Iyo Bank First Half of
Fiscal 2020 Earnings Briefing Materials
Investor Relations 2020

December 4, 2020

IndexI. Summary of Earnings for the First Half of Fiscal 2020
◎Profit and Loss Conditions for the First Half of Fiscal 2020

3

◎Conditions in Evaluation Gain on Securities and Equity Ratio

7◎Factors in Increase / Decrease in Core Business Gross Profit (First Half of Fiscal
2020)

4

◎Impact of COVID-19

8◎Conditions in Loans, Deposits, and Assets in Custody5◎Response to COVID-19

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

6

II. Main Strategies and Progress of the Fiscal 2018 Medium-Term Management Plan
◎Major Numerical Targets of Fiscal 2018 Medium-Term Management Plan

11

◎Plans for Loans, Deposits, and Assets in Custody

12◎“Digital-Human-Digital Bank” Business Model

13◎Progress in “D-H-D Bank”

14◎Efforts for SDGs I: Local Economy and Community

24◎Consulting Strategy I: Personal Banking

15◎Efforts for SDGs II: Financial and Information Services

25◎Consulting Strategy II: Corporate Banking

16◎Efforts for SDGs III: Strong Management Foundation

26◎Consulting Strategy III: Ship Finance17◎Efforts for SDGs IV: Diversity and Work Style Reforms

27◎Online Business Strategy

18◎Efforts for SDGs V: Environmental Protection

28◎ICT Strategy

19◎Strengthening Cooperation with Group Companies

29◎BPR Strategy

20◎Profit / Loss Forecasts for Fiscal 2020

30

Investor Relations 2020

◎Branch Strategy

21◎[Market Strategy I]: Strategic Asset Allocation Responding to Continuing Low
Interest Environment◎[Market Strategy II]: Ensure Earnings from Market Investment and Stabilize
Foreign Currency Procurement

22
23

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

1

I. Summary of Earnings for
the First Half of Fiscal 2020

Profit and Loss Conditions for the First Half of Fiscal 2020
▼Profit was up year-on-year at every income level, and a high level of profit was secured
Earnings for the first half of Fiscal 2020
(Nonconsolidated)(Units: Millions of yen)First half of
Fiscal 2020

YoY

Increase/
Decrease+5.19%First half of
Fiscal 2019

Core business gross profit: Up ¥1,966 million YoYCore business gross profit (Note 1)

39,818+1,966

Interest and dividend income

34,809+2,33532,474

Fees and commissions

3,025

(692)

3,717

685

(195)

880

1,983

+324

1,659

Expenses: Down ¥461 million YoY

24,899(461)

25,360◎ Personnel expenses and nonpersonnel expenses down due to operational efficiency

Of which, revenue on assets in custody
Other operating income (Excluding
profit/loss related to bonds including JGBs,
etc.)
Expenses (-)(1.82%)

37,852

Key factors in increase / decrease, etc. (YoY)

Personnel expenses

12,863(236)

13,099Nonpersonnel expenses

10,375(335)

10,710◎Interest and dividend income up due to increases in gain on loan management and gain on
securities management◎ Fees and commissions down due to decreases in revenue on assets in custody and solutionsrelated revenue◎ Other operating income up due to an increase in gain (loss) on foreign exchange transactions

Core business net income up as core business gross profit increased and expenses
decreased, up ¥2,428 million YoY

Taxes

1,660

+111

Core business net income (Note 2)
Core business net income (excluding gain
(loss) on cancellation of investment trusts)
Credit costs (-) ①+②-③
Provision of reserve for general loan losses①
Amortization of non-performing loans ②

14,919+2,428+19.44%

12,491Credit costs: Down ¥1,863 million YoY

14,111+1,685+13.56%

12,426

1,433(1,863)

3,296◎ Provision of reserve for general loan losses decreased due to a decrease in loan loss result, etc.
◎ Amortization of non-performing loans decreased due to a decrease in bankruptcies and downgrades,
etc.

392

(292)

684

1,231

(1,638)

2,869

190

(68)

258

Gain (loss) related to securities

4,906

+820

4,086

Gain (loss) related to bonds including JGBs

3,768

+1,1382,630

Gain (loss) related to stock, etc.

1,138

(318)

1,456

Recoveries of written off claims ③

Other temporary gain (loss)

1,085

(621)

Ordinary income

19,478+4,489Extraordinary income (loss)

(220)

(154)

Income before income taxes

19,257+4,334

Net income

13,639+2,755

1,549

1,706
+29.95%

14,989(66)
14,923+25.31%◎ Gain (loss) on sales of bonds increased due to sales of foreign bonds in view of market trends

Gain (loss) related to stock, etc. (Down ¥318 million YoY)
◎ Gain (loss) on sales of stock, etc. decreased due to the recording of loss on sales of funds

Other temporary gain (loss): Down ¥621 million YoY◎ Temporary retirement benefit expenses up, etc.

Due to an increase in core business net income and a decrease in credit costs, ordinary
income increased, up ¥4,489 million YoY
Extraordinary income (loss): Down ¥154 million YoY

Ordinary revenue

53,775(705)(1.29%)

54,48018,295+3,858+26.72%

14,437

Investor Relations 2020

Gain (loss) related to bonds including JGBs (Up ¥1,138 million YoY)

10,884

Business net income(Note 1) Core business gross profit: “Business gross profit” excluding profit/loss related to bonds including JGBs, etc.
(Note 2) Core business net income: Core business gross profit -Expenses

Gain (loss) related to securities: Up ¥820 million YoY

As a result, net income was up ¥2,755 million YoY
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3

Factors in Increase / Decrease in Core Business Gross Profit (First Half of Fiscal 2020)▼Interest and dividend income was up due to increases in gain on loan management and gain on securities management▼Fees and commissions were down due to decreases in revenue on assets in custody and solutions-related revenue
Year-on-year(First Half of Fiscal 2020 – First Half of Fiscal 2019)(Units: Billions of yen)
(Note) Differences in yield utilize
yield differences with deposits, etc.

Gain on loan
management(¥23.9 billion)+0.64
Interest anddividend income(¥34.8 billion)

Of which, domestic currency(¥20.6 billion)+0.28
Of which, foreign currency(¥3.2 billion)

+0.36

+2.34
Gain on securities
management(¥11.3 billion)

Core businessgross profit(¥39.8 billion)

+2.08

+1.97

Other
(-¥0.4 billion)(0.38)Of which, domestic currency(¥7.7 billion)(0.11)Of which, foreign currency(¥3.5 billion)+2.19

Volume factors +1.04 (Average loan balance up ¥211.5 billion)
Yield difference factors (0.76) (Yield difference down 0.03%)
Volume factors +0.49 (Average loan balance up ¥71.6 billion)
Yield difference factors (0.13) (Yield difference down 0.05%)
Volume factors (0.38) (Average securities balance down ¥54.5 billion)
Yield difference factors (0.47)
Gain on fund cancellation factors +0.74 (Increase in gain on
cancellation of investment trusts, etc.)
Volume factors +1.13 (Average securities balance up ¥159.4 billion)
Yield difference factors +1.06 (Yield difference up 0.89%)

Revenue on assets incustody(¥0.6 billion)
Fees and commissions(¥3.0 billion)(0.19)(0.69)

Other(¥2.3 billion)

Other(¥1.9 billion)+0.32
Investor Relations 2020

(0.5)...Insurance agency commissions (0.16), investment trust related commissions (0.03), etc.

...Solutions-related revenue (0.31), foreign exchange commissions (0.07), etc.

…+0.27 from gain (loss) on foreign exchange transactions, +0.05 from gain (loss) on derivatives (including solutions-related
revenues +0.3)
4
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

Conditions in Loans, Deposits, and Assets in Custody▼“Deposits, etc.” were up 6.3% year-on-year▼“Loans” were up 5.6% year-on-year, increasing in all regions
Balance of deposits, etc. by region

4,456.3
230.2
163.2
232.5
149.8
445.6
139.4
5,817.3

First half of
Fiscal 2020
4,766.9
255.6
171.5
282.9
167.5
418.6
121.3
6,184.6

Balance of assets in custody

565.0
357.1
207.8
53.9
27.0
26.8

First half of
Fiscal 2020

Within Ehime Prefecture
Shikoku (excluding Ehime)
KyushuChugoku
Kinki
Tokyo and Nagoya
Financial Market Business OfficeTotal (domestic branches)
Overseas, etc.
Total

YoY

574.5
347.8
226.6
54.8
20.9
33.8

Balance of loans by region
Region+310.6
+25.4
+8.3
+50.4
+17.7
(27.0)(18.1)+367.3

Increase/
Decrease+7.0%+11.0%+5.1%+21.7%+11.8%(6.1)%(13.0)%+6.3%

Share within Ehime Prefecture as of September 30, 2020
(excluding Japan Post, agricultural cooperatives, etc.)

The
Bank

(Units: Billions of yen)First half of
Fiscal 2019

Group assets in custody
Balance at the Bank
Balance at Shikoku Alliance Securities
Sales of Group assets in custody
Sales at the Bank
Sales at Shikoku Alliance Securities

YoY

Deposits

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

First half of
Fiscal 2019

Loans

Region(Units: Billions of yen)

+9.5
(9.3)
+18.8
+0.9
(6.1)
+7.0

Increase/
Decrease+1.7%(2.6)%+9.0%+1.7%(22.6)%+26.1%

Composition by region forbalance of deposits, etc.

Regional banks otherthan the BankTokyo and Nagoya
Kinki

City banks/
Trust banks

Secondregional banks

CreditunionsOverseas,etc.

ChugokuWithinEhime Prefecture

KyushuShikoku(Units: Billions of yen)First half of
Fiscal 2019
2,361.4
299.7
298.6
420.9
364.0
630.5
109.2
4,484.6
132.8
4,617.5

First half of
Fiscal 2020
2,465.1
326.2
310.9
458.7
387.2
649.0
116.4
4,714.0
160.5
4,874.5

YoY+103.7
+26.5
+12.3
+37.8
+23.2
+18.5
+7.2
+229.4+27.7+257.0

Increase/
Decrease
+4.4%
+8.8%
+4.1%
+9.0%
+6.4%
+2.9%
+6.6%
+5.1%
+20.9%+5.6%

Composition by region forbalance of loans

Tokyo and Nagoya
Kinki
Chugoku

Financial Market
Business Office
Overseas,etc.
WithinEhime Prefecture

KyushuShikoku*Please refer to pages 12 and 13 of the Reference Materials section for the breakdown, etc. of the balance of loans and deposits at
the end of the period.

Investor Relations 2020

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5Conditions in Credit Costs and Disclosed Non-performing Loans▼Credit costs were down year-on-year mainly due to decreases in bankruptcies and downgrades▼Ratio of disclosed non-performing loans was 1.47%, remaining at a low level
Credit costs by factor(Units: Billions of yen)

Fiscal 2017

First Half

Fiscal 2018

First Half

Fiscal 2019

First HalfFirst half of
Fiscal 2020

YoY

Credit costs total
Provision of reserve forgeneral loan losses
Amortization of
non-performing loans

0.6

3.5

0.8

5.8

3.2

6.9

1.4

(1.8)

(0.0)

(0.6)

(0.5)

0.2

0.6

0.4

0.3

(0.3)

0.9

4.7

1.7

6.1

2.8

7.1

1.2

(1.6)

Bankruptcies

0.3

0.8

0.5

1.0

0.8

1.3

0.3

(0.5)

Downgrades, etc.

