Because it is a machine translation, it is notalways an accurate translation.

Update the Medium-Long Term Business Strategy
And summary of financial results for the fiscal year
ended March 31,2024

April 26, 2024

Contents
1. Summary of Business results
・Summary of Financial Results for the Fiscal Year Ended March 2024

4. Each strategy and material
4

2. Impact of the Noto Peninsula Earthquake on Our Finance and Initiatives for
Reconstruction
・Impact of the Noto Peninsula Earthquake and Initiatives for Reconstruction

6

3. Medium-to Long-Term Business Strategy Update～Towards enhancement corporate value ~・Target performance levels for the medium to long term
・Medium-to Long-Term Business Strategy 2024～Update～・Toward enhancement of corporate value～Analysis and evaluation of current situation～
・Toward enhancement of corporate value～Policies and Initiatives～
・Shareholder Returns
・Risk Asset Control
・Reduction of strategic shareholdings
・Promotion of Priority businesses
・New income engine
・Cost reduction in system and store strategy
・Major update of market operation strategy
・Advanced corporate governance・Disclosure & Communication
・Human Capital Initiatives
・Climate Change Initiatives

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

・Progress of Priority Businesses
・Integrated management of loans and Leasing
・Credit Cost Results and Future Projections
・Loans (Yield by segment)
・Impact of rising interest rates
・Progress in cashless payment
・Consulting for corporate customers
・Consulting for individual customers & Investment advisory
・Expansion of investment business・System strategy
・Human capital enhancement
・Environment-related figures
・Deposits and Loans by Segment
・Status of Securities Investment, Foreign Bonds and Multi-asset funds
・ROE and performance-linked compensation

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

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26
27
28
29
30
32
33
34
35
37
38
40
43

1. Summary of Business Results

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

Summary of Financial Results for the Fiscal Year Ended March 2024
(1) Summary of Profit and Loss
■ Hokkoku Financial Holdings Consolidated （Millions of yen)
FY03/23 FY03/24
change Rate of change■ Generalize

Ordinary revenue

84,74390,839

6,096

7.1%

Peninsula Earthquake Below the target (11.0 billion yen)

Ordinary income

16,046

14,461▲ 1,585▲9.8%

Net income*

8,741

9,055

314

3.5%

* Net income attributable to owners of the parent‣ Profit exceeded the results of the previous year, but due to the impact of the Noto

■ Summary
Overall priority businesses were slightly below plan.

■ Hokkoku Bank Non-consolidated（Millions of yen)change Rate of change

FY03/23

FY03/24

Ordinary revenue

72,10573,449

1,344

1.8%

Ordinary income

15,651

11,185▲ 4,466▲28.5%Net income

9,054

8,233

▲ 821

▲9.0%

Core business profit

9,677

6,162

▲ 3,515▲36.3%

While there were some improvements in yields on Business loans, further brush-up is needed foreach business.
Property expenses exceeded the plan for system investment expenses, but this is due to the inhouse production of the system ahead of schedule.
The company plans to continue to incur necessary expenses in the future.
Personnel expenses increased slightly due to a 150 million yen addition to performance-linked
stock compensation for employees in response to the earthquake disaster.
The securities portfolio was sold through the sale of foreign bonds using the proceeds from the(2) Equity Ratio

sale of strategic shareholdings.
Year EndedYear EndedYear Ended
March 31, 2022 March 31, 2023 March 31, 2024

Consolidated equity ratio

10.08%

10.14%

Reserves increased due to the Noto Peninsula earthquake, and disposal of non-performing loans
exceeded plan. (Detailed P.6)

10.37%

Unified international standard until the end of September 2022, domestic standard after the end of March 2023

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

4

2.Impact of the Noto Peninsula Earthquake on our finances

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

Impact of the Noto Peninsula Earthquake on our finances
・Credit status of each municipality
Suzu City

Wajima City
Noto Town
Anamizu Town
Shika Town
Nanao City
(Wakura Onsen)

Business Loans

Loans to individuals

Suzu City

Approx. 1.8 billion yen

Approx. 2.3 billion yen

Wajima City

Approx. 5.5 billion yen

Approx. 5.2 billion yen

Noto Town

Approx. 4.4 billion yen

Approx. 3.4 billion yen

Anamizu Town

Approx. 0.6 billion yen

Approx. 2.4 billion yen

Shika Town

Approx. 3.6 billion yen

Approx. 4.8 billion yen

Nanao City

Approx. 20.7 billion yen

Approx. 18.0 billion yen

818 borrowers/approx. 36.6 billion yen

6,378 borrowers/approx. 36.1 billion yen

Approx. 3%

Approx. 3%

Total
Percentage of total

・Impact on credit costs (FYE Mar. 2024)
・1.4 billion yen

Kanazawa City

For business loans, additional reserves are provided based on certain assumptions for loans to borrowers that are expected
to be affected in heavily damaged areas.
For loans to individuals (housing loans), additional reserves are provided based on the percentage of damage in each city andtown.

・Initiatives for Reconstruction
・Establishment of consultation counter, individual consultation in the district in charge, emergency loan support, etc.
・ Provide information and support for utilization of “Nariwai” subsidy (up to 1.5 billion yen)・ Support for the elimination of double loans through the establishment of the Noto Peninsula Earthquake Reconstruction
Assistance Fund (total amount: 10 billion yen)・Support for creative reconstruction through the establishment of the Okunoto SDGs Fund No. 2 (nicknamed "Noto Beyond
Reconstruction Fund," totaling 10 billion yen).
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

6

3. Medium-to Long-Term Business Strategy Update～Toward enhancement of corporate value ~HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

Target performance levels for the medium to long term
～ Future environmental forecasts and the level envisioned in the mid- to long-term based on the policy of the initiatives～(Major changes from last year)
Due to the Noto Peninsula earthquake, the plan for the last two years was revised downward from last year's plan.
On the other hand, by brushing up each business, the timing for achieving ROE 8% will be accelerated (March 2029).
(Main Interest Rate Scenario)
Assumes a 0.25% level increase in the policy rate over the next two years. 10-year government bond yield around 1%.

