FY2022 Financial Results

Staying Ahead of the Curve to Always Serve the Region

Ｊｕｎｅ 1，２０２３
TSE Prime Market and
NSE Premier Market （7380）

Table of Contents
Section I: Financial Results for FY2022

Section III: Review of the 1st Management Plan

Summary of Consolidated Results

5

Overview of the 1st Management Plan

37

[Reference] Summary of Non-Consolidated Results of the Juroku Bank

6

Summary of the 1st Management Plan:

38

Consolidated Core Net Operating Profit

7

Expenses and Adjusted OHR

8Summary of the 1st Management Plan:

Net Interest Income and Loans

9

Numerical Targets Versus Results

Fees and Commissions

10

Customer-First Marketing Strategy

40

Securities Investment

11

Digital Transformation (DX) Strategy

41

Credit Costs and Outstanding Non-Performing Loans

12

Local Commitment Strategy

42

Non-Interest Income Ratio and Profit from Customer Services

13

Capital Adequacy Ratio and Shareholder Returns

14

Business Projection and Dividend Forecast

15

Section II: Initiatives for Sustainability

Full Introduction of Comprehensive Financial Service Functions
39

Section IV: Development of the Long-Term Vision and the 2nd
Medium-Term Management Plan
Overview of the Long-Term Vision

44

Roadmap of the Long-Term Vision

45

Value-Creation Process

17

Values Considered Important in the Long-Term Vision

46

Initiatives for Key Challenges (Materiality)

18

Targets of the Long-Term Vision

47

Progress in Sustainability KPIs

19

Overview of the 2nd Medium-Term Management Plan48

Materiality ～Revitalization of the local economy～

20–22

Transformation Strategy

49–50

Materiality ～Sustainable development of the local community～

23–25

Human Innovation Strategy

51–52

Materiality ～Environmental conservation and climate change actions～

26–29

Customer-First Marketing Strategy

53–54

Materiality ～Empowerment of diverse human resources～

30–31

Region-Producing Strategy

55–56

Materiality ～Advanced governance～

32–33

Where the 2nd Medium-Term Management Plan Stands

57

Disclosure Based on TCFD Recommendations

34–35

Numerical Target for FY2027

58

Capitalization Strategy

59

Enhancement of Shareholder Returns and Contribution to Local Communities

60

New Endeavors

61※

The Juroku Financial Group was established on October 1, 2021. Consolidated figures prior to the March 2021 term are associated with the Juroku Bank Group, the parent company of which is the 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.

2

Summary
Section I: Financial Results for FY2022


The consolidated core net operating profit reached the 30 billion yen level again this term, based on such factors as an increase in fees and commissions. The ordinary profit
and net income attributable to owners of the parent both increased for the fifth consecutive fiscal term.

With efficient group management executed through the transition to a holding company, the consolidated adjusted OHR marked 58.90%, achieving the “no more than 65%”
target of the 1st Management Plan.

Section II: Initiatives for Sustainability

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

To vitalize the local economy, which is presented as an initiative for key challenges (materiality), the Group signed a “Basic Agreement Concerning Consideration of Joint
Venture Business” with Nihon M&A Center Holdings Inc.

The CDP’s climate change questionnaire for 2022 provided the Group a “B” rating in December 2022. In March 2023, the Group joined the Partnership for Carbon
Accounting Financials (PCAF).

Section III: Review of the 1st Management Plan

Around the time the transition was made to a holding company, the Group launched new companies and created new businesses to change the Group.



Under an enhanced management system, the Group rolled out its customer-first marketing strategy, DX strategy, and local commitment strategy, and thereby achieved all
numerical targets.

Section IV: Development of the Long-Term Vision and the 2nd Medium-Term Management PlanThe Group developed both its Long-Term Vision “16Vision-10” to guide the Group’s management from here on, and also developed the 2nd Medium-Term Management
Plan “Staying Ahead of the Curve to Always Serve the Region: First Stage,” the period of which covers the first 5 years the Vision.



By setting the theme for the Vision--a blueprint of where the Group wants to be in a decade from now--as “Staying Ahead of the Curve to Always Serve the Region,” the Groupwill aim to contribute to the local community by achieving sustainability and growth, harnessing purpose as a driving force.

With the 2nd Medium-Term Management Plan, the Group aims to achieve the Long-Term Vision by promoting 4 basic strategies (“Transformation Strategy,” “Human
Innovation Strategy,” “Customer-First Marketing Strategy,” and “Region-Producing Strategy”) as Group-wide efforts.



The Group has acquired treasury stocks to enhance shareholder returns and both achieve the Group’s sustainable growth and rise in corporate value on the medium- tolong-term through contribution to the local community. Said stocks are to be partially applied to a third-party-allocation-based disposal of treasury stock, aimed at
supporting the social service offered by the Juroku Foundation for Local Promotion.

3

Section I: Financial Results for FY2022

Section II: Initiatives for Sustainability

Section III: Review of the 1st Management Plan

Section IV: Development of the Long-Term Vision andthe 2nd Medium-Term Management PlanSummary of Consolidated Results

Juroku FG
consolidated results

 The consolidated core net operating profit reached the 30 billion yen level again this term, recording 30.6 billion yen. This resulted fromsuch factors as an increase in fees and commissions, and a decrease in expenses.
 [Consolidated results] The ordinary profit and net income attributable to owners of the parent increased for the fifth consecutive term.

(Unit: 0.1 billion
yen)
（億円）

Juroku FG
consolidated results
十六ＦＧ連結Consolidated
core gross operating profit
連結コア業務粗利益

2022/3A

2021/32023/3
B

前期比
YoY
B－A

1

712

782

745 1

△ 37

Net interest income
資金利益

505

543

511

△ 32

Fees and commissions
役務取引等利益

155

171

187

16

51

67

47

△ 20

474

460

439 2

△ 21

Personnel
うち人件費 expenses

255

247

235

△ 12

Non-personnel
expenses
うち物件費

188

183

174

△9

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

238

321

306 3

△ 15

0

△ 108

△ 77

31

239

213

229

16

Creditcosts
与信関係費用

42

28

16

△ 12

株式等関係損益
Profiton equities

45

65

36

△ 29

Ordinary
経常利益 profit

246

267

272 4

5

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

147

171

186 5

15

Other operating profit

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

Expenses
経費

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

Consolidated
net business profit
連結実質業務純益* The Juroku Financial Group was established on October 1, 2021. Consolidated figures prior to the March 2021 term
are associated with the Juroku Bank Group, the parent company of which is the Juroku Bank.

Consolidated core gross operating profit
Dropped 3.7 billion yen from the preceding term. This was a
result of a rise in the Juroku Bank’s foreign currency funding
costs reducing net interest income and other operating
profits (excluding profit/loss on JBGs and other debt
securities).

2

Expenses
Dropped 2.1 billion yen from the preceding term, based on a
reduction in both personnel and non-personnel expenses.

3

Consolidated core net operating profit
Marked 30.6 billion yen, down 1.5 billion yen from thepreceding term but reaching the 30 billion yen level again.
This was a result of offsetting the drop in the consolidated
core gross operating profit with reduced expenses.

4[Consolidated results] Ordinary profit

5

Net income attributable to owners of the parent
Based on such factors as a drop in credit costs, the[consolidated] ordinary profit increased by 0.5 billion yen
from the preceding term and the net income attributable toowners of the parent went up by 1.5 billion yen from thepreceding term, both rising for the fifth consecutive term.

5

[Reference]
Summary of Non-Consolidated Results of the Juroku Bank

Juroku Bank nonconsolidated results

 The core net operating profit reached 28.5 billion yen, coming in second after the record-high preceding term. This was a result of suchfactors as an increase in fees and commissions and a decrease in expenses.
 Both the ordinary profit and net income increased for the 6th consecutive term.

(Unit: 0.1 billion
yen)
（億円）

Juroku Bank十六銀行単体
non-consolidated results

2022/3A

2021/32023/3
B

前期比
YoY
B－A

1

Core
gross operating profit
コア業務粗利益

622

684

657 1

△ 27

資金利益
Net interest income

508

545

518

△ 27

Fees and commissions
役務取引等利益

98

111

126

15

Other operating profit

15

26

11

△ 15

407

394

371 2

△ 23

Personnel
うち人件費 expenses

209

195

181

△ 14

Non-personnel
expenses
うち物件費

170

171

163

△8

215

289

285 3

△4

0

△１０８

△ 77

31

215

180

208

28

Creditcosts
与信関係費用

41

25

14

△ 11

Profiton equities
株式等関係損益

45

67

36

△ 31

Ordinary
経常利益 profit

225

245

255 4

10

Net
income
当期純利益

141

173

179 5

6

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

Expenses
経費

コア業務純益Core
operating profit
Profiton JBGs and other debt securities
国債等債券損益

実質業務純益Net
operating profit

Core gross operating profit
Dropped 2.7 billion yen from the preceding term as a resultof the foreign currency funding cost rising and thereby
causing the net interest income and other operating profits todecrease (excluding profit/loss on JBGs and other debt
securities).

2

Expenses
Dropped 2.3 billion yen from the preceding term, based on a
reduction in both personnel and non-personnel expenses.

3Core net operating profit
Marked 28.5 billion yen, down 0.4 billion yen from but coming
after the record-high preceding term. This was as a result ofoffsetting the drop in the core gross operating profit with
reduced expenses.

4

Ordinary profit

5

Net income
Based on such factors as a drop in credit costs, the ordinary
profit increased by 1 billion yen and the net income went up
by 0.6 billion yen compared with the preceding term, bothrising for the 6th consecutive term.