1.9

6.3

2.3

6.9

3.6

8.1

2.6

(1.0)

Upgrades and collections

(1.3)

(2.3)

(1.1)

(1.8)

(1.6)

(2.2)

(1.7)

(0.1)

0.2

0.5

0.2

0.5

0.2

0.7

0.1

(0.1)

0.03%

0.09%

0.04%

0.13%

0.14%

0.15%

0.06%

(0.08)P

Recoveries of written off
claims (-)
Credit management expense
ratio (*)(*) Credit management expense ratio = Credit costs / Average loan balance

Amounts and ratios of disclosed non-performing loans under the Financial Reconstruction Act
Fiscal 2017

Fiscal 2018

(Units: Billions of yen)

Fiscal 2019

First HalfFirst half of
Fiscal 2020

YoY

Loans to bankrupt or effectively bankrupt borrowers

3.0

6.0

6.1

6.5

3.1

(3.0)

Doubtful assets

44.1

46.6

45.1

53.2

54.5

+9.4

Credit subject to specific risk management

18.0

18.6

22.7

18.0

18.0

(4.7)

Total disclosed non-performing loans

65.2

71.3

74.0

77.7

75.7

+1.7

Ratio of disclosed non-performing loans

1.44%

1.48%

1.52%

1.55%

1.47%

(0.05)PInvestor Relations 2020

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6Conditions in Evaluation Gain on Securities and Equity Ratio▼Evaluation gain on securities was ¥285.7 billion, maintaining a top level among regional banks▼Consolidated equity ratio (BIS standards) was 15.28%
Evaluation Gain on Securities (Nonconsolidated)(Hundreds ofMillions of Yen)

Consolidated Gross Equity Ratio

Nikkei Average (Yen)
2,857
23,185

2,349
2,177

2,184

21,454

2,276
21,205

18,90918,917

16,758

March
2016

March
2017

March
2018

March
2019

Gain / loss on securities
Nikkei Average(left axis)(right axis)(Note) Excludes evaluation gains / losses on money held in trust
Investor Relations 2020

March
2020

September
2020

March
2016
Tier 1 ratio forcommon stock, etc.

March
2017

March
2018

March
2019

March
2020

September
2020

Gross equity ratio

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7

Impact of COVID-19▼Although the negative impact is still significant, a gradual recovery is expected as there are signs of bottoming out insome areas

Oceantransport
Marineculture◎The demand for sanitary papers (tissues and toilet paper) grew rapidly fora while, but has been shrinking. Meanwhile, the demand for paper towels
remains high. In paper processing, the production of unwoven masks has
started and increased. In printing and communication paper, the demand
for flyers is sluggish due to restraint in events and the demand for printing
paper for offices is also low due to the promotion of remote work.
◎The demand for printing and communication paper is expected to continue
to decrease due to the expansion of remote work. If the administrative
procedures go paperless with the launch of the Digital Agency, the decline
in demand will be spurred. Meanwhile, with the growing awareness ofhygiene, the production of hygiene paper, masks, etc. is expected tocontinue to increase in the future.

◎Ocean shipping suffered increased costs with restrictions on port call andstricter requirements for crew changes. Freight charges and charter fees
declined temporarily, but are recovering due to increased cargo
movements of iron ore, grains, etc.
◎In ocean shipping, further market recovery is expected due to increased
cargo movements. Cargo movements in coastal shipping are also expected
to recover with the restart of the economic activities.
◎A sharp decline of demand for restaurants and stagnant export caused a
serious slump in sales of both red sea breams and young yellowtails, but
due to strong sales in mass retailers and recovery in restaurants, marine
product prices at fishing ports have been bottoming out.
◎Surplus in the stockpile of fish is being eliminated, but it takes time formarine product prices at fishing ports to recover to the pre-COVID-19
level.

Tourism

Towels◎On the way to recovery as demand in a wide range of products such as
custom orders (for events), gifts and souvenirs decreased drastically due
to self-restraint and cancellation of events.
◎Increasing the production of gauze masks and antibacterial towels andexpanding online sales.

Impact on Local Industries (Non-manufacturing Industries)

Non-manufacturing industries

Shipbuilding◎Inquiries are sluggish and construction work on hand is down as
shipowners are less willing to place orders due to the self-restraint offace-to-face sales and uncertainty of future cargo movement.
◎Key to the recovery of orders are improvement of supply and demand forshipping space, response to environmental regulations, the difference inoverseas ship prices, etc.

Paper manufacturing

Manufacturing industries

Impact on Local Industries (Manufacturing Industries)◎Under the declaration of a state of emergency, the number of guests at
Dogo Onsen hotels in May recorded a significant drop. Since July, thenumber of tourists has been recovering due to “Go to Travel Campaign”
and other demand stimulus measures.
◎Holding off of long-distance travels and reluctance to travel will continue
for some time. While the demand is largely supported by stimulus
measures, there is a concern that it will drop once the measures end.

Impact on Businesses

Generalmachinery

Individuals◎Overall capacity utilization rate declined. For construction material-related
subcontractors, the order environment worsened from around May.
◎In some areas, there are positives such as inquiries about orders for next
spring and beyond.

Investor Relations 2020

Companies

Increase in deposits due mainly to the government’s
special cash handout
Decrease in card loans due to declining consumer
confidence
Decrease in face-to-face sales (insurance andinvestment products)

Increase in liquidity on hand
Increase in loan demand (working capital)

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8

Response to COVID-19▼Recognize customers’ needs in a timely manner and provide appropriate and prompt fund management support,
together with wide support for business issues
Business Continuity System as Regional Financial Infrastructure●Operational system with infection prevention and other measures
Bank Branch

Headquarters◎ Launched Business Consultation Service (allbranches) and Holiday Consultation Service (byphone, Minatomachi branch)◎ Refraining from visiting sales activities◎ Introduced splash prevention sheets and faceshields◎ Adopted lunch break◎ Established an online meeting system withtablets

Fund Management Support Status and Business Issue Support●Nearly 150 billion yen of COVID-19-related loans and condition changes
for more than 200 borrowers(Hundreds ofMillions of Yen)

With Credit
Guarantee
Association

COVID-19-related loans made (cumulative)
Proper(Number)Number◎ Refraining from events, seminars, businesstrips, etc.
◎ Using video conferencing, etc.
◎ Introduced non face-to-face thermometers(headquarters entrance)
March 2020

April 2020

June 2020

July 2020

August 2020

September 2020

Number of objects for condition changes (cumulative)

Number◎Working from home and shift work
◎Promoting staggered commuting◎Split working (spreading out on different floors)

May 2020

Companies■Individuals●Number of contacts with customers (cumulative number of cases during the period)◎The decrease in contacts due torestraints on visits was covered byconducting phone interviews withcustomers for their needs◎Distributed tablets to all branches andestablished a system to enable online
meetings■Visit ■Over-the-counter ■Phone(Number)March 2020

Phone YoY
+42%

First half 2019

May 2020

June 2020●Support by the support team for
COVID-19 measures

Visit YoY
(20)%

Investor Relations 2020

April 2020

First half 2020

◎Launched a COVID-19 support team in April
2020◎Consisting of ten employees in theheadquarters with expertise and know-how inbusiness support◎Providing wide support for business issues aswell as consulting on fund management

July 2020

August 2020

September 2020

<Support results (as of September 30, 2020)>
In progress

Done

Total

39

66

105

<Support menu>
Business matching, ICT consulting, businesssuccession, M&A, financing, primary industry
support, staffing, manufacturer support, overseas
business support, etc.

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9II. Main Strategies and Progress ofthe Fiscal 2018 Medium-Term
Management Plan
Second Stage for 150(April 1, 2018 - March 31, 2021)

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

Fiscal 2020
Targets

Fiscal 2020
Forecast

Targets

Results

Fiscal 2019
Results

Core business gross profit¥75.0 billion¥76.1 billion¥76.7 billion¥76.5 billion¥78.5 billion

Fees and commissions¥7.0 billion¥7.0 billion¥7.1 billion¥8.5 billion¥6.5 billion

Net income¥18.0 billion¥18.2 billion¥18.5 billion¥20.5 billion¥16.0 billion

ROE

3.0% or more

2.99%

2.95%

3.0% or moreCore OHR

70.0% or less66.10%

65.04%

65.0% or less

Equity ratio (BIS standard)

15.0% or more

14.38%

14.85%

15.0% or more

Ratio of non-performing loans

2.0% or less

1.48%

1.55%

2.0% or less

Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

11Plans for Loans, Deposits, and Assets in Custody▼Deposits, etc., are planned to be increased approx. ¥676.0 billion during the three years of the MediumTerm Management Plan, with an average balance totaling ¥6,130.0 billion during fiscal 2020
▼Loans are planned to be increased approx. ¥791.0 billion during the three years of the Medium-Term
Management Plan, with an average balance totaling ¥4,909.0 billion during fiscal 2020
Plans for average deposits, etc., balance and assets in custody balance
Fiscal 2017
Results

Fiscal 2018
Results(Units: Billions of yen)

Fiscal 2019
YoY

Results

Fiscal 2020
YoY

Plan

Increase/decreaseduring the Plan

YoY

Average deposits, etc., balance

5,453.7

5,576.3+122.6

5,821.3+245.06,130.0+308.7+676.3

Of which, individual deposits

3,387.1

3,417.2+30.1

3,474.6+57.4

3,650.0+175.4+262.9Group assets in custody balance

544.4

557.4

+13.0

542.2

(15.2)

585.0

+42.8

+40.6

343.0

357.9

+14.9

339.7

(18.2)

350.0

+10.3

+7.0

201.4

199.5

(1.9)

202.4

+2.9

235.0

+32.6

+33.6

Of which, balance of assets in custody at
the Bank
Of which, balance at Shikoku Alliance
Securities

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

Fiscal 2017
Results

Fiscal 2018
Results

Fiscal 2019
YoY

Results

Fiscal 2020
YoY

Plan

Increase/decreaseduring the Plan

YoY

Average loan balance

4,118.0

4,398.6+280.6

4,621.8+223.2

4,909.0+287.2+791.0

Corporate loans

2,784.6

2,940.1+155.5

3,061.2+121.1

3,257.0+195.8+472.4

1,254.3

1,300.4+46.1

1,344.3+43.9

1,440.0+95.7+185.7

Individual loans

996.5

1,034.8+38.3

1,085.2+50.4

1,136.0+50.8+139.5

Municipal loans

236.8

241.5

+4.7

236.6

(4.9)

233.0

(3.6)

(3.8)

Financial Market Business Office

74.4

98.8

+24.4

109.3

+10.5

118.0

+8.7

+43.6

Singapore Branch

25.5

83.2

+57.7

129.6

+46.4

165.0

+35.4

+139.5

Of which, within Ehime

Investor Relations 2020

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12

“Digital-Human-Digital Bank” Business Model
Digital touch point-

Human consulting

Customer contact points(touch points)
Establish interface which enables daily
contact with customers

