TOKYO
Kiraboshi
FinancialGroup
Annual Report2022

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 2022
Some figures in our Annual Report 2022 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.

P14～16． Message from the Chief Financial Officer
Progress of major KGI in the Medium-Term Business Plan
(Before Correction)
Compared

FY2020 (actual)

FY2021 (plan)

FY2021 (actual)

ROE (FG consolidated)

1.3%

3.2%

5.7%

+2.5%pt

Core OHR (expense ratio)

75.7%

67.0%

65.3%

–1.7%pt¥4.1 billion¥10.0 billion¥18.1 billion¥1.4 billion¥12.4 billion¥12.6 billion¥0.3 billion¥(0.4) billion¥0.1 billion

8.7%

8.6%

8.4%

Profit attributable to owners ofparent (FG consolidated)
Profit from customer businessContribution of subsidiaries toconsolidated income
Capital ratio (FG consolidated)1

to the plan+¥8.1
billion+¥0.2
billion+¥0.5
billion–0.2%pt

(After Correction)
Compared

FY2020 (actual)

FY2021 (plan)

FY2021 (actual)

ROE (FG consolidated)

1.3%

3.2%

5.7%

+2.5%pt

Core OHR (expense ratio)

75.7%

67.0%

65.3%

–1.7%pt¥4.1 billion¥10.0 billion¥18.1 billion¥1.4 billion¥12.4 billion¥12.6 billion¥0.3 billion¥(0.4) billion¥0.1 billion

8.7%

8.6%

8.3%

Profit attributable to owners ofparent (FG consolidated)
Profit from customer businessContribution of subsidiaries toconsolidated income
Capital ratio (FG consolidated)

Financial Management and Capital Management

to the plan+¥8.1
billion+¥0.2
billion+¥0.5
billion–0.3%pt

Analysis of financial management factors(Before Correction)
FY2021 (actual)

FY2022 (plan)

FY2023 (plan)

ROE (FG consolidated)

5.7%

5.9%

5.9%

Capital ratio (FG consolidated)

8.4%

8.3%

8.3%

RORA (FG consolidated net income basis)

0.4%

0.4%

0.5%

Total shareholder return ratio

20%

20%

20～30%(After deducting ¥6.5 billion)(After deducting ¥3.5 billion)

FG profit: ¥11.6

FG profit: ¥16.0

FG profit: ¥20.0

billionbillionbillion¥75 dividend¥105 dividend

Assumption for total shareholder return ratio(after deducting equity method profit)(After Correction)
FY2021 (actual)

FY2022 (plan)

FY2023 (plan)

ROE (FG, consolidated)

5.7%

5.9%

5.9%

Capital ratio (FG consolidated)

8.3%

8.3%

8.3%

RORA (FG consolidated net income basis)

0.4%

0.4%

0.5%

Total shareholder return ratio

20%

20%

20～30%(After deducting ¥6.5 billion)(After deducting ¥3.5 billion)

FG profit: ¥11.6

FG profit: ¥16.0

FG profit: ¥20.0

billionbillionbillion¥75 dividend¥105 dividend

Assumption for total shareholder return ratio(after deducting equity method profit)2

Changes in Risk Assets(Before Correction)●2021/3─2022/3
2021/3¥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¥3,555.0 billion●2022/3─2024/3
2022/3¥3,555.0 billion

Commercially viable loans+¥247.6 billion

Securities, etc.

+¥146.1 billion

PE funds+¥18.8 billion

Others+¥9.1 billion

2024/3 (Medium-Term Business Plan)¥3,976.6 billion(After Correction)●2021/3─2022/3
2021/3¥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¥3,568.4 billion●2022/3─2024/3
2022/3¥3,568.4 billion

Commercially viable loans+¥234.2 billion

Securities, etc.

+¥146.1 billion

PE funds+¥18.8 billion

Others+¥ 9.1 billion

2024/3 (Medium-Term Business Plan)¥3,976.6 billion

3

P17. Financial Highlights
Consolidated capital ratio (JGAAP)(Before Correction)
Capital ratio
2020/3 end

8.65%

2021/3 end

8.74%

2022/3 end

8.41%(After Correction)
Capital ratio
2020/3 end

8.65%

2021/3 end

8.73%

2022/3 end

8.38%

P29. Status of Progress on the Medium-Term Business Plan
KGI

Financial targets

Capital ratio <FG consolidated>(Before Correction)
20/3

8.6%

21/3

8.7%

22/3

8.4%

23/3 (planned)

8.3%

24/3 (planned)

8.3%(After Correction)
20/3

8.6%

21/3

8.7%

22/3

8.3%

23/3 (planned)

8.3%

24/3 (planned)

8.3%

4

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

Management Philosophy

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

Comprehensive service business that is also strong in finance
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 happiness
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

Contents
Management Philosophy, Vision of the Future, and Kiraboshi Philosophy･･･････1
Tokyo Kiraboshi Financial Group
History of Tokyo Kiraboshi Financial Group････････････････････3
Message from Top Management･･････････････････････････････････5
Dialogue between Outside Directors･･････････････････････････11
Message from the Chief Financial Officer･･････････････････････13
Financial Highlights･･････････････････････････････････････････････････17
Non-financial Highlights････････････････････････････････････････････18
Tokyo Kiraboshi Financial Group’s Value Creation
Value Creation Story････････････････････････････････････････････････19
Value Creation Process････････････････････････････････････････････21
Resources of Value Creation･････････････････････････････････････23
Mechanism of Value Creation････････････････････････････････････25“Kiraboshibito” Dialogue between Directors･････････････････27
Tokyo Kiraboshi Financial Group’s Growth Strategy
Status of Progress on the Medium-Term Business Plan････29
Digital Strategy･･･････････････････････････････････････････････････････31[Features] New Future of Kiraboshi at Which UI Bank Co., Ltd. Is Aiming････31
Future Aimed at by the Tokyo-based Platform Concept････35
Corporate Customer Strategy････････････････････････････････････37
Retail Customer Strategy･･････････････････････････････････････････41
Human Resource Strategy･････････････････････････････････････････42

Initiatives aimed at Sustainability
Management for Sustainable Development･･･････････････････43
Initiatives to Address TCFD (Task Force on Climate-related Financial Disclosures)････44
Human Capital･･･････････････････････････････････････････････････････48
Communication with Stakeholders･･････････････････････････････50
Management Base That Supports Value Creation
Corporate Governance･････････････････････････････････････････････51
Risk Management････････････････････････････････････････････････････57
Compliance･･･････････････････････････････････････････････････････････61
Financial Data and Corporate Data
Tokyo Kiraboshi Financial Group, Inc.･･････････････････････････63
Consolidated Financial Statements･････････････････････････････65

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 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 othermaterials.

│Tokyo Kiraboshi Financial Group, Inc.│ 2

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

History of Tokyo Kiraboshi Financial Group

2021

Tokyo Kiraboshi Financial Group, Inc. was born through the merger of three banks.
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 businessname 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

The Tokyo Tomin Bank, Limited and the Yachiyo Bank,
Limited merged to form Tokyo TY Financial Group.

2016

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

2018

2017

Apr

To strengthen consulting
functions aimed at enhancing
comprehensive financial services

May

Apr
Establishment of
Kiraboshi Consulting

Formulation of theMedium-Term Business
Plan “Start-up
Kiraboshi”

Birth of Tokyo
Kiraboshi Financial
Group

Relocation from Shinjuku-ku
to Minato-ku (to the head
office of Kiraboshi Bank)

Formulation of new
Medium-Term Business Plan
Mar

2020

Kiraboshi Insurance Agency
made into an equity method
affiliate of Kiraboshi BankTo enhance groupfunction

May

Apr

2019

June

Change of business name from
Kiraboshi Service to Kiraboshi
Business Office Service

Aug

Systems integration(Kiraboshi Bank)
Head Office relocation
Aug

Conversion of Tokyo
Kiraboshi Lease, Kiraboshi
System, and Kiraboshi JCB towholly-owned subsidiaries
Oct
Establishment of KIRABOSHI
BUSINESS CONSULTING
VIETNAM, a consulting
subsidiary in Vietnam

Establishment of Kiraboshi
Life Design Securities

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

Aug

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

Management Base That
Supports Value Creation

2022
Jan
Opening of UI Bank Co., Ltd.
Jan
Establishment of StarBridgebusiness consulting (Beijing) Co., Ltd.,a Japan-China joint venture consulting
subsidiary in Beijing

Financial Data andCorporate Data

Comprehensive
service businessthat is alsostrong in financeJuly
Be.Brave, Inc., an advertisement
planning and production company,
made into a subsidiary, contributing toadvancement of the banking service

Expansion of non-faceto-face service that puts
the customer first

Nov

Grand opening of “KicSpace
HANEDA” businessincubation facilities
Nov
Launch of “LaLaQ” app(as of July 1, 2022)

May

Nov

Birth of Kiraboshi Bank

Establishment of
Kiraboshi Tech

Sept

To expand into the
FinTech area

Apr

Initiatives aimed
at SustainabilityGroupcompanies

Establishment of Kiraboshi Capital

To respond to theneeds in mezzanine,funding (incl. IPOs)

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.

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

Equity-method
aﬃliates● UI Bank Co., Ltd.
● Tokyo Kiraboshi Lease, Inc.
● Kiraboshi System, Inc.
● Kiraboshi JCB Co., Ltd.
● Kiraboshi Consulting Co., Ltd.
● Kiraboshi Tech, Inc.
● Kiraboshi Capital Co., Ltd.
● Kiraboshi Life Design Securities Co., Ltd.
● Kiraboshi business oﬃce service, Inc.
● Be.Brave, Inc.
● Sky Ocean Asset Management Co., Ltd.

External movements

2014

2016

2018

2019

2020

2021

2022

Consumption tax raised to 8%

Start of Individual Number System

TPP11 takes effectName of era changed from
Heisei to Reiwa

UK withdraws from EU

Joe Biden inaugurated as
46th President of theUnited States

Escalating tension in the
Russia-Ukraine situation

2015

Implementation of negative interest rate policy by BoJ

Greek financial crisis

2017

Launch of Asian Infrastructure Investment Bank

Donald Trump inaugurated as 45th
President of the United States

FRB lifts zero interest policy

3 │Tokyo Kiraboshi Financial Group, Inc.│

Establishment ofwork-style reform bill

Consumption tax raised to 10%
5G service commences incountries worldwide

Global spread of COVID-19

Tokyo 2020 Olympic andParalympic Games held

Weaker yen

Global inflation│Tokyo Kiraboshi Financial Group, Inc.│ 4

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from Top Management

Aiming to become a comprehensive
service business that is also strong in
finance

Establishing a Group brand:
A sparkling Kiraboshi thatshines across the whole
Tokyo area

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

5 │Tokyo Kiraboshi Financial Group, Inc.│

The business environment surrounding all business
operators including the Tokyo Kiraboshi Financial
Group is undergoing a major turning point in termsof a host of factors. These include changes insocial structures caused by a declining birthrate,
aging population, and shrinking workforce, sluggish
economic activit y and changing consumer
behavior due to prolonged measures designed tocontrol COVID-19 infections, changes in industrial
structure in the wake of digitalization and active
market entry by players from different industries,
and responses to address climate change anddecarbonization needs. Right now, the burden on
many businesses and consumers is increasing
following the sharp rise in resource and energy
prices caused by the deteriorating situation in
Russia and Ukraine, and the weaker Japanese yen.
As a Group, we judged that, in addition toproviding the necessary financial support to ensurebusiness continuity, there is a growing need for
consulting that is tailored to individual company
issues, such as how to reduce costs, create new
business channels, and support digitalization, so
we have been developing a comprehensive
support system like we did for COVID-19.
Meanwhile, in terms of the business environment
surrounding our Group, intensifying competition
among financial institutions in the Tokyo area,changes in the competitive environment due to theadvancement of FinTech, and prolonged low
interest rates are impacting our business. In orderfor our Group to continue to contribute to local
communities and aim for sustainable growth, it isessential that we move to a new business modelthat generates profit opportunities rather thanrelying solely on profits from loans.
We recognize that the value we provide lies insolving problems. Based on this recognition, weare carving a future vision that will enable us toevolve into “a comprehensive service business thatis also strong in finance” by considering what we
can offer to customers and how to respond to
custo m e r n e e ds , a n d t h e n p rov i d i n g acomprehensive range of financial service functions
from banking to securities, leasing, capital, and
FinTech, as well as non-financial services, such as
consulting.

Superior management base in theTokyo area
To approach that ideal vision, we must become
the No.1 financial group in the region with a firm
presence in the Tokyo Area, which is a fertile
market.
The Tokyo area market is home to a large numberof corporations and residents and competition isintensif ying as dif ferent regio nal financial
institutions cross over into new territories. This
trend is expected to continue for some time. With
our significant superiority as a local financial
institution with Tokyo roots, we want to fully
leverage our strengths as an institution that is able
to appoint local contact personnel in the area andbuild relationships over long periods, and display afirm presence. We have launched initiatives toensure our contact personnel look after customers
for the long term by focusing on building
relationships, particularly in terms of expert
personnel in the wealth management division, etc.
Fu r t h e rm o re, it is ea sie r fo r us to create
opportunities in the Tokyo area not only for
immediate contac t personnel but al so forcompany executives to make regular visits anddirectly convey management policies, etc. That isone characteristic of our Group that financial
institutions from other regions cannot easilyemulate.
Within these carefully amassed trust-based
relationships, we always respond firmly anddirectly to customer needs. We are seeing a sharp
rise in cases where the Group takes the lead inarranging financial support together with otherbanks as necessary. When lending to small andmedium-sized enterprises in particular, we have toinvest time in taking at tentive care of ourborrowers, as well as providing subsequent follow
up. I consider the construction of supporting
systems in which we take responsibility forproviding post-loan follow-up services, while
extending syndicated loans together, is an
important job where we, as a local Tokyo bank,should take the lead. Our business alliance with
the Bank of Yokohama announced in August 2021
is part of that initiative. Regarding the projects thatwere previously difficult to handle on our own, we
are now capable of handling such projects by
sharing them with other banks, and we are now
progressing many specific projects of that nature.
We also feel confident that we can cooperate withother financial institutions on individual projects
without forming business alliances. I believe thatcreating an environment that is easier for individual
regional financial institutions to participate in,
especially for those that see increasing new
lending in the Tokyo area as a great risk, will
enable us to ultimately fulfill our essential role as a

│Tokyo Kiraboshi Financial Group, Inc.│ 6

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from Top Management

local financial Group seeking to ensure sustainableregional development.

Advancing first-call contact as ourplatform concept
When we think of how we can revitalize and help
develop the region going forward, what we can do
is limited with our current roughly 3% share ascustomers’ main bank. In order to make asignificant contribution, it is essential that we
increase our share as customers’ main bank. As
part of efforts to achieve this goal, under our
previous Medium-Term Business Plan “Start-up☆
Kiraboshi” (FY2018-FY2020), we have focused ourefforts on supporting start-up ventures that lead tothe creation of new industries, and increased thenumber of first calls that would materialize ourbelief that the value we provide lies in solving
problems. Based on the recognition that we firmly
made progress in these efforts, in the current
Medium-Term Business Plan, we are promoting
activities driven by our vision to “be a Tokyo-based
plat form owner that creates new value forcustomers” by further advancing our first-callstrategy and enhancing our problem-solving
capabilities.
Our platform concept involves building venues forcreating common value through new encountersand connections. The HANEDA Platform, forinstance, involved creating the KicSpace HANEDA
incubation facility in the Haneda Innovation City,
connecting large corporations and venturecompanies, and actively developing a co-creation
environment. We have also launched a platform
for foreign workers and students coming to Japan,
and a medical-related platform designed todigitalize operations for customers involved in
medical care and welfare, which is considered amajor industry in the region. As a backgroundfactor behind the materialization of theseplatforms, we launched our LaLaPay digital money
payment service and LaLaQ digital wallet service inNovember 2021, and our digital UI Bank in January
2022. Providing these digital functions has enabled
us to establish a system for developing the Group’s
desired “connection” venues via digital platforms,
and we can now accelerate those developments.

Why a digital bank?
I n to d ay ’s e ra w h e n t ra n s a c ti o n s c a n b ecompleted entirely by smartphone, shifting fromhigh-cost bricks-and-mortar banks to digital banks
is important as our Group channel strategy. We
i n te n d to e x p a n d o u r s e r v i ces , i n clu d i n g
preferential interest rates, so that customers reallyfeel the benefits of digital banks. We will

7 │Tokyo Kiraboshi Financial Group, Inc.│

encourage customers who conduct usual banking
transactions for deposits, foreign exchange, etc. touse digital banking and we will offer face-to-faceadvice at Kiraboshi Bank counters for customers
who need more advanced financial services, suchas consulting. We aim to expand our customers
base by mutually referring customers in this way.
This doesn’t mean simply distinguishing face-toface sales from non face-to-face sales, but ratherchanging our very retail strategy through digitalbanking.
In the three months since opening UI Bank in
January 2022, 67,000 accounts were opened,roughly half by Kiraboshi Bank customers. To
encourage more customers to shift to digitalbanking, we intend to enhance the services weoffer, differentiate ourselves from other digitalbank s , an d evolve our ser vices to ensure
customers can really enjoy the merits of UI Bank.
Internet banking can be sufficient enough to
support a simple transition to non-face-to-facetransactions for opening accounts, making
deposit s or withdrawal s or transfers , andpurchasing financial products, among others. So
you might ask why it is necessary to create adigital bank. It symbolizes a major challenge for us
in realizing our future vision for the Group. The
purpose of building the Group’s targeted platform
is to create common value and services. To fulfill
that role, we believe it is important to utilize
payment functions and build an environment thatfacilitates active cooperation between various
companies.
Having said that, we have to revise our existingaccounting systems in order to integrate nonfinancial services into the traditional banking
system. That is a costly and time-consuming
undertaking that requires coordination with otherbanks, and a huge amount of time must be
invested before a service can be introduced. That’s
why we decided that we needed to have a new
digital bank in order to build platforms to facilitate
API linkage and other cooperation between
various companies.
We provide services that financial institutions havetraditionally offered as Banking as a Service (BaaS)
functions to customers who understand thesignificance of the platform and actively participate
in it. That means any business operator can offer
financial services without developing a financial
system. For example, a company can offer a full
app-based service from loan applications topayments and execution simply by incorporating
financial services into its own app. Having asettlement function within their own business andconducting banking transactions themselves will
enable companies to accumulate and utilize
customer data in completely different ways than
before. M oreover, customers who use theplatforms can link their software together so that

customers who have multiple member
organizations for example can offer mutual services
through cross-matching. We expect these features
will help create shared value and new business.
So, our platform concept focuses on connecting
services by API linkage and providing a venue forcreating shared value and new business all
centered around a digital bank. You could neverdo that with internet banking. It is an extremely
challenging strategy. It will take considerable timeand understanding to create a platform, but it iswell worth the challenge.

The ideal business model andbusiness portfolio
Why did the three banks merge in the first place?
In short, to help create shared value that would
enable us to contribute to society in the Tokyo
area. In practice, that means creating new businessthrough the building of platforms and proposing
new financial and other services that would
become an indispensable part of our daily lives.
In the previous Medium-Term Business Plan thatcovered the three years immediately following themerger, we thoroughly reduced costs, channeledfunds into future investments, and set up Group
companies to facilitate the shift to a businessmodel that includes the provision of new nonfinancial services. We now have to generate real
merger benefits under the current Medium-TermBusiness Plan. With this in mind, in order to move
the Group to the next stage, we also have to strive
to build the best platforms that integrate financial
and non-financial services and steadily produce
results from this major challenge.
The platform concept also considers how to
enable customers to utilize Group functions. In
response to social issues such as SDGs anddecarbonization, it is hard for SMEs to put asystem in place to address these issues by setting
up specialist departments like large companies do.
That’s why we want as many customers as
possible to recognize us as a reliable partner by
get ting them to use the Group’s Kiraboshi
Consulting, Kiraboshi System, and Kiraboshi
business office services such as payroll calculationand general affairs services. This is how we intend
to boost our market share as a main bank andincrease our contribution to society.
We already have 19 Group companies, but there
are still many functions that we feel are lacking, so
we are looking to further strengthen the Group’s│Tokyo Kiraboshi Financial Group, Inc.│ 8

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from Top Management

capabilities going forward. As part of this drive, in
July 2022, we bought shares in advertising andmarketing company Be.Brave, Inc., and made it asubsidiary as a company to help advance ourbanking business. The aim is to solve issues in thefields of customer advertising, promotion, andmarketing and to help enhance corporate value
and promote digitalization. We are also looking tostrengthen our brand strategy to expand ourmarket share by running the Group’s promotion inhouse. To that end, we intend to reexamine
exactly what we can do in the Tokyo market, andconvey and implement strategies to make ourbrand recognized by local customers.
We have set a target for FY2023, the final year of
the current Medium-Term Business Plan, toincrease the contribution of Group companies toconsolidated earnings to ¥2.3 billion (11.5% ofGroup consolidated income). However, it isimportant to increase the number of Group
companies that can be evaluated by the market.
That means ensuring newly establishedsubsidiaries become profitable quickly, andfostering a culture that expands our business scaleby encouraging each company to develop
independent drive and to work together in an
atmosphere of friendly rivalry. As the number ofstrategic subsidiaries providing non-financial

9 │Tokyo Kiraboshi Financial Group, Inc.│

services increases, the Group will need to firmly
manage and supervise those companies. One key
issue for the future holding company management
team will be securing and organizing humanresources capable of overseeing the managementof multiple business categories. Once we achieve
that, we can move from our conventional position
as a financial group and take a step toward
becoming a comprehensive service business thatis also strong in finance. We are elevating our
expectations for developing into a corporate groupthat can demonstrate even greater potential.

