Results of 1H FY2022

November, 2022

Shizuoka Financial Group, Inc.

Contents*In Principle, the amounts etc. in this material are rounded off to the unit

１．Results of 1H FY2022

P4～

２．Progress of the 14th Medium-term Business Plan

P14～

３．Initiatives for Sustainability Management

P30～

４．Alliance with regional banks

P35～

５．

Transformation to a Holding Company Structure
Direction of the first Medium-term Business Plan

P38～

６．Capital policy

P44～

７．Reference

P47～

Summary

１．Results of 1H FY2022✓ Consolidated Ordinary profit: JPY 38.9bn (YoY+5.5bn) Progress rate: 51.2%（Shizuoka Bank: 35.9bn (YoY+7.5bn), Consolidated subsidiaries: 4.9bn (YoY-0.2bn)）
Consolidated Interim profit: JPY 28.2bn (YoY+0.7bn) Progress rate: 52.2%✓ Profit from core business of the Bank on the non-consolidated basis steadily increased, as core net businessprofit increased to 81.1 billion yen (+8.9 billion yen YoY) while bond-related income such as JGBs decreased
to -7.3 billion yen (-7.9 billion yen YoY) mainly due to the sale of foreign bonds

２．Progress of the 14th Medium-term Business Plan
✓ Progress against the profit target for the final fiscal year is generally in line with the plan (no plan revision)✓ Transformation into a problem-solving corporate group is steadily progressing under basic strategies and a
10-year strategy

３．Transformation to a Holding Company Structure✓ Transition to holding company structure from October 2022. Aim to maximize value for all stakeholders
through independence and collaboration among group companies, expansion into new business areas, and aflexible and robust governance structure✓ Formulating the First Medium-term Business Plan for Shizuoka FG to start in April 2023
✓ Established Environmental Committee (climate change response, etc.) and Human Capital Management
Committee from the perspective of sustainability management3

Results of 1H FY2022

Results of 1H FY2022 - Consolidated
Both ordinary profit and interim net income increased, mainly due to increased profit of Shizuoka Bank,
progressing as planned.
〔Consolidated〕（JPY bn,%）

1H
FY2022

YoY change

Gross operating profit

Increase/Decrease

Rate of change

Gross operating profit

81.2

+1.0

+1.2

operating expenses (-)

48.4

-1.4

-2.8

JPY 81.2bn (first increase in 2 periods)

Increase by JPY 1.0 bn, mainly due to increase in net income of
Shizuoka Bank(+ JPY 0.9 bn )Net operating profit

JPY34.1bn (first increase in 2 periods)

Profit based on the equitymethod investment balance

0.3

-2.1

-86.9

Net operating profit※1

34.1

-3.6

+11.8

Credit-related costs (-)

4.2

+0.5

+14.4

Gain (loss) on stocks

9.3

+6.4

+223.6

Ordinary profit

JPY 38.9bn (first increase in 2 periods)

Ordinary profit

38.9

+5.5

+16.5

Progress rate

51.2％

Extraordinary profit and loss

-0.0

-5.4

-100.3

Net income before taxes

38.9

+0.0

+0.2

Corporate taxes (-)

10.6

-0.6

-5.4

Interim net income※2

28.2

+0.7

+2.4

ROE

5.1

+0.2

-

Increase by JPY 3.6 bn, due to increase in gross operating profit,
decrease in operating expenses and provision for general allowance
for loan losses

Increase JPY 5.5bn, because gain (loss) on stocks while credit-related
costs increase
Net income
Progress rate

JPY 28.2bn (continued increase in 3 periods)
52.2％

Increased by JPY 0.7bn, because ordinary profit increased while
extraordinary profit and loss decreased due to decrease in gain on
sales of stocks of related companies (JPY 5.5 bn)※1 Net operating profit = Net operating profit(Non-consolidated) + Ordinary profit(Consolidated) – Ordinary profit(Non-consolidated)※2 Interim net income attributable to owners of the parent

5

Financial Results of Major Group Companies
Shizuoka Bank

Major Group Companies other than the Bank
1H
FY2022（JPY bn,%）

YoY change
Increase/
Decrease

Gross operating profit(Core gross operating profit)

73.7
81.1

＋0.9
+8.9

＋1.3
+12.2

Net interest income
Fees and commissions
Trading income
Other operating profit

62.2
11.0
0.9
-0.5
(-7.3)
(6.5)
44.0
29.7

+0.4
+3.2
+0.4
-3.1
(-7.9)(+4.8)
-1.3
+2.2

+0.5
+41.3
+89.4
-118.9+291.2
-2.8
+8.0

36.5

+11.6

+46.8

(Bond-related income such as JGBs)(Foreign exchange trading profit)

Expenses(-)
Actual net operating profit
Core net business profit
excluding gains (losses) on bonds andcancellation of investment trusts

Shizugin Management
Consulting

Rate ofchange1H
FY2022

-0.1

1.6

+0.0

Expenses

0.3

+0.0

0.8

+0.1

Ordinary profit

0.2

-0.1

0.8

-0.1

Interim net income

0.1

-0.1

0.6

-0.1

(-)

Shizuoka Capital

Shizugin TM Securities

1H
FY2022

YoYchange1H
FY2022

YoYchangeGross operating profit

0.3

+0.1

3.5

-0.3

Expenses

0.1

+0.0

2.5

-0.1

Ordinary profit

0.2

+0.0

1.0

-0.2

Interim net income

0.1

+0.0

0.7

-0.1

(-)

-3.4

-171.5

31.1
4.8

+5.6
+1.9

+22.0
+67.0

Bad debt written-off
Gain (loss) on stocks
Ordinary profit

(-)

5.3
9.2
35.9

+4.2
+6.4
+7.5

+412.6+224.6+26.6

Extraordinary profit and loss※

-0.0

-5.9

-100.3

Net income before taxes

35.8

＋1.6

＋4.7

5.0

9.1

-0.3

-3.1

0.8

26.8

+1.9

+7.6

4.2

5.1

1H
FY20201H
FY2021

Interim net income

YoYchange

0.5

-1.4

(-)

1H
FY2022Gross operating profit

Provision for general allowance forloan losses (-)
Net operating profit
Nonrecurring profit and loss

Corporate taxes

YoYchangeShizugin Lease【 Total ordinary profit of consolidated subsidiaries /Profit based on the equity-method investment balance 】
Profit based on the equity-method investment balance
Total ordinary profit of consolidated subsidiaries
7.5

-2.3
-2.1

5.2
0.3

-0.2

4.9

2.4

※ Extraordinary profit and loss decreased due to decreased in gain on sales of stocks of related companies(-JPY 6.0bn, YoY).

Credit-related costs

(-)

3.9

+0.8

+28.2

1H
FY2022

6

Net interest income - Nonconsolidated
Increase in domestic section offset decrease in international section
Breakdown of net interest income※

Loan balance (average balance) and loan rate

1H
FY2020（JPY bn）

1H
FY2021

1H
FY2022YoY

Net interest income

57.5

61.8

62.2

+0.4

Domestic section

51.2

56.0

56.4

+0.4

Interest on loans

43.5

44.6

44.9

+0.3

Interest and dividend on
securities

7.9

11.2

10.9

-0.3

1.0

0.9

1.8

+0.9

(Bond)(Gains on investment trust)

0.0

2.4

0.7

-1.7

0.7

0.6

0.5

-0.2

0.6

0.6

0.5

-0.1

0.6

0.8

1.1

+0.3

International section

6.2

5.9

5.8

-0.1

Interest on loans

6.3

4.2

9.6

+5.4

Interest and dividend on
securities

4.6

4.1

6.4

(Bond)

3.3

2.3(Gains on investment trust)

0.9

Fund-raising expense (-)(Interest paid on deposits etc.) (-)

OthersFund-raising expense (-)(Interest paid on deposits etc.) (-)

OthersDomestic

Total loan balance
Loan rate+287.4

8,543.3

8,759.9（JPY bn）

Total loan balance
Loan rate+110.99,047.4

677.4

632.0
566.5
2.83%

1.01%

1.01%

0.99%

1.02%※

1.01%※

0.99%※

1H
FY20201H
FY2021

1H
FY2022

1.98%
1H
FY20201.49%
1H
FY2021

1H
FY2022*Excluding loans to central government

Interest on loans（JPY bn）+2.3

International
Domestic
49.8

48.8

3.8

+1.6

6.3

4.2

1.0

0.8

-0.1

5.0

2.6

11.3

+8.8

1.5

0.6

4.7

+4.2

0.4

0.1

1.1

+1.0

※ Shizuoka Bank Nonconsolidated

International（JPY bn）

+5.7
+5.4

54.6
9.6

【Factors of increase in International section】
by amt. chg. : JPY -0.2bn
by rate chg. : JPY +3.7bn
by ex. rate : JPY +1.9bn

43.5

44.6

+0.3

44.9 【Factors of increase in Domestic section】
by amt. chg. : JPY +1.4bn
by rate chg. : JPY -1.1bn

1H
FY20201H
FY2021

1H
FY2022

7

Securities and Foreign Currency Interest Income -Nonconsolidated
Conducted reconstruction of securities portfolio to secure stable profit in medium to long run in response to changes in themarket environment
Securities
Balance※〔Duration〕 ※Excluding interest rate hedged portion

Unrealized gains and losses

End of Sep.
FY2022

Change fromEnd of Mar.
FY2022End of Sep.
FY2022After hedging

Change fromEnd of Mar.
FY20222317.5+274.7+273.7＋277.9-0.6

Stocks

128.2

-0.2

+319.4-+31.3

Yen based bonds

1336.4+107.7

-13.3

-12.7

-6.7

(JGBs)（644.8）（+44.3）（-8.1）（-7.4）（-3.9）

Foreign bonds

499.7

＋68.3

-41.3

-37.8

-23.5

(Fixed rate)(240.5)（+40.8）（-15.8）（-12.2）（-6.7）(Floating rate)(259.2)（+27.5）（-25.6）-（-16.9）Investment trust

272.2+108.1

-3.9

-

-4.5

Others

80.9

-9.1

+12.9

-

+2.9

（JPY bn）※ Balance is based on acquisition cost excluding unrealized gains and losses

Gains and losses on securities（JPY bn）
Interest and dividend on securities

1H FY2021

1H FY2022

YoY

15.3

17.2

+2.0

Yen based bonds

0.9

1.8

+0.9

Foreign bonds
Gains on investment trusts(Gains (losses) on cancellation)

2.3

3.8

+1.6

3.3 (2.0)

1.5 (0.5)-1.8 (-1.5)

Investment funds

2.5

3.4

+1.0

Gains and losses on bonds
such as JGBs

0.6

-7.3

-7.9

Gain on sell of bonds such as JGBs

2.8

7.5

Loss on sell and redemption of bonds such
as JGBs (-)

2.3

Gains and losses on stocks

End of Mar. 2021

End of Sep. 2021

End of Mar. 2022

End of Sep. 2022

Yen based bonds

5.25 years

5.08 years

6.17 years

6.40 years

Foreign bonds

3.37 years

3.21 years

1.99 years

1.34 years〔Unrealized gains and losses on securities〕
StocksYen based bonds（JPY bn）

Foreign bonds

Investment trusts

End of Mar. FY2021

321.4

End of Nov. FY2021

333.5

End of Mar. FY2022

288.0

End of Nov. FY2022

319.4

Others

Forecast of net interest income for the entire foreign currency portfolio(assets and liabilities)• Although there is some negative spread in foreign currency investments,
overall foreign currency net interest income is positive due to thediversification of foreign currency investment and procurement methods.
• Net interest income is expected to decrease until the first half of 2023 due tointerest rate rises, but to increase thereafter
6.0

Foreign currency interest
income(USD1MM, left)※1
FF rate ※2（％, light）→Simulation

6.00%

5.0

5.00%

4.0

4.00%

3.0

3.00%

+4.6

2.0

2.00%

14.8

+12.5

1.0

1.00%

2.8

9.2

+6.4

0.0

Gain on sales of stocks

3.4

9.3

+5.8

Amortization (-)

0.6

0.0

-0.6

0.00%
Sep.2018

Sep.2022 Sep.2023

Mar.2027※1 Overall net interest income including loans, securities, deposits, corporate bonds, etc.
※2 FF rate forecast by market participants8Expenses
Expenses and OHR in 1H FY2022 decreased YoY
Main factors for change of expenses (Consolidated)

Expenses and OHR (Consolidated)
Personnel expense
Non-personnel expense
Tax

44.7
3.8
20.7
55.6%

20.2

YoY

（JPY bn）

-0.9

49.7

48.8

4.1
25.3

3.6
24.4

62.0%

60.1%

Main factors

Tax

JPY -0.5bn

Consumption tax JPY -0.5bn

Non-personnel
expenses

JPY -0.9bn

Deposit insurance premium JPY -0.7bn

Personnel
expenses

JPY +0.5bn

Salaries, etc. JPY +0.5bn

Total

JPY -0.9bn

20.8

20.3

Main factors for change of expenses, Next-Generation-System-related
1H FY2020

1H FY2021

1H FY2022

Expenses and OHR (Nonconsolidated)
Personnel expense
Non-personnel expense
Tax

40.5
3.6
21.3
55.7%

YoY

（JPY bn）

45.3

-1.3

44.0

Main factors

Tax

JPY -0.5bn

Consumption tax JPY -0.5bn

Non-personnel
expenses

JPY -1.2bn

Deposit insurance premium JPY -0.7bn
Depreciation and amortization JPY-0.6bn
Salaries, etc. JPY +0.4bn

