Annual Report2023
Purpose (Significance of Existence)

Open Up a Bright Futurefrom Yamanashi

Local Industries in Yamanashi Prefecture
Yamanashi Prefecture, with about 80% of its total area covered by forests, is blessed with abundant nature, including Japan’s tallest mountain Mt. Fuji (registered as a World Heritage Site) and the Akaishi Mountains. The prefecture is also home to many unique local industries
that take advantage of its natural environment, including agricultural products such as peaches and grapes, as well as wine and jewelry.

Preparations forHigh-Speed Transportation Network
Expected
Effects

Increase in tourists from Kansai and Tokai regions, increase in opportunities for receiving
orders, expansion of logistic facilities, and increase in residents due to expanded
commuting radius to Greater Tokyo, etc.

Shinkansen Maglev Train

1

2•	Oct. 2014: Minister of Land, Infrastructure,
Transport and Tourism approved the start ofconstruction, with the opening planned for 2027.

3

Map of Shinkansen Maglev Train RouteScheduled to start operation in 2027

•	Dec. 2015: Construction began on the Yamanashi
section of the Southern Alps Tunnel(communication route).

Yamanashi
Prefecture

Yamanashi Maglev Test Line

Nagoya•	Nov. 2016: Construction began on the Nagano
section of the Southern Alps Tunnel.

Shinagawa

Kofu

Sagamihara• Jan. 2016: Shinagawa Station construction began.
Osaka•	Mar. 2017: Yamanashi Prefecture creates the“Linear Environmental Future City Improvement
Policy.”4

Nakatsugawa

Iida•	Apr. 2018: Construction began on the Yamanashi
section of the Southern Alps Tunnel (mail line).

Nara* Station locations further west of Nagoya are
undecided.

Traveltime

Shinagawa – Kofu
25 minShinagawa – Nagoya 40 min
Shinagawa – Osaka 67 min•	Nov. 2019: Construction began on Kanagawa
Prefecture Station (tentative name).

Local
Industries

Chubu Odan Expressway
Saku-Komoro
JCT

Joshin-Etsu Expressway
Nagasaka JCT – Yachiho IC
Completed “planning stage
assessment” in Apr. 2015

Yachiho5Chuo Expressway

6

Connected to Kanetsu
Expressway bound for
Saitama and Hanazono

Nagasaka

Chubu Odan Expressway

OkegawaKitamoto IC

Nishi Kanto Expressway

Ken-O Expressway

FutabaHachioji JCT

OtsukiShiraneKofu

Takaosan IC

Minami-Alps
MasuhoChuo Expressway
Rokugo

7

1

8

Wine

2

9

Silk Fabric3

Traditional Japanese Paper

26.3% share of production amount ranks first inJapan. Yamanashi wine was designated for a special
label by the National Tax Agency.
4

FruitsHarvest of grapes, peaches and Japanese plums
ranks first in Japan.
7iKnit Products
THE YAMANASHI CHUO BANK 2023

5

Jewelry

6

Mineral Water

Sake

9

Inden Leather

Nakatomi
ShimobeOnsen
Hayakawa

Shimobe Onsen Hayakawa IC –Nanbu IC
Opened to traffic
on Aug. 29, 2021

Minobusan

Whole route opened to traffic onAug. 29, 2021

Higashifujigoko Road

Subashiri IC – Gumisawa IC
Scheduled to open to traffic in FY20

Shin-Tomei
Expressway

SagamiharaAikawa IC

Ebina IC

Subashiri IC

Nanbu

Nanbu IC – Tomizawa IC
Opened to traffic
on Nov. 17, 2019
Tomizawa IC – Shin-Shimizu JCT
Opened to traffic on Mar. 10, 2019

Number of manufacturing locations ranks first inJapan.
8

Fujiyoshida

Rokugo IC – Shimobe Onsen
Hayakawa IC
Opened to traffic on Mar. 10, 2019

Gotenba IC
Gotenba JCT

Tomizawa
Shin-Shimizu
JCT

Tomei Expressway

Access between Kofu City and Shizuoka City within 1
hour and 40 minutes (1 hour faster) via the Shizuokabound opening of the Chubu Odan ExpresswayiiOur Mission

Consolidated Financial Highlights
The Yamanashi Chuo Bank, Ltd. and Consolidated Subsidiaries Fiscal years ended March 31

Region-Based Operations and Sound Management

Millions of yen

Maintaining a close relationship with the communities in the region where we

2019

2020

2021

2022

2023

operate, we will contribute to the prosperity of the region and the development of its

Ordinary income

52,35344,87849,602

46,31060,552

economy, with a commitment to sound management that enjoys the trust of ourOrdinary profit

7,458

6,726

6,229

6,624

7,721

Profit attributable to shareholders of the parent

4,908

3,764

3,090

4,241

5,061

Comprehensive income

6,740(20,412)22,851(8,867)(15,637)

Net assets

222,388

199,661

221,439

211,494

193,263

Total assets

3,480,808

3,511,412

4,185,672

4,469,779

4,380,458

Net assets per share (Yen)

6,652.04

6,183.83

6,849.57

6,515.85

6,129.98

Profit per share (Yen)147.15116.4396.92

132.73161.78

Capital adequacy ratio (Domestic standard, %)

13.80

13.22

12.78

11.71

10.72

Return on equity (%)

2.25

1.80

1.48

1.98

2.53

Price earning ratio (Times)

9.31

6.32

9.48

7.17

7.05

Cash flows from operating activities

82,750(23,354)446,423

267,979(293,875)

Cash flows from investing activities

124,502(134,180)(62,012)(112,069)

297,562• Strategy to double productivity:
Dramatic improvement in productivity by zero clerical workand channel reform

Cash flows from financing activities(1,681)(2,287)(1,117)(1,120)(2,635)516,974

357,152

740,447

895,241

896,292• Strategy of pursuing sustainability:
Realization of coexistence of sustainable management andregional communities

Notes

customers, while bolstering our business operations.
Long-Term Vision(Value Creation Bank)
As we approach our 150th founding anniversary,
we aim to be a financial group that all stakeholders
can rely upon to realize an enriched regional
community, delighted customers, fulfilledemployees, and satisfied shareholders.

The 3S Action
Guidelines
Smile, Speed and Simple

Basic Strategies of the Medium-Term
Management Plan “TRANS3”• Strategy to increase business capacity:
Refinement of the core business and taking on the challengeof new business opportunities

YamanashiTokyo

Mt. Fuji

Cash and cash equivalents

1. The method of presentation was changed in the fiscal year ended March 31, 2021, and the amount for “Ordinary income” for the
fiscal year ended March 31, 2020 has been reclassified accordingly.
2. The Bank consolidated its shares at a ratio of five shares to one share on the effective date of October 1, 2018. Accordingly, net
assets per share and net income per share are calculated on the assumption that the consolidation of shares was conducted at the
beginning of the fiscal year ended March 31, 2018.
3. The capital adequacy ratio is calculated on a consolidated basis in accordance with Bulletin Notification No. 19 issued by the
Financial Services Agency in 2006 under Paragraph 2, Article 14 of the Banking Law. The Bank has adopted the Japanese standard forthe calculation.

Profile (as of March 31, 2023)
Corporate Name:The Yamanashi Chuo Bank, Ltd.

Head Office:20-8, Marunouchi 1-chome, Kofu, Yamanashi

Established:

December 1, 1941

President:

Yoshiaki Furuya

Common Stock:¥15,400 million

Number of Shares Issued:

32,783,000 shares

Stock Listing:Prime Market of the Tokyo Stock Exchange

Long-Term Credit Rating:A− (Rating and Investment Information, Inc.)

Network:

Head Office and Branches: 89 (including 1 Internet Branch)
District Offices: 10 (including 8 Life Square desks)

Businesses:

Total assets(¥ billion)

Head Office

The Yamanashi Chuo Bank Group comprises the Yamanashi Chuo Bank and four consolidated subsidiaries.
Centered on its core banking business, the Group provides an integrated financing service that includes aleasing and credit card business. The Bank is the leading local bank in Yamanashi Prefecture, and its sphereof operations encompasses both the prefecture and the western part of the Tokyo metropolitan region.

ROE/
Capital adequacy ratio

Profit attributable toshareholders of the parent(%)(¥ billion)
6.0

4,600
4,400

(Domestic standard)

5.0

15.0

12.0

4,200

Capital adequacy
ratio

4.0

4,000

9.0

3,800

3.0
6.0

3,600

2.0

3,400

Forward-looking statements
Statements contained in this report regarding the Bank’s future performance do not constitute statements of historical fact, and are thus subject to a number of risks anduncertainties. Readers are therefore cautioned not to place undue reliance on forward-looking statements, as factors beyond the Bank’s control and outside its ability to predict,including general economic conditions and market fluctuations, could cause results to diverge materially from the Bank’s projections.

iii

THE YAMANASHI CHUO BANK 2023

3,000

March 31

2019

2020

2021

2022

2023

0.0
FY

ROE

3.0

1.0

3,200

0.0

2019

2020

2021

2022

2023

FY

2019

2020

2021

2022

2023

iv

Non-Financial Highlights
Activities to tackle environmental problems
Reduction of CO2 emissions*

Reduction of electricity consumption
9,074

8,470

Reduction of paper consumption(Unit: t-CO2)(Unit: 1,000 kWh)

4,813

8,213

4,540
16,189

3,074

(FY)

2020

2021

2022

(FY)

2020

(Unit: 1,000 sheets)

26,532

2021

2022

(FY)

2020

15,2662021

Number of customers for asset succession(business succession and inheritance measures) and M&A support
Number of customers for
asset succession support

451(FY2022)(FY2022)

Number of customers
for M&A support

450(FY2022)46 /2,548
times

peoplePercentage ofoutside directors

Number of female employees
taking childcare leave

33%

Female managers
and supervisorsv

2

THE YAMANASHI CHUO BANK 2023

Corporate
auditor1

113

Purpose of the Yamanashi
Chuo Bank Group(Significance of Existence)

Medium-Term Management
Plan “TRANS3 2025”

Business Foundation in
Support of Value Creation

37

Toward Achieving the
Medium-Term Management
Plan

58

Risk Appetite Framework(RAF) Initiatives

58

Corporate Governance38

Increase Business Capacity

59

Risk Management

41

Double Productivity

60

44

Pursue Sustainability

Compliance and Customer
Protection

62

Board of Directors andCorporate Auditors

64

Organization Chart

9

Value Creation Bank

10

Value Creation Processes

12

Materialities (Key Issues)

13

Towards Improving
Corporate ValueBusiness Foundation to
Support Each of Our
Businesses

14

Growth Strategy

47

23

Capital Strategy

30

Sustainable Strategy

Initiatives toward
Realizing Human CapitalManagement52

Responses to TCFD
Recommendations

54

Leveraging Consulting
Functions Based on BusinessFeasibility Studies

55

Initiatives for Revitalizing
Local Economies andContributing to Regional
Commu­nities

Financial Review
66

Financial Review

67

Consolidated Balance
Sheets69

Consolidated Statements ofIncome71

Consolidated Statements ofComprehensive Income

72

Consolidated Statements of
Changes in Net Assets

75

Consolidated Statements ofCash Flows77

Notes to Consolidated
Financial Statements

people(FY2022)

Number of male employees
taking childcare leave

444

Initiatives to utilize diverse human resources

Directors

16 /178
times

Initiatives for corporate governance

Number of
female officers

Number of volleyball workshops
held and number of participants

Total number ofvisitors to the
Financial Museum

64,5688

Message from an Outside
Director

Initiatives to contribute to regional society
Number of financial
training sessions held andnumber of participants

Message from the President

Towards Realizing Value
Creation

Initiatives to revitalize regional economies

4,008

2

2022

* The Bank’s Scope 1 (kerosene, fuel oil, diesel oil, gasoline, city gas,and LP gas) and Scope 2 (electricity) emissions in periodical
reports as stipulated in the Energy Conservation Act

Number of consulting
support cases

CONTENTS

89

Number of people engaging in aside business(As of March 31, 2023)

10
1

Message from the President

President

Aiming to engage in business to resolve issues and realize our Purpose
My name is Yoshiaki Furuya. I was appointed as Presidentof Yamanashi Chuo Bank in June. I joined the Bank in
1986 and gained experience in sales at several branches,
before working in the Sales Management Division, theCorporate Planning Division, and other divisions witha focus on planning work related to sales and management. I served as an executive officer in 2015 as the headof the Sales Management Division and the head of theKugawa Branch. Following this, I became a director in2019 and worked as the head of the Tokyo Branch, andthen became a senior managing director in 2021, before
being appointed as the President in June 2023.
While there are still some areas of uncertainty regarding the future in Japan, its economy and society are
gradually recovering from the confusion of the COVID-19
pandemic. On the other hand, with growing global disparity and a shift to bloc economies, we face the immediate task of building new supply chains.
Turning our eyes toward Yamanashi, we can seethat it has made progress in preparations for a high-speedtransportation network, including the Shinkansen Maglev
Train, the extensions to the Chubu-Odan Expressway, andthe improvements to the Chuo Expressway. These willbring about drastic improvements in terms of access to
Yamanashi, and there is no doubt that the prefecture will
enjoy a greater inflow of people moving to and visiting it
going forward. I expect that this trend will also help create

2

THE YAMANASHI CHUO BANK 2023

new business opportunities.
However, some local companies have expressed
concerns about the development and continuation ofbusiness due to being severely impacted by high prices,labor shortages, and other factors. Yamanashi is also
being affected by the wide-reaching trends of the declining birthrate and the aging and declining population.
To tackle these challenges being faced by individual companies as well as the local community as a whole,
we must not only engage in our traditional and conventional banking business, but also work swiftly to build a
new business model based on resolving these issues.
The issues faced by regional society are complex anddeep-rooted. They cannot be resolved through our conventional banking functions, so I believe that we shouldhave functions for resolving issues creatively in a similar
way to trading companies.
I would like the Bank to go beyond conventionalframeworks and transform into a company that can work
together with corporate and individual customers as well
as regional society to resolve the issues they face. Banks
do not simply provide loans. They provide consulting
and other expert services, and they can create many new
frameworks by collaborating with other companies. If we
expand these initiatives further, we will be able to resolve
more issues in regional society, and thereby create new
business opportunities for the Bank.

Last year, Yamanashi Chuo Bank established its
Purpose as “Open Up a Bright Future from Yamanashi.”This Purpose represents our desire to leverage the Bank’s
strengths with its foundations in Yamanashi as we communicate the appeal of the local area and give robust
support to our customers, with the ultimate aim of revitalizing the whole of Yamanashi and working with a wide

range of related parties beyond the prefecture’s borders
to advance forward together. Our significance of existence
is to resolve regional issues and to support regional development. To this end, the Bank will bring together many different stakeholders and support their activities by utilizing
the Bank’s talent pool that has diverse personalities andexpertise, so that the region can reach its full potential.

Progress and results in the Medium-Term Management Plan: Aiming toachieve an ongoing increase in corporate value
FY2022 was the first year of our Medium-Term Management
3
Plan “TRANS 2025” that we established last year. This
Medium-Term Plan is positioned as a three-year period
to put the Bank on a growth trajectory by linking value
creation for stakeholders through our business with theeconomic value of the Bank. It consists of three basic
strategies—the strategy to “increase business capacity,”
the strategy to “double productivity,” and the strategy of“pursuing sustainability”—as well as three transformation
drivers to execute these strategies: “AX (Alliances),” “DX(Digital),” and “SX (Sustainability).”
Of these three basic strategies, we will work on our
strategy to increase business capacity through a twopronged initiative, of deepening and expanding our corebusiness to further reinforce our main field of finance,
while also exploring new businesses.

For our efforts to deepen and expand our corebusiness, we have clarified the Bank’s regional strategy
with respect to Yamanashi and Tokyo.
In Yamanashi, we have promoted initiatives tobolster loans through consulting sales activities by integrated efforts between branches and the Head Office,as well as support for financing for customers who havebeen impacted by COVID-19 or other factors. Meanwhile,in Tokyo, the Tokyo Business Development Division ismaking a significant contribution toward creating newopportunities for revenue that the Bank has not generate
in the past, such as by incorporating capital needs using
commercial distribution and capital needs for wealthy
customers. We have established new clear definitions
for all of our missions in relation to these efforts, thereby
allowing us to carry out highly effective sales tailored3

to regional characteristics. We consider Yamanashi
and Tokyo as a single unified base for sales, and we are
gradually creating new demand in both regions throughmeticulous efforts to match seeds with needs.
As a result of these initiatives, we successfully increased our loan balance (average balance) as of March
31, 2023, by more than 200 billion yen year on year. We arealso actively providing business loans with greater focus
than ever on our regional strategy, and we are working
toward the establishment of a sustainable revenue structure by demonstrating our true value as a consulting bank.
I believe that there is still room for growth in thefield of personal loans. We will work based on our strategies for each market as we enhance the product featuresof housing loans, strengthen sales to business operators,
and engage in other initiatives. At the same time, we will
strategically strengthen unsecured personal loans, forwhich there exist a wide range of needs.
Toward exploring new businesses, the Regional
Revitalization Promotion Division will play a central rolein initiatives for a human-resources-related business,sightseeing business, decarbonization-related business,and other new businesses that will contribute to solving
regional issues.
Next, for our strategy to double productivity, weare taking on the challenge of achieving zero clerical workand next-generation channel reforms. In this way, we areaiming to realize a dramatic increase in productivity.
For our challenge of achieving zero clerical work,
the Zero Clerical Work Promotion Section in the General
Administration Control Division is playing the main rolein driving multiple measures, such as reviewing rules
and process flows (simplification), utilizing middle officecenters (centralization), and introducing semi-self-service
terminals (systemization). Through these efforts, we aremaking strong progress in reducing clerical work at ourbranches. We are carrying out similar efforts for clerical
work for loans, with reassessment work for real estatecollateral and corporate screening work being centralized
at the Head Office. In addition, we are exploring ways tocentralize business loans at the Head Office.
As a result of these initiatives, we had reduced
the clerical work load during the period of this MediumTerm Management Plan by 141,000 hours as of March 31,
2023. This is a progress rate of 70.5% toward our targetof 200,000 hours, and this rate continues to steadily rise.
Regarding next-generation channel reforms, wehave set goals of shifting from branches with full-range
services to function-specific branches in more than fivebranches, and of consolidating branches based on abranch-in-branch method for more than five branches. In
this way, we are working to streamline branch operations.
Recently, we made changes to the Kichijoji Branch, and weplan to make changes to the Koganei Branch in August andto the Ryutsu Center Branch in October. In October 2022,
we switched to completely online services for applications
and other procedures in personal Internet banking, and in
April 2023, we launched new smartphone app services forindividual customers as well. We will take full considerationof customer convenience as we expand digital channels inparallel to build an optimal channel arrangement.
For our final basic strategy of pursuing sustainability, the Bank is focusing on its sustainability initiatives,

4

THE YAMANASHI CHUO BANK 2023

among other efforts, to build a sustainable corporate
culture. We are particularly focusing on the realization ofhuman capital management and the attainment of a highlevel of governance.
It is essential to integrate management and humanresource strategies in order to realize human capitalmanagement. We have established a human resource
portfolio based on our business portfolio, and we areworking to recruit and train a diverse pool of talent withhigh levels of expertise. For example, we have introduceda system for side jobs outside the Bank and dual employment inside the Bank, as well as a post challenge systemthat allows employees to apply for transfers to divisionsof their choice. We are also working on many other initiatives, such as a program to develop female managers.
Alongside human resource development, we are also
working to secure talent by utilizing the welcome backsystem that we have introduced, and by carrying out
mid-career recruitment.
In line with our aim of attaining a high level ofgovernance, we have divided the Bank’s sales areas into
six and have established Regional Head Offices in all six
areas. By working to strengthen area governance, we
are aiming to improve the effectiveness of management
strategies and make speedy decisions. In addition, theBank solves problems in a precise and speedy manner in
response to regional characteristics and issues, not only
according to each area branch, but also based on wider
relationships.
Next, I would like to discuss our three transformation drivers. For AX, we have a beneficial alliance with
Shizuoka Bank and we have been generating synergies
that have exceeded our expectations ever since we began
this business cooperation. We originally set forth a synergy
target of achieving over 10 billion yen as the combined
five-year totals of the two banks, and we can expect torealize this target earlier than planned. Specifically, weare producing significant results in the field of corporate
finance, such as with structured finance and syndicate
loans. The Bank also entered into an alliance with Shizugin
TM Securities Co., Ltd. in April 2021, enabling it to respondwith an even wider range of solutions to regional customers’ asset management needs. I believe that we have identified the ideal approach for alliances as a regional bank.
For DX, we have created an in-house certification
system with multiple levels for DX promotion leaders,
and we are working to develop our human resources. DX
planners are the main constituent of our DX promotion
leaders, with over 160 in FY2022 (our fiscal-year-end
plan was 150). We plan to gain more certified personnel
on a gradual basis, going forward. DX managers are at ahigher certification than DX planners. We are conducting detailed programs on a steady basis to develop DX
managers as well.
For SX, the Sustainability Committee is conducting
human capital management with myself as President
serving as the chair of this organization. In addition, weare holding discussions and are promoting multiple
measures across the Head Office divisions to address
climate change and in line with the SDGs and ESG. To accelerate even more the progress of our SX-related measures,
we have established and published the Yamanashi Chuo
Bank Group Sustainability Policy.

Future challenges: toward the realization of Value Creation Bank
Going forward, we will continue to promote the measures
set forth in our Medium-Term Management Plan to realize
the Bank’s Purpose and Long-Term Vision.
In particular, in order to deepen and expand ourcore business, we aim to establish functionality as aconsulting bank and create a solid revenue structure. To
this end, it will be essential to restructure our strategies,
including those of all Group companies. We will also
further deepen our Tokyo strategy and push forward withsales while considering Yamanashi and Tokyo as a single
unified region.
At present, we are focusing our efforts into management support for customers who are struggling fromthe lingering effects of COVID-19, as well as the effects ofhigh material costs and prices. Specifically, we are concentrating our efforts on support for financing and support
for business restructuring. On the other hand, we also
wish to give assistance for the further business development of customers who are currently performing well. For
example, reinforcing human capital management is an
important topic in this regard and is related to issues suchas labor shortages and wage increases, as well as otherchallenges. The Bank will bolster its own initiatives while
also dedicating itself to supporting customers.
Our immediate task for individual customers is tosupport their asset building. With an upcoming revision
to the NISA system, we must work earnestly to provide
information to customers and accommodate their consultation needs. We will also strive to improve convenienceso that a wide range of customers can more easily accessfinancial services at any time.
In terms of our initiatives for new businesses, we
aim to establish new companies to provide solutions forregional issues and to achieve a dramatic boost in ourability to tackle challenges, while also establishing these
efforts to serve as a new pillar for revenue.
We will continue to refine our efforts to increase productivity. We have already worked on centralizing work at
branches and on introducing new systems. Going forward,
we plan to further incorporate opinions from inside the
Bank and drive efforts to achieve zero clerical work.
In addition, we will work on channel reforms basedon the smartphone app that we launched in April 2023,
and we will bring about dramatically improved customer
convenience while further expanding the use of theBank’s wide range of functions and services.
Apart from these basic strategies, it is vital to havefinancial and capital strategies as well. We are working toachieve a further increase in corporate value while considering the cost of capital.

5

In principle, we will maintain a good balance as we
promote the three basic strategies in the Medium-Term
Management Plan, and thereby optimize capital efficiency. In particular, we place the utmost importance on
optimizing returns in our business portfolio to produce
capital revenue as well as fee and commission income. As
such, we will bolster our controls for this. In addition, weare engaging in our fundamental activities to deepen our
traditional loans business, while also working to expand
our fees business in new fields.
For the time being, we will maintain a consolidated

regulatory capital ratio of approximately 10% with consideration of risk factors and operational stability, while also
aiming for ROE of 5%. However, we will flexibly review ourcapital policies and further utilize regulatory capital totake on the challenge of realizing ROE that surpasses 7%of the Bank’s capital costs.
Going forward, we will engage in constructive
conversations with shareholders and investors while
continually refining our strategies and policies to achievesustainable growth and increase our corporate value.

