supervisory Committee
i. Upon finding a fact that can cause serious damage to the Bank or group companies, thedirectors shall immediately report on the fact to the Audit and Supervisory Committee.
ii. A system shall be established for a case where upon finding a fact that can cause serious
damage to the Bank or group companies or a problem with legal observance, the Bank’s
Executive Officers and employees as well as officers and employees of the group companies
can report the fact or problem to the Audit and Supervisory Committee.
iii. The Bank’s Directors, Executive Officers, and employees as well as officers and employees of
the group companies shall cooperate, upon request, to report to the Audit and Supervisory
Committee.
iv. The Bank does not take any adverse actions against individuals who report to the Audit andSupervisory Committee.
(d) Relationship between the Audit and Supervisory Committee and the Internal Audit Division
i. The Internal Audit Division shall follow the instructions of the President and Audit andSupervisory Committee.
ii. The Audit and Supervisory Committee periodically receives reports on issues or other updates
about the internal management system from the Internal Audit Division. Based on thesereports, the committee can give specific instructions as needed to the Internal Audit Division.
Note that in the case of an inconsistency between instructions from the President and thosefrom the Audit and Supervisory Committee, the instructions from the Audit and Supervisory
Committee shall be prioritized.
iii. In the case of personnel changes of the general manager of the Internal Audit Division who
receives instructions from the Audit and Supervisory Committee, the Audit and Supervisory
Committee shall first be consulted for advice and the President makes a final decision whileconsidering the advice of the committee members.
(e) Expenses regarding the execution of duties by the Audit and Supervisory Committee
i. The Bank shall bear expenses that are deemed necessary for the Audit and Supervisory
Committee Members to execute duties (limited to duties of the Audit and Supervisory
Committee).
ii. The Bank shall biannually allocate a certain amount of budget to promptly defray expenses
that are deemed necessary for the Audit and Supervisory Committee Members to execute
duties.
2. Outline of the Operation of the Systems for Ensuring the Properness of Business Activities
The following outlines the operation of systems for ensuring the properness of business activities of
the Bank for the current fiscal year.
A. Legal compliance system
The Bank makes efforts to develop an ethical working environment by grasping the compliancestatus of each workplace through onsite interviews by the Compliance Division and workplaceinterviews by compliance officers assigned to each workplace. Regarding responses to other laws
and regulations, the Bank also strives to bolster its legal compliance system by ensuringawareness of its internal reporting and consultation systems.
B. Information storage/management
Aiming to eradicate wrong deliveries of customer information, the Bank feeds back the results of
its cause analysis for each incident as a reference for self-checking. In order to mitigate the risk,
the Head Office keeps various documents in custody centrally to eradicate wrong disposals ofsuch information.
10

C. Risk management system
The Bank held the ALM Committee (11 times), where it discussed the fundamental policies onfund management and procurement structures. The Bank also have checked the risk management
status and discussed how to enhance the management system in the Operational Risk
Administration Committee (four (4) times) and the Credit Risk Administration Committee (seven(7) times).
D. Efficient system for executing duties
Aiming to offer an integrated solution to regional and customer issues from the perspective ofsustainability and CX enhancement, the Bank established the Business Marketing Division,
Corporate Consulting Division, and Personal Consulting Division while reorganizing the BranchBanking Group to have the Customer Support Center (upgraded to a dedicated center) and five(5) divisions including the International Division and Regional Vitalization Division.
E. Group management system
The Bank held the Group Company Regular Reporting Meeting two (2) times, and its groupcompanies regularly report their management status at the Executive Committee (25 companies
in total). In addition, the Bank has adopted the Group Chief Officer System for the purpose offurther strengthening the Group’s management control structure and conducting integrated,strategic initiatives across the Group.
F. Report to the Audit and Supervisory Committee and systems for ensuring audit
effectivenessIn accordance with the direction and order of the President and the Audit and Supervisory
Committee, the Bank conducts internal auditing and engages in risk communication at themonthly Internal Audit Reporting Meeting. In addition, the Audit and Supervisory Committee
holds a monthly meeting with the Internal Audit Division. The Representative Director,
Chairman, and Audit and Supervisory Committee have strived to deepen mutual understanding
and a relationship of trust in the regularly held meetings such as the Management Deliberation
Committee.

11Non-consolidated Statement of Changes in Net Assets
for the 119th Fiscal Year
(From April 1, 2021 to March 31, 2022)(Millions of yen)
Stockholders’ equity
Capital surplus
Common stock
Capital reserve
Balance at the beginning of the accounting period

Other capital surplus

Total capital surplus

20,948

10,480–

10,48020,948

10,480–

10,480

Disposal of treasury stock

(292)

(292)

Transfer of loss on disposal of treasury stock

292

292

Cumulative effects of changes in accounting policies
Restated balance
Changes during the accounting period
Dividends
Reversal of deferred gains on real property
Provision of general reserve
Net income
Purchase 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–

10,480(Millions of yen)
Stockholders’ equity
Retained earnings
Other retained earnings

Legalretainedearnings

Balance at the beginning of the accounting
periodDeferred gains
on real property

20,948

2,041

Generalreserve

398,594

Cumulative effects of changes inaccounting policies
Restated balance

20,9482,041

398,594

Retainedearnings
brought forward

Treasury
stock

Total
retainedearnings

18,180439,765

(167)

(167)

18,013

439,598(4,754)(4,754)

6–(6,508)

Total
stockholders’equity464,686(167)(6,508)464,519

Changes during the accounting period
Dividends
Reversal of deferred gains on real property(6)

Provision of general reserve

12,000Net income(12,000)–

24,66024,660(4,754)

24,660Purchase of treasury stock

(638)

(638)

Disposal of treasury stock

1,043

750

Transfer of loss on disposal of treasury
stock
Reversal of land revaluation excess

(292)

(292)

–

119

119

119

Changes in items other than stockholders’equity, net
Total changes during the accounting period–(6)12,0007,739

19,732405

20,137

Balance at the end of the accounting period

20,9482,035

410,594

25,752

459,330(6,103)484,656

12

(Millions of yen)
Valuation and translation adjustments
Valuation
Net deferred gains
difference on(losses) on
Land revaluation
available-for- derivatives underexcesssale securities hedge accounting
Balance at the beginning of the accounting
period214,136(374)

19,178

Total valuationand translation
adjustments
232,939

StockacquisitionrightsTotal net assets

273

697,899

Cumulative effects of changes in accounting
policies
Restated balance(167)
214,136(374)

19,178232,939273

697,732

Changes during the accounting period(4,754)

Dividends
Reversal of deferred gains on real property
Provision of general reserve

24,660Net income
Purchase of treasury stock(638)

Disposal of treasury stock

750

Transfer of loss on disposal of treasury stock119

Reversal of land revaluation excess
Changes in items other than stockholders’equity, net(25,320)

1,527

(119)

(23,911)(65)(23,977)

Total changes during the accounting period(25,320)

1,527

(119)

(23,911)(65)(3,839)Balance at the end of the accounting period

188,816

1,152

19,058209,027

208

693,89213

Notes to Non-consolidated Financial Statements
Japanese yen amounts are rounded down to the nearest million.
Significant Accounting Policies
1. Valuation basis and method for trading account securities
Trading account securities are stated at fair market value, and the cost of trading account securities sold iscomputed using the moving average method.
2. Valuation basis and method for securities(1) Held-to-maturity debt securities are stated at amortized cost (on a straight-line basis) using the moving
average method. Equity securities of subsidiaries and affiliates are stated at cost using the moving
average method. Available-for-sale securities are stated at fair market value, and the cost of availablefor-sale securities sold is computed using the moving average method. Note that, however, equity andother securities without fair market value are stated at cost using the moving average method.
Valuation difference on available-for-sale securities is recognized directly in net assets.
(2) Securities included in the money held in trust account are treated in the same manner as the securities
mentioned in 1. and 2. (1) above.
3. Valuation basis and method for derivative transactions
Derivative transactions are valued at fair value.
4. Depreciation/amortization methods for fixed assets(1) Tangible fixed assets (excluding lease assets)
Tangible fixed assets are depreciated using the declining balance method. However, buildings acquired
on and after April 1, 1998 (excluding accompanying facilities) and accompanying facilities andstructures acquired on or after April 1, 2016 are depreciated using the straight-line method.
The primary useful lives of these assets are as follows:
Buildings:
15 to 40 years
Others:5 to 10 years(2) Intangible fixed assets (excluding lease assets)
Intangible fixed assets are amortized using the straight-line method. Internal-use software costs areamortized over the period available for internal use (mainly five years).
(3) Lease assets
Lease assets included in “Tangible fixed assets” or “Intangible fixed assets” under finance leases thatare not deemed to transfer ownership of the lease property to the lessee are depreciated or amortizedusing the straight-line method over the lease term. In cases in which there is a residual value guarantee
under the lease contract, the residual value is the guaranteed amount. In other cases, it is deemed to bezero.
5. Translation of foreign currency assets and liabilities into Japanese yen
Foreign currency assets and liabilities and the accounts of overseas branches are translated into yen at therates prevailing at the balance sheet date.
6. Recognition of reserves(1) Reserve for loan losses
The Bank records reserve for loan losses in accordance with the prescribed write-off and reserve
criteria.
For loans to debtors who are undergoing bankruptcy or business failure through legal proceedings suchas special liquidation (“bankrupt borrowers”), or who are in a similar financial condition(“substantially bankrupt borrowers”), the reserve for loan losses is provided at the full book value ofsuch loans after deducting the amount of direct write-offs (as defined in the proviso below), net of the
expected amount of recoveries from the disposable security and guarantees. For loans to debtors who
are not yet legally bankrupt but deemed to have a high probability of becoming bankrupt (“potentiallybankrupt borrowers”), the reserve for loan losses is provided for the amount deemed necessary basedon an overall solvency assessment performed for the amount of loans, net of the expected amount ofrecoveries from the disposable security and guarantees.
For loans, other than to bankrupt borrowers, substantially bankrupt borrowers, and potentially bankrupt
borrowers, that have been restructured due to the COVID-19 pandemic or for debtors in specificindustries heavily affected by the pandemic, the reserve for loan losses is provided for the amount ofloans, net of the expected amount of recoveries from the disposable security and guarantees, multiplied
by a certain ratio of the remaining amount.
With regard to other loans, the Bank principally records the reserve for loan losses at the amount of
estimated losses for the next one year or for the next three years. The estimated losses are determined14