4.0

3.5

25.7

24.5

Personnel
expenses

JPY +0.4bn

62.2%

59.7%

Total

JPY -1.3bn(Reference)

15.6
1H FY2020

15.6
1H FY2021

16.0
1H FY2022

Next-Generation-System-related(Estimated full-year amount)

JPY 5.4bn (-0.6bn, YoY)
(Estimated full-year amount JPY 10.3bn)

9

Credit-related costs - Nonconsolidated
Credit-related costs in 2Q FY 2022 Increased YoY mainly due to increase in specific allowance for loan losses, but
remained at a low level
Credit-related costs and Credit-related cost ratio

Breakdown of credit-related costs

Credit-related costs
Credit-related costs rate

1H
FY20201H
FY2021

1H
FY2022

YoYchangeProvision for general allowance
for loan losses (1)

1.9

2.0

-1.4

-3.4

Provision for specific allowance
for loan losses (2)

3.0

0.9

5.1

+4.2

4.8

Other non-performing loans (NPL)
disposal * (3)

-0.1

0.1

0.2

+0.1

0.05%

0.09%

0.12%

Credit-related Costs (1)+(2)+(3)

4.8

3.0

3.9

+0.8

FY2018FY2019FY2020(JPY bn)

11.7
8.7* Including provision for the estimated future payments to credit guarantee corporations, provision for allowance
for accidental losses, and losses on sell of loans

5.5※PD of sound borrowers and borrowers needing careful monitoring（On the basis of no. of borrowers）
1.42%

Other NPL disposal

Historical average of PD since Mar. 2008 : 0.89%
1.05%

1.01%

Provision for general allowance for loan losses (negative figures:
Appropriate back)(JPY bn)

0.79%
0.62%

0.64%

0.64%

Excluding users of Business Quick Loan(*)*Small amount loan with 100% external guaranty
End ofMar.'140.36%
End ofMar.'16

1H
FY2022End ofMar.'18

End ofMar.'20

End ofMar.'22

Changes in credit rating, etc.
Decrease in the value of collaterals

6.6

Upgrade of credit rating, decrease in loan
and credit balances by foreclosure, etc.

-1.5

Total

8.6

0.4

4.8

2.7

7.8

0.4
3.4

5.5

1.0

0.4

FY2018FY20190.88%

End ofMar.'12

FY2021

0.0

5.1

11.7

0.96%

End ofMar.'10

0.05%

Costs resulting from COVID-19 effect was JPY 1.7bn (JPY -0.9bn, YoY)

Provision for specific allowance for loan losses

End ofMar.'08

3.9

Provision for allowance for loan losses and other
NPL disposal

Probability of Default (PD)Historical average of PD since Mar. 2008 : 0.80%（Excluding users of Business Quick Loan）(JPY bn)* Credit-related costs rate =Credit-related costs / Average loan balance

5.5
0.1
2.8

3.5

2.6

3.9
0.2
5.1
-1.4

FY2020

FY2021

1H
FY202210

Risk-management loans (Loans based on the Financial Reconstruction Act *) Nonconsolidated
Overall risk-management loans increased compared to End of Mar. 2022, while net risk-management loans decreased
Trends in Risk-management loans

Net risk-management loans

Loans to customers who have gone bankrupt

JPY 106.7bn(JPY bn)

Loans wiith interest payment in arrears
Loans that have not been repaid for over 3 months or have been restructured

Partial direct
write-off

JPY 5.6bn
243.4

Guaranteed by credit
guarantee associations

JPY 36.2bn

8.8[Delinquency ratio]

166.1
5.2
216.2
144.4

100.9

102.9

103.5

98.4

106.7

3.0

6.2

1.9

2.1

2.4

84.4

82.9

87.3

82.2

90.8

In
arrears
14%
Not
arrears
86%

18.4

16.4

13.6

13.9

14.3

14.1

13.6

End ofMar.'11End ofMar.'14

End ofMar.'17

End ofMar.'21End of
Sep.'21End ofMar.'22End ofSep. '22

New recognition of NPLs
Removal from the balance sheet(NPL to borrowers classified
as “at risk of failure” or riskier
categories)

Risk-management loans

+29.5
-34.0
(-30.7)98.4

1H
FY2022[Breakdown of JPY -9.3bn](JPY bn)

JPY 16.0bn

Net risk-managementloans

EL (Expected loss in 1 year from now on) : JPY 1.0bn

Risk-management loans

3.59%

Net risk-management loans+19.0Collected from borro
wer/ set off against
deposit account

-2.0

-10.7
(-9.3)

Collateral disposal/
suzbrogated toguarantor-2.8

Reclassified to better
categories-2.7

Loans sold-off

-1.8

106.7

Collateral/
Reserves

The ratio of risk-management loans

NPL removal from the balance sheet
FY2021

JPY 48.9bn

2.25%

1.24%

* Reconcile risk-management loans with loans based on the Financial Reconstruction Act according to revision ofOrder for Enforcement of the Banking Act since the end of Mar. 2022. Adopt the standard retroactively to the past.

1.08%

1.09%

1.01%

1.05%

0.38%

0.26%

0.15%

0.17%

0.18%

0.16%

0.15%

End ofMar. '11

End ofMar. '14

End ofMar. '17

End ofMar. '21

End ofSep. '21

End ofMar. '22

End ofSep. '22

11

Capital adequacy ratio -Nonconsolidated
Both Total capital ratio and CET1 ratio at the end of Sep. 2022 are 14.25%, down 1.83 percent points from the end of Mar. 2022
Capital adequacy ratio (Consolidated basis)

Changes in capital and risk-adjusted assets (Consolidated basis)

CET1ratio
Total capital ratio（％）

End ofSep. ’21

End ofMar. ’22

End ofSep. ’22

Change from theend of Mar. ’22

Total capital*

990.4 1,012.7

965.4

877.7

-87.7

CET1

990.4 1,012.7

965.4

877.7

-87.7

Excluding valuation difference on
available-for-sale securities

759.2

769.9

771.6

686.4

-85.2

(Temporary fluctuation factors due to thetransition to a holding company structure)

-

-

-

-

(-59.6)

Other Tier 1

-

-

-

-

-

Tier 2

-

-

-

-

-

5,979.7 6,098.5 6,001.2 6,155.8+154.6

5,658.0 5,776.8 5,672.1 5,816.3+144.2[BaselⅢ](JPY bn)

CET1ratio excluding valuation difference on available-for-sale securities

16.60

16.56

16.08

(approx. 15.22*)

14.25
12.69

12.62

End ofMar. 2021(approx. 12.12*)

12.85

11.15

End ofSep. 2021

End ofMar. 2022

End ofSep. 2022*Excluding temporary fluctuation factors such as dividends in kind of shares of subsidiaries due to thetransition to a holding company structure(This factor will be eliminated by the inclusion of the holding company in the consolidated accounts asof the end of Dec. 2022.)

Capital adequacy ratio(Basel III finalization basis: consolidated)◼ Make a trial calculation on influence of Basel III finalization based on figures
at the end of Sep. 2022
CET1ratio
Total capital ratio
CET1ratio excluding valuation difference on available-for-sale securities

15.22*

Rise without
hitting capital floor

15.22*
12.12*End of Sep. 2022

17.05

Fall by hitting capital floor due
to gradual rise of capital floor

16.93
13.47
1st year of finalization

14.12

14.01
11.15
Full implementation of
finalization*Excluding temporary fluctuation factors such as dividends in kind of shares of subsidiaries due to thetransition to a holding company structure

Risk-adjusted assets

Total credit-risk adjusted assets

End ofMar. ’21

Amount corresponding to market risk

19.4

19.6

20.2

20.9

+0.7

Amount corresponding to operational risk

302.3

302.1

309.0

318.6

+9.6

*Capital does not include preferred shares, subordinated debts, etc.

Interest rate risk in the banking book (IRRBB) (Consolidated basis, End of Sep. 2022)◼ Results of materiality test: ∆EVE (Economic Value of Equity) (Decrease in economic
value of equity due to interest rate shock within IRRBB)
Decrease in economic value

Tier 1Results of materiality test*

JPY 36.7bn

JPY 877.7bn

4.2%≦15%*Financial Services Agency supervision guidelines require ∆EVE to be less than 15% of Tier 1 capital◼ ΔNII (Net Interest Income):JPY 9.6bn（Decrease in net interest income due to interest shock Within IRRBB）

12

Projected performance in FY2022
Consolidated ordinary income is expected to be JPY 76.0 bn in FY2022 as originally planned.
(Revised credit-related costs to JPY 7.0 bn (JPY -4.0 bn from original plan). Profit plan remains unchanged inconsideration of market factors.)（億円）

FY2020

FY2021(A)

FY2022(Projected)
(B)

YoY
(B-A)

1H
FY2022(C)

Progress rate
(C/B)

Consolidated

Ordinary profit

63.3

54.2

76.0

+21.8

38.9

51.2%

Profit attributable to ownersof the parent

43.6

41.6

54.0

+12.4

28.2

52.2%

ROE

4.1%

3.8%

4.7%

+0.9pt

5.1%

-

OHR

59.5%

64.2%

56.5%

-7.7pt60.1%-

CET1 ratio

16.56%

16.08%

15.2%-0.8pt14.25%

-

138.5

134.7

149.0

+14.3

73.7

49.4%

Net interest income

114.7

124.5

121.5

-3.0

62.2

51.1%

Fees and commissions

15.9

14.8

20.5

+5.7

11.0

53.8%

Trading income

0.9

0.9

1.0

+0.1

0.9

94.9%

Other operating profit

7.0

-5.5

6.0

+11.5

-0.5

-8.1%

84.4

88.2

87.5

-0.7

44.0

50.2%

Ordinary profit

51.5

45.3

64.5

+19.2

35.9

55.6%

Net income

35.5

36.1

45.0

+8.9

26.8

59.4%

11.7

5.5

7.0

+1.5

3.9

55.0%

Gross operating profit

Nonconsolidated

ExpensesCredit-related costs

(-)

(-)

13

Progress of the 14th
Medium-term Business Plan

14

Picture that Shizuoka Bank Group targets
Picture targeted in long term
(10-year Vision)

14th Medium-term Business Plan COLORs◆ Vision
Change to a problem-solving corporate group assistingregional customers with hands-on support◆ Three Basic Strategies
1. Group Sales Strategy
2. Innovation Strategy
3. Business Portfolio Strategy“Change of mind”• Support customers
under COVID-19 pandemic• Conduct HR interaction
among Group (*)(*) 225 people as of Oct.1st 2022 on a cumulative basis

FY2021

FY2022“Change of action”“Realization of achievement”• Shift from financial support
to business support• Develop whole asset sales andasset management business• Customers initially consult
Shizuoka Bank Group on any
issues and needs15

To realize 10-year Vision
Aim at reinforcing earning power through problem-solving of the region and expanding new businessfield in addition to traditional business of loans and deposits

14th Medium-term Business Plan

Picture targeted in long term
(10-year Vision)

A problem-solving corporate groupassisting customers with hands-on support
Cross-industry
collaboration

Market credit
investment✓ New financial services✓ Expand non-face-to-face business✓ Develop loan market etc.

Earning : approx.
JPY 16.0bn

Banking

A corporate group committing
itself to future of region andproducing growth of region

Business forventure firms✓ Loans and deposits✓ Exchanges

Life-planning

Corporate✓ Asset building✓ Asset management✓ Inheritance measure etc.

✓ Business restructuring✓ HR introduction✓ M&A etc.

Expand existing businesses

Loan forasset building

Overseas network

Interest revenue : approx.
JPY 7.0bn

Group company
function
Ordinary profit : approx.
JPY 10.0bn

Deepen businesses for growth✓ Establish site in Silicon Valley✓ Shift from rep. office to branchin Singapore

Alliance
New businessin the region✓ Transformation to holding
company structure

Expand new business fields
16

Progress of the 14th Medium-term Business Plan
Transformation into a problem-solving corporate group is steadily progressing under three basic strategies
and a 10-year strategy

FY 2020Group
Sales
StrategyInnovation
Strategy

FY 2021

FY2022

Provide solutions to meet diversifying corporate needs ●Started business of IT support ●Wholly owned subsidiary(SCC)●Shizuoka Capital No.9 Fund established●Entry into HR introduction business ●Estarted to handle ESG leases●Support for cash management(COVID-19) ●Started Positive Impact Financing for SMEs

Strengthen capabilities on comprehensive consulting for individuals ●Name of loan center changed to Life Design Station●Started testamentary trusts (Establish a Hoken-no-Madoguchi or set up an insurance desk)●Started face-to-face wrap services (Shizugin Wrap)
Launched Next Generation System●Reinforce non-face-to-face channel(Mobile apps, Contact Center, Portal website for corporate customers)

DX Strategy●

Business for venture firms
Cross-industry collaboration●

Started venture debt
au Jibun Bank (guaranty) iYell (housing loan platform) ●Address (utilization of vacant houses)●Tailor Works (community platform)●asoview!（sightseeing）●●

Grobal strategy

Established Silicon Valley Rep. Office
Change Rep. Office Registered in Singapore to a branch●●Business
Portfolio
Strategy
10-yearStrategy

Human resource strategy

New evaluation system（Value、OKR）●●Human interaction Among Group Companies●

Side-job and second business system●

First female executive officer (Shizuoka Bank)
Representative Director (Shizugin Heartfull)Introduction of full flextime system, etc.
● High school graduate hiring resumes; para-athlete hiring begins.