Create an organization in which diverse human resources with expertisecan develop and thrive to solve issues
Among these challenges described above, I want us toparticularly focus our efforts into promoting corporate
culture reform and human capital management. In orderto help solve regional issues as a company, we must fostera spirit and culture in which the employees with uniqueexpertise can take on new challenges with a more flexible
mindset. To this end, it is vital to have a flat organization
with active communication and a forum for rational
debate based on data. Allow me to expand on this point
in a little more detail.
In order to become a company that can solve issues
together with customers and regional society, and inorder to deepen our businesses and attain greater diversity, it is essential for each and every employee to possessa high level of expertise.
The Bank has defined its human resource portfolio
for the future and is working to develop DX experts andother kinds of talented personnel who can offer services
in multiple areas, including consulting. To this end, it isnecessary to boost productivity and assemble talented
people. At present, we have set the initial goal of securing
230 people. In addition, we are carrying out reskilling
and repositioning so that our assembled talented people
can build their expertise. For employees with no priorexperience in sales, it will be imperative to provide opportunities for them to gain such experience, in principle.
To achieve even more refined consulting, employees will
utilize external training programs as well as the internal
dual employment (job trial) system that began in October
2022 to carry out work in their current division while alsobuilding their experience by working at specialized Head
Office divisions on a regular basis. This system is designed
to encourage the employees to take on new challenges
voluntarily, and I want us to provide them with even more

opportunities in the future.
I would like to respect the autonomy of theemployees as we carry out reskilling and internal dual
employment initiatives. By allowing personnel to boost
their expertise in the field of their choosing, we will gain
diverse human resources inside the Bank who customers
will find interesting. I think it will be exciting to build anorganization in which these diverse personnel can cometogether and work on projects to solve issues for customers and regional society.
To bolster these initiatives, it is vital to change thestyle of communication inside the Bank. I would like theorganization to develop in a way that encourages all employees to be more flexible, to express their opinions in amore active way, and to engage in discussions together.
To achieve this, I want us to invert and compress
our hierarchic pyramid structure and build a flat organization in which people can easily communicate and saywhat needs to be said. I believe it is necessary to not only
encourage communication from the lower levels to theupper levels in the hierarchy and vice versa, but to alsoenable diverse and direct communication in all directions,
whether vertically, horizontally, or diagonally.
In the past year, I visited all the branches of the
Yamanashi Chuo Bank and held informal meetings to talkwith personnel, particularly with our younger employees.
These meetings took place during the day, so it was notpossible for all staff members to attend them. However,participants were able to ask me questions about details
they wished to know, and I talked about what I am interested in and what I am thinking about, as well as othertopics that were not directly related to work. I wish toactively create more opportunities like this in the future.

Creating innovation with a marketing mindset
In addition to establishing a flat organization, our policy
is to always considering marketing and innovation in our
initiatives. The basis for all actions at the Bank is to look at
the issues that customers and regional society are facing.
It is vital to pay attention to our customers and all otherstakeholders, to consider what their issues are, and to linkthese issues with business that the Bank can carry out. To

6

THE YAMANASHI CHUO BANK 2023

this end, we must adopt a marketing mindset. Instead of
falling back on preconceptions, relying on sheer willpower to pull us through, or considering only what is best for
the Bank, we must always maintain a customer-oriented
perspective and think scientifically based on data.
I believe that a company can produce innovation if
it continues to strive with a marketing mindset. Innovation

does not only refer to the creation of a new technologies
or products. It can also mean efforts to create new trends
by collaborating with the local community. I hope to work
while viewing issues in the local area as a starting point
to bring about unprecedented innovation that will amaze
people with new ideas that they would have never otherwise conceived of.
I was stationed in London as part of the trainee
system when I was young. I decided to go with thehomestay option, because I wanted to communicate inEnglish and immerse myself in the culture. It was a shock
to learn the sheer diversity of people and work styles there.
At the time, it was commonplace in Japan to work
late into the night. I spoke with a staff member from
Europe about the situation in banks at the time, in whichpeople in Japan would stay up late to create proposals
and then speak to other team members to build a consensus and ultimately gain approval. This staff member
told me frankly that he would never want to work in acompany like that. At that moment, I became painfully
aware that Japan had a completely different approach to
the rest of the world. When Japan was prospering during
its economic bubble, western companies were making
a rapid shift toward new and rational work styles. I haveheld this experience to heart for many years, and so I was
happy to see the recent trends in Japan towards work
style reforms and productivity improvements, even if
these trends do feel rather late.
To create an organization in which everybody canshine, the Bank must now make a complete shift towards
an organization that does valuable work with a marketingmindset and that communicates across a flat structure.
We must think about what customers find importantand meaningful and then work efficiently on tasks that
produce value while exchanging a diverse range of
opinions together. This approach should be at the rootof our efforts for work style reforms and organization
establishment so that everyone can carry out tasks comfortably. The Bank introduced a flextime system in April
2023, among other initiatives, to realize flexible work
styles. However, the ratio of female managers and supervisors at the Bank is currently 14.8% (as of March 31, 2023),
which is still far from the ideal of 40% that we set as a KPI.
We will worker harder than ever on work style reforms aswell as on initiatives for Diversity, Equity, and Inclusion,and thereby strive to establish an organization in which
everyone can truly shine as they carry out their tasks.

Open up a bright future from Yamanashi and bring the Bank’s creation ofshared value to the next level
People lament the decline and stagnation of Japan’s
power as a nation, but I believe that the country can only
recover if its local communities recover first. The Bank’sroles are to contribute to development to bring abouta bright future for customers and to strive for regional
economic revitalization at our Yamanashi and Tokyo sales
bases. To this end, we will utilize the network that we havebuilt up and the insights we have gained in our fields ofexpertise to create even more value over an even broader
area than ever before while still focusing on Yamanashi
and Tokyo. We must keep a close watch on technologicaldevelopments and changes in people’s behavior as wetake a new perspective that is unrestricted by conventional frameworks or methods. While doing this, we mustpursue further operational transformation and at thesame time, redefine and expand our business domains. I
believe we can generate new value by creating innovation from the Bank and by launching new businesses.
I plan to practice so-called servant leadership to
encourage the Bank to demonstrate performance to thislevel. The Bank has declared its Vision and its aims for abright future, and I wish to maximize the organization’s
performance alongside this not through orders and instructions, but through empathy and conversation. Basedon the Bank’s Purpose of “Open Up a Bright Future from
Yamanashi,” we will work based on the foundations that
we have built up to this point, and bring together evenmore employees with talent, wisdom, and experienceto carry out exciting work. This is my vision for our new
endeavors in the future.

I would like to redouble my efforts to create sharedvalues while continuing to engage in conversation andcooperation with a larger number of stakeholders. So
going forward, I look forward to maintaining our relationship together.

7

Purpose of the Yamanashi Chuo Bank Group (Significance of Existence)z Defining the Purpose (significance of existence)
The Bank has announced its Purpose (significance of existence) in society in writing in line with the formulation of the Medium-Term Management Plan to promote human resources with various values in the future, toward the realization of a sustainability-oriented society.
The Bank has redefined its Long-Term Vision “Value Creation Bank” to further clarify “why it exists andengages in business activities and what kind of value it continues to give to stakeholders.”“Keeping Close Ties with Local
Communities and Ensuring
Sound Management”

Management
philosophy“Value Creation Bank”

VisionMedium-Term Management Plan

Action guidelines (3C and 3S)
Semiannual plan based on theMedium-Term Management Plan

While its management philosophy neverchanges, the Purpose is positioned as aneasy-to-understand message for both inside and outside the Bank, in which theconcept underlying its management philosophy, Vision, etc., is made clear.

Action guidelines
Business operation policy
and measures

Purpose of the Yamanashi Chuo Bank Group (significance of existence)

Open Up a Bright Future from Yamanashi

8

THE YAMANASHI CHUO BANK 2023

Value Creation BankzThe value the Bank aims to deliver as a “Value Creation Bank”

Value Creation Bank
A financial group that meets the expectations of all its stakeholders by delivering “Prosperity
for Regional Communities,’’ “Smiles for Customers,’’ “Job Satisfaction for Employees,”and “Satisfaction for Shareholders” as it celebrates its 150th anniversary.

Purpose (significance of existence)Management strategy
Management planning

Toward high level sustainability management, Yamanashi Chuo Bank
has identified themes of materiality (material issues), such as strengthening various relationships and increasing regional economic activity,
realizing the digital transformation (DX) and digitalization of regionalsociety, and maintaining a rich natural environment to pass on to the
future, and it is working to resolve these issues.
Yamanashi Prefecture has rich nature, including Mt. Fuji, Yatsugatake, and the Akaishi Mountains, and it boasts to the world many regional resources and industries. With the opening of the whole of the Chubu-Odan Expressway between Yamanashi and Shizuoka, as well as thescheduled opening of the Linear Chuo Shinkansen and other forms oftransportation, the area expects to see remarkable development in the
future, with an increasing inflow of people from outside the prefecture.
As a leading regional bank, Yamanashi Chuo Bank realizes well-being in a society that is rich and full of energy and happiness. By making
use of its many human and organizational connections it has built overmany years, including a sales base in the Tokyo area, the Bank will createa prosperous future from Yamanashi to the world.

Towards Realizing Value Creation

Scan the QR code to access avideo about the Bank’s Purpose.

Value provided to each stakeholder
Regional communities

Employees

Contribute to the realization of sustainableregional communities that overcome the declining birthrate, aging population, and decrease in population

Encourage and embed a spirit of challenge andincrease motivation and job satisfaction bypromoting Diversity, Equity, and Inclusion(DE&I) and promoting work styles based ondiverse values

Individual customers

Corporate customers

Contribute to enriched lifestyles and improved
well-being by providing financial and non-financial services tailored to our customers’
diversifying lifestyles

Contribute to the resolution of issues and thesustainable growth of corporate customers
through the provision of comprehensive financial services through consulting and the expansion of the Group’s functions

Shareholders and investors

Future generations

Meet the expectations of shareholders andinvestors through the Group’s growth andincrease in corporate value, while striving fortimely and appropriate information disclosure
and proactive dialogue

Proactively work on climate change measures,
including decarbonization, in order to preservea safe and secure environment for future generations

A “well-being society” that is prosperous
and full of vitality and happiness9

Towards Realizing Value Creation

Value Creation Processes
Input

Materialities
identified

Management strategy

Capital that supports strengths

Maintaining a richnaturalenvironment andpassing it on to the
futureStrengthening
diversecooperation andincreasing thevitality of theregional economy

Society-related
capitalTRANS 2025
—Transformation and challenge based on three drivers and three strategies—

 Industrial base madepossible by the richnatural environment

Employment

Three Transformation Drivers

DX

SX

Alliance

DigitalSustainability

Intellectual
capitalCreating anorganization that
supports thegrowth andsuccess of diverse
human resources

 Insights and know-how
of human resources witha wealth of experiencethrough working on
assignments in otherorganizations

Financial
capital Stable financial baseand risk-taking
capacity Rich naturalenvironment of
Yamanashi Prefecture

Subsidies Achieving sustainable regional communities that
overcome the declining birth rate, ageing
population, and population decline

Capital increase
Marriage

Insurance

Child-rearing
Automobiles
New building

Asset management andpreparing for old age

Renovation

Nursing care

Medical care

FY2024 (final year of Medium-Term Management Plan)
KGI

Individual customers
 Providing services tailored to customers’ lifestyles
to support enriched lifestyles and improve theirhappiness

Corporate customers
 Providing comprehensive financial services tosolve problems and contribute to sustainablegrowthKPIStrategy to increasebusiness capacity
Deepening and expanding
the core businesses
Exploring new businesses
Further refining the core businesses andtaking on new business challenges

 OHR (Operating expenses/Core gross business profit): 73.5% or less
 ROE: 3% or more
 Ratio of women in manager/supervisor positions: 15% or more
 Ratio of clerical staff reallocated through reskilling: 30% or more
 Cumulative amount of sustainable finance investments andloans: 250 billion yen or more
 Ratio of reduction in greenhouse gas emissions (CO2): 70% or more

Ideal state
KGI (FY2027)
 Net profit attributable to shareholders of the parent company: 10
billion yen or more

Strategy to double

Strategy of pursuing

productivity

sustainability

Challenging of achieving zeroclerical work
Next generation channel
reforms

Realizing human capitalmanagement
Strengthening governanceDramatic productivity
improvements through zeroclerical work and channel reforms

Realizing sustainable
management and coexistencewith regional communities

Purpose: Open Up a Bright Future from Yamanashi

THE YAMANASHI CHUO BANK 2023

Regional communities Net profit attributable to shareholders of the parent company: 6billion yen or more History and tradition fromthe Dai-Ju National Bank

NaturalcapitalStrengthening
corporate
governance andcomplianceThree Strategies

Value Creation Bank

BCP

Traveling and shoppingAX2027 Vision

Trade

Business succession, M&A

 Diverse humanresources possessing
high levels of expertise

Creating sharedvalue throughhigh-quality UI/UX

10Capitalinvestment
Sales channel
expansion
DX promotion

 Productive Tokyo
market baseHumancapitalRealizing digitaltransformation(DX) and thedigitization ofregional
communities

Medium-Term Management Plan

3

Values created for stakeholders

Responding to diverse needs
Comprehensive financial services
Overseas
expansion Dominant market
share in Yamanashi
Prefecture

Outcome

OutputKPI OHR (Operating expenses/Core gross business profit): 60% level(FY2027)
 ROE: 5% or more (FY2027)
 Ratio of women in manager/supervisor positions: 40% or more
 Ratio of clerical staff reallocated through reskilling: 70% or more
 Cumulative amount of sustainable finance investments andloans: 800 billion yen or more
 Ratio of reduction in greenhouse gas emissions (CO2): carbon
neutrality

The future the Bank
wants to realize

Employees
 Improving motivation and job satisfaction
 Fostering and establishing a spirit of taking onchallenges

Shareholders and investors
 Enhancing corporate value through the growth of
the Group

Future generations
 Preserving a safe and secure environment for
future generations

A “well-being society” that is prosperous
and full of vitality and happiness11

Towards Realizing Value Creation

Materialities (Key Issues)

Towards Improving Corporate Value

The Bank is working to further develop its sustainability management in order to achieve sustainable communities both globally and regionally and a continuous increase in corporate value. As part of this process, the Bank
has identified the materialities (key issues) to be addressed.

We have positioned the “growth strategy,” “capital strategy,” and “sustainability strategy” as the main drivers towards realizing sustainable growth and increasing corporate value over the medium- to long-term, and implementing management that is conscious of the cost of capital and share price.

Based on the results of the internal discussions, amateriality map was formulated by weighting theseverity of materiality in terms of impact on
stakeholders and the impact on the Bank’sbusiness. Groupings were determined according
to the relevance of the issues and, after a review
by the Board of Directors, were identified asmaterial to the Bank.

• Climate change and global
warming• Declining birthrate, aging
population, and decreasein population• Sustainable growth ofregional companies• Regional innovation• Digital transformation (DX)• Compliance and corporate
ethics• Risk management• Stakeholder engagement• Maintenance anddevelopment of lifestyleinfrastructure• Regional resources andenvironment• Access to finance• Quality of products andservices• Educating children andyoung people• Diversity, Equity, andInclusion• Changing behavior
patterns and customer
needs• Job satisfaction andworkstyle reforms• Mental safety• Governance and internal
control• Human resource
development• Agile organization• Portfolio management

Materiality for the Bank’s business (economic value)High

Overview

E

Maintaining a rich naturalenvironment and passing it
on to the future

Promote the Bank’s efforts to reduce CO₂ emissions inorder to decarbonize and support local communities’
efforts to become more environmentally conscious
through the provision of environmental products, services,
and information.

• Reducing CO₂ for decarbonization• Realizing next-generation clean*1energyStrengthening diverse
cooperation and increasing
the vitality of the regional
economyContribute to the sustainable prosperity of regional
communities and regional economic development by
supporting the revitalization of regional communities andindustries through business activities and by disseminating the attractive resources of Yamanashi, while strengthening cooperation with other banks, industry, academia
and government.

• Declining birthrate, aging population,and decrease in population• Sustainable growth of regional
companies• Regional innovation

Realizing digital transformation (DX) and the digitization of regional communities

Driving the digitalization of the entire regional community
by transforming the Bank itself through the use of digitaltechnology and transferring this know-how to regional
businesses.

• Internal DX*2
• Digitization of entire regional commu*2
nitiesCreating shared value*3through high quality UI/UX

By providing quality services that are rooted in thecommunity and meet customer needs, we will createcustomer value and build new services and businessmodels that will lead to the creation of economic value for
the Bank.

• Changing behavior patterns andcustomer needs• Access to finance• Quality of products and services

Creating an organizationthat supports the growthand success of diverse
human resources

Promote a rewarding corporate culture by developing
highly professional employees and create a workplaceenvironment in which diverse human resources canrecognize each other and play an active role.

• Human resource development• Diversity, Equity, and Inclusion• Job satisfaction and workstyle reforms• Mental safety

Strengthening corporate
governance and complianceTo ensure sound and transparent management and gain
the trust of all stakeholders, we are committed to building
an organizational structure, improving information
disclosure and engaging in dialogues with stakeholders.

• Governance and internal control• Compliance and corporate ethics• Risk management

S

G

Related issues*1 These items are the breakdown of “climate change/global warming” in the materiality map from the perspective of the Bank and the region.
*2 These items are the breakdown of “digital transformation (DX)” in the materiality map from the perspective of the Bank and the region.
*3 UI: Abbreviation of User Interface. The contact point between customers and the Bank.
UX: Abbreviation of User Experience. New experiences and satisfaction that customers obtain from using the Bank’s products and services.

12

THE YAMANASHI CHUO BANK 2023

Related SDGs
*1

zExploring new businesses• Establishing diverse business operation methods• Finding new sources of income by supporting solutions to regional
issueszStrategic investment• DX investments (digital foundation reforms, next-generation
channel reforms)• Investments to improve productivity

zGroup company strategies
zEffective use of capital• Focusing on a balance between soundness, profitability, andshareholder returns

zShareholder returns• Targeting a payout ratio of approximately 30% of net profit
attributable to the parent company• Taking a flexible approach to the acquisition of own shareszReduction of strategic shareholdings• Formulation of a policy to reduce strategic shareholdings• Reduction of approximately 10 billion yen on a fair value basis overthe period of the Medium-Term PlanzStrengthening dialogue with shareholders and institutional investors• Appropriate information disclosure based on constructive dialogue

zEnvironment-conscious management initiatives

Sustainable strategy

Materiality theme

Executive Members

ESG• Strengthening risk-taking, particularly for loans, and increasing
ancillary corporate-related fees
• Restructuring of securities portfolios• Strengthening Group management capabilities

Capital strategy

Six materiality issues

Board of Directors

Extracting andidentifying theBank’smaterialities

Holding internal discussions with top management,
executives and employees involved in CSR andmanagement strategy formulation, as well as withexternal experts. Discussing the effects of eachissue on the Bank’s business and the effects, impact,
and materiality of the Bank’s activities on each issue,
and narrowing down the list to 21 issues.

Materiality map formulated
High

Management practices that take into account the cost of capital and stock priceDiscussing theeffects on society
and business

After organizing the main megatrends, the Bank
identified potential issues (social challenges) tobe addressed by it, with reference to various
guidelines, such as the SASB, and with input
from executives and employees.

Materiality for stakeholders (social value)

Understanding
the issues andidentifying
potential
candidates

zDeepening and expanding the core businesses

Growth strategy(strengthening profitability)

The Bank has identified materialities through the process outlined below.

Realizing sustainable growth and increasing corporate value over the medium- and long-term

Materiality identification processes• Establishing a structure to address climate-related challenges

zResponse to TCFD recommendations• Strengthening efforts to address climate-related issues

zReducing CO₂ emissions• Efforts to reduce CO₂ emissions

zHuman capital management initiatives• Increasing investment in human capital• Human resources development policy and internal environment
improvement policy

13

Towards Realizing Value Creation

Growth Strategy (Medium- to Long-Term Targets) (1)Growth Strategy (Medium- to Long-Term Targets) (2)zAchieve “ROE of 3% or more” as soon as possible during the period of the Medium-Term
Management Plan “TRANS³ 2025.”
zAiming to reduce the deviation from the assumed cost of capital of 7%, the quantitative
targets of “consolidated net income of 10 billion yen or more” and “ROE of 5% or more” thathave been set as the ideal state are to be achieved by FY2027.
zBalanced allocation of capital for investment in growth, shareholder returns, etc., while
maintaining a consolidated regulatory capital ratio of around 10%.

zThere is a high correlation between the Bank’s ROE and PBR.
zTo improve PBR, we are working to reduce the cost of capital and improve ROE.

Last 20 years

PBR

y = 14.912x - 0.0413
R² = 0.4123

1.00

0.80

Long-term vision: Value Creation Bank
Medium-Term
Management
Plan[STEP up 2019]
From FY16 to
FY18

Fiscal year

FY2018+[Value 2022]
From FY19 toFY21

Ideal state
From FY25 to
FY27[TRANS³ 2025]
From FY22 to FY24

FY2021 results

FY2022 results

By FY2024

By FY2027

Consolidated
dividend
payout ratio
Consolidated
regulatory
capital ratio¥4.9 bn

23.7%¥4.2 bn

30.1%¥5.0 bn27.8%¥6.0 bn or
more

11.71%

10.72%

2005
2007
2009

2004

0.60

2010 2011

2014

2015

0.40

2018

2013 2017
2022

0.20

2021
2020
1.00%

2019

2012
2016

2023

2.00%

3.00%

4.00%

5.00%

6.00%

ROE

¥10.0 bn or
more

Consolidated dividend payout
ratio: approx. 30%.
Take a flexible approach to theacquisition of own shares.

Last 10 years

PBR
0.45

Approx. 10%[Correlation coefficient 0.850]
2013

0.40

2018

0.35

13.80%

2006

2008

0.00
0.00%

Consolidated
net income[Correlation coefficient 0.642]

1.20

2015

2017

2014
2012

0.30

2016
0.25

2019

EPS

¥147.15¥132.73¥161.78¥200 or more

¥330 or more

0.20

2022

0.15

2021

0.10

ROE

PBR

Cost of capital

14

THE YAMANASHI CHUO BANK 2023

2.25%

1.98%

0.2 times

0.14 times

-

-

2.53%

0.18 times

3% or more
0.3 times or
more

5% or more
0.5 times or
moreAssumed to be 7%(calculated based on CAPM, using Rp of 6.5%)

2023

y = 9.0488x + 0.0068

2020

R² = 0.7229

0.05
0.00
0.00%

0.5%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

ROE

Efforts to improve ROE and reduce cost of capital
Growth strategy(strengthening profitability)

Capital strategy

Sustainable strategyz Deepening and expanding the corebusinesses
z Exploring new businesses
z Strategic investmentz Group company strategies

z Reduction of strategic shareholdingsz Strengthening shareholder returns• Increase in dividend payout ratio• Flexible and agile acquisition ofown sharesz Strengthening dialogue with shareholders and institutional investorsz Environment-conscious management initiativesz Human capital management
initiatives
z Extensive disclosure, including of
non-financial information15

Towards Realizing Value Creation

Growth Strategy (Roadmap)

Growth Strategy (Deepening and Expanding Core Businesses):
Loan Strengthening (1)Roadmap towards achieving consolidated net income of 10 billion yen

Improvement of the top line through loan growth is the Bank’s growth driverTowards the achievement of theMedium-Term Management Plan

Image of increasing income towards
the ideal statez Increase in loan income, mainly from corporate
customersz Strengthening market investment capabilities
through portfolio restructuringz Investments in growth areas to increase income

z Strengthening personal loan strategies alongsidebusinessz Expanding non-interest income from consulting
servicesz Advanced securities portfolio managementz Strengthening of Group functions, expansion ofbusinesses and leveraging of under-utilized realestatez Accelerating strategic investment

Target average loan balance for FY2024: +400 billion yen or more compared to FY2021
z Aim to increase the level of the average loan balance by at least +400 billion yen or moreduring the current Medium-Term Management Plan periodz As a result of the increase in risk-weighted assets, the regulatory capital ratio will decrease byaround 1.7 pt (approximate estimate based on recent RW results)
z Expected increase in interest income on loans of approx. more than +3.0 billion yen andincrease in associated consulting fees (service income)z Achieved positive customer service business profit in FY2022(billion yen)

Average loan balance+400 billion yen or more

Average loan balance

2,500

5% or more

2,130.0
1,883.1

2,000

: ROE
: Consolidated net income(billion yen)

Marketsector

2.53%
1.98%

Customer
sector

+1.2

3% or more

(1.2)

4.2

New sourcesof income

FY18

FY19

1,500

1,000

500

0

(1.3)
Wage increases and investment in
human resources development
Construction of an integrated customer
analysis platform
Construction of a digitalcommunication network¥6.0 bnor moreIncrease in core income
by 6.0 billion yen¥10.0 bnor more

FY21

FY22

FY23

FY24

FY23

FY24

15

11.4
8.4

Compared to FY24: + ¥4.0 bn
FY24
Plan

FY20

(billion yen)

10

Compared to FY22: + ¥1.0 bn
FY22Results

1,630.4

Credit costs,
etc.

