SHIZUOKA BANK GROUP INTEGRATED REPORT 2022

2022
SHIZUOKA BANK GROUPINTEGRATED REPORTFor more detailed
information, pleaserefer to our website.

Printed in Japan

Economic Overview of Shizuoka Prefecture
Osaka

Industrial Characteristics

Tokyo

Shizuokaaspect to the regional
economy. We expect that
Shizuoka prefecture will be
more internationalized,
stimulating the interchange of
people and ideas with the majorurban centers of Eastern Asia, and act as an important driving force
for the regional economy.
In recent years the prefectural authorities have been operating a
number of schemes to encourage companies in the medical
treatment, pharmaceuticals, chemicals, and optical technology
industries, among others, to set up operations in the so-called“Shizuoka Triangle Research Cluster” (spread across the prefecture’s
eastern, central, and western districts) as a means of developing anext-generation industrial base.

Shizuoka Prefecture is situated midway between the two major
consumer markets and industrial centers of Japan — the Nagoya
region plus the Osaka-Kyoto region to the west, and the YokohamaTokyo region to the east. Because of this location at a busy
“crossroads” of the nation, it has historically developed into asignificant center of manufacturing industry. The convenient locationof Shizuoka Prefecture in transportation terms has caused the growthof a strong industrial base. The prefecture is one of the country’s
leading manufacturing areas. The wide variety of industries
represented within Shizuoka has led to it being dubbed “the industrial
department store.” Corporations active in Shizuoka include worldleading enterprises such as Toyota, Honda, Suzuki, and Yamaha, andthe prefecture is renowned for its concentration of export-oriented
manufacturing companies. Many of these firms have set up production
subsidiaries overseas, which are creating a growing international

Economy in Shizuoka Prefecture and Current State● Positions as distribution hub between Tokyo and Osaka/Nagoya.
●R epresents leading manufacturing prefecture in Japan.
● Owns a lot of export-driven companies handling machinery of transportation andmusical instruments and etc.

● Has many representative tourist locations with rich natural resources.
● The Izu Peninsula was certificated as a UNESCO Global Geopark in Apr. 2018. Global

Industrial structure in Shizuoka Prefecture• Amount of shipments of manufactured goods etc.
: JPY 17,154.0bn 3rd largest in Japan (2019)
Transportation
Machine25%

Geoparks are natural parks of topographical and geological significance. There are nine
UNESCO Geoparks in Japan.
Others30%

Mt. Fuji

Source :Shizuoka Prefectural
Tourism Association

UNESCO World Cultural Heritage

Chubu Odan Expressway

Pulp, Paper
5%
Beverage,
Tobacco, Feed
6%

The Port ofTagonoura●Shizuoka Bank

No. of listed companies with
HQs in Shizuoka Prefecture

The Port of Shimizu●Star Micronics

Tomei
Expressway

Listing

Mt. Fuji Shizuoka Airport

No. ofcompanies

TSE Prime
TSE Standard
TSE browth
Total●Hamamatsu Photonics●Yamaha●SuzukiFood
8%

Source: Survey on industrial statistics by METI

●Shibaura Machine

Shin-Tomei
Expressway

Electronic

Chemical Machine
15%
Industry
11%●Yamaha Motor
The Port of Omaezaki
Izu Peninsula

20
30
1
51

*As of the end of Mar. 2022

Economic scale of Shizuoka Prefecture● Accounts for 3% share of all-Japan and ranks 10th in the scale of economy in Japan.
●H as greater GDP than total GDP of 4 prefectures in Shikoku or 3 prefectures in Hokuriku.
● Its GDP is ranked next to those in Kazakhstan, Algeria, and Hungary.

Shizuoka Prefecture indices
Share of all-Japan

Population

3.63m

2.9%

10th of 47 (2020)

No. of households

1.61m

2.7%

10th of 47 (2021)

Nominal prefectural GDP

JPY 17.5tn

3.1%

10th of 47 (FY2018)

Per-capita income

JPY 3.432m-

4th of 47 (FY2018)

190k

3.0%

10th of 47 (2019)

JPY 17.2tn

5.3%

3rd of 47 (2019)19th of 47 (2020)

No. of business establishments
Amount of shipments of manufactured goods, etc.

JPY 188.7bn

2.1%

Fishery production volume

180k tons

5.7%

4th of 47 (2020)

No. of industrial locations

54

6.5%

3rd of 47 (2020)

No. of new housing starts

21k

2.5%

10th of 47 (2021)

Agricultural output

1

National ranking

Shizuoka Prefecture economic scale
Rank

9
10
11
Rank

55
56
57
58
59

Prefectural GDP (FY2018, Nominal)
Prefecture/Region(US$ billions)

Hokkaido Prefecture
Shizuoka Prefecture
Ibaraki Prefecture
4 prefectures in Shikoku
3 prefectures in Hokuriku

177.2
157.5
126.6
130.2
117.7

GDP comparison with countries (2018)
Country (Region)(US$ billions)Kazakhstan
Algeria
Hungary
Shizuoka Prefecture
KuwaitUkraine

179.3
175.4
160.4
157.5
138.2
130.9

*Sources: Economic and Social Research Institute (ESRI)
Cabinet Office, Government of Japan

Shizuoka Bank Group at a Glance
NURTURING THE VISION OF A PROSPEROUS COMMUNITY
True to a corporate philosophy, which aims to “expand dreams and affluence with our community,” the Shizuoka Bank Groupmakes an ongoing contribution to the development of the region around Shizuoka Prefecture, which forms the core of its
business base. This corporate philosophy incorporates not only an economic dimension but also a cultural one: living inharmony with the local communities and the people we serve, sharing prosperity with them as a home-grown local banking
group and a member of the regional community, and also helping local people to live more fulfilling lives.

A FIRST-CLASS REGIONAL BANK GROUPThe Shizuoka Bank Group comprises Shizuoka Bank and thirteen Group companies, and is one of the largest regionalbanking groups in Japan. Centered on Shizuoka Bank with the Head Office, 177 branches and 25 sub-branches, the Group
serves the needs of customers not only within Shizuoka Prefecture, its home region, but also in three major economic
centers in Japan, namely Tokyo, Osaka, and Nagoya, all of which are comparatively nearby. For overseas operation, theBank operates in New York, Silicon Valley, Brussels, Hong Kong, Singapore, and Shanghai.
The Structure of the Shizuoka Bank Group(As of July 1, 2022)

Domestic
Shizugin Management Consulting Co., Ltd.

Head Office and Branches 178

Shizugin Lease Co., Ltd.

Sub-branches 25

Shizugin IT Solution Co., Ltd.

Subsidiaries 13

Shizugin Credit Guaranty Co., Ltd.
Shizugin
CardCo.,Co.,Ltd.
Ltd.
ShizuginDC
Lease
Shizuoka
Co., Ltd.
Shizugin Capital
Lease Co.,
Ltd.

Consolidated Subsidiaries

Shizugin
Securities
Co., Ltd.
ShizuginTM
LeaseCo., Ltd.
Shizugin General Service Co., Ltd.
Shizugin Mortgage Service Co., Ltd.

The Shizuoka
Bank, Ltd.

Shizugin Business Create Co., Ltd.
Shizugin Heartful Co., Ltd.
Shizuoka Liquidity Reserve Limited
Shizugin Saison Card Co., Ltd.

Equity-method Affiliate
AmericasBranch 1

New York

Representative Office 1

Silicon Valley

EuropeSubsidiary 1

Shizuoka Bank (Europe) S.A.

Asia
Branches 2
Representative Office 1

Hong Kong, Singapore
Shanghai*	Other than the above-mentioned Group companies, Monex Group, Inc. and Commons Asset Management, Inc. are equity-method affiliates of Shizuoka
Bank.

Contents
Economic Overview of Shizuoka Prefecture................................................ 1
Shizuoka Bank Group at a Glance.............................................................. 2
Message from the President....................................................................... 3
CFO Message.......................................................................................... 11
Dialogue between CEO and Outside Director........................................... 15
Shizuoka Bank Group’s Value Creation Process....................................... 21
14th Medium-term Business Plan “COLORs”........................................... 23
Realizing Sustainability Management........................................................ 25
Transformation to a Holding Company Structure...................................... 27
Financial Highlights................................................................................... 33
Non-Financial Highlights........................................................................... 34
Alliance with Regional Banks.................................................................... 35
Initiatives for SDGs................................................................................... 37
Initiatives for the Environment................................................................... 39
Human Capital Strategy............................................................................ 43

Strengthening of Corporate Governance.................................................. 51
Thorough Enforcement of Compliance and Risk Management.................. 56
Region-based Relationship Banking......................................................... 60
Meet needs of corporate customers......................................................... 61
Support for Overseas Business Development........................................... 63
Strategic Investment................................................................................. 65
Independent Auditor’s Report................................................................... 67
Consolidated Balance Sheet..................................................................... 72
Consolidated Statement of Income........................................................... 73
Consolidated Statement of Comprehensive Income................................. 73
Consolidated Statement of Changes in Equity.......................................... 74
Consolidated Statement of Cash Flows.................................................... 75
Notes to Consolidated Financial Statements............................................. 76
Key Consolidated Financial Indicators....................................................... 99
The Shizuoka Bank................................................................................. 102
2

Message from the President

Aiming to be a Corporate Group Committing
itself to the Future of the Region and Producing
Growth of the Region
Responding to change as a driving
force for increasing sustainability
The impact of the coronavirus disease (COVID-19) has alreadylasted for two and a half years, and is showing signs ofbecoming further prolonged. In addition, the upsurge in raw
material prices, fuel prices, and logistics prices are weighing
heavily on corporate earnings. These factors, combined withmultiple domestic and overseas factors that include theinvasion of Ukraine by Russia, China’s zero-COVID policy, therapid interest rate hike in the U.S., and the issue of theweakening yen, have resulted in the economic situation
remaining unpredictable, as evidenced by the number ofcorporate bankruptcies (national) in the period from January toJune 2022 showing a year-on-year increase for the first time in
two years.
While responding to these current conditions is an urgent
issue, it is essential from the perspective of sustainability to not
only deal with the long-standing social issue of the super-aging
society, but also to respond to digitalization, decarbonization,and other so-called “changes of the times” that are irreversible
and mark a departure from the world as we once knew it.
These changes are accelerating day by day, resulting inconcerns that all businesses, without exception, will fall behindover time if they do not take swift action with a view to the
future. What is important is simply not to be pessimistic about
the situation, but to find opportunities amid the changes thatwill lead to the future of the company, and turn these into adriving force for increasing sustainability. This should be thekey to overcoming the impasse and turning the situation
around.
In order to realize the creation of a sustainable local
community, I would like to see the Shizuoka Bank Group, as

3

an involved party, combine the strengths of the Group as awhole and increase our endeavors while making it our corebusiness to support the resolution of issues faced by local
communities and customers.

 Entering the final year of the 14th Medium-term
Business Plan
The 14th Medium-term Business Plan “COLORs,” the threeyear plan we have been working on since April 2020 in orderto achieve sustainable growth together with the region in any
era or business environment, has entered its final year. During
the period of the plan, we established for the first time our
10-year Vision of committing ourselves to the region from alonger-term perspective, and we are aiming to “change to a
problem-solving corporate group assisting regional customers
with hands-on support,” which is our Medium-term Business
Plan Vision, with this being our role over the three years inorder to realize this vision. We designated the first year of the
14th Medium-term Business Plan as the year to change“mind,” and the second year as the year to change “action,”
and we focused our efforts on both financial support andbusiness support during the unprecedented economic crisisbrought about by the COVID-19 pandemic. In fiscal 2022, thefinal year of the plan and the year for realizing achievements,
we are working on various measures with the aim of becominga group that customers initially consult on any issues andneeds for the future, based on solid relationships of trust withthe region and with customers (see Figure 1, P.5).

Hisashi Shibata
President4

Progress of the 14th Medium-term
Business Plan

In terms of the Group Sales Strategy, we focused on the threeneeds of “banking,” such as deposits and loans, “corporate”
for corporate customers, and “life-plan” for individual
customers, and worked closely with each individual customer
in efforts to assist them in solving their problems (see Figure 2).
Firstly, as common initiatives for “banking needs” and“corporate needs,” in addition to focusing on cash flow
support for customers affected by the COVID-19 crisis, we
extended support from the four perspectives of “cash flow andmanagement improvement,” “business reconstruction,” “corebusiness support,” and “business succession,” based on the
results of interviews regarding business conditions and needsin anticipation of the post-COVID-19 era. In terms of “cashflow support,” as over 30% of recipients of “zero-zero loans”(virtually interest-free, unsecured loans), which are a support
measure offered in a public-private partnership, have begun
repayments, we responded to consultations based on actual
management situations, and also engaged in detailed
responses, such as providing additional loans to customers
accounting for approximately 40% of those. In addition, in
terms of “management improvement,” we increased thenumber of personnel in the Business Support Department at

the headquarters by 20% to strengthen the structure. We also
selected some 190 recipients whom we recognized as needinghands-on support, and provided in-depth support inaccordance with the situations faced by each company. In
fiscal 2022, we will strengthen our support by increasing thenumber of recipients to approximately 230.
Furthermore, we worked on a wide range of activities,
including subsidy application support for “businessrestructuring,” such as entry into new fields and businesssector and business line transition, support for challenges suchas business facilitation and structural reform through personnel
placement services for management personnel and workready personnel, etc., and support for “business succession,”
which is a social problem facing local communities.
With regard to “corporate needs,” in addition to these
initiatives, we strengthened our response to trends that will
significantly transform the industrial structure, including
digitalization and decarbonization, from the perspective ofregional sustainability.
Firstly, as a response to the rapid digital shift in society, we
collaborated with Shizugin IT Solution Co., Ltd., a Group
company, to launch digitization support services starting fromfiscal 2021 aimed at improving the profitability and productivityof local companies by improving operational efficiency throughsystems introduction, promoting workstyle reforms by utilizing
cloud services, and other measures. At the same time, in orderto strengthen our support as a group, we are also focusing ourefforts on human resources development, aiming to develop
700 personnel within the Bank by 2030 who can appropriately
coordinate issues and needs with solutions.
In addition, interviews with approximately 2,600 customers
conducted from August to September 2021 revealed that

[Figure 1][Figure 2] Basic Strategy 1: Group Sales Strategy

Aim to “change to a problem-solving corporate group” in the 14th Medium-term
Business Plan with a view to realize the picture targeted in the long term (10-year Vision)

Get into a habit of promoting sales by gathering all strength in the GroupIn this section, I would like to explain the three basic strategies
and the 10-year strategy while reviewing the results for fiscal
2021 with regard to the progress of the 14th Medium-term
Business Plan.

 Basic Strategy 1: Group Sales Strategy

Picture Targeted in the Long Term (10-year Vision)
A corporate group committing itself to the futureof the region and producing growth of the region

14th Medium-term Business Plan

“COLORs”
VisionChange to a problem-solving
corporate group assistingregional customers withhands-on support

FY2020“Change of Mind”
Support customers under
the COVID-19 crisis● Conduct HR interaction
among Group companies●

5

Three Basic Strategies and10-year Strategy
1. Group Sales Strategy
2. Innovation Strategy
3. Business Portfolio Strategy+ Region-producing Strategy

FY2021“Change of Action”
Shift from financial support tobusiness support● Develop whole asset sales andasset management business

FY2022“Realization ofAchievement”●●

Customers initially consult
Shizuoka Bank Group on
any issues and needs

Corporate Needs
Life-plan Needs
Inheritance/●
Advanced consulting
Life-plan consulting
Business● Propose optimal
Succession
procurement methods●

Respond to diverse
needs by maximizing
the functions of eachGroup company andpartner

Banking Needs● Deposits, loans,foreign exchange,etc.

Business
partners
Leasing

Securities

Consulting

Enhance products and services

CapitalShizuoka Bank Group

Banking

Provide problem-solving menus as a GroupNew business development

TrustsReal estate

Regional trading
companies

Credit cardssome 70% of companies have not yet embarked on
decarbonization, which is becoming increasingly important ona global scale, and we are seeking to broaden our problemsolving menus and strengthen our support in this area. To thisend, in October 2021, we established sustainability financetargets for fiscal 2030 (cumulative investments and loans of 2
trillion yen, including environment-related finance of 1 trillionyen), and in fiscal 2021, we focused our efforts on promoting
SDGs and decarbonization in the region through Positive
Impact Finance (PIF) for small and medium-sized enterprises(SMEs), and loans such as Sustainability Linked Loans. In
addition, in April 2022, we set up the Industrial Transformation
Support Project Team in order to strengthen problem-solving
support with an eye on changes in the industrial structure.
Going forward, we intend to make advances with crossregional consideration on how to understand the supply chain
and identify challenges and ways to support businesses.
In recognition of its support for business operators
leveraging their strengths in PIF for SMEs and relationshipbanking, the Bank was awarded the “Silver Award (Minister ofthe Environment Award),” the highest ranking for regionalbanks in the indirect finance category, at the Ministry of theEnvironment’s 3rd ESG Finance Awards Japan announced in
February 2022.
With regard to “life-plan needs,” we are strengthening oursales structure to provide one-stop support for asset building,asset management, and asset succession in anticipation of anera of 100-year lifespans, based on the perspective of financegerontology*.
Firstly, for the medium- to long-term asset building of ourcustomers, we focused our efforts on sales of packaged
products for those new to investing, both through face-to-facesales and remotely, in collaboration with one of the Group
company, Shizugin TM Securities, and our equity-method
affiliate, Monex Group.
In addition, for asset succession, the Bank launchedtestamentary trust services in April 2021, in addition to offering
inheritance measures utilizing life insurance. Our policy by
doing so is to strengthen our support, including proposals forpotential needs, in all aspects of asset building, asset
management, and asset succession, not only by handlingtestamentary trusts but also by identifying total assets.
In fiscal 2022, although we expect the environment
surrounding our customers to become increasingly severe due
to multiple domestic and overseas factors, we aim to improve
our profitability autonomously by working together as a group
to solve the various issues facing customers in each area of“banking,” “corporate,” and “life plan.”apps and contact centers, and we have also started building a
corporate portal site aimed at expanding channels forcorporate clients, which is scheduled to commence operationin September 2022.
In addition, as well as starting system development for datautilization, which is becoming increasingly important inmanagement strategy, we have made progress towardeliminating 90% of the more than 6,000 paper forms in orderto realize digitalization and paperless operations throughworkflow transformation, and have eliminated approximately
50% of this figure so far.
Next, in the “global strategy,” we reviewed the roles of ouroverseas offices amid significant changes in the environment
surrounding our overseas business. In addition to integrating
the Los Angeles Branch into the New York Branch, we became
the first regional bank to establish a “Silicon Valley
Representative Office” as a hub for collecting information on
advanced technology and businesses for start-up firms, andchanged the Singapore Representative Office into theSingapore Branch to serve as a headquarters for benefitingfrom the growth of Asia.
Going forward, we will continue to make maximum use of
our overseas network, which is one of the Group’s strengths,
and will strengthen the profitability of our overseas business bypromoting projects and engaging in mutual use of overseas
bases with other regional banks.
In the “strategic investment and cross-industry
collaboration,” we aim to provide high-quality services that theGroup cannot provide on its own. In fiscal 2021, we launched
new initiatives through cross-industry collaboration, including
the joint development of a matching website for home buyers
and housing companies in collaboration with iYell, a home loantech company. In addition, we are working to diversify ourearnings by securitizing and purchasing housing loan bonds
from ARUHI Corporation and au Jibun Bank, with which we
collaborate on loan operations. The knowledge and expertise
we have gained through cross-industry collaboration, which
we have promoted as an individual initiative of the Group, willlead to investment effects beyond the framework of crossindustry collaboration, including the building of networks withstart-up companies and developing “businesses for start-up
firms,” that are expected to be the next growth drivers.

[Figure 3] Basic Strategy 2: Innovation Strategy
Existing business fields Basic Strategy 2: Innovation Strategy
Under the Innovation Strategy, we made progress in three mainareas: “digital transformation,” “global strategy,” and “strategic
investment and cross-industry collaboration” (see Figure 3).
Regarding “DX” first of all, our goal is to realize thetransformation of the Group itself (CX) with the aim ofenhancing corporate value over the medium to long term, andwe are creating new business and deepening existing businessby utilizing data and digital technology. In fiscal 2021, in orderto strengthen non-face-to-face channels, we proceeded withsystem development that expands the functions of mobile* A study that researches issues and solutions related to economic activities, including
consumption, asset management, and investment by the elderly. Emphasis is placed on
creating a virtuous cycle that extends the lifespan of both health and assets.

New business fields
Global Strategy

Existing
methods
andexpertiseNewmethods
andexpertiseInnovation

Develop non-Japanesefinancing projects● Gather the latest information andbring it back to Japan● Harness growth markets●

DigitalTransformation

Innovation

Operations BPR
Smartphone financial services● Utilize information●●

Strategic Investment Innovation
and Cross-Industry
Collaboration
Monetization of existing partnership
schemes● New strategic alliances●6 Basic Strategy 3: Business Portfolio Strategy
Under the Business Portfolio Strategy, we mainly promoted
initiatives in the “human resources strategy” and “Market &Tokyo strategy” (see Figure 4).
Firstly, in the “human resources strategy,” we areaccelerating initiatives to allocate human resources, develop
human resources, and reform the corporate culture in line withthe basic strategies and 10-year strategy in our 14th Mediumterm Business Plan. In fiscal 2021, we undertook reforms to
the personnel management system for the first time in 20 years
in order to reform the business model by developing humanresources so that each individual officer and employee is able
to keep trying (challenge) while thinking and acting
independently (autonomy) and accepting various opinions andvalues of others (diversity).
In addition to being the first financial institution to reform thepersonnel evaluation system, changing it from the conventional
goals management system to a mechanism that evaluates[Figure 4] Basic Strategy 3: Business Portfolio Strategy
Management Resources/Risk Capital
Allocation to ensure optimization throughout the Group as a whole

Human
resources
strategy

7Market &Tokyo strategy

Asset allocation

OKR and Value (see P. 44), we developed an environment inwhich employees can envisage their desired career and takeon the challenge of realizing it, including by expanding thesystem for side businesses and concurrent service atcompanies both within and outside the Group, as well as bysetting up an internal venture program. We received 59
applications for the internal venture program, and I feelencouraged that we are gradually fostering a culture of taking
on challenges.
If we are to assist customers in solving the diverse problems
they face, we need to have a high level of expertise, as well as
knowledge and insight in a wide range of fields, including
liberal arts. For this reason, we positioned fiscal 2022 as “thefirst year of recurrent human resources development for theGroup,” and our policy is to actively invest in human resourcesin order to raise the knowledge and skills of each individual andtransform diversity into a driving force for the organization by
actively implementing re-learning for officers and employees at
all levels, regardless of position.
Next, in the “Market & Tokyo strategy,” market credit
investment and loans for asset building, which we have beenworking on since the 12th Medium-term Business Plan,
continued to contribute to earnings as a revenue driver. In
market credit investment in particular, while finance-related fee
income dwindled after growing significantly in fiscal 2020 due
to special market factors, income and expenditure on loans
increased, partly due to enhanced promotion of non-recourse
real estate loans in collaboration with The Yamanashi Chuo
Bank. In addition, overall earnings increased due in part toincreased exits from private equity (PE) investments, which we
continue to invest in from a medium- to long-term perspective,
while RORA (Return on Risk Assets) has also improved. Ourpolicy is to continue to diversify earnings while ensuring thesoundness of assets.

Toward the realization of the 10-year
Visionloans, jointly structured syndicated loans, and co-financing
related to regional revitalization and businesses for start-up
firms, the steady progress of both the expansion of thecustomer base and sales performance at the Shizugin TM
Securities Yamanashi Head Office that opened in April 2021 isdriving the benefits of the alliance.
In addition, at the individual business talks held from theperspective of regional revitalization, 75 out of approximately
600 talks resulted in contracts, demonstrating the benefits of
the alliance in a wide range of fields.
The most important theme of the Shizuoka Nagoya Alliance,
which started in April 2022, is responding to the structuraltransformation of local industry, which is a common issue forboth Shizuoka Prefecture and Aichi Prefecture, amid theacceleration of irreversible changes such as digitalization anddecarbonization that will significantly transform industry
structures. The alliance will mutually utilize the knowledge andnetworks of The Bank of Nagoya in its pioneering support for
the automotive industry, and the support services of the
Shizuoka Bank Group, including in business succession, M&A,
and business restructuring. The policy is to expand sales
channels in a wide area, and develop customer support,
including for business restructuring and business change andclosure, through collaboration between both bank groups.
Similar to the Shizuoka Yamanashi Alliance, the two banks
have set a cumulative earnings target of 10.0 billion yen over a
five-year period, including these initiatives, throughcollaborative measures among ten subcommittees, and aim toautonomously improve profitability by promoting initiatives that
contribute to the sustainable growth of the regions.

In fiscal 2021, we accelerated various initiatives aimed atrealizing our 10-year Vision from the perspective of sustainablegrowth for both the region and the Group (see Figure 5).

 Alliances with regional banks
Alliances with regional banks seek to enhance service menus
by utilizing the management resources of both banks, expand
revenue by improving the level of service, and reduce costs
while firmly maintaining the independent management of eachbank as well as maintaining the customer bases and brands
that both bank groups have built over many years, and theyshare the common goal of realizing sustainable growth
together with the regions in which they are rooted.
The Shizuoka Yamanashi Alliance, which began in October
2020, is expected to revitalize tourism and logistics with the full
opening of the Chubu Odan Expressway in August 2021, andis also developing collaborative measures among ten
subcommittees responsible for regional revitalization. We haveset a cumulative revenue target for both banks of 10 billion yen
over five years; however, by crystallizing the results of various
measures, the combined benefits of the alliance in fiscal 2021
amounted to approximately 2.2 billion yen, or approximately
6.1 billion yen on a five-year basis, progressing at a faster pacethan planned.
In the field of market credit investment in particular, in
addition to advancing collaboration on the finance front,
including a coordinated response to non-recourse real estate[Figure 5] To realize 10-year Vision

14th Medium-term Business Plan

Picture targeted in long term (10-year Vision)

A problem-solving corporate group assistingcustomers with hands-on support

A corporate group committing itself tofuture of region and producing growth of region

Cross-industry
collaboration

New financial services● Expand non-face-toface business● Develop loan market, etc.
●

Market credit
investment

Banking●●

Loans and deposits
Exchanges●

Corporate

Business
restructuring● Management
improvement● M&A, etc.

Venture debt

Overseas network

Life-planning●

Business forstart-up firms

Loan for asset
building

Asset building● Asset management● Inheritancemeasure, etc.
●

Open site in Silicon Valley● Shift from rep. office tobranch office in Singapore●

Alliances

Expand existing businesses

Group company
function

New businessin the region●

Transformation toholding company
structure

The Yamanashi
Chuo Bank● The Bank of Nagoya●

Deepen businesses for growth

Expand new business fields

8Establishing a holding company with aview to the future of the region Business for start-up firms
In June 2021, based on the extensive network with start-up
companies obtained through cross-industry collaboration andfund investment, we set up the Start-up Supporting Project
Team based in Tokyo with the aim of developing new businessfields through investments and loans and business support forstart-up companies. We are working to improve our knowledge
and expertise, and further build our network in collaboration
with our Silicon Valley Representative Office.
From October 2021, we started handling debt financing forstart-up companies, and by March 2022 had accepted acumulative total of approximately 100 projects, leading to the
execution of 11 loans amounting to 1.5 billion yen. We willcontinue to gain expertise while diversifying schemes, including
financing for deep tech start-up (first in Japan) utilizing the
Ministry of Economy, Trade and Industry’s loan guarantee
system, as the only regional bank certified to do so, and theexecution of loans with stock acquisition rights.
Going forward, we will develop business for start-up firms
into a growth driver for the Group, and as well as returning the
networks gained to the region, we intend to build an
ecosystem where industries that will revitalize the region will beborn and grow, while further enhancing initiatives such as“TECH BEAT Shizuoka,” which we have co-sponsored with
Shizuoka Prefecture since 2019.

 Transitioning to a holding company structure
Beginning with the 9th Medium-term Business Plan launchedin fiscal 2005, the Shizuoka Bank Group has formulated its
medium-term business plans on a consolidated basis andworked to strengthen Group management under the keywordsof collaboration with, and autonomy for, Group companies. As
a result, the combined ordinary profit from Group companies
grew to 10.0 billion yen.
In the current 14th Medium-term Business Plan, we haveestablished the theme of “finding a way out from bankingcentered operations,” with the aim of further advancing
collaboration among the Group, and we have promoted thecreation of a system that enables us to provide customers witha variety of financial services that lean less heavily on banking
services, while understanding each other’s businessperspectives, including HR interaction among the Bank andGroup companies on a scale of 200 personnel, and appointing
branch manager-level employees and officers of other Group
companies as presidents of Group companies (see Figure 6).
However, there are limits to strengthening cooperation as equal
partners when the only organizational structure is that of parent
company and subsidiary. Furthermore, it was also difficult tofurther expect independent and non-organic growth of eachcompany, such as expansion of the non-bank customer baseand business expansion through M&A.

[Figure 6] Transformation of the business modelMedium-term Business Plan
9th
(FY2005-2007)

10th(FY2008-2010)

11th(FY2011-2013)

12th(FY2014-2016)

13th(FY2017-2019)

14th(FY2020-2022)

Reinforce management as a group (Independence/Collaboration)
Reinforce
management
as a group

Shizugin Management
Consulting Co., Ltd. became
a wholly-owned subsidiary

Began the first Groupmanagement plan (9thMedium-term Business Plan)

Appointing Bank branchmanager-level employees aspresidents of subsidiaries* Excluding Shizuoka CapitalCo., Ltd.

Began developing
new businessdomains in light ofchanges in theenvironment
surrounding existing
business domains

New businessdomains

Group companies
became wholly-owned
subsidiaries

Began Group HR
interaction
Transitioning to a holding
company structure (fromOctober 2022)

Established Tokyo
Banking Division III* Currently the Credit
Investment Group

Began offering loans for
asset building

Began offering new credit
card loans
Began offering loans tosmall-scale business
operators

Established Start-up
Supporting Project Team
Began offering discretionary
investment management(packaged service)

Began offering venture
debt

Cross-industry collaboration
Investment in venture capital funds
Developed
high-quality services
that cannot beprovided by the
Bank alone

Returningleading-edge
technologies
to regions
incorporating it
Began transitioning toopen systemarchitecture

9

Held TECH BEAT Shizuoka
Held cross-industry
collaboration meetings

Began developing
next-generation coresystemEstablished Innovation
Promoting OfficeOpened Silicon Valley
Representative OfficeStarted operation of
next-generation coresystemOn the other hand, the needs of the region and ourcustomers are becoming more diverse and sophisticated, andwe are entering an era in which the functions of existing Group
companies alone cannot meet those needs. Under thesecircumstances, the revision of the Banking Act in November
2021 simplified the procedures for starting a new businessunder certain conditions. Therefore, in order to further
strengthen the independence (autonomy) of, and collaboration
between, each Group company, expand new businessdomains that will contribute to the growth of the region whilestrengthening governance, and maximize the value of all
stakeholders (local communities, customers, shareholders,
officers and employees), we decided to transition to a holding
company structure in October 2022.
The company name “Shizuoka Financial Group” expresses
our gratitude and pride as a company founded in Shizuoka
and our unchanging presence as a corporate group thatprovides comprehensive financial functions.
For the purpose of further enhancing cooperation andsynergies within the Group, among other things, theincorporation of the holding company will initially involve thereorganization of a total of five companies – Shizugin
Management Consulting, Shizugin Lease, Shizuoka Capital,
Shizugin TM Securities, and Monex Group, an equity-method
affiliate, – into the holding company’s directly invested
companies.
In addition, by making the holding company a company withaudit and supervisory committee, and increasing thesophistication of the corporate governance structure from theperspectives of both supervision and execution, the Bank
intends to make the governance structure flexible and robust,and create a highly objective and transparent management
structure.

S ignificance of existence and growth potentialof regional financial institutions
For one year from June 2021, I had the opportunity to serve as
Chairman of the Regional Banks Association of Japan. During
my tenure, what I constantly considered was whatsustainability is, and what we need to do to realize it, from all
angles, whether in terms of regional financial institutions
including the Shizuoka Bank Group, or the region andcustomers. Over this past year, I have had more opportunities
to access information about member banks, and I have seen
and heard of many creative initiatives involving regional trading
companies, agricultural finance, support for regional DX, andmore, being developed in the regions where each bank has its
roots. What I strongly felt was the scope of the mission andsignificance of existence that regional financial institutions needto fulfill in order to realize regional sustainability, and thepotential for growth as a regional bank. Today, at a time whensociety and the economy are at a major turning point, there
must be a role to play for banking groups that have points ofcontact with various industries and business sectors. Now is
the time to support the region and customers, and provide
backing for the transformation.
The same applies to the Shizuoka Bank Group. We intend towork together with everyone to open up the future of a region
full of dreams and hopes, while demonstrating thecomprehensive financial functions of the Group and turning allenvironmental changes into a driving force that will increase
the sustainability of the region and ourselves.
I would be grateful for your continued understanding andsupport in the years ahead.

10

CFO Message

1. Current Performance and Outlook
Results for fiscal 2021

While fulfilling our social mission as aregional financial institution, we will
engage in financial management andcapital policy to enhance corporate value.

Fiscal 2021, the second year of the 14th Medium-term
Business Plan, saw a combination of factors affecting thedomestic and overseas economies, including the prolonged
spread of COVID-19, rising prices due to the upsurge in raw
material prices and fuel prices, among others, and the situationin Ukraine. In this context, the Shizuoka Bank Group united asa group to focus its efforts on providing both financial support
and business support in order to fulfill its social mission as aregional financial institution.
On a non-consolidated basis, other operating profit
decreased by 12.6 billion yen year on year, mainly due to therecording of a loss on sale of foreign bonds as a result of the
sharp rise in U.S. interest rates since the beginning of the year,
corresponding to the Bank’s fourth quarter, and grossoperating profit and net operating profit both decreased.
However, core gross operating profit excluding market
investment rose by 10.6 billion yen year on year, and core net
operating profit (excluding gains and losses on cancellation of
investment trusts) increased by 4.4 billion yen year on year,
mainly due to an increase in interest on yen-based loans from theprovision of cash flow support during the COVID-19 pandemic,
and an increase in interest and dividends on securities.
Net income rose by 0.6 billion yen year on year due to adecrease in the disposal of non-performing loans and the salesof strategic shareholdings and partial shares in the Monex
Group for the purpose of allocating for expenses related to thenext-generation core system.
On a consolidated basis, in addition to the factors that
contributed to a decrease in non-consolidated net operating
profit, both the combined ordinary profit of Group companies
and the profit (loss) of entities accounted for using the equity
method decreased, resulting in both ordinary profit and net
income decreasing for the first time in two years.
(Unit: Billion yen)

Consolidated
Ordinary profit
Net profit attributable to owners of
the parent

FY2021Year-on-year change

54.2

-9.1

41.6

-2.0

Non-consolidated
134.7

-3.8

(Core gross operating profit)

144.3

+10.6

Including net interest income

124.5

+9.8

Including other operating profit

-5.5

-12.6

Gross operating profit

Expenses (-)
Core net operating profit (excluding gains andlosses on cancelation of investment trusts)
Provision of general allowance for loan
losses (-)

+3.8
+4.4

2.6

-0.9

Net operating profit

43.8

-6.7

Special profit and loss

1.5

+0.5

2.9

-5.3

Including disposal of non-performing
loans (-)
Including gain (loss) on stocks
Extraordinary profit and loss
Including gain on sales of shares ofsubsidiaries and affiliates

Net income
Credit-related costs (-)

Minoru Yagi
11

88.2
53.3

Deputy President & CFO

3.5

-4.4

4.5

+7.1

6.0

+5.3

36.1

+0.6

5.5

-6.1

2. Financial Management
Results outlook for fiscal 2022
(Unit: Billion yen)

Non-consolidated

Consolidated

The consolidated ordinary profit plan for fiscal 2022 is 76.0
Results forecast for
Initial plan for
FY2022Year-on-year FY2022 (Mediumbillion yen, a downward revision of 4.0 billion yen from thefiscal 2022
forecastchangeterm Business Plan)
target of 80.0 billion yen in the 14th Medium-term Business
Plan. This is due to credit-related costs of 11.0 billion yen,
Ordinary profit
76.0
+21.8
80.0
which is an increase of 4.0 billion yen from the initial plan (7.0billion yen), taking into account the impact of the prolonged
Net profit attributable to
54.0
+12.4
56.5
COVID-19 pandemic as well as the impact of the current
owners of the parent
economic situation, including soaring raw material and fuelROE
4.7%
+0.9 pt 5% or above
prices, on the region and our customers.
Key points for achieving the plan include improving earnings
OHR
56.5%
-7.7 pt Around 55%
through a review of investment securities management,
increasing profits from fees and commissions, and increasing
Group company earnings through the resolution of customers’
CET1 ratio
15.2%-0.8 pt 14% or above
issues.
In terms of securities investment management, we aim to
Gross operating profit
151.7
+17.0
144.4
improve earnings by segmenting management into “market
operations*1” and “medium- to long-term portfolio*2”. In market
Expenses (-)
87.7
-0.5
83.8
operations, we anticipate improvements due to Japanese
government bond asset swaps and capital gains on
Ordinary profit
64.5
+19.2
67.0
investment securities, in addition to the carry income from yen
bonds. In medium- to long-term portfolio management in ALM
Net income
45.0
+8.9
46.7
operations, we anticipate carry income from yen bonds andincome from the management of investment trusts, etc., where
Credit-related costs (-)
11.0
+5.5
7.0
stable earnings can be expected.
In addition, in order to increase revenue from fees andcommissions, etc. and Group company earnings, we will promote sustainability-related fee income and business matching centeredon support for decarbonization, establish new loan product fees, and promote problem-solving business by way of further
strengthening Group collaboration in anticipation of the transition to a holding company structure, thereby aiming to achieve the plan.
Going forward, in order to fulfill our social mission as a regional financial institution, we will engage in financial support and businesssupport, as well as focus on resolution of social issues facing our customers from the perspective of regional sustainability, thereby
leading to the sustainable growth of both the region and the Group.
*1 Market operations: pursue periodic revenue by using short-term market marketable procurement as a source of funds*2 Medium- to long-term portfolio: secure stable income gain in the future by using the loan-deposit gap as a source of funds from the perspective of ALM

Level of expenses (approach to OHR)The Shizuoka Bank has consistently targeted an optimum level of consolidated OHR (expenses ratio) of 55% or greater. It is ourpolicy to engage in strategic investment from a medium- to long-term perspective, should consolidated OHR fall below this level.
Since the next-generation core system began operation in January 2021, we have increased the weight of strategic investments,
including DX promotion. However, our policy is to manage expenses at a certain level following the peak in fiscal 2021.

Credit-related costs
We planned for credit-related costs of 13.0 billion yen in fiscal 2021, taking into account the increase associated with the COVID-19
pandemic. However, these costs came significantly lower than the plan at 5.5 billion yen. Meanwhile, as mentioned above, we plan
costs of 11.0 billion yen in fiscal 2022, taking into account the current business environment.
Shizuoka Bank calculates the general allowance for loan losses based on long-term average losses, in addition to forecasts of the
expected loss for the average remaining life of loans, etc., in order to maintain a stable level of allowance that encompasses businesscycles. Moreover, for large borrowers to whom the level of credit exceeds a certain amount, we record a preventative allowancebased on future cash flow, in order to prepare for future losses. We also give these borrowers appropriate credit ratings that reflect
not only their financial condition but also qualitative information. This allows us to record an allowance for loan losses that adequately
prepares us for the occurrence of losses. Likewise in the case of a specific allowance for loan losses, we reflect any change in aborrower’s financial condition in its credit rating whenever needed, and record a suitable allowance as appropriate.

12Soundness of the loan asset portfolio
The balance of risk-management loans (loans disclosed under
the Financial Reconstruction Act*) peaked after the 2008
financial crisis at 243.4 billion yen. This has now dropped to alevel of approximately 100.0 billion yen, as a result of our effort
focused on supporting customers to improve management
and complete corporate rehabilitation, business change andclosure.
Risk management loans increased in fiscal 2020, mainly due
to an increase in loans guaranteed by credit guarantee
associations to customers with low credit ratings in the context
of the COVID-19 crisis. However, they decreased in fiscal 2021
due to a reduction in loans to bankrupt borrowers.
* Unified to the standards for loan disclosure under the Financial Reconstruction Act from

Ratio of risk-management loans(%)
4

Ratio of risk-management loans

Ratio of net risk-management loans

3.59

3Historical
low

2.25

2

1.24
1
0

1.05

1.01

1.08

1.01

0.38

0.26

0.15

0.16

0.15

0.17

0.16

As of March
31, 2011

As of March
31, 2014

As of March
31, 2017

As of March
31, 2019

As of March
31, 2020

As of March
31, 2021

As of March
31, 2022

Net risk-management loans
98.4 billion yen

March 31, 2022 in accordance with revisions to the Banking Act Enforcement Regulations.