●● Established Shizugin TM Securities Yamanashi Head Office ● Business Succession fund
Alliance with regional banks● Shizuoka-Nagoya Alliance● Shizuoka-Yamanashi Alliance

Initiatives in response to changes in the environment

Transition to holding company structure
Set target on Sustainable Finance ● Industrial Transformation Support PT
●

●

17

Basic strategy 1
Group Sales

Loans

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Loan balance (average balance) increased mainly due to increase in loans for SMEs and Retails (+4.2% annual late)
Total loan balance (average balance)
Average balance
Total loan balance
Loan balance
for SMEs

JPY 9,724.8bn
JPY 3,833.4bn

Total loan balance by region
Annualgrowth rate

YoY change
JPY +398.4bn
JPY +185.6bn+4.2%

JPY 1,864.4bn

JPY +34.0bn+1.8%

Retail loan balance

JPY 3,646.4bn

JPY +138.8bn+3.9%Loan balancein foreign currency

JPY 641.2bn

JPY +116.1bn

Total loan balance (average balance)
Large and Medium size enterprises

Overseas9,326.4

＋47.9

205.3

3,776.9

3,933.1

5,165.1

5,188.0

1H FY2020

1H FY2021＋336.4＋14.2

9,724.8
253.2
4,269.5

5,202.2+22.1%

by amt.chg. :JPY -10.8bn
by ex. rate :JPY +126.9bn

SMEs

Outside the Shizuoka Pref.

（JPY bn）

9,175.3
233.3

+5.0%

Loan balance forlarge and medium size
enterprises

Inside the Shizuoka Pref.

1H FY2022

Loan and Deposit Income and Expenses by domestic*
Retail+398.4

Overseas（JPY bn）

9,724.8

9,175.3

9,326.4

432.2

340.6

380.6

3,383.2

3,507.6

3,646.4

1,802.9

1,830.4

1,864.4

3,557.0

3,647.8

3,833.4

1H FY2020

1H FY2021

1H FY2022

Total loan balance (average balance) by domestic
Loan and Deposit Income and Expenses by domestic

7,077.1

8,128.2

8,621.1
86.8

82.9

FY2016

8,795.3
88.3（JPY bn）

9,047.4
88.9（annual basis）

83.7

FY2019FY2020

FY2021* Loan and Deposit Income and Expenses = Interest on loans - Interest on deposits

1H
FY2022 18

Basic strategy 1
Group Sales

Deposits

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Deposit balance (average balance) increased mainly due to increase in retail deposit balance (+2.2% annual late)
Deposit balance (average balance)（JPY bn）

Average balance

YoY change

Deposit balance by region

Total deposit
balance

JPY 11,417.1bn+ JPY 249.3bn+ 2.2%

Deposit balancein Shizuoka

JPY 9,842.9bn+ JPY 250.8bn+ 2.6%

Corporate
deposit balance

JPY 2,920.6bn- JPY 29.1bn- 0.9%

Retail deposit
balance

JPY 7,582.3bn+ JPY 240.6bn+ 3.2%

Public deposit
balance

JPY 356.6bn+ JPY 23.6bn+ 7.0%NCD

JPY 93.8bn- JPY 31.3bn- 25.0%Retail

10,350.8
821.4
6,967.3+249.3

Overseas, etc（JPY bn）

10,350.8
371.7
950.6

11,167.8
426.2
1,149.5

9,028.5

9,592.1

1H FY2020

1H FY2021（JPY bn）

Public&Overseas, etc
11,167.8

Outside the Shizuoka Pref.

+32.2+250.8

11,417.1
392.5
1,181.7

9,842.9

1H FY2022

Loan-Deposit ratio / Security-Deposit ratio (excluding NCD)

Deposit balance (average balance)
Coporate

Inside the Shizuoka Pref.

Annual growthrate

Loan-Deposit ratio + Security-Deposit ratio

11,417.1

876.4

914.1

7,341.7

7,582.3

116.8
104.3

85.7

75.1
29.2

2,562.1

2,949.7

2,920.6

1H FY2020

1H FY2021

1H FY2022

FY2004

113.5

88.9

114.4

88.0

105.3

101.0

85.0

88.1

Loan-Deposit ratio
31.2

FY200724.6

26.4

FY2010FY2013

（％）

99.9

104.2

83.5

85.1

Security-Deposit ratio
20.3

12.9

16.4

19.0

FY2016FY2019FY2021

1H FY2022

19Basic strategy 1
Group Sales

Consumer loans

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Consumer loan balance (term-end balance) increased mainly due to increase in housing loan balance*1 Apartment loans (excluding loan to corporates) *2 Apartment loans (including loan to corporates)

Housing loan and Apartment loan breakdown by region

Consumer loan balance (term-end balance)

Unsecuredloans

Housing loans

3,546.5

3,417.1+ 143.5

2,403.4

2,283.6（JPY bn）+ 128.5

2,283.6

2,531.9

641.1
Loans forasset building

202.9

754.0
Others84.0
End ofSep. 2020

Apartment loans*1

200.0

195.5

777.5
72.9
End ofSep. 2021

803.9
61.9
End ofSep. 2022

1,642.4

Loan-related fees
Unsecured loans

Housing loans

Loans forasset building

24.6

24.9

1.3
2.9

1.7
2.8

1.7
2.9

12.3

12.4

12.1

1.316%

3.5

2,531.9

989.5

827.7

728.1

1,675.2

383.4

End ofSep. '20

End ofSep. '21[Delinquency rate](3 months or longer)

4.2
0.5
1H FY2021

4.3
0.3
1H FY2022

664.0+ 10.2End ofSep. '22

End ofSep. '20

End ofSep. '21

End ofSep. '22

End of Sep.
2020

End of Sep.
2021

End of Sep.
2022

Housing loans

0.14%

0.13%

0.10%

Apartment loans*2

0.06%

0.16%

0.04%

Loans for asset building

0.18%

0.18%

0.43%

1.271%

3.4

425.4

Delinquency rate and Occupancy rate

（JPY bn）

3.5+ 42.0

653.8

648.6

1,704.2

1,089.4

1,037.2

340.9+ 99.6[Occupancy rate]

4.1
Others0.6
1H FY2020

Apartment loans*1

1.370%

2,403.4（JPY bn）

Outside the Shizuoka Pref.
Inside the Shizuoka Pref.

+ 29.0Interest amounts, fees and rates of consumer loans
24.8[ Apartment loan*2 ][ Housing loan ]Outside the Shizuoka pref
Inside the Shizuoka pref

96.8

92.7

92.6

3,690.0

Dec. 2019
SurveyDec. 2020
SurveyDec. 2021
SurveyInside Shizuoka Pref.

92.7%

92.5%

93.5%

Outside Shizuoka Pref

93.2%

93.3%

94.1%

20

Basic strategy 1
Group Sales

Fees and commissions, Trading income

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Fees and commissions increased due to an increase in corporate-related income and a decrease in expenses.
BK: Shizuoka Bank, SMC: Shizugin Management Consulting, Lease: Shizugin Lease, TM: Shizugin TM Scurities

Fee incomes from wholesale (including group companies)

Fees and commissions, Trading income(JPY bn)[Consolidated]Fees and commissions

1H
FY20201H
FY2021

1H
FY2022

YoY

16.0

15.7

19.1

+3.3

[Nonconsolidated]Fees and commissions

8.3

7.8

11.0

+3.2

Fees and commissions incomes

16.0

15.9

17.1

+1.2

Fees and commissions expenses (-)

7.7

8.1

6.1

*-2.0

*Effects of changes in account（Group credit life insurance dividends+1.3, Investment funds expenses -0.8）

+1.6
4.2

Derivatives

Ordinary profit of
SMC and Lease

1.7

3.1

2.4

3.5

Syndicated loan etc.
Solution-related+1.0
OthersRelated to market credit investment

1.7

0.8

1.6

+0.8

Syndicated loan, etc.

0.5

0.5

0.5

-0.0

Solution-related (Business matching,support for subsidy, etc.)

0.2

0.5

0.6

+0.1

Others (covenants loan, etc.)

0.7

0.6

0.7

+0.1

Other fees on loans

1.7

2.1

1.8

-0.2

Fee incomes on customer assets

2.4

2.7

3.0

+0.3

[Major items]
Fee incomes from wholesale

Investment trust

0.1

0.1

0.1

-0.0

Insurance products

2.3

2.6

2.9

+0.3

Net profit on exchange

3.0

2.9

2.6

-0.3

[Nonconsolidated]Trading income
Derivatives

0.4

0.5

0.9

+0.4

0.1

0.2

0.9

+0.7

1.0

0.2

1.2

Market credit
investment(JPY bn)

0.9

3.8

0.1
1.1

5.4

1.6

0.5
0.2
0.7

0.8
0.5
0.5
0.6

0.5
0.6
0.7

1H
FY20201H
FY2021

1H
FY2022

Fee incomes on customer assets (including group companies)
Ordinary profit (TM)Fee income from investment trust (BK)
Fee income from insurance products

3.4(JPY bn)

3.9

+0.1

4.0

1.0
0.1

1.2
0.1

1.0
0.1

2.3

2.6

2.9

1H
2020

1H
2021

1H
2022

21

Basic strategy 1
Group Sales

Meet needs of corporate customers

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Provide solutions tailored to management issues of corporate customers through Group-wide collaboration
Business matching (introduction of business partners) Main business
IT, DX
Human resource
Support for business development
M&As and business successions
Financial improvement and consulting
OthersFee income (JPY bn)

257
1
18
6
62

No. of adoptions

19
11

94

159

33
135

133

1H
FY 2021End ofMay. 2021

1H
FY 2022【No. of contract concluded and fee income】

1H
FY2020

65

47

57

50

End ofJuly. 2021

End ofSep. 2021

End ofDec. 2021

End ofMar. 2022

End ofSep. 2022

Cash position,business improvement

Support for business improvement
FY2020

FY2021

1H FY2022

19 companies

21 companies

15 companies

Subordinated loan

7 loans, JPY 2.3bn

6 loans, JPY 2.8bn

1 loan, JPY 0.3bn

Co-financing with JFC*

37 loans, JPY 4.0bn

50 loans, JPY 4.2bn

19 loans, JPY 2.8bn

Use of revitalization funds

1 case1 case0 caseNo. of business restructuring
support initiatives

58 cases

59 cases

55 casesNo. of projects
completed

12 cases

14 cases

7 cases

etc.)

141

75

87

43

44

M&A (recover-type, relief-type,

139

0.33

35

（cases）

No. of M&As and business successions contracted
No. of business successions contracted
No. of M&As contracted
Fee income (JPY bn)

21

Regional Bank
Ave. : 133

68

M&A and business succession (including Group companies) Succession

44

112

0.29

0.15

62

（cases）

216

87

0.25

127

266

23
21
36

343

69

estimated profits
JPY 0.6bn

Cumulative No. of adoptions

396

105

1H
FY 2020Main business（cases）

75

101

Business restructuring

0.47
64

0.41
32

21

22

1H
FY2021

1H
FY2022Contracts which
Shizuoka Bank
Group completed
without external
resources54* Co-financing with equity subordinated loans from JFC

22

Basic strategy 1
Group Sales

Meet needs in life-planning

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Customer asset excluding JPY deposits of the whole Group (including Shizugin TM Securities) increased steadily
Customer assets excluding JPY deposits (term-end balance)
Others(deposit in foreign currency, investment
trusts, public & corporate bonds)
Shizugin TM Securities

1,408.5
97.5

445.0

1,521.6
101.5

516.1 3.9

(JPY bn)+83.7

Amount of sales and commissions in insurance
Amount of sales(JPY bn)

Commisions+14.3

1,605.3
93.7

4.0

59.9

45.6

536.2

2.9

32.3

3.4

2.6

2.3

866.0

904.0

975.4

End of Sep. 2020

End of Sep. 2021

End of Sep. 2022

1H
FY2020Results of “Shizugin Wrap” (Balance and Stock revenue)

1H
FY2021

1H
FY2022Customer assets of Shizugin TM Securities(JPY bn)balance

Stock revenue ofJPY-1bn-scale

Stock revenue

Investment trusts
Stock
Stock revenue

40.2

693.8

1.4

278.5

0.4

1H
FY2022

FY2027 (E)Wrap
Others+177.0853.1
0.9

1,030.1
1.1
477.7

392.6

0.6

19.6

1H
FY2021(JPY bn)

19.6

40.2
156.7

125.8

157.1

289.5

283.9

355.5

End of Sep. 2020

End of Sep. 2021

End of Sep. 2022

23

Basic strategy 1
Group Sales

Business for venture firms(1)Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Expand venture business by utilizing the established network

Venture Debt

Type of industry of invested firms(End of Sep.2022 16 fund Approx. JPY 23.4bn)
Type of industry(Execution amount as of the end of Sep. 2022: approx. 3.5 billion yen)

[Number of debts (Total)]

No. of firms

For corporate, SaaS100

Fin Tech

62

Medical, nursing care, biotechnology

59

AI, data analysis

31

Manufacturing, robotics, IoT

24

Others153

21%

averagerate:3.3%

66
38

Initiatives with the SSI model

4

6

11

20

25

Oct.
2021

Dec.
2021

Mar.
2022

Jun.
2022

Sep.
2022

46%
29%
seed
middle

early
later

TECH BEAT Shizuoka⚫

investment

fund

Stock Acquisition RightFirst Refusal Right for
acquisitions

4%

95

449

Dispatch of HR

210

AppliedExtended

173

Total

（Case） [Percentage of loans by growth stage]investment(100%)New Company
Turn The Tide Inc.