FY 2023
Actual

FY 2024（In 1 year）

FY 2026（In 3 years）

FY 2028（In 5 years）

FY 2033（In 10 years）

Ordinary Profit(consolidated)

14.5 billion yen

15.2 billion yen

21.2 billion yen

31.3 billion yen

45.7 billion yen

Profit (consolidated)

9.1 billion yen

10.2 billion yen

13.4 billion yen

20.7 billion yen

30.5 billion yen

Income from priority Businesses(Consolidated)

34.3 billion yen

39.1 billion yen

42.3 billion yen

55.3 billion yen

69.7 billion yen

4.1%

4.5%

5% or higher

8% or higher

8% or higher

5% or higher

8% or higher

8% or higher

Item

ROE (Consolidated)*※ ROE is calculated based on the amount of net income attributable to owners of the parent to Basel III core capital based on domestic banks.

[Reference: Based on shareholders' equity]
ROE (consolidated)

4.2%

4.6%

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

8

Medium-to Long-Term Business Strategy 2024～Update～
Measures for increasing corporate value

Achieve PBR ratio of 1x or more as soon as possible by enhancement ROE
and controlling cost of capital
1.

Toward enhancement of ROE・Shareholders' equity ratio: around 9% to 10% on a consolidated basis, total return ratio of 50% or more, andcontinuing share buybacks
・Promote priority businesses (finance, cashless, consulting Investment advisory, and investing)・Improve profitability in priority businesses and new fields by establishing new sophisticated companies
・Accelerate reduction of non-personnel expenses in traditional banking business

2.

Capital cost containment

・Upgrading Governance, Dialogue, Information Disclosure, Human Capital Initiatives, and Climate Change
Initiatives
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9

Toward enhancement of corporate value～Analysis and evaluation of current situation～■PBR remained at a low level below 1x.
■The reason for the low PBR is that ROE is below the cost-of-capital.
■Changes in PBR■ROE Trends and Costs of Equity
10%

1.4

9%

8%

1.2

Capital cost 6%*1-9%*2 Approx.

7%
1.0
6%
0.8

5%

0.6

0.51

4%

3%
0.4

TSE Standard ROE

2%

Our standard ROE ※3

0.2
1%

0.0

0%
2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/32023/32024/3

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/32023/32024/3※Calculated by our group based on 1 CAPM (5.7%)※2 The inverse of the expected PER at the end of March (9.4 percent), assuming a growth rate of 0 percent※3 ROE is calculated based on the amount of net income attributable to owners of the parent to Basel III core capital based on domestic banks

PBR

ROE

PER
= 1 ÷ (cost of equity-earnings growth rate)

ROE is below our cost-of-capital target
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10

Toward increasing corporate value-Policies and Initiatives■Aim to improve corporate value (PBR) by improving ROE with an emphasis on stockholders' equity andthe quality of earnings, and by implementing measures to control capital costs by enhancing
governance/information disclosure, etc.
Shareholder Returns

P12

Risk Asset Control

P13

Reduction of strategic shareholdings

P14

Promote priority businesses

P15

New income engine

P16

Cost reduction in system and store strategy

P17

Major update of market operation strategy

P18

Advanced corporate governance

P19

Disclosure & Communication

P20

Capital control
ROE

Improving the ofProfitsQuality

PER
Capital cost containment

Human Capital Initiatives

P21

Responding to Climate Change

P22

PBR

(1 ÷ (cost of equity minus earnings growth rate))

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11

Shareholder Returns

Capital control■ Maintain a total return ratio of 50% or more (at the same time as reinforcing capital to take on further risks)■ Purchase of treasury stock up to the end of March 2024: Approx. 9.9 billion yen for 2 million shares■ Scheduled for the year ending March 31, 2025, to pay 3.0 billion yen per share for the purchase of its own
stock and 120 yen per share (an increase of 10 yen).

Item

FY 2023
Actual

FY 2024

Total return ratio

138.3%

56.7%

Total dividends

2.6 Billion yen

2.7 Billion yen

Purchase of treasury stock

9.9 Billion yen

3.0 Billion yen

Cost of capital

FY 2026（In 3 year）

FY 2028（In 5 years）

FY 2033（In 10 years）

Total return ratio: 50% or more

The Company will periodically review and implement sharebuybacks and increases in dividends in light of its capital adequacy
ratio and strategic investment opportunities.
Approx. 6% (our calculated value)

4.1%

4.5%

5% or higher

7% or higher

8% or higher

Core capital

220.9 billion yen

224.1 billion yen

232.5 billion yen

255.5 billion yen

330.0 billion yen

Risk assets

2,129.3 billion yen

2,133.1 billion yen

2,374.0 billion yen

2,550.7 billion yen

3,000.0 billion yen

Equity ratio

10.4%

10.5%

0.5

0.6x or above

ROE

PBR

Around 9% to 10%
0.7x or above

1.0x or above

1.0x or above

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

12

Risk Asset Control

Capital control■The guideline for the equity ratio is around 9% to 10% (financial leverage* approx. 10 times) *Inverse of the equity
ratio■Traditional lending remains current, and investment in securities management and equity increased.
■In preparation for increasing risk-weighted assets, such as the finalization of the Basel III, we plan to conduct
shareholder returns in a somewhat restrained manner.
Core Capital Plan and Allowable Risk Assets

Core capital

Risk asset plan(￥ bn)FY 2023

FY 2024

FY 2026

FY 2028

220.9

224.1

232.5

255.5

(￥ bn)FY 2023

Financial leverage: Approx. 10 times
Acceptable
Risk assets

2,100.0～2,300.0

2,100.0～2,300.0

2,200.0～2,400.0

FY 2024

FY 2026

FY 2028

2,400.0～2,600.0

11.0%

Overall

2,129.3

2,133.1

2,374.02,550.7

10.5%

Operation ofnegotiablesecurities

202.1

279.8

415.2

550.7

Equity investment

44.1

60.1

106.8

129.6

Loans

1,665.1

1,598.2

1,642.0

1,660.3

Other

218.0

195.0

210.0

210.0

10.0%

9.5%

9.0%

8.5%
FYE March 2024

FYE March 2025

FYE March 2027

Shareholders' equity ratio (if core capital remained at FY3/24 level)

FYE March 2029
Equity ratio (plan)

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13

Reduction of strategic shares helds

Capital control■ Plan to halve the book value of investments by the end of March 2025 (compared to 2022.3) achieved ahead of schedule■ Continue to work toward zero-balance holdings and deepen dialogue with business partners' capital policies andincreasing corporate value■ Strengthen management of net investment-purpose stocks with careful selection of investment targets, such as profitability
Balance of Strategic Shareholdings (￥ bn)
1,000

