Results of 3Q FY2022

February, 2023

Shizuoka Financial Group, Inc.

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

１．Results of 3Q FY2022

P3～

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

P45～

７．Reference

P48～

Results of 3Q FY2022

Results of 3Q FY2022 - Consolidated（JPY bn,%）

3Q
FY2022

YoY change
Increase/Decrease

Rate of change

Gross operating profit

JPY 118.4bn (first decrease in 6 periods)

Decreased by JPY 3.8bn, mainly due to decrease in gross operating
profit of Shizuoka Bank (- JPY 2.9bn )Gross operating profit

118.4

-3.8

-3.1

operating expenses (-)

71.9

-2.2

-3.0

Profit based on the equitymethod investment balance

0.3

-1.6

-83.8

Net operating profit

Net operating profit※1

47.2

-0.1

-0.3

Credit-related costs (-)

3.5

-1.2

-25.5

Decreased by JPY 0.1bn due to decrease in gross operating profit,
despite decrease in provision for general allowance for loan losses
and expenses

Gain (loss) on stocks

11.9

+8.6

+263.2

Ordinary profit

JPY 55.8bn (first increase in 2 periods)

Ordinary profit

55.8

+5.7

+11.4

Progress rate

73.4%

Extraordinary profit and loss

-0.1

-6.0

-101.7

Net income before taxes

55.7

-0.3

-0.5

Corporate taxes (-)

16.0

-0.2

-1.2

Net income※2

39.7

-0.1

-0.2

ROE

4.8

+0.0

－

JPY47.2bn (continued decrease in 2 periods)

Increased by JPY 5.7bn, because gain (loss) on stocks increased
while provision for specific allowance for loan losses increased
Net income

JPY 39.7bn (first decrease in 3 periods)

Progress rate

73.4%

Decreased by JPY 0.1bn due to decrease in extraordinary profit andloss resulting from the absence of gain (loss) on stocks of subsidiaries
and affiliates (JPY 5.5 bn)※1 Net operating profit = Net operating profit(Non-consolidated) + Ordinary profit(Consolidated) – Ordinary profit(Non-consolidated)※2 Net income attributable to owners of the parent

4

Financial Results of Major Group Companies
Shizuoka Bank Nonconsolidated
3Q
FY2022（JPY bn,%）

Major Group Companies other than the BankYoY change
Increase/
Decrease

Gross operating profit(Core gross operating profit)

107.3
115.6

-2.9
+7.2

-2.6
+6.6

Net interest income
Fees and commissions
Trading income
Other operating profit

91.9
15.8
1.3
-1.7
(-8.3)
(6.4)
65.3
41.9

-0.8
+4.6
+0.6
-7.3
(-10.1)(+3.0)
-2.0
-1.0

-0.8
+40.9
+89.7
-129.4
+86.3
-2.9
-2.2

50.1

+12.0

+31.6

(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 ofchange3Q
FY2022

-0.0

2.5

+0.1

Expenses

0.6

+0.1

1.2

+0.0

Ordinary profit

0.2

-0.1

1.3

+0.1

Interim net income

0.2

-0.1

0.9

+0.1

(-)

Shizuoka Capital
YoYchange3Q
FY2022

YoYchangeGross operating profit

0.4

+0.1

5.1

-0.7

Expenses

0.2

+0.0

3.7

-0.2

Ordinary profit

0.2

+0.0

1.4

-0.5

Interim net income

0.2

+0.0

1.0

-0.4

(-)

-168.4

43.4
8.6

+2.6
+5.9

+6.4
+211.9Bad debt written-off
Gain (loss) on stocks
Ordinary profit

4.3
11.8
52.0

+2.7
+8.6

+171.6+264.6

+8.5

+19.4

Extraordinary profit and loss※

0.2

-5.7

-97.0

8.0

Net income before taxes

52.2

+2.8

+5.6

1.7

13.8

+0.2

+1.7

38.4

+2.6

+7.1

Interim net income

Shizugin TM Securities

3Q
FY2022

-3.6

(-)

YoY
change0.8-1.5

Corporate taxes

3Q
FY2022Gross operating profit

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

YoYchangeShizugin Lease【 Consolidated ordinary profit (Excluding Shizuoka Bank) /Profit based on the equity-method investment balance 】
Profit based on the equity-method investment balance
Consolidated ordinary profit (Excluding Shizuoka Bank)
9.3

-1.9

1.9

-1.6

6.4

7.4

3Q
FY20203Q
FY2021

-0.3

7.4
0.3
7.1

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

Credit-related costs

(-)

2.8

-0.9

-23.5

3Q
FY2022

5

Net interest income - Shizuoka Bank Nonconsolidated
Net interest income in domestic section steadily increased while total net interest income decreased mainly
due to higher funding costs in international section
Breakdown of net interest income

Loan balance (average balance) and loan rate

3Q
FY2020（JPY bn）

3Q
FY2021

3Q
FY2022YoY

Net interest income

85.5

92.7

91.9

-0.8

Domestic section

77.1

83.6

84.3

+0.7

Domestic

Total loan balance
Loan rate+324.6

8,771.5

65.7

67.0

68.0

+1.0

Interest and dividend on
securities

11.6

15.7

15.4

-0.3

(Bond)

1.5

1.4

3.0

+1.6

1.01%

1.01%

(Gains on investment trust)

0.99%

0.2

3.0

0.4

-2.6

1.02%*

1.01%*

0.99%*

1.0

0.9

0.6

-0.2

3Q
FY20203Q
FY2021

3Q
FY2022

1.0

0.9

0.7

-0.1

0.8

1.8

1.6

-0.2

International section

8.3

9.1

7.6

-1.5

Interest on loans

8.6

6.3

17.1 +10.7

Interest and dividend on
securities

5.8

6.3

10.0

+3.7

(Bond)

4.5

3.5

7.3

+3.8

(Gains on investment trust)

0.9

2.0

1.0

-1.0

6.6

3.7

22.5 +18.8

1.9

0.8

9.7

+8.9

0.5

0.2

3.0

+2.8

(Interest paid on deposits etc.) (-)

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

Others+91.4

9,096.2
8,582.0（JPY bn）

Total loan balance
Loan rate

Interest on loans

Fund-raising expense (-)

International（JPY bn）

665.2

612.1
573.8
3.40%
1.87%
3Q
FY20201.46%
3Q
FY2021

3Q
FY2022*Excluding loans to central government

Interest on loans（JPY bn）

International
Domestic

+11.8

85.1

74.4

73.3

8.6

6.3

65.7

67.0

+10.7

17.1

【Factors of increase in International section】
by amt. chg. : JPY -0.3bn
by rate chg. : JPY +8.2bn
by ex. rate : JPY +2.9bn+1.0