Digital operation
Relationship with customers throughdigitalization
Create a mechanism to connect withcustomers continuously

Digital touch pointCounseling for customers-

Digital operation
Respond toeach and every customer
through humanity anddigitalization

Provide timely and appropriate information
and advice for customer consultation

Channels not depending on time and place

Consulting

Create a channel to connect “anytime, anywhere”

Customer-oriented suggestions

Investor Relations 2020

Human consulting

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13

Progress in “D-H-D Bank”▼Steadily deploying services combining humans and digital to provide optimal value to customers Present
Up to the Fiscal 2015 MediumTerm Management Plan

Fiscal 2017
Consulting
menus

Reforming
existingmechanisms

Fiscal 2018

Fiscal 2019

Fiscal 2020

ICT consulting businessfrom Fiscal 2021
onwardStaffing business

Introduction of new “HOME” digital home loan service

Top line
Base

Creating new mechanisms(increasing productivity)

Enhancingconsultation
capabilities

Fiscal 2021 MediumTerm Management Plan

Fiscal 2018 Medium-Term Management Plan

Disruptive
service
Introduction of new “SAFETY” digital card loan service

VisionRoadmap
DesignAPIcollaboration

Collaboration with 2 companies

Smartphoneapps

Collaboration with 4 companies

Planning to expand collaboration
to 12 companies

Expanding the scope of inquiries
in MONEY MANAGER

Launching transfer function in
MONEY MANAGER

Further rolling out
D-H-D efforts

Branch Network review

Visualizing
cost
structure

Investor Relations 2020

Planning to increase to 90
branches

Next-generation
branches

Introduced in 43 branches

Introduced in 65 branches

AGENT

Counter reception tablet

Function enhancement: “for Biz,” “attentive listening function,” and“sales liaison by tablets”

RPA

RPA in-house development(digital human resources development)

Consider AI + OCR + RPA
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

14

Consulting Strategy I: Personal Banking▼Provide a wide variety of financial services responding to various customer needs such as increasing assets, inheriting assets and preparing for risks
based on customers’ aspirations in the “100-Year Life Society”▼Established the “wealth advisors” system to provide advanced solutions to meet a wide range of needs and challenges of personal assets of corporate
ownersNumber of Contracts on Assets in Custody
Meeting the Needs of Personal Assets of Corporate Owners●Expanding the base of assets in custody by proposing “long-term investment,”“time diversification” and “asset diversification” such as saving trusts(Hundreds ofMillions of Yen)

Balance ofassets in custody●In April 2019, the Bank established the “wealth advisor” system, building a structure to respond toaspirations and concerns of individual corporate owners as well as corporations(Number)

Customer

Provide various methods forconcerns and challenges

Various concerns of corporate owners
Inheritanceplanning
EquityCorporation

Testamentary
planning
Succession ofreal estate, etc.

March 2019

March 2020

September 2020

March 2021 Plan

Asset

*Contracts on assets in custody: Contracts with balances of investment trusts, single premium policies, public bonds, foreign bonds, structured
bonds, and foreign currency deposits not less than ¥1 and level premium insurance contracts (including Shikoku
Alliance Securities)*Balance of assets in custody: Balance of assets in custody of the Group including Shikoku Alliance Securities plus balance of foreign
currency deposits (individuals)●Medical insurance sales results in fiscal 2019 is No. 1 among regional banks for two
consecutive years (survey by The Japan Financial News)(Number)Number of
sales

Real estate●Since April 2019, the Bank has been strengthening the promotion of assets in custodyfor corporate owners, proposing various methods to meet the needs of corporate
owners as well as corporations.
(Hundreds ofMillions of Yen)

Level Premium Insurance Sales and Number of Policies Held

Number of contracts and balance of assets in custody with corporate owners
Balance ofassets in custody

March 2019

Investor Relations 2020

(Number)Number of contracts(Number)Number ofpolicies held

March 2019

September 2018

Wealthadvisor[Methods to provide]• Various trust products (testamentary
trust, civil trust, etc.)• Real estate incorporation• Inheritance planning by using single
premium insurance=> Collaborate with the business succession
team, etc. to solve the concerns of both
corporations and individuals

September 2019

March 2020

September 2020 March 2021 Plan

September 2020

March 2020

September 2020

*Contracts on assets in custody: Contracts with balances of investment trusts, single premium policies, public bonds, foreign bonds,
structured bonds, and foreign currency deposits not less than ¥1 and level premium insurance contracts(including Shikoku Alliance Securities)*Balance of assets in custody: Balance of assets in custody of the Group including Shikoku Alliance Securities plus balance of foreign
currency deposits (individuals)*Definition of corporate owners: Corporate owners who have transactions with the Bank, and their family members

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

15

Consulting Strategy II: Corporate Banking▼Conducting consulting sales activities to solve customers’ issues for their “future vision” in view of rapid external environment changes and the COVID19 outbreak, and the revenue is steady
Sharing of Management Issues and Optimal Offering of Value throughBusiness Feasibility Assessment

Expansion of Fee Businesses through Enhanced Consulting Functions● Support customers solve management issues using the “Mirai Support Sheet” as abusiness feasibility assessment tool and the “business feasibility assessment
investigation committee” held among the head office and branches(Hundreds ofMillions of Yen)

Total average loan balance of customers for which
the business feasibility assessment investigation committee was conducted(Number)Number of Mirai Support Sheet prepared
Number of business feasibility
assessment investigationcommittee
held
Averageloanbalance

March 2017

March 2018

(Millions of Yen)
Other
Corporate life insurance
Business matching
Business succession/
M&A
Private placement bonds
Syndicated loans, etc.

March 2019

March 2020

September 2020

Start of Staffing Business [from April 2020]● Collaborate with partner staffing agencies to support customers’ hiring activities● Steady start with a total of 173 inquiries including 27 contracts from April 2020, when
the service started, to the end of September(Number)Monthly new inquiries and contracts in staffing business
Number of
new inquiries
Number ofcontracts

September 2018

April 2020
May 2020
Investor Relations 2020

June 2020

July 2020

August 2020

March 2019

September 2019

March 2020

September 2020

March 2021 Plan

September 2020
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

16

Consulting Strategy III: Ship Finance▼Continue to contribute to the development of the maritime industry by developing human resources to pass on the
Bank’s expertise in ship finance
The Bank’s Strength
Number of ocean-going vessels
owned by ship owners in Ehime

Accumulation and utilization of data
● Owns income and expenditure result
data for more than 1,000 ships owned
by customers

No. 1 in Japan
Domestic
Operators
949 ships

Ehime Ship
Owners
1,199 ships(32.7%)

Non-Ehime Ship Owners
1,515 ships

Previously: Used for review of loan casesand company assessment
From now on: Utilized for advice to customers
and exploring new risk-taking
possibilities

Status of Loans for the Maritime Industry●Accumulated quality loan assets through solid efforts of ship finance over a long
period (transactions with 70% of Ehime ship owners)(Hundreds ofMillions of Yen)

Loan balance for the maritime industry
For other maritime industry and overseas
For domestic and overseas ocean transport

IRC survey (As of September 30, 2020)

Expand ship finance human resources● Enhance human resource development, planning and research analysis function in
addition to credit examination and management as roles of the Ship Finance Division●Expand “Ship Finance human resources” in not just Ship Finance Division, but alsoin domestic branch offices and Singapore Branch● Strengthen the ability to provide value to major local industries, ocean transportand shipbuilding, by continuing to develop Ship Finance human resources using
external dispatch, trainee system, etc.

Recent Trends
Impact of COVID-19 on the market and loan assets●The impact of COVID-19 on the ocean transport market is limited●Ratio of performing loans of the Bank’s Ship Finance remains at a high level
Investor Relations 2020

March 2018

September 2018

March 2019

September 2019

March 2020

September 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

17

Online Business Strategy▼Improve CX and strengthen top line by introduction of new digital services▼Functions and service area of “HOME” are being expanded, and convenience of “SAFETY” also continues to be improved
Operational Progress of “HOME,” the New Digital Home Loan Service

Operational Progress of “SAFETY,” the New Digital Card Loan Service●Became more useful by enhancing service function● Expansion of target OS◎Assesses loanable amount in a chat form (as quick as
three minutes!)◎Complete from application through borrowing via the app◎No revenue stamp fees for contracts needed due toelectronic contract◎Digital group credit life insurance applied also for joint
loans (October 2020)◎Launched web-based app for house builders (November
2020)

Patent application was made◎Support for Android (July 2020) in addition to iPhone (May 2020)
Proportion of HOME in total
housing loans in fiscal 2020(as of September 2020)◎About half of all the housing loans have shifted to HOME

●Aiming to improve top line by expanding
service areas(Hundreds ofMillions of Yen)

Paper-based
application● Enhanced security

HOME◎Identification by eKYC (Liquid, inc.), mobile terminal user authentication, etc.

●App downloads andapplications are steadily
increasing

Balance of housing loans(Number)

Total number of “SAFETY” app downloads◎Aiming to increase further by
expanding promotion*Direct mails and telemarketing(September 2020), TV
commercials (October 2020)●Housing loan balances are
steadily increasing◎Core products which are “phasedinterest rate type” are selling well
◎Increased implementation in the
Setouchi region in addition to Ehime.

Investor Relations 2020

● Continuous improvement of convenience forthe future◎Assesses loanable amount in a chat form (as quick as
1 minute!)◎Complete from application through borrowing via theapp◎Notification on the amount expected to be insufficient
based on registered account information◎Repayment via the app is possible at any time
(November 2020)●The use of HOME is steadily expanding◎Expand services to Osaka, Hyogo, andFukuoka (October 2020)* Current service areas: 11 prefectures
including 4 in Shikoku, Osaka, Hyogo,
Okayama, Hiroshima, Yamaguchi,
Fukuoka, and Oita

Patent application was madeMay 2020
March
2018

September
2018

March
2019

September
2019

March
2020

September
2020

June 2020

July 2020

August 2020

September 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

18

ICT Strategy▼Expansion and improvement of digital touch points through improvement of smartphone applications and expansion of
API linkage services
Improvement of Smartphone App

Improvement of the API Linkage Service●Realized API linkage with external services of seven companies in total including
services for individuals and business corporations●Linkage partners will be expanded further and new use cases will be sought including
linkage among different industries

Renewal of “MONEY MANAGER” smartphone app●Updated in November 2020, including
improvement of UI/UX through design
update and installation of a transfer
function utilizing an updatable API●With continuous renewals, the number of
app users remains steady●Further promotion of use of digitalchannels by adding functions continually tothe application

Number of
linkagepartners

May 2019
4 companies

July 2018
2 companies

June 2020
6 companies

October 2020
7 companies

March 2021
12 companies(expected)

Expansion of Digital Touch Point●In fiscal 2020, the number of touch points via digital channels such as apps andwebsites exceeded the number of face-to-face touch points. Enhancement of digitalchannels will continue.