Fair of advanced technology to provide opportunities of matching between startup firms
mainly in metropolitan area and firms in Shizuoka Pref.

Theme
All industries
Agriculture and otherprimary industries
MedicalNo. ofTimes held
4
3
1

Attenders(Total)Approx. 34,000

Individual businesstalk (Total)

Approx. 1,300

Consulting Business on Balance Sheet Improvement

Turn The Tide Inc. was established by utilizing the GCPJ Fund’s new
business model (SSI)24

Business for venture firms(2) - Cross-industry collaboration

Basic strategy 1
Group Sales

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Expanding high-value-added business through cross-industrial collaboration
Amount of investment JPY 21.3bn (Unrealized gains JPY +12.4bn), Collaboration Income JPY 8.8bn
Bank-security collaboration(Collaboration and Investment
Income JPY 4.0bn)

Provision of new financial services[Total results by the end of Sep.FY2022]
Profit based on the equity-method
investment balance: JPY 10.9bn
Gain on sales of stock: JPY 7.1bn(Goodwill retirement: JPY -14.2bn)
Shizugin Wrap etc.: JPY 0.2bn(Collaboration and Investment
Income JPY 3.6bn)[Total results by the end of Sep.FY2022]
Commons Asset Management, Inc
Amount of distributions and gains on salesof investment trust total JPY 3.8bn✓ Enhance asset building services for the 100-year life period→Jointly provide wrap products (face-to-face and non-face-to-face)✓ Develop business for start-ups through LP investment in VC(Sourcing of venture debt, etc.)✓ Consider new services using blockchain✓ Jointly develop smartphone apps to expand non-face-to-facechannels (Money Forward)✓ Realize consultings that combine mortgage, asset formation,and insurance counseling→Establish “Hoken no Madoguchi” at Life Design Stations

New businesses
in housing loan market

Revitalization of region(Collaboration Income JPY 1.2bn)[Total results by the end of Sep.FY2022]
Housing loan interest and guarantee fee:
JPY 0.6bn
Interest on securities (RMBS):
JPY 0.6bn✓ Diversify mortgage business (ARUHI・au JIBUN Bank)→ Guarantee balance JPY 17.3 bn,
Amount of RMBS around JPY 110bn✓ Provide online matching services with house builder andcustomer → Launched “Tatepita-Shizuoka” (iYell)✓ Revitalize local tourism business [asoview]✓ Promote effective utilization of idle assets（vacanthouses,etc.）[ADDress]→ Accelerate collaboration that contributes to regional
revitalization
25

Basic strategy 1
Group Sales

Overseas Strategy

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

After reviewing the roles of overseas offices, strengthen business development
Overseas network

Overseas Strategic Initiatives• Best network in regional banks with 6 overseas sites andalliance with local financial institutions

１

Silicon Valley
Rep. Office
Shizuoka Bank(Europe) S.A.

New York Branch✓ Contracted for overseas M&A: 2 cases (buying needs) (Singapore)✓ The number and balance of non-Japanese deals are both on therise as the market recovers, despite a temporary decline in thenumber of deals during COVID-19 pandemic
Balance as of the end of Sep. 2022: JPY 99.1 bn (+32.3 bn YoY)

BBVA Bancomer

Credit Agricole Corporate
and Investment Bank

２
Asia
China Construction Bank
Bank of Shanghai

Nagoya Bank
Nantong BranchState Bank of India

ANZ Bank(Vietnam)
BIDV

KASIKORN BANK
Bangkok Bank

Singapore Branch

Shinhan Bank
Daegu Bank

Shanghai Rep.
OfficeOverseas Business Development

Alliances with regional banks✓ Accept 1 trainee in Hong Kong Branch from Yamanashi
Chuo Bank (Jul. 2021)✓ Strengthen ties with the Nantong Branch of the Bank of
Nagoya as a base for CNY-denominated transactions

Hong Kong Branch
Chinatrust
Financial Holding
Bank of the Philippine Islands
BDO Unibank
CIMB Niaga
Bank Resona Perdania

３

Silicon Valley Representative Office Initiatives✓ Established in November 2021 to gather information on
advanced technologies and venture businesses✓ Gather information by Actively meeting with Japanesecompanies, government agencies, local VCs, startups, etc
Number of interviews by the end of Sep. 2022:
Cumulative total of approx. 350 interviews

26

Basic strategy 1
Group Sales

Effects of the System Strategy

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Prepared the structure for an increase in strategic projects by improving productivity with the launch of thenext-generation core system
Effects of Developing a Next-Generation Accounting System

Effects of Group Cloud Platform• Improved development efficiency by simplifying program structure andeliminating parameters in programming• Build the private cloud infrastructure that is common to the group.
Eliminate duplicate investment and improve development efficiency throughcommon infrastructure• Of the 270 systems in the entire group, approximately 80 systemus areplanned tobe installed on the infrastructure by FY2023[Expected Effects(total until FY2023)][Effects of Productivity Improvement]• Compare development efficiency before and after the launch of thenext-generation core system*FY2016-2020 is not included because development projects were restrained to prioritize theconstruction of the next-generation core system during these perods

Before the launch

Afterthelaunch（ave.FY2014-2015）（ave.FY2021-2022）

Cost

JPY 3,485mil per year

JPY 3,562mil per year

No. of cases

208 cases per year

322 cases per year

Man-hours
per project17 man-months per case

11 man-months per case

6 man-months per case（approx.35%）down

conventional

GroupCloud

EffectLump-sumpayment

JPY 2.3 bn

JPY 1.4bn

JPY -0.9bn

Running costs

JPY 0.2bn / year

JPY 0.1bn / year

JPY -0.1bn / year

Expand strategic investments[System Investment (Excluding Next-Generation-System-related cost)] （JPY bn）
FY2019FY2020

FY2021

FY2022Strategic projects

0.9

0.4

5.0

5.1

Maintenance and renewal

2.3

4.1

4.6

4.5

27%

Able to handle 1.5 times projects or more then before with the same costs

Effects of RPA

9%
48% 52%

73%

91%

FY2019FY2020• RPA system* was introduced in August 2018 and is planned to be applied to atotal of 135
operations by FY2022*Asystem that automatically processes routine tasks on a PC by having arobot memorize the task performed by humans.

FY2021

47% 53%
FY2022（plan）

Cumulative business reduction hours by FY2022:-140,000 hours / year (equivalent to approx. 70
employees )(including planned values)
27Basic strategy 1
Group SalesDX Strategy

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Progress in transformation to a business model that maximizes the use of digitaltechnology and data in anticipation of the next mid-term business plancustomer contact

Contact
CenterMobile Portal website forapps corporate customers

Reinforce non-face-to-face channel
・Expanded mobile app use to all stores (started in Jun. 2022)
180,000 downloads (end of Sep. 2022)

・Launched the corporate portal site “Shizugin Business Portal”(started in Sep. 2022)

Sales Style

New CRM
systemMain functions (to be expanded sequentially)■ Application for consulting services■ Visualization of deposit information, etc.

Platform to analyze andutilize data

・Expand contact center function（ started in Jan. 2022 ）Expand customer contact points by introducing chatbots and manned chatoperational efficiency
BPR in operations

Human
Resource
Development

Transform sales style
Seamless information sharing, generation of sales time, andsophistication of sales activities realize through the new
CRM system ( planning by Jan. 2023) and the platform toanalyze and utilize data (planning by Nov. 2022)
Utilize digital technology to improve operational efficiency

Develop digitalprofessional

DX投資促進税制の活用
Apr. 2022

Obtained certification as a “DX certified
business operator” from METI

Reduced annual workload by 140,000 hours for the entire groupthrough the use of RPA and AI-OCR
Develop management resources (human resources) to
support DX strategy
Develop digital professional and enhance IT literacy of all staff(Details in P.34）

Promote strategic digital investment
after receiving special tax exemptions
under the DX investment promotion taxation

28

Basic strategy 1
Group Sales

Market credit investment

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Earnings from market credit investment increased mainly due to increase in fee income
Breakdown of SF loan by loan type
(Average balance in 2Q FY2022: JPY 738.3bn)

Earnings from market credit investment
Income from PE and others
Fee income
Income and expenditure on loans(JPY bn)

6.7
2.1

29%

21%

9.1

+2.3

23%
15%

(JPY-based : Other-currencies-based = 6 : 4)

3.8

Breakdown of SF loan by credit rating+1.1* Excluding real estate non-recourse loan

2.7

0.5

3.0

3.5

CLO balance (As of the end of Sep. 2022)
JPY 96.4bn (24 contracts, JPY 4.0bn on average)
All have AAA rating
Subordination ratio: 35.0% - 41.8%

2%
Well-diversified
portfolio

6.8

1.6

Corporate credit risk (senior)
Corporate credit risk (mezzanine)
Asset finance
Project financeReal estate non-recourse loan
Securitized loan (CLO etc.)

10%

2%
27%

1.2

+0.7

71%

4.0

+0.5

Performing (Equivalent to or higher than single A)
Performing (Lower than single A)
Non-performing or lower

98% are classified as “Performing”
71% are equivalent to or
higher than single A* Average LTV is 59.1% for real estate non-recourse loans

Ratio of capital commitment in PE by investment types
1H
FY2020
Profitability indicators of
SF loan

ROA(Return on Assets)

RORA(Return on Risk-Weighted assets)

1H
FY2021

Infrastructure Others
4%
3%

1H
FY2022

1H
FY2021

1H
FY2022

YoY

1.07%

1.08%

+0.01pt

1.93%

1.84%

-0.09pt

Well-diversified portfolio,same as SF loan
No. of investment : 101(Of which 42 are international)

Debt
29%

Buyout51%

Growth/Start-up
13%

29

Initiatives for Sustainability
Management（Climate Change Response, Human Capital）

Initiatives to realize carbon-neutral society

Basic strategy 1
Group Sales

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Promote support for main businesses and expansion of services lineup in response to issues
through interviews with customers on decarbonization
Interview with customers on decarbonization (Approx. 2,300)

Promoting Sustainable Finance• The number of companies working on this issue has increased to about
half since the time of last year’s hearing.

• Target by FY2030 JPY 2tn ( Finance related to environment JPY 1tn )[Status of decarbonization efforts]
FY 2021
FY 2022

Already started
31%

Not started
34%
Already started
50%

Not started
49%

TargetIn FY2022

Results
In 1H FY2022

Progress rate toannual target

Sustainable Finance

JPY 115.0bn

JPY 163.2bn

141 %Finance related toenvironment

JPY 57.5bn

JPY 83.7bn

145 %[Cumulative amount of sustainable finance executed］
Finance related to environment

Plan to start
20%

215.8

Plan to start
16%

Accelerate decarbonation in the region
by solving customers’ issues
Selected for the “FY2022 ESG Regional Finance Promotion
Project” by the Ministry of the Environment (Jul. 2022)
ESG Regional Finance Promotion Project
A support project by the Ministry of the Environment to promote ESG
finance that contributes to improving regional sustainability and creating
regional circular and ecological sphere.
The project will support the achievement of KPIs set at the time ofsustainable finance execution. In addition, by working to visualize andmeasure the economic ripple effects of the identified impacts, the project willfurther promote and disseminate sustainable finance（JPY bn）

276.5

113.3
81.7
113.7
38.7

54.7

3Q
FY20214Q
FY2021

1Q
FY2022138.4
2Q
FY2022

SDGs Support Guarantee Program• A guarantee program developed in cooperation with the Shizuoka Credit
Guarantee Corporation to support companies engaging in the SDGs.
• Started in April 2022, ahead of other banks

31Basic strategy 1
Group Sales

TCFD Recommendation

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Enhance disclosure and promote initiatives to decarbonize the region
Initiatives related to TCFD Recommendation• Below are the Bank’s responses to 4 recommendations by TCFD
Governance ◼ Established the Environmental Committee (Oct. 2022)

Strategy◼ Conducted interview with customers on decarbonization (second
round, covering about 2,300 companies)◼ Signed Partnership Agreement with SUZUYO SHOJI CO., LTD.
and SHIZUOKA GAS CO., LTD.(Sep. 2022)◼ Funded the Decarbonization Support Organization.(Oct.2022)◼ Establish policy on investment in and loan to specified sectors(Apr.2021)
Risk
management • Do not newly invest in and extend loan to coal fired power
generation in principle◼ Sustainable Finance and finance related to environment• Target on a cumulative basis by FY2030: JPY 2tn (of that, financerelated to environment 1tn)
◼ Investment in and loan to coal fired power generation• Should be zero in or around FY 2040
◼ Joined PCAF (Partnership for Carbon Accounting Financials)(Nov. 2022)◼ Joined GX (Green Transformation) League by METI(Nov. 2022)◼ Target in decrease in GHG emission• Achieve carbon neutrality by FY2030
Indicators and ◼ Results in decrease in GHG emission (t-CO2)
targets
Scope2
Scope1
17,682636

16,160619

516

17,046

14,677FY201814,757FY2019■Transition risk
TargetSectorScenario

MethodAnalysis
ResultManufacture of motor vehicles
and their accessories
IEA net zero by 2050 (NZE2050)
IEA net zero by 2050 (NZE2050)
IEA/ETP 2017 Beyond 2°C
Analyze changes in credit costs based on scenarios, using carbon tax
and other forecast data to project changes in profit/loss and financial
position by 2050
[Increase in credit cost]
Up to approximately JPY14.5bn in total by 2050

■Physical risk
Scope ofcoverage
Scenario

13,981

Method636
14,12913,345

FY2020

FY2021

Paper manufacture (*1)(*1 ) Participate in the Ministry of the Environment's Scenario Analysis Pilot Program Support Project

Compared to FY2013-20.9％

548
15,541FY2013

15,273[Scenario Analysis Results (Credit Risk)]• Conduct analysis of transition risk and physical risk throughparticipation in the Ministry of the Environment's Scenario Analysis Pilot
Program Support Project in FY2021, etc.
• This year, we will conduct a scenario analysis of transition risks inthe automotive and automotive accessory parts manufacturingindustry by manufacturing component and use the results to
support local companies.

