O perational and Financial Highlights

The Juroku Bank, the core company of the Group, reported
record-high fees and commissions of ¥12.6 billion, an increase of¥1.5 billion year on year, due to continued expansion in
individual-related revenues and corporate-related revenues.
However, core gross operating profit decreased by ¥2.7 billion year
on year to ¥65.7 billion due to an increase in foreign currency
funding costs and other factors.
Additionally, due to a decrease in expenses of ¥2.3 billion year
on year to ¥37.1 billion, core net operating profit decreased by¥0.4 billion year on year to ¥28.5 billion, second only to theprevious fiscal year’s record high.
Due to an increase in profit on JGBs and other debt securities,
a decrease in credit-related costs, and other factors, ordinary profit
increased by ¥1.0 billion year on year to ¥25.5 billion, and net
income increased by ¥0.6 billion year on year to ¥17.9 billion,
both representing increases in profits for the sixth consecutive
term.
Profit of customer services, one of the Group’s key performanceindicators for profits from the Bank’s main business, is also
increasing significantly. In FY2022, it stood at ¥15.3 billion, well
above the previous fiscal year’s ¥11.4 billion, reaching levels
exceeding ¥10 billion.

The Juroku Bank

Akihide Ishiguro, President(Deputy President, Juroku Financial Group, Inc.) rends in fees and commissions of theTnon-consolidated Juroku Bank

Performance for FY2022

Individual-related

While the Japanese economy in the current fiscal year continued
to be constrained in its economic activities by the COVID-19
global pandemic, in the corporate sector, capital investment,
which had stalled amid the pandemic, picked up due toexpectations for economic normalization and other factors. Inaddition, as we look toward living with COVID-19, personal
consumption picked up moderately due to the return of flows ofpeople across the first major national holidays and New Year’s
period without restrictions on activities in three years.
In both Gifu and Aichi prefectures, which make up the main
business base of the Group, there have been signs of recovery inproduction and capital investment since the beginning of thecalendar year. However, the increased cost of purchased goods due
to high prices could not be fully passed on to sales prices, which
affected corporate earnings, especially those of small and mediumsized enterprises. Personal consumption, on the other hand,showed signs of recovery mainly in the lodging and dining services
industry due to increased human flow resulting from the easing ofrestrictions on activities.
In such an economic environment, the Group demonstrated its
comprehensive capabilities and made efforts to provide a broad
range of support to its customers amid the COVID-19 pandemic,including cash flow support and core business support, while
engaging in high-value-added consulting activities, among others.
As a result, consolidated core gross operating profit decreasedby ¥3.7 billion year on year to ¥74.5 billion, as net interest
income and other operating profit (excluding profit on JGBs andother debt securities) decreased due to increased foreign currency
funding costs at The Juroku Bank, despite an increase in fees andcommissions.
In addition, expenses including personnel expenses and nonpersonnel expenses decreased by ¥2.1 billion year on year to ¥43.9billion. As a result, consolidated core net operating profit, which is

12

profits from our main business, amounted to ¥30.6 billion,
remaining at the ¥30.0 billion level as in the previous fiscal year.
Due to an increase in profit on JGBs and other debt securities,
a decrease in credit-related costs, and other factors, ordinary profit
increased by ¥0.5 billion year on year to ¥27.2 billion, and net
income attributable to owners of the parent increased by ¥1.5billion year on year to ¥18.6 billion, both representing increases inprofits for the fifth consecutive term.

Summary of Consolidated Financial
Results of the Juroku Financial Group(Billions of Yen)

March2023(Year-onyear)

74.5

(3.7)

Net interest income

51.1

(3.2)

Fees and commissions

18.7

1.6

Other operating profit (Excluding profit onJGBs and other debt securities)

4.7

(2.0)

43.9

(2.1)

Personnel expenses

23.5

(1.2)

Non-personnel expenses

17.4

(0.9)

Consolidated core net operating profit

30.6

(1.5)

Profit on JGBs and other debt securities(7.7)

3.1Consolidated net business profit

22.9

1.6

Consolidated core gross operating profit

Expenses

Others(Billions of Yen)

10.0

9.8
3.5

5.0

11.1
2.9
2.0

12.6
2.8
2.7

1.9
4.4

6.1

March2023(Year-onyear)

Core gross operating profit

65.7

(2.7)

Net interest income

51.8

(2.7)

Fees and commissions

12.6

1.5

Other operating profit (Excluding profit onJGBs and other debt securities)

1.1

(1.5)

37.1

(2.3)

18.1

(1.4)

Expenses
Personnel expenses

16.3

(0.8)

Core net operating profit

Non-personnel expenses

28.5(0.4)

Profit on JGBs and other debt securities

(7.7)

3.1

Net business profit

20.8

2.8

Credit-related costs

1.4

(1.1)

Profit on equities

3.6(3.1)

Ordinary profit

25.5

1.0

Net income

17.9

0.6

7.1

Profit of customer services =Average loan balance x Deposit-loan interest rate difference +Fees & commissions – Operating expenses(Billions of Yen)

16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0

0.0
March 2021

March 2022

(Billions of Yen) rends in profit of customer services of theTnon-consolidated Juroku Bank

Corporate-related

15.0


TheJuroku Bank
Summary of non-consolidated results

+3.9
11.4
8.2

7.2
3.6

March
2019

March 2023

15.3

March2020

March2021

March2022

March2023

Business Projections for FY2023
In FY2023, although the earnings environment remains uncertain
due to the persistently high funding rates of foreign currencies, weexpect loan interest and fees and commissions to remain generally
firm as in FY2022. Meanwhile, due to a decrease in profit onequities and an increase in credit-related costs, we expect ordinaryprofit of ¥24.5 billion, a decrease of ¥2.7 billion year on year, andnet income attributable to owners of the parent of ¥17.0 billion, adecrease of ¥1.6 billion year on year.

