TO K YO
Kiraboshi
Financial
Group

2023
Annual Report

Tokyo Kiraboshi Financial Group, Inc.

June 10, 2024
To whom it may concern:Tokyo Kiraboshi Financial Group, Inc.

Notification of Partial Corrections to Annual Report 2023
Some figures in our Annual Report 2023 were incorrect. We have corrected them as indicated below.
These corrections are not reflected in the data already posted on our corporate website. Details of the corrections
can be found in the table on the page following the cover of the Annual Report.
*Items subject to correction are underlined.

P27～P29． Message from the Chief Financial Officer
Progress on Key Goal Indicators (KGI) in the Medium-Term Business Plan
(Before Correction)
Compared(¥ billion)

FY2021 (actual)

FY2022 (plan)

FY2022 (actual)

ROE (FG, consolidated)

5.7%

5.0%

6.5%

+1.5%pt

65.3%

59.8%

55.5%

–4.3%pt

18.1

16.0

21.1

+5.1

12.6

20.5

21.6

+1.1

0.1

0.4

(1.5)

(1.9)

8.4%

8.3%

8.1%

–0.2%pt

Core OHR (Kiraboshi Bank, nonconsolidated)
Net income (FG, consolidated)to the plan

Profit from customer business(Kiraboshi Bank, nonconsolidated)
Contribution of subsidiaries toconsolidated income (FG,
consolidated)
Capital ratio (FG, consolidated)1

(After Correction)
Compared(¥ billion)

FY2021 (actual)

FY2022 (plan)

FY2022 (actual)

ROE (FG, consolidated)

5.7%

5.0%

6.5%

+1.5%pt

65.3%

59.8%

55.5%

–4.3%pt

18.1

16.0

21.1

+5.1

12.6

20.5

21.6

+1.1

0.1

0.4

(1.5)

(1.9)

8.3%

8.3%

8.0%

–0.2%pt

Core OHR (Kiraboshi Bank, nonconsolidated)
Net income (FG, consolidated)to the plan

Profit from customer business(Kiraboshi Bank, nonconsolidated)
Contribution of subsidiaries toconsolidated income (FG,
consolidated)
Capital ratio (FG, consolidated)

Analysis of Financial Management Factors to Improve ROE
Fig. 1: FG consolidated(Before Correction)(¥ billion)

FY2021 (actual)

FY2022 (actual)

YoY change

ROE

5.7%

6.5%

+0.7%pt

11.6

17.5

+5.9

Capital ratio

8.4%

8.1%

–0.2%pt

RORA

0.4%

0.5%

+0.0%pt(¥ billion)

FY2021 (actual)

FY2022 (actual)

YoY change

ROE

5.7%

6.5%

+0.7%pt

11.6

17.5

+5.9

Capital ratio

8.3%

8.0%

–0.2%pt

RORA

0.4%

0.5%

+0.0%pt

Net income (excluding special
factors)(After Correction)

Net income (excluding special
factors)2

Changes in Risk Assets
Fig. 3: Changes in risk assets(Before Correction)
2021/3 Actual¥3,261.4 billion

Commercially viable loans+¥281.9 billion

Securities, etc.

–¥28.8 billion

PE funds+¥11.6 billion

Others+¥28.9 billion

2022/3 Actual¥3,555.0 billion

Commercially viable loans+¥315.9 billion

Securities, etc.

–¥21.9 billion

PE funds+¥10.8 billion

Others+¥19.9 billion

2023/3 Actual¥3,879.7 billion

Commercially viable loans+¥208.3 billion

Securities, etc.

–¥2.9 billion

PE funds+¥38.8 billion

Others+¥16.7 billion

2024/3 Published plan

¥4,140.6 billion(After Correction)
2021/3 Actual¥3,263.8 billion

Commercially viable loans+¥292.9 billion

Securities, etc.

–¥28.8 billion

PE funds+¥11.6 billion

Others+¥28.9 billion

2022/3 Actual¥3,568.4 billion

Commercially viable loans+¥329.4 billion

Securities, etc.

–¥21.9 billion

PE funds+¥10.8 billion

Others+¥19.9 billion

2023/3 Actual¥3,906.6 billion

Commercially viable loans+¥181.4 billion

Securities, etc.

–¥2.9 billion

PE funds+¥38.8 billion

Others+¥16.7 billion

2024/3 Published plan

¥4,140.6 billion

3Capital Management to Improve PBR
Changes in capital allocations(Before Correction)
21/3

8.74%
Accumulated internal reserves+1.28%

Financial intermediary function (local contributions) –1.16%
Growth investment–0.52%

Shareholder returns–0.19%

23/3

8.15%
Accumulated internal reserves+0.63%

Financial intermediary function (local contributions) –0.53%
Growth investment–0.11%

Shareholder returns–0.12%

24/3

8% level(After Correction)
21/3

8.73%
Accumulated internal reserves+1.25%

Financial intermediary function (local contributions) –1.23%
Growth investment–0.48%

Shareholder returns–0.18%

23/3

8.09%
Accumulated internal reserves+0.68%

Financial intermediary function (local contributions) –0.39%
Growth investment–0.18%

Shareholder returns–0.13%

24/3

8% level

4

P32. Overview of the Medium-Term Business Plan (FY2021 to FY2023)
Financial Targets (KGIs) and KPIs under the Medium-Term Business Plan
(Before Correction)
23/3 <MediumKGIs

22/3 <results>

Term Business23/3 <results>Plan>(1) ROE <consolidated>(2) Core OHR <Kiraboshi Bank
non-consolidated>(3) Net income <consolidated>

5.0%

6.5%

+1.5%pt

65.3%

59.8%

55.5%

+4.3%pt¥18.1 billion¥16.0 billion¥21.1 billion¥12.6 billion¥20.5 billion¥21.6 billion¥0.12 billion¥0.4 billion¥(1.5) billion

8.4%

8.3%

8.1%

consolidated>(5) Contribution of subsidiaries
to consolidated income<consolidated>(6) Capital ratio <consolidated>to the plan

5.7%(4) Profit from customer business<Kiraboshi Bank non-Compared+¥5.1
billion+¥1.1
billion¥(1.9)
billion–0.2%pt(After Correction)
23/3 <MediumKGIs

22/3 <results>

Term Business23/3 <results>Plan>(1) ROE <consolidated>(2) Core OHR <Kiraboshi Bank
non-consolidated>(3) Net income <consolidated>

5.0%

6.5%

+1.5%pt

65.3%

59.8%

55.5%

+4.3%pt¥18.1 billion¥16.0 billion¥21.1 billion¥12.6 billion¥20.5 billion¥21.6 billion¥0.12 billion¥0.4 billion¥(1.5) billion

8.3%

8.3%

8.0%

consolidated>(5) Contribution of subsidiaries
to consolidated income<consolidated>(6) Capital ratio <consolidated>to the plan

5.7%(4) Profit from customer business<Kiraboshi Bank non-Compared5+¥5.1
billion+¥1.1
billion¥(1.9)
billion–0.2%pt

P33. Financial Highlights/Financial Targets (KGIs) under the Medium-Term Business Plan
6. Capital ratio <FG consolidated> (%)(Before Correction)
20/3

8.6%

21/3

8.7%

22/3

8.4%

23/3

8.1%

24/3 (planned)

8.3%(After Correction)
20/3

8.6%

21/3

8.7%

22/3

8.3%

23/3

8.0%

24/3 (planned)

8.3%

6

<Brand Slogan>

Giving our all, for TOKYO.
Giving our all, for TOKYO.
We are committed to the challenges facing Tokyoand helping everyone shine.

Support for
older adults
Support forchild-rearing
generation

SMEs
Decarbonization
initiatives

Ensuring
foreigners andolder adults
have access tofinancialservices

Start-up
support

SMEs
Business
succession andbusiness exit

Support for
medicalinstitutions(management)

Accelerationof digitalizationand ideal stateof localcommunities

Financialservices
support for the
younger
generation

Diversity andinclusion

Contents
Tokyo Kiraboshi Financial Group
Giving our all, for TOKYO./Kiraboshi Philosophy･･･････････1
Contents･ ････････････････････････････････････････････････2
Tokyo Kiraboshi Financial Group’s Efforts Towards Transformation･･･3
Message from the President･･･････････････････････････････5
Priority Issues･･･････････････････････････････････････････ 11

Socialinfrastructure
supportTokyo Kiraboshi Financial Group’s Value Creation
Value Creation Process･････････････････････････････････ 13
Comprehensive Strength of All 21 Group Companies････ 15
Well-Being and Human Capital Management････････････ 17
Roundtable Discussion on Human Capital Management････ 19
Kiraboshi Group’s Human Capital Management･････････ 21Tokyo Kiraboshi Financial Group’s Growth Strategy

Kiraboshi Philosophy
Guided by awareness, values and mindset that are to be shared by all officers and employees,

accomplish the goals of contributing to society, seeking growth of theorganization, achieving self-fulfillment and realizing one’s own happinessMessage from the Chief Financial Officer････････････････ 27
Overview of the Medium-Term Business Plan (FY2021 to FY2023)････ 31
Financial Highlights/Financial Targets (KGIs)
under the Medium-Term Business Plan･･････････････････ 33
Non-financial Highlights･････････････････････････････････ 34
Profit from Customer Business･ ･････････････････････････ 35
Roundtable Discussion on Value Creation･･･････････････ 37
Medical and Welfare Business Division････････････････ 39
Trust Business Division････････････････････････････････ 40

Digital Strategy･････････････････････････････････････････ 41
UI Bank･･･････････････････････････････････････････････ 43
Kiraboshi Tech････････････････････････････････････････ 44
Corporate Customer Strategy･･･････････････････････････ 45
Key Points of Corporate Customer Strategy/
Kiraboshi Group’s Market Environment････････････････ 45
MF Division/SF Division/RF Division/PE Office･････････ 46
Kiraboshi Capital･･････････････････････････････････････ 48
International Strategy Division･････････････････････････ 49
SS (Startup Studio) Division･ ･･････････････････････････ 50
Retail Customer Strategy････････････････････････････････ 51
Initiatives Aimed at Sustainability･････････････････････････ 52
Initiatives to Achieve Carbon Neutrality･････････････････ 53
Initiatives to Address TCFD (Task Force on Climate-related
Financial Disclosures)･････････････････････････････････････ 55
Sustainability Indicator and Targets･････････････････････ 58
Management Base That Supports Value Creation
Risk Management･･･････････････････････････････････････ 59
Compliance･････････････････････････････････････････････ 63
Corporate Governance･ ････････････････････････････････ 65Tokyo Kiraboshi Financial Group, Inc.･･･････････････････ 71
Kiraboshi Bank, Ltd.,/UI Bank Co., Ltd.･･･････････････････ 73
Financial Data and Corporate Data･･･････････････････････ 75

Three principles of action guideline for “Kiraboshibito” to put the “Kiraboshi philosophy” into practice

Kiraboshibito

1 │Tokyo Kiraboshi Financial Group, Inc.│

Principle/sense of mission

An individual with “high aspirations”

Ingenuity/perseverance

An individual who always thinks “how it can be done”

Responsibility/courage

An individual who is committed to results, who continuously takes on courageous challenges

Editorial Policy
The Company prepared this Annual Report that summarized the value creation which contributes to a sustainable growthof society, ﬁnancial information and other matters, for the purpose of, in an easy-to-understand manner, communicating to
all stakeholders speciﬁc initiatives for establishing “Kiraboshi Brand” which exudes presence in the tokyo metropolitan area,
as well as embodying a “comprehensive service business that is also strong in ﬁnance.”
This Report was edited in reference to the framework offered by International Integrated Reporting Council (IIRC), Guidance
for Collaborative Value Creation advocated by the Ministry of Economy, Trade and Industry, and other materials.

│Tokyo Kiraboshi Financial Group, Inc.│ 2

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial GroupTokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Tokyo Kiraboshi Financial Group’s Efforts Towards Transformation
Management Philosophy

On May 1, 2018, the Tokyo Tomin Bank, Limited, the Yachiyo Bank, Limited and the ShinGinko Tokyo,

Limited merged to form the new “Kiraboshi Bank.” With the merger of the three banks, the business

To be a ﬁnancial group for small and medium-sized enterprisecustomers and individual customers in the Tokyo metropolitan
area that will contribute to the development of local communities
through comprehensive ﬁnancial services.

name of the group was changed from Tokyo TY Financial Group to “Tokyo Kiraboshi Financial Group.”With the management philosophy “To be a financial group for small and medium-sized enterprisecustomers and individual customers in the Tokyo metropolitan area that will contribute to thedevelopment of local communities through comprehensive financial services,” we aim to develop a“comprehensive service business that is also strong in ﬁnance.”

2014

Relocation from Shinjuku-ku
to Minato-ku (to the headoﬃce of Kiraboshi Bank)The Tokyo Tomin Bank, Limited and the Yachiyo Bank,
Limited merged to form Tokyo TY Financial Group.

To enhance groupfunction

2016

Tokyo TY Financial Group and the
ShinGinko Tokyo, Limited merged.

2018

2017
To strengthen consulting
functions aimed at enhancing
comprehensive ﬁnancial services
Apr
Establishment of
Kiraboshi Consulting
Nov
Establishment of
Kiraboshi Tech

To expand into the FinTech area

Apr

Formulation of theMedium-TermBusiness Plan “Startup
Kiraboshi”
May

Birth ofTokyo Kiraboshi
Financial Group

2019
Aug

2020
May

Systems integration(Kiraboshi Bank)
June

Conversion of Tokyo
Kiraboshi Lease,
Kiraboshi System, andKiraboshi JCB to whollyowned subsidiaries
Oct
Establishment of
KIRABOSHI BUSINESSCONSULTING
VIETNAM, a consulting
subsidiary in Vietnam

Head Oﬃce relocation
Aug
Establishment of
Kiraboshi Life Design
Securities

To embrace a newchallenge of developing
securities business in
the Tokyo area

May

2022

2021

Jan
Opening of UI Bank Co., Ltd.

Mar

Jan

Kiraboshi Insurance
Agency made into an
equity method aﬃliate
of Kiraboshi Bank
Apr
Change of businessname from Kiraboshi
Service to Kiraboshi
Business Oﬃce Service
Apr

Formulation of new
Medium-Term Business Plan
Aug

Business alliance of
Kiraboshi Bank with The
Bank of Yokohama instructured ﬁnance, etc.

Nov

Sept

Grand opening of “KicSpace
HANEDA” businessincubation facilities

Establishment of Kiraboshi Capital

Nov

Birth of Kiraboshi Bank

Establishment of StarBridgebusiness consulting (Beijing)Co., Ltd., a Japan-China
joint venture consulting
subsidiary in Beijing
July

2023

Vision of the Future

Comprehensive
service businessthat is also strong
in ﬁnance

May
Announcing the brandslogan – Giving our all,for TOKYO.
July
Opening of Bangkok
Representative Office
Sept
Opening of Shin-tsunashima
Branch Office (scheduled)

Be.Brave, Inc., an advertisement
planning and production
company, made into a subsidiary,
contributing to advancement of
the banking service
Oct
Kiraboshi Servicer, Ltd.
made into a subsidiary

Expansion of non-face-toface service that puts thecustomer ﬁrst

Launch of “LaLaQ” app

To respond to the needs inmezzanine, funding (incl. IPOs)

Be a Tokyo-based platform owner that creates new value for customers

External movements

2014

2016

2018

2020

2021

2022

2023

Consumption tax raised to 8%

Start of Individual Number System
Implementation of negative interest rate policy by BoJ

TPP11 takes effectEstablishment of work-style reform bill

UK withdraws from EU
Global spread of COVID-19

Joe Biden inaugurated as
46th President of
the United States
Tokyo 2020 Olympic andParalympic Games held

Escalating tension in the
Russia-Ukraine situation
Weaker Yen
Global inﬂation

COVID-19 reclassified as Class 5
Nikkei Stock Average reaches
post-bubble highHolding of G7 Hiroshima Summit

2015
Greek ﬁnancial crisis
FRB lifts zero interest policy
Launch of Asian Infrastructure Investment Bank

3 │Tokyo Kiraboshi Financial Group, Inc.│

2017
Donald Trump inaugurated as
45th President of the United States

2019
Name of era changed from Heisei to Reiwa
Consumption tax raised to 10%
5G service commences in countries worldwide│Tokyo Kiraboshi Financial Group, Inc.│ 4

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial GroupTokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from the President

Boost the Group’s presence throughthe Giving our all, for TOKYO. project

Our quest to become a comprehensive
service business that is also strong in finance
The Tokyo Kiraboshi Financial Group is a uniqueand unparalleled regional metropolitan financialgroup, and there are still many areas in which we
can play a useful role in the fertile Tokyo market.
Naturally, Tokyo is a fiercely competitive market.
Institutions such as megabanks, which maintaina f i r m g ri p o ve r t h e e n t i re m a r ke t , p o s eformidable barriers to entry. It is also hard for us
to focus on a narrow commercial area to covero n fo o t i n t h e way a Shi n ki n b a n k d o es .
Furthermore, regional financial institutions are
expanding into each other’s traditional territories.
However, the Kiraboshi Group is able to operate
freely, flexibly and in a way that no other regional
financial institutions can precisely because theTokyo area boasts a complex mix of financial
institutions with different characteristics. Being
able to focus on the contributions to local
co m m u n i t i e s t h a t w e o u rs e l ve s co n si d e rimportant is a huge advantage.

5 │Tokyo Kiraboshi Financial Group, Inc.│The Japanese financial industry continues toundergo dramatic change due to adjustments insocial structures, such as the aging populationand declining birthrate, systemically low interest
rates, and cross-industry penetration. In the five
years since its founding, the Kiraboshi Group has
ascertained exactly where its purpose and valuelies, and explored and challenged different areas
accordingly. The fact that these efforts are finallybearing fruit in terms of earnings confirms we areon the right track with our targeted businessconcept to create a comprehensive service
business that is also strong in finance.

Customer consulting focus boosts FY2022
consolidated net income to ¥21.1 billion
The Tokyo Kiraboshi Financial Group made afresh start following the merger of three banks(Tokyo Tomin Bank, Yachiyo Bank, and ShinGinko
Tokyo) into Kiraboshi Bank in May 2018. The
Group achieved net income of ¥21.1 billion in
FY2022, the halfway point of our Medium-Term

Hisanobu Watanabe
President,
Tokyo Kiraboshi Financial Group, Inc.
President, Kiraboshi Bank, Ltd.

Business Plan (2021-2023), and we are alreadyexpected to achieve, or surpass, all numericaltarget s in the pl an’s final year. This is animpressive achievement given our core business
was running at a loss at the time of the merger.
Many people inside and outside the Groupthought our plan to achieve net income of ¥20
billion in the first five years was somewhat
ambitious. Our aim to create a comprehensive
service business that is also strong in finance
was al so p erceive d as u nusual . H owever,ultimately, this has enabled us to improve ourbusiness performance by shifting from productout banking business based on products to
consulting services designed to solve individual
customer problems.
Japanese banks are often considered to beconservative and cautious, as illustrated by thephrase, “banks wouldn’t cross a stone bridgeeven if they hit it first to check its firmness.”
However, we believe that taking appropriate
risks based on thorough feasibility evaluations
will ultimately prove beneficial to our customers.

In addition to building main bank relationships
with customers, we have built a solid trackrecord in medium-risk, medium-return businessfinancing, such as leveraged buyout (LBO) andmezzanine loans.

Our varied service portfolio
Our strength lies in our Tokyo base and theability of our staff to build long-term customer
relationships. To optimize these strengths, it isvital that we increase the number of customers
who use us as their main bank, which currently
sits at less than 10%. Our business financing
sales headquarters, which started with two
specialists in main bank relationships, now
boasts over 100 employees.
Committed to providing the very best scheme
for our customers, we engage in businessfinancing as well as equity investment, and weestablished an engagement fund to help increasecustomers’ medium- to long-term corporate
value. We have already invested ¥8 billion in five

│Tokyo Kiraboshi Financial Group, Inc.│ 6

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial GroupTokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from the President

Nurturing a Group-wide hospitality mindset

companies and we expect those investments
will prove profitable going forward.
Now that we have stabilized our earnings base,we have been able to make digital investmentsthat were not included in the initial plan, andhave injected upfront investment into the digitaltransformation (DX) division. This forwardlooking investment is designed to both boost
top-line performance and increase efficiency inbusiness operation. People have smoothly
embraced our consulting-focused customer
approach and we are now establishing a solid
pl at fo rm to in crea se o u r p rese n ce in th e
extensive Tokyo metropolitan market.
H ow c a n we b e o f g reates t us e to o u r
customers? We have expanded the number ofGroup companies as par t of our quest to
strengthen our finance-driven functions. The
addition of each new company expands therange of services that employees can offer tocustomers, and we can now provide a variety ofservices from consulting to business succession,

7 │Tokyo Kiraboshi Financial Group, Inc.│

M&A, equity investment, and venture capital.
In 2022, we added an advertising agency anddebt collection company, bringing the total
number of Group companies to 21. Many small
and medium-sized enterprises (SMEs) cannot
afford to advertise. We have been able to secures o m e c o n t r a c t s b y g e t t i n g t h e G r o u p’s
advertising agency to address this concern andpropose sales promotions and advertising plans.
We build win-win relationships through ourcustomer base and service provision. Managing
and collecting debts is a core function of thebanking industry, so we need to pass on thisexpertise to future generations. The average ageof personnel working in debt management andcollection was on the rise, but the average ageof Kiraboshi Group staff is now lower, and we
expect them to play an active role in revitalizing
future business.

Right now, the Kiraboshi Group is in the processof strengthening its functions, so it is important toacknowledge and tackle any challenges that need
to be overcome. Many such challenges relate tosustainability. There is still much we can do as aregional financial group to help solve social issues.
For example, I think we can provide better DX
support to customers in the medical field, where
we have built wide-ranging relationships. Many
SMEs need help with business succession.
Supporting venture companies is vital for fostering
the new industries required to revitalize regional
economies and communities. We are also being
asked to propose strategies for SMEs that needto look beyond Japan to expand product andservice sales.
Increasing the value of our human resources is
the key for tackling each of these challenges.
That is why the Kiraboshi Group has declared amajor shift toward human capital management.
Our strategy is designed not only to improve
employee treatment, but also to encourage amore determined hospitality mindset across theGroup. We are implementing systems andmeasures that help people feel enjoyment andsatisfaction at being a member of the Kiraboshi
Group.
The senior management team, including myself,
is working to strengthen and refine corporate
governance in line with our expanding Groupfunctions. Strengthening governance cannot be
achieved just by outwardly transitioning to acompany with commit tees structure. Eachdirector, Audit & Supervisory Board member, andofficer must also play their role in steering theGroup in the right direction. The Kiraboshi Grouph a s s eve ra l o u t si d e o f f i ce rs w it h va ri o u s
backgrounds, and we encourage lively debate
based on of ficers’ astute understanding ofdivisions outside their area. The main feature of
our governance is the involvement of the
management team with different generations
and genders.

advertise and build affinity toward our mission asa regional financial group. In fact, our newly
launched brand strategy, the Giving our all, forTOKYO. project, epitomizes this very aim.
The Giving our all, for TOKYO. brand slogan
emphasizes the Group’s strong desire to be
useful to Japan’s biggest market of Tokyo, which,h e re, i n clu d es t h e To k yo m et ro p o l is a n dsurrounding prefectures. This is not a public
relations or sales strategy for a specific productor service, but a statement of our hospitality
mindset that is inspired by the spirit of giving.
The project aims to raise employee awareness of
the importance of local community contributionsa n d e n co u ra ge e m p l oye e s to t h o ro u g h ly
consider what they can do themselves and how
they can serve customers. It demonstrates ourdecision to pledge the G roup’s collec tive
strengths as our existence value, and work as ateam to support and promote the Tokyo area.
We intend to offer broader ideas and proposals
on business succession, M&A, and other issues
for corporate customers in the medium-risk,m e d i u m - re t u r n zo n e t h a t o t h e r f i n a n ci a linstitutions struggle to reach. Ensuring thecontinued survival of companies and businesses
in the Tokyo area and passing on technologies
and services to future generations should not
only help protect the livelihoods of employees
and their families, but also promote market
expansion inside and outside Japan. Revitalizing
traditional Japanese inns and restaurants will
invigorate local communities. Helping individual
customers manage family assets digitally forexample should smooth the succession andinheritance of assets between parents andchildren. How can we make the residents ofTokyo happy? How can we make the people
who work in Tokyo feel comfortable and secure?
Basically, by ensuring every member of the
Kiraboshi Group understands that molding theirwork around these hospitality considerations is
t h e b est way fo r us to co nt ri b u te to t h ecommunity.

To be a valuable supporter for Tokyo

A virtuous cycle that inspires local
development and benefits employees

The Kiraboshi Group is still not well known in
the Tokyo area, given the region’s vast array offinancial institutions. Five years since its founding,the Kiraboshi Group’s vision of becoming acomprehensive service company that is alsostrong in finance is now fairly entrenched in our
staff psyche. Right now, I think we need to

We are working to increase organizational loyalty
through greater employee engagement, becausethat is the way to enhance our Group strengths,
promote regional development, and ultimately
benefit employees. Creating opportunities tobuild this cycle is key to successful human capitalmanagement.

│Tokyo Kiraboshi Financial Group, Inc.│ 8

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial GroupTokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from the President

In 2021, we revised our human resource systems
and introduced a role- or job-based system tohelp improve employees’ job satisfaction. The
number of jobs requiring specialist knowledge
and expertise is rising as the range of Group
company business expands. In addition to the
traditional pyramid -shaped career pat tern
pursued by conventional banks, where employees
aspire to become generalist senior managers, weseek to prepare career paths that enable
employees to become specialists, and make sureemployee remuneration appropriately reflects
each individual’s capabilities and skills. A purely
pyramid-style career system will inevitably resultin some employees being left out of the selection
process. That could make it difficult to maintainmotivation and lead to a reduction in work
performance. Employees can continue to build
specialist skills, and those skills do not decrease
with age. I envisage a future that promotes thedevelopment of the entire Kiraboshi Group by
increasing the number of specialists receiving
similar remuneration to officers.

Implementing our management vision
to support regional communities
Encouraging staff in each Kiraboshi Group baseto think and act autonomously to solve specificissues in each part of the Tokyo area is both anecessary and effective strategy. An effective
way to increase awareness of sustainability inthe community is to link it to the Giving our all,for TOKYO. project. One way to do that is topromote regional sustainability through digitaltechnology. For example, our Fujisawa andShonandai branches joined forces with local“umi no ie” seaside shops at the Kugenuma
swimming area on Katase Nishihama beachduring summer on a scheme that rewarded
points to people eating there through the
Kiraboshi Tech cashless payment system.
The Kiraboshi Group as a whole has been
actively engaged in sustainability issues throughsports for some time now. We sponsor the FC
Tokyo J League club and the Kubota Spears
Funabashi Tokyo Bay Japan Rugby League Oneteam as well as the Apollo Project, which seeks
to i m p ro ve a t h l e t i c v a l u e. Re ga rd i n g t h eenvironment, we provide sustainability linked
loans (SLL) to support corporate customers in
co op eratio n with the To kyo M etrop olitan
G o v e r n m e n t a n d p ro m o t e s u s t a i n a b i l i t ymanagement through our SDGs Evaluation
Program. We are also switching to renewable

9 │Tokyo Kiraboshi Financial Group, Inc.│

energy in our own operations. We will continue
to sincerely implement any necessary measures
based on our management vision of supporting
regional communities.

Platform concept centered arounddigital banks
O u r digital m ea su res epito mize w hat th e
Kiraboshi Group represents. Our digital bank, UI
Bank, opened in January 2022, but it is not justan online bank. It differed from Kiraboshi Bank
right from the design stage, because it did not
adopt Kiraboshi Bank’s accounting system.
Instead, we created a new, less-intensive online
system that ensures a high degree of affinity withFinTech handled by Kiraboshi Tech.
Our digital measures can be broadly divided into
two categories with two different strategies. One
aims to improve productivity. For instance, all
Kiraboshi Bank branches are shifting to a nextgeneration branch setup. Customers using thebranches will complete all accounting processing
themselves, and a central administrative center
will be based at the head office in order toimprove operational efficiency. The ultimate aim
is to create a framework in which the work of thecentral administration center itself will be
co m p l ete d u si n g d i re c t i n fo rm a t i o n f ro m
customers, and to increase the productivity of
individual employees . M eanwhile, we will
introduce a customer relationship management(CRM) system for in-person services to help
reorganize individual customer information andfacilitate the provision of complex and moreadvanced consulting services.
The other set of digital measures seeks tostrengthen our top line in terms of earnings.
Simple banking will be moved to non-face-to-facetransactions through UI Bank whenever possible.
In anticipation of a further decline in the numberof customers visiting branches going forward, we
will advertise the convenience of UI Bank and its
preferential interest rates for customers who
conduct regular deposit and foreign exchangebanking transactions. We pursue in - houseservices at the lowest possible cost, and, going
forward, we also intend to offer mortgages
through UI Bank. Now that the ban on digital
payrolls has been lifted in Japan, Kiraboshi Tech’s
Maekyu service (a welfare service that allows
employees to access in-house loans within thescope of their work), digital money LaLaPay,
digital wallet LaLaQ, and other services havebecome effective sales tool for the workplacethat we intend to proactively launch in future.
The central aim of our digital-based platform
co ncept is to co nne c t ser vices by linking
application programming interfaces (API) andbuilding a venue for creating shared value andnew businesses all centered around the UI Bank
digital bank. You could see this as providingbanking as a service (BaaS) functionality andintegrating our financial ser vices into ourcustomers’ businesses. The system’s design
makes it easy to cooperate with external parties,
which, in turn, facilitates the incorporation ofservices outside the financial realm and thecreation of new business.
For example, we have already provided a service
for foreign workers, international students, andother people who find it difficult to complete
procedures at the in-branch counter to open an
account smoothly in their native language using
API.
Furthermore, this platform creation can be
replicated in various dif ferent frameworks,
including entertainment, sports, education, andmedical fields. For example, incorporating theplatform into a comprehensive medical networkof medical and welfare organizations could makeregional medical care more efficient and directly
contribute to the welfare of residents and local
communities. That is why we want to focus onco o p erating with lo cal autho rities o n theprovision of public services.

