Outline of the Medium-Term Business Plan
April 2021 - March 2024

April 28, 2021

Contents

Tokyo Kiraboshi FG

Quantitative Data Section

Introduction ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4〜6
1． Strengths and weaknesses of the Company ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4
2． Financial targets / Capital policy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4
3． Business strategy of the new Medium-Term Business Plan ・・・・・・・・・・・・・・・・・・・・・ 5
4． Reform of business structure and Group collaboration ・・・・・・・・・・・・・・・・・・・・・・・・・ 6
1． Numerical Targets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 7
8
2． Image of Income Growth over Three Years ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Strategy Section

1． Vision of the New Medium-Term Business Plan (FY2021-FY2023) ・・・・・・・・・・・・・・・・・・・ 10
2． Overall Flow of ESG/SDG-Related Strategy of the Medium-Term Business Plan ・・・・・・ 11
3． Branch Strategy / Changes in Productivity ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 12
4． Reform of Personnel System ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 13
5． Enhancement of Group Value Through Transformation of Resource Allocation ・・・・・・・ 14
6． Efficiency Improvement and Concentration of Management Resources・・・・・・・・・・・・・・・15
7． Digital Bank Business ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 16
8． Corporate Customer Strategy ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 17〜20

2Quantitative Data Section

Introduction
Tokyo Kiraboshi FG

1. Strengths and weaknesses of the Company

Internal
environment

Positive factors

Negative factors

Strength

Weakness

Collective strength of the Groupʼs related companies that can
respond to the diverse needs
Integration and merger processes completed ahead of schedule,
leading to efficiency improvements producing further
tangible effects in the coming period
Collaboration with administrative agencies and various otherexternal organizations

Quality of equity capital is an issue due to preferred stock
outstanding
Low productivity, high OHRFirst call exercise has taken hold but quality is an issue

Opportunity
External
environment

ThreatContinuation of negative interest rates
Entry of new players such as FinTech companies
Decrease in commission rates on assets under management

Fertile Tokyo market
Review of regulations on the scope of banking business
Creation of new businesses from ESG/SDGs initiatives

2. Financial targets / Capital policy① Financial targets (KGI)
FY2019 actual

FY2020 actual

FY2021 planned

FY2022 planned

FY 2023 planned

ROE <consolidated>

2.6%

1.3％

3.2％

5.0％

5.9%

Core OHR (note)

77.0%

75.7％

67.0％

59.8％

57.3%

Profit attributable to owners of parent￥7.6 bn￥4.1 bn￥10.0 bn

￥16.0 bn

￥20.0 bn

Profit from customer business￥0.9 bn￥1.4 bn￥12.4 bn

￥20.5 bn

￥23.4 bn

Subsidiariesʼ contribution to consolidated
profit <consolidated>￥1.1 bn￥0.3 bn(￥0.4 bn)￥0.4 bn￥2.3 bn

8.6%

8.7％

8.6％

8.3％

8.3%

<Kiraboshi Bank non-consolidated><consolidated><Kiraboshi Bank non-consolidated>

Capital ratio <consolidated>(Note) Core OHR: Expenses / Gross core business profit② Capital policy〇 Secure sufficient equity capital to fulfill the function to help smooth financing, seek to improve profitability and capitalefficiency, and secure financial strength to allow lump sum redemption of preferred shares

4Tokyo Kiraboshi FG

3. Business strategy of the new Medium-Term Business Plan
〇 “First call” exercise set out in the previous Medium-Term Business Plan has taken hold. The new Medium-TermBusiness Plan seeks to strengthen proposal capabilities based on “first call” approach.
Be a Tokyo-based platform owner and drive reform
FY2018 ~FY2021 ~3 years

New Medium-Term Business Plan

Previous Medium-Term Business Plan “Start-up ☆Kiraboshi”① Understand customers

Evolution of first calls and enhancement of problem-solving approaches

Understanding ofcustomersʼ life plan
(individuals)

Basic strategy
Consulting business・ Proposals to support
customersʼ mainstay
operations
・ Life plan support proposals

Financing based on
business feasibility
evaluations
・ Problem-solving proposals
based on business feasibility
evaluations③ Increase first callcontacts② Deliver proposals tocustomers

Understanding ofbusiness feasibility(corporates,
business owners)