Business loans: +2.1
Fees and commissions income: +0. 2

FY21
Results

Strategic
investment

1,706.5

Customer
sectorExpenses

+2.3

5.0

MarketsectorNew
business
Affiliated Others
companies

1,925.3

FY27
Ideal state

9.0

5.9
5

4.0

1.1
0

FY18

FY19

FY20

FY21
(1.9)

(3.9)

(5)

(6.9)

FY22

Achieving profitability

(5.5)

(10)

16

THE YAMANASHI CHUO BANK 2023

17

Towards Realizing Value Creation

Growth Strategy (Deepening and Expanding Core Businesses):
Loan Strengthening (2)By clarifying our regional strategy and demonstrating our true value as an advisory bank, we are working to establish a sustainable income structure.

Average balance of business loans in FY2024: +350 billion yen or more compared to FY2021

Yamanashi Policyz Increase and strengthen balances throughcommercial distribution sales and thedevelopment of wealth management businessz Increase and strengthen loans to large enterprises
whose risk weight is low based on profitability
assessment, such as RORAz Create capital needs through two-way businessmatching between Tokyo and Yamanashi andhelping customers expand into Yamanashi orform alliances with Yamanashi-based companies

Common Policyz Implement structured finance with appropriate
risk taking, mainly in the form of non-recourse
real estate loans through the Shizuoka-Yamanashi
Alliancez Utilize accumulated know-how to solve regional
issues (e.g. project finance and LBO loans) and to
capture income opportunities

Average balance of personal loans in FY2024: +50 billion yen or more compared to FY 2021
z In the case of housing loans, the balance has been increased by expanding the productfeatures of housing loans, strengthening sales to vendors at housing loan bases, forming
alliances with housing-related companies, and other measuresz Strategically strengthen unsecured loans, such as consumer finance, in order to strengthen
the overall profitability of personal loans⇒ Strengthen the digital channel and improve UI/UX by introducing a bank app, revise
products, and review promotions

Finding new sources of income by supporting solutions to regional issues andintroducing a variety of business management methods
STEP 1

STEP 2

STEP 3

Recognizing global and
Yamanashi’s issues

Recognizing theBank’s materialities

Selecting new businesses[Global]SDGs(Issues covering a range of sectors,
including human rights, theeconomy, society and the global
environment)[Materialities of the Bank][Yamanashi]
Improving disaster preparedness,
infectious disease control,transport networks, and medical
welfare.

Realizing digital transformation(DX) and the digitization of regional
communities.

Increased interacting and settled
population.
Securing workforce andresponding to the shift to DX.
Building sustainable towns andcities.

Maintaining a rich naturalenvironment and passing it on to
the future.
Strengthening diverse cooperationand increasing the vitality of theregional economy.

Creating shared value throughhigh-quality UI/UX.
Creating an organization that
supports the growth and success ofdiverse human resources.
Strengthening corporate
governance and compliance.

Maintaining and expanding local
industries.
Creation of new businesses.

Start-up companies

Companies
inside andoutsideYamanashi Pref.

Local
governments[New businesses (proposed)]
1. Migration and settlement
promotion business
2. Human resources-related
business
3. Tourism business4. Decarbonization-related
business
5. Vacant house-related business6. Investment business
7. PPP and PFI consulting
8. Support for searching for amarriage partner business
9. BPO (Business Process
Outsourcing) business10. Regional products sales
business
11. Agriculture[Foundation and infrastructure]
DX and ICT consulting
Advertising and promotion
business(e.g. social networking sites)
Metaverse, etc.

Achieving the long-term vision of “Creating new value”

Tokyo Policy

The Regional Revitalization Promotion Division, which was set up in June last year, is leading the search for new
sources of income and the study of projects to support the resolution of regional issues.

Higher priority

z Providing financial intermediary functions based on business feasibility studies, from“business foundation” through to “business succession” and “turnaround” (also provides
equity capital such as subordinated loans and equity)z Providing optimal advisory services to solve customer and community issues, not only infinancial intermediation, but also in non-financial areas such as recruitment and support for
ICT and DX implementation

Growth Strategy (Exploring New Businesses) (1)Student groups

Stakeholders inside and outside the Bank
Experts

Shizuoka-Yamanashi
Alliance

DX andInnovation
Promotion Office

Universities

Exploring new businesses
Specifically, as indicated in the business proposal in STEP 3 above, the selection of new businesses and the prioritization of initiatives based on the Bank’s materialities (key issues) were considered in the context of a broad
awareness of global and regional issues with a view to establishing new businesses that contribute to solving
regional issues.
Going forward, we will accelerate our efforts to commercialize solutions to these issues that we takeseriously.
We believe we can create a prosperous future for the region and secure a stable revenue base by adding
value through the new businesses.
18

THE YAMANASHI CHUO BANK 2023

19

Towards Realizing Value Creation

Growth Strategy (Exploring New Businesses) (2)Growth Strategy (Improving the Sophistication of Securities Investment)

Support for the promotion of administrative measures to solve regional issues

Reconstruction of the securities portfolios

Declining birthrate, aging population, and decrease in population

Addressing decarbonizationz Advanced portfolio management using benchmarks and restructuring of the securities portfolios based on
medium- and long-term fundamental analysis.
z The target in the current Medium-Term Management Plan is a total profit and loss of 12 billion yen per year
(three-year average).

Measures to tackle vacant houses

Securities-related gains/losses
Promoting migration and settlement

Promoting local industries

Fiscal stabilization

Local
government

6.02 (billion yen)
13.26
3.12

Decrease in number of employees

11.88
1.18

5.90
9.97
0.62

6.61
2.00

Interest on securities

DX promotion

Diversification of residents’ needs

Bond-related gains/losses

11.11

11.85

11.62

(0.15)(1.00)(2.01)

9.80

12.56

Stock-related gains/losses
Cost of foreign currency procurement

Cooperation(0.01)(0.96)(0.26)(4.82)(0.36)

Collaboration

20

Partnercompanies

Yamanashi Chugin Yamanashi Furusato Support
Project

Simultaneous slip-less and cashless payment
project in Yamanashi Prefecture

The Bank has developed the Yamanashi Chugin Yamanashi
Furusato Support Project, an administrative policy support
service for local governments, to help resolve various regional issues such as decarbonization, DX promotion, and regional industry promotion, and to support measures that contribute to regional revitalization, etc.
The project is designed both to support administrative measures and to increase the Bank’s income. 18 menus
are available to local authorities on a range of regional issues,
such as encouraging corporate versions of the Hometown
Tax Donation Program, promoting decarbonization and improving operational efficiency.
This will further strengthen relations with local authorities and build win-win relationships to contribute to sustainable regional development.

The Yamanashi Prefecture Simultaneous Slip-less and Cashless Payment Promotion Project is being implemented in cooperation with the Yamanashi Prefecture, all 27 municipalities in the prefecture, and all financial and businessinstitutions with headquarters or branches in the prefecture.
Against the
backdrop of the government’s policy toimprove the efficiency of administrativeand fiscal management and to promote
DX, the project will
not only improve taxpayers’ convenienceand achieve efficientcollection management, but also promote the spread anduse of slip-less andcashless payments toachieve the SDGs.

THE YAMANASHI CHUO BANK 2023

* The above stock-related gains/losses include
gains/losses on investments in limited
partnerships and gains/losses on money trusts.

(9.15)(3.28)
FY18

FY19

FY20

FY21

FY22

Advanced portfolio managementz Allocations are determined on the basis of benchmarks set over the medium- to long-term, using market
phase analysis and individual asset analysis.
z The cycle of steps 1 to 5 aims to advance portfolio management and to achieve stable overall profit/loss.

Step 1: Benchmark setting

Confirm an optimal medium- to long-term portfolio by eliminating
arbitrary data

Step 2: Market phase analysis

Complete areas not covered in step 1 using inflation, economic trends,
etc.

Step 3: Individual asset analysis

Formulate a bottom-up market outlook for each individual asset

Step 4: Reflect on the plan

Formulate an investment plan for the next six months with reference
to steps 1 to 3

Step 5: Periodic management

Measure performance against benchmarks on a monthly basis andanalyze factors
21

Towards Realizing Value Creation

Growth Strategy (Group Growth Strategy)

Capital Strategy (Effective Use of Capital) (1)As a comprehensive regional financial group, we are aiming to increase the Group’s income while allocating resources appropriately to provide the best possible service to our customers.

The Group will strive to continuously increase its corporate value by focusing on a balance between soundness,
profitability, and shareholder returns.

Strengthening the Group strategy

Approach to the effective use of capital(million yen)

Creditguarantee
business

Leasingbusiness(1) Balanced capital policy

Total profit of Group companies

Focus on a balance between soundness, profitability, and shareholder returns

1,200

1,000
1,000

Soundness (stable business foundation)

800
600

431

Investment
businessCardbusiness

400

529
Aim to achieve total profit of Group companies(difference between consolidated andnon-consolidated) of 1 billion yen by FY2027

200• Stable supply of funds to regional economies• Stability to respond flexibly to growthinvestment opportunities

0

FY21

FY22

FY23

Sustainable increase in corporate value

FY27

Medium-Term Management Plan target: ROE of 3% or more
Ideal state target: ROE of 5% or more

Yamanashi Chuo Guarantee

Yamanashi Chugin Leasez Increase and strengthen new housing loan
guarantees in cooperation with the Bankz Strengthen the management system fordelinquent receivables and indemnity claimsz Contribute to consolidated income by becoming
a wholly-owned subsidiary of the Bankz Strengthen efforts for large projects and sales tosuppliersz Establish an integrated loan and lease operation
systemz Increase penetration rate to loan customers
z Strengthen auto leases, ESG leases, etc.
<Plan to double outstanding lease balance>
Total receivables balanceApprox. 9.6 billion yen→ Over 18.0 billion yen
Yamanashi Chugin DC Card

Yamanashi Chugin Management Consultingz Promote cashless operations in coordination
with the Bankz Strengthen the development of affiliates and
JiMOCA partners
z Capture large-volume payment needs ofcorporate customers
z Strengthen promotions through non-face-toface channels

z Invest in promising venture companies
z Promote various funds in coordination with theBankz Develop human resources and acquire knowhow in coordination with external parties(recruitment firms, etc.)

Enhancement of shareholder returns• Strengthening shareholder returns throughimproving profitability• Flexibly acquiring own shares

Profitability• Deepening and expanding the core businesses
and growth investments in new businesses, etc.
• Ensuring profitability with risk/returnconsiderations(2) Effective use of capital
Effective use of capital

Carry out growth investments and provide shareholder returns while maintaining soundness (consolidated regulatory capital ratio of roughly 10%)z Take risks through structured finance, sustainable investment and lending, personal loans, provisionof equity capital to regional companies, etc., in addition to business loansz Invest in new businesses towards the resolution of regional issues
z Invest in DX and human capitalz Enhance and strengthen shareholder returns through improving profitability<Ratio of cashless payments in Yamanashi Prefecture>
24.4% → To be raised to 40%(2019)

22(By 2030)

THE YAMANASHI CHUO BANK 2023

23

Towards Realizing Value Creation

Capital Strategy (Effective Use of Capital) (2)Capital Strategy (Shareholder Return) (1)In the Medium-Term Management Plan (covering the period to FY2024), the Bank aims to achieve an ROE of atleast 3% by building assets, mainly business loans, while maintaining a consolidated regulatory capital ratio ofaround 10%.

Capital allocation

Review of shareholder return policyz Increase risk-weighted assets mainly through business loansz Strategic investments focus on the fields that support our growth strategy
z The guideline for shareholder return has been changed to a payout ratio of 30%
z The acquisition of own shares is carried out in a flexible and agile manner

Example of increases in risk-weighted assets

Changes

Description

Base profit for shareholder
returnChange from “Net profit (non-consolidated)” to “Net profit attributable tothe parent company”

Return ratio, etc.

Change from “Shareholder return of 20-30%” to “Aim for a dividend payout
ratio of around 30% and a flexible and agile approach to acquisitions ofown shares”

Expected to increase by 150 billion yen over the next two years
mainly through business loans

Businessloans

Personalloans

Structured
finance

Previous shareholder return policy
In view of the public nature of the banking industry, the basic policy is to maintain stable dividends
while striving to build up adequate retained earnings to maintain sound management. Specifically,
the basic policy is to pay a stable dividend of 35 yen per share per year, with a target rate of
return to shareholders of 20% to 30% per year, including dividends and acquisitions of own
shares.

FY21 Results FY22 Results

FY24 Plan

Example of capital allocation

Revised shareholder return policy

Increase inrisk-weighted
Cumulative
assets(+ ¥173.1 bn)
Consolidated profit
ROE
1.98%

Increase inrisk-weighted
Cumulative
assetsprofit(+ ¥150 bn)

Acquisition ofown shares
Dividends and strategic Consolidated
investments,
ROE
etc.
3% or more

30% of cumulative profit

10.72%

FY21 Results

24

THE YAMANASHI CHUO BANK 2023

FY22 Results

Strategic investment• Construction of an integrated
customer analysis platform• Construction of a digitalcommunication network• Construction of a next-generation
financial application platform, etc.

Consolidated
regulatory capitalratio• Of which, for businesses: ¥185.4 bn(for real estate acquisition and otherprojects: ¥69.3 bn)• Of which, for investment trusts, etc.:(¥26.0 bn)

Consolidated
regulatory capital
ratio

Consolidated regulatory
capital ratio
11.71%

Acquisition ofown sharesand strategic
Dividends investments, Consolidated
ROE
etc.
2.53%

In view of the public nature of the banking industry, the basic policy is to continue to pay stabledividends, while striving to build up adequate retained earnings to maintain sound management.
Specifically, a payout ratio of 30% of net profit attributable to shareholders of the parent company is targeted, while acquisitions of own shares will be implemented in a flexible and agile
manner.

Approx. 10%

FY24 Plan

25

Towards Realizing Value Creation

Capital Strategy (Shareholder Return) (2)Capital Strategy (Reduction of Strategic Shareholdings) (1)

Revision of shareholder return policy

Policy on strategic shareholdingsz In line with the revised shareholder return policy, the annual dividend for FY2022 will be increased by 5
yen from the initial forecast to 45 yen per year.
z We plan to increase dividend by 5 yen to 50 yen also for FY2023 to achieve dividend increases for threeconsecutive fiscal years.

z In line with the objectives of the Corporate Governance Code, the policy on strategic shareholdings has
been formulated and strategic shareholdings have been gradually reduced, with the importance of eachindividual holding being regularly reviewed.
z To further accelerate efforts to reduce strategic shareholdings, a target has been set for the reduction ofstrategic shareholdings.

(unit: billion yen)

Shareholder return ratio
Acquisitions of own shares

Change to a
consolidated basis

65%

Dividend amount

47%
41%

37%

42%

38%

Take a flexible
approach toacquisitions ofown shares

33%
1.23
0.48

0.52

1.17

1.16

1.11

1.11

1.27

1.40

1.55

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23
Plan

¥45

¥35

¥35

¥35

¥35

¥40

¥45

¥50

Current nonconsolidated ¥6.7 bn
net income¥4.4 bn¥4.4 bn¥3.4 bn¥2.6 bn¥3.8 bn¥4.5 bn¥5.0 bn

Current
consolidated ¥7.2 bn
net income¥4.9 bn¥4.9 bn¥3.7 bn¥3.0 bn¥4.2 bn¥5.0 bn¥5.3 bn

Consolidated
dividend
20.9%
payout ratio

23.8%

23.7%

30.0%

36.1%

30.1%

27.8%

29.3%

EPS

¥214.75¥146.48¥147.15¥116.43¥96.92¥132.73¥161.78-

BPS¥6,388.65¥6,430.17¥6,652.04¥6,183.83¥6,849.57¥6,515.85¥6,129.98-

1.52

Dividend
per sharez Reduce listed strategic shareholdings by approximately 10 billion yen* on a fair value basis by FY2024* Compared to FY2021, excluding changes in fair valuez Achieve a ratio of strategic shareholdings (at fair value) to consolidated net assets of no more than
10% over the long term

Any capital generated from the sale will be invested in a well-balanced manner
for the purpose of enhancing corporate value
z Funds generated from the sale of strategic shareholdings will be used for investment in growth, shareholder
returns, etc., with an awareness of capital efficiency, with a view to increasing corporate value over the
medium- to long-term.

0.99

1.12

Reduction targetz We aim to maintain dividends
at roughly 30% of net profit
attributable to the parent
companyz We will be flexible and agile inacquisitions of our own shares

Shareholder
returns

Strategic investmentz Invest in new businesses to help
resolve regional issues
z Invest in human capital• Human resource development, such as
improving skills and reskilling• Strategic recruitment, improving employment
terms and conditions, etc.

z Invest in digital transformation (DX)
• Construction of an integrated customer
analysis platform• Construction of a digital communication
network

26

THE YAMANASHI CHUO BANK 2023

Deepeningand expanding
the corebusinessesz Increase riskweighted assets
mainly throughloans
z Enhance return on
investment insecurities
z Growing Group
income27

Towards Realizing Value Creation

Capital Strategy (Reduction of Strategic Shareholdings) (2)Capital Strategy (Enhancement of Dialogues with Shareholders andInstitutional Investors)

Progressive reduction of strategic shareholdings based on quantitative andqualitative assessments (% of net assets)

Dialogues with various stakeholdersz Reductions are made after holding sufficient dialogues with counterparties, etc., from the point of view ofcapital efficiency and limiting the risk of shareholding.
z During FY2022, the balance of strategic shareholdings was reduced by 2.5 billion yen on a fair value
basis.
(1) Reduced amount(2) Factors affectingchanges in fair value(3) Net reduction invalue ((1) – (2))¥2.99 bn

¥0.48 bn

¥2.51 bn

The Bank recognizes that it is more important than ever to build long-term, stable and trusting relationships with its shareholders. As part of such efforts, in the second half of FY2022 we started thefollowing initiatives to strengthen engagement with institutional investors and major shareholders.

zInterviews with major institutional investors
zInterviews with business corporations and individuals holding morethan a certain number of shares
Issues identified through the dialogues will be reflected in future actions as they are sharedwith the management team and will lead to medium- and long-term improvements in corporate
value.

z Ratio of listed strategic shareholdings (book value) as of March 31, 2023: 8.2% (% of net assets).

<Changes in strategic holdings of listed shares>
Carrying amount (billion yen)

Fair value (billion yen)

Fair value (including deemedshareholdings) (billion yen)
Consolidated equity ratio(based on carrying amount)

Number of issues (stocks)

26.1%
21.6%

23.6%

25.2%

Status of dialogues in FY2022 (in second half)

Consolidated equity ratio(based on fair value including deemed holdings)

24.8%

12 investors

By location

10 investors in Japan and 2 overseas
investors

Business
corporations

35 corporations

Attendees fromthe investors

Persons in charge of exercising voting
rights, ESG, and stewardship

Individuals

29 persons

Attendees fromthe Bank

Managing Directors, Executive Officers,
etc.

Institutional investors
Investors holding
more than a certain
number of shares

24.5%

23.9%

Main discussions during dialogues

21.7%

19.9%

Dissemination of information by outside directors

Improving ROE
Capital policy

Governance
10.7%

10.3%

10.9%

10.1%

9.4%

9.1%

7.9%

8.1%

8.2%

CapitalpolicyComposition of skill items

Specifying a growth strategy

Promotion of women (succession including promotion to
managerial and supervisory/officer positions)

Advancing TCFD disclosures
Sustainability

Reduction of strategic shareholdings
Shareholder returns

CO2 emission reduction target
Human capital disclosure

62.0
58.1

51.3

50.9
48.2

48.3

55.1

54.7
51.4

Aiming for a reduction of
approximately ¥10 billion ona fair value basis

53.0

52.0

50.1
39.8

47.3

45.9
43.7

43.2

37.6
25.3

74

FY14

28

24.2

23.1

22.0

21.0

18.1

Below
10% ofnet assets inthe long term

17.5

17.1

15.9

71

69

68

66

62

60

54

51

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

THE YAMANASHI CHUO BANK 2023

Dialogues withshareholders

Realization of
measures

Sharing issue
awareness withmanagement

....

FY23

FY24

Long-term target

Progressmanagement by ameeting organization

Opinions received throughdialogues are fed backappropriately andprioritized for actions toenhance shareholder value.

Reflecting
improvements
in measures

29

Towards Realizing Value Creation

Sustainable Strategy (Internal Structure)
In June 2022, the Bank established a Sustainability Committee, chaired by the President, to discuss and review
actions to be taken in relation to sustainability across all Head Office divisions, in order to stimulate discussion
within the Bank and to make progress with these actions.

Establish a structure to address climate-related challenges
Established the Sustainability Committee (June 2022)

Composition

Roles of theCommittee
Meeting
status andmajor agenda

Chairperson

President

Members

Senior Managing Directors, Managing Directors, and General Managers ofCorporate Planning Division, Human Resources Division, General Affairs
Division, Sales Management Division, Consultation Sales Division, andRegional Revitalization Promotion Division

Observers

Standing Corporate Auditors

Ensure the alignment of climate-related and other risks with management strategy, management issues, etc.
Meetings are held on a monthly basis
Through establishing a sustainability policy and discussing and examining initiatives torealize human capital management

The Yamanashi Chuo Bank Group Sustainability Policy (December 2022)

Relationship with various policies

enhance its social value and economic value from a
medium- to long-term perspective.
Through these efforts, we will build and improve relationships of trust with all stakeholders andwork with them to realize a sustainable regional society.

Management Philosophy
Sustainability Policy

SDGs Declaration
Environmental
PolicySocialContribution
Policy30

THE YAMANASHI CHUO BANK 2023

Based on our mission of “keeping close ties with the regional community and ensuring sound management,” we, as aregional financial institution, have supported the development of local companies and industries, energized communities, and supported the creation of affluent lifestyles for people living in the region while striving to realize a sustainable society, in order to contribute to the achievement of the SDGs (Sustainable Development Goals) advocated by
the United Nations.
Key measures
 Promoting the reduction of environmental impact  Developing sustainable local economies
 Utilizing a diverse workforce

The Yamanashi Chuo Bank Group’s Social Contribution Policy

Discuss and deliberate on measures and policies for initiatives towards the realization ofsustainability management

Under the management philosophy of “regional-based operations and sound management,” theYamanashi Chuo Bank Group will provide comprehensive financial services to people in the region
while working diligently to resolve various issues
surrounding regional society, such as the declining
population and climate change, thereby aiming to

The Yamanashi Chuo Bank Group’s SDGs Declaration

Investment
andLending
PolicyThe Yamanashi Chuo Bank Group will actively engage in local social contribution activities such as financial education
support and the promotion of culture, the arts, sports, and welfare, in accordance with the sustainability policy, torealize the creation of a prosperous regional society.

Yamanashi Chuo Bank Group Investment and Loan Policy
The Yamanashi Chuo Bank Group will further accelerate investments and loans that contribute to solving environmental and social challenges faced by customers and communities, in order to realize sustainable regional communities inline with its sustainability policy.
Appropriate decisions are made on investments and loans, taking into account not only financial information
but also the effects on ESG (environmental, social, and governance).
1. Actively support the following and other projects that address environmental and social challenges(1) Projects that contribute to renewable energy, such as reducing carbon emissions to achieve a decarbonizedsociety(2) Projects that contribute to the conservation of biodiversity, including the protection of water resources, forest
resources, and endangered species(3) Projects that contribute to disaster prevention and mitigation(4) Projects that contribute to the development of agriculture, forestry, tourism, and other key industries in the region(5) Projects that contribute to the conservation of World Heritage sites and other cultural assets(6) Other projects that contribute to the development of sustainable regional communities
2. No investments or loans will be made in the following businesses or other activities that have a negative impact on
the environment and society(1) New coal-fired power plant projects
However, only projects that are implemented in accordance with the energy policy of the country in which the
project is located and international guidelines that take into account the environmental impact will be carefully
considered, taking into account the characteristics of each individual project in a comprehensive manner.
(2) Projects involved in the production of inhumane weapons
Projects involved in the development and production of inhumane weapons, such as cluster munitions, anddestinations subject to restrictions and sanctions.
(3) Development of palm oil plantations, projects related to deforestation, etc.
Projects that are likely to involve illegal logging, child labor, etc. from the perspective of conservation of forest
resources, etc. and the protection of human rights.

