Strategies of The 77 Bank, Ltd

Grow th S trategy

Best Consulting Bank

Human Resource Development

In order to become a bank that is truly supported by its customers and to establish a solid management base for the future, we have
set the image of the bank we aspire to become as the following, and actively trained specialist resources.

Interview 01“Best Consulting Bank” that responds to customersʼ needs by offering the optimum solutions

Striving to solve the issues of quality assurance
and manpower shortage on the front line of manufacturing.

Consulting approach targeted by The 77 Bank"Consulting services"at The 77 Bank

"Scope of consulting"at The 77 Bank"Consulting service providers"at The 77 Bank

"Purpose of strengthening
consulting capabilities"at The 77 Bank

"Requirements for strengthening
consulting capabilities"at The 77 Bank

Refers to services in which we identify the needs and issues of customers, andpropose optimum solutions by bringing together the collective strength of theGroup, while supporting problem solving and customer development by supporting
the implementation of these solutions.
Consulting covers a broad range of services. We receive consultation requests fromall of our customers, including corporate customers, individuals, and regional publicbodies, in areas requiring specialized expertise such as business succession and
M&As, problem solving through business evaluations, and acceptance of deposits.

Kei Akama

Tohoku Electronics Industry has about 1,000 employees in theentire group, I was forced to be keenly aware of the issue of theshortage of manpower at the manufacturing front line. I believethat these valuable experiences as a trainee at a local company
can be utilized in my current work. I am currently working in the
Corporate Support Office, providing support mainly to customers in the fishery processing industry in the coastal areas of theprefecture that are still on the road to recovery from the Great
East Japan Earthquake. Although the fields and products wehandle are different from those of the company to which I was
assigned, I believe that the fundamentals of manufacturing are
the same. In addition, there are many customers who are facing
issues such as quality assurance and labor shortage in the fieldof fishery processing. My future goal is to contribute to suchcustomers with the specialized knowledge I have acquired on
the program and to solve their problems by making proposals
that take into account their front line of manufacturing behindthe numbers.

As a banking service professional, each and every Bank employee serves as aconsultant, and all Bank employees provide consulting services in their areas of
responsibility.
We will strengthen our consulting capabilities, and work to improve customer
satisfaction and revitalize the regional economy, in order to realize the bank image
sought by The 77 Bank of being the “Best Consulting Bank.”
We will rebuild our structures at Headquarters and branches, as well as human resource
development frameworks, in order to gain an understanding of customer needs andissues, propose solutions, and provide implementation support. In this process, it isnecessary to improve the skills and skill levels of each and every employee.

Training of specialists personnel through external secondments.
Digital field

Japan Digital Design,Inc., MEJAR Digital Innovation Hub (MDIH) ,etc.

3 people

International business/market field

Japan External Trade Organization (UK), Bangkok Bank (Thailand),Vietcom Bank (Vietnam) ,etc.

10 people

Solutions business field

Mizuho Bank, MUFG Bank, Nihon M&A Center ,etc.

11 people

Regional revitalization field

Regional public bodies (Miyagi Prefecture and Sendai City) ,(General Incorporated Association)Tohoku Tourism Promotion Organization

3 people

27 people as of May 31, 2020

17 THE 77 BANK INTEGRATED REPORTI was assigned to Tohoku Electronics Industry Co., Ltd. with
headquarters in Ishinomaki City, Miyagi Prefecture for one year
under the Local Company Trainee program that started in 2018.
I was assigned to the Quality Assurance Department, where I
dealt with automobile manufacturers and interacted with manufacturing sites to ensure the quality of automobile-related parts.
I was interested in the manufacturing industry, including
automobiles and machinery, and I thought I had acquired someprior knowledge before I was transferred to the company, but I
had to make a series of discoveries in the field and gained a lotof insights.
One of the things that left a deep impression on me was thestrictness of quality control. The automobile manufacturer
required us to improve quality down to the smallest invisible
details and to thoroughly eliminate unnecessary costs. In order
to meet these demands, we repeatedly reviewed and improved
our processes and other aspects of our operations while
listening to feedback from the front line. In addition, althoughCorporate Support Department

Service development from the user’s point of view,
learned in the cutting-edge field.
From December 2017 to December 2019, I was assigned for
two years to Japan Digital Design ,Inc., a FinTech company thatprovides services that integrate finance and IT, where I worked
on two major tasks. The first was system development. I
oversaw the programming of the business automation system
RPA, which is also being introduced at our bank, and designed
the process for managing it.
The other task was the service planning for digital currency.
We worked together with external organizations to design
products, procedures for payment, user screen transitions, andlegal and regulatory checks. In particular, 2019 is the first yearof the “cashless era” in Japan, a time of large-scale initiatives,and it was a great learning experience for me to be able toexperience this major turning point firsthand. Cashless is one ofAssistant Manager, Digital Strategy Department

Junya Segawa

the major themes at our bank, and I hope to make use of myexperience.
I learned a lot about digital technology by working in the fieldof FinTech, but the most important thing I realized was to thinkfrom the user’s perspective first. For example, if the system isfor internal use, it must be easy for employees to use, and if it isfor digital currency, it must be easy for customers to use
otherwise, the equipment alone is meaningless. In particular,
I feel that until now, some systems have been designed primarily
for the convenience of the bank, and I would like to review themonce again and change them to systems that focus on theconvenience of customers. I also believe that more open
discussions involving other departments and more flexible
ideas will lead to better services for our customers.
THE 77 BANK INTEGRATED REPORT

18

Image of Business evaluation

Business Evaluation Initiatives
We conduct appropriate business evaluations of the business content and growth potential of clients in various life stages, while
appropriately grasping and analyzing the current state and issues of the regional economy and industry as we actively engage inbusiness evaluations that provide funds smoothly and proposals for solutions to resolve issues.

Major external
support organizations
Development Bankof JapanJapan FinanceCorporation
The Shoko Chukin BankInterview 02

Nihon M&A Center
Miyagi Organization
for Industry Promotion

Tokyo Stock Exchange

The 77 Bank Group
77 Bank
77 Lease
77 Shin-Yo Hosyo

77 Securities

REVIC

77 Researchand Consulting

Miyagi University

Kosuke Takeo

CEO, MAKABE GIKEN Co., Ltd.

Masahiro Makabe

Supporting the company’s development by encouraging expansion
to the private sector, backed up by business strategies.
We interviewed Mr. Makabe, CEO of MAKABE GIKEN Co.,
Ltd. which manufactures equipment for developing newmaterials using Japan’s leading technology, about his
impressions and results of our consulting services.

Makabe: MAKABE GIKEN is mainly engaged in the development and manufacture of equipment for researching metalmaterials and the materials themselves. One of our main
products in recent years has been gas atomized powder
production equipment for use in 3D printers for metals. We
have been manufacturing these products for more than 30
years and provide high-quality powder production equipment.
This is a very niche field, but Mr. Takeo has been visiting ourcompany since before I became the CEO in 2019 to deepen his
understanding.

19 THE 77 BANK INTEGRATED REPORT

Takeo: Even though I was young and not knowledgeable, you
took a lot of time to teach me in detail. It helped me understandthe value of your company, which I could not understand justEquipment for manufacturing gas atomized powder, which is the material for metal 3D
printers. The demand for this material has been increasing in recent years, and MAKABE
GIKEN has been developing and manufacturing it for over 30 years.

Business plan formulation
Financial position improvement
Funding

77 CapitalBusiness succession

Offer solutions bydemonstrating
consulting
functionsby looking at numbers on a desk. I feel that I was able to provide
funding and other support thanks to that. In particular, I wasconvinced that the development and technological capabilities
that you have cultivated over your long history are unrivaled
and will be required in a variety of fields in the coming digitalage. I have been working with Mr. Makabe for about a year anda half on the succession of the business, and we are only in the
final stages of transferring assets and developing the internalmanagement system, but the first thing we did was to develop
the financial foundation of the company.

Sendai Haranomachi Branch

Clients

Issues for enhancementof corporate value

Securing of HR
77 CardSendai Chamber ofCommerce and Industry

Tohoku University

Cultivate andcapture diverse
customer needsby businessevaluations

Makabe: That was one of the issues that I felt we needed toaddress. Since the company’s founding, we have been verymuch a manufacturing-driven company, and we have never
had a solid business strategy in place. In addition, thecompany is currently going through a transition period. For along time, our company has been receiving most of its orders
from universities and other research institutions, but with the
reduction of research expenses, we must now accelerate our
expansion into the private sector. Thus, we asked the 77 Bank
to help us develop a strategy for financial management andsales channel development necessary for this initiative. You
even went so far as to suggest cost setting.

Ｍ＆Ａ
Broader marketing channels
Overseas development
Productivity enhancement

and other foreign countries in the future, and to receive help in
the areas of compliance and legal affairs overseas.
Takeo: Our bank has an extensive platform for overseas
business, from credit inquiries to legal risk management, so we
can provide a one-stop service. We are no longer in an era
when banks only deal with funds. We will continue to meet ourclients’ expectations based on our day-to-day relationship withthem.

The company’s technology is attracting attention both domestically and internationally.
Recently, the company’s excellent powder manufacturing technology has been highly
evaluated, and the company has been conducting R&D and developing new businesses
in cooperation with major private companies.

Takeo: As we started working with Mr. Makabe on formulating
the business strategy, we felt his enthusiasm for the kind ofcompany he wanted MAKABE GIKEN to be in the future, andthis strengthened our desire to respond as the main bank to his
expectations. As for the cost setting, I think it has been difficult
to determine the appropriate price in the absence of competingproducts, but after we estimated the value from various
perspectives, we suggested that it would be possible to set ahigher price for such an excellent and rare technology.
Makabe: In the past, we often took on projects based on theprice offered by research institutes, but now that we have an
objective evaluation from the outside, we have one standard. In
addition, the visualization of our finances has helped us toclarify the path to our sales targets, which has motivated our
employees and made them more cost-conscious. Recently, we
received an order for manufacturing equipment from France,
and we hope to increase our business with Europe, the U.S.,

MAKABE GIKEN Co., Ltd.

Established in 1922, MAKABE GIKEN develops andmanufactures research equipment for developing newmaterials and new materials themselves with abundantknow-how and advanced technology.

THE 77 BANK INTEGRATED REPORT

20

Collaboration with 77 Research and Consulting■ M&A Cases
In order to meet the needs of our customers, we utilize our extensive network to provide support from consultation to the closing of M&Atransactions.
At Branch A, the M&A specialist took the lead in proposing to Company A, a fishery processor that was considering closing down its
business due to the absence of a successor, that the company hand over its business through M&A with a view to utilizing outside
specialized organizations. However, there was no progress on selecting a candidate, and the decision to close the business was being
made.
At that point, Branch B identified the needs of Company B, another fishery processor, to expand sales channels and secure humanresources through M&A with a business feasibility assessment, and information coordination (needs matching) between the two
branches and the head office was speedily carried out to realize the M&A.
As a result of this M&A, Company B was able to expand its seafood processing business by acquiring Company A’s raw material
suppliers and sales routes, and Company A was able to maintain its business and employment rather than simply closing down.
Company B is currently preparing to further expand its overseas business of Tohoku’s food culture (processed marine products, etc.).

M&A fees and commissions/Number of M&A advisory contract clients■M&A fees and commissions
ーNumber of M&A advisory contract clients(JPYmn)49
FY201783
FY2018125
FY2019Brancha

10Information coordination(Needs matching)

Branchb

We interviewed Mr. Sato, CEO of Arces Inc.,
which is working to establish its corporate philosophy
and improve its personnel system through consulting
by 77 Research and Consulting (77 R&C),
a 77 Bank Group company.

Support5
FY2020

Wish to acquire
a company
and expand
its business

The 77 Bank Group members
join forces to help customers
realize their wishes.

