Tokyo Kiraboshi Financial Group

Results Briefing for the First Half of the
Fiscal Year Ending March 31, 2023

November 29, 2022

Contents
Highlights of Todayʼs Briefing

P.3

Status of Progress on the Medium-Term Business Plan

P.4

Tokyo Kiraboshi FG Results for the First Half of the Fiscal
Year Ending March 31, 2023

Corporate Customer Strategy ① (Loans)

P.21

Corporate Customer strategy ② (Commission Income from
Corporate Customers)

P.22

Corporate Customer Strategy ③ (Investment in Private Equity
Funds)

P.23

Corporate Customer Strategy ④ (Kiraboshi Capital)

P.24

Corporate Customer Strategy ⑤ (Trust Business, Medical,
Collaboration with Other Banks)

P.25

Retail Customer Strategy

P.26

Expenses

P.27

Improvement of Branch Operation Efficiency

P.28
P.29

Summary of Business Results for the First Half of the Fiscal YearEnding March 31, 2023

P.6

Factors Affecting Net Income (Kiraboshi Bank), Excluding Special
Factors

P.7

Profit from Customer Business (Kiraboshi Bank)

P.8

Loans and Trust Assets

P.９

Balance of Deposits and Assets under Management (Kiraboshi Bank+ UI Bank + KLD Securities)

P.10

Shareholder Returns (Dividend Policy)

Securities

P.11

The Kiraboshi Groupʼs Actions for the Future

Securities (Foreign Securities)

P.12

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

P.13

Capital Ratio/Core OHR/ROE<Reference> UI Bank Results

Initiatives to Support Start-ups

P.31

Initiatives toward Open Innovation

P.32

P.14

Initiatives in Overseas Support

P.33

P.15

Kiraboshi Group's Digital Strategy – Related Topics

P.34

Digital Bank (UI Bank)

P.35

Kiraboshi Tech, Inc. (Maekyu/LaLaPay)

P.36

Reconstruction of Sales System Using Data and CRM

P.37

Digital-based, Tokyo-based Platform Concept ①

P.38

Digital-based, Tokyo-based Platform Concept ②

P.39

Sustainability Initiatives ①

P.40

Sustainability Initiatives ②

P.41

Progress on the Medium-Term Business Plan
Overview of the Tokyo Kiraboshi Financial Group

P.17

Management Base of Kiraboshi GroupP.18

Financial Targets under the Medium-Term Business Plan (KGIs)

P.19

Strategy of the Medium-Term Business Plan and Related Indicators(KPIs) ̶Initiatives to Address ESG/SDGs

P.20©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

2

Highlights of Todayʼs Briefing
１． Tokyo Kiraboshi FG Results for the First Half of the Fiscal Year Ending March 31, 2023
● Substantial year-on-year increase in profit from customer business due largely to increase in loan balance reflecting promotionof transactions for main bank relationship building and business financing activities, as well as rise in loan yield.
● Steady progress made in line with the FY2022 profit plan. Increase in FY2022 interim dividend following increase in FY2021
year-end dividend. (Interim dividend per share: ¥30 → ¥52.5)

２． Progress on the Medium-Term Business Plan
Previous Medium-Term Business Plan <Review>

Start-up☆Kiraboshi

Stronger sales strategy and structure
Main bank relationship project, businessfinancing, first-call, no-load features

Medium-Term Business Plan <Progress Report>

Vision of the future: Comprehensive service business that is also strong in financeBe a Tokyo-based platform owner that creates new values for customers
Existing Kiraboshi Bank Strategy

Reform of the Management Base and Business■ Increase loan balance(Strive to achieve the target balance in the 3rd yearof the Medium-Term Business Plan)■ Proactive approach to PE funds■ Increase the balance of investment trusts and fund
wraps

Digital-based platform concept

Improvement of management efficiency(systems integration, reconstruction of branch
network, improvement of headquarters efficiency)■ The thorough cost reduction measures implemented
under the previous Medium-Term Business Plan
have contributed to an increase in productivity andan improvement in OHR

Enhance the Group structure■ Structure the Group to be a comprehensive service
business that is also strong in finance

Enhance Group capacities toprovide non-face-to-face,non-financial services

３． The Kiraboshi Groupʼs Actions for the Future● Digital strategy (UI Bank, LaLaPay, reconstruction of sales system that uses data and CRM)
● Tokyo-based platform concept● Support for overseas expansion● Start-up, open innovation● Sustainability Initiatives©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

3

Status of Progress on the Medium-Term Business Plan
<Achievement level: ◎...Surpassed; 〇...Achieved or nearly achieved;△...More work needed>
2022/3＜Results＞

2023/3＜Plan＞

2022/9＜Results＞

Achievement
rate <orvariance>(Monetary unit: ¥100 million)① ROE <consolidated>② Core OHR <Kiraboshi Bank nonconsolidated>

5.0%

5.4%

＜＋0.4%＞

65.3%

59.8%

51.3%

＜(8.5%)＞

514

485

250

③ Net income <consolidated>④ Profit from customer business <Kiraboshi
Bank non-consolidated>⑤ Contribution of subsidiaries to consolidated
income <consolidated>⑥ Capital ratio <consolidated>

2023/3＜Plan＞

5.7%[Ref] Expenses (of which, non-personnel
expenses)

51%

237

203

117

57%

181

195

86

44%

126

205

85

1.2

4

(9)

8.4%

8.3%

8.4%

Excluding special factors

41%

Excluding special factors

Financial Targets (KGIs)＜＋0.1%＞

2022/9 Achievement＜Results＞
rate <orvariance>

Achievement
level

24/3
＜Plan＞

5.0%

5.4%＜＋0.4%＞

◎

5.9%

59.8%

59.2%

＜(0.6%)＞

〇

57.3%

485

250

51%

-

467

203

117

57%

-

205

160

86

53%

〇

205

85

4

(9)

8.3%

8.4%

41%
<+0.1%>

200
*1

234

△ *2

23

〇

〇

8.3%

*1: With good progress made against the initial plan, the full-year plan will likely be achieved owing to increases in interest on loans and discount and in commission income from corporate customers in the third and fourth quarters*2: Losses were recorded due partly to upfront investment in new products and services at UI Bank and early recognition of impairment losses on software at Kiraboshi Tech

Medium-Term Business Plan KPIs

<Achievement level: ◎...Surpassed; 〇... Achieved or nearly achieved; △...More work needed>

2021/3＜Results＞① Branch strategy

2022/3＜Results＞

Offices for corporate and retail customers, andoffices specializing in corporate customers

91 offices

50 offices

Retail-focused branches

20 offices

56 offices

2022/9＜Results＞*3<Rate ofprogress>

Achievementlevel2024/3＜Plan＞

49 offices-〇

54 offices

55 offices-〇

34 offices¥36 million

119%¥32 million¥25 million¥29 million

Number of transactions with business owners-+1,780+2,421

242%◎◎

Balance of transactions with business owners-+¥17.9 billion¥27.2 billion

54%〇¥50.0 billion

Kiraboshi Package (*)-

27,10734,214

57%

〇

④ DX

Internet banking users

76,000 users

151,000 users

209,000 users

52%

〇

-

+809

+1,027

171%

◎

600

⑤ Corporate
customerstrategy

Number of loans to customers with main bankrelationship having annual sales of ¥300 million
or moreAmount of loans to customers with main bankrelationship having annual sales of ¥300 million
or moreNumber of business succession support
customers
Number of medical transaction support
customers

60,000400,000
users-+¥300.0 billion+¥457.7 billion

76%◎¥600.0 billion

-

388

508

50%

〇

1,000

-

210

292

73%

◎

400

② Productivity③ Life plan support
business

Gross core business profit per head(*) Kiraboshi Package: Products and services mainly to address property management and property succession needsin the older adult segment

1,000*3: Figures are annualized based on actual results for the first half ended Sep. 30, 2022
©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

4Tokyo Kiraboshi FG
Results for the First Half of the Fiscal YearEnding March 31, 2023

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

5

Summary of Business Results for the First Half of the Fiscal YearEnding March 31, 2023
* For signs used in year-on-year comparison, “+” indicatesincrease in income, “( )” indicates decrease in income

Kiraboshi Bank results (non-consolidated)②

2023/3(Actual)Results for the first half④①

2021/9(Planned)③(¥100 million)(Ref) Results for the first half
excluding special factorsof which,
specialfactorsPlanexcludingspecialfactors⑤

2022/9(Actual)⑥ （＝⑤ － ①）

YoY

⑦ （＝⑤ / ②）⑧

Achievement
rate

Adjustment
for special
factors1

Gross core businessprofit

357

849

64

784

487

+129

57.3%

(98)

2

Net interest income

298

715

64

―

400

+101

―

(64)

