FY2022 Interim Financial
Results September 2022

December 6, 2022

Connecting people, local communities and future

東証プライム・名証プレミア（7380）
TSE 1st Section
and NSE 1st Section (7380)

Table of contents
Section I: Interim Results for FY2022
Summary of consolidated results
Summary of non-consolidated results of Juroku Bank
Group companies’ business performance and progress in non-interest profit

Section III: Progress in the First Management Plan
5

Overview of the First Management Plan

44

6

Maximizing group synergy

45

Progress against numerical targets

46

7–8

Consolidated core net operating profit

9

Management strategy ～Customer-first marketing strategy～

47–48

Expenses and adjusted OHR

10Management strategy ～DX strategy～

49–50

Net interest income and loans

11Management strategy ～Regional commitment strategy～

51–52

Fees and commissions

12

Securities investment

13

Credit costs and outstanding non-performing loans

14

Non-interest profit ratio and income from customer services

15

Capital adequacy ratio and owner return16

16 Group Energy

17

Direction of the Second Medium-Term Management Plan

Business projection and divided forecast

Section IV: Future Direction of Management

Introduction of new HR system and transition to holding company system

Consolidation of our emblem

54
55–56

57
58

Section II: Initiatives for Sustainability
Value-creation process

19

Transition in initiatives for sustainability

20

Development of a system for achieving sustainability

21

Rollout of measures for instilling sustainability concept

22

Initiatives for key challenges (Materiality)

23

Progress in Sustainability KPIs

24

Materiality ～Revitalization of the local economy～

25–28

Materiality ～Sustainable development of the local community～

29–31

Materiality ～Environmental conservation and climate change actions～

32–34

Materiality ～Empowerment of diverse human resources～

35–36

Materiality ～Advancement of governance～

37–38

Disclosure based on TCFD recommendations

39–42※ The Juroku Financial Group was established on October 1,
2021. Consolidated figures prior to the September 2021
term are associated with the Juroku Bank Group, the parent
company of which is Juroku Bank.
※ Descriptions of business projections and other future
developments provided in this document are based on
information currently available to Juroku Financial Group andsome assumptions considered to be rational. Actual businessperformance, etc., could be significantly different due to avariety of factors.

2

Summary
Section I: Interim Results for FY2022


The consolidated core net operating profit reached 18.2 billion yen, up 3.6 billion yen year-on-year, as a result of an increase in consolidated coregross operating profit and a decline in expenses. The ordinary profit and interim net profit attributable to owners of the parent company bothincreased for the fifth consecutive fiscal term.



The adjusted OHR for both Juroku Financial Group (FG) consolidated results and Juroku Bank non-consolidated results reached the lower 50% range.



The total payout ratio for the March 2023 term based on the official business projection (consolidated net income of 17.5 billion yen) is expected toreach 33.6%, given the increased interim dividend (commemorative dividend of 10 yen) and acquisition of own shares in November.

Section II: Initiatives for Sustainability


The Group established 4 new working groups as subsidiaries of the Sustainability Council for an advanced sustainability management structure.

Group companies are collaborating to roll out sustainability initiatives. Each Sustainability KPI set in May 2022 shows steady progress.

Section III: Progress in the First Management PlanThe Group has taken various measures by setting the final fiscal year under the first Management Plan as a period to convert the Group’s businessmodel and build a foundation for sustainable growth.

Various numerical targets have been achieved ahead of schedule in the March 2022 term. The September 2022 term has seen further enhancements
in profitability, fiscal integrity, and efficiency.

Section IV: Future Direction of ManagementIn addition to developing the Long-Term Vision--a blueprint of where the Juroku Financial Group wants to be in a decade from now--the Group willdraw up the 5-year Medium-Term Management Plan eyeing the Juroku Bank’s 150th anniversary.



April 2023 will see the introduction of a new HR system and a transition to a holding company system to reform the actions and mentality of theGroup in its entirety, as well as to grow through the empowerment of diverse human resources and proactive action.



The Group will also consolidate its emblem with that of the Juroku Bank, which has been in use for over half a century, in turn further enhancing thesense of solidarity among all Group directors and employees and strengthening inter-Group coordination.

3

Section I: Interim Results for FY2022

Section II: Initiatives for Sustainability

Section III: Progress in the First Management Plan

Section IV: Future Direction of Management

Juroku FG
consolidated
results

Summary of consolidated results

 The consolidated core net operating profit reached 18.2 billion yen, up 3.6 billion yen year-on-year. This was a result of anincrease in fees and commissions and other operating profit (excluding profit/loss on JBGs and other debt securities) boosting theconsolidated core gross operating profit and reducing expenses.
 [Consolidated results] The ordinary profit and interim net income attributable to owners of the parent company both increased forthe fifth consecutive fiscal term (including the Juroku Bank’s consolidated results prior to the transition to a holding company).

(Unit: 100
million yen)
（単位：億円）Juroku FG十六ＦＧ連結
consolidated results
Consolidated
core gross operating profit
連結コア業務粗利益

2020/９2021/９A

2022/９B

Year-on-Year
前年同期比
B－A

345

378

403

252

266

266

0

Fees
and commissions
役務取引等利益

72

84

92

8

Other operating profit

20

26

45

19

240

231

220

うち人件費 expenses
Personnel

129

124

120

-4

Non-personnel
expenses
うち物件費

95

90

85

-5

連結コア業務純益
Consolidated
core net operating profit

104

146

182

Profiton JGBs and other debt securities
国債等債券損益

14

3

Consolidated
net business profit
連結実質業務純益

118

Creditcosts
与信関係費用Net
interest income
資金利益その他業務利益（除く国債等債券損益）(Excluding profit on JBGs and other debt securities)

経費
Expenses1

2

1

Greater fees and commissions, andother operating profit (excluding
profit/loss on JBGs and other debt
securities), have resulted in a 2.5
billion yen year-on-year increase

25

-11

Consolidated core grossoperating profit

2 Expenses
A drop in personnel and nonpersonnel expenses has resulted in a
1.1 billion yen year-on-year decline

3

Consolidated core net
operating profit
Higher consolidated core grossoperating profit and lower expenses
have resulted in a 3.6 billion yen
year-on-year increase[Consolidated results]

36

4 Ordinary profit

-48

-51

5 Interim net income

150

134

-16

28

21

5

-16

Profiton equities
株式等関係損益

25

11

14

3

Ordinary
経常利益 profit

118

150

155

4

5

Interim net income attributable to owners of the
親会社株主に帰属する中間純利益
parentcompany

75

103

103

5

0

3

attributable to owners of theparent company
The [consolidated results] of ordinary
profit increased by 0.5 billion yen yearon-year and the interim net income
attributable to owners of the parent
company jumped by 7 million yen yearon-year, both rising for the fifth
consecutive term. This was a result of adecline in credit costs and an increasein stock-related profit/loss, despite a
4.8 billion yen loss of JGBs and otherdebt securities.

*The*TheJuroku
JurokuFinancial
FinancialGroup
Groupwaswasestablishedestablishedon
onOctober
October1,1,2021.
2021.Consolidated
Consolidatedfigures
figurespriorpriortotothe
theSeptember
September2021
2021term
termareareassociatedwith
the Juroku
Group,Bank
the parent
ofcompany
which is JurokuBank.
associatedwith Bank
the Juroku
Group, company
the parentof which
is Juroku Bank.

5

Summary of non-consolidated results of Juroku Bank

Juroku Bank nonconsolidated
results

 The core net operating profit reached an interim-record 16.7 billion yen, up 3.6 billion yen year-on-year. This was a result of anincrease in fees and commissions and other operating profit (excluding profit/loss on JBGs and other debt securities) boosting thecore gross operating profit and reducing expenses.
 The ordinary profit increased for the fifth consecutive fiscal term.

(Unit: 100
million yen)
（単位：億円）Juroku Bank十六銀行単体
non-consolidated resultsCoregross operating profit
コア業務粗利益
Net interest income
資金利益
Fees and commissions
役務取引等利益
Other operating profit
その他業務利益（除く国債等債券損益）(Excluding profit on JBGs and other debt securities)

2021/９A

2020/９2022/９B

Year-on-Year
前年同期比
B－A

304

329

354

255

268

265

-3

45

55

62

7

1

25

4

5

26

207

197

187

Personnel expenses
うち人件費

105

100

92

-8

Non-personnel expenses
うち物件費

85

80

79

-1

Core
net operating profit
コア業務純益

97

131

167

Profit on JGBs and other debt securities
国債等債券損益

14

3

-48

-51

Net
business income
実質業務純益

111

135

119

-16

Credit costs
与信関係費用

27

19

5

-14

Profit on equities
株式等関係損益

25

10

14

4

Ordinary profit
経常利益

112

138

142

4

4

中間純利益
Interim net income

75

100

95

5

-5

経費
Expenses

21
2

3

-10

36

1 Core gross operating profit
Greater fees and commissions,and other operating profit(excluding profit/loss on JBGs
and other debt securities), haveresulted in a 2.5 billion yen yearon-year increase

2 Expenses
Personnel expenses have
dropped in particular, resulting ina 1 billion yen year-on-year
decline3 Core net operating profit
An interim-record 16.7 billion yen
has been achieved from anincrease in core gross operating
profit and a decline in expenses

4 Ordinary profit
The ordinary profit increased for thefifth consecutive term despite a 4.8
billion yen loss of JGBs and otherdebt securities, as a result of adecline in credit costs and anincrease in stock-related profit/loss,
which resulted in a year-on-yearincrease of 0.4 billion yen

5 Interim net income
The interim net income marked a
0.5 billion yen decline year-onyear resulting from increased
income taxes-deferred

6Juroku FG
consolidated
results

Business performance of Group companies

 The Group companies’ total (excluding Juroku Bank) contribution to the interim net income attributable to owners of the parent
company reached 807 million yen, up 79 million yen year-on-year, as a result of setting Group companies (excluding joint ventures)as wholly-owned subsidiaries of the Juroku FG or Juroku Bank.

 Business performance of Group companies(Unit: 100 million yen)

十六銀行以外のTotalof Group companies(excl. Juroku Bank)
グループ会社合計

十六銀行
JurokuBank
前年
Year-on-Year
同期比

22/9

22/9

前年
Year-on-Year
同期比十六TT証券
Juroku TT
Securities

十六リース
Juroku22/9

22/9

Juroku Credit
十六カード
JurokuCard 十六信用保証
Guarantee

Lease
22/9

22/9

Others*その他（※）

Offsetting,
相殺等
etc.

Juroku FG
十六ＦＧ連結consolidated
results

22/9

22/9

22/9

前年
同期比

Year-on-YearCore gross operating
コア業務粗利益
profit

354

25

54

-3

13

10

10

13

6

-5

403

25

Expenses
経費

187

-10

40

2

9

8

9

5

7

-6

220

-11

Core net operating
コア業務純益profit

167

36

14

-4

4

2

1

7

-0

0

182

36

Ordinary
経常利益 profit

142

4

13

-3

4

2

0

7

-0

-０

155

5

*Other Group companies: Juroku Research Institute, Juroku Densan Digital Service, NOBUNAGA Capital Village, Kanda Machiokoshi, Juroku Business Service

Results of September 2022 term (vs. late March 2022)

Juroku TT
Securities

No. of securities
accounts

20,679 accounts(+1,023)

Total of Group companies’ (excluding Juroku
Bank) interim net income that contributed to(Million yen)
Juroku FG consolidated results
800

Juroku Lease

No. of clients

5,944 clients

+79

700

(+112)
807

600

Juroku Card

No. of merchantagreements

18,003 agreements

Cautionarybalance

1,709.8 billion yen(+253)

728
500
525
400

Juroku Credit
Guarantee

20/9

21/9

22/9

(+40.2 billion yen)7

Juroku FG
consolidated
results

Progress in non-interest profit of Group companies
 Maximizing Group synergy to achieve top-line growth (core gross operating profit), particularly non-interest profit.

