ANNUAL REPORT 2023
Year Ended March 31,2023

3

Sustained contribution to the regional communities
Management Principle

Strive to become a financial group that “endear ourselves to the regional
community by providing services tailored to customers’ needs, whilevaluing “broad networks of relationships” and “an enterprising spirit.”

Management Policy

1. Create a “most trusted by customers” financial group which
respects personal relationships and promotes honest andapproachable banking.
2. Create a financial group with a commanding regional presence byresearching and predicting trends to provide advanced, high-quality services.
3. Pursue transparent operations and live up to the trust of theshareholders, while maintaining a competitive edge through strong
financial standing, high profitability and management efficiency.
4. Promote “coexistence with the region” by utilizing industrial,academic and management networks for business matching.
5. Focus on gaining the trust of the communities through compliancewith laws and regulations and corporate activities that are considerate of the environment.
6. Provide a workplace for employees of the financial group which
encourages employees to exercise talents and develop skills, with
an emphasis on proactive self improvement, thereby contributing to
the development of upstanding citizens.

Vision ‘25

We contribute to build a future society where everyone can be active,
by offering absolute solutions to our regional customers and developing our potential ability.

Basic Policy

1. Offer the most suitable solutions exactly from customers’ point ofview through the various issues of customers.
2. Create a workplace where employees can be active in diverse
fields by meeting customers’ trust.
3. Contribute to realize a sustainable development of the regional
communities and reliable and fulfilling life of regional customers
through our business activities.

CONTENTS
Top Message ……………………………………………… 2
Messages From Outside Directors ……………………… 8

Response to Climate Change ………………………… 22
Corporate Governance ………………………………… 26

Human Capital Management …………………………… 12

Compliance Structure …………………………………… 34

Outline of the Fifth Medium-TermBusiness Plan for Vision‘25……………………………… 14
Our Policies on Cross-Shareholdings ………………… 15

Structure for preventing Money launderingand the financing of terrorism ………………………… 36
Risk Management Structure …………………………… 38

Measures to Achieve Capital
Cost-conscious Management ………………………… 16

Approach to Facilitation of Financing ………………… 42
Corporate Information …………………………………… 44

Diagram of Value Creation by
Financial and Non-financial Activities ………………… 17
Establish and provide
Thorough solutions ……………………………………… 18
Financial and Non-financial Highlights ………………… 19
DX Initiatives of the Senshu Ikeda
Holdings Group ………………………………………… 21

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SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

Business Description of the Group …………………… 46
Organization and Board of Directors ………………… 47
Consolidated Financial Informationof Senshu Ikeda Holdings ……………………………… 50
Non-consolidated Financial Informationof The Senshu Ikeda Bank (Unaudited) ……………… 94

Top Message

Atsushi Ukawa
Representative Director, President and CEO

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

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In FY2023, we will work to improve
profitability while responding to regional
issues through the development of thoroughsolutions.
Results of securities investment review
The Senshu Ikeda Holdings Group (hereinafter “theGroup”) has formulated Vision ‘25 as its ideal vision
for how the Group seeks to be in time for the Expo
2025 Osaka, Kansai, Japan in 2025. The Group aims
to realize its growth strategy under the Fifth MediumTerm Business Plan based on this vision.
Starting with the business environment in FY2022,
financial markets were supplied with more thanenough liquid funds during the about three years of
the COVID-19 pandemic. At the same time, however,geopolitical risks such as the U.S.-China relationshipand the crisis in Ukraine have damaged the global
economy. In addition, interest rates in Europe andthe U.S. have risen sharply in response to global
inflation, creating an even more challenging businessenvironment for regional banks.
There is a view that rising interest rates will work
to the advantage of financial institutions. Higher
interest rates overseas do indeed benefit the socalled megabanks (major banks), but regional banks
do not benefit as much because their lending rates
will not rise unless domestic short-term interest rates
also rise. Moreover, as a regional bank that invests
in bonds, another aspect that has strongly come tothe fore is that the fall in bond prices accompanying
rising domestic and international long-term interest
rates undermines profits.
Since I became president of The Senshu Ikeda Bank,
we have responded to these factors by focusing on
our core business, while at the same time taking
the initiative to address the fundamental issues on
our balance sheets and decisively reviewing our
securities operations. However, with a loan-deposit
gap (i.e., the difference between a bank’s loanbalance and deposit balance) of approximately ¥1trillion, we cannot sit idly on our hands. We havetherefore invested in domestic and foreign bonds
while carefully assessing the risks.
As a result of disposing of bonds with poor value
at an early stage, the unrealized gains/losses on
securities were positive, and we did not need totake any action such as downward revisions of ourearnings forecast in the consolidated financial results
for the fiscal year ended March 31, 2023. Despite thedifficult business environment, we believe that ourapproach of taking controlled risks in our securities
investments over the past several years has beensuccessful. Mindful of the possibility that domestic

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SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

interest rates may still rise in the future, we will focus
on securing additional earnings and addressing theloan-deposit gap issues as we keep a close eye on
trends while investing in domestic bonds and otherassets.
As for the consolidated results for FY2022, althoughconsolidated ordinary income increased 9.4%
compared to the previous period, net income
attributable to owners of the parent decreased 16.6%.

The “aggressive branch strategy”
at the axis of the center of Osakais accelerating
Regarding the key strategies in the Fifth MediumTerm Business Plan, the “aggressive branch strategy”
is accelerating with regard to the “establishment
and provision of thorough solutions.” In June 2022,
The Senshu Ikeda Bank established the new Osaka
Central Sales Division. This is the second piece ofcorporate sales reform following the establishment of
the Head Office Sales Division. With the Honmachi
B ranch, the l argest corporate bra nch i n O sak a,as the core, the Osaka Nishi Branch and SakaisujiBranch have been consolidated to enlarge the base,and the sales organization has been divided into
two sections: the first for small and medium-sizedcorporate customers and the second for large andmid-sized corporate customers. By assigning asenior managing executive officer to this division anddelegating authority to the officer, we have created astructure that enables us to flexibly offer solutions to
our customers.
These measures have enabled us to focus our sales
activities on customers of publicly listed companies, anarea traditionally dominated by megabanks. Strangely,
the ability of the megabanks to respond to the needsof relatively small listed companies appears to be
weakening. In contrast, the Head Office Sales Division
has strengthened its sales structure to match thescale and meet the needs of customers, conducting
meticulous sales activities and seeing results. We are
now taking on the challenge of improving profitability
through similar efforts at the Osaka Central Sales
Division.
In May 2023, the Esaka Branch, located north of the
Head Office Sales Division, moved from its previous
street-level location to the 19th floor of an officebuilding and integrated with the nearby Ryokuchikoen
Branch to develop solution sales tailored to market

SENSHU IKEDA HOLDINGS,INC.

characteristics in the same manner as the Head Office
Sales Division and Osaka Central Sales Division. In
November of the same year, the Senri-Chuo Branch
will also be moved to the upper floors of a building,where it will be integrated with the nearby Kita-Senri
Branch, Onohara Branch, Saito Branch, Minami-Senri
Branch, and Momoyamadai Branch for a total of six
branches in the area to form the Senri-Minoh Sales
Division. In addition to the retail market, we plan tostrengthen solutions for the wealthy and corporate
markets by dividing our solution sales activities into thefirst, second, and third sections according to customer
attributes.
In other words, we will have our branches and divisions
positioned along Midosuji Avenue, which is the northsouth axis of the center of Osaka, starting with the
Senri-Minoh Sales Division in the north, followed by
the Esaka Branch under its new structure, the Head
Office Sales Division, and the Osaka Central Sales
Division. These will develop thorough solutions tailoredto the characteristics of each area, thereby increasing
competitiveness and improving profitability.
We will be able to realize such a branch strategy
only because we have eliminated the use of uniform
performance evaluation standards that apply equallyto all branches. This has created an organizational
structure that allows us to take measures to enhance
the competitiveness of our Group as a whole in amanner of our choosing. We also must not overlook
the fact that following the elimination of performance
evaluations, each and every employee of the bankhas taken a positive attitude toward responding to
the needs and challenges of customers. In fact, thenumber of people who have obtained the national
certification of the 1st-grade CSPFP (Certified Skilled
Professional of Financial Planning) has soared fromjust 40 in 2021 to 130 by March 2023. These include
19 employees at the branch manager level. With thesecertifications in hand, branch managers held customer
consultation meetings on asset management at theirown discretion.
In the past, campaigns and other events could only beheld under the planning of the head office, but the new
structure allows branches to hold such events on theirown initiative, dramatically increasing the number ofconsultations. Furthermore, when customers asked foradvice on inheritance and other matters in the past, theresponse was often, “We will discuss the matter with thehead office and get back to you.” Sometimes it took along time for the customer to receive a response. Now,
however, employees with professional qualifications
such as the 1st-grade CSPFP certification can provide
consultation and advice on the spot, greatly enhancing
the bank’s responsiveness and presence.
In addition, until now, sales activities were often
divided into private (individual) sales and corporate
sales. It often happened that if an employee working in
corporate sales happened to touch upon a customer’s
individual needs, they would be unable to proactively
address those individual needs as part of their own

work. In contrast, we are now aiming to build astructure that can respond to customers’ issues in boththe private and corporate sectors, including owneroperated companies, through the development ofthorough solutions, aiming to create a customer-driven
sales structure. Going forward, The Senshu Ikeda Bank
will use a new talent management system to identify
each employee’s career history since joining the bankand provide opportunities for each individual to develop
their personal characteristics and play a more activerole in the bank. We will also explore the solutions fromthe customer’s perspective through reforms that break
down the barriers of stove-piped organizations.

Focus on increasing presence
through the “balance sheet of potentials”
In FY2023, we intend to develop more thoroughsolutions than ever before by leveraging the Group’s
distinctive feature of its “balance sheet of potentials.”
The balance sheet of potentials is a hypotheticalbalance sheet that promotes the Group’s strengths.
The borrowing side lists assets such as our wide rangeof growth opportunities and favorable geographicallocations in the center of Osaka and other excellent
locations, while the lending side corresponds to theliabilities in a normal balance sheet, showing ouralliances with industry, academia, and government.
Resources such as our diverse human resources, highadded value, strategic partners, etc., are listed among
net assets.
Based on this concept, we have successively
unleashed the three “arrows” that we have describedin the past, namely, “improving potential,” “improving
empathy,” and “improving presence.” In FY2023, we
will focus on “improving presence,” especially from theperspective of producing results for our efforts. This is
the core of the Group’s growth strategy in FY2023.
Among the solution business in FY2023, my focus is on
human resource support for our customers. Specifically,
I would like to use our staffing service to support
customers who are struggling with labor shortages.
Compared to businesses such as structured finance,
a popular business among financial institutions, one
might expect that commission income from recruitingis negligible. However, I am fully convinced thatproviding human resource support will strengthen our
relationships with our corporate clients.
At present, the Group maintains alliances with 29
recruiting firms. Based on these alliances, we are
now in the process of creating a matrix including
our corporate clients’ scale and industries, as wellas any patterns in the human resources they seek.
With this matrix, our sales representatives are able toimmediately send requests to the staffing agencies assoon as they receive the customer’s wishes, enabling
personnel matching. The company already has a trackrecord of completing up to 350 personnel placements
per year. We intend to use these efforts to achieve a
breakthrough to develop solutions.
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

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Collaborating with regional
communities to explore solutions
We believe that the key to achieving success withoffering thorough solutions lies in starting small anddeveloping into a large business model. Businesses
that start out with a large-scale setup tend to have arather low probability of success, as well as high risks.
I believe that a fitting strategy for a regional bank is toinstead launch one small business after the other, andaim to score a hit.
To give an example, in addition to human resource
support, the Group Strategy Division is taking on
the challenge of developing local, on-demandtransportation providers. In December 2022, theCompany concluded an agreement with AISINCORPORATION to collaborate and cooperate on the
promotion of ride-sharing services. We aim to improve
regional transportation by introducing locally based
AI on-demand transportation, while also supporting
outings for the elderly and promoting their health incooperation with business operators. Through these
efforts, we hope to contribute to the development ofsustainable local communities. In fact, from January
to February 2023, we conducted a demonstration
experiment of an on-demand taxi cab dispatch system
in Hannan City, Osaka Prefecture called “Choi Soko
Hannan.” Following this experiment, movements toward
full-scale implementation are gaining steam.
The question of how to support the elderly when they
go out is a common challenge for local governments
across the country. We will begin by creating a
successful pilot project in one region, followed by
exploring the possibilities of horizontal development inother regions. Moreover, this initiative has great social

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SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

significance and can serve as a catalyst for creating
new business opportunities by developing relationshipsof trust with the customers in the respective regions
who use the transportation system. Although this is thevery epitome of a small business, and the earnings
in and of themselves are thus quite modest, we areconvinced that further possibilities will open up as
the entire Group becomes more seriously involved inaddressing social issues.

Responding seriously to regional(and communal) social issues
Our cooperation with local governments is accelerating
efforts to address regional issues in concrete terms. For
example, in August 2022, The Senshu Ikeda Bank signed
a partnership agreement with Fujiidera City in Osaka
Prefecture to cooperate on stimulating the local economy.
In addition to promoting businesses within the city, these
efforts will support local digital transformation (DX) andthe development of business continuity plans (BCP). In
addition, in April 2023, the Bank signed an agreementwith Sakai City in Osaka Prefecture to collaborate on thedevelopment of high-quality housing stock. This will help
to address the issues of vacant houses in Sakai City,
promoting the use of such houses, preventing houses
from becoming vacant in the first place, supplying highquality housing, and encouraging families with children
to settle permanently in the city.
Furthermore, in April 2023, the Company concluded
an agreement with Izumi City, Osaka Prefecture, tocollaborate on initiatives to improve citizen services andcreate a vibrant community. This marked the first timethat Senshu Ikeda Holdings, Inc. as a company—rather
than The Senshu Ikeda Bank—signed a partnership

SENSHU IKEDA HOLDINGS,INC.

agreement with a local government. The collaboration
was born of Izumi City’s high expectations for the
possibilities offered by our wide-ranging network. Bybuilding alliances with local governments in this way, we
intend to post results in both addressing social issues
and capturing business opportunities during the periodof the Fifth Medium-Term Business Plan.
In December 2022, The Senshu Ikeda Bank opened
GUTSU GUTSU in Namba, Osaka, a place that
customers can use for a variety of purposes such as
information dissemination, exchange, and learning,
either between customers and the Bank or between
customers, with the goal of creating new value. The
name comes from the Japanese onomatopoeia for astew simmering in a pot, reflecting the concept of theplace as a melting pot where information and values
can melt and mix together, producing new values
and information. Namba as a city symbolizes urban
diversity, while the Group’s goal is to create heretofore
unseen values by bringing together people with diverse
perspectives. Since there is no single right answer
in solutions, our intention is to leverage such spaces
and create unique business models that can only becreated by our Group.

Achieved sustainable financeon the order of ¥100 billion in FY2022
In addition to promoting partnerships with diverse
people and organizations, the Group also focuseson promoting sustainable management. We issued
our Sustainability Declaration in May 2021, clearly
establishing that we will contribute to the developmentof sustainable local communities as we strive for ourown sustainable growth by solving regional issues
through our business activities, leveraging a wide rangeof partnerships in accordance with our management
pr incip le . W ith th i s i n m i n d , w e e s ta b l i shed our
Sustainability Committee and SX (Sustainability
Transformation) Strategy Office to strengthen oursustainability management. Furthermore, having
endorsed the TCFD recommendations, we havecommitted to the corresponding information disclosuresand set long-term sustainability goals to reduce CO 2
emissions by 60% by FY2030 compared to FY2013 andexecute sustainable finance in the amount of ¥1 trillion(cumulative) by FY2030. Incidentally, our initiatives insustainable finance have already achieved the ¥100
billion scale in FY2022.
In addition to these efforts, I aim to communicate ourideas on SDG and ESG topics to members of the local
community in an accessible manner. To this end, The
Senshu Ikeda Bank launched the Senshu Ikeda Bank
SDGs Forum in April 2022. As of June 2023, the forum
has been held four times, focusing on various SDGrelated themes each time and providing a forum to
discuss the revitalization of the Kansai region andsupport SDG initiatives by local companies. Activities
are expanding, with the content of our discussions
being featured on MBS radio’s “Nippon Ichi Akarui

Keizai Denpa Shimbun (The Brightest Economic RadioNews of Japan).” We hope that continuing to holdthis forum will lead to new partnerships and efforts toresolve social problems from an SDG perspective, as
well as the creation of new business opportunities.

Developing diverse human resources andcreating an organizational culture thatencourages growth andtaking on challenges
In order to establish thorough solutions, one must firstdevelop the human resources capable of overseeing
them. Human capital management has recently comeunder the spotlight. Based on our original concept of
the “balance sheet of potentials,” the Group intends
to develop as many diverse human resources as
possible as resources corresponding to net assets on
the lending side of the balance sheet. Our personnel
listen to customers’ issues, discuss the issues within theorganaization and produce solutions.
We believe that this is the core of realizing a thoroughsolutions business.
Accordingly, we have clarified the ideal image of thetype of personnel our human resource development
policy should be aiming to develop. Based on ourmanagement principle, we are taking various measures
to develop the personnel that will improve engagement
and support our Vision ‘25. This has enabled us toraise productivity, develop the personnel who canprovide high-value-added solutions, and develop asystem for providing solutions, even amidst a declining
headcount across the Group as a whole. Regarding
the aforementioned holders of the 1st-grade CSPFP
certification, the number is steadily increasing, and weare on pace to have more than 200 holders by FY2023.
With regard to our human resource development,in addition to enhancing our education and training
programs, it is also necessary to have mechanisms toturn on the “mental switch” of workers. I can say thisbased on my experience as a director responsible
for human resources. Raising employee motivation iseasier said than done. When I was a director in chargeof personnel affairs, I produced a booklet entitled“Episodes to Remember,” a compilation of real-life
experiences from The Senshu Ikeda Bank employees in
the course of their work. By reading the booklet, current
employees can learn about the successes and failuresof those who came before them. We distribute it to new
employees in the hopes that it will turn on their “mental
switches.”
I believe that only a human resource strategy basedon our management principle will enable us to develop
stalwart human resources who can call themselves
members of a financial group that will “endear
ourselves to the regional community.” The Senshu Ikeda
Bank was founded in 1951 in a community ravaged by
war under the conviction that the bank’s mission was
to support the rebuilding of the regional community
by directing the funds raised in the community back
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

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toward the community’s own needs for capital. Thishistory resides deep within the Group’s management
principle to this day. In the solutions that we are now
developing, it is important that we continue to hold true
to the ideas expressed in our management principle.
We must seek to benefit the regional community, andthis, in turn, will increase the Group’s profitability.
As part of the Group’s human resources strategy,
we hold “town hall meetings” (meetings to discusswith management). This initiative originated when
The Senshu Ikeda Bank showed weak performance,
lowering the motivation of employees. Following ahiatus during the COVID-19 pandemic, the program
was re-launched with the objective of improving staff
engagement through dialogue on an equal footing
between staff and management. The management
team divided into seven pairs consisting of one director
and one executive officer each and visited a total of
96 locations between October 2022 and April 2023
in an effort to absorb feedback from the frontlines. In
addition, we are now in the process of steadily creating
an organizational culture that encourages employees
to grow and challenge themselves by strengthening
internal communication through 1-on-1 meetingsand by launching group-wide efforts to reform theorganizational culture.

A New Business Model to transform us
into a financial institution that can
support the companies that will lead theeconomic growth of the next generation
Finally, in April 2023, Senshu Ikeda Holdings
established the Digital Bank Preparatory Office, which

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SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

considers the possibilities of establishing an exclusively
Internet-based digital bank. The idea originated froma gathering of regional banks from across Japan to
study the use of ICT (information and communication
technology). The concept was extended, resulting in theidea of a digital bank.
What I currently envision is a digital bank for corporateclients that can perform tasks that physical banks
cannot. Specifically, we hope to open a path to offerloans to small and medium-sized businesses andstartups, which have traditionally been difficult to screen
for financing. Our aim is to cooperate with partnercompanies that hold information on the customers tobuild a system that enables loan screening without
financial statements or other documents and to
make loan decisions based on the feasibility of thebusinesses. We expect to make a decision on whether
or not to open for business in the fall of 2023.
As we have previously communicated, the Group aims
to realize its growth strategy with a view to Vision ‘25
by both executing and reviewing the Fifth MediumTerm Business Plan. In this context, we will achievesustainable growth in corporate value through theestablishment and provision of thorough solutions. We
sincerely appreciate your continued support for theGroup.

Representative Director, President and CEOSENSHU IKEDA HOLDINGS,INC.

Messages From Outside Directors
Three outside directors offer their candid opinions on topics such as the ideal state of the Senshu Ikeda
Holdings Group, sustainability management, and the effectiveness of the Board of Directors based on theirrespective expertise. The Company takes each opinion seriously and will apply it in future management.

I believe that the development
and promotion of diverse humanresources, starting with promoting
the participation of women, is key
to the solutions.
Atsuko Ogasawara
Outside Director

The Board of Directors is carefully
discussing both the businessrisks and opportunities presented
by digital bank and DX.
Takao Koyama
Outside Director

Solutions and financing are in acomplementary relationship witheach other, making it important tocooperate and achieve synergies.
Minoru Furukawa
Outside Director(in Japanese kana order)

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

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Atsuko Ogasawara
Outside Director

Considering the ideal state of regional
financial institutions that can respond to achanging environment

In the midst of the rapidly changing environment
surrounding the financial industry as symbolizedby rising interest rates in the U.S., it is becoming
increasingly important for regional financial institutions
to respond flexibly to changing conditions. Consideringchanges in the business environment, Senshu Ikeda
Holdings revised its Fifth Medium-Term Business Plan
in FY2022. This commitment to steadily promote thegrowth strategy is commendable, and I have highexpectations of the Company’s approach of aiming forsustainable growth while pursuing management rooted
in the local community and advancing its solutions.
Following my long experience working as a newspaper
journalist, I came to the conclusion that in the future,
local newspapers will be more sustainable than national
newspapers. By hewing close to a regional community,a regional newspaper can capture a readership basewith a common interest. The same applies to financial
institutions. I believe that while megabanks focus
on international operations and digital services, theGroup’s regional focus and its meticulous and sincere
responses to local customers’ issues will ensuresustainable growth for the next era.

The importance of creating an environmentthat encourages the active participation of
women

From my point of view, one of the challenges facing theGroup is the steady development of human resources
who will carry the solutions on their shoulders as it
picks up momentum. Particularly from a diversity pointof view, I believe that the development and promotionof diverse human resources, starting with promoting
the participation of women, is key to the solutions.
In talking with female executives, I came away with theimpression that female branch managers are able toshow consideration for their subordinates in a detailed
way based on their own experiences of balancing workand childcare. This ensures that branches operate withconsideration for the work-life balance of both female
and male employees. We must continue to actively
assign women not only to branch manager positions,but also to other areas that have traditionally been
dominated by men, and continue to develop them as
executives.
At present, women make up 23.5% of managers in theGroup. We have set a goal of raising this percentage to
30% or more by March 31, 2027, but rather than simply

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SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

meeting numerical targets, I would like to see the entire
Group reinforce its efforts to create an environment inwhich women can actively participate in a variety ofoccupations.
In addition to human resources, another area I am
keeping a close eye on is sustainability management.
Having issued the Sustainability Declaration andestablished the SX Strategy Office, efforts are alreadyunderway within the Company. Following organizational
development, the next challenge is how to “visualize”
these efforts. I bel i eve that i n order t o pr om ot esustainability management, it is necessary to create
an environment that facilitates individual efforts bypresenting specific measures in an accessible way.

Executive training contributes to improving
the effectiveness of the Board of Directors

Since my appointment as an outside director in June
2020, I have felt that there have been substantial efforts
to improve the effectiveness of the Board of Directors.
Advance explanations of agenda items have improved
with each passing year, giving those from outside
the Company a deeper understanding of the agenda
items. The Board of Directors is evolving from a forum
focused on resolutions and reports to a place ofdeliberation where points of discussion are establishedon important proposals and time is set aside to debate
matters before decisions are made.
I also feel that it is effective for all board members,
not just outside directors, to engage in training that
leads to more sophisticated practical discussions. In
particular, unconscious bias training is essential forthe promotion of diversity, and continuing it will leadto new realizations and help people to recognize theimportance of diversity, producing the next step towardchanging the mindset of the entire organization.

SENSHU IKEDA HOLDINGS,INC.

Takao Koyama
Outside Director

Discussions to establish a digital bankunderway at the Board of Directors

The Senshu Ikeda Holdings Group has the advantage
of operating in one of the most favorable locations inJapan. We therefore see it as important for sustainablegrowth to focus on solutions related to depositedassets, including those belonging to wealthy customers
in the region.
To this end, it is essential to focus on developing
personnel in the solutions who can meet customers’
expectations. Although each indicator of businessperformance is currently on an upward trend, froma shareholder’s perspective, we must say that theresults are quite frankly insufficient. We need to further
promote the solutions throughout the Group.
Additionally, we are in the final stages of discussions
about whether to establish a digital bank to capture
new growth. If established, the business model would
generate revenue through a financial platform, making
it a promising initiative.
Because of my long experience in the information andtelecommunications field, I am able to offer opinionsfrom the perspective of an outside director on thefeasibility and costs involved in the developmentof systems that support the digital bank behind thescenes. The development of the core system isalmost complete, and it is now important to scrutinize
whether it will be viable as a business. This point will
be discussed by the Board of Directors, so I hope tosupervise it closely.

Recruitment and training as key to growth,
including the specialized personnel
responsible for DX

In terms of sustainability management, we are at astage where we are steadily advancing initiatives

while developing a system. However, as the Bank
streamlines its operations, it will not be easy to meetthe challenges of the SDGs with a limited workforce ofjust 1,800 employees in FY2025. Additional measuresneed to be taken through the further enhancement ofeducation and training programs.
The first step is to present a clear image of what it isthat the Group aims to be, and then to identify what
resources are lacking to achieve that goal. This should
naturally present an image of what types of personnel
are required. I consider this point to be almost
complete in the Fifth Medium-Term Business Plan.
Highly specialized personnel are essential, especiallyfor work related to digital transformation (DX), and
it is necessary to explore incentives other than theexisting compensation system in order to acquire thehuman resources required. The potential of DX lies inencouraging business innovations within the Group andto provide consulting services to customers throughthe accumulation of technology and expertise. Thishas the potential to greatly expand the field of service
transactions, and I would very much like to see theacquisition and training of human resources get off to agood start.
On the topic of human resources, it is praiseworthy thateach and every Group employee, starting with bankstaff at The Senshu Ikeda Bank, is proactively improving
his or her own potential by acquiring qualifications.
The Company is also promoting the acquisition of
official certifications and other qualifications, and I
am hopeful that this will have a positive impact on thethorough solutions in the future.

Significant improvements in the effectivenessof the Board of Directors within seven years

I have served in a supervisory capacity as an outside
director of the Company for about seven years andhave at times expressed harsh opinions regarding
the effectiveness of the Board of Directors. Board
members and executives have responded by taking
the opinions of outside directors seriously and haveworked to make necessary improvements. As a result,
we have been able to hold highly effective board
meetings—a significant change from when I first took
office. Proposals are no longer rubber-stamped in their
entirety, and it is not uncommon for proposals to betabled due to dissenting opinions that arise out of the
discussions. It has now become entirely normal foreach director to have his or her own opinion on mattersto be discussed. In this respect, I deem the meetings
to have become highly effective.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

10

Minoru Furukawa
Outside Director

Solutions and financing as mutuallycomplementary

As an outside director, I commend the expansion of thesolutions and the resulting upward trend in the bottom
line that have come amidst the steady progression of
the Fifth Medium-Term Business Plan. I had previously
recommended that the issue of unrealized losses
on foreign bonds arising from the market upheaval
following Donald Trump’s 2016 election (the socalled “Trump shock”) be thoroughly dealt with, andthis problem was resolved in FY2018 as part of the
Fourth Medium-Term Business Plan. In my opinion, thecompany should carefully manage risks as the solutions
expands so that it does not repeat this mistake in the
future.
I always tell President Ukawa that solutions andfinancing are mutually complementary, and it isimportant to work on them in tandem to achievesynergy. It is important not to consider a matter closed
once the loan has been executed, but for the loan
officer to continue regularly visiting the loan customer
to see if they have any problems or concerns, andseize the opportunity to find new solutions out of theseconversations. This applies to private customers aswell as corporate clients.
In order to achieve further prosperity going forward, it
is essential for the Group to be involved in the growthindustries of the coming era. On this point, The Senshu
Ikeda Bank has established a grant program to support
start-ups to innovate and contribute to the revitalizationof the local economy. The cumulative total to date is
500 companies. More focus should be brought on
promoting the growth of these companies. It is wholly
inadequate to simply hand out awards and dole out
grants of a few million yen and leave it at that. I would
like to see the establishment of a growth support fund,possibly on the scale of ¥50 billion or ¥100 billion, toaggressively invest in promising companies and help
them to grow their businesses.

Regular recruitment and development of thehuman resources required for sustainablegrowthWith regard to sustainability management, it isnecessary for the entire Group to expand its businessdomain and increase the number of profit-earning
opportunities. With approximately 90% of the Group’s
current revenue dependent on the banking business,further efforts are needed to branch out into otherbusinesses in order to be sustainable. In this sense, wemust accelerate our foray into offering solutions. As an

11

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

outside director, I will closely monitor the status of theinitiatives and offer recommendations, as necessary.
It has long been said that so-called “management
resources” consist of people, things, and money.
Human resources are at the core of management, andI believe that the most important thing for the continued
development of our solutions is the regular recruitment
and training of the people who will actually conduct
the work. Companies often cut labor costs whenbusiness performance declines, but doing so is notalways a good idea. Although it can help temporarily,systematically neglecting the recruitment of humanresources can have serious effects on the developmentof growth strategies over the medium- to long-term.
The important thing is to recruit personnel on a regularbasis, while at the same time making it more attractive
to work at the Group, creating an environment in which
employees want to remain and keep doing their best.
In addition, the future will require a major rethinking of
employment practices. Companies must go beyond
conventional thinking, for example by allowing highly
specialized personnel to work for multiple companies
simultaneously, depending on the situation.

Improving corporate governance according
to the situation

I feel that the Board of Directors has become
increasingly effective over the years, and outside
directors have been scrutinizing its effectiveness evermore critically. However, in light of the complianceviolations that have occurred within the Group, albeit
few in number, more needs to be done to improve thegovernance structure. Improvements can be made,according to specific situations. At the same time,
the Group must strive to improve openness of theorganization while ensuring thorough compliance.

SENSHU IKEDA HOLDINGS,INC.

Human Capital Management
Gender equality

Decent work andeconomic growth

Good healthand well-being

In order to maximize the value of our human resources and raise corporate value over the medium- to long-term,
we regard human resources as “capital” and consider “human capital management” as one of the top priorities
for management.

Policies on Human Resource Development and Improving the Internal
Environment
Human Resource Development Policy
The Company will promote human resource developmentin accordance with the Basic Policy on Human Resource
Development. The essentials of the Basic Policy are as
follows.
The purpose of human resource development
The purpose of human resource development is tocontinuously foster personnel who can positively
participate in the Group’s business, thereby contributing
to the long-term enhancement of corporate value
and the development of a sound corporate culture.
The ideal employee
Based on our management principle, we aim to develop
human resources who possess the following six attributes
at a high level.
Broad vision

Vigorous spiritof challenge

High sense of
discipline

Steadfast desire
to improveHigh level ofexpertiseRichsensitivity

The means of developing human resources
We use both OJT (on-the-job training) and Off-JT (grouptraining, support for self-development, etc.) in accordancewith their respective characteristics and objectives toeffectively develop personnel.
The formulation of human resource development plans
The manager in charge of human resources development
at each department or branch formulates a humanresources development plan for their respective
department or branch, and the general manager of the
Personnel Affairs Division, who is responsible for overall
human resources development, draws up a humanresources development plan for the Company based on
the plans of each department.
The Company believes that the diversity of humanresources is necessary to enhance corporate value overthe medium- to long-term and will promote diversity in its
core human resources.
The means of ensuring diversity among core personnel
To ensure diversity among core personnel, we will
systematically build a foundation for the appointment of adiverse core team, including women.

We will ensure diversity among core personnel by
formulating a medium- to long-term human resource
development plan, promoting the development andpromotion of candidates by having them acquire thenecessary skills and experience through systematic
personnel transfers and other measures, and promoting
the recruitment of mid-career hires to acquire personnel
with diverse skills and experience.

Policies on Improving the Internal Environment
In order for all employees to maximize their potential, we
will create a workplace and culture in which employees
can take pride in the Group’s business and feel both
fulfilled in their work and secure in taking on new
challenges.
Supporting employees who take on challenges
We will provide motivated employees with opportunities
for growth and a comfortable work environment in order tosupport those who continuously accept new challenges,
taking pride and finding meaning in their work.
To this end, we have established a trainee program andan open recruitment system that enables employees tochallenge themselves by choosing and taking on new
jobs.
Establishing diverse ways of working
To create an environment in which diverse personnel
can play an active role, we ensure work-life balanceby reducing restrictions on the time and place in which
they must work and support career continuity andadvancement in tandem with employees’ life events.
To this end, we are promoting remote work and flextime,and implementing initiatives to support the participation of
women.
Promoting the physical and mental health of employees
We believe that the mental and physical health of ouremployees is important for their future development andfor them to contribute to the community. We will therefore
take various measures to promote the mental and physicalhealth of each and every employee.
To this end, we are implementing initiatives to promotehealth, such as encouraging employees to take leave andoffering health guidance from our occupational healthstaff.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

12

KPIs in Human Capital Management
Category

Designated indicators(the Bank, non-consolidated)

FY2020results

FY2021
results

FY2022
result(Year achieved)
Target

70

104

150

(FY2025)
290

40

84

130

(FY2023)
200

–

–

67
(same size
financial
institution 68)

To be considered

Participation rate in the employees’
shareholders association(Financial Wellness)

98.0%

97.3%

97.2%

–

Percentage of women in managerial
positions(*1)

20.7%

21.6%

23.5%

(FY2026)
30%

67.0%

64.2%

64.5%

–

84.0%

85.0%

79.8%

–

59.4%

56.1%

55.9%

–

Percentage of male employees
taking parental leave

46.4%

44.9%

92.3%

(FY2026)
100%

Percentage of mid-career hires

13.8%

5.3%

13.8%

To be considered

Percentage of employees withdisabilities

2.39%

2.32%

2.36%

Legal mandate
2.3%

Percentage of employees taking paid
leave

42.8%

47.1%

52.9%

–

Monthly average overtime

12.9 hours

11.3 hours

12.1 hours–

Rate of taking stress checks

95.2%

96.9%

96.5%

–

–

35.3%

45.6%

–

16.1%

15.5%

14.9%

–

Human resource
No. of solutions personnel
development(development of specialized
1st-grade CSPFP certification holders
human resources)
Engagement
Engagement score

Diversity

Full-time
employees
Gender wage gap Non-full-time
employees(*2)
Total

HealthPercentage of those implementing
Specified Health Guidance
Smoking rate

*1 Managers are persons who assume responsibility for organizational management as the person in charge of a particular area of work.
Specifically, the term refers to those in the position of “deputy section chief” or “assistant to the section manager” or higher who havesubordinates.
*2 The average annual pay for non-full-time employees is calculated based on the standard number of working hours of full-time employees.

The Development of High Value-added Solutions Personnel
Even in the midst of a declining workforce, we will seek to improve productivity and develop a system
to offer solutions in conjunction with the development of personnel who can provide high value-added
solutions.

Banking personnel
Sales staff (branches + headquarters)

High value-added solution personnel*(Solutions personnel as a percentage of sales
personnel)

FY2020results

FY2021
results

FY2022
results

FY2023plan

FY2025
plan

2,272

2,245

2,158

2,000

1,800

820

821

798

770

720

70
(8%)

104
(13%)

150
(19%)

250
(32%)

290
(40%)

*Definition of high value-added solution personnel
Personnel who are highly skilled in their respective areas of expertise and able to complete solutions on their own
Personnel who can understand the diverse issues and needs of customers and provide advice to resolve them on theirown (the 1st-grade CSPFP level certified personnel)

13

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

SENSHU IKEDA HOLDINGS,INC.

