Tokyo Kiraboshi Financial Group

Results Briefing for the First Half of the
Fiscal Year Ending March 31, 2022

December 2, 2021

Contents

Tokyo Kiraboshi FG

Overview of the Tokyo Kiraboshi Financial
Group

Financial Targets (KGI) of Medium-TermBusiness Plan and Progress

P.17

What the Tokyo Kiraboshi Financial Group Is
Aiming for

P.4

Achievements of Initiatives in the Medium-TermBusiness Plan (Summary)

P.18

Overview of Tokyo Kiraboshi Financial Group,
Inc. and Kiraboshi Bank,Ltd.

P.5

Business Strategy (Corporate Customers)

P.19

Business Strategy (Corporate Customers /Business Financing)

P.20

Business Strategy (Corporate Customers /Medical Institutions Support Business)

P.21

Business Strategy (Corporate Customers / Equity
and Mezzanine Finance)

P.22

Business Strategy (Trust Business / RetailCustomers)

P.23

Portfolio of Securities

P.24

Improvement of Management Efficiency

P.25

Capital Policy

P.26

Sustainability Initiatives

P.27

Digital Bank Business

P.28

Digital Strategy of Kiraboshi Tech, Inc.

P.29

Further Promotion of Partnership with External
Organizations

P.30

Example of Tokyo-based Platform

P.31

Summary of Business Results
Summary of Business Results for the First Half of
the Fiscal Year Ending March 31, 2022

P.7

Factors Affecting Net Income (Kiraboshi Bank)

P.8

Loans（Kiraboshi Bank）

P.9

Deposits and Assets under Management(Kiraboshi Bank)

P.10

Securities (Kiraboshi Bank)

P.11

Problem Assets Subject to Disclosure under the
Financial Reconstruction Law and Credit-Related
Costs (Kiraboshi Bank)

P.12

Capital Ratio/Core OHR/ROE

P.13<Reference> Plan for the Fiscal Year Ending
March 31, 2022 (announced on May 13, 2021)

P.14

Actions in the New Medium-TermBusiness Plan
Medium-Term Business Plan Promotion Platform

P.16

2

Overview of the Tokyo Kiraboshi
Financial Group3

What the Tokyo Kiraboshi Financial Group Is Aiming forTokyo Kiraboshi FG

Management
philosophy
Management
policyTo 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.

Achieve enduring existence as a local regional
financial group through the provision of uniquefinancial services

Leverage the special features of the Tokyo area
to continue to meet new challenges in order tocontribute to the development of our customers
and local economies

From May 2018

We put great value on the “thoughts” ofcustomers, the region, and our employees,
and seek to develop a presence that isalways in need and worthy of trust.

From April 2021

Previous Medium-Term Business Plan “Start-up ☆Kiraboshi”

Vision we areaiming for

A group that brings together thoughts

A group that rises to the challenge

A group that sparkles

New Medium-Term Business Plan

Be a Tokyo-based platform owner that creates newvalues for customers

Be the urban regional bank group most favored bycustomers in the Tokyo metropolitan area

~ From Tokyo to Japan and to Asia ~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 the organization,achieving self-fulfillment and realizing oneʼs own happiness<Three principles of action
guideline for Kiraboshibito>〜Who are “Kiraboshibito” 〜
People who put “Kiraboshi
philosophy” into practicePrinciple/
sense ofmissionKiraboshibito

An individual with “high aspirations”

Ingenuity/perseverance

Responsibility/ courage

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

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

4Overview of Tokyo Kiraboshi Financial Group, Inc. andKiraboshi Bank,Ltd.
Tokyo Kiraboshi FG(as of September 30, 2021)

Reviewed 11 out of 16 companies following
establishment of Tokyo Kiraboshi FG
A: converted to equity-method affiliate (item 8)
B: converted to fully-owned subsidiary (items 9,
10, 12)
Blue: newly established (items 5, 7, 11, 13, 14,
15, 16)①
Location ofhead office

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

Capital¥43.7 billion

Total assets¥6,368.8 billion(as of September 30, 2021)

Company nameBusiness
description

Ownership
ratio

Kiraboshi Credit Guarantee Co.,Ltd.

Guarantee
operations

100%

Yachiyo Credit Guarantee Co., Ltd.

Guarantee
operations

100%

④

Kiraboshi Business Service Co.,
Ltd.

Centralizedadministrative
services100%⑤

Kiraboshi Tech, Inc.

Fintech services

100%

⑥

Kiraboshi Business Consulting
Shanghai Co., Ltd.

Consulting

100%

⑦

KIRABOSHI BUSINESSCONSULTING VIETNAM CO., LTD.

③

Consulting

100%(Equity-method affiliate)⑧

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

Capital¥27.5 billion

Consolidated
total assets¥6,386.8 billion(as of September 30, 2021)(Group companies)②

Location ofhead office

Kiraboshi Insurance Agency CO.,LTD. 【A】

Insurance agency
business

37%(Group companies)(as of September 30, 2021)

Company nameBusiness
description

Ownershipratio⑨

Tokyo Kiraboshi Lease, Inc. 【Ｂ】

General leasing
business

100%⑩

Kiraboshi System, Inc. 【B】

Systemprocessing
outsourcing

100%

⑪

Kiraboshi Consulting Co., Ltd.

Consulting

100%

⑫

Kiraboshi JCB Co., Ltd. 【B】

Credit cardbusiness

100%⑬

Kiraboshi Capital Co., Ltd.

Structuring andadministrationof funds

100%⑭

Kiraboshi Life Design Securities
Co., Ltd.

Securities
business

100%⑮

Kiraboshi business office service,
Inc.

Payroll
operations, etc.

