Shizuoka Financial Group
1st Medium-term Business Plan (FY2023-FY2027)

Xover
Crossover- Clearing the way to a new era

April 17th, 2023
Hisashi Shibata
President & CEO
Shizuoka Financial Group, Inc.

Contents

1. History of the Shizuoka Financial Group3

2. Outline of the 1st Medium-term Business Plan

5

3. Basic Strategies

13

4. Capital Policy

23

5. Reference Materials

28History of the Shizuoka Financial GroupThe results of the previous medium-term business plan form the foundation of latest one• Develop group management

9th Medium-term Business Plan

(2005-2007) Challenges for Creation and Change - 3C Plan

10th Medium-term Business Plan
(2008-2010)

Dream TEN - New challenges

11th Medium-term Business Plan
(2011-2013) MIRAI - Future➢ Aim to strengthen group cooperation and reinforce
the independence of each group company since
FY2005➢ Increased group companies’ total ordinary profit to
10 billion yen

About
JPY 10bn

2.9
FY2004FY2021• Increased gross operating profit by accelerating BPR
and reallocating personnel to the Banking Division
Workload

No. of employees
in back office-900
full-time-500

Front-office+300
full-time+200

End ofMar. 2008

End ofMar. 2022

End ofMar. 2008

End ofMar. 2022

57%

12th Medium-term Business Plan
(2014-2016) TOBIRA - Open a Gate for the Next

13th Medium-term Business Plan
(2017-2019) TSUNAGU

14th Medium-term Business Plan COLORs ～多彩～(2020-2022)• Building networks with companies in different industries andventure firms➢ Invested in about 500 venture firms
Foundation of our venture-related business• Improved system development productivity by launching the NextGeneration System➢ It became possible to handle 1.5 times as many development projects atthe same timeand cost

• Formed alliances with two regional banks(Yamanashi Chuo Bank and Bank of Nagoya)

FY2007FY2010• Develop new business fields➢ Expanded new business fields such as
market credit investment to 30 billion yen

About
JPY 30bn

1.7
FY2013

FY2021• Sales structure reform (optimize the branch network,
reallocate human resource in growth field)➢ Reviewed 90% branch function by FY2022
Cut 30 branches that provided all financial services, and reallocated about 250
personnel

Established Shizuoka Financial Group(October 2022)
Start of 1st Medium-term Business Plan(from April 2023)

3

Contents

1. History of the Shizuoka Financial Group3

2. Outline of the 1st Medium-term Business Plan

5

3. Basic Strategies

13

4. Capital Policy

23

5. Reference Materials

28

Concept and Goals
Set target state to be achieved in 2030, and develop 1st Medium-term Business Plan with back-casting to achieve it.

Target state to be achieved in 2030 “A state in which all stakeholders are sustainable and their well-being is improved”• Continuously improving the well-being of stakeholders by solving problems and meeting needs of the community and customers, and increasing
corporate value of SFG➢ Shizuoka, a city ofinnovation that
continues to attract
people and enterprises

RegionShareholder➢ Satisfaction withexpected investment
returns➢ SFG’s Support Group

FutureGeneration➢ Rich naturalenvironment➢ Bright future and hope
➢ Create a sustainable
societySocial Value Creation

×

(SFG)

Increase in Corporate Value
Corporate Philosophy

Customer➢ Sense of security that all problems and needs can be
discussed and resolved➢ Customers can enjoy convenience and efficiency
through cashless and digital technology.
➢ Sustainable corporate activities

1st Medium-term Business Plan
(FY2023-FY2027)

Present

Employees➢ Diverse and highly specialized group of
professionals➢ Flexible work styles to suit each individual'svalues and work ethic➢ Feeling that we are contributing to thecommunity and our customers

10-year Vision(2030)

Back-casting

Expand dreams and wealth
together with our community.

Sustainability Indicators

Future5Overview - Establishment of Sustainability Indicators
Name of
The Plan

Xover (Crossover) – Clearing the way to a new era

Term ofthe Plan

FY2023–2027 (5 years)[Concepts behind the name]“Crossover” means a mixture of different fields or elements. In addition, “X” means unknown or multiplication in Japan.
As the first medium-term business plan under the holding company structure, the plan name is filled with our determination to open up a new era in VUCA world
by co-creating new value with all stakeholders.

10-year Vision

A corporate group committing itself to future of the region and producing growth in it

1st Medium-term
Business Plan Vision

A problem-solving corporate group creating new value for the future

Stakeholders

Materiality of SFG• Increase in SFG’s corporate value

Group Business Strategy
Resolve social problems and meet needs of local
communities and customers through our diversified
financial services.

Revitalizing the community(management base)Transformation Strategy
through solving regional
Transform “Customer Contact,” “Sales,” “Humanproblems and expanding
revenue opportunities.
Resources,” and “Expenses” to generatemanagement resources and increase revenue.

Employees• Practicing human capital management

Strengthen the corporate governance system under the holding company structure
to promote our group synergies and to speed up management’s decision-making

SFG

Group Governance Strategy

Social Impact

Shareholders

Customers

Regional-Co-Creation Strategy

Indicators

Sustainability Indicators

FutureGenerations• Healthy growth of the local community• Addressing population decline,
low birthrate, and the aging population• Industrial development and financial
innovation• Forming a digital society• Enhancing society so the needs of theenvironment and society are balanced

RegionBasic Strategies

6Sustainability Indicators
Sustainability Indicators consist of financial targets, engagement indicators, and social impact indicators. We set financial targets and engagement indicators with the aim of raising
our corporate value as a public-listed company, and social impact indicators in order to create social value as a regional financial institution.

Target for FY2027

Consolidated ordinary income

More than 90 billion yen

Consolidated ROE

Approx. 6%

EffectivenessConsolidated OHR

Approx. 55%

Soundness

Consolidated CET1 Ratio *1

13% or more

Customer satisfaction with Group Transactions *2

Increase from the Previous Fiscal Year

Engagement of Group Employees *3

4.0 or above

Carbon Neutrality (Scope 1 and 2)

Achieved (FY2030)

Rate of Social Change in Shizuoka Prefecture’s Population

Continuously Increasing

Real Gross Output in Shizuoka Prefecture

Sustainably Developing

Percentage Reduction of GHG Emissions in Shizuoka Prefecture-46% compared to FY2013 (FY2030)

Profitability

Engagementaim

Social Impact

commitFinancial Targets

SFG

Indicators*1: Basel III finalization basis*2: Measured by “NPS” through customer surveys. NPS: Net Promoter Score [Degree of willingness to recommend the product, service, or company itself to family, friends, or others.]*3: Overall employees’ satisfaction which is measured as averaged score of the five factors: fulfillment at work, adaptation to work, satisfaction with workplace, satisfaction with superiors, and loyalty to company (on a scale of 1 to 5).

