Annual Report
F i s c a ly e a re n d e d

M a r c h

2019

3 1 ,

2 0 1 9

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Hamamatsu Shinkin Bank (Hamashin) and Iwata Shinkin Bank (Iwashin) joined
forces and made a new start as HAMAMATSU IWATA SHINKIN BANK.
Aiming to realize a sustainable society, the Bank will provide even more diverse and higher quality services to local customers.

Our logo mark features a cheer flag flying strongly in the wind. The mark embraces our desire to support the dream of eachcustomer and send a tailwind toward a bright future.

About Hamamatsu Iwata Shinkin Bank
Established in 1950, Hamamatsu Iwata Shinkin Bank (the Bank)is a shinkin bank headquartered in Naka-ku of Hamamatsu Cityin Shizuoka Prefecture. With western Shizuoka Prefecture,
centering on Hamamatsu, as its business area, Hamamatsu
Iwata Shinkin Bank ranks number one in terms of the volume ofdeposits and loans among the nine shinkin banks within
Shizuoka Prefecture. Western Shizuoka Prefecture is situated in
the geographic center of Japan and is noted for its mild climate,
attributes that have helped spur the development of a diverse
range of industries in the region over many years. Renowned as

the birthplace of such leading companies as Suzuki Motor
Corporation, Yamaha Corporation and Honda Motor Co., Ltd.,
this region has witnessed the development of such industries
as the automobile, musical instruments and machinery andmetals industries, and has supported Japan’s economy as amanufacturing hub. Hamamatsu, the location of our Head
Office, is also home to numerous manufacturing plants and has
attracted a large number of expat workers from overseas
countries, which gives the city a rich international flavor.

Outline of Hamamatsu Iwata Shinkin Bank (As of March 31, 2019)
Head Office: 114-8 Motoshiro-cho, Naka-ku, Hamamatsu,
Shizuoka 430-0946, Japan
Established: April 10, 1950
Deposits:¥24,143 billion(including certificates of deposit)
Loans and Bills Discounted: ¥12,287 billion
Share Capital: ¥2.36 billion (123,030 members)
Number of Employees:
Hamamatsu Iwata Shinkin Bank (non-consolidated): 1,863
Hamamatsu Iwata Shinkin Bank Group (total): 1,975
Number of Branches:
92 branches and 77 external ATM corners

Business Region:
Shizuoka Prefecture
Hamamatsu City, Iwata City, Fukuroi City, Kosai City, Kakegawa
City, Omaezaki City, Kikugawa City, Makinohara City, Shimada
City (ex Kawane-cho is excluded), Shuchi-gun,
Yoshida-cho (Haibara-gun)
Aichi Prefecture
Toyohashi City, Kitashitara-gun(ex Shitara-cho is excluded)
Overseas Office:Bangkok Representative
OfficePrincipal Business Operations:
Deposits, loans, investments in marketable securities,
domestic exchange, foreign exchange, agency business
Kyoto
Shizuoka Prefecture

Tokyo
NagoyaHamamatsu
Osaka

1

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Management Philosophy
Hamamatsu Iwata Shinkin Bank Will Work toward the Realization of a Sustainable Society by Bringing Happiness to Customers andVitalizing the Region.

For customers
We walk side by side with customers toward abright future, regarding their happiness as our own
happiness.

For local communities

Management
Philosophy

We create new value and contribute tocommunity vitalization.

Social responsibilities(CSR, the SDGs and ESG)
We undertake fair and sound management andhelp to create a sustainable society.

For employees anddirectors
We continue to spur change and take on challenges
in seeking to become a vibrant organization.

What Is the Shinkin Bank?

Flowing Back Local Funds to Local Communities

The shinkin bank is a financial institution that operates within alimited area and serves local residents and small- and mediumsized enterprises in the area. Unlike a commercial bank, which
is a joint stock company, it is a cooperative financial institution
operating with capital contributions from its members andunder the fundamental principle of being not-for-profit and providing mutual cooperation and solidarity.
Working closely with local communities and acting first andforemost for the promotion of regional development is what theshinkin bank does and our raison d’etre.

We use funds entrusted to us from local customers to financefunding needs of other local customers for developing businesses or leading enriching lives. Going beyond just providing
financial services, we act as a community member and engage
in a broad range of activities for community vitalization.

Share Capital
Deposits¥2,364 million

Customers(Number of Members)

123,030¥2,414.3 billion

Employees and Directors

Other(Funds Management)
Securities¥957.6 billion

Hamamatsu Iwata Shinkin Bank (non-consolidated): 1,863
Hamamatsu Iwata Shinkin Bank Group (total): 1,975

Branches

92 (including 2 sub-branches)

Loans and Bills
Discounted¥1,228.7 billion

Provision ofServices

Business Region

Hamamatsu, Iwata, Fukuroi and other cities
in the western part of Shizuoka Prefecture andpart of Aichi Prefecture2

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Hamamatsu Iwata Shinkin Bank Corporate History
Hamashin Corporate History

Iwashin Corporate History

April 1950

Hamamatsu Credit Association established in accordancewith the Small- and Medium-Sized Enterprise Cooperatives
Act

April 1950

Iwata Credit Association established in accordance with the
Small- and Medium-Sized Enterprise Cooperatives Act

May 1950

May 1950

Head Office opened in Renjaku-cho (near the present
Renjaku post office) and business commenced

Head Office and Mitsuke Branch opened in Nakaizumi and
Mitsuke, respectively, in Iwata City

November 1951

November 1951

Reorganized as a shinkin bank and became Hamamatsu
Shinkin Bank along with the enforcement of the Shinkin Bank
Act