How is our Medium-Term Business
Plan progressing?
The current Medium-Term Business Plan is fairly
stretching and we understand that people areinterested in just how we intend to achieve it.
There was an unusually large number of special
factors in the financial results for FY2021, the firstyear of the plan, but our corporate results showsmooth progress for our numerical plans if allthese factors are excluded. That in turn led to an
upward revision to our earnings forecasts and anincrease in shareholder dividends. Corporate sales,
which focus on comprehensive problem-solving
support, trended extremely strongly, and interest
on loans and commission income also increased
sharply. While we did accumulate a large numberof COVID-19 support loans in the year before, we
believe subsequent continued loan growth is dueto the successful frontline implementation ofstrategies to expand our customer base.
Having said that, we still have some work to do interms of expanding the number of users under our
digital strategy, and we need to further enhance
initiatives designed to increase the number ofcustomers who will use digital services going
forward. UI Bank plans to provide loans and banktransfer facilities and collaborate with Kiraboshi
Life Design Securities in the current fiscal year. Our
aim isn’t just to expand these functions but tocreate new services that meet diversif yingcustomer needs.
For example, 70-80% of customers in their 70s arethought to utilize services through SNS messaging.
If we can break free from stereotypical thinking
that suggests senior citizens are very reluctant touse digital services and advertise services thosecustomers will find convenient, they will definitely
be able to incorporate digital services into theirlives. To that end, we need to consider what kindof services elder customers need and earnestly
pursue how we can create services that makepeople feel secure from a family perspective
because they know Kiraboshi is supporting them.
This strategy is not limited to senior citizens. If wepursue what we can offer to customers by

categorizing targets in detail such as services for
employees or households with children, we
believe this will lead to the creation of addedvalue services. Our aim is to expand Group users
by providing a variety of different services.

Regional contribution from asustainability management
perspective
Starting with the declaration of support for the
SDGs in 2019, the Group has since been promoting
various initiatives of its own with specific targets
through support for the TCFD recommendations
and the establishment of sustainability andenvironmental policies. In January 2022, weformulated an environmentally and socially friendly
investment and loans policy, and are currently
implementing the policy with a target amount of¥200 billion in environment-related investment (byFY2030). We are also offering one-stop support
p a c ka ge s by t h e co l l a b o ra t i o n o f G ro u pcompanies such as Kiraboshi Consulting’s SDGs
Evaluation Program. We intend to engage inregional contribution not only by upholding thetargets that we have set, but also by actively
supporting customers who are working to solve
environmental issues.

Strengthen corporate governanceeven further
To further enhance the effectiveness of the Boardof Directors, we have set up a system for internal
directors to take charge of multiple concurrent
duties, and we have created a venue for sharing
information together with full-time corporate
auditors each morning. The system is designed tohelp internal directors understand various issues
as if they were their own and to express opinionsfrom multiple perspectives. It has facilitated thesharing of information on wide-ranging andextensive themes, including progress on individual
matters and various projects, and I feel that thefuller discussion has helped increase decisionmaking speed from the Management Meeting to
the Board of Directors. In addition, any opinions
expressed during advance explanations of a Boardof Directors’ meeting to outside directors andoutside Audit & Supervisory Board members areshared with all directors prior to the meeting. If
necessary, those opinions will be reflected inagenda items or an Extraordinary Management
Meeting may be held to examine a specific issue.
Speed is very important if you want to survive inthe fiercely competitive Tokyo area. We found it
hard at first, but I feel our speed as an organization

has increased considerably. Regarding any themesthat are difficult to fully discuss in the limited timein Board of Directors’ meetings, we convey thecontent for deliberation to outside directors andoutside Audit & Supervisory Board members inadvance, making an arrangem ent to havediscussions while obtaining rigorous opinions
based on their diverse experience and multiple
perspectives. We recognize digital transformation(DX) as an important theme in our future growthstrategy and intend to continue to deepen thediscussion in this area.
There are countless issues that need to beaddressed when we consider developing oursu p p o r t fo r ove rs ea s ex p a n si o n , su ch a s
appointing foreign nationals to director andexecutive officer positions, appointing directly
employed female officers and directors, andpromoting young employees. All our Group
operating companies are strategic subsidiaries, so
we can’t earn a competitive position in the market
without appointing top executives with specialiste x p e ri e n ce to m a n a ge t h o s e o p e ra t i o n s .
Appointing specialist human resources is essential
for enhancing market value, and we feel we cando that precisely because we operate in the Tokyoarea.

To our stakeholders
We have to become an organization that makes
customers feel they want to do business with the
Kiraboshi Group and makes our officers andemployees feel that they are happy about themerger and being able to work at the Kiraboshi
Group and that they want to continue to work at
the Kiraboshi Group going forward. To this end as
well, I believe that it is the management team’srole to first firmly achieve the targets of the current
three-year Medium-Term Business Plan, make sure
to increase the Group’s regional market share
while taking appropriate risks, and create ano rganiz atio n that has p resence an d gives
employees a sense of pride.
the Kiraboshi Group's corporate culture, values,
and individual employee awareness have beenchanging over the past four years, and the conceptof “Kiraboshibito” (people who put Kiraboshi
philosophy into practice) has become deeply
entrenched. To produce solid results and develop
as an organization that everyone appreciates, ourofficers and employees will work together toinspire and enliven our organization and makesteady progress towards our vision of becoming acomprehensive service business that is also strong
in finance. I very much appreciate your continued
support.

│Tokyo Kiraboshi Financial Group, Inc.│ 10

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Dialogue between Outside Directors
Dialogue between Outside Director Shoji Nishio and Outside Director Shuya Nomura

Enhancing theEffectiveness ofGovernanceOutside Directors Shoji Nishio andShuya Nomura had a dialogue on
the ways corporate governanceshould work to improve mediumto long-term corporate value for the
Tokyo Kiraboshi Financial Groupand create shared value with all theGroup’s stakeholders.
How do you evaluate the changes in the Group’s
governance since you became an outside director?

Mr. Nishio: When I was appointed in 2019, we focusedon system integration, which was a key issue at the timeof the merger. I remember strongly how all executives
worked together to formulate effective measures. The
operation has subsequently progressed smoothly and weare now focusing on internal control, compliance, andother corporate governance perspectives. Successful
system inte gration has enable d us to p ro gressdevelopment in this area and I feel it is getting stronger
every year.
Mr. Nomura: Looking back on the past year since myappointment, I feel that the Board of Directors has
responded sincerely to the opinions of outside officers ina way that is in line with the trend of recent governancereform. In particular, we can appreciate the company’s
attitude to try to incorporate the multifaceted experienceand expertise of outside directors and to carefully
determine management direction. In general, there is astrong tendency for corporate auditors in a company with
Audit & Supervisory Board not to speak out unless any
laws or regulations are violated. However, the outside
Audit & Supervisory Board members of Tokyo Kiraboshi
FG analyze the risks of proposed actions in advance andquestion any countermeasures, so I feel operation has

been very sound. The Board of Directors is always keen
to take on new challenges with a sense of tension, so thedebate is becoming increasingly lively and I rate thathighly.
Mr. Nishio: I also feel that the effectiveness of governanceis improving. The Group ensures careful advance
explanation and reporting of individual agenda items.
Also, a system has been put in place to ensure the Boardof Directors responds to any questions, which results inthe smooth operation of the Board.
Mr. Nomura: Even when advance explanations are given
just before a Board meeting, the Group’s response ishighly agile to the extent that original drafts are reworked
to reflect any opinions expressed. I highly appreciate thatagility which I think is based on a sensitivity to trends,
which is characteristic of a new company launched in2018, as well as a high level of awareness of recent
governance reforms.
Having said that, to pursue even greater effectiveness, I
think we need to separate the Board’s supervisory andexecution functions a little more clearly. To use a sports
analogy, you should leave play up to the executive
officers as much as possible, and directors should focus
on the role of coach, which conveys game strategy andmonitors outcomes while watching the game and theplayers’ movements from outside the court. If players also
serve as coach, they will tend to say it doesn’t mattereven when they make a mistake, which, in turn, weakens
the supervisory function. Naturally, the materials forresolutions will differ depending on whether they areused for decision-making or monitoring. If you shift tomonitoring materials that can track the discussion
process, including dissenting opinions, you can discover
any appropriate opinions that have been buried or any
causes that led to any opinions that were distorted due
to some factors. I feel that strengthening of monitoring inthis manner will give investors greater peace of mind.

What are the challenges in terms of the Group’s
governance and growth strategy?

Shoji Nishio,
Outside Director

11 │Tokyo Kiraboshi Financial Group, Inc.│

Mr. Nishio: As part of future growth strategy, in theprocess of considering how to create new financial
services while coordinating all Group functions, we
opened the digital UI Bank in January as a step on theway to promoting digitalization. I recognize that this is an
initiative in a new area and was the most importantresolution of FY2021. The shape of financial services willchange in the coming era and digitalization and DXrelated issues will be most relevant. In that sense, I feelthat we need to have people in the management team
who are specialists in these fields.
Mr. Nomura: Yes, indeed. The Group strategy of how tocreate new services by integrating additional non-financial
services has become increasingly important as Group
governance has come under scrutiny in recent years. I
think the opening of UI Bank provided an opportunity toraise Group management awareness at this stage ofdeveloping complex services.
An increase in the number of new services going forward
may, depending on the quality of those services, give rise
to reputational risks in which unpopular sentiment amongcustomers could threaten the entire Group. Of course,
the aim is to provide high-quality services, but I think wealso need to deepen the discussion on pursuing moresophisticated risk management from the perspective ofGroup brand management.
Mr. Nishio: I believe that the current hotly debated capital
policy is also an important theme. While we are starting
to see the impact of the Russia-Ukraine situation emerge,
I think it will become important to share medium- to longterm strategies including the capital policy well inadvance at the earliest opportunity, and to formulate
strategies with a deliberative stance that incorporates theopinions of outside officers.
Mr. Nomura: Some areas are yet to be discussed due totime requirements. Right now, the emphasis is onachieving the Medium-Term Business Plan, but I think weshould debate more deeply the fundamental impetus forthe plan, which is how to leverage our strengths as aregional bank in the Tokyo area, and explore more
precisely who we are.
How do we get people who live in the Tokyo area, where
we have to compete with megabanks, to feel morefamiliar and sympathetic towards us as a regional financial
institution and to recognize us as a main bank?
To do that, we have to meticulously pick up on regional
issues and pursue exactly what local people want andthe kind of financial services that megabanks can’t
provide. And it is important to create a partner
relationship where people feel they can rely on and visit
Kiraboshi for help when they have a problem.
As a venue for building these relationships, the word“platform” has become the buzzword in the sense ofcreating a business model that develops various roles in athree-dimensional space. The concept is still fairly vague
and there is a risk that we could end up sleeping in thesame bed and having different dreams, so we have todevote considerable time to materializing that platform
watchword going forward.
Mr. Nishio: This might sound a little harsh, but we also
have to question just how well the name Kiraboshi isrecognized by people in the Tokyo area. Do people havethe same awareness of Kiraboshi Bank being a Tokyobased bank as other regional banks that bear the nameof a region. I think we should treat this as a major issue
when considering future branding.
Mr. Nomura: I agree. Also, since the Tokyo area boasts
an abundance of business opportunities, building
relationships of trust along with branding is key. For
example, we need to aim for developing business that
nurtures companies that have potential but are unable toget loans from megabanks that emphasize past trackrecords because they have only just been established.
I think the Group has the potential to move such cases
forward in a positive way. It is easier to generate newideas precisely because we are in Omotesando not
Otemachi. If you can nurture bankers who are experts inbusiness with such new ideas, you should be able to earn
your place in history as a person or organization who
brought new ideas into Japan like Meiji-era entrepreneur
and business leader Eiichi Shibusawa.
Mr. Nishio: You have to be a professional in that field to
do that. So, the first priority is for each and every one of
us to approach everything we do with a sense of
professionalism. That will ultimately lead to higher
individual productivity.
Mr. Nomura: People follow people. I think the term
Kiraboshibito, or the people who put the Kiraboshi
philosophy into practice, really epitomizes eachindividual’s effort to polish themselves and let theirprofessionalism shine forth.

How would you like to be involved in the Groupas an outside director going forward?

Mr. Nishio: The key role of an outside director is basicallyto provide a corporate governance perspective. In
addition to monitoring the maximizing of profits andpreventing scandals, we must sincerely supervise theinvolvement in the formulation of strategies over the
medium to long term and the progress management ofbusiness strategies. To that end, I want to play my partwhile maintaining contacts not only with the Board of
Directors, but al so with the managers of Group
companies, employees, and shareholders by using various
opportunities.
Mr. Nomura: In recent years, as we often hear loudcomplaints, stakeholder-type company management isprone to pretend they are working for the benefit ofanother stakeholder and get the remaining stakeholders
to be patient. Ultimately, this will result in a management
style that lacks any sense of urgency without pursuinganyone’s interests after all. It is extremely difficult to build
a business model that satisfies all stakeholders, but weneed to tackle that challenge boldly. The integrated
report is a tool for illustrating to stakeholders the businessmodel that we are trying to implement and thereby
improving it. During this process of in-depth dialogue or
engagement, outside directors play the role of coaches
by monitoring and urging players to move forward evenby one millimeter, sometimes encouraging them andsometimes scolding them to get them moving. I want tofirmly accompany Tokyo Kiraboshi FG in its various
challenges so that it can become a Group that is reallytrusted by its stakeholders.

Shuya Nomura,Outside Director│Tokyo Kiraboshi Financial Group, Inc.│ 12

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from the Chief Financial Officer
YoY change in consolidated net income

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

Lower credit costs
Controlled credit costs by strengthening credit management
systemInitiatives such as building main bankrelationships and business financing
I n c re a s e d i n te re s t o n l o a n s d u e to ahigher loan balance, and enhancementof co mmissio n inco me fro m co rp o rate
customers primarily on business financing
Reduced gain or loss onsale of bonds and stocks
Initiatives to create a profit
structure not reliant on gainon sale of securities

Gross core business profit

relationships, and non-interest income also increased onstronger business financing, such as LBO loans, etc.
We have also enjoyed real benefits from the merger interms of system integration and branch efficiency, withexpenses reducing year on year and net core businessincome, which is a good representation of our main
business profits, increasing significantly.
We are strengthening our systems through such means asproviding support to business partners after securing acertain degree of coverage based on business feasibility
evaluations and enhancing our risk prediction management.
Strengthening our credit management systems in this way
has resulted in a year-on-year decrease in credit-related
expenses, but there are also concerns that the risk of adeterioration in our loan portfolio may increase so weneed to pay close attention to future trends.
We are pressing ahead with our new business model inwhich Group companies work together to resolve thevarious issues that customers are facing. As a result,consolidated net income increased by ¥14.0 billion year
on year to ¥18.1 billion in FY2021.

FY2020 (actual)

FY2021 (actual)

YoY change¥69.2 billion¥78.6 billion+¥9.4 billion

Initiatives such asbuilding main bankrelationships andbusiness financing (+)
Gain or loss onsale of bonds
and stocks
(-)

4.1

FY2020(actual)Others+2.6

Equity method
profit or loss

+6.5

Reduction of
expenses
Merger costs

+1.7
Total

+2.7

+2.0

Interest on
loans

+3.4

＋14.0

+1.0

Lower credit
costs
(+)

18.1

Others(+)

Equitymethodprofit or loss(+)

Progressof costreductions(+)

Credit costs

Performance Review: Previous Medium-Term Business Plan through First Year of
Current Medium-Term Business Plan (FY2021)
In addition to concerns over a potential resurgence in
COVID-19 infections and uncertainty over the post-COVID
business environment, the uncertain business environment
could be prolonged by the recent resource prices
remaining at high levels and geopolitical risks in regions
such as Russia and Ukraine. (Future trends for interest
rates, foreign exchange rates, and stock prices also remain
in an unstable situation.)
Against this background, we have continued to steadily
execute the strategy we determined when the Group was
incepted. The benefits of streamlining our organization andreorganizing branches to achieve greater efficiency, andbuilding Group company infrastructure during the previous
Medium-Term Business Plan launched in 2018 have started
to manifest themselves in the current Medium-Term Business
Plan, which was started in FY2021, in terms of cost and topline management. Our efforts to strengthen our managementbase and solidify our sales platform have boosted our ability
to provide different services to customers. As a result, in
FY2021, net interest income increased on the back of higher
income from interest on loans as we built more main bank(billion yen)

Progress of cost reductions
Completion of system integration resulted in a significant reduction in oneoff merger costs. Streamlined personnel expenses.

Equity method profit or loss
Recorded an equity method profit from the sale ofreal estate by a subsidiary of a related company

Commission income from
corporate customers

Bonds and stocks(market division)

-5.6

+2.4

FY2021(actual)

Total

+5.8

Progress of major KGI in the Medium-Term Business Plan
We achieved nearly all the key goal indicator (KGI)
targets for FY2021, the first year of the current
Medium-Term Business Plan.
As a result of efforts to prioritize cost efficiency inthe previous Medium-Term Business Plan, the core
overhead ratio (OHR) declined to the 65% level in
FY2021. Previous efforts to build Group company
infrastructure helped generate a considerable

increase in profits from customer business, andreturn on equity (ROE) improved to 5.7%.
We intend to aggressively invest the equity method
profit recorded in FY2021 into promoting Group DX
and other areas that will boost business efficiency.
By doing so we will execute our current policies in a
steady and more accelerated matter and further
improve customer services.

Net interest income¥58.7 billion¥65.6 billion+¥6.9 billion

Non-interest income¥10.4 billion¥12.9 billion+¥2.5 billion¥(52.4) billion¥(51.4) billion+¥1.0 billion

ROE (FG consolidated)¥16.7 billion¥27.2 billion+¥10.4 billion

Core OHR (expense ratio)

75.7%

67.0%

65.3%

-1.7%pt¥4.1 billion¥10.0 billion¥18.1 billion+¥8.1 billion

Expenses
Net core business income

FY2020 (actual)
1.3%

FY2021 (plan)
3.2%

FY2021 (actual) Compared to the plan
5.7%

+2.5%pt¥(8.4) billion¥(6.3) billion+¥2.0 billion

Profit attributable to owners of parent (FG consolidated)

Ordinary profit¥8.8 billion¥26.0 billion+¥17.1 billion

Profit from customer business¥1.4 billion¥12.4 billion¥12.6 billion+¥0.2 billion

Net income (Kiraboshi Bank, non-consolidated)¥4.8 billion¥18.4 billion+¥13.6 billion

Contribution of subsidiaries to consolidated income¥0.3 billion¥(0.4) billion¥0.1 billion+¥0.5 billion

Profit attributable to owners of parent (Tokyo Kiraboshi FG, consolidated)¥4.1 billion¥18.1 billion+¥14.0 billion

Capital ratio (FG consolidated)

8.7%

8.6%

8.4%

-0.2%pt

Credit-related costs

13 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 14

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Message from the Chief Financial Officer
Financial Management and Capital Management
We recognize that capital policy is an important key
within our Medium-Term Business Plan. We intend to
manage capital by maintaining a balance between
the capital ratio, which indicates capital soundness,and ROE, which indicates capital efficiency, and aim
to implement an appropriate return of profits toshareholder with a target total shareholder return
ratio of around 20-30%.
Considering our low stock price level with the pricebook-value ratio (PBR) of 0.2 times, improving ROE is
one of our top priorities in order to improve capitalefficiencies.
Risk assets are related to capital, which is thedenominator of ROE. In order to maximize profits,
which are the numerator of ROE, we need toappropriately control top-line earnings and risk
assets, and expenses.