Financing

10308

Fishery processing company B(Buying needs)

g

15

15

M＆A
transfer
price

HearinNo choice but
to closethe business

g

0

25
20

200

100

25

Hearin23

300

Fishery processing company A(Sales needs)

30※Funds to acquire
shares of Company A

400

Relationship diagram of M&A cases(Clients )Headquarters

0

External specialist institution■ Signing a Project Finance Agreement for a Wind Power Generation Project in Kami District,
Miyagi Prefecture
We have arranged syndicated loan project finance forthe largest wind power generation project in Miyagi
Prefecture.
JRE Miyagi Kami, a limited liability company in which
Japan Renewable Energy Corporation has an equity
stake, will be the main contractor for the project, which
will construct 10 large wind turbines in Kami, Kami
District, Miyagi Prefecture. After the start of commercial
operation, all electricity will be sold to Tohoku ElectricPower Co., Inc.
We believe that this project will contribute to the“Renewable Energy and Energy Conservation Plan”
formulated by Miyagi Prefecture with the aim ofincreasing the introduction of renewable energy andimproving the self-sufficiency ratio of electricity. In
order to support the promotion of renewable energy
projects and the revitalization of the local economy, a
syndicated loan will be formed by regional banks in
Tohoku to provide project finance for this 42.0
MW-class wind power generation project—one of thelargest in scale in Miyagi Prefecture.
Banks in the six prefectures of Tohoku (Aomori Bank,
Akita Bank, Bank of Iwate , Toho Bank, and Yamagata
Bank, in addition to The 77 Bank) will participate in the
project and work toward the scheduled start ofcommercial operations in April 2023.

21 THE 77 BANK INTEGRATED REPORT

Completion image * This is the completed image at the moment and may differ from the actual appearance of the wind turbine.

Fees and commissions for syndicated loans and commitment lines
Number of transactions handled which involve structured finance(Millions of yen)
800

■Fees and commissions for syndicated loans
and commitment lines

ーNumber of transactions handled which involve
structured finance(Cases)

35

600

400

200

0

Arces Inc., is a company that develops systems such as
weather-related ones. The data provided by our client, theJapan Weather Association, is used in a wide range of fields,
including ministries, local governments, media, railroad
companies, and road management companies. Recently, we
have also developed a system for rockets.
Our company wa s e s t ablishe d in 2010 by be coming
independent from a system company headquartered in Tokyo,
and we inherited the personnel system as it was. However, as
we signed a partnership agreement with a company that wasleading the way in Working Style Reform initiatives, and as thenumber of employees increased, changing the working
environment, we began to feel the need to improve our HR
system. It was right around this time that Mr. Yamazaki, deputy
branch manager of 77 Bank’s Nakakecho branch (currently
deputy manager of the Higashi-Sendai branch), introduced us
to 77 R&C. So we decided to ask their support.
At first, what we wanted to consult on was the HR system,but 77 R&C suggested that we go beyond that area and firstcreate a corporate philosophy, establish a business strategy,
and then develop the HR system accordingly. I was quite
convinced by that proposal.

40

30

15
264
FY201714319
FY2018

16

650

437

FY201920

I think the reason we were able to create a corporate
philosophy based on the thoughts of our employees was that
we were provided with tailor-made solutions to meet thechallenges of our organization. Through the process of
consulting, including employee surveys and hearings, we wereable to deepen communication with our employees and realizethat our company was chosen because of the emotional
connection between our employees and customers. In the
future, we will work with customers to solve various issues on
the basis of our corporate philosophy, striving to gain trust by
focusing on proposal-based system development while valuing
the strong relationship of trust that we have built through ourbusiness activities.

From 77 R&C Staff

We were introduced to Arces Inc., by the Nakakecho
branch and had several meetings with the CEO, Mr. Sato.
After it had been about 10 years since the transfer of thebusiness, he wanted to improve the personnel system
and working environment for further growth. Thus, we
proposed the creation of a plan to promote Working Style
Reform and a Revision of the Personnel System.
As we interacted with the employees throughquestionnaires and interviews, we were convinced that
we could promote their growth and enhance their senseof fulfillment by facilitating communication between them,which would lead to growth as a company. We discussed
various measures with Mr. Sato, and we have supported
the presentation of the Working Style Reform Promotion
Plan to employees and the Revision of the Personnel
System as the next step.
As one of the members of the 77 Bank Group, we willcontinue to support our customers with solving theirbusiness issues in order to live up to their trust.

77 Research and Consulting Co., Ltd.
10

FY2020

Mr. Kaoru Sato, CEO of Arces Inc. (center)
Hirafu Yamazaki, 77 Bank (left)
Katsushi Saiki, 77 Research and Consulting (right)0

A display system of weather data, such as typhoon information andwarnings, in accordance with the requirements of the Japan Weather
Association was developed

77 Research and Consulting conducts research and consulting by leveraging the
network and information-gathering capabilities of the 77 Group. In the consulting
field, we provide business succession, business strategy planning, financial
advice, and various other management issues and requests.

THE 77 BANK INTEGRATED REPORT

22

Overseas Business Support

Interview 03

The Bank provides overseas business support, including support for overseas expansion, development of overseas marketing
channels, and various trade transactions of clients using a broad network led by the Asia Business Support Department, and incoordination with our two representative offices (Shanghai and Singapore), employees deployed abroad in nine cities located inseven countries (regions), and partner overseas financial institutions.

■ Expansion of overseas network【Mexico】
Aguascalientes State(February 2016)

Nuevo León State(September 2016)
Guanajuato State(September 2016)

The Shanghai Representative

Jalisco State(February 2016)

Office covers all of China

Responding to the diverse needs of overseas businesses
with flexible capabilities in cooperation
with local correspondences

Banamex (September 2016)②①【South Korea】
Shinhan Bank and SBJ Bank (December 2015)①②【China】,
Miyagi Prefecture s Dalian Office (February 2011)

Shanghai Representative Office
Established in July 2005③【Taiwan】
CTBC Financial Holding (December 2014)④【Hong Kong】
Hong Kong Trade Development Council (November 2010)
The Bank of East Asia(April 2017)⑦⑧⑨⑥【India】
State Bank of India (February 2013)⑧【Philippines】
Metropolitan Bank(June 2013)

Asia Business Support Dept.
Established in March 2011⑤⑥⑤【Vietnam】
Vietcombank(January 2014)⑦【Myanmar】
Co-operative Bank (July 2017)

The 77 Bank Head Office Building,
6th Floor③④

Singapore Representative Office
Established in May 2016⑩⑪⑨【Thailand】
Bangkok Bank (April 2011)

The Singapore Representative Officecovers the entire ASEAN region⑩【Singapore】
United Overseas Bank
(June 2014)⑪【Indonesia】
Bank Negara Indonesia(November 2012)

Major partner institutions, etc.
*The year and month in parentheses next to each institution indicate the start of partnership■ Number of employees deployed overseas
Dalian, China,
Miyagi Prefecture s Dalian Office1

Shanghai, China

Oversees representative office, etc.

3

Hong Kong

Financial institution

1

Hanoi, Vietnam

Financial institution

1

Bangkok, Thailand

Financial institutions, etc.

2Singapore

Oversees representative office2

London, United Kingdom Japan External Trade Organization

1

New York, United States
total

Financial institution

1
13* As of June 30, 2020

400

300 offices

300

200

151 offices

100

0

2011
2005
Opened Shanghai
Established Asia Business
Representative Office
Support Department

2016

Opened Singapore
Representative Office

2020

been accelerating their overseas business development,
especially in Southeast Asia, and their expansion into
Vietnam particularly has been increasing. We dispatch ourstaff to major financial institutions and Japanese consulting
companies in Vietnam to provide the best solutions to ourcustomers’ needs, including support for local financing andsales channel development.
The spread of the novel coronavirus has become a major
issue in considering future overseas business development.
When facing a situation such as this, especially in overseas
markets, it is important to respond flexibly according to thesituation at the time, rather than sticking to one particularapproach. We are also working on such response, making
ef for ts to utilize more non-face-to-face approaches inoverseas business development, which was based on trafficof p e o p l e. Fo r exa m p l e, in th e a re a of s a l e s c h a n n e ldevelopment, we are actively creating overseas contact
points using online channels. In cooperation with majorcross-border EC management companies and specializedorganizations such as the Japan External Trade Organizationand SME Support, Japan, we are supporting our customers
in introducing non-face-to-face channels and building
systems for overseas business development.
D e s p i te th e c o n s t a nt n e e d fo r c h a n g e i n ove r s e a sbusiness suppor t, our fundamental stance remains
unchanged. Unlike megabanks, we have a long history ofworking with customers who operate businesses in the
Miyagi and Tohoku regions. For this reason, we are able not
only to track numerical information but also to act on thebasis of our firsthand understanding of what our customers
are struggling with and what they want to do about it. We willcontinue to provide the necessary services while keeping
pace with each of our customers.

■ Outline of the Tohoku Food Culture Export Promotion Cooperative Association
Supportfor the development ofoverseas sales channels

Construction of optimaltransportation network

Trade risk measures

Creating productsthat sell

The Tohoku Food Sola Michi Council*
will provide support.

Tohoku Food Culture Export Promotion Cooperative Association (Exporter)
1. Provide overseas sales opportunities
2. Provide opportunities for business interactions(business meetings, etc.)
3. Acting as an agent for export trade administrations
4. Settlement of payment
5. Reduction of logistics costs

Businesses wishing to export overseas
For fruit andvegetables Business

For marine products For livestock products For processed goods
Business
Business
Business︵ Importers︶
Overseas buyers

1407 offices

Akinori Chiba

Export sales

Japanese consulting company

494 offices

500

Main role

Ho Chi Minh,Vietnam■ Number of overseas offices of local companies

One of the strengths of our overseas business support is that
we are able to provide a one-stop service from start to finish
for consultations with customers whose needs vary greatly
depending on the type of business and the target country.
Our goal is to be a “one-stop shop for all your overseas
needs” in our consulting business. In addition to overseas
expansion and development of sales channels, we also
receive many consultations on the acquisition of overseas
human resources due to the declining birth rate and aging
population in the Tohoku region.
In recent years, some of the contents that have been
attracting attention from overseas are the high-quality foodproducts of Tohoku. This has been driven by the registrationof washoku (Japanese food) as a UNESCO Intangible
Cultural Heritage in 2013. However, many customers of
Tohoku’s primary industry said that it was difficult for them tomove forward on a single-company basis when they wereaiming to expand overseas. In response to this, we haveo r g a n i ze d t h e “ To h o k u Fo o d S o l a M i c h i C o u n c i l ” i ncooperation with specialized organizations in various fields,such as logistics and insurance, to support the promotion ofexports of high-quality and safe food, agriculture, forestry,
and fisheries products from Tohoku. From a long-term
perspective, we believe that by connecting the dots that are
products of Tohoku companies and expanding them into aplane of the Tohoku brand as well as by promoting Tohoku’s
food culture to the world, we can help businesses increase
their sales.
We also have one of the largest overseas networks among
regional banks in the Tohoku region, which enables us top r ov i d e d e t a i l e d s u p p o r t f o r t h e ove r s e a s b u s i n e s sdevelopment of customers in a wide range of industries
throughout the region. In recent years, our customers have

Assistant Manager,
Asia Business Support Department

Overseas
sales channel
Department
store
Restaurant

Other* Tohoku Food Sola Michi Council
Established with Sendai International Airport Co., Ltd., TOPPAN PRINTING CO., LTD., NIPPON EXPRESS CO., LTD., and Mitsui Sumitomo Insurance Co., Ltd., this council aims to connect Tohoku andthe world through food, bringing revitalization of the community.

23 THE 77 BANK INTEGRATED REPORT

THE 77 BANK INTEGRATED REPORT

24

Initiatives for Retail Customers

Interview 04

We provide support for asset
succession and asset formationfrom the perspective of our clients,
especially senior citizens.
Deputy Manager,
Consulting Promotion Department

Takayuki EndoAs the role of banks shifts from saving to supporting
asset building, we provide services that are necessary
for customers at various stages of their lives, from cradle
to grave. In the Tohoku region, where the population isaging, we are receiving an increasing number ofconsultations from senior customers, so we use balance
sheets to visualize their assets, such as insurance anddeposits, as well as consider the life events expected fortheir families, and we make proposals to help themspend their lives in a more fulfilling manner. In addition,
we are also working on inheritance measures. Many
customers used to be reluctant to even talk about
inheritance planning, but the Great East Japan
Earthquake made them to reconsider their ways of life,and I have the impression that the number of customers
asking for advice has been increasing for about 10 years.
As an agent, we offer “testamentary trust” services,which include the preparation and storage of wills and■ Customer's life event image

the execution of wills prior to the occurrence of inheritance,and “estate liquidation services,” which include the preparationof an inventory of assets after the occurrence of inheritance, tohelp ensure an amicable and smooth inheritance.
In the midst of these developments, two specific needs are
growing: inheritance tax countermeasures and asset
management for the age of the 100-year life cycle.
With the inheritance tax revision in 2015, we are receiving
many requests for inheritance tax planning, especially from
customers who are newly subject to the tax. We provide
detailed support for everything from the basic concept ofinheritance to succession measures such as the allocation ofassets.
As for “asset management in the age of the 100-year life
cycle,” more and more clients are becoming aware of theirhealth expectancy and asking for advice on how to manage
their assets while they are still healthy. One of the services thathas recently become popular with these customers is the “civil
trust” system, which allows them to set up a successor
administrator for their real estate in advance in case something
happens to them. The number of people using this service isincreasing because it is a smooth procedure.
One of our major themes is to develop human resources
within the bank so that we can offer the best solutions to ourcustomers. At our bank, we try to acquire the necessary
knowledge and experience through training sessions,role-playing based on case studies, and discussions in which awide range of people, from branch managers to young
employees, participate. In addition, we visit our branches on a

■ Expansion of handling of deposit accounts and so forth based on civil trust agreements,
Child s marriage

Marriage

A civil trust is a method that allows an aging trustee to entrust the management of assets (real estate,
deposits, etc.) to a trusted family member (trustee) in case the trustee loses the ability to makedecisions due to dementia, etc. It is also commonly referred to as a “family trust.” In 2018, we started
handling deposit accounts based on civil trust agreements, and in 2019, we started handling “77Apartment Loans (Civil Trust Account).”

