Tokyo Kiraboshi Financial Group

Results Briefing for the Fiscal Year Ended
March 31, 2020

June 9, 2020

Contents

Tokyo Kiraboshi FG

Overview of the Group

Medium-Term Business Plan Promotion Platform

P.17

Overview of the Group

p.4

Medium-Term Business Plan Start Up☆Kiraboshi

P.18

Outline of Kiraboshi Bank, Ltd.

P.5

Profit Improvement Measures

P.19

Integration Effects and Improvement of Management
Efficiency

P.20

Summary of Business Results
Summary of Business Results for the Fiscal Year Ended
March 31, 2020

P.7

Branch Strategy / Local Strategy

P.21

Gross Business Profit (Gross Core Business Profit), Net
Business Income (Net Core Business Income)

P.8

Group Strategy and Further Promotion of Partnership with
External Organizations

P.22

Factors Affecting Net Income (Kiraboshi Bank)

P.9

Evolution of Business Model Through Enhancement ofGroup Strategy

P.23

Loans（Kiraboshi Bank）

P.10

Enhancement of Overseas Strategy

P.24

Support at Diverse Stages

P.25

Deposits and Assets under Management (Kiraboshi Bank)

P.11
Initiatives for Individual Customers

P.26

Productivity improvement through digitalization andbusiness process re-engineering

P.27

Improvement of Customer Convenience ThroughDigitalization

P.28

Developing Human Resources That Are Trusted andChosen for Their “Dialogue”

P.29

SDGs Initiatives

P.30

Enhancement of financial intermediary and consulting
functionsP.31

Securities (Kiraboshi Bank)

P.12

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

P.13

Capital Ratio/Core OHR/ROE

P.14

Profit Plan and Strategy
Plan for the fiscal year ending March 31, 2021

P.16

2

Overview of the Group3

Overview of the GroupManagement philosophy
To be a financial group for small and medium-sizedenterprise customers and individual customers in theTokyo metropolitan area that will contribute to thedevelopment of local communities throughcomprehensive financial services.

Tokyo Kiraboshi FG

Company history
2014

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

Management policy

A bank that sparkles

2016

April
Business integration of “Tokyo TY Financial Group,Inc.” with ShinGinko Tokyo, Limited

A bank that rises to the challenge

A bank that brings together ideas

2018

May
Birth of Kiraboshi Bank (merger of 3 banks)
Changed business name to Tokyo Kiraboshi
Financial Group, Inc.

2020

May Systems integration
June Head Office relocation (Shinjuku → Aoyama)

Vision aimed for

Become the urban regional bank groupmost favored by customers in the Tokyo
metropolitan area.

4

Outline of Kiraboshi Bank, Ltd.

Tokyo Kiraboshi FG

Birth of Kiraboshi Bank
(Group companies)
Tokyo Tomin Bank

Established on May 1, 2018
Yachiyo Bank

from merger of 3 banks

ShinGinko Tokyo・Kiraboshi Consulting Co., Ltd.

・Kiraboshi Capital Co., Ltd.

・Tokyo Kiraboshi Lease, Inc.

・Kiraboshi JCB Co., Ltd.

・Kiraboshi System, Inc.

・ Kiraboshi Securities
Preparatory Co., Ltd.

Kiraboshi Business
Service Co., Ltd.

Kiraboshi Credit Service
Co., Ltd.

(Group companies)
Kiraboshi Service Co., Ltd.

Kiraboshi Credit
Guarantee Co., Ltd.

Yachiyo Credit
Guarantee Co., Ltd.

Kiraboshi Tech, Inc.

綺羅商務諮詢（上海）

KIRABOSHI BUSINESS CONSULTING VIETNAM COMPANY LIMITEDThe origin of the bank’s nameConstellation. Twinkling stars.
We want to make the dreams of our customers
glitter even brighter in the Tokyo area.
Into this name we put our desire for somethingclean-cut that also feels easy to get to know,that takes the customers’ ideas into safekeeping
and uses them to bridge the way to the next
generation.

Overview of Kiraboshi Bank, Ltd.

(Kiraboshi Bank, Ltd. non-consolidated as of March 31, 2020)

Location of head office

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

Capital¥43.7 billion

Total assets¥5,491.0 billion

Deposit balance¥4,660.3 billion

Loan balance¥3,769.8 billion

5Summary of Business Results

6Summary of Business Results for the Fiscal Year Ended March 31, 2020
Tokyo Kiraboshi FG(¥ 100 million)(¥ 100 million)

Kiraboshi Bank (non-consolidated)
1

Gross business profit

2019/32020/3673

740

Change67

2

Of which, net interest income

3

Of which, net fees andcommissions

105

109

4

4

Of which, other business income

(1)

1

2

5

Of which, gains (losses) on bonds

(2)

62

64

546

522

(24)

127

217

90

6
7

Expenses
Net business income(before transfer to reserve for general
possible loan losses)

570

564

(6)

8

Credit-related costs (1)

43

92

49

9

Credit-related costs (2)(COVID-19 related reserve)

－

22

22

10

Gains (losses) on stocks and othersecurities

18

(10)

(28)

11

Other non-recurring profit (loss)(including merger and systems
integration costs)

(58)

(46)

12

12

Ordinary profit

44

47

3

(Gain on transfer of Shinjuku Office,net of restoration costs)

ー

54

54

14

Net income

57

86

29

15

Merger and systems integration
costs

34

42

8

13

Extraordinary income

2019/3
results

2020/3
results

2020/3plan

Year-onyear

Achievement
rate

Ordinary profit

34

23

21

(32.5％)