Build Group presence to promote
continued growth
Ki ra b oshi b ito ( p e o p l e w h o p u t Ki ra b oshi
philosophy into practice) are people who feel as e n s e o f j oy w h e n co n t r i b u t i n g to l o c a lcommunities through their work as a member of
local society. Employees can only confidently
declare a desire to be useful to customers if they
feel proud of and close to the organization inwhich they work and are happy working there.
Five years since its founding, I finally feel that
Kiraboshibito are becoming more prominent within
the Kiraboshi Group.
To build an even more reliable regional presence,
we intend to steadily improve our corporate
performance in FY2023, the final year of theMedium-Term Business Plan, and strive to meetthe expectations of our stakeholders. Tokyo is thebest market in which to do this, and I am confident
that we can continue to grow by increasing thevisibility of the Kiraboshi Group in that area. We
hope that you will continue to support us andfollow our quest to become a comprehensive
service company that is also strong in finance withinterest.

│Tokyo Kiraboshi Financial Group, Inc.│ 10

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group

Priority Issues

Support for
the elderly
Support for the childraising generation

Decarbonization
initiatives

SME businesssuccession
and closure

Accelerating
digitizationand the role oflocal communities

Diversity & Inclusion

Foundation support

Ensuring access tofinancial services forforeigners and theelderly
Medical (management)
supportFinancial services
support for young
peopleSocial infrastructure
support11 │Tokyo Kiraboshi Financial Group, Inc.│Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Main Initiatives◦ Customer-oriented business operations and provision of services tailored to life cycle needs
─ Life plan support business─ Highly specialized Wealth Management (WM) Office, collaboration with Group
companies, and cooperation with banks and securities companies◦ Creation of new contact points with customers and improvement of customer convenience─ Enhancement of Internet banking functions, DX strategy with UI Bank as a starting point
─ Comprehensive support for the lifestyles of customers: UI Bank’s brand concept“Increase My Assets”◦ Senior-friendly digital bank
─ Establishment of a Digital Concierge at Kiraboshi Bank branches◦ Provision of comprehensive services to promote SDGs and decarbonization for customers
─ Production of the Decarbonization First Book, and handling of loan programs
utilizing the Tokyo Metropolitan Government’s reporting system
─ Handling of Kiraboshi SDGs Evaluation Program service, Kiraboshi SDGs Private
Placement Bonds, and Kiraboshi SLL◦ Kiraboshi Group’s efforts to reduce environmental impact
─ TCFD initiatives, replacement of sales vehicles with low-emission vehicles
Cooperation with the Low Pollen Forest Growing Campaign and certification
under the Tokyo Forest Growing Contribution Certification System◦ Contribution to solving social issues such as business succession and creating value
for customers
─ A group of professionals providing advanced solutions
SF Division, MF Division, RF Division, FC Service Division, Medical and Welfare
Business Division─ Collaboration with highly specialized Group companies such as Kiraboshi Capitaland Kiraboshi Consulting
─ Support of overseas expansion◦ Consulting for every stage of a company’s life─ Management support, business succession, M&A, setting up personnel evaluation
systems, recruitment services, etc.
◦ Management for sustainable development
─ Initiatives to promote sustainability for customers◦ A digital-driven Tokyo-based platform concept
─ Digital money LaLaPay by the digital bank UI Bank and Kiraboshi Tech
◦ Digital strategy of Kiraboshi Group─ Establishment of data analysis team─ Digital-related business matching and digital/DX consulting to support SMEs
─ Development of digital human resources◦ Human capital management─ Practicing the Kiraboshi Philosophy and fostering Kiraboshibito◦ Work-life balance◦ Health and productivity management◦ Supporting employees in balancing work with childrearing and nursing care
◦ Respect for diverse human resources◦ Start-up support
─ Matching support through the HANEDA Platform and Kiraboshi Pitch, whichconnects large companies and start-ups to create business expansion◦ Cooperation with regional financial institutions◦ Cooperation with the government

The stars of Tokyo areunder the sky.
There are no stars in the Tokyo sky.
The stars are under the sky.
There are people who are trying their best to shine
in the present moment.
There are people running toward their dreams.
There are people who sweat for the sake of someone else.
There are people stepping out into a new life.
People gather. That is why challenges also gather.
This is a city with advanced issues.
The lack of successors for SMEs, money-related issues forthe child-raising generation and young people, healthcare,and carbon neutrality...
At that time, what can we, the Tokyo-based people, do to help?
Giving our all, for TOKYO.
Let’s think through beyond the norms of finance andcome up with innovative services.
We utilize the network that has been cultivated in this city.
We deliver our know-how.
Let’s go beyond the barriers of the Group and give it our all.
Digital and consulting services are all just means to an end.
Let’s put our heart and soul into the people and the company
in front of us.
For everyone who lives in this city.
Tokyo shines brightest under the sky. We believe in that.

Giving our all, for TOKYO.

◦ Creation of new customer contact points that transcend regions, generations, andbusiness categories
─ UI Bank, LaLaPay, and Maekyu services◦ A platform concept integrated with non-ﬁnancial services
─ Platform for foreign workers and students in Japan◦ Diversified support for the medical and welfare sectors
─ Contribution to sustainable growth of regional medical care that leads tosolutions to social issues as management support for medical institutions◦ Creation of new customer contact points that transcend regions, generations, andbusiness categories
─ UI Bank, LaLaPay, and Maekyu services◦ Start-up support◦ Establishment of settlement and non-financial service infrastructure that combines
UI Bank and LaLaPay◦ B uilding infrastructure to improve convenience for local communities throughentertainment, sports, leisure, etc.
◦ Contribution to the smart city concept through a platform in collaboration withother types of business and the Tokyo Metropolitan Government◦ Rolling out an efficient and flexible banking system to other regions│Tokyo Kiraboshi Financial Group, Inc.│ 12

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Value Creation Process
We will contribute to creating customer value by providing ﬁnancebased comprehensive services needed by communities.

Economy/Society
・ Shrinking of local economy
・ Continuing low interest rates
・ Changes in industrial structure

・ Evaluation of business feasibility
・ Consulting functions
・ Diverse funding methods
・ Trust functions
・ Linkage with FinTech

Financial Environment

Social/Related Capital・ Geopolitical risks

・ Comprehensive strength of
Kiraboshi Group・ Expansion in gap between loan
and deposit
・ Competition/collaboration
through entry of diﬀerent
sectors
・ Increase in digital transactions
・ Development of FinTech

13 │Tokyo Kiraboshi Financial Group, Inc.│・ Branch functions matchingregional characteristics
・ Asian network(China, Thailand, Vietnam, etc.)
・ Customer base

gi
Di
gy

Creation of social value

Individual Customers

Financial Capital
・ Proﬁt attributable to ownersof parent¥21.1 billion
・ ROE

6.5％

Human Capital・ Increase in engagementyProvidingeg

digital ﬁnancial

at・ Promotion of DX

partners

servicesS

tr・ Longer average lifetime

Intellectual Capitalvarious businessnew values throughC・ Depopulation in rural areas

to realize withOUTCOMEOUTPUT・ Ratio of female managers
16.9％

us

・ Decrease in population

New futuree・ Kiraboshibitomto・ Diverse human resources

Promoting reforms
as a Tokyo -based
platform owner

rate
r St

・ Declining birthrate
and aging population

Human CapitalBusiness ModelR・ Increase in interest in
sustainabilityeabilities

il・ Net assets

atfor customers

eta・ Resources recycling

Creating valueser St rat gy

・ Loan assetsorme・ Climate changes

rpusing the Group’s

Management resources utilized

Financial Capital

Co

s to

INPUT

Global Environment

Demographics

l

y

Cu

External
Environment

ta

St

eg
t
a
r

Human R

eso

ur

ce

Base That Supports Value Creation

・ Participants in Kiraboshibito
training course
1,118
・ Ratio of mid-career managers
18.9％Intellectual Capital
・ Provision of new ﬁnancial
services including collaboration
with external businesses,
and creation of new businessdomains・ Comprehensive ﬁnancial
services by the entire Group
Social/Related Capital・ Individual Internet users
240,000 users□ Good record of and expertise on supporting・ Number of UI Bank accounts
local companies
73,000 accounts□ Speedy actions for technology
・ Consolidation of bases□ Highly professional and extensive ﬁnancial
solutions(Results as of March 2023)□ Voluntarily improving Kiraboshibito□ Comprehensive strength of all 21 Group companies

Improving quality of life byproviding new values

Corporate Customers
Improving corporate value by
providing various solutions
Shareholders
Improving long-term corporate
value
Business Partners
Mutual growth as a partner
Employees
Growth as Kiraboshibito
Local Communities
Cooperation/alliance toward
resolution of issues
Environment
Improving global sustainability│Tokyo Kiraboshi Financial Group, Inc.│ 14

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Comprehensive Strength of All 21 Group Companies(as of July 1, 2023)

Tokyo Kiraboshi Financial Group, Inc.: Group Companies
Company nameGroup companies
Group companies◦ Kiraboshi Credit Guarantee Co., Ltd.
◦ Yachiyo Credit Guarantee Co., Ltd.
◦ Kiraboshi Business Service Co., Ltd.
◦ Kiraboshi Business Consulting Shanghai Co., Ltd.
◦ KIRABOSHI BUSINESS CONSULTING VIETNAM Co., Ltd.
◦ Kiraboshi Servicer, Ltd.

Equity-method affiliates◦ Kiraboshi Insurance Agency CO., LTD.
◦ StarBridge business consulting (Beijing) Co., Ltd.

(as of July 1, 2023)

Appointment of presidents fordeveloping management personnel◦ UI Bank Co., Ltd.
◦ Tokyo Kiraboshi Lease, Inc.
◦ Kiraboshi System, Inc.
◦ Kiraboshi Consulting Co., Ltd.
◦ Kiraboshi JCB Co., Ltd.
◦ Kiraboshi Tech, Inc.
◦ Kiraboshi Capital Co., Ltd.
◦ Kiraboshi Life Design Securities Co., Ltd.
◦ Kiraboshi business oﬃce service, Inc.
◦ Be.Brave, Inc.

Equity-method affiliates◦ Sky Ocean Asset Management Co., Ltd.

(as of March 31, 2023)

Number of officers and employees
supporting the Group with diverse characters

President of Kiraboshi Tech, Inc.
years old･･････････････････････････････････

UI Bank Co., Ltd. ････････････････････

President of Kiraboshi System, Inc.
years old･･････････････････････････････････

Kiraboshi Consulting Co., Ltd. ････

107

President of Kiraboshi JCB Co., Ltd.
years old･････････････････････････････････

Kiraboshi Servicer, Ltd. ･････････････

106

51
51
50

Kiraboshi System, Inc. ･･････････････

113

101

Business description(as of March 31, 2023)

Date ofestablishment

Number of officers
and employees

Kiraboshi Bank, Ltd.

Banking business

January

8, 1954

4,062

UI Bank Co., Ltd.

Banking business

October 30, 2020

113

Tokyo Kiraboshi Lease, Inc.

General leasing businessJune

5, 1975

59

Kiraboshi System, Inc.

System processing
outsourcing

January 29, 1980

101

Kiraboshi Consulting Co., Ltd.

ConsultingJuly

10, 1984

107

Kiraboshi JCB Co., Ltd.

Credit card business

September25, 1989

23

Kiraboshi Tech, Inc.

Fintech services

November 1, 201746

Kiraboshi Capital Co., Ltd.

Structuring andadministration of funds

September 3, 201824

Kiraboshi Life Design Securities Co., Ltd.

Securities business

December 27, 201949

Kiraboshi business oﬃce service, Inc.

Payroll operations, etc.

January 23, 1975

6

Be.Brave, Inc.

Advertising planning andproduction businessFebruary 6, 1987

31

Tokyo Kiraboshi Financial Group, Inc.: Equity-Method Affiliates
Business description

Date ofestablishment

Commissioned
investment trust services

November25, 2014

Company nameSky Ocean Asset Management Co., Ltd.

Kiraboshi Bank, Ltd.: Group Companies
Company name(as of March 31, 2023)

Number of officers
and employees
17(as of March 31, 2023)

Business description

Date ofestablishment

Number of officers
and employees

Kiraboshi Credit Guarantee Co., Ltd.

Guarantee operations

July

21, 1977

30

Yachiyo Credit Guarantee Co., Ltd.

Guarantee operations

November30, 1983

8

Kiraboshi Business Service Co., Ltd.

Centralizedadministrative services

August 31, 1989

64

Kiraboshi Business Consulting Shanghai Co., Ltd.

Consulting

August6, 2009

4

KIRABOSHI BUSINESS CONSULTING VIETNAM
Co., Ltd.

ConsultingJune

13, 2019

2

Kiraboshi Servicer, Ltd.

Claim management andNovember24, 2006
collection business

106

Kiraboshi Bank, Ltd.: Equity-Method Affiliates(as of March 31, 2023)

Business description

Date ofestablishment

Kiraboshi Insurance Agency CO., LTD.

Insurance agency business

October 8, 1953

10

StarBridge business consulting (Beijing) Co., Ltd.

Consulting

January 25, 2022

3

Company name

Number of officers
and employees◦ The numbers of officers and employees presented on page 15 and page 16 include the numbers of officers, full-time employees,
senior employees, contract employees, part-time workers, etc.

15 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 16

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Well-Being and Human Capital Management
For the Tokyo Kiraboshi Financial Group, the most important capital is Kiraboshibito.
Our employees, as Kiraboshibito, aim to realize the well-being of our customers and local
communities, and the happiness and well-being of each and every employee enhances the valueof the company.

Realization of customer and community well-being
Sharing of gratitude, a sense of contribution,and happiness

Giving our all, for TOKYO.

Embody the Kiraboshi Philosophy

A cycle that maximizes– Enhancement of corporate value –Human resources development,
the value of human capital improvement of internal environment
Basic concept on human resources:

Kiraboshi Philosophy:

Platform forjob satisfaction

Growth of thecompanyJobsatisfaction

Environment CultureOwnhappiness
Growth of organization“Kiraboshibito” are people who possess
the spirit of self-interest and altruism, think
and act based on action guidelines, andput the “Kiraboshi Philosophy” into practice

Sharing of Kiraboshi Philosophy
Happiness of each and every employee =realization of well-being

SchemeContribution to society

Well-being of“Kiraboshibito”

Details are introduced on pages 21 to 26

Professionals who make exhaustiveeﬀorts and take initiative inincreasing their market value
Inspiring eachother to improve

Diversity andrespect, support
for each other

Fair opportunities and a goodworking environment

Generating valuable accomplishments

Each employee enhances own value and contributes toimprovement of corporate value

Contributing to society, seeking growth of the organization,achieving self-fulfillment and realizing oneʼs own happiness

Self-fulﬁllment

Engage with and do the best for customers
and local communities
Provide services that are of value

Aspiration to do oneʼs best for customers
and the community
A desire to enhance oneʼs own value

By reinvesting in human capital the improved corporate value that has been generated from the cycle,
we realize the sustainable development of “TOKYO”: emploees, companies, and local communities.
17 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 18

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Roundtable Discussion on Human Capital Management

A virtuous cycle in which wellbeing-focused Kiraboshibito
contribute to local communities through their work
Kiraboshi human capital management
today─ How do you view the company’s past and current
management in terms of human capital awareness?

Yukiyoshi
MatsuoPresident
Kiraboshi System,
Inc.

Yuki
Takahashi

Outside Director
Tokyo Kiraboshi
Financial Group, Inc.

Hideki Tsuji

General Manager of Personal Division
Joint General Manager of HM Office
Tokyo Kiraboshi Financial Group, Inc.
Director, General Manager of HR Division
Kiraboshi Bank, Ltd.

What is required of Kiraboshibito, the Kiraboshi
Group’s human capital, to co-create value withcustomers and improve corporate value?

Kiraboshibito are our most important
capital─ What does human capital management mean
for the Tokyo Kiraboshi Financial Group, andwhy is its promotion significant?

Takahashi: The Kiraboshi Group greatly values theterm “Kiraboshibito.” We have determined threeaction guidelines for the Kiraboshi philosophy andKiraboshibito that apply to every employee: Feel
happy to be working in the Kiraboshi Group, feelsatisfied in their job, and consider the company’s
challenges as their own.
So what do Kiraboshibito need to do to contributeto society? We have recently created Giving our all,fo r TO KYO. b ra n d sl o ga n , w h i c h cl a ri f i e s o u rdetermination to do everything in our power tosupport the local society in the Tokyo area. But, inorder to do that, it is important that we ourselves
feel happy. I think well-being is all about feeling
happy. Feeling happy in yourself and taking action
to make others happy. In future, it will become
increasingly important for each employee to feelhappiness in their work, and as individuals. This isbecause that will help create happiness in theTokyo area. Kiraboshibito are capable of this andthey are our most important capital. They are theprecious jewels of the Kiraboshi Group. The humancapital managem ent that the Kirab oshi G roup
aspires to achieve is one that designs individual
growth plans for each employee. Many issues need
to be addressed to encourage heartfelt acceptanceof this approach across the Group.
Two things have to happen to create this cycle. First,
each employee must create the life and job thatthey want. This requires spiritual, educational, andphysical training. Happiness is not something that is
bestowed by someone else, and there is nothingworse than placing restrictions on people’s dreams
an d ho p es . The se co n d ef fo r t rel ates toorganizational mechanisms and frameworks. Even if
we nurture more Kiraboshibito, that is not successful
human capital management unless the company
can offer roles and careers that fulfill Kiraboshibito
aspirations.

19 │Tokyo Kiraboshi Financial Group, Inc.│

Tsuji: Many people are talking about human capitalmanagement today, but the Kiraboshi Group started
its own initiatives in this area five years ago, when it
was fo u n d e d . Two years af ter th e m erger, westarted reforming our personnel systems in order todesign a human resources strategy that fits theintended future path and management strategy of
the Kiraboshi Group. We have introduced various
self-directed employee career-building measuresthat value individual capabilities and autonomous
action, but there are still many issues to address andit will take time for the system to be fully embraced.
However, once established, it will breed a newcorporate culture with Kiraboshibito at the core.
The role of the Personal Division is to provide
optimum support so all employees can enhanceand demonstrate their own value and help improveco rp o rate value. In other wo rds , our job is toprovide a rewarding stage upon which to build aworking career. Based on that premise, I urge ourstaf f to embrace t wo ideas. The first is friendly
rivalr y that encourages mutual inspiration,
co mp etitio n , and p rofessio nalism . The seco ndi nvo lve s e n co u ra gi n g e a c h o t h e r, re co g n i z i n gdiversit y, and mutual respect. We are currently
building various environments that will enable us tou s e t h e s e a p p ro a c h e s t o d e v e l o p a d e e p e r
corporate culture.
Matsuo: We are progressing our efforts to expand
digital human resources within current personnel
systems. I have worked in banking system design formany years and I feel that people’s emotional
commitment is important. People create systems, so
a person’s mindset also has a direct impact on
productivity. With the greater division of projects
between internal staff and external vendors, it isdifficult, particularly for young engineers, to develop
a holistic view that enables them to discover theiro w n ro l e w i t h i n a n o r g a n i z a t i o n , a n d t h i s i sbecoming an issue.
In April 2023, I moved from being General Managerof the Digital Strateg y Division to President of
K i r a b o s h i Sy s t e m , I n c . I f e e l t h a t t h o ro u g h l ycommunicating the Kiraboshi Group’s strategy toeach employee helps reconfirm the significance ofindividual jobs and respective roles, and ultimately
boosts motivation.
We are also promoting a project that visualizes
individual skills, because we believe that sharing
skill s an d qualificatio ns encourages sm o othteamwork, and ultimately helps create new value.
Takahashi: I think the appointment of Mr. Matsuo as
Pre si d e n t o f K i ra b o s h i Sy s te m e p i to m i ze s t h e
Kiraboshi Group’s human capital management.
Naturally, the best outcome is for ever yone toexperience a sense of happiness when working, butsometimes work can feel hard and you don’t want

to do it. When that happens, it is important to talkto each other and create enjoyable times to improveteam well- being. Building such a positive
atmosphere can transform any feelings of weakness.
So, it is important for the team leader to encourage
and set the tone for the team.
If you like something, you become more curious andwilling to learn and act. This is ver y importantbecause it can lead to better team communication.
Whether an object or an action, you either like it or
you don’t, you do it or you don’t. If everyone is able
to do things that they like, we can build extremely
strong, great teams. I think it is wonderful that Mr.
Matsuo is setting the tone for his staff based on his
own experience.
Matsuo: People generally feel very anxious whenfacing change. Instead of simply encouraging people
to change, I think you foster greater empathy bysharing your own experience and illustrating how
embracing change makes the relatively long timey o u s p e n d a t w o r k o v e r y o u r l i f e t i m e m o reenjoyable and rewarding.
Tsuji: Words are very important because words
convey ideas and thoughts. However, those ideas
can lose their sparkle when conveyed across multiple
channels and eventually become nothing more thanbland information. It is important to convey thepassion of the original speaker. That applies to any
ideas from senior management as well.

How to promote Kiraboshi Group growth─ What hurdles need to be overcome in Kiraboshi Grouphuman capital management and do you have any advice?

Takahashi: From a management perspective, we
realize the importance of visualizing well-being inorder to ensure our human capital management as
a Group is reflected in earnings. However, making
visualization itself the goal is not the right priority.
Instead, the ideal aim should be to make the Tokyo
area happy through the Kiraboshi Group’s humancapital management. In a world without goals, weneed to set a time frame and determine where wewant to be in one, three, or five years’ time. That is
the immediate challenge for the Kiraboshi Group.
Declaring our Giving our all , for TOKYO. brandsl o g a n h a s cl a ri f i e d o u r d e te r m i n a t i o n to d oe v e r y t h i n g w e c a n f o r t h e To k y o a r e a , a n destablished a focal axis for the Group. The slogan
em p ha sizes o u r em ploye es’ d esire to su p p o r t
customers’ lives. It is important that each employee
feel s confident and proud of their services andproposals and sees them as vehicles for enhancing
the happiness, joy, and love experienced by ourcustomers. I hope all our employees can enjoy andfeel passionate about supporting the Tokyo area.
Tsuji: Some people view the word “capital” in theterm “human capital” n egatively. H owever, we
employees recognize that we are important assetsthat the company expects to grow, and we must
increase our own value accordingly. To that end, wewant to create mechanisms that help people enjoy
self- imp rovem ent, an d share case stu dies an dexperiences of how personal growth actually helped
make customers happy.

We also need to promote a wider corporate culturet hat e n co u ra ges p e o p le to p o i nt o u t p ositiveelement s o r any element s that are dif ficult toachieve.
Matsuo: Many people who come for mid-career
recruitment interviews talk about their strengths
and how they can help the company. They can dothat because they are able to view themselves
objec tively as an asset. Going for ward, I think
Kiraboshi Group employees will also be required torecognize their own value and how they contributeto the value of the company.
Takahashi: People always have a role to play. If you
can recognize how others perceive your role andfeel grateful for it, you can appreciate your workand not feel as if you are being forced to do it. If you
keep doing that, you will become an asset for
creating value as part of the Kiraboshi Group. That
is what human capital management should be
about. Nothing could be more wonder ful thanensuring no one is left behind and everyone is able
to do their part and let love shine through.
Tsuji: It is important for employees to realize thatthey are not resources to be consumed by thecompany, and to understand that their capabilities
and skills are elastic assets.
Ta k a h a s h i : I t h i n k i t is a p o si t i ve t h i n g w h e n
employees see themselves as assets. Instead ofassets, you could view it like a precious fortune or
estate. I want to tell all our employees that they arepart of the precious fortune of the Kiraboshi Group.
The challenge going forward will be to continue tofoster a culture in which all members inspire anduplif t each other and resp ec t colleagues fromdiverse backgrounds in an altruistic manner. We
also need to effectively link the Group’s MediumTe r m B u s i n e s s P l a n , m a n a g e m e n t s t r a t e g y,
Kiraboshibito, and human capital management.
We have two professional athletes on the Kiraboshi
Group payroll, who excite, encourage, and inspire
us as competitors. The Kiraboshi Group has always
cherished these kinds of people. You don’t have to
be an athlete. You can be an engineer, a musician, atalented artist, a great pianist, or a person who has
drawn on their life experiences to build an activerole for themselves. I think it is important to develop
an organization that expresses gratitude to all such
persons, and encourages employees to think andact autonomously.
Tsuji: There are many stages in society upon whichpeople can shine. We have a stage upon which we
can shine because we are Kiraboshibito. I sincerely
believe that the aspirations and efforts of each andevery employee play a vital part in creating this stage.
I want everyone to feel happy with the efforts they
make and the personal growth they achieve. Cherish
your individuality and contribute to the stage in yourown way. Become a person who builds the beststage and performs on the best stage. The only
reason for creating this stage is to Giving our all, forTOKYO. Our mission is to create a virtuous cycle thatperpetuates Kiraboshibito well-being and Giving ourall, for TOKYO. spirit, and we are all committed tobuilding the best stage possible, together.

│Tokyo Kiraboshi Financial Group, Inc.│ 20

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Kiraboshi Group’s Human Capital Management for the
Realization of Well-Being for Customers and Local Communities
For the Kiraboshi Group, the most important capital is Kiraboshibito.
The Kiraboshi Group employs diverse talent with different backgrounds, such as the banks to which they
belonged and their nationalities.
By bringing together people with different personalities, we create a flexible and strong organization that can“think things through, thoroughly discuss things, and do everything required to fulfill things” for our customers
and local communities.
At the Kiraboshi Group, under the basic approach to human resources that each employee enhances their own
value and contributes to the improvement of corporate value, we realize a rewarding workplace for employees
by setting strengthening individual employees, development of corporate culture, and fair opportunities and apositive working environment as the three pillars of human capital management. By continuing to maximize theindividuality of each person at such workplaces (optimal allocation of human capital), our oﬃcers andemployees, who are Kiraboshibito, aim to realize the well-being of our customers and local communities.

Environment Culture

Mechanism

A rewarding workplace
Professionals who voluntarily
improve their market value
through relentless eﬀorts
Stimulating andimprovingeach other

Diversity,
respect, andmutual support

Fair opportunities anda positive working environment

Strengthening individual employees ─ Career development ─We support the future of our employees by enabling each of them to develop their own
careers with a sense of ownership, and by fostering human resources capable of taking on
difficult challenges on their own initiative.

Top leader training
Cultivation of leadership and a mindset of change for corporate managers
The training equips participants to speak as a business manager,
express their aspirations in their own words, and present their businessideas.
Monthly seminars on management skills and practical business skills
are also offered. We continue to provide learning that is in line with theapproach to business strategy and the thoughts of small and mediumsized enterprise owners.

Strengthening individual employees

─ Professionals ─We hire highly skilled and diverse human resources to provide moreadvanced services to our customers and make them delighted.
We create a training environment where employees can take on
the challenge to improve their skills, and strategically place humanresources so that each employee can maximize their potential.

Next generation leadership training: Creating the next Kiraboshi Group by ourselves

Training to support young staff autonomy: Becoming the ones who decide their own lives● Total number of training participants

Acquisition of specialized human resources
We have introduced direct recruiting methods,
after clearly defining the human resources weseek, such as Japanese science personnel,d i g i t a l h u m a n re s o u rce s f ro m o v e r s e a s
universities, and personnel with experience inphysical training.
In addition, we will also focus on the recruitment
and development of high school graduates whoare potential digital human resources.

● Digital recruitment of new
employees in FY2023● Number of mid-career hires and the percentageof mid-career hires in management positions

50

50
17.29%

16.11%

18.90%
30

FY2020

FY2021

Training to support young staff autonomy

All general and branch managers

50 persons

207 persons

Other training-related indicators
Total training participants
5,694 persons
Total training time 37,928 hours¥78 million
Total training cost● Number of personnel in strategic divisions

We are actively assigning mainly young human resources to strategic
divisions in each Group company. In FY2022, the PB Promotion Division
was newly established with 27 employees, bringing the total number of
employees in strategic divisions to 295, and creating a system capableof providing high value-added services.

66

97
6

55
28

Aiming to improve individual skills and provide better value to customers

8

8
6

54
52

13
17

FY2020

29
22
65

59
10
12

FY2021

27

18
14

76
FY2022

We started Structured Finance (SF) Dojo training in FY2021. We currently offer five Dojo training programs in thefollowing three formats: web format, forum format, and training camp format.
● Number of participants in each Dojo training program (persons)

Sales staff participation rate: 42%
SF Dojo

PB Dojo*1

Consulting Dojo

Digital Dojo

Trust Dojo

217

418

46

138

245

●	Number of archived videos available forlearning anytime, anywhere

We have abolished the qualification system for promotions and we areinstead enhancing support for all employees who want support, such asproviding self-study reading tools and subsidies for self-improvement.
Number of registrants for the self-study reading tools

Self-improvement support subsidies per person

281 persons

Annual (maximum) ¥20,000

74

204
150

FY2019

Dojo training programs

295
27(Unit: people)

Self-improvement support system
Self-improvement towards realizing your career aspirations andproviding high value to customers

FY2022■Consulting ■Capital ■Securities■Tech ■UI ■SF/MF/RF ■PB

Personnel expansion in line with business strategy

21 │Tokyo Kiraboshi Financial Group, Inc.│

Next generation leadership training

Number of mid-career hires (persons)
Percentage of mid-career hires in management positions

Personnel placement to strategic divisions*1 PB: private banker

Top leader training

789
365

FY2021

FY2022

Kiraboshi Tube
Kiraboshi’s dedicated learning video
distribution channel

Promoting the active participation of diverse human resources
Creating a workplace where women can play an active role as amatter of course and developing female leaders to lead

We conduct female manager’s training for female employees inleadership positions to share daily concerns and management
techniques, and training for fostering female managers based on thetheme of future career support. We also host dialogues with female
outside directors, supporting the creation of a women’s community.

Recruitment of foreign human resources with diverse values and skills

From 2020, we started hiring foreign nationals, focusing on new
graduate recruitment, and six of the new graduates who joined theCompany in April 2023 were foreign nationals.
As of the end of FY2022, we have 15 foreign nationals on our staff,
promoting vitality within the Company through the acceptance ofdiverse talent.

● Ratio of female managers
16.82%

16.93%FY2021

FY202215.31%FY2020│Tokyo Kiraboshi Financial Group, Inc.│ 22

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Kiraboshi Group’s Human Capital Management for the Realization of Well-Being for Customers and Local Communities

Stimulating andimprovingeach other

Diversity,
respect, andmutual support

Fair opportunities anda positive working environment

We will foster a culture in which all members inspire and uplifteach other and respect colleagues from diverse backgrounds inan altruistic manner, and all employees, regardless of theirassigned positions, work together to develop human resources.

A rewarding workplace
Mechanism

Professionals who voluntarily
improve their market value
through relentless eﬀorts

Development of corporate culture

Environment Culture

Environment Culture

Mechanism

A rewarding workplace

Professionals who voluntarily
improve their market value
through relentless eﬀorts
Stimulating andimprovingeach other

Diversity,
respect, andmutual support

Fair opportunities anda positive working environment

Maintenance of a positive working environment
We constantly seek to create a positive working environmentand support the health and well-being of our employees andtheir families.

