Issued July 2023
Edited by: Planning and Coordination Department, The Hachijuni Bank, LTD.
178-8 Okada, Nakagosho, Nagano City, 380-8682
Tel.: (026) 227-1182
https://www.82bank.co.jp/

The Hachijuni Bank Annual Report 2023 is a disclosure document (a document explaining the condition of the bank’sbusiness and assets) prepared pursuant to Article 21 of the Banking Act. The image on the cover page was partiallycreated using AI.
Supplementary Information
We have prepared a supplement regarding information required to be disclosed such as the indicators set out in Article
19-2, paragraph (1) and Article 19-3 of the Regulation for Enforcement of the Banking Act, the status of capital adequacy
set out in Financial Services Agency Notice No. 7 of 2014 pursuant to Article 19-2, paragraph (1), item (v)(d) of theRegulation for Enforcement of the Banking Act, and the compensation set out in Financial Services Agency Notice No. 21
of 2012 pursuant to Article 19-2, paragraph (1), item (vi) of the Regulation for Enforcement of the Banking Act. The
supplement is available in Japanese on our website.
● Figures in this document have in most cases been rounded down to the nearest whole unit in which they are displayed.
● Domestic operation departments handle yen based transactions for domestic branches, while international operation

departments handle foreign currency based transactions for domestic branches and all transactions for overseas
branches.
However, yen based transactions with non-residents and special international financial transaction accounts are included
under international operation departments.

This document uses environmentallyfriendly plant-based ink.

Annual Report2023

Management Philosophy
Lake Suwa from Tateishi Park in Suwa City

Contribute to regional development
through a commitment
to sound banking principles.
Beginnings

Editorial Policy

The Hachijuni Bank was founded in 1931, a time when the economy of Nagano Prefecture was strained by theThis report has been prepared in order to clearly communicate to stakeholders The

stability to regional communities by preserving financial services, which are the lifeblood of the economy.

management philosophy and policies. This report also includes selected financial

combination of chronic economic depression and global unrest that persisted after the First World War, to provide

Due to these roots in a challenging time, our fundamental thinking was that if the bank itself did not have a sound andfirm business foundation, it would not be able to fulfill its duty of supporting regional communities, and we maintain thispolicy today.

This commitment to regional communities has remained a part of our bank’s DNA for over 90 years since its founding.

This unwavering commitment as well as our sustainable aspirations are embodied in our sustainability policy,“Strive toachieve sustainability in both regional communities and corporate value.”

Hachijuni Bank’s efforts to improve sustainability, as well as to provide clarity on
information as well as non-financial information such as ESG and SDG-related information.

In preparing this report, we referred to the International Integrated Reporting Frameworkfrom the IFRS Foundation and the Guidance for Collaborative Value Creation from the
Ministry of Economy, Trade and Industry.

This report is a disclosure document prepared pursuant to Article 21 of the Banking Act.
Statements on future business performance included herein do not guarantee future
performance, and actual results may differ from the statements contained herein due tofactors such as changes in the business environment.

Collaborative
Value Creation
Guidance

The Hachijuni Bank is firmly committed tosupporting a future built in cooperation
with stakeholders of the regions we serve.

Contents
Sources of Value Creation

1

Value Creation Strategy

Corporate Data

01

Management Philosophy / Beginnings

23

Overview of Our Medium-Term Management Vision 2021

49

Theme 4: Digital Reforms to Operations and Organizations

71

Directors and Audit and Supervisory Board Members

03

Our History, Our Strengths

51

Theme 5: Personnel System Reforms to Support Growth

Organization Chart/Subsidiary Information

Message from the President

Special Feature 1: Achieving Comprehensive Financial Services

73

07

25

Message from the Vice President

Special Feature 2: Leveraging Human Capital

Corporate Governance

11

27

75
79

Legal Compliance and Customer Protection Systems/

13

From Competition to Co-Creation

15

Our Value Creation Process

81

Risk Management Systems

17

Achieving Sustainable Management

83

Initiatives for Shareholders and Investors

19

84

Third-Party Proposal on The Hachijuni Bank’s

2285

Key Data

87

Locations29

Human Capital That Supports Growth Strategies

and Satisfaction
53

Initiatives for TCFD Recommendations

37

Special Feature 3: Decarbonization Initiatives

61

Environmental Preservation Initiatives

43

Theme 1: Sustainability as the Core of Our Business

63

Promoting Community-Oriented Finance

Financial Highlights

45

Theme 2: Strengthening the Lifestyle Support Business

65

Initiatives to Achieve Sustainable Regional Communities

Non-Financial Highlights

47

Theme 3: Providing Comprehensive Financial Services and Capabilities

69

External Ratings and Initiatives

Annual Report 2023

Initiatives to Prevent Financial Crime

Sustainability Initiatives

Annual Report 2023

2

Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

An Enterprising Spirit

Our History, Our Strengths

The Hachijuni Bank’s constant mission across the years has been to aid in creating the future of Nagano
with an enterprising spirit. Here we share the story behind that spirit, which we have maintainedsince our earliest days.

Pre- 1931

1971

Supporting Business “From Nagano to the World” as a Pillar of Silk Production Financing
Due to the opening of Japan’s ports to international trade in 1859, silkworm raising and raw silk harvesting, which had been
done since the Edo period as secondary businesses during the agricultural off-season, developed into an industry that founda foothold in foreign markets and resulted in the acquisition of foreign currency. Silk became a major industry in Nagano
Prefecture in the Okaya and Suwa areas as well as other areas such as northern Nagano, the Ina Valley, and Sakudaira. From the
Meiji period to the early Showa period, Nagano Prefecture earned the name of“the silk kingdom”as it produced approximately
30% of the raw silk in Japan.
Behind all this development, there were banks that financially supported the growth of the silk production industry.
In the 1870s, the National Bank Ordinance was enacted in order to provide industrial promotion funds and to regulate large
amounts of government bonds and fiat currency, and the banks established in Nagano Prefecture included the 14th National
Bank (Matsumoto), the 19th National Bank (Ueda), the 24th National Bank (Iiyama), the 63rd National Bank (Matsushiro), andthe 117th National Bank (Iida).
In the development of the silk production industry, advances of funds for purchasing cocoons and transactions using
bills of exchange by silkmerchants were a financial
necessity. In the silk
production industry ofNagano Prefecture, since
many of the producers
were not wealthy, it wasnecessary to strengthen ties
among silk merchants,make promises of delivery,
and obtain financial
guarantees. Financial
institutions such as the
19th National Bank acted
as intermediaries inestablishing these
relationships and playeda large role in the formationof the silk kingdom.
Head office of the 19th National Bank
Head office of the 63rd National Bank (later the head
office of The Hachijuni Bank in 1931)

The Hachijuni Bank’s Total Online System: An Innovative New Page in Banking Operations
The Total Online System developed by our bank was highly regarded and attracted great interest from both within and outsideof the banking industry as even major city banks had not introduced such systems at the time.
For banks, the ten-year period starting in 1965 is considered to be the first online era, when the processing of single accounttypes, labor-saving measures, and streamlining operations were key issues. In November 1965, due to factors such as anincrease in currency exchange operations, we became the first regional bank in Japan to begin processing currency exchanges
online.
The transition to online banking operations was usually performed for a single account type, such as ordinary deposits orcurrent accounts, at a time. However, we believed that an organic combination of all account types centered around customer
information files (CIFs) was necessary in order to provide improved system functionality and services. With this in mind, we
made the leap to a Total Online System that differed fromordinary systems of the time. This bold decision was motivatedby several factors; CIFs would make it possible to gain a fullunderstanding of each customer’s situation, thereby improving
sales efficiency, and system development costs could be
reduced since multiple dedicated systems would not benecessary.
Operation of the Total Online System began in April 1971 with
the Nagano and Omachi branches as trial locations.
In 1974, the Bank of the Ryukyus was urgently seeking to
introduce an online system ahead of the start of the Expo '75
World’s Fair in Okinawa. We provided our Total Online System
to the Bank of the Ryukyus with IBM, our partner in developing
the system, acting as intermediary. Subsequently the Total
Online System was jointly developed by both banks.
This success became the origin of the Judan-kai, a project for
creating common core banking systems between The Hachijuni
Bank, the Yamagata Bank, the Musashino Bank, Tsukuba Bank,
Employees at Omachi Branch cheering the launch of the new online system
the Awa Bank, the Miyazaki Bank, and the Bank of the Ryukyus.

1877

August 1, 1931

1972

1981

1983

1985

1989

1992

1998

Establishment of the 19th

Merger between the 19th

Transition to Tokyo Stock

Establishment of Hachijuni

Establishment of Hachijuni

Establishment of the

New total online system

Use of recycled paper forGold sponsor and official

National Bank, a predecessor

Bank and the 63rd Bank,

Exchange, First Section

Business Services Co., Ltd.

Credit Guarantee Co., Ltd.

Hachijuni Culture

begins operation

CD/ATM paper logs (a firstbank of the Nagano Winterto The Hachijuni Bank

creating The Hachijuni Bankand Hachijuni System

Foundationin the financial industry)

Olympics

Development Co., Ltd.

1878

1971

1974

1982

1984

1986

1991

1997

Establishment of the 63rd

Total online system begins

Establishment of Hachijuni

Establishment of Hachijuni

Establishment of the Nagano

Opening of representative

Opening of Hong Kong Branch

Opening of representative

National Bank, a predecessor

operation

Lease Co., Ltd.

DC Card Co., Ltd. (currently

Economic Research Instituteoffice in Hong Kong;

Creation of complete system

office in Singapore

to The Hachijuni Bank

Listed on Tokyo Stock

Hachijuni Card Co., Ltd.)and Hachijuni Capital Co., Ltd.

establishment of Hachijuni

for collecting, recycling, andStaff Service Co., Ltd.

using paper waste (a first in

Exchange, Second Section

the banking industry)Societal Events3

Annual Report 2023

1941-1945
Pacific War

1973

Oil crisis

1985

Plaza Accord

1989

Introduction of
consumption tax

1991

Collapse of the bubble
economy

1995

Great Hanshin
earthquake

1997

COP 3 climate change
conference in Kyoto

Annual Report 2023

4

Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

Our History, Our Strengths
Market Potential
Lifestyle1in JapanNo. 1 (for women)
No. 2 (for men) nationallyNo.

Prefecturethat people want to move to*“The Book of Country Living” (Inaka Kurashi no Hon), 2023 (published by Takarajimasha)

and

1999

in healthy life expectancy*“2020 Average Time Living Independently and Average Life Expectancy” (All-Japan Federation of National Health Insurance Organizations)

Nature1 nationallyNo. 3 nationallyNo.

Tourismin number of mountains belonging to the“100 Famous Japanese Mountains”list*Nagano Prefecture Department of Tourism, Mountain and Highland Tourism Section

Protecting the Natural Beauty of Nagano: First Regional Bank to Obtain ISO 14001 Certification

in forest and grassland area*“The Book of Country Living” (Inaka Kurashi no Hon), 2023 (published by Takarajimasha)

2001

2005

2009

2018

2021

Start of Judan-kai

Establishment ofStart of Hachijuni

Merger by absorption Establishment of Hachijuni

Business merger with

common system

Hachijuni Auto Lease

Forest volunteer

of Hachijuni Businessthe Nagano Bank, Ltd.

development

Co., Ltd.

activities

Services Co., Ltd.

1 nationallyNo. 2 nationallyNo.

in number of hot spring locations*2020 Hot Spring Usage Status (Ministry of the Environment)

ski resorts*Nagano Prefecture Department of Tourism, Mountain and Highland Tourism Section

Agriculture

Industry
In March, 1999, we became the first regional bank to obtain ISO 14001 certification. ISO 14001 is an international standard
for environmental management systems, and we obtained certification for our head office building in Nagano City. The
certification demonstrates to both Japan and the world that our head office contributes to preserving the environment.
Nagano Prefecture, where our bank is based, is known for having an abundance of natural beauty considered among the bestin Japan.
Amid concerns about global warming and other environmental
problems, we believe we have an obligation as a leading
company in the region to create a recycling-oriented,
sustainable society, and we promote environmental
preservation activities as a central aspect of our corporatesocial responsibility.
We introduced environmental accounting from fiscal year 2004
and received attention when we became the first in thebanking industry to announce our environmental accounting
information in July 2005.
Environmental accounting refers to quantitatively identifying
the costs related to environmental preservation activities andthe economic results and environmental preservation results
generated thereby. By providing concrete figures for eachenvironmental accounting item, our efforts became moreclearly recognizable, and we increased our ability to appeal
both to related parties in the industry as well as the generalpublic.

2 nationally84
No.

in value of clocks and watches (including movements) shipped*Census of Manufactures, 2020 Confirmed Statistics Table by Commodity

in value of electronic parts, devices, and electronic circuits shipped*Census of Manufactures, 2020 Confirmed Statistics Table by Commodity

1 nationallyNo. 2 nationallyNo.

in amount of wine grapes produced*2019 Regional Fruit Production Trends Survey (Ministry of Agriculture, Forestry and Fisheries)

in number of wineries*Nagano Prefecture Department of Industry and Labor, Sake and Wine Promotion Office2023

Asset Management Co.,
Ltd. and Hachijuni
Investment Co., Ltd.

An Enterprising Spirit
Sustainable management efforts to drive regional sustainability

2000

2002

2007

2017

2020

2022

Establishment of

Expansion of ISO

Opening ofAwarded by Cabinet

Expressed support

Establishment of

Yamabiko Services

14001 certification

representative office

Office forfor Task Force on

Hachijuni Link

Co., Ltd.

to all domesticin Bangkok

contributing to

Climate-Related

Nagano Co., Ltd.

locationsSocietal Events

5

Annual Report 2023

2008

Bankruptcy of Lehman
Brothers

regional revitalization Financial Disclosures(a first among private(TCFD)

financial institutions)recommendations

2011

Great East Japan
earthquake

2019

COVID-19

Our Strengths
Business foundation
Financial
capitalof unrivaled strengthand soundness

Consolidated capital adequacy ratio

18.36 ％
Market share of loans and deposits in prefecture

No.1
Human
capitalDiverse andprofessional
human
resources

Deep connections withSocialrelationshipcapitalCertification holders
Small and medium businessconsultants

Grade 1 financial planners/
Certified financial
planners

Securities analysts

IT coordinators

57
55

129
34

Intellectual
capitalcustomers built overour 92-year history

Comprehensive financial
services provided by thegroup as a wholeTop-class environmental
management valuation
among domestic banks

Unrivaled network in the region

155 locations
Financial and non-financial business group15 companies
CDP score

B
Annual Report 2023

6

Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

Message from the President

Our duty is to carefully consider how to

Masaki Matsushita
President (Representative Director)
Executive President

benefit the regions we serve and to takeaction toward that goal.

The Economy of Nagano Prefecture and Our Efforts in FY2022
In fiscal year 2022, many events that only
occur once every several years were held in
Nagano Prefecture, such as the display of theancient Buddha statue at Zenkoji Temple, theOnbashira festival in Suwa, the Oneri festival in
Iida, and the rebuilding of the Hotaka Shrine.
With the severe restrictions imposed to fight
COVID-19 being lifted, people are again fillingstreets and stores, and the economic situationis recovering mainly driven by the restaurant
and tourism industries. The manufacturingindustry has also been relatively strong, anddespite being affected by exchange rates attimes, domestic demand has stabilized and has
been mostly favorable.
As for our financial results, net core businessincome was strong mainly due to an increase
in interest income, but securities investments
saw losses due to efforts to ensure a soundportfolio and adapt to the sharp rise in interest
rates abroad, leading to an overall decrease inprofit.
In order to contribute to the success of our
stakeholders, we provided strong support andenhanced our systems for customers who use
our services, achieved shareholder returns

through dividends and stock buybacks, andmade reforms to our personnel system tobenefit employees.
Regarding overseas business, we’ve madeefforts to enhance our Singapore Branch as a
new sales hub. The Singapore Branch will
provide a channel for Nagano companies toexpand their excellent technologies andproducts overseas, mainly in Southeast Asia
and India, and it will serve as a base forhandling all types of financial transactions. We’vealso dispatched employees to banks in ASEAN
countries to gather information and serve as
liaisons to connect customers with local
companies and banks. Although maintaining
overseas locations requires certain costs, one
major goal is for employees to gain experiencein order to better serve our customers when
they return to Nagano. Moving forward, we
intend to continue to steadily build results
beginning with our customers in Nagano while
paying close attention to the macro
environment and customer needs.

Becoming a Vital Partner in Regions We Serve
Several years ago, I was shocked to read the
responses to a customer survey about ourbank conducted by the Financial Services
Agency, as many customers said that we were
not their first option and that we did not offer
good solutions. Even though we hold a highmarket share of loans, some customers did not
see us as a partner that served them well. I
knew we could not let the situation continue,
and we must provide services that truly benefit
7

Annual Report 2023

our customers. Even if a bank has a high market
share within a prefecture, I believe it will
eventually fail if its customers do not dependon it. Based on these beliefs, we formulated
our Medium-Term Management Vision in 2021.
By building deeper connections with customers,
I think we will better understand the problems
they face. And if we can offer services to solve
problems before customers even becomeaware of them, they will certainly come to feel
Annual Report 2023

8

Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

Message from the President

that we are an essential partner. Regardless of
its size, a regional bank that is not relied uponby the regions it serves has no worth.
The purpose of the merger with the Nagano
Bank was of course to further contribute to theregions where we operate, but another goal
was to learn new things through both banks
being exposed to new corporate cultures. Our
employees are said to be serious anddedicated, but they can also be conservativeand resistant to change. I hope that working
with the employees of the Nagano Bank will
prove to be mutually stimulating and result in abeneficial fusion of our two cultures.
Given the recent rapid changes in the world aswell as the changes that our bank is attempting
to make, the attitude of waiting for someone
else to do something for you is no longer
viable. I expect our employees to give theirbest and have the mindset that they must think

and act for themselves. From my pastexperiences I have learned that if you let otherpeople take charge of something that you
want to do, it will turn out nothing like what
you envisioned. Think for yourself and bepersistent in achieving your goals. That is asure way for both you as an individual and theorganization to grow. If you show the will act
on the things you want to achieve, themanagement team here will guide and support
you while highlighting any risk. I want
employees to pursue the things they feel areneeded for themselves and the region, such as
expanding SDG-related efforts and gaining
expertise and certifications, without
reservation.

Sustainability as the Core of Our Business Begins with Changing Each Person’s Mindset
Sustainability begins with changing themindsets of employees. I believe the first stepis to understand that the sustainable
development of our regions and customers isachieved through the actions of each individual
person. Those actions add up and create thecore of our business.
I can give our new“E-Livre”accounts that do
not use paper passbooks as an example. If we
set a target for the number of customers who
open those accounts, it would be nothing morethan a quota for employees to meet. However,
if employees have the mindset that they are
offering customers a product that helps reduce
paper usage and protects our forests, then it is
not simply a quota, but something that benefits
our customers and regional communities. The
act of providing the community with such a
product or service becomes a sustainableaction that employees are personally engaged
in. If employees engage the community while

9

Annual Report 2023

maintaining this mindset, customers will cometo share it, and they will understand how ourbank is supporting and working to achievesustainable regional outcomes.
I have instructed our branches to think forthemselves about what is necessary in order tobenefit the customers and regions we serveand to put those thoughts into action, but ofcourse it takes time to change the way wethink about things. I have made visits to eachbranch to engage directly with employees
about this topic and share my thoughts. It willtake time for this approach to take root, but I
feel that employees are beginning tounderstand it.
When we formulated the Medium-Term
Management Vision 2021, our outside
directors and outside audit and supervisoryboard members expressed their support formaking sustainability the core of our business.
Our bank’s outside directors and outside audit
and supervisory board members are a diverse
group. Because they participate in various
study groups and branch manager meetings inour organization, we all benefit from theirknowledge and experience. Changing ourgovernance system last year to separate
executive and managerial functions has also
led to discussions that are more in-depth andvigorous. I’
m motivated to work towardachieving our vision as a united team going
forward.

A Story of Increased Corporate Value Connected to the Next Generation
Business that is done by systemizing anddigitalizing operations and combining data with
AI will evolve greatly moving forward. I think it’sfair to say that banks are also facing the limits
of existing business models and are currently
at a turning point to achieve change. Also,
there is some concern that banks will lose theirrole in processing payments in the near future
due to the market entry of companies fromother industries. However, our bank has strong
system development capabilities, and we areoperating in a way that combines knowledge
gained from other companies with the systems
we have developed. Further investments in thisarea will be necessary moving forward, and weneed to make business decisions with an eyeon what’s coming next.
I feel it is my mission to strengthen our bank’sfoundations in Nagano Prefecture, our mainarea of operation, and I believe it is importantto pass the baton, together with a firm financial
foundation, on to younger generations and ask
them to confront and answer the question ofwhere to go next. Sustainability cannot be
achieved without thinking of the next
generation.
Speaking with employees at our branches, I
hear them say that they worry that rural
regions will steadily decline because of anaging population and the loss of industry.
When I hear this, I always try to encouragethem by saying,“Why see it that way? Theseissues are also business opportunities!”The
pandemic was a very difficult time, but it also

lead to a reevaluation of the attractiveness andprospects of rural regions. Thanks to this, weare now experiencing a“glocal”trend. There’sa bright future awaiting us. How bright, it’s up
to us to try and decide.
Finally, regarding shareholder returns, we have
paid our highest dividends ever and completed
our planned stock buybacks. Though someparts of our business may not immediately
generate returns due to our management
philosophy of contributing to the developmentof regional communities first, we are patiently
making efforts in the belief that thesebusinesses will certainly benefit customers in
the long term. Put the benefit of the people inthe communities we serve first in our thinking,take action, achieve a profit, and return thatprofit to shareholders. To achieve this ideal
cycle, we must do our best to clearly
demonstrate our cornerstone role to ourcommunities, our employees, our shareholders,and all other stakeholders, and become apartner they truly depend upon.

Annual Report 2023

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Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

Message from the Vice President

What the Medium-Term Management Vision 2021 Aims to Achieve

We will succeed in our mission
by thinking about why we dothings in simple terms.
Shohei Hidai
Vice President (Representative Director)
Executive Deputy President

Making the Goals of the Business Merger Visible
Since announcing our business merger with the
Nagano Bank in September 2022, theintegration project has made steady progress.
We will proceed with concrete steps as we
aim for full integration in the final stage of themerger in fiscal year 2025.
The primary mission of regional banks such as
ours is to benefit the regions we serve. In order toaccomplish that mission, I believe my role is toshare with all employees the message that wemust shift from competition to co-creation
through our merger with the Nagano Bank, andalso to support progress towards enacting thatmessage on the ground. I always try tocommunicate in a way that is simple and easy
to understand, and I will continue to clearlycommunicate the what and why while taking
care to not lose focus on the mission.
In order to quickly achieve the integration of
our two banks, I believe we should think about
what can be done to achieve integration andwork towards that goal step by step, but our
younger generations of employees havealready taken the lead and suggested several
good and surprising ideas. These include
planning social gatherings and creating abooklet that explains each bank’s corporate
11

Annual Report 2023

culture in manga form. These younger
generations will be central in supporting thepost-merger bank and accelerating the
economy of Nagano Prefecture, and the factthat they are taking the initiative to actively
work towards this goal fills me with both
gratitude and confidence. Although the path toachieving full integration will be difficult, weshould make any effort that seems helpful,even if minor.
Regarding financial results and forecasts postmerger, there are many elements that are stillin motion at present, but when the timing of
the final merger is determined, we will be able
to share more specific information with our
stakeholders. As business mergers andintegrations always entail up-front costs, it willtake a little time for significant synergies to beachieved. Our stakeholders may find that
frustrating, but we will work as fast as we can,so please give us your continued support as
we increase the corporate value of The
Hachijuni Bank Group over the mid to longterm.

The strategies set out in the Medium-Term
Management Vision 2021 are also being put
into action after defining what our purpose is indoing so. On digitalization, we aim to use
digitalization to improve services to ourcustomers and intend to make effective use ofour data warehouse.* We will transition fromexisting customer support methods that
depend on our employees’experience tomethods that utilize data and AI in conjunction
with experience. For example, we can use data
analysis to estimate a customer’s finances six
months from now, and we are aiming to usethat analysis to offer financing solutions tocustomers as early as possible. Our job is toresolve customers’problems, and I believe thatoffering solutions as early as possible at a
speed that exceeds customer expectations is
the type of support that customers truly need.
New businesses in the future may include
businesses that strengthen our banking
operations, or we may expand into entirely
new areas. Whatever the case, our guiding
principle will be that those business must bealigned with customer needs. As always, wewill first consider what we can do to benefit
the regions and customers we serve and thenengage in our business while evaluating
sustainability.

Reforms to our personnel system have createda good foundation, but I believe it is importantto put our hearts into its operation in order forthe system to take root. We will identify
system issues and take measures to address
them while constantly monitoring the system
so that it retains its significance and value forour employees.
Regarding cost reductions, we have worked to
improve operational efficiency throughout theorganization under the slogan of“stop, reduce,
replace”as part of the previous management
strategy between 2018 and 2021. Streamlining
measures that inconvenience customers areunacceptable, but for administrative processes
that are in-house convention only, we will doaway with the ones we can. We truly
considered the original point of why we docertain things, and I feel we are continuing to
do so at present, and I would like our
employees to continue this thinking in any
situation they may face moving forward.
*A n information system that centrally manages our large amount oftransaction data spanning many years

Wanting to Help People Is the Driving Force That Moves You and The Hachijuni
Bank A Driving Force for Me and The Hachijuni Bank: Helping People
When I was a university student, our baseball team coach told us,“I want all of you to do things inyour lives that help people,”and taking those words to heart, it has always been important to me
since I joined The Hachijuni Bank to do what I can tohelp our customers. One of my supervisors when I
was young once lectured me, saying that wanting tohelp customers is a vague and useless goal, but it is
an attitude that I still maintain today.
In the future as well, whenever I am unsure what todo, I will return to our management philosophy,“Contribute to regional development through acommitment to sound banking principles,”and to myfundamental goal of helping people, and I will use
those perspectives in thinking about our strategies.
Working together with my colleagues and all of our
stakeholders in greater unity, I plan to steadily
advance towards the development of thecommunities we serve and support the sustainablegrowth of our bank.

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Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

From Competition to Co-Creation —Business Merger with the Nagano Bank
The Hachijuni Bank and the Nagano Bank formallymerged on June 1, 2023, the Nagano Bank becoming awholly owned subsidiary of The Hachijuni Bank. Both banks
are engaged in further discussions and consideration withthe primary aim of full integration in fiscal year 2025.
As both banks share a duty to maintain and improve ourservices, we will join hands to become a united bankthat grows together with the regions we serve.

Business Integration Synergies
S ynergies Expec ted Due to the B us ines s I ntegration

1

Amid an increasingly difficult financial and economic environment, banks are expected to respond to changes
in the structure of society, and we were aware that the roles of our two banks in the regions we serve was
becoming increasingly important.
There were several reasons we decided this business merger was the most appropriate choice. Throughcooperation, we felt that we could build a firm business foundation that would reinforce both of ourcapabilities as financial intermediaries as well as enhance our ability to build sustainable business models,thereby contributing to the success and growth of our stakeholders.

Expectations Placed on Both Banks

Environmental Changes• Continued stable management• Provide comprehensive capabilities and services• Expand to new business areas• Be responsive to changes in the wake of the
COVID-19 pandemic• Enhance operations through digital and green
transformation initiatives•D emographic change due to low birthrate and aging society•D iversification of customer needs due to factors such as
digital technologies and decarbonization initiatives• S hrinking interest margins due to prolonged low interest
rates•C hanges to competitive environment due to market entry ofcompanies from other industries

The Nagano Bank

Achieving Rapid Integration—From Competition to Co-Creation

resources

Customers

Provision of
better value

Development of new businesses anddiversification of operations

Expansion of business domains
through rapid achievement ofbusiness integration synergies andutilization of human capitalStrengthening of comprehensive financial
services and lifestyle support business

Regional trading company
Management support

Lifestyle design support
Digital marketing

Project

We are commencing a“Co-Creation Project”that will support customers by combining theconsulting functions of both banks.
We will work to resolve the issues facing our corporate and small business customers by
establishing a“Business Co-Creation Team”that supports business successions, M&A, overseas
business expansion, and other such projects and a“Financing Co-Creation Team”that provides
support for matters such as management reforms and managerial personnel referrals.
Business Co-Creation TeamThe Hachijuni Bank

Regions

Consulting services
Shareholders• Supports business successions and M&A• Supports overseas business expansion; provides
other services

Incorporation November 15, 1950

13

Annual Report 2023

Number oflocations

53 (including one outside
Nagano)Employees

621 (as of March 2023)

Customers

Co-Creation Project
Expertise

Give all we have for the happiness and prosperityof our customers, shareholders, and employees.

The Nagano Bank

Expertise

Employees

Overview of the Nagano Bank

2-9-38 Nagisa, Matsumoto
City, Nagano Prefecture

Asset management

We will implement a variety of measures to ensure that the effects of the business integration quickly
become apparent.

Consulting services

Head officeaddress

Digital and green transformation consulting

Further utilization of branch locations

The Hachijuni Bank

The Nagano BankManagement
Philosophy

Electric power industry

Equity financeBusiness successions and M&A

Provision of basic
services

Our banks share a common duty and will join to create a new banking groupthat grows together with the regions it serves.

Relationships

4

Utilization of human capital andenhanced corporate culture• We will contribute to the further development of regional industries and improved quality of life by utilizing
human capital to expand our business domains.
• We will become a banking group that grows together with the regions it serves by improving our financial
services and capabilities to strengthen our business foundations.

Co-Creation

Basic Philosophy

Expertise3

Strengthening ofbusiness foundations

Measures to Be Implemented

Business Merger

Human

2

Expansion of areaof operation

Rapid achievement

Background of the Business Merger

The Hachijuni Bank

Strengthening of financial services andfinancial intermediation functions

Measures to
Be Consideredin the Future

Customers

Financing Co-Creation Team• Supports management reforms• Provides referrals for managerial personnel andoutside experts; provides other services• Waiving fees for the use of each other’s ATMs• Aligning fees for ATM transfers between the banks using either bank’s card• Joint holding of/mutual participation in outside training and voluntary training• Joint participation in local events and volunteer activities• Joint holding of events for employees (sporting events, art exhibits)

Annual Report 2023

14

Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

Our Value Creation Process
Our bank is working to alleviate social issues by optimizing our operational resources andimplementing aware business strategies.
We aim to achieve our management philosophy by establishing a cycle that enables continualand sustainable value creation and by creating a virtuous circle with our stakeholders.

Balance of deposits

8.1864 trillion yen●

Balance of loans

6.1561 trillion yen●

Consolidated capital adequacy ratio 18.36%

E

Human capital

Diverse and professional human resources
Certification holders at end of FY2022
Small and medium business consultants 57
Grade 1 financial planners/Certified
financial planners

129

Securities analysts

55

IT coordinators

34

Social relationship capital

S
G

Measures to address climate change●

Responding to decarbonization●

Preserving environmental resources●

Creating new industries●

Responding to low birthrate/aging population/depopulation●

Promoting digitalization●

Promoting diversity and inclusion●

Developing human resources●

Strengthening data security●

Enriching information disclosure●

Ensuring complianceDeep connections with customers●●

 etwork of 155 locations includingNneighboring regions, Tokyo, and overseas

 btained authorization as an advanced bankingOservice company engaged in other industries

●

●

●

●

●

●

Medium-Term Management Vision 2021

p.23

Supporting Our Customers and Regions Through the
Combination of Finance, Non-finance, and Relationships●

Theme 2:

Strengthening the Lifestyle Support Business 

Theme 3:

Providing Comprehensive Financial Services and Capabilities 

Theme 5:

Personnel System Reforms to Support Growth and Satisfaction 

pp.47–48
pp.49–50
pp.51–52▲

Digital Reforms to Operations and Organizations 

pp.45–46▲

Theme 4:

pp.43–44

 ontributing to increasing our corporate value by building a support system utilizing our entire group andCachieving sustainable regional communities
Stable shareholder returns

Employees●●●

Sustainability as the Core of Our Business  xpansion of locations dedicated to inheritance or insurance services to improve consultation services tailored toEeach customer’s life stage
Expansion of non-face-to-face services to increase convenience for customers
Providing optimal solutions to each issue faced by utilizing the diverse network of the entire Hachijuni Bank Group
Actively promoting efforts that use digital technology and data to provide services that offer safety, peace of mind,
and greater convenience
Expanding various training and e-learning opportunities for employees to increase their skills and provide higherquality services
Supporting customer digitalization to contribute to increased future asset value and operational efficiency

Shareholders●

Theme 1:

 rotecting the abundant natural environment of the regions we serve and contributing to achieving sustainablePcommunities by implementing efforts to address environmental problems through our main businessContributing to the sustainable development of our regions and customers by problem solving

Customers▲

 bundant natural environment of Nagano
A
Prefecture’s mountains, forests, and rivers

●

●

▲

Abundant nature and biodiversity

Regional Communities

 esponding to diversification of employee values and lifestyles
RDevelopment of a workplace environment that prioritizes growth and job satisfaction
Support to achieve the wellbeing of all employees as well as their families▲

 onsulting expertise of our new company, LinkC
Nagano, handling regional trade and electric
power business areas

Natural capital●

Promoting key industries▲

Comprehensive financial services
provided by the group as a whole●

Full range of measures to support responses to issues such as the aging population and low birthrate

Locations covering all of Nagano PrefectureIntellectual capital●

Transition by companies to a decarbonized society, reduction of climate change risks●●

Creating innovation for the sustainable development of regional economies

p.17

▲

A sound business foundation●

Value Provided to Stakeholders

Material Issues

Financial capital●

Contribute to regional development througha commitment to sound banking principles.

Strategies

p.6▲

InputsManagement Philosophy

KPI

Medium-term management targets■ Net income attributable to owners of parent■ Consolidated dividend payout ratio■ Ratio of consolidated to non-consolidated net income■ Greenhouse gas (CO₂) emissions

FY2022
24.1 billion yen
FY2025 (target) 25.0 billion yen or more

FY2022
FY2025 (target)

1.11
1.25 or more

FY2022
40.0%
Up to FY2025 (target) 40% or more annually

FY2022
44.9% reduction compared to FY2013
FY2023 (target)
Net zero
FY2030 (target) 60% reduction compared to FY2013

Sustainable finance targets

External
Environment

15

Annual Report 2023

Climate change

Decline in regional vitality
due to low birthrate,
aging population, anddeclining population

Increase in businesses
closing due tolack of successors

Low interest rateenvironment
over the long term

■ Cumulative results for FY2021 to FY2022

410.9 billion yen(Including 211.8 billion yen in environmental field)

Please see p.57 for information on sustainablefinance products.

■ FY2021 to FY2030 (targets)

Cumulative financing provided 1.5 trillion yen
Amount in environmental field 1 trillion yen

Annual Report 2023

16

Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

Achieving Sustainable Management
Promoting Sustainable Management

Basic Views on Sustainability

In June 2022, our bank established the Sustainability Working Group as an organization
under the Sustainability Committee* in order to create a system that examines risks andopportunities related to sustainability in our management strategies. The Working Group
strengthens collaboration among each department of our
Board of Directors
head office by exchanging information and sharing issues
Reporting
Supervisionacross different departments, and it submits opinions to
the Sustainability Committee after considering more
Sustainability Council (Management Committee)
effective measures.
In January 2023, we established the Sustainability Council
Sustainability Committee
as a special-purpose body within the Management
Chairperson: Officer in charge of Planning and
Coordination Department
Committee. The Sustainability Council discusses andMembers: Head office department managers
decides matters relating to general sustainability andmatters requiring coordination throughout our bank.
Sustainability Working Group*The Sustainability Committee discusses our efforts relating to SDGs and ESG and reports
important matters to the Sustainability Council or Board of Directors.

Name

Our basic views on sustainability that explain the sustainable
management goals we aim to achieve are disclosed on our website.

Basic Views on
Sustainability(in Japanese)

Process for Determining Material Issues
Step 1

Looking back on our sustainability activities

Step 2

Selecting issues

1. International standards such as GRI Standards, SASB, SDGs

Members: Head office sustainability supervisors

2. Discussions through various projects within our bank

3. Exchanging opinions with external specialist agencies, etc.

Meeting frequency and main matters discussed

Organizing and verifying material issues

Meets at least twice annually in principle (established in January 2023; met three times up to March 2023)
Sustainability Council●

Creation of“Basic Views on Sustainability”document●

Enhancement of climate-related risk management based on TCFD recommendations●

Enrichment of sustainability disclosure

Step 3Meets whenever appropriate (met nine times in FY2022)
Sustainability Committee●

Determination of material issues●

Systems to support customer sustainability and decarbonization efforts●

Status of sustainable finance efforts●

Status of efforts by the Sustainability Working Group●Our bank’s decarbonization roadmap●

Participation in external initiatives

Organizing elements by importance andselecting issues that are most important
both to society and stakeholders and to
our bank’s corporate value

Material issuesof TheHachijuni Bank
Importance tosociety andstakeholders

Importance to ourbank’s corporate value

Step 4

Verification by Sustainability Committee that issues are suitable

Step 5Determining material issues—Discussion and approval by Board of Directors

Meets whenever appropriate (established in June 2022; met five times up to March 2023)
Sustainability Working Group●Determining priority efforts for FY2022●

Sharing and discussing the status of efforts by subcommittees to address priority efforts●

Decarbonization measures of our bank and customers

Material issues of The Hachijuni Bank
Material Issues

E

●

●

Preserving environmental resources●

Creating new industries

●

●

●

G
17

Annual Report 2023

Responding to decarbonization

●

●

S

Measures to address climate change

Promoting key industries

 esponding to low birthrate/
Raging population/depopulation
 romoting diversity andP
inclusion

Developing human resources●

Strengthening data security

●

●

●

●

Promoting digitalization●●

Efforts to Resolve Issues●E nriching information disclosureEnsuring compliance

●

●

●

 upporting measures to address climate change and decarbonization
S
efforts by customers and regional communities (pp.43, 44, 65, 66) trengthening our measures to address climate change andS
decarbonization efforts (pp.37–42, 69, 70) nriched services to meet management issues and needs of corporateEand sole proprietor customers (pp.43, 44, 47, 48)
 nriched services to suit diverse lifestyles of individual customers (pp.45,
E46)
 ngaged in human resource development for employee growth utilizingEdiverse characteristics (pp.27–36, 51, 52)Enhancing sustainable management (pp.17, 18) nhancing risk management and enriching disclosure based on TCFD
E
recommendations (pp.53–60)

Main Efforts in FY2022●

Began handling of services to support SDG-related efforts●●

Promoted sustainable finance●●Established Hachijuni Link Nagano Co., Ltd.

●Strengthened branch support system

●

●

●

 egan using Mikatano service series that supports
B
digitalization of operations
Opened Singapore BranchConverted three branches to net zero energy buildings
 ormulated framework for green bonds, social bonds,
Fand sustainability bonds●

Began handling of Wallet+ smartphone app●

Introduced multiple-track career development system● pened Hachijuni Insurance Plaza and Hachijuni
O
Inheritance Consultation Plaza xpanded training to support career development andEskill improvement●

Established Sustainability Council and Sustainability Working Group●Analyzed and disclosed scenarios based on TCFD recommendations●

Calculated and disclosed 15 categories of scope 3 emissions

Annual Report 2023

18

Sources of Value Creation

Sources of Value Creation

Value Creation Strategy

Corporate Data

Financial Highlights
Net business income
Net core business income

27.6 billion yen
32.3 billion yen(Unit: billions of yen)

40

30.8

30

30.9

28.4

32.3

28.9

27.6

Ordinary income (consolidated)
34.8 billion yen
Ordinary income (non-consolidated) 30.2 billion yen(Unit: billions of yen)

50

38.0

40

32.1

30

31.3

26.1

20

34.8

30.2

Dividend payout ratio (consolidated)(Unit: percentage)

50

30.6
30

0

Year ended
March 2021

Year ended
March 2023

Year ended
March 2022

Net business income: Income from a bank’s main business,
equivalent to the operating income of an ordinary company.

