Small Meeting "DX Strategy and Corporate Solutions"
Main Questions and Answers[September 28, 2021]
DX strategy
Q. Regarding profit opportunities from DX, what areas of profit opportunities do you consider to be significant at
this time?
A. We naturally believe that there are significant profit opportunities in the areas of consumer loans, card payment,
financial products such as investment trust and insurance, which already have a commensurate business scale. We
think the main field is to expand profit opportunities by providing digital "convenient" and "easy" functions inthese area to customers and using them by customers with whom we have not had contact in the past. Regional
trading companies, the advertising business, and EC malls are considered these main field as businesses to makethem even more convenient to use. These are also expected to be profitable by using digital to form a regional
ecosystem while keeping costs down.
Q. The U.S. and European banks are moving toward the self-development of systems development personnel andsystems development. How are you looking these in the future?
A. Until now, it has been actively developing human resources capable of assuming project managers in app andsystem development. First, it will firmly train 100 DX core personnel and 20 DX specialist personnel, which areplanned in the DX personnel certification system. In addition, in regard to system development that will occur inthe future, the Bank’s policy is to effectively utilize the resources of group companies, such as the Chibagin
Computer Service, and to respond by assessing the costs and effects of the portion it undertakes on its own andthe portion it undertakes in collaboration with other companies.
Q. What are your thoughts on the necessity of establishing a digital bank? Please tell us your views on the advantages
and disadvantages of establishing a digital bank under the Group.
A. Our basic strategy is to provide customers with convenient banks by maximizing the synergies between digital
functions and real branches for both existing and new customers, and we do not intend to "establish new" digitalbanks. If newly established, we think that the flexibility of systems and business design would increase, but withthe aim of becoming a digital and real-life convenient bank, we chose a strategy in which the bank itself would
become a digital bank.
Q. What are the biggest challenges and obstacles in DX?
A. Our strategy is to make our customers more convenient in both digital and real, but one of our competitors, online
banks, is also moving into the real market. "Speed" is becoming extremely important while there is a movement
such as advancing into the housing loans market using the banking agency business and establishing real contact
points for investment consultations by online banks. The Moonshot goals are based on an awareness of speed, andin the future, it will be necessary to continue to provide services and improve them rapidly. We think it is extremely
important to create organizations and human resources that enable speedy responses and to flexibly change themaccording to circumstances.
Q. Please tell us how to unify data using specific examples.
A. There are a considerable number of host data and databases on subsystems. Until now, in order to analyze date, it
was necessary to access each database and combine it with Excel and Access, which took time and effort. The
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data retrieval system introduced this time can carry out the retrieval across databases, and it seems that the data is
unified, and the retrieval speed is fast, and the analysis of a large amount of data becomes possible. There aresome functions that can visualize the data by graph, etc., and it can be utilized as a tool for the analysis of the data
more than before. In August, the Bank began returning to sales representatives of the branches a list prepared bydata engineers and date scientists at headquarters. For example, we have created a list of customers with few assets
in custody at the Bank among large payroll depositors from a unique perspective that has never existed before,
and we are able to efficiently provide the list. Currently, personnel at headquarters use the tool, but when it iseventually available to all employees, including those in charge at sales at branches, they will be able to create alist from each perspective. We would like to make maximum use of the data search system to advance databasemarketing and make personalized proposals.
Corporate Solutions
Q. Can you continue to find new growth drivers for corporate solutions? When syndicated loan-related commissions
leveled off, the growth in corporate solutions revenues may also level off.
A. In addition to large-scale projects such as syndicated loans and renewable energy-related projects to large
companies and medium-sized companies utilizing alliances, initiatives such as syndicated loans to small andmedium-sized companies and loans with covenants that can also provide consulting have led to solid earnings
growth. With the government's international commitment to reduce greenhouse gas emissions to zero by 2050,
we expect to expand environment-related loans in the future and believe we are in a position to leverage ourstrengths. In non-finance-related businesses, the Bank is steadily expanding its advisory services for companies,
and the establishment of Business Succession Consulting Division has enabled it to respond to business succession
in an integrated manner. As a result, the Bank is expected to expand its business in non-finance fields as well. We
believe that deepening our solutions in line with changes in our customers' operating environment will result in acontinued increase in corporate solutions revenue.