Kiraboshibito training course

Health and productivity management

Ensuring all officers and employees act as “Kiraboshibito” to serve our customers

Maintain and promote the health and productivity of officers, employees and their families

In April 2021, we formulated three principles of action guideline for “Kiraboshibito” and we are implementing a
program for all officers and employees to become “Kiraboshibito.” Officers and employees of all levels
participated in “Kiraboshibito training” courses held over two years in 2021 and 2022. We appreciate the timespent by employees talking about “Kiraboshibito” in their own words with employees from different divisions,branches, and Group companies, and we are working to make them proud to be “Kiraboshibito.”Three principles of action guideline for“Kiraboshibito”
An individual with “high aspirations” (principles, sense of mission)
An individual who always thinks “how it can be done” (ingenuity, perseverance)
An individual who is committed to results, who continuously takes oncourageous challenges (responsibility, courage)

Fostering a climate of gratitude
Fostering a culture of mutual recognition

To foster a hospitality mindset, we provide hospitality training forcustomer satisfaction and distribute videos and newsletters. To foster a“culture of mutual recognition,” we use an in-house social media
function on our talent management system and a “Nice Work Card”
function that enables employees to communicate their gratitude andappreciation of day-to-day efforts to each other. Last year the in-housesocial media platform had 489 posts, and 2,263 employees gifted “NiceWork Card” to each other.

● Nice Work Card ● In-house social media function● Cumulative total for FY2022
Number of Nice Work Cards sent

Rate of utilization of Nice Work Card

10,63652 %100%

The Kiraboshi Group is working to encourage both male and female
employees to take childcare leave, and is developing remote work andflextime systems, based on our policy on maintenance of a positive internal
environment by “constantly seeking to create a positive working environment
to enhance the job satisfaction of each and every employee.”
In addition, we have concluded a comprehensive cooperation agreement on
industrial development with the Tokyo Metropolitan Government (TMG).
We endorse the TMG’s health-related activities and conduct in-house radio
calisthenics every week. We have also introduced a health promotion app
to help employees improve their health.

Encourage childcare leave● Rates of male and female employees taking
childcare leave
100％

Male employees taking childcare leave rate of 100% by the end of FY2023

We are striving to create a working environment that enables all
employees to continue to work in line with their life cycle. All 137
employees (male: 74, female: 63) eligible to take childcare leave
took childcare leave in FY2022, and the rate of employees taking
childcare leave reached 100% for both male and female employees.
We are working to foster a workplace culture and environment inwhich both men and women feel satisfied.

100％(persons)

46％

100％

37％

61

52

20

22

FY2020

FY2021

Number of male employees taking childcare leave

100％

74

63

FY2022

Number of female employees taking childcare leave
Rate of female employees taking childcare leave

Hiring diverse human resources and promoting vitality within the Company
Human resource development by all

Characteristic management in difficult times

Career support and growth promotion for
subordinates “Making time for subordinates”

23 │Tokyo Kiraboshi Financial Group, Inc.│● Screening rate

Rate of male employees taking childcare leave

360 degree survey
The purpose of this survey is to make supervisors“aware” and promote growth (behavioral change). Survey
results are not linked to evaluations. Rather the emphasis
is on giving supervisors a chance to reevaluate their
management style to make any necessary improvements
and value their beliefs in a flexible manner.

❶ Physical health: We aim to improve health of employees by implementing a highly
effective Plan-Do-Check-Action (PDCA) cycle by visualizing their health data.
❷ Mental health: We implement proactive follow-ups mainly by industrial health staff
and work to identify employees in poor mental health at earlier stages and prevent
exacerbation, aiming to achieve zero employees on administrative leave.
❸ Organizational health: We promote work style reforms and invigoration of workplacecommunication, aiming to create an environment where employees candemonstrate their job performance to the fullest.

We have introduced “one-on-one meetings” to improve the qualityof relationships between supervisors and subordinates and forsupervisors to support the careers of their subordinates. 92.1% of
subordinates feel that the onePercentage of subordinates who
were able to say what they are
on-one meetings are useful, andreally thinking
64% feel that they can say what
they are really thinking during64%
the meetings, and this has led
60%
to an imp rovem ent in thequality of relationships between
At time of
FY2022supervisors and subordinates.
introduction

Since April 2021, we have continued to employ those employees who wish to
keep working until the age of 70. Such employees are using their experience,
personal connections, and specialist expertise accumulated to-date in various
divisions. In the future, we will make an effort to hire and promote theutilization of diverse talent, including experienced talent, people withdisabilities, and foreign nationals, to encourage vitality within the Company.

Gender wage gap (all workers): 56.6%
Employees aged 65 and over: 201 persons
Percentage of employees with disabilities: 2.10%

Financial wellness
We have been tackling health and productivity management based on a theme of “maintaining and improving
the health of employees and their families and creating a vibrant workplace.” In FY2022, we introduced a system
to partially compensate income during administrative leave, aiming to “support the lives of officers, employees
and their families in the event of an accident or illness, and to assist them in returning to work.”
We are aiming to help employees feel not only physically and mentally healthy, but also to feel secure in termsof their future financial security, and to improve corporate value creation and productivity.
│Tokyo Kiraboshi Financial Group, Inc.│ 24

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Kiraboshi Group’s Human Capital Management for the Realization of Well-Being for Customers and Local Communities

Diversity,
respect, andmutual support

Fair opportunities anda positive working environment

We have revised our personnel system into a role- or jobbased system that evaluates expertise and market value andadded a multi-track career system that allows employees topursue professional or management positions based on theircareer aspirations.

From single- to a multi-track career paths
In April 2021, we overhauled our personnel system to clarify role or job levels, demonstrate diverse values, andestablish a system that links increased expertise to higher compensation. We abolished the seniority system toenable more flexibility, including the appointment and promotion of experts and younger employees.

Professional career II● Appointment and promotion of young employees
after the introduction of the new personnel system

Management

Management career

Professional
career I
Staﬀ career
Basic stage

General manager

Branch manager

Deputy branch manager

41 years old

37 years old

34 years old(ages at time of appointment)

Exhibits performance based on a high level of skill and expertise, andis responsible for consulting services and various types of planning

Details

ManagementcareerEngages in management that maximizes organizational performance
while generating results using his or her skills and expertise

Staff career

Mainly responsible for routine work (serving customers/administrative work)

Basic stage

Stage at which employees acquire basic skills
Equivalent treatment to oﬃcers

Share-based
remuneration

We have established an officer-level remuneration structure (made up
with bonus incentives and share-based remuneration) for personnel who
demonstrate performance based on their high level of expertise. We havemade it possible to hire outstanding talent from outside the Company
and have clarified achievement goals as professionals.
We have also introduced a new “director system,” under which we will
appoint employees who have a wealth of work experience, are highly
skilled and motivated, and have excellent character and insight to serve
as directors, and based on their experience in high-level duties and posts,
we will consider appointing them as officers.

Fluctuate basedon results

MonthlysalaryOﬃcerSpecialist

Create an inventory of “abilities and skills needed in the current environment” to achieve aspirations and vision

Must

Establish “action goals” to be specifically put into practice during the year

Reflection

Reflect on changes and personal growth over the past year

One-on-one
Employee
Evaluation feedback

We strive to ensure a comfortable work environment and maintain workplace order in which all officers
and employees are respected as individuals and can trust each other.

3. Prohibition ofharassment

We respect the human rights and individuality of each and every person, strive to protect their privacy, and do not engage in any form ofharassment including discrimination or harassment on the grounds of appearance, gender, age, nationality, race, ethnicity, politics,
religion, creed, social status, disability, or illness, etc., or inappropriate use of social media (websites, blogs, social media platforms, etc.).

We verify the effectiveness and state of compliancewith our investment and loan policies at meetings ofth e B oa rd of D ire c to rs an d th e M ana gem ent
Meeting, etc., and do not invest in or financebusinesses that raise major humanitarian concerns.

⃝ Human rights awareness activities targeting all employeesWith the aim of raising awareness of human rights
among employees, we ask all employees to submit
human rights slogans once a year as part of ourhuman rights awareness activities.

⃝Fair hiring practices

We adhere to rules regarding hiring and humanrights, and strictly and fairly select talent based
solely on a person’s ability and aptitude, without
regard to their nationality or creed, etc.
● Number of human rights slogans submitted
1,444

FY2022
FY2021

1,880
1,824

FY2020

Fostering a hospitality mindset

2. To aim to be a financial group truly chosen by customers as a top regional bank by undertaking initiatives to improve the Kiraboshi Group’s HM and reduce complaints
3. To ensure each and every employee embodies Kiraboshibito and has a high level of “dignity” and “pride”
ReﬂectionCan(persons)

326

238

248

295

As of
April 1, 2022

⃝HM (hospitality mind) = hospitality from the heart

We receive more than 100 complaints a year from
customers regarding our response and the language weuse. In order to please our customers, we ensure our
employees are hospitality orientated on a day-to-day
basis, by teaching them to be “polite” and “dignified.”

Must

As of
April 1, 2021

25 │Tokyo Kiraboshi Financial Group, Inc.│

2. Maintaining order inthe workplace

1. To build an organizational structure that provides higher quality customer service and exceeds customer expectations to impress and make them happyWill● Number of people by career track

Immediate superior
Other superiors
Supervisor

We respect the basic principle of the SDGs “Leave no one behind.” We also clarify our policy of respecting human rights while
recognizing the potential impact of our activities on human rights, and we carry out our business operations accordingly.

Purpose of establishing an HM Office (newly established in May 2023)

Can

Career development
meeting

1. Respect for humanrightsElimination of complaints regarding customer service: “Aiming for zero”

Identify personal aspirations and vision to be achieved through work

Immediatesuperior

Fair opportunities anda positive working environment⃝Prevention of sexual and power harassment

48 director appointees (as of April 1, 2023)

Once a year, employees reflect on their growth and identify their skills, abilities, and careergoals. We also interview employees to find out if they have any requests to be reassigned
for career enhancement, and increase opportunities for job transfer in accordance with
their wishes, based on their contribution to the Company and their expertise.

By holding discussions with multiple
evaluators, we are able to foster
common understanding and provide
pertinent feedback, which links to“career development” and “growth
support” for the employee concerned.

Diversity,
respect, andmutual support

In accordance with the Kiraboshi Group’s Basic Policy on Social
Responsibility (Sustainability Policy), we respect the humanrights and individuality of all people, and we are committed tocontributing to the sustainable development of local
communities through “contributions to local communities,”“self-fulfillment,” and “organizational growth.”

We respect the human rights and individuality of each and every person and strictly prohibit any form of sexual or power
harassment. In addition to establishing an internal hotline in case harassment occurs, we have a “Hotline System” foremployees to report or consult on organizational or individual matters such as violations of the law and we collaborate
with an external organization’s hotline, the “Human Frontier Consultation Office,” in an effort to prevent harassment.

Bonus

Career design sheet

Career development meetings

Stimulating andimprovingeach other

Human rights and hospitality mind (HM)⃝ We do not invest in or finance companies or projects
that have a negative impact on human rights

Career track
Professional
career I / II

Remuneration structure for specialists and director system

Will

Professionals who voluntarily
improve their market value
through relentless eﬀorts

Human rights policy

Aiming to train professionals and design diverse careers

Specialists

Mechanism

Professionals who voluntarily
improve their market value
through relentless eﬀorts
Stimulating andimprovingeach otherA rewarding workplace

Establishment of a personnel system

Environment Culture

Environment Culture

Mechanism

A rewarding workplace

Professional career

Management career

265 280

As ofApril 1, 2023

● Number of complaints about response and language
150

FY2020148

FY2021106

FY2022⃝Culture that does not overlook inappropriate responses,
but communicates and makes improvements, andcommunicates and praises good work and excellence

We are working to create a new culture by constantly taking“pride” in working for the Kiraboshi Group and respecting
others, not overlooking inappropriate responses, communicating
and improving aspects not done well, and praising excellence.

⃝Aiming to reach an even higher stage by each
employee increasing his or her value and contributing
to the enhancement of corporate value
We are aiming for a structure in which all Group officers andemployees take ownership of their actions to change their
behavior, and impress and make customers happy byexceeding their expectations.

│Tokyo Kiraboshi Financial Group, Inc.│ 26

Tokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupManagement Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Message from the Chief Financial Officer
Analysis of Financial Management Factors to Improve ROE

Medium-Term Business Plan:
Financial and CapitalManagement
Hidenori Tsunehisa
Deputy President
and Group CEO

We seek to strike a balance in our operations between
improving profitability, improving capital efficiency, and ensuring
financial soundness. As part of our financial management for
improving ROE, we have improved lending yields and RORA by
replacing low-profit assets with highly profitable assets andcontrolling risk assets. We are promoting complex transactions
by building relationships to create value together with ourcustomers, which is gradually boosting overall profitability. The
accumulated balance of business financing is also contributing

Improved capital eﬃciency

FY2022 Performance Review

Numerator: Net income
Denominator: Equity capital

In FY2022, not only did we have to deal with the impact of COVID-19, but
we also had to conduct financial operations in a business environmentthat was undergoing significant changes, including heightened geopoliticalrisk linked to the situation in Russia and Ukraine and other events,
monetary tightening in some developed countries such as the UnitedStates, and fluctuating exchange rates. Even against that backdrop anddespite recording a loss on sales of foreign bonds, gross core businessprofit expanded significantly year on year, thanks to an expansion in theoutstanding loan balance and margins achieved primarily through thebuilding of main bank relationships and business financing, and anincrease in non-interest income fueled primarily by commission income
from corporate customers. Appropriate cost controls helped reduce
expenses year on year, with efficiency gains at the head office facilitating a
reduction in personnel. Regarding credit-related expenses, while weremoved provisions against the Russia/Ukraine situation, we did record
provisions for certain industries under the discounted cash flow (DCF)
method. Overall credit expenses improved significantly on the back of alower provisioning rate and other factors. As a result, both ordinary
income and net income rose year on year in FY2022.

Kiraboshi Bank (non-consolidated)
FY2021(¥ billion)(actual)FY2022

YoY change(actual)(revenue impact)

Gross core business profit

78.6

90.7

+12.1

Net interest income

65.6

74.4

+8.8

Non-interest income

12.9

16.3

+3.4

(51.4)(50.4)+1.0

Expenses
Net core business income

27.2

40.3

+13.0

Credit-related costs

(6.3)

(2.0)

+4.2

Ordinary profit

26.0

36.5

+10.4

18.4

27.4

+9.0

18.1

21.1

+3.0

Net income (Kiraboshi
Bank, non-consolidated)
Net income (Tokyo
Kiraboshi FG, consolidated)

Progress on Key Goal Indicators (KGI) in the Medium-Term Business Plan
Overall, we achieved the planned targets for major key goal indicators (KGI) and the Medium-Term Business Plan is progressing smoothly.
We conducted operations that would help generate an improved risk/return ratio. The return on equity (ROE), one of the KGIs, reached 6.5%,
outstripping the plan by 1.5 percentage points.
Our efforts to strengthen profitability are clearly bearing fruit, with profit from customer business reaching ¥21.6 billion (+¥1.1 billion comparedto the plan). The contribution of subsidiaries to consolidated income measure came in below the plan, with our digital bank (UI Bank) and
Fintech business (Kiraboshi Tech), which are future growth areas, currently running a start-up deficit. Our ultimate aim is to develop into afinancial group that is capable of generating a stable net income of ¥20 billion or higher, while also ensuring a capital ratio or 8% or more.
FY2021 (actual)

FY2022 (plan)

FY2022 (actual)Compared to the plan

ROE (FG, consolidated)

5.7%

5.0%

6.5%

+1.5%pt

Core OHR (Kiraboshi Bank, non-consolidated)

65.3%

59.8%

55.5%

−4.3%pt

18.1

16.0

21.1

+5.1

12.6

20.5

21.6

+1.1

0.1

0.4

(1.5)

(1.9)

8.4%

8.3%

8.1%

−0.2%pt(¥ billion)

Net income (FG, consolidated)
Profit from customer business(Kiraboshi Bank, non-consolidated)
Contribution of subsidiaries toconsolidated income (FG, consolidated)
Capital ratio (FG, consolidated)

27 │Tokyo Kiraboshi Financial Group, Inc.│

Fig. 1: FG consolidated

Analysis of financial management factors to improve ROE
ROE

RORA

Improved risk/return
Numerator: Net income
Denominator: Risk assets

Numerator: Equity capital

FY2021 (actual) FY2022 (actual) YoY change(¥ billion)〈Top-line control〉
Building main bank relationships

ROE〈Cost control〉
Reducing base costs

6.5%

11.6

17.5

+5.9

8.4%

8.1%

−0.2%pt

RORA

0.4%

0.5%

+0.0%pt

Fig. 2: Changes in ROE and business financing (yield and balance)

Building a highly proﬁtable portfolio(Business financing: LBO loans, real-estate non-recourse loans and other forms of structured finance)〈Credit cost control〉

Our capital costs
6% (as of 23/3)････ 2.6
ROE（%）〈Capital management〉

Businessﬁnancing ････1.52
yield (%)

Considering various capital policies

Denominator: Risk assets

Businessﬁnancingbalance ････69.7
1.0(¥ billion)

68.7
20/3

1.77
1.3

121.1
4.1
117.0
21/3

6.5

5.7

2.74

2.19

In addition to accumulating risk assets in the form ofbusiness loans to meet our customers’ funding needs, weare also focusing on improving the risk/return ratio byrotating and distributing investment lending to othercompanies. The market for M& A and LBO loans is
expanding as a means of helping large companies carve

282.1
6.0

415.8 Senior

276.1
22/3

23/3

Securities, PE funds
etc.

24/3

《Plan》

out, which select and focus their operations, and SMEs
solve business succession or transfer problems. We arealso strengthening mezzanine and equity financing together
with our Group companies in order to flexibly satisfy thesekinds of customer needs. (See Fig. 2)(Unit: ¥ billion)+208.3Fig. 3: Changes in risk assets+11.6

Medium-TermBusiness Plan

《531.8》516.8
100.8 Mezzanine

Changes in Risk Assets+281.9 －28.8+0.7%pt

Capital ratio〈Risk asset control〉

Increasing earnings relative to risk assets
Switching to highly proﬁtable assets

5.7%

Net income (excluding special factors)

Capital ratio

Ensuring soundness

significantly to the improvement in ROE. We will continue toimprove capital efficiency by strengthening earnings andcontrolling costs, and achieve a level of ROE that surpasses thecost of shareholders’ equity. (See Fig. 2)
We aim to achieve a total shareholder return ratio of 20-30%.
With that aim in mind, we strive to improve shareholder value
by further enhancing shareholder returns, while also pursuingsustainable growth investment and capital soundness in a wellbalanced manner.

+315.9 －21.9 +10.8+19.9

Securities, PE fundsetc.

Others

－2.9

+38.8

Securities, PE funds
etc.

+16.7
OthersCommercially
viable loans

4,140.6+28.9
Commercially
viable loans

Others3,879.7

3,555.0
Commercially
3,261.4 viable loans

2021/3
Actual2022/3
Actual2023/3
Actual2024/3Published plan
│Tokyo Kiraboshi Financial Group, Inc.│ 28

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Message from the Chief Financial Officer

Capital Management to Improve PBR

Enhancing shareholder returns

Basic policy

We recognize the importance of pursuing both capital and financial management aimed at improving ROE inorder to achieve sustainable growth and increase corporate value. Our basic policy is to secure a healthy level ofcapital and optimize the allocation of management resources. We also seek to use capital to simultaneously
improve profitability and enhance shareholder returns.
Sound capital ratio

Use capital to strengthen proﬁtability (improved capital eﬃciency)

Internal Build up internal
reserves reserves＋

Evolve asset portfolio throughappropriate capital allocation
and risk asset control

Return proﬁts to shareholders

Demonstrate ﬁnancial intermediary
Financialintermediation function as a regional ﬁnancial institution

Short term

through appropriate risk-taking that considers RORALong term Growthinvestment

Future-oriented growth investment(1) Equity investment and strategic investment into Group companies(2) Improve management eﬃciency through DX investment, etc.

Shareholder Enhance
returns shareholder returns
Total shareholder return ratio 20-30%
FY2020¥60

FY2022¥115

We seek to return profits to shareholders based on the level of capital and we strive to pay stable and consistentdividends and maximize stakeholder value. As part of our target to achieve a total shareholder return ratio of 2030%, we increased our dividend from ¥60 per share in FY2020 to ¥75 in FY2021 and ¥115 in FY2022.
Going forward, we will strive to enhance profitability, ensure sound capital, pay stable dividends, and improve
our stock price and price-to-book ratio (PBR).
FY2018FY2019FY2020

FY2021

FY2022

FY2023(Estimated)

Dividend per share (¥)

60

60

60

75

115

130

Total dividends (¥ billion)

1.8

1.8

1.8

2.3

3.5

3.9

39%

25%

47%

20%

20%

Approx.
20%

4.9

7.6

4.1

11.6

17.5

20.5

Total shareholder return ratio(based on net income,excluding special factors)

Net income (¥ billion)(excluding special factors)

Maintaining a sound capital ratio

We seek to improve financial soundness by strengthening profitability, building up internal reserves, and evolving
our asset portfolio through appropriate capital allocation and risk asset control.

Utilizing capital to improve profitability

Efforts to strengthen profitability in businesses have generated fresh cash flows. We aim to increase
corporate value by investing those flows in a well-balanced manner into areas that generate short-term
benefits, and into future growth areas, such as digital initiatives and growth companies. We are also
advancing sustainability initiatives relating to climate change and other social issues in order to improve
corporate value.
Short term

We are fully demonstrating our financial intermediary function as a regional financial institution byaccumulating loan risk assets, and building relationships with customers to enhance their corporate
value.

Long term

We will strengthen the foundation of our future business through equity investments and strategic
capital allocations to Group companies. We seek to use DX investment to improve cost efficiency
and to conduct investments with capital efficiency in mind. We hope that developing a new businessmodel, which involves the building of a digital platform to facilitate greater cooperation with external
partners and across industries, will help revitalize local communities and solve local social issues.
The Group will strive to reduce the cost of shareholders’ equity and achieve a level of ROE thatexceeds that cost by further enhancing dialogue and communication with the stock market.

Changes in capital allocations

Medium-Term Business Plan Yr. 1 & 2+1.28%

Medium-Term Business Plan Yr. 3 (Plan)－1.16%－0.52%

8.74%

21/3

Expect signiﬁcant
future returns
through equity
investments andGroup strategy
and DX investments

Increase in
Net income
risk assets, etc.
(FG, consolidated)(equity investment, etc.)+0.63%－0.19%

Group strategy
andDX investment

Dividends

Financial
Accumulated
GrowthShareholderintermediary function
internal reserves
investment
returns(local contributions)

29 │Tokyo Kiraboshi Financial Group, Inc.│

Initiatives for reducing cross-shareholdings

The Group has formulated the Basic
End of
End of
End of
End of
End ofPolicy on Cross-shareholdings and refrains,
2019/3 2020/3 2021/3 2022/3 2023/3*
i n p ri n ci p l e, f ro m h o l d i n g s h a res i nbusiness partners and other companies,
Number of
70
68
64
62
62
except in cases when a cross-shareholding
holdings
i s j u d g e d t o e n h a n c e t h e G ro u p’s
corporate value over the medium to longBook value
17.6
16.1
14.1
13.8
17.8
(¥ billion)
te r m t h ro u g h t h e m a i n te n a n ce a n dstrengthening of a business relationshipwith a business par tner. We make a*2023/3: ¥7.8 billion increase for 8 stocks due to partial cancellation of retirement
benefit trusts (¥3.8 billion from sale of 8 stocks and net increase of ¥4.0 billion)
comprehensive decision on whether or
not to hold shares in a business partner
firm by fully considering the level of return on the cost of shareholders’ equity and our relationship with thatbusiness partner. Reducing cross-shareholdings is also important for our capital policy, and we are committed tofurther improving capital efficiency and increasing shareholder value.

Summary
We intend to grow together with the local community by addressing the changing times and helping resolve
ever-changing and evolving social issues. We will emphasize our consulting function to deal with various
customer issues, and continue to pursue initiatives aimed at further restructuring our business and improving
risk/return ratios by offering mezzanine, equity, and other investments to meet customer needs. We aredetermined to invigorate communication with our stakeholders, achieve sustainable growth for the Tokyo
Kiraboshi Financial Group, and enhance the Group’s corporate value.

－0.53%－0.11%

8.15%

Increase in
Net income
risk assets, etc. Group strategy(FG, consolidated)and(equity investment, etc.)
DX investment

23/3

Financial
Accumulated
Growthintermediary function
internal reserves
investment(local contributions)－0.12%
Dividends

Shareholder
returns

8% level

24/3│Tokyo Kiraboshi Financial Group, Inc.│ 30

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Overview of the Medium-Term Business Plan (FY2021 to FY2023)
The Kiraboshi Group started its Medium-Term Business Plan in FY2021. In order to realize our vision within thisplan of becoming a Tokyo-based platform owner that creates new value for customers, we are expanding ourBusiness Strategy of the Medium-Term Business Plan

management base and reforming our business structure, building a platform to provide business opportunities,

Strategy (PLAN)

and enhancing products and services that meet customer needs by promoting DX.

Management
philosophy

To be a ﬁnancial group for small and medium-sized enterprise customers
and individual customers in the Tokyo metropolitan area that will contribute to
the development of local communities through comprehensive ﬁnancial services.
A group that

A group that takes
on challenges

connects visions

Endure existence asa local ﬁnancial groupthat oﬀers unique
ﬁnancial services

Continue to take on challenges bytaking advantage of the characteristicsof the Tokyo area to contribute to
the development of our customers
and the regional economy

Always value the thoughts ofour customers,the region,and our employees to betrusted and neededbrilliantly shines

Management policies

Vision of
the Medium-TermBusiness Plan

A group that

Be a Tokyo-based platform ownerthat creates new value for customers― From Tokyo to all over Japan, and then to Asia ―Business Strategy of the Medium-Term Business Plan
<Reform of management base>⃝ Digital transformation (DX)
Integration of face-to-face and non-face-toface, financial and non-financial services

Demonstration of

coordinator/hub functions⃝ Improving headquarters efficiency andstrengthening headquarters sales<Reform of business structure>⃝ Kiraboshi to support seniors⃝ Supply of middle-risk take and equity capital

Creation of social value forcustomers⃝ Demonstration of group synergies

Corporate

Establishment ofa digital bank,
improvementof customer
convenience

SolvingsocialissuesPractice of fiduciary duty (FD) in collaboration with Kiraboshi Life Design Securities
Life plan support according to the lifecycle
Consolidation of offices for corporate customers, improvement of productivity, andstrengthening of headquarters sales
Promotion of main bank relationships, equity, integration of financial and non-financial services
Integrated support for corporate management, business succession, asset management, etc.
Support for medical institutions

Integration of
face-to-face andnon-face-to-faceservices
Integration offinancial and nonfinancial services

Reallocation of personnel through further streamlining of branches and headquarters
Work style transformation, productivity improvement through DX
Recruitment and development of professional human resources, diversification ofhuman resources, and development of Kiraboshibito with multi-track career path

Financial Targets (KGIs) and KPIs under the Medium-Term Business Plan
22/3
<results>

KGIs

23/3
<Medium-Term Business Plan>

23/3<results>

Compared to the plan

5.7%

5.0%

6.5%

＋1.5%pt

65.3%

59.8%

55.5%

＋4.3%pt(3) Net income <consolidated>¥18.1 billion¥16.0 billion¥21.1 billion+¥5.1 billion(4) Proﬁt from customer business <Kiraboshi Bank non-consolidated>¥12.6 billion¥20.5 billion¥21.6 billion+¥1.1 billion(5) Contribution of subsidiaries to consolidated income <consolidated>¥0.12 billion¥0.4 billion¥(1.5) billion¥(1.9) billion

8.4%

8.3%

8.1%

－0.2%pt

22/3<results>

23/3<results>(1) ROE <consolidated>(2) Core OHR <Kiraboshi Bank non-consolidated>(6) Capital ratio <consolidated>

KPI(1) Branch strategy

supportbusiness(4) DX(5) Corporate
customer

Future Vision: Comprehensive service business that is also strong in ﬁnance

Promotion of DX(3) Human resource development andpersonnel system reform(3) Life plan

Creation of value for customers

Individuals(2) M anagement base reformand resource allocation(2) Productivity⃝ Comprehensive branch reorganization andstrategic personnel placement⃝ Human resource development and personnel
system reform(1) Business structurereform and Group
collaboration
for solving social
issuesWhat to do (DO)strategy

Offices for corporate and retail customers, andoffices specializing in corporate customers
Retail-focused branches

24/3<Rate of progress> <Medium-Term Business Plan>

50 offices

49 oﬃcesー

54 oﬃces

56 branches

55 branchesー

34 branches¥29 million

Gross core business proﬁt
per headNumber of transactions
with business owners
Balance of transactions withbusiness owners¥35 million

111%¥32 million+1,780 customers +2,838 customers

283%

1,000 customers+¥17.9 billion+¥41.7 billion

83%¥50.0 billion

Kiraboshi Package(*)

27,107 customers 44,997 customers

75%

60,000 customers

Individual Internet users

151,000 users

246,000 users

61%

400,000 users+799 customers +2,130 customers

355%

600 customers+¥300.0 billion+¥734.3 billion

122%¥600.0 billion

388 customers

692 customers

69%

1,000 customers

210 customers

412 customers

103%

400 customers

Number of loans to customers with main bankrelationship having annual sales of ¥300 million or moreAmount of loans to customers with main bankrelationship having annual sales of ¥300 million or more
Number of business succession
support customers
Number of medical transaction
support customers*Kiraboshi Package: property management trust, testamentary trust, testamentary substitute trust, etc.