7Plan of Figures (1) - Roadmap to Consolidated Ordinary Income Target
Achieve the consolidated ordinary income target by increasing revenue and leveraging management resources, to be generated via “aggressive investment”
in the digital transformation (DX) and human capital fields. (Consolidated ordinary income target: JPY 90bn in FY2027, JPY 100bn or more in FY2030)
Generation of management resources throughaggressive investment

Basic Strategies to increase revenue
Regional-Co-Creation Strategy (Pages 13-14)

Transformation Strategy (Pages 18-20)

Expand the management base by revitalizing the regional economy.
Expand revenue opportunities by solving regional problems.

Increase productivity and raise revenue throughtransformations in four categories.

Cost Reduction+15 +αGroup Business Strategy (Pages 15-17)
New Businesses Domain

Increase revenue by JPY 28bn by “deepening,” “expanding,” and“renewing” our business domain, and by solving social problems andVenture &meeting needs of the community and customers through our group
Wealth Business
functions.
+6-8

+3-4

Including decreasein depreciation of the“Next-Generation
System”

Increase in
expenses due
to aggressive
investment-27 +αTouch points

Sales

Human resources

Expenses(JPY bn)100
ormore

ALM*1, Market*2,and Overseas
+6-8

+6-8

74

90

*1 Asset Liability Management*2 including market credit investment

Core Business Domain(Deposits, Loans and Fees)

Difference from the actual result in FY2022 +16
Actual in FY2022

Plan in FY2027

Goal in FY2030

8

Plan of Figures (2) - Profit & loss statement and balance sheet forecasts for FY2027
B/S Changes in major accounts on the balance sheet(Shizuoka Bank non-consolidated)

Profit and Loss Statement(JPY bn)(JPY bn)5-yearincrease/decrease

Plan in
FY2027

FY2022[Asset]FY2022

Plan in
FY20275-yearincrease/decrease

Consolidated Gross
Operating Profit

160.2

200.0

+39.8

Loans (domestic)

9,584.6

10,950.0+1,365.4

Shizuoka Bank

144.3

172.5

+28.2

Loans (JPY)

9,167.9

10,500.0+1,332.1

Net Interest Income

121.6

144.0

+22.4

Loans (Foreign
Currency)

416.7

450.0

+33.3

Fees andcommissions

21.1

22.5

+1.4
Loans (Overseas)

230.4

550.0

+319.6

Consolidated Nonconsolidated Difference(excluding banks)

15.9

27.5

+11.6

2,316.8

4,050.0+1,733.2

Group Company

15.9

23.5

+7.6

1,417.2

2,750.0+1,332.8

New Business

0.0

4.0

+4.0

10,880.4

12,050.0+1,169.6

614.1

750.0

+135.9Securities
Bond (JPY)[Liabilities]

Consolidated Expenses

96.4

110.0

+13.6
JPY deposits, etc.

Consolidated Ordinary
Income

74.0

90.0

+16.0
Foreign currency deposits

Consolidated Net Income

52.4

64.0

+11.6

9

Plan of Figures (3) - Group company plans for FY2027
Aiming for consolidated ordinary income of 90 billion yen, a consolidated ROE of around 6%, and a CET1 ratio of 13% or higher in FY2027(JPY bn)
FY2022
Actual(A)

FY2021

Shizugin Management
Consulting

FY2027Plan(B)

5-yearincrease/decrease(B − A)

Consolidated

Ordinary profit

54.2

74.0

90.0

+16.0

Profit attributable toowners of the parent

41.6

52.4

64.0

+11.6

ROE

3.8%

4.6%

Approx. 6%

―

OHR

64.2%

60.2%

Approx. 55%―

16.08%

18.42%(14.17%*)

CET1 ratio

13% or more

FY2022
ActualFY2027Plan

Gross
operating profit

1.4

3.2

Expenses (-)

1.0

Ordinary profit

0.5

5-yearI/D

FY2022
ActualFY2027
Plan

+1.8

3.4

4.4

+1.0

1.7

+0.7

1.8

1.9

+0.1

1.6

+1.1

1.6

2.5

+0.9

Shizuoka Capital
FY2022
ActualFY2027Plan

Gross
operating profit

0.5

0.8

―

*Figures in parentheses are estimates assuming full application of the finalization of Basel III.

5-yearI/D

Shizugin Lease

5-yearI/D

Shizugin TM Securities
5-yearI/D

FY2022
ActualFY2027
Plan

+0.3

6.7

11.1

+4.4

134.7

144.3

172.5

+28.2

Expenses (-)

0.3

0.4

+0.1

4.9

6.1

+1.2

Net interest income

124.5

121.6

144.0

+22.4

Ordinary profit

0.3

0.4

+0.1

1.8

5.0

+3.2

Fees and commissions

14.8

21.1

22.5

+1.4

Trading income

0.9

1.4

1.0

-0.4

Other operating profit

-5.5

0.2

5.0

+4.8

(-)

88.2

86.9

92.5

+5.6

Ordinary profit

45.3

67.6

75.0

+7.4

Net income

36.1

46.2

52.0

+5.8

Gross operating profit

Shizuoka Bank

ExpensesCredit-related costs (-)

5.5

4.8

8.0

+3.2

[Consolidated ordinary income (excluding Shizuoka Bank)and equity in earnings of affiliates]
Equity in earnings of affiliates
Consolidated ordinary income (excluding Shizuoka Bank)

11.6

18.0
3.0

9.7

2.0

0.4

9.6

9.3

FY2021

FY2022
Actual15.0

FY2027Plan

10

Plan of Figures (4) - Loan Plan and Consolidated Fee Income Plan for FY2027
SBK: Shizuoka Bank, SMC: Shizugin Management Consulting, SLS: Shizugin Lease, SCG: Shizugin Credit Guaranty, STM: Shizugin TM Securities

Loans and Bills Discounted (Average Balance)

11,500.0+1,685.0(JPY bn)

Fees and Commissions Revenue (Consolidated)
34.0-37.0

9,815.0
Corporate andMarket Credit
Investments, etc.

Individuals
Other(public, etc.)

30.4

6,650.0+789.95,860.1

3,841.5
113.4

STM

4,750.0+908.5100.0

FY2022 Actual

FY2027 Plan

FY2022 (Actual) FY2027 (Plan)

5-yearincrease/decrease

Corporate and Market Credit Investment, etc. (Major breakdown)
Shizuoka Pref.

2,571.3

2,680.0+108.7

Kanagawa Pref.

