Messages

Message from the President

Messages

Next Round of
Growth for the Chiba Bank Group’s

Chiba Bank’s Value Creation

Further Advancement

Current mid-term plan

Growth Strategy for Value Creation

Continuing Growth: Plan for profit attributable to owners of parent
From the next mid-term plan
ROE about 8%

Tsutomu Yonemoto
PresidentGroup Chief Executive Officer (CEO)The Chiba Bank Integrated Report 2024

¥62.4 billion

New businesses and digitalbusinesses: ¥3.0 billion
Fortify existing business:¥12.0 billion

Return on investment in 3.4 years

Strategic system investment and expenses totaling approximately ¥20.0 billion over three years
Human capital investment approximately ¥0.4 billion (FY2025)

FY2022

FY2023

FY2024Further strategic spending

FY2025

FY2028FY2030

KPIs(Reference)(Initial Year)(Final Year)FY2022 Results

FY2023 Results

FY2025 Targets

Goals for FY2030

6.38%

6.40%

Above 7%

About 8%

Profit attributable toowners of parent¥60.2 billion¥62.4 billion¥75.0 billion¥100.0 billion

Consolidated net business income¥81.8 billion¥91.7 billion¥120.0 billion(Before the application ofBasel III full implementation)

11.87%

10.5% to11.5%

47.37%

48.76%

About 45%

Consolidated ROE(shareholders’ equity basis)

Consolidated Tier 1
common equity capital ratio*
Consolidated OHR

10.57%

Financial and Corporate Data5

¥60.2 billion¥75.0 billion

ROE 6.40%

Management Base Supporting Value Creation

The business environment in which banks
operate is changing rapidly as digitalization
progresses and climate change issues become
more pressing, while commodity prices soar andlabor shortages worsen. Moreover, now that themonetary easing policy has ended after
persisting for many years, with the advent of “aworld with interest rates”, which signals a turning
point for the Chiba Bank Group.
We have been steadily improving our earnings inan exceptionally challenging environment of“negative interest rate”. To diversify earnings, weoffered various services in addition to earninginterest income from loans. For example, in thecorporate business, we offered consulting
services to tackle diverse management issues,
such as digital transformation (DX) and green
transformation (GX), in addition to supporting thecore business, business restructuring, andadvisory services related to M&A and businesssuccession. In the retail business, we expanded
the choice of products and services we offer,
ranging from sales of financial products, such as
investment trusts and insurance products, andinheritance-related services, to credit/debit card

issuance, franchise locations, and most recently,
non-financial services offered in partnership witha regional trading company.
Moreover, we have built a lean management
structure by focusing relentlessly on productivity.
Initiatives in this regard include improving
operational efficiency through DX, thoroughreviewing and elimination of poorly performing
operations, and reviewing the branch network ineach area.
In a challenging business environment, wehave maintained high profitability thanks to these
initiatives. Recognizing that rising interest rates
are a tailwind for us, I am convinced that the
Bank Group is poised for the next round ofgrowth, signaling a further advance in our
ongoing development.
Through further evolution of the Bank Group’s
manifold strengths and implementation of
aggressive management strategies to “fortify
existing business” and “take on challenges innew business areas”, I am confident that we canachieve not only the quantitative targets of the
Mid-term Plan, but also “consolidated ROE of
8%” and “profit attributable to owners of theparent of 100 billion yen” for the fiscal year
ending March 31, 2031 (FY2030).

ROE 6.38%

Human Capital Management“A world with interest rates” accelerates our growth¥100.0 billion

Rise in domestic interest rates
ROE above 7.0%

*Basel III finalization basis (excluding unrealized gains/losses on securities)
The Chiba Bank Integrated Report 2024

6

Messages

Operating BaseStrengthen sales in the Tokyo metropolitan area

Alliances

IbarakiPrefecture

SaitamaPrefecture

37%

4 branches

3 branchesof bank branches
in Chiba Prefecture.
As of March 31,
2024

15 branches

Chiba
Prefecture

1 branch *Excluding branch-in-branch, sub branches, loan centers, online branch, etc.
Share of branches in Chiba Prefecture
Other regional banks in Chiba Prefecture

387
71
182

7

Chiba Bank

Comprehensive branch share
Other banks (major banks and other regional banks in Chiba Prefecture)

Chiba Bank

37%
106

340

102

Further establishment of new branches<New branches>
Since 2023/11
Mito Branch
Since 2023/12
Hamamatsu-cho Branch
Since 2024/6
Shinjuku West Corporate
Banking Office

Expansion of the area sales office system(Collection of know-how and improvement of efficiency)

Since 2024/4
Mobara Area Sales Office

48
165

134

127

3/20193/20243/20193/2024

Expansion of the Bank share of comprehensive branches
Over the past 5 years, the number of comprehensive branches of other banks has declined

The Chiba Bank Integrated Report 2024

Achieving both top-line improvement andlow OHR through a full and efficient network

Fortifying existing businessTo achieve the “evolution of the customerfocused business model,” as envisaged in the
Mid-term Plan, I believe the most important thing

The Chiba Bank Integrated Report 2024

Financial and Corporate Data

Chiba Bank prefectural share

35%

Maintenance of the comprehensive branch network(Differentiation from other banks in the Prefecture)

127 branches

Osaka
Prefecture

Major Banks

Since 2024/4
Expansion of the sales area throughout
Tokyo and neighboring prefectures

Management Base Supporting Value Creation

Tokyo
Metropolitan
Government

The third strength is “alliances”, namely, the
TSUBASA Alliance, the Chiba-Musashino
Alliance, and the Chiba-Yokohama Partnership.
We are strengthening initiatives to deepen our
three alliances while also collaborating with Sony
Bank in various fields centering on digitalization.
In March 2024, the TSUBASA/JUUDANKAI
Joint Research Group was established toachieve greater efficiency in the operation ofsystems and the execution of businessprocesses. With task forces established in thethree areas of systems, business efficiency, andcyber security, joint research is progressing.
As the alliance strategy contributes
significantly to the low OHR, which is one of theBank’s strengths, we are endeavoring toreinforce these initiatives.

Human Capital Management

Number of branches

The second strength is our financial base.
Through business development leveraging ourstrong sales capabilities as well as the pursuit of
top-line improvement and cost reduction bypromoting DX, we have been maintaining a low
overhead ratio (OHR). The OHR was 48.76% for
the fiscal year ended March 31, 2024 (FY2023),
which is low compared to other banks. We
intend to further increase productivity, aiming for
an OHR of around 45% in the final year of the
Mid-term Plan and in the lower 40% range by
FY2030. With regard to credit costs, we have astrict risk management system and vigorously
use “Solution Review Meetings”, where theheadquarters credit department and sales
departments collaborate and discuss ways of
supporting customers. As a result, we havemaintained a low non-performing loan ratio of
0.92%,The Bank’s Tier 1 common equity capital
adequacy ratio on a Basel III finalization basis(excluding unrealized gains/losses on securities)
is 11.87%, based on a calculation using theconsolidated balance sheet for FY2023. We willcontinue to strategically utilize capital andaggressively invest in further growth, expand
human resources, and enhance shareholder
returns.

is to meticulously attend to each retail customer
and corporate customer. This means proposing
the optimal services to each customer, serving
as a “comprehensive money consultant” for retailcustomers and as an “assistant to management”
for corporate customers. Moreover, we willtransition to a much more sophisticated businessmodel by enhancing our ability to offer hybrid
responses leveraging our strengths. This will
involve combining the convenience of the digitalchannel with the specialized responsiveness ofthe face-to-face channel.
In the retail business, our focus is on
increasing the number of “Chibagin app” users
and other digital customers. The number ofregistered the app users had already exceeded 1
million by May 2024, accounting for
approximately 30% of the 3 million active
accounts. Analyzing the associated in-app digitaltransactions will enable us to enhance customer
resolution and make proposals tailored to eachcustomer. It is our earnest desire that customers
will gradually increase the frequency of theirtransactions with the Bank as they evolve from“customers who have accounts with Bank” to“users of the Bank’s products and services,” andthen to “cross-use customers who use multiple
products of the Bank.” Our aim is to encouragethem to become fans of the Bank. For the Bank,
the expansion of transactions will lead to higher
gross profit per customer and lower costs pertransaction. We aim to build a win-win
relationship that will both increase customer
loyalty and achieve growth of the Bank.
In the corporate business, similar to the caseof the retail business, what is most important is
to facilitate customers’ use of “Chibagin BusinessPortal”, a digital channel. By precisely addressing
not only emerging needs, but also latent ones,
we want corporate “customers who use the
Bank only for deposit transactions” to become“users of the Bank’s products and services” and“loan customers.” We want to encourage ourcorporate customers, including their employees,
to use the Bank as their main bank.
The issues confronting enterprises are growing
in number and complexity with every passing
year. As executives grapple with such issues as
DX/GX, labor shortages, and businesssuccession, we will offer increasingly
sophisticated consulting services andappropriate support tailored to changes in thecurrent interest rate environment. Our aim is toexceed customer expectations by providing
meticulous support aligned with customer needs.