Close
up

Home purchase

Succession to thenext generation

Five Steps from consideration to execution of a civil trust

1
Consultation and hearing→ composition Judgment of trust

Under20

20 s

daily basis and visit customers
with our staff members in orderto develop human resources. At
this time, we repeatedly tell our
employees to always think about
whether the proposals from thebank side are really beneficial tothe customers and whether theywould recommend them to theirpar en t s o r fam i l y m em ber s.
Customers are well aware thatthey cannot grow their funds
only by making deposits, but inJapan, where there are few opportunities for investment
education, there is still a lack of understanding about asset
management. That’s why we try to provide them with detailed
and easy-to-understand explanations. Our bank also holds
investment seminars and study groups for customers, to which
we invite them to stimulate their interest in and understandingof asset management.
My mission as a banker is to give back to my hometown. In
particular, I believe that providing support for fulfilling lifestyles
in old age and smooth succession of property to the next
generation are important missions, and I would like to continue
to provide honest assistance from the perspective of acustomers.

30 s

40 s

50 s

60 s

70 s

80 s

2

3

4

5

Trust design and quotation

To the parties and related parties
Explanation and approval(consulting Contract and casting
settings)

Execution, Expert coordination,
and Progress management(trust agreement, notarization,
registration)

On going follow-up in accordancewith the trust agreement(supervision, accounting, advice)

Over

Judicial scrivener
Administrative
scrivener
LawyerTrustee

Trust

Family trust specialist
Tax accountant //Specialist Accountant
Real estate appraiser /Notary, etc

Employment

25 THE 77 BANK INTEGRATED REPORT

Birth of children

Going to school for children

PensionOther

Insurance / Real estate
Construction / FP, etc.

■ Consultation service ■ Hearing■ Coordination Experts andrelated vendors

Family trust
coordinators

・ Consultation
Advice■ Trust contract■ Notarization ■ Registration

Settlor andbeneficiary
FatherPost-formation
Trust supervisor■ Trust management for the
benefit of beneficiaries

Accounting■ Accounting report to parties
and relatives■ Tax returns, etc.

Family / relatives

FamilyConsultation advice■ Consultation and advice for
Settlor and trustees■ Various execution support

THE 77 BANK INTEGRATED REPORT26

Collaboration with 77 Securities
most suitable proposals, we strive to share information closely
between bank and securities companies within the group, suchas by having the 77 Bank provide us with information based on
its long relationship with customers and by sharing customer
needs identified by 77 Securities.

Interview 05

Focus on training employees to improve the quality of
proposals.

77 Securities Co., Ltd.

Assistant Manager, Minamimachi-dori Branch

Orie, Kobayashi (left)

Ami Hoshi (right)

Strengthening of bank-brokerage partnership

Synergistic effects of cooperation between a bankand a securities company in developing products
and intra-bank training
Committed to providing customer-oriented services asa member of the 77 Bank Group

Results(branches / participants)

Item

Holding of bank-brokerage workshops
by 77 Securities for the 77 Bank
77 Securities
Shichiken-kun

The 77 Bank
Shichimi-chan

makes investment proposals to the customer, if necessary. In
the event of a major change in the market, we will promptly
provide the necessary information in cooperation with our staff
at 77 Securities.

Hoshi: With the establishment of 77 Securities, I now have many
opportunities to propose asset management to customers who
have not been active in asset management. Since there are manycustomers who have no experience in securities investment, I try
to explain the difference between deposits and investments andthe risks involved in investment in simple terms, avoiding too
much technicality, and try to provide more understandable andcareful explanations, thereby practicing the philosophy of“customer-oriented business management” set forth by the 77
Bank Group.
If customers have a need to invest in securities, we will
introduce the customer to 77 Securities after confirming thecustomer’s intentions. Even after introducing the customer to 77
Securities, our staff will be present when the staff of 77 Securities

Hoshi: At our bank, there are more and more opportunities foreducation, such as training sessions within the bank to improve
the quality of proposals to customers. At the Minamimachi-doribranch, where I work, we hold study sessions twice a month,
inviting speakers from 77 Securities, to learn about the market
and share information about our customers. In addition, theBank encourages employees to obtain qualifications related tothe sale of financial products, such as FP and CFP, and many
employees participate in in-house study sessions to raise theirawareness of the need to acquire specialized knowledge. Mostof the employees at the branch are also studying hard for the
next exam.
In addition, there is a training program called the Trainee
Program from the Bank to 77 Securities, in which trainees
attend the on-site proposal sessions of 77 Securities sales staff
to acquire skills in proposing and explaining products tocustomers. Based on the knowledge gained through the trainee

Kobayashi: In the three years since 77 Securities opened, we
have been making investment proposals to customers andproviding after-sales services under the motto “Customer First.”
Against the backdrop of social trends such as the “shift fromsavings to asset formation” and the government’s encouragementof asset formation through stock investment, we have seen an
increase in customer interest in asset management, and wehave also seen an increase in requests for products with highly
specialized themes, such as investment trusts related to thenext-generation 5G communication standard. In order to meetthe diverse needs of our customers and provide them with the

Bank-brokerage workshops instructed by 77
Securities sales personnel are held for the
purpose of improving financial product sales
skills among employees of the 77 Bank.

The 77 Bank and 77 Securities collaborate
to hold asset management seminars
The 77 Bank and 77 Securities jointly hold mutual fundseminars to provide customers with opportunities toreceive reports on the investment status of investment
trust products.

FY2019 1H

18 branches

FY2019 2H

42 branches

FY2020 1H

31 branches

FY2020 2H

25 branches

August 2018

69 people

February 2019145 people

August 2019122 people

February 2020

101 people

The Bank and 77 Securities regularly holds seminars for customers in order to provide information on asset management that is easy-to-understand for customers.

〈The 77 Bank〉Number of seminars held for customers and number of participants(Times)500
400(People)Number of seminars(Left scale)
Number of participants(Right scale)

8,807

100
0

417

458

2,198

6,000
4,000
2,000

71
FY201810,000
8,000

300
200

8,686

FY201927 THE 77 BANK INTEGRATED REPORTFY20200〈77 Securities〉

Item

Results(participants)

First anniversary seminar (April 2018)

143 people

Mutual fund seminar (July 2018)

54 people

New Year’s seminar (January 2019)110 people〈77〉Corporate briefings/Investment seminar(September 2019)Market Seminar “Seven Salon” (June 2019-February 2020)
77 Securities New Year’s seminar and 77 Bank Corporate
briefings (January 2020)〈77 Securities〉Market Seminar (February 2020)

103 people
9times/126 people

110 people
30 people

Kobayashi: I also visit the branches I am in charge of and holdstudy sessions on a regular basis, and I have the impressionthat the number of motivated employees is increasing. We also
hold a newspaper reading session every morning, and I haveheard that some employees who went through the Trainees
Program from the 77 Bank have been gathering their staff
members to read the newspaper after returning to their own
branches. I hope that this kind of movement will spread more
widely.

Deepening cooperation to even better meet customers’
needs

Hoshi: Originally, as a bank, we made comprehensive
proposals based on the asset status of our customers,
including life plans for not only them but also their families. In
particular, the Minamimachi-dori branch is surrounded by manyother banks and securities companies and has manycustomers with strong interest in investments, so we willcontinue to deepen our cooperation with 77 Securities to meeta variety of needs.
Kobayashi: In general, I feel that we are cooperating well withthe 77 Bank, but the degree of cooperation varies from branch
to branch, so I think there is room for the 77 Bank Group as awhole to further deepen cooperation. Through our study
sessions, daily sales activities, and other communication with
our employees, we will continue to educate them on theimportance of cooperation between the Bank and the securities
company, and we will do our best to be of further assistance to
our customers.

Provision of services that are appropriate for customers

The Bank actively propose the 77 Savings Investment Trust and tax-exempt accounts such as NISA, which are useful for asset formation by customers.

Number of 77 Savings Investment Trust contract holders(people)16,67916,0008,000

33,48935,00030,00014,861

30,554
26,871

25,00014,00012,000

Number of tax-exempt accounts (NISA, etc.) opened(cases)

18,00020,00011,83815,00010,000

Provision of information that is easy-to-understand for customers

experience, the salespersons make proposals from a newperspective, which draws out the needs of customers and often
leads to contracts.

10,000March 2018

March 2019

March 2020

5,000

March 2018

March 2019

March 2020〈77〉Initiatives for Operations that Put Customers FirstThe Bank and 77 Securities Co., Ltd. have established the 77 Basic Policy on Operations that Put Customer
First in order to promote the provision of quality financial products and service to customers. This policy iscomplied with executives and employees, and the status of initiatives is announced regularly.
* The 77 Basic Policy on Operations that Put Customers First can be viewed here.

77 Securities Co., Ltd.

The 77 Bank

77 Securities* Japanese Language only

As the only securities company headquartered in Miyagi Prefecture, our bank-brokerage partnership with The
77 Bank allows us to support a broad range of needs through the provision of high-quality services from acustomer perspective as well as highly specialized products.

THE 77 BANK INTEGRATED REPORT28

Regional Economy Vitalization Strategy
Initiatives of the COVID-19 Emergency Support Team and Earthquake Reconstruction Support
financial intermediary services but also consulting services tohelp our customers solve their various problems. We willcontinue to make initiatives to promote these initiatives widely
so that our customers can make effective use of us.

Interview 06

Mohri: In our initiatives to support the recovery from theearthquake and tsunami, we often said that we wanted to “build
back better, not just restore.” This means not just restoring

companies and stores to the state they were in before thedisaster, but revitalizing them into a better state with an eye tothe future. In response to the current situation, I would like towork with customers to create business revitalization andimprovement plans that take into account the next few years
and work together with them toward building back better.

■ COVID-19-related loan performance
Status of loan provision to businesses affected by COVID-19(cumulative total up to June 2020, including changes in loan conditions)

3,248 cases / ¥245.5 billion■ Information provision to regional public bodies through public-private collaboration

Utilizing our experience in earthquake and tsunami reconstruction support,
we will support our customers with swift countermeasures against the spreadof the novel coronavirus.
Deputy General Manager,
Consulting Promotion Division

Takuya Kyono (left)

Senior Credit Officer,
Credit Supervision Division

Masashi Mohri (right)

Responding to the changing needs after COVID-19

Kyono: Six months have passed since the COVID-19
Emergency Support Team was established, and I have theimpression that the number of consultations about immediate
cash flow—which were overwhelmingly common when theteam was first established—have peaked out. Since May, there
has been an increase in needs related to post-pandemic
services, such as employment-related consultations and thesearch for ways to change existing business models.
In the Consulting Sales Department, to which I belong, liaison
officers from the headquarters are stationed at core branches
in the region, and we try to respond quickly and proactively
while strengthening cooperation with the field.

Speedy decision-making and provision of information
are essential for responding to emergencies

Mohri: It has been about eight years since I started working onreconstruction support, and we have developed a variety ofmeasures. We have been able to make full use of theseexperiences in our countermeasures against the spread of thenovel coronavirus. For example, the “on-site evaluation”
system that we have developed to conduct evaluation close tocustomers in the affected areas has been reappropriated for us
to make quick decisions on the spot. In the future, as in theprocess of reconstruction support, it is expected that there will
be many aspects of making business plans and management
improvement plans. In such cases, we will utilize the know-how
we have accumulated so far and respond quickly in cooperation
with external experts and organizations.
29 THE 77 BANK INTEGRATED REPORTIn addition, it is important to not only wait for consultations
from customers but also proactively approach them andprovide information. This time, the unforeseen outbreak of
COVID-19 caused even latent needs to erupt at once. We willcontinue to build close relationships with our customers sothat we can respond flexibly to their needs even in such an
emergency situation.

