Tokyo TY Financial Group
Results Briefing for
the First Half of the Fiscal Year Ending March 31, 2018

December 7, 2017
(TSE1 Listed Code: 7173)

Contents
Overview of the Group

Future business strategy

Company profile

3

Profile of subsidiaries

4

Outline of merger

5Management philosophy, management policy, overall strategy

6

Summary of business results and profit plan

Kiraboshi Bank’s course of action

20

Kiraboshi Bank’s target customer group

21

Synergistic effects from merger and merger consolidation costs

22

Strategic branch policy and optimization of personnel allocation

23

Strategic branch policy that recognizes the special features of the region

24

Summary of business results for the first half of the fiscal year ending
March 31, 2018 (1) [Tokyo TYFG, consolidated]

8

25

Summary of business results for the first half of the fiscal year ending
March 31, 2018 (2) [Three-bank total/individual banks]

Problem-solving and mainstay operations support for SMEs based on
evaluations of business feasibility

926Plan for the fiscal year ending March 31, 2018

Strengthening of consulting functions-Improving profitability-

10
Strengthening partnership promotions

27

Interest income

11
Initiatives to support start-ups

29

Yields12

Working to make Kiraboshi Bank the natural partner for start-ups within three years

Loans

13

Initiatives to support the medical sector and overseas expansion

30

Deposits

14

FinTech initiatives “Maekyu”-Rising to the challenge of new business domains-

31

Securities

15

Assets under management

16

Problem assets subject to disclosure under the Financial Reconstruction Law
and credit-related costs

17

Capital ratio/Core OHR/ROE

18

CSR initiatives
CSR initiatives

34

2

Company profile■ Major Group companies■ Management philosophy

To be a financial group for small and medium-sizedenterprise customers and individual customers in the Tokyo
metropolitan area that will contribute to the developmentof local communities through comprehensive financial
services
Yachiyo BankTokyo Tomin Bank

ShinGinko Tokyo

Kiraboshi Consulting■ Management policy■ Company history
December 1924

Founded The Yachiyo Bank, Limited

December 1951

Established The Tokyo Tomin Bank, Limited

April 2004

October 2014

Established ShinGinko Tokyo, Limited

Business integration by The Tokyo Tomin Bank, Limited and The Yachiyo Bank, Limited
Established Tokyo TY Financial Group, Inc.

September 2015

Final agreement regarding business integration between Tokyo TY Financial Group, Inc.
and ShinGinko Tokyo, Limited
Signed the Agreement on a Comprehensive Affiliation for Industrial Development inTokyo with the Tokyo metropolitan government

December 2015

Resolved to proceed with concrete reviews and preparations for a three-bank merger
by The Tokyo Tomin Bank, Limited, The Yachiyo Bank, Limited, and ShinGinko Tokyo,
Limited around FY2017

April 2016

Business integration between Tokyo TY Financial Group, Inc., and ShinGinko Tokyo,
LimitedAugust 2016

Conditional upon obtaining approval from the relevant authorities, it was resolved ata meeting of the board of directors that there would be a merger between the threebanks on May 1, 2018, in addition to which announcements were made concerning
future business policies and overall strategy.

April 2017
November 2017

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

A bank that sparkles
Achieve enduring existence as a local regional bank through theprovision of unique financial services
A bank that rises to the challenge
Leverage the special features of the Tokyo area to continue to meet
new challenges in order to contribute to the development of ourcustomers and of local economies
A bank that brings together ideas
We put great value on the “ideas” of customers, the region, and our
employees so as to become a necessary and always trusted presence■ Vision aimed for

Become the urban regional bank group most favoredby customers in the Tokyo metropolitan area
3

Profile of subsidiaries■ Profile of subsidiaries

As of September 30, 2017

Three-bank total

The Tokyo Tomin BankThe Yachiyo Bank

ShinGinko Tokyo

Establishment-

December 12, 1951

December 6, 1924
(founding date)

April 1, 2004*

Head office location-

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

5-9-2 Shinjuku,
Shinjuku-ku, Tokyo

1-21-1 Nishishinjuku,
Shinjuku-ku, Tokyo

Capital-55.6 billion yen

43.7 billion yen

20.0 billion yen

Total assets

5,590.5 billion yen

2,782.3 billion yen

2,349.3 billion yen

458.9 billion yen

Net assets

285.9 billion yen

110.0 billion yen

110.9 billion yen

64.9 billion yen

Number of employees

3,241

1,523

1,575

143

Number of branches(including sub-branches)

164

78

85

1

*The date upon which the Tokyo metropolitan government acquired all of the shares in BNP Paribas Private Bank Ltd. to establish ShinGinko Tokyo is the date upon which
ShinGinko Tokyo was established. It was established as a corporation on April 5, 1999.

4

Outline of merger
Bank after merger

Holding company

The origin of the bank’s name

The ideas we wanted to put into the logo mark and color

Constellation. Twinkling stars.
We want to make the dreams of our customers glitter even brighterin the Tokyo area.
Into this name we put our desire for something clean-cut that alsofeels easy to get to know, that takes the customers’ ideas into
safekeeping and uses them to bridge the way to the next generation.

Merger schedule

Effective date of merger
May 1, 2018

“Kiraboshi” is a design representing somebody facing forward and beginning to walk with head held
high, and represents our feeling of wanting to move forward with and contribute to the local
community, as a bank that rises to the challenge.
Expressing our desire to become a bank that places great value on the “ideas” of customers andemployees, and to become a gleaming presence in local communities, we used dark blue to symbolize“trustworthiness” and “sincerity,” while yellow represents “future promise” and “independence.”

Core systems to be consolidated
by the target date of FY2020○ At the point of merger on May 1, 2018

Tokyo Kiraboshi FG

ShinGinko Tokyo’s systems will be consolidated with those of Tokyo Tomin
Bank and the systems of Yachiyo Bank and Tokyo Tomin Bank will beconnected via a relay system.

○ Unification of core systems
Tokyo Tomin Bank

Yachiyo Bank

ShinGinko Tokyo• By the target date of FY2020, Yachiyo Bank systems to be consolidatedwith those of Tokyo Tomin Bank to unify core systems• Subsystems to be consolidated in turn5

Management philosophy, management policy, overall strategy
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 throughcomprehensive financial services
Achieve enduring existence as a local regional bank through the provision of uniquefinancial services

A bank that sparkles

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

A bank that rises tothe challenge

We put great value on the “ideas” of customers, the region, and our employees so as tobecome a necessary and always trusted presence.

A bank that brings
together ideas

1. Fulfill the function of a true financial intermediary
by using close relationships with customers toresolve problems and practice support of theirmainstay operations

3. Leverage the special features of the Tokyo area tostrengthen our functions and offer new value bybuilding broadly based networks, as well as
unearthing new business areas

2. Offer consulting functions by leveraging contact
with the broad customer base to which we haveaccess as a local regional bank to display
specialization within the overall group

4. Strengthen the management structure from a
medium- to long-term perspective

Overall
strategy6Summary of business results
and profit plan7

Summary of business results for the first half of the fiscal year ending
March 31, 2018 (1) [Tokyo TYFG, consolidated]■ Business performance (Tokyo TYFG Consolidated)(¥ billion)*Amounts of less than 100 million yen have been rounded down.

