Giving our all, for TOKYO.

Tokyo Kiraboshi Financial Group
Results Briefing for the Fiscal Year
Ended March 31, 2024

Contents
1. Summary of Business Results for the Fiscal Year
Ended March 31, 2024

4. Corporate Value Enhancement Measures, Capital
PolicySummary of Business Results for the Fiscal Year Ended March 31, 2024
Factors Affecting Net Income (Kiraboshi Bank)
Profit from Customer Business (Kiraboshi Bank)
Loans and Trust Assets (Kiraboshi Bank)
Balance of Deposits and Assets under Management (Kiraboshi Bank +UI Bank / KLD Securities)
Income from Fees and Commissions (Kiraboshi Bank)
Securities (Kiraboshi Bank)
Problem Assets Subject to Disclosure under the Financial Reconstruction
Act and Capital Ratio
Core OHR / ROE / Dividends
Plan for the Fiscal Year Ending March 31, 2025
<Reference> UI Bank Results

4
5
6
7
8
9
10

11
12
13
14

5. Measures for Further Efficiency Improvement andOptimal Management Resource Allocation

16
17
18
19
20
21

6. Sustainability Initiatives

2. Medium-Term Business Plan Overview
Review of Previous Medium-Term Business Plans
Previous Medium-Term Business Plan KPIs
Purpose / Social Issues To Be Addressed
Brand Statement
Management Targets
Transformation of Income Structure

Resource Allocation
Governance Structure and Organization
Well-being and Human Capital Management

43
44
45
46
47
48
49
50

52
53–54
55–57

Roadmap[E] Environment[S] Social[G] Governance

59
60
61
62

Appendix: Materiality Initiatives: List of KPIs

3. Review of Income StructureGroup Strategy
Corporate Customer Strategy
Retail Customer Strategy
Digital Strategy
Branch Strategy
Market Investment
Overseas Strategy
Start-up Support

Desired State in 10 Years
Initiatives for Improving PBRBusiness Portfolio (Excluding Kiraboshi Bank)
Cost Control
Risk-Weighted Asset Control (Overview)
Risk-Weighted Asset Control (By Category)
Basic Capital Policy
Capital Policy (Preferred Stock, Dividends, Cross-Shareholdings)

23–24
25–28
29
30–36
37–38
39
40
41

2
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

1. Summary of Business Results for the
Fiscal Year Ended March 31, 2024

©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Summary of Business Results for the Fiscal Year Ended March 31, 2024
Tokyo Kiraboshi FG(consolidated)

Results for the Fiscal Year
Ended March 31, 2024A

2023/3B(Actual)2024/3

YoY（B－A）(Actual)(¥100 million)
C 2024/3(Revised
forecast)

Rate ofprogress（B / C）

2024/3

Profit attributable to owners of parent+21.2％ YoY

1

Ordinary profit

307

329

+21

301

109.5%

Percent change

2

Profit attributable to owners of parent

211

256

+45

240

106.8%(¥21.1 billion → ¥25.6 billion）* Revised full-year forecasts as of November 1, 2023 (net income of ¥22.0 billion → ¥24.0 billion)

Kiraboshi Bank
(non-consolidated)

Results for the Fiscal Year
Ended March 31, 2024
A 2023/3(Actual)

1
2
3
4
5
6
7

Gross core business profit
Net interest income

Interest on loans and discounts
Interest on securities
Other interest income

Non-interest income
Expenses

8

Net core business income

9

Net core business income (excluding
special factors）
Credit-related costs

10
11
12
13

Gains (losses) on bonds
Gains (losses) on stocks and othersecurities
Other non-recurring profit (loss)

B

2024/3

YoY（B－A）(Actual)(¥100 million)
C 2024/3(Revised
forecast)

Rate ofprogress（B / C）

907

919

+11

909

101.1%

744
572
192
(21)
163
(504)

814
665
197
(47)
104
(531)

+70
+92
+4
(26)
(58)
(27)

794
651
195
(52)
115
(529)

―
―
―
―
―
―

403

387

(15)

380

102.0%
102.1%
―
―

299

352

+53

(20)
(50)

(19)
(36)

+1
+13

345
(26)
(35)

48

63

+15

48

―

(9)

(35)

―
111.4%

(15)

(24)

14

Ordinary profit

365

369

+4

332

15

Ordinary profit (excluding special factors)

16
17

Extraordinary profit (loss)

300
15
(107)

334
(1)
(65)

+33
(17)
+41

297
(1)
(50)

112.6%

18

Net income

274

303

+28

279

―
―
108.6%

19

Net income (excluding special factors)

209

267

+58

244

109.7%

Income taxes

Note: For signs used in year-on-year comparison, “+” indicates increase in income, “( )” indicates decrease in income

Excluding special factors
2024/32024/3

Ordinary profit
Percent change

Ordinary profit+1.1％ YoY（¥36.5 billion → ¥36.9 billion)

Percent change+11.2％ YoY(¥30.0 billion → ¥33.4 billion)
2024/32024/3

Net income
Percent change

Net income+10.4％ YoY(¥27.4 billion → ¥30.3 billion)

Percent change+27.8％ YoY(¥20.9 billion → ¥26.7 billion)

1 Net core business income (excluding special factors）* Amounts indicated exclude the special factors below

2023/32024/3

A. Dividends from affiliates

6435

B. Gains from derivatives
transactions, etc.

39

ー

103

35

(¥100 million)

Total （A＋B）

A. Dividend received from anequity-method affiliate
sourced from sale of realestate by the said equitymethod affiliate
B. Gains from derivatives
transactions associated withunwinding of asset swaps,
etc.

Ordinary profit (excluding special factors), net income

2 (excluding special factors)*Amounts indicated exclude the special factors below(¥100 million)
A. Dividends from affiliates

2023/32024/3

64

35

A. Dividend received from anequity-method affiliate
sourced from sale of realestate by the said equitymethod affiliate* Revised full-year forecasts as of November 1, 2023 (net income of ¥24.5 billion → ¥27.9 billion)

4©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Factors Affecting Net Income (Kiraboshi Bank)* For signs before the numbers on this page, “+” indicates increase in income, “( )” indicates decrease in income(Reference) Year-on-yearchange excluding special
factors

Main Items

YoY

Key Points❶

Interest on loans and discounts+¥9.2 billion+¥9.2 billion YoY due to continued increase in loan balance that largely reflected initiatives such as
promotion of transactions for main bank relationship building and business financing activities, as well as
rise in loan yield+¥9.2 billion❷

Interest and dividends on
securities+¥0.4 billion

Despite ¥(2.9) billion YoY in special factors (*1) that were posted, overall result was +¥0.4 billion YoY
due in part to increased interest from foreign securities and fund income+¥3.4 billion❸

Other interest income¥(2.6) billion¥(2.6) billion YoY partly due to an increase in foreign currency funding costs (¥(0.5) billion) and anincrease in interest payments to UI Bank on borrowed money (¥(1.2) billion)¥(2.6) billion❹

Non-interest income¥(5.8) billion¥(5.8) billion YoY overall reflecting factors such as recording ¥(1.4) billion in loss on foreign exchangetransactions and the absence of gains from transactions associated with unwinding of asset swaps, etc.
(¥3.9 billion) recorded in the previous year¥(1.9) billion

Expenses¥(2.7) billion¥(2.7) billion YoY partly due to an increase in personnel expenses resulting from an increase in basepay

Credit-related costs+¥0.1 billion+¥2.8 billion+¥0.1 billion YoY partly due to lower actual ratio of the provision of general allowance for loan losses

Other non-recurring profit (loss)
Extraordinary income (loss) /Income taxes+¥1.4 billion+¥1.4 billion YoY partly due to a decrease in income taxes as a result in higher expected recovery ofdeferred tax assets in tax effect accounting (+¥2.3 billion)

Total+¥2.8 billion*1: Dividend received from an equity-method affiliate sourced from sale of realestate by the said equity-method affiliate

❺
❻
❼
❽

Gains (losses) on bonds, stocks
and other securities¥(2.7) billion+¥0.1 billion+¥2.8 billion YoY partly due to decrease in loss on sales of foreign bonds and increase in gain on saleof stocks held for investment purposes¥(1.0) billion+¥1.4 billion
Total+¥5.8 billion(¥6.4 billion in 2023/3 → ¥3.5 billion in 2024/3)+92

Diff. b/w consolidated and nonconsolidated(¥100 million)

Year-on-year changes+4
Net income(26)

Net income

+14
+28

274

2023/3+1(58)
Interest on
loans anddiscounts❶(¥100 million)

Interest on Other interest
incomesecurities

❷

❸

(27)

Noninterest
incomeExpensesCreditrelated
costs

❹

❺

❻

303

Other
nonGains (losses)
recurringon bonds,
profitstocks and other(loss), etc.
securities❼❽

2024/3

Kiraboshi Bank (non-consolidated) net
income303

Group consolidated net income (of which, effectsof start-up deficit of newly-established companies,
etc.: ¥(2.7) billion)(3)

Elimination of internal transactions between
consolidated Group companies (such as dividendof ¥3.5 billion mentioned in *1 above)(44)

Tokyo Kiraboshi FG (consolidated) net
income256©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

5

Profit from Customer Business (Kiraboshi Bank)
1. Profit from customer business (¥100 million)

Breakdown of factors (¥100 million, %)YoY＋¥¥3.4 billion
billion250
216[+15.7][+15.7%]1262022/32023/32024/3YoY

ALoan balance (closing balance)

43,69747,353

48,331+977

B

Loan-deposit yield difference

1.19

1.25

1.35

+0.10

C

Income from fees andcommissions

115

127

126

(1)

D

General and administrative
expenses(expenses + temporary
treatment of retirement benefit
expenses, etc.)

