Information Meeting—The First Half Ended
September 2017—

THE NANTO BANK, LTD.

Table of Contents
I. About the Nanto Bank, Ltd.

III. Management Strategy

1. Profile of the Nanto Bank..................... 2

2. Operating Areas of the Bank..................... 3(1) Awareness Reform—Human Resource andOrganizational Strategy.............. 15(1) History and Tourism Resources..................... 4(2) Sales Reform(2) Three World Heritage Sites..................... 5(3) Number of Tourists..................... 7

3. Summary of Nara Prefecture

4. Summary of the Local Economy..................... 8

II. Financial Results for the
1st Half of FY2017

1. Pursuit of the Four Reforms(i)Transforming Our Earnings Structureand Loans Portfolio.............. 16(ii) Platform and Market Strategy.............. 17(iii) Retail Business Strategy—Securities and InheritanceBusinesses.............. 18—Personal Loans.............. 20

1. Summary of Profit and Loss................... 10(iv) Corporate Business Strategy.............. 21

2. Summary of Deposits and Loans................... 11(v) Osaka Strategy.............. 24

3. Summary of Non-Performing Loans ................... 12(vi) Market Investment Strategy.............. 25

4. Capital Adequacy Ratio(vii) Group Strategy.............. 26................... 13(3) Clerical Operations Reform.............. 27(4) Expenses Reform.............. 28

2. Regional Revitalization.............. 29

IV. Business Forecasts for FY2017
1. Summary of Profit and Loss, Shareholder
Returns.............. 31
2. Target Metrics.............. 32

表紙Ⅰ

I. About the Nanto Bank, Ltd.

1

1. Profile of the Nanto Bank(as of September 30, 2017)

1. Founded

June 1, 1934

2. Location of head office

16 Hashimoto-cho,Nara City

3. Capital¥37,924 million

4. Number of employees

2,736

5. Number of offices

140 (Japan)
2 (representative offices inHong Kong and Shanghai)

6. Total assets¥5,852.8 billion

7. Deposits outstanding¥4,843.8 billion

8. Outstanding loans¥3,295.5 billion

9. Capital adequacy ratio

Non-consolidated: 9.85%
Consolidated: 10.07%

10. Market share in Nara Prefecture

Loans: 49.0%
Deposits: 48.9%

11. External credit rating“A” (Stable) from JCR“A-” (Stable) from R&I

Corporate Philosophy(i) Pursue sound and efficient management(ii) Provide superior comprehensive
financial services(iii) Contribute to regional prosperity(iv) Strive to become a highly reliable,
friendly and attractive bank

(Head Office)22. Operating Areas of the Bank
Operating Areas of the Bank

Our Network of Branches

Map of Japan･･･ Branch location

Kyoto Pref.

Hyogo Pref.
Osaka Pref.

Mie Pref.
Tokyo
Nara
Osaka

Number of branches
Headquarters
and branches

Subbranches

Agencies

Nara Pref.

70

20

2

Wakayama
Pref.

6

2

-

8

Kyoto Pref.

11
1
20
1
1
110

4
2

-

15
3
20
1
1
140

Mie Pref.
Osaka Pref.
Hyogo Pref.
Tokyo
Total

Nara Pref.

(as of September 30, 2017)

28

2

Total

Wakayama Pref.

92

3

3. Summary of Nara Prefecture (1) History and Tourism Resources
History of Nara Prefecture Following the unification of Japan in ancient times, Nara was the country’s capital up until the endof the Nara Period (from 710 to 794). It was home to many of Japan’s existing cultural properties,
such as Buddhist architecture.
 In Waka poems, Nara is referred to as the “Birthplace of Japan.”Abundant Tourism Resources Three World Heritage sites  Ranked top in Japan for the number of such sites(i) Historic Monuments of Ancient Nara(ii) Buddhist Monuments in the Horyu-ji Area(iii) Sacred Sites and Pilgrimage Routes in the Kii Mountain Range A total of 1,525 National Treasure and Important Cultural Property certifications (as of June 1, 2017)* Ranked third in the country, only behind Tokyo and Kyoto
 In 2015, the annual number of foreign tourists visiting Nara exceeded the 1 million mark.

 Origin of the name Nanto Bank The Bank was named Nanto Bank when it was established in 1934 because Nara had long beenreferred to as “Nanto” (the South Capital) in reference to Kyoto.

43. Summary of Nara Prefecture (2) Three World Heritage Sites
Expanded Map of Nara Prefecture(i) Historic Monuments of Ancient Nara
Kyoto Pref.

Nara, Nara Pref.
Registered in 1998 as a world
heritage site

Osaka Pref.

Nara Pref.

(ii) Buddhist Monuments in the Horyu-ji
Area

Ikaruga-cho, Ikoma-gun, Nara Pref.

Registered in 1993 as a world
heritage site(iii) Sacred Sites and Pilgrimage
Routes in the Kii Mountain Range

Nara Pref., Wakayama Pref. and
Mie Pref.
Registered in 2004 as world
heritage sites

53. Summary of Nara Prefecture (2) Three World Heritage Sites(i) Historic Monuments of Ancient Nara “Historic Monuments of Ancient Nara” are made up of the temples in Nara city.
(Tôdai-ji, Kôfuku-ji, Kasuga-Taisha, Kasugayama Primeval Forest, Gangô-ji, Yakushi-ji, Tôshôdai-ji and thesite of Heijô-kyo) During the Nara Period (from 710 to 794), many temples and shrines were built around the Heijô-kyo andthe location served as the country’s capital. These “Historic Monuments of Ancient Nara” serve to illustrate
the religious activities and lifestyle of the Nara Period.
(ii) Buddhist Monuments in the Horyu-ji Area
 Wooden structures at the Horyu-ji and Hokki-ji Temples
 Built shortly after Buddhism arrived in Japan, these are among the nation’s oldest existing wooden
structures. Combined with the structures built thereafter, they reveal how Japanese Buddhist architecturechanged over time, and are thus praised as being masterpieces of Buddhist architecture.