Growth Strategy for Value Creation

Domestic Branch Network Strategy

Financial Base

Chiba Bank’s Value Creation

I believe the Bank Group’s defining strengths
are in three areas: “the operating base”, “thefinancial base”, and “alliances”. Regarding our
first strength, the operating base, we have built
a stable business by achieving an extremely
high lending share of approximately 40% in
Chiba Prefecture, which with its population of
6.26 million and gross prefectural product of 20
trillion yen is a sizable economy, and by
capturing the demand for funds and otherresources that this economy creates.
Furthermore, approximately 40% of thecompanies in Chiba Prefecture use the Chiba
Bank as their main bank and around 11 trillion
yen of some 15 trillion yen in domestic deposits
with the Bank are sticky retail deposits, which I
believe gives the Bank a significant advantage
in “a world with interest rates”.
Going forward, we intend to extend thisadvantage by offering a superior customer
experience by applying DX and reinforcing ourstable funding base. In addition, to differentiate
us from other banks, we will build a formidable
branch network attuned to the characteristics
of each areas. Whereas other banks operatingin Chiba Prefecture have reduced the numbersof comprehensive branches that handle loans
for corporate customers, the Bank has a policyof maintaining branches of this type and has
increased its share of such branches toapproximately 60%. For regional revitalization,
we have expanded the area sales office system,
which allows us to offer more sophisticatedservices by sharing know-how while improving
efficiency through the use of lightweight
branches. Following Tateyama and Togane, weestablished “the Mobara Area Sales Office” inApril 2024.
Beyond Chiba Prefecture, we established“the Shinjuku West Corporate Banking Office”
in June 2024 and expanded our sales territory
to include all of Tokyo and neighboring
prefectures. We will continue to aggressively
open new branches in the Tokyo metropolitanarea, where significant growth is expected.

Messages

Further enhancing the Bank Group’s strengths

8Messages

Message from the President

Taking on challenges in new business

Retail customer needs

Kimitsu Power Plant

STEP 3

9

Branding

Uncover hidden needs throughdata utilization/personalization

Establishment of new business models thatstands upstream of commercial distribution

Chibagin Market

House purchases
concierge service

Realtors

Daily living

Recurringsales

Chibagin Leasing

Chibagin Market

Support consumption activity of new lifestyles and “Connect to life”

The Chiba Bank Integrated Report 2024

Transforming Customer Experience Through DX

Realized changes*Only open ordinarysavings accounts is web

The number of registered users of the app increased to over 1 million, compared to approximately 3 million active accounts. (operating account penetration rate: 33%) accounts opening

Percentage of transactions using Chibagin app (monthly comparison)
Number of remittance transfers

Opening of ordinary savings accounts*

Tax and public finance collection+9.4%+19.3%

+2.6%

35.0%

25.6%

2023/326.6%

7.3%
2024/32023/3

Opening of investment trust accounts

Opening of NISA accounts

Card loan contracts

6.6%

April
2023
Release

38.7%

April
2023
Release

35.9%

April
2023
Release52.2%

2024/32023/32024/32023/32024/32023/32024/34.0%
2024/32023/3services, but also to continue to offer acustomer experience that resonates withcustomers. By harnessing the power of digitalchannels, such as “the Chibagin app” and “theChibagin Business Portal”, we will provide
various products and services, in both financial
and non-financial fields, to all retail andcorporate customers so as to deliver an
outstanding customer experience.
Promotion of DX is having a major impact asevidenced by significant changes in customertransactions that are already apparent.
Reflecting big increases in the number of app
users, in addition to remittance transfers andopening of ordinary savings accounts,
approximately 30% to 40% of transactions,such as opening of investment trust accounts,
opening of NISA accounts, and card loan
contracts, are already conducted via the app. It
is noteworthy that the penetration of the app
has led to an approximately 30% increase in thenumber of remittance transfers compared withthree years ago and total transfer fees haveincreased by more than 20%, boosting
profitability. Naturally, the cost borne by the

Bank is significantly lower in the case ofhandling via the app than by tellers at branches
and offices, contributing greatly to productivity.
Furthermore, analysis of transaction data
gathered through digital channels and use of
Artificial Intelligence will enable us to focus on
proposing products and services aligned with
the needs of each customer. In January 2024,
the Bank agreed to a joint business plan with
Google Cloud Japan, LLC to address thesematters and we are strengthening sophisticateddigital marketing initiatives. We will also aim toenrich the customer experience through timely
interventions so customers feel that “Just when
I am interested in something, I receive a
proposal from Chiba Bank or a notification on
the app about it” and “Chiba Bank understands
me well.”Currently, approximately 60% of residents in
Chiba Prefecture have accounts with the Bank. I
believe the Group’s DX initiatives are helping
resolve regional issues and enriching lifestyles
throughout the region. We will further strengthen
our initiatives under the slogan “DX for thewhole region.”
The Chiba Bank Integrated Report 2024

Financial and Corporate Data

Life events

Discovery and creation of
new products and services

Creation of non-financial operations

Management Base Supporting Value Creation

For the Group’s sustainable growth, using DX asa means of transformation, it will be essential to
not only provide attractive products andEvolution of financial operations

Human Capital Management

DX supporting transformation

Regional ecosystem strategy

Growth Strategy for Value Creationprefecture, and thus is a substantial contribution
to Chiba Prefecture in its efforts to achievecarbon neutrality. Under the “GX for the whole
region” slogan, we will continue to promote GX
throughout the region in close cooperation withlocal governments.
In addition, we are considering use of themetaverse for business development in the
housing-related field. In the future, we would liketo offer comprehensive support to customers in
virtual space, covering every phase fromconsideration of purchase of a residence tohandling of residential loan processes.
Unconstrained by traditional concepts, we willcontinue to vigorously take on challenges invarious fields as we chart a growth strategy
maximizing the Group’s potential.