Q. Please tell us about the structural factors and backgrounds that have been continuously found for growth topics,
such as private placements and cashless.
A. We believe that the background is that the Bank maintains the lowest level of OHR among Japanese banks, andthat it is possible to actively make positive investments when necessary. Under the investment plan of the current
medium-term management plan, positive investment outweighs investment in maintenance, upkeep, and otherareas. In addition, from the perspective that we have been able to find growth topics, we believe that there ishealthy competition in the Tokyo metropolitan area, which is our operating base, and that the background to thisis that information will come about what customers want and what we should invest in. In 2006, the Bank entered
the inheritance and trust business, which was quite early as a Japanese bank, but it has become one of the pillars
of current growth in fee and commissions income. Recently, we have entered the cashless business on its own andis expected to contribute to future increases in fee and commissions income. We have also actively entered thebusiness, which entails major investment at the outset. Currently, we believe that "deregulation of the scope ofbusiness of banks" is an opportunity to advance new businesses, and it is pushing ahead with initiatives for new
businesses, such as regional trading companies and remote consulting. Going forward, the Bank will continue tomake forward-looking investments, and establish a system within the Bank so that it can proceed with specificdeliberations on further new businesses, while closely monitoring developments in revisions to the Banking Act.

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Q. What types of support are specifically provided by the departments and personnel of ICT advisory? Please also
tell us about the scale of revenue.
A. The Bank began providing ICT consulting services in April 2021, and a cumulative total of around 50 consultations
on projects from branches. Of these, 7 consultations have reached consulting contracts, including agreements.
Examples of specific initiatives include the establishment of a sales management system aimed at improving
operational efficiency and support for the introduction of a paperless system. By providing support for the designof business systems that reflect the intentions of employees through interviews and other means, we have received
a certain level of evaluation from customers. In response to customer needs, the Bank collaborates with groupcompanies such as Chibagin computer services and external vendors when introducing IT services. Three
employees members of the Advisory Department of the Corporate Business Division provide customer support,
all of whom have experience seconding to an IT system vendor or a consulting company. Currently, we have three
employees, but if it expects to expand operations, it would like to increase the number of employees. Consultant
revenues range from ¥1million to ¥5million per case, and incidental effects include introducing a system that
introduces group companies such as Chibagin Computer Services and the amount is several million yen to over
¥10million per case. Therefore, if the number of consultants increases, we will generate ¥100million units ofrevenues in the future and contribute to consolidated group revenues as well as non-consolidated revenues.
Q. What are the number of personnel and years of experience in the department in charge of business succession?
Can you conduct all business flow almost on our own?
A. The Bank has eight employees in charge of M&A, and plans to increase the number of employees by one from
October to nine. In addition, there are four consultants, mainly in charge of internal succession, and the total of
13 employees in this department. The years of experience of M&A employees has matured to the longest of six
years, and to the shortest of three years, and they are assigned to trainees before assignment, ensuring that they
have skills. All M&A workflows are internalized, and when necessary, we conducted by ourselves by confirming
the opinions of specialists such as lawyers and accountants.
Q. What is the potential number of business succession projects and the scale of revenue? In addition, what are yourmain competitors?
A. If the number of companies with shareholders' equity of 100 million or more and the age of their managers of 60
years or older were to be selected, there would be about 2,800 projects, so there are many potential projects. We
are aiming for an annual revenue scale of around ¥1 billion in the final year of the current medium-term
management plan. Competition with companies specializing in M&A and other financial institutions is becoming
fierce. Amid various strategies that regional financial institutions can take, the Bank’s main focus in Chiba
Prefecture is to provide services on our own. The three pillars of M&A as well as internal succession and employee
succession are profit opportunities for the Bank, and customers are able to choose from a broad range of options.
Q. Hearings on the needs of manager are not limited to business succession, but also lead to other business
opportunities. What methods of picking up information? How do you deploy information to other departments?
A. Branches are regarded as the channel for corporate sales as well as for managers, and General Manager of branches
and other sales representatives firmly pick up customer needs. By engaging in internal succession and M&A,
which had been undertaken by separate departments, in one department, a system was established in whichbranches can pick up customer needs in an easy-to-understand manner. Each department deepens needs bycarefully picking up customer needs through branch channels. In terms of cooperation between departments in3

headquarters, the Corporate Business Division holds regular meeting and discussions on projects are also, so weare able to build a system that enables it to provide comprehensive solutions to customers.
