Financial Results for FY2022(Ended March 31, 2023)

May 2023

Table of Contents
Financial Results for FY2022

Management Strategy

Summary of Financial Results

Improvement of Comprehensive Consulting Ability
Corporate consulting
16

Net Interest Income
Securities

5-6
7
8

Cooperation between the two banks,
consulting for individuals

17

DX Strategy

Net Fee and Commission Income

9

G&A expenses

10

Net Credit Cost and NonPerforming Loans
Capital Adequacy Ratio andShareholder Return
Earnings Forecast
Analysis of the current status andevaluation related to PBROverview of DX strategy
Various initiatives

18
19-20

GX Strategy

11
12
13
14

Overview of the environmental strategy
Promoting the decarbonization of banks
Strengthening decarbonization support forbusiness partners
Promoting the decarbonization of the region
Enhancing response to TCFD

21
22-23
24-25
26
27

HR Strategy
Overview of HR strategy
Continuous creation of self-directed humanresources
Empowering diverse human resources andcreating a better working environment

28-29
30
31

Strengthening governance
Reduction in cross-shareholdings

32

Summary
Financial Results● The top line was maintained as an increase in net fees and commissions and cost reductions offset a decline in net
interest income.
Net fees and commissions increased steadily (by ¥1.6 billion from the previous fiscal year) due to the strengthening of
consulting-related services.
G&A expenses decreased (by ¥4 billion from the previous fiscal year) mainly due to a reduction in personnel expenses
by streamlining operations.

● In securities management, JPY-denominated and foreign bonds were sold in light of interest rate risk.
¥44.1 billion valuation gains were retained on the overall securities portfolio.
The balance of JPY-denominated and foreign bonds was controlled from the perspective of mitigating the impact of
unrealized losses on equity capital and interest rate risk.

● Shareholder return enhancement
We announced an increase in common stock dividend and acquisition of treasury stock in light of robust main business profit
and earnings outlook.
(Common stock dividend from ¥35 to ¥37, acquisition of treasury stock up to ¥4 billion)

Management Strategy● Strengthen comprehensive consulting capabilities● Green Transformation (GX) strategy

Number of consultations and consulting fees increased steadily
Fee revenue ratio rose to 16.14% from 15.14%

Supporting business partners: Finance and consultation grew
sharply
FG:
Received a “B” rating in the CDP
Climate Change Survey
Alliance:
Joining the GX League, stronger ties
with MEJAR banks● DX Strategy
Supporting business partners: Starting external sales of ERP
packages
More app features
FG: Business transformation using data integration
platform
Establishing database for advanced marketing● HR Strategy
Establishing various KPIs centered on the three pillars of humancapital management after sorting out issues to realize human capitalmanagement linked to management strategy● Strengthening governance
Developed reduction target for cross-shareholdings(reduction equivalent to 25% of book value over three years)

3

Financial Results for FY2022

Summary of Financial Results
Financial Summary for FY2022[Group Consolidated]

Plan

ResultChangeOrdinary profits

31.0

26.3

(3.8)

Net income attributable to owners of the parent

19.0

21.4

0.9
(JPN Bn)[Total of two banks]

Hokuriku Bank

Hokkaido Bank

Plan

ResultChangePlan

ResultChangePlan

ResultChange

124.5

119.8

(4.9)

69.0

65.2

(3.1)

55.5

54.6

(1.8)

100.5

(5.4)

50.9

(5.3)

49.5

(0.0)

Loans

82.6

0.0

41.3

0.1

41.3

(0.1)

Securities

21.7

2.8

12.9

0.3

8.7

2.5

Net fees & commissions

19.4

1.6

12.6

1.2

6.7

0.3

Net other income (excluding gains (losses) related to bonds)

(0.0)

(1.2)

1.5

0.8

(1.6)

(2.1)

74.7

(4.0)

39.4

(2.2)

35.3

(1.8)

Core gross business profits
Net Interest Income

G&A expenses (-)

78.5

62.39% (0.76%)(Reference) OHR

45.0

(0.9)

(excluding gains (losses) related to cancellation of investment trusts)

44.1

Gains (losses) related to bonds

Core net business profits

46.0

Net business profits*
Net credit cost (-)

41.5

14.5

Gains (losses) related to stocks

37.0

60.46% (0.46%)
27.5

25.8

(0.9)

(0.6)

24.9

(18.9)(14.6)

26.1(15.5)

7.7

(5.8)

10.5

7.6

9.0

64.69% (1.17%)
18.5

19.2

0.0

(0.6)

19.2

(0.0)

(10.5)

(8.5)

(8.3)

(6.0)

15.2

(9.4)

10.8

(6.0)

9.3

0.8

(1.6)

(6.6)

9.6

5.4

0.9

2.2

5.5

Ordinary profits

32.0

26.9

(3.4)

18.5

14.5

(6.3)

13.5

12.4

2.8

Net income

20.5

23.0

1.1

11.5

14.3

1.2

9.0

8.7

(0.0)

*Before provision (reversal) of general allowance for loan losses

5Summary of Financial Results
An increase in net fees and commissions and cost reductions offset the decreasein net interest income resulting from an increase in foreign currency funding costs.
Factors contributing to the change in top
line (core net business profits)

Factors contributing to the change in bottom
line (net income)

Total of twobanks
Securities interest +2.8
Foreign currency funding costs (8.3)
Netinterest
incomePersonal insurance
commission +0.8
Loan-related
expenses (0.7)

(5.4)
Fees

46.0

1.6

Net foreign exchange
gains (losses) (1.2)

FY21

Others(JPY Bn)

Total of twobanks
Gains (losses) on sale ofstocks +7.6
Gains (losses) on sale offoreign securities (14.0)
OthersG&A
expenses(1.4)

Core netbusiness
Gainsprofits(losses) on(0.9) securities

Net
extraord
inary
gains
(losses)

4.0
(6.9)

(1.2)

45.0

(3.6)
5.8

21.8

FY22

FY21

23.0
Incometaxes

Net credit
costs

Personnel expenses (1.2)
Non-personnel expenses(2.5)
Taxes (0.2)

8.2

Tax exemption of
taxable losses over the
past years 5.9

FY22

6

Net Interest Income
Loan balance increased mainly in prime areas, resulting in the interest on loans
remaining at the same level as the previous fiscal year.
Factors contributing to the change
Total of two banksin net interest income

Net Interest Income(JPN Bn)
Total of two banks
FY22

FY22

FY22

Change

50.9

(5.3)

49.5

(0.0)

82.6

0.0

41.3

0.1

41.3

(0.1)

9,417.3

246.1

0.87% (0.03%)

Interest rate

5,173.9

145.9

0.79%

(0.02%)

4,243.4
0.97%

2.1

(2.1)

100.2

21.7

2.8

12.9

0.3

8.7

2.5

72.3

1,204.4

20.1

876.2

52.1

1.04%

0.10%

1.07%

0.01%

0.99%

0.24%

Interest rate

Securities
foreign+2.8

currency
costs(0.03%)

2,080.7

Securities

Loans
+0

Change

(5.4)

Loans

Avg. balance

Hokkaido Bank

100.5

Net Interest Income

Avg. balance

ChangeHokuriku Bank

Accumulation of balances covered the lower
interest rates.