511

503

530

(26)

Profit from customer business（A×B＋C－D）

126

216

250

+34

14

Loan balance / Loan-deposit yield difference (¥100 million, %)2021/32022/32023/32024/3
1.35

Loandeposit yield
difference

Key increases

1.17

1.20

1.25
47,353

48,3312023/32024/3

43,697

1

39,380Loan balance (closing balance) +¥97.7 billion YoY

2
Loan-deposit yield difference +0.10 pct pts YoY* Calculation method: (loan balance x loan and deposit rate margin) + income
from fees and commissions - general and administrative expenses

2021/32022/36©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Loans and Trust Assets (Kiraboshi Bank)
Continued yield increases due to efforts in promotion of transactions for main bank relationship building and business financing
activities, etc.
While loan balances are on an increasing trend, loans to SMEs are slightly decreasing due to the implementation of distribution, etc.
* Inclusive of ¥6.4 billion in
dividend from equitymethod affiliate (special
factor)1. Loan balance by type of customer (¥100 million)

2. Net interest income (¥100 million)

1.38

Loan yield(%)
Loan-deposit
yield
difference (%)

1.18
1.17

1.21
1.19

1.26

1,174

656
587

1.35
125

6

YoY

814

[+70]

197

Interest on
securities

665

Interest on
loans anddiscounts

(21)

(47)

2023/32024/3

Otherinterest
income

744
192

151

1.25
48,33147,35339,380* Inclusive of ¥3.5 billion in
dividend from equitymethod affiliate (special
factor)43,697

880

2,107

1,033

6,230

6,259

5,782

YoY

[+977][+2,937]

Local
governments
Medium- andlarge-sizedcompanies

4,577

463

498

(2)

2021/32022/3572

3. Balance of trust assets (¥100 million)

YoY

1,258

[+123][+3,496]

1,134
33,232
26,32729,88133,011

300

SMEs

822

237

Public works costreceivables trust,
etc.

283

414
170
7,300

6,999

7,011

6,953

2021/32022/32023/32024/3

Individuals

897

957

2023/32024/3

539

Real estate
management
trust

244

2021/32022/37* See p. 25 for distribution results for FY2023©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Balance of Deposits and Assets under Management (Kiraboshi Bank + UI Bank /KLD Securities)
Robust accumulation of deposit balance at UI Bank (¥403.4 billion as of Mar. 31, 2024); +¥192.2 billion YoY for the Group as awhole
Balance of assets under management on the rise, led by Kiraboshi Life Design Securities

2. Balance of assets under management by item
(Kiraboshi Bank + KLD) (¥100 million)

1. Deposit balance by type of customer(Kiraboshi Bank + UI Bank) (¥100 million)
YoY

56,841
51,81849,904

3,305

58,763
3,895

YoY[+1,922]

ＫＬＤ （*）

168

Public bonds

2,520

Insurance

Investment trusts

5,856
20,8335,266

Corporate

18,753

1,731

2,028

342

325

262

2,318

2,338

2,374

1,525

1,461

1,367

1,544

2021/32022/32023/32024/3

4,186

4,124

4,005

4,233

1,079

1,731

2,028

2,844

1,079

1,362

2021/3

2,844

6,033

1,300

19,96630,601[+1,044]

Others

1,791

17,511

7,078

30,4022022/3

3,358

30,2102023/3

4,034

29,999Individuals

Personal
deposits
includingdeposits in UI
Bank
34,0342024/3

KiraboshiBank49,90450,45653,48254,728UI Bank

―

1,362

3,358

4,034

* Negotiable certificates of deposit not included* UI Bank started operation in January 2022

UI Bank(Individuals)

Kiraboshi
Bank
KLD
Securities* KLD: Kiraboshi Life Design Securities Co., Ltd.

8
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Income from Fees and Commissions (Kiraboshi Bank)
Commission income from retail customers remained generally flat due to shift to sales approach focusing on outstandingbalance and not dependent on sales commissions, despite commission income from corporate customers declining
compared to the previous fiscal year, when revenues grew significantly due to business finance, etc.

1. Income from fees and commissions (¥100 million)

2. Commission income from corporate customers(¥100 million)

YoY

77

71

2

2

7

58

6

126

[(1)]

33

115

61

58

Main bank relationshipbuilding, businessfinancing, etc.

54Business matching2023/32024/342
29

33

Others15

2021/335

Private placement
bonds
ABL, etc.

YoY

127

[(5)]

2022/388* Breakdown is basedon management
accounting figures

3. Commission income from retail customers(¥100 million)

34
77

71

Corporate

YoY

20

21

5

8

21

21

[＋0]

0

0

Financial instrumentsintermediary / other10

11Life insurance

58

13
33

2021/3
20

21

21

21

Individuals

1192022/32023/39Investment
trusts2024/3* Breakdown is based on
management accounting figures[Ref] Kiraboshi Life Design Securities’ commission income(* not included in commission income from retail customers above)

2021/32022/32023/32024/3(Started operation in Aug. 2020)¥0.21 bn
2021/3¥0.83 bn

¥1.05 bn

¥1.23 bn

2022/32023/32024/3©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

9

Securities (Kiraboshi Bank)
Proceeded with disposal of low-coupon bonds, replaced yen bonds with municipal bonds, etc., and replaced foreign bonds withfloating-rate bonds
1. Securities balance / yield (¥100 million, %)
1.33

1.50
1.20

10,2042.04
1.35

Valuation gain/loss

2.21

216
Yield excluding dividends fromequity-method affiliate (special
factor)

1.81

64

100

Stocks

YoY

[+67]

（37)

(104)

YoY

10,055
8,558

3,901

2. Valuation gain/loss on securities (¥100 million)

9,227[+668]

54

Bonds

62

Others

3,985

Other
securities

3,979
3,459

419

419

3,155

2,765

653

627

2,074

2,264

623
1,473

907
1,256

2021/32022/32023/32024/3

506

598

2,494

2,480

199

Stocks

101

97
(19)

Foreignsecurities
Investment
Stockstrusts
REITs
Corporate
PE funds, etc.
bonds
Municipal bonds
Government
bonds

Bonds

Held-toHeld-to(6)maturity
maturity
bonds
bonds

(81)

(111)

(6)
(82)

(6)

2022/32023/3Government
bonds
Municipal bonds
Corporate bonds

(140)

Bonds

(14)

Held-to-maturity
Held-tomaturity
bonds
bonds

(12)

2021/3

OthersForeign securities
Investment trusts
REITs
PE funds, etc.

2024/3

Breakdown of “other securities”

3,901

3,979

263

408

3,985
3,459

4. Interest rate sensitivity

3. Duration (years)

626

PE funds, etc.

1,887

Foreignsecurities

6.1

REITs

3.9

(¥100 million)

502
2,273

2,157
1,571

684
679

2021/3827
585

2022/3

898

878

487

593

2023/32024/3

Investment
trusts2021/3

6.7

6.0

5.9

2.8

Foreign
2.2 bonds

3.9

2022/32023/3

Japanesebonds

2024/32023/32024/3

Japanese
bonds

(28)

(26)

Foreign
bonds

(3)

(2)

* Effect of an upward parallel shift ofinterest rate by 10bp
* Excluding investment trusts

10©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Problem Assets Subject to Disclosure under the Financial Reconstruction Act andCapital Ratio
Ratio of problem assets subject to disclosure decreased YoY due partly to an increase in normal assets and improvement in somecustomers’ credit category
While risk-weighted assets increased, equity capital increased due to the accumulation of profits, and the capital ratio rose year onyear

1. Value and ratio of problem assets subject todisclosure (Kiraboshi Bank) (¥100 million, %)
2.50

2.70

2.19

84

68

8.73

2.11

1,194
1,002

3. Capital ratio (Tokyo Kiraboshi FG consolidated) (¥100 million, %)

8.38

8.09

8.25

YoY

1,045

1,025

[(20)]

76

73

Substandard
loans

Risk-weighted assets

875

1,051

873

892

[+837]

39,90439,066

YoY

35,684

Doubtful assets

32,638
57

58

95

58

2021/32022/32023/32024/3Bankrupt assets* Figures are after partial direct write-offs.

2. Credit-related costs (¥100 million)
2023/32024/3

A. Provision of general allowance forloan losses

(25)

(29)

(3)

B. Disposal of non-performing loans

46

48

+2

Of which, provision of allowance
for individual loan losses

42

41

(0)

C. Reversal of allowance for loan
lossesーーー

Credit-related costs (A+B–C)

20

19

(1)

YoY

2,852

2021/32,990

2022/33,163

2023/3

Capital

YoY

3,293

[+129]

2024/311©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Core OHR / ROE / Dividends
ROE continues to increase, as in the previous fiscal year, and the annual dividend per share for FY2024/3
has increased for the third consecutive year
1. Core OHR (Kiraboshi Bank) (%)

2. ROE (Tokyo Kiraboshi FG consolidated) (%)

Dashed line indicates core OHR
excluding dividends from equitymethod affiliates (special factor)

75.7

6.5

5.7

65.3
60.1

59.8

5.4

1.3
* Core OHR ＝

Expenses
Gross core business profit

2021/3× 100

2022/3

7.4

55.5

57.8

2023/32024/33.72021/32022/32023/3

Dashed line indicates ROE excluding
equity-method investment profit thatwas recorded in FG books (special
factor)2024/3

3. Annual dividend per share (Tokyo Kiraboshi FG) (yen)¥145

Payout ratio of 20% vs. initial plan of ¥22.0 billion net profit*[¥130]¥115

VS.
vs. Initial
Initialforecast

HoH
YoY

¥75

62.5

¥60
Year-end

30

¥¥+30
+30

80

¥¥+15
+15

3

consecutive years ofincreased dividends

45
52.5

Interim

[65]
65

30

30

2021/32022/32023/3

65

[65]
65

(Initial forecast)

2024/3

Finalized dividend
amountFor FY2025/3, forecast of ¥150
in annual dividends* Refers to profit attributable to owners of parent of ¥22.0 billion in theplan announced May 12, 2023
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

12Plan for the Fiscal Year Ending March 31, 2025
Tokyo Kiraboshi FG(consolidated)①

1
2

Key points in the plan for FY2025/3②

2024/32025/3(Actual)(Planned)

YoY

Kiraboshi Bank

Ordinary profit

329

321

(8)

Profit attributable to owners of parent

256

245

(11)

Kiraboshi Bank
(non-consolidated)

2024/32025/3(Actual)(Planned)

1

YoY

876

(43)

2

Net interest income

799
676
181
(58)
77
(530)

(15)
+11
(16)
(11)
(27)
+1

6

Non-interest income

7

Expenses

814
665
197
(47)
104
(531)

8

Net core business income

387

346

(41)

9

Credit-related costs

10

(50)
6

(31)
+42

63

28

(35)

12

Gains (losses) on bonds
Gains (losses) on stocks and othersecurities
Other non-recurring profit (loss)

(19)
(36)
(24)

(26)

(2)

13

Ordinary profit

369

304

(65)

14

Extraordinary profit (loss)

15

Income taxes

(1)
(65)

24
(100)

+25
(35)

16

Net income

303

228

(75)

Interest on securities

5

Other interest income

11(Planned)

303

228

YoY

(75)