―

275

+35

―

―

―

129

+70

―

*1 (64)―⑨＝⑤＋⑧

2022/9(Actual)⑩ （＝⑨ － ①） ⑪ （＝⑨ / ④）
YoY
Achievement rate

388

+31

49.5%

335

+36

―

275

+35

―

64

+5

―

(4)

(4)

―

53

(5)

―

3

Interest on loans anddiscounts

239

553

4

Interest on securities

59

187

5

Other interest income

(0)

(25)

―

―

(4)

(4)

―

58

133

―

―

87

+28

―

(257)

(485)

―

―

(250)

+7

―

―

(250)

+7

―

299

236

+137

65.0%

(98)

138

+38

46.1%

―

(4)

+26

―

+33

29

+26

―
―

6

Non-interest income

*1

―
64

7

Expenses

8

Net core business income

99

364

9

Credit-related costs

(30)

(60)

―

―

(4)

+26

―

10

Gains (losses) on bonds

3

10

―

―

(34)

(38)

―

Gains (losses) on stocks
and other securities
Other non-recurring profit(loss)

64

*2

(33)

*3

(0)

10

―

―

30

+30

―

(1)

(8)

―

―

(9)

(8)

―

―

(9)

(8)

13 Ordinary profit

69

315

250

217

+148

68.9%

(64)

152

+83

60.8%

14

Extraordinary profit (loss)

(0)

(1)

―

―

14

+14

―

―

14

+14

―

15

Income taxes

(22)

(76)

―

―

(58)

(35)

―

―

(58)

(35)

―

46

237

172

173

+126

72.9%

(64)

108

+62

62.8%

11
12

16 Net income

6464● Net core business income¥23.6 billion(+¥13.7 billion YoY)

●Ordinary profit¥21.7 billion(+¥14.8 billion YoY)●Net income¥17.3 billion(+¥12.6 billion YoY)●Net income
Actual figures exclusive ofspecial factors¥10.8 billion(+¥6.2 billion YoY)

(Note) For signs used in year-on-year comparison, “+” indicates increase in income, “( )” indicates decrease in income*1: Kiraboshi Bank received, as dividend, ¥6.4 billion that had been recorded in Tokyo Kiraboshi FGʼs books in the fiscal year ended March 31,
2022, as equity method profit (profit from sale of real estate by a subsidiary of an equity-method affiliate)*2: ¥3.3 billion is posted as gains from derivatives transactions associated with unwinding of asset swaps, etc.
*3: *2 is posted to this item as net amountTokyo Kiraboshi FG results (consolidated)①②

2021/92023/3(Actual)(Planned)(¥100 million)

Results for the first half③

Plan
Of which, excluding
specialspecialfactors
factors④
2022/9(Actual)

④－①
YoY

④/②

Achieveme
nt rate(Ref) Results for the first half
excluding special factors⑤
Adjustment
for special
factors⑥＝④＋⑤

2022/9(Actual)

⑥－①
YoY

⑥/③
Achievement
rate

1

Ordinary profit

73

278

35

243

132

+58

47.5%

―

132

+58

54. 3%

2

Profit attributable toowners of parent

47

195

35

160

86

+38

44.2%

―

86

+38

53. 9%●Profit attributable toowners of parent¥8.6 billion(+¥3.8 billion YoY)

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

6

Factors Affecting Net Income (Kiraboshi Bank), Excluding Special
Factors❶ Interest on loans+¥3.5 billion YoY due to increase in loan balance largely reflecting initiatives such as promotion of transactions❷ Interest and dividends on+¥0.5 billion YoY due notably to higher yields on securities❸ Non-interest income¥(0.5) billion YoY due in part to decrease in domestic remittance fees resulting from reduction in fund transfer❹ Expenses❺ Credit-related costs+¥0.7 billion YoY as a result notably of decrease in headcountfor main bank relationship building and business financing activities, as well as rise in loan yieldsecurities

charges and other causes

Credit-related costs improved by ¥2.6 billion YoY, as a result of provision from expanded application of the DCF
method (¥(0.6) billion), reversal of additional provision made in consideration of the impact of Russia–Ukraine
situation (+¥0.6 billion), and other ongoing efforts to enhance the credit management system❻ Gains (losses) on bonds,+¥2.6 billion YoY due largely to gain from sale that more than offset loss on sale specifically of foreign bonds❼ Extraordinary income (loss)

Extraordinary income was +¥1.4 billion YoY due to gain on return of assets from retirement benefit trust (+¥1.5
billion).
Income taxes were ¥(3.5) billion YoY reflecting posting of income taxes - deferred (¥(1.3) billion) in conjunction
with the return of assets from retirement benefit trust

stocks, and other securities/ Income taxes

Year-on-year changes(¥100 million)

Diff. b/w consolidated and non-consolidated
Net income

Interest on
securities

Net income
Interest on
loans❶
2021/9❷Otherinterest
incomeNon-interest
income❸Expenses❹Creditrelated
costs

❺

Other nonrecurring
Gains profit (loss)
Extraordinary(losses) on
income (loss)
bonds,/ Incomestocks, and
taxes
other
securities❼❻
2022/9(¥100 million)
Kiraboshi Bank (non-consolidated) net income

108Groupʼs consolidated net income [effects of start-up
deficit of newly established companies, etc.: ¥(1.9)
billion](10)

Elimination of internal transactions between
consolidated Group companies
Variance in gain on sale due to variance in book valueof securities, etc. (¥(1.3) billion)(12)

Tokyo Kiraboshi FG (consolidated) net income

86(Note) For signs before the numbers, “+” indicates increase in income, “( )” indicates decrease in income©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

7

Profit from Customer Business (Kiraboshi Bank)(¥100 million, %)Breakdown of factors

Profit from customer business

2021/92022/9YoY● As of Q2, loan balance (closing balance) was+¥106.3 billion compared to 2024/3 plan for averagebalance● Income from fees and commissions was ¥(0.2)
billion YoY due in part to decrease in domestic remittancefees resulting from reduction in fund transfer charges①

Loan balance (closing balance)

41,91145,407+3,496②

Loan-deposit yield difference

1.18

1.23

+0.05

③

55

52

(2)

255

247

+7

Number of projects in Q3 and beyond to increase due tocarry-over of business financing projects that were
expected in Q2
Expect to achieve the plan for profit from customer
business through increases in loan balance and⑤

Income from fees andcommissions
General and administrative
expenses(expenses + temporary
treatment of retirement benefit
expenses, etc.)
Profit from customer business（①×②×183/365＋③－④）

48

85

+36

commission income from corporate customers(¥100 million)

[234]
[205]

④

Loan balance / yield
Loan
yield

1.19

Loan-deposit
yield
1.17
difference

1.18
1.17

1.19

48

1.24

1.26

1.23

1.23

1.25

Closingbalance
45,407+¥106,300 million visa-vis 2024/3 plan for
average balance

2022/32023/32024/3(Q2, Q4) (Q2, Q4)(Q4)[Planned] [Planned]* Calculation method: (loan balance x loan and deposit rate margin) + income
from fees and commissions - general and administrative expenses[44,344][42,469]

Significantly
exceeding2023/3 plan for
average balance

39,08236,96314

2020/32021/3(Q2, Q4) (Q2, Q4)

1.24

41,167

85

1

1.21

Averagebalance
44,066126

8 9(¥100 million, %)2020/32021/32022/3(Averagebalance)(Averagebalance)(Averagebalance)2022/92023/3(Left: average [Planned]balance, right: (Averageclosing balance) balance)

2024/3[Planned](Averagebalance)* Plan for average balance is taken from the Medium-Term Business Plan
©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

8

Loans and Trust Assets
Growth in loan balance resulting largely from promotion of transactions for main bank relationship building andbusiness financing activities
Appropriate risk-taking leading to increase in high yield loans, while loan-deposit yield difference increased
1. Loan balance by type of customer (¥100 million)

３． Yield (%)

YoY

39,380
1,174

4,577

41,911
1,041

5,523

43,697
1,033

5,782

45,407[+3,496]969

Local governments

6,370

Medium- and largesized companies

1.24
1.18
1.17

26,32728,291

29,881

31,115

1.19
1.18

1.21
1.19

Loan yield
Yield difference

1.23

YoY

[+0.05percentage
points]

SMEs

0.01

0.01

0.01

0.01

Deposit yield

7,300

7,054

6,999

6,952

2021/32021/92022/32022/9Individuals

2021/339,380
464
5,623

484
5,776

43,697
526
5,800

551
5,773

33,29237,371

39,0822022/9YoY

45,407994

Others822

Kanagawa

414
35,6502022/3

4. Balance of trust assets (¥100 million)

2. Loan balance by region (¥100 million)

41,9112021/9

Tokyo

573

421

Public works costreceivable trusts,
etc.