Changes in risk assets

expand earnings relative to risk assets (interest on
loans and commission income).
We will engage in a more risk assets-conscious
business operation and promote a shift to highly
profitable assets, while also incorporating businesses
with different risks and returns to stabilize earnings
and build a more profitable business portfolio.

(billion yen)PE funds
Commercially
viable loans

Commercially
PE funds
viable loans Securities, etc. +11.6+281.9+18.8

Others+9.1+146.1+247.6

Others+28.9

3,976.6-28.8

3,555.0

3,555.02022/32022/33,261.4

Capital management
We will continue to consider various capital policies
and respond in a flexible and balanced manner after
carefully scrutinizing changes in the businessenvironment and our level of capital adequacy inorder to secure a capital ratio above 8%.

2021/32024/3(Medium-TermBusiness Plan)

Further enhance shareholder returns

Analysis of financial management factors

Numerator: Net income
Denominator: Equity capital

While maintaining capital soundness, we will further
enhance shareholder returns and conduct balanced
capital management. We achieved a total shareholder
return ratio after deducting equity method profit,
which is to be used for investment in growth areas, ofapproximately 20% in FY2021 and aim to achieve a
return ratio of 20-30% from FY2022 onwards.
These initiatives are designed to help us control
capital, which is the denominator of ROE andexpand profits, which are the numerator of ROE, so

ROE

Improved capitaleﬃciency

Implementing
management by maintaining
a balance between capital ratio,
which indicates capital soundness,and capital eﬃciency(Capital management)
Continuing to consider
various capital policies

Numerator: Net income

RORA

Capital ratio

Numerator: Equity capital

Denominator: Risk assets

Improved risk/return

Ensuring soundness

Denominator: Risk assets(Risk asset control)
Increasing earnings relative to risk assets
Switching to highly proﬁtable assets
Building a highly proﬁtable portfolio

FY2021 (actual)

we can aim to achieve ROE of approximately 6% in
FY2023. We intend to optimize the allocation ofmanagement resources throughout the Group andbuild a resilient earnings structure.
We will also continue to monitor risk assets basedon appropriate risk/return analysis and intend tomaintain a return on risk assets ratio (RORA), whichis calculated by multiplying ROE by the capital ratio,of between 0.4 and 0.5% during the three years of
the current Medium-Term Business Plan.

Cross-shareholdings
The Group has formulated the Basic Policy on Crossshareholdings and generally pursues a policy of not
holding shares in business partner companies, etc.
unless it is judged that a cross-shareholding will help
enhance the Group’s corporate value over the medium
to long term by maintaining and strengthening abusiness relationship with a business partner. We have
reduced our amount of cross-shareholdings byapproximately ¥10 billion over the past five years.

The Board of Directors regularly verifies the Group’s
cross-shareholdings at least once a year to check
whether the purpose of any holding is appropriate, theeconomic rationality, and the need to maintain andstrengthen overall relations with a business partner.
In terms of economic rationalit y, we regularly
scrutinize the relationship between benefits andrisks associated with holding a cross-shareholding
and the cost of capital.

Stakeholder engagement

FY2022 (plan)

FY2023 (plan)

ROE (FG consolidated)

5.7%

5.9%

5.9%

Capital ratio (FG consolidated)

8.4%

8.3%

8.3%

RORA (FG consolidated net income basis)

0.4%

0.4%

0.5%

Total shareholder return ratio

20%

20%

20～30%

Assumption for total
shareholder return ratio(after deducting equity method profit)(After deducting ¥6.5 billion)
FG profit: ¥11.6 billion¥75 dividend(After deducting ¥3.5 billion)
FG profit: ¥16.0 billion¥105 dividend

15 │Tokyo Kiraboshi Financial Group, Inc.│●2022/3 ─ 2024/3

Securities, etc.

We will reduce base costs through the streamlining ofhead offices and branches and the system integrationthat we pursued during the business integration andmerger. We intend to use the equity method profit
associated with the sale of Group real estates to fundthe necessary investment into growth fields such as
DX and boosting management efficiency.

We will actively promote transactions for main bankrelationship building and engage in LBO financing
and equity investment as commercially viable credit
associated with business transfers, and we seek to(Cost control)
Reducing base costs andinvesting in growth areas(billion yen)

Cost control

Controlling top-line earnings and risk assets(Top-line control)
Building main bank relationships
and business transfers●2021/3 ─ 2022/3

We aim to provide platform functions that can help
solve various issues through initiatives such as ourlife plan support business, digital banking business,start-up support, and succession planning business,and devote ourselves to creating new value forcustomers and promoting the development of all
our stakeholders.

We w il l co n t i n u e to a c t i ve ly d is cl o s e u s e f u linformation to our shareholders and investors andconsistently engage in interactive dialogue. I ask foryour continued support for our endeavors.

FG profit:¥20.0 billion│Tokyo Kiraboshi Financial Group, Inc.│ 16

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Non-financial Highlights

Financial Highlights
Profit attributable to owners of parent (millions of yen)

Loan balance (hundred millions of yen)

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

Tokyo Kiraboshi Financial Group

Kiraboshi Bank (non-consolidated)■CO2 emissions¥18,183 million■Individuals ■SMEs■Local governments¥43,697

4,692

39,380
1,423

4,577

1,174

5,782

CO2 emissions reduction rate (vs. FY2013)* The calculated CO2 emissions represent the entire Group’s Scope 1 andScope 2 emissions.

hundred million

37,698

7,657■Medium and large-sized companies

Power usage (thousand kwh)

41.04

1,033

6,477

50.76%

46.91

5,832

5,409 t-CO

FY2020

FY2021

12,902

12,772FY2019FY202012,079thousand kwh

2

29,881

23,892

26,327

8,488
7,689

7,300

6,999

2020/3 end

2021/3 end

2022/3 end

4,161

2020/32021/32022/3

FY2019Deposit balance (hundred millions of yen)Core OHR (hundred millions of yen, %)Kiraboshi Bank (non-consolidated) + UI Bank (non-consolidated)

Kiraboshi Bank (non-consolidated)■Individuals ■Corporate■Others ■UI BankCore OHR* Core OHR＝×100
Gross core business profit■Expenses■Gross core business profit

46,60350,033
2,065¥51,934
hundred million

1,884

17,547

14,695

1,362
1,393

77.0

75.7

30,402

2020/3 end

2021/3 end

2022/3 end

522

524

2020/3 end

2021/3 end

Consolidated ROE (%)

Tokyo Kiraboshi Financial GroupTokyo Kiraboshi Financial Group

Capital ratio* Consolidated ROE＝

8.65

8.74

2,852

2,852

hundred million

692

Consolidated capital ratio (JGAAP) (hundred millions of yen, %)■Capital

17.29%

8.41%¥2,990

¥514

15.98

2022/3 end

FY2019

15.31

16.11
14.49

hundred million

FY2020

FY2021

Profit attributable to owners of parent(Net assets at the beginning of the period +net assets at the end of the period)/2

■SF

■PB

■Consulting■Digital

5.77%

375

483
74

1,550
307

1.37

17 │Tokyo Kiraboshi Financial Group, Inc.│

2020/3 end

2021/3 end

FY2021

SF (Structured Finance) Dojo

hundred million

2022/3 end

FY2020×100

385

2021/3 end

FY2019Number of participants in the professional human resource development “Dojo” training programs

2.60

2020/3 end

16.82%¥786

677

30,601

Expenses

Ratio of female managers (%)

65.3%

18,776

29,841

Ratio of those employed as mid-career
professions to all managers (%)FY20212022/3 end

FY2020

FY2021

A program to develop human resources capable of making high-level
financial support proposals to corporate customers, offered in thefollowing three formats:Training camp format: a program in which participants study caseswith a high degree of difficulty, exploring solutions and sharing ideas
among them to inspire and learn from one another
Forum format: a discussion-based program for employees who wantto enhance their knowledge
Web format: a lecture-based program for any of those who areinterested in, and want to learn about, sales in corporate banking

PB (Private Bank) Dojo

A program to develop human resources capable of making high-level
solution proposals to high-net-worth customers and business owners
in the areas of asset transfer and management, offered in thefollowing two formats:Training camp format: a program to enhance private-banker skills andmind-set practicallyWeb format: a program to gain knowledge on the market, economic
affairs, and other related topics useful for asset management│Tokyo Kiraboshi Financial Group, Inc.│ 18

Tokyo Kiraboshi Financial Group’s Value Creation

Value Creation Story

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Financial services
which change with the times
New needs have been created
day to day as society changes.
Finance has supported people’s dreams

With the management philosophy

and challenges, and local communities
through products and services
all through the ages.

“To be a ﬁnancial group for small
and medium-sized enterprise customers
and individual customers in the Tokyo metropolitan areathat will contribute to the development of local communities
through comprehensive ﬁnancial services,”Tokyo Kiraboshi Financial Group, which aims to develop

Customer needs/
Social issues to address

Creation ofshared value with society

Customer needs change with the times,

Facing diversifying customer needs
and social issues, the Group will work
to create shared value with stakeholders
under the Value Creation Story.
Then, we will aim at
the Kiraboshi Group’s sustainablegrowth and an improvement ofcorporate value
with the progress in society.

and issues the contemporary society
faces are complicated and diverse.
The Kiraboshi Group will respondto customer needs andsocial issues, using
the Group’s collective strength.

“a comprehensive service business that is also strong in ﬁnance”
in order to meet diversifying customer needs,
will seek to contribute to creating customer value
by providing products and services tailoredto our customers.

Realization of “comprehensive service businessthat is also strong in ﬁnance”
The Group will contribute to creation ofcustomer value and development oflocal communities.

19 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 20

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Tokyo Kiraboshi Financial Group’s Value Creation Process

We will contribute to creating customer value by providing ﬁnan ce-based comprehensive services required by communities.

D i g i t al S t rat egyCreating values

・Resources recycling

・Net assets

・Increase in interest in
sustainability
Human Capital・Declining birthrate and aging
population

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

Financial Environment
・Geopolitical risks・Expansion in gap between
loan and deposit
・Competition/collaboration
through entry of diﬀerent sectors
・Increase in digital transactions

21 │Tokyo Kiraboshi Financial Group, Inc.│

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

Social/Related Capital・Collective strength of Kiraboshi Group・Branch functions matchingregional characteristics
・Asian network(China, Thailand, Vietnam, etc.)
・Customer baseytegthrough digital

realize with various

ﬁnancial services

business partners

Hy・Longer average lifetime

Intellectual Capital

New future toa・Depopulation in rural areas

・Kiraboshibito

Providing new values

teg・Decrease in population

・Diverse human resources

Reform promo tion started
from Tokyo-based
platform owner

er S
tr

Demographics

Business ModelR

・Loan assets

C u s t ome r S t r a・Climate changes

te Cus tom

Financial Capitalora

Global Environment

OUTCOME

Creation of shared value

rpManagement resources utilized

the Group’s abilities

il
eta

INPUT

Co

External
Environment

for customers using

um

an

Res

ource StrategyBase That Supports Value Creation□ Good record of and expertise on
supporting local companies□ Speedy actions for technology□ Highly professio nal and extensive
ﬁnancial solutions□ Voluntarily improving Kiraboshibito

Individual Customers

Financial Capital
・Proﬁt attributable to ownersof parent¥18.1 billion
・ROE

Improving quality of life byproviding new values

5.7％
Corporate Customers

Human Capital
・Increase in engagement

Improving corporate value by
providing various solutions

・Ratio of female managers 16.8％
・Participants in Kiraboshibito
training course
843
・Ratio of mid-career managers
17.29％
Intellectual Capital
・Provision of new ﬁnancial services including
collaboration with external businesses, andcreation of new business domains
・Comprehensive ﬁnancial
services by the entire Group

Social/Related Capital・Individual Internet users
151,000 users
・Number of UI Bank accounts
67,000 accounts
・Consolidation of bases

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(Results as of March 2022)│Tokyo Kiraboshi Financial Group, Inc.│ 22

Tokyo Kiraboshi Financial Group’s Value Creation

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Resources ofValue Creation Competitive Advantage of Tokyo Kiraboshi FG

Rich Tokyo market

Speedy actions for technology

Tokyo is a rich market of ¥115 trillion accounting for one-ﬁfth of Japan’s

The system integration of three banks was completed in May 2020. After
that, we are proactively working on DX in order to fulﬁll needs, such as
customers’ digital-oriented attitude, cashless payment, and non-face-to-faceresponses, which have been rapidly increasing due to the COVID-19
pandemic. In November 2021, we released “LaLaQ,” a smartphone app
fusing existing “Maekyu” service and digital money “LaLaPay,” which was
designed to be more user-friendly. In addition, UI Bank Co., Ltd., a digitalbank using cloud, was launched in January 2022. As of the end of March
2022, with 67,000 accounts opened and deposit balance of over 130
billion yen, the bank is taking on challenges in new domains, such as
soliciting seniors and alliance with various business operators.

GDP. At present, the Kiraboshi Group’s share in Tokyo is a level of 3% interms of the number of customers with main bank transaction
relationship. This indicates that there is still much room for development.
Due to the size of the market, competition is intense. However, we willcontribute to improving customer’s corporate value by providing higher
value-added services. The Kiraboshi Group has also handled a number ofcooperative projects with Tokyo Metropolitan Government and otheradministrative bodies.

Highly professional and extensive ﬁnancial solutions

Voluntarily improving Kiraboshibito

In order to meet diversifying customer’s needs, we provide highly
professional and extensive ﬁnancial solutions, including equity ﬁnanceand structured ﬁnance. By working on ﬁnance for medical institutions,
M&A advisory business, etc., we will contribute to sustainable
development of local economy and support for infrastructures of local
communities, and assist customers to solve issues and improve corporate
value. In SF Division, MF Division, Medical and Welfare Business Division,etc., Kiraboshi Bank has worked on resolution of small and medium-sizedbusiness’s issues and sustainable growth of community healthcare
through mezzanine ﬁnance and capital subordinated loans for medical
institutions, in corporation with Kiraboshi Capital Co., Ltd.

Under three principles of action guideline for “Kiraboshibito,” all oﬃcers
and employees are aiming for the development of the organization
through contributions to society, and have realized self-fulﬁllment andone’s own happiness. Aware of business sustainability, we are aiming to
be an organization that ﬁnds joy in all people working together to achieve
the goals.

23 │Tokyo Kiraboshi Financial Group, Inc.│

Three principles of action guideline for“Kiraboshibito”
1. An individual with “high aspirations”

2. An individual who always thinks “how it can be done”
3. An individual who is committed to results, who continuously takes oncourageous challenges│Tokyo Kiraboshi Financial Group, Inc.│ 24

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Mechanism ofValue Creation

Business Model and Value to Provide

A business model of the Kiraboshi Group is providing solutions meeting customers’
needs, aiming at a mutual growth of customers and the Group. Previously, banking
business meant gathering deposits and ﬁnancing such funds. Going forward,

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Solving local issues with a wide range of products and services not limited to ﬁnance“Comprehensive service business that is also strong in ﬁnance” at which the Group is aiming meansthat our products and services contribute to people’s lives and value creation in business activities,
as well as development of local communities. By expanding products and services, we will provide
new values beyond original ﬁnancial functions, and contribute to resolution of social issues.

however, we will provide for corporate customers various solutions suitable to eachcompany’s growth stage, and for individual customers consulting services suitable tothe era of the 100-year lifespan. By thoroughly focusing on comprehensive service

New ﬁnancial world UI Bank opens

business not limited to ﬁnance, we will contribute to resolution of social issues, and,

Early realizing the world where anybody can naturally use aat the same time, lead it to the Group’s sustainable growth.

digital bank, we will create a new ﬁnancial market. We assign
a concierge to each branch, and hold smartphone classes incooperation with NTT DOCOMO so as to proactively support
seniors to work on digital devices. Going forward, we plan toprovide various services to support users’ lives in general.

01

Creating values forcustomers using theGroup’s abilities

Providing new

03“LaLaQ” and “Maekyu” services provided
by Kiraboshi Tech that proposes a new way of working
The Kiraboshi Group, which has provided an internal loan

values throughsystem “Maekyu” service since 2005, started “LaLaQ” inservices

services can be used, pushing ahead with digitalization.

digital ﬁnancial

which both a digital wallet “LaLaPay” and “Maekyu”
The Group will increase wellness of workers, and propose
a new way of working.

Pluralistic platform starting from Haneda area

New future to realize
with business
partners

02

At “KicSpace HANEDA,” an incubation base within Haneda
Innovation City, we provide not only ﬁnancing but also othervarious functions through cooperation with external partners,
administrative bodies, and local ﬁnancial institutions, forexample, periodically holding “Kiraboshi Pitch,” an event tofacilitate

collaboration

betweenstart-ups

and

large

corporations.

25 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 26

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Initiatives for fostering“Kiraboshibito” who supports

value creation and an improvement
in engagement of employees.
Tokyo Kiraboshi Financial Group

Takeshi Miura,
Director

were indicated,indicated, andand various
variousaction guideline wereareestablished,andsystems are
established,
more more
oﬃcersoﬃcers
and employemployees
began
to intomoveaction,
into action,eesbegan tomove
sayingsaying“First,“First,
let’s
let’s it!”,
do it!”,
newmindset
mindsetadded.
added. Oﬃcers
Oﬃcersdowithwith
thethenewthemworkingchanged most.
most. IIamamveryveryhappy
happyseeing
seeingthem
workmorevigorously
than
ever.
Meanwhile,
there
is is
a
ing
more
vigorously
than
ever.
Meanwhile,
there
problem.
If IIfask
them,
“what
is yourindividuality?”,aproblem.
I ask
them,
“what
is yourindividualifew people
can answer
it. “Individuality”
is theisbestty?”,
few people
can answer
it. “Individuality”
thestrengthfor eachof them,and they
here
make
best
strengthfor eachof them,andare
they
areto
here
to
best useit. ofTherefore,
I would
like liketo tell
all allof
makebestofuse
it. Therefore,
I would
to tell“Kiraboshibito”,“youareareOKOK
justjust
as youare.”of“Kiraboshibito”,“you
as youare.”

Yuki Takahashi,

Outside Director

At the timing of starting the Medium-Term Business Plan (FY2021 to FY2023), Tokyo Kiraboshi Financial Group newly establishedthe “Kiraboshi philosophy” and at the same time indicated three principles of action guideline for Kiraboshibito to implement thephilosophy. Why does the Group need “Kiraboshi philosophy”? Director Takeshi Miura and Outside Director Yuki Takahashi had
a talk about the background and purposes of establishment of the philosophy, as well as initiatives for fostering “Kiraboshibito.”

The reasons for the establishment of“Kiraboshi philosophy” and“three principles of action guideline”
ー Please tell me the background and purposesof the birth of “Kiraboshibito” in charge of the
Kiraboshi Group’s value creation.
Miura: Tokyo Kiraboshi Financial Group is a newcompany formed by merging three banks in May
2018. When post-merger integration tasks weresettled down, we thought it would be important topull oﬃcers and employees into the same direction
to aim at the next stage.
In order to clarify the vision we should aim at as a
new ﬁnancial group, and explicitly indicate a senseof value, a concept, and action guidelines which alloﬃcers and employees should share, the “Kiraboshi
philosophy” and “three principles of action guideline
for Kiraboshibito” were formulated. In addition,
reforming the personnel system, we internallydemonstrated our preparedness.
Ms. Takahashi was also deeply involved in theformulation of the “Kiraboshi philosophy” and “threeprinciple of action guideline for Kiraboshibito.”
Takahashi: I took oﬃce as Director in 2017, one
year before the Company’s name was changed to“Tokyo Kiraboshi Financial Group” at the same timeof the merger of three banks. At that time, the ﬁrst
word I said was “Kiraboshibito.” It is often said that“a company depends on human beings.” Not to

27 │Tokyo Kiraboshi Financial Group, Inc.│

speak of customers, each employee is important. In
hope that the bank would be a place where employees
say “we are happy working here”, the concept of“Kiraboshibito” was born. Since then, we havecontinued initiatives for fostering “Kiraboshibito.” Thebiggest initiative is training, isn’t it?
Miura: That’s right. The biggest one is training by
job rank. In the ﬁrst ﬁscal year, training was provided
for managerial personnel such as branch managers
and assistant managers. In the current ﬁscal year,
the second year, training has been held for section
managers and assistants to Director. In the nextﬁscal year, training for all employees is scheduled
to be completed.
The training focuses on not teaching something,
but having participants think of what “Kiraboshibito”
is, and express their thought in words of their own,
and handing down such thoughts.