109％

Profit attributable toowners of parent

49

76

65

55.8％

116％

Tokyo Kiraboshi FG(consolidated)[Gross business profit]• Despite increase in interest on loans and discounts, net interest income
decreased due primarily to decrease in interest and dividends on
securities, which however was offset by net fees and commissions
reflecting growth in corporate customer business.
• To make an effective use of unrealized gains on investment securities,
marketable bonds held to maturity were reclassified to available-forsale securities, a portion of which were sold and the gain thereon being
applied to reserve for possible loan losses (precautionary reserve) on
establishment of the COVID-19 Fund.
• Gross business profit increased by ¥6.7 billion year-on-year.
[Net business profit]• Increased by ¥9.0 billion year-on-year as merger-driven cost reduction
continued.
[Credit-related costs]• (1) Increased by ¥4.9 billion year-on-year due largely to customer
default caused by inappropriate accounting treatment.
• (2) Recorded ¥2.2 billion as precautionary reserve in connection withthe establishment of COVID-19 Fund.
[Net income]• Stood at ¥8.6 billion, with ¥5.4 billion recorded in extraordinary income
as gain on transfer of Shinjuku Office.

7

Gross Business Profit (Gross Core Business Profit), Net Business Income (Net Core Business Income)Tokyo Kiraboshi FG

Customer business secured profitability with profit of ¥0.6 billion, up ¥3.6 billion YoY
Net core business income increased by ¥2.5 billion YoY, loan yield showed signs of bottoming out, up 0.002% YoY to 1.185%(¥ 100 million)

Kiraboshi Bank
Gross business profit

1(3＋8＋9＋10＋11)(Gross core business profit)(1－11)

2
3

Net interest income
Of which, interest on
loans and discounts
Of which, interest on
securities
Of which, interest on
deposits
Of which, foreign currency
funding costs

4
5
6

7

2019/32020/3673

740【Movement in customer business profit) (¥ 100 million)

Change
67

676

677

1

570

564

(6)

430

438

8

161

136

(25)

(11)

(10)

1

(20)

(12)

8

105

109

4

1

1

0

8

Net fees and commissions

9

Trust fees

10

Other business income

(1)

1

2

11

Losses related to bonds(Government bonds, etc.)

(2)

62

64

546

522

(24)

12
13
14

Expenses
Net business income(before transfer to reserve forgeneral possible loan losses)

Net core business income*post-merger

2018/3

2019/3

(30)
(49)

130

217
155

90
25

* Same for net core business income (excluding gains (losses) on cancellation of investment trusts)

2020/3Customer business benefited from various post-merger initiatives (*)
to achieve profitability* (1) Shift of focus from financing for large corporations to financing
for SMEs (increase in interest on loans and discounts)(2) Promotion of project aimed at becoming customers’ main bank(increase in fees and commission from corporate customers)(3) BIB initiatives, headquarter efficiency improvement measures, etc.
(cost reduction)*Calculation method: (loan balance x loan and deposit rate margin) + income from fees and commissions –general and administrative expenses【 Yields （％）
】1.216
Loan yield

1.185
1.183
Yield difference

1.181
1.162
1.157

Deposit yield

127

6

0.035
18/3
2018/3

0.026
19/3
2019/90.023
20/3
2020/38

Factors Affecting Net Income (Kiraboshi Bank)[Factors affecting net income](¥ 100 million)

Increase* [Breakdown of expenses]

Decrease<1> Increase in interest on loans and discounts, reduction in foreign currency funding
costs, and net fees and commissions that reflected increase in corporate
customers business made up for the decrease in interest on securities<2> Expenses: down ¥2.4 billion YoY<3> Gains (losses) on bonds: up ¥6.4 billion YoY (inclusive of gain (loss) on sale ofgovernment bonds held to maturity)<4> Credit-related costs: up ¥7.1 billion YoY (inclusive of ¥2.2 billion of precautionary
reserve)<5> Gains (losses) on stocks and other securities: down ¥2.8 billion YoY (inclusive of¥1.0 billion of impairment losses on stocks)<6> Gain on disposal of Shinjuku Office: recorded ¥5.4 billion (net of restoration costs)<7> Net income: up ¥2.9 billion YoY

<3>

<4>

64

(71)

8

Interest
on loansanddiscounts

8Interest on Foreign currency
funding costs
securities

45

522

40

44

243

233

217

284

271

261

2019/32020/3<6>54

Non-personnel
expenses

Personnel
expenses

(9)

<5>

86

(28)
Gains on
bonds

57

546

Taxes

24

(25)

(¥ 100 million)573

2018/3<2><1>

Tokyo Kiraboshi FG

OthersCredit-related
costs

４
Net fees andcommissions

Expenses*

2019/3Losses on
stocks andothersecurities

Gain ondisposal of
Shinjuku
Office2020/3<7> ¥2.9 billion increase in net income

9Loans（Kiraboshi Bank）

Tokyo Kiraboshi FG

Increase in SME financing on the back of business feasibility evaluations andsupport of mainstay operations (up ¥104.6 billion YoY)
■ Loan balance by type of customer

36,76236,961

1,667
5,090

1,532
4,746

21,305■ Loan balance by industry (Kiraboshi Bank)(¥ 100 million)