Main factors for profit decrease919

42025/3(Actual)②Gross core business profit

Interest on loans and discounts

2024/3
Net income①

13Profit at Kiraboshi Bank (non-consolidated) to decrease mainly due
to the factors below (1–3)

Special factors(Dividends from affiliates)

Remarks
Special factors (see p. 4) are35

ー(35) not expected to be recorded

2

Credit-related costs

(19)

(50)

(31)

3

Income taxes

(65)

(100)

(35)

1–3
total

(101)

in FY2025/3
Costs were conservatively
estimated at the time of theinitial plan
Absence of decrease inincome taxes due to tax effectaccounting from the fiscal year
ended March 31, 2024 (see p.
5)Tokyo Kiraboshi FG
Building an income structure not heavily dependent on Kiraboshi Bank’s
earnings by providing solutions as a unified Group in accordance with thepolicies of the medium-term business plan

Profit of Group companies(* excluding Kiraboshi Bank)

2024/32025/3(Actual)(Planned)

(3)

15

YoY

+18

Note: For signs used in year-on-year comparison, “+” indicates increase in income, “( )” indicates decrease in income

13©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

<Reference> UI Bank Results
Progress made in reaching out to the younger generation, with which Kiraboshi Bank’s transactional relationship has been
weak. Acquired users from all over Japan, centering on the Kanto region.
Results of the fiscal year ended March 31, 2024

Deposit balance ¥403.4 billion

2023/3

Balance

Ordinary savings account /Term deposit accountbreakdown

2024/32024/3YoY
Of which,¥335.8¥403.4billionbillion+20.1

ordinarysavings％ term¥363.1 billion

YoY

accounts+51.8

accounts

Distribution of accounts by age group

Ordinarysavings
9.7%

Term
deposits
90.2%<News Releases>

2024/373,000 112,000

70s:
4.8%

billion

Apr. 2024: Mobile app overhauled
Apr. 2024: Launched financial instruments intermediarybusiness（Kiraboshi Life Design Securities Co., Ltd.）¥39.0 billion

Breakdown of deposit balance¥403.4

Number of ordinary savings accounts(number of customers)

2023/3

Of which,

depositsNew
customers
57.7%

Initiatives for expanding UI Bank services

Kiraboshi Bank
customers
42.2%

19 andbelow:
0.8%

80 andabove:
above:
0.9%
60s:
17.3%

20s:
12.0%

App overhaul

Launch of financial instrumentsintermediary businessDistribution of accounts by region
Hokkaido &Tohoku 4.8%

Kyushu &Chugoku & Okinawa 4.6%
Shikoku
3.4%
Kansai10.0%

30s:
112,000 17.7%
accounts

50s:
25.4％

％

40s:
20.6%

112,000

Hokuriku &Koshinetsu
3.3％

Tokyo
34.8%

accounts

Tokai 5.7%

Kanto
16.1%

Kanagawa
17.0%

14©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Giving our all, for TOKYO.

2. Medium-Term Business Plan Overview©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Review of Previous Medium-Term Business Plans
Achieved substantial cost reduction through system integration and branch network reorganization under the previous
medium-term business plan
Profitability greatly enhanced by business financing and main bank relationship building; capital adequacy, including preferredshare redemptions, remains a challenge
Merger of the three predecessorbanks (2018/5)

2018/32021/3

KiraboshiFirst Medium-TermBusiness Plan

2024/3

Kiraboshi
Second MediumTerm Business Plan

Core OHR

80.2%

75.7%
57.8%

Net income(Tokyo Kiraboshi FG consolidated)

Income¥25.6 billion¥3.6 billion¥4.1 billion

Profit from customer business(Kiraboshi Bank non-consolidated)¥25.0 billion¥1.4 billion◎〇

Kiraboshi Third MediumTerm Business Plan
(current plan)

Substantial cost reduction
through systems integration,
branch network reorganization,
streamlining of headquarters
operations and other measures

Further efficiency improvement

Improvement in profitability
through business financing,promotion of transactions formain bank relationship building
and other activities

Strengthening of profitability
Review of income structure△

Improve productivity throughconsolidation of branches forcorporate customers and use ofhighly specialized humanresources

Strengthen profitability ofGroup companies
Exit from equity investments

Profitability of Group
companies

Monetize digital strategy(¥4.9 billion)

Capital ratio

CapitalThree challenges

Cost(Kiraboshi Bank non-consolidated)

Performance
Performance appraisal
appraisal

2024/4(Tokyo Kiraboshi FG consolidated)

9.0%

8.7%

8.2%

△

Decline in capital ratio due toaccumulation of riskweighted assets

Enhancement of equity capital△

Redemption (Repayment) ofpreferred shares

Accumulate internal reserves tosecure funds for redemption(repayment) of preferred shares
Control risk-weighted assets
being mindful of RORA

16
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Previous Medium-Term Business Plan KPIs
Ⅰ． Branch reorganization and improvement of operational efficiency to free up management resources and improve customer convenience, human resources
development, and self-fulfillment
Strategy

Strategy (1)Branch strategy

Strategy (2)Improvement ofoperational efficiency
Strategy (3)Human resources
development

SDG targets

Specific action items

Related indicators(FY2023 targets)

2023/9 actual

Progresslevel

Transformation of all branches to next-generation branch
setup, self-service and paperless operations

Retail-focused branches: 34 offices

Retail-focused branches; 52 offices〇

Efficiency improvement in branch and headquarter
operations, maximization of customer contact points

Gross core business profit per head:¥32 million

Gross core business profit per head
¥37.7 million〇

New personnel system, strengthening of specialization,
reform of organizational culture

Make use of external talents

Mid-career hires: 126(Cumulative total from FY2021)

ー

Ⅱ． Personnel allocation and enhancement of financial and competitive strengths for providing high-value-added services and contributing to the sustainable growth ofsocietyStrategy (4)Resource allocation

DX

Fusion of “face-to-face and non-face-to-face,” “financial
and non-financial”
Digital Bank, IT support for older customers

Number of individual internet banking users:
400,000 users

Number of individual internet banking users:
370,000 users△

Centralization of routine office work and alliance marketing,
optimal allocation of personnel

Ⅲ． Provision of high-value-added services by enhancing financial strength and with invested management resources, contribution to the sustainable growth of society

Strategy (5)Services for the businessowner segment and older
adult segment

Life plan support, transactions with business owners
Inheritance, property management

Strategy (6)Promote main bankrelationship building

Strategy (7)Business succession, M&As, business financing, overseas
expansion, startup support, Group functions

Medical institutions

Support for medical institutions by specialized teams
Medical platform in cooperation with business partners

Enhancement ofcorporate governance

Establishment of GSuO (Group Chief Sustainability Officer)
position
Revision of credit policy, establishment of investment andloans policy

Assets under management of businessowner customers
Increase of 1,000 customers and ￥50.0
billionFinancing to customers with main bankrelationship*
Increase of 600 customers and ¥600.0 billion
in loan amount
Kiraboshi Package: 60,000 customers
Business succession support: over 1,000
customers
Support to medical institutions: over 400
institutions* Annual sales of ¥300 million or
more

Number of customers increased by 3,218
Outstanding balance increased by ¥55.9
billion◎〇Number of customers increased by 3,287
Loan amount increased by ¥1,114.9 billion◎◎

Kiraboshi Package: 60,000 customers〇

Business succession support 1,005 customers〇◎

Support to medical institutions 624 institutions

Achievement level of each indicator◎...Surpassed; 〇... Achieved or nearly achieved;△...More work needed©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

17

Purpose / Social Issues To Be Addressed
Defined our purpose: “Giving our all, for TOKYO” Resolving social issues in TOKYO with comprehensive solutions by theentire Group

Establishment of purpose

PurposeSocial issues to be addressed and our
responses

Realization ofa sustainable
society★ Support for SMEs in
improving their businessvalue★ Support for SMEs in theirdecarbonization efforts★ Medical (management)
support★ Support for the elderly andchild raising generation

Creation of
new social
values andindustries★ Group-wide contribution toregional development★ Start-up support★ Support for overseas
expansion from the TOKYO
marketResponses toissuesaccompanying
progress indigitalization★ Delivery of new financial
functionsSocial infrastructure (security
and safety)★ Financial services support
for the elderly, young
people, and foreigners★ Digital promotion via realchannels using sales offices

Giving our all, for TOKYO.

Management
Management Philosophy
Philosophy
To be a financial group for small and medium-sizedenterprise customers and individual customers in the Tokyo
metropolitan area that contributes to the development oflocal communities through comprehensive financial services

KiraboshiKiraboshi Philosophy
Accomplish the goals of contributing to society, seeking
Philosophy

growth of the organization, achieving self-fulfillment andrealizing one’s own happiness

Principles of action guideline for“Kiraboshibito”
People who have high aspirations
People who always think “how it can be done”
People committed to results and who continuously
take on courageous challenges

FuturevisionComprehensive service businessthat is also strong in finance

Kiraboshi Group’s collective
efforts to provide integrated
solutionsand resolve TOKYO’s
challenges

18©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Brand Statement
From June 2023, the Kiraboshi Group will publicly announce a brand statement for each priority issue(2) Businesssuccession(1) Declaration(3) Start-up support(4) Sustainability(5) Digital support

19©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Management Targets
Aim for FG consolidated profit of ¥30 billion and FG consolidated ROE in the upper 7% range in FY2026 by improving theGroup’s profitability

Accumulated retained earnings, with a capital ratio of 8.3% after redemption of preferred shares

FY2023

FY2026
Strengthening of profitability and review of income structure

Net income(FG consolidated)

Profit of Group
companies(FG consolidated)

25.6 billion¥(¥0.3 billion)

30.0 billion¥

5.0 billion¥* excluding Kiraboshi BankROE
(FG consolidated)

7.4%

High

7% range■ Group company strategy➢ Strengthen integrated solutions capability applying digital, solutions and otherbusinesses➢ Build a business model that does not depend on Kiraboshi Bank’s loan income■ Corporate customer strategy➢ Strengthen various solutions functions➢ Provide hands-on support for equity investees■ Retail customer strategy➢ Provide consultation-based comprehensive services➢ Respond flexibly to customer needs through diverse channels■ Digital strategy➢ UI Bank to promote digital-driven retail areas (deposits/loans)➢ Strengthen functions and services as a platform for new businesses

Further efficiency improvement

Core OHR(Kiraboshi Bank nonconsolidated)

57.8%

Mid-

50% range■ Branch strategy➢ Optimum personnel allocation through consolidation of branches for corporate
customers and expansion of offices specializing in retail customers➢ Headquarters and sales offices working together to provide high value-added
services

Enhancement of equity capital

Capital ratio(FG consolidated)

8.2%

8.3%

■ Financial strategy➢ Accumulation of internal reserves to secure funds for redemption (repayment) ofpreferred shares➢ Risk-weighted asset control that is mindful of RORA

20
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Transformation of Income Structure
1

While controlling assets, particularly loan balance, transform business model to ensure a certain level of fee income

2

Equity investment and hands-on support to respond to the needs in business succession and business transfer

3

Respond to customers’ diverse needs with the collective strength of the Group and seek improvement of Group
companies’ profitability
Previous Medium-Term Business Plan (FY2021–FY2023)

Current Medium-Term Business Plan (FY2024–FY2026)(in ¥100 million)

FundincomeCorporate
customerbusiness(14)

FG
consolidated
profit(0)Fund income(74)
OthersFG
consolidated
profit(27)+21

Others

300

(30)
(26)

256

+53

＋52

Interest on loans
and discounts

Profit ofGroupcompanies

＋38
＋201

Profit of Group
companies

1＋64

Interest on loans
and discounts

3

2

Credit-related
costs

Credit-related
costs

Corporate
customerbusiness

FG consolidated
profit41
FY2020

FY2023

FY2026©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

21

Giving our all, for TOKYO.

