FY2023 Interim Financial
Results September 2023

Staying Ahead of the Curve to Always Serve the Region

December 6，2023
TSE Prime Market and
NSE Premier Market （7380）

Table of Contents
Section I: Interim Results for FY2023

Section III: Progress in the 2nd Medium-Term
Management Plan

Summary of Consolidated Results5

Summary of Non-Consolidated Results of Juroku Bank

6

Overview of the Long-Term Vision37

Consolidated Core Net Operating Profit

7

Overview of the 2nd Medium-Term Management Plan

38

Expenses and Adjusted OHR

8Progress against Numerical Targets

39

Net Interest Income and Loans

9Roadmap to Profit Targets

40

Fees and Commissions

10

Acceleration of the our Group’s Transformation-Driven Growth Potential

41

Securities Investment

11

Transformation Strategy

42

Credit Costs and Outstanding Non-Performing Loans

12

Human Innovation Strategy

43

Non-Interest Income Ratio and Profit from Customer Services

13

Customer-First Marketing Strategy

44

Capital Adequacy Ratio and Shareholder Returns

14

Region-Producing Strategy

45

Business Projection and Dividend Forecast

15

Section II: Initiatives for Sustainability
Value-Creation Process

17

Initiatives for Key Challenges (Materiality)

18

Progress in Sustainability KPIs

19

Materiality: Vitalization of the regional economy

20–22

Materiality: Sustainable development of the regional community

23–25

Materiality: Environmental conservation and climate change actions

26–29

Materiality: Empowerment of diverse human resources

30–31

Materiality: Advancement of governance

32–33

Disclosure Based on TCFD Recommendations

34–35

Section IV: Initiatives for Enhancing
Corporate Value
Actions to Implement Management Conscious of Cost of Capitaland Stock Prices※

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 the Juroku Financial Group and some assumptions considered as rational. The
actual business performance and other factors could differ significantly due to a variety of factors.

47-51

2

Summary
Section I: Interim Results for FY2023
 [Consolidated] Ordinary revenue increased for the sixth consecutive term, and [Consolidated] ordinary profit and interim net income
attributable to owners of the parent company both exceeded initial forecasts.
 Since we increased the interim dividend by 10 yen to 70 yen, the annual dividend, including the forecast year-end dividend of 70 yen,is expected to be 140 yen, 10 yen higher than in the previous fiscal year, marking the fifth consecutive year of dividend increase.

Section II: Initiatives for Sustainability
 All Sustainability KPIs set in May 2022 have made steady progress based on the coordinated efforts of Group companies.
 Since the target of “reducing CO2 emissions by 50% from the FY2013 level by FY2030" will likely be achieved by the end of
FY2023, the target for achieving carbon neutrality was moved forward from FY2050 to FY2030.

Section III: Progress in the 2nd Medium-Term Management Plan We have adopted Google Workspace (GWS) as new groupware to enhance the creativity of all employees and maximize theGroup’s productivity.
 NOBUNAGA Succession was established as a joint venture between Nihon M&A Center Holdings Inc. on July 3, 2023, aiming
to contribute to solving management succession issues faced by local companies and support the sustainable growth of the regional
economy.
 For the realization of the Group's management philosophy, a decision was made to relocate to a new head office building in 2027,
50 years after the completion of the existing head office building. Various functions and facilities are being considered for theplanned opening in April 2027.

Section IV: Initiatives for Enhancing Corporate Value We have implemented initiatives to improve PBR that will lead to sustainable profit growth, improvement of ROE andreduction of cost of equity.

3Section I: Interim Results for FY2023

Section II: Initiatives for Sustainability
Section III: Progress in the 2nd
Medium-Term Management Plan

Section IV: Initiatives forEnhancing Corporate Value

Juroku FG
consolidated
results

Summary of Consolidated Results [Consolidated] Ordinary revenue increased 4.7 billion yen YoY to 63.1 billion yen, rising for the sixth consecutive fiscal term.
 [Consolidated] Ordinary profit and interim net income attributable to owners of the parent company both exceeded initial forecasts (which wererevised upward on October 24, 2023).
（0.1 billion yen）

Juroku FG consolidated results

2022/9(A)

2021/92023/9
(B)

YoY
(B－A)

Ordinary revenue

557

584

631 1

47

Consolidated core gross operating profit

378

403

364 2

△ 39

266

266

264

△2

Fees and commissions

84

92

93

1

Other operating profit (excluding profit/loss on
JBGs and other debt securities)

26

45

7

△ 38

231

220

222 3

2

Personnel expenses

124

120

118

△2

Non-personnel expenses

90

85

88

3

146

182

141 4

3

△ 48

△ 57

△9

150

134

84

△ 50

Credit costs

21

5

8

3

Profit/loss on equities

11

14

58

44

Ordinary profit

150

155

140 5

△ 15

Interim net income attributable to owners of theparent company

103

103

95 6

△8

Net interest income

Expenses

Consolidated core net operating profit
Profit/loss on JBGs and other debt securities
Consolidated net business profit

△ 41

1

[Consolidated] Ordinary revenue
Up 4.7 billion yen YoY to 63.1 billion yen, rising for the sixth
consecutive fiscal term

2

Consolidated core gross operating profit
Down 3.9 billion yen YoY to 36.4 billion yen due to a decline
in other operating profit (excluding profit/loss on JBGs andother debt securities)

3

Expenses
While personnel expenses declined in line with the natural
attrition of personnel, non-personnel expenses increased
due to aggressive investment in digital transformation (DX)and the production of new commercials to enhance thebrand image. As a result, overall expenses rose 0.2 billion
yen YoY to 22.2 billion yen.

4

Consolidated core net operating profit
Down 4.1 billion yen YoY to 14.1 billion yen due to adecrease in consolidated core gross operating profit

5
6[Consolidated] Ordinary profit
Interim net income attributable to owners of theparent company[Consolidated] ordinary profit came to 14.0 billion yen, down
1.5 billion yen YoY, and interim net income attributable toowners of the parent company came to 9.5 billion yen, down
0.8 billion yen YoY. Both accounts exceeded initial forecasts
due to an increase in profit/loss on equities.

5

Summary of Non-Consolidated Results of Juroku Bank

Juroku Bank nonconsolidated results

 Core net operating profit fell 3.9 billion yen YoY to 12.8 billion yen, mainly due to a decrease in other operating profit (excluding profit/loss on JBGs
and other debt securities) resulting from higher foreign currency funding rates.
 Interim net income remained high at 8.9 billion yen, down 0.6 billion yen YoY.
(0.1 billion yen)

Juroku Bank non-consolidated results

2022/9(A)

2021/92023/9
(B)

YoY
(B－A)

Ordinary revenue

391

415

460 1

Core gross operating profit

329

354

317 2 △ 37

Net interest income

268

265

265

0

55

62

62

0

5

26

△ 11

△ 37

197

187

188 3

1

Personnel expenses

100

92

90

△2

Non-personnel expenses

80

79

84

5

131

167

128 4 △ 39

3

△ 48

△ 57

△9

135

119

71

△ 48

Credit costs

19

5

7

2

Profit/loss on equities

10

14

58

44

Ordinary profit

138

142

129 5

△ 13

Interim net income

100

95

89 6

△6

Fees and commissions
Other operating profit (excluding profit/loss on
JBGs and other debt securities)

Expenses

Core net operating profit
Profit/loss on JBGs and other debt securities
Net business profit

45

1 Ordinary revenue
Up 4.5 billion yen YoY to 46.0 billion yen, rising for thesecond consecutive fiscal term

2 Core gross operating profit
Down 3.7 billion yen YoY to 31.7 billion yen, mainly due to adecrease in other operating profit (excluding profit/loss on
JBGs and other debt securities) resulting from higher foreign
currency funding rates.

3 Expenses
Up 0.1 billion yen to 18.8 billion yen. Although personnel
expenses fell as a result of the transfer of employees to theholding company, non-personnel expenses rose mainly due tohigher management guidance fees related to the transfer of
personnel expenses to the holding company and aggressive
investment in DX.

4 Core net operating profit
Down 3.9 billion yen YoY to 12.8 billion yen due to a decreasein core gross operating profit

5 Ordinary profit
6 Interim net income
Ordinary profit came to 12.9 billion yen, down 1.3 billion yen
YoY, and interim net income came to 8.9 billion yen, down
0.6 billion yen YoY. Both accounts remained high mainly due
to an increase in profit/loss on equities.

6

Juroku FG
consolidated
results

Consolidated Core Net Operating Profit

 Consolidated core net operating profit fell 4.1 billion yen YoY to 14.1 billion yen, mainly due to a decrease in other operating profit (excluding
gains/losses on JBGs and other debt securities) resulting from higher foreign currency funding rates.

■ Consolidated core net operating profit(0.1 billion yen)

Consolidated core net operating profit

Loaninterest+1

Depositinterest
+0

V:+6
R: -5

V: -0
R:+0

Interest on
securities
+25

182

V: +5
R: +20

Otherinterest
incomeFees andcommissio
ns

-29

+1

Other
Personnel
operating expenses
profit+2-38

Nonpersonnel
expenses
-3

Taxes
+0

146
113

141

104
V: Balance factor

19/9

20/9

21/9

22/9

[Ref.] Core gross operating profit and expenses
19/9

20/9

21/9

22/9
(A)

23/9

(0.1 billion yen)

23/9
(B)

Consolidated core net operating profit

YoY
(B-A)

Consolidated core grossoperating profit

356

345

378

403

364

-39

Net interest income

266

252

266

266

264

-2

Fees and commissions

77

72

84

92

93

1

Other operating profit*

13

20

26

45

7

-38

Expenses

243

240

231

220

222

2

Consolidated core net
operating profit

113

104

146

182

141

-41

*Excluding profit/loss on JBGs and other debt securities

R: Yield factor

113

356
243

19/9

403

378

240

20/9

231

21/9

(0.1 billion yen)(Consolidated
core net operating
profit)

182

146

104

345

Expenses

141
364

220

22/9

222

23/9

7

Juroku FG
consolidated
results

Expenses and Adjusted OHR

Juroku Bank nonconsolidated results

 Personnel expenses decreased due to the natural attrition of personnel, which offset additional expenses caused by a pay-scale raise, while nonpersonnel expenses increased mainly due to aggressive investment in DX.
 The adjusted OHR remained low at 61.06% in Juroku FG consolidated results and 59.34% in the Juroku Bank non-consolidated results.