Outline of

the Fifth Medium-Term Business Planfor Vision ‘25

Basic Policy

Customers:

Employees:

Regions:

Offer the most suitable solutions

Create a workplace where

Contribute to realize a sustainable

exactly from customers’ point of

employees can be active in diverse

development of the regional communities

view through the various issues

fields by meeting customers’ trust.

and reliable and fulfilling life of regionalcustomers through our business activities.

of customers.
Strategic Priorities

May 2022 Growth Strategy Update
Group strategy
From bank-centric to HD-centric
Retail and private banking
Expand new revenue base through asset solutions (conversion to stock business)

1

Establish andprovide thoroughsolutions

Corporate solutions
Enhance the provision of solutions tailored to each corporate stage throughGroup-wide integration
Enhance structured finance (LBO loans, etc.)
Connecting to customers
Strengthen local bases, enact the “aggressive branch strategy”(Improve presence in central Osaka and enhance solutions for wealthy
customers)
Regional co-creation
Support companies that take on the challenge of using the upcoming Expo as
growth opportunity
Reform of sales branches(Performance award system abolished, each sales location independently formulates its
business plans according to the characteristics of the local area)
Sales locations Customer-oriented policy: Quick and proactive
Headquarters Site-oriented policy: Support units for local sites

2

Thoroughcustomer-oriented
policy3

Establish a
structure for theFifth Medium-TermBusiness Plan

Structural review of branches with few personnel

4

Human resources
strategy

1-on-1 meetings, reforming the organizational culture
Formulating an action plan to encourage female participation

5

Capital anddividend policy

Early application of Basel III finalization
Ensuring shareholder returns of 30% or more

6

Sustainable
management

Developing a system to incorporate the SDGs/ESG into management and“transform the business model”
Establishing long-term sustainability goals

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

14

Our Policies on Cross-Shareholdings(1) Basic Policy on Cross-Shareholdings(2) Cross-shareholding policy for FY2023

Following the bank merger in 2010, we have reduced

We have been reducing our cross-shareholdings withour cross-shareholdings in order to reduce our

the goal of reducing the ratio of cross-shareholdings

shareholding risk.

(including deemed shareholdings) to less than

We will continue to reduce our cross-shareholdings

20% of consolidated net assets on a market value

going forward. The reduction of cross-shareholdings

basis by the end of FY2023 (when excluding thewill proceed based on a comprehensive review ofdeemed shareholding, the goal is less than 10% of

shareholding risk, capital efficiency, and other factors,

consolidated net assets). Although we sold 6 stocks

and on the assumption that we will have sufficientwith a market value of approximately ¥4.5 billion

dialogue with business partners.

during FY2022, the increase in the market value of

However, we may hold a limited number of shares if

stocks resulted in a consolidated net asset ratio of

deemed necessary to contribute to the medium- to

22.6% at the end of the fiscal year (9.7% on a costlong-term improvement of the corporate value of thebasis). In FY2023, we will continue our reduction

Group and portfolio companies, or for the creation andefforts to achieve the same goal.

revitalization of local communities.

The balance of cross-shareholdings (including deemed shareholdings) and the Company’s consolidated net asset ratio
288
stocksMarket value ofcross-shareholdings

The Company’s consolidated net asset ratio(Market value of cross-shareholdings / consolidated net assets of the Company)

Acquisition cost180
stocks(billions of yen)
100

80

45.0%
78.4 79.0

172
stocks

91.6
36.8%

(%)

161
stocks

44.9
36.9

40

148
stocks143
stocks

139
stocks

52.2
22.1%
30.4

42.0
18.1%
26.7

51.9

51.7
51.7
22.6%
20.6%
21.0%

26.1

25.6

22.1

20

0

15

40.0

69.2
27.8%

60

151
stocks50.0

The ratio ofconsolidated net assets
excluding deemedshareholdings 11.4%(March 2023 results)

30.0

20.0

10.0

2010
March

2017
March

2018
March

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

2019
March

2020
March

2021
March

2022
March

2023 (Year)
March

0.0

SENSHU IKEDA HOLDINGS,INC.

Measures to Achieve Capital Cost-conscious Management
Measures to Improve PBRThe PBR remains below 1, and the urgent issue is to increase corporate value.

=

PBR
0.29
(closing value on May 15)

Long-term
corporate value

ROE

×

4.00%
(FY2022)=

Financialresults

PER
7.69(closing value on May 15)

× Non-financial
results

Cost of shareholders’ equity is 6.52% (estimated based on CAPM)
In order to increase corporate value, we plan to take measures to achieve non-financial
results as well as financial results.
Initiatives to achieve

Consider progressive dividend increases and flexible treasury stock buybacks

financial results

Set capital adequacy level targets in anticipation of full application of Basel III
Cost control

Initiatives for non-financial

Refinement of human capital management (formulation of human capital management

results

goals and human resource portfolios)
Implementation of sustainable management (SDGs/ESGs)
Enhancement of and proactive engagement with risk management
Visualization of the relationship between non-financial activities and the process ofcorporate value creation

Diagram of value creation by financial and non-financial activities
We have mapped out how the financial and non-financial activities created in
the value creation process affect corporate value.
More specifically, the diagram illustrates how the balance sheet of potentials
propounded by the Group can be used to the benefit of customers in realizing
thorough solutions that will support the realization of their dreams, thereby
contributing to the long-term creation of corporate value.
The Group will flesh out its non-financial activities for growth while remaining
conscious of both profitability and the changes in the external environment.

For details, see pages 17.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

16

Diagram of Value Creation by Financial and Non-financial Activities
Intellectual capital

Ensuring soundness

Risk assets
Shareholders’ equity

Financial leveragecontrol

Set capital adequacy level targets

Manufactured capital

Natural capital
Shareholder
returns

Resiliencemanagement

Capital adequacy ratio
Financial results (ROE)

Human capital

Effective
use ofcapitalAsset
control

Improved profitability

RORA

Net income

RORA
improvement

Construction of a stable growth path for the future
through the realization of earnings accumulation that
can also contribute to an increase in capital adequacy

Expensecontrol

Risk assets

Review of business portfolio (overall optimization)

Themes of financial activity

Social and relational capital

Enhanced
profitability

Enhancement of stakeholder engagement

Long-term corporate value (PBR)

Increasing the SIHD Group’s...

Presence
UP

Promoting new innovations
Developing businesses that will carry
future growth by increasing opportunities
for collaboration within and outside theGroup
Growthinvestments

Growthinvestments

Taking a risk for sustainable growth by
expanding into the digital domain, thereby expanding thebusiness base and diversifying earnings

Promoting human resource strategies that create
value out of diversity

Human capital
investment

Balance sheet of potentials

Sustainable growth

Strategically promoting the visibility and collaboration of humanresources to encourage the blossoming of employee capabilities and maximize
human capital
The extent of penetration and use of talent management systems
KPI
The establishment of a portfolio of the human resources being aimed for

Alliances

Resources

Open collaboration/
open innovation
Industry, academia,
government, etc.

Diverse humanresources
High added value
Strategic Partners

Human

MarketInnovation
Wealthy elderly,
SMEs in diverse industries

Growth opportunities

Services, products

Employment support
Business succession, M&A
support, etc.
Senshu Ikeda Tokai Tokyo
Securities, Shizen Soken,
etc.

Enhancing human resources and strengthening engagement
Providing each employee with opportunities to acquire advanced financial
knowledge and diverse experiences to better inform the proposals they make tocustomers
KPI The number of high-value-added solution personnel (200 in FY2025)

Advantages
Prosperous
business areas

Fostering a creative, autonomous organizational culture
through Group unity
Establishing a healthy and open organizational culture throughout the entire
Group and evolving into a creative, autonomous Group capable of quickly
responding to changes in the business environment.
KPI Staff engagement survey

Human

Umekita Second Phase
Expo 2025 Osaka, Kansai,
Japan

Capital cost (r) Reduction of risk premium beta

Intellectual

Expanding into the digital domain

Human

The strengths of Senshu Ikeda Holdings

Expected growth rate (g)Potential
UP

Customersatisfaction

Non-financial results (PER)

EmpathyUP

Promoting local industry
Engaging others through various forms of collaboration tocontribute to regional economic development
Creating one’s own drivers of growthSocialThemes of non-financial activity

Financial capital

17

SocialManufactured

Increasing productivity through DX and expanding
branches and channels

Continuously expanding the customer
and sales base through thoroughHumansolutionsSocialFor the customer...
SocialRealize their
dreamsBe useful tothem

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

Intellectual

Identify
their needs/
issuesSustainability-oriented solution
development
Understanding various sustainability issues
in the region and connect them to business
opportunities through organized activities
KPI Amount of sustainable finance to be
executed(cumulative total up to 2030: ¥1 trillion)

Promoting the development of digitalsolutions
Accelerating the refinement of management andstreamlining of operations at local industries byproactively offering and implementing digitalsolutions
KPI Expansion of systems to promotecustomers’ DX

Continuously expanding the scale of the customer
base
Helping customers to grow through recruitment
supportKPI
Customer-related assets(¥7 trillion in 2030)

Creation of social valueDX
investment

Taking an omnichannel approach to improve convenience forcustomers and the Group’s ability to offer solutions, increasing sales capabilities
and productivity through digital technology
Strengthen solutions through the three-sales-divisions structure
KPI
Improve sales and operational productivity (30% improvement in FY2025)

NaturalPromoting efficiency in energy andresource use
Showing consideration for macro risks bydemonstrating a long-term commitment toclimate change
KPI Reduction of CO2 emissions(down 60% by 2030, achieve carbon
neutrality by 2050)

SENSHU IKEDA HOLDINGS,INC.

Establish and Provide Thorough Solutions
Senshu Ikeda Holdings Group has established five divisions to oversee the Group. We will strive to swiftly provide solutions by the Group,
demonstrate Group synergy, and respond quickly to changes in the environment, issues and needs. In May 2022, we decided to move
the KPI, which aimed for 10,000 cases of solution consulting by FY2025, two years ahead of schedule to achieve it by FY2023. Moreover,
we set a new KPI, customer-related assets, to protect, enhance and connect with individual customers’ financial assets, real estate andfamily. (customer-related assets = personal B/S)

Senshu Ikeda Holdings Group
Bank

The
Senshu Ikeda
Bank, Ltd.

Securities

RetailDivision

Senshu Ikeda
Tokai Tokyo
Securities
Co., Ltd.

Leasing

Senshu Ikeda
LeaseCo., Ltd.

Credit card

PrivateBanking
Division

Senshu Ikeda
credit cardcompanies

Loan
servicingSenshu Ikeda
ServicerCo., Ltd.

Corporate
Solutions
Division

Major roles

KPI Number of cases of solution consulting

Providesolutions,such as asset
formation,utilization,
management,
succession, toindividual
customers
Provide tailormade solutions,such as asset
management
andsuccession,
mainly to
wealthycustomers• For asset builders: Strengthenvery convenient face-to-face andnon-face-to-face channels• For the elderly: Support healthy
and fulfilling lives by creating a3,419 cases
safe and secure environment
3,240 cases• Integrated services of banking
and securities: Expand the range of
2,300 cases
products that can be handled, and build
a sales and consulting structure thatmeets a wide range of customer needs

Provide solutions

Divisions

CapitalCreditguarantee

Senshu Ikeda
GuaranteeCo., Ltd.

ATM
management
Station Network
KansaiCo., Ltd.

Nonfinancial
services

Shizen Soken
Co., Ltd.

KPI

CustomerContact
DivisionContact
customers
Improvefunctions andconvenience(Branches,channels,
digital)Developregional
Regional Co- communities
Revitalization and industries,
and generate
Division
innovation• The wealthy class: High valueadded, tailor-made solutions
Develop wealth management
solutions

FY20251,500 cases(+1,050 compared to FY2020)
1,448 cases
635 cases
450 cases

FY2020 FY2021 FY2022 FY2023

FY20255,300 cases(+3,400 compared to FY2020)
3,371 cases
3,319 cases
1,900 cases

FY2020 FY2021 FY2022 FY2023

Establish solutions

Senshu Ikeda
CapitalCo., Ltd.

FY2020 FY2021 FY2022 FY2023• Provide accompanying solutions
which address the issues andneeds at each life stage of acompany, based on businessfeasibility assessments• Strengthen M&A solutions(including hands-on solutions)• Strengthen human resource
solutions to meet the diverse
human resource needs ofcompanies

Provideaccompanying
solutions tocorporate
customers

5,200 cases(+2,900 compared to FY2020)

FY2025• Expand sales area efficiently• New channel with customers• Strengthen a sales ability by digital technology• Build a “Senshu Ikeda” brand• Generate innovation
Generate innovation and revitalize regions through unique startup support
programs• Industry/regional revitalization
Solve regional social issues through public-private partnerships
Leverage regional growth opportunities to support the growth of regional
companies

FY2021 results

FY2022 results

Number of cases of solution consulting 7,194 cases
Customer-related assets¥5.61 trillion

8,238 cases¥5.72 trillion

Targets

FY2025 12,000 cases (10,000 before revision)
FY2030 ¥7 trillion
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

18

Financial and Non-financial Highlights
Financial Highlights
Senshu Ikeda Holdings
Profit attributable to owners of the parent
Target level:(billions of yen)

11.4

12
10
12
12
8
10
10
68
8

5.1

46
6

5.1
5.1

Of which,the Bank of Japan
11.4
interest is
11.4special
Of which,
1.3
Of
thewhich,
Bank of JapantheBankinterestof Japan
specialisspecialinterest is
1.3
1.3

9.5
8.6
Of which,the Bank of Japan
9.5
9.5special interest is¥10 billion or more
Target level:
Target level:¥10 billion
billion oror more
¥10
more

8.6
Of which,
0.4
Of
thewhich,
Bank of Japan 8.6
theBankof Japan
specialinterestisspecialinterest is
0.4
0.4

24
4
02
2

2020
results2021
results2022
results

2023
plan

0

2020

2021
2022
2021
2022
results
results
resultsTarget level:
results

2023
2023
plan
plan

0
2020
results
The Senshu
Ikeda
Bank
results

16.7
Core
16 banking profit
16.7(billions of yen)
16.7
16
16
12

Targetormorelevel:
Target level:¥15 billion
billion¥15
11.8 or moreor more

11.3
9.2

12
12
8

¥15 billion

9.2
9.2

8
8
4
4
4
0
0
0

¥11 billion

10.1
10.1
10.1

(billions of yen)
12
12

6.4

8
8

5.2

4

5.2
5.2

8.2 or more
8.2
8.2

6.4
6.4

2020
results2021
results2022
results2023
plan

2025 (fiscal
plan year)

02020
results2021
results2022
results2023
plan

2025 (fiscal
plan year)

2020
2020
results
results

2021
2021
results
results

2022
2022
results
results

2023
2023
plan
plan

2025 (fiscal
2025
year)
plan (fiscal
plan year)

0
0

2020
2020
results
results

2021
2021
results
results

2022
2022
results
results

2023
2023
plan
plan

2025 (fiscal
2025
year)
plan (fiscal
plan year)

7.5

Core OHR

6.2
Credit cost

(%)
90
90

(billions of yen)
preventative
7.5
6.2
5
7.5
provision*1 of80¥11 billion
billion¥11
or more

4
4

90

81.5%
77%-level
79.0%
79.0%

70
70
70
0

2020
results2021
results

0
0

2020
2020
results
results

2021
2021
results
results

11,558

2.5
0
2.5
0
0

2022
results2023
plan

2025 (fiscal
plan year)

2022
2022
results
results

2023
2023
plan
plan

2025 (fiscal
2025
year)
plan (fiscal
plan year)

11,558SENSHU IKEDA HOLDINGS,INC.
ANNUAL REPORT 2023
12,00052.55

77%-level
77%-level

70.5%
70.5%
70.5%

Of which,

6.2 Of which,

79.0%
81.5%
81.5%

80
80

19

2025 (fiscal year)
2025 (fiscal year)

plan level:
Targetplan

Changesin core business profits or
Target12
morelevel:
Target level:

8

11.8
11.8

11.3
11.3

2025 (fiscal year)
plan

¥4.5
billionOf
which,
preventative
preventative
provision*1 of1provision*¥4.5 billion of¥4.5 0.2
billion

0.2
0.2

2.5
2.5
2.5

-2 provision* of ¥1.2 billion
2020
2021
2022 Of2023
2025 (fiscal
which, preventative
year)
results results results
plan
plan
which, preventativeof ¥1.2
billionprovision*
2 Ofprovision*--2of ¥1.2 billion
Of which, preventative2

2

2*1 Preventative 2020
provision is2021
made for2022
the risk of2023
future increasesin (fiscal
credit2025
costs due to results
theimpactresultsof the COVID-19
2020
2021
2022 pandemic
2023
2025
year)
results
plan
plan (fiscal
results
plan of the start
planofyear)*21 Preventativeresults
provision results
in anticipationof the impact* repayment
Preventative
provision
isfinancing
made forloans
the risk of future increases in creditofzero-zero*1 costs
Preventative
provisionfor the riskpandemicof future increases in credit
due to theimpactisofmade
the COVID-19
due to theimpactinofanticipation
the COVID-19
pandemic*2 costs
Preventative
provisionof theimpact of the start of2* repayment
Preventative
anticipationof the impact of the start ofof provision
zero-zeroinfinancing
loans
repayment of zero-zero financing loans

12
12

12

8
8

4

4
4

0

0
2020
2020
2021 2021
2022 2022
2023
0
2020
2021
2022
results results
results results
results resultsplan
results
results
results

Number of cases of solution
consulting
90902023 2025 (fiscal
2025 (fiscal
2023
2025
year)
plan plan year)
plan (fiscal
plan
plan year)

6.4
SENSHU
IKEDA HOLDINGS,INC.
6.4

6.4
5.2
5.2

4

4
4

0

0
2020
2020
2021 2021
2022 2022
2023
0
2020
2021
2022
results results
results results
results resultsplan
results
results
results

Customer-related assets (*)
7.5

90

80

8
8

5.2

Non-financial Highlights

81.5% 81.5%
81.5%
79.0% 79.0%
FY2025plan
79.0% 77%-level
77%-level
80
77%-level80

12,000 cases

7.5
7.5 6.2

5FY2030 plan55¥7 trillion
2.5
2.5

FY2022
70.5%
70.5%
70.5%
results

FY2021 results
0

0
2020

0

8,238 cases

2020
2021

2021
2022

2022
2023

results

results

results

0
2020
2021
2022
7,194 results
cases
results
results results
results resultsplan

2023 2025 (fiscal
2025 (fiscal
2023
2025
year)
plan plan year)
plan (fiscal
plan
plan year)

Amount of sustainable financeto be executed
6.2
6.2
Of
which,Of which,
Of which,
preventative
preventative
1
1
preventativeofprovision*ofprovision*
1
provision*¥4.5
billion of¥4.5 billion¥4.5 billion

2.5

Before revision
FY202570
70
10,000 cases
70

8.2
8.2

8.2
8

9.2
9.2

9.2
8

11.8

11.3

2.5

FY2022-FY2030
2.5 target
2.5¥1
trillion

0.2
0.2

0.2

0
0

FY2022
results

Of which,of ¥1.2 billionof ¥1.2preventative
billion--2-2 provision*
provision* of ¥1.2 billion
2 provision*
Ofpreventative
which, preventative
Of which,
2

2

2022
20232025 (fiscal
2025 (fiscal
2020 20202021 2021
2022
2023¥5.72 trillion
Results
as of
2020
2021
2022
2023
2025 (fiscal
2

FY2021 results
plan plan year)
plan year)
results results
results results
results results
plan
31, 2023
2023 2025 (fiscal
2025 (fiscal
results resultsMarch
results
plan
plan year)
1
1(fiscal
2023
2025
¥5.61
trillion* Preventative
provisionfor ofthefuturerisk ofincreases
future increases* Preventative
provision
is madeisformade
the¥99.7
risk
in creditin credit
plan plan year)
plan year)*1 costs
Preventative
provisionisofmadeforthebillion
riskpandemicof future increases in credit
plan
plan year)
due
to theimpactthe COVID-19
costs dueto theimpactofthe COVID-19
pandemic
due to theimpactinofanticipation
the COVID-19
pandemic*2 costs
Preventative
provisionof theimpactof the*2 Preventative
provisionin anticipationof the impactofthe startof start of*2 repayment
Preventative
infinancing
anticipationof the impact of the start ofof provision
zero-zero
repaymentof zero-zerofinancingloans loans
repayment of zero-zero financing loans(*) A newly established KPI to protect, enhance and connect with individual customers’ financial assets, real estate and family

CO2 emissions reduction targets(Tons) 11,558 11,558
11,55812,000 12,000
12,000

8,000
8,000

8,000

9,829 9,829
9,829

2
2
5,648 5,648 5,882 5,882 5,477 5,477 Scope Scope
5,882
5,648
5,477 5,353 Scope
5,353 2
5,353

4,000
4,000

4,000

1,729 1,729
1,729
0 201300reduction
60%60%
reduction60%
reduction
targettargettarget7,058 7,058 7,141 7,141 6,775 6,775
7,141
7,058
6,775 6,437 6,437
6,437

2013
2013
results results
results

1
Scope Scope
1

Scope 1
1,409 1,409 1,259 1,259 1,297 1,297 1,083 1,083
1,409
1,297
1,259
1,083
2019 2019 2020 2020 2021 2021 2022 2022
2019 results results
2020 results results
2021 results results
2022
results results
results
results
results
results

Percentage of women in managerial positions

30

20

10

0

2030 2030
2030
target target
targetCarbonCarbonCarbonneutralneutralneutral2050 (fiscal
2050 (fiscal
2050 (fiscal
year)
target target
year)
target year)

Percentage of male and female employees taking childcare leave(%)
40

4,623 4,623
4,623

(%)
Female Female
40
40

30
30

100

or
30%30%or more30%
or moremore

23.5% 23.5%
21.6% 21.6%
23.5%
20.7% 20.7%
21.6%
20.7%

75

100% 100%
100%
Female100% 100%
100% 100%100%
100%
96.6% 96.6%
Maleand female
Male andfemale96.6%
92.3% 92.3%
Maleandfemale75
92.3%
75 73.2% 73.2%
71.3% 71.3%
73.2%
71.3%

100
100

Male Male50
Male46.4%
50 46.4%

20
20

50

10
10

25

25
25

0

0 Results for ResultsResults
for for ResultsResults
for for Results for Plan for Plan for
0 the year endedforforfor the year ending
PlanendingfortheResults
yeartheended
theResults
yeartheended
theResults
year ended
the yearyear ended
year ended
the yearthe yearended
the yearthe year31,endingMarch
31,ended
2021
March
31,
202231, 2023
March
31,ended
2023
March
2027
March 31, 2021
March
31, 2022
March
March 31, 2027
March 31, 2021 March 31, 2022 March 31, 2023
March 31, 2027

0 for ResultsResults
for for ResultsResults
for for Results for Plan for Plan for
Results
0 endedforfor
for the year ending
PlanendingfortheResults
yeartheended
theResults
yeartheended
theResults
year ended
the yearthe yearyear ended
year ended
the yearthe yearended
the yearthe year31,endingMarch
31,ended
2021
March
31,
202231, 2023
March
31,ended
2023
March
2027
March 31, 2021
March
31, 2022
March
March 31, 2027
March 31, 2021 March 31, 2022 March 31, 2023
March 31, 2027

44.9% 44.9%
46.4%
44.9%

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

20

DX Initiatives of the Senshu Ikeda Holdings GroupThe Formulation of a DX Plan
In order to both leverage digital technology to provide solutions tailored to the customer’s needs and to further improve theproductivity of the Group, we formulated a DX plan (March 2023) and established the DX Strategy Office to function as adriving force (April 2023).

Plan to Establish a Digital Bank
We established the Digital Bank Preparatory Office tofurther accelerate considerations of establishing a digitalbank, a concept that has been discussed within theGroup, with the aim of creating and realizing new financial
services adapted to an increasingly digital society (April
2023).

Status of considerations related to the establishment of adigital bank
The establishment of a digital bank has been underconsideration for some time, and we have now
established a Digital Bank Preparatory Office withapproximately 10 staff
The digital bank under consideration would specialize
in corporate banking (small loans) rather than retailbanking

DX PlanOverall policy(1)

In order to realize Vision ‘25, fully leverage digital technology todeepen customer service and (2) improve the capabilities of our staff and the productivity of our organization(Using data to better understand our customers / Enhance the IT- and DX-related knowledge and skills of staff / Improve individual, team and organizational productivity)

Implementation strategy(1) Deepening customer service

Themes(2) Improving the productivity ofstaff and the organization

Sophistication of marketing sophistication

Improvement of sales capabilities

Targets

Transition from one-size-fits-all marketing
to one-to-one marketing

Increase sales productivity by 30%(by FY2025)

Increase business productivity by 30%(by FY2025)

Implementation
strategy

Digitizing customer needs from thecustomer’s perspective

Visualizing sales processes,
restructuring and standardizing
optimal processes

Visualizing business processes,
restructuring and standardizing
optimal processes

Promoting and managing sales
activities based on standardized
processes

Optimizing resource constraints
and allocation through activity
management

Enhancing non-face-to-face channels
Providing data-based solutions andimproving the customer experience
Roadmap
FY2023
Sophistication ofmarketing

FY2024After FY2025

Digitizing customer needs
Providing data-based solutions and improving UX
Enhancing non-face-to-face channels

Improving sales
capabilities

Visualizing processes

Restructuring and standardizing processes
Upgrading sales support systems
Reviewing methods of promotion and management

Improving the productivityof staff and the organization

Visualizing processes

Foundation: Human resourcesand organization[Organization] Establishment of a
dedicated organization

Technology

Restructuring and standardizing processes
Optimizing resource constraints and allocation[Human resources] Reskilling staff and improving their IT literacy. Development, continual hiring, andreinforcement of core DX personnel

Elimination of paper, automation, data utilization, RPA advancement, AI utilization, etc.

Development of data infrastructure

Future Policies
Decide whether to establish a digital bank during the first half of FY2023
Reskilling staff and improving their IT literacy. Development, continual hiring, and reinforcement of core DX personnel
Enhancing non-face-to-face channels
Visualizing sales and business processes

21

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

SENSHU IKEDA HOLDINGS,INC.

Response to Climate Change
The Senshu Ikeda Holdings Group announced theSustainability Declaration in May 2021 and set climate change
as one of the important management issues (materiality). In
November 2021, we endorsed the purpose of the TCFD (Task
Force on Climate-related Financial Disclosures), and we areaiming for the enhancement of the recommended information
disclosures.

Governance
As mentioned above, we set climate change as animportant management task. We are promoting concrete
initiatives under the supervision of the Board of Directors.
Senshu Ikeda Holdings discusses and reports onsustainability issues, including climate change at the
Sustainability Committee, chaired by the President andCEO. The committee consists of the President and CEO
of Senshu Ikeda Holdings, and directors in charge. We
hold committee meetings every quarter in principle. We
regularly report the content of discussions to the Boardof Directors, and we have a system in place to ensure
appropriate supervision.
In addition, we submit and report key initiatives forclimate change response to the Board of Directors after
discussions by the Management Committee.

Board of Directors
Supervision

ReportingManagement Committee

Resolution of important matters

Sustainability Committee

Deliberation of important matters
Meetings: Every quarter, in principle
Chairperson: President and CEO
Administrative office: SX Strategy Office

Matters reported in the Board of Directors (FY2022)• TCFD disclosures• Sustainable finance targets• CO2 emissions targets• Initiatives for regional decarbonization• Reports on other initiatives related to sustainability, including
climate change

Strategy
The impact of climate change is highly uncertain, andthe period to be analyzed should be long. In our climatechange analysis, we used two scenarios to understand therisks and opportunities that climate change poses to ourbusiness: one in which the average temperature rises by
1.5°C or less compared to before the Industrial Revolution

and one in which the average temperature rises by 4°C
compared to before the Industrial Revolution. Regarding
the timeline of evaluation, we analyzed the impact over the
short-term (less than 5 years), the medium-term (about 15
years), and the long-term (about 30 years).

Risks and Opportunities

Major risks and their impact on the Company
Risk

Transition risks

Physical risks

Opportunities

Time frame• Deterioration of the business environment of business partners due to a consumer-oriented
shift to low-carbon products and services, and damage to loans assets for these partners• Deterioration of the Company’s reputation due to insufficient climate change response

Short- tolong-term• Deterioration of the business environment of business partners due to policy changes andtightening of regulations, and damage to loans assets for these partners

Medium- tolong-term• Damage to real estate collateral due to disasters• Impact on business partners’ business and employment due to disasters and decline inproductivity• Impact of damage to the Company’s baseMedium- tolong-term• Increased demand among companies for capital spending in order to respond to a
low-carbon society• Increased business opportunities and demand for funds for product and service-related
businesses and renewable energy businesses that support decarbonization• Reduction of business costs due to reduction of energy consumption

Short- tolong-term

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

22

Carbon-related Assets
The percentage of carbon-related assets (*1) within the
Company’s loans and other assets based on the updated
2021 TCFD “Annex” is “24.3%” (*2).
*1 Before the TCFD revision, carbon-related assets were redefined as assets
tied to the “electric power” and “oil, gas and consumable fuel (including
oil retail and wholesale) sectors, as well as the “transportation,” “materials
and building products,” and “agriculture, food, and forest products”
sectors.
*2 The Senshu Ikeda Bank’s industry classifications have been fitted to the
GICS (Global Industry Classification Standard) recommended by the
TCFD recommendations, so there may be discrepancies.

Scenario Analysis• Transition risks• Based on analysis by various specialized institutions such
as TCFD and SASB (Sustainability Accounting Standards
Board), we investigated the magnitude of potential risk
by sector and investigated the sectors with the greatest
impact, taking into account the Company’s exposure. As
a result of this investigation, “electric power” and “oil, gas
and consumable fuel (including oil retail and wholesale)”were selected as priority sectors. The priority sectors may
be added to or changed based on future professional
analysis and market trends.
• For the two selected sectors, we identified the risks
and opportunities for businesses in these sectors andanalyzed the impact on future business, based on the
1.5°C and the 4°C scenarios.
• In analyzing transition risks, we made forecastsof changes in the financial situation and businessperformance of borrowers by 2050 and analyzed
changes in credit-related costs using forecast data andcarbon tax forecast data related to resource demandand composition by power source in power generation
found in the Net Zero Emissions by 2050 Scenario (NZE
scenario), etc. of the International Energy Agency (IEA)
World Energy Outlook report.
• The analysis results regarding transition risks are as
follows.
Scenario

The IEA’s NZE scenario, etc.

Analysis targets“Electric power” and “oil, gas and consumable
fuel (including oil retail and wholesale)”Analysis period

Until 2050

Amount of risk

Increase in credit-related costs: up to
approximately ¥3.5 billion• Physical risks
Regarding physical risks, we analyzed the impact of theamount of collateral value damage caused by damage
to real estate collateral of business loan partners and theimpact of deterioration in business performance due tobusiness stagnation, etc. on increases in credit-related
costs using a hazard map, while referring to the RCP8.5
scenario (4°C scenario), etc. of the Intergovernmental
Panel on Climate Change (IPCC).

23

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

The analysis results regarding physical risks are as follows.
Data and scenario Use a hazard map of the loanee’s head officelocation and collateral property location withreference to the 4°C scenario, etc.
Analysis content

Analysis of the impact of deterioration ofbusiness performance and damage tocollateral, etc. in the event of a large-scale
flood caused by climate change

Analysis period

Until 2050

Amount of risk

Increase in credit-related costs: up to
approximately ¥4.5 billion

From the above analysis, we have confirmed that the
impact of climate change risk on our strategy is limited, as
the increase in credit-related costs estimated by the above
analysis can be reduced through medium- and long-term
efforts. As this calculation is based on certain assumptions,
we will continue to work on improving and refining scenario
analyses.

Reflection in Strategy
The Senshu Ikeda Bank, a subsidiary, has establisheda “sustainable investment and loan policy.” The Bank
carefully considered whether or not to make investments
or loans that may have a negative impact on ESG(environment, society, governance), and strive to reduceand avoid this impact. In addition, the Bank established aninvestment and loan policy for specific sectors as follows.

Investment and Loan Policy for Specific
Sectors
Weapons
We will not invest in or lend to companies involvedin the development and manufacturing of inhumane
weapons such as cluster munitions.
Coal-fired Power Generation
As a general rule, we will not make investments orloans that use the construction of new coal-fired
power plants as funds. However, in the case of new
power plant construction that contributes to the next
generation and to higher efficiency, taking into accountinternational guidelines, etc., we will carefully consider
partaking by each individual project.
Deforestation
We will carefully consider whether or not to makeloans that use funds from development involving
deforestation based on impact on the environment andinvolvement in illegal logging or illegal labor.
Monitoring in FY2022 revealed no investments or loans
in violation of the above investment and loan policy forspecific sectors.

SENSHU IKEDA HOLDINGS,INC.

Risk Management
The Group is running its operation based on the risk capitalmanagement system that controls all risks within a certain
proportion of the capital base, under the integrated risk
management structure.
We recognize that the transition risks and physicalrisks of climate change may have a significant impact on
business operations, strategies and financial plans throughthe performance of our business partners. Based on the
results of scenario analysis, we respond to the impact on
the business operations of our business partners within
the framework of credit risk management and report on therisks related to climate change to the Risk Management
Committee.
The risks of climate change require consideration of thetimeline and its uncertainties, but regarding the risks to theGroup, which are driven by climate change, we will monitor
the situation and consider an appropriate response while
using the existing management framework.
As mentioned above, we have set a sustainable
investment and loan policy and an investment and loan
policy for specific sectors, and we carefully consider thenegative impact of climate change when deciding whether
or not to make a loan. Moreover, by exchanging opinionswith business partners based on understanding risks insignificant sectors using scenario analysis, we plan topromote support for climate change response, such assustainable finance and initiatives to reduce CO2. We
believe that such a response will lead to a reduction ofrisks for the Group.

Indicators and Targets
The Group has established the following medium- and long-term goals regarding climate change issues.

Cumulative amount of sustainable finance* to be executed
FY2022 to FY2030 target: ¥1 trillion March 31, 2023: ¥99.7 billion* Loans that use funds to solve problems in the environmental and social fields, and loans that support and promote initiatives towards SDGs

The balance of investments and loans that are part of the BOJ’s Funds-Supplying Operations to Support Financing
for Climate Change Responses is ¥21.3 billion (as of March 31, 2023).

CO2 emissions reduction (Compared to FY2013)
Medium-term target (FY2022 to FY2030): 60% reduction March 31,
2023: 44.3% reduction Long-term target (up to 2050):
achieve carbon neutrality
Changes in CO2 emissions (after adjustment)(t-CO2)

12,00011,558

11,884

10,923
10,111

10,0009,489-44.3%
8,425
7,058

8,000
6,000

9,829

10,185

9,238

8,389

7,858

6,877

0

1,729

2013

1,699

2014

1,685

2015

1,721

2016

1,631

2017

1,547

2018

6,775

6,437

Scope 2

5,648

5,882

5,477

5,353

1,409

1,259

1,297

1,083

4,000
2,000

7,141

2019

2020

2021

-60%
(Compared to FY2013)

4,623

Scope 1
2022

2030 (fiscal year)

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

24

• Regarding CO2 emissions
The Group calculates greenhouse gas emissions as follows, based on the TCFD recommendations, etc. We have started
some Scope 3 calculations since FY2021. Going forward, we endeavor to expand and refine the scope of Scope 3
emissions to be monitored.
(Unit: t-CO2)
What is measured
Scope 1
Scope 2The Group

The Senshu Ikeda
Bank alone

FY2022

Direct energy consumption

Gasoline, natural gas, etc.

1,297

1,083

Indirect energy consumption

Electricity

5,477

5,353

6,775

6,437

1. Purchased products and services

Copier paper, etc.

3,062

1,589

2. Capital goods

Tangible fixed assets

9,718

9,742

3. Fuel- and energy-related activities
not included in Scope 1 or 2

Emissions from upstream
processes of fuel, electricity, etc.

1,697

1,514

4. Upstream transport and delivery

Postal expenses, etc.

323

370

5. Waste generated in operations

General waste material

137

123

6. Energy consumption associatedwith employee travel

Business travel

443

431

7. Employee commuting

Commuting to work

826

789

15. Investments (*)

Loans to domestic businesscorporations-

166,537

Scope 1 and 2 combined

Scope 3

FY2021* Category 15 (GHG emissions of investees) was calculated with respect to loans to corporations within Japan. Information was gathered from the data
disclosed by clients and bottom-up analysis was conducted, resulting in a coverage ratio of 11.2% with respect to the balance of loans outstanding of thesubject clients.