100%

⑯

Kiraboshi Digital Bank
Preparatory Co., Ltd.
[Scheduled to start operation in
FY2021]Bankingbusiness

100%5Summary of Business Results

6Summary of Business Results for the First Half of the
Fiscal Year Ending March 31, 2022
Tokyo Kiraboshi FG(¥100 million)(¥100 million)
Kiraboshi Bank (non-consolidated)

2020/92021/9Change1

Gross core business profit

341

357

+16

2

Net interest income

288

298

+10

3

Of which, interest on loans anddiscounts

229

239

+10

4

Of which, interest on securities

61

59

(1)

5

Of which, interest on deposits

(1)

(0)

+1

52

58

+6

(264)

(257)

+6

76

99

+22

6

Non-interest income

7

Expenses

8

Net core business income

2020/9results

2021/9results

2021/9plan(*)

Year-onyear

Full-year
achievement
rate

Ordinary profit

35

73

55

+109.0%49.3%

Profit attributable toowners of parent

20

47

35

+131.6%

47.6%

Tokyo Kiraboshi FG(consolidated)

9

Credit-related costs

(48)

(30)

+17

10

Gains (losses) on bonds

20

3

(16)

11

Gains (losses) on stocks and othersecurities

31

(0)

(32)

12

Other non-recurring profit (loss)

(37)

(1)

+35

13

Ordinary profit

42

69

+27

14

Income taxes

(15)

(22)

(6)

15

Net income

26

46

+19

* Achievement rate of the 2021/9 plan
○Ordinary profit 134.5％○Profit attributable to owners of parent 136.1％[Diff. b/w
consolidated andnon-consolidated](¥100 million)

Kiraboshi Bank (non-consolidated) net
income46

Groupʼs consolidated net income[¥600 mn of negative effects including startup
deficit of newly-established Group companies]

4

Amortization (adjustment of book value of bonds
owned at the time of business integration) andother adjustments(3)

Tokyo Kiraboshi FG (consolidated) net
income47[Yield] (％)
Loan yield
Yield difference
Deposit yield

1.193
1.170

1.178

1.187

1.199

1.164

1.173

1.182

0.014

0.014

0.017

2020/92021/32021/90.023
2020/3* Figures for 2020/3 and beyond are calculated by adding interest subsidies to interest on loans and discounts, in an amount equivalent to interest on certain loans such as effectively interest-free andunsecured loans that are reimbursed later by local governments.

7

Factors Affecting Net Income (Kiraboshi Bank)Tokyo Kiraboshi FG[Factors affecting net income (year-on-year)] (¥100 million)① Net interest income:② Non‐interest income:③ Expenses (*):
④ Credit‐related costs:

A decrease of ¥1.7 billion year‐on‐year resulting partly from enhancement of credit management system.

⑤ Gains (losses) on
bonds:⑥ Gains (losses) on
stocks and othersecurities:⑦ Other non‐recurring
profit (loss):⑧ Net income:A decrease of ¥1.6 billion year‐on‐year due largely to absence of gain from sale of bonds which was recordedin the previous fiscal year.
A decrease of ¥3.2 billion year‐on‐year given absence of gain from sale of stocks held for strategic purposes
which was recorded in the previous fiscal year.

Increase(1)(¥100 million)

(32)

+6
+6
+1

NonInterest on interest
deposits
incomeInterest on
loans anddiscounts(16)

Decrease

Interest on
securities

26

+35

③

④

264
24

257
22

(7)

104

109

117

+8

131

130

116

(14)

2019/92020/92021/9Taxes

Non-personnel expenses(2)

Personnel expenses[Changes in profit from customer business](¥100 million)(6)
46

Credit- Gains
related (losses)
Expenses costs on bonds[Ref]
Compared with 2021/3

258
21

Incometaxes

Profit from customer business expanded significantly as aresult notably of increases in interest on loans and discounts
as well as commission income from corporate customers,
and decrease in expenses.

⑤
48

②
①

Gains (losses)
Other nonon stocks and recurring profit
other securities(loss)⑥

2020/9Net income(¥100 million)

An increase of ¥3.5 billion year‐on‐year as a result primarily of decrease in merger and systems integration
costs.
An increase of ¥1.9 billion year‐on‐year.

+17

+10

* [Breakdown of expenses]

An increase of ¥1.0 billion year‐on‐year in interest on loans and discounts attributable largely to promotion oftransactions for main bank relationship building, business financing activities and COVID‐19 related loans.
An increase of ¥0.6 billion year‐on‐year due to solid performance of commission from corporate customers
such as in business financing.
A decrease of ¥0.6 billion year‐on‐year reflecting decrease in personnel expenses, despite an increase in non‐personnel expenses, which was due in part to recording of BIB (branch‐in‐branch) implementation expenses.

⑧ Net income increasingby ¥1.9 billion

Compared with
2020/9+¥4.7 billion

81⑦2021/9Net income

2019/92020/92021/9* Calculation method: (loan balance x loan and deposit rate margin) + income from fees
and commissions - general and administrative expenses

8Loans（Kiraboshi Bank）
Tokyo Kiraboshi FG

Increase in loan balance associated primarily with COVID-19 related loans and SME financing resulting frompromotion of transactions for main bank relationship building (up ¥253.1 billion compared with March 31, 2021)■ Loan balance by type of customer

37,69839,271

1,423
4,692

1,201
4,622

23,892

25,980(¥100 million)

39,3801,174
4,577

26,327■ Loan balance by industry[Ref]
Compared with 2021/3

41,911+2,531

1,041
5,523

(133)

28,291+946+1,964Local
governments
Medium andlarge-sizedcompanies
SMEs

7,689
2020/3

7,468
2020/9■ Loan balance by region

7,300
2021/3

7,054

(246)

Individuals(¥100 million)[Ref]
Compared with 2021/3

37,69839,271

39,380

450
5,608

465
5,805

464
5,623

41,911484
5,776+2,53133,00033,29235,6502020/92021/32021/9+61

Construction

5,126

+203

Commerce

6,024

6,669

6,813

7,353

5,061

5,450

7,300

7,054

(246)

+483

4,736

2,286
4,152

+770
+318

Banks and otherfinancial institutions+540

Real estate
brokerage+389

Real estate leasing
Services

7,468

4,241

4,218

4,241

4,724

2020/32020/92021/32021/9+20

Individuals
OthersManufacturing+153

OthersKanagawa

Individuals

11.2
16.8

+2,3588.3

2021/9(%)