800

30%

Investment amount

23.0%

Appraisal profit or loss
Market value of strategic shares helds/Consolidated net assets

200

23.3%
20%

66.0

600

400

21.0%

38.0

27.9
31.7

28.6

9.6%

49.3
40.4
28.2

28.4

29.7

41.1

22.0

20.0

2019.32020.3

38.6

41.0

18.1

13.8

11.4

17.5
6.8

2021.32022.32023.32024.3

32.1

27.3

60.1

52.6

54.1

46.7

2021.32022.32023.32024.302013.32016.32017.32018.310%0%Balance of Net Investment Shares (￥ bn)
Net investment book value

Appraisal profit or loss

1,000

36.3
750

500

4.2

250

48.3

0

12.7

21.3

60.0

60.0

65.8

2017.32018.32019.3

22.0

66.0

47.7

57.3

7.9
2013.32016.32020.3

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14

Promote priority businesses

Improving the Quality of Profits■To execute strategies that enhance synergies through the formulation of company-wide marketing strategies■Achieve a cashless ratio of 90% or more in each region by promoting digital cards and stable coins(￥ bn)FY 2023
Item

Planning

Actual

FY 2024

FY 2026

FY 2028

FY 2033

Achieveme
nt ratePlanning

Planning

Planning

Planning

35.1

34.3

98%

39.1

42.3

55.3

69.7

Business loans and Leasing(P25～28)

14.8

14.4

97%

14.6

16.9

18.2

20.5

Cashless (P29)

1.7

1.5

88%

1.6

2.2

3.1

7.2

Consulting (P30～31)

2.0

1.2

60%

2.1

3.1

3.8

5.1

Investment advisory (P32)

0.2

0.3

150%

0.5

1.0

1.2

1.6

Investment-fund group (P33)

0.4

1.0

25%

2.8

2.2

8.6

11.3

Market-based management(P18, 40-42)

16.1

16.8

104%

17.4

16.9

20.4

24.0

Key business

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15

New profit engine

Improving the Quality of Profits■Improve profitability in new areas such as expansion into other industries and system sales to the same

industries through the establishment of a new advanced company (under consideration).

■Ishikawa Prefecture's redesign and growth strategy support for advanced and distinctive quality regions<Existing Business Domains>
・Deposits, foreign exchange, loans and Leasing<New Business Concept>
System construction and advanced IT Human resource development support, system sales(including in other industries)→Managed services (maintenance, operation, and enhancement development)・Market management
・Consulting→Develop platforms for SaaS business(Accounting System, Integrated Subsystem, Personals & internet banking for corporate clients
Stable coins, digital cards, Kintone apps, and other apps)

・Investment advisory*In collaboration with major system partners who share common values

・CashlessCreating New Revitalization and Attractiveness in the Region

・Investment fundKomatsu Arena Project/Utilization of Real Estate・EC and regional trading companies

Proactive involvement in regional resources and regional infrastructure◼ Key to regional revitalization: SE×5K (Sports, Entertainment, Tourism, Environment, Education, Health, and Internationalization)
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16

Cost reduction of system/store strategy

Improving the Quality of Profits■ Modernize the system and make the public cloud the final stage (increase transparency in system costs)■ Store consolidation to the final phase 50 locations will shift from office processing to consultation-centriclocations■ On investments in new growth areas while accelerating the reduction of non-personnel expenses for
traditional banking operations(￥

bn)(Number of bases)

180

160

143 locations

140

16.5

15.4

160

140

2.5

1.4

13.3

120

7.1

120

3.7

100

7.2

80 locations

100

80

80

3.5
50 locations

60

60

3.4

1.9

3.4

40

20

0.6

0.7

2.9

2.7

40

20

4.2

0

0
2001/3

2006/3

2011/3Site cost

2016/32021/3

Deposit insurance fee

2022/3

Other2023/3

System costs

2024/32025/3For new businesses

2027/32029/32034/3

Number of bases (right scale)

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17

Significant update of market investment strategy

Improving the Quality of Profits◼ Restructure the securities management system to secure stable earnings and improve unrealized gains/losses,
such as investment plans based on model portfolios and investment actions based on House View.
◼ Improve portfolio efficiency by reducing and replacing low-yielding yen bonds and foreign bonds.
■Revenues Plan (Realized Gain/Loss)(￥■Content of key effortsbn)

1.Formulation of investment plans based on model portfolios
23.1
Net interest income
Trading profit and loss

2.3

•

19.5

15.7

16.6

•

2.6

16.0

Clarify the targeted securities portfolio (model portfolio) with the bestrisk/return efficiency from a medium-to long-term perspective
Formulation of investment plans and strategies with an awareness of overall
portfolio performance

4.5

2.House view-based investment behavior

8.4
9.5

20.8
16.9

•

11.5

Formulation and execution of investment planning and strategies based on
independent market forecasts and assumed ranges by FDAlco analysts andeconomists

8.2
6.2

3.Improving efficiency of securities portfolios
FYE March 2024

FYE March 2025

FYE March 2027

FYE March 2029

FY3/2034※Net interest income includes only interest and dividends on securities (including funding costs).

•

Improvement in bond yields through sales of low-yield bonds andreplacement trading
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18

Advanced corporate governanceCapital cost containment■Board of Directors Chairman and Chairman of the Nomination and Compensation Committee were replaced to improvethe effectiveness of the separation of execution and oversight.
■Establish human resources requirements for key positions, establish a pool of candidates, and work to develop successors
The Nomination and Compensation Committee and Board of Directors shall constantly check the status and lead tothe appropriate selection of successors.
BoardsSuccession plan

Chairman: Outside Director

June 2024 (planned) Change from President & CEO

Plan development

Composition: 9 directors

・Human Resources Requirements and Target Posts

・Candidate Pool and Development Program

4 in-house (45%), 5 outside (55%)

Pool of candidates

Nomination and Compensation Committee
Chair: outside director

Replaced from the president in November 2023

Composition: 9 directors

Our employees'
development

4 in-house (45%), 5 outside (55%)

To check the status

Audit and Supervisory Committee
Chairman: Outside Director

・Profiling and personal evaluation

To check the・Recurrent program and external trainingstatus
・Management 1on1 and personnel changes
・Nomination and Compensation Committee and Boardof Directors

Discussion on the timing and necessity of replacing Board of Directors effectiveness assessment

Composition: 6 directors
1 in-house (17%), 5 outside (83%)