Reorganized as a shinkin bank and became Iwata Shinkin
Bank along with the enforcement of the Shinkin Bank Act

May 1955

Head Office newly constructed in front of Iwata Station

February 1963

Business region expanded to Toei-cho, Toyone-mura,Tomiyama-mura and Tsugu-mura in Kitashitara-gun, Aichi
Prefecture

August 1966

Business region expanded to Hamamatsu City and Kamimura in Hamana-gun

December 1952

Head Office moved to Tenma-cho (location of the current
Tenma-cho Branch)

March 1962

Established the Hamamatsu Shinkin Bank Basic Policies

October 1968

Computers introduced and offline processing begins

October 1969

Head Office moved to newly constructed building in
Motoshiro-cho

May 1968

Computers introduced and a centralized business processing
system established

December 1974

Deposits reach ¥100.0 billion

November 1971

Computer Center newly constructed

October 1977

Operation Center moved to newly constructed building

April 1975

Online deposit processing started among all branches

April 1978

Logo mark established

August 1979

Deposits reach ¥100.0 billion

October 1981

Third online system goes into operation and installation of
automated teller machines (ATMs) commenced

November 1986

Operation Center moved to newly constructed building

June 1995

Iwashin Consultation Center opened

January 1997

Held a corporate image (CI) presentation meeting / logo markestablished

June 1987

Hamashin Recreation Center completed

October 1989

Deposits reach ¥500.0 billion

April 1992

Hamashin Consultation Plaza opened in Nakazawa-cho as a
specialized consultation counter

September 1997

Young Business Managers’ Association Success 21
establishedMay 1997

Hamashin website established

January 1999

Handling of fund transfers over the Internet started

August 1998

Internet banking (home banking/firm banking) transactionscommenced

December 2001

Deposits reach ¥500.0 billion

December 1999

Deposits reach ¥1,000.0 billion

May 2003

Became a member of the Tokai Region Shinkin Joint
Business Center

April 2000

Marked the 50th anniversary of our establishment

April 2004

April 2006

Established the Hamamatsu Shinkin Bank Basic Principles(revised version of the Basic Policies established in 1962)

Operations using a mobile banking vehicle launched for the
first time among shinkin banks

May 2005

Held the First Iwashin Ai Ai Concert

July 2007

Held the 1st Hamashin Business Matching Fair

June 2010

Held the First Seminar on Brazil’s Economy

October 2007

Established the Shizuoka Prefecture Western Region Shinkin
Economic Research Institute jointly with Enshu Shinkin Bank

December 2010

Publication of i Zoom, Iwashin’s magazine to discoverregional attractiveness, started

November 2008

Held the 1st Sanen-nanshin Shinkin Summit and the Sanennanshin Shinkin Product Exhibition

May 2014

Iwashin’s intellectual property study group called i Cube
established

January 2009

Became a member of the Tokai Region Shinkin Joint
Business Center and online system modified

May 2015

Regional Revitalization Strategy Promotion Desk established

April 2010

Marked the 60th anniversary of our establishment

April 2016

Iwashin Business Start-up Support Desk established

January 2014

Opened Bangkok Representative Office, the first overseas
officeDecember 2016

Deposits reach ¥700.0 billion

June 2015

Opened a new branch with full banking capabilities (Fukuroi
Branch) for the first time in 18 years

September 2017
October 2018

Basic merger agreement concluded
Logo mark and corporate message announced

January 21, 2019 HAMAMATSU IWATA SHINKIN BANK established3

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Organization Chart

As of July 1, 2019

Internal Audit Division
Strategic Planning Division
Risk Management Division

IT Strategic Planning Office
General Planning Department
Accounting Department
Legal Risk Management Department
Risk Management Department
Secretarial Office

General Affairs Division
Board of Directors
Chairman

Personnel Division

President
General Members’ Meeting

Treasury & Securities Division

Managing Director

Corporate Auditor

Property Administration Department
Personnel Department

Mental Health Consultation Office

Career Development Department

Life Design Division

Vice President
Senior Managing Director

Board of Corporate Auditors

General Affairs Department

Director

Operations Division

Management Committee
Systems Division

Committees and others

SDGs Promotion Division

Treasury & Securities Department
Fund & Securities Administration Department
Operations Department Ⅰ
Operations Department Ⅱ
Planning & Development Department
Operation & Administration Department
SDGs Planning Department
Community Contributions Department
Area Planning & Business Support Office
Branch Strategy Office

Branch Management Division

Branch Management Department
Customer Service Department
New Industry Creation Office

Corporate Business DivisionCorporate Strategy Department
Regional Business Development Department
International Department

Retail-Banking Division

Bangkok Representative Office

Retail-Banking Department
Yumeoi Plaza
Customer Support Desk
BranchLoan Consultation Desk
Liaison Desk

Credit Supervision DivisionCorporate Credit Department
Personal Credit Department
Credit Monitoring Department

Business Support Division

Business Support Department
Credit Assessment Department

Operations Support Division

Business Operations Department
Loan Operations Department

Board of Directors and Corporate Auditors
President
Kenichiro Mimuro
Deputy President
Hirohisa Takayanagi
ChairmanShozo Takagi
Senior Managing Director Masahiko TsujimuraManaging Director
Masanori Takahashi
Managing Director
Masayuki Mizuno
Managing Director
Seidai Hirai
Director
Toshiharu Suzuki
Director
Hisao Miwa
*1