68.0 【Factors of increase in Domestic section】
by amt. chg. : JPY +2.4bn
by rate chg. : JPY -1.4bn

3Q
FY20203Q
FY2021

3Q
FY2022

6

Securities (1) – Shizuoka Bank Nonconsolidated
Valuation gains/losses on bonds worsened due to rising interest rates in Japan and abroad. Despite these factors overall
securities maintained JPY 255.8 bn in unrealized gains
Securities*1 Balance is based on acquisition cost excluding unrealized gains and losses

Balance(*1)[Duration](Excluding interest rate hedged portion)

Unrealized gains and losses

End of Mar. 2022

End of Sep. 2022

End of Dec. 2022

Yen based bonds

3.22 years

6.17 years

6.40 years

6.41 years

Foreign bonds*

3.50 years

4.15 years

2.65 years

2.65 years

Change fromEnd of Sep.
FY2022End of Dec.
FY2022After hedging

Change fromEnd of Sep.
FY2022

2,396.6+79.2+255.8+265.4-17.9

Stocks102.4-25.9(*2)+322.4-+3.0

Yen based bonds

1,467.5+131.1

-37.0

-32.0

-23.6

(JGBs)( 761.0 )( +112.2 )( -23.7 )( -18.6 )( -15.6 )Foreign bonds

469.7

-30.0

-40.3

-35.8

+1.0

(Fixed rate)( 241.7 )( + 1.2 )( -12.5 )( -7.9 )( +3.3 )U.S. Bonds

End of Dec. 2021

End of Dec.
FY2022(Floating rate)( 227.9 )( -31.3 )( -27.8 )-(-2.3 )

*Excluding asset swap transactions

Investment trust

272.6

+0.4

-1.5

-

+2.5

Others

84.4

+3.5

+12.2

-

-0.7

（JPY bn）*2 Including shares of subsidiaries, etc(-24.2bn). distributed in accordance with the transition to a holding company structure

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

3Q FY2021

3Q FY2022

YoY

22.0

25.4

+3.4

Yen based bonds

1.4

3.0

+1.6

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

3.5

7.3

+3.8

5.0 (3.1)

1.5 (0.2)-3.6 (-2.9)

Investment funds

2.5

3.5

+1.1

Gains and losses on bonds
such as JGBs

1.8

-8.3

-10.1

Gain on sell of bonds such as JGBs

6.5

13.6

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

4.8

Gains and losses on stocks* Excluding futures transactions

Effect of replacing to high-yield bonds on net
interest income and valuation gains/losses[Simulation of the effect of replacing U.S. Bonds*]
1H 2022

Oct.-Dec. 2022

sell

JPY 92.8bn

sell

JPY 25.8bn

buy

JPY 65.5bn

buy

JPY 21.4bn

gain
gain
- JPY 10.1bn- JPY 2.9bn(loss)(loss)<Compared to case without replace>(1)Net interest income (annualized)+ JPY 2.0bn(2)Valuation gains/losses as the end of Dec. 2022
+JPY 14.2bn improved(+ JPY 1.3bn considering realized losses)

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%

+7.0

2.0

2.00%

21.9

+17.1

1.0

1.00%

3.2

11.8

+8.6

0.0

Gain on sales of stocks

4.0

11.9

+7.9

Amortization (-)

0.8

0.1

-0.7

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 participants (Estimate based on portfolio as of end of Nov. 2022)

7

Securities (2) Effect of rising long-term yen interest rates - Shizuoka Bank Nonconsolidated(1) Short-term Impact

Modification of Yield Curve Control by BOJ

Although net valuation gains/losses on yen based bonds will deteriorate, interest
margin will be secured due to the balance with core deposits, which are stable andless sensitive to interest rates.
impact on CET1 ratio : -0.3%

Yield at the end of Dec. 2022
Yield at the end of Sep. 2022

1.4
1.2
1
0.8

valuation
gain or loss

0.6
0.4
0.2
0
-0.2
-0.4

1Y

2Y

3Y

4Y

5Y

6Y

7Y

8Y

9Y

10Y

15Y

20Y

Investment
trustsOthers+319.4

-13.3

-41.3

-3.9

+12.9

End of Dec. 2022

+255.8+322.4

-37.0

-40.3

-1.5

+12.2

Change from End
of Sep. 2022

-17.9

+3.0

-23.6

+1.0

+2.5

-0.7

Asset (100%) JPY 13,840.0bn Liability and Equity (100%)
based on(valuation gain or loss: JPY bn)

Core deposit structure makes the funding side less sensitive to interest
rates, so the interest margin expands when interest rates rise.

-20

loan

Net Interest Income-23.4

Valuation gains/losses on yen bonds

6

-25

-26.5

floating

prime rate

rate

26.6%

42.3%

market rate

66.2%

15.2%

liquid deposit
56.7%

DepositCore deposits

78.1%

on IRRBB
33.2%

fixed rate
-30

-29.6

24.0%

fixed-term deposit
5.8

-32.9
2

-35

3.6
-37.0

0

Foreignbonds[ Yen Based Portfolio Structure Sep. 2022]（Yen based net interest income：JPY bn）

4

Yen basedbonds+273.7

Yen based net interest income will increase due to interest rate changes on loans and bonds.
Valuation gains/losses on yen based bonds will also improve due to shorter remaining maturities.

8

StocksEnd of Sep. 2022

(2) Medium- to Long-Term Impact

10

Gain (loss) on valuation of securities

Dec. 2022

-36.2
0.2

0.9

1st year

2nd year

4th year

21.1%

stocks/investment trusts 3.2%

2.1
3rd yearbond 9.4%

5th year[Prerequisite]
At maturity of fixed-rate loans, 50% of the amount is renewed to reflect increases in market interest rates (excluding consumer loans)
When the yen based bond maturity date arrives, the same amount is purchased to reflect the full market interest rate increase.