283

152

170

174

[+420]

819
539

Real estate
management
trust

244

2021/32021/92022/32022/92021/32021/92022/32022/9©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

9Balance of Deposits and Assets under Management(Kiraboshi Bank + UI Bank + KLD Securities)
Robust accumulation of deposit balance at UI Bank (¥239.6 billion as of Sep. 30, 2022); + ¥198.2
billion YoY for the Group as a whole
1. Deposit balance by type of customer (Kiraboshi Bank+ UI Bank) (¥100 million)

3. Balance of assets under management by item
(Kiraboshi Bank + KLD) (¥100 million)* KLD: Kiraboshi Life Design Securities Co., Ltd.

YoY

53,461

51,934[+1,982]

50,03351,479

1,884

2,006

1,393

1,524

17,547

18,771

18,776

19,172 Corporate

2,396 UI Bank

1,362

Others

5,601

5,856

1,079

1,494

1,731

342

341

325

5,266

5,835
YoY

[+234]

1,856

*

ＫＬＤ

303
Public bonds

2,318
30,60130,70130,402

2,307

2,338

1,458

1,461

2,337

Insurance

30,368 Individuals
1,525

1,338 Investment
trusts2021/32021/92022/32022/9* UI Bank commenced operation in Jan. 2022

2021/3

2. Deposit balance by region (Kiraboshi Bank + UIBank) (¥100 million)
50,033827

10,606

38,5992021/351,47951,93453,461Others

861

1,258

1,638

10,877

11,027

11,352 Kanagawa

39,7392021/939,6492022/32021/92022/32022/9* Of which, structured bonds ¥4.1 billion

Downward impact of market valuation on balance[2022/3 → 2022/9]
Approx. ¥40.0 billion

4. Loan-to-deposit ratio / security-deposit ratio(Kiraboshi Bank) (¥100 million)
79.0

78.2

80.4

86.6

19.0

19.4

19.7

18.8

2021/32021/92022/32022/9Loan-to-deposit
ratio

40,470 Tokyo

2022/9Security-deposit
ratio©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

10

Securities
Securities balance was down ¥83.8 billion YoY partly due to sale of a portion of the
securities, and valuation loss on securities expanded reflecting higher interest rates
1. Securities balance / yield (¥100 million, %)

1.33

1.18

1.50

10,204

10,211

10,055

3,901

4,135

3,979

419

477

419

3,155

2,927

2,765

653

653

627

2,074

2,017

2,264

2.69
1.34
9,373

2. Valuation gain/loss on securities (¥100 million, %)[(838)]

3,838
474

Stocks

627
1,790

216

YoY
Availablefor-salesecurities

2,642

300

Yield excluding
dividends fromequity-method
affiliate (special
factor)Corporatebonds

Foreignsecurities
Investment
trusts
REITs
PE funds, etc.

Municipal bonds

100

118

61

Stocks

Bonds

64

54
121

Others62

Government
bonds

Bonds (6)

97
(19)

(161)
Stocks66

OthersStocks(137)

Foreign securities
Investment trusts
REITs
PE funds, etc.

Breakdown of “available-for-sale securities”(72)

Government
bonds
Municipal bonds
Corporate bonds

3,901

(17)

2021/3263

2,273

2021/9

4,135
372

2,149

2022/32022/9Held-tomaturity
bonds

3,979

3,838

408

424

PE funds, etc.

1,807

Foreignsecurities

2,1572021/3

684

827

834

REITs
Investment
trusts

679

856

585

771

2021/32021/92022/32022/92022/32022/9

6.7

6.3

Bonds

Held-to-maturity bonds

3. Duration (years)
6.1

757

2021/9Others

(6)

6.7

3.9

3.9

4.0

2.8

2021/32021/92022/32022/9Japanesebonds
Foreignbonds©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

11

Securities (Foreign Securities)
A loss of ¥6.4 billion was recorded from sale of approx. ¥44.0 billion of foreign bonds.
Moved forward with funding from relatively low-cost foreign currency deposits, through which it has been possible to avoid negative spread even as of the endof October.
Funding through foreign currency deposits, etc. will continue to be pursued in an effort to avoid negative spread.

2. Composition of investment and fundingin U.S. dollars

1. Foreign securities (¥100
million, year)

2022/6① Balance of foreign
securities held

Investment

HoH

2,273

2,149

2,157

[(350)]

1,145
USD million

1,807

Others〈2.30%〉
8%
(90)

100%

2021/32021/92022/3② Gains or losses on valuationof foreign securities

2022/9Floating
rate
bonds

HoH

〈2.70%〉
34%(387）[(28)]
(30)

21/3

(10)

21/9

(91)

22/3

(119)

50%

3.9

4.0

0%

2021/32021/92022/32022/9Funding

Investment

1,145
USD million

1,063
USD million

100%

Floating
rate
bonds

Funding frommarkets, etc.
〈1.68%〉
83%(949)〈4.48%〉
35%
(367)

50%

2023/3 (assumption)

Funding

Investment

1,063
USD million

911
USD million

Others〈3.76%〉
11%
(119)

Fixed
rate
bonds
〈1.51％〉
54%(575)

Foreigncurrency
deposits,
etc.
〈0.01%〉
17%
(195)

2.8

Simulation

2022/10〈1.48%〉
58%
(667)

22/9

③ Foreign bondduration

3.9

Fixed
rate
bonds

* Figures in < > indicate average yield on interest-bearing
liabilities, figures in ( ) indicate balance (USD million)

100%

1.96%

1.40%

〈5.44%〉
38%(350)

Funding frommarkets, etc.
〈4.9３％〉
53%
(448)

50%

Fixed
rate
bonds
(1.35%)
54%(495)

Foreigncurrency
deposits,
etc.
〈0.98％〉
31%(327)

Foreigncurrency
deposits,
etc.
〈1.51％〉
47%
(463)

0%

0%
Yield on interest- Yield on interestearning assets bearing liabilities

911
USD million

Others〈5.34%〉
7%(66)

Floating
rate
bonds

Funding frommarkets, etc.
〈3.57％〉
69%(736)

Funding

Yield on interest- Yield on interestearning assets bearing liabilities
2.79％* Reflects expected rise in U.S. interest rates (assuming U.S. federal funds rate of 5.0%)* Foreign currency deposits, etc. include yen converted to foreign currency

2.78％

Yield on interest- Yield on interestearning assets bearing liabilities
3.21％

3.21％

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

12

Problem Assets Subject to Disclosure under the Financial
Reconstruction Act and Credit-Related Costs
Ratio of problem assets subject to disclosure decreased significantly YoY due partly to an increase in normal assets and improvement
in some customersʼ credit category
Credit-related costs decreased substantially HoH as a result of continued efforts to enhance the credit management system
3. Coverage status of problem assets subject todisclosure (¥100 million, %)1. Value and ratio of problem assets subject todisclosure (¥100 million, %)[After partial direct write-offs]
2.50

1,002

2.88

2.70

1,222

1,194

69

84

[Before partial direct write-offs]
2.34

1,073
76

68
1,101

1,051

875

YoY

[(148)]

Substandard loans

Doubtful assets

Bankrupt assets

51

58

55

2021/32021/92022/32022/92022/91,052

930

Reserve for possible loan
losses247

222

Collaterals, guarantees, etc.

805

708

Total of substandard loans and
below

1,358

1,210

Coverage ratio

77.4%

76.8%

Covered amount

942

57

2021/9* Figures are after partial direct write-offs

2. Credit-related costs (¥100 million, %)2020/92021/92022/9

YoY

(48)

(30)

(4)

+26

* The “+” sign used in year-on-year comparison indicates an increase in income[Value and ratio of problem assets subject to disclosure]
Value of problem assets subject to disclosure decreased due partly to
improvement in some customersʼ credit category. Ratio of problem
assets subject to disclosure decreased by 0.5 percentage points YoY
due to increase in normal assets and decrease in problem assets
subject to disclosure.
[Credit-related costs]• ¥900 million of reversal in reserve for possible loan losses due todecline in the default rate
• Additional provision of ¥600 million due to expanded application of
the DCF method• ¥600 million in reversal of additional reserve made at the end of
previous fiscal year in consideration of the Russia–Ukraine situation
Combined with continued efforts to enhance the credit management
system, credit-related costs improved by ¥2.6 billion YoY.

