Giving our all, for TOKYO.

Tokyo Kiraboshi Financial Group
Medium-Term Business Plan
（FY2024–FY2026）

Contents
1．Current Medium-Term Business Plan Overview

Pages
04
05
06
07

Review of Previous Medium-Term Business Plans
Purpose / Social issues To Be Addressed
Management Targets
Transformation of Income Structure

2．Review of income structureGroup Strategy
Corporate Customer Strategy
Retail Customer Strategy
Digital Strategy
Branch Strategy
Market Investment
Overseas Strategy
Start-up Support

09–10
11–14
15
16–22
23
24
25
26

3．Corporate Value Enhancement Measures, Capital Policy
Financial Management
Business Portfolio (Excluding Kiraboshi Bank)
Cost Control
Risk-Weighted Asset Control (Overview)
Risk-Weighted Asset Control (By Category)
Basic Capital Policy
Capital Policy (Preferred Stock, Dividends, Cross-Shareholdings)

28–29
30
31
32
33
34
35

4. Measures for Further Efficiency Improvement and Optimal Management Resource Allocation
Resource allocation
Governance Structure and Organization
Well-being and Human Capital Management

37
38–39
40–42

5. Sustainability Initiatives
Roadmap[E] Environment[S] Social[G] GovernanceAppendix: Materiality Initiatives: List of KPIs

44
45
46
47
*Abbreviations in this document are as follows; FG: Tokyo Kiraboshi Financial Group, BK: Kiraboshi Bank, UI: UI Bank
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

2

Giving our all, for TOKYO.

1. Current Medium-Term Business Plan
Overview©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Review of Previous Medium-Term Business Plans
Achieved substantial cost reduction through system integration and branch network reorganization under the previous
medium-term business plan
Profitability greatly enhanced by business financing and main bank relationship building; capital adequacy, including preferredshare redemptions, remains a challenge
Merger of the three predecessorbanks (2018/5)

2018/32021/3

KiraboshiFirst Medium-TermBusiness Plan

2024/3

Kiraboshi
Second MediumTerm Business Plan

Core OHR

80.2%

75.7%
57.8%

Net income(Tokyo Kiraboshi FG consolidated)

Income¥25.6 billion¥3.6 billion¥4.1 billion

Profit from customer business(Kiraboshi Bank non-consolidated)¥25.0 billion¥1.4 billion◎〇

Kiraboshi Third MediumTerm Business Plan
(current plan)

Substantial cost reduction
through systems integration,
branch network reorganization,
streamlining of headquarters
operations and other measures

Further efficiency improvement

Improvement in profitability
through business financing,promotion of transactions formain bank relationship building
and other activities

Strengthening of profitability
Review of income structure△

Profitability of Group
companies

Improve productivity throughconsolidation of branches forcorporate customers and use ofhighly specialized humanresources

Strengthen profitability ofGroup companies
Exit from equity investments
Monetize digital strategy(¥4.9 billion)

Capital ratio

CapitalThree challenges

Cost(Kiraboshi Bank non-consolidated)

Performance
Performance appraisal
appraisal

2024/4(Tokyo Kiraboshi FG consolidated)

9.0%

8.7%

8.2%

△

Decline in capital ratio due toaccumulation of riskweighted assets△

Redemption (Repayment) ofpreferred shares

Enhancement of equity capital
Accumulate internal reserves tosecure funds for redemption(repayment) of preferred shares
Control risk-weighted assets
being mindful of RORA

©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

4

Purpose / Social Issues To Be Addressed
Defined our purpose: “Giving our all, for TOKYO” Resolving social issues in TOKYO with comprehensive solutions by theentire Group

Establishment of purpose

PurposeSocial issues to be addressed and our
responses

Realization ofa sustainable
society★ Support for SMEs in
improving their businessvalue★ Support for SMEs in theirdecarbonization efforts★ Medical (management)
support★ Support for the elderly andchild raising generation

Creation of
new social
values andindustries★ Group-wide contribution toregional development★ Start-up support★ Support for overseas
expansion from the TOKYO
marketResponses toissuesaccompanying
progress indigitalization★ Delivery of new financial
functionsSocial infrastructure (security
and safety)★ Financial services support
for the elderly, young
people, and foreigners★ Digital promotion via realchannels using sales offices

Giving our all, for TOKYO.

Management
Management Philosophy
Philosophy
To be a financial group for small and medium-sizedenterprise customers and individual customers in the Tokyo
metropolitan area that contributes to the development oflocal communities through comprehensive financial services

KiraboshiKiraboshi Philosophy
Accomplish the goals of contributing to society, seeking
Philosophy

growth of the organization, achieving self-fulfillment andrealizing one’s own happiness

Kiraboshi Group’s collective
efforts to provide integrated
solutionsand resolve TOKYO’s
challenges

Principles of action guideline for“Kiraboshibito”
People who have high aspirations
People who always think “how it can be done”
People committed to results and who continuously
take on courageous challenges

FuturevisionComprehensive service businessthat is also strong in finance©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

5

Management Targets
Aim for FG consolidated profit of ¥30 billion and FG consolidated ROE in the upper 7% range in FY2026 by improving theGroup’s profitability

Accumulated retained earnings, with a capital ratio of 8.3% after redemption of preferred shares

FY2023

FY2026
Strengthening of profitability and review of income structure

Net income(FG consolidated)

Profit of Group
companies(FG consolidated)¥25.6 billion(¥0.3 billion)¥30.0 billion¥5.0 billion(FG consolidated)■ Corporate customer strategy➢ Strengthen various solutions functions➢ Provide hands-on support for equity investees■ Retail customer strategy➢ Provide consultation-based comprehensive services➢ Respond flexibly to customer needs through diverse channels* excluding Kiraboshi Bank

ROE

■ Group company strategy➢ Strengthen integrated solutions capability applying digital, solutions and otherbusinesses➢ Build a business model that does not depend on Kiraboshi Bank’s loan income

7.4%High 7% range■ Digital strategy➢ UI Bank to promote digital-driven retail areas (deposits/loans)➢ Strengthen functions and services as a platform for new businesses

Further efficiency improvement

Core OHR(Kiraboshi Bank nonconsolidated)

57.8%

Mid-50% range■ Branch strategy➢ Optimum personnel allocation through consolidation of branches for corporate
customers and expansion of offices specializing in retail customers➢ Headquarters and sales offices working together to provide high value-added
services

Enhancement of equity capital

Capital ratio(FG consolidated)

8.2%

8.3%

■ Financial strategy➢ Accumulation of internal reserves to secure funds for redemption (repayment)of preferred shares➢ Risk-weighted asset control that is mindful of RORA

©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

6

Transformation of Income Structure
1

While controlling assets, particularly loan balance, transform business model to ensure a certain level of fee income

2

Equity investment and hands-on support to respond to the needs in business succession and business transfer

3

Respond to customers’ diverse needs with the collective strength of the Group and seek improvement of Group
companies’ profitability
Previous Medium-Term Business Plan (FY2021–FY2023)

Current Medium-Term Business Plan (FY2024–FY2026)(in ¥100 million)

FundincomeCorporate
customerbusiness(14)

FG
consolidated
profit(0)Fund income(74)
OthersFG
consolidated
profit(27)+21

Others300(30)
Credit-related
costs

(26)
256

+53

＋52

Interest on loans
and discounts

Profit ofGroupcompanies

＋38
＋201

Profit of Group
companies

1＋64

Interest on loans
and discounts

3

2

Credit-related
costs

Corporate
customerbusiness

FG consolidated
profit41
FY2020

FY2023

FY2026©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

7Giving our all, for TOKYO.