37,6981,423
4,694

Local governments

22,194 +1,046 23,240

Medium and largesized companies
SMEs

8,698
2018/38,488
2019/3■ Loan balance by region

36,762
430
5,559

8,341

3,241
1,886
4,276
2,094
3,519

3,257
1,951
4,401
2,057
3,785

3,295
1,964
4,424
1,840
4,163

4,613

4,871

5,336

3,770

3,792

4,088

8,698

8,488

8,341

4,661

4,356

4,242

2018/3

2019/32020/3

Individuals

2020/3(¥ 100 million)

36,961
434
5,579

450
5,608

11.2

31,639Kanagawa

Individuals

22.1

Tokyo

Services

2018/3

2019/3

Construction

Commerce
Banks and other financial
institutions
Real estate brokerage
Real estate leasing
Services
Individuals
OthersManufacturing

8.7

Others30,948Manufacturing

37,698Others30,772(¥ 100 million)

2020/3

Real estate leasing

20/3
(%)

Construction

5.2
11.7

Commerce

4.8

Banks and otherfinancial institutions

11.0

10.8
14.1

Real estate brokerage

10

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

Rebound in deposit balance driven by growth in corporate deposits, up ¥101.8 billion YoY
Decrease in balance of assets under management due largely to sluggish market affecting investment trusts■ Deposit balance by client

47,1591,472

14,102■ Balance of assets under management(¥ 100 million)

45,585+1,01846,603

1,258

2,065

14,098

14,695
Others31,583

2018/330,228

2019/3■ Deposit balance by region

47,159773
9,896

29,841

438

359

2,284

2,415

(294)

4,626
276
2,441

Individuals

Investment trusts

2,053

2,146

1,908

2018/3

2019/32020/3* Balance of assets under management of the former Tokyo Tomin Bank and former
Yachiyo Bank for the fiscal year ended March 31, 2018.

46,603■ Loan-to-deposit ratio / security-deposit ratio

762
9,928

Others

75.7%

79.2%

80.4%

Kanagawa
36,48934,952Public bonds
Insurance(¥ 100 million)

753
9,879

4,920

Corporate

2020/345,585

4,776(¥ 100 million)

35,911

Tokyo

25.9%

25.8%

Loan-todeposit ratio

22.7%
Securitydeposit ratio

2018/3

2019/32020/3

2018/3

2019/32020/311

Securities (Kiraboshi Bank)Tokyo Kiraboshi FG

Promotion in diversification of investment management and portfolio diversification
while aiming for risk diversification and stable profits■ Securities balance

12,004
2,681
404

10,892
2,697
310

3,700

Municipal bonds

3,222

539
2,537

Government bonds

2019/32020/3

4,033
627■ Valuation gain/loss on securities

343

207

353

99

70

2018/3

2019/3

168

209

2,443
235
PE funds, etc.

1,806

1,766

1,516

Foreign securities
REITs
Investment trusts

352

416

437

354

305

253

2018/3

2019/32020/3■ Yield on securities

Marketable bonds held tomaturity reclassified toavailable-for-sale securities,
a portion of which was
subsequently sold

191

50
40

2,697

Corporate bonds(¥ 100 million)

1.36%

Held-to-maturity bonds

1.35%
1.30%

2018/3

138
13
23

2,681

(¥ 100 million)

Other securities
Stock

541

2018/3

9,491
2,443
270

3,971

4,404

■ Breakdown of “Other securities”(¥ 100 million)

2019/32020/3■ Duration

Others

102
47
△(11)
11
2020/3Bonds

4.5 years

4.1 years

3.8 years

Stocks2018/3

2019/32020/312

Problem Assets Subject to Disclosure under the Financial Reconstruction
Law and Credit-Related Costs (Kiraboshi Bank)Tokyo Kiraboshi FG
Increase in credit-related costs, by ¥4.9 billion due to customer’s inappropriate accounting treatment,
and by ¥2.2 billion in response to COVID-19■ Value of problem assets subject to disclosure[After partial direct write-offs]
767
767
28
47

(¥ 100 million)

2018/3

2019/32020/3

Change

21

43

92

＋49

60

ー

ー

22

＋22

Doubtful assets

651* Lower row indicates COVID-19 related reserve (¥ 100 million)

743

Substandard loans

666■ Credit-related costs

631
Bankrupt and quasibankrupt assets

73

69

51

2018/3

2019/32020/3■ Coverage status of problem assets subject to disclosure under the
Financial Reconstruction Law[Before partial direct write-offs](¥100 million)

2020/3Covered amount

670

Reserve for possible loan losses

224

Collateral, guarantees, etc.

446

Problem assets

896

Coverage ratio

74.8％■ Ratio of problem assets subject to disclosure[Credit-related costs][After partial direct write-offs]

Enhancing credit management structure with a view to holding
down credit-related costs in FY2020 and beyond
2.06%

2.03%

1.93%

2018/3

2019/32020/3(Established Corporate Solution Group in April 2020)13

Capital Ratio/Core OHR/ROETokyo Kiraboshi FG

Capital ratio fell by 0.21 points YoY
Core OHR improved by 3.7 points YoY, ROE rose by 0.92 points YoY■ Consolidated capital ratio (Tokyo Kiraboshi FG)■ ROE (Tokyo Kiraboshi FG, consolidated)2018/3
9.05%

8.86%

8.65%

2019/3
1.28* ROE (consolidated) =2,813

Net assets

2,852

2,813

（％）

2020/3
1.68

Profit attributable to owners of parent

2019/353.1

2020/3

× 100(Net assets at the beginning of the period + net
assets at the end of the period) ÷2■ Payout ratio, dividend yield (Tokyo Kiraboshi FG)
2018/3