6Consolidated core net operating profit

Juroku FG
consolidated results

 The consolidated core net operating profit reached the 30 billion yen level again this term, recording 30.6 billion yen. This was a result ofsuch factors as an increase in fees and commissions, and a decrease in expenses.

■ Transition of core gross operating profit and expenses

Consolidated core gross operating profit
Expenses(Unit: 0.1 billion yen)
21/3

22/3 (A)23/3 (B)YoY (B-A)

Consolidated core grossoperating profit

712

782

745

△37

Net interest income

505

543

511

△32

Fees and commissions

155

171

187

16

Other operating profit*

51

67

47

△20

Expenses

474

460

439

△21

Consolidated core net
operating profit

238

321

306

△15

■ Fluctuation factors and transition of
the consolidated core net operating profit
Loaninterest
△1
V: +8
R: △9

Depositinterest+0

Securities
investment
interest△2

V: △ 0
R: +0

V: △ 12
R: +10321

V: Balance factor

22/3

782
474

(0.1 billion yen)

Other
Net
interest Fees andOther
income commissionsnet
Non△ 28
interest
personnel+16
incomeexpenses△ 20 Personnel+9
expenses
+12

745
460

21/3

*Excluding profit/loss on JBGs and other debt securities(Consolidated core
net operating profit)
30.6
billion yen

32.1
billion yen

23.8
billion yen
712(0.1 billion yen)

439

22/3

23/3

Consolidated core net operating profit(0.1 billion yen)

30 billion yen level following thepreceding term
Taxes
+1

306

162

23/3

19/3

220

238

20/3

21/3

321

306

22/3

23/3

R: Yield factor

7

Expenses and Adjusted OHR

Juroku FG
consolidated results

Juroku Bank nonconsolidated results

 The adjusted OHR marked 58.90% in Juroku FG consolidated results and 56.52% in the Juroku Bank non-consolidated results, maintaining
50% levels: optimal level for local banks.
(Unit: 0.1 billion yen)

■ Expenses
21/3
Expenses
Juroku FG
consolidated
results

Personnel
expenses

460

439

△21

255

247

235

△12

188

Taxes

30

183

△1

28

407

394

371

△23

Personnel
expenses

209

195

181

△14

Non-personnel
expenses

170

171

163

△8

Taxes

27

27

26

△1

Taxes
(0.1 billion yen)
Non-personnel expenses
Personnel expenses
474

460

30

29

188

174

(0.1 billion yen)
Taxes
Non-personnel expenses
Personnel expenses

407

394

27

27

170

171

163

371
26

255

247

235

209

195

181

21/3

22/3

23/3

21/3

22/3

23/3

22/3 (A)23/3 (B)

YoY
(B-A)

Adjusted OHR (Juroku FG consolidated results)(%)

Adjusted OHR (Juroku Bank non-consolidated results)

712

782

745

△37

75.19

Expenses

474

460

439

△21

75.04

Adjusted OHR

66.51

58.87

58.90

0.03

Core grossoperating profit

622

684

657

△27

Adjusted OHR

439
28

183

Core grossoperating profit

Expenses

Juroku Bank nonconsolidated results(Unit: 0.1 billion yen, %)21/3

Juroku Bank
nonconsolidated
results

△9

174

29

■ Adjusted OHR

Juroku FG
consolidated
results

YoY(B-A)

23/3 (B)474

Non-personnel
expenses

Expenses
Juroku Bank
nonconsolidated
results

22/3 (A)

Juroku FG
consolidated results

68.69

67.18

407

394

371

△23

65.38

57.70

56.52

△1.18

19/3

20/3

66.51

65.38

21/3

58.87

58.90

57.70

56.52

22/3

23/3

8

Juroku Bank nonconsolidated results

Net Interest Income and Loans The net interest income dropped by 2.7 billion yen from the preceding term to 51.8 billion yen. This resulted from an increase in foreign
currency funding costs, which was caused by a rise in the overseas interest rate.
 The average balance of JPY loans showed a solid result of 4,587.0 billion yen, up 97.4 billion yen from the preceding term.
Interest income in foreign currencies■ Breakdown of net interest income(Unit: 0.1 billion yen)
22/3
(A)

21/3

23/3
(B)

Difference
(B–A)

508

545

518

△27

465

494

490

△4

379

378

375

△3

JPY loan interest (1Q)

94

96

93

△3

Same as above (2Q)

96

95

94

△1

Same as above (3Q)

96

94

94

△0

Same as above (4Q)

95

93

94

1

JPY securities investment

82

95

98

3

JPY deposit interest

3

20

15

△5

42

50

28

△22

Net interest income
Interest income in JPY

JPY loans and deposits

Interest income in foreign currencies

JPY deposit interest
JPY securities investment
JPY loans and deposits
545
50
20
95

518
28
15
98

379

378

375

21/3

22/3

23/3

508
42
3
82

Average balance of JPY loans■ Average balance and yield of JPY loans
21/3

22/3
(A)

Average balance of JPY loans

44,11144,896

Average yield of JPY loans

0.867

0.846

(Unit: 0.1 billion yen, %)50,00023/3
Difference 48,000
(B)
(B-A)
46,00045,87097444,000
42,0000.822△0.02440,000
38,000(0.1 billion yen)

0.867

△0.0210.846

44,11144,896

21/3

22/3

Average yield of JPY loans(0.1 billion yen, %)△0.024
1.400
0.822
1.200
1.000
0.800
0.600
0.400
0.200
0.000
(0.20045,870(0.400(0.600(0.800(1.000923/3

Juroku Bank nonconsolidated results

Fees and Commissions

 Fees and commissions grew by 1.5 billion yen from the preceding term to an all-time high of 12.6 billion yen. This resulted from an increase insuch areas as individual-related and corporate solution-related income.

■ Breakdown of fees and commissions(Unit: 0.1 billion yen)

22/3
(A)

21/3
Juroku Bank

23/3
(B)

Difference
(B-A)

98

111

126

15

Individual-related

44

61

71

10

Corporate-related

19

20

27

7

<Juroku TT Securities> Individual-related income
29
Individual-related

98

Other

35

29

28

△1

Juroku TT Securities

29

33

28

△5

19

Juroku Bank + Juroku TT Securities

128

145

155

10

44

35

■ Corporate solution-related income
22/3
(A)

21/3
Corporate solution-related revenues(Unit: Million yen)

1,960

23/3
(B)

2,044

Difference
(B-A)

2,730

686

1,068

1,119

1,675

556

Private placement bond fees

252

236

186

△50

M&A fees

272

174

234

60

Syndicated loans and commitment
fees

Business matching fees
Consultation fees

367

513

496

△17

–

–

138

138

33
Corporate-related
111
29

20
61

21/3
22/3
Consultation fees
Business matching fees
M&A fees
Private placement bond fees
Syndicated loans and commitment fees
2,044
1,960
367

513

272
252

174
236

1,068

1,119

21/3

22/3

(0.1 billion yen)
28

Other
126
28
27
71
23/3
(Million yen)
2,730
138
496
234
186

1,675

23/3

10

Securities Investment

Juroku Bank nonconsolidated results Valuation gains and losses of securities reached 40.3 billion yen overall.
 Cross-shareholdings dropped by 3 billion yen from the preceding term to 44.8 billion yen as a result of continuous reduction efforts.

■ Valuation gains and losses of securities
21/3

22/3 (A)(Unit: 0.1 billion yen)

StocksDifference

23/3 (B)

(B-A)

869

857

782

△3
△ 27

△72
△ 95

△ 168

22/3

23/3

857

782

△75

Bonds

△3

△72

△168

△96

Other

△27

△95

△211

△116

Foreign bonds

△28

△64

△103

△39

Investment trusts

０

△31

△107

△76

837

689

403

△286

21/3

(Unit: Year)

6.57

JPY bonds

21/3

22/3 (A)(0.1 billion yen)

689

869

■ Bond duration

Other

837

Stocks

Total

Bonds

403

△ 211

Foreign currency bonds
6.67
6.11

(Year)

Difference

23/3 (B)

(B-A)

5.84
JPY bonds

6.57

6.67

6.11

△0.56

Foreign currency bonds

5.84

4.84

2.57

△2.27

2.57

4.84

21/3

22/3

23/3

*The numbers reflect derivatives. The JPY bonds include held-to-maturity and other purposes.

■ Cross-shareholdings
19/3
Cross-shareholdings(Book value)

542

Cross-shareholdings (Book value)(0.1 billion yen)

(Unit: 0.1 billion yen)
20/3

527

21/3

503

22/3
(A)
478

23/3
(B)
448

Difference
(B-A)

883

△30

09/3

・・・

542

527

503

478

448

19/3

20/3

21/3

22/3

23/3

11

Juroku Bank nonconsolidated results

Credit Costs and Outstanding Non-Performing Loans

Credit costs decreased by 1.1 billion yen from the preceding term to 1.4 billion yen, as a result of bankruptcies and other factors remaining at low levels.
The ratio of non-performing loans improved by 0.13 percentage points from the preceding term to 1.35%.