Net core business income: Income after deducting income fromsources such as sales of securities from net business income.

Securities balance

2,685.5 billion yen(Unit: billions of yen)

4,000

3,333.8

3,000

2,809.8

1,181.1

820.5

546.7

1,989.2

2,138.8

2,000

2,152.71,000

02,685.5

Year ended
March 2021

Government bonds

Year ended
March 2023

Year ended
March 2022

0Year ended
March 2021

Year ended
March 2023

Year ended
March 2022

Ordinary income (consolidated)

10

26.6

24.1

22.3
20

29.3

10

20

10

(Unit: billions of yen)

30

40.0

40

20
10

Net income attributable toowners of parent

Year ended
March 2021

Year ended
March 2022

Year ended
March 2023

0Year ended
March 2021

Year ended
March 2022

Year ended
March 2023

Ordinary income (non-consolidated)

381.1 billion yen

Unrealized gains
on securities(Unit: billions of yen)

500

419.3

400

381.1

382.6

Shareholder return rate (consolidated)(Unit: percentage)

100

Ratio of consolidated to
non-consolidated net income(Unit: ratio)

1.3

80.9
80

1.2

60

1.1

1.20

1.19
1.11

300
200
40

100
0

Year ended
March 2021

Year ended
March 2022

Year ended
March 2023

20

1.0

30.6

29.3

Year ended
March 2021

Year ended
March 2022

Year ended
March 2023

Other securities

0.9

Year ended
March 2021

Year ended
March 2022

Year ended
March 2023

The ratio of consolidated to non-consolidated net income is theratio of income under consolidated ﬁnancial results to the income
under the non-consolidated ﬁnancial results of the parent company.

8,186.4 billion yen

Deposits

6,156.1 billion yen

Loans

Reduction in strategic shareholdings*Listed shares at book value (excluding deemed holdings)

Return on equity

Long-term management indicator: 5% or more

(Unit: billions of yen)
(Unit: billions of yen)

10,0007,670.7

8,000

8,066.6(Unit: billions of yen)

8,000

8,186.4
5,587.5

6,000

5,974.0

6,156.1

78.8

4.0

77.6

6,000
4,000

3.0

7,073.4（92.2％）

7,441.9（92.2％）

7,626.2（93.1％）

0
Deposits

Year ended
March 2021

Year ended
March 2022

Year ended
March 2023

Deposits at branches in Nagano Prefecture (percentage of total)

19

Annual Report 2023

4,000

2,000

2,000

67.2
2,833.3（50.7％）

0Loans

2,878.2（48.1％）

Year ended
March 2021

Year ended
March 2023

Loans by branches in Nagano Prefecture (percentage of total)

Year ended Year ended Year ended
March 2021 March 2022 March 2023

2.43

2.68

2.58

Year ended
March 2022

Year ended
March 2023

2.0
Reduction target:
20% reduction
compared toMarch 2021(-16.8 billion yen)

2,877.0（46.7％）

Year ended
March 2022

(Unit: percentage)

5.0

84.0

Year ended
March 2026

1.0
0Year ended
March 2021

Return on equity is an indicator that measures a company’s proﬁtability.

Annual Report 2023

20

Sources of Value Creation

Sources of Value Creation

Total capital adequacy ratio(consolidated)

8
4Year ended
March 2021

Year ended
March 2023

Year ended
March 2022

Uniform international standard (8%)

12

AAA

AAA

AA

AA

AA

A+

A+
A
A-

BBB

BBB

BBB

BB

BB

BB

B

B

B

CCC

CCC

CCC

CC

CC

R
SD、D
S&P Global
Ratings

D

100

107.4

106.1

23.4

20.5
60 77.7

86.4
Coverageratio: 80.4%

20

63.0

0

0.7

20.4

18.7

Year ended
March 2022

…Doubtful claims…Restructured
claims40
61.4…Bankrupt claims andequivalent claims…Claims overdue by
three months or more

82.6

1.7

Claims subject to disclosure under
the Financial Revitalization Act andclaims subject to risk management

Substandard claims

80

82.0
Coverageratio: 77.2%

5.3

Coverage status…Balance of allowancefor bad debts…Amount covered by
security, etc.

Year ended
March 2023

21

Annual Report 2023

Sustainable finance(Unit: billions of yen)
255.5

CC

50

Net zero achieved!

C
LD、D

Rating & Investment Japan Credit Rating
Information, Inc. (R&I)
Agency (JCR)％
achievement planned(First among Japanese banks)

Low

83.0*
FY2021128.8*FY2022*Amount in environmental ﬁeld

Society(Unit: billions of yen)
Year ended
March 2022

Year ended
March 2023

Bankrupt claims andequivalent claims

6.1（0.10%）

5.3（0.08%）

Doubtful claims

77.7（1.28%）

82.6（1.31%）

Substandard claims

22.1（0.36%）

19.4（0.31%）

 laims overdue byCthree months or more

1.7
（0.02％）

0.7（0.01％）

 estructured
Rclaims20.4（0.33％）

Subtotal

Ratio of women in
management positions

30

20

Ratio of women in(Unit: percentage)leadership positions
Ratio of women in
management positions
17.4

18.4

19.8

18.6

106.1
（1.74%）

107.4（1.71%）

Ordinary claims

5,965.8

6,158.2

Total claims

6,071.9

6,265.6109.4

0FY2019Ratio of men taking
childcare leave, etc.

10.8

11.5

12.5

FY2020

FY2021

FY2022

Paid leave(Unit: percentage)

100

89.5

80

60.3

60

18.7
（0.29％）

40

35.9

30.4

FY2019FY2020

15.9
Ratio of leave used

20
0

Average days of leave taken

FY2021

FY202281.5 ％FY2022(Percentages in parentheses indicate the ratio to total claims.)

GovernanceRatio of independent outside directors

Explanation of Terms

2. Doubtful claims
Claims against borrowers who are not yet in a state ofbusiness failure but whose financial condition or businessperformance has deteriorated and from whom it is highly
likely that the recovery of principal and receipt of interest inaccordance with the relevant contracts will not be possible.

FY2023 renewableenergy ratio

155.4

Note: Claims subject to disclosure under the Financial Revitalization Act and claims subject to risk management include loans as well as foreign exchange,customer liabilities for acceptances and guarantees, interest receivable, suspense payments, and guaranteed privately placed bonds. Direct depreciation
is not performed on uncollectible portions of bad debts.

1. Bankrupt claims and equivalent claims
Claims against borrowers who are in a state of businessfailure due to bankruptcy, corporate reorganization, civil
rehabilitation, or other such procedures, and claims
equivalent thereto.

Our bank’s scope1 and 2 emissions

As of June 30, 2023

(Unit: billions of yen)
6.1

A

A

Claims subject to disclosure under the Financial Revitalization Act,
claims subject to risk management, and coverage status
120

High

A-

18.36

16

AAA

Security

20.69
19.06

Environment

Ratings(Unit: percentage)

24

0

Corporate Data

Non-Financial Highlights

Financial Highlights

20

Value Creation Strategy

3. Substandard claims (claims other than 1 and 2 that fallunder either of the following)• Claims overdue by three months or more
Loan claims for which the payment of principal orinterest is overdue by three months or more from the
day following the agreed payment date.
• Restructured claims
Loan claims for which we agreed to arrangements
favorable to the borrower, such as reducing or waiving
interest, deferring repayment of principal, or waiving
claims, for the purpose of restructuring or supporting
the business of the borrower.

44.4 ％
As of June 23, 2023

Ratio of female directors

22.2 ％
As of June 23, 2023

Annual Report 2023

22

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Overview of Our Medium-Term Management Vision 2021

Supporting Our Customers and Regions
Through the Combination of Financial Services,
Non-financial Services, and Relationships
The structure of society and industry is changing significantly due to decarbonization and digitaltransformation efforts. Our bank sees these changes as an opportunity, and we are working toachieve our Medium-Term Management Vision 2021 in order to realize further growth.
By improving the skills of each employee, enhancing our financial services, and enriching our nonfinancial services, we aim to form stronger relationships with customers and become a banking
group that is truly a cornerstone of the regions we serve.

Management Philosophy

Theme

1

Theme

2

Theme

Supporting Our Customers and Regions Through the Combinationof Financial Services, Non-financial Services, and Relationships

3

We have set out five themes that capture our approach to making innovations to our businessmodel while responding to changes in customer needs and society.

Theme

2

Theme

3

Strengthening theLifestyle Support
Business

Providing Comprehensive
Financial Services andFunctionspp.45–46

pp.47–48

Theme

1

4

4
5

pp.43–44

Theme

Theme

Theme

Sustainability as
the Core of
Our Business

Theme

5

Digital Reforms to
Operations andOrganizations

Personnel System
Reforms to Support
Growth and Satisfaction

pp.49–50

pp.51–52

Supporting the sustainable
development of the region as a bankthat enables and vitalizes communities

We will actively work to resolve the social issues
facing the regions we serve in cooperation withgovernment, corporations, and the people of ourregional communities.

Contribute to regional development
through a commitment to sound banking principles.
Medium-Term Management Vision 2021

Sustainability as the Core of Our Business

Strengthening the Lifestyle Support BusinessSupporting customer lifestyles as alifelong banking partner

We will endeavor to strengthen our financial advisor
consulting services, enrich our non-face-to-faceserves, and expand our trust services.

Providing Comprehensive Financial Services and Capabilities

All-inclusive support for corporate
management

We will work to increase the skills of our employees,
expand the functions of our non-face-to-faceservices, and strengthen our consulting services andgroup capabilities.

Digital Reforms to Operations and Organizations

Improving operational efficiency andcreating new services

Our banking group as a whole will improve
operational efficiency through digital reforms, andwe will work to develop new services and enhance
operations through data utilization.

Personnel System Reforms to Support Growth and Satisfaction

Encouraging the growth of each
employee

We will shift the focus of the main duties of
employees to relationships through customer
inquiries and problem solving, and work to reform
our personnel system in order to respond to thediverse range of employee values and lifestyles.

Medium-Term Management Targets
Net income attributable to owners of parent

FY202525.0 billion yen or more

Ratio of consolidated to non-consolidated net income

FY20251.25 or more

Consolidated dividend payout ratio

FY2022–FY2025

40% or more annually

FY2023Net zero

FY203060% reduction compared to FY2013

Greenhouse gas (CO₂) emissions

23

Annual Report 2023

Annual Report 2023

24

Sources of Value Creation

Value Creation Strategy

Special Feature 1

Achieving Comprehensive Financial Services

In order to achieve our Medium-Term Management Vision 2021,“Supporting our customers and regions
through the combination of financial services, non-financial services, and relationships,”our branch
employees are working hard to provide a broad suite of financial services to our customers. We held a roundtable meeting between three young employees representing the next generation of our bank and twooutside directors, using the challenges the employees face at work to discuss the skills and characteristics
that our employees should strive to achieve.

Sakamoto: It’s a very big topic, but to me, I thinkit means addressing the management issues orconcerns of our customers and using a variety of
information to provide services that satisfy themthrough our bank’s group companies andaffiliates.
Sudo: I feel that our bank’s strength is the richamount of customer information we have and thehistory we’
ve built. I think that providing
comprehensive financial services means
contributing to the development of regional
communities using that information and history.
After I transferred to the Tokyo Branch in
February, I learned that our bank has had
dealings with major companies that everyone
knows going back a long time, so I really got asense of our history and position.
Takada: I thought of two things. The first isbringing satisfaction and profit to customers. The
second is contributing to the sustainable growthof companies. When we’
re involved in sales
activities, we can tend to become focused on
what’s immediately profitable, but I try to offer
solutions to customers after reconsidering what isbest for them from a long-term perspective.
Kanzawa:“Comprehensive financial services”is aterm that has been used for a long time, but I
think it’s important for our bank to offer our own
brand of these services. We have groupcompanies engaged in a variety of businesses,
and we have a large number of branches in
Nagano Prefecture and a strong degree of trust
due to our high capital adequacy ratio. I think it

Annual Report 2023

2

3

1

4

What are the important challenges that you
feel you face now in regard to your work?
will be important for our bank to use thosestrengths to provide optimal solutions thatcombine the resources of The Hachijuni Bank
Group to address issues such as digitalization, an
aging population, and population decline.
Kanai: First, I hope you feel a certain sense of
humility at the fact that we’
re in a position toprovide these services because of the long historyof trust that has been established in Nagano
Prefecture by the people before us. Even thoughthey’
re called“comprehensive”financial services,
the type of service necessary depends on the
person receiving it, and top banks need to beable to satisfy all types of customers. But it’sdifficult to handle everything by yourself, so I thinkthat what customers need from a bank employee
is someone who is versatile and can quickly
respond to a wide range of inquiries by knowing
who to ask or where to look to find solutions.

What do you do in order to build
trust with customers?
Sudo: I try to get to know our customers, ofcourse, but I also try to learn about the region I’mworking in. I’
ve had the experience where a lot ofcustomers have been referred to our bankthrough connections in the local community, so I
think it’s very important to build trust while
getting to know more and more people in thecommunity.
Takada: It’s related to what Mr. Kanai said about
being versatile, but because the number ofservices we offer every day are increasing, I
research things like the new services offered bygroup companies and new possibilities throughbusiness referrals in order to improve myknowledge for work. I think that I can earn trustby being able to quickly respond when a

1 Nakano Branch

2 Tokyo Branch

3 Okaya Branch

Ayana Sakamoto(Joined in 2013)

Tomohiro Sudo
(Joined in 2015)

Yui Takada(Joined in 2016)

Joined Okaya Branch
before working at the
Takada Branch and then
Nakano Branch. After
returning from childcare
leave, now assists
corporate and individual
customers.

Joined Suwa Branch.
After experience at
Naoetsu Branch, current
department, and otherbranches in and outsideof Nagano, now assists
listed companies.

Joined Minowa Branch
as an office worker.
Transitioned to sales andmoved to Okaya Branch.
Currently assisting
corporate customers.

4 Eiji Kanzawa, Outside Director

5 Takayuki Kanai, Outside Director

Assumed role as outside director in
2021 (see p.72). His hope for our bankis that we provide consulting that
integrates the resources of theHachijuni Bank Group while being
mindful of the changes occurring in the
structure of industry in the prefecture.

Assumed role as outside director in
2022 (see p.72). He expects our bankto provide all-inclusive services to thewide range of customers we serve.

5

customer has a problem and tell them what we’reable to do to resolve it.
Sakamoto: I think it’s really important to pay
attention to a wide range of information to findthings that might be useful, so that I can offer
solutions to needs or issues that customers don’trealize they have. I try to find my own approachto these issues and try to find something that ourbank can do to help.

What are your thoughts on being acomprehensive financial services provider?

Corporate Data

Participant Backgrounds

Supporting Our Customers and Regions
Through the Combination of Financial Services,
Non-financial Services, and Relationships
A Dialogue Between Outside Directors and Young Employees

25

Value Creation Strategy

Takada: Our bank is progressing with digitaltransformation, and the scope of work that canbe handled by AI and machines is increasing, so I
think that eventually, all that will be left for us to
do is to communicate with customers. But atpresent, it’s difficult to find enough time to meetwith customers because of the time I need tospend on internal office duties, so I feel that
increasing the efficiency of our work is an
important challenge.
Sakamoto: Bank employees are often transferred
to different locations, so I feel an important
challenge is creating continuity with the person
coming after you to enable them to continue therelationship of trust that you built with yourcustomers. Also, when I came back to work after
three years of maternity and childcare leave, I feltthat things today change much more quickly than
before. I think another challenge is to constantly
be refreshing and improving your knowledge tokeep up with the times.
Sudo: Because there are many pressing topics insociety, like SDGs and digital transformation, I feelthat selecting the areas that you need more
knowledge in and then learning about it is an
important challenge. I want to help customers bydeepening my knowledge together with them.

skills and knowledge with an awareness of thesignificance of our bank to our customers.
Kanzawa: I understand this because I used to bea Hachijuni employee, but conversely, our biggest
problem at the present might be that we havealways operated in a favorable environment. In
other words, I want you to avoid being
complacent. How can our bank contribute to thedevelopment of regional economies moving
forward, not only in regard to general financial
services like deposits and loans but also in regard
to non-financial services and other fields? It’simportant for all employees to seriously think
about that without being satisfied with the statusquo.

Do you have any message to sharewith all of our employees?
Kanai: We live in a time when a lot of what wesee on the news is disheartening, but there will
always be areas that grow. I want all of ouremployees to develop the habit of thinking about
what the future will be like in a span of ten or
fifteen years. I think that a bank that can takeaction on future trends ahead of everyone else
will be able to grow.
Kanzawa: I want all of our employees to become
people who can create value for our regional
communities and economies. To do that, I wanteveryone to have a strong sense of ethics and to
improve their abilities to accurately identify
customer needs and offer optimal solutions basedon deep trust. Because Hachijuni is the top bankin Nagano Prefecture, I want it to be a gatheringof that kind of talent.

What do the directors think of theviews shared here by the employees?
Kanai: I think there are a variety of challenges our
employees face, but what I want employees toappreciate is that we are in a very fortunate
position as the top bank in Nagano. We aresupposed to be better positioned than otherfinancial institutions, so we should know the mostabout the difficult problems faced by ourcustomers. You should work to improve yourAnnual Report 2023

26

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Changing with the Times

Special Feature 2

Leveraging Human Capital

A New Age in Human Capital
Human capital supports the achievement of our management philosophy and the executionof our growth strategies. The managers of our Human Resources Department and Diversity
Promotion Group shared their views on how human capital can serve as the source for all
value creation.
Our Bank’s Unchanging Strength:
Human Capital
Urahara: What do you think are our bank’sstrengths in regard to human capital?
Ito: Our strength is that our management
philosophy,“Contribute to regional development
through a commitment to sound banking
principles,” has really taken root in our
employees. In over 90 years since our founding,that management philosophy has always
supported our customers and regional
economies, and the trust we’ve earned from theregions and customers we serve is thanks to thatphilosophy. All of our employees can recite itfrom memory. Even though the environment
surrounding our society is rapidly changing andHuman Resources
Department Manager(Currently Executive Officer andInternal Audit Department Manager)

Kiyomi Ito
Joined in 1992. Worked in sales
while raising two children.
Served as Asahi BranchManager in the Higashi Wada
area, Nagano Minami BranchManager, Omachi BranchManager, and Human Resources
Department Manager. From
June 2023, serves as Executive
Officer and Internal Audit
Department Manager.

we’
re currently endeavoring create new
businesses and provide new value under thevision of“Supporting our customers and regions
through the combination of financial services,non-financial services, and relationships,”because
our management philosophy is deeply ingrainedin our employees, I’
m sure that our commitment
to the development of regional communities thatlies at the core of our bank will never waver evenas our business domains expand and societychanges in the future.
Urahara: A lot of people who apply to work at
our bank say that they want to contribute to theregion and that their reason for applying is thatthey want to give something back to Nagano orcontribute to the development of Nagano. I feelthat’s also a big strength of our bank, because
the sense of meaning employees have in theirwork is directly linked to achieving ourmanagement philosophy.
Ito: Another strength is that we have a deeply
rooted culture of developing employees over thelong term, to the extent that we’
re sometimes
called a talent development bank. We have aculture where everyone, including not just humanresources staff or supervisors but also part-timeworkers, cooperates to watch over each
employee and help them learn and grow.
Urahara: In fact, in our latest engagement survey,
the positive response ratio* to coworker support
statements like“I want to be active in workplacelearning and coworker growth”was very high at
around 90%. I agree that the kindness andwarmth of our employees and their skill at taking
care of each other are big assets to our bank.
(*Positive response rate.)

27

Annual Report 2023

Urahara: It’s said that we’
re living in an era of
VUCA (volatile, uncertain, complex, andambiguous), and the issues facing customers are
becoming more sophisticated and diverse. Whatdo you think is needed in order to develop
human resources that exceed customer
expectations?
Ito: I think the foundation is developing andproducing a succession of human resources that
embody the characteristics we seek—establishedstrength, an enterprising spirit, and thinking andacting independently. Based on thesecharacteristics, in the personnel system reforms
made in fiscal year 2022, we created a multipletrack career development system in which
employees can choose how to establish theirstrengths and increase their expertise. This
multiple-track system is composed of fivedifferent tracks, such as the existing management
track and a new professional track that increases
expertise in solving issues facing customers, soeach employee can make use of their individual
strengths.
Before these reforms, instead of employees
building their careers themselves, it was common
for our employees to view their careers as
something determined by factors such as how
they were assigned and transferred by the bank.
Moving forward, employees will have to think forthemselves about where their strengths lie andhow they want to develop their careers. That is asignificant reform for our bank.
Urahara: In order for each employee to think
independently about their career, we provide
personality assessments that evaluate individual
characteristics, goals, and views towards work,
and we have begun holding one-on-one meetingscalled“Your Time”at the workplace to provide
coaching to develop the strengths of each
employee. We are also expanding the career
management training offered outside of theworkplace, and we will continue to support
employees in establishing their own strengths.

Becoming an Organization Where Each Person
Independently Thinks, Strives, and Grows
Ito: One issue we face at present is that I feel it’snecessary to establish a culture where employees
can take on more new challenges. We need tofoster an organizational environment thatdevelops personnel who can take action andhave the courage to try new endeavors bycreating a culture where people can accept
failure and learn lessons to prepare them for the
next challenge.
Urahara: I think it’s difficult to develop employees
who actively take on new challenges if anorganization is inward-looking and largely
homogeneous. In order to use diversity tostrengthen the organization, it’s necessary topush each other to improve by accepting andencouraging each other. Diversity and inclusion is
actually one of our bank’s material issues, so it’sa challenge that should be among our top

Corporate Data

Human Resources Department,
Diversity Promotion Group Manager

Harumi Urahara
Joined in 2000. After childcare
leave, served as Individual
Customer Section Manager at
Miyoshicho Branch and Ueda
Branch before becoming a memberof the Planning and Coordination
Department’s Structural Reform
Promotion Project Team in 2020.
Since 2021, serves as Diversity
Promotion Group Manager.

priorities.
Ito: In order to turn diversity into a strength of theorganization, in addition to considering diversity
in terms of basic attributes such as age andgender, it’s also important to value different
experiences and opinions, such as by increasing
the hiring of experienced personnel or taking onolder employees.
Urahara: I also feel very strongly that I want ourorganization to be one where everyone can freely
and openly express their opinions, so I want towork towards creating a workplace where people
feel safe emotionally. I want to make our bank aplace full of employees who feel that they are
growing and contributing and who enjoy andtake pride in their work.
Ito: The approach of thinking thoroughly about
what we can do for our customers and regions
and then working together to achieve that has
always been, and always will be, the same.
Beyond that, we also need to be active and takeon new challenges. Our aim is to work together
to foster an organizational environment where we
accept each other’s diversity.

Contributing to the Development of Regional
Communities through a Virtuous Circle That
Returns Human Capital to Regions
Ito: On the topic of diversity, more men at ourbank have been taking childcare leave.
Urahara: I’
ve had more opportunities recently togive lectures all around the prefecture on the
topic of why childcare leave for men is necessary.
Responding to the low birthrate and aging
population is an important issue for all theregions we serve, and I want our bank tocontribute to those regions by working to resolve
such issues as a leading company.
Ito: In regard to contributing to our regions, we’realso focusing efforts on sharing the humanresources we’
ve developed. For example, we loan
or transfer qualified human resources to customers
who need management personnel. Human capitalthat has been developed in a region is eventually
returned to the region through our bank, and I
think that contributes to the region’s ultimate
sustainability. Our customers and regions enable
us to grow through our work with them, so weneed to give something back.
Our regions and other stakeholders can continue
depending on us to give our all to contributing to
the development of our regional communities by
maximizing the value of our human capital.

Annual Report 2023

28

Sources of Value Creation

Value Creation Strategy

Special Feature 2

Core View: Human Capital Supports The Hachijuni Bank GroupIn order to contribute to regional development through a commitment to sound banking principles
as set out in our management philosophy, we believe that it is essential to promote managementthat leverages human capital, which is the source of the value created by The Hachijuni Bank Group.
To realize the goals set out in our Medium-Term Management Vision 2021, we will build
relationships with customers and a wide range of stakeholders, and develop human resources withhigh added value who can assist in the sustainable development of our communities.
We will also support the self-fulfillment of our employees through independent career development
and create an environment where diverse human resources can thrive in order to become anorganization that can continue growing over the long term.

Long-Term Personnel Policy
We have established a long-term personnel policy in order to develop human resources with highadded value who embody our management philosophy, and we are working to develop employeeswith the characteristics needed by our customers and to strengthen our main personnel systems.

Long-Term Personnel Policy

Human Resource Development

In order to achieve employee self-fulfillment through independent career development and to fulfill our
corporate purpose through the execution of our management strategies, we will utilize the diverse
values and characteristics of our employees and support them in developing a versatile range of skills.

Creating an Environment for Human Resource Development

We will foster an organizational environment rich in diverse thinking and a customer-focused mindset
as a foundation for developing in-demand human resources.

Necessary Employee Characteristics
Established strength

Thinking and acting
independently

Enterprising spirit

Encouraging careerdevelopment using
individual characteristics
and existing skills

Multiple-track careerdevelopment system
Utilizing strengths

Work systems, work-lifebalance support systems

Medium-Term
Management Vision
2021(Long-term
management plans)

Annual Report 2023

Personnel
management

Career counseling
Personnel evaluations
Assignments andtransfers

Increasing strengths

Encouraging diverse learning
to achieve career vision andincrease expertise in chosen
career track

Promoting flexible working styles by expanding
paid leave and creating systems for working from home

Diverse personnel thriving

Linking ofmanagement
strategies andpersonnel
strategies

Systems for
improving skills

Key Medium-Term Themes
Improving versatileskills by using
individual values andcharacteristics

Strengthening problem
solving abilities basedon understanding ofcustomers

We have established a long-term personnel policy for human resources development and created aworkplace environment suited to that purpose. We have also selected key medium-term themes
representing current challenges to be addressed under that policy and are implementing specificmeasures to do so.
The long-term personnel policy expressly states our bank’s basic views on human resource
development. These views are at the core of the measures we have implemented under the themeof personnel system reforms to support employee growth and satisfaction as set out in our MediumTerm Management Vision 2021. The personnel system reforms include many new policies and themultiple-track career development system.
Based on the long-term personnel policy, the key medium-term themes were chosen based on theirconnection to the Medium-Term Management Vision 2021. The current themes are establishing apractice of diverse active skill development, and strengthening employees’abilities to understandcustomers and solve problems. Increasing emotional safety has also been set as a theme as we
believe it will contribute to the creation of an environment for developing flexibility and a customerfocused mindset, which is another theme that we consider to be particularly important as we seek
to make reforms.
We believe that the fulfillment of our corporate purpose and achievement of constant growth arelinked to the independent skill development and self-fulfillment of each employee, and so we will
work to further establish an environment where employees can feel that they are contributing andgrowing through their work and the development of their skills.

Promoting Personnel Strategies
In June 2021, we established the Diversity Promotion Group within the Human Resources Department
as a group dedicated to promoting diversity and reforms to working styles. Additionally, we
combined the Training Group, which handled skill development support, and the Human Resources
Consultation Group, which handled assignments and transfers, to create the Career Development
Group in order to strengthen our support for career development from hiring through to retirement.
Through these efforts, we have established a system through which we can execute suitable personnel
strategies that are linked to our management strategies.
We also introduced a multiple-track career development system in July 2022 in order to develop
human resources with high added value, thereby encouraging career development that utilizes thestrengths and aptitudes of our employees.

June 2021●Established the Diversity Promotion Group●Established the Career Development Group

July 2022●Introduced multiple-track career development system➡ Please see p.51 for details.

Promoting Diverse Human Resources by Hiring Specialist Personnel

Main Personnel Systems

29

Corporate Data

Leveraging Human Capital

Human Capital That Supports Growth Strategies

Short-term
management
plans

Value Creation Strategy

Increasing emotional safety
to foster a flexible andoutward-looking
organizational environment

Establishment and timely review of human resources portfolio,
efforts to address key themes

In order to achieve the goal of“supporting our customers and regions through the combination offinancial services, non-financial services, and relationships”set out in our Medium-Term Management
Vision 2021, it is essential to ensure diversity not only in regard to basic attributes such as age or
gender but also in regard to experiences and views. For that purpose, we are strengthening ourefforts to hire a variety of diverse talent.
Particularly in regard to the hiring of experienced personnel, we are focusing efforts on hiring people witha higher degree of specialist expertise or with a strong desire to obtain that expertise in order tocontribute to new fields of business that will achieve our goal of providing non-financial services. We arealso developing a foundation for those employees to make full use of theirskills by means of placement in management positions upon hiring.
In October 2022, we made changes to our returnee program, whichenables employees who left in the past due to reasons such as newjobs, childcare, or family care to return to work with us, in order tomake it easier for people to come back to work regardless of how
many years have passed since they left.
Through measures such as the returnee program, we are working toprovide services with an even higher level of added value by utilizing
employees with diverse perspectives based on experiences outside
our bank.
Annual Report 2023

30

Sources of Value Creation

Value Creation Strategy

Special Feature 2

Value Creation Strategy

Corporate Data

Leveraging Human Capital

Developing Employees with the Necessary
Characteristics: Creating Ways for People to Grow
To develop human resources under our long-term personnel policy, we conduct on-the-job training
based on each employee actively working to improve their skills and knowledge in combination withcareer counseling, outside training, and other opportunities. We have also created an environment
where employees can choose to further their knowledge through our programs supporting employees
in earning government-recognized certifications, voluntary training known as Seisei Juku held on
weekends, and support for purchasing self-study materials.
Training hours*

Training costs

Total training hours

73,247

Average training hours per employee

24.1

Total training costs
Average training costs per employee

Approx. 260 million yen
Approx. 85,500 yen*Excluding voluntary training

In fiscal year 2022, we began offering“Your Learning,”an outside resource of self-study videos, forfree in order to create an environment with diverse learning opportunities. A total of 650 employees
participated in four different courses in the first fiscal year. As part of our digital reforms, we also
provide smartphones to employees to increase their opportunities to participate in training.

Participants

Career Management Training and Career Counseling
We motivate our employees to think about their career vision and actively and systematically work
to develop the skills necessary to achieve that vision through career management training held
periodically based on career length and employees age. In addition to that training, we also conduct
career counseling sessions with Human Resources Department staff to further support careerdevelopment.

Participants832 (year-on-year increase of 331)

Outside Training

650 (including repeat participants)

Support for Earning Government-Recognized Certifications
In order to encourage employees to develop specialist knowledge and skills, we offer support suchas subsidies and incentives of up to 500,000 yen to people who obtain government-recognizedcertifications, which are generally considered to be very difficult. We add new certifications for which
employees can receive incentives each year to promote the development of specialist knowledge
across a wide range of areas.
Certification
holders at
end of
FY2022●Main Efforts

Small and medium
business consultants

Grade 1 financial
planners/Certified
financial planners

Grade 2 financial
planners/Affiliatedfinancial planners

Securities analysts

Real estate notaries

57

129

1,223

55

305

Programs to Develop Employee Understanding of Sustainability and Digital Technology
In order to promote understanding of sustainability among all employees, we introduce employees tocorrespondence courses and support employees in earning certifications. We actively support
employee learning on sustainability by paying incentives to employees who achieve excellent grades incorrespondence courses on sustainability or who earn related certifications, such as the Carbon
Accounting Advisor certification.
We also implement a variety of training and initiatives regarding digital technology and digitaltransformation as we believe that all employees need to work to increase their knowledge in thoseareas.
➡ Please see p.50 for information on digital technology and digital transformation training.

In order to respond to the increasing sophistication anddiversification of customer needs and changes in the external
environment, we hold outside training available to all employees
to help them gain a wide range of management skills, knowledgeof how to work in specific fields, and general business skills. This
training and the OJT conducted afterwards expand the duties
handled by each employee and increases their expertise.

Participants

Self-Study Video Training

5,319 (including repeat participants)

Open Application ProgramThis is a program for employees who have continuously worked hard that supports them inachieving further growth and playing a greater role at our bank. Certain positions (such as at thehead office, branches, or for long-term training) are opened up to accept applications from ouremployees, who can then apply for the work they want to be involved in or the position they want
to be assigned to. Employees who apply and pass an examination are given preference in being
assigned to the work or positions they select.

Applicants

82 (year-on-year increase of 32)

Seisei Juku
We hold voluntary training to support employees in developing their skills and to create anenvironment where they can choose to further their knowledge. A wide range of training courses tosupport employees in self-motivated development are offered, and many employees participate
each year. In fiscal year 2022, we held a total of 37 courses on topics such as business skills, liberal
arts, and support for earning certifications, drawing 2,203 participants in total.
Examples ofcourses held
in FY2022●Business skill training:“Product Development That Designs Strengths”●Career training:“Independent Career Development for the Future”●Diversity training:“What Happens When We Bring Diversity into the Organization?”●Certification exam preparation course:“Preparatory Course for Small and Medium
Business Consultant Exam”

Participants
31

Annual Report 2023

2,203 (including repeat participants; year-on-year increase of 213)

I used the open application program to act on my desire to contribute to the region.

Business Planning Department

Even before I joined the bank, I really wanted to do work that contributes to theregion, so in my fourth year, I applied to the Web and App Advertisement
Department through the open application program. I applied because I thought thatby being involved in advertising, I could help vitalize the region by helping spread
information to even more customers in our area.
After passing the application exam, I was loaned to iBank Marketing Co., Ltd., where
I learned about all aspects of advertising and was exposed to a diverse range ofvalues. My goal moving forward is to help contribute to the region by promoting theuse of our bank’s Wallet+ app as an information tool.

Minami Hosono

Annual Report 2023

32

Sources of Value Creation

Value Creation Strategy

Special Feature 2

We consider the promotion of diversity and inclusion to be one important challenge in ourmanagement, and our intent is to value diversity in gender, age, and work experience as well as invalues and to use that diversity to strengthen our organization.
We have established a basic policy on diversity and inclusion and are promoting a variety of efforts
in order to contribute to our customers and regions using the combined efforts of all or our
employees, by accepting each other’s diverse characteristics and helping each other grow.

Basic Policy on Diversity and Inclusion●Main Efforts
Diversity Management Training
We hold training for management-level employees in order to implement diversity management inwhich managers leverage the diverse people working under them by accepting their uniquecharacteristics and drawing out their strengths. In fiscal year 2022, diversity management training
was held for all branch managers.
Participants 152

Promoting the Active Role of Women

We promote the active role of women, who account for about half of our employees, with the goalof creating new value and increasing our strength as an organization by creating a system in which
women can put their skills to use at all stages of their careers.
Specifically, we are working to improve our personnel system and expand the areas in which womenare active. Under our multiple-track career development system, 88 female employees changed theircareer tracks from clerical duties to general duties in fiscal year 2022 and are taking on new
challenges in areas such as assisting corporate customers. By promoting flexible working styles, weare also creating an environment where all employees, including those balancing work and family,
can positively develop their careers.

KPI

In order to do away with preconceptions of fixed roles for men and women and to enable everyone
to put their skills to use at all stages of their careers, we are engaged in efforts such as supporting
career development and promoting flexible working styles for all employees.
General Employer Action Plan Under the Act on the Promotion of Women’s Active Engagement inProfessional Life (Third term: October 1, 2021–September 30, 2026)② Ratio of men taking leave for childcare

Review working styles to reduce total hours worked and support balance of work and personal life

33

・Average days of paid leave taken annually・Implementing flexible working styles, such as expansion of working
from home

Annual Report 2023

FY2022 results

19.8％
12.5％

100％

89.5％

Targets

FY2022 results―

Expanded support for returning to work after childcare leave
Introduced computers for working from home

13 or more

15.9

We have established systems to support employees who are raising children or caring for family
members, and we are creating a workplace environment where all employees, both men andwomen, can thrive while balancing work and their personal lives.
Marriage

Pregnancy

BirthMaternity leave
before/after birth

Marriageleave(10 days)

Post-birth childcare
leave for fathers

Childcare

Extended childcare
leaveChildcare participation leave(10 days)

Family care
Shortened working
hours

Extended family careleave

Nursing care leave

Family care leave

Referrals to nursery schools
and day-care centers

Subsidies for at-homefamily care

Joint transfers for spouses, returnee program
Half-day leave, hourly leave, staggered working hours, work from home

Meeting
beforematernity
leave

Support for
returning
to work

We hold workshops as part of our training in order to promote understanding of unconscious bias,
which can be an obstacle to promoting diversity.
Participants 991

30％ or more
18％ or more

●Main Efforts

Career development support

Unconscious Bias Training

Ratio of women in leadership positions
Ratio of women in management positions

We are focusing efforts on improving the workplace environment and expanding our employee
benefits so that our diverse group of employees can put their skills and motivation to maximum use.
By providing employees with flexible working styles through the use of digital technology to enable
them to work from home or at satellite offices, we are expanding the opportunities for employees tomake the most of their skills and are supporting the development of their careers. We are actively
working to maximize our strength as an organization through reforms to working styles.

Systems supporting balance

Through all of our employees accepting each other’s diverse characteristics and helping eachother grow, we will:
1. Foster an organizational environment where employees can make the best use of their skills;
2. Encourage positive action by creating a workplace environment where employees can frankly
express their views; and3. Create new ideas and value by increasing employee satisfaction and desire to grow.

Targets

Providing Flexible Working Styles

Supporting Balance between Work and Child/Family Care

Slogan: Accepting Each Other’s Diversity to Grow Together③

Corporate Data

Leveraging Human Capital

Promoting Diversity and Inclusion: Accepting Each Other’s Diversity to Grow Together①

Value Creation Strategy

Meeting before
returning to work

Training for returning
to work

Return support
training

Refresher training

Holding gatherings for working parents to share their experiences
Career management training, Your Learning, Terrace 82 (viewing internal documents, taking online courses, etc.)

Support for Balancing Work and Medical Care
In January 2023, we expanded special leave for non-work-related injury and illness to make itavailable for infertility treatment and outpatient cancer treatment as well.
That leave allows employees to take up to 60 days of special paid leave per instance of injury orillness not related to work in cases where a doctor determines that long-term treatment isnecessary. By expanding our systems for employee leave and training, we are creating anenvironment where employees can have peace of mind as they continue working while receiving
treatment for non-work-related health issues.

Promoting the Participation of Male Employees in Childcare
As we aim to create a workplace environment where both men and women can balance work andchildcare, we have set our target for the ratio of men who take leave for childcare at 100% and areencouraging male employees to do so. In October 2022, we made changes to our bank’s uniquesystem for childcare leave and made it possible to take ten days of leave from the birth of a child
until the last day of the month in which they turn two years old.
By increasing the number of days of leave available, expanding the period during which it can betaken, and allowing it to be used in hour-based increments, we have established a system wheremale employees can flexibly participate in childcare in a way that suits the circumstances of eachfamily.
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Sources of Value Creation

Value Creation Strategy

Special Feature 2

Value Creation Strategy

Corporate Data

Leveraging Human Capital

Taking childcare leave broadened my perspective and improved my ability to plan ahead.
I took extended childcare leave for about two months when my second child wasborn. During that time, I helped with housework and childcare during the day andtraded nights with my wife getting out of bed when the baby cried. It reminded meof how difficult it is to take care of a child because of the lack of sleep andunpredictable emergencies, so I have continued sharing housework and childcare
duties with my wife after going back to work.
In terms of my work, actively participating in childcare improved my ability to planahead, in addition to which it broadened my perspective and gave me more ways tostart conversations with my customers, so I also feel that I am able to offer a wider
range of solutions. Before I took leave, my supervisor and coworkers actively offered
their help and made things go much more smoothly for me. I want to keep doing mybest to work productively and achieve results while balancing work and my family.