105.9

Average Interest
balance rate

0.7

2.1

Average Interest
balance rate

(8.3)
0.2
Yendenominated
costs

FY21

0.92%

(JPY Bn)
100,000
10,0008,489.8

80,0008,000
60,0006,000

4,000
40,0004,046.4

4,306.4

0.87%

9,171.1

9,417.3

4,155.5

4,182.0

Loans interest
rate

PublicCorporate

Consumer loan

Corporate loans stopped declining, while consumer
loans’ slide slowed.
Corporate

1.72%

1.59%

1.48%

1.44%

0.84%

0.84%

0.85%

0.84%

0.32%

0.26%

0.22%

0.18%

FY19

FY20

FY21

FY22

Consumer

2,491.3

2,623.7

2,794.2

2,899.5

1,952.1

2,110.8

2,221.4

2,335.7

FY19

FY20

FY21

FY22

2,000
20,00009,041.1

0.90%

FY22

Interest rate by segment Total of two banks

Ave. balance and rate of loans Total of two banks
0.99%

100.5

loan
Public7

Securities Portfolio
Valuation gains on the overall securities portfolio were maintained,
and bond balances were controlled in light of interest rate risk.
Securities portfolio

2,500
25,0002,199.5
2,100.1
2,000
20,0001,500
15,000(JPY Bn)

Sales of U.S. dollar-denominatedbonds$1,871 million (FY2022)(JPY Bn)*Simulated gains/losses based onmarket outlook and sold mainly
bonds with short durations

1,846.7

1,289.1

1,321.1

Balances controlled fromthe perspective ofcontaining interest rate risk

1,119.8
1,000
10,000JPYdenominatedbonds
Foreign bonds

FY22

407.0

283.6

(18.9)
6.4
25.4(14.6)
0.2
16.4

Net sales profit/loss on stocks
Gain on sale
Loss on sale (-)
Amortization (-)

10.5
18.1
1.0
6.6

7.6
8.0
(1.6)
2.0

Overall securities portfolio(JPY Bn)

221.0

210.0

230.3

250.3

233.1

21/3

22/3

23/3

0

Impact on capital adequacy
ratio if unrealized losses are
realized: (approx. 0.9%)

111.0
1,000
100

115.6

98.0

102.5

Stocks75.2
44.1

StocksForeign bonds

20
200

5,000
500

234.9

ChangeGains (losses) related to bonds
Gain on sale
Loss on sale (-)

600
60

345.6

Total of twobanks

Revenue and valuation difference

Total of two banks

Investment
trusts, etc.

(6.9)
(20)
△
200

(24.2)(15.6)(7.4)

JPY-denominatedbonds(35.3)(60)△
600

Investment trusts,

21/3

22/3

23/3

etc.

8

Net Fee and Commission Income
Non-interest income ratio rose steadily due to enhanced
consulting capabilities.
Total of twobanks

Net Fee and Commission Income

See pages 15 and 16 forthe related initiatives

Total of two banks

Fee revenue ratio(JPY Bn)

FY22

16.14%
Change(1) Net fees and commissions

19.4

1.6

Fees and commissions

35.1

0.1

Remittance

9.2

(0.5)

Assets under custody

6.3

0.1

Solution services

5.0

0.2

2.3

0.1

1.4

0.1

0.9

0.1

15.6

(1.4)

0.9

(0.4)

12.1
0.0

(0.9)
0.0

(0.0)

(1.2)

Private placement bond, syndicatedloan
M＆A support, business succession
support, etc.
Business matching
Fees and commissions payments (-)
Remittance (-)
Loan related expenses (-)(2) Net trading income(3) Net other income(excluding gains (losses) related to bonds)

Gains (losses) on foreign exchange

15.14%
14.46%
14.13%

FY19

FY20

(1.2)

(4) Fee revenue (1)+(2)+(3)

19.3

0.4

(5) Core gross business profits

119.8

(4.9)

(6) Fee revenue ratio (4)/(5) (%)

16.14

1.00

FY21

Consulting-related service revenue
120
12.0

9.1
90
9.0
60
6.0

5.4

FY22

Total of two
banks

10.8

11.3

6.2

6.3

4.6

5.0

FY21

FY22

8.8

Assets undercustody

5.3

30
3.0

(0.0)

transaction

Long-term
goal: Over
18%

3.6

3.4

FY19

FY20

Corporate

consulting

9

G&A expenses
Steady reduction in expenses; expect to increase due to several factors
such as investment in systems and relocation of the Hokuhoku Sapporo Building this fiscal year.

G&A expenses and OHR

Total of two banks

Main factors contributing to the change in G&A
Total of two banks
expenses
Main factors contributing

FY22

69.27%

63.15%

38.5

82.3

36.7

78.8

35.4

\32.9 billion(\2.5 bn)

\36.2 billion(\1.2 bn)Taxes

\5.6 billion(\0.2 bn)

Total

\74.7 billion(\4.0 bn)

expenses

68.19%

1,000
100

85.3

Non-personnel

OHR

Personnel

62.39%

expenses

32.9

Nonpersonnel
expenses
Personnel
expenses

37.4

premiums and depreciation

Fewer employees due tooperational efficiency

Investment outlook
Main factors contributing to
the increase

Taxes

39.2

Decrease in deposit insurance

74.7

500
50

40.5

to the change

Change(JPY Bn)

36.2

74.7

78.5

Systems investment(MEJAR, etc.)
Personnel system revision
Hokuhoku Sapporo Building
relocation

0

6.3

6.3

5.8

5.6

FY19

FY20

FY21

FY22

Others including taxes

FY22

FY23 Plan

10

Net Credit Cost and Non-Performing Loans
Net credit cost fell despite the accumulation of loans,and the NPL ratio remains unchanged from the previous year.
Balance of non-performing loans Total of two banks

Net credit costs(JPY Bn)(JPY Bn)
0.14%

13
130

12.0
2.7

0.14%

Credit cost ratio

0.14%

13.0

13.5

4.6

4.9

7.7

△(2)
20

9.2

FY19

8.4

FY20

8.5

9.3

FY21

(1.6)
FY22

Bank

NPL ratio

2.24%

2.23%

212.5

219.0

1.93%

Hokkaido

1.71%

Bank
Hokuriku

8
80
3
30

3,000
300.0

0.08%

13.6

2,000
200.0

13.2

180.1

153.4

Bankrupt andsubstantiallybankrupt

11.5

12.8

Doubtful

Breakdown of net credit costs

164.8(JPY Bn)

FY22
Net credit costs
General allowance for loan
lossesSpecific allowance for loan
losses and others

1,000
100.0

Hokuriku Hokkaido

7.7

9.3

(1.6)

(2.4)

(2.4)

-

10.2

Substandard

143.1
119.5

Total of two
banks

168.4

11.8

(1.6)

21.1

25.6

34.1

37.5

20/3

21/3

22/3

23/3

0

117

Capital Adequacy Ratio and Shareholder Return
Shareholder returns strengthened while balancing capital
Consolidated capital adequacy ratio

Shareholder return
We announced an increase in common stock dividends andshare repurchases.
(Common stock dividend from ¥35 to ¥37, acquisition oftreasury stock up to ¥4 billion)

Capital adequacy ratio

9.45%(JPY Bn)