■ Expenses
Juroku FG
consolidated
results
Personnel expenses

243
15

240
16

92

95

(0.1 billion yen)
Non-personnel expenses

231

Taxes

(0.1 billion yen)

Juroku Bank nonconsolidated
results

Personnel expenses

Non-personnel expenses

Taxes[Personnel expenses]

16

220
15

222
15

214
14

207
15

90

197
15

85

88

187
14

188
13

85

85

80

79

84

Overall, personnel expenses fell slightly
as additional expenses caused by a payscale raise was more than offset by
expense savings stemming from thenatural attrition of personnel.

[Non-personnel expenses]
135

19/9

129

124

120

118

114

105

100

92

90

20/9

21/9

22/9

23/9

19/9

20/9

21/9

22/9

23/9

Non-personnel expenses rose mainly due
to aggressive investment in DX and higher
PR expenses related to new commercial
production aimed at enhancing the brandimage.

■ Adjusted OHR
68.31

66.82

68.04

61.20
59.90

61.06
54.76

59.34

52.75
19/9

20/9

(%)

Adjusted OHR (Juroku FG consolidated results)
Adjusted OHR (Juroku Bank non-consolidated results)

69.72

21/9

22/9

23/9

(50% range)

Numerical targets of the 2nd
Medium-Term Management
Plan: 50% range
28/3

8

Net Interest Income and Loans

Juroku Bank nonconsolidated results

 Net interest income remained unchanged YoY at 26.5 billion yen as lower interest income on deposits with the Bank of Japan was offset by anincrease in foreign currency-denominated net interest income resulting from a loss-cut in foreign bonds.
 The average balance of JPY loans remained solid at 4,714.7 billion yen, up 176.0 billion yen YoY, mainly of business and housing loans.

■ Net interest income(0.1 billion yen)
19/9
Net interest income
Interest income in JPY
Interest
income/expenses on
JPY loans and deposits
Interest and dividends
fromdeposit
JPY securities
JPY
interest
Interest income in foreign
currencies

20/9

21/9

22/9
(A)

23/9
(B)

YoY
(B-A)

255

265

265

23
2

14
10

18
3

268

265

265

0

247

234

245

250

247

-3

20
1

188

188

190

187

189

2

57

44

51

52

53

57

44

51

52

53

1

188

188

190

187

189

1

1

2

10

3

-7

20

20

23

14

18

4

19/9

20/9

21/9

22/9

23/9

20
1

(0.1 billion yen, %)

20/9

21/9

22/9
(A)

23/9
(B)

Average balance of
JPY loans

42,61643,70944,81245,387

47,14750,000
1,760

Average yield of JPY
loans

0.894

0.870

0.852

0.827

0.805

-0.022

YoY
52,000(B-A)(0.1 billion yen, %)Average yield of JPY loans

Average balance of JPY loans

0.894

0.870

0.852

0.827

1.200
1.000

0.805

48,0000.800

46,000[Ref.] Loan balance (as of year-end)

Housing loanbalance

Interest income in foreign currencies

268

255

19/9

Consumer loanbalance

JPY deposit interest

267

267

■ Average balance and yield of JPY loans

Business loans(0.1 billion yen)Interest income/expenses on JPY loans and deposits Interest and dividends from JPY securities

0.600

44,00022,29622,50622,022

21,921

22,819898
42,00016,69817,492

18,511

19,40520,021616
40,00016,227

17,03318,05018,93019,53238,000602

42,61643,70944,81245,38721/9

22/9

47,147

0.400
0.200
0.000

19/9

20/9

23/9

9

Fees and Commissions

Juroku Bank nonconsolidated results As for fees and commissions, individual-related revenue grew due to strong sales of investment trusts.

■ Fees and commissions
Individual-related

Corporate solution-related

Other(0.1 billion yen)<Juroku TT Securities> Individual-related

62

62

13

10

55

53
45

15

20

13

13
17

9

7
8
19

19/919/9

17

11

5
20/920/9

Other

列1

3,024
2,516
35
1,711

22/922/9

102

1,539

3,580
193

3,815
181

2,320

2,348

1,141
769

670

19/9

20/9

23/923/9

Syndicated loans and commitment fees
Private placement bond fees
M&A fees
Business matching fees
Consultation fees

211

1,915

14

■ Corporate solution-related revenue(Million yen)Life and non-life insurance agency
commissions

16

21/921/9■ Individual-related revenue

38

35

30

25

1,273

1,066

1,285

21/9

22/9

23/9

761
237
88
148
287
19/9

(Million yen)

883

930

145
157
150

234

430

424

20/9

21/9

154
117

1,370

1,349

55
228
100
87

85
230

899

827

22/9

23/9

127
78

10

Securities Investment

Juroku Bank nonconsolidated results Valuation gains of securities amounted to 54.5 billion yen overall.
 Continuous efforts are underway to reduce cross-shareholdings by approximately 25% over a five-year period.

■ Valuation gains and losses of securities
21/9

22/3

23/3
(A)

22/9

(0.1 billion yen)
23/9
(B)

(0.1 billion yen)

YoY
(B-A)

Stocks

Bonds

Other

Total

932
Stocks

931

857

699

782

1,122

340

Bonds

23

-72

-145

-168

-293

-125

Other
Foreign bonds*
Investment
trusts
Total

-23

-95

-252

-211

-283

-72

-23

-64

-160

-103

-176

-73

-0

-31

-91

-107

-106

1

932

689

301

403

545

142

-

-

6

1

80

79

Derivative transactions(deferred hedging) ** For foreign bonds, deferred hedging through derivative transactions is used to reduce the risk of market value fluctuations.

■ Bond duration

JPY bonds
6.85

6.67

6.11

689
545
403

301

931

857

△ 23

△ 72
△ 95

699

782

1,122

△ 145
△ 252

△ 168
△ 211

△ 293
△ 283

21/9

22/3

22/9

23/3

■ Cross-shareholdings (book value)(0.1 billion yen)

Approx. 25%
reduction in 5 years(Progress rate:
28.7%)

5.72

5.61

883
4.84

23/9

(Year)

Foreign currency bonds
6.46

23

5.03

2.57

21/9

22/3

527

3.55

* The numbers reflect derivatives.

22/9

23/3

23/9

09/3

20/3

503

21/3

478

22/3

464

22/9

448
23/3

431
23/9

349
28/3

11

Credit Costs and Outstanding Non-Performing Loans

Juroku Bank nonconsolidated results Despite an increase in the number of bankruptcies, credit costs were lower than in the past due to up-front and small-amount allowances.
 The ratio of non-performing loans improved by 0.12 percentage points YoY to 1.31%.

■ Credit costs(0.1 billion yen)

19/9

20/9

22/9
(A)

21/9

23/9
(B)

Disposal of non-performing loans

YoY
(B-A)

① Net transfer to generalallowance for loan losses

-0

4

15

-7

-7

0

② Disposal of non-performing
loans

17

22

4

12

15

3

27
17

Transfer to individual
allowance for loan losses

15

21

3

12

14

22

③ Reversal of allowance forloan losses-④ Recoveries of written-off
claims

0

0

-

-

-

-

Credit costs ①+②-③-④

17

27

19

5

7

2

-

-

4

19

2

15
17

-

(0.1 billion yen)

Net transfer to general allowance for loan
lossesTotal credit costs

-

15

12

-

-0
19/9

20/9

7
5

4

21/9

△7

△7

22/9

23/9

*The September 2021 term saw a 1.1 billion yen increase in the net transfer to general allowance for loan losses,
due to a change in the standards for calculating the allowance for loan losses.

■ Outstanding non-performing loans
19/9

Bankrupt andsubstantially bankrupt
claims

20/9

141

21/9

132

22/9 (A)107(0.1 billion yen, %)(0.1 billion yen, %)

118

23/9
(B)

YoY
(B-A)

1000

131

13
800

1.45

1.49

Bankrupt and substantially bankrupt claims
Doubtful claims
Substandard claims

1.50

1.43

1.31

1.50

642

677

697

671

1.20

600

30

29

641

22

23

23

0.90

480

514

561

530

487

141

132

107

118

131

19/9

20/9

21/9

22/9

23/9

Doubtful claims

480

514

561

530

487

-43

Substandard claims

22

30

29

23

23

0
400

Total

642

677

697

671

641

200

Ratio against total claims
outstanding

1.45

1.49

1.50

1.43

1.31

-0.12

0.60

-30

0

0.30
0.00
-0.30

12

Juroku FG
consolidated
results

Non-Interest Profit Ratio and Income from Customer Services

Juroku Bank nonconsolidated results

 Consolidated non-interest profit ratio declined by 6.56 percentage points YoY to 27.49%.
 Income from customer services remained high at 6.9 billion yen, down 0.5 billion yen YoY.