Analysis Result

Calculate credit costs related
Calculate building damage costs
to risk of damage for building
and credit costs for mortgage
and business continuity forborrowers in Shizuoka Pref.
SMEs in Shizuoka Pref. (*2)
RCP8.5 in the IPCC WGⅡ AR6 (4°C Scenario)
Analyzes the risk of inundation in the event of flooding by
overlaying business and collateral location information withhazard maps
[Increase in credit cost]
Up to approximately JPY15.5bn by 2050(*1 ) Participate in the Ministry of the Environment's Scenario Analysis Pilot Program Support Project32

Investment in human capital (1) - Change of Business Model
Implemented personnel system reforms with the keywords of “autonomy,” ”change,” and ”diversity” torealize human capital management
Diversity
Introduction of OKR

Autonomy

Challenge

OKR is an evaluation system that is composed of Objective and Key
Results, and is not biased solely toward performance targets.

SectionObjective
Key Result

Key Result

Promote Side-job and Second Business* Autonomy

Challenge

Mercari, Inc. → Shizuoka Bank
Saki Ikeda◼ Project member of personnel syastem reform◼ Engaged in planning new businesses
Shizuoka Bank → Marubeni Corporation

Individual

Kenta Hayashi
O
KR

O
KR

O
KR

◼ Consider regional revitalization throughelectric power businessO
KR*Total users during FY2020 – 1H FY2021: 29

establishment of new career routes Autonomy Challenge◼ Reorganized job group hierarchy into two levels in order toactivate flat communication, clarify roles◼ Established a new career route that allows each individual
to choose a career autonomously
3 levels Single-line
Management

Ordinary
employees

Multiline

Producing job

Performancebased job

ManagerManager

Crew

Crew

Autonomy

Challenge

Call for ideas from employees that contribute to inner andouter innovation◼ No. of applications in FY2021 : 59
◼ Grand Prize
Digital securitization of whiskey casks by using security tokens

Master job

Middlemanagement

2 levelsInternal venture business33

Investment in human capital (2) - develop human resources
Implemented personnel system reforms with the keywords of “autonomy”, “challenge”, and “diversity”
to realize human capital management
Diversity
Developing Next Generation Leaders Autonomy

Challenge

We provide education and develop human capital for the future
External
in a planned manner.
Executive Academy

Form a basis for leadership andfoster a sense of management

Management Academy

Interaction
businessschoolDevelop Leaders to Drive Group
Transformation

Leader's Academy

cross-industrial
interaction

Develop leaders
who can inspire members

Develop digital professional

Challenge◼ External dispatch to digital-related companies◼ Implement educational programs by outside
instructors (Participants in FY2022 Total: 47)

Digital Digital
Professional Coordinators
Promoting DX
in the Group

Promoting DX
in the Region

All Staff
Improve IT literacy andchange corporate culture◼ Implement training sessions for corporate
sales representatives(Participants in End of Nov. 2022 Total: 634)

◼ Implement preparatory courses to obtain
qualification◼ Implement hierarchical training sessions
Information Technology Passport Certificate holders: 849

Support for autonomous career development Autonomy

Challenge

expanding the "My Career Design System," which supports each
executive and employee in designing his or her own career.
（Including Side-job / Second Business）

External Dispatch/Internal
Trainee
Dispatch employees to outsidecompanies and provide them withtraineeships in specialized
departments with the aim to makethem acquire expertise in businesssuccession, financial market,
digitalization, etc.

57
Transfer System Among
Group Companies
Allow each employee to transfer
between group companies
according to his or her career
vision regardless of employment
status.

59

Dispatch to Regional
Companies

Develop human capital throughdispatch of employees who gaina deep understanding of thebusiness challenges faced byregional companies and cancontribute to the development ofour customers by offering
appropriate solutions.

15

Post Challenge /Intra-company side job
Provide employees with “postchallenge”, system to allow them towork at a department of theirchoice, and intra-company side jobthat allows them to work one day a
week in a department of theirchoice while belonging
to their current department.

*Total users during FY2019 – End of Nov. 2022

72
34

Alliance with regional banks

Shizuoka Yamanashi Alliance

Basic strategy 1
Group Sales

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Promptly implemented measures of tie-up, leading to realization of earnings effect significantly exceeding
initial plan
Earnings effect (total of both banks)

Achievement in the field of life-planning

Aim at realizing effect of alliance of JPY 10.0bn or more (total in 5 years
by 2 banks) mainly in market finance (market credit investment etc.) andlife-planning (Shizugin TM Securities etc.)

Business development of Shizugin TM Securities Yamanashi Head Office◼ Open in the building of Head Office of Yamanashi Chuo Bank
(Apr. 2021)◼ Conduct personnel interaction of 16 people in order to further
reinforce tie-up

Progress ratio totarget in 1H FY2022

Realize effect by
1H FY2022
JPY

1.9bn

Targetby FY2025

94％

in 5-year basis

Progress ratio totarget by FY2025

8.1bn

81

JPY

％

Achievement in the field of finance✓ Balance of customer asset:
JPY 23.8bn＜Yamanashi Chuo Bank Head Office Sales Dept.＞[Result by 1H FY2022]◼ Cooperation in the field of market credit investment
Extend real estate non-recourse loans (9 loans, JPY 57.3bn)◼ Jointly arrange syndicated loans (12 loans, JPY19.5bn)
Extend the syndicated loan related toregional revitalization in the Alliance

Execute the Deep Tech Venture
Co-financing through the Debt
Guarantee Program

Capital to build shared second-house（Dec. 2021）
in Yamanashi Pref.

Working capital for upfront investment（Mar. 2022）
in MaaS business＜SANU Original Cabin＞[Result by 1H FY2022]✓ Amounts of sales of customer
asset : JPY 29.5bn＜WHILL
ModelC2＞

Initiatives with involving local community◼ Events for individual business talks for customers:17times◼ Contracts of business matching completed : 82 / Contract Rate12.4％
Result held by 1H FY2022

Total by 2 banks(The Bank)

No. of participation

448

（295）

No. of negotiation

660

（429）

No. of contracts

82

（57）

Contract rate

12.4％

（13.3％）◼ Joint seminars on regional development, including entrepreneurshipand start-up, agribusiness, immigration, two-location residence, and for
local public entities◼ Establish “Shizuoka-Yamanashi Mirai Growth Support Fund”, a fund tosupport business succession jointly invested by the 2 banks（May
36
2022）

Shizuoka Nagoya Alliance

Basic strategy 1
Group Sales

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Since the alliance was formed, KPIs were set by 10 subcommittees, and cooperative measures were promptly
implemented.
Image of the alliance

Earnings effect (total of both banks)◼ Provide group company
functions (securities, M&A,
business succession, etc.)◼ Provide knowledge andexpertise in support of
the automotive industry◼ Provide expertise related tobusiness turnarounds andventure innovation

Aim at realizing effect of alliance of JPY 10.0bn or more (total in 5
years by 2 banks) mainly in market finance (market credit investmentetc.) and the field of corporate (Industrial transformation support andsyndicated loan etc.)
100

Market finance
Field of corporate
Others50◼ Utilize the automotive
supply chain network

0
FY2022Contribute to sustainable growth of local economies
by solving issues of the region and customer
Realization measures

FY2024FY2025

FY2026◼ Results of JPY 2.6bn in 1H FY2022 (JPY 4.7bn in 5-year basis)

Jointly organize various events and develop products＜Initiatives that contribute to supporting＜Collaboration on projects＞
industrial reform＞◼ Organize the automotive supply chain ◼ Jointly organize syndicated loan
◼ Exchange of human resource in the field of
2 case / JPY 6.2bn
corporate revitalization◼ Jointly invest in VC
2022 Aug. ~ Shizuoka Bank → Nagoya Bank 1
2 case / JPY 2.6bn
2022 Sep. ~ Nagoya Bank → Shizuoka Bank 1
Determination ofAlliance Logo and Character

FY2023

Takecho◼ Derived from the childhood name "Takechiyo" of Tokugawa
Ieyasu, a great man of Shizuoka and Aichi.
◼ He has the armor in the motif of Fuji and the golden orca of
Nagoya Castle.

◼ Web seminar “Outlook and Challenges for
China’s Economy after lockdown”◼ Cyber security web seminar◼ Web seminar “Explanation of parts andstructures for EV”◼ Web seminar on Experiencing accumulated
investment trusts
Collaboration at the job officer ceremony
Showed the video introduction theattractions of both regions by broadcasting
both bank’s ceremony

37

Transformation to a Holding Company
Structure
Direction of the first Medium-term
Business PlanHolding Company Structure - Roles
Aim to maximize value for all stakeholders through independence and collaboration among groupcompanies, expansion into new business areas, and a flexible and robust governance structure
Iinformation Technology

Shizugin IT
SolutionManagementConsulting

Shizugin
CreditGuaranty

Shizugin
Management
Consulting
Shizugin Lease

Lease

ExpansionInto
NewBuisinessFields

CreditGuarantees

Shizuoka Bank

Shizugin DC Card
ShizuginSaisonCard

Other Equity-method Affiliates

Shizugin
TM Securities

ShizuokaCapital

Supporttostart-upsandfor businessrestructuring
ShizuginGeneralService
ShizuginMortgageService
ShizuginBuisinessCreate
ShizuginHeartful

ShizuokaBank(Europe)FinancialProductsTrading

CreditCard

Shizuoka Liquidity
Reserve Limited

GroupProductivity
Enhancement

OverseasSubsidiaries

Roles of Group Companies
Holding Company

Subsidiary of Holding Company

Bank’s Subsidiary,etc.

Oversees the Group’s business strategy◼ Strengthen Group Management◼ Allocate management resources in an
optimal manner◼ Co-create value with our stakeholders

Accelerate group-wide growth

Support froup-wide growth◼ Enhance the diversity and expertise of its services◼ Expand its own business fields and customer base

◼ Further strengthen cooperation with banks andgroup companies◼ Expand products and services and improve of
business quality

39Holding Company Structure - GovernanceSophisticated business activities of each company through optimal allocation of management resources
General Meeting of Shareholders
Management oversight
Nomination and Remuneration
Committee
Advisory Board

Audit and Supervisory
Committee

Board of Directors

President & CEO

Committee of
Administrative Supervision

Audit and Supervisory
Committee Office

Execution(Management Meeting)
Human Capital
Environmental
Management
Committee
Committee

Secretarial OfficeBusiness
Development Dept.

Sustainability Committee(Group Executive Committee)

Corporate
Planning Dept.

Committee for Integrated Risk
and Budget Management

Corporate
Administration Dept.

InstructManageThe Shizuoka Bank
(Including banksubsidiaries

Shizugin Management
Consulting

InsideDirectors
1

Board ofDirectors
OutsideDirectors
5(Female 2)

Internal
Audit Division

Compliance
Dept.

Discuss
ReportShizugin Lease

Composition of Board Members
InsideDirectors
5

Risk Management
Dept.