Top-line by Group company
and non-interest profit
JurokuCreditGuarantee

JurokuCard
1,032

JurokuDensanDigitalService263

Juroku NOBUNAGA
JurokuKanda
Research CapitalBusiness
Machiokoshi
Village
Institute
Service
32
142
0
224

JurokuLease
1,078+2,519 year-on-year

1,322
Juroku TT
Securities<Reference>
September 2022 term
Juroku Bank
consolidated results
37,831

1,380
JurokuBank35,461Juroku FG
2,721Maximizing Group synergy under the newGroup structure to achieve top-line growth,particularly the non-interest profit
Achieving the non-interest profit rate of
30%, the numerical target for FY2022
stipulated in the First Management Plan
ahead of schedule(Unit: million yen)

September 2022 term
Juroku FG consolidated
results
40,350(After offsetting)Non-interest
profit+2,600 year-on-year
13,739Non-interest
profit11,139Non-interest
profit ratio
34.05%

8Juroku FG
consolidated
results

Consolidated core net operating profit
 The consolidated core gross operating profit jumped by 3.6 billion yen year-on-year to 18.2 billion yen thanks to higher
consolidated core gross operating profit and lower expenses.

Transition of core gross operating profit and expenses(Unit: 100 million yen)
Juroku FG
consolidated results

20/9

21/9
A

22/9
B

Difference

B–A

400
350

345

378

403

25

300

Net interest income

252

266

266

0

250

Fees and commissions

72

84

92

8

200

Consolidated core gross operating profit

Consolidated core gross operating profit
Expenses(100 million yen)

20

26

45

19

150

Expenses

240

231

220

-11

100

Consolidated core net operating profit

104

146

182

36

50

Other operating profit (*)

14.6
billion yen

10.4
billion yen

403

378

345
240

Consolidated core
net operating profit
18.2 billion yen

231

220

0

*Excluding profit/loss on JBGs and other debt securities



20/9

Fluctuation factors and transition of theconsolidated core net operating profit
Approx. 70%(100 million yen)

Top-line growth: +2.5 billion yen

200

180
Loan
interest
－3

160

V:+2
R:－5

Depositinterest+0

Other
operatingFees and
Other
profitcommissions+19
Securities interest+8
incomeinterest
+0
+1
V:－7
R: +9

21/9

(100 million yen)

Consolidated core net
operating profit

200

Approx. 30%

22/9

Expenses: +1.1 billion yen

Personnel
expenses+4

Nonpersonnel
expenses/Taxes
+6

150

+36

100

182

V:－0
R:+0

146

182
50

140

113

104

19/9

20/9

77
146

V: Balance factor
R: Yield factor

120
21/9

22/9

0
18/9

21/9

22/9

9

Juroku FG
consolidated
results

Expenses and adjusted OHR

Juroku Bank nonconsolidated
results

 Adjusted OHR improved by 6.44 percentage points year-on-year to 54.76% in Juroku FG consolidated results, and by 7.15
percentage points year-on-year to 52.75% in Juroku Bank non-consolidated results.

 Expenses
Juroku FG
consolidated results

Expenses

Juroku Bank nonconsolidated results

20/9

Expenses

Personnel
expenses

240

21/9
A

231

22/9
B

220

Difference

B–A

250

240

129

124

120

-4

95

90

85

-5

Taxes

16

16

15

-1

207

197

187

-10

105

100

92

-8

85

80

79

-1

Taxes

15

15

14

-1

16

220

207

200
95

90

20/9

(Unit: 100 million yen, %)
21/9
A

22/9
B

Difference

150

129

124

20/9

(%)

Juroku FG
consolidated results

345

Expenses

240

231

220

-11

Adjusted OHR

69.72

61.20

54.76

-6.44

Juroku Bank nonconsolidated results

75.0Core grossoperating profit

Core grossoperating profit

304

329

354

25

378

403

15

197

187

15

14

85

80

79

100

50

80.0

Taxes
税金

85

100

B–A

Non物件費
personnel
expenses

250

15

200

Personnel
人件費
expenses(100 million yen)

120

50

0

 Adjusted OHR

21/9

105

100

92

20/9

21/9

22/9

0

22/9

Adjusted OHR (Juroku FG consolidated results)

Adjusted OHR (Juroku Bank non-consolidated results)
76.54
76.52

25

68.31

70.0
65.0

Adjusted OHR

Taxes
税金

150

Non-personnel
expenses

Expenses

Nonpersonnel
物件費
expenses231

16

Non-personnel
expenses

Personnel
expenses

Personnel

人件費
expenses(100 million yen)

-11

Juroku Bank nonconsolidated results

Juroku FG consolidated
results(Unit: 100 million yen)

66.82

69.72

68.04

61.20

60.0

207
68.04

197
59.90

187
52.75

-10
-7.15

59.90

54.76

55.0
52.75
50.0
18/9

19/9

20/9

21/9

22/9

10

Juroku Bank nonconsolidated
results

Net interest income and loans

 The net interest income dropped by 3 billion yen year-on-year to 26.5 billion yen, resulting from a decline in the interest income inforeign currencies.
 The average balance of JPY loans showed a solid result of 4,538.7 billion yen, up 57.5 billion yen year-on-year.

 Breakdown of net interest income

JPY loans and deposits
JPY securities investment(Unit: 100 million yen)(100 million yen)

Juroku Bank nonconsolidated results
Net interest income

20/9

22/9
B

Difference

B–AInterest income in foreign currencies

255

268

265

-3

250

250

5

200

188

190

187

-3

150

44

51

52

1

100

JPY deposit interest

1

2

10

8

50

Interest income inforeign currencies

20

23

14

-9

0

JPY securities investment

268

265

23
2

10
14

51

52

188

190

187

20/9

21/9

22/9

255

245

JPY loans and deposits

JPY deposit interest

300

234

Interest income in JPY



21/9
A

20
1
44

Average balance and yield of JPY loans(Unit: 100 million yen, %)Average balance of JPY loans
Average yield of JPY loans

50,000-0.018Juroku Bank nonconsolidated results

20/9

Average balance of JPY
loans

43,70921/9
A

44,81222/9
B45,387

Difference

B–A

48,0000.870-0.025
0.852

(%)
1.400
1.200

0.827

1.000

(100 million yen)

0.800

46,000

0.600

575

0.400
44,000

0.200

0.000
Average yield of JPY loans

0.870

0.852

0.827

-0.02542,00043,70944,81245,387-0.200-0.40040,000-0.600-0.80038,000-1.000
20/9

21/9

22/9

11

Juroku Bank nonconsolidated
results

Fees and commissions
 Fees and commissions grew by 0.7 billion yen year-on-year to 6.2 billion yen.
 Individual-related and corporate solution-related revenues both reached interim-record levels.

 Breakdown of fees and commissions(Unit: 100 million yen)

Juroku Bank nonconsolidated results
Juroku Bank
Individual-related

21/9
A

20/9

45
19

22/9
B

55
30

Difference

B–A

62

7

35

5

Individual-related
100

80

OthersJuroku TT Securities

8

9

13

4

17

15

13

-2

11

17

16

-1

Others<Juroku TT Securities> Individual-related revenues

1117(100 million yen)

40

20

16
62

60
Corporate-related

Corporate-related

55
45

15

17

9

13
13

8
30

35

21/9

22/9

19
Juroku Bank + Juroku TT
Securities

56

72

78

6

 Corporate solution-related revenues(Unit: Million yen)
Juroku Bank nonconsolidated results
Corporate solution-related
revenues

21/9
A

20/9

22/9
B

Difference0
20/9(Million yen)

Syndicated loans and commitment fees
Private placement bond fees

1500

B–A

M&A fees
Business matching fees
Consultation fees

883

930

1,370

440

1000
899

Syndicated loans andcommitment fees

430

Private placement bond
fees

150

M&A fees
Business matching fees

424

899

475
430

117

87

-30

500
150

157
145

154
234

100
228

-54
-6

–

–

55

55

117
154

157
0

145
20/9

Consultation fees

424

234
21/9

87
100

228
55
22/9

12

Juroku Bank nonconsolidated
results

Securities investment

 Security valuation gains reached 30.1 billion yen overall.
 Cross-shareholdings declined by 1.5 billion yen from the preceding term to 46.3 billion yen as a result of continuous reduction
efforts.



Valuation gains and losses of securities(100 million yen)

Bonds

(Unit: 100 million yen)

Juroku Bank
nonconsolidated
results

21/3

21/9

22/3
A

22/9
B

Difference

B–A

869

931

857

699

-158

400

Stocks

24

-3

23

-72

-145

-73

200

Other securities

64

-27

-23

-95

-252

-157

0

62

-28

-23

-64

-160

-96

-200

1

0

-0

-31

-91

-60

-400

759

837

932

689

301

-388

Foreign bonds
Investment
trusts
Total

Juroku Bank
nonconsolidated
results

869

931

857

-3
-27

-23

-72
-95

20/9

21/3

21/9

22/9
B

-145
-252

21/3

(Year)

6.93

6.82

21/9

22/3

22/9

Foreign currency bonds
6.85

7.0
22/3
A

301
699

JPY bonds(Unit: Year)

689

670

20/9

 Bond duration

23

64
24

600
670

Total

837

759
800

Bonds

Other

932

1,000
20/9

Stocks

6.67

6.46

Difference

B–A

JPY bonds

6.93

6.82

6.85

6.67

6.46

-0.21

Foreign currency bonds

5.65

5.84

5.61

4.84

5.03

0.19

6.0
5.84

5.65

5.0

5.61

4.0
20/9

21/3

21/9

4.84

5.03

22/3

22/9

*Excluding derivatives, and including JPY bonds for held-to-maturity purposes and for otherretaining purposes Cross-shareholdings
Juroku Bank
nonconsolidated
results
Cross-shareholdings(book value)(100 million yen)

(Unit: 100 million yen)

900
800

19/3

20/3

21/3

22/3
A

22/9
B

Difference

B–A

Cross-shareholdings (book value)

883

700
600
500

542

527

503

478

463

-15

542

400

527

503

478

463

21/3

22/3

22/9

300
09/3

・・・

19/3

20/3

13

Juroku Bank nonconsolidated
results

Credit costs and bad debt balance Credit costs declined 1.4 billion yen year-on-year to 0.5 billion yen, in response to a change in the year-on-year allowance for loan
loss calculation standards and a decline in the allowance rate.
 The ratio of non-performing loans improved by 0.07 percentage points year-on-year to 1.43%.

 Credit costs
Juroku Bank nonconsolidated results(Unit: 100 million yen)
21/9
A

20/9

① Net transfer to general allowance forloan losses

4

22/9
B

15

Difference

B–A

-7

30

22

4

12

8

21

3

12

9

③ Reversal of allowance for loan losses

-

-

-

-

0

-

-

-

27

19

5

-14

④ Recoveries of written-off claims
Credit costs ①+②-③-④

Net transfer to general allowance for loan losses
Credit costs

27

-22

Transfer to individual allowance forloan losses② Disposal of non-performing loans

Disposal of non-performing loans(100 million yen)

19

20
4

22

5

10

0

15

12

4
-7

-10
20/9

*The September 2021 term saw a 1.1 billion yen increase in generalallowance for loan losses, due to a change in the standards forcalculating the allowance for loan losses.

21/9

22/9

Substandard claims
Doubtful claims

 Outstanding non-performing loans

Bankrupt and substantially bankrupt claims(Unit: 100 million yen, %)Juroku Bank nonconsolidated results

20/9

21/9
A

22/9
B

Difference
B–A

Ratio against total claims outstanding(100 million yen)

132

107

118

1.50

11

677
30

697
29

514

561

600
Doubtful claims

514

561

530

671
23

-31

30

29

23

-6

Total

677

697

671

-26

Ratio against total claims
outstanding

1.49

1.50

1.43

-0.07

Substandard claims

1.43

(%)
1.40

800
Bankrupt and substantiallybankrupt claims

1.49

1.20
1.00
0.80

400

530

0.60
0.40

200

0.20

132

107

118

20/9

21/9

22/9

0

0.00

14

Juroku FG
consolidated
results

Non-interest profit ratio and income from customer services

Juroku Bank nonconsolidated
results

 The consolidated non-interest profit ratio increased by 4.61 percentage points year-on-year to 34.05%, exceeding the 30% target
set in the first Management Plan.
 The income from customer services grew by 1.5 billion yen year-on-year to 7.4 billion yen.
Non-interest profit(Juroku Bank non-consolidated results)
Non-interest profit (Juroku Bank
FG consolidated
results)
FG consolidated
results）

 Non-interest profit ratio*(Unit: 100 million yen, %)

20/9

21/9
A

22/9
B

Difference

B–A

Juroku Bank nonconsolidated
results

Juroku FG
consolidated
results150
Non-interest profit

92

111

137

Non-interest profit ratio(Juroku Bank non-consolidated results)
Non-interest income ratio(Juroku Bank
FG consolidated
results)
FG consolidated
results）(100 million yen)

23.78

26.88

29.44

34.05

26.88

16.65

16.14

26
15.41

Non-interest profit ratio

25.39

4.61

49

60

88

16.14

18.41

25.04

18.41
137

92

6.63

20.0

88

0.0
53

45

*The ratio of “fees and commissions” and “other operating profit
excluding profit/loss on JBGs and other debt securities” in the core 0
gross operating profit

30.0

10.0

78

50
Non-interest profit ratio

25.04

111

28

(%)

29.44

100
90

Non-interest profit

34.05

60
49

(10.0)(20.0)
18/9

19/9

20/9

21/9

22/9

 Income from customer services(Unit: 100 million yen, %)Juroku Bank nonconsolidated results

20/9

21/9
A

22/9
B

Difference(100 million yen)

Profit from customer services = Average loan balance x Deposit-loan

80

+15

B–A

Profit from customer services

31

59

74

15

Average loan balance ×
Deposit-loan interest rate
difference

191

192

189

-3

Deposit-loan interest
rate difference

0.868

0.850

0.828

-0.022Fees and commissions

45

55

62

7

Operating expenses

205

188

177

-11

60

40

74
59

20

32

31

19/9

20/9

11
0
18/9

21/9

22/9

15

Juroku FG
consolidated
results

Capital adequacy ratio and owner return

Juroku Bank nonconsolidated
results

 The consolidated capital adequacy ratio marked 10.67%, while the non-consolidated capital adequacy rate stood at 9.46%.
 The total payout ratio based on the official business projection (i.e., consolidated net income of 17.5 billion yen) is expected toreach 33.6%.