421.6

590.0

+168.4

Venture debt
Market Credit
Investments,
Overseas

3.6

100.0

+96.4

1,008.9

1,450.0+441.1

Individuals (Major breakdown)
Housing loans

2,524.3

3,110.0+585.7

Apartment loans

799.3

1,000.0+200.7Loans for asset-building

195.0

320.0

+125.0Unsecured loans

100.4

130.0

+29.6

SCG
SLS
SMC
SBK

(JPY bn)5.0+3.0-6.0

1.8

4.5

4.1
1.6
0.5

2.5
1.5

22.5

23.5

FY2022 Actual

FY2027 Plan

FY2022 (Actual) FY2027 (Plan)
Fees from Wholesale
9.1
11.0-12.0
Market Credit Investments, etc.
3.1
2.5
Related to Solution
1.1
1.5
Business
Others2.9
4.0(Fees of wholesale loans, etc.)

SMC
SLS
Asset Management
Insurance
Investment Trusts
STM
OthersFees & Commissions*
Trading Income
SCG

0.5
1.6
7.5
5.4
0.3
1.8
13.8
8.3
1.4
4.1

* Exchange fees, consumer loans fees, cashless, etc.

1.5
2.5
11.5-12.5
6.0
1.5
5.0
11.5-12.5
7.0
1.0
4.5

5-yearincrease/decrease+1.5-2.5
-0.6
+0.4
+1.1
+1.0
+0.9
+4.0-5.0
+0.7
+1.2
+3.2
-1.5-2.5
-1.3
-0.4
+0.4

11

Contents

1. History of the Shizuoka Financial Group3

2. Outline of the 1st Medium-term Business Plan

5

3. Basic Strategies

13

4. Capital Policy

23

5. Reference Materials

28Regional-Co-Creation Strategy
Development of the regional economy and our own sustainable growth are closely linked because the region is our main business foundation. We
will continue to build networks (Regional Platforms) among related parties to handle a diverse range of problems, and revitalize the region bysolving them. In the process, we will create business opportunities and generate profits through the Group Business strategy.
Regional economy is closely linked to our growth

Form Regional Platforms
Prosperous
life
Venturefirms

×regionSFG

Manufacturing

Localgovernments
Venturefirms

Different
industries

SFG

Depopulation

Digitization

Decarbonization ・・・

SFG
Forming several platforms in collaboration with local governments,
ventures, and other different industries, by leveraging coordination
capabilities (trust), networks, financial strength, and human resources.

Create new profit opportunities

Local
governments
Different
industries
Regional
Companies

SFG

Local
governments

Regional
Companies

etc.

Regional Ecosystem- a circular regional economic model
Solve Problems
Provide Solutions
Expand the Regional Platform
Increase the value of SFG
Custo
mers

SFG

Accumulate expertise
Solve customers’
problems and meettheir needs

Improve reproducibility

Expand to other regions

Local

Improve the quality of lifeof local residents
Increase the number of
Improve the value of
people involved
local companies
Expand our customer base
Build attractive communities
that gather people together
Community

Revitalize the region

Venturefirms

Regional
Companies
Different
industries

Problems of the region and customers are becoming more complex and diverse.

RegionalInnovation

A model caseof regional
co-creation
13

Regional-Co-Creation Strategy - Regional innovation eco-system
Match local companies with ventures and other different industries by leveraging our coordinating capabilities and networks, which are SFG’s
strengths. Aim to form an eco-system that continues to generate regional innovation.
TECH BEAT Shizuoka

Promote Regional Innovation

Hold an event that features cutting-edge technologies to match ventures with local companies
Promote innovation,
invite industries

Region-producing
Regional
Regional- Create and develop new industries
Platform - React to changes in the social
Innovation
Maintain and increase theregional population

structure- Enhance regional attractiveness

Different
occupations

SFG’s Network
Enhance energy ofregional enterprises

Hold events through industry-academia-government-finance collaboration, and establish acommunity to promote the collaboration“Entrepreneur Awards”
Commend outstanding business plans of entrepreneurs in order toexpand employment and to activate the regional economy throughsupport for start-ups and new businesses“Joint LAB”
Create and promote new business plans with other companies in order tosolve local problems through collaboration with them
“Joint U Labo”
Match local companies and venture seeds from local universities to
produce global companies.

VenturecapitalBusiness growth opportunities
Advanced technologies and services

Businesses in
ShizuokaPrefecture

Business and trial
opportunities

Start-ups
Technology
Ideas

Management issues
Human resources, etc.

Start-ups

No. of times held

Attendees(total)Approx. 34,000

All industries

4

Agriculture and otherprimary industries

3

Individual businessconsultations (total)

Approx. 1,400

Medical1

No. of ventures(total)Approx. 400

Theme

Total

8

Prefecture×

Financial
institution

×Start-ups

Largest scalein Japan
14

Group Business Strategy“Deepen” - Dig deeper into business domains

We will deepen, expand, and renew our business domain to solve social problems and meet the needs of the community and customers. In deepening the existing business domain,
Core business (Loans and deposits, Fees) +JPY6-8bn
allocate management resources appropriately by region and field, based on profitability and marketability, in order to increase revenue

Loan balance and interest
Shizuoka• Strengthen sales to both corporate and individual
customers, aiming for 40% share of loans in Shizuoka
Prefecture.

[Interest on loans]*excluding Tokyo, market credit investments, interest subsidies+1.0-2.0

71.2

72.0 (JPY bn)-73.0

Kanagawa, Western Tokyo• Consider this area as a growing market and expand sales
transactions.
• In western Kanagawa, as in Shizuoka, strengthen themarket for both corporate and individual customers.
• In central and eastern Kanagawa, focus on real estaterelated and consumer loans.

Tokyo, Osaka• Increase large-scale and profitable loans.

Yamanashi, Aichi

FY2022

FY2027 (plan)[Share of loans in Shizuoka Prefecture](JPY tn)

average balance
share
36%

40%
5.5

• Promote financing through alliances.

FY2022

Consolidated fees

[Consolidated fees and commissions]• Promote sustainable finance.
• Provide advice and support for decarbonization
solutions, including tools to calculate GHG emissions.

Business succession, M&A• Support business successions and M&A by leveraging
alliances and investing in local companies.

FY2027 (plan)+3.0-6.0
30.4
Corporate
fees

Asset
management
Other

11.0
-12.0

9.1

• Build a long-term investment portfolio that is resilient tomarket conditions.
• Build a foreign currency portfolio by leveraging astable foreign currency funding base.

7.5

13.8

11.5
-12.5

FY2022

FY2027 (plan)+JPY8-10bn[Profit and loss by division*]*ALM, Market, Market credit investment, Overseas(JPY bn)+8.0-10.0
Marketinvestment

Market credit investment, Private equity (PE)• Invest considering ROA, RORA
Estate-related finance: JPY 70.0–90.0 bn/year
PE: JPY 30.0-35.0bn/year.
Increase loans and ship finance to non-Japanese companies.