*Amounts of less than 100 million yen have been rounded down.

Tokyo TYFG (Consolidated)No.
1

Consolidated odinary income

23

Consolidated gross business profit
Consolidated gross core business profit

4

Net interest income

5

Net fees and commissions

6

Other business income

7

Expenses8

Credit-related costs

9

Gains on stocks and other securities

10

Profit on investments based on the equity
method11

Others12

Ordinary profit

13

Extraordinary profit

14■ Achievement rate (Tokyo TYFG Consolidated)(¥ billion)

Gain on bargain purchase*

2016/9
40.8
36.2
35.3
27.3
6.5
2.2
29.9
0.6
0.0

2017/9
42.2
35.9
35.6
27.2
7.2
1.3
30.6
(0.3)
1.9

Change
1.4
(0.2)
0.2

0.0

0.0

(0.0)

(0.7)
4.9
19.3
19.4
24.3
0.7
23.5

(1.8)
5.7
(0.0)
5.7
0.8
4.8

(1.1)
0.7
(19.3)(19.4)(18.5)
0.1(18.7)

(0.0)
0.6
(0.8)
0.6
(0.9)
1.9

15

Income before income taxes

16

Income taxes

17

Net income

18

Profit (loss) attributable to non-controllinginterests

0.0

0.0

(0.0)

19

Profit attributable to owners of parent

23.5

4.8

(18.7)

2017/9results

Initialplans

Vs. initialplans

Ordinary profit

5.7

3.0

+2.7

Profit attributable to ownersof parent

4.8

1.5

+3.3

Summary (1) Tokyo TYFG (Consolidated)○ Ordinary profit of ¥5.7 billion was posted, up ¥700 million year
on year, while profit attributable to owners of parent came to¥4.8 billion, a decrease of ¥18.7 billion year on year.
*Profit attributable to owners of parent of ¥23.5 billion for the first half of
FY2016 included a gain on bargain purchase of ¥19.4 billion arising fromthe business integration with ShinGinko Tokyo. (Profit attributable toowners of parent was ¥4.1 billion after excluding the gain on bargain
purchase (¥23.5 billion - ¥19.4 billion)).

○ Ordinary profit exceeded initial plans by ¥2.7 billion, while
profit attributable to owners of parent was higher by ¥3.3
billion.
*In the first half of FY2017, there was an increase in gain on sales of
securities and a decline in credit-related costs due to progress in reducing
expenses at consolidated subsidiaries and cutting strategic shareholdings,
in addition to which the implementation period for certain measures was
pushed back to the third quarter of FY2017 and beyond, leading to resultsthat significantly surpassed initial forecasts.

8

Summary of business results for the first half of the fiscal year ending
March 31, 2018 (2) [Three-bank total/individual banks](¥ billion)■ Business performance*Amounts of less than 100 million yen have been rounded down.

Three bank total

Tokyo Tomin Bank

(non-consolidated)No.
1

Ordinary income

2
3Gross business profit
Gross core business profit

4

Net interest income

5

Net fees and commissions

6

Other business income

71

Of which, gains (losses) on bonds, etc.

Yachiyo Bank

(non-consolidated)(non-consolidated)

ShinGinko Tokyo(non-consolidated)

2016/92017/9Change2016/92017/92016/92017/92016/92017/9

43.8
38.6
37.7
31.1
5.3
2.1

45.4
38.2
37.8
30.9
5.8
1.3

1.6
(0.3)
0.1
(0.1)
0.5
(0.8)

21.6
18.9
18.7
14.9
2.9
1.0

23.1
19.0
19.0
14.6
3.4
0.9

18.6
16.8
16.1
13.4
2.3
1.1

17.8
16.0
15.7
13.3
2.3
0.3

3.5
2.7
2.7
2.6
0.0
0.0

4.5
3.1
3.0
3.0
0.0
0.0

0.9

0.4

(0.5)

0.1

0.0

0.6

0.3

0.0

0.0

29.8
14.4
12.5
8.0

0.4
(0.3)
0.1
(0.3)

14.4
6.7
6.7
4.2

15.2
6.6
7.1
3.7

12.8
7.1
4.5
3.3

12.5
7.0
4.3
3.2

2.0
0.7
1.0
0.6

2.0
0.7
1.0
1.0

11

Net core business income

29.3
14.7
12.3
8.3

12

Transfer to reserve for general possible
loan losses

(0.6)

(0.5)

0.1

(0.1)

(0.0)

(0.4)

(0.4)

(0.0)

-

13

Net business income

14

Non-recurring profit (loss)

9.8
(2.1)
1.5
(0.2)
7.6
(0.0)
0.8
6.7

8.9
(0.2)
1.0
1.3
2.0
8.6
(0.0)
0.9
7.6

(0.9)
1.9
1.0
(0.2)
2.3
0.9
0.0
0.1
0.9

4.6
(0.7)
0.8
0.0
3.8
(0.0)
0.6
3.2

3.9
0.4
0.5
1.9
4.3
0.0
0.5
3.8

4.4
(1.3)
0.6
(0.3)
3.0
(0.0)
0.0
2.9

3.9
(1.2)
0.7
0.1
2.6
(0.0)
0.4
2.1

0.7
(0.0)
0.0
0.7
0.1
0.6

1.0
0.6
1.0
0.0
1.6
0.0
1.6

0.7

(0.2)

(0.9)

0.6

0.4

0.2

0.3

(0.2)

(1.0)

42.5
6.1
5.0

44.1
7.0
5.7

1.6
0.8
0.7

20.7
2.9
2.0

22.2
3.2
2.7

18.3
2.5
2.3

17.3
2.0
1.4

8

Expenses

9

Of which personnel expenses

10

Of which non-personnel expenses

15

Of which, reversal of allowance for loan losses

16

Of which, loss from write-off of non-performing loans

17

Of which, gains (losses) on stocks and other securities

18

Ordinary profit

19

Extraordinary profit (loss)

20

Income taxes

21

Net income

22

Credit-related costs

23

Consolidated ordinary income

24

Consolidated ordinary profit

25

Profit attributable to owners of parent

2
3

Summary (2)[Three-bank total/individual banks]① Despite dividends received fromsubsidiaries of The Tokyo Tomin
Bank and The Yachiyo Bank, thethree-bank total (non-consolidated)of net interest income declined by¥100 million year on year, due todeclining interest income as a resultof the negative interest rate policy
pushing down yields on loans anddeposits.
② The three-bank total (nonconsolidated) of net income rose by¥900 million year on year to ¥7.6
billion, assisted by decreases incredit-related costs and increases ingains (losses) on stocks and othersecurities.
③ The three‐bank total of consolidated
ordinary profit increased by ¥800
million year on year, and profit
attributable to owners of parentrose by ¥700 million over the same
period.

9Plan for the fiscal year ending March 31, 2018
■ 2018/3 plan (Tokyo TYFG consolidated)[Plan for the fiscal year ending March 31, 2018](¥ billion)

2017/9results

2018/3plan

Progress
rate

Ordinary profit

5.7

5.0

114.0%

Profit attributable toowners of parent

4.8

3.2

150.0%In FY2017 we will work to improve revenue by means of the following measures.
○ Increasing loans to SMEs by strengthening initiatives for intellectual property management support,
management support and support for mainstay operations based on evaluations of business feasibility, etc.
○ Increasing fees and commissions through the consulting business in partnership with Kiraboshi Consulting, etc.