■ Credit costs(Unit: 0.1 billion yen)
21/3

22/3 (A)Disposal of non-performing loans
Net transfer to general allowance for loan losses

Difference(B-A)

23/3 (B)① Net transfer to general allowance forloan losses

8

9

△6

△15

② Disposal of non-performing loans

33

15

21

6

3０

1４

19

5

③ Reversal of allowance for loan
losses----④ Recoveries of written-off claims

0

-

-

-

Credit costs ①+②-③-④

41

25

14

△11

41
(0.1 billion yen)
25

Transfer to individual allowance forloan losses

33
15

21
8

■ Outstanding non-performing loans
21/3

21/3

Difference(B-A)

23/3 (B)

120

1000

Bankrupt and substantially bankrupt
claims

121

Doubtful claims

54４

552

510

△42

Substandard claims

2７

22

21

△1

69２

687

652

△35 200

1.51

1.48

1.35

Ratio against total claims outstanding

112

22/3

1.51

1.48

692
27

687
22

652
21

544

552

510

121

112

120

21/3

22/3

23/3

8

800

△0.13

23/3

Bankrupt and substantially bankrupt claims
Doubtful claims(0.1 billion yen, %)Substandard claims
Ratio against total claims outstanding(Unit: 0.1 billion yen, %)22/3 (A)9△6*The March 2022 term saw a 1.36 billion yen increase in the net transfer to general allowance for loan losses,
resulting from a change in the standards for calculating the allowance for loan losses.

Total

14

600
400

0

1.35

1.50
1.20

0.90

0.60

0.30

0.00

-0.30

12

Non-Interest Income Ratio and Profit from
Customer Services

Juroku FG
consolidated results

Juroku Bank nonconsolidated results

 The consolidated non-interest profit ratio rose by 0.91 percentage points from the preceding term to 31.44%, exceeding the 30% numericaltarget set in the 1st Management Plan.
 The profit from customer services significantly grew by 3.9 billion yen from the preceding term to 15.3 billion yen.

■ Non-interest profit ratio*
22/3
(A)

21/3

Juroku FG
consolidated
results

Juroku Bank
non-consolidated
results

23/3(B)

Difference(B-A)

Non-interest profit

207

238

234

△4

Non-interest profit
ratio

29.10

30.53

31.44

0.91

Non-interest profit

114

138

138

400

300

18.38

20.29

21.07

0.78

Juroku Bank non-consolidated results
Income from customer services
Average loan balance × Depositloan interest rate difference
Deposit-loan interest rate
difference
Fees and Commissions
Operating expenses(Unit: 0.1 billion yen, %)
22/3
(A)

21/3

23/3
(B)

30.53

31.44

18.38

20.29

21.07

238

207

234

138

114

114

153

39

384

381

379

△2

0.864

0.844

0.825

△0.019

９８

111

126

15

４００

378

353

△25

30

10

0

138

-10

0

-20
21/3

22/3

23/3

Profit from customer services = Average loan balance x Deposit-loan interest
rate difference + Fees & commissions – Operating expenses(0.1 billion yen)

Difference
(B-A)

82

40

20

０

*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, %)

29.10

200
100

Non-interest profit
ratio

Non-interest income (The Juroku Bank non-consolidated)
Non-interest income (Juroku FG consolidated)
Non-interest income ratio (The Juroku Bank non-consolidated)
Non-interest income ratio (Juroku FG consolidated)(Unit: 0.1 billion yen, %)

+39

153
114
72

82

20/3

21/3

36
19/3

22/3

23/3

13

Juroku FG
consolidated results

Capital Adequacy Ratio and Shareholder Returns

Juroku Bank nonconsolidated results

 The consolidated capital adequacy ratio marked 10.54%, while the non-consolidated capital adequacy ratio stood at 9.35%.
 The total payout ratio reached 31.6% with the dividends per share set at 130, up 10 yen from the preceding term.

■ Consolidated capital adequacy ratio(Unit: %)21/3

22/3 (A)23/3 (B)

Difference (BA)

Juroku FG
consolidated results

9.93

10.52

10.54

0.02

Juroku Bank nonconsolidated results

9.35

9.34

9.35

0.01

Consolidated capital adequacy ratio (Juroku FG consolidated results)
Consolidated capital adequacy ratio2

21/3

22/3

10.52

10.54

9.35

9.34

9.35

21/3

22/3

23/3

Total dividends

23/3(Million yen, %)Acquisition of treasury stock

Dividends per share

Total dividends
Acquisition of treasury
stock
Total payout ratio

80 yen90 yen120 yen

130 yen2,989 million
yen3,363 million
yen4,453 million
yen4,783 million 6,000
yen

-

-

1,111 million
yen

1,111 million 4,000
yen

23.2%

22.8%

32.3%

31.6%

(Juroku Bank non-consolidated results)

9.93■ Shareholder returns
20/3

(%)

32.3

Total payout ratio

2,000*Issued by the Juroku Bank before the interim dividends of the March 2022 term

◆Juroku Financial Group’s shareholder returns policy
The Juroku Financial Group’s basic policy is to pay stable dividends continuously while
striving to further enhance the Group’s fiscal robustness. Comprehensively consideringsuch factors as business management conditions and income levels, the Group will
determine details of returns aiming to achieve a total payout ratio of 25% or more.

31.6

30.0
23.2

22.8

1,111

1,111
20.0

2,989

3,363

20/3

21/3

4,453

4,783

22/3

23/3

0

10.0

0.0

14

Juroku FG
consolidated results

Business Projection and Dividend Forecast

Juroku Bank nonconsolidated results

The net income attributable to owners of the parent company for the March 2024 term is expected to reach 17 billion yen, down 1.6 billion yen from thepreceding term. This is because a decrease in stock-related profit/loss and an increase in credit costs are expected.
Shareholders are expected to receive 130 yen as to annual dividends, consisting of 60 yen as interim dividends and 70 yen as year-end dividends.

■ Business projection(0.1 billion(億円）
yen)(Unit: 0.1 billion(億円）
yen)
2023/32024/3(Results)（実 績）(Projected)（予 想）Compared
with前期比
preceding
term

745

710

△ 35

Core
net operating profit
コア業務純益Net
interest income
資金利益

511

500

△ 11

Net
operating profit results
実質業務純益Fees
and commissions
役務取引等利益

187

184

△3

47

26

△ 21

Expenses
経費

439

440

1

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

306

270

△ 36

経常利益 profit
Ordinary

272

245

△ 27

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

186

170

△ 16

22/3

23/3

十六FG連結Juroku FG
consolidated results
Consolidated
core gross operating profit
連結コア業務粗利益

Other operating profit (excluding profit on JBGs and otherdebt securities)

その他業務利益(除く国債等債券損益)

2023/32024/3(Results)（実 績）(Projected)（予 想）Compared
with前期比
preceding
term

285

240

△ 45

208

225

17

与信関係費用Credit
costs

14

29

15

Ordinary
経常利益 profit

255

220

△ 35

Net
income
当期純利益

179

155

△ 24

Juroku Bank
non-consolidated results
十六銀行単体■ Dividend forecast
19/3

20/3

21/3

Interim dividends

24/3(Projected)

120
Annualdividend

70 yen80 yen90 yen120 yen

130 yen

130 yen70
InterimYearend

35 yen35 yen35 yen45 yen35 yen55 yen50 yen70 yen60 yen70 yen*Issued by the Juroku Bank before the interim dividends of the March 2022 term

60 yen70 yenCommemorative
dividend
20 yen90 Commemorative

80
Specialdividend
10 yendividend
10 yen

35

45

35

35

35

19/3

20/3

21/3

(Yen)

Year-end dividends

70

130

130

70

70
Commemorative
dividend
10 yen

55
50

60

22/3

23/3

60
24/3
(projected)

15

Section I: Financial Results for FY2022

Section II: Initiatives for Sustainability

Section III: Review of the 1st Management Plan

Section IV: Development of the Long-Term Vision andthe 2nd Medium-Term Management PlanValue-Creation Process
 Delivering value to all stakeholders through corporate activities and aiming to achieve sustainability.

Capitals to be used

Corporate activities
Customers

Our mission
HumancapitalAchieving growth and prosperity for ourcustomers and the local community

Long-Term Vision
Staying Ahead of the Curve to Always Serve the Region

Intellectual
capitalNaturalcapitalExternal
environment

 Development of local
economy Regional revitalization
Local
through collaboration with
communities
local governments
 Advanced financial
infrastructures
 Personal growth
Ｏｆｆｉｃｅｒｓand Healthy work-life balance
Employees  Promotion of diversity

SocialcapitalFiscalcapital Issues and optimum
solutions Advanced convenience Enrichment

PurposeSustainable

GrowthCorporate governanceRisk management Compliance Improvement of corporate
value
Shareholders  Disclosure of information
Investors
including non-fiscal
information
 Promotion of engagement
 Response to climatechangeEnvironment  Zero-carbon society
 Environmental
conservation

Presented value

Achievementofsustainability
KPIs

Contributiontoachieving
SDGs

Steadyprofit growth,strongfinancial baseContraction of market scale Conversion of business mode Social changes

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
 To reinforce initiatives for sustainability, the Group has set (Materiality) Sustainability KPIs in its 5 key challenges, All items are progressing
smoothly.

■ 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(※)

２３４.８ billion yen（85.9 billion yen）

11.7％
（10.7％）

３６３.９ billion yen

66.1%

(※)

Social impact investments

2 billion yen

270 million yen

13.7%

DX-support consultation cases

3,000 cases

126 cases

4.2%

CO2 emissions (vs. FY2013 level)

50% reduction

43.6％ reduction

87.2%

Paper use (vs. FY2019 level)

50% reduction

17.3％ reduction

34.6%

Ratio of female managers

２０％

7.7％

38.8%

Ratio of paid leave claimed

８０％

54.0％

67.6%

(※)

(※) Cumulative total from April 2022

■ On-going targets
AdvancedgovernanceMarch 2023 results (progress rate)

Initial response training for emergency
preparedness

Dialog with investors

No less than
twice a year

6 times300.0%

No less than
10 times a year

15 times

150.0%
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
・ 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 ～Revitalization of the local economy～
 Sustainable finances totaled 234.8 billion yen as of the year-end of FY2022, achieving 11.7% of the FY2030 target.
 The balance of Group assets in custody as of the year-end of FY2022 reached 363.9 billion yen, achieving 66.1% of the FY2030 target.