(iii) Sacred Sites and Pilgrimage Routes in the Kii Mountain Range
 These World Heritage Sites span Nara Prefecture and the adjacent Mie and Wakayama Prefectures. The
location contains three sacred sites: Yoshino and Omine; Kumano Sanzan; and Koyasan, connected by
the pilgrimage routes Omine Okugakemichi, the Kumano Pilgrimage Routes and the Koya Pilgrimage
Routes.
It was here that nature worship-based religious practices from ancient Japan amalgamated with Buddhism,
arriving from the continent, and resulted in the creation of many different forms of religion.
6

3. Summary of Nara Prefecture (3) Number of Tourists
Number of Tourists Visiting Nara
(10,000 people)

Number of tourists

Number of foreign tourists visiting Nara (estimate)

4,500(10,000 people)

4,407

200

4,146

3,811
3,429

165.4

3,547
150

103.3
100

66.4
45.6

50

28.5

0

0
2012

2013

2014

2015

2016
[Source: Nara Prefecture]7

4. Summary of the Local Economy
Market Characteristics
 Nara Prefecture:

A substantial retail business market

 Osaka Prefecture: Second largest economy among all the country’s prefectures,substantial retail and corporate business markets<Key indicators>

Ranking is among the 47 prefectures of Japan

MetricNara Pref.

SourceOsaka Pref.

Rank(Thousandsof people)

1,356 30th

Deposits balance(¥ trillion)

11.4 24th

Loan balance(¥ trillion)

3.5 31st

Per-capita income(¥ thousand)

2,534 35th

Balance of savings(¥ thousand)

Housing starts(Thousandsof units)

Population

Rank
Ministry of Internal Affairs and Communications,
Population Estimates , October 2016

8,833

3rd

Kinyu Journal, Financial Map 2017

90.4

2nd

Kinyu Journal, Financial Map 2017

45.1

2nd

Cabinet Office Economic and Social Research Institute(ESRI), fiscal 2014

3,013 13th

1st

Ministry of Internal Affairs and Communications, National Surveyof Family Income and Expenditure , November 2014

14,801 18th

6 36thMinistry of Land, Infrastructure, Transport and Tourism,
Building Starts , fiscal 2016

17,816

70

3rd
5th

Percentage of people who enter post-secondary
education

(%)

58.9

7th

Ministry of Education, Culture, Sports, Science andTechnology, March 2016

60.5

Percentage of people who answer correctly on thefinancial literacy examination

(%)

60.5

1st

The Central Council for Financial Services Information,
June 2016

54.1 38th

Cross-prefecture employment ratio

(%)

29.9

1st

Ministry of Internal Affairs and Communications,
National Census , October 2010

5.8 15th(Thousandsof units)

48 40thMinistry of Internal Affairs and Communications,
Economic Census , July 2014

413

2nd

Value of shipped manufactured goods(establishments employing at least 10 workers)(¥ trillion)

1.8 36th

Ministry of Economy, Trade and Industry, Census of
Manufacturers , December 2014

15.7

3rd

Sales value of wholesale goods(¥ trillion)

0.7 42nd

Ministry of Economy, Trade and Industry, Census ofCommerce , July 2014

38.9

2nd

Sales value of retail goods(¥ trillion)

1.0 35th

Ministry of Economy, Trade and Industry, Census ofCommerce , July 2014

8.4

2nd

Number of private enterprises (offices)

Number of items designated as National Treasures andImportant Cultural Properties
Ratio of visits by foreign tourists coming to Japan(sightseeing and leisure purposes)(Items)

1,324

3rd

Agency for Cultural Affairs, September 2017

677

5th

(%)

8.4

9th

Japan Tourism Agency, Consumption Trend Survey for
Foreigners Visiting Japan , 2016

44.7

1st

8

表紙Ⅰ

II. Financial Results for the
1st Half of FY2017

91. Summary of Profit and Loss
Analysis of Change Factors
in Core Net Business Profit(¥ billion)
1H
FY20161H
FY2017

Core net business profit for 1H FY2016

27.3
25.0
2.8
-0.5
0.6
19.6
10.9
7.5
7.6
3.4

26.1
24.0
2.3
-0.2
0.3
20.3
11.4
7.6
5.8
-0.1

-1.1
-1.0
-0.4
+0.2
-0.3
+0.6
+0.4
+0.1
-1.8
-3.5

2.1

－

-2.1

22 Net income

8.9
-0.1
0.0
0.1
0.4
－
8.7
-0.0
8.6
1.7
6.9

5.7
2.1
1.5
0.0
0.0
0.5
7.8
-0.0
7.8
1.7
6.0

-3.2
+2.3
+1.5
-0.0
-0.3
+0.5
-0.9
+0.0
-0.8
+0.0
-0.8

23 Credit cost (*2)

1.9

-0.5

-2.4

1

Core gross business profit

2

Interest income

3

Fees and commissions

4

Other operating income (*1)

5

Cost of derivative financial products

6

Expenses7

Personnel expenses

8

Non-personnel expenses

9Core net business profit

10 Gains/Losses on bonds (JGBs, etc.)
11

Net transfer to general provision
for possible loan losses

12 Net business profit
13 Non-recurrent gains/losses
14

Gains/Losses on stocks

15

Disposal of non-perf orming loans

16

Bad debt recovered

17

Reversal of allowance for loan losses

18 Ordinary income
19 Extraordinary gains/losses
20 Income before income taxes
21 Income taxes(¥ billion)

Y/Y change* 1 Excludes gains/losses on bonds (JGBs, etc.)* 2 (Net transfer to general provision for possible loan losses + Disposal of non-performing loans) − Bad debt recovered −Reversal of allowance for loan losses

7.64

1) Average balance of loans(Average balance Y/Y change +¥50.2 billion)+0.252) Interest rate on loans(0.95%, Y/Y change -0.06 pt)-1.02

3) Average balance of deposits(Average balance Y/Y change +¥29.3 billion)-0.004) Interest rate on deposits(0.01%, Y/Y change -0.01 pt)+0.27

Lending/deposit sector total-0.495) Average balance of securities(Average balance Y/Y change -¥118.2 billion)-0.686) Yield on securities(1.25%, Y/Y change +0.09 pt)+0.797) Interest on fund management-0.018) Interest on fund procurement(including cost of derivative financial products)-0.31

Market sector total-0.219) Fees and commissions(Investment trust revenues: Y/Y change -¥0.03 billion
Life insurance revenues: Y/Y change -¥0.52 billion
Corporate solution business-related income:Y/Y change +¥0.11 billion)-0.4410) Others-0.0011) Expenses(¥0.62 billion in reversal of provision for bonuses for previous fiscal
year, provision of ¥0.03 billion for this fiscal year
⇒ Y/Y change +¥0.65 )-0.64Core net business profit for 1H FY2017

