SURUGA bank, Ltd.

Financial Results for the Three Months
Ended June 30, 2022

August 10, 2022

■Actual Results for 1Q of FY3/23; Comparison with 1Q, FY3/22• Gross operating profit decreased by 1.5 billion yen year-on-year to 15.1 billion yen, mainly due to a decrease in net interest income.
• Expenses decreased by 0.6 billion yen year-on-year to 9.5 billion yen, mainly due to a decrease in non-personnel expenses due to progress in cost
reduction.
• Actual credit costs decreased by 2.1 billion yen year-on-year to 1.3 billion yen, mainly due to the fact that we implemented an additional allowancefor the share house loan claim that requested a lump-sum transfer of receivables in the previous fiscal year.
• Quarterly net income (non-consolidated) increased by 1.4 billion yen year-on-year to 3.9 billion yen.
• Quarterly net income (consolidated) increased by 1.5 billion yen year-on-year to 4.0 billion yen.
<Non-consolidated>

Factors causing variation in ordinary profit(comparison with previous year)(Billions of yen)
1Q resultsfor FY3/22

1Q resultsfor FY3/23Year-on-year

Main factors

Gross operating profit

16.6

15.1(1.5)

Net interest income

・ Decrease in interest on loans(average balance factors -1.2 billion yen, yield factor -0.8 billion yen)

Expenses

10.1

9.5(0.6)

Expenses・ Decrease in non-personnel expenses

Core net operating profit

6.3

5.6(0.7)

Net operating profit

・ Increase in provision for general reserve for possible loan losses

Net operating profit

13.4

6.1(7.2)

Actual credit costs

・ Additional provision for share house related borrowers dropped
・ Decrease in actual credit costs related to investment real estate loans

Ordinary profit

3.3

4.1+0.7

Net income

2.5

3.9+1.4

Actual credit costs

3.4

1.3

(2.1)

ROE(%) (Quarterly Net Income Basis)

3.9%

6.4%

(Billions of yen)
+0.8

+2.1

+0.7
+0.3

PreviousYear
Results
3.3+2.5%

ActualResults
4.1+0.0(0.5)(1.8)

Consolidated net income

2.5

4.0

+1.5
0

EPS (JPY) (consolidated)

11.0

21.5

+10.5

Ordinary profit(FY6/21)

Netinterest
income*1 Excludes gains/losses on bonds.

Net fees andcommissions

Other operating
income *1Expenses

Gains onStocks/otherActual creditcosts

Ordinary profit(FY6/22)* Since the figures in the above graph are rounded to the nearest unit, they may differ from the numbers in the table on the left.

1■Key Assumptions Underlying the Revised Earnings Forecasts for FY3/23• 1Q results and revised forecast for FY3/23 to include the following elements.
A) Actual credit costs
As a result of analyzing recent debtor trends, we expect that the progress of the structured suspension of repayments foreseen by the preventive allowances(see (c) below) will be pushed back further than expected at the beginning of the period.
B) Securities management (risk reduction based on market environment)(1) Allocation change of multi-asset funds (2) Partial sale of multi-asset funds (interim period)(3) Suspension of distributions from multi-asset funds (full-year forecast) (4) Sale of foreign shares denominated in foreign currencies (interim period)・ Assumptions for the actual credit cost outlook for the fiscal year ending
March 31, 2023
(Billions of yen)
Announcement on
May 13

Announcement on
August 10First half

Full-year

First half

Full-year

First half

Full-year

7.5

13.5

(0.5)

10.5

(8.0)

(3.0)

Normal credit costs (a)

3.5

5.5

(2.0)

3.5

(5.5)

(2.0)

Share house-relatedloans (b)

(2.0)

(2.0)

(2.5)

(2.5)

(0.5)

(0.5)

Preventiveallowance(c)6.0Actual credit costs

10.0

4.0

9.5

・ Assumptions for securities investment<Valuation difference on available-for-sale securities>