by calculating rates of loss based on the average actual loan-loss ratios for certain past periods derived
from actual loan-loss experience for one year or three years and making necessary adjustments.
All loans are assessed by business departments in accordance with internal rules for self-assessment ofassets. Subsequently, the Credit Administration Department, which is independent from thesedepartments, audits such assessments.
For secured or guaranteed loans to bankrupt borrowers and substantially bankrupt borrowers, theestimated uncollectible amount, determined by deducting an amount considered recoverable from thedisposable security and guarantees from the loan amount, is directly written off from the loan amount.
The estimated uncollectible amount was ¥20,345 million.
(2) Accrued employees’ bonuses
Accrued employees’ bonuses are provided for the future payment of employees’ bonuses based on theestimated amounts of the future payments that are attributed to the current fiscal year.
(3) Employees’ severance and retirement benefits
To provide for employees’ retirement benefits, employees’ severance and retirement benefits arerecorded based on the projected amounts of retirement benefit obligations and pension assets at the endof the current fiscal year. In calculating retirement benefit obligations, the benefit formula basis is used
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 is amortized using the straight-line method over a certain
Prior service cost:
number of years (10 years) within the average remaining service years of
employees at the time of recognition.
Actuarial differences are amortized on a pro-rata basis using the straightline method over a certain number of years (10 years) within the average
Actuarial differences:remaining service years of employees from the fiscal year following therespective fiscal year of recognition.
(4) Reserve for losses on repayment of dormant bank accounts
Reserve for losses on repayment of dormant bank accounts is provided in connection with inactive
bank accounts the balances of which have been derecognized as liabilities. The reserve is provided forthe possible future demands on claims of withdrawal from these accounts in an amount based on
historical reimbursement experience.
(5) Reserve for contingent losses
Reserve for contingent losses is maintained to provide against possible losses from contingencies
which are not covered by other specific reserves. The amount of reserve is based on an estimate of theamount of possible future losses.
(6) Reserve for share-based payments
Reserve for share-based payments is provided for the estimated amount of share benefit obligations at
the end of the current fiscal year in order to prepare for delivery of the Bank’s shares to its Directors(excluding Directors Serving as Audit and Supervisory Committee Members) and Executive Officers
under the internal share delivery regulations.
7. Recognition of revenues and expenses
Revenue from contracts with customers is primarily received as consideration for the provision of services
incidental to, among other services, deposit and lending services, exchange services, and securities-related
services. Revenue is recognized upon the transfer of promised goods or services through the provision ofservices to customers in an amount that reflects the consideration to which the Bank expects to be entitledin exchange for those goods or services.
8. Hedge accounting methods(1) Hedge against 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, “Accounting and Auditing Treatment of Accounting Standards for
Financial Instruments in Banking Industry.” The effectiveness of hedges that offset market fluctuations
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 swap
transactions, in the same maturity bucket.
(2) Hedge against fluctuation in foreign exchange rates
The Bank applies the deferred method of hedge accounting to hedge foreign exchange risk associatedwith various foreign currency-denominated financial assets and liabilities as stipulated in JICPA
Industry-specific Committees Guidance No. 25, October 8, 2020, “Treatment of Accounting and
Auditing Concerning Accounting for Foreign Currency Transactions in the Banking Industry.” The15

effectiveness of the hedging currency swap transactions, exchange swap transactions, and similartransactions that hedge the foreign exchange risk of monetary claims and liabilities denominated inforeign currencies is assessed by comparing the foreign currency positions of the hedged monetaryclaims and liabilities with those of the 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 and forward foreign exchange contracts
payable exceeds the acquisition costs of the hedged securities in foreign currency.
9. Accounting procedures for consumption taxes
Amounts of nondeductible consumption taxes related to tangible fixed assets are recorded as expenses forthe current fiscal year.
10. Application of consolidated tax payment system
The Bank has adopted a consolidated 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 theend of the current fiscal year.
11. Accounting procedures for retirement benefits
Accounting procedures for unrecognized actuarial differences and unrecognized prior service cost related
to retirement benefits are different from those adopted for the consolidated financial statements.

16

Changes in Accounting Policies(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 from the 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 to which the Bank expects to be entitled in exchange for those goods
and services.
The impact of this application on the non-consolidated financial statements for the current fiscal year was
immaterial.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Bank has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July4, 2019; hereinafter the “Fair Value Measurement Standard”) and other standards from the beginning of thecurrent fiscal year. In accordance with Paragraph 8 of the Fair Value Measurement Standard, the Bank hasrevised its fair value adjustment method used to determine the fair value of derivative transactions tomaximize the use of relevant observable inputs estimated from derivatives and other instruments traded in themarket. This revision comes in line with the application of the Fair Value Measurement Standard and otherstandards. In accordance with the transitional treatment provided for in the proviso to 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 were reflected in retained earnings at the beginning of
the current fiscal year.
As a result, retained earnings brought forward, derivatives (assets), derivatives (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.
Significant Accounting Estimates
The followings are items that were recognized in the non-consolidated financial statements for the current
fiscal year based on accounting estimates and may have a significant impact on the non-consolidated
financial statements for the following fiscal year.
(Reserve for Loan Losses)
1. Amount recognized in the non-consolidated financial statements for the current fiscal year
Reserve for loan losses: ¥33,749 million
Of which, the amount recognized due to the COVID-19 pandemic was ¥7,310 million.
2. Information that contributes to understanding significant accounting estimates for identified items(1) Calculation method
The details for the calculation method for reserve for loan losses are stated in “Significant Accounting
Policies, 6. Recognition of reserves (1) Reserve for loan losses.”(2) Key assumptions
The main assumption is “credit risk of loans in determining debtor classification.” The “credit risk ofloans in determining debtor classification” was determined by evaluating the repayment capacity ofeach debtor based on its financial condition, cash flow, profitability, etc.
In addition, for certain debtors of loans that have been restructured due to the COVID-19 pandemic orfor debtors in specific industries heavily affected by the pandemic, it was assumed that the probabilityof deterioration in their future financial condition, cash flow, profitability, etc. would be higher thanother debtors and that the classification of certain debtors would be deteriorated.
(3) The effect on the next year’s non-consolidated financial statements
Changes for the assumptions used for making initial estimates due to the inflection in the performanceof individual debtors or the impact of the spread of COVID-19 could have a significant effect onreserve for loan losses in the non-consolidated financial statements for the following fiscal year.
Additional Information(Share-based Payment System using the Trust)
The Bank has introduced a share-based payment system using a trust for its Directors (excluding Directors
Serving as Audit and Supervisory Committee Members) and Executive Officers with the aim of raisingawareness 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 the Bank.
17