*2

Director
Director
Director
Director
Director
Director
Director
Director
Director

Toru Sato
Tomoo Takahashi
Kazuhiro Hashishita
Hiroaki Matsushima
Mutsumi Muramatsu
Shinichi Horisaki*1
Hiroyasu Hanba
Takahiko Shimizu
Masayuki Sano

As of July 1, 2019

Michio Inagaki
Shoji Sato
Hideto Tago*1
Standing Corporate Auditor Yasuyuki Kawaguchi
Standing Corporate Auditor Masataka Shimaoka
Corporate Auditor
Kenichi Suzuki
Corporate Auditor
Naojiro Suzuki
Corporate Auditor
Naoko Tatsumi*2
Director
Director
Director

Shinichi Horisaki and Hideto Tago are outside directors appointed as provided for in the Industrial Agreement on Measures to Improve the Functionality of General Members’ Meeting
adopted within the shinkin bank industry.
Naoko Tatsumi is an outside corporate auditor appointed as provided for in Article 32-5 of the Shinkin Bank Act.

4

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Review of Operations
Fiscal 2019 Business Policies and Initiatives
1. Realize a customer-first business model■ Taking a back-to-basics approach to promoting customer-firstbusiness activities, we further strengthened our customer contact through a broader range of transactions and support.
Specifically, while instilling a branch performance evaluation
system that focuses on the process of activities and using thestrengthening and deepening of customer contact as a measure to gauge the performance of the entire branch, we promoted activities to understand the business of each business
operator customer as well as sales activities to offer solutions
to their issues. Additionally, as our customer-first business
operations policy, we provided products and services from theperspective of customers in accordance with the principle offiducial duty.
■ In the area of business processing re-engineering (BPR), we
implemented various systems, including a system to assist
loan decision-making and a system of tablet devices for overthe-counter services, in a phased manner as part of our efforts
to establish a business foundation for the creation of sharedvalue.
■ To achieve a work-life balance and improve personal skills andqualities, we went a step beyond the conventional time management and shifted our focus to improving the productivity of
individuals. We worked to increase personal skills and qualities
by encouraging employees to use the extra time resulting fromthe improved productivity for self-development and otheractivities for enriching their personal lives.
■ As a step to expand our business domain to become an integrated services provider, we established the IT Strategic Planning Office and Solutions Development Center in April 2018.
The IT Strategic Planning Office, set up within the Strategic
Planning Division as a core team to promote the Bank’s IT
strategies, has been examining new services using FinTech.
The Solutions Development Center was established within the
Branch Management Division with the aim of further strengthening the functions of the three sales divisions, namely the
Branch Management Division, Corporate Business Division
and Retail-Banking Division, to realize a customer-first sales
structure. The Center has been developing a menu of various
solutions and reinforcing the development of sales personnel.

2. Establish a structure to fully prepare for the merger
We implemented the following measures to establish a structure
to fully prepare ourselves for the merger.
■ We initiated preparations for the merger in September 2017 topromote smooth integration efforts. As specific examples, weestablished 10 expert committees to examine and determine
practical integration plans in each business area and theMerger Preparations Office as a standing body to manage theoverall progress of integration efforts and conduct generalcoordination among the special committees. We also established the Merger Council, and as its subordinate body, theMerger Preparations Committee mainly consisting of the representative directors of the two banks in charge of merger promotion and the heads of the special committees. Through thetwo organizations, we discussed important matters concern-

5

ing the merger and shared the understanding on the progressin merger promotion.
■ To ensure smooth and robust business processing after themerger, we provided training to Iwashin employees who wererequired to learn new business procedures. The training
included group training; practical training, in which Iwashin
employees actually engaged in business operations at
Hamashin branches; and self-learning programs. In order to
set aside enough time for the training, Hamashin employees
were dispatched to Iwashin branches to provide business
operations support.
■ For announcing and explaining the merger to customers, wesent a notice of the merger to all customers in October 2018
and at the same time opened a dedicated call center. In parallel, we proactively disseminated relevant information and the
new corporate image after the merger by posting notices atthe counter and ATMs and through visits to customers and the
media.
■ To realize the intent of the merger, we worked to share andinstill the Management Philosophy and Management Policy ofthe new bank, which is to “provide quality services andproblem-solving functionality to help resolve various issues of
local small- and medium-sized business operators and community members by leveraging the individual strengths of thetwo banks to generate synergy.”

Economic and Financial Environment in Fiscal 2019
Economic conditions
During the fiscal year ended March 31, 2019, the Japanese
economy remained on a modest recovery path overall, eventhough there was a temporary downturn resulting from natural
disasters that occurred one after another during the summer.
Backed by sound economic growth abroad, record-high corporate earnings pushed up capital investment and continued tospur an improvement in the employment and income situations,which in turn, led to a continued recovery in consumer spending.
In our business region as well, exporting companies in theregion’s core industries, including automobiles, showed strong
business performance, driving sound economic growth of theentire region.

Industry trends in the Bank’s business region
In the automobile industry, one of the region’s core industries,
the global trend toward vehicle electrification and the subsequent reduction in the number of automotive parts have beencausing a considerable impact on suppliers, and such a change
in the industrial structure has given rise to concerns over an
economic contraction and declining employment in the region.
The external environment facing regional financial institutions
has also been undergoing major changes, such as the emergence of new companies providing FinTech and other new financial services.
Amid these changes, we, as a regional financial institution, intend
to become a partner truly needed in the region. In doing so, wewill create universal value to customers and local communities
and work toward the creation of a society that can achieve sustained growth over the long term.

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Initiatives Related to the Sustainable Development Goals(SDGs)*
Under the belief that we, either the entire Bank or each employee
and director making up the Bank, are integral to local communities, society, and ultimately, the world, we will strive to achieve
the global goal of realizing a sustainable society in which no one
is left behind.