● Significant cut down from ¥6.0 billion planned for 2023/3©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

13

Capital Ratio/Core OHR/ROE
Capital increased mainly due to accumulation of income, while capital ratio remained unchanged HoH due to an increase in risk-weighted
assets such as loans
Management indicators such as OHR and ROE continued to improve to a level on a par with the top-ranking regional banks; increase inannual dividend projected for the fiscal year ending March 31, 2023
1. Capital ratio (Tokyo Kiraboshi FG consolidated) (¥100
million, %)

5.7

8.74
8.30

34,572

32,6148.41

35,550

8.40

2,990

5.4

3.0

36,963

Riskweighted
assets

1.3

3.7

YoY

[+2,390]

2,870

2,852

3. ROE (Tokyo Kiraboshi FG consolidated) (%)

3,105

21/3

21/9

← ROE excluding equity method profit(special factor) that was recorded in
FG books in the previous fiscal year

22/3

22/9

4. Annual dividend per share (Tokyo Kiraboshi FG)

CapitalYoY[+234] *2021/32021/92022/347%2022/9Total
shareholder
return ratio

25%

1.75-fold increase individend

20%（*）

Interim dividend¥30 → ¥52.5

105 yen

2. Core OHR (Kiraboshi Bank) (%)
75 yen* Core OHR =

75.7

72.1

65.3

Expenses
Gross core business profit

59.2 Core OHR excluding
51.3

2021/32021/92022/3× 100

dividends fromequity method
affiliates (special
factor)2022/960 yen60 yen30 yen2020/32021/32022/3(Interim
dividend)

52.5 yen(Interim
dividend)

2022/3(forecast)* Total shareholder＝
return ratio

Total dividends paid + total value of share repurchases
Net income (FY2021, excluding equity method profit of ¥6.5 billion*)× 100* Equity method profit will be appropriated for investment in areas that contribute toimprovement of management efficiency, including DX promotion at Tokyo Kiraboshi FG©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

14

<Reference> UI Bank Results
Progress made in reaching out to the younger generation with which Kiraboshi Bankʼs transactional
relationship has been weak
Acquired users from all over Japan, centering on the Kanto region, excluding Tokyo and Kanagawa
Results of the first half ended September 30, 2022

Deposit balance¥239.6 billion

Ordinary savings account / Term deposit accountbreakdown

Balance

PlannedActual¥238.5 billion ¥239.6 billion

Breakdown ofdeposit balancevs plan+¥1.1 billion

PlannedActualvs plan¥15.8 billion¥(11.2 billion)

Term¥211.3 billion ¥223.7 billion
deposits+¥12.4 billion

Ordinarysavings¥27.0 billion

Distribution of accounts
by age group

Ordinarysavings
6.6%

Term
deposits
93.3%

New customers ¥132.1 billion (55.1%)
Kiraboshi Bank customers ¥107.4 billion (44.8%)

Ordinary savings account ¥15.8 billion [45,534 accounts]
Term deposit accounts ¥223.7 billion [89,035 accounts]

80 andabove:
0.8%
70s:
4.9%

60s:
18.4%
50s:
28.1％

Number of accounts
PlannedActualvs plan

86,000accounts

45,000accounts(40,000)
accounts

Distribution of accounts
by region

19 andbelow:
0.5%

Chugoku &Shikoku
2.8%

20s:
8.8%
30s:
16.3%
40s:
21.8%

Kyushu &Okinawa
3.5%

Kansai
8.4%
Hokuriku &Koshinetsu
2.7％
Tokai
4.9%

Hokkaido &Tohoku
3.7%

Tokyo
40.0%
Kanto
15.6%
Kanagawa
17.8%©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

15

Progress on the Medium-Term Business Plan

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

16

Overview of the Tokyo Kiraboshi Financial Group①(as of September 30, 2022)②(as of September 30, 2022)(Group companies)

Location ofhead office

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

Capital¥43.7 billion

Total assets¥6,492.8 billion

Company name(Group companies)

Location ofhead office

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

Capital¥27.5 billion

Consolidated
total assets¥6,536.1 billion

Business
description

Company name⑨

UI Bank Co., Ltd.

Banking businessBusiness
description⑩

Tokyo Kiraboshi Lease, Inc.

General leasing business③

Kiraboshi Credit Guarantee Co., Ltd.

Guarantee operations⑪

Kiraboshi System, Inc.

System processing
outsourcing④

Yachiyo Credit Guarantee Co., Ltd.

Guarantee operations⑫

Kiraboshi Consulting Co., Ltd.

Consulting⑤

Kiraboshi Business Service Co., Ltd.

Centralized administrative
services⑬

Kiraboshi JCB Co., Ltd.

Credit card business⑥

Kiraboshi Business Consulting Shanghai Co.,
Ltd.

Consulting⑭

Kiraboshi Tech, Inc.

Fintech services⑦

KIRABOSHI BUSINESSCONSULTING VIETNAM CO., Ltd

Consulting⑮

Kiraboshi Capital Co., Ltd.

Structuring andadministration of funds⑧

H.S.Servicer Co.,Ltd. (*2022.10.3-)

Claim management andcollection business⑯

Kiraboshi Life Design Securities Co., Ltd.

Securities business⑰

Kiraboshi business office service, Inc.

Payroll operations, etc.

⑱

Be.Brave, Inc.

Advertising planning andproduction business(Equity-method affiliate)⑲

Kiraboshi Insurance Agency CO., LTD.

Insurance agency business⑳

StarBridge business consulting (Beijing)
Co.,Ltd.

Consulting(Equity-method affiliate)㉑

Sky Ocean Asset Management Co., Ltd.

Commissioned investment
trust services©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

17

Management Base of Kiraboshi Group
Accelerate the promotion of transactions for main bank relationship building and business financing activities against the backdrop of arich market

Japan

Kiraboshi Bank Branch NetworkTokyo

SaitamaPopulation (estimate)

125.10 million(as of June 1, 2022)

14.01 million(as of June 1, 2022)(Proportion: approx.

11 %)

Chiba
Tokyo

Gross domestic product(nominal)
Tokyo gross municipal
product (nominal)¥535.5 trillion

Number of companies(Corporations +individuals)

3,608 thousandcompanies

418 thousandcompanies(Proportion: approx.

Number of offices

6,398 thousandcompanies

913 thousandcompanies(Proportion: approx.

¥548.3 trillion¥238.2 trillion(Proportion: approx.

(FY2020)(FY2019)(Proportion: approx.

21%)
Branch network(2016)(2019)

Balance of bank loans(Japanese banks)¥115.6 trillion(As of March 31, 2022)

11%)

Tokyo
Kanagawa
Saitama
Chiba
Total

Kanagawa(2016)

14%)

166 branches,
114 offices(2019)(As of March 31, 2022)

43%)

Number of Kiraboshi Bank customers with main banktransaction relationship
Number ofcompanies(denominator)

Balance of bank deposits(Japanese banks)¥924.0 trillion(As of March 31, 2022)¥328.3 trillion(As of March 31, 2022)(Proportion: approx.

35%)(Remarks) Ministry of Internal Affairs and Communications population estimates, Tokyo Metropolitan
Government population (estimates) of Tokyo, Cabinet Office Annual Report on National Accounts for 2020,
Tokyo Metropolitan Government Tokyo Statistical Yearbook (fiscal 2019), Ministry of Internal Affairs andCommunications 2019 Economic Census for Business Frame, 2016 Economic Census for Business Activity,
Bank of Japan Statistics: Deposits and Loans Market

124
38
3
1
166

Number of customers
with main bankrelationship

Share

Tokyo

231,678

7,075

3.05%

Kanagawa

78,938

2,832

3.58%

Total

310,616

9,907

3.18%

(Reference) Prepared based on a 2022 survey by TOKYO SHOKO RESEARCH, LTD.
(The number of companies is based on the TOKYO SHOKO RESEARCH, LTD. database)©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

18

Financial Targets under the Medium-Term Business Plan (KGIs)
ROE, core OHR, and capital ratio largely in line with the 2023/3 plan (Medium-Term Business Plan)
Profit from customer business is expected to achieve the plan with accumulation of commission income from corporate customers in thesecond half that includes income from business financing activities
2. Core OHR <Kiraboshi Bank non-consolidated>(¥100 million, %)1. ROE <FG consolidated> (%)
Planned

5.7

5.4

Planned

[5.9]

[5.9]

OHR excluding equity method profit(special factor) that was recorded in FG
books in the previous fiscal year

77.0 75.7[5.0]Medium-TermBusiness Plan

2.6

59.2

65.3

51.3

181

[195]

Planned[200][59.8][57.1]ROE excluding equity method profit(special factor) that was recorded in FG
books in the previous fiscal year

PlannedMedium-TermBusiness Plan

3.7

1.3

3. Net income <FG consolidated>(¥100 million)

Planned[57.3]

76

86

41

Planned2020/3 2021/3 2022/3 2022/9 2023/3 2024/3

2020/3 2021/3 2022/3 2022/9 2023/3 2024/3

2020/3

4. Profit from customer business <Kiraboshi Bank
non-consolidated> (¥100 million)

5. Contribution of subsidiaries to consolidated
income <FG consolidated> (¥100 million)

6. Capital ratio <FG consolidated> (%)

2022/32022/92023/32024/3

PlannedPlannedPlanned2021/3

[23]