• A roadmap for net-zero CO2 emissions
The Group has drafted a roadmap to achieve net-zero CO2 emissions by 2050.
Achieve 60% reduction
compared to FY2013
2025
Scope 1
Gas andgasoline

Achieve carbon
neutrality

2030

2050

No. of sales representatives and sales
vehicles cut in half

Rationalization of sales activities
Replacing all vehicles
with EVs

Switch to eco-cars

Rationalization of store operations and energy conservation
Verification of storestransitioned to ZEB
Scope 2
Electricity

PPA introduction and expansion

Switch to LEDs and energy-saving air conditioning
Offsets

25

Transition to ZEB stores

Introduction of renewable energy sources
Verification of PPA
implementation

Verification and trial use of the
J-Credit Scheme

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

The state of the Group in 2050

Switch to further
energy-saving
equipment

Utilization of J-Credit Scheme

Sales vehicle fleet 100% EVs
No. of sales offices cut by about 30%
Data centers transferred to the cloud
Conversion to ZEB withrelocation and renewal ofsales offices
Expansion of power
procurement fromrenewable energy plans
Introduction and expansionof power procurement
under PPAElectricity
at all sites
to berenewable

Improved energy-saving technologies
for lighting, air conditioning, etc.
Annual real emissions offset by J-Credits

SENSHU IKEDA HOLDINGS,INC.

Corporate Governance

The Company is a holding company with subsidiaries suchas the Senshu Ikeda Bank, which upholds the Management
Principle of striving to become a financial group that“endear ourselves to the regional community” by providing
services tailored to customers’ needs, while valuing “broad
networks of relationships” and “an enterprising spirit.” Inorder to ensure sustainable growth and the medium- tolong-term enhancement of corporate value, the Company isengaged in initiatives to develop its corporate governancein line with the following basic principles.
(1) We respect the rights of our shareholders and strive
to ensure their equality.
(2) We consider the interests of stakeholders and strive toensure appropriate cooperation.
(3) We disclose corporate information in an appropriatemanner and strive to ensure the transparency of suchinformation.
(4) The Board of Directors and the Audit & Supervisory
Board strive to enhance the effectiveness of theirsupervision and audits of the execution of duties inline with their fiduciary responsibilities for ourshareholders.
(5) We strive to engage in constructive dialogue with ourshareholders in order to contribute to sustainablegrowth and the medium- to long-term enhancement ofcorporate value.

Outline of Corporate Governance Structure andReasons for Adopting the Structure
The Company has adopted a corporate governancestructure for sustainable enhancement of its corporate
value through reinforcing supervision of management byelecting the outside directors and cooperating with the
Audit & Supervisory Board.
Specifically, directors who are familiar with banking
business – involving complex and sophisticatedmanagement decisions – supervise business execution ofrepresentative directors, while audit & supervisory board
members audit business execution of directors throughattendance to important meetings and inspection of critical
documents. The Company reinforces its corporate
governance structure through outside directors and outside
audit & supervisory board members (hereinafter “outside
officers”) who possess well-seasoned characters andinsights presenting meetings including the Board of
Directors and expressing their opinions actively.
The Company has concluded a liability limitationagreement with outside officers to the effect that their
liability for damages set forth in Article 423, Paragraph 1, of
the Companies Act shall be the amount prescribed by
Article 425, Paragraph 1 of said Act, in accordance with therelevant provisions of the Articles of Incorporation of theCompany, as long as they perform their duties in good faithand without gross negligence.

l Personnel Committee
The Personnel Committee is comprised of 5 directors
including 1 internal director and 4 outside directors. As avoluntary advisory body to the Board of Directors, theCommittee accepts the involvement and advice ofindependent outside directors on important mattersrelated to the personnel affairs of officers, including theselection of candidates for directors.
l Remuneration Committee
The Remuneration Committee is comprised of 6
directors including 2 internal directors and 4 outside
directors. The Remuneration Committee, as avoluntary advisory body to the Board of Directors,
accepts the involvement and advice of independent
outside directors on important matters related to the
remuneration of directors, etc.
l Audit & Supervisory Board
The Audit & Supervisory Board is comprised of 4 audit &supervisory board members including 2 internal audit &supervisory board members and 2 outside audit &supervisory board members. Each audit & supervisoryboard member audits the business execution of directors
through attendance at important meetings including theBoard of Directors and the Management Committee,
inspection of critical documents and other means,according to the auditing guidelines and audit plan
decided by the Audit & Supervisory Board. Outside audit& supervisory board members are qualified with a highdegree of integrity along with superior insight andcapability, as well as expertise and hands-on experiencein their respective areas of specialty, getting involved
from diverse points of view.
l Management Committee
The Management Committee is comprised of internal
directors and executive officers with titles, as well as
officers commissioned with responsibilities (excluding
persons concurrently serving as president of a Group
company). The Committee is held once a week inprinciple, attended also by internal audit & supervisoryboard members, to make decisions on critical mattersconcerning the business execution as well as to discuss
agenda items for the Board of Directors based on theauthorities delegated by the Board of Directors. The
Management Committee accepts appropriate
involvement of and advice from outside officers who
attend the Committee as needed and express theiropinions.

Corporate governance functions within the Companyl Board of Directors
The Board of Directors is comprised of 9 directors
including 5 internal directors and 4 outside directors. The
Board of Directors is held once a month in principle,
attended also by audit & supervisory board members, tomake decisions on critical business execution including
basic management policies and management plans, andto supervise the business execution of directors andexecutive officers under the rules of the Board of
Directors.
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

26

(List of members, etc. of each body)
Name

Position

Representative
Directorand Chairman
Representative
Director,
AtsushiPresident and
Ukawa
CEO
Director &SeniorToshiyuki
Managing
Wada
Executive
Officer
Director &HirohitoManaging
Sakaguchi
Executive
Officer
Director &OsamuManaging
Tsukagoshi Executive
Officer
MinoruDirector
Furukawa(Outside)
Director
Takao Koyama(Outside)
Tomokazu
Director
Yamazawa(Outside)
AtsukoDirector
Ogasawara(Outside)
Audit &
SatoshiSupervisory
Kitagawa
Board
MemberAudit &
Supervisory
Hiroo Maeno
Board
MemberAudit &
Supervisory
Seiji
Board
Morinobu
Member(Outside)
Audit &
Supervisory
Kohei
Board
Nakanishi
Member(Outside)Managing
Hiromasa
Executive
Hirai
OfficerManaging
Takayoshi
Executive
Fujiwara
Officer
Takayuki Ota

Board ofDirectors

Audit &
Management
Personnel Remuneration
Supervisory
Committee
Committee Committee
Board

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◎

◎

〇

〇

〇

◎

〇

〇

〇

〇

〇

〇

〇

〇

◎

●

〇

〇

〇

●

〇

〇

〇

●

〇

〇

〇

●

〇

◎

●

〇

〇

●

〇

〇

●

〇

〇

●

〇
〇

* ◎: Chairman 〇: Member ●: Observer

Status of Auditsl Audits by audit & supervisory board members
Organization and Personnel of Audits by Audit &Supervisory Board Members
The Audit & Supervisory Board is comprised of 4 audit &supervisory board members including 2 internal and 2
outside members. The Company has allocated several
staff members who support the duties of audit &supervisory board members.
The status of each audit & supervisory board member
and their attendance at Audit & Supervisory Board
meetings for the fiscal year under review is as follows:

Attendance at
the Audit &Supervisory
Position
Name
Experience, etc.
Board
Meetings in
the fiscal year
under review
Audit &
Satoshi Mr. Satoshi Kitagawa assumed the100%
Supervisory Kitagawa position of Executive Officer of The(20/20)
Board
Senshu Ikeda Bank, Ltd., a Group
Membercompany, after having served as(Full-time)
General Manager of the Loan
Division. He assumed the positionof Audit & Supervisory Board
Member of the bank in June 2013
and subsequently held the positionof Audit & Supervisory Board
Member at Group companies. He
has a track record of serving as
Audit & Supervisory Board Member
for many years.
Audit &Hiroo
Mr. Hiroo Maeno has long100%
Supervisory Maeno experience in the Corporate(20/20)Board
Planning Headquarters of The
MemberSenshu Ikeda Bank, Ltd., a Group(Full-time)company. After having served in the
Loan Division, the Risk
Management, and several other
Headquarters, he assumed theposition of Director of the Company.
He successively held the positionsof Director in charge of the Risk
Management Headquarters, General
Manager of the Personnel Division,and Director in charge of Corporate
Planning and General Affairs
Division after his appointment as
Director. He has been involved in
the management area for many
years and has a wide range ofknowledge and experience, as wellas considerable expertise in financeand accounting gained throughengaging in finance and accounting
operations.
Audit &Seiji
Mr. Seiji Morinobu has a wide range 100%
Supervisory Morinobu of experience and insights as both
(20/20)Board
an attorney and an outside director
Memberat other companies.
(Outside)
Audit &Kohei
Mr. Kohei Nakanishi has a wide
95%
Supervisory Nakanishi range of knowledge and expertise(19/20)Board
regarding international finance as
Memberwell as experience on corporate(Outside)management and insight into
corporate governance though his
experience as a director at banks
and an outside director at othercompanies.
Each audit & supervisory board member audits thebusiness execution of directors through attendance atimportant meetings such as the Board of Directors andthe Management Committee, as well as inspection ofcritical documents, according to guidelines such as the27

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

SENSHU IKEDA HOLDINGS,INC.

“Guidelines for Audits by Audit & Supervisory Board
Members” and the “Guidelines for Implementing Audits
of Internal Control System,” generally subject to theauditing guidelines and audit plan decided by the Audit& Supervisory Board, as an independent body mandatedby shareholders.
Status of Main Activities of the Audit & Supervisory Board
Audit & Supervisory Board meetings are held once amonth, in principle, and in the fiscal year under review
they were held a total of 20 times. In accordance with theauditing guidelines, audit plan, audit methodologies,
responsibilities for audit tasks and other items resolved
upon at the Audit & Supervisory Board at the beginningof the fiscal year, full-time audit & supervisory board
members report on their activities, and opinions areexchanged with directors of the Company and from eachGroup company. In addition, the Audit & Supervisory
Board also gives consent to the election and dismissal of
accounting auditors, amounts of remuneration and othermatters.
The following became focal points of discussion at
Audit & Supervisory Board meetings held during the
fiscal year under review.
i. Estimating the reserve for possible loan losses
ii. Recoverability of deferred tax assets
Status of Main Activities of Audit & Supervisory
Board Members
In accordance with the auditing duties decided upon at
the Audit & Supervisory Board, full-time audit &supervisory board members execute audits objectively
and rationally through their attendance at important
meetings, inspection of critical documents, auditing
visits, and reports from each division of the headquarters.
In addition, auditing effectiveness is enhanced throughthe exchange of opinions with the internal audit divisionand each Group company, as well as with accounting
auditors. Part-time outside audit & supervisory board
members enhance the effectiveness of audits by their
participation in Board of Directors’ meetings, as well as
by exchanging opinions with directors and accounting
auditors at Audit & Supervisory Board meetings, andreceiving audit activity reports from full-time audit &supervisory board members.
Audit & supervisory board members and accounting
auditors perform their audit duties efficiently andeffectively by establishing close mutual cooperation
through exchanging opinions about various auditing
issues at regular meetings to exchange information. In
addition, efficient and effective audit duties are also
performed by working together with the audit &supervisory board members of subsidiaries, as well as
through close mutual cooperation between audit &supervisory board members and the internal audit
division such as audit & supervisory board members’
attendance at internal audits and the exchange of
opinions.
l Internal Audits
The Company has established the Internal Audit Division,
which conducts internal audits based on the basic rulesof intra-group audits, set out to provide objectives andguidelines of internal audits. The Company’s Internal
Audit Division comprises 15 members of whom 14 serve
concurrently in the Internal Audit Division of the banking

subsidiary (as of March 31, 2023). The Internal Audit
Division conducts internal audits on each division of theCompany based on the internal audit plan approved by
the Board of Directors each year. The Internal Audit
Division also conducts internal audits on each Group
company, as necessary, on its own or by cooperating
and coordinating with internal audit divisions of thesubsidiaries, etc. and provides specific instructions andadvice on the improvement of operations, in addition to
managing and overseeing internal audit operations of theentire Group. Furthermore, the officer in charge ofinternal audits regularly reports the results of the audits to
the Board of Directors and the Audit & Supervisory
Board.
The Company develops an effective internal audit
structure that has independence and expertise in orderto ensure the soundness and adequacy of operation. The
Company also inspects and evaluates the adequacy andeffectiveness of the risk management and internal control
practices, and makes recommendations as appropriate
to the senior management of the Company on ways toimprove and rectify questionable areas. Thus theCompany’s internal audit guidelines facilitate effective
achievement of management objectives including theimprovement of the Group’s internal management
structure and the enhancement of its enterprise value.
l Accounting Audits
Name of the auditing firm
Ernst & Young ShinNihon LLC
Successive period of audit services provided
Thirteen years and 6 months (audit contract dating from
October 2009 at the time of the Company’s founding)
The Bank of Ikeda (currently The Senshu Ikeda Bank)
concluded an audit contract with Ernst & Young
ShinNihon LLC (then Showa Audit Corporation) in 1976.
The Senshu Ikeda Bank, established through a merger
between the Bank of Ikeda (currently The Senshu Ikeda
Bank) and the Senshu Bank, subsequently continued theaudit contract with Ernst & Young ShinNihon LLC.
Certified public accountants who conducted the latest
accounting audit
Mr. Hideya Nanba and Mr. Tetsuro Tone
Starting with appointments and replacements for the
fiscal years commenced since April 1, 2016, the lead
audit engagement partner is not permitted to re-engage
in audits after engagement of five consecutive fiscal
years, and other audit engagement partners are notpermitted to re-engage in audits for five consecutive
fiscal years after engagement of seven consecutive fiscal
years, which is a rotation rule more stringent than as
regulated in laws and regulations.
Composition of assistants for the accounting audit
Assistants for the accounting audit of the Company are
5 certified public accountants and 8 others.
Policy and reasons for selecting the auditing firm
In accordance with the Practical Guidelines for
Cooperation with Accounting Auditors, released by theJapan Audit & Supervisory Board Members Association,
the Audit & Supervisory Board of the Company regularly
checks if the accounting auditors conform to auditing
standards, quality control standards, the practicalguidelines for auditing, and internal regulations of theauditing firm, to which they should conform as
professional specialists, and keeps itself updated on
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

28

accounting standards, through inquiries and dialogues.
The Company has selected the aforementioned certified
public accountants and others as a team responsible forthe accounting audit, after comprehensively examining
their track record of auditing and execution of duties forthe previous fiscal year, which led the Company todetermine that the appropriateness and reliability ofaccounting audits can be ensured.
The Audit & Supervisory Board shall dismiss anaccounting auditor, subject to unanimous consent of theaudit & supervisory board members, if it determines thatthe accounting auditor satisfies one or more of theconditions described in the provisions of Article 340,
Paragraph 1 of the Companies Act.
If the Audit & Supervisory Board comprehensively
examines the status of the execution of duties by theaccounting auditors and determines that theappropriateness and reliability of accounting audits
cannot be ensured, the Audit & Supervisory Board shalldetermine the contents of a proposal for a general
meeting of shareholders on dismissal or nonreappointment of the accounting auditors.
Content of the Audit & Supervisory Board’s evaluation of
the auditing firm
In accordance with the Practical Guidelines for Audit &Supervisory Board Members, etc. in developing theStandards for Evaluating and Selecting Accounting
Auditors, released by the Japan Audit & Supervisory
Board Members Association, the Audit & Supervisory
Board has established the Standards for Evaluating and
Selecting Accounting Auditors, based on which the Audit& Supervisory Board conducts evaluation.
As a result of the evaluation, it was found that theaccounting auditors satisfy none of the conditions
described in the provisions of Article 340, Paragraph 1 of
the Companies Act. The Company, therefore,
reappointed the accounting auditors, taking into accountthe results of the evaluation on the accounting auditors
by the Audit & Supervisory Board.

Status of Outside Officers

The Company has 4 outside directors (After approval of the
proposal at the annual shareholders’ meeting).
Outside Director Minoru Furukawa holds 30,600 shares ofcommon stock of the Company and has ordinary banking
transactions with The Senshu Ikeda Bank. He also
concurrently serves as an officer at Hitachi Zosen
Corporation, Unitika Corporation, and Osaka International
Convention Center Corp. The Senshu Ikeda Bank hasordinary banking transactions with Hitachi Zosen
Corporation and Unitika Corporation.
As an outside director of the Company, he performs his
duties of supervising the business execution based on his
extensive experience and superior insight into corporate
management as a representative director of a listedcompany. He also concurrently serves as a non-executive
director (non-full-time) at The Senshu Ikeda Bank.
Outside Director Takao Koyama holds 30,600 shares ofcommon stock of the Company and has ordinary banking
transactions with The Senshu Ikeda Bank. He previously
served as an officer at Hitachi, Ltd. and Hitachi Solutions,Ltd. The Senshu Ikeda Bank has ordinary banking
transactions and commissions of system development andoperation with Hitachi, Ltd. and Hitachi Solutions, Ltd.; andthe Company has a capital relationship with Hitachi, Ltd.

29

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

As an outside director of the Company, he performs his
duties of supervising the business execution based on his
extensive experience and superior insight into corporate
management as a representative director. He also
concurrently serves as a non-executive director (non-fulltime) at The Senshu Ikeda Bank.
Outside Director Atsuko Ogasawara holds 7,000 sharesof common stock of the Company and has ordinarybanking transactions with The Senshu Ikeda Bank.
As an outside director of the Company, she performs her
duties of supervising the business execution based on her
wide range of experience and achievements in thebusiness world, including serving in key positions at apress firm. She concurrently serves as a non-executive
director (non-full-time) at The Senshu Ikeda Bank.
Outside Director Yoshihiro Nakagawa has ordinarybanking transactions with The Senshu Ikeda Bank. He also
concurrently serves as a representative director andchairman of Hankyu Hanshin Hotels Co., Ltd. which has
regular banking transactions with The Senshu Ikeda Bankand other Group companies.
Based on his extensive experience and track record as amanager of a listed company, Outside Director Yoshihiro
Nakagawa is expected to supervise business execution
and fulfill his role as an outside director of the Company. He
also concurrently serves as a non-executive director (nonfull-time) at The Senshu Ikeda Bank.
The Company has 2 outside audit & supervisory board
members
Outside Audit & Supervisory Board Member Seiji
Morinobu has ordinary banking transactions with The
Senshu Ikeda Bank. He also concurrently serves as an
officer at KITAKEI CO., LTD. The Senshu Ikeda Bank hasordinary banking transactions with KITAKEI CO., LTD.
He performs his duties as an outside audit & supervisoryboard member in auditing the legality of the management
execution from an objective and neutral position, based on
his experience as an outside director, wide range ofexperience and superior insight as an attorney, andsufficiently high social credibility.
Outside Audit & Supervisory Board Member Kohei
Nakanishi holds 12,200 shares of common stock of theCompany and has ordinary banking transactions with The
Senshu Ikeda Bank. He previously served as an officer at
Japan Bank for International Cooperation (“JBIC”).
Although The Senshu Ikeda Bank has concluded amemorandum of understanding with JBIC for supporting
Japanese firms with expanding overseas, no considerationarises from transactions under the memorandum.
He performs his duties as an outside audit & supervisoryboard member independently from an objective and neutral
position, based on his wide range of experience andknowledge regarding international finance as well as
experience in corporate management and insight into
corporate governance through serving as director of a bankand outside director of corporations, and sufficiently highsocial credibility.
The Company has set forth the following standards forthe independence of outside directors and outside audit &supervisory board members (hereinafter “outside officers”)
in order to objectively determine their independence andelects outside officers on the basis of these standards. All 6
outside officers, namely outside directors Minoru Furukawa,Takao Koyama, Atsuko Ogasawara, and Yoshihiro Nagasawa
and outside audit & supervisory board members Seiji

SENSHU IKEDA HOLDINGS,INC.

Morinobu and Kohei Nakanishi, satisfy the standards for the
independence. They have been designated as independent
officers and registered with the Tokyo Stock Exchange as
such, as they satisfy the requirements of independence
stipulated by the relevant stock exchange and pose nopotential conflict of interests with general shareholders.
<Standard for judging the independence>
At the Senshu Ikeda Group, as a general rule, Outside
Directors/Audit & Supervisory Board Members shall bethose who do not fall under any of the following
requirements, at present or recently.1
1. A person who deems the Group to be a major2 business
partner, or in the case of a company, an executing
person thereof.
2. A person who the Group deems to be a major business
partner, or in the case of a company, an executing
person thereof.
3. A business consultant, an accounting specialist or alegal specialist who has received a large sum3 of moneyand other properties other than Officers’ remunerationfrom the Group (or a quasi-executing person who has
belonged to the payee’s group).
4. A person who the Company deems to be a major
shareholder4 of the Company, or in the case of acompany, an executing person thereof.
5. A payee of a large sum of donation from the Group, or aquasi-executing person of the payee’s group, in the casewhere the receiver of the monies, etc., is an entity.
6. A former executing person of any of the Group
companies in the past.5
7. A relative6 of a person (excluding those who are notsignificant) mentioned below:
A. A person who is mentioned in the aforesaid items 1
through 6.
B. Directors, Audit & Supervisory Board Members,
Executive Officers and important employees of any of
the Group companies.
Notes:
1. Definition of “recently”: Refers to cases that might beregarded as almost “at present,” for example, including
the case where said person fell under any infringement
requirement item since the content of a proposal for theselection as Outside Director or Outside Audit &Supervisory Board Member was determined.
2. Definition of “major”: Refers to 2% or more of theconsolidated net sales per annum (Consolidated
ordinary income in case of the Company) for the nearest
fiscal year, as a benchmark for judgment.
3. Definition of “a large sum”: Refers to a three-year
average amount of ¥10 million or more per annum for the
past three years.
4. Definition of “major shareholder”: Refers to a shareholder
who held 10% or more of the total voting rights at the endof the nearest fiscal year.
5. Definition of “past”: Refers to “within 10 years up to thepresent.”
6. Definition of “relative”: Refers to “within the second
degree of kinship of a person.”Supervision or Audit by Outside Directors or Outside
Audit & Supervisory Board Members, Interconnection
with Internal Auditing, Audits by Audit & Supervisory
Board Members, and Accounting Auditing, andRelationship with the Internal Control Division

Outside directors receive reports about the status of audits
by audit & supervisory board members, internal audits andaccounting audits, as well as the status of internal control
from the internal control division through Board of Directors.
On the other hand, outside audit & supervisory board
members receive reports from full-time audit & supervisoryboard members about the status of audits by audit &supervisory board members, internal audits andaccounting audits, as well as the status of internal control
from the internal control division. Both outside directors andoutside audit & supervisory board members give
recommendations and advice in return for these reports.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

30

Corporate governance structure of the Group[Senshu Ikeda Holdings](As of the end of June, 2023)

General Meeting of
Shareholders
Appointment/Removal

Accounting Auditors
Accounting audit

Sustainability Committee
Risk Management Committee
Compliance Committee
Anti-Money Laundering andCombating the Financing ofTerrorism Committee
ALM Committee
Efficiency Improvement
Committee

Appointment/Removal
Joint coordination
Reporton Audit

Report on Audit
AdviceBoard of Directors

Bringing important
issues to meetings/
Reporting on business Appointment/
execution
SupervisionCorporate Planning andGeneral Affairs Division

Management Committee[The Senshu Ikeda Bank]

Reporton AuditInternal Audit Division

Directors/Executive Officers
Internal audit

Personnel Affairs Division

General Risk
Management Division[Senshu Ikeda Tokai Tokyo Securities]

General Meeting of
Shareholders

General Meeting of
Shareholders
Audit & Supervisory Board

Audit & Supervisory Board

Board of Directors

Personnel Committee
Remuneration Committee

Board of Directors

Management Committee

Risk Management Committee

Management Committee

Compliance Committee

Compliance Committee

Anti-Money Laundering andCombating the Financing ofTerrorism Committee
ALM Committee

Branches

31

Audit

Joint coordination

Supervision

Instruction/
Direction

Group Strategy Division

Audit & Supervisory Board

Personnel Committee
Remuneration Committee

Representative Directors
Bringing discussed
issues to meetings/
ReportingAppointment/Removal

Head Office

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

Branches

Head OfficeSENSHU IKEDA HOLDINGS,INC.

Basic approach to the internal control system and its
status of development

The Company and the Group companies are developinga structure necessary to ensure the adequacy ofoperation based on the following concepts; create a“most trusted by customers” financial group which
respects personal relationships and promotes honest
and approachable banking.
(1) Structure to ensure that directors and employees of theCompany and the Group companies execute businessin compliance with laws and regulations as well as with
the Articles of Incorporation
The Company and the Group companies focus on compliance with laws and regulations (hereinafter “compliance”) as one of the most critical management tasks. The
Company and the Group also set out the code of ethics
along with the code of conduct to ensure that directors
and employees behave in compliance with laws andregulations as well as social norms. The Company and
the Group companies also put in place a system topromote compliance by appointing directors who areresponsible for compliance, and discuss overall compliance policies and specific measures at the Compliance
Committee. In addition, the General Risk Management
Division coordinates compliance arrangement across theCompany and the Group companies, while conducting
education and training for directors and employees bydeveloping a compliance program and compliancemanual, and arranging compliance seminars.
<The Group Compliance Hotline>
The Group Compliance Hotline, a whistleblowing system,has been set up and managed to allow directors andemployees of the Company and the Group companies todirectly provide information about questionable conduct
in light of laws and regulations. The hotline system isstructured to guarantee that the informants who provide
such compliance-related information are protected frombeing treated in a disadvantageous manner.
<Preventing money laundering and the funding of terrorism>
The Company and the Group companies appoint a
director responsible for the prevention of money laundering and the funding of terrorism. The Anti-Money Laundering and Combating the Financing of Terrorism
Committee discusses overall policies and specific measures. The General Risk Management Division coordinates
measures across the Company and the Group companies,
while conducting education and training for directors andemployees by developing programs and manuals addressing the prevention of money laundering and the funding ofterrorism, as well as arranging seminars for the preventionof money laundering and the funding of terrorism.
<Excluding anti-social forces>
The Company and the Group companies have taken an
uncompromising stance against anti-social forces andorganizations that threaten the order and safety of the community. We resolutely and unyieldingly exclude such forces.
<Preventing insider trading>
Basic rules that directors and employees must abide by
are set out for the prevention of insider trading.
<Customer protection and other customer management>
Moreover, the Company and the Group companies provide effective customer management including customer
protection, with the purpose to reassure our customers of
their security and to promote their convenience in aneffort to implement a thorough ‘customer first policy.’(2) Structure for the preservation and management of
information concerning the directors’ businessexecution
The Company and the Group companies have preparedand kept documents such as minutes of important
meetings including the Board of Directors and theManagement Committee, as records of directors’
execution of duties.
The Company and the Group companies have also
prepared and kept documents and attachment
sanctioned by directors as appropriate.
(3) Arrangements including rules to manage the risk ofpotential losses of the Company and the Group
companies
With the purpose of ensuring the soundness ofmanagement and stable corporate earnings, theCompany and the Group companies have set out basic
rules of risk management. The Company and the Group
companies have classified risks into credit risk, market
risk, funding liquidity risk and operational risk, anddefined the department responsible for the managementof each category of risk, while establishing the Risk
Management Committee to monitor the status ofmanagement of each such category.
Meanwhile, the Company and the Group have set out
rules of risk management, with the purpose to minimize
the financial loss along with loss of confidence resulting
from the crisis event, and to ensure business continuity
through prompt restoration of normal operational
functions.
(4) Structure to ensure efficient business execution bydirectors of the Company and the Group companies
The Board of Directors sets out the management
objectives of the Company and the Group companies
with the purpose of enabling the directors andemployees of the Company and the Group companies toefficiently execute their business. The Board of Directors
also formulates the Group Management Plan and sets
forth operational plans on an annual basis to bring saidPlan into shape.
In addition, the Board of Directors establishes theManagement Committee with the purpose of enabling
directors to efficiently execute their business. The
Management Committee discusses beforehand theagenda of the Board of Directors to facilitate thedecision-making process at those meetings, while
discussing the critical issues for resolution in
implementing the basic management policies that havebeen resolved by the Board of Directors on the basis ofsuch policies.
The Management Committee also defines theheadquarters under the command of each director, alongwith the authority and responsibility involved, whiledeveloping and maintaining a structure for efficientbusiness execution by utilizing IT.
(5) Structure to ensure the adequacy of business operation
at the Group, which comprises the Company and theGroup companies
The Company regards the respective Group companies
as one group under the flag of Senshu Ikeda Holdings.
Thus each member company of the Group runs its
operation through developing an adequate internalmanagement structure according to its scale and natureof operation under the adequate guidance of, and incoordination with the Company.
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32

The Company, as a responsible entity for theadministrative management of the entire Group, hasestablished administrative management rules targetingits subsidiaries. The Company has developed a structurein which it receives necessary reports concerning thebusiness execution of directors and employees and otherrelevant matters from and consults on those issues withthe respective Group companies.
(6) Matters concerning employees who assist audit &supervisory board members in the performance of theirduties, the independence of those employees fromdirectors, and structure to ensure the effectiveness of
the instructions to such employees
In order to support audit & supervisory board members’
business execution, the Company and the Group employ
audit & supervisory board members’ staffs as secretariat
for the Audit & Supervisory Board. Such audit &supervisory board members’ staff shall receive
instructions from the audit & supervisory board members
for their business execution, while their personnel
changes and evaluations shall require an accord of therelevant audit & supervisory board members to ensure
the staff’s independence from directors. Thus theCompany and the Group companies ensure their
independence from directors.
(7) Structure to facilitate reporting from directors andemployees to audit & supervisory board members andother arrangements to ensure that audit & supervisoryboard members are adequately informed, as well as the
structure to ensure that no disadvantageous treatment isconducted because of having reported to audit &supervisory board members
Directors and employees of the Company and the Group
companies shall immediately report to audit &supervisory board members on matters that could havesignificant impact on the Company and the Group
companies, or any other matters as necessary, in
addition to matters legally required to be reported.
In addition, the hotline system is structured toguarantee that the informants who provide the Group
Compliance Hotline with compliance-related information
are protected from being treated in a disadvantageousmanner. Moreover, to complement this arrangement, theCompany and the Group companies have established astructure whereby audit & supervisory board members
are permitted to attend important meetings such as thoseof the Board of Directors, the Management Committee,
the Compliance Committee, the Anti-Money Launderingand Combating the Financing of Terrorism Committee,
the Risk Management Committee, the ALM Committee,
the Sustainability Committee, and the Efficiency
Improvement Committee.
(8) Other structure to ensure that audit & supervisory board
members conduct effective audits
Audit & supervisory board members hold meetings to
exchange opinions with representative directors, outside
directors, internal audit division and accounting auditors.
Audit & supervisory board members attend important
meetings such as the Board of Directors, the Management Committee, the Compliance Committee, the AntiMoney Laundering and Combating the Financing ofTerrorism Committee, the Risk Management Committee,
the ALM Committee, the Sustainability Committee, andthe Efficiency Improvement Committee in an effort to find33

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

out various problems they need to address in the execution of their duties.
Furthermore, audit & supervisory board members shallbe permitted to request posteriori for redemption of theexpenses that they deem necessary in executing theirduties if such expenses were previously budgeted bythem and have been disbursed for an emergency or
temporarily.

SENSHU IKEDA HOLDINGS,INC.

Compliance Structure
The Company and the Group set “compliance” as one of
the most important management priorities. We are copingwith it in order to fulfill our social responsibility and publicduties, and to earn the trust of our customers and regional communities.
The Company has set up a “Compliance Committee”
to deliberate important matters regarding groupcompliance. We have also formed the General Risk
Management Division under the “Chief Compliance
Officer” to manage matters regarding compliance
unitarily.

The General Risk Management Division ensurescompliance by creating, reviewing, and following up the“Compliance Program,” which is a practical plan forreinforcement of compliance, by creating, updating, anddistributing the “Compliance Manual,” which stipulates
basics regarding compliance, and by conducting compliance education activities through various training programs such as those aimed at preventing harassment,
corruption, and misconduct.
We assign “Compliance Officers” and “ComplianceManagers” to each division and branch in order to

Senshu Ikeda Holdings

Board of Directors and Management Committee
Bringing issues to meetings/Reporting

Instruction

Compliance Committee(Administrative Office: General Risk Management Division)

Chief Compliance Officer(Director in charge of General Risk Management Division)
General Risk Management Division
Consultation /Reporting

Instruction

Compliance Officers in each Division (General Managers)
Compliance Managers (Deputy General Managers)

Consultation /Reporting

Instruction

The Senshu Ikeda Bank, Senshu Ikeda Tokai Tokyo Securities, Senshu Ikeda Servicer, Shizen Soken
Subsidiaries and affiliates

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

34

implement and penetrate compliance. In addition, we
check the operations from a compliance point of viewand facilitate the conduct of training programs to ensurecompliance.
In order to detect compliance problems at early stages and take corrective actions, we have set up and operate a hotline including external contact points to be usedby employees of the Company or Group companies toreport directly on violations of laws and regulations (e.g.,violations of internal regulations, harassment, corruption,bribery) by the Company and Group companies.

Compliance has become an increasingly important
issue for financial institutions. The Company and theGroup are committed to strict observance of the Banking
Act, Financial Instruments and Exchange Act, and related
laws and regulations. We also strive to strengthen an
appropriate protection system for our customers.
We intend to enrich and enhance our compliancestructure through improving various regulations andgiving training to our employees continuously so that customers can deal with us “reliably.”

Code of Ethics
The Group sets up Code of Ethics as follows that our directors and employees mustabide by. The directors and employees will regard the observance of the Code of
Ethics as a fundamental part of routine operations and will conduct fair and honest
corporate activities, while complying with laws and rules strictly to implement theGroup’s management philosophy and policies.
1. Winning the trust from our customers
Taking its social responsibility and public duties into consideration, we will intend
to become the most reliable financial group for the customers through conducting
sound and appropriate operations, including information management and proper
disclosure.
2. Implementing “customer first policy”
We will always consider any matters on customer first basis and will contribute to
the development of the regional economy and community through providing
high-quality financial services that are both original and innovative.
3. Strict compliance
We will strictly comply with all laws and rules, and will conduct fair and honest
corporate activities that are consistent with social code.
4. Respecting human rights and the environment
We will respect personal relationship, characters and personalities of the others,
and conduct environment-friendly corporate activities.
5. Eliminating anti-social forces
We will take an uncompromising stance against anti-social forces and organizations, and resolutely eliminate all undue intervention by such forces andorganizations which threaten the order and safety of the community.

35

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

SENSHU IKEDA HOLDINGS,INC.

Structure for preventing Money laundering and the financing of terrorism
The Company and the Group companies recognize that itis their social responsibility to prevent money launderingand the financing of terrorism by complying with the Act
on Prevention of Transfer of Criminal Proceeds, theGuidelines for Anti-Money Laundering and Combating
the Financing of Terrorism, the Foreign Exchange andForeign Trade Act, and other related laws and regulations(hereinafter “Criminal Proceeds Act and related laws andregulations”). The Company and the Group companies
regard the enactment of countermeasures against money
laundering and the financing of terrorism as one of the
crucial tasks related to their management strategy andwill proactively work on such measures with the proactive
and active involvement of management personnel.
l Organizational structure
The Company and the Group companies will appoint
the Company’s director in charge of preventing money
laundering and the financing of terrorism as theGroup’s Chief Money Laundering and Financing ofTerrorism Prevention Officer. Acting as the supervisory
body, the General Risk Management Division will workin cooperation with the relevant departments andGroup companies to prevent money laundering andthe financing of terrorism.
In addition, the Company and the Group companies have established the Anti-Money Laundering andCombating the Financing of Terrorism Committee todeliberate on important matters related to the prevention of money laundering and the financing of terrorism.
l Compliance with laws and regulations
The Company and the Group companies will comply
with the Criminal Proceeds Act and related laws andregulations and appropriately implement the necessary
measures such as real-time transaction confirmations,
reporting suspicious transactions, and confirming measures related to the freezing of assets.
l Risk-based approach
The Company and the Group companies will identify
and assess their own risks related to money launderingand the financing of terrorism. In order to effectively
reduce the risks, the Company and the Group companies will take a risk-based approach to implement
appropriate measures, such as ensuring that measurestaken are proportionate to the risks.

l Customer due diligence and the preservation of records
The Company and the Group companies will periodically survey and analyze customer information andtransaction details, and implement necessary customer due diligence measures in accordance with theattributes of each customer. In addition, in accordancewith applicable laws and regulations, the Company
and Group companies will prepare and preserve
records of transactions and the real-time transaction
confirmations.
l Reporting suspicious transactions
The Company and the Group companies will establish
a system to appropriately handle suspicious customers
and transactions, etc. as detected by reports fromsales branches, etc. or by the system’s monitoring andfiltering functions, and promptly report suspicioustransactions, having appropriately examined andjudged the situation.
l Management of correspondent banks
The Company and the Group companies will conductperiodic reviews of correspondent banks to verify andmonitor their systems for the prevention of money
laundering and the financing of terrorism. If the correspondent bank is a fictitious bank (so-called “shellbank”) or if it allows transactions with such fictitious
banks, then the Company and the Group companies
will not enter into or maintain a correspondent agreement with the correspondent bank in question.
l Training for directors and employees
The Company and the Group companies will provide
appropriate and continuous training programs for
directors and employees to deepen their understanding of money laundering and the financing of terrorism,
as well as maintain and improve legality and expertise.
l Verifying effectiveness
The Company and the Group companies will verify theeffectiveness of their measures to prevent money
laundering and the financing of terrorism and strive toenhance and upgrade the management systemthrough periodic monitoring conducted by both thedirector in charge of preventing money laundering andthe financing of terrorism and the supervising department as well as periodical audits conducted by anindependent internal audit department.