5.83

10

2. Summary of Deposits and Loans
Balance of Deposits

Balance of Loans<By sector><By sector>* Number in bracket denotes Y/Y change

5,000.0(¥ billion)<Y/Y change>+81.4

4,781.7

4,762.3

4,780.7

4,843.8

218.7
886.0

217.4
888.4

199.1
875.9

197.8
889.3

(-11.6)(+2.4)(-12.4)* Number in bracket denotes Y/Y change

3,300.0
Government/Banks(-19.6)(¥ billion)

Corporate(+0.9)

0.00

3,625.4

3,626.7

3,672.6(+18.1)(+1.2)(+45.8)3,716.1

51.5

29.7

33.0

40.4

March 31,2016

September
30, 2016

March 31,2017

September
30, 2017

Personal(+89.4)
NegotiableCD(+10.6)

3,295.5

543.6

574.8

591.4

601.1

743.7

714.8

669.3

684.1

912.0 60%

938.4(+26.3)(+26.3)

61%

975.4

61%

998.7

1,012.7

1,026.0(+14.0)(+13.2)

March 31,2016

September
30, 2016

March 31,
2017

Local
governments(+26.2)Wholesale(-30.7)Retailbusiness(+30.5)969.0(+37.0)(+12.3)<Y/Y change>+54.6

1,041.3

Decrease of ¥6.4 billion
compared to March 31,2017 due to the transfer of¥28.1 billion to thewholesale side of the Bank
(Increase of ¥21.7 billion
before the transfer)

September
30, 2017

Personal
loans(+28.5)<By prefecture>* Numbers in brackets denote Y/Y change or percentage composition

5,000.0

0.0
03,262.3

0.00<By prefecture>(¥ billion)

Percentage
composition
59%

3,198.1

3,240.9

256.9
356.1
296.4

257.5
350.1
308.4

255.2
343.6
287.5

(-18.0)(6%)(+12.0)(6%)(-20.9)(6%)

3,820.6

3,816.4

3,861.2(+19.7)(80%)(-4.2)(80%)(+44.8)
(81%)

264.3
346.5
305.5

* Numbers in brackets denote Y/Y change or percentage composition
Others(+6.7)

3,300.0(¥ billion)

Kyoto Pref.
(-3.5)
Osaka Pref.,etc.
(-2.9)(6%)

3,886.9

51.5

29.7

33.0

40.4

March 31,2016

September
30, 2016

March 31,2017

September
30, 2017

Nara Pref.
(+70.5)(80%)
NegotiableCD(+10.6)

812.9

806.5

790.5

805.5

855.2

837.9

759.2

773.0

(+11.6)(23%)(+13.8)(23%)(+17.5)(24%)

1,583.7

1,629.8

1,683.4(+53.8)(49%)(+46.1)(50%)

1,658.7

March 31,2016

September
30, 2016

March 31,2017

September
30, 2017(+28.9)(50%)

Others(-31.4)

Osaka Pref.,etc.
(+32.5)(24%)
Nara Pref.
(+53.5)
(51%)

0.00

11

3. Summary of Non-Performing Loans
Credit Cost

Breakdown of Credit Cost(¥ billion)

2.9

3.0

Credit cost ratio

2.0

1.4
0.05

1.0

1.0
0.03

(%)

(¥ billion)

0.30

5.0

0.20

0.09

0
0.0
0.10

-0.01

0.00

-0.5
FY2014
Full Year

FY2015Full Year

FY2016
Full Year

FY2017
1H

Disposal of Non-Performing Loans by Region

FY2014
Full YearTotal
credit cost

4.4

0
0.0

0.3

0.3

-0.0
-0.0

0.3
Others

-0.9

-0.0
-0.0

FY2014
Full Year

FY2015Full Year

FY2016
Full Year

59.3
0.0
0

FY2017
1H

0.0
-0.5
-0.0
Reversal of
allowance forloan losses

Bad debt
recovered

FY2015Full Year

FY2016
Full Year

FY2017
1H

1.0

2.9

-0.5

Non-performing
loans ratio

2.30
10.0

2.08
11.5

50.0

-0.3

-2.0

2.57
15.5

Osaka Pref., etc.

1.3
0.3

-3.7
-0.2

3.0
0.7
-0.8

Loans Based on the Financial Reconstruction
Law / Non-Performing Loans Ratio
100.0

2.0

1.4

5.0

(¥ billion)

Nara Pref.

4.0

-5.0

-0.10

* Credit cost ratio = Credit cost / Average balance of loans(¥ billion)

1.7
0.3
-0.5

Credit
cost

0
0.0
-1.0

Net transfer to general provision
for possible loan losses
Disposal of nonperforming loans

Total

58.0

5.1

5.8

March 31,2015

March 31,
2016

80.0

73.9

48.6
8.3

3.00
(%)

1.87

Specialattention

12.0
46.0

Doubtful

4.1

0.00

March 31, September 30,
2017
2017
Bankrupt
or de facto
bankrupt

68.4

62.3

12

4. Capital Adequacy Ratio
Capital Adequacy Ratio(¥ billion)<Capital adequacy ratio>

Non-consolidated

Consolidated

10.07

9.36

9.35

9.42

9.11

9.12

9.19

<Capital>

Consolidated

Non-consolidated

400.0

(％)

March 31,
2017

10.00
9.85

5.00

200.0
215.1
206.9
207.1
198.9

<Implementation of public stock offerings andthird-party allocation of shares>
Capital raised: Approx. ¥17.3 billion

241.8
219.3
233.7
211.5

0.00

September 30,
Change from2017
March 31, 2017

Number Totalof shareIndividual
holders
shareholders, etc.
(person)(Ratio)12,251

17,412+5,161

11,434

16,484+5,050

93.3%

94.6%

+1.3%

Number Totalof
Individual
sharesshareholders, etc.
(thousand(Ratio)shares)27,27533,025+5,750

7,705

10,032+2,326

28.2%

30.3%

+2.1%

0.00
M arch 31,
2016

September M arch 31,
30, 2016
2017

September
30, 2017<Non-consolidated>(¥ billion)March
31, 2016

September
30, 2016

March
31, 2017

September
30, 2017

Changefrom March
31, 2017

1) Capital adequacy ratio

9.11%

9.12%

9.19%

9.85% +0.66%

2)

Capital

198.9

207.1

211.5

233.7

+22.2

3)