* With regard to the plan (Tokyo TYFG consolidated) for FY2017, in addition to declining interest
income as a result of the negative interest rate policy, we expect expenses in relation to thethree-bank merger, the posting of part of the expenses associated with the relocation to the new
Aoyama Head Office of the banking subsidiaries, and upgrades to office and system equipment in
the third quarter and beyond. Overall, therefore, we consider results to be in line with plans.

○ Strengthening the support structure for fostering SMEs, providing support for start-ups through enhanced
collaboration with local governments and their related organizations in Tokyo and other prefectures, andworking with regional banking groups, etc. to actively roll out measures to support mainstay operations○ The three-bank total for credit-related costs is forecast to be ¥1.2 billion, due to such factors as the relative
stability of business conditions for borrowers and continuous initiatives aimed at reconstruction support, etc.

■ 2018/3 plan (three-bank total and individual banks)
Three-bank total

No.

1
2

Gross core business profit
Of which, net interest income

Tokyo Tomin Bank (non-consolidated)

Progressrate

Yachiyo Bank (non-consolidated)2017/9results

2018/3plan

Progress
rate

ShinGinko Tokyo (non-consolidated)2017/9Results

2018/3
Plan

Progressrate

2017/9results

2018/3plan

2017/9results

2018/3plan

Progress
rate

37.8

69.8

54.1%

19.0

35.0

54.2%

15.7

29.1

53.9%

3.0

5.6

53.5%

30.9

57.7

53.5%

14.6

27.1

53.8%

13.3

25.1

52.9%

3.0

5.5

54.5%

3

Expenses

29.8

59.2

50.3%

15.2

30.4

50.0%

12.5

24.6

50.8%

2.0

4.1

48.7%

4

Net core business income

8.0

10.5

76.1%

3.7

4.6

80.4%

3.2

4.4

72.7%

1.0

1.4

71.4%

5

Credit-related costs

(0.2)

1.2

-

0.4

1.4

-

0.3

1.1

-

(1.0)

(1.3)

-

6

Ordinary profit

8.6

8.4

102.3%

4.3

3.3

130.3%

2.6

2.9

89.6%

1.6

2.1

76.1%

7

Net income

7.6

6.4

118.7%

3.8

2.1

180.9%

2.1

2.2

95.4%

1.6

2.0

80.0%

8

Ordinary profit (consolidated)*

7.0

7.4

94.5%

3.2

2.9

110.3%

2.0

2.3

86.9%

9

Profit attributable to owners ofparent (consolidated)*

5.7

4.8

118.7%

2.7

1.3

207.6%

1.4

1.5

93.3%

* The figures for the consolidated three-bank total are the total for The Tokyo Tomin Bank and The Yachiyo Bank on a consolidated basis, and ShinGinko Tokyo on a non-consolidated basis.

10Interest income■ Status of interest income (three-bank total)
Account

Loan

Securities

Deposits

Item

16/9

(¥ billion, %)17/9

Change■ Measures to improve interest income
Securing loan yields

Average balance

3,549.2

3,601.5

+52.3

Yield

1.30

1.22

-0.08

Interest

23.2

22.1

-1.1

Average balance

1,348.4

1,228.4-120.0

Yield

1.33

1.57

+0.24

Interest and dividends

8.9

9.7

+0.8

Average balance

4,798.9

4,777.3

-21.6

Yield

0. 04

0.03

-0.01

Interest

1.1

0.8

-0.3

○ Due to negative interest rate policies, we expect loan yields to decrease, but we will work to reduce thescale of the decline through such measures as strengthening financing to small and medium-sizedenterprises based on evaluations of business feasibility, mining them for new opportunities, and offering
consulting.

Diversification of securities investments○ Diversifying investments to secure returns while keeping a close watch on market trends

Improve procurement costs (the deposit yield) through measures such as reviewing
preferential interest rate products○ Improve the deposit yield through means such as reviewing each preferential interest rate deposit
product and the interest rate premiums on large time deposits, and reinforcing demand deposits○ The three-bank total for net interest income in FY2017 is forecast to be ¥57.7 billion.

■ Status of interest income (by bank)■ Status of interest income (by account)(Figures within brackets are year-on-year changes;
percentages are change rates)(Figures within brackets are year-on-year changes;
percentages are change rates)(¥ billion)
ShinGinko Tokyo

Yachiyo(¥ billion)
30.4

31.1

[-0.2] -0.6%

30.9

2.7

2.6

[+0.4] -15.3%

3.0

13.4

[-0.1] -0.7%

14.4

14.9

[-0.3] -2.0%

2015/92016/9

13.2

30.4

31.1

Interest and dividends
on securities

Interest on deposits

Others[-0.2] -0.6%

30.9

0.08

0.1

7.1

8.9

[+0.8] +8.9%

9.7[-1.1] -4.7%

22.1[+0.3 ] --0. 8
2017/9

13.3

24.7
Tokyo Tomin

Interest on loans anddiscounts

23.2

14.6

2017/9- 1.5
2015/9- 0.01- 1.1
2016/911

Yields■ Yields (three-bank total)

Loan yield○ In the first half of FY2017, due partly to negative interest rate policies, the three-banktotal loan yield declined by 0.08 points year on year, but due to the use of financing
initiatives, etc., based on business feasibility evaluations, the fall in yields began to
improve.

(Figures within brackets are year-on-year changes.)

Loan yield

1.43

1.30

[-0.08 pt]

1.26[-0.07 pt]

0.06

0.04

[-0.01 pt]

2015/92016/9Yield difference

1.37

Deposit yield

1.22[-0.01 pt]

1.21 %

1.19[-0.01 pt]

1.18 %

0.03[±0.00 pt]

0.03 %

2017/9Initiatives to improve loan yields○ Due to negative interest rate policies, we expect loan yields to decrease, but we will
work to reduce the scale of the decline through such measures as strengthening
financing to small and medium-sized enterprises based on evaluations of businessfeasibility, mining them for new opportunities, and offering consulting.

2018/3 plan

■ Yields (ShinGinko Tokyo)■ Yields (Tokyo Tomin)■ Yields (Yachiyo)(Figures within brackets are year-on-year changes.)(Figures within brackets are year-on-year changes.)(Figures within brackets are year-on-year changes.)

1.69

Loan yield
Yield difference

1.39
1.35

1.45
1.25

[-0.05 pt] 1.20

1.19 %

1.23

1.19[-0.04 pt]

1.18 %

1.40

1.33

1.30

[-0.12 pt] 1.21

1.21 %

1.18

1.18 %

1.37[-0.12 pt]

0.32
Deposit yield

0.04

0.02

2015/92016/9[-0.01pt]

0.01

0.01 %

0.05

0.03 [-0.00 pt] 0.03

2017/92018/3 plan

2015/92016/92017/90.03 %
2018/3 plan

2015/9

1.55

1.28

0.27

[-0.12 pt] 1.43

1.38 %[-0.04 pt] 1.24

1.19 %

0.19

0.19 %

2017/92018/3 plan[-0.08 pt]

2016/912

Loans■ Loan balance (Tokyo TYFG consolidated)(¥ billion)
2016/9Loan balance at
end of period

2017/93,608.7◆ Tokyo TYFG deposit-loan ratio

3,636.4(The numbers in white are average balances for the term; figures withinbrackets are year-on-year changes; percentages are change rates.)