ー One year has passed since the initiatives for“Kiraboshibito” started. From an outside perspective,
what can the Kiraboshi Group’s employees berecognized for? Please tell me about issues, as well.
Takahashi: I always say, “I am the happiest Outside
Director in the world.” Because I have a lot ofcolleagues with whom I can share happiness in thisCompany.
When I ﬁrst took oﬃce as Outside Director,
unfortunately, no “Kiraboshibito” existed here.
However, I think, after the philosophy and theDiversity & Inclusion means recognizing
each other’s diﬀerences
ー To put the “Kiraboshi philosophy” into practice,
I think employees’ work-life balance and the healthand productivity management, etc. would be important.
Could you tell me about initiatives for them?
Miura: As the modern society is stressful, mental
health is a signiﬁcant issue. It is essential to early
respond to and treat mental disorder. Therefore,
we increased the number of industrial physicians,
and adopted a checklist for stress which can bea systemis important,readily usedusedonline.
online.While
Whilesuchsuch
a systemis importan insuﬃcientamountof communication
would
ant,
an insuﬃcientamountof communication
cause us
to misschanges.
Accordingly,
we started
would
cause
us to
miss changes.
Accordingly,
wea one-on-one
meeting fromthe previous
year.
starteda one-on-one
meetingfrom theﬁscal
previous
I hopetheI hopemeetingprovideopportunities
to
ﬁscal
year.
the canmeeting
can provide
opportutalk about
othermatters
thanwork,thanand allow
tonitiesto talk
about
othermatters
work,usandﬁnd subtleof employees.
allow
us to changes
ﬁnd subtle
changes of employees.
Froma view
point pointof promoting
work-life work-lifebalance,Froma viewof promoting
we subsidize
self-improvement,
hold seminars
andbalance,we subsidize
self-improvement,
hold seminetworking
events for events
employees
who returnedtonars
and networking
for employees
whowork afterchildcareand encourage
returned
to takingwork after
takingleave,
childcareleave, andmale employees
to take childcare
leaveadequately.
encourage
male employees
to takechildcare
leave
Although it Although
is very toughto workraisingaadequately.
it is very
toughwhile
to work
while
child, giving
full
attention
to raisingchild awould
raisinga child,
givingfull attention
to araising
child
make theresttheof lifefulﬁlling.
intendWe
to
would
make
restmoreof lifemore We
fulﬁlling.
enhancesupportbetterfor
work-life
intendto theenhancethesystem
supportforsystembetterbalance. balance.
work-life

ー The reform of work style and the promotion of diversity
have been required more than ever. What is the diversity
in life and work style the Kiraboshi Group envisions?

Miura: I believe we could come this far thanks tosupport from a lot of outside people including Ms.
Takahashi. In the course of promoting initiatives for
new business, a number of mid-career outsidehuman resources have participated. In addition, theemployment extended to age 70 started in theprevious year. We desire to have more colleagues
who put the “Kiraboshi philosophy” into practice,respecting diverse human resources.
Takahashi: Diversity does not mean only issues onnationalities, gender,
nationalities,
gender, andand age.
age.II believe
believetrue
truediversity
diversiis isindividualsty
individualswith
withdiﬀerent
diﬀerentpersonal
personal quality
quality being
able totowork
work
using
their
individuality,
and
able
using
their
ownownindividuality,
and incluinclusionis accepting
themselvesco-workers
sion
is accepting
themselvesandandco-workers
justjust
asas they
are.
We
would
liketotocontinue
continueto
to encourage
encourage
they
are.
We
would
like
each
employee
can beof his/herthem sosothatthat
each
employeecanawarebe awareofindividuality
and turnand
it toturnan advantage.
his/her
individuality
it to an advantage.

ー Could you tell me future initiatives for fostering“Kiraboshibito”?
Takahashi: Corporate value is created by humans.
To be “Kiraboshibito”, stars must be on eyes. In otherwords, each person works brightly and actively.
Miura: What
What isis aa key
key point
point toto putput stars
stars onon eyes?
eyes?
Miura:
Takahashi: Actually,
Actually, it
it is gratitude. Close your eyes,
Takahashi:
and count things you should be grateful to, one,
Then, when you open your eyes, stars
two, three... Then,are ononyouryoureyes.
eyes.
spreadingthe chain
of
are
By By
spreadingthe chainof gratigratitudeacrossthe Company,
hope
to increasetude
acrossthe Company,
I hopeI to
increase“Kira“Kiraboshibito.”
boshibito.”The
initiative
forfor“Kiraboshibito”
has
just
enteredaTheinitiative“Kiraboshibito”
has
just
enteredprologue.
WeWe
intendto continue
the initiative
until
aprologue.
intendto continue
the initiative
each eachof oﬃcers
and andemployees
becomes
able
to
until
of oﬃcers
employees
becomesable
behave,thinking
about“Kiraboshibito”
everyday.
tobehave,thinking
about“Kiraboshibito”
everyday.

Miura: Ms. Takahashi, you are a companion andfellow trying hard together rather than an outside
supporter. I would like you to continue to give us a
supportive push and walk with us.

│Tokyo Kiraboshi Financial Group, Inc.│ 28

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Status of Progress on the Medium-Term Business Plan
KGI

KPI

Financial targets

With regard to KGIs (financial targets) under the
Medium-Term Business Plan for FY2021, the targets
were generally achieved in ROE, net income, Kiraboshi
Bank’s core OHR, profit from customer business, etc.
This is because of the promotion of transactions formain bank relationship building; the increase in businessfinancing; the steady growth in income from fees andcommissions from corporate customers with the above;and the advance in cost-cutting mainly in personnel
expenses through more efficient management.

ROE <FG consolidated>Core OHR <Kiraboshi Bank non-consolidated>

Net income <FG consolidated>(%)

Core OHR (%)■ Expenses (Unit: ¥100 million)(Unit: ¥100 million)

5.7
5.9

77.0

75.7

522

524

5.9

Planned3.2

181

Planned
67.0

65.3
514

57.1
485

57.3

195

200

2.6

41
1.3

20/3

21/3

22/3

20/3

23/3
24/3
(planned) (planned)

21/3

22/3

23/3
24/3
(planned) (planned)

Profit from customer business<Kiraboshi Bank non-consolidated>

Contribution of subsidiaries toconsolidated income <FG consolidated>(Unit: ¥100 million)(Unit: ¥100 million)

20/3

21/3

22/3

23/3
24/3
(planned) (planned)

Capital ratio <FG consolidated>

14

20/3

21/3

KPI

11

1

4

8.7

8.6

8.4

8.3

8.3

Planned
(4)
22/3

23/3
24/3
(planned) (planned)

400,00Rate of Progress in the Medium-TermBusiness Plan (for three years)■120.5% ■38.8%■52.5%
25.7%

272,22

723

6,000

1,000

1,542
388

600

400

210

March 2022
(results)

127,77

March 2024
(plan)■Gross core business profit (Unit: ¥ million)■Number of employees (Unit: person)
Gross core business profit per head (Unit: ¥ million)
Rate of Progress in the Medium-TermBusiness Plan (for three years)
63.9%

69,221

32.2

29.6

25.0

78,676
2,656

2,767

81,400
2,500

8,488

March 2021 March 2022 March 2024
(results)(results)(plan)

Planned
8.6

3

9With a steady growth in gross core business profit, gross core businessprofit per head favorably progressed to ¥29.6 million (rate of progress:
63.9%). We will push ahead with an improvement in efficiency of theadministrative division of headquarters and optimal assignment of humanresources with reassignment to the sales division, and also promotetransactions with main bank relationship building (promotion of multiple
transactions), etc. to increase gross core business profit, and thereby
further improve productivity.

■Number of loan customers with main bank relationshipin the ¥0.3–10 billion annual sales zone (Unit: customers)■Business succession partners (Unit: customers)■Medical transaction partners (Unit: customers)
Financing to customers with main bank relationship inthe ¥0.3–10 billion annual sales zone (Unit: ¥100 million)

23

234

Planned124

Personnel system reform (Improvement in productivity and optimization of human resources)

(%)

205

126

In the ¥0.3–10 billion annual sales zone, the number of loan customers with main bank relationshipincreased by 723 customers (rate of progress: 120.5%), and financing to customers with main bankrelationship increased by ¥154.2 billion (rate of progress: 25.7%).
In relation to business succession, we provide “loan related to business succession,” “M&A (including
conclusion of advisory contracts),” etc. in collaboration with Kiraboshi Consulting. As a result, the numberof partners was 388 (rate of progress: 38.8%) including companies to which suggestions were made.
With regard to medical transactions, we worked on “financing to medical institutions with main bankrelationship building” and “financing for practice support” mainly in Medical and Welfare Business
Division. As a result, the number of medical transaction partners was 210 (rate of progress: 52.5%)
including institutions that branches support.

140% increase in productivity (Gross core business profit per
head: ¥23 million ➡ ¥32 million)

76

467

Number of loan customers with main bank relationship in the ¥0.3–10 billion annual sales zone: + 600 customers
Financing to customers with main bank relationship in the ¥0.3–10 billion annual sales zone: + ¥600 billion
Build partnerships with over 1,000 customers in business succession
Build partnerships with over 400 medical transaction customers

KPI

Planned100

Corporate customer strategy

20/3

21/3

22/3

23/3
24/3
(planned) (planned)

20/3

21/3

22/3

23/3
24/3
(planned) (planned)

Branch strategy

Reduce the number of offices for corporate customers: a total of 107 offices forcorporate and retail customers and offices specializing in corporate customers (asof end of Mar. 2020) ➡ 54 offices (down 53: as of end of Mar. 2024)
Increase the number of retail-focused branches: 14 retail-focused branches(as of end of Mar. 2020) ➡ 34 branches (up 20: as of end of Mar. 2024)
In FY2021 which is the initial fiscal year of the Medium-Term Business Plan, the offices forcorporate customers were consolidated. Accordingly, with a total of 50 offices for corporate
and retail customers, and offices specializing in corporate customers, the plan progressedfavorably. The number of retail-focused branches also became 56 in total as planned. Goingforward, we will strive to further consolidate branches in consideration of opening of UIBank, and assign optimal human resources in a well-balanced manner.

KPI

Key indicators to evaluate business results

KPI

KPI

Digital Bank businessTransactions with business owners: + 1,000 customers, + ¥50 billion
Kiraboshi Package: 60,000 customers(Unit: users)

Individual Internet users: 68,000 users ➡ 400,000 users
Kiraboshi Bank began to accept online application for individual internet
banking (IB), and renewed its app (began to handle IB features including
money transfer). In addition, UI Bank opened. As a result, the number ofindividual Internet users is increasing.
From now on, at UI Bank, cooperation with sales offices and the callcenter will be enhanced with the aim of achieving KPIs.

400,000
Rate of Progress in the Medium-TermBusiness Plan (for three years)

23.4%

151,952
76,114
8,488Life plan support businessIn cooperation with Kiraboshi Life Design (KLD) Securities, we put
emphasis on strengthening transactions with business owners including
the wealthy class. As a result, the number of transactions with businessowners increased by 1,780, achieving KPI earlier than scheduled. Thebalance of transactions with business owners increased by ¥17.9 billion(rate of progress: 35.9%) as planned.
The number of customers of Kiraboshi Package favorably grew to 27,107(rate of progress: 45.2%). We will continuously work on building up retail
IB senior users, applications for app, and customers opening UI Bank
accounts, as well as provision of services for seniors such as testamentary
trust and “100-year passports”.

■Offices for corporate and retail customers■Offices specializing in corporate customers■Retail-focused branches ■Staffed sub-branches and offices

March 2021 (results)

89

2 20

12 123

March 2022 (results)

46

4

56

10 116

March 2024 (plan)

46

8

34

28

116

■Increase in transactions with business owners (Unit: transactions)■Increase in balance of transactions with business owners (Unit: ¥100 million)

Transactions with business owners Kiraboshi Package (customers)
Rate of Progress in the Medium-TermBusiness Plan (for three years)■178.0% ■35.9%

Rate of Progress in the Medium-TermBusiness Plan (for three years)■45.2%

60,000

1,780
1,000
179
March 2022
(results)

500.0
March 2024
(plan)

27,107

March 2022
(results)

March 2024
(plan)March 2021 March 2022 March 2024
(results)(results)(plan)

29 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 30

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Digital Strategy
New Future of Kiraboshi at Which UI Bank Co., Ltd. Is Aiming

The Kiraboshi Group opened its digital bank, UI Bank, in January 2022.
UI Bank has been positioned at the core of the Kiraboshi Group’s DX strategy and as a company tasked withspearheading the Kiraboshi Group’s growth strategy.
In this special feature, we will introduce the background to the opening of UI Bank and the new future UI Bankis aiming to achieve, as well as Kiraboshi Bank operating its 117 offices in the Tokyo area.

that can respond to the diverse needs of customers from both face-to-face and remote perspectives.

Based on the “Growing your assets in life.” concept, we have repeatedly
discussed and seriously considered how to use the UI banking app toshape the values that customers wish to cherish and what action to taketo increase tangible and intangible assets. UI Bank will continue toconsider and embody initiatives designed to increase customers’ assets
and to explore and pursue true affluence.

(mainly face-to-facetransactions)

EconomyLegislation

Continued low
interest rate policy

Review of regulations
on the scope ofbanking business

Internal environment

Accelerating
digitalization

Society(mainly non-face-to-facetransactions)

Kiraboshi BankUI Bank●Conduct face-to-face consulting
oﬀering high added value primarily
at branches●Solve customer issues by providing
ﬁnancial products and services such asloans, asset management, property
management and succession.

●Provide highly convenient non-face-to-faceﬁnancial services completed via mobile app●Provide non-ﬁnancial services throughAPI links with external partners

atch ionsetnli ltaO n n su
coInﬂows fromexternal
partners

Ext
ern
al
ser collab
vice oras tiveData analysis results

Customer data

Technology

New customers

ign
its/fore
Depos e servicesgexchan

m A
an ss
ag et
em
en
t

Why Kiraboshi Group established a digital bank
External environment

Acquire new customers
from the market
and external partners

FG collaborative
services

Pursue true affluence

New customers

nt
me
ge
na ionma essrty ccpe d su
Pro anUI Bank is able to approach all generations across Japan through its
smartphone app. We plan to harness digital and real capabilities toprovide services to young people in their teens and 20s with whom theGroup had very little contact right through to senior citizens who can be
reluctant to embrace digital change. We also intend to actively
cooperate with players from other industries and become a UI Bank thatis indispensable to the lives of our customers. UI Bank is a digital bankthat harbors limitless possibilities because it can transcend regional andgenerational borders and different business categories.

Acquire new customers
from areas surrounding
branches and work areassTranscend regional, generational, and business category borders

A model that fuses face-to-face and non-face-to-facean

The nature of bank branches has not changed significantly over the past
30 to 40 years despite the dramatic changes we have seen in our worldsuch as the declining population, entry of players from different industries,
and advancing digitalization. The Kiraboshi Group is currently revising its
ideal bank branch model, and we, at UI Bank, are speedily trying to
improve customer convenience while also streamlining business by shifting
to digital operations. The Digital Bank Project will continue to tackle newchallenges as a key initiative of the Group’s overall retail banking strategy
that will fundamentally change our traditional customer contact points.

UI Bank Co., Ltd.

also values people-to-people connections. We cooperate with Kiraboshi Bank to provide face-to-face consulting
this new realm of fusing digital and real services, and we want to work together as a Group to firmly create systems

Create new customer contact points

President,

The strength of the Kiraboshi Group is its collective strength as a corporate group. UI Bank is a digital bank, but it
services to help address issues that cannot be solved through digital means. We are ready to proactively challenge

Message from the President of UI Bank

Toshikazu Tanaka,

Provide customer-oriented services through Group cooperation

Lo[Feature]

Customer datacollection
and analysis

External
partners
Links to non-ﬁnancial
services

Customer data

Competitive environment

Declining population, Diversifying customer behavior and needs Entry of players from Competitive interest
declining birthrate
Sophistication of services required
diﬀerent industries rates and commissions
and aging population

Major changes in the concept of bank branches(customer contact points)

Tokyo Kiraboshi FG customers Tokyo Kiraboshi FG sales base Tokyo Kiraboshi FG Group functions Tokyo Kiraboshi FG sales systems
Growing proportionof elder customers

Fewer branch
visits31 │Tokyo Kiraboshi Financial Group, Inc.│

Rich Tokyo markets

Enhance the collective
strength of the Group

Establish a sales style thatemphasizes in-person consulting│Tokyo Kiraboshi Financial Group, Inc.│ 32

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Digital Strategy
The future targeted by LaLaQ --Maekyu service × digital money

Digital Strategy of Kiraboshi Group
Established the Digital Strategy Division to promotea five-pronged digital strategy
The Kiraboshi Group set up the FG Digital Strategy Division in April 2021 and is now
working to accelerate the Group’s digitalization and DX based on five axes.
We will work simultaneously and concurrently on each strategic theme and promoteindividual strategies such as grasping and understanding needs by expanding

Yukiyoshi Matsuo,
General Manager,
Digital Strategy Division

Full-fledged operation of a FinTech solution as LaLaQ through Maekyu and electronic settlements
The Maekyu service was developed by Kiraboshi
Bank (formerly Tokyo Tomin Bank) in 2005 to enable
employees to receive in-house loans when necessary
within the scope of hours already worked.
Many companies are currently introducing advancesalary payment services, but employees of companiest h a t h av e a d o p te d su ch s y s te m s a re ra isi n g
expectations for technological innovations such as
cashless payments, mobile support, and links to othercompany networks. We were asked to expand theMaekyu service to enable a flexible response to thesediversifying and increasingly sophisticated needs.
Against that background, Kiraboshi Tech released
the LaLaQ smartphone app in November 2021 thatcombines Maekyu and LaLaPay digital money
services. The biggest feature of this app is that you
can recharge your LaLaPay free of charge from theMaekyu service or an ATM. You can also recharge toother companies’ payment services from LaLaPay.
For instance, you can receive your daily shopping
allowance in a lump sum on LaLaPay for immediateuse or allocate it to third-party payment services
t hat yo u us e, etc . T his fa cil it ates t h e d i git al

Recharging
balanceby depositing cash
at an ATMtransformation of money for everyday use according
to different usage situations.
LaLaQ supports the transformation of customer
lifestyles by simplifying previously cumbersome
money transfers and recharging processes andfacilitating the seamless use of money for everyday
use entirely by smartphone.

Employee B

Have anaccount

Bank bBank a⓿Advance preparationof funds for Maekyu

Kiraboshi Tech service

Account in the nameof employee B

Account in the nameof Company A

human resources, and achieve organizational reform.

2

Established UI Bank (Digital Bank) <January 2022>

Form a data analysis team and develop data analysts

Launched the LaLaQ digital wallet app <November 2021>

Build infrastructure and databases to support the use of data

DX inspired by our digital bankFrom“low-cost deposits acquisition”
to“finance × non-finance services”❹Transfer of Maekyu

Shift to management and sales that utilize data
Achieve Group operations
with a greater focus on efficiency
Data arrangement
and analysis

Digital sales

Renewal of intranet and devices to support
more eﬃcient business operations

Company A ❸Maekyu transfer
Have
an accountdata generated from these themes to create synergies from each strategy, reskill

5❷Application

instructions

with external service providers. We also intend to aggregate, analyze, and utilize the1

What is the Maekyu service?
❶Attendance
data links
Maekyu system

customer contact points, transforming sales and business processes, and cooperating

Infrastructure

Introduction of groupware
to transform working styles
Usetilizing digital to further
improve productivity

Digital Strategy
Driving digitalstrategy on Five axes

Digitalbusiness

Digitaltalent4

3
Digital-related
business matching
Digital/DX consulting
Further grow the scaleof digital business

Launch a digital talent development program
Enhancement of internal human resources
who can respond to customers’needs

Money transfer
to friends within
the LaLaPay app(free of charge)

Recharging LaLaPay balancefrom Maekyu

Recharging
balance toother companies'
payment services
Funds transferred directly
to users’accounts(a set transfer fee will be charged)

Direct payment
at stores using
QR codesor barcodes

Cash withdrawals
from ATMs(Fee: 220 yen pertransaction, including tax)

* This service’s “Recharging LaLaPay balance from Maekyu” is the recharging of internal loan funds from the company to employees in the form of digital money, so it
does not constitute a wage payment to an account held by funds transfer service providers, which has been discussed at the Labor Policy Council.