In accordance with the internal share delivery regulations set forth by the Board of Directors of the Bank,
the Bank grants points to its Directors (excluding Directors Serving as Audit and Supervisory Committee
Members) and Executive Officers. At the time of retirement, shares of the Bank and money will bedelivered in accordance with the points through the trust.
2. Shares of the Bank held by the trust(1) Shares of the Bank held by the trust are recorded as treasury stock in stockholders’ equity at the bookvalue in the trust.
(2) The book value in the trust was ¥781 million.
(3) The number of shares of the Bank held by the trust was 1,186 thousand shares.
Notes(Notes to Non-consolidated Balance Sheet)
1. Total amount of stocks and investments in subsidiaries and affiliates:¥20,546 million
2. The amounts of loans disclosed under the Banking Act and the Act on Emergency Measures for the
Revitalization of the Financial Functions are as described below. These loans include corporate bonds
recorded under “Securities” (limited to corporate bonds for which the payment of principal and interest iswholly or partially guaranteed and which were issued through private placement of securities as defined in
Article 2, Paragraph 3 of the Financial Instruments and Exchange Act), loans and foreign exchange, andaccrued interest, suspense payments and customers’ liabilities for acceptances and guarantees recorded
under “Other assets,” as well as securities if the Bank lent such securities which are required to bedisclosed in notes to its nonconsolidated balance sheet (they are limited to loans for use or lending underrental contract).
Bankrupt and quasi-bankrupt loans:¥1,753 million

Doubtful loans:¥62,389 million

Substandard loans:¥23,780 million

Loans overdue three months or more:¥2,076 million

Restructured loans:¥21,704 million

Subtotal:¥87,923 million

Normal loans:¥5,257,359 million

Total:¥5,345,282 million

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 be recovered
under the contract, excluding bankrupt and quasi-bankrupt loans.
Loans overdue three months or more are loans whose principal and/or interest payment 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 grant certain concessions favorable to thedebtors, such as reduced interest rates or deferral or waiver of interest and/or principal payments to support
or financially rehabilitate such debtors, excluding bankrupt and quasi-bankrupt loans, doubtful loans, andloans overdue three months or more.
Normal loans are loans that do not fall under the categories of bankrupt and quasi-bankrupt loans, doubtful
loans, loans overdue three months or more, or restructured loans, and where the debtors have no problem
with their financial position or operating results.
The above amounts of loans are before the deduction of reserve for loan losses.
(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) on March 31,
2022, the classification of “risk management loans” required to be disclosed under the Banking Act ispresented in accordance with the classification of loans to be disclosed defined in the Act on Emergency
Measures for the Revitalization of the Financial Functions.
18

3. Bills discounted are accounted for as defined in accordance with JICPA Industry-specific Committees
Guidance No.24, March 17, 2022, “Accounting and Auditing Treatment of Accounting Standards for
Financial Instruments in Banking Industry,” although the Bank has the right to sell or pledge commercial
bills and purchased foreign exchange bills obtained as a result of discounting without restrictions. The total
face value of such commercial bills and purchased foreign exchange bills was ¥13,719 million.
4. Assets pledged as collateral were as follows:
Assets pledged as collateral
Securities:¥573,692 million

Loans:
Liabilities secured by pledged assets
Deposits:¥682,501 million¥26,345 million

Payables under repurchase agreements:¥74,232 million

Payables under securities lending transactions:¥139,898 million

Borrowed money:¥736,356 million
In addition to the above, assets pledged as collateral for exchange settlement and other transitions include
securities of ¥406 million and other assets of ¥35,000 million.
Meanwhile, other assets include guarantees of ¥6 million and security deposits of ¥282 million.
5. Overdraft facility agreements and commitment line agreements related to loans are binding agreements
under which the Bank is obliged to lend funds up to certain limits agreed to in advance upon thecustomer’s request. The Bank will lend 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
balance related to these loan agreements amounted to ¥1,283,479 million. Of this amount, ¥1,127,837
million was related to loans in which the term 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 the Bank’s future cash flows. Most of theseloan agreements include conditions which allows the Bank either to decline the request for a loan drawdown or to reduce the agreed limit when there is cause to do so, such as when there is a change in thefinancial condition or when it is necessary to protect the Bank’s credit. The Bank takes various measures toprotect its credit, including having the obligor pledge collateral in the form of real estate, securities, etc.
upon signing the loan agreement, or, after the agreement conclusion, monitoring an obligor’s financial
condition, etc. in accordance with the Bank’s established internal procedures at regular intervals to review
the current agreement if necessary.
6. In accordance with the Act on Revaluation of Land (Act No. 34, March 31, 1998; hereinafter the “Act”),
the Bank revalued land used in the ordinary course of business. As for revaluation differences, thevaluation excess, net of deferred taxes, is recorded as “Land revaluation excess” under net assets whereas
the tax corresponding to the revaluation excess is recorded as “Deferred taxes on revaluation excess” underliabilities.
Date of revaluation:
March 31, 1998
The land was revalued primarily based on posted
land prices stipulated in Article 2, Item 1 of theOrder for Enforcement of the Act on Revaluation
Revaluation method stipulated in Article 3,(Cabinet Order No. 119, March 31, 1998;
Paragraph 3 of the Act:
hereinafter the “Order”) and standard benchmark
land prices stipulated in Article 2, Item 2 of theOrder with reasonable adjustments for land shapeand timing of the assessment.
Difference between the total fair value of land
used in the ordinary course of business revalued
pursuant to Article 10 of the Order at the end of ¥13,271 million
the current fiscal year and the total book value
after revaluation:
7. Accumulated depreciation of tangible fixed assets:
8. Deferred gains on tangible fixed assets not recognized for tax purposes:
19¥54,038 million¥8,224 million

9. The Bank’s guarantee obligations for corporate bonds included in “Securities” issued through private
placement of securities as defined in Article 2, Paragraph 3 of the Financial Instruments and Exchange Act
amounted to ¥61,743 million.
10. Total monetary claims against Directors arising from transactions with Directors:¥0 million
11. Total monetary claims against subsidiaries and affiliates:¥23,265 million
12. Total monetary liabilities to subsidiaries and affiliates:¥28,183 million
13. Principal amount of trusts with the principal indemnification agreement:¥554 million(Notes to Non-consolidated Statement of Income)
1. Revenue from transactions with subsidiaries and affiliates
Total interest income:¥102 million

Total fees and commissions income:¥352 million

Total revenue from other services and other ordinary transactions:
Expenses from transactions with subsidiaries and affiliates
Total interest expenses:¥149 million¥0 million

Total fees and commissions expenses:¥1,987 million

Total expenses from other services and other ordinary transactions:¥2,433 million

2. Transactions between the Bank and related parties
There were no significant transactions to be stated.
(Notes to Non-consolidated Statement of Changes in Net Assets)
Type and number of shares of treasury stock(Thousands of shares)
Number of shares at Increase in number of Decrease in number of Number of shares atthe beginning of theshares during theshares during thethe end of theRemarkaccounting period
accounting period
accounting period
accounting period
Treasury stock
Common stock

7,104

1,001

1,142

6,962

Total

7,104

1,001

1,142

6,962

Notes 1, 2, 3

Notes: 1. The increase in number of treasury stock (1,001 thousand shares) was due to the purchase of treasury stock by thetrust 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 treasury stock (1,142 thousand shares) was due to the disposal of treasury stock in linewith a third-party allotment of newly issued shares to the trust for the share-based payment system (1,000
thousand shares), the delivered shares of the Bank under the share-based payment system (61 thousand shares)
and the exercise of stock acquisition rights (81 thousand shares).
3. The numbers of common shares of treasury stock at the beginning and the end of the current fiscal year include
the Bank’s shares held by the trust for the share-based payment system (247 thousand shares and 1,186 thousand
shares, respectively).

(Notes to Securities)
In addition to “Japanese government bonds,” “Municipal bonds,” “Corporate bonds,” “Equity securities,”and “Other securities” on the non-consolidated balance sheet, securities mentioned in this section include“Trading Japanese government bonds” and trust beneficiary interests in “Monetary claims purchased.”
1. Trading securities (as of March 31, 2022)(Millions of yen)
Unrealized gains (losses) included in profit and loss for thecurrent fiscal year
Trading securities(19)

2. Held-to-maturity debt securities (as of March 31, 2022)
Not applicable.
203. Equity securities of subsidiaries and affiliates (as of March 31, 2022)(Millions of yen)
Balance sheet amount

Fair value

Difference

Equity securities of subsidiaries

–

–

–

Equity securities of affiliates

–

–

–

Total

–

–

–

Note: Balance sheet amount of equity and other securities without fair market value not included in the above table(Millions of yen)
Balance sheet amount
Equity securities of subsidiaries

20,345Equity securities of affiliates

200

4. Available-for-sale securities (as of March 31, 2022)
Category

Securities whosebalance sheet amountexceeds theacquisition cost

Securities whosebalance sheet amount
does not exceed theacquisition cost

Balance sheet amount

Equity securities
Bonds
Japanesegovernment bonds
Municipal bonds
Short-term
corporate bonds
Corporate bonds
OthersSubtotal
Equity securities
Bonds
Japanesegovernment bonds
Municipal bonds
Short-term
corporate bonds
Corporate bonds
OthersSubtotal(Millions of yen)
Difference

Acquisition cost

301,288
301,341

68,441
292,616

232,846
8,725

99,975

95,587

4,388

137,594

134,524

3,070

–

–

–

63,771
561,494
1,164,124
17,563205,32862,504
513,993875,051
23,577
206,860

1,266
47,501
289,073(6,013)(1,531)–––

156,411

157,517(1,106)–––

48,91749,343(425)
262,393272,817(10,424)
485,285
503,255(17,969)
Total
1,649,410
1,378,306
271,103
Note: Balance sheet amount of equity and other securities without fair market value and investments in partnerships, etc.
not included in the above table(Millions of yen)
Balance sheet amount
Equity and other securities without fair market value

11,127

Investments in partnerships, etc.