Tokyo

Services

2020/3

+12

3,466
2,222
4,923
1,516
3,834

4,066

Manufacturing

3,478
2,283

3,590
2,211
4,957
1,510
3,907

Others31,639[Ref]
Compared with 2021/3

3,294
1,960
4,422
1,840
4,157

7,689

2021/9(¥100 million)

Real estateleasing

13.0

Construction

5.4
12.2

Commerce

5.4

Banks and otherfinancial
institutions

9.9
17.5

Real estate
brokerage9

Deposits and Assets under Management (Kiraboshi Bank)Tokyo Kiraboshi FG

Increase in deposit balance largely reflecting increase in cash on hand notably of SME customers (up ¥144.6 billion
compared with March 31, 2021)
Accumulation of assets in securities subsidiary contributing to overall balance of assets under management■ Deposit balance by client

46,603
2,065
14,69550,025
2,184
17,334(¥100 million)[Ref]
Compared with 2021/3

50,03351,479 +1,446

1,885
17,547

2,006■ Balance of assets under management[Ref]
Compared with 2021/3+121

18,771 +1,224

4,626
Others

276

4,787
217
305

Corporate
Individuals

29,84130,50630,60130,701(¥100 million)

2,441

2,384

5,266

5,601 +335

1,079

1,494 +415

342

341

(1)

2,318

2,307

(11)

KLD (*)
Public bonds+100

Insurance
Investment trusts

2020/32020/9■ Deposit balance by region

46,603762
9,928

2021/3(¥100 million)

1,908

1,880

1,525

1,458

2020/32020/92021/32021/9(67)2021/9[Ref]
Compared with 2021/3

50,02550,03351,479+1,446854
10,644827
10,606861
10,877+34* Kiraboshi Life Design Securities Co., Ltd.

■ Loan-to-deposit ratio / security-deposit ratio+271

Others

80.4%

79.7%

Kanagawa

79.0%

78.2%

Loan-todeposit ratio

Tokyo

35,911

38,52538,59939,739+1,140

22.7%

19.5%

19.0%

19.4%
Securitydeposit ratio

2020/32020/92021/32021/92020/32020/92021/32021/910

Securities (Kiraboshi Bank)Tokyo Kiraboshi FG

Promotion in diversification of investment management and portfolio diversification while aiming forstable profits■ Securities balance

9,491(¥100 million)

8,896

10,204■ Breakdown of “available-for-sale securities”[Ref]
Compared with 2021/3

10,211[Ref]
Compared with 2021/3

+7

3,901
263

2,443
270

3,901

2,785

4,135

+234

+58

296

419

477

3,411

3,155

2,927

2,537

594
1,808

653
2,074

653
2,017

2020/32020/92021/32021/93,700
539■ Valuation gain/loss on securities(¥100 million)

216
181
138
102
47
(11)
2020/343
72
65
2020/9

(228)
+0
(57)

Other securities
Stock
Corporate
bonds

2,443
235
1,516

+234

372

+109

PE funds, etc.

(124)

Foreignsecurities

2,785
239

2,273

2,149

REITs

1,733
684

Municipal bonds
Government
bonds

4,135

757

+73

+177

437
253

490
321

679

856

2020/32020/92021/32021/9Investment
trusts■ Yield on securities[Ref]
Compared with 2021/3

300
121

+84

+59

1.30%
Available-forsale securities
Bonds

62
54

(¥100 million)

61

+7

1.33%
1.27%
1.18%

2020/32020/9118

2021/302021/9+18

2021/95.5 years

6.0 years

2021/32021/9■ Duration (overall bond portfolio)
Stocks

4.9 years

100

2021/3

Held-tomaturitybonds

3.8 years+02020/32020/911

Problem Assets Subject to Disclosure under the Financial
Reconstruction Law and Credit-Related Costs (Kiraboshi Bank)Tokyo Kiraboshi FG

A decrease of ¥1.7 billion YoY in credit-related costs resulting partly from enhancement of credit
management system■ Value of problem assets subject to disclosure[Ref]
Compared with 2021/3[After partial direct write-offs]

1,222
69

1,002
743
60

798

(¥100 million)

2019/9+220

Substandard
loans

70

Doubtful assets

1,101

+226

631

675

Bankrupt and

51

52

57

51

2020/32020/92021/32021/92.00%

2020/32020/92021/330(17)[Before partial direct write-offs](¥100 million)

2020/92021/9737

1,052

Reserve for possible loan
losses249

247

assetsCollaterals, guarantees, etc.

488

805

Problem assets

969

1,358

Coverage ratio

76.1%

77.4%

(6)

2.88%

[Value of problem assets subject to disclosure]
Value of problem assets subject to disclosure increased reflecting
provision of assistance loans to customers after securing a certain levelof coverage based on business feasibility evaluation, deterioration of
corporate performance due in part to the slowdown in economic
activities caused by COVID-19 pandemic, and other factors. Coverage
ratio increased YoY.

2021/9[Credit-related costs]
Credit-related costs decreased by ¥1.7 billion YoY to ¥3.0 billion,
resulting partly from enhancement of credit management system.

[After partial direct write-offs]

1.93%

48

Changequasi-bankrupt

Ratio of problem assets subject to disclosure

2.50%

2021/9■ Coverage status of problem assets subject todisclosure under the Financial Reconstruction Law

Covered amount875(¥100 million)

2020/936+168■ Credit-related costs

12Capital Ratio/Core OHR/ROETokyo Kiraboshi FG

Capital ratio declined by 0.61 points YoY due to increase in risk assets resulting from increase in loans
Core OHR and ROE improved YoY reflecting income growth■ Consolidated capital ratio (Tokyo Kiraboshi FG)

8.91%

8.65%

32,944

8.74%

8.30%

■ ROE (Tokyo Kiraboshi FG)[Ref]
Comparedwith 2021/3

34,572

32,61432,082(¥100 million)

2019/9Risk-* ROE (consolidated) =weighted

2,852

2,860

2,870

2,852

2020/92021/3

77.4%

77.0%

75.7%

1.38

3.00

Profit attributable to owners of parent x 2(Net assets at the beginning of the period+ net assets at the end of the period) / 2■ Annual dividend per share (Tokyo Kiraboshi FG)

2021/9■ Core OHR (Kiraboshi Bank)

2021/9<Bank of Japanʼs Special Deposit Facility
to Enhance the Resilience of theRegional Financial System>
Met OHR requirements in FY2020
Expected to meet the requirements in
FY2021 and onward

39.0%

Explanation
on dividends
is provided on
p.26.