2. Review of Income Structure©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Group Strategy 1
Unified Group response to customer needs
Improving Group profitability, particularly in the financial, digital, and solutions businesses
Group company profit plan (excluding Kiraboshi Bank)(in ¥100 million)

FY2023

FY2026

(3)

50

+53

+8

50

+1

+38

4

Promotion /Overseas Business11

Solutions Business

11

Digital Business

24

Financial Business+6(3)
Financial Business

Digital Business

Solutions Business

Promotion / Overseas Business

FY2026

24

11

11

4

FY2023

18

(27)

3

3

* See p. 30 for details about Group
companies engaged in each business©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

9Group Strategy 2: Provide Solutions to Customer Issues
Providing high value-added solutions to customer issues through Group-wide efforts (1. Corporate Customer Strategy,
2. Retail Customer Strategy, 3. Digital Strategy)
Enhancing the convenience of daily life by building a digital platform

1. Corporate Customer Strategy

Group company businesses and corresponding
customer segments● Pivot to a solution business modelwith asset control

Providing digital solutions with
unparalleled convenience and costcompetitiveness● Provide financing and hands-on
support to meet clients’ M&A andbusiness succession needs

RetailSMEs

2. Retail Customer Strategy● Offer life plan support for individual
customers● Unified consulting-oriented businesswith corporations and retailcustomers: Expand transactions withestate heirs and deepen transactions
with business owners

Digital Business

Solutions Business
Promotion
Business
Overseas
Business

DigitalBusiness

Kiraboshi
Bank
FinancialBusiness

Solutions
Business

Providing high value-added solutions tocustomer issues through Group-wide
efforts

Financial BusinessSupporting customer needs with a focus
on financial businesses such as leasing,asset management, and financing

3. Digital Strategy● Transition Kiraboshi Bank’s retail
operations to UI Bank, improvecustomer convenience● Provide embedded financial services
with BaaS functionality

High net worth individuals

Promotion Business /Overseas BusinessSupporting promotions contributing tosales channel expansion* See p. 30 for details about Group companies engaged in each business©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

10

Corporate Customer Strategy 1: Loans
Business financing balances execution, repayment, and distribution for an effective asset cycle
Improving yield and profitability of non-business financing loans by replacing them with highly profitable assets(emphasizing RORA)
Shifting to an income structure that is not heavily dependent on business financing by enhancing the Group’s strength

Loan balance at end of period(Kiraboshi Bank + UI Bank)
48,33350,47051,306

Loan interest and interest rates(Kiraboshi Bank)(in ¥100 million)

Business financing
yield

52,222(in ¥100 million, %)
3.8%

3.3%

3.6%

3.7%

1.3%

1.3%

1.3%

1.4%

665

676

680

686

472

466

451

439

192

210

229

247

FY2023

FY2024FY2025

FY2026

Loan yield

2,222

UI Bank Co.,
Ltd.

2
6,740

6,390

5,864

Individuals(consumption)

6,953

41,37743,25943,60944,135

Kiraboshi
Bank

Corporations,
etc.

5,907

FY20236,248

FY2024FY20256,510

FY2026

Of which,businessfinancing

Businessfinancing(in ¥100 million)

82
3
7
12

63
8
14

6,493

Nonbusinessfinancingloans

Corporate services (Kiraboshi Bank) + Group income

58

FY2023

72

74

10

12

M&A fee

17

Consultingfee

25

Non-businessfinancing

20

Businessfinancing

17

15

25

26

20

FY2024FY2025

Group

1,306

Kiraboshi
Bank

470

FY2026©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

11

Corporate Customer Strategy 2: Building a Scheme for LBO Market Development
Establishing new fund with various financial institutions in the LBO market in collaboration with new external funds
Accepting LP investment and human resources from regional financial institutions in the new fund and creating a scheme todevelop the LBO market

Overview of collaboration scheme

Consulting and financing (debt/equity) for business succession and business transfer needs

Underwriting financing and distributing to regional financial institutions, etc.

Building a scheme for LBO market development
Illustration of scheme[Issues]
External collaboration fundLP investment

Regional financial
institutions

LP
investment
Loan[Solutions]

Joint GPGP

EXIT
IPO/Trade sale・ Lack of expertise in business finance screening
・ Lack of specialized personnel in businessfinancing

Cooperative fundKiraboshi Bank・ Training human resources accepted fromregional financial institutions
・ Sharing expertise through joint management

Fostering and developing the LBO market©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

12

Corporate Customer Strategy 3: Equity Investment Business
By addressing business succession needs, the balance of equity investments and the number of prospective clients increased
during the previous medium-term business plan period
Yield is expected to increase to 6.2% during the period of the current medium-term business plan

Kiraboshi Bank PE fund investment
amount (LP)2,400

PE fund yield(in ¥100 million)(in %)

Investment limit

2,400[Three-year average yield]

5.6%

5.1%

4.9%

FY2023

FY2024

6.2%

1,700

Of which, balance of committed
capital

1,221

Total: 1,200

Total: 1,200

Total: 1,000
366

385

Breakdown ofcommitted
capitalbalance

FY2025PE fund income(in ¥100 million)
86

Funds
administeredby Kiraboshi
Capital

72
40

338
54

Total: 668
333
320

315

Funds
administeredby others

33

361

500

500

300

Externalcollaboration
fund

25

25

25

22

21

FY2025

FY202625

27
14

FY2023
2023年度FY20242024年度FY2025
2025年度FY2026
2026年度Funds
administeredby Kiraboshi
Capital

15

6

348

FY2026FY2023

FY2024

Funds
administeredby others

Externalcollaboration
fund©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

13

Corporate Customer Strategy 4: Equity Investment Business
In PE fund investments, the balance of funds administered by Kiraboshi Capital as GP increased
Providing hands-on support as a unified Group for start-ups and SMEs to increase their corporate value
Kiraboshi Bank PE fund investment amount (LP)Funds administered by Kiraboshi Capital(in ¥100 million)(in ¥100 million)
2,400

2,400

Investment
limit

652

672

320

338

700

700

Investment
limit

1,700
1,221
1,200

1,200

1,000

FY20242024年度FY2025
2025年度FY2026
2026年度Funds with investments as of March 2024
Breakdown of funds invested

Investment limit

Number of funds
6¥1.2 billion● Reconstruction and debt funds

5¥2.6 billion● Buyout fund66

¥39.4 billion● Others (infrastructure)6¥2.7 billion

9¥62.9 billion● Other (based outside Japan)

5¥6.4 billion● Others

22¥6.9 billion

Total 119 funds

Total¥122.1 billion● Others()

FY2023

FY2024FY2025

FY2026

Funds managed as of March 2024

● Venture fundKiraboshi Capital Co.,Ltd.
Kiraboshi Consulting
Co., Ltd.