7,527

Equity and other securities without fair market value include unlisted stocks and are not included in thedisclosure of fair value in accordance with Paragraph 5 of the “Implementation Guidance on Disclosuresabout Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020).
Investments in partnerships, etc. are not included in the disclosure of fair value in accordance with
Paragraph 27 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, July 4, 2019).

21

5. Held-to-maturity debt securities sold during the current fiscal year (from April 1, 2021 to March 31, 2022)
Not applicable.
6. Available-for-sale securities sold during the current fiscal year (from April 1, 2021 to March 31, 2022)
Amount sold
Equity securities
Bonds
Japanese government bonds
Municipal bonds
Short-term corporate bonds
Corporate bonds
Others
Total

8,412
523
–
–
–
523
929,886
938,821

Total gain on sale
4,742
1
–
–
–
1
13,685
18,429(Millions of yen)
Total loss on sale
824
–
–
–
–
–
16,17016,994

7. Securities impaired
Certain securities other than trading securities (excluding equity and other securities without fair market
value and investments in partnerships, etc.) are written down to their fair value in the non-consolidatedbalance sheet, and the difference between the acquisition cost and the fair value is treated as loss for thecurrent fiscal year (hereinafter “impairment (devaluation)”) if the fair value has significantly deteriorated
from the acquisition cost, unless it is deemed that there is a possibility of a recovery in the fair value to theacquisition cost.
The amount of impairment (devaluation) for such securities as of March 31, 2022 was ¥246 million,
including ¥208 million of equity securities and ¥38 million of bonds.
A security is deemed to have “significantly deteriorated” if the fair value has decreased 50% or morecompared to the acquisition cost. If the fair value has decreased more than 30% but less than 50%
compared to the acquisition cost, the security may be deemed “significantly deteriorated” considering thechange in the quoted market price during a certain period in the past, the related business performance, andother factors.
(Notes to Money Held in Trust)
1. Money held in trust for investment (as of March 31, 2022)
Not applicable.
2. Held-to-maturity money held in trust (as of March 31, 2022)
Not applicable.
3. Other money held in trust (other than those held for investment or those held to maturity) (as of March 31,
2022)

Other money held in trust

Balance sheet
amountAcquisition cost

1,507

1,176

Difference

330(Millions of yen)
Of which,
Of which, balancebalance sheet
sheet amount doesamount exceeds
not exceed thethe acquisitionacquisition cost
cost
330

–

Note: “Of which, balance sheet amount exceeds the acquisition cost” and “Of which, balance sheet amount does not exceed
the acquisition cost” represent the breakdown of “Difference” for the respective items.

22

(Notes to Income Taxes)
Significant components of deferred tax assets and liabilities were as follows:(Millions of yen)
Deferred tax assets:
Reserve for loan losses

14,978

Impairment loss on land671

Accrued employees’ bonus

492

Excess depreciation

469

Write-down of securities

434

Reserve for losses on repayment of dormant bank accounts

358

Others

1,982

Subtotal of deferred tax assets

19,386

Valuation reserve(919)

Total deferred tax assets

18,467

Deferred tax liabilities:
Valuation difference on available-for-sale securities(82,668)

Prepaid pension cost

(1,542)

Deferred gains on real property(893)

Net deferred gains (losses) on derivatives under hedge
accounting(505)

Total deferred tax liabilities(85,610)Net deferred tax liabilities(67,142)(Per Share Information)
1. Stockholders’ equity per share:
2. Basic net income per share:¥2,189.57¥77.8423

(Reference)Statement of Trust Assets and Liabilities at the End of the 119th Fiscal Year(As of March 31, 2022)(Millions of yen)
AssetsAmountLiabilities

Due from banking account554

Cash and due from banks

512

Total

1,066

AmountMoney trusts

1,066

Total

1,066

Notes: 1. Japanese yen amounts are rounded down to the nearest million.
2. Joint trust assets under the management of other companies: ¥– million

Trusts with the principal indemnification agreement
Money trusts(Millions of yen)
AssetsAmountLiabilities

AmountDue from banking account554

Principal

554

Total

554

Total

554

Note: Japanese yen amounts are rounded down to the nearest million.

24

Consolidated Statement of Changes in Net Assets for the 119th Fiscal Year
(From April 1, 2021 to March 31, 2022)(Millions of yen)
Stockholders’ equity
Common stock Capital surplus
Balance at the
beginning of theaccounting period
Cumulative effects ofchanges in accounting
policies
Restated balance
Changes during theaccounting period
Dividends
Profit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Reversal of land
revaluation excess
Changes in items
other thanstockholders’ equity,net
Total changes during
the accounting period
Balance at the end of
the accounting period

20,94820,352Retainedearnings

Treasurystock

446,871(5,045)(167)
20,94820,352

Total
stockholders’equity483,127(167)

446,704(5,045)482,959(4,754)(4,754)

26,417

26,417

(62)

(638)

(638)

812

750

119

119

–

(62)

21,782

174

21,89420,94820,289468,487(4,871)

504,854(Millions of yen)
Accumulated other comprehensive income
Net deferred
Total
Valuation
Remeasurements
Landgains (losses) on
accumulateddifference onofrevaluation
derivatives
otheravailable-fordefined benefit
excessunder hedge
comprehensive
sale securities
plans
accounting
incomeBalance at the
beginning of theaccounting period
Cumulative effects ofchanges in accounting
policies
Restated balance
Changes during theaccounting period

222,338(374)

19,1788,279

249,421

Stockacquisitionrights

Noncontroll-ing
interests

Total net
assets273

8,418

741,240(167)

222,338(374)

19,1788,279

249,421

273

8,418

(4,754)

Dividends
Profit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Reversal of land
revaluation excess
Changes in items
other thanstockholders’ equity,net
Total changes during
the accounting period
Balance at the end of
the accounting period

741,073

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

731,79825

Policy on Preparation of Consolidated Financial Statements
Subsidiaries, subsidiary corporations, etc., and affiliated corporations, etc. are defined based on Article 2,
Paragraph 8 of the Banking Act and Article 4-2 of the Order for Enforcement of the Banking Act.
1 Scope of consolidation(1) Consolidated subsidiaries and subsidiary corporations, etc.: 16 companies
Company names
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.
(2) Non-consolidated subsidiaries and subsidiary corporations, etc.: two (2) companies
Company names
Iyogin-Ehime University Originated Venture Support Fund Investment Business Limited Partnership
Iyo Evergreen Business Succession Support Fund II Investment Business Limited Partnership
Non-consolidated subsidiaries and subsidiary corporations, etc. are excluded from the scope of
consolidation because their assets, ordinary income, net income (proportional amount of equity),
retained earnings (proportional amount of equity), and total other comprehensive income (proportionalamount of equity) are immaterial to the extent that does not hinder a reasonable judgment on financial
position and operating results of the corporate group.
2 Application of equity method(1) Non-consolidated subsidiaries and subsidiary corporations, etc. accounted for by the equity method: Not
applicable.
(2) Affiliated corporations, etc. accounted for by the equity method: Not applicable.
(3) Non-consolidated subsidiaries and subsidiary corporations, etc. not accounted for by the equity method:
two (2) companies
Company names
Iyogin-Ehime University Originated Venture Support Fund Investment Business Limited Partnership
Iyo Evergreen Business Succession Support Fund II Investment Business Limited Partnership(4) Affiliated corporations, etc. not accounted for by the equity method: four (4) companies
Company names
Iyogin REVIC Investments Company Limited
Shikoku Alliance Capital Co., Ltd
Ozu Town Creation Fund
Shikoku Brand Co., Ltd.
Non-consolidated subsidiaries and subsidiary corporations, etc., and affiliated corporations, etc. notaccounted for by the equity method are excluded from the scope of the equity method because their net
income (proportional amount of equity), retained earnings (proportional amount of equity), total othercomprehensive income (proportional amount of equity), and other items do not significantly affect theconsolidated financial statements if they are excluded from the scope of the equity method.