Risk assets

2,181.1 2,271.1 2,300.7 2,372.4+71.6<Consolidated>(¥ billion)March
31, 2016

September
30, 2016

March
31, 2017

September
30, 2017

Changefrom March
31, 2017

1) Capital adequacy ratio

9.36%

9.35%

9.42% 10.07% +0.65%

2)Capital

206.9

215.1

219.3

3)

Risk assets

241.8

+22.5

2,209.7 2,299.5 2,327.7 2,400.3+72.6

Bolster retail loans<Loans to small to medium-sized businesses, etc.
(Period-end balance)>
March 31,2017

September
30, 2017

Change fromMarch 31, 2017

¥2,035.0 billion ¥2,075.5 billion +¥40.4 billion
 Establishment of the “Nanto Long-term Support”
Program (September 2017)
 Long-term (up to 20 years) loan program for small
to medium-sized businesses
 Total funds: ¥20.0 billion (estimate)⇒ Loans totaling ¥0.72 billion have been provided tofour businesses (as of October 31, 2017)13

III. Management Strategy

14

1. Pursuit of the Four Reforms (1) Awareness Reform—Human Resource and Organizational Strategy
 Vitalize our human resources and organization by i) fostering the spirit of taking on challenges
among the bankers, ii) bolstering the human resource development system and iii) realizing a worklife balance
Activities of the Nanto Improvement Committee

Incorporating Local Input in Management Measures Consulting services of a leading manufacturer-affiliatedvendor was introduced (from September 2016 to
September 2017) to establish a culture and ethos of
improvement unique to Nanto Bank.
 Begin improvement activities in advance at all branches(in the 2nd half of FY2017)
Improvement activities: execution status

 A survey among branch managers was conducted (September2017) and feedback on the headquarters’ measures wasprovided based on the survey results. (November 2017)
 An informal meeting for executive officers and young bankers
was conducted. *These meetings are planned to continue.

2H
FY2016
Number ofactivity areas
and blocks(cumulative)

1H
FY20172H
FY2017All-branchengagement

1 block
12 branches

3 blocks
31 branches Incorporate input from branches in theheadquarters’ measures and improve theawareness of the headquarters
 Ensure that young bankers will become familiar
with management policies

Promotion of Work Style Reform

13 blocks
137 branches Improve overall operations of the Bank byfirmly establishing improvement activities
 Develop human resources who are able todetect issues, think and act independently

Initiation of the Organizational Climate Reform Project Aim to improve the awareness of top managers, including
executive officers, by utilizing outside consultants
 Identify current issues in areas such as decision making andinformation sharing methods
 Cultivate and share common awareness on the
management environment, management
policies, etc. and speed up decision making<Main initiatives in FY2017>April

 Regular working hours were revised, and the flextime
system was introduced.
 The short working hour system for childcare needs was
improved.
 Leave systems were improved.
 Initiatives designed to reduce overtime were implemented.

July The Bank was granted the “Platinum Kurumin” certificationby the Ministry of Health, Labour and Welfare as a company
which provides support for childcare.

October  Childcare-related leave systems were improved.

 Use of tablets, expand electronic approval systems and introduce
operational control functions, etc. by renewing intranet
infrastructure, etc. (2nd Half of FY2017 and onward)
Create a functional and efficient workstyle15

1. Pursuit of the Four Reforms (2) Sales Reform (i) Transforming Our Earnings Structure and Loans Portfolio
Earnings Structure(Core Gross Business Profit Basis)
Bolster fee
business

Loans Portfolio

Expand retailloans+1.1% from
FY2016100%

100%

11.7 10.4

9.6

11.5

20

Non-interest
incomeMarketsectorincome

(%)

(%)

16.9

18.1

18.2

17.2

23.2

20.5

20.7

20.0

28.5

29.8

29.4

30.6

15

Loans forlocal
governments

28.9 31.7 32.2 32.5

1930
Wholesale
loans

1.1%
Deposits/
loans sector
incomeRetailbusinessloans

59.3 57.8 58.0 55.9

50

<Before the transfer to thewholesale side of the Bank>
1H FY2017: 30.2%
FY2017 full year: 31.5%

59%

31.2

31.4

31.5

32.0

33
62%
(+1.4%
from
FY2016)66%

33

Personal
loans

0%

0%
FY2015 FY2016 FY2017 FY2017
Full Year Full Year
1H
Full Year(forecast)

FY2019Full Year(plan)FY2015 FY2016 FY2017 FY2017
Full Year Full Year
1H
Full Year(forecast)

FY2019Full Year(plan)* Non-interest income = Fees and commissions + Other operating income(excluding gains/losses on bonds (JGBs, etc.))

16

1. Pursuit of the Four Reforms (2) Sales Reform (ii) Platform and Market Strategy
 Revise the framework of our branches and sales, bolster points-of-contact with customers, anddeliver high-quality services

Revising Branch Formats

Expanding Our Sales Staff<Elimination/Consolidation of branches,
revision of branch format>
FY2016１H
FY2017

Elimination/Consolidationof branches, revision of
branch format (cumulative 6 branches 14 branches
results)
Number of staff
16
30
members reduced<Branch sales staff staffing plan>
FY2019(Plan)

Approx. 90<Results for the1st Half of
FY2017>
5

Conversion to a sub-branch

1

Conversion to an in-branchoutlet1

Business hour change

1

Total

8

 Improvement of productivity through more
efficient operation of branches

620

590
580

600

The plan from theMedium-Term
Management Plan in
December 2016 at thetime of publication:
610 people

575

553
Approx. 30
branches

Introduction of mobile ATM
vehicles (July 2017)

Conversion to a private
retail client branch

Approx.