We have set up whistleblowing hotlines that include outside organizations independent from ourmanagement team. We ensure the proper operation of our whistleblowing system by concealing theidentities of employees who use the system, maintaining confidential channels, and by stipulating in
our internal rules that no reprisal will occur due to having made a whistleblowing report.

Harassment Prevention Training

Head Office

Yoshiki Hashimoto

Yoshiki taking childcare leave has helped the other members grow.

Head Office Sales Department,
Deputy Sales Manager

Akira Kuwahara

Because Yoshiki is a key member of our group, I thought that him taking
extended childcare leave would be a good stimulus to the other members, so I
encouraged him not to be hesitant about it. His leave served as an opportunity
to improve our systems and foster a good environment for all of our members
to cooperate more closely. The other members had many positive things to say
about Yoshiki taking extended leave, and it led to the growth of the people
who took over his role while he was away, so I truly feel that it has increased
our strength as an organization.

We are working to increase employee engagement because we believe that an environment
where employees feel purposeful and satisfied is necessary in order to fulfill the expectations of
our customers and communities.
To increase engagement, in addition to striving for work satisfaction in a comfortable working
environment, it is also necessary to create a common understanding by sharing our bank’smanagement policies, views, and other values with our employees. We are engaged in efforts
to increase our employees’understanding of and commitment to our management policies andviews by bringing employees and management closer together through ways such as thepresident visiting branches to engage in direct dialogue with employees.
We will continue striving to become an organization where employees feel satisfied in order toachieve total engagement.
Total Engagement
Total engagement means that each person feels a sense of significance in their work or
in working at their current workplace or company and feels that they are contributing.

Positive
response rate

73.9％

Achievements◦Conducted harassment prevention training at all branches in FY2022◦Conducted comprehension tests on harassment for all employees

Corporate HealthAs we recognize that maintaining and promoting the physical and mental health of all of ouremployees and their families is crucial in order for employees to make maximum use of their skills,
we have established a basic policy on corporate health that serves as a foundation for our approachand are promoting a variety of health initiatives.

The Hachijuni Bank Group recognizes that maintaining and promoting the physical andmental health of our employees and their families is essential to the sustainable growth of
our organization, and we will actively work to promote corporate health and support thewell-being of our employees and their families.

●Main Efforts
Promoting Healthy Lifestyles

Outstanding Employer
in Corporate Health 2023

We are engaged in activities to promote lifestyle improvements through diet and exercise incollaboration with the Hachijuni Bank Health Insurance Association in order to prevent lifestylediseases and encourage employees to get sufficient exercise. The walking challenge that we holdevery year includes awards for departments, branches, and teams and helps to maintain and improve
employee health and to create communication opportunities.

Providing Specific Health Guidance
We are working to increase the ratio of employees who receive specific health guidance offered tothem in order to prevent lifestyle diseases, an important health issue. We aim to increase the ratio of
medical exams and health guidance received not only by employees insured by the Hachijuni Bank
Health Insurance Association but by their dependents as well, and we are continuing to provide
specific health guidance in collaboration with outside specialists.

KPI

Respecting Human Rights and Preventing Harassment➡ Please see p.57 for details of the sustainable investment and lending policy.

We periodically hold study sessions to promote understanding of harassment. In addition to
conducting video training and comprehension tests for all employees to promote understanding, we
give lectures on harassment at training events for department and branch managers and othermanagement-level employees.
We will continue our efforts to prevent harassment by developing a correct understanding among
employees and creating an open and comfortable workplace.

Basic Policy on Corporate Health

Increasing Engagement

The Hachijuni Bank Group recognizes that respect for human rights
is an important foundation in working to achieve sustainable regional
communities and has established a basic policy on human rights.
That policy sets out our commitment to eliminating all types of
discrimination and to not tolerating human rights violations, and in
our separate sustainable investment and lending policy, we stipulatethat we will not provide investment or lending to companies where
there are human rights violations in order to urge our customers totake appropriate steps to address such issues.

●Main Efforts
Development of Whistleblowing System

We have identified the early detection of illness and prevention of lifestyle diseases, mental
healthcare, and the development of a comfortable working environment as key health issues andhave set numerical targets for corporate health.
The Hachijuni Bank
Group Basic Policyon Human Rights(in Japanese)

Key health issues

Early detection of illness andprevention of lifestyle diseases

Indicator

Target (FY2022)

Results (FY2022)

Employees undergoing recommended follow-up tests

90％

82.2％*

19％ or less

18.6％

Employees receiving special health guidance offered
Employees with BMI of 25 or more (indicating obesity)
Employees who smoke

Mental healthcare

Employees completing stress survey

Development of a comfortableworking environment

Average days of paid leave taken annually70％

11％ or less100％

13 or more

78.0％*
11.9％

99.2％
15.9

*Provisional figures

35

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36

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Our ZEB Branches

Omachi Branch(completed October 2022)
Heat pump system using geothermalenergyIwamurada Branch(completed October 2021)
Our first ZEB branchSpecial Feature 3

Decarbonization Initiatives

First in Banking Industry to Achieve Net
Zero Greenhouse Gas (CO₂) Emissions

Fujimi Branch(completed July 2022)

Designed to harmonize with thenatural environment of Yatsugatake
mountain range and the Southern
Alps mountains(For scope 1 and 2 emissions)

As a regional financial institution based in Nagano Prefecture, home to abundant natural beauty, we havefor many years dedicated efforts to decarbonization with a focus on environmentally soundmanagement. Our initiatives are among the most progressive in the banking industry, such as theconversion of branches to net zero energy buildings (ZEBs) and the use of electricity from renewableenergy sources, and in FY2023, we plan to obtain 50% of our total energy from renewable sources.
We have achieved our FY2023 medium-term management target of net zero greenhouse gas (CO₂)
emissions ahead of schedule, and we expect to achieve our FY2030 target of a 60% reduction inemissions from FY2013 levels in FY2023, well in advance of our initial schedule.

Fukushima Branch(completed November 2022)

Nagano-grown cypress used in building

ZEB Initiatives

Our bank has established a general policy that new branches will be made ZEBs in order to makemaximum use of Nagano’s frequent sunshine and cool climate to contribute to achieving adecarbonized society.
We have a total of four ZEB branches, with the Iwamurada Branch being our first to be completed in
October 2021 and the Fujimi Branch, Omachi Branch, and Fukushima Branch following in fiscal year 2022.
As the Omachi Branch sees less sunshine than branches in other regions in Nagano, in addition to
generating solar energy, we also implemented a heat pump system that provides heating and coolingusing geothermal energy. At the Fukushima Branch, wood from multiple types of cypress trees grownin Nagano was used. Moving forward, we will continue expanding our network of branches thatincorporate the rich nature of Nagano.
We will provide the knowledge and technology gained through these initiatives to customers whoshare our strong commitment to the abundant nature of Nagano and Japan and work together topreserve the environment and coexist with nature.

What are ZEBs?
ZEB means a net zero energy building.
By reducing energy consumption through highly efficientinsulation or energy efficient equipment and generating
the energy they use through solar panels or other means,
ZEBs effectively consume no energy.

37

Annual Report 2023

Working Towards Sustainability through New Initiatives
Net zero energy buildings first began being built only a little more than a decade ago in
2010, so when building the new Iwamurada Branch, our bank’s first ZEB branch, thebank, the designers, the builders, and all the other people involved in the project were
daunted by the mission before them as they had never attempted something like it
before. But when we began working on the project, I remember that we were all
relieved to find that a ZEB branch could be achieved by combining all of the ordinary,
existing techniques and technologies that we were familiar with. I want to achievesustainability by providing facilities that are environmentally friendly and easy to use forcustomers, employees, and all other people who use the branch.

Toru Miyazaki

Accelerating Regional Decarbonization through Our Bold Initiatives

Compared toprevious methods
Air conditioning

ReduceNet zeroenergyconsumption

Ventilation
Lights
Hot water

Save energy

GenerateenergyGeneral Affairs Department
Assistant Manager (Class
1 Registered Architect)

General Affairs Department
Assistant Manager

Hiroyuki Kobayashi

I handle the planning and implementation of our bank’s capital investments for
decarbonization through efforts such as ZEBs. Using our open application program, I
was loaned to the Ministry of the Environment for two years, during which time I was
involved in the planning and promotion of decarbonization measures, and I strongly feltthat in order to achieve decarbonization in the regions we serve, it is important to workin collaboration with those regions and to create successful examples. Many people
think that it is difficult to implement decarbonization efforts, but we are taking boldsteps in the desire that we can create examples to benefit the people in the region.

Annual Report 2023

38

Sources of Value Creation

Value Creation Strategy

Special Feature 3

In addition to reducing the energy we consume through everyday energy-saving measures and theintroduction of energy efficient equipment, we are also actively working to transition to generatingenergy through means such as solar power and to using carbon-free energy, a type ofenvironmentally friendly renewable energy. In fiscal year 2023, we plan for 50% of all energy used byour bank to come from renewable energy sources.
We will continue taking on progressive new initiatives to promote our bank’s decarbonization, andwe will work to achieve the decarbonization of our regional communities by providing theknowledge and technology gained through those initiatives to customers who share our strong
commitment to the abundant nature of Nagano and Japan.
18,639,598

Corporate Data

Decarbonization Initiatives

50% Total Renewable Energy Ratio Projected to be Achieved in FY2023

General power

Value Creation Strategy

Renewable energy

17,399,044(Unit: kWh/year)

17,136,595

16,363,921

15,248,553

15,112,276

Purchase of J-Credits
Our bank became the first to purchase the initial J-Credits created by the Nagano Public Corporationof Forestry in order to promote forest management in Nagano Prefecture, thereby achieving carbon
offsets for a portion of our emissions. The proceeds from the purchase of the credits will be used topromote local forest management and contribute to
the further absorption of greenhouse gases. At thesame time, we have also begun referring customers
to the J-Credit scheme.
Using our partnership with the Nagano
Public Corporation of Forestry as astarting point, moving forward, we will
cooperate with local governments andbusinesses that are expected to generate
J-Credits and work to promote the use of
J-Credits to achieve carbon neutrality.

Nurturing the pure air and water of Nagano Prefecture through forest
management to increase forest resource value and corporate value
FY2018FY2019FY2020

FY2021

FY2022

FY2023(planned)

Expanding Use of Shinshu Green PowerIn February 2023, all three of our head office buildings began using Shinshu Green Power, which we
had previously introduced at six of our branches.
Shinshu Green Power is carbon-free energy generated in Nagano Prefecture (also known as Shinshu)
through hydropower plants operated by the Nagano Prefecture Enterprise Bureau, and the energy
used by our three head office buildings now entirely consists of renewable energy generated in
Nagano. This will further reduce our greenhouse gas (CO₂) emissions by 3,000 tons per year, whichis equivalent to emissions from approximately 1,000 ordinary households.
Renewable energy
generated in Nagano• Appropriate
forestmanagement

Local organizations holding
J-Credits(Local governments, unions,private corporations)• Promote use of carbon offsetting as means to differentiate
management and sales strategies• Increase corporate value by contributing to achievementof SDGs and implementation of ESG management
Sale
Customer corporations
and organizations

Funds
Purchase

The Hachijuni
Bank

Referral*J-Credits: Credits recognized by the national government that represent the intangible value of CO₂ and other greenhouse gas emission reductions andabsorption through means such as forest management.
*Carbon offsetting: Using J-Credits and similar schemes to compensate for CO₂ and other greenhouse gas emissions that cannot be eliminated.

Supporting maintenance andexpansion of renewableenergy sources

Market Purchase of Non-Fossil-Fuel Energy Certificates—A First Among Regional Banks

Creating Transformation Beginning with Our Bank ThroughDecarbonization and GX* Initiatives

Through the use of non-fossil-fuel energy certificates,
the electricity used by our bank that is not Shinshu
Green Power (carbon-free energy produced in
Nagano) is also effectively supplied by renewableenergy.
We purchased these non-fossil-fuel energy certificateson the market, becoming the first regional bank (andsecond in the banking industry in Japan) to do so, andwe chose certificates that represent energy fromhydropower plants in Nagano in order to promotelocal production for local consumption.

In carrying out our bank’s measures to achieve decarbonization and GX, I consider
the social backdrop and currents as well as the expectations of society to determine
what we should prioritize as a regional bank, and then I focus on rapidly achieving
those priorities.
This field is changing very quickly, and there are many tasks and operations that are
new experiences for our bank, so it has been difficult for me to bring my knowledge
up to date, but we are working to obtain the latest information by cooperating closelywith government agencies and outside corporations. Because this is a field with noprecedents to rely on, we have to learn many things by attempting and experiencing
them ourselves, and it is hard work to verify that our approaches are effective, but I
truly feel that we are taking on a big and important challenge. I will keep pushing
forward to create a transformation both in our bank and in society through our
initiatives to achieve decarbonization and GX.
*GX: Green transformation

Electricity

Renewable energy

Environmental
value
CertificatesJapan Electric Power
Exchange

The Hachijuni
Bank*Non-fossil-fuel energy certificates: Certificates used to trade the environmental value of non-fossil-fuel energy sources that do not use coal, oil, or other fossil fuels, such as renewable energy.

39• Capital
investment

Referral of customers wishingto purchase credits
Power fees

Hydropower
plants• Increase CO₂ absorption by forests by circulating funds into
forest management as a measure to address climate change• Strengthen our network with corporations and other entities
highly interested in forest preservation

Annual Report 2023

General Affairs Department
Assistant Manager

Yoshihide Kozu

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Sources of Value Creation

Value Creation Strategy

Special Feature 3

Value Creation Strategy

Corporate Data

Decarbonization Initiatives

Environmentally Friendly Financial Products and Services

Introducing PaperLab

We are working towards regional decarbonization together with our customers by providing financial
products and services that contribute to reducing CO₂ emissions.

In February 2017, we became the first financial
institution to introduce PaperLab (made by Seiko
Epson Corporation), the first paper machine in theworld that can make recycled paper without using
water, in order to promote the recycling andutilization of used paper within our bank.

FY2022
Product or service name

Environmental loans

Number of newcontracts, amounts, etc.

Contributed volume of
CO₂ emission reductions＊1(Unit: tCO₂)

103,115 million yen

721,805

1,466 million yen

516

Loans
Green car loans

Paperless reception system＊2

120,781

FY2022
Recycled
paper

406,003 sheets made(plain paper, A4 size)

CO₂ emission reductions
38,582＊３

848

E-Livre (accounts without passbooks)

12,839＊３

282－1.5 t CO₂

Services

5,613

Water saved

2,246 ㎡

Equivalent toof
1,318,222 bottles
water(500 ml)123－726,231t-CO₂
Example uses of environmental loans
Purchasing eco-friendly cars, trucks compliant with reduced emission standards, solar power systems, LED lighting, or energy
efficient air conditioning equipment; constructing green buildings (factories, apartments)*1: Calculated based on standards established by our bank
*2: General reception system that uses tablets for individual customer procedures such as opening new accounts or changing addresses*3: Net increase compared to previous fiscal year

25 trees

2,657

E-banking (computer services, business support
services, net e-banking for business, online banking)

Digital contract service for loans (introduced 2022)

Equivalent
to approx.

Hachijuni Forest Volunteer Activities
We began our Hachijuni Forest volunteer activities
in January 2009 in order to protect the beautiful
forests of Nagano Prefecture. Hachijuni Forest is
currently active in five locations in Nagano, and it
provides many employees with a valuable
opportunity to contribute to their regions throughenvironmental preservation activities.

Nagano City
Daizaho Ike
ForestMatsumoto City
Misuzuko
ForestIida City,
Odaira Pass
Kenmin Forest

Ueda City
Sugadaira
ForestShimosuwa
Town
Izumiko Forest

Protecting the Irreplaceable Nature of Nagano for Future Generations
I always enjoy participating in the Hachijuni Forest activities as a means of getting intouch with nature and contributing to the region in a way unique to our bank’s
employees. By participating every year, I can see the ecosystem gradually recovering.
Being able to feel a childlike sense of wonder at the natural world around me isanother appeal of the program.
The appeal of Nagano’s mountains lies in their majestic appearance, best represented
by the Japanese Alps, and in the vast natural beauty spread out below them, and I
believe that the abundant rivers and streams flowing down from those mountains are
an irreplaceable asset that supports the industry of Nagano. The Hachijuni Forest
activities are a different aspect to the usual work of our bank, and by participating inthem, I want to contribute to the sustainability of Nagano’s rich nature.

Amori Branch Manager

Junya Sonoda

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Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Five Themes of Our Medium-Term Management Vision 2021

Theme

1 Sustainability as the Core of Our Business

As the leading bank in Nagano Prefecture, we are working to resolve the social issues
facing the regions we serve using both financial and non-financial solutions,in order to support the sustainable development of our communities.

Wide Array of Solutions Only Possible with the Hachijuni Bank

Our Mindset and Goal
We recognize that working to resolve the issues facing our customers and regional communities isessential to the sustainable development of our bank. This mindset is based on our management
philosophy,“Contribute to regional development through a commitment to sound banking
principles,”and is the attitude most valued by our bank, having been passed down generation to
generation throughout the 92 years since our founding.
We will work to achieve sustainable regional communities as the leading bank in Nagano Prefecture
by keeping up to pace with the rapid changes in society.

In order to realize sustainable business development and sustainable regional communities as wellas the life plans of our individual customers, we are working to expand our range of solutions andservices to respond to any type of issue or need in cooperation with our group companies and over
two hundred corporate customers and business firms both in and outside of Nagano Prefecture.
We will use our unique strengths as a financial institution deeply rooted in the region to provide
solutions to support the sustainability of our customers and communities.

Value We ProvideLife planning• The Hachijuni Bank Group as a whole will actively engage in a wide range of efforts to resolve theissues facing our customers and regional communities and achieve a sustainable society.
• We will work to increase the corporate value of our bank through those efforts and sustainable
management.

Basic Strategies• Expand solutions to support the sustainability efforts of customers and regional communities• D evelop human resources that can provide ongoing support for the sustainability efforts ofcustomers and regional communities• Enhance sustainable management to resolve our bank’s material issues

Start-up
supportAsset
succession/
inheritanceLifestylesupport

Overseasbusiness

Our Wide Array of Solutions

Business
successions/
M&A

Management
reform support
DX/IT

Human
resources

Expandingsales channels

SDGs➡ Please see p.17 for information on our sustainable management system.

Committed Support for Identifying and Resolving Issues

Key Measures
Sustainable FinanceIn order to provide strong financing support to customers who are working towards sustainablebusiness development or sustainable regional communities, we offer a full range of sustainablefinance products that include both loan and investment options.
Based on our commitment to sound banking principles set out in our management philosophy andour high capital adequacy ratio, one of the highest among Japanese financial institutions, we will
provide the financing necessary for our customers to achieve sustainable development and take theirtechnologies into the future using our skill at determining creditworthiness and our discernment
honed over many years.
➡ Please see p.57 for information on sustainable finance products.

Sustainable Finance Targets
FY2021–FY2030(10 years)

Total of

1.5 trillion yen (including 1trillion yen in environmental field）

Total financing provided in FY2021 and FY2022: 410.9 billion yen(including 211.8 billion yen in environmental field)

We have a significant number of customers who also feel thenecessity of efforts to achieve SDGs or sustainability but do notknow where to begin.
To help those customers, we began offering an SDG support
service in February 2023.
By working closely with customers to examine measures to identify
and resolve the issues they face, we will support their sustainable
development while also contributing to the sustainable
development of our regional communities.

Number of new contracts for
SDG support service by month
331

170

182

March

April

103

FebruaryMay

Promoting Sustainable Management by Customers
I develop and promote new products and services with a focus on catching theinterest of customers who may not be familiar with the concept of sustainability.
Efforts for sustainable management and decarbonization vary depending on thesituation and growth stage of the customer. That makes it difficult to design products
and services that resonate with a wide range of people, but I take a lot of satisfaction
in seeing customers use and enjoy the products and services I developed.
I think that financial institutions like ours working to achieve our own sustainable
management also leads to promoting the sustainable management of our customers
in the region. I want to improve customer and employee awareness of sustainability
by designing services through which customers and branch staff can progress
together along the same trajectory.

Business Planning Department
Assistant Manager

Hisashi Sakuma

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Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Five Themes of Our Medium-Term Management Vision 2021

Theme

2

Strengthening the Lifestyle Support
Business

Our Mindset and Goal

services in addition to enhancing our financial services and expanding our non-face-to-face transaction
capabilities.

Expanding Quick, Convenient Services

Individual lifestyles are becoming more diverse due to a decreasing population and an aging society.
The needs and issues of individual customers also change over time, varying depending upon thecustomer’s life stage and family situation. We aim to be a bank that can support customers in all of
their lifestyle needs throughout their entire lives by enhancing our financial services and expanding
our non-financial services so that people across many generations can lead rich lives.

Value We Provide

We introduced the Wallet+ smartphone app in July 2022 as a service to provide
more day-to-day convenience to customers. In addition to financial informationsuch as account balances, the app also provides regional information, coupons,
and other useful non-financial information.
To improve convenience for customers, we have also made it possible to receive
unsecured loans*2 entirely through our website without needing to visit a branch. Moving forward,
we will further expand services that make it easier and more convenient for customers to save andinvest, such as by making it possible to open investment trust accounts entirely online.

・In order to remain a first-choice bank, we will endeavor to achieve the greatest benefit for eachcustomer*1 by putting customers first in our operations.
・We will develop systems to meet a wide range of customer needs and will endeavor to provide
products and services tailored to each customer.

*2: Car loans, credit card loans for education, remodeling and exterior loans, Hachijuni personal loans, “New Mighty” credit card loans*1: Meaning the achievement of each customer’s own unique goals based on their life stage and financial status.

Opening the Hachijuni Insurance Plaza to Support
Customer Life Plans

Basic Strategies
・Provide financial services that extend beyond existing frameworks in order to support customers inall of their lifestyle needs in a variety of areas
・Transform bank branches into places where customers can interact with bank staff instead of places
where they merely carry out transactions
・E nhance face-to-face consultation services for resolving issues that require a wide range ofknowledge or advanced expertise・Expand non-face-to-face channels for customers to perform transactions without visiting a branch inorder to increase convenience in daily life

Key Measures
Providing Peace of Mind in Daily Life through Hachijuni Lifestyle Support Services
Our lifestyle support services solve a wide range of problems related to housing and everyday life byreferring customers to professional, dependable partner businesses mainly located in Nagano
Prefecture for day-to-day issues such as housework services or home remodeling. Amid an aging
society and diversifying family structures, we will continue to steadily expand our services foreveryday needs with the goal of every person being able to enjoy peace of mind in day-to-day life.

Service Examples

Annual Report 2023

Remodeling,exterior work

Providing High-Quality Consulting

In August 2022, we opened the Hachijuni Insurance Plaza incooperation with PG Friendly Partners Co., Ltd. inside our
Showa Avenue Branch in Nagano City. It is the first insurance
consulting location in the country jointly operated by a bankand an insurance agency owned by an insurance company.
Our insurance experts provide support in choosing insurance
to fit each customer’s life plan based on their family
situation, major life events, and budget.

Opening the Hachijuni Inheritance Consultation Plaza
for Asset Succession and InheritanceIn order to meet the needs of our older customers for
managing and passing down their assets, we began offering
personal trust services in which our bank acts as the trustee,
and in December 2022, we opened the Hachijuni Inheritance
Consultation Plaza inside our head office sales department
as the first location in the prefecture that provides
consultation services on asset succession and inheritance.
We will help our customers pass down the valuable assetsthat they spent their lives building to the next generation.

Becoming a Lifelong Banking Partner

Pruning trees,
weeding lawns

Performing housework(cleaning, laundry, etc.)

ElderlysupportHouse cleaning(for AC units, bedding,
toilets, etc.)

Day to day

Housing45

We aim to become a lifelong banking partner to our customers by providing innovative non-financial

Checking up on
older customers

Buddhist altars andarticles, purchasing
cemetery plots

I began working on the lifestyle support business because when talking to customers,
I sometimes felt that it was difficult to achieve what they desired through existingbanking conventions.
I believe that our bank’s roles in the lifestyle support business are to protect theabundant lifestyles and assets of our customers, to advise them on growing andmaintaining their assets, to take precautions against dementia and other risks of long
life, and to meet a wide range of needs for managing assets and passing them down
to the next generation. I work with a focus on improving our systems in all areas byintroducing products, collaborating with experts, and cooperating with ourcommunities from both financial and non-financial perspectives in order to respond to
the aging population and diversifying family structures.
We are focusing our efforts on providing services that will help customers of manydifferent ages continue to lead rich lives in Nagano.

Business Planning Department(currently Takada Branch)

Nozomi Ozawa

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Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Five Themes of Our Medium-Term Management Vision 2021

Theme

3

Providing Comprehensive Financial
Services and Capabilities

Our Mindset and Goal
As changes in the structure of society are accelerating due to the COVID-19 pandemic as well as the
progress of digitalization and efforts for decarbonization, all corporations are required to makeadjustments to ensure their survival and growth.
Our bank must meet customer needs that are becoming more sophisticated and diversified, and wewill support the sustainable management of our customers by expanding our consulting services andincreasing the quality of the solutions we offer.

Value We Provide・W e will work closely with our customers to develop a shared understanding of the management
issues they face and provide a broad set of solutions tailored to each issue.
 e will make full use of the operational resources of The Hachijuni Bank Group to contribute to the・Wsustainable development of the regions and customers we serve.

Basic Strategies
・Strengthen systems to respond to increasing diversification and sophistication of needs and toprovide ongoing support to customers
・Actively support increased customer convenience and customer digitalization efforts
・Expand group capabilities to provide all-inclusive support for resolving issues faced by customers

Key Measures
Strengthening Group Capabilities
Hachijuni Staff Service
In August 2022, Hachijuni Staff Service obtained authorization as an advanced banking service
company, and it provides a wide range of services to address our customers’management issues
relating to human resources. In December 2022, Hachijuni Staff Service began initiatives for people
working multiple jobs, and it will continue offering a broad set of solutions.

Hachijuni Link Nagano Co., Ltd.
Established as a new subsidiary in October 2022,
Hachijuni Link Nagano Co., Ltd. will support thesustainable development of our communities
through the regional trade and electric powerbusiness areas, which banks are unable to operate in.
➡ Please see p.66 for details.

We aim to become a bank that can provide all-inclusive support for a wide range of needs relating tocorporate management by expanding our consulting services and group capabilities.

Expansion of Non-Face-to-Face Channels
In September 2022, we began using the Mikatano service series incooperation with Money Forward, Inc. to meet customer needs for
digitalizing operations. In addition to managing company balance
sheets and staff timecards, the service provides support in areas ofincreasing need such as compliance with the electronic record
retention law and the qualified invoice system.

Strengthening of Ongoing Support Systems
Strengthening Support Systems
for ASEAN Region

In February 2023, we opened ourSingapore Branch in order tostrengthen our customer support
systems in the ASEAN region. Fromthe heart of rapidly growing
Southeast Asia, we will provide awide range of support for theoverseas businesses of ourcustomers, from financing toconsultation on overseas expansion.

Strengthening Branch Support Systems

We increased the number of staff on our branch support
team in order to resolve customers’issues more quickly
and thoroughly. Our branches will work with the head
office to respond to a wide range of needs, including
business successions, M&A, utilizing subsidies, anddecarbonization support.
In particular, our track record of customers selected toreceive business restructuring subsidies from the Ministryof Economy, Trade and Industry, which we assist in aspart of our business strategy consulting, is among thebest in the country.

Business restructuring subsidy support results(1st to 8th selection rounds)
Customers selected

437

Selection rate

51.5%

Total amount granted(millions of yen)

4,439

Resolving Customers’ Issues
Our customers face a variety of management issues due to reasons such as changes
in society. I provide support to achieve resolutions to those issues by viewing themfrom the same perspective as the customer and approaching them from various
angles.
Sometimes, however, the issues I identify are different from those perceived by thecustomer, and it can be difficult to understand the unique characteristics of certain
industries. In those situations, I work to improve my knowledge by holding discussions
with the customer’s management team and learning from them.
I want to contribute to the further growth of our customers by establishing a systemthat can provide support to resolve not only financial issues by means such as
financing but also non-financial issues as well, such as SDG initiatives and designingpersonnel systems.

Business Promotion Department
Assistant Manager

Akiyuki Ushiyama

47

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Annual Report 2023

48

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Five Themes of Our Medium-Term Management Vision 2021

Theme

4

Digital Reforms to Operations andOrganizations

Our Mindset and Goal

We are working to create a new business model by utilizing digital technology and data to improve
operational efficiency and develop new services.

Digitalization of Services for Customers

In order to maintain our role as a financial intermediary in the region into the future, we are working
to improve the efficiency of our operations through digital reforms and to enhance our operations
and develop new services by utilizing data.
The development of AI technologies such as ChatGPT is advancing at a startling pace and may leadto great changes in operations and working styles. We are also improving our operational efficiency
through the use of data and AI and working to create new added value.

We are working to digitalize procedures and services by introducing a digital contract service forloans, creating a reservation system for visiting branches, and digitalizing the documents issued tocustomers when performing investment trust procedures. We will continue our efforts to promote
the use of digital services so that customers can enjoy convenience and peace of mind in using
those services whenever, wherever, and by whatever method they want, whether in person or
online.
Make your reservation
below (in Japanese).

Customers with reservations will be served first.

Value We Provide・W e will provide the optimal financial and non-financial services to each customer whenever,wherever, and by whatever method they want.
・W e will contribute to increasing customer productivity and creating new value through theutilization of digital technology, data, and AI.

Opening new
accounts

Changing customer
information

Inheritanceprocedures(including consultation)

Consultation on
investment*No reservation is needed for deposits, withdrawals, transfers, tax payments, changing large bills to smaller
denominations, or reissuing lost cards or passbooks.

Basic Strategies
・C reate new experience value and added value for customers through improved operational
efficiency and service development actively using digital technology, data, and AI
・Organization-wide digitalization of various procedures and operations and through working stylereforms using digital tools
・Active human resource development for all employees on digital technology, data, and AI
・Work to achieve open innovation combining financial and non-financial services through co-creation
with communities and outside corporations

Creating New Added Value Using Data and AI
We began offering Hachijuni Business Net Loans that use our data warehouse*1 and AI technology tomake it possible for customers to receive a loan without needing to visit a branch. That technology
is also proving to be effective in marketing, risk management (flagging suspicious transactions), andpredicting changes in customer business performance. We will continue working to improve
operational efficiency and create new added value through the use of data and AI.
Additionally, we have accepted trainees from the Judan-kai*2 who will learn about utilizing data andAI, and we are considering the possibility of expanded cooperation in the future.
*1: Our data warehouse (DWH) is an information system that centrally manages our large amount of transaction data spanning many years.
 he Judan-kai is a project for creating common core banking systems between the Yamagata Bank, the Tsukuba Bank, Musashino Bank, The*2: T
Hachijuni Bank, the Awa Bank, the Miyazaki Bank, and the Bank of the Ryukyus.

Accounting data
Distributed system data
External data

Annual Report 2023

Or:

Hachijuni Bank reservation

SearchDevelopment of Digital Environment and Working Style Reforms
We have made upgrades to our bank as a digital workplace by updating ourgroupware (Microsoft Office 365), introducing smartphones for employees,
and increasing the number of notebook computers. Moving forward, we will
make full use of the digital tools we have developed to reform working
styles so that each employee can focus on operations with a higher level ofadded value, thereby working to resolve the issues of our communities andcustomers.

Human Resource Development for Digital Technology and DX

Key Measures

49*Reservations can also be madeby phone or at a branch.

Consultation
on loans

AI modelDWH
Insourcing

We are working to implement human resource development for all
employees regarding digital technology, data, and AI. In addition to basic
training and individual specialized training for specific fields (digital/IT
planning, IT consulting support, etc.) through e-learning and correspondence
courses, we will continue our efforts for human resource development
through means such as creating special assignments for employees to workwith outside organizations in order to develop specialized skills.

Working to Achieve Open Innovation
Through my experience being loaned to a corporation jointly owned by companies
engaged in financial and non-financial businesses, I experienced the launch of a digitalfinancial service for individual customers.
That experience taught me that there are limits to what we can achieve in terms of
expanding our points of contact with customers and providing new services solely
through the banking business, because the expertise and sense of urgency needed forcommercializing modern services isn’t there.
In order for our bank to continue being a first choice for customers, I believe it isnecessary to work to create value using not only our existing knowledge from the financial
business, but also the expertise and approaches of non-financial businesses as well.
The Digital Transformation Department is currently working to create value by
combining financial and non-financial services.
We will aim to create services and businesses that customers will want to use, andwe will work to achieve open innovation without being restricted by the ordinary
roles of a regional bank.

Digital Transformation
Department

Hiroki Mimizuka

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Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Five Themes of Our Medium-Term Management Vision 2021

Theme

5

Personnel System Reforms to Support
Growth and Satisfaction

Our Mindset and Goal

As we aim to be an organization where each employee can experience growth and find job satisfaction,
we will continue to advance reforms to personnel systems and working styles in order to respond to thediversifying values and lifestyles of our employees.

FY2022 Training System Diagram

New employee training

Seisei Juku, Topic-oriented video training, certification support

Udemy (video learning)

e-JINZAI (video learning)

Flier (business book summaries)

Introductory corporate
affairs
Introductory retail
Sales fundamentals,
etc.

Globis Manabihodai (video learning)

Skills by field(introductory)

Your Learning

Sustainability

Annual Report 2023

Intermediate corporate
affairs
Intermediate retail
Business successions, M&A
IT consulting solution skills
Identity verification
procedures, etc.

Self-study

Correspondence courses, comprehension tests, etc.

51

Skills by field(intermediate)

DX/IT literacy improvement➡ Please see p.32 for information on the support we provide for earning government-recognized certifications.

Advanced corporate
affairs
Advanced retail, etc.

Assessments, correspondence courses, etc. for all employees

In conjunction with introducing the multiple-track career development system, we are expanding ourtraining on career development and skill improvement support.
In order to encourage employees to develop specialist knowledge and skills, we provide outside training
and support for earning government-recognized certifications, in addition to which we have newly
created study groups for earning grade 1 financial planner and small and medium business consultant
certifications to promote an environment where employees encourage each other and learn together.

Skills by field(advanced)

Diversity management, support for returning to work, etc.

Support for Improving Skills

Sustainability, etc.

Diversity

We introduced a multiple-track career development system in July 2022 in order to develop humanresources with high added value who can respond to changes in the environment surrounding ourbank and meet customers’expectations. These efforts link with our aim to become a bank thatprovides comprehensive financial services, Theme 3 of the Medium-Term Management Vision 2021.
Unlike the previous human resource development
system (a single-track system) based on increasing
employee skills as generalists with a focus on
management abilities, the goal of the multiple-track
Head
Management
Professional
career development system is to use each employee’soffice staff
track
track
strengths and aptitude to support diverse career
track
development. We are encouraging that careerdevelopment by offering five career tracks: the existingStandard track/Office work
management track, as well as the new professionaland branch support track
track, head office staff track, standard track, and theoffice work and branch support track.

Basicmanagement
skills

Logical thinking, etc.

Multiple-track Career Development System

New section
managers

Business skill training

Key Measures

Standard

・Develop a diverse set of career tracks in order to increase employee expertise to respond to
customer needs and changes in the external environment
・Support self-fulfillment based on each employee’s aptitude and values to create an environment
where employees can put their skills to maximum use
・Fairly and appropriately evaluate each employee’s work in their role regardless of seniority andassign qualified personnel to suitable positions

Managersby fieldSpecific expertise and fields

Coaching skills, etc.

➡ Please see pp.29–36 for details on our human resources strategies.

New
management
Career management training

Basic Strategies

Management

・We will provide comprehensive financial services with high added value that contribute to ourcustomers and regional communities by developing human resources that can respond toincreasingly sophisticated and diverse customer needs and to changes in the external environment.
・Through all of our employees accepting each other’s diverse characteristics and helping each othergrow, we will create new ideas and value by increasing employee satisfaction and desire to grow.

New branchmanagers
Professional

Value We Provide

Career management

Management skill training

We are working to reform our personnel systems in order to respond to the diversifying values andlifestyles of our employees and to change the way we serve customers by focusing on relationships
through consultation and providing solutions to customers. We will strive to increase our corporate
value and human capital value by supporting each employee in putting their skills to use throughreforms to personnel systems and working styles.

Working Style Reforms: A New Dress CodeAs we believe that developing an environment where employees can make the best use of theirskills leads to improved service for customers, we are working to make reforms to working styles,
including by creating systems for working from home and allowing employees to work multiple jobs
within the bank.
As part of our working style reforms, we established a new dress code beginning in November 2022.
In addition to wearing business suits or uniforms as before, the new dress code also permits
employees to wear business casual or office casual attire, including wearing no necktie throughout
the year, in order to increase the autonomy and diversity of our employees. We will continue
promoting the further improvement of customer service by working to create a more active
organization.

We Created “Your Learning” to Develop a Diverse Learning Environment
We began the“Your Learning”self-study video training program (see p.32) because
we wanted to provide all employees with the opportunity to learn whenever andwherever they want.
A wide range of people from new employees to branch managers are taking courses
through this program, and I feel that a habit of self-motivated learning is taking hold atour bank as we receive a lot of positive feedback from participants, stating that they
can study in ways that fit their lifestyles and that studying has become a habit forthem.
I have also gained a broad range of knowledge from studying through Your Learning
myself. The information and knowledge I have learned has also been very useful in
preparing the curriculum for new employee training that I am responsible for. I feelvery motivated in my work when new employees tell me that they are enjoying theirjobs because the things they learned in training are helping them in practice.

Human Resources
Department

Akiko Okubo

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52

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Initiatives for TCFD Recommendations
We endorsed the TCFD recommendations in March 2020, and we have been working to provide
disclosure in accordance with the recommendations since 2021. We will fulfill our social
responsibility to support responses to climate change and the transition to a decarbonized society
and will strive to expand our information disclosure based on the TCFD recommendations.

Governance
We have several internal organizations working towards sustainable management by discussing anddeciding matters regarding climate-related risks and opportunities and how to respond to them.
➡ Please see p.17 for details on these organizations.

Sustainability Committee

Sustainability Working
Group・Enhancement of climate-related risk management based on TCFD recommendations
・Enrichment of sustainability disclosure

・Decarbonization measures of our bank and customers

Taking into account the transition risks and opportunities of each sector and the outstandingbalance of loans we have made to customers in those sectors, we have selected energy andtransportation (including automobiles and land transportation (vehicle transportation)) as key sectors
as we did in FY2021.

Selection Process
1

Performed mapping of TCFD high risk sectors and our bank’s industry types

2

Qualitatively evaluated the transition risks and opportunities of TCFD high risk sectors

3

Selected sectors based on comprehensive judgment taking into account the above evaluation

Results of Evaluation of Transition Risks and Opportunities

EnergyWe will identify and conduct appropriate risk management for climate-related risks andopportunities and the impact they will have on business activities, in addition to which we areworking to provide financial products and services that will contribute to mitigating and adapting toclimate change.