Partial direct write-off

The balance of net risk-management loans, after deducting
guarantees, collateral, etc., stands at 16.1 billion yen, less thanthe level of net income. Expected loss (EL) from net riskmanagement loans within the next 12 months is also low, at
0.8 billion yen. While continuing to focus efforts on financial
support for customers, we will strive to maintain the soundnessof loan receivables through initiatives such as management
improvement support.

6.2 billion yen

Guaranteed by credit
guarantee associations

36.8 billion yen

Collateral, allowances, etc.

39.4 billion yen

Net risk-management loans
16.1 billion yen

EL (expected loss during the next 12 months):
0.8 billion yen

3. Capital Policy
Basic policy
To ensure the soundness of the asset portfolio, we utilize our Risk Appetite Framework (page 58) to control each measure within thelevels indicated under the regulations and take appropriate risks, including investment, for sustainable growth, while fulfilling oursocial mission as a regional financial institution.

Capital adequacy ratio
In fiscal 2021, the consolidated capital adequacy ratio fell by 0.48 percentage points year on year to 16.08%, due to a decrease inshareholders’ equity resulting from a decrease in the valuation difference on available-for-sale securities*1 caused by a downturn inthe stock market. In addition, the level given the probable fluctuation pursuant to the full adoption of Basel III*2 on September 30,
2021 is 15.50%. Going forward, we will continue to strive to improve capital efficiency at the same time as achieving a balance
between investment in growth areas to strengthen profitability, and shareholder returns, while maintaining financial soundness, which
is one of the Shizuoka Bank’s strengths.
Capital adequacy ratio (consolidated basis)
CET1 ratio

Total capital adequacy ratio

CET1 ratio excluding valuation difference
on available-for-sale securities

15.59
15.59
12.90
10

0

Trial calculation of the
impact of the finalization ofBasel III as of September 30, 2021

(%)
20

(%)
20

15

 apital adequacy ratio
C(Basel III finalization criteria: consolidated)

As of March 31, 2020

16.56
16.56

16.60

16.08
16.08

12.69

12.85

As of March 31, 2021

As of March 31, 2022

15

10

0

CET1 ratio
Rose without hitting
the capital floor

18.64

Hit the capital floor
and fell as the capital
floor gradually rose

18.59

15.50

16.60
12.62

As of September 30, 2021

Total capital adequacy ratio

CET1 ratio excluding valuation difference on available-for-sale securities

14.15

15.46
11.77

First year of finalization

Complete finalization*1 The difference between the carrying amount and fair valuation of securities other than trading securities and shares of subsidiaries and affiliated companies, etc.
*2 Regulations issued by the Basel Committee on Banking Supervision requiring banks engaged in international business to strengthen their capital, for the purpose of preventing a recurrence of the
global financial crisis.

13

Shareholder returns policy
Under the 14th Medium-term Business Plan,
we target a shareholder return ratio of “50% ormore over the medium- to long-term” on aconsolidated basis. In fiscal 2021, in addition
to conducting share repurchases (8.8 billionyen), we increased dividends by 1 yen per
share, resulting in a return ratio of 56.2%.
We further plan to increase the dividend by
1 yen in fiscal 2022. The Bank has neverdecreased its dividends. We will continue
striving to provide stable and substantial
returns through stable dividends and flexible
share repurchases.

Distribution of profits to shareholders
Share repurchases (billion yen)

Total dividends (billion yen)

(Unit: Billion yen)

200
20.0

Increased
dividendby 1 yen

Increased
dividendby 1 yen

21.0

22.0

150

Increased
dividendby 3 yen

25.0

22.0

85

97

Increased
dividendby 1 yen

Increased
dividendby 1 yen

26.0

27.0

152

147

144
130

125

122

100

Dividends per share (yen)

126
101

88

86

50

0

Dividend payout
ratio
Shareholder return
ratio
Profit attributable toowners of the parent

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022 (Forecast)

41.5%

24.9%

27.6%

32.6%

32.8%

35.4%

28.2%

70.6%

44.3%

49.1%

54.9%

32.8%

56.2%

—

29.3 billion yen

50.1 billion yen

46.9 billion yen

38.7 billion yen

43.6 billion yen

41.6 billion yen

54.0 billion yen

Policy on the maintenance and eliminationof strategic shareholdings
The Shizuoka Bank has established a Policy on Strategic
Shareholdings, setting forth its basic policy to reduce strategic
shareholdings. The Bank will only maintain those shareholdings
deemed meaningful from the three perspectives of “business
investment,” “strengthening business relationships,” and“contribution to the regional economy.”
Both the balance of strategic shareholdings at acquisition
cost and the number of shareholdings are steadily decreasing.
We plan to continue to implement measures to shrink theseshareholdings based on a consideration of the purposes they
serve, using some of the gain on sales as funding for expenses
related to the next-generation system.

Level of strategic shareholdings at acquisition cost*
Strengthening business relationships
Business investment and contribution to the regional economy
Number of shareholdings

287

285

106.0

104.5

down by 8277
103.1 (Unit: Billion yen)

94.5
92.8
91.7

As of March 31, 2020

As of March 31, 2021

As of March 31, 2022

* Excluding shares of Group companies and equity method affiliates

We will continue to strive to enhance dialogue with all our shareholders and other stakeholders, and implement financial management and capital policy to achieve sustainable growth and increase corporate value for the Shizuoka Bank Group. I look forward to
your continued understanding and support in these efforts.

14

Dialogue between CEO and Outside Director

Katsunori Nakanishi
Chairman & CEO

15

Kazuto Tsubouchi
Director

Developing an Attractive and Sustainable Region– The role of the Shizuoka Bank Group –The Bank’s Chairman & CEO Mr. Katsunori Nakanishi talks with Mr. Kazuto Tsubouchi, who has served as
Outside Director since June 2020, about the role the Shizuoka Bank Group should play in developing an
attractive and sustainable region.

Generating innovation in Shizuoka
Tsubouchi: I’ve been estranged from Shizuoka ever since I
moved to Tokyo to attend university, but I have always wanted
to contribute to the development of my local community. It wasright about the time that I was thinking about this that Chairman
Nakanishi as the chairman of the Shizuoka Employers’
Association asked me to give a lecture, and this was the
beginning of my relationship with Shizuoka Bank.
Nakanishi: Yes, that was January 2020. I remember you gave alecture on 5G, which was about to start up in spring that year.
Tsubouchi: Since that time, Shizuoka Bank has been aware of
the issues involved with environmental changes such as
digitalization, and has taken on the challenge of new initiatives
that other companies lacked. I believe one of those is TECHBEAT Shizuoka*.
Nakanishi: Yes, that’s right. We have held TECH BEAT
Shizuoka jointly with Shizuoka Prefecture since 2019, with two
major goals.
One is to generate innovation in Shizuoka Prefecture, which isa “manufacturing town.” Shizuoka Prefecture is one of Japan’s
leading “manufacturing prefectures,” with extremely hightechnological capabilities in the manufacturing sector, andwhere many end products are manufactured.
Tsubouchi: In addition to industrial machinery and industrial
tools, many companies manufacture medical equipment.
Nakanishi: The prefecture has developed into a major hub forthe manufacturing industry. Recently, however, advances inleading-edge technologies such as AI and IoT have meant thatthe manufacturing industry is also one where machinery isconnected by the Internet, and it is no longer a stand-alone
industry. Shizuoka Prefecture has weakened its efforts in thisarea, and that’s become a problem.
Tsubouchi: As you say, in Europe and the U.S., manufacturing
sites have evolved significantly by sharing data and organicallylinking supply chains.
Nakanishi: TECH BEAT Shizuoka is the perfect opportunity tomatch the manufacturing industry and the leading-edge
technologies of startup companies, leading to innovation.
Tsubouchi: I see. TECH BEAT Shizuoka is sponsored jointlywith Shizuoka Prefecture, but I think that such initiatives
involving local government are rare, even in Japan.

Nakanishi: Another thing I wanted to achieve was to connect
Shizuoka Prefecture with the rest of the world, and increase
literacy in leading-edge technology. As the chairman of the
Shizuoka Industrial Foundation, I have come into contact withmanagers in a variety of industries, including the manufacturingindustry, and for the past several years I have felt strongly thatthe region as a whole lacks literacy with respect to leadingedge technology. At TECH BEAT Shizuoka, leading-edge
startup companies in various fields gather together similarly toa trade fair, so by participating in these events and creating
opportunities for different experiences, we can expect to raise
the level of literacy.
Tsubouchi: So that’s why the word “TECH” is part of thename.
Nakanishi: The event has been held seven times so far, and in
addition to the startup companies in the Tokyo metropolitan
area where Shizuoka Bank has built a network, experts from
Silicon Valley, Taiwan and other countries have given lectures,providing various leading-edge technologies and knowledge tobusiness operators in Shizuoka Prefecture. Holding the eventin real life has become difficult due to the spread of COVID-19,
but in the meantime, we have come up with a number ofalternatives, and the options for online business talks have also
increased. There seems to have been a rethinking of the valueof actually coming, seeing, touching, and talking.
Tsubouchi: Looking back at the past two years during the
COVID-19 pandemic, we have been able to go ahead andhold business talks even though it has been difficult to gather alarge number of participants together, and the fruits of theseare gradually emerging. I believe that continuing these talks willlead to high expectations for future business development.
Nakanishi: The accumulation of these sort of successes areimportant. For example, the presence or absence of asymphony orchestra or a professional soccer team greatly
affects the promotion of music and sport in that region. In thatsense, committing to continuing this technology fair should
help improve the literacy of the entire region.
Tsubouchi: I think it is extremely significant to actually comeinto contact with leading-edge technology. In my previous job(NTT DOCOMO), when the mobile 5G standard wascommercialized, many customers asked me “What can we dowith 5G?” However, when they witnessed the high-speed,* A leading-edge technology fair matching startups with companies within Shizuoka Prefecture, sponsored jointly with Shizuoka Prefecture since 201916

large-capacity communication technology, people withtechnological expertise started coming up with new ideas forservices. I believe that the implementation of such ideas leads
to innovation and strengthens the power of industry.
Nakanishi: Combining different technologies leads to thecreation of new value. This is exactly the concept of “newcombinations (innovation)” advocated by Schumpeter.
Tsubouchi: Exposure to new technology can be inspirational. I
think this matching fair is an extremely interesting initiative inthe sense that it provides opportunities.

What added value does Shizuoka
Bank bring to the region?
Nakanishi: I feel that regional financial institutions have an
extremely important role to play in making the region more
attractive and sustainable. What society needs in the future isopen innovation rather than self-sufficiency.
Tsubouchi: Yes, I agree. In that sense, I think it is possible tofacilitate matching between companies with the intervention of
a neutral presence, such as a bank. Banking platform functions
such as TECH BEAT Shizuoka were an interesting discovery
for me.
Nakanishi: The Shizuoka Bank Group has a history of
traditionally engaging in business matching. We are working on
TECH BEAT Shizuoka with a strong awareness that it will neverbe simply a trade fair or exhibition.
Tsubouchi: From the perspective of considering in what fields
we can contribute to society using the expertise we havegained to date, as well as improving the literacy of the region,banks have long had an extremely powerful function as aregional platform that can match companies with humanresources. I believe it is the power of the brand we have built
thus far that makes people think “If Shizuoka Bank makes thatrecommendation, let’s listen to them,” or “If it’s an introduction
from Shizuoka Bank, we can’t go wrong.”
Nakanishi: At the matching events we sponsor, we try toensure that both parties, including the participating companies,
do not lose trust in one another and are happy to haveparticipated.

17

Tsubouchi: I think there is a sense that “it is safe to dance ona stage sponsored by the Shizuoka Bank Group,” as opposed
to us having an image of being a bank that exists simply forthe purpose of loan consultations.

Putting “the spirit of altruism” into
actionTsubouchi: The vision of the 14th Medium-term Business Plan
is to “change to a problem-solving corporate group.” I strongly
empathize with the phrase, “We want to be a group that
customers initially consult, into the future,” which expresses
this vision. There are times when you need money urgently,
and times when you want to save. Sometimes you want toinvest, and sometimes there are times you receive an
inheritance. At each life stage, we need not only money but
also information, legal knowledge, and definite advice. If the
Bank can provide this in a centralized manner, customers will
stay with Shizuoka Bank’s services for a long time, and theirlevel of satisfaction should increase.
Nakanishi: In other words, you’re saying it’s all about
information and trust. I have always valued the phrase “thespirit of altruism,” and have repeatedly stated it to officers andemployees. There is no added value in the work of a bankitself. We support our customers and receive part of the added
value of their business growth in the form of interest and fees.
That is why we have to take action that benefits the otherparty. We can grow together with the region by putting “thespirit of altruism’ into action. This is what I have been saying.
Tsubouchi: For me, “the spirit of altruism” was embodied in
the support for our customers during the COVID-19 pandemic.
We became close to customers’ management and reduced
their risk of bankruptcy not only by supporting their cash flow
but also by supporting management improvement andbusiness restructuring. It is my opinion that, ultimately, this hascreated added value for our customers and will eventually be
returned to the Group.
Nakanishi: In the face of the COVID-19 pandemic, we havebeen increasing the number of personnel in the BusinessSupport Department and strengthening support for ourcustomers. Even at the time of the 2008 financial crisis, our
response was to increase the number of support personnel inorder to support the regional economy and survive the crisis,
and I am glad that this way of thinking has become firmly
rooted in the Bank.
Tsubouchi: The prosperity of the region leads to the prosperityof the Group. This trend is rooted in our DNA.

In order to grow together with theregionTsubouchi: In the 14th Medium-term Business Plan, we haveestablished a 10-year vision of transforming ourselves into “acorporate group producing growth of the region.” I felt that thiswas an excellent, attainable goal. On the other hand, when we
think about the future of financial institutions, I believe we must
increase profitability overall through the allocation of resources
we have cultivated so far into various fields in the face of thedecline in our core business earnings, which are the sources of
so-called settlement functions and interest rate differentials
between deposits and loans
Nakanishi: The balance between supply and demand haschanged, and we are now in an era where simply providing
loans will not give us the support of customers. In order to bechosen by customers, we need to add value other thanfinancing, such as understanding a company and providing
advice, or providing useful information that other banks do not.
Tsubouchi: In that sense, Shizuoka Bank possesses the latentpower of “human resources” that create added value. As weplan to transform into a holding company structure, I believe it
will become important to shift management resources,
including those among Group companies, to fields that will
create added value for customers.
Tsubouchi: Another important point is systems. The nextgeneration core system, which forms the foundation of DX, is
now in operation, and we are finally at the stage of the fullscale deployment of DX. We have a clear direction to focus ourefforts on the three fields of human resources, organization,and systems, and all that remains is for us to move forwardwith a sense of urgency.
Nakanishi: It may be better to think of system investment assomething that aligns with the future, but there are some
aspects that do not go quite as planned. However, even so, I
believe that in order to secure profits, we must not neglect
investment in new initiatives and systems, or investment in
human resources. I feel that this style of not neglecting
investment, and the culture of continuing to take on thechallenges of new initiatives have traditionally been passed
down from generation to generation and are deeply rooted in
the organization.
Tsubouchi: The new personnel management system has juststarted operation. Assuming that more outstanding humanresources will emerge over the next five to ten years, we will
make a plan covering ten to twenty years and ask ourselves
when we should decide on the direction of management. I
think making the decision to move in that direction is anextremely difficult one.
Nakanishi: I agree. If we do not adapt quickly to changes in
the world with respect to the issues of human resources,

organizations, and systems, we will soon be left behind. I
believe that we need to maintain that sense of crisis.

Toward becoming a well-beingorganization with diversity andinclusion
Tsubouchi: What I found interesting from the perspective ofhuman capital management is the hiring of overseas nationals.
Nakanishi: In around 2008, before the global financial crisis, aseries of small and medium-sized enterprises entered
Southeast Asia against the backdrop of the rapid appreciationof the yen. That is what prompted me to support overseas
expansion, so I visited the locations there about once a monthand concluded business alliances with several banks inSoutheast Asia. After that, I dispatched employees to affiliatedbanks. It was when I was supporting the local subsidiary of acustomer that I felt that it was necessary to develop humanresources not only able to support the local area but also theProfileKazuto Tsubouchi
Born in Shizuoka Prefecture on May 2, 1952. Graduated from the University ofTokyo, Faculty of Law in 1976. Joined Nippon Telegraph and Telephone Public
Corporation (currently NIPPON TELEGRAPH AND TELEPHONE CORPORATION(NTT)) in the same year, and was appointed General Manager, Kanazawa Branch of
NIPPON TELEGRAPH AND TELEPHONE WEST CORPORATION in 2000. In 2006,
he became Member of the Board of Directors, Senior Vice President, Managing
Director of Accounts and Finance Department of NTT DOCOMO, INC., and in 2012he was appointed Member of the Board of Directors, Senior Executive Vice
President, Chief Financial Officer (CFO) of NTT DOCOMO, INC. In 2015, he took on
the role of President, Foundation for MultiMedia Communications (retired in 2018),
and in 2018 he was appointed Chairman, Information & Telecommunication
Equipment Constructor’s Association (retired in 2020). After serving in these posts,
he was appointed Director of Shizuoka Bank (part-time) in June 2020.

18

operations within Japan, and so I actively recruited overseas
nationals, including international students in Shizuoka
Prefecture.
Tsubouchi: So you’re saying that the diversification ofcustomer needs led to the hiring of overseas nationals. It goes
without saying that the recruitment of employees who are
overseas nationals itself is not the purpose of the recruitment,
but my expectation is that we will practice true diversity byconsidering how and where each individual’s ability can beutilized in Group business while looking at their aptitudes.
Nakanishi: Speaking of diversity, I feel there is a tremendous
amount of diversity in terms of age. I believed that if people
from a wide range of age groups engaged in discussions within
a single committee, many different opinions would be voiced,
and so at the end of my tenure as president, I created anorganization called the 10-Year Committee.
Tsubouchi: I see. That was the start of the 10-Year
Committee.
Nakanishi: I told everyone that I wanted the 10-Year
Committee to be a committee that values “how officers andemployees working at the bank will be happy in 10 years”
rather than discussing “how banking jobs will change in 10
years.” I wanted the committee to think about Shizuoka Bankin terms of what we would today call “wellbeing,” and to be acommittee that would consider such matters.
Tsubouchi: Officers and employees of different generations
and different values can be happy in their own way.
Nakanishi: That’s right. That’s why I talked about “diversity
and inclusion” and not just diversity. These two words are
combined into one word, otherwise wellbeing cannot berealized.

Thinking about the holding company
structure
Nakanishi: One of the decisive factors in transforming into aholding company structure was the progress in deregulation
due to the revision of the Banking Act, which expanded thescope of business of Group companies. Management styles
have also changed significantly. In the past, the same manager
was responsible for both the “exploration of knowledge” andthe “deepening of knowledge,” but this is becoming more andmore difficult today when the world is undergoing such drasticchanges. Therefore, with the holding company structure, I
would like to create a situation in which the holding company
is responsible for exploration, while the business companies(subsidiaries) focus on deepening. I believe that creating an
optimal overall structure in which both of these aspects
function well will lead to the success of the holding company
structure.
Tsubouchi: I think you’re right. Perhaps it can also be
described as “resource allocation mapping.” When entering
new fields with potential, we need to optimally allocate limited
resources such as personnel, funds, and technology, to theareas where they are needed. A holding company is required
to have the function of mapping the optimal solution
considering the balance and risks of the Group as a whole.
That will likely be the most important aspect of Groupmanagement.

19

Nakanishi: I see. It seems that this point is also connected to
the low productivity that is a problem for Japanese companies.
Many companies have not built a solid organization such as atask force, so they are in a state of being engaged in theprocesses of planning and management in addition tobusiness execution. By transitioning to a holding company
structure, I believe that the Shizuoka Bank Group will be able
to pursue the roles of planning, management, and governancemore than ever before.
Tsubouchi: The operation of the Board of Directors of aholding company is also extremely important.
Nakanishi: When I think about the future of the Board of
Directors, I would like to change the way we operate, such as
holding discussions while listening to the appropriate opinionsof Outside Directors, whilst engaging in major deliberations,like an advisory board.
Tsubouchi: Yes, you’re right. I think it is necessary andmeaningful to have a process whereby we can reconcile eachother’s opinions on specific themes through relatively free
discussion without establishing preconditions.
Nakanishi: Of course, when formulating a medium-termbusiness plan, I believe that we must come to a firm agreementwith regard to the extent of decision-making.
Tsubouchi: I agree with that direction. From another point ofview, there is the issue of compliance. In the sense that aholding company controls or enforces compliance, we mustalso establish a proper system for reporting.
Nakanishi: For example, if you talk about matters that should
be controlled on site at a meeting of the Board of Directors,
they will become uncontrollable. After all, I think it’s very
important for the Board of Directors to fully discuss the role itshould play, and aim to create a Board of Directors thatfunctions on that level.
Tsubouchi: Under these circumstances, the ability of the CxO
to ascertain what proposals will be discussed to what extent atmeetings such as those held by the Executive Committee,
which is positioned under the Board of Directors, and whether
or not they will be submitted to the Board of Directors is anextremely important aspect. That is because if all proposals
were submitted to the Board of Directors, the Board would
never be ready.
Nakanishi: I agree. Since it’s necessary to have the reports ofthe executive division widely known, I think it would be good to
expand the channels a little. However, what is important here
is to make a clear distinction between areas of common
understanding and areas of discussion. We tend to assume
that discussion comes to end when there is a common
understanding, but with a holding company, that’s the point
where the discussion begins.
Tsubouchi: I think that’s absolutely true. There is also thequestion of what kind of knowledge and ideas can be offeredin order to participate in the discussion. My understanding isthat Directors must have the ability to discern this.

Opportunities for officers andemployees to expand possibilities
Nakanishi: I believe that the transition to a holding company
structure will bring dreams and a sense of excitement toofficers and employees, but I also think they will experiencesome anxiety over what will happen to their own work. One of
the issues we must address is how to listen carefully to thoseconcerns and turn them into a sense of excitement whileeliminating the elements of anxiety.
Tsubouchi: I have witnessed many holding companies fromthe outside, but it is my opinion that the transition to a holding
company structure presents a great opportunity for officers
and employees in that the fields in which they can be active will
expand. This recent transition to a holding company will open
up new possibilities. I think that young people in particular havea strong desire to take on the challenges of work that they
have not yet experienced, including outside their own
company, and I believe that the Shizuoka Bank Group has thefoundations to take on such challenges.
Nakanishi: I agree. Currently, we are working to expand therange of careers for officers and employees through HR
interaction among Group companies. We have already begun
developing the next-generation human resources, including
selecting employees in their 40s at the level of branchmanagers as presidents of Group companies.
Tsubouchi: I believe that is exactly what HR interaction is.
When a person returns after engaging in a variety of work andgaining experience at other companies in the Group, they findthey have grown in ways they could not have imagined.
Although there are restrictions on the composition of
personnel, etc., the range of coverage by managers at Group
companies is often broader than that at the Bank. Growth
acceleration can be expected if officers and employees gain
experience by being seconded from the Bank to Group
companies or from Group companies to the Bank. In otherwords, Group companies function as institutions for the mutual
development of human resources.
Nakanishi: For example, in order for officers and employees
who want to devise ways to use their time according to theirlife stage, such as child-raising, to carve out diverse careers,
we will enhance various systems at each company andoperate a system for work changes and transfers among
Group companies with different occupations, such as sales
and administrative work. I think that the format of the so-calledecosystem has finally been created along with the evolution ofGroup management. However, I strongly feel that the operationof this system requires a personnel perspective that promotes
the growth of the entire organization while looking at eachindividual officer and employee.

For the development of ourhometown, Shizuoka
Nakanishi: Lastly, let me ask what you would like to do in the
future as an Outside Director.
Tsubouchi: Firstly, I am delighted to be able to participate in
the management of the Shizuoka Bank Group as a Director inthis turbulent environment and in a period of great change. In
addition, I would like to focus my efforts on two things inparticular. First of all, I have had the experience in my previous
work of starting out with a government-owned company(Nippon Telegraph and Telephone Public Corporation), which
was then privatized and listed, including on overseas markets,and then I managed the group under a holding company
structure. I hope that I can utilize this experience in the future
management of the Shizuoka Bank Group.
Nakanishi: Yes. I would definitely like to see you make themost of that experience in the holding company structure
going forward. What is the second point?
Tsubouchi: The second is that movements in finance,
especially the banking business, are very similar to those of thetelecommunications business in which I was involved. Bothcan be said to be services that create value by moving andconnecting information, and they are both industries that havebuilt up a high degree of public nature and social trust underregulations and discipline. The wave of technological innovation
related to information arrived first in the world ofcommunications, and significantly changed the competitiveand regulatory environments. However, I believe that thosechanges have finally become an even bigger wave, which has
now reached the banking industry. The search for new revenue
sources utilizing the brand resources that we have cultivated isvery similar, and I believe that there are many fields in which
the experience and knowledge I have gained in the world of
telecommunications can be useful.
Nakanishi: That’s reassuring to hear. I look forward to whatlies ahead.
Tsubouchi: Going forward, the question is, in what areas will
the Shizuoka Bank Group find a way forward, grow its
business, and return the results to stakeholders? I think this isan extremely challenging and rewarding matter, and I am
committed to making a contribution. It is also my hope that
this will lead to the regional development of my hometown of
Shizuoka.

20

Shizuoka Bank Group’s Value Creation Process

Corporate
Corporate
Philosophy
Philosophy
ExpandExpanddreamsdreamsand affluence
and affluencewith ourwithcommunity.
our community.
Input Input

Activity
Activity

Achieving
Achieving
Sustainable
Sustainable
GrowthGrowthTogether
Togetherwithwith
the Region
the Region

Financial
Financial
Capital Capital●●

BIS capital ●adequacy
BIS capitalratio:
adequacy ratio:
16.08%
16.08%● Credit
Credit ratings:
A1 (Moody’s),
ratings: A1 (Moody’s),A- (StandardA& Poor’s)(Standard & Poor’s)

Promotion
Promotionof region-basedof region-based
relationshiprelationshipbankingbanking

Human
Human
CapitalCapitalDiverse professional
Diverse professional
personnelpersonnel● Group6,468
Group employees:
employees: 6,468● Small andSmall and medium
enterprise
medium enterprisemanagementmanagement
consultants: consultants:
65
65● 1st grade Certified● 1st grade
SkilledCertifiedProfessionals
Skilled Professionalsof Financial Planning:of Financial
331 Planning: 331●

IntegrationIntegrationof the entireof theGroupentireto Group toprovide aprovide
comprehensive
a comprehensive
financial function,
financial function,etc. etc.

●●●● WithinWithin Shizuoka
Prefecture:
Shizuoka171
Prefecture:bases 171 bases● Outside
Outside Shizuoka
Prefecture:
Shizuoka32
Prefecture:bases
32 bases● TECHparticipants:
TECH BEAT Shizuoka
BEAT Shizuoka
31 thousand
participants:
people31 thousand people

ri n

gA

Protection
Protectionof theofrich
the richnaturalnaturalenvironment
environmentt
Su a Susta stain a b in a b
le Regle Reg ety ety
ional Siooncai l Soci

u

u

ta

bo

bo

We have a track●record
We haveof providing
a track record
supportof forprovidingour support for ourcustomers’businesscustomers’businessexpansion,enhancing
expansion,enhancing
the Group’s
the Group’sfunctions beyond thefunctionsboundsbeyondof traditional
the boundsbankingof traditional banking● Total ordinary profit
● of
Total
Group
ordinary
compnies:
profit of10.0billion
Group compnies:
yen
10.0billion yen●

gA

Our knowledge
Our knowledge
as a comprehensive
as a comprehensive
financial institution
financialwith
institution
close ties
with close ties
to the regionto the regionri nIntellectualIntellectual
CapitalCapital

to B

●

Regional
Regional
revitalization,
revitalization,
regionalregional
contribution
contribution
activities
activities
etc. etc.

to B

Collaboration
Collaboration
with companies
with companies
over the boundaries
over the boundaries
of industries
of industries

I n iti a ti v e s

Abundant
Abundant
points ofpoints
contactof contact
with ourwith
customers
our customers

I n iti a ti v e s

Social andSocial
Relationshipand Relationship
Capital Capitalicesdce ervan l S
cida
ices
ce erv
an ial S
c

ComprCeohmPprorevhid Provid
ens eings ing
ive iAvde Ad
Fin vFin vanan

A sound Afinancial
sound financial
andandearningsearnings
foundation
foundation

NaturalNatural
CapitalCapital
The region’s
The region’s
rich
rich
tourism tourism
resources
resources● MostMost sought-after
prefecturesought-after
for relocationprefecture for relocation
within Japan (according
within Japanto a 2021(according
survey to a 2021 survey
by the certified NPO
by theHometown
certified Return
NPO Hometown Return
Support Center) Support Center)● Accommodation● Accommodation
facilities using hotfacilities using hot
springs: No.1 in Japan
springs: No.1 in Japan●

21

CorpoCro
n
n
artp
eoGra
otveerGnoavnecrenan
scaeFaosuandFaotuiondatio
to Suptopo
Srutptp
t trh
iorneaotfioVnaloufeValue
ho
erC
atC
ee

Outcome
OutcomeVisionVision●● Sustainable
Sustainable
development
development● Revitalizationof the of theRegionRegion● Revitalization

regionalregional
economyeconomy●● Realizing
Realizinga decarbonizeda decarbonizedsocietysociety

Attractive
Attractive
RegionRegionAttractive
Attractive
place toplace
live into live in
Attractive
Attractive
place toplace
worktoinwork in●● Problem
Problemsolving,solving,
optimaloptimal
solutionssolutions

Attractive
Attractive
place toplace
visit to visit

Customers
Customers●● High convenience
High convenience●● Unshakable
Unshakable
trust trust●●● Enhancement
Enhancementof mediumof mediumto long-term
to long-term
corporate
corporate
value value● Highly transparent
Highly transparent
disclosuredisclosureofofShareholders
Shareholders
information,
information,
including non-financial
including non-financial
informationinformation●● Proactive
Proactive
discussion
discussion

Attractive
Attractive
Shizuoka
Shizuoka
Bank Bank
GroupGroup
Sustainable
Sustainablebusinessbusinessmodel modelWork ●satisfaction
Work satisfaction
and andawareness
awarenessof growthof growth●

Employees
Employees● Diverse● Diverse
workingworking
styles styles●

Corporate
Corporate
culture that
culture thatencourages
encourages
employees
employees
to be to be
proud of proud
their regionof theirand
region andtheir company
their company● Work-life
Work-life
balancebalance22

14th Medium-term Business Plan

COLORsAspirations behind the name
We aim to find a way out of the traditional “banking-centered” sales style, and realize a new style where
everyone in Shizuoka Bank Group works together in providing solutions to diversified needs of the region andcustomers from various angles.
The name also incorporates our desire to further strengthen initiatives towards diversity and SDGs.

-year Plan 14th Medium-term Business Plan

14th
Medium-term
Business Plan

COLORs23

Strategic Development for Realizing the Vision

Group Vision33-year Vision

Change to a problem-solving corporategroup assisting regional customers withhands-on support

Demonstrate GroupfunctionsPursue new earnings
opportunities

Basic Strategy 1

Group Sales Strategy

Basic Strategy 2

Innovation Strategy

Basic Strategy 3
Optimize allocation ofmanagement resources

Business Portfolio
StrategyTarget performance indicators(Fiscal 2022 / consolidated basis)
Profitability

Targets of the 14th Mid-Term Targets in the Business Plan
Management Plan
for FY2022*¥80.0 billion or more

¥76.0 billion

ROE

Ordinary profit

5% or more

4.7%

Financial soundness

Common equity Tier 1 ratio

14% or more

15.2%

Other

OHR

Around 55%

56.5%

50% or more over the
medium to long term

50% or more over the
medium to long term

Shareholder return*Reviewed based on changes in the environment and other factors since the 14th Mid-Term Management Plan wasformulated (announced in May 2022)

2020-2022

Become a corporate group that isneeded by the region■ Ability to capture the essence of needs■ Advanced problem-solving abilities■ Economic and social sustainability

3-year Strategy

Vision in

10

years

2030

10-year Vision

A corporate group committing
itself to the future of the region
and producing growth of the region

Fields of focus to realize thevision set forth in the 10-year vision

10-year Strategy

In addition to meeting diverse customer needs
Group-wide, we will collaborate with other financial
institutions to improve customer convenience, andwork to complete the structural reforms under the
13th Medium-term Business Plan.

We will pursue earnings opportunities among theCreate Regional
Industry

Group as a whole from new perspectives,
including by renewing channels in line withchanging customer behavior and capturing

10-year Strategy

Region-producing
Strategy
We will engage in activities

growth in global markets.

Enhance Regional
Attractivenessaimed at resolving various
issues over the medium to longterm from the perspective of

We will allocate human resources to optimize theSDGs and regional contribution,

entire Group, and build up new transactions andassets that support future Group earnings whileassessing risks and returns.

including contributions to thenurturing and growth of regional
industries and economies.

24Realizing Sustainability Management
When formulating the 14th Medium-term Business Plan, theShizuoka Bank Group identified the priority issues (materiality)that must be addressed in order to realize a sustainable society
and maintain and enhance corporate value, and reflected thesein our management strategy.

Priority issues to be addressed(Materiality)

Materiality
identification
process
We analyzed theissues facing theregion from thestandpoint of thephilosophy, mainprinciples, andpriority issues ofSDGs, identified themateriality based on
the Shizuoka Bank
Group’ s corporate
philosophy and theopinions of outside
experts, and reacheda decision following
deliberation by the
Board of Directors.

25

Social● Revitalizing the regional economy● Population decline, low birth rate andpopulation aging● Shortage of successors to small- andmedium-sized enterprises● Digitalization● Diversity● Maintaining the regional financial
infrastructure

Environment● Increased climate change risk
● Global warming

Governance● Corporate governance● Corporate ethics and complianceSustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) were adopted unanimously
at the UN summit in September 2015.
A set of 17 goals and 169 targets were set as development goals
to be achieved by 2030 by the international community including
developed countries.
SDGs are universal goals applicable to all countries for resolvingsocial issues, such as poverty, hunger, and other issues, including theenvironment, gender equality, energy, and the working environment.
SDGs need to be addressed by a global partnership involving all
stakeholders, including governments, civil society, and the private
sector.

Related SDGs

Main initiatives in the 14th Medium-term
Business Plan
Basic Strategy 1■ Respond to diverse customer needs through the financial
functions of the Shizuoka Bank Group■ Support for business succession and asset succession■ Provide services based on the concept of financial gerontology■ Review branch functions in response to customer needs
Basic Strategy 2■ Device-free financial services■ Technological innovation through investment in venture companies
Basic Strategy 3■ Diverse working styles, participation and advancement of
women, diversified human resources, and respect forhuman rights
10-year Strategy■ Returning of networks with startup companies to the region■ Enhance regional attractiveness by utilizing regional platforms■ Promotion of environmentally friendly financial services■ ESG investment and utilization of green bonds■ Response to climate change■ Advanced corporate governance■ Strengthened measures against money laundering

26

Transformation to a Holding Company Structure
Shizuoka Bank Group will establish "Shizuoka Financial Group, Inc." in October 2022 and shift to aholding company structure.

Ambitions Expressed in the Company Name
The company name represents our thoughts that we keep our gratitude to various stakeholders
who have helped us grow since our foundation in Shizuoka and our pride as a company headquartered in Shizuoka,
and that our existence as a corporate group providing comprehensive financial services is a universal one
while the whole Group intends to expand into new business fields by transformation to a holding company structure.

Background and Purpose of Transformation to a Holding Company Structure
In light of various changes in the business environment, the Shizuoka Bank Group has enhanced its financial function to solve customers’ challenges while increasing its combined strength as a financial group, as well as developing new business fields and working on projects, such as expanding businesses in the Tokyo Metropolitan area and collaborating with entities from outside theGroup’s industry.
While we have pursued sustainable growth by always keeping in mind a sound yet innovative management, we believe that wemust respond even more appropriately in the future to the movement towards deregulation in banking services and to the accelerating changes in the business environment.
Based on these circumstances, the Shizuoka Bank (the “Bank”) has decided that it needs to transform to a holding company
structure in order to build a resilient management structure, which will enable the Group to further contribute to the wellbeing of all
stakeholders, including the community, customers, employees, and shareholders, and to continue its sustainable growth.

October 2022

[Approach so far]Transformation to a Holding Company Structure
Changes in the market
environment

Changes in the competition
environment

Prolonged low
interest rates

Entry into financial businesses
from other industries

Low birth rate, population
aging and population decline

Advancesin technology

Recognition of management issues
Amid the increasingly harsh earnings
environment, the growth of the regionis essential as a foundation ofmanagement

To deal with increasingly diverse
competitors, expansion into new
business fields is essential

Strengthening Group management

27

2021
The total ordinary income of 13
consolidated subsidiaries in
FY2020 has grown to 10 billion
yen, approximately three times aslarge as that at the introduction ofgroup management strategy
2014Group companies (excluding Shizuoka Capital)
become wholly owned subsidiaries

2012
Shizugin Management Consulting was made a wholly-owned
subsidiary of the Bank

2005
The Group management strategy was introduced starting from the 9th
Medium-term Business PlanCorporate Philosophy

Expand dreams and affluence with our community.
The Group's corporate philosophy under the holding company structure remains the same as the current corporate
philosophy. The philosophy broadly represents guideline to the future for the Group and all of those who work
there; to share future dream with the region and to realize true affluence. The Group will keep assisting people inrealizing their dreams in lives and businesses by providing high-quality services as a comprehensive financial
institution in the region.

10-year Vision

A corporate group committing itself to the future of the region and producing growth of the region
The Shizuoka Bank Group’s 14th Medium-term Business Plan, which started in April 2020, contains the 10-year
Vision, under which the Group is committed to the growth of industry and economy in the region from a mediumto long-term perspective for the purpose of realizing the corporate philosophy. By reinforcing its combined strength
as a problem-solving corporate group through the transformation to a holding company structure, the Groupintends to further contribute to the bright future of the region.

[Purpose of Transformation to Holding Company Structure]

Maximize the value of all stakeholders
Region & Customers

Shareholders

Employees

Solve increasingly diversified and complex
challenges. Comprehensive, extensive,
good-quality financial services.

Increase shareholder value throughsustainable growth. Increase return toshareholders.

Activate participation of diverse
personalities across the Group. Improve job
and employee satisfaction and treatment.

Transformation to Holding Company Structure
Realize sustainable growth through overall optimization of the Group
Expand new business fields tocontribute to growth of the region

Strengthen Group management
through independence,autonomy, and collaboration

Develop flexible and robust
governance structure

Relationship with and trust by local communityand customers which the Bank has cultivated over its long history
Universal Foundation of the Group

By transforming to a holding company structure, the Bank intends, from a long-term perspective, to expand into new business fields
that will contribute to regional growth and to further expand the existing lines of business and the customer base. The Bank is going toincrease the Group’s combined strength as a problem-solving corporate group by further enhancing the group management that the
Bank has worked on thus far and by increasing the presence of each group company, through balancing between unifying force (i.e.,
cooperation) and centrifugal force (i.e., independence and autonomy) under the Holding Company.
The Bank also plans transformation from a bank-dependent business model, by developing an environment where employees, whowill actually work on those measures, will be even more proud and satisfied with their work than before, and by cultivating an organizational culture where new ideas and innovations will be generated, through promoting diversity management.

28

Group Structure after Transition to Holding Company Structure
For the purpose of further enhancing cooperation and synergies within the Group, among other things, the incorporation of theHolding Company will be followed by reorganization of a total of five companies – four of the Bank’s consolidated subsidiaries(Shizugin Management Consulting Co., Ltd., Shizugin Lease Co., Ltd., Shizuoka Capital Co., Ltd., and Shizugin TM Securities Co.,
Ltd.) and one of the Bank’s equity-method affiliates (Monex Group, Inc.) -- into the Holding Company’s directly invested companies,
by such means as transferring all shares held by the Bank in these companies to the Holding Company as dividends in kind.
Current

After Transition to Holding Company Structure

The Shizuoka Bank

Shizuoka Financial GroupThe Shizuoka Bank

Shizugin Management Consulting
Shizugin Lease

Shizugin IT Solution

Shizugin IT Solution

Shizugin Credit Guaranty

Shizugin Credit Guaranty

Shizugin DC Card

Shizugin DC Card

Shizugin Gereral Service

Shizuoka Capital

Shizugin Mortgage Service

Shizugin TM Securities

Shizugin Business Create

Shizugin Gereral Service

Shizugin Heartful

Shizugin Mortgage Service

Shizuoka Bank (Europe) S.A.