Personalization strategy

Chiba Bank’s Value Creation

STEP 2

Corporate customer needs

Evolution of customer-focusedbusiness model

Chibagin Market Business road map
STEP 1“Trigger regional revitalization”
The local community within Chiba

Creating the optimal
customer

Messages

We are stepping up our initiatives in new
businesses that will be growth drivers for theGroup. Chibagin Market Co., Ltd., which
promotes business as a regional trading
company, strengthened its initiatives for “theChibagin Housing Concierge” housing-related
services, in addition to the crowdfunding
business for local products, etc., which has
been making progress. On Ad Co., Ltd., aprovider of remote financial consulting services,
is strengthening services for corporate
customers. In the real estate fund business, theBank is upgrading its solution function by
expanding the scope of the business to include
logistics facilities and hotels, in addition to office
and residential buildings. Regarding theadvertising business, we have been offering
advertising services at all our branches andoffices since October 2023. The positive
responses from customers are exceeding our
expectations and the number of contracts foradvertising services is growing rapidly. In theenergy sector, Himawari Green Energy Co., Ltd.
acquired Kimitsu Power Plant in April 2024, in
addition to Asahi Power Plant that began
operation in December 2023. Approximately
35% of the Group’s annual electricity
consumption is met by these two plants.
Besides, the Group is also emphasizing loans
related to renewable energy, such as solar
power and biomass, as well as project finance.
The generating capacity of renewable energy
projects in Chiba Prefecture for which the Grouphas extended loans is sufficient to power
approximately 550,000 households or around
20% of the 2.8 million households in the

DX Strategy

10Messages

Message from the President

Human capital supporting transformation

Diverse organization

Career development
Unified group management

Job satisfaction
Human resources portfolio

Financial and Corporate Data

Key measures

Creation of an“Organization with high personnel engagement”

Management Base Supporting Value Creation

Development of a
“Chiba Bank Group where people grow”

questionnaire surveys to measure customer
satisfaction concerning transactions with the
Bank for all retail customers who had face-toface transactions of financial products, andinterviews with customers by headquarters staff.
Through these surveys we are striving to analyze
the issues. Our initiatives for internal verification
include an engagement survey, a compliancequestionnaire survey, and the internal hotline
system. In addition, officers, including me, meetwith employees to directly solicit their opinions.
Although we have a way to go in disseminating
the Purpose and Vision, we have received plentyof positive feedback from our employees. We
feel our initiatives are resulting in solid progress
toward enhanced engagement.
I believe steady implementation of these
initiatives will accelerate the Group’s growth while
significantly enhancing corporate value. Striving
to regain the trust of our customers and all otherstakeholders, we will continue making concertedGroup-wide efforts to achieve improvements andprevent recurrence so that we can be “a bankthe region can be proud of” for our customers aswell as for our employees, and indeed foreveryone in the region.
We will continue to do our utmost to achieve
results exceeding everyone’s expectations as we
aim to become a Bank Group that continues togrow in order to create a local community better
suited to bringing the hope of each person thatinteracts with the Bank, including our customers,
shareholders, and employees, to life.
We sincerely appreciate your ongoing support.

Human Capital Management

Human Resources Strategy

Growth Strategy for Value Creation

In June 2023, the Bank and Chibagin Securities
were issued with administrative actions by the
Kanto Local Finance Bureau pursuant to the
Financial Instruments and Exchange Act.
Subsequently, over a period of approximately
two months, we thoroughly analyzed the truecauses, examined improvement measures, andformulated a business improvement plan. The
problems were attributable to three major
causes, namely, “the operational management
system”, “the internal control systems”, and “thebusiness management system”. We
implemented 57 improvement measurescorresponding to these issues, and completed
them by the end of March 2024, except for
certain measures involving system development.
Based on the conviction that ensuring thoroughpenetration of the Purpose and Vision throughout
the organization is the key to achieving
improvement with respect to all these issues, wehave established the Purpose and Vision
Penetration Project Team to strengthen crossorganizational initiatives, while reflecting theexpertise of external advisors. In addition, torealize the Purpose and Vision, we have

Chiba Bank’s Value Creation

Enhance corporate value through implementationof the business improvement planestablished the “Three Pledges.” (Whenevermaking a proposal to a customer or making abusiness decision, we always stop and consider,“Will this proposal or decision lead to therealization of the customer’s wish, a solution to
the customer’s problem, or the realization of aprosperous lifestyle for the customer?”) To
disseminate the Three Pledges among all
officers and employees of the Group, we areproactively implementing measures to raiseawareness, such as morning chants andworkshops at each workplace.
The positive impact of these initiatives on the
Bank’s business is already becoming apparent.
First, as a result of the introduction of the App
Investment Trust, the ratio of non-face-to-facesales of investment trusts has increased fromapproximately 20% to 50%, as we shift to an
operational management system that allows moretime for meticulous explanations to customers
and confirmation of their needs. In addition, we
abolished profit targets for retail departments inthe performance award system and revised theevaluation system to emphasize efforts in pursuitof customers’ best interests and to conduct
interviews with customers. Indeed, the number ofcustomer interviews has doubled, with suchcontacts gradually leading to sales. The change in
how business is being done is apparent.
I have long believed that what is mostimportant for achieving significant growth in theretail business is to equip sales representatives,
who are mainly engaged in the sale of financial
products to retail customers, with more versatileskills enabling them to respond to a wide rangeof customer needs. Triggered by the initiatives ofthe business improvement plan, we reviewed therole of retail sales representatives and positioned
them as “comprehensive retail consultants”
handling all types of products for retailcustomers. I view this positively as a move thathas enabled us to achieve transformation aheadof schedule.
Going forward, in view of the importance ofsteadily implementing the PDCA cycle for themeasures we are working on, I believe it isessential to promote both objective externalsurveys and internal verification so as to directly
capture the voice of employees.
With regard to external surveys, we conduct
fixed-point observations of the CX index*1 tomeasure customer loyalty, monthly NPS®*2

Messages

Successful implementation of sophisticatedstrategies hinges on our ability to maximize thecapabilities of all Group employees and create highperformance workplaces where they are highly
motivated to fulfill their responsibilities. To reward
individual employees for their hard work anddeepen their engagement, we are continuously
increasing salaries, including starting salaries. Under
the current Mid-term Plan, in order to enhance theexpertise of our employees, we are accelerating“investment in people” to strengthen humanresources development. The number of employees
to be trained through temporary transfer to externalorganizations and trainee programs is 280, double
the number of the previous plan.
Moreover, we have enhanced theattractiveness of the personnel system by
establishing new professional courses and atransfer system from Group companies. To foster
an environment where talented people are highly
motivated regardless of age, we have drasticallyrevised the personnel system for employees over
55 years old, improving compensation andexpanding opportunities for promotion. In
addition, we began unified Group recruiting for
new graduates and mid-career hires whereby the
Bank handles all the recruitment processes foritself and other Group companies. We also took
steps to optimize deployment of the Group’s
resources by promoting personnel exchanges
among Group companies.
Furthermore, we are strengthening initiatives todirectly capture the “voice of employees” throughengagement surveys, various questionnaire
surveys, and an internal hotline system. We arestrengthening diversity and inclusion initiatives tofoster a workplace environment where

employees can continue to work enthusiasticallywhile deriving satisfaction from their work.
Thus, with regard to investment in humanresources, which are the Group’s most importantmanagement resource, we will continue to spareno effort in developing a framework that ensures
all employees achieve personal development andin creating organizations whose members canrecognize they are fulfilling their potential.

*1 CX index is based on CXMM® of Nomura Research Institute, Ltd. CXMM® is a registered trademark of Nomura Research Institute, Ltd.
https://www.nri.com/en/service/solution/fis/cxmm*2 NPS® is a registered trademark of Bain & Company, Inc., Fred Reichheld, and NICE Systems, Inc.