Group Compliance
Committee

Shizuoka Capital

Shizugin TM
Securities

Introduced the Group Chief Officer system

Audit andSupervisory
Committee
OutsideDirectors
3(Female 1)

Chief Executive Officer (CEO)Hisashi Shibata

Chief Financial Officer (CFO)

Hiromitsu Umehara

Chief Information Officer (CIO)

Motoya Suzuki

Chief Risk and Compliance Officer (CRO)

Yasuhiro Ogawa

Chief Internal Audit Officer (CIAO)

Toru Atsumi

40Holding Company Structure - Composition of Directors and Executive Officers
Separate representative directors of holding company and those of bank to clarify the supervision andexecution, letting them concentrate on their own roles
Shizuoka Financial Group

Shizuoka Bank

Directors

Directors
Chairman

Katsunori Nakanishi

President & CEO (Representative Director) Hisashi Shibata

President (Representative Director)

Minoru Yagi

Director & Executive Officer

Minoru Yagi

Yutaka Fukushima

Director & Executive Officer

Yutaka Fukushima

Director & Senior Managing Executive
Officer (Representative Director)
Director

Hisashi Shibata

Outside Director

Kumi Fujisawa

Director & Senior Executive Officer

Toshiyasu Takizawa

Outside Director

Kazutoshi Inano

Audit &Supervisory Board Members

Hiroki Saito

Audit &Supervisory Board Members

Mitsuru Kobayashi

Audit &Supervisory Board Members

Yoshihiro Yamashita

Audit &Supervisory Board Members

Isamu Nakamura

Chairman (Representative Director)

Katsunori Nakanishi

Directors (Audit & Supervisory Committee Member)
Director

Koichi Kiyokawa

Outside Director

Motoshige Itoh

Outside Director

Kazuto Tsubouchi

Outside Director

Naomi Ushio

Executive Officers
Executive Officer (CFO)

Hiromitsu Umehara

Executive Officer (CIO)

Motoya Suzuki

Executive Officer (CRO)

Yasuhiro Ogawa

Executive Officer (CIAO)

Toru Atsumi

Executive Officers (Senior Executive Officers and above)
Senior Managing Executive Officer

Mitsuhide Sugita

Senior Executive Officer

Tokunao Ito

Senior Executive Officer

Hiromitsu Umehara

Senior Executive Officer

Eiji Ishi

Senior Executive Officer

Hideyuki Murayama

Senior Executive Officer

Kazuhiko Taki

41

SFG 1th Medium-term Business Plan(1) - Way of thinking
Establish the “target state”to be achieved in 2030 and formulate the first Mid-term Business Plan to achive
this state
Futuregeneration

regionshareholder

customer

employees

Increase incorporate Value

Value
× Social
Creation

Shizuoka Financial Group

Continuously improving the well-being ofstakeholders by resolving issues and needs of thecommunity and customers

1th Medium-term Business Plan
（FY2023～FY2027）

Present

10-year Vision（2030）

backcast

Corporate Philosophy

Social Impact

Future42

SFG 1th Medium-term Business Plan(2) - Basic strategy
Aim at achieving sustainability indicators that impact society through four basic strategies

Regional-Co-Creation Strategy

Group Business Strategy

Transformation Strategy

Become a vital contributor to regional
co-creation and form a regional platform

Thoroughly resolve local and customer
issues by expanding business areas

Transform the Group through theimplementation of four transformations

Different
industry

Venturefirms

Regional
Company

Local
government

Different
industry
theme： manufacturing

Venturefirms

FGRegional
Company

Local
government

service expansion

FGtheme：Innovation

Challenges in New
Businesses

Touchpoint X

Sales X

Human
capital X

Expense X

Expansion of existing
business areas

Dig deeper into existing
businessCore BusinessDomainMarketDevelopment

Transformation of the way of
thinking

Group Governance Strategy

Achieve sustainability indicators
43

Capital Policy

Shareholder return
Aim at achieving target of “shareholders return ratio of 50% or higher in medium and long term” through constant dividend andflexible share buyback
Increase by
JPY 4
Profit distribution to shareholders
Annual dividend (JPY bn)
Share buybacks (JPY bn)
Increase by JPY 1 Increase by JPY 1

20.0

21.0

13.0

12.5

12.2

22.0

Increase by JPY 3

Increase by JPY 1

26.0

25.0

22.0

16.9

14.7

14.4

12.6

30.0

8.5

9.7

10.1

8.6

8.8

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022…

Dividend payout ratio

41.5%

24.9%

27.6%

32.6%

32.8%

35.4%

31.3%

Shareholder return ratio

70.6%

44.3%

49.1%

54.9%

32.8%

56.2%

31.3%

Profit attributable toowners of the parent

JPY
29.3bnJPY
50.1bnJPY
46.9bnJPY
38.7bnJPY
43.6bnJPY
41.6bnJPY
54.0bn(JPY)

EPS/BPS Trends（Consolidated）
100
90
80
70
60
50
40
30
20
10
0

1,925.98

EPS（Earnings Per Share）
BPS（Book value Per Share）

2,000
1,500

632.18

73.27

1,000
500

20.84
FY
1998

FY
2001

FY
2004

FY
2007

FY
2010

FY
2013

FY
2016

FY
2019

FY
2021

0

45

Strategic shareholdings
Make it a rule to reduce strategic shareholdings, and select stocks to sell and continuously sell shares in every
fiscal year
Acquisition cost of strategic shareholdings*1[Results of sales](JPY bn)
No. of companies whose shares the Bank holds(JPY bn)
287

106.0

285

277

104.5

103.1

275

Further reduction

8.9

1.6

7.3

FY2021

4.2

1.5

2.7

1H FY2022

10.8

1.9

8.8

total

23.9

5.0

18.8

102.8

Business Investment andcontribution to regional economy

92.8

91.7

91.4
Strengthening ofbusiness relationships

End ofMar. 2020

End ofMar. 2021

End ofMar. 2022

Profit (loss)
Acquisition on sales*2
cost basis

FY2020*2

94.5

Amountof salesEnd ofSep. 2022*1 Excluding shares of group companies and equity method affiliate

Excluding amortization[The amount agreed to sell](28 companies)
Estimated
Valuation
Acquisition profit andsalecost basis
loss(JPY bn) amountEnd of Sep.
2022

Future target

37.7

11.5

＋26.2

Profits from the sale of strategic shareholdings will be used
for investment in systems and human resources, venturedevelopment, and optimization of the securities portfolio.
46

Reference(ESG/SDGs)

Initiatives for ESG

Environment

SocialRaise up reduction target of decrease in GHG emission(aim at achieving carbon neutrality in FY 2030)

2022/4

Conduct scenario analysis (transition risk and physical risk) through projects supportedby the Ministry of the Environment, etc.

By 2022/2

Establish target on Sustainable Finance (JPY 2tn in total by FY2030)
Results in 1H FY2022 : JPY 163.2bn (Progress rate to annual target: 141%)2021/10

Conduct interviews to regional companies on decarbonization

2022/9Establish Industrial Transformation Support Project Team

2022/4Sign Japan Impact-driven Financing Initiative

2021/11

Join The Valuable 500 *

2021/2

Has held TECH BEAT Shizuoka

Since 2018

* An international initiative aimed at promoting disability inclusion in businessGovernance

Disclose Board of Directors Skills Matrix, field where each member is expected to play animportant role

2021/12

Transition to holding company structure (Adopted the structure of a company with anaudit committee)

2022/10Introduced the Group Chief Officer system

2022/1048

Realizing Sustainability Management
Priority issues to be addressed(Materiality)

Related SDGs

Main initiatives in the 14th Medium-term
Business Plan
Basic Strategy 1●Revitalizing the regional
economy●Population decline, low birth rate
and population among

Social●Shortage of successors to smalland medium-sized enterprises●Digitalization●Diversity●Maintaining the regional financial
infrastructure

Environment

Governance■Respond to diverse customer needs through the financial
functions of the Shizuoka Bank Group■Support for business succession and asset succession■Provide services based on the concept of financial Gerontology■Review branch functions in response to customer needs
Basic Strategy 2■Device-free financial services■Technological innovation through investment in venture companies
Basic Strategy 3■Diverse working styles, participation and advancement of
women, diversified human resources, respect for human rights
10-year Strategy■Returning of networks with startup companies to the region■Enhance regional attractiveness by utilizing regional platforms●Global warming■Promotion of environmentally friendly financial services■ESG investment and utilization of green bonds■Response to climate change●Corporate governance●Corporate ethics and compliance■Advanced corporate governance■Strengthened measures against money laundering●Increased climate change risk

49

ESG/SDGs (1) – Diversity
Promote women empowerment, employment of people with disabilities, and so on, to encourage all employees to demonstrate
their personality and abilities to the full extent from a viewpoint of diversity
Make efforts to provide employees-friendly working environment and to support employees’ health promotion

Women Empowerment

Initiatives for Diversity
PeriodContents

Aug. 2019

Launch "Workstyle Innovation" initiatives, including review of dress code andpaid vacation, with the aim of changing to an autonomous working style

Apr. 2021

Launch "Work Style Innovation 2.0" by expanding existing initiatives such as
introduction of flextime system

Formulate action plan in accordance with Women’s Advancement Promotion Law
34.8%
Result as of Ratio of female employees
Mar. 2022 Ratio of female employees in managing position 17.9%
Mar. 2024

Ratio of female employees
35% or higher
Ratio of female employees in managing position 22% or higher

Apr. 2020

Employ people belonging to sports club and cultural activity
group（10 in total by FY2022）

Apr. 2021

Resumption of High School Graduate Recruitment(Total of 10 in FY2021 and FY2022）

Ratio of female employees
40% or higher
Mar. 2031 Ratio of female employees in managing position 40% or higher

Oct. 2019

Establish a new company “Shizugin Heartful” in order to actively support
independence and participation to the society by people with disabilities, and to further
promote employment of those people• Appoint a female as Executive Officer at the Bank for the first timein Apr. 2022
• Appoint a female as President at Shizugin Heartful in Jun. 2022

Feb. 2021

The first regional bank in Japan to join “The Valuable 500”, an initiative
which works on promoting success of people with disabilities• Besides, there are 6 female executives in 4 Group companies (*)

Jun. 2021

Employ a para-athlete of wheelchair rugby player

Mar. 2021

Endorse the "100% Paternity Leave Declaration”

Apr. 2022

Receive "Fujinokuni Family Education Support Promotion
Company" award for efforts to encourage male to participate
in childcare (paternity leave utilization rate: 100% in FY2021)

Recognized as “2022 Certificated Health &Productivity Management Organization”• The Shizuoka Bank and Shizugin IT Solution were recognized
as “the 2022 Certified Health and Productivity Management
Organization (large enterprise category) ” in Mar. 2022 forvarious initiatives to maintain and enhance employees’
health, such as creating favorable environment andsupporting employees’ own activities* Shizugin General Service (1 Director & Executive Officer), Shizugin Mortgage Service(1 Director & Executive Officer and 2 Executive Officer), Shizugin Business
Create (1 Executive Officer), Shizugin Heartful (1 Executive Officer)• Strengthen initiatives for women empowerment in the Group, acquiring multiple
certification
ShizuokaBank“Platina Kurumin”○○

Shizugin IT
Shizugin
Solution Mortgage Service

○

○

○

〇

○

“Platina Eruboshi”“Eruboshi” (3 stars)

Shizugin
Shizugin TM
Business Create Securities○〇

Kurumin: Certify companies which support child raising
Eruboshi: Certify companies which conduct excellent initiatives related to women empowerment(Companies have to meet higher criteria to acquire certification with “Platina” for the both above)50

ESG/SDGs (2) –Contribute to the region
Engage in various regional contribution activities to put into practice the Philosophy " expand dreams andaffluence with our community"
Actively work on disaster prevention and mitigation in a situation where Nankai Trough Earthquake is likely to occur

Promotion of local culture and sports⚫

⚫

Regularly hold concerts by domestic and foreign first-class artists and events of
Rakugo, Japanese traditional storytelling performance,for people in the region

Facilitate promotion of children sports by supporting tournaments of soccer andbaseball for boys and girls

Business continuity in emergency• Create outline of measures against emergency as a business continuity plan
• Establish a system where the Bank can instantly
resume operation in emergency by introducing baseisolation, installing standby generators, and preparing
back-up of systems• Build a system to support people in the regionin[Equipment for videoconference
emergency by utilizing a special room in the(in a special room for emergency)]
headquarters

Agreement with NTT DOCOMO on service
offering during a disaster• Arrange battery chargers for mobile phones
which can be used during a disasterin some branches and headquarters• Use the Bank’s headquarters as a site of NTT DOCOMO during a disaster

Measures against tsunami
Education of finance and economy
Actively work on education of finance and economy by providing people
with opportunity to learn banks’ role in economy and society throughstudy tour in the Bank and lecture by the Bank’s staff⚫ Hold Shizuoka-Prefectural tournament of “Economics
Koshien”, a competition on economic and financial
knowledge by high school students⚫

⚫

Hold a program where high school students,
enterprise managers, and the Bank’s staff
seek attractiveness of Shizuoka as part ofactivity to develop human resources in the community• Deploy life jackets for customers and employees in branches in areas where
people should immediately evacuate when tsunami occurs• Prepare shelters against tsunami which work by floating in branches in areas
where altitude is not high enough• Take measures against tsunami when reconstructing branches on the coast➢ Structure to prevent collapse by tsunami,
rooftop higher than expected height of tsunami➢ Outdoor upstairs to rooftop[Life jackets][Outdoor upstairs to rooftop]51

ESG/SDGs (3) – Region-based Relationship Banking
Provide support from various perspectives depending on the growth stage of customers
Support for business restructuring and turn-around⚫

No of firms under the projects
No of projects completed
58⚫

Support for entrepreneurship and new businesses

Support restructuring through building business plans, alliances with external
agencies, and utilizing business regeneration fund54

57

（Cases）
59

58

15

13

12

12

14

FY2017FY2018FY2019FY2020

FY202155

7
1H
FY2022

Has completed businessrestructuring for about 290 firms
since FY2005

Requiring
10%

Performing
17%

Non-performing73%

End of Mar. 2022

Revenue + JPY 6.0bn

Saves labor opportunities
for opportunities for laborfor about 27,000 people
and maintain economic powerin the local community

Credit ratings of customers supported by the Business Support Division in relation to
Covid-19 have turned to increase for performing customers and remained unchanged
for those requiring attention or lower.