Risks
The climate-related risks we have identified include transition risks and physical risks.
Transition risks

Physical risks

Possibility that credit risk will increase for customers whowill be impacted by strengthened policy measures related toclimate change in the process of transitioning to a
decarbonized society

Possibility that credit risk will increase due to natural
disasters caused by climate change leading to customers’
businesses being temporarily interrupted, resulting inworsened business results or damage to security value

Opportunities
We anticipate include an increase in business opportunities, such as financing for renewable energy
businesses and providing consulting to support customer transitions to a decarbonized society. We
also see opportunity through self-improvement by taking appropriate initiatives and providing proper
disclosure as a corporation.
Annual Report 2023

・1.5°
C scenario: A scenario in which the global average temperature in 2100 is kept to less than 1.5°
C above preindustrial levels through measures to reduce climate change.
C scenario: A scenario in which carbon dioxide emissions due to dependence on fossil fuels continue as before.
・4°・Status of sustainable finance efforts
・Our bank’s decarbonization roadmap
・Systems to support customer sustainability and decarbonization efforts
・Participation in external initiatives

Strategies

53

We recognize that while a wide range of industries will be impacted by climate change, the specificimpacts and the extent and timing thereof will vary by industry. We have therefore selected key
sectors based on risks and opportunities relating to industries considered to be susceptible to theeffects of climate change and have conducted a scenario analysis based on 1.5°
C and 4°
C scenarios.

Selecting Key Sectors

Major Matters Relating to Climate Change Addressed by Each Organization

Sustainability Council

Scenario Analysis

Transportation

Materials andbuildings

SectorTransition risk
score

Opportunity
score

Oil and gas

８

２

Coal

９

１

Electric power

８３

Automobiles

６3

Land/sea/air transportation

６

2

Metals and mining

４

２

Chemicals

５２

Building materials and capital
goods

５

２

Real estate management anddevelopment

３

２

５

２

Transition risks
High

7～9

Medium

４～６

Low

１～３

Opportunities
High

3

Medium２

Low

１

Agriculture
Agriculture,
food, and
forest products

Beverages, processed foods,
and meat
Paper and forest products

Ratio of Our Loans by Carbon-related Asset Type Based on the Definition in the TCFD
Recommendations to Our Total Loans
EnergyTransportation

Materials and buildings

Agriculture, food,and forest products

1.75％

3.71％

18.85％

2.86％

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Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Initiatives for TCFD Recommendations

Scenarios by Key Sector

Category

In FY2021, we analyzed the effect that the introduction of a carbon tax would have on our borrowers
and calculated the level of impact on our bank’s finances. For FY2022, we have worked to increase
the detail of our scenario analysis as follows.

・Changed the 2°
C scenario to a 1.5°
C scenario

Assessment byinvestors

Reputation

・For the automobile sector, calculated a financial forecast for each borrower based on scenarios including theeffects of carbon taxes and electric vehicle usage rates, taking into account the results of a qualitative analysis*

Assessment bycustomers

Assessment bylenders・ For other sectors, conducted a scenario analysis including the effects of carbon taxes, capital investment, andchanges in sales mix for representative corporations in each sector and used the results to calculate a financial
forecast for each borrower*Due to the large number of affected borrowers and the level of impact on the industry of Nagano Prefecture, we worked to make our analysis of the automobile
sector even more detailed than our analysis of other sectors.

Item

Category

Description

Risk oropportunity

Importance

Carbon costs

・D ue to the introduction of a carbon tax,
companies will be required to pay taxes forgreenhouse gas emissions resulting from theirbusiness activities.
・A dditional capital investment costs will beneeded to reduce the carbon used in
manufacturing processes.

Risk

High

Regulation

Fuel restrictions

・D ue to the introduction of fuel restrictions,
automobile makers will stop producing gas anddiesel vehicles, and demand for parts for thosevehicles will decline.

Increase in use ofelectric vehicles

・D emand for electric vehicles will rise due toincreased environmental consciousness among
consumers, decreases in battery technology
prices, greater availability of charging stations,and stricter regulations. By making an earlytransition to electric vehicles as the business’smain products, potential declines in sales can belimited and market competitiveness can be
maintained, but additional capital investment
will be necessary.
・If entering the new market late, sales of existingproducts will decline, and market
competitiveness will be damaged.

Technology andmarkets

55

Annual Report 2023

Scenario

Item

Analyzed sectors
Indicator
Analysis results
Physical risks

Risk

Risk andopportunity

MediumHigh・A late transition to low carbon, environmentallyconscious business activities will result in apoorer assessment by investors and increased
financing costs.
・A late transition to low carbon, environmentallyconscious business activities will result in apoorer assessment by trading partners(automobile makers), and profits will decrease
due to being excluded from the supply chain.
・A late transition to low carbon, environmentallyconscious business activities will preclude theuse of green finance and force businesses toengage in financing under unfavorable terms.

Risk oropportunity

Importance

Risk andopportunity

Risk andopportunity

Risk andopportunity

Low

Low

Low

Analysis Results
Transition risks

Main Transition Risks and Opportunities in the Automobile Sector

Description

Scenario

Details
1.5°
C scenario (referred to the IEA’s Net-Zero Emissions by 2050 scenario and the NGFS’s
Net Zero 2050 scenario)
Energy, automobiles, land transportation (vehicle transportation)
Credit-related costs
Total increase in credit-related costs of up to approximately 25 billion yen by 2050
Details4°
C scenario (referred to the IPCC’s RCP 8.5 scenario)

Analyzed regions

All of Nagano Prefecture

Analyzed customers

Business loan borrowers

Indicators

Analysis results

Credit-related costs
Worsened business results, damage to security value, etc. due to temporary interruption ofcustomers’businesses
Total increase in credit-related costs of up to approximately 3 billion yen by 2050

Issues to Be Addressed Moving Forward

Increase in raw
material prices forelectric vehicles

・Due to increased demand for electric vehicles,
the prices of minerals used as raw materials(nickel, cobalt, lithium, etc.) will rise, andmanufacturing costs for electric vehicles will
increase.

Risk

MediumIncrease inelectricity prices

・O p e r a t i n g c o s t s a n d e x p e n s e s i n t h e
manufacturing process will increase due to arise in electricity prices.

Risk

Low

Based on the analysis results, although the impact of both transition risks and physical risks on creditrelated costs appears to be limited, we do not believe that this analysis necessarily considers all of therisks faced by our bank as we only analyzed certain sectors and regions and made various
assumptions when establishing scenarios.
We believe that it is necessary to continue working to achieve business growth strategies after
appropriately evaluating the risks to and opportunities for the business activities of our customers
created by climate change. Using the results of our scenario analysis, we will continue supporting ourcustomers in increasing their resilience to climate change.
Annual Report 2023

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Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Initiatives for TCFD Recommendations
Solutions for Climate Change Responses
Products and services

Features２．
Policy on measures for specific sectors with a high probability of negatively impacting the environment or society

We will work to reduce and avoid impacts on the environment and society by appropriately handling investment and lending in these
sectors as follows.

Sustainability Link Loans

Loan conditions such as interest rates vary based on the achievement status of ambitious
sustainability targets that conform to international principles.

Hachijuni Sustainability Fund No. 1

This fund provides capital support to renewable energy businesses and decarbonization
efforts as well as to companies working to create new businesses and technologies andcompanies facing business succession issues.

・Businesses involved in human rights violations or forced labor

SDG LoansInterest rates vary based on the achievement status of SDG-related targets established by
the customer.

・Businesses related to manufacture of cluster bombs

Positive Impact FinanceOur bank and the Nagano Economic Research Institute, an organization belonging to ourgroup, analyze customer impacts on the environment, society, and the economy andsupport the increase or reduction of identified impacts.

CO₂ Emission Visualization Service

Customers register invoice data and other information to automatically calculate CO₂
emissions and make those emissions visible on the cloud.

SDG Initiative Support Service

We confirm the initiatives being taken by customers to achieve SDGs, identify theimportant issues to be addressed, and support the creation of“SDGs Declaration”
documents.

J-Credit Referral Service

Please see p.65.

Risk Management
As we recognize that increases in abnormal weather and natural disasters and delays in responding
to climate change have a significant impact on business, we have performed a scenario analysis ofclimate-related risks and are responding to them through our framework for managing credit andother risks.
The Hachijuni Bank Group Sustainable Investment and Lending Policy sets out our policy of actively
providing investment and loans to businesses that have a positive impact on the environment,
society, and the economy. For investment and lending in specific sectors with a high probability ofnegatively impacting the environment or society, we are working to reduce and avoid those impacts
by appropriately handling such investment and lending based on this policy. Since the establishmentof this policy, we have not provided any investment or lending for new coal-fired power plants.

The Hachijuni Bank Group Sustainable Investment and Lending Policy
Environmental and social issues such as climate change, declining regional vitality due to a low birthrate, aging society, anddeclining population, and increasing business closures due to a lack of successors are becoming threats to thesustainability of our communities.
The Hachijuni Bank Group has worked to achieve sustainable communities under our management philosophy ofcontributing to regional development through a commitment to sound banking principles, but in order to advance these
efforts more vigorously, we have established this policy and will promote investment and lending based on it.

・Coal-fired power businesses
We will not provide investment or lending for new coal-fired power plants.
We will not provide investment or lending to businesses engaged in human rights violations such as child labor or forced labor in
violation of international human rights standards.*2
Given the inhumane nature of cluster bombs, we will not provide investment or lending to any corporation engaged in their
manufacture, regardless of the intended use of those funds.
・Palm oil plantation development businesses and logging businesses
We recognize that while palm oil, lumber, and paper pulp are important resources that are essential to maintaining society and our
day-to-day lives, social issues such as illegal harvesting may occur. We will carefully handle investment and lending in regard to thesebusinesses by giving due consideration to a variety of factors such as the preservation of forest resources.
*2: Including standards such as the Universal Declaration of Human Rights and the Guiding Principles on Business and Human Rights

Indicators and Targets
Sustainable Finance Targets and Results
We have set a target of providing a total of 1.5 trillion yen (including 1 trillion yen in theenvironmental field) of sustainable finance for the ten-year period from FY2021 to FY2030 in order
to contribute to resolving environmental and social issues and achieving a sustainable society. The
total amount of sustainable finance we have provided up through FY2022 is 410.9 billion yen(including 211.8 billion yen in the environmental field).
➡ Please see p.43 for details.

Greenhouse Gas Emission Reduction Targets and Results
We have set targets for reducing our scope 1 and scope 2 greenhouse gas emissions to net zero in
FY2023 and by 60% compared to FY2013 levels in FY2030.
In FY2022, our initiatives to reduce emissions included introducing carbon-free energy and electric
air conditioning at all three of our head office buildings and converting three branches to net zeroenergy buildings.
We will continue working to further reduce our greenhouse gas emissions.

Greenhouse Gas Emissions
Scope 1

Scope 2

14,6333,004

We will actively provide investment and lending to businesses and initiatives such as the following.
・Energy-saving and renewable energy businesses that reduce climate change risks

11,629・Measures for companies to transition to a decarbonized society

2,484
6,326

・Business start-ups, innovations, and business successions that contribute to the sustainable development of the regional economy（Unit: tons CO2）

Net zero achieved（39.7% reduction
compared to FY2013）

8,810

１．
Policy on measures for businesses that positively impact the environment, society, and the economy（１）
Businesses we will actively support

FY2022（44.9% reduction
compared to FY2013）

8,060
2,379
5,681

（60% reduction
compared to FY2013）

・Enhancing medical care, welfare, and education to respond to issues such as the aging society and low birthrate
・Businesses with a positive impact on creating a sustainable society

Oﬀsets, etc.

（２）Medium to long-term sustainable finance*1 target
We aim to provide a total of 1.5 trillion yen (including 1 trillion yen in the environmental field) in sustainable finance (investment and-8,060lending that contributes to achieving sustainable regional communities) by FY2030.
*1: Investment and lending for purposes such as environment, medical care, welfare, education, business start-ups, and business successions.

FY2013

FY2021

FY2022

FY2030➡ Please see p.86 for details.

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Value Creation Strategy

Corporate Data

Initiatives for TCFD Recommendations
Notes Regarding Calculation

Calculation of 15 Categories of Scope 3 Emissions
As greenhouse gas emissions indirectly caused by investment and lending account for a large portionof a financial institution’s scope 3 emissions (CO₂ emissions in the supply chain), beginning in fiscal
year 2021, we have calculated our scope 3 emissions based on the measurement methods set out
in the PCAF Standard. For fiscal year 2022, the scope 3 emissions of certain individual companies
were calculated using a bottom-up analysis.
➡ Please see p.70 for details of PCAF.

Emissions by Industry Type Calculated by Classifying Our Borrowers into 14 Industry Types
Set Out by the TCFD (FY2022)
Industry type

Emissions

Industry type

EnergyTransportation

Materials and buildings

Oil and gas

400,253

Electric power

138,490

Automobiles

345,029

Land transportation

242,837

Sea transportation

80,544

Air transportation

12,206

Metals and mining

1,300,880

Chemicals

563,668

Building materials and capital goods

2,059,354

Real estate management and development

67,183

Agriculture

114,295

Beverages, processed foods, and meat559,193

Paper and forest products

173,451

Other

High

Level

Emission calculation method

Score 1

1a

Emission data of the company certified by a third party

1b

Uncertified emission data of the company

2a

Estimates based on the company’s energy consumption amount andemission factor
Related process emissions also added

2b

Estimates based on the company’s manufacturing volume and emission
factor3a

Estimates using the company’s net sales and the sector’s emission factor
per unit of net sales

3b

Estimates using the company’s investment and loan balance and thesector’s emission factor per unit of assets

3c

Estimates using the company’s investment and loan balance, thesector’s carbon intensity per unit of net sales, and the sector’s asset
turnover ratio

Emissions reported by
the company

Score 2Emissions frombusiness activities
Score 38,656,029

Emission Ratios of Major Customers,
Large Customers, and Other Customers

Electric power
Oil and gas

Major
Customers

45%

Chemicals

9%

Emissions from
economic activities

Score 5Low

Future Policy for Supporting Decarbonization by Customers
Paper and
forest products

Emission Calculation Methods

Automobiles
Land transportation
Sea and airtransportation
Metals and mining

46%

Large Customers

Score 4

Breakdown of Major and Large Customer
Emissions by Industry Type

Other

Other
Customers

Beverages, processed
foods, and meat

Building materials
and capital goods

Agriculture
Real estate managementand development

Top-down analysis: Emissions calculated using average emission factor for the sector
Bottom-up analysis: Emissions calculated based on actual business conditions as identified using information
disclosed by each company (such as emission volumes and energy usage amounts)

Reference Date
Loan balances: March 31, 2023
Net sales and other financial indicators of borrowers: Most recent financial information of each borrower that
we held as of March 31, 2023, when the calculation was performed

Annual Report 2023

The Partnership for Carbon Accounting Financials (PCAF), which we joined in March 2023, hasestablished the data quality scores shown below in order to evaluate the quality of emission
estimates. The weighted average data quality score for the information used in our calculation ofemissions for fiscal year 2022 was approximately 3.3, and we will continue working to improve ourdata quality.

2,598,305
Total

59

Data Quality Score

Reliability

Agriculture, food, and forest products（Unit: tons CO₂）

The 15 categories of scope 3 emissions include greenhouse gas emissions by all companies to which a bankprovides investment or lending, but at present, we have only calculated our scope 3 emissions based on thescope 1 and 2 emissions arising from lending to business corporations in Japan. We plan to steadily expand
the scope of our calculations moving forward.
The emission factors we used were those set out in version 3.3 of the“Emission Intensity Database for
Calculating an Organization’s Greenhouse Gas Emissions through the Supply Chain”(released by the Ministryof the Environment in March 2023).
Our calculation methods may change in the future as international standards are further developed.

Many of our customers are small and medium businesses who face a number of issues such as a lack ofhuman resources for implementing initiatives to respond to climate change or transitioning to a decarbonizedsociety.
We will work to achieve sustainability and increased corporate value of our customers through dialogue aswell as by supporting the evaluation of impacts on customers’businesses, and through the establishment ofspecific targets and improvement measures to reduce their greenhouse gas emissions.

Roadmap
FY2021

FY2022Net zero greenhouse gas emissions
by our bank

FY2023

FY2024FY2025

FY2030Net zero (achieved)

Decarbonization through finance
155.4 billion yen 255.5 billion yen
Sustainable finance (amount inenvironmental field shown in parentheses) （83 billion yen）（128.8 billion yen）

1.5 trillion yen total（1 trillion yen）

Annual Report 2023

60

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Environmental Preservation Initiatives
History of Our Environmental Preservation Activities

As Nagano Prefecture, where we are based, boasts an abundant naturalenvironment, we are working to address environmental issues in order to growtogether with our communities while being mindful of the environment andcoexisting with nature.

Policies
Management Philosophy

Contribute to regional development through a commitment
to sound banking principles.
The Hachijuni Bank Group SDGs Declaration
and Key Themes (in Japanese)

The Hachijuni Bank Group
Environmental Policy(in Japanese)

The Hachijuni Bank Group
Sustainable Investment
and Lending Policy(in Japanese)

The Hachijuni Bank Group
Basic Approach to
Preserving Biodiversity(in Japanese)

In order to systematically examine our policies
on bank-wide initiatives to addressenvironmental issues, we have created aframework to promote environmental
management systems with the President in aleading role and are advancing ourenvironmental initiatives.

First Japanese financial institution

November 1992:

Began using recycled paper for CD/ATM paper logs

First Japanese regional bankMarch 1999:

Obtained ISO 14001 certification for our head office building

First in Japanese banking industry

July 2005:

Introduced environmental accounting (for FY2004) andannounced environmental accounting information

First in Japanese banking industry

December 2005:

Awarded by Minister of the Environment for activities toprevent global warming in FY2005

January 2009:

Began Hachijuni Forest volunteer activities

First Japanese financial institution

February 2017:

Conducted chemical recycling to reuse uniforms

First Japanese financial institution

February 2017:

Introduced PaperLab

July 2017:

Acquired naming rights for Forest Learning Center in
Togakushi Forest Botanical Gardens

August 2018:

Received certification as an“Eco-First Corporation”by the
Ministry of the Environment

March 2020:

Endorsed the Task Force on Climate-Related Financial
Disclosures (TCFD) recommendations

June 2020:

Began purchasing carbon-free energy produced in Nagano
for six branches in the prefecture

May 2021:

Began activities to preserve terraced rice fields

February 2023:

Began purchasing carbon-free energy produced in Nagano
for all three buildings of our head officeSecond in Japanese banking
industry

Lead manager (President)
Environmental management officer(director in charge of general affairs)
Department andbranch managers(including Hachijuni groupcompanies)
Sustainability
supervisors

Three Pillars of Environmental Preservation
We are working to preserve the environment with the following activities as the three pillars of ourefforts.

Helping customers improvethe environment by offering
environmentally friendly
financial products

Created a complete system for collecting, recycling, andusing waste paper

Environmental management systempromotion framework

General Affairs
Department/Group(environmental
management secretary)

1

November 1991:

First financial institution in
Nagano Prefecture

Framework

Environmental
preservation
activities throughmain banking
operationsFirst in Japanese banking industry

2

Activities toreduce ourburden on theenvironment

Working to save energy andresources to reduce ourenvironmental impact andlimit costs

3(In FY2023, we plan to increase the ratio of renewableenergy used by our entire bank from 5% to 50%.)First in Japanese banking industry(according to our research)

June 2023:

Achieved net zero greenhouse gas (CO₂) emissions in
FY2022 (for scope 1 and 2 emissions)

Terraced Rice Field Preservation Activities
Nagano Prefecture has many terraced rice fields that not only form part of our traditions and culture
but also create beautiful scenery, and in“Terraced Rice Field Heritage Sites for the Future”(announced by the Ministry of Agriculture, Forestry and Fisheries in February 2022), Nagano had thethird highest number of recognized sites in the country. In order to contribute to preserving theseterraced rice fields, our employees and their families are helping with rice farming at Obasute in
Chikuma City and Inagura in Ueda City.

Expandingregional
contributions andenvironmental
education

Working to contribute to theregion through means suchas environmental volunteer
activities➡ Please see pp.37–42 for details of our activities.

61

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Annual Report 2023

62

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

Promoting Community-Oriented Finance
Under our management philosophy of contributing to regional development through a commitment
to sound banking principles, our bank’s goal is to contribute to the development of our communities
by constantly anticipating changes in the external environment and providing high-quality services toour customers.

Support Structure
Our branches and head office cooperate and utilize our vast network of group companies, outside experts,
and external agencies to resolve the management issues facing our customers.

Basic Policy

Small and medium business customers
Hachijuni Policy on
Efforts to Facilitate
Financing (in Japanese)

Main Efforts (FY2022)
Utilizing Our Consulting Abilities Based on the Development Stage of Our Corporate Customers
The Hachijuni Bank Group as a whole provides comprehensive financial services to support businesses thatwill create vitality in the region.
By utilizing our versatile consulting abilities that make use of our vast network, which includes external
specialist agencies and our overseas branches, we provide optimal solutions to suit the development stageof the customer, from their incorporation until they pass the torch to the next generation.

Stage

Start-up/incorporation

Growth● Analyze present state of business and ﬁnances anddevelop improvement strategies

Branches● Correctly identify business activities and growthpotential (business feasibility evaluations)● Support formulation and implementation ofmanagement reform plans

Head oﬃce(departments involved
in revitalization support)● Support management reforms

and business revitalization
through on-site visits● Refer customers to outside experts

Head oﬃce(departments involvedin sales support)● Business referrals● Support for expansion overseas

or into growth sectors● Business succession consulting

Reports and discussions

Finance Facilitation Management Department (Manager: Director)

Reports and discussions

Instructions

Board of directors, etc.

Management reforms andbusiness revitalization support

Business succession and M&A

Business referrals provided

Seminars held to support
global expansion

Businesses given management
reform support

Businesses given support for business succession,
M&A, or changing/discontinuing businessAt the 11th Nagano Venture
Summit, we worked to create more
opportunities to start businesses in
Nagano Prefecture through pitches
by entrepreneurs on certain themes
and mentoring by experts.

We supported customers in
expanding into new businesses,
increasing their sales channels, andstreamlining their management byhelping them apply for subsidies,
providing a variety of businessreferrals, and using seminars andbusiness fairs.

Using our overseas branches andnetwork, which are among the bestof all regional banks in Japan, we
supported the overseas businessesof our customers by providing
advice on trade practices andconsultation on exchange risk
hedging and overseas expansion.

We actively support the formulation and implementation ofmanagement reform plans for customers facing issues such as
declining profits during and after the pandemic andresponding to increased raw material prices and other costs.
We are also focusing on strengthening our consulting abilities
and providing solutions that contribute to management reform
support and business growth.

Our expert support team provides all-inclusive guidance tohelp customers resolve the issues they face in order to meet
sharply increasing needs relating to M&A and businesssuccessions. Specifically, smoothly transferring a company’sshares to a successor or strategically choosing and focusing
on business domains.

624

5

258

Main efforts

Businesses who improved their credit risk category (D)Businesses given management reform support (A)Initiatives on Loan Guaranties by Chief Executives
In order to support our customers in easily obtaining flexible financing
by further expanding our loans that do not rely on a company’s chief
executive acting as guarantor, we announced our“Policy on Loan
Guaranties by Chief Executives”on March 20, 2023. We began handlingthese guaranties in accordance with this policy from April 2023.

244
6.5%
17

258

Analyze current state, identify issues
Consider and formulate plans

Results

The Hachijuni Bank Policy
on Loan Guaranties by
Chief Executives(in Japanese)

Experts

H1 2021

M&A
counterparty
External partners

Credit risk category improvement ratio (D/A)

114

Customers

Provide advice

Businesses given support for formulating/implementing revitalization plans (B)46.7%

M&A needs
Request advice

Businesses that formulated revitalization plans (C)Customers

M&A advisory services

Provide advice

Revitalization plan formulation ratio (C/B)

258

244

Business succession needs
Request advice

Businesses given support for formulating/implementing revitalization plans (B)391

Business succession consulting

Management reform support achievements
Businesses given management reform support (A)Annual Report 2023

Instructions

・Tax accountants and tax accountant
associations
・Small and medium business consultants・Business advisors, chambers of commerce
and industry, related associations
・Attorneys and certiﬁed public accountants・Management consultants・Nagano Economic Research Instituteadvisors
・Public agencies and support programs
・Nagano Prefecture BusinessSuccession Support Center・Small and medium businessvitalization councils
・Certiﬁed management reform
support agencies
・Regional Economy Vitalization
Corporation of Japan・Business revitalization funds
・Business succession funds
・Business succession ADR agencies

Businesses supported

165

63

Coordination
Cooperation

Our efforts to promote community-oriented finance are made public in press releases and on our website aswell as through disclosure documents and investor briefings.

Oﬀer optimal solutions

Outside experts and agencies

Coordination
Cooperation

Actively Providing Information to the Region and Our Customers

Consult on management issues

The Hachijuni Bank Group companies

We have established the“Hachijuni Policy on Efforts to Facilitate
Financing”under which we meet our customers’financing needs andaccommodate requests such as for changes to loan conditions. We
will promote community-oriented finance by working to achieve our
Medium-term Management Vision 2021.

and experts
Searching for counterparties, making proposals Searching, proposals
Determining M&A terms, providing negotiation advice

H2 2021

H1 2022

H2 2022

Number of new loans provided with no chief executive guaranty (ratio of all new loans) 3,714（40.0％）3,494（37.0％）3,569（40.2％）3,410（36.3％）
Number/ratio of loans not requiring guaranty by either previous or new chief executive upon business succession

3/0.7％

0/0％

0/0％

0/0％

Number/ratio of loans requiring guaranty upon business succession (by new chief executive only)

216/53.7％

133/54.5％

148/56.3％

242/63.4％

Number/ratio of loans requiring guaranty upon business succession (by previous chief executive only)

170/42.3％

110/45.0％

114/43.3％

140/36.6％

Number/ratio of loans requiring guaranties upon business succession (by both previous and new chief executives)

13/3.3％

1/0.5％

1/0.4％

0/0％

Annual Report 2023

64

Sources of Value Creation

Value Creation Strategy

Initiatives to Achieve Sustainable
Regional Communities
Our business is based in Nagano Prefecture, which offers attractive natural scenery, lifestyles,
tourism, industries, and agricultural goods.
We believe that protecting and evolving these charms together with our communities to promote
the sustainable development of the region is the only path that also leads to the sustainable
development and increased corporate value of our bank.
The Hachijuni Bank Group as a whole will work to achieve sustainable regional communities.

Resolving the Issues of Regional Communities
Cooperation with the National and Local Governments
We believe that in order to solve problems on large scales such as throughout our regional
communities, it is essential to cooperate with the many people who share our goals.
We are working to resolve the issues faced by our communities by cooperating closely with thenational government and multiple local governments both in and outside of Nagano Prefecture.

Main Achievements in FY2022
April

Chosen as a business indirectly supporting the Japanese Government Cabinet Office’s
pioneering human resources matching program

October

Invested in the Japan Green Investment Corp. for Carbon Neutrality established by theJapanese government

OctoberEndorsed the“Green Transformation League Basic Concept”set out by the Ministry of
Economy, Trade and Industry

October

Participated in the“Public-Private Partnership Platform for a New National Movement”by the
Ministry of Economy, Trade and Industry

NovemberSigned a“Partnership Agreement for Achieving Sustainable Development”with Komoro City

DecemberSigned a“Five-Party Comprehensive Partnership Agreement for Tourism Development”with
Tatsuno Town

January

Signed a“Partnership Agreement for Promoting Sustainable Finance”with Tokyo government

J-Credits
In April 2023, we began referring customers to the J-Credits created by the Nagano Public
Corporation of Forestry.
➡ Please see p.40 for information on the J-Credit scheme.

Customers who wish to support environmental preservation activities purchase J-Credits, and those
proceeds are then used for further activities, so we consider there to be significant value in referring
customers to the J-Credit scheme particularly for our bank, as Nagano Prefecture and its abundantnatural environment are a key part of our business and we have worked to preserve its environment
for many years. We plan to begin offering referrals to other J-Credits in the future. Moving forward,
we will create a business model through which we can endeavor to preserve the environment
together with our customers.

We will expand cooperation to achieve decarbonization as a bridge
joining the industrial, academic, government, and financial sectors.
Decarbonization draws a particularly high level of interest, and it is a new field where
we cannot rely on precedents. As we provide support for resolutions to social issues
being addressed by local governments, we are working with a resolute attitude sothat we do not allow failures to discourage our overall efforts. I feel that cooperatingwith a variety of external specialist agencies to effectively and actively contribute toresolving these issues is a very valuable experience.
I believe that in order to make progress in decarbonization, a key point will be how
closely we can achieve cooperation among the industrial, academic, government, andfinancial sectors, so I want to dynamically expand the scope of that cooperation sothat we as a financial institution can serve as a bridge that connects them.

Annual Report 2023

Corporate Data

Establishment of Hachijuni Link Nagano Co., Ltd.
In October 2022, we establishedHachijuni Link Nagano Co., Ltd. as
an advanced banking service
company engaged in non-banking
industries* entirely owned by ourbank. The company name waschosen as the concepts of linking
and connecting are key to its two
main businesses, regional trade andelectric power.

*A commercial firm in which a bank is speciallyauthorized by the Financial Services Agency toown more than 5% of equity, such as cases inwhich the firm will contribute to improving
convenience for the bank’s customers or tocreating a sustainable society.

Regional trade business(Trade Business Department)
Support creating new sales channels,
provide consulting

Regional producers
and manufacturers

Promote sales overseas(or other prefectures)・Related companies (Domestic
and foreign trading companies,
consulting companies)
・Logistics companies (Domestic
distribution, forwarders)
・Specialist companies(Advertising, design, ﬁlming)
・Local governments (Prefectures,cities, towns, villages)

Electric power business(Electric Power Business Department)

100% equity

Generating and supplying
electric power

Create sustainableregional development by
supporting core businessactivities and encouraging
economic circulation
Hachijuni Link
Nagano Co., Ltd.
Create a sustainable
society by promoting
decarbonization

Cooperate using
The Hachijuni Bank Group’s
network

Regional businesses andlocal governments

Decarbonization,
zero carbon
・Related companies(Equipment and management)
・Retail electric powercompanies (Regional electric
power retailers)・Companies newly participatingin energy business (Local
companies)
・Local governments(Prefectures, cities, towns,
villages)

Linking Nagano Prefecture and the World
Promoting Nagano’s Specialty Products to the World through the Regional Trade Business
Each of Nagano’s specialty products grown and made by the people of our communities have theirown appeal. However, as the domestic market is expected to shrink due to a decreasing populationand declining tourism, many businesses are looking to overseas markets. Growth is expected inthese markets, but local businesses are unable to achieve their goals in expanding overseas due todifficulties involving information, language, logistics, and other aspects that differ from domestic
norms.
The Regional Trade Business Department was born from the desire to resolve this issue andcontribute to the development of the regional economy. We will support the global expansion ofNagano’s specialty products by making full use of the overseas business knowledge and networks
developed by our bank in the years since we opened our Hong Kong office in 1986.

Linking Nagano Prefecture Together with Green Energy
Contributing to Regional Communities with Green Energy through the Electric Power Business
The decarbonization of the region is an urgent issue as global warming and climate change will havesignificant impacts on the infrastructure, economy, and industry of our communities in the future.
The frequent sunshine, cool climate, and abundant water resources of Nagano Prefecture, where ourbusiness is based, make it an ideal environment for generating green energy (energy generated
without emitting CO₂ using solar power, hydropower, or other natural energy sources) to effectively
fight climate change, and we believe this environment offers the potential to lead decarbonization
initiatives not only for the region but also for the entire country. At present, however, we have madeless progress than we desire due to a number of issues such as the need for capital investment.
The Electric Power Department was created due to our bank’s desire to resolve these issues
ourselves as a pioneer in the region.
Using the abundant natural resources of Nagano Prefecture to increase the supply of green energy
and promote local production and consumption, we will contribute to creating a sustainable society
by achieving decarbonization. We will also work to attract companies to Nagano through thedevelopment of a supportive business management environment focused on decarbonization.

Creating a Better Future through Our Businesses

Business Promotion Department
Assistant Manager

Naoto Fujisawa

65

Value Creation Strategy

In order to achieve our bank’s Medium-Term Vision 2021,“Supporting our customers
and regions through the combination of financial services, non-financial services, andrelationships,”we established Hachijuni Link Nagano Co., Ltd. as a way to contributeto the development of our regional communities.
Both of our businesses are benefitting customers as we are increasing sales by
expanding sales channels in the regional trade business and reducing CO₂ emissions
and energy costs in the electric power business, and I personally feel greatsatisfaction in being able to demonstrate the enterprising spirit valued by our bank by
not only planning new businesses but also being responsible for their launch andgrowth.
I want to work to create a better future through our company’s businesses byconnecting Nagano with the world and with green energy in cooperation with ourcommunities and related companies.

Representative Director and Presidentof Hachijuni Link Nagano Co., Ltd.;
Planning and Coordination Department
Deputy Manager at Hachijuni Bank

Kenichi Kamiya

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66

Sources of Value Creation

Value Creation Strategy

Initiatives Utilizing the Expertise of the Nagano Economic Research Institute
Many of our customers say that they do not know where to begin to achieve their goals, or that theyrecognize the issues they face but do not know how to address them. We believe that one of ourbank’
s roles is to provide support to these customers.
The Nagano Economic Research Institute, the think tank of The Hachijuni Bank Group, wasestablished in 1984 and has since worked to investigate and research economic and industry trends,
business management, and regional development in Nagano Prefecture and to formulate plans
contributing to the resolution of regional issues, such as city and town development and regional
revitalization based on cooperation between local governments and communities. The Hachijuni
Bank Group as a whole will use that expertise to work to resolve the issues facing our communities.

Main Projects in FY2022
Ministry of Land, Infrastructure,
Transport and Tourism

Project to model measures to address the abandoned house issue using FY2022
housing market data

Azumino City

Provided support for formulating the 2nd Azumino City Comprehensive Development
Plan

Suzaka City

Provided comprehensive input on project to support working families raising children

Yamanouchi Town

Performed validation of project to stimulate the local economy by promoting digitaltransformation for Shiga Highlands tourism

Iizuna Town

Provided support for Iizuna’s PR campaign for agricultural products in FY2022

Community Service Activities
Financial and Economic Education and Diversity Education
Because we recognize that improving the financial
literacy of the children who will support our regional
communities in the future is an important duty of ourbank for achieving sustainable communities, weoffered a variety of educational programs regarding
finance and the economy as part of our community
service activities.
In fiscal year 2022, we worked to promote financial
and economic education by providing work experience
programs at our bank for elementary and junior highschool students, and holding the Nagano qualifier forthe national high school economics quiz tournament,
in which high school students compete using theirknowledge of economics and finance. We also
conducted on-site courses in which our employees
visited schools to provide lessons to improve financial
literacy on topics such as financial systems and thefinancial and economic environment.
Additionally, we also held seminars to share theknowledge and experiences gained from our diversity
initiatives with regional communities.

Value Creation Strategy

Corporate Data

Volunteer Activities
Environmental volunteer work such as the Hachijuni
Forest activities and terraced rice field preservation
activities are a pillar of the environmental preservation
efforts that we have pioneered in the financial industry.
Our employees independently choose to participate inthese and other volunteer activities, such as organizing
events representing the region and supporting welfare
programs.
We encourage employees to independently and actively
participate in activities by means such as providing
special paid leave for volunteer work. Despite thepandemic, approximately 2,650 employees (including
repeat participants) participated in volunteer activities infiscal year 2021, and approximately 4,580 participated in fiscal year 2022.
We will continue actively promoting our volunteer activities while valuing communication with our
regional communities.

Promoting Regional Culture
In addition to its abundant natural environment, one of the charms of Nagano Prefecture is theregional culture that has been developed and handed down by local people. We believe that
protecting and promoting this culture and passing it on to future generations is a duty of The
Hachijuni Bank Group that will help achieve sustainable regional communities.
The Hachijuni Culture Foundation, which handles the cultural promotion activities of The Hachijuni
Bank Group, puts that belief into practice through its wide range of activities. The foundation is also
engaged in efforts to make the daily lives of the people in our communities more rich and enjoyable.

Publication of “Regional Culture” Bulletin

We publish approximately 11,000 copies four times per year, with
content that includes articles introducing the features, histories, andcultural phenomena of our regional communities and special featureson the future of our regional culture.

Continuing Education and Exhibitions

We hold various exhibitions and concerts and offer courses featuring
a rich range of themes and instructors throughout Nagano Prefecture.
Despite the pandemic, these programs drew approximately 5,000
participants in fiscal year 2022.

Supporting Children Who Represent the Future through Financial andEconomic Education that Only We Can Offer
I worked on our financial and economic education programs with a focus on making
materials and communicating in a way that is easy for students to understand andthat helps them feel more familiar with finance and the economy, while also
responding to the goals and requests of teachers regarding these subjects.
Financial and economic education at high schools has only begun recently, so
teachers are still searching for the best approaches to take. I feel that the support weoffer as bank employees is very meaningful as we are helping to provide anenvironment where students can learn about finance and the economy.
Through the financial and economic education that we are uniquely positioned tooffer as a regional financial institution, I will continue to contribute to improving thefinancial literacy of our communities so that our students can enjoy better lives in the
future.

67

Annual Report 2023

Ina Branch

Megumi Mitani

Annual Report 2023

68

Sources of Value Creation

Value Creation Strategy

Value Creation Strategy

Corporate Data

External Ratings and Initiatives
External Ratings

Initiatives
We participate in and endorse a number of initiatives in order to contribute to achieving asustainable society.

FTSE ESG Ratings
In June 2023, we received a score of 3.1 out of 5 in the
FTSE ESG Ratings, which rate efforts to address potential
ESG (Environment, Society, and Governance) risks basedon the business characteristics of the rated company.

TCFD
In March 2020, we endorsed the Task Force on ClimateRelated Financial Disclosures (TCFD) recommendations, andwe are working to disclose information on our climaterelated risks and opportunities.
➡ Please see pp.53–60 for information on our efforts.

CDP

GX League

We received a B score for climate change initiatives in the2022 rating of corporate efforts to address environmental
issues conducted by the CDP, an international
environmental NPO. B is the third highest out of ninescores.

In October 2022, we endorsed the GX League, throughwhich the business, government, and academic sectors will
cooperate to achieve carbon neutrality by 2050, and webecame a member of the league in April 2023. Through thisinitiative, we will work to become a leader in taking on
green transformation challenges.

PCAF

Green, Social, and Sustainability Bond Framework
In October 2022, we established a green, social, and sustainability bond framework in order tocontinue fulfilling our purpose of contributing to regional development as the leading bank in
Nagano Prefecture, and this framework received the highest rating of SU1 (F) in the JCR
Sustainability Bond Framework Rating conducted by Japan Credit Rating Agency, Ltd.

Financial Action Principles to Create a Sustainable Society(Principles for Financial Action for the 21st Century)

Outstanding Employer in Corporate Health
We have been certified as an Outstanding Employer in
Corporate Health 2023 by the Ministry of Economy, Tradeand Industry for being a corporation that implements
excellent corporate health practices.

Outstanding Employer
in Corporate Health 2023

pp

ort Working P

arIn December 2011, we became a signatory to the Financial
Action Principles to Create a Sustainable Society led by the
Ministry of the Environment. Our bank was involved in thedrafting of these principles and also served as a steeringcommittee member and as chair of the deposit, loan, andlease operations working group. Through these efforts, wewill fulfill our duties and roles necessary in order to create asustainable society.

ts

W

Su

en

e

Kurumin
We have received Kurumin certification as a corporationthat supports working parents under the Act Promoting
Measures to Support the Raising of the Next Generation.

In March 2023, we joined the Partnership for Carbon
Accounting Financials (PCAF), an international initiative that
promotes the calculation and disclosure of greenhouse gas
emissions caused by investment and lending by financial
institutions. Moving forward, we will calculate and disclose
our supply chain emissions using the measurement methods
set out by the PCAF.