11

The Chiba Bank Integrated Report 2024

The Chiba Bank Integrated Report 2024

12

Messages

Initiatives for Business Improvement and Recurrence Prevention in Response to Administrative Actions

Management, Sales, Administration, Auditing, Branch, Chibagin Securities (total of 35 people or more)

Problems in the operational management system(incentive mechanism)∙ A system in which structured bonds with a high rate of returnto earnings are evaluated relative to the volume of work
∙ Preference for selling structured bonds, but underestimationof problems and risks associated with structured bonds

Problem in the internal control system

Problem in business management system∙ Group governance issues
Problems in grasping the current situation, identifying issues,
and managing the progress of instructions∙ Problems in organizational culture
Problems in business operation system and internal control system:
situation where management is unable to respond appropriately

Continued message
dissemination
by management to employees
Penetration of
Fiduciary Duty Policy

Overview of the business improvement plan based on root cause analysis

13

The Chiba Bank Integrated Report 2024

Establishment of Operational
Management System

Strengthening Internal
Control System

Penetration of Human
Resources Development Policy
Raising internal awarenessfor empathy and action

Displaying the Purpose and Vision oninternal PCs and business cards

September 2023

Conducted engagement survey

September 2023

Reviewed Fiduciary Duty Policy, established
Fiduciary Duty Handbook

October 2023

Opened Chotto line to Group companies

September 2023

Established Three Pledges

October 2023

Newly established practical training for newly
appointed internal administration supervisors

Monthly Fiduciary Duty Study Meeting
involving all employees

Strengthening Business
Management System

Four major measures for investment trusts
Elimination of profit targets for retail business
Assessment system emphasizing fiduciary duty
and activity volume
Training of retail comprehensive consultants

Diversification and sophistication ofmonitoring methods
Advanced analysis of customer feedback(introduction of RPA and AI)

Establishment of the Group Improvement Office
The Chairperson of the Board of Directors waschanged to an Outside Director.
Introduced skill matrix for executives of Group companies

1st line

Implementation
Implementation*1 Addition*2
timingOctober 2023

October 2023

Introduced conformity verification tools

March 2024

Career support based on human resource
development policies at personnel interviews

October 2023

Introduced 360-degree evaluation toGroup companies*3

August 2024

Discussion by project team (two subcommittees under the project team)December 2023

Review of the 2nd line system (establishment of
the Customer Support Monitoring Office)October 2023

On the 23rd of every month, distributed
video messages by Directors

December 2023

Customer interviews by headquarters
staff about sales of financial products

December 2023

December 2023

Advanced analysis of customer feedback*3(introduction of RPA and AI)

Senior management and compliance training

December 2023

Diversification and sophistication of monitoring methods*3(Phone recording system, voice and video recording of visits)

September 2024

Implemented Fiduciary Duty Special Award

2H of FY2023

President is in charge of the Audit
Department and deeply involved in PDCA.

October 2023

Linking performance reviews to humanresource development policies

April 2024

Establishment of operational
management system
Implemented the four major measures concerninginvestment-type financial instruments
Specialist training in retail comprehensive consulting

Implementation
Implementation*1 Addition*2
timingTraining and video distribution for Fiduciary Duty,
behavioral change to focus on activity volume
Elimination of the Bank’s profit targets
for the retail departments
Eliminated return-of-profit incentives completely from Chibagin
Securities’ transactions based on the Bank referral

Introduced culture audits
Strengthening Group cooperation in auditing departments through participation of theBank’ Audit Department in the meetings of Chibagin Securities’ Audit Department

September 2024

March 2024
September 2023

April 2023

Strengthening business management Implementation
Implementation*1 Addition*2
timingsystemApril 2023

Dispatch of Directors and general managers
from the Bank to Chibagin Securities

September 2023

Establishment of the Group Improvement Office

October 2023

Implemented customer satisfaction
surveys at all Group companies

October 2023

The Chairperson of the Board of Directors
was changed to an Outside Director.

*1 Implementation completed or ongoing (out of a total of 57 measures,major measures are listed.)*2 Additional measures after submission of the business improvement plan
*3 Measures scheduled for implementation (highlighted)

April 2023

One on one meetings between the
President and Group company presidents
Opinion exchange meetings between the
Bank’s Directors and Group companies
Introduced skill matrix for executives ofGroup companies

Financial and Corporate Data

∙ There were three elements of (1) motivation, (2) opportunity,and (3) justification for 1st line (branch and sales division)∙ Problem in risk detection for 2nd line (management division) and 3rdline (audit division) and inadequate response for the detected risks

Penetration and thoroughness of
the Purpose and Vision

Strengthening internal control system

Start of Fiduciary Duty Hearing

Major Initiatives

Root cause analysis

Penetration and thoroughness of the Implementation
Implementation*1 Addition*2
timingPurpose and Vision

Management Base Supporting Value Creation

Process for formulation of the business improvement plan

List of Major Measures

2nd line(Japan Securities Dealers Association feedback)

Roadmap for business improvement and recurrence prevention

3rd line

To consider improvement measures

Penetration/Establishment

Group governance

Locus of responsibility

Execution and effectivenessverification of each measure

Organizational culture

Interviews withthe parties concerned

Root cause analysis

Establishment offrameworks based on
the business improvement plan

Proposal ability(Including outside lawyers)

Confirmation of facts

At present

Submitted business improvement plan on July 24, 2023

Incentive

Investigation and Improvement
Planning Committee

Progress of the initiatives as of March 31, 2024:
https://www.chibabank.co.jp/english/pdf/topic/2024/topic20240415_01.pdf

Human Capital Management

50 or more meetings held by the Investigation and Improvement Planning Committee after receiving the recommendation®

Growth Strategy for Value Creation

Following confirmation of the facts and root cause analysis by the Investigation and Improvement Planning
Committee and discussions at several meetings of the Board of Directors and the Nomination, Remuneration
and Corporate Advisory Committee, the Bank recognizes that the root causes of the matters subject to theadministrative actions were issues concerning operational management, internal control, and business management systems and has formulated respective improvement and recurrence prevention measures.
Moreover, considering that ensuring thorough penetration of the Purpose and Vision throughout the organization is the key to achieving improvement with respect to all these issues, the Purpose and Vision
Penetration Project Team is spearheading cross-organizational initiatives, while reflecting the expertise of
external advisors.

Regarding the progress of the initiatives, we implemented various measures based on the business
improvement plan, including review of the organizational structure and assessment system and planningof training and study sessions. Of the total of 57 measures, implementation of major measures wascompleted by the end of March 2024, except for certain measures involving system development. In
addition, we have conducted verification of the effectiveness of these measures through various internaland external surveys and questionnaires, such as an engagement survey and NPS® questionnaire
surveys, in an effort to enhance effectiveness through a Plan-Do-Check-Act (PDCA) cycle.
The progress of the initiatives is disclosed on our website in conjunction with quarterly reports to the
Kanto Local Finance Bureau. * NPS is a registered trademark of Bain & Company, Inc., Fred Reichheld, and NICE Systems, Inc.

Chiba Bank’s Value Creation

Root cause analysis and formulation of a business improvement plan

Progress of initiatives for business improvement and recurrence prevention

Messages

On June 23, 2023, the Bank was the subject of administrative actions (Business Improvement
Order) for situations where a problem related to investor protection is recognized by the Kanto
Local Finance Bureau, pursuant to Article 51, Paragraph 2 of the Financial Instruments andExchange Act, regarding the financial instruments intermediary business related to the solicitationand sales of structured bonds. Also, in accordance with Article 51 of the Financial Instruments
and Exchange Act, Chibagin Securities was the subject of administrative actions (Business
Improvement Order) from the Kanto Local Finance Bureau regarding business operations that
violated the suitability principle for solicitation of sales of structured bonds.
Recognizing these to be matters of the utmost gravity, following thorough root cause analysis,on July 24, 2023, the Bank and Chibagin Securities submitted to the Kanto Local Finance Bureau
their respective business improvement reports including recurrence prevention measures. In
addition, having clarified management responsibility, we imposed disciplinary action on those
involved.
We have subsequently continued to report quarterly on the progress of our initiatives forbusiness improvement and recurrence prevention based on the business improvement reports.