Successor selection
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19

Disclosure &Dialogue

Capital cost containment■Disclose information inside and outside the company and visualize business processes to improve the quality of profits
Significant effects on the evolution of corporate culture, agile development, customer-oriented, investor-oriented focus,
and risk management■Deepen dialogue with all counterparties (customers, investors, internal, etc.)
Major premise is transparent information disclosure(Examples of Information Disclosure)
Emphasize the sources of profit, processes, and quality(Assumptions for a Sustainable Company)■Appropriateness and purpose of free commission of 3.0-4.0 billion yen per year
・Free after-hours ATM fees (0.5 billion yen/year)
・Basic fee free for Internet banking (corporations and individuals) (1.0 billion
yen/year) and free remittance between Hokkoku Bank (1.5 billion yen/year)
・Free commissions when purchasing investment trusts: ~1.0 billion yen/year(Dialogue)
Conversat
ion

Exchange opinions and create optimal solutions while understanding

Dialogueand respecting each other's opinions and ideas' backgrounds andthought processes.

Discussion■Foreign currency denominated insurance, structured bonds, etc. are not sold toany segment customers■In-house meetings and visualization of information (excluding insiders andprivacy)■External disclosure of strategies and tactics other than those withconfidentiality obligations

Friendly greetings, conversations, and open information sharing.

To persuade others by asserting values and opinions.

In business, “Dialogue" is the most important issue■More than 50 CEO per year and 1on1MT with institutional investors■Online briefings for individual investors
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20

Human Capital Initiatives

Capital cost containment■ Average annual income also increased due to performance-linked stock grants.
From DX, we will continue to invest in AI transformation and Human resource development and makeregular employees.
To the highest level of average annual income of financial institutions.
Number of Employees and Percentage of Full-time Employees
3,000

Full-time employees
Part-time employees

487 people

100%

94%

100%

90%

2,500

90%
2,000

201 people

83%

103 people

1,500
1,000

80%

2,300 people
1,898 people

1,747 people

1,574 people

2029.32034.3

70%

500
0

60%

2001.32006.32011.32016.32021.32022.32023.32024.32025.32027.3

Personnel Expenses
11
21,00019,000Overall personnel expenses (left scale)
Personnel expenses per employee (right scale)10

10 million yen

19,338M

917,00015,684M

15,000

9 million yen

19,311M

8
7

13,0005million yen

18,476M

11,000

6

7 million yen
9,000

5

7,000

4

5,000

3

2001.32006.32011.32016.32021.32022.32023.32024.32025.32027.32029.3

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2034.321

Initiatives for Climate Change

Capital cost containment■Initiatives to Reduce CO2 Emissions in the Company's Supply Chain (Starting Measurement of Scope3)■Qualitatively and quantitatively grasp the response status of business partners and realize GX through Consulting &advisory in cooperation with local governments and other financial institutions
Initiatives for Regional GX

Information gathering and understanding

GX

・Gathering information to understand the current state and impacts of climate

1.0change・Understand the specific problems faced by local governments and businesses

Prefectural businesses (other financial institutions,accounting firms, etc.)
・Measurement and sharing of greenhouse gas emissions
・Aiming to be a carbon-free leading region

・Formulation and execution of action plans for decarbonisation

Grasping the current situation, setting targets, and formulating action plans
GX・Measure greenhouse gas emissions and set emission reduction targets

2.0

・Formulated concrete action plans to achieve targets such as improving energy

・Proactive introduction of decarbonisation-related equipment

Information platform construction

efficiency, introducing renewable energy, and reducing waste

・Enlightenment and promotion for

Execution and Evaluationcompanies in the prefecture

Connect the regions
Carbon neutral

GX・Implementation of the action plan and regular evaluation of the results

3.0

・Review the action plan and consider and implement improvement measures basedon the evaluation results
Extension to the entire supply chain and region

Localgovernment

GX・Expand the company's initiatives to the supply chain

4.0

・Creation of examples that can be shared with local communities through・Initiative Initiatives

visualization of initiatives(Building ZEB, Energy Creation, Reducing Vehicles, Improving EV・HV)・Education and consulting for business partners
・Establishment of a system of cooperation with prefectures, other financial
institutions, and accounting firms

Building a foundation for GX in the region as a whole and achieving carbon neutrality
GX

・Establishment of a foundation in which efforts throughout the region penetrate and5.0

the effects and benefits associated with these efforts can be enjoyed by the entire region
・As a result, achieving carbon neutrality across the region
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224.Each strategy and material

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Progress of Key Businesses
Item・Loans mainly to large enterprises decreased, yields improved, but profits decreased by 248 million yen

Business loans and Leasing

Loans outstanding (year-on-year basis) 1,142.7 billion yen (year-on-year ▲ 79.2 billion yen)・Number of contracts increased due to group-wide sales, and revenue increased by 40 million yen
Leasing receivables and Leasing invested assets (year-on-year balance) 37.7 billion yen(year-on-year increase of 2.2 billion yen)・Started building a new cashless base (Acquiring Insuring)Cashless

・Payment value: 31.149 billion yen/year for franchised stores (▲2.421billion yen) 74.666 billion yen/year (+ 9.589billion yen)・Deposit-type stable coin "TOCHIKA" service launched in April
・In corporate consulting, the number of consulting contracts increased year on year.

Consulting & advisory

Consulting: 295 (+44 YoY)
・Began preparations to establish a local subsidiary of The CC Innovation, Ltd. in Kenya

Investment advisory
Investment fund・The amount outstanding under Investment advisory is 370.0 billion yen.
・Investees 74 properties, 27.9 billion yen (+45 properties, +23.0 billion yen compared to end-December 2022)
・Investment ratio 1.07 times (2023/12)

・Valuation gains/losses increased by 37.6 billion yen, or 24.1 billion yen compared to the end of the previous fiscal year, due to the reduction ofMarket management

yen-denominated bonds and foreign bonds for portfolio improvement, replacement, and sophistication of stock management.
・Overall profit/loss was +39.8 billion yen, and the overall profit/loss ratio was +2.8%, exceeding the target of 2.0%.
・The sale of strategic shareholdings recorded a gain on the sale of 8.2 billion yen/21 brands.
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

24

Priority businesses (integrated management of loans and Leasing)■ Initiatives for resolving issues such as financing and financing based on understanding of business prospect according■ Continue dialogue on pricing. Switch to loans based on market interest rates■ Customer Convenience and productivity improvement by Providing Digital Banking Overdrafts(￥ bn)