National Movement for New and Prosperous Lifestyles toward Decarbonization
Ce
rti
fied

Employer08
20

In October 2022, we participated in the“National Movement for New and Prosperous Lifestyles
toward Decarbonization”started by the Ministry of the Environment as a platform for the public
and private sectors to cooperate to create new products and services with the goal of changing
consumer behavior to promote decarbonization. This initiative aims to achieve carbon neutrality
by 2050 through public-private cooperation.

Eco-First Program
In August 2018, our efforts regarding our bank’senvironmental management systems were recognized by the
Minister of the Environment, and we became the second in
the banking industry to receive certification as an“Eco-First
Corporation.”We will continue working to earn recognition
for our strength in environmentally sound management.
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Sources of Value Creation

Corporate Data

Value Creation Strategy

Corporate Data

Directors and Audit & Supervisory
Board Members
Directors

Audit & Supervisory Board Members

1

3

5

2

Takahiko Asai

Masaki Matsushita

Shohei Hidai

Makoto Nakamura

96

Hitoshi Nishizawa

10

12

8

Kayo Tashita

Miyako Hamano

Eiji Kanzawa

Takayuki Kanai

Chishu Minemura

President (Representative Director) / Executive President

Vice President (Representative Director) / Executive Vice President

Director / Managing Executive Officer

Director

1

2

3

4

5

Takahiko Asai

Masaki Matsushita

April
February
February
June

Director*

Director*

Director*

Director*

6

7

8

9

Kayo Tashita

April
April
October
April
June

1990: Registered as an attorney (Nagano Bar
Association)
1991: Joined Miyazawa Law Office
1996: Established Tashita Law Office
2007: Committee Member, Nagano Prefecture
Personnel Committee (current position)
2014: Chairperson, Nagano Bar Association (leftposition March 2015)2016: Outside Director of The Hachijuni Bank
(current position)

June
June
June
June
June
June

April

Miyako Hamano

July
October
April

June
June

1979: Joined Japan External Trade Organization(JETRO)
2013: Executive Vice President, JETRO
2015: Advisor, JETRO
2016: Councilor, JETRO (current position)
Policy Advisor, Secretariat of Intellectual
Property Strategy Headquarters, the Cabinet
Office (left position September 2019)
Member of the board of trustees, Shinshu
University (current position)
2020: Outside Director, Glosel Co., Ltd. (current
position)
2021: Outside Director of The Hachijuni Bank
(current position)

Full-time Audit & Supervisory Board Member

Full-time Audit & Supervisory Board Member

1011Chishu Minemura

April
February
April
June
June
June
June

Annual Report 2023

1988: Joined The Hachijuni Bank
2009: Komoro Branch Deputy Manager
2009: Komoro Area/Branch Deputy Manager
2012: Iida Ekimae Branch Manager
2015: International and Treasury Department
Manager
2017: Risk Management Department Manager
2020: Full-time Audit & Supervisory Board Member(current position)

April
June
June
June
June
June
June
June

April
March

February
June
June
June
June
June
June
June

April

1988: Joined The Hachijuni Bank
2010: Risk Management Department Deputy
Manager
2013: Tokyo Liaison Office Manager
2015: Minami Matsumoto Area/Branch Manager
2017: Planning and Coordination Department
Manager
2018: Executive Officer and Planning and
Coordination Department Manager
2019: Managing Executive Officer and Head Office
Sales Department Manager
2021: Managing Director
2022: Senior Managing Director and Senior
Managing Executive Officer (current
position)
2023: Vice President and Executive Vice President(current position)

Eiji Kanzawa

March
May
May
May
May
May
June
June
June

1980: Joined The Hachijuni Bank (resigned January
1986)
1986: Joined Kissei Comtec Co., Ltd.
1988: Director, Kissei Comtec Co., Ltd.
1990: Managing Director. Kissei Comtec Co., Ltd.
1992: Executive Vice President, Kissei Comtec Co.,Ltd.
1994: President and CEO, Kissei Comtec Co., Ltd.
2018: Chairman, Nagano Prefecture Information
Service Association (current position)
2018: President, Nagano Techno Foundation (leftposition March 2022)
2021: Outside Director of The Hachijuni Bank
(current position)
2022: Chairman, Representative Director and CEO,
Kissei Comtec Co., Ltd. (current position)

Audit & Supervisory Board Member*

Akihiro Kasahara 12 Kiyohito Yamasawa
1989: Joined The Hachijuni Bank
2009: Azusagawa Branch Manager
2011: Assigned to Loan Control Department
2013: Matsushiro Branch Manager
2016: General Affairs Department Manager
2019: Executive Officer and Planning and
Coordination Department Manager
2021: Executive Officer and Internal Audit
Department Manager
2022: Full-time Audit & Supervisory Board Member(current position)

April

October
OctoberJune

1980: Assistant Professor, Faculty of Engineering,
Shinshu University
1993: Professor, Faculty of Engineering, Shinshu
University
2009: President of Shinshu University (left position
September 2015)2016: Outside Audit & Supervisory Board Memberof The Hachijuni Bank (current position)

April
June

Makoto Nakamura

April
1987: Joined The Hachijuni Bank
September 2005: Karuizawa Branch Manager
June2008: Assigned to Loan Control Department
June
2010: Matsushiro Branch Manager
June2013: Tokyo Sales Department I Manager
June2015: Risk Management Department Manager
June
2016: Loan Control Department Manager
June
2017: Executive Officer and Loan Control
Department Manager
June
2018: Managing Executive Officer and Head Office
Sales Department Manager
June
2019: Managing Director
June
2021: Vice President
June
2022: Vice President and Executive Vice President
June
2023: Board of Directors Chair and Executive
Chair (current position)

June

1982: Joined The Hachijuni Bank
2004: Nagano Minami Branch Manager
2006: Sakaki Branch Manager
2008: Planning and Coordination Department
Manager
2011: Executive Officer and Suwa Area/BranchManager
2013: Managing Executive Officer and Tokyo Sales
Department Manager
2014: Managing Executive Officer and Head Office
Sales Department Manager
2015: Managing Director and Matsumoto Sales
Department Manager
2017: Vice President
2021: President
2022: President and Executive President (current
position)

Shohei Hidai

1990: Joined The Hachijuni Bank
2007: Planning and Coordination Department
Deputy Manager
2009: Hong Kong Branch Manager
2013: Ueda Higashi Branch Manager
2016: Omachi Branch Manager
2018: Financial Market Department Manager
2019: Executive Officer and Financial Market
Department Manager
2020: Executive Officer and Operations
Administration Department Manager
2021: Managing Executive Officer and Head Office
Sales Department Manager
2023: Director and Managing Executive Officer(current position)

June
June
June
June
June
June
June
June

April

Akihiro Kasahara

13

Kiyohito Yamasawa

Hitoshi Nishizawa

October
October
March
March
June
June

Takahiko Asai

Executive
President

Masaki Matsushita

Executive
Vice President

Shohei Hidai

Managing
Executive Officer

Makoto Nakamura

Managing
Executive Officer

Shigeru YoshimuraManaging
Executive Officer

Kenko Takano

Managing
Executive Officer

Katsuya KamimuraManaging
Executive Officer

Ryoichi Kitayama

Managing
Executive Officer

Keigo Ito

Executive Officer

Tomoyoshi Baba

*Outside director as defined in Article 2, item (xv)of the Companies Act

Executive Officer

Atsushi Horiuchi■Ratio of outside directors: 44%■Ratio of female directors: 22%

Executive Officer

Satoshi Masuda

Executive Officer

Atsushi Kono

Executive Officer

Hideki Yoshida

Executive Officer

Hidenori Dezawa

Executive Officer

Kiyomi Ito

Executive Officer

Tatsuya Akaba

Executive Officer

Takehiko Kimura

June
July
June
June

Audit & Supervisory Board Member*

13

14

1981: Joined the Long-Term Credit Bank of Japan(currently SBI Shinsei Bank, Limited)
1998: Deputy Counsellor, Investigation
Department, the Long-Term Credit Bank ofJapan (left position March 1999)
April
1999: Full-time lecturer, School of Economics,
Senshu University
April
2001: Professor, School of Economics, Senshu
University
April
2002: Part-time lecturer, Faculty of Contemporary
Society, Kyoto Women’s University (leftposition March 2009)
April
2012: Visiting fellow, University of London (leftposition March 2013)
September 2022: Director, Incorporated Education Institution
Senshu University
Dean and Professor of School of Economics,
Senshu University (current position)June
2023: Outside Audit & Supervisory Board Memberof The Hachijuni Bank (current position)
October

Executive Officers
Executive Chair

April

1985: Joined The Industrial Bank of Japan, Limited(currently Mizuho Bank, Ltd.)
2013: Assistant General Manager, Internal Audit
Department, Mizuho Bank, Ltd.
2014: Deputy General Manager, Securities &International Department, The Nagano
Bank, Ltd.
2015: Director and General Manager, Securities &International Department, The Nagano
Bank, Ltd.
2016: Managing Director and General Manager,
Securities & International Department, The
Nagano Bank, Ltd.
2017: Managing Director, The Nagano Bank, Ltd.
2019: President and Representative Director, The
Nagano Bank, Ltd. (current position)
2023: Director of The Hachijuni Bank (current
position)

Audit & Supervisory Board Member*

Takayuki Tanaka

Hiroshi Hori

Name

July

Takayuki Kanai

1982: Joined The Nippon Credit Bank, Ltd.
(currently Aozora Bank, Ltd.)
2008: Executive Officer, The Nippon Credit Bank,
Ltd. (left position September 2010)2010: Joined Nishimoto Trading Co., Ltd.; Senior
Managing Director
2012: President, Nishimoto Trading Co., Ltd.
2017: President & COO, Nishimoto Co., Ltd. (leftposition March 2020)
2020: Outside Director, Kameda Seika Co., Ltd.
(current position)
2022: Outside Director of The Hachijuni Bank
(current position)

Takayuki Tanaka

Title

April

June

April

14

11

Board of Directors Chair / Executive Chair

April

71

7

4

April
June
June
April
June

June
June

Hiroshi Hori

1986: Joined The Japan Development Bank
(currently The Development Bank of JapanInc.)
2011: Asset Management Group Head, The
Development of Bank of Japan Inc.
2013: Representative and Senior Executive
Director, DBJ Asset Management Co., Ltd.
2016: President, DBJ Asset Management Co., Ltd.
(left position June 2017)2017: Director and General Manager, General
Administration and Accounting Department,
Marubeni Financial Service Corporation (leftposition June 2021)
2021: Full-time Audit and Supervisory Board
Member, Sagami Railway Co., Ltd. (current
position)
2023: Outside Audit & Supervisory Board Memberof The Hachijuni Bank (current position)(As of June 23, 2023)*O utside audit & supervisory board member as
defined in Article 2, item (xvi) of the Companies
Act
Annual Report 2023

72

Sources of Value Creation

Corporate Data

Organization Chart

Value Creation Strategy

Corporate Data

Subsidiary Information

The Hachijuni Bank GroupLease
business

Banking business

●

●

●

●

Hachijuni Securities Co., Ltd.

Hachijuni Capital Co., Ltd.

Hachijuni Asset Management Co., Ltd.

Hachijuni Investment Co., Ltd.

Hachijuni Link Nagano Co., Ltd.

Internal Audit Department●●

Tokyo Liaison Oﬃce

Hachijuni Auto Lease Co., Ltd.

●

General Aﬀairs Department●●

General Secretariat

The Nagagin Leasing Corporation●

Human Resources Department

Hachijuni Lease Co., Ltd.

●

Risk Management Department●●

Digital Transformation Department●●

Planning and Coordination Department

Yamabiko Services Co., Ltd.

●

Computer Systems Department

Hachijuni Staﬀ Service Co., Ltd.

●

Operations Administration Department●●

Loan Control Department

Hachijuni System Development Co., Ltd.

●

Financial Market Department●●

International Department

Hachijuni Credit Guarantee Co., Ltd.

●Business Promotion Department●●

Business Planning Department●●

Head Oﬃce (13 departments,
1 secretariat, 1 oﬃce)

Branches

Operation Centers

Nagano Card Co., Ltd.

Management Committee●

Audit & Supervisory Board
Administration Oﬃce

Nominating andCompensation Committee

Hachijuni Card Co., Ltd.

Board of Directors●

Audit & Supervisory Board(and Members)

The Nagano Bank, Ltd.

Shareholders Meeting●

The Hachijuni
Bank, LTD.

Information on Bank Subsidiaries

Other
business(15 consolidated subsidiaries)(As of June 23, 2023)

Name
Incorporation date

Address

Main businesses

Capital(millions ofyen)

The Nagano Bank, Ltd.
November 15, 1950

2-9-38 Nagisa,
Matsumoto City

Banking

13,017

100.0

－

100.0

Hachijuni Securities Co., Ltd.
May 11, 1949

1277-2 Minami
Ishidocho, Minami
Nagano, Nagano
City

Trading of securities;
intermediary, brokerage,
and agency services for
trading of securities

3,000

100.0

－

100.0

Hachijuni Lease Co., Ltd.
June 10, 1974

218-14 Okadamachi,
Nakagosho, Nagano
City

Leasing

200

100.0

－

100.0

The Nagagin Lease Co., Ltd.
January 12, 1980

2-2-16 Ote,
Matsumoto City

Leasing

34

－

88.1

88.1

Hachijuni Card Co., Ltd.
August 2, 1982

218-11 Nakagosho,
Nagano City

Credit card services

30

100.0

－

100.0

Nagano Card Co., Ltd.
July 2, 1990

2-2-16 Ote,
Matsumoto City

Credit card services

30

－

95.0

95.0

Hachijuni Credit Guarantee
Co., Ltd.
December 1, 1983

178-2 Okadamachi,
Nakagosho, Nagano
City

Credit guarantee
services

30

100.0

－

100.0

Hachijuni System
Development Co., Ltd.
December 5, 1983

178-13 Okadamachi,
Nakagosho, Nagano
City

System development

40

100.0

－

100.0

Hachijuni Capital Co., Ltd.
September 17, 1984

1282-11 Minami
Ishidocho, Minami
Nagano, Nagano
City

Investment

200

10.0

31.0

41.0

Hachijuni Staff Service Co.,Ltd.
September 11, 1986

178-2 Okadamachi,
Nakagosho, Nagano
City

Staff dispatch andreferral

20

100.0

－

100.0

Yamabiko Services Co., Ltd.
June 2, 2000

178-2 Okadamachi,
Nakagosho, Nagano
City

Debt management andcollection

510

99.0

－

99.0

Hachijuni Auto Lease Co.,
Ltd.
October 3, 2005

218-14 Okadamachi,
Nakagosho, Nagano
City

Leasing

100

－

100.0

100.0

Hachijuni Asset Management
Co., Ltd.
October 1, 2021

4-1-22 Nihonbashi
Muromachi,
Chuo-ku, Tokyo

Investment management,
advising, and agency
services; type II financial
instruments business

200

100.0

－

100.0

Hachijuni Investment Co.,
Ltd.
October 1, 2021

1282-11 Minami
Ishidocho, Minami
Nagano, Nagano
City

Investment

30

100.0

－

100.0

Hachijuni Link Nagano Co.,
Ltd.
October 3, 2022

178-8 Okadamachi,
Nakagosho, Nagano
City

Regional trade;electric power(power generation)

100

100.0

－

100.0

The Hachijuni
Subsidiary
Bank equity
equity ratio
ratio

Total equity ratio of
The Hachijuni Bankand subsidiaries(As of June 23, 2023)

Main Services
1 Deposits

Checking deposits, ordinary
deposits, fixed deposits, fixedinstallment deposits, special
deposits, non-resident yen
deposits, transferable deposits,
and foreign currency deposits

2 Lending

（1）
Loans
Loans under promissory notes,
loans under agreements, andoverdraft facilities（2）
Discounted bills
Discounted commercial bills

3 Purchase and sale ofsecurities for trade

Purchase and sale of governmentand other public bonds

4 Securities investment

Investment in government,
regional, and corporate bonds,
shares, and other securities fordeposit reserves and fundmanagement

5 Domestic transfers

Money transfers, remittances,and payment collection

6 International transfers

Services relating to imports,
exports, international moneytransfers, and other foreignexchange

7 Trust and management
services for public andcorporate bonds
Services relating to entrustmentof corporate bonds andflotation and entrustment ofpublic bonds

8 Trust services（1）
Testamentary trusts
Storing, executing, and helping
to prepare wills（2）
Estate management
Performing inheritance procedures
on behalf of customers（3）
Monetary trusts
Monetary trusts for inheritanceor donation; monetary trusts thatcan be accessed by a designatedrelative before trustor’s death（4）S pecified disabled dependent
trusts (specified gift trusts)（5）
Charitable trusts（6）
Other trusts

9 Related services（1）
Agency services(ⅰ)B ank o f Japan agenc y,Bank of Japan revenue
agency, and government
bond agency services(ⅱ)Handling public funds for
local governments(ⅲ)Organization for Workers’
Retirement Allowance
Mutual Aid, etc. agency
services(ⅳ)Services for receiving paidin capital and paying stock
dividends and bondprincipal and interest(ⅴ)Proxy loan services for Japan
Finance Corporation, etc.
(ⅵ)Trust agency servicesS afekeeping and safe deposit（2）
box services（3）
Lending securitiesG uaranteeing debts (banker’（4）s
acceptance)（5）
Credit card services（6）O ver-the-counter sales ofinvestment trusts andinsurance products（7）
Public bond underwriting
Commercial paper（8）（9）
I ntermediary services forfinancial products（10）D efined-contribution pension
operation and management(As of June 23, 2023)

 he Hachijuni Bank Group also includes Kodama Investment Limited, investment partnerships, and other companies, but as their significance
Note: Tis minor, they are not included in our consolidated accounts.

73

Annual Report 2023

Annual Report 2023

74

Sources of Value Creation

Corporate Data

Corporate GovernanceValue Creation Strategy

Corporate Data

Corporate Governance Structure
Shareholders Meeting

Basic Views

Independent auditor

Compliance andOperational Risk
Council

Sustainability
Council

●

●

●

●

●

●

●

●

●

●

●

●

●

Business Planning
Department

Business Promotion
Department

International Department

Financial Market
Department

Loan Control
Department

Operations Administration
Department

Computer Systems
Department

Planning and Coordination
Department

Digital Transformation
Department

Risk Management
Department

Human Resources
Department

General Secretariat

General Aﬀairs Department

43

Directors

Members9

Director Compensation Structure

Fixed compensation
Performance-based
compensation
Stock compensation

5

InsideInside5

・Number of directors under articles
of incorporation: 12 or fewer
・Term of oﬃce under articles ofincorporation: 2 years
・Meetings chaired by Board of
Directors ChairManagement Committee

Audit and Supervisory Board

Nominating and Compensation Committee

2・Number of members under articles
of incorporation: 6 or fewer(As of June 23, 2023)

14 meetings held in FY2022
The Audit and Supervisory Board
meets once per month in principle,
and audits internal activities andperformance independently fromthe Board of Directors incooperation with the independent
auditor and the Internal Audit
Department.

Internal Audit Department

Company with audit &supervisory board

Board of Directors

15 meetings held in FY2022
The Board of Directors meets atleast once per month in principle.
In addition to engaging insubstantial discussions, the Board
ensures sound operation throughthe shared supervision of businessexecution.

Outside●Outside (including two women)

Tokyo Liaison Oﬃce

Audit & Supervisory Board

Loan
Management
Council●

Branches(Head Oﬃce)●

Operation Centers

Board of Directors）

Audit and Supervisory Board
Audit and Supervisory
Board members(5; including 3 outside members)

Board of Directors
Directors(9; including 4 outside directors)

ALM andComprehensive
Risk Management
CouncilGovernance Structure Overview
Governance Structure Type）

Auditing performanceof director duties

Management Committee●

Basic Policy on the Developmentof Internal Control Systems(Systems to Ensure Proper Operations)(in Japanese)

Corporate GovernancePrinciples(in Japanese)

Nominating andCompensation
Committee(Business execution)

In order to achieve our management philosophy of contributing to regional development through acommitment to sound banking principles, we have established and disclosed our Corporate
Governance Principles that govern all of our corporate activities in order to ensure the continuationof The Hachijuni Bank Group, increase our corporate value, and fulfill our social responsibility.
The Corporate Governance Principles set out our basic approaches regarding stakeholders such as
our customers, shareholders, employees, and communities as well as our basic policies on corporate
governance, legal compliance, corporate ethics, and information disclosure.
We have also established a Basic Policy on the Development of Internal Control Systems (Systems to
Ensure Proper Operations) in order to develop and appropriately operate systems to ensure proper
operations in the corporate group consisting of The Hachijuni Bank and our subsidiaries.

（

Determining andsupervisingbusiness execution（(As of June 23, 2023)

44 meetings held in FY2022
We have established the Management Committee for the purpose of determining andsupervising the day-to-day execution of business. The Management Committee meets
every week in principle to discuss and determine important business matters, and theBoard of Directors makes final decisions after deliberation by the Management
Committee. We have also established the ALM and Comprehensive Risk Management
Council, the Compliance and Operational Risk Council, the Sustainability Council, andthe Loan Management Council under the Management Committee to address specificaspects of business.
6 meetings held in FY2022
As an advisory body to the Board of
Directors, the Nominating and Compensation
Committee discusses succession planning
as well as the election, dismissal, andcompensation of the directors and Audit &Supervisory Board members. In order toensure the independence of the committee,
half of its members are outside directors, andan outside director serves as committee chair.

Internal Audit Department
The Internal Audit Department
is directly under the authority of
the Board of Directors andconsists of approximately 30
employees. It performs internal
audits based on the audit
policies established byresolutions of the Board of
Directors each fiscal year.

Independent auditor

Accounting audits for our bank are performed by Deloitte Touche Tohmatsu LLC, with whom we have entered into an auditing
agreement.

Main Efforts to Improve Corporate Governance
June 2013

Elected one
outside director

75

Annual Report 2023

February 2017 February 2021

Established
Nominating andCompensation
Committee

Established Policy
on Determinationof Compensation ofIndividual Directors

June 2021

Added twooutsidedirectors(for a total of four)

June 2022

Expanded
executive officer
systemExpanded executive
officers to include
directors,
strengthening
business execution

Matters Addressed by the Board of Directors
In fiscal year 2022, the Board of Directors mainly deliberated proposals such as the following.
Resolutions:	M erger with the Nagano Bank, Ltd., establishing subsidiaries, subsidiary mergers,
determining and disclosing material issues, changing business management systems,
merging and closing branches, formulating risk management policies, formulating policies
for providing credit to borrowers
Business environment surrounding our bank and the industry, progress on the merger
Reports:
with the Nagano Bank, implementation status of short-term management plan,management status of compliance and anti-money-laundering measures, status ofstrategic shareholdings, matters regarding the evaluation of the effectiveness of theBoard of Directors, policy on initiatives regarding loan guaranties by chief executives
Annual Report 2023

76

Sources of Value Creation

Corporate Data

Corporate Data

Evaluating the Effectiveness of the Board of Directors

Director and Audit & Supervisory Board Member Skills Matrix

Each year, we use self-assessments by each director and Audit & Supervisory Board member to analyze andevaluate the effectiveness of the Board of Directors and identify issues to be addressed in regard to theboard’s size, composition, operation, deliberations, and support systems as well as other matters that we
consider important in order for the board to fulfill its roles and duties.

In order for the Board of Directors to effectively fulfill its roles and duties, we believe that in addition
to requiring a certain number of directors who have worked for our bank and have a thoroughknowledge of our operations and the important issues we must address, it is also important toensure diversity in the knowledge, experience, and skills of board members.
For that reason, our basic policy is to elect people with diverse knowledge and backgrounds asdirectors and Audit & Supervisory Board members.
The skills matrix of our directors and Audit & Supervisory Board members is provided below.

Conduct
questionnaire

Hold discussions
based on results

Evaluate effectiveness andshare evaluation results

Operate the board toaddress issues identified

In fiscal year 2022, we implemented measures such as the following in order to address the issues identified
in the evaluation and analysis conducted in the previous fiscal year, which include enriching discussions on
management strategies.

Note: The skills matrix does not represent all of the knowledge and experience held by each person but instead indicates threeareas in which each of them is particularly expected to utilize their expertise based on their experience.

（1）
Efforts to enrich discussions on management strategies
Main Efforts

The board enriched its discussions regarding management strategies by deliberating proposals relating to matters such as
the merger with the Nagano Bank, Ltd., sustainability efforts and material issues, and changes to our management systems.

Areas in which directors/members are particularly expected to utilize their expertise

We repeatedly held briefings and conducted on-site observation tours for outside directors and Audit & Supervisory Board members
in order to deepen their understanding of the matters deliberated by the Board of Directors. As new initiatives to promote theirunderstanding of the departments that carry out the bank’s business, we held round-table meetings between outside directors andemployees as well as branch manager discussions that included outside directors and Audit & Supervisory Board members.

As in previous years, each director and Audit & Supervisory Board member also performed a self-assessment
using a questionnaire regarding the effectiveness of the Board of Directors, and the board deliberated thoseresults in February 2023. Although the evaluation results indicated that the board is functioning properly
overall, some responses stated that it was necessary to expand discussions that focus on the businessenvironment. We will use these results to advance measures to further increase the effectiveness of theBoard of Directors.

Support Systems for Outside Directors and Audit & Supervisory Board Members
The Planning and Coordination Department is responsible forsupporting outside directors, while support for outside Audit &Supervisory Board members is provided by dedicated support
employees assigned to the Audit & Supervisory Board
Administration Office.
In order to aid outside directors and Audit and Supervisory Board
members in understanding matters unique to banking operations or
financial institution management or other matters deliberated by
the Board of Directors, we hold briefings on our operations,observation tours of our business locations, and discussions with
employees as necessary.

Discussion between outside directors and employees

Compensation for Directors and Audit & Supervisory Board Members
The compensation for the directors of our bank is determined in accordance with the Policy on
Determination of Compensation of Individual Directors established by a resolution of our Board of Directors
on February 19, 2021. Compensation for Audit & Supervisory Board members as a whole consists only of
fixed remuneration up to a monthly limit of 8 million yen that was determined by a resolution of theshareholders meeting, and the portion of that total amount distributed to each member is determined by the
Audit & Supervisory Board. The Board of Directors receives advice and recommendations from theNominating and Compensation Committee in regard to matters relating to compensation for directors andAudit & Supervisory Board members.

Reasons for Electing Outside Directors
Board meetings
attended in
FY2022Name

Reasons for Election

KayoTashita

Ms. Tashita was elected as an outside director as we expect her to further strengthen the board’s ability tosupervise management by using her high degree of specialized legal knowledge as an attorney and her experience
serving as a non-executive director and attorney at Yamabiko Services Co., Ltd., which engages in debt management
and collection.

MiyakoHamanoMs. Hamano was the first female executive vice president of the Japan External Trade Organization (JETRO) and hasabundant experience and a broad range of knowledge from working for many years to revitalize communities andsupport companies in entering overseas markets. She also has experience serving as an outside director for acommercial firm, and she was elected as an outside director as we determined that she will further strengthen theboard’
s ability to supervise management.

15/15

Mr. Kanzawa serves as the representative director of Kissei Comtec Co., Ltd. and has extensive knowledge on
Eiji
promoting digitalization. He has also appropriately performed his duties as an outside director of our bank, and he
Kanzawa was reelected as an outside director as we determined that he will continue to contribute to our management.

15/15

Mr. Kanai has an abundance of knowledge from successively holding various positions, including serving as an

Takayuki executive officer of Aozora Bank, Ltd. and president and COO of Nishimoto Co., Ltd. He was elected as an outside
as we determined that he will provide insights from a variety of perspectives based on his experience andKanai director
high degree of knowledge not only in the financial field but also as a corporate executive.

Annual Report 2023

15/15

15/15

Corporate/
Sales strategy, Legal affairs,
Human
Global Financial
DX/IT,
Communities,
organizational
corporaterisk
resources,business markets
technology
environment
management
supportmanagement
diversity

Name

Position

Takahiko
Asai

Board ofDirectors Chair●●

MasakiMatsushita

President●●●

Shohei Hidai

Vice President●●

MakotoNakamura

Director

Hitoshi
Nishizawa

Director●

Kayo Tashita

OutsideDirector●

MiyakoHamanoOutsideDirector●

Eiji Kanzawa

OutsideDirector●

Takayuki
Kanai

OutsideDirector●

ChishuMinemura

Full-time Audit& Supervisory
Board Member

AkihiroKasahara

Full-time Audit& Supervisory
Board Member

Kiyohito
Yamasawa

Outside Audit& Supervisory
Board Member

Takayuki
TanakaOutside Audit& Supervisory
Board Member

Hiroshi Hori

Outside Audit& Supervisory
Board Member（2）
Efforts to expand constructive discussion at board meetings

77

Value Creation Strategy

●

●

●

●

●

●
●

●

●

●
●

●

●

●

●

●

●

●
●

●

●

●

●

●

●

●
●

●
●

●

Main Knowledge and Experience Required in Each Area
◦Management of corporations, organizations,
Corporate/
Legal affairs, ◦Specialized knowledge on legal systems andetc.
regulationsorganizational ◦P lanning management strategies with arisk◦R isk management for general corporatec o m p a n y - w i d e , m e d i u m t o l o n g - t e r m management
management
activities
perspective

Globalbusiness◦M a n a g e m e n t o f o v e r s e a s l o c a t i o n s o r
business divisions handling international
finance or trade◦Planning strategies with a global perspective

transformation, science, or technology
DX/IT,
technology ◦Computer system planning, operation, and◦S p e c i a l i z e d k n o w l e d g e o n I T , d i g i t a l

Financialmarkets◦K nowledge of overall financial market;
securities investment, etc.
◦T rends in overall financial industry andfinancial administration◦G e n e r a l H R a f f a i r s : H R m a n a g e m e n t ,personnel development, payroll, employee
benefits◦Promoting diversity and inclusion

Sales
strategy,
corporate
support◦S ales planning, marketing, new business◦Knowledge of history, culture, and economy
developmentof regional communities
Communities, ◦Initiatives to address environmental problems◦C orporate screening, business referrals,
business revitalization support, business environment
or promote environmentally soundsuccessions and M&A
management

management

Human
resources,
diversity

Annual Report 2023

78

Sources of Value Creation

Corporate Data

Legal Compliance and Customer
Protection Systems
Compliance Initiatives

Initiatives to Prevent Financial Crime

We work to thoroughly prevent money laundering and terrorist financing, the risks of which are
growing due to the increased complexity of financial transactions and a higher degree ofsophistication in the methods used for criminal activity.
We periodically confirm customer information and transaction purposes both for customers new toour bank, such as when customers open new accounts, as well as for existing customers. For
transactions such as overseas remittances, we also confirm the purpose of the transaction and check
relevant materials based on the transaction details.
Basic Policy on Measures against Money Laundering andTerrorist Financing (in Japanese)

Basic Compliance Policy(in Japanese)

Systems

Efforts to Address Organized Crime

We have established the Compliance andOperational Risk Council as a special-purpose bodywithin the Management Committee and areworking to ensure compliance through discussions
by the council to develop and strengthen ourcompliance systems.

We comply with the Basic Policy on Organized
Crime Groups established by the Board of
Directors to maintain trust in our bank and ensure
sound and proper operations. We are also
advancing similar efforts for our group companies.
Basic Policy on Organized
Crime Groups (in Japanese)

Efforts to Protect Customers
Systems
We comply with the Policy on Protecting Customers, the Declaration on Personal Information
Protection, and the Policy on Managing Conflicts of Interest established by the Board of Directors.
We have also established the Compliance and Operational Risk Council as a special-purpose bodywithin the Management Committee and are working to protect customers through discussions by
the council to develop and strengthen our customer protection systems. Particularly for products
such as investment trusts, foreign currency deposits, and personal pensions that carry a risk of losing
money, we determine the information that customers must be aware of and ensure that we clearly
explain it.

Efforts to Address Customer Complaints, Inquiries, and Requests
We treat complaints, inquiries, and requests from customers seriously and use that customer feedback tomake improvements and prevent similar issues from happening. Our head office collects data on
customer feedback and shares it among our employees so that we can better train and educate them toprovide financial services that satisfy our customers.
Additionally, we refer customers upon request to financial alternative dispute resolution programs that
resolve disputes through the involvement of fair and neutral third party organizations, and we work to
resolve complaints and disputes referred to those programs.
Designated banking dispute resolution organizations engaged by our bank79

Annual Report 2023

Corporate Data

Initiatives to Prevent Money Laundering

We consider the establishment of a strong compliance mindset to be one of our most importantmanagement issues, and we aim to achieve sound and highly transparent management inaccordance with the Basic Compliance Policy established by the Board of Directors. Additionally, we
have created a compliance manual with board approval that consists of two parts, a summary
section explaining our Basic Compliance Policy and compliance systems, and a compliance code of
conduct that sets out approaches and internal procedures for specific situations. We work to ensurethat all employees are familiar with the compliance manual and use it as the basis of their actions
and judgments on a day-to-day basis.

Name: Japanese Bankers Association
Consultation Center
Tel.: 0570-017109 or 03-5252-3772

Value Creation Strategy

Name: Trust Consultation Center, Trust
Companies Association of Japan
Tel.: 0120-817335 or 03-6206-3988

Initiatives to Prevent Fraudulent Online Banking Transactions
One-time Passwords

We require customers to enter a one-time password generated by a security token when performing
transfers and other transactions through our online banking services. As these passwords can only
be used once, old passwords cannot be exploited even if stolen, and the passwords automaticallychange every 60 seconds so that would-be hackers do not have time to crack them, thereby greatly
increasing security against fraudulent transactions.
For individual customers who use online banking, one-time passwords are displayed on thecustomer’s smartphone using our app that contains the security token.

Antivirus Software for Online Banking

Customer information is frequently stolen through computer viruses that deceive users into entering
sensitive information. To prevent this, we recommend to our customers that they use Rapport, a free
antivirus program for computers developed specifically for online banking.

Initiatives to Prevent Bank Transfer Fraud
We are implementing a variety of initiatives to protect our customers’assets from bank transfer
fraud.

Endorsement of Joint Declaration to Eliminate Bank Transfer Fraud

We have endorsed the Joint Declaration to Eliminate Bank Transfer Fraud issued by the Nagano
Police and financial institutions headquartered in Nagano Prefecture in order to protect customer
assets from fraud.

Partial Restrictions on ATM Transactions

We partially restrict ATM transfers and cash payments by elderly customers to protect them frompotential fraud.

ATM Warnings

We provide on-screen and audio warnings about potential fraud when customers perform ATM
transfers.

Bank Teller Efforts

When elderly customers request to transfer or withdraw large sums of money, our bank tellers work
to prevent fraud by asking them about the purpose of their transaction and checking any relevantmaterials. We are implementing a full range of measures to thoroughly prevent financial crime sothat our customers can conduct their transactions with peace of mind.
Annual Report 2023

80

Sources of Value Creation

Corporate Data

Risk Management Systems

In order to ensure the sound management and proper operations of our bank, the Management
Committee has established a basic policy on comprehensive risk management, which identifies credit
risk, market risk, liquidity risk, and operational risk as the main risks to be managed as shown in the
diagram below.
We have also created the ALM and Comprehensive Risk Management Council as a special-purpose
body within the Management Committee. This council uses interest and economic forecasts toaccurately identify market risks involving interest rates, price fluctuations, and exchange rates andquantitatively assess credit risks faced by our bank, and it discusses appropriate risk control measures
based on that analysis.
Additionally, we have established the Compliance and Operational Risk Council, the Loan
Management Council, and the Sustainability Council, each of which aids us in implementing
appropriate risk control measures based on our business situation as well as in creating profit plans
and allocating business resources while taking into account the risks we face.
ALM and Comprehensive
Risk Management Council

Compliance andOperational Risk Council

Loan Management
Council

Sustainability Council

・Market risk
・Liquidity risk
・Credit risk

・Administrative task risk
・Computer system risk
・Other operational risk

・Credit risk

・Climate-related risk

Structure Diagram（As of June 23, 2023）
Audit &
Supervisory Board

Board of Directors

Compliance andOperational Risk
Management
Committee

ALM andComprehensive
Risk Management
Committee

Incident
Investigation
Committee

Emergency
Planning
Committee

Sustainability
Council

Loan Management
Council

Sustainability
Committee

Loan Control
Department

Risk Management
Department

Marketrisk

Liquidity
riskOperational risk
Administrative
task risk

Computersystemrisk

Other operational risk
(legal, human, tangible asset,
and reputation risk)

LoanManagement
Committee

Climaterelated
risk

Independent Auditor

Management Committee
ALM andComprehensive Risk
Management Council

Internal Audit
Department

Creditrisk

Responsible head oﬃce departments
Head oﬃce, branches, group companies

In order to maintain an appropriate balance between risk and return and ensure that the risks wetake are kept to a proper size, we establish a market risk management policy every six months
taking into account the market environment and our business situation. This policy sets out the
maximum amount of risks or loss permitted for each transaction type and transaction partner, and thedepartments that handle transactions carry out their operations within those limits, make daily reports
on risk status to the responsible directors, and promptly take appropriate actions when necessary.
Additionally, we clearly separate the front-office departments that conduct transactions, the back-office
departments that perform administrative tasks for those transactions, and the middle-office departmentsthat control and manage risk so that each group provides checks and balances on the others.

Liquidity Risk Management
We establish a liquidity risk management policy each fiscal year in order to control potential risks byidentifying, analyzing, and evaluating factors that affect liquidity risk, such as changes in the external
environment.
This policy determines the limits used in managing liquidity risk, and the Risk Management
Department manages liquidity risk daily so that we will not need to procure excessive amounts offunds from the market in the future. Additionally, by maintaining a certain level of assets that can beconverted to cash in the short term, we have developed a robust system that will be able tosmoothly manage our cashflows even in unforeseen circumstances such as sudden changes in thefinancial market environment.

Operational Risk Management
We have established a basic policy on operational risk, which we manage under the categories ofadministrative task risk, computer system risk, and other operational risk (including legal, human,tangible asset, and reputation risk).
We perform a risk assessment each fiscal year to appropriately identify and assess the operationalrisks to be addressed, and the head office departments responsible for any relevant operations work
to reduce operational risk. The Risk Management Department manages and supervises the status ofrisk management by those departments to ensure effective risk management and internal checks.

Credit Risk Management
We have developed a system to identify and manage credit risk for the entire Hachijuni Bank Group,
both in Japan and overseas, in order to maintain and improve the soundness of assets that involve
credit risk.
Specifically, the Credit Risk Management Group within the Risk Management Department plans,designs, and oversees the operation of our internal rating system, including borrower ratings, andsupervises portfolio management focused on avoiding excessive concentrations of credit. The Loan
Planning and Assessment Group within the Loan Management Department operates the internalrating system, and the Screening Group, together with other related departments, appropriately
conducts individual credit management. Additionally, the Internal Audit Department audits theoperations of each department to ensure appropriate credit risk management.

Borrower rating system

Credit portfolio management

Individual credit management

Based on data such as the financial
condition or cashflow managementof borrowers, we rate them using 13
different categories and periodicallyreview those ratings each year.

We manage our portfolio to prevent
excessive risks by quantifying andascertaining our credit concentrationin major customers or certain
industry types.

We separate the departments that
perform credit screenings from thedepartments that promote sales toensure that checks and balances arefunctioning effectively. We also work
to prevent credit claims fromdeteriorating by conducting thoroughcredit monitoring on borrowers.