October 2023
November 2023
April 2024
September 2023
September 2023
April 2024

The Chiba Bank Integrated Report 2024

14

Messages

Initiatives for Business Improvement and Recurrence Prevention in response to Administrative Actions

Major initiatives for business improvement and recurrence prevention

Chibagin Group

Employees

Job satisfaction/compensation

Human Resources Development Policy

Supporters

Investors

Dividends

Offer an empathetic set of values

Contribute to resolution of regional societal issues

Fiduciary Duty Policy

Fiduciary Duty Policy

Policy for acting “for the customer”

Human Resources Development Policy Policy for “promoting the growth and development of employees”

Become a person who keeps doing the utmost for the customer, the region, coworkers, family, and oneself

Think things throughUtilize your own strengths

Gain more supporters“Okane no Basket”(Money Basket)

Chibagin
Money Guide

PaperlessImprovement 1: Introduction of four major measures

Ratings ofactivities volume

Chibagin
AcademyImprovement 2: Review of sales evaluation method

Improvement 3: Improvement of knowledgeof responsible staff

Improvement of efficiency
Increased number of interviews

Sales performance

Number of effective interviews

Improvement ofability to makeproposals

Contract closing rate

Average spend per customer

Avoiding a decline in sales performance by improving the number of effective interviews,
contract closing ratio, and average spend per customer
Improve customer resolution
Increased opportunities for proposals
Branchmanagedcustomers

Other effects of this measure• Increase in the number of digital customers due to the introductionof digital channels (App Investment Trust, Chibagin Money Guide)• Increased opportunities for proposals due to improved digital customer resolution• Promoting recurring-revenue businesses by improving customer satisfaction• Securing cross-use proposal opportunities by increasing the interview time
• Improvement of employee engagement

Digitalcustomers

Non-digital
customers

New measures and new assessment system for the retail businessa solution to the customer’s problem?

the realization of a prosperous lifestyle for the customer?

An Engagement Bank Group that works closely with the community

Conceptual diagram of the Purpose, the Vision, and the Three Pledges

Re-establishing the monitoring system
In order to strengthen functions of the second line (administrative departments), which oversees operations of branches and offices, in October 2023 the Customer Support Monitoring Office was establishedin the Compliance and Risk Management Division and the workforce of this division was increased.
Moreover, we conduct NPS® questionnaire surveys every month for retail customers who had face-toface transactions of financial products to measure customer loyalty (degree of likelihood that customers
will recommend the Bank’s products and services to their family members and friends).
Furthermore, we are promoting development of new infrastructure for effective performance of thesecond line functions. A tool for gathering and analyzing customer feedback and a recording systemusing smartphones for business purposes are scheduled for introduction in the first half of FY2024.

Management Base Supporting Value Creation

Whenever making a proposal to a customer or making a business decision, we always stop and consider, will this proposal or decision lead to

VisionApp Investment
Trust“Become someone who keeps fighting for the customer.”Three Pledges - Action principles for the achievement of the Purpose and the implementation of fiduciary duty -the realization of the customer’s wish?

Proposal support
by roboadvisor

Human Capital Management

Support for prosperous lifestyles

Customers

Increased work efficiency and longer interviews with customers

Growth Strategy for Value Creation

To create a local community better suited to bringing each person’s hope to life

PurposeSales activities with an emphasis on activity volume and fiduciary duty

Chiba Bank’s Value Creation

When formulating the business improvement plan, the Bank
To create a local community better suited
Chiba Bank to bringing each person’s hope to lifeemphasized that the Purpose and Vision should serve as the
Public Relations Division
1-2, Chiba-minato, Chuo-ku, Chiba-shi, Chiba 260-8720, Japanaxis of action and judgment for the Bank’s officers andTelephone: 81-43-245-1111 Fax: 81-43-244-6654
E-mail: koho@chibabank.co.jp
employees.
Bank’s website: https://www.chibabank.co.jp/english/
Now, the Purpose and Vision are at the heart of all the Bank’s
policies and guidelines, including the Fiduciary Duty Policy andHanako Chiba
the Human Resources Development Policy.
In order to enhance recognition internally and externally, thePurpose indicated on a business card
Purpose and Vision are displayed on business cards of officers
and employees, the news release form, etc. In addition, weestablished the Three Pledges.
The Three Pledges are: Whenever making a proposal to a customer or making a business decision,
we always stop and consider, “Will this proposal or decision lead to the realization of the customer’s
wish, a solution to the customer’s problem, or the realization of a prosperous lifestyle for thecustomer?” We have created a card on which the Three Pledges are printed so that officers andemployees always carry it with them together with the Fiduciary Duty Handbook, which outlines themindset for customer-oriented business operations (fiduciary duty).
By positioning the Three Pledges as the action principles for achievement of the Purpose and thefulfillment of fiduciary duty, we aim to cultivate a sound organizational culture.

From April 2023 onward, we introduced four measures for sales ofinvestment trusts: Okane no Basket(Money Basket), a new proposal tool;
App Investment Trust, a non-face-toface channel; paperless investment
trust procedures; and Chibagin Money
Guide, a web portal. In addition, we
abolished profit targets for retaildepartments of the Bank’s branches
in October and revised the personnel
assessment system to emphasize
fiduciary duty, activity volume, etc.
The number of effective interviews
with customers by sales representatives is approximately twice that
before the revision of the assessment
system. Making proposals using
Okane no Basket, the average spend
per customer has increased and thus
the positive impact is apparent.
The Bank completely suspended
sales of structured bonds, whichwere the direct cause of the administrative actions and, in principle,
suspended referral of its customers
to Chibagin Securities.

Messages

Penetration of the Purpose and Vision and establishment of the Three Pledges

Strengthening comprehensive proposal capabilities in the retail business* NPS® is a registered trademark of Bain & Company, Inc., Fred Reichheld, and NICE Systems, Inc.

To ensure the administrative actions (Business Improvement Order) imposed by the Kanto
Local Finance Bureau on June 23, 2023 never fade away, we have designated the 23rd of
every month “Fiduciary Duty Day.” Fiduciary Duty Day is an opportunity for all officers andemployees to remember the gravity of the administrative actions and our pledge that there
will be no recurrence. For example, they receive video messages from the president andother members of the management team on Fiduciary Duty Day.
Moreover, we have increased opportunities for dialogue between officers and employees.
Interactive communication is leading to enhancement of employee engagement.

15

The Chiba Bank Integrated Report 2024

Following the Business Improvement Order, we accord priority to customers

Financial and Corporate Data

Initiative to ensure administrative actions never fade away - Establishment of “Fiduciary Duty Day” -Strengthening governance
Effective from April 2024, the Chairperson of the Board of Directors was changed to an Outside Director for
supervision of corporate management from an objective standpoint independent from those who executebusiness. Moreover, the Group Improvement Office, which directly reports to the President, implemented
360-degree evaluations of headquarters organizational units, in which sales branches evaluate headquarters.
Furthermore, since FY2023 the Bank has been handling all the recruitment processes for itself and otherGroup companies. Other initiatives include holding of meetings between executives of the Bank andemployees of Group companies to exchange opinions and personnel exchanges among Group companies.
The Chiba Bank Integrated Report 2024

16

Messages

Message from the CSO/CDTO

Aiming to be a banking
group that truly serves
its customers andthe regions

Director and Senior Executive Officer(Representative Director)
Group Chief Strategy Officer (CSO)
Group Chief Digital Transformation Officer (CDTO)

Even further acceleration of DX strategy

The Chiba Bank Integrated Report 2024

Accelerating DX Strategy
Digital Channels
Corporate
portalApp

PaperlessSeal-lessNo need tovisit branch

Functional enhancements
Communication
with customers
atanytimeand anywhere

Corporate

Increasein transactions

Advertising

BaaS
New technologies

RetailTSUBASA smile
Paperless Improvement ofoperational efficiency

Reallocation of
personnel togrowth areas

Increasein fans

To Strengthening consulting(sales, planning, etc.)

Non-financial businessAD

Face-to-Face Channels

Creation of the optimal
customer experience

Financial and Corporate Data

17

The diagram on the opposite page shows ouroverall DX strategy. The promotion of thisstrategy will involve generating a virtuous cycleof “increase in transactions” and “redeploymentof personnel to growth areas,” through the
expansion of the channels that connect us tocustomers, including digital, face-to-face, andremote channels, as well as promoting databased one-to-one marketing.
The important thing is to continue “creating
the optimal customer.” This means increasing
the number of customer contact points,
analyzing data obtained from those contact
points, making appropriate proposals whencustomers want them, and receiving
compensation with smooth procedures,
including follow-up inquiries.
We will strengthen both non-face-to-facechannels, which allow customers tocommunicate with us regardless of time andplace, and face-to-face channels, which allow
customers to consult with us in person.