 Capital adequacy ratio

Capital adequacy ratio (Juroku FG
Bank
FG consolidated
results)
consolidated
results）(Unit: %)(%)

20/9
Juroku FG
consolidated
results

9.65

21/9
A
9.87

22/9
B
10.67

Capital adequacy ratio (Juroku Bank non-consolidated results)

Difference

B–A
0.80

10.67

11.00
9.87

9.65

10.00

9.00

Juroku Bank
nonconsolidated
results

9.28

9.05

9.05

9.28

9.46

0.18

9.46

8.00

7.00
20/9

 Dividends
20/3

21/3

22/3

23/3

(million yen)

21/9

Total dividends
Total payout ratio

22/9

Acquisition of own shares

(%)
32.3

33.6

35.0

6,000
Dividends per share(Parenthesis indicate
interim dividends)

80 yen(35 yen)

90 yen(35 yen)

120 yen(50 yen)

130 yen(60 yen)

2,989

3,363

4,453

4,783

million yen

million yen

million yen

million yen

1,111

5,000
23.2

Total dividends

Acquisition of own
shares

–

–

1,111

1,111

million yen

million yen

2,000
Total payout ratio

23.2%

22.8%

32.3%

Specialdividen
d

2,989

33.6%

Commemorative
dividend

Commemorative
dividend

4,453

Commemorative
dividend

20.0
15.0

4,783
10.0

3,363

1,000

*The interim dividends before 3/2022 were issued by the Juroku
Financial Group*Red indicates projections

30.0

25.0

22.8

4,000
3,000

1,111

5.0

0

0.0
20/3

21/3

22/3

23/3
(Projected)

16

Juroku FG
consolidated
results

Business projection and divided forecast

Juroku Bank nonconsolidated
results

 The net profit attributable to owners of the parent company for the March 2023 term is expected to reach 17.5 billion yen, up 400
million yen year-on-year.
 Owners are expected to receive 130 yen in annual dividend, consisting of 60 yen as an interim dividend and 70 yen as an end-ofyear dividend.

 Business projection（単位：億円）(Unit: 100 million
yen)[Reference]

2023/3(Projection)（予 想）Difference
前期比十六銀行単体consolidated results

782

746

-36

Core gross operating profit
コア業務純益

資金利益
Net
interest income

543

500

-43

役務取引等利益
Fees and commissions

171

186

Other operating profit67

連結コア業務粗利益
Consolidated
core gross operating profit

その他業務利益(除く国債等債券損益)(Excluding profit on JBGs and other debt securities)

Expenses
経費
うち人件費
Personnel expenses

Non-personnel
expenses
うち物件費

Juroku Bank non-

2023/3(Projection)（予 想）Difference
前期比

289

275

-14

Actual operating income
実質業務純益

180

202

22

15

与信関係費用Net business income

25

20

-5

60

-7

Ordinary
経常利益 profit

245

232

-13

460

445

-15

Net
profit
当期純利益

173

165

-8

247

238

-9

2022/3(Actual)（実績）JurokuFG consolidated results
十六FG連結(Unit: 100 million
yen)（単位：億円）

183

178

-5

2022/3(Actual)（実績）Juroku Bank non-consolidated results(100 million yen)

Credit costs (interim)

Consolidated
core net operating profit
連結コア業務純益

321

301

-20

40

Ordinary
経常利益 profit

267

255

-12

30

Interim net income attributable to owners of the parent
親会社株主に帰属する当期純利益
company

171

175

4

41

20
10

Credit costs (annual)

25

27

19

20
5 (projection)

0
21/3

 Dividend forecast
21/3
Annualdividend

Interim

90 yen(including ordinary dividend
increase of 10 yen)(including 10 yen incommemorative dividend)

35 yen55 yenYear-end(including the ordinary dividend
increase of 10 yen)(including 10 yen incommemorative dividend)

22/3

23/3

120 yen[Projection] 130 yen(including 20 yen incommemorative dividend)(including 10 yen incommemorative dividend)

50 yen70 yen(including 20 yen incommemorative dividend)

60 yen(including 10 yen incommemorative dividend)[Projection] 70 yen

22/3

23/3

*The Juroku Bank changed the standards for calculating theallowance for loan losses. This has increased credit costs of
the March 2022 term by 1 billion yen compared to theequivalent amount without the change.
(Yen)
InterimYear-end
130
150(Projection)
120
100
50

90

70

70
(Projection)

35

50

60

21/3

22/3

23/3

55

0

17

Section I: Interim Results for FY2022

Section II: Initiatives for Sustainability

Section III: Progress in the First Management Plan

Section IV: Future Direction of Management

Value creation process
 Delivering value to all stakeholders through corporate activities in order to contribute to achieving SDGs

ＩＮＰＵＴ
Capitals to be usedHumancapitalIntellectual
capitalSocialcapitalFiscalcapital Diverse humanresources Employee-empoweringorganization
 Advanced consulting
capability
 Locally-establishedbrand Group products thatmeet market needs
 Streamlined
management due towork reforms

ＡＣＴＩＶＩＴＩＥＳCorporate activities

ＯＵＴＣＯＭＥ
Presented value

Our mission

 Issues and optimum
solutionsCustomers  Advanced convenience Enrichment

Achieving growth and prosperity for ourcustomers and the local community

Our vision
To become a comprehensive financial group thatbuilds a future with local communities and achieves
sustainable growth with local economies

Maximizing
groupsynergy Excellent and robust
customer base Market that supports
Japan’s Monozukuri
philosophy
 Domestic andinternational networks

 Personal growth
Utilizingcustomerbase,
informationand network

Reforming thementality andbehaviors of
employees anddirectors

Connecting people,
local communities and future Strong profitability
 Sound loan assets
 Enhanced equity capital

Localcommitment
strategy
Handling
comprehensive
local design

DX strategy
Improving
convenienceand productivity
Market-in
approach strategy
Further exerting
problem-solving
capacity

NaturalcapitalExternal
environment

 Rich nature Rich tourism resources Biodiversity

Contraction of market scale
Conversion of business mode
Social changes

 Development of local
economy Regional revitalization
Local
communities through collaboration withlocal governments
 Advanced financial
infrastructures

Employees  Healthy work-life balance

SDGs
contribution
No poverty

Zero hunger

Good healthand well-being

Quality education

Gender equality

Clean waterand sanitation

Affordable andclean energy

Decent work andeconomic growth

Industry, innovationand infrastructure

Reducedinequalities

Sustainable cities
and communities

Responsible
consumption andproduction

Climate action

Life below
waterLife on land

Peace, justiceand strong
institutions

 Promotion of diversity

 Improvement of corporatevalue
 Disclosure of information
including non-fiscal
Shareholders information
Investors  Promotion of engagement

 Response to climatechange Zero-carbon society
Environment  Environmental
conservation

Partnerships
for the goals

Corporate governanceRisk management
Compliance：：：

Population decline, aging society, reduced number of companies, changes in industrial structure
Protracted negative interest policy
Progress in cashless society
Cross-industrial market entries
Response to climate change
Response to COVID-19
Banking Act deregulation

19

Transition in initiatives for sustainability
 The Group has undertaken diverse initiatives for sustainability upon issuing the Juroku Financial Group SDGs Declaration in February 2020.
 The Group has endeavored over the past few years to establish a system for achieving sustainability and rolled out various measures to internallyinstill this system.

April 2022
The Group newly established the Sustainability Management Office
The Juroku Bank upgraded the SDGs Promotion Office to the
Sustainability Promotion Department
Newly established the Sustainability Council

February 2020
Issued the Juroku Financial Group
SDGs Declaration

June 2021
The Juroku Bank expressed support for the TCFD
recommendations
Established the Investment and Lending Policy for
Creation of a Sustainable Society

April 2021
The Juroku Bank newly establishedthe SDGs Promotion Office

May 2022
Developed the Sustainability Policy
Set Sustainability KPIs

May 2022
The Group expressed support for
the TCFD recommendations

October 2021
The Juroku Financial Group launched
Issued the Juroku Financial Group SDGs
Declaration

July 2022
Newly established 4 working groups
under the Sustainability Council
August 2022
Held the Sustainability Meeting
Launched the Sustainability Forum
Started Sustainability News

20

Development of a system for achieving sustainability
 To advance its sustainability management structure, the Group has established 4 new working groups.
 Every month, each group discusses challenges that line up with their responsibilities and reports details to the Sustainability
Council.

Advancing the sustainability management structure New establishment of 4 working groups as subsidiaries of the Sustainability Council
 Each working group consists of Group-wide members: the managing director who serves as the officer, andothers including General Managers from the FG and Juroku Bank’s divisions, and Group companies
 Every month, each group discusses challenges that line up with their responsibilities and reports details to the
Sustainability Council

Board of Directors
 The Council is chaired by the President and inprinciple meets at least once every 3 months
 Items deliberated on are reported periodically to
the Board of Directors at least once a year

Group’s Management
Council

Sustainability Council

Administrating OfficeSustainability Management OfficeName

Sustainable BusinessWorking Group

Environmental
Conservation
Working Group

D&I
Working Group

Climate Change and
TCFDWorking Group

Responsibility

Business opportunity
initiatives

CO2 emissions reduction
Environmental
conservation

Diversity
Work-style reform

Disclosure based on TCFD
recommendations
Response to climatechange21

Rollout of measures for instilling sustainability concept
 To promote better understanding of the sustainability concept, the Sustainability Meeting takes place periodically in which the FG President, theJuroku Bank President, and employees exchange opinions.
 Efforts are made to spread good practices and instill measures by holding the Sustainability Forum and sharing the Sustainability News through theintranet.

 Sustainability Meeting

FG President/Juroku
Bank President



The FG President, the Juroku Bank President, and FG
Group employees exchange opinions aboutsustainability-related themes

Held around twice a month from August 2022

Promoting better
understanding ofsustainability
concept

Creating
opportunities for
direct dialog with
top management

Enhancingparticipants’motivation

FG employees

 Sustainability ForumPost Each workplace posts about theirsustainability-related initiatives andperiodically shares them via the intranet
Enhancing
motivation

Spreading goodpractices
Sustainability
Management OfficeInstillingmeasures Sustainability News


Share

Understanding andcollecting
information about
the situation ofoperational
frontlines

Sharing
information about
and instilling
good practices

Empathizing andunderstanding
Bank branches/HeadofficeGroup companies

The Sustainability Working Group provides
information it wants to notify all employees to the
Sustainability Management Office, and theinformation is accordingly shared periodically throughthe intranet
Notifyinginitiatives

Developing
empathy andunderstanding

Introducing
specific
initiatives

22Addressing key challenges (Materiality) The Juroku Financial Group is promoting various initiatives in line with the SDGs Declaration to address five key challenges(Materiality).