-40

Short-term marketable operation

Short-term marketable financing

17.3%

15.3%

others 4.0%

equity and others 6.7%

8

Expenses
Expenses in 3Q FY2022 decreased YoY
Main factors for change of expenses (Consolidated)

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

66.2
5.2

30.6

74.0

-1.5

5.2

37.8

36.2
61.2%

60.5%

Main factors

Tax

JPY -0.4bn

Consumption tax JPY -0.4bn

Non-personnel
expenses

JPY -1.6bn

Deposit insurance premium JPY -1.1bn

Personnel
expenses

JPY +0.6bn

Shizuoka Bank JPY +0.3bn
SFG JPY +0.2bn

Total

JPY -1.5bn

31.1

30.6

30.4

72.5

5.6

55.5%

YoY

（JPY bn）

Main factors for change of expenses, Next-Generation-System-related
3Q
FY20203Q
FY2021

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

59.9

67.3

3Q
FY2020

65.3
4.9
36.6

61.0%

55.9%

23.5

-2.0

38.4

31.4

YoY

（JPY bn）

5.4

5.0

3Q
FY202260.9%

Main factors

Tax

JPY -0.4bn

Consumption tax JPY -0.4bn

Non-personnel
expenses

JPY -1.8bn

Deposit insurance premium JPY -1.1bn
Depreciation and amortization JPY-1.2bn

Personnel
expenses

JPY +0.3bn

Salaries, etc. JPY +0.3bn

Total

JPY -2.0bn(Reference)

23.5
3Q
FY202123.8
3Q
FY2022Next-Generation-System-related(Estimated full-year amount)

JPY 7.9bn (- 1.2bn, YoY)
(Estimated full-year amount JPY 10.3bn)

9

Credit-related costs - Shizuoka Bank Nonconsolidated
Overall credit costs decreased YoY and 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

3Q
FY20203Q
FY2021

3Q
FY2022

YoYchangeProvision for general allowance
for loan losses (1)

3.1

2.1

-1.5

-3.6

Provision for specific allowance
for loan losses (2)

5.9

1.4

4.1

+2.7

4.8

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

0.1

0.2

0.2

+0.0

0.05%

0.09%

0.12%

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

9.1

3.7

2.8

-0.9

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

1.01%

0.88%

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

7.3

Provision for general allowance for loan losses (negative figures:
Appropriate back)Upgrade of credit rating, decrease in loan
and credit balances by foreclosure, etc.

-3.3

8.7

0.4

2.7

7.8

0.72%

4.8

0.64%

End ofMar.'140.37%
End ofMar.'16

End ofMar.'18

End ofMar.'20

End ofMar.'22

0.1

4.1

11.7

(JPY bn)

0.62%

Excluding users of Business Quick Loan(*)*Small amount loan with 100% external guaranty
End ofMar.'123Q
FY2022

Provision for specific allowance for loan losses

0.79%

End ofMar.'10

FY2021

Total

1.05%

Historical average of PD since Mar. 2008 : 0.79%（Excluding users of Business Quick Loan）

2.8

0.05%

Costs resulting from COVID-19 effect was JPY 2.0bn (JPY -1.4bn, YoY)

Other NPL disposal

Historical average of PD since Mar. 2008 : 0.88%

End ofMar.'08

5.5

Provision for allowance for loan losses and other
NPL disposal

Probability of Default (PD)0.96%

(JPY bn)* Credit-related costs rate =Credit-related costs / Average loan balance

0.4
3.4

5.5

1.0

0.4

FY2018FY2019

5.5
0.1
2.8

3.5

2.6

2.8
0.2
4.1

-1.5
FY2020

FY2021

3Q
FY202210

Risk-management loans (Loans based on the Financial Reconstruction Act *) Shizuoka Bank Nonconsolidated
Overall risk-management loans increased compared to End of Mar. 2022, while net risk-management loans remained at a low level
Trends in Risk-management loans

Net risk-management loans

Loans to customers who have gone bankrupt

JPY 105.0bn(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 5.4bn
243.4

Guaranteed by credit
guarantee associations

JPY 35.8bn

8.8[Delinquency ratio]

166.1
5.2
216.2
144.4

100.9

102.9

103.8

98.4

105.0

3.0

6.2

2.7

2.1

2.7

84.4

82.9

86.5

82.2

89.7

18.4

16.4

13.6

13.9

14.6

14.1

12.6

End ofMar.'11End ofMar.'14

End ofMar.'17

End ofMar.'21End ofDec.'21End ofMar.'22End ofDec. '22In
arrears
15%
Not
arrears
85%

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

3Q
FY2022

JPY 16.5bn

Net risk-management
loans

The ratio of risk-management loans[Breakdown of JPY -15.4bn](JPY bn)

Risk-management loans

3.59%

Net risk-management loans+24.6

Collected from borro
wer/ set off against
deposit account

-4.7

-18.0
(-15.4)

Collateral disposal/
suzbrogated toguarantor-4.8

Reclassified to better
categories-4.0

Loans sold-off

-1.8

105.0

Collateral/
Reserves

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

NPL removal from the balance sheet
FY2021

JPY 47.4bn

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%

1.07%

1.01%

1.03%

0.38%

0.26%

0.15%

0.17%

0.17%

0.16%

0.16%

End ofMar. '11

End ofMar. '14

End ofMar. '17

End ofMar. '21

End ofDec. '21

End ofMar. '22

End ofDec. '22

11

Capital adequacy ratio
Both Total capital ratio and CET1 ratio were 15.41%, down 0.67 percent points from the end of Mar. 2022
Capital adequacy ratio

Changes in capital and risk-adjusted assets

CET1ratio
Total capital ratio（％）

CET1ratio excluding valuation difference on available-for-sale securities

16.56

16.43

16.08

15.41

12.69

12.83

12.85

12.53

End ofMar. 2021

End ofDec. 2021

End ofMar. 2022

End ofDec. 2022

End ofMar. ’21

End ofDec. ’21

End ofMar. ’22

End ofDec. ’22

Change from theend of Mar. ’22

Total capital*

990.4

997.9

965.4

955.2

-10.2

CET1

990.4

997.9

965.4

955.2

-10.2

759.2

779.3

771.6

776.7

+5.1

Other Tier 1

-

-

-

-

-

Tier 2

-

-

-

-

-

5,979.7 6,070.6 6,001.2 6,197.8+196.6

5,658.0 5,749.1 5,672.1 5,856.8+184.7[BaselⅢ](JPY bn)

Excluding valuation difference on
available-for-sale securities

Risk-adjusted assets
Total credit-risk adjusted assets
Amount corresponding to market risk

19.4

19.4

20.2

22.4

+2.2

Capital adequacy ratio(Basel III finalization basis)Amount corresponding to operational risk

302.3

302.1

309.0

318.6

+9.6

◼ Make a trial calculation on influence of Basel III finalization based on figures
at the end of Dec. 2022