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

36

Senshu Ikeda Holdings

Board of Directors and Management Committee
Bringing issues to meetings/Reporting

Instruction

Anti-Money Laundering and Combating the Financing of Terrorism Committee(Administrative Office: General Risk Management Division)

Chief Money Laundering and Financing of Terrorism Prevention Officer(Director in charge of preventing money laundering and the financing of terrorism)
General Risk Management Division

Consultation/Reporting

Instruction

Money Laundering and Financing of Terrorism Prevention Officers (General Managers)
Money Laundering and Financing of Terrorism Prevention Managers (Deputy General Managers)

Consultation/Reporting

Instruction

The Senshu Ikeda Bank, Senshu Ikeda Tokai Tokyo Securities, Senshu Ikeda Servicer, Shizen Soken
Subsidiaries and affiliates

37

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

SENSHU IKEDA HOLDINGS,INC.

Risk Management Structuren Basic Approach to Risk Management
While business opportunities for financial institutions
multiply as a result of deregulation, sophistication andglobalization of financial operations, and the significant
development in ICT, the risks that financial institutions
face are becoming more complicated and diverse qualitatively.
Moreover, it has been more important for financial
institutions to monitor, assess and manage risks properly,
and to respond to the changes quickly in the environment in order to earn the stable and continuous profits,
while serving various needs of customers. Under suchcircumstances, the Group regards enhancing andstrengthening risk-management structure as a highpriority management task in order to maintain andenhance the soundness of its business execution.
Specifically, the Group determines the structure andvarious rules regarding risk management and the departments in charge of each risk category at the Board of
Directors. The group has also set up the risk management division to oversee the departments regarding risk
management. Furthermore, the Risk Management Committee and the ALM Committee, consisting principally of
management personnel have been established, with the
purpose of identifying the risk situation within the Group,and to discuss the relevant agenda and countermeasures which shall subsequently be reported and further
discussed at the Board of Directors. Thus the Group
ensures effective risk management structure at management level.
Meanwhile, as action plans for risk management
based on the Group strategies, basic risk management
principles are set out annually and reviewed continuallyin order to deal with the risks newly emerging as a resultof changes in environment for timely and adequate way.
With the purpose to objectively examine the adequacy and effectiveness of the risk management structure,
the internal audit division which independents from theaudited departments conducts an audit. Thus the Group
ensures appropriate administrative processing andsound business operations through finding out andimproving the matters on risk management.

categories of credit risk, credit concentration risk
outside the calculation of capital ratio, interest rate risk
in banking accounts, market risk and operational risk,
and compares them with its management strength(capital ratio).
The Group regards development and reinforcement of risk management structure as its crucial
management task. Furthermore, the Group has developed an integrated risk management structure that therisk management division manages all risks in order tocomprehensively identify and appreciate various risks
associated with the Company’s operations by asuniform as possible measurement, and to earn thestable revenue, realize appropriate capital composition and allot management resources properly.
l Risk capital management system
The Group is running its operation based on the risk
capital management system that controls all risks
within certain proportion of capital base, under the
integrated risk management structure.
Specifically, the Company allocates risk capitalsourced from core capital base to credit risk, market
risk and operational risk, based on the calculated risk
amount in each category. The Company has also
monitored risk amount continuously to ensure that it is
kept within the tolerable limit from management pointof view. Thus the Company ensures smooth operations
and management soundness across the Group.
l Calculation method for capital ratio regulation
In respect to risk and asset calculation for the purposeof the capital ratio regulation, the Group applies theFoundation Internal Ratings-Based Approach for credit

Risk buffer: Provisions against unpredictablerisks and risks associated withaffiliated companies

Risk buffer
Credit Risk
Core
capital basen Integrated Risk Managementl Integrated risk management
Integrated risk management refers to the process toadequately manage the risks that financial institutions
face. The Company evaluates the risks divided intoRisk
capitalto beallotted

Credit Risk
Market Risk
Market Risk
Operational
Risk

Financialresource forallocation

Allocatablerisk capital

Risk capital
to beallocated

Operational
Risk
Risk amount

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

38

risks and assets and standard measurement methods
to calculate the operational risk equivalents.

n Credit Risk Management
Credit risk, as identified by the Group, is the risk of
suffering losses as a result of a decline or loss of thevalue of assets due to reasons such as the deteriorating
financial conditions of or default by the obligor.
The Group has set up “Credit Policy” in the banking
subsidiary that clarifies its policy for extending credit,
based on its management policy in order to maintain andenhance the soundness of its business execution.
Under this policy, the responsible division for the
management of credit risk, the Risk Management Division at banking subsidiary, in accordance with the
management methods stipulated in the Credit Management Regulations, administers finely-tuned responses torisks for the purpose of building up an optimum portfolio.
Specifically, the division analyzes and manages thecredit portfolio from various aspects including credit
concentration risk, type of business, borrower classification and credit ratings.
As for the credit analysis and management of eachloan at the banking subsidiary, the Group makes efforts
to ensure the independence of the investigation divisionfrom the business promotion division. The Board of
Directors and other appropriate body review each loan
for large obligor as well as the credit policy. Thus theGroup has focused on the development and improvement of its credit analysis system. Meanwhile, Loan
Division is managing housing loans receivable.
The banking subsidiary has also established theInternal Audit Division, to manage auditing of the selfassessment of assets, in order to maintain and enhance
the soundness of its asset base.

n Market Risk Management
Market risk, as identified by the Group, points to “marketrisk” and “market liquidity risk.” Market risk is the risk of
suffering losses through changes in the prices of assets
and liabilities held by the Group due to the fluctuations ofmarket risk factors, such as interest rates, prices of
securities, foreign exchange rates and so on. Market
liquidity risk is the risk of suffering losses arising from theinability to execute sufficient transactions under appropriate conditions, due to market confusion or an
insufficient trading base. The Group has established the39

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

Risk Management Committee and the ALM Committee,
consisting principally of management personnel, anddiscussed appropriate and timely measures to address
the risks in order to earn the stable and continuous profit
through managing its assets and liabilities in a comprehensive way.

n Funding Liquidity Risk Management
Funding liquidity risk, as identified by the Group, is therisk of suffering funding difficulties from being unable toraise necessary funds due to market conditions or deterioration in the Group’s financial condition, as well as therisk of suffering losses from being forced to raise funds
at higher interest rates than usual.
The Group takes control of its funding situation
through careful monitoring of the fund management andfundraising. The Group also ensures liquidation of its
assets and diversifies the sources of fundraising. Thus
the Group has taken every possible measure to manage
funding liquidity risk.

n Operational Risk Management
Operational risk, as identified by the Group, is the risk of
suffering losses from the inappropriate business activityof the Group - including its employees-, systems, orexternal premises.
The Group has set a rule for operational risk management and classified the risks into the six categories asfollows; (1) administrative risk, (2) information asset(system) risk, (3) tangible fixed asset risk, (4) personnel
risk, (5) legal risk, and (6) reputation risk.
Furthermore, the Group identifies and evaluates all
risks associated with new products and services before
they are actually developed and provided, for the purpose of adequate risk management. Besides, the Groupmanages customer information sufficiently and ensuresmanagement soundness when outsources certain business operation.
l Administrative risk management
Administrative risk, as identified by the Group, is therisk of suffering losses from administration, fraud,
accidents and other risks that the Group’s operations
will not be carried out as intended.
The Group prescribes detailed rules on
administrative procedures and strives to prevent
accidents through doing the administration promptly

SENSHU IKEDA HOLDINGS,INC.

and accurately, so that the customer can enter intotransactions with the Group without any concern.
Meanwhile, the Group makes every effort to eliminate
administrative risk by measures such as review of theadministrative procedure from identification of potential
risks through the analysis of administrative processes.
l Information asset (system) risk management
Information asset (system) risk, as identified by theGroup, is the risk of suffering losses due to loss, alteration, unauthorized use, leakage of information, as wellas to system defects caused by natural disasters or
breakdowns.
In consideration of the fact that its business operations are supported by various computer systems, theGroup ensures the reliability and security of systems
and has established back-up systems and structuresin case of emergency.
The Group is also working to establish appropriate
operation and management systems to prevent theleakage of information and unauthorized access to its
systems through encoding of data and strengtheningof access authority management.
l Risk management related to cyberattacks, etc.
Risk related to cyberattacks, etc., as identified by theGroup, is the risk of suffering losses due to cyberattacks, etc., such as targeted email attacks and website
defacement.
To prepare for risks such as computer viruses, whichhave been rapidly increasing recently, and increasingly
sophisticated cyberattacks, the Group is implementing
various measures such as establishing a system toappropriately manage risks related to cyber security,
improving security measures according to the degreeof risk impact, and formulating contingency plans.
Furthermore, the Group has established a specialized team for computer security (CSIRT) and is working
to strengthen its structure by enhancing various security
measures and conducting cyberattack exercises.
l Tangible fixed asset risk
Tangible fixed asset risk, as identified by the Group, isthe risk of suffering losses associated with damage ofbuilding and equipment or deterioration of working
environment as a result of disasters or poor asset management.
The Group is preparing for disaster through conducting quake resistance tests and implementing

countermeasures against power failures in order toensure business continuity in the event of emergencies.
l Personnel risk
Personnel risk, as identified by the Group, is the risk of
suffering losses associated with the delay of failing insuccession of expertise within the Group, as a result ofdrain or loss of key staff, or degradation of morale.
The Group is striving to develop working environment to enable each employee to fully exert ability,
while helping him or her to improve their skills.
l Legal risk management
Legal risk, as identified by the Group, is the risk of
suffering losses from violations of laws and regulations,as well as inappropriate responses to changes invarious systems.
The Group strives to prevent the occurrence oflegal risk and to reduce the risk itself. To this end, theGroup has established the General Risk Management
Division to collect information concerning legal matters, and to manage legal risk identified from suchinformation, as well as appropriately responds to thelegal risk.
l Reputation risk management
Reputation risk, as identified by the Group, is the riskof suffering losses arising from deterioration of theGroup’s reputation due to circulation of unfounded
rumors or due to inadequate responses of the Group
concerning the facts.
The Group works to avoid reputation risk by disclosing information proactively thorough increases thetransparency of its management, taking into consideration the crucial influence on the management of theGroup.

n Crisis Management
The Group has established the “Crisis Management
Rules,” which set out the basic policies in responding toemergencies including large-scale disasters and system
failures. In the event of large-scale crisis, the Group sets
up a “Crisis Management Headquarters” take charge ofcompany-wide response. Specific action programs are
set out in a “Contingency Plan,” with the purpose toensure safety of customers and employees, as well as
set up business continuity structure of the financial
system.
SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

40

The risk management structure of the Group(As of the end of June, 2022)

Senshu Ikeda Holdings
Board of Directors

Audit & Supervisory Board
Crisis Management Headquarters

Management Committee

Supervising
division

Type of risks

Responsible
divisions

ALM Committee

Risk Management Committee

General Risk Management Division

Credit Risk Market Risk

Funding
Liquidity
Risk

Operational Risk
Administrative
Risk

Information
Asset(system) Risk

General Risk Management Division

Divisions in chargeof operating
and managing

Tangible Fixed
Asset Risk

Personnel
Risk

Legal Risk

Corporate Planning andGeneral Affairs Division

Personnel Division

General Risk
Corporate Planning andManagement Division General Affairs Division

Reputation
Risk

Internal Audit Division

Committee

Banking subsidiary and affiliates

Direction of basic policies, etc.

Administration and management

Reporting on status of risk management

Consultation on risk management

The Senshu Ikeda Bank
Audit & Supervisory Board

Board of Directors

Crisis Management Headquarters
Management Committee

Supervising
division

Type of risks

Responsible
divisions
Divisions in chargeof operating
and managing

Risk Management Division

Credit Risk Market Risk

Funding
Liquidity
Risk

Risk Management Division

Operational Risk
Information
Asset(system) Risk

Tangible Fixed
Asset Risk

Personnel
Risk

Legal Risk

Reputation
Risk

Operations Management
Division

Corporate Planning andGeneral Affairs Division

Personnel Affairs
Division

Risk
Management
Division

Corporate Planning andGeneral Affairs Division

Administrative
Risk

Each division of Headquarters, each branch, subsidiaries and affiliates

Senshu Ikeda Tokai Tokyo Securities

41

ALM Committee

Risk Management Committee

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

Senshu Ikeda Servicer

Shizen Soken

Internal Audit Division

Committee

SENSHU IKEDA HOLDINGS,INC.

Approach to Facilitation of Financing
The Senshu Ikeda Bank (hereinafter the “Bank”) is focused on providing adequate and sufficient financial
intermediary function to customers in need of businessloans or housing loans, as one of the crucial management priorities. The Bank has formulated basic policy forfacilitation of financing (hereinafter the “Policy”) in orderto promote facilitation of financing to those in needparticularly under the current tight economic environment.
The Bank intends to communicate with our customers
and promote facilitation of financing positively.

l Organizational structure(1) With the purpose to develop a management structurenecessary to supply facilitation of financing (hereinafter “Facilitation of Financing Management”) under the
Policy, the Bank appoints the Facilitation of Financing
Manager to check whether Facilitation of Financing
Management is effectively working.
(2) The Bank appoints the director in charge of the Loan
Division to the Facilitation of Financing Manager. The
Manager will engage in the development and reinforcement of the structure for Facilitation of Financing
Management through checking the progress inrespect of Facilitation of Financing Management.
(3) The Facilitation of Financing Manager coordinates theoverall business in respect of Facilitation of Financing
Management such as instructions to the division
responsible for Facilitation of Financing Management,

and drawing up of the rules governing facilitation offinancing, with the purpose to ensure adequacy,
sufficiency and effectiveness of Facilitation of Financing Management.
(4) The Loan Division is responsible for Facilitation of
Financing Management. The Loan Division engages
in the adequate operation, examination and improvement of Facilitation of Financing Management under
the command of the Facilitation of Financing Manager
through gathering information necessary for Facilitation of Financing Management.

System for accepting consultation of facilitation of financing

The Senshu Ikeda Bank
[Headquarters][Branches]
Facilitation of Financing Manager
Consultation,
application andcomplaints

Reporting andconsultation

Coordination[Consultation Service over holidays]

Customers

Boardof
Directors

Divisions managing Facilitation of Financing

Over-the-counter Consultation Service

Over-the-counter Consultation Service

Reporting

Development and reinforcement of the supervising structure

Facilitation of Financing Officer

Sincere andadequate
respondence

Facilitation of Financing Manager

Support andinstruction

Toll-free Consultation Service

Divisions associated with Facilitation of Financing

Instructions

Smooth financing
Appropriate explanations to customers
Dealing with complaints and consultations appropriately
Support in improving management
Support in restructuring
Personnel training
Analysis and improvement of management structureManagement
Committee[Consultation Service]Consultation, application and complaints

Toll-free Consultation Service
Repayment Consultation Approach

Sincere and adequate respondence

Coordination
Businesstransactions, etc.

Credit Guarantee Corporation, Enterprise
Turnaround Initiative Corporation of Japan,
Japan Housing Finance Agency and other financial institutions

Contact for opinions and requests(complaints) concerning facilitationof financing <Toll-free>

Reporting

Audit &
Supervisory
Board

Disclosure

ReportingPublicAuthorities

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

42

l Basic Policies(1) On receiving consultations or applications for newloans, or changes in loan terms from customers, theBank intends to make sincere effort to conduct adequate and prompt credit screening throughconsidering customers’ recent financial results,
assets and income as well as future potential andprospect. The Bank also deals with the applications
for new loans, after changes in loan terms in a similar
way as referred to above.
(2) The Bank intends to work appropriately and proactively
to revitalize the local economies and streamline regional financing by making efforts to supply funds (including new credit granting) smoothly as well as to makechanges in loan terms by monitoring the conditions of
the customers carefully and fully coordinating withother related financial institutions including otherbusiness categories.
(3) In addition, the Bank intends to provide maximum
support to the business improvement efforts of its
customers not only through its role as a provider offinancing but also through various customer services
including business consultation and guidance.
(4) Furthermore, keeping in mind the purpose of the“Guidelines on Proprietor Guarantees” (Study Groupon Guidelines on Proprietor Guarantees, December 5,
2013; hereinafter “Guidelines on Proprietor Guarantees”),
the Bank intends to further promote loans that are notdependent on proprietor guarantees, and to this end,
the Bank’s policy will be to not require proprietor
guarantee as a general rule.
(5) On receiving consultations or applications for newloans, or changes in loan terms from customers, theBank intends to provide sufficient explanation in orderto gain customers’ understanding and satisfaction, on
the basis of past trading records, customers’
knowledge, experience and assets situation. If the
Bank has to decline customers’ application, we will
explain the reason background of the decision as
concretely and courteously as possible.
(6) The Bank intends to improve capability of directors
and employees about facilitation of financing bygiving internal training, to enable them to makeappropriate decisions based on good understandingof customers' situations.
(7) The Bank intends to respond to any comments,
requests, consultations and complaints from
customers in respect of facilitation of financing
promptly and sincerely.

l Policies for handling of application for loans from small and medium enterprises and sole proprietors(1) On receiving applications for changes in businessterms such as loan terms from small and medium
enterprises and sole proprietors, the Bank intends toaccommodate such application and offer adequatechanges in terms adequately as far as possible,
taking into consideration of the specialty and thecircumstance of customers’ businesses.
(2) The Bank intends to provide small and medium
enterprises and sole proprietors with management
consultation, guidance and other adequate assistance in support of their effort for management
improvement, taking into consideration the operational circumstance of customers.
(3) In the cases that customers borrow from other financial institutions as well as the Bank, we will, uponcustomers’ approval, strive to make arrangements incoordination with the other financial institutions inorder to help to reduce the burden of repayment.
(4) On receiving request for the corporate rehabilitation
procedure through Alternative Dispute Resolution(ADR) for corporate rehabilitation (*) or Enterprise
Turnaround Initiative Corporation of Japan, the Bank
makes utmost effort to respond adequately to such
request as far as possible, in full consideration of theprospect of improvement or rehabilitation of thebusiness.
(Note) This refers to certified dispute resolution procedure set out in Article 2, Paragraph 25 of the
Law on Special Measures for Industrial
Revitalization, in which a private third party
organization formulates a rehabilitation plan,
as coordinator of the interests of creditors.

l Policies for handling of application for housing loan
(1) On receiving applications for new loans or changes inhousing loan terms from housing loan customers, theBank intends to accommodate such application andoffer adequate new loans or changes in terms adequately as far as possible, taking into considerationof circumstances including customers’ assets andincome and transactions with other financial institu-

43

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

tions.
(2) In the cases that customers have transaction withother financial institutions as well as the Bank or withJapan Housing Finance Agency, we will, upon customers’ approval, strive to make arrangements incoordination with the other financial institutions inorder to help to reduce the burden of repayment.

SENSHU IKEDA HOLDINGS,INC.

Corporate Information
Corporate Data (As of the end of March 2023)
Senshu Ikeda Holdings, Inc.
Establishment: October 1, 2009
Location:18-14 Chayamachi, Kita-ku, Osaka-City, Osaka 530-0013, Japan
Phone:
81-(0)6-4802-0181
URL:
https://www.senshuikeda-hd.co.jp
Share Capital:¥102.9 billion
Business Activities: Management and other related operations of banks and affiliates
whose shares can be held in accordance with the Banking Act
and other related operations, and businesses which bank holding
company can operate in accordance with the Banking Act.
Number of Employees: 133
Stock Listing:Tokyo Stock Exchange

The Senshu Ikeda Bank, Ltd.
Establishment: September 1, 1951
18-14 Chayamachi, Kita-ku, Osaka-City, Osaka 530-0013, Japan
Location:
Phone:
81-(0)6-6375-1005
URL:
https://www.sihd-bk.jp
Share Capital:¥61.3 billion
Deposits:¥5.6159 trillion
Loans:¥4.7863 trillion
Number of Branches: 139
Number of Employees: 2,107
Credit Ratings: A(Japan Credit Rating Agency, Ltd.)International Network
Suzhou Representative Office:

Ho Chi Minh City Representative Office:399 East Baodai Road,
Wuzhong District, Suzhou,
Jiangsu, China

7th Floor, Sun Wah Tower,
115 Nguyen Hue Boulevard,
District 1, Ho Chi Minh City,
VietnamPhone:
84-(0)28-3821-3295
Facsimile :84-(0)28-3821-3298

Phone:
Facsimile :86-(0)512-6585-1791
86-(0)512-6585-2312

Senshu Ikeda Tokai Tokyo Securities Co.,Ltd.
Establishment: January 30, 2013
Location:
3-2-1 Toyosaki, Kita-ku, Osaka-City, Osaka 530-0013, Japan
Phone:
81-(0)6-6485-0031
URL:
https://www.sittsec.co.jp
Share Capital:¥1.25 billion
Assets Under Management: ¥183.1 billion
Number of Branches: 7
Number of Employees: 126

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

44

Major Shareholders (As of March 31, 2023)
Name

45

Number of Shares Owned (Thousands)

Proportion of Total Shares (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

31,621

11.27

Custody Bank of Japan, Ltd. (Trust Account)

29,814

10.63

The Senshu Ikeda Bank Employees’ Shareholders Association

13,897

4.95

MUFG Bank, Ltd.

5,934

2.11

ITAMI SANGYO CO., LTD.

3,692

1.31

JP MORGAN CHASE BANK 385781(Standing proxy: Settlement & Clearing Service Division, Mizuho Bank, Ltd.)

3,239

1.15

Custody Bank of Japan, Ltd. (Trust Account 4G)

2,904

1.03

STATE STREET BANK AND TRUST COMPANY 505223(Standing proxy: Settlement & Clearing Service Division, Mizuho Bank, Ltd.)

2,828

1.00

Nippon Life Insurance Company(Standing proxy: The Master Trust Bank of Japan, Ltd.)

2,505

0.89

MSCO CUSTOMER SECURITIES(Standing proxy: Morgan Stanley MUFG Securities Co., Ltd.)

2,487

0.88

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

SENSHU IKEDA HOLDINGS,INC.

Business Description of the Groupn Organizational Chart of the Group (As of the end of June, 2023)
Head office and branches: 136
Banking services

Sub-branches: 3

Senshu Ikeda Holdings, Inc.

Representative offices: 3● Senshu Ikeda Lease Co., Ltd.

Leasing services● Senshu Ikeda Auto Lease Co., Ltd.
● Senshu Ikeda Guarantee Co., Ltd.

Credit guarantee services●● Kinki Credit Guarantee Company Limited

The Senshu Ikeda Bank, Ltd.

● Senshu Ikeda JCB Co., Ltd.
Credit card services●● Senshu Ikeda DC Co., Ltd.
● Senshu Ikeda VC Co., Ltd.

Senshu Ikeda Tokai Tokyo
Securities Co.,Ltd.

● Senshu Ikeda Capital Co., Ltd.
● Senshu Ikeda Business Service Company Limited● Senshu Ikeda System Co., Ltd.

Other services

Station Network Kansai Co., Ltd.
● Investment enterprise partnerships: 7●

Securities services

Head office and branches: 7

Senshu Ikeda Servicer Co., Ltd.

Receivables management
and collection business

Head office

Shizen Soken Co.,Ltd.

Other services

Head office(Note:● indicates consolidated subsidiaries and○ indicates equity-method affiliates)(Note) Senshu Ikeda Investment Management Co., Ltd. and SI Mirai Fund No. 1 Investment Limited Partnership, which were consolidated subsidiaries, were excluded from the scope of
consolidation as their liquidation was completed in December 2022 and March 2023, respectively.
On May 30, 2023, the Company established the Kansai Innovation Network No. 2 Investment Limited Partnership, which will be a consolidated subsidiary.

n Subsidiaries and Affiliates (As of the end of June, 2023)

Affiliates

Subsidiaries

Name

Address

Date ofestablishment

Major Business

Share Capital Investment ratio (%)(millions of
Subsidiaries
Japanese yen) The Company and affiliates

The Senshu Ikeda Bank, Ltd.

18-14, Chayamachi, Kita-ku, Osaka-city Banking services

September 1, 1951

61,385100.00–Senshu Ikeda Tokai Tokyo
Securities Co.,Ltd.

3-2-1, Toyosaki, Kita-ku, Osaka-city

Securities services

January 30, 2013

1,250

60.00

–

Senshu Ikeda Servicer Co., Ltd.

3-1-22, Toyosaki, Kita-ku, Osaka-city

Receivables management and col- April 15, 2022
lection business

500

100.00–100.00Senshu Ikeda Lease Co., Ltd.

4-5-36, Miyahara, Yodogawa-ku, Osaka-city Leasing services

April 1, 1986

50–

Senshu Ikeda Auto Lease Co.,Ltd.

4-5-36, Miyahara, Yodogawa-ku, Osaka-city Leasing services

July 10, 1996

80

–

95.00

Senshu Ikeda Guarantee Co., Ltd.

3-1-22, Toyosaki, Kita-ku, Osaka-city

Credit guarantee services

July 20, 1973180–

100.00Kinki Credit Guarantee Company
Limited

3-1-22, Toyosaki, Kita-ku, Osaka-city

Credit guarantee services

April 1, 1975100–

100.00Senshu Ikeda JCB Co., Ltd.

3-2-1, Toyosaki, Kita-ku, Osaka-city

Credit card services

February 1, 1983

60–

100.00Senshu Ikeda DC Co., Ltd.

3-2-1, Toyosaki, Kita-ku, Osaka-city

Credit card services

September 5, 199030–

100.00Senshu Ikeda VC Co., Ltd.

3-2-1, Toyosaki, Kita-ku, Osaka-city

Credit card services

November 2, 199040–

100.00Senshu Ikeda Capital Co., Ltd.

18-14, Chayamachi, Kita-ku, Osaka-city Investment services

March 6, 198990–

100.00Senshu Ikeda Business Service
Company Limited

18-14, Chayamachi, Kita-ku, Osaka-city Back-office administration

April 1, 198330–

100.00Senshu Ikeda System Co., Ltd.

18-14, Chayamachi, Kita-ku, Osaka-city Computer software development
and sale services

June 10, 1985

50–

100.00

Shizen Soken Co., Ltd.

2-1-11, Jonan, Ikeda-city

Information offering services

November 1, 1996

80

27.50

–

Station Network Kansai Co., Ltd.

1-4-8, Shibata, Kita-ku, Osaka-city

Planning and operation of ATM at station June 29, 2000

100

–

40.00

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

46

Organization and Board of Directors
Senshu Ikeda
Ikeda Holdings
Holdings
Senshun Organization (As of the end of June, 2023)

Management
ManagementCommittee
Committee

SX Strategy
Strategy Office
OfficeSXDX
DX Strategy
Strategy Office
OfficeDigitalDigital Bank
Bank Preparatory
Preparatory office
officeGroup
Group Strategy
Strategy Division
Division

Efficiency
EfficiencyImprovement
ImprovementCommittee
Committee

ALM
ALMCommittee
Committee

Anti-Money
Anti-MoneyLaundering
Launderingand
andCombating
CombatingthetheFinancing
FinancingofofTerrorism
TerrorismCommittee
Committee

Compliance
ComplianceCommittee
Committee

Risk
RiskManagement
ManagementCommittee
Committee

Sustainability
SustainabilityCommittee
Committee

Remuneration
RemunerationCommittee
Committee

PersonnelCommittee
Committee
Personnel

Personnel
Personnel Affairs
Affairs Division
Division

Audit
Audit&&Supervisory
SupervisoryBoard
BoardMembers
MembersOffice
OfficeAudit
Audit&&Supervisory
SupervisoryBoard
BoardMembers
Members Audit
Audit&&Supervisory
SupervisoryBoard
Board

Board
BoardofofDirectors
Directors

GeneralGeneralMeeting
MeetingofofShareholders
Shareholders

Corporate
Corporate Planning
Planning andand General
General Affairs
Affairs Division
Division

GeneralGeneral Risk
Risk Management
Management Division
DivisionInternal
Internal Audit
Audit Division
Divisionn Board of Directors (As of June 27, 2023)
Representative Director
and Chairman
Representative Director,
President and CEO

Takayuki Ota

Director &Senior Managing
Executive Officer

Atsushi Ukawa

Director &Senior Managing
Executive Officer

Toshiyuki Wada
Hirohito Sakaguchi

Takao Koyama

Audit & Supervisory
Board Member(Full-time)

Hiroo Maeno

Director(Outside)

Atsuko Ogasawara

Seiji Morinobu

Director(Outside)

Yoshihiro Nakagawa

Audit & Supervisory
Board Member(Outside)
Audit & Supervisory
Board Member(Outside)

Satoshi Kitagawa

Director(Outside)

Kouhei Nakanishi

Director &Senior Managing
Executive Officer

Osamu Tsukagoshi

Director(Outside)

Minoru Furukawa

Audit & Supervisory
Board Member(Full-time)

Takayoshi Fujiwara

Executive
OfficerAtsushi Otsuka

Executive
Officer

Kazuo Nagai

Tsutomu Irie

Executive
Officer

Ryoichi Iimuro

Executive
Officer

Yoshinori Narita

Kyoko Matsushita

Executive
Officer

Kengo Hounoki

Tomoyuki Shinohara

Executive
Officer

Akira Ishikawa

n Executive Officers (As of June 27, 2023)

47

Senior Managing
Executive Officer

Yasuki Hosomi

Senior Managing
Executive Officer

Shinji Inoue

Managing
Executive
OfficerManaging
Executive
OfficerManaging
Executive
OfficerManaging
Executive
Officer

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

SENSHU IKEDA HOLDINGS,INC.

The Senshu
Senshu Ikeda
Ikeda BankBankThen Organization (As of the end of June, 2023)
Personnel
PersonnelCommittee
Committee

Remuneration
RemunerationCommittee
Committee

Corporate Planning
Planning andand General
General Affairs
Affairs Division
Division
Corporate
Personnel Affairs
Affairs Division
Division
Personnel
Risk Management
Management Division
Division
Risk

Operations Management
Management Division
Division
Operations

Compliance Management
Management Office
OfficeCompliance
Anti-Money
LaunderingandCombatingAnti-Money
Launderingand Combating
the Financing
Financing
Terrorism
Officetheofof Terrorism
OfficeOperating Center
CenterOperatingManagement
ManagementCommittee
Committee

International Division
DivisionInternational
Branches (including(including sub-branches):
sub-branches): 139
139
Branches
Retail BusinessBusiness Division
Division
RetailPersonal Loan
Loan Promotion
Promotion Office
OfficePersonal

M&A Advisory
Advisory Office
OfficeM&A
CS Headquarters
HeadquartersCS

ALM
ALMCommittee
Committee

Anti-Money
Anti-MoneyLaundering
Launderingand
andCombating
CombatingthetheFinancing
FinancingofofTerrorism
TerrorismCommittee
Committee

Compliance
ComplianceCommittee
Committee

Risk
RiskManagement
ManagementCommittee
Committee

Solution BusinessBusiness Division
Division
Solution

Audit
Audit& &Supervisory
SupervisoryBoard
BoardMembers
MembersOffice
OfficeAudit
Audit& &Supervisory
SupervisoryBoard
BoardMembers
Members Audit
Audit&&Supervisory
SupervisoryBoard
Board

Board
BoardofofDirectors
Directors

GeneralGeneralMeeting
MeetingofofShareholders
Shareholders

Risk Products
Products Operations
Operations Office
OfficeRisk

Private Banking
Banking Office
OfficePrivateOverseas Representative
Representative Office
OfficeOverseas
Regional Co-Revitalization
Co-Revitalization andand Innovation
Innovation Division
Division
Regional
Business Strategy
Strategy Division
Division
Business
Customer Center
CenterCustomer
Financial Market
Market Division
Division
FinancialMarket Operations
Operations Office
OfficeMarketLoan Division
Division
Loan
Business Rehabilitation
Rehabilitation Supporting
Supporting Office
OfficeBusiness
Internal Audit
Audit Division
DivisionInternal

n Board of Directors (As of June 27, 2023)
Representative Director
and Chairman

Takayuki Ota
Representative Director,
Atsushi Ukawa
President and CEO

Director & Senior Managing
Executive Officer

Toshiyuki Wada
Director & Senior Managing
Hirohito Sakaguchi
Executive Officer
Director & Senior Managing
Osamu Tsukagoshi
Executive Officer
Director & Managing
Takayoshi Fujiwara
Executive Officer
Director & Managing
Tsutomu Irie
Executive Officer

Non-executive Director(Non-full-time)Non-executive Director(Non-full-time)Non-executive Director(Non-full-time)Non-executive Director(Non-full-time)
Audit & Supervisory
Board Member (Full-time)

Minoru Furukawa
Takao Koyama
Atsuko Ogasawara
Yoshihiro Nakagawa
Osamu Horiuchi

Audit & Supervisory
Board Member (Full-time)
Audit & Supervisory
Board Member (Outside)
Audit & Supervisory
Board Member (Outside)

Katsumi Hiramatsu
Ken-ichi Yoshimoto
Kazuyuki Tanaka

n Executive Officers (As of June 27, 2023)
Senior Managing
Executive Officer
Senior Managing
Executive Officer

Koji Miyata
Akira Harada
Managing
Executive Officer Kyoko Matsushita
Managing
Executive Officer Shin-ichi Kojima
Managing
Executive Officer Tomoyuki Shinohara

Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer
Executive
OfficerAtsushi Otsuka
Hiromu Koujiya
Yoshi Yamamoto
Ryoichi Iimuro
Masahide Inui
Yasuji Kanbayashi

Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer

Takahiro Doki
Masayoshi Onishi
Tsuyoshi Kotani
Akira Nishikawa
Kengo Hounoki
Yasushi Yamanaka

Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer

Akira Ishikawa
Kazuo Nagai
Yoshinori Narita
Tetsuo Yamamoto

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

48

Representative
Director andPresident

Motoshi Inoue

Audit & Supervisory
Board Member(Full-time)

Ken-ichi Hanadate

Representative
Director andVice President
Senior Managing
Director

Nozomu Kudou

Audit & Supervisory
Board Member(Outside)
Audit & Supervisory
Board Member(Outside)

Osamu Horiuchi
Yasuhiko Ozawa

n Executive Officers (As of June 27, 2023)

49

Deputy General Manager, Business Headquarters

General Manager, Business Headquarters

Business Management Division
Collaboration Promotion Office
Corporate Business Promotion Office

Deputy General Manager, Management Headquarters

Planning and General Affairs Division

Business Compliance Division
FD Promotion OfficeInternal Audit Divisionn Board of Directors (As of June 27, 2023)

Muneharu Kurita

Branches

Product Management Division

General Manager, Management Headquarters

Representative Director and Vice President

Representative Director and President
Compliance Committee

Audit & Supervisory Board Members Audit & Supervisory Board

Management Committee

Board of Directors

General Meeting of Shareholders

Senshu Ikeda Tokai Tokyo Securitiesn Organization (As of the end of June, 2023)

Managing Executive
Officer

Toshiyuki Inoue

Executive Officer

Shigeki Kawamura

Managing Executive
Officer

Masaomi Umezawa

Executive Officer

Shinji Nakatani

SENSHU IKEDA HOLDINGS,INC. ANNUAL REPORT 2023

Consolidated Financial Information of Senshu Ikeda Holdings
Consolidated Balance Sheets
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
As of March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)
2023