3,449.8(¥ billion)
ShinGinko Tokyo

Yachiyo

3,535.3
208.5
1,485.7

+27.7

76.6%

■ Loan balance by bank (three-bank total)■ Loan balance by type of customer(three-bank total)

3,608.9

3,608.3
232.2

3,616.5
230.8

Local
governments

1,526.2[+41.3]
2.7%

1,548.7

Medium andlarge-sizedcompanies(¥ billion)

SMEs

Tokyo Tomin

1,841.1[-6.1]

1,849.8 -0.3% 1,843.7

2016/92017/93,449.8

3,549.2 [+52.3]1.4% 3,601.5

3,535.3
166.4

3,608.3 [+28.0] 0.7% 3,636.3
186.5 [-14.7] -7.8% 171.8
554.6 [-33.1] -5.9% 521.5

593.1

1,922.3

200.75 [+69.6] 3.4% 2,077.1

1,837.0
Individuals

2015/9■ Loan balance by industry(three-bank total)(The numbers in white are average balances for the term; figures withinbrackets are year-on-year changes; percentages are change rates.)[+28.0]0.7%[-7.2]-3.1%

1,567.5○ As a result of strengthening the sales structure through such measures as supporting
the opening-up of corporate clients, loans to small and medium-sized enterprisesrose by ¥69.6 billion year on year.
○ The loan portfolio is diversified over a range of industries.

3,601.5
3,549.2 [+52.3]
1.4%
3,636.3
225.0

Loan balances○ The loan balance of Tokyo TYFG on a consolidated basis rose by ¥27.7 billion year on
year to ¥3,636.4 billion.

YoY

2018/3 plan

853.3

859.6 [+0.62] 0.7% 865.8

2015/92016/92017/9(Figures within brackets are year-on-year changes; % figures indicate
percent of total)(¥ billion)

3,535.3

3,608.3[+28.0]3,636.3

351.5
182.8
399.9
259.3
258.0
413.3

331.3
185.4
413.0
221.7
311.1
426.4

[-5.8][+32.4]325.5 Manufacturing (9%)
185.9 Construction (5%)
419.7 Commerce (12%)
and other financial
202.1 Banks
institutions (6%)
Realestate343.5 brokerage (9%)[+22.5]448.9 Real estate leasing (12%)

348.3

362.6

[+4.3]

366.9 Services (10%)

853.3

859.6

[+6.2]

865.8 Individuals (24%)

468.6

496.8

[-19.3]477.5 Other (13%)

2015/92016/9[+5][+6.7][-19.6]2017/913

Deposits■Composition of deposit balance by region (three-bank total)

Deposit balance○ Corporate customer deposits increased by ¥56.3 billion due to factors such as thecontinuation of moves to secure working capital, but individual deposits declined¥53.8 billion as a result of the normalization of interest rates and so on.
The three-bank total deposit balance decreased by ¥14.6 billion year on year.

Kanagawa
Prefecture

Other

21%

○ By region, the Tokyo metropolis and Kanagawa Prefecture accounted for 99% of
the balance.

(As of September 30, 2017)1%

By region○ Efforts were made to increase balances by promoting the acquisition of corporate
demand deposits as well as pension and salary payment accounts, and byincreasing personal deposits through the handling of deposit products in responseto the needs of various generations.

Tokyo
78%

■ Deposit balance by bank

■Deposit balance by client (three-bank total)(The numbers in white are average balances for the term; figures within brackets are year-on-yearchanges; percentages are change rates.)(The numbers in white are average balances for the term; figures within brackets are year-on-yearchanges; percentages are change rates.)

4,756.2(¥ billion)
ShinGinkoTokyo4,858.8
267.0

4,798.9[-21.6]-0.4%

4,824.0
305.7[-14.6]-0.3%[-10.3]-3.3%

4,777.3
4,809.4295.4

4,764.4
4,750.8
265.8(¥ billion)
Local
governments,
etc.
Corporate

Yachiyo2,144.6

2,145.0[+0.9]
0.0%

2,145.9

2,447.1

2,373.1

2015/92016/9[-5.1]-0.2%

4,798.9[-21.6] -0.4%

4,777.3

4,858.8
210.5

4,824.0
187.3[-14.6] -0.3%

4,809.4
170.1

1,365.0

1,379.6[+56.3] 4.0%

1,435.9

3,283.2

3,257.0[-53.8] -1.6%

3,203.2

2015/92016/9[-17.2] -9.1%

2,138.0

IndividualsTokyo Tomin

4,756.2

2,368.0

2,347.0

2017/92018/3 plan

2017/914

Securities
Securities balance○ As a result of efforts to diversify and decentralize investments with the aim of mitigatinginterest rate risk and securing yields, such as by channeling redemption proceeds fromgovernment and municipal bonds into foreign bonds, the three-bank total securities
balance fell by ¥82.0 billion year on year.

■ Duration○ The three-bank total yield on securities rose 0.24 points year on year to 1.57%, due to theeffect of diversified investment.

ShinGinkoTokyo○ Within an environment of continued low interest rates, efforts will be made to thoroughly
ensure management of investment volumes, the amount of risk, and duration as we keep aclose watch on market trends while securing profits through flexible and diversified
investments in instruments including foreign bonds, corporate bonds, and investment
trusts.

Tokyo Tomin■ Securities balance and yields by bank (three-bank total)■ Securities balance by investment (three-bank total)(The numbers in white are average balances for the term; figures within brackets are
year-on-year changes; percentages are change rates.)(The numbers in white are average balances for the term; figures within brackets are
year-on-year changes; percentages are change rates.)

1.33[+0.24 pt]

5.5

5.5

4.4
4.0

4.1

1,346.6
ShinGinkoTokyo

Yachiyo

166.1

560.4

1,333.0
168.6

588.5

[-120.0] -8.8%[-82.0] -6.1%[-8.6] -5.1%

Othersecurities

1,228.4

1,251.0
160.0

Stock
Corporate
bonds
Municipal
bonds[+6.2] 1.0%

620.0

2015/9575.7

2016/92017/32017/91,373.2

1,348.4[-120.0] -8.8%

1,228.4

1,346.6

1,333.0[-82.0] -6.1%

1,251.0

211.0
45.9

237.6
37.1

407.0

[-79.5] -13.8%

496.2

2017/9[+41.2] 17.3%[+1.1] 2.9%

278.8
38.2

456.5

[-45.2] -9.9%

112.8[-55.9] -49.5%

56.9

569.9

488.8

[-23.2] -4.7%

465.6

2015/92016/9

112.6

594.7
Government
bonds

Tokyo Tomin

3.5 years

1.57%(¥ billion)
1,348.4

5.2 years

5.3

2016/3

1.03

1,373.2

5.5 years

Yachiyo411.3

2017/915

Assets under management
Status of assets under management (Tokyo Tomin Bank and Yachiyo
Bank)■ Outstanding balance (two-bank total) of core funds (investment trusts)○ With regard to investment trusts, as a result of promoting theaccumulation of balances, primarily in core assets, the two-bank totalrose ¥2.2 billion year on year to ¥215.8 billion.