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

CET1ratio
Total capital ratio
CET1ratio excluding valuation difference on available-for-sale securities
Rise without
hitting capital floor

15.41
12.53
End of Dec. 2022

17.19

Interest rate risk in the banking book (IRRBB) (Consolidated basis, End of Dec. 2022)

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

value of equity due to interest rate shock within IRRBB)

13.69
13.99
11.14
1st year of finalization◼ Results of materiality test: ∆EVE (Economic Value of Equity) (Decrease in economic

Full implementation of
finalization

Decrease in economic value

Tier 1Results of materiality test*

JPY 38.8bn

JPY 955.2bn

4.1%≦15%*Financial Services Agency supervision guidelines require ∆EVE to be less than 15% of Tier 1 capital◼ ΔNII (Net Interest Income):JPY 8.1bn（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.
（JPY bn）
FY2020

FY2021(A)

FY2022(Projected)
(B)

YoY
(B-A)

3Q
FY2022(C)

Progress rate
(C/B)

Consolidated

Ordinary profit

63.3

54.2

76.0

+21.8

55.8

73.4%

Profit attributable to ownersof the parent

43.6

41.6

54.0

+12.4

39.7

73.4%

ROE

4.1%

3.8%

4.7%

+0.9pt

4.8%

-

OHR

59.5%

64.2%

56.5%

-7.7pt61.2%-

CET1 ratio

16.56%

16.08%

15.2%-0.8pt

15.4%

-

138.5

134.7

149.0

+14.3

107.3

72.0%

Net interest income

114.7

124.5

121.5

-3.0

91.9

75.6%

Fees and commissions

15.9

14.8

20.5

+5.7

15.8

76.9%

Trading income

0.9

0.9

1.0

+0.1

1.3

127.2%

Other operating profit

7.0

-5.5

6.0

+11.5

-1.7

-27.7%

84.4

88.2

87.5

-0.7

65.3

74.6%

Ordinary profit

51.5

45.3

64.5

+19.2

52.0

80.6%

Net income

35.5

36.1

45.0

+8.9

38.4

85.2%

11.7

5.5

7.0

+1.5

2.8

40.6%

Gross operating profit

Nonconsolidated

ExpensesCredit-related costs

(-)

(-)

13

Progress of the 14th
Medium-term Business Plan

14

Picture that Shizuoka Financial 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 (*)(*) 228 people as of Jan.1st 2023 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 Financial 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

Loan forasset building

Life-planning

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

✓ Asset building✓ Asset management✓ Inheritance measure etc.

Overseas network

Interest revenue : approx.
JPY 7.0bn✓ Establish site in Silicon Valley✓ Shift from rep. office to branchin Singapore

Group company
function

Shizuoka Bank)
Expand existing businesses (Excluding
Ordinary profit : approx.
JPY 10.0bn

Deepen businesses for growth

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 ●Acquire 100% ownership of SCC●Shizuoka Capital No.9 Fund established●Entry into HR introduction business ●Started to handle ESG leases●Support for cash management(COVID-19) ●Started Positive Impact Financing for SMEs New ●Acquire 100% ownership of TJSStrengthen 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)
New ●Launched New system to assist sales
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）●●

Global 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 - Shizuoka Bank Nonconsolidated

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 (+4.4% annual late)
Total loan balance (average balance)
Average balance
Total loan balance
Loan balance
for SMEs

Total loan balance by region
Annualgrowth rate

YoY change

JPY 9,761.3 bn
JPY 3,875.2 bn

JPY +416.0 bn
JPY +222.1 bn+4.4%

JPY 1,868.0 bn

JPY +41.3 bn+2.2%

Retail loan balance

JPY 3,665.1 bn

JPY +138.8 bn+3.9%

JPY 628.6 bn

JPY +95.9 bn

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

223.0

9,345.3
205.1

3,799.4

3,960.5

5,171.8

5,179.7

3Q FY2020

3Q FY2021

9,194.1＋22.5＋362.0＋31.6

9,761.3
227.6
4,322.5

5,211.3

3Q FY2022

Loan and Deposit Income and Expenses by domestic*
RetailOverseas （JPY bn）+416.0402.8

9,345.3
339.3

9,761.3
353.0

3,399.4

3,526.3

3,665.1

1,808.9

1,826.6

1,868.0

3,583.0

3,653.1

3,875.2

3Q FY2020

3Q FY2021

3Q FY2022

9,194.1

Overseas+18.0%

by amt.chg. :JPY -10.1bn
by ex. rate :JPY +106.0bn

SMEs

Outside the Shizuoka Pref.

（JPY bn）+6.0%

Loan balance forlarge and medium size
enterprises

Loan balancein foreign currency

Inside the Shizuoka Pref.

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）

9,096.2
89.5（annual basis）

83.7

FY2019FY2020

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

3Q
FY202218

Deposits - Shizuoka Bank Nonconsolidated

Basic strategy 1
Group Sales

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 (+1.9% annual late)
Deposit balance (average balance)（JPY bn）

Average balance

YoY change

Deposit balance by region

Total deposit
balance

JPY 11,409.3bn

JPY +216.5bn+1.9%

Deposit balancein Shizuoka

JPY 9,856.4bn

JPY +240.0bn+2.4%

Corporate
deposit balance

JPY 2,934.2bn

JPY -3.6bn-0.1%

Retail deposit
balance

JPY 7,597.9bn

JPY +217.4bn+2.9%

Public deposit
balance

JPY 337.3bn

JPY +2.4bn

+0.7%

NCD

JPY 89.0bn

JPY -44.9bn-33.5%

RetailOutside the Shizuoka Pref.

Overseas, etc（JPY bn）

11,192.8
423.4
1,152.9

10,457.3
377.6
973.6

9,106.2

9,616.4

3Q FY2020

3Q FY2021+16.9+240.011,409.3
383.1
1,169.8

9,856.4

3Q FY2022

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

Deposit balance (average balance)
Coporate

Inside the Shizuoka Pref.