Millions of yen
2023
2022

AssetsCash and due from banks (Notes 26 and 32)
Call loans and bills bought (Note 32)
Monetary claims bought (Note 32)
Money held in trust (Notes 6 and 32)
Securities (Notes 5, 7, 12, 19, 32 and 33)
Loans and bills discounted (Notes 8, 31, 32 and 33)
Foreign exchange assets (Notes 9 and 32)
Other assets (Notes 10 and 12)
Tangible fixed assets (Note 11)
Intangible fixed assets
Net defined benefit assets (Note 17)
Deferred tax assets (Note 28)
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Total assets¥¥

821,649
7,692–
15,010486,984
4,737,192
5,856
82,42835,857
3,837
23,928
4,044
6,317(11,301)
6,219,501¥

5,579,250
4,371
338,899
314
1,660
56,374
1,724
85
144

¥

¥

1,723,186
368
49
24,521
648,256
4,503,834
7,506
76,32236,452
4,165
23,402
3,778
7,437(14,865)
7,044,417$

6,153,291
57,605–
112,4093,647,000
35,476,611
43,855617,299
268,531
28,735
179,195
30,28547,307(84,632)$ 46,577,555

5,557,248
84,792
1,082,890
302
513
55,870
2,504
90
141

$ 41,782,745
32,7342,537,998
2,351
12,431
422,182
12,910636
1,078

Liabilities and net assets
Liabilities
Deposits (Notes 12, 13 and 32)
Payables under securities lending transactions (Notes 12 and 32)
Borrowed money (Notes 12, 14, 32 and 33)
Foreign exchange liabilities (Notes 15 and 32)
Borrowed money from trust account
Other liabilities (Notes 12 and 16)
Provision for employees’ bonuses
Provision for directors’ bonuses
Net defined benefit liability (Note 17)
Accrued retirement benefits for directors and audit & supervisoryboard members
Reserve for reimbursement of deposits
Reserve for point services
Reserve for contingent losses
Reserve under special laws
Deferred tax liabilities (Note 28)
Acceptances and guarantees (Note 20)
Total liabilities
Net assets
Shareholders’ equity (Note 20):
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gain (loss) on available-for-sale securities (Note 7)
Net unrealized gain (loss) on deferred hedges (Note 33)
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock subscription rights (Note 20)
Non-controlling interests
Total net assets
Total liabilities and net assets

¥

¥

4

4

29

209
–
1,154
13
276
6,317
5,990,803

286
64
1,160
11
237
7,437
6,793,557

1,565
–
8,642
97
2,066
47,30744,864,846

102,999
16,89995,294(135)
215,057

102,999
42,10889,320(145)
234,283

771,354
126,555
713,652(1,011)
1,610,551

5,558
45
5,754
11,358116
2,164
228,697
6,219,501

7,607
(24)
6,468
14,05186
2,438
250,860
7,044,417

41,623337
43,09185,059868
16,206
1,712,701$ 46,577,555¥

See accompanying notes to consolidated financial statements

50Consolidated Statements of Operations
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022

Millions of yen
2023
2022

Thousands of U.S.
dollars (Note 1)
2023

IncomeInterest income:Interest on loans and bills discounted (Note 31)
Interest and dividends on securities
Other interest income
Trust fees
Fees and commissions
Other ordinary income (Note 21)
Reversal of provision for possible loan losses
Recoveries of written-off claims
Gain on sales or disposal of fixed assets
Other income (Note 22)
Total income¥

39,246
5,817
1,397
26
24,245
3,625
3,229
474
1
13,92091,985¥39,784
2,906
2,619
11
21,211
2,253
500
868
89
13,858
84,102$

293,91143,563
10,462
194
181,569
27,14724,181
3,549
7
104,246
688,871

Expenses
Interest expenses:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions
Other ordinary expenses (Note 23)
General and administrative expenses
Loss on sales or disposal of fixed assets
Loss on impairment of fixed assets
Other expenses (Note 24)
Total expenses
Income before income taxes

638
35
1,018
8,301
11,632
43,94070
161
14,50080,297
11,688

902
39
72
7,195
2,120
46,155
109
177
13,491
70,263
13,839

4,777
262
7,623
62,165
87,111
329,064524
1,205
108,589
601,340
87,530

Income taxes (Note 28)
Current
Deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of the parent

1,164
1,264
2,429
9,258
(244)
9,502

1,640
622
2,262
11,576
176
11,4008,717
9,466
18,19069,332(1,827)
71,160¥¥$See accompanying notes to consolidated financial statements

Consolidated Statements of Comprehensive Income
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022

ProfitOther comprehensive income (Note 29)
Net unrealized gain (loss) on available-for-sale securities
Net unrealized gain (loss) on deferred hedges
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests

51

¥

¥

Millions of yen
2023
2022
9,258
¥
11,576(2,049)70(713)(2,692)
6,565
6,810
(244)

¥

(3,136)108(1,421)(4,449)
7,127
6,950
176

Thousands of U.S.
dollars (Note 1)
2023$
69,332$(15,344)524(5,339)(20,160)
49,16450,999(1,827)

Consolidated Statements of Changes in Net Assets
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
Year Ended March 31, 2023

BALANCE, April 1, 2021
Cumulative effect of changein accounting policy
Balance at the beginning ofcurrent period which reflects
the change in accounting
policyCash dividends
Profit attributable to ownersof the parent
Acquisition of treasury stock
Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the period
BALANCE, March 31, 2022
Purchase of shares of
consolidated subsidiaries
Cash dividends
Profit attributable to ownersof the parent
Acquisition of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the period
BALANCE, March 31, 2023

BALANCE, April 1, 2022
Purchase of sharesconsolidated subsidiaries

Noncontrollinginterests

Total net
assets76

2,434

247,042

–

–

(0)

(315)

7,889

76

2,434

246,727

Capitalstock

CapitalsurplusRetainedearnings

Treasurystock

102,999

42,10781,087(163)

226,030

10,744

(133)

7,889

–

–

(315)

–

(315)

–

–

102,999

42,10780,772(163)

225,715

10,744(133)(2,851)
11,4001–
102,999

1
42,108

8,548
89,32011,400

(0)
19

(0)
19

–

(3,136)108(1,421)10

4(4,435)

17
(145)

8,567
234,283(3,136)
7,607

108
(24)

(1,421)
6,468

10
86

4
2,438

4,132
250,860

9,502

6

6

(3,528)(3,528)

9,502

9,502

(0)

(25,216)
10(25,216)9(25,216)9(25,215)

25,215––(25,209)
16,8995,974
95,294

Capitalstock

CapitalsurplusRetainedearnings

771,354

315,344668,913–(2,049)

70

(713)

29

(273)

(2,937)(19,225)
215,057(2,049)
5,558

70
45

(713)
5,754

29
116

(273)
2,164

(22,162)
228,697

Thousands of U.S. Dollars (Note 1)
Accumulated othercomprehensive incomeNet
unrealizedNetgain (loss) on unrealized
RemeasureTotal
availablegain (loss)
ments of
Stock
Treasury shareholders'for-saleon deferreddefinedsubscription
stock
equitysecurities
hedgesbenefit plansrights

Noncontrollinginterests

Total net
assets

18,258

1,878,678

10
(135)

(1,085)44

Cash dividends
Profit attributable to ownersof the parent
Acquisition of treasury stock
Disposal of treasury stock(26,421)
71,160–771,354(2,851)

11,400(3,528)–102,999(2,851)

(0)
18

6

of

Retirement of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the period
BALANCE, March 31, 2023

Millions of Yen
Accumulated othercomprehensive incomeNet
unrealizedNetgain (loss) on unrealized
RemeasureTotal
availablegain (loss)
ments ofStockshareholders'for-saleon deferreddefinedsubscription
equitysecurities
hedgesbenefit plansrights

1,754,534

56,968(179)

48,438

644

44

44

(26,421)(26,421)

71,16071,160(0)(188,841)
74(188,841)
67(188,841)
67(188,833)

188,833––(188,789)
126,555

44,739713,65274(1,011)–(15,344)524(5,339)217(2,044)(143,975)(15,344)

1,610,551

41,623524
337(5,339)217868(2,044) (165,970)
16,206 1,712,701

43,091(21,995)

See notes to consolidated financial statements

52

Consolidated Statements of Cash Flows
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)
2023

Millions of yen
2023
2022
Cash flows from operating activities
Income before income taxes
Depreciation
Loss on impairment of fixed assets
Amortization of goodwill(Earnings) losses from investments under the equity method
Increase (decrease) in reserve for possible loan losses
Increase (decrease) in accrued bonuses
Increase (decrease) in provision for directors' bonuses
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability

11,688¥

13,839$87,530

4,743

4,650

35,520

161

177

1,205

–

27

–

(17)

1

(127)

(3,564)(1,033)(26,690)

(779)

848

(5,833)

(5)

90

(37)

(188)

(331)

(1,407)

2

(4)

14

Increase (decrease) in reserve for reimbursement of deposits

(76)

(105)

(569)

Increase (decrease) in reserve for point services

(64)

6

(479)

Increase (decrease) in reserve for contingent losses

(6)

(10)

(44)

Interest income(46,461)(45,310)(347,944)

Interest expenses

1,691

1,013

12,663(Gain) loss on securities

9,901

1,372

74,148

(12)

65

(89)

(13,591)(6,634)(101,782)(Gain) loss on sales or disposal of fixed assets, net

58

(70)

434

Net (increase) decrease in loans and bills discounted(233,358)(212,303)(1,747,607)

22,001

148,403

164,764

Net increase (decrease) in borrowed money (excluding subordinated borrowings)(743,990)

109,665(5,571,706)

Net (increase) decrease in due from banks (excluding due from the Bank of Japan)

4,416

542

33,071(Gain) loss on money held in trust(Gain) loss on foreign exchange

Net increase (decrease) in deposits

Net (increase) decrease in call loans and bills bought and others(7,274)

9,076(54,474)

Net increase (decrease) in payables under securities lending transactions(80,420)

74,468(602,261)

Net (increase) decrease in foreign exchange (assets)

1,650(2,445)

12,356

Net increase (decrease) in foreign exchange (liabilities)

11

(185)

82

Net increase (decrease) in borrowed money from trust account

1,147

513

8,589

Interest received

47,17945,471

353,321

Interest paid

(1,843)(1,072)(13,802)

Other(4,986)(1,569)(37,339)(1,031,986)

139,157(7,728,495)(2,145)(352)(16,063)

138,804$ (7,744,559)

Subtotal
Income taxes paid
Net cash provided by (used in) operating activities53¥¥ (1,034,131)¥

Consolidated Statements of Cash Flows
Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)
2023

Millions of yen
2023
2022
Cash flows from investing activities
Purchases of securities¥(96,890)¥(304,026)$(725,604)

Proceeds from sales of securities

188,957

123,123

1,415,090

Proceeds from maturity of securities

68,025105,531509,436

Increase in money held in trust–(4,500)–Decrease in money held in trust

9,500

–

71,145Purchases of tangible fixed assets(2,857)(2,850)(21,395)

Purchases of intangible fixed assets(1,076)(1,041)(8,058)Proceeds from sales of tangible fixed assets
Net cash provided by (used in) investing activities

1

229

7

165,660(83,534)

1,240,620(3,528)(2,851)(26,421)

(18)

(172)

(134)

(25,216)(0)(188,841)

9

19

67

(28,753)(3,004)(215,329)

Cash flows from financing activities
Cash dividends paid
Cash dividends paid for non-controlling shareholders
Purchases of treasury stock
Proceeds from disposition of treasury stock
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period (Note 26)

104

22

778

(897,120)

52,287(6,718,490)

1,712,443¥

815,323

1,660,156¥

1,712,443

12,824,406$

6,105,916

See accompanying notes to consolidated financial statements

54

Notes to Consolidated Financial Statements 0161303263309_003.htm

2023/09/19 9:57

2023/09/19 9:57

Senshu Ikeda Holdings, Inc. and Consolidated Subsidiaries
For the Years Ended 31st March, 2023 and 2022

1. Basis of Presentation
Senshu Ikeda Holdings, Inc. (the “Company”) is a holding
company and conducts its operations through its subsidiaries
and affiliates. The Company and its subsidiaries (collectively,
the “Group”) maintain their books of account in accordancewith the provisions set forth in the Companies Act of Japan(the “Act”) and in conformity with accounting principles andpractices generally accepted in Japan, which are different incertain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
The accompanying consolidated financial statements havebeen compiled from the consolidated financial statements
prepared by the Company as required by the Financial
Instruments and Exchange Act of Japan. Certain accounts
have been reclassified for the convenience of readers outside
Japan.
In preparing the accompanying consolidated financial
statements, Japanese yen amounts are presented in millionsof yen by rounding down figures below one million. As aresult, the totals in yen in the accompanying consolidated
financial statements do not necessarily agree with the sumsof the individual amounts.
The translation of yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside Japanand has been made at ¥133.53 = U.S.$1.00, the exchange
rate prevailing on March 31, 2023. This translation should not
be construed as a representation that yen can be converted
into U.S. dollars at the above or any other rate.

2. Principles of Consolidation
The accompanying consolidated financial statements include
the accounts of the Company and its 19 (20 in 2022)
significant subsidiaries which it controls directly or indirectly.
Affiliates over which the Company exercises significant
influence in terms of their operating and financial policies
have been included in the accompanying consolidated
financial statements on an equity basis.
Change in the scope of consolidation
Senshu Ikeda Investment Management Co., Ltd. and SI Mirai
Fund No.1 Investment Enterprise Limited Partnership, all ofwhich were consolidated subsidiaries of the Company in thefiscal year ended March 31, 2022 were excluded from thescope of consolidation from the fiscal year ended March 31,
2023, due to completion of their liquidation procedures.
Senshu Ikeda Servicer Co., Ltd. has been included in thescope of consolidation from the fiscal year ended March 31,
2023 as a result of contribution by the Company.

All significant intercompany accounts and transactions havebeen eliminated in consolidation. All material unrealized profit
included in assets resulting from transactions within theGroup is eliminated.
The difference between the cost and the underlying equity inthe net assets of the consolidated subsidiaries measured atfair value at their respective dates of acquisition is presented
as “goodwill” or “negative goodwill”. Goodwill is amortized by
the straight-line method over a period of 5 years.

(4)

(5)

The balance sheet date of 6 subsidiaries is December 31.
Appropriate adjustments have been made for significant
intervening transactions occurring during the period from
December 31 to March 31.

(6)

3. Significant Accounting Policies(1) Securities
Non-trading securities are classified into three
categories: held-to-maturity debt securities, equity
securities of an unconsolidated subsidiary and availablefor-sale securities. Held-to-maturity debt securities arecarried at amortized cost, and the cost being determinedby the moving average method. Equity securities of an
unconsolidated subsidiary are stated at cost determinedby the moving-average method. Available-for-salesecurities whose fair values are available are stated atfair value determined based on the quoted market priceand other information at the balance sheet date. Cost of
sales of these available-for sale securities is determinedusing the moving average method. Non-marketable
equity securities are stated at cost determined by themoving-average method.
Unrealized gain or loss on available-for-sale securities is
included in net assets, net of income taxes.
However, for consolidated subsidiaries engaged inbanking business, regarding the effect of exchange ratechanges on bonds among available-for-sale securities
denominated in foreign currencies, the effect on changes
in the market prices of foreign currencies is treated as
unrealized gain (loss), and other differences are treatedas gain (loss) on foreign exchange.

t

n

o

(2) Investment securities held in money trusts
Investment securities that are part of trust assets in
independently managed money trusts with the primary
purpose to manage securities are stated at the fair value
as of the balance sheet date.
(3) Derivatives
Derivatives are stated at fair value.

a

The company has applied the equity method to its
investments in 2 affiliates for the years ended March 31, 2023
and 2022, respectively.

h55

2023/09/19 9:57

(4) Tangible fixed assets
Depreciation of tangible fixed assets of the Group,
except for leased assets, is calculated principally by thestraightline method. The principal useful lives are as
follows:
Buildings··················· 3 to 50 years
Other························2 to 20 years(5) Intangible fixed assets
Intangible fixed assets are amortized by the straight-line
method. Amortization of the cost of software intended forinternal use is calculated by the straight-line method
based on a useful life (5 years) determined by the Groupand its consolidated subsidiaries.
(6) Reserve for possible loan losses
A reserve for possible loan losses is provided byconsolidated subsidiaries engaged in the banking
business (the “banking subsidiaries”) in accordance withthe prescribed standards. For claims on borrowers who
have declared bankruptcy or have commenced special
liquidation proceedings or similar legal proceedings(“bankrupt borrowers”), or borrowers who are not legallyor formally insolvent but are regarded as substantially inthe same situation (“effectively bankrupt borrowers”), a
reserve is provided based on the book value of theclaims, after the write-off stated below, net of the
expected amount recoverable from collateral andguarantees.
For claims on borrowers who are not currently bankrupt
but are likely to become bankrupt (“potentially bankrupt
borrowers”), a reserve is provided at the amount deemednecessary based on the overall solvency assessment of
the borrowers and the amount of the claims, net of the
expected amount recoverable from collateral andguarantees.
For other claims, a reserve is projected and provided
primarily at the amount of estimated losses over a
subsequent one-year period or three-year period.
Estimated losses are calculated using a loss rate basedon the average historical loan-loss ratio over a certain
period obtained from historical loan losses for a one-year
period or three-year period.
The Group conducts self-assessments of asset quality at
its loan offices. The assessments are audited by the
independent credit audit section in accordance with theGroup’s policy and guidelines for the self-assessment ofasset quality. Based on the results of theseassessments, an appropriate reserve is provided for the
resulting losses and for write-offs of doubtful assets.
For consolidated subsidiaries other than the banking
subsidiaries, a specific reserve for possible loan losses
at the total amount of loans deemed to be uncollectible
based on a solvency analysis of each loan, in addition toa general reserve at an amount calculated based on
historical experience, is provided.

0161303263309_003.htm

For collateralized or guaranteed claims on bankrupt
borrowers and effectively bankrupt borrowers, theamount of the claims exceeding the estimated value ofcollateral and guarantees is deemed to be uncollectible
and is written off against the total amount of theoutstanding claims. These write-offs amounted to¥24,324 million ($182,161 thousand) and ¥24,645 million
for the years ended March 31, 2023 and 2022,
respectively.

2023/09/19 9:57

(13)(7) Provision for employees’ bonuses
Provision for employees’ bonuses is calculated based onan estimated payment amount, which is attributable tothe fiscal year.

f(8) Provision for directors’ bonuses
Provision for directors’ bonuses is calculated based onan estimated payment amount for directors, which is
attributable to the fiscal year, in order to prepare for thepayment of performance-linked compensation to
directors, etc.
(9) Accrued retirement benefits for directors and audit &supervisory board members
Accrued retirement benefits for directors and audit &supervisory board members are provided at an amountthat would be required if all directors and audit &supervisory board members retired at the balance sheet
date.

o

(14)

(15)

(10) Reserve for reimbursements of deposits
Reserve for reimbursements of deposits is provided at an
estimate of the future payments to be made forreimbursement claims on deposits which were
derecognized and credited from liability to income basedon the Group’s historical experience.

p(11) Reserve for contingent losses
Reserve for contingent losses is provided at an estimateof the future loss on contingencies other than those
covered by other reserves or provisions.
(12) Reserve under special laws
Reserve under special laws consist of the financial
instruments transaction liability reserve of ¥13 million($97 thousand) as of March 31, 2023, posted by Senshu
Ikeda Tokai Tokyo Securities Co., Ltd., which were
calculated according to the specifications of Article 46-5of the Financial Instruments and Exchange Act andArticle 175 of the Cabinet Office Ordinance Related to
the Financial Instruments Business, to prepare for losses
originating from incidents relating to the purchase andsale of securities or other transactions.

w

(16)

t

d

1/30

56

2023/09/19 9:57

(13) Accounting treatment for retirement benefits
In the calculation of retirement benefit obligation, theCompany applies the benefit formula basis in attributing
expected retirement benefits to periods until the end of
this fiscal year.
Prior service cost is amortized by the straight-line
method over a period of 11 years, which is within the
average estimated remaining years of service of theeligible employees.
Actuarial gain or loss is amortized commencing the year
following the year in which the gain or loss is recognizedby the straight-line method principally over a period of 11
to 12 years, which is within the average estimatedremaining years of service of the eligible employees.
Some of the consolidated subsidiaries calculate their net
defined benefit liability and retirement benefit expenses
by adopting the simplified method, assuming the amountof year-end retirement benefit payable due to voluntaryterminations as retirement benefit obligation.
(14) Foreign currency transactions
Assets and liabilities of consolidated subsidiaries
denominated in foreign currencies are translated into
Japanese yen at the exchange rates in effect at thebalance sheet date.
(15) Leases
Leased assets under finance lease arrangements which
do not transfer ownership of the leased assets to thelessee are depreciated over the respective lease contract
periods using the straight-line method with residual
values defined in the lease contracts, otherwise theresidual values is zero.
As lessee:
Finance leases which commenced prior to 1st April,
2008, except for those substantially requiring the transferof ownership of the leased assets to the lessee, areaccounted for as operating leases.
As lessor:
Finance lease income and related cost are recognizedwhen lease payment is received. Finance leases which
do not transfer ownership of the leased assets to thelessee and commenced prior to 1st April, 2008 aredeemed to have been entered into contracts at theamount of the cost less accumulated depreciation atMarch 31, 2008.
(16) Revenues and expenses
Revenue from contracts with customers is recognizedwhen control of the promised goods or services istransferred to the customer. The amount of revenue
recognized from contracts with customers is calculated
based on the amount expected to be received in
exchange for goods or services. For point programs
operated by other companies in which the Company’s
consolidated subsidiaries participate, the amount
expected to be used in the future is recognized as an
amount to be collected on behalf of third parties anddeducted from fees and commissions.

570161303263309_003.htm(17) Revenue recognition for share dividends
Regarding the revenue recognition for share dividends
distributed from other retained earnings (limited to casesof cash dividends), they are recorded as follows inaccordance with Paragraph 94 of “Practical Guidelines
on Accounting for Financial Instruments” (JICPA
Accounting System Committee Report No. 14, July 4,2019).
(1) Shares with a market priceAs of the ex-dividend date of each share (the day
after the last trading day with dividend rights), theGroup estimates and records accrued dividends
receivable based on the previous actual dividend or
the published forecast dividend per share.
(2) Shares without a market price
Dividends to be paid within the period normallyrequired after the effective date of a resolution
regarding dividends passed at a general meeting ofshareholders, a meeting of the board of directors, orother body with decision-making authority of theissuing company are recorded in the fiscal year that
includes the date of payment.

2023/09/19 9:57

(21)

(22)
(1)

(18) Hedge accounting
Interest rate risk hedging
With respect to hedge accounting for the interest rate risk
arising from financial assets and liabilities of the banking
subsidiaries, the Group applies deferral hedge
accounting, under which gains or losses on derivatives
are deferred until maturity of the hedged transactions, as
stipulated in the Japanese Institute of Certified Public
Accountants (JICPA) Industry Committee Practical
Guidelines No. 24, March 17, 2022.
Foreign exchange rate risk hedging
With respect to hedge accounting for derivativetransactions used to hedge the risk of financial assets
and liabilities denominated in foreign currencies of thebanking subsidiaries, the Group applies deferral hedge
accounting, under which gains or losses on derivatives
are deferred until maturity of the hedged transactions, as
stipulated in the JICPA Industry Committee Practical
Guidelines No. 25, October 8, 2020. The Groupassesses the effectiveness of its currency swaps andforeign exchange swaps transactions, etc. entered into inorder to hedge the risk of fluctuation in foreign exchange
rates by comparing the foreign-currency amount of eachunderlying hedged item with the corresponding foreign
currency amount of the respective hedging instruments.
(19) Cash flows
In preparing the consolidated statement of cash flows,
cash and deposits with the Bank of Japan are considered
to be cash and cash equivalents.
(20) Application of the group tax sharing system
The Company and some of its consolidated subsidiaries
have adopted the group tax sharing system as stipulated
in the Corporation Tax Act (Act No. 34 of 1965).

(2)

2023/09/19 9:57

0161303263309_003.htm(21) Accounting principles and procedures adopted when
the provisions of relevant accounting standards, etc.
are unclear
Accounting treatment for gain (loss) on cancellation of
investment trusts
Gain (loss) on cancellation and redemption of investment
trusts is recorded as “Interest and dividends on
securities.” In cases where the total amount of profit
distribution, etc. from investment trusts during the period
is a loss, the amount is recorded as “Loss on redemptionof bonds.”(22) Significant accounting estimates
1. Valuation of loans and bills discounted(1) Amount recorded in the consolidated financial
statements for this fiscal year.
Millions of yen
2023
Reserve for possible loan losses¥

Of which, reserve for possible
loan losses considering theimpact of COVID-19¥
Of which, reserve for possible
loan losses considering therisk of downward shift withrespect
tosubstantiallyinterestfree and unsecured loans(hereinafter “zero-zero¥financing (*)”)

Thousandsof U.S.dollars
2023

2022

11,301 ¥ 14,865 $

84,632- ¥2,131 $-

1,203 ¥－$

9,009(*) “Zero-zero financing” refers to loans provided to businessborrowers whose performance deteriorated during COVID19 pandemic, with substantially no interest (for a certain
period), no collateral and reduced or exempted guarantee
fees, which allowed the borrowers to defer repayment of
the principal of loans for up to five years.

f each(2) Information for an understanding of the nature ofsignificant accounting estimates for the identified
items(i) Calculation method
Reserve for possible loan losses of the banking
subsidiaries is calculated by assessing theborrower classification based on the asset selfassessment standards and using a certain
calculation method according to the borrowerclassification as described in “Notes (Significant
Accounting Policies for Preparation ofConsolidated Financial Statements), 4.
Significant Accounting Policies, (4) Standards
for recognition of reserve for possible loan
losses. With regard to the borrowers requiringcaution except for those requiring special
caution (hereinafter “other borrowers requiringcaution”), the reserve for possible loan losses iscalculated by grouping them into two categories
based on their credit ratings (the lower ratingclassification which mainly consist to borrowers
with amended loan terms and the higher ratingclassification which consist of the remaining
borrowers).

2023/09/19 9:57

In addition, with regard to the borrowers ofzero-zero financing with deferred principal
repayments whose current borrowerclassification is either normal of the higher
rating classification within" other borrowers
requiring caution”, The Senshu Ikeda Bank,Ltd.
(the “Bank”) considered the risk of suchborrowers to move down to the lower ratingclassification within “other borrowers requiringcaution” upon their request of another deferralof principal repayment and an additional
allowance for possible loan losses wasrecorded at the end of this fiscal year as an
adjustment to the expected losses.
In prior years, in light of the sharp deteriorationof the economic environment due to the
COVID-19 pandemic, the Bank had provided areserve for possible loan losses based on the“deemed borrower classification” to reflect therisk of future downward shifts in the borrowerclassification.
However, in this fiscal year, since the pandemic
has transitioned to Class 5 and its impact on
the economic environment has diminished, theBank reversed the reserve for possible loan
losses which had been recorded based on the“deemed borrower classification”.
(ii) Key assumptions
The key assumption in determining theborrower classification for business loanborrowers with deteriorating businessconditions is the “Outlook for future businessperformance of borrowers”. “Outlook for futurebusiness performance of borrowers” isdetermined based on an individual assessmentof each borrower’s ability to earn a profit. Whilethe impact of the COVID-19 pandemic on theeconomic environment has been diminishing asa result of the easing of relevant regulations,
there is uncertainty in the future economic
environment which includes, but not limited to,the impact of supply chain disruptions andinflation which was triggered by the Russia’s
invasion of Ukraine and depreciation ofJapanese yen. These effects are taken into
account when determining the borrowerclassification of individual borrowers.
In addition, in adjusting the expected losses
with regard to the borrowers of zero-zerofinancing with deferred principal repayments
whose current borrower classification is either
normal or the higher rating classification within“other borrowers requiring caution”, the Bank
assume that the same level of downward shifts
as in the past in borrower classification or credit
rating will continue.
(iii) Impact on the consolidated financial statements
for the fiscal year ending March 31, 2024
Changes in the business performance ofborrowers and the success or failure of theirbusiness strategies could have a significant
impact on reserve for possible loan losses
stated in the consolidated financial statements
for the fiscal year ending March 31, 2024.

(1)

(2)

58

2023/09/19 9:57

0161303263309_003.htm

2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial
statements for the fiscal year ended March 31, 2023
Millions of yen
2023

2023

4,044 ¥

3,778 $

30,285(before offsetting with deferred tax
liabilities)¥

9,854 ¥

11,550 $73,796(2) Information for an understanding of the nature ofsignificant accounting estimates for the identified
items(i) Calculation method
Deferred tax assets are recognized to theextent that it is possible to reduce the future tax
burden due to deductible temporary differences
and tax losses carried forward as of March 31,
2023, based on the classification of companies
as stipulated by the “Implementation Guidanceon Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26, February 16, 2018).
The Group estimates taxable income before
adjusting temporary differences based on future
profitability.
In calculating future taxable income before
adjusting temporary differences for the banking
subsidiary, the earnings plan included in the
FY2023 Business Plan is adjusted to reflectearnings stress scenarios that take into accountfuture uncertainties, and tax adjustment items
that will arise in the future are added or
subtracted.
Since the Group has adopted the group tax
sharing system, it estimates the income of allcompanies applying the group tax sharing
system, in accordance with the “Practical
Solution on the Accounting and Disclosure
under the Group Tax Sharing System” (PITF
No.42, August 12, 2021, hereinafter “PITF No.
42”).
(ii) Key assumptions
The key assumptions used in estimating thetaxable income before adjusting temporary
differences of the banking subsidiary for the
future period during which estimates can bereasonably made (recoverable period) of five
years are as follows.
Net interest income

Fees and commissions

Credit cost

59

2022

¥

Deferred tax assets (net)ons,

Thousandsof U.S.dollars

Assume that the average value during therecoverable period will be 4.3% lower than
the actual average of the past five years,
taking into account the stress scenario in
the earnings plan included in the FY2023
Business Plan
Assume that the average value during therecoverable period will be 26.1% lower than
the actual average of the past five years,
taking into account the stress scenario in
the earnings plan included in the FY2023
Business Plan
The average value during the recoverable
period is assumed to be 0.1% of thebusiness loan balance for each year

2023/09/19 9:57

(iii) Impact on the consolidated financial statements
for the fiscal year ending March 31, 2024
If the assumptions used in the initial estimateschange due to changes in the future economic
environment, there may be a significant impact
on deferred tax assets stated in the
consolidated financial statements for the fiscal
year ending March 31, 2024.
If the assumptions for future taxable income
before adjusting temporary differences during
the recoverable period change as shown below
and the schedule for reversal of temporary
differences during the recoverable period
remains unchanged, the estimated amount of
impact (sensitivity) for the fiscal year ended
March 31, 2023, will be as follows.
Assumption

Expected change

Taxable income before
adjusting temporary
differences¥1,000 million
decrease each year
during the recoverable
periodIf

Impact amount(Sensitivity)
Approx. ¥300 million
in reversal of deferred
tax assets(23) Change in accounting policies
Application of the Implementation Guidance on
Accounting Standard for Fair Value Measurement
The Group has applied the “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, June 17, 2021, hereinafter “Fair Value
Measurement Guidance”) from the beginning of the fiscal
year. The Group has decided to apply the new
accounting policy prescribed under the Fair Value
Measurement Guidance prospectively, in accordancewith the transitional treatment prescribed underParagraph 27-2 of the Fair Value Measurement
Guidance. This change will have no impact on the
consolidated financial statements.
In accordance with Paragraph 27-3 of the Fair Value
Measurement Guidance, the notes regarding investment
trusts in the “Financial instruments and related
disclosures” note regarding the breakdown by level of thefair value of financial instruments, do not include thosefor the previous fiscal year.
(24) Change in accounting estimates(Change in estimating the reserve for possible loan
losses)Historically, the general reserve for possible loan lossesof The Senshu Ikeda Bank, Ltd.(the “Bank”), a
subsidiary, had been recorded based on the expected
losses primarily for the next year or the next three years
for the loans grouped in accordance with borrowerclassification.
However, as the first principal repayments of the zerozero financing become due, for the borrowers of zerozero financing with deferred principal repayments whose
current borrower classification is either normal or thehigher rating classification within “other borrowers
requiring caution”, it is expected that a certain
percentage of the borrowers would move down to thelower rating classification within “other borrowers
requiring caution” upon their request of another deferralof principal repayment. As the Bank believed that it wasnecessary to reflect such risk to the reserve for possible
loan losses, the Bank revisited our methodology for theestimate. As at the end of this fiscal year, the Bank
completed its analysis and ensured the readiness of
relevant data, and it enabled the Bank to calculate theexpected losses corresponding to the aforementioned
risk.

t

(25)

s

c

StocksBonds:

Other
Total

2023/09/19 9:57

0161303263309_003.htm

As a result, the Bank changed the estimation
methodology for expected losses whereby the Bank
group the historical “other borrowers requiring caution”
classification into two categories based on credit ratings(lower rating classification which mainly consist of
borrowers with amended loan terms and higher ratingclassification which consist of the remaining borrowers)
in estimating the expected losses.
In addition, with respect to the borrowers of zero-zerofinancing with deferred principal repayments whose
credit risk is expected to increase in the future, theimpact of the incremental risk is estimated and recorded
as an additional adjustment to the expected losses.
As a result of these changes in the method of estimates,
the general reserve for possible loan losses as of the endof this fiscal year increased by ¥877 million ($6,567
thousand), and ordinary income and income before taxes
decreased by ¥877 million ($6,567 thousand)respectively for this fiscal year.

lue(25) Additional information(Practical Solution on the Accounting and Disclosure
under the Group Tax Sharing System)
Starting from this fiscal year, the Company and some ofits consolidated subsidiaries have transitioned from theconsolidated taxation system to the group tax sharing
system. Accordingly, the accounting and disclosure ofcorporate tax, local corporate tax, and tax effectaccounting are in accordance with PITF No. 42.
Furthermore, in accordance with Paragraph 32 (1) of
PITF No. 42, the application of PITF No. 42 is considered
to have no impact of the change in accounting policy.

4. Trading account securities
There were no valuation gain or loss on trading accountsecurities included in income before income taxes and noncontrolling interests at March 31, 2023 and 2022,
respectively.

2023/09/19 9:57

The securities loaned under unsecured securities lendingtransactions are included in Government bonds andCorporate bonds under “Securities” in the amount of ¥40,203
million ($301,078 thousand) and ¥30,942 million at March 31,
2023 and 2022, respectively.
There were no held-to-maturity debt securities at March
31, 2023 and 2022.
There were no held-to-maturity debt securities soldduring the years ended March 31, 2023 and 2022.

March 31, 2023
Equity securities

Acquisition
cost

Carrying value¥

21,962¥Millions of yen¥

U.S. dollars

2023

2022

2023

27,882 ¥27,589 $208,807

Bonds:

10,743

Bonds:
Government bonds

43,20743,361

Local government bonds

115,278

116,155

Corporate bonds

198,189

201,384

Other

Subtotal

356,675

360,902

Total

94,83594,927

Other
¥

Total

473,473¥

Subtotal

466,572

Millions of yen
March 31, 2023
Equity securities

Difference¥

Unrealized
gain

Unrealized
loss

11,219 ¥

11,477 ¥

(258)

(154)

13

(167)

Bonds:
Government bonds
Local government bonds

Bonds:

(877)

2

(879)

Corporate bonds(3,195)

11(3,206)

Subtotal(4,226)27(4,254)

(92)

4,685

(4,777)

Other

6,900 ¥

16,190 ¥(9,289)

Total

Other
¥

Total

Subtotal

Millions of yen
Acquisition
cost

Carrying value¥

21,731¥

13,083

Bonds:

Thousands ofStocks

Total

Millions of yen

Equity securities

Securities at March 31, 2023 and 2022 consisted of thefollowing:

Subtotal
Other

Available-for-sale securities with fair value at March 31,
2023 and 2022 were as follows:

March 31, 2022

5. Securities

Bonds:

Government bonds

68,167

68,242

Local government bonds

130,055

130,547

Corporate bonds

227,449

228,221

Subtotal

425,672

427,011

188,797

185,983

Other
Total

¥

636,200¥

626,078

Bonds:

Subtotal
Other
Total

Bonds:

hose

Government bonds

43,207

68,167

323,575

Local government bonds

115,278130,055

863,311

Corporate bonds

198,189

227,449

1,484,228

102,427

194,995

767,071486,984 ¥648,256 $ 3,647,000

Other
Total

¥

Stocks in the above table include investments in affiliates of¥124 million ($928 thousand) and ¥90 million at March 31,
2023 and 2022, respectively.