The true value of our bank is being tested. This iswhere our support activities really begin.

Kyono: As a member of the Consulting Sales Department, I am
determined to do everything I can to help our customers.
I believe that this is a phase in which the true value of regionalbanks will be at stake, with regard to what kind of companionshipand support we can provide from a long-term perspective, evenwhen the future is uncertain.
Mohri: I feel that this incident has broadened our customer baseby, for example, allowing us to support sole proprietorshipcustomers with whom we had no previous relationship. From
this point on, we will be even closer to the people in thecommunity, and we will become a bank that people can consult
about anything.

Together with our customers, we aim not at recovery
but at reconstruction.
Kyono: In the activities of the COVID-19 Emergency Support
Team, I believe that what we should do is essentially the sameas what we do on a daily basis, which is to contribute to thegrowth and development of local economies by providing
optimal solutions that meet the needs of our customers. In
recent years, the business model of banks has changed
dramatically, and we are striving to provide not only traditional

By utilizing the video conference system of the Bank, Miyagi Prefecture,
Sendai City, Tohoku Bureau of Economy, Trade and Industry, Miyagi
Labour Bureau, and Miyagi Guarantee collectively provided information to
all regional public bodies in Miyagi Prefecture as well as some of theregional public bodies in Fukushima Prefecture, on the topics including the
emergency economic measures, employment support measures, andfinancial support measures.

■ Reconstruction Support Policy
In view of the massive damage inflicted by the Great East Japan Earthquake, The 77 Bank formulated its“Reconstruction Support Policy” to contribute to the reconstruction and development of the regional
economy. The objective of this policy is to fulfill the Bank’s responsibility as a regional financial institutionthat should work hand-in-hand with the local region, through the provision of financial services and financial
intermediary functions aimed at supporting reconstruction efforts of the region and customers.
All executives and employees of the Bank are working to support the region and the Bank’s customers
by tackling various challenges in order to restore Miyagi and the wider Tohoku region to their original statesof places brimming with vitality, affluence and kindness.

In "Reconstruction
Support Policy" Click here
for more information
You can see it.
* Japanese Language only

■ Efforts toward earthquake reconstruction
Earthquake-related loan performance(cumulative total after the earthquake to March 31, 2020)[Corprate][Retail]
OperatingNumber of cases
Amount26,750 cases / ¥743.6 billion

Capital expenditure

6,044

2,605

Total

8,649

¥273.5 billion ¥166.5 billion ¥440.0 billion

Results of Loans related to Recovery
and Development Subsidy Projectfor SME Group Facilities, etc.
(Miyagi Prefecture)
Results of response to the double
debt problems of businesses affectedby the disaster
77 Earthquake Reconstruction Support
Housing Loans (for collective relocation/leased land type) disbursements

Results of response to the double debt
problems of retail customers affectedby the disaster

Unsecured
Number of cases
AmountBridge financing results
Principal investment results

Housing

Total

4,389
18,101
13,712¥7.6 billion ¥296.0 billion ¥303.6 billion

860 cases / ¥61.9 billion
175 cases / ¥12.8 billion

Businesses affected by the Great East Japan Earthquake designatedby the Corporation for Revitalizing Earthquake-Affected Business

188 cases

Organization for Industry Reconstruction support clients

75 cases

943 cases / ¥21.1 billion

Number of housing rebuilding
consultation meetings held

Personal voluntary liquidation guideline support results
Consultations received
Applications received
Repayment plan proposals received
Repayment plan proposals agreed to

226 times
507 cases
258 cases
216 cases
216 cases(Zero refused plans)

THE 77 BANK INTEGRATED REPORT30

Initiatives for Regional Revitalization
Support for startingnew companies
or businesses

In order to create new industries and new businesses in the region,
we actively support startups, second startups, and efforts to enter
growth fields.

Four priority items for regional revitalization have been set as the following: “Support for starting new companies or businesses,”“Support and development of regional core companies,” “Promotion of urban development,” and “Support for promotion of tourism,etc.” The 77 Bank Group aims to achieve regional revitalization by contributing to the growth of local economies and the developmentof industries through cooperation with regional public bodies.

Support anddevelopment ofregional core companies

The 77 Bank

Cooperation with Tomiya school, an entrepreneur development project
conducted by Tomiya City
We are cooperating with the Tomiya school, an entrepreneur development
project conducted by Tomiya City. The Bank provides hands-on support
for this program, including seminars based on our expertise and individual
consultations, in order to make it a highly effective program that leads tothe further growth of business seeds for those who aspire to start abusiness in Tomiya City.

Collaboration with Tohoku University and
the Tokyo Stock Exchange

77 Research and Consulting
77 Capital, etc.

In collabration with Tohoku University and the Tokyo Stock Exchange, we are working to develop
the regional economy by making individual visits to companies seeking to list their shares andproposing the use of the stock market operated by the Tokyo Stock Exchange, holding events forventure companies, and collaborating with Tohoku University’s Business Innovation Promotion
Program for regional companies.

Tohoku University
Miyagi University
Tohoku Gakuin University,

Cooperation with
regional public bodies

support (IPOs, etc.)
1. Project plan formulation andexecution support
2. Share listing promotion andsupport
3. Distribution of information to
the region▶ Creation of innovation〈Part 2〉
Information exchange
meeting

Private companies
that want to contributeto the community

Regional public bodies
with issues and challenges

Proposals forsolving problems

Business
matching

Formation of Miyagi wide-area PPP platform
As part of the efforts to promote urban development projects based on the “Agreement on Comprehensive
cooperation for Regional Revitalization” and other agreements with local governments, we have formeda regional platform as a place to continuously share information and promote dialogue between the
public and private sectors in order to promote the use of private capital and know-how in the provision of
public facilities and services.

Support Members
Financial institutions thathave signed cooperationagreements
And universities, etc.

Core member

Development Bank of Japan
Regional Planning Department,
Tohoku Branch

The 77bank
Secretariat: Regional
Development Promotion
Division

Think tank

Dissemination andawareness-raising function
Human resource
development function

Tohoku PPP/PFI Association

Information
dissemination function

Tohoku University and
Miyagi University

Municipal governments

Public-private
dialogue function

Iwanuma
City

Zao
Town

ShinchiTown

MurataTown

Ogawara
Town

Taiwa
Town

Shiogama
City

Shichigahama
Town

KakudaCity

Kawasaki
Town

SendaiCity

Kesennuma
City

MisatoTown

Matsushima
Town

Yamamoto
Town

31 THE 77 BANK INTEGRATED REPORTMinamisoma Tomiya
City
City

Regional public bodies

The 77 Bank

Construction
Lease
etc.

Ishinomaki
City

Marumori
Town

Onagawa
Town

Higashi Matsushima
City

Watari
Town

Tome
City

Osaki
City

Shibata
Town

Rifu
Town

NatoriCity

Kurihara
City

Shiroishi
City

WakuyaTown

Minamisanriku
Town

Creation of listed companies
that generate high added value
for the region and high-quality
employment

Tohoku University

・Serve as a conduit for excellent
students
・Exit for investee companies

We support tourism promotion projects that contribute to the
expansion of the exchange population in order to revitalize theregion.

Supporting the revitalization of a local railroad line
through industry-academia-government-finance collaboration

With the aim of revitalizing the areas along the Abukuma Express Line between Fukushima
City in Fukushima Prefecture and Shibata-machi in Miyagi Prefecture, we worked on a
project to raise funds for the production of “Honey beer” through crowdfunding incooperation with universities, private businesses, and related regional public bodies
along the Abukuma Express Line.
Decline in thenumber of passengers
on the Abukuma Express,
a local train that runs
through both
Fukushima andMiyagi PrefectureWith the goal of making the area
along the railway line more lively
through industry-academiagovernment-finance collaboration

Forum on regional revitalization along
the Abukuma Express Line (December 2016–)
With 16 constituent organizations for revitalization,
5 working discussions were held
[report on collaborative project was produced].

Real estate

Regional public bodies with which 77 Bank has concluded Comprehensive Cooperation Agreements
for Regional Revitalization (33 as of June 30, 2020)

Kami
Town

Tokyo Stock Exchange
Development Bank of Japan
Japan Finance Corporation
SME Support, JAPANTokeiren Business Center
Sendai Start-up Assistance Network ,etc.

Listing
Tokyo Stock Exchange

・Survey report on the area along the railway line
・Proposals for tourism PR methods

The 77 Bank

Trading

Execution support
function

77 Research andConsulting ,etc

Support for
promotion of
tourism, etc.

[Private companies]
Individual market
soundings
for each projectExchangefunction

MiyagiPrefecture▶ Regional company growth〈Part 1〉
Presentations byregional public bodies

We held the “77 Regional Revitalization Business Matching Event,”
an information exchange meeting between regional public bodies
that had concluded comprehensive cooperation agreements with
us and private companies. The purpose of this event was topromote collaboration between regional public bodies and privatecompanies, which can provide solutions to the challenges regional
public bodies are facing. The event saw a very lively exchange of
information.

Sharing ofRegional Issues

The 77 Bank x Tohoku University x Tokyo Stock Exchange Collaboration Scheme

etc.

First “77 Regional Revitalization Business
Matching Event” Held

We promote business evaluations and provide
various solutions to meet the life stages ofcompanies.

Promotion of urban development
We are actively participating in public-private
partnership projects and providing support
for the redevelopment of public infrastructure.

Support for Onagawa Town’s public-private
partnership organization through crowdfunding
In June 2020, we cooperated in the formation of a crowdfundingbased fundraising project by an organization to promote community
development in Onagawa Town, Miyagi Prefecture, through a publicprivate partnership, with the aim of revitalizing the town’s industry
in the face of the novel coronavirus.
In addition to providing support for
the launch of the crowdfunding
project and participating in theorganization, we have also renderedfinancial support by contributing to
the project’s costs.

[Honey beer production project]
SennanSinken Factory

Marusho
Sake Store

Consolidation of local
resources along
the Abukuma Express Line

IshizukayohoenFukushima College(student)

・Proposal for the use of crowdfunding
・Introduction of collaborators and asking them toparticipate in the project
Raised more funds
・Financial planning support than the target amountand succeeded in creatinga new local product

Disseminating thecharm of the railway
line area!

Start the projectto make Honey beer

Initiatives of the Financial Networkof TOHOKU Tourism

With the aim of revitalizing the tourism industry in the Tohoku region andcommunicating its attractiveness, the 2nd FINE+ Tohoku Instagram PhotoContest was held as a part of the efforts of the Financial Network of
TOHOKU Tourism*. The contest was open until the end of March 2020, andthe initiative was a continuation of the first event held from April to the endof August 2019, which was very well received and decided to continue.

*The Network consists of Aomori Bank, Akita Bank, the Bank of Iwate, Yamagata Bank,
Toho Bank, and the Development Bank of Japan

Hitome Senbon Zakura,(One thousand cherry trees in one view)
Miyagi Prefecture

Mt. Kattadake summit,
Miyagi Prefecture

THE 77 BANK INTEGRATED REPORT

32

Support for startingnew companies or businesses

Support and developmentof regional core companies■ Launch of the Sendai Startup
Ecosystem Promotion Committee■ Cooperation with the "Sendai Future
Generating Company Creation Program"

In December 2019, the Sendai Startup
Ecosystem Promotion Committee wasestablished with local industry, government,
academia, and financial organizations.
In July 2020, Sendai was selected by the
Cabinet Office as a “Hub City for the
Promotion of a Startup Ecosystem” inrecognition of these and other efforts.

The Bank works together with Sendai City towards intensive
support for the listing of local companies, through cooperationin the Sendai Future Generating Company Creation Program
implemented by Sendai City.
This program provides intensive support for stock listing,after recruiting and selecting local companies that could
possibly be listed within roughly five years, and certifying
them as Sendai Future Generating Companies.
(eight companies were certified in FY 2020).

■ Provision of the 77 Business Startup
Support Package
We are providing the 77 Business Startup Support Package,
which covers our menu of business launch support services,in an aim to satisfy customers in the foundation stage withneeds to optimize their operation, including for accounting
and payment.
This is a package of products
and services provided by the 77
Bank Group and business
partners that can be used to
improve the efficiency of operation
including for accounting andpayment. We support for a startup
with a variety of services.