Others and Common
Q. What is your overall vision for future initiatives in DX and corporate solutions?
A. We believe it is necessary to respond speedily and undertake agile initiatives other than ensuring and protecting
customer information, while DX is implementing a variety of initiatives at each bank. It is a matter of course for
IT companies to ensure speedy efforts, and we would like to win trust by becoming a company like an IT company,
although it is a bank. Some customers, especially younger customers, choose other banks, even if they live in
Chiba Prefecture and our bank is nearby. In this environment, the Bank's vision of a digital bank is to enhance theappeal of the app by firmly promoting digital initiatives, and at the same time, to provide both services at realbranches so that customers can come to branches for consultations on housing loans and financial products. Someareas will take a long time to become profitable, and there will be times when we fail, but we believe that thesewill be supported by corporate solutions based on our close relationships with regional companies and businesssuccession for the next generation. If either of these is lacking, it could undermine the foundation of our bank, andwe want to make sure that we do everything we can to further enhance the trust and reputation we have earned sofar.

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DX strategy
Q. Are there differences in profitability, etc., between those who use and do not use the Chibagin app?
A. The number of customers who use Chibagin app exceeds 380,000. Compared to customers who do not use apps, theprofit per account differs by about 30%, and the profit of customers who use apps is about ¥300 per month higher.
Profitability is even higher when compared to customers who do not sign up for loans, financial products, or credit
cards. The reasons for the differences in profitability include the fact that customers using the app use the Bank as theirmain bank and also that the number of times they access the Bank has increased dramatically due to using of the app.
The number of other bank transfers released in June, and card loan applications are also growing. We think that the useof the app will make a further difference in profitability in the future because it will lead to a lot of use of our services.
We believe it is extremely important to increase the number of users of apps and to promote the addition of functions
and services so that customers who use the app feel it is convenient.
Q. With regard to the expected effects of the introduction of a search system to unify data, will you be able to attract
customers from other banks? If so, do you think you will be able to get customers in Chiba prefecture to switch fromother banks, or do you think you will be able to approach customers outside of Chiba prefecture?
A. Regarding the list provided using DYNATREK, it started in August, and we think that the effects will be apparent in
the future. The list that had been provided in the past was an event-based marketing system, such as a list of customers
who had a large deposit in an account at a certain timing, for which the list was provided as the event occurred. On theother hand, the list that can be provided under the new system is a list based on data that the Bank did not previously
have as its starting point, such as a list of customers who have a record of paying property taxes from their accounts. In
addition, it will be possible to easily collect data on how salaries are transferred, and we will create and distribute a listof our customers with whom we have had few transactions or with whom we have not been able to make contact
although there is room to expand transactions. Rather than attracting customers from other banks, we intend to distributeprimarily a list that is intended to further deepen transactions with our customers. As a result, we believe that it is basedon our customers' data, even though it may be other banks' customers, and that we will deepen our customers. In termsof whether customers are in Chiba prefecture or those outside of Chiba prefecture, the large population of individual
customers resides in Chiba prefecture, so we think that customers in Chiba prefecture will be the main customers first.
Q. Regarding mid-career recruitment of external human resources for DX, recruitment of persons requiring high personnel
costs also considered? Please also tell us whether there is a potential acquisition of the FinTech company itself or what
FinTech services you want.
A. We actively recruit mid-career personnel with experience in digital technology, marketing, and digital business planning,which can be outside specialists, and in some cases, we recruit personnel at relatively high labor cost levels in within
our compensation. In addition, acquisitions of companies that have the digital services which we want, cannot be
considered unless such companies emerge. As announced in August, we have formed a strategic partner with “ChangeInc.”, a publicly traded company that provides IT consulting. We have also collaborated as a partner to launch Chibagin
Market Co. Ltd., a regional trading company, and to develop human resources and promote administrative DX in local
governments. Change involves many points of contact with companies with a variety of technologies, and if we find acompany that can become our partner, we believe that we may consider acquiring.

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Q. Rather than having banks as the parent company, the holding company may be easier to move forward with the regional
ecosystem.