Balance ofcommitted
capital (bookvalue)

Balance ofcommitted
capital (bookvalue)

668

FY2023
2023年度

385

366

Name

Description

Investment limit● Yume Kagayaki Fund 1

Buyout investment¥2.6 billion● Yume Habataki Fund 1

Start-up investment¥2.0 billion● A&KC Mezzanine Finance 1

Mezzanine finance¥22.5 billion● Tokyo Sparkle

Engagement investing¥20.0 billion● A&KC Medical No. 1

Medical fund¥3.0 billion● KCP Equity Assist No. 1

Equity investment (minority)¥8.0 billion● Yume Habataki Fund 2

Start-up investment¥4.0 billion● KCP Buyout No. 1

Buyout investment¥3.0 billion

8

Total
¥65.2 billion©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

14

Retail Customer Strategy 1
Strengthening the balance of assets under management and commission income from retail customers by establishing a sales
structure that integrates sales offices, headquarters (PB Promotion Division, WM Office, etc.), and Group companies (Kiraboshi
Life Design Securities, etc.)
UI Bank to promote personal loans in the future

Balance of assets under management

Commission income from retail customers(in ¥100 million)(in ¥100 million)

8,407

7,432
7,431
7,078

2,844

4,587

2023年度FY2023

7,736

7,368

3,023

3,230

4,345

4,506

2024年度FY2024

3,761

4,646

2025年度FY2025

Kiraboshi Life
Design Securities
Co., Ltd.

34
33
12

16

19

22

Kiraboshi Life
Design Securities
Co., Ltd.

Kiraboshi Bank

21

19

18

17

Kiraboshi Bank

2024年度FY20242025年度FY2025

2026年度FY2026

2026年度FY2026

Balance of mortgage loans

2023年度FY2023

Investment real estate loans*(in ¥100 million)
6,297

6,299

0

209

6,299
529

2,751

6,299
1,025

2,751
240

UI Bank

2,831

FY20236,090

FY20245,770

FY20255,274

FY2026

Kiraboshi
Bank

2,751

204
217
20

UI Bank

2,511

189
1,727

FY20242024年度FY2025
2025年度

210

216
217

189

720

2,111

FY2023
2023年度Consumption/specific-purpose(in ¥100 million)loans(in ¥100 million)
2,831

1,104

6,297

39

37

35

FY2026
2026年度

92

UI Bank

124

Kiraboshi
Bank

184

Kiraboshi
Bank* These are not included in loans for individuals (consumption) in the “Loanbalance at end of period” on p. 11 because they are business loans.

56

154

FY2023
2023年度FY20242024年度FY2025
2025年度FY2026
2026年度©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

15

Digital Strategy 1: Developing Services that Integrate Digital/Real and
Financial/Non-financial
Providing comprehensive services that integrate digital/real and financial/non-financial services in line with customer needs
Migrating transactions to digital services (UI Bank/Kiraboshi Tech) using Kiraboshi Bank’s real locations and in-person events

Digital services

Real contact points

Needs

Non-face-to-face, convenience (transactions not constrained by place ortime), functionality

Face-to-face, consultation, consulting

Customers

Retail and corporate customers who value the convenience andfunctionality of digital technology

Retail and corporate customers who value face-to-face consultation

Functions

Nationwide, 24 hours
a day

Instant and easy

Non-financial
integrations

Individual consultation service

Financial[Digital services]
UI Bank Co., Ltd.
Kiraboshi Tech, Inc.

Digital[Real contact points]
Kiraboshi Bank, Ltd.
Kiraboshi Consulting Co., Ltd.

Real

Utilizing Kiraboshi Bank’s real
locationsNonfinancial* UI Bank and Kiraboshi Tech services utilize Kiraboshi Bank’s real locations©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

16

Digital Strategy 2: Developing Comprehensive Services that Integrate Financial/Nonfinancial
Provide BaaS financial services in collaboration with regional business partners to roll out comprehensive services
integrating financial/non-financial and that help resolve social issues

Expanding collaboration with businesses in otherindustries

Providing lifestyle services (BaaS) integrating
financial/non-financial elements to businesses indifferent industries

Kiraboshi Group Digital Platform

Community-based business partners

Loan
Deposits/foreignexchange

PointsAssetmanagement

Financial
functionsCredit/debit
cards

Embeddedfinancial
functions(BaaS)

Kiraboshi Network

Multi-industry network

Infrastructure

RetailConstruction
businesses

Health care

Serviceproviders

Municipality

Life/non-life
insurance

LaLaPay Plus(wallet)Integrated application of Group services

Local business

Financial
functionsEmbeddingfinancial
functionsApps forbusinesses

Payment, loan, and other financial functions
embedded in business partners’ apps

* BaaS (Banking as a Service): Refers to a non-financial business entity providing financial services integrated with its own services by linking to a bank’s API.
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

17

Digital Strategy 3: System and Key Measures to Promote Digital Strategy
Service delivery system integrating digital/real elements (digital-contact customers can also consult face-to-face utilizing Kiraboshi Bank locations)
Service delivery system integrating financial/non-financial elements (improved usability of UI Bank apps, launch of BaaS offering)Group DX promotion structure (for greater business productivity and optimal personnel allocation)

Roadmap for system development

FY2024FY2025

FY2026

Flexible support throughcombined digital and realchannels

Promoting the digital shift
Business
services

Upgrading consultation
functions at branches (Kiraboshi
Bank)

Strengthening face-to-faceconsultation/consulting

Corporate deposit
accounts (UI Bank)

Providing high-quality services
integrating financial/nonfinancial elements

Launch of BaaS offering
Launch of new loan support system(linked to CRM system)

Evolution/DX
promotion

Increasing productivity andcreating sales opportunities

Center/system unification, CRM system
integration
CRM Group company integration(ad-hoc from FY2023 onward)

Desired state

Providing optimal solutions
Providing high value-added
services as a unified Group

Data marketing measures using CRM

Cultivate and enhance talent capable of creating and promoting digital business, enhance developer pool, expand development
in-sourcing

In-sourcing development
Maximizing corporate value©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

18

Digital Strategy 4: UI Bank Strategy
Seeking to add active users by shifting transactions from Kiraboshi Bank to UI Bank and acquiring new customers
through BaaS deployment, etc.