Headquarters
support ofsales offices

Construct structure to provide comprehensive
financial services as a unified Group● Kiraboshi Consulting (Apr. 2017)● Kiraboshi Tech (Nov. 2017)● Kiraboshi Capital (Sep. 2018)● Kiraboshi Vietnam (Jun. 2019)

Be a Tokyo-based platform owner and drive reform<Reform of management base>● Digital transformation (DX)
Fusion of face-to-face and non-face-to-face, financial
and non-financial services● Improvement of headquarters efficiency andenhancement of headquarters sales activities● Radical branch reorganization and strategic personnel
allocation● Human resources development and personnel system
reform<Reform of business structure>● Kiraboshi Life Design Securities (Aug. 2020) ● Digital Bank Preparatory Company (Oct. 2020)① Kiraboshi that supports the older generation② Provision of medium risk-taking and equity financing③ Demonstration of Group synergy effects

Group business strategy① Life plan support
business② Digital Bank
business

Business tools for older adults

Cross-industrial collaboration
to respond to diverse life
scenes

FY2023

3 years➂ Start-up support
business
Support from early stage to
IPO

Act ascoordinator /provide hub
functions

Create customer
value
Createcustomersʼ social
value

Examples of platform functions④ Business succession
business

Unified support covering corporate
management, business succession,
asset management and overseas
business development⑤ Medical institutions
support businessContribution to sustained
growth of community healthcare services⑥ Corporate
reconstruction(management support)

business

Management support package

5Tokyo Kiraboshi FG

4. Reform of business structure and Group-wide collaboration(Construction of sustainable growth model unique to Tokyo Kiraboshi FG in the Tokyo
metropolitan area)
Strategy① Reform ofbusiness
structure andGroup-wide
collaboration forsolving social
issuesDo whatIndividuals

Promotion of DX

Corporates

Establishment of
Digital Bank,
improvement ofcustomerconvenience
Fusion of face-toface and non-faceto-face services

Solving social
issues② Reform of management base andresource allocation

Fusion of financial
and non-financial
services

Kiraboshi that supports the older generation
Exercising FD in collaboration with KLD Securities
Support of life plan in line with life cycle

Individual internet users:
68,000 → 400,000
Effects of branch office efficiency
improvements:
Over ¥1 bn, reduction of 18 offices

Enhancement of problem solving capabilities to contribute toimprovement of customer value
Consolidation of branches for corporate customers andproductivity improvement, enhancement of headquarters sales
activities
Promotion of main bank relationship, provision of equity
financing, fusion of financial and non-financial services

Customers with annual turnoverin the ¥0.3 bn to ¥10 bn zone
Number of loan customers with mainbank relationship: + 600
Balance of loans to customers with mainbank relationship: + ¥600 bn

Support of customers in social value creation
Platforms:① Business tools for the older generation (Kiraboshi package)② Corporate management, business succession, asset
management and overseas strategy combined③ Support for medical institutions
Further improvement of branch office and headquarters
efficiency to free up personnel
Work style transformation, productivity improvement throughDX
Optimal resource allocation for the Group as a whole③ Human resources development
and reform of personnel system

FY2023 KPIs

① Used by 60,000 customers② Over 1,000 companies

Increases in the number of businessowner customers with assets undermanagement and the outstandingbalance:+ 1,000 customers, + ¥50 bn③ Over 400 institutions

Productivity improvements:
Increase gross core business profit perhead to 140%
¥23 mn →¥32 mn

Development of professionals
Use of external talents:
Support for realization of diverse work styles

Increase in mid-career hires

61. Numerical Targets
Tokyo Kiraboshi FG〇 Plan to secure core business income of ¥34.7 bn and consolidated profit of ¥20.0 bn in FY2023 through enhancement of commission income aswell as improvement of cost efficiency〇 FY2024 target set at consolidated profit of ¥22.4 bn, ROE of 6.3% or higher, capital ratio of 8.3% or higher, and core OHR of 56% or lower

Plan period

Net core business income

31.2 bn

40.0 bn
30.0 bn

15.5 bn

20.0 bn

16.7 bn

34.7 bn

36.1 bn

24.5 bn

10.0 bn
Profit attributable to owners of parent (consolidated)

16.0 bn

20.0 bn
15.0 bn
10.0 bn

7.6 bn5.0 bn20.0 bn

22.4 bn

10.0 bn
4.1 bnChanges in contribution of subsidiaries to consolidated
income4.0 bn3.0 bn2.0 bn1.0 bn16.0%