Development of Business Continuity Systems
Given the importance of banking services to society, we have prepared a business continuity plan sothat we are able to continue or quickly resume vital operations such as deposit withdrawals andpayment processing even in the case of a financial crisis or an earthquake, typhoon, or other natural
disaster.
We are also systematically working to improve our business continuity plan each fiscal year basedon risk assessments, and we periodically conduct emergency drills and work to increase theireffectiveness.
81

Annual Report 2023

Corporate Data

Market Risk Management

Basic Views

Compliance andOperational Risk
CouncilValue Creation Strategy

Climate-related Risk Management
We recognize the importance of climate-related risk and use our framework for handling credit andother risks to manage the impact that climate change will have on our customers. The Hachijuni
Bank Group Sustainable Investment and Lending Policy sets out our policy on initiatives regarding
sectors that are likely to be negatively affected by climate change.
Annual Report 2023

82

Sources of Value Creation

Corporate Data

Initiatives for Shareholders and Investors

Value Creation Strategy

Corporate Data

Third-Party Proposal on The Hachijuni
Bank’s Sustainability Initiatives

June 27, 2023

As we aim to achieve sustainable growth and the medium to longterm increase of our corporate value, we are working to foster
constructive dialogue with shareholders and investors, and weaccurately and promptly disclose financial information andinformation on our business activities in an easily understandableway.

NLI Research Institute, Visiting Researcher
Sun Messe Innovative Network Center (Sinc), Director & Lead
Researcher

Information
Disclosure
Policy(in Japanese)

Masahiko Kawamura

Masahiko Kawamura completed a master’s degree with the Kyushu University Graduate School ofEngineering in 1976. After working for MODEC, Inc., he joined the NLI Research Institute in 1988 andserved as the head of the ESG Research Office before taking his current position. His areas of expertise
include environmental and CSR management, integrated thinking management, SDGs, EU taxonomy, TCFD
recommendations, and scenario planning, and he has given many lectures and written numerous works.

This disclosure document has been disclosed after being reviewed by our bank, including our management team, in accordance with ourInformation Disclosure Policy.

Managing Insider Information

We have established internal rules to prevent insider trading and have developed appropriate
information management systems.

The Key to Developing Human Resources That
Determine Whether Strategies Are Achieved

Dialogue with Shareholders and Investors●The President’s Call for Employees to
Recognize the Need for Change

The President and the director responsible for the Planning and Coordination Department areleading our efforts to expand dialogue with shareholders and investors.

Internal Systems for Promoting Constructive Dialogue

The Planning and Coordination Department is responsible for investor relations, and as the liaison
office for dialogue, it cooperates with related departments to provide explanations to shareholders
and investors.

Initiatives to Expand Methods for Dialogue

In addition to legally required information disclosure, we regularly hold briefings for our shareholders
and investors.

Utilizing Shareholder and Investor Feedback

The opinions we receive through constructive dialogue with shareholders and investors are reported
to our management team and used to enhance the management of our bank.

FY2022 Investor Seminar Activities
Participants

Details (timing, location, etc.)

Japanese institutional investors, securities analysis

Financial results briefings (May and November, inTokyo); individual meetings (whenever appropriate,
online and in person)

Individual shareholders and investors

Whenever appropriate (online and in person)

Shareholder Returns
FY2020

FY2021

FY2022

FY2023(forecast)

6.8 billion yen

7.8 billion yen

9.5 billion yen

9.4 billion yen

Dividends per share (annual)

14.0 yen

16.0 yen

20.0 yen

20.0 yenInterim dividends

6.0 yen

6.0 yen

10.0 yen10.0 yen——10.0 billion yen

TBD

Shareholder returns (C) (A + B)

6.8 billion yen

7.8 billion yen

19.5 billion yen(9.4 billion yen)

Net income (consolidated) (D)22.3 billion yen

26.6 billion yen

24.1 billion yen 23.0 billion yen

Dividend payout ratio (consolidated) (A/D)

30.6%

29.3%

40.0％

40.9％

Shareholder return ratio (consolidated) (C/D)

30.6％

29.3％

80.9％

（40.9％）

Annual dividends (A)Stock buybacks (B)83

In this third-party recommendation, the third I have
prepared for The Hachijuni Bank, I will focus onhuman capital, a key strategic area.

Annual Report 2023

In President Matsushita’s message, he stated the aim
to become a vital partner to the regions you serve.
He wrote that he was shocked to see the criticalresponses given in a customer survey conducted
several years ago by the Financial Services Agency,
and that the Medium-Term Management Vision
2021 was formulated based on the recognition thateven if a bank has a high market share, it will fail if it
is not depended on by its customers.
We are no longer in an era where the bank is only
expected to meet the financing needs of regional
companies. Because of that, the President states thatmaking sustainability the core of your business,
Theme 1 of the Management Vision, begins withchanging the mindset of each employee.

●Human Capital Determines the Success ofManagement Strategies

The source of corporate value is rapidly shifting fromtangible to intangible assets, specifically humancapital, or the characteristics and skills of each
employee. Particularly in times when the businessenvironment is undergoing sudden, irregular,
structural changes, human capital determines the
success of management strategies.
The special feature in this annual report focusing on
human capital summarizes a round-table meeting
between outside directors and young employees
and discusses the bank’s views on a new age ofhuman capital. That section also states the bank’slong-term personnel policy for human resource
development and the employee characteristics
considered necessary, in addition to which it
explains how the bank is creating an environment forhuman resource development.

●Sharing A Worldview Is Essential toManagement That Leverages Human Capital

Although these are progressive measures, they aremainly based on studying operational knowledge
and advanced technology to aid employees inindependently developing their careers andincreasing their expertise, so they rely greatly oneach individual employee’s ability to improve theirown skills and knowledge.
Based on my experience as a consultant, I strongly
feel that in order for a company to create afoundation for its strategies, it is essential to have aworldview that is shared between executives andemployees as well as among the employees
themselves. As one effective method for achieving
that, I propose scenario planning throughworkshops.

Scenario Planning as a Personnel Strategy●Using“What If”Thinking To Consider the Future

The scenario analysis required under the TCFD
recommendations is based on scenario planning. In
scenario planning, each workshop participant
creates several scenarios regarding the state ofsociety in the future and then identifies the risks andopportunities present in each scenario, after which
all participants discuss and decide businessstrategies and management issues to be addressed.
In uncertain times such as these, it is dangerous forcompanies to rely on an unspoken assumption that
future society will be a certain way. Therefore, thegoal of scenario planning is to consider multiple
future possibilities and make preparations to
succeed in each of them. This is known as“what if”
thinking, a strategic thinking process developed by
Shell that considers future possibilities.
By backcasting the long-term population andindustry structure of the region against the backdropof overall currents (cause and effect relationships) inJapan and the world and using that analysis toimprove strategies and businesses focused on the
future, you can integrate sustainability with yourbusiness strategies.

●Benefits of Scenario Planning in Personnel Strategies

The greatest benefit of scenario planning in which
each participant considers what society will be like inthe future is that it helps overcome differing ways ofthinking among employees through a sense of unity
and joy shared with other participants from different
departments. Specifically, participants will expand
their perspectives by discovering possibilities they did
not imagine, in addition to which a vision of the future
can be shared between executives and employees (aswell as among employees themselves), and a sharedworldview that transcends and integrates financial
and non-financial elements can be established.
These benefits are consistent with the President’sview that“banks are facing the limits of existing
business models and are currently at a turning point
to achieve change.”This means that scenario planningcan be considered an effective human resource
approach for developing strategic thinking.
I hope that strategic planning will prove useful to yourbank as you take on challenges in creating new
businesses and providing value under your goal of“supporting customers and regions through the
combination of financial services, non-financial
services, and relationships.”

Annual Report 2023

84

Sources of Value Creation

Corporate Data

Value Creation Strategy

Corporate Data

Key Data
Human Capital
Diversity

FY2018FY2019FY2020

FY2021

FY2022FY2018FY2019FY2020

FY2021

FY2022

Total annual training hours (Note 6)

51,59049,651

39,431

55,21673,247

16.8

16.6

12.5

18.0

24.1

81,266,000 yen

65,049,000 yen

3,216

3,138

3,159

3,067

3,041

Number of female employees

1,407

1,419

1,461

1,437

1,446

Ratio of female employees

43.8％

45.2％

46.2％

46.9％

47.6％

Average age

41.9

41.6

41.3

42.4

42.3

Employees with small and medium
business consultant certification

Average years of service

15.8

15.1

15.8

16.2

15.8

Average years of service of men

17.5

17.8

17.6

18.0

17.5

Employees with grade 1 financial
planner/certified financial plannercertification

Average years of service of women

13.3

13.5

13.8

14.0

14.1

Ratio of women in management positions (Note 1)

8.8％

9.4％

10.8％

11.5％

12.5％

Ratio of women in leadership positions (Note 2)

16.6％

17.4％

18.4％

18.6％

19.8％

Pay difference between men and women (allemployees) (Note 3)

―

―

―

―

43.7％

Pay difference between men and women(permanent employees) (Note 3)

―

―

―

―

53.5％

Number of employees

Average training hours per
employee (Note 6)
Total annual training costs
Average training costs per employee

Scope 1 Direct energy consumption

70.9％

Ratio of experienced hires in management
positions (all employees hired with previous
work experience)

55.1％

53.8％

53.4％

56.0％

51.2％

2: Capital goods

Ratio of experienced hires among permanent
employees

8％

5％

6％

14％

11％

Ratio of employees with disabilities

2.01％

1.96％

2.03％

2.25％

2.38％

Ratio of employees resigning voluntarily

3.2％

3.2％

2.2％

3.8％

2.7％

FY2020

FY2021

FY2022

13.3

13.3

13.9

14.3

15.9

Ratio of leave used

69.6％

69.4％

72.0％

74.1％

81.5％

Ratio of men taking childcare leave, etc. (Note 4)

28.8％

30.4％

35.9％

60.3％

89.5％

Average statutory overtime hours (per month)

9.4

10.1

8.9

10.6

10.8

Average days of paid leave taken

Note 4: The ratios calculated include both childcare leave under the Childcare and Family Care Leave Act and our bank’s own system of childcare leave.
Corporate health

Ratio of employees undergoing recommended
follow-up tests

FY201883.1％

FY201978.4％

FY202085.7％

FY202184.7％

FY2022

82.2％(Note 5)

Ratio of employees receiving special healthguidance offered

68.9％

62.7％

49.4％

86.4％

78.0％(Note 5)

Ratio of employees with BMI of 25 or more(indicating obesity)

20.3％

20.2％

20.5％

19.8％

18.6％

Ratio of employees who smoke

13.2％

13.0％

11.9％

12.1％

11.9％

Ratio of employees completing stress survey

99.5％

98.5％

97.9％

98.6％

99.2％

Note 5: Provisional figures

Annual Report 2023

(CO₂ emissions in supply chain)―

FY201933,100 yen

85,500 yen

53

51

53

57

94

98

96

101

129

(Unit: tons CO₂)
FY2018

5: Waste generated bybusiness

FY2021

FY2022

2,661

2,689

2,484

2,379

Stationery, printer paper,
water/sewage services, etc.

9,162

7,894

7,352

6,326

5,681

2,872

2,600

2,238

5,680

6,102

3,413

6,985

5,426

7,987

8,209

1,040

1,549

1,724

1,629

1,537

Postage fees, shipping

744

1,526

1,849

1,949

2,631

All waste

52

41

123

71

92

570

522

511

481

498

1,616

1,478

1,444

1,352

1,350

―

―

― 10,182,924

8,656,029

All bank buildings, suspense
accounts for buildings,
other tangible fixed assets

6: E nergy consumption
Business trips
from employee transit
7: Employee commuting Commuting
15: Investment (Note 8)

FY20202,755

3: A ctivities related to fuel Fuel oil, kerosene, town
and energy not included gas, gasoline, propane,in scope 1 and 2
electricity
4: Shipping and delivery(upstream)

FY2019Fuel oil, kerosene, towngas, gasoline, propane

Scope 2 Indirect energy consumption Electricity―

FY2018

20,100 yen

54

Greenhouse gas emissions―

Work-life balance

63,493,000 yen 101,402,000 yen 259,937,000 yen

20,700 yen

Environment―

Note 1: Calculated using the total number of employees who hold the rank of section manager or higher (excluding directors and executive officers).
Note 2: Calculated using the total number of employees who hold the rank of deputy manager (sub-section manager) or who are in management positions.
Note 3: Calculated as the ratio of female employee pay to male employee pay.

25,300 yen

Note 6: Excluding hours of voluntary training.

Scope 3 1: Purchased products(Note 7)and services

Pay difference between men and women (parttime and contract employees) (Note 3)85

Human resource development

Lending for domestic
business corporations

Note 7:	We used the scope 3 emission calculation methods and emission factors set out in version 2.5 of the “Basic Guidelines on
Accounting for Greenhouse Gas Emissions throughout the Supply Chain” (released by the Ministry of the Environment and the Ministryof Economy, Trade and Industry in March 2023) and version 3.3 of the “Emission Intensity Database for Calculating an Organization’s
Greenhouse Gas Emissions through the Supply Chain” (released by the Ministry of the Environment in March 2023). We calculated
zero emissions for categories 8 to 14 of scope 3.
Note 8:	We began calculating scope 3, category 15 emissions in FY2021 (please see p.59 for details).
Note 9:	These emission volumes have received third-party certification from BSI Group Japan K.K.
Note 10:	The total of scope 1 and 2 greenhouse gas emissions calculated for The Hachijuni Bank Group as a whole (excluding the Nagano
Bank, Ltd., the Nagagin Leasing Corporation, and Nagano Card Co., Ltd.) is 8,472 tCO₂.
(Unit: kWh/year)
Electricity consumed

FY2018

Standard electricity

18,552,202

0

Shinshu Green Power
RenewableenergyOther carbon-freeenergyBiomass

Total

FY2019087,396

18,639,598

FY2020

FY2021

FY2022

17,311,864

16,683,586

15,610,813

13,892,438

0

0

6,209

53,471087,18017,399,044

364,987

88,022

17,136,595

661,242

85,657

16,363,921

1,226,869

75,775

15,248,553(Unit: billions of yen)

Sustainable finance provided

Results(Amount in environmental field)

FY2021

FY2022

155.4
83.0

Total

255.5

128.8

410.9

211.8

Annual Report 2023

86

Corporate Data

Financial Section

Locations(As of May 31, 2023)

Consolidated Balance Sheet March 31, 2023
Thousands of U.S. Dollars(Note 1)Millions of Yen
2023
ASSETS:Cash and due from banks (Note 5)
Call loans and bills bought
Monetary claims bought
Trading assets (Notes 6, 13 and 28)
Money held in trust (Notes 7 and 13)
Securities (Notes 8, 13 and 27)
Loans and bills discounted (Notes 9, 13, 27 and 29)
Foreign exchanges (Note 10)
Lease receivables and investments in leases (Note 26)
Other assets (Note 13)
Property, plant, and equipment—net (Note 11)
Intangible assets—net (Note 11)
Asset for employees' retirement benefits (Note 16)
Deferred tax assets (Note 25)
Customers' liabilities for acceptances and guarantees (Note 12)
Allowance for credit losses

Overseas
2 branches(Hong Kong and Singapore)
2 representative offices(Shanghai and Bangkok)

Niigata Prefecture
4 branches

Nagano Prefecture
122 branches(including head office),
9 sub-branches

TOTAL

1 branchGunma Prefecture

Osaka Prefecture

2 branches

1 branch

Saitama Prefecture
5 branches

Aichi PrefectureTokyo

1 branch

6 branches

LocationsJapan

Non-branch ATMs

219 (214)Sub-branches

9 (9)Lawson Bank ATMs

13,485 (164)

Japan total

151 (131)*

E-net ATMs

11,992 (145)

2 (Hong Kong and Singapore)

Seven Bank ATMs

25,382 (489)

2 (Shanghai and Bangkok)

Total

Overseas total

4

Total

155

Numbers in parentheses indicate locations in Nagano Prefecture.
*13 branches have been relocated or consolidated using the branch-in-branch format.

87

Annual Report 2023

The Hachijuni
Bank network(in Japanese)

142 (122)

Overseas Representative offices¥

3,600,693
14,978126,212
18,77378,877
2,676,695
6,113,178
28,25569,848
147,534
32,284
4,499
45,397
1,622
49,474(44,527)¥

4,049,642
20,000116,411
13,37079,4482,801,655
5,931,315
30,546
68,041
152,789
34,3784,628
42,803
1,780
38,113(41,129)$

26,967,449
112,182
945,267
140,602590,754
20,047,146
45,784,738
211,619
523,132
1,104,963
241,796
33,702340,005
12,152
370,538(333,487)¥

12,963,799¥

13,343,796$

97,092,564

LIABILITIES:
Deposits (Notes 13, 14 and 27)
Negotiable certificates of deposit (Note 27)
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions (Note 13)
Trading liabilities (Notes 6 and 28)
Borrowed money (Notes 13, 15 and 27)
Foreign exchanges (Note 10)
Borrowed money from trust account
Other liabilities
Liability for employees' retirement benefits (Note 16)
Provision for reimbursement of deposits
Provision for contingent losses
Reserve under special laws
Deferred tax liabilities (Note 25)
Acceptances and guarantees (Note 12)¥8,168,035
79,133
1,492,164
102,282
332,031
6,672
1,559,655
1,503
784
129,223
11,247271
1,217
12114,134
49,474¥

8,049,875
132,507
1,504,861
53,041
322,484
4,279
2,087,634
960
360
108,104
11,653499
1,341
12
115,367
38,113$

61,174,625
592,674
11,175,586
766,0492,486,751
49,974
11,681,063
11,2595,876
967,821
84,238
2,035
9,115
93
854,810
370,538

Total liabilities

ATMs

Branches

2023

LIABILITIES AND EQUITY

Gifu Prefecture

Branches (including head office)2022

12,047,845

12,431,097

90,232,514

52,24356,960288
519,053

52,24359,176271
512,403391,276
426,609
2,157
3,887,460(10,848)(11,576)(81,250)

267,636
16,305
11,485

268,743
15,67012,2662,004,466
122,12286,020913,124

909,198

6,838,863

Noncontrolling interests

2,828

3,499

21,187

Total equity

915,953

912,698

6,860,050

EQUITY (Notes 17 and 32):
Common stock—authorized,
2,000,000 thousand shares; issued,
491,103 thousand shares in 2023
511,103 thousand shares in 2022
Capital surplus
Stock acquisition rights (Note 18)
Retained earnings
Treasury stock—at cost, 19,669 thousand sharesin 2023 and 21,445 thousand shares in 2022
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gain on hedges
Defined retirement benefit plans
Total

51,078 (1,012)

Numbers in parentheses indicate ATMs in
Nagano Prefecture.

TOTAL

¥

12,963,799¥

13,343,796$

97,092,564

See notes to consolidated financial statements.

ANNUAL REPORT 2 0 2 3

88Thousands
Number of
Shares ofCommon Stock
Outstanding
511,103511,103(20,000)

491,10352,24352,24352,24352,243

Common
Stock
¥

¥

¥

¥

56,960732(2,948)59,176(5)

59,181

59,181

CapitalSurplus

¥

¥

288

16

271

272

272

Stock
Acquisition
Rights¥¥519,053(5)(7,749)24,135(9,729)512,403

26,667(6,854)

492,589(279)

492,869

Retained
Earnings¥¥¥

14,594

14,594

DefinedRetirement
Benefit Plans

Accumulated Other Comprehensive Income

Millions of Yen

4,426

DeferredGain onHedges
¥

4,426

¥

Total
¥

Noncontrolling
Interests

3,402

3,402

906,291(279)
906,012¥

Total
Equity909,694(279)
909,414
26,667(6,854)
48(16,578)

26,667(6,854)

912,698
24,135(9,729)(10,000)
24$ 6,835,667

Total
Equity915,953(1,906)24,135(9,729)(10,000)
24

¥

2,828

913,124

Noncontrolling
Interests
26,208

Total(1,236)732

96

DefinedRetirement
Benefit Plans

732

3,499

¥

48
(16,674)

DeferredGain onHedges(670)

909,198¥(2,327)

11,485(781)

12,266¥

11,243

16,305635

15,670¥(25,590)

267,636(1,107)

268,743294,333

294,333

Valuation
Difference on
Available-for-Sale
Securities(10,848) ¥(10,000)
29
10,698(11,576)53(11,629)(11,629) ¥Treasury
Stock

Consolidated Statement of Changes in Equity Year Ended March 31, 2023

BALANCE, MARCH 31, 2021
Cumulative effects of changes in accounting policies
BALANCE AS OF THE BEGINNING OF THE PERIODREFLECTING CHANGES IN ACCOUNTING POLICIESNet income attributable to owners of the parent
Cash dividends, ¥14.00 per share
Purchases of treasury stock
Disposals of treasury stock
Net change during the period
BALANCE, MARCH 31, 2022
Net income attributable to owners of the parent
Cash dividends, ¥20.00 per share
Purchases of treasury stock
Disposals of treasury stock
Cancellation of treasury stock
Purchase of shares of consolidated subsidiaries
Net change during the period
BALANCE, MARCH 31, 2023

Valuation
Difference on
Available-for-Sale
Securities

Accumulated Other Comprehensive Income

Thousands of U.S. Dollars (Note 1)

TreasuryStock$

171,377
1,411$ 6,809,458$

91,871

9,993
103

$

¥

117,363

22,882
188$¥(86,698) $ 2,012,758

180,760(72,868)(74,899)
181

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests

180,760(72,868)(74,899)
181

172,788(74,899)
224
80,123$

5,489(14,280)

10,097(5,021)¥

5,489(9,258)23,070Retained
Earnings595$ 6,860,050

¥

Stock
Acquisition
Rights182

21,187COMPREHENSIVE INCOME

CapitalSurplus79(5,850)(8,566)

CommonStock

181,355

4,759(16,752)$

26,850(8,291)(1,143)$ 3,837,651

24,214$

Total other comprehensive income (loss)

2,033

78,889$ 6,838,863(7,473)
4,759(5,852)$

11,20486,020(25,662)
11,243(2,334)443,202

10,533

$

(997)
635
(781)

$

82,514(3,624)

122,122OTHER COMPREHENSIVE LOSS (Note 30):
Unrealized loss on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Defined retirement benefit plans

391,276

8,950
2,254

$

Consolidated Statement of Comprehensive Income Year Ended March 31, 2023$

11,017(483)$ 2,004,466

See notes to consolidated financial statements.

BALANCE, MARCH 31, 2022

INCOME TAXES (Note 25):
Current
Deferred$ (81,250)

See notes to consolidated financial statements.

181,355$
26,850¥24,214¥NET INCOME

2023
2022
2023

Thousands of U.S. Dollars(Note 1)Millions of Yen

180,760
$

0.37
0.37
0.14
$
54.46
54.39
16.00
¥
49.90
49.83
20.00
¥
PER SHARE OF COMMON STOCK (Note 31):
Basic net income
Diluted net income
Cash dividends applicable to the year

180,760(72,868)

260,245NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

U.S. Dollars
Yen

(42)
(58,040)

38,055NET INCOME

26,667124

34,747

Total income taxes¥(22,082)
5,489

INCOME BEFORE INCOME TAXES
Total expenses

24,135¥NET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT

Net income attributable to owners of the parent
Cash dividends, $0.14 per share
Purchases of treasury stock
Disposals of treasury stock
Cancellation of treasury stock
Purchase of shares of consolidated subsidiaries
Net change during the period

1,267,326$ 3,887,460

114,056

2,157

169,213$

21,28552,97961,35940,375523,947
424,143
31,780111,456

426,609

600
521
3,195
5,600
37,26354,0381,800
11,034

$

2,842
7,073
8,192
5,390
69,95756,631
4,243
14,881

391,276

1,527,572$

152,112
Total income

372,241
273,684
34,350169,278
7,203
528,796
142,017$
41,893
26,9893,920
22,0182,063
44,177
11,050¥49,70136,542
4,586
22,602961
70,60418,962¥
INCOME (Note 19):
Interest income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Trading income
Other operating income (Note 20)
Other income (Note 21)

90
ANNUAL REPORT 2 0 2 3
ANNUAL REPORT 2 0 2 3

89203,961
EXPENSES:Interest expenses:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commission payments
Other operating expenses (Note 22)
General and administrative expenses (Note 23)
Provision for credit losses
Other expenses (Note 24)

BALANCE, MARCH 31, 2023

Millions of Yen

2023
2022
2023

Thousands of U.S. Dollars(Note 1)

See notes to consolidated financial statements.

Consolidated Statement of Income Year Ended March 31, 2023

Consolidated Statement of Cash Flows Year Ended March 31, 2023
Thousands of U.S. Dollars(Note 1)Millions of Yen
2023
OPERATING ACTIVITIES:
Income before income taxes¥

34,7472022¥

38,0552023$

260,245

Adjustments for:
Income taxes—paid(8,476)(13,022)(63,481)

Depreciation and amortization

5,543

5,560

41,518

Impairment losses

1,669

302

12,506

Increase (decrease) in allowance for credit losses

3,397(4,221)

25,445Interest income(90,830)(72,803)(680,276)Interest expense

18,1084,318

135,624

Interest received

90,42274,871

677,222

Interest paid

(14,211)(4,257)(106,436)

Net increase in loans and bills discounted(181,862)(390,161)(1,362,060)

Net increase (decrease) in borrowed money(527,979)

448,515(3,954,306)

Net increase in deposits

118,160

395,556

884,968

Net increase in call loans and bills bought(4,778)(8,208)(35,790)

Net increase in call money and bills sold

36,544

803,530

273,696

Net decrease in due from banks, excluding due from the Bankof Japan

3,980

6,987

29,813

Net increase (decrease) in payables under securities lendingtransactions

9,546(462,294)

71,496(82,459)(12,548)(617,583)

Total adjustments(623,223)

772,125(4,667,645)

Net cash provided by (used in) operating activities(588,475)

810,181(4,407,399)

Other—net

INVESTING ACTIVITIES:
Purchases of investment securities(1,014,316)(458,351)(7,596,734)

Proceeds from sales of investment securities

881,742678,233

6,603,820

Proceeds from maturities of investment securities

299,168

284,434

2,240,628

Payments for increase in money held in trust(89,552)(7,240)(670,706)

Proceeds from decrease in money held in trust

89,785

8,357

672,447

Purchases of fixed assets(7,367)(8,224)(55,181)

Proceeds from sales of fixed assets

3,895

2,135

29,178163,355

499,343

1,223,451

Net cash provided by investing activities
FINANCING ACTIVITIES:Payments to acquire treasury stock(10,000)(74,899)

Proceeds from sales of treasury stock
Dividends paid
Dividends paid to noncontrolling interests
Payments of changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation(6,854)(72,868)

(7)

(7)

(56)

(118)

Net cash used in financing activities(887)(19,855)

EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS(6,862)(148,710)

8

7

61

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(444,968)

1,302,670(3,332,597)

CASH AND CASH EQUIVALENTS, BEGINNING OF
FISCAL YEAR

4,025,083

2,722,413

30,145,924

CASH AND CASH EQUIVALENTS, END OF FISCALYEAR (Note 6)
See notes to consolidated financial statements.

91(9,729)ANNUAL REPORT 2 0 2 3¥

3,580,115¥

4,025,083$

26,813,327

Notes to Consolidated Financial Statements Year Ended March 31, 2023
1. BASIS OF PRESENTATION OF CONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Act and its
related accounting regulations and the Enforcement
Regulation for the Banking Law, and in accordance withaccounting principles generally accepted in Japan (JapaneseGAAP), which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards (IFRS).
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in orderto present them in a form that is more familiar to readers
outside Japan. In addition, certain reclassifications have been
made in the 2022 consolidated financial statements to conformto the classifications used in 2023.
All Japanese yen figures in the consolidated financial
statements have been rounded down to the nearest million
yen. Accordingly, the total of each account may not be equal tothe combined total of the individual items.
The consolidated financial statements are stated in Japaneseyen, the currency of the country in which The Hachijuni Bank,
Ltd. (the "Bank") is incorporated and operates. The translationsof Japanese yen amounts into U.S. dollar amounts are included
solely for the convenience of readers outside Japan and havebeen made at the rate of ¥133.52 to $1, the rate of exchange at
March 31, 2023. Such translations should not be construed as
representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES
a. Consolidation—The consolidated financial statements as ofMarch 31, 2023, include the accounts of the Bank and its 13(11 in 2022) significant subsidiaries (together, the "Group").
Under the control and influence concepts, those companies
in which the Bank, directly or indirectly, is able to exercise
control over their operations are fully consolidated.
Investments in 6 (6 in 2022) unconsolidated subsidiaries
and in 1 (2 in 2022) associated companies are stated at cost,and are included in securities in the consolidated financial
statements. If the equity method of accounting had been
applied to the investments in these companies, the effect on
the accompanying consolidated financial statements would
not be material.
All significant intercompany balances and transactions havebeen eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within
the Group is eliminated.
The following companies which the Group holds voting
rights of between 20% and 50% are not affiliates accounted
for by the equity method, because the capital contribution
was made for the purpose of including their investees or
earning capital gains, and not for the purpose of owing theseinvestees under its control through operational, personnel,
capital or other form of transactions.

As of March 2023
Rubicon holdings Co., Ltd.
Ogihara manufacturing Co., Ltd.
b. Cash Equivalents—For the purpose of reporting of cash
flows, "Cash and cash equivalents" consists of "Cash" and"Due from the Bank of Japan."c. Trading Assets and Liabilities—Transactions for trading
purposes (for purposes of seeking to capture gains arisingfrom short-term changes in interest rates, currency exchange
rates, or market prices of securities and other market-related
indices or from gaps among markets) are included in"Trading assets" and "Trading liabilities" on a trade-datebasis.
Trading securities and monetary claims bought for trading
purposes are stated at fair value at the consolidated balance
sheet date. Trading-related financial derivatives, such as
swaps, futures, and options are stated at amounts that would
be received or paid for settlement if such transactions were
terminated at the consolidated balance sheet date.
Trading income includes interest received and paid during
the fiscal year and unrealized gains and losses resulting fromthe change in the value of securities, monetary claimsbought, and derivatives between the consolidated balance
sheet dates.
For financial derivatives, the fair value of each group offinancial assets and financial liabilities is calculated based on
the net assets or liabilities of financial assets and financial
liabilities offset with respect to specific market risks or
specific credit risks.
d. Securities—Securities other than investments inunconsolidated subsidiaries and associated company areclassified into three categories, based principally on theGroup's intent, as follows: (a) trading securities are securities
held in anticipation of gains arising from short-term changes
in market value and/or held for resale to customers and are
carried at fair value with corresponding unrealized gains andlosses recorded in income; (b) held-to-maturity debt
securities, which are expected to be held to maturity withthe positive intent and ability to hold to maturity, are stated
at amortized cost computed using straight-line method; and(c) available-for-sale securities, which are not classified aseither of the aforementioned securities. Marketableavailable-for-sale securities are stated at fair value withunrealized gains and losses, net of applicable taxes, reported
in a separate component of equity. Effective April 1, 2021,
the Group applied Accounting Standards Board of Japan("ASBJ") Statement No. 30, "Accounting Standard for Fair
Value Measurement" and ASBJ Guidance No. 31,"Implementation Guidance on Accounting Standard for Fair
Value Measurement," and revised related ASBJ Statements
and ASBJ Guidance (the "New Accounting Standards").
Under the New Accounting Standards, nonmarketableavailable-for-sale equity securities are stated at cost, while
under the previous accounting standards, nonmarketableavailable-for-sale securities are stated at cost.
In addition, investments in unconsolidated subsidiaries andassociated company that are not accounted for by the equity
method are carried at cost determined by the movingaverage method.
Individual securities are written down when a decline in fairvalue below the cost of such securities is deemed to be otherthan temporary.
e. Securities in Money Held in Trust—Securities included in"Money held in trust" are stated at fair value.
f. Property, Plant, and Equipment—Property, plant, andequipment are stated at cost less accumulated depreciation.
Depreciation for buildings and equipment of the Group iscomputed under the declining-balance method at rates
based on the estimated useful lives, which are principallyfrom 3 to 50 years for buildings and from 3 to 20 years forequipment.

ANNUAL REPORT 2 0 2 3

92

g. Software—Capitalized software for internal use isdepreciated using the straight-line method over its estimateduseful life (principally five years).
h. Long-Lived Assets—The Group reviews its long-lived assets
for impairment whenever events or changes incircumstances indicate the carrying amount of an asset or
asset group may not be recoverable. An impairment loss
would be recognized if the carrying amount of an asset or
asset group exceeds the sum of the undiscounted future cash
flows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss
would be measured as the amount by which the carrying
amount of the asset exceeds its recoverable amount, whichis the higher of the discounted cash flows from thecontinued use and eventual disposition of the asset or the
net selling price at disposition.
i. Allowance for Credit Losses—The allowance for credit losses
is recorded as follows in accordance with predetermined
amortization and allowance standards.
Bankrupt:
Borrowers in which facts of legal or formal management
failure have occurred, such as bankruptcy, corporate
rehabilitation, and transaction suspension at a clearinghouse
Defacto Bankrupt:
Borrowers who are unable to meet their obligations
In danger of bankruptcy:
Borrowers who are not currently in a state of bankruptcy
but are likely to fall into bankruptcy in the future
Need Special Attention:
Borrowers who need to manage all or part of the loans
requiring attention (loan conditions relaxed loans andloans overdue for three months or more)
Need Attention:
Borrowers who have problems with lending conditions orrepayment performance, business conditions are sluggish
or unstable, and need to be managed in the future
Normal:Borrowers with good performance and no financial problems(a) Loans to "Bankrupt" and "Defacto Bankrupt," Loans inexcess of collateral are recorded for any amounts that
may not be recovered.
(b) Loans to "In danger of bankruptcy," the expected amountof collateral disposal and the expected amount ofrecovery by guarantee are deducted from the amount of
the loan. Of the remaining balance (hereinafter referred
to as "non-conservation amount"), the amount deemednecessary is recorded.
For large borrowers with a certain amount of credit or
more, the Bank estimates the allowance for loan losses
by the method below.
(1) The Bank comprehensively judges a borrower's
situation and estimates a recoverable amount by cash
flow ("the collectible amount from cash flow
method").
(2) The allowance for loan losses is the balance of
non-conservation amounts less the recoverable
amounts estimated step 1.
For debtors of debtors other than those mentioned
above, an allowance for loan losses is provided bymultiplying the non-conservation amount by the
expected loss rate calculated from the Bankruptcy
probability from past periods.
(c) For loans to "Need Special Attention" and "Need
Attention," the difference between the cash flow "thediscounted cash flow method" discounted at the originalcontracted interest rate and the carrying amount of thereceivable would be recorded as the allowance for loan
losses.

93

ANNUAL REPORT 2 0 2 3(d) For loans to "Need Special Attention" and "Need
Attention" other than (c), and "Normal," the allowance
for loan losses is recorded based on the expected loss
rate calculated from the probability of bankruptcy in thepast certain period.
(Note 1)Grouping in calculating the probability ofbankruptcy
The probability of bankruptcy is allocated to six
categories, including one normal division, three"Need Attention" divisions and two bankruptcy
concerns.
"Need Attention" divisions are classified
according to the comprehensive judgment of
the creditworthiness of the borrowers and theexistence of loans with relaxed loan terms.
(Note 2)A certain period in which the expected loss rate
will be estimated in the future
Allowance for doubtful accounts is determinedbased on the expected loss rate for normal loans
over the next one year and for loans requiring
attention over the period corresponding to theaverage remaining life of the loans. The averageremaining period is 41 months for top level of"Need Attention," 41 months for lower level of"Need Attention" and 36 months for "NeedSpecial Attention."(Note 3)Changes in the probability of bankruptcy
probability and future prospects
The probability of bankruptcy used to calculate
the allowance is determined by comparing the
average value of the last three determination
periods with the long-term average value,considering the entity's business cycle. The
average value for the three most recent
determination periods is calculated by including
necessary revisions such as the current
circumstances and future projections.
Based on the self-assessment standard of assets, allreceivables are assessed by the asset assessment department,
which is independent from the sales department, and theinternal audit department provides an assessment of theseresults.

n. Stock Options—The cost of employee stock options ismeasured based on the fair value at the date of grant andrecognized as compensation expense over the vesting period
as consideration for receiving goods or services. In the
consolidated balance sheet, stock options are presented as
stock acquisition rights as a separate component of equity
until exercised.

instruments in accordance with the strict hedging criteria forexternal mirror transactions stipulated in the Industry
Committee Practical Guidelines No. 24 and No. 25.
Therefore, the Bank accounts for the gains and losses onthese swap transactions in its earnings or defers until
maturity as deferred gain (loss) under hedge accounting in a
separate component of equity.

o. Revenue Recognition—The Group recognizes revenue in an
amount that reflects the consideration to which it expects tobe entitled in exchange for satisfying performanceobligations to transfer the goods or services promised incontracts with customers.

The interest rate swaps that qualify for hedge accounting
and meet specific matching criteria are not measured at fairvalue but the net payments or receipts under the swap
agreements are recognized and included in interest expense
or income.

p. Leases—Finance leases that are deemed to transfer
ownership of the leased property to the lessee arerecognized as lease receivables, and finance leases that are
not deemed to transfer ownership of the leased property to
the lessee are recognized as investments in lease.

t. Per Share Information—Basic net income per share ("EPS")
is computed by dividing net income available to commonshareholders by the weighted-average number of commonshares outstanding for the period, retroactively adjusted forstock splits.

j. Asset and Liability for Employees' Retirement Benefits—The
Group has a contributory funded pension plan andnoncontributory unfunded retirement benefit plans,
together covering substantially all of their employees.

The hedging derivative instruments must be highly effectivein achieving offsetting changes in fair values or variable cash
flows from the hedged items attributable to the risk being
hedged.

The Bank accounts for the liability for retirement benefits
based on the projected benefit obligations and plan assets atthe balance sheet date. The projected benefit obligations are
attributed to periods on a benefit formula basis. Actuarial
gains and losses that are yet to be recognized in profit or loss
are recognized within equity (accumulated othercomprehensive income), after adjusting for tax effects andare recognized in profit or loss over 10 years no longer thanthe expected average remaining service period of theemployees.

The Group adopted portfolio hedging in accordance with
Industry Committee Practical Guidelines No. 24 issued by
the Japanese Institute of Certified Public Accountants("JICPA"). Under portfolio hedging, a portfolio of hedged
items, such as deposits or loans with common maturities, ismatched with a group of hedging instruments, such as
interest rate swaps, which offset the effect of fair value
fluctuations of the hedged items by identified maturities.
The effectiveness of the portfolio hedge is accessed by eachgroup.

k. Provision for Reimbursement of Deposits—A provision forreimbursement of deposits, which were derecognized asliabilities under certain conditions, is provided for possible
losses on future claims of withdrawal based on historicalreimbursement experience.
l. Provision for Contingent Losses—A provision for contingent
losses is provided for the contribution to the National
Federation of Credit Guarantee Corporations' liability sharing
program and is recorded in the amount of estimated futurecontributions based on subrogate performance, etc.
m.Reserve under Special Laws—A reserve under special laws isprovided for contingent liabilities from brokering of
securities or derivative transactions in accordance with
Article 46-5 of the Financial Instruments and Exchange Act.

q. Income Taxes—The provision for income taxes is computed
based on the pretax income included in the consolidated
statement of income. The asset and liability approach is used
to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying
currently enacted income tax rates to the temporary
differences.
r. Foreign Currency Transactions—Assets and liabilities
denominated in foreign currencies held domestically andthe accounts of the Bank's overseas branch are translated
into Japanese yen generally at the exchange rates prevailingon the consolidated balance sheet date.
s. Derivatives and Hedging Activities—Derivatives are stated atfair value. Derivative transactions that meet hedge
accounting criteria are primarily accounted for under thedeferral method whereby unrealized gains and losses aredeferred until maturity as deferred gain (loss) under hedge
accounting in a separate component of equity. The market
value of financial derivatives reflects specific market risk or
specific credit risk on the basis of net assets or liabilities after
offsetting the relevant financial assets and liabilities.