Management

Business

Key challenges(materiality)

Initiatives

Revitalization of
the local
economy Supporting business foundation and new business operations
to foster future leaders of local economy
 Supporting local companies’ main business operations andmanagement succession to contribute to their growth Supporting asset formation to achieve enriched living

Sustainable
development of
the local
community Creating comfortable and appealing communities
 Using local resources to create value that will benefit future
generations
 Promoting digital transformation of local companies and local
governments

Environmental
conservationand climatechange actions

 Supporting local companies’ carbon neutral business management
 Implementing initiatives for environmental conservation andenvironmental impact mitigation
 Responding to climate change and disclosing information in linewith TCFD

Empowerment ofdiverse humanresources Building a corporate culture that boasts diversity as strength Implementing work style reform to provide a good work-lifebalance Creating workplaces that facilitate growth of diverse humanresources and empower them

Advancedgovernance Advancing corporate governance Strengthening risk management and compliance Achieving stakeholder engagement

Decent work andeconomic growth

Industry, innovationand infrastructure

Quality education

Decent work andeconomic growth

Affordable and clean
energyClimate action

Gender equality

Sustainable cities
and communities

Life below water

Partnerships forthe goals

Life on land

Decent work andeconomic growth

Peace, justice andstrong institutions

23

Progress in Sustainability KPIs
 To reinforce initiatives for sustainability, the Group has set (Materiality) Sustainability KPIs in its 5 key challenges.

■ Targets by FY2030
Item

Key challenges
Revitalization of
the local
economySustainable finances provided(including environment-related
finances)

Balance of Group assets on deposit

Quantitative target

September 2022 results (progress rate)(*)

91.6 billion yen(32.2 billion yen)

4.6%
(4.0%)

550 billion yen

344.5 billion yen

62.6%

2 trillion yen(800 billion yen)

Sustainable
development of
the local
community

Social impact investments

2 billion yen

0 billion yen

0.0%

DX-support consultation cases

3,000 cases(*)

48 cases

1.6%

Environmental
conservation andclimate change
actions

CO2 emissions (vs. FY2013 level)

50% reduction

39.1% reduction

78.2%

Paper use (vs. FY2019 level)

50% reduction

17.9% reduction

Ratio of female managers

20%

7.4%

37.0%

Ratio of paid leave claimed

80%

27.4%

34.3%

Empowerment ofdiverse humanresources

AdvancedgovernanceDialog with investors(Provisional figure)

35.8%(*)Cumulative total from April 2022

■ On-going targets
Initial response training for
emergency preparedness(Provisional figure)No less than twicea year3 times150.0%

No less than
10 times a year

8 times

80.0%

24

Materiality ～Revitalization of the local economy～
Revitalization of the local economy
VisionProviding a wide range of financial services to grow local companies and contribute to the revitalization of local economy

Key items

ActionSupporting business foundation and new business operations to foster
future leaders of local economy
・ NOBUNAGA２１（※） ※ Venture support network led by the private sector
・ Open innovation
・ Startup and venture investments
Expanding business⇒ Establishing the NOBUNAGA Capital Village
range

Supporting local companies’ main business operations andmanagement succession to contribute to their growth・ Arranging business meetings and business matching to help local
companies expand sales channels
・ Supporting initiatives for solving social and environmental issues
・ Management succession, M&A support
・ Human resource referencing, HR system consultation

Supporting asset formation to achieve enriched living
・ Supporting asset formation in line with major life events
・ Offering asset management consultation with extensive service lineup・ Supporting inheritance and asset succession, using trust products
・ Providing financial and economic education

 Local VC・CVC investment
 Sustainable finance Management succession consultation
 Human resource reference Asset formation support
 Balance of Group assets on deposit

Sustainability KPIs
Targets by FY2030
Sustainable finances provided(including environment-related
finances)
Balance of Group assets on
deposit

2 trillion yen（800 billion yen)

550 billion
yen25

Materiality ～Revitalization of the local economy～
 Sustainable finances totaled 91.6 billion yen (including 32.2 billion yen of environment-related finances) in the first half of
FY2022, achieving 4.6% (environment-related: 4.0%) of the FY2030 target.

Sustainable finances provided

KPI

 Sustainable finances totaled 91.6 billion yen in thefirst half of FY2022, including 32.2 billion yen ofenvironment-related finances The Group aims for further growth by enhancing its
product lineup across the board(100 million yen)

Sustainable finances provided(including environment-related finances)

20,00015,00020,000[Juroku Bank/Juroku Research Institute]
Offering Positive Impact Finance (PIF) product In March 2022, Juroku Bank started to offer PIF, an SDGsrelated lending product Juroku Research Institute develops an assessment based on theimpact corporate activities have on the external environment
 Rating and Investment Information, Inc. has offered a second
opinion that the PIF-offering system complies with theprinciples for PIF set forth by the United Nations Environment
Program Finance Initiative

Result of offering in
FY2022 first half

14 cases: 1,740
million yen[Juroku Lease] Offering SDGs lease (Donation)
10,000 Juroku Lease started to offer SDGs Lease(Donation) from June 2022

[Progress rate]
Versus FY2030 target:
4.6% (4.0%)

5,000(8,000)Result of offering in
FY2022 first half

916
0

 If customers agree upon their introductionof energy-saving and decarbonizing
equipment through leasing, Juroku Lease
donates 0.1% of the non-personnel pricefrom the contract sum to local
governments and educational and medicalorganizations alike

6 cases: 105
million yen(322)
FY2022First half

FY2022・・・・・・

FY2030[Target][Definition]
Sustainable finances: Investment and lending for SDGs and
ESG initiatives that contribute to building a sustainable
society
Environmental
field:
Investment
andlendingforenvironmental impact-reducing initiatives[Juroku Bank] Offering SDGs housing loans
 Starting August 2022, the Juroku Bank has started to offer “Juroku
SDGs Housing Loan: Heading Together to the Future” for theacquisition of environmental-conscious and energy-saving zeroenergy house certifications
 A donation is made to environment-related funds of Gifu and Aichi
based on the amount of products offered, with the aim ofcontributing to development programs of local housing environments

26

Materiality ～Revitalization of the local economy～ The balance of Group assets in custody as of late September 2022 reached 344.5 billion yen, achieving 62.6% of the FY2030 target.
 The Group has focused on expanding regular investment trusts to stably form customer assets. The amount of monthly contribution and the numberof contracts continued to show solid increase.

Balance of Group assets on deposit

KPI

The balance of Group assets in custody reached 344.5 billion yen as oflate September 2022, achieving 62.6% of the FY2030 target

Juroku Bank accounted for 155.9 billion yen (approximately 45%) and
Juroku TT Securities 188.6 billion yen (approximately 55%)

[Juroku TT Securities] Offering value-added
solutions through bank-securities partnership Juroku TT Securities has offered value-added solutions through banksecurities partnership, thereby seeing a solid increase in its number ofaccounts amid a sluggish stock market
 The Nagoya Sales Office was promoted to the Nagoya Branch in April
2022 to become a more local community-based securities company.
(100 million yen)(100 million yen)

Juroku Bank

5,000
4,000
3,000

3,445

Juroku TT Securities

2,000[Progress rate]
Vs. FY2030 target:
62.6%

Number of accounts
20,679(Accounts)
19,65618,48420,00017,354
15,2431,500

12,680

1,000
1,559

1,028

15,000
1,700

1,872

21/3

21/9

1,869

1,886
10,000

1,344

500

2,000

5,000
20/3

1,000

Assets in custody

5,500

20/9

22/3

22/9

1,886

0
FY2022First half

FY2022・・・・・・

FY2030
FY2030[Target][Target][Definition]
Juroku Bank: Investment trust
Juroku TT Securities: Stocks, bonds, investment
trusts, fund wraps, etc.

Asset formation support


The amount of monthly contribution to investment trust and the number of contracts
continued to show steady increaseTo cater to the diverse needs of customers, November 2022 saw the launch of
WealthNavi for Juroku Bank, an automated asset management service[Juroku Bank] Expanding regularinvestment trust For customers’ stable asset formation, efforts have been
focused on expanding regular investment trusts optimized tolong-term, regular, and diversified investments
Monthly contribution(Million yen)

900
800
700
600
500
400
300
200
100

Number of subscribers
23,861(Accounts)
25,00022,12919,50320,00016,757
14,59012,377

816

934

649
233

352

20/3

20/9

15,00010,000

482

5,000
21/3

21/9

22/3

22/9

27

Materiality ～Revitalization of the local economy～ NOBUNAGA Capital Village Co., Ltd., an investment company that launched in April 2021, is proactively working on local VC and CVC
investment.

Local VC and CVC investment[NOBUNAGA Capital Village] Investment in FY2022 first half

 NOBUNAGA Capital Village Co., Ltd., an investmentcompany that launched in April 2021, is rolling out local
VC and CVC investment

Local
VC

 Building an investment environment by, for instance,joining as an associate organization in Chubu STARTUPRUNWAY and the Central Japan Innovation Initiative’s
human resources development program Beyond theBorder 2.0
Local VC CVC(Cases)

5

5

3

3

2

2

FY2021
Second half

FY2022First half

5
4
3

3
2

2

1

and 1 other company(Sales of general-purpose robot)

CVC(Decarbonization-support consultation)(Development ofrelational population)(Credit card for young people)

NOBUNAGA Capital Village provided information about“Hoikuen Ryugaku®” (lit. “nursery school study trip”)--a
study trip program offered by KitchHike, Inc.--to Mino
City, Gifu, which supports regional vitalization efforts.
KitchHike and Mino City accordingly partnered to start ademonstration experiment on the program in October
2022.
This is a case in which the Group’s internal
collaboration went beyond investments and had asynergistic effect on the revitalization of local
communities

10

FY2021First half

[Juroku Bank]Management succession
consultation

Management succession consultation
 Realizing the best matching based on a deep
understanding of customers’ business Raising needs based on various seminars andindividual company consultation

Human resource referencing
 Holding periodic workshops and sending news
about examples to spread human resource
referencing jobs to the sales frontlines andfurther enhance the quality of cases[Juroku Research Institute]
Human resource referencing

Successful M&A cases
Management succession
consultation cases(Cases)

70
60
50
40
30
20
10
0

62
23

39

FY2020

59
8

190

200

40

150

7

100

33

50

51

FY2021

Applications
Successful referencing(Cases/People)

FY2022First half

60
98
12

86
28

130

58

86

0
FY2020

FY2021

FY2022First half28

Materiality ～Sustainable development of the local community～

Sustainable development of the local community
VisionUsing local resources to create comfortable and appealing communities, and promote digital transformation of local
communities

ActionKey items

Creating comfortable and appealing communities

 Local revitalization initiatives
 Sustainable tourism development
 Social impact investments DX-support consultation
 Payment-clearing solutions
 Cashless transactions

・ Community development fund / PFI initiatives
・ Renovation / redevelopment support
・ Area design management for tourism destinations, shopping malls, etc.
⇒ Establishing Kanda Machiokoshi Co., Ltd. Expanding businessrange

Using local resources to create value that will benefit future generations

・ Industrial – Bureaucratic – Academic partnership using extensive networks
・ Branding local resources
・ Supporting tourism marketing
・ Social impact investment

Sustainability KPIs
Targets by FY2030

Promoting digital transformation of local companies and local governments

・ Offering solutions based on IT consultation
・ Supporting cashless transactions with new payment-clearing services
・ Supporting digital transformation of local governments
Expanding business⇒ Establishing Juroku Densan Digital Service Co., Ltd.
range

Social impact investments

2 billionyen

DX-support consultation
cases

3,000
cases

29

Materiality ～Sustainable development of the local community～
 Kanda Machiokoshi Co., Ltd., which launched in April 2022, started its local crowdfunding program OCOS.
 Juroku Densan Digital Service Co., Ltd., which started operating in March 2022, saw a solid increase in its number of orders.