Annual growth
rate（JPY bn）

Public&Overseas, etc

Loan-Deposit ratio + Security-Deposit ratio+216.5

10,457.3
809.9

11,192.8
874.5

11,409.3
877.2

7,019.3

7,380.5

7,597.9

116.8
104.3

85.7

75.1
29.2

2,628.1

2,937.7

2,934.2

3Q FY2020

3Q FY2021

3Q 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

83.5

（％）

105.2

85.5

Security-Deposit ratio
20.3

12.9

16.4

FY2016FY2019FY2021

19.6

3Q FY202219

strategy 1
Consumer loans - Shizuoka Bank Nonconsolidated BasicGroup Sales

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
Housing loan and Apartment loan breakdown by region

Consumer loan balance (term-end balance)

Unsecuredloans

3,587.0

3,452.9+ 137.2（JPY bn）

2,320.0
Housing loans

2,442.4

2,320.0+ 124.7

201.3

757.2
Others82.4
End ofDec. 2020

Apartment loans*1

199.1

194.8

781.5
70.8
End ofDec. 2021

804.1
59.8
End ofDec. 2022

1,656.1

Unsecured loans

Housing loans

Loans forasset building
Apartment loans*1
Others

37.0

37.3

37.5

2.1
4.3

2.4
4.2

2.5
4.3

18.3

1.363%

18.4

1.311%

2,442.4

Outside the Shizuoka Pref.
Inside the Shizuoka Pref.

2,567.2
998.5

754.4
+ 100.6855.0

End ofDec. '20

1,096.8

349.0

391.3 + 43.7 435.0

649.5

654.5

661.9

1,712.2

1,688.1

End ofDec. '21（JPY bn）

1,045.8+ 7.3+ 24.1

Interest amounts, fees and rates of consumer loans

Loan-related fees

（JPY bn）

2,567.2
663.9

Loans forasset building[ Apartment loan (Including corporate) ][ Housing loan ]Outside the Shizuoka pref
Inside the Shizuoka pref

98.3

93.2

92.0

3,724.1

End ofDec. '22

End ofDec. '20

End ofDec. '21

End ofDec. '22

Delinquency rate and Occupancy rate
（JPY bn）[Delinquency rate](3 months or longer)

18.6

End of Dec.
2020

End of Dec.
2021

End of Dec.
2022

Housing loans

0.13%

0.11%

0.09%

Apartment loans (Including corporate)

0.05%

0.17%

0.02%

Loans for asset building

0.12%

0.27%

0.29%

1.267%

5.3

5.2

5.1

6.2
0.8
3Q
FY20206.3
0.7
3Q
FY2021

6.4
0.5
3Q
FY2022[Occupancy rate]

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 (BK, SMC, Lease)

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

3Q
FY20203Q
FY2021

3Q
FY2022

YoY

23.9

23.3

27.6

+4.3

[Nonconsolidated(BK)]Fees and commissions

12.1

11.2

15.8

+4.6

Fees and commissions incomes

23.3

22.9

25.6

+2.7

Fees and commissions expenses (-)

11.3

11.7

9.8

*-1.9

+2.9
Derivatives
Ordinary profit of
SMC and Lease

5.1

1.5

0.3
1.5

2.2

0.6
0.4
0.9

1.2
0.6
0.6
0.8

1.1
0.9
1.0

3Q
FY20203Q
FY2021

3Q
FY2022

0.2
1.4
2.1

Related to market credit investment

2.1

1.2

2.2

+1.0

Syndicated loan, etc.

0.6

0.6

1.1

+0.5

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

0.4

0.6

0.9

+0.3

Others (covenants loan, etc.)

0.9

0.8

1.0

+0.2

Other fees on loans

2.5

3.0

2.8

-0.2

Fee incomes on customer assets

3.5

4.1

4.4

+0.3

Investment trust

0.2

0.2

0.2

-0.0

5.2

Insurance products

3.3

3.9

4.2

+0.3

Net profit on exchange

4.5

4.2

4.0

-0.3

1.7
0.2

Derivatives

0.7

0.7

1.3

+0.6

0.2

0.3

1.3

+1.0

1.3

5.6

Market credit*Effects of changes in account（Group credit life insurance dividends+1.3, Investment funds expenses -1.1）
investment
Syndicatedloan etc.
[Major items(BK)]
Solution-related
Fee incomes from wholesale
3.9
3.3
5.2
+2.0
Others[Nonconsolidated]Trading income

8.0(JPY bn)

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

6.1

(JPY bn)

-0.3

5.8

2.0
0.2

1.4
0.2

3.3

3.9

4.2

3Q
FY20203Q
FY2021

3Q
FY202221

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)

377

1
32
22
101

266

29
32
50

416
2
34
17
96

136

159

136

165

3Q
FY 2020

3Q
FY 2021

3Q
FY 2022【No. of contract concluded and fee income】

35

44

47

57

50

45

End ofJuly. 2021

End ofSep. 2021

End ofDec. 2021

End ofMar. 2022

End ofSep. 2022

End ofDec. 2022

Cash position,business improvement

Support for business improvement（cases）

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

FY2020

FY20213Q FY2022

19 companies

21 companies

19 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

53 loans, JPY 7.6bn

Use of revitalization funds

1 case1 case1 caseNo. of business restructuring
support initiatives

58 cases

59 cases

59 casesNo. of projects
completed

12 cases

14 cases

8 cases

M&A (recover-type, relief-type,
etc.)

186

94

68

End ofMay. 2021

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

69

Regional Bank
Ave. : 145

112

0.37
33

113

62

（cases）

216

98

0.28

96

311

No. of adoptions

510

0.19

0.45

estimated profits
JPY 0.7bn

Cumulative No. of adoptions

108

101

Main business（cases）

131

195

Business restructuring

179
0.59
90

98
49

25

28

32

3Q
FY20203Q
FY2021

3Q
FY2022

0.57
Contracts which
Shizuoka Bank
Group completed
without external
resources81* 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
Individual annuity insurance products+21.7
Fee incomes on customer assets
1,572.9

1,437.8

1,551.2
100.0

91.5

534.3

537.7

6.1

5.8

872.5

916.9

943.6

End of Dec. 2020

End of Dec.2021

End of Dec. 2022

99.4

465.9

5.2

(JPY bn)

Stock revenue

29.6

48.3

3Q
FY20203Q
FY2022

FY2027 (E)4.2

3Q
FY2021

3Q
FY2022Customer assets of Shizugin TM Securities (Term-end balance)
Investment trusts
Stock
Stock revenue

1.1

0.08

3.9

3.4

(JPY bn)

Wrap
Others+134.7

878.6
403.7

1,013.3
481.6

1.7

1.4

299.8

0.21

3Q
FY2021

+20.3

708.8

40.2

(JPY bn)

88.7

68.4

(JPY bn)
Stock revenue ofJPY-1bn- scale

Amount of sales
Commisions

Results of “Shizugin Wrap” (Balance and Stock revenue)balanceAmount of sales and commissions in insurance