(¥ billion)○ As for insurance, due to the introduction of new foreign currencydenominated products, sales were robust, causing the total balance forthe two banks to increase by ¥11.4 billion year on year to ¥221.0 billion.

30.3

33.2

2017/32017/922.9* ShinGinko Tokyo does not manage assets related to investment trusts,
insurance, etc.

2016/3■ Balance of assets under management by bank

■ Balance of assets under management by item (two-bank total)(Figures within brackets are year-on-year changes.)(Figures within brackets are year-on-year changes.)(¥ billion)

484.5

479.2

[+4.9]

484.1

Yachiyo

201.1

203.8

[+11.3](¥ billion)

484.5

479.2

[+4.9]

484.1

Public bonds

72.2

55.9

[-8.7]

47.2

198.7

209.6

[+11.4]

221.0

213.5

213.6

[+2.2]

215.8

2015/92016/9215.1
Insurance

Tokyo Tomin

283.3

275.4

[-6.4]

269.0
Investment trusts

2015/92016/92017/92017/916

Problem assets subject to disclosure under the Financial Reconstruction
Law and credit-related costs
Value and ratio of problem assets subject to disclosure under the Financial
Reconstruction Law (in the case of partial direct write-offs)○ The value of problem assets subject to disclosure under the Financial
Reconstruction Act fell by ¥6.4 billion to ¥80 billion on a three-bank total basis,
while the disclosure assets ratio declined by 0.20 points over the same period.

Credit-related costs○ Due to such factors as the relative stability of business conditions for borrowers
and our focus on reconstruction support, etc., we expect total credit-related
costs on a three-bank total basis to remain at low levels, and to fall by ¥930
million year on year.
○ Due to such factors as the relative stability of business conditions for borrowers
and our focus on reconstruction support, etc., we expect this to remain at low
levels.
* While the three banks did not make any partial direct write-offs, this states thefigures in the case of partial direct write-offs.

■ Value and ratio of problem assets subject to disclosure(three-bank total)(Figures within brackets are year-on-year changes.)
Disclosure assets
ratio

2.94

2.37

[-0.20pt]

2.17%

86.4

[-6.4]

80.0[-0.8]

3.1(¥ billion)
Substandard loans

105.1
6.6

3.9
Doubtful assets

Bankrupt and quasibankrupt assets

90.7

75.3

[-5.8]

69.5

7.7

7.1

[+0.2]

7.3

2015/92016/92017/9■ Coverage status of problem assets subject to disclosure under
the Financial Reconstruction Law (three-bank total)[Before partial direct write-offs]■ Credit-related costs (three-bank total)(¥ billion)(¥ billion)
2017/9

1.37

Covered amount0.72(0.21)

2015/92016/92017/974.5

Reserve for possible loan losses

22.0

Collateral, guarantees, etc.

52.4

Problem assets

91.0

Coverage ratio

81.8%

17

Capital ratio/Core OHR/ROE
Consolidated capital ratio■ Consolidated capital ratio (Tokyo TYFG)(Figures within brackets are year-on-year changes.)

9.01

10.35

[-0.96 pt]

9.39%

Capital ratioCore OHR○ Core business profit was flat, but due to higher than originally expected costs,
etc. related to the construction of the new Aoyama Head Office for The Tokyo
Tomin Bank, the three-bank total core OHR rose 0.99 points year on year.

(¥ billion)
Net assets○ The consolidated capital ratio for the Tokyo TYFG fell by 0.96 points year on year
to 9.39% mainly as a result of increased loans to small and medium-sizedenterprises, while consolidated net assets fell by ¥18.0 billion to ¥285.8 billion
year on year.

226.9

2015/9303.8[-18.0]2016/9285.8

2017/9ROE (consolidated)○ Consolidated ROE was affected by falling loan yields, but due to pushing ahead
with reductions in strategic shareholdings, which resulted in an increase in gains
on sales of securities, and due to declines in credit-related costs, profit
attributable to owners of parent increased, causing ROE on a three-bank total
basis to improve by 0.35 points year on year.

*Figures for ShinGinko Tokyo are not included in September 2015

■ Core OHR (three-bank total)■ ROE (consolidated)(%)(Figures within brackets are year-on-year changes.)
2015/9Three-bank total

78.86

77.86

[+0.99 pt]

2016/92017/93.68

4.03

78.85%*ROE (consolidated) =2015/94.73

2016/92017/9Profit attributable to owners of parent x 365 ÷183
(Net assets at the beginning of the period + net assets at
the end of the period) ÷2

× 100*The consolidated figures are calculated as the total for Tokyo Tomin Bank and Yachiyo Bank on aconsolidated basis, and ShinGinko Tokyo on a non-consolidated basis.

18

Future business strategy

19

Kiraboshi Bank’s course of action

Fiscal year

2017

2018

2019

2020

2021

2022

Birth ofKey events

Establishment ofcentral operations
centerCompletion of
AoyamaHead Office

Introduction of new personnel system/human resources development program
Move to new sales structure

Improving headquarters efficiencies/optimizing allocation of personnel

Streamlining
and efficiencyimproving
measures

Strategic branch policy/arrangement of new offices
System consolidation
Business process re-engineering/reductions in other costs

Measures toexpandrevenue

Establishment of
Kiraboshi Consulting

Customer-oriented problem-solving support (increasing loans to SMEs)
Strengthening consulting functions to raise revenue
Strengthening partnership promotion

Establishment of
Kiraboshi Tech

FinTech initiatives

20

Kiraboshi Bank’s target customer group■ Tokyo area market○ [Tokyo’s fertile markets and the dominance of the Tokyo area] Small and medium-sized enterprises (companies), which are the main target for Kiraboshi, aredramatically more numerous and more heavily concentrated in the Tokyo area than in other prefectures.
○ This is an environment in which we have ample opportunity to differentiate ourselves from mega banks and Shinkin in particular, and demonstrate the appealof our business feasibility evaluation business.
○ We will further deepen our transactions with individual customers by leveraging our consulting functions through sales that emphasize “dialogue,” which is astrength of the Kiraboshi Bank.
Unearthing new needs for individual customers

Responding to the financing needs of corporate customers

Number of customers

Major
corporations/Smalland medium-sizedenterprises
1 million companies in Tokyo
metropolis and Kanagawa Prefecture*

Kiraboshitransactions
Kiraboshi strengths

Previoustransactions

Small and medium-sizedEnterprises

Regular business,etc.

Depth ofprevioustransactions

Individual customers[Deepening of transactions][Dialogue]
Fund management
proposals, etc.

Target of businessfeasibility
evaluation*Source: Economic Census

Further still

Micro-enterprises

Increase in companies
using us as main bankPotential to expand
transactions

Owners/Employees and families ofcorporate clients
Leading regional influencers
Strengthen area around branches

Potential to mine for
new opportunities
using consulting function

Sophisticated needs(wills, etc.)

21Synergistic effects from merger and merger consolidation costs■ With regard to streamlining measures implemented as part of the one-bank approach, we will commit ¥2.5 billion in additional measures to the initial plansfor ¥8.0 billion.
■ By implementing these in tandem with more than ¥2.0 billion in revenue expansion measures, we will work to expand net core business income.