Shizugin Business Create

Shizuoka Liquidity Reserve Limited

Shizugin Heartful

Two affiliates under Equity-method

Shizuoka Bank (Europe) S.A.

Shizugin Management Consulting

Shizuoka Liquidity Reserve Limited

Shizugin Lease

Three affiliates under Equity-method

Shizuoka Capital
Shizugin TM Securities
Monex Group [Affiliate under Equity-method]

Direction of Strategy under Holding Company Structure
Shizuoka Financial Group intends to further develop and accelerate the existing efforts. The 1st Medium-term Business Plan under
the holding company structure is based on the policy of realizing the “maximization of the value of all stakeholders,” which is the
purpose of the transformation to a holding company structure, through the following four basic strategies.

Basic strategy 1

Basic strategy 2

Basic strategy 3Group Business Strategy

Transformation Strategy

Regional Joint Creation Strategy

Further expand customer bases and business linesof the existing businesses, and realize sustainablegrowth through developing new business fields

Create new values through transformation in
products and services, channels, costs, humanresources, etc.

Contribute to solving various challenges facing
the region by serving as a “regional hub” andforming a “regional platform”

Increase our combined strength as aproblem-solving corporate group and help theregion and customers towards a better future

Provide more value to stakeholders by adapting
to rapid changes of the times and promoting
forward-looking transformation

Commit ourselves as a corporate group for
producing growth of the region towards
realization of an attractive, value-added
community that keeps attracting people

Basic strategy 4Group Governance Strategy
Intend to sophisticate our corporate governance from both offensive and defensive perspectives and to develop a flexible,
robust group governance structure in order to realize basic strategies 1 through 329

Corporate Governance Structure
By making the Holding Company a company with audit and supervisory committee, the Bank intends to sophisticate the corporate
governance from both offensive and defensive perspectives in order to make the governance structure flexible and robust in line withthe expectations of stakeholders, and to create a highly objective and transparent management structure.

Supervision

General Meeting of Shareholders
Nomination and Remuneration Committee

Board of Directors

Advisory Board

Audit and Supervisory Committee

President

Committee of Administrative Supervision

Audit and Supervisory Committee Office

Exsecusion

Management Meeting

Corporate Planning Division

Group-wide Executive
Committee

Group-wide Committee for Integrated
Risk and Budget Management

Group-wide Compliance
Committee

Corporate Administration Division

Risk Management Division

Compliance Division

Instruct/Manage
The Shizuoka Bank
(Including bank subsidiaries)

Shizugin Management
Consulting

Internal Audit Division

Discuss/Report
Shizugin Lease

Shizuoka Capital

Shizugin TM
Securities

Corporate Profile of Shizuoka Financial Group, Inc.
Business administration of banks and of companies whose ownership the Company is permitted by the Banking Act to acquire, and all
Description of business businesses incidental or relating to the business set forth in the preceding item
Other businesses which a bank holding company is permitted by the Banking Act
Location

1-10, Gofukucho, Aoi-ku, Shizuoka-shi

Representative andofficers scheduled totake office

Representative Director (Chairman)
Katsunori Nakanishi (Currently Chairman & CEO of Shizuoka Bank)
Representative Director (President)
Hisashi Shibata(Currently President & COO of Shizuoka Bank)
Director
Minoru Yagi
(Currently Deputy President & CFO of Shizuoka Bank)
Yutaka Fukushima (Currently Director & Senior Managing Executive Officer of Shizuoka Bank)
Director
Director
Kumi Fujisawa(Currently Outside Director of Shizuoka Bank)
Director
Kazutoshi Inano(Currently Outside Director of Shizuoka Bank)
Director (Audit & Supervisory Committee Member) Koichi Kiyokawa(Currently Director & Senior Executive Officer of Shizuoka Bank)
Director (Audit & Supervisory Committee Member) Motoshige Itoh
(Currently Outside Director of Shizuoka Bank)
Director (Audit & Supervisory Committee Member) Kazuto Tsubouchi (Currently Outside Director of Shizuoka Bank)(Currently Outside Audit & Supervisory Board Member of Shizuoka Bank)
Director (Audit & Supervisory Committee Member) Naomi Ushio

Capital90,000 million yen

Stock exchanges
Tokyo Stock Exchange Prime Market
where stocks are listed

Composition of Board
Members
Directors supervise management withindependence and objectivity based on theextensive experience and professional
insight of outside directors.

Inside Directors
1
Audit andInside Directors Board of Outside Directors
Supervisory Outside Directors
Directors
5
53Committee

Half of the board members are Outside Directors(plan at the time of incorporation)

30

For Further Growth as a Comprehensive Financial GroupTo date, we have grown into a comprehensive financial group that boasts the top level of profitability
among regional banks through the efforts of each company within the Group in providing highly
specialized financial ser vices and ensuring the smooth banking operation.
After the transition to a holding company structure, we will further strengthen group management and aim
for further group-wide growth by refining each company's ability to address local issues.

Information
Information
Technology
Technology■Shizugin■Shizugin
IT Solution
IT Solution

Management
Management
Consulting
Consulting

Shizugin
Shizugin
Management
Management
Consulting
Consulting

Lease

Lease

Shizugin
Shizugin
LeaseLease

Shizuoka
Shizuoka
Bank Bank

Support toSupportstart-ups
to start-ups
andand
for businessfor businessrestructuring
restructuring
FinancialFinancial
ProductsProducts
Trading Trading

Shizugin
Shizugin
TM Securities
TM Securities

Shizuoka
Shizuoka
CapitalCapitalSubsidiary
Subsidiaryofofholding
holdingcompany
company
Overseas
Overseas
Subsidiaries
Subsidiaries

Bank Bank
subsidiary,
subsidiary,etc. etc.
Other Equity-method
Other Equity-method
Affiliates
Affiliates■Monex■Monex
Group Group■Commons■Commons
Asset Management
Asset Management

31■Shizuoka■Shizuoka
Bank (Europe)
Bank (Europe)■Shizuoka■Shizuoka
Liquidity Liquidity
Reserve Limited
Reserve Limited

Expansion Into New
Business Fields
Aiming for sustainable development of the region and creationof business opportunities for theGroup, we will accelerate ourefforts toward new businessfields from local issues as astarting point.

Role of Each Company
Holding Company

Credit Credit
Guarantees
Guarantees

Aim to continuously enhance corporate value by overseeing
management strategies that accurately reflect social changes, strengthening group management, allocating management resources in an optimal manner, and co-creating value
with our stakeholders.

■Shizugin■Shizugin
Credit Guaranty
Credit Guaranty

Subsidiary of Holding Company
Accelerate the group-wide growth by responding to various
local issues while enhancing the diversity and expertise of its
services, and by expanding its own business fields and customer base.

Credit Credit
Cards Cards■Shizugin■Shizugin
DC Card DC Card
■Shizugin■Shizugin
Saison Card
Saison Card(equity-method(equity-method
affiliate) affiliate)Bank’s Subsidiary, etc.
Further strengthen cooperation with banks and group companies to support group-wide growth by expanding products andservices and improving of business quality.

Group Group
Productivity
Productivity
Enhancement
Enhancement

Performance of Group Companies
Group companies have strengthened their collaboration with
the Bank and responded to diversified customer needs. As aresult, the combined ordinary profit of the Bank’s 13 consolidated subsidiaries is one of the greatest among regional banks.

■Shizugin■Shizugin
General Service
General Service■Shizugin■Shizugin
MortgageMortgage
Service Service■Shizugin■Shizugin
BusinessBusiness
Create Create■Shizugin■ShizuginHeartful Heartful(Unit: Billion yen)

9.8

10

7.6

8

7.9

8.4

8.8

8.8

9.3

10.0

9.6

6.6
6
4
2
0
FY 2012FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 202132

Financial Highlights
Main Items

54.2 billion yen

Ordinary profit (consolidated)
Billions of Yen
80

65.8

70

63.3

63.4
54.6

60

Billions of Yen
60

50.1

50

54.2

46.9

40

43.6

38.7

40

50

41.6 billion yen

Net profit attributable to owners of the parent

41.6

30

30

20

20
10

10
0

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

9,382.1billion yen

0

FY 2017

FY 2018

FY 2019

Balance of total loans (average balance, non-consolidated)

Total deposits (average balance, non-consolidated)

Billions of Yen
10,000Billions of Yen
12,0009,500

9,234.2

9,000
8,500
8,000

9,382.1

8,042.0

FY 2021

11,228.3 billion yen
11,228.3

11,000

10,582.3

8,740.1
10,0008,336.9

FY 2020

9,303.6

9,914.0

9,641.2

9,000

7,500
8,000
7,000

FY 2017

FY 2018

FY 2019

FY 2020

Ratio of risk-management loans (non-consolidated)
Billions of Yen
160

Risk-management loans (non-consolidated)

1.01%

Ratio of risk-management loans

FY 2018

FY 2019

FY 2020

BIS capital adequacy ratio (consolidated)（%）

BIS capital adequacy ratio (consolidated)

93.0

91.9

102.9

92.2

98.4

16.08%

16.56

16.5

120

FY 2021

Common Equity Tier I ratio

17.0

140

100

FY 2017

FY 2021

15.95

16.08

16.05

16.0

15.59

15.5

80
15.0

60
40

1.10%

1.05%

1.08%

1.01%

1.01%

20
0

As of March 31, As of March 31, As of March 31, As of March 31, As of March 31,
2020
2021
2022
2018
2019

14.5
14.0
As of March 31,
2018

As of March 31,
2019

As of March 31,
2020

As of March 31,
2021

As of March 31,
2022* Reconcile risk-management loans with loans based on the Financial Reconstruction Act
according to revision of Order for Enforcement of the Banking Act since the end of Mar.
2022. Adopt the standard retroactively to the past.

Credit Ratings (Moody’s) (As of July 1, 2022)

A1

Long-term rating Short-term rating

33

Shareholder return ratio (10-year average, consolidated)
Important Items

FY 2017

FY 2018

FY 2019

FY 2020

FY 202147.7%
FY 2012–FY 2021
(10-year average)

Moody’s

A1

P-1

Dividend per share

21.0 yen

22.0 yen

22.0 yen25.0 yen

26.0 yen−Standard & Poor’s

A-

A-2

Dividend payout ratio

24.9%

27.6%

32.6%

32.8%

35.4%

26.7%

Rating and Investment
Information, Inc.

AA-−

Shareholder return ratio

44.3%

49.1%

54.9%

32.8%

56.2%

47.7%

Non-Financial Highlights(results for fiscal year 2021)

Environment
CO2

20.9%

69%

reduction in CO2emissions by the
Shizuoka Bank Group

51.4%

of accounts opened are
ECO Accounts*

reduction in paper
documents at corporate
headquarters

Includes Online General Accounts opened
without a passbook, and WebWallet
Internet branch accounts(FY 2019 results, compared to FY 2013)(compared to FY 2011)

SocialCreated environments where business could
continue even in the COVID-19 crisis
TECH BEAT Shizuoka*

27,554

718

21

times

Held online business talks

views

Hosted Shizuoka Kids’ Academy(Total since FY 2016)

times*Forum for business matching between technology start-ups and companies within Shizuoka Prefecture

256
26,507

17.9%

Completedcases
of corporate rehabilitation support
initiatives and helped

ratio of women in leadership positions

External Recognition

peoplesecure continued employment or
re-employment through corporate
rehabilitation and business succession support

Certification under the Act on Promotion of Women’sParticipation and Advancement in the Workplace“Eruboshi”

Certified as an
outstanding company for
initiatives related to theparticipation andadvancement of women(Total since FY 2005)

Corporate rehabilitation support initiatives:
Number completed:

Governance59
14

Certification under the Act on Advancement of
Measures to Support Raising Next-Generation Children“Platinum Kurumin”

Certified as a company
engaged in initiatives
towards a high level of
support for parenting

Certified Health & Productivity Management Organization Recognition Program"Certified Health & Productivity Management Organization(large enterprise category)"(As of July 2022)

Composition of the Audit & Supervisory Board

Composition of the Board of Directors

Directors from within the Company: 5[5 males]Representative Directors:
Executive Directors:

3
2

Outside Directors:

4[3 males, 1 female]

Audit &
Outside Audit & Supervisory Board Members:
Supervisory
Board Members
from within the
Company: 2[2 males]3[2 males, 1 female]34

PICK UP

Alliance with Regional Banks
Shizuoka Bank concluded a comprehensive business alliance “Shizuoka
Yamanashi Alliance” with Yamanashi Chuo Bank on October 28, 2020.
Aiming at economic development in Shizuoka and Yamanashi Prefectures through cooperation mainly in the area of regional revitalization, bothbank groups we are working on a wide range of cooperative measures,
including the opening of the "Shizugin TM Securities Yamanashi Head Office" and holding individual business meetings with clients of the twobanks.

Collaboration in Securities Services
Shizugin TM Securities Yamanashi Head Office, which opened
in April 2021, provides value-added products and services tocustomers in Yamanashi Prefecture and the Tokyo metropolitan area through referrals from Yamanashi Chuo Bank.
As of March 31, 2022, the number of accounts andbalance of customer asset in the Office totaled approximately 1,900 and approximately 15.4 billion yen, respectively.
Customer assets in Yamanashi Head Office（JPY bn）

Initiatives to Activate Interaction between
Shizuoka and Yamanashi Prefectures
With the full opening of the Trans-Chubu Expressway inAugust 2021, nonresidential population in both prefectures is
expected to increase even more than before.
The two banks have installed commemorative panels in theirrespective head office sales departments to coincide with the
opening. In addition, the two banks are working to further
revitalize the local economy by participating in merchandising
events co-hosted by the two prefectures and conducting campaigns by the credit card companies within the two banks'
groups.

15.4

15

10.9
10

5.8
5

2.3
0
End of Jun. 2021

End of Sep. 2021

End of Dec. 2021

End of Mar. 2022

Collaboration in Supporting Start-ups
The two banks executed a co-financing for MaaS business(see page 66 for details), and provided the first co-financing
for the construction of a shared villa in Yamanashi Prefecture, which was the first co-financing for a project related toregional revitalization.
The two banks will continue to cooperate in addressing
the financing needs of Start-ups that will lead to the development of the region.

Establishment of “Shizuoka-Yamanashi
Mirai Growth Support Fund”
In May 2022, the two bank groups jointly established abusiness succession fund to support business succession
and restructuring of our business partners.
We will leverage the extensive networks of both banks toensure the continuity and further development of local
businesses, while actively working to revitalize and strengthen the competitiveness of the local economy.
Name of Fund Shizuoka-Yamanashi Alliance Investment Limited Partnership(Nickname: Shizuoka-Yamanashi Mirai Growth Support Fund)
Total amount of funds
Investors

JPY 2.0 bn

limited partner
Shizuoka Bank, Yamanashi Chuo Bank,
Shizugin Management Consulting Co., Ltd
General partner
Shizuoka Capital Co., Ltd

35

Shizuoka Bank Group mutually shares management resources and local information with ourpartner financial institutions, aiming at solving local issues and achieving sustainable growth forboth bank groups.

Shizuoka Nagoya Alliance

Shizuoka Bank concluded a comprehensive business alliance"Shizuoka Nagoya Alliance" with the Bank of Nagoya on April 27,
2022.
Both bank groups have positioned our response to the structuraltransformation of the automobile industry and other regional
industries as our most important theme, and will leverage themanagement resources of both bank groups to achieve sustainablegrowth for the region and ourselves.

Objective and BackgroundShizuoka and Aichi Prefectures have not only strong economic ties as neighboring prefectures but also have a characteristic in common that the manufacturing industry accounts for a higher percentage of the prefecture's gross prefectural
product than in other prefectures, with automobiles and other transportation machinery accounting for a particularly highpercentage.
We recognize that irreversible changes that will significantly transform the industrial structure of the region, such as
decarbonization and digitalization, are accelerating, and that the role of regional financial institutions in supporting thesechanges will become even more important for the sustainable growth of the economies of the two prefectures. The twobanks share an awareness of these issues and have been discussing specific ways to collaborate.
As a result, the two banks agreed that a comprehensive business alliance would enable them to expand their service
menus by utilizing their respective management resources, increase profits by raising the level of their services, andreduce costs by sharing administrative work, etc., with a sense of speed and effectiveness, while maintaining the customer bases and brands built up over the years while adhering to their respective independent management, concluding
the alliance.

Outline of the Alliancei) Strengthen support for clients in major industries in both prefectures

In this alliance, the two banks work on various
measures with a sense of speed while maintaining
their management independence and unique corporate brands and customer bases.

ii) Contribute to local communities and capture new profit-earning opportunities bymatching the needs of customers of both banksiii) Expand of service menu by utilizing mutual management resources such as groupcompany functionsiv) Reduce cost through the sharing of various systems and back-office operationsv) Develop human resource through the dispatch of trainees, human resource
exchanges, and joint training programs
Etc.

36

Initiatives for SDGs
Services
Region-based RelationshipBanking• Solutions for Various management Issues• Smooth Supply of Funds to Companies in the Region
P60-62• Meet needs of corporate customers• Support for overseas business development P63-64
Strategic Investment P65-66• Regional revitalization• Coordinate among industry, government, academia, etc. and facilitate the development of businesses that contribute to regional
development• Hosting the Shizuoka Kids Academy, an event for elementary school
children in the region, where they can learn about local history,
culture and industries• Support for business restructuring and turn-around		Support business restructuring and turn-around of customers
through building business plans, alliances with external agencies,
and utilizing business regeneration fund		256 companies completed business turn-around since 2005 andsecured local employment for 26,507 people, maintaining a vibrantlocal economy.

Life-plan Support for our Customers• Proposals personally tailored to each individual customer
		We provide a full range of products and services to meet customers’
financial needs for each life event, such as starting work, getting
married, giving birth or buying their own home
• Inheritance solutions and asset succession support
	 We present a range of services related to inheritance andadvancements, allowing customers wishing for a smooth succession to spend their old age in security

Environment
Shizuoka Bank Group Environmental Policy
P39

Response to Climate Change(Initiatives to Support the TCFD
Recommendation)
P40-4237

Investment and Loan Policy forSpecific Sectors
In April 2021, we established the “Investment and Loan Policy for Specific
Sectors” in order to make prudent decisions on investments and loans thatare likely to contribute to negative impacts on the environment and society,and to reduce or avoid such impacts.
The Policy clarifies our resolution that we in principle do not invest in andloan to coal-fired power generation that is considered to have high environmental effect, and our policy against cluster bombs, inhumane weapons
manufacturing, palm oil plantation development, and deforestation.
Investment and Loan Policy for Specific Sectors (excerpt*)
Coal-fired Power Generation
Initiatives for environmental protection, climate change, and sustainable energy are positioned as some of the most important social
missions of financial institutions.
Shizuoka Bank Group actively supports renewable energy projects while not investing in and loaning to new coal-fired power
generation in principle.

Positive Impact Finance
The Shizuoka Bank, with the cooperation of the Shizuoka Economic
Research Institute, has established a framework for small and mediumsized enterprises (SMEs) to evaluate the spillover effect of corporate
activities on the regional economy, and contribute to resolving uniqueregional issues. In January 2021, we concluded the first ever positive
impact finance contract with an SME in Japan.
We will continue to fulfill our responsibilities as a regional financial
institution, striving for sustainable development in the region.
*What is positive impact finance?
In positive impact finance, we engage in a comprehensive analysisof the impacts of corporate activities on each facet of the environment, society and economy, and fund initiatives aimed at enhancing
positive impacts and reducing negative impacts.
We use degree of contribution to the achievement of the SDGs
as our performance indicator, and disclose information on these
initiatives.

Addressing Environmental Issues throughFinancial Operations
We support our customers’ environmental protection initiatives in various ways by utilizing our comprehensive financial functions.
•	Consulting on gaining certification for environmental management
systems• ECO Account• A part of reduced costs by not issuing a bank book is donated togroups that promote environmental protection.
• “Fujisan”* Time Deposit
* Fujisan = Mt.Fuji• All interest on the deposit is donated to groups that promote environmental protection.)

Reducing the Environmental
Impact of the Shizuoka Bank Groupagainst phishing and spyware
		Sophisticated authentication by the use of one-time password

As a part of the environmental protection activities, we are working to
reduce CO2 emissions in order to mitigate global warming.
• Reduction of energy consumption• Reduction of paper usage• Recycling of paper• Zero emissions• Green purchasing• Prioritize purchase of environmentally conscious products for use as
novelties• Introduction of advanced energy-saving facilities• Introduction of eco-friendly cars

Development of Human Resources in the Region

Reinforcing Employee Efforts to
Tackle Environmental Issues in
the Community and at Home

Promotion of Culture and Sports• Holding of concerts featuring leading artists from Japan and abroad•	Holding of performances of rakugo, the traditional Japanese performing art of comic storytelling•	Sponsorship of children’s soccer competitions and baseball competitions
Countermeasures against Large-scale Disasters

We are reinforcing our employees’ efforts to tackle environmental
issues in the community and at home by conducting an awarenesssurvey on the mitigation of global warming and disseminating information on the environment.
• Small Kindness Movement•	Voluntary activities, including tree planting, forest maintenance, andclean-ups. Administrative offices are established within a groupcompany to facilitate employees’ vigorous involvement.
•	Shizugin Furusato* Environmental Protection Fund Charitable Trust•	Financial support is provided through the Trust to individuals andgroups in Shizuoka Pref. that promote environmental protection.
• Financial education• Organizing bank visits and providing presentations for elementary,junior high, and high school students• Holding a financial quiz competition for high school students• Acceptance of internships*Furusato = hometown

SocialDiversity
P47-49Countermeasures against Financial Crime• Compensation system for victims of financial crimes• Compensation for losses attributable to counterfeit or unauthorized
use of stolen cards• Compensation for losses attributable to unauthorized withdrawals
using stolen bankbooks• Compensation for losses attributable to unauthorized withdrawals
using online banking services• Various security measures• Cash card security measures		PIN Code Reset Service on ATMs, issuing of IC cash cards which
are difficult to counterfeit• Online security measures		Implementation of strict personal identification, countermeasure• Establishment of a system for ensuring business continuity• A business continuity plan (BCP) has been established for continuation or early recovery of critical operations in the event of a largescale disaster or the outbreak of an infectious disease posing a highrisk. The BCP is reviewed and updated on a continuous basis.
• Measures are taken to protect buildings from earthquakes, andprivate power generation systems, emergency communicationequipment, and other materials and equipment for disaster countermeasures are installed.
• The Emergency Countermeasures Office is located at the headquarters to enable us to assist people in the region in the event of adisaster.
• Countermeasures against tsunami• When rebuilding a branch in an area that may be affected by atsunami, the new building will be designed such that the roof ishigher than the expected height of the tsunami.
• A staircase is installed enabling direct access from outside thebranch to the roof so that anyone can use it as a safe haven in theevent of a disaster.
Raising Awareness about Human Rights•	Provision of education and training about human rights to new
employees and employees at various levels

GovernanceFurther Strengthening of Corporate Governance
P51

Thorough Enforcement of Compliance and Risk Management
P56

Countermeasures to Prevent Money Laundering andProvision of Funds to Terrorists
P57
38

Initiatives for the Environment
Based on our corporate philosophy, which aims to “expand dreams and affluence with our community,”
the Shizuoka Bank Group protects the rich and comfortable natural environment in our hometown andcontributes to the realization of a sustainable society not only by considering the environment in ourown corporate activities but also by actively addressing environmental issues through our core businesscentering on finance in the local community.
Message from an Outside Director
Sustainability has become a major theme for local
communities and businesses. Responses to climatechange received particular attention last year. At the COP26
summit, the leading nations of the world made significant
commitments toward decarbonization, with Japan alsodeciding to reduce carbon emissions to zero by 2050 andgreenhouse gas emissions by 46% by 2030 comparedwith 2013 levels. Under these circumstances, attention
is focused on how to achieve these goals at the level ofindividual companies and regions.
Responding appropriately to climate change issues isessential for the sustainability of our society. If society as awhole is not sustainable, the region will not be sustainable;
nor will individual companies. The issue of climate change
needs to be addressed as a corporate sustainability issue
and as a sustainability issue for the region.
As a leading financial institution in the region, the Shizuoka
Bank Group is expected to play an important role insupporting these efforts. In order to do so, it is important

Motoshige ItohDirector

for us to demonstrate a willingness to be at the forefront intackling these issues. The Group has set ambitious targetsof realizing carbon neutrality by 2030 in Scope 1 and Scope
2. These targets further strengthen previous goals, andsignal the Group’s willingness to further increase its focus onaddressing climate change.
Information disclosure is also an important part ofcompanies’ response to climate change. Companies
must share accurate information on corporate activities
with shareholders, employees, customers and otherstakeholders. The Shizuoka Bank Group is making efforts
to actively promote information disclosure in response to
the recommendations of the TCFD (Task Force on Climaterelated Financial Disclosures). I hope that more in-depth
information will be disclosed in the future.
As I already mentioned, in responding to climate change
issues, it is necessary for the region as a whole to put
in place a system to realize its goals. Regional financial
institutions are expected to play a major role in strengthening
and accelerating such regional initiatives. It is my hopethat the Shizuoka Bank Group will contribute to regional
initiatives, including through lending and other core businessactivities. The Group has set a goal of achieving 2 trillion yen
in sustainable finance by 2030, and it goes without sayingthat the steady implementation of such goals will be effective
in promoting climate change responses throughout theregion.
The environment surrounding climate change issues ischanging dramatically. Difficult factors are also increasing,including soaring resource prices due to the Ukraine crisis.
This is why I hope that the Shizuoka Bank Group will further
strengthen its response as it steadily proceeds with its
climate change response in the region.

Shizuoka Bank Group Environmental Policy
1. C ompliance with relevant laws and regulations: We comply with laws and regulations related to the environment. We also take a sincere approach to therequirements from domestic and international guidelines for realization of sustainable society, reflecting it in our corporate activities.
2.	Reduction of environmental impact: We strive to reduce our environmental impact by introducing new technologies and renewable energy and promoting
energy and resource conservation.
3.	Development of products and services: We contribute to realization of sustainable society together with our business partners by developing environmentally friendly products and services.
4.	Recognition of climate change risks: We recognize that the impact of climate change will continue to be a management risk for the Shizuoka Bank Groupin the future and strive to enhance our risk management and information disclosure. We also set specific environmental targets and work to achieve them.
5.	Enlightening activities: We engage in environmental conservation activities as a company, raising awareness of environmental issues among each andevery executive and employee of the Shizuoka Bank Group and leading to actions that contribute to realization of sustainable society.
6.	Governance: We report to management on the status of our initiatives for environmental conservation and climate change and verify their effectiveness. In
addition, we strive to enhance our efforts through repeated communication with each stakeholder.
39

Response to Climate Change (disclosure based on TCFD recommendations)
In March 2020, the Shizuoka Bank announced its support for the TCFD* Recommendations. We will work together as a Group to help the region smoothly shift to a
decarbonized society as well as proceed with analyses on climate change scenariosand enhance our information disclosure.
*Task Force on Climate related Financial Disclosures

1

Governance

Revision of Environmental Policy in Shizuoka
Bank Group
With our recognition that the impact of climate change is abusiness risk for the Shizuoka Bank Group, we revised ourgroup-wide environmental policy in April 2021 to clarify ourintention to contribute to realizing a sustainable society throughour main business.
Each company within the Shizuoka Bank Group will continue
its initiatives to improve the precision of its GHG emissions
measurements and to reduce GHG emissions while working torealize a sustainable society through its own services.

2

Reinforcement of the governance structure
following the transformation to a holding
company structure
To date, in Shizuoka Bank, the Board of Directors has overseen
and verified the effectiveness of measures and policy decisions
and progress toward the realization of a sustainable society.
With the transformation to a holding company structure, weplan to establish a “Sustainability Promotion Council (provisionalname)” within the holding company (Shizuoka Financial Group
Inc.) as an organization to deliberate on measures to respond toclimate change, realize diversity, and contribute to sustainability
in the region.
After the transformation to a holding company structure,
we will aim to implement more flexible and effective measuresby reporting the contents to the Board of Directors and othermanagement meetings after discussions at this meeting.

Strategy

In order to realize a decarbonized society, the market size of businesses related to climate change is expected to grow. We support
customers’ capital investment and use of leasing to decrease GHG emissions, and actively support their review of business operations fortransition to a decarbonized society through funding and consulting.

Engagement (interview activities) with local companies
In September 2021, we conducted a series ofinterviews regarding carbon neutrality initiatives,primarily targeting companies in Shizuoka
Prefecture, and received responses from 2,643
companies.
It turned out that 70% of the companies have
not yet begun to take actions while 30% havealready taken concrete measures. According tothis result, we intend to continue our awarenessraising activities and support in the region.

Responses to our interview on carbon neutrality initiatives

Yes

Yes

538

804
Are you
working on carbon
neutrality?

No

1,839

Are there
any future plansfor initiatives?

No

1,301

40

Scenario analysis and risk perception associated with climate change
Shizuoka Bank is working to advance scenario analysis on risks of climate change based on the knowledge and expertise which it gainedby participating in a project in FY2021 by the Ministry of the Environment to support pilot programs for scenario analysis on risk andopportunity of climate in line with TCFD recommendations.
In FY2021, we conducted analysis on physical risk covering flooding in Shizuoka Prefecture and scenario analysis covering the paper
manufacturing industry and the automobile and its accessory parts manufacturing industry. We will continue to expand the field ofenhancing our analysis in the future.
Besides, as energy-related sectors (electricity, gas, energy, etc.) account for 1.4% of Shizuoka Bank’s carbon-related assets in its credit
balance, we will continue to analyze the impact of these sectors.
The risks associated with climate change for the Shizuoka Bank Group, as identified through the scenario analysis, are as follows.

Scenario Analyze
1.Transition Risk
Target Sector

Paper manufacture (*1)

Manufacture of motor vehicles and their accessories

Scenario

IEA net zero by 2050 (NZE2050)

IEA net zero by 2050 (NZE2050)
IEA/ETP 2017 Beyond 2°C

MethodAnalyze changes in credit costs based on scenarios, using carbon tax and other forecast data to project changes in profit/
loss and financial position by 2050

Analysis Result[Increase in credit cost] Up to approximately JPY14.5bn in total by 2050(*1 ) Participate in the Ministry of the Environment's Scenario Analysis Pilot Program Support Project

2.Physical Risk
Scope of coverage

Calculate credit costs related to risk of damage for building
and business continuity for SMEs in Shizuoka Pref. (*2)

Scenario

RCP8.5 in the IPCC WGⅡ AR6 (4°C Scenario)

MethodAnalyzes the risk of inundation in the event of flooding by overlaying business and collateral location information withhazard maps

Analysis Result[Increase in credit cost] Up to approximately JPY15.5bn by 2050

Calculate building damage costs and credit costs for
mortgage borrowers in Shizuoka Pref.

(*1 ) Participate in the Ministry of the Environment's Scenario Analysis Pilot Program Support Project

Risk Perception

Transition Risk

Physical Risk

3

short term

Impact of energy price fluctuations on customers' business performancemid-long
term

Impact of introduction of carbon tax, regulations, etc. on customers' business performance

Short andmid-long
term

Damage to collateral values and changes in customers' business performance due to expansion in thescale and frequency of floods

Risk Management

Investment and Loan Policy for Specific Sectors
In April 2021, we established our Investment and Loan Policy for Specific Sectors which articulates that in principle we do not fund coal
powered electricity generation due to high environmental impact.

41

4

Indicators and goals

Executive Sustainable Finance of 2 trillion yen(Cumulative amount executed until FY2030)
We have set a target to execute a cumulative total of 2 trillion yen
in sustainable finance by FY2030 (113.3 billion yen in FY2021).

Reduce the balance of investments andloans for coal-fired power generation tozero (by FY2040)
We have set a target to reduce the balance of investments andloans for coal-fired thermal power generation to zero by around
FY2040.
(The balance of investments and loans for coal-fired power
generation at the end of March 2022 was 18.1 billion yen, or
0.15% of total outstanding credit.)

Achieve carbon neutrality in FY2030
Under the “Shizuoka Bank Group Environmental Policy,”
the Shizuoka Bank Group has been working to reduce its
environmental impact by setting a target of “reducing GHG
emissions by 60% from the fiscal 2013 level” in fiscal 2030. In
order to accelerate our efforts to realize a decarbonized society
in the region, we have raised the target to “achieve carbon
neutrality in fiscal 2030” (Scope 1 and 2), aiming for net zero
GHG emissions in the Shizuoka Bank Group.
GHG emissions in FY2021 were 13,981 tons (-20.9%
compared to FY2013) due to the introduction of renewableenergy at the Headquarters and Training Center in September2021.

 O2 emissions by the Shizuoka Bank Group (in accordance withC
the standards for energy conservation statutory periodic reports)（t）
20,00017,682▲20.9％
13,981

15,00010,0005,000

0FY2013

FY2021

Installation of “Shizugin Solar Park” (off-site corporate PPA)
Aiming to achive carbon neutrality, the Shizuoka Bank Group has decided to newly build a energy solar power plant, “Shizugin
Solar Park,” in Shizuoka City.
This is an off-site corporate PPA* with Chubu Electric Power Group to introduce renewable energy with additionality (the effect of
encouraging new capital investment in renewable energy).
*An abbreviation for “Power Purchase Agreement,” which refers to the purchase of electricity from a power generation facility located offsite in a remote area.

Outline of the Shizugin Solar Park
Start of operation

September 2023 (scheduled)

Off-Site Corporate PPA Agreement
Date of conclusion May 20, 2022
Concluding party Chubu Electric Power Miraiz Co.
 nnual power generation amount:Aapprox. 2,900,000 kWh/ year (panel output: 1,995 kW)
Location:

Miho, Shimizu-ku, Shizuoka City

Installer

Chubu Electric Power Co.

Site area:

Approximately 23,000 square meters mount of GHG emission reduction:A
1,100 tons per year (estimated)

42

Human Capital Strategy
In order to continue to embody our corporate philosophy in the midst of drastic changes in theenvironment surrounding local communities and customers, it is important to change the awarenessand behavior of each and every officer and employee who supports the Group.
Based on this recognition, we completely revised our personnel system in October 2021, aiming to forma group of human capital in which each and every executive and employee can think and act
autonomously and continue to take on challenges while recognizing diverse opinions under the 14th
Mid-Term Management Plan.
Corporate Philosophy

10-year Vision

Medium-term
Business Plan Vision

14th Medium-term Business Plan COLORs ～ 多 彩 ～Developing
Strategies
to Achieve
the Vision

Group Sales Strategy（Perform Group-wide Functions）

Innovation Strategy（Pursue new profit opportunities）

Business Portfolio Strategy（Optimize allocation of management resource）

Reforming the Human Resources System to Achieve Human Capital Management
To form a group of human capital in which each and every executive and employee can think
and act autonomously and continue to take on challenges while recognizing diverse opinions.

Human Capital
Strategies Linked
to Strategy

Autonomy

Challenge

Diversity

Change of business model

DE&I Penetration

Work Style Innovation

Autonomy and challenge,
Learning from failure

Appreciate and take advantage of diversity

Human Capital Development (First Year of Recurrent Education) •Initiatives for Health and Productivity Management

Overall Satisfaction in Employee Attitude Survey
Employee Attitude Survey
Since fiscal 2008, we have conducted an employee attitude survey. By absorbing the candid opinions of executives andemployees, including their diversifying attitudes toward employment, work, and the organization, we grasp and identify
management issues from the human capital perspective and reflect them in management and human capital strategies.
What is Overall Satisfaction?
The average of the five factors of "fulfillment at work,""adaptation to work," "satisfaction with workplace,""satisfaction with superiors," and "loyalty to the company" istaken as the overall satisfaction level and measured (on ascale of 1 to 5).
In FY2021, "satisfaction with workplace" and "satisfaction
with superiors" were high, resulting in the highest ever overallsatisfaction 3.80.

43

Overall Satisfaction
3.9

3.78

3.8
3.7

3.80

3.64

3.6
3.5

FY2016FY2020

FY2021

Change of Business Model
In order to keep up with the ever-increasing speed of environmental changes and to continue practicing daily actions consistent with our
corporate philosophy, we have introduced a personnel evaluation system consisting of “OKRs” and “Values”. By setting forth challenging
and attractive “dreams” and “ideal states” as OKRs that will bring happiness to all stakeholders, and by aligning the vector of everyone’s
thoughts with management vision, we aim to take on the challenge of autonomous change that will open up the future of the region.

Introduction of OKR
Objective

Individual

Section

OKR is an evaluation system that is composed of Objective and Key
Results, and is not biased solely toward performance targets.
Each team and each officer and employee has a dream or visionthat they want to realize for their stakeholders as an “O”. They also
set “KR” at the moonshot level toward that ideal, and are evaluated
not only the degree of achievement, but also the attitude of challenge.
In the OKR setting, we provide opportunities for a flat and free exchange of ideas in order to align the organization and the individualwith what they want to achieve.

Key Results

Key Results

O

O

O

O

KR

KR

KR

KR

Three Values
In order to realize our corporate philosophy and group vision, we have established three keywords, “Value,” as the value standards that
we should embody in our daily actions, and we encourage our executives and employees to act in accordance with these values bycommunicating them to each other.

Go Wild!

Be Innovative!

Do Collaboration!

A state of repeated “learning from challenges and failures”

A state of ongoing “self-reformation” that aims for creation

A state of continuous creation of “added-value through collaboration”

with “ambitions for change”

from disruption through repeated "search for knowledge".

with “flat relationship” where opinions are freely exchanged.

Flattening of hierarchy and establishment of new career routes

Producing Job

Engage in works designated by the Bank

Performancebased Job

Engage in works where high performance is
expected based on the wishes of the individual

Master Job

Professionals in specific fields who can do wellboth inside and outside the group

BeforeAfter

3 levels

2 levels

Single-line carrier route

Multiline carrier route

Management

Producing job

Performance-based job

ManagerManager

Crew

Crew

Middlemanagement

Ordinary
employees

Master Job

We have reorganized our job group hierarchy into twolevels in order to activate flat communication, clarifyroles, and promote autonomy for each and every
executive and employee.
We have also established a new career route thatallows each individual to choose a career autonomously according to his or her values.

Creation of an Intra-company Venture
ProgramIntroduced Intra-company Social Media"Cheer*Chat"

In order to instill “autonomy and challenge” and “learningfrom failure,” and to link the awareness of change toaction, we have established an Creation of an intra-company venture program in which employees create andwork on their own business ideas.
In its first year, the program received 59 applications
from a wide range of age groups. We will link this to
future commercialization and reform of the group's
operations.

We have introduced “Cheer*Chat,” anintra-company social media for executives and employees to express theirappreciation and praise to each otheron a daily basis, in order to foster aculture of mutual recognition.
The hashtag function is also used tospread the “Value,” etc.

44

Human Capital Development (First Year of Recurrent Development for Group-wide Human Capital) 
Anticipating realization of "autonomy," "challenge," and "diversity," which are aimed through the personnel system reform, and the transformation to a holding company structure scheduled for October 2022, we have designated FY2022 as the "first year of recurrent development for group-wide human capital" and are working to develop human capital who can respond to the rapidly changing VUCA era,
where prediction is difficult.

“My Career Design System” (Intra-company Recruitment)
We are expanding the "My Career Design System," which supports each executive and employee in designing his or her own career.

External Dispatch/Internal Trainee
Dispatch employees to outside companies
and provide them with traineeships inspecialized departments with the aim to makethem acquire expertise in business succession,
financial market, digitalization, etc.

Dispatch to Regional Companies

Number of applicants to the My Career Design System
117(Person)107

Develop human capital through dispatch of
employees who gain a deep understanding of thebusiness challenges faced by regional companies
and can contribute to the development of ourcustomers by offering appropriate solutions.

72
FY2019Transfer System Among Group Companies
Allow each employee to transfer between
group companies according to his or her
career vision regardless of employment
status.

FY2021

Post Challenge / Intra-company side job

Side-job / Second Business

Provide employees with “post challenge”, system toallow them to work at a department of their choice,and intra-company side job that allows them towork one day a week in a department of theirchoice while belonging to their current department.

Actively support side-job and dispatch toother companies for second business inorder for executives and employees toachieve self-fulfillment and acquire broad
expertise and human network.