3. Review of Income Structure©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Group Strategy 1
Unified Group response to customer needs
Improving Group profitability, particularly in the financial, digital, and solutions businesses

Group company profit plan (excluding Kiraboshi Bank)(in ¥100 million)

FY2023

FY2026

(3)

50

+53

+8

+1

+38

50
4

Promotion /Overseas Business11

Solutions Business

11

Digital Business

24

Financial Business+6(3)
FinancialBusiness

Digital Business

Solutions
Business

Promotion / Overseas
Business

FY2026

24

11

11

4

FY2023

18

(27)

3

3

* See p. 45 for details about Group
companies engaged in each business23©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Group Strategy 2: Provide Solutions to Customer Issues
Providing high value-added solutions to customer issues through Group-wide efforts (1. Corporate Customer Strategy, 2. RetailCustomer Strategy, 3. Digital strategy)
Enhancing the convenience of daily life by building a digital platform● Pivot to a solution business model withasset control● Provide financing and hands-on support tomeet clients’ M&A and businesssuccession needs

Group company businesses and corresponding
customer segments
High net worth
individuals

RetailGroup companies
business

2. Retail Customer Strategy● Offer life plan support for individual
customers● Unified consulting-oriented business withcorporations and retail customers (Expand
transactions with estate heirs and deepentransactions with business owners）

Promotion /Overseas
Business● Transition Kiraboshi Bank’s retail
operations to UI Bank, improve customer
convenience● Provide embedded financial services
with BaaS functionality

DigitalBusiness

Kiraboshi
Bank

FinancialBusiness
3. Digital Strategy

Digital Business

SMEs
Customersegments

1. Corporate Customer Strategy

Solutions
Business

Providing digital solutions with
unparalleled convenience and costcompetitiveness

Solutions Business
Providing high value-added solutions tocustomer issues through Group-wide
efforts

Financial BusinessSupporting customer needs with a focus
on financial businesses such as leasing,asset management, and financing

Promotion Business /Overseas BusinessSupporting promotions contributing tosales channel expansion* See p. 45 for details about Group
companies engaged in each business©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

24

Corporate Customer Strategy 1: Loans
Business financing balances execution, repayment, and distribution for an effective asset cycle
Improving yield and profitability of non-business financing loans by replacing them with highly profitable assets (emphasizing RORA)
Shifting to an income structure that is not heavily dependent on business financing by enhancing the Group’s strength
Loan balance at end of period(Kiraboshi Bank + UI Bank)

48,33350,470470

Loan interest and interest rates(Kiraboshi Bank)(in ¥100 million)

51,306

1,306

52,222

2,222(in ¥100 million, %)Business
Financing

3.3%

3.6%

3.7%

3.8%

Loan yield(As a whole)

1.3%

1.3%

1.3%

1.4%

665

676

680

686

472

466

451

439

Non-businessfinancing
loans

192

210

229

247

Businessfinancing

FY2023

FY2024FY2025

FY2026UI Bank Co., Ltd.

2
6,740

6,390

5,864

Individuals(consumption)

43,609

5,907

6,248

6,493

6,510

Of which,businessfinancing

Corporate services (Kiraboshi Bank) + Group income(in ¥100 million)
82
3
7
12

72

74

10

12

M&A fee

17

Consulting fee

25

Non-businessfinancing

20

Businessfinancing

63
8
17

Group

43,259Corporations, etc.

41,377

44,135

Kiraboshi Bank

6,953

FY2023

FY2024FY2025

FY202658

15

25

Results and plan for execution* and distribution
26¥189.0 billion¥210.0 billion¥210.0 billion¥210.0 billion

Execution*¥83.2 billion¥80.0 billion¥50.0 billion¥50.0 billion

Distribution

FY2023

FY202420

FY2025

Kiraboshi
Bank

14

FY202625* Execution amount for business financing©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Customer Strategy 2: Building a Scheme for LBO Market Development
Establishing new fund with various financial institutions in the LBO market in collaboration with new external funds
Accepting LP investment and human resources from regional financial institutions in the new fund and creating a scheme todevelop the LBO market

Overview of collaboration scheme

Consulting and financing (debt/equity) for business succession and business transfer needs

Underwriting financing and distributing to regional financial institutions, etc.

Building a scheme for LBO market development
Illustration of scheme[Issues]
External collaboration fundLP investment

Regional financial
institutions

LP
investment
Loan[Solutions]

Joint GPGP

EXIT
IPO/Trade sale・ Lack of expertise in business finance screening
・ Lack of specialized personnel in businessfinancing

Cooperative fundKiraboshi Bank・ Training human resources accepted fromregional financial institutions
・ Sharing expertise through joint management

Fostering and developing the LBO market

26©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Customer Strategy 3: Equity Investment Business
By addressing business succession needs, the balance of equity investments and the number of prospective clients increased during
the previous medium-term business plan period
Yield is expected to increase to 6.2% during the period of the current medium-term business plan

Kiraboshi Bank PE fundinvestment amount (LP)(in ¥100 million)

Investment limit
2,400

1,700

PE fund yield[Three-year average yield]

2,400

Of which,balance ofcommitted
capital
Total: 1,200

Total: 1,200

366

385

5.1%

4.9%

2023年度FY20232024年度FY2024

5.6%

2025年度FY2025PE fund income

6.2%

2026年度FY2026(in ¥100 million)

86

1,221
Total: 1,000

338
Total: 668

333
320

FY2023Funds
administeredby others

361

500

300
FY202440
54

Externalcollaboration
fund

33

FY202627

FY2023

25

25

Funds
administeredby others

22

21

Externalcollaboration
fund

FY2025

FY202625

14
FY202525

Funds
administeredby Kiraboshi
Capital

15
6

500
348

315

72

Funds
administeredby Kiraboshi
CapitalFY202427©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Customer Strategy 4: Equity Investment Business
In PE fund investments, the balance of funds administered by Kiraboshi Capital as GP increased
Providing hands-on support as a unified Group for start-ups and SMEs to increase their corporate value
Kiraboshi Bank PE fund investment amount (LP)Funds administered by Kiraboshi Capital(in ¥100 million)(in ¥100 million)
2,400

2,400

Investment
limit

652

672

320

338

700

700

Investment
limit

1,700
1,221
1,200

1,200

1,000

2024年度FY20242025年度FY2025

2026年度FY2026

Funds with investments as of March 2024
Breakdown of funds invested

Balance ofcommitted
capital (bookvalue)

Balance ofcommitted
capital (bookvalue)

668

2023年度FY2023385

366

FY2023

FY2024FY2025

FY2026

Funds managed as of March 2024
Investment limit

Number of funds

Name

Description

Investment limit● Venture fund6

¥1.2 billion● Yume Kagayaki Fund 1

Buyout investment¥2.6 billion● Reconstruction and debt funds

5¥2.6 billion● Yume Habataki Fund 1

Start-up investment¥2.0 billion● Buyout fund66

¥39.4 billion● A&KC Mezzanine Finance 1

Mezzanine finance¥22.5 billion

6¥2.7 billion● Tokyo Sparkle

Engagement investing● Others (infrastructure)¥20.0 billion● A&KC Medical No. 1

Medical fund¥3.0 billion● KCP Equity Assist No. 1

Equity investment (minority)¥8.0 billion● Yume Habataki Fund 2

Start-up investment¥4.0 billion● KCP Buyout No. 1

Buyout investment¥3.0 billion(

Kiraboshi Capital Co.,Ltd.
Kiraboshi Consulting Co.,
Ltd.

)

9

¥62.9 billion● Other (based outside Japan)

5¥6.4 billion● Others

22¥6.9 billion

Total 119 funds

Total¥122.1 billion● Others

8

Total¥65.2 billion©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

28

Retail Customer Strategy 1
Strengthening the balance of assets under management and commission income from retail customers by establishing a sales
structure that integrates sales offices, headquarters (PB Promotion Division, WM Office, etc.), and Group companies (Kiraboshi
Life Design Securities, etc.)
UI Bank to promote personal loans in the future

Balance of assets under management

Commission income from retail customers(in ¥100 million)(in ¥100 million)

8,407

7,432
7,431
7,078

2,844

4,587

FY2023
2023年度

7,736

7,368

3,761

3,230

3,023

4,646

4,506

4,345

FY20242024年度FY2025
2025年度Kiraboshi Life
Design Securities
Co., Ltd.

34
33
12

16

Kiraboshi Bank

21

FY2026
2026年度Balance of mortgage loans

FY2023
2023年度

6,297

6,299

0

209

6,299
529

6,090

5,770

2,751

6,299
1,025

2,751

2,831

FY2024FY202519

18

17

Kiraboshi BankFY20242024年度FY2025
2025年度FY2026
2026年度5,274

FY2026

Consumption/specific-purpose(in ¥100 million)
loans

2,831

204
217

240

UI Bank

Kiraboshi
Bank

2,751

20

UI Bank

2,511

189

2,111

FY2023
2023年度FY20242024年度FY2025
2025年度

210

216
217

189

720

1,727

FY2023

Kiraboshi Life
Design Securities
Co., Ltd.