Number of MONEY MANAGER users(Thousand)Number of users by channel(Thousand)Face-to-face channels (counter and visit)

100 thousand

78 thousand
Digital channels (apps, HP, IB and SNS)

50 thousand
42 thousand
32 thousand
22 thousand
March 2016
September 2018

March 2019

Investor Relations 2020

September 2019

March 2020

September 2020

March 2021 Plan

March 2017

March 2018

March 2019

March 2020

September 2020

*The number of people who used the channel more than once a year, or the number of service registrant at fiscal year-end
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

19

BPR Strategy▼Carving out time for solving customers’ issues by strengthening efforts toward a “bank where procedures are thesimplest in Japan”
Launch of “Electronic Contracting Service” for Business Loans

Improvement of Operational Efficiency at Headquarters●Non-face-to-face, headquarters-centralized loan contracting procedures are realized●Productivity of headquarters operation has improved through the use of BPR and RPA

CustomerBank Branch

1. Loan application
3. Uploading contract documents

4. Review and certification of contracts

120 thousand
hours/year

The effect of headquarters workload reduction
Approx. 87 thousand hours/year (as of September 30, 2020)*Personnel conversion: Approx. 44 people

2. Liaison

87 thousand hours/year

Loan Operation
Support Center

PRA
BPR

5. Execution of loans◎Pilot start at four branches in Matsuyama city from October 2020
Targeted for overdrafts and will expand to loans on deeds=> After implementation in all Bank Branches, 8,400 hours of delivery cost
per year will be reduced=> Creates time for sales activities for employees at Bank Branches

March 2018

March 2019

March 2020

September 2020

March 2022 Plan

Improvement of “Agent” Counter Reception Tablet
without Seal or Data Entry

Reduction of the Number of Administrative Staff by BPR●Realized a “person” (Bank employee) serves as a “bank” by off-site use of AGENT
tablets for sales liaison activities●Realized the reduction of the number of administrative staff by promoting BPR anddigitalization of Bank Branch administrations
Amount of administrativeBank
employee

CustomersBank
employee

Number of administrative staff

work (thousand seconds)

Workplaces

Plans to downsize administrative
staff to 650 *As of September 30,
2020: (270) persons

Universities

Amount ofadministrative work
Number ofadministrative
staff

Shopping
center, etc.

“AGENT” Counter
Reception Tablet◎Started off-site use of “AGENT” from July 2020=> Expanded business opportunities by taking “AGENT”
to off-site locations

Investor Relations 2020

March 2018

March 2019

March 2020

September 2020

March 2025 Plan

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

20

Branch Strategy
Shift Branches to a “Place Where Customers’ Issues Are Solved”
from a “Place Mainly for Administrative Tasks”●September 2020: Yawatahama Branch renewal open
Guides customers to a proper counter according to their needs
Functions◎New counterreception system

Number of branches

Number of ATMs

◎Sorting out excessive branches◎Reducing excessive number of ATMs to the proper
number, maintaining cash points for customers(Number ofbranches)

General reception

Purposes◎Account opening◎Various registrations◎Asset management◎Loans, etc.

Review of Branches and ATM Locations(Number)Number of ATMs

Number of branches (excl. branches within branches)

Purposes◎Deposits andwithdrawals◎Payment of tax
and utilities◎Transfer, etc.

Consulting lobby

Transaction lobby

March 2018

March 2019

March 2020 September 2020 March 2021
Plan

March 2018

March 2019

March 2020 September 2020 March 2021
Plan

Review of Branch Functions
Introduction of the Group Head system

Change of business hours(Number ofbranches)◎Extension of business hours (3 branches)
Matsuyamakita Branch, Yogo Branch, andYawatahama Branch✓ Extended business hours for consultation
services that lead to business solutions[Business hours] 9:00 a.m. to 5:00 p.m.

Core branches
Linked branches (incl. branches within branches)

Place to provide customers with solutions

Realization of cashless processing

FeaturesFeatures◎Limited to various registrations and consulting services,
reception counter is open until 5:00 p.m. on weekdays◎Customers’ issues are carefully listened to in a
comfortable environment◎Holding open seminars for digital signage◎Cashless processing and transaction without aslip (less burden of filling out) are realized

Functions

Functions◎Satto Madoguchi (Quick Counter), deposit
machines at lobby, day depositor, etc.

March 2018

March 2019

March 2020 September 2020 March 2021
Plan

◎Adopted lunch break (8 branches)
Kuwabara Branch, Ikazaki Branch, etc.
✓Branches are managed efficiently with minimum
staffing.
[Business hours] 9:00 a.m. to 11:30 a.m., 12:30
p.m. to 3:00 p.m.

◎AGENT System, large digital signage, etc.
Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

21

[Market Strategy I]:
Strategic Asset Allocation Responding to Continuing Low Interest Environment▼Continue to make diversified investments emphasizing liquidity to build a portfolio with superior risk versus return for responding to the market environment▼Ensure stable earnings by accumulation centering on foreign currency bonds (with/ without forex hedges) with flexible risk control▼Continue to manage with an awareness of total profit/loss which leads to future earnings from a medium- to long-term viewpoint, not just periodic profit/loss

New Investment Policy by Risk Category(Risk category)

Securities Performance(Hundreds ofMillions of Yen)

(New investment policy)

Yen-denominatedbonds

Not change

view of interest trends.

◎In a continuing low interest environment in Japan, keep the balance as a

Foreign bonds (withforex hedges)

Increase

Foreign bonds (without
forex hedges)

Increase◎Plan investment with forex risk to secure stable profit from carry trading

Domestic and overseas
stocks (including
investment trust)

Decrease◎ Assess and classify strategic equity holdings in terms of investment andAlternatives, etc.

Not changebond including foreign bonds with hedges.

(with strategic re-balancing to be implemented).

March 2018

policy, and sell off stocks if the necessity of holding is not recognized◎Consider investment to secure stable carrying and portfolio diversification.

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

Foreign bonds (with forex hedges)
Alternatives, etc.

March 2019

March 2020

Total Yield(Domestic currency
yield)(Foreign currency
yield)

Balance of Securities at Market Value by Risk Category(Hundreds ofMillions of Yen)

4,738

Periodic profit/loss (= Interest and dividend income + gain (loss) related to securities)
Total profit/loss (= Periodic profit/loss + change in gain/loss on evaluation)◎Keep a certain amount as assets inversely correlated with stocks, while in(Hundreds ofMillions of Yen)

September 2020

Last 10 years (total)*For March 2021, values
recorded only for the first half

Portfolio Risk Sensitivity and Duration●Portfolio risk sensitivity

Foreign bonds (without forex hedges)

Impact of fluctuations in interest rates, stock prices, and exchange rates on gain (loss) on valuation of securities
New
investment◎Yen-denominated bond portfolio◎Foreign bond portfolio (with hedges)◎Stock portfolio◎ Forex portfolio

10BPV¥3.0 billion
10BPV¥2.8 billion
Nikkei Stock Average ¥1,000V ¥10.0 billion
USD/JPY ¥10V
¥24.5 billion (*As of September 30, 2020)●Duration(Of which,
JGBs)

10 years
8 years
6 years
4 years
Yendenominatedbonds

2 years
Balance atMarket Value

March 2018

March 2019

March 2020

September 2020

March 2021 Plan

18,20015,84817,163

18,431

18,700Investor Relations 2020

0 years

March 2018

March 2019

March 2020

September 2020

Foreign bonds(with forex hedges)

March 2021 Plan

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

22

[Market Strategy II]:
Ensure Earnings from Market Investment and Stabilize Foreign Currency Procurement▼Build up quality assets mainly in the Singapore Branch and Financial Market Business Office with regard to safety▼Maintain profitability by stable foreign currency procurement and reduction of procurement cost
Status of Foreign Currency Investment and Procurement(September 30, 2020)

Singapore Branch(Hundreds ofMillions of Yen)

(Millions of Yen)

Gain (left axis)

Year-end balance (right axis)●Stable procurement methods are selected in view of asset structures while foreign
currency assets increased●Control procurement costs by seizing the declining phase of market interest rates●Secure stable procurement methods with commitment lines even when market
conditions rapidly change<Loans + Market Investment (Securities)>

March 2019

March 2020

Investment

March 2018

March 2021 Plan

Procurement

September 2020
Year-end balance ¥160.6 billion
Gain ¥0.97 billion

Financial Market Business Office(Hundreds ofMillions of Yen)

(Millions of Yen)

March 2019

Deposits, etc.

Long-term
procurement

Short-term procurement

Repo procurement

Flexibly utilize foreign currency procurement methods
responding to market conditions<Only Loans>

March 2020

March 2021 Plan
September 2020
Year-end balance ¥116.4 billion
Gain ¥0.45 billion

Investor Relations 2020

Securities, etc.

Mainly assets with low liquidity

Year-end balance (right axis)

Procurement

March 2018

Loans

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

Investment

Gain (left axis)

Mainly assets with high liquidity

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

Loans

Loans with multi-currency terms

Procurement is conducted with stable funds forlong-term loans

Deposits, etc.

Long-term
procurement

Commitment line
Cash flow risk is guaranteed withcommitment lines

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

23

Efforts for SDGs I: Local Economy and Community▼Continue to focus on efforts for promoting growth in local economies and regional development, and contribute toenriching the lifestyles and developing the businesses of customers
Revitalization of Local Economy
by Supporting Business Foundation and Business Succession
Crowdfunding

Number by category(Number)Businessfoundation

New
products
and new

Total Regional
revitalization
46 cases

services
March 2019

September 2019

March 2020

September 2020

Iyo Bank Social Welfare Fund (Public Interest Incorporated Foundation)
 Contributing to improving social welfare and human resource development
for the next generation
 Cumulative total of ¥675 million has been granted since its foundation in
1976(Total as of September 30, 2020)

Scholarships, employment benefit, etc.

2,503 persons¥483 million

Donation of social welfare equipment,
etc.

371 destinations¥192 million

Number of business foundation support
March 2019

March 2020

September 2020

205

255

167

Of which, start-up loans (with/without
Credit Guarantee Association)

93

72

136

Of which, referrals to governmentaffiliated financial institutions and startup support organizations

43

50

6

Of which, venture companies registeredfor grants or investments

26

25

7

March 2019

March 2020

3,504

3,746

Business foundation planning support*Businesses within 3 years of establishment are counted

Efforts of a Regional Trading Company by Shikoku Alliance Established SHIKOKU BRAND inc., a regional trading
company, as a joint investment by four banks in April
2020 to support branding and sales channel developmentof Shikoku resources More than 200 consultations were made despite therestriction of sales activities due to the impact of
COVID-19, showing high expectations from the region

Number of business succession support
Number of companies supported with businesssuccession
Investor Relations 2020

*1. Number of support related to treasury stock evaluation and business succession (consulting, loans, corporate
insurance, etc.)*2. The total number of businesses supported since fiscal 2014 is recorded in the figure, as the Bank has been
supporting business succession at full scale since fiscal 2014.
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

24Efforts for SDGs II: Financial and Information Services▼Aiming to provide advanced, high-quality and integrated financial and information services
Efforts with ICT Consulting

Efforts with ESG/ SDGs Related Private Placement Bonds●Supporting the introduction of ICT, which enables customers to respond to workstylechange due to work style reforms and the COVID-19 crisis, in addition to improving
operational efficiency and sales capabilities●Financial support for customers engaged in ESG/SDGs(Millions of Yen)

Number of ICT consulting cases(Number)“Kaisha-no-Mirai”
SDGs“Chiiki no Mirai”“Manabiya”
Environment
September 2018
September 2018

March 2019

September 2019

March 2020

September 2020

Introduction of Iyogin Big Advance,a Management Support Digital Platform●Started in October 2020 to respond to the new normal and improve productivity andoperational efficiency of both customers and the Bank
●Aiming to solve customers’ issues and enhance the Bank’s trading base by utilizing
various digital contents

March 2019

September 2019

March 2020

Iyogin Financial Education Class●Financial education activities for people of all ages, from elementary school students
to adults●Number of participants: 14,343 in total (as of September 30, 2020)●Started streaming Financial Education Class on the Bank’s official YouTube accountin April 2020 (total of 5 sessions)(Persons)<Iyogin Junior Mirai Juku>[Number of participants of Financial Education Class]

March
September
March
September
March
September
2018
2018
2019
2019
2020
2020
*Total from March 2007
*Visiting class, bank tour, seminars for kids, Economics Koshien, etc.