In doing so, we position the United Nations’ Sustainable Development Goals (SDGs) at the heart of our Management Philosophy and declare that we will make a broad range of efforts to
help resolve social issues while pursuing sustainable growth of
our own.

Universal Value Declaration -SDGs Action Declaration of Hamamatsu Iwata Shinkin BankFormulated on January 21, 2019

1 Respect people

We work to create a rewarding workplace environment, in which all
persons can demonstrate their personalities and capabilities to the fullest, through work style reforms, improvement of a work-life balance,
promotion of diversity and other means. Through the exercise of our
financial intermediary function, we also contribute to the resolution ofsocial issues, including protection of human rights and support forsocially vulnerable people.

2 Respect local communities

We seek to attain sustainable growth of local communities, that of ourcustomers and our own by increasing the regional attractiveness andvalue. Specifically, we commit ourselves to achieving growth of regional
industries, increasing the added value of corporate customers and realizing affluent lives for individual customers. We also engage in activities
to conserve the local natural environment and increase community readiness to disasters to help create sustainable cities and communities.

global issues through efforts to resolve
3 Tackle
4 Broaden and spread activities
local issues
By exercising our financial intermediary function, we implement specificmeasures locally and at the same time contribute to the resolution of
global issues, such as curbing of global warming and conservation of
biodiversity.

We strive to cultivate a better recognition and understanding of theSDGs among customers as well as our employees and directors andaim to broaden and spread relevant activities by supporting customers’ SDGs-related efforts.

* The 2030 Agenda for Sustainable Development adopted by the United Nations member states in September 2015, comprising 17 goals and 169 targets for eliminating poverty, reducing
inequalities, engaging in decent work and protecting the environment. Under the pledge of leaving no one behind, this action plan aims to create a sustainable society by specifying clear goals
and global priority issues for resolution by 2030 and by calling for proactive action of governments, companies and citizens.

About Shinkin Central Bank
Shinkin Central Bank (SCB), established in 1950, is a cooperative
financial institution serving as the central bank for shinkin banks inJapan. Its name was changed from the Zenshinren Bank to Shinkin
Central Bank on October 1, 2000, and its preferred shares were listedon the Tokyo Stock Exchange on December 22 of the same year.
SCB is one of the largest and healthiest financial institutions in Japan,
with total assets amounting to ¥3.9 trillion, the capital adequacy ratio(non-consolidated, domestic standard) standing at 24.48% and theratio of bad loans standing at 0.34%. It is also one of the few financial
institutions to issue debentures. SCB works closely together with its
member shinkin banks while assuming three roles, specifically as thecentral bank of shinkin banks, as an institutional investor and as aregional financial institution.
* Total assets, the capital adequacy ratio (non-consolidated) and the ratio of
bad loans are as of March 31, 2019.

Corporate Data of Shinkin Central Bank
Name

Shinkin Central Bank

Established

June 1, 1950

Number of Employees and Full-Time 1,198
Directors(including 13 full-time directors)
Network

Domestic: 14; Overseas: 5*

Total Assets¥39,432.7 billion

Paid-in Capital¥690.9 billion

Capital Adequacy Ratio

24.48%(non-consolidated, domestic standard)

Number of Member Shinkin Banks

259* Including Shinkin International Ltd.

(As of March 31, 2019)6

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Compliance
Compliance System
Compliance involves observing various rules beginning with aseries of laws and regulations as well as social norms in carryingout daily operations. Hamamatsu Iwata Shinkin Bank designates

As of July 1, 2019

thorough compliance as a top management issue and is working
to strengthen its compliance system with the aim of becoming afinancial institution earning greater trust from customers

Board of Directors

Standing Corporate Auditor
1) Prohibits unlawful behavior ofboard members2) Convenes the Board of Directors
3) Reports to the Board of Directors

4) Reports opinions to theGeneral Members’ Meeting5) Lists in the auditing report

Risk Management Division
1) Plans and prepares basic policies concerningcompliance2) Gathers and passes on information concerningcompliance3) Serves as consultation point for compliance4) Reports to supervisory authorities on compliance5) Convenes regular meetings on compliance6) Serves as contact point for reporting accidents,
misconduct incidents and matters concerning
pubic interest
7) Handles matters concerning sexual and power
harassment
8) Handles matters concerning overall managementof responses to anti-social forces and others9) Handles matters concerning management ofconflicts of interest

ReportWhistleblower

Risk Management
Committee

Director in charge / Other directors
1) Convenes the Board of Directors (Management
2) Reports to the Board of Directors Committee)

Compliance Committee
Internal Audit Division
1) Handles matters concerning
auditing of compliance system
2) Handles matters concerninginvestigating and clarifying
reports on reporting accidents,
misconduct incidents andmatters concerning pubic
interest

General Affairs Division
1) Handles matters concerning responses toanti-social forces and others
2) Handles matters concerning businessentertainment, gift giving and others

Personnel Division
3) Handles matters concerning punitive measures4) Handles matters concerning compliance training
5) Promotes appropriate personnel rotations andtaking allotted time off

ObserverAttendance by non-member executive
or employee can be requested when
deemed necessary.