Millions of yen
March 31, 2022
Equity securities

Difference¥

Unrealized
gain

Unrealized
loss

8,647 ¥

9,146 ¥

(499)

Government bonds

(75)

54

(129)

Local government bonds

(491)

3

(495)

Corporate bonds

(772)

54

(827)

Subtotal(1,339)113(1,452)

2,813

6,240

(3,426)

10,121 ¥

15,500 ¥(5,378)

Bonds:

Other
Total

¥

Bonds:

Subtotal
Other
Total

60

2023/09/19 9:57

0161303263309_003.htm

Thousands of U.S. dollars
March 31, 2023
Equity securities

Acquisition
cost

Carrying value$

164,472$

80,453

Bonds:
Government bonds

323,575

Local government bonds

863,311

869,879

Corporate bonds

1,484,228

1,508,155

Subtotal

2,671,122

2,702,778

Other324,728

710,214$

Total

3,545,817

710,903$3,494,136

Thousands of U.S. dollars
March 31, 2023

Difference

Unrealized
loss

84,018 $85,950 $(1,932)Government bonds(1,153)97(1,250)Local government bonds(6,567)14(6,582)

Corporate bonds(23,927)82(24,009)

Subtotal(31,648)202(31,858)(688)

35,085(35,774)

51,673 $121,246 $(69,564)

Equity securities$

Unrealized
gain

Bonds:
10,74343,361
116,155
201,384

Other

360,902

Total$

94,927
466,572

Available-for-sale securities sold during the years ended
March 31, 2023 and 2022 were as follows:
Millions of yen
2023

loss
(258)

Equity securities
Government bonds

(879)

Gain

2,631 ¥

273 ¥

(37)

78,594－(3,118)

Local government bonds

－

－

－

Corporate bonds

705

0

(12)

(4,254)

Subtotal

79,3000(3,130)106,644

1,547(8,502)

188,575 ¥

1,820 ¥

(11,670)

Other(9,289)Total¥

Millions of yen
2022
13,083
68,242
130,547
228,221427,011
185,983
626,078

Equity securities

Proceeds
from sales
¥

830 ¥

Gain

Loss

373 ¥

(25)

(499)
(129)
(495)
(827)
(1,452)(3,426)(5,378)61

6. Money Held in Trust

24,725

－

(330)

－

－

－

Corporate bonds

13,062

1(21)

Subtotal

37,7871(351)

74,60049(1,765)113,218 ¥424 ¥(2,143)Government bonds
Local government bonds

Other
Total

¥

2023
Equity securities

Proceeds
from sales$

19,703 $GainCarrying value

Valuation gain (loss) included inconsolidated statements of income¥

Local government bonds
Corporate bonds
Subtotal

Others
Total

c

Loss

2,044 $

(277)

588,586－(23,350)

－

－

－

5,279

0

(89)

593,874

0(23,440)

Other

798,651

11,585(63,671)

Total$ 1,412,229 $

13,629 $(87,396)

U.S. dollars

JICPA A

2023

2022

2023

15,010 ¥24,521 $112,409

10

17

74

There were no money held in trust owned for other purposes
at March 31, 2023 and 2022.

7. Net Unrealized Gain (Loss) on Availablefor-Sale Securitieso

Net unrealized gain (loss) on available-for-sale securities at
March 31, 2023 and 2022 consisted of the following:Thousands of
U.S. dollars

Millions of yen
2022
2023

2023

Differences between acquisition costand fair value:

Available-for-sale securities¥

Deferred tax liabilities
Differences between acquisition costand fair value, net of taxes

Amounts corresponding to
non-controlling interests

Bonds:
Government bonds

Overdrafts

Money held in trust at March 31, 2023 and 2022 consisted of
the following:
Money held in trust for trading purposes

Bonds:

Thousands of U.S. dollars
loss

Determining whether the fair value is “significantly declined” isbased on the fair value determined by the monthly average
market price during one month preceding the balance sheet
date declining by more than 50% or the criteria considering
the trend of the fair value during a certain past period andcredit risks of the issuers when the fair value determined by
the monthly average market price during one month
preceding the balance sheet date declined between 30% and
50% of the acquisition cost.

Loss(3,206)(4,777)

There were no losses on devaluation of securities for theyears ended March 31, 2023.

Thousands of

Bonds:(167)

Impairment losses on securities
Available-for-sale securities whose fair value significantly
declined from the acquisition cost are valued at fair value andlosses on devaluation of those securities are recognized in
the consolidated statement of operations unless the value isconsidered recoverable.

Millions of yen

Proceeds
from sales¥

2023/09/19 9:57

Net unrealized gain (loss) on available-forsale securities, net of taxes¥

6,966 ¥

10,224 $52,168(1,407)(2,616)(10,536)

5,558

7,608

41,623(-)(0)

5,558 ¥

7,607 $(-)
41,623

2023/09/19 9:57

0161303263309_003.htm

8. Loans and Bills Discounted and Risk
Monitored Loans
Loans and bills discounted:
Loans and bills discounted at March 31, 2023 and 2022
consisted of the following:Thousands of
U.S. dollars

Millions of yen
2022
2023
Bills discounted
Loans on bills
Loans on deeds
Overdrafts
OthersTotal

2023
112,409
74

¥

2023

7,909 ¥

8,245 $

59,23035,311

37,241

264,4424,464,618

4,243,404

33,435,317

229,184

214,944

1,716,348

169

-

1,265

¥ 4,737,192 ¥ 4,503,834 $ 35,476,611

Discounting of bills is accounted for as finance transactions
rather than as purchasing of bills in accordance with the
JICPA Industry Committee Practical Guidelines No. 24. The
Group has the right to sell or pledge such bills without any
restrictions. These include bankers acceptances bought,
commercial bills discounted, documentary bills and foreignexchange bills. The total face value of such outstanding bills
at March 31, 2023 and 2022 totaled ¥8,118 million ($60,795
thousand) and ¥8,487 million, respectively.
At March 31, 2023 and 2022, loans and bills discounted
included the portion of loans extended to original borrowers
based on loan participation agreements, as permitted by the
JICPA Accounting Committee Report No. 3, 28th November,
2014, in the amount of ¥9,705 million ($72,680 thousand) and¥7,973 million, respectively.
Contracts for overdraft facilities and loan commitments arecontracts under which the Group lends money to customers
up to their prescribed limits at the customers’request as longas there are no violations of any of the conditions in thecontracts. The aggregate unutilized balances within the limitsof these contracts totaled ¥736,931 million ($5,518,842
thousand) and ¥741,183 million at March 31, 2023 and 2022,
respectively, including the contracts whose contractual
periods were either less than one year or revocable at any
time, in the amount of ¥708,375 million ($5,304,987
thousand) and ¥721,415 million, respectively.

2023

52,168(10,536)
41,623(-)
41,6232023/09/19 9:57

Since many of these commitments expire without being fully
utilized, the unutilized amounts do not necessarily represent
future cash commitments. Most of these contracts include
provisions which stipulate that the consolidated subsidiaries
can reject customers’ requests or decrease the contract limits
for an appropriate reason, (for example, a change in financial
situation or a deterioration in customers’ creditworthiness).
At the inception of the contracts, the Group obtains collateralin the form of real estate, securities, and so forth, if deemednecessary. Subsequently, the Group, based on its internal
rules, performs periodic reviews of the customers’ businessresults and may take necessary measures such asreconsidering the terms of the contracts and/or requiring
additional collateral or guarantees.

Total

Risk monitored loans:
Risk monitored loans which were included in loans and bills
discounted at March 31, 2023 and 2022 consisted of thefollowing:Thousands ofMillions of yen
2023
Bankruptcy
claim

and

quasi-bankrupt¥

Doubtful claim
Loans past due for 3 months or more

Restructured loans
Total

¥

U.S. dollars

2022

2023

2,536 ¥

2,141 $

18,991

43,031

37,573322,257

166

86

1,243

3,021

4,685

22,62448,756 ¥44,486 $365,131

Bankruptcy and quasi-bankrupt claim represent the claim toborrowers who have been declared insolvent, on the groundsof the commencement of bankruptcy or rehabilitation
proceedings, filing for the proceedings or other similar legal
proceedings.

Other
Total

t

Doubtful claim represent the claim to borrowers who have notyet failed but their financial and business performances havedeteriorated, with a high possibility that the principal andinterest on these claim will not to be received.
Loans past due for 3 months or more represent loans on
which the payment of principal and/or interest has not been
received for three months or more from the due date, andwhich are not classified as “bankruptcy and quasi-bankrupt
claim” or “doubtful claim.”
Restructured loans are loans which have been restructured tosupport the rehabilitation of borrowers who are encountering
financial difficulties, with the intention of ensuring the recoveryof the loans by providing more flexible repayment terms forthe borrowers (such as reducing the rate of interest or
suspending the payment of principal/interest, etc.) or loans
which are not classified in any of the above categories.

Securities
Loans

3

The amounts presented in the table above are stated before
the provision of specific loan loss reserves.
Deposits

62

2023/09/19 9:57

0161303263309_003.htm

9. Foreign Exchange Assets

13. Deposits

Foreign exchange assets at March 31, 2023 and 2022
consisted of the following:Thousands of
U.S. dollars

Millions of yen
2023
¥

$

5,428 ¥

6,981

192

224

1,437

Foreign bills of exchange receivable

235

300

1,759

5,856 ¥

7,506

¥

Total

$

40,65043,855322,257¥2023

22,210 $168,973

Other receivables

23,356

19,983

174,912

Accrued income

2,836

4,155

21,238Prepaid expenses
Other
¥

2023

246,680 $245,968 ¥

1,842,042

3,457,033

3,335,508

25,889,560

Savings deposits

23,84723,983

178,589

Deposits at notice

12,33018,12892,3381,814,031

1,885,008

13,585,194

26,04047,9402

195,012¥ 5,579,250 ¥ 5,557,248 $

41,782,745

2024
2025

22,563 ¥Total¥

U.S. dollars

Ordinary deposits

Total

Thousands of
U.S. dollars

Millions of yen
2022
2023

18,991

Current deposits

Other deposits

Other assets at March 31, 2023 and 2022 consisted of thefollowing:

2023

Thousands ofMillions of yen
2022
2023

Time deposits

10. Other Assets

Investment in leased assets

Deposits at March 31, 2023 and 2022 consisted of thefollowing:

2023

2022

Foreign bills of exchange bought

Due from foreign correspondent banks

2023/09/19 9:57

706

725

5,287

32,96529,248

246,873

82,428 ¥76,322 $617,2992026

14. Borrowed Money

2027

Borrowed money at March 31, 2023 and 2022 consisted ofborrowings from the Bank of Japan and certain other financial
institutions.

2028
Total

The average interest rate applicable to borrowed money atMarch 31, 2023 and 2022 were 0.00%.

1,243
22,624365,131

11. Tangible Fixed Assets
At March 31, 2023 and 2022, accumulated depreciation of
tangible fixed assets were ¥57,239 million ($428,660
thousand) and ¥55,459 million, respectively.
Under the Tax Act, capital gains arising from the exchange orreplacement of assets under certain conditions are permitted
to be deducted from the cost of tangible fixed assets in orderto obtain certain tax benefits. The amount deducted from thecost of tangible fixed assets at March 31, 2023 and 2022
were ¥371 million ($2,778 thousand) and ¥372 million,
respectively.

12. Assets Pledged

Thousands of
U.S. dollars

Millions of yen
2022

Securities

¥

Loans
Other assets

283,562 ¥2,036,538

739

912

5,534

Thousands of
U.S. dollars

Millions of yen

Payables under securities
lending transactions
Borrowed money
Other liabilities

¥

2023

2022

3,281 ¥

4,239 $

24,571

4,371

84,792

32,734

329,515

1,072,295

2,467,722

51

45

381

At March 31, 2023 and 2022, guarantee deposits of ¥3,647
million ($27,312 thousand) and ¥3,801 million, collateralmoney deposited for financial instruments of ¥2,167 million($16,228 thousand) and ¥392 million and margins for Central
Counter Party of ¥20,000 million ($149,779 thousand) and¥20,000 million were included in “Other assets”, respectively.

63

¥

$

127,524

955,0212025

65,295488,991

2026

34,943

261,6862027

110,926

830,719

2028

209

1,565

Total

¥

$

338,8992,537,998

Foreign exchange liabilities at March 31, 2023 and 2022
consisted of the following:Thousands ofMillions of yen

294,017 $ 2,123,582
1,170,517

The liabilities secured by the above pledged assets at March
31, 2023 and 2022 consisted of the following:

Deposits

2024

Thousands of
U.S. dollars

Millions of yen

2023

271,939

2023

Year ending March 31,

p
plan.

15. Foreign Exchange Liabilities

Assets pledged as collateral at March 31, 2023 and 2022
consisted of the following:
2023

The aggregate annual maturities of borrowed money
subsequent to March 31, 2023 were summarized as follows:

2023
Foreign bills sold¥

Foreign bills of exchange payable
Total

¥

U.S. dollars

C

2023

2022
94 ¥

168 $

220

134

1,647

314 ¥

302 $

2,351

703

(1)

16. Other Liabilities
Other liabilities at March 31, 2023 and 2022 consisted of thefollowing:Thousands ofMillions of yen
2023
Accrued expenses¥

Unearned income
Accrued income taxes
Other
Total

¥

2022

U.S. dollars

2023

2,101 ¥

2,245 $

15,734

13,733

15,408102,845

861

1,036

6,447

39,677

37,179297,139

56,374 ¥55,870 $422,182

Other2023/09/19 9:57

0161303263309_003.htm

The amounts of lease obligations included in “Other” were
¥4 million ($29 thousand) and ¥7 million at March 31, 2023
and 2022, respectively. The average interest rates on leaseobligations at March 31, 2023 with maturity dates on or before
and subsequent to March 31, 2024 were 3.00%.The averageinterest rates on lease obligations at March 31, 2022 withmaturity dates on or before and subsequent to March 31,
2023 were 3.00%.
92,338The aggregate annual maturities of lease obligations
subsequent to March 31, 2023 were summarized as follows:Year ending March 31,
2024

Thousands of
U.S. dollars

Millions of yen
¥

$

2

14

2025

1

7

2026

1

7

2027

-

-

2028

-

-

2029 and thereafter

-

Total

¥

$

4

261,686
830,719
1,565

2023
703
1,647
2,351

The consolidated subsidiaries have adopted funded defined
benefit plans to cover the payment of retirement benefits toemployees.
As for the defined benefit pension plans (funded) of theconsolidated subsidiaries, lump-sum benefits or pensions areprovided depending on the service years, etc. Retirement
benefit trust is established for the defined benefit pension
plan.

6,447
422,182

9,009

Actuarial gain or loss incurred
during the year

656

99

4,912

Contributions from employer

125

325

936

Payment of retirement benefits(1,812)(1,515)(13,569)

59,486 ¥59,313 $445,487¥

U.S. dollars

2022

2023

36,053 ¥35,928 $269,999

Service cost

1,008

1,009

7,548

Interest cost

138

138

1,033

Actuarial gain or loss incurred
during the year

318

490

2,381

Payment of retirement benefits(1,828)(1,527)(13,689)

12

12

89

35,702 ¥36,053 $Other
Retirement benefit obligation at
end of the year

¥

¥

Total

(6)

(3) Reconciliation of the ending balance of retirement
benefit obligation and pension plan assets to theconsolidated balance sheet amounts of net defined
benefit liability and asset
Thousands ofMillions of yen
2022
2023
¥

Pension plan assets
Unfunded retirement benefit
obligation
Net amount of liability andasset on consolidatedbalance sheets¥

U.S. dollars

2023

cost

35,558 ¥35,911 $266,292(59,486)(59,313)(445,487)(23,928)(23,402)(179,195)

144

141

1,078

(23,784) ¥

loss
Total

(7)

(23,260) $ (178,117)
Bonds
Thousands of
U.S. dollars

Millions of yen
2023
Net defined benefit liability¥

Net defined benefit asset

Interest cost

2023

297,139444,1921,149(1) Reconciliation of the beginning balance to theending balance of retirement benefit obligation

Retirement benefit obligation at
beginning of the year

102,845

59,254 $1,203

Net amount of liability and asset
on consolidated balance
sheetsMillions of yen

15,73459,313 ¥Pension plan assets at end of
the year¥

2023

Expected return on plan assets

As for lump-sum payment plans of the consolidated
subsidiaries (which are unfunded plans, but after theestablishment of retirement benefit trust scheme, havebecome funded plans), lump-sum payments are made as
retirement benefits depending on the service years, etc.
Certain consolidated subsidiaries have adopted lump-sum
payment plans (all unfunded) as defined benefit plans, where
net defined benefit liability and retirement benefit expenses
are calculated by the simplified method.

Thousands of2023

Pension plan assets at
beginning of the year

(5)

Thousands of
U.S. dollars

Millions of yen
2022
2023

Funded retirement benefit
obligation

Outline of the retirement benefit plan adopted by the Group488,991(2) Reconciliation of the beginning balance to theending balance of pension plan assets

29

17. Retirement Benefit Plans

955,0212023/09/19 9:57

2023

2022
141 $

144 ¥

Stocks

1,078(23,928)(23,402)(179,195)(23,784) ¥(23,260) $ (178,117)

Others
Total

¥

Note:

(4) Retirement benefit expenses consisted of thefollowing:w

Thousands ofMillions of yen

2023

1,008 ¥

1,009 $

7,548

138

138

1,033

Expected return on plan
assets(1,203)(1,149)(9,009)Amortization of actuarial loss

(1,234)(1,395)(9,241)

Amortization of prior service
cost

(131)

(262)

(981)

1

2

7

(1,420) ¥(1,655) $Service cost

Other
Net periodic retirement
benefit expenses fordefined benefit pension
plans

¥

U.S. dollars

2022

2023

¥

t
(8)

(10,634)
assets267,37064

2023/09/19 9:57

0161303263309_003.htm

18. Asset Retirement Obligations(5) Remeasurements of defined benefit plans included
in other comprehensive income
Remeasurements of defined benefit plans included inother comprehensive income (before related tax effects)
consisted of the following:

2023

Thousands of

444,192

Millions of yen
2022
2023

9,009
4,912
936
(13,569)
445,487

Notes concerning asset retirement obligations are omitted
due to lack of significance of its total amount.

Prior service cost¥

Actuarial gain or loss
¥

Total

(1,028) ¥2023(262) $(131) ¥
(897)

U.S. dollars(981)(1,786)(6,717)(2,084) $(7,698)(6) Remeasurements of defined benefit plans includedin accumulated other comprehensive income
Remeasurements of defined benefit plans included inaccumulated other comprehensive income (before
related tax effects) consisted of the following:
Millions of yen

2023

Unrecognized prior service
cost

266,292

Unrecognized actuarial gain or
loss(445,487)(179,195)
1,078

¥

Total

1,078
(179,195)2023(131) $

- ¥-(8,289)(9,186)(62,075)(8,289) ¥(9,317) $(62,075)(7) Matters related to pension plan assets
1) Ratio of the main components in the total pension plan
assets were as follows:
2023(178,117)

2023¥

U.S. dollars

2022

2022

Bonds

14%

14%

Stocks59%

59%

Short-term investment fundincluding cash and deposits

6%6%Life insurance company
general accounts

4%4%

Others

17%

17%

Total

100%

100%

(178,117)

Note:
Total pension plan assets included retirement benefit trust ofwhich securities were contributed for the pension plan, which
accounts for 41% and 39% of the total at March 31, 2023 and2022, respectively.
2023
7,548
1,033
(9,009)(9,241)(981)
72) Setting of long-term expected rates of return on plan
assetsFor the purpose of determining the long-term expected
return on plan assets, the present and anticipatedallocation of plan assets and the present and expectedlong-term rates of return on various assets composing
the plan assets are taken into account.

65

Japanese banks, including the Company, are required tocomply with the Banking Act and the Act. The Act stipulates
that neither additional paid-in capital nor the legal reserve isavailable for dividends, but that both may be used to reduceor eliminate a deficit. Under the Banking Act, an amountwhich is at least equal to 20% of the aggregate amount ofcash dividends and certain appropriations of retained
earnings associated with cash outlays applicable to eachfiscal period is to be appropriated to the legal reserve until theaggregate amount of the legal reserve and the capital surplus
account equals 100% of the amount of share capital. The Act
also provides that if the aggregate amount of additional paidin capital and the legal reserve exceeds 100% of the amountof share capital, the excess may be distributed to theshareholders either as a return of capital or as dividends
subject to the approval of the shareholders.
The maximum amount which the Company can distribute as
dividends is calculated based on the non-consolidated
financial statements of the Company and in accordance with
the Act.
(1) Class and number of shares issued and treasury
stock
Movements in common stock, first series of seventhclass preferred stock and treasury stock during the years
ended March 31, 2023 and 2022 were summarized asfollows:
Number of shares (in thousands)

Year ended March
31, 2023(8) The assumptions used for actuarial calculations
Discount rate

Common stock
First series of seventh-class

Total

Note

281,008––

25,000–25,000306,008–

25,000281,008– 1
281,008

Treasury stock:2022

0.00%-0.65%

March 31,
1st April,
2023
2022
Increase Decrease

Outstanding shares:

preferred stock2023(10,634)

Contingent liabilities for guarantee of corporate bonds
included in “Securities,” which were issued by private
placement (Article 2, Paragraph 3 of the Financial
Instruments and Exchange Act of Japan) amounted to¥23,467 million ($175,743 thousand) and ¥26,019 million atMarch 31, 2023 and 2022, respectively.

20. Shareholders’ Equity

Thousands of2023

19. Contingent Liabilities

0.00%-0.65%

Expected rate of return on plan
assets2.5%

2.5%

Expected rate of salary increase

1.73%-3.91%

1.73%-3.88%

Common stock
First series of seventh-classpreferred stock

Total

716

1

50

–

25,00025,000716

25,001

25,050667 2 and 3– 4 and 5667

2023/09/19 9:57

0161303263309_003.htm

Notes:
1. Decrease in outstanding shares of First series of seventh-classpreferred stock (25,000 thousand shares) was due toretirement of treasury stock.
2. Increase in treasury stock of common stock (1 thousand
shares) was due to acquisition of shares from the shareholders
who owned fractional shares less than one unit (1 thousand
shares).
3. Decrease in treasury stock of common stock (50 thousand
shares) consisted of transfers due to exercise of stock option(50 thousand shares) .
4. Increase in treasury stock of First series of seventh-classpreferred stock (25,000 thousand shares) was due to purchaseof treasury stock based on resolution of the Board of Directors.
5. Decrease in treasury stock of First series of seventh-classpreferred stock (25,000 thousand shares) was due toretirement of treasury stock based on resolution of the Board of
Directors.

Number of shares (in thousands)
Year ended March
31, 2022

March 31,
1st April,
2022
2021
Increase Decrease

Note

Outstanding shares:

Common stock
First series of seventh-class

281,008––

281,008

25,000––25,000306,008––

306,008

Common stock

804

1

89

716 1 and 2

Total

804

1

89

716

preferred stock

Total
Treasury stock:

The stock option outstanding at March 31, 2023 was asfollows:
Date of resolution

Persons granted(2) Stock subscription rights
The Company resolved to grant stock subscription rights(stock option) to certain directors, executive officers andcertain directors and executive officers of its subsidiaries
at the Board of Directors’ meeting held on, July 27, 2022,
July 30, 2021, July 31, 2020, July 30, 2019, July 31,
2018, July 31, 2017, July 27, 2016, July 29, 2015, July30, 2014, July 31, 2013, August 31, 2012, July 28, 2011
and February 24, 2011.
The balance of stock subscription rights granted for stock
option program were ¥116 million ($868 thousand) and¥86 million at March 31, 2023 and 2022, respectively.
Stock option related expenses for the years ended March
31, 2023 and 2022 amounted to ¥39 million ($292
thousand) and ¥29 million, respectively.

February 24, 2011

Directors of thesubsidiaries:

July 28, 2011

Directors of the22
subsidiaries:

16

Executive officers of
the subsidiaries: 19

Executive officers of
the subsidiaries: 18

Number of stock option
by type of shares (*)

Common stock:

Common stock:

Date of grant

March 15, 2011

August 31, 2011

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom March 15, 2011 to
the date of retirement

From August 31, 2011 to
the date of retirement

Exercise period

From March 16, 2011
to July 31, 2041

From September 1,
2011 to July 31, 2041

Date of resolution
Persons granted

84,780August 31, 2012
Directors of thesubsidiaries:

72,76010

Executive officers of
the subsidiaries: 16

Number of stock option
by type of shares (*)

Common stock:

Common stock:

Date of grant

October 1, 2012

September 2, 2013

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom October 1, 2012 to

From September 2, 2013

the date of retirement

to the date of retirement

Exercise period

From October 2, 2012
to July 31, 2042

From September 3,2013 to July 31, 2043

Persons granted

69,500July 30, 2014
Directors of thesubsidiaries:

53,80010

Executive officers of
the subsidiaries: 14

Number of stock option
by type of shares (*)

Common stock:

Common stock:

Date of grantAugust 28, 2014

September 1, 2015

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom August 28, 2014 to

From September 1, 2015

the date of retirement

to the date of retirement

Exercise period

From August 29, 2014
to July 31, 2044

From September 2, 2015
to July 31, 2045

Date of resolution

periodJuly 29, 2015
Directors of the10
subsidiaries:

Executive officers of
the subsidiaries: 15

Persons granted

periodJuly 31, 2013
Directors of the10
subsidiaries:

Executive officers of
the subsidiaries: 16

Date of resolution

Notes:
1. Increase in treasury stock of common stock (1 thousand
shares) was due to acquisition of shares from the shareholders
who owned fractional shares less than one unit (1 thousand
shares).
2. Decrease in treasury stock of common stock (89 thousand
shares) consisted of transfers due to exercise of stock option(89 thousand shares) .

2023/09/19 9:57

55,900July 27, 2016
Directors of thesubsidiaries:

51,800periodJuly 31, 2017
Directors of the
8
subsidiaries:

8

Executive officers of
the subsidiaries: 17

Executive officers of
the subsidiaries: 20

Number of stock option
by type of shares (*)

Common stock:

Common stock:

Date of grantAugust 30, 2016

August 31, 2017

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom August 30, 2016 to

From August 31, 2017 to

the date of retirement

the date of retirement

Exercise period

From August 31, 2016
to July 31, 2046

From September 1,2017
to July 31, 2047

94,80083,10066

2023/09/19 9:57

Date of resolution
Persons granted

16
18
72,760Date of grantAugust 30, 2018

August 28, 2019

Vesting conditions

To exercise within 10
days after retirement

To exercise within 10
days after retirement

Applicable service
periodFrom August 30, 2018 to

From the August 28, 2019

the date of retirement

to the date for retirement

Exercise period

From August 31, 2018
to July 31, 2048

From the August 29,
2019 to July 31, 204947
7Number of stock option
by type of shares (*)

Common stock:
Common stock:156,300
254,900

Date of grantAugust 28, 2020

August 27, 2021

Vesting conditions

To exercise within 10
days after retirement

To exercise within 1
year after retirement

Applicable service
periodFrom the August 28, 2020

From the August 27, 2021

to the date for retirement

to the date for retirement

Exercise period

From the August 31,
2020 to July 31, 2050

From the August 30,
2021 to July 31, 2051

10
1483,100July 30, 2021
Directors:
7 Executive officers:

Executive officers of
the subsidiaries: 16

Date of resolution

20

July 31, 2020

Executive officers of
Directors of thethe subsidiaries: 17
subsidiaries:

Persons granted

8

Executive officers of
the subsidiaries: 18

Common stock:
58,500117,400

10

51,8006

Common stock:

Directors of thesubsidiaries:

July 27, 2022
Directors:
Executive officers:

5
6

Directors of thesubsidiaries:

7

Executive officers of
the subsidiaries: 19
Number of stock option
by type of shares (*)

Common stock:
216,800

Date of grantAugust 30, 2022

Vesting conditions

To exercise within 1
year after retirement

Applicable service
periodFrom the August 30, 2022

Exercise period

From the August 31,
2022 to July 31, 2052

2023/09/19 9:57

The stock option activity is as follows:

July 30, 2019
Directors of the
6
subsidiaries:

Number of stock option
by type of shares (*)

Date of resolution

53,800July 31, 2018
Directors of thesubsidiaries:

Executive officers of
the subsidiaries: 18

Persons granted

160161303263309_003.htm

to the date for retirement(*) The number of stock options is converted into the numberof shares after the one-for-five reverse stock split ofcommon stock on August 1, 2012.

Date ofresolution

February
24,
2011

July
28,
2011

August
31,
2012

July
31,
2013

July
30,
2014

Date ofresolution

Non-vested:
March 31, 2022Outstanding

1,100

1,240

1,700

3,800

6,800

Granted

–

–

–

–

–

Forfeited

–

–

–

–

–

Vested

–

–

–

–

1,300

1,100

1,240

1,700

3,800

5,500

–

–

–

–

–

Vested

–

–

–

–

1,300

Exercised

–

–

–

–

1,300

Forfeited

–

–

–

–

–

March 31, 2023Outstanding

–

–

–

–

–

March 31, 2023Outstanding
Vested:March 31, 2022Outstanding

Date ofresolution

July
29,
2015

July
27,
2016

July
31,
2017

July
31,
2018

6,400

21,00024,80032,10065,300

–

–

–

–

–

GrantedForfeited

–

–

–

–

–

1,200

3,400

2,800

2,600

5,200

5,200

17,60022,00029,50060,100

–

–

–

–

–

Vested

1,200

3,400

2,800

2,600

5,200

Exercised

1,200

3,400

2,800

2,600

5,200

Forfeited

–

–

–

–

–

March 31, 2023Outstanding

–

–

–

–

–

VestedMarch 31, 2023Outstanding
Vested:March 31, 2022Outstanding

Date ofresolution

GrantedForfeited

July
30,
2021

July
27,
2022

121,300

254,900–––

218,600–––

16,500–103,800

238,400

218,600–––

Vested17,50016,500–Exercised

17,50016,500–Forfeited–––

March 31, 2023Outstanding

–

–

–

March 31, 2023Outstanding
Vested:March 31, 2022Outstanding(*) The number of stock options is converted into the numberof shares after the one-for-five reverse stock split ofcommon stock on August 1, 2012.

67

Date ofresolution
Exercise
price
price at
exercise

Date ofresolution
Exercise
price
price at
exercise
Fair value
price atDate ofresolution
Exercise
price

Fair value
price at17,500

VestedFair value
price atprice at
exercise

July
31,
2020

Non-vested:
March 31, 2022Outstanding

price at
exercise

Fair value
price at

July
30,
2019

Non-vested:
March 31, 2022Outstanding

Exercise
price

Note:

2023/09/19 9:57

0161303263309_003.htm

Price information is as follows:
July
30,
2014

Date ofresolution

6,800
–
–
1,300
5,500

–
1,300
1,300
–
–
July
30,
2019
65,300––5,200
60,100

–
5,200
5,200
–
–

July
28,
2011

February
24,

2011

August
31,
2012

July
31,
2013

July
30,
2014

July
29,
2015

Exercise
price

¥

1 ¥

1 ¥

1 ¥

1 ¥

1 ¥

1

Average stock
price at
exercise

¥

– ¥

– ¥

– ¥

– ¥

198 ¥

198

The method for estimating the fair value price of 2022 stock
option granted in the year ended March 31, 2023 were as
follows:
Measurement method: Black-Scholes model
Major fundamental factors and assumptions used to measurefair value
Date of resolution

July 27,2022

Volatility of stock price *1

Fair value
price atgrant date¥

Date ofresolution

July
27,
2016

Exercise
price

¥

1 ¥

1

Average stock
price at
exercise¥ 198 ¥ 198 ¥ 198 ¥ 198 ¥ 198 ¥ 198 ¥–Fair value
price atgrant date

¥ 410 ¥ 353 ¥ 325 ¥ 140 ¥ 132 ¥ 133 ¥ 191

Date ofresolution

February
24,
2011

Exercise
price$0.00 $

0.00 $

0.00 $

0.00 $

0.00 $ 0.00

Average stock
price at
exercise

$

– $

– $

– $

– $

1.48 $ 1.48

Fair value
price atgrant date$

3.66 $

4.00 $

3.66 $

3.22 $

3.72 $ 3.54

Date ofresolution

July
27,
2016

July
30,
2019

July
31,
2020

July
30,
2021

Exercise
price$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00

Average stock
price at
exercise$ 1.48 $ 1.48 $ 1.48 $ 1.48 $ 1.48 $ 1.48 $Fair value
price atgrant date

2023/09/19 9:57

490 ¥

535 ¥

July
31,
2017

1 ¥

July
31,
2018

1 ¥

July
28,
2011

July
31,
2017

449 ¥

430 ¥

497 ¥

July
30,
2019

July
31,
2020

July
30,
2021

1 ¥

1 ¥

August
31,
2012

July
31,
2018

1 ¥

July
31,
2013

July
30,
2014

474

July
27,
2022

July
29,
2015

July
27,
2022

－

30.324%

Estimated remaining outstanding period *2
Estimated dividend *3

4.464%

Interest rate with risk free *4(0.061%)*1 Actual stock price during the period (from March 27, 2019
to August 30, 2022) corresponding to the estimatedremaining outstanding period*2 For each director or executive officer in office, thedifference between “the average term of office of retired
directors or executive officers” and “the years in office ofthe director or executive officer at the time stock options
were granted” was calculated, and if said difference wasless than 0.8 years, the average of the estimatedremaining outstanding period was calculated using 0.8
years, by taking into account the period remaining to thenext annual shareholders’ meeting.
*3 ¥10 ($0.07) of latest annual dividend /¥224 ($1.67) of stock
price on the base date
*4 Yield of Japanese government bonds approximating theestimated remaining outstanding period
In estimating the vested number of stock options, theCompany basically reflects only the actual forfeited number,since it is difficult to make a reasonable estimate on the future
forfeited number.

Other
Total

Other
Total

Note:

s

31, 2023

21. Other Ordinary Income
Other ordinary income for the years ended March 31, 2023
and 2022 consisted of the following:

2022

Thousands of$ 3.07 $ 2.64 $ 2.43 $ 1.04 $ 0.98 $ 0.99 $ 1.43

Note:
The impact of the one-for-five reverse stock split of common
stock on August 1, 2012 is taken into consideration.

3.427 years

Millions of yen
2022

U.S. dollars

2023

2023

Gain on sales of securities andtrading account securities
Other

¥

2,202 ¥
1,422

1,526 $
727

16,49010,649Total¥

3,625 ¥

2,253 $

27,147

22. Other Income
Other income for the years ended March 31, 2023 and 2022
consisted of the following:Thousands ofMillions of yen
2023

812 $

Gain on money held in trust

53

33

396

13,54913,012

101,467

13,920 ¥13,858 $104,246¥First series ofType ofstock
Common
stock

2023

317 ¥

Total

Commonstock

U.S. dollars

2022

Gain on sales of equity securities ¥OtherType of
stock

2,373

68

2023/09/19 9:57

23. Other Ordinary Expenses
Other ordinary expenses for the years ended March 31, 2023
and 2022 consisted of the following:Thousands ofMillions of yen
2023
Loss on sales of debt securities
30.324%

11,632 ¥¥11,632 ¥Other

2,117 $-

Total

Source ofdividends

Types of stock

Dividend amount

87,111

3-

2,120 $

87,111

Record dateMillionsof yenTypes of stock
Common stock¥

June 28, 2023

Dividends per share

Thousands of
U.S. dollars

1,401 $

Yen

10,492 ¥U.S. dollars

5.00 $

0.03

24. Other Expenses

Cash dividends paid during the fiscal year ended March
31, 2022

Other expenses for the years ended March 31, 2023 and2022 consisted of the following:

Resolution by annual shareholders’ meeting on June 23,
2021

Thousands ofMillions of yen
2022
2023
Write-offs of loans and bills discounted ¥U.S. dollars

2023

1,484 ¥

1,359 $

11,113

Loss on sales of equity securities

71

26

531

Loss on devaluation of equity securities

64

92

479

Loss on money held in trust
Other
¥

Total

41

98

307

12,83911,91496,15014,500 ¥13,491 $108,589a.

Effective date

Retained earnings March 31, 2023

2023

2022

¥

Cash dividends with record dates falling in the fiscal year
ended March 31, 2023 and effective dates coming after
the end of the fiscal year
Common stock

U.S. dollars

4.464%(0.061%)2023/09/19 9:57

0161303263309_003.htm

b.