Revenues plan
20.5
20

18.2
16.9
14.6

15

14.4
1.4

2.3

1.8

1.6

1.4

10

15
13

16

18

13

5

0
FY 2023■ Exercising Financing Functions through understanding of businessprospect according
・Dialogue through Shared understanding of business prospectaccording and Finance・Deepen understanding of business prospect according throughindustry-specific sales in the Kanazawa region
・Initiatives for early involvement
・Expand shares of current Leasing products
・Initiatives for ESG financing using Subsidy, etc.
・Support for people affected by the Noto Peninsula Earthquake

FY 2024

FY 2026

Loan

FY 2028

FY 2033■ Digital Customer Convenience and productivity improvement
・Implementation of Lending Function to internet banking forcorporate clients(scheduled for release in autumn 2024)

Leasing
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

25

Credit Cost Results and Future Prospects■Credit costs for the year ended March 31, 2024 were 4.5 billion yen. (Including 1.4 billion yen impact due to earthquake)■Fiscal 2025 is expected to be a fixed amount based on the possibility of deteriorating financial conditions of business partners
after the earthquake.
■Coverage ratio of disclosure receivables is high. Accelerate involvement with customers and work to curb new generation andreduce outstanding balances
Credit costs (￥bn)<Preservation Status>

2020.32021.32022.32023.32024.3Disclosed claims under thefinancial reconstruction law(￥ bn)

56.1

60.8

75.8

73.4

68.3

Conservation amount(￥ bn)

53.4

58.7

65.9

70.6

64.5

95.1

96.5

86.9

96.2

94.4

15000

11.82010000

Of which, earthquake impact
1.405 billion yen
Estimate a certain amountof earthquake impact

62.14

5.500
45.85

5000

1.405

2.500
3.000
2.500

2.000

3.180

Coverage ratio (%)
03/2022

3/20233/20243/2025

3/20263/20293/2034

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

26

Loan ~ Yield by segment ~■ Yields rose overall and by segment due to pricing-focused dialogue and higher interest rates on mortgage loans
Yield by attribute (%)

Loans Outstanding and Yields（￥ bn）
0.95%
315.2
3,175

20,012

中小企業等
2021/3

0.92%
3,135
2,973
19,9312022/3

中堅・大企業

0.93%
3,228
2,509
19,7192023/3

地公体・公社

2021/3

0.99%

3,269
1,899
19,267→2022/3→→2023/32024/3

Profitablelending

1.168▲0.0291.139+0.0131.152+0.044

1.196

Consumer loans

0.840▲0.021

0.819▲0.0200.799+0.0680.867

Of which,secured

0.729▲0.0080.721▲0.0110.710+0.0740.784

Of which,
unsecured

3.227▲0.0543.173+0.0083.181+0.006

3.187

Local public
corporations

0.379▲0.0750.304▲0.0200.284+0.036

0.320

Yields by Region (Business Loans)

2024/3

貸出金利回り2021/3→2022/3→(%)

2023/3→2024/3Three Hokuriku
prefectures

1.285▲0.0421.248▲0.0051.243+0.015

1.258(%)

In Ishikawa
Prefecture

1.274▲0.0301.239+0.0051.244+0.008

1.252

Average Newly Executed Interest Rates (by Attribute)2021/32022/32023/32024/3

In Toyama
Prefecture

1.333▲0.0731.287▲0.0271.260+0.026

1.286

Profitable lending

0.899

0.894

1.174

1.304

Including
Fukui
Prefecture

1.221▲0.0451.196▲0.0201.176+0.0401.216

Consumer loans

0.575

0.548

0.489

0.679

Other

0.534

+0.1360.710+0.040+0.0480.526 HOLDINGS,HOKKOKU
FINANCIAL
INC. All rights0.574
reserved.

27

Effects of interest rate hike■ Annual impact of interest rate hikes reflected in the current plan
■ Continue dialogue on a transparent interest rate system■ Shift to lending with a market-linked system from the viewpoint of increasing convenience and efficiency

Composition of interest rates on loans and discounts
1%

3%
10%

Annual impact of yen interest rate hikeFirst year

Second year

Third year

0.9 billion yen

2.9 billion yen

4.2 billion yen

3%

6%
6%

Profitable

44%

lending

11%

47%

Consumer
Loan

46%

・Reflected in the current medium-to long-term management plan update

8%<Estimation conditions>

15%

・Abolishment of YCC and termination of negative interest rates are expected, with the policy rate rising to
0.25% and the 10-year JGB yield to around 1.00% by the end of fiscal 2025.

■Floating rate (short-term prime)■Floating rate (market-linked)■Fixed rate (less than one year)■Fixed rate (1 year or more but less than 3 years)■Fixed rate (3 years or more but less than 5 years)■Fixed rate (5 years or more)・Loans outstanding are estimated based on the planned values for the respective fiscal years under the Medium-■OtherLong Term Business Strategy.

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

28

Priority Businesses (Progress of Cashless)■ Expand business domains by building a new cashless /BaaS base linked to local operators.
■ Penetration of digital regional currencies (stable coins) by strengthening collaboration with local
governments and other financial institutions.
■ Further increase the cashless ratio through the implementation of the above measures.
■Expansion of payment domains
・New cashless base (Acquiring Insuring),Building a Foundation for BaaS

Revenues plan(￥ bn)

・Corporate and personal debit penetration rates and the increase in the number of
7.2
1.5

transactions
・Combined cash register, settlement machine, and recurring in addition tomerchant terminals Increase earnings through proposals■Issuance of digital regional currencies

3.1
2.2
1.5

1.6

0.3

1.5

1.6

1.9

3/20243/2025

3/2027

0.6

5.7

・Increase in member stores at the lowest domestic settlement fee of 0.5%
・Increase users by improving usage environment and establishing a system for

2.5

providing rewards
Card

3/2029regional currencies (stable coins) ・Baas

3/2034・Introduced local government "Topipo" to incorporate point business and progressin digital shift

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

29

Key Businesses (Corporate Consulting)■ Basic Strategy: Establishment of a Framework for Implementing Action Policies by Customer Segment
・Improve productivity by clarifying action policies by segment and responding to them based on
profitability.
・Expand external collaboration to respond to new fields and cultivate new customers.
■Large corporations/municipalities/financial institutions
・Expand response domains in response to client needs■Regional small and medium enterprises
・Cooperate with various organizations to promote efficient
FY 2033
Sales 3.5 Billion yen
FY 2023
Sales1.18 Billion yen

consulting and approach customers without transaction
transactions■Urban approach・Develop new customers through collaboration with shinkinbanks, etc.