End of March 2022

Change(2.0)(0.5)(a) Actual credit costs for claims without special factors such as share house-related borrowers and organizational
negotiation partners are assumed to be 3.5 billion yen, a decrease of 2.0 billion yen from the last published value.
This is due to the fact that although the provision for general bad debts was included in the increase in the expected
loss rate due to the preventive allowance assumed for the current period (hereinafter referred to as "(c)"), theimplementation of the preventive allowance will be pushed back.
(-2.0 billion yen for the interim period, which is -5.5 billion yen compared to the previously announced value)(b) The actual credit cost for share house-related borrowers is expected to rise in the transfer price of the 4th sharehouse lump-sum transfer of receivables scheduled for the interim period, and it is assumed that the profit from thereturn of allowance for doubtful accounts will be -2.5 billion for the full year, an increase of 0.5 billion over thepreviously announced value.
(-2.5 billion yen for the interim period, which is -0.5 billion yen compared to the previously announced value)(c) As for the precautionary allowance, as a result of analyzing the trends of the target companies, while there weredebtors who stopped structured negotiations such as switching to individual negotiations, and while, as of the end of
the first quarter, the debtors who reached methods such as suspension of repayment are less than we expected at
the beginning of the period, we maintain our outlook that provisions in the current period due to changes in structured
negotiations, etc. will occur at approximately the level we assumed at the beginning of the period, and we assume adecrease of 0.5 billion yen from the last published value to 9.5 billion for the full year. (4.0 billion yen for the interim
period, which is -2.0 billion yen compared to the previously announced value)*We expect that there will be a certain amount of additional provisions for the current period.

Fair value

Net unrealized
gains (losses)(Billions of yen)

End of June 2022
Fair value

Net unrealized
gains (losses)

ChangeNet unrealized
gains (losses)

Other securities

454.2

(1.4)

460.7

(14.6)(13.1)

Shares

15.8

7.5

16.3

8.0

+0.5

Bonds

143.5

(0.3)

162.5

(0.7)

(0.4)

Multi-asset fund*

290.2

(9.7)

277.1

(22.8)(13.1)

4.5

1.0

4.6

0.8

(0.1)

Other

Based on the market environment, the following risk reduction measures
will be incorporated.
① The amount of risk (*) in the securities portfolio was halved compared to last year
due to changes in the allocation of multi-asset funds with relatively high risk(*) 10 years observation period, VaR of 120 days holding period, comparison of risk amounts inFebruary and July 2022

② Planned partial sale of multi-asset funds (interim period)③ The distribution of multi-asset funds, which was forecast in the initial results plan, isexpected to be suspended.
④ High risk foreign currency foreign shares (individual shares) are to be sold (interimperiod)

2

■Revised Earnings Forecasts for FY3/23• As a result of incorporating the factors on the previous page, ordinary income increased by 2.0 billion yen in the interim period to 40.5 billion yen, and by 1.0
billion yen for the full year to 77.0 billion yen.
• Actual credit costs decreased by 8.0 billion yen in the interim period to -0.5 billion yen and by 3.0 billion yen for the full year to 10.5 billion yen.
• Net profit (non-consolidated) increased by 8.0 billion yen to 10.5 billion yen in the interim period and by 2.0 billion yen to 8.5 billion yen for the full year.
• Net income (consolidated) is expected to increase by 2.0 billion yen to 9.0 billion yen.
(*) Timely disclosure on August 10, 2022 “Announcement Regarding the Revision to the Earnings Forecast”[Non-consolidated][Consolidated]
Earnings Forecast Values
Announced on May 13

Earnings Forecast Values
Announced on August 10

Full-year(B)

Full-year(D)First half(A)First half(C)Earnings Forecast(Full-Year)

ChangeFirst half(C) - (A)(Billions of yen)

Full-year(D) - (B)

ChangeValuesannounced
on May 13(E)

Valuesannounced
on August 10(F)

84.0

86.0

+2.0

(F) - (E)

Ordinary income

38.5

76.0

40.5

77.0

+2.0

+1.0

Gross operating
profit

30.0

59.0

28.5

56.0(1.5)(3.0)

Expenses

19.5

38.0

19.5

38.0±0.0±0.0Core net operating
profit

10.5

21.0

11.5

21.0+1.0±0.0

Net operating
profit

9.0

19.0

8.0

17.0(1.0)(2.0)