Sustainable finances provided

KPI

 Sustainable finances totaled 234.8 billion yen (including 85.9 billion yen ofenvironment-related finances) as of the year-end of FY2022, achieving
11.7% (environment-related: 10.7%) of the FY2030 target.
 The FY2022 results of “Positive Impact Finance (PIF),” the offerings ofwhich started in March 2022, stood at 41 cases/4.8 billion yen.
 Efforts will be made to aim for further growth by enhancing the productlineup (e.g., the Juroku Bank adding a “private placement bond course” toSDGs Challenge Assist, which supports customers in SDGs management,
and starting to offer “earthquake damage risk management loans,” whichallows for releasing debtors from their responsibility as to debt principal
payments in the event of a large-scale earthquake).

Balance of Group assets in custody

KPI The balance of Group assets in custody reached 363.9 billion yen at the yearend of FY2022, achieving 66.1% of the FY2030 target.
 The Juroku Bank accounted for 166.3 billion yen (approximately 45%) and
Juroku TT Securities 197.6 billion yen (approximately 55%).
 For stable asset formation, the Juroku Bank has focused efforts on expanding
regular investment trusts optimized for long-term, regular, and diversified
investments.
(0.1 billion yen)
Juroku Bank

Juroku TT Securities

5,500(0.1 billion yen)
Sustainable finances provided(Environment-related finances)

20,000[Progress rate]
VS. FY2030 target: 11.7%(Environment-related: 10.7%)

916
(322)
1H2022
FY2022
年度
上期[Definition]

2,348(8,000)(859)
2022
FY2022
year-end
年度・・・・・・

2030
FY2030[Target]年度【目標】

Sustainable finances: Investment and lending, etc., for SDGs and ESG initiatives that contribute torealizing a sustainable society
Environmental field: Investment and lending for environmental impact-reducing initiatives

3,445

3,639

1,559

1,663

1,886

1,976

1HFY2022
FY2022First half

FY2022
FY2022
year-end[Progress rate]
VS. FY2030 target: 66.1%

・・・・・・

FY2030
FY2030[Target][Target][Definition]
The Juroku Bank: Investment trust; Juroku TT Securities: Equities, stocks, investment trusts, fund wraps,
etc.

21

Materiality ～Revitalization of the local economy～For local companies to smoothly have their management succeeded, the Group signed a “Basic Agreement Concerning Consideration of Joint Venture Business”
with Nihon M&A Center Holdings Inc.
The Group is focused on expanding regular investment trusts to stably form customer assets. The amount of monthly contribution and the number of contracts
continued to show solid increase.

Asset formation support

Management succession consultation
 Well experienced andspecialized staff members
provide the best solutions tosolve issues on various
management succession
needs by engaging in dialogue
with corporate managers.
 Needs are raised throughvarious seminars andindividual company
consultations.

[The Juroku Bank] Expansion of regular investment trusts for customers’
stable asset formation
 For customers to stably build up assets, the Juroku Bank has focused
efforts on expanding regular investment trusts optimized to long-term,
regular, and diversified investments. The amount of monthly contribution
and the number of contracts as to regular investment trusts continued toshow solid increase.

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

73
62
23
39
FY2020

59
8

15

51

58

FY2021

FY2022Monthly contribution

Signing of “Basic Agreement Concerning Consideration of
Joint Venture Business” with Nihon M&A Center Holdings
 The lack of successors and other factors is causing the number of companies
to drop in Gifu and Aichi prefectures, where the Group’s business is based.
Management succession is accordingly a social issue that must be solved torealize growth and prosperity in this region.
 Amid this situation, the Juroku Bank
established the “Management
Succession Support Office” inMarch 2019. To smoothly succeed
the management of as many local
companies as possible,
considerations have recently
started on launching a joint venturewith Nihon M&A Center Holdings
Inc., which has had over 7,000
successful M&A brokerage casesthat involved small- and mediumsized companies.
▲Signed “Basic Agreement Concerning Considerationof Joint Venture Business” on April 6, 2023.

900
800
700
600
500
400
300
200
100

(Million yen/Users)

Number of subscribers

22,12923,861

25,48025,00019,503
14,59016,75720,00012,377

233

352

20/3

20/9

482

649

1,055

934

816

15,00010,000
5,000

21/3

21/9

22/3

22/9

23/3

Local VC/CVC investment[NOBUNAGA Capital Village]
State of investment
 Investment company “NOBUNAGA
Capital Village” is actively rolling out
local VC/CVC investments.

Local VC CVC
8(Cases)

10
3

5
7
3
FY2021

FY202222

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 local community～“OCOS,” a local crowdfunding program that launched in September 2022, has seen a steady increase in both its projects and membership.
Juroku Densan Digital Service, which started operating in March 2022, saw an increase in its number of orders into the second half of FY2022.

Social impact investments

KPI

 In addition to purchases through “OCOS,” a local crowdfunding programthat launched in September 2022, achievements include investments madeby subsidies for the tourism
Target to achieve by
DMO support operation
2 billion yen
FY2030and donations based on
the business for0.27 billion yen
supporting the hometown
FY2022 results(Progress rate: 13.7%)
tax payment service.

[Kanda Machiokoshi] Local crowdfunding “OCOS”
 In September 2022, community
developer Kanda Machiokoshi
started its local crowdfunding
program “OCOS,” the firstinitiative of its kind as a financial
institution in the Tokai region.
 In addition to purchase- anddonation-type crowdfunding, thefirm started offering investmenttype crowdfunding in December
2022.

Cumulative total (as of late Mar. 2023)
No. of posts started

16 casesNo. of purchased
applications

1,357 cases

Amount of purchased
applications
Membership

20,564 thousand yen

KPI[Juroku Densan Digital Service] DX-support consultation
 Juroku Densan Digital Service, which started operating in March 2022,
provides IT consulting services that closely support customers, particularly
those introduced by Group companies, and in turn proposes optimal
solutions.
 In FY2022, Juroku Densan Digital Service received 48 orders in the firsthalf and 78 in the second half.
 The content of the successful orders vary widely. Juroku Densan Digital
Service will continue the approach of its activities--providing optimal
solutions for customers’ consultations--and also disseminate information
through hosting DX seminars.
3,000(Orders)[Progress rate]
VS. FY2030 target: 4.2%

1,182 people[Kanda Machiokoshi] Launch of “CoLoRs,” a corporate version of thehometown tax payment service
 Kanda Machiokoshi started “CoLoRs” in February
2023, a matching service for the corporate versionof hometown tax payments.
 Eligible municipalities are being gradually
expanded by touting the service as a donation
program that supports the sustainable
development and issue-solving of both companies
and local regions alike, by using said payments
and building relationships between the companies
and regions.

DX-support consultation cases

126
48
FY2022First half

FY2022Full-year

・・・・・・

FY2030[Target]24

Materiality ～Sustainable development of the local community～ For the development of sustainable tourism, the Group became involved in supporting 5 local communities by, among other means,contracting public services and providing consulting services for governmental subsidies.
 Juroku Card is actively working to support the region transition to cashless transactions.

Sustainable tourism development

KPI[Kanda Machiokoshi] Tourism marketing DMO support
 Provision of solutions considered necessary in advancing the sustainabilityof Gifu’s tourist destinations and commerce districts
 Involvement in supporting 5 local communities (e.g., contracting public
services, providing consultation services for governmental subsidies)
Gifu City Nagaragawa hot springs and Gifu’s castle town: JTA’s
subsidy on united local community initiatives
Developing a local plan (partnering with ORGAN, a
non-profit) Gifu City: Supporting renovation project of old privatehouses Gifu City: Serving as a member of a working group on
strategies for Japan’s heritage

Transitioning to cashless transactions
 Streamlining expenses-related tasks and informing customers of responses
to the Law Concerning Preservation of National Tax Records in Electronic
Form to suggest legal entity/corporate cards
Subscriptions of corporate cards, etc.
No. of corporate credit card subscriptions
No. of merchant agreements
1,382
1,233
53
56
589
526

(Cases/Users)

1,708
83
828

651

740

797

FY2020

FY2021

FY2022

Okuhida Joined Chubusangaku National Park Partnership
Shirakawa Village
 Japan Tourism Agency’s (JTA) project todemonstrate sustainable tourism
Study on earning structure for the region(Collaboration with Juroku Research Institute)
Takayama City
 Commissioning of study on introduction of local
discretionary tax (accommodation tax)
(Collaboration with Juroku Research Institute) Appointment as economic policy advisor
Nakatsugawa City
 Contracting of work as CFO of Nakatsugawa Tourism
Bureau JTA’s project on sustainable tourist destination model-> Demonstration experiment for charging parking lot use
in Naegi Castle[Juroku Card] Introduction of cashless payment in Gifu Prefecture’s highschool baseball tournament Juroku Card has signed a merchant agreement involving credit cards andother services with the Gifu High School Baseball Federation. This has
become the first endeavor in the Tokai region to introduce cashless
payments for high school baseball tournament admission fees.
 This endeavor is not only intended to provide spectators with enhanced
convenience at admission and lower the administrative burden by reducing
the amount of cash used, but also to educate high schoolers on financial
literacy by having them operate payment devices and experience credit
card and other cashless transactions.

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)

５０％
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

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～ CO2 emissions generated from energy use (scope 1 and 2) stood at 43.6% versus the goal to halve them by FY2030 from FY2013 levels.
 Paper use saw a reduction by 17.3% versus the goal to halve it by FY2030 from FY2019 levels.

