February 7, 2022－Financial Results for the Third Quarter of FY2021 ending March 31, 2022
Main Questions and Answers
Q. Megabanks make large amount provisions for particular loan customer in

A. There are three reasons why we announced a dividend increase this time.

the third quarter. Are there the possibility of similar events occurring at

The first point is that we are firmly in sight of its achievement of the target

Chiba Bank?

in the current fiscal year and believes that there is a reasonable possibility

A. Within the information we have obtained so far, there is no situation inof an upside. With net interest income remaining strong and credit costs

which large increases in provisions are made for a particular customer.

remaining low, we are confident that we will be able to achieve our target,

While we have made reasonable provisions to date, we will continue toso we have decided to return profits to our shareholders. The second reason

consider an advanced and wide range of provisions in the future.

is that compared to the disclosed figure of ¥52 billion, the dividend payout
ratio would be around 31% under the previous dividend policy, and it may

Q. What are your thoughts on opportunities and risks to achieve thebe lower than the 30% that we consider to be the lower limit if the profit

consolidated profit target of ¥60 billion for the next fiscal year, the final

reaches a level above the disclosure. We recognize that the current dividend

year of the medium-term management plan?

payout ratio is subordinate to that of other banks, and we have decided toA. The plan for this fiscal year is ¥52 billion, but we are currently in a

increase the dividend because we wanted to secure a level with a little

situation where it is sufficiently possible that it will exceed the announced

leeway, rather than the barely-there level of 30%. The third is to ensure

figures, and it is trending steadily. Regarding the target of ¥60 billion forthat investors have the opportunity to buy our shares until late March, thethe next fiscal year, although there are negative factors such as cash-lessrecord date for dividends, by presently announcing it.

business, reduction in interbank commissions, and sluggish growth inAlthough we have not announced a return policy due to the COVID-19,

unsecured loans due to a decline in consumption, the positive factors

while continuing the objectives and spirit of the previous medium term

include the Bank of Japan's special interest, reduction in deposit insurance

management plan, we will consider actively returning profits, taking intopremiums, net interest income, and expenses. By having strong areas

account the situation of other banks and the total return ratio, including

compensate for weak areas, we aim to achieve ¥60 billion.

the share buyback which we conducted in the second half of last year.

Q. Please tell us the background behind the announcement of the dividend

Q. While Chiba Bank has kept its full-year forecast unchanged amid highincrease and what the Bank currently considers to be its policy of returning

progress up to Q3, please tell us about the prospects for a preventive

profits to shareholders in the future.

provision for credit costs and a portfolio replacement of foreign currency
1bonds in line with a rise in U.S. interest rates, etc. assumed in Q4.

in addition to net interest income from lending, it is expected to secure fee

A. Regarding the approach to credit costs, as we did in the previous fiscal year,

income related to de-carbon and other consulting. We intend to take thewe will make provisions in a wide range and in advance. While credit costs

lead in making sustainability-linked loans to large corporations and work

are expected to remain at low levels for the time being, preventive

together with TSUBASA banks.

allowances will be considered.
In addition, the Bank's foreign currency-denominated asset management isQ. Please tell us in more detail the background to the decision to increasecharacterized by holding fixed-rate investments at around 20% in U.S.

dividends rather than acquiring treasury stock this time.

dollar-denominated asset, thereby restraining interest rate risk. As a result,

A. Compared to the target of ¥60 billion for the next fiscal year, the current

unrealized gains and losses on foreign bonds have remained positive. Whilelevel of dividends is slightly above 30%, and in order to maintain a level

we may incur certain losses as we replace foreign bonds, we do not expect tothat is not subordinated to that of other banks, it is necessary to raise theincur significant losses on sales.

dividend to the higher ¥20 level. While confirming that profitability isfirmly in place one by one, we will raise dividends and compensate for theQ. If the deposit insurance premium rate is lowered as reported, will the

shortage by flexibly acquiring treasury stock.

expenses for the next fiscal year decrease or will the amount of the decreasein expenses due to the reduction be appropriated for something?

Q. If 10-year JGB yields remain at close to 0.25%, how much of the BOJ's

A. The insurance premiums paid by the bank at present are around ¥4 billion,

current accounts balance of just over ¥3 trillion can be shifted toand if the premium rate is lowered as reported, expenses will decrease byinvestments in yen-denominated bonds?

around ¥2 billion. While the Bank's policy is to actively invest in areas such

A. As JGB yields are rising, yen-denominated bonds will be one of theas DX and SDGs, it expects to reduce expenses as it originally has firmly

candidates to compensate for the decline in the BOJ's current accounts, butplanned investments in the current medium term plan.

the entire amount will not be allocated for the reduction in the current
account at the BOJ due to the termination of the COVID-19 Operations at

Q. How do you expect SDGs related products to contribute to earnings?

around ¥1 trillion and several hundred billion. We invest with anA. Cumulative execution of SDGs Friends Loans to SMEs exceed ¥200 billion,

awareness that yen-denominated bonds, foreign currency bonds, andand net interest income is expected to further expand in the future as theequity-related securities will be risk parity. Based on this policy, we intend

balance increases. For SDGs Leaders Loan, which was introduced this time,

to maintain a balanced portfolio.
2¥0.6 billion YoY. In the savings-type level-premium insurance business,
Q. What will be the balance of current accounts at the BOJ after the conclusion

income declined mainly due to the decrease in the attractiveness ofof the COVID-19 Operations?

products in the low interest rate environment. Conversely, the cumulative

A. While we currently have a balance of just over 3 trillion yen, it is expected

results up to Q3 were ¥5.6 billion, unchanged from the same period in thethat ¥1 trillion and several hundred billion will decrease by due to theprevious fiscal year. Even if income related to financial products for thetermination of the COVID-19 Operations, and the balance will be aroundcurrent fiscal year are subordinated to the plan, we would like to achieve¥2 trillion.

the plan for overall income by compensating for them with the strong
corporation sector income, etc.

Q. When yen interest rates rise in the future, do you expect the level of net

In addition, from a long-term perspective, we are working to shift from a

income to rise from the current level?

flow-oriented focus to a stock-oriented approach, and the balance ofA. In a period of rising interest rates, assets yields tend to rise ahead offinancial products in December has increased by about ¥80 billion

liabilities, which is a factor behind the increase in profits. Net interest

compared to March.

income also increased when interest rates rose prior to the global financial
crisis in 2008.

End

Q. How many corporate deposits do you have? What is the percentage of theborrowers?
A. Of the 270 thousand corporate depositors, there were 50 thousandborrowers with loans or other credit transactions.
Q. In the third quarter, the pace of increase in net fees and commissions
income slowed a little, and in particular, financial products income wasslightly weak. Please tell us about the short-term outlook toward the end of
the fiscal year and the outlook for the next fiscal year.
A. Looking only at Q3 in three months, financial products income decreased by3