1.0

29.6

40.2
157.1

132.3

153.5

275.6

291.8

334.3

End of Dec. 2020

End of Dec. 2021

End of Dec. 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 Dec.2022 20 fund Approx. JPY 25.5bn)
Type of industry(Execution amount as of the end of Dec. 2022: approx. 5.2 billion yen)

[Number of debts (Total)]

No. of firms

For corporate, SaaS109

Fin Tech

63

Medical, nursing care, biotechnology

59（Case） [Percentage of loans by growth stage]

AppliedExtended

210

247
11%

153
average
rate
3.3％

95

AI, data analysis

32

Manufacturing, robotics, IoT

25

38

6

11

20

36

190

4

25

Others

478

Oct.
2021

Dec.
2021

Mar.
2022

Jun.
2022

Sep.
2022

Dec.
2022

Total

Initiatives with the SSI model

investment

fund

Stock Acquisition RightFirst Refusal Right for
acquisitions

66

20%
58%
seed
middle

early
later

TECH BEAT Shizuoka⚫

Dispatch of HR

11%

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. 1,400

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

Expand high-value-added business through cross-industrial collaboration by investing JPY 21.3bn(unrealized gains; + JPY 10.2bn), leading to collaboration income of JPY 9.0bn
Bank-security collaboration(Collaboration and Investment
Income JPY 4.0bn)

Provision of new financial services[Total results by the end of Dec.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 3.7bn)[Total results by the end of Dec.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 1.4bn)[Total results by the end of Dec.FY2022]
Housing loan interest and guarantee fee:
JPY 0.6bn
Interest on securities (RMBS):
JPY 0.8bn✓ Diversify mortgage business (ARUHI・au JIBUN Bank)→ Guarantee balance JPY 19.4 bn,
Amount of RMBS around JPY 110bn✓ Provide online matching services with house builder andcustomer → Jointly manage “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 Dec. 2022: JPY 100.1 bn (+33.9 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.

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

After the launch（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

Group Cloud

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

Sales Style

New CRM
systemPlatform to analyze andutilize data

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

・Launched the corporate portal site “Shizugin Business Portal”(started in Sep. 2022)
・Over 3,000 users (End of Dec..2022)
Main functions (to be expanded sequentially)■ Application for consulting services■ Visualization of deposit information, etc.

・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,and sophistication of sales activities realize throughthe new CRM system ( planning by Jan. 2023) and theplatform to analyze 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
group through the use of RPA and AI-OCR
Develop management resources (human resources) to
support DX strategy• Develop digital professional and enhance IT literacyof 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 due to increase in Income and expenditure on loans,
fee income, PE, etc.
Breakdown of SF loan by loan type
(Average balance in 3Q FY2022: JPY 758.5bn)

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

28%

21%

+2.2

9.1

24%
14%

11.5
3.8

Breakdown of SF loan by credit rating

+0.6

3.2

1.9

0.7

4.6

CLO balance (As of the end of Dec. 2022)
JPY 88.3bn (24 contracts, JPY 3.7bn on average)
All have AAA rating
Subordination ratio: 35.0% - 41.8%

2%
Well-diversified
portfolio(JPY-based : Other-currencies-based = 6 : 4)

9.3

2.6

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

11%* Excluding real estate non-recourse loan

2%
29%

1.5
+0.8

5.4

+0.8

69%

6.2

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

98% are classified as “Performing”
69% are equivalent to or
higher than single A* Average LTV is 59.5% for real estate non-recourse loans

Ratio of capital commitment in PE by investment types
3Q
FY2020
Profitability indicators of
SF loan

ROA(Return on Assets)

RORA(Return on Risk-Weighted assets)

3Q
FY2021

Infrastructure Others
4%
3%

3Q
FY2022

3Q
FY2021

3Q
FY2022

YoY

1.07%

1.06%

-0.01pt

1.94%

1.82%

-0.12pt

Well-diversified portfolio,same as SF loan
No. of investment : 103(Of which 44 are international)

Debt
29%

Buyout52%

Growth/Start-up
12%29

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

Support for customers with a focus on sustainable finance

Basic strategy 1
Group Sales

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Develop support for customers with a focus on sustainable finance based on the resultsof the interviews 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 3Q FY2022

Progress rate toannual target

Sustainable Finance

JPY 115.0bn

JPY 247.7bn

215 %Finance related toenvironment

JPY 57.5bn

JPY 107.7bn

187 %[Cumulative amount of sustainable finance executed］

361.0

Finance related to environment

Plan to start
20%

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＞（JPY bn）

276.5
215.8
113.3

54.7
FY2021

113.7

138.4

162.4

1Q
FY20222Q
FY2022

3Q
FY2022

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.

SDGs Support Guarantee Program

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• 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• The number of guarantees approved exceeded approx. 2,700(End of Dec.2022)(Approx. JPY 89bn)

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
17,682[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.
■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(*1 ) Participate in the Ministry of the Environment's Scenario Analysis Pilot Program Support Project■Physical risk
Scope ofcoverage
Scenario
Method636

16,160619

516

17,046
15,541FY2013

15,273

FY201814,757FY201914,677Compared to FY2013-20.9％

548

13,981

14,12913,345636

FY2020

FY2021

Paper manufacture (*1)

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 Project

CDP Score Report - CLIMATE CHANGE 2022
Received a "B-" rating in the results of the 2022 Climate
Change Report by CDP, an international environmental NGO.

32

strategy 1
Investment in human capital (1) - Change of Business Model BasicGroup Sales

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

Implemented personnel system reforms with the keywords of “autonomy,” ”change,” and ”diversity” torealize human capital management
Diversity
Introduction of OKR *1

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*2 Autonomy

Challenge

Mercari, Inc. → Shizuoka Bank
Saki Ikeda◼ Project member of personnel system 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*2 Total users during FY2020 – 3Q FY2022: 32

Establishment of new career routes*1 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 business*1 Introduced at Shizuoka Bank

33

strategy 1
Investment in human capital (2) - Develop human resources BasicGroup Sales

Basic strategy 2
Innovation

Basic strategy 3
Business Portfolio

10-year Strategy

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 Dec. 2022 Total: 700)

◼ Implement preparatory courses to obtain
qualification◼ Implement hierarchical training sessions
Information Technology Passport Certificate holders: 948

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.