Social impact investments

KPI

 Kanda Machiokoshi Co., Ltd., which launched in
April 2022, started its local crowdfunding
program OCOS, the first initiative of its kind as afinancial institution in the Tokai region
 Kanda Machiokoshi was registered as a type II
financial instruments business required ininvestment-type crowdfunding, in addition topurchase- and donation-type crowdfunding A total of 4 projects have been set as of late
October 2022, earning a total of 5.8 million yen

DX-support consultation cases

KPI Juroku Densan Digital Service Co., Ltd., whichstarted operating in March 2022, provides IT
consulting that closely supports customers-particularly those introduced by Group
companies--and proposes optimal solutions
 The first half of FY2022 saw 48 orders
 Efforts are being focused on DX-support byholding preliminary case consultations andworkshops among other steps to strengthen
information-sharing with Juroku Bank branches Opportunities to obtain findings are provided byperiodically holding seminars to support local DX
initiatives[Kanda Machiokoshi] Local crowdfunding OCOSThe first project, which involved developing a hands-on Mino traditional Japanese
paper-making and accommodation facility at a Mino City community whose number of
traditional paper craftsmen has declined, exceeded its 4 million yen target andearned 4.5 million yen
Cumulative total (as of late October 2022)

No. of posts started

4No. of purchased
applications

350

Amount ofpurchased
applications

5,801 thousand yen

Membership

334[Juroku Densan Digital Service] DX-support consultation
 Expanding available solutions as necessary under partnership with various
IT vendors to cater to customers’ diversifying challenges
 Particularly receiving cases on job-streamlining (e.g., remote maintenance,
information sharing) and security measures to respond to an increase inglobal cyberattacks(Cases)
250
3,000
3,000
2,950
200
150
100
50

48
0
FY2022First half

FY2022・・・・・・

FY2030[Target]30

Materiality ～Sustainable development of the local community～
 Kanda Machiokoshi Co., Ltd. became involved in supporting 4 local communities by, for instance, contracting public services andproviding consulting for governmental subsidies.
 Juroku Card Co., Ltd. proactively supports private firms and local governments in their transition to cashless transactions.

Sustainable tourism development
 Providing solutions considered necessary in advancing thesustainability of Gifu’s tourist destinations and commerce
districts
 Becoming involved in supporting 4 local communities by, forinstance, contracting public services and providing consulting forgovernmental subsidies
Gifu City Nagaragawa hot springs and Gifu’s castle town:
JTA’s subsidy on united local community initiatives
Developing a regional plan (partnering with ORGAN,
a non-profit) Gifu City: Supporting renovation project of old
private houses Gifu City: Serving as a member of a working groupon strategies for Japan’s heritage[Kanda Machiokoshi] Tourism marketing
DMO support
Shirakawa Village
Japan Tourism Agency’s (JTA) project todemonstrate sustainable tourism
Study on earning structure for local communities(Collaboration with Juroku Research Institute)

Takayama City

Commissioned study on introduction of local
discretionary tax (accommodation tax)
(Collaboration with Juroku Research Institute)Appointment as economic policy advisor

Nakatsugawa City

Contracted job as CFO of Nakatsugawa Tourism BureauJTA’s project on sustainable tourist destination model-> Demonstration experiment for parking lot use in Naegi
Castle (November)

Transitioning to cashless transactions
 Juroku Card collaborated with Group companies to makeproposals to entities with which agreements that have yet to be
made Informing customers about responding to the Law Concerning
Preservation of National Tax Records in Electronic Form,
enforced in January 2022, and suggesting corporate cards
No. of merchant agreements(Cases/Users)

1400
1200
1000
800

Subscriptions of corporate cards, etc.

1233
56
526

No. of corporate credit card subscriptions

1382
53
589

600
400

854
43
425

651

740

200

386

0
FY2020

FY2021

FY2022First half

[Juroku Card] Supporting the introduction of cashless
payment terminals for local governments
 Supporting the introduction of cashless
payment terminals in Kasamatsu City, Gifu
 Supporting not only private firms but also local
governments in their transition to cashlesstransactions, and thereby contributing to DX inlocal communities[Juroku Card] Holding a seminar on responding to the revised Law
Concerning Preservation of National Tax Records in Electronic Form
 Hosting a seminar on responding to the revised Law Concerning
Preservation of National Tax Records in Electronic Form to promotelocal operators’ understanding Contributing to local communities’ further transition to cashlesstransactions by sharing streamlined accounting treatments withcorporate credit cards, amid rising expectations for better
productivity through digitized accounting

31Materiality ～Environmental conservation and climate change actions～

Environmental conservation and climate change actions
VisionWorking on reducing the environmental impact and helping local companies achieve carbon neutrality in order to build adecarbonized society

ActionKey items

Supporting local companies’ carbon neutral business management

 Decarbonization support for local companies

・ Offering decarbonization consultation services
・ Providing environment-related finances (investments, loans, leasing)・ Supporting renewable energy business・ Providing a wide range of solutions involving external business partners
Implementing initiatives for environmental conservation andenvironmental impact mitigation
・ Updating air conditioners and introducing LEDs to stores to reduce power
consumption
・ Expanding areas for introducing CO2-free electricity
・ Promoting paperless operations to reduce the use of paper・ Adopting HVs / EVs for sales fleet
Responding to climate change and disclosing information in line with
TCFD・ Building a governance structure for climate change・ Advancing scenario analysis
・ Measuring SCOPE３ and setting reduction targets
・ Enhancing the quality and quantity of information disclosure CO2 emission reduction
 Paper use reduction
 Use of HVs and EVs for sales fleet

Sustainability KPIs
Targets by FY2030
CO2 emission (vs. FY2013
level)

50%
reduction

Paper use (vs. FY2019
level)

50%
reduction

32

Materiality ～Environmental conservation and climate change actions～ The Group aims to reduce 50% of its CO2 emissions generated from energy use (Scopes 1 and 2) by FY2030 versus FY2013 levels.
 The Group also aims to promote paperless operations and halve paper use by FY2030 versus FY2019 levels.

CO2 emissions (vs. FY2013 level)

KPI

 The first half of FY2022 saw a smooth drop in CO2 emissions(Scopes 1 and 2) versus the baseline FY2013 first half
 In November 2021, the Group saw the introduction of Gifu
Prefecture-generated, CO2-free electricity for use at Juroku
Bank’s head office building The Group gradually updated air conditioners and introduced
LEDs to stores Calculations for the categories in the table below have started as
to Scope 3, and considerations are underway to disclose othercategories down the line
Scope 3 items

FY2021[Category 6] Business trips

49[Category 7] Employee
commuting(t-CO2)
12,000

FY2022 firsthalf

13,110

- 50%

8,000

8,600
4,000

FY2013Comparedwith first half
(Provisional- 39.1%

Carbonneutrality0

figure)0

FY2013・・・

FY2021

FY2022・・・

3,135

Paper use (vs. FY2019 level)

6,555

FY2030[Target]

FY2050[Target]KPI The first half of FY2022 saw a smooth decline in paper use
versus the baseline FY2019 first half
 The Head Office building
underwent a change in its
layout with the introductionof monitors, abolishment of
trash cans, and reductions
in storage space, copy
machines, and printers alike Efforts will gradually bemade to promote electronic
contracts, introduce RPA to
reduce paper-printing, andintroduce lot scanners
Photo of office after change in its layout

50,000
FY2022 firsthalf

45,00040,00035,00050,73548,96645,85230,000Vs.
FY2013first half (Provisional
figure)- 17.9%- 50%

25,00025,36820,000FY2019Fy2020

FY2021

FY2022・・・

FY2030[Target]33

Materiality ～Environmental conservation and climate change actions～ The Group provides a decarbonization-support consultation service to assist the decarbonization efforts of local companies.
 The Group has been selected for the financial institution portfolio carbon analysis pilot program assistance project, sponsored by
Japan’s Ministry of Environment (MOEJ) and for which applications were called in September 2022.

Decarbonization support for local companies
 The transportation equipment industry which serves a key
part of the Group’s sales territories is increasingly
developing plans for the achievement of decarbonization,
the importance of which is particularly rising amongautomotive-related firms[Juroku Bank] Carbon Neutral Navigator (August 2021)
 Juroku Bank offers consulting services for the visualization andreduction targets of customers’ greenhouse gas emissions, thereby
supporting the carbon management of customers

Supported by

Identifying
the statusquo The Juroku Bank has started a collaboration with
WasteBox Co., Ltd. and provides a wide range of solutions
by working in concert with external business partners
Consulting solution

Identifying Scope
1/2 emissions

Identifying the damage
business activities have doneto the planet, using aninternational standard called
the Greenhouse Gas Protocol

PromotingPhase to visualize anddevelop reduction target

Identifying Scope 3

Largeenterprise,etc.

Mediumsizedenterprise

Small andmedium-sizedenterprise

Supporting disclosure
based on TCFD
recommendations

Carbon Neutral
Navigator
SBT certification
supportPhase to decarbonize
Reducing/
Disclosing
Shifting from businessmatching to in-houseprocessing

Providingdecarbonization plans

To beexpanded








Supplying renewableenergy-source
electricity
Selling energysaving equipment
Selling production
management system
Improving
distribution
Selling andpurchasing credits

Properly disclosing progressannually

Managementintegrated
emissions
reduction/disclosur
e activity

Offering

Setting thetargetSetting SBT
standard
reduction
targetFY2021

Setting targets (SBTi)

FY2022 first
half

Carbon Neutral Navigator

47 cases

32 cases

SBT certification support

2 cases

13 cases

Selected for the MOEJ-sponsored financial institution
portfolio carbon analysis pilot program assistance project The Group has been selected for the MOEJ-sponsored financial
institution portfolio carbon analysis pilot program assistance project

Identifying
emissions
SaaS By participating in this project, the Group will accumulate portfolio andcarbon analysis know-how for identifying and calculating customers’
greenhouse gas emissions, and utilize the obtained insight and analysis
results in supporting customers’ decarbonization down the road34

Materiality ～Empowerment of diverse human resources～

Empowerment of diverse human resources
VisionPromoting diversity and work style reform to create a workplace that empowers diverse human resources

ActionKey items

Building a corporate culture that boasts diversity as strength Development of female managers

・ Offering re-skilling training for work conversion and work scope expansion
・ Actively appointing women to managerial positions
・ Abolishing uniforms and insignias for mentality reform・ Employing seniors, the disabled and those making a career change

Implementing work style reform to provide a good work-life balance
・ Obtaining healthy management certification
・ Encouraging workers to claim paid leave
・ Encouraging male employees to claim parental leave / spouse maternal leave
・ Promoting diverse work styles involving remote work and staggered commuting

Creating workplaces that facilitate growth of diverse human resourcesand empower them・ Expanding investment in human capital by increasing opportunities to participate
in trainings
・ Developing specialized human resources and helping them attain qualifications
・ Developing human resources capable of building trusting relations with customers
・ Utilizing a career-challenge system Encouragement to claim paid leave Promotion of parenting leave for men
 Development of IT / DX human resources

Sustainability KPIs
Targets by FY2030
Ratio of female managers

２０％

Ratio of paid leaveclaimed

８０％35

Materiality ～Empowerment of diverse human resources～ The ratio of female managers in the first half of FY2022 reached 7.4%, up 0.7 percentage points from the preceding term.
 The ratio of paid leave claimed in the first half of FY2022 was 27.4%, and is expected to reach at least 50% on a full-year basis.

Ratio of female managers

KPI

 The Group appointed 4 women to managerial
positions in the first half of FY2022 to build a
corporate culture that boasts diversity, thereby
improving the ratio of female managers to 7.4%
 The Group has focused efforts on enhancing a
support structure by, for instance, drawing up aplan to train and empower female personnel andproviding the training in a phased manner

Ratio of paid leave claimed

(%)
10
20

Ratio of female managers

9
8

6.7

7

Promotion of parenting leave for men April 2017 saw the introduction of a spouse maternal
leave system to encourage male employees to participate
in childcare, and a claim rate of 90% or higher has been
maintained since the introduction of the system
 HR systems underwent a partial change in response to
the enforcement of the amended Act on Childcare Leave,
Caregiver Leave, and Other Measures for the Welfare ofWorkers Caring for Children or Other Family Members on
October 1, 2022

7.4

5.5

6

FY2022first half

4.2

5
4

FY2019FY2020KPI The Group aims to reach an 80% ratio of paid
leave claimed as part of a work style reform
initiative to achieve a good work-life balance The ratio reached 27.4% in the first half of
FY2022, and is expected to reach at least 50%
on a full-year basis

20.0

FY2021

FY2022・・・・・・

No. of paid leave claimed (second half)
No. of paid leave claimed (first half)
Ratio of paid leave claimed

(%)
48.2

54.4

FY2030[Target]80.0(Days)
20

47.7

50
4.74
0

4.76
FY20194.16
6.44
FY2020

10
4.54

27.4

4.76

5.32

FY2021

FY2022

FY2022first half・・・・・・

0
FY2030[Target]Development of IT/DX human resources The Group supports initiatives for empowering each
employee to develop IT/DX human resources and createa digital-literate organizational climate by, for instance,
recommending employees to take programming courses
and setting a premium for earning digital-related public
qualifications
 The Group recommends all employees take the IT
Passport Examination to acquire basic IT knowledge, andsuccessful examinees to obtain advanced digital-related
qualifications

36

Materiality ～Advanced governance～
Advanced governanceVisionAdvancing governance and disclosing information appropriately to establish a transparent management structure

ActionKey items

Advancing corporate governance・ Assessing the effectiveness of the Board of Directors
・ Advancing the internal auditing structure
・ Building a sustainability management structure
・ Introducing sustainability elements to directors’ remunerations

Strengthening risk management and compliance・ Risk management stance・ Compliance stance・ Preventing money laundering・ Information security

Achieving stakeholder engagement
・ Engagement with customers
・ Engagement with managers
・ Engagement with local communities
・ Engagement with shareholders and investors

Third-party involvement in assessing the effectivenessof the board

Third-party involvement in assessing the advancement of the internal

auditing systemInitial response training for emergency preparednessDialog with investors

Sustainability KPIs
On-going targets
Initial response training
for emergency
preparedness

No less than
twice a year

Dialog with investors

No less than
10 times a
year

37

Materiality ～Advanced governance～ As on-going targets, the first half of FY2022 saw 3 sessions of the initial response training for emergency preparedness (progress
rate: 150%) and 8 dialog sessions with investors (progress rate: 80%).