Yamanashi Chuo Bank Group Environmental Policy
Based on the Sustainability Policy, the Yamanashi Chuo Bank Group, as a financial group based in Yamanashi Prefecture where around 80% of the prefecture’s land area is covered with forests and is blessed with water resources, recognizes that passing on the rich natural environment to future generations is an important social responsibility. Based on
this recognition, we will actively work to resolve environmental issues, including climate change issues, and biodiversity conservation, and we will contribute to the realization of sustainable regional societies.
1. Compliance with laws and regulations 2. Protecting the environment through business activities
3. Reducing environmental impact 4. Responding to climate change 5. Biodiversity conservation measures
6. Management systems 7. Public disclosure of environmental policies

31

Towards Realizing Value Creation

Sustainable Strategy (CO2 Emission Reduction) (1)Sustainable Strategy (CO2 Emission Reduction) (2)The company is aiming to achieve its targets by promoting the conversion of its sales fleet to electric vehicles,
switching to a renewable electricity menu, building environmentally-friendly branches, and using PPAs andoffset credits.

CO2 emissions are decreasing steadily as a result of our active efforts to reduce themCO2 emission reduction roadmap
Fiscal yearz Upward revision of CO2 emission reduction targets• Greenhouse gas (CO₂) emission reduction targets have been increased, as shown in the table below.
In conjunction with the revision, we have also revised the targets in the Medium-Term Management Plan.
• The scope of the calculations have also been changed to “the Bank’s greenhouse gas emissions (CO₂)(Scope 1 and Scope 2) as reported in the periodic report under the Energy Conservation Act plus emissions
from the use of petrol.”
Revised targets

Medium-term target(FY2024)

46% decrease compared with
FY2013At least a 70% decrease
compared with FY2013

Long-term target (FY2030)

60% decrease compared with
FY2013

Carbon neutrality

PeriodFrom FY2022 to FY2030

No revision

TargetScope 1 and Scope 2(excluding gasoline)

Scope 1 and Scope 2(including gasoline)

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

[November 2021]• Set CO2 emission reduction target(Medium-term target: 46% reduction by FY2024 compared to FY2013)(Long-term target: 60% reduction by FY2030 compared to FY2013)
Raising the targets

Target⇒Previous targets

2020[April 2023]• Raised CO2 emissions reduction target(Medium-term target: at least a 70% reduction by FY2024 compared to FY2013)(Long-term target: Achieve carbon neutrality by FY2030)

Scope 1

Gasoline

Items

2013

Changes in the Bank’s CO2 emissions

Replace gasoline-powered company vehicles withelectric or other eco-friendly vehicles

Switch to electric air
conditioning equipment

Completed

8,000

Switch lighting equipment to LEDs
7,000

5,000

Scope 2Compared to
FY2013(30.08%)

Electricity

Compared to
FY2013(25.87%)

6,000

Compared to
FY2013(52.66%)

4,000

Switch to renewable energy-based electricity services

Reduce energy consumption (paperless operations, thorough power saving, etc.)
Switch to environmentally-conscious branches(ZEB branches)

3,000

Use PPA (on-site and off-site)

2,000
1,000

32

FY2013

FY2020

FY2021

FY2022

Total

6,493

4,813

4,540

3,074

Scope 2

5,659

4,080

3,858

2,367

Scope 1

834

733

682

707

THE YAMANASHI CHUO BANK 2023

OthersOffset0

Purchase of J-VER prefectural forests

Various efforts through participating in the GX League

33

Towards Realizing Value Creation

Sustainable Strategy (Human Capital Management Initiatives)

Sustainable Strategy (Human Resource Portfolio)

The Bank is committed to integrating its management and human resources strategies and developing the necessary systems to implement human capital management. We will clarify our human resources development
policy and internal environment improvement policy by incorporating the three transformation driver elements
for strategy implementation, and we will consider and implement individual measures.

Practice and disclosure of human capital management

Target human resource portfolio

Medium-Term Management Plan “TRANS³ 2025”

FY2022—Transform and challenge through three drivers and three strategies—

Three
Transformation
Drivers

AX

DX

SX

Strategy to increasebusiness capacity

Strategy 1

AX

DX

SX
Strategy to double
productivity

Strategy 2[Factors necessary for us to realize
human capital management]

Strategy of pursuingsustainability

Clarify human capital in line witheach strategy, based on the“Three transformation drivers”• Developing(self-realization)• Reskilling• Improving skills• Succession plan
• My Career coordination• Increasing engagement• Considering conducting
a survey• Welcome back recruiting(new graduates andmid-career hires)Childcare leave, etc.
4%

Solution humanresources
38%

Backup humanresources
46%

 DX promotion human resources
development system
 New business creation program Participating in the Yamanashi
DX Engine,etc.

• Formulating a humanresources portfolio

Strategy 3Childcare leave, etc.
4%

 Deploying employees and exchanging
human resources with the Shizuoka
Bank Group Collaborative arrangements of deals(loans/investments)
 Holding various joint events, etc.

 Purpose and value creation processes
 Supporting self-growth and careerdevelopment
 Adapting to more diverse work styles,
etc.

Target human resource portfolio

Backup humanresources
36%

Solution humanresources
27%

Consulting
human resources
16%

Consulting humanresources
7%

Market human resources2%

Digital and IT
human resources3%
New businesshuman resources
0%

Digital and IT
Market human
human resources
resources
9%3%
New business human resources
5%

Status of efforts for the creation of human resources and deployment of humancapital initiatives
Creation of human resources• Implementing
repositioning strategies
and measures

Deployment of human capital
Branches

Store policy
Zero clerical work policy• Promoting DE&I

* Decreases due to retirement, other employment terminations,and recruitment restrictions are taken into consideration.

Head Office planning divisions

229
employees

Head Office liaison divisions
Centralized Head Office divisions• Diversifying work styles• Enhancing leave programs• Revising human resources
systems• Improving employment
terms and conditions

103
employees

49

157
employees

18
6

29

134
employees
27
7
28

20

51
employees

Human resources strategy
Management
strategy

Integration

Human capitalmanagement

Vision and Purpose

34

THE YAMANASHI CHUO BANK 2023

Formulation and disclosure of a humanresources development policy
and an internal environment
improvement policy

180
128

34
employees

11

6
3

40

25

FY2022(Results)

FY2023(Plan)FY2024(Plan)FY2022(Results)

59

FY2023(Plan)

72

FY2024(Plan)

35

Message from an Outside Director

Medium-Term Management Plan “TRANS3 2025”
Toward Achieving the Medium-Term Management Plan

Outside Director

Riyo Kanoz Medium-Term Management Plan “TRANS3 2025” (structural diagram)Management philosophy
Long-term vision

Keeping Close Ties with Local Communities andEnsuring Sound Management
Value Creation Bank

Medium-Term Management Plan

TRANS3 2025

— Transformation and challenge based on three drivers andthree strategies —Three Transformation Drivers

My role as an outside director
Yamanashi Chuo Bank’s outside director system is composedof individuals with a diverse range of experience and insights,
and this system serves to monitor management from manydifferent perspectives. I recognize that I have several roles toplay within this framework. For example, from my perspective as a shareholder and consumer, I am expected to check
whether Yamanashi Chuo Bank’s various measures are contributing to its own medium- to long-term increase in value. I
also have a role of presenting my opinions based on my insights as a legal expert so that management can take risks toa suitable degree, and also so that discussions will be held tofulfil the directors’ duty of care. I am well aware of my solemn
responsibility associated with these roles.

The Board of Directors’ effectivenessSince I was appointed to my current position, top management has always shown a clear stance of respecting what
outside officers have to say in Board of Directors’ meetings.
The operations of the Board of Directors have been reformed
in many ways, particularly in the past few years. These reforms include narrowing down the number of matters to bereported, providing more materials, and taking a creative approach to reporting methods. Moreover, considerable time
has been taken for many instances of deliberation and reporting, such as for the Medium-Term Management Plan, thealliance with Shizuoka Bank, and other important mattersthat will contribute to increasing the Bank’s value in the medium- to long-term. I feelthat the effectiveness of
the Board of Directors is
improving as a system fordiscussing these important matters.
Opportunities forproviding information andexchanging opinions arealso being secured outside the Board of Directors as well, such as theregularly held meetings
for outside directors to

36

THE YAMANASHI CHUO BANK 2023

Alliance (AX) Digital (DX) Sustainability (SX)

exchange their views with corporate auditors and the Auditing Division.

The Group’s Purpose
The Purpose, of “Open Up a Bright Future from Yamanashi,”conveys a strong message, and the phrase “from Yamanashi”
encapsulates the unique qualities of the Bank.
The population of Yamanashi Prefecture is decreasingat an increasingly fast rate due to the declining birthrate andthe aging population across Japan as a whole. However, theprefecture has significant potential for utilizing its geographical qualities, in that it is adjacent to the Kanto region and it issurrounded by lush nature. The Purpose clarifies the Bank’s
desire to commit itself toward the development of Yamanashiwith an unwavering management policy of contributing to
the prosperity of the region and the development of its economy, and thereby contribute to a bright future not just for Yamanashi, but also for Japan and the whole world. The Bank’sloans are growing across the Tokyo area, and its alliance with
Shizuoka Bank is producing results. This geographic expansion of the Bank’s business is also expressed in the Purpose.

Strategy to double

Strategy of pursuing

Deepening andexpanding the core businesses

Challenge of achieving
zero clerical work

Realization of humancapital management

Exploring new businesses

Next-generation channel reform

High level of governanceRefinement of the core businesses
and taking on the challenge of
new business opportunities

Dramatic improvement inproductivity through zero clerical
work and channel reform

Realization of coexistence ofsustainable management andregional communities

business capacity

productivity

Purpose(significance of existence)

FY2022

KPI

sustainability

Open Up a Bright Futurefrom Yamanashiz Quantitative Goals

Evaluation of ESG initiatives and futurechallenges
The Bank has already carried out many initiatives for ESG,
such as decarbonization and other environmental efforts, aswell as social contributions through the promotion of culture,arts, and sports. However, its disclosure may have not been
sufficient in some areas in the past. In addition I believe that
there are some fields, such as ESG finance, in which the Bank
could make more active efforts and which would have a significant impact on society. In particular, I am sorry to say thatthe Bank’s ratio of female managers is low at present. However, the Bank is currently executing a wide range of measures
to address this, such as expanding the reduced-hours work
system and supporting female employees in shaping theircareers. Going forward, I hope that further progress will bemade in diversity equity and inclusion by increasing the ratioof male employees who take childcare leave and other efforts
to create workplaces in which everyone can carry out theirtasks comfortably.

Strategy to increase(Results)

FY2024(Final year of the Medium-Term
Management Plan)

Ideal state

OHR (Operating expenses/Core gross businessprofit)67.74%

73.5% or less

60% level

ROE (Current net income basis)

2.34%

3% or more

5% or more

Ratio of female managers and supervisors

14.81%

15% or more

40% or more

Rate of reskilling-based reallocations of clerical
workers

5.01%

30% or more

70% or more

118 billion yen

250 billion yen or more

800 billion yen or more

52.66%*2

70% or more*3

Carbon neutrality*3

5 billion yen

6 billion yen or more

10 billion yen or more

*1

Sustainable finance investment and loan
cumulative amount
Reduction rate of greenhouse gas (CO2) emissions

KGI
Profit attributable to shareholders of the parent
*1
*2
*3

Investments and loans that contribute to creating a sustainable regional society (environment, education, business startups, business succession, etc.)
We have added emissions from gasoline use to the Bank’s greenhouse gas (CO₂) emissions (Scope 1 and Scope 2) in the periodic reports under the Act on the
Rational Use of Energy since FY2022. The same revisions have been made for FY2021 and prior.
As part of our efforts to strengthen our initiatives to realize a decarbonized society, we have raised our greenhouse gas (CO₂) emissions reduction targets from“medium-term target (FY2024) of 46% decrease compared with FY2013 and long-term target (FY2030) of 60% decrease compared with FY2013,” to “medium-term target of at least 70% decrease compared with FY2013 by FY2024 and long-term target of carbon neutral by FY2030.”

37

Medium-Term Management Plan “TRANS3 2025”

Increase Business Capacity
At Yamanashi Chuo Bank, we are working to penetrate financial product transactions into local communities inorder to support enriched lifestyles and contribute to improved happiness by providing financial services thatmeet the diversified lifestyles of our customers.
In addition, when making proposals to customers, we provide consulting services (proposals for solutions toproblems) for a variety of issues that are specific to customers’ life plans, based on our basic policy of fiduciary duty.

We provide various types of consulting services to customers at various life stages by leveraging the knowledge
and network of the Group.
We have been engaging in activities that contribute to improving our customers’ corporate value by leveraging our consulting functions, while sharing the “thoughts” and “ideas” of business owners through holding
in-depth dialogues.

Supporting customers’ asset building

Consulting support to customers

Rate of financial instrument holders (number) (Yamanashi)

Consulting support

One-stop support for companies at every life stage

As of March 31, 2023: 11.5% (62,000 customers), +1.6 pt YoY (+8,000 customers)

One-stop support for companies at every life stagez Growth is outpacing the plan.
z The transaction base has expanded as a result of proposals for asset building that utilize investment trust
accumulation and the NISA system.
z In addition to insurance review proposals through face-to-face consultations, non-face-to-face solicitation
through DM and telemarketing was also successful.

Founding
period[Target]11.5%
As of March 31, 2022

(62,000 customers)

9.9%

50

Number of subscriptions toperiodic investment plans forinvestment trusts

Support for
creating apersonnel system

Support for
management
planning

Support for SDGs
initiatives

Support for
decarbonization
initiatives

Overseas
expansion support

BCP formulation
supportReal estateutilization support

Corporateinsurance

Support forbusiness
succession

M&A support

OthersMedical andnursing care

46

(Unit: thousand customers)

Manufacturing

Tourism

Jewelry

Agriculture
Wine

Fund procurement

Structured finance

Cooperation withother banks

Business matchingalliance

Crowd funding

Support for use of
public assistance

Support for
utilizing funds

Various individual
business meetings

Alliance district
cooperationz Solid results in corporate-related fees and commissions, mainly through structured finance and businessmatching services, due to the establishment of consulting operations and the alliance with Shizuoka Bankz Penetration of individual consulting operations in sales of financial instruments based on customers’ life
plans and total assets
15

20
151

10
FY2017FY2018FY2019FY2020

FY2021(Unit: thousand customers)

40

33

FY2022
corporate-related
services

FY2018FY2019FY2020

FY2021

FY202221(Unit: thousand customers)

20
10
FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2022
financial
instruments

Fee-based consulting(Unit: ¥ million)

151

FY2017

Business matching973

Mutual funds (sales)

550

Others
205

30

0

M&A

FY2022250

Life insurance

Structured finance

333

20

0

Business matching andexpansion of sales channels

Change in revenue from corporate-related fees and commissions and financial instruments

10

THE YAMANASHI CHUO BANK 2023

Support for ICT
introduction

12%

30

38

Personnel referral
service(70,000 customers)

30

40

Number of level-payment
policies

Support for
expanding sales
channels

Industry-specific support (industry trends, deal structuring)40

0

Number of NISA users

Period of stagnation
and revitalization

Business
establishment andsecond-stage
business support

As of March 31, 2025

Population of Yamanashi Prefecture: The population of people aged 20–75, from thenational population index by sex (population by age group in 5-year increments) for eachprefecture in the 2020 census. * 540,000 people as of October 1, 2020

(54,000 customers)

Stabilizing
periodManagement support menu

Percentage of people holding financial instruments(Number of people holding financial instruments)

As of March 31, 2023

Growthperiod485

1628

Mutual funds(administrative agent)
Securities brokerage
Others(Unit: ¥ million)“Green Loan” concluded for the “Yamanashi City Public Facilities LED Conversion Project”
We have concluded a contract with Yamanashi City Akari Mente LLC for a sustainable finance “Green Loan” for the PFI project “Yamanashi City Public Facilities LED Conversion Project” to be carried out by Yamanashi City. This is the first “Green Loan” initiative for a
PFI project in Yamanashi Prefecture. Green Loans are used to finance domestic and international green projects, and they are characterized by the fact that the use of the funds is limited to green projects and that their transparency is ensured through the management of the funds raised and reporting after the loan is executed.
A green bond assessment and second opinion have been obtained from Rating and Investment Information, Inc., a third-party evaluation agency, regarding the conformity of this transaction with the “Green Loan Principles 2023” of the Loan Market Association of Japan and the “Green Loan Guidelines 2022” of the Ministry of the Environment.

39Medium-Term Management Plan “TRANS3 2025”

Increase Business Capacity

Double Productivity

Measures to increase the number of business loan clients in Tokyoz The number of business loan clients in Tokyo is steadily increasing.
z The branches and the Tokyo Business Development Division, which is a Head Office organization, areworking together to develop customers in Tokyo.
z Creating customers through collaborations with tax accountants, management consultants, trading
companies, existing customers, etc.
z Focusing on activities to contribute to our customers by connecting our customers in Tokyo and Yamanashi
Prefecture, their businesses, and information in both directions.

We are on track to achieve the target for office work reduction time in the Medium-Term Management Plan as aresult of the various efforts to achieve zero office work at branches. In addition, we are also implementing measures to dramatically improve productivity in divisions responsible for a high volume of operations.
We will continue to improve customer convenience and reallocate management resources.

Achievement of zero clerical work at branches
Simplification

Number of business loan clients (Tokyo)
4,100

4,000

Centralization

3,900
3,700
3,500

3,153

3,100

2,817

Plan

2,500

FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2024

Amount of new housing-related loans
March 2023 Execution amount 48.3 billion yen (+6.7 billion yen from the previous
fiscal year, +16%)
The execution amount of new loans increased significantly as we implemented the following measures in FY2022.
z Set interest rates according to market characteristics and increased the speed of returning credit screening
results as a result of changing the screening scheme.
z Strengthen measures for contractors.
z Consolidated mortgage operations into Life Square.
We intend to continue to aggressively promote new loans as we work to expand our product lineup in orderto achieve our goal of 200 billion yen in new loans during the Medium-Term Management Plan period.

Change in amount executed

Change in number of accepted applications(Unit: case)
5,000Tokyo and Kanagawa(Unit: ¥ billion)
50

Yamanashi

Yamanashi

11.2

3,227
1,201

Tokyo and Kanagawa

Up 30%

040

200,000

141,000

FY2022 Results• Introduce semi-self-service terminals to high-volume
counters for streamlining and improving the efficiencyof the reception process at branch counters, etc.

050,000100,000

Progress
70.5%

150,000

200,000

FY2021

THE YAMANASHI CHUO BANK 2023

Up 16%“Semi-self-service terminals” were introduced at branchcounters to improve customer convenience and administrative efficiency.
At the counter, customers enter their transaction
details on a “tablet” located on the counter, and cash withdrawals and deposits are performed by the customer.

Semi-self-service terminals do not require customers to fill out various forms, and if a cash card isissued, deposits can be disbursed using a PIN without the customer’s personal seal.
No voucher required
Accept cardtransactions
Accept multiple
transactions

Middle Office Centers have been established in theCentralized Head Office divisions to handle the operations for high-variety, low volume lots that occur at
branches.
Collaborations between branches and the Middle Office Centers have reduced back office operationsat branches.

18.6

25
29.5

2,152

FY20220

Improve customer
convenience
Streamline operations

Centralize operations for high-variety,low volume lots into the Head Office

2,055

30.4
2,026

48.3

41.6

4,207

2,500

(Unit: hours)
Medium-Term
Management Plan
(March 2023 toMarch 2025)

Introduction of semi-self-service terminals

2,982

2,700

0

• Centralize branch back-office operations for highvariety, low volume lots into the Head Office.
• Centralize the business loan execution process into
the Head Office, etc.

<Reduction of clerical work load (hours)>

3,318

3,300

2,900

Systemization

3,533• Revise and eliminate clerical work based on anassessment of actual clerical risks.
• Expand seal-less transactions for various procedures, etc.

Branches
Back-office clericalwork

Branches
Back-office clerical work

[Reduction]
To the Middle Office Center
FY2021

FY2022

Drastically improve productivity of divisions
responsible for a high volume of operationsz Multi-skill development
Improve productivity by empowering multi-skill
employees and multi-skill management, etc.
z Support for branches
Improve administrative work that leads toreduced clerical work at branches, such as
simplification of receipt documents.
z Digitization
Introduce a system that enables the same-day
transfer of data between branches and the Head
Office for more efficient business operations.
z Review of clerical work processes
Review and administrative improvements of thecentralized Head Office work flow in centralized
branch clerical work.
41Medium-Term Management Plan “TRANS3 2025”

We are working on “next-generation channel reforms” with the aim of building channels to meet diversifying
customer needs and to support our sales strategies. Specifically, for individual customers, we have positioned
digital channels, such as the Yamanashi Chugin App, as our main channel, aiming to provide services that areeven better than those offered at real branches.
For real channels, we are reviewing our branch and ATM network to make it even more suitable for themarket.

Strengthen digital channels
Expansion of functions of
Yamanashi Chugin directchannels(October 17, 2022–)• Expand range of functions and web-based transactions
to promote the digital shift• Reduce clerical costs by automating back-office
operations

Introduction of Yamanashi
Chugin App(April 18, 2023–)• Improve usability through UI/UX-conscious screen design• Portal function on the top screen as a gateway to banktransactions• Secure new means of communication

We are striving to reduce our environmental impact by reducing paper resources through the widespread useof accounts without bankbooks.
With the understanding of many customers, we will actively promoting accounts without bankbooks not
only for new accounts, but also to convert existing accounts, in order to realize environmentally friendly financial services.
Cashless payments have been expanding year by year due to the spread of e-commerce sites and thepromotion of DX, etc., and they have become a part of our daily lives.
The Yamanashi Chuo Bank Group is committed to meeting the cashless needs of local communities and topromoting the cashless society in the regions.

Promoting accounts without bankbooks and cashless operations
Promoting accounts without bankbooks(accounts)
30,000

Number of accounts without bankbooks (total)<Example bank app screen>

24,66625,000Penetration rate of the bank app

Acquisition rate of e-mail addressz Accelerate promotion focusing mainly on Yamanashi
Chugin App.
30

28%

(Unit: %)z Increase number of e-mail and SMS recipients.
70

17,80914,28415,000(Unit: %)

67%

21%

18%

20

20,53220,00010

10,000

65%

64%

5,000
0

Sep. 2022

Mar. 2023

Sep. 2023 (Target)

60

Sep. 2022

Mar. 2023

Sep. 2023 (Target)0* Sep. 2022 and Mar. 2023 include “Wallet+” and “Yamanashi Chuo Bank bankbook
app with CRECO” results. Sep. 2023 (Target) includes Yamanashi Chugin App.

Jun. 2022

Reforming real channels

z Kichijoji branch, Mejirodai branch, and Minamino City
branch were changed to function-specific branches.
60

55

52

Consolidation of branches

Future developments

43

FY2020

FY2021

FY2022

Number of ATMs outside banks

82

78

78

161

162

132

100

42

FY2018FY2019THE YAMANASHI CHUO BANK 2023

FY2020

FY2021FY2019FY2020

FY2021123• Promoted new accounts without bankbooks through LINE messages.

• Implement information dissemination through web advertisements, emails,
etc.

Promoting the shift to cashless operations

FY2022z Strategic reallocation of 11 human resources as a result of
the Ogikubo area branch reorganization, the relocation of
the Kichijoji branch through the branch-within-a-branchmethod, and the Hachioji area branch reorganization

153

130

FY201877(1) Strengthened the promotion of the use of corporate cards (B-to-B payments)

Strategic personnel reallocationz Reduction mainly of low-utilization ATMs
160

0

• Improved functions of the “Yamanashi Chuo Bank bankbook app with CRECO.”• Conduct campaigns to promote switching to accounts without bankbooks
86

20

FY2019Mar. 2023• Second half of FY2022 results: 6,857 accounts

z Kichijoji branch moved to a new location using thebranch-within-a-branch system.