(in ¥100 million)

1,104

6,297

19

22

Investment real estate loans*(in ¥100 million)

39

37

35

KiraboshiBank

FY2026
2026年度* These are not included in loans for individuals (consumption) in the “Loanbalance at end of period” on p. 25 because they are business loans.

56

92

UI Bank

124

Kiraboshi
Bank

184
154

FY2023
2023年度FY20242024年度FY2025
2025年度FY2026
2026年度29©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Digital Strategy 1: Developing Services that Integrate Digital/Real and
Financial/Non-financial
Providing comprehensive services that integrate digital/real and financial/non-financial services in line with customer needs
Migrating transactions to digital services (UI Bank/Kiraboshi Tech) using Kiraboshi Bank’s real locations and in-person events

Digital services

Real contact points

Needs

Non-face-to-face, convenience (transactions not constrained by place ortime), functionality

Face-to-face, consultation, consulting

Customers

Retail and corporate customers who value the convenience andfunctionality of digital technology

Retail and corporate customers who value face-to-face consultation

Functions

Nationwide, 24 hours
a day

Instant and easy

Non-financial
integrations

Individual consultation service

Financial[Digital services]
UI Bank Co., Ltd.
Kiraboshi Tech, Inc.

Digital[Real contact points]
Kiraboshi Bank, Ltd.
Kiraboshi Consulting Co., Ltd.
Utilizing Kiraboshi Bank’s real
locationsReal

Nonfinancial* UI Bank and Kiraboshi Tech services utilize Kiraboshi Bank’s real locations

30©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Digital Strategy 2: Developing Comprehensive Services that Integrate Financial/Non-financial
Provide BaaS financial services in collaboration with regional business partners to roll out comprehensive services integrating
financial/non-financial that help resolve social issues

Expanding collaboration with businesses in otherindustries

Providing lifestyle services (BaaS) integrating
financial/non-financial elements to businesses indifferent industries

Kiraboshi Group Digital Platform

Community-based business partners

Loan
Deposits/foreignexchange

PointsFinancial
Assetmanagement

Credit/debit
cards

functionsEmbeddedfinancial
functions(BaaS)

Kiraboshi Network

Multi-industry network

Infrastructure

RetailConstruction
businesses

Health care

Serviceproviders

Municipality

Life/non-life
insurance

LaLaPay Plus(wallet)Integrated application of Group services

Local business

Financial
functionsEmbeddingfinancial
functionsApps forbusinesses

Payment, loan, and other financial
functions embedded in business partners’apps* BaaS (Banking as a Service): Refers to a non-financial business entity providing financial services integrated with its own services by linking to a bank’s API* We entered into a business alliance agreement with Mitsubishi Corporation for a contract period of one year. After a one-year business alliance, the contract was terminated when the business modelfor embedded finance was established; will be entering the execution phase going forward©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

31

Digital Strategy 3: System and Key Measures to Promote Digital Strategy
Service delivery system integrating digital/real elements (digital-contact customers can also consult face-to-face utilizing Kiraboshi Bank locations)
Service delivery system integrating financial/non-financial elements (improved usability of UI Bank apps, launch of BaaS offering)Group DX promotion structure (for greater business productivity and optimal personnel allocation)

Roadmap for system development

FY2024FY2025

FY2026✓ Flexible support throughcombined digital and realchannels

Promoting the digital shift
Business
services

Upgrading consultation
functions at branches (Kiraboshi
Bank)✓ Strengthening face-to-faceconsultation/consulting

Corporate deposit
accounts (UI Bank)✓ Providing high-quality
services integrating
financial/non-financial
elements

Launch of BaaS offering
Launch of new loan support system(linked to CRM system)

Evolution/DX
promotion✓ Increasing productivity andcreating sales opportunities

Center/system unification, CRM
system integration
CRM Group company integration(ad-hoc from FY2023 onward)

Desired state✓ Providing optimal solutions✓ Providing high value-added
services as a unified Group

Data marketing measures using CRM

Cultivate and enhance talent capable of creating and promoting digital business, enhance developer pool, expand development
in-sourcing✓ In-sourcing development✓ Maximizing corporate value

32©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Digital Strategy 4: UI Bank Strategy
Seeking to add active users by shifting transactions from Kiraboshi Bank to UI Bank and acquiring new customers
through BaaS deployment, etc.

Number of UI Bank customers

BaaS customers
300,000
For details, see p. 31,“Digital Strategy 2”

New customers
150,000

New customers
70,000Transition from KiraboshiBank
30,000

FY2023

Transition from
Kiraboshi Bank *250,000

FY2026

Account holders: 112,000

Account holders: 700,000・Migrated from Kiraboshi Bank:
36,000・New: 75,000・Migrated from Kiraboshi Bank: 250,000
・New: 150,000
・BaaS: 300,000* Shifting Kiraboshi Bank customers to UI Bank through in-branch and workplace activities at Kiraboshi Bank sales offices

33©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Digital Strategy 5: UI Bank Integrated App
Providing a one-stop app for Group services integrating the Group’s retail financial services
Providing financial and non-financial services integrated into everyday life

Customer

ChannelServices

Brand concept“Growth for my assets”*1

UI Bank customers

Deposits/foreign exchange

Asset management
instruments

Kiraboshi Bank customers

Life/non-life insurance
products*2
Kiraboshi Tech customers
One-stop channel
for Group
customers

Integration ofGroup financial
services

Kiraboshi Life Design
Securities customers

Personal loans
Secured loans*2

LaLaPay Plus*2(wallet)Kiraboshi JCB customers

Credit/debit cards*2
Providing services tooperating company
customers

BaaS partner customers

Providing services
from Fintech
companies andothersNon-financial services*1 “My assets”: A generic term for a variety of assets necessary for each individual, including not only tangible assets such as money and a house, but also intangible assets such as memories and experiences needed to become theperson they want to be*2 Scheduled for phased launch from FY2024©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

34

Digital Strategy 6: UI Bank Management Strategy
Retail tier is handled digitally, centered on UI Bank; going forward, corporate client transactions will be considered utilizing
partnerships with other industries
Going forward, the UI Bank will lead promotion of personal loans, projecting loan balance of approx. ¥220 billion in FY2026
Desired state[Individuals]

UI Bank Co., Ltd.
Kiraboshi Bank
customers

Mainly financial assets: Under ¥50 million
Mortgage loans, investment loans, unsecured
loans[Current status: Annual amountexecuted by Kiraboshi Bank]

Shifting transactions

Mortgage loans: ¥56 billion
Investment real estate loans:¥41.1 billion
Unsecured loan: ¥6.6 billion

UI deposit/loan balance(in ¥100 million)[Corporations]

Expanding digital retail

Mainly annual sales of less than ¥300 million
Small business lending, factoring

Loan interest income(in ¥100 million)
Above: Interest income on loans for UI Bank customers

Left: Deposit balance
Below： Interest income on loans for Kiraboshi Bank

7,800
Right: Loan balance

7,000
6,000

13

26

1,306
470
4,004

2
3,400

4,013

4,090

2,222

2

Individuals (fromKiraboshi Bank)

2,900
Loans for Kiraboshi
Bank

FY2023

FY2024FY2025

FY202627

FY2023
2023年度30

FY20242024年度33
28

FY2025
2025年度FY2026
2026年度35©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Digital Strategy 7: Kiraboshi Tech
Increasing the number of attendance registrants for salary prepayment services to 900,000 in FY2026 to increase sales andsecure a pool of users for new services
Developing new services to offer to the user pool developed by the salary prepayment service
Providing platform services for workplaces, etc. using mobile payments

Number of salary prepayment
service registrants(in ten thousands of people)

Mobile payment platform services for workplaces

90

Digital expense
settlement

Cashless payment

8070

Cardless ATM
withdrawals

Digital incentives
64

Overseas
remittance*

Person-to-person
remittance

Payment collection
system*Bank accountrecharging

FY2023

FY2024FY2025

FY2026

Gig worker matching
service*Finance* Scheduled for service launch fromFY2024

Group synergies

2. Introducing Group company services to employees ofcompanies with prepayment contracts
3. Deploying Kiraboshi Tech services to corporate
customers of Kiraboshi BankTokyo Kiraboshi Financial Group

Serviceprovision

1. Providing Group company services to companies withprepayment (salary prepayment service) contracts

Employees

Service use

Companies withprepayment contracts
Service use

Employees

36©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Branch Strategy
Streamlining branches according to regional characteristics, reducing number of locations from 105 to 85(in FY2026: 74 less locations vs. time of merger)
Number of locations

159
offices105
offices100
offices

Previous medium-termbusiness plan95
offices85
offices

Current medium-term business plan3
Sales
offices

159
105

FY2018 (time of merger)

FY202313

Branches

72

Sales
offices

97

FY2024FY2025

FY202637©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Branch strategy 2
Reviewing the branch system with the aim of providing high value-added services through high-quality customer contact. In parallel,
strengthening human resources development such as on-the-job training by consolidating facilities
Loan handling locations were consolidated from 64 to 13 (-51 locations) to provide more specialized solutions

Sales offices(Specializing in
corporate customers)✓ Full banking✓ Specializing in
corporate sales

Sales Unit
A

[System]
Corporate staff ✓Retail staff ✓Branch sales ✓Sales offices(Retail-focused)✓ Partial corporate
consolidation[System]
Types I to III[System]
Corporate staff ✓Retail staff ✓Branch sales ✓(by regional characteristics,
see table below)

Staffed subbranches
offices* 64 loan handling locations
Sales offices (For corporate and retail customers): 50
Sales offices (Specializing in corporate customers): 2
Sales offices (Retail-focused: type I): 12…

…

Sales offices(72 offices)* Retail-focused branch types

6
offices✓ Loan handling
locationsconsolidated into 13
branch companies

Branches

Type I

Type II

Type III

Corporate staff

〇

×

×

Retail staff

〇

〇

×

Branch sales

〇

〇

〇

Number of offices

12

23

12

Total: 105 locations…

…

Branch Z

Sales offices(For corporate andretail customers)

Branches(13 offices)

Sales Unit
C

47
offices

Branch Y

2
offices

Branch X

50
offices[Post-branch company system transition]
FY2026

Sales Unit
B

[Present]
FY2023✓ Establishing sales
units in branchcompanies✓ Sales personnel areconsolidated fromeach branch to thesales unit
✓ Onlydeposit/exchange
and other teller
services are handled✓ Sales information sent
up to branchcompanies

Total: 85 locations
38©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Market Investment
Restructuring portfolio, mainly bonds, from a medium- to long-term perspective
Strengthening investment in Japanese and other government bonds, municipal bonds, etc. and securing carry income
mindful of RORA
Controlling interest rate risk by adapting allocations to each situation

Market environment

Securities duration/balance(in years)

Japan returns to a world with interest rates

6.7
6.0
4.5

The West shifts to a phase of rate cuts

Japanese
bonds

5.9

3.9
2.8

2.2

1.4

Assumption of economic recovery and solid
equity performance

Foreignbonds(in ¥100 million)

Rebound/growth11,60011,6002025年度FY2025

2026年度FY2026

PE funds, etc. 10,892

Investment policy

10,055Investment trusts
Stocks

9,600
9,227
8,558

Risk
category

Investment policy

Foreignbonds

Japanese Restructuring the portfolio while monitoringbonds
monetary policy normalization trends, etc.
Foreignbonds

Restoring balances to a certain degree by
ascertaining the timing of a switch tointerest rate cuts, etc.