Initial response training for emergency preparedness

KPI

 The first half of FY2022 saw 3 initial response training sessions
versus the on-going target to implement at least 2 sessions ayearBCP training simulating wind and flood damageBCP training simulating earthquakeInitial response training for ATM malfunction

 The Group will continue to develop potentially important themes
based on environmental changes and needs surrounding theGroup, and conduct initial response training for emergency
preparedness accordingly The Group decided on a third-party assessment
organization in response to presentations fromseveral groups
 The Group will perform third-party-involved
assessments to widely share the status quo of theGroup’s stance on internal auditing and further
advance auditing

Corporate governanceOn-going targets

No less than
twice a year

Result of FY2022 firsthalf

3 sessions (progress
rate: 150%)

Composition of the Board

KPI

Dialog with investors

Third-party involvement in assessing theadvancement of the internal auditing system The first half of FY2022 saw 8 dialog sessions versus the ongoing target to implement at least 10 sessions a year The Group will continue to reinforce initiatives aimed at proactive
dialog and dialog content enhancement

On-going targets

No less than
10 times a year

Result of FY2022 firsthalf

8 sessions (progress
rate: 80%)

Third-party involvement in assessing theeffectiveness of the Board

Selection processes are underway for an assessment organization in
response to propositions from several outside organizations



The Group will continue its efforts to conduct an assessment in or beyond
the next fiscal year The Group strives to ensure that the Board has a well-balanced
structure with diverse knowledge or expertise To enhance not only management supervision but also theBoard’s objectivity and rationality in decision-making, at least
one-third of the total number of Directors consist of
Independent Outside Directors
Internal Directors (7 members)

Outside Directors(4 members)

Establishment of Management Advisory Board
 To further ensure transparency and fairness of theBoard’s decision-making, the Group has established theManagement Advisory Board, which consists of two
committees, the Personnel Affairs Committee and theCompensation Committee, as an advisory body to theBoard of Directors
 Each committee is chaired by an Outside Director, andthe majority of the members are Outside Directors

38

Disclosure based on TCFD recommendations
Governance
Sustainability management structure
As stated in the Sustainability Policy, the Juroku Financial Group recognizes sustainability initiatives (e.g. on climate change) as an importantmanagement challenge. “The Juroku Financial Group SDGs Declaration” lists “environmental conservation and climate change response”
as one of key challenges.
In order to address this challenge appropriately, the Group has set up the Sustainability Council, which is chaired by the President and consisting of Group Management
Council members, Division General Managers and the head of the Sustainability Management Office. The Council meets at least once every 3 months in principle todeliberate on key challenges such as drawing up a policy for implementing initiatives for climate change and other sustainability issues, setting targets and checking progress,
and reflecting results to management strategies and risk management. Items deliberated on at this Council are reported periodically to the Board of Directors at least once a
year for appropriate supervision.

Strategy
Opportunities and risks brought by climate change
The Juroku Financial Group analyses risks and opportunities associated with climate change in the timeframes of “short term,” “mid term” and “long term.” The results ofanalyzing scenarios are used to organize active dialog (engagement) for supporting customers who are working toward a decarbonized society, and reinforce financial
support in the forms of sustainable financing and transition financing to create business opportunities and reduce risks.
Assessment item

Main opportunities and risks

Timeframe

Resource efficiency
Opportunities

Increasing business opportunities, e.g. offering investments, loans and consultation services to help customers’ transition to a decarbonized society
Reducing business costs through resource saving and energy saving
Boosting corporate value by implementing appropriate initiatives on climate change and disclosing information about them
Increasing public works projects for disaster management the demand for customers’ capital investment fund

Short- to long-term
Short- to long-term
Short- to long-termMid- to long-term

Acute risks

 Deterioration in customers’ business performance and damage to collateral value due to the increase in frequency and severity of abnormal climate
patterns, causing a decline in loan asset value
 Business disruption at Group sites affected by a disaster

Short- to long-term
Short- to long-term

Chronic risks

 Deterioration in customers’ business performance and damage to collateral value due to higher average temperature and higher sea level, causing
a decline in loan asset value

Mid- to long-term

Energy sources
Products and services






Robustness

Physical
risks
Risks

Policies / laws
Transitionalrisks

Technologies
Market Deterioration in customers’ business performance due to climate-related regulation tightening, failed investment in low-carbon technology andchanges in consumer behaviors, causing a decline in loan asset value
 Slower implementation of appropriate climate-related initiatives and disclosure of information about them than competitors, lowering corporate value

Mid- to long-term
Short- to long-term

Reputation※ Short-term = Around 5 years; Mid-term = Around 10 years; Long-term = Around 30 years

39Information disclosure based on TCFD recommendations
Scenario analysis
The Juroku Financial Group conducts scenario analysis on physical risks and transitional risks in order to identify how climate-related risks would affect the Group.

Physical risksRain-prone Japan experiences heavy precipitations each year, causing rivers to swell and triggering flooding. In recent years, the number of heavy localized rainstorms havebecome more common, causing significant damage to many areas including our sales territories.
In terms of physical risks, we have anticipated an increase in the frequency of large-scale flooding due to climate change, and calculated the impact of climate-attributablelarge flooding in Gifu Prefecture on the Group’s credit-related expenses on the premise of the RCP8.5 scenario (４℃ scenario). The result points to the cost increase of
approx. 3.1 billion yen.
Transitional risks
Following qualitative analysis on sectors with large credit exposure and sectors referred to in TCFD recommendations, we have identified “electric power sector” and“automotive sector” as sectors of significant transitional risks for the Group.
In terms of transitional risks, on the premise of the RCP2.6 scenario (２℃ scenario) and NZE scenario (1.5 ℃ scenario), we calculated the impact on the Group’s creditrelated expenses in view of the increased cost of transition into a decarbonized society (e.g. introduction of the carbon tax), decline of net sales and future market trends. The
result points to the cost increase of approx. 2.2 billion yen.

Physical risks

Transitional risks

Scenario

IPCC／RCP８.５ scenario （４℃ scenario）

IPCC／ＲＣＰ２.６ scenario （２℃ scenario）
IEA／ＮＺＥ scenario （１.５℃ scenario）

Risk event

Large-scale flooding

Transition to a decarbonized society

Analysis target

Borrowers in Gifu Prefecture
Collateral of real estate (buildings) in Gifu Prefecture（excluding secured home loans）

Electric power sector
Automotive sector

Analysis content

Deterioration of business performance due to customers’ businesssuspension / stagnation
Damage to the Group’s real estate (buildings) collateral

Deterioration of customers’ business performance due to cost increase
and sales decline

Analysis period

Up to 2050

Up to 2050

Analysis results

Increase of credit-related expenses: Up to 3.1 billion yen

Increase of credit-related expenses: Cumulative total of approx. 2.2
billion yen※ IPCC （Intergovernmental Panel on Climate Change）※ IEA （International Energy Agency）

Analysis results are calculated under specific preconditions.
The impact on the Group’s finances has been found to be limited within the scope of this analysis, but we will continue to enhance thescenario analysis.

40

Information disclosure based on TCFD recommendations
Carbon-related assets
Of carbon-related assets defined in the TCFD recommendations, loan balance to energy and utilities sectors accounts for 1.4% of the totalloan balance. We will examine target sectors for other carbon-related assets for future information disclosure.
Ratio of carbon-related assets against Juroku Bank’s loan balance(as of the end of March 2022)（Unit: million
yen）
Utilities

Energy

１.０％

Total

０.４％

１.４％

※ Loan balance = Total of loans, foreign exchange, acceptanceand guarantee, etc.
※ Utilities include electric power and gas supply sectors andexclude water and renewable energy power sectors

Risk management
Approach to risk management
The Group has an integrated risk management framework in place, managing its overall financial risks in the categories of “credit risk,” “market risk,” “fluidityrisk” and “operational risk.”
Climate change risk is recognized as one of the top risks and a driver of financial risk, and is controlled with the risk management framework for credit risk
and operational risk.

Formulating an investment and lending policy
The Group has the Investment and Lending Policy for Creation of a Sustainable Society.
Basic policy
The Group strives to contribute to medium- to long-term enhancement of corporate value and sustainable growth ofcustomers by vigorously supporting initiatives to resolve environmental and social issues through investment and lending.
Moreover, the Group strives to mitigate or avert the impact of investment and lending that may pose a significant risk orhave a negative impact on the environment and society by subjecting any such investment and lending to meticulous
consideration.

Sector-specific policies
Coal-fired thermal
power generation

Juroku FG will not invest in or extend loans to projects that involve building new coal-fired thermal power stations or expanding existing power generation
facilities, while taking a prudent approach in considering exceptional cases in response to emergencies or in projects in line with the Japanese government’s
energy policy.

Ws

Juroku FG will not invest in or extend loans to companies that manufacture weapons, regardless of fund usage, in view of the inhumane nature of cluster
bombs, anti-personnel landmines and biological / chemical weapons.

D e f o r e s t a t i o n

Juroku FG will not invest in or extend loans to projects that involve illegal logging or forest incineration. Investment in / loan to projects whereby the fund isused for operations that involve deforestation will be considered carefully in view of their impact on the local economy and the environment.

e

a

p

o

n

41

Information disclosure based on TCFD recommendations
Indicators and targets
CO2 emission reduction targets
The following reduction targets are set on CO2 emission generated by the Group’s energy use in our efforts to establish a decarbonized society.
TargetHalve CO2 emission by FY2030 from the FY2013 level and achieve carbon neutrality by FY2050

ＣＯ2 emission（ＳＣＯＰＥ１、２）

Carbon neutrality
FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021ＣＯ2 emission（ＳＣＯＰＥ３）
FY2021 results【Category ６】 Business trips【Category ７】 Employee commuting

In FY2021, the Group reduced CO2 emission
by 852 tons from the previous year, due partly
to the introduction of CO2-free electricity
generated in Gifu Prefecture for use at Juroku
Bank’s head office building, which began inNovember.
This has reduced our CO2 emission by 34.4%
in FY2021 compared to the FY2013 level.

FY2050target

FY2030target（Unit：t-CO2）
４９
３,１３５

Calculation methods for other categories will be explored for future information disclosure.

Sustainable finance targets
The following targets are set on sustainable finances in order to support, through out business, customers’ initiatives for solving environmental
issues and to contribute to establishing a decarbonized society.
T a r g e t s

２ trillion yen (including 800 billion yen in the environmental field)

P e r i o d

９ years (FY2022 – FY2030)

T a r g e t
investment andlending, etc.

 Sustainable finances ： Investment and lending for SDGs / ESG initiatives that contribute to building a sustainable society
 Environmental field ： Investment and lending for initiatives to reduce environmental impact

42Section I: Interim Results for FY2022

Section II: Initiatives for Sustainability

Section III: Progress in the First Management Plan

Section IV: Future Direction of Management

Overview of the First Management Plan The Group has taken various measures by setting the final fiscal year under the first Management Plan as a period to convert theGroup’s business model and build a foundation for sustainable growth.