2.60

39.0

(%)

Payout ratio
24.5■ Core OHR (Kiraboshi Bank)

80.2%

2018/3* Core OHR ＝

5.25

80.7%

3.83

2019/3
Expenses
Gross core business profit

77.0%

2.37

2020/3

2018/3

Dividend yield
2019/32020/3× 100

14

Profit Plan and Strategy

15Plan for the fiscal year ending March 31, 2021(* Impact of COVID-19 is not included (other than ¥2.2 billion which has been set aside as precautionary reserve))■ 2021/3 plan（Kiraboshi Bank）(¥ 100 million)
2020/3 results
B

2021/3 plannedA

Difference

Gross business profit

740

675

(65)

2

Gross core business profit

677

654

(23)

3

Net interest income

564

536

(28)

4

Of which, interest on loans anddiscounts

438

443

5

5

Of which, interest on securities

136

97

(39)

6

Of which, foreign currency
funding costs

(12)

(1)

11

7
8
9
10

Net fees and commissions

Expenses
Net business income(before transfer to reserve forgeneral possible loan losses)
Of which, Losses related to bonds(Government bonds, etc.)

109

106

(3)

522

506

(16)

217

168

(49)

62

20

(42)

11

Net core business income

155

147

(8)

12

Credit-related costs (1)

92

64

(28)

13

Credit-related costs (2)

22

－

(22)

14

Other non-recurring profit (loss)

(46)

(43)

3

15

Ordinary profit

47

72

25

16

Extraordinary income

54

ー

(54)

17

Net income

86

54

(32)

18

Merger and systems integration costs

42

31

(11)

(COVID-19 related reserve)(Gain on transfer of Shinjuku Office)■ 2021/3 plan (Tokyo Kiraboshi FG, consolidated))
2020/3 results
B

（B-A）

1

Tokyo Kiraboshi FG(¥100 million)

2021/3 plannedA

Difference（B-A）

vs Business
Plan

Ordinary profit

23

57

34

－

Profit attributable toowners of parent

76

40

(36)

(20)

Increase

Decrease[Factors affecting net income (Kiraboshi Bank)]
86

5

(39)

50
16

11
(３)
Interest on
loans anddiscounts
Interest on Foreign Net fees Expenses
securities currency
andfunding commissions
costs
2020/3(¥100 million)

(42)

(54)

28

24

54

22
Losses on
bonds

Creditrelated
costs

Gain ondisposal of
Shinjuku
OfficeOthers2021/3[Net core business income]• Decrease of ¥0.8 billion from the fiscal year ended March 31, 2020 is projected to reflect such positive
factors as increase in interest on loans and discounts as well as cost reductions, despite decrease ininterest on securities. (The projection is ¥2.2 billion above the target of ¥12.5 billion set in theMedium-Term Business Plan.)[Credit-related costs (1)(2)]• Reduction of ¥5.0 billion from the fiscal year ended March 31, 2020 is projected by enhancing
predictive risk management structure (establishment of a new division)• Precautionary reserve of ¥2.2 billion is already recorded in the fiscal year ended March 31, 2020 for
customers facing business deterioration due to COVID-19.
[Net income]• Decrease of ¥3.2 billion from the fiscal year ended March 31, 2020 reflects absence of ¥5.4 billion ingain on disposal of Shinjuku Office recorded in that fiscal year.
[Tokyo Kiraboshi FG]• Between consolidated and non-consolidated figures, a negative difference of ¥1.4 billion in net
income will result from such factors as income/loss at subsidiaries etc., and accounting treatment ofloss on redemption of securities.
• Decrease of ¥2.0 billion from the Medium-Term Business Plan target is projected due to impact
notably of changes in the market environment taking place since the formulation of the Business Plan.

16

Medium-Term Business Plan Promotion Platform

Tokyo Kiraboshi FG

Provide support in the Tokyo area where a wide range of SMEs are concentrated■ Secure first calls by providing tailored financial services to the large number of SMEs.
■ In line with growth of customers’ business, expansion of business opportunities can be expected.
Number ofEstablishments (June 2016)
Ranking

Prefecture（10,000)

1

Tokyo

69

4

Kanagawa

31

Tokyo and Kanagawa accountfor approx. 18% of total numberof establishments nationwide

Number of newly-establishedcorporations in Tokyo is increasing
year by year, and accounts forapprox. 30% of nationwide total.

Number of newly-establishedcorporations in Tokyo
Source: Tokyo Shoko Research, Ltd.

40,311

Saitama

40,926

Profitability: Low

Companies withannual sales of¥10 bn or more

Source: Economic Census
Chiba

37,25037,679Profitability: High

Tokyo

2015

Kanagawa

2016

2017

2018

Branch Network
・Tokyo124
・Kanagawa
36
・Saitama
3・Chiba1
Total

Total ¥139 tn

98.9%

Comparison of prefectural GDP (gross prefectural
domestic product) (FY2016）
Source: Prefectural Accounts

164¥39 tn¥38 tn¥22 tn164 branches 135 office(as of March 31, 2020)¥20 tnPercentage of
SMEs in Tokyo

Companies withannual sales ofaround ¥0.5 to ¥10 bn¥20 tnSource: Industry and Employment in Tokyo 2019

Tokyo+Kanagawa

Aichi

Osaka

Saitama

Hyogo

Chiba

17

Medium-Term Business Plan Start Up
Concept(1) Creation of a “new kind of urban regional bank for the
Tokyo area”(2) Commitment by the Group to contribute to thedevelopment of the Tokyo area (with a tangible presencein the Tokyo area)(3) Start-up spirit based on “Challenge & Speed”

Kiraboshi From May 2018 to March 2021 (three years) Tokyo Kiraboshi FG
Numerical targets
Net income (FG)

*Numbers in red indicate numerical targets of the Business Plan

Net core business income（BK） (¥100 million)(¥100 million)¥10 bn or
more

Upfront investment in
subsidiary, impact ofchanges in market
environment, etc.