Rate of contribution toGroup consolidation

14.6%
Net income

11.5%
7.3%

1.1 bn0.3 bnFY2019
Capital ratio

2.5%

2.3 bn

3.6 bn(0.4 bn)

0.4 bnFY2020

FY2021

FY2022

FY2023

FY2024

8.6％

8.7%

8.6%

8.3%

8.3%

8.3%

ROE

2.6％

1.3％

3.2%

5.0%

5.9%

6.3%

Core OHR

77.0%

75.7%

67.0%

59.8%

57.3%

56.0%

7

2. Image of Income Growth over Three Years
Tokyo Kiraboshi FG〇 Strengthen commission income (+¥2.9 bn) through deeper engagement with customers in business succession, transactions with businessowners and other means. Carry out thorough cost reduction measures to cut down personnel, non-personnel and other expenses (+¥5.6 bn).
〇 Strengthen Group companiesʼ earning capacity to target ¥20.0 bn of profit attributable to owners of parent in the final year of the business
plan.

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＋172億円+¥17.2 bn

20.0 bn

Profit attributable to owners of parent

Profit attributable to owners of parent(4.1 bn)

FY2023＋2.8 bn Planʼ

経常利益（単体）の増加

Increase in income taxes

Increase in net core business income (non-consolidated) +¥18.0 bn
Increase in ordinary profit (non-consolidated)(0.4 bn)＋2.5 bn
Other factors(4.6 bn)＋1.7 bn

Increase incredit-related costs(1.3 bn)

Decrease in merger costs

Increase in income from financial
instruments

Profit attributable toowners of parent

Increase in interest on loans anddiscounts

4.1 bn＋0.9 bn
Increase in intereston securities

FY2020
ActualIncrease in commission income from
corporate customers＋9.9 bn

Decrease in personnel expenses＋2.2 bn＋0.7 bn

Decrease in non-personnel expenses＋3.2 bn

Decrease in gain onsale of securities＋2.4 bn

Other factors

Income fromretailcustomers

Income from
corporate
customers

Cost reduction
related+¥15.9 bn

8Strategy Section

1. Vision of the New Medium-Term Business Plan
(FY2021-FY2023)
Management
philosophy
Management
policyVision we areaiming forTokyo Kiraboshi FG

To be a financial group for small and medium-sized enterprise customers and individual customers in the Tokyo
metropolitan area that contributes to the development of local communities through comprehensive financial
services
A group that sparkles
Achieve enduring existence as a local
regional financial group through theprovision of unique financial services

A group that rises to the challenge

A group that brings together ideas

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

We put great value on the “thoughts” ofcustomers, the region, and our employees, andseek to develop a presence that is always inneed and worthy of trust.

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

New Medium-Term Business Plan

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

Be a Tokyo-based platform owner that creates new values
for customers~ 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 andemployees, accomplish the goals of contributing to society, seeking growth of theorganization, 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 “howit can be done”

An individual who is committed to results,
who continuously takes on courageous
challenges102. Overall Flow of ESG/SDG-Related Strategy of theMedium-Term Business Plan

(Medium-term business strategy as it relates to ESG/SDGs) = Realization of corporate philosophy

Tokyo Kiraboshi FG〇 The Company secures solid financial strength and enhances its competitive strength → serves to help customers achieve sustainablegrowth and contribute to the sustainable growth of local communities〇 Leverage the Groupʼs collective strength to push forward SDG initiatives in the three priority areas of “support for the older generation”,“integrated support for business succession, corporate management and asset management” and “management support for medical
institutions”.
〇 Contribute to the sustainable growth of society while enhancing financial and competitive strengths of the Company
Reform of management base to enhance customer convenience andefficiency

Creation of new customer value and social value

Enhancement of financial and competitive strengths to contribute to thesustainable growth of society

Contribution to the sustainable growth of society<Increased focus on SDG initiatives>
Strategy ①

Strategy ⑤
・ Livelihood support for the older
generation

・ Clarification of branchfunctions
Enhancement of proposal capabilities fordelivering high value-added face-to-faceservices through branch reorganization

Strategy ②・ Business process re-engineering(sales offices, headquarters, work style)Freeing up management resources
through improved efficiency of businessprocesses to provide high value-added
face-to-face services

Reallocation ofmanagement resources
freed up throughimproved efficiency tooptimum areas