Stocks,etc.

Improve valuation gains/losses by buying
and selling with close monitoring of themarket environment

Japanesebonds

2018年度FY20182021年度FY20212022年度FY2022

2023年度FY20232024年度FY202439©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Overseas Strategy
Connecting SMEs to overseas markets to resolve issues of business succession and expansion
Supporting overseas companies entering the Japanese market and contributing to the revitalization of TOKYO
Matching in the Southeast Asian market

Joint venturesubsidiaries
Investment

Matching support
・ Consulting forentering theJapanese market
・ Finance

Matching support

Growth/enhancement ofcorporate value

Royalties

Southeast Asiancompanies

Mature technology/service

Japanese SMEs

Japanese
subsidiaries ofoverseascompanies(Issues)・ Declining populationand shrinking market
・ Business successiondifficulties

Re-growth/enhancement ofcorporate value

Matching in the Japanese market

Investment
Machinery
manufacturing, agrifood/retail, etc.

Kiraboshi Bank, Ltd.
Kiraboshi Consulting Co.,
Ltd.

Investment

Collaboration

Partner financial institutions, government
agencies, overseas funds, etc.

40
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Start-up Support
Support for commercialization, growth, and overseas expansion of domestic startups; support for overseas start-ups entering theJapanese market
Supporting new business creation (open innovation) with start-ups and large/medium-sized companies

Start-up support

Start-up support measures

Providing problem-solving and needs-based support by leveraging our network of
domestic/international partners and large/medium-sized companies

Illustration of support by growth stage

Domestic/international partners

Seed

Venture capitals, municipalities,
universities, etc.

Entering
overseas/Japanesemarkets

Start-ups

Financial support, BM mediation

MiddleLate

Commercialization
supportCollaboration
Kiraboshi

Early

Large/mediumsized companies

Open innovation support

Financial support

Specific efforts to support start-ups
Growth support● Support for businessexpansion● Cultivation of start-ups● Identification ofpromising start-ups
・ Monthly Kiraboshi Pitch events・ Cooperation and participationin other companies’ pitch
events・ Networking with start-up
supporters

・ Implementation of the
KicSpace Accelerator
Program・ Reverse pitching with large
corporations*・ Business matching

Kiraboshi Bank

Kiraboshi Capital* Reverse pitching with large
corporations: Pitching to startups or large/medium-sizedcompanies for the purpose ofsolving problems or developing
new businesses for large
companies

41©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Giving our all, for TOKYO.

4. Corporate Value Enhancement Measures,
Capital Policy©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Desired State in 10 Years
ROE for FY2023 improved to 7.4%. Seek to record ROE exceeding cost of equity, increasing corporate value
Aim to improve profitability, efficiency, and soundness in a balanced manner, and to achieve an equity ratio of at least 10%, ROE of atleast 10%, and PBR of at least 1 times in 10 years

Changes in PBR, ROE, and capital ratio

Ten years from now (medium- to long-term target)
May 2018
MergerCurrent medium-term plan period✓ Enhancing Group profitability

FY2024–FY2026

Strengthening
profitability

FY2018–FY2020

Cost reductions
9.05%✓ Providing solutions to management issues
involving equity investments

Enhancement ofequity capital

FY2021–FY2023

8.73%

8.25%

Capital ratio✓ Increasing fee and capital income without relying
on assets

8.30%

Capital ratio

10% or more

7.41%

ROE

High 7% range

Cost of equity: 6% to 7%

ROE

10% or more
PBR
1.28%

0.26 time
FY20171.37%

1 time or more

0.47 time PBR
0.17 time

FY2020

FY2023

FY2026

FY203343©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Value Enhancement Measures 1: Initiatives for Improving PBR
Aim to improve ROE by strengthening profitability and controlling risk-weighted assets, as well as to improve PBR by reducing
the cost of equity, etc.
Breakdown of PBRBreakdown of ROE

＝

PBR

ROE

×

PER

ROE

＝

RORA

×

Financialleverage

Logic tree for PBR improvement
Strengthening profitability(See (1) at right)

RORA
ROE

Net income
Risk-weighted assets

Financialleverage

PBR

Cost control(See (2) at right)

Risk-weighted assets(Net assets at the beginning of theperiod + net assets at the end of
the period) / 2

Cost of equity(Cost of equity minus
expected growth rate)

Expected
growth rate

・ Optimal allocation of management resources
・ Ensuring appropriate balance of risk and return

P.45(2) Cost control
・ Reducing base costs
・ Allocating necessary DX investments and expenses in growthareas

Risk-weighted asset control(See (3) at right)(3) Risk-weighted asset control

Enhancing shareholder returns(See (4) at right)
Optimal risk capital allocation(See (1) and (4) at right)(4) Capital policy and enhancing shareholder returns

・ Switch from low profitability to high profitability assets
・ Allocating assets to community revitalization projects

・ Accumulating internal reserves, capital allocation
・ Striking a balance between capital soundness, shareholder
returns, and preferred share redemption

Reducing cost of equity✓ Diversification and evolution of the businessportfolio✓ Sustainable and stable earnings (reduced beta)✓ Reducing business risk through asset control

Increase in expected growth rate

✓ Contributing to local communities and evolving
sustainability management✓ Disclosing growth strategies✓ Enhancing human capital management

PER1(1) Business portfolio evolution

P.46

P.47
P.48

P.49
P.50

44
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Value Enhancement Measures 3: Business Portfolio (Excluding Kiraboshi Bank)
Introducing a business valuation indicator reflecting the cost of equity: Business value = Profit–(Allocated risk capital × Cost ofequity)Building an optimal Group business portfolio through appropriate allocation of management resources
During the current medium-term business plan period, we will improve business value in the areas of digital, finance, andsolutions
Business value

Digital BusinessHigh

UI Bank Co., Ltd.
Kiraboshi Tech, Inc.
Financial Business

Financial BusinessTokyo Kiraboshi Lease, Inc.

Developing comprehensive
consulting services
Solutions Business
Promotion /Overseas
Business

Monetizing digitalstrategies

Kiraboshi Capital Co., Ltd.

DigitalBusiness

Kiraboshi Servicer Co., Ltd.

Kiraboshi Life Design Securities Co., Ltd.

Kiraboshi Insurance Agency CO., LTD.
Kiraboshi JCB Co., Ltd.
Kiraboshi Credit Guarantee Co., Ltd.

Risk capitalHigh

Yachiyo Credit Guarantee Co., Ltd.
Solutions Business
Kiraboshi Consulting Co., Ltd.
Kiraboshi System, Inc.
ITC Co., Ltd.
Kiraboshi business office service, Inc.
Promotion / Overseas Business
Be.Brave, Inc.
Kiraboshi Business Service Co., Ltd.
Kiraboshi Business Consulting Shanghai Co., Ltd.

FY2023

FY2026* Circle size represents size of profit by business (dashed circles indicate negative profit values)

StarBridge business consulting (Beijing) Co., Ltd.
KIRABOSHI BUSINESS CONSULTING VIETNAM
CO., Ltd.
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

45

Corporate Value Enhancement Measures 4: Cost Control
Core OHR will decline from 57.8% in FY2023 to the mid-50% range in FY2026 due to cost control
Personnel expenses are increasing due to higher base pay and other factors to build a strong revenue baseContinuing to improve branch efficiency, selectively addressing investments in necessary growth areas
Core OHR/costs(in ¥100 million, %)
60.4%
60.5%

Core OHR

57.8%

57.7%

Middle-50%

Main change factors(FY2023 → FY2026)

Taxes

Nonpersonnel
expenses(Upfront
investment)

Personnel
expenses

531

530

525

524

50

48

44

43

251

260

255

250

(42)

(27)

（17）

(22)

229

222

226

230

FY2023

FY2024FY2025

FY2026

Nonpersonnel
expenses

Personnel
expenses

1. Business
management feesand branch
consolidationcosts
8

2. Effects fromprior
investment
10

3. Increase in base 4. Decrease in
number ofpay, etc.
employees, etc.
24
23

46
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Value Enhancement Measures 4: Risk-Weighted Asset Control (Overview)
Strengthening profitability by expanding fee business across the Group while controlling risk-weighted assets to improve RORA
Maintaining a certain level of amount executed and fees for LBO/other business financing, while distributing to other companies as
well

FY2020–FY2023(in ¥100 million)

FY2024–FY2026(in ¥100 million)
RORA
0.67%
[+0.03%]PE funds+1,751Business loan
+3,297

PE funds＋394

Business loan
+6,085

Others+1,360RORA
0.64%[+0.52％]

RORA
0.64%

Others(658)
Securities, etc.
(167)

Due to higher risk weights fromBasel III, despite flat loanbalances

Securities, etc.
(573)

RORA
0.12%
Riskweighted
assetsRiskweighted
assets39,90439,904FY2023

FY2023

Riskweighted
assets44,127

Riskweighted
assets32,638FY2020

FY202647©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Value Enhancement Measures 6: Risk-Weighted Asset Control (By Category)
Improving RORA and increasing corporate value through asset control by risk category
Non-recourse loans(*1) and LBO financing(*2) for SMEs shifting to proprietary transactions through main bank relationship building
Strengthening relationships by promoting complex transactions(*1) Non-recourse loans (NRL): Loans whose repayment source is solely the cash flow generated by aspecific business or asset(*2) LBO financing: Acquisition of companies and businesses using debt financing

RORA

Category 1
Low ROA, high RORA
Category 2

Maintaining a strategic focus on loans to SMEs,
unsecured/apartment loans, and housing loans,using complex transactions to build main bankrelationships and enhance overall profitability