Number of UI Bank customers

BaaS customers
300,000
For details, see p. 17,“Digital Strategy ②”

New customers
150,000

New customers
70,000Transition from
Kiraboshi Bank
30,000

FY2023

Transition from
Kiraboshi Bank *250,000

FY2026

Account holders: 112,000

Account holders: 700,000・Migrated from Kiraboshi Bank:
36,000・New: 75,000・Migrated from Kiraboshi Bank: 250,000
・New: 150,000
・BaaS: 300,000* Shifting Kiraboshi Bank customers to UI Bank through in-branch and workplace activities at Kiraboshi Bank sales offices©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

19

Digital Strategy 5: UI Bank Integrated App
Providing a one-stop app for Group services integrating the Group’s retail financial services

Providing financial and non-financial services integrated into everyday life

Customer

ChannelServices

Brand concept“Growth for my assets”*1

UI Bank customers

Deposits/foreign exchange

Asset management
instruments

Kiraboshi Bank customers

Life/non-life insurance
products*2
Kiraboshi Tech customers
One-stop channel
for Group
customers

Integration ofGroup financial
services

Kiraboshi Life Design
Securities customers

Personal loans
Secured loans*2

LaLaPay Plus*2(wallet)Kiraboshi JCB customers

Credit/debit cards*2
Providing services tooperating company
customers

BaaS partner customers

Providing services
from Fintech
companies andothersNon-financial services*1 “My assets”: A generic term for a variety of assets necessary for each individual, including not only tangible assets such as money and a house, but also intangible assets such as memories and experiences needed to become theperson they want to be*2 Scheduled for phased launch from FY2024©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

20

Digital Strategy 6: UI Bank Management Strategy
Retail tier is handled digitally, centered on UI Bank; going forward, corporate client transactions will be considered utilizing
partnerships with other industries

Going forward, the UI Bank will lead promotion of personal loans, projecting loan balance of approx. ¥220 billion in
FY2026
Desired state[Individuals]
Mainly financial assets: Under ¥50 million
Mortgage loans, investment loans, unsecured
loans[Corporations]
Mainly annual sales of less than ¥300 million
Small business lending, factoring

UI Bank Co., Ltd.

[Current status: Annual amountexecuted by Kiraboshi Bank]

Kiraboshi Bank
customers

Shifting transactions

Mortgage loans: ¥56.0 billion
Investment real estate loans:¥41.1 billion
Unsecured loan: ¥6.6 billion

UI deposit/loan balance

Expanding digital retail

Loan interest income(in ¥100 million)(in ¥100 million)
Above: Interest income on loans for Kiraboshi Bank

Left: Deposit balance
7,800
Right: Loan balance

7,000

Below: Interest income on loans for UI Bank customers

28

6,000
Individuals (fromKiraboshi Bank)

1,306
470
4,004

2
3,400

4,013

4,090

33

2,222

2,900

30
Loans for Kiraboshi
Bank

27

26
13
2

FY2023

FY2024FY2025

FY20262023年度FY20232024年度FY20242025年度FY2025

2026年度FY2026©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

21

Digital Strategy 7: Kiraboshi Tech
Increasing the number of attendance registrants for salary prepayment services to 900,000 in FY2026 to increase sales andsecure a pool of users for new services
Developing new services to offer to the user pool developed by the salary prepayment service
Providing platform services for workplaces, etc. using mobile payments

Number of salary prepayment
service registrants(in ten thousands of people)

Mobile payment platform services for workplaces

90

Digital expense
settlement

Cashless payment

8070

Cardless ATM
withdrawals

Digital incentives
64

Overseas
remittance*

Person-to-person
remittance

Payment collection
system*Bank accountrecharging

FY2023

FY2024FY2025

FY2026

Gig worker matching
service*Finance* Scheduled for service launch fromFY2024

Group synergies

2. Introducing Group company services to employees ofcompanies with prepayment contracts
3. Deploying Kiraboshi Tech services to corporate
customers of Kiraboshi BankTokyo Kiraboshi Financial Group

Serviceprovision

1. Providing Group company services to companies withprepayment (salary prepayment service) contracts

Employees

Service use

Companies withprepayment contracts
Service use

Employees©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

22

Branch Strategy
Streamlining branches according to regional characteristics, reducing number of locations from 105 to 85(in FY2026: 74 less locations vs. time of merger)
Number of locations

159
offices105
offices100
offices

Previous medium-termbusiness plan95
offices85
offices

Current medium-term business plan3
Sales
offices

159
105

FY2018 (time of merger)

FY202397

FY2024FY202513

Branches

72

Sales
offices

FY2026©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

23

Market Investment
Restructuring portfolio, mainly bonds, from a medium- to long-term perspective
Strengthening investment in Japanese and other government bonds, municipal bonds, etc. and securing carry income
mindful of RORA
Controlling interest rate risk by adapting allocations to each situation

Market environment

Securities duration/balance(in years)

Japan returns to a world with interest rates

6.7
4.5

The West shifts to a phase of rate cuts

Japanese
bonds

6.0

5.9

3.9
2.8

2.2

1.4

Assumption of economic recovery and solid
equity performance

Foreignbonds(in ¥100 million)

Rebound/growth11,60011,6002025年度FY2025

2026年度FY2026

PE funds, etc. 10,892

Investment policy

10,055Investment trusts
Stocks

9,227

9,600

8,558

Risk
category

Investment policy

Japanesebonds

Restructuring the portfolio while monitoringmonetary policy normalization trends, etc.

Foreignbonds

Restoring balances to a certain degree by
ascertaining the timing of a switch tointerest rate cuts, etc.

Stocks,etc.

Improve valuation gains/losses by buying
and selling with close monitoring of themarket environment

Foreignbonds

Japanesebonds

2018年度FY20182021年度FY20212022年度FY2022

2023年度FY20232024年度FY2024©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

24

Overseas Strategy
Connecting SMEs to overseas markets to resolve issues of business succession and expansion
Supporting overseas companies entering the Japanese market and contributing to the revitalization of TOKYO
Matching in the Southeast Asian market

Joint venturesubsidiaries
Investment

Matching support
・ Consulting forentering theJapanese market
・ Finance

Matching support

Growth/enhancement ofcorporate value

Royalties

Southeast Asiancompanies

Mature technology/service

Japanese SMEs

Japanese
subsidiaries ofoverseascompanies(Issues)・ Declining populationand shrinking market
・ Business successiondifficulties

Re-growth/enhancement ofcorporate value

Matching in the Japanese market

Investment
Machinery
manufacturing, agrifood/retail, etc.

Kiraboshi Bank, Ltd.
Kiraboshi Consulting
Co., Ltd.

Investment

Collaboration

Partner financial institutions, government
agencies, overseas funds, etc.
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

25

Start-up Support
Support for commercialization, growth, and overseas expansion of domestic startups; support for overseas start-ups entering theJapanese market
Supporting new business creation (open innovation) with start-ups and large/medium-sized companies

Start-up support

Start-up support measures

Providing problem-solving and needs-based support by leveraging our network of
domestic/international partners and large/medium-sized companies

Illustration of support by growth stage

Domestic/international partners

Seed

Venture capitals, municipalities,
universities, etc.

Entering
overseas/Japanesemarkets

Start-ups

Financial support, BM mediation

MiddleLate

Commercialization
supportCollaboration
Kiraboshi

Early

Large/mediumsized companies

Open innovation support

Financial support

Specific efforts to support start-ups
Growth support● Support for businessexpansion● Cultivation of start-ups● Identification ofpromising start-ups
・ Monthly Kiraboshi Pitch
events・ Cooperation and participationin other companies’ pitch
events・ Networking with start-up
supporters

・ Implementation of the
KicSpace Accelerator
Program・ Reverse pitching with large
corporations*・ Business matching

Kiraboshi Bank

Kiraboshi Capital* Reverse pitching with large
corporations: Pitching to startups or large/medium-sizedcompanies for the purpose ofsolving problems or developing
new businesses for large
companies©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

26

Giving our all, for TOKYO.