Synergistic effects from merger* Annual effects forecast to merge by FY2022

Previous streamlining
measuresApprox.
¥8.0 billion

Additional
streamlining measures¥2.5 billion plus

Revenue expansion
measures, etc.

More than¥2.0 billion① Improving headquarters efficiency:

Approx. ¥4.0 billion② Rebuilding existing branch network:

Approx. ¥1.5 billion③ System integration:

Approx. ¥2.5 billion① Improving headquarters efficiency:

Approx. ¥1.0 billion② Rebuilding existing branch network:

Approx. ¥1.5 billion③ Improving operating efficiency:

Several hundred million yen① Customer-orientated problem-solving support (increasing loans to SMEs)② Strengthening consulting functions to raise revenue③ Strengthening partnership promotion

Merger consolidation costs

Total investment in merger consolidation
FY2016¥1.1 billion of expenses posted

Approx. ¥20.0 billion (system consolidation, replacing signage, and handling customers, etc.)
FY2017¥2.2 billion forecast to be posted

Remaining expenses forecast to beposted in turn

22

Strategic branch policy and optimization of personnel allocation■ Personnel engaged in overlapping headquarters operations will be reassigned to sales divisions, leading to a reduction in total personnel of about 20%■ Streamlining of officers from May 2018 onward in line with the three-bank merger■ Primarily review overlapping regional branches to result in reduction of about 30%■ As well as developing human resources and promoting business process re-engineering, we will continually conduct customer surveys and employee surveys,
improve awareness and motivation of employees and work to build a sales structure that emphasizes “dialogue.”

Optimizationof personnel

Strategic
branch policy

September 30, 2017

2 years after system integration

Total
personnel

3,100

Approx. 20%
reduction

Headquarters
personnel

700

Sales personnel

2,400

Offices159

Full banking branches

133

Specialized branches

Branch policies already implemented

26

Over half of headquarters
personnel to be switchedto sales personnel

Approx. 30%
reduction
Primarily overlapping
regional branches*Results since Tokyo TYFG established

Sales structure that emphasizes “dialogue”

Human resources development
New human resources development program○ Launch of “First Penguin Project” (February 2017)○ Special promotions for young/female bank employees○ Proactively dispatch personnel to external organizations both in Japanand overseas○ Bank employees who can sympathize with the values and beliefs of ourcustomers○ Bank employees who think about issues and needs of their own accord
and can act independently

Customer surveys(Continuing since FY2016)

Employee surveys(Began in FY2017)

Business process re-engineering○ Start of business process re-engineering “ZERO” project (January 2018)○ By improving efficiency of operations, we will create time for“dialogue” with customers and respond to their needs.
○ By reviewing our operational procedures, we will reduce the burden on
customers and improve our service.

<Branch in branch> Nihonmatsu/ Shiroyama, Higashi Ikebukuro/Nishi Ikebukuro, Chofu/ Musashi Sakai Minami, Kamata/Nishirokugo, Kinshicho/ Joto
<Specialized branches> Aihara, Ichigao, Fujimigaoka, Higashi Fuchu, Kobuchi, Kinshicho Station North Exit Office<Consolidation of headquarters functions into Aoyama/Shinjuku offices> <Shift to central operations center>

23

Strategic branch policy that recognizes the special featuresof the region■ Introduce regional headquarters to devolve significant authority to local offices to improve the sense of speed in responding to needs specific to the special features of the region (market)■ Promote a branch-in-branch approach, primarily for overlapping branches, after the merger. Promote the switch from full banking branches to specialized branches that match the special
features of the region
Consider strategic opening of new branches in open territories■ Consolidate highly specialized personnel in full banking branches, create sales personnel, and build a sales structure that emphasizes “dialogue” with customers◎ Regional special features and targets[Machida/ Sagamihara,
suburban Tokyo areas][Central Tokyo area][Tokyo ward area]◎ Regional headquarters structure[Dialogue with corporates][Dialogue with region]
Region 2 headquarters
Region 5 headquarters

Regional
share

High

Low - medium

Region 1 headquarters

Tokyo ward area

Machida/Sagamihara, suburban Tokyo areas
Region 6 headquarters

Central Tokyo area

Region 3 headquarters

Large branches
Region 4 headquarters

Region 7 headquarters

Regional special
features

Many microenterprises,
landlords,
individuals

Concentration ofsmall and mediumsized enterprises

Key satellite
strategy

B-I-B strategy

B-I-B

TargetSophisticated fundmanagement
needs, consulting
on inheritances,etc.
Further regional
collaboration

Support

Corporate fundingneeds and businesssuccession issues

B-I-B

SupportSpecialized branches

Specialized branches

Full banking
branchFull banking
branchesSpecialized branches

Full banking
branchNew locations inopen territories

OfficeSpecialized branches

Full banking
branch◎ Branch policy that recognizes the special features of the region

24Problem-solving and mainstay operations support for SMEs basedon evaluations of business feasibility■ Fulfill the function of a true financial intermediary by using close relationships with customers to resolve problems and practice support of theirmainstay operations
Financing based on evaluations of business feasibility (initiatives for intellectual property management support/asset-based lending)

Examples of strengthening initiatives for management support of customers based on evaluations of business feasibility
Understanding needs
Evaluationof businessfeasibility

Results for funding based on
business feasibility evaluation(benchmark)

Capital investment

Improvements inperformance

Borrowings

・Stabilize financing by restricting
annual repayments to within therange of cash flow
・Reduce administrative burden by
consolidating transactions withbanks

Business succession

Normalization of financials

Creating shared value

Business feasibility＞

Repayment
amounts

Borrowings

・Profit-generating mainstay
operations(positive cash flow)
・Financial issues caused by past
over-investment, etc.

Vision aimed for

Use of ABL

Cash
flow

Business feasibility

Intellectual
property
management

Repayment
amounts

Cash
flow

Corporation＜

Advice/FinanceFiscal year

Numberofborrowers

FY2015525

FY2016

1,775

Fundingbalance

90.0
billion yen

370.3
billion yen

BankIncrease in interest income on loans
Consulting fees

25Strengthening of consulting functions-Improving profitability■ Expansion of advisory fees due to strengthening of consulting functions
Various types of support provided by Kiraboshi Consulting Co., Ltd. (IPO, strengthening governance, business succession, M&A, etc.)

Kiraboshi Consulting
Customer

SMEs (owner-managers)
Owner/family/employees

High net worth individuals

Expand added value provided by offering highly specialized advice
Advice/proposals

Dialogue

Headquarters

FY2017

Consulting division

Salesperson

Cooperation

Headquarters
coordination
staff

Cooperation

Provision

Trust functions(Contrust)(Real estate management trust)Business
succession

FY2019FY2020

FY2021

FY2022Business value assessment

Share price measures

M&A

Inheritance measures, etc.

Capital policy support

Cooperation

External specialists

Partnership

FY2018<Main business areas>

Foreign exchange
sales department
Partnership Promotion
Office (partnerships withlocal governments)

FY 2020 target¥1 billion in net sales

Net sales plan

Units: million
yen

Creating
business value

Support for drawing up
business plans

Support for overseas
expansion

M&A

Support for IPO

Transformation of profit
structure, etc.