■ Non-interest profit ratio*200

Non-interest profit(Juroku Bank non-consolidated results)
Non-interest profit ratio(Juroku Bank non-consolidated results)

Non-interest profit (Juroku Bank FG consolidated results)(0.1 billion yen, %)Non-interest income ratio(Juroku Bank FG consolidated results)

25.39

26.88

16.65

16.14

34.05

29.44

27.49

25.04
18.41

16.19

100

53

137

111

92

90

60

49

100

88
51

0
19/9

20/9

21/9

22/9

23/9

35

Non-interest profit fell,
mainlydue to a decrease25
in other operating profit(excluding
profit/loss on
15
JBGs and other debt
securities)
resulting from5
higher foreign currency-5funding
rates.

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

■ Income from customer services(0.1 billion yen, %)Juroku Bank non-consolidated
results
Income from customer
services
Average loan balance ×
Loan-deposit gross margin

19/9

20/9

21/9

22/9
(A)

23/9
(B)

32

31

59

74

69

193

191

192

189

191

YoY
(B-A)

(0.1 billion yen)
Income from customer services = Average loan balance x Loan-deposit grossmargin + Fees & commissions – Operating expenses-52-0.021

Loan-deposit grossmargin

0.896

0.868

0.850

0.828

0.807

Fees and commissions

53

45

55

62

62

0

Operating expenses

213

205

188

177

184

7

74

69

22/9

23/9

59
32

31

19/9

20/9

21/9

13

Juroku FG
consolidated
results

Capital Adequacy Ratio and Shareholder Returns

Juroku Bank nonconsolidated results

 The consolidated capital adequacy ratio marked 10.72%, while the non-consolidated capital adequacy ratio stood at 9.55%.
 The total payout ratio based on the official business projection (i.e., consolidated net income of 17.0 billion yen) is expected to reach 38.4%.

■ Consolidated capital adequacy ratio
Capital adequacy ratio(Juroku FG consolidated results)

10.67

10.52

(12% or above)

Capital adequacy ratio(Juroku Bank non-consolidated results)(11% or above)

10.72

10.54

(%)

10.5%

9.87

9.28

9.34

9.46

9.35

21/9

22/3

22/9

23/3

Numerical targets of the
2nd Medium-Term
Management Plan: 11% or
above

9.55

23/9

Targets of the LongTerm Vision: 12% or
above

28/3

33/3

■ Shareholder returns
Dividends
per
share(Parenthesis
indicateinterimdividends)
Total dividends
Acquisition
treasury stock

20/3

21/3

22/3

23/3

80 yen(35 yen)

90 yen(35 yen)

120 yen(50 yen)

130 yen(60 yen)2,989 million yenof

3,363 million yen

4,453 million yen

4,783 million yen

24/3

140 yen(70 yen)
10,0005,109 million yen

6,000

-

1,111 million yen

1,111 million yen

1,422 million yen

Total payout ratio

23.2%

22.8%

32.3%

31.6%

38.4%

Dividend
ratio

23.2%

22.8%

25.9%

25.6%

30.0%2,000*Paid by the Juroku Bank before the interim dividends of the March 2022 term
*Red indicates forecasts

38.4

32.3

31.6

25.9

25.6

1,111

1,111

4,453

4,783

5,109

22/3

23/3

24/3

8,000

-

payout(Million yen, %)Total dividends
Acquisition of treasury stock
Total payout ratio
Dividend payout ratio

23.2

22.8

30.0

35.0

1,422

25.0

4,000
2,989

3,363

20/3

21/3

0

15.0
5.0

14

Business Projection and Dividend Forecast

Juroku FG
consolidated
results

Juroku Bank nonconsolidated results Due to uncertainties in overseas interest rate movement and concerns about an increase in credit costs, the initial forecasts for ordinary profit and net
income attributable to owners of the parent company have been left unchanged.
 Since the interim dividend was increased by 10 yen to 70 yen, the total annual dividend, including the forecast year-end dividend of 70 yen, is expected
to be 140 yen, 10 yen higher than in the previous fiscal year, marking the fifth consecutive fiscal year of dividend increase.

■ Business projection(0.1 billion yen)2024/3(Forecasts)

Comparedwithpreceding
term

745

722

-23

Net interest income

511

515

Fees and commissions

187

Other operating profit (excluding
profit/loss on JBGs and other debt
securities)

Juroku FG consolidated results

2023/3(Results)(0.1 billion yen)2023/3(Results)

Juroku Bank non-consolidated results

2024/3(Forecasts)

YoY

Core net operating profit

285

250

-35

4

Net business profit

208

130

-78

189

2

Credit costs

14

29

15

47

17

-30

Ordinary profit

255

220

-35

Net income

179

155

-24

Expenses

439

449

10

Consolidated core net operating profit

306

273

-33

Ordinary profit

272

245

-27

Net income attributable to owners of theparent company

186

170

-16

Consolidated core gross operating profit■ Dividend forecast
19/3

Annualdividend

70 yen20/3
80 yenFifth consecutive
fiscal year of
dividend increase
Interim dividends

21/3
90 yen22/3
120 yen23/3
130 yenInterim

35 yen35 yen35 yen50 yen60 yen70 yenYearend

35 yen45 yen55 yen70 yen70 yen70 yen*Paid by the Juroku Bank before the interim dividends of the March 2022 term
*Red indicates forecasts

130
120 Commemorative

24/3
140 yen(Yen)

Year-end dividends

7080

Specialdividend
10 yen90

140

dividend
20 yenCommemorative
dividend
10 yen

70

70

35

45

55

35

35

35

50

60

19/3

20/3

21/3

22/3

23/3

70
Commemorative
dividend
10 yen

70

24/3

15

Section I: Interim Results for FY2023

Section II: Initiatives for Sustainability
Section III: Progress in the 2nd
Medium-Term Management Plan

Section IV: Initiatives forEnhancing Corporate Value

Value-Creation Process
 Delivering value to all stakeholders through corporate activities in order to realize sustainability

Capitals to be used

Corporate activities

Human capital

Our mission- Diverse human resources- Employee-empowering organization- Advanced consulting capability

Achieving growth and prosperity for ourcustomers and the local community

Long-Term Vision
Staying ahead of the curve to always
serve the region

Intellectual capital- Locally-established brand- Group products catering to market
needs- Streamlined management resulting
from work reforms

Customers- Problem solving and optimum solutions- Advanced convenience- Enrichment

Achievement ofsustainability KPIs

Local communities- Development of local economy- Regional revitalization throughcollaboration with local governments- Advanced financial infrastructures

Social capital

Directors and employees- Excellent and robust customer base
- Market that supports Japan’s
Monozukuri philosophy- Domestic and international networks- Personal growth- Healthy work-life balance- Promotion of diversity

Fiscal capital

SDGs
contribution

Shareholders / Investors- Strong profitability- Sound loan assets- Enhanced equity capital- Enhancement of corporate value- Information disclosure including non-fiscal
information- Promotion of engagement

Natural capital- Rich nature- Rich tourism resources- Biodiversity

Values provided

Environment
Corporate governanceRisk management

Compliance

Steady profit
growth and solid
financial base

- Response to climate change- Zero-carbon society- Environmental conservation

External environment
Contraction of market scale

Conversion of business mode

Social changes- Declining population- Decrease in number of companies- Declining birthrate and aging
population- Changes in industrial structure- Prolonged negative interest rate
policy- Progress of cashless society- Entry of other industries- Addressing to climate change- Deregulation of Banking Act

17

Initiatives for Key challenges (Materiality) The Juroku Financial Group is promoting various initiatives in line with the SDGs Declaration to address five key challenges (Materiality).

Key challenges(materiality)

Business

Revitalization of
the local
economySustainable
development of
the local
community
Environmental
conservation andclimate change
actions

Initiatives











Management

Empowerment ofdiverse humanresources

Advancedgovernance







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

Advancing corporate governance
Strengthening risk management and compliance
Achieving stakeholder engagement

18

Progress in Sustainability KPIs
 All Sustainability KPIs set in May 2022 have made steady progress based on the coordinated efforts of Group companies.

■ Targets by FY2030
Key challenges

Item

Quantitative target

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

2 trillion yen(800 billion yen)

Balance of Group assets on deposit

550 billion yen

Sustainable
development of
the local
community
Environmental
conservation andclimate change
actions
Empowerment ofdiverse humanresources■ On-going targets
Advancedgovernance

September 2023 results (progress
rate)
(※2)

（119.3 billion yen）

17.3％
（14.9％）

３97.3 billion yen

72.2%

345.2 billion yen(※2)

Social impact investments

2 billion yen

310 million yen

15.6%

DX-support consultation cases

3,000 cases

245 cases

8.2%

CO2 emissions (vs. FY2013 level)

50% reduction

47.3％ reduction

47.3%

Paper use (vs. FY2019 level)

50% reduction

32.7％ reduction

65.5%

Ratio of female managers

２０％

7.9％

39.5%

Ratio of paid leave claimed

８０％

28.6％

35.7%

(※2)

*1 Since the target of “reducing CO2 emissions by 50% from the FY2013 level by FY2030" will likely be(※2) Cumulative total from April 2022
achieved by the end of FY2023, the target for achieving carbon neutrality was moved forward from FY2050
to FY2030.