Investor Relations 2020

September 2020

March 2021
Plan

Lesson program in line with school
curriculum guidelines and financial
literacy map

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

25

Efforts for SDGs III: Strong Management Foundation▼Set corporate governance as a top management priority and build structures to secure transparency and objectivityof management
Governance System

Building Structures for AML Enhancement●Build structures that secure transparency and objectivity of management●Bring together the knowledge and expertise of each bank regarding AML
and aim for sophistication

Management Deliberation Committee

Advisory Board

ReportDeliberation on the Consult
nomination of andcompensation for
Directors, etc., andimportant mattersregardingmanagement

Evaluation and advice
on the Bank’s
management strategy
and governance

Board ofDirectors

Internal Directors

Independent
Outside Directors

Audit and Supervisory Committee◎1/3 or more of Directors are Independent Outside Directors◎Appointment of female Directors◎Strengthening of audit and supervision functions and revitalizationof the Board of Directors
Investor Relations 2020

Established a joint investmentcompany(July 2020)

TSUBASA Alliance Co., Ltd.
◎Established AML (Anti-Money Laundering) Center in October 2020
*Gunma Bank is considering investing in TSUBASA Alliance Co., Ltd.
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

26

Efforts for SDGs IV: Diversity and Work Style Reforms▼Strengthen efforts to realize an organization and a society where diverse human resources can thrive
Efforts with Gender through ESG Investment●First regional bank in Chugoku and Shikoku regions to invest in gender bonds
issued by the Asian Development Bank
●Financial support for the Asian Development Bank’s activities for theachievement of gender related SDGs
Investment amount
50 million US dollars (about ¥5.2 billion), 10 years
and period
1. Women’s economic empowerment
2. Gender equality in human resources development
3. Reduction of women’s household work
Projects
invested in
4. Women’s participation in policy making and leadership
5. Improving women’s resilience to disaster and climatechange risks
Issuing entity

Asian Development Bank

Creating Work Environment That Respects Flexible Work Styles●Development of human resources by accepting side businesses◎Currently, 19 employees
are conducting sidebusinesses such as
website development,
creator business andrestaurant planning.

●Business casual trials◎Conducting business casual trials
with the goal of increasing job
satisfaction by respecting diverse
valuesDevelopment of Diverse Human Resources
with Abilities and Qualities Adapted to the Times●Development of digital human resources<Drinking water improvement project><Access to higher education><Microfinance>◎ Dispatching employees to external institutions proactively for the purpose ofobtaining knowledge and skills in data analysis and utilizations◎Revised the official qualification incentive program to expand the scope ofrecommended qualifications, such as qualifications related to information
processing, web and marketing

Source: Prepared by the Bank based on the “ADB Gender Bond Newsletter,” Asian Development Bank, July 2019
Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

27

Efforts for SDGs V: Environmental Protection▼Actively and continuously reduce the environmental burden and participate in activities for environmental protection,and contribute to preserving and protecting the natural environment
Efforts with Financing for Environmental Protection

Promoting Paperless●Promote financing that contributes to environmental protection centering on
renewable energy
Number of arranged project finance for renewable energy(Total as of September 30, 2020)●Promote the reduction of paper use by digitization of forms and paperless meetings◎Introduced an electronic approval system (April 2017)◎Implemented paperless meetings by loaning laptop PC to all executives andemployees (March 2019)◎Introduced a new groupware (April 2019)

Solar power generation

13

Biomass generation

4

Number of other environmental loans executed
Loans relating to the interest subsidy business
implemented by the Ministry of the Environment
Arrangement of syndicated loans for investment funds forgreen bonds(Total as of September 30, 2020)

9
1●Measures for natural disaster risk: using IoT technology for flood-responsive
financing◎Added immersion detection and notification service by IoT technology to floodresponsive financing (September 2020)◎IoT water depth sensors are installed on business premises, and in case water
immersion is detected, the principal amount of loan is waived

Flood-responsive financing (started in August 2019)
A loan that waives a predetermined percentage of the principal amount when
precipitation above a certain level is observed at a predetermined location,
regardless of whether there is direct/indirect damage
Investor Relations 2020

✔Number of forms reduced✔Amount of paper usage reduced: 120 forms (Vs. March 31, 2019): Approx. 5.3 million sheets during the year
≒ approx. 400 forest planted trees(Vs. fiscal 2016) *0.7 yen per sheet of A4 copy paper

Environmental Protection Activities in the Region
Iyo Bank Environment Foundation “Evergreen” (public trust) established in 2008
●Support environmental protection activities by handing
down the nature of the region to the next generation◎Fund support for individual and organizational
activities to protect natural environment of the region◎Granted about ¥55 million to 153 recipients in total“Iyo Bank Evergreen Forest” activities started in 2008
●Promote forestation with local community◎Activities to grow forests in four areas within Ehime
Prefecture◎Planted about 3,250 trees, contributing to an increaseof about 39t of CO2 absorption since its establishment
in 2008
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved. 28

Strengthening Cooperation with Group Companies▼Capital structures of the Group Companies were reviewed in the period between the year ended March 31, 2020
and the year ending March 31, 2021, in order to increase the Group’s ownership ratio▼Aiming to continue to strengthen cooperation with the Group companies and become a consulting groupproviding value to customers in various waysBank

Iyo Bank

Leasing

Systemdevelopment

Iyogin Leasing

IyoginComputerService

Investor Relations 2020

Securities

Creditguarantee

Credit card

Shikoku Alliance
The Iyogin
Iyogin DC Card
Securities
Credit Guaranty

Venture capitalThink tank

Administrative
consignment,etc.

Administrative
consignment,etc.

Iyogin Capital

Iyogin Regional
EconomyResearchCenterThe Iyogin
Business
Service

IyoginChallenge &Smile

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

29

Profit / Loss Forecasts for Fiscal 2020
▼Interest and dividend income to increase due to increases in both gain on loan management and gain on
securities management▼Fees and commissions to decrease due to reduced face-to-face business opportunities resulting in decreases
in revenue on assets in custody, foreign exchange commissions, etc.
▼Net income to record ¥16.0 billion assuming an increase in credit costs in the COVID-19 environment, despite
an increase in core business net income(Units: Billions of yen)

Fiscal 2019
results

Fiscal 2020
forecast

Core business gross profit

76.7

78.5

+1.8

Of which, interest and dividend
income

66.2

69.0

+2.8

Of which, fees and commissions

7.1

6.5

(0.6)

Expenses (-)

49.9

49.5

(0.4)

Factors Contributing to Increase / Decrease in Core Business Gross Profit(Fiscal 2020 - Fiscal 2019)(Units: Billions of yen)

YoY

(Note) Differences in yield utilize yield differences with deposits, etc.
Gain on loan management(¥47.5 billion)+0.5
Interest anddividend income(¥69.0 billion)

Yield difference factors, etc. (2.6)(Yield difference down 0.05%)

Gain on securities
management(¥22.0 billion)

Volume factors +1.7
(Average securities balance up¥100.7 billion)

Core businessgross profit(¥78.5 billion)+2.5

Yield difference factors, etc. (0.0)

+1.8

Other
(-¥0.5 billion)+2.8

Of which, personnel expenses

25.8

25.5

(0.3)

Of which, nonpersonnel
expenses

21.2

21.0

(0.2)

Core business net income

26.8

29.0

+2.2

Credit costs ( -)

6.9

12.0

+5.1

Gain (loss) related to securities

3.5

4.5

+1.0

Ordinary income

26.5

23.0

(3.5)

Other
(¥3.0 billion)

Net income

18.5

16.0

(2.5)

(0.4)

Investor Relations 2020

Volume factors +3.1
(Average loan balance up ¥287.2 billion)

Fees andcommissions(¥6.5 billion)(0.6)

Gain on fund cancellation factors +0.8

(0.2)
Decrease in revenue on assets in custody, foreign exchangecommissions, etc.

Decrease in gain (loss) on foreign exchange transactions, etc.
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

30

Future business results contained in this document are based on information available as ofannouncement and assumptions regarding uncertain factors that may affect future business results.
Future business results may differ due to changes in the management environment, etc.

<For inquiries regarding this document> Nakatani, General Planning Division, Iyo Bank TEL:089-907-1034/FAX:089-946-9104

Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

Iyo Bank First Half of
Fiscal 2020 Earnings Briefing:
Reference Materials

December 4, 2020

Index of Reference Materials

Overview of the Iyo Bank

Pg

Conditions in Loans and Deposits

Pg◎Iyo Bank Profile

2◎Breakdown of Balance of Loans and Deposits at End of Period

12◎Branch Network

3◎Balance and Composition of Loans by Industry

13◎Summary of the Iyo Bank Group

4◎Table of Changes in Borrower Classification

14

Environment Surrounding the Iyo Bank

Pg

Status of Market Investment, Risk Management and Dividends

Pg◎Main Industries in Ehime Prefecture

5◎Management by Risk Category: Securities Investment

15◎Manufacturing Industry in Ehime Prefecture

6◎Balance of Investments by Region and Industry: Financial Market Business16◎Industrial Structure of the Setouchi Region

7◎Status of Integrated Risk Management

17◎Economic Indicators of the Setouchi Region I

8◎Dividend Trends and Shareholder Benefit Program

18◎Economic Indicators of the Setouchi Region II

9

Status of Ocean Transport-Related Market

Pg◎Shipbuilding Yards in Ehime Prefecture

10◎Outlook of Dry Bulk Market Conditions

11

Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

1

Iyo Bank Profile
Head Office

Matsuyama, Ehime Prefecture

Year of foundation

March 15, 1878 (The 29th National Bank)

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

Number of employees

12 Officers, 2,754 employees (excluding temporary staff)
149 domestic (including 13 branches within branches, 7 sub-branches), 1 overseas (Singapore)

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

External credit ratings

A-: Standard & Poor’s (S&P)
AA: Japan Credit Rating Agency (JCR)

Consolidated equity ratio (BIS standards)