31 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 32

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Financial Highlights/Financial Targets (KGIs) under the Medium-Term Business Plan
2. Core OHR <Kiraboshi Bank non-consolidated>

1. ROE <FG consolidated> (%)(hundred millions of yen, %)

6.5
5.7

Medium-TermBusiness Plan

《5.9》

77.0

75.7

65.3

3.7
ROE excluding equity method proﬁt (special factor)

21/3

22/3

23/3

24/3

(planned)

3. Net income <FG consolidated> (hundred millions of yen)
211
181

Medium-TermBusiness Plan

20/3

21/3

22/3

23/3

24/3

(planned)

4. Proﬁt from customer business<Kiraboshi Bank non-consolidated> (hundred millions of yen)
Medium-TermBusiness Plan

Medium-TermBusiness Plan

《200》

216

《234》

■CO₂ emissions

22/3

Power usage (thousand kWh)

5,832

50.76%

12,772

23/3

24/3(planned)

5. Contribution of subsidiaries to consolidated
income <FG consolidated> (hundred millions of yen)

11,345

5,409
4,130

FY2020

FY2021

FY2022

Number of those employed as mid-career professions
and their ratio to all managers (persons, %)FY2020

FY2021

FY2022

Ratio of female managers (%)■Number of those employed as mid-career professions
Ratio of those employed as mid-career professions

50

17.29%

18.90%
15.31%

16.82%

16.90%FY2021

FY2022

50

9

14

20/3

21/3

22/3

23/3

24/3

(planned)

FY2020

FY2021

FY2022

Number of participants in
the Kiraboshibito training course (persons)

6. Capital ratio <FG consolidated> (%)

FY2020Total number of participants, total length of time of the training course,
and total amount of expenses for the training course

Medium-TermBusiness Plan

43,90440,721
39,761

《23》

8.6

11
3

12,07930

Net income excluding equity
method proﬁt (special factor)

21/3

Financial Data andCorporate Data

CO₂ emissions reduction rate

116
41

Management Base That
Supports Value Creation

62.40%

16.11%

126

20/3

CO₂ emissions reduction rate (vs. FY2013) (%, t-CO₂)《57.3》

175

76

Initiatives for
Value Creation

55.5

1.3
20/3

62.7

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Non-financial Highlights

46.91%

67.9

5.4
2.6

OHR excluding extraordinary dividends
from subsidiaries (special factor)
and dividends from equity-method
aﬃliates (special factor)

Tokyo Kiraboshi
Financial Group’s
Value Creation

8.7

8.4

6,274

Medium-TermBusiness Plan

8.1

78,50371,722

《8.3》

1,118

4,264

843

1

24,232
1,454

(15)
20/3

21/3

33 │Tokyo Kiraboshi Financial Group, Inc.│

22/3

23/3

24/3

(planned)

20/3

21/3

22/3

23/3

24/3

(planned)

FY2020

FY2021

FY2022FY
FY
FY
2020 2021 2022

Total number ofparticipants (persons)

FY
FY
FY
2020 2021 2022

FY
FY
FY
2020 2021 2022

Total length of time of
Total amount of expenses forthe training course (hours) the training course (thousand yen)

│Tokyo Kiraboshi Financial Group, Inc.│ 34

Tokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupManagement Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Profit from Customer Business (Kiraboshi Bank’s Core Business Profit)
Profit from customer business increased significantly by ¥8.9 billion year on year, mainly due to a large increase inloan balance of ¥365.6 billion year on year, an increase of ¥1.2 billion in income from fees and commissions, mainly
from commission income from corporate customers, and improvements in both the loan yield and the loan-deposit
yield difference.
The average loan balance for the fiscal year ended March 31, 2023 already exceeds the planned average loanbalance for the fiscal year ending March 31, 2024. Given that the closing loan balance for the fiscal year ended
March 31, 2023 significantly exceeds the average loan balance, the planned average loan balance for the fiscal year
ending March 31, 2024 has been revised from ¥4,434.4 billion to ¥4,837.3 billion.
Profit from customer business for the fiscal year ending March 31, 2024 has also been revised from ¥23.4 billion, as
originally planned, to ¥24.9 billion. While profit from customer business was negative for the fiscal year ended
March 31, 2019, it turned positive in the fiscal year ended March 31, 2020 and has been increasing steadily eversince. This is believed to be the result of sincerely responding to customer needs, primarily through transactions formain bank relationship building, and enhancing our specialized finance and consulting functions at the headquarters.

Loan balance/yield (billion yen, %)Loan yield
Yield difference
Loan････ 1.19
yield

1.18

1.21

Loan-deposit ････ 1.17
yield diﬀerence

1.17

1.19

¥8.9

20/3

0.9

1.4

20/3

21/3

23.4

22/3

23/3

24/3

20/3

(Planned)

21/3

22/3

23/3

■Commission income from corporate customers■Commission income from individual customers■Others* April to July 2020
Cash back campaign for commission onpurchase of investment trusts* August 2020
Establishment of Kiraboshi Life Design Securities

11.5

24/3

Of which, interest on loans anddiscounts related to business financing

22/3

23/3

YoY

4,369.7

4,735.3+365.6

Loan-deposit yield difference

1.19

1.25

＋0.05

(3)

Income from fees and commissions

11.5

12.7

+1.2

35 │Tokyo Kiraboshi Financial Group, Inc.│

Income from fees and commissions(Kiraboshi Bank) (billion yen)

11.1

(2)

Profit from customer business

46.3

49.8

《55.3》57.2 《56.2》

24/3(Planned)

12.7

Loan balance (closing balance)( (1) × (2) + (3) − (4) )Planned

Revised plan

Medium-Term《64.3》
Business Plan

23/3

(Left: average balance,right: closing balance)

20.5

(1)

(5)

as well as rise in loan yield

Signiﬁcantly revised forecast for FY24/3

44.1(billion yen, %)(expenses + temporary treatment of retirement
benefit expenses, etc.)(Average balance)

Growth trend due to increase in loan balance,

Initial plan

Breakdown of factors

(4)

22/3

(Average balance)

Interest on loans (billion yen)

Initial plan

* Calculation method: (loan balance × loan-deposit yield difference) +income from fees and commissions − general and administrative expenses

General and administrative expenses

21/3(Average balance)《24.9》

12.6《4,434.4》

3,696.3

Revised plan

1.7 times)

Medium-TermBusiness Plan

3,908.2(billion yen)(

Revised plan

《4,837.3》

4,116.7➡While commission from domestic exchange services decreased due toreduction of fund transfer charges, commission income from corporate
customers increased by ¥1.8 billion year on year due to fee income
from transactions for main bank relationship building and businessfinancing, etc.

21.6

1.25

4,515.6+¥1.2 billion year on year

¥8.9 billion year on year

1.26

4,735.3

Loan balance (closing balance) +¥365.6 billion year on year

+

1.33％

1.30％

Average balancebillion (+70.8%) year on year

Income from fees and commissions

1.26%

1.25％

Closing balance

Profit from customer business (core business profit)+

Medium-TermBusiness Plan Revised plan

4.1

8.8

3.5

3.4

Business ﬁnancing activities contributed toCommission
income fromthe increase in interest on loans and discounts
9.9

《8.9》

2.9 Others

7.7 corporate

3.2

Medium-TermBusiness Plancustomers

5.8
3.3

《6.2》

4.0
3.6

51.1

50.3

+0.7

1.0

1.2

12.6

21.6

+8.9

20/3

21/3

22/3

23/3

24/3

20/3

2.0

2.1

21/3

22/3

Commission
income from

2.1 individual

customers

23/3│Tokyo Kiraboshi Financial Group, Inc.│ 36

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Roundtable Discussion on Value Creation

Value Creation Initiatives: Achievements and Challenges

Shuya Nomura

Outside Director
Tokyo Kiraboshi Financial Group, Inc.

Takeshi Yoshino

Director and Executive Officer
General Manager, Corporate Planning DivisionTokyo Kiraboshi Financial Group, Inc.

Shoji Nishio

Outside Director
Tokyo Kiraboshi Financial Group, Inc.

Outside Directors Shoji Nishio and Shuya Nomura sit down with Director Takeshi Yoshino to
discuss the results of efforts to improve the Kiraboshi Group’s medium- to long-term corporate
value and create shared value with stakeholders, and the challenges faced.
─ In our 2022 discussion last year, you listed three issues for
the Group’s growth strategy, namely creating new services,leveraging strengths in the Tokyo area, and raising thevisibility of the Kiraboshi Group brand. What improvements
have been made in each area over the past year?

Nishio: In addition to UI Bank, which was launched in January2022, the Kiraboshi Group has a wide range of companies
involved in financial and non-financial fields under its umbrella,
and its drive to expand solutions and services to meet the diverse
needs of its customers is highly evaluated.
Of all the Group companies, I expect great things from UI Bank.
As a company that plays a central role in the Kiraboshi Group’s
DX strategy, I would like to see UI Bank actively attract Kiraboshi
Bank’s corporate and other customers as well as Kiraboshi
Group’s customers in order to move swiftly onto an early growthtrajectory.
Nomura: In today’s world, banks are expected to provide
solutions to the various issues that companies are facing. I think
the fact that the Kiraboshi Group now boasts various functions inhouse and has built a system to offer customers services they
never thought a bank could perform will prove a major advantage
going forward.
The Group has recently declared its new Giving our all, forTOKYO. brand slogan, which I feel clearly states the significanceof its presence as a regional financial Group in the Tokyo area.
Tokyo is one of the world’s largest metropolitan areas but it also
faces advanced issues. The greatest progress lies in the Group’stransformation into a financial group that offers a rich solution
menu that can really give its all for Tokyo, just as the slogan says.

─ Does this relate to the second issue of leveraging strengths
in the Tokyo area?
Nishio: Tokyo has many advantages over rural areas. Many
people supposedly moved out of the city to rural areas during the37 │Tokyo Kiraboshi Financial Group, Inc.│COVID-19 pandemic, but people are now clearly moving back to
the city. Many companies want to set up information bases inTokyo and major companies are concentrated in the city. Having
access to venues where people can interact with each other andexchange cutting-edge information presents an appeal that online
communication could never match.
Another key feature of the Tokyo area is its wealth of corporate
players, from small operators to small and medium-sizedenterprises (SMEs) and large corporations. Discussing thesebenefits and how to use them to promote business is an ongoing
topic.
Nomura: The Japanese economy is supported by SMEs, andmany of those companies possess world-class technology in
specific fields. SMEs may be comparatively small, but they have agood chance of launching into global markets if they have a Tokyobase. Being able to support this trend is a great honor for the
Kiraboshi Group as a regional financial group.

Recently, we are seeing a growing concentration of DX and AIrelated startup companies in the Bunkyo district and other areas,
and the number of young entrepreneurs looking to balance thepursuit of business with solving social issues is increasing. Working
together with these entrepreneurs could benefit Tokyo, and, byextension, Japan and the rest of the world. I would like to see the
Kiraboshi Group reaffirm its prowess as a regional financial groupwith the ability to do that.
Nishio: Having said that, it is not easy for banks to keep track ofstart-up company trends, because start-ups tend to turn toventure capitalists and angel investors rather than banks. If the
Kiraboshi Group is able to fully grasp the latest start-up trends,
then it could expand its new service creation by extending
support and helping start-ups grow through financial and nonfinancial solutions.
Nomura: The traditional banking model tends to make lending
decisions by looking at a company’s financial statements for thelast three years. Start-ups often don’t have that kind of trackrecord, so it has been difficult to build relationships with banks.
However, recently, we have started to witness attempts by banks
to change the way they do business by providing loans andinvestments based on an evaluation of a company or operation
on its own merits. It is an extremely challenging situation for
financial institutions that requires keen judgement skills. I hope
the Kiraboshi Group rises to the challenge by, for example,
developing human resources who can judge the good and bad
points by looking at a business itself, rather than simply reviewing
documentation.
Yoshino: We are actively hiring external professional talent in
consulting, business succession, M&A support, fund management,
and other non-financial fields, and we have been focusing on
human resource development over the past few years with theadditional aim of expanding that professional expertise across theGroup.
I feel all employees are now able to select from our expanding
range of solutions and make confident proposals to customers,
assuming of course that they know their customers well. We are
now able to read materials received from customers in advanceand peruse customer websites to ascertain where their latentneeds may lie and prepare tailored solution menus. That is a big
development for us.
─ What progress has been made on raising the visibility of the
Kiraboshi Group?
Nishio: The Group is now developing newspaper advertisements
and outdoor billboards to coincide with the launch of the new
brand slogan. I expect this will prove a great opportunity to boost
affinity for the Group’s brand image among its customers.
Given the nature of its core banking business, the Kiraboshi Groupexhibits a strong top-down organizational structure, with everyone
staying inside the box and appearing meek and obedient. I would

like to see employees use this latest branding campaign toappear more frequently in public to convey information.
Nomura: I think one of the key ways of breaking out of this moldis for employees to get to know each other better. The Kiraboshi
Group possesses many abilities that people have not yet noticed.
Seeking to deepen mutual understanding and sharing knowledge
internally will enable employees to help customers in entirely new
ways and help employees feel the significance of working for the
Kiraboshi Group more keenly.
A company is a group of people. I don’t think a company cancreate a brand if its employees simply start work and leave workat the appointed times without a care. A company’s personality
and brand is born from the concentrated individuality and dense
commitment of all its employees. Understanding each other’scapabilities is the first step in the branding process.
Yoshino: We have formulated the Kiraboshi philosophy and threeprinciple action guidelines for Kiraboshibito. One requirements of
Kiraboshibito, namely an individual who always thinks “how it canbe done,” incorporates a very big message. We used to reach apoint where we would tend to give up if we couldn’t dosomething, but I feel our employees have become more creativeand persistent as they embraced the Kiraboshi philosophy. I too
felt at the time that it was important to get to know each otherwell in order to better implement the Kiraboshi philosophy.
Nomura: Employees should also be aware of the kind of initiatives
their company is pursuing and what kind of a company it is. If
employees gain a clear grasp of the overall situation beyond theirown work tasks, they will learn to tackle and solve many issues
themselves rather than simply awaiting instructions.
─ You have given us some hints regarding new issues andfuture initiatives, but let me ask you finally how you intend
to help create value for the Kiraboshi Group as outside
directors.
Nishio: I sometimes bring up difficult topics to help firmly promote
the development of UI Bank. I feel there is a lack of thoroughmonitoring across the board. The important thing is not to just do
something and move on, but to verify the resultant impact andencourage improvements. I will continue to exert my supervisory
function in this area.
Nomura: As an outside director, I believe it is important tointroduce external impressions, opinions, and approaches. We
can usefully prevent any significant misdirection in overall policy
by conveying elements that people might not notice when they
are on the inside and pointing out any differences with external
trends.
Yoshino: UI Bank intends to fully expand its non-financial services
by providing embedded financing. To that aim, we will strengthen
our ability to build relationships that enable customers to talkabout issues, and aim to evolve into a comprehensive service
business that is also strong in finance so we can propose ways tosolve issues that lie outside the realm of finance.
│Tokyo Kiraboshi Financial Group, Inc.│ 38

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group

Initiatives for Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Group Consulting System for Realizing a Comprehensive
Service Business That Is Also Strong in FinanceGroup Consulting System for Realizing a Comprehensive
Service Business That Is Also Strong in Finance

Medical and Welfare Business Division

Trust Business Division

We place importance on supporting medical institutions whose business operations
have deteriorated due to the impact of COVID-19, contributing to management
support, business succession, and sustainable growth of local medical care. Byutilizing senior loans and equity subordinated loans for the purpose of funding
support, we aim to achieve the Medium-Term Business Plan’s KPI of supporting morethan 400 medical institutions. In addition, we will promote transactions for main bankrelationship building, provide consulting services by Group companies, establish aloan under public loan programs in cooperation with the government, and work toachieve the management strategy of the Kiraboshi Group.

Kiraboshi Bank is one of the few regional banks that offers full-scale corporate trust
services. For customers with income-producing real estate, we provide solutions forreal estate management and asset liquidation through One-Trust (real estate
management trust), and for clients in the construction industry who receive public
works orders, we help them raise funds through the unique product Con-Trust (public
works cost receivable trust) in cooperation with local governments.
For individual customers, we also offer a testamentary trust and 100-year passports(money trust) as a trust agent of major trust banks. We support our customers andtheir families to achieve an ideal life plan without worries by adding functions such asuse, protect, and pass on to their precious property.

● Balance of loans to medical institutions aimed at building main bank relationship/yield (billion yen, %)
1.57

1.57

1.31

Medical and Welfare Business Division
Total loan balance approx. ¥144.0 billion(Of which, ¥67.7 billion in balance of loans aimed atbuilding main bank relationship)

3.0
20/3

9.5
21/3

1.28
67.7

Atsushi Uehara

Executive Officer,
General Manager of Medical andWelfare Business Division,
Kiraboshi Bank

《1.39》■Con-Trust■Real estate management trust

42.9

42.8

41.6

19/3

20/3

21/3

58.8

71.3

General Manager,
Trust Business Division,
Kiraboshi Bank

Planned

23/3

24/3

113.4

For medical institutions whose business operations have deteriorated due to the impact of COVID-19, we areproviding support for sustainable growth of local medical care by using proper lending that evaluates business,and loans with interest subsidy in cooperation with the Tokyo Metropolitan Government and Kanagawa
Prefecture. We will also strive to reduce our customers’ interest burden by establishing a loan with interest
subsidy in cooperation with the government.

Consulting utilizing Group functions
We will make maximum use of the functions of Group companies (consulting, leasing, credit cards, businessefficiency through DX, etc.) to provide specific advice such as current situation analysis of business partners,
support for formulating management plans, and management improvement. By providing support in various
fields, we will establish a medical platform and contribute to solving our customers’ issues.

Support for business stabilization through the use of equity subordinated loans
Equity subordinated loans are an effective fund-raising method for medical corporations that are unable to raise
capital. The Medical and Welfare Business Division’s expert knowledge enables us to assess the feasibility andfuture potential of medical institutions’ business plans and actively provide support that takes more risks thansenior loans, thereby supplying necessary funds and ensuring stable management.

Main battleground
Advanced for large hospitals
acute
phase
General
acute
phase

Recoveryphase

Recovery phasespecialized type

Chronic
phase

Chronic phasespecialized type

23/3

No. 1 among regional banks

Source: Securities reports issued by each bank

99.0

34.6
Kiraboshi Bank

Bank ABank B

16.2

14.2

Bank CBank D

Product lineup
For corporate clients:	We are working to meet each client’s needs, focusing on activities with Con-Trust and
One-Trust.
For individual customers:	With the addition of the 100-year passports to our testamentary trusts, we now offer
products that address the thoughts and concerns of customers regarding the use,preservation, and succession of their assets.

Development of internal systems and human resources training
For corporate clients:	The staff of the Trust Business Division, which is a dedicated division, handle everythingfrom product explanations, contract signing, to subsequent asset management,
providing a one-stop service. We focus on the development of human resources who
can handle these responsibilities through means such as hosting a Trust Dojo fortraining specialized human resources.
For individual customers:	Training for qualified personnel is regularly held by the parent trust bank in order toenable all branches to handle trust agency products. We also participate in trust
agency training provided by the Trust Companies Association of Japan to ensure
adequate human resources.

Market development

Acutephase-oriented type

Care mix type

The Kiraboshi Group has invested in C’s One Inc. (CEO: Kanoko Oishi,
hereinafter “C’s One”), a subsidiary of Mediva Inc. (CEO: Kanoko Oishi,
hereinafter “Mediva”), which is engaged in medical and nursing care consulting.
The Mediva Group has clients nationwide such as hospitals, clinics, andnursing care operators. With the aim of achieving medical reform from thepatient’s perspective, it is committed to the sound development of the medical
and nursing care industry by taking advantage of its expertise, know-how
outside the medical and nursing care industry, and experience and ability
developed in the field. The Mediva Group and the Kiraboshi Group haveestablished a good relationship over a long period of time since the foundingof Mediva.
The Mediva Group is promoting the concept of converting small and mediumsized hospitals with deteriorated management or without successors into
community hospitals, which are the core of the comprehensive community
care system where housing, medical care, nursing care, prevention, and living
support are provided in an integrated manner, by transferring its extensive
consulting know-how for hospitals nationwide to C’s One.

● Repositioning of small andmedium-sized hospitals

Medical care》function— Establishing a comprehensive regional care system in cooperation with the Mediva Group —《Investment in C’s One Inc.

22/3

● Trust asset balance of regional banks (billion yen) (as of March 2023)

Financing to support the sustainable growth of local medical care

39 │Tokyo Kiraboshi Financial Group, Inc.│● Transaction amount of major trust products (billion yen)

Yoshiharu Saito《26.8》

40.5

22/3

PlannedCommunity
hospital(homemedical care)

In order to make trust business more familiar to customers, we conduct the following activities in cooperation
with each sales branch.
⃝ Propose new financing methods to customers who have won public works contracts⃝ Propose measures for reducing the management burden and asset utilization for customers with incomeproducing real estate near sales branches⃝ Propose the introduction of the Con-Trust system to local governments within whose area Kiraboshi
Bank branches are located
For customers who are already using trust products, we will offer the Kiraboshi Group’s unique solutions to meettheir needs, such as loans, asset management, and investment, aiming to become their main bank.

Hospital 《Medical care
Regionlocation》(home/facility)│Tokyo Kiraboshi Financial Group, Inc.│ 40

Initiatives for Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Digital Strategy
Business development utilizing both real contact points
and digital contact points with customers
At the Kiraboshi Group, we are promoting expanding digital contact points with customers
through the establishment of UI Bank and a wallet service provided by Kiraboshi Tech. In
addition, we are actively working on digitalizing real contact points with customers, one of
the strengths of Kiraboshi Bank, to ensure accessibility to financial services for ourcustomers while promoting the efficiency of branches and operations, and theadvancement of face-to-face consulting services.
Furthermore, we are promoting the improvement of convenience through the integration ofdigital services within the Kiraboshi Group, and encouraging usage by employees ofregional businesses.
We aim to provide new value through the integration of “face-to-face and non-face-to-face”
services and “financial and non-financial” services, and to expand our business with users
and business partners nationwide, as a unified Kiraboshi Group, through these channels.

Digitalization of real contact points with customers

Business alliance to expand digital contact points with customers
In FY2023, we formed business alliances with Shinhan Bank, Mitsubishi Corporation, and SBI Holdings topromote the growth of our retail business and the establishment of a digital platform.
We will continue to enhance and evolve the financial functions and services of the Kiraboshi Group, and realize
seamless customer response and comprehensive service provision through the integrations of face-to-face andnon-face-to-face services, and financial and non-financial services.

Tomoaki Tateno
General Manager,
Digital Strategy Division

CompanyA

Expansion of digital contact points with customers<Branches>

Advanced face-to-face contact points
Towards advanced face-to-face services
using digital technology<Bank sales staﬀ>

Local
business owners(and theiremployees)

Customers
with digitalcontact
pointsFinancial
functions+Improvement of convenience and experience
Non-ﬁnancial
functionsCustomers
nationwide

Provision of embedded ﬁnanceBusiness
partners

Expanding use of the system by developing job areas
Integration of Group services

Next generation branches = Improved eﬃciency of in-branch operations

Integration of non-ﬁnancial and ﬁnancial services

Activities with data utilization = Advancement of consulting functions

Collaboration with business partners through BaaSA digital-driven Tokyo-based platform concept
Project A

Project B

HANEDA Platform

Platform for foreign
residents in Japan
Overseas funds
transfer service providers

Start-ups

Service providers
for foreigners

Administrative
organsLife support,
supermarket and retail

Medicalinstitutions

Medical platform

Strengthening strategic
partnerships for
expanding digital-driven
retail business…

CompanyA

Establishment of a growth strategy
for the retail business with Shinhan Bank,a successful model in the retail ﬁeld

Company

B

CompanyC…

Provision of system functions
and ideas in collaboration
with FinTech companies

Promotion of digitalization of real contact points with customers− Efficiency improvement of operations and advancement of face-to-face services −In our sales offices, we are advancing the development of next-generation branches, expanding operations
using in-branch tablets, and improving the efficiency of counter operations while maintaining contact points
with customers. In face-to-face sales, we are fully operating the CRM system, transforming the sales structure
to utilize data, and aiming to improve the closing rate of business negotiations.
Face-to-face sales

CRM system

Expand in-store tablet operations
Improve branch operation eﬃciency while
maintaining contact points with customers

Strengthen sales capabilities using CRM system
Improve success rate of business negotiations
with appropriate customer management<Reduce customers' burden to ﬁll out forms> <Operation-less for bank employees>

Sales PDCA based on CRM■ Beneﬁts of branch operation eﬃciency improvement●Convert extra space to sales space●Streamline administrative personnel andstrengthen sales personnel

Fill out
Input data using➡
paper forms
in-store tablets■ Beneﬁts of CRM system introduction in all sales oﬃces●Accumulate and analyze sales data through employees●Shift to a sales approach based on data analysis

Centralization of functions to headquarters etc.
leading to elimination of voucher processing
API

Terminals

4

Self-withdrawal<Strengthen in-store consulting operations><Lobby area to be used as consultation space>

Inheritance consultation using
remote consultation system

Administrative
Sales and➡
space reduction
procedures

From consultation atbranches to remote consulting

Entertainment,
sports, leisure, art
Regional
vitalization

C

Data entry

Large
corporations

Project C

41 │Tokyo Kiraboshi Financial Group, Inc.│

Haneda Airport andsurrounding facilities

Company

Next-generation branches Real channel: branches

Expansion of business starting with digital as an integrated group

With the digital functions of UI Bank and
LaLaPay as starting points, we aim toc o n s t r u c t a To k y o - b a s e d p l a t f o r m ,i n c l u d i n g K i ra b o s h i G ro u p , b u s i n e s spartners, and users of business partners byreal izi n g t h e p rov isi o n o f s e r v i ces i ncollaboration with external partners.
We aim not only to provide traditional
financial services, but also to improvecustomer convenience and solve social
issues and issues of business partners byproviding financial services in collaboration
wit h b usin ess p a r t n e rs t h ro u gh B aa S
starting with non-financial services.

B

Provision of embedded
ﬁnancial services incross-industry networks<Rolling out ﬁnancial and non-ﬁnancial services>
Shift to digital contact points

Company

Investee FinTech companies

Digital retailpartners

Users

Face-to-face and non-face-to-faceCustomers
with realcontact
pointsBusiness partners

Smart
Cash
Station

Proposals

3

CRM

1
Data
accumulation

2

Plan development

Data analysis

Transfer of personnel tofront oﬃce
Project D ‒Future concept
Regional vitalization,entertainment and leisureStreamlining of branch administrative personnel

strengthening of sales personnel

Move away from sales dependent on personal skills

to data-based sales│Tokyo Kiraboshi Financial Group, Inc.│ 42

Tokyo Kiraboshi
Financial Group

Initiatives for Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

UI Bank

Kiraboshi TechUI Bank is working to improve the usability of its app and to establish a platformthat allows more flexible collaboration with non-financial companies through API
linkage, in order to play a central role as a digital-driven Tokyo-based platform. In
addition, in order to contribute to the productivity improvement of the entire
Group, especially in the business for individual customers, we will further
strengthen our banking functions to grow into an alternative to Kiraboshi Bank.

Kiraboshi Tech’s business foundation
is based on FinTech services thatconnect workers and companiest h ro u g h t h e s al a r y p re p ay m e nt
Maekyu system and wallet service.
By increasing the number of newservices in the BtoBtoE domain, we
aim to generate stable businessre v e n u e a n d co n t r i b u te to t h egrow th of the Maekyu business,
which is a foundation of ourbusiness. In addition, as the way of
approaching work is evolving, we
will strive to realize financial wellness
for workers through leveraging theunique strengths of Kiraboshi Tech.

Awarded in the Collaboration Category of the Japan Financial Innovation Award 2023

Improvement of UI/UX
We are making necessary improvements based on customer feedback in order toenhance the reputation of the app. We also recognize the need to fundamentally
review the app and enhance UI/UX in order for customers to use it on a daily basis.
We will make improvements so that the functions and services of Group companies,
including Kiraboshi Bank, Kiraboshi Tech with LaLaPay PLUS, Kiraboshi JCB, andKiraboshi Life Design Securities, can be provided seamlessly, while expanding ourlineup of non-financial services closely related to daily living.

Nobuyuki Yasuda

Managing Executive Officer,
Tokyo Kiraboshi Financial Group,
Representative Director andPresident, UI BankUI Bank will roll out BaaS to non-financial businesses such as Kiraboshi Group’s alliance and business partners,
taking advantage of its ability to provide price-competitive financial services. In addition, we will establish a
BtoBtoC or BtoBtoE (employee) business model that approaches BaaS partner customers and employees of
Kiraboshi Bank’s business partners. To this end, we will establish a foundation that enables us to flexibly provide
financial services that meet the needs of customers through API linkage.

Development of products and services that connect families
Given that 70% of UI Bank’s customers are in their 40s or older, we will develop products and services thatconnect seniors with their children, grandchildren, and other family members in a way that integrates financial
and non-financial products and services. To this end, we will provide services that are particularly relevant to thelives of seniors and useful for asset succession, drawing on Shinhan Bank’s advanced digital technology andother resources. In addition, we will work to expand products for asset building, such as housing funds and asset
management.
2022/032023/03
Deposit balance: ¥136.2 billion Deposit balance: ¥335.8 billion

FY2023 ‒Set out on “Group collaboration,”“external service collaboration”
and “BaaS provision”

Expand and accelerate each
initiative

Direct debit
Open bank accountDeposit and withdrawal

Money transfer

Account balance/statements[External][Internal]

Established Digital Bank withminimal functions

At present (Mar. 2023)

Collaboration with KLD Securities

Linkage with LaLaPay
Credit card loan
BaaS(GIG-A）

Collaboration with external services

Foreign currency deposits

Loans on deeds

Expansion of BaaS users

Expansion of collaboration with external services

Toward establishmentof a growth model
armed with the“power to connect”
Growth throughcollaboration withGroup companies

43 │Tokyo Kiraboshi Financial Group, Inc.│

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Awarded in the Collaboration Category of the Japan Financial Innovation Award 2022
● What is the Maekyu service?
❶Attendance
data links
Maekyu system❷Application

Company A ❸Maekyu transfer
instructions

Employee B
Have anaccount

Have anaccount
Bank bBank aAccount in the nameof employee B

Account in the nameof Company A⓿Advance preparationof funds for Maekyu

Kiyotaka Yagyu

Representative Director andPresident,, Kiraboshi Tech

❹Transferof Maekyu

We have expanded the sales domain of our services, which had been focused on non-regular employees, toinclude full-time employees. This initiative was launched last fall, and the number of companies newly contracted
has grown dramatically, leading to the strengthening of the foundation for the platform business to be developedin the future.

Start of LaLaPay PLUS
Aiming to reduce running costs and further improve convenience, the new digital wallet LaLaPay PLUS will belaunched in August by integrating the existing Maekyu service with the BANKIT® service of APLUS. In addition to
improving user convenience, we will expand our services to flexibly respond to increasingly diverse andsophisticated needs by enhancing service scalability and development speed.