Initial response training for emergency
preparedness

Dialog with investors

No less than
twice a year

4 times200.0%

No less than
10 times a year

16 times

160.0%
19

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

ActionSupporting business foundation and new business operations to foster future leadersof local economy

・ NOBUNAGA２１（※） ※ Venture support network led by the private sector
・ Open innovation
・ Startup and venture investments
Expanding business range⇒ Establishing the NOBUNAGA Capital Village
Supporting local companies’ main business operations and management succession tocontribute 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
Expanding business range⇒ In July 2023, Establishing the NOBUNAGA Succession
・ 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

Key items







Local VC・CVC investment
Sustainable financeManagement 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 billionyen)

550 billion yen

20Materiality: Vitalization of the regional economy
 Sustainable finances totaled 345.2 billion yen as of the end of FY2023 H1, achieving 17.3% of the FY2030 target.
 The balance of our group assets in custody as of the end of FY2023 H1 reached 397.3 billion yen, achieving 72.2% of the FY2030 target.
Sustainability KPIs

Sustainable finances provided
Sustainable finances provided(0.1 billion yen)(of which, environment field)

20,000[FY2023 H1 progress rate]
Vs. FY2030 target: 17.3%(Incl. environment field: 14.9%)

916

2,348

3,452

(322)

(859)

(1,193)

22/9

23/3

23/9

Balance of group assets in custody

Sustainability KPIs

Juroku Bank

Juroku TT Securities[FY2023 H1 progress rate]
Vs. FY2030 target: 72.2%
3,973
3,639
3,445
1,663

(8,000)

1,886

1,976

2,149

FY2030[Target]

22/9

23/3

23/9

 Provided sustainable finances totaling 345.2 billion yen (including 119.3
billion yen in environment field) as of the end of FY2023 H1, achieving
17.3% (of which, environment field: 14.9%) of the FY2030 target
 Equipment financing related to energy conservation and renewable energy,
as well as financing related to medical care, welfare, infrastructure, etc.
increased steadily.
 Focused on Positive Impact Finance (PIF) and other financing products that
contribute to our business partners’ achievement of sustainable
management
 At Juroku Lease, leases related to SGDs, including decarbonization andlow-carbon, increased.

5,500

1,824

1,559

(Cumulative total from Apr. 2022)[Definition]
Sustainable finances: Investments and loans for SDGs and ESG initiatives that contribute to realizing asustainable society
Environment field: Investments and loans for environmental impact-reducing initiatives(100 million yen)

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

 The balance of our group assets in custody reached 397.3 billion yen as ofthe end of FY2023 H1, achieving 72.2% of the FY2030 target.
 Of the total, Juroku Bank accounted for 182.4 billion yen (approx. 46%) and
Juroku TT Securities 214.9 billion yen (approx. 54%).
 For stable asset formation support, Juroku Bank focused on expanding theinvestment trust savings plan optimal for long-term, accumulative anddiversified investments.
 Recurring fee income, including trust fees, rose in line with the increase in
assets in custody.

21

Materiality: Vitalization of the regional economy
 In July 2023, NOBUNAGA Succession Inc. was established to assist local businesses in resolving management succession issues.
 In asset formation support, Juroku Bank focused on expanding the investment trust savings plan, as a result of which monthly installments and thenumber of clients increased steadily.

Management succession consulting

Asset formation support[Juroku Bank] Expanding investment trust savings plan forcustomers’ stable asset formationIn response to various needs
relatedtomanagement
succession,
theManagement
Succession Support Office andspecialist
membersof
NOBUNAGA Succession provide
thebestsolutionsthrough
repeated dialogues with businessowners.
Evoking needs through various
seminars and individual company
consultations

M&A contracts concluded(Cases)Business succession consultations
62

59

23

8

39
21/3

In anticipation of the NISA System revision in 2024, Juroku Bank focused on expanding
the investment trust savings plan optimal for long-term, accumulative and diversified
investment, as a result of which monthly installments and the number of clients
continued to increase steadily.

15

Monthly installments
Number of clients

33
51

58

9
24

22/3

23/3

23/9

NOBUNAGA Succession Inc. established




73

NOBUNAGA Succession was established as a joint venture with Nihon M&A Center(Million yen/clients)

22,129

1,000
900
800
700
600
500
400
300
200
100

23,861

25,48027,66725,00019,503

12,377

14,59016,757

233

352

482

20/3

20/9

21/3

649

934

816

1,055

1,160

20,00015,00010,000
5,000

21/9

22/3

22/9

23/3

23/9

Holdings Inc. on July 3, 2023, with the aim of solving management succession issues
facing local companies and supporting the sustainable growth of the regional economy.
The company provides local businessowners, mainly in Gifu and Aichi
prefectures, with M&A solutions forlack of successors and other various
issues.

Local VC/CVC investment[NOBUNAGA Capital Village] Investment activitySince establishment, the company has
met with many business owners in
Gifu and Aichi prefectures to solve
succession issues and provided
approximately 350 consultations in thefour months to the end of Oct. 2023.

NOBUNAGA Succession opening ceremony

NOBUNAGA
CapitalVillage,aninvestment company, is making proactive
investments to offer new value andservices to the community.
The company is accelerating investment
in companies that have synergies with thelocal economy and finance and incompanies capable of co-creating new
businesses.

Local VC

CVC

(Cases)
26

18
15

13
8
5
3
22/3

8

12

5

6

22/9

23/3

11
23/9

(Cumulative total since inception in Apr. 2021)

22

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








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

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

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⇒ Establishing Juroku Densan Digital Service Co., Ltd. Expanding business range

Social impact investments

2 billion yen

DX-support consultation cases

3,000 cases

23

Materiality: Sustainable development of the regional community The amount of social impact investment is increasing through local crowdfunding platform OCOS and the hometown tax donation matching service
for companies CoLoRs.
 Juroku Densan Digital Service is working to win orders by increasing support services through external collaboration.
Sustainability KPIs

Social impact investment

 Investment amount grew steadily due
to growing transactions for local
crowdfunding
platform
OCOS,
support provided using JTA’s subsidy
on united local community initiatives,and a rise in the number of partner
local governments for the hometown
tax donation matching service forcompanies.

Sustainability KPIs

(Cases)Target by
FY20302.0 billion yen

FY2023 H1
results

0.31 billion yen(Progress rate:
15.6%)

245

Cumulative total (as of end of Oct.
2023)

126

48
22/9

Partner local
governments

23

No. ofdonations

74

Amount of
donations41.3 million yen

23/3

23/9

FY2030[Target](Cumulative total from Apr. 2022)

 Juroku Densan Digital Service quickly responds to client leads from groupcompanies and proposes optimal solutions for clients' digital needs.
 It also focuses on support through external collaboration, acquiring 119 orders
in FY2023 H1.
Breakdown of DX support consultations (FY2023 H1)[Kanda Machiokoshi] Expanding local crowdfunding platform
OCOS
 Local crowdfunding platform OCOS,
launched in Sep. 2022, has been
boosting transactions steadily in linewith an increase in the number ofposted projects and higher namerecognition.
 Referrals from Juroku Bank has also
increased,
vitalizing
inter-groupcooperation

3,000[FY2023 H1 progress rate]
Vs. FY2030 target: 8.2%

[Kanda Machiokoshi] The hometown tax donation matching service forcompanies CoLoRs
 The number of partner local
governments for the hometown tax
donationmatching
serviceforcompanies, outsourced from Gifu
Prefecture in Oct. 2023, has risen to23.
 The number of donations using
CoLoRs reached 74 as of the end ofOct. 2023, amounting to 41.3 millionyen.

DX-support consultations

Business streamlining

40 cases

Sales force
strengthening

4 cases

Infrastructure

21 cases

Sales inventory
control

2 casesTime and attendance
management

17 cases

Accounting

2 cases

Sales channel
expansion

7 cases

Information security

2 cases

Payroll

7 casesOther

17 casesCumulative total (as of end of Oct. 2023)
No. of projects
posted37

No. of purchases
made

2,536

Total amount ofpurchases

38.4 million yen

No. of members

2,117

24

Materiality: Sustainable development of the regional community
 For the creation of sustainable tourism destinations, we provided tourism DMO (Destination Management Organization) support for two additional
regions, bringing the total to seven regions.
 Juroku Card is actively working to support the regional transition to a cashless society.

Sustainable tourism development

Okuhida Joined the Chubusangaku National Park Partnership[Kanda Machiokoshi] Tourism DMO support

Shirakawa Village
 Japan Tourism Agency’s (JTA) sustainable tourism
demonstration project
Study on the regional earnings structure(Collaboration with Juroku Research Institute) Providing solutions considered necessary in advancing the sustainability of
tourist destinations in Gifu Prefecture Involved in supporting 7 regions (e.g., contracted public services,
consulting for governmental subsidies)

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

Gifu City Nagaragawa hot springs and Gifu Castle town: Developing a
regional plan (collaboration with ORGAN, a non-profit) for
the use of JTA’s subsidy on united local community initiatives
 Gifu City: Supporting renovation project of old private houses Gifu City: Serving as a member of the Japan Heritage
Strategy Working GroupNew Monet's Pond, Seki City
 Demonstration of pay-as-you-go parking using
donationsNew

Shirotori-cho, Gujo City
Shirotori Promotional Project Advisor[Kanda Machiokoshi] Public-private partnership: Financial
advisory/arrangement Launch of PRIDES Launched PRIDES in Oct. 2023 to provide
local governments with a comprehensive
consulting service that covers everything fromscheme planning to fundraising for projects
suchasfacility
andinfrastructuredevelopment that utilize external financial
resources to revitalize the community.
 Providing highly professional advice andfundraising arrangement support for local
government projects aimed at developing
sustainable communities

Transition to a cashless society

Public-private partnership: Financial
advisory/arrangement
Consulting (PRIDES)

Nakatsugawa City
 Contracted CFO of Nakatsugawa Tourism Bureau
 JTA’s project on sustainable tourist destination model-> Experimental demonstration of pay-as-you-go parking
at Naegi Castle



Educating clients on the efficiencyof expense management andcompliance with the Electronic
Books Maintenance Act, andsuggesting introduction of legal
entity cards, corporate cards, etc.
Promoting cashless transactions
at municipalities, schools, etc.,
where cashless needs are
anticipated

No. of corporate and other card clients
No. of legal entity card clients
No. of member store contracts

43(Contracts/cli
ents)

2,564
134

1,708
83
828

1,295

425
386

797

1,135

22/9

23/3

23/9

854

(Cumulative total from Apr. 2022)

25

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

ActionSupporting local companies’ carbon neutral business management
・ 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 and environmental
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

Key items
 Decarbonization support for local companies
 CO2 emission reduction
 Paper use reduction
 Use of HVs and EVs for sales fleet

Sustainability KPIs
Targets by FY2030

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 (vs. FY2013 level)100％
reduction

Paper use (vs. FY2019 level)

５０％
reduction

26

Materiality ～Environmental conservation and climate change actions～ Efforts are underway to respond to climate change and disclose information based on TCFD recommendations.