Regarding face-to-face channels, we arestrengthening our customer consulting functions
through the development and redeployment of
personnel. On the other hand, we use our remotechannels, which are halfway between our digitaland in-person channels and are used to provide
customers with more specialized consultations
about inheritance procedures remotely. In this way,

Management Base Supporting Value Creation

It has been two years since I assumed the Group
Chief Digital Transformation Officer (CDTO) in
April 2022. In that time, the Digital Innovation
Division has evolved into the Digital Strategy
Division, and we have built a structure for the
integrated implementation of all relevant
operations, from improving the convenience of
direct channels to the planning and developmentof products and services and their promotion tocustomers. In addition to enhancing the functionsof the Chibagin app and Chibagin BusinessPortal and improved operational efficiency, we
have taken on challenges in new areas such as
the Metaverse and the advertising business.
With the number of registered users of the
Chibagin app now exceeding 1 million, nonface-to-face channels are becoming importantfor more and more transactions, including
opening new accounts and applying forinvestment trusts. Our customers seem to bequite happy with these channels, and we willcontinue to accelerate our DX strategy evenfurther.

Creating the optimal customer

Human Capital Management

Challenge of “DX for the whole region”

Growth Strategy for Value Creation

Mutsumi Awaji

Chiba Bank’s Value Creation

From my experience as Group CHRO, I amstrongly aware of the strength of an organizationthat attracts diverse personnel and theimportance of human resources development.
Here at the Digital Strategy Division, many midcareer hires, as well as employees returning fromexternal trainee programs and employees assigned
voluntarily through open recruitment, are working
toward their mission of “creating the optimal
customer.” This is a field of advanced diversity, withwomen playing leading roles in projects such as
development of the Chibagin app, new businesses
launched in the last year including the advertisingbusiness, and data marketing.
Thanks to efforts to broaden the DX personnel
base, we now have approximately 1,700 DX
base personnel, and we have recently embarked
on the development of personnel who are able touse AI. Alongside this expansion of the DX
personnel base, we will also take on thechallenge of advancing employees’ skills. It is thepowerful team strengths of our diverse humanresources that underpin the evolution of DX, andwe will continue to enhance those strengths.

Messages

we have established a system that enables
customers to undertake the necessary procedureswith peace of mind without having to wait.
Our aim is to eventually reach 1.5 million
registered users of the Chibagin app. This figure
represents about half of the active accounts ofretail customers and is equivalent to one-fourth ofthe population of Chiba Prefecture.
While we are working to enhance the functionsof the Chibagin app, my sense is that we still havea long way to go before our customers will truly
appreciate it as being “convenient” and “useful”.
Simply adding more and more functions will notnecessarily mean that we are providing customers
with truly valuable services. With the addition of anengagement function in the first half of FY2024, I
believe that we have reached a phase in which we
can start working on functions that will allow us tohave “dialogue” with customers. The information
we deliver to customers will give those customers
new insights, which will in turn prompt them to takenew actions. Through the ongoing repetition of thiscycle, we will pursue deeper transactions withcustomers.
In addition, we will actively work to provide
services to support our business partners’ own
digitalization efforts and help local governments topromote cashless and paperless operations. We will
also take on the challenge of promoting DX acrossthe entire community, including customers (“DX for
the whole region”). Our goal is to increase thenumber of “fans of Chiba Bank” by further
accelerating the DX strategy in both digital andin-person channels, improving the convenience andstability of non-face-to-face (digital) channels, andgiving customers trust and peace of mind throughour consulting proposals via in-person channels.

Diverse DX personnel and their development

Remote Channel
One-to-One
MarketingRegional trading
company

Al analysis

Home Page
Marketingscenario

Specialized procedures and consultation
Preparation to keep customers from waiting

Platform

The Chiba Bank Integrated Report 2024

18

Messages

Outside Directors Discussion Meeting

Messages
Chiba Bank’s Value Creation

To become a banking
group that continues togrow with the region,
with our Purpose andVision as the focal pointof management
Yasuko Takayama

Yuko Tashima

Takahide Kiuchi

Director[Outside Director]

Director[Outside Director]

Director[Outside Director]

Director[Outside Director]

19

The Chiba Bank Integrated Report 2024

Kiuchi I commend the fact that the Purpose
and Vision have penetrated throughout theGroup in such a short time and that they have

Tashima I felt the same way as you both.
When I have accompanied the Audit &Supervisory Board Member on their on-site
audits to the branches, I have seen that efforts
to achieve the penetration of the Purpose andVision have started with activities such as

What is your evaluation of theBank’s non-financial businessinitiatives?

Financial and Corporate Data

Takayama In FY2023, the Bank proceededwith its initiatives for the first year of the MidTerm Plan and initiatives based on the business
improvement plan pertaining to theadministrative actions. My assessment is thatthe management team is executing thebusiness improvement plan with strong
conviction and an unflagging resolve toregenerate the company.
The Mid-Term Plan overlapped with thebusiness improvement plan, and there are threepoints where initiatives made more progress
than I initially expected. The first point is thethorough efforts undertaken to achieve theunderstanding, penetration, and practice of the
Purpose and Vision. The second point, involving“enhancing the quality of existing business,”one of the basic policies of the Mid-Term Plan,
is that the Bank is being thoroughly
implemented especially in the retail business, astance of offering value that supports thelifestyles of individual customers and the pursuitof customers’ best interests. The third point isthat group governance has been strengthened.
In addition to the reinforcement of internalmanagement systems, I was pleased to see
deep, wide-ranging initiatives being undertaken
to achieve collaboration between the Bank and
the Group companies, as well as theindependence of the Group companies. My
view is that these initiatives have laid thefoundations for future sustainable growth.

displaying posters inside the branches andreciting them in unison. As time has gone by,
Bank and Group company employees havestarted to consider what they should dothemselves, and they are implementing
initiatives such as in-house presentations at thebranches. These kinds of actions have given
me a sense of the progress being made withthe penetration of the Purpose and Vision.
In circumstances where priority needed to begiven to the business improvement plan in
response to the administrative actions, theexecutive side combined that plan with theinitiatives under the Mid-Term Plan andproduced results. I was greatly impressed bythat, and I look forward to seeing outcomesthat exceed the plan in its second and thirdyears as well.

Management Base Supporting Value Creation

Could you please reflect on FY2023,
the first year of the Mid-term Plan?

taken root as guidelines from which Bank andGroup company employees can reflect on all
their actions. Going forward, I look forward toeven stronger cross-Group collaboration and to
the provision of services of even higher quality
to customers.
After the Bank was issued with the Business
Improvement Order, adverse winds against theinvestment trusts and personal annuities
business, a reexamination of incentive systems,
and other factors probably caused somebewilderment on the ground in business
operations, but business performance remained
strong. When the plan was formulated, I feltthat the net profit target of 75.0 billion yen for
the final year of the plan would be challenging,but it is now firmly in sight. Shareholder returns
have also been raised to a level that iscomparable with other banks, and myassessment is that the Bank is being looked
favorably on by the share market as well.

Human Capital Management

Outside directors, Yuko Tashima, Yasuko Takayama, and Takahide Kiuchi, alongside newly
appointed Outside director, Ryoji Yoshizawa, held a discussion meeting to reflect on the first yearof the Mid-term Plan and to exchange opinions on the business improvement plan and mediumto long-term corporate value enhancement.