"Sendai Future Generating Company Creation Program” cooperation schemes

Listing
Certified company
Project partner
The 77 BankTokyo Stock Exchange

Sendai city

Tohoku University

Operation

Cooperatingcompanies /organizations■ Support for Y.K. Sugawara
Y. K. Sugawara(Taiwa Town, Miyagi Prefecture), which cultivates
Date Iwana, a specialty fish product of Miyagi Prefecture,suffered extensive damage from Typhoon No. 19 in 2019,making it difficult to continue cultivating the fish. The Bank
proposed that Sugawara raise funds by crowdfunding forrestoration of the aquaculture facility and of communicating
the appeal of the product to a wide audience. For that
purpose, we introduced our business matching partner,
Music Securities Inc.

Support for the post-disaster business restoration,
by utilizing crowd-funding■ The 77 New Business Subsidy
Since 1998, THE 77 Business Support Foundation has been
awarding and subsidizing companies that are actively
developing their businesses by utilizing new and originaltechnologies and know-how. To date, a total of 76 companies
have been selected and subsidized.

Securing funds for Business continuity
business continuity at regional industries

Publicity for the valueof “Date Iwana(Japanese char)”

Scenes ofdamage in
the aftermath

Date Iwana,
Miyagi Prefecture’s
local specialty

Photograph Source: Project pages by Music Securities, Inc.

■ Supply of funds by 77 Capital Co., Ltd.
The 77 New Business Fund, which The 77 Bank established with its group company 77 Capital Co., Ltd. supports the growth of companies
in various life stages, mainly by providing capital funds.
Kakiya Co., Ltd. (Shiroishi City, Miyagi Prefecture) manufactures processed marine products such as salmon flakes and squid okra as
well as daikon garnish to accompany sashimi made from locally grown Zao Kogen Daikon and cut vegetables made from its own produce,
and it sells them widely throughout Japan. The company is working on the succession of the business from the founding owner and ismaking efforts to expand products that meet consumer needs and to enhance manufacturing facilities to increase supply volume. The 77
Bank and 77 Capital Co., Ltd. proposed raising funds through equity as part of efforts to strengthen their management structure. The
company aims to achieve further growth by utilizing the obtained funds.
Investment and Operation

77 Capital

Growth capital supply

Venture company

77 Capital Co., Ltd.

33 THE 77 BANK INTEGRATED REPORTThe 77 New Business Funds( Total fund amount : ¥ 1 billion)
Management support

Companies in foundationand growth stage

Investment

The 77 Bank

Promotion of urban development

Support for promotion of tourism, etc.

■ Promotion of PPP / PFI project■ Initiatives of the Mutsumeku TOHOKU
Laboratory

In response to an expected increase in PPP/PFI projects led bymunicipal governments stemming from a declining population
and aging public facilities, The Bank has further strengthened
relationships with municipal governments, through initiatives
including involvement in the project from the formulation stage.
To date, the Bank has participated as a financing financial
institution for 13 PPP/PFI projects in Miyagi Prefecture, and has
conducted arranger services as the main bank for seven ofthese projects.

Track record of the Bank’s PPP/PFI project in Miyagi Prefecture
ownerProject

Sendai City

Matsumori Plant Related Civic Facilities
Development Project “Spopark Matsumori”

Sendai City

Observatory Development and Operation Project

Tohoku University

Sanjo Student Dormitory Development Project

Ishinomaki District Integrated
Administration of a Large Region
Office Work Association

Fire Department Headquarters Transfer andDevelopment Project

Sendai City

Nomura School Lunch Center Development Project

Ishinomaki District Integrated
Administration of a Large Region

Office Work Association/ Nursing Home Improvement
Project “Mansei-en”

Miyagi Prefecture

Fire Academy Transfer and Development Project

Miyagi Prefecture

Education and Welfare Complex Development Project

Higashimatsushima City

School Lunch Center Development Operation Project

Onagawa Town

Onagawa Seafood Processing Complex
Wastewater Treatment Facility Development Project“Fishery Support Ogawa”

Ministry of Land, Infrastructure,
Transport and Tourism

Sendai Airport Special Operation Project

Sendai City

Minamiyoshinari School Lunch Center
Development Project

Tohoku University

Aobayama University House Development Project■ Support for the Kawa Machi Terasu
Yuriage Co., Ltd.,It was established in September 2017 by a group of local
businesses to build, operate, and promote new commercial
facilities as part of the reconstruction and local development
efforts in the Yuriage area of Natori, which was severely
damaged by the Great East Japan Earthquake.
The new commercial facility, located near the mouth of theNatori River, is the first permanent commercial facility on theembankment in Japan and an attractive spot integrated withthe waterfront, with restaurants and stores.
As a member of the local Town Revitalization Council, The 77
Bank has been involved from the business planning stage, andin addition to providing funds and business matching services,
we have also provided funds and support to install cashless
payment for companies that have opened their stores in Kawa
Machi Terasu.
National
goverment

plan application
and approval

Yuriage area
revitalization council

77 Capital’s main business activities include the formation and management of investment limited
partnerships (funds). In addition to providing a wide range of funding in response to the businesscharacteristics and needs of companies, the company is actively engaged in company development
and company support through investment and is working to improve regional value.

・Identify and collect information on brand development needs of local companies
・Business matching, sales channel development, and expansion support
・Support for industry-government-academia collaboration and inbound tourism development

・Provide market data and trends
・Support for product concept andbrand strategy
・Product naming and design creation

・Provide test marketing opportunities
・Support for product development by
utilizing buyers’ expertise
・Sales data provision, sales planning,and pricing support■ Support for the Akiu Tourism Factory Co., Ltd.

Business owners and business representatives of several
companies in Miyagi Prefecture have been working together tomake use of traditional Japanese houses and to attract tourists
to the prefecture. A 160-year-old traditional Japanese house in
the Akiu district of Sendai has been renovated into a tourist
exchange center, which also houses a restaurant.
The 77 Bank has been providing support for efforts topromote the attractiveness of the region as a tourist destinationand to revitalize the local community, such as by obtaining adesignated financial institution for the use of the angel tax
system in Sendai using the national strategic special zone toencourage diversification of fund procurement.
Wish to create a tourist
destination that utilizes
the charm of the region

Sharing challenges
Business planning
Financial consultation

Akiu Tourism Factory Co., Ltd.
Funded and establishedby people from within
and outside the Akiu district〈Reconstruction
Agency〉〈Ministry of Economy,
Trade and Industry〉

Kawamachi Terrace
Yuriage Co., Ltd.
Subsidy

Cooperation

・Planningsupport・Funding

The 77 BankJapan’s first permanent commercial facility
on an embankment
A place of relaxation where tourists andlocal residents can enjoy a stroll
Businesses in and outside of Natori
opened restaurants, stores, a processedseafood shop, anda beauty salon andlaundromat for theconvenience of local
residents.

Facility name:
AkiushaSendai City

（Sendai Ctiy, Miyagi Prefecture）

・Renovation of a 160-year
old house
・Provision of food using
local agricultural products
・Introduction of local
culture, hands-on
experiences
・Setting up a bicycle
touring course

Funded and establishedby Natori City,
local companies, etc.

Facility Name :Kawa Machi Terrace Yuriage

The 77 Bank

Funding

Town Revitalization Planfor the Yuriage area, Natori（Natori City, Miyagi Prefecture）

Companies in the second
startup

Participationin the council

In March 2018, the Financial Network of TOHOKU Tourism,
Sendai Mitsukoshi, and Tohoku Hakuhodo signed a businesscooperation agreement with the aim of developing regional
industries and so on, launching the Mutsumeku TOHOKU
Laboratory.
We are working on the development of local industries andthe promotion of tourism by discovering processed products
and handicrafts that utilize the local resources of Tohoku,
refining them into new local brands, and promoting theirsales.

・Businessmatching
・Various financial
support for companies
opening stores

Information
sharing

Obtained certification
as a designatedfinancial institution
under the angel tax
systemSpecial application

First inJapan

Utilization of the National Strategic Special
Zone version of the Angel Tax System (*)
an individual invests in a small business less than three* Ifyears
old that is engaged in a business startup or
employment promotion, he or she will receive preferential
tax treatment, and the amount of investment minus ¥2,000
will be deducted from his or her gross income for the year.

Funding

Miyagi
Organization
for Industry
Promotion

Photograph Source: Kawamachi Terrace Yuriage Co., Ltd.

Discovering and disseminating
the attractiveness of the Akiu
District in cooperation withvarious parts of Tohoku

Easier to solicit investment from individual investors,
expanding the scope of fundraising
Photograph Source: Akiu Tourism Factory Co., Ltd.

THE 77 BANK INTEGRATED REPORT

34

Productivity Enhancement Strategy

Paperwork - free × DigitalStrengthening consulting capabilities based on humanservices through Paperwork - free × digital

Paperwork- free

DigitalReduction, centralization,and simplification of branch officeadministrative work

Promotion of Paperwork-freethrough the digitalization andexpansion of non-face-to-face channels

・Abolition of excessive administrative work
・Centralization of branch operations at headquarters
・Simplification of the remaining paperwork at branches

・Automation and streamlining of branch office operations
・Realization of paperless, seal-less, passbook-less, and cash-handling-less
・Provision of full banking functionality through personal apps

Interview 07

Reducing administrative work at branch offices
and increasing the time spent with customers
In order to improve the Bank’s profitability, we must increase the amount of time we

Society is changing toward digitalization, so our bank also must change its businessspend on customer-facing consulting. To achieve this goal, we have started full-scalemodel. In order to achieve this, we must first eliminate inefficient administrative work,“Paperwork-free” initiatives to reduce inefficient work and inefficient desk-bound hours.

which will lead to our digital transformation. This will strengthen consulting sales, which

One initiative with which we are currently experimenting is Centralization to

Hiroaki Takahashi
35 THE 77 BANK INTEGRATED REPORT

are close to customers and unique to regional banks.

Headquarters. This work can be broadly divided into that of the Operations Group andOne of the things we are currently focusing on in our digitalization efforts is expandingthat of the Loan Group. In the Operations Group, much of the administrative work andour non-face-to-face channels. By using non-face-to-face channels, we can collect

time-consuming tasks generated at the branches are transferred to a specialized

data that cannot be obtained through face-to-face conversations, which can be used

department at the headquarters for centralized administrative processing. In addition,

for analysis and research to uncover needs that even customers are unaware of and to

the Loan Group at headquarters handles the examination and storage of approval

propose optimal services. In particular, the penetration rate of Internet banking using

documents and contracts related to transactions with customers, execution operations,smartphones and PCs is increasing rapidly, and we are making ground-up efforts toforeign exchange operations, and other tasks that used to be handled by staff at

upgrade and enhance the functions of our Web services and applications.

branches. Centralizing these operations will allow branch employees to spend moreOn the other hand, RPA has been introduced at the headquarters to automate routine

time with customers, which will lead to proposals that are more highly specialized astasks. We also plan to greatly promote the use of AI in the future. For example, in thewell as tailored support. We are gradually expanding this initiative to cover all parts ofpast, when we proposed services to customers, we contacted them based on their

the Bank while checking for improvements and problems. So far, the feedback has beenbalance sheet at the end of the month. Ideally, it would be more effective to check thepositive, and I am confident about the success of this initiative.

trends on a daily basis, but this was not possible, considering the time and workload

Eliminating paperwork will also have a significant impact on the digital strategy we are

involved. However, with the use of AI, we can acquire customer data automatically andpursuing. We can maximize our digital strategy’s effectiveness by thoroughly reducing

cross-analyze the data with other information, making it possible to propose theinefficient operations and then identifying operations that can be replaced by digitalnecessary services at more precise times.

ones. In order to go seal-less, passbook-less, paperless, and so forth, we must form a

We would also like to enhance our equipment. For example, by having our employees

new framework through the power of digital technology. To this end, we are working

use tablets, we can provide our customers with timely information on industry trends

closely with the Digital Strategy Division on each initiative.

and highly specialized content. This will be a great help, especially for young employees

There is no end to reducing administrative work. In each era, technology evolves, andSenior Officer, General Planning& Coordination Division

Seeking to strengthen consulting sales
by promoting digitalization within the organization

who are still inexperienced.

customers’ needs change. We must constantly review our style and adapt to changes.