Local governmentorganizations, etc.

Other financial
institutions

Strengthening
governanceSupport for humanresources, labor

Building internal control
systemRisk management

Restructuring oforganization, businesses, etc.

26

Strengthening partnership promotions
Strengthening partnership with local governments, such as the Tokyo Metropolitan Government and related organizations
Results for collaboration with local governmentorganizations, etc. (benchmark)SME customers

FY2016
September 29, 2015 “Agreement on a Comprehensive Affiliation for
Industrial Development in Tokyo” concluded with the Tokyo
Metropolitan Government

Support for small and medium enterprises(support for commercial and industrialorganizations, finance), support for tourism
trade associations, agriculture and fisheries
trade organizations, hiring and employment
support, etc.

(Consultation)
Understanding
the voices anddesires of
SMEs(Guidance activities)

Introducing
variety of
supportofferings

Number of start-ups supported in partnership withlocal government organizations

52

Number of companies to which support formainstay operations provided in partnership withlocal government organizations, etc.

648

Number of cases in which information exchanged
with local government organizations, etc., withregard to support for mainstay operations

1,006

Public interest incorporated foundation

Kanagawa Institute of Industrial Scienceand Technology
Overall management support

Comprehensive support for SME management
issues(management consulting, subsidies, opening sales
routes, overseas expansion, use of intellectual
property, etc.)

Support for resolving management issues andbusiness expansion for SMEs and micro-enterprises
Conveying the voices
and desires of SMEs.
Implementing policy
proposals, etc.

Tokyo Tomin Bank

Partnership,collaboration
Yachiyo Bank

Support for hiring and securing human resources

Support for recruitment at SMEs experiencing
issues regarding securing human resources

Partnership,collaboration

Local independent administrative agency

Yokohama Industrial Development
Corporation
Support problem-solving and opening of sales
routes, etc., by offering consulting functions to
SMEs and micro-enterprises

ShinGinko Tokyo(posting job offers, matching job offers to applicants,
etc.)

Supporting management issues of SMEs
Technology support

Support for resolving technological issues for
SMEs(product development support, joint research, request
for testing, technology consulting, etc.)

Partnership,collaboration(financing support, support for exchange of intellectual
property, support for start-ups, support for overseas
expansion, and support in areas such as hiring,
employment, and securing human resources)

Partnerships between industry and academia

Support for resolving technological issues, newproduct development, management development,
etc., for SMEs

27

Strengthening partnership promotions■ Through partnerships with financial institutions, we will provide financial services that allow us to respond to a variety ofcustomer needs, and to strengthen our consulting functions.
Expanding fee business throughbusiness tie-ups (June 2016)

Tokyo Tomin Bank

Yachiyo Bank

ShinGinko Tokyo

Aiming to expand the fee business and thecustomer base by offering sophisticated financial
services that address diverse customer needs

Building our support network for mainstay operations so that it links the Tokyo areawith other regions
An agreement on a Tokyo-Osaka partnershipthat “connects” the Tokyo and Osaka areas(January 2017)

Contributing to stable asset formation by customers
through business tie-ups(August 2016)

Mainstay operations support network(November 2016)
Sky Ocean Asset Management Co., Ltd.
Jimoto Holdings, Inc.

The Senshu Ikeda Bank, Ltd.

Kirayaka Bank, Ltd.

The Sendai Bank, Ltd.

By building our support network for mainstay operations so that it links the Tokyo area with other regions,
we will strengthen our consulting functions and support SMEs.

By leveraging know-how related to the “Core & Satellite
Management Strategy” we will work to improve our capability toprovide products that meet customer needs.

28

Initiatives to support start-ups
Working to make Kiraboshi Bank the natural partner for start-ups within three years■ The Group, whose home territory is the Tokyo area in which founders and entrepreneurs are overwhelmingly concentrated, aims to build a structure for supporting
founders, becoming a “hub” for the business development of such founders and entrepreneurs, working in partnership with external networks such as those of the Tokyo
Metropolitan Government to provide a variety of solutions from the public, private, and banking sectors.
■ By taking initiatives led by the Group not only in relation to the expansion of financing products, but also in the use of equity to provide support, we will respond tothe various funding needs of founders with a fusion of direct and indirect finance.
■ With the aim of making Kiraboshi bank recognized among founders, entrepreneurs, and stakeholders as the natural partner for start-ups, we will reinforce our structures
while developing various related measures.

Drawing
up plans

Cooperation
etc.

Founders,
entrepreneurs

Kiraboshi Consulting Co., Ltd.

Various kindsof support

Rapidly growing
companies andorganizations facing
the challenge ofcreating markets andbusiness models fromscratchCooperation
Consulting

Start-Up Support Group

Investment

Tokyo Kanagawa Innovation Support Fund 1

Investment Limited Liability Partnership“ToKI Meki Oen Fund 1”

Total value ¥1 billion

Equity investment

Venture fundStart-up support incooperation with sales
offices

Building of incubator andother networks

Active participation inpitch events (sprout, etc.)

Conducting all kinds ofseminars for founders
and entrepreneurs

Cooperation

Sales offices

Collaboration

Start-up companies

External start-up
support agencies

Preparation/
investigation

Local governments, including the Tokyo Metropolitan
Government, and affiliated organizations
Venture capital
Various incubation facilities
・Machida Business Development Agency
・Sagamihara Incubation Center, etc.

Various specialists
Tokyo Startup Station
Crowdfunding operations businessJapan Finance Corporation “Kiraboshi Start-up Support”
Tokyo Chamber of Commerce and Industry

FY2016 results

Number of start-up support cases annually288

Financing to customers during start-up period

190

Support for drawing up start-up plans

41

Introducing financial agencies affiliated withthe government and institutions supporting
start-ups

53

Subsidies, financing, and investment inventure businesses

429Initiatives to support the medical sector and overseas expansion■ In an environment characterized by the aging of society and a declining birthrate,
we have positioned the “medical/welfare field” as a growth area and a local industry
for the Tokyo Metropolitan area, to which we will provide multifaceted assistants
not only through financing but also through support for mainstay operations.
■ As a department specialized in this field, it will respond to a variety of needs such as
M&A, consulting, and proposals to healthcare professionals for asset management,
etc.

Medical corporations, private practitioners,
and business operators in areas related tocaregiving■ For overseas-related business support for SMEs, primarily in Asia, we make use of Tomin
Business Consulting Shanghai Co., Ltd., the only consulting affiliate of a regional bank,and form business tie-ups with local banks in Asian countries.
■ We also utilize tie-ups with the overseas offices of public organizations such as theThailand Branch Office of the Tokyo Metropolitan Small and Medium Enterprise Support
Center, the Bangkok office of the Tokyo Metropolitan Industrial Technology ResearchInstitute, and JETRO.

The number of counterparties forTokyo TYFG foreign exchange-relatedtransactions (corporates, ownermanagers) was

We have business tie-ups with the Bank of Beijing, the Bank of Dalian, the Bank ofNingbo, Ping An Bank, and the Bank of Jiangsu (Wuxi Branch)

Cooperation with Group
companies, etc.