Currency swap and foreign exchange swap transactions areaccounted for using deferral hedge accounting by fully
applying Industry Committee Practical Guidelines No. 25
issued by the JICPA. Under deferral hedge accounting,hedged items are identified by grouping the foreign
currency-denominated financial assets and liabilities by
currencies and designating derivative transactions, such as
currency swap transactions and forward exchange contracts
as hedging instruments. Hedge effectiveness is reviewed bycomparing the total foreign currency position of the hedged
items and hedging instruments by currency.
With respect to derivative transactions between consolidated
subsidiaries or internal transactions between trading
accounts and other accounts, the Bank manages interest rate
swap and currency swap transactions designated as hedging

Diluted EPS reflects the potential dilution that could occur if
securities were exercised or converted into common stock.
Diluted EPS of common stock assumes full conversion of theoutstanding convertible notes and bonds at the beginning of
the year (or at the time of issuance) with an applicableadjustment for related interest expense, net of tax, and full
exercise of outstanding warrants.
Cash dividends per share presented in the accompanying
consolidated statement of income are dividends applicableto the respective years including dividends to be paid after
the end of the fiscal year.
u. Significant Income and Expenses—The Group applies"Accounting Standards for Revenue Recognition" (ASBJ
Guidance No. 29, March 31, 2020) and recognizes revenue atthe time in exchange for transferring promised goods orservices to a customer, and the amount expected to bereceived in exchange for goods or services.

3. SIGNIFICANT ACCOUNTING ESTIMATE
Allowance for Credit Losses(a) Allowance for credit losses was ¥44,527 million($333,487 thousand) and ¥41,129 million as of March
31, 2023 and 2022, respectively.
Allowance for credit losses by "the collectible amountfrom cash flow method" was ¥17,402 million ($130,339
thousand) and ¥12,698 million as of March 31, 2023 and2022,respectively.
Allowance for credit losses by "the discounted cash flow
method" was ¥3,360 million ($25,171 thousand) and¥3,078 million as of March 31, 2023 and2022,respectively.
(b) Information that contributes to understanding thecontent of significant accounting estimates for theidentified item
(1) Determination method
The allowance for credit losses is recorded inaccordance with predetermined amortization andallowance standards.
(2) Key assumptions(i) The business plan used to determine debtor
classification and used to estimate future cash
flow by "the collectible amount from cash flow
method" and "the discounted cash flow method"
Sales forecast, expense forecast and future
outlook for debt repayment plan in the businessplan are assumed as follows:･Period affecting business performance in theindustry or industry to which the debtor belongs･Market growth potential and market price trends
in the industry or industry to which the debtor
belongs

ANNUAL REPORT 2 0 2 3

94

4. ACCOUNTING CHANGE

7. MONEY HELD IN TRUST"Application Guidelines for Accounting Standards for Market
Value Calculation" (Corporate Accounting Standards
Application Guideline No. 31, June 17, 2021, Corporate
Accounting Standards Committee)(1) Overview
The amendment of "Guidelines for Applying AccountingStandards for Calculation of Market Value" (Guidelines
for Applying Corporate Accounting Standards, Corporate
Accounting Standards Committee No. 31) on June 17,
2021, was made at the time of publication on July 4,
2019. Discussion with related parties regarding theapplication requires time. In examining the “Calculationof market value of investment trust,” and “Investing in aunion that records the amount equivalent to equity inthe balance sheet in net amount,” it takes about one year
after the publication of the "Accounting Standards for
Calculation of Market Value" because it requires a certain
amount of consideration for the note on the market
value.
(2) Expected application date
It was applied from the beginning of the fiscal year
ended March 2023.
(3) Impact of application of the accounting standard
There is no impact of the application of the "Guidelines
for Applying Accounting Standards for Calculation ofMarket Value" on the consolidated financial statements.

5. CASH AND CASH EQUIVALENTS
The reconciliation of "Cash and cash equivalents" in the
consolidated statement of cash flows and "Cash and due frombanks" in the consolidated balance sheet as of March 31, 2023
and 2022, was as follows:
Millions of Yen

Thousands of
U.S. Dollars

2023

2022

2023

Cash and due from banks
Due from banks,
excluding amounts duefrom the Bank of Japan¥ 3,600,693¥ 4,049,642$ 26,967,449(20,578)(24,559)(154,122)

Cash and cash equivalents¥ 3,580,115¥ 4,025,083$ 26,813,327

Trading assets:
Trading securities
Financial derivatives
Other trading assets
Total

¥

¥

Trading liabilities—Financial derivatives ¥¥18,773¥

6,672

Thousands of
U.S. Dollars

2022

680
7,094
10,998

¥

2023

731
4,640
7,998

$

13,370$ 140,602

4,279

Thousands of
U.S. Dollars

Millions of Yen
2023
Money held in trust—Trading¥

78,877

¥

2022

2023

79,448$ 590,754$

5,095
53,13582,37049,974

8. SECURITIESSecurities as of March 31, 2023 and 2022, consisted of thefollowing:Thousands of
U.S. Dollars

Millions of Yen
2023
Securities:
National government bonds ¥Local government bonds
Corporate bonds
Equity securities
Other securities
Total

546,802341,933
592,816
526,133
669,008¥ 2,676,695

2022

2023

820,653
308,214524,690499,572648,525$ 4,095,287
2,560,915
4,439,907
3,940,485
5,010,550¥ 2,801,655$20,047,146¥

The securities placed under unsecured lending agreements areincluded in the above national government bonds in theamount of ¥79,354 million ($594,322 thousand) and ¥193,771
million as of March 31, 2023 and 2022, respectively.
Guarantee obligations for bonds in private placement (definedin Article 2 (3) of Financial Instruments and Exchange Act)
included in securities were ¥53,636 million ($401,709
thousand) and ¥53,313 million as of March 31, 2023 and 2022,
respectively.
In the following description, in addition to "Securities" in the
consolidated balance sheet, beneficial interests in trust
investments are also presented within the item "Monetaryclaims bought."

March 31, 2023

Cost

Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other securities
Held-to-maturity¥ 94,380
1,509,486
700,906
99

Unrealized Unrealized
Gains
LossesFair
Value¥ 420,997
8,130
12,170¥ 514,853
1,481,452
693,542100¥

524
36,163
19,534

March 31, 2022
Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Other securities
Held-to-maturity¥ 97,425
1,659,048
686,42699¥ 395,969
15,60919,9801¥

609
21,19923,267¥ 492,786
1,653,457
683,140
101

Thousands of U.S. Dollars

95

ANNUAL REPORT 2 0 2 3

9. LOANS AND BILLS DISCOUNTED
Loans and bills discounted as of March 31, 2023 and 2022,
consisted of the following:

Millions of Yen

Trading assets and liabilities as of March 31, 2023 and 2022,
consisted of the following:

2023

Fair Value

The carrying amounts and aggregate fair value of the securities
as of March 31, 2023 and 2022, are as follows:

6. TRADING ASSETS AND LIABILITIESMillions of Yen

The aggregate fair value of money held in trust that is listed on
stock exchanges or over-the-counter markets as of March 31,
2023 and 2022, is as follows:

Proceeds from sales of available-for-sale securities for the years
ended March 31, 2023 and 2022, were ¥843,498 million($6,317,392 thousand) and ¥678,879 million, respectively.
Gross realized gains and losses on these sales, computed on
the moving-average cost basis, were ¥19,739 million ($147,842
thousand) and ¥36,958 million ($276,801 thousand),
respectively, for the year ended March 31, 2023, and ¥7,894
million and ¥8,608 million, respectively, for the year ended
March 31, 2022.

March 31, 2023

Cost

Unrealized Unrealized
Gains
LossesSecurities classified as:
Available-for-sale:
Equity securities
Debt securities
Other securities
Held-to-maturity$ 706,861
11,305,319
5,249,448
748$3,153,070
60,88991,1481$

3,928
270,848
146,303

Fair
Value

$3,856,003
11,095,361
5,194,293
750

Thousands of
U.S. Dollars

Millions of Yen
2023
Bills discounted
Loans on bills
Loans on deeds
Overdrafts¥

13,713
113,3455,284,635
701,483

Total¥ 6,113,178

2022¥

13,031
139,391
5,149,067
629,825¥ 5,931,315

2023$

102,710
848,901
39,579,358
5,253,768$45,784,738

Of total loans, loans to customers in bankruptcy, which
represent nonaccrual loans and which were included in loans
and bills discounted, amounted to ¥6,382 million ($47,801
thousand) and ¥7,386 million as of March 31, 2023 and 2022,
respectively; past due loans, which represent nonaccrual loans
other than loans to customers in bankruptcy, amounted to¥82,786 million ($620,031 thousand) and ¥77,879 million asof March 31, 2023 and 2022, respectively.
Of total loans, accruing loans contractually past due threemonths or more amounted to ¥714 million ($5,351 thousand)and ¥1,725 million as of March 31, 2023 and 2022, respectively.
Of total loans, restructured loans amounted to ¥18,725 million($140,247 thousand) and ¥20,466 million as of March 31, 2023
and 2022, respectively. Restructured loans, designed to assist
in the recovery of the financial health of debtors, were loans on
which the Bank granted concessions (e.g., reduction of thestated interest rate, deferral of interest payment, extension of
maturity date, reduction of the face amount). Loans classified
as nonaccrual loans or accruing loans contractually past due
three months or more were excluded from restructured loans.

10. FOREIGN EXCHANGES
Foreign exchanges as of March 31, 2023 and 2022, consisted of
the following:Thousands of
U.S. Dollars
Millions of Yen
2023
2022
2023
Assets:Due from foreign banks ¥Foreign exchange bills bought
Foreign exchange bills receivable

25,427
2,528
299

¥

Total

¥

28,255¥¥

Liabilities:
Overdrafts from foreign banks
Foreign exchange bills sold
Foreign exchange bills payable
Total

26,3133,800
432$ 190,437
18,9402,242¥

30,546$ 211,619

1
223
1,278

¥

10
228
720

$

9
1,671
9,577

1,503

¥

960

$

11,259Millions of Yen
2023
2022
Land
¥
Buildings
Construction in progress
Other tangible fixed assets
Software
Other intangible fixed assets

9,131
12,34995
10,707
3,889
610

¥

11,144
11,546923
10,764
4,018
609

$

Total

36,784¥39,006$ 275,498¥

68,39392,490718
80,19329,131
4,571

As of March 31, 2023 and 2022, deferred gains for tax purposesof ¥7,702 million ($57,689 thousand) and ¥7,788 million,
respectively, on property, plant, and equipment sold andreplaced with similar assets have been deducted from the costof newly acquired property, plant, and equipment.

12. ACCEPTANCES AND GUARANTEES
Acceptances and guarantees include all contingent liabilities
associated with the issuance of letters of credit, acceptances ofbills, and issuances of guarantees. The contra account includedin the assets side of the consolidated balance sheet represents
the Bank's potential claim against applicants.

13. ASSETS PLEDGED
Assets pledged as collateral as of March 31, 2023 and 2022,
consisted of the following:Thousands of
U.S. Dollars
Millions of Yen
2023
2022
2023
Assets pledged:
Trading assets¥
10,999Cash (other assets)
408
Securities
1,092,458
Loans and bills discounted
1,662,271
Total
Related liabilities:
Deposits
Payables under repurchaseagreements
Payables under securities
lending transactions
Borrowed money
Total

¥

5,999
408
1,298,835
1,652,965$

82,3773,060
8,181,986
12,449,603¥ 2,766,137¥ 2,958,208$20,717,028

¥

¥

$

43,333

66,030324,550

102,282

53,041

766,049

332,031
1,546,409

322,484
2,073,288

2,486,751
11,581,855¥ 2,024,057¥ 2,514,845$15,159,206

In addition to the above, assets pledged as collateral fortransactions, such as exchange settlement transactions, or as
substitute securities for initial margin on futures transactions
and others were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2023
Securities
Cash (other assets)
Cash collateral received for financial
instrument liabilities (other assets)
Deposits to central counterparty(other assets)

¥

1,187
25

2022
¥

1,194
25

2023
$

8,896
187

9,018

13,53867,54750,64856,733379,336

Additionally, initial margin of futures markets and guarantee
deposits on office space included in other assets were as
follows:
Thousands of
U.S. Dollars

Millions of Yen

11. PROPERTY, PLANT, AND EQUIPMENT AND
INTANGIBLE ASSETS
Property, plant, and equipment as of March 31, 2023 and 2022,
net of accumulated depreciation of ¥72,698 million ($544,474
thousand) and ¥72,937 million, respectively, consisted of thefollowing:Thousands of
U.S. Dollars
2023

2023
Initial margin of futures markets
Guarantee deposits on office space ¥

615

2022
¥

60
651

2023
$

4,609

ANNUAL REPORT 2 0 2 3

96

14. DEPOSITS
Deposits as of March 31, 2023 and 2022, consisted of thefollowing:

2023
375,018
5,223,714
58,8252,373,244
137,232

Current deposits
Ordinary deposits
Savings deposits
Time deposits
Other deposits

¥

Total

¥ 8,168,035

2023

Thousands of
U.S. Dollars

Millions of Yen
2022

2023

365,362
4,989,661
58,5802,434,298
201,971$ 2,808,708
39,123,086
440,574
17,774,448
1,027,807¥ 8,049,875$61,174,625¥

Balance at beginning of year
Current service cost
Interest cost
Actuarial gains
Benefits paid
Others¥Balance at end of year¥

52,692 $ 383,655
1,976
14,083
125
1,294
(658)
(13,436)(3,030)(23,780)120
874

48,426

51,225¥

Borrowed money includes borrowings from the Bank of Japanand other financial institutions. Annual maturities of borrowed
money as of March 31, 2023, were as follows:Year Ending March 31

Millions of Yen

2024
2025
2026
2027
2028
2029 and thereafter

¥

Total

¥

Thousands of U.S.
Dollars

257,971
376,066
478,665441,641
2,633
2,676

$

1,559,655$

1,932,081
2,816,558
3,584,973
3,307,679
19,72520,044

2023
Balance at beginning of year
Expected return on plan assets
Actuarial losses
Contributions from the employer
Benefits paid
Others¥Balance at end of year¥

Thousands of
U.S. Dollars

The Bank and its domestic consolidated subsidiaries have acontributory funded pension plan and noncontributory
unfunded retirement benefit plans.
In the contributory funded pension plan, the Group adopted acash balance plan that each employee has a "hypotheticalaccount balance," which accumulates pay credits based on eachsalary level, interest credits based on the trend of market
interest rate, and pay retirement lump-sum grants or pension,
based on their salary and length of service. Some fundedpension plan contributed to employee pension trust.
In the noncontributory unfunded plan, the Group pays
retirement lump-sum grants based on salary and length ofservice.
Employees whose service with the Bank or its domestic
consolidated subsidiaries is terminated are, under mostcircumstances, entitled to retirement and pension benefits
determined by reference to basic rates of pay at the time oftermination, length of service, and conditions under which thetermination occurs. If the termination is involuntary, caused byretirement at the mandatory retirement age or death, theemployee is typically entitled to a larger payment than in thecase of voluntary termination.
In addition, some consolidated subsidiaries adopt thesimplified method to calculate their liability for employees'
retirement benefit and retirement benefit costs.
(1) The changes in defined benefit obligation, excluding theones calculated by the simplified method, (3) below, forthe years ended March 31, 2023 and 2022, were as follows:

2022

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial gains
Net periodic benefit costs calculated by
the simplified method
Others¥Net periodic benefit costs (gains)¥

83,616 $ 617,621
1,274
9,464
(1,363)
(593)
750
5,467
(1,933)(14,529)120
874

82,55682,464$ 618,304

Thousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year
Net periodic benefit cost
Benefits paid
Contributions to the plan¥

Balance at end of year

¥

2023

2022

2023

90 ¥
270
(327)
(52)

452 $
(77)
(270)
(14)

674
2.024
(2,455)(396)(20) ¥

90

(153)

$

(4) Reconciliation between the asset and liability recorded in
the consolidated balance sheet and the balances of defined
benefit obligation and plan assets, including that
calculated by the simplified method (3) above is as follows:
Millions of Yen
2023
Funded defined benefit obligation
Plan assets

¥

Total
Unfunded defined benefit
obligation

2022

Thousands of
U.S. Dollars
2023

40,993 ¥ 43,400 $ 307,018(86,390)(86,203)(647,023)(45,397)(42,802)(340,005)

11,247

11,653

84,238

Net asset arising from defined
benefit obligation¥(34,150) ¥ (31,149) $ (255,767)

Liability for employees' retirement
benefits¥
Asset for employees' retirement benefits

11,247 ¥ 11,653 $ 84,238(45,397)(42,803)(340,005)

Net asset arising fromdefined benefit obligation ¥(34,150) ¥ (31,149) $ (255,767)(5) The components of net periodic benefit costs for the years
ended March 31, 2023 and 2022, were as follows:

2022

1,880 ¥
172
(1,263)(2,840)2023

1,976 $ 14,083
125
1,294
(1,274)(9,464)(2,657)(21,277)

270
127

(77)
166

(1,653) ¥

2,024
955

(1,740) $ (12,384)(6) Amounts recognized in other comprehensive income(before income tax effect) in respect of defined retirement
benefit plans for the years ended March 31, 2023 and 2022,
were as follows:

2023

82,464 ¥
1,263
(79)
729
(1,939)
116
¥

2023

Millions of Yen

Actuarial losses¥

Thousands of
U.S. Dollars

2023

2022

2023

(1,126) ¥(3,362) $(8,434)(7) Amounts recognized in accumulated other comprehensive
income (before income tax effect) in respect of defined
retirement benefit plans, before adjusting for tax effects, asof March 31, 2023 and 2022, were as follows:(3) The changes in liability for employees' retirement benefits
calculated by the simplified method for the years ended
March 31, 2023 and 2022, were as follows:

11,681,063

16. RETIREMENT AND PENSION PLANS$ 362,691

Thousands of
U.S. Dollars

Millions of Yen

2023

51,225 ¥1,880
172(1,794)(3,175)116

Millions of Yen

As of March 31, 2023 and 2022, the weighted-average annualinterest rates applicable to borrowed money were 0.37% and0.03%, respectively.

ANNUAL REPORT 2 0 2 3

2022(2) The changes in plan assets, excluding the ones calculatedby the simplified method, (3) below, for the years ended
March 31, 2023 and 2022, were as follows:

15. BORROWED MONEY

97

Thousands of
U.S. Dollars

Millions of Yen

Millions of Yen
2023
Unrecognized actuarial gains¥

Thousands of
U.S. Dollars

2022

2023

(16,443) ¥ (17,569) $ (123,150)(8) Plan assets
a. Components of plan assets
Plan assets as of March 31, 2023 and 2022, consisted of
the following:
2023

2022

Debt investments
Equity investments
General account assets of life insurance companies
Cash and cash equivalents
Others

14.29%
57.45
17.27
3.87
7.12

16.34%
56.72
17.65
3.05
6.24

Total

100.00%100.00%

Employee pension trusts for the years ended March 31,
2023 and 2022, are 46.36% and 44.73%, respectively, andare included in the total above.
b. Method of determining the expected rate of return onplan assets
The expected rate of return on plan assets is determinedconsidering the long-term rates of return which that are
expected currently and in the future from the various
components of the plan assets.
(9) Assumptions used for the years ended March 31, 2023 and2022, were set forth as follows:
Discount rates
Expected rates of return on plan assets
Salary increase rates

2023

2022

0.2%–0.8%
1.0%–2.0%
9.0%

0.1%–0.4%
1.0%–2.0%
10.0%

17. EQUITY
The significant provisions in the Banking Law and theCompanies Act of Japan (the "Companies Act") that affectfinancial and accounting matters are summarized below:
a. Dividends
Under the Companies Act, companies can pay dividends at
any time during the fiscal year in addition to the year-end
dividend upon resolution at the shareholders' meeting.
Additionally, for companies that meet certain criteria

including (1) having a Board of Directors, (2) having
independent auditors, (3) having an Audit & Supervisory
Board, and (4) the term of service of the directors beingprescribed as one year rather than the normal two-year termby its articles of incorporation, the Board of Directors may
declare dividends (except for dividends in kind) at any time
during the fiscal year if the company has prescribed so in its
articles of incorporation. The Bank meets all the above
criteria.
Semiannual interim dividends may also be paid once a year
upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies
Act provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation isdefined as the amount available for distribution to theshareholders, but the amount of net assets after dividends
must be maintained at no less than ¥3 million.
b. Increases/Decreases and Transfer of Common Stock,
Reserve, and Surplus
The Companies Act requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (acomponent of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on theequity account charged upon the payment of such dividends
until the aggregate amount of the legal reserve andadditional paid-in capital equals 25% of common stock.
Under the Companies Act, the total amount of additional
paid-in capital and legal reserve may be reversed without
limitation. The Companies Act also provides that common
stock, legal reserve, additional paid-in capital, other capitalsurplus, and retained earnings can be transferred among theaccounts within equity under certain conditions upon
resolution by the shareholders.
c. Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchasetreasury stock and dispose of such treasury stock byresolution of the Board of Directors. The amount of treasury
stock purchased cannot exceed the amount available for
distribution to the shareholders, which is determined by aspecific formula.
Under the Companies Act, stock acquisition rights arepresented as a separate component of equity.
The Companies Act also provides that companies canpurchase both treasury stock acquisition rights and treasury
stock. Such treasury stock acquisition rights are presented asa separate component of equity or deducted directly fromstock acquisition rights.
The Banking Law provides that an amount at least equal to
20% of the aggregate amount of cash dividends and certain
other appropriations of retained earnings associated withcash outlays applicable to each period shall be appropriatedas a legal reserve (a component of retained earnings) until
the total of such reserve and additional paid-in capital equals
100% of common stock. The amount of total additional paidin capital and legal reserve that exceeds 100% of common
stock may be available for dividends upon resolution by theshareholders. In addition, the Companies Act permits thetransfer of a portion of additional paid-in capital and legal
reserves to common stock upon resolution by the Board of
Directors.

18. STOCK ACQUISITION RIGHTS
The Bank's stock option plans grant options to directors topurchase certain shares of the Bank's common stock in therespective periods. Stock-based compensation expenses were
¥40 million ($305 thousand) and ¥47 million for the years
ended March 31, 2023 and 2022, respectively.
The stock options outstanding as of March 31, 2023, are as
follows:

ANNUAL REPORT 2 0 2 398

StockOptionPersons
Number of
Date of Exercise
Granted Options Granted Grant
Price

Exercise
Period2011
8 directors 150,000 shares August 8,¥1 From August 9, 2011,
Stock Option
2011($0.01) to August 8, 2036
2012
8 directors 150,000 shares August 6,¥1 From August 7, 2012,
Stock Option
2012($0.01) to August 6, 2037
2013
7 directors 129,300 shares August 5,¥1 From August 6, 2013,
Stock Option
2013($0.01) to August 5, 2038

Stock Option
2011

2012

2013

Stock Option

2014

2015

(Shares)Year Ended March 31, 2022

2021
Year Ended March 31, 2022
Nonvested

March 31, 2021—Outstanding
GrantedCanceled
VestedMarch 31, 2022—Outstanding

March 31, 2021 —Outstanding
Granted130,700
Canceled
VestedMarch 31, 2022 —Outstanding 130,700

2014
8 directors 133,800 shares July 22,
Stock Option
2014¥1 From July 23, 2014,($0.01) to July 22, 2039

2015
8 directors 78,900 shares July 27,
Stock Option
2015¥1 From July 28, 2015,($0.01) to July 27, 2040

2016
8 directors 150,000 shares July 25,
Stock Option
2016¥1 From July 26, 2016,($0.01) to July 25, 2041

2017
7 directors 109,600 shares July 24,
Stock Option
2017¥1 From July 25, 2017,($0.01) to July 24, 2042

Year Ended March 31, 2023

2018
8 directors 150,000 shares July 23,
Stock Option
2018¥1 From July 24, 2018,($0.01) to July 23, 2043

2019
8 directors 150,000 shares July 22,
Stock Option
2019¥1 From July 23, 2019,($0.01) to July 22, 2044

March 31, 2022 —Outstanding
GrantedCanceled
VestedMarch 31, 2023 —Outstanding2020
7 directors 150,000 shares July 20,
Stock Option
2020¥1 From July 21, 2020,($0.01) to July 20, 2045

2021
7 directors 130,700 shares July 19,
Stock Option
2021¥1 From July 20, 2021,($0.01) to July 19, 2046

2022
5 directors 83,700 shares July 19,
Stock Option
2022¥1 From July 20, 2022,($0.01) to July 19, 2047

15,20015,20028,80026,90023,50015,20015,20028,80026,90023,500

VestedVestedMarch 31, 2021—Outstanding
VestedExercised
Canceled
March 31, 2022—Outstanding

March 31, 2021 —Outstanding
VestedExercised
Canceled
March 31, 2022 —Outstanding

15,20015,20015,20015,20028,80028,80026,90026,90023,50023,500¥1($0.01)¥1($0.01)¥1($0.01)¥1($0.01)¥1($0.01)

Average stock price at exercise¥374($2.80)¥410($3.07)

2016

2017

Vested14,10014,100Exercise price¥1($0.01)

Average stock price at exercise¥488($3.65)29,20066,40029,60097,30017,500132,500

Vested29,20029,20029,60029,60017,50017,500¥336($2.51)44,60097,300132,500

42,00014,60051.80014,80082,50017,500115,000

14,60014,60014,80014,80017,50017,500¥1($0.01)¥1($0.01)¥1($0.01)¥488($3.65)¥488($3.65)¥488($3.65)¥443($3.31)¥413($3.09)¥391($2.92)

VestedMarch 31, 2022 —Outstanding
VestedExercised
Canceled
March 31, 2023 —Outstanding
Exercise price¥1($0.01)99

ANNUAL REPORT 2 0 2 3¥455($3.40)¥689($5.16)

¥

Total

¥

2023

Total

11,050$ 142,017

Thousands of
U.S. Dollars¥¥

69,957

¥

7,717

2023
$

37,323
265,790

29,51531

220,420413

37,263$ 523,947

Thousands of
U.S. Dollars

2022

2023

Salaries and related expenses ¥Other

24,48332,148¥23,50530,533$ 183,367
240,775

Total

56,631¥54,038$ 424,143¥

24. OTHER EXPENSES
Other expenses for the years ended March 31, 2023 and 2022,
consisted of the following:

1,699
35,780Total¥

30,3082,927

229,108
18,982

25. INCOME TAXES

44,177$ 528,796

2022¥

30,5902,534
70,604¥2023

12,726
267,978

Thousands of
U.S. Dollars

1,226
9,714

2023
$

Other income for the years ended March 31, 2023 and 2022,
consisted of the following:Thousands of
U.S. Dollars

Millions of Yen¥

Other operating income for the years ended March 31, 2023
and 2022, consisted of the following:

Gains on foreign exchange¥transactions
Gains on sales of bonds
Income on lease transaction
and installment receivables
Other

4,983
35,48829,43055

Charge-off of loans
Losses on sales of equity
securities
Valuation losses on equity
securities
Losses on money held in trust
Losses on sales of real estate
Impairment losses
Other

20. OTHER OPERATING INCOME

21. OTHER INCOME¥1($0.01)

Average stock price at exercise
Fair value price at grant date

Black-Scholes option pricing model
21.05%
9 months¥16 per share(0.133)%

Millions of Yen
66,400Loss on redemption of bonds
Loss on sales of bonds
Cost of lease transaction andinstallment receivables
Other

Information about disaggregation is as described in Note 33"Segment Information."

Nonvested
42,00033,392
23,301

2022

2023

¥474
($3.55)

19. REVENUE RECOGNITION

Year Ended March 31, 2023
44,600

4,267
2,113

Millions of Yen

Estimate method:
Volatility of stock price:
Estimated remaining outstanding period:
Estimated dividend:
Risk-free interest rate:

23,60042,00085,323General and administrative expenses for the years ended March
31, 2023 and 2022, consisted of the following:¥1($0.01)The Assumptions Used to Measure the Fair Value of the 2022 Stock Option

44,600¥$23. GENERAL AND ADMINISTRATIVE EXPENSES

2020

150,000

23,60023,60083,7002019

126,900

March 31, 2021 —Outstanding
VestedExercised
Canceled
March 31, 2022 —Outstanding

83,7002018

95,60018,962

2023

Fair value price at grant date65,600

4,458
3,111

4,669

Millions of Yen¥927($6.94)44,600¥2023

Other operating expenses for the years ended March 31, 2023
and 2022, consisted of the following:¥628($4.70)Nonvested

March 31, 2022 —Outstanding
GrantedCanceled
VestedMarch 31, 2023 —Outstanding¥

11,3922022

22. OTHER OPERATING EXPENSES¥602($4.50)(Shares)Year Ended March 31, 2022
March 31, 2021 —Outstanding
GrantedCanceled
VestedMarch 31, 2022 —Outstanding

Total

March 31, 2022 —Outstanding 130,700
GrantedCanceled
Vested14,100March 31, 2023 —Outstanding 116,600
March 31, 2022 —Outstanding
VestedExercised
Canceled
March 31, 2023 —Outstanding

March 31, 2022 —Outstanding
VestedExercised
Canceled
March 31, 2023 —Outstanding

Fair value price at grant date

Gains on sales of equity¥
securities
Gains on money held in
trust
Other

Nonvested

VestedThe stock option activity is as follows:

2023

Year Ended March 31, 2023

Nonvested

Exercise price2022(Shares)Nonvested

Thousands of
U.S. Dollars

Millions of Yen

1

2022
¥

4

2023
$

10

2,647

2,419

19,826

37
4,797
208
1,669
5,520

50
3,717
451
302
4,087

277
35,927
1,561
12,506
41,347

11,034$ 111,456

14,881¥The Bank and its domestic consolidated subsidiaries are
subject to Japanese national and local income taxes that, in theaggregate, resulted in a normal effective statutory tax rate of
30.35% for the years ended March 31, 2023 and 2022.
The tax effects of significant temporary differences that
resulted in deferred tax assets and liabilities as of March 31,
2023 and 2022, are as follows:

ANNUAL REPORT 2 0 2 3100Thousands of
U.S. Dollars

Millions of Yen
2023
Deferred tax assets:
Allowance for credit losses ¥Liability for employees'
retirement benefits
Valuation difference on
available-for-sale securities
Deferred losses on hedges
Valuation losses on equity
securities
Depreciation
Accrued enterprise tax
Impairment losses
Other
Less—valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Valuation difference on
available-for-sale securities
Gain on contribution of
securities to employee
retirement benefit trust
Deferred losses on hedges
Asset for employees'
retirement benefits
Other
Total deferred tax liabilities
Net deferred tax liabilities

13,0692022¥

11,5612023$

97,882

80

114

604

17,073
3,297

13,6802,099

127,872
24,693

1,176
2,914
523
1,932
2,713
(3,499)

1,190
2,902
295
1,540
2,487
(3,012)

8,810
21,825
3,918
14,473
20,324(26,208)

39,28132,859294,197

¥

Total

¥

18,117
14,40910,874
7,218
4,116
4,858

¥

59,596¥2023

17,704
14,138
10,494
7,126
3,752
3,790

$ 135,689
107,920
81,44854,06630,83236,38957,007$ 446,346

The minimum rental commitments under noncancelable
operating leases as of March 31, 2023 and 2022, are as follows:
Millions of Yen
2023
Due within 1 year
Due after 1 year¥¥

Thousands of
U.S. Dollars

2022

3,305
3,907

¥

7,213

¥

2023

3,271
4,010

$

7,282

$

Total

1,665
10,402

1,665
8,928

12,474
77,90827. FINANCIAL INSTRUMENTS AND RELATEDDISCLOSURES

5,004
1,539

4,354
1,186

37,47911,526

151,792

146,447

1,136,855

Lessor
The net investments in leases are summarized as follows:
Millions of Yen
2023

Thousands of
U.S. Dollars

2022

2023

Gross lease receivables ¥Estimated residual values
Estimated maintenance cost
Unearned interest income

59,596 ¥
7,595(1,540)(3,929)57,007 $ 446,346
7,397
56,890(1,496)(11,539)(3,781)(29,433)

Investments in leases

61,721

59,127¥$ 462,264

Maturities of lease receivables for finance leases that are
deemed to transfer ownership of the leased property to thelessee are as follows:
Millions of Yen
2023

Thousands of
U.S. Dollars

2022

2023

Due in 1 year or lessDue from 1 to 2 years
Due from 2 to 3 years
Due from 3 to 4 years
Due from 4 to 5 years
Due after 5 years

¥

2,560
2,076
1,529
803
420
818

¥

2,583
2,184
1,713
1,187
492
851

$

19,18015,552
11,458
6,021
3,151
6,128

Total

¥

8,210

¥

9,012

$

61,492

Maturities of investments in leases for finance leases that are
deemed not to transfer ownership of the leased property to thelessee are as follows:

ANNUAL REPORT 2 0 2 3

Due in 1 year or lessDue from 1 to 2 years
Due from 2 to 3 years
Due from 3 to 4 years
Due from 4 to 5 years
Due after 5 years

2022

997,466

26. LEASES

101

2023

130,312Reconciliation is not presented for the years ended March 31,
2023 and 2022, because the difference was immaterial (lessthan 5% of the normal statutory tax rate).

March 31

March 31

Thousands of
U.S. Dollars

133,181¥ (112,511) ¥ (113,587) $ (842,658)¥

Millions of Yen

24,75529,26654,022(1) Group Policy for Financial Instruments
The Group offers financial services such as providing loans
and sales of investment products to customers. In
performing these operations, the Bank uses funds received
as deposits from customers or by borrowing money from themarket in consideration of market conditions and thebalance in funding periods between the short term and thelong term.
As the Bank holds financial assets and liabilities affected byinterest rate movements, it carries out Asset Liability
Management ("ALM") to avoid negative effects of interest
movements. In managing interest rate movements, the Bankutilizes derivatives.
The Bank and certain consolidated subsidiaries also holdsecurities for sale to customers.
(2) Nature and Extent of Risks Arising from Financial
Instruments(a) Loans
The Bank provides loans mainly to domestic customers
but does not focus on specific groups of companies.
These loans are exposed to credit risk in the case of thecustomers' breach of the contract. In all domestic loans,the percentage of loans in Nagano Prefecture, the Bank's
main business area, is approximately 50%. As such, theBank's credit risk is likely to deteriorate if there arenegative changes in the economy in Nagano Prefecture.
(b) Securities
Securities are mainly bonds, stocks, investment trusts,
and corporate investment funds. These securities areclassified into categories, such as (1) securities held tomaturity, (2) securities available for sale, and (3)securities for trading purposes to sell to customers. All
securities are exposed to the credit risk of the securities'
issuers or interest rate risk, market price risk, foreignexchange risk, and liquidity risk.
(c) Deposits
The Bank receives deposits from customers. These
deposits are exposed to interest rate risk, foreignexchange risk, and liquidity risk.
(d) Derivatives
The purpose of using derivatives is to provide customers
various hedging instruments to hedge the Bank's
portfolio under ALM and to enhance the Bank's profit.

Derivatives include interest rate swaps, interest cap
transactions, and currency exchange swaps. Using thesederivatives as hedging instruments for loans andsecurities, the Bank applies hedge accounting toderivative transactions and assesses the effectivenessbetween the hedged items and hedging instrumentsfrom the start of hedging. These derivative transactions
are exposed to market risk and credit risk.
Derivative transactions used for hedging purposes arecarried out in accordance with the Bank's annual hedging
policy.
(3) Risk Management for Financial Instruments(a) Credit risk management
In accordance with internal rules of credit risk
management, the Bank examines every loan, manages
loans according to credit lines for each debtor, addresses
troubled loans, reviews each debtor's credit rating, andmanages the Bank's loan portfolio. Regarding the loan
examination structure, the loan promotion section isseparated from the loan examination section in the head
office. These two sections monitor and check each other.
Every loan from the business branches is examined inmany stages from loan application to the Bank's final
decision. The Bank reviews each debtor's credit rating ona regular basis to identify troubled loans in a timely
manner. In addition, the Bank uses examination resultsin order to reduce credit risk and to manage the Bank's
loan portfolio.
To address the credit risk of securities' issuers, the Bank
carries out its business under credit line limits for eachdebtor. Such limits are defined by the Risk Management
Department on a semiannual basis.

(b) Market risk management (interest rate risk, foreignexchange risk, and market price risk)
The Group stipulates internal rules of market risk
management and controls market risk so as to maintainmanagement soundness and profitability.
Considering the market and the Bank's conditions, theBank updates its Market Risk Management Policy on asemiannual basis to maintain an appropriate balance
between risk and return and to adjust the volume of risk.
Furthermore, the management committee confirms therisk limit and loss limit by each transaction type for eachcustomer according to the Market Risk Management
Policy. The Bank defines the limit of investment, limit ofholding, and limit of valuation losses, as necessary. It
also defines the threshold that should limit market risk
and losses to certain amounts. Each section should carryout its business within risk limits, as well as report therisk status to an executive officer on a daily basis.
Regarding management of business operations, the front
office is separated from the back office. The middle office
which controls and manages risk is also separated fromthese two offices. These three offices monitor and checkeach other.
Management of Interest Rate Risk
To manage risk caused by interest rate fluctuations, theBank uses Value at Risk ("VaR") for the change of
economic value and uses ALM for the change of interest
rate in gap analysis. The "ALM and Integrated Risk
Conference" monitors the Group's risk status anddiscusses various measures corresponding to risks. As
stated above, the Bank uses some derivative transactions
under ALM.

Policy.
Management of Market Price Risk
The Bank manages the change of economic value arisingfrom fluctuations in market prices by VaR. The Board of
Directors define the upper limit of risk on a semiannual
basis by taking into account the Bank's capital status andmarket conditions. Certain consolidated subsidiaries
report market values of holding securities to the Bank's
Board of Directors on a regular basis.
The Principles of Derivative Transactions
The Bank establishes internal rules for derivativetransactions and manages the Group's risk in an
integrated fashion, including derivative transactions
made by consolidated subsidiaries. Regarding
derivatives, the Risk Management Department reports
the total positions, market values, and market risk
amounts to both executive officers and the "ALM andIntegrated Risk Conference" on a regular basis.
To manage risk arising from derivative transactions, themiddle office, which checks and controls risk, isseparated from the front office so as to monitor the front
office's transactions.
Quantitative Information on Market Risk
The Bank principally uses VaR for quantitative analysisof the market risk of all financial instruments. For
calculating VaR, the historical simulation method(confidence interval of 99.9%; observation period of
3,500 days; and holding period of 10 days for Bank's
trading business, 240 days for Bank's banking business,and 120 days for others) has been adopted.
The VaRs in the Bank's trading business are ¥1,004
million ($7,521 thousand) and ¥716 million and the
VaRs in the Bank's banking business are ¥424,237
million ($3,177,332 thousand) and ¥414,953 million asof March 31, 2023 and 2022, respectively.
The Bank conducts backtesting to compare the VaR
calculated using the model with actual loss amounts.
According to the bank testing results, it is believed thatthe measurement model that the Bank uses is adequate
to capture market risk. It should be noted that VaR
measures the amount of market risk at certain
probability levels statistically calculated based on
historical market fluctuations, and therefore, there may
be cases where market risk cannot be captured insituations when market conditions change dramaticallybeyond what has been experienced historically.

(c) Liquidity risk management
The Bank manages liquidity risk through diversificationof funding and adjustment of funding periods between
long term and short term under ALM.
(4) Fair Value of Financial Instruments
Fair values of financial instruments are as follows:
Investments in equity instruments that do not have a quoted
market price in an active market are not included in thefollowing table. The fair values of "Cash and due frombanks," "Call loans and bills bought," "Foreign exchange,""Call money and bills sole," "Payables under repurchasedagreements," and "Payables under securities lendingtransactions" are not disclosed because their maturities areshort and the carrying values approximate fair value. Also,
please see Note 29 for details of the fair values of derivatives.