Growth Strategy for Value Creation

Ryoji Yoshizawa

Kiuchi In the Bank’s growth strategy,
expanding the non-financial business based on
the expertise and assets that it has cultivated todate in financial services is extremely important

The Chiba Bank Integrated Report 2024

20

Messages

Outside Directors Discussion Meetingthe plan steadily. Also, since the administrative
actions were issued, we, Outside Directors, havebeen attending more meetings than previously.
The additional meetings we are attending areprimarily those related to Group companies,
such as the Group Supervision Committee and
the Group Promotion Committee. The Bank
Group also regularly reports on progress of thebusiness improvement plan to the authorities
after a resolution by the Board of Directors.
In day-to-day business activities, it isimportant to gather and analyze customer
feedback and check whether there are any
problems or other matters that require action.
Development of frameworks for analyzing andchecking customer feedback using systems isunderway. I plan to watch over the progress ofthese measures, while checking the situation on
the ground, including continuing my visits to thebranches.

Growth Strategy for Value Creation
Human Capital Management

Ms. Takayama, you were recently
appointed Chair of the Board of
Directors. What are your thoughts on
the strengthening of governance?

Management Base Supporting Value Creation

Takayama Mr. Yoshizawa’s appointment as a
new Outside Director in June 2024 has further
increased the diversity of the Board’s
membership. I hope to enhance the quality ofdebate and bring more energy to discussions,with a view to improving the effectiveness of the
Directors and enhancing medium- to long-term
corporate value.
I recognize that, to achieve this, appropriate
agenda setting is an important role of the Chair.
Given the organizational design as a company
with an audit & supervisory board, there tends tobe a large number of proposals on the agenda
The Chiba Bank Integrated Report 2024

Financial and Corporate Data

The Chiba Bank Integrated Report 2024

Takayama When the business improvement
plan was in the formulation stage, in Board of
Directors and other forums, I called strongly forthe entire Group to change its awareness ofcustomers’ voices and to become moresensitive to them. I also recommended theestablishment of a mechanism for thecentralized management of the collection,
analysis, improvement, and follow-up of
customer feedback and the strengthening oforganizational frameworks and systems to
execute that mechanism.
In the execution of the business improvement
plan, I have been closely monitoring therelationships between Group companies and theBank.
In the strengthening of Group companies’
governance, I have focused on communication
between Bank employees and the employees ofGroup companies, and I have mentioned any
concerns at Board of Directors.
One strength of the Bank is its extreme
swiftness in making and executing decisions.
However, it does need to take care regarding
points such as whether any risks have been
overlooked, whether communication of
information from the lower levels to the top is
being obstructed, whether negative informationfrom on the ground is reaching the management
team promptly, and whether inter-organizational
containment functions are functioning
appropriately. I plan to keep checking thesekinds of points in Board of Directors.

Tashima Regarding the high rate of complaints
from customers compared with the number ofactive accounts, even though information camefrom the self-regulatory bodies, there was noproper recognition of how serious the situation
was, and the situation was not being properly
reported up to the management team. This wastruly disappointing.
In the formulation of efforts to prevent
recurrence, an investigative committee, whose
members also included external attorneys,
conducted an investigation and devised
appropriate measures. In that process, theOutside Directors also received briefings andwere given opportunities to express theiropinions, and those opinions have beenreflected in the business improvement plan.
After the formulation of the business
improvement plan, Group companies also
engaged seriously in improvement measures,and the entire Group has united to implement

Chiba Bank’s Value Creation

21

The Bank was issued with administrative
actions in June 2023. What approaches
were taken to make improvements andprevent a recurrence?

Kiuchi It is also important that employees of the
Bank and Group companies are sincerely
remorseful and make as much effort as possible
to prevent the same thing from happening again.
Unless they take fundamental, substantive
actions, and not just superficial responses, they
will never be able to completely prevent a
recurrence. Analysis of the true causes revealed
a tendency for sectionalism within theorganization, a lack of openness, and problems
with Group governance. I hope that these efforts
to analyze the true causes will continue.
On the other hand, if Bank and Group company
employees become excessively apologetic,
business will stagnate, which will be to the further
detriment of stakeholders. I hope that they will usethat remorse as a springboard to challengethemselves proactively to achieve growth.

Messagesfor building sturdy businesses that canwithstand changes in the external environment
and for the sustainable enhancement ofcorporate value. In terms of the realization of
the Purpose, the expansion of non-financial
business is also necessary to solve the various
problems faced by the region and bring aboutprosperous lifestyles for individuals. I hope thatthe Bank will leverage its strengths andproactively take on the challenge of new
businesses that will contribute to the regional
economy.
My particular focus has been on Chibagin
Market and Himawari Green Energy. As
planned, Chibagin Market turned its first profit
in FY2023, the third year since its
establishment. It started with Step 1, a
crowdfunding site and an e-commerce site
offering regional products, and it has now
moved on to Step 2, a house purchaseconcierge service. Its future plans for Step 3
include developments in the area of“connections with people’s daily lives,” including
health and nursing care, education, and foodretailing. I look forward to its contributions to
the realization of customers’ prosperous
lifestyles.
Himawari Green Energy has as its purpose
the strong promotion of decarbonization in thelocal community, achieved by the Bank Group
independently conducting energy generation
operations that utilize renewable energy. With
the launch of the Asahi Power Plant in
December 2023 and other moves, it will be able
to provide clean energy through power
generation with renewable energy.

22Messages

Outside Directors Discussion Meeting

Yoshizawa According to Ministry of Economy,
Trade and Industry statistics, the growth incapital investment within Japan by mediumsized companies in the past ten years has been
approximately double that of large enterprises.
Regional financial institutions are being called on
to provide large amounts of credit and servicesof high quality to meet the needs of those midtier companies. I consider the TSUBASA
Alliance and collaborations with other banks as
one solution to meeting such needs, and Chiba
Bank is in a unique position in this regard.
Research of financial institutions globally thathave enhanced their corporate value shows thata common feature of such institutions is thatthey respond to the issues of their region ofbusiness and that they have their own uniquequalities. I hope that the Bank will accurately
identify the needs of the local community and its
customers and promote and expand businesses
that take advance of the Bank’s potential torealize further growth.

Human Capital Management

Tashima I would like to see the continued
steady promotion and advancement of themeasures in the Mid-Term Plan, including new
businesses in non-financial sectors. My hopes
are that the Group will help solve customers’ andsociety’s issues in its base of Chiba Prefectureand surrounding regions and contribute of therealization of a sustainable society. I also hopethat it will demonstrate leadership in allianceswith other banks and work hard for theadvancement of regional banks as a whole.

Growth Strategy for Value Creation

Could you tell us your expectations of
the Bank Group for the enhancement of
medium- to long-term corporate value?
Takayama My view is that corporate value is thesum of trust in the Bank Group accumulated
through its past and present business activities
and social activities, and expectations for the
future. With the recent issuing of the Business
Improvement Order, I believe that the entire Grouphas recognized anew the importance of trust.
To further elevate that trust, based on the
deep ties with regional customers that havebeen cultivated over many years, I would like to
see the Bank Group focus its efforts more thanever on sustainable growth alongside thecommunity. Further, in the promotion of new
business initiatives, I hope that the Bank Groupwill actively extend new ties of trust withstakeholders beyond regional and sectoralboundaries.

Management Base Supporting Value Creation
Financial and Corporate Data

Tashima About a year has passed since the
new Human Resources Development Policy wasestablished, and there are signs of changes in
the organizational culture. However, I do believethat more time is needed for the policy to takefirm root. Under the Purpose and Vision, it isimportant for each and every Bank and Group
company employee to think about what they
can and should do for customers and the local
community, and about their vision for what they
themselves want to become. I believe thattaking advantage of the Chibagin Academy tolearn, acquiring areas of specialization, andcontributing to society are the right directions.
I also hope to listen to real opinions on the
ground and to keep checking how the Human
Resources Development Policy and various
initiatives are being received and what further
needs there are.