46.5%

Total shareholder
return ratio

24.5%

72.1%

2020/3* Core OHR

2020/9＝2021/3

Expenses
Gross core business profit

× 100

× 100

assetsCapital2020/32020/92.29+1,958+18(％)

Annual60 yen60 yen60 yen60 yen

2019/32020/32021/32022/3 (forecast)dividend

2021/913

<Reference> Plan for the Fiscal Year Ending
March 31, 2022 (announced on May 13, 2021)<No change from initial plan>
Tokyo Kiraboshi FG■ 2022/3 plan（Kiraboshi Bank）(¥100 million)

2021/3
resultsA

2022/3plan
B

Gross core business profit

692

745

53

2

Net interest income

587

606

18

3

Of which, interest on
loans and discounts

463

488

24

4

Of which, interest on
securities

125

120

(5)

5

Of which, interest on
deposits

(2)

(3)

(1)

Non-interest income

2021/3
resultsA

Difference
（B-A）

1

6

■ 2022/3 plan (Tokyo Kiraboshi FG, consolidated)

139

34

Difference（B-A）

Ordinary profit

82

152

70

Profit attributable to owners ofparent

41

100

58

[Factors affecting net income (Kiraboshi Bank)]
Increase

Decrease

34
Expenses48
Interest on
loans anddiscounts

Noninterest
income(¥100 million)

Total

24
24

104

2022/3
plan
B

43
(11)
Gains
(losses)on bonds

(17)
(34)
Gains
(losses) on
stocks andothersecurities

Other nonrecurring
profit (loss)

111

Others7

Expenses

(524)

(499)

24

8

Net core business income

167

245

78

2021/3

9

Credit-related costs

(84)

(86)

(1)

10

Gains (losses) on bonds

14

3

(11)

11

Gains (losses) on stocks andother securities

43

9

(34)

[Net core business income]Despite a decrease in interest on securities, an increase of ¥7.8 billion from the fiscal
year ended March 31, 2021 is projected to reflect increases in interest on loans anddiscounts attributable to COVID-19 related loans and business financing activities, andin non-interest income led by commissions from corporate customers, in addition to
reduction in costs through continued implementation of efficiency improvement
measures.

12

Other non-recurring profit (loss)

(54)

(10)

43

13

Ordinary profit

88

161

72

14

Income taxes

(38)

(49)

(10)

15

Net income

48

111

63

Net core businessincome +¥7.8 billion
Ordinary profit +¥7.2 billion

2022/3[Ordinary profit]
Despite a forecast of decreases in gains on bonds and gains on stocks and othersecurities, an increase of ¥7.2 billion from the fiscal year ended March 31, 2021 is
projected given that, from FY2021, there will no longer be merger and systems
integration costs which were recognized in other non-recurring profit (loss).
[Tokyo Kiraboshi FG]
A ¥1.1 billion difference between consolidated and non-consolidated net income toresult due to startup deficit of strategically launched subsidiaries, amortization inaccounting for loss on redemption of securities and other factors

14Actions in the New MediumTerm Business Plan

15

Medium-Term Business Plan Promotion Platform
Tokyo Kiraboshi FG

Main market is “Tokyo area” where SMEs are concentrated■ Secure first calls by providing tailored financial services to the large number of SMEs.
■ Contribute to regional development through support of customersʼ business expansion.
Number of Kiraboshi Bank customers with main bank transaction relationship
Saitama

Source: Tokyo Shoko Research, Ltd.（2021）
Number ofcompanies

Number of customers
with main bankrelationship

Share

Tokyo

229,629

7,086

3.09%

Kanagawa

77,442

2,829

3.65%

Chiba

Tokyo

Number of newly
established corporations
in Tokyo

Kanagawa

No. 1 in Japan

Source: Tokyo Shoko Research, Ltd.

Difference＋27,592

39,949Branch Network
・Tokyo124
・Kanagawa 36
・Saitama
3・Chiba1
Total

Comparison of prefectural GDP (gross prefectural
domestic product) (FY2017）¥141 tn

12,357(FY2020)

Source: Prefectural Accounts¥40 tn¥40 tn

Aichi

Osaka

Percentage of
SMEs in Tokyo¥23 tn¥21 tn¥21 tnSaitama

Hyogo

Chiba

164 branches, 121 offices(as of September 30, 2021)
Australia

Source: Tokyo Shoko Research, Ltd.

Total ¥141 tn

On par with
Australia

164(FY2020)

Number of corporations
in Tokyo which closed or
discontinued theirbusiness

Tokyo+Kanagawa

98.9%
Source: Industry and Employment in Tokyo 201916

Financial Targets (KGI) of Medium-Term Business Planand Progress
Tokyo Kiraboshi FG● In the first half of FY2021, progress was made as planned in all the indicators, with 136% achievement rate in
net income
Contribution of subsidiaries to consolidated
income <consolidated> (¥100 mn)

ROE <consolidated> (%)

Refer to
p.26

5.0

3.0

2.6

2021/311

3.2

Launch of Kiraboshi Tech and
UI Bank to impact
2022/3 results+1.62 pt YoY
2021/92022/32023/32024/32020/32021/32021/9205

2020/9¥100 million

2022/32023/314

2020/32021/32022/32023/32024/375.7

72.1

2020/32021/32021/9

67.0

59.8

47

2020/32021/32021/96 months

2022/32023/32024/3(planned) (planned) (planned)

