May 23, 2023－FY2022 Financial Results Meeting
Main Questions and Answers[Full-year Plan]
Q. The Bank's forecast for the current fiscal year appears conservative. What is the backgroundbehind the announcement of this plan?
A. FY2023 is positioned as the year for laying down the foundation necessary for achieving theconsolidated net income target of 75.0 billion yen for the final year of the Mid-term Plan.
We achieved record high profit in FY2022, as losses on sales of over 20.0 billion yen,including yen bonds, foreign bonds, and investment trusts, were covered by higher than usual

Q. Cost reductions seem to have reached their limit. Could this have a ripple effect on youroperational strategy?
A. While the consolidated OHR target for this Mid-term Plan is 45%, our plan is to makestrategic investments up-front and increase expenses in order to increase top-line revenue.
Of the 2.2-billion-yen year-on-year increase in expenses for FY2023, 1.5 billion yen is fromour digital strategy and human capital-related strategic investments, and while our OHR will
temporarily increase, these investments are expected to contribute significantly to achieving

gains on the sale of stocks and gains on the cancelation of investment trusts in addition tostrong results in our core business. During FY2023, there is a high probability that gains on

our target for the final year of the Mid-term Plan. As far as the impact on our operational
strategy, loan interest income is determined based on a comprehensive consideration of

the sale of stocks and gains on the cancelation of investment trusts will stay at around thesame level as FY2022 due to an adequate level of gross unrealized gains from investment
trusts and unrealized gains from stocks. In the current fiscal year, however, we have focused
somewhat on stable and sustainable earnings power by prioritizing carry income such as

trading activity, credit conditions, and market conditions, and are separated from cost
reductions. While it is desirable to make fees commensurate with costs, we believe it isimportant not to compromise the convenience of our customers. If we were to conduct areview, we would carefully consider the DX strategy, branch strategy, and other measures

dividends and distributions. Although expenses will increase due to the earlier-than-planned
execution of strategic investments, we expect to be able to see a return on these investments
after a little more than three years and will be a significant contributor to achieving the final
year profit target of the Mid-term Plan. Based on the results of our internal stress tests, ourwhile assessing their effectiveness.
[Mid-term Plan]
Q. Which goals do you consider to be the biggest hurdles in the new Mid-term Plan? Whatcredit-related expenses have also been conservatively estimated, and we believe we have asufficient buffer as we expect to recover our past preventive provisions to loan loss reserves.
We developed our plan with the understanding that our bottom-line forecast of 61.0 billion
yen is the minimum level of achievement to be ensured. We believe that we can achieve ourmeasures are you taking to overcome these hurdles?
A. We feel that our goal for financial product sales, which are forecast at 10.5 billion yen, a 4.2billion increase, is a relatively high hurdle. With respect to the sales of financial products,
we shifted our sales structure from a focus on flow to a focus on recurring income starting

plan because we have an adequate buffer as well as a high degree of confidence in our ability
to withstand changes in the environment, and we intend to steadily implement various

from October 2021. While the timing of this shift is a factor in the year-on-year decrease inrevenue, we are steadily yielding results in terms of the number of customers and balance ofmeasures so that we can post profits that exceed our plan. In addition, although interest rate
hikes have not been factored into this forecast, if the Bank of Japan's monetary policy

investment trust accounts. In order to lower this hurdle, our aim is to allocate resources todigital areas, which will lead to the expansion of the customer base and enrichment ofchanges, we estimate that top-line revenue will increase by 1.5 billion yen and the bottomline income will increase by about 1.0 billion yen.

transactions. We also intend to expand the balance of investment trusts and personal annuities
and the associated recurring income in order to achieve our goals.
In addition, it has also been quite difficult to make progress as planned with Chibagin Market

1and On Ad, as well as our advertising business, which will begin full-scale operations in thecurrent fiscal year, and new businesses such as BaaS and Metaverse. Our aim is to developthese businesses with an aim towards future returns.

In order to sustainably increase profit growth in the future, we feel that the most important
thing is to build an organization that can steadily execute our growth strategy throughstructural reforms and investment in human capital. In particular, we regard human capitalas our most important management resource. Our aim is to invest twice as much in training
expenses and double the number of human resource development slots in the new Mid-term
Plan. Through this investment in human capital, we hope to achieve sustainable growth byrefining our existing business as well as promoting digital strategies and new businesses.