9.54%

9.49%

8.94%
600.0
6,000

529.8

Total return ratio

549.9
42.9

48.3

561.6
37.6

570.2

4,000
400.0

2,000
200.0

69.6%
Preferred shares

483.9

499.5

511.5

527.5

87.4%

(JPY Bn)

32.2

150
15.0

53.1%

52.1%
Acquisition oftreasurystock

Others10.0100

Redemptionof preferred
stock

0

20/3

21/3

22/3

23/3

Preferredstock
dividend

5.0
50

Factors contributing to the change in risk-weighted assets
Prioritized risk-taking
especially in the prime areas
Business
lending

Consumer loan0
Securities

FY20

FY21

6,004.4
Dividends per common stock

5,881.1

¥40

¥35

FY22

FY23
(*plan)Commonstock
dividend*Estimates based on current earnings anddividend forecasts

¥37

¥37

Appropriate risk control basedon market outlook
FY21

FY22

*Total return ratio=(Dividends + Redemption + Purchase of Treasury Stock)
Net income attributable to owners of the parent

12Earnings Forecast
Ordinary profits are expected to be in line with the previous year, although a decreasein net interest income is factored in due to an increase in foreign currency funding costs.
Forecasts for FY23
(JPY Bn)(JPY Bn)

Total of two
banks

FY23
forecast

ChangeOrdinary profits

26.0

(0.3)

Net income*

17.0

(4.4)

FY23

Core grossbusiness profits

G&A expenses(-)
Core netbusiness profits

Net credit
costs
Ordinary

Dividend forecasts for FY23

profits
Net income

Dividend percommon share
Dividend perpreferred share

Year-end

Hokkaido Bank

FY23

FY23

forecast Change forecast Change forecast Change*Net income attributable to owners of the parent

Interim

Hokuriku Bank

115.0

(4.8)

63.0

(2.2)

52.0

(2.6)

80.0

5.2

42.5

3.0

37.5

2.1

35.0

(10.0)

20.5

(5.3)

14.5

(4.7)

8.0

0.2

4.5

(4.8)

3.5

5.1

27.5

0.5

15.0

0.4

12.5

0.0

19.5

(3.5)

11.0

(3.3)

8.5

(0.2)

Annual―\37.00\37.00

\7.50

\7.50

\15.0013

Analysis of the current status and evaluation related to PBR
Analysis of current status and evaluation
・Hokuhoku FG (Hokuriku Bank and Hokkaido Bank) is the fifth-largest regional bank in terms of total assets.
・PBR and its components, ROE and PER, are in the middle and low end of the regional banks.
・We assess that this is mainly due to a lower return on risk-weighted assets (RORA) than other banks.
(Market capitalization/net assets)

PBR 0.24 times=

Price/book value ratio(Market capitalization/net income)(Net income/net assets)= Adequacy of stock price level

ROE

3.0%

Return on equity×= Efficiency=

8.1 times

Price-earnings ratio= Growth potential(RWA/Net assets)(Net income/RWA)

ROE

PER

×

Financial leverage 10.4 times

Consulting ability × large geographic customer base + initiatives in new fields= Expanding revenue base and improving productivity at the same time・ Strengthening consulting functions and group collaboration (pp. 16–17)
・ Expanding business in GX and DX fields (pp. 18–27)
・ Investing human capital to secure human resources who can drive
sustainable growth (pp. 28–31)

Improving capital efficiency
・ Reduction in crossshareholdings (p. 32)
・ Acquisition of treasury
stock
・ Redemption of preferred
stock

RORA (Return on Risk-Weighted Assets) 0.3%

Growth Strategy

Capital Strategy

・Sequentially improving RORA, ROE/PER, and PBR by increasing profitability andgrowth expectations through growth and capital strategies.
*ROE, PER, and RORA are estimates based on the net income forecast for FY2023.

14

Management Strategy

Improvement of Comprehensive Consulting Ability
Strengthening corporate consulting
A steady increase in the number of consulting service contracts with the development of human resources
and the enhancement of non-face-to-face tools
Expansion

Existing
consulting area

Temporary staffing
business
DX & IT introduction
supportSupport for
decarbonization

Corporate consulting revenue

Existing consulting area

(JPY Bn)

4.6

Number of M&A, business succession
and consulting contracts

5.0

3.4

548

Development of thesystems

366
FY20

FY21

FY22

159

Development of the systems
Development of highly skilled human resources by
dispatching personnel to outside companies
A measure to cultivate a high level of expertise and practicalskills, as well as to build personal networks
Number of personnel dispatched in FY22: 16 (total of two banks)

319

244

164
43

159
50

157

FY20

FY21

FY22

Business
succession
M＆A

72

Expansion of consulting area

Development of training system
Number of cases of DX support
Establishing a training system to enhance expertise and develop
more practical skills
564
Participants in related training in FY22: 1,150 (total of two banks)
Assistance in obtaining qualifications
Developing a support system for the acquisition ofqualifications, mainly through the expansion of incentives, toraise the level of consulting capabilities
Number of consulting-related qualification holders: 315 (totalof two banks)
Leveraging non-face-to-face tools
Providing non-face-to-face communication tools equipped withchat, web interview, and document exchange functions tocustomers from March 2023.

Consulting

453

11

28
145

301

FY21

Number and amount of ESG
leases executed

Number oftransactions

98

FY22

FY21

Amount(JPY M)

FY22

Promote ESG leasing in partnership with Hokugin Lease
Designated as an excellent business operator since FY2022

16

Improvement of Comprehensive Consulting Ability
Strengthening cooperation between the two banks
Reinforcing the system through collaboration meetings between thetwo banks, standardization of the business-matching (72 collaboration
meetings held in FY22)
Broadening the range of proposals for business partners by sharing
resources

Strengthening consulting for individuals
Delivering optimal proposals according to customer needs and life stages
Contributing to customers’ asset formation and portfolio construction bystrengthening consulting functions
Providing one-stop solution services in asset
formation and succession needs

Hokuriku Bank and Hokkaido Bank
collaborate to promote wide-area businessmatching and co-financing
Reviewing product lineup to match market

Hokkaido-area loanbalance(JPY Bn)

3,272.8

conditions and customer needs
Number ofachievements (Number of contracts)
Full productlineup

1,901

3,306.3

Proposals
accordingto lifestage

Thoroughimplementationof a customeroriented attitude

Enhancementof thesystems

Establishing Fiduciary
Duty Promotion Committee

555
Improvement

22/3

FY21

23/3

of services
provided

FY22

Improving the functionality of apps (investment trust procedures,
recommendation functions, etc.)
Holding seminars
Renewal of investment trust website*Initiatives to help resolve customer issues through collaboration between the twobanks (co-financing within the group, wide-area business-matching, etc.)