Strategy ④

Enhancement offinancial andcompetitive strengths

・ Transformation of resource
allocation

・ Enhancement ofmanagement base

Personnel allocation for providing
high value-added face-to-faceservices

Continuous provision of highvalue-added services,enhancement of financial andcompetitive strengths tocontribute to the sustainablegrowth of society

Development of human resources and selffulfillment for the delivery of high valueadded face-to-face services

Strategy ⑥
・ Activities to address customersʼ
business succession and otherissuesBusiness succession
Corporate management
Asset management for business owners

Strategy ⑦

Strategy ③
・ Development of human resources/ self-fulfillment

Kiraboshi that supports the older generation
Solving life issues such as watching over andcaringProperty management using trust functions

Digital transformation (DX)
Establishment of Digital Bank, improvement of customer
convenience
Fusion of face-to-face and non-face-to-face services, fusion offinancial and non-financial services

・ Support for medical
institutions
Management support / business succession
Contribution to sustained growth ofcommunity health care services11

3. Branch Strategy / Changes in Productivity(Number of Sales Offices and Headcount)

Tokyo Kiraboshi FG〇 Improve customer convenience and rationalize number of offices through fusion of face-to-face and non-face-to-face services
Consolidate offices engaged in corporate transactions for concentration of management resources: increase loan balance per office and per head
〇 Expand points of contact with customers through specialized branches, strengthen consulting functions
Increase offices specializing in retail transactions and interact with customers: increase investment trust balance per office and per head

Loan amount per office/perhead

Loan amount per office (left axis)
denominator: the number of offices

50 bn
1.7
1.3
30 bn

31.1
FY2019actual1.4

35.8
FY2020actualInvestment trust balance
per office and per person

2.0 bn1.0 bn1.7

39.1

FY2021planned

45.5

51.0

FY2022plannedFY2019actual2.3
FY2020actual14（10％）

Offices for corporate
and retail customers

Investment trust balance per office (left axis)
denominator: the number of offices

Retail-focused offices

Investment trust balance per person (right axis)
denominator: the number of consultants

1.0 bn

0.6

0.4

2.6

FY2021planned134 offices13
3 （9％）FY2023planned

0.7

1.5

1.5 bnMarch 31, 2020

104 offices
（77％）

0.8

0.5

2.0 bn1.5

4.0 bn3.0 bnChanges in the number of sales offices

Loan amount per person (right axis)
denominator: the total number of bank employees

3.4

FY2022planned4.3

0.5 bnMarch 31, 2024

28（24％）46 offices
8

FY2023planned

Offices specializing in
corporate customers
Staffed sub-branches
and offices

116 offices

（39％）

34
（29％）

12

4. Personnel System Reform ~ Development of Expertise andRealization of Diverse Work Styles ~Reform of personnel system
Shifting from treatment based on “the individual”
and “position” to one commensurate with “role”
and “job”
Realization of compensation aligned to performanceand contribution
Realization of diverse work styles

Tokyo Kiraboshi FG

Productivity improvement andpersonnel optimization
KPI

140% improvement in productivity(note)

Increased efficiency of operations and reallocationof personnel to strategic areas(Note) Productivity: gross core business profit per head

Key points of personnel system reform① Structure organized by desired careerpath

・ Categorized into professionals, management and staff (to be decided by theCompany based on an individualʼs desire)・ Shift from ability-based grading to role-based pay scheme (grade is reviewed everyyear)② Compensation level aligned to job
roles

・ Compensation level determined in line with newly assigned role・ Yearly grade review in line with the role (which could lead to a reversal of annualcompensation level between corporate-focused and retail-focused branch offices)③ Expansion of incentives

・ Expansion of incentives through bonus payments
・ Expansion of incentives to individuals at the age of 55 and beyond (including older
employees)④ Revision of evaluation system

・ Raising evaluation perspectives (increase in per head income)・ Clear decoupling of performance evaluation and job value (posting)⑤ Measures to accommodate extensionof employment to the age of 70

・ Revision of the compensation structure for people reaching the age of 55 andbeyond, extension of employment at age 65 and beyond (including employment inrelated companies)
・ Expansion of secondment opportunities (use of human resources)

135. Enhancement of Group Value Through Transformationof Resource Allocation
Tokyo Kiraboshi FG

Number of
offices

Personnel
expenses

Headcount〇 Create time for “offensive actions” through business process re-engineering, branch reorganization and review of branch
operation. Reallocate freed-up personnel to sales and strategic areas〇 Concentrate routine tasks and administrative work requiring expertise in a strategic support function department〇 Maximize Group synergies jointly with all Group companies through reform of personnel system and strategic allocation (transfer)of personnel to Group companies, etc.