Small and medium-sized companies in the Hokuriku region (600 million yen → 1.1 billion yen)
Urban Approach (100 million yen → 800 million yen)
Large corporations/local governments/financial institutions (200 million yen → 700 million yen)
M&A (¥160 million → ¥700 million)
Recruitment Consulting Services (¥70 million → ¥150 million)
Others (70 million yen → 40 million yen)

■M&A, Placement/Recruiting・Respond to needs based on clients' growth strategies.
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

30

Key Businesses (Corporate Consulting)■Main Initiatives

・Respond to advanced issues such as strengthening diversity and governance for large corporations

・For SMEs, expand value by enhancing menus specializing in each company and industry
・Expand to an appropriate level of fees by refining pricing
・By expanding the fields, we will be able to respond to multiple issues for each client.
Revenues plan

4000

3500

Net sales

Expenses(Millions of yen)
40

Main menu offerings

3500

Per capita fees

35

■Business strategy formulation areas 232 (Business strategy 183 + branch office

32.7
3000

2700
30

2500

25.2

2500

23.4

2000

consulting 49)

25■Promotion of operational efficiency and ICT utilization areas 114

20■Human resource development and human capital 90 projects

1653
1500

1285

1180

1345

1000

1345

1403

18.7

■Business succession/Capital strategy/M&A area 14 projects
15

500

11.7

■Overseas Business area 25

010

FY2023

FY2024FY2026FY2028FY2033■Others 78 (Corporate solutions 41 + Branch consulting 37)
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

31

Priority Businesses (Personal Consulting and Investment advisory)◼ Establish customer-oriented Investment advisory businesses that pursue the best interests of customers
from a neutral standpoint.
◼ Utilize expertise cultivated in securities management to provide advice to individuals and corporate
corporations.
■Initiatives to establish Investment advisory businesses(￥ bn)

1.Placement of Advisors at Major Bases■Profit plan•

An advisor with expertise in key locations resident to strengthen contact
with individuals and corporate corporations.

•

Leverage expertise cultivated in market-based management to Investment
advisory for personals and corporate corporations.

1.3

2.Initiatives for Business Corporations
0.9
0.8

•

advice on inheritance of owners and measures against Business

0.3
0.1
FY2023

Advice on management of surplus funds to business corporations andsuccession also strengthened.
FY2024FY2026FY2028FY2033•

Launched increasing corporate value consulting for listed companies.
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

32

Priority Businesses (Expansion of Investment Operations)■Revitalize and grow Noto Peninsula through the Earthquake Recovery Fund ⇒ Establish two new 10.0 billion yen
funds■Invest with joint GP ⇒ Invest in areas such as regional revitalization and renewable energy■Invest in listed stocks ⇒ 20.0 billion yen■LP investment in external funds such as emerging countries ⇒ $100 million[Investment Plan][Status of Fund Investment (as of Dec. 2023)]
2023/125 years later

About 10 years
later

Fund nameTotal(￥ bn)

Book value(￥ bn)

Number ofcases

Investment balance(￥ bn)

27.9

95.0

100.0

Hokuriku Region Venture Fund

1.0

9

0.5

Investment ratio

1.07

1.20

1.48

Noto SDGs Fund

0.7

13

0.5

QRI Growth Support Fund

1.0

2

0.1

Ishikawa SME Revitalization Fund

2.0

7

1.6

QR Fund

50.0

43

25.3

53.7

74

27.9

[Breakdown of 27.9 billion yen investment balance]
By category

Geographies

15%

18%

Total

35%
40%

66%

25%
Non-listed company
LP investment

Listed companies

IRR of about 14%

Hokuriku San Prefecture
Domestic market other than Hokuriku

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

33

System strategy■In-house development of strategic systems to support priority businesses
Improve development productivity through agile development, cloud and AI utilization, and achieve qualityimprovement and Cost reduction■Promote sales of strategic systems to other banks as a new revenue source
To promote the systems division and reduce system costs

Strategic system under development

Reduce personnel and personnel costs by approximately 30% through productivity
improvement through AI utilization and system modernization(Concentrated investment until FY3/2029 in the next-generation core banking system)

Next-generation core banking system (scheduled for release in January 2027)
・Improved core banking system availability with multi-cloud support
・Strengthen collaboration with external services through open languages andcloud natives
・Cost reduction by Operation and Maintenance in-house development

API & BaaS base (scheduled for release in October 2024)
・Provision of financial functions to FinTech companies and regional operating companies

New card base (scheduled for release in March 2025)
・Franchisees: Use smartphones and tablets as payment terminals (Tap to Phone)・Users: Provide digital cards as a new choice for payment methods

Sales of operational strategic systems to other banks and other industries■System sales by new sophistication companies (under consideration)
Corporate and personal Internet banking
Integrated customer management system

Kintone apps, etc.

Talent management system
In-house ATM and administrative control
systems■Personnel Expenses (￥ bn) and Development Personnel
50355 persons
Hokkoku FHD 138
Cooperating companies 187
Next Core 30

40
30
20

444 persons
Hokkoku FHD 162
Cooperating companies 132
Next Core 150

4.1

2.9

1.2

0.2

267 persons
Hokkoku FHD 162
Cooperating companies 132

3.8

3.6
1.8

400
300

1.8

2.1
1.8

1.4

1.2

0.9

1.0

0.9

1.0

1.1

1.1

1.1

3/20243/2025

3/20273/20293/2034

Hokkoku FHD

Cooperating companies

200
100

10
0

0

■System Costs (￥ bn)

Next Core Banking

Number of staff (right axis)※ System cost is calculated excluding the amount of office equipment and ATM equipment.