Number of business-matching cases inwhich two banks cooperated
1,241

Number of
deals

FY20

FY21

11,481

127,586
6,301

Number ofcontracts

341
96

insurance

119,295579
127 41

Number of cases of Trust /Number of funded(Number of
One-time payment (Number of
product contracts policyholders)
contracts)

22/3

FY22

23/3

*Dollar-cost averaging mutual fund holders, and level premium
insurance contracts

FY21

FY22

*Number of contracts for trust products and one-time payment life
insurance

17

DX Strategy
Overview of DX strategy
Improve profitability by increasing productivity through streamlining and boosting the top line
through earnings enhancement
Estimated impact of initiatives taken in
FY2022 on revenue (annual)¥385 million

Restructuring of clericalwork

Development of new branchformats

DX Human Resource
Development

Digitize operations and create
optimal service lines from thecustomer’s perspective

Pursue new branch formats
with higher customer
satisfaction

Enhance face-to-faceservices
Develop new businessfields

Efficiency gain

Rebalancing
personnel

Maximizing theeffectiveness of the apps
Expand banking functions on apar with branches

Linkage

Realization of sophisticatedmarketing
Establish a system to respond to
customer needs in a timely manner
through data analysis

Venturing into new business
areas

External provision offunctionality

Build a structure that allows us
to continue taking on challenges
in new areas

Provide services that help capture
new revenue opportunities andsolve stakeholders’ issues

Earnings enhancement

18

DX Strategy
Various initiatives (clerical work restructuring, maximization of application effectiveness, marketing
sophistication, external provision of functions)
Restructuring of clericalwork
Over-the-counter digitalinterface
Data integration
platform
Electronic receipt andexecution
Remote consultation
function
Advanced ATM
functions

Aim to increase the value as a financial service provider by digitizing operations and creating
optimal service lines from the customer’s perspective.
TOPICS
Improved efficiency of back-office operations through digitalization (use of data integration
platform)
We have introduced a system that eliminates and streamlines paperwork at the branches, making
it possible to process a variety of transactions without making customers wait. We are expanding
the scope of digitalized operations as needed.
(Example of digitalized operations)
Automated address change, account opening, and back-office operations forforeign exchange Estimated reduction in administrative work hours: 22,000 hours

Maximizing theeffectiveness of the apps
Personal app & IB
Corporate portal

Corporate
IB

Open API
Functions for non-financial
fieldsEstimated effects
on revenue¥66 million

Aim to increase customer convenience and diversify customer contact points by implementing
banking functions in apps and Internet banking (IB) that are equivalent to those in branches.
TOPICS
Enhancing corporate portal functions

Enhancing personal app functions
 Adding the “COTRA” service (taxes, public funds
and remittances) to the menus of both banks’ apps

Initiatives taken to expand the number of users
Mar. 2023
Jan. 2023

Remittances using COTRA are useful on
various occasions!

July 2022

Transfer money toMake a group purchaseanother account of yoursof a gift, etc.

Apr. 2022

Implementation of remotesales tool
Unified login process

Electronic delivery
forms added

Feb. 2021
Split a bill with yourfriends

Repay purchases madeon your behalf

Send money between
family members

Oct. 2020

RecommendationsCSV
linkage function

Started sending e-mailpromotional announcements
and outbound calls

Started offering services
to corporate IB users

Estimated effects
on revenue¥11 million

19

DX Strategy
Realization of sophisticatedmarketing
Personal enewsletters

Corporate enewsletters

SNS and advertisingstrategy
CRM & SFA

Aim to diversify customer contact points and build a structure that can respond to customer
needs in a more timely manner through data analysis
TOPICS

Estimated effects
on revenue

Developing database for inside sales to corporates

CDP/MA Tools
Create lists

Data Science

Conventionalsales process

Data Engineering& AI

Announce/acquireprospective customers

Stimulate needs

Receive orders& sign contracts

Follow-up

Using both channels enables liaison officers / sales reps toreduce the workload assigned to them.

Inside sales representative

BaaS
BPO contracts
features
External sales of systems(ERP, etc.)

Propose &negotiate

Sales representative

Processusing insidesales

External provision offunctionality¥170 million

Build a business card information database to incorporate “inside sales” into the corporate
sales process and use it to identify and nurture more lead customers and strengthen brand power.

Face-to-face sales
representative
Online sales
representative

Leveraging digital technology to provide services that help capture new revenue opportunities
and solve stakeholders’ issues
TOPICS

Cloud-based integrated business system

Sales

Launch of Hokuhoku Biz-Management*, a SaaSERP package for corporations and sole proprietors

Regional collaboration
platform (PF)EC/POS,etc.

Link tosales

Case management
Sales management

Settings areautomaticallyreflected

Purchase management
Inventory
management

Automatic invoicing
Automatic cash
application

Automatic journalizing ofsales data
Automatic journalizing ofsales, purchase, deposit,
and payment data

Achieving company-wide back-office optimization

CommonmasterCompany information
Employee information
Customer information

SalarySettings areautomaticallyreflected

SalaryLink topayroll

Social insurance

Supplier information

Bonus

Product information

Year-end
adjustment

Settings areautomatically reflected
Automatic journalizing of
payroll data
Accounting
Automatic journalizing ofsalaries, bonuses, social
insurance and year-end
Daily
adjustment data

Attendance
management

Web pay statement

Monthly
Financial Results

Expensereimbursement

Link toapprovals*Overview of the system
・Optimized management of cumbersome back-office operations, such assystemization of order management and automation of cash application throughlinkage with Internet banking.
・Linkage function with other third-party accounting systems allows existing accounting systems to be
used without modification.
・Support for the Qualified Invoice and E-Preservation Act, agenda the companies need to address.
・Electronic Data Interchange (EDI) document exchange between the system and other compatible
systems is also available.

Fixed assets

Cash flow
management

Automatic journalizing
function

Link toaccounting
journalCloud platform(Security management, system redundancy, automatic backup)

Estimated effects
on revenue¥138 million

20
20

GX Strategy
Overview of the environmental strategy
Aiming to become an environmentally advanced financial group, we will achieve decarbonization by working as a groupwhile linking each of our initiatives.
•
Strengthening the system topromote decarbonization
Promoting the•Developing GX talentdecarbonization•
Promoting initiatives toof banks
reduce in-house CO2
emissions•
Enhancing information
disclosure•
Upgrading various kindsof analysis

Strengthening
decarbonization
support forbusiness partners

Enhancing
response to TCFD
recommendations••

Strengthening allianceswith ministries, local
governments andvarious entities

Enhancing financeand consulting
supportPromoting thedecarbonizationof the region

21

GX Strategy
Promoting the decarbonization of banks
Strengthening the system to promote decarbonization

Establishment of SX Promotion Department
Date

April 1, 2023

Officer inchargeDeputy President Yuji Kanema

MissionAiming to solve key sustainability
issues for our stakeholders, including
our group, business partners, andlocal communities

FG Board of Directors,
FG Management Committee

Corporate
Planning
Department

Business
Planning
Department

Audit &
Supervisory
Committee

Risk Management
Department

Audit
Department

Hokuriku Bank

Corporate Planning
Department
Sustainability Promotion Group
Linkage

Linkage

SX
Promotion
Department

Hokuriku Bank
Linkage

Linkage

New organization established at
Hokuhoku FG to promote group-

Corporate Planning
Department
Sustainability Promotion Office
Linkage

FG Sustainability Promotion Team
Linkagewide SXGroup companies

Developing SX talent
Expansion of the programs to develop SX talent
Programs

Overview

Trial Internship Program

Offering opportunities toexperience HQ operations
for a minimum of one week

Sustainability Trainees

Classroom lectures and onthe-job training

Challenge Job System

Employees can request to
work in the SX Promotion
Department

Challenge Job System
Sustainability Trainees

SX
Core
TalentTrial Internship Program

Utilization of the decarbonization advisor qualification program22

GX Strategy
Promoting the decarbonization of banks
Promoting initiatives to reduce in-house CO2 emissions