First Management Plan
Period: October 2021–March 2023
Maximizing
groupsynergy

Numerical targets for FY2022
Consolidated net income: 16 billion yen and above

Reforming thementality andbehaviors of
employees anddirectors

Utilizingcustomer base,information andnetwork

Our vision

Consolidated capital adequacy ratio: 10% and above

To become a comprehensive
Consolidated adjusted OHR: 65% and above
Consolidated non-interest income ratio:

30% and above

Connecting people,
local communities and futurefinancial group that builds afuture with local communities
and achieves sustainable growthLong-term indicator
Consolidated ROE

Regional
commitment
strategy
Handling
comprehensive
local design

DX strategy

5% and above

Improving
convenience andproductivity

with local economies

Customer-firstmarketingstrategy
Further exerting
problem-solving
capacity

October 2021–March 2022

April 2022–March 2023

April 2023–

Period to put the Groupstructure on track

Period to convert the business model and build afoundation for sustainable growthSecond Medium-Term
Management Plan

■Results
・Consolidated core net
operating profit
More than 30 billion yen
・Consolidated net income
Fourth consecutive increase

By further promoting the 3 strategies—the growth drivers of which involve
expanding business range and responding to diversifying needs—the Groupseeks to accomplish its first Management Plan while also converting its businessmodel and building a foundation for sustainable growth

As an important phase through which to advance from the first
Management Plan toward the next growth stage, the Group aims tounite its efforts to accomplish the Plan

The Group seeks to accurately
respond to changes in the businessenvironment and achieve further
growth while wielding, to the
maximum, the combined strength
the Group enhanced with the first
Management Plan

Next

Manageme
nt Plan44

Maximizing group synergy
 By expanding the Group’s business range and further collaborating with Group companies, the Group strives to achieve the growthand prosperity of local communities as a comprehensive regional financial service provider.

Referring humanresources andassistingmanagement

Fund
management

JurokuResearch
InstituteEnhancing thefinancialintermediaryfunction

JurokuBank

Improving theGroup’s productivity

JurokuBusiness
Service

Juroku TT
Securities

Forming assets

JurokuCreditGuarantee

Inter-Group collaboration and interchange
initiatives
Utilizing acareerchallengesystemPromotinginter-Groupcustomerreferencing

JurokuCard
Catering tocashless society

Enhancingskills andexperiencethrough
networking

JurokuLease
NOBUNAGA
Capital Village

Supporting
capitalEstablished on
April 2021

JurokuDensanDigitalService

Supporting digitaltransformation

Joint venture launchedon March 2022

Kanda
Machiokoshi

Supporting capital
investments

Developing
community
Established on
April 2022

Juroku Densan Digital Service and Kanda Machiokoshi are licensed as non-bank banking-service enhancement companies.

45

Progress against numerical targets
 Various numerical targets have been achieved ahead of schedule in the March 2022 term. The September 2022 term has seen
further enhancements in profitability, fiscal integrity, and efficiency.
Consolidated net income(100 million yen)

Numerical
targetConsolidated capital
adequacy ratio (%)

Numerical
targetSecuring good profitability

Maintaining high fiscal integrity

Numerical target:
No less than 16
billion yen

171

147

128

Numerical
target: No lessthan 10%

10.52

10.67

22/3

22/9

9.93

106

103
9.27

9.08

19/3

20/3

21/3

Consolidated adjusted OHR(%)

Numerical
target22/3

Securing highefficiency

19/3

22/9

Numerical
target20/3

Achieving thenumerical target

Consolidated non-interest profit
ratio (%)

21/3

Long-term

Consolidated ROE (%)

indicator

Improving levelyear after year

34.05

5.29

75.19

Long-term indicator:
No less than 5%
Numerical
target: No lessthan 30%

68.69
Numerical
target: No
more than 65%

66.51

30.53
4.36
29.10
3.98

58.87

3.65

26.53
54.76
3.05

24.04
19/3

20/3

21/3

22/3

22/9

19/3

20/3

21/3

22/3

22/9

19/3

20/3

21/3

22/3

22/9

46

Management strategy ～Customer-first marketing strategy～
 Amassing the Group’s management resources to fulfill the consulting function.
 Offering diverse solutions for various issues.

Market-in approach strategy– Further exerting
problem-solving capacity –Business matching Develop human resources for boosting the Group’s solutionpresenting capability for corporate clients, use the Bank’s (Million yen)150
customer base, information and network, and collaborate withGroup companies to offer diverse solutions to issues at each of
corporate clients’ life stages.

Priority
measureOffering diverse solutions to issues at eachof the corporate clients’ life stages

 Reinforcing solution-presenting capability

Foundation/
GrowthstagesLease sales

Successful cases showed a solid increase
resulting from repeated dialog withcustomers and the provision of appropriate
solutions for needs and challenges(Cases)Sales increased steadily with stronger
collaboration between Juroku Bank andJuroku Lease(100 million yen)

Closing fee

Net sales
1,500

Successful cases
121

1,088

55

115

250

1,139

1,000

258

265

200
150

57
670

50

300

247

97

100

Stability
stage

500

132

100

FY2022first half

50

Boosting
コミュニケーcommunicati
ション
on能力向上capability

Providing
研修の充実
enhancedtraining

Offering
programs
専門 fordeveloping
人材育成
specialized
プログラム
human
resources

Developing human

顧客との強固な関係を
resources capable ofbuilding strong ties構築できる人材の育成
with customers

 Initiatives in the foundation and growth stages▶ Supporting fundraising through equity investment, andassisting the expansion of sales channels through businessmatching, etc.

 Initiatives in the stability stage▶ Facilitating leasing, diversification of the means ofcapital fund-raising, human resource reference,
cashless adaptation, digital transformation, etc.
 Initiatives in the maturity / regeneration stages▶ Assisting project handling by bank branches / management
succession support office, collaboration with specialized
consultants, and hands-on help

0

155

230
0

21/3
21/3
22/3
22/3
23/3
First Second First Second First

0
20/3

21/3

22/3

23/3

Developing human resources to strengthen sales capabilities
 Enhancing skill level-based training curricula to develop humanresources that can provide diverse solutions to resolve customers’
challenges
Skill level

Solution job foundation training
Solution capability enhancement training
Individual-related sales training for liaison staff
Corporate solution-related training for FA staff

47

Management strategy ～Customer-first marketing strategy～
 Amassing the Group’s management resources to fulfill the consulting function.
 Offering diverse solutions for various issues.

Market-in approach strategy– Further exerting
problem-solving capacity –• Expand Group collaboration / alliance, and offer channels
optimized to the needs of customers to build a consultation
system toward establishing lifelong trading relations

FA staffing and balance of assets in custodyMaking long-term proposals that arein synch with customers’ life plans
while increasing FA staffing(People)Assets in custody400

FA staffing

Building a consultation system toward
establishing lifelong trading relations

 Enhancing face-to-face channels▶ Offering value-added solutions through bank-securities
partnership▶ Offering long-term perspectives in line with customers’ life plan
 Addressing the needs for non-face-to-face transactions▶ Developing smartphone-based systems for building assets andraising loan needs▶ Adopting cashless transactions for improved convenience

Reinforcing Group collaboration

Juroku TT
Securities

JurokuBank
Alliance

Seniors

Cashless payment

Juroku Card
Juroku Credit
Guarantee

Retiredgroup

Consumption-type loan

Home / education fund

Asset building
Developing
consultation humanresources
Improving expertise

App function

No. of referrals(accumulative)
Accounts opened(accumulative)

3,500

160

120
120

3,039

351

103
80

304

2,586

56

67

2,500
250

268

40

255

16

0
2,000
20/9
21/3
21/9
22/3
22/9
[Definition]
Juroku Bank: Investment trust + Juroku TT Securities: Bonds,
stocks, investment trusts, fund wraps, etc.

200

Asset-building
group(Cases)160

300

Group-based consultation system toward establishing lifelong trading relations

Parentinggroup

The number of consultation casesrose as a way of smooth asset
succession and property
management for older age

3,000



Youths

3,445



381

 Strengthening alliance▶ Expanding trust and insurance services to cater to customer
needs

Customer
base
Information
Network

3,489

3,341
350

Priority
measure(100 million yen)

Referral of private trust experts

26
13

21/3
Second

22/3
First

22/3
Second23/3
First

The Juroku Bank’s entry into trust services and release of first-ever trust product in JapanThe Juroku Bank obtained a license on September 27 to operate as a universalbanking entity, and started to offer a trust service accordingly
The Bank started offering “Juroku Ohitorisama Trust <Mirai Yoroshintaku>,” the firstever product in Japan to cover affairs subsequent to a customer’s death and money
trust concerning relevant costs in a single package
A single package to address issues andconcerns as to end-of-life planning
Funeral and burial

Erasure of digital artifacts

Sorting through belongings

I want all the data on mycomputer and smartphone
to be completely erased

I want someone to sort out
my belongings, so it won’t
disturb my neighbors

Property management

Asset management

I want arrangements such as remove of
the body from the hospital, funeral andburial to be smoothly carried out

Death notification

Pets

I want those close to me toknow about my death

I want my pet to be takencare of

Wealth Manager

Sales branches
Inheritance services /Estate settlement

48

Management strategy ～DX strategy～ Enhancing non-face-to-face channels to improve product / service convenience and expand general transactions.

DX strategy- Improving convenience  Enhancing non-face-to-face channels to improve product/ service convenience and expand general transactions
 Adopting advanced marketing based on data to address
diversifying needs

J Direct/Biz-J DirectPriority
measure① Enhancing non-face-to-face channels

Enhancing non-face-to-facechannels, with growth observed in J
Direct (personal customers) and
Biz-J Direct (business customers)▶ Expanding the functions of personal apps for improved
convenience▶ Building a platform as the gateway to corporate customers▶ Using a common platform for procedures to eliminate the useof seal and hardcopy forms in transactions

260

245

 Sharing and utilizing information internally and externally▶ Offering new financial services based on open API▶ Offering timely information services based on data analysis▶ Forming alliance to deliver IT consulting

200

150

19,491
220

18,785 18,931

18,000168

17,081

16,000180
160

14,000
20/9

21/3

21/9

22/3

22/9

225

206

100

200

156

50

0
21/3

21/9

22/3

22/9

DX initiatives: Improving convenience

Enhancing
non-face-toface channels② Data use and mass marketing

Amount of purchase

225

Using
data

Priority
measure20,000234

 Offering friction-less functions and services▶ Using tablet devices and AI in-store▶ Enhancing online functions and contents to broaden thescope of general transactions

Under partnership with OLTA, shortterm small funding is offered tocater to customers’ diversifying
fundraising needs.

(Users) (Million yen)
Biz-J Direct (right
271
axis)
22,000
250
258

280

18,149

 Expanding transactions that are completed online

J Direct (left axis)(Thousand users)

240

Juroku Cloud Factoring

FY2020–FY2021

FY2022
FY2022

Smartphone app Wallet +Promoting use

June 2022
More than 160 thousand
downloads

Introducing in-store
tablets

Further expanding
functions

Promoting fully-online
loan processing

Further expanding
functionsIntroducing/using CRM
smartphone app

Collaborating with Wealth
Advisors

Launching Juroku Densan
Digital Service

Rolling out IT
consultation service

49

Management strategy ～DX strategy～ Streamlining business with digital technology to optimize the distribution of management assets.

Redeployment of staff to growthareas

DX strategy- Improving productivity  Enhancing non-face-to-face channels to improve product/ service convenience and expand general transactions
 Adopting advanced marketing based on data to address
diversifying needs

Reducing job volume

 Redeploying human resources togrowth areas across the Group to
further boost the consulting
service function and Groupsynergy160

Aiming to reach 1,000 in
March 2023

1,000

Reduction target: 1.5 million hours

▶
▶
▶
▶

the

Utilizing workflow systems, teleconferencing, digital forms, etc. tocreate extra time for business activities
Using in-store tablet devices to shorten time for administration
Using digital technology to reduce back-office work and centralize itto the head office
Deploying human resources strategically from administration to highgrowth areas such as FA and Group companies

Priority
measure② Work-style reform and digitaltransformation support

 Work style reform and HR development▶
▶
▶

Expanding remote work to facilitate diverse work styles
Using IT tools to expand remote sales activities
Developing human resources in digital technology through alliance and ICT
solutions Work Facilitating digital transformation of customers
and local communities▶
▶
▶

Using alliance to promote customers’ digital transformation
Utilizing Group companies’ functions to facilitate cashless transactions bybusinesses and local communities
Building up digital transformation know-how such as teleworking, paperlesstransactions and table-based sales

900

922

60
834

700

37.4
110.4

86.3
70.0

31.5

91.6

30.0
54.8

40
20

147.8

37.1

100
80

890
800

40.0

0
21/3

21/9

22/3

22/9

20/3

21/3

22/3

22/9

DX initiatives: Improving productivity
FY2020–FY2021
Streamliningjobs

 Improving work processes and optimizing
distribution of management resources

128.7

120

Work-stylereform andDX support① Creating human resources in high-growthareas through work streamlining

Loan work reduction
Deposit work reduction

140
960

Priority
measurePromoting the elimination of back-officeadministration at Juroku Bank’s sales
offices with plans to reduce
administration work worth 1.5 million
hours in the March 2023 term versus thelevel recorded in the March 2017 term(Million hours)

Staffing in growth areas(People)

FY2022
FY2022

Reviewing back-office
work of bank branches

Expanding the scope of head
office-centralized jobs

Reviewing/simplifying
back-office jobs

Introducing lot scanners

Expanding head officecentralized stores

Expanding to all stores

Developing new OCR by
Juroku Densan Digital
Service

Considering customer
rollout

Development of IT and
DX human resources

Initiatives on IT Passport
Exam

50

Management strategy ～Regional commitment strategy～
 Playing a central role in revitalizing local communities through expansion of business categories.