Dividend amount Dividends per share
Type ofstock

Recorddate

Effective Millions
dateof yenCommonstock

March 31,2021

June 24,¥2021

First series ofseventh-classpreferred stock

March 31,

June 24,

2021

2021

¥

Thousands of

Yen

U.S. dollars

U.S.
dollars

2024
Total

1,050 $

8,579 ¥

3.75 $

0.03

375 $

3,063 ¥

15.00 $

0.12

Resolution by Board of Directors on November 11, 2021

Dividend amount Dividends per share

Note:“Other”for the year ended March 31, 2023 and 2022 includes¥140 million ($1,048 thousand) and ¥8 million of one-timecosts associated with branch relocations based on afundamental review of branch functions at the banking
subsidiary, The Senshu Ikeda Bank,Ltd.
ture

25. Dividends
Cash dividends paid during the fiscal year ended March
31, 2023
Resolution by annual shareholders’ meeting on June 28,
2022

Type ofstock

Recorddate

Effective
date

September 30,
2021

December 1,
2021¥

1,051 $

8,587 ¥

3.75 $

0.03

First series of
September 30,
seventh-class2021
preferred stock

December 1,
2021

¥

375 $

3,063 ¥

15.00 $

0.12

Commonstock

2023
16,49010,64927,147

Recorddate

Effective Millions
dateof yenCommonstock

March 31,

June 29,

2022

2022

First series ofseventh-classpreferred stock

March 31,2022¥

June 29,¥
2022

Thousands of
U.S. dollars

1,751 $ 13,113 ¥375 $2,808 ¥

Yen

U.S.
dollars

6.25 $

0.04

15.00 $

0.11

Dividend amount Dividends per share

Commonstock

Recorddate

Effective
date

September 30,
2022

December 1,
2022

Millionsof yen¥Thousands of
U.S. dollars

1,401 $ 10,492 ¥Yen
5.00 $

Source ofdividends

Types of stock

Record date

Retained earnings March 31, 2022

June 29, 2022

First series of seventh-classpreferred stock

Retained earnings March 31, 2022

June 29, 2022

Dividend amountMillionsof yenTypes of stockThousands of
U.S. dollars

104,246

Dividends per share
Yen

U.S. dollars

Common stock¥

1,751 $

14,306 ¥6.25 $

0.05

First series of seventh-classpreferred stock

¥

375 $

3,063 ¥

15.00 $

0.12
Other

U.S.
dollars
0.03

A reconciliation of cash and due from banks in theaccompanying consolidated balance sheets to cash and cash
equivalents in the accompanying consolidated statements ofcash flows at March 31, 2023 and 2022 were summarized asfollows:
Thousands ofMillions of yen
2022
2023

2,373
101,4672

Effective dateCommon stock

2023
396

Yen

U.S. dollars

26. Cash and Cash Equivalents

Resolution by Board of Directors on November 11, 2022
Type ofstock

U.S.
dollars

Thousands ofCash dividends with record dates falling in the fiscal year
ended March 31, 2022 and effective dates coming after
the end of the fiscal year

Dividend amount Dividends per share
Type ofstock

Millionsof yenU.S. dollars

2023

Cash and due from banks
Deposits other than deposits
with the Bank of Japan

¥

821,649 ¥ 1,723,186 $ 6,153,291

Cash and cash equivalents¥

815,323 ¥ 1,712,443 $ 6,105,916(6,326)(10,743)(47,375)

Other

69

2023/09/19 9:57

0161303263309_003.htm

27. Leasesa.

Notes:
1.Valuation allowance decreased by ¥1,119 million ($8,380
thousand), mainly due to the decrease of valuation allowancefor tax loss carryforward.
2.Tax loss carryforwards and deferred tax assets by expiration ofcarryforward are as follows:

Finance leases
As Lessee
Information on finance leases is omitted due to lack ofsignificance.

0.03

b.

Fiscal year ended March 31, 2023
Millions of yen

Operating leases
As LesseeYear ending March 31
2024

$

0.03

Total

$

0.12

U.S.
dollars
$

0.03

$

0.12

Thousands of
U.S. dollars

Millions of yen¥

855

2025 and thereafter

$

6,403

4,781
¥

5,636

$

28. Income Taxes
Income taxes applicable to the Company and its domestic
subsidiaries comprise corporate tax, inhabitants’ taxes andenterprise tax which, in the aggregate, resulted in a statutory
tax rate of 30.6% for the years ended March 31, 2023 and2022, respectively.
The tax effect of temporary differences which gave rise tosignificant portions of the deferred tax assets and liabilities at
March 31, 2023 and 2022 consisted of the following:Thousands of
U.S. dollars

2023

8,660 ¥

9,945 $

64,854

Tax loss carryforwards

3,545

4,555

26,548Loss on devaluation of securities

2,787

2,739

20,871

Provision for employees’ bonuses

530

769

3,969

Depreciation

503

516

3,766

Impairment loss

105

102

786

Net defined benefit liability

49

48

0
2,883
19,067

Reserve for possible loan losses¥

Net unrealized loss on available-forsale securities

Other
Gross deferred tax assets(47,375)

years
throughthree years

years
throughfour years

years
throughfive years

–

2,364

–

35

–

1,145

3,545

Valuation
allowance

–

(368)

–

–

–

(221)

(590)

Deferred tax
assets

–

1,996

–

35

–

923 (*2)2,955

One
year orless

After oneyear
through
two years

After two After three
years
years
throughthroughthree years four years

After four
years
throughfive years

After
five
years

Total

Tax losscarryforwards(*1)–

17,703

–

262

–

8,574

26,548Valuation
allowance–(2,755)–––(1,655)(4,418)Deferred tax
assets–14,947–262–

6,912 (*2)22,129

Total

carryforwards(*1)

Thousands of U.S. dollars(*1) Amounts of tax loss carryforwards are multiplied by thestatutory tax rate.
(*2) Deferred tax assets of ¥2,955 million ($22,129 thousand)are recorded for tax loss carryforward of ¥3,545 million($26,548 thousand). This tax loss carryforward is deemed
to be recoverable as it is expected that there will betaxable income in the future.
A reconciliation of the statutory tax rate to the effective tax
rate for the years ended March 31, 2023 and 2022 were as
follows:
2023

2022
30.6%

Permanently non–taxable income

(2.0)

(0.0)

Permanently non–deductible expenses

0.6

0.3

122
3,083

0
21,590Per capita portion of inhabitants’ taxes

0.9

0.7

Valuation allowance(9.0)(14.8)

21,883

142,791

Overdue deductible for losses carried forward

0.6

–

–

0.0

(590)

(1,805)(4,418)(8,623)(8,527)(64,577)

Valuation allowance subtotal(Note1)(9,213)(10,333)(68,995)

Total deferred tax assets

9,854

11,55073,796

Amortization of goodwill
Consolidation adjustment to gain on saleof shares of consolidated subsidiaries

0.2–

Tax rate difference with consolidated subsidiaries

0.5

0.6

Tax credit

(0.8)

–

Other

(0.8)

(1.1)

Effective tax rate

20.8%

16.3%
Other

Net defined benefit asset
Net unrealized gain on available-forsale securities
dividend

incomeStocks returned of retirement
benefit trust
Other
Total deferred tax liabilities
Net deferred tax assets

year
through
two years

After
five
years

366

Valuation allowance for total
deductible temporary differences

accruedAfter four

30.6%

Valuation allowance for tax loss
carryforwards (Note2)

Non-taxable

After three

Statutory tax rate

Deferred tax liabilities:

2023

After two

42,207

Deferred tax assets:

0.12

After one

35,804

Millions of yen
2022
2023

0.05

One
year orless
Tax loss

Future minimum lease payments under non-cancellable
operating leases subsequent to March 31, 2023 were as
follows:
U.S.
dollars2023/09/19 9:57¥

(4,447)(4,442)(33,303)(1,449)(2,721)(10,851)

(91)

(102)

(681)

–

(98)

(647)
(95)

(733)

(6,086)(8,009)(45,577)

3,767 ¥

3,541 $

28,210–Accounting for corporate and local corporate taxes or accountingof tax effect accounting related to these taxes
Starting from this fiscal year, the Company and some of its
consolidated subsidiaries have adopted the group tax sharing
system. In addition, the Company and relevant consolidated
subsidiaries follow PITF No. 42 for accounting and disclosure ofcorporate tax, local corporate tax and tax effect accounting.

70
16/30

2023/09/19 9:57

0161303263309_003.htm

2023/09/19 9:57

29. Comprehensive Income

Millions of yen
2022

Reclassification adjustments and tax effect amounts of othercomprehensive income for the year ended March 31, 2023
and 2022 were as follows:

Reportable segments
Banking(Note 1) Leasing

Thousands ofMillions of yen
2023

U.S. dollars

2023

2022

Unrealized gain (loss) on
available-for-sale securities:
¥

3,545

Total

Deposit/loan business

2,962

–

2,962

–

2,962

Exchange business

2,177

–

2,177

–

2,177

Securities-related business

1,365

–

1,365

1,665

3,031

(5,858) $(98,150)

9,848

1,783

73,751

Amount before tax effect(3,257)(4,074)(24,391)

Tax effect amount

1,208

938

9,046

Agency business

306

–

306

–

306

Safe custody andsafe-deposit box
business

479

–

479

–

479

4,313

–

4,313

–

4,313

710

366

1,076

2,098

3,175

(2,049)(3,136)(15,344)

Amount for the year

(56)

73

(419)

Reclassification adjustment

158

82

1,183

Amount before tax effect

101

156

756

Tax effect amount

(31)

(47)

(232)

Total

12,314366

12,681

3,764

16,445Net unrealized gain on
deferred hedges

70

108

524

Other revenue (Note 3)

53,44011,96265,403

2,163

67,567

Total

65,755

12,32878,084

5,928

84,012

Unrealized gain (loss) on deferred hedges(*2)2,955

Revenue from contracts
with customers(13,106) ¥Net unrealized gain (loss) on
available-for-sale securities(590)

Investment trust andinsurance sales business
Other

Remeasurements of defined
benefit plans:
26,548Amount for the year

(4,418)

337

(391)

2,523

Reclassification adjustment(1,365)(1,657)(10,222)

Thousands of U.S. dollars

Amount before tax effect(1,028)(2,048)(7,698)

2023

314

626

2,351

Tax effect amount(*2)22,129

Remeasurements ofdefined benefit plans
Total other comprehensive income¥

23,560–23,560–23,560Exchange business

15,382–

15,382–

15,382

Securities-related business

6,597

–

6,597

9,091

15,689Millions of yen

Agency business

2,381

–

2,381

–

2,381

2023

Safe custody andsafe-deposit box
business

3,437

–

3,437

–

3,437

Investment trust andinsurance sales business

31,116–

31,116–

31,116

Other

10,8662,950

13,824

17,816

31,648

Total

93,3642,950

96,315

26,915

123,238

Other revenue (Note 3)

461,581

96,330 557,912

7,706

565,625

Total

554,946

99,288 654,235

34,628688,863(20,160)

Reportable segments
Total

Other
(Note 2)

Consolidated
financialstatement
amountRevenue from contracts
with customers

0.3

Deposit/loan business

3,146

–

3,146

–

3,146

Exchange business

2,054

–

2,054

–

2,054

Securities-related business

881

–

881

1,214

2,095

–

Agency business

318

–

318

–

318

0.6

Safe custody andsafe-deposit box
business

459

–

459

–

459

0.7
(14.8)
–

0.0

–

(1.1)
16.3%

71
16/30

Consolidated
financialstatement
amountDeposit/loan business(5,339)(4,449) $1. Disaggregation of revenue from contracts with customers
Revenue recognition for the fiscal years ended March 31,
2023 and 2022 was summarized as follows.

(0.0)

Other
(Note 2)

Total

(1,421)Banking
Leasing(Note 1)

Reportable segments
Banking
Leasing(Note 1)(713)
(2,692) ¥30. Revenue recognition

30.6%

Consolidated
financialstatement
amountReclassification adjustment

Amount for the year

Total

Total

Other
(Note 2)

Investment trust andinsurance sales business

4,155

–

4,155

–

4,155

Other

1,451

394

1,846

2,379

4,226

Total

12,467394

12,861

3,594

16,456

Other revenue (Note 3)

61,635

12,86374,4981,029

75,528

Total

74,102

13,25887,3604,624

91,984ts

Revenue from contracts
with customers

Notes:
1. “Banking” includes credit guarantee services.
2. “Other” includes business segments which are not included in
the reportable segments and comprises credit cards businessand securities business.
3. “Other revenue” mainly includes the following transactions.
a. Transactions related to financial instruments within the scopeof the Accounting Standard for Financial Instruments (ASBJ
Statement No. 10, July 4, 2019)b. Lease transactions included in the scope of the AccountingStandard for Lease Transactions (ASBJ Statement No. 13,
March 30, 2007)
c. Commission received when structuring or acquiring financial
instruments

Notes:c2023/09/19 9:57

amount

2,962
2,177
3,031
306

479
4,313
3,175

0161303263309_003.htm

2. Useful information in understanding revenue from contracts
with customers(1) Timing of recording revenue
Revenue is recognized when control of a promised goodor service is transferred to a customer. For cases where
performance obligations are satisfied over time, revenue isrecognized as the obligations are fulfilled.
(2) Recorded amount of revenue
The recorded amount of revenue is calculated based on
the amount expected to be received in exchange forgoods or services. Regarding point programs operated byother companies in which consolidated subsidiaries
participate, the amount expected to be used in the futureis recognized as the amount collected for the benefit of athird party and deducted from fees and commissions.
3. Reconciliation of satisfaction of performance obligations
within contracts with customers and cash flows arising fromsuch contracts, and the amount and timing of revenue
arising from customers existing at the end of this fiscal year
expected to be recognized after the end of this fiscal year.
(1) Beginning and ending balances of receivables, contract
assets and contract liabilities from contracts withcustomers

16,44567,56784,012Thousands of U.S. dollars
Fiscal year
(From April 1, 2022 to March 31, 2023)
Revenue recognized during the fiscal
year that was included in thecontract liabilities balance at the
beginning of the year

Millions of yen
Fiscal year
(March 31, 2023)
375

Over one year

80

Total

455

Millions of yen
2023

Fiscal year
(March 31, 2022)

End of fiscal year
(March 31, 2023)

402

Over one year

152

Contract assets

212

218

Total

555

Contract liabilities

555

455

3,437

31,648799

Over one year
626

Contract assets

26

212

Contract liabilities

646

555

Thousands of U.S. dollars
2023
End of fiscal year
(March 31, 2023)

Receivables from contracts
with customers

4,688

5,744

Contract assets

1,587

1,632

Contract liabilities

4,156

3,407

123,238
565,625
688,863

Notes:In the balance sheets, receivables and contract assets fromcontracts with customers are included in “Other assets” andcontract liabilities are included in “Other liabilities.”(2) Revenue recognized during the fiscal year that was
included in the contract liabilities balance at the beginningof the year
Millions of yen
Fiscal year
(From April 1, 2022 to March 31, 2023)
Revenue recognized during the fiscal
year that was included in thecontract liabilities balance at the
beginning of the year

419

Millions of yen
Fiscal year
(From April 1, 2021 to March 31, 2022)
Revenue recognized during the fiscal
year that was included in thecontract liabilities balance at the
beginning of the year

intangible

Notes:

Thousands of U.S. dollars

Within one year

End of fiscal year
(March 31, 2022)

15,68931,116

Interest
incomeInterest
expenseFiscal year
(March 31, 2023)

2022

Beginning of fiscal year
(April 1, 2022)

Depreciation

Increase in

Within one year
767

2,381

Total
Segment
profitSegment
assetsSegment
liabilities

Tax expense

626

Receivables from contracts
with customers

Outsidecustomers
Intersegment
incomeExtraordinary
gain
Extraordinaryloss

Receivables from contracts
with customers

Beginning of fiscal year
(April 1, 2021)

Ordinary
income:Others:Within one year

Millions of yen

Beginning of fiscal year
(April 1, 2022)

amount15,382

3,137(3) Transaction price allocated to the remaining performanceobligations
The total transaction price allocated to the remaining
performance obligations and the time frame the Group
expects to recognize the amount as revenue are as follows.

Millions of yen

23,5602023/09/19 9:57

420

Total

2,808
599
3,407

31. Segment Information and RelatedInformation(1) Segment Information
The Group's reportable segments are determined on thebasis that separate financial information for suchsegments is available and examined periodically by the
Board of Directors to make decisions regarding theallocation of management resources and assess thebusiness performances of the segments within theGroup. The Group mainly provides banking services andoperate other financial services including leasing. The
Group sets two reportable segments of banking businessand leasing business.
Banking business engages in banking services andcredit guarantee services, while leasing businessengages in leasing and other services, etc..

(1)
(2)
(3)
(4)
(5)
(6)

o

(2) Basis of measurement for reported segment profit(loss), segment assets, segment liabilities and othermaterial items
The accounting methods used for reportable businesssegments are presented in accordance with Note
3,“Significant Accounting Policies”. The reportablesegment profit figures are based on operating profit.
Income arising from intersegment transactions is basedon arm’s length prices.
(3) Information about reportable segment profit (loss),segment assets, segment liabilities and othermaterial items
Segment information for the fiscal years ended March
31, 2023 and 2022 was summarized as follows:722023/09/19 9:57

0161303263309_003.htm

2023/09/19 9:57

Millions of yen

Millions of yen

2023

2022

Reportable segments
3,137Banking

Leasing

Reportable segments

Total

Other

Total

Outsidecustomers
Intersegment
income

Total
Segment
profitSegment
assetsSegment
liabilities

80
455

Depreciation
Interest
incomeInterest
expenseExtraordinary
gain
Extraordinaryloss
Tax expense¥

74,102¥

13,258¥87,360

¥

4,624

¥

91,984¥－¥

91,984

1,568

121

1,689

2,275

3,965

(3,965)－75,67013,37989,0496,899

95,949(3,965)91,984

12,093504

12,598(254)

12,343(281)

12,061

6,210,021

35,8996,245,920

28,997

6,274,917(55,416)

6,219,501

5,970,260

33,532

6,003,793

42,427

6,046,220(55,416)

5,990,803

152
555

2,808
599
3,407

tangible andintangible
fixed assets

3,381

1,295

4,677

66

4,743

－

4,743

46,867

1

46,868110

46,979(518)

46,461

1,660

111

1,772

148

1,920

(229)

1,691

32

－

32

－

32

(31)

1

368

1

370

4

374

－

374

2,053

156

2,210

219

2,429

－

2,429

2,872

978

3,850

82

3,933

－

3,933

Other

Total

Adjustment Consolidated

Outsidecustomers
Intersegment
incomeOrdinary
income:

Total
Segment
profitSegment
assetsSegment
liabilities¥

65,755¥

12,328¥78,084

¥

5,928

¥

84,012¥－¥84,012

1,855

173

2,029

2,184

4,213

(4,213)－67,611

12,50280,1148,112

88,226(4,213)84,012

13,139428

13,568813

14,381(334)

14,047

7,012,325

34,385

7,046,711

29,7097,076,420(32,003)

7,044,417

6,776,087

32,361

6,808,448

17,112

6,825,560(32,003)

6,793,557

Depreciation
Interest
incomeInterest
expense

3,235

1,343

4,579

71

4,650

－

4,650

45,62648

45,67576

45,751(441)

45,310

979

105

1,084

69

1,154

(140)

1,013

Extraordinary
gain
Extraordinary
loss

114

－

114

－

114

(24)

89

Tax expense

294

0

295

2

298

－

298

2,002

139

2,141

120

2,262

－

2,262

2,833

1,033

3,866

25

3,892

－

3,892

Increase inNotes:
1. Ordinary income (“Total income” less extraordinary gain
included in “Other income” in the consolidated statements ofincome) is presented in place of net sales of operatingcompanies of other industry groups.
2. “Other” includes business segments which are not included in
the reportable segments and comprises credit cards businessand securities business.
3. Adjustments are as below:(1) Adjustment of segment profit of negative ¥281 million isthe elimination of intersegment transactions.
(2) Adjustment of segment assets of negative ¥55,416 million
is the elimination of intersegment transactions.
(3) Adjustment of segment liabilities of negative ¥55,416
million is the elimination of intersegment transactions.
(4) Adjustment of interest income of negative ¥518 million isthe elimination of intersegment transactions.
(5) Adjustment of interest expense of negative ¥229 million isthe elimination of intersegment transactions.
(6) Adjustment of extraordinary gain of negative ¥31 million isthe elimination of intersegment transactions.
4. Segment profit is reconciled to ordinary profit, which represents
ordinary income less ordinary expenses. Ordinary expenses
represent “Total expenses” less extraordinary loss included in“Other expenses” in the consolidated statements of income.
Therefore, consolidated segment profit, which shows ordinary
profit, is reconciled to “Income before income taxes” throughthe addition/deduction of extraordinary gain/loss, net.

73

Total

Others:Increase in

402

Leasing

Ordinary
income:Others:375

Banking

Adjustment Consolidated

Ordinary
income:tangible andintangible
fixed assets

Notes:
1. Ordinary income (“Total income” less extraordinary gain
included in “Other income” in the consolidated statements ofincome) is presented in place of net sales of operatingcompanies of other industry groups.
2. “Other” includes business segments which are not included in
the reportable segments and comprises credit cards businessand securities business.
3. Adjustments are as below:(1) Adjustment of segment profit of negative ¥334 million isthe elimination of intersegment transactions.
(2) Adjustment of segment assets of negative ¥32,003 million
is the elimination of intersegment transactions.
(3) Adjustment of segment liabilities of negative ¥32,003
million is the elimination of intersegment transactions.
(4) Adjustment of interest income of negative ¥441 million isthe elimination of intersegment transactions.
(5) Adjustment of interest expense of negative ¥140 million isthe elimination of intersegment transactions.
(6) Adjustment of extraordinary gain of negative ¥24 million isthe elimination of intersegment transactions.
4. Segment profit is reconciled to ordinary profit, which represents
ordinary income less ordinary expenses. Ordinary expenses
represent “Total expenses” less extraordinary loss included in“Other expenses” in the consolidated statements of income.
Therefore, consolidated segment profit, which shows ordinary
profit, is reconciled to “Income before income taxes” throughthe addition/deduction of extraordinary gain/loss, net.

OutsidecustomersIntersegment
income

Total
Segment
profitSegment
assetsSegment
liabilities
Others:Depreciation
Interest
incomeInterest
expenseExtraordinary
gain
Extraordinaryloss
Tax expense
Increase intangibleandintangible
fixed
assets

Notes:

(1)
(2)
(3)
(4)
(5)
(6)

o

2023/09/19 9:57

0161303263309_003.htm

2023/09/19 9:57

(5) Information on impairment loss on fixed assets foreach reportable segment

Thousands of U.S. dollars
2023

Millions of yen

Reportable segments
Banking

Consolidated

Leasing

Total

Other

Total

Adjustment

2023

Consolidated

Ordinary
income:¥84,012－84,012
14,047
7,044,417
6,793,557

4,650
45,310
1,013
89
298
2,262

3,892

Outsidecustomer $sIntersegment

Reportable segments
Banking
554,946$ 99,288 $

654,235$ 34,628 $

688,863$－$

688,863

11,742906

12,64817,037

29,693(29,693)－566,689

100,194

666,883

51,666

718,557(29,693)

688,863

90,563

3,774

94,345(1,902)

92,436(2,104)90,32446,506,560

268,845

46,775,406

217,157

46,992,563(415,007)

46,577,555

44,711,001

251,119

44,962,128

317,733

45,279,862(415,007)

44,864,846

25,3209,698

35,025494

35,520－35,520350,9847

350,992823

351,823(3,879)347,944

12,431831

13,2701,108

14,378(1,714)

12,663

239

－

239

－

239

(232)

7

Extraordinary
loss

2,755

7

2,770

29

2,800

－

2,800

Tax expense

15,374

1,168

16,5501,640

18,190－18,19021,5087,324

28,832614

29,454－29,454income

Total
Segment
profitSegment
assetsSegment
liabilities

Impairment loss¥

Interest
incomeInterest
expenseExtraordinary
gain

Increase intangibleandintangible
fixed
assets

Notes:
1. Ordinary income (“Total income” less extraordinary gain
included in “Other income” in the consolidated statements ofincome) is presented in place of net sales of operatingcompanies of other industry groups.
2. “Other” includes business segments which are not included in
the reportable segments and comprises credit cards businessand securities business.
3. Adjustments are as below:(1) Adjustment of segment profit of negative $2,104 thousandis the elimination of intersegment transactions.
(2) Adjustment of segment assets of negative $415,007
thousand is the elimination of intersegment transactions.
(3) Adjustment of segment liabilities of negative $415,007
thousand is the elimination of intersegment transactions.
(4) Adjustment of interest income of negative $3,879 thousandis the elimination of intersegment transactions.
(5) Adjustment of interest expense of negative $1,714
thousand is the elimination of intersegment transactions.
(6) Adjustment of extraordinary gain of negative $232
thousand is the elimination of intersegment transactions.
4. Segment profit is reconciled to ordinary profit, which represents
ordinary income less ordinary expenses. Ordinary expenses
represent “Total expenses” less extraordinary loss included in“Other expenses” in the consolidated statements of income.
Therefore, consolidated segment profit, which shows ordinary
profit, is reconciled to “Income before income taxes” throughthe addition/deduction of extraordinary gain/loss, net.

Leasing

161 ¥

Other

Total

- ¥

- ¥

161
Income from

Millions of yen

external

2022
Reportable segments
Banking
Impairment loss

¥

Other

Leasing

177 ¥Others:Depreciation

Note:

– ¥

Total
– ¥

b.

177

Thousands of U.S. dollars
2023
Reportable segments
Banking
Impairment loss

$

Other

Leasing

1,205 $

Total

- $

- $

1,205

(6) Information on amortization of goodwill and its
remaining balance for each reportable segment
There is no information to be reported on amortization of goodwill and its
remaining balance for the year ended March 31, 2023.

Millions of yen
2022

c.

Reportable segments
Banking
Amortization of
goodwill¥
Remaining balance ¥Leasing
– ¥
– ¥

Other

27 ¥
– ¥

Total
– ¥
– ¥

27
–

(7) Information on gain on negative goodwill for eachreportable segment
There is no information to be reported on gain on
negative goodwill.

(8) Related informationa. Information about services
For the year ended March 31, 2023

1.
(1)

Millions of yen

fSecurities trading

Lending

and investment

Leasing

Other

Total

Income fromexternalcustomers¥ 39,246 ¥7,770 ¥ 13,192 ¥ 31,775¥

91,984

For the year ended March 31, 2022

Millions of yeneSecurities trading

Lending

and investment

Leasing

Other

Total

Income fromexternalcustomers¥ 39,784 ¥

3,803 ¥ 12,400 ¥ 28,025¥

84,01274

2023/09/19 9:57

0161303263309_003.htm

Note:“Income” is presented in lieu of net sales presented by nonfinancial companies.

For the year ended March 31, 2023

Thousands of U.S. dollars

Total
161

Securities trading

Lending

and investment

Leasing

Other

Total

Income fromexternal$ 293,911
customers

Total

$

58,189 $ 98,794 $ 237,961 $ 688,863

b. Information about geographical areas(i) Income
Information about income has not been presented
as income from external customers inside Japanaccounts for more than 90% of the consolidated
income for the years ended March 31, 2023 and
2022.

177

Total
1,205

(ii) Tangible fixed assets
Information about tangible fixed assets has notbeen presented as tangible fixed assets inside
Japan accounts for more than 90% of theconsolidated tangible fixed assets at March 31,
2023 and 2022.
c. Information about main customers
Information about main customers has not beenpresented as there is no income from particularcustomer which accounts for more than 10% of theconsolidated income for the years ended March 31,
2023 and 2022.

Total
27
–

32. Financial Instruments and Related
Disclosures
1.

General Information(1) Policy for financial instruments

Total
91,984

Total
84,01275

The Group, whose core operation is The Senshu Ikeda
Bank, Ltd. (the “Bank”), is engaged in the various
financial services as a regional financial institution. The
Group holds financial assets and liabilities which are
subject to fluctuations in the interest rates and market
prices in the principal businesses such as deposit-taking
and lending services and market activities including
securities investment. In order to serve for setting up
strategic targets in response to the changes in market
environments, the Group conducts integrated asset andliability management (“ALM”) and utilizes derivative
contracts as a part of ALM.

(2) Contents of financial instruments and their risks
Financial assets held by the Group mainly consist ofloans to domestic corporate and individual customers,
which are exposed to credit risk arising from customers’
nonperformance of contractual obligations and interest
rate movement risk. Securities held by the Groupprincipally consist of equity securities, debt securities andinvestment trusts, which are held for pure investment
purpose and strategic investment purpose as availablefor-sale securities and partially, for holding to maturity
and trading purposes. These financial assets are
exposed to credit risk of issuers and market risk
associated with interest rates, stock prices and foreignexchanges.
Deposits which are major financial liabilities are exposed
to liquidity risk that unexpected cash flow might arise. In
addition, other fund raising sources are exposed to theliquidity risk that necessary fund might not be secured
when the Group fails to utilize the market under certain
circumstances, or that the Group might be obliged tofund at more unfavorable interest rates than normal. In
addition, these financial liabilities are exposed to the riskof fluctuations in interest rates as well as financial assets.
The Group uses derivative contracts to meet thecustomers’ needs and principally as a means of risk
control over the assets and liabilities. In addition, as apart of trading activities (to earn short-term trading
gains), futures instruments including equity and debt
securities are utilized. These derivatives are exposed tothe credit risk (counterparty risk) arising from customers’
nonperformance of contractual obligations and market
risk arising from the fluctuations in interest rates, stock
prices, foreign exchanges, etc.
(3) Risk management system for financial instruments
The Group has established the risk control department
independent from front offices and defines basic risk
management policies. Specifically, the risk management
system and various rules including the basic policy onrisk control are determined by the Board of Directors,
and the responsible functions by risk categories and theintegrated risk control function are clearly defined. In
addition, the “Risk Management Committee” and the“ALM Committee” have been established to monitor therisk profiles of the Group and discuss management
issues as well as risk control measures. And suchmatters are reported to the Board of Directors andaccordingly, effective risk management system at the
management level is structured.
a. Integrated risk management
The Group conducts integrated risk management inaccordance with the basic policy on risk control andvarious integrated risk control rules. Specifically, theGroup conducts integrated control by identifying therisks assessed by risk categories such as credit risk,
market risk and others including credit concentration
risk not considered in the computation process of thecapital ratio and interest rate risk of banking accounts
and compares them with management capacity(capital).

2023/09/19 9:57b.

c.

2023/09/19 9:57

0161303263309_003.htm

b. Credit risk management
The Group analyzes and controls the credit portfolioin accordance with the Company’s policy on credit
risk control and various credit risk control rules. The
Group maintains and operates a system ofinvestigation, internal rating, asset self-assessment inmonitoring individual transactions.
These credit control procedures are performed byeach operating office, credit investigation department
and risk control departments of the Bank. With
respect to credit risk of issuers of securities andcounterparty risk of derivative transactions, the risk
control departments of the Bank monitor theidentification of credit information and fair values. In
addition, the risk control department of the Company
reports on a regular basis to the Board of Directors of
the Company.
Furthermore the internal audit departments audit thestatus of credit control.
c. Market risk management(i) Market risk management
The Group controls market risk arising fromfluctuations in interest rates, stock prices, foreignexchanges, etc. in accordance with the Company’s
policy on market risk control and various market
risk control rules. Specifically, the risk control
department of the Company identifies the volume
of market risk using the Value-at-Risk (VaR)
method and monitors compliance with the risk
limits resolved by the Board of Directors throughcontinuous monitoring system. For securities, inaddition to above risk limit control policy, theGroup has established and managed loss cut
rules. The relevant information is periodicallyreported by the risk control department to the Risk
Management Committee and the Board of
Directors.
The ALM Committee identifies and confirms the
make-up of assets and liabilities and interest raterisk and discusses future measures. Specifically,
the responsible department of the Group for ALM
identifies comprehensively interest rates andperiods of financial assets and liabilities andmonitors using gap analysis and interest ratesensitivity analysis to secure stable andcontinuous earnings.

(iii)Quantitative information of market risk
The Group monitors the value at market risk offinancial instruments, such as deposits, loans andbills discounted and securities, using VaR
everyday as the change in market risk is larger
than other risks.
The Group calculates the value at market risk
according to the variance-covariance approach(holding period–120 business days, confidence
interval–99.0%, and observation period–240
business days).
The value of market risk on financial instrumentswas ¥34.5 billion ($258.3 million) for interest rateand ¥6.5 billion ($48.6 million) for stocks at March
31, 2023. The value of market risk as a whole withcorrelation in consideration was ¥37.3 billion($279.3 million).
The Group carries out back-testing to compare themodel-calculating VaR of securities on the banking
activities which influenced by market fluctuation(holding period–one business day) with real gain
and loss in order to verify their accuracy.
However, VaR, which calculates the value ofmarket risk based on past fluctuations in themarket, sometimes cannot calculate the value ofmarket risk accurately under the condition thatmarket environment changes abruptly.
d. Liquidity risk management associated with fundraising
The Group conducts liquidity risk control for funding
activities in accordance with the Company’s policy on
liquidity risk control and various liquidity risk control
rules. Specifically, the department responsible for
ALM and the treasury department of the Bank identify
the investment and funding status of the whole Groupon a timely basis and control liquidity risk by securingliquidity of the assets, diversifying the funding
instruments and adjusting the short-term and longterm funding balances considering the market
environments to secure stable fund management.
The risk control department identifies its response
capability if liquidity risk is revealed throughmonitoring periodically the amount of liquid reserve
assets that can be readily converted into cash,
monitors the appropriateness of its fund management
and reports it to the Risk Management Committee
and the Board of Directors.

The Bank executes foreign exchange transactions
and foreign currency bond investments, which areexposed to foreign exchange risk, but thesubsidiary strives to minimize foreign exchange
risk by balancing the foreign exchange positions
where possible.
(ii) Derivative transactions
With respect to derivative transactions, the Grouphas established an internal control system
including segregation of duties of the departments
responsible for execution of transactions, risk
control and operation administration and complies
with the various market risk control rules.

76
22/30

2023/09/19 9:57

0161303263309_003.htm(4) Supplementary explanation about fair value offinancial instruments
The fair value of financial instruments includes the value
based on the market price as well as the value
reasonably calculated when there is no market price.
Since certain assumptions are used in calculating the fairvalue of financial instruments , the result of suchcalculation may vary if different assumptions are used.
2.

Millions of yen
March 31, 2023¥

Fair value

Difference

15,010 ¥15,010 ¥－473,473473,473－

4,724,068(3,282)

Securities:
Available-for-sale securities(*3)
Loans and bills discounted

4,737,192(9,841)

Reserve for possible loan losses (*1)

4,727,351
Total assets¥ 5,215,835 ¥ 5,212,552 ¥(3,282)

Deposits¥ 5,579,250 ¥ 5,579,213 ¥(37)

Borrowed money
Total liabilities

338,899

338,867(32)¥ 5,918,150 ¥ 5,918,080 ¥(69)

Derivative transactions (*2)
To which hedge accounting is
not applied¥

To which hedge accounting isappliedTotal derivative transactions

95 ¥(1,051)

¥

95 ¥

－
－

(1,051)(955) ¥

(955) ¥

Carrying
value

Money held in trust¥

Fair value

24,521 ¥Available-for-sale securities

636,200

Difference

24,521 ¥－636,200－

4,493,559

2,846

4,503,834(13,121)

Reserve for possible loan losses (*1)

4,490,712
Total assets¥ 5,151,434 ¥ 5,154,280 ¥2,846

Deposits¥ 5,557,248 ¥ 5,557,214 ¥(34)

Borrowed money
Total liabilities

1,082,890

1,082,881(8)¥ 6,640,139 ¥ 6,640,096 ¥

(42)

¥

(112) ¥

(112) ¥

－

(611)

(611)

－

¥

(724) ¥

(724) ¥－

Derivative transactions (*2)
To which hedge accounting is
not applied
To which hedge accounting isappliedTotal derivative transactions

77

Fair value

112,409 $Difference

112,409 $－Available-for-sale securities(*3)

3,545,817

Loans and bills discounted－

3,545,817

35,476,611(73,698)

Reserve for possible loan losses (*1)

(24,578)(24,578$ 39,061,147 $ 39,036,561 $)
35,378,326$ 41,782,745 $ 41,782,468 $Deposits
Borrowed money

2,537,998

2,537,759(239)$ 44,320,751 $ 44,320,227 $Total liabilities(516)

Derivative transactions (*2)

Other

To which hedge accounting is
not applied$

To which hedge accounting isappliedTotal derivative transactions

$

711 $

711 $

－

(7,870)(7,870)－(7,151) $(7,151) $－(*1) General and specific reserves for loan losses
corresponding to loans are deducted.
(*2) Derivative transactions include all derivatives recorded inother assets and other liabilities. Assets and liabilities
arising from derivative transactions are shown on a net
basis.
(*3) “Available-for-sale securities” include investment trusts towhich the treatment in Paragraph 24-9 of the“Implementation Guidance on Accounting Standard for
Fair Value Measurement” (ASBJ Guidance No. 31, June17, 2021) is applied, where the base price is deemed tobe the fair value.
(Note 1) Carrying amounts of shares and other securities without
a quoted market price and investments in partnerships
recorded in the consolidated balance sheets were as
follows. They are not included in “Available-for-salesecurities” under “Assets” as part of the fair value
information on financial instruments.
(Thousands of
U.S. dollars)(Millions of yen)

Unlisted equity
securities (*1, 2)Securities:(277)

March 31, 2023 March 31, 2022 March 31, 2023

Securities:
Loans and bills discounted$

Securities:－

Millions of yen
March 31, 2022

March 31, 2023
Money held in trust

Total assets

The carrying value, the fair value and the difference as ofMarch 31, 2023 and 2022 are summarized in the following
tables:Shares and other securities without a quoted market priceand investments in partnerships are not included in thefollowing table (see Note 1). In addition, cash and due frombanks, call loans and bills bought, monetary claims bought,
foreign exchange (assets and liabilities), payables under
securities lending transactions and borrowed money fromtrust account are omitted because their fair values
approximate their carrying values due to their short maturities.