Long-term
goals

FY2030: decrease 46% compared with FY2013
Carbon neutral by FY2050

CO2 emissions in our Scope 1 and 2 **CO2 emission (adjusted) reduction targets at Hokuriku Bank and Hokkaido Bank’s domestic branches

CO2 emissions (Scope 1, 2) ( t-CO2)
Decrease 39.1%
compared with
FY201330,374
15,407

24,23722,55012,464

11,41018,489

Expect to decrease
46% compared with
FY2013
Hokkaido Bank

10,556
Hokuriku Bank

14,967

11,773

11,1407,933

FY2013

FY2019FY2020

FY2021Introduction of ZEB branches and electric vehicles
New
building
opening

April 2023

BranchNonoichi Branch, Hokuriku Bank

Overview

Aiming to construct zero emissionbuildings (ZEB’s) for new branches inorder to reduce in-house CO2
emissions
Increasing the number of electricallypowered business vehicles gradually23

GX Strategy
Strengthening decarbonization support for business partners
Long-term
goals
(*1)
(*2)

Sustainability-related investments and loans (*1)
Environment-related investments and loans (*2)

Cumulative amount disbursed from FY2021 to FY2030: ¥1.5 trillion
Cumulative amount disbursed from FY2021 to FY2030: ¥700 billion

Investments and loans to business partners who work toward achieving the SDGs, as well as investments and loans for medical care, health care, education, fisheries, agriculture, business start-ups,business succession, resilience, and environment-related activities, etc.
Investments and loans to support environmentally friendly initiatives, such as addressing climate change

Reinforcing the financial support

Enhancing sustainable finance products
Hokuhoku sustainable finance products lineup

Sustainability-related investments and loans(cumulative amount)(JPY Bn)

Evaluation
report
評価書

Goals
目標

ＳＰＴｓ

289.3

難

サステナビリティ・リンク・ローン
Sustainability Linked Loan
(Hokuhoku SLL-type)（ほくほくSLL型）
Launched on Sept. 16,
2021

270.0
180.0

153.8 135.5

102.6

Difficult450.0

Hokuhoku sustainable finance
ほくほくサステナブルファイナンス

Withあり
reportポジティブ・

Positive
Impactインパクト・
Finance
ファイナンス(Hokuhoku
PIF-type)

ＫＰＩ

46.3 56.3（ほくほくPIF型）

22/3 Results

23/3 Results

Hokkaido Bank

Withoutなし
reportEnvironment-related investments and loans(cumulative amount) (JPY Bn)

37.1

Launched on Apr. 1,
2022

ほくほく
Three
Targets
Hokuhoku
Three Targets(ほくほく定型目標型)(Hokuhoku
standard goal-type)

運転資金
Working
capital

設備資金
Equipment
financing

Positive Impact Finance (PIF) loan is newly added to the product lineup as itis relatively easy to introduce, has no restrictions on the use of funds, andcomes with an evaluation report.

84.0

14.3 22.8

Hokuhoku FG

易

126.0
77.3 70.1

22/3 Results

Standard
goals
定型目標

資金使途
Use
of funds

210.0
147.4

Launched on
Mar. 24, 2023

Target for 25/3

Hokuriku Bank

Easy

Hokuhoku FG

グリーンローン
Green loan
(Hokuhoku
GL-type)（ほくほくGL型）

23/3 Results
Hokuriku Bank

Target for 25/3
Hokkaido Bank

Dogin Regional Research Institute conducted
an evaluation report on the Hokuhoku
Sustainable Finance PIF-type framework.

24

GX Strategy
Strengthening decarbonization support for business partners
Enhancing consulting support
Number of SDGs / environment-related
services used (number of cases)

Revenue from sustainability-related solutions*
FY2022

1,762

864

248

140

898

108

22/3 Results
Hokuhoku FG

23/3 Results
Hokuriku Bank

Finance-related fees

¥756 million

Consulting-related fees

¥122 million

Total¥878 million*Revenue from sustainability-related finance andconsulting fees only

Hokkaido Bank

Reinforcing solutions for business partners
Business partners' needs

Understand・Dispatching experts・Holding seminars
・Card game・Energy-saving evaluation

Measure・GHG emissions calculation・LCA/CFP
calculation
・GHG Visualization・ESG Assessment
・Carbon Accounting PF

Reduce・Self-consumption・On-site PPA・Off-site PPA・Non-fossil certificate
・Energy-saving equipment

Disclose・Support for environmental management
・Support for TCFD disclosure・Support for answering CDP questionnaire・Support for SBT certification

Venture capital investment in the
Hokuhoku Innovation Co-Creation No. 1
Investment Limited Partnership operatedby Hokuhoku Capital

InvesteeFounded in 2014
Company Profile: Aim to realize a small-scale,decentralized water-circulating society for thesustainable use of water by humankind.

We will strengthen collaboration with various solution providers and companies that have been invested in whendeveloping solutions that meet the needs of our business partners.

25

GX Strategy
Promoting the decarbonization of the region

Strengthening the alliances
Participation in the GX League
Hokuriku Bank and Hokkaido Bank participate in the “GX League,” an initiative of the
Ministry of Economy, Trade and Industry to create a credit market to be fully operationalby 2026.
Aiming to achieve emission reduction targets voluntarily set and disclosed as members ofGroup X

Hiroshima Bank joins MEJAR Sustainability Solutions Collaboration

PurposeHiroshima Bank participates in the MEJAR
Sustainability Solutions Collaboration, which
was concluded on September 26, 2022, by
Hokuhoku FG, Concordia FG and the 77 Bank.
To support the sustainability
management of each bank’s customers
and contribute to the development of
the local economy by sharing
information on initiatives in thesustainability field and collaborating toevolve the products and services.

TOPICS

Agenda for collaboration

Actions

Sustainable finance

Sharing case studies and information onsustainable finance such as Sustainability Linked
Loan and Positive Impact Finance, collaboration for
product introduction, joint use of evaluation
institutions, etc.

Awareness-raising activities
inside and outside thebanks

Sharing training and education content for
employees, co-hosting of external seminars, joint
ordering of external consulting services, etc.

Decarbonization-related
solutionsSupport for visualization of greenhouse gas
emissions, sharing information on solutions for GHG
emission reduction, sharing information on
specialized vendors for decarbonization, etc.

Action taken: Co-hosting of Decarbonization Management Seminar

Date and time

May 19, 2023, 3–5 p.m. Online

Lecture topic

Part 1: Carbon Neutrality in Enterprises, Part 2: Trends in Carbon Credit and GX
Speaker: Takeshi Nakanishi, CEO of Carbon Free Consulting Corporation

26

GX Strategy
Enhancing response to TCFD recommendations

Initiatives to sophisticate various analyses
Received a “B” rating in the CDP Climate Change Survey (FY2022)“B” rating, the highest among financial institutions headquartered in the three Hokuriku
prefectures (Toyama, Ishikawa and Fukui) and Hokkaido, was given mainly for its risk
management processes and efforts to reduce CO2 emissions. We aim for a rating of B or
higher this fiscal year

Launched efforts to advance the calculation of in-house GHG emissions and financed emissions.
With the support of SCSK Corporation, we became thefirst regional bank in Japan to use Persefoni’s
greenhouse gas (GHG) emissions calculation platform,
which provides a climate management and carbon
accounting platform (CMAP) for corporations, financial
institutions, and government agencies and beganefforts to make its calculation more advanced.
Objective• By collectively calculating GHG for many
investees and borrowers, we will significantly
streamline the calculation process, maintainsustainability in measurement, and reallocate
resources to implement more necessary reduction
initiatives.
• By working to advance the analysis andmanagement of financed emissions, we canimplement more impactful decarbonization
initiatives.