FY2019FY2023 planned

Changes(A)(B)(B)－(A)
Improvement of
headquarters efficiency

2,888

2,526

(362)

12% down(Number of people retiring at retirement age and leaving mid-career in
2020/3 - 2023/3: (502); number of transferees, etc.: (227))(Number of new hires in 2020/3 - 2023/3: 367)

￥26.1 bn

134 offices￥21.8 bn

116 offices

Sales offices(150) *

(209) *

Transfers, etc.

Concentration of routine
tasks

(62)

+59

* Number of sales personnel, including those in headquarters sales, is increasing(¥4.3 bn)
16% down(18 offices)
13% down

Corporate and retail branches,
specialized branches forcorporate customers: (53)Retail-focused branches: +20
Sub-branches, offices: +15

14

6. Efficiency Improvement and Concentration ofManagement ResourcesTokyo Kiraboshi FG〇 Improve customer convenience through digitalization, concentrate freed-up management resources on face-to-face sales and consulting
functions〇 Provide the functions of a Tokyo-based platform owner collectively as a Group. Act as local community coordinator in collaboration withdifferent industries and administrative organizations〇 Tokyo-based platform is an open platform that allows collaboration with nationwide regional banks, and offers various sub-platforms fordifferent functions
Improvement of management resource efficiency
Concentration of management resources
Young adult segment ~ older adult segment

SME business owners, affluent segment, older adultsegment, inheritors

Strategy

Improved convenience through digitalization of financial
business
Differentiation through non-financial services
Fusion of financial and non-financial services

Life plan consulting with goal-based approach
Fusion of face-to-face and non-face-to-face, financial andnon-financial services
Building main bank relationship in transactions withindividual customers

Results

Effects of improved efficiency: Branches ¥0.5 bn reduction
Effects of improved efficiency: Personnel ¥0.5 bn reduction

Net increase in investment trust per head
¥10 bn: 10 people, ¥0.5 bn: 150 people
Trust fees from investment trust balance outstanding:¥1 bn → ¥2 bn (sum of KLD)

Digitalization
Group functions (DB, FinTech, Bank)

People in charge of retail customers, people in charge ofolder customers, enhancement of asset consultation
Group functions (DB, KLD, Bank)

Individuals

Customer segment

Responsible party
Delivery of platformfunctionsLife plan support business

Customers of standard loans

Customers with main bank relationship, customers ofbusiness succession services, medical institutions,customers of start-up support

Strategy

Establishment of specialized division within theheadquarters
Loan application ~ Execution - On-line monitoring

Enhancement of face-to-face consulting: the Group tocollectively provide mezzanine and equity finance, trust
functions and other services

Results

Effects of improved efficiency:
Workforce ¥0.1 bn reduction ~Interest income (new initiatives in 2021-2023):
approx. ¥8 bn
Income from fees and commission (new initiatives in 20212023): approx. ¥2 bn

Group-wide collaboration
Use of older employees (real estate PJ, concentration ofsmall accounts to headquarters)

Corporate-focused branches, headquarters sales operation
Group functions (consulting, capital, leasing, KLD, Bank)

Customer segment

Corporates

Digital Bank businessResponsible party
Delivery of platformfunctions

Digital Bank businessBusiness succession, support for medical institutions, support
in corporate restructuring, start-up support

15

7. Digital Bank Business:
Features and Business Concept① Reduce initial investment and development period to the minimum to minimize costs and respond with speed
Build infrastructure based on cloud banking system of SBJ*
* Shinhan Bank Japan: subsidiary in Japan of Shinhan Financial Group which has at its core Shinhan Bank, a leading bank in Korea.
② Initially specialize in deposit and foreign exchange functions, lending out all investment operations to other banks within theGroup
From the second year onward, collaborate on API with Kiraboshi Techʼs wallet and other services to develop lending functions etc.;
build platforms by leveraging the Groupʼs collective strength and collaboration with external parties➂ Seek improved convenience for existing customers of Kiraboshi Bank (option for existing customers to switch to Digital
Bank)[Overview of services to be provided]
Expansion of
procurement