[Credit rating] attention or lower<Shizugin Entrepreneur Awards>• Holding the event in order to expand employment and to activate economy in the region
through support for foundation and new businesses• Held 8 rounds in total so far, resulting in 1,149 applicants, 59 winners• Achieved following results compared to the point of winning
through continued support to winners in the past rounds,
contributing to development of local economy

Requiringattention or lower
10%

Performing
20%

Non-performing70%

End of Sep. 2022

Collaboration on non-competitive fields with other financial
institutions within Shizuoka Pref.

No. of employees + 433“Shizuginship” – training club for the next generation managers••

Membership-based service which aims at enhancing ability of next-generation businessleaders and contributing to development of the corporations and economy in Shizuoka Pref.
Expanded collaboration with a similar club offered by Yamanashi Chuo Bank

【Structure of Shizuginship】【No. of members】 At the end of Sep. 2022 / 692 corporates, 1,024 people【No. of participants in activities in FY2022】 Total 395people

The Bank• Various
events andseminars• Providing
information
on Internet

Collaboration

Advisory board〔Leading companies in Shizuoka Pref.〕

Requests&
opinions

Support companies
Support for
activities

Electedamong
members⚫

Established the Industrial Transformation Support Project Team in April 2022 to strengthen
the business support system that contributes to sustainable growth of local industries.

Shizuginship members⚫

Gathering information, researching and analyzing the automotive supply chain to create a
supply chain tree diagram.

Yamanashi Chu-gin Keieisha Club members

Strong appreciationand support fromlocal corporates• Growth of nextgeneration
business leaders• Human network
among members＋ Collaborate52

ESG/SDGs (4) – Regional revitalization
Promote regional industry development by working as a coordinator among industry, government, academia and etc.,
and contributing to embodying businesses which help the development of the region
Shizuoka Kids Academy

Launched a three-bank collaboration program

Aim at developing human resources for regional areas by encouraging local children
to learn about their home towns in a fun way, fostering a greater attachment to theirhome towns and encouraging them to live locally in the future⚫

＜Activities in FY2022>
PeriodLaunch a common preferential service based on the "Agreement on Cooperation
for Tourism Promotion in Fuji, Hakone and Izu Areas" concluded with Yokohama
and Yamanashi Chuo Bank, Ltd.
Offer preferential services to customers who present their cash cards issued byeach of the three banks at 24 participating facilities in Shizuoka, Kanagawa andYamanashi Pref⚫

⚫

Details of the event

No. ofParticipants

May,Aug. @Okushizu Agricultural Experience
Jun.
@Inatori OmotenashiExperience, etc.
@Miho Aquaculture Experience
Sep.
With Agricultural production

37
44
43
130

◼
◼
◼

Started in Jul. 2022
Seven facilities in Shizuoka Pref.
participate
Aim to promote tourism in the wider
regionEvents for individual business talks

Shizugin Idea Competition “Joint LAB.”⚫

⚫

Aim at creating new businesses that will lead to the sustainable regional
communities through collaboration among local businesses and organizations
and the Bank⚫

Held event for business talks to attract suppliers hoping to start business with grocery
store and pharmacy in both Shizuoka and Yamanashi Pref. in order to expand businessand to activate interaction between the two prefectures as part of Shizuoka Yamanashi
Alliance[Results (Jan. 2021- Sep. 2022)]

Held the 1st round in FY2019, attracting 43
applications and resulting in ties-up with 3
applicants in Aug. 2020◼

◼
◼

The themes of the 2nd round are“Sustainability” and “Diversity & Inclusion”
Number of Applications: 67
The partner will be selected in Nov. 2022 after
the first and second round of selection, andpresentation.

Shizuoka
Bank

Total

Yamanashi
Chuo Bank

No. of events

20

-

-

No. of application

690

480

210

No. of participants

498

320

178

No. of business talks

705

465

240

*Includes projects not related to Yamanashi Chuo Bank53

ESG/SDGs (5) – Corporate Governance Structure(Board of Directors Skills Matrix)
Board of Directors supervises business execution of the Group with diversified expertise[Board of Directors Skills Matrix (Fields where each member is expected to play important role)]
Management
Name

Position

Katsunori Nakanishi

Chairman(Representative Director)

Hisashi Shibata

Society, Economy

Business

Supervision ofmanagement as slisting company

Leading acomprehensive
financial group

Vision for regional
businesses
Response to social Function for financial New
society and(development,changeintermediation
economycomposition)

●

●

●

●

President & CEO(Representative Director)

●

●

●

Minoru Yagi

Derector●●●

Yutaka Fukushima

Director●●

Koichi Kiyokawa

Derector(Audit & Supervisory
Committee Member)●●

Kumi Fujisawa

Outside Director●

Kazutoshi Inano

Outside Director●

Motoshige Itoh

Outside Director(Audit &Supervisory Committee Member)●●
Environment

Kazuto Tsubouchi

Outside Director(Audit &Supervisory Committee Member)●●

Naomi Ushio

Outside Auditor(Audit &Supervisory Committee Member)

●

●

●

●
Innovation

●

●

●

IT

●

●

●

●

Diversity54

Initiatives to decrease GHG emission (“Shizuoka Green Electricity”, “Shizugin Solar Park”)
Conclude contract to purchase “Shizuoka Green Electricity” and agreement on the “Shizugin Solar
Park” with Chubu Electric Power Group[Shizuoka Green electricity (effect to reduce GHG emissions by approx. 1,800 tons (down 10%))]* Service by Chubu Electric Power Group to provide electricity with no CO2 emission produced in Shizuoka Pref. by utilizing reusable energy
such as that from hydroelectric power plant along rivers within the Pref

Hydroelectric power plants
owned by Chubu ElectricPower Group (extract)
Hatanagi Daiichi Plant

Reusable energy
produced in the Pref.

“Shizuoka Green Electricity”
Chubu Electric Power Miraiz Co.,

Expense of power

Electricity fees

★Shiba River★
★ Fuji River★
★ ★★ River★
Keta★River ★ Abe River★

Misakubo River

Ikawa Plant
Tenryu River

SumataRiver Warashina

Oi River[Shizugin Solar Park (effect to reduce GHG emissions by approx. 1,100 tons (down 6%))]* Purchase renewable energy in bulk from a mega solar power plant to be built by Chubu Electric Power Group(Scheduled to begin operation in Sep. 2023)
Mega solar power plant to beconstructed by Chubu ElectricPower Group (Miho)

Electricity withenvironmental value-added

Reusable energy

Expense of power

Chubu Electric Power Miraiz Co.,Electricity fees55

ReferenceEconomy in Shizuoka Prefecture – Economic scale
The Prefecture accounts for 3% share of all-Japan, and ranks 10th in the scale of economy among prefectures
The Prefecture has greater GDP than total GDP of 4 prefectures in Shikoku and 3 prefectures in Hokuriku
GDP in the Prefecture is next to those in Hungary and Kuwait

Shizuoka Prefecture indices

Shizuoka Prefecture economic scale
Share of all-Japan

National ranking

Prefectural GDP (FY2018, Nominal)
Rank

Prefecture/Region(USD bn)

9

Hokkaido Prefecture

177.2

10

Shizuoka Prefecture

157.5

10th of 47 (FY2018)11

Ibaraki Prefecture

126.6

―

4th of 47 (FY2018)-

4 prefectures in
Shikoku

130.2

190K

3.0%

10th of 47 (2019)-

3 prefectures in
Hokuriku

117.7

Amount of shipments ofmanufactured goods, etc.

JPY 17.2tn

5.3%

3rd of 47 (2019)

Agricultural output

JPY 188.7bn

2.1%

Fishery production volume

240k tons

No. of industrial locations
No. of new housing starts

Population

2.9%

10th of 47 (2021)

1.62mil

2.7%

10th of 47 (2022)

Nominal prefectural GDP

JPY 17.5tn

3.1%

Per-capita income

JPY 3.432mil

No. of businessestablishments

No. of households

3.63mil

GDP comparison with countries (2018)
Rank

Country (Region)(USD bn)

19th of 47 (2020)

55

Kazakhstan

179.3

7.6%

3th of 47 (2021)

56

Algeria

175.4

49

5.7%

4rd of 47 (2021)

57

Hungary

160.6

21K

2.5%

10th of 47 (2021)-

Shizuoka Prefecture

157.5

58

Kuwait138.2

59

Ukraine130.9*Sources: Economic and Social Research Institute (ESRI)
Cabinet Office , Government of Japan etc.

57

Attractiveness of Shizuoka Pref. (1) – Nature, Sightseeing
•
•

•
•
•

Position as distribution hub between Tokyo and Nagoya/Osaka
More convenient in transportation in north-south direction due toopen of Chubu Odan Expressway
Own rich nature such as Mt. Fuji, South Alps, and Lake Hamana
One of the best Japanese sightseeing spots with nature
Rank high in survey of place to hope to relocate in Japan

South Alps
Certified as UNESCO
Eco Park (Jun. 2014)● SHIZUOKA BANK
Shin-Tomei Expressway

2021

2nd

3rd

1st

1st

Source: Research by NPO “Center for Support to
Return to Hometown”

Lake Hamana

・ 10th largest lake in Japan・ Famous for marine sports and farming of eels andyoung sardines

The Port of Shimizu

Suruga Bay

Ranking of place to hope to relocate
2020

The Port ofTagonoura

Opened to trafficin Aug. 2021

Ranking of prefectures to hope to relocate
Top in 2021 survey
Popular to all generation
2019

Mt. Fuji

Chubu Odan Expressway

Promote relocation and settlement

2018

Yamanashi Pref.

The Port of Yaizu

Tomei
Expressway

Lake Hamana

Mt. Fuji Shizuoka Airport
The Port ofOmaezaki

UNESCO World Heritage Site in Shizuoka Prefecture

Mt. FujiIzu Peninsula

Nirayama Reverberatory Furnaces(Registered in Jun. 2013)(Registered in Jul. 2015)
Inscribed on the World Heritage List as Inscribed on the World Heritage List as“Fujisan, sacred place and source“Sites of Japan’s Meiji Industrial Revolution:of artistic inspiration”
Iron and Steel, Shipbuilding and Coal Mining”

Izu Peninsula awarded Global
Geopark status by UNESCO• The Izu Peninsula was certified as a UNESCO
Global Geopark in Apr. 2018
• Global Geoparks are natural parks of
topographical and geological significance.
There are nine UNESCO Geoparks in Japan

Source: Website of public interest incorporated foundation“Bureau of Tourism in Hamamatsu and Lake Hamana”

58

Attractiveness of Shizuoka Pref. (2) – Industry, Economy• Leading “Manufacturing Prefecture” in Japan- Well-balanced industrial structure with transportation machine,
medicines and medical devices, music instrument, etc.
●SHIBAURA MACHINE• Medical health industry agglomerates mainly in eastern part of the Pre.
● STAR MICRONICS• Various advanced industry agglomerates in the whole Pref.
● HAMAMATSU PHOTONICS● YAMAHA• Rank high in no. of industrial location every year
● SUZUKI ● YAMAHA MOTOR

Industrial structure

No. of industrial location

・Amount of shipments of manufactured goods etc.
: JPY 17,154.0bn 3rd largest in Japan (2019)

Rank high in Japan every year

Transportation
Machine25%

Others30%

Listed companies with headquarters
within the Pref.
※As of the end of Mar. 2022

FY

2017

2018

2019

2020

2021

No.

97

67

78

54

49

TSE Prime

20

2nd

3rd

4rd

TSE Standard

30

TSE Growth

1

Total

51

Ranking

1st

4th

Listing

Source: Survey on industrial statistics by METI

No. of companies

Medical health industry
Production amount of medicines and medical
devices: approx. JPY 1.2tn→ Top for 11 consecutive years (2020年)

Pulp, Paper
5%

Beverage,
Tobacco, Feed
6%

Food
8%

Electronic
Chemical Machine
15%
Industry
11%

Source: Survey on industrial statistics by METI

Category

Production amount(JPY bn)

Medicines

839.6

3rd

Medical devices

365.4

1st

Total

1,205.0

1stRanking

Source: “Statistics of Production by PharmaceuticalIndustry” by MHLW and Pharmaceutical Affairs Officein Shizuoka Pref.

Agglomeration of advanced industry
Next generation cars, Light quantum technology
Marine biotechnology, and Cellulose nanofiber(CNF) etc.

Source: website of center for next generation cars Hamamatsu

59

Historical data of loans and deposits
Total Loan and Deposit balance (average balance) has maintained increasing trend both inside andoutside Shizuoka pref. since FY2004, and the Bank has received highest level of credit ratings
Total loan balance (average balance)

Share of loans in Shizuoka Prefecture (*)(JPY bn)

Portion in Shizuoka Pref.