Money held in trustThousands of U.S. dollars
Carrying
value

35,402,913

Fair value of financial instruments

Carrying
value

2023/09/19 9:57

5,801

5,774

43,443

Investments inpartnerships(*3)

7,585

6,192

56,803

Total

13,386

11,966100,247(*1) Unlisted equity securities are not subject to fair value
disclosure, in accordance with Paragraph 5 of the“Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No. 19,
March 31, 2020).
(*2) The Group recognized impairment losses on unlisted
equity securities in the amount of ¥64 million ($479
thousand) and ¥53 million for the year ended March 31,
2023 and 2022, respectively.
(*3) Investments in partnerships are not subject to fair value
disclosure, in accordance with Paragraph 24-16 of the“Implementation Guidance on Accounting Standard for
Fair Value Measurement” (ASBJ Guidance No. 31, June17, 2021).

Total

Securities:

Other

Total

2023/09/19 9:57

0161303263309_003.htm

2023/09/19 9:57

(Note 2) Repayment schedule of monetary receivables andsecurities with contractual maturities

Millions of yen
Due inone yearor less

Millions of yen$－－

March 31, 2023
Due from banks(24,578)(24,578$)$$

Due inone yearor less¥

March 31, 2022

－ ¥－Call loans and bills bought

368

－

－

49

－

－

57,823

159,146

75,31657,823

159,146

75,316－

13,30020,000Due from banks－ ¥－Monetary claims bought
Securities:

7,692

－

－

Securities:

34,181

104,484

74,44734,181

104,484

74,447

Government bonds

Available-for-sale securities
with maturities:

Due after
three years
throughfive years¥ 1,659,909 ¥Available-for-sale securities
with maturities:(277)

Government bonds

4,300

19,00010,000Local government bonds

14,42250,361

28,580(239)

Local government bonds

13,86844,09325,880

Corporate bonds

43,072

43,221

25,583(516)

Corporate bonds

15,83440,84933,408Other

327

52,264

1,153

952,220664,139

563,504

7,506

－

－

¥ 2,677,877 ¥

823,285 ¥－－$

760,636 ¥Due after
three years
throughfive years

Call loans and bills bought

Other

$

Due after
one yearthroughthree years

Due after
one yearthroughthree years

179

542

5,158

956,525

690,617565,485

5,856

－

－

¥ 1,764,894 ¥

795,101 ¥Loans and bills discounted (*1, 2)
Foreign exchanges assets
Total

Loans and bills discounted (*1, 2)
Foreign exchanges assets
Total

638,821

Securities:

Other(*1, 2)
Total

639,932
Millions of yen－

Millions of yen

March 31, 2023
Due from banks

Due after
Due after
five years seven years
throughthroughseven years ten years¥

Call loans and bills bought
Securities:
Available-for-sale securities
with maturities:

Due after
ten years

March 31, 2022

Due after
Due after
five years seven years
throughthroughseven years ten years

Due after
ten years

－ ¥

－ ¥

－

－ ¥

－ ¥

－

Call loans and bills bought

－

－

－

－

－

－

Monetary claims bought

－

－

－

36,41673,772

109,800

34,502

115,006

138,981

34,502

115,006

138,981－

31,100－Due from banks¥

Securities:
Available-for-sale securities
with maturities:

36,41673,772

109,800－

10,000－Government bonds

Local government bonds

8,968

23,240－Local government bonds

6,800

30,208－

Corporate bonds

9,726

6,000

95,554

Corporate bonds

13,7628,870

93,590Other

17,721

34,532

14,245

Other

13,94044,82845,390432,044522,668

1,525,652

409,540

520,835

1,355,273

－

－

－

－

Government bonds

Loans and bills discounted (*1, 2)－

Foreign exchanges assets
Total

¥

468,460 ¥

596,441 ¥ 1,635,452

Loans and bills discounted (*1, 2)－

Foreign exchanges assets
Total

¥

444,042 ¥635,841 ¥ 1,494,255

Securities:

Other(*1, 2)
Total

43,44356,803
100,247

Total

78

2023/09/19 9:57

0161303263309_003.htm

2023/09/19 9:57

Thousands of U.S. dollars
Due inone yearor less

March 31, 2023

Due after
one yearthroughthree years－

Due from banks

－ $

－

－

Call loans and bills bought

57,605－－－

Securities:

255,979

782,475

557,530

75,316$ 5,696,367 $Available-for-salesecurities with maturities:

March 31, 2023

Due after
Due after
five years seven years
throughthroughseven years ten years

Deposits (*1)
Payables under securities
lending transactions
Borrowed money

¥

Total

¥

233 ¥

－

－
－

－
－

－
－

141 ¥

233 ¥

－

255,979

782,475

557,530

Government bonds

32,202

142,290

74,88920,000Local government bonds

103,856

330,210

193,81428,580

Corporate bonds

118,580

305,916

250,190

25,583

Other

1,340

4,059

38,628

7,163,371

5,171,998

4,234,891

March 31, 2022

43,855－－

Deposits (*1)
Payables under securities
lending transactions
Borrowed money¥ 5,338,731 ¥Total¥ 6,333,859 ¥

1,153－
638,821Loans and bills discounted(*1, 2)Foreign exchanges assets$ 13,217,209 $ 5,954,474 $ 4,792,421

Total

Thousands of U.S. dollars

March 31, 2023－－－
138,981
138,981－－
93,59045,390－Due after
Due after
five years seven years
throughthroughseven years ten years
－ $
－

－

272,717552,475

822,287272,717552,475

822,287－

74,889－Local government bonds

67,160174,043－

Corporate bonds

72,83744,933

715,599

Other
132,711Loans and bills discounted
3,235,557(*1, 2)Foreign exchanges assets－

258,608

106,680

3,914,236

11,425,537－－

Securities:
Available-for-salesecurities with maturities:
Government bonds$－(*1) Loans and bills discounted do not include ¥44,199 million($331,004 thousand) and ¥38,321 million of receivables
such as those due from bankrupt, effectively bankrupt or
likely to become bankrupt borrowers at March 31, 2023
and 2022, respectively, since it is not certain when they
can be collected or redeemed.
(*2) Overdraft accounts of loans are shown under “Due in one
year or less.”(Note 3) Repayment schedule of bonds, borrowed money andother interest bearing liabilities.
Millions of yen

March 31, 2023

79

March 31, 2022

Due in one
year orless

Due after
one yearthroughthree years

Deposits (*1)
Payables under securities
lending transactions
Borrowed money¥ 5,374,853 ¥Total¥ 5,506,749 ¥

4,371
127,524

Due after
one yearthroughthree years

84,792
910,335

Due after
three years
throughfive years

185,749 ¥

12,444－
137,613－34,941

323,362 ¥47,386

Due after
three years
throughfive years

170,230 ¥

13,574－
100,239－
111,136

270,470 ¥

124,711

Due after
Due after
five years seven years
throughthroughseven years ten years

Deposits (*1)
Payables under securities
lending transactions
Borrowed money

¥

Total

¥

belongs.
(1)

Due after
ten years

177 ¥

138 ¥

－

－
－

－
－

－
－

177 ¥

138 ¥

－

Thousands of U.S. dollars$ 3,508,275 $ 4,466,719 $ 12,247,824

Total

Due in one
year or
less

Lev
o

Millions of yen－

Call loans and bills bought

Millions of yen

Due after
ten years－ $Due from banks

Due after
ten years

141 ¥75,316

563,504

3.

Millions of yen

Due after
three years
throughfive years

March 31, 2023

Due after
one yearthroughthree years

Due in one
year orless

Due after
three years
throughfive years

Deposits (*1)
Payables under securities
lending transactions
Borrowed money$ 40,252,025 $ 1,274,844 $Total$ 41,239,788 $ 2,025,537 $

32,734
955,021－750,685

Shares101,655－
832,292
933,954

Thousands of U.S. dollars

March 31, 2023

Due after
Due after
five years seven years
throughthroughseven years ten years

Deposits (*1)
Payables under securities
lending transactions
Borrowed money

$

Total

$

Due after
ten years

1,055 $

1,744 $

－

－
－

－
－

－
－

1,055 $

1,744 $－(*1) Demand deposits were disclosed under “Due in one year
or less” of deposits.
Deposits did not include ¥20,216 million ($151,396
thousand) and ¥20,006 million of time deposits beyond
maturity at March 31, 2023 and 2022, respectively.

Shares2023/09/19 9:57

3.

－
－
－
－

through
12,444－34,941
47,3860161303263309_003.htm

The breakdown of fair value of financial instruments
by level, etc.

The fair value of financial instruments is classified into thefollowing three levels based on the observability andmateriality of the inputs used to determine fair value.
Level 1: Fair value determined based on quoted market
prices for assets or liabilities for which such fair value iscalculated that are formed in an active market, among the
inputs for the determination of observable fair value
Level 2: Fair value determined using inputs related toobservable fair value other than Level 1 inputs
Level 3: Fair value determined using unobservable inputs forfair value calculations
When multiple inputs that have a significant impact on thedetermination of fair value are used, fair value is classified as
the level with the lowest priority in the determination of fairvalue among the levels to which each of those inputs
belongs.
(1) Financial instruments recorded at fair value in the
consolidated balance sheets－－－

Money held in trust
Securities

Fair value
Level 1

Level 2

Level 3

11,502

3,508

–

Total
15,01043,207

115,278–

158,486–

174,758

23,430

198,189

Shares21,962––

21,962Foreign securities

5,439

–

–

5,439

Investments trusts

1,292

63,838–65,130

Corporate bonds

Derivative transactions－

Currency-related

–

2,868

–

2,868

83,404360,252

23,430467,087

Currency-related

–

3,824

–

3,824

Total liabilities

–

3,824

–

3,824

Total assets

2023
Fair value

Category

Level 1

Level 2

Level 386,137

26,271–

Money held in trust
Securities

Deposits

Government bonds, local
government bonds, etc.

323,575

Corporate bonds

164,472––

Foreign securities

40,732––

40,732

Investments trust

9,675

478,079–

487,755–

21,478–21,478624,608 2,697,910

Money held in trust
Securities－

Corporate bonds

Level 2

Level 320,7002,190–

Deposits–

28,637–28,637

Total liabilities–

28,637–28,637(*1) “Securities” do not include investment trusts to which thetreatment in Paragraph 24-9 of the “Implementation
Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021)
is applied, where the base price is deemed to be the fairvalue. The amount recorded on the consolidated balance
sheet of investment trusts to which the treatment inParagraph 24-9 has been applied is ¥24,264
million($181,711 thousand)(*2) Reconciliation of the beginning balance to the end
balance of investment trusts, etc. to which the treatment
in Paragraph 24-9 has been applied

Deposits

Valuation
gain or loss

for the year

22,890The

The
amount byamount bywhich thePurchases, which thebase pricesales,
base price
Recordedof theissuances,of theinvestment
in other
Recorded
investment
andcomprehentrust wassettlement trust wasin profit orsive
notloss (*1)
deemed tosdeemed toincomebe the fairbe the fair
(*2)
value
value

of
investment
trusts heldEndbalanceat theconsolidated balance

68,167130,055–

198,223–

201,443

26,005

227,449

21,731––

21,73155,021

33,841–

88,863

Derivative transactions
–

1,128

–

1,128

165,620

368,659

26,005560,285

Currency-related

–

1,852

–

1,852

Total liabilities

–

1,852

–

1,852

823

(1,134)(1,512)--

recorded in
profit orloss for the

24,264

Assets:isheet dateof theamountyear (*1)
26,087

Foreign securities
Currency-related

Profit or loss or othercomprehensive income

Total

SharesTotal assets

175,466 3,497,992

Currency-related

Fair value
Level 1

Available-for-salesecurities
Government bonds, local
government bonds, etc.

164,472

Derivative transactions

Beginningbalance2022－－– 1,186,894
175,466 1,484,228

Millions of yen

Millions of yen

Category

863,311– 1,308,754

SharesDerivative transactions

－

Total
112,409

Available-for-salesecurities

Total assets

Available-for-salesecurities
Government bonds, local
government bonds, etc.

(2)

Thousands of U.S. dollars

Currency-related

2023
Category(*) Investment trusts to which the transitional treatmentprescribed in Paragraph 26 of “Implementation Guidanceon Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, July 4, 2019) is applied are notincluded in the table above. Carrying amounts of suchinvestment trusts included in money held in trust andincluded in securities in the consolidated balance sheets
were ¥1,631 million ($12,214 thousand) and ¥99,933
million ($748,393 thousand), respectively.

Derivative transactions

Millions of yen－

2023/09/19 9:57

c-

Thousands of U.S. dollars
Profit or loss or othercomprehensive income
for the year

Beginningbalance

Derivative transactions

195,364The
amount byamount bywhich thePurchases, which thebase pricesales,
base price
Recordedof theissuances,of theinvestment
in other
Recorded
investment
and
trust
was
comprehenin profit orsettlement trust wassive
notdeemed tosloss (*1)
incomedeemed tobe the fairbe the fair
(*2)
value
value

6,163

(8,492)

Valuation
gain or lossofThe

(11,323)--

investment
trusts heldat theEndbalancesection.
mconsolidated balance
sheet dateof theamountrecorded in
profit orloss for theyear (*1)(181,711)

-

tr
w

80

2023/09/19 9:57

0161303263309_003.htm(*1) Included in “Other ordinary income” in the
consolidated statements of income.
(*2) Included in “Net unrealized gain (loss) on
available-for-sale securities” under “Other
comprehensive income” in the consolidated
statements of comprehensive income.
(2) Financial instruments other than those recorded atfair value in the consolidated balance sheets
Millions of yen
2023
Total

Category

112,409

Fair value
Level 1

Level 2

Level 3

Total

Loans and bills discounted–

123,265

4,600,803

4,724,068

Total assets–

123,265

4,600,803

4,724,068

Deposits–

5,579,213–

5,579,213

Borrowed money–

334,150

4,716

338,867

Total liabilities–

5,913,363

4,716

5,918,080

Millions of yen

164,472

2022

40,732487,755
21,478Category

Fair value
Level 1

Level 2

Level 3

Total

Loans and bills discounted–

14,556

4,479,002

4,493,559

Total assets–

14,556

4,479,002

4,493,559

Deposits–

5,557,214–

5,557,214

28,637

Borrowed money–

1,077,232

5,648

1,082,881

28,637

Total liabilities–

6,634,447

5,648

6,640,096

Thousands of U.S. dollars
2023
Category

Valuation
gain or lossofinvestment
trusts heldat theconsolidated balance
sheet dateof theamountrecorded in
profit orloss for theyear (*1)-

Valuation
gain or lossofinvestment
trusts heldat theconsolidated balance
sheet dateof theamountrecorded in
profit orloss for theyear (*1)-

81

Fair value
Level 1

Level 2

Level 3

Total

Loans and bills discounted–

923,125

34,455,201

35,378,326

Total assets–

923,125

34,455,201

35,378,326

Deposits
Borrowed money–

41,782,468–

41,782,468–

2,502,433

35,3172,537,759

Total liabilities–

44,284,902

35,31744,320,227(Note 1) Valuation method for the fair value of financial
instruments

Assets:Money held in trust
For securities that are invested as part of trust assets in an
independently managed money trust with securities
management as the primary purpose, the fair value of equity
securities is determined using quoted market prices and thefair value of debt securities is determined using quoted
market prices or the prices provided by counterparty financial
institutions. The fair value of securities for which unadjusted
quoted market prices in active markets are available isclassified as Level 1, that for which the impact ofunobservable inputs is significant is classified as Level 3, andthat for which the impact of unobservable inputs is not
significant is classified as Level 2.
Note that information on money held in trust by holding
purposes is presented under the “Money Held in Trust”
section.
Securities
The fair value of securities for which unadjusted quoted
market prices in active markets can be used is classified as
Level 1. Such securities mainly include listed equity securities
and government bonds.
If the market is not active even when published market prices
are used, the fair value is classified as Level 2. Suchsecurities mainly include local government bonds andcorporate bonds.
In addition, for investment trusts for which there is no market
transaction price, if there are no significant restrictions thatwould require market participants to compensate for the riskof redemption or requrchase requests, the fair value isclassified as Level2.

2023/09/19 9:57

When quoted market prices are not available, fair value isdetermined using such valuation methods as the method for
discounted present value of future cash flows. The valuation
makes maximum use of observable inputs, which include
credit spreads and expected loss ratios. When significant
unobservable inputs are used in the determination, the fairvalue is classified as Level 3.
Loans and bills discounted
The fair value of loans is determined based on theaggregated value of principal and interest by categories oftypes of loans, internal ratings and maturities discounted
using the interest rate assumed if the same loans were newly
originated. The carrying value of the loans with floatinginterest rates, which reflect short-term market interest rates, ispresented as the fair value since the fair value approximatesthe carrying value as long as the creditworthiness of theborrower has not changed significantly since the loan
origination. Loan losses on receivables from bankrupt,
effectively bankrupt or likely to become bankrupt borrowers
are estimated based on factors such as the present value of
expected future cash flows or the expected amount to becollected from collateral and guarantees. Since the fair valueof these items approximates the carrying value recorded on
the consolidated balance sheets at the closing date, net of thecurrently expected loan losses, such carrying value ispresented as the fair value.
The carrying value of the loans which do not have defined
repayment due dates because the loans are limited to within
the amount of pledged assets is presented as the fair value
since the fair value approximates the carrying value
considering the expected repayment schedule and interest
rate conditions. Such fair value is classified as Level 3.
The fair value of loans with embedded derivative isdetermined using quoted the prices provided by counterparty
financial institutions, etc. Such fair value is classified as Level
2.
Liabilities:
Deposits
The amount payable on demand as of the consolidatedbalance sheet date is presented as the fair value of thedemand deposit. The fair value of time deposits is determinedusing the discounted present value of future cash flows,grouped by certain maturity lengths. The discount rate used is
the interest rate that would be applied to newly accepted
deposits. The carrying value of deposits whose remaining
maturity is within the short-term period (one year or less) ispresented as the fair value since the fair value approximatesthe carrying value. Such fair value is classified as Level 2.
Borrowed money
The present value of borrowed money is determined bydiscounting the aggregated value of principal and interest ofsuch borrowings, grouped by certain maturity lengths, by theinterest rate assumed for similar borrowings. The carrying
value of floating rate borrowed money is presented as fairvalue. This is because it reflects the market interest rate in
the short-term period, and also the creditworthiness of theconsolidated subsidiaries has not significantly changed since
the borrowed money was originated and accordingly fairvalue approximates the carrying value. The carrying value ofborrowed money with short contractual terms (one year orless) is presented as fair value since the fair value
approximates the carrying value. Fair value for which theimpact of unobservable inputs is significant is classified as
Level 3, and that for which the impact of unobservable inputs
is not significant is classified as Level 2.

mtSecurities
sale

Privatebonds

Securities
sale

Privatebonds

2023/09/19 9:57

0161303263309_003.htm

Derivative transactions:
The fair value of derivative transactions for which unadjusted
quoted market prices in active markets can be used isclassified as Level 1. These transactions mainly include bondfutures and interest rate futures transactions.
However, since most derivatives transactions are over-thecounter transactions and there are no published quoted
market prices, fair value is determined using such valuation
methods as discounted present value or the Black-Scholesmodel, depending on the type of transaction and the maturity
length. The main inputs used in those valuation methods
include interest rates, exchange rates, and volatility. If
unobservable inputs are not used or their impact is not
significant, the fair value is classified as Level 2. Suchtransactions include plain vanilla interest rate swap
transactions and foreign exchange forward contracts. If
significant unobservable inputs are used, the fair value isclassified as Level 3. Such transactions include stock optionstransactions.

2023/09/19 9:57

(2) Reconciliation of the beginning balance to the end balanceand valuation gain or loss recognized in profit or loss for theyear
Millions of yen
2023
Profit or loss or other

Valuation

comprehensive income
for the year

gain or lossof financial
assets and

Beginningbalance

Recorded

Purchases,

financialliabilities

sales,
issuances,held at theconsolidate

andin other
Recordedin profit or comprehen settlementssiveloss(*1)
income(*2)

Transfer

Transfer

into Level
3

Level 3out ofEndbalancet

d balance
sheet dateof theamountrecorded in
profit orloss for theyearcSecurities
Available-forsale
securities
Private(Note 2) Information on the fair value of Level 3 for financial
instruments recorded in the consolidated balance sheetsat fair value

placement

26,005

Valuation
methods

Category

Significant
unobservable
inputsScope of inputs

Privateplacement
bonds

Weighted
average of
inputs-23,430

Valuation

comprehensive income
for the year

gain or lossof financial

Beginning

Recorded
Recordedin othersales,
issuances,andin profit or comprehen settlementssiveloss(*1)

assets andfinancialliabilities
Transfer

Transfer

into Level3

out ofEndbalance

Level 3held at theconsolidated balance
sheet dateof theamountincome(*2)

Discounted
cash flow
methodCash flow
deduction
method-Profit or loss or otherrecorded in
profit or

Creditspreads(0.271%) to
0.169%

0.079%

Expectedloss ratios

100%

100%

t

loss for theyear
Securities
Available-forsale
securities

Valuation
methods

Significant
unobservable
inputsScope of inputs

Weighted
average of
inputsPrivateplacement

26,823

(0)

(41)

(775)

–

–

26,005

–

bonds

1.

Securities

Thousands of U.S. dollars
2023

Available-forsale
securities
Privateplacement
bonds-

Purchases,balance

March 31, 2022
Category(2,571)

2022

Securities
Available-forsale
securities(3)

Millions of yen(1) Quantitative information on significant unobservable inputs
March 31, 2023

(0)

bonds

Profit or loss or other

Discounted
cash flow
methodCash flow
deduction
methodCreditspreads
Expectedloss ratios

0.064% to0.257%

Valuation
gain or lossof financial

comprehensive income
for the year

0.162%

assets andfinancialliabilities

Purchases,

100%

100%

Beginningbalance

Recordedin othersales,
issuances,andRecordedin profit or comprehen settlementssiveloss(*1)
income(*2)

Transfer

Transfer

into Level3

out ofLevel 3Endbalanceheld at theconsolidated balance
sheet dateof theamountv(1)

recorded in
profit orloss for theyear
Securities
Available-forsale
securities
Privateplacement

194,750(0)(22)(19,254)--

175,466-bonds(*1) Included in “Other ordinary income” and “Other ordinary
expenses” in the consolidated statements of income.
(*2) Included in “Net unrealized gain (loss) on available-for-salesecurities” under “Other comprehensive income” in the
consolidated statements of comprehensive income.

Total

82

2023/09/19 9:57

Valuation
gain or lossof financial
assets andfinancialliabilities
held at theconsolidated balance
sheet dateof theamountrecorded in
profit orloss for theyear-

Valuation
gain or lossof financial
assets andfinancialliabilities
held at theconsolidated balance
sheet dateof theamountrecorded in
profit orloss for theyear–

0161303263309_003.htm(3) A description of valuation processes used for fair value
measurements
At consolidated subsidiaries, the risk control department
establishes policies and procedures for measuring fair value,
and the back office measures fair value accordingly. The
middle office verifies whether the fair value obtained ismeasured by using valid valuation methods and inputs aswell as whether they are classified into an appropriate level ofthe fair value hierarchy in order to ensure that the policies
and procedures for measuring fair value are appropriate.
In measuring fair value, the Group uses a valuation modelthat most appropriately reflects the nature, characteristics andrisks of each asset. In addition, when using quoted prices
obtained from third parties, the Group verifies whether the
prices are valid by using appropriate methods, such asconfirming the valuation methods and inputs used andcomparing them with the fair value of similar financial
instruments.
(4) A description of the effect on the fair value of changes insignificant unobservable inputs
Significant unobservable inputs used in measuring the fairvalue of private placement bonds are credit spreads andexpected loss ratios. Credit spread is the difference between
the weighted average interest rate of the newly executed rate
for each credit rating and the market interest rate, and it is an
estimated value calculated based on the results within six
months from the settlement date. Significant increases(decreases) in this input would result in a significantly lower(higher) fair value measurement. Expected loss ratio is theratio of the loss expected to occur in the event of bankruptcy
to the amount of bonds or loans minus the amount expected
to be recoverable through the valuation of collateral andguarantees. Significant increases (decreases) in this input
would result in a significantly lower (higher) fair value
measurement.

33. Derivatives
1. Derivative transactions to which hedge accounting is
not applied

Valuation
gain or lossof financial
assets andfinancialliabilities
held at theconsolidated balance
sheet dateof theamountWith respect to derivatives to which hedge accounting is
not applied, contract amount or notional principal, fairvalue and related valuation gain or loss are as follows.
Note that contract amounts do not represent the market
risk exposure of derivative transactions.
(1) Currency related derivatives at March 31, 2023
and 2022

March 31, 2023

Over
one year

Total

Fair
value

Valuation
gain (loss)¥ 42,336 ¥ 36,396 ¥

51 ¥

51

-

30

30

3,442

-

13

13

Selling

52,33837,346(2,388)(105)

Buying52,33837,346

2,388

629

Currency swaps
Forward foreignexchange contracts:
Selling

6,994

BuyingCurrency options:

Total

–

– ¥

95 ¥

619

Over
one year

Total

Fair
value

Valuation
gain (loss)

Over-the-counter transactions:

Currency swaps
Forward foreignexchange contracts:¥ 50,347 ¥ 29,127 ¥

47 ¥

47

Selling

4,784

5

(272)

(272)

Buying

2,517

–

112

112

Selling

18,317

11,710(626)

247

Buying18,317

11,710626(71)(112) ¥

63

Currency options:

Total

–

– ¥

methodDeferral
hedge

Total

Thousands of U.S. dollars
methodContract amount/notional principal
March 31, 2023

Over
one year

Total

Fair
value

Valuation

Deferralhedge

gain (loss)

Over-the-counter transactions:

Currency swaps$ 317,052 $ 272,567 $Forward foreignexchange contracts:
Selling
52,377
-

381 $

381

224

224
97

Buying25,776-97

Selling

391,956

279,682(17,883)(786)

Buying391,956

279,682

17,883

4,710

Total

Currency options:

Total

– $

–

711 $ 4,635

Note:Transactions in the table above are stated at the fair value andthe related valuation gain (loss) is reported in the consolidated
statement of operations.

2. Derivative transactions to which hedge accounting isappliedWith respect to derivatives to which hedge accounting isapplied, contract amount or notional principal and fairvalue at the balance sheet date by transaction type andhedge accounting method are as follows. Note that
contract amount or notional principal does not represent
the market risk exposure of derivative transactions

Currency related derivatives at March 31, 2023 and 2022
March 31, 2023

Millions of yen
Contract amount/notional principal

methodOver-the-counter transactions:

83

March 31, 2022

Hedge accounting

Contract amount/notional principal

year

-

Millions of yen
Contract amount/notional principal

Millions of yen

recorded in
profit orloss for the2023/09/19 9:57

Transaction Major hedged
type
item

DeferralCurrency
hedge
swaps
accounting
Forwardforeignexchange
contracts
Total

Over
one year

Total

Fair
value

Loans
denominated inforeign currencies–¥ 6,409 ¥ 5,074 ¥ (1,051)

–
–

–
–
– ¥ (1,051)

Net assets
Basic
Diluted2023/09/19 9:57

0161303263309_003.htm

March 31, 2022

Net income per share for the years ended March 31, 2023
and 2022 were computed based on the following information:

Millions of yen
Contract amount/notional principal

Valuation
gain (loss)

¥

47

(272)
112
247

methodDeferralCurrency
hedge
swaps
accounting
Forwardforeignexchange
contracts

methodgain (loss)

$

381

224
97
(786)
4,710
$ 4,635

Millions of yen
2022
2023

denominated in¥ 5,874 ¥ 5,874 ¥foreign currencies

–

–

–

–

– ¥

(611)

–
(611)

Transaction Major hedged
type
item

DeferralCurrency
hedge
swaps
accounting
Forwardforeignexchange
contractsOver
one year

Total

Fair
value

–

–

–

–

– $ (7,870)

Derivatives in the table above are mainly accounted forhedge accounting (deferral hedge accounting) in accordancewith JICPA Industry Committee Practical Guidelines No.25“Accounting and Auditing Treatment Relating to the Adoptionof the Accounting Standard for Foreign Currency
Transactions for Banks.”

(375)

(-)

(-)

(375)

(-)

(-)

(750)

(-)

9,502 ¥

10,650 $Amounts not attributed tocommon stock share

71,16071,160280,329

280,272

Dividends for first series ofseventh-class preferred stock
based on the resolution by Boardof Directors

-

375

-

Dividends for first series ofseventh-class preferred stock
based on the resolution at theregular general shareholders’meeting

-

375

-

- ¥

750 $

-

Adjustment to net income attributableto owners of the parent

Number of increased common
stock (Unit: thousand shares)
Of which, stock subscription rights
Of which, for first series of seventh-classpreferred stock¥

16,09654,299596

420

15,49953,879--(Unit: thousand shares)

Amounts per share at March 31, 2023 and 2022 and for theyears then ended were summarized as follows:
Yen

U.S. dollars

2023

2022

807.64 ¥795.45 $

6.04

Basic

33.89

37.99

0.25

Diluted

32.05

34.07

0.24

¥

(-)

Dividends for first series of seventh-classpreferred stock based on the resolution at
the regular general shareholders’ meeting

Summary of potential shares excluded from thecalculation of diluted net income per share
due to their anti-dilutive effect

34. Amounts per Share

Net assets

11,400 $Diluted net income per shareafter adjusting potential shares$ 47,996 $ 37,998 $ (7,870)

Total

9,502 ¥

parent attributable to common stock ¥denominated in

–

¥

2023

Dividends for first series of seventh-classpreferred stock based on the resolution
by Board of Directors

Average outstanding numberof shares of common stock(Unit: thousand shares)

Loansforeign currencies

Net income attributable toowners of the parent for the year

U.S. dollars

Net income attributable to owners of theThousands of U.S. dollars
Contract amount/notional principal

Hedge accounting

Valuation

Fair
value

Loans

March 31, 2023

63

Thousands ofOver
one year

Total

Total

(71)
¥

Transaction Major hedged
type
item

Hedge accounting

2023

Note:
Cash dividends per share represent the cash dividends
proposed by the Board of Directors as applicable to thefiscal year.

Net income:Cash dividends
Common stock

¥

10 ¥

10 $

0.07

First series of seventh-class preferred stock

¥

- ¥

30 $

-

Net assets per share as of March 31, 2023 and 2022 werecomputed based on the following information:
Thousands of

Fair
value

¥ (1,051)–¥ (1,051)

Millions of yen
Total net assets¥

Payment for first series ofseventh-class preferred stock
Dividends for first series ofseventh-class preferred stock

U.S. dollars

2023

2022

228,697 ¥250,860 $ 1,712,701(-)(25,000)

2023

(-)

(-)

(375)

(-)

Stock subscription rights

(116)

(86)

(868)

Non-controlling interests(2,164)(2,438)(16,206)

Amounts to be deducted from total net assets(2,281)(27,900)(17,082)

Net assets attributable to common stock
as of March 31, 2023 and 2022
Number of shares of common stock as of March 31,
2023 and 2022 used to compute net
asset per share (Unit: thousand shares)¥

226,416 ¥

222,959 $ 1,695,618

280,341

280,292

84

Report of Independent Auditor
Senshu Ikeda Holdings, Inc.

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93

Non-consolidated Financial Information of The Senshu Ikeda Bank (Unaudited)
Non-consolidated Balance Sheets (Unaudited)
The Senshu Ikeda Bank, Ltd.
As of March 31, 2023 and 2022

Thousands of U.S.
dollars (Note 1)
2023

Millions of yen
2023
2022

AssetsCash and due from banks
Call loans and bills bought
Monetary claims bought
Money held in trust
Securities
Loans and bills discounted
Foreign exchange assets
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Total assets¥¥

815,791
7,692–
15,010492,408
4,786,346
5,856
35,446
31,425
3,742
15,6395,919
6,299(9,029)6,212,550¥

1,717,216
368
49
24,521
654,157
4,526,877
7,506
32,74931,8604,080
14,085
5,859
7,419(12,305)
7,014,445$

5,615,913
2,000
4,371
329,655314
1,660
28,106
1,511
67¥

5,568,118
31,00084,792
1,073,435
302
513
26,2592,275
69$ 42,057,312
14,97732,7342,468,771
2,351
12,431
210,484
11,315
501

4

4

29

209
–
1,154
6,299
5,991,271

286
64
1,160
7,419
6,795,701

1,565
–
8,642
47,172
44,868,351

61,38588,86266,008216,256
4,976
45
5,022
221,278
6,212,550

61,38588,862
61,481
211,730
7,038
(24)
7,013
218,7437,014,445

459,709665,483
494,330
1,619,531
37,265337
37,6091,657,140$ 46,525,499¥

6,109,421
57,605–
112,4093,687,620
35,844,724
43,855
265,453
235,340
28,023
117,119
44,32747,172(67,617)$ 46,525,499

Liabilities and net assets
Liabilities
Deposits
Negotiable certificates of deposit
Payables under securities lending transactions
Borrowed money
Foreign exchange liabilities
Borrowed money from trust account
Other liabilities
Provision for employees’ bonuses
Provision for directors’ bonuses
Accrued retirement benefits for directors and audit & supervisoryboard members
Reserve for reimbursement of deposits
Reserve for point services
Reserve for contingent losses
Acceptances and guarantees
Total liabilities
Net assets
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Total shareholders’ equity
Net unrealized gain (loss) on available-for-sale securities
Net unrealized gain (loss) on deferred hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

¥

¥

¥

94

Non-consolidated Statements of Operations (Unaudited)
The Senshu Ikeda Bank, Ltd.
For the years ended March 31, 2023 and 2022

Millions of yen
2023
2022

Thousands of U.S.
dollars (Note 1)
2023

IncomeInterest income:Interest on loans and bills discounted
Interest and dividends on securities
Other interest income
Trust fees
Fees and commissions
Other ordinary income
Reversal of provision for possible loan losses
Recoveries of written-off claims
Gain on sales or disposal of fixed assets
Other income
Total income¥

39,433
6,341
1,384
26
19,799
2,961
3,102
284
1
670
74,005¥39,878
3,848
2,608
11
16,883
760
159
443
89
1,010
65,692$

295,31147,487
10,364
194
148,273
22,17423,230
2,126
7
5,017
554,220

Expenses
Interest expenses:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions
Other ordinary expenses
General and administrative expenses
Loss on sales or disposal of fixed assets
Loss on impairment of fixed assets
Other expenses
Total expenses
Income before income taxes
Income taxes
Current
Deferred
Total income taxes
Net income

95

¥

638
5
1,017
9,691
11,632
39,10766
161
2,078
64,399
9,605

902
5
72
8,718
2,120
41,234
101
177
1,836
55,168
10,524

4,777
37
7,616
72,575
87,111
292,870494
1,205
15,562482,281
71,931

201
1,126
1,327
8,277

631
438
1,070
9,454

1,505
8,432
9,937
61,986¥$

https://www.senshuikeda-hd.co.jp/

https://www.sihd-bk.jp/

SENSHU IKEDA TOKAI TOKYOSECURITIES CO.,LTD.
3-2-1, Toyosaki, Kita-ku, Osaka,Japan
Phone:81-(0)6-6485-0031
https://www.sittsec.co.jp/