3. Corporate Value Enhancement Measures,
Capital Policy©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Corporate Value Enhancement Measures 1: Financial Management
ROE for FY2023 improved to 7.41%, but PBR is 0.47x
Reducing the cost of equity by disclosing appropriate growth strategies and enhancing dialogue with the market

Balanced improvement in ROE, RORA, and financial leverage to ensure a healthy capital state after preferred share redemption

Breakdown of factors driving higher PBR
ROE increase

＝

PBR

ROE

PER increase×PER

1 / (cost of equity – earnings growth rate)

Breakdown of factors driving higher ROE
Risk-weighted assets

RORA increase

＝

ROE

RORA

×

(Net assets at the beginning of the period + net
assets at the end of the period) / 2

Financial leverage

Disclosing growth strategies, etc.
Enhancing dialogue with the stock market
Reducing cost of equity

Balance between profitability, efficiency, andsoundness
Clearly indicating preferred share redemption
scenario
Ensuring healthy capital state after preferredshare redemption

Changes in PBR, ROE, and capital ratio
Ten years from now (medium- to long-term target)

9.05%

8.73%

8.25%
7.41%

0.26-foldincrease

High 7% range

1.37%
0.17-foldincrease

1.28％
FY20178.3%

FY20200.47-foldincrease
FY2023

FY2026

Capital ratio
10% or more

Enhancing Group profitability

ROE
10% or more

Providing solutions tomanagement issues involving
equity investments

PBR
1 time or more

Increasing fee and capital income
without relying on assets

FY2033©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

28

Corporate Value Enhancement Measures 2: Financial Management
During the period of the current medium-term business plan, promoting main bank relationship building for corporate and retailcustomers through appropriate risk-weighted asset control
Enhancing corporate value through 1. business portfolio evolution, 2. a strong management base, 3. risk-weighted asset
control, and 4. appropriate capital policy

Measures to improve RORA
・Improving RORA through replacement of loan assets and risk-weighted asset control, combined with promotion of transactions for main bank relationship building
Using solutions business by a unified Group to provide customers with high added value, with consultation as the starting point.

Corporate
Provide loans and equity financing that respond to the needs in business succession and business transfer. Improving hands-on support capabilities.

Individuals

Respond to diverse needs such as property management, property inheritance, and asset management, as well as promotion of main bank relationshipbuilding with retail customers.
Flexibly deploy branch office, digital, and remote consultation channels, and provide financial and non-financial services that match customers’ needs.

[Four growth strategies and efforts to strengthen
the management base]

RORA
Improving risk/return

ROE
Improving capital efficiency

Numerator: Net income

Denominator: Capital

1. Business portfolio evolution (see p. 30)
・ Optimal allocation of management resources
・ Ensuring appropriate balance of risk and return

Strengthening profitability: See 1. atright

Numerator: Net income

Cost control: See 2. at rightDenominator: Risk-weighted
assetsRisk-weighted asset control: See 3. atright

2. Expense control (see p. 31)
・ Reducing base costs
・ Allocating necessary DX investments andexpenses in growth areas
3. Risk-weighted asset control (see pp. 32–33)
・ Switch from low profitability to high profitability
assets・ Allocating assets to community revitalization
projects

Financialleverage
Ensuring soundness
Numerator: Risk-weighted
assetsRisk-weighted asset control: See 3. atrightEnhancing shareholder returns: See 4.
at right

Denominator: Capital
Optimal risk capital allocation: See 1. atright

4. Capital policy and enhancing shareholder
returns (see pp. 34–35)
・ Accumulating internal reserves, capital allocation
・ Striking a balance between capital soundness,shareholder returns, and preferred shareredemption©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

29

Corporate Value Enhancement Measures 3: Business Portfolio (Excluding Kiraboshi Bank)
Introducing a business valuation indicator reflecting the cost of equity: Business value = Profit–(Allocated risk capital × Cost ofequity)Building an optimal Group business portfolio through appropriate allocation of management resources
During the current medium-term business plan period, we will improve business value in the areas of digital, finance, andsolutions
Business value

Digital BusinessHigh

UI Bank Co., Ltd.
Kiraboshi Tech, Inc.
Financial Business

Financial BusinessTokyo Kiraboshi Lease, Inc.

Developing comprehensive
consulting services
Solutions Business
Promotion /Overseas
Business

Monetizing digitalstrategies

Kiraboshi Capital Co., Ltd.

DigitalBusiness

Kiraboshi Servicer Co., Ltd.

Kiraboshi Life Design Securities Co., Ltd.

Kiraboshi Insurance Agency CO., LTD.
Kiraboshi JCB Co., Ltd.
Kiraboshi Credit Guarantee Co., Ltd.

Risk capitalHigh

Yachiyo Credit Guarantee Co., Ltd.
Solutions Business
Kiraboshi Consulting Co., Ltd.

Kiraboshi System, Inc.
ITC Co., Ltd.
Kiraboshi business office service, Inc.
Promotion / Overseas Business
Be.Brave, Inc.
Kiraboshi Business Service Co., Ltd.
Kiraboshi Business Consulting Shanghai Co., Ltd.

FY2023

FY2026* Circle size represents size of profit by business (dashed circles indicate negative profit values)

StarBridge business consulting (Beijing) Co., Ltd.
KIRABOSHI BUSINESS CONSULTING VIETNAM
CO., Ltd.
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

30

Corporate Value Enhancement Measures 4: Cost Control
Core OHR will decline from 57.8% in FY2023 to the mid-50% range in FY2026 due to cost control
Personnel expenses are increasing due to higher base pay and other factors to build a strong revenue baseContinuing to improve branch efficiency, selectively addressing investments in necessary growth areas
Core OHR/costs(in ¥100 million, %)
60.4%
60.5%

Core
OHR

57.8%

57.7%

Middle-50%

Main change factors(FY2023 → FY2026)

531

530

525

524

Taxes

50

48

44

43

Nonpersonnel
expenses(Upfront
investment)

251
(42)

260
(27)

255
（17）

250

Personnel
expenses

(22)

229

222

226

230

FY2023

FY2024FY2025

FY2026

Nonpersonnel
expenses

Personnel
expenses

1. Business
management fees 2. Effects fromand branch
priorconsolidation
investment
costs
10
8

3. Increase in base 4. Decrease in
number ofpay, etc.
employees, etc.
24
23©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

31

Corporate Value Enhancement Measures 5: Risk-Weighted Asset Control (Overview)
Strengthening profitability by expanding fee business across the Group while controlling risk-weighted assets to improve RORA
Maintaining a certain level of amount executed and fees for LBO/other business financing, while distributing to othercompanies as well

FY2020–FY2023(in ¥100 million)

FY2024–FY2026(in ¥100 million)
RORA
0.67%
[+0.03%]PE funds+1,751Business loan
+3,297

PE funds＋394

Business loan
+6,085

Others+1,360RORA
0.64%[+0.52%]

RORA
0.64%

Others(658)
Securities, etc.
(167)

Due to higher risk weights fromBasel III, despite flat loanbalances

Securities, etc.
(573)

RORA
0.12%

44,12739,90439,904FY2023

FY202332,638FY2020

FY2026©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

32

Corporate Value Enhancement Measures 6: Risk-Weighted Asset Control (By Category)
Improving RORA and increasing corporate value through asset control by risk category
Non-recourse loans(*1) and LBO financing(*2) for SMEs shifting to proprietary transactions through main bank relationship building
Strengthening relationships by promoting complex transactions(*1) Non-recourse loans (NRL): Loans whose repayment source is solely the cash flow generated by aspecific business or asset(*2) LBO financing: Acquisition of companies and businesses using debt financing