Financing activities

approximately 2,900

Specialized medical/
welfare department
Collaboration with Medical andWelfare Administrative
Structure K.K.

Shanghai local subsidiary

Loan balance in medical/welfare field

700

585

600

Thailand Kasikornbank

703

343

359

394

420

300
200

The Philippines Metropolitan Bank and Trust Company

Bank Negara Indonesia

Ordinary foreign exchange handling volume

Our track record in terms of tradetransactions handled is one of the bestof all regional banks nationwide.
(FY2016 results)
Import transactions (outward
remittances/import settlements)
39,381
Export Transactions (incoming
remittances/purchase of export bills)
10,892(Unit: one million dollars)

2,842

3,000

2,603
2,500

2,468

2,000
2015/3期
2015/3100
0

Our customers’ other
Asian offices

731

484

500
400

642

665

Bank for Investment and Development of Vietnam

State Bank of India

Business mediation
activities
Unit: ¥100 million

800(FY2017 first half).

Our customers’
Chinese offices

2008/3 2009/3期
2009/3 2010/3期
2010/3 2011/3期
2011/3 2012/3期
2012/3 2013/3期
2013/3 2014/3期
2014/3
2015/3
2016/3 2017/3
2008/3期
2015/3期
2016/3期
2017/3期

2016/3期
2016/32017/3期
2017/330

FinTech initiatives “Maekyu”-Rising to the challenge of new business domains■ Strengthening the functionality of the “Maekyu” platform and putting it to good use gives us a foothold in the FinTech business, allowing us to move into
new business areas.
■ The “Maekyu” business is a service that allows part-time and temporary staff working at companies to fulfill their various funding needs before payday.*Against the backdrop of recent labor shortages, it is being deployed by an increasing number of companies aiming to secure staff and improve retention
ratios by offering generous benefits, and has grown into an important source of income for the Group.
*An account with the Group is not necessary to use the “Maekyu” service, but it is necessary for the employee to have a salary account and the employing
company to conclude a contract with The Tokyo Tomin Bank.

Previous business model for “Maekyu” operations
Approx.
1.08 million people

654 companies

Wages

Personnel
Part-timers, temporary staff, etc.

After subtracting“Maekyu” usage amount

600

654

100
1,000,00090
900,000

599

Paying inApplication for use“Maekyu”-use deductions data

Basic user data

Attendance management data

800,000
80
550

544
108

500

70
700,000

501
60
600,000
80

459

450
400

Tokyo Tomin Bank
“Maekyu System”

Number of employees
registered
Number of companies
contracted

650

35

50
500,000

65

415

55

40
400,00045

0
300,000350
2012/3FY
12/3

Number of employees registered (10,000 people)

Deductions
from wages

110
1,100,000

700

Number of contracted companies

Operatingcompany“Maekyu” business, number of contracts, number of employees registered

Continuous
turnoverimplemented

2013/313/3期

2014/314/3期

2015/315/3期

2016/316/3期

2017/3
17/3期*Employee data is continuously being updated with new data.
*The special feature is the function that enables direct settlement (deductions from wages).

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FinTech initiatives “Maekyu”-Rising to the challenge of new business domains■ Kiraboshi Tech, Inc., established
Taking a step beyond the “Maekyu” business model, by working to offer new added value for the 1.08 million people registered as employees, we areconsidering tie-ups with FinTech venture companies with the goal of winning new revenue opportunities, and have begun the building of a new businessmodel.
■ Partnership with SBI Securities
Support the opening of accounts at SBI Securities, a major online securities firm, for those registered with the “Maekyu” service, providing investment
opportunities that match investment plans, such as small-scale investment trust accumulation services

Kiraboshi Tech Inc.

+
“Maekyu” apps
Shift management
apps

Selecting services based ongathering and analysis of needsα

App development based ongathering and analysis ofneeds
Number ofTransaction
lending

employees registeredwith “Maekyu”

1.08
million peopleαPrepaidservices
Travel/education
services+“Maekyu” system

Increase in “Maekyu” users, and potential new
accounts that could be set up to accessapplications for services other than “Maekyu”

Tokyo Tomin Bank

From BtoB to BtoBtoC

Operatingcompany+αPotential from accounts set up
with the intention of accessing
services other than “Maekyu”

Provides investment opportunities
to the more than 1 million
registered users of “Maekyu” thatmatch their own investment plans

Business alliances32

CSR initiatives

33

CSR initiatives
Stance of the Tokyo TY Financial Group toward CSR
The Tokyo TY Financial Group views the implementation of CSR management and contribution to the formation of sustainable local communities to be an essential management issue.
Based on the management policy “to be a financial group for small and medium-sized enterprise customers and individual customers in the Tokyo metropolitan area that will contributeto the development of local communities through comprehensive financial services,” we have established the three action guidelines of “contributing to the regional economy,”“contributing to local communities,” and “initiatives towards environmental issues,” and we will actively engage in CSR activities.

■ Contributing to the regional economy
Businessisfeasible

Presentation of issues and causes of action Explanation of othersupport menu items

Continuous support(Support Center)
Business Feasibility Evaluation
Committee

Initial evaluation

Interview/consultation

Business plan application

Preparation forannouncement
Presentation
training

Initiatives for growth areas that leverage the business feasibility evaluations businessWe handle the “Jigyou no Chikara” (“Strength of Business”) business feasibility evaluation financing system in partnership with the Tokyo
Metropolitan Small and Medium Enterprise Support Center, as well as the “Chizai no Chikara” (“Strength of Intellectual Property”) intellectual
property evaluation financing system. By leveraging the know-how of the Support Center, we provide an appropriate evaluation for the customer’s
ideas and technological capabilities, work to improve our financial intermediary functions and contribute to the development of the regional
economy.

■ Contributing to local communities
Participating in the “TEAM BEYOND” para
sports fan site
We participate in the TEAM BEYOND fan site set
up by the Tokyo Metropolitan Government toboost interest across society in para sports, andencourage officers and employees to register andwork together to promote para sports.

Working with “Building a regional society that supports the elderly, etc.”
We have signed an “Agreement between the Metropolitan Government and thecompany for the building of a regional society that supports the elderly, etc.” with
the Tokyo Metropolitan Government, and are taking initiatives to achieve asociety in which elderly people can feel secure by “keeping gentle watch” andproviding training for “dementia supporters” as well as preventing bank-related
scams.

■ Initiatives towards environmental issues
Collaboration with “Fundraising to build forests withless pollen”
We donate an amount equivalent to a fixed rate applied tothe balance of “building forests with less pollen” fixeddeposit accounts to the “Fundraising to build forests withless pollen” program operated by the Tokyo Development
Foundation for Agriculture, Forestry and Fisheries.

Implementing cleaning activities on the Tama and Sagami rivers
Personnel of the three banks and their families work together to carry out
cleaning activities on the Tama and Sagami rivers, getting involved throughthe Group in initiatives aimed at environmental problems. These activities
were also attended by children, so that the program also had an
educational aspect.

34

Thank you for attending this presentation today.

■ Please direct any comments or questions about thesebriefing materials or other IR topics to the IR office below.

Tokyo TY Financial Group, Inc.
Corporate Planning Division
TEL

03-5341-4301

FAX

03-3352-2296

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 includingchanges in the business environment.

35