August 7, 2023－
Financial Results for the First Three Months of FY2023 ending March 31, 2024
Main Questions and Answers[Loans and Bills Discounted / Yield of Loans and Bills Discounted]

Q.What is the percentage contribution of (1) the rising of the pass-through rate and (2) high-Q. Can the Bank sustain the loan interest rates improve and lending volume growth in thespread projects to the improvement in yields on domestic loans? Please also tell us about

current interest rate environment?

the specific projects and the future outlook in (2).

A. The pass-through of fixed-rate loans relative to increases in the market rate has increased,A. The contribution of factor (1) accounts for the majority. Factor (2) focuses on high-spread

and we believe that increases in market rates will continue to improve net interest

projects such as LBO loans, non-recourse loans, and structured finance with allianceincome. At present, there is a strong desire for capital investment, and in the future, it isbanks. As for loans outside Chiba prefecture, while the volume of loans has been

expected that there will be the development of the new runway and surrounding areas atgrowing, the rise in yields due to such high-spread projects has also contributed

Narita Airport and the establishment of new logistics-related and manufacturing bases

significantly to net interest income. However, since prefectural loans have a greaterin conjunction with the full opening of Ken-O Expressway in Chiba prefecture. In

impact on net interest income, focusing on factor (1) will lead to an increase in net

addition, there is demand for working capital, which had been shrinking due to theinterest income in the future.

COVID-19, so the momentum for loan growth will remain unchanged.
Q. Regarding the pass-through rate for renewal of interest rates on fixed-rate loans, what is
Q. What is the background for the rise in the pass-through rate of the business fixed- loan
yields to 77.1% and how sustainable is it?

the size of the loans covered and the ratio of apartment loans? Are there any differencesin the pass-through rates between apartment loans and others?

A. As a result of tenacious negotiations for the renewal of interest rates on fixed-rate loans,

A. Over three years, fixed-rate loans with renewal dates will amount to around 3 trillion yen,

the pass-through rate, which was assumed to be around 40% in our plan, has recently
risen to nearly 80%. There are no special or seasonal factors, and we consider it to be

and the quarterly amount will be roughly 250 billion yen. Among them, the ratio of loans
to the real estate rental business is about 70%. There is hardly any difference in the pass-sustainable in a rising interest rate environment in the future.

through rates of business lending and real estate lending.

Q. Is there a risk that a rise in interest rates in medium-term will worsen the momentum of[Net Fees and Commissions]

growth in real estate-related loans, such as apartment loans?

Q. In the plan for fees and commissions in the Mid-Term Plan, it was planned to increase

A. In the first quarter, the amount of loans executed for real estate rentals increased by morethan 30% compared to the previous year, and current demand is favorable. Althoughprofits related to financial products, but is there a need to reconsider the earnings outlook,including the way it will govern in the future?

rising interest rates may have a certain impact, the population in Chiba Prefecture is not

A. For financial products, the Bank will strengthen its policy of focusing on recurring

expected to decline significantly and the trend of increasing household numbers is
expected to continue, so we expect active real estate investment to continue in the future.

revenue by thoroughly implementing a customer-oriented sales system using the new
proposal-tool "Okane No Basket (Money Basket)" at the branch counter introduced in1

May. Corporate business fees are performing well, and it is possible that items otherthan those related to financial products will be covered depending on future progressof BOJ accounts balance of about 4 trillion yen. However, the pace at which yen bonds
will be purchased in the second half of the fiscal year will be planned based on the future

related to financial products.

interest rate outlook.

Q. Are cashless-related fees progressing as planned?

Q. Is the loans to the Ministry of Finance and the special-interest component of BOJ

A. If the impact of the transfer of operations from the Chibagin JCB, which is scheduled inaccounts transferred to yen bonds investments?

August is deducted, it is progressing around 20% against the full-year forecast, and it isA. The question of whether to transfer will basically be decided by economic rationality, but

in line with the plan.

based on the market outlook, the Bank will invest in yen bonds to the extent that
unrealized gains/losses can be controlled. The Bank does not currently intend to[Securities Management]purchase the securities for held-to-maturity purposes as the Bank places importance onQ. Regarding investing in yen bonds, I would like you to tell us about your future stance,liquidity so that it can replace stocks as needed. In addition, the outstanding amount ofsuch as the amount, maturity, and purchasing pace.

loans to the Ministry of Finance is only around 200 billion yen, and we do not expect it

A. In the current fiscal year, interest rates are expected to rise, and the Bank has accumulated

to decrease significantly.

mainly JGBs with asset swaps. At this time, the Bank continues to invest mainly infloating-rate bonds and is cautious about fixed-rate bond investment. In later half of first[Gains/losses Related to Stocks, etc]

half of the fiscal year, the Bank plans to purchase 50 billion yen per month by combining
fixed and variable bonds. If the yield on the five-year bond to be purchased reaches over

Q. The reason for the recording of 3.6 billion yen in the first quarter in gains/losses related
to stocks, etc. What is the possibility of an upside in the plan?

0.25% level, we will allocate more than half of the purchase to fixed bonds. The pace ofA. In the full-year forecast of 5 billion yen for gains/losses related to stocks, etc, the Bank

purchases will be adjusted, taking into account in financial positions trends and otherfactors.

posted 3.6 billion yen gain on the sale in the first quarter due to the strong stock market.
The Bank has sufficient available-for-sale securities and will consider upward revisionof gains from the original plan while monitoring market trends and progress in results.

Q. If yen bonds were purchased at about 50 billion yen per month, what would the netincrease in the balance be?

[Capital Policy / Shareholder Returns]

A. In current fiscal year, the repayment amount will be 50 billion yen for the first half andQ. What is your stance on share buybacks?

100 billion yen for the full year. If the Bank purchases 50 billion yen per month and 150
billion yen from July to September, the net increase from the end of June will beA. We are faced with the need for careful judgment, but we maintain the policy of returning
profits set forth in the current Mid-term Plan and will flexibly return profits toapproximately 100 billion yen. Even If the Bank purchases 50 billion yen per monthshareholders so that we can meet the expectations of shareholders.

throughout the year and the net increase after deducting redemption amounts to about
500 billion yen, it will be able to fully cover the funding situation by allocating a portion2

[Business Improvement Order]
Q. Is there any impact on the morale of staff? What message has management communicatedto staff?
A. President conveyed the importance of customer confidence and the thoroughimplementation of customer-oriented business management to all group officers andstaff, and communicated to them that management and staff would work together inorder to be reborn as a bank that is trusted by everyone.
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