CO2 emissions (vs. FY2013)

KPI

 CO2 emissions in FY2022 (scope 1 and 2) was
reduced by 43.6% versus the FY2013 base year.
This was a result of installing LED lighting in storesand other locations, replacing air conditioning (AC)equipment in a phased manner, and introducing“Gifu Prefecture-generated CO2-free electricity” at
the Juroku Bank head office building in November
2021.
 Efforts will be maintained to install LED lighting atstores and replace AC equipment, as well as
educate all employees on electricity conservation.

Caring for the Earth andilluminating the future

Paper use (vs. FY2019)

 Paper use was reduced by 17.3% in FY2022 versus the FY2019 base year.
This was a result of changing the layout of the head office building,introducing monitors and abolishing trash cans, and reducing storage
space/copy machines/printers.
-50%
50,48013,110FY2013・・・

FY2021

Achievingcarbonneutrality

FY2022

6,555

・・・

45,73041,726FY2020

FY2021

FY2022・・・

FY2030[Target]Conversion of company vehicles to hybrid vehicles(HVs) and electric vehicles (EVs)

-50%

7,389

48,96625,240FY2019

7,879(Thousandsheets)-17.3%(t-CO2)-43.6%KPI

FY2030 FY2050[Target] [Target] Gradual transitions have been made over to clean-energy vehicles (e.g.,
replacing the approximately 1,000 vehicles owned across the group with
HVs and EVs).

[Juroku Lease] Introduction of EVs and charging facilities Juroku Lease introduced 2 EVs and 4 recharging facilities (thataccommodates max. 8 vehicles) as company vehicles in March 2023.
 The replacement with conventional vehicles reduced annual CO2 emissions
by approximately 3.8 tons.
 Taking the introduction of the facilities as anopportunity, Juroku Lease will not only reduce its own
CO2 emissions but also support customers’
decarbonization efforts by arranging a systemthrough which customers can be offered a one-stop
package of EVs and charging facilities.

28

Materiality ～Environmental conservation and climate change actions～ There has been a significant increase in the number of “Carbon Neutral Navigator” consultant services offered to support local companies intheir carbon management.
 A “B” rating was provided by CDP. This was the highest assessment offered to a financial institution headquartered in the Tokai region.

Participation in the “financial institution portfolio carbon analysis
pilot program assistance operation” sponsored by MOEJ

Decarbonization support for local companies
 The Juroku Bank has started to collaborate with WasteBox Co., Ltd., andprovides extensive solutions by working with external business partners.
[Juroku Bank] Carbon Neutral Navigator (Aug. 2021)
Decarbonization Management Transition Plan Review (Feb. 2023)
 From August 2021, the Juroku Bank started offering “Carbon Neutral
Navigator Supported by WasteBox,” which is a consulting service for suchmatters as the visualization, reduction target, and other matters related tocustomers’ greenhouse gas emissions, and has thereby been supporting thecarbon management of customers.
Offering

FY2021

FY2022

Carbon Neutral Navigator

47 cases

91 cases

SBT certification support

2 cases

43 cases The Group has been selected for the MOEJ-sponsored “financial institution
portfolio carbon analysis pilot program assistance operation.” By participating in this operation, the Group will accumulate portfolio andcarbon analysis know-how for identifying and calculating customers’
greenhouse gas emissions, and utilize the obtained insight and analysis
results in supporting the decarbonization efforts of customers from here on.

Support for environmental initiatives
 Support for TCFD recommendations was declared by the Juroku Bank in
June 2021 and by the Juroku Financial Group in March 2022.
 The CDP’s climate change questionnaire for 2022 provided the Group a “B”
rating, the third best evaluation out of 8 levels.
 In March 2023, the Group joined PCAF.

 In February 2023, the Carbon
Neutral Navigator service wasscaled up and offerings started for“Decarbonization Management
Transition Plan Reviews,” which
support the development of saidplans.
 Efforts will be made to contribute torealizing a decarbonized society inthe region by supporting thedevelopment/execution of specifictransition plans for clients todecarbonize their operations.

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 ratio of female managers at the year-end of FY2022 rose 1.0 percentage point from the preceding term, reaching 7.7%. A female executive officer will be
appointed from among full-time employees as well, a first-ever achievement in both the Group and the Bank.
The rate of paid leave claimed in FY2022 reached 54.0%, up 6.3% from the preceding term. This was a result of such efforts as promoting the utilization of paid
leaves from a work-life balance perspective.

Ratio of female managers

KPI

Ratio of paid leave claimed

KPI

To build a corporate culture that has strength in its diversity, the Group appointed 6 women to
managerial positions during FY2022, in turn boosting the ratio of female managers to 7.7%.



As part of a work style reform initiative to achieve a good work-life balance, the Groupaims to reach an 80% rate of paid leave claimed.

To further appoint female managers, the Group also enhanced the rate of women serving
senior positions. The Group has focused efforts on enhancing a support structure by, forinstance, drawing up a plan to train and empower female personnel and starting to provide
training.



Said rate was 54.0% in FY2022, up 6.3% from the preceding term. This was a resultof efforts such as promoting the utilization of paid leaves.

Ratio of female managers
Ratio of women serving senior and higher positions
14.5
13.7
13.2
12.8

6.7

5.5

4.2

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

(%)
20.0
80
60

7.7

20
48.2

40
4.74
20

FY2019FY2020

FY2021

FY2022

FY2030[Target]・・・・・・The Group recommends all employees to take the IT Passport Examination to acquire basic IT
knowledge, and successful examinees to obtain advanced digital-related qualifications.

Number of successful
examinees (Total)

Cumulative total

During FY2022

IT Passport Exam

726

611

Advanced digital-related
qualifications

94

27

54.4

4.16

47.7

4.54

80.0

54.0

15
10

5.71

5

4.76

6.44

4.76

5.32

FY2019FY2020

FY2021

FY20220Development of IT / DX human resources(Day/%)

0・・・・・・

FY2030[Target]Promotion of utilization of parenting leave for menApril 2017 saw the introduction of a “spouse parental leave system” to encourage
male employees to participate in childcare. The utilization rate of this system since its
introduction has remained at 90% or above.



HR systems underwent a partial change in response to the enforcement of theamended Act on Childcare Leave, Caregiver Leave, and Other Measures for the
Welfare of Workers Caring for Children or Other Family Members on October 1, 2022

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 ～Advanced governance～ As on-going targets, FY2022 saw 6 sessions of “initial response training for emergency preparedness” (progress rate: 300%) and 15 “dialog
sessions with investors” (progress rate: 150%).

Initial response training for emergency
preparedness

 FY2022 saw 6 initial response training sessions versus the ongoing target to
implement at least 2 sessions a year.


BCP training simulating wind and flood damage BCP training simulating earthquakeInitial response training for ATM malfunction

Initial response training for emergency
preparedness
Cyberattack exercise
In-BCP activation critical operation response
training

FY2022 results

At least 10 times a year
15 sessions(Progress rate: 150%)

members

 Selection processes are underway for an assessment organization in
response to propositions from several outside organizations
 The Group will continue preparing to conduct an assessment in or after the
next fiscal year.

Directors who are Audit andSupervisory Committee

Third-party involvement in assessing theeffectiveness of the Board

Yukio Murase

Representative Director andChairman

●

●

●

●

●

●

Naoki Ikeda

Representative Director andPresident

●

●

●

●

●

AkihideIshiguro

Director and Deputy
President●●●

Yukiyasu
ShirakiDirector●●

Yoshiaki Bito

Director●●

Hiroyuki Ota

Director●●

Satoko Ito

Outside Director

Yasushi Ueda

－ (Outside member)●●

NaohikoIshikawa

Director●●

Shinji Ishihara

Outside Director

Satoe Tsuge

Outside Director

ESG /Sustainability

On-going targets

Vitalization of
local regions

 FY2022 saw 15 dialog sessions versus the ongoing target to implement atleast 10 sessions a year.
 The Group will continue to reinforce initiatives aimed at achieving proactive
dialog and enhancing dialog content.

HR

KPI

Directors who are not Audit & Supervisory Board
members

Dialog sessions with investors

Name

Legal affairs /Riskmanagement

6 sessions(Progress rate: 300%)

Main skills, experience, etc. of the Director
Current position, etc. at
the Group

Financialaffairs /Accounting

FY2022 results[Reference] Skills matrix of the Group’s Directors

Finance

At least twice a year

 Implementation of third-party-involved assessment to enhance the internal
auditing system Development of FY2023 internal auditing plan

Businessmanagement

On-going targets

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

KPI

●

●

●

●

●

●

●
●

●

●

●

●

●

(*) This is a list of areas where the internal Directors have experience in and where the Group has particular expectations for outside Directors in the event that
proposals 1 and 2 from the Group’s 2nd annual meeting of shareholders, hosted on June 16, 2023, are approved as presented.
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: Financial Results for FY2022

Section II: Initiatives for Sustainability

Section III: Review of the 1st Management Plan

Section IV: Development of the Long-Term Vision andthe 2nd Medium-Term Management Plan

Overview of the 1st Management Plan We have worked on three management strategies with the aim of becoming a comprehensive financial group that creates the
future of the community together and achieves sustainable growth together.