33 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 34

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Future Aimed at by the Tokyo-based Platform Concept

A digital-driven Tokyo-based platform concept
The Medium-Term Business Plan presents the Kiraboshi
Group’s vision to become “a Tokyo-based platform
owner that creates new value for customers.”
Regional financial institutions have traditionallyproposed and provided financial services such as
deposits, loans, and asset management to theircustomers. Recently, we have been focusing on
providing consulting services and solutions that will
help resolve customer issues while also matchingcustomers with each other.
The Kiraboshi Group, as a regional financial groupwith its business base in the Tokyo area, deals withan extremely large number of corporate customers.
By providing value to the customers of corporate
customers, we can build a bigger network, which, inIllustration of the Tokyo-based platform

turn, will help grow our corporate clients’ businesses,
so client expectations for the Tokyo-based platform
are increasing. This is one way by which we canprovide value to corporate customers.
Many corporates and individuals are concentrated in
the Tokyo area, so naturally it is a place where many
corporates are created and closed down. Given thecharacteristics of the Tokyo area, we aim to build aplat form with value that is driven not just bytraditional face-to-face channels, but also by nonface-to-face and digital services.
In FY2021, we opened the UI Bank digital bank andKiraboshi Tech released our LaLaPay digital money
payment service. We intend to strengthen the digital
functions that drive the platform by further expanding
the range of functions on offer.

Haneda Airportand surrounding
facilities
Overseas funds
transfer
service providers

Start-ups

Large corporations

Tokyo Kiraboshi Financial Group

Kiraboshi Bank, Ltd.
UI Bank Co., Ltd.

Administrative organs

Kiraboshi Consulting Co., Ltd.

Foreigners in Japan
Foreign workers
and students

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

HANEDA Platform in the Haneda area
One example of a Tokyo-based platform is our
initiative in the Haneda area.
In April 2021, the Kiraboshi Group concluded acomprehensive cooperation agreement with Haneda
Future Research Institute Incorporated, a subsidiaryof Japan Airport Terminal Co., Ltd. that operates
Haneda Airport Terminal. Our aim is to work withHaneda Future Research Incorporated to contributeto building a future-oriented ecosystem, revitalizing
the lo cal eco no my, and develo ping the lo cal
community and culture.
Although passenger numbers declined during the
COVID-19 pandemic, Haneda Airport Terminal is thegateway to the Tokyo area skies, with 85 million
passengers using the terminal in FY2018.
We will use the HANEDA Platform to study theprovision of further concrete digital technology-driven
services to Haneda Airport users.
Meanwhile, in November 2021, we opened the
KicSpace HANEDA incubation facility in Haneda
Innovation City, which is adjacent to Haneda Airport
Terminal . Kic Space HAN EDA co op erates withgovernment and large companies to provide start-ups
with functions fusing real locations with online medium.
In constructing a platform for start-up companies, weparticipate in a corporate venture capital (CVC) fund

together with Japan Airport Terminal and ICMGGroup companies, etc. The aim is to hold pitching
event s and seminars for star t- ups looking forinvestment and provide co-creation value through thefusion of large companies and start-ups.
We are also working together with Future Lab
HANEDA, which was launched in April 2022 by
Kawasaki Heavy Industries, Ltd. in Haneda Innovation
City for the purpose of robotic field testing, to realize
digitalization and cashless payment systems thatutilize start-up technology.

Co-creation platform in Haneda Innovation City

Collaboration

Future Lab
HANEDA
Cocreation
HANEDA

Administrative
organs

A platform concept integrated with non-financial services
Going forward, as part of efforts to create platforms
using the UI Bank digital bank and LaLaPay digitalmoney functions, we will proceed with the provisionof financial services and functions that link to the useof non-financial services.
One such concept involves the potential constructionof a platform for foreign workers and students inJapan.
UI Bank is looking to provide financial services suchas overseas remittances through provision andset tlem ent of B an king as a Ser vice (B aa S) in
cooperation with overseas funds transfer service
providers, etc. In addition, in order to resolve a variety

of issues facing foreign workers and other foreign
nationals coming to Japan, we are aiming to provide
a platform that offers information before coming toJapan and other ser vices rel ated to housing,
employment, and living, in cooperation with nonfinancial service providers.
We are also looking to provide financial and nonfinancial services to multiple non-financial service
providers and their customers and users in an
integrated way. By connecting the customers andusers of these non-financial service providers, we aim
to build a non-financial services platform that is driven
by Kiraboshi Group’s digital functions.

Platform concept integrated with non-financial services

Medical institutions

Lifestyle support,
entertainment, arts
Sports35 │Tokyo Kiraboshi Financial Group, Inc.│⃝ Platform for foreign workers and students in Japan⃝ Platform that connects users of multiple non-financial service providers⃝ Platform that supports the development of community-based medical care, etc.

│Tokyo Kiraboshi Financial Group, Inc.│ 36

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Corporate Customer Strategy
Overview of the Kiraboshi Group corporate customer strategy
We have established the SF Division, MF Division, RF Division, FC
Service Division, the Medical and Welfare Business Division andother departments within the Kiraboshi Bank head office, and weoperate as a professional group that provides advanced solutions
to our customers. We cooperate with our sales offices tostrengthen support for existing customers.
We also work together with Group companies such as Kiraboshi
Capital and Kiraboshi Consulting that boast a high level ofexpertise in their respective financial and non-financial fields tocreate a wide range of proposals tailored to all life stages of acustomer, be it the founding period, growth period, or maturity
period. We also offer solutions designed to help DX initiatives andsolve social issues, such as environmental problems and the SDGs.

We will leverage the Group’s collective

strengths to enhance our ability to solve
problems responding to changes in the

structure of our society, and help create

Kiraboshi

value for customers and resolve social issues.

Bank, Ltd.

Kiraboshi Consulting Co., Ltd.
● Established in April 2017
● 104 employees● Provides corporate growth support through services suchas consulting, M&A, the supply of corporate management
information, and the holding of seminars and lectures

Kiraboshi Business Consulting Shanghai Co., Ltd.
KIRABOSHI BUSINESS CONSULTING
VIETNAM Co., Ltd.

SF Division● Established in January 2019● 13 employees● Provides expert structured ﬁnance and otherﬁnancial support for corporate customers

Real Estate Finance (RF) Division● Newly established in April 2022
●10 employees● Established independently from the SF Division, toundertake business such as real estate non-recourse
loans. Responsible for dealing with sophisticatedprojects as sales staﬀ belonging to headquarters

MF Division

FC (First Call) Service Division● Established in April 2021
● 52 employees● Supports sales oﬃces while utilizing mezzanine
ﬁnance and other strategies to build main bankrelationships● Newly established in April 2022
● 11 employees● Started at three oﬃces (head oﬃce, Nihonbashi, and sales department of
Shinjuku head oﬃce) to increase the number of main bank relationships
Aims to build relationships with ﬁrst-call (FC) customers and cultivate
new business partners

Kiraboshi Capital Co., Ltd.
● Established in September 2018● 21 employees● Manages funds matching each life stage, fromfoundation through growth and maturity torestructuring

StarBridge business consulting (Beijing) Co., Ltd.
PE Oﬃce

International
Strategy Division

Public Corporation
Division

Tokyo Kiraboshi Lease

37 │Tokyo Kiraboshi Financial Group, Inc.│

Medical and Welfare
Business Division

Trust Business
DivisionStart-up Support
Oﬃce

Be.Brave
Kiraboshi Tech

│Tokyo Kiraboshi Financial Group, Inc.│ 38

Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Group’s Growth Strategy

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Corporate Customer Strategy
Promoting main bank relationships in the rich Tokyo market

Kiraboshi Consulting caters to the needs of managers

The Tokyo area is the business base of the Kiraboshi Group. It is a fertile market with a concentrated populationand SMEs presence. However, Kiraboshi Bank’s share of main bank transaction relationships remains in the 3%
range, so we recognize that there is ample room for expansion.
Against that background, Kiraboshi Bank is focusing on promoting main bank relationships and businessfinancing initiatives. We have launched an independent division within the head office in order to improve ourexpertise and project response and have also set up a specialist line of investigation and the other initiatives sothat we can proactively inject resources into this area while duly considering any relevant risk perspectives.
With regards to our business financing initiatives in particular, we offer financial support using highly specialized
financing methods and we are also conducting many initiatives that exploit the Group’s collective strengths tosolve business partners’ problems. That helps fuel lending at comparatively high interest rates, which, in turn,helps boost our loan balance and income from interest on loans.

Kiraboshi Consulting supports corporate growth primarily through consulting and membership services for

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

Share

Tokyo

229,629

7,086

3.1%

Kanagawa

77,442

2,829

3.7%

Total

307,071

9,915

3.2%

(Reference) Prepared based on a 2021 survey by TOKYO SHOKO RESEARCH, LTD. (The number of companies is based on the TOKYO SHOKO RESEARCH, LTD. database)Commission income from corporate customers <business financing> (¥100 mn)

1.87

1.77

Planned
1.84

1.52

2,821

4,011

succession, M&A, setting up personnel evaluation systems, recruitment services, IPO, addressing SDGs, andsupporting overseas expansion. Our membership service offers a wealth of content useful for corporate
management, including our “Kiraboshi Top School” that offers business successor and manager training
throughout the year along with other level-specific training, lectures, management information services, and freeSupport of overseas expansion
The Kiraboshi Group considers the Asian region to be

in Beijing. We have built a collaborative business

an important market and a natural extension of ourplatform, and are currently supporting Japanese

operations in Japan. We actively support the overseas

companies’ business development in China. In

expansion of SMEs through various initiatives, such as

Vietnam, we are strengthening our relationships withcross-border M&A and cross-border loans. In China,

local companies and support cooperation and joint

we have established a Sino-Japanese joint venturebusiness collaboration with Japanese companies.

Partnered with SBJ Bank
(Shinhan Financial Group) in July 2019

Shinhan Financial Group oﬃces (March 31, 2022)

99 oﬃces
Korea ･･･････････････････････････ 739 oﬃces
Others･･････････････････････････････ 65 oﬃces
Southeast Asia ･･･････････････････

16
10

Aug. 2009

1,211

20/3

support that helps uncover issues to proposals tailored to a company’s particular life stage, such as business

29

Planned22

5,318

Planned
2,613

697

29

1.91

towards business growth. We can provide a wide range of consulting services, ranging from management

consulting subsidiary together with the Zhaotai Group

33

2.19

Our consulting business uses experienced consultants to draw out our client’s strengths and help create a pathconsultations with different experts.

Number of Kiraboshi Bank customers with main bank transaction relationship

Business loan balance (¥100 mn)/Yield (%)

managers.

Consulting subsidiary in Shanghai, China

Kiraboshi Business Consulting Shanghai Co., Ltd.
21/3

22/3

23/3
(planned)

24/3(planned)

20/3

21/3

22/3

23/3
(planned)

24/3(planned)

Contribution to the local economy that Kiraboshi Capital aims to achieve
Message from President

Kiraboshi Capital Co., Ltd.

Nobuo Jinnai,
President

39 │Tokyo Kiraboshi Financial Group, Inc.│As an investment fund affiliated with a regional financial institution, Kiraboshi Capitaloffers six types of funds, including investment in stocks that was previously regarded
as difficulty and mezzanine capital. Our mission is to use these funds to support thegrowth of companies, and to help revitalize the regional economy by solving theconcerns of companies facing different challenges.
For instance, we support the growth of companies in the start-up phase with equity
financing, or hold stocks from companies that require business succession to resolve
their problems, thereby working together with customers to find the best solution.
There are times in a company’s long history when it needs support and a little bit ofingenuity. We are ready and able to help companies who consult with us at thosetimes by functioning these different funds.
For us, the Tokyo area is an important base as the area in which we live and breathe—an area where we have grown together with the customers that have nurtured theGroup since its establishment. Kiraboshi Capital is a fund that can be likened to
locally-rooted agricultural people. We want to partner with customers as if we were
working up a sweat planting rice in the paddy field together and aim to rejoice
together at the harvest.

Asian markets
as a natural extensionof our operations
Vietnamin Japan
Dispatching humanresources
to local companies

Collecting Asian information

Jun. 2021
JICA business allianceJan. 2022
China

Joint venture consulting subsidiary
in Beijing, China

StarBridge business consulting (Beijing) Co., Ltd.

Thailand

Oct. 2019
Consulting subsidiary in Ho Chi Minh City, Vietnam

KIRABOSHI BUSINESS CONSULTING
VIETNAM COMPANY LIMITED

Singapore

Providing Asian business support
inside and outside Japan

Investing in local funds
and dispatching
human resources│Tokyo Kiraboshi Financial Group, Inc.│ 40

Tokyo Kiraboshi Financial Group’s Growth Strategy

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

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Retail Customer Strategy

Human Resource Strategy

Message from Officer

In order to nurture Kiraboshibito (people who put the “Kiraboshi philosophy” into practice), we inspire self-

Continue to pursue true retail customer sales designed to solve problems

motivation through career design sheets, enhance training systems that enable staff to proactively acquire moreadvanced skills, and support self-improvement efforts by providing venues for building awareness and learning.

Kiraboshi Bank, together with Kiraboshi Group companies, seeks not only to address

We seek to use these initiatives to generate professional human resources who are capable of solving customer

customers’ asset formation and preservation needs, but also to provide valuableissues and to improve employee engagement. We also actively recruit external human resources primarily for

financial services regarding issues that customers are not yet aware of or future

departments that require specialist knowledge.

problems that have not yet manifested themselves. To date, our retail customer sales
strategy has tended to follow a product-out approach, but we want to demonstrate
our highly developed consulting functions across a wide perspective that covers

Hiroshi Shibuya,
Director and Senior
Executive Officer,
General Manager ofSales Headquarters,
Kiraboshi Bank, Ltd.

individual customers, their families, and affiliated companies in order to enable us toprovide financial services that offer tailored value to each individual customer. We

An individual who always thinks“how
it can be done”（創意工夫・粘り）(ingenuity, perseverance)

An individual with high aspirations（理念・使命感）(principles, sense of mission)

Fostering“Kiraboshibito”

have also established a framework in which our sales offices and head office work
together to solve problems based on various different needs and circumstances. Thissystem includes our highly expert wealth management team, PB (Private Banking)An individual who is committed to results
and continuously（責任・勇気）
takes on courageous challenges(responsibility, courage)

Group growthSocial contribution

Customer growthteam, real estate consultant team, and outbound call team.
We intend to continue to accumulate more true retail customer sales experience sothat we can deliver valuable financial services that satisfy our customers.

Message from the President of Kiraboshi Life Design Securities Co., Ltd.
The environment around us is changing drastically with the advent of the era of
the 100-year lifespan, the declining birthrate and aging population, and anxiety
surrounding pensions. Against that background, it is important to protect and nurturecustomers’ assets and extend the life of those assets to ensure a happy future life for

Fostering professional
human resources
Fostering diversity andhuman resources who
think for themselves andtackle challenges
Improving engagement

Transforming our humanresources development

Personnel system reform

Create customer value

Building a winning teams

LinkedAchieve management visionand self-fulﬁllment

Create human resources
with high market value

Change Personnel Aﬀairs Division to Human Resources Division➡ Human development + organizational development

Utilizing elder human resources
Actively utilizing mid-careerand young employees byabolishing seniority system
Strengthening mid-career
recruitment
Utilizing external talent
Facilitate diverse careerbuilding and workstyles

Develop human resources committed to realizing our management philosophy and strategy
Revitalize organization by fostering a new corporate culture and improving engagement

our customers.
The previously unimaginable COVID-19 crisis, war, and inflation have become all too
familiar to us now and we have entered an era in which wise asset management isincreasingly necessary for protecting our future lives.
Kiraboshi Life Design
Securities Co., Ltd.

Yousuke Sakai,
President

Human resources development

We at Kiraboshi Life Design Securities promise to eliminate customer concerns andIn conjunction with reforming our personnel systems,

title or age. Roughly 800 executive class employees

anxieties and manage peace of mind by providing asset formation support based on

we transformed our human resource development

participated in level-specific Kiraboshibito training

practices and started training the kind of Kiraboshibito

designed to deepen their understanding of and instillthat the market requires. We have conducted various

the three Kiraboshibito action guidelines. Goingtypes of dojo training sessions in order to nurture

forward, we plan to extend this training to include

professional human resources looking to advance their

all managers and conduct Kiraboshibito training forskills, including structured finance (SF) and consulting

a l l personnel . We will al so continue to foster

dojos. These dojos have been attended by over 1,500

Kiraboshibito equipped with high skills and mindset

employees in total. Many staff members voluntarily

through training and policies.

long-term diversified investments, such as fund wraps and high-quality investment
trusts, and also providing optimal financial services and solutions, primarily throughbrokerage operations with Kiraboshi Bank.
In such a difficult investment environment as this, we aim to become our customers’
securities company of choice, and we intend to keep moving forward and taking on
new challenges.

participate in the sessions regardless of their job
Level-specific Kiraboshibito training
Purpose: Deepen understanding of and instill the three Kiraboshibito action guidelines

41 │Tokyo Kiraboshi Financial Group, Inc.│

For general and branch managers

163 participants across three sessions (July 2021)

For deputy branch managers

165 participants across five sessions (August 2021)

For assistant managers

211 participants across six sessions (October 2021)

For section managers

304 participants across 10 sessions (January, February 2022)│Tokyo Kiraboshi Financial Group, Inc.│ 42

Tokyo Kiraboshi
Financial Group

Initiatives aimed at Sustainability

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate DataManagement for Sustainable Development

Initiatives to Address TCFD (Task Force on Climate-related Financial Disclosures)Tokyo Kiraboshi Financial Group works to create both economic value and social value and achieve sustainable

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.

management by addressing social issues in collaboration with stakeholders, while embracing environmental,social, and governance (ESG) perspectives.

* 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.

Policy on Initiatives aimed at Sustainability
We f o r m u l a t e d t h e “ B a s i c P o l i c y o n S o c i a lphilosophy, “To be a financial group for small andResponsibility (Sustainability Policy)” to indicate our

medium-sized enterprise customers and individual

overall policy on sustainable management andcustomers in the Tokyo metropolitan area that will

declare our involvement in development of local

contribute to the development of local communities

co mmunities an d solutio n of issu es face d bythrough comprehensive financial services.”sustainable society, based on our management

Basic Policy on Social Responsibility (Sustainability Policy)
Tokyo Kiraboshi Financial Group strives to contribute to sustainable development of local
communities and increase medium- to long-term corporate value through corporate activities
based on its management philosophy. In addition, we will work to enhance information
disclosure through dialogue with each and every stakeholder.
Each and every one of Group officers and employees will work to increase customer value andplay an active role in addressing climate change and social issues.

Tokyo Kiraboshi Financial Group SDG Declaration
The Group aims to be “a comprehensive service

communities through comprehensive financial

business that is also strong in finance.” Based on its

services,” the Group is working, through its corporate

management philosophy, “To be a financial group for

activities, on initiatives related to the SDGs adopted bysmall and medium-sized enterprise customers andthe United Nations summit, and seeking to realize a

individual customers in the Tokyo metropolitan area

sustainable society and create shared societal value.

that will contribute to the development of local

Governance⃝ 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.
⃝ The Medium-Term Business Plan emphasizing harmony between environmental protection and corporate activity
began in April 2021. We will proceed with the discussion of efforts implemented by the Group.
⃝ The director in charge of the Business Strategy Division is the “Chief Sustainability Officer (CSuO).”⃝ The “Sustainability Promotion Office” was established in the Business Strategy Division, which plans andformulates short-term and medium- to long-term targets in the sustainability promotion of the Group andengages in sustainability promotion-related coordination with parties including Group companies and relevant
departments based on various policies. There is a system in place to conduct deliberation at the Management
Meeting and report to the Board of Directors.