Effects of first call exercise
and other initiatives

155

76

130

147

¥16 bn or
more

125

60
49
40

Business models“Building a business model that takes dialogue as its
starting point”
2019/32020/32021/3plannedMain measures(1) Enrichment of consulting functions(2) Human resources development focusing on dialogue
abilities for being chosen and trusted(3) Business process re-engineering to strengthen contact
with customers

Core OHR (BK)

2023/3 total

2019/32020/32021/3 planned 2023/3 total

Number of first call contacts (BK)(%)

(count)80.7
80％

14,87011,290

Number of first call contacts

77.0

77% level

2020/32021/3 planned

・ Number of contacts made with proposals to support their mainstay operations(corporates, owner-managers)

7,000
per year・ Number of contacts made with proposals to support their life plans (individuals)
2019/3

2019/32020/3

18

Profit Improvement Measures

Tokyo Kiraboshi FG

Promotion of “First Call exercise” and establishment of “SF Division”
First call exercise

SF Div.’s comprehensive financial services• Launch consulting activities with dialogue as the starting point, which is one of themain measures of the Medium-Term Business Plan, and seek to become “the bank towhich customers give the first call”• Diversify means of “dialogue” with customers through use of tablet computers andother tools, in the context also of COVID-19 impact• With the first call exercise taking hold, number of first call contacts has substantiallyexceeded the target of 7,000 per year
• Profit increased from ¥2.1 billion in 2019/3 to ¥4.4 billion in 2020/3, contributing tooverall profit growth

Number of contacts, profit• “SF Division” was established in January 2019 for offering proposals in highly
specialized financial services (currently with a team of around 80)• The Division consolidates the three functions of financing based on businessfeasibility evaluations, structured finance and medical/welfare fields• With the Division also supporting the first call exercise, steady growth was achievedin fee and commission income from corporate customers• Loan yield improved with provision of tailored financial services[2019/3] 1.183%  [2020/3] 1.185% (+0.002%)
Fee income, average interest rate⇒

2019/3 11,290 contacts

2020/3 14,870 contacts
1.609%

1.605%Developing into operation that can be expected to generate continuous profit(in ¥100 million)

FY in which contracts
were signed

44

FY202021

2019/3

LBO

DoubledNon-recourse loans

10

FY201924

15

13

2020/32021/3 planned(in ¥100 million)20(in ¥100 million)

28

Amount of loans extended

2,100

Non-recourse loans

1,600

Syndicated loans

Syndicated loans

ABL

ABL

Loans that led to main

Loans that led to mainbank relationshipbank relationship

FY2018

2019/32020/3

LBO

2019/32020/319

Integration Effects and Improvement of Management Efficiency

Tokyo Kiraboshi FG

Plan to achieve net core business income of ¥16.0 billion or more, net income of ¥10.0
billion or more(Final year of the Business Plan)

Fiscal year ending
Fiscal year ended
March 31 2021
March 31, 2020
Initial targets
2021/3 targets
resultFiscal year ending
March 31, 2023
planned

Net income(Tokyo Kiraboshi FG)¥6.0 billion¥4.0 billion¥10.0 billion or more

Net core businessincome(Kiraboshi Bank)¥12.5 billion¥14.7 billion¥16.0 billion or more

OHR
(Kiraboshi Bank)

80％

77％

75% or lessComplete systems
integration
Completed in May 2020

Severalhundredmillion yen

Other efficiency
measures¥2.5 billion

Systems
integration

Several hundred million yen¥0.7 billion¥1.0 billion¥0.5 billion¥1.0 billion¥0.7 billion¥2.5 billion¥2.0 billion

Synergy effects of
the integration
leveraging benefitsof the merger¥3.0 billion¥1.7 billion¥5.0 billion¥3.2 billion¥10.5 billion or more

Integration effects

Fiscal year ended
March 31, 2019
resultRebuilding of
branch network
Improvement of
headquarters
efficiency¥4.0 billion¥2.2 billion

Additional
costs¥1.0 billion¥3.4 billion¥4.2 billion¥3.1 billion

Merger / systems
integration costs
Total approx. ¥20.0 billion

20Branch Strategy / Local Strategy

Tokyo Kiraboshi FG

Building a new branch network to meet the market needs of the Tokyo area
2017/92020/3

Number of
officesNumber of
offices

FY2018159
133

FY2020Plan to set up
BIB (Branch in
Branch) in 17
locations135

BIB (branch inbranch) set up
in 25 locations

Full-line
bank branches

2023/3Full -linebank branches

108

Number of offices

around 100
Full-line
bank branches

Specialized
branchesSpecialized
branches

26

27

approx. 50
Nov. 2020 (scheduled)
Opening of
Shimokitazawa Office

April 2019
Opening of Kawasaki
Corporate Business Office

Catering to various inquiries on
asset management, loans and other services

Johoku/Nishi Tokyo

Regional headquarters
structure

Joto

headquarters

Tokyo ward area

Tokyo Mirai Sales Division(entire Tokyo metropolitan area)