External Dispatch (Development Bank of Japan, Inc.)
In the Structured Finance Department, which I
belong to, I am involved in structuring project
finance for domestic infrastructure, while also
working hard to acquire know-how on arrangement
and build relationships within and outside the bank.
In the future, I would like to take on the challenge ofoverseas infrastructure and investment projects,
and grow into a human capital capable of creating
new profit-earning opportunities.

FY2020Ai Suzuki

Dispatch to Regional Companies (Manufacturing Industry)
I am involved in accounting in the Administration
Department and am also in charge of cost control. It
is a great experience for me to understand businessand management issues from the customer's
perspective.
I feel again that banks are reliable for small andmedium-sized businesses as they can provide a lotof information, and I will strive to be a banker who
can grow together with my customers by working tosolve their problems.

Kenta Suzuki“Value-up Program”“Meet-up Program”

Provide financial support for efforts related to capacity development with the aim to encourage employees to raise awareness of"thinking" and "acting" on one's own career, as well as to acquirea broad perspective and knowledge.

Provide financial support for participation in cross-industrial social
gathering and regional events with the aim to encourage employees to cultivate multifaceted perspectives from information thatcannot be obtained in daily work, such as outside cultures andways of thinking, to enhance human skills and to form human
networks.

System to Certificate Intra-company Qualification
Have a system to certificate intra-company qualification withclarification on required public qualifications and skills to solve
customers’ problems, where each individual is evaluated as oneof the four ranks of “Diamond,” “Platinum,” “Gold,” and “Silver”
based on his or her public qualifications and skills, and suchinformation is used as reference for selection in the My Career
Design System, in order to encourage realization of hopes anddreams.

Four ranks

Certification
Requirements

1st grade of FP

DiamondPublicQualifications
Platinum×

Gold

Business
Skill Check
SilverOne example of the numbers ofofficial qualification holders

331persons(+36 persons from the end of March 2021)
As of March 2022

IT Passport Examination

765 persons(+372 since end of June 2021)
As of June 202245

Developing Next Generation Leaders
We provide education and develop human capital for the future in a planned manner. In addition, we provide opportunities to build new
human networks and enhance “perspective and knowledge” of executives and employees as well as to encourage their autonomy andchallenge by letting them interact with human capital outside the Shizuoka Bank Group, such as at business schools, as part of the“External Interaction” program.
External
Interaction

Number of Participants in Leadership Development Courses

Executive Academy(person)165

Form a basis for leadership and foster a sense of management

Management Academy

businessschool94

Develop Leaders to Drive Group Transformation

Leader's Academy

cross-industrial
interaction

41

Develop leaders who can inspire members
FY2019Develop “Digital Human Capital”
We are working to improve the group-wide IT literacy and todevelop professional human capital capable of utilizing advanced
technology.
As part of this effort, we are promoting the acquisition of IT
Passport examination by all executives and employees by
FY2030, and as of June 2022, 765 employees have thiscertification.
Regarding the development of specialized human capital, we
increased the number of employees dispatched outside the Bank
to IT and DX fields, and established new side jobs andeducational programs in digital-related headquarters divisions.

FY2020

FY2021

FY2021 External Dispatch (PKSHA Technology)
I felt the need to deepen my knowledge of thedigital domain, so I took on the challenge of an
external dispatch.
Experiencing firsthand the advanced
technology and business model and being
exposed to the unique corporate culture of astart-up company gave me the opportunity to
update my work values. I will continue toimprove my own skills to provide new value toregional customers and the Bank.

KazumiMatsushita

Shizugin Group Open College (Liberal Arts)
We provide opportunities to "re-learn in new areas" such as seminars on liberal arts, IT/DX, green, and diversity, to promote"exploration of knowledge" of executives and employees and to improve their attractiveness as human capital.
Main
Lecturers
Shu Yamaguchi (Independent researcher)(FY2021)
Tetsuo Tsuchiya (Executive Director, Workman)
Yutaka Matsuo (Professor at the University of Tokyo)
Koichi Omae (Dancer with artificial legs)
Peter D. Pedersen (Social Designer) Kohei Saito (Philosopher)
Ken Noguchi (Alpinist) Yoshie Komuro (Representative of Work-Life Balance)
Fumiaki Ikeno (Senior Fellow, Stanford University)
Kyoko Iwasaki (Gold medalist) Yukiho Suenaga (Art Thinking)Akemi Nakamura (Representative of Hyakushokuya), etc.

Number of participants in Open College(person)

4,498
3,716

2,599

FY2019FY2020

FY2021

Support for Growth and Retention of Younger Human Capital
We have introduced a retention support system (mentor system, anchor system, etc.) for younger human capital in order to enhance
support for early career development from learning the basics as a working member of society. By providing opportunities for younger
human capital to interact with senior employees at different levels and in different jobs, we are building a follow-up system and fostering aculture of human capital development to help staff members take root in their jobs.

1-on-1 Meeting

Scholarship Repayment Support Program

We have introduced 1-on-1 meetings to foster a culture ofhuman capital development through communication between
supervisors and subordinates, and by extension, through therevitalization of communication within the workplace. We aim todeepen the relationship of trust between supervisors andsubordinates, and to create an organization where subordinate
thinks and acts on his or her own by allowing them to lead
1-on-1 meetings.

We have introduced "Scholarship Repayment Support Program"
since April 2020. We aim at improving job satisfaction andcontributing to solving the social issue of scholarship repayment
burdens by providing repayment support to younger employees
based on their years of service.

46

Penetration of DE&I (Diversity, Equity & Inclusion)
We will further promote "DE&I," the creation of unprecedented ideas and new sensibilities by appreciating and crossing the diverse
backgrounds, careers, and values of each and every executive and employee, leading to the development of regional communities,
sustainable growth of the Group, and enhancement of corporate value.
FY2019FY2020

FY2021

Launched "Workstyle Innovation" initiatives

Launched "Workstyle Innovation2.0" initiatives(Introduction of flextime system (with core hours),(Introduction of full flextime system (no core time),abolition of dress code, introduction of
telecommuting etc.)

introduction of lifestyle select system, etc.)

Side Jobs(side jobs within the Group) started

FY2022Introduced cafeteria plan

Promote side and dual jobs outside the Group
Expansion of employment opportunities for experienced human capital(Raise the maximum age of employment for rehired employees to 70,
and develop new jobs that make use of skills and experience)

Established Shizugin Heartfull

Shizugin Heartful Obtained
certification as a special subsidiary company

Shizugin TM Securities was Approved
as an Affiliated subsidiary exception

Became the first regional bank to join "The Valuable 500"
Started Sports & Arts Recruitment

Started recruiting para-athletesHigh school graduate recruitment resumes
Endorsed the "100% Paternity Leave Declaration" and the "30% Challenge by 2030"
Received "Fujinokuni Family Education Support Promotion Company" award.

Diversification of Human CapitalIn addition to our traditional efforts to promote the women empowerment and expand employment of people with disabilities, we are actively
accepting human capital with diverse knowledge and experience by promoting the activities of experienced human capital, hiring Mid-career
professionals, global recruiting of foreigners and foreign students, accepting second jobs from other companies, recruiting highly specialized
professional human resources, recruiting sports and art (para-athletes), and resuming high school graduate recruitment.

Initiatives to Expand Diversity

Initiatives to Expand Regional Employment
Sports & Arts Recruitment(4 hires in 2021 and 3 in 2022)

Mid-career Recruitment

Global Recruiting

Actively recruit people withexperience in financial andnon-financial fields who canmake an immediate impact inorder to respond toincreasingly complex
customer needs*.

Strengthen global recruitment
to secure human capital withproblem-solving skills, both
domestically and internationallyin order to respond to
economic globalization.

Acceptance of Side Jobfrom Other Industries
Employ side-job workers fromother industries and promote
their activities through flexible
work styles such as remote
work in order to actively
embrace knowledge notavailable within the Group.

Promotion of Experienced Human Capital
Expand opportunities forexperienced human capital byraising the maximum age limit
for rehired employees anddeveloping new job functions, inorder to pass on businessknow-how and raise the level of skills.

*206 hires in FY2021, including 15 career hires (85 career hires enrolled)
Shizuoka Bank Group has set targets for the ratio of women, non-Japanese, and mid-careerhires in management positions to ensure diversity in the appointment of core humanresources, and is promoting human capital development and environmental improvements
to achieve these targets, which are disclosed in the Corporate Governance Report.

47

To secure human capital with newknowledge and experience beyond
finance and to create local
employment, we hire athletes who
belong to local sports
organizations, etc.
Support for Para-athletes
In June 2021, we hired a para-athlete,
Hidefumi Wakayama, a wheelchair rugby
player who won a bronze medal at theTokyo Paralympics.

Recruitment of High School Graduates(7 in 2021 and 3 in 2022)
We have resumed hiring high school
graduates for the first time in 28 years.
They are able to balance their
university studies while working at the
Bank, thereby fostering human capitaland creating jobs in the region.

Initiatives for Women Empowerment
In order to promote the women empowerment, we aim toachieve a ratio of at least 22% of women in leadership positions(managers at the section manager level and above) by the end of
March 2024 and 40% by the end of March 2031, while focusing
on the development of human capital for the career development
and management of women and actively assigning andappointing women to these positions.

Percentage of Female Executives
We support the "Challenge to 30% by 2030" promoted by theJapan Business Federation, which aims to increase thepercentage of women on the Executive Officers to 30% or moreby 2030.
Shizuoka Bank has one female outside director and one female
outside auditor, and one female was appointed as an Executive
Officer in April 2022. At group companies, one female wasappointed as Representative Director in June 2022.

Percentage of women in leadership positions
Percentage of women in leadership positions, including bank administration trustees
(%)
22

18
16
14

Achieved 100% Paternity Rate
In October 2021, childcare-related measures were collectively
referred to as the "Ikusapo (child care) Program (p. 50)" andvarious programs were newly established or expanded.
In addition, we held seminars on cooking, childcare, and othertopics to encourage men's participation in household chores, andconducted training for all managers in accordance with the revisionof the Child Care and Family Care Leave Law. We will continue tomake efforts to support the essential use of childcare leave.

17.4
15.0
FY201715.7

FY2018

17.9

16.9

16.1

FY2019FY2020

FY2021

10

10
8

6

6
4

4

4

As of June 2019

As of June 20202

As of June 2018

As of June 2021

As of June 2022

Shizuoka Bank Group has been striving to create a comfortable work
environment for women.These days, almost no women leave their jobs
because of marriage, childbirth, or childcare, and an increasing number ofwomen are working as branch general managers and managers. What is
important in the promotion of Women Empowerment is to understand thesituation of female executives and employees, to foster an organizational
culture that meets their needs, and to increase the number of options forworking styles in which women can play an active role.
I hope that all working women officials will have the courage to believe in theirown potential and take on the challenge of a new stage, rather than narrowing
their possibilities because of a lack of precedent or experience. By moving up
to a new stage, you will be able to see a wonderful view that you could notsee before. Promoting diversity, including women empowerment, is essential
not only to enhance corporate value but also to build a prosperous society.
Let's work together for the benefit of our customers and regional communities.

Percentage of men taking childcare leave(%)
100

Average days of leave

Percentage of leave taken

100(days)
10

90

8

80

6

70

4

62.9

63.6

1.9

5.2

2.8

7.6

FY2018FY2019FY2020

FY2021

64.7

60
50

Special Leave for Declaration of Childcare Dad

19.6
18.5

Number of female executives in the whole group (including outside directors and executive officers)

0

Executive Officer andGeneral Manager ofHead Office

22.2

21.3

20

2

Michiko Ohashi

Percentage of women in leadership positions

20

Flexible leave for men to take between 10 and 20 days within 8 weeks ofchild birth.

Money to Support Households with Dad Taking Childcare Leave
100 thousand yen is paid to households in which a man takes childcare
leave of at least one month.

48

Initiatives to foster a culture of DE&I (Diversity, Equity & Inclusion)
Establishment of Diversity Promotion Committee
In June 2021, a Diversity Promotion Committee was established to promote activities related to DE&I.
Comprised of diversified human capital (career hires, global hires, side-job employees, sports & arts hires, experienced human capital,etc.), the group is committed to deepening understanding and awareness among executives and employees to ensure diversity, fairness
and inclusion in the group over the medium to long term, and to recommend measures to address cross-organizational issues.

Measures Implemented

Workshop Topics Addressed

Appointed a person(“ally”) in charge of diversity promotion in each department.

Unconscious Bias

Roundtable discussions by theme, such as childcare participation, etc.

Men's participation in childcare in accordance with the revision of the Child Care andNetworking beyond the workplace Implemented E-learning and position-specific training

Family Care Leave Law Intra-personal diversity LGBTQ and corporations (co-sponsored by

to promote understanding of DE&I

Shizuginship)

Supporting the Success of People with
Disabilities
Shizugin Heartful was established in October 2019 for the
purpose of creating a work environment where people withdisabilities can work with peace of mind while feeling rewarded
and fulfilled, and to actively support their participation in society.
As of April 2022, the employment rate of persons with disabilities (group total) is 2.46%, exceeding the legally mandated
employment rate (2.3%).
In addition, we endorse the concept of "The Valuable 500," aninternational initiative to promote the success of people withdisabilities, and became the firstJapanese regional bank to join thisinitiative.

Introduction of Group Companies
Shizugin Heartfull Co., Ltd.

Main Businesses
Preparation, printing andbinding of various documents

Employees with disabilities, mainly graduates of special needs schools,
are active in the company. We are entrusted by Shizuoka Bank andothers with clerical work such as making business cards, issuing bills
and checkbooks, and disposing of confidential documents.
We actively support the independence and social participation ofpeople with disabilities.

Eradication of Harassment
To enhance the happiness and satisfaction of executives and employees, we are strengthening our efforts to eradicate harassment. In
addition, through training for all managers and workplace-based study sessions, supervisors and subordinates discuss gaps in mutualawareness, etc., in order to build a favorable work environment and improve communication.

Initiatives for Health and Productivity Management
We position the maintenance and promotion of the health ofexecutives and employees as an important management issue,
and under the leadership of management, we have establisheda basic policy, the "Health and Productivity Management
Declaration," and are actively working to create a comfortable
work environment and support the health of executives and employees.
With regard to mental health measures, we are working toenhance our mental health care system by establishing a
consultation system with industrial health staff and supporting
the return to work of employees who have taken leave. In
addition, we are working on various health promotion measures,such as distributing wearable devices to all executives andemployees to prevent lifestyle-related diseases, with the aim ofrealizing "well-being" for each and every employee.

49Work Style Innovation
In order to realize even more flexible work styles for all executives
and employees, we have developed and promoted Work Style
Innovation, an initiative that began in August 2019, and introduced a full flextime system as well as a lifestyle select systemthat allows employees to choose their relocation and job classification.
In addition, in FY2021, we participated in a workcation demonstration experiment as a model company for the Japan Tourism
Agency's "New Travel Style Promotion Project.

Related Systems of Work Style Innovation
Full Flextime System
Lifestyle select system (relocation, change in job classification)
Promotion of side jobs within and outside the Group
Telecommuting and tele-work
Promotion of experienced human resources
System of leave of absence and work measures for relearning, etc.
Spousal leave system for overseas postings
Abolition of dress code

Support for Balancing Work and Personal LifeWe are expanding our support system to enable executives and employees to realize work styles that suit their career development andvalues, and to maximize their abilities.
Ikusapo (child care) Program
infertility treatment

pregnancy

Infertility treatment
leave (365 days)

maternity leave

Maternity leave(6 weeks)

childcare leave

Before elementary school elementary school

Postpartum
leave(8 weeks)

Childcare leave(until the child reaches the age of two)

Spousalmaternity
special leave

System of leave for childcareof children of relatives, etc.
(until the eligible child reaches the age of two)Nursing care

Nursing care leave(365 days)

System of work measures
System of work
for infertility treatment
measures for pregnancy(Short-time / Within specified (Short-time / Within specified/ Overtime limit)/ Overtime limit)

System of work measuresfor childcare(Short-time / Within specified/ Overtime limit)

System of work measuresfor nursing care
(Short-time / Within specified/ Overtime limit)

Return-to-Work Support ProgramChildcare support interviews(at the time of pregnancy and before leave)

Childcare support meeting(during absence)

Childcare support
meeting(before returning
to work)Special Leave for
Declaration ofChildcare Dadcelebration money
given at birth

Money to support
households taking
childcare leave of dad“Well-happi (Well-being! Happy!) program”
This program aims to revitalize the company's organization and improve
productivity by raising health awareness and developing healthy behavioral habits in each and every executive and employee. The program
promotes autonomous health initiatives through a system in which
points awarded for health-enhancing actions can be used for benefit
programs.

Childcare support meeting(after returning to work)

Child nursing care leave(5 days for one child, 10 days
for two children)

Nursing leave for care
(5 days for one person,
10 days for two persons)On-site childcare facilities“Eco-chari (bicycle) Support
System”
The program encourages employees to switch
means of commuting from cars and buses tobicycles by subsidizing the cost of purchasing
bicycles in order to support health improvement, reduce environmental impact, and maintain transportation functions in the event of adisaster.

Introduction of the “Calomama Plus”, mobile-app for health management
Introduction of "Cafeteria Plan"Expansion of benefit menu to match lifestyles and values (e.g., subsidies forphysical examinations, tie-ups with sports facilities and lodging facilities)

50

Strengthening of Corporate GovernanceShizuoka Bank Group is strengthening its management systems to enhance corporate value.

Basic Approach to Corporate GovernanceShizuoka Bank aims to build a group-wide resilient management structure that will enable sustainable growth, as well as to further
contribute to the happiness of all stakeholders, including local communities, customers, employees, and shareholders.
We will further enhance corporate governance based on the basic concept of "separation of supervision and execution," working tobuild a corporate governance system that our stakeholders demand.

Corporate Governance Policies
The Shizuoka Bank establishes a suitable date to hold general meetings of shareholders and publishes notices of1these meetings (including English translations) on the Shizuoka Bank website. By continually implementing initiatives
such as these aimed at a more vigorous general meeting of shareholders and the smooth exercise of shareholders’voting rights, we will secure the rights and equality of shareholders.
So that the Shizuoka Bank can continue to be a financial institution that is trusted and chosen by all stakeholders, including

2

shareholders, region, customers, and employees, we will strive for balance in corporate management by addressing diverse
viewpoints, including economic, social, and environmental perspectives, and work towards enhancing sustainability.
The Shizuoka Bank will engage in appropriate disclosure based on the Banking Act, Financial Instruments and Exchange

3Act, and other laws and regulations, as well as securities listing regulations of Japanese stock exchanges. In addition, we
will strive to disclose information voluntarily, including non-financial information, to ensure the soundness and transparencyof management.
In addition to appointing several independent officers and drawing on the functions of the Nomination & Remuneration
Committee (an optional committee consisting of a majority of outside directors), the Advisory Board (a management adviso-

4

ry committee consisting mainly of external specialists) and the Committee of Administrative Supervision (a committee toreinforce supervision of the execution of duties, with members including all outside directors), the Shizuoka Bank strives tostrengthen its corporate government system through continuing consideration of optimal systems for the Bank, including
the evaluation of other modes of governance apart from that of a company with an Audit & Supervisory Board.

551

The Shizuoka Bank engages in constructive dialogue with shareholders through proactive investor relations activities, inorder to contribute to the sustained growth and enhanced corporate value over the medium to long term.

Structure Supporting Corporate GovernanceCorporate Governance System (as of July 1, 2022)
General Meeting of Shareholders

Audit & Supervisory Board

Board of Directors

Nomination & Remuneration Committee

Office of Audit & Supervisory
Board Members
Advisory Board

President

Committee of Administrative Supervision

Executive Committee andother major committees
Executive Committee
Compliance Committeee
Committee for Integrated Risk andBudget Management
Credit Committee

Internal Audit Div.

Banking Div.

Corporate Center

Outside Directors
Inside Directors
Outside Experts

Board of Directors

Audit & Supervisory Board

The Board of Directors consisting of 9 directors (including 4
outside directors who are independent officers as stipulated by
the Tokyo Stock Exchange Inc.) is responsible for managementlevel decision-making and supervision. The Board of Directors
decides important management strategies, such as mediumterm business plans and operational plans, and basic policies
relating to compliance and risk management. It also oversees theexecution of operations.

The Shizuoka Bank has adopted the Audit & Supervisory Board
Member system of governance. The Audit & Supervisory Board
consists of 5 Audit & Supervisory Board members (including 3
outside Audit & Supervisory Board members who are independent officers). Audit & Supervisory Board members audit directors’ performance of their duties based on the auditing standards
for Audit & Supervisory Board members.

Optional Committees to Strengthen Corporate GovernanceNomination & Remuneration Committee
The Bank has established a Nomination & Remuneration Committee where outside directors compose of a majority of members, with outside Audit & Supervisory Board members participating
as observers. The Nomination & Remuneration Committee responds to enquiries on matters such as the nomination of officers, and discusses matters such as the development of senior
management, in order to further enhance objectivity and transparency in the selection and development of senior management.
Moreover, from the perspective of further enhancing transparency in the determination of officers’ compensation, and to increase the fairness and acceptability of the compensation
decision process, the Nomination & Remuneration Committee also sets standards for compensation, and deliberates on matters including the allocation of performance-linked compensation,as an optional body to determine compensation, authorized by the Board of Directors.

Committee of Administrative Supervision

Advisory Board (Management Advisory Committee)

The Committee of Administrative Supervision has been established to reinforce
supervision of execution of operations by the Board of Directors. This committee,
consisting mainly of directors who are not involved in execution of operations and are
selected by the Board of Directors, monitors the situation of the execution of operations
by the executive departments, and requests improvement if necessary.

In response to enquiries by the President, the Advisory Board deliberates on the validity
and appropriateness of important matters of corporate governance, including matterspertaining to all aspects of management, and any issues related to management.

52

Enhancing the Effectiveness of Corporate GovernanceInitiatives to Strengthen Corporate Governance

FY2007

Introduced performance-linked compensation and stock compensation-type stock options

FY2008Established the Advisory Board (optional organizational body)

FY2013

Established the Committee of Administrative Supervision. Appointed one outside director

FY2015Introduced a directors’ retirement benefit system based on a points system linked to share priceEstablished a Remuneration Committee
Started the discussion meeting for independent officers
Began effectiveness evaluations of the Board of Directors as a whole
Appointed two outside directors

FY2020Introduced a restricted share-based compensation system
Introduced mandate contracts for executive officers
Established the Nomination & Remuneration Committee
Appointed three outside directors

FY2021

Announced the start of consideration of transformation to a holding company structure (scheduled for
October 2022)
Appointed four outside directors

Strengthen Corporate Governance System by Leveraging the Expertise of Outside Officers
By utilizing the knowledge of independent outside directors andoutside auditors in corporate governance, we are making constantefforts to strengthen our corporate governance system, which isoriented toward the "separation of supervision and execution".
In order to promote more active discussions at meetings of theBoard of Directors and other meetings, we provide opportunities
to explain the Group's business operations, management plans,
corporate governance structure, and other matters to outside
directors and auditors at the time of their appointment or at othertimes.

In addition to distributing materials of the Board of Directors
meetings in advance, we provide explanations in advance byposting materials of the Executive Committee and other meetings
on terminals that can be viewed from outside the Company.
Discussion meetings for independent officers have been held
several times every year since fiscal 2015.
In addition, we strive to enhance the provision of information
on business execution divisions by providing opportunities forexchange of opinions between independent directors and officers
and employees.

Ratio of outside directors to all directors-2020/6

2020/6-2021/6-

Below 1/3

1/3

Above1/3(2/10)(3/9)(4/9*)*as of the end of Jun. 2022

Discussion meetings involving independent officers in recent years

53

FY2019FY2020

FY2021

Discussion meeting for independent officers (twice)
Discussion meeting with representative directors (once)
Discussion meeting with general managers of business
units in charge of each area (once)
Discussion meeting with general managers of branches

Discussion meeting for independent officers* (3 times)

Discussion meeting for independent officers* (3 times)*One of these sessions was on the topic of Evaluating theEffectiveness of the Board of Directors*One of these sessions was on the topic of Evaluating theEffectiveness of the Board of Directors

Discussion meeting with representative directors (twice)
Discussion meeting with Female Employees (once)

Discussion meeting with representative directors (once)
Discussion meeting with Headquarter Executive Division(twice)Functioning of the Board of Directors in the Realization of the Group-wide Management
Strategy
Shizuoka Bank Group aims to strengthen group managementand develop new businesses that contribute to regional growth,in addition to providing sound financial intermediary functions tothe community, etc., based on a flexible and strong governancestructure that serves as the foundation for sustainable growth.
The Board of Directors is charged with the mission ofoverseeing the execution of operations based on the diverse
expertise of the entire group, leading to the sustainable growth of
stakeholders and the group.

The Board of Directors as a whole ensures an appropriatebalance by allowing each director and auditor to fulfill their roles
from the perspectives of "management," "society and theeconomy," and "business" from a comprehensive perspective
based on the knowledge they have gained from their professional
backgrounds and other experiences.

Board of Directors Skills Matrix (Fields where each member is expected to play important role)
Management
Name

Position

Katsunori Nakanishi

Chairman & CEO

Hisashi Shibata

President & COO

Minoru Yagi

Deputy President & CFO

Society, Economy

Supervision of management Leading a comprehensive
Vision for regional
as s listing company
financial groupsociety and economy

Business

Response to socialchangeFunction for financial
intermediation

New businesses(development, composition)

Director & Senior Managing
Yutaka Fukushima
Executive Officer
Director & Senior Executive
Koichi Kiyokawa
Officer
Kumi Fujisawa

Outside Director

Motoshige Itoh

Outside Director

Kazuto Tsubouchi

Outside Director

Kazutoshi Inano

Outside Director

Hiroki Saito

Full-time Auditor

Mitsuru Kobayashi

Full-time Auditor

Yoshihiro Yamashita

Outside Auditor

Naomi Ushio

Outside Auditor

Isamu Nakamura

Outside Auditor

Innovation
Environment
IT

Diversity

Initiatives for Improvement Utilizing the Evaluation of the Effectiveness of the Board of
Directors as a Whole

FY2019FY2020

FY2021

initiatives

auditors, and the Board of Directors held discussions andevaluations to further improve the effectiveness of the system
based on the opinions of outside directors at the meeting forexchange of opinions with independent directors.

 nsure time for discussion of medium- toElong-term management issues
Enhance prior explanations to outside directors
and auditsH old meetings for exchange of opinions between
independent directors and the sales fieldHold governance study sessions for board
members held by outside lecturers
Establish the Nomination & Remuneration
Committee

 nsure opportunities for discussion within andEoutside the Board of Directors prior to theresolution of important matters
Let some outside officers participate in internal
committees as observers

IssuesSince fiscal 2015, we have conducted an evaluation of theeffectiveness of the Board of Directors as a whole each fiscal
year, and the results are used to improve its effectiveness.
In fiscal 2021, with the involvement of an outside specialist
firm, we conducted a questionnaire survey of directors andEnhance opportunities for communication
between outside directors and the sales field
Clarify of issues in deliberations

 ctivate discussion on appropriate risk-taking
AEnhance information provided to outside
directors and audits regarding executive
divisions ctivate discussion of group managementA
perspectives
Enhance information provided to outside
directors and audits regarding business sites

54Compensation Structure for Directors to Enhance Corporate Value
Basic Policy on Directors’ Compensation
 he compensation system shall be designed to include appropriate incentives and encourage morale and desire forTenhanced performance, the motivation to increase corporate value, and shareholder-oriented management, to achievesustainable and stable growth for the Shizuoka Bank Group.
 he compensation system shall function to control risk-taking within appropriate bounds, as well as maintain and enT
hance sound management practices, in view of the Shizuoka Bank Group’s responsibility to engage in appropriate
management and administration as a highly public institution.
 he fairness and objectiveness in the process for determining compensation, etc. shall be ensured, under appropriateTsupervision from the Board of Directors, including the involvement of the Nomination & Remuneration Committee, while
respecting the resolutions of the General Meeting of Shareholders.

In addition to fixed monetary compensation, directors’ compensation comprises performance-linked compensation, stockcompensation-type stock options and a directors’ retirement
benefit based on a points system linked to share price. Thissystem of compensation encourages morale and desire forenhanced performance, the motivation to increase corporate
value, and shareholder-oriented management.
The upper limits of each component of compensation were
determined by resolutions of the 101st, 109th, and 114th Annual
General Meetings of Shareholders held in June 2007, June 2015,

and June 2020, respectively. The Board of Directors is entrusted
to allocate each component of compensation by the general
meeting of shareholders that adopted each component. Restricted share-based compensation and the points for directors’ retirement benefits based on a points system linked to share price areallocated by resolution of the Board of Directors. By resolution of
the Board of Directors, the Nomination & Remuneration Committee is entrusted to allocate fixed monetary compensation andperformance-linked compensation.

Composition of Directors’ Compensation*1
Basic compensation (cash)

Performance-linked compensation, etc. (cash)

Non-monetary compensation (stock)

Fixed monetarycompensation

Performance-linked
compensation

Directors’ retirement
benefits based on a points
system linked to share priceestricted share-based
compensation

Upper limits/
Total for all
directors

No more than 300 million yen
per year

An amount corresponding to thelevel of net income, not exceeding ¥140 million

No more than 50,000 points per
year (each point is worth one
share)

No more than 50 million yen and
50,000 shares per year

proportion*2

60%

20%

10%

10%

*1 Excluding outside directors and non-executive directors.
*2 The percentage of compensation under (3) and (4) is calculated based on past Shizuoka Bank stock price levels and other factors. The percentage will vary depending on the amount ofcompensation under compensation plan (2) and Shizuoka Bank’s stock price.

Performance-linked Compensation

Restricted Share-based Compensation System

The Bank has introduced a system of performance-linked compensation,indexed to net income attributable to owners of the parent, aimed at
encouraging morale and desire for enhanced performance among
directors (excluding outside directors and part-time directors).

The Bank has introduced a restricted share-based compensation system
under which common stock with certain transfer restrictions is granted,
with the aim of providing incentives to directors (excluding outside
directors and part-time directors) to work on the sustainable enhancement of corporate value, and to promote the further sharing of value withshareholders.

Directors’ retirement Benefits Based on a Points System Linked to Share Price
The Bank has introduced a system of directors’ retirement benefits based on a points system linked to share price, where retiring directors receive a monetaryamount linked to the share price, with the aim of further strengthening the incentive for directors to increase corporate value during their terms of office.
Directors (except for outside directors and part-time directors) are allotted a specific number of points each year. Upon retirement, directors receive an amountin cash equivalent to their accumulated points multiplied by the average share closing price of Shizuoka Bank during the six-month period immediately prior
to retirement.

55

Thorough Enforcement of Compliance and Risk Management
The Shizuoka Bank Group is engaged in initiatives to further strengthen its compliance and integrated
risk management systems in order to respond accurately and appropriately to changes in the businessenvironment, as well as factors such as the diversification and increasing complexity of operations.
Basic Compliance Policy
As a member of the local community, the Shizuoka
Bank Group complies with laws, regulations, and social
norms and embraces a spirit of fair play. To achieve a
harmonious relationship with the community for further

development, the Bank has established an EthicalCharter, which sets out the Bank’s basic compliancepolicy.

Ethical Charter

Gaining Trust

We are constantly aware of the importance of the Bank’s social responsibility and public mission. As a banking
group, we strive to build unshakable trust through sound business management.

Compliance with Laws, Regulations
and Rules

In the conduct of our business, we comply with laws, regulations, and Company rules, and on the basis of honesty
and fairness, we adhere to social norms as a member of society.
As executives and employee of the Shizuoka Bank Group, we contribute to the development of the local commu­
nity by fostering a strong social etiquette and a spirit of fair play.
The Shizuoka Bank Group adamantly rejects the unreasonable demands made by anti-social forces and groups
that offend public order and morals and absolutely refuses to deal with such groups.
We actively communicate with stakeholders and cooperate with them to build a strong compliance system.

Social Etiquette and Fair PlayBreaking Contact with
Anti-Social Forces
Active Communication

Shizuoka Bank Group’s Compliance and Risk Management Systems
Board of Directors

Credit Risk
Risk management groups Management
Group

Risk
Management
Group

Allocation
andmonitoringof risk
capitalRisk Management Group

Compliance Department
Anti-Money Laundering andOther Financial Crimes Management OfficeCompliance GroupMoney
LaunderingriskCompliance

Operational
Risk Management Group

Formulationof riskmanagement
policy andstandards

Business operations

Creditrisk

Marketrisk

Liquidity
riskOperational risk
Administrative System risk Other risks
risk

Verification of effectiveness

Risk types

External audit (audit firm)

Risk Management Department

Audit Planning GroupInternal Audit Division Audit Department
Site Audit Group

Risk Management
Department(Integrated risk management)

Audit & Supervisory Board Members / Audit & Supervisory Board / Office of Audit & Supervisory Board Members

Committee of
Administrative Supervision

Executive Committee
Compliance Committee
Committee for Integrated Risk andBudget Management, etc.

Branches in Japan and overseas, headquarters departments, Group companies in Japan, overseas subsidiaries

56Compliance System
At the Shizuoka Bank Group, the Board of Directors
formulates the Compliance Program, which is an annual
action plan.
The Compliance Committee, chaired by the President
and consisting of directors and other executives, meets
monthly to deliberate on important compliance-related
matters and assess the operation of the compliancesystem across the Shizuoka Bank Group, including the
progress toward achievement of the goals of theCompliance Program. The committee reviews andrevises the Compliance System as deemed necessary.
The Compliance Department monitors the functioningof the compliance system through integrated
management of compliance-related information toprevent possible compliance violations and strengthen
the compliance system. Compliance Officers andofficers responsible for the management of risk-bearing
products assigned to the Compliance Department
provide guidance to the Bank’s branch offices andconduct monitoring, through on-site checks.
Compliance managers and compliance promoters
are assigned to all branches of the Bank, headquarters
departments, and Group companies where they
conduct compliance inspections and draft reports on
day-to-day business operations. The Audit Departmentof the Internal Audit Division verifies the appropriatenessand effectiveness of the compliance system.

Cultivating Compliance-centered Corporate Culture
Management is actively involved in compliance activities
to enhance awareness of all employees of the Shizuoka
Bank Group concerning compliance. For example,
directors directly give instructions about compliance,
taking the opportunity of branch managers’ meetingsand visits to branch offices.
The Bank’s measures to foster and raise complianceawareness include the following:
Shizugin Compliance Book
The Bank has established standards of conduct vis-àvis laws and regulations that must be observed in theexecution of day-to-day business activities. The
Shizugin Compliance Book, which is on the enterprisenetwork for reference by all officers and employees of
the Shizuoka Bank Group, provides clear explanations
concerning the relevant laws and regulations.
“Opinion Box” Internal Reporting System
For early detection and remediation of compliancerelated issues, such as violation of laws and regulations,
the Bank has established the “Opinion Box,” an internalreporting system via which all executives and employeesof the Shizuoka Bank Group can directly report, so as
to enhance the self-corrective function.
Reports can be made to the Executive in charge ofcompliance, the Compliance Management Department,
and attorneys’ offices by phone, in writing, by email, or

57

through groupware regardless of whether anonymousor not. The content of the postings will be handled by“trade call response personnel” who are legally obligatedto maintain confidentiality, and the name of the person
making a report will not be disclosed without his or her
consent. In order to encourage use of the Opinion Box,
it is stipulated that under no circumstances are
executives or employees permitted to seek to identify
the person reporting and no one who reports shall betreated unfavorably.
Compliance Education and Training
The Bank conducts ongoing educational activities forthe practice of compliance, such as training forexecutives and employees and the holding of monthly
study groups at branches.
Countermeasures to Prevent Money Laundering and Provisionof Funds to Terrorists
The importance of countermeasures to combat money
laundering and the provision of funds to terrorists isincreasing in recent years, as an issue that Japan andthe international community must tackle. The Shizuoka
Bank regards these issues not only in terms ofcompliance, but also in terms of coping with the risks,
which may develop into management issues. As such,
the Shizuoka Bank Group is making a concerted effort
to enhance the effectiveness of such countermeasures,with initiatives to strengthen its preparedness such as
the establishment of the Anti-Money Laundering andOther Financial Crimes Management Office in April
2018.
Shizuoka Bank’s Control Systems 
Category
First line ofdefense(sales division)
Second line ofdefense(management
departments)
Third line ofdefense(Internal Audit
Division)

Department
Branches, loan centers etc.
Anti-Money Laundering andOther Financial Crimes
Management Office,Department responsible atheadquarters
Audit Department

Role
Proper understanding andaccurate executing of policy andprocedures
Monitoring and support of the firstline of defense (sales division)

Verification of the effectiveness ofcountermeasures to combat
money laundering and theprovision of funds to terrorists

The control system established by the Shizuoka Bank is based on the ideaof “three lines of defense” indicated in the “Guidelines for Anti-Money
Laundering and Combating the Financing of Terrorism” established by the
Financial Services Agency.

The Shizuoka Bank will continue to cooperate withrelated government departments and agencies tostrengthen countermeasures to combat money
laundering and the provision of funds to terrorists,
aiming to eliminate criminal organizations and activities
from the Bank’s finances, and continuing to provide
safe and convenient financial services.

Risk Appetite Framework (RAF)
The Shizuoka Bank Group has clarified the risk appetite(types and amount of risks that the Group is willing totake) in order to realize its corporate philosophy andmanagement targets, and uses RAF as a method ofcorporate administration and risk management.
The specific process is shown in the table below. The
aim is to use RAF to realize optimum risk return andachieve the medium- to long-term growth of the
Shizuoka Bank Group.
1 Analysis of management environment
2 Compilation of business plan based on risk appetite
3 Monitoring of operating status
4 Flexible review of risk appetite

14th Medium-term Business Plan
Group Risk Appetite Basic Policy
 y prioritizing the use of management resources andBrisk-taking with regard to initiatives in the region that is
our management base, and strategically allocating
resources with a focus on human resources inparticular, we will transform into a corporate group thatcan provide diversified solutions and enhance ourpresence in the region.

Top priorities

 o continue to exist as a corporate group that isTneeded by the region, we will complement ourearnings by taking risks to increase earnings throughrisk capital allocation (investments and loans in growthareas and fields).
1 Change to a problem-solving corporate group in
the region

2 Commitment to the future of the region andregion-producing

Supplementation

3 Realization of economic and social sustainability toachieve 1 & 2

Integrated Risk Management Systems
The Shizuoka Bank Group has established a basic
framework, including definitions of risk, an organizational
structure for risk management, and specific risk control
procedures based on the Basic Risk Management
Regulations, which lay down the fundamental principles
that underlie our approach to risk management.
To ensure an appropriate balance between raisingearnings levels and financial sustainability, the Bank’s
risk management is based on the allocation of risk capital as an integral part of its integrated risk management
system.
The allocation of risk capital is a mechanism toensure the soundness of management by keeping risk
within a manageable range. Shizuoka Bank defines coreshareholder’s equity as capital for allocation and allocates it to all departments involved in businessexecution. Even if market risk, credit risk and other risks
were to materialize, the resulting losses would becontrolled within the bounds of shareholders’ equity.

Credit Risk Management System
The Credit Risk Management Group of the Risk
Management Department is responsible for overallmanagement of credit risk relating to the Shizuoka Bank
Group’s operations both in Japan and overseas in orderto maintain and enhance the soundness of the Group’s
loan asset portfolio. In the Bank’s internal rating system,
including its borrower credit rating system, which is thefoundation stone of its credit risk management, theCredit Risk Management Group of the Risk
Management Department is responsible for the designof the system and supervision of its operation; theCredit Planning Group of the Business Support Dept is
responsible for the day-to-day operation of the credit
rating system; and the Risk Management Group of the
Risk Management Department is responsible forverification of the appropriateness of the system. Mutual
checks and balances among these three units facilitate
greater precision and proper functioning of the Bank’s
internal ratings system.
The Credit Risk Management Group uses statisticalmethods to quantify latent credit risk in the Bank’s loan
portfolio. In this way, the Bank accurately assesses theamount of future risk, monitors the concentration ofloans to particular large borrowers or specific industries,
and thus controls the portfolio to avoid excessive credit
risk.
The Audit Department, which is organizationally independent of the Banking Division, the Business Support
Department, and the Risk Management Department,
audits the appropriateness and effectiveness of thedesign and operation of the credit risk management
system.

Market Risk Management System
In market transactions, the Shizuoka Bank Group limits
the amount of risk capital allocated and sets various
restrictions, such as on gains or losses from valuation of
investment securities, and on the amount of exposure
or loss depending upon the risk profile of each transaction or financial instrument. In this way, the Group keeps
market risk within certain defined levels.
For banking account transactions, centering on
deposits, loans, and investment securities, the Business
Strategy Planning and ALM Group of the Corporate
Planning Department formulates thehedging policies based on current risk conditions andon the outlook for interest rates so as to keep riskvolume within a certain range, and these policies aredeliberated at the Committee for Integrated Risk andBudget Management.