Life Design Division, Treasury & Securities
Division, Systems Division, Corporate Business
Division, Retail-Banking Division, Operations
Support Division, SDGs Promotion Division

Disciplinary
Committee

Strategic Planning Division
Operations Division
Branch Management Division
Business Support Division

Branch Management Division

1) Serves as a contact point for complaints and other matters from each branch2) Handles matters concerning investigating and clarifying the cause of complaints and others

Head Office and Branches/Person promoting compliance implementation
Hotline(Risk Management Division)(Lawyers)

1) Business operation compliance audits at branches2) Implement training on compliance3) Serve as contact point for consultations
concerning compliance with staff of branches
4) Record and report accidents and misconduct

5) Record and report external complaints
6) Responses, whistle blowing, recording andreporting on anti-social forces and others
7) Record and report on conflicts of interest

Lawyers
Certified Public Accountant

Employees

Financial Products Solicitation Policy
Pursuant to the Act on Sales, etc. of Financial Instruments, theBank observes the following practices when marketing financial
products and ensures the appropriateness of its solicitation
activities.
1. We explain financial products and provide relevant information to customers in a manner suitably matched to their levelsof knowledge and experience, status of assets and purposesof individual transactions.
2. Our solicitation activities are such that customers select andpurchase a financial product based on their own judgment.
We explain important matters concerning the product andhelp them make appropriate judgment.
3. We endeavor to conduct solicitation in an honest and fairmanner, and in order to avoid providing factually inaccurate
explanations and causing misunderstanding, work to raise
the knowledge level of our employees and directors through7

training and other means.
4. We do not conduct solicitation at times or places that areinconvenient to customers.
5. Please make an inquiry through our contact point if you haveany comment or suggestion about our solicitation activities
for sales of financial products.

Business Continuity Plan
The Bank’s financial services are a function essential to local
communities, and we recognize that one of our social roles is tocontinue business operations and make a contribution as acommunity member even during a major disaster. Accordingly,
we position the establishment and upgrading of a business
continuity system as another top management issue and haveformulated a basic policy concerning the matter. We will formulate, constantly upgrade, maintain and manage a business continuity plan that encompasses a contingency plan.

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Privacy Policy
Placing the highest priority on gaining trust from customers andwith a view to ensuring proper protection and utilization of theirpersonal information and personal identification numbers (collectively, “personal information”), the Bank complies with the
Act on the Protection of Personal Information (Act No. 57 of
May 30, 2003), the Act on the Use of Numbers to Identify aSpecific Individual in Administrative Procedures (Act No. 27 of
May 31, 2013), the Guidelines for Personal Information Protection in the Financial Fields and other applicable laws and regulations. While constantly improving our legal compliance posture, we also strive to maintain the confidentiality and accuracyof the personal information we handle.

We publicize our Privacy Policy on our corporate website and inother places to show our commitment to the protection of personal information and pledge continuous improvements to the
public.

Basic Policy on Handling of Anti-Social Forces
To block and eliminate any relationship with anti-social forces,
which are a threat to the public order and safety and hampersound economic and social growth, we formulate and comply
with a Basic Policy on Handling of Anti-Social Forces.
We publicize our Basic Policy on Handling of Anti-Social Forceson our corporate website and in other places.

Overseas Business Support Services
Overseas Business Support Center

Bangkok Representative Office

The Overseas Business Support Center collaborates with suchexternal support organizations as the Japan External Trade
Organization (JETRO), local governments and Shinkin Central
Bank (SCB) to offer overseas business support services
matched to customer needs. Our service lineup includes providing information on local business and other conditions andassisting in the formulation of plans for setting up operations
overseas.

In January 2014, Hamamatsu Iwata Shinkin Bank opened a
representative office in Bangkok, Thailand, a city expected toserve as a business hub in Asia. The office provides various
support services, including providing information on Thailand
and neighboring countries, assisting with site visits and providing referrals to local experts and supporting organizations.

Bangkok Representative Office
Address: 19th Floor, 1901, Athenee Tower, 63 Wireless Road,
Lumpini, Pathumwan, Bangkok 10330, Thailand
TEL: +66-(0)2-168-8303 FAX: +66-(0)2-168-8305

Hamamatsu Iwata Exchange Meeting held in Jakarta

Number of support cases for overseas businessadvancement and trade: 192

Bangkok Representative Office Location
Skytrain (BTS

Hamamatsu Iwata Shinkin Bank’s Network in Asia
Partner bank:
State Bank of India) SilomLine

Chit Lom Sta.

PhloenChit Sta

SCB: Shanghai
Representative OfficeWireless

Lumphini Park
Japanese Embassy

Sala

Dae

ta.
ng S

Silo

mS

ta.
Lum

phin

i Sta

.

Mahanakhon
Chalermpre
Ex ssway

SCB: Temporary assignment to Bankfor Investment and Development in
Vietnam, stationed in Ho Chi Minh

Japanese
Chamber ofCommerce

Road

SCB: Temporary
assignment to BDO Unibank
Partner bank:
Metrobank of Philippines

Road

Partner bank: Maybank Indonesia
Hamamatsu Iwata Shinkin Bank:
Temporary assignment
to Maybank Indonesia
SCB: Temporary assignment
to Maybank Indonesia

Hamamatsu Iwata Shinkin Bank
Overseas Business Support Center
damri

Hamamatsu Iwata Shinkin Bank:
Bangkok Representative OfficePartner bank:Vietcombank

Ratchadamri Sta.

Racha

SCB:
Bangkok Representative
OfficeTemporary assignment to
Bangkok Bank

19F, Athenee Tower
Royal Bangkok
Sports Club Racetrack

SCB: Hong Kong
Representative Office.