Market credit
investment

1.9(Strategic
shareholdings)

10.6

3.5
-4.0
6.0
-6.5

FY2022

FY2027 (plan)[Shizugin TM Securities]
Ordinary profit

Shizugin TM Securities

Shizugin Management Consulting

FY2022800.0850.0

5.0

1.8
FY2027 (plan)[Shizugin Lease]• Support customer financing and increase leases inoverseas markets.

118.7

Shizuoka Capital

1.6• Shift from a management-fee business to an
investment income business.

(JPY bn)

Balance of stock revenue

549.0• Satisfy asset-building needs through the NISA saving scheme.
(tax-advantaged investment account)

19.5
-20.0

17.7

Overseas
Other

Expand revenue opportunity through independence andcollaboration among group companies.

Shizugin Lease

27.0
-27.5

8.8

Group companies• Support business successions and M&A.
11.5
-12.5

External cooperation• Provide solutions through partnerships with various firms.
• Expand business fields, such as real estate and asset
management.

(JPY bn)
34.0
-37.0

ALM, Market, Market credit investment,
Overseas

ALM, Marketable operations

Overseas

5.2

Decarbonization, ESG finance,and solutions for companies

ALM, Marketable, Market credit investment
operations, locally and overseas

Lease balance
Ordinary profit(JPY bn)

2.5

FY2022120.0130.0

FY2027 (plan)

15

Group Business Strategy“Expand” - Expand existing business domains

We will develop new markets, enhance existing business services, and expand business domains throughcollaboration with our group companies, allied banks, and other companies in different industries.
Venture Business[Venture debt balance (average balance)]

Develop new markets
Expand sourcing channels
for venture debt.
Invest and finance in collaboration
with allied banks.

Enhance existing business services
Propose post-IPO asset
management and operations.
Answer capital needs of theboard members.
Develop new services
3.6
in collaboration with ventures.
FY2022[Venture-related income][Capital commitment in VC](JPY bn)(JPY bn)(JPY bn)

35.0
-40.0

90.0100.0+5.0-6.0
VC,
2.5
Stock acquisition rights, -3.0
etc.

0.1
FY2027 (plan)

FY2022

FY2027 (plan)

FY2022

Guarantee balance(JPY tn)
Ordinary profit(JPY bn)[Merchant]

20,000[Cashless-related income]

2.9

2.5
4.1

4.5

FY2022

FY2027 (plan)(JPY bn)
1.0
-1.5

0
FY20220.5
FY2027 (plan)

FY2022(JPY bn)

Develop new markets byintroducing different loans for
new properties.

New type of loan 1.0-2.0

Secure stable earnings byappropriately capturing needs.

Develop whole-asset sales

6.8

7.0

FY2022

FY2027 (plan)

Promote cross-selling of assets
in custody in collaboration with
PB personnel.

FY2027 (plan)

Guarantee Services
Cashless
Expand market
Enter merchant business for credit and debit cards.
Provide guarantee services to online banks.
Introduce new services.
Expand Service
Establish a new revenue base by obtaining licenses for
Expand guarantee services other than
VISA and Mastercard, and signing a franchise agreement
mortgage loan receivables.
with JCB.
(Rent obligations, etc.)[Shizugin Credit Guaranty]

Loans for Asset Building[Interest of loans for asset building]
New loan types

Loans for asset building

Venture debt

2.5
-3.0

19.0

Venture Business, Wealth Business+JPY6.0-8.0bn

Cross-industry Collaboration(Group securities strategy)
Monex Group
Offering products that are difficult to handle at Shizugin TM Securities in a nonface-to-face approach
Collaboration with Monex PB on services for the wealthy and ultra-wealthy
Wrap products to meet small capital needs[Group securities-related
Commons Asset Management
revenues](JPY bn)
Jointly design products that can differentiate
from other companies, such as impact investments
12.0
and startups, to capture the new NISA.
-13.0
9.4

FY2027 (plan)

FY2022

FY2030 (goal)

16

“Renew”

Group Business Strategy

New Business- Dive into new business domains Domains+JPY3.0-4.0bn

We will take on the challenges of businesses that are not bound by the financial industry as well as unprecedented businesses,
leading to discontinuous growth, with regard to businesses that contribute to the community’s sustainable growth.
Examples of new business domains

Main Point
Realize asustainable
society

Develop business that captureschanges in the social structure
Human capitalDX

Decarbonization

VentureRealize both of the following
Profitability

Business made possible by
the law revisions

FintechDevelopment andsale of apps

Regional
produce
Registered staffing
agencyAdvertising &marketingElderlysupportGrowthLeverage management
resources efficiently

Registered staffing
agencyEducation

Advertising &marketingCollection agency/
Loan Servicer

Regional
produce

Investment
crowdfunding

Rent guarantor

Decarbonization

Agriculture

SFG
Trust/
CreditChanneletc.
[Deregulation of the business scope according to revision of
the Order for Enforcement of the Banking Act in Nov. 2021]
Advanced companies
that meet requirements

×Social Impact

Information

Other banking advanced
companies

Business that contributes toregional sustainability

Agriculture
Education
Decarbonization

Alliance

Human
Capital< TOPICS >Acquire 100% ownership of TJS Co., Ltd. (Feb. 2023)
SFG’s Customer
TJS’s BusinessSupport Menu

Time * Expected Returns

Solve thecommunity’s andcustomers’
problems

Solve community
problems

Softwaredevelopment

IT support

IT, DX

HR dispatch

HR introduction

Insufficient HR
17

Transformation Strategy
We need to optimize management resources, such as the branch network and human resource allocation (into an optimal form) for our sustainable growth.
We will transform in four categories in order to reallocate management resources and to increase revenue by leveraging digital technology and data, etc.
Concept behind the strategy

Four Categories of Transformation (X)Management Resources

Touch Points (Customer Contact) X ⇒ Reduce branch operating costs throughBranch network basedon face-to-face sales

digitalizing daily transactions and optimizing the branch network.

×

Sales with phone and in person
Expertise in the financial field

Need to optimize management resources, such as the branch networkand human resource allocation to deal with rapid market change
Digitalization

Decrease in no. of customers
・・・
visiting branches

・・・Transform
Develop digital infrastructure and implement the transformation strategy
by leveraging the advantage gained by the Next-Generation System
Optimize the branch
network (reduce
operating cost)

Improve productivity
Allocate personnel
to priority areas

Reallocate management resources and increase revenue.
Establish a low-cost operating structure.

・・・✓ Digitalize daily transactions

The “digital” touch point becomes themain contact point with customers,
complemented by “real” branches.

✓ Optimize the branch network
Other

Full banking function

FY2022

About 110 branches

Consolidate personnel andspecialize in high-value-added sales

About 80 branches
Reduce “others” rateusing digital technology

FY2027

Sales X ⇒ Improve sales efficiency and increase revenue by sales time generation and using
digital technology and data.