58

The organization of the market operations is strictly
separated into departments conducting transactions(front office: Treasury Department, etc.), administrativeand control departments (back office: Treasury &International Operations Center of the Operations
Planning Department), and an independent risk
management department (middle office: Risk
Management Group of the Risk Management
Department) for mutual checks and balances. Moreover,
the Audit Department, which is independent of thedepartments responsible for executing transactions,verifies the effectiveness of the mutual checks andbalances between these three departments.

Liquidity Risk Management System
The Shizuoka Bank Group has separate yen and foreign
currency-denominated financing management departments (Fund & Foreign Exchange Group of the Treasury
Department, Treasury & International Operations Centerof the Operations Planning Department, etc.), and aliquidity risk management department (RiskManagement Group of the Risk Management
Department) that is entirely independent of the financing
management departments. In this way, the Bank has
put in place a system that provides mutual checks andbalances. The Fund & Foreign Exchange Group of theTreasury Department, which is one of the financing
management departments, controls fundraising requirements within procurable levels to avoid excessive
fundraising. We conduct stable fund management activities, paying close attention to market conditions.
Moreover, the liquidity risk management department
monitors the status of financing management departments and assesses the stability of the assets-liabilities
structure.
To handle unforeseen circumstances, we proactively
prepared an emergency cash flow management system,
assuming four stages of emergency: “Stage 1 (preventive stage)”; “Stage 2 (attention required stage)”; “Stage
3 (liquidity concern stage)”; and “Stage 4 (insufficientliquidity stage)”. We predefined countermeasures andauthorized persons for each stage, thereby forming a
structure capable of swiftly responding to issues should
they arise.
With regard to market liquidity risk, the liquidity risk
management department routinely monitors the statusof highly liquid asset holdings that can be easily monetized. The front office addresses market liquidity risk byselecting investment assets based on their liquidity andsetting limits on specific stocks and holding periods.

Operational Risk Management System
Each risk category is managed by a dedicated unit of
the Bank, while the Operational Risk Management
Group of the Risk Management Department is responsible for overseeing and managing operational risk
throughout the Shizuoka Bank Group. In line with ourbasic policies on operational risk management, we are
59

taking steps to strengthen our operational risk management system through a range of measures including thecompilation and analysis of internal loss data and theimplementation of a risk control self-assessment. The
Audit Department, which is organizationally independent
from any of the units that it audits, verifies the effectiveness of the risk management system through on-site
inspection, etc.
Administrative Risk Management
The Shizuoka Bank Group has established theAdministrative Risk Management Rules that include theGroup’s basic policy for administrative risk management
and executes operations in accordance with the rules.
For administrative incidents that occur, we take preventive steps by according priority to measures for incidents
involving higher risk to reduce administrative risk. In
response to diversification of operations and increasingtransaction volumes, we are promoting the shifting of
the administrative function at our branches to a sharedservices center and the introduction of IT systems toenhance efficiency and thus avert operational risk.
System Risk Management
The Shizuoka Bank Group positions IT systems as apart of information assets. We have established the
Basic Policy for Information Asset Security Measures(Security Policy) that includes our basic policy for dealing with system risk. We are implementing various
security measures based on the Standards for
Information Asset Security Measures (Security
Standards) to ensure secure operation of the IT
systems.

Prompt and Appropriate Disclosure
To ensure prompt and appropriate provision of corporate information to the Bank’s stakeholders, the Bank
conducts comprehensive information disclosure inaccordance with the Banking Law and the Financial
Instruments and Exchange Act and the securities listing
regulations of the Japanese stock exchanges. The Bank
also conducts voluntary proactive disclosure by appropriately disclosing information in a consistent,transparent, and impartial manner.
The Information Disclosure Regulations, which set
out the policy, procedures, and systems, on information
disclosure (Information Disclosure Policy), have been
determined by the Board of Directors. In accordancewith the Information Disclosure Regulations, theCorporate Planning Department centrally manages various information generated by each group, and theinformation is disclosed after implementing the predetermined approval procedure according to the specified
authorization classification. To maintain prompt andappropriate disclosure, when necessary, the Corporate
Planning Department confers with the ComplianceDepartment and the auditing firm, while the Internal
Audit Division periodically verifies the appropriatenessand effectiveness of the systems and operational
administration concerning disclosure.

Region-based Relationship Banking
Basic Policy
Region-based relationship banking is a business model whereby financial institutions cultivate long-term relationships
with customers and offer financial services based on their grasp of customer needs obtained through the relationships.
The Shizuoka Bank Group’s basic policy on region-based relationship banking is to “achieve sustained growth intandem with the region by adhering to the Bank’s corporate philosophy, ‘expand dreams and affluence with ourcommunity.’” By putting this corporate philosophy into practice under the medium-term business plan and annual
plans, we are promoting region-based relationship banking and aim to achieve sustained growth by cultivating mutually beneficial relationships with our customers in the region through the provision of value-added services attuned totheir needs.
Basic
policyOffer solutions and necessary support based on anassessment of commercial viability

Ascertain the business life stage

Identify the anxieties and management issues faced by thecustomer

Recognize and analyze the present situation and challenges
faced by the regional economy and industry

Specific
initiatives

Achieve sustainable growth through coexistence with the community, by implementing the Bank’s
corporate philosophy, “expand dreams and affluence with our community.”

Start-upperiodGrowth period

Maturity/stability
periodSecond growth
periodDownturn andrehabilitation period(Decline period)

Start-up support
Loans emphasizing commercial viability, utilizing the Bank’s assessment capabilities

Business matching
Overseas expansion support
Provision of a wide choice of financing methods
Support for business rehabilitation, etc.
Business succession support
Business change
and closure support

Initiatives to revitalize the regional economy

Proactive initiatives towards “regional revitalization”
Region-producing Strategy

Clearly identify and promote these objectives under the business plan

Promotion

Information
dissemination

Shizuoka Bank

Develop human resources with specialized
financial methods and expertise

PartnershipGroupcompanies

Externalorganizations

Actively provide information to local communities and users

60

Solutions for Various Management Issues
The Shizuoka Bank will support vitalization of theregional economy and development of customers’ businesses over the medium to long term by offering highvalue-added solution services and financing attuned tothe development phase. When providing support, we
utilize an extensive network encompassing Group
companies and external partners to offer management
support and resolve management issues facing customers engaged in business operations.

Shizuoka Bank Group
Solutions capitalizingon the Shizuoka Bank
Group’s comprehensive
financial functions■ Support for businesssuccession■ Support for businessstartups and entry to
new business fields■ Support for innovation■ Support for businessdevelopment in growthfields■ Support for expanding
sales channels■ Support for overseas
business development■

Utilization of governmental
schemes and external partners■ Utilization of thegovernment’s growth
Incubation phase –strategy project for
Growth phase∙ Incubation support
Japanese companies∙ Stable and diverse fund
■ Attracting companies
procurement
to the region through∙ Efficient administration
collaboration withMaturephase–
Growth phase –governmental
2nd growth phase
Mature phaseorganizations in the∙ Expansion of sales∙ Business succession,
Prefecturechannels∙ Management■ Utilization of support∙ New business
improvement,
schemes operated bydevelopment
business rehabilitation∙ Overseas businessetc.
the public sector
development, etc.
■ Utilization of subsidy
systems■ Utilization of external
Resolve issues
partners’ expertise

Customers’ management issues

Achieve growth

Smooth Supply of Funds to Companies in the Region
The Bank works on activation of regional economy byassisting increase in business value of companies andsolo proprietors who support regional economy and bystably providing funds for business.
The Bank continues assisting increase in businessvalue by supporting growth of customers and providing

appropriate solutions to management issues, as well as
providing funds for business to even more customers
by promoting loans without overly depending on collateral or guarantee based on proper evaluation ofsustainability and prospects.

Meet needs of corporate customers
Support for Companies Amid the COVID-19 Crisis
Shizuoka Bank is working with customers that havebeen impacted by the spread of COVID-19 by providing
attentive support in response to their specific needs andchallenges, not limited to cash flow support. As the
COVID-19 crisis persists long term, we have built
systems to respond flexibly to customers’ increasingly
diverse needs, establishing specialized teams to provide
effective partnership-style support.

Cash flow support
In addition to providing a total of 19,976 COVID-19related loans amounting to 605.6 billion yen as of theend of March 2022, we provide priority support forcustomers’ cash flow through the flexible adjustment ofborrowing conditions.

Management Improvement Support in Anticipation of the Post-COVID-19 Era
Shizuoka Bank established a Business Management
Support Group in 2003. It is actively engaged insupporting customers’ management improvement, overand beyond cash flow support.
While the spread of COVID-19 had a significant
impact on many customers, we strengthened our
support system by gradually increasing the number ofstaff in charge in the Group by approximately 20%.
In FY2021, we supported 764 customers (excluding
sound borrowers) with business improvement support,
supported 681 customers with planning and monitoring,61

and improved the borrower risk category of 30 customers.
By considering the post-COVID-19 Era, we will
provide full support for our customers’ business continuity by focusing more than ever on providing
management improvement support in an accompanying
style with close relationship with our customers.

Business Succession and M&A
With the increasing age of business proprietors, smoothbusiness succession has become a social issue. In thiscontext, we make maximum use of the Shizuoka Bank
Group’s problem-solving abilities, including our consulting and funding functions, to support businesssuccession for our customers.
We not only understand proprietors’ intentions andthe direction of future business development, but also
matters outside the immediate scope of the businesssuch as the family structure and situation, working with
Shizugin Management Consulting, tax accountants andother external specialists to support our customers as
they carry out business succession within the samefamily or M&A.
Through the management of business succession
funds, we also support the capital policy of our customers, in ways such as aggregating shareholdings
dispersed within and outside families, and responding
to demand for the temporary holding of shares.

M&A consulting

Collaboration with Shizugin Management Consulting Co., Ltd.

100

■Number of M&A consulting
contracts signed

Number of M&A transactions
through M&A Consulting

91
83

80

62

60

60

53

47
40

28

64
38

31

20
0

FY17

FY18

FY19

FY20

FY21

* Regarding the “number of M&A transactions through M&A Consulting,” where separate
contracts are concluded with both the acquiring company and the company being acquired,these are counted as two contracts.

“Shizuginship” for Young Managers
Shizuginship is a membership service that the Bank launchedin April 2007. It provides a learning and networking opportunity
for young managers who will be the next generation of business leaders.
In addition to lectures, seminars and other events, Shizuginship members can access useful information through the dedicated website.

Business of Solution on Human Resources
Shizuoka Bank is engaged in the business of solution
on human resources, having obtained a license for feebased job placement services in July 2020.
We provide appropriate solutions to our customers’
management issues by offering various consultations on“human resources” such as recruitment, succession
planning, and human resource management.
In September 2021, we concluded a “Collaboration
Agreement” with Yamaha Motor regarding the exchangeof human resources with the aim of revitalizing theregional economy. We introduce regional companies
that seek immediate human resources with rich practical experience to Yamaha Motor and support thematching of human resources.
Shizuoka Bank Group will work together as a bridgefor human resources in the region, and by implementing
initiatives to mobilize human resources and create
employment opportunities, aim to revitalize the regional
economy and realize a sustainable regional society.

Advanced Technology / Business Matching TECH BEAT Shizuoka
In July 2019, jointly with the Shizuoka Prefectural
government, the Bank held a large-scale trade show
TECH BEAT Shizuoka, with the aim of promoting collaboration between companies in Shizuoka Prefecture andstart-up companies in the Tokyo Metropolitan area, andlinking this collaboration to the vitalization of industries
in the prefecture and the creation of new industries.
In addition to “TECH BEAT Shizuoka” targeting allindustries, “TECH BEAT Shizuoka for Blue and Green
Economy” was held in August 2021 in conjunction with
Shizuoka Prefecture’s Open Innovation Initiative, which
promotes industry-academia-government-financecollaboration.
A series of 7 events have been held so far, attracting
a total of 31,000 participants and 1,158 business negotiations.

Established a Project Team to Support Industrial Transformation
In order to contribute to the sustainable growth ofindustries that support the regional economy, Shizuoka
Bank Group has established the “Industrial
Transformation Support Project Team” to provide

support to client companies in resolving issues such as
digitalization and decarbonization with an eye toward
the transformation of the regional industrial structure.
62

Support for Overseas Business Development
Support for Overseas Business Development
We have established a support system to provide a wide range of consultation services to customers who are
considering expanding overseas or already doing business overseas, both domestically and internationally.
We utilize the overseas network of the Shizuoka Bank Group to capture growth opportunities in global markets andstrengthen the dissemination of information to customers.
Support Systems within Japan
Staff responsible for forex solutions, featuring bankpersonnel with overseas service experience, arestationed in the Bank’s International Department, whichis engaged in the planning and supervision of support
for overseas business development.
Staff responsible for forex solutions cooperate withdomestic branches to respond to diverse customer
needs, for example providing information on the overseas investment environment, support for expanding
sales channels, and financing for overseas businesses.
In addition, they provide information on a broad range
of issues, not limited to finance, for customers entering
overseas markets for the first time, including lifestyle,accommodation and education for Japanese staff
stationed overseas.

Support Systems Overseas
To support customers in the development of their overseas business, the Shizuoka Bank Group has six
overseas offices: two in the U.S. (New York and Silicon
Valley), one in Europe (Brussels), and three in Asia (HongKong, Singapore, and Shanghai).
In Asia where robust economic growth is continuing,in addition to the Bank’s own offices, we have established a network covering the region through businessalliances with local financial institutions, providing
hands-on support from overseas expansion to local
business development.
Many of our customers are developing their businesses in Thailand, Vietnam, and Indonesia. The Bank
has dispatched its staff to these countries to provide
customers proactive support in local business expansion.

Support Menu for Overseas Business Development•Consultation on overseas business development
The Bank provides the latest information and fine-tuned services to meet diverse customer needs, including overseas business development, transactions with foreign companies, and foreign investment.
•Support for export and import transactions
Capitalizing on its experience and overseas network, the Bank facilitates customers’ transactions.
•Financing services
The Bank provides advice on a range of financing schemes for customers’ local subsidiaries overseas, including
cross-border loans from domestic branches, and stand-by letters of credit to facilitate loans in local currency fromour partner financial institutions.
•Guidance on foreign exchange, including overseas remittance and forex risk hedging

TopicsEstablished “Singapore Branch” and “Silicon Valley Representative Office”

Aiming to strengthen our overseas support system, including support for our customers’
overseas expansion, we have established “Singapore Branch” and “Silicon Valley
Representative Office”.
Shizuoka Bank Group is committed to supporting a wide range of overseas businesses,
including the overseas expansion and local business development of regional customers.
Our network bases in Asia, with base in Singapore (since 1992) in ASEAN region and withbases in Hong Kong (since 1985) and Shanghai (since 1995) in East Asia, has been
supporting companies entering those regions.
Singapore Branch
The Singapore Branch has been promoted from a representative office to a branch in order
to cover the ASEAN region more extensively than before and to strengthen the system that enables more flexible activities.
Our network of offices in the North America, with bases in Los Angeles (since 1982) and New York (since 1987), has been
supporting companies that are entering the region.
With the establishment of the Silicon Valley Representative Office, the deposit and loan business of the Los Angeles Branch has
been terminated, and the New York Branch, the successor branch, has served customers’ needs in all of the U.S. and othercountries in North and Central America.
63

Shizuoka Bank Group’s Overseas Network (6 Overseas Offices, 16 Partner Financial Institutions)
As of July 1, 2022

Shizuoka Bank(Europe) S.A.

Silicon Valley
Representative New York Branch
OfficeMexico (Mexico City)
Business alliance:
BBVA Bancomer S.A.

France (Montrouge)
Business alliance:
Crédit Agricole S.A.

Network in Asia
China (Beijing, Shanghai)Business alliance:
China Construction Bank
Bank of Shanghai

Shanghai Representative Office
1 employees (total of 2 staff)

South Korea(Seoul, Daegu)
Business alliance:
Shinhan Bank
Daegu BankInternational Business Dept. (Shizuoka)
Planning and supervision of support
for overseas business development
Overseas Business Support
Office: 4 staff
Support for overseas businessdevelopment and advice on trade
Forex Solutions: 4 staff

Thailand (Bangkok)
2 dispatched employees

Taiwan (Taipei)

Business alliance:
Kasikorn Bank (2 employees)

Business alliance:
Chinatrust Financial Holding

Bangkok Bank

Hong Kong BranchSupervision of the Bank’s bases in Asia
7 employees (total of 14 staff)

Vietnam (Hanoi)

India (Mumbai)
Business alliance:
State Bank of India

1 dispatched employee
Business alliance:
Joint Stock Commercial Bank for Investment andDevelopment of Vietnam (BIDV) (1 employee)
ANZ Vietnam

Philippines (Manila, Makati)
Business alliance: Bank of the Philippine Islands
BDO Unibank

Singapore Branch
7 employees (total of 13 staff)

Indonesia (Jakarta)
1 dispatched employee

Business alliance: P.T. Bank CIMB Niaga Tbk (1 employee)
P.T. Bank Resona Perdania

64Strategic Investment
To create new added value, we have been actively working with companies from different industries
since our capital and business alliance with Monex Group in 2014.
In order to achieve sustainable growth together with the region, we aim to build an ecosystem thatcreates new businesses by building a network with startup companies that possess advanced technology
and by returning advanced technology to the region.
Cross-industry Collaboration
Aiming for sustainable growth starting with the creation of a new business model, Shizuoka Bank Group is working with companies fromother industries, including Monex Group, Money Forward, Hoken no Madoguchi, and Aruhi.
In October 2021, we concluded a basic agreement for collaboration with iYell, a housing loan tech start-up, and as the first step of thecollaboration, "Tatepita Shizuoka," a website matching customers who are considering purchasing homes with housing companies, went
into full-scale operation in June 2022.
We will continue to actively promote cross-industry collaboration as an initiative to create new added value that is not an extension of
the traditional banking business.

Efforts in cross-industry collaboration so far
12th Medium-term Business Plan(FY2014-) 13th Medium-term Business Plan(FY2017-) 14th Medium-term Business Plan(FY2020-)
The most importantpartner in bank-security
collaboration

Workers on loan ( total 2 )Shizugin Wrap
Workers on loan ( total 3 )Application Development

Provision of
new financial services

Joint development of
housing loan platform

Opening of partner stores

Fund Sales

New businessesin
housing loan market

Affiliated Housing Loan

Guaranty Business by
Shizugin Credit Guaranty Co., Ltd.
Purchase securitized products

Utilization ofdigital technology

Guaranteed Business by
Shizugin Credit Guaranty Co., Ltd.
Purchase securitized products
AI-based real estate income/expense simulation
Utilization of Community Platforms

Workers on loan ( total 3 )Utilization of AI

Revitalization of region

Planning and examination of projects
and services that contribute to therevitalization of the tourism business

Build Ecosystem for Regional Innovation
In order to achieve sustainable growth with the region, it is necessary not only to protect local industries, but also to work to create new
businesses.
To this end, Shizuoka Bank Group is building a network with start-up firms by investing in venture capital funds and dispatching
employees, with the aim of creating an ecosystem that returns advanced technology to the region and creates new businesses.
Cooperation, Build network
Invest,dispatch personnel

Start-up
firms
Invest,support growth

Venture capital funds
Management

Introduce
advanced technology
to the community

Return of investment
Build
network

Domestic andforeign professionals
Community

65

Networking with Start-up Firms
To date, we have invested in 398 start-up firms through a cumulative total of 19.7
billion yen in 15 funds.
We utilize this network of start-up firms to develop new businesses, and throughactivities such as "TECH BEAT Shizuoka," we are working to connect local
communities with start-up firms.
In July 2019, as part of a collaboration with a venture capital fund, we established
Turn The Tide Corporation, which provides consulting services in fields notpreviously handled by Shizuoka Bank Group, and made it a wholly owned subsidiaryin March 2022.

Turn The Tide Inc.
An intra-company start-up firm established byinvestment from the venture capital fund Global
Catalyst Partners Japan and workers on loan
from Shizuoka Bank Group with the aim of
speedily establishing new businesses.
Working business of solving corporate andcommunity issues with a different approach thanfinance, centered on services related to thesoundness of corporate financial statements.

Business for Start-up Firms“Start-up Supporting Project Team” was newly established in June 2021 to strengthen businesses for start-up firms, and has started
venture debt in October 2021.
We are working on a variety of projects, including loans to deep-tech start-ups under the METI’s debt guarantee program, the only
regional bank to be designated as such, and loans with stock acquisition rights.
In the future, we intend to support the revitalization of local economies by developing networks with start-up companies that will leadthe next generation, as well as with local communities and customers, to create new collaborations and innovations, and to develop
businesses for start-up firms as one of the new growth drivers for the Group.

Utilize the Debt Guarantee Program Implemented by METIIn September 2021, Shizuoka Bank was designated as a financial institution under the "Debt Guarantee Program for Privatesector Loans to Deep-tech Start-ups (Large-scale R&D)," established by the METI to promote the creation of new industries andthe establishment and growth of venture companies.
In March 2022, we utilized this program to provide a syndicated loan with Yamanashi Chuo Bank to WHILL Corporation,
which is engaged in the development of short-distance mobility.

SME
Support,JAPAN

application

DesignatedFinancial
Institutions
debt guarantee

designation

loan
Apply for aplan

MinisterofEconomy,TradeandIndustry

Deep-tech Start-ups
Approve theplan

TOPICS

Requirements for Plan Approval
Details of Debt Guarantee
Amount of loan / 300 million yen or morein principle
Term of loan / More than 3 years in principle
Debt guarantee ratio / 50%
Term of guarantee / 10 years forequipment finance, 5 years for others inprinciple (Based on SME Support,
JAPAN's guarantee review)

Initiatives at the Silicon Valley
Representative Office

In November 2021, we became the first regional bank in Japan to open a
representative office in Silicon Valley to gather information on advanced
technologies and initiatives in the region.
In addition, through information exchange and networking with venture
capital funds and other organizations, we intend to contribute to therevitalization of local industry and economic growth by collaborating withadvanced companies with promising future prospects and growth potential
and introducing advanced technology to local companies.

66

67

68

69

70

71

Consolidated Balance Sheet
THE SHIZUOKA BANK, LTD. and Consolidated Subsidiaries

March 31, 2022

Assets:Cash and due from banks (Notes 14 and 32)
Call loans and bills bought (Note 32)
Monetary claims bought
Trading assets (Notes 6 and 32)
Money held in trust (Note 7)
Securities (Notes 8, 14, and 32)
Loans and bills discounted (Notes 9, 14, 15, and 32)
Foreign exchanges (Note 10)
Lease receivables and investment assets (Note 30)
Other assets (Notes 11 and 14)
Tangible fixed assets (Note 12)
Intangible fixed assets (Note 12)
Asset for retirement benefits (Note 20)
Deferred tax assets (Note 29)
Customers’ liabilities for acceptances and guarantees (Note 13)
Allowance for loan losses (Note 32)
Allowance for investment losses
Total Assets
Liabilities and Equity:
Liabilities:
Deposits (Notes 14, 16, and 32)
Call money and bills sold (Note 32)
Payables under repurchase agreements (Notes 14 and 32)
Payables under securities lending transactions (Note 32)
Trading liabilities (Note 6)
Borrowed money (Notes 14, 17, and 32)
Foreign exchanges (Note 10)
Bonds payable (Note 18)
Bonds with stock acquisition rights (Note 18)
Borrowed money from trust account
Other liabilities (Note 19)
Liability for retirement benefits (Note 20)
Provision for directors’ retirement benefits
Provision for losses from reimbursement of inactive accounts
Provision for contingent losses
Provision for point program
Reserves under special laws
Deferred tax liabilities (Note 29)
Acceptances and guarantees (Note 13)
Total Liabilities

Millions of Yen
2022
2021

Thousands of
U.S. Dollars (Note 2)2022¥2,275,851 ¥ 2,097,487
71,382150,926
38,352
31,524
14,756
18,464
104,800
104,100
2,337,933
1,954,159
9,502,197
9,303,121
11,176
14,474
82,847
83,747333,157
192,273
54,79057,611
46,57450,051
14,30913,057
3,283
3,159
80,24155,644(53,382)(53,901)(44)(54)¥14,918,227 ¥14,075,848$ 18,595,073
583,236
313,360
120,570
856,279
19,102,322
77,638,677
91,321
676,9102,722,101
447,674
380,545
116,915
26,824
655,617(436,168)(362)$121,890,901¥11,557,215 ¥11,145,906
177,528
102,210$ 94,429,408
1,450,513
2,424,740

296,764
72,701

3,329
1,364,889
2,402
37,11836,717
198
130,214
3,768
383
845
1,255
417
11
63,97680,241
13,829,979

357,952

143,311
3,016
890,515609
33,78333,213
214
119,631
3,423
357
786
1,369
460
11
78,05255,644
12,970,470

Equity: (Notes 21, 22, 23, and 37)
Capital stock,authorized, 2,414,596 thousand shares;
90,84590,845
issued, 595,129 thousand shares in 2022 and 595,129 thousand sharesin 2021
Capital surplus
54,88454,884318
330
Subscription rights to shares
769,036
743,157
Retained earnings
Treasury stock-at cost,(29,030)(20,371)
30,980 thousand shares in 2022 and 21,086 thousand shares in 2021
200,804
235,111
Accumulated other comprehensive income:
193,717
231,196
Valuation difference on available-for-sale securities
223(98)
Deferred gains or losses on hedges
4,226
1,212
Foreign currency translation adjustments
Defined retirement benefit plans
2,637
2,800
1,086,858
1,103,958
Total
1,388
1,419
Noncontrolling Interests
Total Equity
1,088,247
1,105,378¥14,918,227 ¥14,075,848
Total Liabilities and Equity

594,016

27,204
11,151,973
19,629303,278
300,000
1,619
1,063,932
30,792
3,132
6,904
10,2593,414
95
522,730
655,617112,999,264

742,264
448,435
2,599
6,283,489(237,195)
1,640,694
1,582,784
1,827
34,531
21,5508,880,288
11,3488,891,636$121,890,901

See notes to consolidated financial statements.
72

Consolidated Statement of Income
THE SHIZUOKA BANK, LTD. and Consolidated Subsidiaries

Year ended March 31, 2022

Millions of Yen
2022
2021

Income:Interest Income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Subtotal
Fees and Commissions
Trading Income
Other Operating Income (Note 23)
Other Income (Note 24)
Total Income
Expenses:
Interest Expense:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expense
Subtotal
Fees and Commission Payments
Other Operating Expenses (Note 25)
General and Administrative Expenses (Note 26)
Other Expenses (Note 27)
Total Expenses
Income before income taxes
Income Taxes: (Note 28)
Current
Deferred
Total income taxes

Net Income
Net Income Attributable to Noncontrolling Interests
Net Income Attributable to Owners of the Parent¥98,033
27,532
2,621
128,187
72,855
3,451
23,153
20,031
247,679¥99,171
21,8601,247
122,279
71,955
3,553
12,504
21,396
231,689$800,989
224,959
21,421
1,047,369
595,271
28,203
189,177
163,671
2,023,692

2,207
158
3,597
5,963
41,59428,65997,62915,031
188,878
58,801

3,409
932
4,754
9,096
39,746
5,463
93,71522,974
170,997
60,691

18,032
1,298
29,393
48,724
339,852
234,163797,690
122,817
1,543,248
480,444

15,7301,347
17,07841,72287¥41,635

21,209(4,240)16,96943,72283¥43,638

128,529
11,013
139,543
340,901712$340,188

Yen

Per Share: (Note 35)
Basic net income
Diluted net income
Cash dividends applicable to the year

Thousands of
U.S. Dollars (Note 2)
2022¥73.27
70.54
26.00

U.S. Dollars (Note 2)¥76.02
73.31
25.00

$0.59
0.57
0.21

See notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income
THE SHIZUOKA BANK, LTD. and Consolidated Subsidiaries

Year ended March 31, 2022

Millions of Yen
2022
2021

Net Income
Other Comprehensive Income (Loss): (Note 34)
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive income in associates
Total other comprehensive income (loss)
Comprehensive Income (Loss)
Total Comprehensive Income (Loss) Attributable To:
Owners of the parent
Noncontrolling Interests
See notes to consolidated financial statements.

73

Thousands of
U.S. Dollars (Note 2)2022¥41,722¥43,722$340,901(37,433)
330
2,548
(163)
295
(34,422)

76,975
(501)
2,064
2,678
196
81,414(305,853)
2,699
20,819(1,334)2,418(281,250)

7,300

125,136

59,650¥7,328(28)¥124,960
176$59,879(229)

Consolidated Statement of Changes in Equity
THE SHIZUOKA BANK, LTD. and Consolidated Subsidiaries

Year ended March 31, 2022

Thousands

Millions of Yen
Accumulated Other
Comprehensive Income
Valuation
DefinedDifference Deferred Foreign
on Available Gains or Currency Retirement
Treasury -for-Sale Losses on Translation Benefit
Stock
Securities Hedges Adjustments Plans

Number of
Shares ofCommon Stock
Outstanding

CapitalStock

CapitalSurplus

Balance, April 1, 2020
Cash dividends, ¥22.00 per share
Net income attributable to owners of the parent
Purchase of treasury stock(1 thousand shares)
Disposal of treasury stock(141 thousand shares)
Retirement of treasury stock(10,000 thousand shares)
Net changes other thanshareholders’ equity

605,129¥90,845¥54,884

76,833

(506)

2,316

2,678

Balance, March 31, 2021

595,129¥90,845¥54,884¥330¥743,157¥(20,371) ¥231,196¥(98)¥1,212¥2,800 ¥1,103,958¥1,419 ¥1,105,378

Balance, April 1, 2021
Cumulative effects of changes in accounting policies
Balance, April 1, 2021 (as restated)
Cash dividends, ¥26.50 per share
Net income attributable to owners of the parent
Purchase of treasury stock(10,000 thousand shares)
Disposal of treasury stock(106 thousand shares)
Net changes other thanshareholders’ equity
Balance, March 31, 2022

595,129¥90,845¥54,884

¥330

¥(98)

¥1,212595,129

90,84554,884330¥743,157 ¥(20,371) ¥231,196(662)
742,495 (20,371) 231,196(15,088)
41,635(8,759)

(98)

1,212

¥2,800 ¥1,103,958(662)
2,800 1,103,296(15,088)
41,635(8,759)¥1,419 ¥1,105,378(662)
1,419 1,104,715(15,088)
41,635(8,759)9494(163) (34,319)¥2,637 ¥1,086,858(30) (34,350)¥1,388 ¥1,088,247

Subscription
Rights to Retained
Shares Earnings¥361¥721,793 ¥(30,125) ¥154,363(12,627)
43,638
(0)
(27)

136

(9,619)

9,619

¥407

¥(1,103)

¥121

Total

¥991,549(12,627)
43,638(0)Noncontrolling
Interests

Total
Equity¥1,245¥992,794(12,627)
43,638
(0)

108

108

(10,000)(30)(6)

595,129¥90,845¥54,884

(12)
¥318

100

(37,479)¥(29,030) ¥193,717¥769,036

81,291

322
¥223

3,013
¥4,226

173

81,464

Thousands of U.S. Dollars (Note 2)
Accumulated Other
Comprehensive Income

CapitalStock

Balance, April 1, 2021
Cumulative effects of changes in accounting policies
Balance ,April 1 ,2021 (as restated)
Change during the period
Cash dividends, $0.21 per share
Net income attributable to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Net changes other thanshareholders’ equity
Balance, March 31, 2022

CapitalSurplus

Subscription
Rights to Retained
Shares Earnings$742,264 $448,435$2,703742,264

2,703

448,435

Valuation
DefinedDifference Deferred Foreign
on Available Gains or Currency Retirement
Treasury -for-Sale Losses on Translation Benefit
Stock
Securities Hedges Adjustments Plans$6,072,046 $(166,446) $1,889,016(5,410)6,066,635 (166,446) 1,889,016$(807)$9,909

(807)

9,909

(123,281)
340,188(52)$742,264 $448,435

2,635$1,827

24,622$34,531

Noncontrolling
Interests

Total
Equity$22,884 $9,020,007 $11,598 $9,031,605(5,410)(5,410)22,884 9,014,596 11,598 9,026,194(123,281)
340,188(71,572)771(71,572)823(104)(306,231)$2,599 $6,283,489 $(237,195) $1,582,784

Total(123,281)
340,188(71,572)771(1,334) (280,412)(249) (280,662)$21,550 $8,880,288 $11,348 $8,891,636

See notes to consolidated financial statements.

74

Consolidated Statement of Cash FlowsTHE SHIZUOKA BANK, LTD. and Consolidated Subsidiaries

Year ended March 31, 2022

Millions of Yen
2022
2021
I. Operating Activities:
Income before income taxes
Adjustments for:
Income taxes paid
Depreciation and amortization
Impairment losses
Loss (gain) on change in equity
Equity in (earnings) losses of affiliated companies
Increase (decrease) in allowance for loan losses
Increase (decrease) in allowance for investment losses
Increase (decrease) in asset and liability for retirement benefits
Increase (decrease) in provision for directors’ retirement benefits
Increase (decrease) in provision for reimbursement of inactive accounts
Increase (decrease) in provision for contingent losses
Increase (decrease) in provision for point program
Interest income
Interest expense
Losses (gains) on securities
Losses (gains) on money held in trust
Losses (gains) on sale of fixed assets
Net decrease (increase) in trading assets
Net increase (decrease) in trading liabilities
Net decrease (increase) in loans and bills discounted
Net increase (decrease) in deposits
Net increase (decrease) in borrowed money
Net decrease (increase) in due from banks (excluding deposits paid to Bank of Japan)
Net decrease (increase) in call loans
Net decrease (increase) in monetary claims bought
Net increase (decrease) in call money
Net increase (decrease) in payables under repurchase agreements
Net increase (decrease) in payables under securities lending transactions
Net decrease (increase) in foreign exchanges (assets)
Net increase (decrease) in foreign exchanges (liabilities)
Net decrease (increase) in lease receivables and investment assets
Increase (decrease) in straight bonds-issuance and redemption
Net increase (decrease) in borrowed money from trust accountInterest and dividends received
Interest paid
Other-net
Total Adjustments
Net Cash Provided by (Used in) Operating Activities
II. Investing Activities:
Purchases of securities
Proceeds from sales of securities
Proceeds from redemptions of securities
Increase in money held in trust
Purchases of tangible fixed assets
Purchases of intangible fixed assets
Proceeds from sales of tangible fixed assets
Increase in investments in affiliated companies
Proceeds from sales of shares of affiliated companies accounted for by the equity method
Net Cash Provided by (Used in) Investing Activities
III. Financing Activities:
Dividends paid
Dividends paid to noncontrolling interests
Purchases of treasury stock
Proceeds from sales of treasury stock
Net Cash Provided by (Used in) Financing Activities
IV. Foreign Currency Translation Adjustments on Cash and Cash Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents
VI. Cash and Cash Equivalents, Beginning of Year
VII. Cash and Cash Equivalents, End of Year¥58,801¥60,691(24,863)
19,460(16,342)
13,411
2,853

634

(549)
(1,953)
(518)
(10)
(907)
25
59
(113)
(42)
(128,187)
5,963
581
(74)
827
3,678
314
(139,929)
338,159
470,51955,012
84,917(6,827)67,228(98,604)(85,729)
3,387
1,792
449
(306)
(16)
127,454(6,013)(13,518)
672,298
731,100(3,517)8,814(1)(21,265)
(43)
(439)
(78)
39
(122,279)
9,096(13,460)(51)453(4,034)(1,096)(351,362)
1,025,853
216,443
49,537
19,362
4,296(37,280)
18,356
143,311(2,534)(13)(1,966)(844)(15)
123,636(11,753)
2,526
1,049,611
1,110,303

Thousands of
U.S. Dollars (Note 2)2022$480,444(203,149)
159,001

5,185(4,489)(15,958)(4,238)(85)(7,412)

209

482
(927)
(345)
(1,047,369)
48,724
4,752
(611)
6,759
30,0562,566(1,143,306)
2,762,965
3,844,429
449,483
693,824(55,786)
549,296(805,660)(700,458)
27,678
14,645
3,671(2,507)(133)
1,041,381(49,135)(110,452)
5,493,085
5,973,529(2,890,158)
2,207,985
194,399(700)(4,518)(9,522)677(1,200)(1,269,099)
879,374
163,428(100,100)(4,197)(12,655)850(494,773)(340,197)(23,614,335)
18,040,572
1,588,364(5,719)(36,920)(77,805)
5,533(9,805)67,520(4,042,594)(15,062)(2)(8,759)0(23,825)2
212,504
1,917,339¥2,129,843(12,605)(2)(0)
0(12,608)1
757,498
1,159,840¥1,917,339(123,072)(20)(71,572)
0(194,664)
20
1,736,290
15,665,815$17,402,105

8,263

2,200

See notes to consolidated financial statements.
Cash and due from banks in the consolidated balance sheets at March 31, 2022 and 2021, are reconciled with cash and cash equivalents in the
consolidated statements of cash flows as follows:
Thousands ofMillions of Yen
U.S. Dollars (Note 2)
Cash and due from banks
Due from banks other than the Bank of Japan
Cash and cash equivalents, end of year

75

2022

2021

2022

¥2,275,851(146,007)¥2,129,843¥2,097,487(180,148)¥1,917,339$18,595,073(1,192,968)$17,402,105

Notes to Consolidated Financial Statements
THE SHIZUOKA BANK, LTD. and Consolidated Subsidiaries

Year ended March 31, 2022

1. BASIS OF PRESENTATION

The accompanying consolidated financial statements have been
prepared from the accounts maintained by The Shizuoka Bank, Ltd.
(the “Bank”) and its subsidiaries (the “Group”) in accordance with theprovisions set forth in the Companies Act of Japan (the “CompaniesAct”), the Japanese Financial Instruments and Exchange Act, theBanking Act of Japan, and the Accounting Guideline for Banks inJapan stated by the Japanese Bankers’ Association, and in accordance with accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects as to theapplication and disclosure requirements of International Financial
Reporting Standards (IFRS).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated
financial statements issued domestically in order to present them ina form that is more familiar to readers outside Japan.

2. JAPANESE YEN AND U.S. DOLLAR AMOUNTS

As permitted by the Japanese Financial Instruments and ExchangeAct, Japanese yen amounts less than one million and U.S. dollars
amounts less than one thousand have been omitted. As a result, thetotals shown in the accompanying consolidated financial statements
and the notes (both in yen and U.S. dollars) thereto do not necessarily
agree with the sum of the individual account balances.
The consolidated financial statements are stated in Japanese yen,
the currency of the country in which the Bank is incorporated andoperates. The translations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience of readers outside
Japan and have been made at the rate of ¥122.39 to $1, the approximate rate of exchange at March 31, 2022. Such translation should
not be construed as a representation that Japanese yen amounts
could be converted into U.S. dollars at that or any other rate.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESConsolidation:
The accompanying consolidated financial statements as of March 31,
2022, include the accounts of the Bank, its 13 significant subsidiaries,
and three companies accounted for by the equity method.
Under the control and influence concepts, those companies in which
the Bank, directly or indirectly, is able to exercise control over operations are fully consolidated, and those companies over which theGroup has the ability to exercise significant influence are accounted
for by the equity method.
For investments in the remaining unconsolidated subsidiaries andassociated companies, if the equity method of accounting had been
applied, the effect on the accompanying consolidated financial statements would not be material.
The difference between the cost of an acquisition and the fair valueof net assets of the acquired subsidiary at the date of acquisition ischarged to income when incurred.
All significant intercompany accounts and transactions have been
eliminated in consolidation. All material unrealized profits resulting
from intercompany transactions are eliminated.

Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements:
The accounting policies and procedures applied to a parent company
and its subsidiaries for similar transactions and events under similar
circumstances should, in principle, be unified for the preparation of theconsolidated financial statements. However, financial statements prepared by foreign subsidiaries in accordance with either IFRS orgenerally accepted accounting principles in the United States ofAmerica tentatively may be used for the consolidation process, except
for the following items that should be adjusted in the consolidation
process so that net income is accounted for in accordance withJapanese GAAP, unless they are not material: (a) amortization of
goodwill; (b) scheduled amortization of actuarial gain or loss of pensions
that has been recorded in equity through other comprehensive
income; (c) expensing capitalized development costs of R&D; and (d)cancellation of the fair value model of accounting for property, plantand equipment and investment properties and incorporation of thecost model of accounting; and (e) recording a gain or loss through profit
or loss on the sale of an investment in an equity instrument for the difference between the acquisition cost and selling price, and recording
impairment loss through profit or loss for other-than-temporary declines
in the fair value of an investment in an equity instrument, where a foreignsubsidiary elects to present in other comprehensive income subsequentchanges in the fair value of an investment in an equity instrument.
Trading-purpose transactions:“Transactions for trading purposes” (the purpose of seeking tocapture gains arising from short-term fluctuations in interest rates,
currency exchange rates or market prices of securities, and othermarket-related indices or from gaps among markets) are included
in “Trading assets” and “Trading liabilities” on a trade-date basis.