[234]

[205]
11
Planned

126

3

1

8.6

8.7

2020/32021/3

[4]

8.4

8.4

2022/32022/9PlannedPlanned2023/32024/3

[8.3]

[8.3]

85
9

14

2020/32021/3(9)2022/32022/92023/32024/32020/32021/32022/32022/92024/32023/3 (planned)(planned) (planned)©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

19

Strategy of the Medium-Term Business Plan and Related Indicators(KPIs)
̶Initiatives to Address ESG/SDGs
Branch reorganization and improvement of operational efficiency to free up management resources and improve customer convenience, human resources development and self-fulfillment

Specific action items
Strategy (1)Branch strategy

Strategy (2)Business process
re-engineering

Strategy (3)Human resources
development

Focus items and SDG targets

Function-specific branches andtransformation of all branches tonext-generation branch setup

・ Strengthen face-to-face in-person proposal andconsulting services
・ Move to paperless, passbook-less, and cashless

Efficiency improvement in branch sales
operation and headquarters

・ Free up personnel for allocation to high-quality
face-to-face services

Gross core business profit per head)¥32 million

Human resources development andpersonnel system reform・ Realization of diverse work styles
・ Develop human resources, create happiness for all
officers and employees

Make use of external talents

Community
engagement

Shared value

Nextgeneration /Women

Related indicators (FY2023 targets)

Retail-focused branches
34 offices

Increase in mid-career hires

Related indicators (2022/9 actual)

Retail-focused branches

55 offices
Gross core business profit perhead 36.8 million
Mid-career hires: 64(Cumulative total fromFY2021)

Achievement
level

〇

◎
ー

Personnel allocation and enhancement of financial and competitive strengths for providing high-value-added services and contributing to the sustainable growth of society
Strategy (4)Resource allocation

DX

Centralization of routine and strategic
support functions

Establishment of Digital Bank
Improvement of customer convenience・ Implement optimal allocation of personnel freed up throughefficiency improvement
・ Provide added value by offering back-office and strategic support

Community
engagement

Shared value

Accountability /Transparency

・ “Fusion of face-to-face and non-face-to-face,” “financial and nonfinancial” services
・ Provide IT support for older adults, contribute to improving IT
literacy activities

KGIs (Please refer to p4)

KGIs (Please refer to p4)ーNumber of Internet banking
users
400,000 users

Number of Internet banking
users
200,000 users〇

Provision of high-value-added services by enhancing financial strength, and with invested management resources, contribution to the sustainable growth of society
Strategy (5)Services for thebusiness ownersegment andolder adultsegment

Strategy (6)Life plan support / asset management
Business targeted at the older adultsegment
Transactions with business owners,
inheritance, property management
Business succession
Business financing

Promote main bankrelationship building

Support for overseas expansion,business improvement, business start-up

Strategy (7)Collaboration in administrative policy
measures

Medical institutions

Enhancement ofcorporate
governance

Responses to novel coronavirus
Local medical activities

・ Provide services aligned to life stage/plan through goalbased approach
・ Kiraboshi Package – services that match to all life scenes

Community
engagement

Shared value

Environmental
protection

Increase in the outstanding balance ofassets under management of businessowner customers¥50.0 billion

・ Provide combined services encompassing corporate
management, business succession (inheritance), asset
management, and overseas strategy
・ Build main bank relationship through business feasibility
evaluation, take action against climate change risks

Customers with annual sales of ¥300 million
or more, and with main bank relationship
Number of loans: +600 customers
Financing to customers with main bankrelationship: +¥600 billion
Kiraboshi Package: 60,000 customers

・ Use funds to provide management support, andfinancing to medical institutions, social welfare
corporations, etc.
・ Engage in regional revitalization activities at various
locations, in collaboration with administrative organs,etc.

Establishment of chief sustainability
officer position
・ Enhance Group governance to respond to diverse
Revision of credit policy
customer needs
Established an environmentally andsocially friendly investment and loans policy

Increase in the number of businessowner customers with assets undermanagement
1,000

Business succession support: over 1,000
customers
Support to medical institutions: over 400
institutions

Accountability / Transparency

Increase in the number of business ownercustomers with assets under management

2,421

Increase in the outstanding balance ofassets under management of businessowner customers¥27.２ billion

Customers with annual sales of ¥300
million or more, and with main bankrelationship
Number of loans: +1,027 accounts
Loan amount: +¥457.7 billion
Kiraboshi Package:
34,000 customers
Business succession support:
508 customers
Support to medical institutions:292 institutions

◎
〇

◎
◎
〇
〇
〇

Achievement level of each indicator<◎...Surpassed; 〇... Achieved or nearly achieved; △...More workneeded>©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

20

Corporate Customer Strategy ① (Loans)Continued increase in loan balance largely through efforts in promoting transactions for main bank relationship building and businessfinancing activities

1. Average loan balance and yield (¥100 million, %)
1.19

1.18

1.24

1.21

Closingbalance
45,407

1.24

1.26

Planned[530 ]

PlannedPlannedAveragebalance
44,066

2. Interest on loans and discounts (¥100 million)[44,344][42,469]

441

463

498

275

41,16736,96339,082

2020/32021/3(Averagebalance)(Averagebalance)2022/3(Averagebalance)2022/9(Left: averagebalance, right:
closing balance)

Of which, balance of business financing

1.52

1.77

2.19

2.60

2023/3(Averagebalance)2024/3* Plan for average balance is takenfrom the Medium-Term Business Plan
Planned[1.87]

Planned2,821
697
Mezzanine

1,211
Mezzanine

41

10
687

1,170

2020/32021/33,469

2021/32022/32022/92023/3

Of which, interest on loans and discounts related to business financing

Planned[1.91][5,318 ]2024/3

Increase in interest on loans and discounts
related to business financing
contributing to increase in income[4,011 ]Planned[89]

Planned[62]

Mezzanine262

60

Senior

2,761

3,205

2022/32020/3(Averagebalance)

PlannedMezzanine

Planned[562 ]

2022/92023/32024/31012

2020/32021/340392022/32022/92023/32024/3©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

21

Corporate Customer Strategy ② (Commission Income from Corporate
Customers)
Acquisition of commission income from corporate customers to be driven primarily by fee income associated largely with businessfinancingAchievement of the plan for FY2022 is projected due in part to projects that are expected for the third quarter and beyond
1. Commission income from corporate
customers (¥100 million)

PlannedSpecialists in “business financing”

Planned

[56]

[55]

58

Definition of business financing(Among structured finance transactions) finance projects inwhich SF, MF, and RF divisions are involved




33

32

24

LBO loans
Nonrecourse real estate loans
Mezzanine financing, etc.

● SF Division (15 employees)
Headquarters sales staff providing expert-structured finance andother financial support for corporate customers● RF Division (10 employees)
2020/32021/32022/32022/92023/32024/3● MF Division (50 employees)

Supporting sales offices through use of strategies such asmezzanine finance to build main bank relationships

Of which, commission income from corporate customers(business financing)

PlannedPlanned

[29]

[29]

33

10
2020/32021/32022/3

Active allocation of specialists
Actively recruited highly specialized external human resources(15 employees)
Three mid-career professionals in SF Division, five in RF Division and eightin MF Division have joined and are making an immediate impact
Specialized screening team within the Loan Screening Division(5 employees)

17

16

Headquarters sales staff handling nonrecourse real estate loans,
etc.

2022/92023/32024/3A team has been established specializing in screening of projects
undertaken by SF and RF divisions, both of which handle highlysophisticated projects©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

22

Corporate Customer Strategy ③ (Investment in Private Equity Funds)
Support for SMEs to enhance their corporate value, through investment in private equity funds and Kiraboshi
Capital1. Status of investment in private equity funds (¥100 million)
819
776
Committed
capital657

Operating policy on the business of investing in private
equity funds and similar vehicles● Support SMEs in their growth and enhancement of theircorporate value through investment in private equity funds,etc.

● Secure profit by building an appropriate portfolio of funds

382

429
425
273

209

Breakdown of funds invested

2019/3240

2020/32021/32022/3449
Balance ofcommitted
capital(Book
value)

2022/9

Breakdown of funds invested● Policy-based investment that is conducive to the
expansion of management foundation and regional contribution(*)* Investment aimed at the effects that would be produced
from collaboration with the funds, regardless of the direct
economic benefit that would be generated from the funds
Enhancement of Tokyo-based platforms, regional contribution,and support for diversifying start-up and funding needs

Number of funds

Remaining capitalcommitment● Venture fund4

¥0.7 billion● Reconstruction and debt fund6

¥2.2 billion

58¥37.5 billion

5¥2.0 billion

22¥39.3 billion

Total 95 funds

Total ¥81.9 billion● Buyout fund
● Others (real estate, infrastructure, etc.)● Others (funds of Kiraboshi Capital, policy-based
investment, etc.)