First Management Plan
Period: October 2021–March 2023

Numerical targets for FY2022
Consolidated net income:Consolidated capital
adequacy ratio:
Consolidated adjusted
OHR:
Consolidated noninterest income ratio:

16 billion yen and above

Maximizing
groupsynergy
Utilizingcustomerbase,
information
andnetwork

Reforming thementality andbehaviors of
employees anddirectors

Our vision

10% and above

To become a comprehensive
65% and above
30% and above

Connecting people,
local communities and futurefinancial group that creates the
future of the community
together and achieves

Long-term indicator
Consolidated ROE

5% and above

Regional
commitment
strategy

DX strategy
Improving
convenience andproductivity
Customer-firstmarketingstrategysustainable growth together

Handling
comprehensive
local design

Further exerting
problem-solving
capacity

October 2021–March 2022

April 2022–March 2023

April 2023–

Period to put the Groupstructure on track

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

37

Summary of the 1st Management Plan:
Full Introduction of Comprehensive Financial Service Functions
 The Group created new businesses to change itself around the time it transitioned over to a holding company system.

F i n a n c i a l i n t e r m e d ia r y
f u n c t io nManaging funds

Supporting digitaltransformation

Juroku TT
Securities

S u p p or t in g c a p i t a l
i n v e s t m e n ts

Juroku Bank

JurokuDensanDigitalService

LaunchJurokuLease

Juroku Cardof new companies

Apr. 1, 2021

NOBUNAGA Capital
VillageMar. 1, 2022

Juroku Densan Digital
ServiceApr. 1, 2022

Kanda Machiokoshi

Juroku Credit
Guarantee

Juroku Business
Service
Kanda

Forming assets

Catering to cashlesssociety

Machiokoshi

Vitalizing the region

Juroku ResearchInstitute
Referring human resources anda s s i s t in g m a n a g e m e n t

NOBUNAGA
Capital Village

I m p r o v i n g p r o d u c ti v i ty

S u p p or t in g c a p i t a l

38Summary of the 1st Management Plan:
Numerical Targets Versus Results
 Under an enhanced management system, the Group rolled out its customer -first marketing strategy, DX strategy, and local
commitment strategy, and achieved all numerical targets.
Numerical target

Consolidated net income(0.1 billion yen)

Numerical
targetSecuring stable income

Consolidated capital
adequacy ratio (%)

Maintaining high fiscal integrity

Numerical target:
16 billion yen or above

128

106

99

Consolidated adjusted OHR Maintaining highefficiency(%)

Numerical
target

9.15

9.08

18/3

19/3

Consolidated non-interest profit Diversifying income
sourcesratio (%)

20/3

21/3

Long-term

Consolidated ROE(%)

indicator:

Numerical target:
30% or above

19/3

20/3

29.10

4.73

4.36
3.98

26.53

66.51

Numerical target:
65% or less

18/3

Improving level year
after year

Long-term indicator:
5% or above

30.53

68.69

23/3

9.27

31.44

82.49
75.19

22/3

186

171

18/3
19/3
20/3
21/3
22/3
23/3
2018/3
2019/32020/32021/32022/32023/3

Numerical
target

10.54

9.93

Numerical target:
10% or above

147

10.52

58.87 58.90

21/3

22/3

23/3

24.50

18/3

3.65

2.94

24.04

19/3

20/3

21/3

22/3

23/3

18/3

3.05

19/3

20/3

21/3

22/3

23/3

39

Customer-First Marketing Strategy
 Under a customer-first marketing approach, the Group aimed to create shared value with customers and the region by mustering
the Group’s management resources to fulfil consulting functions and provide diverse solutions to solve challenges.

Business matching

Fulfilling consulting functions
by mustering the Group’s
management resources

Customer-First Marketing Strategy:
Further demonstrating challenge-solving
capacity

Providing diverse solutions tosolve challenges

 Successful cases showed a solid increase
through repeated dialogue with customers
and the provision of appropriate solutions
for needs and challenges
350
300

 To meet the diversifying needs forinheritance and asset succession
amid Japan becoming a superaging society, the Juroku Bankobtained a license to operate as auniversal banking entity on
September 27, 2022, andaccordingly started to offer trust
services.
 The Bank started offering “Juroku
Ohitorisama Trust <Mirai
Yoroshintaku>,” the first-everproduct in Japan to cover affairs
subsequent to a customer’s deathand money trust concerning
relevant costs in a single package.

 Sales increased steadily as a result of astronger collaboration between the Juroku
Bank and Juroku Lease
3,500

Net sales
265

2,502 2,500
2,000

258

1,758

1,500

112

1,000

100
50

500

385

0

0
21/3

22/3

240

23/3

21/3

 Long-term proposals that align withcustomers’ life plans have been made while
increasing FA staffing
Assets in custody
FA staffing

450
400

3,489
3,341

350
3,039

351

3,445

160
120

3,000
80
40

200
21/9

147

22/3

22/9

23/3

103

56
16
21/3

67
26

13

2,500 0
21/3

203

120

304

268

250

(Cases)No. of referrals(accumulative)

240

200
384
3,500
160

381

23/3

 The number of consultation cases rose as a wayof smooth asset succession and property
management for older-age periods(0.1 billion yen, persons)4,000
3,639

22/3

Referral of private trust experts

FA staffing and balance of assets in custody300(0.1 billion yen)
269

3,000

276

218

250

150

(Million yen, cases)

Closing fee
Successful cases

200

The Juroku Bank’s foray into trust service

Lease sales

21/9

22/3

22/9

[Definition] The Juroku Bank: Investment trusts + Juroku TT Securities: Equities, stocks, investment trusts, fund wraps, etc.

23/3

40

DX strategy


The Group approached customers by utilizing digital technology and data through internal and external alliances, and propelled the digitaltransformation of work to make time for activities, thereby achieving the Group Directors’ and employees’ high value-added activities.

Work volume reduction

J Direct / Biz-J Direct

 Non-face-to-face channels were enhanced,
which led to growth in J Direct (personalcustomers) and Biz-J Direct (businesscustomers).

Utilizing digital technology and data
to approach customers

DX strategy:
Enhancement of
comfort/productivity

Making more time for activities andenhancing value by propelling thedigital transformation of work

J Direct (Thousand users)
Biz-J Direct (Users)
300

234

245

271

258

282

 Efforts were made to promote theelimination of back-office administration at
the Juroku Bank’s sales offices. Achieved thetarget of reducing office job hours by 1.5
million hours in the March 2023 term versus
the March 2017 term.
Loan work reduction
Deposit work reduction
Reduction target: 1.5 million hours
22,00086.3
20,000200

Juroku Densan Digital Service’s business launch On March 1, 2022, “Juroku
Densan Digital Service”
launched its business as a
joint venture between theGroup and Densan System
Holdings Co., Ltd.
 To launch the joint venture,
the Group became the first
entity to be licensed as a nonbank banking-service
enhancement company
following the November 2021
enforcement of theamendment of the Banking
Act.
 To meet the diverse DX needs in the region, Juroku Densan Digital
Service provides IT consulting services attuned to operators-particularly those introduced by Group companies--and thereby
proposes optimal solutions in addition to coordinating with various IT
vendors to expand the range of solutions.

100

18,14921/3

18,78518,931

21/9

22/3

19,491

19,73722/9

23/3

18,000

70.0
30.0
40.0

16,00020/3

31.5(Ten thousand hours)
154.6
128.7
37.1

37.6
117.0

91.6

54.8
21/3

22/3

23/3

Start of cooperation with SoftBank In May 2022, the Group decided to collaborate with SoftBank Corp. to promote DX endeavors, andaccordingly accepted human resources.
 The Group is working to support the DX efforts of customers and the region, enhance the comfort andconvenience of products and services, and both streamline the Group’s work operations and boost
productivity as priority measures. Amid these efforts, the Group aims to harness the collaboration with
Softbank to effectively utilize the technologies, assets, and know-how held by the 2 companies andthereby vitalize the region and contribute to local communities.

[Cross-industry
collaboration]
Acquisition of license as “DX-certified operator”
 As an operator that has developed a management vision, strategies,
and systems, and is ready to promote its digital transformation, theGroup acquired a license as a “DX-certified operator” in March 2023
under the DX certification system established by the Ministry of
Economy, Trade and Industry.

41

Local Commitment StrategyTo realize a sustainable society, all Group Directors and employees enhanced their SDGs and local vitalization efforts and played a central role
for the local vitalization of Gifu and Aichi prefectures--where the Group’s business is based--by expanding business domains.

Utilization of local resources/Support of local governments
Playing a central role in vitalizing theregion through business domain
expansions

Local Commitment Strategy:
Comprehensive local design

All Group Directors and employees
enhancing their SDGs and local
vitalization efforts

Launch of Kanda Machiokoshi

Juroku Research Institute: Publication of recommendations

 On April 1, 2022, the Group launched community developer “Kanda
Machiokoshi” to fulfill the Group’s responsibility as to sustainablelocal growth and to contribute local vitalization.
 Under its mission to “develop a locally sustaining economy,” Kanda
Machiokoshi started “OCOS” in September 2022, a local
crowdfunding program--the first endeavor of its kind by Tokai
region’s financial institution--thereby creating a new money flow inthe region.
DMO support

Social impact
investment
Hometown tax payment
supportRenovationand community
development

 The Juroku Bank started to collaborate with Stroly, a company
that supports the digitization of illustrated maps.
 By providing the Stroly digital map service, Juroku Bank has
supported municipalities and local businesses in their digitaltransformation and promoted tourism by boosting the appeal of
the region (e.g., promoting paperless transactions, digitizing
visitor data, enhancing user convenience).
 This initiative was commended as “FY2022’s ‘distinctive
endeavor’ contributing to vitalizing the region, undertaken by afinancial institution or other entities.”