Ordinary profit

3.0

7.5

11.0

9.0

+8.0

+1.5

8.0

10.5

+2.5

Net income

2.5

6.5

10.5

8.5

+8.0

+2.0

7.0

9.0+2.0

Actual creditcosts

7.5

13.5(0.5)

10.5

(8.0)

(3.0)

3

■Revised Earnings Forecasts for FY3/23 <Comparison of KPIs for the Final Year of Phase One of the Med-Term Business Plan>• In the revised Med-Term Business Plan Final Year Earnings Forecasts, RA gross operating profit remained unchanged from before the revision, and OHR
rose 4% from before the revision (KPI not reached).
Net income increased by 2.0 billion yen in for both consolidated and non-consolidated compared to before the revision, and we assume a level thatexceeds the plan.
The capital adequacy ratio increased by 0.1% compared to before the revision, and we assume it will continue to exceed the plan.
• Expenses are proceeding with the structural reforms set out in the Med-Term Business Plan, and are expected to be 38.0 billion yen, which is -2.0 billion
yen compared to the Med-Term Business Plan, unchanged from before the revision.

Earnings Forecasts for FY3/23

FY3/23

Announcement on
May 13

Announcement on
August 10(Phase 1 Final Year)[KPI]

RA gross operating
profit *1

49.3

45.5

45.5

49.0

OHR *2

60%

64%

68%

Within 60%

Net income

7.8

6.5

8.5

6.0

12.3%

13.1%

13.2%

More than 10%

Consoli
dated

FY3/22
Results

Profit attributable toowner of parent

7.9

7.0

9.0

7.0

OtherIndicator

Non-consolidated(Billions of yen)

Expenses

39.7

38.0

38.0

40.0

Capital adequacy ratio*1 RA (Risk Adjusted) Gross Operating Profit = Gross Operating Profit - Actual credit cost
*2 OHR (Over Head Ratio) = Expenses ÷ Gross Operating Profit

4

■Actual Credit Costs, Share House-related Loans <Non-consolidated>• Actual credit costs for share house related loans were recorded at -0.1 billion yen.
• Actual credit costs on investment real estate loans other than those related to share houses were recorded at 0.9 billion yen.
• As of the end of June 2022, the balance of share house-related loans was 52.8 billion yen, with a coverage ratio of 96.88%, due to the past three lump-sumtransfers of receivables.

・ Actual credit costs / allowance for loan losses (1Q, FY3/23)(Billions of yen)
Allowance forloan losses

Item

Actual credit costs

Share house-related loans

(0.1)

25.4

Investment real estate loans *

0.9

91.2

Housing loans

0.1

3.2

Unsecured loans

0.0

3.2

Monetary claims bought

0.0

0.2

Business financing, etc.

0.2

8.8

Total

1.3

132.3

* Includes studio apartment loans, single building apartment loans, and other secured loans.

・ Coverage status on share house-related loans
Total credit
balanceA
March 2019
March 2020
March 2021

March 2022
June 2022

250.3
192.1
135.7
53.6
52.8

(Billions of yen)

Share house-related
loans

201.9
154.7
107.2
41.9
41.4

Mortgagecollateral orguarantee
B
91.4
72.7
52.5
26.2
25.7

Unsecuredportion
C
158.8
119.3
83.1
27.4
27.1

Allowance
D
139.3
102.5
76.7
25.7
25.4

Coverage ratio(B + D)/A
92.20%
91.29%
95.24%
96.87%
96.88%*Based on obligors of share house-related loans.
*Mortgage collateral or guarantee: Calculated by multiplying the estimated amount of collateral, etc. by a fixed rate (revised in first half of current fiscal year)*Total credit balance, share house-related loans: Loans and bills discounted, suspense payments equivalent to loans and bills discounted, and accrued interest on loans and bills discounted.