Strategy⃝ In the Medium-Term Business Plan, “environment (response to global warming and climate change)” isestablished as a priority issue (materiality) in the Group’s SDGs.
⃝ We analyzed risks and opportunities related to climate change, impacts on the Group’s business activities, andothers using the following procedures. Moving forward, we will engage in initiatives to mitigate climate change
risk to local communities and customers through the provision of financial services with high added value.
⃝ Scenario analysis techniques have not yet been established, and anticipated scenarios, analysis methods, anddefinitions are diverse. Therefore, we will continue to make efforts such as sophisticating our analysis with thecooperation of external experts.
Procedures to evaluate climate change risks and opportunities
Organizing climate change risks and opportunities

Tokyo Kiraboshi Financial Group SDG Declaration

Organize climate change risks and opportunities anticipated to be faced by the Group currently and in the future

Contribution to local communities

Determination of targets for climate change risk analysis
Determine targets for analysis, based on impacts on the Group, relevance with climate change, and others

Environmental protection

EnvironSociety
ment Management

Creation of shared value with the customer
Analysis of transition risk

philosophy

Dialogue withshareholders and investors

EconomyEmployee’s work style reform andpromotion of diversity

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

Organizing climate change risks and opportunities
Please refer to our website for the “Tokyo Kiraboshi Financial Group SDG Declaration.”

https://www.tokyo-kiraboshifg.co.jp/sustainability/sdgs.html (in Japanese)

43 │Tokyo Kiraboshi Financial Group, Inc.│

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

Analysis of physical risk
Analysis of impacts on target companies

Organizing climate change risks and opportunities

Organize impacts on operation, etc.
of partner companies due to changes
based on scenarios (increased
probability in the occurrence of ﬂoods)

Organize impacts from damage on
real-estate collateral due to changes
based on scenarios (increased
probability in the occurrence of ﬂoods)

Organizing climate change risks and opportunities

Organizing climate change risks and opportunities

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 estates│Tokyo Kiraboshi Financial Group, Inc.│ 44

Tokyo Kiraboshi
Financial Group

Initiatives aimed at Sustainability

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Initiatives to Address TCFD (Task Force on Climate-related Financial Disclosures)❶ Risks and opportunities associated with climate change anticipated to be faced by the Group currently and in the future❸ Implementation of quantitative analysis of transition risk

⃝ We have identified risks and opportunities associated with climate change anticipated to be faced by the Groupcurrently and in the future as follows, using the timeframes of short term (five years), medium term (10 years),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.

⃝ Among the sectors subject to transition risk analysis, we conducted quantitative risk scenario analysis for theelectricity sector (part of the energy sector) for which analysis techniques have been established, using certain
assumptions, and estimated a maximum amount of increase in credit expenses which may be incurred by 2050.
⃝ Having conducted the scenario analysis, we recognized the importance of promoting changes of business ofcustomers in preparation for transition to decarbonized society. Going forward, we will try quantitative
analysis of other sectors to understand the impact of each sector’s climate change risk on the Group, andwork to mitigate risks to customers in the target sectors.

Transition
risks

Risks

Physicalrisks

Risks related to laws
and regulations⃝Occurrence of credit risk as a result of adverse impacts on customers’ finance(medium to long term) due to tightened regulations and policy changes
associated with decarbonization and other efforts.

Technology risks
and market risks⃝ Occurrence of credit risk as a result of adverse impacts on customers’ finance(short to long term) due to failure to stay current with a rapid shift in technologies
associated with the transition to decarbonized society and inability to respondto fluctuations in demand for products and services with specific features)

Reputational risks⃝Occurrence of credit risk as a result of adverse impacts on customers’ finance(medium to long term) due to declined reputation for not being able toadapt to the transition to decarbonized society⃝Occurrence 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) (short to long term)

Target of analysis

Electricity sector within the energy sector

Acute risks⃝ Occurrence of credit risk as a result of stagnation or suspension of businessactivities or damage to real estate security of customers affected by the occurrenceof storms, floods, and other sudden meteorological events (short to long term)⃝Occurrence of operational risk caused by a disaster affecting the head officeand branches and/or data centers of the Group (short to long term)

Analysis description

Calculated an amount of increase in credit expenses of relevant business operators
upon determining the debtor category based on their financial forecast until 2050.

Chronic risks⃝ Occurrence of credit risk as a result of adverse impacts on customers’ financedue to changes in long-term climate patterns such as rising temperature,diminishing cryosphere, and rising sea level (long term)

Amount of increase in credit expenses⃝ Increase of business opportunities such as provision of financial products and services to support customers
in the transition to decarbonized society and addressing climate change (short to long term)
Oppor- ⃝ Provision of decarbonization-related financing (sustainable finance) (short to long term)
tunities⃝Decline in the Bank’s business costs owing to resource and energy saving (short to long term)⃝Higher evaluation from investors and capital markets that attach great importance to ESG factors (short to long term)❷ Selection of target sectors for transition risk analysis, and analysis of impacts⃝ We evaluated Kiraboshi Bank’s exposure by business type and the level of impacts from climate change using
a matrix, defining “energy,” “transportation,” and “real estate” as the target sectors for qualitative analysis.
⃝ We qualitatively analyzed the impact of climate change on each target sector.
《Results of analysis on major risks and impact by sector》

Sector

Evaluation
item
Policies andregulations

EnergyTransportationRealestateIndustries andmarkets
Reputation
Acute risk
Policies andregulations

Major risks

Major impact (impact which requires the Bank to revise the credibility downward)

Increase in Decrease in sales Decline in
Increase in Increase in capital Increase in
Increase inoperations costs and profits
asset value operational costs investment
R&D costs construction costs
Rise in petroleum and coal tax○○○○
Tightening of GHG emissions regulations○○
Widespread use of renewable energy○○

Enhanced awareness of eco-friendliness
Strengthened measures to prevent disasters○○○

Introduction of carbon tax○

Industries and Surge in energy prices
markets
Shift to electric cars, etc.
Chronic risk Thermal expansion of railway tracks
Damage to operations associatedAcute risk with disasters of extreme severity
Policies and Rise in petroleum and coal tax
regulations Tightening of GHG emissions regulations
Industries andChanges in customers’ behavior
markets
Acute risk Intensification of extreme weather○* International Energy Agency (IEA)’s SDS scenarios are used.

45 │Tokyo Kiraboshi Financial Group, Inc.│

○

○
○

○

○
○

○

○
○

○
○

○
○

○
○

○

○

○

《Procedures to conduct quantitative analysis of transition risk in the electricity sector》
From among companies in the electricity sector, we selected sample companies with abundant publiclyavailable data necessary for conducting quantitative analysis of transition risk.
We simulated operating revenue and operating expenses (i.e., profit level) of the sample companies until
2050 based on the 1.5℃ scenario, and calculated the amount of increase in credit expenses.
We conducted similar simulations on the assumption that operating income and operating expenses of eachcompany in the electricity sector would show the same trend as the sample companies, and calculated anamount of increase in credit expenses of the entire sector.
《Results of quantitative analysis of transition risk》

International Energy Agency (IEA)’s NZE scenario (1.5℃ scenario)

Scenario used

* Figures from APS scenario were used as substitute for data not available.

Approximately ¥0.6 billion at a maximum❹ Implementation of quantitative analysis of physical risk
⃝ We conducted analysis of potential impacts of climate change on the Group’s credit portfolio, based on
certain assumptions, using multiple scenarios.
⃝ Having conducted our simulation, we recognized the necessity of organizing various types of data for analysis.
Going forward, we will work to sophisticate risk analysis techniques and try quantitative analysis of otherareas, and thereby strive to identify impacts on the Group.
《Procedures to conduct quantitative analysis of physical risk》
We investigated the depth of water exposure of target properties in the event of floods, based on hazard
maps.
We converted the depth of water exposure into damage levels in accordance with the flood control
economy investigation manual issued by the Ministry of Land, Infrastructure, Transport and Tourism.
Estimated an expected amount of damage by multiplying the amount of damage from a 100-year flood by
the rate of increase in the number of floods, and thereby calculated an amount of increase in credit
expenses until 2050.
《Results of quantitative analysis of physical risk》
Theme

Financial impact from suspension of operation

Amount of damage to real-estate collateral

Target of analysis

Areas covered by the investigation are the areas
with many cases of damage from water
exposure caused by the flood of the Arakawa
River, and the targets of analysis are business
operators who are borrowers of the Bank andwhose head offices are located in the said areas.

All borrowers

Description of analysis

We calculated an expected cumulative amountof damage until 2050, and then calculated anamount of increase in credit expenses thatwould be incurred based on the financial
forecast made by the relevant business
operators.

We calculated an expected cumulative
amount of damage until 2 0 5 0, and thencalculated an amount of increase in credit
expenses that would be incurred due todamage.

Scenario used
Amount of increasein credit expenses

Intergovernmental Panel on Climate Change (IPCC)
RCP 2.6 scenario (2℃ scenario) and RCP 8.5 scenario (4℃ scenario)
Approximately ¥2.5 billion at a maximum│Tokyo Kiraboshi Financial Group, Inc.│ 46

Tokyo Kiraboshi
Financial Group

Initiatives aimed at Sustainability

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives to Address TCFD (Task Force on Climate-related Financial Disclosures)

Human Capital

Credit exposure to carbon-related assets

Developing Kiraboshibito⃝ Carbon-related exposure for Kiraboshi Bank is as described below.
⃝ Going forward, we will proceed with organizing data and other efforts in preparation for disclosure of thedisclosure target sectors based on revised standards.
⃝ We will proceed with constructive dialogue (engagement) with customers in the target sectors, and thereby
make efforts such as identifying the amount of carbon emissions and conducting business restructure to
mitigate impacts of climate change.
Total for the carbon-related sectors
Ratio to the total¥33.7 billion
0.763%* Disclosure target sectors: Petroleum, gas, coal, and electric power companies (excluding photovoltaic power and renewable energy-related companies)* The business-type categories of the disclosure target sectors are based on the Global Industry Classification Standard (GICS), and aggregation is made based on thebusiness-type classification used at Kiraboshi Bank.

Risk management⃝ We 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
climate change. This policy also covers coal-fired power generation businesses, deforestation businesses, andpalm oil plantation development businesses, which are highly relevant 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 and provide solutions,and thereby identify business opportunities and strengthen risk management of the Group and customers.

Indicators and goals
Setting of environment-related investments and loans(*) targets
Environment-related investments and loans from FY2022 to FY2030: ¥200.0 billion* Renewable energy-related loans (photovoltaic power, biomass power generation, wind power-generation facilities, etc.), funds for introducing environmentallyfriendly vehicles and facilities, etc., loans implemented in compliance with sustainability linked loan (SLL) and other various principles, investment in bonds, etc.,
related trust beneficiary right, investment in funds related to climate change countermeasures, etc.

⃝ We will continue to proactively provide sustainable finance by supporting customers’ efforts such as
response to climate change. (Investments and loans in FY2021: Approximately ¥14.0 billion)

60% reduction in Scopes 1 and 2 by FY2030 compared to FY2013 levels⃝ We have been engaged in the reduction of greenhouse gas emissions until now, and while continuing toproceed with transition to LED lighting and replacement with environmentally friendly business vehicles, wewill proceed with a shift to electricity from renewable energy sources.
⃝ We will push forward with examination of Scope 3 measurement techniques.
2013[Reference year]

CO2 emissions (t-CO2)
Scope 1 (t-CO2)

City gas used (1,000 m )3Gasoline used (kl)

Scope 2

Electricity used (1,000 kWh)

CO2 emissions reduction ratecompared with FY2013

2018

2019

2020

2021

10,985

7,083

6,477

5,832

5,409

183

182

152

75

77

721

135

10,263

719

135

6,364

652

135

5,824

480

135

5,351

485

135

4,924

18,627

14,037

12,902

12,772

12,079－-35.52%-41.04%-46.91%-50.76%* 1: For the amounts of gasoline used, actual figures in FY2021 are used in or before 2020
* 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.

47 │Tokyo Kiraboshi Financial Group, Inc.│

Management Base That
Supports Value Creation

Financial Data andCorporate Datasatisfac tion. Through this scheme of allowing
employees to express gratitude and appreciation
everyday to each other online in a timely manner,
we aim to build a “culture of mutual recognition.”

Rate of utilization of “Kiraboshibito Nice Work! Card”

4,359

2,016

46%

Number of “Kiraboshibito Nice Work! Cards” sent

9,887
From December 6, 2021 to June 20, 2022

Work-life balanceWith the aim of building an environment where eachand every employee can demonstrate their abilities
at their full potential while pursuing work-life balance,
we started a system of working from home in April
2019 and a flextime system in October 2019 on a trial
basis. The system of shortened working hours forreasons such as childrearing and nursing care has
also been established to support diverse work styles
attuned to various stages of employees’ lives.
In addition, we are focused on a shift to paperlessprocedures for internal documents and digitalizationof operations. We have realized flexible work styles
regardless of place, by, for example, promoting freeaddress seating in departments of the headquarters(eliminating cabinets for individual use and land-line
phones) and digitalizing various application methods.

Rate of employees working from home (FY2021)
Ratio of the Bank’s employees who worked from home82%

Health and productivity management

Setting of the Group’s targets for mitigating environmental burden

Fiscal year

We i m p l e m e nt va ri o u s m ea su res to d eve lo p
“Kiraboshibito” toward realization of the “Kiraboshi
philosophy” which presents the awareness, values
and mindset shared by all officers and employees.
To get started, we hold level-specific “Kiraboshibito
training” sessions to deepen the understanding ofand instill the “Kiraboshibito” action guidelines. In
addition, “Kiraboshibito Committee” meetings areheld once a month, at each office, to promote sharingof thoughts. Moreover, “Kiraboshi STYLE,” a manualfor Kiraboshibito in customer care, was inaugurated,
and we clarified quality policies and mindset to beupheld when interacting with customers.
We also provide role-specific hospitality training forcustomer satisfaction, which enables them to playtheir part in becoming “a comprehensive service
business that is also strong in finance.” We distributevideos and newsletters to cultivate the mindset of
hospitalit y suited for the ser vice business .
Furthermore, “Kiraboshibito Nice Work! Card” wasintroduced with the aim of improving employee
satisfaction, which serves as the basis for customer

Initiatives aimed
at Sustainability

We announced the “Kiraboshi Health and Productivity
Management Declaration” in January 2019. We
promote health and productivity management so that
employees and their families are mentally andphysically healthy and able to lead fulfilling lives.
The Human Resources Division, the Health andProductivity Management Office (with two publichealth nurses stationed) and the Kiraboshi Bank
Health Insurance A ssociation coll aborated to
implement finely-tuned health and productivity
mana gem ent fo r of ficers an d employe es an dundertake health promotion measures. As a result,
we were selected for “Silver Certification” awarded by
the Tokyo Branch of National Federation of Health
Insurance Societies and also for “Certified Health &Productivity Management Outstanding Organizations(Large Enterprise Category)” awarded by the Ministryof Economy, Trade and Industry for two consecutive
years (2021 and 2022).
More specifically, measures are undertaken in thefollowing three areas.
❶ Physical health: Aim to improve health of employees
by implementing a highly effective Plan-Do-CheckAction (PDCA) cycle by visualizing their health data.

❷ M ental health: Implement proactive follow-ups
mainly by industrial health staff. 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: Promote establishment ofs y s te m s i n cl u d i n g w o r k s t y l e re fo rm s a n dinvigoration of workplace communication, and aim
to create an environment where employees candemonstrate their job performance to the fullest

Screening rate

100%

│Tokyo Kiraboshi Financial Group, Inc.│ 48

Tokyo Kiraboshi
Financial Group

Initiatives aimed at Sustainability

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Human Capital

Communication with Stakeholders

Supporting employees in balancing work with childrearing and nursing care

Creation of shared value with the customer

We strive to build a working environment where eachand every employee can continue working in stepwith the life cycle stage of their lives. As an example,
the rate of female employees taking childcare leave is100%, indicating that the system has taken root. We
announced the “100% Male Employees Childcare
Leave Declaration” to proactively encourage male
employees to participate in childrearing. In such away, we are working to foster and build working
culture and environment where both male and female
employees feel comfortable working.
As one of our specific measures, we created a“Guidebook for Suppor ting Work- life Bal ance
(Childrearing Version)” in August 2019 to deepen
understanding of our systems to support childbirthand childrearing. In addition, we hold exchange

Rate ofemployees taking
childcare leave

2018

2019

2020

2021

meetings for employees who take childcare leaveattended by male employees with childrearing
experience. Through these meetings, opportunities
are provided for employees to consider how they
achieve a balance between work and childrearing
from various perspectives, including what should be
prepared before returning to work, daily schedules
after returning to work, and childrearing experiences
shared by male employees. As a result, the rate ofmale employees taking childcare leave steadily
increased from 1.2% in FY2018 to 37.3% in FY2021.
In regard to support for nursing care, we created a“Guidebook for Suppor ting Work- life Bal ance
(Nursing Care Version)” in June 2020. In addition, we
continuously hold seminars to learn basic nursing
care knowledge.

Rate of female employees taking childcare leave

91.8%

Rate of male employees taking childcare leave

1.2%

Rate of female employees taking childcare leave

93.9%

Rate of male employees taking childcare leave

17.4%

Rate of female employees taking childcare leave

100%

Rate of male employees taking childcare leave

46.2%

Rate of female employees taking childcare leave

100%

Rate of male employees taking childcare leave

37.3%

Respect for diverse human resources
A talent management system “ STAR BOX” wasintroduced in May 2019 to invigorate communication
within the entire Kiraboshi Group and form an internal
community that goes beyond the boundaries oforganizations and positions. It is used by employees
not only for publicizing their own strengths, abilities,
and skills, but also for sharing information and as aforum for communication. Currently, the system isalso utilized for placement of employees so they canfully demonstrate their diverse abilities and skills to
the fullest.
In addition, we are also focused on supporting active
participation of female employees who account for
about a half of our employees. We hold training
sessions and seminars as well as exchange meetings
with female Outside Directors on a periodic basis.
We aim to raise awareness and improve skills of
female employees, and to form a community where
they can support each other.

49 │Tokyo Kiraboshi Financial Group, Inc.│

We started hiring foreign nationals since 2020, mainly
centered on new graduate hires. We have nine
employees of foreign nationality as of March 31, 2022.
In addition, 20% or more of new hires in FY2021 were
mid-career hires. As such, the Group is increasingly
invigorated by accepting diverse human resources.

Ratio of female managers
16.82%
15.31%
14.49%

2019

2020

Management Base That
Supports Value Creation

Financial Data andCorporate Data⃝“Customer feedback” questionnaire
The Group has placed postcard-sized questionnaire sheets at customer
counters, ATM locations, etc. of each sales office and branch, with theaim of becoming a financial group that receives first calls from
customers. In this way, we strive to further improve our skills based on
customers’ feedback and valuable opinions.

Dialogue with shareholders and investors
In order to achieve sustainable development for the Company and enhance shareholder value, as well as raise thetransparency and objectivity of management, we are striving to assist in the development of local communities
through strengthening structures associated with corporate governance and working to ensure compliance.

⃝Information Disclosure Policy
Under our management philosophy, that is “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,” the Group is committed to making timely and appropriate
disclosure and provision of information that is easy to understand, not only on financial information but also on nonfinancial information such as management strategies and issues and information on risks and governance, in an aim
to win more trust and reputation from our customers, shareholders, and local communities, etc.
The Group has formulated the “Information Disclosure Policy” for the timely and appropriate disclosure andprovision of information that is easy to understand to stakeholders, and strives to disclose information in a fair andequitable manner.

⃝Holding briefing sessions for investors
The Group is engaged in IR activities such as holding
briefing sessions for institutional investors and private
investo rs so that sta keh old ers inclu ding o u r
custo m e rs , lo c al co m m u niti es , sha re h o ld e rs
understand the management status and otheraspects of the Group.
* The briefing session for investors for the fiscal year ended March 31, 2022
was held in both face-to-face and video streaming formats.

Communication with employees
The Group introduced a system developed by CYDAS Inc., and utilizes“STAR BOX,” an employee platform to invigorate internal communication.
We are striving to foster a working environment with atmosphere of
openness by enabling officers and employees to send messages andreactions freely through channels provided for Group companies anddepartments.

2021│Tokyo Kiraboshi Financial Group, Inc.│ 50

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Corporate Governance
Outline of corporate governance system
The Company is a company with Audit & Supervisory
Board. The Board of Directors supervises the executionof duties by Directors, and Audit & Supervisory Board
Members and the Audit & Supervisory Board audit theexecution of duties by Directors. The Company believes
that the appropriateness of management supervision
and audit functions as well as a system for efficientbusiness execution are ensured by effectively utilizing themanagement supervisory function realized by theappointment of highly independent Outside Directors
and Outside Audit & Supervisory Board Members andthe audit function performed by Audit & Supervisory
Board Members and the Audit & Supervisory Board, andby enhancing the effectiveness of corporate governance.