Tama

Central Tokyo area

headquarters

Head OfficeSales Division
Large branches

Jonan

Machida/Sagamihara,
Suburban Tokyo area

Sagamihara/
Central Kanagawa
headquarters

headquarters

Josai

headquarters

headquarters

Machida/Yokohama/
Kawasakiheadquarters

to be reduced byabout 30%
from Sep. 2017

approx. 50

Specialized
branches・ Corporate sales offices that are alignedwith the special features of the area
・ Establishment of new branches, such as
specialized branches catering toindividual customers, in open territories

Number of offices◼ Substantial delegation of authority to theseven regional headquarters◼ Community-based sales activities◼ Flexible deployment of personnel within
the regional headquarters

Respond to the needs specific to thespecial features of the area (market) witha sense of speed and through “dialogue”
with the community and customers.

21

Group Strategy and Further Promotion of Partnership with External Organizations
Tokyo Kiraboshi FG

Enhancement of functions within the Group andpromotion of partnership with external organizations
Group strategy
Oct. Establishment of Tokyo FY Financial Group, Inc.

Partnership with external organizations
2014
2015

Sep.

Conclusion of Comprehensive Collaboration Agreement with

Tokyo Metropolitan Government

Apr. Business integration with ShinGinko Tokyo
Aug. Investment in Sky Ocean Asset Management Co., Ltd.

2016

Apr. Establishment of Kiraboshi Consulting Co., Ltd.
⇒ to strengthen consulting functions aimed at enhancing
comprehensive financial services
Nov. Establishment of Kiraboshi Tech, Inc.
⇒ to expand into the FinTech area

2017

Jan.
Aug.

Alliance with Senshu Ikeda Holdings, Inc.

May Merger of the three banks
Sep. Establishment of Kiraboshi Capital Co., Ltd.
⇒ to respond to the needs in mezzanine, funding (incl. IPOs)

2018

May

Alliance with Orix

Jan.

Conclusion of Comprehensive Collaboration Agreement withMay

Conclusion of agreement for investment inAug. Conversion of Tokyo Kiraboshi Lease, Kiraboshi
System and Kiraboshi JCB to wholly-owned subsidiaries⇒ to strengthen the Group’s sales capabilities
Oct. Opening of subsidiary in Vietnam
Dec. Establishment of securities subsidiary⇒ to embrace a new challenge of developing securities
business in the Tokyo area

June

Business and capital tie-up with Sumitomo Mitsui Trust

Bank, Ltd.
Nov. Alliance with Jimoto Holdings, Inc.

Alliance with Tokyo Metropolitan University

Tokyo Chamber of Commerce and Industry
2019

July
Sep.

ASEAN Region Funds
Alliance with Shinhan Bank Japan⇒ to strengthen overseas support
Alliance with Freee

Building a comprehensive service business that is also strong in finance22

Evolution of Business Model Through Enhancement of Group Strategy

Tokyo Kiraboshi FG

Leverage the collective strength of the Group with the aim of developing

a comprehensive service business that is also strong in finance

Provision of solutions through Group-wide collaboration• Provide consulting services
to improve corporate value• Ensure commitment to customeroriented business practiceExpansion ofsales channel

Capitalinvestment

Overseas
expansion

Business
start-up

Management
improvement

Shortage ofskilled workers

IssuesExternal specializedorganizations

Customer

Propose problem-solving menu

• Serve the functions of a trading company
in the Tokyo metropolitan area
M&A

Business
succession

Capitalenhancement

Asset building

Assetmanagement

Inheritance

External partnerorganizations

Group-wide sharing of issues

Enhancement of the Group’s proposal capabilities
Banking and securities
business collaboration

FinTech(Tech)

CapitalOverseas
supportSecurities
subsidiaryBank

Consulting

Leasing

Creditguarantee

Creditcards

Variousservices

Improvement of Group’s profitability
Continuous and stablepayment of dividends

Shareholder return

Shareholders

Improvement ofcorporate value

Improvement of Groupvalue by enhancing
Group functions

23

Enhancement of Overseas Strategy

Tokyo Kiraboshi FG

Enhance overseas strategy through expansion of overseas networks and use of offshore funds
Kiraboshi Bank’s new overseas strategy
・・・Shinhan Financial
Group locations(as of December 2019)
Southeast Asia 122 offices

July 2019
Business alliance with Shinhan BankJapan (Shinhan Financial Group)Aug. 2009
Consulting subsidiary in Shanghai, China
Kiraboshi Business Consulting
Shanghai Co., Ltd.

Asian markets as anextension of thedomestic market
Personnel
dispatch to
local banks

Asian markets as an extensionof the domestic market

China

Thailand Vietnam

Sep. 2019Conclusion ofbusiness matching
agreement with HIS

Oct. 2019
Opening of consulting subsidiary in
Ho Chi Minh, Vietnam

Singapore

Hub of information
related to Asia

Challenges for SMEs
⚫ Maturation of domestic market⚫ Expansion of marketing channels for products and services⚫ Collection of local (overseas) information⚫ Alliance with companies overseas, etc.