Capital ratio <consolidated> (%)

2022/32023/38.6

8.7

2020/32021/3

8.3

8.6

8.3

8.3

2023/32024/357.3

2024/3(planed) (planned) (planned)(planned) (planned) (planned)
6 months

41

Refer top.26

1242021/92024/3

Refer to
p.25

48
9

76

Core OHR <Kiraboshi Bank non-consolidated>
(%)

77.0

+ ¥4.7billion YoY

160
100

(planned) (planned) (planned)

6 months

234

200

2021/9 planachievement
rate
136.1%(4)(planned) (planned) (planned)

Profit from customer business <Kiraboshi
Bank non-consolidated> (¥100 mn)

4

4

3

2020/9 1.38%

1.3

2020/323

5.9

Profit attributable to owners of parent<consolidated> (¥100 mn)

2021/92022/3(planned) (planned) (planned)

6 months17

Achievements of Initiatives in the Medium-TermBusiness Plan (Summary)Tokyo Kiraboshi FG

１． Business strategy● Increase in gross core business profit● Increase in loan balance based on
corporate customer strategy
２． Optimization of management resources
and improvement of management
efficiency● Significant increase in profit from
customer business● Improvement in OHR● Reduction of personnel expenses● Reduction of the number of offices● Decrease in merger and systems
integration costs

Gross core business profit(2021/9)¥35.7 billion(+4.7% YoY)

Profit from customer business¥4.8 billion● Business of UI Bank
● Digital payment of Kiraboshi Tech, Inc.

(Refer to p.19)(2021/9)¥4,191.1 billion(+6.7% YoY)

Core OHR(2021/9)(Refer to p.25)

72.1%(2021/9)(+¥4.7 bn YoY)

(Down 5.3 pt YoY)

Personnel expenses(Refer to p.25)

Number of offices (Refer to p.25)(2021/9)(2021/9)(10.2％)(Down ¥1.3 bn YoY)

Merger and systems
integration costs (Refer to p.25)(2021/9)

３． Concept of digital-based platform

Loan balance(¥1.6 billion)(2020/9 ¥2.1 bn →2021/9 ¥0.4 bn)

121 offices(Down 13 offices YoY)UI Bank(Refer to p.28)

Scheduled to commence operation
during FY2021“LaLaQ” app(Refer to p.29)

Service launched in Nov. 2021

18

Business Strategy

Business Strategy (Corporate Customers)● Increase in loan balance reflecting promotion of main bank relationship building, significant increase incommission income from corporate customers through business financing and other activities
Loan balance (¥100 mn) / yield (%)
1.19

1.18

First half+¥253.1 billion(+6.4%)

37,698

1.20

1.19

1.24

Another ¥56 billion toachieve average balanceplanned for the next
fiscal year

41,911

Tokyo Kiraboshi FG

Interest on loans and discounts (¥100 mn)
1.26

463

441
44,344

42,469

562

239

229

219

488

530

40,44439,3802019/9,2020/32020/9,2021/32021/9,(2022/3)

2023/3(planned)

2024/3(planned)● Interest on loans and discounts on the rise due to steady growth in loanbalance
2020/3(balance,
actual)2021/3(balance,
actual)2021/9(balance,
actual)2022/3(averagebalanceplanned)2023/3(averagebalanceplanned)2024/3(planned)

Commission income from corporate customers (¥100 mn)
YoY¥1.3 billion● Average balance planned for FY2021 already exceeded by ¥146 billion in
FY2021 1H
Number of Kiraboshi Bank customers with main bank transaction
relationship * published benchmark figures

10,361

10,991

11,446

11,655
Of which,annual sales of¥300 million
and above

2,960

3,296

3,779

4,025

2018/3

2019/32020/32021/3● Number of customers with main bank relationship increased particularly
among customers with annual sales of ¥300 million and above

33

32
15

2019/9,2020/35655

2023/3(planned)

2024/3(planned)

43

26

12

2020/9,2021/32021/9,(2022/3)● Commission income from corporate customers was +107.3% YoY on
the back of growth in loan balance notably through business financing

19Business Strategy

Business Strategy (Corporate Customers /Business Financing)Tokyo Kiraboshi FG● Promote business financing by ensuring appropriate risk and return balance, many initiatives that lead tomain bank relationship building
Business loan balance (¥100 mn) / Yield (%)

1.86

1.77

1.91

1.87

1.84

1.52

2020/3

89
62

5,318
+1,307First half+¥63.2billion697

Interest on loans and discounts <business financing> (¥100 mn)

1,211+632

2021/338

4,011+1,398101212

2020/32021/32021/92,613

1,843 +770

2022/3(planned)

2023/3(planned)

2024/3(planned)

6 months

2021/92022/32023/32024/3(planned) (planned) (planned)● Interest on loans and discounts on the rise due to steady
growth in loan balanceCommission income from corporate customers <businessfinancing> (¥100 mn)● 2021/9: approximately 30% of LBO loan balance led tocontinuous main bank transactions

SF Division

MF Division● Established in January 2019
● Headcount of 43● Provide corporate customers
with highly specialized
financial support including
structured finance● Established in April 2021
● Headcount of 28● Support branch offices inbuilding main bank transaction
relationship such as throughuse of mezzanine finance

29
16

15

2021/32021/910

2020/329222022/3(planned)

2023/3(planned)

2024/3(planned)

6 months● As of Sep. 30, 2021, actual performance to full-year plan
was firmly on track20

Business Strategy

Business Strategy (Corporate Customers / Medical
Institutions Support Business)

Tokyo Kiraboshi FG● Proactively support medical institutions facing severe business environment in the midst of COVID-19, in
collaboration with administrative bodies and other organizations● Loan disbursement in 2021/9 substantially exceeded the plan (plan achievement rate of 143%)
Balance of loans to medical institutions aimed at building mainbank relationship (¥100 mn) / Yield (%)

1.57

1.57

Fiscal year planachievement
rate
143%

1.33

1.78

1.40

Interest on loans and discounts <to medical institutions aimed atbuilding main bank relationship> (¥100 mn)

1.39

374
285

260

2023/3(planned)

2024/3(planned)

1.9
268

95

2020/330

0.42021/32021/96 months

2021/3

3.7

2.9

0.2

2020/33.72021/92022/3(planned)

2023/3(planned)

2024/3(planned)● Expand loan balance by providing support to medical institutions facing
severe business environment in the midst of COVID-19, from the aspectof both cash flow and financial management, using Tokyo Metropolitan
Governmentʼs loan program for medical institutions and other facilities asappropriate.