15.28%

Consolidated subsidiaries

16 companies

Consolidated employees (excluding temporary staff)

3,128 persons(As of September 30, 2020)

Investor Relations 2020

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2

Branch Network▼Created the No. 1 regional bank in terms of broad regional coverage, in 13 prefectures centered on the Setouchi region▼Established a strong operating base by expanding outside of Ehime Prefecture from long ago
Timing of opening key branches outside of Ehime

Number of branches

Chugoku region:
9 branches

1909: Usuki (Oita); 1919: Nigata (currently Kure);
1947: Takamatsu, Kochi, Oita; 1950: Hiroshima;
1952: Osaka; 1954: Tokyo; 1958: Tokushima;
1963: Kitakyushu; 1964: Okayama;
1965: Nagoya; 1966: Kobe;
1971: Fukuoka; 1979: Tokuyama (Yamaguchi)

149 domestic
1 overseas
Hyogo

Okayama

Hiroshima

Osaka
KagawaYamaguchi

Fukuoka

Kinki region:
5 branches

Within Ehime:
117 branches

Tokushima
Kochi

Oita

Kyushu region:
8 branches

Shikoku region, excluding Ehime:
7 branches

11 prefectures in
the Setonaikai region

Tokai region: 1 branchTokyo region: 2
branches
Overseas: 1 branch
Representative offices:
2 offices(As of September 30, 2020)(Note) The Internet branch is included in the number of branches within Ehime Prefecture.
Investor Relations 2020

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3

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

Consolidated Earnings
SummaryFirst half of
Fiscal 2020

[Consolidated]

First half of
Fiscal 2019

Consolidatednonconsolidated
Difference (Note)

64,203

9,930

Ordinary revenue

63,705(498)

Increase/
Decrease(0.8)%

Ordinary income
Profit attributable to owners ofparent20,144

3,814+23.4%

16,330666

13,9972,958+26.8%

11,039358

YoY(Note) The difference between consolidated andnonconsolidated. The Bank has acquired
additional shares of consolidated
subsidiaries during fiscal 2019 and thefirst half of fiscal 2020. By this additional
acquisition, the Group’s shareholding
ratio increased, and profit attributable toowners of parent increased by about¥255 million.

List of Iyo Bank Group Companies
Banking business

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

The Iyogin Credit Guaranty Company Limited

Credit guarantee business for housing loans and consumer loans, etc.

The Iyogin Business Service Company Limited

Cash organization and inspection business, maintenance and management business of automated cash facilities, etc.
Investment business for stocks and corporate bonds, etc., management of investment funds, etc.

Iyogin Capital Company Limited
Iyogin Venture Fund Corporation Limited IV

Investment business to venture firms

Iyogin Venture Fund Corporation Limited V

Investment business to venture firms

Iyogin Venture Fund Corporation Limited VI

Investment business to venture firms

Iyo Bank

Iyo Evergreen Sixtiary Industrialization Support Fund Investment Business Limited Partnership

Investment business to sixtiary industrialization bodies

Iyo Evergreen Agriculture Support Fund Investment Business Limited Partnership

Investment business to agricultural companies

Iyo Evergreen Agriculture Support Fund Ⅱ Investment Business Limited Partnership II

Investment business to agricultural companies

Iyo Evergreen Business Succession Support Fund Investment Business Limited Partnership
Iyogin Regional Economy Research Center, Inc.

Investment business to business succession targets
Investigation and research business regarding industry, economics, finance, etc.

Iyogin DC Card Co., Ltd.

Credit card business, guarantee business, etc.

Iyogin Challenge&Smile Co., Ltd.

Manufacturing business for office supplies, etc.

Leasing business1 consolidated subsidiary

Iyogin Leasing Company Limited

Lease business, etc.

Other

2 consolidated subsidiaries

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

2 non-consolidated non-equity method subsidiaries

4 non-equity method affiliates

Securities businessIyogin-Ehime University Originated Venture Support Fund Investment Business Limited Partnership

Investment business in startup companies originating in Ehime University

Iyo Evergreen Business Succession Support Fund Ⅱ Investment Business Limited Partnership II

Investment business to business succession targets (established June 1, 2020)

Iyogin REVIC Investments Co., Ltd.
Shikoku Alliance Capital Co., Ltd.

Investment fund management business
Investment fund management business

Ozu Machidukuri Fund

Investment business to community development business

Shikoku Brand Co., Ltd.

Support business for branding and development of sales channels of regional products (established April 1, 2020)(As of September 30, 2020)

Investor Relations 2020

Consigned information processing business, software development business, etc.

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4

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

Imabari Region
32.7%(1,199 ships)

Total national share of Ehime Prefecture

Matsuyama Region

65.0%(¥34.8 billion)

No. 1 in Japan

No. 1 in Japan

Number of ocean-going vessels owned by domestic shipowners (as of September 2020) (Note 1)
3,663 total vessels in Japan (including operators)

Towels (2018)¥53.6 billion shipped in Japan(Note 2)

(Note 2)The Matsuyama region has companies with large
shares in products such as “small once-throughsteam boilers,” “farm machinery,” and “driedbonito shavings.”

Uwajima Region
14.1%(¥68.4 billion)

No. 1 in Japan(Note 2)

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

Niihama Region

Shikokuchuo Region

Manufactured product shipments(2018)

7.2%(¥542.1 billion)¥1,740.4 billion

Approx. 41% of shipments ofmanufactured products in Ehime
As a corporate town under the Sumitomo
Group, nonferrous metal, chemicals, steel,machinery and equipment are concentrated
particularly in the Niihama region.

No. 2 in Japan(Note 2)

Pulp and paper industry (2018)¥7,548.4 billion shipped in Japan(Note 1) Iyogin Regional Economy Research Center, Inc. (IRC) estimates; the ranking in Japan excludes operators.
(Note 2) Ranking of Ehime Prefecture
Investor Relations 2020

Source: Prepared based on the Ministry of Economy, Trade and Industry’s “Census of Manufacture 2019” (2018 results) and the Ministry of Agriculture,
Forestry and Fisheries’ “total fishery output for 2018.”
Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

5

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

Others

Production
machinery

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

Coal and oil

Matsuyama¥421.3 billion
Food
products

Generalpurpose
machinery

OthersImabari¥971.3 billion

FibersFood products

Chemicals

MetalsCeramics andquarrying

Food products
Fibers
Production machinery

Electric
machinery
OthersOthersGeneralpurpose
machinery

Beverages and tobacco(Note) The shipment amount of “coaland oil” for Imabari City is a concealed
value for statistical purposes, thus it isincluded in “others.”
Source: Prepared by Iyogin Regional
Economy Research Center, Inc. (IRC)
based on the Ministry of Economy, Tradeand Industry’s “Census of Manufacture2019” (2018 results).
Investor Relations 2020

Production
machinery

Saijo¥845.0 billion

Nonferrous
metal
Plastics

Plastics
Nonferrous
metal
Niihama¥895.4 billion

Shikokuchuo¥644.7 billion
Pulp, paper, andpaper processing

SteelTransportation
machinery

OthersChemicals

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6

Industrial Structure of the Setouchi Region▼The Setonaikai coastal region has established various industrial structures
Automotive, oil refining,steel
Shipbuilding, oceantransport, oil, towels andgarments
Automotive, shipbuilding,electronics

Okayama
Shipbuilding, textiles
Hiroshima
KagawaElectronics, farmmachinery, chemicals,
tourism

ImabariNiihama
Saijo
Matsuyama

Citrus, food processing

Shikokuchuo
Paper manufacturing andprocessing

Ozu
Yawatahama
Oita

UwajimaSteel, automotive,
electronics, tourism

Investor Relations 2020

Chemicals, electronics,
nonferrous metal, generalmachinery

Culture fishery

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7

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

Total area
(Geospatial
Information
Authority of Japan)

October 2019

July 2020(Persons)
1,339,215

2016

Number of employees(Private sector,
excluding public
sector)Prefecture total
production(Nominal)

Prefectural grossproduct growth rate
(Real)

Prefectural income
per capita
Fiscal 2017

Fiscal 2017

Fiscal 2017

(Persons)
566,761

2016(Billions of yen)
5,149.8

(%)

5,676

(Offices)
63,310Total of the above nine prefectures (A)956,347
727,977
698,029
1,135,434
5,103,679
1,358,336
2,804,177
1,889,586
16,012,780

1,877
4,147
7,104
6,341
4,987
6,113
8,480
7,114
51,83946,77435,85335,36652,973
212,649
61,385127,057
79,870715,237

429,167
301,688279,196483,206
2,236,269
577,791
1,302,074
820,656
6,996,808

3,845.9
3,156.9
2,429.5
4,510.0
19,679.2
6,413.1
11,790.8
7,813.2
64,788.4(A)/(C)
Hyogo
Total of ten prefectures (B)12.7%
5,466,190
21,478,970

13.7%
8,401
60,24013.4%
214,169
929,406

12.3%
2,203,102
9,199,910

11.5%
21,328.8
86,117.2

17.0%

15.9%

17.4%

16.2%

15.3%

126,166,948

377,977

5,340,783

56,872,826

561,523.4

Ehime
KagawaTokushima
Kochi
Oita
Fukuoka
Yamaguchi
Hiroshima
Okayama(B)/(C)
National total (C)Total of ten
prefectures
17.0%

Total population(Population
estimate)(October 2019)（ｋ㎡）

Number of offices(Private sector,
excluding public
sector)Total of nine
prefectures(excluding Hyogo)
12.7%

Total population(Population
estimate)(October 2019)

Total of ten
prefectures
15.3%

Gross prefectural
product(Nominal)(Fiscal 2017)(Thousands of yen)
＋ 2.6
2,741
＋ 1.5
＋ 2.1
＋ 0.4
＋ 3.5
＋ 2.3
＋ 2.6
＋ 0.5
＋ 2.2

3,018
3,091
2,650
2,710
2,888
3,258
3,167
2,839

＋ 2.2

2,966

＋ 2.0

3,304

Total of nine
prefectures(excluding Hyogo)
11.5%

Gross prefectural
product(Nominal)(Fiscal 2017)

Source: Prepared based on the Statistics Bureau of Japan’s “Population Estimates,” the Geospatial Information Authority of Japan’s “Statistical reports on the land area by prefectures and municipalities in Japan,” the Ministry of Internal
Affairs and Communications’ and Ministry of Economy, Trade and Industry’s “Economic Census” and the Cabinet Office’s “Annual Report on Prefectural Accounts”
Investor Relations 2020

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8

Economic Indicators of the Setouchi Region II
Manufactured
product shipments

Annual wholesale
sales amount

Annual retail sales
amountIndustrial production
index(annual average)

Number of new
housing starts

Jobs-to-applicantsratio(annual average)

Overallunemployment rate(annual average)

2018(Millions of yen)

2016
(Millions of yen)

2016
(Millions of yen)2019
2015=100

2019(Homes)2019(Times)

2019
(%)