Development of new businesses
In addition to commission revenues from the Maekyu service and the LaLaPay PLUS wallet service, thedevelopment of three new businesses using this platform is planned. Specifically, we plan to develop a flat-rateservice to solve DX and welfare benefit issues faced by SMEs, an employee finance business based on Maekyu,
and a worker matching business aiming to solve the issue of securing human resources.
⃝ The number of registered employees with attendance data in Maekyu has increased significantly. We willcontinue in our aim to increase the number of users, focusing on job-related activities.
⃝	T he number of stores that accept payment with the new digital wallet LaLaPay PLUS expanded throughmeasures such as the introduction of contactless payment.
We will further improve convenience by implementing new functions.
● Digital financial functions arounddigital wallet

Growth leveraging
external collaboration■ Growth utilizing Kiraboshi Groupʼs management resources (Group retail strategy)■ Growth utilizing external assets such as partnership and alliance with other companies
and banks (BaaS business strategy, etc.)➡ Seamless provision of financial and non-financial services (improved convenience)■ Increased convenience of digital wallet
Virtual prepaid
cards<Top-up fromMaekyu>Create income opportunity throughexpansion of functions and collaboration

Business development
being pursued

Initiatives for
Value Creation

Expansion of sales domain

BaaS roll-out and establishment of BtoBtoC model

At the time of opening(Jan. 2022)

Tokyo Kiraboshi
Financial Group’s
Growth Strategy<Electronic money
functions>

Business development
being pursued

Digital walletTop-up frombank account

Smartphone-based
self-contained
ﬁnancial services

E-commerce
payment is possible
Tap to pay (planned)
Expansion of otherwallet functions■ Increase in Maekyu users: Changes in the number ofattendance registrants
468,000

483,000

534,000

FY2020

FY2021

FY2022600,000

Expanded
opportunities forfee business◦Payment andmoney transfer◦Finance◦Corporate
services

FY2023 (planned)■ Expansion of beneﬁt services■ Expand Maekyu and LaLaPay platforms, and aim for top market share in the salary
prepayment market■ Move into matching business for part-time workers in order to address current labor shortage■ Provide new finance schemes utilizing attendance data and performance appraisal data

│Tokyo Kiraboshi Financial Group, Inc.│ 44

Tokyo Kiraboshi
Financial Group

Initiatives for Value Creation

Corporate Customer Strategy

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

MF Division/SF Division/RF Division/PE Office

Key points of corporate customer strategy
Promotion of main bank relationships

Provision of the best and most diverse financing schemes based on our deep understandingof our customers’ businesses

Provision of services that leverage the comprehensive strengths of all 21 Group companies

Proposal of a variety of solutions to diverse management issues by taking a consulting-based
approach

Provision of methods to approach new markets

Provision of domestic and international networks that link to the creation of business
opportunities and new businesses

Support for
older adults
Support forchild-rearing
generation

SMEs
Decarbonization
initiatives

SMEs
Business
succession andbusiness exit

Accelerationof digitalizationand ideal stateof localcommunities

Diversity andInclusion

Start-up
supportEnsuring
foreigners andolder adults
have access tofinancialservices

Support for
medicalinstitutions(management)

Financialservices
support for the
younger
generation

Socialinfrastructure
supportGiving our all, for TOKYO.

Kohei Takai

Tomoe Yajima

General Manager, MF Division

General Manager, PE OfficeBusiness loan balance (¥100 mn/Yield, %)Kiraboshi Group’s market environment

Gross domestic product (nominal)
Tokyo gross municipal product (nominal)Tokyo

124.86 million(as of December 1, 2022)

14.04 million(as of December 1, 2022)¥550.5 trillion¥109.6 trillion(FY2021)(FY2020)

Number of companies(Corporations + individuals)

3,390,000 companies

Number of offices(Private offices)

5,078,000 offices(2021)

1.52(2021)

1.77

Status on investment in private
equity funds (Unit: ¥100 million)

776● Number of Kiraboshi Bank customers with main bank transaction relationship
Share

Tokyo

231,678

7,075

3.05％

Kanagawa

78,938

2,832

3.58％

Total

310,616

9,907

3.18％

● Branch networkTokyo

1,008 Mezzanine
2,821
697
10
687
20/3

1,211
1,170
21/3

41

2,761
22/3

60

4,158 Seniors

23/3

Commission income from corporate customers
Fee income related to business ﬁnancing, etc.

124 branches

Kanagawa

38 branches

Saitama

3 branches

Chiba

1 branchTotal

166 branches(Remarks)“ Population Estimates,” Ministr y of Internal Af fairs and Communications; “ Population(Estimates) of Tokyo,” Tokyo Metropolitan Government
166 branches, 114 offices“Annual Report on National Accounts for 2021,” Cabinet Office; “Tokyo Statistical Yearbook(fiscal 2020),” Tokyo Metropolitan Government“Economic Census for Business Activity 2021 Preliminary Tabulation,” Ministry of Internal Affairs and Communications
Prepared based on a 2022 survey by TOKYO SHOKO RESEARCH, LTD. (The number of companies is based on the TOKYO SHOKO RESEARCH, LTD. database)

Fund balanceCommitment
capital5,168(Proportion:
approx. 19%)

(Proportion:
approx. 12%)

928

657

(main bank relationships and business financing) (Unit: ¥100 million)

45 │Tokyo Kiraboshi Financial Group, Inc.│

General Manager, RF Division

2.19(Proportion:
approx. 11%)422,000 companies (Proportion:
approx. 12%)(2021)
616,000 offices(2021)

Number of companies Number of customers with(denominator)
main bank relationship

Motoyasu Okada

General Manager, SF Division

2.74

Japan
Population (estimate)

Kazuki Yoneda

contributed to the increase in commission income
61

33

10
20/3

Medium-TermBusiness Plan

《29》

16

21/3

382

209
19/3

429

527

21/3

23/3

22/3

23/3

Breakdown of funds invested
Breakdown of funds invested

Number of Remaining capital
funds
commitment

Venture fund6

¥1.1 billion

Reconstruction and debt
fund

6

¥2.9 billion

58¥37.7 billion

5¥1.8 billion

25¥49.1 billion

Buyout fund
Others (real estate,
infrastructure, etc.)

Others (funds of Kiraboshi Capital,
policy-based investment, etc.)

22/3

Fund
balance(Bookvalue)

273

240
20/3

425

Total:

100

Total:¥92.8 billion│Tokyo Kiraboshi Financial Group, Inc.│ 46

Initiatives for Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Kiraboshi Capital
MF Division (established in April 2021)
The MF Division consists of a mainbank relationship building team,which works to resolve various issues
for sales branch customers, and theSyndication Office, which is in chargeof middle operations such as
distribution, documentation, andagents.

Examples of solutions implemented by the main bank relationship building team
⃝ Total debt restructuring that contributes to improving customers’ cash flows⃝ MBO financing for business succession⃝ Real estate non-recourse loans for asset liquidation⃝ Bridge loans to support business transfers and discontinuation⃝ Cross-border loans to overseas subsidiaries⃝ M&A financing to realize corporate growth strategies

SF Division (established in January 2019)The SF Division mainly handles LBO financing within structured finance. The Division coordinates the needs ofsponsors and other stakeholders as a team specializing in LBO financing to provide optimal financing schemes
for projects structured by domestic and foreign private equity funds and financial institutions. After sponsors
have invested in a project, the Division provides comprehensive support that makes full use of capabilities of the
Kiraboshi Group to realize growth and exit strategies that leads to improvement of corporate value.
● Example: LBO financing

Sponsors(PE funds)

Relationship diagram*President

Masato Ohtani
Deputy President

Kiraboshi Capital offers seven funds of six different types. By using these funds for investment, we will work to solve
the issues facing our investees, with the aim to achieve further corporate growth together with their management
and employees. To achieve this, we offer a wide range of services, from staffing, problem identification and solution
formulation and internal system development to support for sales activities.

Nobuo Jinnai

LBO loans

Kiraboshi Bank, Ltd.

● Seven funds of six different types to meet the needsof various customers

Part out throughsyndication

Target Companies(medium-sized enterprises and SMEs)

Yume Kagayaki Fund 1

50％

Other ﬁnancial
institutions

RF Division (established in April 2022)
The RF Division handles mainly real estate non-recourse loans within structured finance, and is involved inprojects consisting of real estate investment funds and asset management companies. The Division is working on
diversifying target asset types, with a focus on residential, healthcare and retail facilities, and office buildings, andis establishing a portfolio of loans with the aim to secure stable returns.

Active recruitment of specialized human resources

Sales office support

Strengthening external collaboration⃝ A pproximately a quarter of
employees working in the SF,
MF, and RF Divisions are midcareer hires.
⃝ We organize teams by functionthat requires know-how, andnur ture such teams by
integrating mid-career hireswith professional personnel.

⃝ W e h o l d re g u l a r t r a i n i n gsessions (online and overnight
courses) to improve the abilityof employees to understandissues.

⃝ B y strengthening collaboration
with external networks such asprivate equity funds, consulting
firms, and financial institutions,
we are complementing eachother’s know-how, expanding ourability to provide solutions, andstrengthening our information
gathering capabilities.

PE Office (established in April 2022)
The PE Office aims to support improvements to the corporate value of medium-sized enterprises and SMEs throughinvestments in private equity funds, expand opportunities for initiatives that include LBO loan structuring, andsecure periodic income by diversified investment in assets, time, and income sources through portfolio
establishment. The Office is also actively working to invest in policy investment funds that can promotecollaboration with the Kiraboshi Group, such as support for business succession, capital restructuring, and support
for start-ups and overseas expansion for customers including companies in which Kiraboshi Capital invests.

Shareholding ratio

Stock payments

SPC for acquisition
purposesAcquisition of all shares

47 │Tokyo Kiraboshi Financial Group, Inc.│

Nobuo Jinnai

Managing Partner

President, Kiraboshi Capital

Invest*Simpliﬁed

Existing owners

Toshiya Sasagawa[Buyout investment] Yume Kagayaki Fund 1

In principle, Yume Kagayaki Fund 1 acquires a majority
stake in the investee, improves corporate value by
providing hands-on support through problem solving
and grow th strategies, and delivers results bytransferring investees to new partners.

[Growth capital investment] Yume Habataki Fund 1 & 2

15％

KCP Equity Assist No. 1

Yume Habataki Fund 1
Yume Habataki Fund 2

Yume Yorisoi Fund 1
A&KC Medical No. 1

Tokyo Sparkle

Start-up phase Growth phase Maturity phase Decline phase

Others

Mainly SMEs

Mainly listed companies, etc.

● Balance by fundDescription

Total fundamountYume Kagayaki Fund 1

Buyoutinvestment¥2.6 billion Nov. 2018

Yume Habataki Fund 1

Growth capital
investment¥2.0 billion Mar. 2019

Yume Yorisoi Fund 1

Mezzaninefinance¥12.5 billion Aug. 2020

Tokyo Sparkle

Engagement
investing¥10.0 billion Nov. 2020

A&KC Medical No. 1

Medical fund¥3.0 billion Mar. 2021

KCP Equity Assist No. 1

Equity investment(minority)¥8.0 billion Jun. 2021

Yume Habataki Fund 2

Growth capital
investment¥4.0 billion Feb. 2023

Name

Total: ¥42.2 billion

Established

Yume Habataki Fund 1 & 2 assist venture companies instrengthening their financial base by investing in theirstocks and bonds with share options, etc., and support
growth as a consultant to management, aiming forgoals such as listing.

[Engagement investing] Tokyo Sparkle

Tokyo Sparkle proposes measures to improve value
based on corporate value analysis, and provides
advice through dialogue on financial and non-financial
issues (including ESG) from a shareholders perspective.
Once the results of our activities are reflected in theshare price, the shares are sold in a manner that does
not adversely affect the market.

[Mezzanine finance] Yume Yorisoi Fund 1

Yume Yorisoi Fund 1 provides financing through means
such as capital loans and preferred equity investments,
to meet the diverse needs of Kiraboshi Bank’s
customers, including strengthening their financial baseand business successions.

A&KC Medical No. 1

A&KC Medical No. 1 provides financing to customers
that engage in business with Kiraboshi Bank, throughmeans such as capital loans to strengthen the financialbase of business categories that are difficult to support
with equity, such as medical corporations.

KCP Equity Assist No. 1

KCP Equity Assist No. 1 aims to provide a wide range ofsolutions, mainly support for M&A processes and PMI
promotion for grow th strategies, and businessrestructuring from the deteriorating business environment
caused by COVID-19, aiming for returns commensurate
to the methods used after achieving success.

│Tokyo Kiraboshi Financial Group, Inc.│ 48

Tokyo Kiraboshi
Financial Group

Initiatives for Value Creation

International Strategy DivisionTokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

SS Division (newly established in July 2023)
Since April 2021, the Kiraboshi Group has been working to support start-ups throughits Start-up Support Office. In July 2023, the SS Division (Start-up Studio Division) was
newly established to better strengthen our support functions. Moving forward, we
will further accelerate our open innovation initiatives, centered on the functions of
KicSpace HANEDA.
Specifically, we will discover and nurture start-ups by providing a range ofopportunities including accelerator programs, innovation pitches by start-ups,business proposal-type open innovation that enables start-ups to make proposals
directly to large corporations, and reverse pitches from large corporations.

Collaboration with large corporations
Tran Dinh Thiep

Manager,International Strategy Division

Yoshikazu Kojima
General Manager,
International Strategy Division

Hikaru Minoda

Joint General Manager,
International Strategy Division

Overseas offices that enable market-orientated support for overseas expansion⃝ Kiraboshi Bank is the only financial institution with offices specializing in consulting services in both China and Vietnam.

Examples: Consulting on establishment of subsidiaries, support for various applications, consulting on businessstrategies, consulting on market research, coordination with various experts⃝ The Bank newly established a representative office in Bangkok, Thailand to support our overseas expansion
throughout the ASEAN region.
● Providing Asian business support insideand outside Japan
Consulting
subsidiary inBeijing, China

China

Consulting
subsidiary inShanghai, China
July, 2023
Opening of Thailand
Bangkok
RepresentativeOﬃce
Investing in
local funds<Example of market-orientated support for overseas expansion>

We introduced Japanese companies that match the needs of Vietnamesecompanies through relationship building with Vietnamese companies, andsupported the creation of new businesses.
June 30, 2022	Established a network with Vietnamese companies and the Embassy of Vietnam by being
the first Japanese bank to support the importing of Vietnamese polished white rice
November 18, 2022	Signed a memorandum of understanding with Tan Long Group, a leading Vietnamesecompany engaged in operations such as rice production and milling and pig farming, withthe objective of contributing to further development of the economies of Japan and
Vietnam and a more active cultural exchange between the two countries
Establishing connections

Consulting
Vietnamsubsidiary in
Ho Chi Minh, Vietnam

Singapore

Collaboration needs
Vietnamesecompanies
with Japanese parties
Government Financial
institutions
agencies

Introduce needs
in Vietnam

Japanesecompanies

Japan & Vietnam Creation of new businesses

Business matching⃝ Each month, we hold Kiraboshi Pitch sessions based around various themes in a hybrid (in-person and online)
format. This event is extremely popular, attracting around 100 participants on average, including businessdevelopment personnel at large corporations and venture capitalists, and leads to opportunities for start-ups toraise funds and expand their sales channels.
⃝ We held a seminar in collaboration with the Tokyo Bar Association on the legal risks to which start-ups are prone.

Collaboration with municipalities⃝ Products produced by companies supported by the Kiraboshi Group were exhibited at an event held in
HANEDA x PiO, an Ota-ku facility. We have also received support from Ota-ku for Kiraboshi Pitch, a crossindustry exchange event for community members.
⃝ We held a joint event with the Kawasaki Institute of Industrial Promotion for businesses interested in entering thehealthcare field or in medical-industrial collaboration.
Collaboration withlarge corporations
Collaboration with support
measures in Japan

Support for overseas expansion of SMEs — time machine model —Support for overseas start-ups
Moving forward, we will gather information
on overseas start-up companies using theoverseas network (overseas partner banks,
overseas funds, overseas government
agencies) we have established to date.
Aiming to become a “Kiraboshi Group
specializing in overseas start-ups,” we willfurther strengthen our overseas network
to fulfill our hub function in Tokyo andsupport initiatives being taken by overseas
companies entering the Tokyo market.

49 │Tokyo Kiraboshi Financial Group, Inc.│LP investment

Luring to Japan

Start-up events⃝ Signed an agreement toinvest in a venture fund innorthern Europe⃝ Investment in growth &venture funds to enable
expansion into the halalmarket⃝ A ssist excellent overseas
venture companies in entering
the Tokyo market, and provide
support in utilizing subsidies
for luring overseas companies⃝ Business matching between
Japanese and overseas
companies⃝ Sponsored the global startup event City Tech Tokyo
held in Tokyo in February
2 0 2 3, as an only financial
institution among sponsors⃝ Considering exhibiting at
the largest start-up eventin northern Europe

Moving forward, we will actively consider LP investments in overseas funds
that develop not only in the ASEAN region, but also in other areas,
including northern Europe, with the aim to establish a global-wide network.

General Manager, SS Division⃝ We held an open innovation pitch event showcasing business proposals to H.I.S. Co., Ltd.
⃝ We organized a pre-briefing session for the reverse pitch program to solve challenges facing GEOMATEC Co., Ltd.
⃝ We are supporting the introduction of robots for digital transformation (DX) purposes as part of inter-facility
collaboration with Future Lab HANEDA, which is operated by Kawasaki Heavy Industries, Ltd.

Business matching

Collaboration withmunicipalities

KicSpace HANEDA functions
Workspace

To support the overseas expansion of Japanese SMEs with excellent technologies, Kiraboshi Bank provides
overseas support using the time machine model which supports overseas expansion by providing guidance andexcellent Japanese technologies and services to ASEAN companies. Moving forward, we will partner with Nissin
Electric Co., Ltd. (Head office: Ukyo-ku, Kyoto; President: Yoshihiro Matsushita), which has been expanding into
ASEAN for many years to support our customers’ alliance businesses.

Yoshiaki Hoshi

Financing

Commercialization support(discovering and nurturing)

Commercialization support (discovering and nurturing) https://kicspace.com/accelerator/⃝ We are running an accelerator program for seed and early-stage start-ups. Over a five-month period, theKiraboshi Group provides support in a unified effort, including mentoring to resolve issues, businessmatching, presentation advice, and consideration of the possibility of investment and financing.
⃝ Experts within the Kiraboshi Group provide support related to law and intellectual property and otherareas that are in high demand by start-ups.

Financing⃝ A dedicated team of venture capitalists capable of handling the entire financing process, from receipt ofrequests to execution and post-financing management, is on hand to meet the debt needs of venturecompanies.
⃝ We hold study sessions and other events for start-ups in collaboration with venture capital firms such as
Kiraboshi Capital, a member of the Kiraboshi Group, that specialize in the seed and early-stage.
⃝ We are considering establishing a fund for seed and early-stage start-ups.

│Tokyo Kiraboshi Financial Group, Inc.│ 50

Tokyo Kiraboshi
Financial Group

Initiatives for Value Creation

Retail Customer Strategy

We strive to be a financial group that is accessible “anytime, anywhere” by providing financial services that meetthe life cycle and needs of our customers, thereby aiming to be a financial group that can be used as a mainbank group. By combining both face-to-face and non-face-to-face channels we will improve access conveniencefor customers and optimize the services we offer to meet their needs.

New customers●Non-ﬁnancial
services

Medical care,nursing care,travel, leisure,housekeeping

management
・Asset succession
・Inheritance・Deposits/
foreign exchange
services
・Various loans

Wealth management

Cooperation between banks
and securities companies

Real estate consultants
Asset management consultants(Kiraboshi Life Design Securities/
promotion of Private Banking and insurance services)

Retirees, wealthy class

In-branch and outbound calls

Working class
Asset formation class51 │Tokyo Kiraboshi Financial Group, Inc.│

Kiraboshi Life Design Securities Co., Ltd.

Owner-operators,
landowners,
wealthy classPB Promotion Division
Trust Business Division

Kiraboshi Consulting Co., Ltd.

infrastructure
・Unsecured
loans

Wealth Management (WM)Oﬃce
Private Banking teamresponsible for customers in
the long-term

Sales oﬃces●Non-face-to-face ●Face-to-facetransactionstransactions
・Account opening
・Assetmanagement
・Deposits/foreignexchange services
・Asset utilization
・Payment
・Property

Financial Data andCorporate Data

We formulated the “Basic Policy on Social Responsibility (Sustainability Policy)” to indicate our overall policy onsustainable management and declare our involvement in development of local communities and solution ofissues faced by sustainable society, based on the Group’s management philosophy, “To be a financial group forsmall and medium-sized enterprise customers and individual customers in the Tokyo metropolitan area that willcontribute to the development of local communities through comprehensive financial services.”《Past efforts to strengthen promotion of sustainability》
FY2019

May 2019 Published SDG Declaration

FY2020Feb. 2021 Expressed support for TCFD recommendations
Feb. 2021 Appointed a Group Chief Sustainability Officer (Group CSuO)

FY2021

Jul. 2021 Disclosed status of TCFD compliance in Integrated Report
Jul. 2021	Set CO₂ emission target for the Group (46% decrease compared to
FY2013)
Dec. 2021 Formulated sustainability and environmental policies
Dec. 2021 Established a Sustainability Promotion OfficeFeb. 2022	Formulated the “Environmentally and Socially Friendly Investment andLoans Policy”
Mar. 2022 Set environment-related investments and loans targets
Mar. 2022	Revised upward the Group’s CO₂ emission reduction targets (60%decrease compared to FY2013)
Mar. 2022 Started offering sustainable financeMar. 2022 Launched Kiraboshi SDGs Evaluation Program

FY2022

Jun. 2022	Started offering Kiraboshi Decarbonization Support Loans incooperation with the Tokyo Metropolitan Government and Tokyo
Environmental Public Service Corporation
Oct. 2022	Invested in the Japan Green Investment Corp. for Carbon Neutrality, apublic-private sector fundOct. 2022	Concluded a partnership agreement for the vitalization of sustainablefinance with the Tokyo Metropolitan Government
Dec. 2022 Started offering Kiraboshi Sustainability Linked Loans
Mar. 2023 Provided first Kiraboshi Sustainability Linked Loan

FY2023

May 2023 Joined GX League

Support system that leverages
the collective strengths of the Group
Major players in the Kiraboshi Group●Provide comprehensive
customer-oriented
ﬁnancial services

Management Base That
Supports Value Creation

Policy on initiatives aimed at sustainability

General Manager, Business Planning Division, Kiraboshi Bank, Ltd.

Existing customers

Initiatives for
Value Creation

The Group works to create both economic value and social value and achieve sustainable management byaddressing social issues in collaboration with stakeholders, while embracing environmental, social, and governance(ESG) perspectives.

A financial group that is accessible anytime, anywhere

Provision of services tailored tocustomers' life cycle and needs

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives Aimed at Sustainability

We deliver solutions to retail customers, corporate owners, and their employees
through the collective strengths of the Kiraboshi Group. We will strive to deliver
valuable financial services by connecting the strengths of Kiraboshi Group companies,
centered on Kiraboshi Bank, to customers, identifying asset formation tailored to eachcustomer and their asset management needs, and needs such as inheritance and theeffective use of real estate, as well as carefully examining issues facing customers thathave not yet manifested.
To this end, we are building a system that includes a Private Banking (PB) Promotion
Division, led by a PB team with high expertise and a real estate consultant team; aWealth Management (WM) Office, which accompanies customers through financial
services over the long term, and the Premium Desk, which is a highly convenient nonface-to-face channel located in our call center. Moving forward, we will improve ourconsulting function and enhance our lineup of financial products to continue providing
valuable financial services, thereby aiming to become a Kiraboshi Group that satisfies
our customers.

Mitsuhiro Okabe

Tokyo Kiraboshi
Financial Group’s
Value Creation

Kiraboshi Bank, Ltd.
Various digital channels
UI Bank Co., Ltd.
Kiraboshi Tech, Inc.
(LaLaQ, LaLaPay)
Outbound call center

Declaration on Carbon Neutrality
The Group had set a CO₂ emission reduction target of 60% (compared to FY2013) by FY2030. However, we achieved
a 62.4% reduction in FY2022 by switching to energy-saving facilities, introducing renewable energy, and promoting
various other decarbonization initiatives. In order to accelerate efforts to decarbonize the region, we announced theFY2030 Declaration of Carbon Neutrality as the Group’s next target.
The Group will contribute to local communities by further strengthening our efforts to achieve carbon neutrality andby providing support to local communities and customers in their efforts to decarbonize.
* Applies only to Scopes 1 and 2.

Joined GX League
In May 2023, we joined the GX League which is headed by the Ministry of Economy, Tradeand Industry. The Group will engage in a unified effort to achieve carbon neutrality andsolve the environmental, social, and economic issues facing local communities to contributeto the realization of a sustainable society.
* The GX League is a forum where a group of companies can come together to discuss the transformation of the overall
economic and social system and practices for the creation of new markets. Participating companies are actively taking
challenges to swiftly become carbon neutral and lead Green Transformation (GX), which is the transformation of theoverall economic and social system, including stakeholders other than themselves.

Other initiatives in which we participate│Tokyo Kiraboshi Financial Group, Inc.│ 52

Tokyo Kiraboshi
Financial Group

Initiatives for Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Initiatives Aimed at Sustainability

Initiatives to achieve carbon neutrality
Fiscal year

FY2021

Scope 1, 2

FY2022

FY2023

FY2024FY2025

Achieve carbon neutrality
FY2026FY2027

FY2028FY2029FY2030Decarbonization of sales vehicles (switching to environmentally friendly vehicles)

Partnership items included in the agreement

Reduction in energy use (changing air conditioning temperature settings, switching to high-eﬃciency equipment, etc.)(1)	P r o m o t e s u s t a i n a b i l i t y m a n a g e m e n t
promotion activities in cooperation withfinancial institutions

Switch to LED lighting
Introduction of electricity generated using renewable energy
Installation of solar power generation equipment and consideration and implementation of PPA at each sales oﬃce
Consideration and implementation of reduction measures based on carbon oﬀsets and technology trends(2)	Initiatives to disseminate and promotesustainability management at SMEs
(3)	D isseminate information on sustainability
management such as cases of excellent
initiatives

Consider useof J-credits

Oﬀset

OthersFirst regional financial institution to conclude a partnership agreement with
the Tokyo Metropolitan Government for vitalization of sustainable finance

Various initiatives through participation in the GX League

Loan products in partnership with the Tokyo Metropolitan Government

Promote customer engagement in decarbonization and support decarbonization by customers

Offering of loan system using the Tokyo Metropolitan
Government’s Tokyo Carbon Reduction Reporting Program

Continuation of forest conservation activities (Kiraboshi Forest)⃝ As described below, the Kiraboshi Group promotes initiatives to reduce our own environmental impact andtransition to a decarbonized society, to contribute to the sustainable development of local economies andcommunities.

1. Switching to electricity derived from renewable energy sources

In FY2022, we started gradually switching to electricity with Non-fossil Certificates with tracking information*that certify the value of renewable energy, and we are working to procure electricity with zero CO₂emissions at 69 offices, including our Head Office.

* N on-fossil Certificates with tracking information certify the “value of being derived from a non-fossil power source” for electricity generated
by a non-fossil power source.

2. Replacement with environmentally friendly vehicles

Conventional gasoline vehicles emit large quantities of CO₂. Kiraboshi Bank also uses a large number ofvehicles for sales activities. As part of our initiative to achieve carbon neutrality, we are replacing our fleet
with environmentally friendly vehicles such as electric vehicles (EVs) and we have installed quick charging
facilities for EVs in the Head Office building. We will consider further replacement of our fleet withenvironmentally friendly vehicles with the aim to further reduce CO₂ emissions.

In June 2022, in collaboration with the TokyoM e t r o p o l i t a n G o v e r n m e n t a n d t h e To k y oEnvironmental Public Service Corporation, Kiraboshi
Bank began offering Kiraboshi Decarbonization
Support Loans as a financing measure that is easy
for customers in a wide range of fields to implement.
Product features⃝The product is for SMEs, etc. that have submitted
a Carbon Reduction Report in accordance with there p o r t i n g p ro g ra m m a n a ge d by t h e To k yo
M etrop olitan G overnment ’s Bureau ofEnvironment. Preferential interest rates are appliedin the first year after accommodating the loan.
⃝Borrowers will be listed on the Kiraboshi Bank
website as a company engaging in decarbonization
efforts using this product.

Offering of Kiraboshi Sustainability Linked
Loans

In December 2022, Kiraboshi Bank began offering
the Kiraboshi Sustainability Linked Loans to promotesustainability management among medium-sizedenterprises and SMEs.
Product features⃝We have established an appraisal system within
the Group to offer lower appraisal costs compared
to ordinary sustainability linked loans.
⃝Some appraisal costs are subsidized* through ap a r t n e r s h i p a g r e e m e n t w i t h t h e To k y oMetropolitan Government.
⃝Kiraboshi Bank has also announced initiatives ofthe borrowers as companies using this product.

3. Cooperating with the campaign for growing low pollen forests

We cooperate with “the campaign for growing low pollen forests,” which aims to pass on healthy forests tothe future, through “term deposits for growing low pollen forests” and forest conservation activities. In
addition to working toward the spread of environmental protection activities through the handling of term
deposits, we are making donations for “growing low pollen forests” every year. Furthermore, we haveconcluded an agreement on forest maintenance and are participating in forest creation of a part of forests
in Hachioji, Tokyo, as “Corporate Forests - Kiraboshi Forest.” Through forestation, we will contribute to a
decarbonized society by helping to increase the absorption of CO₂, which is a factor in global warming.

4. Certified under the “Tokyo Forest Action” accreditation system

With regard to the Kiraboshi Bank Head Office and the Takinogawa branch (and central operations center)that were constructed using materials from Tama, the use of Tokyo forestry resources as construction
materials was appreciated by the Tokyo Metropolitan Government, which certified the Group under the“Tokyo Forest Action accreditation system (recognition of CO₂ volume fixed by means of buildings, etc.)”

53 │Tokyo Kiraboshi Financial Group, Inc.│* T he Tokyo Carbon Reduction
Reporting Program is a systemfor businesses that own or use
small- and medium-sizedbusiness establishments inTokyo to repor t the state of
their initiatives to the Tokyo
Metropolitan Government, withthe aim of monitoring the CO₂
e m i s si o n s o f e a c h b u si n e s s
establishment and implementing
ongoing measures to prevent
global warming.

* Tokyo Metropolitan Government
subsidies are subject to certain
requirement s and screening,
and are not always available foruse.

│Tokyo Kiraboshi Financial Group, Inc.│ 54

Initiatives for Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Initiatives Aimed at Sustainability

Initiatives to address TCFD (Task Force on Climate-related Financial Disclosures)
The Group regards addressing climate change as one of the important matters in its management strategies.
Accordingly, in February 2021, the Group voiced support for the TCFD* recommendations. In addition to disclosing
information in accordance with the recommendations, we will continue to engage in initiatives aimed at mitigatingclimate change risk.
* TCFD is a taskforce on disclosure of climate-related financial information led by the private sector established by the FSB (Financial Stability
Board), and it recommends companies to disclose information on risks and opportunities related to climate change, etc.