Jun. 2021
Declaration of support for
TCFD recommendations
Juroku Bank

Mar. 2022
Declaration of support for
TCFD recommendations

Highest rating among
local financial
institutions
headquartered in the
Tokai region

Juroku Financial Group

Dec. 2022
Acquisition of CDP’s “B” rating

Mar. 2023
Joined PCAFFirst participation by
local financial
institutions
headquartered in the
Tokai region

Nov. 2022–Mar. 2023
Participation in MOEJ-sponsored financial
institution portfolio carbon analysis pilot
program assistance operation

May 2022
Disclosure based on TCFD
recommendations
 Implementation of scenario analysis• Transitional risks
May 2022• Physical risks
Establishment of CO emission
2

reduction targets
 2030: 50% reduction vs. FY2013
 2050: Achieve carbon neutrality

Sep. 2023
Sep.
2023neutral achievement
CarbonCarbonneutral achievement
date
date brought
forward tobrought
forward
to
2030
2030

Jun. 2023
Enhancement of disclosures
based on TCFD recommendations
 Expansion of scenario analysis
scope Disclosure of scope 3 emissions

Participated based on
selection of 3 financial
institutions leading in climatechange actions

27

Materiality: Environmental conservation and climate change actions
 With regard to CO2 emissions (Scope 1, 2), the target for achieving carbon neutrality has been moved forward from FY2050 to FY2030 since we arelikely to achieve approx. 50% CO2 reduction by the end of FY2023.
 Paper use reduction is progressing steadily, with a 32.7% reduction compared to FY2019, mainly due to the introduction of monitors in each of
Juroku Bank's branches.
Sustainability KPIs

CO2 emissions (vs. FY2013 level)

Sustainability KPIs

(t-CO2)

13,110(Thousand sheets)

50,480

-50%

6,374

-50%
25,351
Carbonneutrality

7,879

3,549 [47.3% reduction](H1 results)
22/3

48,96645,73041,726

7,389

6,736

FY2013[Base year]

Paper use (vs. FY2019 level)

23/3

24/3
(Forecast)

FY2030[Target] CO2 emissions (Scope 1 and 2) in FY2023 H1 was 47.3% lower comparedto the FY2013 base level due to the switch to CO2-free electricity at Juroku
Bank Computer Center and Office Center Building.
 Since the sustainability KPI of “reducing CO2 emissions by 50% from the
FY2013 level by FY2030” will likely be achieved by the end of FY2023, thetarget for achieving carbon neutrality has been moved forward from FY2050
to FY2030.
 Upgrades of building air conditioning systems and LED conversions are
ongoing.

25,129FY2019[Base year]

16,904(H1 results)
21/3

22/3

23/3

[32.7% reduction]

24/3(Forecast)

25,240

FY2030[Target] A total of about 500 monitors were installed in each of Juroku Bank's
branches in June 2023
 Paper use in FY2023 H1 was 32.7% lower compared to the FY2019 baselevel

Conversion of company vehicles to HVs (hybrid
vehicles) and EVs (electric vehicles) Gradual transition to clean energy vehicles (e.g. replacement ofapproximately 1,000 commercial vehicles owned by our group with
HVs/EVs).
 In FY2023 H1, 50 gasoline vehicles were replaced with HVs/EVs, boosting
the total number of HVs/EVs owned to 103 and the HV/EV ratio to 9.55%.

28

Materiality: Environmental conservation and climate change actions
 The number of orders for Carbon Neutral Navigator and SBT certification support, which comprise the decarbonization support menu, is steadily
increasing.
 Juroku Lease launched one-stop support service Carbon Neutral Program, the first initiative of its kind for a regional bank-affiliated leasing company.

Decarbonization support for local companies[Juroku Bank] Decarbonization management support for business
partners
 The number of orders for Juroku Bank’s Carbon Neutral Navigator
Supported by WasteBox, which is a consulting service for the visualization,
reduction target, etc. of greenhouse gas emissions, increased steadily.
 To accelerate support for customers' decarbonization management, thebank launched the Decarbonization Management Transition Plan Review inFeb. 2023, which supports the preparation of transition plans for
decarbonization management, and the Trianet Zero greenhouse gas
emissions management system in Aug. 2023.
No. of orders

FY2021

FY2022

FY2023
H1

Electronic delivery service for qualified invoices related toconsumption tax
 To go paperless and improve convenience, Juroku Bank launched
NaviExpress, an electronic delivery service for qualified invoices aimed atcorporate and sole proprietor customers.
 This is the first initiative among regional banks headquartered in the three
Tokai prefectures to offer electronic delivery of qualified invoices (as ofrelease on Nov. 7, 2023)

Support for environmental initiatives
 Support for TCFD recommendations was declared by Juroku Bank in June
2021 and by the Company in Mar. 2022.

Carbon Neutral Navigator

47

91

41

 Received a B-rating, the third best evaluation out of 8 levels, in the CDP’s
Climate Change Survey for 2022

SBT certification support

2

43

134

 Joined the Partnership for Carbon Accounting Financials (PCAF) in Mar.
2023

[Juroku Lease] One-stop support through Carbon Neutral Program The Carbon Neutral Program package is offered as a menu to support
customers' decarbonization management.

 It features one-stop support covering three CO2 reduction processes: CO2
emissions visualization, CO2 emissions reduction through energy
conservation, energy creation and fuel conversion, and CO2 offsetting(making up for CO2 emissions that cannot be reduced).

29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

ActionBuilding a corporate culture that boasts diversity as strength・ 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 resources andempower them・ Expanding investment in human capital by increasing opportunities to participate intrainings
・ Developing specialized human resources and helping them attain qualifications
・ Developing human resources capable of building trusting relations with customers
・ Utilizing a career-challenge system

Key items
 Development of female managers
 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 leave claimed

8０％

30

Materiality: Empowerment of diverse human resources The percentage of female managers in FY2023 H1 reached 7.9%, up 0.8 percentage points YoY.
 The number of days taken as paid leave in FY2023 H1 increased by 0.52 days YoY to 5.84 days as a result of work-life balance promotion.
Sustainability
KPI

Sustainability
KPI

Percentage of female managers

 As part of work style reform initiatives to achieve a good work-life balance,
we are aiming for an 80% paid leave utilization rate.
 In FY2023 H1, 5.84 days were taken as paid leave, up 0.52 days YoY, andthe utilization rate was 28.6%.

 To build a corporate culture that has strength in its diversity, 4 women wereappointed to managerial positions in FY2023 H1, boosting the ratio of
female managers to 7.9%.
 Focused on enhancing support systems by providing next-generation leader
training and loan operations training for female managers.
Percentage of female managers
Percentage of women in leadership positions and above

14.0
11.3
4.2

15.7

16.2

6.7

7.7

60

48.2

54.4

21/3

22/3

22/9

54.0

23/9

FY2030[Target]

4.16
4.54

5.71
5

20
4.76

6.44

4.76

5.32

5.84 H1 results

22/3

23/3

23/9

28.6%

0

 All employees taking the IT Passport Exam to acquire basic IT knowledge
 Supporting the acquisition of higher qualifications through enhanced training,
incentives, and off-site courses(As of end of Sep. 2023)
No. of successful
applicants0
20/3

Development of IT / DX human resources

Of which, FY2023 H1

IT Passport Exam

978

277

Advanced digital-related
qualifications

107

20

15

47.7
10

40

23/3

(Days / %) 20

7.9
4.74

20/3

No. of paid leave claimed (H2)

Percentage of paid leave claimed

80.0
20.0

7.1

No. of paid leave claimed (H1)

80

17.1

11.6

5.5

(%)

Percentage of paid leave claimed

21/3

FY2030[Target]Promoting parental leave for men
 The utilization rate of the spousal maternity leave system, which aims toencourage male participation in childcare, has remained high at over 90%
since its introduction in 2017.
 To raise awareness of the parental leave systems, the HR Department
sends out notices to eligible employees and disseminates information via
intranet.

31

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

ActionAdvancing 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

Key items

Third-party involvement in assessing the effectiveness of 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
Targets by FY2030
In i t i a l r e s p o n s e t r a i n i n g f o re me r g e n c y p r e p a r e d n e s s

No less than
twice a year

Dialog with investors

No less than
10 times a
year

32

Materiality: Advancement of governance As part of on-going targets, 4 sessions of the initial response training for emergency preparedness (progress rate: 200%) and 16 dialogue sessions
with investors (progress rate: 160%) were conducted in FY2023 H1.
Sustainability
KPI

Initial response training for emergency
preparedness

 Against the on-going target of at least twice a year, initial response training
was held 4 times in FY2023 H1.
On-going targets

At least twice a year

FY2023 H1

4 times (Progress rate: 200%)
BCP training simulating wind and flood damage

BCP training simulating earthquake

Initial response training for ATM malfunction

Cyberattack exercise

Training programs

Dialogue with investors Against the on-going target of at least 10 times a year, the dialogue
sessions were held 16 times in FY2023 H1.
 Continuing to reinforce initiatives aimed at achieving proactive dialogue andenhancing dialogue content
On-going targets
At least 10 times a year
FY2023 H1

16 times (Progress rate: 160%)

 Currently selecting an assessment organization in response to propositions
from several outside organizations
 Continuing to prepare for the implementation of assessments in thefollowing fiscal year and beyond.