(People)

550
April
2016

April
2017

October
2017

April
2018
(plan)

March
2020(plan)

Initiatives toward the Establishment ofan Online Branch Increase transactions with young customers byproviding services different from those offered atexisting branches Provide people across Japan who like Nara information
about the appeal of Nara, an ancient capital of Japan,
in order to increase the number of transactions at the
Bank and to promote people to visit the area

 Maintenance/expansion of a businessfoundation for the future
 Revitalization of the local economy

17

1. Pursuit of the Four Reforms (2) Sales Reform (iii) Retail Business Strategy—Securities and Inheritance Businesses
 Serve as the closest possible consultant for customers of all generations by paying proper
attention to their life stages
Results of Retail Business Strategy

Current Conditions (1H FY2017)<Sales>(¥ billion)

100.0+¥10.7 billion
from FY2016

96.3
2.9
35.6

50.0
57.6

81.0

70.2
4.8
21.5
43.8

0.0

Financial
product
intermediation

26.4

Life
insurance

1.3
6.5
18.4

Investment
trust

FY2015 FY2016 FY2017 FY2017
Full Year Full Year
1H
Full Year(forecast)

4.0+¥0.0 billion
from FY2016

3.71
0.04

2.82

1.78

0.07
1.18

2.0
1.88

1.55

0.0

FY2015FY2016
Full Year Full Year

 A unit-based sales promotion structure was introduced in
April 2016 and is currently in use in 6 units and 23 branches.
Under this new structure, sales staff from headquarters
provide services to individual customers.
 There was insufficient cooperation between employees at
headquarters and the branches.
 Due mainly to the reform of the sales platform describedabove, the number of inexperienced sales personnel
increased.

Activities<Actual profits>(¥ billion)

Changes to the sales platform The Bank was committed to activities for term-specificfunded investment trusts.

2.83
1.03

Others

0.03
0.27
0.71

Life
insurance

FY20171H

FY2017Full Year(forecast)Investment
trust Reinforce our securities business byimplementing measures in sequence
in response to these situations18

1. Pursuit of the Four Reforms (2) Sales Reform (iii) Retail Business Strategy—Securities and Inheritance Businesses
Principal Measures to Reinforce RetailCustomer Sales
Reallocation of sales staff in accordance withcustomer hierarchies<Life insurance sales><Investment trust sales>
4.00

2.00

3.84

(¥ billion)

1.26

3.28
<Branches> Eliminate the unit-based sales promotion structure of
the retail sector and clarify the roles of employees atbranches Appoint an officer in charge of retail customers at
each branch and reinforce initiatives<Headquarters>
 After adding 3 members who have professional skill
to FA Office in headquarters, a total of 15 members
will provide support for the promotion of services for
2,000 wealthy customers at all branches.
 Newly allocate 5 employees for area support andestablish a follow-up system for employees atbranches

Activities
 Focus on sales of products such as
intermediation services for insurance and otherfinancial products to a wide range of customers,in addition to potential customers for investment
trusts Implement activities to discover the needs of all
80,000 retail customers
 Reinforce initiatives targeted at corporate owners
through cooperation with corporate sales
representatives

3.00

1.61

(¥ billion)

0.90

1.00

2.83

0.00

2.00
April to June
July to2017 (monthly
Septemberaverage)2017 (monthly
average)

April to June
July to
October 20172017 (monthly September
average)2017 (monthly
average)

October 2017

Investment trust sales and life insurance sales steadily improved.

+

Major Achievements in 1st Half of FY2017
Term-specific funded investment trust
Number of contracts
13,248Amount of monthly transfer¥1.53 billion
contracts
Total amount of transfers¥24.06 billion
throughout contract periods*May 22, 2017–September 30, 2017

Trust products
Number of
445
contracts
Amount¥1.59 billion
Testamentary trusts
11
Inheritance arrangement2
services*April 17, 2017–September 30, 2017
Testamentary
substitutetrustsFunded investment trust
Total amount of monthlytransfer contracts
March 2017

September 2017¥0.37 billion¥1.93 billion

Personal DC pension
plan “iDeCo”
Contracts
obtained
2nd half of FY2016261

1st half of FY2017

2,805

Total

3,066

*January 4, 2017–September 30, 201719

1. Pursuit of the Four Reforms (2) Sales Reform (iii) Retail Business Strategy—Personal Loans
Results/Initiatives of Personal Loans

Bolster Consumer Loans<Consumer loans balance (average balance)>(¥ billion)

22.0

22.6

22.8

20.7

Continue to utilize direct channels+¥0.8
billionfrom
FY201620.0

 Functions to apply for various types of loans were added to oursmartphone application. (March 2017)
 Advertisements were run using NTT DOCOMO’s Message S service.
(June 2017, October 2017)
 Promotions by the promotion-call team were reinforced. (October 2017) The introduction of a fully online loan application system wasconsidered.

Implementation of a campaign
 A special interest rate campaign for purpose-specific loans was
implemented.
 Provision of preferential interest rates, etc. for refinancing fromother banks

15.0
FY2015Full Year

FY2016
Full Year

FY20171H

FY2017Full Year(forecast)* Balance of card loans as of the end of September 2017 (period-end balance): ¥13.7 billion<Housing mortgage loans balance(average balance)>(¥ billion)

900.0

924.1
865.8

931.9

898.7

+¥33.2billionfrom
FY2016Introduction of reverse mortgage-type housing mortgage
loans (December 2017) Loans are covered by the Japan Housing Finance Agency’s housing
loan insurance.
 These loans respond to the housing-related demands of seniorcitizens. (60 years old and up)
 Purpose of loan: Construction, purchase or renovation of a house,payment upon admission to housing for the elderly which provides
home-care services, refinancing

Bolster Housing Mortgage Loans
Step up promotion via L Plaza,a specialized department

800.0

 12 outposts staffed by 64 staff (September 30, 2017)

700.0
FY2015Full Year

FY2016
Full Year

FY20171H

FY2017Full Year(forecast)

Approx. 80% of all
housing loan contracts
were signed at L Plaza<Results> (１H FY2017)
Total amount ofloan contracts
L Plaza¥49.5 billion¥39.4 billion

Greater promotion for refinancing targeting specific clients201. Pursuit of the Four Reforms (2) Sales Reform (iv) Corporate Business Strategy
 Aim to become the true main bank for the customer through exercising the consultation function
and delivering solutions according to the company’s growth stage
Initiatives toward Increasing
Customers for Retail Business Loans<Number of newly-acquired
retail business customers>(Entities)

3,000

3,000

2,000

1,674

1,918

Sustainable business model
Growth period

Founding periodBusinesspracticality
assessment

New transactions

Becoming a main bank

Increased market
share

Provision of solutions for corporations and corporate owners ⇒ Contribution to earnings

1,000

970

0
FY2015 FY2016 FY2017 FY2017
Full Year Full Year
1H
Full Year(forecast) Initiatives toward speeding up the acquisitionof new customers
 Utilization of loan programs for small-scale
enterprises and startups
 Discovery of potential needs ⇒Implementation of challenge-solution sales
 Promotion of transactions throughinvestment funds