Governance⃝The “Sustainability Promotion Office,” which is responsible for planning and overall management ofsustainability, was established in the Business Strategy Division. Based on various policies, the Office plans andformulates sustainability promotion of the Group and engages in coordination with parties including Group
companies and relevant departments. The Sustainability Promotion Office is responsible for environmental
issues and submits related proposals and reports to the Management Meeting and to the Board of Directors.
⃝The director in charge of the Business Strategy Division is the “Group Chief Sustainability Officer (CSuO).”⃝We have formulated the “Basic Policy on Social Responsibility (Sustainability Policy)” which lays out our
involvement in development of local communities and solution of issues faced by sustainable society.

Development of a sustainability management and promotion system⃝The Group is strengthening its management and promotion systems for initiatives aimed at sustainable local
communities and the sustainable growth of the Group.
⃝The Management Meeting submits proposals and reports on measures, policies, and status of initiatives
related to environmental issues (climate change responses, etc.,) as sustainability issues (at least once a year).
The Board of Directors is responsible for the appropriate oversight of reported details concerning
sustainability-related proposals (policy formulation, goal setting, progress of initiatives, etc.).
● Sustainability promotion structure

Board of Directors
Submission/Reporting

Group CSuO (Chief Sustainability Oﬃcer)

Supervision

Management Meeting
Submission/Reporting(1) Risks and opportunities《Analysis process》

Analyze each sector’s risks (transition risks and physical risks) and opportunities
Determine sectors subject to transition risk scenario analysis
Establish scenarios for both transition risks and physical risks, depending on the subject of analysis andanalyze the impact on credit costs* Transition risks are analyzed for the electricity, gas, and transportation sectors. Moving forward, we will work to improve our analyticalmethods and expand target sectors.

Organizing climate change risks and opportunities
Organize climate change risks and opportunities anticipated to be faced by the Group currently and in the future
Determination of targets for climate change risk analysis
Determine targets for analysis, based on impacts on the Group, relevance with climate change, and others

Analysis of transition risk
Qualitative analysis of target sectors

Analysis of impacts on target companies

Analyze impact on collateral property

Organize the impacts of changes
based on scenarios on the target
sectors (companies), etc.

Organize impacts of changes based on
scenarios (increased probability in theoccurrence of ﬂoods) on business andother activities of partner companies

Organize impacts from damage on realestate collateral due to changes basedon scenarios (increased probability inthe occurrence of ﬂoods)

Calculate cost impact based on estimates

Calculate cost impact based on estimates

Calculate cost impact based on estimates

Estimate the impact on credit
expenses due to changes in
the future ﬁnancial statements ofthe target sectors (companies)

Laws andregulations

Sustainability Promotion Oﬃce, Business Strategy Division

Transitionrisks⃝In order to move forward in addressing the risks and opportunities presented by environmental issues, we aim
to deepen our dialogue with customers and local communities, and contribute to local communities to realize
a sustainable society.
⃝We will create common value with local communities and customers and promote initiatives for thesustainable growth of the local economy through the use of sustainable finance, loans based on businessevaluations, various funds, etc., and the provision of high value-added financial services tailored to the life
stages of companies, such as start-ups, founding, sales channel expansion, and business succession.
⃝In terms of climate change-related risks and opportunities, moving forward, we will engage in initiatives tomitigate and adapt to climate change risks of local communities and customers through the provision offinancial services with high added value.

Technology andmarkets

Reputation

Headquarters related divisions, Group companies

StrategyManagement strategy on sustainability

Acute
Physical risks
Chronic
Services
Opportunities

Products
Resource efficiency& energy sources
Reputation

55 │Tokyo Kiraboshi Financial Group, Inc.│

Estimate impacts on credit
expenses due to changes inthe ﬁnancial statements oftarget companies

Estimate impacts on credit
expenses due to lowered
appraisal of target real estates⃝We have identified risks and opportunities associated with climate change anticipated to be faced by theGroup currently and in the future as follows, using the timeframes of short term (five years), medium term (10years), and long term (30 years).
⃝Going forward, we will work to identify and mitigate the risks to the Group and its customers, and turn theopportunities into the growth of the Group.

Instruction

Sharing/Collaboration

Analysis of physical risk

Occurrence of credit risk as a result of adverse impacts on customers’
finance due to tightened regulations and policy changes associated withdecarbonization and other efforts
Occurrence of credit risk as a result of adverse impacts on customers’
finance due to failure to stay current with a rapid shift in technologies
associated with the transition to decarbonized society and inability torespond to fluctuations in demand for products and services withspecific features
Occurrence of credit risk as a result of adverse impacts on customers’
finance due to declined reputation for not being able to adapt to thetransition to decarbonized society
Occurrence of reputational risk in which the Group’s initiatives andinformation disclosure related to climate change are regarded as
insufficient (e.g., actions deviate from strategies)
Occurrence of credit risk as a result of stagnation or suspension ofbusiness activities or damage to real estate security of customers
affected by the occurrence of storms, floods, and other sudden
meteorological events
Occurrence of operational risk caused by a disaster affecting the head
office and branches and/or data centers of the Group
Occurrence of credit risk as a result of adverse impacts on customers’
finance due to changes in long-term climate patterns such as risingtemperature, diminishing cryosphere, and rising sea level
Increase of business opportunities such as provision of services tosupport customers in the transition to decarbonized society and in
addressing environmental issues
Increase of business opportunities by offering financial products andsustainable financeMedium tolong term

Higher evaluation from investors and capital markets that attach great
importance to ESG factors

Short tolong term

Decline in the Company’s business costs owing to resource and energy
savingShort tolong term
Medium tolong term
Short tolong term
Short tolong term
Short tolong termLong term
Short tolong term
Short tolong term

Short tolong term│Tokyo Kiraboshi Financial Group, Inc.│ 56

Initiatives for Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Initiatives Aimed at Sustainability(2) Scenario analysis⃝Having conducted the scenario analysis, we recognized the importance of promoting customers’ business
transformation in preparation for transition to decarbonized society. Going forward, we will perform
quantitative analysis of other sectors to understand the impact of each sector’s climate change risk on theGroup, and we will provide support through dialogue (engagement) with customers in the target sectors sothat customers can promote sustainable management.

《Results of quantitative analysis of transition risk》⃝We conducted quantitative risk scenario analysis for the electricity, gas and transportation sectors within theenergy sector on the assumption of certain conditions, and estimated a maximum amount of increase in credit
expenses which may be incurred by 2050.
Target of analysis
Description of analysis
Scenario used
Amount of increase incredit expenses

Electricity, gas and transportation sectors within the energy sector
Calculated an amount of increase in credit expenses of relevant business operators
upon determining the debtor category based on their financial forecast until 2050.
International Energy Agency (IEA)’s NZE scenario (1.5℃ scenario)* Figures from APS scenario were used as substitute for data not available.

Approximately ¥4.0 to 14.0 billion at a maximum《Results of quantitative analysis of physical risk》
Theme

Financial impact from suspension of operation

Target of analysis

Businesses with head offices in Tokyo or
the three prefectures in the Kanto region

All borrowers

Description of analysis

We calculated an expected cumulative
amount of damage until 2050, and thencalculated an amount of increase incredit expenses that would be incurred
based on the financial forecast made by
the relevant business operators.

We calculated an expected cumulative
amount of damage until 2050, and thencalculated an amount of increase incredit expenses that would be incurred
due to damage.

Scenario used
Amount of increase incredit expenses

Amount of damage to real-estate collateralIntergovernmental Panel on Climate Change (IPCC)
RCP 2.6 scenario (2℃ scenario) and RCP 8.5 scenario (4℃ scenario)
Approximately ¥8.9 billion at a maximum

Credit exposure to carbon-related assets

Sustainability indicator and targets
Setting of environment-related investments and loans(*) targets
Environment-related investments and loans from FY2022 to FY2030: ¥200.0 billion* Funds for introducing renewable energy-related facilities (photovoltaic power, biomass power generation, wind power-generation facilities,etc.) and environmentally friendly vehicles and facilities, etc., loans implemented in compliance with sustainability linked loan (SLL) and othervarious principles, investment in bonds, related trust beneficiary right, investment in funds related to climate change countermeasures, etc.

Environment-related investments and loans
Environment-related investments
and loans to be made by FY2030
Target:¥33.1 billion

Ratio to the total

0.7%* Sectors targeted for disclosure: electricity (excluding photovoltaic power and renewable energy related companies), gas, coal
* The business-type categories of the disclosure target sectors are based on the Global Industry Classification Standard (GICS), andaggregation is made based on the business-type classification used at Kiraboshi Bank.

Risk management⃝We regard climate change risk as a significant risk, and will work to build a system enabling management
under the framework of integrated risk management, taking into account the degree of impact and probability.
⃝In order for the Group to contribute to the realization of sustainable local communities as a regional financial
institution group, we have formulated the “Environmentally and Socially Friendly Investment and Loans Policy”
as an investment and loan policy for businesses which have environmental and social impacts including climatechange. This policy also covers coal-fired power generation businesses, deforestation businesses, and palm oil
plantation development businesses, which are strongly related to climate change.
⃝Going forward, we will proceed with constructive dialogue (engagement) with customers based on risk
analysis results, etc. In the course of the dialogue, we will understand issues and needs of customers andprovide solutions, and thereby identify business opportunities and strengthen risk management of the Groupand customers.

57 │Tokyo Kiraboshi Financial Group, Inc.│¥25.5
billion¥200 billion(FY2022 to FY2030)

2022

2030

(FY)

⃝We will continue to proactively provide sustainable finance by supporting customers’ efforts such as response
to climate change.

Setting of the Group’s targets for mitigating environmental burden
CO₂ Emission Reduction Targets by 2030

Achieve carbon neutrality for
Scopes 1 and 2 by FY2030

Scope 1, 2: Achieve carbon neutrality by FY2030⃝We have been engaged in the reduction of CO₂
emissions until now, and while continuing toproceed with transition to LED lighting andre p l a ce m e nt w it h e nvi ro n m e nt ally f rie n dly
vehicles, we will proceed with a shift to electricity
from renewable energy sources.
⃝We will push forward with examination of Scope
3 measurement techniques.

⃝Carbon-related exposure for Kiraboshi Bank is as described below.
⃝We will proceed with constructive dialogue (engagement) with business partners in the target sectors, andthereby make efforts such as identifying the amount of carbon emissions and conducting business restructure
to mitigate impacts of climate change.
Total for the carbonrelated sectors¥200 billion

10,985<Reference> A ctual figures for FY2021: 50.7%
reduction (compared to FY2013)
Actual figures for FY2022: 62.4%
reduction (compared to FY2013)

7,083

6,477

5,832

5,409

(Unit: t-CO₂)

4,130

0
FY2013FY
CO₂ emissions (t-CO₂)

2013[Reference year]

2019

FY2018FY20192020

FY2020

FY2021

FY20222021…

…

FY20302022

10,985

6,477

5,832

5,409

4,130

721

652

480

485

450

City gas used (1,000 m³)

183

152

75

77

73

Gasoline used (kℓ)

135

135

135

135

124

10,263

5,824

5,351

4,924

3,680

18,627

12,902

12,772

12,07911,345－(41.04)%(46.91)%(50.76)%(62.40)%

Scope 1 (t-CO₂)

Scope 2
Electricity used
(1,000 kWh)
CO₂ emissions reduction ratecompared with FY2013* 1: For the amounts of gasoline used, actual figures in FY2021 are used in or before FY2020.
* 2: The figures for FY2013 represent a combined total of the former Tokyo Tomin Bank, Limited and the former Yachiyo Bank, Limited prior to the merger.

│Tokyo Kiraboshi Financial Group, Inc.│ 58

Management Base That Supports Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial GroupManagement Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Risk Management
Message from the Risk Management Officer

Supporting Giving our all, for TOKYO. through Risk Management

Main items considered

RORA

Optimization of risk and return, etc.

ROE

Capital efficiency, etc.

Capitaladequacy ratio

Risk management to underpin a comprehensive service business

Income bydepartment

Stress test of
medium to long-term simulation basedon the Medium-Term Business Plan(‶forward-looking")

Capital soundness, management ofrisk predictions, etc.
Optimal allocation ofmanagement resources, etc.

Stress test of risk capital allocation
management (‶backward-looking")■Verify allocation of management resources■Verify sustainability of the business model and monitor early warning risk signals

Basic approach

Leveraging the strengths of regional financial institutions

We believe the close relationships between Group companies, officers, and executive divisions enable us tocommunicate quickly on important matters, and that, we feel, is one of the Kiraboshi Group’s greatest
strengths. We intend to make sure that officers and employees work together to realize solid organizational
management and enable our three lines of defense to work closely together to strengthen internal control ina way that does not lead to siloed risk management.

Group Basic Policy for Risk Management
1. Considering the risk management as the
top priority issue in the management of
the Kiraboshi Group, the Group will
re cognize the imp o r tance of risk
management of the entire Group,
including management of risks specificto the group system such as outline of
the characteristics of various risks andthe spread of risks. The Kiraboshi Groupwill conduct suitable management by
establishing the management system foreach type of risk.
2. The Group will manage subsidiaries sothat the appropriate risk management isperformed by them from the viewpointof ensuring soundness.

Kiraboshi Bank, Ltd.
Audit & Supervisory Board Members
Audit & Supervisory Board

Board of Directors

Instructions/Management

UI Bank Co., Ltd.
Tokyo Kiraboshi Lease, Inc.
Kiraboshi System, Inc.

Management Meeting

Kiraboshi JCB Co., Ltd.
Risk Management Committee

Compliance Committee

Kiraboshi Consulting Co., Ltd.
Discussion/
Reporting

Risk Management Division

Kiraboshi Tech, Inc.
Kiraboshi Capital Co., Ltd.
Kiraboshi Life Design Securities Co., Ltd.

Credit risk Market risk

Liquidity
riskOperational
risk

Compliancerisk

Conductrisk

Kiraboshi business oﬃce service, Inc.
Be.Brave, Inc.

Establishment of Group risk management system
The Kiraboshi Group has strengthened its management
system to visualize Group company risks and establish
a Group-wide horizontal management system in
response to diversifying customer needs and expanding
Group operations. As of June 2023, the following risk
management methods have been introduced in aneffort to enhance the Group’s risk management system.

⃝Group Risk Assessment (annual)⃝KRI (Key Risk Indicator) planning and monitoring (quarterly)⃝Operational risk monitoring plan and monitoring (semi-annual)⃝Compliance program (annual)⃝RCSA (annual assessment based on own scenarios,
quarterly assessment based on other companies’ scenarios)
BK

Financialrisks

Credit risk
Market risk

Interest rate risks, price risks, foreign exchange risks

Monitoring plan
Operational risks
ProgramCompliance

Operational risk

Financialrisks

Administrative risks, system risks, cyber risks,
legal risks, human risks, tangible asset risks,
reputational risks, outsourcing risks, other risks

BK Compliance
Committee

Compliance with laws and regulations, conflicts of interest, customer
information, complaints, insider trading, money laundering

BK Compliance
Committee

Compliance risks
OthersFG (except BK)

BK Risk Management
Committee

Liquidity risk

Trial implementation of Risk Appetite Framework
B a se d o n R A F, th e Kira b oshi G ro u p co m pile dindicators for risk appetite for the purpose ofachieving sustainable growth with a good balance ofincome, risk, and capital. By monitoring the indicators
periodically, the Group verifies the optimization of risk
and return, a balance between capital efficiency andsoundness, risk prediction management, and an
appropriate allocation of management resources.

● Chart of risk management system
Subsidiaries, etc.

Director Senior Managing
Executive Officer
Group CRO, Group CIO
Tokyo Kiraboshi Financial
Group, Inc.
Director and Senior Executive
Officer
Kiraboshi Bank, Ltd.

The Kiraboshi Group considers the risk management as one of the top priority management issues and, in order toensure the sound and appropriate business operations of each Group company, endeavors to conduct suitable
management of various risks in accordance with the Group Basic Policy for Risk Management below underappropriate group business management (governance).

FG Risk Management
Committee
FG Compliance
Committee[held jointly]

KRI

Satoru Nobeta

We have established a system for quantitatively monitoring credit risk, interest rate risk, price fluctuation risk,
and other financial risks, and we strive to play an effective role in management by voicing opinions in atimely and appropriate manner. In order not only to avoid risk, but also to secure targeted profits throughappropriate risk-taking, we actively engage in discussion at the management level to keep total risk within acertain range based on the return on risk assets (RORA) ratio.
We manage operational risks, such as clerical risk, systems risk, and outsourcing risk, along with complianceand conduct risks in our overall operations. We have established an integrated system across the Group
that enables management to quickly grasp any clerical errors, accidents, complaints, or other apparent risks,and encourage remedial action. As the Group CRO and CIO, I am working to strengthen the Group’s overall
ability to address any risk events that are likely to have a significant impact on our business, such as cyberrisk, information management, and anti-money laundering and countering financing of terrorism (AML/CFT).
The launches of all new businesses and products are controlled as a groupwide operation. We haveestablished a system that relies on self-evaluations from each of the Group’s business lines. The departments
responsible for different types of risk identify and evaluate those risks across the Group. The Management
Meeting makes Group decisions following active discussion in the committee.

59 │Tokyo Kiraboshi Financial Group, Inc.│

Risk appetite policyGroup risk management system

Visualizing risk

The Risk Appetite Framework (RAF) is a framework
for clarifying the risk appetite for the sake of achieving
business strategies and financial plan, thereby
conducting business management and risk
management. Introduction of R AF improves thetransparency of the management plans, enables acompany to seek more profit opportunities andconduct business management while controlling risks.

● Construction of overall RAF

FG Group Risk Assessment

The Tokyo market is moving quickly forward now that it has emerged fromthe shadow of COVID-19. The Kiraboshi Group is building a more diverse
range of services as an urban-type regional financial group in order to meetthe various needs of SMEs and individual customers. Those services include
financing that focuses primarily on lending and investment as well as M&A,
business matching, and other consulting services, welfare benefits andpayroll calculations to support general affairs and human resources
departments, and asset management to support asset formation. We havealso established a second bank within the Group that serves as a digitalbank because we want to expand our business operations to thoroughly
satisfy customer needs. We need to strengthen the roles of our risk
management division as our business develops.
We work to enhance our risk management system while developing
business by ensuring a full grasp of all relevant laws and regulations,establishing a mechanism to facilitate in-depth conversations with frontline
staff in order to identify risks, and actively discussing risk and asset control at
the management level in the Company’s specialist committees and theManagement Meeting. As the Kiraboshi Group continues to diversify, we will
support the Giving our all, for TOKYO. project by conducting risk
management according to the Group’s risk management system, which
promotes the integral management of affiliated companies.

Key indicators related
to risk appetite

RCSA (Risk Control Self Assessment)│Tokyo Kiraboshi Financial Group, Inc.│ 60

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Risk Management

Integrated risk management
Integrated risk management within the Kiraboshi
Group means to manage the risk in the Group as awhole, by integrating the management of various
risks held by the Group companies, comprehensively
identifying risks specific to the group system that
individual Group companies alone cannot deal with,such as the spread of risk within the Group, andcomparing the risk with the financial capability (netassets) of the entire Group.
The Kirab oshi G roup estimates the ma ximum
potential loss involving credit risk, market risk, andoperational risk based on the measured amount of
risk. Then, in order to use limited capital effectively,
the Group allocates risk capital by using core capitalas allocation source and compares the capital withthe actual amount of risk to confirm that the Group
has not taken excessive risks in comparison with its
financial capabilities, thereby maintaining andensuring the soundness of management.

Credit risk management

Credit risk means the risk of incurring losses due tod e c re a s e d o r l o s t a s s e t v a l u e c a u s e d b y adeterioration in the financial condition of the parties towhich the credit has been granted.
The Kiraboshi Group strives to maintain the soundnessof its credit portfolio by avoiding concentration risk
through such measure as keeping the percentage ofcredit in the total amount of credit below a certain
level for large concentration risk that an excessive
amount of credit is made available to a specific partyor for industry concentration risk that credit isconcentrated to a specific industry.

Market risk management

Market risk means the risk of incurring losses due tofluctuations in the value of assets and liabilities andin the amount of generated revenue as a result offluctuations in various market risk factors such as
interest rates, stock prices, and exchange rates. It isro u g h ly d i v i d e d i n to i n te re s t ra te ris k , p ri cefluctuation risk, and exchange rate risk.
The Kiraboshi Group controls the amount of market

Compliance risk
risk to avoid becoming excessive through suchmeasures as setting limits for holdings and losses,monitoring the status of compliance, measuring theamount of risk such as VaR, and comparing it withthe allocated risk capital.
In addition, the Kiraboshi Group evaluates market
risk comprehensively using the stress scenarios thatreflect events that could have a significant impact on
the Group or other means.

Liquidity risk management

Liquidity risk is the risk of incurring losses caused bydifficulty in securing the necessary funds or being
forced to raise funds at a significantly higher interest
rate t ha n usu al d u e to a m ism atch b et we e n
investment and funding periods or an unexpected
outflow of funds (cash flow risk), and the risk of
incurring losses caused by inability to trade in themarket or being forced to trade at a significantly
unfavorable price than usual due to market turmoil
or other factor (market liquidity risk).
The Kiraboshi Group takes every possible measure
to manage liquidity risk through such measures asa p p ro p r i a t e l y m a n a g i n g t h e s t a t u s o f f u n dinvestment and procurement, maintaining stable
funding, and holding above a certain amount ofassets that can be liquidated in a short period oftime as current assets.

Operational risk management

Operational risk is a wide range of risks pertaining tobusiness operations in general, including the risk of
incurring losses caused by business processes,
improper activities by officers and employees or
improper systems, or external events.
The Kiraboshi Group categorizes the operational risk
according to its characteristics into administrativerisk, system risk, legal risk, or other risk. The Grouphas designated a division with overall responsibility
for risk management and divisions responsible foreach risk, and puts in place a risk management
system that covers business operations in general.

Risk governance system

61 │Tokyo Kiraboshi Financial Group, Inc.│

Board of Directors

Report(1) Establishment, revision and abolition of risk management
regulations and development of management system(2) Veriﬁcation of the eﬀectiveness of policy formulation
processes and revision of such processes in a timely
manner(1) Establishment, revision and abolition of risk
management rules, etc.
(2) Veriﬁcation of the eﬀectiveness of processes forestablishing regulations and systems, and revision ofsuch processes

ReportRisk Management Committee(1) Analysis and evaluation of the status of risk management(2) Veriﬁcation of analysis and evaluation processes andrevision of such processes in a timely manner(3) Formulation and consideration of policies for developing
and establishing the risk management system

ReportInternal audit
departments(Internal Audit Division)

Audit

ReportManagement Meeting

Participate as an observer

T he Risk M ana gem ent D ivisio n d evelo ps an destablishes the risk management system andformulates policies in accordance with the Group Basic
Policy for Risk Management, and supervises risk
management of the Kiraboshi Group.
In addition, the Division identifies and manages various
risks faced by the Kiraboshi Group in accordance withvarious regulations (Integrated Risk Management
Re gu l ati o ns , Cre d it R isk M a na ge m e nt Po l i c y,Operational Risk Management Regulations, etc.)(1)	Building, maintaining, and reviewing the integrated
risk management system(2)	Verif ying and reviewing the ef fectiveness of
methods and management systems related to risk
management(3)	M onitoring various risks (credit risk, market risk,
liquidity risk and operational risk)(4)	Reporting the status of risk management (the status
of use of allocated capital, the status of compliancewith various management standards, etc.) to the
Risk Management Committee, the Management
Meeting and the Board of Directors

Risk Management Division(1) Drafting of risk management regulations,etc.
(2) Establishment and review ofmanagement regulations, etc. and thereporting and approval structure(3) Monitoring, etc. of various risks(4) Reporting of monitoring items, etc. toeach meeting body(5) Design, veriﬁcation and monitoring ofoperation of the internal rating system

Compliance risk is the risk of incurring severe
damage such as the loss of Kiraboshi Group’s social
confidence due to failure to comply with laws andre g u l a t i o n s o r “ c o d e s ” s u c h a s t h e G ro u p’s
management philosophy and policy, and regulations.
The Kiraboshi Group has established a complianceprogram, and the management team takes the leadin an effort to prevent the occurrence and recurrenceof actual risks and potential risks by taking steps
such as disseminating and providing education on
co mpliance mat ters re quire d fo r ap p ro p riate
business operation, and monitoring and controllingthe status of establishment and implementation.

Conduct risk
Conduct risk is a risk where an officer or employee
acts contrary to social norms, acts in violation of
trade practices or market practices, or acts in a waythat is detrimental from the perspective of users,and customers are inconvenienced, fairness of themarket is harmed, or the reputation of the financial
institution itself is harmed as a result.
The Kiraboshi Group acts in compliance with not
only laws, regulations and internal rules, etc., butalso in compliance with the Kiraboshi Group’s
philosophy and action guidelines.

Cyber risks
Risks of information system outages, malfunctions,and external leaks, etc. are increasing due tocyberat tacks which have become increasingly
advanced and sophisticated over the years.
T h e K i ra b o s h i G ro u p a i m s to p rov i d e h i g h ly
convenient and secure services to customers byworking on cyber security measures to ensure
system safety and promoting financial services
utilizing digital technology.
The Kiraboshi Group considers cyber risk as one of
the top priority issue in management, and has
appointed a Group CIO (Group Chief Information
O f fice r) a n d ha s a ssi gn e d p e rs o ns in cha rge
cybersecurity to the Risk Management Department,in order to strengthen cyber security measuresagainst cyberattacks.
To prepare for cyberattacks, we are working tocontinuously strengthen the Group managements t ru c t u re t h ro u g h e f fo r t s su ch a s s h a ri n g o f
information with external bodies, collection of
information related to trends in cyberat tacks,
vulnerabilities etc., dissemination of information toGroup companies, and conducting training and drills
related to cyberattacks.
We are also pushing forward with the establishmentof the cyber risk management structure by making
reports to the management team on a periodic
basis , assessing system risks and formul ating
contingency plans, and conducting diagnosis on
vulnerabilities of websites, etc. and taking measures
to deal with issues identified in them.
In addition, as par t of our ef for t s to improveinformation literacy of officers and employees, we

make at tention-seeking announcements about
increasingly sophisticated business e-mail frauds,
virus-infected e-mails, etc. on a periodic basis, andconduct e-mail training assuming targeted attacks,etc., as well as tests to confirm basic knowledge
related to cybersecurity. Through these and otherw ay s , w e a re s t ri v i n g to ra is e aw a re n e s s o fcybersecurity within the Group.
Furthermore, Kiraboshi Bank has introduced aphishing website detection service as acountermeasure against phishing frauds which are
rapidly increasing in recent years. When a phishingwebsite is detected, we provide attention-seeking
i n f o r m a t i o n to c u s to m e r s . We a l s o p ro v i d ecusto m e rs w it h a s e cu rit y s of t wa re p ro gra m(software equipped with measures against illegal
remittance and phishing frauds) so that they can use
our Internet banking service safely.
Risk event

Cyberattack

Risk scenario

Major risk control

Loss of social trust ⃝ Vulnerability diagnosisd u e to lea ka ge o f
on websites, etc. andcustomer information,
taking measures to deal
confidential information,with their issues
etc. attributable to ⃝ Conducting drills, training
service suspension
and education forcaused by a cyberattack
employees⃝ Formulation of contingency
plans, etc.
⃝ Formulation of measures
to prevent recurrence
after the occurrence ofa failure, etc.

Crisis management
The Kirab oshi G roup has establishe d a crisis
management system for business continuity, such asproviding safe and secure financial functions tocustomers and employees in the event of theo ccu r re n ce o f a n a t u ra l d is a s te r su ch a s a nearthquake or the spread of infectious disease. The
Group has formulated contingency plans for theoccurrence of disasters and has introduced a systemfor verifying the safety of employees, and has alsoestablished systems such as implementing periodic
disaster drills. In addition, we are maintaining thefunctions of buildings and facilities, etc. to be able touse facilities and systems, etc. in a continuous andstable manner while also implementing measures
su ch as assessing facilit y aging, carr ying out
appropriate maintenance management to preparefor various t ypes of disasters, accident s, andinfectious diseases, etc.
│Tokyo Kiraboshi Financial Group, Inc.│ 62

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Compliance
Basic approach

Initiatives for AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism)

The Kiraboshi Group regards compliance as one of
the top priorit y management issues, strives toestablish corporate ethics based on its social
mission as a regional financial group, and has
established its basic policy to foster the corporatec u l t u re t h a t e m p h a s i z e s c o m p l i a n c e a n d i s
a c c re d i t e d b y s h a re h o l d e r s a n d t r u s t e d b ycustomers and society. All officers and employees
are making united efforts to enhance and strengthen
the compliance system.

Status of putting in place the compliance system
The Kiraboshi Group establishes a complianceprogram for each fiscal year, and the management
team takes the lead in an effort to prevent theoccurrence and recurrence of not only actual risks
but also potential risks by taking steps such as
d is s e m i n ati n g a n d p rov i d i n g e d u c ati o n o ncompliance matters including conduct risk required
for appropriate business operation and improvementof qualit y of o p eratio ns , and mo nito ring andco n t ro l l i n g t h e s t a t u s o f e s t a b l i s h m e n t a n d
implementation.
The Kiraboshi Group al so has established theCompliance Committee to propose measures, etc.
for the compliance-related matters of the Group andto strengthen and improve compliance functions. In
addition, the Group has assigned the officer incharge of the Risk Management Division as the chiefco m p lia n ce of fice r, a n d esta b lish e d t h e R isk
Management Division as the division supervisingcompliance related mat ters, thereby put ting asystem in place.
We created the “Headquarters Compliance Officer(Headquarters CO)” role in December 2020 toe n h a n c e t h e G ro u p’s a b i l i t y t o re s p o n d t ocompliance risk, and the “Sales Office Compliance
Officer (Sales Office CO)” role who stands in between
the first and second lines of defense in April 2021 tostrengthen collaboration between sales offices andthe headquarters. In these ways, we are striving tofurther develop and strengthen the system related
to compliance.

Chart of compliance system
Kiraboshi Bank, Ltd.

Board of Directors

Audit & Supervisory
Board Members
Audit & Supervisory Board

Headquarters
CO
Instructions/Management

Sales oﬃces and headquarters divisions
Compliance oﬃcer
Compliance administrator

UI Bank Co., Ltd.
Tokyo Kiraboshi Lease, Inc.
Kiraboshi System, Inc.