86

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.
75*Total users during FY2019 – End of Dec. 2022

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 to target in 3Q FY2022

Realize effect by
3Q FY2022
JPY

100

％

2.0bn

Targetby FY2025

in 5-year basis

Progress ratio totarget by FY2025

8.4bn

84

JPY

％

Achievement in the field of finance[Result by 3Q FY2022]✓ Amount of sales of customer
asset : JPY 33.1bn✓ Balance of customer asset:
JPY 25.4bn＜Yamanashi Chuo Bank Head Office Sales Dept.＞[Result by 3Q FY2022]

Initiatives with involving local community◼ Cooperation in the field of market credit investment
Extend real estate non-recourse loans (12 loans, JPY 64.5bn)◼ Jointly arrange syndicated loans (15 loans, JPY26.2bn)◼ Events for individual business talks for customers:19times (By 3Q FY2022)◼ Contracts of business matching completed : 82 / Contract Rate12.4%

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＞＜WHILL
ModelC2＞*The number of contracts and contract rates are through the interim of FY2022

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（May362022） →Contracted the first project (Sep. 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◼ Utilize the automotive
supply chain network

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

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

Realization measures＜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
5 case / JPY 7.4bn
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

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.

FY2023

FY2024FY2025

FY2026◼ Results of JPY 8.7bn in 3Q FY2022 (JPY 20.9bn in 5-year basis)

Jointly organize various events and develop products◼ 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◼ Seminar on Transfer Pricing Taxation
Collaboration at the job officer ceremony
Showed the video introduction the attractionsof both regions by broadcasting both bank’s
ceremony37

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-upsandforbusinessrestructuring
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

Expansion of Business Domain – Acquire 100% ownership of TJS Co., Ltd.
Acquire 100% ownership of TJS Co., Ltd. to enhance digitalization and productivity of local companies and tostrengthen human resource support. Obtained approval as a subsidiary of a bank holding company as stipulated
in Article 52-23, Paragraph 1, Item 14 of the Banking Law.（The first in The Group）
Issues facing
regional
companies

Business
Succession

TJS's BusinessIT / DX
Promotion
SupportIT / DX

Decarbonation

Customer Support Menuof Shizuoka Financial Group

Software Development

IT Support ( from Jul. 2021 )Extensive experience in softwaredevelopment for manufacturing, finance,
public sector, etc.

Develop IT support services for regional
companies [ Shizugin IT solution ]Hands-on development support andmaintenance management for SMEs canalso be considered

Sales channel
development

Insufficienthuman
resources

Main Business : software development、HR Dispatch
43 years of business history, mainly in Shizuoka Pref.

Human
Resources
SupportSupport for business efficiency,
productivity improvement, andintroduction and utilization of cloudservices and other systems

HR Dispatch

HR Introduction ( from Jul. 2020 )Strengths in IT, finance, office clericalwork, and medical staffing

Focus on immediate and managerial
personnel with experience in manufacturing
operations [ Shizuoka Bank ]Major company in Shizuoka Prefecturewith 5,000 registered staff…

Introduce personnel with sufficient work
experience through collaboration withcompanies in Shizuoka Pref. (StarMicronics, Yamaha Motor)

Contribute to solving regional issues and sustainable growth by combining
Shizuoka Financial Group’s customer base with TJS’s business strengths

40

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

41

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

42

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

Future43

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
44

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
Profit distribution to shareholders
Annual dividend (JPY bn)

Share buybacks (JPY bn)

Increase by JPY 3 Increase by JPY 1

Increase by JPY 1 Increase by JPY 1

21.0

22.0

9.7

10.1

26.0

25.0

22.0

14.4

12.6

13.0

12.5

Annual dividend per share (JPY)

30.0

Increase by
JPY 4
21.8

16.8

14.7

12.8

Start share buybackwith the limit of 10mil shares and8.8 of JPY 10.0bn in Feb. 2023

8.6

9.7

FY2017FY2018FY2019FY2020

FY2021

FY2022(E)

10 years ave.
(FY '13-'22)

Dividend payout ratio

24.9%

27.6%

32.6%

32.8%

35.4%

31.0%

28.5%

Shareholder return ratio

44.3%

49.1%

54.9%

32.8%

56.2%

49.5%

50.0%

Profit attributable toowners of the parent

JPY
50.1bnJPY
46.9bnJPY
38.7bnJPY
43.6bnJPY
41.6bnJPY
54.0bnJPY
44.9bn(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

46

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

271

Further reduction

101.2

94.5

92.8

91.7

90.5
Strengthening ofbusiness relationships

End ofMar. 2020

End ofMar. 2021

End ofMar. 2022

End ofDec. 2022

8.9

1.6

7.3

FY2021

4.2

1.5

2.7

3Q FY2022

15.0

3.8

11.3

Total

28.1

6.9

21.3

*1 Excluding shares of group companies and equity method affiliate

Excluding amortization[The amount agreed to sell] (29 companies)
Estimated
Valuation
Acquisition profit andsalecost basis
loss(JPY bn) amountEnd of Dec.
2022

Future target

Profit (loss)
Acquisition on sales*2
cost basis

FY2020*2

Business Investment andcontribution to regional economy

Amountof sales

47.4

12.2

＋35.2

Profits from the sale of strategic shareholdings will be used
for investment in systems and human resources, venturedevelopment, and optimization of the securities portfolio.
47

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

Establish target on Sustainable Finance (JPY 2tn in total by FY2030)
Results in 3Q FY2022 : JPY 247.7bn (Progress rate to annual target: 215%)

2021/10

Join PCAF (Partnership for Carbon Accounting Financials)
Join GX (Green Transformation) League

2022/11

Receive a "B-" rating in the results of the 2022 Climate Change Report by CDP

2022/12

Establish 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, Transformation of Board Management)

2022/10Introduced the Group Chief Officer system

2022/1049

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 Financial 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

50

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

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）

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

Feb. 2021

The first regional bank in Japan to join “The Valuable 500”, an initiative
which works on promoting success of people with disabilities

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

Formulate action plan in accordance with Women’s Advancement Promotion Law[Shizuoka Bank]
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

Ratio of female employees
40% or higher
Mar. 2031 Ratio of female employees in managing position 40% or higher• There are 8 female executives in 5 Group companies (*)* Shizuoka Bank (1 Executive Officer), Shizugin General Service (1 Director & Executive Officer),
Shizugin Mortgage Service (1 Director & Executive Officer and 2 Executive Officers),
Shizugin Business Create (1 Executive Officer),
Shizugin Heartful (1 President and 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)51

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]52

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

FY202159

8
3Q
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.
⚫

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

⚫

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

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.
Start cooperation with "Nagoya Bank Business Club”【Structure of Shizuginship】【No. of members】 At the end of Dec. 2022 / 691 corporates, 1,020 people【No. of participants in activities in FY2022】 Total 547people

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

Shizuginship members

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

Yamanashi Chu-gin Keieisha Club members
Nagoya Bank Business Club53

ESG/SDGs initiatives (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

8th meeting to discuss regional revitalization

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>
PeriodDetails of the event

No. ofParticipants

May,Aug. @Okushizu Agricultural Experience
Jun.
@Inatori OmotenashiExperience, etc.
@Miho Aquaculture Experience
Sep.
With Agricultural production
Oct.-Jan. Kids Academy “Tokugawa Ieyasu Project”

Held the meeting to share advanced initiatives on regional revitalization within thecommunity and to foster awareness on regional revitalization in Oct. 2022
Staff in local government in Yamanashi Pref. and Yamanashi Chuo Bank
participated the event this year based on the Shizuoka Yamanashi Alliance.
Approx. 600 people participated online.