While promoting these initiatives, we must be aware that digital technology is not a

In the past, we have been too busy to address many issues in day-to-day operations,panacea. In particular, unlike megabanks and Internet banks, our bank is rooted in thiseven if we found them to be wasteful or inefficient. With this initiative, we have received

region and has a mission to work together with the community. In this sense, we must

many opinions and ideas from branches toward the realization of Paperwork- free.

take advantage of digital technology to enhance our convenience as a bank; at the same

In order to accurately respond to societal changes, we will continue to foster a culture

time, we must value our unique qualities, such as the fact that our employees will

within the Bank in which each employee is always conscious about the efficiency ofcontinue to visit our customers and provide face-to-face support. I believe that our

office work and proactively seeks to improve it.

mission going forward will be to transform our business model by skillfully integrating
digital with non-digital and face-to-face with non-face-to-face.

Manager, Digital Strategy Divsion

Hiraku Nakatsugawa

THE 77 BANK INTEGRATED REPORT36

■ Automating and Streamlining Branch Office Operations with Digital Technologies■ Expansion of Non-face-to-face Channels
The Bank is making efforts to expand its non-face-to-face channels, such as the 77 Bank App.

We are creating more time to focus on
consulting by consolidating the remaining
administrative work at the branches tothe headquar ter s and automating it
through the use of RPA and other digitaltechnologies.

Headquarters

Branchwork〈Compression〉

Branchwork〈Case Study〉
Credit rating operations in the financing
business, etc.

work

Consolidating
operations

BranchDigitalwork

77 Bank App▶

Balance, deposit, and withdrawal details

work

work

● Utilization of AI-OCR (converting written text on forms into data)● Utilization of RPA (automation of registration work)

PayPaypring

merpaydocomo Kouza

J‐Coin Pay

Bank Pay

The 77 Bank Website
for Our Customers’ Employees
77 Web Relations

Customers can log into
their Internet banking
account to make transfersand other transactions.*

Cashless payments are spreading around the world. The central government’s goal is to increase the domestic cashless payment ratio
from the current 25% to 80% in the future in order to improve payment efficiency and attract inbound tourism consumption.
In order to enhance customer convenience through cashless transactions, we support debit cards as well as a wide variety ofsmartphone-based cashless-payment services provided by external companies.

LINE Pay

We will send out special
coupons.

Transfers and other transactions(Internet Banking)■ Realization of a Cashless Society

Rakuten Edy

CouponYou can check youraccount balance anddeposit/withdrawal details
in real time.

BranchImproved efficiency
through digitization

App that enables retail customers to use various services whenever they want without visiting ateller, including viewing balances, or having fun saving for preset goals like buying a car or going ona trip.

We are constantly updating this site with
exclusive information, such as about
campaigns and products that are available
only to employees of our customer
companies.

Lifetime Passbook by Moneytree
By linking up to Moneytree, apersonal-asset-management
app, users can manage theirbank, securities, credit cardand point services balancesand so forth all in one place.*

77 JCB Debit

77 Bank app can provide links toother companies’ websites in orderto enhance convenience by
providing local information andconvenient information from othercompanies' services, and the list oflinks is expanding.

Deposit by Purpose■ Collaboration with 77 Card

Clients can set a target
amount and deadline forsaving for each purpose,such as purchasing a car
or taking a trip.

MORI-NO-MIYAKO CASHLESS TOWN initiative of Sendai’s Central Shopping District is aimed at making the
district the most convenient place to shop in Japan.

With the aim of further promoting the use of cashless payments, The 77 Bank, together with 77 Card, is working with the Sendai
City and other organizations to revitalize shopping areas. We aim to increase sales at local stores by utilizing the data obtained
from the spread of cashless payments.

* To use this service, users must sign up for the 77 Direct Service and register on first use.

▶

Using data to help improve the business environment

77 BANK Pay B▶

App that enables payments to be madeanytime, anywhere without going to an ATM
or convenience store, as long as you have asmartphone and payment handling slip.

Central shopping district
SupportCollaboration

Collaboration
Promote of cashless payments
Operation of a bulk duty-free counter

Sendai City
Central Shopping District
Revitalization Council

Campaign announcement

Payment terminal
deployment

Installation ofcontracted
terminals

Internet Insurance
Internet insurance is an
insurance product that can becompleted from application tocontract via smartphone. One
can also use the Insurance
Robot Advisor
for detailed
simulations.

100% Web based Loans"Future Vision"
77 Card Co., Ltd.

To increase store sales by utilizing the obtained data

77 Card issues credit cards for retail and corporate customers and is also engaged in the card loan guarantee business. In addition,
the company is working together with goverment agencies to support the introduction of cashless terminals to promote the further
spread of cashless payments.

37 THE 77 BANK INTEGRATED REPORT

Links to Other Companies’
Websites

100% Web based loans are aloan product that can becompleted from application tocontract via smartphone.
〈Lineup〉●77 Car Loan ●77 Wide Loan
●77 Educational Loan
●77 Card Loan
●77 multi-purpose Loan

Insurance Review
Simulation
With nine questions, customers
can get a solid quote andautomatically calculate theirpremiums.

77 Bank app account opening

App that enables a user to apply to open
an ordinary deposit account or investment
trust trading account from the comfort oftheir home, etc. at any time without visitinga teller.

IB Investment Trust
The fees are more reasonable
than over the counter. Users
can also set goals with theemail function.

口座開設

Investment Trust
Information
Distribution Service

You will receive information
about funds (NAV, distributions
and so forth), stock market
information andrecommendations fromus according to yoursettings.

WEB Passbook
WEB Passbook is anenvironmentally friendly andconvenient service that allows users
to inquire about their balance,
deposits, and withdrawals
without providing a paper
passbook. Users cancheck transactions fromthe past 13 months.

THE 77 BANK INTEGRATED REPORT

38

Message from an Outside Director

Working Style Reform Efforts
The Bank is committed to creating a highly productive organization where each and every employee can perform
to their full potential in a healthy state of mind and body, and with a greater sense of fulfillment and job
accomplishment. By allowing our employees and the organization to continue to grow together while enhancing
our consulting capabilities, we aim to be the bank chosen by customers in the region.

Develop promising human capital

Realize work-life balance—People make companies——From work-work to work-life—

1.Fostering an organizational culture of self-education
2.Enhancement of consulting capabilities through human resources
development programs, etc.
3.Initiatives aimed at career development support
4.Initiatives aimed at improving abundantpersonal capabilities

Interview 08

Outside Director

Emiko Okuyama

39 THE 77 BANK INTEGRATED REPORT

Establish an environment
where diverse humanresources can demonstrate
their full potential

Become the bankchosenby customers—A healthy body is capital—
1. Formulation of the Health andProductivity Management Declaration
2. Strengthening health management
measures3. Improving the work environment
4. Raising employee awareness ofhealth management

As an outside director, she makes proposals for the further promotionof Working Style Reform from an objective standpoint.
I believe that the role of outside directors is to confirm
various initiatives and make recommendations from an
objective perspective to allow The 77 Bank to contribute to
the development of the regional economy in Tohoku andbecome customers’ preferred bank. There is a wide range ofissues I can confirm, including those that are difficult to
notice from within the bank and determining the balance
between risk and safety. One of the things I am focusing on
is Working Style Reform through promoting diversity.
I believe that if each of our diverse employees can performtheir duties with a sense of satisfaction and fulfillment, it willlead to the improvment of productivity and services.
In 2015, while serving as the mayor of Sendai, I gave aspeech at a symposium on the promotion of women’s
advancement hosted by the Bank, and I got the impressionthat the Bank is enthusiastic about promoting diversity. In
fact, it has been proactive in its efforts to date, including theestablishment of the Working Group for the Promotion of
Women’s Participation in 2013 and the Diversity Promotion
Office in 2016. When I met female employees at symposiums
and seminars, I found that many of them were active andtalented, and I felt the need to create an organization thatwould put them in positions that prompt them to demonstrate
their abilities. Compared to 10 years ago, the percentage ofwomen in management positions has increased significantly,
but I believe we can increase it further.
One of the themes I am focusing on as an inseparable partof this issue is young employees’ visualization of their careerplans, including female employees. If too many employees
leave the bank within a few years, the investment in humanresources will not be worthwhile, and the transfer of businessknow-how may be hindered. To prevent such a situation, we
need to communicate the job’s attractiveness to employees andevolve into a workplace that appeals to long-term employees;
the job of a banker is enticing and significant. With the financial
crisis of 2007–2008, the Great East Japan Earthquake,
COVID-19, and other unimaginable events happening one after

Vision aimed for by the Bank
through working style reform

Promote health andproductivity management

In 1975, she was hired as a Sendai City official. After working
on the Citizens’ Affairs Bureau and the Education Bureau, she
ran for Sendai mayor in 2009 and first elected. Served two
terms as mayor, which ended in 2017.

1.Strengthen efforts aimed at reducing
total working hours
2.Supporting employees to balance workand childcare/nursing, etc.

—Rewarding working environments—
1.Strengthening initiatives to promote
the active participation of women
2.Utilizing seniors, part-timers, etc.
3.Revision of personnel evaluation
systems

through improvements
in productivity and service

Working Style Reform Efforts
Promote Health and Productivity Management

another, banks are playing an extremely important role insociety and the economy. Being involved in a job that supports
the social economy is highly rewarding and helps employees
grow as people.
To address the issues of female managers and careeradvancement, I think it is important “to deepen the perspectiveof employees” and “to share information within the bank.” InFY2020, we will continue to hold a number of career seminars
and round-table talks for childcare leave participants, andI hope that employees will take advantage of these opportunities
to learn management skills based on accepting diversity andcommunication skills for improving the work environment.
Also, to motivate young employees, it is necessary for
management to present a clear vision of their policies and what
they are thinking. For example, to make young employees feelthat there is a connection between the headquarters and thefront line in the field, it is necessary not only to disclose
information formally, but also to devise ways to disseminate
information that is easy for young employees to understand.
Through the Board of Directors and various events, I feel thatPresident Kobayashi is also focusing on Working Style Reform,
and our efforts are making steady progress, such as receiving
awards from the Ministry of Health, Labor and Welfare andMiyagi Prefecture as a model company for promoting diversity.
I will continue to support the company in its efforts to makefurther progress.

IIn December 2018, the Bank issued the Health andProductivity Management Declaration and has beenstrengthening its efforts accordingly. As for specific initiatives for
Health and Productivity Management, based on the results of the previous fiscal year,
we have established a system in which the Personnel Division plays a central role in the
management of the program and implements it in cooperation with the health insurance
association, industrial physicians and public health nurses.
President
Manager of Personnel Division
Personnel Division(Formulated in December 2018)

HealthInsurance
Association

Industrial
physicians
and publichealth nurses

Labor
Union

Held "Career Seminar / Exchange Meeting"with Outside Director Okuyama
External
experts

46 female employees participatedExternal evaluations on the Bank’s initiatives
Certified “Platinum Kurumin”,
a special certification pursuant
to the Act on Advancement of
Measures to Support Raising
Next-Generation Children

Certified “Gold Certified
Company” for successfully
fulfilling potential of female
talents in Miyagi Prefecture

Certified “Eruboshi (Grade 3),”commending general businessproprietors meeting the requirementsfor promoting female participation,
pursuant to the Act on Promotionof Women's Participation andAdvancement in the Workplace

Chosen as a constituent of MSCI Japan
Empowering Women Index, which recognizes
companies with outstanding efforts inpromoting the participation and advancementof women in the workplace

Received “Commendation for a Model BusinessCommitted to Creating Attractive Workplace”
from Miyagi Prefecture and Miyagi Labour Bureau

Percentage and number of women in managerial positions（ People）

150
100
ー ％
■ People
50
0

13.4
7.7
90
March 31,
2010

149
March 31,
2020

（%）

12

Certified as “Health and Productivity Management
Organization 2020 (White 500)”

840* Notes on MSCI indexes and logos, etc..
THE INCLUSION OF The 77 Bank, Ltd., IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF The 77 Bank, Ltd., BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOSARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

THE 77 BANK INTEGRATED REPORT

40

Governance Strategy
Board of Directors and Audit & Supervisory Committee Members

Koichi Suzuki

Managing Director
Apr. 1984
Mar. 2005
Sep. 2007
Jun. 2009
Jun. 2013
Jun. 2014（As of July 31, 2020）

Jun. 2015
Jun. 2018

Managing Director

Joined the Bank
General Manager, Wakuya Branch, the Bank
General Manager, Masuda Branch, the Bank
General Manager, General Affairs Div., the Bank
General Manager, Business Promotion Div., the Bank
Executive Officer and General Manager,
Business Promotion Div., the Bank
Director, Executive Officer and General Manager,
Oroshimachi Branch, the BankManaging Director, the Bank (current position)

Apr. 1985
Jun. 2005
Jun. 2008
Jun. 2010
Jun. 2012
Jun. 2014
Jun. 2016
Jun. 2018
Jun. 2019

Atsushi Shitoh

Joined the Bank
Chief Secretary, the Bank
General Manager, Fukushima Branch, the Bank
General Manager, Izumi Branch, the Bank
General Manager, Treasury
Administration & International Div., the Bank
Executive Officer and General Manager,
Tokyo Branch, the Bank
Director, Executive Officer and General Manager,
Head Office Business Div., the BankManaging Director and General Manager,
Head Office Business Div., the BankManaging Director, the Bank (current position)

Sep.