J uroku Financial Group
Consolidated Business Projection(Billions of Yen)

(Projected)(Year-onyear)

71.0

(3.5)

Net interest income

50.0

(1.1)

Fees and commissions

18.4

(0.3)

Other operating profit (Excluding profit onJGBs and other debt securities)

2.6(2.1)

Consolidated core gross operating profit

March 2024

Credit-related costs

1.6(1.2)

Expenses

44.00.1

Profit on equities

3.6(2.9)

Consolidated core net operating profit

27.0(3.6)

Ordinary profit

27.20.5

Ordinary profit

24.5(2.7)

Net income attributable to owners of the parent

18.6

1.5

Net income attributable to owners of the parent

17.0(1.6)

13

Shareholder Returns

Review of the 1st Management Plan
The Company’s basic policy is to pay stable dividends
continuously while striving to further improve its fiscal
robustness in the face of diversifying risks surrounding
financial transactions. In view of the business environment
and income levels, the Company has determined thatshareholder returns will aim to achieve a total payout ratioof at least 25%.
In FY2022, based on this approach, the Company paid
an annual dividend of ¥130, an increase of ¥10 from theprevious fiscal year. In addition, the Company acquired
treasury shares in November 2022. Together with this, thetotal payout ratio reached 31.6%.

The Group commenced the 1st Management Plan from October
2021.
Under the Plan, we have engaged in three management
strategies of the “Customer-first marketing strategy” to further
leverage our problem-solving power, the “DX strategy” toimprove usability and productivity, and the “Regionalcommitment strategy” to handle regional total design, thereby
aiming to become a “comprehensive financial group that builds afuture with local communities and achieves sustainable growthwith local economies.”
As a result, all numerical targets were achieved in FY2022,
the final year of the Plan.
Additionally, “consolidated ROE,” which has been set as along-term indicator, has also expanded significantly, and theGroup’s profitability, fiscal integrity, and efficiency have also beensteadily improving.

VisionTo become a comprehensive financial group thatcreates the future of the community together andachieves sustainable growth together

Maximizing
groupsynergy

Dividends
March 2019

March 2020

March 2021

March 2022

March 2023

March 2024 (Projected)

¥70

¥80

¥90

¥120

¥130

¥130

Ordinary
dividend

¥35

¥35

¥35

¥50

¥50

¥60

Other

—

—

—

—

¥10(Commemorativedividend)—

Ordinary
dividend

¥35

¥35

¥45

¥50

¥70

¥70

Other

—

¥10(Special dividend)¥10(Commemorativedividend)¥20(Commemorativedividend)——

Annual dividendsInterim

End-of-year

Utilizingcustomerbase,informationand network

Reforming
the thinking
and behaviorof ourofficers andemployees

Creating the future of the region together
Regional
commitment
strategy

DX strategy
Improve usability
and productivity

Regional
total design

Customer-firstmarketingstrategy
Further leverage ourproblem-solving
power(*) Figures before the interim of FY2021 are the actual dividends paid by The Juroku Bank

Trends in total dividends and total payout ratio(Millions of Yen)

(%)

7,000
6,000
5,000

Total payout ratio

24.5

23.2

22.832.3
1,111

31.6
1,111

4,000
3,000
2,000
1,000

2,615

2,989

3,363

March 2019

March 2020

March 2021

4,453

4,783

Numerical
target35.0(Billions of Yen)

Numerical
targetSecuring stable income

25.0
20.0

Total dividends

15.0

Acquisition ofown shares

10.0

17.1
Numerical target: ¥16.0 billion and above

14.7

March 2018

Reduction Policy of Cross-shareholdings

Numerical
targetTrends in cross-shareholdings (book value)

March 2020

March 2021

Consolidated adjusted OHR (%)

March 2022

March 2023

Numerical
target

Maintaining high efficiency(Billions of Yen)90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0

March 2019

9.15

9.08

March 2018

March 2019

Consolidated non-interest profit ratio(%)

Diversifying income sources

82.49

30.53

68.69

March2009

March2021

47.8

46.4

44.8

March September March
2022
2022
2023

March2018

March2019

March 2021

Long-term target

March 2023

Consolidated ROE (%)

Improving level year after year
31.44

Long-term target: 5% and above

March2020

4.36
3.65

26.53

March2021

4.73

3.98

66.51
58.87

34.9
March2028

March 2020

29.10

Numerical target: 65% or less50.3

March 2022

9.27

Numerical target: 30% and above

75.19
88.3

10.54

9.93

10.6

9.9

10.52
Numerical target: 10% and above

12.8

March 2023

The Group, since FY2009, has been engaged in efforts to reduce
its cross-shareholdings. Accordingly, the balance of crossshareholdings (book value) including listed and unlisted stock
decreased from ¥88.3 billion as of March 31, 2009, to ¥44.8
billion as of March 31, 2023.
In addition, we intend to further strengthen governance byreducing our cross-shareholdings (book value) based on the end of
September 2022 by approximately 25% by the end of March
2028.
Going forward, we will continue to promote dialogue with all
customers who hold listed cross-shareholdings, aligning with thepurpose of the Corporate Governance Code, and will continue toreduce our cross-shareholdings, taking into consideration theenvironment surrounding each of them.

(%)

18.60.0
March 2022

Consolidated capital adequacy ratio Maintaining high fiscal integrity

30.0

5.0014

Consolidated net income

March
2022

58.90

March
2023

24.50
March
2018

2.94

24.04
March
2019

March
2020

March
2021

March2022

March
2023

March
2018

3.05

March
2019

March
2020

March
2021

March
2022

March
2023

15