Chart of corporate governance system(as of July 1, 2022)

General Shareholders Meeting
Inside Directors and Audit & Supervisory Board Members

Audit & Supervisory Board

Outside Directors and Audit & Supervisory Board Members

Corporate Planning
Division

Audit & Supervisory
Board Oﬃce

Board of Directors

Internal Audit Division

Management Meeting

Personnel Aﬀairs
Division

Risk Management
Division

Business Strategy
Division

Nomination/Remuneration Committee

Digital Strategy
Division

Compliance Committee
Risk Management Committee
ALM Committee
Group Sales Strategy Meeting

Partnership Promotion Corporate Communication
Division
Division

Secretariat Oﬃce

(Back row from left)

Hideki Uchida, Katsuya Tsuboi, Kayo Todo,
Audit & Supervisory Full-time Audit &Board Member
Supervisory Board
MemberTakeshi Miura, Shuya Nomura, Hidenori Tsunehisa, Nobuyuki Yasuda, Nobuko Inaba, Satoru Nobeta,

Director
Outside Audit &Supervisory Board
MemberOutside Director

Deputy President

Director

Outside Audit &Supervisory Board
MemberSenior Managing Director

Outline of corporate governance system
Organization form

Executive remuneration structure

Company with Audit & Supervisory Board

Fixed remuneration
Performance-linked remuneration (short-term performance)
Performance-linked remuneration (medium- to long-term performance)(Front row from left)

Shoji Nishio, Hisanobu Watanabe, Yuki Takahashi,
Outside Director President

Outside Director

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
experts to strengthen the Group business management
system and supervisory functions while enhancing
corporate governance functions to make transparent,
fair, prompt, and decisive decisions as it conducts
business and strives to sustainably increase corporate
value. Fur thermore, intending to embody our

Audit & Supervisory Board Members
and Audit & Supervisory Board

Directors and Board of Directors

management philosophy and the Group’s vision, weestablished 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 theCompanies Act, the Board of Directors of theCompany has resolved the “Basic Internal Control
Policy” and endeavors to improve its effectiveness.

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

3 outside
members
Of which,
1 femalemember（（2 outside
members
Of which,
2 femalemembers（8
Directors（

5 inside
members

Nomination/Remuneration
Committee

2 outside
members
Of which,
1 femalemember（4
Audit &
Supervisory Board
Members（

1 inside
member

3
Directors

2 inside
members
Chairperson…Appointed from among Outside Directors

Ensuring independence and diversity
Ratio of outside officers

Ratio of female officers

5/12

3/12

41.6％

25.0％

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

51 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 52

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Corporate GovernanceBusiness execution and supervisory function
Directors and Board of Directors

Nomination/Remuneration Committee

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

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 of businessexecution and other important matters.

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 toassist the duties of Audit & Supervisory Board Members
as support for Outside Audit & Supervisory Board
Members, and a support system has been establishedby providing advance explanations and supplementarymaterials, etc. for important proposals for the Board of
Directors as with the case of Outside Directors.

Main agendas discussed at the Board of Directors (FY2021)⃝Human resource development policy⃝Report on progress of establishment of the AML/
CFT framework⃝Promotion of “Kiraboshibito”⃝Progress of the Digital Bank project⃝Formulation of the new Medium-Term Business Plan

⃝Results of examination of economic rationality
and necessity of cross-shareholdings⃝Report on Group companies’ PDCA cycles⃝Establishment of the “Basic Policy on Social Responsibility⃝Items subject to disclosure associated withsupport for TCFD

(Sustainability Policy)” and the “Environmental Policy”⃝Progress of KGIs and KPIs under the Medium-TermBusiness Plan

⃝Establishment of the “Environmentally and Socially
Friendly Investment and Loans Policy”⃝Approval of the internal audit plan

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 orless (including at least t wo Outside Directors)
appointed by the resolution of the Board of Directors,
and examines personnel matters, appointment anddismissal of directors of the Company and its Group
companies, as well as the amount 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 theneed 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 Management Committee,” and the “ALM

Committee” as the subordinate organizations to theManagement 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 established under
the Management Meeting to ascertain the progressstatus of profit plans of the Group’s sales departments,
as well as to discuss various measures and actions
related to important sales strategies that contribute toprofitability improvement and to strengthen sales
capabilities to improve business performance. The
Meeting is held regularly and at any time whenever
the need arises in accordance with its rules.

Group Management System
The Company has introduced a “Group Chief Officer(CxO) system.” Under the overall supervision by Group
CEO, Group Chief Officers are appointed as officers
responsible for areas under their control, thereby
establishing a Group-wide business management
system. In addition, the appropriateness of Groupmanagement is ensured through the appointment ofofficers in charge of each Group company and theinternal audit of Group companies conducted by theCompany’s Internal Audit Division.

Audit and supervisory functions
Evaluation of the effectiveness of the Board of Directors

time 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” so that the Board of Directors can havemore essential discussions than before. As such, we will
clarify management issues and invigorate discussions toresolve such issues, and thereby work to further improvethe effectiveness and strengthen governance.

The Company conducts self- evaluation on theeffectiveness of the Board of Directors as well as
evaluation which involves third parties, with the aim of
improving functions of the Board of Directors andincreasing corporate value. We conduct questionnaire
surveys of all Directors and Audit & Supervisory Board
Members who are the members of the Board of Directors,
in regard to the composition, operation, discussion,monitoring functions, etc. of the Board of Directors, andthe Board of Directors holds discussions and conducts
evaluation based on the results of analysis by third parties.
In FY2021, the Board of Directors was evaluated as
being able to secure its effectiveness as a result of
improvements at the Board of Directors such as“narrowing down of agenda items” and “reduction ofLA

Further reduce the number of agenda items
 nsure sufficient time to deliberate importantE
agenda items

N

Operation of the Board of Directors

DO

P

Action policy

FY2022 action policy to promote essential discussions

PDCA
C

K

T

53 │Tokyo Kiraboshi Financial Group, Inc.│AC

Recognition of issues(deliberated by the Board of Directors)

CHE

Evaluation of eﬀectiveness

Audit & Supervisory Board Members and Audit & Supervisory Board
The Audit & Supervisory Board strives to strengthen theaudit structure by ensuring effective monitoring functions
for Directors’ decision-making and business execution.
Each Audit & Supervisory Board Member conducts
audits on execution of duties by Directors, internal control,and other related matters by engaging in such activities asattending the Board of Directors’ meetings and otherimportant meetings, reviewing important approval andother documents, and conducting audits of each divisionof the Company and investigations on subsidiaries, inaccordance with audit policies and plans established by
the Audit & Supervisory Board. In addition, an “Audit &Supervisory Board Members” contact desk has been
established as a whistle-blowing contact point which is
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 and exchanging
opinions on priority audit issues through regular meetings
with Representative Directors and other executives.

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

Audit & Supervisory Board Members

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
co nsid ere d by the N o minatio n/Remuneratio nCommittee” and determined after being reviewed by
the Company’s Board of Directors based on the resultsof the consideration.

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.│ 54

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Corporate Governance
Officer Remuneration Structure

Reasons for appointment of outside officers
Name

Reasons for appointment

Yuki Takahashi,
Outside Director

She serves as a corporate manager of a housekeeping services provider, and due to her wealthof 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
various organizations. 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.

Shoji Nishio,
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
and for measures to improve services, and therefore he has been appointed as Outside Director.

Shuya Nomura,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 inpublic 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.

Basic approach
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) and
executive officers with whom delegation agreements

Types of remuneration

Nobuko Inaba,Outside Audit &Supervisory Board Member

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

Fixed remunerationBase(monthly
remuneration
remuneration)

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.

Cashremuneration

Skill matrix of Directors and Audit & Supervisory Board Members
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 outside

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.

Name

Position at
the Company

Hisanobu Watanabe

President

Skill category
Corporate
management

Sales/
Marketing

Risk management/
Compliance

Finance/
Accounting

●

●

●

●

●

●

●

Hidenori Tsunehisa Deputy President

●

●

●

●

●

●

Satoru Nobeta

Senior Managing
Director●●●Takeshi Miura

Director●●●

Nobuyuki Yasuda

Director●●

Audit & Supervisory
Katsuya Tsuboi Full-timeBoard
Member& Supervisory
Hideki Uchida Audit
Board Member

●

●

●

IT/Systems/DX Sustainability

Human resource
strategyMarkets

●
●

●

●

●

●

●

Position at
the Company

Skill category
Corporate Local economy/
management Government

Yuki Takahashi Outside Director●

Shoji Nishio

Outside Director●

Shuya Nomura Outside Director●

Audit & Supervisory
Nobuko Inaba OutsideBoard
Member●Kayo Todo●

Outside Audit & Supervisory
Board Member

Legal affairs

Finance/
Accounting

IT/Systems/DX Sustainability●●●

Human resource
strategyMarkets

●
●

●

●
●

●

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

55 │Tokyo Kiraboshi Financial Group, Inc.│

Provided according to job rank, etc.
Linked to short-term numerical targets
in the Medium-Term Business Plan
Linked to medium to long-term
numerical targets in the Medium- TermBusiness Plan

*Outside Directors only receive monthly remuneration.

Details of remuneration
It is our policy to pay performance-linked remuneration(cash remuneration) at a fixed point in time each year,
by calculating the amount to be paid by multiplying
the amount predetermined for each job rank by themultiplying factor determined based on the indiceslinked with business performance and performance
evaluation of a department for which the relevant
individual is responsible.
Since FY2 0 2 1, the indices linked with businessperformance have been set as (i) Kiraboshi Bank’s netcore business income and (ii) the Company’s net
income for the relevant period subject to evaluation.

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

Performance-linked
remuneration
Share-based
remuneration

Rough percentages of remuneration⃝Performance-linked remuneration (cash remuneration)⃝Internal Officers●

have been concluded is structured to be made up
a s fo llows w it h fixe d re m u n e ratio n (m o nt hly
remuneration) as base remuneration, in addition to a
combination of cash remuneration which is linked withshort-term business performance, etc. and share-based
remuneration using a board benefit trust linked withmedium- to long-term business performance, etc. tofunction as a healthy incentive aimed at sustainablegrowth of the Group.

We have introduced a share-based remuneration
system utilizing board benefit trust as non-monetary
remuneration. We calculate the number of points
to be granted by using the multiplying fac tor
determined according to the degree of achievementof performance targets, based on the base amount
predetermined for each job rank and the book value
per share of the Company’s stock held by the trust
used in this system. Then the N omination/
Remuneration Committee discusses the calculation
result. The Board of Directors decides the number ofpoints to be granted upon deliberation based on the
result of the discussion, and then a certain numberof shares of the Company’s stock equivalent to thenumber of such points will be delivered.

Performance-linked remuneration((ii) Share-based remuneration)

15～20％

Performance-linked
remuneration((i) Cash remuneration)

15％

Fixed remuneration(monthly remuneration)

65～70％

Since FY2021, the indices linked with businessperformance have been 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 details of this system have been partially changed
with the aim of strengthening the link between sharebased remuneration and shareholder value evenmore and enhancing the effect of the incentive evenfurther. Previously, the timing for receiving the deliveryof shares of the Company’s stock equivalent to thenumber of point s granted was at the time ofretirement. However, starting from this fiscal year, 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 oftime (as a general rule, 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 Member
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 andindependence of Audit & Supervisory Board Members.

│Tokyo Kiraboshi Financial Group, Inc.│ 56

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Risk Management
Trial implementation of Risk Appetite Framework
Based on RAF, the Group compiled indicators forrisk appetite for the purpose of achieving sustainablegrowth with a good balance of income, risk, andcapital. By monitoring the indicators periodically, theGroup verifies the optimization of risk and return, abalance between capital efficiency and soundness,risk prediction management, and an appropriate
allocation of management resources.

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

Main items considered

RORA

Optimization of risk and return, etc.

ROE

Capital efficiency, etc.

Capital adequacy ratio

Capital soundness, management of risk predictions, etc.

Income by department

Optimal allocation of management resources, etc.

Subsidiaries, etc.

Chart of risk management system

Kiraboshi Bank, Ltd.

Audit & Supervisory Board Members
Audit & Supervisory Board

Board of Directors

Instructions/Management

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

Management Meeting

Kiraboshi System, Inc.
Kiraboshi JCB Co., Ltd.

Risk Management Committee

Compliance Committee

Kiraboshi Consulting Co., Ltd.
Kiraboshi Tech, Inc.

Discussion/
Reporting

Risk Management Division (Headquarters CO)

Kiraboshi Capital Co., Ltd.
Kiraboshi Life Design Securities Co., Ltd.
Kiraboshi business oﬃce service, Inc.

Construction of overall RAF

Credit risk

to long-term simulation based on
the Medium-Term Business Plan
“forward-looking”()

Be.Brave, Inc.

Establishment of Group risk management system

Risk appetite policy

Stress test of medium

Operational Compliance Conduct risk
Market risk Liquidity risk
risk
risk

Stress test of risk
capital allocation management“backward-looking”()(i) We started Group risk assessment in FY2 0 2 0 tovisualize risks of not only Kiraboshi Bank but alsoGroup companies. In FY2021, Key Risk Indicators(KRIs) have been set as indicators for managing
each risk, and we have set up a system to conduct
follow-ups on a quarterly basis.

(ii) We established the Group Risk Management
Standards in October 2020 to clarify Group governance,
and are working to sophisticate them throughefforts such as clarifying instructions using notices,with the aim of establishing an efficient andeffective Group management system.

Assessment method
Risks are assessed based on the following three levels of risks: High, Middle, and Low, using a method of eliciting “residual risk”
from “inherent risk” and “control.”High■Verify allocation of management resourcesGroup risk management system
Basic approach
The Group considers the risk management as one of the top priority management issues and, in order to ensure thesound and appropriate business operations of each Group company, endeavors to conduct suitable management ofvarious risks in accordance with the Group Basic Policy for Risk Management below under appropriate group business
management (governance).

Group Basic Policy for Risk Management
1. C onsidering the risk management as the top priority issue in the management of the Group, the Group will recognize
the importance of risk management of the entire Group, including management of risks specific to the group systemsuch as outline of the characteristics of various risks and the spread of risks. The Group will conduct suitable
management by establishing the management system for each type of risk.
2. The Group will manage subsidiaries so that the appropriate risk management is performed by them from the viewpointof ensuring soundness.
57 │Tokyo Kiraboshi Financial Group, Inc.│

Sophistication of management■Verify sustainability of the business model and monitor early warning risk signals

KRI(Key Risk Indicator)

Establishment of PDCA cycles

planning

2nd Group
risk assessment

Formulatedthe“Group Risk
Management
Standards”
Started Group risk
assessmentand management((

Started quarterly
follow-up reporting))

3rd Group risk
assessment/
2nd KRI planning()

Aim to promote horizontal
management for the entire Group

Started quarterly follow-up
reporting for residual risk“H”

Promotion of sophistication

Reﬂected in the Medium-Term Business Plan

Low
FY2020

FY2021

FY2022│Tokyo Kiraboshi Financial Group, Inc.│ 58

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Risk Management
Integrated risk management
Integrated risk management within the Group means
to manage the risk in the Group as a whole, byintegrating 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 spreadof risk within the Group, and comparing the risk withthe financial capability (net assets) of the entire Group.
The Group estimates the maximum potential loss
involving credit risk, market risk, and operational risk
based on the measured amount of risk. Then, in order
to use limited capital effectively, the Group allocatesrisk capital by using core capital as allocation source
and compares the capital with the actual amount ofrisk to confirm that the Group has not taken excessive
risks in comparison with its financial capabilities,
thereby maintaining and ensuring the soundness ofmanagement.

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
to which the credit has been granted.
The Group strives to maintain the soundness of its
credit portfolio by avoiding concentration risk throughsuch measure as keeping the percentage of credit in
the total amount of credit below a certain level forlarge concentration risk that an excessive amount ofcredit is made available to a specific party or forindustry concentration risk that credit is concentrated
to a specific industry.

Market risk management
Market risk means the risk of incurring losses due tofluctuations in the value of assets and liabilities and in
the amount of generated revenue as a result offluctuations in various market risk factors such as
interest rates, stock prices, and exchange rates. It isroughly divided into interest rate risk, price fluctuation
risk, and exchange rate risk.

Compliance risk
The Group controls the amount of market risk to
avoid becoming excessive through such measures assetting limits for holdings and losses, monitoring thestatus of compliance, measuring the amount of risksuch as VaR, and comparing it with the allocated risk
capital.
In a d ditio n , th e G ro u p evaluates ma rket 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 orother factor (market liquidity risk).
The Group takes every possible measure to manage
liquidity risk through such measures as appropriately
ma na gin g t h e st at us of f u n d invest m e nt a n d
procurement, maintaining stable funding, and holding
above a certain amount of assets that can beliquidated in a short period of time as current assets.

Operational risk management
Operational risk means a wide range of risks related
to business operations in general, including the risk of
incurring losses caused by business process, activities
of officers or employees, improper or non-functional
systems, or external events.
The Group categorizes the operational risk according to
its characteristics into administrative risk, system risk, legalrisk, or other risk. The Group has designated divisions
responsible for each risk and an integrated management
division, and puts in place a risk management system thatcovers business operations in general.

Risk governance system

59 │Tokyo Kiraboshi Financial Group, Inc.│

Board of Directors

Report❶ Establishment, revision and abolition of risk
management regulations and developmentof management system❷ Verification of the effectiveness of policy
formulation processes and revision of suchprocesses in a timely manner❶ Establishment, revision and abolition of risk
management rules, etc.
❷ Verification of the effectiveness of processes
for establishing regulations and systems, andrevision of such processes

ReportRisk Management Committee❶ Analysis and evaluation of the status of risk
management❷ Verification of analysis and evaluation processes
and revision of such processes in a timely manner❸ 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 Group.
The Division identifies and manages various risks
faced by the Group in accordance with various
regul atio ns (Inte grate d Risk M a na gem ent
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.)(i) B u i l d i n g , m a i n t a i n i n g , a n d re v i e w i n g t h e
integrated risk management system(ii) Verifying and reviewing the effectiveness of
methods and management systems related torisk management(iii) M onitoring various risks (credit risk, market risk,
liquidity risk and operational risk)(iv) Reporting the status of risk management (thestatus of use of allocated capital, the status ofcompliance with various management standards,etc.) to the Risk Management Committee, theManagement Meeting and the Board of Directors

Risk Management Division❶ Drafting of risk management
regulations, etc.
❷ Establishment and review ofmanagement regulations, etc. andthe reporting and approval structure❸ Monitoring, etc. of various risks❹ Reporting of monitoring items, etc.
to each meeting body
❺ Design, verification and monitoring ofoperation of the internal rating system

Compliance risk is the risk of incurring severe damage
such as the loss of Group’s social confidence due tofailure to comply with laws and regulations or “codes”
such as the Group’s management philosophy andpolicy, and regulations.
The Group has established a compliance program,and the management team takes the lead in an effort

to prevent the occurrence and recurrence of actual
risks and potential risks by taking steps such as
disseminating and providing education on compliancematters required for appropriate business operation,an d m o nito ring an d co ntrolling th e status ofestablishment and implementation.

Conduct risk
The concept of conduct risk is where an officer or
employee acts contrary to social norms, acts inviolation of trade practices or market practices, or acts
in a way that is detrimental from the perspective ofusers, and customers are inconvenienced, fairness ofthe market is harmed, or the reputation of the financial
institution itself is harmed as a result.
The Group acts in compliance with not only laws,
regulations and internal rules, etc., but also in compliancewith the Group’s ethical and action guidelines.