Hokuriku
Bank

Entry of investment andloan-related activity data

Hokkaido
Bank

PCAF experts● Advice on data quality and calculation
methods

SCSK technician

Person in charge of financed
emissions calculation● Support the initial setup of the Climate
Management & Accounting Platform(CMAP)● Data input assistance● Support on usage and inquiries using the
support platform CarePlus SPSS

・Provision of calculation tools
・Consultation on SDGs
・Input assistanceand moreBusiness partners

Accelerate support for
decarbonization● PCAF-compliant calculation methods and various
emission factors are built into the platform.
● With minimal activity data input, the system
automatically calculates GHG emissions for each
asset class.
● Calculating and visualizing the results on a fundor portfolio basis.
Climate Management & Accounting
Platform (CMAP)

27

HR Strategy
Overview of HR strategy
We will promote human capital management so that individuals, organizations, and regions can growtogether based on the vitality generated by maximizing the potential of diverse human resources.
[Long-term vision]

We achieve sustainable growth together with local communities andcustomers through problem-solving.
[Human capital management policy]

Developing human resources who lead value creation by connecting communities andbusiness partners
Continuous creation of selfdirected professionals that
embody management
strategies

Empowering diverse humanresources for innovation(DE&I)Creating an environment thatencourages challenge andgrowth and maximizes ability

Policy on human resource development and internal environment
development
Clarification ofrequired talent
Strengthening
recruitment

Human resource
development

Specific actions

Corporate culture thatencourages challenges

Empowering
women

Realizing well-being

28

HR Strategy
Organize issues from three perspectives (As is)[Securing the required
talent]
The number of employees isdeclining due to difficulties inrecruiting new graduates due
to several factors, including
the aging society with fewer
children and the turnover ofyoung employees and others
resulting from increasing job
mobility.

[Nurturing the required
talent]Defining the humanresources required to realize
priority strategies,
understanding the number of
personnel needed, anddeveloping a training systemfall behind the curve.

[Organizational Culture]
There need to be more mechanisms and a better environment
for fostering a corporate culture that responds to diversifying
values and work styles and fosters self-directed personnel.

The Three Pillars of Human Capital Management(To be)Continuous creation of self-directed
professionals that embody management
strategies

Empowering diverse human resources
for innovation (DE&I)

Creating an environment that encourages
challenge and growth and maximizes
ability

Policy on human resource development and internal environment development

Our basic policy is to “create a virtuous cycle of value creation with our customers and develop
human resources capable of contributing to the sustainable growth of the region” and “create anenvironment in which diverse human resources can work autonomously to enhance their value
while feeling satisfaction in their work.”

29

HR Strategy
Continuous creation of self-directed professionals that embody management strategies
Human resource development

Clarification of required talent
Define the talent needed to realize the strategy and set a target number ofpeople.

DX personnel
Middle and core talents

Those who can plan and drive
business strategies by utilizing IT
and other digital technologies(Target)124
23/3(Core talent)

195(Middle talent)Those who are capable of promoting
each DX measure

25/3

Consulting personnel
Middle and core talents(Core talent)(Target)Those who are capable ofplanning and making proposals
using their expert knowledge

2,250
1,876

(Middle talent)

23/3

Those who can propose solutions thatmeet customers’ needs

25/3

SX personnel
Middle and core talents(Target)

200
26
23/3

(Core talent)Those who are capable of planning forthe realization of decarbonizedmanagement for regions, customers, andbanks(Middle talent)

25/3

Those who can provide comprehensive
advice to customers on theirdecarbonization needs

Develop highly skilled human resources by dispatching
personnel to outside companies.

We actively dispatch employees to outside companies throughopen recruitment to acquire advanced expertise, foster practicalskills and a sense of management, and form personal networks.
KPI
Number of employees
dispatched to outsidecompanies

FY22 Results
16

FY24 Target
50

Enhanced support for self-directed learning and reskilling
We have introduced e-learning for various kinds of self-development
support and reskilling tools covering various subjects, fromprofessional knowledge to business skills. In addition to utilizing theknowledge for business purposes, we have established a systemthat encourages personal growth and the realization of eachindividual’s career goals by deepening insight into areas they wish
to learn about.
KPI

FY22 Results

FY24 Target

Total education and training
expenses¥222 million¥330 million

1,247

3,300

Number of FP1/CFP holders

294

490

Number of decarbonizationrelated certification holders

172

800

Number of IT Passportcertification holders

30

HR Strategy
Empower diverse human resources for innovation
Strengthening recruitment

Empowering women○ Strengthening the ability to disseminate information○ Promoting the active participation of women・Strengthening information dissemination through diverse channels
such as SNS and commercials
・Renewal of recruitment website

・Creating an environment that enables a good work-life balance・Appointment of career advisors and enhanced support for employees
on leave who return to work
○ Creating an environment in which diverse human resources
can thrive
・Development of various systems such as course conversion andemployee recruitment.
・Planning to revise personnel system to further foster a vibrantcorporate culture in which diverse members of the workforce can play
an active role.

○ Placement of career recruiter
・Increasing the number of career recruiters to strengthen
recruitment of professional personnel and alumni.

KPI

FY22 Results

Number of career hires

14

FY24 Target
55

KPI
Ratio of female managers

FY22 Results

FY24 Target

18.7%

24.0%

Creating an environment that encourages people to take on challenges and growth and maximizes ability
Realizing well-being

Corporate culture that encourages challenges○ Enhancing work-life balance○ Expanding the Job Challenge program, training and otheropportunities through open application

・Improve well-being through the development and promotion ofvarious leave systems in accordance with life events○ Promotion of health management
・Promote health management, including certification of White
500 (large enterprise category) under the 2023 Certified Health& Productivity Management Outstanding Organizations
Recognition Program.
KPI
Percentage of paid leave
taken

FY22 Results
75.6%

FY24 Target
75% or over・In order to encourage employees to work with a sense offulfillment and to design their careers, we have introduced an
open job application system for Job Challenge and other in-houseside jobs. We encourage people to take on challenges and foster
an organizational culture in which employees take initiative andact.
KPI
Number of applicants foropen positions

FY22 Results
156

FY24 Target
255

31

Strengthening governance
Reduction of cross-shareholdings
Formulating targets for reducing cross-shareholdings
Policy on cross-shareholdings in FY2023(1) Cross-shareholdings shall be made when it is judged that they will maintain and strengthen long-term and stable relationships with thetarget company and benefit the bank’s business strategy, thereby helping to enhance the corporate value of the target company and theGroup.
(2) For cross-shareholdings, the risk and return of holding the shares shall be measured for individual stock based on an index considering
the cost of capital.
The Board of Directors will then conduct a comprehensive review each year to determine whether or not to hold the shares in light ofthe economic rationale based on prospects, business strategies such as business relationships and business alliances, and thesignificance of holding the shares in light of their relevance to the local economy.
(3) Overall, our policy is to reduce cross-shareholdings by 25% (about ¥15.6 billion) of the book value of cross-shareholdings over the three
years from FY2022.