Medical and Welfare Business Division
2021/9● Established in October 2002
Total balance● Headcount of 14● Provide diverse financial support
Approx. ¥120 bn
by leveraging the know-how
cultivated over the past 19 years
2020/9since the divisionʼs establishment Approx. ¥97.0 bn
as pioneer specializing in the(Incl. balance of loans aimed
at building main bankmedical field.
relationship)2022/3(planned)● Interest on loans and discounts on the rise due to steady growth in loanbalanceCommission income <from medical institutions aimed at building
main bank relationship> (¥100 mn)

1.8
0.7

2.0

1.0

0.9

0.0
2020/32021/32021/92022/3(planned)

2023/3(planned)

2024/3(planned)

6 months● As of Sep. 30, 2021, actual performance to full-year plan was firmly on
track

21

Business Strategy

Business Strategy (Corporate Customers / Equity andMezzanine Finance)

Tokyo Kiraboshi FG● Enhance equity, mezzanine and other high value added financing to customers at diverse life stages● 2021/9: significant increases in both the amounts of funds arranged and invested by Kiraboshi Capital Co., Ltd.
Kiraboshi Capital Co., Ltd.
Arranged(right)Changes in fund amounts (¥100 mn)

Funds administered by Kiraboshi Capital

10-fold growth in theamount of funds
arranged since
establishment in Sep.
2018

251

+80

Invested(left)

114
30

7 36

35

2019/32020/32021/3

1

Launched in
Buyout investment
Nov. 2018
Launched in Mar.
Yume Habataki Fund 1 (*)
Growth capital investment
2019
Launched in
Yume Yorisoi Fund 1
Mezzanine financeAug. 2020
Launched in
Engagement investing
Tokyo Sparkle
Nov. 2020
Launched in Mar.
A&KC Medical No. 1
Medical fund2021
Launched in
Equity investment
KCP Equity Assist No. 1
June 2021(minority)(*) Completed exit from QD Laser, Inc., the fundʼs first investment project,through its successful IPO (TSE Mothers market) in February 2021.
Yume Kagayaki Fund 1

331

+79

2021/9

Kiraboshi Capital Co., Ltd.

15%

Shareholding
ratio● Established in September 2018
● Headcount of 30● Established as a fully-owned subsidiary of Tokyo Kiraboshi
Financial Group, to expand the breadth of the Groupʼs
support through financial services using funds.
● Administer funds aligned to the different life stages, fromstart-up to growth and maturity phases. Provide solutions
to listed companies, entrepreneurs and other customers
gathered in the Tokyo area, aligned to their needs inbusiness management

Yume Kagayaki Fund 1

50%

KCP Equity Assist No. 1
Yume Yorisoi Fund 1

Yume Habataki
Fund 1
Startupphase

A&KC Medical No. 1

Growthphase

Maturityphase

Mainly SMEs

Decline
phase

Tokyo
SparkleOthers
Mainlyl listedldcompanies,p, etc.

22

Business Strategy

Business Strategy (Trust Business / Retail Customers)
Tokyo Kiraboshi FG● Provide services using trust functions to meet the diverse needs of customers; the second-largest trust asset balance among regional banks● In retail business, promote activities committed to customer-oriented approach, address the requirements also of small and medium-sizedbusiness owners with tailored responses
Changes in balance of major trust products (¥100 mn)

Fees and commissions from financial instruments (¥100 mn)

Real estate management trust“Con-trust”

421
176

268

141

124

68

2019/3 2020/3 2021/3 2021/9
Others

25

25

28

151

244

2019/3 2020/3 2021/3 2021/9
Launch of Kiraboshi Jinsei
Yorisoi Trust <100-year
passport>

28○ Support customers with 4functions“Receiving of pension benefits”“security and assurance” “payment
service” “thoughtful succession”

2019/3 2020/3 2021/3 2021/9

36

 Real estate management trust
 “Con-trust,” publicconstruction cost credit trust
 Longevity support trust(“Mamoriboshi") Collected money
administration trust (“pre-needfuneral trust”), etc.

752

2nd among
regional
banks

414
162
Bank A

Kiraboshi Bank

Bank B

159
Bank C● Expand product line-up and achieve solid growth ofoutstanding balance

89
Bank D

9920[2019/9,[2020/9,[2021/9,

2020/3]2021/3](2022/3)][2023/3][2024/3]

Investment trust balance <Kiraboshi Life Design Securities only>(¥100 mn)

1,716
1,003

Regional banks trust asset balance (¥100 mn) (as of March 2021)
Source: Trust Companies Associationof Japan

20

17

27

23

32

186
2020/9of which,fund wraps

191

426

2021/32021/9● Build a business model focused on outstanding balance andnot dependent on sales commission
Fees and commissions(Mainly trust fees)¥200 mn(2021/3)¥300 mn(2021/9)

Transactions with business owners
Apr.–Sep. 2021 Number of business owner customers with assets undermanagement: +924
Increase in outstanding balance +¥7.28 bn

23Business Strategy

Portfolio of Securities
Tokyo Kiraboshi FG● Portfolio diversification and diversified investment, steady accumulation of valuation gain on securities● From 2021/9 onward, build a profit structure that does not depend on gain on sale of securities
Securities balance (¥100 mn)

9,491
2,443
270

8,896

10,204

Interest and dividends on securities (¥100 mn)