Ehime

4,264,038

2,511,264

1,528,554

99.9

7,756

1.64

Kagawa2,769,479

2,619,010

1,169,352

106.5

5,680

1.80

1.6
2.0

Tokushima

1,853,356

904,487

757,121

101.3

4,122

1.50

1.9

Kochi

594,523874,256

753,371

99.8

3,310

1.29

1.9

Oita

4,438,950

1,344,689

1,235,257

96.1

6,926

1.53

2.0

Fukuoka

10,237,865

16,970,699

5,864,032

105.1

39,860

1.57

2.8

Yamaguchi
Hiroshima

6,701,163
10,039,720

1,641,957
9,166,762

1,488,895
3,309,726

107.0
100.7

7,311
18,845

1.62
2.05

1.8
2.4

Okayama

8,354,250

3,543,971

2,093,111

101.4

13,2002.02

2.3

Total of the above nine prefectures (A)

1.43

2.3

1.60

2.4

49,253,344

39,577,095

18,199,419

107,010(A)/(C)

14.8%

9.1%

12.5%

11.8%

Hyogo

16,506,736

10,219,241

5,726,476

Total of ten prefectures (B)65,760,080

49,796,336

23,925,895

139,120

19.8%

11.4%

16.5%

15.4%

331,809,377

436,522,525

145,103,822(B)/(C)
National total (C)Total of ten
prefectures
19.8%

Manufactured
product
shipments(2018)

Total of nine
prefectures(excluding Hyogo)
14.8%

Manufactured
product
shipments(2018)

104.1

32,110101.1

905,123

Total of ten
prefectures
15.4%

Number of new
housing starts(2019)

Total of nine
prefectures(excluding Hyogo)
11.8%

Number of new
housing starts(2019)

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

Investor Relations 2020

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9

Shipbuilding Yards in Ehime Prefecture
Fujiwara Shipbuilding Co., Ltd.
I-S Shipyard Co., Ltd.
Yamanaka Shipbuilding Co., Ltd.
Hakata Shipbuilding Co., Ltd.
Murakami Hide Shipbuilding Co., Ltd.
Shimanami Shipyard Co., Ltd.

Namikata Shipbuilding Co., Ltd.
Okashima Zosen Co., Ltd.

Iwagi Zosen Co., Ltd.

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

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

Onishi Shipyard,
Shin Kurushima Dockyard Co., Ltd.

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

Saijo Shipyard, Imabari Shipbuilding Co., Ltd.

15 Groups, 22 Offices
Source: Prepared by the Bank based on “Documents for Shipbuilding Under Jurisdiction” published by the Shikoku Land Transport Office*Shipbuilding facilities currently in operation either constructing or repairing steel vessels of at least 500 gross tons or 50 m or longer
Investor Relations 2020

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

Future Market Outlook◆Volume of cargo movement and shipping tonnage◆Baltic Dry Index (BDI) trends
Maximum value
11,793 (May 2008)

Growth rate of cargo movement
Growth rate of shipping tonnage

Average from 2000
onward: 2,268

Minimum value 290(February 2016)

Source: ”Clarkson Research Shipping Review & Outlook” (Fall 2020)”(Plan)(Plan)◆Dry bulk transport demand and supply◎Shipping tonnage of dry bulk vessels for 2020 is expected to increase by 3.3% (up29.4 million tons) from 2019. The growth is still at a high level despite a slowdown
from the increase in 2019. The volume of cargo movement is expected to decreaseby 3.4% from 2019 due to the impact of COVID-19.
◎The growth rate of shipping tonnage is expected to be limited to 1.4% in 2021 as
growth of 12.3 million tons is expected. Meanwhile, cargo movement is expected to
grow at 4.1%, which indicates a V-shaped recovery. As dry bulk market is highly
dependent on demand in China, economic activities and policies of China continue
to require close attention.
Investor Relations 2020

2000/92005/92010/92015/91,725(September 2020)

2020/9◆Future market outlook◎During the first half of 2020, affected by the sluggish global economy due to the impact
of COVID-19, there were times the market reached at a low level as severe as that of
the maritime depression in 2016. Thereafter, the market recovered sharply mainly due tothe resumption of China’s economic activities and the increase of shipments to China.
◎Moving forward, the market is expected to rise toward the end of 2020 and settle downaround the beginning of 2021, then continue to rise throughout 2021 as the volume ofcargo movement is expected to recover while the volume of new ship construction islimited.
◎However, the outlook is uncertain due to unpredictable factors such as the impact on themarket of COVID-19 and the presidential election in the U.S.
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11

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

3,936.3
3,705.5
2,729.5
2,729.5
976.0
710.6
179.1
29.2
230.7

Corporate loans (incl. overseas, etc.)
Corporate loans (domestic branches)

Individual financing
Housing loans
Apartment and building loans
Card loans
Municipal loans, etc.

(Units: Billions of Yen)
March 2017

September 2017

4,043.3
3,802.3
2,807.4
2,806.0
994.9
723.8
184.0
29.6
241.0

4,132.4
3,899.0
2,891.8
2,864.4
1,007.1
731.2
186.3
30.0
233.4

(Note) The figures shown for apartment and building loans are the total of the ""institutional finance"" portion.

March 2018
4,292.6
4,054.6
3,030.6
2,965.5
1,024.0
742.6
191.3
29.6
238.1

September 2018
4,431.5
4,192.2
3,146.0
3,060.4
1,046.2
758.2
198.0
29.1
239.2

March 2019
4,550.8
4,310.7
3,238.2
3,135.8
1,072.4
781.0
202.2
28.3
240.1

September 2019
4,617.5
4,387.7
3,291.1
3,158.3
1,096.5
805.3
203.1
27.9
229.7

March 2020
4,756.6
4,522.2
3,397.9
3,248.8
1,124.3
831.8
205.2
26.9
234.3

2. Breakdown of balance of assets in custody such as deposits, etc. at end of period
September 2016

March 2017

September 2017

September 2020
4,874.5
4,648.1
3,507.7
3,347.1
1,140.3
852.6
205.2
24.5
226.4

Vs. September 2019

257.0
260.4
216.6
188.8
43.8
47.3
2.1
(3.4)
(3.3)

(Units: Billions of Yen)
March 2018

September 2018

March 2019

September 2019

March 2020

September 2020

Vs. September 2019

Total deposits, etc. + assets in custody A

5,644.4
5,317.8
4,892.9
3,343.4
1,392.1
117.1
31.3
8.7
424.9
293.5
131.4
1,685.7
248.5
115.6

5,789.1
5,457.0
5,006.8
3,354.6
1,434.4
146.6
36.0
35.2
450.2
354.7
95.5
1,789.1
242.1
97.1

5,765.3
5,424.5
4,987.1
3,376.3
1,429.1
135.8
23.1
22.6
437.4
319.6
117.7
1,748.8
253.5
104.1

5,889.0
5,546.0
5,099.6
3,392.1
1,442.0
164.4
53.8
47.3
446.4
375.4
71.0
1,817.4
235.4
118.3

5,894.2
5,542.2
5,057.7
3,412.0
1,455.4
111.4
37.4
41.3
484.4
345.1
139.2
1,800.6
250.7
111.0

6,070.6
5,712.6
5,247.1
3,423.6
1,555.4
126.4
61.0
80.5
465.5
348.2
117.3
1,903.6
243.7
111.0

6,174.5
5,817.3
5,288.5
3,450.2
1,553.7
113.2
31.9
139.4
528.8
390.0
138.7
1,943.8
252.0
101.6

6,094.1
5,754.3
5,265.6
3,512.5
1,564.4
119.8
40.8
28.0
488.7
367.0
121.7
1,931.4
241.5
89.3

6,532.5
6,184.6
5,652.6
3,652.2
1,733.5
112.7
32.7
121.3
531.9
384.9
147.0
2,118.5
259.8
96.3

Individual deposits+individual assets in custody

3,654.9
3,343.4
311.5

3,673.2
3,354.6
318.6

3,703.7
3,376.3
327.3

3,722.5
3,392.1
330.4

3,751.4
3,412.0
339.3

3,769.1
3,423.6
345.4

3,795.6
3,450.2
345.4

3,841.4
3,512.5
328.8

3,988.5
3,652.2
336.3

192.9
202.0
(9.1)

326.5
32.5
85.9
187.8
20.3
140.1
466.6

332.0
27.2
85.1
191.5
28.3
163.7
495.8

340.7
25.0
81.0
202.1
32.5
192.7
533.5

343.0
25.4
71.6
206.2
39.7
201.4
544.4

351.9
24.0
71.5
210.8
45.5
208.3
560.3

357.9
22.4
68.6
215.7
51.0
199.5
557.4

357.1
20.3
66.7
216.4
53.6
207.8
565.0

339.7
19.8
53.8
214.2
51.7
202.4
542.2

347.8
19.9
58.7
211.3
57.7
226.6
574.5

(9.3)
(0.4)
(8.0)
(5.1)
4.1
18.8
9.5

Assets in custody composition (Ｄ/Ａ+Ｃ)
8.1%
8.3%
9.0%
(Note) The figures shown for foreign currency deposits (balance) are the total excluding overseas / offshore.

8.9%

9.2%

8.9%

8.9%

8.6%

8.5%

Total deposits, etc.
Total deposits
Individual
General companies
PublicFinancial
Overseas / offshore
NCD
General companies
PublicGeneral company funds (incl. NCD)
Public funds (incl. NCD)
Foreign currency deposits (balance)
Individual deposits
Individual assets in custody<Assets in custody (Term-end basis)>
Assets in custody at the Bank (excl. deposits, etc.)

JGBs
Investment trusts
Single premium policies
Financial product intermediary

Shikoku Alliance Securities balance C
Balance of Group's assets in custody B+C=D

Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

358.0
367.3
364.1
202.0
179.8
(0.5)
0.8
18.1
3.1
(5.1)
8.3
174.7
7.8
(5.3)

-

12

Balance and Composition of Loans by Industry▼There are no major changes in the composition of loans by industry, and the loans are well-balanced(Units: Billions of Yen, %)September 2015

September 2016

Composition

Manufacturing

September 2017

Composition

September 2018

Composition

September 2019

Composition

September 2020

Composition

Composition

Vs. September 2019
Balance

Rate of balance
increase/decrease

599.0

15.4

592.0

15.0

589.4

14.4

629.8

14.5

646.9

14.4

671.7

14.2

+ 24.8+ 3.8%

Agricultural

2.6

0.1

2.6

0.1

2.5

0.1

2.8

0.1

2.8

0.1

2.9

0.1

+ 0.1

+ 3.6%

Forestry

0.2

0.0

0.1

0.0

0.2

0.0

0.2

0.0

0.3

0.0

0.4

0.0

+ 0.1

+ 33.3%

Fishing

12.7

0.3

11.8

0.3

12.3

0.3

11.1

0.3

11.2

0.2

9.8

0.2

(1.4)

(12.5%)

Mining

3.6

0.1

8.8

0.2

8.9

0.2

8.5

0.2

8.1

0.2

6.8

0.1

(1.3)

(16.0%)

113.5

2.9

110.0

2.8

105.0

2.6

111.2

2.6

108.9

2.4

126.4

2.7

+ 17.5+ 16.1%

Electricity, gas, heat provision, water

91.1

2.3

89.2

2.3

97.5

2.4

122.5

2.8

141.3

3.2

167.4

3.6

+ 26.1+ 18.5%

Information communications

27.6

0.7

27.2

0.7

28.5

0.7

21.7

0.5

20.0

0.4

17.8

0.4

(2.2)