RORA

Category 1
Low ROA, high RORA
Category 2

Maintaining a strategic focus on loans to SMEs,
unsecured/apartment loans, and housing loans,using complex transactions to build main bankrelationships and enhance overall profitability

Category 2
LBO financing

High ROA, low RORA (deterioration)

Category 3

Unsecured/apartmentloans

NRL and LBO have higher RORA absolutevalues, although RORA declines as risk
weighting increases

Fund equity
investment

Category 3

Category 1

High ROA, high RORA

Non-recourse loans

Fund equity investments improve RORA due tohigher capital gains exceeding the impact ofincreased risk weighting

Mortgageloans

Category 4

For SMEs
For large
corporations
Category 4

Low ROA, low RORA

FY2023* ROA: (Annual interest + Commission income) / Loan balance
RORA: (Annual interest + Commission income) / Risk-weighted assets* Circle size represents balance size

FY2026ROA

Reducing balances for some large corporationtransactions where there is no deeper businessexpected improves RORA

©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

33

Corporate Value Enhancement Measures 7: Basic Capital Policy
Basic policy: Ensure a “sound capital ratio” and maintain a strong balance between “use of capital to enhance profitability” and“return of profits to shareholders”
During the period of the current medium-term business plan, we are building up internal reserves to secure funds for redemptionof preferred shares
Sound capital ratio

Utilizing capital to improve profitability

Shareholder returns and preferred shareredemption scenarios

Accumulation of internal reserves
Appropriately allocating capital and optimizing businessportfolio

Controlling and replacing assets while being mindful of
RORA
Earning capital gains from hands-on support for equity
investees

Targeting payout ratio of around 20% after
redemption of preferred shares+2.10%(1.40%)+2.14%(0.24%)(0.85%)
Increase in riskweighted assets,etc. (equity
investments, etc.)

FG
consolidated
capital ratio
FG
consolidated
profitIncrease in riskweighted assets,Group
etc. (equity
investments, etc.) strategies / DXinvestments(0.33%)

Group strategies /DX investments(1.01%)

FG
consolidated
capital ratio

FG
consolidated
capital ratio

Dividends
8.73%
8.25%

FY2020(0.83%)FY2023FG
consolidated
profitDividends /preferred shareredemption
8.30%

FY2026©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

34

Capital Policy (Preferred Stock, Dividends, Cross-Shareholdings)
Established a policy for preferred shares in the current medium-term business plan
Our shareholder return policy targets a payout ratio of around 20% even after redemption of preferred shares, and securing acapital ratio of 8.3%. We aim to reduce cross-shareholdings by about 40%

Approach to preferred shares
After assessing the Company’s business environment and with consideration for the status of internal reserve accumulation and capitalratio,⚫ with respect to First Series Class I preferred shares (*1),
Redeem the shares over the period from FY2026 to FY2029, and aim to complete redemption⚫ with respect to Class II preferred shares (*2),
Redeem the shares in FY2026 and FY2028, and aim to complete redemption
Consider completing redemption ahead of schedule depending on market environment(*1) Sumitomo Mitsui Trust Bank, Limited ¥15 billion (*2) Tokyo Metropolitan Government ¥40 billion

Policy on shareholder returns
Basic policy is to make continuous and stable dividend payments. For the period covered by the current Medium-Term Business Plan
(FY2024–FY2026),
target payout ratio of around 20% even after redemption of preferred shares, and secure capital ratio of 8.3%

Reduction in cross-shareholdings (listed shares)
During the period covered by the current Medium-Term Business Plan (FY2024–FY2026), aim to reduce cross-shareholdings by around
40% in terms of book value(FY2023 book value balance approx. ¥15 billion → FY2026 book value balance approx. ¥9 billion)©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

35Giving our all, for TOKYO.

4. Measures for Further Efficiency Improvement
and Optimal Management Resource Allocation©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Resource Allocation: Management Resource Allocation
Conducting personnel allocation and human resources development in strategic areas. Improving productivity through optimal
allocation of management resources across the entire Group
Digital personnel: Increase pool by 300
Streamlining headcounts for FG and Kiraboshi Bank through branch reorganization, DX, etc.

FY2023
FG total(including subsidiaries)

Headcount

Kiraboshi
Bank total
Digitalpersonnel

Number of locations (Kiraboshi Bank)FY2026

2,860

2,750

(110)

2,438

2,265

(173)

360

660

+300

105 locations

85 locations

Reduce by
20 locations* Consolidating corporate customertransactions to 13 locations

Productivity (Kiraboshi Bank)(Gross core business profit per head)¥37 million¥42 million+¥4 million©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

37

Governance Structure and Organization: Evolving Group Business Management
The FG Corporate Planning Division is responsible for management resource allocation across the Group and IT governance(established within this division are the Financial Strategy Office, Public Relations Office, and IT Management Office)
The FG Sales Strategy Division formulates our Group-wide comprehensive solution strategy to meet diverse customer needs
The FG Risk Management Division manages risks across the Group (established within this division is the AML/CFT Office)Management Meeting[FG Organization Chart]

Digital Business

Financial Strategy OfficePublic Relations Office
IT Management Office

Customer Support Contact
Center
AML/CFT Office
Risk Management Office

Tokyo Metropolitan
Government Collaboration
Promotion OfficeBusiness Strategy
Division

Sales Strategy
Division

Digitalization Strategy
Division

Partnership Promotion
Division

Personnel Division

Hospitality Mind Office

Risk Management
Division

Secretarial Office

Corporate Planning
Division

1. UI Bank Co., Ltd.
2. Kiraboshi Tech, Inc.

Financial Business3. Tokyo Kiraboshi Lease, Inc.
4. Kiraboshi Capital Co., Ltd.
5. Kiraboshi Life Design Securities Co., Ltd.
6. Kiraboshi Servicer Co,. Ltd.
7. Kiraboshi Insurance Agency CO., LTD.
8. Kiraboshi JCB Co., Ltd.
9. Kiraboshi Credit Guarantee Co., Ltd.
10. Yachiyo Credit Guarantee Co., Ltd.