26

Notes to Consolidated Financial Statements
Japanese yen amounts are rounded down to the nearest million.
Accounting Policies
1. Valuation basis and method for trading account securities
Trading account securities are stated at fair market value, and the cost of trading account securities sold iscomputed using the moving average method.
2. Valuation basis and method for securities(1) Held-to-maturity debt securities are stated at amortized cost (on a straight-line basis) using the moving
average method. Equity securities of affiliated corporations, etc. not accounted for by the equity
method are stated at cost using the moving average method. Available-for-sale securities are stated atfair value, and the cost of available-for-sale securities sold is computed using the moving averagemethod. Note that, however, equity and other securities without fair market value are stated at costusing the moving average method.
Valuation difference on available-for-sale securities is recognized directly in net assets.
(2) Securities included in the money held in trust account are treated in the same manner as the securities
mentioned in 1. and 2. (1) above.
3. Valuation basis and method for derivative transactions
Derivative transactions are valued at fair value.
4. Depreciation/amortization methods for fixed assets(1) Tangible fixed assets (excluding lease assets)
Tangible fixed assets are depreciated using the declining balance method. However, buildings acquired
on and after April 1, 1998 (excluding accompanying facilities) and accompanying facilities andstructures acquired on or after April 1, 2016 are depreciated using the straight-line method.
The primary useful lives of these assets are as follows:
Buildings:
15 to 40 years
Others:5 to 10 years(2) Intangible fixed assets (excluding lease assets)
Intangible fixed assets are amortized using the straight-line method. Internal use software costs areamortized over the period available (mainly five years) determined by the Bank and its consolidated
subsidiaries and subsidiary corporations, etc.
(3) Lease assets
Lease assets included in “Tangible fixed assets” or “Intangible fixed assets” under finance leases thatare not deemed to transfer ownership of the lease property to the lessee are depreciated or amortizedusing the straight-line method over the lease term. In cases in which there is a residual value guarantee
under the lease contract, the residual value is the guaranteed amount. In other cases, it is deemed to bezero.
5. Recognition of reserve for loan losses
The Bank records reserve for loan losses in accordance with the prescribed write-off and reserve criteria.
For loans to debtors who are undergoing bankruptcy or business failure through legal proceedings such as
special liquidation (“bankrupt borrowers”), or who are in a similar financial condition (“substantiallybankrupt borrowers”), the reserve for loan losses is provided at the full book value of such loans after
deducting the amount of direct write-offs (as defined in the proviso below), net of the expected amount ofrecoveries from the disposable security and guarantees. For loans to debtors who are not yet legallybankrupt but deemed to have a high probability of becoming bankrupt (“potentially bankrupt borrowers”),
the reserve for loan losses is provided for the amount deemed necessary based on an overall solvency
assessment performed for the amount of loans, net of the expected amount of recoveries from thedisposable security and guarantees.
For loans, other than to bankrupt borrowers, substantially bankrupt borrowers, and potentially bankrupt
borrowers, that have been restructured due to the COVID-19 pandemic or for debtors in specific industries
heavily affected by the pandemic, the reserve for loan losses is provided for the amount of loans, net of the
expected amount of recoveries from the disposable security and guarantees, multiplied by a certain ratio of
the remaining amount.
With regard to other loans, the Bank principally records the reserve for loan losses at the amount of
estimated losses for the next one year or for the next three years. The estimated losses are determined by
calculating rates of loss based on the average actual loan-loss ratios for certain past periods derived from
actual loan-loss experience for one year or three years and making necessary adjustments.
All loans are assessed by business departments in accordance with internal rules for self-assessment of27

assets. Subsequently, the Credit Administration Department, which is independent from these departments,
audits such assessments.
For secured or guaranteed loans to bankrupt borrowers and substantially bankrupt borrowers, the estimateduncollectible amount, determined by deducting an amount considered recoverable from the disposable
security and guarantees from the loan amount, is directly written off from the loan amount. The estimateduncollectible amount was ¥20,345 million.
For reserve for loan losses to consolidated subsidiaries and subsidiary corporations, etc., normal loans areprovided in the amount considered necessary in light of the past loan loss ratio, etc. Meanwhile, certain
loans such as doubtful loans are provided in the expected recoverable amount according to each loan’srecoverability.
6. Recognition of accrued employees’ bonuses
Accrued employees’ bonuses are provided for the future payment of employees’ bonuses based on theestimated amounts of the future payments that are attributed to the current fiscal year.
7. Recognition of reserve for losses on repayment of dormant bank accounts
Reserve for losses on repayment of dormant bank accounts is provided in connection with inactive bankaccounts 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 amount based on historicalreimbursement experience.
8. Recognition of reserve for contingent losses
Reserve for contingent losses is maintained to provide against possible losses from contingencies which
are not covered by other specific reserves. The amount of reserve is based on an estimate of the amount ofpossible future losses.
9. Recognition of reserve for share-based payments
Reserve for share-based payments is provided for the estimated amount of share benefit obligations at theend of the current fiscal year in order to prepare for delivery of the Bank’s shares to its Directors(excluding Directors Serving as Audit and Supervisory Committee Members) and Executive Officers
under the internal share delivery regulations.
10. Recognition of reserve under special laws
Reserve under special laws is provided for contingent liabilities from financial instruments and exchange.
This is a reserve pursuant to Article 46-5 of the Financial Instruments and Exchange Act and Article 175 ofCabinet Office Ordinance on the Financial Instruments Business to indemnify losses incurred inconnection with the purchase and sale of securities and derivatives and other financial related transactions.
11. Accounting method for retirement benefits
In calculating retirement benefit obligations, the benefit formula basis is used to attribute the projectedamount of retirement benefits to periods up to the end of the current fiscal year. Prior service cost andactuarial differences are amortized as follows:
Prior service cost is amortized using the straight-line method over a certain
Prior service cost:
number of years (10 years) within the average remaining service years of
employees at the time of recognition.
Actuarial differences are amortized on a pro-rata basis using the straightline method over a certain number of years (10 years) within the average
Actuarial differences:remaining service years of employees from the fiscal year following therespective fiscal year of recognition.
Certain consolidated subsidiaries and subsidiary corporations, etc. use a simplified method to calculate net
defined benefit liability and retirement benefit cost. This simplified method assumes the Bank’s retirement
benefit obligations to be equivalent to the benefits that would be payable upon the voluntary retirement of
employees at the fiscal year-end.
12. Translation of foreign currency assets and liabilities into Japanese yen
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.
Foreign currency assets and liabilities of the consolidated subsidiaries and subsidiary corporations, etc. aretranslated into yen at the rates prevailing at the balance sheet date and other dates for respective entities.
13. Recognition of significant revenue and expenses(1) Recognition of revenue from contracts with customers
Revenue from contracts with customers is primarily received as consideration for the provision ofservices incidental to, among other services, deposit and lending services, exchange services, andsecurities-related services. Revenue is recognized upon the transfer of promised goods or services
through the provision of services to customers in an amount that reflects the consideration to which
the Bank expects to be entitled in exchange for those goods or services.
28

(2) Recognition of revenue related to finance lease transactions
Revenue and cost of sales are recognized upon the receipt of lease charges.
(3) Recognition of revenue related to operating lease transactions
Lease charges corresponding to lease periods are recognized on the basis of monthly lease charges tobe received under lease contracts.
14. Significant hedge accounting methods(1) Hedge against 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, “Accounting and Auditing Treatment of Accounting Standards for
Financial Instruments in Banking Industry.” The effectiveness of hedges that offset market fluctuations
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 swap
transactions, in the same maturity bucket.
(2) Hedge against fluctuation in foreign exchange rates
The Bank applies the deferred method of hedge accounting to hedge foreign exchange risk associatedwith various foreign currency-denominated financial assets and liabilities as stipulated in JICPA
Industry-specific Committees Guidance No. 25, October 8, 2020, “Treatment of Accounting and
Auditing Concerning Accounting for Foreign Currency Transactions in the Banking Industry.” Theeffectiveness of the hedging currency swap transactions, exchange swap transactions, and similartransactions that hedge the foreign exchange risk of monetary claims and liabilities denominated inforeign currencies is assessed by comparing the foreign currency positions of the hedged monetaryclaims and liabilities with those of the 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 and forward foreign exchange
contracts payable exceeds the acquisition costs of the hedged securities in foreign currency.
15. Application of consolidated tax payment system
The Bank and its certain consolidated subsidiaries have adopted a consolidated 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.