7.1

7.4

7.1

7.1

4.6

4.4

4.0

3.6

2.5

3.0

3.1

3.5

3/20243/2025

3/20273/20295.1
3.4
1.7
3/2034■System development expenses (software depreciation) ■ Running expenses (non-personnel expenses)

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

34

Human capital enhancement■Toward the Realization of a Human Resources Portfolio to Support the Expansion of Business Domains
Need for large-scale personnel shift from the personal field to the priority field (corporate and digital) in the
mid-to long-term■Changes in the Human Resources Portfolio (2024→2034)
1012
1,000

800

600

Quality Company, Good Company

Excess149

Human Resources That Can Contribute to the588

improvement in quality of the region
Shortageof 102

To produce

391

400

■Hokkoku FHD's Human Resources Ecosystem

67.7 billion
yen

331

Shortage30
employees

Hokkoku FHD
Human resources ecosystem
212

215

200
113

Hiring130

0Fostering

Active role
Corporate

2023 2034 2023 2034 2023 2034 2023 2034

Personal Domain Corporate Domain Digital/Systems and Other Priority Domains
cultureBase skill integrity

Shortage of human resources in the corporate field and digitalconsidering retirement age, etc.

Developing with a Comprehensive Framework from Hiring to Producing
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

35

Human capital enhancement■Framework of the "human resources ecosystem" to recruit and train diverse professional human resources
HiringFostering

Active role

To produce■Fostering Career Autonomy through career-based
Hiring■Recruiting Diverse Human Resources

・Career recruitment ratio
FY2020: 25.0% → FY2023: 75.0%(6.5% of managers are mid-career employees)

・Establishment of new graduate Expert Course

Active role

personnel system

・Elimination/seniority system through "career pay review" through company-wide dialogue
63.9% increase in employee salary
・Promoting Parallel Carriers Using side job within the Company
Total of 675 in-house assistant workers (35.6% of all employees)
・Career plan visualization of employees

Fostering■Strengthening Human resource development

Allocation rate to desired departments: 94% (results of personnel transfers in March 2024)
・"Wellness Support Team" Supports Employee Mental and Physical Health・Introduction of "Job Challenge System" → Acceleration to Key Areas

191 counseling for employees affected by the earthquake (3 months after the Noto earthquake)・Total Human resource development cost
Fiscal 2020 58 million yen → Fiscal 2023 97 million yen
Number of students attending or completing university or graduate school
FY2020 2 → FY2023 60

To produce■Sharing knowledge with local communities

・Dispatched to municipalities and private companies 2024/356 → 2034/3122
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

36

Environment-related figures■Calculation of Scope3■Trends in CO ₂ emissions (t-CO₂)

Calculation method

Compared
to fiscal
2013
50.4%
reduction

12,00010,1918,000

Investment andloan target sales × emission factor × amount of investment and loan
Total amount of stocks and liabilities of investees and borrowers

5,052(Emissions in Major Industries)

4,000

Emissions (t-CO ₂)

Industry type
0
2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

General machinery

308,222

Metal products

302,124

Building construction business

264,747

Wholesale trade

232,830

Retailing

179,252

Food

162,2832030■Scenario analysis Result for transition risks and physical risk
(Transition risks)

4℃ー

Increase in credit costs through 2050

(no transition
response)

2℃
Approx. 4.0
billion yen

2℃

Increase in credit costs through 2050

Approx. 5.5billion yen

Approx. 1.8
billion yen

Impact of our buildings

Approx. 0.5
billion yen

Approx. 0.2
billion yen

・・・

4℃

(Physical risk)

Overall

2,734,150(Transition risks) in the three sectors of “Metal mining,” “Food Products,” “Land/rail/air logistics services,” “Machinery,” “Textile,” and “Construction/civil engineering” considering the amount of credit and thedegree of impact of transition risks Implemented at the top 10 companies in terms of credit amount(Physical risk) Buildings in the three Hokuriku prefectures with commercial lines of credit (Head Office and collateral properties) Our properties in Ishikawa Prefecture

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

37

Deposits-Balance by Segment ~Initiatives

Deposit Balance by Attribute(￥ bn)

・Increase sticky deposits by enhancing payment services such as LIFE+, Hokkoku
2021/32022/32023/32024/3Compared to
23/3
ChangeChange from
23/3

Digital Banking, our core services■Corporate Internet banking■Personal services
Individuals

2,662.6

2,781.2

2,870.9

2,951.9

+81.0

+2.8%

CORPORATIO
N

1,111.7

1,155.4

1,143.4

1,230.3

+86.9

+7.6%

Public moneyand financial

277.5

336.0

369.7

529.3

+159.6+43.2%Overall

4,052.0

4,272.7

4,384.1

4,711.6+327.50.5%・Affiliated convenience store fee free(*)

・Free basic fees

・Free transfer fees to other banks (*)

・Free bank transfer fees

・Free bank transfer fees

・Low-priced transfer fees to other※Up to three times a monthbanks
・Available 24 hours/365 days a year

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

38

Loans and Bills Outstanding by Segment
Loans Outstanding by Type

Loans Outstanding by Attributes(￥ bn)
Compared to
23/3
Change(￥ bn)

Compared to
23/3
Rate of change

Compared
to 23/3
ChangeChangefrom 23/3

2021/32022/32023/32024/3

Small and medium-sizedenterprises, etc.

2,001.2

1,993.1

1,971.9

1,926.7

▲45.2

▲2.3%

Profitablelending

1,318.0

1,275.7

1,206.0

1,126.5

▲79.5

▲6.6%

(Ratio of SMEs, etc.)

75.9%

76.5%

77.5%

78.8%

ー

+3.3%

Consumer loans

1,000.6

1,014.6

1,016.8

990.1

▲26.7

▲2.6%

Medium-sized and large
companies

317.5

297.3

250.9

189.9

▲61.0

▲24.3%Of which,secured

964.2

981.9

986.7

960.9

▲25.8

▲2.6%

Local public entities andpublic corporations

315.2

313.5

322..8

326.9

+4.1

+1.3%

Of which,
unsecured

36.3

32.7

30.1

29.1

▲1.0

▲3.3%

2,633.9

2,603.9

2,545.6

2,443.6▲102.0▲4.0%

Local public
entities andpubliccorporations

315.2

313.5

322.8

326.9

+4.1

+1.3%

Overall

2021/32022/32023/32024/3Loans Outstanding by Region(￥ bn)
Compared to
23/3
ChangeCompared to 23/3
Rate of change