✓ Sales time generation• Leverage sales tools and transformworkstyles to generate operating time

✓ Improve the productivity of sales
activities and “knowledge sharing”• Enhance data-driven marketing• Share information and skills among
SFG group companies

Human Resource X ⇒ Accelerate each basic strategy by reallocating personnel to priority
areas through digitalization and human resource development✓ Diverse and highly specialized human resources✓ Reallocate personnel• Reallocate personnel working in back-offices • Develop human resources capable ofand existing business areas (Page 19)
creating value in the digital field andventure related business, etc.

Expenses X ⇒ Aggressively invest and transform the cost structure✓ Transform the cost structure
Reduce costs in existing business and invest in growth areas (Page 20)

18

Transformation Strategy - Reallocating Personnel to Priority Areas, Utilizing Data
We will accelerate each basic strategy by reallocating personnel to priority areas through digitalization and human resource development.
Improve our services by leveraging various data which we obtain and see as important management resources.
Reallocating Personnel to Priority Areas

Sales Using Data

Accelerate each basic strategy by reallocating personnel to priority areas.

Transform operations and improve services by leveraging the various data we obtain.

[Human Resource Portfolio] (Including personnel working in side-jobs and second businesses)
Problem-solving(existing businesses,
etc.)

Value-Creating
Digitalization(venture business andwealth business, etc.)

4,150

4,004
Reallocation due
to digitalization

New Businesses

Middle, Back

Target State
Digital contact
HP

Development of digital
human resources

Mobile
apps

800
200
100
350

cashless

New CRM system

Branches
Group companies

4,400

700

984

Real contact(branches)

Accumulate, analyze, andvisualize data
Portal website
for corporate
customers

Gather data

Digital Platform to analyze and utilize data

500

(Launched in Jan. 2023)

287

450

155
2,578

In addition toexisting business,create new value
for customers.

FY2022(actual)Digitalization
Productivity improvement

2,450

FY2027(planned)

700

2,300

Value-Creating➢ Venture Business➢ Decarbonization/Industrial
Transformation Support➢ Wealth, Medical
etc.

Target State for FY2030

Accelerate each basic strategy byreallocating personnel to priority areas.
(Digital/ IT, Value-Creating, New Businesses)

Customer

Providing optimal information toappropriate channels for eachcustomer

Higheraccuracy insales activities✓ Predict customer needs based on
accumulated data.
→ Strengthen sales to customers with strong needs.

Knowledge
sharing✓ Share information in real time among group companies→ Strengthen sales as a group and speed up decision making
19Transformation Strategy - Transformation of investment and expenses structure
During the previous Medium-term Business Plan, we launched the Next-Generation System and improved system development productivity. We will
invest aggressively and develop digital infrastructure in the 1st Medium-term Business Plan. Through Transformation Strategy, we will transform thecost structure and invest aggressively in new business fields and human capital management.
Cost Structure (FY2027 plan)

System-Related Investment
67.0
Next-Generation
System38.0

Aggressive investment
Investment for
maintenance andrenewal110.0

70.0-80.0
50.0
-60.0

Systemdevelopment
productivity
improved 1.5
times

13.0
16.0

20.0

14th
(FY2020-FY2022)

1st(FY2023-FY2027)

Developed digital infrastructure needed for implementing theTransformation Strategy by improving system development
productivity through the Next-Generation System

Touch Point X

Sales X

• Digitalization of dailytransactions• Sales time generation• Improving sales accuracy• Knowledge sharing

Estimated cost reductions of JPY 15bn or more due to the effect of
implementing the strategy and the decrease in existing system expenses,
as well as depreciation of the Next-Generation System

New Business,
etc.

97.3

Nonpersonnel
Expenses

50.1

Personnel
Expenses
40.7

Personnel
Expenses- Problemsolving,
Valuecreating, andDigitalization
27.0
Depreciation of
Next-Generation
System
9.5
Running
costs forsystem
10.5
Operating costs
related to theback office
10.5

OthersTax
6.5(Including
branch costs)

Increase
Aggressive
Investment+27 +αPersonnel
Expenses- Problemsolving, Valuecreating, andDigitalization
Aggressive
investment
related to
SystemReduceexpenses forexisting
business-15.0 +α

Running cost forsystemOperating costs
related to theback office
Others(Including branchcosts)

Depreciation

Depreciation

FY2021

FY2027 plan

(JPY bn)

New businesses➢ Take on the challenges ofbusinesses that create social
impact and high profit
New Business

Human CapitalManagement➢ Invest in human capital andreallocate personnel➢ Increase personnel related toproblem-solving, value-creation,and digitalization
Human
CapitalDevelop digital
infrastructure➢

Increase expenses related toAggressive Investment for
Touch Point X and Sales X
DXImprove back-office
operations➢ Currently: centralizedadministrative work
➢ During the Plan: leverage digitaltechnology
DX
Human
Capital20

Group Governance Strategy
The holding company will create synergies among group companies that promote and enhance business activities by optimally allocating
management resources, such as personnel and the branch network. We will create social value and increase corporate value at the same time.

HoldingCompany

Supervision
Audit and Supervisory Independent
management supervision
Committee
Advisory Diverse internal andNomination and
Board
Remuneration Committee
external expertise
Board ofDirectors

Optimally allocate
management resources

Sustainability Committee
Group synergy(Group Executive Committee)
Business depth andGroup Chief
BusinesssearchDevelopment Dept.
Officers
Execution

Independence and collaboration among group companies
Shizuoka Capital[Equity-method Affiliates]
Monex Group[Subsidiary (Not consolidated)]
TJS

Human CapitalManagement Committee

Management foundation
supporting risk-taking

The Shizuoka
Bank

Group
Companies

Environmental
Committee

To solve local and business partners’ problems,
promote independent growth of group companies that havediversity, expertise, mobility, and generate synergies throughmutual collaboration.

Shizugin
Management
Consulting

Shizugin TM
Securities

Shizugin Lease[Shizuoka Bank’s Subsidiaries]
Shizugin IT Solution
Shizugin Credit Guaranty
Shizugin DC Card
Shizugin General Services
Shizugin Mortgage Service
Shizugin Business Create
Shizugin Heartful
Shizuoka Bank (Europe) S.A.
Shizuoka Liquidity Reserve
Limited[Shizuoka Bank’s Equity-method
Affiliates]
Shizugin Saison Card
Commons Asset Management

Execute sustainable growth strategies that capture changes in the environment
Regional Co-Creation Strategy

Group Business Strategy

Transformation Strategy
21

Contents

1. History of the Shizuoka Financial Group3

2. Outline of the 1st Medium-term Business Plan

5

3. Basic Strategies

13

4. Capital Policy

23

5. Reference Materials

28Capital Policy
Achieve sustainable improvement of SFG’s corporate value by pursuing profitability through the soundness, growth,and stability of the management base. This improvement will lead to further investment for growth and shareholder
returns.