Solutions Business
11. Kiraboshi Consulting Co., Ltd.
12. Kiraboshi System, Inc.
13. ITC Co., Ltd.
14. Kiraboshi business office service, Inc.
Group Strategy OfficeSustainability Promotion OfficePublic Sector Collaboration
Promotion OfficeCompliance Office

IT Management Subcommittee
Chair
CIO
Secretariat IT Management OfficeMembers
Digitalization Strategy Division, Corporate Communication Division, Corporate Planning Division, Risk
Management Division
TopicsExploration of IT investment strategy for each FG company, exploration of system risk strategy for each FG
company

Promotion/Overseas Business
15. Be.Brave, Inc.
16. Kiraboshi Business Service Co., Ltd.
17. Kiraboshi Business Consulting Shanghai
Co., Ltd.
18. StarBridge business consulting (Beijing)Co., Ltd.
19. KIRABOSHI BUSINESS CONSULTING
VIETNAM Co., Ltd.
20. Tokyo Kiraboshi Financial Group, Inc.
21. Kiraboshi Bank, Ltd.
22. Sky Ocean Asset Management Co., Ltd.
22 Group companies©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

38

Governance Structure and Organization: Risk Compliance
Achieve sustainable profitability strengthening by transforming the income structure, enhance capital through strategic financial
controls, and achieve optimal allocation of management resources
Established a risk compliance management system to ensure business operations through properly managed risk-taking
Visualizing risks through meticulous attention to all Group businesses and quantitative and qualitative indicators, and efforts tomake management decisions based on the top risks

FG Management MeetingGroup CEORAS Management

ALM Committee
Group CFO

Risk Management Committee
Group CRO

Compliance Committee
Group CROIT Management Subcommittee
Group CIO

Financial controls[Liquidity/equity capital]

Integrated risk management[Credit, markets, operations]

Legal compliance/conduct risk
[Non-financial affairs, including
administration and customer protection]

IT governance management[Systemic]

Top risk assessment

RAF

Identifying conflicts

Qualitative evaluation: Prioritization Qualitative assessment
Group optimization
Quantitative evaluation: Risk amount Risk concentration, etc. Various risk drivers Pros andcons of action plans
Internal losses: Operational risk indicators

Bottom-up escalation forimportant matters

Operational management rooted in customer orientation
Assessing AML/CFT measures[Permanent management system of Group companies by the second-line risk management department (major items)](1) Integrated compliance program (2) Annual Group risk assessment system (3) Group KRI management (4) Integrated operational risk management(5) New business/new product screening system (6) Group whistleblowing management (7) Group legal oversight system

Digital Businesssubsidiaries

Financial Businesssubsidiaries

Solutions Businesssubsidiaries

Promotion/Overseas Businesssubsidiaries©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

39

Well-being and Human Capital Management 1
Creating a virtuous cycle that maximizes the value of human capital through serious well-being support of “Kiraboshibito”
employees
Realizing well-being for customers, communities, and employees by giving our all for TOKYO

Giving our all, for TOKYO.
ーEnhancement of corporate valueー

Accomplish the goals of contributing to society, seeking growth of theorganization, achieving self-fulfillment, and realizing one’s own
happiness

Contribution tosociety

A cycle that maximizes
the value of humancapitalGrowth of theｘcompany

Growth oforganization

Each employee enhances own value and contributes toimprovement of corporate value

Platform for job satisfaction

Strengthening ofindividuals

Own happiness
Self-fulfillment

Human resources development,
improvement of workplace environment
Enhancement of human capital

Fostering of corporate culture

Job satisfaction

Generating valuableaccomplishments

Kiraboshi Philosophy

Improvement of workplaceenvironment

Well-being of“Kiraboshibito”* “Kiraboshibito,” or “the people of Kiraboshi,” are people who have a spirit of healthy sharing of benefits between themselves and others, people who think and act based on a setof guidelines, and people who put the Kiraboshi Philosophy into practice©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

40

Well-being and Human Capital Management 2
Conducting regular surveys to visualize the well-being of each employee
Aiming to increase survey scores each year by fostering a corporate culture and improving the workplace environment

Specific efforts to achieve well-being

Well-being management KPICertain questions from our survey that are
particularly important for realizing well-being havebeen set as KPIs.

Platform for job satisfaction

Strengtheningof individuals

Conducting regular surveys

Spreading purpose

Fostering of corporate
cultureCreating dialogue
opportunities

Promoting diversity
1-on-1 meetings

360-degree survey training

Improvement of
workplaceenvironment

Helping employees takechildcare leave

Health checkups

Encouraging employees totake paid leave

Updating disability
insurance

Encouraging shareholding
association membership

Aiming to increase survey scoreseach year● Elements of well-being:
PERMA
P

Positive Emotion

Positivity

E

Engagement

Focus on work

R

Relationships

Strong interpersonal
relationships

M

MeaningFeeling meaning inworkAAccomplishment

Tangible growth©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

41

Well-being and Human Capital Management 3
Boosting initiatives for stronger individuals to cultivate professional personnel capable of enhancing their own value andhelping to enhance corporate value
Establishing a system capable of recruiting, training, and deploying professional personnel in each field, and actively investingin human resources development

Initiatives for stronger individuals
Recruitment

Development

Active recruitment of professional
personnel
Basic Stage

Strategic assignment to specialized
departments, internal and external training

Professional Career I

Management Career / Professional Career II

Desire to become
management personnel

Management
personnel

Director

Officer* Officer candidate
・Expansion of succession plan

・ Gaining experience in otherindustries through external
dispatchRapid
mobilization

Basic StageNew joiners

Desire to become
professional personnel

Staff (routine
operations)

Strategy director

Professional personnel

DigitalPrivate banking

Corporate finance/businessrestructuring

Consulting

・ Continuing midcareer
recruitment

・ Dispatching toexternalorganizations* Specialist with salary/benefits
like an officer

・ On-the-job training inspecialized
departments©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

42Giving our all, for TOKYO.

5. Sustainability Initiatives©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

Sustainability Initiatives 1: Roadmap
To enhance the sustainability of local communities, we will enhance our structures and carry out Group-wide initiatives to solve
social issues
During the current medium-term business plan period, we will continue our efforts to further support resolution of social issues

FY2020

FY2021

FY2022

FY2023

FY2024–FY2026
Medium-termbusiness plan period

Established Group Chief
Sustainability Officer(CSuO) position

Structures
Expressed support for
TCFD recommendations

Formulated
Sustainability Policy /Environmental Policy
EstablishedSustainability Promotion
OfficeLaunched sustainablefinance transactions【E】
Environment【E】
・Scope1・2
Strengthening
reduction initiatives
・Scope3
Supporting individualcompany initiatives

Establishedenvironment-related
investment and loan
targetSigned agreement with theTokyo Metropolitan
Government for vitalizationof sustainable financeLaunched the Kiraboshi
Sustainability-Linked Loans

Issued Scope 1 and 2
carbon neutrality
declaration

Participated in the GX
League【G】
・ Enhancing corporate
value

Initiatives for local community sustainability【S】
Social【G】
Governance

Provided a digitalplatform

Provided financial
support for businesssuccession/transfer
needs

【S】
・ Contributing to local
revitalization

Providedfinancing/hands-on
support for start-ups

Initiatives to support
business restructuring

Introduced Group Chief
Officer (CxO) system

Introduced restricted stockcompensation plan

Purpose“Giving our all, forTOKYO” initiative©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

44

Sustainability Initiatives 2: [E] Environment
The Group is committed to becoming carbon neutral in 2030 for Scope 1 and 2 as part of its materiality in addressing theenvironment and climate change
Supporting customers’ initiatives in Scope 3 and providing environmental finance as part of Group financial functions

FY2022

FY2023

FY2024FY2025

FY2026

FY2030Medium-termbusiness plan period
Scope 1, 2*1

62.4%
reduction*2

Carrying out reduction measures to become carbon neutral
Carrying out reduction measures to become carbon neutral(80% cumulative reduction by FY2026)

Selection of key sectors (strengthening engagement
and supporting reduction efforts)