[Ref.] Skills matrix of the Company’s directors
Main skills, experience, etc. of the Director

Name

Directors who are
Audit &
Supervisory
Board members

Third-party involvement in assessing theeffectiveness of the Board of Directors

 Implemented third-party-involved assessment to enhance the internal
auditing system Developed internal auditing plan for FY2023

Directors who are not Audit & Supervisory Board
members

Sustainability
KPI

Third-party involvement in assessing theadvancement of the internal auditing system

Current position in thecompany

Busin
ess
mana
geme
nt

Finan
ce

HR

Regio
nal
vitaliz
ation●

Legal/

Finance/risk
accounting management

Yukio
MuraseRepresentative Director
and Chairperson

●

●

●

●

●

Naoki Ikeda

Representative Director
and President

●

●

●

●

●

AkihideIshiguro

Director and Deputy
President●●●

Yukiyasu
ShirakiDirector and Senior
Managing Executive
Officer●●

Yoshiaki
Bito

Director and Managing
Executive Officer●●

Hiroyuki
Ota

Director●●

Satoko Ito

Outside Director

Yasushi
Ueda

Outside Director●●

NaohikoIshikawa

Director●●

ShinjiIshihara

Outside Director

Satoe
Tsuge

Outside Director

ESG/
sustainability

●

●

●

●

●

●

●
●

●

●

●

●

●

* List of areas in which internal directors have experience and areas in which the Company has particular expectations of outside directors
Note that the list does not represent all the knowledge and experience of each individual.

●

33

Disclosure Based on TCFD Recommendations
Governance

Strategy
Opportunities and risks associated with climate change

Sustainability management structure

Sustainability Council

The Juroku Financial Group analyses risks and opportunities associated withclimate change in the timeframes of “short term,” “mid term” and “long term.”*Short-term = Around 5 years; Medium-term = Around 10 years; Long-term = Around 30 years
Assessment item
Products andservices
Opportunity

As stated in the Sustainability Policy, the Juroku Financial Group recognizes
sustainability initiatives (e.g. on climate change) as an important management
challenge. “The Juroku Financial Group SDGs Declaration” lists “environmental
conservation and climate change response” as one of the key challenges.
In order to address this challenge appropriately, the Group has set up the
Sustainability Council, which is chaired by the Representative Director andPresident and consists of Group Management Council members, Division
General Managers and the head of the Sustainability Management Office. The
Council generally meets at least once every 3 months to deliberate key
challenges (e.g., drawing up a policy for implementing initiatives on climatechange and other sustainability issues, setting targets and checking progress),and reflects the results to management strategies and risk management. Therealso is a system in place to have items deliberated at this Council to be reported
periodically to the Board of Directors at least once a year for appropriate
supervision.

Physical risksGroup’s Management Council

Sustainability Council

Energy sources

Resilience

Board of Directors

The meeting is chaired by the
Representative Director
and President and held at least once
every 3 months.
Items for deliberation are reported
periodically to the Board of Directors atleast once a year

Resource
efficiency

Administrating OfficeSustainability Management Office

D&I Working Group

Climate Change and
TCFD Working Group

Business opportunity
initiatives

CO2 emissions reduction /Environmental
conservation

Diversity andwork-style reform

Disclosure based on TCFD
recommendations
Response to climate change

Sustainability Working Group
Consists of cross-organizational members from each Group company, including the executive director in charge.
Held monthly to discuss challenges that line up with respective responsibilities and report details to the Sustainability Council.

Timeframe
Short- tolong-termMid- to longterm Reduction in business costs through resource-saving, energysaving, and new technology utilization.

Short- tolong-term Increase in collaborative system development efforts with local
governments
and
other
organizationsondisaster
preparedness/mitigation to strengthen local resilience.
 Enhancement in corporate value by appropriately implementing
and disclosing climate change initiatives.

Short- tolong-term Deterioration in customers’ business performance associatedwith an increase and intensification in the severity of abnormal
weather, and degradation in loan asset value resulting fromdamage to collateral value.
 Work suspension occurring as a result of emergencies affecting
the Group’s sites or directors and employees.

Short- tolong-term
Short- tolong-term Degradation in loan asset value resulting from damage tocollateral value; deterioration in customers’ businessperformance resulting from such factors as changes inprecipitation and weather patterns, as well as higher averagetemperatures and sea levels.

Mid- to longterm

 Degradation in loan asset value resulting from decline incustomers’ business performance, associated with such factors
as climate change policies and regulatory reinforcements.

Mid- to longterm

Techno  Degradation in loan asset value resulting from decline incustomer’s business performance, associated with failure tologiesinvest in and the transition costs for low-carbon technologies.

Mid- to longterm

Market Degradation in loan asset value resulting from deteriorating
business performance of customers associated with suchfactors as changes in consumer behavior and rising raw
material costs.

Mid- to longterm

Reputation

 Degradation in corporate value resulting from slow
implementation and disclosure of appropriate climate-related
initiatives.

Short- tolong-term

Chronic
risks

Policy /Law
Transitional risks

Environmental Conservation
Working Group

Risks

Sustainable BusinessWorking Group

Acute
risks

Main opportunities and risks
 Increase in business opportunities (e.g. offering investments,
loans and consultation services to help customers’ transition toa decarbonized society) Increase in public works projects for disaster management thedemand for customers’ capital investment fund.

34

Disclosure Based on TCFD Recommendations
Scenario analysis

Metrics and targets

The Juroku Financial Group conducts scenario analysis on physical risks andtransitional risks in order to identify how climate-related risks would affect theGroup.
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

AnalysistargetBorrowers in Gifu/Aichi Prefectures
Collateral of real estate (buildings) in
Gifu/Aichi Prefectures(Excluding secured home loans)

Electric power sector
Automotive sector

Analysiscontent

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

Deterioration of customers’ businessperformance due to cost increase and sales
declineAnalysis
periodUp to 2050

Up to 2050

Analysis
results

Increase of credit costs: Up to approx. 7
billion yen at maximum

CO2 emissions
The Juroku Financial Group calculates its supply chain emissions (scope 3) inaddition its own CO2 emissions (scope 1 and 2).
Measured items
Direct emissions

Scope 2

Indirect emissions

6,020

Category 1

Purchased goods and services

12,940Category 2

Capital goods

3,615

Category 3

Fuel- and energy-related activities notincluded in scope 1 and 2

1,507

Category 4

Upstream transportation and distribution

1,672

Category 5

Waste generated in operations

53

Category 6

Business travel

174

Category 7

Employee commuting

Category 13

Downstream leased assets

Category 15

Investments

Scope 3

Increase of credit costs: Cumulative total of
approx. 2.5 billion yen*IPCC: Intergovernmental Panel on Climate Change*IEA: International Energy Agency

Risk management

CO2 emissions (t-CO2)

Scope 1

1,369

2,908
426
8,984,277

For the emissions of the investee/borrower (scope 3 category 15), calculations
are made on loans to domestic corporate clients, utilizing the PCAF standard
measurement method.
CO2 emissions = Σ (Emissions of each borrower x Contribution of the Group’s loans)Management of climate change risks
An integrated risk management framework is in place at the Group, categorizing
into and managing the Group’s overall financial risks as “credit risk,” “market
risk,” “fluidity risk” and “operational risk.” Climate change risk is recognized as
one of the top risks and a driver of financial risk, and is managed with theframework for managing risks such as credit risks and operational risks.
Upon introducing a risk appetite framework (RAF), the Group has set forth in its
Risk Appetite Policy about enhancing efforts and promoting engagement,
thereby endeavoring to appropriately manage said risks.

Emissions calculation
method*Factors such as company-disclosed data and CDP data are used for eachborrower’s emissions. When the data is unobtainable, estimations are made basedon the PCAF database emissions coefficient.

*Contribution level = The Group’s balance of loans/The borrower’s total funding
Data quality
score

3.6

Coverage

98.0％

35

Section I: Interim Results for FY2023

Section II: Initiatives for Sustainability
Section III: Progress in the 2nd
Medium-Term Management Plan

Section IV: Initiatives forEnhancing Corporate Value

Overview of the Long-Term Vision As we maximize "16 Group Energy," we aim to stay ahead of the curve to always serve the region, which is where we want to be in 10 years.

<Long-Term Vision “16Vision-10” (Overview of April 2023–March 2033)>
Long-Term Vision

Staying Ahead of the Curve to Always Serve the Region

Values Considered Important in the Long-Term
VisionCustomers
The Juroku Financial Group will move forward
alongside people who live and undertake activities
in the region.
The Group will understand customers well andidentify with them to solve challenges together.

Contributing to the local community(customers, Directors and employees,
shareholders) by achieving “Sustainability”(i.e., creating social value) and “Growth” (i.e.,creating economic value) with “Purpose”
serving as our driving force.

Directors and employees
We Directors and employees share our aspiration tocontribute to the region in which we grew up.
The Group will develop an environment where all
Directors and employees can bear this aspiration inmind and perform at their full potential.

We want to develop people and companies
thriving in this region where we grew up!

Targets of the Long-Term Vision
FY2032 target level
Business growth

Solving social issues

Consolidated net income: 30 billion yen or above
Consolidated capital adequacy ratio: 12% or more

Contributing to creating a sustainable
societyEnhancing quality of life in the region

Becoming a frontrunner of theregion and society

Making a foray into new businessdomains
Directors and employees growing andbeing empowered

Solving various social issues
Achievement of sustainability KPIs (FY2030 target)

37

Overview of the 2nd Medium-Term Management Plan As we implement the four basic strategies of the 2nd Medium-Term Management Plan group-wide, we will create new value
by establishing a comprehensive financial services business.