Category 2
LBO financing

High ROA, low RORA (deterioration)

Category 3

Unsecured/apartmentloans

NRL and LBO have higher RORA absolutevalues, although RORA declines as risk
weighting increases

Fund equity
investment

Category 3

Category 1

High ROA, high RORA

Non-recourse loans

Fund equity investments improve RORA due tohigher capital gains exceeding the impact ofincreased risk weighting

Mortgageloans

Category 4

For SMEs
For large
corporations
Category 4

Low ROA, low RORA

FY2023* ROA: (Annual interest + Commission income) / Loan balance
RORA: (Annual interest + Commission income) / Risk-weighted assets* Circle size represents balance size

FY2026ROA

Reducing balances for some large corporationtransactions where there is no deeper businessexpected improves RORA

48
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Value Enhancement Measures 6: Basic Capital Policy
Basic policy: Ensure a “sound capital ratio” and maintain a strong balance between “use of capital to enhance profitability” and“return of profits to shareholders”
During the period of the current medium-term business plan, we are building up internal reserves to secure funds for redemption ofpreferred shares
Sound capital ratio

Utilizing capital to improve profitability

Shareholder returns and preferred share redemption
scenarios

Accumulation of internal reserves
Appropriately allocating capital and optimizing businessportfolio

Controlling and replacing assets while being mindful of
RORA
Earning capital gains from hands-on support for equity
investees

Targeting payout ratio of around 20% after
redemption of preferred shares+2.10%(1.40%)+2.14%(0.24%)(0.85%)
FG
consolidated
capital ratio
FG
consolidated
profitIncrease in riskweighted assets,
etc.
(Equity
investments, etc.)(0.33%)
Group strategies /DX investments

Increase in riskweighted assets,
Group strategies /etc.
DX investments(Equity
investments, etc.)(1.01％)

FG
consolidated
capital ratio

FG
consolidated
capital ratio

Dividends
8.73%
8.25%

FY2020(0.83%)FY2023FG
consolidated
profitDividends /preferred shareredemption
8.30%

FY202649©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Capital Policy (Preferred Stock, Dividends, Cross-Shareholdings)
Established a policy for preferred shares in the current medium-term business plan
Our shareholder return policy targets a payout ratio of around 20% even after redemption of preferred shares, and securing acapital ratio of 8.3%. We aim to reduce cross-shareholdings by about 40%

Approach to preferred shares
After assessing the Company’s business environment and with consideration for the status of internal reserve accumulation and capitalratio,⚫ with respect to First Series Class I preferred shares (*1),
Redeem the shares over the period from FY2026 to FY2029, and aim to complete redemption⚫ with respect to Class II preferred shares (*2),
Redeem the shares in FY2026 and FY2028, and aim to complete redemption

Consider completing redemption ahead of schedule depending on market environment(*1) Sumitomo Mitsui Trust Bank, Limited ¥15 billion (*2) Tokyo Metropolitan Government ¥40 billion

Policy on shareholder returns
Basic policy is to make continuous and stable dividend payments. For the period covered by the current Medium-Term Business Plan
(FY2024–FY2026),
target payout ratio of around 20% even after redemption of preferred shares, and secure capital ratio of 8.3%

Reduction in cross-shareholdings (listed shares)
During the period covered by the current Medium-Term Business Plan (FY2024–FY2026), aim to reduce cross-shareholdings by around
40% in terms of book value(FY2023 book value balance approx. ¥15 billion → FY2026 book value balance approx. ¥9 billion)

50©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Giving our all, for TOKYO.

5. Measures for Further Efficiency Improvement
and Optimal Management Resource Allocation©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Resource Allocation: Management Resource Allocation
Conducting personnel allocation and human resources development in strategic areas. Improving productivity through optimal
allocation of management resources across the entire Group
Digital personnel: Increase pool by 300

Streamlining headcounts for FG and Kiraboshi Bank through branch reorganization, DX, etc.

FY2023
FG total(including subsidiaries)

Headcount

Kiraboshi
Bank total
Digitalpersonnel

Number of locations (Kiraboshi
Bank)

FY2026

2,860

2,750

(110)

2,438

2,265

(173)

360

660

+300

105 locations

85 locations

Reduce by
20 locations* Consolidating corporate customertransactions to 13 locations

Productivity (Kiraboshi Bank)(Gross core business profit per head)¥37 million¥42 million+¥4 million

52©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Governance Structure and Organization: Evolving Group Business Management
The FG Corporate Planning Division is responsible for management resource allocation across the Group and IT governance(established within this division are the Financial Strategy Office, Public Relations Office, and IT Management Office)
The FG Sales Strategy Division formulates our Group-wide comprehensive solution strategy to meet diverse customer needs
The FG Risk Management Division manages risks across the Group (established within this division is the AML/CFT Office)Management Meeting[FG Organization Chart]

Digital Business

Financial Strategy OfficePublic Relations Office
IT Management Office

Customer Support Contact
Center
AML/CFT Office

Risk Management Office

Tokyo Metropolitan
Government Collaboration
Promotion OfficeBusiness Strategy
Division

Sales Strategy
Division

Digitalization Strategy
Division

Partnership Promotion
Division

Personnel Division

Hospitality Mind Office

Risk Management
Division

Secretarial Office

Corporate Planning
Division

1. UI Bank Co., Ltd.
2. Kiraboshi Tech, Inc.

Financial Business3. Tokyo Kiraboshi Lease, Inc.
4. Kiraboshi Capital Co., Ltd.
5. Kiraboshi Life Design Securities Co., Ltd.
6. Kiraboshi Servicer Co,. Ltd.
7. Kiraboshi Insurance Agency CO., LTD.
8. Kiraboshi JCB Co., Ltd.
9. Kiraboshi Credit Guarantee Co., Ltd.
10. Yachiyo Credit Guarantee Co., Ltd.

Solutions Business
11. Kiraboshi Consulting Co., Ltd.
12. Kiraboshi System, Inc.
13. ITC Co., Ltd.
14. Kiraboshi business office service, Inc.
Group Strategy OfficeSustainability Promotion
OfficePublic Sector Collaboration
Promotion OfficeCompliance Office

IT Management Subcommittee
Chair
CIO
Secretariat IT Management OfficeMembers
Digitalization Strategy Division, Corporate Communication Division, Corporate Planning Division, Risk
Management Division
TopicsExploration of IT investment strategy for each FG company, exploration of system risk strategy for each FG
company

Promotion/Overseas Business
15. Be.Brave, Inc.
16. Kiraboshi Business Service Co., Ltd.
17. Kiraboshi Business Consulting Shanghai
Co., Ltd.
18. StarBridge business consulting (Beijing)Co., Ltd.
19. KIRABOSHI BUSINESS CONSULTING
VIETNAM Co., Ltd.

20. Tokyo Kiraboshi Financial Group, Inc.
21. Kiraboshi Bank, Ltd.
22. Sky Ocean Asset Management Co., Ltd.
22 Group companies©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

53

Governance Structure and Organization: Risk Compliance
Achieve sustainable profitability strengthening by transforming the income structure, enhance capital through strategic financial
controls, and achieve optimal allocation of management resources
Established a risk compliance management system to ensure business operations through properly managed risk-taking
Visualizing risks through meticulous attention to all Group businesses and quantitative and qualitative indicators, and efforts tomake management decisions based on the top risks

FG Management MeetingGroup CEORAS Management

ALM Committee
Group CFO

Risk Management Committee
Group CRO

Compliance Committee
Group CROIT Management Subcommittee
Group CIO

Financial controls[Liquidity/equity capital]

Integrated risk management[Credit, markets, operations]

Legal compliance/conduct risk
[Non-financial affairs, including
administration and customer protection]

IT governance management[Systemic]

Top risk assessment

RAF

Identifying conflicts

Qualitative evaluation: Prioritization Qualitative assessment
Group optimization
Quantitative evaluation: Risk amount Risk concentration, etc. Various risk drivers Pros andcons of action plans
Internal losses: Operational risk indicators

Bottom-up escalation forimportant matters

Operational management rooted in customer orientation
Assessing AML/CFT measures[Permanent management system of Group companies by the second-line risk management department (major items)](1) Integrated compliance program (2) Annual Group risk assessment system (3) Group KRI management (4) Integrated operational risk management(5) New business/new product screening system (6) Group whistleblowing management (7) Group legal oversight system

Digital Businesssubsidiaries

Financial Businesssubsidiaries

Solutions Businesssubsidiaries

Promotion/Overseas Businesssubsidiaries

54©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Well-being and Human Capital Management 1
Creating a virtuous cycle that maximizes the value of human capital through serious well-being support of “Kiraboshibito”
employees
Realizing well-being for customers, communities, and employees by giving our all for TOKYO

Giving our all, for TOKYO.
ーEnhancement of corporate valueー

Accomplish the goals of contributing to society, seeking growth of theorganization, achieving self-fulfillment, and realizing one’s own
happiness

Contribution tosociety

A cycle that maximizes
the value of humancapitalGrowth of theｘcompany

Growth oforganization

Each employee enhances own value and contributes toimprovement of corporate value
Platform for job satisfaction

Strengthening ofindividuals

Own happiness
Self-fulfillment

Human resources development,
improvement of workplace environment
Enhancement of human capital

Fostering of corporate culture

Job satisfaction

Generating valuableaccomplishments

Kiraboshi Philosophy

Improvement of workplaceenvironment

Well-being of“Kiraboshibito”* “Kiraboshibito,” or “the people of Kiraboshi,” are people who have a spirit of healthy sharing of benefits between themselves and others, people who think and act based on a set of
guidelines, and people who put the Kiraboshi Philosophy into practice

55©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Well-being and Human Capital Management 2
Conducting regular surveys to visualize the well-being of each employee
Aiming to increase survey scores each year by fostering a corporate culture and improving the workplace environment

Specific efforts to achieve well-being

Well-being management KPICertain questions from our survey that are
particularly important for realizing well-being havebeen set as KPIs.