(a) Fair value of financial instruments

Management of Foreign Exchange Risk
The Bank manages the change of economic value arisingfrom fluctuations in foreign exchange rates by VaR. To
avoid excessive foreign exchange risk, the Bank defines
the upper holding limit in its Market Risk Management

ANNUAL REPORT 2 0 2 3

102Millions of Yen
March 31, 2023
Securities:
Held to maturity
Available for sale
Loans and bills discounted
Allowance for credit losses

Carrying
Amount¥Loans after deduction ofallowance for credit losses

Fair
Value

Unrealized Gains(Losses)Due from
3 to 5 Years

Due from
5 to 7 Years

Due from
7 to 10 Years

Securities
Held to maturity
National government bonds
Available for sale
National government bonds
Local government bonds
Corporate bonds
Loans and bills discounted

¥

¥

¥

¥

¥

(750)
(6,657)

Total(7,408)March 31, 2022

6,074,822

¥

(247)

Total

¥ 8,689,671¥ 8,689,424

¥

(247)

Deposits
Borrowed money¥ 8,168,035
1,559,655¥ 8,167,285
1,552,997

Total¥ 9,727,691¥ 9,720,282

¥

Total

23,489¥¥214
23,27523,489March 31, 2022
Securities:
Held to maturity
Available for sale
Loans and bills discounted
Allowance for credit losses¥

Loans after deduction ofallowance for credit losses

99 ¥
101
2,766,219
2,766,219
5,931,315(34,564)
5,896,751

5,922,770

Total¥ 8,663,071¥ 8,689,090

Deposits
Borrowed money¥ 8,049,875
2,087,634¥ 8,049,968
2,086,200

Total¥ 10,137,509¥ 10,136,168

Derivative transactions:
Hedge accounting not applied ¥Hedge accounting applied(686) ¥
22,399(686)
22,399Total

21,713

21,713¥¥¥

1

Securities:
Held to maturity
Available for sale
Loans and bills discounted
Allowance for credit losses

Carrying
Amount$Loans after deduction ofallowance for credit losses

Fair
Value

748 $
750
19,581,349
19,581,349
45,784,738(285,413)¥

61,1772022¥

34,1492023$ 458,191

165,514100
100
165,414
13,50057,927
21,3601,406,723

323,801

427,162

95,145323,801
8,000
82,003
167,900
1,213,558

427,1626,000
164,066
211,967
810,159¥ 1,572,238¥ 1,537,360¥ 1,237,321¥

627,010

Securities
Held to maturity
National government bonds
Available for sale
National government bonds
Local government bonds
Corporate bonds
Loans and bills discounted

¥

¥

¥

¥

174,140

211,176
44,5008,670
127,594
1,429,593

307,916100
100
307,816
21,50086,83380,9591,184,947

Total¥ 1,640,769¥ 1,492,863

March 31, 2023

Due in1 Year or Less

Due from
1 to 3 Years

Due from
3 to 5 Years

Due from
5 to 7 Years

Due from
7 to 10 Years

Securities
Held to maturity
National government bonds
Available for sale
National government bonds
Local government bonds
Corporate bonds
Loans and bills discounted$ 1,239,624
748
748
1,238,875
101,108
433,848
159,978
10,535,679$ 2,425,115$ 3,199,239$$

2,425,115
59,916614,162
1,257,495
9,088,965

3,199,239
44,9371,228,777
1,587,534
6,067,700

Total$ 11,775,303$ 11,514,880$ 9,266,940

211,176

272,576

95,14547,806¥ 1,101,447¥

672,539805,270805,270
537,500
11,349114,330
962,904¥

507,879¥ 1,768,175¥

226,620¥

174,140
10,00097,30428,526498,399

90,387116,207828,870¥

47,806
10,0009,632
21,699460,073

14,37955,845531,864

272,576

Due after
10 Years¥

805,186

226,620
137,000
9,632
53,778410,898

805,186
589,500
11,976
114,587923,647

637,519¥ 1,728,833

26,018¥26,01993(1,434)¥(1,341)

712,596

Due after
10 Years

358,045$ 6,031,085

107,699
418,258
3,983,409

358,045
74,895
72,141
162,518
3,445,726

6,031,085
4,025,614
84,999856,278
7,211,689$ 4,696,005$ 3,803,771$ 13,242,774

712,596(6) Scheduled Repayment Amount after the Consolidated Balance Sheet Date for Borrowed Money and Other Interest-Bearing Liabilities
Millions of Yen

Unrealized
Gains (Losses)$

1

March 31, 2023

Due in1 Year or Less

Due from
1 to 3 Years

Due from
3 to 5 Years

Due from
5 to 7 Years

Due from
7 to 10 Years

Due after
10 Years

Deposits
Borrowed money¥ 7,331,615
257,971¥775,549854,732¥

31,169444,275

¥

6,575
5

¥

12,3602,671¥

10,765

Total¥ 7,589,587¥ 1,630,282¥

475,444

¥

6,580

¥

15,031¥

10,765

March 31, 2022
(1,856)

Deposits
Borrowed money¥ 7,231,102
1,378,737¥773,734
706,133¥

28,741
300

¥

3,961
13

¥

6,320
2,449

¥

6,014

$

(1,854)

Total¥ 8,609,840¥ 1,479,867¥

29,042

¥

3,975

¥

8,770

¥

6,014

$ 61,169,001
11,631,200$(5,623)(49,862)$ 72,800,202$

45,499,325

45,497,468

Total$ 65,081,424$ 65,079,569

Deposits
Borrowed money$ 61,174,625
11,681,063

Total$ 72,855,688

Derivative transactions:
Hedge accounting not applied $Hedge accounting applied

1,603
174,320$

1,603
174,320

Total

175,923$

175,923$

2023

March 31, 2023

Thousands of U.S. Dollars

Thousands of U.S. Dollars
March 31, 2023

Millions of Yen

Investments in equity instrumentsthat do not have a quoted market
price in an active market

6,075,069

214
23,275

Millions of Yen
Due from
1 to 3 Years

March 31¥

Thousands of
U.S. Dollars(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities

Due in1 Year or Less

99 ¥
100
2,614,501
2,614,501
6,113,178(38,108)

Derivative transactions:
Hedge accounting not applied ¥Hedge accounting applied(b) Financial instruments whose fair value cannot be reliably
determined(55,486)

Thousands of U.S. Dollars
March 31, 2023

Due in1 Year or Less

Due from
1 to 3 Years

Due from
3 to 5 Years

Due from
5 to 7 Years

Due from
7 to 10 Years

Due after
10 Years

Deposits
Borrowed money$ 54,910,242
1,932,081$ 5,808,492
6,401,532$

233,444
3,327,405$

49,24338$

92,57420,005$80,627

Total$ 56,842,324$ 12,210,024$ 3,560,849$

49,282$

112,579$

80,627

Financial Instruments Categorized by Fair Value Hierarchy
The fair value of financial instruments is categorized into the following three levels, depending on the observability and significance of the
inputs used in making fair value measurements:

103

ANNUAL REPORT 2 0 2 3

ANNUAL REPORT 2 0 2 3104

Level 1: Fair values measured by using quoted prices(unadjusted) in active markets for identical assets or
liabilities.
Level 2: Fair values measured by using inputs other thanquoted prices included within Level 1 that are
observable for the assets or liabilities, either directly
or indirectly.
Level 3: Fair values measured by using unobservable inputs
for the assets or liabilities.
If multiple inputs are used that have a significant impact on themeasurement of fair value, fair value is classified at the lowest
level in the fair value measurement among the levels to which
each of these inputs belongs.
(1) The financial assets and liabilities measured at the fairvalues in the consolidated balance sheet
Millions of Yen
March 31, 2023
Securities:
Available-for-sale securities:
National government bonds
Local government bonds
Corporate bonds
Equity securities
Other
Total assets

Level 1

¥ 545,608

Total assets

Total

¥

Deposits
Borrowed money¥ 8,167,285
1,546,030

¥

6,967

¥ 8,167,285
1,552,997

Total liabilities¥ 9,713,315

¥

6,967

¥ 9,720,282

Level 2

Level 3

Total

March 31, 2022
Securities:
Held-to-maturity securities:
National government bonds
Loans and bills discounted

Level 1

¥

101

¥

101

¥ 5,922,770¥

101
5,922,770¥ 5,922,770¥ 5,922,871

6,678¥10,136,168¥2,564,664

March 31, 2023

33,365(9,718)(158)¥

Securities:
Held-to-maturity securities:
National government bonds
Loans and bills discounted

23,489¥Level 2492,725
89,298¥¥1,388,906¥1,076,041¥

Total derivative transactions¥

77

March 31, 2023

Level 1

Level 2

$ 4,086,341$

53,417

Level 3

13,671
308,214471,66760
282,42877

53,02253,02233,365(9,718)(158)
23,489Total¥ 820,553
308,214524,690492,786
371,727¥2,517,971¥

25,303(3,667)¥25,303(3,667)
77¥

21,636¥

21,713

Level 3Total

3,853,380
927,793

8,197
2,560,915
4,039,838
2,623
3,328,932

400,068$ 4,094,538
2,560,915
4,439,907
3,856,003
4,256,725$ 8,867,515$ 9,940,507$ 400,068$19,208,091

Derivative transactions:Interest rate swaps
Currency derivatives
Bond derivatives$ 249,890(72,783)(1,183)$ 249,890(72,783)(1,183)

Total derivative transactions$ 175,923$ 175,923(2) The financial assets and liabilities not measured at the fairvalues in the consolidated balance sheet

ANNUAL REPORT 2 0 2 3¥ 6,074,922¥

53,417

Thousands of U.S. Dollars

105¥ 6,074,822¥10,129,489

¥

¥

100
6,074,822

Total liabilities¥1,327,256¥ 806,882

100¥¥ 8,049,968
2,086,200¥1,183,990

Level 1¥

¥ 6,074,822

Total

6,678

514,503
123,878¥

100

Level 3

¥

¥

¥

¥

Level 2

¥ 8,049,968
2,079,521¥

Total assets

Total assets

Level 1

Deposits
Borrowed money

Derivative transactions:Interest rate swaps
Currency derivatives
Bond derivatives

Securities:
Available-for-sale securities:
National government bonds
Local government bonds
Corporate bonds
Equity securities
Other

Securities:
Held-to-maturity securities:
National government bonds
Loans and bills discounted¥ 546,702
341,933
592,816
514,853
568,358

1,094
341,933
539,399350
444,479

Total derivative transactions

Securities:
Available-for-sale securities:
National government bonds
Local government bonds
Corporate bonds
Equity securities
Other

Level 3

March 31, 2023

Total assets

Derivative transactions:Interest rate swaps
Currency derivatives
Bond derivatives

March 31, 2022

Level 2Millions of Yen

Thousands of U.S. Dollars

Total assets

Level 1

$

750

$

750

Level 2

Level 345,497,468

Total

$

750
45,497,468$45,497,468$45,498,219

Deposits
Negotiable certificates of deposit
Borrowed money$61,169,001
11,579,014$

52,186$61,169,001
11,631,200

Total liabilities$72,748,015$

52,186$72,800,202(Note 1)Explanation of valuation techniques and valuation
inputs used in fair value measurements
Securities
In principle, the fair values of stocks are based on the market
price. They are mainly classified into Level 1 depending on thelevel of market activity. The fair values of securities withmarket prices other than stocks are based on the market price.
Government bonds are classified into Level 1 and other bonds
are classified into Level 2.
Investment trusts with trading prices in an active market areclassified as Level 1. Among investment trusts that do not havetrading prices in an active market, those with no restrictions on
redemption are classified as Level 2, and are valued using NAV.
Among investment trusts that do not have trading prices in an
active market, those with restrictions on redemption are valued
using NAV.
Fair values of private placement bonds are measured bydiscounting the total amount of principal and interest andothers at interest rates based on the discount rate reflecting
expected loss and various risk factors by categories based on
the internal ratings and terms and are mainly categorized as
Level 3 since the discount rate is unobservable.
Information relating to securities for holding purpose isincluded in Note 8.
Loans and Bills Discounted
Because floating-rate loans are immediately affected by the
movement of interest rates, the carrying amounts of theseloans are equivalent to fair values in cases where the credit riskof debtors has not totally changed from the execution of theloans. For fixed-rate loans used to fund business, fair values are
determined by discounting the total amounts of the principal
and interest at market rates plus spreads. The spreads aredefined in internal guidelines. For fixed-rate loans other thanbusiness funds, fair values are determined by discounting thetotal amounts of the principal and interest at expected rates if
the Bank newly executes similar loans to customers. Such
expected rates are determined according to the loans' type andperiod. The carrying amounts of fixed-rate loans other thanbusiness funds with short maturity (less than one year)
approximate equivalent to the fair values.
For loans to "Bankrupt," "Defacto Bankrupt" and "In danger ofbankruptcy," a reserve for possible loan losses calculated fromthe current value of expected future cash flows or from theexpected amount to be collected through disposal of collateralor execution of guarantees is provided. Therefore, the carrying
amounts at the consolidated balance sheet date, net of reserveamounts, approximate fair values.
Specific loans in which the loan amount can be increased or
decreased within the collateral amount have no maturity dates.
The carrying amounts of such loans approximate to the fairvalues because of the loans' period and conditions.
Fair value of those loans is categorized as Level 3.
Deposits and Negotiable Certificates of Deposit
Fair values of demand deposits are measured at the expectedamount to be paid to depositors from the Bank at theconsolidated balance sheet date (book values). For time
deposits, according to each period, fair values are measured at
the total amount of the principal and interest discounted at therate that the Bank applies to new deposits.
Fair value of those is categorized as Level 2.
Borrowed Money
Because floating-rate borrowed money is immediately affectedby the movement of interest rates, the carrying value of thisborrowed money is equivalent to fair value in cases where thecredit risk of consolidated subsidiaries has not totally changed
from when the money was borrowed. The fair value of fixedrate borrowed money, which is classified in accordance with its
period, is estimated by discounting future cash flows, using
rates that would be offered to similar borrowings. The carrying
value of borrowed money whose term is short (within oneyear) approximates the fair value and is therefore deemed
equal to the fair value.
Fair value of those is mainly categorized as Level 2.
Derivative Transactions
Derivative transactions that can be measured at unadjusted
quoted prices in active markets are categorized as Level 1,
which includes such transactions as bonds futures and interest
rate futures.
However, since most derivative transactions are over-thecounter transactions and there are no quoted market prices,market values are measured using valuation techniques suchas the discounted cash flow method and the Black-Scholesmodel, depending on the type of transaction and the maturity
period. The main inputs which are used in those valuation
techniques are interest rate, currency rate, volatility and others.
In addition, price adjustments based on credit risk ofcounterparty and credit risk of ourselves and price adjustments
are made.
When unobservable inputs are not used or impact ofunobservable inputs are not material, transactions are
categorized as Level 2.
(Note 2)Information relating to fair values of Level 3 among
the financial instruments recorded at fair value in the
consolidated balance sheet(1) Quantitative information of significant unobservablevaluation inputs

Principal
Significant
Range of
Valuation Unobservable Valuation Weighted
March 31, 2023 Technique Valuation Input
Input
Average
Securities:
Available-for-sale Discounted Default rate 0.0%–8.0%
Bondscash flow Loss rate at themethod time of default 30.2%–100.0%

0.3%
75.9%

Principal
Significant
Range of
Valuation Unobservable Valuation Weighted
March 31, 2022 Technique Valuation Input
Input
Average
Securities:
Available-for-sale Discounted Default rate 0.0%–8.1%
Bondscash flow Loss rate at themethod time of default 28.8%–99.7%

0.4%
74.6%

(2) Adjustment sheet from beginning balance to endingbalance as of period and realized gains (losses) recognized
as gains (losses) for the period
Securities
Available-for-Sale
Private Placement Bonds
Thousands of
U.S. Dollars

Millions of Yen
2023

2022

Beginning balance
Recorded to gains for the period
Recorded to other comprehensive income
Net amount of purchase, sale, settlement
Transfer to fair values of Level 3
Transfer from fair values of Level 3¥ 53,022¥ 48,968

Ending balance as of period¥ 53,417

Unrealized gains (losses) on financial assets
and liabilities held as of the consolidatedbalance sheet date among the amountrecorded to gains (losses) for the period

¥

2023

$ 397,116
1
(128)
82
4,182
2,867

11
382

¥ 53,022(279) ¥

$ 400,068(290) $ (2,090)(3) Explanation of the process of fair value measurement
In the Bank, middle-offices have established policies andprocedures related to the measurement of fair values, andaccording to these, back-offices measure the fair values.
For the fair values, the validity of the valuation techniquesand valuation inputs used in fair value measurement areverified by back-offices and front-offices. The results of theverification are reported to middle-offices every fiscal year,
and the appropriateness of policies and procedures are
ensured that related to the measurement of fair values.
In fair value measurement, valuation models in which thenature, characteristics and risks of individual assets are mostappropriately reflected are used.
In addition, when quoted prices obtained from third parties
are used, the validity of the prices is verified by appropriate
methods such as confirmation of valuation techniques andused valuation inputs and comparison with the fair values ofsimilar financial instruments.
(4) Explanation of the impact on fair values in the case where
significant unobservable inputs are varied
Significant unobservable inputs used in calculating the fairvalue of private bonds are the default rate and the loss given
default rate. Each significant increase (decrease) in thedefault rate and the loss given default would beaccompanied by a decrease (increase) of the fair values. Thechanges of the default rate are generally accompanied bychanges in the same direction as the assumptions of the loss
given default rate.
(Note 3)Information relating to treatment of investment trustbase price as fair value
The amendment of "Guidelines for Applying
Accounting Standards for Calculation of Market Value"(Guidelines for Applying Corporate Accounting

ANNUAL REPORT 2 0 2 3106Standards, Corporate Accounting Standards
Committee No. 31) on June 17, 2021, Article 24-3 and24-9 allows investment trusts without fair market value
to consider the base price as fair market value.
Available-for-sale securities are not included theseinvestment trusts.
Adjustment sheet from beginning balance to ending balance asof period and realized gains (losses) recognized as gains(losses) for the period
Investment Trusts
Article 24-3 Applied
Millions of Thousands of
Yen
U.S. Dollars
2023

2023

Beginning balance
Recorded to gains for the period
Recorded to other comprehensive income
Net amount of purchase, sale, settlement¥ 20,550 $153,909
519
3,892
(640)
(4,797)4,530
33,932Ending balance as of period¥ 24,959$186,937

Unrealized gains (losses) on financial assets
and liabilities held as of the consolidatedbalance sheet date among the amountrecorded to gains (losses) for the period¥$ 1,147

153

Investment Trusts
Article 24-9 Applied
Millions of Thousands of
U.S. Dollars
Yen
2023

2023

Beginning balance
Recorded to gains for the period
Recorded to other comprehensive income
Net amount of purchase, sale, settlement¥ 23,563$176,479

514
800

3,849
5,991

Ending balance as of period¥ 24,877$186,320

Unrealized gains (losses) on financial assets
and liabilities held as of the consolidatedbalance sheet date among the amountrecorded to gains (losses) for the period

¥

5,385

$40,336

Derivatives that the Bank and certain consolidated subsidiaries
use are as follows:
Interest rate-related transactions: Interest rate swaps and interest rate
options
Currency-related transactions:
Currency swaps, currency options, andforward foreign exchange contracts
Stock-related transactions:
Stock index futures and stock index
future options
Bond-related transactions:
Bond futures and bond future options
Other transactions:
Earthquake derivatives
The Bank and certain subsidiaries use derivatives primarily tohedge risks for customers to maximize the profit of their own
trading account and to manage the potential risks in their own
portfolio as a part of ALM.
Derivatives are subject to market risk and credit risk. Market
risk is the exposure created by potential fluctuations in market
conditions, including interest rates, foreign exchange rates, or
prices of bonds. Credit risk is the possibility that a loss may
result from a counterparty's failure to perform according to theterms and conditions of the contract.
The Bank comprehensively controls derivative risks of the Bankand certain consolidated subsidiaries in accordance with its
Risk Management Regulations and Market Risk Management
Regulations. The position amounts, market values, and market
risks are reported periodically to the responsible executive
officers and the ALM Committee, where evaluations and

ANNUAL REPORT 2 0 2 3

Risk control of derivatives is the responsibility of the Risk
Management Department independent from the front office.
The Risk Management Department is in charge of controllingmarket risks in order to make the risk control system work
effectively.
On the other hand, concerning credit risk management, theBank sets up credit limits of customers according to their credit
standings and manages it strictly not to exceed each credit
ceiling of customers.
It should be noted that the nominal contract value or notional
principal amount is used in determining the value of receipts
or payments of interest and as an indicator representative of
the volume of transactions, but those values do not necessarilyreflect such things as market risk or credit risk.

Derivative Transactions to Which Hedge Accounting Is Not Applied at March 31, 2023
Millions of Yen
Contract orContract Amount
Notional Amount Due after 1 Year

Thousands of U.S. Dollars

Fair Value

Unrealized
Contract orContract Amount
Gains (Losses) Notional Amount Due after 1 Year

Fair Value

Unrealized
Gains (Losses)

Interest Rate-Related
Transactions
Listed—interest-rate futures:
Selling
BuyingOver the counter—interest rate swaps:
Receipt fixed—
payments floating ¥Receipt floating—payments fixed
Receipt floating—payments floating
Over the counter—interest rate options:
Selling
Buying103,514¥72,255¥(338) ¥

(338) $

775,276$

541,157$(2,536) $(2,536)87,37885,411

174

174

654,422639,690

1,309

1,309

82,74286,302

1,921
1,602

(1,203)
1,715(1,203)
1,715

619,700
646,361

14,387
12,000(9,017)
12,851(9,017)
12,851

106,964
106,964

85,74885,748(1,800)
1,666

1,655
(718)

801,109
801,109642,213642,213(13,487)
12,483

12,400(5,383)

(25)
25

(25)
25

23,591
23,591

(190)
190

(190)
190

Currency-Related
Transactions
Over the counter—currency swaps
Over the counter—currency futures:
Selling
BuyingOver the counter—currency options:
Selling
BuyingForeign exchange swaps
Stock-Related
Transactions

28. DERIVATIVES

107

analyses of derivatives are made.

Listed—stock index futures:
Selling
BuyingListed—stock index options:
Selling
Buying
Bond-Related
Transactions
Listed—bond futures:
Selling
BuyingListed—bond futures options:
Selling
BuyingOther Transactions
Over the counter—
earthquake derivatives
Selling
Buying

3,150
3,150

The contract or notional amounts of derivatives that are shown in the above table do not represent the amounts exchanged by the partiesand do not measure the Group's exposure to credit or market risk.

ANNUAL REPORT 2 0 2 3108

Derivative Transactions to Which Hedge Accounting Is Applied at March 31, 2023
Millions of Yen
Hedged Item

Contract orContract Amount
Notional Amount Due after 1 Year

Derivative Transactions to Which Hedge Accounting Is Not
Applied at March 31, 2022

Thousands of U.S. Dollars
Fair ValueContract orContract Amount
Notional Amount Due after 1 Year

Millions of Yen

Loans and bills discounted,
available-for-sale securities,
and other financial assets¥

50,000¥650,892

50,000626,953¥425$

33,103

374,475$

4,874,871

374,475
4,695,579$

3,187
247,931

Currency-Related
Transactions
Deferral hedge method:
Currency swaps
Foreign currency loans andForeign exchange swaps
deposits
Fair value hedge method
Currency swaps
Foreign currency securities

61,7172,157

33,411(8,768)(13)462,234
16,159250,234(65,675)(97)

10,681

10,681(1,313)80,00080,000(9,840)Bond-Related
Transactions
Listed—bondfutures—sellingOver the counter—bond options:
Selling
BuyingAvailable-for-sale securities
Available-for-sale securities

11,066
11,066(158)

82,87882,878(1,183)The contract or notional amounts of derivatives that are shown in the above table do not represent the amounts exchanged by the partiesand do not measure the Group's exposure to credit or market risk.
The below interest rate swaps that qualify for hedge accounting and meet specific matching criteria are not remeasured at market value,
but the differential paid or received under the swap agreements is recognized and included in interest expense or income.
Millions of Yen
Hedged Item

Contract orContract Amount
Notional Amount Due after 1 Year

Thousands of U.S. Dollars
Fair ValueContract orContract Amount
Notional Amount Due after 1 Year

Interest Rate-Related
Transactions
Interest rate swaps—Receipt
fixed—payments floating Loans and deposits
Interest rate swaps—Receipt
floating—payments fixedInterest rate swaps—Receipt
floating—payments floating¥

24,825
13,490¥24,825
6,453$

185,931101,037$

185,931
48,330Fair Value

Millions of Yen

Contract or Contract Amount
Unrealized
Notional Amount Due after 1 Year Fair Value Gains (Losses)

Fair Value

Interest Rate-Related
Transactions
Interest rate swaps:
Receipt fixed—
payments floating
Receipt floating—payments fixed
Receipt floating—payments floating

Derivative Transactions to Which Hedge Accounting Is Applied
at March 31, 2022
Contract or Contract Amount
Hedged Item Notional Amount Due after 1 Year

Interest Rate-Related
Transactions

Interest Rate-Related
Transactions

Listed—interest-rate futures:
Selling
BuyingOver the counter—interest rate swaps:
Receipt fixed—
payments floating ¥ 129,643
Receipt floating—
74,099payments fixed
Receipt floating—payments floating
10,000Over the counter—interest rate options:
Selling
BuyingInterest rate swaps: Loans and bills
Receipt fixed—
discounted, availablepayments floating for-sale securities,
Receipt floating— and other financial
payments fixed
assets¥946,362
Receipt floating—
145,880
payments floating¥ 84,250
69,353

¥

240

¥

240

(731)

(731)

4

4

51,58344,84044,115(5,150)2,255

Fair value hedge method Foreign currency
securities
Currency swaps

9,793

9,793

(572)

Over the counter—currency swaps
Over the counter—currency futures:
Selling
BuyingOver the counter—currency options:
Selling
BuyingForeign exchange swaps

Listed—bond futures— Available-forselling
sale securities
Over the counter— Available-forbond options:sale securities
Selling
Buying(3,554)3,374(3,554)
3,374

45,51345,51335,94735,947(1,075)
1,056

1,192
(609)

Stock-Related Transactions

15,04777

The contract or notional amounts of derivatives that are shownin the above table do not represent the amounts exchanged by
the parties and do not measure the Group's exposure to credit
or market risk.
The below interest rate swaps that qualify for hedge accounting
and meet specific matching criteria are not remeasured atmarket value, but the differential paid or received under theswap agreements is recognized and included in interest
expense or income.

Listed—stock index futures:
Selling
BuyingListed—stock index options:
Selling
BuyingMillions of Yen
Contract or Contract Amount Fair
Hedged Item Notional Amount Due after 1 Year Value

Bond-Related Transactions
Interest Rate-Related
Transactions

Listed—bond futures:
Selling
BuyingListed—bond futures options:
Selling
BuyingInterest rate swaps—Receipt
fixed—payments floating Loans and deposits
Interest rate swaps—Receipt
floating—payments fixedInterest rate swaps—Receipt
floating—payments floating

Other Transactions
Over the counter—
earthquake derivatives
Selling
Buying(74)

Deferral hedge method:
Currency swaps
Foreign currency
Foreign exchange swaps loans and deposits

Bond-Related
Transactions

3,299
2,834

¥ 25,864

Currency-Related
Transactions

Currency-Related
Transactions

64,49067,805¥918,762

Fair
Value

2,935
2,935

(24)
24

(24)
24

The contract or notional amounts of derivatives that are shownin the above table do not represent the amounts exchanged by
the parties and do not measure the Group's exposure to credit
or market risk.

6,714

6,714

14,27614,1503,000

29. LOAN COMMITMENTS
The Group issues commitments to extend credit and establish
credit lines for overdrafts to meet the financing needs of theircustomers. Unfunded amounts relating to these contracts
totaled ¥1,666,480 million ($12,481,126 thousand) and¥1,664,934 million as of March 31, 2023 and 2022, respectively.
As a large majority of these commitments expire without being
drawn down upon, the unfunded amounts do not necessarily
represent future cash requirements. Many of these agreements
include conditions granting the Bank the right to reject the
drawdown or to reduce the amount on the basis of changes in
the financial circumstances of the borrower or other reasonablegrounds.
In addition, the Bank obtains collateral when necessary to
reduce credit risk related to these commitments.

109

ANNUAL REPORT 2 0 2 3

ANNUAL REPORT 2 0 2 3110

30. OTHER COMPREHENSIVE INCOME (LOSS)

32. SUBSEQUENT EVENTS

33. SEGMENT INFORMATIONThe components of other comprehensive income (loss) for theyears ended March 31, 2023 and 2022, were as follows:a. Dividends
The following appropriations of retained earnings at March
31, 2023, were approved at the Bank's shareholders' meeting
held on June 23, 2023:

Under ASBJ Statement No. 17, "Accounting Standard for Segment Information Disclosures," and ASBJ Guidance No. 20, "Guidance on
Accounting Standard for Segment Information Disclosures," an entity is required to report financial and descriptive information about its
reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria.
Operating segments are components of an entity about which separate financial information is available and such information is evaluatedregularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, segment
information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding
how to allocate resources to operating segments.

Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022
Unrealized gain (loss) on available-for-sale securities:
Losses arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectSubtotal
Deferred gain (loss) on derivatives under hedge accounting:
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectSubtotal
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectSubtotal
Total other comprehensive loss

¥ (27,788) ¥ (42,961) $ (208,125)
26,267
6,212
196,727(1,521)(36,748)(11,397)523
11,086
3,923(997)(25,662)(7,473)
24,953(24,041)
912
(276)
635

18,416(2,273)
16,143(4,899)11,243

186,891(180,059)
6,832(2,073)
4,759

1,714
(705)
12,842(2,840)(2,657)(21,277)(1,126)(3,362)(8,434)
344
1,027
2,582
(781)
(2,334)(5,852)(1,143) ¥ (16,752) $ (8,566)¥

31. PER SHARE DATA
(1) Basic EPS for the years ended March 31, 2023 and 2022, is
as follows:
Millions of Yen Thousands of Shares
Net Income
Attributable to Weighted-Average
SharesYear Ended March 31, 2023 Owners of the Parent
Basic EPS—net income available
to common shareholders
Effect of dilutive—stockacquisition rights
Diluted EPS—net income forcomputation

Yen

U.S. Dollars
EPS¥24,135 483,625 ¥ 49.90 $

0.37

639
¥24,135 484,265 ¥ 49.83 $0.37Year Ended March 31, 2022
Basic EPS—net income available
to common shareholders
Effect of dilutive—stockacquisition rights
Diluted EPS—net income
for computation¥26,667 489,634 ¥ 54.46
616¥26,667 490,251 ¥ 54.39(2) Net assets per share for the years ended March 31, 2023
and 2022, were as follows:Yen
Net assets per share

2023

2022

¥ 1,936.29¥ 1,856.25

2023
$

14.50

Thousands of
U.S. Dollars

Millions of Yen
2023

2022

2023

Net assets
Less stock acquisition rights
Less noncontrolling interests¥ 915,953
288
2,828

¥ 912,698
271
3,499

$6,860,050
2,157
21,187

Net assets attributable to commonshareholders¥ 912,836¥ 908,927$6,836,705

Thousands ofNumber of Shares

111

ANNUAL REPORT 2 0 2 3Year-end cash dividends,¥10.00 ($0.08) per share

¥

2023

2022

471,433

489,657

4,714$

35,308b. Business Combination through Share Exchange
The Bank resolved at the respective meetings of the Board of
Directors held on January 20, 2023, to integratemanagement through a share exchange (the "Share
Exchange") that the Bank would become a wholly-owing
parent company in the Share Exchange, accordingly thebank and THE NAGANO BANK, LTD. (together, the "Banks")entered into the "Share Exchange Agreement" and the"Business Integration Agreement" on January 20, 2023. The
Share Exchange was executed on June 1, 2023 based on the"Share Exchange Agreement" and Nagano Bank became awholly owned of the Bank.
Furthermore, common stock of Nagano Bank was delistedfrom the Tokyo Stock Exchange on May 31, 2023 (lasttrading day was May 30, 2023).
(a) Outline of the business combination(1) Name of acquired company and its business outline
Name of the acquired company:
Business outline:

THE NAGANO BANK, LTD.
Banking(2) Major reason for the business combination
The Banks will transform into a bank that can growwith the region by combining the expertise,relationship, and human assets of the Banks, andprovide better value to the customers, region,
shareholders, employees, etc.
(3) Date of business combination
June 1, 2023 (the effective date of the Share
Exchange)
June 30, 2023 (acquisition date)(4) Legal form of business combination
Share acquisition through the Share Exchange.
(5) Ratio of voting rights acquired
100%(6) Basis for determining the acquirer
It is based on the fact that the Company acquired
100% of voting rights by the Share Exchange.
(b) Acquisition cost of the acquired company and related
details of each class of consideration
Millions of Thousands of
Yen
U.S. Dollars

U.S. Dollars

The net assets per share figure is calculated on the basis of thefollowing:

Number of common stock at fiscal
year-end used for calculation of
net assets per share

Millions of Thousands of
Yen
U.S. Dollars

Consideration for acquisition—Market value of common stockof the Bank of the effective date of
the Share Exchange (June 1, 2023)¥

13,303$

99,633Acquisition cost¥

13,303$

99,633(c) The ratio of allotment of share
For each share of common stock of Nagano Bank, 2.54
shares of common stock of the Bank will be allotted.
(d) Number of new shares to be issued by the Bank in the
Share Exchange
Common stock of the Bank: 22,664,539 shares(1) Description of Reportable Segments
The Group's reportable segments are those for which financial information is available separately and regular evaluation by the Bank's
management is performed in order to decide how resources are allocated among the Group. The Group consists of the banking andleasing segments. Banking consists of the banking and credit card businesses. Leasing consists of the leasing business.
(2) Methods of Measurement for Sales, Profit (Loss), Assets, Liabilities, and Other Items
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, "Summary of Significant Accounting
Policies."(3) Information about Ordinary Income, Profit, Assets, Liabilities, and Other Items, and Information about Disaggregation of Revenue
Millions of Yen
2023
Reportable Segment
Banking
Ordinary income:Revenue from contracts
with customers
Other revenue¥

Outside customers
Intersegment

Leasing

21,272
145,552¥

166,825576

32,646

Total¥

32,646314

21,272
178,199

Other¥

199,471
891

Total

1,767
989

¥

2,756
34

23,040179,188202,228
926

¥

(926)
(926) ¥¥

167,402¥32,960¥200,363¥

2,791

203,154¥

Segment profit (loss)
Segment assets
Segment liabilities
Other:
Depreciation
Interest income
Interest expense
Loss on disposal of assets
Impairment losses of assets
Income taxes
Increase in property,
plant, and equipment
and intangible assets¥

32,924
12,897,980
12,032,544

¥

2,191
96,84557,178¥35,116
12,994,825
12,089,722¥(137) ¥
34,97925,75813,020,584
11,695
12,101,418

¥

2,031
53
166

3,837

Consolidated

¥

Total

3,448
90,84018,078
208
1,462
9,727

¥

Reconciliations

63
148
11

658

5,479
90,893
18,245208
1,462
10,385

207
147

5,543
91,041
18,256208
1,669
10,533

3,510

7,348

19

7,367

23,040179,188202,228202,228(85) ¥
34,893(56,785)
12,963,799(53,572)
12,047,845
5,543
90,83018,108208
1,669
10,533

(211)
(148)

7,367

Millions of Yen
2022
Reportable Segment
Banking
Ordinary income:Revenue from contracts
with customers
Other revenue
Outside customers
Intersegment¥

20,45994,327
114,786
745

Leasing¥

32,52732,527
406

Total

¥

Other

20,459126,855
147,314
1,151

¥

Total

2,009
2,024
4,034
33

¥

22,469128,880
151,349
1,185

Reconciliations

Consolidated¥¥(1,185)

22,469128,880
151,349
151,349

Total¥

115,532¥

32,934¥148,466

¥

4,068

¥

152,534¥(1,185) ¥Segment profit
Segment assets
Segment liabilities
Other:
Depreciation
Interest income
Interest expense
Loss on disposal of assets
Impairment losses of assets
Income taxes
Increase in property,
plant, and equipment
and intangible assets¥

34,92813,276,694
12,413,457

¥

2,098
94,94356,645¥37,026
13,371,638
12,470,103

¥

1,060
27,476
13,122¥38,087
13,399,114
12,483,225¥(39) ¥
38,047(55,318)
13,343,796(52,128)
12,431,097

3,468
72,794
4,291
451
302
10,308

2,040
48
190

51
138
10

595

5,508
72,842
4,482
451
302
10,904303

5,560
72,981
4,492
451
302
11,208

4,368

3,610

7,978

245

8,224

(178)
(173)
(3)

5,560
72,803
4,318
451
302
11,204
8,224

ANNUAL REPORT 2 0 2 3

112

Thousands of U.S. Dollars
2023
Reportable Segment
Banking
Ordinary income:Revenue from contracts
with customers
Other revenue$

Leasing

Total

159,323
1,090,117$

244,506

1,249,440
4,320$

244,506
2,354

1,493,947
6,674

Total

$ 1,253,760$

246,861$ 1,500,622

Segment profit (loss)
Segment assets
Segment liabilities
Other:
Depreciation
Interest income
Interest expense
Loss on disposal of assets
Impairment losses of assets
Income taxes
Increase in property,
plant, and equipment
and intangible assets$$

16,416725,328
428,237$

Outside customers
Intersegment

246,591
96,599,610
90,117,919
25,825680,348
135,400
12,874
10,95572,854

15,214398
1,247

28,740$159,323
1,334,624

263,007
97,324,939
90,546,157

Other

Total

¥ 41,893 ¥ 51,550 ¥ 32,527 ¥ 25,377 ¥151,349
Thousands of U.S. Dollars
2023
Lending Investment Leasing
Operations Operations Operations

Sales to externalcustomers

Other

Total

$ 372,241 $ 693,098 $ 244,506 $ 204,747 $1,514,594(5) Information about Geographical Areasa. Ordinary income
This information is not disclosed as the domestic shareof ordinary income from external customers exceeds
90% of ordinary income in the consolidated statement ofincome.
b. Tangible fixed assets
This information is not disclosed as the domestic shareof tangible fixed assets exceeds 90% of tangible fixed
assets in the consolidated balance sheet.
(6) Information about Major Customers
This information is not disclosed as ordinary income from a
specific customer does not exceed 10% of ordinary incomein the consolidated statement of income.
******

113

ANNUAL REPORT 2 0 2 3(6,935)$20,908$ 1,521,530$(6,935) $ 1,514,594$(1,028) $261,979
192,921
97,517,860
87,59090,633,747$(643) $
261,335(425,295)
97,092,564(401,233)
90,232,514

55,181

2022

172,562
1,342,032$

146¥ 49,701 ¥ 92,542 ¥ 32,646 ¥ 27,337 ¥202,228$

1,514,594
6,935

55,035

Total

Consolidated

20,647261

26,294

Other

Reconciliations

172,562
1,342,032

4,931

Millions of Yen

Sales to externalcustomers$

41,518681,859
136,733
12,977
12,50678,893

2023

Lending Investment Leasing
Operations Operations Operations

13,239
7,408

478
1,111
86
102
1,550
1,107

Millions of Yen

Sales to externalcustomers

$

Total

41,039680,747
136,647
12,875
10,95577,786(4) Information about Services

Lending Investment Leasing
Operations Operations Operations

Other(1,582)(1,109)(3)

1,514,594

41,518680,276
135,624
12,977
12,50678,88955,181