29Changes in Accounting Policies(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 from the 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 amountthat reflects the consideration to which 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.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Bank has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July4, 2019; hereinafter the “Fair Value Measurement Standard”) and other standards from the beginning of thecurrent fiscal year. In accordance with Paragraph 8 of the Fair Value Measurement Standard, the Bank hasrevised its fair value adjustment method used to determine the fair value of derivative transactions tomaximize the use of relevant observable inputs estimated from derivatives and other instruments traded in themarket. This revision comes in line with the application of the Fair Value Measurement Standard and otherstandards. In accordance with the transitional treatment provided for in the proviso to 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 were reflected in retained earnings at the beginning of thecurrent 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.
Significant Accounting Estimates
The followings are items that were recognized in the consolidated financial statements for the current fiscal
year based on accounting estimates and may have a significant impact on the consolidated financial statements
for the following fiscal year.
(Reserve for Loan Losses)
1. Amount recognized in the consolidated financial statements for the current fiscal year
Reserve for loan losses: ¥37,600 million
Of which, the amount recognized due to the COVID-19 pandemic was ¥7,310 million.
2. Information that contributes to understanding significant accounting estimates for identified items(1) Calculation method
The details for the calculation method for reserve for loan losses are stated in “Accounting Policies, 5.
Recognition of reserve for loan losses.”(2) Key assumptions
The main assumption is “credit risk of loans in determining debtor classification.” The “credit risk ofloans in determining debtor classification” was determined by evaluating the repayment capacity ofeach debtor based on its financial condition, cash flow, profitability, etc.
In addition, for certain debtors of loans that have been restructured due to the COVID-19 pandemic orfor debtors in specific industries heavily affected by the pandemic, it was assumed that the probabilityof deterioration in their future financial condition, cash flow, profitability, etc. would be higher thanother debtors and that the classification of certain debtors would be deteriorated.
(3) The effect on the next year’s consolidated financial statements
Changes for the assumptions used for making initial estimates due to the inflection in the performanceof individual debtors or the impact of the spread of COVID-19 could have a significant effect onreserve for loan losses in the consolidated financial statements for the following fiscal year.

30Additional Information(Share-based Payment System using the Trust)
The Bank has introduced a share-based payment system using a trust for its Directors (excluding Directors
Serving as Audit and Supervisory Committee Members) and Executive Officers with the aim of raisingawareness 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 the Bank.
In accordance with internal share delivery regulations set forth by the Board of Directors of the Bank, theBank grants points to its Directors (excluding Directors Serving as Audit and Supervisory Committee
Members) and Executive Officers. At the time of retirement, shares of the Bank and money will bedelivered in accordance with the points through the trust.
2. Shares of the Bank held by the trust(1) Shares of the Bank held by the trust are recorded as treasury stock in stockholders’ equity at the bookvalue in the trust.
(2) The book value in the trust was ¥781 million.
(3) The number of shares of the Bank held by the trust was 1,186 thousand shares.

31Notes(Notes to Consolidated Balance Sheet)
1. The amounts of loans disclosed under the Banking Act and the Act on Emergency Measures for the
Revitalization of the Financial Functions are as described below. These loans include corporate bonds
recorded under “Securities”(limited to corporate bonds for which the payment of principal and interest iswholly or partially guaranteed and which were issued through private placement of securities as defined in
Article 2, Paragraph 3 of the Financial Instruments and Exchange Act), loans and foreign exchange, andaccrued interest, suspense payments and customers’ liabilities for acceptances and guarantees recorded
under “Other assets,” as well as securities if the Bank lent such securities which are required to bedisclosed in notes to its consolidated balance sheet (they are limited to loans for use or lending under rental
contract).
Bankrupt and quasi-bankrupt loans:¥1,980 million

Doubtful loans:¥63,388 million

Substandard loans:¥23,780 million

Loans overdue three months or more:¥2,076 million

Restructured loans:¥21,704 million

Subtotal:¥89,148 million

Normal loans:¥5,257,437 million

Total:¥5,346,586 million

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 be recovered
under the contract, excluding bankrupt and quasi-bankrupt loans.
Loans overdue three months or more are loans whose principal and/or interest payment 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 grant certain concessions favorable to thedebtors, such as reduced interest rates or deferral or waiver of interest and/or principal payments to support
or financially rehabilitate such debtors, excluding bankrupt and quasi-bankrupt loans, doubtful loans, andloans overdue three months or more.
Normal loans are loans that do not fall under the categories of bankrupt and quasi-bankrupt loans, doubtful
loans, loans overdue three months or more, or restructured loans, and where the debtors have no problem
with their financial position or operating results.
The above amounts of loans are before the deduction of reserve for loan losses.
(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) on March 31,
2022, the classification of “risk management loans” required to be disclosed under the Banking Act ispresented in accordance with the classification of loans to be disclosed defined in the Act on Emergency
Measures for the Revitalization of the Financial Functions.
2. Bills discounted are accounted for as financing transactions in accordance with JICPA Industry-specificCommittees Guidance No. 24, March 17, 2022, “Accounting and Auditing Treatment of AccountingStandards for Financial Instruments in Banking Industry.” Accordingly, the Bank has the right to sell or(re)pledge the commercial bills and purchased foreign exchange bills obtained as a result of discounting
without restrictions. The face value of these bills discounted was ¥13,719 million.

32

3. Assets pledged as collateral were as follows:
Assets pledged as collateral
Securities:¥573,692 million

Loans:
Liabilities secured by pledged assets
Deposits:

4.

5

6.
7.
8.
9.

¥682,501 million¥26,345 million

Payables under repurchase agreements:¥74,232 million

Payables under securities lending transactions:¥139,898 million

Borrowed money:¥736,356 million
In addition to the above, assets pledged as collateral for exchange settlement and other transactions include
securities of ¥406 million and other assets of ¥35,000 million.
Other assets include initial margins of futures markets of ¥2,612 million, cash collateral paid for financial
instruments of ¥35,983 million, guarantees of ¥72 million, and security deposits of ¥295 million.
Overdraft facility agreements and commitment line agreements related to loans are binding agreements
under which the Bank is obliged to lend funds up to certain limits agreed to in advance upon thecustomer’s request. The Bank will lend 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
balance related to these loan agreements amounted to ¥1,270,918 million. Of this amount, ¥1,115,276
million was related to loans in which the term 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 the future cash flows of the Bank and its
consolidated subsidiaries and subsidiary corporations, etc. Most of these loan agreements include
conditions which allow the Bank and its consolidated subsidiaries and subsidiary corporations, etc. either
to decline the request for a loan draw-down or reduce the agreed limit when there is cause to do so, such as
when there is a change in the financial condition or when it is necessary to protect the Bank’s credit. The
Bank takes various measures to protect its credit, including having the obligor pledge collateral in the formof real estate, securities, etc. upon signing the loan agreement, or, after the agreement conclusion,monitoring an obligor’s financial condition, etc. in accordance with the Bank’s established internal
procedures at regular intervals to review the current agreement if necessary.
In accordance with the Act on Revaluation of Land (Act No. 34, March 31, 1998; hereinafter the “Act”),
the Bank revalued land used in the ordinary course of business. As for revaluation differences, thevaluation excess, net of deferred taxes, is recorded as “Land revaluation excess” under net assets whereas
the tax corresponding to the revaluation excess is recorded as “Deferred taxes on revaluation excess” underliabilities.
Date of revaluation:
March 31, 1998
The land was revalued primarily based on
posted land prices stipulated in Article 2, Item
1 of the Order for Enforcement of the Act on
Revaluation (Cabinet Order No. 119, March
Revaluation method stipulated in Article 3,
31, 1998; hereinafter the “Order”) andParagraph 3 of the Act:
standard benchmark land prices stipulated in
Article 2, Item 2 of the Order with reasonableadjustments for land shape and timing of theassessment.
Difference between the total fair value of land
used in the ordinary course of businessrevalued pursuant to Article 10 of the Order at¥13,271 million
the end of current fiscal year and the total bookvalue after revaluation:
Accumulated depreciation of tangible fixed assets:¥55,193 million
Deferred gains on tangible fixed assets not recognized for tax purposes: ¥8,224 million
The Bank’s guarantee obligations for corporate bonds included in “Securities” issued through private
placement of securities as defined in Article 2, Paragraph 3 of the Financial Instruments and Exchange Act
amounted to ¥61,743 million.
Principal amount of trusts with the principal indemnification agreement: ¥554 million
33

(Notes to Consolidated Statement of Income)
Other expenses include loans and bills discounted written off of ¥16 million, and equity and other securities
written off of ¥274 million.
(Notes to Consolidated Statement of Changes in Net Assets)
1. Type and number of shares issued and treasury stock(Thousands of shares)
Number of sharesat the beginning of
the accounting
periodIncrease in numberof shares during
the accounting
periodDecrease in
number of shares
during theaccounting period

Number of sharesat the end of theaccounting period

Common stock

323,775––

323,775

Total

323,775––

323,775

7,104

1,001

1,142

6,962

RemarkShares issued

Treasury stock
Common stock

Notes 1, 2, 3

Total
7,104
1,001
1,142
6,962
Notes: 1. The increase in number of treasury stock (1,001 thousand shares) was due to the purchase of treasury stock by thetrust 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 treasury stock (1,142 thousand shares) was due to the disposal of treasury stock in linewith a third-party allotment of newly issued shares to the trust for the share-based payment system (1,000 thousand
shares), the delivered shares of the Bank under the share-based payment system (61 thousand shares) and theexercise of stock acquisition rights (81 thousand shares).
3. The numbers of common shares of treasury stock at the beginning and the end of the current fiscal year include theBank’s shares held by the trust for the share-based payment system (247 thousand shares and 1,186 thousand
shares, respectively).

