February 8, 2024－
Financial Results for the First Nine Months of FY2023 ending March 31, 2024
Main Questions and Answers[Mid-Term Plan]

number of customers with housing loans and card loans increased from about 0.36 million

Q. What is the probability of achieving consolidated net income of ¥75.0 billion in the final

five years ago to just under 0.4 million. Corporate customers with loans have also

year of the mid-term plan?

increased from about 49 thousand five years ago to about 51 thousand customers. TheA. Both the revenue and profit for the third quarter have been favorable, with both non-number of corporate portal users is increasing, and the penetration rate of the corporate

consolidated and consolidated results reaching record highs. The Bank has positioned

portal for customers with loans has increased to just under 62%.

FY2023 as a year of upfront investment in the mid-term plan, and these results havebeen achieved while aggressively promoting strategic investments, and we feel

[Impact of a rise in interest rates]

confident about achieving the goals of the mid-term plan. Steady progress has been

Q. What competitors are you aware of regarding the trends of ordinary deposit interest rate

made in implementing initiatives in line with the basic policies of the mid-term plan,and short-term prime rates during the Bank of Japan's lifting of negative interest rates andand new challenges have been taken on while permeating the Purpose and Vision.

the subsequent interest rate hikes?

In terms of profits, the Group as a whole does not expect a significant increase in

A. The Bank considers this matter in light of market interest rate trends and the actions ofprofits of financial product sales, partly because Chibagin Securities focuses onother banks, including megabanks. However, since 74% of deposits are highly sticky

customer follow-up services. On the other hand, in addition to an upside in net interest

personal deposits, and the funding structure is stable, the Bank will not need to raise

income due to a rise in interest rates, it is also expected to curb credit-related expenses

interest rates extremely, even if internet banks raise interest rates significantly. It isand increase in gains on sales of stocks due to a rise in stock prices. Therefore, weexpected that a little over ¥4 trillion in lending will be linked to a rise in the short-term

believe that it has a high degree of certainty to achieve its targets for the final year ofprime in line with subsequent interest rate hikes.

the mid-term plan.
[Net fees and commissions]
Q. Please tell us the current situation and measures regarding the number of individual andQ. Are there any signs of a turnaround in the profit growth of financial product in the next

corporate customers in the current mid-term plan.

fiscal year?

A. The number of individual customers with deposit accounts has increased from about 3.8

A. Although some staff initially felt puzzled by the drastic change in the evaluation method

million five years ago to about 4 million, partly because of the ability to create accounts

in October, the amount of sales in the third quarter is gradually increasing, and we areon the Website. In addition, as a result of improvements in the convenience of apps, thefeeling a positive response that will lead to a certain level of profit growth in the next1

fiscal year and beyond.

Bank continues to explore opportunities for in-organic investment and growthinvestment, as well as consider strengthening shareholder returns to further increase[Credit-related expenses]

ROE.

Q. In the supervisory guidelines that the FSA considers making changes, there is a statementthat management improvement efforts will be "not postponed." In response to this, will

Q. In-organic investment may be targeted not only at new businesses and businessthe Bank consider provisions that are preventive and front-loaded in the fourth quarter?

companies, but also at banks. Whether there is any change in the way of thinking andA. During the previous mid-term plan, preventive and front-loaded provisions ofstance regarding the relationship with other banks.

approximately ¥3.0 billion per year and ¥10.0 billion for three years were made, it will

A. The Bank has benefited from each of these alliances, the TSUBASA Alliance, the Chiba-

be considered in the current mid-term plan period as well, as we look at each individualMusashino Alliance, and the Chiba-Yokohama Partnership, and has not changed its

customers with credit. The Bank has been controlling credit costs as a result of thethinking or stance regarding its relationship with other banks, which is to prioritize

proactive provision of all solutions by the credit and sales departments through thealliances.

Solution Review Meeting, and does not recognize that it is postponing management
improvement efforts, and will not consider making provisions in response to the changes

Q. The Bank announced a dividend increase of ¥2, and the dividend payout ratio is 37.8%.

in supervisory guidelines.

Are you considering the fiscal year ending March 2026, the final year of the mid-term
plan, when the dividend payout ratio will reach 40%? Is there any possibility of[Capital Policy]

considering further raising the dividend payout ratio in light of other banks raising their

Q. Are there assets that will further decrease risk assets in the future due to refinement

dividend payout ratio targets?

toward finalization of Basel III?

A. The Bank hopes to achieve a dividend payout ratio of 40% as early as possible. As theA. The current decrease in risk-weighted assets under the finalization criteria is the result ofBank's earnings grow and as we consider how to use the capital, raising the dividend if

the refinement of some loans for which parameters were previously set conservatively,

there is room to do so.

but the Bank does not expect risk-weighted assets to change as a result of the newrefinement at this time.

[Cross-shareholdings]
Q. Are there any advantages and disadvantages of transferring cross-shareholdings to pure

Q. Does a reduction in risk-weighted assets and an increase in the capital adequacy ratio oninvestment?

the basis of complete implementation of Basel III finalization affect capital policy?

A. Despite the rise in the stock market, the cross-shareholdings is steadily decreasing, andA. The Bank is not considering revising the target range of the CET1 ratio at this time. The

by the end of March 2024, the ratio to consolidated capital is expected to be 20% or less.
2

The cross-shareholdings that have been able to reach an agreement with the clients on

Chibagin Securities, and that it is possible to make a wide range of proposals tosales are being transferred to pure investment and are being sold while monitoring theindividual customers. We can make better proposals across the group that by leveraging

status of financial results, etc. We believes that there are no advantages or disadvantages

the market views and other skills of the Chibagin Securities employees.

to the pure investment transfer itself.
End[Business improvement order]
Q. What is the current situation regarding the abolishment of profit targets for financial
product by business improvement order? To what extent do you think the Bank has beenable to thoroughly implement its customer-oriented culture?
A. The Bank abolished its profit targets for the sale of financial products in the second halfof the fiscal year, and the amount of sales declined somewhat in October. However, it
increased toward December, and activities focusing on volume of activities andfiduciary duty are showing results. With regard to the thorough implementation of acustomer-oriented culture, in December last year we launched the Purpose and Vision
Permeate Project Team, chaired by the Group CSO, to listen to the voices of workplaces,
including those of Group companies, and to monitor the status of penetration. We are
now in the phase of translating the purpose and vision into substantive activities. Webelieve that our customer-focused activities will take root and have a positive impact onour profits.
[Group companies]
Q. What will you do with Chibagin Securities in the future? Given the tailwind of the new
NISA, shouldn't securities be utilized?
A. Chibagin Securities will make deeper contact with customers and offer more usefulproposals as it conducts activities that emphasize after-sales service. We also believethat it is possible to segregate the products and content proposed by the Bank and3