Shareholder Returns
Aim to provide shareholder returns mainly throughdividends and flexibly implementing buybacks.
Aim to raise dividends progressively, aiming for adividend payout ratio of 40% or more.

Investment for growthProfitability
Optimize capital allocation
Optimize capital allocation based on the Risk Appetite
Framework.
Increase Risk-weighted Assets +JPY 1,800bn.

Soundness
Top level of soundness among regional financial
institutions in Japan
Satisfy Basel Capital Adequacy Regulations.
Maintain high credit ratings.
Maintain a CET1 ratio of 13% or higher.

Sustainable improvementof Shizuoka FG’s
corporate value
Continuous increase in
ROE, EPS, and BPS

Aggressively invest for transformation
System investment to take advantage of the NextGeneration System.
Practice human capital management.
Invest in new businesses.
Invest more than JPY 50bn in systems.

Management base growth and stability
Strengthen the customer base through revitalizing theregional economy
Maintain funding stability (deposits), which allows flexible
implementation of capital policy.
Aim to increase the number of local and employee
shareholders.

23Capital Allocation
We intend to control CET1 ratio above 13% by accumulating risk-weighted assets and providing shareholders returns.
In accumulating risk-weighted assets, we aim to achieve 6% ROE by improving capital efficiency, taking ROA and RORA into account.
CET1 Ratio

Risk-weighted assets

Consolidated Increase in risknet Income weighted assets(JPY bn)
Basel III finalization
Asset liability management(Yen bonds, mutual funds)

Shareholder
Returns

7,500

Market credit investment,
Venture Business, etc.

Page 25

Loans

Strategic
shareholdings

18%
4.1%
1.6%

Equivalent to valuation difference on
available-for-sale securities
Assume buffer capital of approx. JPY 90bn, taking
earthquake risk and climate change risk into account.
Increase in riskweighted assets
Build up risk-weighted
assets, taking ROA and
RORA into accountInvest in new businesses

End of FY2022

Shareholder
returns
Progressive dividend

Implement buybacks
flexibly

Page 26

5,500

Finalization ofBasel IIIFY2022

Plan forFY2027

13% or more
ROE Changes

Strategic
shareholdings
Reduce policy
investment stocks inaccordance with the
Corporate Code ofGovernance
Leverage gains from thesale of strategic
shareholdings

FY2022

FY2027

Consolidated net
incomeJPY 52.4bn

JPY 64.0bn

CapitalJPY 1,000bn

JPY 1,000-1,100bn

ROE

4.6%

Approx. 6%

End of FY2027

24

Shareholder Return Policy
We aim to raise the dividend payout ratio progressively to 40% or more by FY2027, and flexibly implement share buybacks based on market conditions,
including stock prices. In addition, we intend to continuously improve ROE, EPS, and BPS while keeping shareholder return in mind.
Distribution of shareholder return
Annual dividend per share (JPY bn)

Share buyback (JPY bn)

Annual dividend per share (JPY)

30
21

22

22

25

26

13
6
21.8
Total shareholder return

FY
Dividend payout ratio (%)
Shareholder return ratio (%)
Total number of shares (bn)
EPS (JPY)
BPS (JPY)

26.8

22.2

23.0

14.8

97

23.4

21.2
14.4

07

17

18

19

20

21

1997

2007

2017

2018

2019

2020

2021

29.3
90.3
0.80
20.4
587.6

26.3
62.6
0.71
49.3
1,003.8

24.9
44.3
0.65
83.7
1,669.0

27.6
49.1
0.62
79.3
1,738.5

32.6
54.9
0.61
67.2
1,727.1

32.6
32.9
0.60
76.0
1,922.6

35.2
56.3
0.60
73.3
1,926.0

22

2022

27

2027 (Target)

32.2
40% or more
51.1*
ー
→
Decreased by 200 million
0.60(approx. one quarter) shares from 1997
92.9 → Increased by 4.5 times from 1997
2,050.7 → Increased by 3.5 times from 1997
* including buyback JPY10bn

25

Reduction of Strategic Shareholdings
We plan to reduce the number of strategic investment shares in accordance with the Corporate Code of Governance.
During the 1st Medium-term Business Plan, we will invest in strategic fields such as DX, human capital, and new businesses by leveraging gains fromthe sale of strategic shareholdings.
Level of strategic shareholdings at acquisition cost *1
Approx. 500

Approx. 170.0*1 Excluding shares of Group companies and equity method affiliates(JPY bn)

Increase due to cancellation of retirement benefit trusts
Approx.
33%

288
Approx. 110.0

287

267

106.0

100.6

Further
reduction

200
87.0

End of Mar. FY2000

Approx.
11％

10.7%

End of Mar. FY2017

End of Mar. FY2020

Policy on Strategic
Shareholdings (CGC Principles 1-4)

Number of shareholdings

Increase due to cancellation of retirement benefit trusts
Business investment and contribution to the regional economy
Strengthening business relationships
Ratio of acquisition cost to capital

8.8%

Approx.
8％

End of Mar. FY2023

End of Mar. FY2028

Policy on Use of Gain on Sales of Policy Investment Stocks
14th Medium-term Business Plan (2020-2022)

1st Medium-term Business Plan (2023-2027)

・Allocated to Next-Generation System expenses.
Improve system development productivity by renewing software(applications) that was developed more than 30 years ago.
Establish system infrastructure that can easily incorporate
advanced technology through open hardware, etc.

・Allocate to Next-Generation System expenses.
・Invest in strategic fields such as DX, human capital,and new businesses.
Increase revenue by investing in systems for the next 10 years
based on progress in and superiority of the systeminfrastructure.

(Excerpt from the Corporate Governance Report, p.1)

The basic policy on strategic shareholdings is to
reduce the number of shares. The Bank will only
maintain those shareholdings deemed meaningfulfrom the three perspectives of “business
investment,” “strengthening business relationships,”and “contribution to the regional economy.”Business investment andcontribution to the regional economy
Investments that are necessary for management
strategy or that contribute to the local community will
be scrutinized on a case-by-case basis, and newacquisitions will also be considered. If newacquisitions are made, sales will be increased inproportion to the new acquisitions, with the aim ofachieving the reduction target on an acquisition costbasis.
[Effects of past strategic investments]
・Collaboration with companies in other industries
・Network as a foundation for venture business
Decrease in risk-weighted assets resulting from thesale of the strategic shareholdings, and reinvestmentin profitable areas such as venture capital, PE, etc.
26

Contents

1. History of the Shizuoka Financial Group3

2. Outline of the 1st Medium-term Business Plan

5

3. Basic Strategies

13

4. Capital Policy

23

5. Reference Materials

28

Sustainability Management (1)- Identifying Materiality

Identified issues facing both local communities and SFG, evaluated them from the perspective of creating social value and enhancing
corporate value, and decided on Materiality.
Definition of Materiality