Serve the functions of a trading company
To connect Japan’s high level technical capabilities
and quality service to the Southeast Asian markets(time machine model)

Southeast Asia market⚫ High economic growth, market expansion, population growth⚫ Workforce with low average age and filled with vitality⚫ Technical capabilities of SMEs are still at low levels
Number of customers receiving support inoverseas expansion, etc.
755
622
530

Capital injection andpersonnel dispatch to
local funds
2018/3

Asian business support in Japan and overseas[Opening ceremony ofSubsidiary in Vietnam]

2019/32020/324

Support at Diverse Stages

Tokyo Kiraboshi FG

Support at diverse stages, from start-up to growth and maturity phases◼ With the aim of making Kiraboshi Bank the natural partner for start-ups, provide support to founders and entrepreneurs inpartnership with external organizations as appropriate◼ Established “Kiraboshi Capital” in Sep. 2018. Made active use of equity mezzanine finance by structuring “Yume Kagayaki Fund 1”
and “Yume Habataki Fund 1” to respond to customer needs in business succession, etc.
◼ Provide support in business restructuring, using “Tokyo Revitalization Fund” and “Tokyo SME Support Fund” as appropriate
Number of start-up support cases 10,652
5,322

Support from early stage to pre-IPO stage

3,012
IPO
Structured in Oct. 2017

Structured in Mar. 2019(1) Toki Meki Oen
Fund 1(3) Yume Habataki
Fund 1Business
succession

Buyout investment

Tokyo Revitalization
Fund

Business
start-up・Expansion investment(2) Yume Kagayaki
Fund 1<1 deal executed>
Structured in Nov. 2018

・Venture investment

Stage

Start-up phase

Growth phase2018/3

2019/3Maturity phase2020/3

Number of M&A support cases
97

111

2018/3

2019/3

Tokyo SME
Support Fund

<11 deals executed>

・Growth capital investment

Business
restructuring78

2020/3

Number of business succession support cases
880
760
672

Decline phase2018/3

2019/32020/325

Initiatives for Individual Customers

Tokyo Kiraboshi FG

Commitment to customer-oriented business practice based on fiduciary duties
Measures related to customer-oriented business operations
Provision of diverse products

Kiraboshi Bank

Customer
Securities subsidiary

Banking and securities
business collaboration【The ideas that went into the company name】
Kiraboshi Life Design Securities (scheduled to start operation in Aug. 2020)• to realize customers’ ultimate• to feel empathy with customers’
objectives in building their assets enjoyment and happinessMeasurement scheme in whichcustomers’ enjoyment/happiness = evaluation of sales offices• to be a bridge to the next
generation

PDCA of FD-based marketing
From “product proposal” to “proposal aiming together with customers toreach their goals”◼ Abolished profit target in all branches as regards assets undermanagement◼ Built sales structure designed to link growth in AuM balance togrowth in profit◼ Sales commissions on investment trusts to be waived (planned)(for customers of securities subsidiary with ¥10 million or more in assets
under management)(1) Customer understanding(5) Follow-up(4) Problem-solving
proposals(2) Information provision/confirmation of customer’s goals(3) Consultation

Initiatives using trust functions
・ Proposals on property management geared to an aging society.
・ The first trust product for individuals. Launch of [Longevity Support Trust “MAMORIBOSHI”]（Jan. 2020）26

Productivity improvement through digitalization and business process re-engineering
Tokyo Kiraboshi FG

Completed systems integration in May 2020 for improved convenience and productivity“Goal”
Seal-less, cashlessand paperless bankToward improved customer convenience
Enhancement of Kiraboshi Bank app functions• Greater living convenienceand higher added value ofbank accounts

Use of tablet computers and smartphones• Development of Groupware,
promotion of paperless office• Enhanced non-face-to-facechannel• Phased distribution of mobile
PCs and smartphones to sales
personnel

Promotion of Project “ZERO”
・ Simplification of back-office processes (such as
deposit seal slips, address change procedure,loss related work, inheritance work)

Systems
integration

Business process re-engineering
Toward improved
productivity through businessprocess re-engineering• Roll out of electronic
approval system, expense
settlement system etc. inall branches

Trial implementation of teleworking andfree address
Strengthen flexibility to ensure business
continuity through use of videoconferencing, teleworking, etc.

27

Improvement of Customer Convenience Through Digitalization

Tokyo Kiraboshi FG

Development and provision of Maekyu service using FinTech
Digital strategy◼ In April 2020, initiated verification test of digital money top-up applying the “Maekyu” scheme on Group employees

Image of advance payment with digital money“Maekyu” service
Number of subscribers:
over 700 companies (as of Mar. 2020)
Usage per year:
around 1,170,000 uses (Apr. 2019－Mar. 2020)■Conventional “Maekyu”
Application■Conventional method of digital money top-up“Maekyu” service[Full of attractive and convenientfunctions!]• Posted information includes
various coupon sites, overseas
remittance service and asset
management• Function upgrades are planned
to support users’ work life

Cash

Digital money top-up
Direct debit
transfer”Can Day”, a smartphone app
operated by Kiraboshi Tech

Employee’s personalaccount

MaekyuRealizing a new digital money top-up with Maekyu■LINE Pay easy remittance service“Maekyu” service
Application

API(1) Target users: expanded to cover frompart-timers to full-time employees(2) Improved convenience and monetization・digital money top-up function
・wallet function

Digital money top-up(On-line top-up platform
offered by Nihon Unisys, Ltd.)28

Developing Human Resources That Are Trusted and Chosen for Their “Dialogue”
Tokyo Kiraboshi FG

Aiming to develop Kiraboshi People who can think and act
Who are Kiraboshi People?