Yoshizawa I hope to take advantage of theknowledge and insights that I have cultivated todate to contribute to the medium- to long-term
advancement of the Bank and the enhancementof corporate value. I have experience working fora regional bank, a foreign-capital bank, and aforeign rating agency, so I have observed thebanking industry from both inside and outside. In
my analysis and evaluation of the banks of theworld, I have deepened my understanding of thestrengths and distinctive characteristics ofJapanese banks.
In dialogues with various stakeholders, theyexpress a wide variety of thoughts and opinions,but they all share a common ultimate goal of theenhancement of medium- to long-term
corporate value. I hope to communicate properlywith stakeholders to clarify what kind ofpathways there are to reach our common goals
and what kind of gaps there are between the
Bank’s thoughts and those of its stakeholders,
and to make recommendations for theenhancement of corporate value.

systems, risk management, and auditing, but
the next challenge will be unification on theawareness front. The Purpose and Vision havepenetrated considerably within the Bank, butthere is still some way to go when viewed
across the entire Group.
Further, to promote unification in terms ofoperations, it will be important to venture boldly
into non-financial services to offer solutions thatwill help solve various issues faced by the region
and deliver services of a higher quality.
In addition to strengthening collaboration
between the Bank and the Group companies, I
look forward to seeing the individual Group
companies, which operate a variety ofbusinesses, including securities, leasing, regional
trading companies, energy generation
businesses, and advertising, to carve out new
businesses with their own identity and ingenuity.
Expanding the profits of the Group as a wholewith a good balance of Group unification andinitiatives by individual Group companies will, I
believe, lead to the realization of the Purpose.

Chiba Bank’s Value Creation

What are your feelings about thepenetration of the new Human
Resources Development Policy and thechanges in organizational culture?

Mr. Yoshizawa, you have recently been
newly appointed as Outside Director.
What kind of role do you hope to fulfill?

Messagesof our meetings. By organizing those proposals
into those related to strategy and those related
to governance and risk and clarifying them from
offensive and defensive perspectives, we havebrought some balance to the pacing ofdeliberations. Improving the quality of thecontent of reports is also key, so I intend to askthat reports focus on the substantive issues andtrue causes from a macro perspective, and tomove discussions forward based on suchreports.
I also recognize that the supervision ofmanagement from an objective viewpoint is arole expected of me as an Outside Director
entrusted with the position of Chair. I hope tomove discussions forward while monitoring the
Bank Group’s initiatives from a bird’s-eye
perspective, always remaining conscious ofwhether strategies are appropriate given socialand financial trends in Japan and overseas,
whether those strategies deviate from
customers’ values and their expectations of theGroup, how shareholders view the Group, andwhether we are fulfilling our accountability
toward shareholders.

Kiuchi The strengthening of Group governanceand intra-Group collaboration is key. Progresshas been made in unifying the Group throughvarious mechanisms, including personnel
23

The Chiba Bank Integrated Report 2024

The Chiba Bank Integrated Report 2024

24

Messages

Message from the CRO

New infrastructure for effective 2nd functionality
Recording system using smartphones
for business use

Tools for gathering and analyzing customer feedback

Customer feedback

Typology/categorization

To expandthe scope ofcollection

Negative

Contact center
recordingSNS
CRM

Other data
Branch information
Product information

Complaints

Collecting information from various perspectives

Questionnaire

Incident
Customer information

Voice Typology

Creating a database
efficiency
of aggregation

True cause analysis
Identification ofcross-operational
issues and formulationof recurrence
prevention measures
based on individual
analysis

Requests
Opinions
Compliments
Positive

Priority
setting

Categorization
by attribute

ReportingGathering and aggregating

By product/
serviceBy customer(age/area)

Department
in charge

Easy

SafetyCertainly

Minimal tapping

Delete data
after sending

Data retransmission
in response tocommunication

Financial and Corporate Data

The Chiba Bank Integrated Report 2024

The background to the administrative actions(Business Improvement Order) was the Group’s
predisposition toward prioritizing the pursuit ofprofit. Alongside strengthening of the internal
control system, reform of the organizational
culture, in which this predisposition was
accepted, is another key initiative for
improvement and recurrence prevention.
In order to respond to customers’ increasingly
complex and sophisticated needs, the Group has
continuously endeavored to develop high-valueadded products and services that transcend theboundaries of finance and non-finance, thereby
enhancing its capabilities to maximize its
usefulness for customers. Achieving highperformance by being useful to customers is thehigh road to business success. As a matter ofcourse, our starting point is “to be useful tocustomers”. Unfortunately, however, we havesomehow misunderstood the order of things, andour starting point has always been “to improvebusiness performance. I accept that this failure
occurred and lament the fact.
We will receive appropriate compensation forour services and satisfaction of customers, andby improving our business performance andincreasing the strength of the Group, we will
increase our stock price and dividends so that
we can receive stable investments, maintainstable employment, and expand our range ofManagement Base Supporting Value Creation

25

Reform and inculcation of
the organizational culture

Human Capital Management

Following the issuance of administrative actions(Business Improvement Order) in June 2023, theBank and Chibagin Securities are currently
implementing Group-wide measures to improve
operations and prevent a recurrence based on
the business improvement plan.
We recognize the root causes of the problems
were issues concerning “operational
management system”, “internal control system”,
and “business management system”. As theGroup CRO, I consider the insufficiency of our“internal control system” and our second-line
capabilities for detecting and responding to risks
to be a matter of the utmost gravity.
Following the formulation of the business
improvement plan, in a move that clarified myresponsibilities, I was appointed “the General
Manager in charge of Corporate Management”.
We are strengthening risk responsiveness by
consolidating second-line functions in the
Compliance and Risk Management Division forwhich I am responsible, increasing the workforce,and establishing “the Customer Support
Monitoring Office”.
Moreover, to strengthen risk detection
capabilities, we are preparing to introduce asystem for collecting customer complaints,
requests, opinions, and other feedback and forsophisticated analysis of this customer feedback
while also introducing a recording system toestablish highly transparent product explanationand sales processes. In addition, the Complianceand Risk Management Division periodicallyconducts questionnaire surveys and interviews ofcustomers and Group employees. We are putting
in place systems to promptly detect problems
and make improvements with a sense of speed.

We are committed to creating social value andaccomplishing the Group’s Purpose, namely, “tocreate a local community better suited to bringing
each person’s hope to life,” while offering practicalvalue to achieve the Group’s Vision, “anEngagement Bank Group that works closely withthe community.” We are inculcating the Three
Pledges that are the action principles for

Growth Strategy for Value Creation

Strengthen the internal control
systems with a sense of speed

Purpose, Vision, and Three Pledges

Suggestions for improvement

Director and Managing Executive Officer
Group Chief Risk Officer (CRO)General Manager in charge of Corporate Management

Chiba Bank’s Value Creation

Masayasu Ono

achievement of the Purpose and fulfillment of
fiduciary duty to ensure that all Group officers andemployees are always aware of these pledges.
Through dialogue with Group employees
conducted by all officers, our all-encompassing
collaborative endeavor to restore trust within theframework of the Purpose, the Vision, and theThree Pledges is gaining momentum.
Whenever I receive words of encouragement or
criticism from customers, I recall my maxim: “Knowwhat is sufficient.” Remember, the point is not toconstantly overextend yourself, it is not about you.
The important thing is to proceed modestly anddiligently, aware of the circumstances, and deriving
satisfaction from the gratitude one earns. Exercise
self-discipline while continuously endeavoring to
remedy any insufficiency.
Ensuring that all our actions are informed bythis attitude, we will steadily implement initiatives
for improvement and recurrence prevention stepby step, while doing our utmost to meet the
expectations and earn the trust of our customers
in the region.

Messages

services and growth through investments in new
businesses and DX. By repeating this process,we will stay close to the community andcontribute firmly to the sustainable growth of theregion.
In order to return to the basics of what itmeans to be a regional financial institution, we
have sent a message to all Group employees toshare the joy and satisfaction we feel when we
receive words of encouragement from
customers, for example “I am glad I consulted
you. thank you.”, as an important Group-wide
value.

Strengthen the internal control
systems and reformthe organizational culture to
restore confidence in the Bank

Strengtheningof check-andbalance functions

Developmentof collection andanalysis tools

The Chiba Bank Integrated Report 2024

26