Introduction of “Nanto Fresh Fund” (September 2017)
 Target: Small-scale enterprises within
operational boundaries
 Loan period/amount: Up to 7 years/¥20 million

From September
to October 2017
Number of loan
contracts signed
New customers

68
61

Assist company and new business creation
 Business Plan Commercialization Assistance Project:“Nanto Success Road”
 A total of 25 plans were chosen(selection for this fiscal year is underway)⇒13 plans have been
October 31, 2017
commercialized(total)“Nanto Commercialization
Business plans
35 plans
Assistance Fund 80”
received
 A loan program for creating
Loans provided 25 plans/¥397 million
companies and new businesses21

1. Pursuit of the Four Reforms (2) Sales Reform (iv) Corporate Business Strategy
Reinforcement of Solution Business<Corporate solution business-related income>1,000(¥ million)

500* The total combined amount of foreignexchange-related income, syndicate loans,private placement bonds, business mediation
services, M&A, business succession support
services and corporate insurance services

366

846

499

<Change from
FY2016>+¥347 million<Change from
the MediumTerm
ManagementPlan>+¥104 million

 Corporate solution business-related income earned(1H FY2017): ¥320 million (Y/Y change +¥90 million)
 Establishment of the Corporate FA Office (July 2017)⇒ Reinforcement of corporate insurance sales
 Greater promotion of private placement bonds<Private placement bonds arranged>

323

0FY2015FY2016
Full Year Full Year

FY20171H

FY2017Full Year(forecast)

2H FY2016

1H FY201720/¥2.3 billion

50/¥4.0 billion

Provision of solutions leading toan increase in added value

Utilization of investment funds
 Enhance support for creating companies and new businesses by utilizing two funds
 The Corporate Venture Capital Office was established in the Corporate Business Division (July 2017) to promote andmanage the utilization of funds in an integrated manner.
Fund name
Time established
Guaranteed amount of funds

Investment target/purpose

Nanto CVC Limited
Liability Investment Partnership
June 2017¥1.0 billion
 Assist core enterprises that will contribute to
the economic, industrial and regional
revitalization of Japan in the future⇒ Assist customers in sales-target areas of the
Bank in cooperation with investee companies

Nanto Regional Vitality Creation Support Limited
Liability Investment Partnership
September 2017¥0.5 billion

 Discover and provide support for future coreenterprises in the target areas of the Bank andto supply risk money to the region

The first project (November 2017): Investment in a company which provides an AI-based English-learning
application in an effort to assist incoming travelers in local areas22

1. Pursuit of the Four Reforms (2) Sales Reform (iv) Corporate Business Strategy
Delivering Financial Intermediation Functions Based on Business Practicality Assessments<Retail business new effective yields>
(%)

1.20

1.16
1.06
1.01

1.03

 Deliver consultation functions by promoting dialogue
based on business practicality assessments
 Bolster relationships with companies which have thehighest annual turnovers in Nara Prefecture, incollaboration with headquarters and branches by utilizing
business practicality assessment reports
 Initiatives for rebalancing portfolios by rating⇒ Improvement in profitability<Number of borrowers based on
business practicality assessments>

0.90
FY20152H

FY20161H

FY20162H

FY2017
1H

March 31, 2017
Number of borrowers
based on businesspracticality assessments

September 30, 2017(preliminary figure)

5,030

7,500

Loan programs based on business practicality assessments
 “Nanto Long-term Support”
 Long-term loan program (10 to 20 year loan period)for small to medium-sized businesses Purpose of loan: Rescheduling of existing loans,funds for equipment

“Nanto Vitality Creation Support Fund”
 Provide loans to higher risk customers, etc. without
excessively relying on financial data or collaterals
and guarantees<Results>
Number signed
4
Amount signed¥0.72 billion
Average interest rate
3.16%

<Results>
Number signed
311
Amount signed¥5.84 billion
Average interest rate
2.57%

*September 2017–October 2017* October 2015–October 201723

1. Pursuit of the Four Reforms (2) Sales Reform (v) Osaka Strategy
 Raise the Bank’s presence by actively allocating or reallocating our corporate resources, based onbranch continuity

Results/Initiatives of Osaka Strategy
Allocation of corporate resources<Number of newly-acquired customers
in retail business><Branch layout (21 in total)>(Entities)

1,000

1,000

Esaka Branch

July 2017: New branch
September 2017: Relocation
and re-opening

Shin-Osaka
Branch<Branch Layout (21in Total)>
Daito Branch

Amagasaki Branch

590
398

500

Osaka Kita Branch

382

Osaka
BranchFY2015Full Year

FY2016
Full Year

FY20171H

FY2017Full Year(forecast)Tezukayama
Branch(¥ billion)

161

170

284.7

150
Izumi Branch+¥10.9billion from
FY2016250.0

100
FY2015 FY2016
Full Year Full Year

FY20171H

FY2017Full Year(forecast)

HiranoBranchWakaeiwata
BranchYao Branch

Hatsushiba Branch

Habikino Branch★ Reinforcement of activities by the teampromoting transactions with corporate owners

162
314.1 313.7

300.0

Sakai Branch

Approx. (People)

325.0

Eiwa
BranchOpened after constructionin July 2017

<Balance of retail business loans (average balance)>¥17.7 billion transferred to thewholesale side of the Bank
(April 3, 2017)

Ishikiri Branch
YoshidaBranch

0

Sales
staff

Osaka Higashi
BranchOsaka Chuo Office(Activities began in full in June 2017.)
 Implement activities for services such as businesssuccession, inheritance arrangement and asset
management in cooperation with members fromheadquarters and tax accountants⇒ Aim to increase transactions not only withcorporations, but also with retail customers
Kawachinagano Branch

Izumisano Branch24

1. Pursuit of the Four Reforms (2) Sales Reform (vi) Market Investment Strategy
 Expand profits by diversifying our investment methods while taking risks appropriately
Investment Plan for the 2nd Half of FY2017<Market-sector core gross business profit>

Investment policy(¥ billion)

Basic asset
allocation policies

 Take interest risks cautiously Shift from bonds to stocks,
credit, foreign currencies, etc.

15.0+¥0.4 billion
from
FY2016

17.7

17.3
15.0

<Balance of securities>(¥ billion)

2,000.0

1,500.0

1,719.9
123.0
64.4
107.0
322.8

*Investment trusts:
Bond investment trusts (Treasury bond ladder fund),equity investment trusts, J-REITs, multi-assets,market neutral, bear funds, etc.