Materiality Identification Procedure
Identified issues to consider

Identified issues for local communities and Shizuoka FG from various
perspectives (social, economic, and environmental)

Evaluated and narrowed down
the issues

From the perspective of creating social value and enhancing
corporate value, evaluated opportunities and risks for both local
communities and Shizuoka FG, and narrowed down issues

Decided on Materiality

Grouped issues and decided on Materiality* Shizuoka Prefecture New Vision, Late-Stage Action Plan:

Issues to consider
Issues in Shizuoka Prefecture*① Creating safe communities that protect lives★
② Improving medical care and welfare to live with peace of mind ★
③ Creating a digital society④ Forming a society where the environment and the economy arecompatible⑤ Forming a society where children can learn and grow in good health ★
⑥ Developing people with talent and virtue⑦ Realizing a society where everyone can play an active role ★
⑧ Developing wealth-creating industries ★
⑨ Proposing a variety of lifestyles⑩ Enhancing transportation networks to increase the region’s value⑪ Enhancing and disseminating the attractiveness of “Fuji no Kuni”⑫ Expanding exchanges with people around the world

12 Policies to embody the Basic Philosophy★Issues common to Shizuoka, Kanagawa, Yamanashi and
Aichi Prefectures

Issues within SFG❶ Addressing population decline, the low birthrate, and the aging
population❷ Industrial development and financial innovation❸ Healthy growth of the local community❹ Expanding group business areas (addressing the deteriorating
profitability of existing businesses)❺ Challenge for new business (revision of the Banking Act)❻ DX realization and modernization❼ DE&I penetration❽ Transformation of the corporate culture❾ Providing customer-driven products and services❿ Enhancing group governance (group independence andcollaboration)⓫ Dealing with complex and advanced security⓬ Developing environmentally friendly products and services

Social value

Red: Materiality Black: Issues❶ Addressing population decline, thelow birthrate, and the aging population❷ Industrial development④ Forming a society whereand financial innovation
the environment and❸
Healthy
growththe economy are compatibleof the local community⑧ Developing wealth-creating industries❼ DE&I penetration ③ Creating a digital society

①

②

⑪
⑤

⑩

⑦ Realizing a society
where everyone can play an active role

⑨ ⓬

➒

⑥
⑫
➓

➑

➏

⓫
➍ ➎

Corporate value

28

Sustainability Management (2)- Creating social impact by resolving Materiality

Identified seven Materiality in social, economic, and environmental themes to create social value and increase corporate value.
Created social impact through the resolution of local issues.

Materiality

Business activities

Addressing population decline, thelow birthrate, and the aging
population

Support the creation of towns
that attract people

Healthy growth of the local
community

Improve financial literacy in the region

No. of consultations
on asset formation

Industrial development andfinancial innovation

Support customer transformation
toward a change in industrial structure

No. of cases of
support for industrial
transformation

Creating a digital society

Support regional DX

Society that balances the environment
and economy

Promote regional development thatbalances decarbonization and businessneeds

Amount ofenvironmental
financing executed

Improve corporate value

Increase productivity and revenue
through each strategy

Transform human capitalSocialEconomyEnvironment

Shareholder

Employees

Output/Outcome

Managing human capital

No. of tourist
destinations
createdNo. ofDX-certified
businesses

ImpactIncrease in
the relevant
population in
Shizuoka Pref.

Rate of social change in
Shizuoka Prefecture’s
population

Increase in
the no. ofcompanies in
Shizuoka Pref.

Real gross prefectural
product(Continuously increasing)(Developing sustainably)

Penetration ofcarbon offsets

Rate of reduction of GHG
emissions in Shizuoka Prefecture(-46% compared to FY2013(FY2030))

Revenue expansion
Cost reduction

Profit increase

Financial targets:Profitability Soundness
Effectiveness

Creation of problemsolving and value-creating
human resources

Employeeengagement

Well-being of employees(Engagement)

29

Sustainability Management (3)- Social Impact Roadmap

Input/Activity

OutputOutcome

Impact(Management Resources & Corporate Activities)(Direct Results)(Indirect Results)(Social Impact)

Support for medical and nursing care businessNo. of cases of support for opening new
businesses

Improvement of medical and nursing care

Extension of healthy life expectancy

Hiring support for people with disabilities

Hiring rate of people with disabilities

Expanded employment for people with disabilities

Improved employment environment

Attract from overseas and metropolitan areas

Tourism promotion

Increase in inbound tourists

Increase in the no. of people involved

Town development project

No. of municipal services contracted

Improved public services

Promote cashless transactions

No. of cashless services

Cashless transactions in the region

Penetrate digital transactions

No. of users of non-face-to-face services

Improved transaction convenience

Financial and economic education

No. of community education projects

Improved financial literacy in the region

Propose long-term asset building

Stock revenue asset balanceHousehold financial assets increased

Asset management advisory business

Wealth, inheritance, and other income

Increase in income and assets

Support for overseas expansion

No. of cases of overseas inbound &outbound support

Expansion of overseas transactions

Business for venture firms

No. of cases of venture debt executed

Support for venture firms

Inheritance & business succession

Various consulting revenues

Increase in the no. of regional companies

Strengthen equity businessBuyout fund origination amount

Succession of business, technology, etc.

Addressing human resource shortages

Introduction of personnel

Secure and expanded labor force

Support for industrial transformation

No. of cases of support for industrial transformation

Transformed industrial structure

Promote DX

No. of DX support for business partners

Improved productivity and secured profits

Support for introduction of energy-saving equipment

No. of ESG leases handled

Support for SDG initiatives

Amt. of environmental finance executed

Expanded introduction of renewableenergy and energy-saving equipment,
etc.

Rate of social change in
Shizuoka Prefecture’s
population (continuously
increasing)

Improved quality of life

From savings to investment

Ensured sustainability of local
companies (improved businessperformance, increased corporate
tax payments)

Developed and expanded range of
products and services with zero
GHG emissions

Real gross prefectural
product (developing
sustainably)

Rate of reduction of GHG
emissions in Shizuoka Pref.
(-46% compared to FY2013 (FY2030))

30

Strategies by Region in the “Group Business Strategy”
Formulate strategies for each region and market, and optimally allocate management resources. Restructure strategy flexibly based on appropriate
profitability analysis and verification.
Kanagawa (Western part) Kanagawa (Other), Western Tokyo
Tokyo, Osaka - Pursue large- Same strategy as Shizuoka - Life planning business with a focus on real estate scale, highly profitable projects• Increase major customers bypromoting to general
corporations and expanding
market share

Formulate strategies by region and market
Discover and solve regional problems••

Reinforcement of capturing real estate-related market needs
Developing a life-planning business with loans as thestarting point
Economics

Environment

Sustainable finance (loans, leases, etc.)