Diverse working stylesupport The Juroku Research Institute regularly publishes recommendations for local
revitalization.
 Setting major gender gaps in rural Japan as a core issue for local vitalization, in April 2022
the Juroku Research Institute published “Regions Popular among Women”:
recommendations that present analysis results, good practices, and solutions.
 In April 2023, the Institute also published the recommendation “The Future of Local
Public Transportation,” setting the decline of public transportation in rural Japan as an
issue that could dampen the vitality of local communities.

Release of “Juroku MONEY COLLEGE”
 Japan has lowered its legal age of adulthood and the country’s highschools have started to offer asset-building classes, showing a growinginterest in financial education. Amid this trend, the Group has released“Juroku MONEY COLLEGE” in January 2023, which offers a systematic
education menu on financial literacy.
 This endeavor will utilize the knowledge of Group companies to a
maximum extent to systematically offer seminars on such matters asasset-building, entrepreneurship, cashless transactions, and loans for awide range of generations--from elementary schoolers to older citizens-and thereby contribute to enhancing the financial knowledge of theregion.

42

Section I: Financial Results for FY2022

Section II: Initiatives for Sustainability

Section III: Review of the 1st Management Plan

Section IV: Development of the Long-Term Vision andthe 2nd Medium-Term Management Plan

Overview of the Long-Term Vision<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)

44

Roadmap of the Long-Term VisionAmid making efforts to fully employ the “16 Group Energy,” the Group will work to demonstrate its comprehensive financial service functions and expand into
new business domains in addition to enhancing the Group’s core business, thereby realizing the society for which people are seeking.

Roadmap of the Long-Term Vision
Staying Ahead of the Curve to Always Servethe Region

Society sought after bypeopleEmploying the 16 Group Energy
Expansion of new business domains

Sustainable
society

Demonstration of comprehensive financial service
functions

JurokuFG

Our mission

A society thatcan realize
diverse types ofhappiness

ResilientsocietyEnhancement of core business(loans and deposits/exchange)

Achieving customer/local growth and prosperity

Long-Term Vision45

Values Considered Important in the Long-Term Vision In employing the “16 Group Energy,” the Group aims to contribute to its customers, Directors and employees, and shareholders.
 The Group cannot contribute to its shareholders without the process of serving customers, Directors, and employees. As a first step, theGroup will reconsider how it deals with customers and what an ideal Director/employee looks like.

How the Group should deal with customers
and Directors/employees(1)Our
Our“core“corecustomers”:
customers”:(1)People who live and undertake activities in the region(2) How to deal (interact) with customers:
Understand our customers well and identify with themPeople who actively take on challenges in the region for the growth of both theirbusiness and themselves
People who show leadership in the region
People who both rely on and seek to be relied upon by the Juroku Financial Group
People who can do business with the Juroku Financial Group repeatedly

The Group will value the following three points:(1) Giving attention: The Group will face many customers and become an organization
with which they seek to consult(2) Connecting: The Group will connect with many customers(3) Closely supporting: The Group will closely support customers and thereby thoroughly
learn about them(3) The shared hope and thought of us Group Directors and employees is:(4) An ideal Group Director/employee:

A feeling of “being rooted in the region”<Feelings that all Group Directors and employees had across the board
when they joined the company/bank>

Aspiration to liven up the region
Aspiration to give back to theregionLove for their hometown

A feeling of “being rooted in theregion”

Can perform at their full potential for the region
Each Group Director and employee thoroughly performs at their full potential andvoluntarily takes on challenges
Directors and employees act voluntarily for the region by embracing what they wish andhope for the region
Directors and employees demonstrate diversity and realize a productive life as a person
living in the region while experiencing their growth first-hand

46

Targets of the Long-Term Vision

The Group will sustainably grow and enhance corporate value as an enterprise while solving social issues.
The Group will aim to expand its income in growth areas. This will be achieved by expanding business domains and working on new businesses to fully utilize theGroup’s comprehensive financial service functions, while demonstrating the true value of the Group’s core businesses (e.g., loans and deposits/exchange) bypromoting efforts to both enhance added value and streamline operations.

Targets of the Long-Term Vision

Consolidated net income: 30 billion yen or above
FY2032 target
level

Solving various
social issues

Consolidated capital adequacy ratio: 12% or more
Achievement of sustainability KPIs (FY2030 target)

47

Overview of the 2nd Medium-Term Management Plan
Staying Ahead of the Curve to Always Serve theRegion: 1st stage

2nd Medium-Term
Management Plan
(April 2023–March 2028)

Creating new value by taking on fast-paced reform initiatives
during the Plan’s 5-year period
The 4 basic strategies

Society sought after
by people
From reform to creation

Maximizing the value of human resources

Realizing sustainability basedon transformations

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

Employing the

16 Group Energy
JurokuFG

Enhancement of core business(loans and deposits/exchange)

A society thatcan realize
diverse typesof happinessResilientsociety

Expansion of new business domains

Demonstration of comprehensive
financial service functions

Sustainab
le society

Offering services that exceed customer
expectations

Becoming a new force that draws out the
involvement of the region

Boosting solution-presenting capability
and enhancing sales to resolve diverse
challenges

Getting more involved in the region andcreating a region resilient to situations
including emergencies

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 more48

Transformation Strategy (1) The Group will achieve sustainability by transforming its business model and enhancing productivity, starting from digital andother transformations.

Seven transformations based on transformations C to E

AX (Transform all)

BX (Transform the bank)

Change businessmodel

CX (Transform the community)
Develop resilient community utilizing broad businessdomains

DX (Transform through digitaltechnology)
Take on the challenge of maximizing the Group’s
productivity through digital technologies

Transformation

EX (Transform sales activity)
Offer customer-driven, high-added value service

FX (Transform function)

GX (Transform through green-related initiatives)

Enhanceproductivity
49

Transformation Strategy (2) In addition to digitizing all work activities, the Group will enhance the creativity of its Directors and employees and thereby
maximize the Group’s productivity.

Enhance added value (e.g., sales, consulting, planning)

Develop humanresources andcreate time, andthereby shift tocreative work

Maximizationof productivity

Reduce workload (e.g., streamline and automate
work)
DX of all work activities
Arrangement of time
for creative work

Data-based behavior change
Sustained transactions
with customers

Apr.
2023

Diverse working styles
Development of
rewarding work
environment

Mar.
2028

Digital transformation of Juroku FG:
Digitize all work activities and maximize the creativity of Directors
and employees[Cross-industry
collaboration]

50

Human Innovation Strategy (1) To realize growth, prosperity, and sustainability for customers and the region alike, the Group will endeavor to develop
human resources who can perform at their full potential, build relationships of trust with customers, and actively work on theGroup’s various strategies.

Human Resource
Development Policy

To realize growth and prosperity
for the region, the Group willdevelop human resources who canbase themselves in, care for, andperform at their full potential forthe region.

Combine managementand HR strategies

For the growth and prosperity ofcustomers, the Group will develop
human resources who can “giveattention to,” “connect with,” and“closely support” customers andbuild relationships of trust withthem.

Develop an organizational
culture that takes onchallenges

Invest appropriately inhuman capital

To achieve sustainability, the Groupwill develop human resources who
can actively work on various
strategies on the premise of sharedvalues (i.e., “trust and ethics,”“creativity and innovation,”“diversity and acceptance”).

Ensure diversity in humanresources and working
styles51

Human Innovation Strategy (2) In addition to reforming the HR system in April 2023 for the first time in 22 years, the Group reassigned all Juroku Bankposted employees to the holding company.

Introducing a new HR system
Concept

1

Revitalizing the organization and developing active
human resources

1. Newly establishing “My Vision” and “Commitment”••

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

Committing to the organization’s purpose while valuing personal purposes

2. Developing new assessment and compensation systems

Clarifying the mission and reforming behavior
Concept2

・Promoting behavioral reform by clarifying the mission
・Encouraging growth of employees who are enthusiastic and willing totake on challenges

Concept

Developing a corporate culture that draws on
individuality and diversity

3

Employees expressing their “My Vision” (what they aim to be)
Setting commitments (targets) of what employees want to achieve and endeavors they want to take on through repeatedefforts toward realizing the Group Management Philosophy••

New HR review system to develop individuality and diversity to encourage growthCompensating enthusiasm and attitude to take on challenges instead of seniority
Abolishing minimum promotion age, allowing for employees to serve as General Managers at the age of 35

3. Empowerment of diverse human resources

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

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

Maximizing the value of diverse human resources

Reassigning to the holding company
All former Juroku Bank employees agreed to the reassignment,
and are thriving at each company as an employee on loan from the Juroku Financial
Group

Juroku Financial Group
Employees (on loan to Group companies)

Reforming mentality
Reforming behavior

JurokuBank

JurokuLease

Juroku TT

JurokuCard

JDDS

Juroku RI

NOBU
NAGA

Machiokoshi

JurokuCreditJBS

Empowering diverse
human resources

Growing throughvoluntary action

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

52

Customer-First Marketing Strategy (1) In addition to deepening the core business, Group-based efforts will be made to expand the Group’s business domain andexplore new businesses to solve diverse issues and meet the needs of customers and the region.

From deepening core business to expanding new
business domains

Pass on know-how of new
business domains into corebusiness

New business domain
Provide new value that accurately meets social needs

Expand new businessdomains harnessing theGroup’s strengths

Business domain of comprehensive
financial service
Solve diverse issues by fully
utilizing group functions
Advancement ofGroup management

Development ofsales system

Core business (Loans anddeposits/Exchange)
Deepen core business by enhancing
added value and promoting efficiency<Bank-centric phase>Foundational business<The Group’s future>53

Customer-First Marketing Strategy (2) The Group aims to establish a solid business foundation and further boost its presence in the region while developing an
optimal sales system that matches customer needs and market characteristics.