Trading securities and monetary claims purchased for trading
purposes recorded in these accounts are stated at market value, andtrading-related financial derivatives are stated at the amounts thatwould be settled if they were terminated at the end of the fiscal year.
Profits and losses on transactions for trading purposes are shown
as “Trading income (expense)” on a trade-date basis.
Securities:
Held-to-maturity debt securities, which are expected to beheld-to-maturity with the positive intent and ability to hold to maturity,
are stated at amortized cost computed using the straight-line method.
Available-for-sale securities, which are not classified as either trading
account securities or held-to-maturity debt securities, are stated atfair value, with unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity.
Available-for-sale securities whose fair value cannot be reliably determined are stated at cost, determined by the moving-average method.
For other-than-temporary declines in fair value, investment securities
are reduced to net realizable value by a charge to income.
Tangible fixed assets:
Tangible fixed assets are stated at cost, less accumulated depreciation. Depreciation of tangible fixed assets owned by the Bank iscomputed mainly using the declining-balance method over the estimated useful lives, while the straight-line method is applied tostructures acquired on or after April 1, 2016.
The range of useful lives is principally from three to 50 years forbuildings and from two to 20 years for equipment.
Depreciation of tangible fixed assets owned by consolidated subsidiaries is principally computed using the declining-balance method overthe estimated useful lives of the assets.
Lease assets under lease transactions, in which ownership of thelease property is not deemed to be transferred to the lessee, aredepreciated by the straight-line method over the lease term.
The residual value is zero or the guaranteed value if specified in thelease contracts.
Impairment loss:
The Group reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate the carrying amount ofan asset or asset group may not be recoverable. An impairment loss
is recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected toresult from the continued use and eventual disposition of the asset or
asset group. The impairment loss would be measured as the amountby which the carrying amount of the asset exceeds its recoverable
amount, which is the higher of the discounted cash flows from thecontinued use and eventual disposition of the asset or the net selling
price at disposition.
Software:
The Bank and its consolidated subsidiaries in Japan amortize internaluse software development costs using the straight-line method overthe useful life (five years).
Allowance for loan losses:
The amount of the allowance for loan losses is determined based on
management’s judgment and assessment system. This system
reflects the past experience of credit losses; possible future credit
losses; business experience of credit losses; possible future credit
losses; business and economic conditions; the character, quality, andperformance of the portfolio; and other pertinent indicators.
The Group implemented a self-assessment system to monitor thequality of its assets. The quality of all loans is assessed by branches
and the Credit Supervision Department, in accordance with a subsequent audit by the Credit Examination Department, in accordance with
the Group’s policy and rules for self-assessment of asset quality.
The Group has established a credit rating system under which its
borrowers are classified into five categories. The credit rating system isused for self-assessment of asset quality. All borrowers are classified
into five categories for self-assessment purposes – “normal,” “caution,”“possible bankruptcy,” “virtual bankruptcy,” and “legal bankruptcy.”
Legal bankruptcy:
Borrowers who are legally or formally bankrupt, such as bankruptcy or
special liquidation.
Virtual bankruptcy:
Borrowers virtually in the same situation as legal bankruptcy.
Possible bankruptcy:
Borrowers who are not currently bankrupt, but are likely to fall into
bankruptcy in the future.
Caution:Borrowers who have problems with lending conditions or reimburse
performance, have sluggish or unstable business conditions.

76

Management required:
Borrowers in “caution” whose loans require management (being withrestricted loans and loans overdue for more than three months).
Normal:Borrowers who are recognized as having good business conditions
and no particular financial problems.
(a) For loans to borrowers classified as legal bankruptcy or virtual
bankruptcy, the Group fully provides the net amount of loans andestimated collectible amounts by collateral or guarantees.
Regarding loans to borrowers classified as possible bankruptcy, aspecific reserve is provided to the necessary extent for the net
amount of loans and estimated collectible amounts by collateral or
guarantees.
(b) For the borrower with certain loan amounts classified as possible
bankruptcy or being with restructured loans, if cash flows fromcollection of principals and interests can be reasonably estimated,
the Group provides the difference between the present value ofthese cash flows discounted at the initial contractual rates and thebook values of loans (the “DCF” method). For other loans, a generalallowance is provided based on anticipation of the expected loss
for the average remaining life of loans, etc. The loss ratio over acertain period in the past, and the expected loss amount is calculated by adjusting the loss ratio considering future projections.
(c) For the borrower with certain loan amounts classified as caution or
management required, the Group provides the difference between
the present value of these cash flows discounted at the initial
contractual rates and the book values of loans (the “DCF” method)
if cash flows from collection of principals and interests can bereasonably estimated.
(d) For loans to borrowers classified as normal, caution and management required, a general allowance is provided based on
anticipation of the expected loss for the average remaining life ofloans, etc. The loss ratio is calculated based on the average valueof the actual loan loss ratio over a certain period in the past, andthe expected loss amount is calculated by adjusting the loss ratio
considering future projections.
Grouping in calculating loss ratio
In calculating loss ratio, borrowers are divided into consumer loanborrowers and business-lending borrowers. Business-lending borrowers are classified into two categories of normal (upper normal andlower normal), three categories of caution (upper caution, lower
caution, and management required), and one category of legal bankruptcy, for a total of seven categories.
A certain period of time in which the expected loss amount is
expected in the future
Allowance for loan losses is recorded based on anticipation of the
expected loss ratio for the period corresponding to the averageremaining period of receivables (the average remaining period is sevenyears for consumer loan borrowers, among business loan borrowersof (d) above, about three to five years for “normal,” about three years
for “caution,” and about four years for “management required” and“possible bankruptcy” of (b) above).
Revision of expected loss ratio due to future prospects, etc.
In the current consolidated fiscal year, the expected loss ratio has
been revised for “management required,” but the impact on allowance
for loan losses is minor.

Provision for contingent losses:
The provision for contingent losses is provided for the estimatedfuture payments to credit guarantee corporations due to the implementation of a loss-sharing system.
Provision for point program:
The provision for the point program is provided for the reasonably
estimated future usage of points given to credit card customers.
Reserves under special laws:
Reserves under special laws are reserves for financial producttransaction liabilities in accordance with Section 1, Article 46-5 of theJapanese Financial Instruments and Exchange Act.
Asset retirement obligations:
An asset retirement obligation is recorded for a legal obligation
imposed either by law or contract that results from the acquisition,
construction, development, and normal operation of a tangible fixed
asset and is associated with the retirement of such tangible fixed
asset. The asset retirement obligation is recognized as the sum of the
discounted cash flows required for the future asset retirement and isrecorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset
retirement obligation cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when areasonable estimate of the asset retirement obligation can be made.
Upon initial recognition of a liability for an asset retirement obligation,
an asset retirement cost is capitalized by increasing the carrying
amount of the related fixed asset by the amount of the liability. The
asset retirement cost is subsequently allocated to expense throughdepreciation over the remaining useful life of the asset. Over time, theliability is accreted to its present value each period. Any subsequent
revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected as an adjustment to the carrying
amount of the liability and the capitalized amount of the related asset
retirement cost.
Leases:LessorFor financing leases in which the Bank is lessor, sales and cost of
sales are accounted for when lease payments are paid.
Stock options:
The accounting standard for stock options requires companies tomeasure the cost of employee stock options based on the fair value
at the date of grant and recognize compensation expense over thevesting period as consideration for receiving goods or services. The
standard also requires companies to account for stock options
granted to nonemployees based on the fair value of either the stock
options or the goods or services received. In the balance sheet, thestock options are presented as stock acquisition rights as a separate
component of equity until exercised. The standard covers equitysettled, share-based payment transactions, but does not cover cashsettled, share-based payment transactions. In addition, the standard
allows unlisted companies to measure options at their intrinsic value if
they cannot reliably estimate fair value.

Allowance for investment losses:
The allowance for investment losses is provided at a necessaryamount based on the estimated possible losses on investments.

Translation of foreign currencies:
Assets and liabilities, which are payable or receivable in foreign currencies, are converted into Japanese yen at the rates prevailing at eachbalance sheet date.
The financial statements of the consolidated subsidiaries outside
Japan are translated into Japanese yen at the current exchange rate
at each balance sheet date, except for equity, which is translated at
the historical exchange rate.
Differences arising from such translation are shown as “Foreign
currency translation adjustments” in a separate component of equity.

Retirement and pension plans:
The Bank and certain consolidated subsidiaries have lump-sum retirement benefit plans, a contributory funded defined benefit pension plan,
and a noncontributory funded pension plan.
The projected benefit obligations are attributed to periods on astraight-line basis. Actuarial gains and losses are amortized on astraight-line basis over 10 years within the average remaining service
period. Past service costs are recognized in the applicable year.

Income taxes:
The Bank and its consolidated subsidiaries in Japan allocate income
taxes based on the asset and liability method.
Deferred income taxes are recorded to reflect the impact of temporary differences between assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax purposes.
These deferred taxes are measured by applying currently enacted tax
laws to the temporary differences.

Provision for losses from reimbursement of inactive accounts:
The provision for losses from reimbursement of inactive accounts,
which are derecognized as liabilities under certain conditions, isprovided for possible losses on future claims of withdrawal based on
historical reimbursement experience.

Derivatives and hedging activities:
All derivative transactions, except those entered into for hedging
purposes, are recognized as either assets or liabilities and measured
at fair value, with gains or losses on derivative transactions recognizedin the consolidated statement of income.
For derivative transactions used for hedging purposes, the methodsof hedge accounting are as follows:

The consolidated subsidiaries provide based on anticipation of the
expected loss for loan losses at the amount deemed necessary tocover such losses, principally based on past experience.

77

Provision for retirement benefits to directors:
The provision for retirement benefits to directors is provided for thepayments that have occurred up to the end of the fiscal year to pay
for retirement benefits to directors.

(a) Transactions to hedge against interest rate risk
Transactions to hedge against interest rate risk affecting thefinancial assets and liabilities of the Bank are accounted for using
deferral hedge accounting as stipulated in the Japanese Institute ofCertified Public Accountants (JICPA) Industry Committee Practical
Guideline No. 24, October 8, 2020, “Accounting and Auditing
Treatments on the Application of Accounting Standards for Financial
Instruments in the Banking Industry.” Regarding the effectiveness of ahedging relationship under fair value hedging, a portfolio of hedged
items, such as deposits or loans with common maturities, is matchedwith a group of hedging instruments, such as interest rate swaps,
which offset the effect of fair value fluctuations of the hedged items byidentified maturities, and are designated as a hedge of the portfolio.
The effectiveness of the fair value hedge is assessed by each group.
Also, the effectiveness of a cash flow hedge is assessed on the basisof the correlation between the base interest rate index of the hedged
cash flow and that of the hedging instrument.
Special hedging treatment is applied for interest rate swaps.
(b) Transactions to hedge against foreign exchange fluctuation risk
Deferral hedge accounting is applied to hedges against foreignexchange fluctuation risks associated with foreign currency-denominated monetary assets and liabilities, stipulated in the JICPA Industry
Committee Practical Guideline No. 25, October 8, 2020, “Accounting
and Auditing Treatments of Accounting Treatments on Foreign
Currency Transactions in the Banking Industry.”
The effectiveness of currency swap transactions, exchange swap
transactions, and similar transactions hedging foreign exchange risks
of monetary assets and liabilities denominated in foreign currencies
is assessed by comparison of the foreign currency position of thehedged monetary assets and liabilities and the hedging instruments.
In order to hedge the foreign exchange risk of foreign currency­
denominated available-for-sale securities (except bonds), the Bank
applies the “general method,” using market value hedges in accordancewith certain conditions, namely the stipulation in advance of which
foreign currency-denominated securities are to be hedged, and theexistence in foreign currency of a spot-forward liability in excessof the acquisition cost of the relevant foreign currency-denominatedsecurities.
Consolidated statement of cash flows:
For the purpose of the consolidated statement of cash flows, cash andcash equivalents represent cash and due from the Bank of Japan.
Per share information:
Basic net income per share is computed by dividing net income attributable to common shareholders by the weighted-average number ofcommon shares outstanding for the period, retroactively adjusted forstock splits. The average number of common shares used in thecomputation was 568,191 thousand shares for 2022 and 574,004
thousand shares for 2021.
Diluted net income per share reflects the potential dilution that
could occur if the outstanding stock options were exercised. Diluted
net income per share assumes full exercise of the outstanding stock
options at the beginning of the year (or at the time of grant).
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective
years, including dividends to be paid after the end of the year.

4. SIGNIFICANT ACCOUNTING ESTIMATE(Recording of allowance for loan losses)(c) The impact on the consolidated financial statements for the next
fiscal year
If the original assumption for estimates changes because of thechange in management environment for borrowers, including thesituation of COVID-19, the balance of allowance for loan losses may
fluctuate due to the change in borrower’s category, cash flow estimates, and expected loss ratio, and it may affect the consolidated
financial statements for the next fiscal year.

5. CHANGES IN ACCOUNTING POLICIES(Application of accounting standards for revenue recognition)
The “Accounting Standards for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020; the “ASRR”) and related rules
have been applied since the beginning of the current fiscal year.
Pursuant to the ASRR, the Group has recognized revenue at the timeof transfer of control over promised goods or services to the customer
in the amount expected to be received by the Group in exchange forthose goods or services.
As a result, the point in time at which certain fees and commissions
are recognized as revenue has been changed from the time of receipt
to the time of provision of goods or services.
Pursuant to the transitional treatment set forth in the proviso of
Paragraph 84 of the ASRR, the ASRR and related rules have been
applied starting from the balance at the beginning of the current fiscal
year, by reflecting, in retained earnings at the beginning of the current
fiscal year, the cumulative impact of applying these new accounting
policies retrospectively from the beginning of the current fiscal year.
However, using the method set forth in Paragraph 86 of the ASRR,
these new accounting policies have not been applied retrospectively
to contracts for which substantially all of the revenue was recognizedin accordance with the treatment that had prevailed before thebeginning of the current fiscal year. In addition, using the method set
forth in item (1) of the second sentence of Paragraph 86 of the ASRR,
all changes in contracts that occurred before the beginning of thecurrent fiscal year have undergone accounting treatment based on
the contractual conditions after reflecting all changes in the contracts,
and the cumulative impact of these changes has been reflected inretained earnings at the beginning of the current fiscal year.
The results indicate that the impact of the changes described above
is minor for the current fiscal year.
(Application of accounting standards for fair value measurement)
The “Accounting Standards for Fair Value Measurement” (ASBJ
Statement No. 30, July 4, 2019; the “ASFVM”) and related rules havebeen applied since the beginning of the current fiscal year. Pursuant
to Paragraph 8 of the ASFVM, the fair value adjustment method used
to determine the fair value in derivative transactions has been revised
to maximize the use of observable inputs estimated from derivatives
and others traded in the market. This revision was made as a result of
the application of the ASFVM and related rules. Pursuant to thetransitional treatment set forth in the second sentence of Paragraph
20 of the ASFVM, the Group has reflected, in retained earnings at the
beginning of the current fiscal year, the cumulative impact of applying
these new accounting policies retrospectively from the beginning of
the current fiscal year.
As a result, retained earnings decreased by ¥531 million, trading
assets by ¥28 million, other assets by ¥730 million, trading liabilitiesby ¥1 million, other liabilities by ¥0 million, deferred tax liabilities by¥226 million, and net assets per share by 92 sen, each at the
beginning of the current fiscal year.

(1) Carrying amounts
Millions of Yen

Allowance for loan losses

2022¥53,3822021¥53,901

Thousands of
U.S. Dollars

2022$436,168(2) Information on the significant accounting estimate(a) Calculation method
The calculation method of allowance for loan losses is listed in“Allowance for loan losses” of “3. SUMMARY OF SIGNIFICANTACCOUNTING POLICIES.”(b) Main assumptions
There are concerns about the impact on the repayment ability ofborrowers due to the effect of the COVID-19 pandemic. However, anallowance for loan losses is calculated based on the assumptions that
there will be no significant impact on borrower’s category of theGroup. Regarding the assumptions about the effects of COVID-19,
there are no changes compared to the description on previous fiscal
year’s Integrated Report.
Assumptions are made in determining the impact on borrower’s
category, future forecasts, such as sales forecasts, cost reduction,and borrower’s repayment schedules on business plan used for theclassification of borrower’s category and the estimate of future cash
flow based on cash flow estimate method.
Future forecasts, such as sales forecasts, cost reduction, andborrower’s repayment schedules on business plan are determinedbased on the impact of COVID-19 and market growth potential andprice trends in the industry to which the borrower belongs.

78

6. TRADING ASSETS AND LIABILITIES

8. SECURITIES

Trading assets and liabilities at March 31, 2022 and 2021, consistedof the following:(a) Trading assets

Securities at March 31, 2022 and 2021, consisted of the following:

Millions of Yen
2022
2021

Trading securities:
Japanese government bonds
Local government bonds
Industrial bonds
Foreign securities
Subtotal
Financial derivatives:
Other (Note)
Subtotal
Other trading assets:
Commercial paper
Subtotal
Total

¥62
533
437

Thousands of
U.S. Dollars
2022

$514
4,356
3,572

1,033

¥168
1,933
344
243
2,689

4,224
4,224

3,775
3,775

34,51334,5139,499
9,499¥14,756

11,99911,999¥18,464

77,61377,613$120,570

8,444(b) Trading liabilities
Millions of Yen

2022

Trading security derivatives:
Other (Note)
Subtotal
Financial derivatives:
Other (Note)
Subtotal
Total

Thousands of
U.S. Dollars

2021

2022

¥1
1
¥3,3293,329¥3,329¥3,0153,015¥3,016$27,204
27,204$27,204

Millions of Yen
2022
2021

¥600,379 ¥191,398
205,854
146,882426,713
365,292
412,395
447,013692,591
803,573¥2,337,933 ¥1,954,159

Japanese government bonds
Local government bonds
Corporate bonds
Corporate stocks
Other securities
Total

Thousands of
U.S. Dollars
2022$4,905,457
1,681,954
3,486,505
3,369,517
5,658,887$19,102,322

As of March 31, 2022 and 2021, securities included equity investments in unconsolidated subsidiaries and affiliated companies thatamounted to ¥22,166 million ($181,111 thousand) and¥21,952 million, respectively.
In addition to securities, the following table presents details of trading securities and commercial paper classified as trading assets andnegotiable certificates of deposit classified as cash and due frombanks.
Information regarding each category of the securities classified as
trading, available-for-sale, and held-to-maturity at March 31, 2022
and 2021, was as follows:

March 31, 2022

Securities classified as:
Trading
Available-for-sale:
Equity securities
Debt securities
Others
Held-to-maturity

Millions of Yen
Unrealized Unrealized
Gains
Losses

Cost

Fair
Value

¥10,532¥98,071
1,159,836
681,861
79,726¥289,738
896
14,198
44

¥534
7,512
22,395111

387,275
1,153,220
673,665
79,658

Note: Other in assets and liabilities represents unrealized gains and losses, respectively.

7. MONEY HELD IN TRUST
Money held in trust at March 31, 2022 and 2021, consisted of the following:

March 31, 2022

Money held in trustclassified as:
Held-to-maturity
Money held in trustclassified as:
Available-for-sale

March 31, 2021

Money held in trustclassified as:
Held-to-maturity
Money held in trustclassified as:
Available-for-sale

March 31, 2022

Money held in trustclassified as:
Held-to-maturity
Money held in trustclassified as:
Available-for-saleCost¥4,800Millions of Yen
Unrealized Unrealized
Gains
Losses¥1

100,000

Cost¥4,100Millions of Yen
Unrealized Unrealized
Gains
Losses¥0$39,218

Thousands of U.S. Dollars
Unrealized Unrealized
Gains
Losses$8817,060

Note:“Available-for-sale” is jointly managed money trust.

79

Securities classified as:
Trading
Available-for-sale:
Equity securities
Debt securities
Others
Held-to-maturity

Cost

Fair
Value

¥ 14,689¥ 99,569
634,372
783,774
69,066¥323,211
2,474
13,305
101

¥ 290
1,525
9,937
42

422,490
635,321787,142
69,125¥4,801
100,000

100,000

Cost

Fair
Value

March 31, 2021

Millions of Yen
Unrealized Unrealized
Gains
LossesFair
Value¥4,100March 31, 2022

Securities classified as:
Trading
Available-for-sale:
Equity securities
Debt securities
Others
Held-to-maturity

Cost

Thousands of U.S. Dollars
Unrealized Unrealized
Gains
LossesFair
Value$86,057$801,302 $2,367,340
9,476,565
7,323
5,571,222
116,014
651,409359$4,366
61,379
182,982912

3,164,275
9,422,508
5,504,254
650,857

100,000

Available-for-sale securities sold during the years ended March 31,
2022 and 2021, were as follows:

Fair
Value

Year Ended
March 31, 2022

$39,227

Equity securities
Debt securities
OthersTotal

817,060

Millions of Yen
Proceeds from Total Amount of Total Amount of
Sales
Gains on Sales Losses on Sales¥4,286
974,924
1,278,992¥2,258,203¥2,789
2,566
13,385¥18,740¥0
8,560
24,428¥32,989

Year Ended
March 31, 2021

Equity securities
Debt securities
Others
Total

Millions of Yen
Proceeds from Total Amount of Total Amount of
Sales
Gains on Sales Losses on Sales¥  9,101
243,727
649,306¥902,135¥7,489
1,419
11,968¥20,877

¥154
7,654
¥7,809Year Ended
March 31, 2022

Thousands of U.S. Dollars
Proceeds from Total Amount of Total Amount of
Sales
Gains on Sales Losses on Sales

Equity securities
Debt securities
OthersTotal$35,024
7,965,718
10,450,135$18,450,878$22,792
20,967
109,364$153,124$269,943
199,597$269,544

10. FOREIGN EXCHANGES
Foreign exchange assets and liabilities at March 31, 2022 and 2021,
consisted of the following:(a) Assets
Millions of Yen
2022
2021

Due from foreign banks
Foreign exchange bills bought
Foreign exchange bills receivable
Total

Millions of Yen
2022
2021

Foreign exchange bills sold
Foreign exchange bills payable
Total

9. LOANS AND BILLS DISCOUNTED

Accrued income
Derivative products
Guarantee deposits
Others
Total

Bills discounted
Loans on bills
Loans on deeds
Overdrafts
Total

Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022¥18,243 ¥14,941
129,716
132,696
8,363,418 8,172,846
990,819
982,637¥9,502,197 ¥9,303,121$149,062
1,059,859
68,334,166
8,095,589$77,638,677

Loans under bankruptcy proceedings, past-due loans on whichinterest payments are waived from borrowers who are financiallyassisted by the Bank, loans past due for three months or more(except for loans under bankruptcy proceedings and past-due loans),
and restructured loans at March 31, 2022 and 2021, consisted of thefollowing:
Millions of Yen
2022
2021

Claims provable in rehabilitationfrom bankruptcy and equivalents ¥17,425
Doubtful claims
68,961Loans past due for three months
or more353
Restructured loans
13,777
Total¥100,517

Thousands of
U.S. Dollars
2022¥21,972
69,396$142,379
563,457776
13,091¥105,237

2,885
112,567$821,290

Notes: 1. Loans past due for three months or more include loans for which payments
of principal or interest are delinquent by three months or more as calculated
from the day following the contracted payment date, but do not include
loans under bankruptcy proceedings or past-due loans.
2. Restructured loans include loans for which certain conditions have beenrelaxed for the benefit of the borrower (through means, such as the reduction or elimination of interest payments, the deferral of principal repayments,or the relinquishment of claims) with the goal of supporting the recovery ofborrowers that have fallen into financial difficulty, and thereby promoting therecovery of the loan.

Bills discounted are accounted for as financial transactions inaccordance with the JICPA Industry Audit Committee Report No. 24.
As of March 31, 2022 and 2021, the Bank had the right by contract
or custom to sell or repledge bills discounted and foreign exchangebills bought and their total face values were ¥18,439 million ($150,665
thousand) and ¥15,384 million, respectively.

¥13,417
443
613¥14,474$79,716
1,603
10,001$91,321(b) Liabilities

Marketable available-for-sale securities whose fair value significantly
declines in comparison with their acquisition cost and whose fair valueof the securities will not recover to their acquisition cost are written
down and accounted for as impairment losses.
The Bank recognizes securities as having significantly declined when
their fair value is more than 30% below their acquisition cost.
Impairment losses on marketable available-for-sale equity securities
for the years ended March 31, 2021, were ¥146 million.

Loans and bills discounted at March 31, 2022 and 2021, consisted of
the following:¥9,756
196
1,224¥11,176

Thousands of
U.S. Dollars
2022

¥3
2,399
¥2,402

¥253
356
¥609

Thousands of
U.S. Dollars
2022

$25
19,603$19,629

11. OTHER ASSETS
Other assets at March 31, 2022 and 2021, consisted of the following:
Millions of Yen
2022
2021

¥11,257
28,794
1,943
291,162¥333,157¥10,328
20,3101,941
159,693¥192,273

Thousands of
U.S. Dollars
2022$91,984
235,264
15,8772,378,974$2,722,101

12. TANGIBLE FIXED ASSETS AND INTANGIBLE FIXEDASSETS
Tangible fixed assets and intangible fixed assets at March 31, 2022
and 2021, consisted of the following:
Millions of Yen

Tangible fixed assets:
Buildings
Land
Lease assets
Construction in progress
Other tangible fixed assets
Subtotal
Intangible fixed assets:
Software
Other intangible assets
Subtotal
Total

Thousands of
U.S. Dollars

2022

2021

2022

¥24,325
19,001
26
985
10,452
54,790¥26,094
19,921
27
923
10,644
57,611$198,750
155,250
215
8,053
85,403447,674

46,191
383
46,574¥101,365

49,608442
50,051¥107,662

377,4153,129
380,545$828,219

Tangible fixed assets are stated at cost, less accumulated depreciation of ¥119,521 million ($976,559 thousand) and ¥117,456 million in
2022 and 2021, respectively.
As of March 31, 2022 and 2021, deferred gains for tax purposes of¥9,033 million ($73,812 thousand) and ¥9,365 million, respectively, on
tangible fixed assets sold and replaced with similar assets have been
deducted from the cost of newly acquired tangible fixed assets.
The Group reviewed its long-lived assets for impairment as of March
31, 2022 and 2021. As a result, the Group recognized impairment
losses of ¥634 million ($5,185 thousand) and ¥2,853 million at March
31, 2022 and 2021, respectively, as other expenses for certain
branches and an idle property in Shizuoka prefecture, caused bydecreasing in a cash flow from operating activities, declining in land
price, or the decision to consolidate branches.
The impairment losses were composed of ¥409 million ($3,341
thousand) on land, ¥80 million ($658 thousand) on buildings, and¥145 million ($1,185 thousand) on other fixed assets for the year
ended March 31, 2022, and ¥2,853 million were composed of ¥1,292
million on land, ¥983 million on buildings, and 577 million on otherfixed assets for the year ended March 31, 2021.

80

Upon calculating the amount of impairment losses, in principle,
based on the complementarity of cash flows, the Group recognizes
each individual branch as cash-generating units divided by certain
areas. Idle property is recognized individually.
The impairment losses would be measured as the amount by which
the carrying amount of the asset exceeds its recoverable amount,which is the higher of the DCFs from the continued use and eventual
disposition of the asset or the net selling price at disposition quoted
from a third-party vendor.
The DCFs were calculated using a discount rate of 3.0% and the net
selling price was calculated by deducting the estimated disposal costfrom the evaluation based on the real estate appraisal standards.

13. CUSTOMERS’ LIABILITIES FOR ACCEPTANCESAND GUARANTEESAll contingent liabilities for acceptances and guarantees are recorded
and reflected in acceptances and guarantees. Customers’ liabilities
for acceptances and guarantees have been recorded and reflected
as assets in the consolidated balance sheet, representing the Bank’s
right of indemnity from the applicant.
The respective amounts of “Acceptances and Guarantees” and“Customers’ Liabilities for Acceptances and Guarantees” are netted
in accordance with the appendix forms of “Banking Act Enforcement
Regulations” (Ministry of Finance Ordinance No. 10, 1982).
Liabilities for guarantees on corporate bonds included in securities,
which were issued by private placement (Article 2, Paragraph 3 of the
Financial Instruments and Exchange Act) as of March 31, 2022 and
2021, amounted to ¥30,088 million ($245,840 thousand) and ¥28,893
million, respectively.

14. ASSETS PLEDGED

Assets pledged as collateral and their relevant liabilities at March 31,
2022 and 2021, were as follows:
Millions of Yen
2022
2021

Assets pledged as collateral:
Trading assets¥
2,999 ¥7,999
Securities
1,104,080 1,009,377
Loans and bills discounted
817,620557,209
Other assets
96,76642,278
Relevant liabilities to above assets:
Deposits¥ 45,865 ¥36,124
Payables under repurchase agreements
296,764
357,952
Payables under securities lending transactions
72,701
143,311
Borrowed money
1,325,129
848,034

Thousands of
U.S. Dollars
2022$ 24,510
9,021,002
6,680,448
790,641$ 374,749
2,424,740
594,016
10,827,104

In addition to the above, the Bank has provided ¥19,821 million($161,955 thousand) and ¥23,090 million in securities and ¥244
million ($2,000 thousand) and ¥221 million in due from banks and¥5,750 million ($46,985 thousand) in other assets as collateral forforeign exchange settlements and certain other transactions and as
security for futures transactions at March 31, 2022 and 2021, respectively.
Guarantee deposits on office space, cash collateral paid for financial
instruments, and cash collateral paid to central counterparty areincluded in other assets in the amount of ¥1,943 million ($15,877
thousand) and ¥1,941 million at March 31, 2022 and 2021, in theamount of ¥9,631 million ($78,697 thousand) and ¥10,181 million atMarch 31, 2022 and 2021, in the amount of ¥60,800 million($496,772 thousand) and ¥60,800 million at March 31, 2022 and
2021, respectively.

15. LOAN COMMITMENTS
Overdraft agreements and agreements for loan commitments areagreements under which the Bank pledges to lend funds up toa certain limit when applications for advances of loans are received
from customers, provided there are no violations of the terms written
in the agreements.

The balances of loans undisbursed under these agreements at
March 31, 2022 and 2021, were as follows:

Undisbursed loan commitments
outstanding:
Loans due within one year
Loans due over one year
Total

Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022¥1,729,933 ¥1,768,137
120,741
121,593¥1,850,675 ¥1,889,731$14,134,600
986,529$15,121,129

Many of these agreements terminate without loans being disbursed,
and thus, the balance of loans as yet undisbursed will not necessarily
affect the future cash flow of the Bank or its consolidated subsidiaries.
The Bank or its consolidated subsidiaries can refuse to advance loans
and reject applications that have been received or can reduce themaximum amounts under the agreements for reasonable reasons,such as changes in the financial situation and preservation of credit. In
addition, at the time the agreements are entered into, borrowers may,when necessary, be required to provide collateral, such as real estateor securities, and after the agreements have been signed, the state of
the borrower’s business and other factors may be assessed regularlyin accordance with in-house procedures. Moreover, agreements canbe revised, if necessary, and steps, such as the formulation of
measures to preserve credit, may be taken.

16. DEPOSITS
Deposits at March 31, 2022 and 2021, consisted of the following:
Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022

Current deposits¥ 597,023 ¥604,226 $ 4,878,039
Savings deposits
6,861,189 6,541,688
56,060,050
Deposits at notice
30,616
31,442
250,151
Time deposits
3,132,651 3,255,005
25,595,650
Negotiable certificates of deposit
157,266
69,105
1,284,958
Other
778,468
644,437
6,360,556
Total¥11,557,215 ¥11,145,906 $ 94,429,408

17. BORROWED MONEYAt March 31, 2022 and 2021, the weighted-average annual interest
rates applicable to borrowed money were 0.03% and 0.02%,
respectively.
Borrowed money consists of borrowings from financial institutions.
Annual maturities of borrowed money as of March 31, 2022, were as
follows:
Years Ending March 31,

Millions of Yen

Thousands of
U.S. Dollars

2023
2024
2025
2026
2027 and thereafterTotal¥   947,810
207,093
14,711
191,658
3,615¥1,364,889$ 7,744,180
1,692,078
120,205
1,565,968
29,540$11,151,973

18. BONDS PAYABLE
Bonds at March 31, 2022 and 2021, consisted of the following:
Rate (%)

Millions of Yen
2022
2021

Unsecured convertible bonds with Three -monthstock acquisition rights , payable U.S. dollar
in U.S. dollars, due January 2023 Libor minus 0.5% ¥36,717
The Bank’s first bonds payable in
U.S. dollars (only for qualified
2,549
institutional investors)
The Bank’s bonds payable in U.S.
dollars due December 2023
3.31
34,568
Total¥73,835

Thousands of
U.S. Dollars
2022¥33,213$300,000

2,513

20,83031,269¥66,996

282,447$603,278

The coupon amount of Shizuoka Bank, Ltd.’s first U.S. dollardenominated bonds (only for qualified institutional investors), which
are discounted bonds, is ¥2,640 million ($21,572 thousand).
81

Annual maturities of bonds as of March 31, 2022, were as follows:
Years Ending March 31,

2023
2024
2025
2026
2027
Total

Millions of Yen

Thousands of
U.S. Dollars¥36,717
37,118$300,000
303,278¥73,835$603,278

The following is a summary of the terms for conversion and redemption of the convertible bonds with stock acquisition rights:
Number of Shares
Conversion of Common Stock
Price(thousand)Unsecured convertible bonds withstock acquisition rights, payable in
U.S. dollars, due January 2023

$13.876

Exercise Period

From February 8, 2018
21,620 to January 11, 2023

3. Reconciliation between the liability recorded in the consolidatedbalance sheet and the balances of defined benefit obligation andplan assets
Millions of Yen
2022
2021

Funded defined benefit obligation
Plan assets
Total
Unfunded defined benefit
obligation
Net liability (asset) arising fromdefined benefit obligation

Thousands of
U.S. Dollars
2022¥ 59,618(71,696)(12,078)¥ 60,427(71,717)(11,289)$ 487,118(585,802)(98,684)

1,537

1,656

12,561(10,540)(9,633)(86,123)

Millions of Yen
2022
2021

Thousands of
U.S. Dollars
2022¥ 3,768(14,309)¥ 3,423(13,057)$ 30,792(116,915)(10,540)(9,633)(86,123)

The conversion price is subject to adjustment for certain subsequent
events, such as the issuance of common stock or disposal of treasury
stock at less than market price, and stock splits.

Liability for retirement benefits
Asset for retirement benefits
Net liability (asset) arising fromdefined benefit obligation

19. OTHER LIABILITIES

4. The components of net periodic retirement benefit costs for theyears ended March 31, 2022 and 2021, were as follows:

Other liabilities at March 31, 2022 and 2021, consisted of the following:
Millions of Yen
2022
2021

Income taxes payable¥  3,962
Accrued expenses
7,091
Unearned income
16,730Derivative products
37,778Cash collateral received for financial products
11,658Other
52,993
Total¥130,214¥ 13,328
7,809
15,996
18,3985,780
58,318¥119,631

Thousands of
U.S. Dollars
2022$   32,378
57,937
136,696308,671
95,258432,990$1,063,932

20. RETIREMENT AND PENSION PLANS
The Bank and certain consolidated subsidiaries have severance
payment plans for employees. Under most circumstances, employees
terminating their employment are entitled to retirement benefits determined based on the rate of pay at the time of termination, years ofservice, and certain other factors. Such retirement benefits are madein the form of a lump-sum severance payment from the Bank or fromcertain consolidated subsidiaries in Japan and annuity payments froma trustee.
1. The changes in defined benefit obligation for the years ended
March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

Balance at beginning of year
Current service cost
Interest cost
Actuarial gains and losses
Benefits paid
OthersBalance at end of year

¥ 62,083
1,675
607
457
(3,797)129¥ 61,155¥ 63,869
1,721
624
221
(4,482)129¥ 62,083

Thousands of
U.S. Dollars
2022$ 507,262
13,6874,961
3,737(31,031)
1,061$ 499,679

2. The changes in plan assets for the years ended March 31, 2022
and 2021, were as follows:
Millions of Yen
2022
2021

Balance at beginning of year
¥ 71,717
Expected return on plan assets
1,256Actuarial gains and losses
178
Contributions from the employer
1,062
Contribution to retirement benefit trusts
200
Benefits paid
(2,847)
Others128
Balance at end of year
¥ 71,696¥ 52,237
1,092
3,482
1,704
16,000(2,927)128¥ 71,717

Thousands of
U.S. Dollars
2022$ 585,973
10,262
1,461
8,682
1,634
(23,264)
1,053$ 585,802

Millions of Yen
2022
2021

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
OthersNet periodic retirement benefit costs¥ 1,675
607(1,256)44
37¥ 1,109¥ 1,721624(1,092)558
22¥ 1,834

Thousands of
U.S. Dollars
2022$ 13,687
4,961(10,262)366
308$ 9,061

5. Amounts recognized in other comprehensive income (before
income tax effect) in respect of defined retirement benefit plans forthe years ended March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

Actuarial (gains) losses
Total¥(233)¥(233)¥3,820¥3,820Thousands of
U.S. Dollars
2022$(1,909)$(1,909)

6. Amounts recognized in accumulated other comprehensive income(before income tax effect) in respect of defined retirement benefit
plans as of March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

Unrecognized actuarial gains andlossesTotal¥(3,767)¥(3,767)

Thousands of
U.S. Dollars
2022¥(4,000)¥(4,000)$(30,780)$(30,780)

2022

2021

7. Plan assets(1) Components of plan assets
Plan assets consisted of the following:
Debt investments
Equity investments
Cash and cash equivalents
General account of life insurance companies
Others
Total

52%
15%

52%
17%

27%
6%
100%

28%
3%
100%

(2) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return that are expected currently and in
the future from the various components of the plan assets.

82

8. Assumptions used for the years ended March 31, 2022 and 2021,
were set forth as follows:
Discount rate
Expected rate of return on plan assets
Expected rate of salary increase2022
Mainly 1.0%

2021
Mainly 1.0%

0.8%-2.0%
6.3%

0.8%-2.0%
6.3%

9. Defined contribution
The amounts to be contributed by the Bank and certain consolidated
subsidiaries for the years ended March 31, 2022 and 2021, were¥447 million ($3,658 thousand) and ¥431 million, respectively.

21. EQUITY
Japanese companies are subject to the Companies Act. The significant provisions in the Companies Act that affect financial andaccounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time
during the fiscal year in addition to the year-end dividend upon resolution at the shareholders’ meeting. Additionally, for companies thatmeet certain criteria, such as (1) having a board of directors, (2) having
independent auditors, (3) having an audit and supervisory board, and(4) the term of service of the directors being prescribed as one year
rather than the normal two-year term by its articles of incorporation,
the Board of Directors may declare dividends (except for dividends inkind) at any time during the fiscal year if the company has prescribedso in its articles of incorporation. However, the Bank cannot do so
because it does not meet all the above criteria. The Companies Act
permits companies to distribute dividends in kind (noncash assets) toshareholders subject to certain limitations and additional requirements.
Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporation of
the company so stipulate. The Companies Act and the Banking Act
provide certain limitations on the amounts available for dividends or
the purchase of treasury stock.
(b) Increases/decreases and transfer of capital stock, reserve, andsurplusThe Banking Act requires that an amount equal to 20% of dividends
must be appropriated as a legal reserve (a component of retained
earnings) or as additional paid-in capital (a component of capitalsurplus) depending on the equity account charged upon the paymentof such dividends, until the total of the aggregate amount of the legal
reserve and additional paid-in capital equals 100% of capital stock.
The Companies Act also provides that capital stock, legal reserve,
additional paid-in capital, other capital surplus, and retained earnings
can be transferred among the accounts within equity under certain
conditions upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Boardof Directors. The amount of treasury stock purchased cannot exceed
the amount available for distribution to the shareholders, which isdetermined using a specific formula.
Under the Companies Act, stock acquisition rights are presented asa separate component of equity.
The Companies Act also provides that companies can purchaseboth treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate componentof equity or deducted directly from stock acquisition rights.