Scope 3*3

Sustainablefinance (for theenvironment)¥50 billion executed (FY2022 to
FY2023)

TNFD*4*1: Scope 1: A business’s direct greenhouse gas emissions from own activities
Scope 2: Indirect emissions from the use of electricity, heat, steam, etc. supplied byother companies¥150 billion cumulative by FY2026

Support for/disclosure based on TNFD
recommendations

100% cumulative
reduction by FY2030

Strengthening initiatives to address
financed emissions¥200 billion cumulative by
FY2030Enhancing disclosure content*3: Scope 3: Indirect emissions other than Scope 1 and 2 from business activities*4: The Taskforce on Nature-related Financial Disclosures*2: Base year for Scope 1 and 2 reductions is 2013
©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

45

Sustainability Initiatives 3: [S] Social
The Group is committed to providing financial and non-financial solutions as part of its materiality in resolving issues faced by
local communities

Business succession
・ Number of businesssuccession collaborations
FY2022: 304 cases
FY2023: 313 cases

・ Number of completed
M&A transactions
FY2022: 12 cases
FY2023: 14 cases

Start-up Support

Contributing to solving issues inlocal communities

・ Loans for founding companies
FY2022: 978 loans, ¥20.8 billion
FY2023: 898 loans, ¥19.5 billion
・ Held pitch events at KicSpace HANEDA(24 events from FY2022 to FY2023)
Participants: 110 companies, 1,417 individuals (in person andonline)Digital platform・ Roll out digital strategy utilizing UI Bank and Kiraboshi Tech

Industry–government–academia–
finance network
Tokyo Metropolitan Government
・ Support for companies in cooperation with government(DX, business succession, environment, women’s
empowerment, etc.)
・ Providing support at start-up locations
・ Participation in start-up events (City-Tech.Tokyo)
・ Co-exhibiting at Slush 2023
(the largest start-up event in Scandinavia)

・ Number of business improvement support projects with
HQ/sales office cooperation
FY2022: 108 projects
FY2023: 127 projects
・ Supporting companies reaching the end of their COVID-19
zero-interest/zero-collateral loan grace period(Supporting formulation of business improvement plans, etc.)

Tokyo Kiraboshi Financial Group
Kiraboshi Bank
Private-sector business・ Holding hands-on robotics classes and financial education
seminars (Kawasaki Heavy Industries)
・ Supporting collaboration between start-ups, large corporations,and other industries
・ Initiatives for ICT/SDGs consulting

Local public entities
・Participation in regional energy companies (Kawasaki City)・ Supporting IP utilization (Minato City, Toshima City, Ota City,
Kawasaki City)・ Attracting government administration-related facilities to
Sagamihara Center Building (Sagamihara City)・ Conducting financial education (Machida City)・ Disseminating tourism information/hosting of events
showcasing traditional performing arts (Minato City)・ Co-hosting SDGs seminars and dispatching lecturers (MinatoCity)・ Hosting Toshima Business Support Seminars (Toshima City)・ Hosting joint new joiner ceremonies/training sessions (Ayase
City)

Business restructuring

Universities
Partner financial institutions
Hosting vacant house countermeasure seminars/long-term andend-of-life care events with Sumitomo Mitsui Trust Bank as partof ultra-low birth rate/aging population measures

・ Providing donations and support(For regional development efforts by three local villages in the
Okutama area and Chuo University)
・ Endowed courses(Chuo University, Aoyama Gakuin University, Tokyo
Metropolitan University, Azabu University)
・ Support for idea pitch contests (University of ElectroCommunications)©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

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Sustainability Initiatives 4: [G] Governance
The Group is working to enhance corporate value by further upgrading its governance structure

Share of outside/female officers
Board of Directors
Outsidemembers: 3
Of which,
1 female member

Directors
8 people
Insidemembers: 5

Audit & Supervisory Board
Outsidemembers: 2
Of which,
2 femalemembers

Audit &
Supervisory
Board Members
4 people

Nomination and Remuneration Council

Insidemembers: 2

Outsidemembers: 2
Of which,
1 female member

Directors
3 people

Insidemembers: 1

Chair: Appointed by Outside Directors
Ensuring independence and diversity

Ratio of outside officers

Ratio of female officers

5/12 (41.6%)

3/12 (25.0%)

Self-evaluation of Board of Directors effectivenessAll Directors and Audit & Supervisory Board Members who are members of the Board of Directors
are asked to complete a questionnaire regarding the composition, operation, discussion, andmonitoring functions of the Board of Directors (individual interviews by a third-party organization
are also conducted for some of these officers), and the results are discussed and evaluated by the
Board of Directors based on the analysis by the third-party organization.

Director remuneration
The remuneration of the Group’s Directors (excluding Outside Directors) is composed of fixed
remuneration (monthly remuneration) as base remuneration, in addition to a combination of sharebased remuneration using a share trust and cash remuneration to function as a healthy incentive
aimed at sustainable growth of the Group. Share-based remuneration is linked to medium- to longterm performance and uses a share delivery trust, whereas cash remuneration is linked to shortterm performance.

Action policy

Operation of the Board of
Directors

Recognizing issues(discussion at the Board of
Directors)

Effectiveness evaluation[Remuneration types]
Fixed remuneration(monthly
remuneration)[Target remuneration ratios]Baseremuneration

Paid according to position, etc.

Cashremuneration

Linked to short-term targets in themedium-term business plan, etc.

Share-based
remuneration

Linked to medium- and long-term targets
in the medium-term business plan, etc.

Performance-linked
remuneration

Performancelinked
remuneration(share-based
remuneration)
15%–20%
Performancelinked
remuneration(cash
remuneration)
15%

Fixed
remuneration(monthly
remuneration)
65–70%©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

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Appendix: Materiality Initiatives: List of KPIs
Social issues to be addressed and our responses

Support for SMEs in improving theirbusiness value

KPIs to achieve management targets(Cumulative targets for the period from FY2024 to FY2026)

Financial advice provided: 30 cases (M&A)
Financing for business succession and restructuring: 120 projects/¥180 billion

Realization of asustainable society

Support for SMEs in theirdecarbonization efforts

Scope 1 & 2: 80% reduction by the end of FY2026

Support for medical institutions(management)

Sustainable finance executed: ¥100 billion

Support for the elderly and child raising
generation

Customers with financial assets of ¥50+ million: 4,000Group-wide contribution to regional
development

Factoring for small, medium and micro businesses: ¥5 billion
Start-up support measures: 100 actions (new business creation, commercialization support, etc.)

Creation of new social
values and industries

Start-up support

Start-up companies supported for overseas expansion: 30
Japanese companies supported for overseas expansion: 300

Support for overseas expansion fromthe TOKYO market

Responses to issues
accompanying progressin digitalization

Overseas companies supported for expansion to Tokyo: 30

Delivery of new financial functions
Social infrastructure (security andsafety)UI Bank: 700,000 depositing customers / ¥780 billion in deposits

Financial services support for the elderly
and young people

UI Bank: 6,000 loan customers / ¥220 billion in loans

Ensuring foreigners have access tofinancial services

UI Bank: Annual revenue with BaaS customers: ¥850 million (partnership with Kiraboshi Tech)©Tokyo Kiraboshi Financial Group, inc. All Rights Reserved.

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