(11.0%)

Transportation

647.2

16.6

603.3

15.3

649.2

15.8

703.3

16.2

728.8

16.3

801.6

17.0

+ 72.8+ 10.0%

544.7

14.0

489.9

12.4

526.6

12.8

566.5

13.0

593.6

13.2

666.0

14.1

+ 72.4+ 12.2%Wholesale and retail

477.2

12.2

466.9

11.9

465.4

11.3

500.3

11.5

499.5

11.1

509.9

10.8

+ 10.4+ 2.1%

Finance and insurance

165.6

4.3

180.3

4.6

198.7

4.8

208.9

4.8

190.1

4.2

181.3

3.8

(8.8)

(4.6%)

Real estate

191.1

4.9

213.4

5.4

238.4

5.8

259.0

6.0

284.1

6.3

312.2

6.6

+ 28.1+ 9.9%

Various services

368.2

9.5

390.9

9.9

426.2

10.4

425.5

9.8

459.2

10.2

483.4

10.3

+ 24.2+ 5.3%

167.5

4.3

173.5

4.4

187.6

4.6

191.5

4.4

194.2

4.3

205.0

4.3

+ 10.8+ 5.6%

Regional public entities

227.8

5.8

230.0

5.8

232.6

5.7

233.9

5.4

224.4

5.0

222.1

4.7

(2.3)

(1.0%)

Other

968.8

24.9

1,009.4

25.6

1,049.7

25.6

1,106.5

25.5

1,158.1

25.8

1,199.4

25.4+ 41.3+ 3.6%

3,896.2

100.0

3,936.3

100.0

4,105.0

100.0

4,345.9

100.0

4,484.6

100.0

4,714.0

100.0+ 229.4+ 5.1%

Construction

Of which, ocean transport

Of which, medical-related

Total(For domestic branches, excludes special international transactions account)* “Goods rental” is included in “real estate” from the six months ended September 30, 2009. “Real estate” for the six months ended September 30, 2020, excluding “goods rental,” was ¥290.1
billion, which is an increase of ¥24.5 billion (+9.2%) compared with the six months ended September 30, 2019. In addition, “other” includes “home renting by individuals” (¥213.8 billion for the six
months ended September 30, 2020).
* As “ocean transport” displays balances applicable to the “ocean transport industry” according to Japan Standard Industrial Classification, this figure does not match “Loan balance for the
maritime industry” on page 17 of the Earnings Briefing.
Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

13

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

September 30, 2020

Lower row: Credit amount(Hundreds of millions of yen)

Total

NormalBorrowers requiring

Borrowers under

Borrowers at

Substantiallyborrowers

close monitoring

strict observation

risk of bankruptcy

bankrupt borrowers

Bankrupt borrowers

Rate of degradation
to at risk ofbankruptcy or below

Improvement

Degradation

19,33917,464

16,714

690

20

28

8

4

0.21%

750

33,80834,09432,715

1,354

10

15

1

0

0.05%

1,379

Borrowers
requiring closemonitoring

2,000

1,887

370

1,447

14

54

0

2

2.80%

370

70

3,705

3,656

1,002

2,559

26

67

0

1

1.84%

1,002

95

Borrowers understrict observation

139

129

9

7

94

16

2

1

13.67%

16

19

315

295

15

17

201

58

0

3

19.46%

32

61

Borrowers
at risk ofbankruptcy
Substantiallybankrupt
borrowers

280

253

14

21

5

206

4

3

40

7

438

395

5

18

5

365

1

1

28

2

96

73

0

0

0

1

68

4

1

4

19

14

0

0

0

0

13

0

0

0

Bankrupt
borrowers

35

16

1

0

0

1

0

14

2

39

15

0

0

0

9

0

6

9

21,88919,822

17,108

2,165

133

306

82

28

429

850

38,324

38,46933,737

3,948

242

515

15

12

1,072

1,538

Normal borrowers

September 30, 2019

(Note 1) The chart displays the changes in the borrower classification from September 30, 2019 to September 30, 2020.
(Note 2) The balances after changes are the balances after write-offs as of September 30, 2020.
Investor Relations 2020

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

14

Management by Risk Category: Securities Investment(Units: Billions of Yen)
Year ended September 30, 2020
Risk Category
(*1)

Book
balance

Evaluation

Marketgain / loss balance

Total
Composition

Vs. March
2020

profit /Interest and dividend income

loss (*2)

Interest

Procurement

received (*3)

cost

Increase/
Profit / loss fromdecrease onpurchase, sale,gain/loss on

Source of main revenue and profit

and amortization evaluation (vs.
March 2020)

705.1

+ 9.9

715.0

38.8%

(5.4%)

1.5

2.6

2.6

0.0

0.0

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

283.4

+ 2.7

286.0

15.5%

(4.0%)

(0.5)

1.2

1.2

0.0

0.0

(1.8)

79.5

(1.6)

77.9

4.2%

(0.3%)

(0.5)

(0.2)

(0.2)

0.0

0.0

(0.3) Rise in expected inflation rate

Foreign currency bonds (with hedges)

357.9+ 31.4

389.3

21.1%

+0.0%

6.9

3.0

3.4

0.4

1.7

+ 2.2 Difference in long and short term interest on overseas interest

Foreign currency bonds (without hedges)

246.0+ 12.9

258.9

14.0%

+2.8%

5.5

1.8

1.8

0.0

1.7

+ 2.0 Gain on foreign exchange /interest revenue

Domestic and overseas stocks (incl. stock trusts)

132.2+ 223.4

355.7

19.3%

+1.9%

45.5

2.8

2.8

0.0

1.1

+ 41.6 Growth in domestic companies centered on transaction partners

Alternatives, etc.

116.0

+ 8.3

124.3

6.8%

+0.6%

8.1

1.4

1.4

0.0

0.3

+ 6.4

Hedge funds

37.2

+ 1.0

38.2

2.1%

+0.2%

1.9

0.0

0.0

0.0

0.0

+ 1.9 Strategic diversification by external consigned management

Real estate-related

63.7

+ 8.5

72.1

3.9%

+0.5%

5.9

1.4

1.4

0.0

0.4

+ 4.2 Revenue from real estate rentals and profit from price increase

Private equity

7.9

+ 0.1

8.0

0.4%

(0.0%)

(0.1)

0.0

0.0

0.0

(0.1)

+ 0.0 Rise in enterprise value due to management improvement of unlisted stocks, etc.

Emerging stocks

4.2

(1.2)

3.0

0.2%

+0.0%

0.4

0.0

0.0

0.0

0.0

+ 0.4 Growth and foreign exchange gains in emerging markets

Other (corporate management, etc.)

3.0

+ 0.0

3.0

0.2%

(0.0%)

(0.0)

(0.0)

(0.0)

0.0

0.0

(0.0) Seeking short-term profits due to market views

1,557.2+ 285.9

1,843.1

100.0%

-

67.5

11.5

11.9

0.4

4.9

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

Total

+ 51.1*1 Assets invested by the Financial Market Division calculated based on primary risk, regardless of accounting item (on the basis of including money held in trust, unsecured repurchase agreement, etc.)*2 "Total profit / loss" and "interest and dividend income" eliminate three-month LIBOR interest, etc., as procurement costs, but this differs from actual procurement costs.
*3 Interest received includes gain / loss on cancellation of funds, etc., recorded in asset management revenue.

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

Investor Relations 2020

237.3

+ 4.5

241.8

13.1%

(0.5%)

6.6

1.4

1.5

0.1

0.0

+ 5.1 Business continuity of domestic and foreign companies

3.6

+ 0.0

3.6

0.2%

(0.0%)

(0.0)

0.0

0.0

0.0

0.0

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

240.9

+ 4.5

245.4

13.3%

(0.5%)

6.6

1.4

1.5

0.1

0.0

+ 5.1

Copyright © 2020 THE IYO BANK,LTD. All Rights Reserved.

15

Balance of Investments by Region and Industry: Financial Market Business
Balance by Region (Final Risk Country Basis)

Balance by Industry(Units: Billions of Yen)

(Units: Billions of Yen)
September 2020

September 2020
Loan balance Commitment balance

Total

Loan balance Commitment balance

Composition

Total

Composition

53.4

14.9

68.3

51.3%

(29.9)(8.2)(38.1)(28.7%)

Manufacturing

15.5

0.0

15.5

11.7%

13.9%

Transportation

17.8

0.0

17.8

13.4%

16.1

12.2%

(Of which, aircraft finance)(12.9)(0.0)(12.9)(9.7%)

0.0

4.0

3.0%

Various services

14.7

0.0

14.7

11.1%

2.8

0.0

2.8

2.1%

Financial

5.8

1.7

7.5

5.7%

Other

0.7

0.0

0.7

0.6%

Wholesale and retail

1.8

0.0

1.8

1.4%

Total

116.4

16.6

133.1

100.0%

Construction

2.1

0.0

2.1

1.6%

Other

5.0

0.0

5.0

3.8%

116.4

16.6

133.1

100.0%

Japan

55.0

14.9

69.9

52.6%

North America

19.0

1.7

20.7

15.6%

(16.3)(1.7)(18.0)(13.6%)

Asia and Oceania

18.5

0.0

18.5

Europe16.1

0.0

Middle East

4.0

Latin America(Of which, the U.S.)* Excluding Singapore BranchElectricity and gas(Of which, solar power generation)

Total* Excluding Singapore Branch

Investor Relations 2020

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16

Status of Integrated Risk Management[Status of Integrated Risk Management(September 30, 2020)](Units: Hundredsof millions of yen)

BufferOperationalrisk
Common stock,etc. Tier 1(Nonconsolidated)Notutilized
Market risk

○Operational risk
• Calculated by The Standardized Approach○Market risk (holding period of six months, 99.9%)• Take into account correlation between
different risks• Core deposits: Use an internal model• Stock VaR: Includes strategic equity holdings○Credit risk (holding period of one year, 99.9%)• Business loans, etc.: Monte Carlo method• Loans for individuals: Analysis method

Credit risk

Risk capital(¥635.5 billion)

Investor Relations 2020

Risk limit
Second half of fiscal
2020(¥391.0 billion)

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

Risk amount
September 2020
results(¥244.8 billion)
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17

Dividend Trends and Shareholder Benefit Program
Dividend Trends

Shareholder Benefit Program
Shareholders holding 100 or more but
less than 1,000 shares●Strive to maintain the business base and stable dividends bystrengthening the financial position with internal reserves●Grant shareholder benefits (Imabari towel)(Yen)

Ordinary
dividend

Commemorative
dividend* Image for illustrative purposes.

Shareholders holding 1,000 shares or more
Select one of the following three choices●Goods made in Ehime Prefecture and special goods jointly
designed by the TSUBASA Alliance●Preferential time deposit accounts for shareholders●Donation to the Japanese Red Cross Society

March
March
March
March
2011
2012
2013
2014
Investor Relations 2020

March
2015

March
2016

March
2017

March
2018

March
2019

March
2020

March
2021
(Plan)

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18