83

22. STOCK OPTIONSThe Bank’s stock option plans grant options to directors to purchasecertain shares of the Bank’s common stock in the respective exercise
periods.
Stock-based compensation expenses were ¥9 million for the years
ended March 31, 2021.
The stock options outstanding as of March 31, 2022, were as follows:
NumberDate of Exercise
Exercise Periodof Options
Grant Price
Granted67,0002007.
¥ 1 From July 28, 2007
2007
8 directors
shares7.27 ($0.01) to July 27, 2032
Stock Option
Stock
Options

Persons
Granted2008
8 directors
Stock Option

66,000shares2008.
¥ 1 From July 19, 2008
7.18 ($0.01) to July 18, 2033

2009
8 directors
Stock Option

89,000shares2009.
¥ 1 From July 25, 20097.24 ($0.01) to July 24, 2034

2010
8 directors
Stock Option

100,000
shares2010.
¥ 1 From July 24, 20107.23 ($0.01) to July 23, 2035

2011
8 directors
Stock Option

100,000
shares2011.
¥ 1 From July 23, 20117.22 ($0.01) to July 22, 2036

2012
8 directors
Stock Option

100,000
shares2012.
¥ 1 From July 25, 20127.24 ($0.01) to July 24, 2037

2013
8 directors
Stock Option

88,000shares2013.
¥ 1 From July 24, 20137.23 ($0.01) to July 23, 2038

2014
8 directors
Stock Option

92,000shares2014.
¥ 1 From July 23, 20147.22 ($0.01) to July 22, 2039

2015
7 directors
Stock Option

37,000shares2015.
¥ 1 From July 22, 2015
7.21 ($0.01) to July 21, 2040

2016
7 directors
Stock Option

50,000shares2016.
¥ 1 From July 20, 20167.19 ($0.01) to July 19, 2041

2017
7 directors
Stock Option

50,000shares2017.
¥ 1 From July 19, 20177.18 ($0.01) to July 18, 2042

2018
7 directors
Stock Option

50,000shares

2018.
¥ 1 From July 18, 20187.17 ($0.01) to July 17, 2043

2019
7 directors
Stock Option

50,000shares2019.
¥ 1 From July 17, 20197.16 ($0.01) to July 16, 2044

The stock option activity is as follows:
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option Stock Option
Year Ended March 31, 2021
Non-vested
March 31, 2020—Outstanding
Granted
VestedMarch 31, 2021—Outstanding
VestedMarch 31, 2020—Outstanding
VestedExercised
March 31, 2021—Outstanding
Year Ended March 31,2022
Non-vested
March 31, 2021—Outstanding
Granted
VestedMarch 31, 2022—Outstanding
VestedMarch 31, 2021—Outstanding
VestedExercised
March 31, 2022—Outstanding
Exercise price
Average stock price at exercise
Fair value price at grant date

50,00050,00013,00013,00020,00027,00027,00022,00048,00026,00036,00050,00050,0006,000
30,00012,00038,00012,30037,70050,00011,50038,50030,00038,00037,70038,50013,00013,00020,00027,00027,00030,00022,00048,0004,000
22,00013,00013,00020,00027,00027,00030,00022,00048,00022,000

5,000
5,600
4,500
13,000 13,000 20,000 27,000 27,000 30,000 22,000 48,000 22,000 30,000 33,000 32,100 34,000¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥
1 ¥
1 ¥
1 ¥
1 ¥
1 ¥
1 ¥
1
($ 0.01) ($ 0.01) ($ 0.01) ($ 0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01)
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥883 ¥883 ¥883($) ($) ($) ($) ($) ($) ($) ($) ($) ($) ($7.21) ($7.21) ($7.21)¥1,153 ¥1,057 ¥875 ¥704 ¥709 ¥743 ¥1,135 ¥1,079 ¥1,351 ¥730 ¥899 ¥888 ¥733($ 9.42) ($ 8.63) ($ 7.14) ($ 5.75) ($ 5.79) ($ 6.07) ($9.27) ($8.81) ($11.03) ($5.96) ($7.34) ($7.25) ($5.98)

23. VALUATION DIFFERENCE ON AVAILABLE-FORSALE SECURITIESThe breakdown of “Valuation difference on available-for-sale securities” posted in the consolidated balance sheet is as follows:
Millions of Yen
2022
2021

Valuation difference¥274,392
Deferred tax liabilities(80,252)
Amounts equivalent todifference on
available-for-sale securities¥194,139
Noncontrolling interests adjustment ¥(275)
Share of valuation difference on availablefor-sale securities in affiliated companies ¥(146)
Valuation difference on
available-for-sale securities¥193,717

Thousands of
U.S. Dollars
2022¥327,239(95,665)$2,241,948(655,708)¥231,573¥(391)$1,586,239$(2,253)

¥

$

14

¥231,196(1,201)$1,582,784

24. OTHER OPERATING INCOME
Other operating income for the years ended March 31, 2022 and
2021, consisted of the following:
Millions of Yen
2022
2021

Gains on foreign exchangetransactions
Gains on sales of bonds
Gains on financial derivatives
Other
Total

30,000¥3,822
18,960370¥23,153¥1,647
10,245243367¥12,504

Thousands of
U.S. Dollars
2022$31,231
154,920

25. OTHER INCOME
Other income for the years ended March 31, 2022 and 2021,
consisted of the following:
Millions of Yen
2022
2021

Gains on sales of stocks andother securities
Equity in earnings of affiliated companies
Gains on disposal of fixed assets
Gains on sales of shares of affiliated companies
accounted for by the equity method
Gain on change in equity
Other
Total

Thousands of
U.S. Dollars
2022¥4,889
1,953
34¥8,279
3,517
252$39,947
15,958
284

5,494
549
7,110
¥20,031

649

44,893
4,489
58,097$163,671

8,697¥21,396

26. OTHER OPERATING EXPENSES
Other operating expenses for the years ended March 31, 2022 and
2021, consisted of the following:
Millions of Yen
2022
2021

Losses on sales of bonds
Losses on redemption of bonds(Expenses of derivatives transactions)
Total

Thousands of
U.S. Dollars
2022¥28,609¥5,463$233,755

49¥28,659¥5,463408$234,163

3,025$189,177

84

27. GENERAL AND ADMINISTRATIVE EXPENSES

30. LEASES

General and administrative expenses for the years ended March 31,
2022 and 2021, consisted of the following:(1) Financial Lease

Millions of Yen
2022
2021

SalaryDepreciation expenses
Other
Total

¥33,369
18,45245,806¥97,629¥32,979
12,487
48,247¥93,715

Thousands of
U.S. Dollars
2022$272,650
150,769
374,270$797,690

28. OTHER EXPENSES

Provision of allowance for loan losses
Losses on written-off claims
Losses on sales of stocks andother securities
Losses on devaluation of stocks
and other securities
Losses on money held in trust
Losses on disposal of fixed assets
Impairment losses
Other
Total

Thousands of
U.S. Dollars
2022¥ 6,213444¥12,070521$50,770
3,629

1,192

99

9,746

123
10
862
634
5,549
¥15,031

151

1,012
84
7,044
5,185
45,344$122,817

706
2,853
6,572
¥22,974

29. INCOME TAXESThe Bank and its domestic subsidiaries are subject to Japanesenational and local income taxes which, in the aggregate, resulted in anormal effective statutory tax rate of approximately 29.9% for theyears ended March 31, 2022 and 2021, respectively.
Millions of Yen
2022
2021

Deferred tax assets:
Allowance for loan losses¥15,197
Provision for retirement benefits
5,000
Valuation loss on securities
4,190
Other
10,876
Less valuation allowance(5,091)
Deferred tax assets
30,173
Deferred tax liabilities:
Valuation difference
on available-for-sale securities(80,229)
Gain on establishment of
employee retirement benefit trust(5,079)Securities returned from
employee retirement benefit trust(2,724)Other(2,833)
Deferred tax liabilities(90,867)
Net deferred tax
assets(liabilities)¥(60,693)

Thousands of
U.S. Dollars
2022¥14,840
4,795
5,059
11,697(5,220)31,172$124,175
40,85534,242
88,863(41,601)
246,536(95,642)(655,522)(5,201)(41,500)(2,809)(2,410)(106,064)(22,263)(23,155)(742,441)¥(74,892)$(495,905)

A reconciliation between the normal effective statutory tax rates andthe actual effective tax rates reflected in the accompanying
consolidated statement of income for the year ended March 31, 2022,with the corresponding figures for 2021, is as follows:
Normal effective statutory tax rate
Change in valuation allowance
Dividends exempted for income tax purposes
Other
Actual effective tax rate

85

Millions of Yen
2022
2021

Gross lease receivables
Estimated residual values
Unearned interest income
Lease investment assets¥81,172
3,190(6,746)¥77,616¥81,6293,293(6,789)¥78,133

Thousands of
U.S. Dollars
2022$663,225
26,066(55,122)$634,169

Maturities of lease receivables are as follows:

Other expenses for the years ended March 31, 2022 and 2021,
consisted of the following:
Millions of Yen
2022
2021

(a) Lessor
The net lease investment assets are summarized as follows:

2022

2021

29.9%
(0.2)
(0.8)
0.1
29.0%

29.9%
(2.8)
(0.7)
1.6
28.0%

Years Ending March 31,

Millions of Yen
2022

Thousands of
U.S. Dollars
2022

2023
2024
2025
2026
2027
2028 and thereafterTotal¥1,330
1,126
891
589
416
1,250
¥5,604$10,872
9,201
7,285
4,817
3,401
10,217$45,795

Maturities of lease payment receivables of lease investment assets are
as follows:
Years Ending March 31,

Millions of Yen
2022

Thousands of
U.S. Dollars
2022

2023
2024
2025
2026
2027
2028 and thereafter
Total¥22,191
18,076
14,107
10,196
8,079
8,521¥81,172$181,317
147,691
115,264
83,31166,01069,627$663,225(2) Operating Lease(a) Lessee
The minimum rental commitments under noncancelable operatingleases at March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

Due within one year
Due after one year
Total

¥743
752
¥1,496¥712
841¥1,554

Thousands of
U.S. Dollars
2022$6,075
6,149$12,224(b) Lessor
The future lease payment receivables under noncancelable operatingleases at March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

Due within one year
Due after one year
Total

¥505
732
¥1,238¥503
597¥1,101

Thousands of
U.S. Dollars
2022$4,132
5,986$10,118

31. SEGMENT INFORMATION
An entity is required to report financial and descriptive information
about its reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet specified
criteria. Operating segments are components of an entity about which
separate financial information is available and such information is evaluated regularly by the chief operating decision maker in deciding how
to allocate resources and in assessing performance. Generally,
segment information is required to be reported on the same basis as
is used internally for evaluating operating segment performance anddeciding how to allocate resources to operating segments.

1. Description of Reportable Segments
The Group’s reportable segments are those for which separate financial information is available and regular evaluation by the Committee
for Integrated Risk and Budget Management is being performed inorder to decide how resources are allocated among the Group.
Therefore, the Group’s reportable segments consist of the banking
operations and leasing operations. Banking operations consist of thebanking business centered on deposits, loans, investment securities,

and exchange transactions. Leasing operations consist of lease transactions centered on finance leases.
2. Methods of Measurement of Ordinary Income, Profit (Loss), Assets,
Liabilities, and Other Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent
with those disclosed in Note 3, “Summary of Significant Accounting
Policies.”

3. Information about Ordinary Income, Profit (Loss), Assets, Liabilities, and Other Items
Millions of Yen

Year ended March 31, 2022
Ordinary income:Ordinary income from external customers
Ordinary income from intersegment transactions
Total

Segment profit
Segment assets
Segment liabilities
Other:
Depreciation
Interest income
Interest expense
Equity in earnings of affiliated companies
Extraordinary income
Gain on disposal of non-current assets
Gain on sales of shares of subsidiaries and associates
Gain on change in equity
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Investments in affiliated companies
Increase in property, plant and equipment andintangible assets

Reportable Segment
Banking
Leasing
Operations
Operations¥188,711
4,200¥192,912¥45,114
14,838,993
13,844,700
18,562
130,684
5,999¥33,677 ¥222,389
1,424
5,624
¥35,101 ¥228,013¥1,582 ¥46,696
116,246 14,955,239
94,170 13,938,870
1,027
8
225

19,589130,692
6,224

6,009
34
5,974
1,495
860
634

13,504

Total

Other

Total

¥19,211 ¥241,600
4,051
9,676
¥23,263 ¥251,277¥10,060 ¥56,757
146,725 15,101,965
33,846 13,972,716
218
162
4
1,953

6,009
34
5,974
1
1

1,496
861
634

787

14,2910019,807130,855
6,229
1,953
6,009
34
5,974

19,462

1,496
862
634
19,462

134

14,426

Reconciliations

Consolidated¥241,600¥  (9,676)¥  (9,676) ¥241,600¥  (2,538) ¥54,219(183,738) 14,918,227(142,736) 13,829,979(347)(2,668)
(266)
69
(480)
549

19,460128,187
5,963
1,953
6,078
34
5,494
549
1,496
862
634
19,462(384)

14,041

Reconciliations

Consolidated

Millions of Yen

Year Ended March 31, 2021

Reportable Segment
Banking
Leasing
Operations
Operations

Ordinary income:Ordinary income from external customers¥ 176,307 ¥33,186
Ordinary income from intersegment transactions
4,201
1,366
Total
¥ 180,508 ¥34,553
Segment profit¥51,782 ¥1,498
Segment assets
14,035,355
112,696
Segment liabilities
13,016,628
91,670
Other:
Depreciation
12,574958
Interest income
124,1428Interest expense
9,209
219
Equity in earnings of affiliated companies
Investments in affiliated companies
Increase in property, plant and equipment andintangible assets
16,688
291

Total

¥

209,4945,568¥ 215,062¥53,28014,148,052
13,108,299

Other

Total

¥ 21,292 ¥ 230,787
3,969
9,537
¥ 25,261 ¥ 240,324¥ 11,999 ¥
65,280185,431 14,333,483
35,628 13,143,928¥ 230,787¥  (9,537)¥  (9,537) ¥ 230,787¥  (1,930) ¥
63,349(257,635) 14,075,848(173,457) 12,970,470

13,533
124,150
9,428

200
218
5
3,517
19,106

13,734
124,368
9,433
3,517
19,106(322)(2,089)(336)

13,411
122,279
9,096
3,517
19,106

16,979268

17,248(396)

16,852

86

Thousands of U.S. Dollars
Reportable Segment
Banking
Leasing
Operations
Operations

Year ended March 31, 2022

Total

Other

Total

Reconciliations

Consolidated

Ordinary income:Ordinary income from external customers$  1,541,887 $ 275,164 $  1,817,052 $ 156,972 $  1,974,024$  1,974,024
34,319
11,63945,95933,10379,062 $   (79,062)
Ordinary income from intersegment transactions
Total$  1,576,207 $ 286,803 $  1,863,011 $ 190,075 $  2,053,087 $   (79,062) $  1,974,024$    368,610 $   12,931 $    381,541 $   82,203 $    463,745 $   (20,739) $    443,005
Segment profit
Segment assets
121,243,512
949,802 122,193,315 1,198,837 123,392,152(1,501,250) 121,890,901
Segment liabilities
113,119,539
769,427 113,888,966
276,543 114,165,510(1,166,245) 112,999,264
Other:
Depreciation
151,664
8,391
160,056
1,785
161,842(2,841)
159,001
Interest income
1,067,769
70
1,067,839
1,330
1,069,169(21,800)
1,047,369
Interest expense
49,021
1,839
50,86137
50,899(2,174)
48,724Equity in earnings of affiliated companies
15,95815,95815,958Extraordinary income
49,101
49,101
49,101566
49,668Gain on disposal of non-current assets
284
284
284
284
Gain on sales of shares of subsidiaries and associates
48,816
48,816
48,816(3,922)44,893Gain on change in equity
4,489
4,489
Extraordinary losses
12,2198
12,2272
12,22912,229Loss on disposal of non-current assets
7,033
8
7,042
2
7,044
7,044
Impairment losses
5,185
5,185
5,185
5,185
Investments in affiliated companies
159,021
159,021
159,021
Increase in property, plant and equipment andintangible assets
110,337
6,432
116,769
1,099
117,869(3,143)
114,725
Note: “Reconciliations” are mainly eliminations of intersegment transactions.

4. Related information(1) Information about services
Millions of Yen
Lending Investment Leasing
Operations Operations Operations

Year ended March 31, 2022
Year ended March 31, 2021

¥97,915¥98,970¥51,374¥40,378¥33,677¥33,186

Other

Total

¥58,633¥58,251¥241,600¥230,787

Thousands of U.S. Dollars
Lending Investment Leasing
Operations Operations Operations
Other

Total

$800,032 $419,760 $275,164 $479,067 $1,974,024(2) Information about geographical areas(i) Ordinary income
The domestic share of ordinary income from external customers exceeds 90% of ordinary income in the consolidated statement of income, thus
information is not presented.
(ii) Tangible fixed assets
The domestic share of tangible fixed assets exceeds 90% of tangible fixed assets in the consolidated balance sheet, thus information is notpresented.
(3) Information about major customers
Ordinary income from a specific customer does not exceed 10% of ordinary income in the consolidated statements of income, thus information is
not presented.
5. Information about impairment losses of assets

Impairment losses of assets
Year ended March 31, 2022
Year ended March 31, 2021

87

Millions of Yen
Reportable Segment
Banking
Leasing
Operations Operations
Total

¥634
¥2,853¥634¥2,853

Other

Total

¥634
¥2,853Thousands of U.S. Dollars
Reportable Segment
Banking
Leasing
Other
Operations Operations
Total$5,185$5,185Total$5,185

32. FINANCIAL INSTRUMENTS AND RELATEDDISCLOSURES(Financial Instruments)
1. Information on financial instruments(1) Policy for financial instruments
The Group provides comprehensive financial services, centering onbanking, along with leasing and financial instruments trading. Its
base of operations is Shizuoka Prefecture.
The Bank, the core business operator of the Group, provides arange of financial instruments, including deposits in Japanese yen,deposits in foreign currencies, Japanese government bonds,
investment trusts, and personal pension insurance. It also provides
stable financing for customers in the region through loans to individuals and lending operations for small and medium enterprises.
(2) Details of financial instruments and related risks
The financial assets of the Group consist primarily of loans and bills
discounted to domestic customers and securities, including bondsand equity securities.
The loans and bills discounted are exposed to credit risk arisingfrom potential default by borrowers. As about 60% of the loans
and bills discounted are for customers in Shizuoka Prefecture,credit-related losses could occur on a large scale if the regional
economic environment changes negatively or if a severe earthquake occurs.
The Group holds securities, such as debt securities (bonds),
equity securities, and investment trusts under its investment policy
focused on the safety and liquidity of the investment. These securities are exposed to risks of market price fluctuations associatedwith the credit standing of issuers and interest rate changes. If theprices of equity securities and other securities held decline, impairment losses or valuation losses could adversely affect the operating
results and financial standing of the Group.
Financial liabilities consist primarily of deposits from domestic
customers and funds raised in the call market. If the Group loses
its credit status because of downgrades or other factors or if themarket environment deteriorates, conditions for financing could
worsen or transactions could be constrained.
The Group enters into derivative transactions for customer needsof hedging exchange rates or interest rates, and for asset andliability management (ALM) or hedging individual transactions toappropriately manage the market risks of the Group. The Groupalso conducts short-term trading transactions.
Derivatives mainly include interest rate swaps, currency swaps,
and bond futures and are exposed to market risk that could cause
losses in association with changes in interest rate markets andforeign exchange markets, as well as credit risk (counterparty risk),
that is, the risk of default on the initial contract due to the bankruptcy of the counterparty or other factors. Between financial
assets and financial liabilities, there are interest rate risks associated with mismatches of interest rates and terms.
(3) Risk management systems for financial instruments(i) Integrated risk management system
Under the Basic Risk Management Regulations that stipulate
the Group’s basic risk management policy, the Group has
established a basic framework, including an organizational
structure for defining and managing risks and specific procedures for risk management.
To ensure a balance between profitability and financial soundness, the Group has introduced a management system basedon a risk capital allocation at the core of integrated risk
management.
The risk capital allocation is a system for avoiding excessive
risk taking by setting risk limits below which the Group will beable to withstand losses on its own. This system allocates coreregulatory capital to each operational department or section
and controls risk so that if market, credit or other risks emerge,
losses will be contained within the range of shareholders’equity.

(ii) Credit risk management system
Credit risk is the risk of incurring losses when collecting loans
and bills discounted becomes difficult because of the worsening of borrowers’ financial conditions.
The Credit Risk Management Group of the Compliance andRisk Management Department manages all credit risks associated with the Group’s operations both in Japan and overseas
in order to ensure the soundness of the Group’s loan asset
portfolio. The Bank’s borrower credit rating system, which is an
essential part of its credit risk management, together with otherinternal rating systems, is operated by the Credit PlanningGroup of the Business Support Department, designed andsupervised by the Credit Risk Management Group, which is
independent from the credit department (i.e., the BusinessSupport Department), and verified for appropriateness of thesystem by the Risk Management Group of the Compliance andRisk Management Department. This structure has been
designed such that the internal credit rating system will function
appropriately through mutual checks and balances between
these three groups.
In addition, the Audit Department checks whether credit risk
management is conducted appropriately in accordance withthe relevant rules, through such means as validation of the selfassessment process.
The Credit Risk Management Group uses statistical methods
to quantify latent credit risks intrinsic to the Bank’s entire loan
portfolio. This enables the Bank to accurately assess the scaleof potential risk, monitor any concentration of loans to particularlarge-scale borrowers or specific industries, and thus control
the portfolio to avoid excessive credit risk.
The Bank’s credit risk management status, together with thestatus of market risk management and liquidity risk management described below, is reported through monthly meetingsof the Committee for Integrated Risk and Budget Management,
which is chaired by the president, as well as through otherchannels of management.
(iii) Market risk management system
Market risk is the risk of incurring losses in association withchanges in the prices of financial assets and liabilities that arecaused by changes in interest rates, stock prices, and foreignexchange rates.
The Bank controls the degree of market risks within a certain
range by setting limits about risk capital allocations, unrealized
profits and losses, position, and sensitivity, and so on.
The Bank has established ALM hedge criteria for transactions
in banking accounts, especially deposits, loans and bills
discounted, and investment securities to control the degree ofmarket risk within a certain range. The Business Strategy
Planning and ALM Group of the Corporate Planning
Department discusses ALM hedge policies based on the status
of interest rate risks and interest rate outlook at meetings of theCommittee for Integrated Risk and Budget Management.
The Bank has established a system of checks and balancesin the market division by strictly separating trading departments
and administration departments and by setting up an independent risk management department. The Audit Department,
which is independent of departments subject to audit, checks
the effectiveness of this system of checks and balances among
the three departments.
The Bank and the Shizuoka Bank (Europe) S.A. measure themarket risks (the estimation of possible losses) of financial
assets and liabilities, such as securities and derivatives heldin trading portfolios, and loans, securities, deposits, bonds
payable, and derivative transactions held in banking portfolios,
using Value at Risk (VaR). VaR is utilized for the quantitative
analysis to manage market fluctuations.

88A historical simulation model (a variance covariance model in2012) is used for the measurement of VaR. The Bank performs
backtesting comparing VaR calculated by the model and actual
profit and loss, in order to determine whether the measurement
model captures market risks with sufficient accuracy.
Nevertheless, VaR measures possible market risk amounts
statistically calculated based on historical data and is unlikely tocapture risks under significant market fluctuations notpresumed.
The total amounts of market risks as of March 31, 2021 and2020, are as follows:
Millions of Yen
2022
2021

VaR

¥124,547¥146,483

Thousands of
U.S. Dollars
2022$1,017,629

The assumptions used to measure VaR are as follows:
Observation period: Five years
Confidence interval: 99%
Holding period: 125 days for banking transactions and 10
days for trading transactions
Demand deposits staying long term without withdrawal are
estimated as core deposits and are reflected in the market risk
measurement.
(iv) Liquidity risk management system
There are two types of liquidity risk: (1) financing risk, which is
the risk of not being able to secure needed funds as a result ofworsening market conditions and other factors, or incurring
losses due to being forced to raise funds at much higher interest rates than usual; and (2) market liquidity risk, which is therisk of not being able to trade financial instruments, such as
bonds, because of market turmoil or other factors or incurring
losses due to being forced to trade financial instruments at far
less favorable prices than usual.
The Bank has established a system of checks and balancesby setting up fund management departments for financing inJapanese yen and in foreign currencies, and a liquidity risk
management department that is independent of the fund management departments. The Treasury Department’s Fund andForeign Exchange Group, which is one of the fund management departments, controls amounts raised in markets within arange of amounts permitted to be raised so as to prevent
excessive fund-raising in markets, and seeks stable financing,considering market circumstances. The Risk Management
Group, which is the liquidity risk management department,
assesses the stability of the asset and liability structure, including the status of the holding of liquid assets, and monitors thefinancing position and the status of management by the fundmanagement departments.
To deal promptly with unforeseeable circumstances, the Bank
has classified financing management in emergencies into fourphases -- Phase 1 (prevention), Phase 2 (caution needed),Phase 3 (concern over liquidity), and Phase 4 (lack of liquidity)--, and has appointed authorized personnel and countermeasures for each phase in advance.
To manage market liquidity risk, the liquidity risk management
department monitors the holding of liquid assets on a timely
basis, and the front office chooses assets to be managed after
taking into account their liquidity and sets limits by issue and byterm.
(4) Supplementary explanation of the fair values of financial instruments
The fair values of financial instruments include values based onmarket prices. If there are no market prices, values are reasonably
calculated. As these fair values are calculated based on certain
assumptions, fair values could differ if different assumptions areused for calculation.

89

2. Fair values of financial instruments and a breakdown by level of thefair values of financial instruments
The carrying values and fair values of financial instruments, the difference between these values, and their fair values by level are as
follows.
Please note that the table below does not include: (i) investment
trusts subject to the transitional measures set forth in Paragraph 26 of
the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, July 4, 2019; the “Fair Value
Measurement Implementation Guidance”); (ii) stocks or others without
quoted market prices; or (iii) investments in partnerships subject to thetransitional measures set forth in Paragraph 27 of the Fair Value
Measurement Implementation Guidance (see (1)*1 and Note 3 below).
Account items whose carrying values are of law significance havebeen omitted.
Financial lnstruments Categorized by Fair Value Hierarchy
The fair value of financial instruments is categorized into the following
three levels, depending on the observability and significance of the
inputs used in making fair value measurements:
Level 1: Fair values measured by using quoted prices (unadjusted) in
active markets for identical assets or liabilities
Level 2: Fair values measured by using inputs other than quoted
prices included within Level 1 that are observable for theassets or liabilities, either directly or indirectly
Level 3: Fair values measured by using unobservable inputs for theassets or liabilities
If multiple inputs are used that have a significant impact on themeasurement of fair value, fair value is classified at the lowest level inthe fair value measurement among the levels to which each of these
inputs belongs.

(1) Financial instruments measured at the fair values in the consolidated balance sheet
March 31, 2021
Trading assets
Trading securities
Securities
Available-for-sale securities (*1)
Total assets
Derivative transactions (*2)(*3)(*4)
Interest rate-related
Currency-related
Stock-related
Bond-related
Total derivative transactions

Millions of Yen¥14,689
1,694,627¥1,709,316¥2,900
628
(857)
(1)
¥2,670(*1) The table above does not include investment trusts subject to the transitional
measures set forth in Paragraph 26 of the Fair Value Measurement Implementation
Guidance.
These investment trusts are carried at ¥119,269 million ($974,499 thousand) on
the consolidated balance sheet.
(*2) The total of all derivative transactions recorded in trading assets and liabilities andother assets and liabilities
Net claims and liabilities arising from derivative transactions are presented in net
amounts. Net negative amounts are marked with a bracket.
Transactions subject to special hedging treatment of interest rate swaps arevalued together with the hedged transactions, and have thus been excluded fromderivative transactions.
(*3) Of the derivative transactions, those subject to hedge accounting are carried at
Δ¥2,300million(Δ$18,792 thousand) on the consolidated balance sheet.

March 31, 2022

Level 1

Trading assets
Trading securities¥62
Japanese government bonds
62
Local government bonds
Corporate bonds
StocksOthersForeign bonds
Securities
Available-for-sale securities (*1) 1,024,344
Japanese government bonds
600,379
Local government bonds
Corporate bonds
Stocks382,363
Others41,602Foreign bonds
41,602
Total assets¥1,024,407
Derivative transactions (*2)(*3)(*4)
Interest rate-related
Currency-related
Stock-related
Bond-related
Total derivative transactions

March 31, 2022

Level 1

Trading assets
Trading securities$514
Japanese government bonds
514
Local government bonds
Corporate bonds
StocksOthersForeign bonds
Securities
Available-for-sale securities (*1) 8,369,511
Japanese government bonds 4,905,457
Local government bonds
Corporate bonds
Stocks3,124,137
Others339,915
Foreign bonds
339,915
Total assets$8,370,026
Derivative transactions (*2)(*3)(*4)
Interest rate-related
Currency-related
Stock-related
Bond-related
Total derivative transactions

Millions of Yen
Level 2
Level 3

¥10,469¥10,532
62
533
9,936

533
9,936

836,983

Total¥139,484

196,601
216,780
4,912
418,688418,595¥847,452

2,000,812
600,379
196,601
139,459356,239387,27525
460,315
460,197¥139,484 ¥2,011,345¥1,632(9,722)¥1,632(9,722)¥(8,089)¥(8,089)

Thousands of U.S Dollars
Level 2
Level 3

$ 85,542$86,057514
4,356
81,186

4,356
81,186

6,838,656

Total$1,139,674

1,606,356
1,771,225
40,1373,420,937
3,420,178$6,924,199

16,347,842
4,905,457
1,606,356
1,139,468
2,910,694
3,164,275
205
3,761,058
3,760,094$1,139,674 $16,433,900$13,338(74,436)$13, 338(79,436)$(66,098)$(66,098)(*1) The table above does not include investment trusts subject to the transitional
measures set forth in Paragraph 26 of the Fair Value Measurement Implementation
Guidance.
These investment trusts are carried at ¥164,632 million ($1,345,145 thousand)on the consolidated balance sheet.
(*2) The total of all derivative transactions recorded in trading assets and liabilities andother assets and liabilities
Net claims and liabilities arising from derivative transactions are presented in net
amounts. Net negative amounts are marked with a bracket.
Transactions subject to special hedging treatment of interest rate swaps arevalued together with the hedged transactions, and have thus been excluded fromderivative transactions.
(*3) Of the derivative transactions, those subject to hedge accounting are carried at
Δ¥14,638 million (Δ$119,606 thousand) on the consolidated balance sheet.
(*4) These transactions include, among others, interest rate swaps designated as
hedging instruments to reduce market fluctuation risk or foreign exchange fluctuation risk associated with loans to be hedged against. Deferred hedge accounting
is applied to these transactions. The Practical Solution on the Treatment of Hedge
Accounting for Financial Instruments that Reference LIBOR (ASBJ PITF No. 40,
March 17, 2022) is applied to these hedging relationships.

90

(2) Financial instruments not measured at the fair values in the consolidated balance sheet
Notes have been omitted for cash and due from banks, call loans and bills bought, call money and bills sold, payables under repurchaseagreements, and payables under securities lending transactions, as the carrying values of these financial instruments approximate their fairvalues due to short payment terms.
Millions of Yen
March 31, 2021
Securities
Held-to-maturity
Loans and bills discounted
Allowance for loan losses (*)
Total assets
Deposits
Negotiable certificates of deposit
Borrowed money
Total liabilities

Total¥69,066
9,303,121(49,629)
9,253,491¥9,322,558¥11,076,800
69,105890,515¥12,036,421

Carrying Value

Difference¥69,125¥58

9,292,243¥9,361,369¥11,076,913
69,106890,351¥12,036,370

38,751¥38,810
¥113
0
(164)
¥(51)
Millions of Yen

Fair Value
March 31, 2022
Securities
Held-to-maturity
Japanese government bonds
Local government bonds
Corporate bonds
OthersForeign bonds
Loans and bills discounted
Allowance for loan losses (*)

Level 1

Total assets
Deposits
Negotiable certificates of deposit
Borrowed money
Total liabilities

Level 2

Level 3

Total

Carrying Value

Difference¥10,796¥68,861¥79,658¥79,726

¥(67)

9,231
1,565

68,861

9,231
70,426

9,252
70,473(20)(46)

9,467,153¥9,546,811¥11,400,009
157,266
1,363,924¥12,921,200

9,502,197(48,817)
9,453,380¥9,533,106¥11,399,949
157,266
1,364,889¥12,922,105

13,772¥13,705¥60
0(965)¥(905)¥10,796¥11,400,009
157,266
1,329,879¥12,887,155

9,467,153¥9,536,014¥34,044¥34,044

Thousands of U.S Dollars
March 31, 2022
Securities
Held-to-maturity
Japanese government bonds
Local government bonds
Corporate bonds
OthersForeign bonds
Loans and bills discounted
Allowance for loan losses (*)
Total assets
Deposits
Negotiable certificates of deposit
Borrowed money
Total liabilities

Level 1

Level 2

Level 3Carrying Value

Difference$88,217$562,639$650,857$651,409$(552)

75,427
12,790562,639

75,427575,42975,598575,811

(170)
(382)

77,352,344$78,003,201$93,144,944
1,284,959
11,144,082$105,573,986

77,638,677(398,865)
77,239,812$77,891,221$93,144,449
1,284,958
11,151,973$105,581,381

112,532$111,980$495
0(7,890)$ (7,395)$88,217$93,144,944
1,284,959
10,865,916$105,295,820

77,352,344$77,914,983$278,166$278,166(*) General and individual allowances for losses are excluded from the corresponding loans and bills discounted.

91

Total

Note 1: Description of the valuation methodologies and inputs used for measurementof the fair value of financial instruments
AssetsTrading assets
The fair values of trading assets are classified into Level 1 if their unadjusted
quoted prices in active markets are available. These trading assets primarily
include Japanese government bonds. If the market is not active, the fair values of trading assets are classified into Level 2 even if their publishedquoted prices are used. These trading assets primarily include local government bonds and corporate bonds.
Securities
The fair values of securities are classified into Level 1 if their unadjusted
quoted prices in active markets are available. These securities primarily
include listed stocks and Japanese government bonds. If the market is not
active, the fair values of securities are classified into Level 2 even if their
published quoted prices are used. These securities primarily include local
government bonds and corporate bonds. The fair values of securitized
products (beneficial interests in trust) are classified into Level 3, because
these fair values are measured based on prices obtained from third parties,
and significant unobservable inputs are used to calculate these prices. The
fair values of private placement bonds are classified into Level 3, because
these fair values are measured by discounting at a discount rate commensurate with the bonds’ internal rating, remaining term, and coverage ratio,
and the discount rate is a significant unobservable input.
Stock acquisition rights are calculated using valuation techniques, such as
the option valuation model. Major inputs include probability of listing. Since
probability of listing is an unobservable input, the fair value of share acquisition rights is classified into Level 3.
Loans and bills discounted
The fair values of loans and bills discounted are measured at their present
values, which are calculated separately for different categories createdbased on types and internal ratings of loans and bills discounted, the statusof their collateral and guarantees, and their periods, by discounting thefuture cash flows of the principal and interest at the interest rate expected
for similar new loans or at a discount rate calculated by reflecting credit risk,
expense rate, etc., on market interest rate. The fair values of floating-rateloans and bills discounted are measured at their carrying values, because
their carrying values approximate fair values if the borrowers’ credit status
has not changed significantly since disbursement, as they quickly reflectmarket interest rates. As for claims against borrowers classified as legal
bankruptcy, virtual bankruptcy or caution, since the loan loss estimates havebeen calculated based on, among other things, the amounts expected to be
recoverable from collateral and guarantees, the fair values of these claims
approximate their carrying values minus the amount of allowance for loan
losses on the consolidated balance sheet at the end of the fiscal year. The
remaining amounts are deemed to be their fair values. These fair values are
all classified into Level 3, since the discount rate is unobservable.
Liabilities
Deposits and Negotiable Certificates of Deposit
As for demand deposits payable immediately on demand at the end of the
fiscal year, the amounts payable are deemed to be their fair values. The fairvalues of time deposits and negotiable certificates of deposit are measured
at their discounted present value, which is calculated by classifying thembased on their periods and discounting the future cash flows at the interest
rate to be used when accepting new deposits. The fair values of deposits
with short terms (up to one year) or floating interest rates are measured attheir carrying values, since their carrying values approximate fair values.
These fair values are classified into Level 2.

Borrowed money
The fair value of borrowed money is measured at its present value, which is
calculated by classifying the borrowed money based on its period and by
discounting the future cash flows at the interest rate expected for similar
new borrowings. Floating rate borrowed money reflects market interest
rates in short periods, and the credit standing of the Bank and its consolidated subsidiaries has not significantly changed since disbursement.
Therefore, the carrying value of floating rate borrowed money approximates
the fair value. The fair value of borrowed money with short terms (up to oneyear) is measured at its carrying value, since its carrying value approximatesfair value. This fair value is classified into Level 3 if any significant unobservable input is used in its measurement, or otherwise into Level 2.
Derivative Transactions
The fair values of derivative transactions are classified into Level 1 if theirunadjusted quoted prices in active markets are available. These derivativetransactions primarily include bonds futures. However, since most derivatives are over the counter transactions without published quoted prices,
their fair values are measured using valuation techniques, such as the present value technique and the option valuation model depending on the typeof transaction and the maturity period. The main inputs used in those valuation techniques are interest rate, exchange rate, and volatility, among others.
In addition, price adjustments are made based on the credit risk of thecounterparty and that of the Bank. The fair values of these transactions areclassified into Level 2 if no unobservable inputs are used or if the effect of
the unobservable inputs used is insignificant. These transactions primarily
include interest rate swaps and forward exchange contracts.
Note 2: Information on financial instruments measured at Level 3 fair values in the consolidated balance sheet(1) Quantitative information on significant unobservable inputs (March 31, 2022)

Category
Securities

Valuation
TechniqueSignificant
Unobservable
Input

Range of
Input

Weighted
Average of
Input

Corporate bonds
Privateplacement
bonds
Other

Present
value
technique

Discount
rates

0.2%~1.7%

0.5%

Stock
acquisitionrights

Optionvaluation
model

Probabilityof listing

50.0%

50.0%

92

(2) Reconciliation between opening and closing balances and loss/gain on valuation recognized in profit/loss (March 31, 2022)
Millions of Yen
Profit/Loss or Other
Comprehensive
IncomeBalance at
Beginning ofYear

Recorded in
Profit/Loss (*1)

Recorded in
Other
Comprehensive
Income(*2)

Net
Purchases,
Sales,
Issues, andSettlements¥(53)¥1,194¥31,430(381)

99,704

108,028

(0)

25

25

Transfers into
Level 3
Fair Value

Transfers fromLevel 3
Fair Value

Balance at
End ofYear

Loss/Gain on
Valuation of
Financial
Assets/Liabilities
Recorded in
Loss/Profit andHeld on theConsolidated
Balance Sheet
Date

Securities
Available-for-sale securities
Private placement bonds
Securitized products(beneficial interests in trust
Stock acquisition rights¥30,289
8,709

¥(3)

Thousands of U.S Dollars
Profit/Loss or Other
Comprehensive
IncomeBalance at
Beginning ofYear

Recorded in
Profit/Loss (*1)

Recorded in
Other
Comprehensive
Income(*2)

Net
Purchases,
Sales,
Issues andSettlements$(433)$9,759$256,809(3,120)814,646

882,659

(3)

209

205

Transfers into
Level 3
Fair Value

Transfers fromLevel 3
Fair Value

Balance at
End ofYear

Loss/Gain on
Valuation of
Financial
Assets/Liabilities
Recorded in
Loss/Profit andHeld on theConsolidated
Balance Sheet
Date

Securities
Available-for-sale securities
Private placement bonds
Securitized products(beneficial interests in trust
Stock acquisition rights$247,483
71,158$(25)(*1) Included in “Interest Income” on the consolidated statement of income.
(*2) Included in “Valuation difference on available-for-sale securities” in “Other Comprehensive Income (Loss)” on the consolidated statement of comprehensive income.
(3) Description of process of fair value measurement
The Group has established policies and procedures for fair value measurement in middle departments and back-end departments. Once a fair value ismeasured, verification is performed about the validity of the valuation techniques and inputs used in the measurement of the fair value and theappropriateness of the classification of the fair value.
In calculating fair values, valuation models are used that most appropriatelyreflect the nature, characteristics, and risks of the individual assets.
Furthermore, when quoted prices obtained from a third party are used, thevalidity of these prices are verified by such appropriate methods as checking
the valuation techniques and inputs being used and/or comparing the resulting fair values with fair values of similar financial instruments.
(4) Description of the impact of changes in significant unobservable inputs onfair values
The significant unobservable inputs used in the measurement of fair values of
securitized products (beneficial interests in trust) are probability of default, loss
given default, and prepayment rate. Significant increase (or decrease) in probability of default or loss given default will result in significant decrease (orincrease) in fair values, whereas significant change in prepayment rate will
result in significant decrease (or increase) in fair values, depending on the
structure of the financial instrument.
The significant unobservable input used in the measurement of fair values ofprivate placement bonds is discount rate. The discount rate is calculated
according to the internal rating of the issuer, the remaining term, and thecoverage ratio. Significant increase (decrease) in discount rate will result insignificant decrease (increase) in fair values.
Probability of listing is the significant unobservable input used to calculate
the fair value of share acquisition rights. A significant increase (decrease) in
probability of listing will result in a significant increase (decrease) in fair value.