5

■Yield/Margins, Loans and Deposits Yield/Average Balance <Non-consolidated>•••

Based on the Med-Term Business Plan, the loan yield for the entire region that promotes the “quality” conversion of assets to middle-risk and middle-return, is 3.51%(total (E)).
The delinquency rate for consumer loans is affected by special factors, such as the fact that some share house-related borrowers want the bank to provide a 4thGroup’s request for lump-sum transfer of loans, and some customers who are using investment real estate loans have suspended repayment on the occasion ofstructured negotiations. As of the end of June 2022, it is 7.04% (A).
In order to improve the delinquency rate of investment real estate loans, we are not only supporting repayments by changing conditions, but is also providing feedback
to customers on information of concerns such as damage to real estate found in our own periodic surveys. We are also discussing changing the managementcompanies, and there has been no significant change in the overdue status of debts without special factors.
(Billions of yen)March 2022

Loan category
Period-end balance

Secured loans

Yield

June 2022
Delinquency rate

Period-end balance

Yield

Delinquency rate

1,693.1

3.09%

7.18%

1,659.4

3.08%

7.42%

Housing loans

457.6

2.79%

0.31%

449.7

2.77%

0.27%

Studio apartment loans

142.33.37%

2.64%

136.0

3.37%

2.76%

1,017.7

3.21%

8.96%

999.2

3.20%

9.31%

Share house loans

41.8

1.39%

61.91%

41.4

1.37%

61.92%

Other secured loans

33.4

4.57%

0.38%

32.8

4.51%

0.23%

145.4

10.40%

2.44%

139.6

10.45%

2.44%

Card loans

98.0

11.77%

0.89%

95.0

11.78%

0.94%

Unsecured certificate loans, etc.

47.4

7.57%

5.64%

44.6

7.61%

5.63%

Consumer loans (A)1,838.5

3.67%

6.81%

1,799.1

3.65%

7.04%

Consumer loans (excluding share house-related loans)1,784.9

5.37%

1,746.2

Single building apartment loans

Unsecured loans

5.57%

Investment real estate loans for asset management companies (B)

33.5

1.81%

－35.3

1.82%

－Structured finance (C)

68.9

2.27%

－

76.0

2.27%

－

Monetary claims bought (D)

59.7

1.89%

－

58.9

1.94%

－

2,000.8

3.54%

6.26%

1,969.5

3.51%

6.43%

Total (E︓A+B+C+D)*Delinquency rate = Loans past due for three months or more / loan balance. *Yield: Yield for customers (excluding guarantee fee and accrued interest), period-end balance basis.
*Yield and delinquency rate of studio apartment loans, secured loans, consumer loans, and the total (A+B+C+D) are calculated based on original claims before securitization.
*As the balance is aggregated by loan type, if borrowers of share house loans or customers participating in collective bargaining default on scheduled repayments, the delinquency rate of other types of loans will be affected.

6

■New Loan Execution Status• Executed 22.1 billion yen versus the FY3/23 full-year new loan execution plan of 190 billion yen (total (A) + (B)).
• Execution of personal loans and investment real estate loans for asset management companies will remain at 12.5 billion yen, but we will continue to secure contracts
for the current period, and the progress rate against the full-year plan exceeded 25%, including prospective projects. Execution of structured finance was 9.6 billion yen,
24% of the plan, and is progressing well.
• In terms of monetary claims purchased, we purchased a receivable (receivable amount: about 40 billion yen, assumed yield: 1.41%) in July 2022 from the market thatmatches the bank’s aims for middle-risk, middle-return.
• The 7th wave of COVID-19 and the surge in the price of materials due to the impact of the Ukrainian situation are ongoing and will work to promote our loans while
keeping an eye on the business environment and market trends.

· Trend in loan execution amount promoted in the Med-Term Business Plan
1Q, FY3/22(Billions of yen)

1Q, FY3/23

Forecasts for
FY3/23Year-on-year

Consumer loans

7.2

9.8

+2.6

110.0

Investment real estate loans for assetmanagement companies

2.8

2.7(0.1)*-

Subtotal

10.1

12.5＋2.4

110.0Structured finance

9.3

9.6＋0.3

40.0

Total (A)

19.4

22.1＋2.7

150.0ーーー

40.0

19.4

22.1+2.7

190.0

Monetary claims bought (B)Total (A) + (B)*The planned amount of investment real estate loans for asset management companies is included in the 110.0 billion yen of consumers loans, because we conduct
the same promotional activities as for investment real estate loans for individuals.