80

FY2018

Status of efforts

100

46

40

0

Dec. 2022• Promoted the opening of new accounts without bankbooks at the counter, etc.

Branches with a full range of services

60

Sep. 2022

Initiatives(2) Started to provide a store payment solution that integrates cashless payment terminals and store
cash registers(3) Started account linkage with au PAY, a smartphone payment service

Futuredevelopments(1) Investigate cashless payment schemes in the regions(2) Expand account linkages with new smartphone payment services

FY202243

Medium-Term Management Plan “TRANS3 2025”

Pursue Sustainability
Under the Shizuoka-Yamanashi Alliance, which is a comprehensive business alliance with Shizuoka Bank, bothbanks will share their know-how and utilize each other’s management resources to achieve their missions intheir respective regions and to contribute to the continuous maintenance and revitalization of local industries,
while also maintaining their management independence and unique corporate brands and customer bases.

To protect our lush and pristine natural environment, we will promote initiatives including to reduce our environmental impact through our business activities and to support customers who are engaged in environmental
protection. Through these initiatives, we will work to stimulate regional environmental protection and to help
solve environmental problems.

“Shizuoka-Yamanashi Alliance” initiatives

Initiatives to reduce CO2 emissions

Promptly implemented measures to collaborate with Shizuoka Bank and realized earnings
benefits that significantly exceeded the initial plan.

z Introduction of electricity from renewableenergy sources (since April 2022)

Earnings benefits

Collaboration in the finance fieldz Aim to achieve earnings benefits of over 10 billion yen(total of both banks over 5 years) by FY2025, focusing
on market finance (structured finance, etc.) and life plans(Shizugin TM Securities Co., Ltd., etc.).
z Results by FY2022: Approx. 9.1 billion yen (5-year
conversion)z Contribution to FY2022: Approx. 2.3 billion yen (single year)z Co-financing in structured finance:
74.5 billion yenz Co-financing, joint creation of syndicate loans, etc.:
28.4 billion yen
9 Co-financing of sustainability linked loans: 6 billion yenz Co-financing as a project related to revitalizing the
local economy:
9 Funds to construct communal villas in Yamanashi
Prefecture

Achievements in the life planning fieldz Development of the Yamanashi main office of Shizugin
TM Securities Co., Ltd.
9 Opened in the Head Office (April 2021)
9 Dispatched seven bank employees from the Bank tostrengthen collaboration<Cumulative results through FY2022>
9 Sales of assets under custody: 35.4 billion yen
9 Balance of assets under custody: 26.5 billion yen<SANU Original Cabin>

Measures to revitalize the local economy
z Individual business negotiations held: 21<Results through FY2022>
9 Number of items negotiated: 751
9 Business matching contracts signed: 120
Successful deals: 16.0%
z Held joint seminars on revitalizing the local economy,
including for startups, agribusinesses, and local
government bodies
z Established “Shizuoka-Yamanashi Mirai Growth
Support Fund,” a fund to support business succession
jointly invested in by the two banks (May 2022).
9 Executed three investments through FY2022

z Executed a co-financing program for a deep-tech
venture utilizing a debt guarantee scheme
9 Working capital for advance investment in MaaS
business

Refund of deposits“Accepting banks”

Request for the
reimbursement ofdeposits in the eventof a major disaster,etc.

Financial institutions withwhich this agreement has
been concluded

Customers

The purpose of the Agreement is to provide mutual support and cooperation so that Yamanashi Chuo Bank, Shizuoka Bank, and Nagoya Bank, which have adjacent business areas,can provide stable financial functions in the event of a large-scale disaster, such as a Nankai
Trough earthquake or the eruption of Mt. Fuji.
In the event that the business areas of the three banks are affected by a disaster or become
evacuation areas, deposited funds of up to 100,000 yen per day per account can be withdrawn at
the branches of the financial institutions with which the Agreement has been concluded.

<Business Flow Chart>
Notification ofrefund details

Notification of a refund
request(The decision as to whether or
not a refund is possible is madeby the correspondent bank.)

Customer’s
correspondent bankStrengthen the business foundation through the “Shizuoka-Yamanashi Alliance”
Signed the “Mutual Assistance Agreement for Deposit Reimbursement in
the Event of a Large-Scale Disaster”

THE YAMANASHI CHUO BANK 2023

As part of our efforts to address climate change and environmental preservation, we introduced three one-seater andthree two-seater ultra-compact battery-powered electric vehicles (BEVs), for a total of six vehicles, at two branches.
The CO₂ emissions of the newly introduced electric vehicles when being driven are about half those of conventional gasoline-fueled light vehicles.

z Introduction of paper file folders(since April 2022)

z Discontinuation of self-serve banknote
envelopes at all ATMs (since October 2023)

As part of our response to the
Act on Promotion of Resource Recycling Related to
Plastics and the promotion ofSDGs, we have replaced plastic file folders, such as thoseused to deliver documents tocustomers, with paper file
folders.

In September 2022, we started discontinuing self-servebanknote envelopes at in-branchATMs at certain branches on a trial
basis in order to save resources.
From October 2023 onwards,
we will discontinue self-servebanknote envelopes at all ATMs (inside and outside branches).
By doing this, we expect toreduce CO2 emissions by approximately 132 tons per year.

z Offset credit “J-VER,” a purchase destination
introduction project, with Yamanashi Prefecture<WHILL ModelC2>

44

Introduced “Yamanashi Power NEXT ‘Furusato Hydro Plan,’” apower service plan that uses renewable energy electricity
generated at Yamanashi Prefecture’s hydroelectric power
plants, for our Head Office and computer center building.
This plan provides CO₂-free electricity that is generated at Yamanashi Prefecture’shydroelectric power plants
and is provided by Yamanashi
Prefecture and TEPCO Energy
Partner, Inc.
Introducing the plan
resulted in a decrease of CO₂
emissions by 1,349 tons in
FY2022.

z Introduction of ultra-compact batterypowered electric vehicles (BEVs) for
commercial use (since September 2022)

In order to support local businesses in their efforts to reduce CO₂ emissions, we provide introduction
services for the purchase of “Yamanashi Prefectural Forest Offset Credits (J-VER).”
These J-VERs are highly reliable credits generated from the “Yamanashi Prefectural Forests” thatare recognized as being properly managed in accordance with international standards as part of the“Yamanashi Prefectural Forest Utilization Global Warming Countermeasures Project” under the FSC Forest Management Certification. In addition, the image of the purchasing company can be enhanced, suchas through its contribution to environmental conservation and biodiversity.
Through this project, we will work with Yamanashi Prefecture to promote a decarbonized society
and environmental conservation through the proper management of prefectural forests by utilizing “Yamanashi Prefectural Forest Offset Credits (J-VER).”

45

Medium-Term Management Plan “TRANS3 2025”

Business Foundation to Support Each of Our Businesses

In order to accelerate our efforts to address environmental and social issues toward the realization of sustainable local communities, we provide SDGs consulting and financial support to our customers to assist them intheir SDGs and ESG efforts. We have also set medium- and long-term targets for the amounts of sustainable finance as quantitative targets.

Status of sustainability support
The sustainable finance execution amount has been increasing steadily.
Financial support
z Loans<Scheme diagram>

Human resources development policy

Second opinion[Human resources development policy]

EconomyImpact analysis/assessment,
loan agreement

Customers

Environment

Reduce positive
impactYamanashi Chuo Bank

Enhance positive
impactSociety

Monitor and report/disclose
progress at least once a year

Othersz Investment
Based on the “Yamanashi Chuo Bank Group Investment and Loan Policy,” we actively invest in projects
that help solve environmental and social problems.
Specifically, green bonds, sustainability-linked
bonds, transaction finance, social bonds, etc.

Consulting support
z Actively engaged in SDGs consultation forcustomers, including target selection, materiality
selection, support for booklet preparation, andholding study sessions.
z In order to encourage our customers’ SDGs
initiatives, from July 2022 we started offering the“SDGs Declaration
Support Service” aspart of our fee-based
consulting services,and we are focusing on
supporting ourcustomers in their
preparations of an“SDGs Declaration.”

THE YAMANASHI CHUO BANK 2023

Investment in human resources development in FY2022

z Target
Item

Description

Medium-termtarget

250 billion yen or more

Long-term
target

800 billion yen or more(including environmental finance of 400
billion yen or more)

PeriodFrom FY2022 to FY2030

TargetInvestment and lending to help solve
social or environmental problems
toward the creation of a sustainableregional societyz Results
80

We have formulated a human resources
development plan and are working on it in order to create an organization where each employee can realize personal growth and feel asense of fulfillment, and where diverse humanresources can play active roles.

71.4
7.2

Loans
60
40
20

39.5

35.0

Human resources specialized in DX
Advanced

First half of FY2022
Plan and result

DX Manager(certification within the Bank)Intermediate

64.1
35.0
Second half of FY2022
Plan and result

Total training hours per year
(inside the Bank)

48,339 hours

Training hours per person

30.3 hours

Investment amount in humanresources development

81 million yen

We will establish an internal certification system for DX promotion personnel to improve the skills of eachand every employee autonomously and to further accelerate DX initiatives inside and outside the Bank.

(Unit: ¥ billion)

Investment

46.6
7.0

Internal environment improvement policy

While defining “prompt action,” “active involvement with those around us,” and “taking on challenges in new
fields” as the foundation we expect of all executives and employees, we will develop highly specialized humanresources in diverse fields who will be the driving force in meeting the increasingly diverse and sophisticatedneeds of our customers and local communities, resolving identified materialities, and supporting sustainableregional growth. To this end, we will actively provide various internal and external training programs, job rotations, and opportunities for self-improvement, and we will work to support the independent and self-directed
growth of our employees.
And we will aim to realize our Purpose while ensuring a diversity of human resources and work styles
through the promotion of Diversity, Equity, and Inclusion.

Sustainable finance046

Based on the value creation process, at the Yamanashi Chuo Bank Group we view our “human capital” as themost important and intrinsic capital to support our strengths in response to the materiality and management
issues we have identified. We are implementing management practices to recruit, develop, and utilize diverse
human resources with high expertise so that can be the three transformation drivers (AX, DX, and SX) to steadily implement our strategies and to create value to offer to various stakeholders, and to realize our “Purpose” anda “Well-being Society.”
We have established a “human resources development policy” and an “internal environment improvement
policy” to secure and develop human resources for future efforts and strategy execution toward “The realizationof human capital management,” which will lead to a sustainable enhancement of corporate value by improving
the job satisfaction, skills and motivation of each and every employee.

Japan Credit Rating Agency, Ltd. (JCR)

Corporate
activities

External
environment

In addition to the existing sustainable finance menu (sustainability-linked loans, SDGs support loans,and private placement bonds), we
started handling “Positive Impact Finance” from July 2022 to establish asystem to support customers’ SDGs
and ESG initiatives from a financial
perspective.

Initiatives toward Realizing Human Capital Management

DX Planners(certification within the Bank)
Elementaryz The DX Planner is an entry-level certification within the Bank.
z In collaboration with personnel of higher certification, they will take theinitiative in utilizing digital tools to drive the digitization of theorganization.
z As of March 31, 2023, the target for the number of people developed had
been exceeded.
z Satisfying qualifications certified within the Bank is part of therequirements for open calls related to internal DX-related measures sothat such qualifications are linked to various measures.
As of March As of March As of March
31, 2023
31, 2024
31, 2025

Total

Target for no. of people developed (KPI)

150

200

150

500

Results

168

-

-

-

Achievement rate

112%

-

-

-

47

Business Foundation to Support Each of Our Businesses

Highly specialized (consulting) human resources development

Initiatives to support women’s empowerment

We are working to develop and utilize diverse human resources with high expertise(consulting human resources) who can contribute to improving the vitality of local
economies and solving issues in local communities.

From the viewpoint of demonstrating and promoting the abilities of diverse human resources, we have set theratio of female managers and supervisors as a KPI in our Medium-Term Management Plan, and we are working
to develop this ratio.

Persons who have highly difficult qualifications
Qualification support fee

FY2020

FY2021

FY2022

FY2024 (Targets)

6

12

17

50 or more

1.49 million yen 3.32 million yen 3.57 million yen-

Number of employees seconded or dispatched externally

35

30

32

-

Number of employees dispatched for external training

7

17

30

-

Highly difficult qualification: Small and medium enterprise management consultant, securities analyst, FP Level 1, real-estatetransaction specialist, etc.
External secondment and dispatching results: Local companies, domestic banks, securities companies, fintech companies, realestate companies, local governments, etc.
Results of employees dispatched for external training: Financial management school, regional bank cooperative courses (practical courses for corporate transactions, skill improvement courses for individual transactions), etc.

Ratio of female managers

Ratio of female managers andsupervisors

March 2025 (Final year of theMedium-Term Management Plan)

Ideal state

4.1%

14.8%

15% or more

40% or moreManagement
development program

Participants

Cumulative
number ofparticipants

Description

Insidethe Bank

Women’s careerdevelopment program

10

10

Program initiated in FY2022. In addition to the three grouptraining sessions, the executive officers and other staff members serve as mentors, and individual interviews are held tolearn about the duties and ideas of managers.

Outsidethe Bank

Female managers
step-up courses, etc.

211Training sponsored by the Regional Bankers Association.
About one person participates each year. In addition tolearning through training, we are aiming to raise awarenessincluding by exchanging information with other banks.

Supervisors development
programParticipants

Cumulative
number ofparticipants

Description

12

Training sponsored by the Yamanashi Management Association. About two persons participate each year. In addition tolearning through training, we are aiming to raise awarenessincluding by exchanging information with other companies.

Outsidethe Bank

For women
Leadership training2

Support for improving community vitality and creating affluent lifestyles
In order to improve the vitality of local
economies, develop local communities,
create affluent lifestyles, and realize SDGs
Goal No. 4 “Quality Education for All,” we arestrengthening our efforts to improve financial literacy.

FY2020

FY2021

FY2022

Number of financial education
sessions held

11

58

46

Number of participants

1,633

2,379

2,548

Number of field trips accepted

9

17

20

115

219

261

815

1,360

1,115

Number of trainees accepted
for field trips
Number of visitors to the
Financial Museum

48

THE YAMANASHI CHUO BANK 2023

Discussions with female board members at the women’s career development program[Voices of participants in the women’s career development program]• The participants’ exchanges of opinions with the Bank’s outside officers and their interactions with thementors provided an excellent opportunity for them to come in contact with various perspectives andways of thinking.
For more information on the
Yamanashi Chuo Bank Financial
Museum, please visit the website.

• I learned a lot about how to relate to subordinates as a manager, how to lead, and advice from amanager’s perspective, which I can now work on.

49

Business Foundation to Support Each of Our Businesses[Internal environment improvement policy]
To support the development of local businesses and industries, to revitalize the region, and to realize a well-being society,we will promote the development of a workplace environment that allows diverse human resources to maximize theirabilities, to create an organization where they can feel fulfilled in their work, and to create a system where they can feel
fulfilled in their work, family, and life.
We will also respect human rights and diversity and realize a vibrant organization in which all people candemonstrate their individuality and capabilities.

Gender wage gap (ratio of women’s wages to men’s wages)
We recognize that continuing the careers of women and increasing the ratio of women in managerial and supervisory positions is one of the challenges facing the Group, and we are expanding systems and conducting training programs to promote diverse work styles and career development, and we are seeing a trend toward correcting the wage gap between men and women and increasing the average length of service for women.

Initiatives for individual growth
In addition to focusing on the development of human resources capable of providing a variety of services and value to customers, the Yamanashi Chuo Bank provides opportunities for its employees to gain awide range of experience in order to realize their career plans with asense of worth and job satisfaction.
My career coordination
programDescription

Post challenge

Expanding open recruitment fortransfers to Head Office departments, etc., to support employees’
voluntary career realization

Side job

Job trials

5 (9)

10

10 (11)
Number of users

THE YAMANASHI CHUO BANK 2023

17 years and 10 months

18 years and 3 months

60.3%

10

8 years and8 months

FY2020

FY2021

FY2022

*

21.6%

16.4%

115.2%

Ratio of female employees taking childcare leave

108.1%

97.7%

111.8%

Number of participants in meetings held to exchange information on support for returning to work after childcare leave

0

18

18

Number of meetings held to exchange information on
support for returning to work after childcare leave

0

1

2

Number of employees using the shorter working hours
system for childcare

29

33

24

Number of users of the telework system (total)

3,662

3,618

3,687

FY2022

TargetRemarks

45.5%

100%

Set as KPI in the Medium-Term Management Plan.
All subjects have already confirmed their intention to take it.

Number ofpeople33
15* The ratio of male employees taking childcare leave (long-term) (45.5%) is calculated as (2) / (1).
* The ratio of male employees taking childcare leave (115.2%) is calculated as ((2) + (3) + (5)) / (1).

10
8
13

60.0%

58.0%
57.0%
56.0%

56.6%

55.0%

55.1%

54.0%

Average years of service
by male employees
Average years of service
by female employees
Gender wage gap(regular employees)

53.0%

2

52.0%

0

FY2012

Number of male employees whose spouses gave birth during FY2022... (1)Of who, number of male employees who took long-term childcare leave... (2)Number of employees who took childcare leave in installments (number of
employees who took childcare leave for less than 20 working days)... (3)Number of employees who have not taken childcare leave... (4)Number of male employees whose spouses gave birth before FY2021 who tookchildcare leave within FY2022... (5)11 years and7 months

10 years and2 months

4

Side jobs: Data analysis, fireworks event
management, seminar lecturer, etc.

61.0%

59.0%

8
6

Side job (outside concurrent employment)

43 (48)

Ratio of male employees taking childcare leave

Rate of long-term childcare*
leave taken by men

17 years and 7 months

12

Family leave benefit

50

46.0%

In the past, the wage gap among full-time employees was partly due to the fact that women often
leave the workforce after giving birth, and they haveshorter service years than men and hold fewer managerial and supervisory positions.

16

As part of our initiatives to support a work-life balance, Yamanashi Chuo Bank has introduced a teleworking
system and a flextime system, expanded the leave system, and is promoting diverse work styles. In addition, asa measure to support employees who are taking childcare leave to return to work or after returning to work, weare also expanding the shortened working hours system for childcare.

We regularly hold briefings for employees on childcare leave with theaim of alleviating their anxiety about
returning to work and enabling theirsmooth return.

All workers
20

Initiatives for diverse work styles

Support for employees returning to work after childcare
leave

70.3%

14

* The difference between the number of applicants and the number of users is due to the fact thatthe number of applications exceeded the number of openings.

This benefit enables employees to accumulate annual paid leave for a certain period of time, before the leave
expires in two years. This benefit canbe used if employees’ themselves are ill
or injured, but also for nursing and caring for their family members, as well as
infertility treatment.

Part-time and fixed-term employees

18

Initiatives to develop skills andadvance careers through experience of Head Office operations

Paid leave accumulation

60.3%

Number of users(number of applicants)

Reflecting one’s own knowledge inorganizational management andpersonal growth through participation in projects

Employees can utilize this benefit forparenting, nursing, and caring for theirfamily members. This benefit also covers health problems during pregnancy,
infertility treatment and children’s
school events.

Regular employees

FY2017

FY2022

Initiatives to improve engagement

Initiatives for compliance

We have reviewed and expanded the incentives of
the Employee Stock Ownership Plan to enhance employee asset building, motivation, and engagement,
and to provide value to our stakeholder employees.

The Bank has identified strengthening complianceas one of the materialities for the Group’s value creation process. Each year, we formulate the Compliance Program as the basis and most important issue
for all our efforts, and we conduct in-office training
and group training for each employee level.

Ratio of employees
joining the Employee
Shareholding Plan

FY2020

FY2021

FY2022

85.7%

85.0%

84.0%

* The Trust-based Employee Shareholding Incentive Plan
(E-Ship®) was introduced in May 2023.

Results (FY2022)
Compliance check sheet response rate

100%

In-house training participation rate

100%

Number of group training participants

322

Health management initiatives
Based on the belief that the “physical and mental health” ofemployees is fundamental to both their public and private
lives, the Yamanashi Chuo Bank has been implementing avariety of health-related systems and measures and has
been certified as a corporation with excellent health management for six consecutive years. As a regional financial
institution, we will continue to support the creation ofhealthy and vibrant communities by maintaining and improving the health of our employees based on the threepillars of “workplace health (promotion of a work-life balance),” “physical health,” and “mental health.”51

Business Foundation to Support Each of Our Businesses

Responses to TCFD Recommendations
The Yamanashi Chuo Bank has endorsed the Climate-related Financial Disclosure Task Force (TCFD) recommendations in November 2021 and is committed to addressing climate-related issues.

Risk management

Governance• In order to realize sustainable management, one of the Bank’s materialities is“maintaining a rich natural environment and passing it on to the future,” and the Bank is
working to address climate-related issues.
• In June 2022, the Sustainability Committee, chaired by the President, was established tofacilitate cross-divisional discussions among Head Office divisions on climate changerelated responses and SDGs/ESGs initiatives. In principle, the Sustainability Committee
meets monthly, and the matters it has discussed and deliberated on are submitted andreported to the Board of Directors via the Managing Directors’ Meeting, thereby
establishing a system to ensure appropriate supervision by the Board of Directors.
• In December 2022, we established the “Yamanashi Chuo Bank Group Sustainability
Policy” and are working on various measures related to “Sustainability Transformation(SX)” as stated in our Medium-Term Management Plan.

z Area map

Board of Directors
Agenda/ReportSupervisor

Board of Managing
Directors
Agenda/ReportInstruction

Sustainability Committee• We recognize that the transition risks and physical risks resulting from climate change are significant risks that could significantly
impact the Bank’s business operations and strategic and financial plans. In the future, we will assess and analyze the impact related tosuch risks and develop a management system for climate change within the framework of integrated risk management.
• In addition, based on the results of the scenario analysis of physical risks and other factors, we will create shared value by
strengthening dialogues with customers, identifying their issues and needs, and providing optimal consulting services to address
climate change and the transition to a decarbonized society.
• We have established the Yamanashi Chuo Bank Group Investment and Loan Policy and are working to solve the environmental andsocial issues that our customers and regional communities are facing by actively supporting businesses that help to solve
environmental and social issues, while reducing investments in and loans for specific sectors that have a negative impact on theenvironment and society.

Head Office Divisions

Indicators and targets
Strategyz Climate-related risks andopportunities

Transition risk

Risks

Time

Risks associated with changes in climate-related regulations and taxation systems that
may affect customers’ businesses
Risk of a share price decline due to continued over-investment in fossil fuel-related
businesses
Risks associated with the impact on customers’ businesses due to market changes
caused by decarbonization-related technologies

Short-term
Short-termLong-term

Physical risks
Medium-term

Medium-term

Increase in public works projects for disaster countermeasures and corporate demand forequipment financing, etc., for climate-related reasonsMedium-term

Lower operating costs through resource and energy conservation at sales branchesLong-term• Transition risk
Transition risk is assumed to be an increase in credit-related expenses for sectors affected by the response to tighter climate-related
regulations, such as carbon emission limits and higher carbon taxes. The target sectors will be selected based on the Bank’s portfolio
composition (amount of credit) and will be analyzed in the future.
Occurrence of a flood due to climate change
Damage to real estate collateral

Decrease in sales due to the suspension of business operations

Impairment of collateral value

Scenarios

The IPCC’s RCP 2.6 scenario (2°C scenario) and RCP 8.5 scenario (4°C scenario)

Scope of analysis

Business loan borrowers (2,000 largest borrowers and borrowers with collateral)
Calculated the increase in credit-related costs on a trial basis in consideration of the probability of the occurrence of a flood for each climate change scenario, after taking into consideration the impact on the financial condition of business loan borrowers and impairment of thevalue of real estate collateral at the time of a flood

Analysis period

Based on the end of September 2022 to 2050

Analysis results

Credit-related costs are expected to increase by 1.2 to 2.3 billion yen on a cumulative basis

z Carbon-related assets• Carbon-related assets are defined by four sectors. The
percentages of the four sectors’ loans relative to the
Bank’s loan balance is shown in the chart on the right.