Staying Ahead of the Curve to Always Serve theRegion: 1st stage

2nd Medium-Term
Management Plan

Creating new value by taking on fast-paced reform initiatives
during the Plan’s 5-year period(April 2023–March 2028)

The 4 basic strategies

Society sought after
by people

From reform tocreation

Maximizing the value of human resources

Developing an organizational
environment in which each Group
Director and employee can beempowered on a voluntary basis

Realizing sustainability
based on transformations

Employing the

16 Group Energy
Demonstration of comprehensive
financial service functions
Enhancement of core business(loans and deposits/exchange)

A society thatcan realize
diverse types ofhappiness

Resilientsociety

Expansion of new businessdomains

JurokuFG

Sustainabl
e society

Offering services that exceed customer
expectations

Becoming a new force that draws out the
involvement of the region
Getting more involved in the region andcreating a region resilient to situations
including emergencies

Boosting solution-presenting
capability and enhancing sales toresolve diverse challenges

Our mission

Achieving customer/local growth and prosperity

Long-Term Vision
1st Management Plan

Numerical targets
for FY2027

Profitability2nd Medium-Term Management Plan

Consolidated net income: 20
billion yen or above
Consolidated ROE: 5% or more

Efficiency

Next Medium-Term Management Plan

Consolidated
adjusted OHR: 50%
level

Fiscalintegrity

Consolidated capital
adequacy ratio: 11% or more

38

Progress against Numerical Targets of the 2nd Medium-Term Management Plan In order to achieve the numerical targets of the 2nd Medium-Term Management Plan, we aim to accelerate our group's growth under the four basic
strategies and improve profitability, efficiency and fiscal integrity.
Numerical
targetFurthergrowthConsolidated net income (100millionyen) of our group

Numerical
targetConsolidated ROE (%)

Profitability improvement and risk
asset control

Numerical
target: 5% orabove

Numerical target: 20
billion yen or above

4.36
3.98

170
171
99

106

18/3

19/3

Numerical
target128

Adjusted OHR (%)

22/3

23/3

23/9

3.65

147

21/3

4.75

186

95
20/3

4.73

23/3

24/3

Profitability improvement and cost
control

2.94

3.05

18/3

19/3

H1

Numerical
target20/3

Consolidated capital adequacy ratio (%)

21/3

22/3

Further accumulation of retained
earnings

Numerical target:
11% or above

82.49
75.19
68.69

66.51

Numerical
target: 50%
range
18/3

19/3

20/3

21/3

58.87

58.90

22/3

23/3

61.06

23/9

9.93

10.52

10.54

21/3

22/3

23/3

10.72

9.27

9.15

9.08

18/3

19/3

20/3

23/9

39

Roadmap to Profit Targets
 Making strategic investments in human capital and DX that will lead to our growth during the period of the 2nd Medium-Term
Management Plan, while also aiming to achieve numerical targets by growing the top-line, including the core business, thefee business and group profitability

Apr. 2023–Mar. 2033: Long-Term Vision

Oct. 2021–Mar. 2023

1st Management Plan

Apr. 2023–Mar. 2028 2nd Medium-Term Management Plan
[Top-line growth]

Bank
+30

 Increase in loan  Rise ininterestgroup Increase in interest profitability
and dividends fromsecurities
 Securities
 Increase inportfolio
individual-related
restructuringincome andcorporate solution
fees

Bank
+78

171

186

147
128

Group
companies+11

Consolidated net income
30 billion yen or above

Expense cuts
Expenses+25(Strategic
investments)
 Lower
personnel-70
expenses
Investment
in
Other
due tohuman capital /changes in
-60
DX
for
growthstaff
composition  Investment in HQ
function transfer  Increase incredit costs
 Increase incorporate tax,
etc.

Consolidated net income
20 billion yen or above

106

19/3

20/3

21/3

22/3

23/3

Juroku FG established2028/32033/340

Acceleration of our Group’s Transformation-Driven Growth Potential
 Roll out A-G transformations group-wide and maximize social and economic value

AX (Transform all)

BX (Transform the bank)

CX (Transform communities)

DX (Tra ns form digita lly)A

● Change mindset and behavior of each and every employee- Enhance the oper ation of a new HR system to em powerem ployees● Realize true value of the core business and diversify revenue streams

B- Proactively support cash flow and the core business - Improve proposal
capabilities through intergroup collaboration- Provide new value that precisely meets societal needsＣ● Develop resilient communities by leveraging broad business domains- Consider various features and amenities for the opening of the 16FG
Office & Park - Regional DX promotion- Business start-up support- Community development support- Promote
initiatives that help improve financial literacy in the region

Ｄ● Take on the challenge to maximize our group productivity throughdigital technology- Improve productivity by introducing new groupware- Digitize HQ back-office operations- Create a diverse internal andexternal communication environment

EX (Transform theenterprise)Ｅ

FX (Transform functions)● Resolve various customer issues by improving our solution proposal
capabilities- Actively expand management succession support led by
NOBUNAGA Succession- Strengthen customer contacts by building trust relationships withcustomers - Increase NISA accounts● Review various functions to achieve group-wide optimizationＦ

GX (Transform throughgreen-related initiatives)- Utilize new JUROKU Portal, e-learning (Cloud Campus), and AgileWorksＧ● Support customers' decarbonization efforts by making “theenvironment" as part of our core business- Support customers' decarbonization through external collaborations

41

Transformation Strategy
 Digitizing various operations and empowering the creativity of all employees to maximize group productivity
Enhancing productivity by introducing new groupware

PICK UP

Reducing workload by accelerating digitization
 Focusing on digitization and going paperless by promoting business/channeltransformation
 Improving branch operation efficiency by increasing the Juroku Quick Navi (instore tablet) service menu and expanding centralized loan operations using
lot scanners, etc.
 Adoption of Google Workspace (GWS) has also contributed to the reduction
in workload.

 In May 2022, DX-related collaboration with SoftBank, including personnel
support, started. While actively incorporating external knowledge and strongly
promoting DX within our group, we introduced new groupware Google
Workspace (GWS) in Sep. 2023 to improve productivity.
 Productivity improved as streamlined information exchange/sharing enabled
effective communication and collaboration within our group.

(Ten thousand hours)

Reduction in workload (vs. end of Mar. 2017)

 In addition, we utilize Google Meet (part of the GWS feature) and other tools
for internal and external communications.
 As work schedules entered in CRM (customer relationship management
system) are automatically reflected in the GWS scheduling function, the needfor employees to enter and confirm schedules in the office has been reduced.

128.7
70.0

86.3

20/3

21/3

22/3

154.6

23/3

183.7

23/9

Promoting internet banking
 Juroku Direct for individual customers and Biz-Juroku Direct for corporate
customers continuing to increase client numbers through enhanced non-faceto-face channels in an effort to further accelerate DX
J Direct (Thousand users)
Biz-J Direct (Thousand users)
300

245

258

271

282

297
22,00020,000200
18,78518,931

21/9

22/3

19,491

19,737

19,946

22/9

23/3

23/9

100

18,00016,00042

Human Innovation Strategy
 Implementing initiatives to enhance the motivation and skills of all employees, thereby creating an organizational environment where each individual
can work independently and fully demonstrate their potential
Launching new HR system; Transfer to holding company P I C K U P

Shifting away from seniority-based promotion

 In Apr. 2023, a new HR system was launched with the aim of enabling eachand every employee to show diversity, recognize growth and spend anenriched life as an irreplaceable member of a regional society.
 In line with the start of the new HR system, all Juroku Bank-registeredemployees transferred to the Company. This has enabled the optimal HR
allocation to group companies, including the bank where the Company
started, and personnel shifts based on employees’ individuality and talents.

 Promoted an employee in his 30s to branch manager as part of the policy toencourage the growth of motivated and enterprising employees Board Chairman and Associate Directors were also appointed to allow
employees with extensive experience and solid track record to exercise theirabilities and act more proactively.

Vitalizing the organization
Concept
and developing active
1
personnel
Concept Clarifying the mission and2transforming behavior

Concept3

Developing a corporate
culture embracing
individuality and diversity

Visualizing individuality and skills and appropriate staffing
 Assigning personnel based on each person's individuality, skills, ideas, etc.,
identified through “My Vision/Commitment” (what I aspire to be), etc.
 In launching NOBUNAGA Succession, the career challenge system (an inhouse open recruitment system) was used. 3 employees were selected out of
61 applicants.
 Starting an expert system in FY2023 H2 to systematically train personnel forthe group’s key positions

Introducing “My
Vision/Commitment”
Development of newassessment andcompensation systems
Empowerment of diverse
human resources

Expanding training opportunities to empower diverse humanresources Expanding training opportunities to promote the empowerment of a diverse
workforce Supporting employees’ self-development by holding "e-school” holiday
courses(As of end of Sep. 2023)

Juroku Financial Group
Employees (on loan to group companies)

Main training
Training for developing HR capable of building
trust relationships with clients
JurokuBank

JurokuLease

JurokuTT

JurokuCard

JDDS

Juroku RI ＮＯＢＵNOBU. Machiokoshi JBS
Cap.

JurokuCreditThriving at each company as staff on loan from Juroku Financial GroupFY2023 H1 “e-school” holiday courses

No. of trainees
to date
2,215
845

43

Customer-First Marketing Strategy
 In addition to deepening the core business, we will address various needs of our customers and regions by maximizing the group functions and expanding
into new business domains catering to societal needs.
PICK UPManagement succession support by NOBUNAGA Succession

 NOBUNAGA Succession Inc. was established as a joint venture with Nihon
M&A Center Holdings Inc. on July 3, 2023, aiming to solve management
succession issues faced by local companies and support the sustainablegrowth of the regional economy.
 Since its establishment, the company has met with many business owners in
Gifu and Aichi prefectures to resolve succession issues, and has provided
approximately 350 consultations in the four months to the end of Oct. 2023.
 In Sep. 2023, the company signed the Memorandum for BusinessSuccession-Related Collaboration with Gifu City Credit Guarantee Association
to contribute to the promotion of small and medium-sized enterprises throughbusiness succession support.
NOBUNAGA Succession’s activities(As of end of Oct. 2023)

 Since Juroku Research Instituteexpanded
into
personnel
placement in Apr. 2019, thenumber of placement contracts hasreached a record high.
 In addition to personnel placement,
we support customers' HR affairs
by offering seminars for new
employees
andHRsystemconsulting services.