Includes ¥33.1
billion of funds
arranged by
Kiraboshi
Capital Fundpresented on
the next page

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

23

Corporate Customer Strategy ④ (Kiraboshi Capital)
Strengthen initiatives in equity financing that provides a new funding option other than borrowing
Support sustained growth of companies at various stages of their life through the 6 funds it manages
1. Status of Kiraboshi Capitalʼs fund administration(¥100 million)
Arranged

331

136

143
Invested

36
35

2019/32020/32021/32022/3

Name

331

251

30

Funds administered by Kiraboshi Capital
Total fundamountDescription

Launched
inNovember
2018

Yume Kagayaki Fund 1

Buyout investment¥2.6 billion

Yume Habataki Fund 1

Growth capital investment¥2.0 billion

March 2019

Yume Yorisoi Fund 1

Mezzanine finance¥12.5 billion

August 2020

Tokyo Sparkle

Engagement investing¥10.0 billion

November
2020

A&KC Medical No. 1

Medical fund¥3.0 billion

March 2021

KCP Equity Assist No. 1

Equity investment (minority)¥3.0 billion

June 2021

Total ¥33.1 billion

2022/9

Kiraboshi Capital Co., Ltd.
● Established in September 2018, 24 employees● Established as a wholly owned subsidiary of Tokyo Kiraboshi Financial Group toprovide financial services through funds● Provides solutions matching each life stage, from foundation through growthand maturity to restructuring, to meet the needs of listed companies, inbusiness succession or business start-up and other aspects

Kiraboshi Capital Co., Ltd.

● Established within Kiraboshi Consulting, for collaboration among Group
companies● An eight-member team supporting various needs for bringing main bankrelationship building efforts to fruition through M&As
● In charge of such areas as financial advice in business succession, inheritanceconsulting, equity investment, and sophisticated financing to respond tobusiness expansion, and asset management consulting for business owners

Shareholding ratio

MM Project

50%
15%

Yume Kagayaki Fund 1

KCP Equity Assist No. 1
Yume Yorisoi Fund 1

Yume Habataki Fund 1

Start-up phase

A&KC Medical No. 1

Growth phase

Maturity phase

Mainly SMEs

Decline phase

Tokyo Sparkle

Others

Mainly listedcompanies, etc.
©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

24

Corporate Customer Strategy ⑤ (Trust Business, Medical, Collaboration
with Other Banks)
Increase in trust asset balance centering on real estate management trusts, expanded support for medical institutions by Medical and Welfare
Business Division
Collaboration with Bank of Yokohama making steady progress with business impact amounting to ¥4 billion in the first half of the second year
3. Balance of loans to medical institutions aimed at building
main bank relationship (¥100 million) / Yield (%)

1. Trust asset balance (¥100 million)

Real estate management trust

provides a good match for■ Corporate funding needs■ Individualsʼ inheritance needs
against the backdrop of the real estatemarket in the Tokyo metropolitan area

1.57

994
822

Publicworks costreceivable
trusts, etc.

174

270

294

201

151

68

2019/32020/3

414
170

819

Real estate
management
trusts539

2022/3

Bank ABank B

Planned[285]

Planned[268]

95

2020/32021/32022/32022/92023/32024/3

4. Business collaboration with Bank of Yokohama

×

The Bank of Yokohama, Ltd.

Cumulative impact ofcollaboration (income)¥4.0 billion

927
822

(Source: Trust Companies
Association of Japan)

120

588

[1.39]

LBOs and other collaboration in the structured finance field, etc.

* as of March 31, 2022

136

[1.40]

405

2022/9

2. Trust assets of regional banks (¥100 million)

Second-largest balanceamong regional banks

1.26

Tokyo Kanagawa Solution Connect244

2021/3

1.31

Medical and Welfare Business Division
Total loan balance approx. ¥140 billion(of which, ¥58.8 billion in balance ofloans aimed at building main bankrelationship)

30

283
445

1.57

261

Bank C Kiraboshi Bank Bank D(sum of the two banks)
23First half

FY2021

FY2022

FY2023

Targets¥10 billion over
5 years

FY2024FY2025+ sharing of back-office work

Cost reductions of ¥16 million per year

Partial introduction of joint delivery of cash, documents, etc.
(between sales offices in the West Tokyo area)©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

25

Retail Customer Strategy
Effectively waive sales commissions for customers with a balance of assets under management of ¥10 million or
more, and roll out sales activities with a focus on outstanding balance
1. Fees and commissions from financial instruments(¥100 million)
Shift to sales activities focusing
on outstanding balance that are
Established KLD
36
not dependent on sales
Securities
commission!
(2020/8–）
[27]
[23]
21
20

Of which,sales
commission

14

2020/3

Of which,sales
commission

Of which,sales
commission

2021/32022/3

3

11

Of which,sales
commission

Established KLD Securities(2020/8–）

4,920

4,920

4,626

2022/92023/3[Planned]

5,266

2019/32020/32021/3● Established in October 2022
● 36 employees● “Head Office Sales and Sales Offices Support Team” for retail business,
which was a part of “Retail Business Promotion Office,” has been madean independent division and newly set up as “PB Promotion Division.”
Seeking to enhance profitability of retail business with focus onpromotion of retail sales.
● “Retail Business Promotion Office” specializes in the planning area, is
responsible for overall promotion planning and supervision of retailcustomer sales activities, and formulates medium- to long-term
strategies

1,731

1,856

2022/32022/9KLD
Securities* Of which,structured
bonds ¥4.1
billionDownward impact of market
valuation on balance(2022/3→ 2022/9)
Approx. ¥40.0 billion[Planned]

PB Promotion Division (Kiraboshi Bank)

3,979

4,124

4,626
1,079

2024/3

5,835

5,856

Kiraboshi
Bank

4,186

1

3

*KLD Securities: Kiraboshi Life Design Securities

2. Balance of assets under management (¥100 million)

3. [KLD] Balance of investment trusts + fund wraps(¥100 million)

1,011

1,585

1,641

1,023

1,024

Investment trusts

561

617

Fund wraps

2022/32022/9811

200
2021/3©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

26

Expenses
While controlling costs by cutting down personnel costs, branch expenses, and other costs through headcount reduction,
push forward with efforts to improve management efficiency with proactive investment in such areas as DX
1. Breakdown of expenses (¥100 million)

522

524

44

44

● In non-personnel expense items, branch office rent has been on
the downtrend as a result of BIB (branch-in-branch) and otherinitiatives

514

[485]

44

Taxes

43

However, total non-personnel expenses were flat HoH reflecting
proactive investment such as in the development of IT
infrastructure that contributes to improvement of management
efficiency and in DX initiatives
Proactive investment (¥100 million)

217

229

264

258

261

131

2020/3(Q2, Q4)2231302021/3(Q2, Q4)

17

Nonpersonnel
expenses

2020/3117

Personnel
expenses

Personnel
expenses

232

116

2022/3(Q2, Q4)

35

28

Taxes23117
250- IT infrastructure investment- Investment in DX initiatives- One-time costs related to BIB, etc.

250

22

109

104

237

257

24

21

Nonpersonnel
expenses

218
Personnel
expenses

109

15
2021/32022/32022/9● Personnel expenses on a downtrend due to decrease inheadcount
Headcount (persons)
2,888

2,767

2,656

2,639

2022/32022/9[2,526]2023/3(Q2, Q4)[Planned]
2020/32021/32024/3[Planned]©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

27

Improvement of Branch Operation Efficiency
Through synergies with UI Bank and other Group companies, accelerate the Medium-Term Business Plan schedule and aim for more
efficient branch operation

1. Changes in the number of staffed offices
2023/3 2024/3
planned planned

2020/32021/32022/32022/9

Offices for corporate andretail customers

104

89

46

46

46

46

Retail-focused branches

14

20

56

55

44

34

Offices specializing in
corporate customers

3

2

4

3

6

8

121

111

106

104

96

88

13

12

10

9

20

28

134

123

116

113

116

116

Sub-total (1)Staffed sub-branches andoffices (2)Total of (1) + (2)Note: Excluding online branches● Against 116 offices in the Medium-TermBusiness Plan, 113 offices as of September
30, 2022 (3 offices fewer)● Against a plan of 54 offices for corporate
customer transactions (offices for corporate
and retail customers, and offices
specializing in corporate customers). 49
offices as of September 30, 2022 (5 offices
fewer)