(Based on September 30, 2022)
EnergyTransportation

Materials andstructures

2.93%

10.58%

19.30%

Agricultural, food, andforestry products
2.27%* The Bank aggregated data by deeming the sector to which the major business of each customer belongs as the applicable sector, based on the sector
classification of the Bank of Japan.

52

THE YAMANASHI CHUO BANK 2023

5000

2500

0

At least a 70% decrease by FY2024
compared with FY2013

Long-term target(FY2030)

Achieve carbon neutrality by FY2030(Unit: t-CO2)

2013

2020

2021

2022

2024

Scope 1

Scope 2

Total

Reduction rate

FY2013

834

5,659

6,493

-

FY2020

733

4,080

4,813

25.87%FY2021

682

3,858

4,540

30.08%FY2022

707

2,367

3,074

52.66%

2025* We have added emissions from gasoline use to the Bank’s greenhouse gas (CO₂) emissions (Scope 1 and Scope 2) in the periodic reports under the Act on
the Rational Use of Energy. In addition, we have revised the previous information disclosure from FY2022.
Scope of CO2 emissions: Scope 1: Direct emissions (including heavy oil, gas, and gasoline), Scope 2: Indirect emissions (electricity)z Support for Scope 3

Impact on the financial condition of business loan borrowers

Analysistechnique70% reduction

New financial products and services to support the transition to a decarbonized society

Medium-term target(FY2024)(Unit: t-CO2)

7500

Medium-termz Scenario analysis• Physical risks
For physical risks, we conducted
an analysis of the financial impact
of flooding on our business loanborrowers under theIntergovernmental Panel on
Climate Change (IPCC) RCP 2.6
scenario (2°C scenario) and RCP
8.5 scenario (4°C scenario), andthe increase in credit-related costs
due to damage to collateralproperties. The results of theanalysis are shown on the right.

• In April 2023, in order to accelerate the realization of adecarbonized society and the sustainable development ofsociety by proactively working to solve local environmental
issues, we revised our CO₂ emission reduction targets for the
Bank, raising the medium-term target to “a 70% or more
reduction from the FY2013 level by FY2024” and the long-termtarget to “carbon neutrality by FY2030.”

Carbon neutrality

Risk of business stagnation due to damage to real estate collateral resulting from windor flood damage, etc., or damage to customers’ business locations
Risk of interruption or inability to operate branches due to damage to the Bank’sbusiness facilities caused by wind or flood damage, etc.

Opportunities• We have identified “climatechange/global warming” as one ofour material issues and areworking to address both risks andopportunities.
• The risks (migration and physicalrisks) and opportunities
associated with climate-related
issues are analyzed qualitatively
over short (3-year), medium(10-year), and long (30-year) time
horizons.

z CO2 emission reduction targets and results(Scope 1 and Scope 2)• We calculated emissions in Category 6 (business travel) andCategory 7 (employee commuting), which are part of Scope 3.
• As we recognize the importance of calculating emissions in
Category 15 (investments) toward the realization of a carbonfree society, we will enhance our analysis going forward.

z Sustainable finance investment and loan
amount targets and results• In order to accelerate our efforts to address environmental andsocial issues, etc., toward the realization of sustainable local
communities, we have set medium- and long-term targets forthe amounts of sustainable finance to be executed as
quantitative targets.
• In July 2022, we began handling “Positive Impact Finance” inorder to accelerate our efforts to address environmental andsocial issues in the region.

Category

6 (business travel)

7 (commuting)

Emissions in FY2022

313.95 t-CO₂

928.94 t-CO₂

Sustainable finance (including environmental finance)
Medium-term target(FY2024)250 billion yen or more

Long-term target(FY2030)800 billion yen or more
(400 billion yen or more)

FY2022118 billion yen (58.7 billion yen)

* Sustainable finance:	Investments and loans that help solve social and environmental issues, thereby driving progress toward realizing sustainableregional communities.
Environmental finance:	Investments and loans that fund initiatives to reduce environmental impact and combat climate change in order to curb global
warming and reduce its impact on regional economies.

53

Business Foundation to Support Each of Our Businesses

Leveraging Consulting Functions Based on Business Feasibility Studiesz SDGs consultation
As part of our ESG finance initiatives, we provide
SDGs consultation services to help companies
achieve sustainable growth and drive regional development.
In order to build a sustainable regional economy, it is important to promote the SDGs throughout
the region. As a regional bank, we believe that it is
our responsibility to encourage a large number ofcompanies to engage in efforts to achieve the SDGs,
thereby developing the regional economy.
Our SDGs consultation services meet the various needs of companies, including for backcasting,the building of SDGs-related declarations, the election of material topics and support for creatingbooklets and posting on websites to meet the various needs of companies.
In addition, in order to make SDGs initiatives
more effective, we hold SDGs study sessions for theemployees and senior executives of companies. In
these sessions, we help the participants fully recognize the need to tackle the issue of microplastics, thechallenges in achieving a decarbonized society, gender equality, etc., by becoming aware of the current
world situation and discussing what we can do.
Through our consultation services, we willcontinue to build foundations for regional businesses to voluntarily act to achieve SDGs and help themengage in such efforts with a sense of ownership.

z Support for environmental businesses
In order to achieve carbon neutrality, there is a growing trend toward decarbonization, which aims to reduce emissions of greenhouse gases such as CO2. For
customers interested in these services, the Head Office staff provides management advice and businessmatching with various equipment providers andconsultants.

54

THE YAMANASHI CHUO BANK 2023

z Handling of sustainable finance, etc.
Amid growing interest in SDGs/ESG (environment,
society, and governance) initiatives, we have established a system to support our customers’ efforts toadvance sustainable management from a financial
perspective.
We offer the “Yamanashi Chugin Sustainability
Linked Loan,” in which interest rates and other loan
terms vary depending on the achievement of quantitative and ambitious SDGs/ESG-related targets set
by the company, and “Yamanashi Chugin Positive
Impact Finance,” which comprehensively and quantitatively analyzes the changes and impacts of corporate activities on the environment, society andthe economy and supports efforts to improve identified positive impacts and mitigate or reduce negative impacts.
The Bank will continue to actively support local companies that are working to achieve the SDGs
and contribute to sustainability in the region as awhole.
z Matching customers with business partners
To help customers expand sales channels, review
suppliers, reduce costs, improve productivity, andresolve various other management issues, the Bank
introduces to them business partners that best meettheir needs.

Initiatives for Revitalizing Local Economies and Contributing to Regional
Commu­nities
Activities for regional revitalizationz Contribution to sustainable community
development
With the aim of strengthening mutual cooperation for the development of local economies, we have concluded cooperation agreements with local governments and are working together to revitalize agriculture, commerce, and industry,
promote immigration and settlement, and advance tourism
and community development. We are strengthening cooperation with local government bodies in urban development andattracting companies in anticipation of the opening of the
Chubu-Odan Expressway and the Shinkansen Maglev Train.
We also support the promotion of PPP/PFI (Public-Private Partnership) projects by local governments to create
sustainable communities by improving the efficiency of administrative and fiscal management and creating new business fields for local businesses.
Furthermore, in order to support the expansion ofsales channels for local businesses, we are working to revitalize local economies by holding individual business meetings
between retailers in Shizuoka Prefecture and producers andfood-related businesses in Yamanashi Prefecture and direct
sales of Yamanashi products in Shizuoka Prefecture as part of
the “Shizuoka-Yamanashi Alliance” in cooperation with “BuyFujinokuni,” an initiative by Yamanashi Prefecture and Shizuoka Prefecture.

z Collaboration with universities
The Bank has concluded comprehensive cooperation agreements with the University of Yamanashi, Yamanashi Prefectural University, Yamanashi Gakuin University, and Yamanashi
Gakuin Junior College, respectively, with the aim of revitalizing local economies through industry-academia collaborations. In January 2023, we concluded a comprehensive agreement with Teikyo University and are working to revitalize thelocal economy with new perspectives and ideas through an
industry-academia collaboration across prefectural borders
with a Tokyo-based corporation.
We also publish “Business Opportunities Direct fromthe University of Yamanashi,” which introduces the research
activities of the University of Yamanashi. In addition, 87 employees of the Bank are working as “University of Yamanashi
Visiting Social Collaboration Coordinators” to bridge the gap
between industry and academia.
In addition, we dispatch lecturers to open lectures at
Yamanashi Gakuin Junior College to promote local financial
education and to foster a love of one’s hometown.

We will continue to work for the prosperity of local communities and the revitalization of local economies for the sustainable growth of each university and Yamanashi Prefecture.

z Promotion of dual residency, relocation, andpermanent residence
To promote living in two locations, the Bank has concluded
an Agreement on Promoting Dual Residency with the Yamanashi Prefectural Government, and handles Yamanashi
Prefecture-Affiliated Second-House Loans.
The Bank has set up “Move-to-Yamanashi Desks” at its
branches in Tokyo and Kanagawa Prefecture. “Move-to-Yamanashi Advisors” have been appointed by Yamanashi Prefecture to accept inquiries from people interested in relocating to Yamanashi Prefecture and to forward the inquiries to
the Yamanashi Living Support Center. Additionally, the Bank
offers Municipality Partnership Housing Loan products for 19
municipalities, which are linked to subsidies established bymunicipalities to encourage inbound migration.
Moreover, to spread the word about the attractivenessof Yamanashi Prefecture, the Bank has installed special stands
with promotional leaflets on the municipalities in Yamanashi
Prefecture at its branches in Tokyo and Kanagawa Prefecture,and it has published information on dual residency and moving to and living in Yamanashi Prefecture on the Bank’s website and FUJI_NOTE, a special information website.

z Support for TGC FES YAMANASHI 2022
We supported the local holding of TGC FES YAMANASHI 2022,
which was produced by Tokyo Girls Collection to promote theattractiveness of the tourism resources and local productsthat Yamanashi Prefecture is proud of, to raise awareness ofthe prefecture, and to attract more visitors.
We worked to hold the event as a community-wide
event by introducing exhibitors and sponsors, mainly business partners, to the organizers. The event also had a secondary effect in terms of regional revitalization, as many performers, including models and YouTube stars, disseminatedinformation via Instagram and YouTube by visiting local tourist spots and staying at hotels and Japanese inns.
We will continue our efforts to create a sustainablecommunity as we support community-sponsored events.

55

Business Foundation to Support Each of Our Businesses

Initiatives to create barrier-free facilities
z Joint investment in Hyakunen Solar YamanashiCo., Ltd.
In April 2023, together with the Yamanashi Prefectural Enterprise Bureau, Mitsubishi UFJ Trust and Banking Corporation,and Hirasol Energy Corporation, we made a joint investment
in Hyakunen Solar Yamanashi Co., Ltd., which has the technology to increase the ratio of renewable energy sources
through the performance regeneration of solar power plants,
by way of a third-party allocation of new shares and underwriting.
In cooperation with Hyakunen Solar Yamanashi Co.,
Ltd. and other stakeholders, MHCB will work to achieve longterm, stable power generation from solar power plants in theregion and to prevent the abandonment of aging solar power

plants after the FIT period ends, thereby promoting local production for local consumption of electricity and ultimately
strengthening efforts to decarbonize the region.

z Installation of handset-equipped ATMs at all
branches
The Bank has installed handset-equipped (receiver-type)ATMs at its Head Office and all branches so that customers
with visual impairments and elderly customers can use ATMs
without difficulty.

z Installation of a voice guidance system
We have installed a system that responds to communication
devices carried by people with visual impairments and provides voice guidance. These devices are available in the Shimoiida Branch, Kofu Station Sub-Branch (CELEO KOFU), as
well as the Kofueki Kitaguchi Sub-Branch.
At the Kawaguchiko Branch, an intercom and electronic chime for guidance have been installed near the sidewalk, and a system has been established to guide customers
to the inside of the branch by a staff member.

Local contribution activities in a variety of fields
z Initiatives to improve financial literacyz Sports promotion

As part of our financial education for local communities, we
dispatch instructors to schools to conduct on-site classes. For
high school students, we have also held the “Economics
Koshien Yamanashi Tournament.” In addition to the permanent exhibits, the Yamanashi Chuo Bank Financial Museum
also holds events and other activities as needed. Additionally,
the museum has set up a new special display corner featuring
Eiichi Shibusawa, who was involved in the establishment of
Dai-Ju National Bank, the predecessor to the Bank.

The Bank’s women’s volleyball club holds Fureai VolleyballClasses and Sawayaka Kids Volleyball Classes, while the Yamanashi Chuo Bank Cup Yamanashi Prefecture Moms’ Volleyball Tournament, which has been held 27 times this year, ispromoting and improving volleyball skills in the prefecture.
We also cooperate in creating regional revitalization
through the promotion of sports by sponsoring sporting
events and supporting sports teams based in the prefecture,including VENFORET KOFU and the Yamanashi Queen Bees.

The Bank issues statements on customers’ deposit transactions (ordinary deposits, current accounts, etc.) in braille forthose who require it.
When sending such statements by mail, we affix stickers in braille stating the customer’s name and “Yamanashi
Chuo Bank” on the envelope.

z Installation of desktop-type conversation
support equipment
To allow customers with a hearing impairment and the elderly customers to communicate smoothly with branch staff, wehave installed desktop-type conversion support equipmentin our locations. These devices work by converting the branchstaff member’s voice into a form that is easier for listeners tohear. These devices are available at the Head Office and certain other branches.

z Barrier-free branchesz Cooperation with local high schools
Issatsudo, a private library run by students of the Kofu FirstHigh School Exploration Department, was set up in the lobbyof a nearby branch.
“Issatsudo” is a response to high school students’ desire to promote reading and to examine the stress-relieving
effects of reading.

z Transaction statements issued in braillez Food donations
Food items were donated to Food Bank Yamanashi and the
Yamanashi Prefectural Council of Social Welfare as part of the“Yamanashi Chugin Food Drive” mainly for single-parent
households with elementary and junior high school students.
We will continue our efforts to achieve a sustainable
society by helping to enrich the lives of everyone in our local
communities.

The Bank is working to develop branches with barrier-freefeatures in facilities and buildings to ensure that all customers, including those with physical disabilities and the elderly,
are able to reliably and safely use our branches. Examples include the installation of priority parking spaces for people
with disabilities and access ramps to branch entrances.

z Customer assistance system
The Bank offers a system for customers with physical disabilities to make reservations to visit a branch ahead of time toensure that their visit proceeds smoothly.
Prior to the customer’s visit, a representative from thebranch will call the customer and inform them about the necessary documents and how the procedures will be handled,thereby ensuring that the branch visit is smooth and successful.

z Assignment of dementia supporters
The Bank is striving to further improve services by showing
consideration and paying attention to all types of customers
and by building a community friendly to seniors with dementia and other people with special needs. As part of these efforts, the Bank has assigned dementia supporters to all its
branches. The Ministry of Health, Labour and Welfare recommends that businesses have dementia supporters on-site.

56

THE YAMANASHI CHUO BANK 2023

57

Business Foundation in Support of Value Creation
Risk Appetite Framework (RAF) Initiatives

Company institution details

The business environment for regional financial institutions is becoming increasingly challenging due to factors suchas the declining birthrate and aging population, as well as the prolonged negative interest rate policy. As such, building
a sustainable business model has become an urgent task for the Bank. In order to build a sustainable business model,a Risk Appetite Framework (RAF) that optimizes the balance between profits and risks and comprehensively and integrally manages the avoidance of risks that would have a significant impact on management is considered useful.
As part of its Medium-Term Management Plan “TRANS3 2025,” the Bank has been working on “Sophisticatedprofit and risk management methods using RAF” and is striving to improve the sophistication of its ALM management, including by formulating profit plans based on RAF.

We are a company with a Board of Corporate Auditors. The Board of Directors makes decisions on management
policies and other matters of importance, and also oversees the execution of directors’ duties. Among the directors, the Board of Directors has three outside directors participating in positions independent of business execution, which enhances the management supervision functions of the Board of Directors.
Furthermore, the company has established a “Nomination and Remuneration Advisory Committee” as avoluntary advisory body to the Board of Directors, to ensure fairness, transparency and objectivity in the decision-making processes related to the appointment and dismissal of senior management (executive directors
and above) and to the appointment and remuneration of directors.
The Board of Corporate Auditors makes decisions on auditing policies, planning, and methods, and it audits the execution of directors’ duties from a perspective that is independent of the Board of Directors.
In accordance with the basic management policies decided by the Board of Directors, there are also thefollowing bodies: the Board of Managing Directors, which deliberates and resolves priority matters related to
the Bank’s overall management and business operations; the Compliance Committee, which deliberates on
measures toward developing and establishing compliance structures along with monitoring the implementation of these measures; and the Risk Management Committee, which aims for effective and flexible risk management in response to changes in the business environment.
Furthermore, the Bank has established an Executive Officers System to enhance corporate governanceand is working to separate decision-making management functions from business operation functions.
The Bank has four Group companies engaging in businesses that include credit guarantees, leasing, credit cards, and consulting, and it operates in an integrated manner to provide comprehensive financial functions.

Corporate Governance
Basic policy on corporate governance
Guided by its social responsibility as a banking institution and its public service mission in that role, the Yamanashi Chuo
Bank aims to secure the trust of various stakeholders, including customers, shareholders, staff members and the communities it serves, by such means as maintaining the Group’s sound management and assuring management transparency,
in conjunction with contributing to the prosperity of the regional community and the development of its economy.
To this end, the Bank has built a stronger internal control system and organizational structure, along with working to enhance corporate governance, including by maintaining high ethical standards among all management andstaff members and ensuring the active disclosure of corporate activities.

Corporate governance structural diagram

Risk Management

Annual General Meeting of Shareholders
Board ofCorporate Auditors

Risk management measures

Board of Directors

Standing
Corporate Auditors

Chairman

Non-Standing Directors

President

Non-Standing
Corporate Auditors

Deputy President
Senior Managing Directors

Office of Corporate
Auditors

Independent Auditors

Managing Directors
Board ofManaging Directors

Internal Auditing Division

The operating environment surrounding financial institutions has been changing, and banks consequently face
increasingly diverse and complex risks.
To secure a steady earnings stream into the future, it is therefore essential for the Bank to accurately monitor and measure the various risks involved in conducting its banking operations and then to continuously manage those risks.
The risks the Bank faces are broadly grouped into risk categories, such as credit risk, market risk, liquidity
risk and operational risk, and are managed accordingly. Based on integrated risk monitoring and analysis, theBank’s ALM Committee and Risk Management Committee assess the possible impact of those risks on the Bank’s
operations and formulate countermeasures.
The Bank allocates capital to ensure sound banking operations and the effective use of capital.

Directors

Advise and report
Nomination andRemuneration Advisory
Committee

Compliance Committee
Risk Management Committee

Head Office Divisions
All Branches

58

THE YAMANASHI CHUO BANK 2023

Group Companies

59

Business Foundation in Support of Value Creation

Compliance and Customer Protection
Compliance – Initiatives to protect customers

Basic policy on the prevention of money laundering and terrorist financing

For compliance, we believe that our duty is not only to abide by the law, but also to ensure our strict observance of a wide range of social rules, including social norms and corporate ethics, to meet the demands and expectations of the broader community as a corporate citizen. In other words, complianceentails adapting skillfully to changes in society as we strive to ensure the protection of customer rights
and the enhancement of convenience.
The Bank has positioned compliance as one of its top management priorities. In order to maintainand further solidify our relationships of trust with our customers, we are working to establish and bolster
our compliance framework, centered on the Compliance Committee. In addition, the Bank has appointed
a Compliance Officer in each Head Office division and in all branches. Compliance Officers advance compliance initiatives in their respective workplaces.
Specifically, we formulate a Compliance Program each fiscal year, which serves as an action plan forachieving compliance. The Compliance Program details specific measures for compliance with laws andregulations, as well as compliance training plans and other content, and each Head Office division andbranch works together to execute the program.
We have also created a Compliance Manual that serves as a handbook for achieving compliance.
The Compliance Manual explains our management philosophy of “Keeping Close Ties with the Local Community and Ensuring Sound Management,” as well as the Nine Principles of Compliance that are
based on corporate ethics and social norms, along with explaining finance-related laws and regulations,among other topics. This Compliance Manual highlights the importance of compliance.
In response to societal demands, the Bank has included clauses to exclude organized crime groups
in various agreements and transaction provisions in order to further strengthen our efforts to block relationships with anti-social forces such as organized crime groups.
Going forward, the Bank will continue to further strengthen its compliance framework.

The Group sees the prevention of money laundering and terrorist financing (hereinafter, “ML/TF”) as a top management priority. Accordingly, the Group has developed and established an effective management frameworkand is implementing measures to prevent ML/TF as follows.

1. Compliance with relevant laws, regulations, andother rules
The Group will comply with all applicable laws and regulations, policies and other rules concerning the prevention of
ML/TF.

2. Development of systems
The Group will clearly define the roles and responsibilities ofmanagers and staff members involved in Anti-Money Laundering/Counter Financing of Terrorism (hereinafter, “AML/
CFT”). Integrated management of AML/CFT will be carriedout with the appropriate cooperation of all the relevant departments.

3. Risk-based approach
In accordance with a risk-based approach, the Group will
identify and evaluate in a timely and accurate manner the
ML/TF risks it faces and implement mitigation measures commensurate with those risks.

4. Suspicious transaction reports
The Group will develop a framework for swiftly reporting to
the regulatory authorities any suspicious transactions it detects in the course of its operations.

Nine Principles of Compliance(Corporate Ethics)

60

1

Fulfill the public mission of
banks

2

Provide high-quality
financial services

3

Strict compliance with laws,
regulations and other rules

4Society andcommunication

5

Respect for human rights

6

Workstyle reforms and enhancementof the workplace environment for
management and employees

7

Activities to tackle
environmental problems

8

Contribute to social
inclusion and development

9

Take steps to mitigate threats, such as
by severing any ties with anti-social
forces and countering terrorist financing

THE YAMANASHI CHUO BANK 2023

5. Management of correspondent banks
The Group will strive to gather information on correspondentbanks, appropriately evaluate such information, and implement mitigation measures in line with the risks. In the eventthat the correspondent bank is a shell bank or it has permitted a shell bank to use its account, the Group will not conclude or maintain a correspondent agreement with thatbank.

6. Education and training
The Group will continuously provide the necessary and appropriate training and other educational activities to all executives and employees according to their roles, thereby enhancing their abilities and deepening their understanding of
measures to prevent ML/TF across the entire organization.
Concurrently, the Group as a whole will foster a corporate culture that resolutely deals with ML/TF.

7. Internal audit
The independent Internal Auditing Division will conduct regular audits of the framework to prevent ML/TF. Based on theaudit results, the Group will strive to further enhance thisframework.

61

Business Foundation in Support of Value Creation

Board of Directors and Corporate Auditors

As of July 1, 2023

Skills matrix of members composing the Board of Directors
Directors

For this matrix, the skills that the Board of Directors should have were selected based on the Bank’s management philosophy of “Keeping Close Ties with the Local Community and Ensuring Sound Management” and materiality. The Bank’s Board of Directors is composed of members with diverse skills and expertise.
Representative Director andChairman

Mitsuyoshi Seki

Representative Director andPresident

Yoshiaki Furuya

Representative Director andSenior Managing Director

Masahiko
Yamadera

Corporate
management

Name (Attribution)

Human
DigitalFinancial
Revitalizing
resources Legal and risk
transformation Sales and
and
local
management(DX)andconsulting
strategy andaccounting
economies
systems
diversity

Corporate
screeningandresearch

Capitalmarketinvestment

Finance(Outside
officers only)

Mitsuyoshi Seki
Yoshiaki Furuya
Managing Director
Responsible for the Regional
Head Office, sales management,
consulting sales, Tokyo businessdevelopment, and regional
revitalization promotion

Norihiko Tanaka

Hideki Sato

Tetsuya Naito

Masahiko Yamadera
Norihiko Tanaka

Directors

Managing Director
Responsible for corporate
planning, general affairs, andthe international market

Managing Director
Responsible for credit
screening, generaladministration,systems administration,and business support

Hideki Sato
Tetsuya Naito
Michio Masukawa Outside

MichioMasukawa

Outside Director

Outside Director

Riyo Kano

Miki Ichikawa

Corporate auditors

Outside Director

Riyo Kano

OutsideMiki Ichikawa

OutsideAkira Omata
Kimihiro Asai
Kouichiro Horiuchi Outside
Yoshiyuki Nagahara Outside
Minako Mizutani

Outside* The above matrix does not represent all the expertise and experience that each person has. Based on each person’s experience, etc., foreach person up to four areas are listed in which they are expected to demonstrate their particular expertise.