1,629.9 1,606.9 1,566.7
226.2
63.6
66.3
265.9

1,000.0500.0

1,102.5

1,007.7

262.2
67.8
98.0
230.4

948.4

880.9

Investment trusts(+¥135.3 billion)

March 31,2016

March 31,2017

September
30, 2017

March 31,2018
(plan)

6.0

Yen bonds(-¥126.8 billion)

Foreign bonds

5.3
4.5

Equities(+¥13.0 billion)
Eurodenominatedbonds(-¥7.8 billion)

FY2016FY2017(plan)<Bond duration>(Years)US dollardenominatedbonds(-¥76.9 billion)

0.0

FY2015

Change fromMarch 31, 2017-¥63.2 billion

361.6
76.7
58.5
189.1

10.0

4.2

Total

5.6

4.9

4.4
4.2

Yen bonds

4.4

March 31,
2017

4.0

3.9

3.6

September
30, 2017

March 31,2018
(plan)

3.0
March 31,
2016

5.3

<Sell policy investment-based shareholdings>
Reduce the balance continually each fiscal year25

1. Pursuit of the Four Reforms (2) Sales Reform (vii) Group Strategy
 Grow consolidated profits through delivering comprehensive financial services by tapping into ourGroup’s capabilities
Bolster Our Group’s Capabilities
The Nanto Bank, Ltd.
Nanto Estate Co., Ltd.
Nanto Credit Guarantee Co., Ltd.

Nanto Business Service Co., Ltd.

Nanto Lease Co., Ltd.

 Consider entering the securities
business, etc. and build a sales
platform involving the entire groupcapable of adjusting to a variety ofclient solutions

Nanto Computer Service Co., Ltd.

Nanto Investment
Management Co., Ltd.

Nanto DC Card Co., Ltd.

Nanto Card Services Co., Ltd.

Nanto Staff Service Co., Ltd.

Nangin Agency Co., Ltd.

<Results of Nanto Lease>(¥ billion)

10.0
5.0

Number of customers

2,024
8.1

2,261

2,407

<Results of Nanto Card Services>

2,600(Cases)11.5+¥1.0 billion
from FY2016

10.5

20.0

10.0

Number of card
programmembers

93
14.0

101

105 of users)
18.1

8.9
1,000

FY2017
1H(Thousands

102

16.8

4.9

0
0.0

FY2015FY2016
Contract
value Full Year Full Year2,000(¥ billion)

FY2017Full Year(plan)

0.0
0Value
of use100+¥1.3 billion
from FY2016

50

FY2015FY2016
Full Year Full Year

FY20171H

FY2017Full Year(plan)

26

1. Pursuit of the Four Reforms (3) Clerical Operations Reform Fundamentally overhaul the clerical operations of branches and the headquarters,
thus transforming the organization into a more efficient one
Rebuilding of Clerical Operations Structure of branches
Consolidation of back office clericaloperations into headquarters

Establishment of next-generation branches
 Consolidation of electronic verification operations was tested.
(August 2017)
 Operations to use tablets in handling written notices for theloss of qualification were tested. (September 2017)⇒ We will continue to consider measures and policies and aim tobegin a trial run for a pilot branch in the 2nd Half of FY2019.
<Key measures and policies to consider> Consolidation started at branches which hadcompleted the Clerical Operations Standardization
Activity (elimination of branch-specific clericaloperations).
<Status of Standardization (as of September 30)>57 branches

Front officeand sales
2H
FY2016

Number of
branches which
underwent
consolidation(total)1H
FY20172H
FY2017(target)Back office,etc.

All-branchengagement
11
branches37
branches129
branches

 Sales tablets
 Insurance tablets
 Account tablets (completing forms,
opening accounts)
 Receipt-free, seal-free Cardless transactions
 Aggregation of electronic verification
operations
 Review of call handling operations
 TV terminals

 Significant reduction of clerical
workload<Decrease of number of clerical staff>

Clerical staff, High Counter
staff at branches

September
30, 2016

September
30, 2017

526

479

Change from
September
30, 2016-47

March 31,2022 (plan)

230

Change from
September
30, 2017

 Make branches a place
where the staff are able
to focus on sales

-249
27

1. Pursuit of the Four Reforms (3) Clerical Operations Reform – (4) Expenses Reform
Streamlining of Clerical
Operations at Headquarters
Introduction of RPA (October 2017) Clerical operations were reduced mainly in sectors
which have heavy clerical workload.
⇒ We will increase the number of target sectors andcontinue to cut costs and improve the quality ofoperations.

 Revise expenses as a whole to transform
our expenses structure
Expenses<Personnel expenses>(¥ billion)

25.5

22.6

22.2

20.0
Revision of operations at headquarters
 Reduce existing routine duties

11.4<Change from
FY2016 >+¥0.37 billion(Breakdown)
Overtime: -0.19
Bonuses: +0.66

10.0 Reevaluate meetings and work methods

0.0
FY2015 FY2016 FY2017 FY2017
Full Year Full Year
1H
Full Year(forecast)

Renewal of intranet infrastructure, etc.
(2nd half of FY2017 and onward) Reduce system costs by going paperless with tablets andalso by integrating various functions
 Streamline operations with electronic approval systems,
operational control functions, etc.
 Develop functions that lead to workstyle reform Reduction of staff at headquarters bystreamlining operations

 Transformation to a moreproductive organization<Non-personnel expenses><Change from
FY2016 >+¥0.02 billion(¥ billion)

15.0

10.0

15.7

15.4

15.4
7.6

(Breakdown)
Depreciation ofpremises andequipment: -0.08
Advertising: +0.10

5.0
0.0
FY2015 FY2016 FY2017 FY2017
Full Year Full Year
1H
Full Year(forecast)28

2. Regional Revitalization
 Create regional vitality by playing a leading role in local community, people and job areas
Proactive Involvement in the Regional
Comprehensive Strategy
Participation in specific initiatives of comprehensive
cooperation partners
 The Bank has concluded a cooperation agreement with 33 partners (NaraPrefecture, 19 local municipalities within the prefecture, and 13 other partners).