8,740.1

5,016.3

3,411.8

5,791.3

6,325.6

7,011.5

9,382.1 9,724.8

30.5+4,708.5

3,858.5 4,276.6

4,576.6 4,739.7

34.2

32.3

7,694.2

5,006.3 5,179.7 5,202.2(%)

Shizuoka Bank

29.2

12.4

11.3

36.8

36.4

28.9

27.9

34.8

27.2

36.8

35.9

36.4

27.7

28.6

29.4

11.3

10.9

Shinkin banks
8.7

8.3

8.8

9.1

+1,7790.4

Mega banks
FY2004

FY2007FY2010FY2013

FY2016FY2019FY2021

2Q
FY2022

Deposit balance (average balance)(JPY bn)

6,678.6 6,759.2

7,615.6

9,049.1

FY2007

11,228.3 11,417.1
9,914.0

FY2019FY2020

FY2021＜Moody’s＞

Shizuoka Bank

A3

8,613.4

9,643.4 9,842.9

Regional banks
Except for regional banks (Mega banks, Trust banks etc.)＜Other external ratings＞+4,268.3

S&P
FY2010FY2016A2

7,045.1 7,692.1
5,574.6 5,834.3 6,407.9

FY2007FY2013A1+4,738.5

FY2004FY2010(*) Changing calculation method, and applying the new method to the past as wellExternal ratings (As of the end of Sep. 2022)

Portion in Shizuoka Pref.

8,408.6

FY2004FY2013

FY2016FY2019FY2021

2Q
FY2022

A-

R&I

AA-

60

Loans – Loans by industries
Expected Loss (EL) for all industries : JPY 12.4bn
Unexpected Loss (UL) for all industries : JPY 92.5bn
Contemporary status of business loans to particular industries[ Credit balance (as of the end of Sep. 2022) ]Balance[ Credit balance vs. expected loss rate* ](JPY bn, %)(JPY bn)

Composition Change from theratio
end of Sep. ’21

6,635.3

100.0+429.6

Real estate (*1)

941.6

14.1

+70.4

Transportation
machinery

534.3

8.0

+26.9

Wholesaler (*2)

444.8

6.7

+41.2

Leasing

395.7

5.9

+21.0

Money lending
and investment

328.9

4.9

+8.2

950

Real estate

850
750
650

Credit balance

All industries

Transportation
machinery

550
450

Leasing

282.0

4.2

-6.1

Construction

279.8

4.2

+10.4

Accommodation

89.2

1.3

-0.7

Wholesaler

Money lending andinvestment
Retailing350

Retailer

Excluding borrowers classified as “practically bankrupt” and below

250

Construction

150
Accommodation
50(*1) excluding apartment loans and loans for asset building(*2) excluding a general trading companies

0

0.4

(%)

0.8

*Expected loss (EL) amount / Credit balance61

Operation process reform
Aim to enhance productivity and to build new sales structure by promoting BPR, RPA, and sales structure reform
FY2005 - FY2010

FY2011 - FY2016

9th Medium-term Business Plan -Management
policyMajor process
reform

FY2017 - FY2019

FY2020 -10th Medium-term Business Plan

11th Medium-term Business Plan 12th Medium-term Business Plan

13th Medium-term Business Plan

14th Medium-term Business Plan

Standardization, centralization,systematization of
back-office workload

Enhancement of productivity offront-office workload
Establishment of new work style

3 structural reforms
Continuation of growth strategy

Reform of business modelWork-style reform ・Change of personnel
in charge of business

Digitaltransformation

Reinforcement of
housing loans
sales

Relocation of staff at backoffice to front-office
Small branch specializing in retail

Improvement ofefficiency and Branch specializing in front function
productivity

Branch focusing on consulting

Realization and expansion of “digital branch”
Sales structure reform
Utilization and expansion of RPA

Centralization and Auto-navigation in loan operation Auto-navigation in branch operation
specialization of
Writing-less・seal-lessoperation

Digitalization in branch operation
Shift to “5 less” at branches**Paperless, Seal-less, Cashless, Counter-terminal-less, Counter-lessMajor achievement so far
Increased frontRelocation of staff
Back-office workload Reduced byat back-office toofficeemployees
at branches
57%
front-officewhile reducing total employees

Expand businessas well as enhance
productivity(Comparison between FY2007 and FY2010)(people)Time to process
workload on
housing loans

End ofMar. 2008

End ofMar. 2020

Increase/
DecreasReduced by
63%

Front-office
at branches

2,411

2,802

+391

Back-office
at branches

1,693

853

-840

(Comparison between FY2010 and FY2013)

ShizuokaBank*

5,164

4,629

-535 * Including temporary employees

Compared to FY2004
Average balanceof loanx 1.9

Consolidated
ordinary profit

x 1.2(FY2021)(FY2021)62

Branch Strategy
Provide high-quality financial services in the unit of Area through sales structure reforms, further
enhancing customers' convenience and satisfaction, and conduct a review of ATM network
Sales Structure Reform (FY2018-)[Traditionally][Achievements]

Area

Branch withfull banking
function

All branches provide
full banking function[After Sales Structure Reform]

Result by FY2021 Prospects for FY2022

Areas where the reform
was conducted

Approx. 90%

Approx. 90%

Branches decreased-21 branches-2 branches

Review of branch function

37 branches

2 branch

Branch closing at noon

33 branches

2 branch

No. of staff secured

256 staff
JPY -1.9bn

15 staff
JPY -0.1bn

Branch-managing cost
reducedArea
Relocation of stores to public facilities/ Review on ATM network
Merge
Integrate
consumer loanbusiness
Life Design Station

Branch withfull banking
function

Integrate
personnel
Branch withspecific function

Provide full banking functionin the unit of Area

• Relocated and opened the Asaba Branch in the Asaba Shopping Town
“PADDY”. Continue to exist with lighter branch functions and maintain a
network of locations. (Nov. 2022)• Form appropriate ATM network based on situation of utilization[Historical data of no. of ATMs (both inside and outside branches)]-234 (-24%)
Reduction Effect～～

JPY - 0.4bn（total until Mar.202）

958
End of Mar. 2017

765

724

End of Mar. 2022

End of Mar. 2023
(prospects)

63Policy to build and use system infrastructure
Promote the transformation of sales styles and work methods through the use of digital technology, with theaim of providing high value-added services to customers. Develop a system infrastructure to support therealization of the strategies of the New Medium-Term Business Plan
14th Medium-term Business Plan (since Apr. 2020)
FY2022

until FY2021

2nd phase of mobile app(Started in Jun. 2022)

Improvecustomerconvenience

Next Plan (since Apr. 2023)
FY2023

FY2024

3rd phase of mobile app

1st phase of portal website for corporate
customers (Started in Sep. 2022)

FY2025Functional expansion of mobile app
3rd phase of theportal website

2nd phase of the portal website

3rd phase of Contact Center

Functional expansion of theportal website

Functional expansion of Contact CenterMy page, Home page, Digital Marketing
Digital branches and self-service terminals

Build platform to analyze and utilize data(planning by Nov.2022)

Improve qualityof Sales activities

Functional expansion of platform to analyze and utilize data

Renew Informational System(until Jan.2024)
Build new system to assist sales (until Jan.2023)
Reform system to assist loans (until Jan.2023)
Reform system of branches

Improve operational
efficiency and create
an attractive work
environment

Consolidate terminals and realize location-freeConstruct groupware (in-house intranet)
Integrate group company OA (common infrastructure)

Upgrade platform
sophisticationand stable
operation

Develop Front Service Base to add API function (until Nov.2022)

Digital Platform

Group Cloud（Migrate business system and expand infrastructure）
Renew Batch System (until May 2024)

Renew account system

Support for various systems (electronic exchange(until Nov.2022) , COTRA PJ, Support for new banknotes, my number, etc.)64Allocation of risk capital
Risk capital
allocated

Allocation source

Credit risk
296.0

(JPY bn)

Core capital
JPY 746.0bn

Market risk
333.3

(End of Sep. 2022 basis)

Strategic
investments
12.0
Operational risk
24.2
Buffer capital, etc.
80.5

Risk capitalused

Ratio of risk
capital used

Loan (Credit risk)

211.3

125.6

59%

Treasury division

406.1

167.0

41%

(strategic shareholdings)(111.5)(47.8)(42%)

Consolidated subsidiaries

11.9

6.7

56%

Strategic investments

12.0

4.9

40%

Operational risk

24.2

24.2

100%

Sub total

665.6

328.4

49%

Buffer capital, etc.

80.5

－

－

Total

746.0

－

－

・Core capital = CET1(excluding valuation difference on available-for-sale securities) ＜Fully-loaded basis＞
・Risk capital amount = <Market risk> │VaR│<Credit risk>(1)│UL│ (loan balance includes bad debt written off, CVAs)(2) Basel III capital requirement amount (designated loan claims, securitization transactions, investment funds, and private placement REIT)<Operational risk> Amount equivalent to operational risk
・Buffer capital is kept aside for emergencies such as the anticipated Great Earthquake and other unquantifiable risks

65

Group companies
In 1H FY2022, the total ordinary profit of 13 consolidated subsidiaries was JPY 4.9bn(down JPY 0.2bn YoY)
(JPY bn)

Business

Company name

1H FY2022
Ordinary
ProfitYoY change

Shizugin Management Consulting Co., Ltd.

Corporate and financial management advisory services
Bill collection services

0.2

-0.1

Shizugin Lease Co., Ltd.

Leasing

0.8-0.1

Shizugin IT Solution Co., Ltd.

Computer system development and operation

0.2

+0.0

Shizugin Credit Guaranty Co., Ltd.

Guarantee of housing loans, etc.

2.1

+0.1

Shizugin DC Card Co., Ltd

Credit card and guarantee of consumer loans

0.4

+0.0

Shizuoka Capital Co., Ltd.

Public-offering assistance
Support for corporate rehabilitation

0.2

+0.0

Shizugin TM Securities Co., Ltd.

Securities

1.0

-0.2

Shizuoka Bank (Europe) S.A.

Finance and securities-related services

-0.1

-0.0

Shizuoka Liquidity Reserve Ltd.

Purchases of monetary receivables

0.1

+0.1

Shizugin General Service Co., Ltd.

Fee-based job placement service, general administration

0.0

-0.0

Shizugin Mortgage Service Co., Ltd.

Appraisal of real estate for loan collateral
Operation center for loans

0.0

+0.0

Shizugin Business Create Co., Ltd.

Operation center for remittance and bill collection
Part-time employee management

0.0

+0.0

Shizugin Heartful Co., Ltd.

Making, printing and binding of documents

-0.0

-0.0

4.9

-0.2

Total(13 companies)(Ref.) Affiliates under equity method of accounting
Shizugin Saison Card Co., Ltd.

Credit card, prepaid card, and guarantee of consumer loans

0.1

+0.1

Monex Group, Inc.

Holding stocks of companies practicing securities and so on

* 2.1

-16.2

*Profit before income tax

66

Shareholder return – Share buybacks (Time series data)
210 million shares (26.1% of shares outstanding before the initial retirement in 1997) have been retired by FY2021
Sharesbought back(thousand shares)

FY1997
FY1998FY1999FY2000FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008FY2009FY2010FY2011FY2012FY2013
FY2014FY2015FY2016FY2017FY2018FY2019FY2020
FY2021

Total

7,226
6,633
8,357
24,954
8,234
29,928
10,712－－－
10,000－5,000
20,00020,00010,00020,00010,000
4,767
10,00010,00010,00010,000―10,000245,811

Repurchaseamount ofsharesNumber ofshares cancelled

9,997
9,142
9,143
23,281
8,267
23,107
8,566－－－
12,621－
3,996
14,98014,575
8,239
22,642
11,315
6,999
8,496
9,736
10,069
8,623
―
8,759
232,557

7,226
6,633
8,357
24,9548,234－
30,000－－－10,000－5,000
20,000－20,000－－－20,000－30,00010,00010,000―210,404(JPY mil)(thousand shares)

Cancellation
amount(JPY mil)

9,997
9,142
9,143
23,281
8,267－
23,381－－－
10,130－
4,638
15,957－
14,953－－－
20,578－30,530
10,1399,619―
199,758

Shareholder
return ratio<Nonconsolidated><Nonconsolidated><Nonconsolidated>(%) (*)

(Yen)

(Yen)

(Yen)

<Consolidated>

－
84.1
52.6
150.3
170.5
222.1
50.2
16.9
21.4
24.3
62.6
69.7
39.8
65.7
63.0
31.5
69.3
42.4
40.2
70.6
44.3
49.1
54.9
32.9
56.2
－

EPS

20.4
20.1
34.1
23.7
10.3
16.6
37.2
49.4
44.2
51.2
49.9
18.3
46.0
51.8
52.4
62.8
67.8
68.5
71.4
40.0
72.5
72.1
58.1
61.8
63.6
－

BPS

587.6
627.6
651.0
792.2
742.7
721.3
831.8
875.9
1,019.2
1,077.9
997.2
903.3
998.2
1,016.3
1,097.6
1,204.3
1,257.6
1,440.7
1,436.5
1,470.1
1,579.0
1,638.2
1,620.3
1,792.2
1,781.1
－

DPS

6.0
6.0
6.0
6.0
6.0
7.0
7.0
8.5
10.0
13.0
13.0
13.0
13.0
13.0
13.5
15.0
15.5
16.0
20.0
20.0
21.0
22.0
22.0
25.0
26.0
－

*Consolidated financial statements have been prepared since FY1998

67

This document includes statements concerning future businessresults.
These statements do not guarantee future business results, but
contain risks and uncertainties.
Please note that future business results may differ from targets forreasons such as changes in the business environment.

〔Contact〕
Shizuoka Financial Group. Corporate Planning Department (Yasumasa Koto)
TEL:
FAX:

054-261-3111 (main)054-344-0131

E – mail: kikaku@jp.shizugin.com

054-345-9161 (direct)
URL: https：//www.shizuoka-fg.co.jp/