Corporate auditors<Relationship between management philosophy and materiality and skill items>
Management philosophy
Materiality, themes, etc.

Non-standing Corporate
AuditorStanding Corporate Auditor

Standing Corporate Auditor

Akira Omata

Kimihiro Asai

Yoshiyuki
Nagahara

Non-standing Corporate
AuditorMinako Mizutani

E

Materiality

Non-standing Corporate
AuditorKouichiro
HoriuchiS

G

Maintenance of a richnatural environment andpassing it on to the future• CO2 reduction initiatives to help
achieve decarbonization• Realization of next-generation clean
energyStrengthening of various
relationships and increasing
regional economic activity• Declining birthrate, aging population,and decrease in population• Sustainable growth of regional
companies• Regional innovation

Realization of digitaltransformation (DX) and thedigitalization of regionalsociety• Internal digital transformation (DX)• Digitalization of the whole ofregional society

Creation of common value
through high-quality UI/UX• Changes in customers’ banking
patterns and needs• Access to finance• Product and service quality

Creation of organizations to
support the growth andsuccess of various humanresources• Human resource development• Diversity, Equity & Inclusion• Job satisfaction and workstylereforms

Strengthening of corporate
governance andcompliance• Governance and internal control• Compliance and corporate ethics• Risk management

Skill items
Revitalizing
Corporate
local
management
economies

Human
DigitalCorporate
Capitalresources Legal and risk Financial and transformation Sales andscreening andmarketstrategy and management accounting(DX) and
consulting
research
investment
diversity
systems

Finance(Outside officers
only)

The Yamanashi Chuo Bank’s management philosophy of “Keeping Close Ties with the Local Community andEnsuring Sound Management” is relevant to all skill items.

* Details of the materiality to be considered by the Bank can be found on page 12.

62

THE YAMANASHI CHUO BANK 2023

63

Business Foundation in Support of Value Creation

Organization Chart

As of July 1, 2023

Consolidated subsidiaries

Annual General Meeting of Shareholders
Name of the company
Board of Corporate Auditors

Date of establishment

Board of Directors

Standing
Corporate Auditors
Non-Standing
Corporate Auditors

Address

Paid-in capitalLines of business(Millions of yen)

Percentage of voting
rights owned (orindirectly held) by
Yamanashi Chuo Bank(%)

Yamanashi Chuo Guarantee Co., Ltd.

<Board of Managing Directors>

July 1, 1986

Kofu,
Yamanashi

20

Loan guarantees, etc.

100.0
(−)

Kofu,
Yamanashi

20

Leasing operations, etc.

80.0
(30.7)

Kofu,
Yamanashi

20

Credit card operations, etc.

67.5
(37.2)

Kofu,
Yamanashi

100

General consulting services,
venture capital services, etc.

87.5
(42.5)

Chairman
Yamanashi Chugin Lease Co., Ltd.

President

April 6, 1987

Directors

Managing
Directors

Senior Managing
Directors

Advise Report

Deputy President
Non-Standing
Directors

Nomination andRemuneration Advisory
Committee

Yamanashi Chugin DC Card Co., Ltd.
July 2, 1991
Yamanashi Chugin Management Consulting
Co., Ltd.
August 2, 1996

Corporate data (as of March 31, 2023)
Auditing

Administration Management

Sales

Market Credit Risk Management

Corporate Planning Division

Human Resources Division

General Affairs DivisionCorporate Planning Section
DX and Innovation Promotion OfficePublic Relations and Sustainability Promotion Office

Budget Section
ALM and Profit Strategy Section

Personnel and Welfare Section
Human Resources Development Section
Health Management Office

General Affairs Section
Administration and Finance Section

Integrated Risk Management Section
Legal Affairs and Compliance Section
Customer Service Office

Credit Screening Planning Section
Credit Operations Support Office
Screening Section
Enterprise Support Section
Loan Management OfficeMarket Planning Section
Market Operations Section
Market Administration Section

Head Office Sales Division
Branches
Sub-Branches

Sales Strategy Office
Sales Promotion Planning OfficeDirect Channel Office

Tokyo Business Development OfficeConsultation Sales Office
Structured Finance OfficeLife Planning Support Office
Square Sales Office

Yamanashi Future Creation OfficePublic Affairs Promotion Office

Administration Control Section
Loan Administration Section
Financial Instruments Administration Section
Administration Support Section
Zero Clerical Work Promotion Section

System Planning Section
System Development Section
System Operation Section

Business Support Planning Section
Central Operations Section
Cash Operations Section
Loan Center Operations Section

Audit Planning Section
Head Office Auditing Section
Branch Auditing Section

Direct Marketing Center

Management Control Division

Credit Screening DivisionInternational Market Division

Six Regional Head Offices

Sales Management Division

Consultation Sales DivisionTokyo Business Development Division

Regional Revitalization Promotion Division

General Administration Control Division

Systems Administration Division

Business Support DivisionTokyo Liaison OfficeSecretariat

Auditing Division

Office of Corporate Auditors

Life SquareManagement Strategy

Financial Museum

Internet Mt Fuji Branch

Yamanashi Chuo
Guarantee Co., Ltd.

64

THE YAMANASHI CHUO BANK 2023

Yamanashi Chugin Lease Co., Ltd.

Yamanashi Chugin
DC Card Co., Ltd.

Yamanashi Chugin Management
Consulting Co., Ltd.

Common Stock : ¥15,400 million
Number of Shares :Authorized 79,600,000 shares
Issued		 32,783,000 shares
Number of: 6,583
Stockholders
Stock Listing:	Prime Market of the Tokyo Stock
Exchange
Transfer Agent: Mitsubishi UFJ Trust & Banking
Corporation

Breakdown of Stockholders Financial institutions

104,685 32.05%

Total

 Securities companies

8,180

326,669

 Other corporations

64,254 19.67%

 Foreigners

33,066 10.12%

shares2.50%

 Individuals and others 116,484 35.66%* Shares (1 trading unit: 100 shares)
Note: The category “Individuals and others” contains treasury stock of 16,627 trading units ofshares.

Major Stockholders
Number of shares held
(thousands)

Percentage of all sharesissued (%)

The Master Trust Bank of Japan, Ltd. (Trustee Account)

2,846

9.14

The Yamanashi Chuo Bank, Ltd. Employees’ Stockholdings

1,368

4.39

Meiji Yasuda Life Insurance Company

1,168

3.75

Custody Bank of Japan, Ltd. (Trustee Account)

803

2.58

Teikyo University

629

2.02

Fukoku Mutual Life Insurance Company

600

1.92

MUFG Bank, Ltd.

537

1.72

FUJI KYUKO CO., LTD.

531

1.70

Tokio Marine & Nichido Fire Insurance Co., Ltd.

501

1.61

Daishi Hokuetsu Bank, Ltd.

439

1.41

9,425

30.28

Name

(Standing proxy: Custody Bank of Japan, Ltd.)(Standing proxy: Custody Bank of Japan, Ltd.)(Standing proxy: The Master Trust Bank of Japan, Ltd.)

Total

65

Financial Review[Consolidated Financial Statements]
1) [Consolidated Balance Sheets](on a consolidated basis)

Overview of Financial Position

ment securities of ¥583.0 billion, which was partly offset by thepurchase of investment securities of ¥277.8 billion.

The Bank’s financial position as of March 31, 2023 was as follows.
Deposits stood at ¥3,499.9 billion as of March 31, 2023, up ¥40.6
billion from a year earlier due to increases in individual and corporate fund deposits. Total deposits, including negotiable certificatesof de-posit (NCDs), rose ¥37.9 billion from a year ago to ¥3,547.6
billion as of the fiscal year-end. Loans and bills discounted increasedby ¥241.6 billion from a year earlier to ¥2,290.6 billion as of the
fiscal year-end. This increase was mainly due to increases in loans
to individuals and enterprises. Securities stood at ¥1,093.8 billion
as of the fiscal year-end, down ¥320.7 billion from a year ago. Thisdecrease was due to the decrease in Japanese government bonds
and foreign bonds.

Cash flow from financing activities

Overview of Operating Results
In terms of the operating results for the fiscal year ended March 31,
2023, interest income (the balance of interest income and expenses)
increased by ¥3,487 million year on year, due mainly to increases ininterest on loans and bills discounted as well as interest and dividends on securities. Fees and commissions (the balance of fee andcommission income and expenses) increased by ¥321 million year on
year, mainly due to an increase in commission revenue from the saleof insurance and other products in agency business. Other operating income (the balance of other operating income and expenses)
declined by ¥6,685 million year on year, mainly reflecting a decreasein Japanese government bonds and other bond transactions. Generaland administrative expenses decreased by ¥786 million year on year.
Credit-related expenses increased by ¥626 million year on year, while
equity share and similar transactions increased by ¥4,174 million year
on year. As a result, ordinary profit increased by ¥1,097 million year on
year to ¥7,721 million.
The balance of extraordinary income and losses increasedby ¥611 million year on year. Total income taxes increased by ¥910
million year on year. As a result of the above, profit attributable toshareholders of the parent was up by ¥820 million year on year to¥5,061 million.

Cash flows from investing activities
Net cash used in investing activities totaled ¥297.5 billion (comparedwith a net outflow of ¥112.0 billion in the previous year). The mainuse of cash was proceeds from sales and the redemption of invest-

(%)

0.8

¥896,640$6,714,900

-

1,360

10,187

Monetary claims bought

14,30917,117

128,192

Money held in trust

5,000

10,47578,454

Securities*1, *2, *4, *9

1,414,602

1,093,881

8,192,032

Loans and bills discounted*2, *3, *4, *6

2,049,047

2,290,653

17,154,599

Foreign exchanges*2, *3

5,938

2,634

19,731Other assets*2, *4, *5

55,682

31,816238,272

Tangible fixed assets*7, *8

22,021

21,713

162,611

Buildings

8,752

8,315

62,271Land

10,867

11,096

83,098

1

-

-

2,400

2,302

17,241

3,033

3,608

27,022

2,266

2,062

15,448

Software in progress

500

1,280

9,591

Other intangible fixed assets

266

264

1,982

8,361

9,869

73,913900

5,892

44,126

7,087

7,361

55,128(11,707)(12,567)(94,116)¥4,469,779¥4,380,458$32,805,049

Management’s Analysis and Discussion of Operating
Results

Call loans and bills bought

The following is a summary of our analysis and a discussion of theGroup’s operating results for the fiscal year ended March 31, 2023.
Forward-looking statements contained herein are based on
our judgment as of the end of the fiscal year ended March 31, 2023.
Since the Group has only one reportable segment,“Banking,” analysis and discussion by segment are not provided.

1) Financial Position

Capital adequacy ratio(Domestic standard)

ROA
(%)

¥895,501

Cash and due from banks

In terms of operating results for the fiscal year ended March 31,
2023, profit attributable to shareholders of the parent increased by¥820 million year on year to ¥5,061 million. The main contributing
factors were an increase in interest on loans and bills discounted, anincrease in interest and dividends on securities due to higher yields
on securities, and an increase in fees and commissions, despite adecrease in Japanese government bonds and other bond transactions. In addition, the Bank’s non-consolidated profit from services
for customers returned to profitability for the first time in 13 years.
The Bank of Japan’s negative interest rate policy will keep
the current low interest rate environment unchanged. Under these
conditions, the Bank will establish a sustainable earnings structure
by strengthening and expanding its consulting functions.
Looking at investments in securities, the Bank faces a challenging investment environment. In response, the Bank will work
to raise the sophistication of its investments under appropriate risk
management while improving the soundness of its portfolio.
In addition, the Bank will work to improve customer convenience through initiatives aimed at eliminating clerical work atsales branches, which are centered on simplification, centralization,and systemization, while improving productivity by reallocating its
management resources.

Net cash used by operating activities amounted to ¥293.8 billion yen(compared with a net inflow of ¥267.9 billion in the previous year).
The main contributing factors were a net increase in loans and bills
discounted of ¥241.6 billion and a net decrease in borrowed moneyof ¥170.4 billion, despite a net increase in deposits of ¥37.9 billion
and a net increase in payables under securities lending transactionsof ¥64.2 billion.

End of FY2022(March 31, 2023)

Assets:2) Operating Results

Cash Flows
Cash flows from operating activities

End of FY2022(March 31, 2023)

End of FY2021(March 31, 2022)

Net cash used in financing activities was ¥2.6 billion (compared witha net outflow of ¥1.1 billion in the previous year). Cash was usedmainly to pay dividends of ¥1.3 billion and purchase treasury stockof ¥1.0 billion.
As a result, cash and cash equivalents at the end of the fiscal
year came to ¥896.2 billion (up ¥1.0 billion from the previous year).

The Bank’s financial position as of March 31, 2023 was as follows.
Total deposits including negotiable certificates of deposit (NCDs)
increased by ¥37.9 billion from a year earlier, and loans and bills
discounted increased by ¥241.6 billion from a year earlier, as both
performed favorably. Securities decreased by ¥320.7 billion during
the fiscal year due to the sale of Japanese government bonds andforeign bonds.

18.0

Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software

Net defined benefit asset
Deferred tax assets
Customers’ liabilities for acceptances andguarantees*2
Allowance for possible loan losses

OHR
(%)

Total assets

90.0

Thousands of
U.S. Dollars

Millions of Yen

15.0

0.6

80.0
12.0

0.4

70.0
9.0

0.2

5.0

0.0
March 31

60.0

0.0

2019

2020

2021

2022

2023

March 31

2019

2020

2021

2022

2023

March 31

2019

2020

2021

2022

2023

ROA = Core net business profit / (Average balance of total assets – Average balance of customers’ liabilities for acceptances & guarantees)
Capital adequacy ratio = Domestic standard (on a consolidated basis) OHR = Operating expenses / Core gross business profit
Notes: 1 . All except for the capital adequacy ratio are on a non-consolidated basis.
2. Similar changes have been made to fiscal year ended March 31, 2022 only to reflect the revisions to presentation method of ROA and OHR in fiscal year ended March 31, 2023.

66

THE YAMANASHI CHUO BANK 2023

67

Thousands of
U.S. Dollars

Millions of Yen
End of FY2021(March 31, 2022)

End of FY2022(March 31, 2023)

2) [Consolidated Statements of Income and Consolidated Statements of Comprehensive Income]End of FY2022(March 31, 2023)[Consolidated Statements of Income]¥3,459,276¥3,499,929$26,210,812

Negotiable certificates of deposit

50,42447,723357,398

Payables under securities lending transactions*470,969135,184

1,012,391

Borrowed money*4, *5

629,080

458,677

3,435,015

984

369

2,769

Other liabilities

33,70635,260264,066

Provision for bonuses

1,635

1,758

13,173

Accrued bonuses to directors and corporate
auditors

30

27

204

Reserve for directors’ and corporate auditors’
retirement benefits

11

11

87

Reserve for reimbursement of deposits

202

272

2,038

Reserve for contingent losses

121

152

1,145

Deferred tax liabilities

4,754

464

3,480

Acceptances and guarantees

7,087

7,361

55,1284,258,285

4,187,194

31,357,705

Deposits*4

Foreign exchanges

Total liabilities
Net assets:

FY2021(From April 1, 2021
to March 31, 2022)

FY2022(From April 1, 2022
to March 31, 2023)

FY2022(From April 1, 2022
to March 31, 2023)

Ordinary income:¥46,310¥60,552$453,472

Interest and dividends income

27,77432,358242,329

Interest on loans and bills discounted

16,945

18,913

141,646

Interest and dividends on securities

9,754

12,527

93,8161

47356Interest on due from banks

972

747

5,595

Other

100

122

916

Fees and commissions

10,602

10,94982,004

Other operating income

4,711

10,21676,508Other ordinary income

3,221

7,027

52,631

3,221

7,027

52,631

Ordinary expenses

39,686

52,830395,647

Interest expenses

370

1,466

10,982

296

262

1,966

3

3

24

Call money and bills sold

(12)

(55)

(414)

Payables under securities lending transactions

75

1,245

9,330

Borrowed money

6

10

78

Other

(0)

(0)

(2)

Interest on call loans and bills bought

Other*1

Deposits

Common stock

15,40015,400115,330

Capital surplus

8,398

8,871

66,435170,037

173,753

1,301,232(1,163)(2,116)(15,852)

Total shareholders’ equity

192,673

195,907

1,467,145

Unrealized gains on available-for-sale securities

17,257(4,065)(30,447)

Fees and commissions

2,377

2,403

18,002Remeasurements of defined benefit plans(1,583)(1,075)(8,057)

Other operating expenses

9,135

21,326

159,711

Total accumulated other comprehensive income

15,674(5,141)(38,505)

General and administrative expenses*2

26,67925,892

193,908

109

109

823

Other expenses

1,123

1,741

13,043

3,036

2,387

17,880

Provision of allowance for possible loan losses

490

1,009

7,563

211,494

193,263

1,447,343

Other expenses*3

633

731

5,481

¥4,469,779¥4,380,458$32,805,049

6,624

7,721

57,825Retained earnings
Treasury stock

Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

68

Thousands of
U.S. Dollars

Millions of Yen

Liabilities:

THE YAMANASHI CHUO BANK 2023

Negotiable certificates deposits

Ordinary profit

69

Thousands of
U.S. Dollars

Millions of Yen
FY2021(From April 1, 2021
to March 31, 2022)

FY2022(From April 1, 2022
to March 31, 2023)

FY2022(From April 1, 2022
to March 31, 2023)

42

84

636

42

84

636

645

75

569

Losses on disposal of fixed assets

232

72

539

Impairment losses*4

413

3

30

Income before income taxes and non-controllinginterests

6,021

7,730

57,892

Income taxes – current

1,484

2,613

19,570

Income taxes – deferred

143

(74)

(557)

Total income taxes

1,627

2,538

19,013

4,393

5,191

38,880

Profit attributable to non-controlling interests

152

129

972

Profit attributable to shareholders of the parent¥4,241¥5,061$37,907

Extraordinary income:Gain on disposal of fixed assets
Extraordinary losses

Profit70[Consolidated Statements of Comprehensive Income]

THE YAMANASHI CHUO BANK 2023

Thousands of
U.S. Dollars

Millions of Yen
FY2021(From April 1, 2021
to March 31, 2022)

FY2022(From April 1, 2022
to March 31, 2023)

FY2022(From April 1, 2022
to March 31, 2023)

Profit¥4,393¥5,191$38,880

Other comprehensive income*1(13,261)(20,828)(155,984)(13,007)(21,335)(159,783)

Deferred gains or losses on hedges

(182)

-

-

Remeasurements of defined benefit plans

(71)

507

3,799

¥(8,867)¥(15,637)$(117,105)

Total comprehensive income attributable toshareholders of the parent¥(9,150)¥(15,754)$(117,982)

Total comprehensive income attributable tonon-controlling interests

282

117

877

Net unrealized gains on available-for-salesecurities

Total comprehensive income

71Millions of Yen

3) [Consolidated Statements of Changes in Net Assets]

Shareholders’ equity

Millions of Yen
Shareholders’ equity
FY2021 (From April 1, 2021
to March 31, 2022)

Commonstock

Balance at beginning ofcurrent year

¥15,400

Capitalsurplus¥8,398Retainedearnings

Treasurystock¥166,943

Total
shareholders’equity¥(1,263)

Changes during year:(1,117)(1,117)

Profit attributable toshareholders of the parent

4,241

4,241

Purchases of treasury stock
Disposals of treasury stock

(28)

(0)

(0)

100

71

28

Balance at end of current year

¥15,400

—

—

3,094

99

3,194

¥15,400¥8,398¥170,037¥(1,163)¥192,673

Balance at beginning ofcurrent year

¥30,395¥182

Profit attributable toshareholders of the parent

5,061

5,061
(1,000)(1,000)46

42

Disposals of treasury stock(4)

Change in ownershipinterest of parent due totransactions with noncontrolling interests

472

Transfer from retained
earnings to capital surplus

4

(4)

—

472

3,715

(953)

3,234

¥15,400¥8,871¥173,753¥(2,116)¥195,907

472

Millions of Yen¥29,066¥138

Noncontrollinginterests¥2,755

Total net
assets

FY2022 (From April 1, 2022
to March 31, 2023)
Balance at beginning ofcurrent year

¥221,439

Changes during year:

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges¥17,257—

Total
Subscription
Remeasureaccumulated
rights toments ofothersharesdefined benefit
comprehensive
plansincome¥(1,583)¥15,674¥109

Noncontrollinginterests¥3,036

Total net
assets¥211,494

Changes during year:
Cash dividends(1,341)

Cash dividends(1,117)

Profit attributable toshareholders of the parent

5,061

Profit attributable toshareholders of the parent

4,241

Purchases of treasury stock(1,000)Purchases of treasury stock(0)

Disposals of treasury stock

42

Disposals of treasury stock

71

Change in ownershipinterest of parent due totransactions with noncontrolling interests

472

Change in ownershipinterest of parent due totransactions with noncontrolling interests

Transfer from retained
earnings to capital surplus

Transfer from retained
earnings to capital surplus
Net changes in items otherthan shareholders’ equity

72¥192,673

Accumulated other comprehensive income

Total
Subscription
Remeasureaccumulated
rights toments ofothersharesdefined benefit
comprehensive
plansincome¥(1,511)¥(1,163)(1,341)

Balance at end of current year

Accumulated other comprehensive income
Deferred gains
or losses onhedges¥170,037

Total
shareholders’equity(1,341)

Total changes during year

Valuationdifference on
available-forsale securities¥8,398Treasurystock

Cash dividends

Millions of Yen

FY2021 (From April 1, 2021
to March 31, 2022)

Retainedearnings

Net changes in items otherthan shareholders’ equity(28)

Net changes in items otherthan shareholders’ equity
Total changes during year

Balance at beginning ofcurrent year

CapitalsurplusPurchases of treasury stock

Change in ownershipinterest of parent due totransactions with noncontrolling interests
Transfer from retained
earnings to capital surplus

Commonstock

Changes during year:¥189,479

Cash dividends

FY2022 (From April 1, 2022
to March 31, 2023)

Net changes in items otherthan shareholders’ equity(21,323)507(20,815)(648)(21,464)(13,137)

(182)

(71)

(13,391)

(29)

280

(13,140)

Total changes during year

(21,323)—507(20,815)—(648)(18,230)

Total changes during year

(13,137)

(182)

(71)

(13,391)

(29)

280

(9,945)

Balance at end of current year¥(4,065)—¥(1,075)¥(5,141)¥109¥2,387¥193,263

Balance at end of current year

¥17,257—¥(1,583)¥15,674¥109¥3,036¥211,494

THE YAMANASHI CHUO BANK 2023

73

Thousands of U.S. Dollars4) [Consolidated Statements of Cash Flows]

Shareholders’ equity
FY2022 (From April 1, 2022
to March 31, 2023)

Commonstock

Capitalsurplus

Balance at beginning ofcurrent year

$115,330$62,899 $1,273,406

Retainedearnings

Treasury
stock

Total
shareholders’equity(10,049)(10,049)

Profit attributable toshareholders of the parent

37,90737,907Purchases of treasury stock
Disposals of treasury stock(32)

Change in ownershipinterest of parent due totransactions with noncontrolling interests

3,536Transfer from retained
earnings to capital surplus

32(7,490)(7,490)¥7,730$57,892

1,904

1,800

13,487349

317

Impairment losses

413

3

30

Increase (decrease) in allowance forpossible loan losses

167

859

6,438

Increase (decrease) in provision for bonuses

604

123

923

Increase (decrease) in accrued bonuses todirectors and corporate auditors

(3)

(3)

(26)

Decrease (increase) in net defined benefit
asset(1,419)(1,507)(11,293)

4

(0)

(2)

Increase (decrease) in reserve forreimbursement of deposits

(45)

69

522

Increase (decrease) in reserve forcontingent losses

(10)

31

237

(27,774)(32,358)(242,329)

370

1,466

10,982Losses (gains) on investment securities

2,743

2,899

21,715Losses (gains) on investments in money
held in trust

(157)

149

1,120

Foreign exchange losses (gains) – net(14,156)(18,276)(136,874)

189

(12)

(96)

Net decrease (increase) in loans and bills
discounted(62,914)(241,605)(1,809,376)

Net increase (decrease) in deposits

70,04940,653

304,452

Net increase (decrease) in negotiablecertificates of deposit

2,062(2,700)(20,227)

Net increase (decrease) in borrowed money

168,249(170,403)(1,276,143)

Net decrease (increase) in due from banks(excluding cash equivalents)

(105)

(88)

(661)

Net decrease (increase) in call loans

13,743(4,168)(31,215)

Net increase (decrease) in payables under
securities lending transactions

58,75464,214

480,902

Net decrease (increase) in foreignexchanges (assets)(2,308)3,304

24,744

Depreciation and amortization

3,536
(32)

—

3,536

27,826$115,330$66,435$1,301,232(7,142)

24,221

Increase (decrease) in reserve for directors’
and corporate auditors’ retirement benefits$(15,852) $1,467,145

Accumulated other comprehensive income
FY2022 (From April 1, 2022
to March 31, 2023)

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesBalance at beginning ofcurrent year

$129,240—

Total
Subscription
Remeasureaccumulated
rights toments ofothersharesdefined benefit
comprehensive
plansincome$(11,856)$117,384$823

Noncontrollinginterests

Total net
assets$22,738 $1,583,870

Changes during year:
Cash dividends(10,049)

Profit attributable toshareholders of the parent

37,907Purchases of treasury stock(7,490)

Disposals of treasury stock

317

Change in ownershipinterest of parent due totransactions with noncontrolling interests

3,536Transfer from retained
earnings to capital surplus(159,688)

3,799(155,889)

Total changes during year

(159,688)

—

3,799

(155,889)—

Balance at end of current year$(30,447)—$(8,057)$(38,505)$823

THE YAMANASHI CHUO BANK 2023

¥6,021

Adjustment for:Thousands of U.S. Dollars

74

FY2022(From April 1, 2022
to March 31, 2023)

Income before income taxes and noncontrolling interests

Net changes in items otherthan shareholders’ equity

Net changes in items otherthan shareholders’ equity

FY2022(From April 1, 2022
to March 31, 2023)

Operating activities:

Cash dividends

Balance at end of current year

FY2021(From April 1, 2021
to March 31, 2022).