People who are able to win the trust of customers, think and act from customers’ perspective,and experience success as a result
Realizations and behavior modification[Reform of training programs]
From the traditional classroom-style input-based training to interactive training◼ Implementation of training programs based on the 5 values(indicators)
Management

BusinessskillsDialogueskill

Leadership

Future value
creation■First Penguin Program

Work style reform / diversity◼ Positioning “work style reform” as one of the priority issues forthe management, promoted “’Kiraboshi style’ work stylereform”.
◼ Set up “Diversity Promotion Section” and “Project team for thepromotion of work style reform”, encouraged both male andfemale employees to take childcare leave.
◼ Abolished performance target for first and second year
employees. This period is to be used as “development period”
to cultivate
their ability to have “dialogue”.
◼ Recruited foreign nationals

Original training program that ensures
self-understanding, mutual understanding, etc.
◼ Rich in programs such as “dispatch to externalorganizations”, “open recruitment and selection system”

Networking of employees who tookchildcare leave

Meetup with outside directors

29

SDGs Initiatives

Tokyo Kiraboshi FG

Create “social value”, contribute to the development of local communities
Environmental protection

Creation of shared value with customers
・ Support for business operators intheir mainstay operations
・ Business succession support
・ Support for start-ups
・ Started handling SDGs private placement
bonds (June 2019 - )Tokyo Venture Championship 2019

Employees’ work style reform andpromotion of diversity•Certified as“Eruboshi” (with thehighest rank) by the
Ministry of Health,Labour and Welfare

・Excellent Company in
Health Silver rank
（Certification #940
Silver）

Proportion of women inMar. 2019

Mar. 2020

deputy section chief positionor higher

21.0％

21.3％

management position(section chief level or higher)

14.1％

14.4％

*Number of women branch managers (incl. representative offices) : 15

• Investment inTokyo Green Bondand green finance(Green Jointly
Operated
Designated Money
Photo credit: courtesy of the Tokyo
Metropolitan Government
Trust)

・Support for
activities togrow lowpollen forests
Cooperating in “Corporate Forests”, aforest preservation project, organizedplanting activity at “Kiraboshi Forest”

Contribution to local communities
・ Hiring of 2 top athletes(Left photo: Tokyo International
Industry Exhibition）
・ Educational support for children[Dream Class] Dream teacher
Naohiro Ishikawa (soccer player)

Dialogue with shareholders and investors
Dividend History

Basic policy is to makecontinuous and stablepayment of dividends

Dividend per share of Tokyo Kiraboshi FG (consolidated)

¥60

¥60

¥60

¥60

FY2017FY2018FY2019FY2020 (planned)

30

Enhancement of financial intermediary and consulting functions
Tokyo Kiraboshi FG

Providing full support to customers in the “fight against COVID-19”
Enhancement of financial support and consulting functions
Feb. 2020Feb. 2020
Mar. 2020
Apr. 2020
May 2020

Started offering assistance in applying for emergency lending program, set up loan consultation desks
Conducted a survey of approx. 25,000 companies on business impact of COVID-19
Established COVID-19 Kiraboshi Fund (applicants receive responses in principle within 3 business days)
Started loan consultation on holidays
Expanded holiday loan consultation to all branches
Extended period for operating holiday loan consultation (some branches operated during the Golden Week period)

Kiraboshi support package
Funding• Effectively interest-free loans, unsecured loans• Original COVID-19 relief fund
• Consultation on funding problems

Subsidies/grants(information andguidance)• Ministry of Health, Labour and Welfare • Kanagawa Prefecture• Ministry of Economy, Trade and Industry • Saitama Prefecture• Tokyo Metropolitan Government• Chiba Prefecture

Support of mainstay
operations• Development of business plan, management plan
• Cost reduction (rent, electricity, communication, other expenses)• HR support• Accounts receivables guarantee• Subcontracting receivables protection (construction industry)• ICT implementation support• Equipment procurement / leasing(business matching, etc.)* Responding to inquiries on diverse subjects including collaboration with administrative bodies
and public financial institutions, and use of directed credit programs and subsidies

31

Figures of “Kiraboshi Bank” for the periods up to the fiscal year ended March 31, 2018 are sums of
the pre-merger figures of the former Tokyo Tomin Bank, the former Yachiyo Bank and the former
ShinGinko Tokyo.

In conjunction with the merger of the three banks effective May 1, 2018, the former Tokyo Tomin
Bank and the former ShinGinko Tokyo were liquidated effective April 30, 2018. However, from thepoint of view of appropriate period-over-period comparison of each item, the figures of “Kiraboshi
Bank (non-consolidated)” presented herein for the fiscal year ended March 31, 2019 are simple sumsof Kiraboshi Bank figures for May 2018 onward and figures of the former Tokyo Tomin Bank, theformer Yachiyo Bank and the former ShinGinko Tokyo for the month of April 2018.



Please note that some of the figures in the “Profit plan and strategy” section are taken frompreliminary reports.

This document contains forward-looking statements on the Group’s results. These statements are
not intended to guarantee future results, as they are subject to risks and contain uncertainties.
Please keep in mind that future results may differ due to factors including changes in the businessenvironment.

■ Please direct any comments or questions about

these briefing materials or other IR topics to the
IR office below.

Tokyo Kiraboshi Financial Group, Inc. Corporate Planning Division
TEL
03-5341-4301
MAIL

ir@kiraboshibank.co.jp

32