2. Stock acquisition rights

Classification

The Bank

Details of stockacquisitionrightsType ofsharessubject tostockacquisitionrightsNumber of shares subject tostock acquisition rights (shares)
Beginningbalance asof April 1,
2021

Stock acquisitionrights as stock
options

Total

Fiscal year ended
March 31, 2022
Increase

Decrease

Closingbalanceas ofMarch
31, 2022

Closingbalanceas ofMarch
31, 2022(Millionsof yen)

–

208

–

208

Remark

3. Dividends(1) Dividends paid during the fiscal year ended March 31, 2022
Date ofresolution
Directors’
meeting held on
May 14, 2021
Directors’
meeting held on
November 12,
2021
Total

Type of shares

Total amount ofdividends (Millionsof yen)Cash dividends
per share (Yen)Common stock¥2,218 million¥7.00

Common stock¥2,535 million¥8.00 September 30, 2021 December 10, 2021

Record date

Effective date

March 31, 2021

June 8, 2021

¥4,754 million

Notes: 1. The total amount of dividends resolved at the Directors’ meeting held on May 14, 2021 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 resolved at the Directors’ meeting held on November 12, 2021 includes ¥1 million in
dividends to the Bank’s shares held by the Trust for the share-based payment system.

34

(2) Dividends whose record date is attributable to the year ended March 31, 2022 but which became
effective after March 31, 2022
Date of resolution

Type of shares

Total amount ofdividends

Source ofdividends

Cash dividends
per share

Record date

Effective dateDirectors’ meeting
held on May 13,
Common stock ¥2,543 million Retained earnings¥8.00 March 31, 2022 June 9, 2022
2022
Note: The total amount of dividends includes ¥9 million in dividends to the Bank’s shares held by the Trust for the sharebased payment system.

(Notes to Financial Instruments)
1. Financial instruments(1) Policy on financial instruments
The Group engages in the financial services business including leasing services, centered on deposit,
lending, and other banking services. Accordingly, the Bank holds financial assets and liabilities that are
subject to interest rate fluctuations and undertakes asset and liability management (ALM) in order tocurb 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 Group consist mainly of loans to domestic customers, which are subject tocredit risks arising from a nonfulfillment of a contract by borrowers. Also, the Bank holds securities
that are mainly stocks, bonds and mutual funds for investment, management or trading purposes. The
portion of the trading purpose is limited. They are subject to the issuer’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 and foreign exchange swaps to avoid the risk.
Derivative transactions include interest rate swaps carried on as part of its ALM. The Bank applies
hedge accounting to the interest on loans to hedge interest rate risks regarding the interest rate swaps ashedge instruments. The effectiveness is ensured by maintaining a balance of hedge instruments that
does not exceed the balance of the hedged items, which are grouped by incidence and remaining
period.
Other transactions not qualifying for hedge accounting expose the Bank to foreign exchange andinterest rate risks.
(3) Risk management system for financial products(i) Credit risk management
The Bank prescribes its credit risk management policy in its “Risk Management Plan,” which is issued
by the Board of Directors biannually. In particular, the Bank diversifies credit risk by ensuring thatcredit granted is not overconcentrated in certain customers, substantially identical groups or certain
industries. The Bank periodically manages and analyzes the credit conditions classified by internalratings, business area and industry. The Bank strives to optimize its credit portfolio by promoting
effective credit risk management. Feedback regarding credit risk management is reported to the Boardof Directors by credit risk items periodically.
The Bank stipulates the Risk Management Division (RMD) as a credit risk management division whichis completely independent of sales-related divisions. With setting the Internal Rating System as its corefunction of the credit risk management, the Bank has established the system standards to utilize for
credit management and business operations tailored to each customer. The Risk Management Division
is responsible for designing the Internal Rating System, setting and revising the standards, examining
the system, supervising the operations, and other activities. This function is designed to operate thesystem appropriately and ensure accurate and consistent ratings.
Meanwhile, credit-related divisions engage in individual credit assessment and other activities. While
ensuring the independence of assessments separately from business promotion divisions, thesedivisions comply with basic principles of loans and conduct a strict and comprehensive assessment inconsideration of each customer’s financial position, purpose for the loan, and ability to repay. Creditrelated divisions adopt the system of comprising three center divisions: the Credit Division responsible
for planning credit-related services, assessing customers’ loans, offering management consultations on
corporate rehabilitation, managing problem loans, assessing collaterals, and 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. In self-assessment,
assets are initially assessed by 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.
35

The credit granted by the consolidated subsidiaries is managed for each customer along with the credit
granted by the Bank.
RMD also manages the credit risk of issuers and the counterparty risk of derivative transactions bymonitoring and periodically evaluating credit information and market prices.
(ii) Market risk management
In order to properly manage market risk and maintain the Bank’s soundness and profitability, the Bank
has established a comprehensive risk management structure centered on the ALM Committee.
The ALM Committee uses various measures such as the gap method, market value analysis, periodic
income/loss simulation and the Value at Risk (VaR) method to control risk in a timely and appropriatemanner. In addition to risk analysis through these methods, the ALM Committee analyzes the
profitability structure and forecasts the economic environment and market trends. Based on thisanalysis, the committee engages in basic policies on asset management and financing, risk
management plans, and hedging strategies. In the Market Transaction Division, the Risk Management
Division is established independently from the divisions responsible for executing transactions andadministration work such as settlement, resulting in cross-checking between these 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 periodically.
(Quantitative Information on Market Risk)
The Bank measures market risk based on the VaR method. The variance-covariance 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 rate risk. Major financial instruments
affected by interest rate risk are loans and bills discounted, bonds classified as “Available-for-salesecurities” under “Securities,” deposits, and borrowed money, as well as interest rate swaps and interest
rate caps under “Derivative transactions.”
As of the end of the current fiscal year, the quantity of market risk (expected loss), which included
equity risk and interest rate risk, amounted to ¥174.0 billion.
The Bank confirms the validity of the measurement model by periodically performing back-testing
which compares VaR with actual fluctuations in profit and loss during the observation period.
However, VaR, the quantity of market risk, which is statistically measured with historical market
fluctuations, may not reflect the risk under drastic changes in the market.
(iii) Financing-related liquidity risk management
The Group manages liquidity risks through ALM by adjusting the duration of funds raised inconsideration of the market environment.
(4) Supplementary explanation of matters related to fair values of financial instruments and others
As the fair values of financial instruments are estimated on certain assumptions, the values may differ
when other assumptions are applied.

36

2. Fair values of financial instruments
The following table summarizes consolidated balance sheet amounts, fair values and any differences
between them as of March 31, 2022. Equity and other securities without fair market value and investmentsin partnerships, etc. were excluded from the table below (see Note 1). Notes are omitted for cash and duefrom banks, call money and bills sold, payables under repurchase agreements, and payables under
securities lending transactions because their fair market values approximate the corresponding book values
due to their nature of short-term settlements.
(Millions of yen)
Consolidatedbalance sheet
amount6,211(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)
Total Assets(1) Deposits(2) Negotiable certificates of deposit(3) Borrowed money

Fair value

Difference

6,211

–

525
5,767

525
5,767

–
–

1,660,146
5,046,997(35,923)

1,660,146
4,953,866–

5,011,073

4,953,866(57,206)

6,683,724

6,626,517(57,206)

6,021,850
604,275
750,3026,021,381
604,275
749,978

(469)
(0)
(324)

Total Liabilities
7,376,428
7,375,634(793)
Derivative Transactions (*2)
Derivative transactions to which hedge accounting is not applied(7,533)(7,533)–
Derivative transactions to which hedge accounting is applied(18,844)(18,844)–(*3)
Total Derivative Transactions(26,378)(26,378)–(*1) General and specific reserves for loan losses relevant to loans and bills discounted are excluded.
(*2) Derivative transactions recorded in other assets and liabilities are presented as a lump sum. Net loans and debts that arise
from derivative transactions are presented on a net basis, and items whose amounts are debts on a net basis are presented
in parentheses.
(*3) They are interest rate swaps, etc. designated as hedging instruments to offset market fluctuations of loans and bills
discounted in hedged items. The Bank mainly adopts deferred hedges. The Bank applies the “Revised Practical Solution
on the Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR” (PITF No.40, March 17, 2022)
for these hedging relationships.
(*4) Immaterial items are omitted.
Note 1:

Consolidated balance sheet amounts of equity and other securities without fair market value and investments inpartnerships, etc. are described below, and are not included in “Available-for-sale securities” of the fair market value
information on financial instruments.
(Millions of yen)
Consolidated Balance sheet
amountEquity and other securities without fair market value (*1) (*2)

13,685Investments in partnerships, etc. (*3)

7,792(*1) Equity and other securities without fair market value include unlisted stocks, which are not included in the disclosure offair 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) An impairment loss of ¥66 million was recorded for unlisted stocks during the current fiscal year.
(*3) Investments in partnerships, etc. mainly include silent partnerships and investment partnerships. These items are notincluded in the disclosure of fair value in accordance with Paragraph 27 of the “Implementation Guidance on AccountingStandard for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019).