Step 1

Interest income

Main
Base in Tokyo
metropolitan
area,
Kiraboshi
Bank, existingcustomers,
employees ofbusiness
partners② High completion rateusing PCs andsmartphones

Account opening, use

e-kyc

UI/UX

Step 1④ Preferential
charges

Between Kiraboshi
Bank accounts - freeof charge, to otherbanks - under review① Interest level thatmeets asset
management needs

TargetNationwide
scale,
customers ofalliance
partners,
asset building
segment

Moneytransfercharges

Securing profit

Convenience
Seven Bankʼs ATM
fees [under review]ATM
withdrawal(Number of accounts in 3 years: approx. 400,000]
Electronic payment service provider(budgeting apps, etc.)

OPEN
API

High
interestrate

QR Pay (LINE Pay etc.)

Cashless

Main
AccountTimedeposit

Kiraboshi
Group

Expansion of cross selling

Securities

LIFE Platform

Card

LIFE Platform
Credit loan

③ Affiliated services
offering high level ofconvenience

Tech (Maekyu,
LaLaPay)

Other
companies

WalletSBJ

Step 3 andongoing

Sports lottery etc.

Entertainment
content

Pocketloan

Experience* Launch account acquisition
marketing activities atcommencement of operations

Step 1 & 2High value added to accounts, improved convenience

Core value

Kiraboshi Bank

Individual internet users:
68,000 customers → 400,000 customers

KPI

Customer acquisition

Expansion of connected
infrastructure services[Features]Tokyo Kiraboshi FG

Assetmanagement

Foreign currency
exchange

Asset building, promotion of sound consumption

Step 2 & 3
Platform connection

16

8-1. Corporate Customer Strategy
Tokyo Kiraboshi FG〇 Leverage the collective strength of the Group to enhance problem-solving capabilities aligned to the changes in social structure,and contribute to creation of customer value and to solving social issues[Provide hub functions as a platform owner]
Tokyo Kiraboshi FG
Financing (senior, mezzanine, equity)

Customer(manufacturing)

Customer(logistics)

Cross-industry
collaboration

Customer(distribution)〇 Examples of platform to respond to customerʼs management issues:
Support for business start-up, business succession, support for corporate
restructuring, support for medical institutions〇 Coordinate value chain and contribute to creation of customerʼs new
businesses

Matching with “customerʼs customer”
Collaboration with other companies and other industries

Number of corporate borrowers,
loan amount

KPI
Business investment (equity etc.),
personnel dispatch,developing into compoundtransactions

Number of business establishments inTokyo and Kanagawa
908,000 (Note 1)
Of which, annual sales of ¥0.3 ¥10 bn
70,000 (Note 2)
Of which, loan customers
11,000 customers,
16% share(compared toMarch 31, 2020)○ In the ¥0.3-¥10 bn annual sales zone
Number of loan customers with main bankrelationship: + 600
Lending to customers with main bankrelationship: +¥600 bn○ Collaboration with over 1,000 customers inbusiness successionin 3 years○ Collaboration with over 400 customers inmedical transactions(Notes 1, 2) Teikoku Databank survey

17

8-2. Corporate Customer Strategy: Business Financing(Structured and mezzanine financing such as LBO loans, non-recourse loans and mezzanine loans)

Tokyo Kiraboshi FG〇 Enhance problem-solving capabilities to address customersʼ diverse challenges, establish a specialized structured finance teamwithin SF Division〇 Strengthen due diligence and screening/risk management structures for speedy deal processing

Collaboration between sales offices and
SF Division
 Reduce sales officesʼ burden on referrals from sales offices
 Centralize contact point for negotiations on terms andconditions, etc., in SF Division Project members to identify and examine issues associatedwith a deal Officers to take part from an early stage and decide thedirection to follow

Collaboration among Group companies

6,000

4,000

Non-recourse loans

1.84

2,000

Risk management system(¥100 mn)

1.87

(％)

1.91
2.00
5,318

4,011
1.52

1.51

3,089
2,613

0

697
215

1,532
815

1.00

2,342

1,515

472

587

868
230

FY2019actualFY2020(forecast)

FY2021planned

1,239

1,599

430

630

FY2022plannedFY2023planned

0.00

Interest on loans / commission income
119.0

120
Interest on loans

91.9

Commission income
80

89.4

60.4

62.3
40

Human resources development
 Enhance expertise by bringing in outside talents
 Develop professionals with competitive edge