Building an sales system optimally
tailored to each region

FY2028TBD:

TBD:

Gifu Prefecture

Aichi Prefecture

Lead the region

Expand the region

Establish solid businessfoundation

Further boost presence<Major upcoming events>
Two high rises to be completed north of Gifu Station
Utilization of the main and south buildings of Gifu
City HallFY2026:FY2026:

Installation of Maglev Shinkansen “Gifu Station”

FY2037 (TBD):

Restructure the bank branch
network based on such factors
as changes in population

Further enhance transactions
through integrated Groupsales

FY2027 (TBD):

Activities to vitalize the local
economy in cooperation withpublic services and otherentities

Develop human resources who have boththorough communication skills andadvanced knowledge

Allocate human resources
based on expansion of local
market share

Advance marketing by utilizing
data<Major upcoming events>
Opening of Tokai-Kanjo Expressway (Westbound)Co-hosting of Asian Games between Aichi Pref. andCity of Nagoya
Maglev Shinkansen to start operating between Tokyo
and Nagoya
Maglev Shinkansen to start operating across entire
route

Expand new transactions byharnessing the growthpotential of the market

Promote core transactions andtransactions that make Juroku
the customer’s primary lender

Expand solution menu

54

Region-Producing Strategy (1) For local sustainability, resilience, and other issues, the Group will make the best use of its extensive business domains andrestructure the public image of the region.

Issues in the region

Sustainability of the region

Resilience of the region

・Actions against declining population

・Reinforcement of disaster preparedness

・Development of commerce/downtown areas

・Development of disaster response sites

・Creation of region-related brands

・Promotion of decarbonization

・Vitalization of local community

・Development of energy supply and other functions

・Resolution of labor shortage caused by declining birthrate
and aging population

Provide solutions to local issues

Work out standout features of the region and in-region
firms
Enhance quality of public services and income of inregion firms

・Ensuring of natural environment preservation

Produceregion harnessing
extensive businessdomains

Increase local customers’ financial assets

Reinforce emergency response capabilities
Raise all Directors’ and employees’ awareness of
disaster preparedness
Review facilities and equipment to minimize damage
Develop disaster-resilient infrastructure

Develop a resilient community with the region while having the Juroku Financial Group
serve a central role

Develop local platform

Foster innovation in region

Reinforce local resilience55

Region-Producing Strategy (2) The Juroku Financial Group will play a central part in efforts to build a platform, foster innovation, and reinforce resilience,and thereby develop a resilient community by combining the endeavors of the region.

Developing a resilient community by combining efforts with the region

Develop platform
・Enhance financial literacy in the region through such steps as holding
seminars
・Promote digital transformation in the region, with Juroku Densan Digital
Service serving a key role・Promote local vitalization, with Kanda Machiokoshi serving a key role

Region-producing

Foster innovation
・Support start-ups in the region
・Contribute to local economic development by
supporting management succession
・Introduce the Group’s human resources to inregion firms

Reinforce local resilience
・Develop a business continuity system
・Sign agreements on disaster preparedness/mitigation
with local governments and other organizations
・Have the Juroku Research Institute roll out BCP consulting

Revive business

Developplatform

Foster innovation

Promote local vitalization

Support management
succession

Support start-ups in the region

Enhance financial literacy
Promote digital transformation of public services
and local companies

Assign/Introduce human resources
Financial/Solution support

Reinforce local resilience56

Where the 2nd Medium-Term Management Plan Stands
 To achieve the Long-Term Vision for the next decade, the Group has set the 5-year of April 2023 to March 2028 as a period subject to the
2nd Medium-Term Management Plan and, accordingly, as a milestone, aims to achieve a consolidated net income of 20 billion yen or above.

Oct. 2021–Mar.
2023:
1st
Management
Plan

Apr. 2023–Mar. 2033: Long-Term Vision[Top-line growth]Groupcompanies

Plan[Reduction in
expenses]+25

 Decrease inpersonnel
expenses Enhancement of
resulting
the Group’s
from change
profitability
in personnel
makeupExpenses

-70

+11

Bank
+108

171

186
 Increase in loaninterest
 Increase inindividual-related
income andcorporate solution
fees Dissipation of
impact from foreign
bonds

147
128
106

2019/32020/32021/32022/3

Consolidated net income
30 billion yen or above

Apr. 2023–Mar. 2028 2nd Medium-Term Management

2023/3

Establishment of Juroku FG

 For-growth
humancapital/DX
investment

Other
-60

Consolidated
net income
20 billion yen orabove Increase in credit
costs Increase in corporatetax, etc.

2028/32033/357

Numerical Target for FY2027


As a provider of comprehensive financial services, the Group will endeavor to enhance its profitability, efficiency, and fiscal integrity, and thereby aim forachieving both a steady growth in the Group’s income and a solid financial foundation while exerting the Group’s synergy to the maximum extent.

Numerical targets for FY2027

Consolidated net income: 20 billion yen or above

Profitability
Consolidated ROE: 5% or more

Efficiency

Consolidated adjusted OHR: 50% level

Fiscal integrity

Consolidated capital adequacy ratio: 11%
or more58

Capitalization StrategyThe Group will strive to continuously boost shareholder returns through sustainable growth, with a total payout ratio of 25% or more as a baseline.
The Group will also further reinforce its governance by reducing the book value of cross-shareholdings by some 25% from the baseline level at late September
2022.

Change in cross-shareholdings book value balance

Example of change in dividends per share
Acquisition of treasury stock (1.1billion yen) in addition todividends

130 yen
120 yenAcquisition of treasury stock (1.1billion yen) in addition todividends

Reduce some 25%
in 5 years

90 yen80 yenEnhanceshareholder
returns throughsustainablegrowth70 yen88.3
billionyen

50.3
billionyen

47.8
billionyen

46.4
billionyen
34.9
billionyen(Projected)
Total payout ratio
Owners of the parent
Net income

24.5%

23.2%

22.8%

32.3%

31.6%

25% or more

Continuous reduction will be made by promoting dialogue
with all customers who own listed firm cross-shareholdings, and17.1billion
billion18.6billion
billion
18.6
10.610.6
billion12.812.8
billion14.7 14.7
billion17.1
yenyenbillionbillionbillion
yen
yen
yen
yen
yen
yen
yen
yen

20 billion yen

considering such factors as the environment surrounding each party.

59

Enhancement of Shareholder Returns and Contribution
to local Communities


The Board of Directors meeting held on May 11, 2023 adopted a resolution deciding on matters concerning the acquisition of treasury stock and the disposal oftreasury stock through third-party allotment for supporting the Juroku Foundation for local Promotion’s social contribution activities.

 Reason for treasury stock acquisition••

Enhance shareholder returns and both achieve the Group’s sustainable growth andrise in corporate value on the medium- to long-term by contributing to the local
community.
With its Long-Term Vision “16Vision-10” themed under “Staying ahead of the curve
to always serve the region,” the Group intends to contribute to the sustainable
development of the local community by way of the Juroku Foundation for local
Promotion.

 Treasury stock acquisition: Figure showing scheme of treasury stock disposal through third-party allotment to the Juroku Foundation for local Promotion
Acquired 460 thousand
shares of treasury stock

350 thousand of them havebeen allotted to theFoundation*0.922% of all shares outstanding as of March 31, 2023

Trust
company

JurokuFG(Voting rights
unexercised)

Pay dividend

People oftheregionJurokuFoundation
for local
Promotion

Share profit

Grants for arts/culture, etc.
Provision of scholarships① The Juroku Financial Group acquires 460 thousand shares of treasury stock (scheduled) from the market.
② This is followed by allotting 350 thousand of said (scheduled) acquisition to the trust company.
③ Dividends resulting from the allocated 350 thousand shares of treasury stock will be allocated the Juroku Foundation for local Promotion every year.
④ Income shared with the Foundation will be allotted to aids for local events and payments for scholarships of students from the region.

60

New Endeavors
 The Group will launch a joint venture with Nihon M&A Center Holdings Inc. on July 3, 2023 to contribute to solving
management succession issues faced by local companies and to support the sustainable growth of the local economy.

■Overview of joint venture
Trade nameNOBUNAGA Succession Inc.

Address

7-12 Kanda-machi, Gifu-shi■Business overview of joint venture

Representative

Motoyasu Fukui, President and Representative Director

Description ofbusiness

Management succession (M&A) advisory service

Capital

200 million yen (including 100 million yen [capital])

Date ofestablishment

July 3, 2023

Settlement term

March 31

Owners’ equity
ratiosJuroku Financial Group
Nihon M&A Center Holdings Inc.

 The joint venture will plan, mediate, broker, and provide relative consulting services forcorporate acquisitions, mergers, split-ups, share exchanges/transfers, business transfers, capitaltie-ups, and business tie-ups.
 The joint venture will also support management succession endeavors to suggest more optimal
solutions for the various issues (e.g., lack of successors) experienced by operators in and around
Gifu and Aichi regions.

■Overview of business model[Network]▷Juroku Bank/Group companies(Branches/Sales offices)▷Economic organizations, etc.

(Reference) Origin of company name
The name “Nobunaga”--borrowed from Oda Nobunaga, a Japanese warlord active during
the Warring States period (1467−1568) who had close ties to Gifu--reflects the company’s
hope to succeed the aspirations of corporate managers and shape the future as a leading
M&A-supporting company of the region.

[Direct interactions]

Corporate
managers

60% (Investment: 120 million yen)
40% (Investment: 80 million yen)

■Corporate symbol/Logo

All companies in the 16FG sales
area are covered

SeminarsCommercials/DMs/email, etc.

Needs
Investment/Human
resources

Investment/Human
resources

Local
information

Know-how61