<Main initiatives in the 1st half of FY2017>
Partner

PeriodTenri City

April
2017

Sakurai City

May
2017

Ikoma City

July
2017

Yamatokoriyama City

July
2017

Details
 Received a contract for the “Local Human Resources
Department” Strategy Formulation Project(collaboration with Nanto Economic ResearchInstitute) Invested (5%) in the urban renewal promotion
corporation, Sakurai Machizukuri Co., Ltd.
⇒Contribution to the revitalization of the area aroundthe south gate of Sakurai Station
 Invested (5%) in the local energy company, Ikoma
Civic Power⇒Provision of financial support for their operations
 Held an informal networking event for young
employees in the public sector⇒ Cooperation in the city’s policy planning

Participation in the Regional Comprehensive Strategy PDCA
 By participating in a training program for employees of the Nara
Prefectural Government and local municipalities hosted by Nara
Prefecture, we provided support and guidance to the employees.
 Support was provided for the policy planning of Oji-cho, Nara City by
utilizing the RESAS (Regional Economy Analysis System) in collaboration
with Regional Bureaus of Economy, Trade and Industry.

 Provide support for measures and policies of local public
entities by utilizing the expertise of the Bank as a local
financial institution, and contribute to the revitalization of
the region

Tourism Promotion
Creation of “Nara fans”
 Creation of Nara fans with greater promotions<Main initiatives in the 1st half of FY2017>
Bus tour in cooperation  Second round of tours (May and June 2017)with Club Tourism⇒ A 3rd round is scheduled for January andInternational Inc.
February 2018
 The 8th seminar (July 2017) ⇒ 350
Tourism seminar
participants (joint sponsorship of the Nara
“Tourism Strength
Prefectural Government/assistance from theCreation Seminar”
Kinki Local Finance Bureau)
 Listing and renewing of information: 94
Regional website “Eeupdates
Koto Nara”
 Advertising on Facebook
 Participation in the Japan Sake Brewery
Tourism Promotion Council (August 2017)
Other⇒ Deliver information about regional
resources, such as sake brewing

Proactive involvement in the formulation of tourism strategies
 Support for the creation and establishment of a DMO (Destination
Management Organization: a public-private organization for tourism
business)⇒ Cooperation agreement with the Nara Visitors Bureau (October 2017)
 Initiatives aimed at partial participation in the projects of local public
entities and candidate corporations for DMOs, etc.
⇒ Building a system which will generate revenue

Establishment of the Tourism Strategy Office (October 2017)

 Establishment of a new business modelthrough promoting tourism
29

表紙Ⅰ

IV. Business Forecasts for
FY201730

1. Summary of Profit and Loss, Shareholder Returns
Business Forecasts for FY2017

Shareholder Returns

FY2016 FY2017(¥ billion)

Full Year
Forecasts

1 Core net business profit

13.7

12.9

-0.8

-0.2

2

49.6

48.3

-1.3

-0.1

Interest income

Y/Y
ChangeCompared to theMedium-Term
Management Plan

Full Year
Results

3

Interest on loans

32.4

30.8

-1.5

+0.2

4

Interest on securities

20.3

20.9

+0.5

-0.4

Financing cost

3.7

4.0

+0.2

-0.0

6

Fees and commissions

5.3

5.8

+0.4

-1.3

7

Other operating income (*1)

-1.0

-0.6

+0.4

+1.1

8

Expenses

40.1

40.5

+0.4

-0.1

9 Net business profit

14.7

11.8

-2.9

-1.5

10 Ordinary income

16.0

16.8

+0.7

+2.7

11 Net income

12.1

12.2

+0.0

+2.1

12 Credit cost (*2)

2.9

-1.0

-4.0

-2.5

*1 Excludes gains/losses on bonds (JGBs, etc.)*2 (Net transfer to general provision for possible loan losses + Disposal of non-performing loans)− Bad debt recovered − Reversal of allowance for loan losses

FY2016

Full Year

Full Year

1H

Ful Year(forecasts)(1)

Consolidated
net income¥ billion

12.1

12.5

6.0

(12.5)(2)

Dividend per
share

¥

*70

70

35

(70)

(3) Total dividends ¥ billion

1.8

1.8

1.1

(2.2)

Payout ratio((3) / (1))

15.4%

15.0%

18.9%

(18.2%)

0.00

0.01

0.00

－

15.5%

15.1%

19.0%

－

(4)

5

FY2017FY2015(5)(6)%

Amount of treasury¥ billion
stock acquired
Total ratio ofreturn((3) + (5)) / (1))%

* Adjusted to post stock-merger standard

Promote Dialogue with Shareholders
 Individual shareholders
 Held a shareholders forum in September 2017
(the second of its kind following the one from 2016)
Hold IR events for individual investors
 Institutional investors
 Hold information meetings (twice a year) andincrease of one on one meetings
31

2. Target Metrics
Medium-Term Management Plan
“Vitality Creation Plan II—Changing and Taking on Challenges”

FY2016FY2017Full Year

1H

Full Year(results)(results)(forecasts)

Y/Y change

Com pared to theMedium -Term
Managem ent Plan

FY2019target

OHR

74.45%

77.67%

75.82%+1.37%+0.17%

Less than 70%

Non-interest
income ratio

10.40%

9.66%

11.52%+1.11%-2.45%

20% level

Capital adequacy
ratio

9.19%

9.85%

9.64%

+0.45%+0.60%

Approx. 10%

ROA

0.24%

0.20%

0.22%

-0.01%-0.00%At least 0.3%

ROE

4.88%

4.62%

4.60%

-0.27%+0.74%At least 5%* Calculation formulae for the metrics• OHR:
Expenses / Core gross business profit• Non-interest income ratio: (Fees and commissions + Other operating income (excluding
gains/Losses on bonds (JGBs, etc.)) / Core gross business profit• Capital adequacy ratio:
Core capital / Risk assets• ROA:
Core net business profit / Total assets• ROE:Net income / Net assets

32

In this material, we refer to the future performance of the Bank.
However, please be aware that these contents do not guarantee our future
performance and it may change due to the unexpected risks and uncertainties in
the operating environment.

[Contact, if any:]

The NANTO BANK, LTD. Corporate Planning DivisionTEL:0742-27-1552

FAX:

0742-20-3614

E-mail: ir-souki@nantobank.co.jp
URL:

http://www.nantobank.co.jp/

This presentation material, having been created with Yoshino 3.9 Paper
conducive to efforts to use thinned timber in the Yoshino area, Nara, Japan,
contributes to forests absorbing a growing volume of carbon dioxide.
Nanto Bank is a supporter of the Yoshino Heart Project and the Kizukai Drive.