10,211

136

4,135

296

419

477

Corporate bonds

3,411

3,155

2,927

Municipal bonds

653
2,074

653
2,017

Government bonds

2,537

594
1,808

2020/32020/92021/32021/9

3,700
539

Stock

181
138
102
47
(11)
2020/343
72
65
2020/9

216

121

62
54

2020/32021/32021/96 months

Available-forsale securities

52

57

2021/302021/92023/3(planned)

Bonds

Held-tomaturity bonds

2024/3(planned)

Profit structure that does not depend on
gain on sale of securities
Gain from proprietary trading, etc. asincome buffer

Stocks118

2022/3(planned)

Gain on sale of securities (¥100 mn)

61

100

123

59

Valuation gain/loss on securities (¥100 mn)

300

120

Other securities

3,901

2,785

134

125

2
2020/32021/32021/91212122022/3(planned)

2023/3(planned)

2024/3(planned)

24

Optimization of Management Resources and Improvement of Management Efficiency

Improvement of Management Efficiency
Tokyo Kiraboshi FG● Improvement of personnel efficiency and optimal allocation of management resources to enhance productivity● Reorganization of branch functions progressing as planned, with its effects materializing from the next fiscal
year, leading to substantial decrease in merger cost
Expenses (¥100 million)
258
21

264
24

104

109

131

130

2020/92021/9Headcount
2,888

257

Taxes

22

Nonpersonnel
expenses117

Personnel
expenses

116

2,767

2,753
2,526

2020/32021/92021/32021/92024/3(planned)● Streamline costs and personnel expenses in particular
Reduction in the number of offices

Merger and systems integration costs (¥100 mn)

2020/3 2021/3 2021/9 2022/3 2023/3 2024/3
Offices for corporate
and retail customers

104

89

75

46

46

46

Retail-focused branches

14

20

32

56

44

34

Offices specializing in
corporate customers

3

2

3

3

6

8

Sub-total (1)

121

111

110

105

96

88

Staffed sub-branches
and offices (2)

13

12

11

11

20

28

Total of (1) + (2)

134

123

121

116

116

116

● Apr.–Sep. 2021 completed 2 BIB offices● Effects of branch elimination/consolidation to materialize
from FY2022

42
26

4
2020/32021/32021/966

62022/32023/32024/3(planned) (planned) (planned)● Merger cost to decrease significantly from 2022/3● Only depreciation costs to be incurred from 2022/3

25

Optimization of Management Resources and Improvement of Management Efficiency

Capital Policy

Tokyo Kiraboshi FG● Perform a well-balanced capital management to ensure soundness and efficiency of capital and maintainappropriate return of profits to shareholders
Accumulation of equity capital

Enhance quality ofcapitalCapital ratio

Secure financial strength to be able to make lump sum repayment ofpreferred sharesin the 8% range

Maintain financial soundness while accumulating internal reserves andrisk assets

Improve profit level by strengthening financing functions through risk taking

RORA 0.5%

Capital ratio x ROE (profit/risk-weighted assets)
Strategic investment

Improve capitalefficiency

ROE

Improve Group income based on RAF

Approx. 6%

Improve profit level using assets from risk taking activities

Shareholder return in line with profit and net asset levels
Appropriate return ofprofits to shareholders

Dividend in principle Share buy-backs where necessary

Changes in dividend per share (yen) and total shareholder return ratio

46.5%

60

60

60

30
30

30
30

30
30

FY2019actualTotal
shareholder
return ratio

Maintain balance between capitalratio and ROE, and secure
appropriate return commensuratewith risks taken

Fiscal yearend dividendInterimdividend

Examine appropriate return of profitsand dividend level by taking into
consideration future profit level andtotal shareholder return ratio

20%~30%24.5%

FY2020
FY2021
actual projected

Total shareholder
return ratio
20%~30%

Increase return rate that can respond to shareholder expectations

30〜
30〜
FY2023projected

Changes in management indicators (%)
Capital ratio

8.6

8.7

8.3

8.6

8.3

3.0

3.2

5.0

0.1 0.2

0.4

0.5

ROE

2.6
RORA

0.2

2020/31.3

2021/32021/9

8.3
5.9

0.4

2022/3 2023/3 2024/3(planned) (planned) (planned)

26

Optimization of Management Resources and Improvement of Management Efficiency

Sustainability Initiatives

Tokyo Kiraboshi FG● Engage in Group-wide efforts to address local community issues based on sustainability policy developed in
December 2021
The Groupʼs initiatives

2019.52021.2

Structure chart

2021.12

Board of Directors
Management Meeting“Sustainability Policy”“Environmental Policy”
Support for TCFD
recommendations

Consider the targets basedon each policy, manage
PDCA of the tasks

Business Strategy Division
Sustainability Promotion Office

Discuss and examine overallsustainability promotion
program across theorganization

Across Group companies“Tokyo Kiraboshi Financial Group SDG Declaration”
formulated

Sustainability Promotion PT

Initiatives in CO2 reduction

Track record of environment-related investments and loans(As of Sep. 30, 2021)

Renewable energy-related loans (solar
power generation, biomass power
generation, wind turbine generators)

71

Sustainability linked loans

1

Positive impact finance1

Trust beneficiary rights relating to solar
power generation

1

Green Bonds (*)

5

Green Finance (trust beneficiary rights)

1

Renewable energy fund5(*) Separately made 2 additional investments in October 2021

Power usage(thousand kWh)

CO2 emissions(t-CO2)

Reduction rate (%)

CO2 emissions reduction target

46% reduction by 2030
compared with FY2013

FY2013

FY2018FY2019FY202027

Concept of Digital-based Platform

Digital Bank BusinessTokyo Kiraboshi FG● Initially specializing in deposit and foreign exchange functions, aim is to realize improvement of customer
convenience and low cost acquisition of deposits
Business model of digital bank (UI Bank)
１. Acquisition of new customers who previously were out of reach
２．Kiraboshi Bank to specialize in high value-added face-to-face consulting services (non-face-to-face state-of-the-art
services even to existing customers)
３. Reciprocal customer transfer for Group-wide maximization of income opportunity<Reciprocal customer transfer cycle between the digital bank and Kiraboshi Bank>Tokyo Kiraboshi Financial Group

Scheduled tocommence
operation during
FY202128

Concept of Digital-based Platform

Digital Strategy of Kiraboshi Tech, Inc.