8

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Business Results
Balance of deposits (including certificates of deposit)
Millions of yen

2,500,000

Growth in profits
We posted net income of ¥2.7 billion, and net business profit,
which is obtained through our main business, amounted toMillions of yen¥4.4 billion.
6,000

5,639

2,414,331
Millionsof yenMillionsof yenMillions ofof yenyen
Millions

2,500,000
2,500,000
2,000,000
2,500,000
2,500,000

2,414,331
2,414,331
2,414,331
2,414,331

2,000,000
2,000,000
1,500,000
2,000,000
2,000,000

1,606,351
1,606,351

1,500,000
1,500,000
1,000,000
1,500,000
1,500,000

1,606,351
1,606,351
1,606,351
1,606,351
1,606,351
1,606,351
1,606,351
1,606,351

1,665,632
1,665,632

Net business profit
4,500

6,000
6,000
6,000
6,000
3,000
4,500
4,500
4,500
4,500

4,628

Millionsof yenMillionsof yen4,445of
Millionsof yenyen
Millions

5,639
5,639
5,639
5,639
4,628
4,628
4,628
4,628

4,445
4,445
4,445
4,445

1,500
3,000
3,000
3,000
3,000

1,665,632
1,665,632
1,665,632
1,665,632
1,665,632
1,665,632
1,665,632

0
1,500
1,500
1,500
1,500

0 0
0
0

1,000,000
1,000,000
500,000
1,000,000
1,000,000

FY2017FY2018FY2019FY2017FY2017FY2017FY2017FY2018FY2018FY2018FY2018FY2019FY2019FY2019FY2019Millions of yen

The data for fiscal 2017 and 2018 represents the figures of the former Hamashin.
6,000

500,000
500,0000
500,000
500,000

FY2017FY2018FY2019Ordinary profit 4,966
4,500

The data for fiscal 2017 and 2018 represents the figures of the former Hamashin.

6,000
6,000
6,000
6,000

0 0
0
0

3,000
4,500
4,500
4,500
4,500

FY2017FY2017FY2017FY2017FY2018FY2018FY2018FY2018

Balance
1,500,000 of loans and bills discounted

FY2019FY2019FY2019FY2019Millions of yen

Millionsof yenMillionsof yenMillions
Millions ofof yenyen

1,500,000
1,500,000
1,200,000
1,500,000
1,500,000

0
1,500
1,500
1,500
1,500

4,966
4,966
4,966
4,966

4,667
4,667
4,667
4,667

886,840

904,423

1,228,725
1,228,725
1,228,725
1,228,725

FY2017FY2018FY2019FY2017FY2017FY2017FY2017FY2018FY2018FY2018FY2018FY2019FY2019FY2019FY2019886,840
886,840
886,840
886,840

904,423
904,423
904,423
904,423

2,000
3,000
3,000
3,000
3,000

3,422
3,124

0 0
0
0

FY2018FY2019FY2017FY2018FY2019FY2017FY2018FY2019FY2017FY2018FY2019FY2018 the figures of the
FY2019The data forFY2017
fiscal 2017 and 2018 represents
former Hamashin.

9

0
1,000
1,000
1,000
1,000
0 0
0
0

Millionsof yenMillionsof yenMillions ofof yenyen
Millions

2,796

3,422
3,422
3,422
3,422

3,124
3,124
3,124
3,124

1,000
2,000
2,000
2,000
2,000
FY2017

Millions of yen

The data for fiscal 2017 and 2018 represents the figures of the former Hamashin.
4,000

3,000
4,000
4,000
4,000
4,000

600,000
600,000
300,000
600,000
600,000

300,000
300,000
300,000 0
300,000

4,223
4,223
4,223
4,223

1,228,725

Net income
900,000
900,000
600,000
900,000
900,000

Millionsof yenMillionsof yenMillions ofof yenyen
Millions

4,223

1,500
3,000
3,000
3,000
3,000

0 0
0
0
1,200,000
1,200,000
900,000
1,200,000
1,200,000

4,667

2,796
2,796
2,796
2,796

FY2017FY2018FY2019FY2017FY2017FY2017FY2017FY2018FY2018FY2018FY2018FY2019FY2019FY2019FY2019The data for fiscal 2017 and 2018 represents the figures of the former Hamashin.

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Non-Consolidated Capital Adequacy Ratio
Our non-consolidated capital adequacy ratio was 13.92% as ofthe end of March 2019, which markedly surpassed 4.00% of
the domestic standard of financial institutions operating inJapan and signifies sound management. Soundness is also
evidenced by the majority of shareholders’ equity comprised ofa reserve for retained earnings from profits.

■ ■ Shareholders’ equity

Non-consolidated capital adequacy ratio

Non-consolidated
capital adequacy
ratio (%)

168,238
14.45%

15.00

12.00

Capital adequacy ratio
The capital adequacy ratio indicates the percentage of capital among total credit risk assets and isa representative indicator of factors that include the security and soundness of management as wellas corporate vitality (resistance to risk). The capital adequacy ratio serves as the benchmark for the
Financial Services Agency (FSA) to make official announcements including orders to undertake
business improvement initiatives or suspend business.

Shareholders’ equity(Millions of yen)

122,256

14.10%

150,000

13.92%

125,452

120,000

9.00

90,0006.00

60,000

3.00

Domestic
standard
4.00%

030,000FY2017FY20180

FY2019The data for fiscal 2017 and 2018 represents the figures of the former Hamashin.

Hamamatsu Iwata Shinkin Bank’s Ratings
We also acquired an upper rank “A” in issuer ratings for fiscal
2019 from Rating and Investment Information, Inc. (R&I), which
is a rating institution. The current rank was received in recognition of our enhanced shareholders’ equity, financial stability,
finely tuned customer response capabilities and other relevant
aspects.