7Reference Materials

■ Actual Results for 1Q of FY3/23; Comparison with Previous Forecast[Non-consolidated](Billions of yen)[Consolidated]
Earnings
ForecastValues(Full-year)
Announced
on May 13(4)

Earnings Forecast Values
Announced on May 13
1Q results(1)

Full-year(2)

First half

Progress(1)/(2)

Ordinary income

18.4

38.5

76.0

24.6%

Gross operating profit (A)

15.1

30.0

59.0

25.5%

Expenses (B)

9.5

19.5

38.0

25.0%

Core net operating profit

5.6

10.5

21.0

26.7%

Ordinary profit

4.1

3.0

7.5

Net income

3.9

2.5

Actual credit costs (C)1.3

RA Gross OperatingProfit (A-C)

13.8

Annual dividend pershare

1Q results(3)

Progress(3)/(4)

20.6

84.0

24.6%

55.2%

4.3

8.0

53.7%

6.5

60.8%

4.0

7.0

58.0%

7.5

13.5

9.8%

22.5

45.5

30.2%

6 yen

* RA (Risk Adjusted) Gross Operating Profit = Gross Operating Profit - Actual credit cost

Reference Material 1

■ Yield/Margins <Non-consolidated>
Net Interest Margin

Loans (average balance / yield)
Yield on loans and bills
discounted

Average loan balance

Loan-deposit
margin (overall)

Loan-deposit
margin(after deductionof expenses)

Net interest margin(Billions of yen)<Special factors behind change in loans and bills discounted＞
Jun ‘19 Studio apartment loan securitization(Approx. -100 billion yen)
Jun ‘20 Collection of loans from founding families, share houses
transfer of claims (Approx. -100 billion yen)
Jun ‘21 Transfer of share house claims (Approx. -44.2 billion yen)
Jun ‘22 Transfer of share house claims (Approx. -60.5 billion yen)

3,172.4
2,782.0

2,476.7

3.39%

2.16%

3.15%

1.64%

3.11%

1.80%

3.04%

1.79%

1.74%

3.45%

3.19%

Jun ‘18Jun ‘19 Jun ‘20 Jun ‘21 Jun ‘22

3.16%

1.00%0.81%

Jun ‘19Jun ‘20Jun ‘21

2.93%

0.68%

Yield on deposits(Billions of yen)

3,069.0

0.05%

Jun ‘18

3.08%

Deposits (average balance / yield)
3,942.5

1.21%

2,125.3

2.89%

Average deposit balance

1.46%

2,294.3

0.03%

3,201.6

3,264.9 3,325.9

0.04% 0.04% 0.04%

Jun ‘22Jun ‘18 Jun ‘19 Jun ‘20 Jun ‘21 Jun ‘22

Reference Material 2

■Trends in Expenses, OHR, and Capital
Trends in Capital & Capital Adequacy Ratio

Trend in Expenses and OHR <non-consolidated>
Gross Operating Profit

Personnel

Non-personnel

expenses

expenses

Taxes

Equity capital

OHR（Billions of yen）

（Billions of yen）

12.14%
8.65%

26.4

21.5

10.49%

16.6

260.7
241.1

15.1
11.5

10.4

10.1

3.7

3.6

3.5

56.8%

61.2%

62.9%

6.6

5.7

5.4

5.0

1.0

1.2

0.9

1.0

0.9

Jun ‘18

Jun ‘19Jun ‘20Jun ‘21Jun ‘22

4.3

45.7%
6.6

3.6

53.7%

12.54%

12.81%

328.2

18.3

12.0

Capital adequacy ratio

249.1

219.0

9.5

Jun ‘18

Jun ‘19Jun ‘20

Jun ‘21Jun ‘22

Reference Material 3

<Inquiries>
IR Office, SURUGA bank, Ltd.
Tel: +81-3-3279-5536
e-mail: ir.koho@surugabank.co.jp
The foregoing material contains statements regarding future business performance. These statements are notintended as guarantees of any specific future performance, which is subject to a variety of risks anduncertainties. Actual future business results may differ from the targets contained in the present material, due
to unpredictable changes in the external business environment.