Outlook for the fiscal year ending March 31, 2024
● Promote digital shift of mass-market retail customers andimprove branch efficiency through improved userconvenience of UI Bank, LaLaQ, Kiraboshi Bank apps, etc.
● Consolidate sales personnel in a controlling office within
the same block→ consolidate personnel and improve productivity bystrengthening OJT system→ Create business hours through optimal allocation of
personnel and strengthen headquartersʼ support of sales
offices

Offices for corporate andretail customers
Retail-focused branches
Offices specializing in
corporate customers
Sub-total (1)Staffed sub-branches andoffices (2)Total of (1) + (2)2024/3planned2024/3projection

46

49

34

48

8

2

88

99

28

4

116

103

13 offices fewer(projected) vis-a-vis
the Medium-TermBusiness Plan
Accelerate efficiency
improvement
through further
consolidation©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

28

Shareholder Returns (Dividend Policy)
Implement shareholder returns based on the Medium-Term Business Plan dividend policy(a total shareholder return ratio of 20%–30%)
Medium-Term Business Plan period (April 2021 to March 2024)

Annualdividend per
shareInterim ¥30

1.75-foldincrease

Year-end ¥45(Interim period)

Year-end ¥52.5(forecast)

¥105

¥60

Net income¥4.9 billion

¥60

¥60

¥75
Net income¥18.1 billion

Net income¥19.5 billion
Excludingspecial factors¥16.0 billion

Excludingspecial factors¥11.6 billion

Net income¥7.6 billion
Net income¥4.1 billion

Total dividends¥1.8 billion

Total dividends¥1.8 billion

Total dividends¥1.8 billion

Total
Total
dividends dividends¥2.2 billion ¥2.2 billion

2019/32020/32021/32022/3

39%

25%

47%

Total
shareholder
return ratio

Interim ¥52.5

13%

20%

Total
Total
dividends dividends¥3.2 billion ¥3.2 billion

2023/3 (planned)
16%

20%

* Total shareholder return ratio on profit from main line business excluding special factors of ¥11.6 billion
Profit from special factors of ¥6.5 billion used to invest in promoting DX and other areas to contributeto the improvement of management efficiency (same for FY2022)©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

29

The Kiraboshi Groupʼs Actions for the Future©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

30

Initiatives to Support Start-ups“KicSpace Accelerator,” an acceleration program for growth support
An acceleration program (Nov. 2022–) aimed at providing start-ups with commercialization and growth support at “KicSpace HANEDA,” anincubation facility operated in Haneda Innovation City. Seven companies were selected out of 70 applicants. Setting a 5-month goal,
mentoring sessions with mentors will be arranged during this period to help with problem-solving for realizing business growth. In March
2023, an event will be organized to report on the achievements and provide business matching opportunities with business development
personnel of large corporations and venture capitalists.
7 companies selected for the KicSpace
Accelerator Program!

iiba, Inc.

LTB Co., Ltd.

Herazika
HerazikaCo.,
Co.,Ltd.
Ltd.

Sotas Co., Ltd.

PortRay Inc.

Protagonist Inc.

WASD Inc.

Business matching with overseas companies
The site was visited by representatives fromoverseas start-ups, “monozukuri”(manufacturing) companies, universities,
government, etc.
For overseas companies that visited the site,
one-on-one business matching opportunities
were arranged with start-ups and large andmedium-sized companies that have abusiness relationship with Kiraboshi Bank.
Aiming for a “space” that is open to both
Japanese and overseas start-ups.

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

31

Initiatives toward Open Innovation
Cooperation in “Social Entrepreneurship Program” run by
Faculty of Commerce, Chuo University“Social Entrepreneurship Program (SEP)” is a program organized by Chuo
University, jointly with the three villages in Okutama area (Hinohara Village in
the Nishitama District of Tokyo, Kosuge Village in the Kitatsuru District of
Yamanashi Prefecture, and Tabayama Village in the Kitatsuru District of
Yamanashi Prefecture), to develop business human resources who will practicethe SDGs. Kiraboshi Bank endorses this cause and made contribution to thethree villages through the corporate version of
the hometown tax donation system.
[Kiraboshi Bankʼs support for SEP initiatives]
 Regional revitalization of the three Okutama
villages through SEP
 Construction of a system for support from
Kiraboshi Group based on studentsʼ initiatives
 Provision of a venue for students to givepresentation outside the campus, etc.

Collaboration with “Future Lab HANEDA,” an open innovation
facility of Kawasaki Heavy Industries[Haneda Co-Creation Platform]
A co-creation of Kiraboshi Bank, Kawasaki Heavy
Industries, and ICMG in collaboration with Haneda
Airport (Japan Airport Terminal, Haneda Future
Research Institute) and Ota City.
Aiming to build an eco-system for the future byresolving various social challenges throughcollaboration among facilities at Haneda Innovation
City, including “Future Lab HANEDA,” which is a
Kawasaki Heavy Industriesʼ facility for robot fieldtesting. Organized tour of the facilities and otherevents as part of the initiative.

“Event for ʻmonozukuriʼ companies featuring research presentation by andnetworking with universities and Tokyo Metropolitan Industrial Technology
Research Institute (TIRI)”
An event organized primarily for“monozukuri” companies which may be
SMEs, business owners, or start-ups, withpresentation and introduction of the latest
research by professors, researchers andother members of Aoyama Gakuin
University, Chuo University, University ofElectro-Communications, Tokyo
Metropolitan University, and Tokyo
Metropolitan Industrial Technology ResearchInstitute. Aiming to resolve technologicalissues faced by “monozukuri” companies
through technical consultation,commissioned research, joint research, andother means

Support for “U☆PoC Contest 2022” hosted by University ofElectro-Communications
A contest where students compete andnurture ideas on new technologies andservices for resolution of existing social
issues or for a prosperous life in the
future. Member of Kiraboshi BankʼsStart-up Support Office also participatedas judge and presented the “Kiraboshi
Award” to one group. Kiraboshi Bank has
been supporting the cause since 2021.

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

32

Initiatives in Overseas Support
2. Example of a market-oriented support for overseas
expansion

1. Support for overseas expansion
Establish subsidiaries in China and Vietnam to support Asian businessin and outside of Japan● Overseas expansion● Overseas deployment of own products and services● Local information● Alliance with local companies, etc.

Understand the needs of Vietnamese companies through relationshipbuilding, Kiraboshi Bank acting as a bridge between Vietnamese andJapanese companies and introducing Japanese companies that match theneeds in Vietnam, to support creation of new businesses for both
Japanese and Vietnamese companies
Build connections

Consulting
subsidiary inBeijing, China

Vietnamesecompanies

Government
agencies

Thailand

Capital injection
in and personnel
dispatch to local
funds

VietnamSingapore

Introduceneeds in
VietnamJapanesecompanies

Financial
institutions

China

Consulting
subsidiary inShanghai,
China

Personnel
dispatch to
local
companies

Needs in alliancewith Japaneseparties

Japan × Vietnam Creation of new
businesses

Consulting
subsidiary in Ho
Chi Minh,
VietnamJune 30, 2022
Japanʼs first!
Built a network with a Vietnamese company
and the Embassy of Vietnam through support
in import of Vietnamʼs milled rice

November 18, 2022
Signed a memorandum of understanding
with Tan Long Group, a leading Vietnamesecompany engaged in such operations as riceproduction and milling and pig farming, withthe objective of contributing to further
development of the economies of Japan and
Vietnam and a more active cultural
exchange between the two countries©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

33

Kiraboshi Group's Digital Strategy – Related Topics
Expand digital strategy for the purpose of both “offense” and “defense,” to accelerate the Groupʼs digital shift
and DX

Digital sales<Offense>

DX through digital bank
➡ From “low-cost deposits acquisition” to “finance ×
non-finance services”
Topic ①[UI Bank Co., Ltd.]
Scheduled to launch services for foreign
residents in Japan
Topic ②
[UI Bank Co., Ltd.]Started “smartphone ATM,” “account linkage
with PayPay”

Data preparation and analysis<Defense>

Use data to transform management and sales➡ Achieve Group operations with a greater focus onefficiency
Topic ④
[Kiraboshi Bank, Ltd.]
Scheduled to adopt Salesforce in the CRM
systemForm a data analysis team and develop data
analysts

Digital businesses<Offense>

Create internal schemes to respond to customer needs➡ Further grow the scale of digital business[Kiraboshi Tech, Inc.]
LaLaQ app: added JCBʼs virtual prepaid card
function

Topic ③

Digital/DX consulting × business matching

Digital infrastructure<Defense>

Leverage digital technology to transform work styles➡ Achieve greater productivity from each employee
Launched project to improve operational
efficiency using groupware
Scheduled to introduce “data analysis tool” toencourage bank employees to make greater useof data©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

34

Digital Bank (UI Bank)