R&I Rating Symbols and Definitions（Issuer Rating）
Highest creditworthiness supported by many excellent factors.
Very high creditworthiness supported by some excellent factors.
High creditworthiness supported by a few excellent factors.
Creditworthiness is sufficient, though some factors require attention
in times of major environmental changes.
Creditworthiness is sufficient for the time being, though some factors
require due attention in times of environmental changes.

Ratings

Creditworthiness is questionable and some factors require constant attention.

Ratings are carried out by rating institutions as a means of ranking whether or not the payment ofprincipal and interest of bonds and deposits are made to investors and/or depositors according torespective agreements or to rank the level of security and credit rating of a company from a fairstandpoint.

An obligation is in default or likely to default.
The obligation in default may not be recovered in full.
An obligation is in default or highly likely to default.
The obligation in default may only be partially recovered.

D

An obligation is in default and may hardly be recovered.

Risk-Monitored Loans for Fiscal 2019
Various changes in the economic environment precluded auniform recovery in business performance of our business
operator customers, and we focused on providing managerial
support and smooth financing. As a result, in fiscal 2019, riskmonitored loans totaled ¥65,433 million, which accounted for
5.33% of total loans and bills discounted. Additionally, thecoverage ratio due to collateral and guarantees and reserve forpossible loan losses was 90.5%.
To prepare for the accrual of losses in the future, we reserve¥14,893 million as a reserve for possible loan losses in addition
to securing ¥182.8 billion of net assets (shareholders’ equity ina broad sense) by making efforts to reinforce our retained

Risk-monitored loans
Risk-monitored loans are loans and bills discounted (assets for financial institutions) for which
borrowers may not be able to pay back due to various reasons such as the deterioration of businesscondition. In this respect, in tandem with the FSA’s Financial Inspection Manual, we promote
initiatives to comprehend the status of borrowers and appropriately conducts write-offs or transfer
to a reserve for possible loan losses through a strict and fair asset assessment.

earnings through earning stable profits every term.
Going forward, we will improve and thoroughly promote our risk
control system while also undertaking concerted efforts tocontribute to rebuilding and improving the management ofclient companies as a primary responsibility of a regional
financial institution.
Unit: Millions of yen
Risk-monitored loans (coverage ratio)

Borrower classification
under self-assessment

Risk-monitored loans

FY2018Bankrupt borrowers

Loans to bankrupt borrowers

809 100.0%

Effectively bankrupt borrowers
Potentially bankrupt borrowers
Substandard
borrowers

Delinquent loans
Loans past due three months or more

44,03494.6%

5 100.0%

FY20191,593 100.0%
59,35793.4%

2 100.0%

Restructured loans

3,473

45.3%

4,480

49.3%

Total risk-monitored loans

48,322

91.1%

65,433

90.5%

Amount covered by collateral and guarantees

44,02659,235

Ratio to total amount of loans

5.34%

5.33%

* Amount covered by collateral and guarantees includes loans to bankrupt borrowers,
delinquent loans, specific reserve as well as general reserve for loans past due threemonths or more and restructured loans.

10HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Non-Consolidated Balance Sheets
Millions of yen (Note 1)

For the Year Ended March 31, 2019 and 20182019

Thousands of U.S. dollars (Note 2)

2019

2018

Assets¥ 446,860¥ 275,131$ 4,026,128

Call Loans

－

－

－

Monetary Claims Bought

379

137

－

Money Held in Trusts

－

－

－

957,603677,794

8,627,831

1,228,755

904,423

11,070,862

Foreign Exchanges

1,532

1,882

13,803

Other Assets

14,882

10,860134,084

Fixed Assets

23,10015,953

208,126

Prepaid Pension Cost

1,469

123

13,235

Cash and Due from Banks

Securities
Loans and Bills Discounted

－

－

－

Customers’ Liabilities for Acceptances and Guarantees

30,67624,974

276,385

Reserve for Possible Loan Losses(14,893)(7,857)(134,183)¥2,690,367¥1,903,421$24,239,724¥2,406,376¥1,655,588$21,681,016

7,955

10,04371,6738

172

Other Liabilities

57,794

76,849520,713

Reserve for Employee Bonuses

1,549

1,101

13,956

128

1,233

1,153

Other Reserves

1,552

912

13,983

Deferred Tax Liabilities

1,448

180

13,046

Acceptances and Guarantees

30,67624,974

276,385

2,507,491

1,770,885

22,592,044

Share Capital

2,364

1,217

21,299Legal Reserve

2,374

1,212

21,389Special Reserve

156,496

118,1131,410,000

6,090

3,363

54,869Total Members’ Equity

167,324

123,906

1,507,559

Net Unrealized Gains on Available-for-Sale Securities

15,551

8,630

140,111

Total Net Assets

182,875

132,536

1,647,670¥2,690,367¥1,903,421$24,239,724

Deferred Tax Assets

Total Assets
Liabilities and Net Assets
Liabilities
Deposits
Certificates of Deposit
Foreign Exchanges

Reserve for Employee Retirement Benefits

Total Liabilities
Net Assets

Unappropriated Retained Earnings

Total Liabilities and Net Assets

Notes 1. Amounts of less than one million yen have been omitted.
2. U.S. dollar amounts are converted for convenience only at ¥110.99 per U.S.$1.00, the rate prevailing on March 31, 2019.