Cybersecurity
Risks related to cyberattacks are increasing due tocyberat tacks which are becoming increasingly
advanced and sophisticated over the years.
In providing financial ser vices utilizing digitaltechnolog y, we are undertaking cybersecurit ymeasures in an effort to provide highly convenientand secure services to customers.
The Group regards cyber risk as a type of system
ris k , a n d h a s a s si g n e d p e rs o n s i n ch a rge o fcybersecurity in the Risk Management Division. We
are working to continuously strengthen the Groupmanagement structure through efforts such as
sha ri n g o f i nfo rm ati o n w it h ex te rnal b o d i es ,collec tion of information rel ated to trends incyberattacks, vulnerabilities etc., dissemination of
information to Group 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 formulating 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.
On top of that, Kiraboshi Bank has introduced aphishing website detection service as a countermeasureagainst phishing frauds which are rapidly increasing inrecent years. When a phishing website is detected, we
provide attention-seeking information to customers. We
also provide customers with a security software
program (software equipped with measures against
illegal remittance and phishing frauds) so that they canuse our Internet banking service safely.
Risk event

Risk scenario

Major risk control

Loss of social trust due
to leakage of customer
information, confidential
information, etc.
attributable to service
suspension caused by a
Cyberat- cyberattacktack⃝ Vulnerability diagnosis
on websites, etc. andtaking measures todeal with their issues⃝ Conducting drills,
training and educationfor employees⃝ Formulation ofcontingency plans, etc.
⃝ Formulation of measures
to prevent recurrence
after the occurrence of a
failure, etc.

Crisis Management
The Group has established a crisis management
system for business continuity, such as providing safe
and secure financial functions to customers andemployees in the event of the occurrence of a natural
disaster such as an earthquake or the spread of
infectious disease. The Group has formulated
contingency plans for the occurrence of disasters andhas introduced a system for verifying the safety of
employees, and has also established systems such as

implementing periodic disaster drills. In addition, weare maintaining the functions of buildings andfacilities, etc. to be able to use facilities and systems,
etc. in a continuous and stable manner while also
implementing measures such as assessing facility
a gin g , c a rr yin g o ut a p p ro p riate maintena n ce
management to prepare for various types of disasters,
accidents, and infectious diseases, etc.
│Tokyo Kiraboshi Financial Group, Inc.│ 60

Tokyo Kiraboshi
Financial GroupManagement Base That Supports Value Creation

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Compliance
Basic approach

Initiatives for anti-money laundering, etc.

The Group regards compliance as one of the top
priority management issues, strives to establish
corporate ethics based on its social mission as aregional financial group, and has established its
basic policy to foster the corporate culture thatemp hasizes co mpliance an d is accre dite d byshareholders and trusted by customers 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 Group establishes a compliance program foreach fiscal year, and the management team takes
the lead in an effort to prevent the occurrence andrecurrence of not only actual risks but also potential
risks by taking steps such as disseminating andproviding education on compliance matters including
conduct risk required for appropriate business
operation and improvement of quality of operations,an d m o nito ring an d co ntrolling th e status ofestablishment and implementation.
The Group also has established the Compliance
Commit tee to propose measures, etc. for thecompliance-related matters of the Group and tostrengthen and improve compliance functions. In

addition, the Group has assigned the officer in charge of
the Risk Management Division as the chief complianceofficer, and established the Risk Management Division
as the division supervising compliance related matters,
thereby putting a system in place.
We created the “Headquarters Compliance Officer(Headquarters CO)” role in December 2020 to enhance
the Group’s ability to respond to compliance risk, andthe “Sales Office Compliance Officer (Sales Office CO)”role who stands in between the first and second linesof defense in April 2021 to strengthen collaboration
between sales offices and the headquarters. In theseways, we are striving to further develop and strengthen
the system related to compliance.

Chart of compliance system
Kiraboshi Bank, Ltd.
Sales oﬃces andheadquarters divisions

Sales Oﬃce CO

Compliance oﬃcer
Compliance administrator

Instructions/Management

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.

Board of Directors

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

Risk Management Division (Headquarters CO)

works on a continuous basis to establish a system toensure the effective functioning and appropriatenessof the anti-money laundering system.
More specifically, we designate documents created by
specified business operators under the “Act on
Prevention of Transfer of Criminal Proceeds” as a form of“risk assessment report” by which we comprehensively
and specifically identify and assess risks related tomoney laundering and report suspicious transactions
appropriately. Through these and other ways, we
continuously take measures to mitigate risks.
In addition, Kiraboshi Bank continuously works toenable employees to acquire and improve knowledge
by implementing internal anti-money laundering
training and supporting them in taking and passing
external examinations.

Establishment of system to exclude antisocial forces
While always being aware of the gravity of public
mission and social responsibility as a bank, theCompany takes company-wide initiatives to break any
and all relationships with antisocial forces, etc.
including transactions with them. Such initiatives
include decisive refusal to provide funds to antisocial
forces that threaten order and safety of civil society
an d resolutely exclu din g u n d u e d eman d an dintervention 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,” and are working toconduct training and education for officers, employees,
etc. In addition, the Risk Management Division centrally
manages information related to antisocial forces, while
the Company and Group companies strive to collectand share information related to antisocial forces.

Establishment of systems to protect customers and manage customer information

Headquarters CO
Audit & Supervisory Board Members
Audit & Supervisory Board

As crime groups transfer funds across a broader
range of regions and threats of international terrorism
are increasing, there has been a growing risk that
financial institutions can get involved in money
laundering and terrorism financing.
The Group considers the prevention of money
laundering, etc. as one of the most importantmanagement issues, and its basic policy is toestablish an effective management system to maintainthe public trust, while making efforts to constantly
verify and sophisticate the system.
The 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,” but also

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

Based on the recognition that it is the Group’s social
responsibility to handle personal information ofcustomers in a proper and strict manner, we strictly
comply with laws, regulations, and rules and undertake
corporate activities in a faithful 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.
Kiraboshi Bank 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 offer a “financial ADR system” which facilitates
the resolution of conflict with customers through the
involvement of a third party.
On top of that, Kiraboshi Bank collects and manages“customer feedback” provided through its website andvia mail, and works to improve various operations andquality. “Customer feedback” is centrally managed at
the Customer Relations Center, and the information isshared with officers and others including related
divisions at the headquarters.

Initiatives to make use of customer feedback (Kiraboshi Bank)

Whistleblowing (hotline) system
The Group has established the “Hotline System” as amechanism for responding properly to an officer,
employee, dispatched worker, part-time worker, orother staff who initiates whistleblowing or wishes tohave a consultation about violation of laws andregulations and other improper compliance issues(including harassment).
Kiraboshi Bank, Ltd. has established a contact point for
whistleblowing internally in the Compliance Section of
61 │Tokyo Kiraboshi Financial Group, Inc.│OﬃcersRisk Management Department and externally in thelaw firm which its legal counsel works for.
Through the whistleblowing system, we strive torealize early detection and correction of complianceincidents while ensuring the confidentialit y ofwhistleblowers. The Group’s internal regulations
stipulate strict policies including prohibition ofdisadvantageous treatment of whistleblowers.

Kiraboshi Bank, Ltd.

Customers

Collecting
andmanaging
Improvements Analyzing│Tokyo Kiraboshi Financial Group, Inc.│ 62

Tokyo Kiraboshi
Financial Group

Financial Data and Corporate Data

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Tokyo Kiraboshi Financial Group, Inc.

FG: Financial Group

Officers (As of July 1, 2022)

Hisanobu Watanabe,Group CEOPresident

Financial Data andCorporate Data

Hidenori Tsunehisa,

Group CFOGroup CSO

Deputy PresidentGroup CSuO

Satoru Nobeta,

Senior Managing Director

Group CIO

Group CRO

Shoji Nishio,

Shuya Nomura,

Katsuya Tsuboi,

Outside Director

Outside Director

Full-time Audit & Supervisory Board Member■ Career Summary■ Career Summary■ Career Summary■ Career Summary■ Career Summary■ 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, lnc.
May 2018 Deputy President, Tokyo Kiraboshi Financial Group, Inc.
President, Kiraboshi Bank, Ltd. current position
Jun. 2020 President, Tokyo Kiraboshi Financial Group, Inc.

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, ShinGinko Tokyo, Limited
Apr. 2016 Director, Tokyo TY Financial Group, lnc.
May 2018 Senior Managing Director, Kiraboshi Bank, Ltd.

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, lnc.
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. current position
Jun. 2021 Director and Senior Executive Officer, Kiraboshi Bank,
Ltd. current position

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. current position
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. 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

Takeshi Miura,

Nobuyuki Yasuda,

Yuki Takahashi,

Hideki Uchida,■ Career Summary■ Career Summary■ Career Summary

Apr. 1985 Joined the Tokyo Tomin Bank, Limited
Oct. 2014 Director Managing Executive Officer,
Tokyo TY Financial Group, Inc.
Jun. 2017 Director 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.

Apr. 1988 Joined Yachiyo Shinkin Bank
Jun. 2017 Director and Executive Officer, The Yachiyo Bank,
LimitedMay 2018 Director and Executive Officer, Kiraboshi Bank, Ltd.
Apr. 2020 General Manager of Corporate Planning Division,
Tokyo Kiraboshi Financial Group, Inc.
Director and Executive Officer, Kiraboshi Bank, Ltd.
Jun. 2020 Director and Managing Executive Officer, Kiraboshi
Bank, Ltd. current position
Jun. 2021 Director and General Manager of Corporate Planning
Division, Tokyo Kiraboshi Financial Group, Inc.

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

current position

Jun. 2021 Deputy President, Tokyo Kiraboshi Financial Group,
Inc. current position

current position

Director

Director

current position

Outside Director

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
current position

current position

Group CEO

Chief Executive Officer

Group CIO

Chief Information Officer

Group CFOGroup CRO

Chief Financial Officer
Chief Risk Officer

Group CSO
Group CSuO

Chief Strategy Officer

Chief Sustainability Officer

Company Overview (As of March 31, 2022)

current position

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

current position

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

current position

Jun. 2021 Outside Director, Tokyo Kiraboshi Financial Group, Inc.
current position

Nobuko Inaba,

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.)

Audit & Supervisory Board Member

current position

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

Dec. 2014 Senior Partner, Hayabusa Accounting Corporation
current position

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

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

Masahiro Ogura,
Executive Officer

Organization Chart (As of April 1, 2022)
General Shareholders Meeting

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¥27.5 billion
Tokyo Stock Exchange, Prime Market (Securities Code: 7173)

Audit & Supervisory
Board
Board of Directors
Audit & Supervisory
Board Oﬃce
Internal Audit
DivisionManagement Meeting

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

Corporate Planning Personnel Aﬀairs Risk Management Business Strategy Digital Strategy Partnership Promotion Corporate Communication
Division
Division
Division
Division
Division
Division
Division

Secretariat
Oﬃce

Tokyo Metropolitan
Group Strategy
Sustainability
Public Sector Collaboration
Government Collaboration
Oﬃce
Promotion Oﬃce
Promotion Oﬃce
Promotion Oﬃce

63 │Tokyo Kiraboshi Financial Group, Inc.││Tokyo Kiraboshi Financial Group, Inc.│ 64

Tokyo Kiraboshi
Financial Group

Consolidated Financial Statements

Tokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Financial Data andCorporate Data

Tokyo Kiraboshi Financial Group, Inc. and its Consolidated Subsidiaries
March 31, 2022 and 2021

Consolidated Balance Sheets

Thousands of
U.S. Dollars
2022

Millions of Yen
2022

2021

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��������������������������������������������������������������������������������������
Gain on disposal of non-current assets������������������������������������������������������������������
Software��������������������������������������������������������������������������������������������������������������������������
Leased assets����������������������������������������������������������������������������������������������������������������
Other tangible fixed assets��������������������������������������������������������������������������������������
Net defined benefit assets������������������������������������������������������������������������������������������
Deferred tax assets��������������������������������������������������������������������������������������������������������
Customers’ liabilities for acceptances and guarantees�������������������������������������
Reserve for possible loan losses��������������������������������������������������������������������������������

¥ 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)¥ 753,974―
68,935845
1,620
1,019,415
3,926,518
9,422
18,71462,99856,362
16,49933,192
2,022
6
4,641
6,629
4,101
271
2,257
24,0543,140
4,412(35,101)$ 6,899,403
49,799572,179
6,348
14,2088,274,818
35,510,564
56,050181,371
532,192
454,579
129,348
271,198
15,850580
37,59264,69457,7491,674
5,253
236,555
38,96545,943(287,932)

Total assets¥ 6,443,807¥ 5,921,945$ 52,649,783

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�������������������������������������������������������������������������������������

¥5,157,583
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

¥4,972,473
9,500
59,632
271,382
241,372293
4,000
43,864
1,523
155
163
53
14
43
7
1,289
794
0
86
4,412

$42,140,558
77,620960,250
2,472,154
3,790,366
5,351
31,048490,595
13,113
931
1,773
457
57
416
24
3,023
6,185
0
866
45,943

Total liabilities¥ 6,124,495¥ 5,611,065$ 50,040,812

¥

¥

$

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

27,500150,966
133,470(966)

27,500150,677
117,514(742)

224,691
1,233,483
1,090,530(7,892)

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������������������������������������������������������������

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

294,949
13,078
189
(242)
11
2,863

2,540,803
34,202
5,515(1,977)196
30,035

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

8,320

15,90067,979Subscription rights to shares���������������������������������������������������������������������������������������

13

30

106

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

8

―

65

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

319,312

310,880

2,608,971

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

¥ 6,443,807¥ 5,921,945$ 52,649,783

U.S. dollar amounts are the yen equivalent, calculated for convenience only, at the rate of ¥110.71 = U.S. $1.

65 │Tokyo Kiraboshi Financial Group, Inc.│

Consolidated Income Statements and Consolidated
Statements of Comprehensive Income
Consolidated Income Statements2022¥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
15,651
24,943
0
0
172
172
―

2021
¥93,352
58,751
46,384
11,422
4
384
556
150
14,940
4,093
15,41653
15,36285,127
1,252
734
1
87
172
237
14
3
3,273
1,211
56,09823,291
7,858
15,432
8,224
0
0
124
97
27

Thousands of
U.S. Dollars
2022$885,268
515,761
407,525
94,092
98
9,714
4,314
2,679
152,635
19,511
194,664375
194,288681,460
9,608
6,895
16
269
1,887
302
114
98
27,804
7,026
459,122
177,882
49,995
127,878
203,799
0
0
1,405
1,405
―

24,771

8,099

202,393

6,588

3,938

Millions of Yen
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 claim�����������������������������������������������������������������������������
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���������������������������������������������������������������
Extraordinary losses
Loss on disposal of non-current assets����������������������������������������������������������������
Loss on cancellation of system contracts������������������������������������������������������������
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

4,865
1,722

1,551
2,387

18,183―¥ 18,183

53,827

4,161

148,566¥ 4,161$148,566―

Consolidated Statements of Comprehensive Income―2022¥18,183(7,580)(8,881)
485
12
813
(10)
10,6032021¥ 4,161
13,455
7,397
148
7
5,902
―
17,616

Thousands of
U.S. Dollars
2022$148,566(61,933)(72,563)
3,962
98
6,642
(81)
86,632¥ 10,603―¥ 17,616―$ 86,632―

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

39,74914,069U.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.│ 66

Consolidated Financial Statements

Consolidated Statements of Changes in Net Assets

Millions of yen
2022
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��� 27,500 150,677 117,514(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
reflecting changes in accounting policies��� 27,500 150,677 117,363(742) 294,798 13,078
189
(242)
11
2,863 15,900
30― 310,729
Changes of items during the reporting period���Dividends of surplus����������������
(2,076)(2,076)(2,076)
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
Millions of yen
2021
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��� 27,500 150,684 114,641(814) 292,010
5,629
41
(242)
4 (3,038) 2,394
56― 294,462
Changes of items during the reporting period���Dividends of surplus����������������
(2,071)(2,071)(2,071)
Profit attributable to owners of parent���
4,161
4,161
4,161
Acquisition of treasury stock���
(15)
(15)
(15)
Disposition of treasury stock��
(6)
87
80
80
Increase in retained earnings due to
782
782
782
addition of equity-method affiliates���
Increase in treasury stock due toaddition of equity- method affiliates���
(0)
(0)
(0)
Net changes of items other than shareholders’
7,448
148
―
7
5,902 13,505(25)― 13,479
equity during the reporting period��������������
Total changes of items during the reporting period��―(6) 2,873
71
2,938
7,448
148
―
7
5,902 13,505(25)― 16,418
Balance at end of period���������� 27,500 150,677 117,514(742) 294,949 13,078
189
(242)
11
2,863 15,900
30― 310,880
Thousands of U.S. Dollars
2022
Shareholders’ equity
Accumulated other comprehensive income
Total
Net
Net
Foreign Remeasureaccumulated Subscription NonTotal
unrealized deferred Revaluation
Total netcurrency ments ofCommon Capital Retained Treasury
rights to controllingothershareholders’ gain on
gains reserve forassetstranslation defined
stock surplus earnings stock
interests
comprehen- shares
equity available-for- (losses) on land
adjustment benefit plans
sive income
sale securities hedges
Balance at beginning of the year��� 224,691 1,231,121 960,160(6,062) 2,409,910 106,855
1,544(1,977)89
23,392 129,912
245― 2,540,076
Cumulative effects of changes in accounting policies���(1,233)(1,233)(1,233)
Restated balance at beginning of the year
(6,062) 2,408,677 106,855
1,544(1,977)89
23,392 129,912
245― 2,538,843
reflecting changes in accounting policies��� 224,691 1,231,121 958,926
Changes of items during the reporting period���Dividends of surplus����������������
(16,962)(16,962)(16,962)
Profit attributable to owners of parent���148,566
148,566
148,566
Acquisition of treasury stock���(2,287)(2,287)(2,287)
Disposition of treasury stock��
(16)
457
433
433
Capital increase of consolidated subsidiaries���
2,377
2,377
2,377
Net changes of items other than shareholders’(72,644)3,962―
98
6,642 (61,933)(138)
65 (61,998)
equity during the reporting period��������������
Total changes of items during the reporting period��
―
2,353 131,595(1,822) 132,126 (72,644)
3,962
―
98
6,642 (61,933)(138)
65
70,128
Balance at end of period���������� 224,691 1,233,483 1,090,530(7,892) 2,540,803
34,202
5,515(1,977)196
30,03567,979106
65 2,608,971

67 │Tokyo Kiraboshi Financial Group, Inc.│Tokyo Kiraboshi
Financial GroupTokyo Kiraboshi Financial Tokyo Kiraboshi Financial
Group’s Value Creation Group’s Growth Strategy

Initiatives aimed
at Sustainability

Management Base That
Supports Value Creation

Consolidated Statements of Cash Flows
Millions of Yen
Cash flows from operating activities
Profit before income taxes�����������������������������������������������������������������������������������������������������
Depreciation��������������������������������������������������������������������������������������������������������������������������������
Share 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 provision for loss on cancellation of system contracts���
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���������������������������������������������������������
Net increase (decrease) in trading account securities�������������������������������������������������
Net (decrease) increase in loans and bills discounted������������������������������������������������
Net increase (decrease) in deposits�����������������������������������������������������������������������������������
Net increase (decrease) in negotiable certificates of deposit�����������������������������������
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�������������������������������������������������������������������������������������
Purchase of shares in affiliates�����������������������������������������������������������������������������������������������
Net cash provided by (used in) investing activities
Cash flows from financing activities
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

2022
¥

¥

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

2021
¥

8,099
4,820
(24)
2,025
(113)
(28)
23
(10,819)
(12)
(9)
3
(0)
(29)
(935)
134
(58,751)
1,252(5,446)(168)(9,003)97
160(165,683)
341,285
2,200
199,195
134
7,777(158,059)
14,761(3,829)61(1,092)(200)
55,154(1,724)14,007235,258(3,719)1,005
232,544

Financial Data andCorporate Data

Thousands of
U.S. Dollars
2022$

202,393
41,768(53,435)
1,135
669
(326)
441
(40,019)
24
(57)
57
(32)
(7,508)―(294)(515,761)
9,608(5,752)(964)(139,978)
1,405
555(3,428,548)
1,512,460―
1,818,204(6,642)(58,730)
473,012
254,800
20,933
2,949(28,458)(1,634)
499,093(10,205)
6,250
547,422(7,941)
11,855551,335(331,281)
193,832
169,109―(3,170)(560)
4(3,483)―24,450(384,714)
214,154
168,458(800)(2,342)(753)
1(4,339)(4,999)(15,335)(2,706,765)
1,583,724
1,381,722―(25,900)(4,575)32(28,458)―
199,771(2,076)
(279)
2
18
35
(0)
(2,299)2
89,630753,492
843,122(2,071)
(15)
6
27
52
(3)
(2,003)0215,206
538,286
753,492(16,962)(2,279)
16
147
285
(0)
(18,784)16
732,331
6,156,483$ 6,888,814¥│Tokyo Kiraboshi Financial Group, Inc.│ 68

2022 Annual Report
Published in July 2022

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.