37

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 theobservability and materiality of inputs used to measure fair value.
Level 1 fair value:
Level 2 fair value:
Level 3 fair value:

Fair value measured using observable inputs, i.e. quoted prices in active
markets for assets or liabilities that are the subject of the measurement.
Fair value measured using observable inputs other than Level 1 inputs.
Fair value measured using unobservable inputs.

If multiple inputs that are significant to the fair value measurement are used, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.
(1) Financial instruments measured at fair value
As of March 31, 2022
(Millions of yen)
Fair value

Classification

Level 1
Level 2
Level 3
Total
Monetary claims purchased
–
–
2,157
2,157
Trading account securities
Trading securities
Japanese government bonds
525
–
–
525
Money held in trust
–
–
1,507
1,507
Securities:
Available-for-sale securities
Japanese government bonds
18,13081,845–99,975
Municipal bonds–
294,005–
294,005
Corporate bonds–
50,29562,393112,689
Equity securities
331,294449–
331,744
Others456,549
150,038
11,273617,861
Total Assets
806,499576,635
77,332
1,460,467
Derivative transactions
Interest rate-related derivatives
–
5,115
–
5,115
Currency-related derivatives–(31,492)–(31,492)
Bond-related derivatives––––
Credit derivatives
–
–
(0)
(0)
Total Derivative Transactions–(26,377)(0)(26,378)(*) The above table does not include investment trusts that applied the transitional treatment stipulated in Paragraph 26of 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.

(2) Financial instruments other than those measured at fair value
As of March 31, 2022
(Millions of yen)Classification
Monetary claims purchased
Money held in trust
Loans:
Total Assets
Deposits:
Negotiable certificates of deposit
Borrowed money:
Total Liabilities

Fair value
Level 1

Level 2
–
–
–
–
–
–
–
–

–
–
–
–
6,021,381
604,275
749,978
7,375,634

Level 3
4,054
4,260
4,953,866
4,962,181
–
–
–
–

Total
4,054
4,260
4,953,866
4,962,181
6,021,381
604,275
749,978
7,375,634

Note 1: A description of the valuation techniques and inputs used in the fair value measurements
AssetsMonetary claims purchased
Of monetary claims purchased, trustee beneficial rights are measured based on the price quoted bycorrespondent financial institutions, and are classified as Level 3 fair value based on the inputs used forthe quoted prices. Monetary claims purchased other than trustee beneficial rights are classified as Level 3
fair value. This is because their book value is considered as the fair value, taking into consideration thatsuch items fall under short contractual terms in nature and their fair value approximates the book value.
38

Trading account securities
Trading account securities are classified as Level 1 fair value because they are government bonds and use
unadjusted market prices in active markets.
Money held in trust
Of money held in trust, the components of trust property are measured based on the price quoted bycorrespondent financial institutions, and are classified as Level 3 fair value according to component levels.
Securities
Securities using unadjusted market prices in active markets are classified as Level 1 fair value. These
Level 1 securities mainly include 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 the proper 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 based on the price quoted bycorrespondent financial institutions, and are classified as Level 3 fair value based on the inputs used forthe quoted prices.
Loans and bills discounted
Loans and bills discounted with floating rates are classified as Level 3 fair value. This is because theirbook value is considered as the fair value, taking into account that the rates reflect the market rate in ashort period and that the fair value approximates the book value unless the borrower’s creditworthinesschanges significantly after the inception date. Meanwhile, loans and bills discounted with fixed rates areclassified as Level 3 fair value. This is because their fair value is measured as the present value,
discounting future cash flows arising from principals and interests at a rate that reflects the proper market
rate corresponding to the remaining period and credit risk based on the internal rating, and because these
discount rates are unobservable inputs. Loans and bills with short-term contractual terms (within one year)
are classified as Level 3 fair value because their fair value approximates the book value and such bookvalue 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. In the background, their fair value approximates theconsolidated balance sheet amount as of the consolidated balance sheet date less the reserve for loan losses
since the loan losses are calculated based on the estimated collectable 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. In the background,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.
Liabilities
Deposits and negotiable certificates of deposit
The fair value of demand deposits is considered the payable amount as of the consolidated balance sheet
date (the book value). In addition, the fair value of fixed-term deposits and negotiable certificates ofdeposit is calculated as the present value, discounting the future cash flow at a rate that reflects the propermarket rate corresponding to the remaining period and credit risk of the Bank. The fair value of deposits
with short contractual terms (within one year) is considered equal to the book value since the fair value
approximates the book value. These items are classified as Level 2 fair value.
Borrowed money
The fair value of borrowed money with a floating rate is considered equal to the book value because thefair values of these items approximate the book values, 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 andsubsidiary corporations, etc. has not changed significantly since the inception date. The fair value ofborrowed money with a fixed rate is calculated as the present value, discounting future cash flows for its
principals and interests at a rate that reflects the proper market rate corresponding to the remaining period
and credit risk of the Bank. These items are classified as Level 2 fair value.

39

Derivative transactions
Derivative transactions using unadjusted market prices in active markets are classified as Level 1 fairvalue, including bond futures.
However, as most derivative transactions are traded over the counter and their market prices are notannounced, their fair value is calculated using valuation techniques including the present value model andthe option pricing model. These valuation techniques mainly input interest rates, foreign exchange rates,
volatilities, and others. In addition, the valuation amount is adjusted based on the credit risks ofcounterparties and the Bank. If unobservable inputs are not used, or their impact is insignificant, thosederivative items are classified as Level 2 fair value, including interest rate swaps and forward exchange
contracts. If significant unobservable inputs are used, the items are classified as Level 3 fair value.
Note 2: Information on Level 3 fair value of the financial instruments that are recognized at fair value inthe consolidated balance sheet(1) Quantitative information on significant unobservable inputs (as of March 31, 2022)
Classification

Valuation techniqueSignificant
unobservable input

Range of inputs

Weighted average of
inputsDiscounted present value
methodDiscount rate

0.1%–16.8%

0.5%

Securities:
Corporate bonds(2) A reconciliation from the beginning balances to the ending balances and gains or losses on valuation offinancial 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)

Beginningbalance

Profit or loss or othercomprehensive income forthe period

Purchases,
sales,
Transferissuances,
into
RecognizedandRecognized
Level 3in othersettlements
in profit orcomprehensive
(net)
loss
incomeTransferout ofLevel 3Endingbalance(Millions of yen)
Gains or losses on
valuation of financial
assets and financial
liabilities held at theend of the reporting
period included in
profit or loss for theperiodMonetaryclaimspurchased

2,922

–

(11)

(753)

–

–

2,157

–

Money held in
trust

1,257

(85)

252

83

–

–

1,507

(85)

Corporatebonds

63,137

1

4

(749)

–

–

62,393–

Others12,583–(9)(1,300)––11,273

–

(2)

1

–

–

–

–

(0)

(0)

Securities:
Availablefor-salesecurities

Total
Derivative
Transactions
Creditderivatives(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 fairvalue obtained is measured using valid valuation techniques and inputs as well as whether they areclassified into an appropriate level of the fair value hierarchy. When using quoted prices obtained fromthird parties as fair values, the Bank verifies whether the prices are valid using appropriate methods,
such as confirming the valuation techniques and inputs used and comparing them with the fair value
40

estimated by the Bank.
(4) A narrative description of 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.
(Notes to Revenue Recognition)
Disaggregation of revenue from contracts with customers (as of March 31, 2022)(Millions of yen)
Reportable segments
Banking
Leasingbusinessbusiness

Total

Other

Total

Fees and commissions
Deposit and loan services
3,531
–
3,531
–
3,531
Foreign exchange services
3,226
–
3,226
–
3,226
Securities-related services
965
–
965
1,236
2,202
Other services
3,808
–
3,808
267
4,076
Ordinary income from contracts with customers
11,532–
11,532
1,503
13,036
Ordinary income from other items above
103,170
16,468
119,638
1,296
120,935
Ordinary income from external customers
114,702
16,468131,170
2,800
133,971
Notes: The “Other” category is a business segment not included in reportable segments, and represents information processing
entrustment and software development business and securities business.

(Per Share Information)
1. Stockholders’ equity per share: ¥2,286.75
2. Profit attributable to owners of parent per share:¥83.3941