Aichi - Life Plan Business Alliance
Collaboration with the Bank of Nagoya to support industrial
transformation
Developing a life-planning business with loans as the starting point••

Society
Economics

Industrial Transformation Support
Life-planning Business

Yamanashi - Alliance••Group business growth through alliances
Revitalization of Shizuoka and Yamanashi prefectures as one
economic zone
Economics
Society

Expansion of Group Businesses(Securities, Leases, Guarantees, etc.)

Regional Development and Tourism Revitalization

Real estate related business

Wealth• Focus on consulting services that leverage the Group’s collective
strengths by developing measures and allocating personnel to resolve
issues specific to each region.
Society

Industrial Transformation Support

Life Plan

Environment

Sustainable Finance and Consulting

Economics

Venture Business (Regional Innovation)

Economics

Equity BusinessSociety

Increase major customers by
expanding market share of wholesaletransactions

Economics

Shizuoka - All-round support and business development

Corporate•

Economics

Venture businessEconomics

Asset-building businessEconomics

Cutting-edge financial services

ALM, markets, overseas- Revenue growth• Capture profit opportunities
through appropriate risk-taking

Cashless
Economics

Non-Japanese Loans
Ship Finance

Economics

Market Credit Investment

Total Asset Sales(inheritance, asset formation, etc.)

Economics

Market Management

Business Improvement and Turnaround

Economics

ALM Strategy Operation

Economics
Society

Economics

WealthFinancial and Economic Education

Economics

SocietyBusiness Succession and M&A Business31

Goal through the “Transformation Strategy”
Aiming to optimize the channel and branch networks, improve productivity, and increase the value of human resources bycorrelating the transformation of each area
FY2023Phase
Human
Resource X

Development of digital
infrastructure
Recruitment and development ofdigital human resources
Expenses X
Human capital
investment
Systems
investment

Contact Center

Reduction of branch costs

Optimized channel andlocation networks

Operational efficiency

UI/UX
improvement

Corporate Portal Site

Digital Platform(individual and corporate))
Data Accumulation
Platform)to analyze
and utilize data
Sales X

Expenses X

Branch investment

Personalized Apps
Personal Site

FY2027

Face-to-face and non-face-to-face
optimization

Back-office staffing generation

System maintenance

Touch Point(Customer
Contact) X

Reform operations and strengthen
sales force
Developing and reallocating humanresources to solve problems andcreate value

New system to assist sales
Group company OA(common infrastructure)

Review of workflows inline with digitization
Data utilization
Digitalmarketing
A data-driven
approach

Consolidation of sales offices
Face-to-face◆ Decrease in window
processing work
◆ Decrease in the no. ofcustomers
Non-face-to-face◆ Increased use of digitaltransactions

Set up optimal touch points byconsolidating sales offices, etc., in
accordance with customer trends
Practice high value-added sales
through consolidation of sales offices
Face-to-faceValue creation and problem
solving practices

Improved management
efficiency andoperational
productivity

Improved humancapital value

Non-face-to-faceCovers routine transactions
Generating time for sales
Improved productivity ofsales activities

Improve the sales level ofthe entire organization

Knowledge sharing

32

Human Capital Management
Help to create a sustainable society by transforming organizational culture to one in which diverse values and personalities are combined to solve
problems with new ideas.
14th Mid-Term Business Plan

13th Mid-Term Business Plan✓✓✓

Enhanced flexibility in the dress code
Expanded flextime and telework(to all staff)
Developed side businesses step by
step✓

Introduced a full flextime system✓

Expanded work systems for diversity(relearning, life events, etc.)✓

Extended the age limit for employing veterans

WSI 3.0 (October 2022-)

Pursuit of the wellbeing of
WSI 2.0 (April 2021-)
Create innovative ideas and new feelings

by promoting diversity, recognizing theexecutives, employees, and theirfamilies.
Respect and maximize diversity.

value of each person, and bringing the
WSI (July 2019-)

best of their personalities.

Shift viewpoint from “internalrule” to “customers, community,”✓

Enhanced leave and work systems for childcare
support✓Expanded diversity-related leave and work
programs

establishing an autonomous style of
work.

✓

Introduced same-gender partnership system(in March 2023)

SFG 1st Medium-Term Business Plan

Culture & Wellbeing Innovation 1.0 (April 2023-)
Maintain the corporate culture and tradition of being
close to the community and customers, while
simultaneously reforming the company’s internal culture.
Improve health and wellbeing (deepening healthmanagement, mutual growth of individuals andorganizations through acceptance of diversity).
✓

Hold town meetings between management and employees✓

Eliminate titles among executives and employees✓

Start the Health Keeper System Trial(In-house physiotherapist for the visually impaired)✓

Expand eligibility for using the personal injury and sick leavesystem, etc.
33

Group Collaboration
Realize group strategies through optimally allocating management resources across the entire group. In addition, respond flexibly to changes inthe business environment and create profit opportunities by developing new business fields through establishing new companies, M&A, and othermeans.
Allocate

Shizuoka Capital
Growing into a group of experts that attracts
projects from all over the country⚫ Form a business revitalization fund with LP investment
from other banks in Shizuoka⚫ IPO investment through venture funds⚫ Buyout investments that also utilize alliance funds

TM Securities
Asset-building partner with a high level ofexpertise⚫ Stock asset expansion through FD⚫ Develop new clients by wraps and bonds
through financial education⚫ Expand the customer and revenue base byleveraging alliances

Human, financial
and risk capital

Raise

Shizugin Lease
Finance Business

Providing value-added financing for all assets

Shizuoka Bank (including subsidiaries)⚫ Trying new business (M&A, aircraft leasing,etc.)

Equity Business

Acting as a hub connecting the community, customers, and groupcompanies to promote value creation⚫Industrial Transformation ⚫Regional Strategy ⚫ALM Operations
and Decarbonization⚫Cashless⚫BPR⚫Total Asset Sales / NISA

⚫ Promotion of venture leasing⚫ Entry into the local infrastructure business

Consulting Business

Securities Business
Pursuit of New Synergies

Shizugin Management Consulting

New Business

The best, fastest, and most up-to-date consulting business

Develop new business fields through establishingnew companies, M&A, etc.
⚫ Regional DX, temporary staffing, regional
revitalization companies under the Banking
Act, etc.

⚫

M&A support⚫

Business succession and management improvement⚫

New businesses such as DX and decarbonization
consulting

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This document includes statements concerning future business results.
These statements do not guarantee future business results, but containrisks and uncertainties.

Please note that future business results may differ from targets for reasons
such as changes in the business environment.

〔Contact〕
Shizuoka Financial Group. Corporate Planning Department (Yukimasa Okumoto)
TEL: 054-261-3111 (main) 054-345-9161 (direct)
FAX: 054-344-0131
E-mail: ir@jp.shizugin.com URL: https://www.shizuoka-fg.co.jp/

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