Tokyo Kiraboshi FG● Release of digital wallet app “LaLaQ” on Nov. 24, 2021, digital payment̶expansion of new platform
Aims of digital payment through “LaLaQ”
１. Expand users by reducing user fee (top up fromMaekyu to LaLaPay free of charge)
２. Increase Maekyu user companies by improving userconvenience
３. Deploy data utilization business such as use of
attendance data with various purchase data

Business development being pursued● Expand platform by reaching out to new customers andcombining it with channel expansion through collaboration
with other regional financial institutions● In addition, use data for services such as small loan programusing a new credit scoring model and new services that can belinked to human resource value and appraisal, aiming todevelop a platform that connects “companies” and “workers”
Company

Services of Kiraboshi Tech
Top up withcash using ATM

LaLaQPayments tofriends throughmoney transfer
between
LaLaPay apps

(free of charge)

WorkerMaekyuLaLaPayServices of
Kiraboshi Bank

Direct payment atstores using QR
code or bar code

Top up to otherpayment apps

Top up from Maekyu
to LaLaPay(free of charge)
Cash transfer intouserʼs account(subject to prescribedtransfer fee)

Cash withdrawal
from ATM

November 24, 2021

“LaLaQ” app information anddownload from here

Launch of “LaLaQ” app(Fee of ¥220 pertransaction, tax
included)29

Concept of Digital-based Platform

Further Promotion of Partnership with External
Organizations
Tokyo Metropolitan Government and relatedorganizations
Comprehensive collaborationagreement relating to industrial
development in Tokyo

Local public bodies, related organizations, etc.

Kanagawa Institute of Industrial
Science and Technology

Tokyo Metropolitan Government

Yokohama Industrial Development
Corporation

General management support
Tokyo Metropolitan Small and Medium
Enterprise Support CenterTokyo Kiraboshi FG

Conclusion of “Basic Agreement on
Comprehensive Collaboration” with
Aoyama Gakuin University
Tokyo Kiraboshi Financial Group, Kiraboshi Bank andAoyama Gakuin University signed an agreement for
exchanging and utilizing personnel and intellectual
resources to cooperate with one another, throughindustry-academia collaboration, in areas such as
education and research for the purpose of contributing
to the development of society (concluded on Sep. 28,2021).

Kawasaki City

Support in employment andsecuring human resourcesTokyo Foundation for Employment
Services

Sagamihara City
Inagi City

Technical support
Tokyo Metropolitan Industrial
Technology Research InstituteCollaboration between industry andacademia

Support for work style reform,
securing human resourcesTokyo Metropolitan University

Tokyo Kanagawa Solution Connect(business alliance with Bank of
Yokohama)(Concluded on Aug. 26, 2021)

Tokyo Labor Bureau

Nihon University College of Art

Comprehensive collaborationagreement on support for SMEs

Chuo University

The Tokyo Chamber of Commerce andIndustry

Aoyama Gakuin University
Partner financial institutions, etc.
Sumitomo Mitsui Trust Bank

Mitsui Sumitomo Insurance

Senshu Ikeda Holdings
Senshu Ikeda BankSky Ocean Asset Management

Jimoto Holdings
Kirayaka Bank
Sendai Bank

Bank of Yokohama

Collaboration with private sector
corporations¥10 billion

Impact on
income(5-year cumulative, sum of thetwo banks)

30

Concept of Digital-based Platform

Example of Tokyo-based Platform

Tokyo Kiraboshi FG● Provide platform functions with Tokyo Kiraboshi FG working together as coordinator● Contribute to the development of local communities through digital collaboration with LaLaQ and UI Bank,
collaboration with administrative organs, matching startups with large corporations and other activities
Concrete example of Tokyobased ecosystem① Collaboration with administrative organs[Comprehensive collaboration with Tokyo Metropolitan
Government, Kawasaki City, etc.]

Image of Tokyo-based
ecosystem

Fusion of financial and non-financial services
Provision of financial services starting with non-financial services② Collaboration with Haneda Airport [agreement
concluded on April 20, 2021]
A. [Comprehensive collaboration with Haneda Future ResearchInstitute Incorporated]

Kiraboshi Consulting Co., Ltd.

Formation of CVC funds

Vitalization of airport
terminals

Ｂ. [Provision of Maekyu services to employees of Haneda Airportrelated facilities]③ CVC fund formation [structured on May 20, 2021]
Set up funds through collaboration with startups and large
corporations

Employees and users ofHaneda Airport

Large corporations

Marketing support throughaccumulation and analysis ofdigital data

Contribute to open innovation / regional
revitalization business by connecting
startups with large corporations*Arranged two funds in the first half of FY2021④ Grand opening of “KicSpace HANEDA” [Nov. 30, 2021]

Collaboration of LaLaPayand Haneda Airport
apps

Startups

LaLaQ
Digital BankEntertainment,
art, culture

Provide six functions with the aim of creating unicorn companies
expanding into the world
MedicalSportsSupport in solving social issues with
SDGs in mind

Contribute to regional vitalization
through promotion of sports

Administrative bodies(e.g. TMG, Kawasaki
City)

UI Bank
Scheduled to commence operation
during FY2021“LaLaQ” app
Launched in Nov. 2021

31

Figures in this document are calculated in units of a million yen, but are presented
in units of 100 million yen. The total amount therefore may not match the total foreach item.



Please note that some of the figures in this document are taken from preliminary
reports.

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

■ Please direct any comments orquestions about these briefing
materials or other IR topics to the IR
office at the right.

Tokyo Kiraboshi Financial Group, Inc.
Corporate Planning Division
TEL : 03-6447-5799
MAIL : ir@kiraboshibank.co.jp

32