Management Meeting
Discussion/
ReportingCompliance Committee

Kiraboshi JCB Co., Ltd.
Kiraboshi Consulting Co., Ltd.

Subsidiaries, etc.

Sales Oﬃce
CO

Kiraboshi Tech, Inc.
Kiraboshi Capital Co., Ltd.
Kiraboshi Life Design Securities Co., Ltd.

Risk Management Division (Headquarters CO)

Kiraboshi business oﬃce service, Inc.
Be.Brave, Inc.

63 │Tokyo Kiraboshi Financial Group, Inc.│

More specifically, we designate documents created by
specified business operators under the “Act on
Prevention of Transfer of Criminal Proceeds” as a formof “risk assessm ent rep o r t ” by w hich wecomprehensively and specifically identify and assess
risks. In addition, we continuously take measures tomitigate AML/CFT risks by introducing and operating acustomer rating system. From the viewpoint ofcontinuous customer management, we continuously
strive to further mitigate risks, such as by conducting
questionnaires to customers whom we have assigned
customer ratings, with the exception of Simplified Due
Diligence (SDD) customers.
In addition, the Kiraboshi Bank continuously works toenable employees to acquire and improve knowledge
by implementing internal AML/CFT training andsupporting them in taking and passing external
examinations.

Establishment of system to exclude antisocial forces
While always being aware of our gravity of public
mission and social responsibility, the Kiraboshi
Group takes group-wide initiatives to break any andall relationships with antisocial forces, etc. includingtransactions with them. Such initiatives include
decisive refusal to provide funds to antisocial forcesthat threaten order and safety of civil society andresolutely excluding undue demand and intervention
by antisocial forces.
More specifically, we have established the “Basic
Policy on Dealing with Antisocial Forces” and the“Basic Rules on Dealing with Antisocial Forces,” andare working to conduct training and education forof ficers, employees, etc. In addition, the Risk
Management Division centrally manages information
related to antisocial forces, while the Company andG roup co mpanies strive to colle c t an d share
information. In addition, in response to requests
from police authorities, we are also working to assist
former crime group members open bank accounts.

Establishment of systems to protect customers and manage customer information
Based on the recognition that it is the Kiraboshi
Group’s social responsibility to handle personal
information of customers in a proper and strict
manner, we strictly comply with laws, regulations,and rules and undertake corporate activities in afaithful and fair manner.
We provide officers and employees with level-specificgroup training, etc. with themes such as fiduciary
duty, management of customer information, andmanagement of conflict of interest. Through such
efforts, we strive to ensure customer protection andcompliance.
The Kiraboshi Group has established the “Customer
Relations Center” as a specialized department toreceive compl aint s , etc . from customers , andcontracted with the “Japanese Bankers Association

Consultation Office,” a designated dispute resolution
body, to of fer a “ financial ADR system” whichfacilitates the resolution of conflict with customers
through the involvement of a third party.
In addition, the Kiraboshi Group collects andmanages “customer feedback” provided through its
website and via mail, and works to improve various
operations and quality. “Customer feedback” iscentrally managed at the Customer Relations Center,and the information is shared with officers and others
including related divisions at the headquarters.
With regard to complaints arising from “customer
service,” the HM Office, which was newly establishedin May 2023, is working to improve business quality
by analyzing their true causes, providing guidance tosales branches, and providing training.

Initiatives to make use of customer feedback (Kiraboshi Group)

Whistleblowing (hotline) system
The Kiraboshi Group has established the “Hotline
System” as a mechanism for responding properly toan officer, employee, dispatched worker, part-timeworker, or other staff who initiates whistleblowing or
wishes to have a consultation about violation oflaws and regulations and other improper complianceissues (including harassment).
Kiraboshi Bank, Ltd. has established a contact point
for whistleblowing internally in the Compliance
Section of Risk Management Depar tment andAs crime groups transfer funds across a broader rangeof regions and threats of international terrorism areincreasing, there has been a growing risk that financial
institutions can get involved in money laundering andterrorism financing.
The Kiraboshi Group considers the prevention ofmoney laundering, etc. as one of the most importantmanagement issues, and its basic policy is to establish
an effective management system to maintain the
public trust, while making efforts to constantly verify
and sophisticate the system.
The Kiraboshi Group not only adheres to basic matters
including confirmation at the time of transactions as
stipulated in relevant laws and regulations including
the “Act on Prevention of Transfer of Criminal Proceeds”
and the “Foreign Exchange and Foreign Trade Act,” butalso works on a continuous basis to establish a system
to ensure the effective functioning and appropriatenessof the anti-money laundering system.

externally in the law firm which its legal counsel
works for.
Through the whistleblowing system, we strive torealize early detection, prevention and correction ofcompliance incidents while ensuring theconfidentiality of whistleblowers in accordance with
the Whistleblower Protection Act. The Group’s
internal regulations stipulate strict policies including
p ro hib iti o n of d is a d va nt a ge o us t reat m e nt ofwhistleblowers.

OﬃcersKiraboshi Group

Customers

Collecting
andmanaging

Improvements Analyzing│Tokyo Kiraboshi Financial Group, Inc.│ 64

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Corporate GovernanceDirectors of Tokyo Kiraboshi Financial Group

Outline of corporate governance system
The Company is a company with Audit & Supervisory
Board. The Board of Direc tors super vises theexecution of duties by Directors, and Audit &Sup er viso r y B oard M emb ers and the Au dit &Supervisory Board audit the execution of duties by
D i re c to rs . T h e Co m p a ny b el i eves t hat t h eappropriateness of management supervision andaudit functions as well as a system for efficientbusiness execution are ensured by effectively utilizing
the management supervisory function realized by
the appointment of highly independent Outside
Directors and Outside Audit & Supervisory Board
Members and the audit function performed by Audit& Supervisory Board Members and the Audit &Su p er viso r y B o a rd , an d by en han cing th eeffectiveness of corporate governance.

Chart of corporate governance system(as of July 1, 2023)

General Shareholders Meeting
Audit & Supervisory Board andAudit & Supervisory Board Members

Inside Directors and Audit & Supervisory Board Members
Outside Directors and Audit & Supervisory Board Members

Audit & Supervisory
Board Oﬃce

Board of Directors

Internal Audit Division

Management Meeting

Nomination/
Remuneration Committee

Compliance Committee
Risk Management Committee
ALM Committee
Capital Policy Committee
HM Committee
Group Sales Strategy Meeting(Back row from left)

Hideki Uchida

Audit & Supervisory
Board Member

Katsuya Tsuboi

Full-time Audit &Supervisory Board Member

Takeshi Miura

Director Managing
Executive Officer

Shuya Nomura
Outside Director

Hidenori Tsunehisa
Deputy President

Satoru Nobeta

Director Senior Managing
Executive Officer

Takeshi Yoshino

Director Executive Officer

Corporate Planning Personnel Aﬀairs
Division
Division

HM Oﬃce

Risk Management Business Strategy
Division
Division

Digital Strategy
Division

Partnership Promotion Corporate Communication
Division
Division

Secretariat Oﬃce

(Front row from left)

Kayo Todo

Outside Audit &Supervisory Board Member

Shoji Nishio

Outside Director

Hisanobu Watanabe
President

Yuki Takahashi
Outside Director

Nobuko Inaba

Outside Audit &Supervisory Board Member

Outline of corporate governance system
Organization form

Basic approaches to corporate governance
The Company considers corporate governance to be
one of the most important management issues, andutilizes the knowledge of outside oﬃcers and external
ex p e r t s to s t re n g t h e n t h e G ro u p b u si n es s
management system and supervisory functions while
enhancing corporate governance functions to maketransparent, fair, prompt, and decisive decisions as it
conducts business and strives to sustainably increase
corporate value. Furthermore, intending to embody
our management philosophy and the Groupʼs vision,

we established the Basic Policy on Corporate
Governance.
In order to put in place the “system that ensuresproperness of business operations” of the Company
and Group companies pursuant to the Companies Act
and the Ordinance for Enforcement of the Companies
Act, the Board of Directors of the Company has
resolved the “Basic Internal Control Policy” andendeavors to improve its effectiveness.

Status of establishment of basic policy and internal control system related to corporate governance:

https://www.tokyo-kiraboshifg.co.jp/about/governance.html

65 │Tokyo Kiraboshi Financial Group, Inc.│

Executive remuneration structure

Company with Audit & Supervisory Board

Fixed remuneration
Performance-linked remuneration (short-term performance)
Performance-linked remuneration (medium- to long-term performance)

Directors and Board of Directors

Audit & Supervisory Board Members
and Audit & Supervisory Board

Nomination/Remuneration Committee

3 outside
members
Of which,
1 femalemember2 outside
members
Of which,
2 femalemembers

2 outside
members
Of which,
1 femalemember（）（

8
Directors）

5 inside
members（

4
Audit &
Supervisory Board
Members
2 inside
members）3
Directors

1 inside
memberChairperson……… Appointed from among Outside Directors

Ensuring independence and diversity
Ratio of outside oﬃcers

Ratio of female oﬃcers

5/12 ─ 41.6％

3/12 ─ 25.0％│Tokyo Kiraboshi Financial Group, Inc.│ 66

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Corporate GovernanceBusiness execution and supervisory function
Directors and Board of Directors

The Board of Directors consists of eight Directors(including three independent Outside Directors(including one female member)). The Board of
Directors has a system in place that enables theholding of one meeting in principle each month andother extraordinary meetings whenever the needarises in order to decide important matters such as
management policies and strategies and to supervise
the execution of duties by Directors through suchmeasures as receiving reports on the status ofbusiness execution and other important matters.

Nomination/Remuneration Committee

Support for Outside Directors(Outside Audit & Supervisory Board Members)

A support system has been established for Outside
Directors by providing advance explanations andsupplementary materials on important proposals for
the Board of Direc tors . Fur thermore, Audit &Supervisory Board Member assistants are assigned
to assist the duties of Audit & Supervisory Board
Members as support for Outside Audit & Supervisory
Board Members, and a support system has been
established by providing advance explanations andsu p p l e m e n t a r y m a te ria l s , e tc . fo r i m p o r t a n t
proposals for the Board of Directors as with thecase of Outside Directors.

Main agendas discussed at the Board of Directors (FY2022)⃝Tokyo Kiraboshi Financial Group’s consolidated
profits plan
⃝Examination of profits plan for FY2022 andreport on medium- to long-term simulation⃝Progress of KGIs and KPIs under the MediumTerm Business Plan
⃝Introduction of CRM system⃝Results of examination of economic rationality
and necessity of cross-shareholdings and statusof exercise of voting rights⃝Evaluation of the effectiveness of the Board of
Directors⃝Development of a brand strategy⃝Status of compliance with items requiring
disclosure under TCFD
⃝Sustainability initiatives⃝Group risk management plan
⃝Results of external evaluation of the effectivenessof the internal audit system⃝Approval of the internal audit plan

Evaluation of the effectiveness of the Board of Directors

improvements at the Board of Directors such as“narrowing down of agenda items” and “reduction oftime re quire d fo r expl anatio ns thank s to theenhancement of advance explanations.” We willcontinue to “further reduce the number of agenda
items” and “ensure sufficient time to deliberate
important agenda items (group strategy, DX strategy,
sustainability initiatives, etc.)” so that the Board of
Directors can have more essential discussions than
before. As such, we will clarify management issues andinvigorate discussions to resolve such issues, andthereby work to further improve effectiveness andstrengthen governance.

The Company conducts self- evaluation on theeffectiveness of the Board of Directors as well as
evaluation which involves third party organizations,with the aim of improving functions of the Board of
Directors and increasing corporate value. We conduct
questionnaire surveys of all Directors and Audit &Supervisory Board Members who are members of theBoard of Directors (some officers are also interviewed
individually by third-party organizations) in regard to
the composition, operation, discussion, monitoring
functions, etc. of the Board of Directors, and the Boardof Directors holds discussions and conducts evaluation
based on the results of analysis by third party
organizations. In addition, officers submit theirq u e s t i o n n a i re re s u l t s d i re c t l y to t h i rd - p a r t yorganizations in order to ensure anonymity.
In FY2022, the Board of Directors was evaluated as
being able to secure its effectiveness as a result of nsure sufficient time to deliberate important agenda
E
items (group strategy, DX strategy, etc.)

AN

Operation of the Board of Directors

C

K

T

67 │Tokyo Kiraboshi Financial Group, Inc.│AC

Recognition of issues(deliberated by the Board of Directors)

L

Further reduce the number of agenda items

DO

P

Action policy

FY2023 action policy to promote essential discussions

CHE

Evaluation of eﬀectiveness

The Company has voluntarily established theNomination/Remuneration Committee as an advisory
body with the intent of securing objectivity andtransparency regarding personnel mat ters andre m u n e rati o n o f D i re c to rs . T h e N o m i nati o n /Remuneration Committee consists of four Directors
or less (including at least two Outside Directors)
a p p ointe d by t h e res olu tio n of t h e B o a rd of
D i re c to rs , a n d e x a m i n e s p e rs o n n e l m a t te rs ,appointment and dismissal of directors of theCompany and its Group companies, as well as theamount of remuneration for directors, and reports
the results to each company’s Board of Directors.

Management Meeting

Under the Board of Directors, the Company has
established the Management Meeting that consists of
Directors, and holds one meeting in principle eachweek and other extraordinary meetings whenever
the need arises. The Management Meeting decides
important matters other than those to be resolved by
the Board of Directors and matters delegated by the
Board of Directors, and receives reports on the statusof business execution and other important matters.

Committees

The Company has set up the “Compliance Committee,”the “ Risk M anagement Commit tee,” the “AL M
Committee”, the “Capital Policy Committee,” and the“HM Committee” as the subordinate organizations to
the Management Meeting for each area of importantmanagement issues, and has established a system that
increases expertise and agility. Each Committee meetsregularly and at any time whenever the need arises inaccordance with their respective rules.

Group Sales Strategy Meeting

The Group Sales Strategy Meeting is establishedunder the Management Meeting to ascertain the
progress status of proﬁt plans of the Groupʼs sales
departments, as well as to discuss various measuresand actions related to important sales strategies
that contribute to profitability improvement and tostrengthen sales capabilities to improve businessperformance. The Meeting is held regularly and at
any time whenever the need arises in accordancewith its rules.

Group Management System

The Company has introduced a “Group Chief Officer(CxO) system.” Under the overall supervision byGroup CEO, Group Chief Officers are appointed as
officers responsible for areas under their control,t h e re by e s t a b l is h i n g a G ro u p - w i d e b u si n e s smanagement system. In addition, the appropriatenessof Group management is ensured through theappointment of officers in charge of each Group
company and the internal audit of Group companies
conducted by the Company’s Internal Audit Division.

Audit and supervisory functions
Audit & Supervisory Board Members and Audit& Supervisory Board

The Audit & Supervisory Board strives to strengthen
the audit structure by ensuring effective monitoring
functions for Directorsʼ decision-making and businessexecution.
Each Audit & Supervisory Board Member conducts
audits on execution of duties by Directors, internal
control, and other related matters by engaging insuch activities as attending the Board of Directorsʼ
meetings and other important meetings, reviewing
important approval and other documents, andconducting audits of each division of the Company

and investigations on subsidiaries, in accordance withaudit policies and plans established by the Audit &S u p e r v i s o r y B o a rd . I n a d d i t i o n , a n “Au d i t &Supervisory Board Members” contact desk has been
established as a whistle-blowing contact point whichis independent of the management team.
Audit & Supervisory Board Members and the Audit &Supervisory Board are striving for effective audits bymaintaining close cooperation with the internal audit
departments and the Accounting Auditor andexchanging opinions on priority audit issues throughregular meetings with Representative Directors andother executives.

Approach to appointment of Directors and Audit & Supervisory Board Members
Directors

For candidates for Director, it is our basic policy toconsider a mix of human resources with diverse
expertise and backgrounds in order to make important
decisions on the medium- to long-term management
direction and business strategies and to conduct highly
effective supervision. Candidates for Director are
considered by the “ Nomination/Remuneration
Committee” and determined after being reviewed by
the Company’s Board of Directors based on the resultsof the consideration.

Audit & Supervisory Board Members

Candidates for Audit & Supervisory Board Members
are determined after deliberation by the Company’s
Board of Directors with the consent of the Company’s
Audit & Supervisory Board.
Furthermore, Audit & Supervisory Board Members
must have excellent personality, knowledge and ability,
extensive experience and high ethical standards, inaddition to the necessary ﬁnance, accounting and legal
knowledge.

│Tokyo Kiraboshi Financial Group, Inc.│ 68

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Corporate Governance

Officer remuneration structure

Reasons for appointment of outside officers
Name
Yuki Takahashi,
Outside Director

Shoji Nishio,
Outside Director

Shuya Nomura,Outside Director

Reasons for appointment
Ms. Yuki Takahashi serves as a corporate manager of a housekeeping services provider, and due to her
wealth of experience, including regarding the promotion of women’s participation and advancement in
the workplace, lifestyle reform and creation of new businesses, she also holds key positions at variousorganizations. The Group has concluded that her knowledge can be reflected to improve the Group’s
products and services, and therefore she has been appointed as Outside Director.
Mr. Shoji Nishio previously served as Managing Director, General Manager of SMEs Regeneration
Assistance Division and General Manager of SMEs Division at The Tokyo Chamber of Commerceand Industry. He has a wealth of experience in management consultation, regeneration assistance,business succession, etc. for small and medium enterprises. The Group has concluded that his
knowledge can be utilized in business management support to the Group’s transaction partners andfor measures to improve services, and therefore he has been appointed as Outside Director.
Mr. Shuya Nomura has specialized knowledge as a professor of a graduate school and also
engages in corporate legal affairs as an attorney. As he also held a number of various positions
in public service, and possesses extensive insight and abundant experience. The Group has
concluded that his knowledge can be utilized for the overall management of the Group, andtherefore he has been appointed as Outside Director.

Nobuko Inaba,
As the Group expects Ms. Nobuko Inaba to reflect her advanced expertise as a certified public
Outside Audit &accountant and a wealth of insight into management as a corporate manager in the auditing
Supervisory Board Member structure of the Group, she has been appointed as Outside Audit & Supervisory Board Member.
Kayo Todo,
Outside Audit &Supervisory Board Member

Ms. Kayo Todo has been performing her duties as a partner of a law office. As the Group
expects her to conduct objective and neutral audits on legality of management execution, etc.
from her professional perspective as an attorney-at-law, she has been appointed as Outside
Audit & Supervisory Board Member.

Skill matrix of Directors and Audit & Supervisory Board Members

officers, respectively. When appointing Directors, theGroup bases its considerations on ensuring a
combination of human resources with diverse
knowledge and backgrounds, in order to makeimportant decisions concerning the Group’s mid- tolong-term management direction and businessstrategies, and to ensure a highly effective supervision.

The Group believes that the knowledge, experience,
and abilities that the Board of Directors should have inorder to achieve the Group’s Medium-Term Business
Plan differ regarding some of the skills required ofinternal and outside officers, and has established thefollowing eight skill items for internal and outside⃝ Internal Officers
Name
Hisanobu
Watanabe
Hidenori
Tsunehisa
SatoruNobetaTakeshi
Miura
Takeshi
YoshinoKatsuya
Tsuboi
Hideki
UchidaPosition at
the Company

Skill category
Corporate
Sales/
Risk management/ Finance/ IT/Systems/
Human resource
Sustainability
management Marketing
Compliance AccountingDX
strategy

President●●

Deputy President●●

Director Senior Managing
Executive Officer●

Director Managing
Executive Officer●

Director Executive
Officer●Full-time Audit &Supervisory Board Member●

Audit & Supervisory
Board Member

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Markets

●
●

●

●

●
●

●

●
●

Position at theCompany

Yuki
Outside Director
Takahashi
Shoji
Outside Director
NishioShuya
Outside Director
NomuraOutside Audit & Supervisory
NobukoBoard Member
Inaba
Outside Audit & Supervisory
Kayo
Board Member
Todo

Skill category
Corporate Local economy/
Finance/ IT/Systems/
Human resource
Legal affairs
Sustainability
management Government
AccountingDX
strategy
●
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Markets

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●

●

The Co mpany’s B oard of Direc to rs views theestablishment of an environment supporting soundmanagement and appropriate risk taking to be one ofits main roles and responsibilities, and endeavors tomake swift and bold decisions based on the approachof creating a new type of urban regional bank.
Based on this approach, the remuneration of theGroup’s Directors (excluding Outside Directors) is●

structured to be made up as follows with fixed
remuneration (monthly remuneration) as baseremuneration, in addition to a combination of cash
remuneration which is linked with shor t-termb usi n ess p e r fo rma n ce, etc . a n d sha re - b a s e dremuneration using a board benefit trust linked withmedium- to long-term business performance, etc. tofunction as a healthy incentive aimed at sustainablegrowth of the Group.

Types of remuneration
Fixed remunerationBase(monthly
remuneration
remuneration)
Cashremuneration
Performance-linked
remuneration
Share-based
remuneration

Rough percentages of remuneration
Provided according to job rank, etc.
Linked to short-term numerical targets
in the Medium-Term Business Plan
Linked to medium to long-term numericaltargets in the Medium- Term Business
Plan*Outside Directors only receive monthly remuneration.

Details of remuneration⃝ Performance-linked remuneration (cash remuneration)

We calculate the amount of performance-linked
remuneration (cash remuneration) to be paid bymultiplying the amount predetermined for each job
rank by the multiplying factor determined based on
the indices linked with business performance andperformance evaluation of a department for which therelevant individual is responsible. The calculation
results are reviewed by the Nomination/Remuneration
Committee, and based on the results of the review,
the amount to be paid is determined after deliberationby the Board of Directors. It is our policy to makepayments at a fixed point in time each year.
The indices linked with business performance havebeen set as (i) Kiraboshi Bank’s net core businessincome and (ii) the Company’s net income for the
relevant period subject to evaluation.

⃝ Performance-linked remuneration (share-based
remuneration)⃝ Outside Officers
Name

Basic approach

We have introduced a share-based remuneration
system utilizing board benefit trust as non-monetary
remuneration. We calculate the number of points tobe granted by using the multiplying factor determineda c c o rd i n g to t h e d e g re e o f a c h i e v e m e n t o f
performance targets, based on the base amount
predetermined for each job rank and closing price of
the Company’s shares on March 31, 2021. Then the
Nomination/Remuneration Committee discusses thecalculation result. The Board of Directors decides thenumber of points to be granted upon deliberation
based on the result of the discussion, and then a

Performance-linked
remuneration(share-based
remuneration)

15～20%

Performance-linked
remuneration(cash remuneration)

15%

Fixed remuneration(monthly remuneration)

65～70%

certain number of shares of the Company’s stock
equivalent to the number of such points will bedelivered.
The indices linked with business performance havebeen set as (i) Kiraboshi Bank’s overhead ratio (OHR)
and (ii) the Company’s return on equity (ROE) for the
relevant period subject to evaluation.

⃝Partial changes to the system for “performancelinked remuneration (share-based remuneration)”

The detail s of this system have been partiallychanged with the aim of strengthening the link
between share-based remuneration and shareholder
value even more and enhancing the effect of the
incentive even further. Previously, the timing forreceiving the delivery of shares of the Company’s
stock equivalent to the number of points granted
was at the time of retirement. However, starting frompoints granted in FY2023, we decided to deliver
shares on or after each date on which points are
granted (which, as a general rule, occurs every fiscal
year), within a certain period of time (as a generalrule, within the same fiscal year as the date on
which points are granted), and to impose transfer
restrictions on the shares until retirement.

Audit & Supervisory Board Members

Audit & Supervisory Board Members only receive
monthly remuneration, and are not subject to theperformance-linked remuneration system from theperspec tive of ensuring the neutralit y andi n d e p e n d e n ce o f Au d it & Su p e r v is o r y B o a rd
Members.

(Note) The above matrix does not represent all the knowledge and experience possessed by each individual.

69 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 70

Tokyo Kiraboshi
Financial Group

Financial Data and Corporate Data

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Tokyo Kiraboshi Financial Group, Inc.
Oﬃcers (As of July 1, 2023)

Hisanobu Watanabe,Group CEOPresident■ Career Summary
Apr. 1985 Joined the Tokyo Tomin Bank, Limited
Jun. 2014 Executive Officer and General Manager of Loan
Administration Division, the Tokyo Tomin Bank, Limited
Jun. 2015 Executive Officer and General Manager of Nihonbashi
Branch Office, the Tokyo Tomin Bank, Limited
Jun. 2017 Director and Managing Executive Officer, the Tokyo
Tomin Bank, Limited
Director, Tokyo TY Financial Group, Inc.
(currently Tokyo Kiraboshi Financial Group, Inc.)
May 2018 Deputy President, Tokyo Kiraboshi Financial Group, Inc.
President, Kiraboshi Bank, Ltd. current position
Jun. 2020 President, Tokyo Kiraboshi Financial Group, Inc.

Hidenori Tsunehisa,
Deputy PresidentGroup CFOGroup CSO

Group CSuO

■ Career Summary
Apr. 1987 Joined The Mitsubishi Bank, Ltd.
Feb. 2001 Manager, PricewaterhouseCoopers Consultants Co.,Ltd.
Apr. 2004 Joined the ShinGinko Tokyo, Limited
Jun. 2015 President and CEO, the ShinGinko Tokyo, Limited
Apr. 2016 Director, Tokyo TY Financial Group, Inc.
(currently Tokyo Kiraboshi Financial Group, Inc.)
May 2018 Senior Managing Director, Kiraboshi Bank, Ltd.
Jun. 2021 Deputy President, Tokyo Kiraboshi Financial Group,
Inc. current position
Apr. 2023 Deputy President, Kiraboshi Bank, Ltd. current position

current position

Satoru Nobeta,

Shoji Nishio,

Shuya Nomura,

Katsuya Tsuboi,■ Career Summary
Apr. 1984 Joined the Industrial Bank of Japan, Limited
Jun. 2014 Director and Executive Officer, the Tokyo Tomin Bank, Limited
Apr. 2016 Managing Director, the Tokyo Tomin Bank, Limited
Jun. 2016 Director, Tokyo TY Financial Group, Inc.
(currently Tokyo Kiraboshi Financial Group, Inc.)
Jun. 2017 Senior Managing Director, the Tokyo Tomin Bank, Limited
Jun. 2018 Full-time Audit & Supervisory Board Member, Tokyo
Kiraboshi Financial Group, Inc.
Jun. 2020 Senior Managing Director, Tokyo Kiraboshi Financial
Group, Inc.
Jun. 2021 Director and Senior Executive Officer, Kiraboshi Bank,
Ltd. current position
Jun. 2023 Director and Senior Managing Executive Officer, Tokyo
Kiraboshi Financial Group, Inc. current position■ Career Summary■ Career Summary■ Career Summary

Mar. 1978 Joined The Tokyo Chamber of Commerce and Industry
Jun. 2016 Managing Director, The Tokyo Chamber of Commerceand Industry
May 2019 Outside Audit & Supervisory Board Member, WORLDTRADE CENTER BUILDING, INC.
Jun. 2019 Outside Director, Tokyo Kiraboshi Financial Group, Inc.

Apr. 1998 Professor, Faculty of Law, Chuo University
Apr. 2004 Professor, Graduate School of Law, Chuo University

Apr. 2021 Associate Advisor, The Tokyo Chamber of Commerceand Industry

Attorney, Mori Hamada & Matsumoto current position
Jun. 2014 Outside Director, Mitsubishi UFJ Trust and Banking
Corporation
Jun. 2016 Outside Director, Audit and Supervisory Committee
Member, Mitsubishi UFJ Trust and Banking Corporation
Jun. 2021 Outside Director, Tokyo Kiraboshi Financial Group, Inc.

Apr. 1984 Joined The Sanwa Bank, Ltd.
Jun. 2012 Joined the ShinGinko Tokyo, Limited
May 2018 General Manager of Risk Management Division, Tokyo
Kiraboshi Financial Group, Inc.
Jun. 2020 Full-time Audit & Supervisory Board Member, Kiraboshi
Bank, Ltd.
Dec. 2021 Audit & Supervisory Board Member, Kiraboshi Bank,
Ltd.
Jun. 2022 Full-time Audit & Supervisory Board Member, Tokyo
Kiraboshi Financial Group, Inc. current position

Nobuko Inaba,Group CIO

Group CRO

Director and Senior Managing Executive Officer

Outside Director

Takeshi Yoshino,

Yuki Takahashi,

Hideki Uchida,■ Career Summary
Apr. 1985 Joined the Tokyo Tomin Bank, Limited
Oct. 2014 General Manager of Corporate Planning Division,
Tokyo TY Financial Group, Inc.
(currently Tokyo Kiraboshi Financial Group, Inc.)
Jun. 2017 Director and Managing Executive Officer, the Tokyo
Tomin Bank, Limited
May 2018 Managing Director, Kiraboshi Bank, Ltd.
Jun. 2021 Director and Senior Executive Officer, Kiraboshi Bank,
Ltd. current position
Jun. 2022 Director, Tokyo Kiraboshi Financial Group, Inc.
Jun. 2023 Director and Managing Executive Officer, Tokyo
Kiraboshi Financial Group, Inc. current position■ Career Summary
Apr. 1992 Joined the Tokyo Tomin Bank, Limited
Apr. 2021 Executive Officer, General Manager of Kanda Chuo
Branch, Kiraboshi Bank, Ltd.
Oct. 2022 General Manager of Internal Audit Division, Tokyo
Kiraboshi Financial Group, Inc
Apr. 2023 General Manager of Corporate Planning Division,
Tokyo Kiraboshi Financial Group, Inc.
Director and Executive Officer, Kiraboshi Bank, Ltd.

■ Career Summary
Dec. 2003 Joined Bears Co., Ltd. Senior Managing Director
Oct. 2016 Vice President and Director, Bears Co., Ltd.

Jun. 2023 Director and Executive Officer, General Manager ofCorporate Planning Division, Tokyo Kiraboshi Financial
Group, Inc. current position

Aug. 2022 Director, YEEY Inc. current position

Outside Director

Director and Executive Officer

current position

current position

Jun. 2017 Outside Director, Tokyo TY Financial Group, Inc. (currently
Tokyo Kiraboshi Financial Group, Inc.) current position
Apr. 2018 Vice Chairman, The Tokyo New Business Conference
current position

Apr. 2019 Chairman, National Housekeeping Service Association

Group CEO

Chief Executive Officer

Group CFO

Chief Financial Officer

Group CSO

Chief Strategy Officer

Group CIO

Chief Information Officer

Group CRO

Chief Risk Officer

Group CSuO

Chief Sustainability Officer

current position

Business nameTokyo Kiraboshi Financial Group, Inc.