LBO finance, etc.
Mezzanine finance Industry and market surveys conducted in collaboration with
Kiraboshi Consulting
 Mezzanine finance structured in collaboration with Kiraboshi
Capital Establish the guidelines (such as for handling LBO finance)
 Establish a dedicated structured finance screening team (3 to4 people) Set up a system for ongoing monitoring of covenants, budget
control, etc.
 Designate a responsible department (SF Division) to perform
integrated risk management

Business loan balance / Yield(¥100 mn)

0

20.7

29.2

38.2

10.6
10.1

14.2
15.0

22.2

29.6

29.6

FY2019actualFY2020(forecast)

FY2021plannedFY2022plannedFY2023planned18

8-3． Group Collaboration Including Equity Financing
Tokyo Kiraboshi FG〇 Kiraboshi Bank, Kiraboshi Consulting and Kiraboshi Capital collaborating to provide support at diverse stages, from start-up to
growth phase and to maturity phase

Investment track record
33 investments / ¥4.18 billion

Tokyo Kiraboshi FG
Kiraboshi Bank

Buyout investment
Yume Kagayaki Fund 1(Nov. 2018)

Kiraboshi Capital
Kiraboshi Consulting

Mezzanine financeYume Yorisoi Fund 1(Aug. 2020)Engagement investing
Medical Fund

Growth capital investment
Yume Habataki Fund 1(Mar. 2019)

Venture investment

Fund connecting
large corporations
with start-up firms

Tokyo Sparkle(Nov. 2020)

Mezzanine
EquityA&KC Medical No. 1(Scheduled to be launched
in July 2021)

ToKI Meki Oen Fund 1(Oct. 2017)

Stage

Start-up phase

Collaboration withexternal funds
Over 80 LP investees

Maturity phase

Growth phase

Kiraboshi Consulting
Headcount ofapprox. 75

Kiraboshi BankSF Division
headcount:
35

MF Division
headcount:
25

Mezzanine
LBO loan

19

8-4.

Tokyo-based Platform
Tokyo Kiraboshi FG〇 Build a “Tokyo-based platform” for creating new values through collaboration with administrative organs and across industries (airports
and other social infrastructure, companies in entertainment, art, sports and other similar industries)〇 Be a coordinator connecting customers with companies in other industries, provide hub functions and contribute to the creation ofcustomer values and to solving social issues

Kiraboshi platform, concrete example of Tokyo-based ecosystem: Tokyo Kiraboshi FG acting as coordinator to provide
platform functions
Image of Tokyo-based
ecosystem

Concrete example ofTokyo-based ecosystem① Collaboration with administrative organs[Comprehensive collaboration with Tokyo Metropolitan
Government, Kawasaki City, etc.]
Mutual collaboration in implementation of initiatives for industrial
development, including support for SMEs, with the aim of achieving
sustained development of regional economies
Collaboration in infrastructure and financial areas in pursuit of theInternational Financial Center concept② Collaboration with Haneda Airport
A. [Comprehensive collaboration with Haneda Future
Research Institute Incorporated]
Development of local economies around Haneda Airport and promotion ofculture and arts
Matters related to initiatives aimed at achieving the SDGs
Digitalization of services to Haneda Airport users, etc.
Scheduled to separately conclude basic business alliance agreement withHaneda Future Research Institute→ customer marketing, development of new business domains, etc.

Ｂ. [Provision of Maekyu services to Haneda Airport facility
employees]
Use of “Maekyu” services and trial implementation for the use of LaLaPayin airport facilities

Fusion of financial and non-financial services
Provision of financial services starting with non-financial services

Kiraboshi Consulting Co., Ltd.
Formation of CVC fund

Linking LaLaPay with Haneda Airport apps
Vitalization of airport terminals

Employees and users ofHaneda Airport

Large corporations
Contribute to open innovation /regional revitalization business byconnecting startups with large
corporations
Startups

Marketing support throughaccumulation and analysis ofdigital data

LaLaPay*
Digital Bank

MedicalSportsSupport in solving social issues with
SDGs in mind

Contribute to regional vitalization
through promotion of sports③ CVC funds formation
Create funds through collaboration with startups and large corporations

Entertainment,
art, culture

Administration(Tokyo, Kawasaki, etc.)* LaLaPay: Name of digital money
functions, etc., provided by
Kiraboshi Tech, Inc.

20