11

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Non-Consolidated Statements of Income
Millions of yen (Note 1)

For the Year Ended March 31, 2019 and 20182019

Thousands of U.S. dollars (Note 2)

2019

2018

IncomeInterest on:¥20,031¥19,271$180,478

Loans and Bills Discounted

12,76012,242

114,969

Securities

6,548

6,372

59,001Others

722

657

6,507

Fees and Commissions

3,222

2,945

29,031Other Income

3,360

1,818

30,278

Total Income

26,61424,034

239,788

Interest on:

454

458

4,098

Deposits

427

432

3,850

Other

27

25

247

Fees and Commissions

2,125

1,958

19,153General and Administrative Expenses

19,184

16,349172,848

Other Expenses

1,354

817

12,201

Total Expenses

23,11919,583208,301

Income Before Income Taxes

3,494

4,451

31,487

Current

1,367

648

12,318Deferred

(668)

678

(6,027)¥ 2,796¥ 3,124$ 25,196

Expenses

Income Taxes

Net Income

Unappropriated Retained Earnings
Millions of yen (Note 1)

For the Year Ended March 31, 2019 and 20182019

Thousands of U.S. dollars (Note 2)

2019

2018

At Beginning of the Year

¥6,089¥3,363$54,863

Appropriation

5,618

3,066

50,618

0

5

0

118

60

1,064

Special Reserve

5,500

3,000

49,554

At End of the Year

¥ 483

¥ 297

$ 4,352

Transfer to Legal Reserve
Cash Dividends for Member Common Shares

Notes 1. Amounts of less than one million yen have been omitted.
2. U.S. dollar amounts are converted for convenience only at ¥110.99 per U.S.$1.00, the rate prevailing on March 31, 2019.

12

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Consolidated Balance Sheets
Millions of yen (Note 1)

As of March 31, 2019 and 20182019

Thousands of U.S. dollars (Note 2)

2019

2018

Assets¥ 447,536¥ 275,797$ 4,032,219

Call Loans

－

－

－

Monetary Claims Bought

379

137

3,414

Monetary Held in Trusts

－

－

－

957,300

677,577

8,625,101

1,225,716

902,943

11,043,481

Foreign Exchanges

1,532

1,882

13,803

Other Assets

28,16021,649253,716

Fixed Assets

23,032

15,676

207,514

Prepaid Pension Cost

1,469

123

13,235

Deferred Tax Assets

100

97

900

Customers’ Liabilities for Acceptances and Guarantees

30,61824,974

275,862

Reserve for Possible Loan Losses(15,139)(7,986)(136,399)¥2,700,709¥1,912,872$24,332,903¥2,403,920¥1,653,392$21,658,888

Certificates of Deposit

6,935

9,023

62,483

Other Liabilities

67,01485,228603,784

0

1

0

1,559

1,143

14,046

236

1,336

2,126

Other Reserves

1,573

926

14,172

Deferred Tax Liabilities

1,449

180

13,055

Acceptances and Guarantees

30,61824,974

275,862

2,513,309

1,776,209

22,644,463

2,364

1,217

21,299Retained Earnings

168,601

125,983

1,519,064

Total Members’ Equity

170,964

127,201

1,540,354

Net Unrealized Gains on Available-for-Sale Securities

15,551

8,630

140,111

Minority Interests

884

831

7,964

Total Net Assets

187,400

136,663

1,688,440¥2,700,709¥1,912,872$24,332,903

Cash and Due from Banks

Securities
Loans and Bills Discounted

Total Assets
Liabilities and Net Assets
Liabilities
Deposits

Foreign Exchanges
Reserve for Employee Bonuses
Reserve for Employee Retirement Benefits

Total Liabilities
Net Assets
Share Capital

Total Liabilities and Net Assets

Notes 1. Amounts of less than one million yen have been omitted.
2. U.S. dollar amounts are converted for convenience only at ¥110.99 per U.S.$1.00, the rate prevailing on March 31, 2019.

13

HAMAMATSU IWATA SHINKIN BANK Annual Report 2019

Consolidated Statements of Income
Millions of yen (Note 1)

For the Years Ended March 31, 2019 and 20182019

Thousands of U.S. dollars (Note 2)

2019

2018

IncomeOperating Income¥20,019¥19,263$180,370

Loans and Bills Discounted

12,752

12,237

114,893

Securities

6,544

6,369

58,968Others

722

657

6,507

Fees and Commissions

3,353

3,076

30,214

Other Income

7,383

5,539

66,526

Total Income

30,75627,879277,111

Operating Expenses

454

458

4,095

Deposits

427

432

3,849

Others

27

25

246

Fees and Commissions

1,955

1,807

17,615General and Administrative Expenses

18,991

16,086

171,106

Other Expenses

5,475

4,659

49,331

Total Expenses

26,87623,011

242,149

Income Before Income Taxes

3,880

4,867

34,961

Current

1,529

754

13,783

Deferred

(677)

696

(6,102)

48

58

434

¥ 2,979¥ 3,358$ 26,845

Expenses

Income Taxes

Minority Interests in Income
Net Income

Retained Earnings
Millions of yen (Note 1)

For the Years Ended March 31, 2019 and 20182019

Thousands of U.S. dollars (Note 2)

2019

2018

At Beginning of the Year

¥125,983¥122,697$1,135,093

Changes during the Year

0

0

0

2,979

3,358

26,845

60

72

545

Decrease by Merger

39,631－－At End of the Year

¥168,534¥125,983$1,518,463

Net Income
Cash Dividends for Member Common Shares

Notes 1. Amounts of less than one million yen have been omitted.
2. U.S. dollar amounts are converted for convenience only at ¥110.99 per U.S.$1.00, the rate prevailing on March 31, 2019.

14

114-8 Motoshiro-cho, Naka-ku, Hamamatsu, Shizuoka 430-0946, Japan
TEL : +81-53-450-3250

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