Balance of cross-shareholdings (including deemed held shares) and consolidated net assets ratio(1) market value(2) book value

30.9%
192.5

109.2

(JPY Bn)((1) / Consolidated net assets)

35.2%
224.5

Consolidated net assets ratio

29.4%
180.1

98.9

86.5
To reduce by approximately
15.6 billion yen* until theend of March 2025

21/3

22/3

23/3

Target for 25/3

*The target amount (approximately ¥15.6 billion) is calculated at book value, excluding deemed held shares,
to eliminate the effect of market value.

32

Appendix

About Hokuhoku FG

Outline of Hokuhoku FG and Two Banks ①(As of September 30, 2022）

Date ofestablishment
Location of head
officeCapitalHokuhoku FG

Hokuriku Bank

Hokkaido Bank

September 26, 2003

July 31, 1943

March 5, 1951

（Started business in 1877）

Toyama City, Toyama

Toyama City, Toyama

Sapporo City, Hokkaido¥ 70,895 million¥ 140,409.52 million¥ 93,524.01million

Shares issued andoutstanding・ Common stock
128,770,814
・ Preferred stock (Type5)*
64,469,000

Total assets(consolidated) ¥ 16,172.7 billion¥ 9,477.3 billion¥ 6,655.6 billion

Deposits & NCD(consolidated) ¥ 13,513.7 billion¥ 7,680.3 billion¥ 5,860.3 billion

Loans(consolidated) ¥ 9,533.4 billion¥ 5,186.3 billion¥ 4,358.7 billion

Capital adequacy ratio（consolidated） 9.49 %（non-consolidated） 9.06 %（non-consolidated）8.99 %Employees

88 (Concurrent person)

2,163

2,052

A（R&I）

A（R&I）、A-(S&P)

A（R&I）

Ratings

・Common stock
1,047,542,335

・Common stock
486,634,512
・Preferred stock(Type2)*
64,459,200*The preferred stock of Hokuhoku FG and Hokkaido bank acquired 10% of the outstanding shares as treasury shares on October1,2022.

34

About Hokuhoku FG

Outline of Hokuhoku FG and Two Banks ②

The Hokuriku Bank, Ltd.

Hokugin Business Service Co., Ltd.

The Hokkaido Bank, Ltd.

Dogin Business Service, Ltd.
Dogin Card Co., Ltd.
Dogin Regional Research InstituteCo., Ltd.

Hokuhoku Tokai Tokyo Securities Co., Ltd.
Hokugin Lease Co., Ltd.
Hokuriku Card Co., Ltd.

Hokuriku Hosho Services Co., Ltd.
Hokugin Software Co., Ltd.
Hokuhoku Services Co., Ltd.

Hokuhoku Capital Co., Ltd.

35

About Hokuhoku FG

Outline of Hokuhoku FG and Two Banks ③Domestic

Oversea

Hokkaido：161
Toyama：93
Ishikawa：36
Fukui：22
Tokyo：8
Aichi：3
Osaka：3

・Representative offices

Others：6

Sendai, Yokohama, Niigata,
Nagano, Takayama, Kyoto

1. New York
2. Bangkok
3. Singapore
4. Shanghai

5. Dalian
6. Shenyang
7. Vladivostok
8. Ho Chi Minh36

About Hokuhoku FG ②

Historical Data (Hokuhoku FG )（JPY Bn）<Consolidated>

FY2018FY2019FY2019FY2020

FY2020

FY2021

FY2021

FY2022

FY2022

Full year

InterimFull year

InterimFull year

InterimFull year

InterimFull year

183.6
35.3

90.6
17.4

182.4
31.6

87.9
18.1

175.9
32.2

87.8
19.0

177.7
30.2

96.9
14.5

187.8
26.3

24.3

11.6

20.2

13.0

21.3

13.1

20.5

9.3

21.4

9.09%

9.29%

8.94%

9.32%

9.45%

9.79%

9.54%

9.61%

9.49%

Core gross business profits

125.7

61.3

123.2

60.9

120.7

61.9

124.8

63.7

119.8

General & administrative
expenses

86.5

43.0

85.3

41.5

82.3

40.0

78.8

37.8

74.7

Core net business profits

39.1

18.3

37.8

19.3

38.4

21.9

46.0

25.8

45.0

Net gains(losses) related tosecurities

3.1

4.2

6.6

3.9

7.5

3.3

(1.4)

(2.7)

(8.4)

Ordinary income
Ordinary profits
Net income attributable toowners of the parent
Capital adequacy ratio<Total of two banks>Credit costs
Ordinary profits
Net income
ROA
OHR
Loans
Deposits (including NCD)
Securities
Non performing loan
NPL ratio

4.6
5.1
12.0
4.4
13.0
5.2
13.5
6.7
7.7
36.7
17.7
31.4
18.7
32.0
19.8
30.4
15.3
26.9
26.6
12.4
20.8
14.1
22.4
14.5
21.8
10.6
23.0
0.30%
0.28%
0.28%
0.27%
0.25%
0.25%
0.26%
0.29%
0.27%
68.85% 70.11% 69.27% 68.18% 68.19% 64.59% 63.15% 59.44% 62.39%
8,360.8
8,456.5
8,673.1
8,993.8
9,065.1
9,111.8 9,211.1
9,321.5 9,545.1
11,439.7 11,429.8 11,662.6 12,451.4 12,815.6 12,982.4 13,233.3 13,309.8 13,540.6
1,788.8
1,848.6
1,807.2
1,959.7
2,100.1
2,056.6 2,199.5
2,108.5 1,846.7
154.6
158.8
153.4
163.3
180.1
194.3
212.5
230.5
219.0
1.79%
1.82%
1.71%
1.76%
1.93%
2.07%
2.24%
2.40%
2.23%

37

About Hokuhoku FG ③

Historical Data (Hokuriku Bank )（JPY Bn）
FY2018FY2019FY2019FY2020

FY2020

FY2021

FY2021

FY2022

FY2022

Full year

InterimFull year

InterimFull year

InterimFull year

InterimFull year

Core gross business profits

90.2
69.1

44.7
33.3

88.5
66.8

42.9
32.9

86.4
66.7

42.5
33.5

88.9
68.4

53.0
34.5

97.2
65.2

General & administrative
expenses

46.4

23.0

45.7

22.1

43.9

21.1

41.7

20.1

39.4

Core net business profits

22.6

10.2

21.1

10.7

22.8

12.4

26.7

14.4

25.8

Net gains(losses) related tosecurities

2.1

2.9

5.0

3.0

5.7

1.8

2.1

0.4

(0.9)