Managing Director
Apr. 1985
Sep. 2007
Mar. 2009
Jun. 2011
Jun. 2013
Jun. 2014
Jun. 2016
Jun. 2018

Yoshikazu Onodera

Outside Director
Apr. 1967
May. 1996
Jun. 1998
Sep. 1999
Dec. 2003
Jun. 2006
Jun. 2007
Oct. 2009
Jun. 2013

Apr. 1975
Aug. 2009
Jun. 2018

Apr. 1986
Sep. 2007
Jun. 2009
Jun. 2012
Jun. 2015
Jun. 2016
Jun. 2018
Jun. 2019

Masahiro Sugita

Apr. 1974
Sep. 1977
Jun. 1996
Nov. 2004
Jun. 2007
Jun. 2013
Jun. 2015
Jun. 2016

Emiko Okuyama

Oct. 1987
Apr. 1992
Apr. 1999

Jul. 2014
Jun. 2016
Nov. 2016
Apr. 2018
Jun. 2020

Director, Audit & Supervisory
Yoshiaki Nagayama
Committee Member

Jun. 2003
Nov. 2003
Jun. 2004
Jun. 2006
Jun. 2008
Jun. 2010
Jun. 2017

Hidefumi Kobayashi

Teruhiko Ujiie

Makoto Igarashi

President

Chairman

Senior Managing Director

Apr. 1981
Jun. 2006
Jun. 2008
Jun. 2010

Jun. 2013
Jun. 2014

Jun. 2015
May. 2016

Jun. 2016
Jun. 2017
Jun. 2018

Joined the Bank
General Manager, Treasury Div., the Bank
General Manager, General Planning& Coordination Div., the Bank
Director and General Manager,
General Planning & Coordination
Div., the Bank
Director and General Manager, Head
Office Business Div., the BankManaging Director and General
Manager, Head Office Business Div.,the Bank
Managing Director, the BankManaging Director, the Bank,
General Manager, Ishinomaki
Branch and Minato BranchManaging Director, the Bank
Representative Director and Deputy
President, the Bank
Representative Director andPresident, the Bank (current position)

Apr. 1969
Aug. 1992

Jun. 1993
Jun. 1995
Jun. 1997
Jun. 1998
Jun. 1999
Mar. 2000
Jun. 2002
Jun. 2005
Jun. 2010
Jun. 2018

41 THE 77 BANK INTEGRATED REPORT

Joined The Industrial Bank of Japan,
LimitedAssociate Director-General, Related
Business Department, The Industrial
Bank of Japan, Limited
Director and General Manager,
Business Development Div., the Bank
Director and General Manager,
Business Promotion Div., the Bank
Director and General Manager, Head
Office Business Div., the BankManaging Director and General Manager,
Head Office Business Div., the BankManaging Director and General
Manager, Investigation Div., the BankManaging Director, the Bank
Senior Managing Director, the Bank
Representative Director and Deputy
President, the Bank
Representative Director andPresident, the Bank
Representative Director andChairman, the Bank (current position)

Apr. 1980
Sep. 2000
Jun. 2002
Jun. 2004
Jun. 2005
Jun. 2006
Jun. 2009
Jun. 2012
Jun. 2013
Jun. 2017
Jun. 2018

Joined the Bank
General Manager, Onahama Branch,
the Bank
General Manager, Bashonotsuji
Branch, the Bank
General Manager, Shiroishi Branch,
the Bank
General Manager, General Affairs
Div., the Bank
General Manager, Personnel Div.,the Bank
Director and General Manager,
Tokyo Branch, the Bank
Director and General Manager,
Business Promotion Div., the BankManaging Director, the Bank
Senior Managing Director, the Bank
Representative Director and Senior
Managing Director, the Bank
(current position)

Apr. 1970
Jun. 2001
Jun. 2005
Jun. 2006
Jun. 2007
Jun. 2009
Jun. 2010
Jun. 2013
Jun. 2013
Jun. 2015
Jun. 2017

Apr. 1975
Jul. 2010
Jun. 2017
Jun. 2017
Jun. 2017

Kenji Kikuchi

Oct. 1973
Sep. 2005
Apr. 2006
Jun. 2007
Jun. 2008
Apr. 2014
Jun. 2015
Jun. 2017

General Manager, Head Office Business
Division, and Basho no Tsuji Branch

Joined the Sendai City Government
Vice Mayor, Sendai City
Chief Director, Sendai Green Association
President and Representative Director,
Sendai Software Center Co., Ltd.
Auditor, Sendai Meat Wholesale Market Co., Ltd.
(current position)
Chairman, Sendai Council of Social Welfare(current position)
Audit & Supervisory Board Member, the Bank
Director, Audit & Supervisory Committee Member,the Bank (current position)

Director, Audit & Supervisory
Committee Member (Outside Director)

Masahiro Wako

General Manager,
Personnel Division

Mitsuo Chubachi

Joined the Bank
General Manager, Nihonbashi Branch, the Bank
General Manager, Risk Management Div., the Bank
Audit & Supervisory Board Member, MIYAGI SYOJI Co., ltd.
Director and General Manager, Administration Div.,
77 Securities Co., Ltd.
Director, Audit & Supervisory Committee Member, the Bank
(current position)

Director, Audit & Supervisory
Committee Member (Outside Director) Masai Yamaura

Toshio Suzuki

May. 2001
May. 2003
Jan. 2011
Apr. 2012
Apr. 2016
Jun. 2019

Executive Officers

General Manager,
Audit & Inspection Division

General Manager,
Business Promotion DivisionJun. 2019

Joined the Miyagi Prefectural Government
Vice Governor, Miyagi Prefecture
President and Representative Director,
TECHNO PLAZA Miyagi, Inc.
President, Miyagi Organization for Industry Promotion(current position)
Director, Audit & Supervisory Committee Member,the Bank (current position)

Senior Executive Officers

General Manager,
Tokyo Branch

Apr. 1985
Mar. 2011
Jun. 2013
Jun. 2015
Jul. 2016

Joined Tohoku Electric Power Co. Inc.
Deputy Director and General Manager, Human Resources Division,
Tohoku Electric Power Co. Inc.
Director and General Manager, Human Resources Division,
Tohoku Electric Power Co. Inc.
Director and General Manager, Miyagi Branch, Tohoku Electric Power Co. Inc.
Senior Executive Officer and General Manager, Miyagi Branch,
Tohoku Electric Power Co. Inc.
Standing Statutory Auditor, Tohoku Electric Power Co. Inc.
Corporate Auditor, The Daishi Bank, Ltd.
Audit & Supervisory Board Member, the Bank
Chairman and Representative Director, Tohoku Intelligent
Telecommunication Co., Inc.
Advisor, Tohoku Intelligent Telecommunication Co., Inc.
Director, Audit & Supervisory Committee Member, the Bank (current position)

Director, Audit & Supervisory
Committee Member (Outside Director)

Seiichi Ohtaki

Assistant Professor, Faculty of Economics, Tohoku university
Professor, Faculty of Economics, Tohoku university
Professor, Graduate School of Economics and Management,
Tohoku university
Dean Graduate School of Economics and Management /Faculty of Economics, Tohoku University
President, The Sanaburi Foundation(current position)
Auditor, Yurtec Corporation
President, Organization for Creating LocalGood(current position)
Vice-President, Shizenkan University (current position)
Director, the Bank (current position)

Director, Audit & Supervisory
Committee Member

Joined the Bank
General Manager, New York Branch, the Bank
General Manager, International Div., the Bank
Director and General Manager, Business Promotion Div., the Bank
Director and General Manager, Tokyo Branch, the Bank
Director and General Manager, General Planning & Coordination Div.,the Bank
Managing Director, the BankManaging Director and General Manager, International Div., the BankManaging Director, the Bank
Senior Managing Director, the Bank
Representative Director and Senior Managing Director, the Bank
Representative Director and Deputy President, the Bank
Director, Audit & Supervisory Committee Member, the Bank
(current position)

Director, Audit & Supervisory
Committee Member (Outside Director)

Ken Nakamura

Registered as Attorney-at-Law (Sendai Bar Association)
Opened Nakamura Ken Law Office (current position)
Audit & Supervisory Board Member,
KOHSOKU CORPORATION
Auditor, HOKUSHU Co., Ltd.(current position)
Audit & Supervisory Board Member, the Bank
Director, KOHSOKU CORPORATION
Director, the Bank (current position)
Director (Audit & Supervisory Committee Member),
KOHSOKU CORPORATION (current position)

Outside Director

Joined the Sendai City Government
Mayor, Sendai City
Director, the Bank (current position)

Apr. 2011

Apr. 1971
Jun. 1993
Jun. 1995
Jun. 1997
Jun. 1999
Apr. 2001

Joined the Bank
General Manager, Koriyama Branch, the Bank
General Manager, Tokyo Liaison Office, the Bank
General Manager, Treasury Div., the Bank
General Manager, Credit Supervision Div., the Bank
Executive Officer and General Manager, Credit SupervisionDiv., the Bank
Senior Executive Officer and General Manager, Credit
Supervision Div., the BankManaging Director, the Bank (current position)

Outside Director

Joined the Bank of Japan
General Manager, International Dept., the Bank of Japan
Director, Research Institute of Overseas Investment,
the Export-Import Bank of Japan
Auditor, the Bank of Japan
Standing Audit & Supervisory Board Member, Banyu
Pharmaceutical Co., Ltd. (currently MSD K.K.)
Director, Horiba, Ltd. (current position)
Audit & Supervisory Board Member, the Bank
Audit & Supervisory Board Member, Banyu
Pharmaceutical Co., Ltd. (currently MSD K.K.)
Director, the Bank (current position)

Outside Director

Takuji Tabata

Managing Director

Joined the Bank
General Manager, Hachimanmachi Branch, the Bank
General Manager, Yoshioka Branch, the Bank
General Manager, Operations Management Div., the Bank
General Manager, General Planning & Coordination Div.,the Bank
Executive Officer and General Manager, General Planning &Coordination Div., the Bank
Director, Executive Officer and General Manager, Ishinomaki
Branch and Minato Branch, the BankManaging Director, the Bank (current position)

Yoko Ushio

Senior Managing Director and General Manager, Fujisaki
Comfortable Lifestyle Research Institute Co., Ltd.
Director, Department Store Fujisaki Co., Ltd.
Advisory Fellow, Tohoku Regional
Advancement Center
Fellow, Tohoku Regional Advancement Center
Auditor, Tohoku University (current position)
Director, Audit & Supervisory Committee Member,the Bank (current position)

Naoshi Aoyagi

General Manager,
Credit Supervision Division

Kazutoshi Saito

Kazuhito Chida

General Manager,
Digital Strategy Division

Masahide Kato

General Manager,
Consulting Promotion Division

Takashi Kuroda

Atsushi Kobayashi

General Manager,
Oroshimachi Branch

Masanori Muranushi

General Manager,
Ishinomaki Branch

Shuichi Ibuka

Yoshihiro Endo

General Manager,
Treasury Division

Hirokimi Fukushi

General Manager,
Compliance Management Division

Kuniaki Endo

THE 77 BANK INTEGRATED REPORT

42

Corporate Governance Initiatives■ Basic stance toward corporate governance■ Improvements in governance

We will work to strengthen and enhance corporate governance in accordance with the following basic stance.
• In accordance with the Bank Creed, which is our basic principle of management, we will operate business that give
constant consideration to the public mission of a regional bank — contributing to the development of the regional
economy and society — through banking operations.
• We will improve the transparency of management and the appropriateness of processes and work together
appropriately with stakeholders including the regional society, clients, and shareholders for the Bank’s sustained
growth and improvements in corporate value over the medium- to long-term.

The Bank transitioned in June 2017 from a company with the Board of Corporate Auditors to a company with an Audit &Supervisory Committee to improve corporate value through further enhancement of corporate governance, which was
followed by initiatives for developing further effective corporate governance structure through appointing Outside Directors
and female Directors.