93

Note 3: Stocks and others without quoted market prices and investments in partnerships are measured as follows in the consolidated balance sheet. They are notincluded in “Available-for-sale securities” in the financial statements disclosed
under the heading, “Fair values of financial instruments and a breakdown bylevel of the fair values of financial instruments” above.

2022¥6,874

Thousands ofU.S Dollars
2021
2022
¥6,623$54,12167,641

46,671Millions of Yen
Unlisted stocks (*1)(*2)
Investments in partnerships andothers (*3)

381,333(*1) Unlisted stocks are not included in the disclosure of fair value in accordance with Paragraph 5 of the “Implementation Guidance on Disclosuresabout Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March
31, 2020).
(*2) The impairment losses on unlisted stocks for the years ended March 31,
2022 and 2021, are ¥123 million ($1,012 thousand) and ¥4 million.
(*3) Investments in partnerships and others principally include investment partnerships. These are not included in the disclosure of fair value inaccordance with Paragraph 27 of the “Implementation Guidance on
Disclosures about Fair Value of Financial Instruments.”
These investments in partnerships and others include the investments in
non-consolidated subsidiaries as of March 31, 2022 and 2021, of ¥2,572
million ($21,022 thousand) and ¥2,845 million, among others.

Note 4: Maturity analysis for financial assets and securities with contractual maturities

March 31, 2022

Due from banks
Call loans and bills bought
Securities:
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted (*1)(*2)
Total

March 31, 2021

Due from banks
Call loans and bills bought
Securities:
Held-to-maturity
Available-for-saleLoans and bills discounted
Total

March 31, 2022

Due from banks
Call loans and bills bought
Securities:
Held-to-maturity securities
Available-for-sale securities
Loans and bills discounted (*1)(*2)
Total

Due in one year
or less

Due after one year
through three years¥2,193,926
71,38275,5051,000
74,5052,044,804¥4,385,618¥166,411
2,000
164,411
1,634,419¥1,800,830

Due in One Yearor Less

Millions of yen
Due after three years Due after five years Due after seven years
through five years
through seven years
through ten years¥289,437
28,860260,577
1,406,278¥1,695,715¥57,125
3,962
53,162
823,514¥880,639¥525,765
200
525,565
982,542¥1,508,308

Millions of Yen
Due after One Year Due after Three Years Due after Five Years Due after Seven Years
through Three Years through Five Years through Seven Years through Ten Years¥2,017,064
150,926
44,707
1,804
42,903
1,984,236¥4,196,935¥235,246
2,000
233,246
1,526,503¥1,761,749

Due in one year
or less

Due after one year
through three years$17,925,704
583,236
616,925
8,170
608,754
16,707,280$35,833,146$1,359,679
16,341
1,343,338
13,354,190$14,713,870¥ 186,683
2,700
183,983
1,394,020¥1,580,703¥ 53,180
3,000
50,180836,058¥889,239¥122,981
3,100
119,881
1,061,516¥1,184,497

Thousands of U.S. Dollars
Due after three years Due after five years Due after seven years
through five years
through seven years
through ten years$2,364,876
235,8032,129,072
11,490,139$13,855,015$466,751
32,378434,3726,728,606$7,195,357$4,295,822
1,634
4,294,188
8,027,963$12,323,786

Due after
ten years¥712,335
43,581
668,754
2,417,697¥3,130,032

Due after
Ten Years¥765,691
56,310709,3812,296,324¥3,062,015

Due after
ten years$5,820,212
356,085
5,464,127
19,754,040$25,574,253(*1) The amounts of loans and bills discounted without due dates, which have been excluded as of March 31, 2022 and 2021, are ¥106,591 million ($870,916 thousand) and¥113,211 million.
(*2) The amounts of loans and bills discounted for “possible bankruptcy,”“virtual bankruptcy,” and “legal bankruptcy,” excluding those without due dates, which have been excluded
as of March 31, 2022 and 2021, are ¥86,350 million ($705,539 thousand) and 91,251 million.

Note 5: Maturity analysis for borrowed money and other interest-bearing debt

March 31, 2022

Deposits
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Total

March 31, 2021

Deposits
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Total

Millions of yen
Due after three years Due after five years Due after seven years
through five years
through seven years
through ten years

Due in one year
or less

Due after one year
through three years¥11,198,874
177,528
296,764
72,701
947,810¥12,693,678¥324,857¥26,642¥2,656¥4,184

221,805¥546,662

193,598¥220,241

1,550¥4,207125¥4,309

Due in One Yearor Less

Millions of Yen
Due after One Year Due after Three Years Due after Five Years Due after Seven Years
through Three Years through Five Years through Seven Years through Ten Years¥10,783,601
102,210
357,952
143,311
667,008¥12,054,084¥327,113¥28,598¥2,133¥4,458

212,997¥540,111

8,737¥37,336

1,484¥3,618287¥4,745

March 31, 2022

Due in one year
or less

Due after one year
through three years

Deposits
Call money and bills soldPayables under repurchase agreements
Payables under securities lending transactions
Borrowed money
Total$91,501,546
1,450,513
2,424,740
594,016
7,744,180$103,714,997$2,654,280$217,686$21,704$34,190

1,812,283$4,466,564

1,581,817$1,799,504

12,669$34,374

1,021$35,211

Thousands of U.S. Dollars
Due after three years Due after five years Due after seven years
through five years
through seven years
through ten years

Due after
ten years

Due after
Ten Years

Due after
ten years

Note: Demand deposits are included in “Due in one year or less.”

9433. DERIVATIVES
Qualitative information on derivatives, such as the nature and the purpose of derivative financial instruments, is included in Note 31.
Derivative transactions to which hedge accounting is not applied at
March 31, 2022 and 2021, consisted of the following

March 31, 2022

Millions of Yen
Contract
Contract
or Notional Amount Due
Amount after One Year Fair Value

Listed:Bond futures
Over the counter:
Interest rate swaps
Currency swaps
Forward contracts
Currency options
Other¥507,739
80,270611,332
279,638
4,665¥1,105
84
5,382
(51)
28

¥1,105
84
5,382
2,707
28

March 31, 2021

Millions of Yen
Contract
Contract
or Notional Amount Due
Amount after One Year Fair Value

Unrealized
Gains(Losses)

Listed:Bond futures
Over the counter:
Interest rate swaps
Currency swaps
Forward contracts
Currency options
Other¥461,551
63,018219,235
234,7874,625¥    603
353,958
81,281
518,797
187,736
4,981¥254,553
74,105
195,751
146,021
4,711

Unrealized
Gains(Losses)¥   (1)¥   (1)

1,174
110
3,657
0
30

1,174
110
3,657
2,257
30

March 31, 2021

Principled treatment:Interest rate swaps
Currency swaps
Forward contracts
Shares forward
contract sale

March 31, 2022

Listed:Bond futures
Over the counter:
Interest rate swaps
Currency swaps
Forward contracts
Currency options
Other$4,148,538 $3,771,151
655,859
514,901
4,994,958 1,791,285
2,284,811 1,918,352
38,12337,796$9,031686
43,977(417)
230$9,031686
43,977
22,124230

Note: Derivatives included in the table above were measured at fair value, and theunrealized gains and losses were recognized in income.

Derivative transactions to which hedge accounting is applied at March
31, 2022 and 2021, consisted of the following:

March 31, 2022

Hedged Item

Millions of Yen
Contract
Contract Amount Due
Amount after One Year Fair Value

Principled treatment:Interest rate swaps
Currency swaps
Forward contracts
Shares forward
contract sale

Securities classified
as available-for- ¥ 92,821
sale and deposits
Loans, deposits,
and securities in 141,581
foreign currencies
Loans, deposits,
17,449and securities inforeign currencies
Shares of affiliatedcompanies accounted
for by the equity method

Special hedging treatment:Interest rate swaps
Loans

95

63,507¥72,821¥   527

97,786(15,165)

52,960

Securities classified
as available-for- ¥120,953
sale and deposits
Loans, deposits,
and securities in 108,919
foreign currencies
Loans, deposits,
15,941and securities inforeign currencies
Shares of affiliated8,336
companies accounted
for by the equity method

Special hedging treatment:Interest rate swaps
Loans

March 31, 2022

68,230¥120,731¥ 1,726

93,020(3,159)(9)(857)

43,930Thousands of U.S. Dollars
Contract
Contract Amount Due
Hedged Item Amount after One Year Fair Value

Principled treatment:Interest rate swaps
Currency swaps
Forward contracts

Thousands of U.S. Dollars
Unrealized
Contract
Contract
Gains
or Notional Amount Due(Losses)Amount after One Year Fair Value

Hedged Item

Millions of Yen
Contract
Contract Amount Due
Amount after One Year Fair Value

Shares forward
contract sale

Securities classified
as available-for- $ 758,403
sale and deposits
Loans, deposits,
and securities in 1,156,807
foreign currencies
Loans, deposits,
142,572
and securities inforeign currencies
Shares of affiliatedcompanies accounted
for by the equity method

Special hedging treatment:Interest rate swaps
Loans

518,892$594,991$   4,306

798,973(123,914)
1

432,715

Notes: 1. Principally, deferral hedge accounting is applied as stipulated in JICPA
Industry Committee Practical Guideline No. 24, October 8, 2020, and No.
25, October 8, 2020.
2. The fair value of interest rate swaps with special hedging treatment is omitted as interest rate swaps and loans are treated unitary and their values areincluded in the fair value of loans and bills discounted in Note 31.

The fair values of listed transactions represent the closing price on theTokyo Financial Exchange and other exchanges at the consolidatedbalance sheet date. The fair values of over-the-counter transactions
are calculated mainly using the discounted present values or
option-pricing models.
The contract or notional amounts of derivatives shown in the abovetable do not represent the amounts exchanged by the parties and do
not measure the Bank’s exposure to credit or market risk.

34. RELATED-PARTY TRANSACTIONS
Related-party transactions for the years ended March 31, 2022 and
2021, were as follows:
Related-Party Transactions with the Bank
Description of
Category
Transactions
Close relative of a director
Loans
Makizo Iio
of Shizuoka Bank
Kiyokawa Building Close relative of a director
Loans
Eiichiro Kiyokawa of Shizuoka Bank
Company in which majority
Park View Asset voting rights are held by
LoansCo., Ltd.
director or close relative ofa director of Shizuoka Bank
Company in which majority
Kiyokawa
voting rights are held by
Loans
Corporation
director or close relative ofa director of Shizuoka Bank
Company in which majority
Kiyokawa Realvoting rights are held by
Loans
Estate Co., Ltd. director or close relative ofa director of Shizuoka Bank
Related Party

Thousands
Millionsof U.S.
of YenDollars2022 2021
2022

¥207
¥162 ¥161$1,329¥498 ¥505$4,073¥206 ¥207$1,687¥1,170 ¥1,300$9,559Note: 1. Related-party transactions stated above are processed under equal conditions to transactions with general customers.
2. Amounts of loans are balances at the end of the fiscal year.
3. The balance at the end of the year is not reported for Mr.Makizo Iio due tohis passing away during the fiscal year.
4. As for Park View Asset Co., Ltd., the relevant officer left office on June 18,
2021, due to which the balance at the end of the month of his departure isreported instead of the balance at the end of the year.

35. OTHER COMPREHENSIVE INCOME (LOSS)
The components of other comprehensive income (loss) for the years
ended March 31, 2022 and 2021, were as follows:
Millions of Yen
2022
2021

Unrealized gain on available-forsale securities
Gains arising during the year
Reclassification adjustments toprofit and loss
Amount before income tax effect
Income tax effect
Total
Deferred gains on derivatives
under hedge accounting
Gains arising during the year
Reclassification adjustments toprofit and loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation
adjustments
Gains arising during the year
Reclassification adjustments toprofit and loss
Amount before income tax effect
Income tax effect
Total
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments toprofit and loss
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive
income in affiliated companies:
Gains arising during the year
Reclassification adjustments toprofit and loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive income¥(66,519) ¥122,835
13,672Thousands of
U.S. Dollars2022$(543,502)(13,833)

111,711(52,846) 109,001
15,413(32,026)¥(37,433) ¥ 76,975(431,791)
125,938$(305,853)¥(1,446) ¥(3,108)$(11,817)

1,917

2,393

15,666

471
(715)
(140)
213
¥330 ¥(501)3,848(1,149)$2,699¥4,270$34,889¥1,804(1,647)(13,464)

2,622
1,804
(74)
259
¥2,548 ¥ 2,064

21,424(605)$20,819¥(278) ¥3,261$(2,275)

558

366

(233)
3,820
70
(1,141)¥(163) ¥2,678

44(1,909)575$(1,334)

¥295

¥196

$2,418

295

196

2,418

¥295 ¥196¥(34,422) ¥81,414

2,418$(281,250)

36. NET INCOME PER SHARE
Basic net income per share (EPS) for the years ended March 31, 2022
and 2021, is computed as follows:
Millions of Yen
Year ended
March 31, 2022

Yen

U.S. Dollars

Net income attributable Weighted-Average
to Owners of the Parent
SharesBasic EPS:
Net income available tocommon shareholders ¥41,635
Effect of dilutive securities:
Interest expenses(excluding tax amount)
Stock options
Convertible bonds withstock acquisition rights
Diluted EPS:
Net income for computation ¥41,635

Millions of Yen
Year ended
March 31, 2021

Thousands ofShares568,191

EPS¥73.27$0.598590,166¥70.54$0.576

Thousands ofSharesYen

U.S. Dollars

354
21,620Net income attributable Weighted-Average
to Owners of the Parent
SharesBasic EPS:
Net income available tocommon shareholders ¥43,638
Effect of dilutive securities:
Interest expenses
48(excluding tax amount)
Stock options
Convertible bonds withstock acquisition rights
Diluted EPS:
Net income for computation ¥43,686

574,004

EPS¥76.02$0.686¥73.31$0.662376
21,482595,863

37. SUBSEQUENT EVENTS
1. Appropriation of Retained Earnings
The following appropriation of retained earnings was authorized at theordinary general shareholders’ meeting held on June 17, 2022:
Cash dividends,¥12.50 ($0.10) per share
Total

Millions of Yen

Thousands of
U.S. Dollars¥7,615¥7,615$62,227$62,227

2. Transition to a Holding Company Structure through a Sole Share
Transfer
The Shizuoka Bank, Ltd. (the “Bank”) adopted a resolution at its
Board of Directors’ meeting held this day to transform the Bank to aholding company structure, in which the holding company Shizuoka
Financial Group, Inc. (the “Holding Company”) will be the wholly
owned parent company, by means of the Bank’s sole share transfer(the “Share Transfer”) effective as of October 3, 2022 (estimate) which
has been approved at the Annual General Meeting of Shareholders
scheduled for June 17, 2022, and has been approved by all relevant
regulatory authorities.
1. Purpose of the Share Transfer
The environment surrounding financial institutions is changing significantly, such as changes in demographics and decrease in demand
for funds caused by low birth rate and aging population, and diversification of individual lifestyles and values. In recent years, the roles offinancial institutions have expanded as companies are expected tohelp resolve various social challenges, such as environmental issues
and the progress of social inequality.
In light of these changes in the business environment, the Group hasenhanced its financial function to solve customers’ challenges while
increasing its combined strength as a financial group, as well as
developing new business fields and working on projects, such as
expanding businesses in the Tokyo Metropolitan area and collaborating with entities from outside the Group’s industry.
While the Group has pursued sustainable growth by always keeping
in mind a sound yet innovative management believes that the Group
96

must respond even more appropriately in the future to the movement
towards deregulation in banking services and to the acceleratingchanges in the business environment.
Based on these circumstances, the Bank has decided that it needs
to transform to a holding company structure in order to build a resilient management structure, which will enable the Group to further
contribute to the well-being of all stakeholders, including the community, customers, employees, and shareholders, and to continue its
sustainable growth.
By transforming to a holding company structure, the Bank intends,
from a long-term perspective, to expand into new business fields thatwill contribute to regional growth and to further expand the existinglines of business and the customer base. The Bank is going toincrease the Group’s combined strength as a problem-solving corporate group by further enhancing the group management that the Bankhas worked on thus far and by increasing the presence of each groupcompany, through balancing between unifying force (i.e., cooperation)and centrifugal force (i.e., independence and autonomy) under theHolding Company.
The Group also plans transformation from a bank-dependent business model, by developing an environment where employees, whowill actually work on those measures, will be even more proud andsatisfied with their work than before, and by cultivating an organizational culture where new ideas and innovations will be generated,through promoting diversified management.
In addition, by making the Holding Company a company with audit
and supervisory committee, the Bank intends to sophisticate the corporate governance from both offensive and defensive perspectives inorder to make the governance structure flexible and robust in line withthe expectations of stakeholders, and to create a highly objective andtransparent management structure.
Please note that, since the Bank will become a wholly owned subsidiary of the Holding Company as a result of the Share Transfer, theBank’s shares will be delisted. The Bank’s shareholders will receive
shares in the Holding Company in consideration of the Bank’s shares.
It is planned that the Holding Company will submit an application forlisting its shares on the Prime Market of Tokyo Stock Exchange, Inc.
(the “Tokyo Stock Exchange”). The listing date is scheduled for October 3, 2022, which is the date of registration of incorporation of theHolding Company (i.e., the effective date of the Share Transfer),
although this depends on the examination by the Tokyo Stock
Exchange. Therefore, it is the Bank’s policy to substantially maintainthe listing of its shares.
2. Summary of the Share Transfer(1) Schedule for the Share Transfer
Record date for the annual general
meeting of shareholders
Board of Directors’ meeting to approve
the Share Transfer plan
Annual general meeting of shareholders
to approve the share transfer plan
Date of delisting of the Bank’s shares
Date of registration of incorporation of theHolding Company (effective date)
Date of listing of the Holding
Company’s shares

Thursday, March 31, 2022
Tuesday, May 10, 2022
Friday, June 17, 2022
Thursday, September 29, 2022
(estimate)
Monday, October 3, 2022
(estimate)
Monday, October 3, 2022
(estimate)

The above schedule is subject to change due to necessity in thecourse of procedures for the Share Transfer.
(2) Method of the Share Transfer
The Share Transfer will take place by means of sole-share transfer
in which the Bank and the Holding Company are the wholly-owned
subsidiary in the Share Transfer and the wholly-owning parent
company in the Share Transfer, respectively.

97(3) Details of the allocation in the Share Transfer (share transfer ratio)
Company

Shizuoka Financial Group, Inc.
(wholly-owning parent company
in the Share Transfer)

The Shizuoka Bank, Ltd.
(wholly-owned subsidiary in
the Share Transfer)

Share transfer
ratio

1

1

Notes: 1.	Share transfer ratio		 One share of the proposed Holding Company’s common stock will be allotted and issued per share of the Bank’s common stock held by its
shareholders immediately before the Holding Company’s acquisition of allissued shares of the Bank as a result of the Share Transfer (the “BaseTime”).
2. Share unit number
		 The Holding Company will adopt a share unit system in which the number ofshares constituting one share unit is one hundred (100).
3. Basis for calculation of details of the allocation in the share transfer
		 (i) Basis of calculation of the share transfer ratio			In the Share Transfer, the single Holding Company will be incorporated as
the wholly-owning parent company through a share transfer solely by the
Bank, with no changes in shareholder composition between the Bank andthe Holding Company at the time of the Share Transfer. For this reason
and for the primary purpose of protecting the Bank’s shareholders fromany disadvantages, one share of the Holding Company’s common stock
will be allotted and issued per share of the Bank’s common stock held by
the Bank’s shareholders.
		 (ii) Results, method, and basis of calculation by third-party institution			No calculation of the share transfer ratio has been undertaken by a thirdparty institution, since the Share Transfer involves a share transfer solely
by the Bank as described in (i) above.
4. Number of new shares to be issued upon the Share Transfer (estimate)		595,129,069 shares of common stock (estimate)
		 However, the above number of new shares to be issued by the Holding
Company will change if the total number of issued shares of the Bankchanges before the Share Transfer becomes effective. Similarly, if any of theBank’s shareholders exercises the right to demand purchase of shares or if
otherwise, the number of the Bank’s treasury shares as of March 31, 2022,
changes before the Base Time, then the number of new shares to be issued
by the Holding Company may change. With respect to the treasury stock
held by the Bank at the time when the Share Transfer becomes effective,
one share of the Holding Company’s common stock will be allotted andissued per share of that treasury stock. This will result in the Bank temporarily holding shares of the Holding Company’s common stock. These shares
will be promptly disposed of by the Bank in accordance with the provisionsof applicable laws and regulations.

(4) Matters concerning share acquisition rights and bonds with shareacquisition rights related to the Share Transfer
With respect to share acquisition rights (including those attached
to bonds with share acquisition rights) issued by the Bank, eachholder of share acquisition rights of the Bank will be issued andallotted share acquisition rights of the Holding Company on equalterms with, and in the same number as, the share acquisition rightsof the Bank held by the holder.
The Holding Company will succeed to the obligations associatedwith bonds with share acquisition rights issued by the Bank. The
Bank will provide guarantee for those obligations.
(5) The Holding Company’s new listing
The Bank plans to submit an application for new listing (technicallisting) on the Prime Market of the Tokyo Stock Exchange of sharesof the Holding Company to be newly incorporated, with the date oflisting scheduled for October 3, 2022. Since the Bank will become
a wholly-owned subsidiary of the Holding Company as a result of
the Share Transfer, the Bank will be delisted on the Prime Marketof the Tokyo Stock Exchange on September 29, 2022, prior to theHolding Company’s listing.
The date of delisting is subject to change as it will be determined
pursuant to the applicable rules of the Tokyo Stock Exchange.

3. Overview of the wholly-owning parent company incorporated through a share transfer after the Share Transfer (estimate)(1) Name(2) Location(3) Representatives and officers
scheduled to take office(4) Description of business(5) Capital(6) Fiscal year end

Shizuoka Financial Group, Inc.
10, Gofukucho 1 -choume, Aoi-ku, Shizuoka-shi
Chairman
Katsunori Nakanishi(Representative Director)
President & CEO
Hisashi Shibata(Representative Director)
Director
Minoru Yagi
Director

Yutaka Fukushima

Director
Director
Director (Audit & Supervisory
Committee Member)
Director (Audit & Supervisory
Committee Member)
Director (Audit & Supervisory
Committee Member)
Director (Audit & Supervisory
Committee Member)

Kumi Fujisawa
Kazutoshi Inano
Koichi Kiyokawa
Motoshige Ito(Currently Chairman & CEO of The Shizuoka Bank)(Currently President & COO of The Shizuoka Bank)(Currently Deputy President & CFO of The Shizuoka Bank)(Currently Director & Senior Managing Executive Officer of The
Shizuoka Bank)(Currently Outside Director of The Shizuoka Bank)(Currently Outside Director of The Shizuoka Bank)(Currently Director & Senior Executive Officer of The Shizuoka
Bank)(Currently Outside Director of The Shizuoka Bank)

Kazuto Tsubouchi(Currently Outside Director of The Shizuoka Bank)

Naomi Ushio(Currently Outside Audit & Supervisory Board Member of The
Shizuoka Bank)

Note 1: Of the directors, Ms. Kumi Fujisawa and Mr. Kazutoshi Inano and of the directors (Audit & Supervisory Committee members), Mr.
Motoshige Ito, Mr. Kazuto Tsubouchi, and Ms. Naomi Ushio are outside directors as defined in Article 2, item (15) of the Companies Act.
Note 2: With regard to Ms. Kumi Fujisawa, the director, her name in the domiciliary register is Kumi Tsunoda, whereas the name “KumiFujisawa” is used for professional purposes only.
i.	Business administration of the Bank and of companies whose ownership the Company is permitted by the Banking Act toacquireii.	Any and all businesses incidental or relating to the business set forth in the preceding itemiii.	Any other businesses which a bank holding company is permitted by the Banking Act to engage in other than those set forthin the preceding two items¥90,000 million ($735,354 thousand)March 31

4. Overview of accounting treatment applied to the Share Transfer
As the share transfer corresponds to “transactions under common control” for corporate accounting purposes, there will be no impact on profit or
loss.

98

Key Consolidated Financial Indicators
Summary of Profits (Losses)
Millions of Yen
Years ended March 31

Net interest income
Net fees and commissions
Net trading income
Net other operating income
General and administrative expenses
Net other ordinary income
Ordinary profits
Income before income taxes
Income taxes:
Current
Deferred
Net income
Net income attributable to noncontrolling interests
Net income attributable to owners of the parent
Comprehensive income

2022

2021

Increase(Decrease)

Percentage
Change¥122,224
31,2603,451(5,505)97,629418
54,21958,801¥113,182
32,2083,553
7,041
93,715
1,079
63,34960,691¥9,041(947)(101)(12,546)
3,913
(661)
(9,130)(1,890)

7.9%
(2.9)
(2.8)
(178.1)
4.1(61.2)(14.4)(3.1)

15,7301,347
41,722
87
41,635
7,300

21,209(4,240)43,722
83
43,638125,136(5,479)5,588(1,999)3(2,002)(117,836)(25.8)(131.7)
(4.5)
3.9
(4.5)
(94.1)Breakdown of Net Interest Margin
Billions of Yen
Year ended March 312022¥128.1
13,150.2
0.97
5.9
12,935.8
0.04
122.2

Interest income
Average interest-earning assets
Average interest rate of interest-earning assets (%)
Interest expense (Note)
Average interest-bearing liabilities
Average interest rate of interest-bearing liabilities (%)
Net interest income
Note: Interest expense here excludes interest paid in relation to investment in money held in trust.

Net Other Operating Income
Millions of Yen
Years ended March 31

Gains on foreign exchange transactions
Gains/losses on government bonds
Gains on sales
Losses on sales
Gains/losses on derivative transactions
Proceeds from derivative transactions
Expenses for derivative products
OthersGains/losses on other business
Other operating income
Other operating expenses

99

2022

2021

¥3,822(9,648)18,960(28,609)(49)¥ 1,647
4,782
10,245(5,463)
243
243

(49)
370
(5,505)
23,153(28,659)367
7,041
12,504(5,463)

Increase(Decrease)¥2,174(14,430)
8,714(23,145)
(293)
(243)
(49)
2
(12,546)
10,648(23,195)

Loans Outstanding by Type of Borrower
Billions of Yen, Percentage of Shares
2022
2021

March 31

Domestic branches:
Manufacturing
Agriculture and forestry
Fishery
Mining and quarrying
Construction
Utilities
Telecommunications
Transportation and mail service
Wholesale and retailing
Finance and insurance
Real estate, lease, and rental
Medical, welfare, lodging, and other services
Local governments
Other
Subtotal
Overseas branches and offshore accounts:
Governments and official institutions
Banks and other financial institutions
Other
Subtotal
Total¥1,545.2
9.0
13.4
13.5
261.4
169.1
51.1
317.6
839.4
529.5
2,138.8594.2
112.0
2,686.7
9,281.4

16.65%
0.10
0.15
0.15
2.82
1.82
0.55
3.42
9.04
5.70
23.04
6.40
1.21
28.95
100.00¥1,557.2
9.1
8.9
13.9
256.6
146.3
64.5
318.4
816.6
505.9
2,081.4603.3
116.8
2,577.3
9,076.9

17.16%
0.10
0.10
0.15
2.83
1.61
0.71
3.51
9.00
5.57
22.93
6.65
1.29
28.39
100.00

4.4
14.8
201.5
220.7
¥9,502.1

2.01
6.72
91.27
100.00

4.6
11.1
210.4
226.2
¥9,303.1

2.04
4.91
93.05
100.00Financial Rehabilitation Law Disclosure Claims
Millions of Yen
March 312022

¥ 17,425
0.18
68,961
0.71
353
0.00
13,7770.14
100,517
1.04
84,368
83.93

Claims provable in rehabilitation from bankruptcy and equivalents% of total credit
Doubtful claims% of total credit
Loans past due for three months or more
% of total credit
Restructured loans% of total credit
Financial Rehabilitation Law Disclosure Claims total% of total credit
Value covered with collateral, guarantees, etc.
Cover ratio(%)

2021¥ 21,972
0.23
69,396
0.73
776
0.00
13,091
0.13
105,237
1.11
89,055
84.62

Increase(Decrease)¥(4,546)(0.05)(435)(0.02)(423)(0.00)
685
0(4,719)(0.07)(4,686)(0.68)

Notes: 1.	Financial Rehabilitation Law Disclosure Claims are based on Article 19-2 of the Ordinance for Endorsement of the Banking Act. Because these loans aredisclosed regardless of the presence or absence of collateral, guarantees, or other coverage, the figures shown do not represent unrecoverable amounts.
2.	Loans past due for three months or more include loans for which payments of principal or interest are delinquent by three months or more, as calculated
from the day following the contracted payment date, but do not include loans to bankrupt borrowers or past-due loans.
3.	Restructured loans include loans for which certain conditions have been relaxed for the benefit of the borrower (through such means as the reduction or
elimination of interest payments, the deferral of principal repayments, or the relinquishment of a portion of liabilities) with the goal of supporting the recovery
of borrowers that have fallen into financial difficulty and thereby promoting the recovery of the loan.
4.	Value covered with collateral, guarantees, etc., includes provisions in the specific reserve for possible loan losses. The covered value was stated on a pos­sible disposal basis.

Allowance for Loan Losses
Millions of Yen
2022
2021

March 31

¥29,352
24,029¥53,382¥ [444]

General allowance for loan losses
Specific allowance for loan losses
Total[Loans on written-off claims for the year]¥26,806
27,094¥53,901¥ [521]

Financial Index
Consolidated
Years ended March 31

Per share (Yen):
Net income
Net assets
Cash dividends

Dividend payout ratio (%)
Return on equity (%) (Note)
Price-earnings ratio (%)

Nonconsolidated

2022

2021

Increase(Decrease)¥73.27
1,925.98
26.00¥   76.02
1,922.55
25.00¥(2.75)
3.43
1.00

3.80
11.77

4.16
11.44

(0.36)
0.33

2022

2021

Increase(Decrease)¥63.57
1,781.08
26.00
40.89
3.55
13.57

¥   61.82
1,792.22
25.00
40.43
3.62
14.07

¥1.75(11.14)1.00
0.46(0.07)(0.50)

Note: The amount of net income returned as a percentage of the average balance of shareholders’ equity.

100Capital Adequacy Ratio
March 31

1. Total capital ratio (%)
2. Tier 1 ratio (%)
3. Common equity Tier 1 ratio (%)
4. Total capital
5. Tier 1 capital
6. Common equity Tier 1 capital
7. Total risk-weighted assets
8. Total capital requirements
Leverage ratio (%)

Billions of Yen
Nonconsolidated
Consolidated
2022
2021
2022
2021

16.08
16.08
16.08
965.3
965.3
965.3
6,001.2
480.0
7.37

16.56
16.56
16.56
990.4
990.4
990.4
5,979.6
478.3
7.94

14.33
14.33
14.33
872.8
872.8
872.8
6,087.8
487.0
6.70

14.45
14.45
14.45
905.5
905.5
905.5
6,265.7
501.2
7.27

Notes: 1.	Capital ratios were calculated both on a consolidated and nonconsolidated bases conforming to the Ministry of Finance guidelines, based on Article 14-2 ofthe Banking Act.
2.	The Group adopted the Foundation Internal Rating-Based Approach to calculate credit risk assets and the Standardized Approach for operational risk, andapplies the Market Risk Capital Regulations.
3.	In addition, the leverage ratio, which was a complementary indicator of the equity ratio, was calculated both on consolidated and nonconsolidated bases,
with the formula shown on the criteria, the 11th notice by Financial Services Agency in 2019, to judge the soundness of the leverage as a complementary
indicator of the criteria on whether or not the adequacy of equity capital of the Bank is appropriate in light of the circumstances, such as the assets ownedby the Bank, according to the provision of the Article 14-2 of Banking Act.

101

The Shizuoka Bank
Corporate Data
HEAD OFFICE
10, Gofukucho 1-chome, Aoi-ku,
Shizuoka-shi, Shizuoka 420-8761, JapanHEADQUARTERS
2-1, Kusanagi-Kita, Shimizu-ku,
Shizuoka-shi, Shizuoka 424-8677, Japan
Phone: (81) 54-345-5411
URL: https://www.shizuokabank.co.jp/
NUMBER OF EMPLOYEES(As of March 31, 2022)

2,810

INTERNATIONAL BUSINESS DEPT.

DOMESTIC NETWORKINTERNATIONAL BUSINESSPROMOTION GROUP
Phone: (81) 54-345-5411
Fax: (81) 54-344-0090(As of July 1, 2022)

OPERATIONS PLANNING DEPT.

(As of July 1, 2022)

TREASURY & INTERNATIONALOPERATIONS CENTER
Phone: (81) 54-345-5700
Fax: (81) 54-349-5501
SWIFT address: SHIZJPJTHead Office, 177 branches,
25 subbranches
OVERSEAS NETWORK
3 branches,
2 representative offices, and1 subsidiary

DATE OF ESTABLISHMENT
March 1, 1943

Overseas Service Network
Singapore Branch
10 Collyer Quay #09-08/10, Ocean
Financial Centre, Singapore
Phone: (65) 6225-3600
Fax: (65) 6225-9901

New York Branch
600 Lexington Ave,
4th Floor, New York,NY 10022, U.S.A.
Phone: (1) 212-319-6260
Fax: (1) 212-319-6270
Hong Kong Branch
Suite 1010, 10th Floor, Chater House,
8 Connaught Road, Central, Hong Kong
S.A.R.,
People’s Republic of China
Phone: (852) 2521-6547
Fax: (852) 2845-9257

Shanghai Representative Office
Room 1813, Shanghai
International Trade Centre,
2201 Yan-An Road (West),
Chang Ning Qu, Shanghai,
People’s Republic of China
Phone: (86) 21-6209-8115
Fax: (86) 21-6209-8116

Silicon Valley Representative Office
873 Santa Cruz Avenue, Suite 204,
Menlo Park, CA, USA
Shizuoka Bank (Europe) S.A.
Rue Jules Cockx 8-10, Box 9, 1160
Auderghem, Brussels, Belgium
Phone: (32) 2-646-0470
Fax: (32) 2-646-2462

Organization Chart
GeneralMeeting of
Shareholders

Board ofDirectors

Nomination &Remuneration
Committee

President

Advisory
Board

Domestic Branches

Eastern Area Business Unit

Domestic Branches

Western Area Business Unit

Domestic Branches

Metropolitan Business Unit

Domestic Branches(Excluding Tokyo Office)Business Promotion Dept.

Audit &
Supervisory
Board Members

Committee of
Administrative
Supervision

Central Area Business Unit

Solution Business Dept.
International Business Dept.
Banking
Division

Direct Business Promotion Dept.
Regional Revitalization Dept.
Operations Planning Dept.
Business Support Dept.
Treasury Dept.

Major
Committees

Tokyo OfficeInternational Business Promotion GroupNew York Branch
Hong Kong Branch
Singapore Branch
Treasury & International
Operations Planning Group
Treasury & International
Operations Center
Securities Investment Group
Fund & Foreign Exchange Group
Credit Investment Group

Corporate Planning Dept.
Corporate Administration Dept.

Corporate
CenterRisk Management Dept.
Compliance Dept.

Risk Management Group
Credit Risk Management GroupOperational Risk Management Group
Compliance Group
Anti-Money Laundering and Other Financial
Crimes Management OfficeSecretarial OfficeInternal
Audit Division

Audit Dept.
102

Board of Directors and Audit & Supervisory Board
Chairman & CEO*1

Director & Senior Managing Executive Officer

Audit & Supervisory Board Members

Katsunori Nakanishi

Yutaka Fukushima

President & COO*

Director & Senior Executive Officers

Hiroki Saito
Mitsuru Kobayashi
Yoshihiro Yamashita
Naomi Ushio
Isamu Nakamura

2

Hisashi Shibata

Koichi Kiyokawa

Deputy president & CFO*3

Directors

Minoru Yagi

*1CEO=Chief Executive Officer

Kumi Fujisawa
Motoshige Itoh
Kazuto Tsubouchi
Kazutoshi Inano*2COO=Chief Operating Officer*3CFO=Chief Financial Officer(As of July 1, 2022)

Investor Information
CAPITAL STOCK (As of March 31, 2022)
Common stock...................................

¥90,845 million

NUMBER OF SHARES (As of March 31, 2022)
Authorized.......................................... 2,414,596,000 shares
595,129,069 shares
Issued and outstanding......................
NUMBER OF SHAREHOLDERS (As of March 31, 2022)
22,304
STOCK LISTINGFirst Section of the Tokyo Stock Exchange
TRANSFER AGENT
Japan Securities Agents, Ltd.
STOCK PRICE, TURNOVER
Annual high/low stock price (five years)(Yen)
Years ended March 31

2018

2019

2020

2021

2022

High
Low

1,252
860

1,153
820

901
532

924
601

965
789

PRINCIPAL SHAREHOLDERS
The 10 largest shareholders of the Bank and their respective
shareholdings at March 31, 2022, were as follows:
Number of Percentage ofshares intotal shares
thousands outstanding

The Master Trust Bank of Japan, Ltd. (trust account)

88,36815.66%

Nippon Life Insurance Company

29,745

5.27

Meiji Yasuda Life Insurance Company

29,117

5.16

Custody Bank of Japan, Ltd. (trust account)

24,758

4.38

Sumitomo Life Insurance Company

13,0702.31

MUFJ Bank, Ltd.

11,884

2.10

The Dai-ichi Life Insurance Company, Limited

11,546

2.04

STATE STREET BANK WEST CLIENT - TREATY 505234

9,905

1.75

DAIICHI SANKYO COMPANY, LIMITED

9,000

1.59

SUZUKI MOTOR CORPORATION

7,000

1.24

234,39741.54%

Total

Notes: 1. In addition to the above, the Bank holds 30,980 thousand treasury shares.
2. Numbers of shares have been rounded down to the nearest 1,000 shares.
3. Percentages of total shares outstanding have been calculated after subtracting thenumber of treasury shares from the total number of shares outstanding, with results being
rounding down to two decimal places.

The Shizuoka Bank Group
Consolidated Subsidiaries
SHIZUGIN MANAGEMENT CONSULTING CO., LTD.
Corporate and financial managementadvisory services
Bill collection services
SHIZUGIN LEASE CO., LTD.
Leasing
SHIZUGIN IT SOLUTION CO., LTD
Computer system development and operation
SHIZUGIN CREDIT GUARANTY CO., LTD.
Guarantee of housing loans, etc.
SHIZUGIN DC CARD CO., LTD.
Credit card and guarantee of consumer loans

SHIZUOKA CAPITAL CO., LTD.
Public-offering assistance
Support for corporate rehabilitation
SHIZUGIN TM SECURITIES CO., LTD.
Securities
SHIZUGIN GENERAL SERVICE CO., LTD.
Fee-based job placement services
General administration
SHIZUGIN MORTGAGE SERVICE CO., LTD.
Appraisal of real estate for loan collateral
Operation center for loans

SHIZUGIN BUSINESS CREATE CO., LTD.
Operation center for remittance and billcollection
Part-time employee management
SHIZUGIN HEARTFUL CO., LTD.
Making, printing, and binding of documents
SHIZUOKA BANK (EUROPE) S.A.
Finance and securities-related services
SHIZUOKA LIQUIDITY RESERVE LIMITED
Purchases of monetary receivables

Affiliates under Equity Method
SHIZUGIN SAISON CARD CO., LTD.
Credit card and prepaid card
Guarantee of consumer loans*	Other than the above-mentioned Group companies, Monex Group, Inc. and Commons Asset Management, Inc. are equity-method affiliates of Shizuoka Bank.

103

SHIZUOKA BANK GROUP INTEGRATED REPORT 2022

2022
SHIZUOKA BANK GROUPINTEGRATED REPORTFor more detailed
information, pleaserefer to our website.

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