Q. You have a fairly modest plan regarding gains from the cancelation of investment trusts in thefinal year of the Mid-term Plan. Is this simply a conservative assumption, or has ourmanagement style changed?
A. For investment trust management, we are conscious of taking into account the amount of risk
in managing yen and foreign bonds, and our stance of flexibly recording income and capital

Q. You quantitatively showed us the effect of RORA improvements. I would be interested togains according to market trends remains unchanged. While we recorded a significant
amount of capital gains in FY2022, we are now shifting focus to stable and sustainableknow if there is a difference in the effectiveness of RORA improvements depending on theitem.

earning power, giving priority to carry income.

A. We believe that corporate business and new businesses are the most important contributors
to RORA improvement. In our corporate business, we will strive to further increase ourloan share and corporate service transactions while maintaining our branch network. At thesame time, our aim is to form strong customer contact points while leveraging theconvenience of the corporate portal and strengthening our consulting function in order toincrease Corporate Solutions-related fee income and improve our RORA.
In our new businesses, net fees and commissions will expand as our cashless operations
further evolve. The impact of other businesses, such as advertising and local trading
companies, on earnings during this Mid-term Plan period will be limited. However, looking
ahead to the next Mid-term Plan, we intend to invest more resources and use them as asource to raise RORA in the future.

[Improving the P/B ratio]
Q. Regarding the correlation between P/B ratio and ROE, do you think you will be able tomaintain the dominance relative to other regional banks going forward? What measures andreforms do you think are necessary to sustainably increase the profit growth rate in thefuture?
A. The Bank's current P/B ratio is approximately 0.6. The regression line based on the correlation
between ROE and P/B ratio shows that the value of P/B ratio based on the Bank's expected
ROE shows a premium of 0.2 points. In addition to the advantages of our alliance strategy, alow OHR and the lowest NPL ratio, this analysis shows that the strength of our operatingbase has been well received by the market. If we divide the P/B ratio into the threecomponents of ROE, cost of capital, and profit growth rate, we recognize that the biggest
contributors are 1. the strong expansion of the Bank’s net income and ROE, 2. the steadyachievement of our earnings targets, which gives us credibility with investors regarding ourprofit growth rate, and 3. our efforts to proactively disclose information through our IR[Branch Strategy]
Q. Please tell us more about the philosophy of your future branch strategy.
A. We are working to shift corporate transactions to digital spaces, mainly our corporate portal,
but corporations have complex needs and if we were to decrease our number of branches, weactivities and the corresponding reduction in the cost of capital. That being said, improving
the P/B ratio is a common issue for listed companies in Japan and we will strive to further
expand this lead while stepping up our efforts to further improve our ROE, cost of capital,and profit growth rate.

believe it would lead to a decrease in our ability to understand their needs. We would like tomaintain our branch network as much as possible as other banks in the prefecture are rapidly
consolidating and streamlining their branches in order to further increase our prefectural
market share. Also, branches have become an important contact point regarding Bank app

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registrations. Tax and public money payments, wire transfers, and cash deposits andwithdrawals account for 70% to 80% of regular branch visits. If tax and public money
payments, transfers to other banks, etc., are shifted to digital, the balance of branch incomeand expenditures will also improve. In addition, the further our digital-shift andpersonalization strategies progress, the more important the role of branches that can provide
in-person consultations will become.
Under the new Mid-term Plan, the Bank's business areas were divided into three categories
as we strive to optimize our branch network. We intend to make the out-of-prefecture area agrowth driver for the Bank by opening new branches in Tokyo and neighboring prefectures.
In the growth area, which contains approximately 70% of the Bank's branches, we intend tomaintain our full banking branch network while considering changes in the functionality ofretail branches. In local development areas where the population is expected to decline, weintend to build a sustainable area sales structure.
[DX Strategy]
Q. While you plan is to increase your customer base from 4 million to 4.2 million, is the 200,000
increase mainly young people? What are your strategies for shifting non-digital customers
to digital?
A. Customers who open new accounts tend to be new workers or customers who take out
mortgages, and we estimate that approximately 60% are in their teens to their 30s. As part ofour strategy to shift existing non-digital customers to digital, we have been talking tocustomers who visit our branches while implementing in-branch campaigns to advertise theapp tax payment function, holding demonstrations at the Innovation Lounge we establishedin front of Chiba Station, sending DMs, and revising our point system.

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