Local commitment strategy– Comprehensive local design –Creating local brands Establishing solid relations with local stakeholders andfurther expanding business categories as a general
financial group to deploy financial services that contributeto the development of the local economy, thereby
contributing to local revitalization

Priority
measure① Boosting the appeal of
local communities

Project name*Includes figures from theformer Gifu Brand
Metropolitan Dissemination
Project Creating local brands▶

Branding local delicacies and disseminating their information in large
cities for PR▶

Rediscovering local resources and implementing measures to boost
local appeal to promote tourism
Coordinating industrial – bureaucratic – academic partnership toassist the development of new products Creating new business▶
▶

Assisting business creation and forming local communities
Expanding alliance and considering to establish communitydevelopment companies

Priority
measure② Providing assistance in solving
local issues

Facilitating urban redevelopment projects, PPP / PFI projects andfunds to revitalize local cities and encourage people to move in Assisting local government bodies’ work streamlining▶

Facilitating cashless transaction response and contracting public
services (policy adviser), etc.

Numberofsessions

Total
businesscases

March 2021 term
(interim)

3 times

34 casesCumulative total*

43 times

613 cases

After being selected as a consigneeof Ena City, Gifu’s premium e-gift
voucher service, the Juroku Bank
started providing a digital wallet
service for local government-issued
merchandise coupons jointly withNTT DATA Corporation and Infcurion,
Inc.
With the ability to charge via credit
cards and directly from bankaccounts, the service can offer
enhanced convenience based on
local governments’ incorporation ofmonetary functions

Creating new business Revitalizing central business districts▶

PeriodUtilizing local resources/Supporting local governments

 Utilizing local resources▶

The Gifu Brand Metropolitan Dissemination Project business sessions have been held since
September 2018 as the venue for business negotiations between Gifu-based vendors andprominent buyers in the Tokyo metropolitan area
The target areas have been expanded to Nagoya and Kansai regions in FY2020 to operate as theGifu Brand Metropolis Dissemination Project, thereby facilitating Gifu-based vendors’ entry into
major cities and the creation of the Gifu brandCollaborating with local companies,
NOBUNAGA Capital Village has held ameet-up with local university and highschool students under the theme of“resolving local challenges”
Participants extensively exchanged
opinions on the day of the event about thestandout features of their local communityand Gifu’s future51

Management strategy ～Regional commitment strategy～ Deepening initiatives for SDGs and local revitalization by Group directors and employees.

Local commitment strategy– Comprehensive local design – Deploying suitable human resources to optimum positions
and streamlining work processes to create extra time forbusiness activities, while boosting awareness on SDGs
and community revitalization to deepen initiatives
 Working with local businesses, business associates andlocal communities to take on local and environmental
issues in order to establish a sustainable society
Priority
measureHosting a top management gathering

Publishing the Juroku Research Institute Recommendations 2022
“Regions Popular among Women”
① Deepening Group’s initiatives for
SDGs and local revitalization

 Environment▶ Initiatives for decarbonization and CO2 reduction▶ Disclosure of climate change impact

 Society▶ Connection with customers and local communities at
Group sites▶ Diversity promotion, women’s empowerment and HR
development that takes advantage of diverse capabilities
 Governance② Assisting SDGs initiatives bycustomers and local communities Support for SDGs initiatives by corporate clients▶ Support for the introduction of SDGs-based management

 Support for SDGs initiatives by local communities

Setting major gender gaps in local communities as afundamental issue for the revitalization of the communities,
the Juroku Research Institute published “Regions Popularamong Women”: recommendations that present analysis
results, good practices, and solutions
Studies and other particulars by 3 female researchers ofJuroku Research Institute reassessed the status quo andexamined analysis results as well as solutions for the
potential of solving gender gaps

Offering SDGs Navigator and SDGs Challenge Assist▶ Business management that makes use of external knowledge
and insight▶ Enhanced compliance system

Priority
measureTo express gratitude to customers upon marking a 1-year
anniversary in October 2022, the Group held a Juroku
Financial Group Top Management Gathering in Gifu andAichi prefectures
As a comprehensive regional financial service provider, theGroup expressed its commitment to further reinforcing
Group-wide collaboration and becoming a frontrunner thatcan prove valuable to customers and local communities

Offering SDGs Navigator that supports customers upon the introduction of SDGs in their
management, which involves interviewing the extent to which they have undertaken SDGs
initiatives, developing a diagnosis report for feedback, and thereby assisting thedevelopment of a Declaration of Commitment to SDGs
Offering also SDGs Challenge Assist which, in a one-stop manner, provides funds required
when customers work on SDGs, as well as offering an SDGs Challenge Certificate tocustomers who used the service and listing their names on Juroku Bank’s website

Hosting Juroku Disaster Preparedness Day 2022


Hosting Juroku Disaster Preparedness Day 2022, an
educational event held on the occasion of Japan’s September 1
Disaster Drill Day
Raising local community members’ awareness of disaster
preparedness by offering tremor-experiencing opportunities
with earthquake simulation vehicles through the cooperation of
the City of Nagoya Fire Department, and showcasing emergency
disaster response vehicles owned by the Group▶ Educational and cultural activities, emergency preparedness52Section I: Interim Results for FY2022

Section II: Initiatives for Sustainability

Section III: Progress in the First Management Plan

Section IV: Future Direction of Management

16 Group Energy
 Under 16 Group Energy and as a frontrunner of the local community and society, the Group seeks to be a constantly relied uponand needed entity.

Being relied upon by customers and the local community as a provider of comprehensive
financial services

16 Group Energy
Creating economic

PurposeCreating social value

Achieving growthand prosperity forour customers andthe local
communityvalue

Co nt r ib uting t o t he l o c al c o mmunity( c us to mers , emp l o y ees, s har eho ld ers )Sustainableb y a c h ie ving “ S us t ainability” ( i. e. , r es o l ving s o c ial is s ues )Growthand “ G r o wth” ( i. e. , b us iness g r o wt h)
wit h “ P ur p o se” s er ving as o ur d r iving f o r c eBusiness growth

Solving social issues■Contributing to creating a sustainable society■Enhancing quality of life in the local community■Becoming a frontrunner of thelocal community and society■Making a foray into new business ranges■Group directors and employees growing
and being empowered54

Direction of the Second Medium-Term Management Plan The Group will develop the Long-Term Vision, a blueprint of where the Juroku Financial Group wants to be in a decade from now,and thereby draw up the 5-year Medium-Term Management Plan eyeing the Juroku Bank’s 150th anniversary.

Details of Management Plan and other particulars

ItemLong-Term Vision

Content

Period10 years

Where the Group wants to be(Quantitatively andqualitatively)
Long-term direction

Long-term
Conceptual
Consistent

Second Medium-Term Management Plan

5 years
Juroku Bank/Group Company
Medium-Term Management Plan

Group Administration Policy
Juroku Bank/Group Company Service
Administration Policy

Each company’s (overall) budget(April 2023–March 2028)

Medium-term direction
Medium-term measure

Juroku Bank marks its 150th anniversary in October 2027

6 months

Each company’s
short-term direction
Each company’s
short-term measure

Short-term
Specific
Adaptive55

Direction of the Second Medium-Term Management Plan
 To reach where the Group wants to be, the next Management Plan will roll out 4 strategies derived from the 3 strategies that are
pursued under the first Management Plan.

Long-Term Vision

S t a y i n g a h e a d o f t h e c u r v e t o c o n s t a n tl y s e r v e t h e l o c a l c o m m u n i t y
Second Medium-Term
Management Plan
Creating new value by taking on fast -paced reform initiatives during the Plan’s 5 -year period

Transformation
From reform to creation

Human Innovation
Maximizing the value of human resources

Realizing sustainability based ontransformations

Enhancing the quality of and strategically
deploying human resources

Market in Approach

Region produce

Offering services that exceed customer expectations
Boosting solution-presenting capability
and deepening sales to resolve diverse
challenges

Becoming a new force that draws out the involvementof local communities

Getting more involved in the local
community and creating a region resilient
against situations including emergencies

56

Introduction of new HR system and transition to holding company system April 2023 will see the first shake-up in the HR system in 22 years. The Group’s transition to a holding company system will be afirst among regional financial institutions in the 3 Tokai area prefectures.

Introducing a new HR system
1. Newly establishing “My Vision” and “Commitment”

Concept

1・Employees expressing their “My Vision” (what they aim to be)・Setting commitments (targets) of what employees want to achieve and takeon through their repeated efforts toward realizing the Group Management
Philosophy

Revitalizing the organization anddeveloping active human resources
・Each employee expressing what they aim to be
・Growing as human resources that the local
community needs

Committing to the organization’s purpose while valuing personal purposes

2. Developing new assessment and compensation systems

Concept2
Concept3・New HR review system to foster individuality and diversity to encourage
growth・Compensating enthusiasm and attitude to take on challenges instead of seniority

Clarifying the mission and reforming behavior
・Promoting behavioral reform by clarifying themission・Encouraging growth of employees who are
enthusiastic and willing to take on challenges

Abolishing minimum promotion age, allowing for employees to serve as General Managers at the age of 35

3. Empowerment of diverse human resources

Developing a corporate culture thatdraws on individuality and diversity
・Developing an organization that fosters individuality anddiversity, and in which individuals respect one another
・Channeling the capability of diverse human resources into
the Group’s momentum

・Newly establishing retention system (enhancing childcare system)
・Newly establishing expert system (developing specialists)
・Newly establishing return-to-work system (re-hiring former
employees)

Maximizing the value of diverse human resources

Transitioning to a holding company system
Thriving at each company as an employee on loan fromthe Juroku Financial Group

Juroku Financial Group
Employees (on loan to Group companies)

Reforming mentality
Reforming behavior

Empowering diverse
human resources

Juroku Juroku Juroku Juroku
Bank Lease
TT
Card

JDDS

Juroku NOBUNAGA Machiokoshi Juroku
CreditRI

Guarantee

JBS

Growing throughvoluntary action

Juroku TT: Juroku TT Securities; JDDS: Juroku Densan Digital Service; Juroku RI: Juroku ResearchInstitute; NOBUNAGA: NOBUNAGA Capital Village; Machiokoshi: Kanda Machiokoshi; Juroku
Credit: Juroku Credit Guarantee; JBS: Juroku Business Service

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Consolidation of our emblem
 The Juroku Financial Group will consolidate its emblem with that of the Juroku Bank, which has been in use for over half a century(this includes subsidiaries of the Bank).

Transition of Juroku Bank’s emblem
Meiji era

1972–

(1868–1912)(Started using the emblem)

2023–

Achieving growthand prosperity forour customers andthe local
community Juroku Bank and its 2 subsidiaries (Juroku Business Service
and Juroku Credit Guarantee) currently use an emblem thatwas designed in 1967--the Bank’s 90th anniversary--as amark for employees to wear, and which signifies
advancement toward the organization’s centennial
milestone
 Branches started to widely use the emblem in signboards
and other locations 50 years ago in September 1972

The emblem will be consolidated in step with when theSecond Medium-Term Management Plan starts as wellas when the Group introduces a new HR system andtransitions to a holding company system in April 2023.
With this move, the Group intends to develop a united
brand image, reform the mentality of Group directors
and employees, and reinforce inter-Group
coordination.

Conceptual image of store after consolidation of emblem

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