A. Discussions are ongoing each time, but at present there are not so many tax and regulatory benefits, and we recognizethat issues such as double governance, maintenance costs, and governance of group subsidiaries will arise. We believethat governance to Group subsidiaries is working under the current structure, and at this point the need to establish aholding company structure is low. However, in cases such as collaboration with a different industry or the provision of
non-financial services, such as starting a new business and establishing a business company, there is an advantage tobeing affiliated company rather than a subsidiary of a bank, as it is more able to insulate itself from risks or does not
require a procedure for approval than it is to be a subsidiary of a bank. Going forward, we will continue to examine theadvantages and disadvantages while carefully confirming them.
Q. What are your thoughts on the development of personnel who can manage DX personnel? Will they really have the DX
management skills or be able to create that vision?
A. We assume that those who are certified as specialists under the DX certification system are those who can measure theirskills and aptitudes. In addition to securing specialist personnel through mid-career recruitment, we believe that thedevelopment of human resources on the management side will be sustained by continually developing internal
personnel with core and specialist under the certification system. We believe that raising the base literacy of all
personnel will enable the development of such human resources, and this situation is such that we recommend theacquisition of IT Passport as bank-wide initiatives. Currently, DX efforts are being led by employees who already havethe skills, such as those with outside trainee experience and mid-career recruits. By working with skilled personnel on
DX, we intend to cultivate the human resources under it without interruption.

Corporate Solutions
Q. What do you think about the view that some corporate solution revenues may be preempting interest income?
A. We believe that finance-related fees are appropriate compensation for arranging or monitoring activities, and we do notthink that interest revenues are preemption. Fees for M&A, advisory services, and business matching are also given ascompensation for such services.
Q. What is the breakdown of the target amount for sustainable finance? (Does it include housing loans and whether there
is a portion that will be transferred from the previous ordinary capital expenditures.)
A. The current result is about ¥320 billion. Going forward, we have set a target of ¥2 trillion for sustainable finance and¥1 trillion for environmental finance. We think that other than environmental finance, the target will be social-related
nursing and nursing care services, poverty resolution, the development of new drugs and others. Transition finance will
also be included in this target. We also plan to include solar power generation on the roof and switching to EV vehicles,
and the construction of zero-energy houses (ZEH) that consume no energy as a whole. However, the definition may bechanged from time to time in response to changes in the trend of the world in the future, and we will respond flexibly.
Q. Do you provide support to corporate customers in developing and implementing ESG and SDGs strategies?
A. Regarding the status of customers' efforts toward ESG and SDGs, we have hearings with medium-sized companies andlarger, including listed companies in Chiba Prefecture. However, we feel that there are still few companies withawareness of ESG, such as decarbonization and other issues, including in-house systems. In fact, some local
governments have already started SDGs registration system in neighboring prefectures, but Chiba Prefecture is in astate where there are several local governments that will proceed in the future. We feel that it is necessary for the Bank6

to conduct educational activities not only for corporations but also for local governments. As a leading bank in theregion, we believe that the role we should play in this field is extremely large. We also recognize that the promotion ofregional ESG finance is a key role for regional banks. As an entry activity, we would like to conduct not only financing,but also enlightenment activities that contribute to ESG and SDGs, such as decarbonization, mainly for small andmedium-sized companies, through advisory services and other activities. Specifically, it is considering whether advisory
services can support the acquisition of ISO14001 and the formulation of targets for reducing CO2.
Q. How do you define environmental finance? Is it consistent with the definition in the Bank of Japan's climate change
operations?
A. The details of the Bank of Japan's climate change operations will be confirmed at the briefing scheduled for October.
However, the definition of the operations for climate change is extremely narrow because it is in accordance with andequivalent to the principles. The current result of the Bank's target for environmental finance of ¥1 trillion is mainly
project finance for renewable energy and is basically included within the definition of the Bank of Japan. However, weconsider that it is important whether sustainable finance for SMEs will become the object of the Bank of Japan's climatechange operations. With green wash and other problems, the Bank of Japan has not clearly stated the criteria, whichmakes it difficult to draw a line. We believe that it is necessary to establish standards for the extent to which lending to
SMEs is referred to as green finance in the future. We think that the measurement of some quantitative effects, such as
contributing to the environment and society, will be a key point, and we feel that we need to align our awareness with
the Bank of Japan's policy.
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