Topics ①, ②

 Accelerate the digital shift and push transformation of the retail business, with UI Bank forming the centerpieceof the digital-based platform concept, and performing the role of a hub to facilitate “mutual use of services
across the Group,” “acquisition of new customers,” and “coordination with partner companies.” Collaborate with Kiraboshi Bank branches to build a structure to respond to customer needs through two-way
interaction between digital and real channels
Sales base in the Tokyo
metropolitan area
Kiraboshi Bank/Groupcustomers

Utilize branch network,
personnel, service
contact points

New markets

Deposits / fundtransfer services

Non-faceto-face

UI Bank

New customers
Promotions
focused on social
media and online

Reciprocal
customertransferFace-to-faceConsulting services

Scheduled to launch services for foreign residents
in Japan

Scheduled to add more services and functions
Started handling “smartphone ATM (Seven Bank)” in
October 2022
Started handling “account linkage with PayPay” inNovember 2022Signed an API license agreement in October 2022 with GIG-A
Co., Ltd., a company that develops and operates multilingual
mobile financial services
Scheduled to launch services for foreign residents in Japan

Scheduled to start handling retail loans
Scheduled to start collaboration with Group
companies (securities coordination, LaLaPay top-up)©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

35

Kiraboshi Tech, Inc. (Maekyu/LaLaPay)

Topic ③● “LaLaQ” enables the integrated use of the digital wallet LaLaPay and the internal loans system “Maekyu”● Aiming to achieve the “DX of Daily Use,” including seamless flow from top-up to payment, as well as installation of
an industry-first function enabling money transfer to other payment service providers
Overview of
LaLaQ services
Rechargebalance bydepositing
cash at an
ATM

Usage
scenarios• Send money to other users
through the app• Code-based payment
available at convenience
stores and restaurants
across Japan(Smart Code by JCB)
• Money transfers to othercompaniesʼ payment
services

Recharge LaLaPaybalance from Maekyu• ATM cash withdrawals• Online payment with JCB
virtual prepaid card

Internal loans with
0% interest

Business development being pursued

NEW

October 2022–

Funds transferred
directly to usersʼ
accounts■ Pursue competitive advantage through LaLaQ services and the new advance payment product (nickname: Smart Salary) to
expand share of the salary prepayment market (and aim for the top market share)■ Leverage the LaLaQ service to enter the full-time employee market■ Provide new finance schemes utilizing attendance data and personnel evaluation data (utilization of AI, etc.)©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

36

Reconstruction of Sales System Using Data and CRM

Topic ④

● Visualize and analyze customer information, and reconstruct a sales system that can make use of optimized
channels● Expedite channel optimization to meet diverse customer needs, and to lead to a virtuous cycle of “promotion of
non-face-to-face channels” and “provision of high value-added face-to-face services”● Plan is to introduce at Kiraboshi Bank, following which explore collaboration with Group companies* Scheduled to adopt Salesforce Financial Services Cloud, a customer relationship management (CRM) platform possessing diverse best practices ofthe financial industry

Retail and corporate
customers(Customer contact points /sales channels)
BranchATM

Internetbanking

Headquarters
Headquarters
employees

Consolidation and utilizationof sales-related data

Sales offices
Sales
employees
 Sales activities using the functionality of CRM
system⇒Improved productivity of sales activities
 Change to a data-centric sales style

Toward a data-centricsales promotion

CRM system* Salesforce Data-centric sales promotion measures andplanning operation

Sophisticatedanalysts
 Sophisticated analysis for the creation of new
businesses

Corporate
management
 Data-centric business management anddecision-making[Strategic Data]
Data platform /analytics platforms

Toward data-centric
decision making©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

37

Digital-based, Tokyo-based Platform Concept ①● Push forward with functionality enhancement of UI Bank and LaLaPay, and gradually expand digital functions thatform the base of the Tokyo-based platform● Scheduled to launch services for foreign residents in Japan in collaboration with multilingual mobile banking services
provider● Considering building a problem-solving-type platform such as DX support for medical institutions
Project B
HANEDA Platform

Project A

Haneda Airportand surrounding
facilities

Collaboration

ICMG

HanedaAirport

Overseas funds
transfer service
providersStart-ups

CVC funds

Cocreation

Kawasaki Heavy
Industries

Administrative
organs● Main initiatives in FY2022- Organized an accelerator program- Matching event to connect large corporations
and start-ups
Medical platform

Platform for foreign
residents in Japan

Large
corporations

Service providers
for foreigners

Administrative
organsForeign residents inJapanForeign workers andstudents

Lifestyle support,
entertainment, art

Medicalinstitutions
Sports
Project C

Futureconcept©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

38

Digital-based, Tokyo-based Platform Concept ②

Platform for foreign residents inJapan

Project B● A platform that aims to resolve problems for foreign residents who
have had difficulty accessing financial services● Provide services and information to foreign workers and students inJapan, from their arrival in Japan, ranging from accommodation toemployment, lifestyle, and finance (opening a bank account,overseas remittance, etc.)● In October 2022, an API license agreement was signed with
GIG-A Co., Ltd. (*), a company that develops and operates
subscription-based multilingual mobile financial services, forscheduled launch of services geared to foreign residents in Japan
before the end of the year

① Arrivein JapanOpen bankaccount⑤ Remitmoney
Send money
home

Clothing &medical④Lifestyle② Placeto live
Housing

Finding &changing jobs③
Employment* GIG-A Co., Ltd. is a Japanese subsidiary of G-Bank Technologies OÜ, afirm based in Estonia and Japan, engaged in the development of banking
services

Project C

Medical platform● A platform to support medical institutions address their management
challenges, such as hospital reconstruction, securing humanresources, super-aging society, and post-pandemic issues● Support digital transformation (DX) and platform development for
medical institutions by leveraging the know-how cultivated over the
past 20 years since the establishment of a division specializing in the
medical field and through collaboration with administrative bodies● Services provided on the platform• Mezzanine financing that is conducive to strengthening financial
base• Group companiesʼ functions such as leasing, trust, and claims
collection• Digital platform functions of UI Bank, LaLaQ, etc.
• Support for DX of medical institutions in cooperation with DX
companies

Medicalinstitutions
Financial
base

DX

Management
base

Patients
andfamilies

Regional medical
platform©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

39

Sustainability Initiatives ①
Building a structure for sustainability

Initiatives in partnership with administrative organs

May 2019
Published “Tokyo Kiraboshi Financial Group SDG
Declaration”
February 2021
Expressed support for TCFD recommendations
December 2021
• Established “Sustainability Promotion Office” within
Business Strategy Division• Formulated “Sustainability Policy,” “Environmental
Policy”
February 2022
Formulated ”Environmentally and Socially Friendly
Investment and Loans Policy”
March 2022
Established environment-related investment and loan
targetMarch 2022
Revised upward the Group's GHG emission reduction
targetSustainability
Promotion
サステナビリティ推進体制図
Structure Chart

Group CSuO (Group Chief
Board取締役会
of Directors CSuO（チーフサステナビリティオフィサー）
Sustainability Officer)

Proposal 付議・報告/ reporting

Supervision
監督

Management
Meeting
経営会議
Proposal /付議・報告
reportingInstructions
指⽰

Business Strategy
Divisionサステナビリティ推進室
Sustainability Promotion Office
事業戦略部

The first regional financial institution to sign a partnershipagreement with the Tokyo Metropolitan Government forvitalization of sustainable financePartnership items● Support sustainability
management promotion activities● Disseminate and promotesustainability management
among SMEs
● Disseminate information onsustainability management suchas cases of excellent initiatives

Started handling “Decarbonization
Support Loans”
A green loan product primarily for SMEs that
submit reports in accordance with the Tokyo
Carbon Reduction Reporting Program
managed by the Bureau of Environment of theTokyo Metropolitan Government

Provide financial support for
initiatives in decarbonization andcarbon neutrality©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

40

Sustainability Initiatives ②

Kiraboshi Group initiatives

FY2030 greenhouse gas emission reduction target

Scope 1, 2: 60% reduction comparedwith FY2013<Reference> FY2021 result 50.7% reduction

Measures to support customers(Kiraboshi Consulting Co., Ltd.)
Kiraboshi SDGs Evaluation Program
Evaluation and feedback on customersʼ
engagement with the SDGs, to respond to
customer needs to ascertain their own level ofSDGs engagement and commence
engagement from a basic level, etc.

Environment-related
investments and loans target for
FY2030¥200.0 billion(FY2022 to FY2030)
FY2022 first half result: approx. ¥19.8 billion(JPY equivalent)<Reference> FY2021 result: approx. ¥14 billion(JPY equivalent)©Tokyo Kiraboshi Financial Group, Inc. All Rights Reserved.

41



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



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

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

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

Tokyo Kiraboshi Financial Group, Inc.
Corporate Communication Division
TEL : +81-3-6447-5799
MAIL : ir@kiraboshibank.co.jp