Platform for job satisfaction

Strengtheningof individuals

Conducting regular surveys

Spreading purpose

Fostering of corporate
cultureCreating dialogue
opportunities

Promoting diversity
1-on-1 meetings

360-degree survey training

Improvement of
workplaceenvironment

Helping employees takechildcare leave

Health checkups

Encouraging employees totake paid leave

Updating disability
insurance

Encouraging shareholding
association membership

Aiming to increase survey scoreseach year● Elements of well-being:
PERMA
P

Positive Emotion

Positivity

E

Engagement

Focus on work

R

Relationships

Strong interpersonal
relationships

M

MeaningFeeling meaning inworkAAccomplishment

Tangible growth

56©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Well-being and Human Capital Management 3
Boosting initiatives for stronger individuals to cultivate professional personnel capable of enhancing their own value andhelping to enhance corporate value
Establishing a system capable of recruiting, training, and deploying professional personnel in each field, and actively investingin human resources development

Initiatives for stronger individuals
Recruitment

Development

Active recruitment of professional
personnel
Basic Stage

Strategic assignment to specialized
departments, internal and external training

Professional Career I

Management Career / Professional Career II

Desire to become
management personnel

Management personnel

Director

Officer* Officer candidate
・Expansion of succession plan

・ Gaining experience in otherindustries through external
dispatchRapid
mobilization

Basic StageNew joiners

Desire to become
professional personnel

Staff (routine
operations)

Strategy director

Professional personnel

DigitalPrivate banking

Corporate finance/businessrestructuring

Consulting

・ Continuing midcareer
recruitment

・ Dispatching toexternalorganizations* Specialist with salary/benefits
like an officer

・ On-the-job training inspecialized
departments

57©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Giving our all, for TOKYO.

6. Sustainability Initiatives©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Sustainability Initiatives 1: Roadmap
To enhance the sustainability of local communities, we will enhance our structures and carry out Group-wide initiatives to solve
social issues
During the current medium-term business plan period, we will continue our efforts to further support resolution of social issues

FY2020

FY2021

FY2022

FY2023

FY2024–FY2026
Medium-termbusiness plan period

Established Group Chief
Sustainability Officer(CSuO) position

Structures
Expressed support for
TCFD recommendations

Formulated
Sustainability Policy /Environmental Policy
EstablishedSustainability Promotion
OfficeLaunched sustainablefinance transactions【E】
Environment【E】
・Scope1・2
Strengthening
reduction initiatives
・Scope3
Supporting individualcompany initiatives

Establishedenvironment-related
investment and loan
targetSigned agreement with theTokyo Metropolitan
Government for vitalizationof sustainable financeLaunched the Kiraboshi
Sustainability-Linked Loans

Issued Scope 1 and 2
carbon neutrality
declaration

Participated in the GX
League【G】
・ Enhancing corporate
value

Initiatives for local community sustainability【S】
Social【G】
Governance

Provided a digitalplatform

Provided financial
support for businesssuccession/transfer
needs

【S】
・ Contributing to local
revitalization

Providedfinancing/hands-on
support for start-ups

Initiatives to support
business restructuring

Introduced Group Chief
Officer (CxO) system

Introduced restricted stockcompensation plan

Purpose“Giving our all, forTOKYO” initiative

59©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Sustainability Initiatives 2: [E] Environment
The Group is committed to becoming carbon neutral in 2030 for Scope 1 and 2 as part of its materiality in addressing theenvironment and climate change
Supporting customers’ initiatives in Scope 3 and providing environmental finance as part of Group financial functions

FY2022

FY2023

FY2024FY2025

FY2026

FY2030Medium-termbusiness plan period
Scope 1, 2*1

62.4%
reduction*2

Carrying out reduction measures to become carbon neutral
Carrying out reduction measures to become carbon neutral(80% cumulative reduction by FY2026)

Selection of key sectors (strengthening engagement
and supporting reduction efforts)

Scope 3*3

Sustainablefinance (for theenvironment)¥50 billion executed (FY2022 to
FY2023)

TNFD*4*1: Scope 1: A business’s direct greenhouse gas emissions from own activities
Scope 2: Indirect emissions from the use of electricity, heat, steam, etc. supplied byother companies¥150 billion cumulative by FY2026

Support for/disclosure based on TNFD
recommendations

100% cumulative reduction
by FY2030

Strengthening initiatives to address
financed emissions¥200 billion cumulative by
FY2030Enhancing disclosure content*3: Scope 3: Indirect emissions other than Scope 1 and 2 from business activities*4: The Taskforce on Nature-related Financial Disclosures*2: Base year for Scope 1 and 2 reductions is 2013

60
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Sustainability Initiatives 3: [S] Social
Committed to providing financial and non-financial solutions as part of its materiality in resolving issues faced by local
communities

Business succession
・ Number of businesssuccession collaborations
FY2022: 304 cases
FY2023: 313 cases

・ Number of completed
M&A transactions
FY2022: 12 cases
FY2023: 14 cases

Business restructuring
・ Number of business improvement support projects with
HQ/sales office cooperation
FY2022: 108 projects
FY2023: 127 projects
・ Supporting companies reaching the end of their COVID-19
zero-interest/zero-collateral loan grace period(Supporting formulation of business improvement plans, etc.)

Tokyo Metropolitan Government
・ Support for companies in cooperation with government(DX, business succession, environment, women’s
empowerment, etc.)
・ Providing support at start-up locations
・ Participation in start-up events (City-Tech.Tokyo)
・ Co-exhibiting at Slush 2023
(the largest start-up event in Scandinavia)

Digital platform・ Roll out digital strategy utilizing UI Bank and Kiraboshi
TechContributing to solving issues inlocal communities

Start-up Support
・ Loans for founding companies
FY2022: 978 loans, ¥20.8 billion
FY2023: 898 loans, ¥19.5 billion

Industry–government–academia–
finance network

・ Held pitch events at KicSpace HANEDA(24 events from FY2022 to FY2023)
Participants: 110 companies, 1,417 individuals (in person
and online)

Private-sector businessTokyo Kiraboshi Financial Group
Kiraboshi Bank・ Holding hands-on robotics classes and financial education
seminars (Kawasaki Heavy Industries)
・ Supporting collaboration between start-ups, large
corporations, and other industries
・ Initiatives for ICT/SDGs consulting

Local public entities

Universities

・ Participation in regional energy companies (Kawasaki City)・ Supporting IP utilization (Minato City, Toshima City, Ota City,
Kawasaki City)・ Attracting government administration-related facilities to
Sagamihara Center Building (Sagamihara City)・ Conducting financial education (Machida City)・ Disseminating tourism information/hosting of events
showcasing traditional performing arts (Minato City)・ Co-hosting SDGs seminars and dispatching lecturers(Minato City)・ Hosting Toshima Business Support Seminars (Toshima City)・ Hosting joint new joiner ceremonies/training sessions (Ayase
City)・ Providing donations and support(For regional development efforts by three local villages in
the Okutama area and Chuo University)
・ Endowed courses(Chuo University, Aoyama Gakuin University, Tokyo
Metropolitan University, Azabu University)
・ Support for idea pitch contests (University of ElectroCommunications)

Partner financial institutions
・ Hosting vacant house countermeasure seminars/long-termand end of life care events with Sumitomo Mitsui Trust Bank
as part of ultra-low birthrate/aging population measures

61©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Sustainability Initiatives 4: [G] Governance
The Group is working to enhance corporate value by further upgrading its governance structure

Share of outside/female officers
Board of Directors
Outsidemembers: 3
Of which,
1 female member

Audit & Supervisory Board

Directors
8 people
Insidemembers: 5

Outsidemembers: 2
Of which,
2 femalemembers

Audit &
Supervisory
Board Members
4 people

Nomination and Remuneration Council

Insidemembers: 2

Outsidemembers: 2
Of which,
1 female member

Directors
3 people

Insidemembers: 1

Chair: Appointed by Outside Directors
Ensuring independence and diversity

Ratio of outside officers

Ratio of female officers

5/12 (41.6%)

3/12 (25.0%)

Self-evaluation of Board of Directors effectivenessAll Directors and Audit & Supervisory Board Members who are members of the Board of Directors
are asked to complete a questionnaire regarding the composition, operation, discussion, andmonitoring functions of the Board of Directors (individual interviews by a third-party organization are
also conducted for some of these officers), and the results are discussed and evaluated by the
Board of Directors based on the analysis by the third-party organization.

Director remuneration
The remuneration of the Group’s Directors (excluding Outside Directors) is composed of fixed
remuneration (monthly remuneration) as base remuneration, in addition to a combination of sharebased remuneration using a share trust and cash remuneration to function as a healthy incentive
aimed at sustainable growth of the Group. Share-based remuneration is linked to medium- to longterm performance and uses a share delivery trust, whereas cash remuneration is linked to shortterm performance.

Action policy

Operation of the Board of
Directors

Recognizing issues(discussion at the Board of
Directors)

Effectiveness evaluation[Remuneration types]
Fixed remunerationBase(monthly remuneration) remuneration[Target remuneration ratios]
Paid according to position, etc.

Cashremuneration

Linked to short-term targets in the mediumterm business plan, etc.

Share-based
remuneration

Linked to medium- and long-term targets inthe medium-term business plan, etc.

Performance-linked
remuneration

Performancelinked
remuneration(share-based
remuneration)
15%–20%
Performancelinked
remuneration(cash
remuneration)
15%

Fixed
remuneration(monthly
remuneration)
65–70%

62©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Appendix: Materiality Initiatives: List of KPIs
Social issues to be addressed and our responses

Support for SMEs in improving theirbusiness value

KPIs to achieve management targets(Cumulative targets for the period from FY2024 to FY2026)

Financial advice provided: 30 cases (M&A)
Financing for business succession and restructuring: 120 projects/¥180 billion

Realization of asustainable society

Support for SMEs in theirdecarbonization efforts

Scope 1 & 2: 80% reduction by the end of FY2026

Support for medical institutions(management)

Sustainable finance executed: ¥100 billion

Support for the elderly and child raising
generation

Customers with financial assets of ¥50+ million: 4,000Group-wide contribution to regional
development

Factoring for small, medium and micro businesses: ¥5 billion

Start-up support measures: 100 actions (new business creation, commercialization support, etc.)

Creation of new social
values and industries

Start-up support

Start-up companies supported for overseas expansion: 30
Japanese companies supported for overseas expansion: 300

Support for overseas expansion from theTOKYO market

Responses to issues
accompanying progressin digitalization

Overseas companies supported for expansion to Tokyo: 30

Delivery of new financial functions
Social infrastructure (security and safety)

UI Bank: 700,000 depositing customers / ¥780 billion in deposits

Financial services support for the elderly
and young people

UI Bank: 6,000 loan customers / ¥220 billion in loans

Ensuring foreigners have access tofinancial services

UI Bank: Annual revenue with BaaS customers: ¥850 million (partnership with Kiraboshi Tech)

63©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.