General Meeting ofStockholders

3 personsAudit & Supervisory
Committee Members

Board of Directors

4 persons

・
・
・
・

・
・
・
・

9 persons

8 personsAudit & Supervisory
Committee

2 persons

Directors(Excluding Directors Serving as Audit& Supervisory Committee Members)

4 persons

Chairman

Executive Committee

President

Directors and General
Managers Liaison Committee
Compliance Committee

Deputy President

Directors

Director

Jun.
2017

■ Corporate Governance Structure

Corporate Governance Committee

Director・・・・

Audit & Supervisory
Committee Member

Outside Director

12 persons

Director

Jun.
2018

・
・
・
・

8 persons

3 personsAudit & Supervisory
Committee Member

2 persons

3 persons

Director

Jun.
2019

Ratio of Outside Directors

19 persons

26.3%
5/19 persons

Outside Director

・
・
・
・

8 persons

3 personsAudit & Supervisory
Committee Member

2 persons

4 personsRemarks

Total number of Directors

Ratio of Outside Directors

Remarks

16 persons

37.5%
6/16 persons

Addition of one Outside Director(female)(Ratio of female Directors: 6.2%)

Total number of Directors

Ratio of Outside Directors

Remarks

17 persons

41.1%
7/17 persons

Addition of one Outside Director
who is an Audit & Supervisory
Committee Member (female)(Ratio of female Directors: 11.7%)

Total number of Directors

Ratio of Outside Directors

Remarks

17 persons

47.0%
8/17 persons

Addition of one Outside Director

Transition to a company
with an audit & supervisorycommittee

3 personsOutside Director

Female Director

Total number of Directors

2 persons

2 personsOutside Director

Senior Managing
Director

Outside Directors

Director

Managing Director

Jun.
2020

■ Main members by organization
Title

Name

Board of Directors

Executive Committee

Corporate GovernanceCommittee（Representative Director）
Chairman

Teruhiko Ujiie○（Chairperson）○○（Representative Director）
Hidefumi Kobayashi
President○○（Chairperson）○○（Chairperson）（Representative Director）
Senior Managing Director

Makoto Igarashi

○

○

○

○

Managing Director

Koichi Suzuki

○

○

○

Managing Director

Atsushi Shitoh

○

○

○

Managing Director

Yoshikazu Onodera

○

○

○

Managing Directo

Takuji Tabata

○

○

○

Director

Masahiro Sugita

Director

Ken Nakamura

Director

Emiko Okuyama

Director

Seiichi Ohtaki

Director, Audit & Supervisory
Committee Member
Director, Audit & Supervisory
Committee Member
Director, Audit & Supervisory
Committee Member
Director, Audit & Supervisory
Committee Member
Director, Audit & Supervisory
Committee Member
Director, Audit & Supervisory
Committee Member

Yoshiaki Nagayama
Mitsuo Chubachi
Toshio Suzuki
Masai Yamaura
Masahiro Wako
Yoko Ushio

Other members○○（Chairperson）

○

○

○

Audit & Supervisory
Committee

Compliance
Committee

Audit & Supervisory
Committee Member

7 persons
2 persons

4 persons
4 persons■ Evaluating the Effectiveness of the Board of Directors
The Bank’s “Corporate Governance Policy” stipulates that the effectiveness of the Board of Directors as a whole isanalyzed and evaluated at the end of each fiscal year, and a summary of the results is disclosed.
After deliberation by the Corporate Governance Committee, the Board of Directors conducted an analysis and evaluationof the overall effectiveness of the Board of Directors for FY2019 at its annual meeting on May 15, 2020.
In this context, we have confirmed that the effectiveness of the Board of Directors as a whole has been ensured.
On the other hand, with the aim of further improving the effectiveness of the Board of Directors, the following matters havebeen confirmed and shared, and we intend to make improvements in the future.
・To strive to diversify the composition of the Board of Directors.
・To review the management of the Board of Directors to further invigorate discussions.

○○○△（Note 3）○△（Note 3）○○（Chairperson）△（Note 3）○△（Note 3）

○

○

○

○

○

○

○

○
General Manager of General
Planning & Coordination
Division

Enhancement of IR activities
The Bank is actively involved in IR activities including the holding of corporate
briefings for institutional investors and individual investors so that stakeholders
such as customers, the local community, and shareholders can understand the
management conditions of the Bank.
Results for FY2020

General Manager of General Planning &Coordination Division,
General Manager of Compliance Management
Division,
General Manager of Audit & Inspection Division*1 A Deputy President has not been appointed.
*2 Directors Masahiro Sugita, Ken Nakamura, Emiko Okuyama, Seiichi Ohtaki, Toshio Suzuki, Masai Yamaura, Masahiro Wako, and Yoko Ushio are Outside Directors prescribed in Article 2, Item
15 of the Companies Act.
*3 Standing Directors who are Audit & Supervisory Committee Members attend the Executive Committee and Compliance Committee, and state their opinions as necessary.
*4 The Chairperson of the Audit & Supervisory Committee observes the Corporate Governance Committee.

43 THE 77 BANK INTEGRATED REPORT

・
・
・
・

Outside Director

Corporate briefings for institutional investors

2 times/approximately 270 participants

Corporate briefings for individual investors

4 times/approximately 360 participants

Corporate briefings for clients by region

5 times/approximately 400 participants

Visits to foreign investors

February 2018: North America,
April 2019: Asia

THE 77 BANK INTEGRATED REPORT

44

Social Responsibility

Risk Management■ Compliance structure■ Strengthening of comprehensive risk management

The Bank formulated the Compliance Policies in order to clarify its stance on compliance and to ensure theeffectiveness thereof. Further, the Bank established the Compliance Guidelines (Compliance Standards) to articulate
specific guidelines and a code of conduct so that the executives and employees place importance on compliance,
thereby ensuring the lawful conduct of business.

The operating environment surrounding financial institutions has significantly changed in recent years, exposing themto an unprecedented variety of risks. In this environment, financial institutions are required more than ever before toaccurately identify, analyze and appropriately control risks.
From the viewpoint of increasing the soundness of management, the risks the Bank faces are assessed by category,and comprehensive risk management systems are established for self-control type risk management throughcomprehensive assessment, and by comparison and contrast with the Bank’s capital. At the same time, efforts arebeing made to improve risk management methods through means such as the enhancement of risk measurement
techniques.
We have implemented risk capital management as a specific framework for comprehensive risk management.
Risk capital management is a management method where a risk capital budget, which represent risk tolerance,is allocated by risk category to each unit (domestic business units, funds and securities units, and other units),
and the risks measured for each unit are monitored to ensure that they do not exceed their respective budgets.
Risk capital management is also utilized to monitor whether the expected profits that are suitable for the risks taken
are being secured.

Compliance Guidelines（Compliance Standards）【 Basic Direction】

1. Ensure sound management and pay the utmost attention to sustaining the Bank’s credibility and its
ability to maintain smooth financing.
2. Comply with laws and the code of corporate ethics and maintain fair and honest practices.
3. Take a principled stand with regard to issues that threaten social order or public peace.
4. Provide financial services that the region, customers, and society broadly trust and endeavor to achievesustainable development together with them as a good corporate citizen.
5. Foster a flexible and constructive working environment conducive to the well-being of all employees.

【 Code of Conduct】

Risk management structure
Board of Directors
Audit & Supervisory
Committee

Independent Auditors

1. We will comply with laws, ordinances, the Articles of Incorporation, the Rules of Employment, andinternal rules of the Bank.
2. We will not force unfair transaction on our customers.
3. We will not divulge confidential information of our customers or the Bank, or material information thathas not been made public.
4. We will not neglect to provide reports required by laws, ordinances, and internal rules of the Bank,or provide false reports.
5. We recognize the public nature and the large social responsibility of the Bank and will devote ourselves
to our duties.
6. We will not follow instructions or orders given by an individual that go beyond or deviate from theauthorities given to said individual.
7. We will not engage in such conduct as will undermine the credibility or honor of the Bank.
8. We will not do favors for our customers in violation of law, ordinances, or internal rules of the Bank.
9. We will not seek to make unfair profits by taking advantage of our duties or position.
10. We will not borrow from or mediate for someone to borrow from our customers, other executives,or other employees without legitimate reason.
11. We will not engage in socially unacceptable entertaining or gift giving.
12. We will make efforts to maintain order in the workplace.

Directors Responsible for Each Type of Risk

Compliancesupervisors(Major Roles)
Compliance-related education, inspection,
monitoring and the like within each company

Compliance management

Compliance Management Division
Audit & Inspection
Division(Complaints, antisocial inﬂuences,money laundering)Compliance Monitor (Senior Auditor)(Dishonest actions, internal audits)

Compliance Committee(Chaired by President)

General Planning &Coordination Division(Risk management, disclosure)Compliance Departments

Personnel Division(Maintenance of discipline andwork discipline)

General Affairs Division(General meeting ofstockholders, trafﬁc accidents)

Operations Management
Division(Operational accidents)(Chaired by General Manager ofCompliance Management Division)

Audit & Supervisory
Committee(Audit & Supervisory
Committee Members)

Compliance Manager(General Manager of Compliance Management Division)
Chief Compliance Ofﬁcer(Manager of Legal Affairs Section)

Headquarters and
BranchesCompliancepromotioncommittees(Chaired by General Managers)

Divisions and Main Branch:Compliance Ofﬁcer

Other:
Compliance liaison ofﬁcers

Note: Compliance ofﬁcers and compliance liaisons maintain their independence in the performance of their duties related to compliance and do
not follow the instructions of higher-ranking individuals.

45 THE 77 BANK INTEGRATED REPORT

Risk Management Division

Comprehensive Risk Management
Credit Risk
Management

Market Risk
Management

Liquidity Risk
Management

Comprehensive Operational Risk Management
Administrative
Risk
Management

Risk Management Division

Compliance

Information
Technology Risk
Management

Legal Risk
Management

Human Risk
Management

Tangible
Asset Risk
Management

Reputational
Risk
Management

Disaster and Other
Contingency Risk
Management

ComplianceManagement
Division

Personnel
Division

GeneralAffairs
Division

Risk
Management
Division

Digital Strategy Division
General Affairs Division
Operations
Management Division

Outsourcing Risk
Management
Operations
Management
Division

DigitalStrategy
Division

ComplianceManagement Division

Head Ofﬁce, Branches and Group Companies
Audit & Inspection Division

Subsidiaries
President =Director
responsible forcomplianceDirectors Responsible for Compliance

Capital management

Compliance structure

Board ofDirectors(Directors)

Executive Committee/Directors and General Managers Liaison Committee/Compliance Committee

Asset Assessment Audit

Internal Audit

Verification of the risk management system by the Audit & Inspection Division: The Audit & Inspection Division is the auditing unit for internal processes and asset status, and is independent of all business units. This division audits branches, Headquarters and Group
companies through comprehensive audits focusing on the verification of internal management systems (financial facilitation, compliance, customer protection, governance and management, and risk management systems) and physical inspections with the primary aimof preventing illegality.

Responding to increasing
cyberattacks

Development of business continuity systems in
response to the occurrence of large-scale disasters

In order to respond to cyberattacks, which arebecoming increasingly advanced and sophisticatedon a daily basis, the Bank has established Cyber
Security Management Regulations, and has
implemented multi-layer technical measures,
including the prevention of unauthorized intrusions
and blocking of information leakage, as well as
detection of malicious viruses.
In addition, the Bank has undertaken organizational
measures such as drills and exercises that assume
the occurrence of a cyberattack, and is continuously
working to strengthen systems for swiftly responding
to cyberattacks.

The Bank has developed a Disaster Emergency Response Plan that clarifies the basic
principles of action for times of emergency, such as earthquakes or other disasters
and systems failures.
Under the Disaster Emergency Response Plan, we have worked
to develop systems to ensure business continuity through the establishment ofbusiness continuity plans for continuing the minimum operations required to maintainthe finance function, and to achieve the prompt resumption or recovery of this function,in the event that the Bank incurs sufficient damage that it becomes impossible to fulfill
normal bank operations, due to an unforeseen disaster. In addition, in order to confirm
the effectiveness of the Disaster Emergency Response Plan, we conduct regulardisaster drills and business continuity drills and conduct revisions to make our
preparations for disaster more robust in consideration of the damage caused by theGreat East Japan Earthquake in an effort to strengthen the Bank’s crisis response
capabilities.

THE 77 BANK INTEGRATED REPORT46