(People)Successful placement

29

28

20/3

21/3

60

58

61

22/3

23/3

23/9

Expanding NISA accounts to support asset formation

No. of consultations

349(Of which, M&A)

201

(Of which, sales advisory
agreements)

8

Supporting sales channel expansion through business matching Supportingthecreationofcustomers’
newprofit-earning
opportunities
andongoingdevelopment through businessmatching that leverages Juroku
Bank's information network
 Also developing business matchingas an effective solution tool toaddress a societal issue of
decarbonization

Problem solving through personnel placement

Closing fee

 Promoting initiatives to expand NISA accounts in anticipation of the New
NISA system starting in Jan. 2024
 A Juroku FG (Juroku Bank and Juroku TT Securities) version of the “NewNISA” flyer was newly prepared to publicize the New NISA system, whichaims to support local customers' asset formation.
 Starting in Oct. 2023, Juroku FG (Juroku Bank and Juroku TT Securities) will
jointly roll out a New NISA campaign.

(Million yen)

(Accounts)

No. of NISA accounts

276
218
147

21/3

122
22/3

23/3

23/9

34,90936,247

37,578

20/3

20/9

21/3

39,81021/941,86822/3

43,824

45,11322/9

23/3

47,881

23/9

44

Region-Producing Strategy
 Making the most of our wide-ranging business domains, our group will play a central role in contributing to the revitalization of local economies andthe sustainable development of local communities.
Considerations for the opening of the 16 FG Office & Park P I C K U P

Financial literacy education

 Decided to relocate to a new headquarters building in 2027, 50 years after thecompletion of the current building, in order to realize our group management
philosophy
 In July 2023, we made an announcement of being selected as a preferredbidder, as a result of a public tender, for the Gifu City’s project to utilize the siteof the Gifu city hall.
Signed a basic agreement with Gifu City in Aug. 2023
 The concept is “16FG Office & Park for creating the future of ‘#GIFU’ together’,”aiming to make the downtown area more attractive and easier to move aroundby developing a base with a beautiful and comfortable common space and aworkplace that is ahead of its time.
 Various features and amenities are being considered for the planned opening in
Apr. 2027.

 Holding seminars on various financial topics for people of all ages, fromelementary school students to senior citizens, by making full use of theknowledge of each group company
 In Jan. 2023, we released Juroku MONEY COLLEGE, a systematic financial
education menu aimed at increasing financial literacy. Conducted seminars
on asset formation, entrepreneurship, cashless transactions, loans, etc.,
mainly for high school students● J u l y 2 0 2 3 An n o u n c e d o u r s e l e c t i o n a s p r e f e r r e d b i d d e r f o r t h e G i f u
C i t y’ s p r o j e c t t o u t i l i z e t h e s i t e o f t h e G i f u c i t y h a l l● Au g . 2 0 2 3 S i g n e d b a s i c a g r e e m e n t w i t h G i f u C i t y●Mar. 2024 Concluded a fixed-term business-use land leaseagreement●Feb. 2025 Construction starts● Ap r . 2 0 2 7 O p e n i n g
Bank's 150th anniversary

Juroku MONEY COLLEGE activity (as of Oct. 31, 2023)
Sessions
held to date26

Total numberof students

4,310 In Oct. 2023, we produced “Nobunaga Money Study,”
a financial board game for upper elementary school
students that incorporates elements of learning about
the charms of hometown Gifu into financial literacy
education.
 Providing opportunities for elementary school
students in Gifu Prefecture to study about finance andtheir hometown by using the board game in theirclassrooms.

Start-up support by NOBUNAGA Capital Village Building further relationship with STATION Ai, the largest incubation facility inJapan slated to open in Oct. 2024, to provide collaborative support for startups
 Employees of NOBUNAGA Capital Village
visit STATION Ai every month to not only findinvestees and business partners, but also tohold fundraising workshops.
 Undertook mentoring duties for the AichiStartup Business Plan Contest 2023, jointly
sponsored by STATION Ai and Aichi
Prefecture45Section I: Interim Results for FY2023

Section II: Initiatives for Sustainability
Section III: Progress in the 2nd
Medium-Term Management Plan

Section IV: Initiatives forEnhancing Corporate Value

Actions to Implement Management Conscious of Cost of Capital and Stock Prices
 In recognition of our group's efforts over the past two years since the Company’s establishment, our stock price and market capitalization nearly
doubled to 4,105 yen and 155.6 billion yen, respectively, as of Nov. 1, 2023.
 Against the Company’s share price on Oct. 1, 2021, the date of establishment, set as 100, the current share price is 200, higher than both the regionalbank average and the Nikkei average, which currently stand at 176 and 109, respectively.
Movements of the Company's share price, the regionalbank average and the Nikkei Stock Average
200

Juroku Financial
Group
Regional bankaverage
Nikkei average

190
180

200
Nov. 1, 2023

Increase in corporate value exceeding

Share price

4,105 yen

Market cap.

155.6 billion yen

176

regional bank and Nikkei averages

170

Oct.1, 2021

160

Share
price

2,044 yen

Marketcap.

77.5 billion
yen

150
140
130
120

109

110
100
90
80

Movements against
100 as of Oct. 1, 2021

2021/10/1

2022/1/1

2022/4/1

2022/7/1

2022/10/1

2023/1/1

2023/4/1

2023/7/1

2023/10/1

47

Actions to Implement Management Conscious of Cost of Capital and Stock Prices
 The number of shareholders, which was approximately 20,000 in Mar. 2021 before the Company’s establishment, increased significantly toapproximately 22,000 in Mar. 2022 and 24,000 in Mar. 2023.

No. of shareholders(People)Juroku FG
established
Expansion of the fan base

24,053
22,131
20,532

20,2542017/3

18,844

18,772

19,0362018/3

2019/32020/3* A 10-to-1 reverse split of common shares took place as of Oct. 1, 2017.

2021/32022/32023/32021/1048

Actions to Implement Management Conscious of Cost of Capital and Stock Prices
 Amid prolonged low interest rates and other headwinds in the financial business environment, the Company’s ROE has risen significantly as a resultof group-wide fundamental reforms aimed at improving profitability, while PER and PBR are still on the recovery path.

PBR movement

PBR, ROE and PER movements (against 100 as of the end of Mar. 2017)

0.80

200
Fundam ental r efor m ofthe pr ofi t str uctur e

159

Building highly profitable sales structure

150

0.60

ROE

0.40
100

0.40

0.32

0.31
0.23

PBR

0.26
0.20

0.21

0.22

PER

50

0.20

80
49

Feb. 2016 Negative interest rates
introduced
Headwinds in the financial industry intensified

0.00

0
17/3

18/3

19/3

20/3

21/3

22/3

23/3

23/9

17/3

18/3

19/3

20/3

21/3

22/3

23/3

23/9

49

Actions to Implement Management Conscious of Cost of Capital and Stock Prices
 Focusing on initiatives to improve PBR that lead to sustainable profit growth, improvement of ROE and reduction of cost of equity.
Sustainableprofit growth

Achieving Long-term
Vision / Medium-termManagement Plan

Enhancingprofitability(RORA
Net income
improvement)
Increase ROE
Improve PBR(Enhance
corporate value)

Controlling capital
adequacy levels

P.37
- 40

Demonstrate true value of the core business
Expand the solution business

P.44
P.10

Cost control

Reinforce internal DX
Strict credit control

P.42
P.12

Optimal asset
allocation

Build optimal loan portfolio
Reduce cross-shareholdings

P.9
P.11

Optimal capital
allocation

Make proactive investments that lead to our growth
Create a mechanism to improve our group profitability

P.40
- 41

Enhanced
shareholder returns

Pay stable dividend (flat or higher dividend) throughprofit growth
Buy back equity flexibly

P.14
- 15

Lower performancevolatility

Expand into new business domains and make other efforts
to diversify income sources
Strengthen lending and other recurrent revenue businessmodels

P.44
P.9

Advancedsustainability
management

Implement group-wide, cross-sectional initiatives throughworking groups
Achieve sustainability KPIs (FY2030 targets)

P.18
- 19

Enhanced quality/quantityof dialogues withshareholders and investors

Improve understanding of the 2nd Medium-Term Business
Plan's basic strategies, growth investments, etc.
Disclose information timely and appropriately on matters ofmarket interest, etc.

P.38
- 39

Proactive messages
from top management

Enhance earnings briefings, etc. by top management
Top management take initiative to engage in proactive
dialogue with institutional investors

P.33

Top-line growth

Risk assets

Net income
Shareholders’equity Switch to a profit structure that increases profits throughstrategic investments Gear shift in approach to the deposit and loan business

Risk assets
Shareholders’equityEnhancing information
disclosure including
non-fiscal information

reduction of
cost of equity
Promoting enhanced
IR activities

50

Actions to Implement Management Conscious of Cost of Capital and Stock Prices Based on our unique growth strategy based on collaborations and joint ventures with various business sectors, we will strive to further enhance
corporate value by expanding our business domains with a sense of speed.

Management integration within the same sector

Management integration

Business
expansion
as agrowthstrategySame sector

Business alliance within the same sector

Business alliance
Collaboration with different sectors

Different sector

Collaboration/ joint venture

Major collaboration/ joint venture partners

51