2021/32022/32023/32024/3

Hokuriku 3 prefectures
total

2,408.9

2,395.6

2,379.4

2,306.7

▲72.7

▲3.1%

In Ishikawa
Prefecture

1,816.7

1,811.9

1,813.9

1,775.8

▲38.1

▲2.1%

471.8

464.5

451.1

422.7

▲28.4

▲6.3%

Including Fukui
Prefecture

120.2

119.0

114.4

108.1

▲6.3

▲5.5%

Other

225.0

208.3

166.2

136.8

▲29.4

▲17.7%In Toyama Prefecture

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

39

Investment in Securities■In fiscal 2023, the amount outstanding of yen-denominated bonds and foreign bonds was reduced and the multi-asset
fund was increased.
■The Bank worked to reduce the duration and interest rate risk of yen-denominated bonds as they were sold.
Balance of Securities (Book Value) and Duration
Yen bond
Foreign bonds

Trends in realized gains/losses by asset(Year)

6.58

6.61

Foreign bonds

Equity securities

Investment trusts (excl. Multi)

Multi-asset

28.1

6.00

5.82

(￥ bn)

Yen bond

20.2

18.7

5.29

6.31
5.11

15.0

6.7

5.15

7.8

1.6

16.4

3.2

0.8

2.3

FYE March 2020
Foreign bonds

Equity securities

Investment trusts (excl. Multi)

FYE March 2021

1,414.2 (￥ bn)

21.3

254.0

0

20.0

76.9
83.7

77.9
91.8

FYE March 2022

Yen bond

Foreign bonds

Equity securities

Investment trusts (excl. Multi)

53.4

▲12.2

FYE 03/31/2023

FYE March 2024

Multi-asset(￥ bn)

88.2

68.6

4.2

213.8

59.1
153.3

225.1

88.8
51.7

0.2

▲0.6
▲5.1

827.4

701.2

50.0

37.6

13.6

33.5

122.1

662.6

▲9.3

69.4

73.9
69.3

818.9

0.4

2.3

364.5

150.0

188.0

22.0
1.9

Trends in unrealized gains/losses on securities

1,300.1

954.4

1.2

Multi-asset

1,433.1

1,106.9

4.3

0.9

4.16
Yen bond

15.7

2.8
3.3

2.8

6.5

5.12

0

0

20.0
0.7

▲0

783.9

70.7

▲11.5

▲0.1
▲3.8

FYE March 2020

FYE March 2021

68.3

74.8

▲17.0
▲15.3

▲17.8
▲8.3
▲6.6

▲5.4

FYE March 2022

▲6.6

▲15.9

FYE 03/31/2023▲4.4

FYE March 2024

※Unrealized gains (losses) include deferred gains (losses) on derivative transactions used to hedge interest rate risks.

FYE March 2020

FYE March 2021

FYE March 2022

FYE 03/31/2023

FYE March 2024

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

40

Status of Foreign Bonds■To improve net interest income and unrealized gains/losses, the company sold short-maturity low-yield bonds, mainly in
U.S. dollars.
■Going forward, the Bank will continue to closely monitor the direction of monetary policy in each country and work to
improve the yield of the portfolio.
Status of book value and unrealized gains/losses on foreign bonds
200.6

Overall

USD

Improvement effect from sales of foreign bonds
3.80%■ Book yield
3.11%

162.3

2.89%

133.6

2.60%

132.7

2.35%

■Book value balance

2.10%(￥ bn)

92.3

89.7
Overall

FYE 03/31/2023

FYE 03/31/2023

FY9/2023

FYE March 2024

■ Effect of improved net
interest income(Annualized)
USD■Appraisal profit orloss

FY9/2023

1.9

Other currencies(￥ bn)

0.6

0.6
1.8

-6.6

-6.9

FYE March 2024

2.4

-4.4

(￥ bn)

USD

1.3

-8.5

0
Overall

USD

FYE 03/31/2023
-15.2
-16.9

※Unrealized gains (losses) include deferred gains (losses)
on derivative transactions used to hedge interest rate risks.

FY9/2023

FYE March 2024

HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

41

Status of multi-asset funds◼ A simple, low-cost product that invests only in liquid traditional assets.
◼ This fund is advised by Investment advisory firm FDAlco, and can be managed to reflect the Group's strategies.
◼ Merchandising of multi-asset funds◼ Overall asset allocation of securities(After look-through of multi-asset funds: market value)

1.Simple and low cost••

Invest only in traditional assets such as bonds, stocks, and futures indeveloped countries, mainly in Japan and the United States.
It is possible to design products that take into account the Hokkoku
Bank's investment policy and asset allocation of securities as a whole at alow cost.

Others (J-REIT), 2%

Overseas stocks, 4%Japanese equity, 11%

2.Advisory capabilities of FDAlco of Investment advisory companies•

Established a fund with the advice of Hokkoku FHD's Investment
advisory firm FDAlco.

Foreign bonds, 23%

Yen bond, 60%

3.Good performance•

Overall gains/losses on multi-asset holdings will be positive.

(As of March 31, 2024)
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

42

ROE and performance-linked remuneration
・Pay Composition and Percentage[Executives] ※Includes directors and executive officers of Hokkoku FHD, as well as directors and executive officers of individual group companies.

[employese]
Compensation Composition(※)

ROE

Fixed

Equity securities

Total

8% or more

95%

24%

119%

7% to less than 8%

95%

17%

112%

6% to less than 7%

95%

12%

107%

5% to less than 6%

95%

5%

100%

4% to less than 5%

95%

4%

99%

3% to less than 4%

95%

2%

97%

2% to less than 3%

95%

1%

96%

1% to less than 2%

95%

0%

95%

Less than 1%

95%

0%

95%

(※)Calculated Using the level of payment in March 2022 as afixed compensation of 95%

Medium-term target level

Medium-term target level

Compensation image of ROE5% (for the president and director)
Fixed amount pay(45%)

Performance-linked (money)(30%)

Compensation image of ROE5%
Performance-linked(shares)(25%)

Salary and annual bonus(95%)
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.

Stock grants
(5%)

43

You are prohibited from transferring or reproducing this material or distributing it to third parties without firstobtaining the permission of Hokkoku Financial Holdings, Inc. These materials have been prepared solely for the
purpose of providing information, and we do not solicit the purchase or sale of any particular security. All or part ofthe items described in this document are subject to revision or change without notice. These materials include forwardlooking statements about future performance. These statements are not guarantees of future performance. Please notethat these statements may differ from targets due to changes in the business environment and other factors.

Contact for inquiries regarding this material
HOKKOKU FINANCIAL HOLDINGS Ltd.
Corporate Planning Department Public & Investor Relations GroupE-mail : cyosa@hokkokubank.co.jp
HOKKOKU FINANCIAL HOLDINGS, INC. All rights reserved.