[Lectures]◼ Hamamatsu City Flower Green Promotion
Foundation
Director Ms. Konami Tsukamoto◼ Mayor of Minami Alps City in Yamanashi Pref.
Mr. Kazumoto Kanemaru◼ Mayor of Numazu City
Mr. Shuichi Yorishige

37
44
43
130
51

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

◼
◼

The themes of the 2nd round are“Sustainability” and “Diversity & Inclusion”
Number of Applications: 67
Announced ideas for collaborative projects
with three partners in Dec. 2022 after the firstand second round of selection, andpresentation⚫

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- Dec. 2022)]
Shizuoka
Bank

Total

Yamanashi
Chuo Bank

No. of events

22

-

-

No. of application

729

509

220

No. of participants

526

340

186

No. of business talks

775

521

254

*Includes projects not related to Yamanashi Chuo Bank54

ESG/SDGs initiatives (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

●

●

●

●

Diversity

55

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 fees

56

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.

58

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”

59

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

Ranking

1st

4th

2nd

3rd

4rd

TSE Standard

30

TSE Growth

1

Total

51

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

60

Historical data of loans and deposits - Shizuoka Bank Nonconsolidated
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 9,761.3

30.5+4,745.0

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 5,211.3(%)

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

+1,799.5

Mega banks
FY2004

FY2007FY2010FY2013

FY2016FY2019FY2021

3Q
FY2022

Deposit balance (average balance)(JPY bn)

6,678.6 6,759.2

7,615.6

9,049.1

FY2007

11,228.3 11,409.3
9,914.0

FY2019FY2020

FY2021＜Moody’s＞

Shizuoka Bank

A3

8,613.4

9,643.4 9,856.4

Regional banks
Except for regional banks (Mega banks, Trust banks etc.)＜Other external ratings＞+4,281.8

S&P
FY2010FY2016A2

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

FY2007FY2013A1+4,730.7

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

Portion in Shizuoka Pref.

8,408.6

FY2004FY2013

FY2016FY2019FY2021

3Q
FY2022

A-

R&I

AA-

61

Loans – Loans by industries deposits - Shizuoka Bank Nonconsolidated
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 balance62

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)63

Branch Strategy - Shizuoka Bank Nonconsolidated
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.2022）

958
End of Mar. 2017

765

724

End of Mar. 2022

End of Mar. 2023
(prospects)

64Policy o 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 (Started in Jan. 2023)

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 (Started in Jan. 2023)
Reform system to assist loans (Started in 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 (Started in Dec.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(Started in Nov. 2022) , COTRA PJ (Started in Nov. 2022), Support for new banknotes, my number, etc.)65Allocation of risk capital

Allocation source

Risk capital
allocated

Risk capitalused

Ratio of risk
capital used

Loan (Credit risk)

211.3

118.1

55%

Treasury division

408.1

154.8

37%

(111.5)(31.9)

(28%)

12.0

6.1

51%

（JPY bn）

Credit risk
296.0

(strategic shareholdings)

Core capital
JPY 776.7bn

Market risk
335.3

(End of Dec. 2022 basis)

Strategic
investments
12.0
Operational risk
24.2
Buffer capital, etc.
109.2

Strategic investments
Subsidiaries of holding
company, etc(Excluding Shizuoka Bank)

2.6
11.9

Subsidiaries of Shizuoka Bank

56%

4.1

Operational risk

24.2

24.2

100%

Sub total

667.5

309.9

46%

Buffer capital, etc.

109.2

－

－

Total

776.7

－

－

・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

66

Group companies (Excluding Shizuoka Bank)
The total ordinary profit of group companies (excluding Shizuoka Bank) in 3Q FY2022 was JPY 7.1bn(down JPY 0.3bn YoY)

(JPY bn)

Company nameBusiness

3Q FY2022
Ordinary Profit YoY change

Shizugin Management Consulting Co., Ltd.

Corporate and financial management advisory services
Bill collection services

0.2

-0.1

Shizugin Lease Co., Ltd.

Leasing

1.3+0.1

Shizuoka Capital Co., Ltd.

Public-offering assistance
Support for corporate rehabilitation

0.2

+0.0

Shizugin TM Securities Co., Ltd.

Securities

1.4

-0.5

Shizugin IT Solution Co., Ltd.

Computer system development and operation

0.3

+0.0

Shizugin Credit Guaranty Co., Ltd

Guarantee of housing loans, etc.

3.0

+0.1

Shizugin DC Card Co., Ltd

Credit card and guarantee of consumer loans

0.7

-0.0

Shizuoka Bank (Europe) S.A.

Finance and securities-related services

-0.2

-0.1

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

7.1

-0.3

Subsidiaries of Shizuoka Bank

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

Credit card, prepaid card, and guarantee of consumer loans

0.2

+0.1

Monex Group, Inc.

Holding stocks of companies practicing securities and so on

* 2.5

-16.8

*Profit before income tax

67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<Consolidated><Consolidated><Consolidated>(%) (*)(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
20.8
33.4
24.0
10.0
17.1
37.6
50.0
46.6
53.4
49.3
18.6
46.9
52.9
56.3
87.5
74.1
80.3
77.8
48.0
83.7
79.3
67.2
76.0
73.3
－

BPS

587.6
632.2
652.8
792.0
742.5
722.3
833.4
878.8
1,024.6
1,086.0
1,003.8
909.2
1,005.4
1,024.6
1,109.7
1,242.1
1,290.1
1,500.2
1,500.3
1,545.6
1,669.0
1,738.5
1,727.1
1,922.6
1,926.0
－

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

68

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/