Business details

1. Corporate management of a bank and companies that can be made subsidiaries
pursuant to the Banking Act.
2. All other operations incidental and related to the operations in the preceding item.

Head office

3-10-43 Minami Aoyama, Minato-ku, Tokyo

Established

October 1, 2014

Capital
Exchange listing

71 │Tokyo Kiraboshi Financial Group, Inc.│¥27.5 billion
Tokyo Stock Exchange, Prime Market (Securities Code: 7173)

current position

Audit & Supervisory Board Member

Kayo Todo,

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member■ Career Summary■ Career Summary■ Career Summary

Apr. 1987 Joined Yachiyo Shinkin Bank
Jun. 2017 Executive Officer and General Manager of Human
Resource Division, The Yachiyo Bank, Limited
May 2018 Executive Officer and General Manager of Human
Resource Division, Kiraboshi Bank, Ltd.
Jun. 2022 Audit & Supervisory Board Members, Tokyo Kiraboshi
Financial Group, Inc. current position
Full-time Audit & Supervisory Board Member, Kiraboshi
Bank, Ltd. current position

Jul. 2007 Established PAS Co., Ltd. (currently Hayabusa
Consulting Co., Ltd.) President, PAS Co., Ltd.

Apr. 1997 Joined KOHWA SOHGOH LAW OFFICES
Jan. 2002 Partner, KOHWA SOHGOH LAW OFFICES current position
Oct. 2014 Outside Corporate Auditor, Tokyo TY Financial Group,
Inc. (currently Tokyo Kiraboshi Financial Group, Inc.)

current position

Oct. 2014 Outside Corporate Auditor, Tokyo TY Financial Group,
Inc. (currently Tokyo Kiraboshi Financial Group, Inc.)

current position

current position

Jun. 2015 Outside Corporate Auditor, JAPAN POST TRANSPORT
Co., Ltd. current position
Jun. 2017 Outside Director, GMO CLICK Holdings, Inc. (currently
GMO Financial Holdings, Inc.) current position

Dec. 2014 Senior Partner, Hayabusa Accounting Corporation
current position

Jun. 2019 Outside Corporate Auditor, DeNA Co., Ltd.
current position

Jun. 2021 Outside Audit & Supervisory Board Member,
Kanematsu Corporation current position
Jul. 2021 Representative Partner, Yasumori Accounting and
Audit Office (currently Yasumori Audit Corporation)
current position

Nobuyuki Yasuda,
Managing Executive Officer

Company Overview (As of March 31, 2023)

Full-time Audit & Supervisory Board Member

current position

current position

Takeshi Miura,

Director and Managing Executive Officer

Outside Director

Yoshiaki Nakano,

Masahiro Ogura,Managing Executive Officer

Tsutomu Mano,

Executive Officer

Executive Officer

Organization Chart (As of July 1, 2023)
Audit & Supervisory Board and Audit &Supervisory Board Members

Board of Directors

Audit & Supervisory
Board Oﬃce

Management Meeting

Internal Audit
Division
Corporate Planning Personnel Aﬀairs
Division
Division

HM Oﬃce

Risk Management Business Strategy
Division
Division

Digital Strategy
Division

Nomination/
Remuneration Committee
Compliance Committee
Risk Management Committee
ALM Committee
Capital Policy Committee
HM Committee
Group Sales Strategy Meeting

Partnership Promotion Corporate Communication
Division
Division

Secretariat
Oﬃce

Tokyo Metropolitan
Customer Support Group Strategy
Sustainability Government
Public Sector Collaboration
Collaboration
CenterOﬃce
Promotion Oﬃce
Promotion Oﬃce
Promotion Oﬃce

│Tokyo Kiraboshi Financial Group, Inc.│ 72

Tokyo Kiraboshi
Financial Group

Financial Data and Corporate Data

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Tokyo Kiraboshi
Financial Group’s
Value Creation

Financial Data andCorporate DataManagement Base That
Supports Value Creation

Initiatives for
Value Creation

Kiraboshi Bank, Ltd.
Officers (As of July 1, 2023)

Organization Chart (As of July 3, 2023)

Kiraboshi Bank,
Ltd.

General Meetingof Shareholders

Secretarial Oﬃce
Corporate Communication Division

HR DivisionCorporate
Auditor's Oﬃce

Hidenori Tsunehisa,

President(Representative Director)

Compliance Oﬃce
Operations Administration Division

Takinogawa Administration Center
Moriya Administration Center
Sagamihara Administration Center

System Management Division

Satoru Nobeta,

Deputy President(Representative Director)

Risk Management Oﬃce

Risk Management Division

Board of Directors

Hisanobu Watanabe,

Finance Oﬃce

Corporate Planning Division

Audit & Supervisory Audit & Supervisory
Board Member
Board

Internal Audit Division

Director andSenior Managing Executive Officer(Representative Director)

Financial Markets & International Business DivisionMarket Sales Oﬃce
Market Administration Oﬃce

Asset Audit Oﬃce

Trust Business Division

Trust Sales Oﬃce
Trust Service Management Oﬃce
Trust Administration Management Oﬃce

Credit Administration
Headquarters

Management
CouncilCommittees

Personal Loan Screening Oﬃce

Credit Administration Division
Credit Supervisory Division
Credit Management Division

Loan Management Oﬃce

Business Planning Division

Sagamihara Customer CenterTama Customer Center
Retailing Planning Oﬃce

Hiroshi Shibuya,

Director andSenior Executive Officer

Takeshi Yoshino,

Director andSenior Executive Officer

Managing Executive Officers

Executive Officers

Full-time Audit &Supervisory Board Member
Audit &
Supervisory Board Member
Outside Audit &Supervisory Board Member
Outside Audit &Supervisory Board Member

Managing
Executive Officer Yoshifumi Hayashi
Managing
Executive Officer Takayuki Ebihara
Managing
Executive Officer Norihiko Masumura

Executive Officer Shoji Suzuki

Executive Officer Masafumi Sato

Executive Officer Takao Kobashi

Executive Officer Takuya Ishida

Executive Officer Kuniyuki Hotani

Executive Officer Hideki Kawamura

Executive Officer Hiroshi Horikoshi

Executive Officer Motohiro Kokatsu

Executive Officer Tomoo Kimura

Executive Officer Atsushi Uehara

Yukio Kosai
Kazuhiro Kawai
Chiaki Ariizumi

Financial Instruments Business Center
Start-up Studio Division

Audit & Supervisory Board Members

Hideki Uchida

PB Business Promotion Division

Director andExecutive Officer

Partnership Promotion Division
Foreign Exchange Service Oﬃce
Business Promotion Headquarters

Takeshi Miura,

WM OﬃceUI Bank Co., Ltd.
Toshikazu Tanaka
Nobuyuki Yasuda

PE Oﬃce
MF Division

Syndication Oﬃce

SF Division
RF Division
FC Service Business Division
Medical and Welfare Business Division
Public Sector Finance Division

Officers (As of July 1, 2023)
Representative Director andChairman
Representative Director andPresidentInternational Strategy Division

Real Estate PJ Plaza

Senior Managing Director
Director andSenior Executive Officer
Director andExecutive Officer
Director

Naoko Saito
Kenji Owada
Masami Shiraishi
Satoru Nobeta

Company Overview (As of March 31, 2023)

Full-time Audit &Supervisory Board Member
Audit & Supervisory Board
MemberOutside Audit &Supervisory Board Member
Outside Audit &Supervisory Board Member

Loan Plaza

Keizo Ajioka

Business Plaza

Katsuya Tsuboi

Branches and Oﬃces

Makoto Shibata
Toshihiko Fukuzawa

Head Oﬃce Business Division

No. 1 Sales DivisionTokyo Mirai Business Division

No. 2 Sales Division

Harajuku Branch

No. 3 Sales Division

Shinjuku Head Oﬃce Sales Division
Higashi Shinjuku Branch
Nishi Ohkubo BranchBusiness
nameKiraboshi Bank, Ltd.

Business
name

UI Bank Co., Ltd.

Head office

3-10-43 Minami Aoyama, Minato-ku, Tokyo

Head office

3-10-43 Minami Aoyama, Minato-ku, Tokyo

Inaugurated
CapitalMay 2018* Founded in December 1924.

¥43.7 billion

Total assets¥6,688.4 billion

Number of
branches

166 branches (114 locations)

EstablishedUI Bank Co.,
Ltd.

General Shareholders Meeting
Audit & Supervisory Board
Board of Directors

October 30, 2020

Management Council* The opening of business was in January 2022.

Capital¥4.8 billion

Total assets¥343.2 billion

Risk/Compliance Committee

Planning Division

Product Management
Division

Promotion Division

IT Systems Division

New Business
Planning Division

Customer Referral
Support Division

General Risk
Management Division
AML Oﬃce

Finance Support
Center73 │Tokyo Kiraboshi Financial Group, Inc.│

Internal Audit Division

Contact Center

Risk
Management Group

Administration
Management Group

CreditManagementGroup│Tokyo Kiraboshi Financial Group, Inc.│ 74

Tokyo Kiraboshi
Financial Group

Financial Data and Corporate Data

Tokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Initiatives for
Value Creation

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Consolidated Financial Statements
Tokyo Kiraboshi Financial Group, Inc. and its Consolidated Subsidiaries
March 31, 2023 and 2022

Consolidated Balance Sheets

Thousands of
U.S. Dollars
2023

Millions of Yen
2023

2022

Consolidated Income Statements and Consolidated
Statements of Comprehensive Income
Consolidated Income Statements2023¥125,291
71,66957,294
12,581
100
1,070
623
395
20,556
7,845
24,82375
24,74894,516
3,262
1,482
2
72
1,473
203
14
12
3,797
10,59557,947
18,913
1,844
17,0692022¥108,348
63,12449,877
11,516
12
1,189
528
328
18,681
2,388
23,825
46
23,77983,404
1,176
844
2
33
231
37
14
12
3,403
860
56,192
21,771
6,119
15,651Thousands of
U.S. Dollars
2023$938,298
536,725
429,072
94,218
748
8,013
4,665
2,958
153,942
58,750185,898
561
185,336
707,825
24,428
11,09814539
11,031
1,520
104
89
28,43579,345433,962
141,638
13,809127,828

Profit before income taxes

31,867

24,771

238,650

Income taxes – deferred

2,891

1,722

21,650Millions of Yen

AssetsCash and due from banks��������������������������������������������������������������������������������������������
Call loans and bills bought������������������������������������������������������������������������������������������
Monetary claims bought����������������������������������������������������������������������������������������������
Trading account securities�������������������������������������������������������������������������������������������
Money held in trust��������������������������������������������������������������������������������������������������������
Securities����������������������������������������������������������������������������������������������������������������������������
Loans and bills discounted������������������������������������������������������������������������������������������
Foreign exchange������������������������������������������������������������������������������������������������������������
Lease receivables and investment assets���������������������������������������������������������������
Other assets���������������������������������������������������������������������������������������������������������������������
Tangible fixed assets������������������������������������������������������������������������������������������������������
Buildings��������������������������������������������������������������������������������������������������������������������������
Land����������������������������������������������������������������������������������������������������������������������������������
Leased assets����������������������������������������������������������������������������������������������������������������
Construction in progress�������������������������������������������������������������������������������������������
Other tangible fixed assets��������������������������������������������������������������������������������������
Intangible fixed assets���������������������������������������������������������������������������������������������������
Software��������������������������������������������������������������������������������������������������������������������������
Goodwill��������������������������������������������������������������������������������������������������������������������������
Leased assets����������������������������������������������������������������������������������������������������������������
Other intangible fixed assets�����������������������������������������������������������������������������������
Net defined benefit assets������������������������������������������������������������������������������������������
Deferred tax assets��������������������������������������������������������������������������������������������������������
Customers’ liabilities for acceptances and guarantees�������������������������������������
Reserve for possible loan losses��������������������������������������������������������������������������������

¥ 936,273
9,640
58,527861
2,867
856,976
4,706,163
4,519
24,85373,70855,971
15,43533,037
1,675
1,580
4,241
12,922
6,565
2,985
148
3,222
18,400
7,049
5,971(32,557)¥ 844,418
6,095
70,029777
1,739
1,012,755
4,346,138
6,860
22,19865,13555,636
15,83133,192
1,940
71
4,601
7,918
7,068
―
205
643
28,952
4,769
5,623(35,240)$ 7,011,705
72,193438,305
6,447
21,4706,417,853
35,244,237
33,842
186,122551,995
419,164
115,592
247,412
12,543
11,832
31,76096,772
49,16422,354
1,108
24,129137,796
52,78944,716(243,817)

Liabilities
Deposits�����������������������������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit�����������������������������������������������������������������������������
Call money and bills sold���������������������������������������������������������������������������������������������
Payables under securities lending transactions���������������������������������������������������
Borrowed money������������������������������������������������������������������������������������������������������������
Foreign exchange������������������������������������������������������������������������������������������������������������
Bonds����������������������������������������������������������������������������������������������������������������������������������
Other liabilities����������������������������������������������������������������������������������������������������������������
Reserve for employee bonuses����������������������������������������������������������������������������������
Provision for directors’ bonuses���������������������������������������������������������������������������������
Provision for stock compensation�����������������������������������������������������������������������������
Net defined benefit liabilities�������������������������������������������������������������������������������������
Reserve for directors’ retirement benefits��������������������������������������������������������������
Reserve for point card certificates����������������������������������������������������������������������������
Provision for loss on interest repayments��������������������������������������������������������������
Reserve for loss on dormant deposit repayments����������������������������������������������
Provision for contingent loss���������������������������������������������������������������������������������������
Reserves under special laws���������������������������������������������������������������������������������������
Deferred tax liabilities���������������������������������������������������������������������������������������������������
Acceptances and guarantees�������������������������������������������������������������������������������������

¥5,625,386
9,500
448,139
184,751
79,786258
7,008
50,696
1,670
155
374
75
67
74
―
259
883
0
116
5,971

¥5,157,583
9,500
117,525
302,567
463,903
655
3,800
60,044
1,605
114
217
56
7
51
3
370
757
0
106
5,623

$42,128,255
71,145
3,356,092
1,383,591
597,513
1,932
52,482379,660
12,506
1,160
2,800
561
501
554
―
1,939
6,612
0
868
44,716$48,042,964

Profit attributable to owners of parent

¥

¥

$

205,946
1,130,592
1,133,820(8,971)

Consolidated Statements of Comprehensive Income

ProfitOther comprehensive income
Net unrealized gain on available-for-sale securities����������������������������������������
Net deferred gains (losses) on hedges�����������������������������������������������������������������
Foreign currency translation adjustment�������������������������������������������������������������
Remeasurements of defined benefit plans���������������������������������������������������������
Share of other comprehensive income of entities accounted for using equity method���Total assets

Total liabilities

Net Assets
Common stock����������������������������������������������������������������������������������������������������������������
Capital surplus�����������������������������������������������������������������������������������������������������������������
Retained earnings�����������������������������������������������������������������������������������������������������������
Treasury stock������������������������������������������������������������������������������������������������������������������

¥6,742,149¥6,415,177
27,500150,968
151,399(1,198)¥6,443,807¥6,124,495
27,500150,966
133,470(966)$50,491,642

Total shareholders’ equity
Net unrealized gain on available-for-sale securities�������������������������������������������
Net deferred gains (losses) on hedges��������������������������������������������������������������������
Revaluation reserve for land���������������������������������������������������������������������������������������
Foreign currency translation adjustment����������������������������������������������������������������
Remeasurements of defined benefit plans������������������������������������������������������������

328,669(5,121)
―
(242)
25
3,573

310,969
4,186
675
(242)
24
3,676

2,461,386(38,350)―(1,812)
187
26,758(13,218)

Total accumulated other comprehensive income�����������������������������������������������

(1,765)

8,320

Subscription rights to shares���������������������������������������������������������������������������������������

13

13

97

Noncontrolling interests�����������������������������������������������������������������������������������������������

55

8

411

Total net assets���������������������������������������������������������������������������������������������������������������

326,972

319,3122,448,678

Total liabilities and net assets���������������������������������������������������������������������������������

¥6,742,149¥6,443,807$50,491,642

U.S. dollar amounts are the yen equivalent, calculated for convenience only, at the rate of ¥133.53 = U.S. $1.

75 │Tokyo Kiraboshi Financial Group, Inc.│

Ordinary income
Interest income�������������������������������������������������������������������������������������������������������������
Interest on loans and discounts���������������������������������������������������������������������������
Interest and dividends on securities�������������������������������������������������������������������
Interest on call loans and bills bought��������������������������������������������������������������
Interest on deposits with banks��������������������������������������������������������������������������
Other interest income���������������������������������������������������������������������������������������������
Trust fees�������������������������������������������������������������������������������������������������������������������������
Fees and commissions�����������������������������������������������������������������������������������������������
Other operating income��������������������������������������������������������������������������������������������
Other ordinary income�����������������������������������������������������������������������������������������������
Recoveries of written-off receivables������������������������������������������������������������������
Others���������������������������������������������������������������������������������������������������������������������������
Ordinary expenses
Financing expenses�����������������������������������������������������������������������������������������������������
Interest on deposits�������������������������������������������������������������������������������������������������
Interest on negotiable certificates of deposit�������������������������������������������������
Interest on call money and bills sold�����������������������������������������������������������������
Interest on payables under securities lending transactions�����������������������
Interest on borrowed money��������������������������������������������������������������������������������
Interest on corporate bonds���������������������������������������������������������������������������������
Other interest expenses�����������������������������������������������������������������������������������������
Fees and commissions payments��������������������������������������������������������������������������
Other operating expenses����������������������������������������������������������������������������������������
General and administrative expenses������������������������������������������������������������������
Other ordinary expenses������������������������������������������������������������������������������������������
Provision of allowance for loan losses���������������������������������������������������������������
Other ordinary expenses����������������������������������������������������������������������������������������

Ordinary profit
Extraordinary income
Gain on disposal of non-current assets���������������������������������������������������������������
Gains on return of securities from retirement benefit trust���������������������������
Gain on receipt of national subsidies, etc.����������������������������������������������������������
Extraordinary losses
Loss on disposal of non-current assets����������������������������������������������������������������
Impairment losses��������������������������������������������������������������������������������������������������������
Provision for special account for tax purpose reduction entry of non-current assets���

Income taxes – current
Total income taxes
ProfitLoss attributable to non-controlling interests

30,774
1,941
199
1,520
221
847
198
461
187

24,943
0
0
―
―
172
172
―
―

7,907

4,865

10,798

6,588

230,465
14,536
1,490
11,383
1,655
6,343
1,482
3,452
1,400
59,21580,86521,06918,183

157,784¥ 21,150¥ 18,183$158,391

(80)

―

(599)

2023
¥21,069(10,086)(9,306)
(675)
0
(103)
(2)

Thousands of
U.S. Dollars
2022
2023
¥18,183$157,784(7,580)(75,533)(8,881)(69,692)
485(5,055)
12
0
813
(771)
(10)
(14)
10,60382,251¥ 11,064(80)¥ 10,603―$ 82,857(599)

Millions of Yen

Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent����������������������������
Comprehensive income attributable to non-controlling interests��������������

10,983

U.S. dollar amounts are the yen equivalent, calculated for convenience only, at the rate of ¥122.39 = U.S. $1.
│Tokyo Kiraboshi Financial Group, Inc.│ 76

Financial Data and Corporate Data

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi
Financial Group’s
Value Creation

Tokyo Kiraboshi
Financial Group’s
Growth Strategy

Management Base That
Supports Value Creation

Initiatives for
Value Creation

Financial Data andCorporate Data

Consolidated Financial Statements
Consolidated Statements of Changes in Net Assets

Millions of yen
2023
Shareholders’ equity
Accumulated other comprehensive income
Net
Net
Total
Foreign Remeasureunrealized deferred Revaluation
accumulated Subscription NonTotal
currency ments ofCommon Capital Retained Treasury
Total net
gains reserve forothershareholders’ gain on
rights to controllingtranslation defined
stock surplus earnings stock
assetscomprehen- shares
equity available-for- (losses) on landinterests
adjustment benefit planssale securities hedges
sive income
Balance at beginning of the year��� 27,500 150,966 133,470(966) 310,969
4,186
675
(242)
24
3,676
8,320
13
8 319,312
Changes of items during the reporting period���Capital increase of consolidated subsidiaries���2
2
2
Dividends of surplus����������������
(3,221)(3,221)(3,221)
Profit attributable to owners of parent���21,15021,15021,150Acquisition of treasury stock���
(262)
(262)
(262)
Disposition of treasury stock��
(0)
30
30
30
Net changes of items other than shareholders’equity during the reporting period��������������
(9,308)(675)―0(103) (10,086)―
46 (10,039)
Total changes of items during the reporting period��―
2 17,929(231) 17,699 (9,308)
(675)
―
0
(103) (10,086)
―
46
7,660
Balance at end of period���������� 27,500 150,968 151,399 (1,198) 328,669 (5,121)
―
(242)
25
3,573 (1,765)
13
55 326,972
Millions of yen
2022
Shareholders’ equity
Accumulated other comprehensive income
Net
Net
Total
Foreign Remeasureunrealized deferred Revaluation
Total
accumulated Subscription Noncurrency ments ofCommon Capital Retained Treasury
Total net
gains reserve forothershareholders’ gain on
rights to controllingtranslation defined
stock surplus earnings stock
assetscomprehen- shares
equity available-for- (losses) on landinterests
adjustment benefit planssale securities hedges
sive income
Balance at beginning of the year��� 27,500 150,677 117,514(742) 294,949 13,078
189
(242)
11
2,863 15,900
30― 310,880
Cumulative effects of changes in accounting policies���
(151)
(151)
(151)
Restated balance at beginning of the year(742) 294,798 13,078
189
(242)
11
2,863 15,900
30― 310,729
reflecting changes in accounting policies��� 27,500 150,677 117,363
Changes of items during the reporting period���(2,076)(2,076)(2,076)
Dividends of surplus����������������
Profit attributable to owners of parent���18,18318,18318,183Acquisition of treasury stock���
(280)
(280)
(280)
Disposition of treasury stock��
(2)
56
53
53
Capital increase of consolidated subsidiaries���
291
291
291
Net changes of items other than shareholders’equity during the reporting period��������������
(8,891)485―
12813 (7,580)(17)
8 (7,588)
Total changes of items during the reporting period��―
288 16,106(223) 16,171 (8,891)485―
12813 (7,580)
(17)
8
8,583
Balance at end of period���������� 27,500 150,966 133,470(966) 310,969
4,186
675
(242)
24
3,676
8,320
13
8 319,312
Thousands of U.S. Dollars
2023
Shareholders’ equity
Accumulated other comprehensive income
Net
Net
Total
Foreign Remeasureunrealized deferred Revaluation
Total
accumulated Subscription Noncurrency ments ofCommon Capital Retained Treasury
Total net
gains reserve forothershareholders’ gain on
rights to controllingtranslation defined
stock surplus earnings stock
assetscomprehen- shares
equity available-for- (losses) on landinterests
adjustment benefit planssale securities hedges
sive income
Balance at beginning of the year��� 205,946 1,130,577 999,550(7,234) 2,328,832
31,3485,055(1,812)
179
27,52962,30897
59 2,391,312
Changes of items during the reporting period���Capital increase of consolidated subsidiaries���14
14
14
Dividends of surplus����������������
(24,121)(24,121)(24,121)
Profit attributable to owners of parent���158,391
158,391
158,391
Acquisition of treasury stock���(1,962)(1,962)(1,962)
Disposition of treasury stock��
(0)
224
224
224
Net changes of items other than shareholders’equity during the reporting period��������������
(69,707)(5,055)―0(771) (75,533)―
344 (75,181)
Total changes of items during the reporting period��―
14 134,269(1,729) 132,546 (69,707)(5,055)―0(771) (75,533)―
344
57,365
Balance at end of period���������� 205,946 1,130,592 1,133,820(8,971) 2,461,386 (38,350)―(1,812)
187
26,758 (13,218)
97411 2,448,678

77 │Tokyo Kiraboshi Financial Group, Inc.│

Consolidated Statements of Cash Flows
Millions of Yen
Cash flows from operating activities
Profit before income taxes�����������������������������������������������������������������������������������������������������
Depreciation��������������������������������������������������������������������������������������������������������������������������������
Impairment losses���������������������������������������������������������������������������������������������������������������������
Amortization of goodwill��������������������������������������������������������������������������������������������������������
Gains on return of securities from retirement benefit trust����������������������������������������
Share loss (profit) of entities accounted for using equity method���������������������������
Increase (decrease) in reserve for possible loan losses����������������������������������������������
Increase (decrease) in reserve for employee bonuses�������������������������������������������������
Increase (decrease) in provision for directors’ bonuses����������������������������������������������
Increase (decrease) in provision for stock compensations����������������������������������������
Decrease (increase) in net defined benefit assets��������������������������������������������������������
Increase (decrease) in net defined benefit liability�������������������������������������������������������
Increase (decrease) in reserve for directors’ retirement benefits�����������������������������
Increase (decrease) in reserve for point card certificates�������������������������������������������
Increase (decrease) in reserve for loss on interest repayments�������������������������������
Increase (decrease) in reserve for loss on dormant deposit repayments�������������
Increase (decrease) in reserve for contingent loss��������������������������������������������������������
Interest income���������������������������������������������������������������������������������������������������������������������������
Financing expenses�������������������������������������������������������������������������������������������������������������������
Gain (loss) on securities����������������������������������������������������������������������������������������������������������
Net losses (gains) on money held in trust������������������������������������������������������������������������
Foreign exchange losses (gains)�������������������������������������������������������������������������������������������
Net loss (gain) on disposal of non-current assets���������������������������������������������������������
Provision for special account for tax purpose reduction entry of non-current assets����
Gain on receipt of national subsidies, etc.�����������������������������������������������������������������������
Net decrease (increase) in trading account securities�������������������������������������������������
Net decrease (increase) in loans and bills discounted������������������������������������������������
Net increase (decrease) in deposits�����������������������������������������������������������������������������������
Net increase (decrease) in borrowed money (excluding subordinated loans)���
Net decrease (increase) in deposit (excluding deposit paid to Bank of Japan)���
Net decrease (increase) in call loans���������������������������������������������������������������������������������
Net increase (decrease) in call money�������������������������������������������������������������������������������
Net increase (decrease) in payables under securities lending transactions��������
Net decrease (increase) in foreign exchange (assets)��������������������������������������������������
Net increase (decrease) in foreign exchange (liabilities)���������������������������������������������
Net decrease (increase) in lease receivables and investment assets���������������������
Increase (decrease) due to issuance and redemption of straight bonds��������������
Proceeds from fund management���������������������������������������������������������������������������������������
Payments for finance����������������������������������������������������������������������������������������������������������������
Other����������������������������������������������������������������������������������������������������������������������������������������������
Subtotal
Income taxes paid���������������������������������������������������������������������������������������������������������������������
Income taxes refund�����������������������������������������������������������������������������������������������������������������Cash flows from operating activities
Cash flows from investing activities
Purchase of securities��������������������������������������������������������������������������������������������������������������
Proceeds from sales of securities����������������������������������������������������������������������������������������
Proceeds from redemption of securities���������������������������������������������������������������������������
Payments due to increase in money held in trust����������������������������������������������������������
Purchase of tangible fixed assets�����������������������������������������������������������������������������������������
Retirement of tangible fixed assets�������������������������������������������������������������������������������������
Proceeds from sales of tangible fixed assets�������������������������������������������������������������������
Purchase of intangible fixed assets�������������������������������������������������������������������������������������
Proceeds from sale of intangible fixed assets�����������������������������������������������������������������
National subsidy income, etc.�����������������������������������������������������������������������������������������������
Purchase of shares of subsidiaries resulting in change in scope of consolidation���
Purchase of shares of affiliates����������������������������������������������������������������������������������������������
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from issuance of shares���������������������������������������������������������������������������������������Cash dividends paid�����������������������������������������������������������������������������������������������������������������
Purchase of treasury shares���������������������������������������������������������������������������������������������������
Proceeds from sale of treasury stock���������������������������������������������������������������������������������
Proceeds from exercise of share options��������������������������������������������������������������������������
Proceeds from exercise of performance-linked stock-based compensation�������
Repayments of lease obligations��������������������������������������������������������������������������������������������
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Thousands of
U.S. Dollars
2023

2023

2022

¥ 31,867
5,582
461
195
(1,520)(3,569)(4,921)35
40
156
10,551
5
(2)
23
(3)
(110)
126
(71,669)
3,262
2,025
(328)
(13,280)
(0)
187
(221)
(83)
(357,531)
468,177(385,898)(2,327)
7,956
330,614(117,816)
2,341
(396)
(2,655)2,940
68,760(2,589)(1,320)(30,936)(7,630)425(38,142)¥ 24,771
5,112
―
―
―
(6,540)
139
82
(40)
54
(4,898)
3
(7)
7
(4)
(919)
(36)
(63,124)
1,176
(704)
(118)
(17,132)172――
68(419,620)
185,110
222,530(813)(7,188)57,892
31,1852,562
361(3,483)(200)
61,084(1,249)765
66,999(972)
1,451
67,478$ 238,650
41,803
3,452
1,460(11,383)(26,728)(36,853)
262
299
1,168
79,015
37
(14)
172
(22)
(823)
943
(536,725)
24,42815,165(2,456)(99,453)(0)
1,400(1,655)(621)(2,677,533)
3,506,155(2,889,972)(17,426)
59,582
2,475,952(882,318)
17,531(2,965)(19,883)
22,017514,940(19,388)(9,885)(231,678)(57,140)
3,182(285,643)(244,218)
290,622
99,460(800)(4,093)(283)
395(4,670)1
266(4,258)(7)
132,413(331,281)
193,832
169,109―(3,170)(560)
4(3,483)――――24,450(1,828,937)
2,176,454
744,851(5,991)(30,652)(2,119)2,958(34,973)
7
1,992(31,887)(52)
991,634

130(3,221)
(243)
11
―
9
(4)
(3,318)
3
90,956
843,122¥934,079―(2,076)
(279)
2
18
35
(0)
(2,299)2
89,630753,492¥843,122

973(24,121)(1,819)
82
―
67
(29)
(24,848)22
681,165
6,314,101$6,995,274│Tokyo Kiraboshi Financial Group, Inc.│ 78

2023 Annual Report
Published in July 2023

3-10-43 Minami Aoyama, Minato-ku, Tokyo 107-0062
https://www.tokyo-kiraboshifg.co.jp

This document contains forward-looking statements on the Group’s results.
These statements are not intended to guarantee future results, as they are
subject to risks and contain uncertainties. Please keep in mind that future
results may diﬀer due to factors including changes in the business environment.