2.8
22.1
15.5
8.79%
0.29%
67.19%
4,740.3
6,636.8
1,197.0
91.4
1.89%

4.2
9.9
6.5
8.92%
0.26%
69.24%
4,823.4
6,597.2
1,194.4
94.9
1.93%

9.2
17.7
11.2
8.59%
0.27%
68.43%
4,910.3
6,735.4
1,158.0
96.2
1.92%

3.3
10.6
8.4
9.00%
0.25%
67.34%
5,058.4
7,168.1
1,203.8
104.1
2.02%

8.4
20.5
14.2
9.14%
0.25%
65.81%
5,033.3
7,350.5
1,268.1
114.6
2.24%

Ordinary income

Credit costs
Ordinary profits
Net income
Capital adequacy ratio
ROA
OHR
Loans
Deposits (including NCD)
Securities
Non performing loan
NPL ratio

8.5
2.4
20.9
12.4
13.1
9.2
9.49% 9.31%
0.24% 0.26%
62.99% 60.92%
4,978.9 5,061.6
7,381.3 7,536.9
1,261.0 1,294.3
136.4
123.4
2.43% 2.64%

9.3
8.1
14.5
6.1
14.3
4.2
9.36% 9.06%
0.28% 0.26%
58.29% 60.46%
5,167.6 5,186.3
7,511.1 7,680.3
1,229.4 1,185.4
141.3
149.9
2.84% 2.67%

38

About Hokuhoku FG ④

Historical Data (Hokkaido Bank )（JPY Bn）
FY2018FY2019FY2019FY2020

FY2020

FY2021

FY2021

FY2022

FY2022

Full year

InterimFull year

InterimFull year

InterimFull year

InterimFull year

Core gross business profits

75.5
56.5

36.5
28.0

74.9
56.3

36.4
28.0

71.5
54.0

37.1
28.3

72.9
56.4

37.4
29.1

76.9
54.6

General & administrative
expenses

40.1

19.9

39.6

19.3

38.4

18.8

37.1

17.7

35.3

Core net business profits

16.4

8.0

16.7

8.6

15.6

9.5

19.2

11.4

19.2

Net gains(losses) related tosecurities

0.9

1.3

1.5

0.9

1.7

1.4

(3.6)

(3.1)

(7.4)

1.7
14.5
11.0
8.69%
0.31%
70.89%
3,620.5
4,802.8
591.8
63.3
1.66%

0.8
7.8
5.8
8.98%
0.29%
71.14%
3,633.0
4,832.5
654.2
63.9
1.68%

2.7
13.7
9.5
8.76%
0.30%
70.27%
3,762.7
4,927.2
649.2
57.2
1.45%

1.0
8.0
5.7
9.06%
0.29%
69.15%
3,935.4
5,283.3
755.9
59.2
1.44%

4.6
11.5
8.1
8.88%
0.25%
71.12%
4,031.7
5,465.1
832.0
65.5
1.56%

2.8
7.4
5.2
9.21%
0.26%
66.48%
4,132.9
5,601.0
795.5
70.8
1.64%

4.9
9.5
8.7
8.94%
0.26%
65.86%
4,149.5
5,696.4
905.2
76.1
1.76%

Ordinary income

Credit costs
Ordinary profits
Net income
Capital adequacy ratio
ROA
OHR
Loans
Deposits (including NCD)
Securities
Non performing loan
NPL ratio

(1.6)
(1.4)
12.4
9.1
8.7
6.3
8.99%
9.08%
0.27%
0.31%
60.79% 64.69%
4,153.8 4,358.7
5,798.6 5,860.3
661.2
879.1
77.7
80.6
1.72%
1.86%

39

About Hokuhoku FG ⑤
Market Share in Our Home Market (Loans, Sep-22)

Hokkaido Area

Hokuriku Area
Shinkin Banks

16.5%

Hokuhoku FG
Shinkin Banks

27.7%

23.4%

(-0.2%)
Other Banks

33.1%

Other Banks

9.7%

Main
Competitor

22.7%

Hokuhoku FG
27.8%(+0.1%)

Main
Competitor

39.1%(vs. Sep-21)

S.B

S.B

HFG
41.9%

O.B

S.B

HFG
16.1%

O.B
M.C

M.C

ToyamaHFG
20.5%

Ishikawa

O.B

Fukui

M.C
*Data of the Main Competitor andOther banks are estimated figures.
They don’t include Japan Post Bank.

40

About Hokuhoku FG ⑥
Market Share in Our Home Market (Deposits, Sep-22)
Hokkaido Area

Hokuriku Area
Hokuhoku FG
Shinkin Banks
29.4%
19.6%
Other Banks

30.5%

Shinkin Banks

Hokuhoku FG
23.0%(-0.2%)

30.9%(+0.2%)

Main
Competitor

Other Banks

Main
Competitor

9.8%

20.5%

36.2%

(vs. Sep-21)

S.B
O.B

S.B
HFG
52.1%

O.B
M.C

M.C

ToyamaHFG
16.9%

Ishikawa

S.B
O.B

Fukui

HFG
13.8%
M.C
*Data of the Main Competitor andOther banks are estimated figures.
They don’t include Japan Post Bank.

41

About Hokuhoku FG ⑦
Lending in the Region by Industry (Mar-23)

Hokuriku Bank
Others 0.4%

Hokkaido Bank
Manufacturing
4.4%
Others 0.6%
Construction 3.4%

Manufacturing
12.5%

Individual 37.9%

Construction 4.5%

Communications &Transportation
3.9%
Wholesale & Retail
7.9%

Individual 37.8%

Communications &Transportation
3.4%

Finance, Insurance,
Real estate &Goods rental andleasing 9.3%

Wholesale & Retail
8.6%

Government &Local Government
14.2%

Finance, Insurance,
Real estate &Goods rental andleasing 10.5%
Other Services
8.0%

Region: Toyama, Ishikawa, Fukui, Hokkaido

Other Services
7.0%
Government &Local Government
25.7%

Region: Hokkaido

42

The Present Condition of the Regional Economy
Economic Conditions
Apr-23Monthly Economic Report(By the Cabinet Office)Regional Economic Report(By Bank of Japan)

ALL JAPAN

Hokuriku Area

Hokkaido Area

Economic
Trend

Picking up moderately, Althoughsome weaknesses are seen

Picked up

Picking up moderately

PublicInvestment

Holds firm

Has been relatively weakHas been relatively weakBusiness
Investment

Picking up

Increasing

Picking up moderately

Privateconsumption

Picking up moderately

Picking up steadily

Increasing moderately

Housing
construction

Shown a steady undertone

Declining

Declining

Production

Weak tone recently

Weakening

Has been more or less flat

Employment& income

Picking up

Picking up moderately

Has been improving moderately,
although some weakness has been
seen in part

ConsumerpricesRisingRisingYear-on-year change
exceeded previous monthAppears to be increasing

Compared to the previous year,
although the number of cases
decreased, the total amount ofliabilities exceeded

Remains at a low level

The number ofbankrupt
companies

43

Inquiries related to this material should be addressed to

Hokuhoku Financial Group, Inc.
Managing Planning Division
TEL(+81)76-423-7331
FAX(+81)76-423-9545
E-MAIL:info@hokuhoku-fg.co.jp
https://www.hokuhoku-fg.co.jp/
This document may not be reproduced or distributed to any third
party without prior approval of Hokuhoku Financial Group, Inc. This
document has been prepared for information purpose only and does
not form part of a solicitation to sell or purchase any securities.
Information contained herein may be changed or revised without
prior notice. This document may contain forecasting statements as
to future results of operations. No forecast statement can be
guaranteed and actual results of operations may differ from thoseprojected.