$(8,711) $1,442,925

Changes during year:

Total changes during year

Thousands of
U.S. Dollars

Millions of Yen(4,859)(160,747)(4,859)(136,527)$17,880 $1,447,343

Interest income recognized on consolidated
statements of income
Interest expenses recognized on
consolidated statements of income

Losses (gains) on disposal of premises andequipment75

Thousands of
U.S. Dollars

Millions of Yen[Notes to Consolidated Financial Statements]

FY2021(From April 1, 2021
to March 31, 2022)

FY2022(From April 1, 2022
to March 31, 2023)

FY2022(From April 1, 2022
to March 31, 2023)

908

(614)

(4,601)

Net increase (decrease) in central clearing
counterparty margin requirement

20,00023,000172,246

Interest income (cash basis)

28,56633,155248,298

Interest expenses (cash basis)(387)(1,475)(11,054)

Other – net

4,320

1,738

13,016

269,791(292,015)(2,186,891)(1,812)(1,859)(13,927)

267,979(293,875)(2,200,818).
Net increase (decrease) in foreignexchanges (liabilities)

Total adjustments
Income taxes paid
Net cash provided by (used in) operating
activities

Purchases of investment securities(553,605)(277,802)(2,080,449)

Proceeds from sales of investment securities

338,476

458,604

3,434,471

Proceeds from redemption of investment
securities

104,444

124,411

931,711

Increase of money held in trust—(5,632)(42,181)

Proceeds from decrease of money held in trust

152

0

2

Purchases of premises and equipment(1,039)(820)(6,145)

Proceeds from sales of premises andequipment

119

185

1,390

Purchases of intangible fixed assets(616)(1,384)(10,365)(112,069)

297,5622,228,434(1) Number of consolidated subsidiaries 4 companies
The names of consolidated subsidiaries are Yamanashi Chuo Guarantee Co., Ltd., Yamanashi Chugin Lease Co.,
Ltd., Yamanashi Chugin DC Card Co., Ltd. and Yamanashi Chugin Management Consulting Co., Ltd.
(2) Number of non-consolidated subsidiaries 4 companies
Yamanashi New Business Support Investment Limited Partnership
Yamanashi Sixth Industrialization Support Investment Limited Partnership
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership
Yamanashi Chuo Bank SDGs Investment Limited Partnership
Non-consolidated subsidiaries are excluded from the scope of consolidation since their assets, ordinary income, andour ownership percentage of their net income and retained earnings do not have a material impact on our results ofoperations and financial condition.

(1) Non-consolidated subsidiaries accounted for by the equity method
Not applicable(2) Affiliates accounted for by the equity method
Not applicable(3) Number of non-consolidated subsidiaries not accounted for by the equity method 4 companies
Yamanashi New Business Support Investment Limited Partnership
Yamanashi Sixth Industrialization Support Investment Limited Partnership
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership
Yamanashi Chuo Bank SDGs Investment Limited Partnership
Non-consolidated subsidiaries not accounted for by the equity method are excluded from the scope of the equity
method since our ownership percentage of their net income and retained earnings does not have a material impact
on our consolidated financial statements.
(4) Affiliates accounted for by the equity method
Not applicable

Financing activities:

3. Items relating to business years of consolidated subsidiaries(1,117)(1,341)(10,049)

Payment of dividends to non-controllinginterests

(1)

(1)

(13)

Repurchases of treasury stock(0)(1,000)(7,490)

Proceeds from sales of treasury stock

0

—

—

Purchase of shares of subsidiaries not resulting
in change in scope of consolidation

—

(291)

(2,186)(1,120)(2,635)(19,738)

1) Held-to-maturity debt securities, which management has the positive intent and ability to hold to maturity, are

4

(0)

(7)

securities, which are not classified as either of the aforementioned securities, are reported at fair value (cost of

Net increase (decrease) in cash and cash
equivalents

154,794

1,050

7,870

Cash and cash equivalents, beginning of year

740,447

895,241

6,704,422

Dividends paid

Net cash provided by (used in) used infinancing activities
Foreign currency transaction adjustments on cash
and cash equivalents

Cash and cash equivalents, end of year*176

1. Items relating to scope of consolidation

2. Items relating to application of equity method

Investing activities:

Net cash provided by (used in) investing
activities

Important items used as basis for preparing consolidated financial statements

THE YAMANASHI CHUO BANK 2023

¥895,241¥896,292$6,712,292

All of the consolidated subsidiaries have their settlement day on March 31.

4. Items relating to accounting standards(1) Valuation standards and methods for trading account securities
Trading account securities, which are held for the purpose of earning capital gains, are reported at fair value and therelated unrealized gains and losses are included in earnings.
(2) Valuation standards and methods for securities
reported at amortized cost based on the moving-average method (straight-line method), and available-for-salesecurities sold is computed by the moving-average method). Available-for-sale securities without fair values arestated at cost determined by the moving-average method.
Valuation differences on available-for-sale securities are reported as a separate component of net assets.
2) Securities used as trust assets in individually operated money trusts mainly for investment securities are evaluatedusing fair value measurement.

77

Housing loans withguarantees from theBank’s subsidiary,etc.

(3) Valuation standards and methods for derivative transactions
Derivative transactions are measured at fair value.
(4) Methods of depreciation of fixed assets

Claims on consumers for housing loans
with guarantees offered by Yamanashi
Chuo Guarantee Co., Ltd., aconsolidated subsidiary of the Bank

1) Tangible fixed assets (excluding lease assets)
Depreciation of tangible fixed assets is calculated principally using the declining-balance method. (However, thestraight-line method is adopted for buildings (excluding facilities attached to buildings) that were acquired on or after
April 1, 1998, and for facilities attached to buildings and structures that were acquired on or after April 1, 2016.)
Useful lives of tangible fixed assets are primarily as follows:
Buildings

3 to 50 years

Other

2 to 20 years

Claims other thanthose describedabove

The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over one year and using aprospective loss ratio determined inconsideration of the outlook and other factors.

The depreciation period of lease investment assets held by consolidated subsidiaries and booked as tangible
fixed assets is the lease period, and those leases are depreciated using the straight-line method, with the residual
value being the estimated disposal price at the conclusion of the lease.
2) Intangible fixed assets (excluding lease assets)
Amortization of intangible fixed assets is calculated principally using the straight-line method.

Claims on borrowers
requiring caution

The amortization period of lease investment assets held by consolidated subsidiaries and booked as
intangible fixed assets is the lease period, and those leases are amortized using the straight-line method, with theresidual value being the estimated disposal price at the conclusion of the lease.
Software for internal use by the Bank and its subsidiaries is calculated over the useful life of the software(principally five years).
3) Lease assets
Lease assets employed in leasing transactions that do not transfer ownership of the lease assets to the lessee –both premises and equipment and intangible fixed assets – are depreciated by the straight-line method over theagreement.
(5) Standards for recording the allowance for possible loan losses
The allowance for possible loan losses is recorded in accordance with internally established standards for chargeoffs and provisions, as follows:
All claims undergo a self-assessment of asset quality by the operational departments based on standards for
self-assessment of asset quality. The results of these self-assessments are audited by an asset audit department
independent from the operational departments.

Claims on debtors that require future
caution with respect to supervision, suchas debtors with problematic lending
conditions, debtors that have problems
fulfilling their obligations, debtors facing
poor or unstable business conditions or
debtors with a problematic financial
condition

Claims on borrowers
requiring supervision

Claims on debtors that haverestructured loans or are three or moremonths in arrears

Quasi-equity
loans

Loans that can be handled as equity as
their contract conditions are found tohave sufficient equity-like characteristics
equivalent to equity

The allowance is calculated by estimating theprospective loss amount based on thebankruptcy probabilities according to the residual
period of each claim.

Claims subject tothe discounted
cash flow (DCF)
methodClaims for which cash flows related to
the recovery of loan principal andreceipt of interest can be reasonably
estimated

The allowance is based on the difference
between the present value of the expected future
cash flows discounted at the initial contracted
interest rate and the carrying amount of the claim(DCF method).

Claims on
borrowers
requiringsupervision andsupportClaims on debtors that require business
improvement and corporate
restructuring who fulfill certain
conditions, such as those initiatives
being found to have a high degree of
uncertainty

The allowance is recorded based on aprospective loss amount for the next three years
equivalent to claims on potentially bankrupt
borrowers. The prospective loss amount iscalculated by determining several loss ratios
based on the average value of the actual loan
loss ratio over a certain period in the past basedon the actual loan loss record over three years
for claims on potentially bankrupt borrowers andusing a prospective loss ratio determined inconsideration of the outlook and other factors.

Housing loans
with guarantees
from the Bank’s
subsidiary, etc.

Claims on consumers for housing loans
with guarantees offered by Yamanashi
Chuo Guarantee Co., Ltd., aconsolidated subsidiary of the Bank

The allowance is recorded based on theprospective loss amount for the upcoming three
years. The prospective loss amount is calculated
by determining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over three years and using aprospective loss ratio determined inconsideration of the outlook and other factors.

lease period.
Residual value of those lease assets is zero unless any guaranteed amount is prescribed in the lease

The policy for the allowance for possible loan losses of consolidated subsidiaries is similar to the Bank’s.
Debtor category
Claims on normal
borrowers

Quasi-equity loans

78

Definition

Calculation method for allowancefor possible loan losses

Claims on debtors whose businessresults are favorable and who are found
not to have any particular problems with
their financial condition
Loans that can be handled as equity as
their contract conditions are found tohave sufficient equity-like characteristics
equivalent to equity

THE YAMANASHI CHUO BANK 2023

The allowance is calculated by estimating theprospective loss amount based on thebankruptcy probabilities according to the residual
period of each claim.

The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over one year and using aprospective loss ratio determined inconsideration of the outlook and other factors.

79

Claims otherthan thosedescribed above

The allowance is recorded based on theprospective loss amount for the upcoming three
years. The prospective loss amount is calculated
by determining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over three years and using aprospective loss ratio determined inconsideration of the outlook and other factors.

Claims on otherborrowers requiringcautionClaims on borrowers requiring caution
other than claims on borrowers requiringsupervision

Quasi-equity
loans

Loans that can be handled as equity as
their contract conditions are found tohave sufficient equity-like characteristics
equivalent to equity

The allowance is calculated by estimating theprospective loss amount based on thebankruptcy probabilities according to the residual
period of each claim.

Claims subject tothe discounted
cash flow (DCF)
methodClaims on debtors who have loans
equivalent to restructured loans andloans related to their affiliates, for whichcash flows related to the recovery ofloan principal and receipt of interest canbe reasonably estimated

The allowance is based on the difference
between the present value of the expected future
cash flows discounted at the initial contracted
interest rate and the carrying amount of the claim(DCF method).

Claims on
borrowers
requiringsupervision andsupportClaims on debtors that require business
improvement and corporate
restructuring who fulfill certain
conditions, such as those initiatives
being found to have a high degree of
uncertainty

The allowance is recorded based on theprospective loss amount for the next three years
equivalent to claims on borrowers requiringsupervision. The prospective loss amount iscalculated by determining several loss ratios
based on the average value of the actual loan
loss ratio over a certain period in the past basedon the actual loan loss record over three years
for claims on borrowers requiring supervision andusing a prospective loss ratio determined inconsideration of the outlook and other factors.

Housing loans
with guarantees
from the Bank’s
subsidiary, etc.

Claims on consumers for housing loans
with guarantees offered by Yamanashi
Chuo Guarantee Co., Ltd., aconsolidated subsidiary of the Bank

Claims otherthan thosedescribed above

Claims on potentiallybankrupt borrowers

Effectively bankrupt
borrowers

80

Claims on debtors under the same
circumstances as bankrupt borrowers

THE YAMANASHI CHUO BANK 2023

Claims on debtors who are legallybankrupt based on bankruptcy, special
liquidation, or other proceedings

The allowance is recorded based on theoutstanding balance of the claims after deductionof the amounts expected to be collected throughthe disposal of collateral and the execution ofguarantees.

(6) Provision for bonuses
Provision for bonuses is provided to cover the payment of bonuses to employees, in the amount of the estimatedbonuses payable to employees attributable to each fiscal year.

The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over one year and using aprospective loss ratio determined inconsideration of the outlook and other factors.
The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over one year and using aprospective loss ratio determined inconsideration of the outlook and other factors.

Claims on debtors who are deemed not
to be currently legally bankrupt but arehighly likely to become bankrupt

Legally bankrupt
borrowers

The allowance is recorded in the amountdeemed to be necessary based on acomprehensive assessment of the overall
repayment ability of the debtor. The amountnecessary shall be within the outstandingbalance of the claims after deduction of theamounts expected to be collected through thedisposal of collateral and execution ofguarantees.
The allowance is recorded based on theoutstanding balance of the claims after deductionof the amounts expected to be collected throughthe disposal of collateral and the execution ofguarantees.

(7) Accrued bonuses to directors and corporate auditors
Accrued bonuses to directors and corporate auditors are provided in the amount of the estimated bonuses which are
attributable to each fiscal year.
(8) Reserve for directors’ and corporate auditors’ retirement benefits
A reserve for directors’ and corporate auditors’ retirement benefits is provided at the amount which would be required
if all directors and corporate auditors retired at the balance sheet date.
(9) Reserve for reimbursement of deposits
Provision is made for possible losses on future claims of withdrawal of deposits which were derecognized as liabilities
under certain conditions in an amount deemed necessary based on historical reimbursement experience.
(10) Reserve for contingent losses
Reserve for contingent losses, which is provided for possible losses from contingent events, is calculated byestimation of the impact of those contingent events.
(11) Accounting procedures for retirement benefits
In calculating retirement benefit obligations, the Bank used the benefit formula as the method of attributing theestimated retirement benefits to periods of service to the end of the consolidated fiscal year under review.
In addition, the method of recording expenses for past service costs and actuarial gains and losses are as
follows.
Past service costs: Recognized in profit and loss using the straight-line method over a fixed period (10 years)
within the average remaining service period of employees at the time they occur.
Actuarial gains and losses: Recognized the amount equally divided by using the straight-line method over a
fixed period (10 years) based on the average remaining service period in each consolidated fiscal year in which theyoccur and recorded in profit and loss from each of the following year of the occurrence.
(12) Standards for recording significant revenue and expenses
Revenue from contracts with customers to which the accounting standard for revenue recognition applies isrecognized when (or as) the customer obtains the benefit and the performance obligation (provision of services) is
satisfied.
(13) Foreign currency items
Foreign currency assets and liabilities are translated into yen at the exchange rates prevailing at the balance sheet
date.
(14) Lease transactions(Lessor)
Revenues and cost of revenues of finance lease transactions are recognized when lease payments are made.
(15) Major hedge accounting methods
Interest rate risk and hedges
Hedge accounting method for interest rate risk resulting from financial assets is based on deferred hedges. Hedge
transactions are meant to avoid interest rate risks arising from the financial asset being hedged. Therefore, “micro
hedges,” in which derivative transactions such as individual interest rate swaps are conducted for each transaction,
are performed as a hedging instrument.

81Evaluation of hedge effectiveness is taken as an evaluation of effectiveness when the conditions of the hedge
instrument and hedge object are largely identical.
(16) Cash and cash equivalents(Important Accounting Estimates)
1. Estimates of allowance for possible loan losses(1) Amounts recorded on the consolidated financial statements in the fiscal year ended March 31, 2023

For the purpose of reporting cash flows, cash and cash equivalents are defined as cash and due from the Bank of

From April 1, 2022 to March 31, 2023

Japan.

Allowance for possible loan losses(Millions of yen)
¥12,567(2) Other information to aid the understanding of estimates among individuals using the consolidated financial statements
1) How estimates are calculated
The standards for recording the allowance for possible loan losses are presented in “(5) Standards for recording
the allowance for possible loan losses” under “4. Items relating to accounting standards” in “Notes to Consolidated
Financial Statements (Important items used as a basis for preparing consolidated financial statements).”2) Assumptions used to calculate estimated amounts(A) Assumptions regarding forecasts of debtors’ business results, which are used to determine debtor categories are
set based on information available to the Bank. In particular, for debtors whom the Bank supports in business
improvement, the Bank determines the category of a debtor based on its future prospects, including earnings
projections, the reasonableness and feasibility of its business improvement plan or the prospect of formulating areasonable and feasible business improvement plan (hereinafter “effective business improvement plan”).
Business improvement plans are prepared based on various assumptions and data. The Bank comprehensively
judges the reasonableness and feasibility of those assumptions and data by considering factors such as the
debtor’s financial status, the business environment of the debtor’s industry, the effects of various measures in thebusiness improvement plan, the past record of progress, and the outlook for achieving goals. In cases where thedebtor is in the process of formulating a business improvement plan as of the end of the fiscal year, the Bank
determines the debtor category by assessing the likelihood of the debtor formulating an effective business
improvement plan while taking into consideration the debtor’s willingness to formulate such a plan and theresources available for rebuilding.
(B) The economy has been gradually improving, although the impact of COVID-19 will continue for the time being.
The extensive reach of various COVID-19 countermeasures and the widespread adoption of vaccines are
expected to continue to drive a sustained economic recovery, as the response to the infectious disease becomes
more compatible with socioeconomic activities. In addition, the Bank assumes that the during this period, theeconomic policies by national and local governments, support from financial institutions and other assistance forindustries that have been severely impacted will continue. In the fiscal year ended March 31, 2023, there havebeen no major changes to the assumptions regarding the impact of COVID-19 that were presented in the
consolidated financial statements for the fiscal year ended March 31, 2022 (Important Accounting Estimates).
(C) The Bank assumes that claims on normal borrowers except for quasi-equity loans, claims subject to the DCF
method and claims on borrowers requiring supervision and support will generate similar losses as the claims tonormal borrowers the Bank held in the past. The Bank further assumes that claims on borrowers requiringsupervision will generate similar losses as claims on borrowers requiring supervision the Bank held in the past,and that claims on other borrowers requiring caution will generate similar losses as claims on other borrowers
requiring caution the Bank held in the past. The Bank also assumes that claims on borrowers requiring supervisionand support who are classified as borrowers requiring supervision will generate similar losses as claims on
potentially bankrupt borrowers the Bank held in the past, and that claims on borrowers requiring supervision andsupport who are classified as other borrowers requiring caution will generate similar losses as claims on borrowers
requiring supervision the Bank held in the past.
3) Impact on the consolidated financial statements for the following fiscal year
(A) Forecasts of debtors’ business results, which are used to determine debtor categories may differ from results thatwere initially assumed due to factors such as changes in anticipated events and the external environment. If theforecasts need to be revised, these revisions could have a significant impact on the consolidated financial
statements for the following fiscal year.

82

THE YAMANASHI CHUO BANK 2023

83

(B) The Bank may incur substantial loan losses if COVID-19 infections spread more widely than expected; if thecompatibility of the response to the infectious disease and socioeconomic activities does not work as anticipated;
or if the effects of economic policies of the national and local governments, support from financial institutions andother assistance do not materialize as anticipated. These losses could have a significant impact on the
consolidated financial statements for the following fiscal year.
(C) The Bank assumes that claims except for quasi-equity loans, claims subject to the DCF method and claims on
borrowers requiring supervision and support will generate similar losses as claims on normal borrowers, claims
on borrowers requiring supervision and claims on other borrowers requiring supervision the Bank held in the past.
The Bank further assumes that claims on borrowers requiring supervision and support will generate similar losses
as claims on potentially bankrupt borrowers and claims on borrowers requiring supervision the Bank held in thepast. These assumptions could differ markedly from the actual loss experience due to factors such as changes inthe business environment of debtors. In this case, there could be a significant impact on the consolidated financial
statements for the following fiscal year.

As of March 31, 2023
Distressed claims and equivalents¥9,269Claims with risk

12,653Claims three or more months past due

0

Restructured loans for which the Bank has relaxedlending conditions

4,214

Total

26,138Distressed claims and equivalents represent loans to debtors in bankruptcy procedures including thecommencement of bankruptcy proceedings, reorganization proceedings, rehabilitation proceedings, and other similar
claims.
Claims with risk represent loans other than distressed claims and equivalents for which the debtors have notyet entered into bankruptcy but their financial condition and business performance have deteriorated, and therefore,
it is highly probable that the principal and interest cannot be collected in accordance with the contracts.
Claims three or more months past due represent loans whose principal or interest payments are three or more

(Changes in Accounting Standards)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)

months past due but are not classified as distressed claims and equivalents or claims with risk.

The Bank has adopted the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ

concessions favorable to debtors, including reductions or waivers of interest, deferred payment of principal or interest,

Guidance No. 31, June 17, 2021; hereinafter “Fair Value Measurement Guidance”) for its consolidated financial statements

and debt forgiveness, are granted but are not classified as distressed claims and equivalents, claims with risk, orfrom the beginning of the fiscal year under review, and will prospectively apply the new accounting policies stipulated byclaims three or more months past due.

the Fair Value Measurement Guidance in accordance with the transitional treatment provided in Paragraph 27-2 of the Fair
Value Measurement Guidance. This does not affect the consolidated financial statements.
The Bank does not present notes pertaining to the previous fiscal year on investment trusts in fair value informationby level within the fair value hierarchy in the notes on financial instruments in accordance with Paragraph 27-3 of the Fair
Value Measurement Guidance.

Restructured loans for which the Bank has relaxed lending conditions represent loans on which certain

The above claim amounts are before deducting allowances for possible loan losses.
*3 Bills discounted are accounted for as financial transactions in accordance with JICPA Industry Audit Committee
Report No. 24, March 17, 2022, “Treatment for Accounting and Auditing of Application of Accounting Standard for
Financial Instruments in Banking Industry.” The Bank has the right to sell or pledge commercial bills discounted andforeign exchanges bought without restrictions. The face amount was as follows:
As of March 31, 2023

(Unapplied Accounting Standards, etc.)*4 Assets pledged as collateral were as follows:(1) Overview
This standard stipulates the classification of income taxes when applied to other comprehensive income.
(2) Scheduled adoption date
Scheduled to be adopted from the beginning of the fiscal year ending March 31, 2025.
(3) Impact of adopting revised accounting standards and implementation guidance
The amount of the impact is currently under evaluation.

(Relating to Consolidated Balance Sheets)*1 Shares held or investments in non-consolidated subsidiaries and affiliates
As of March 31, 2023
Investments(Millions of yen)¥733

*2 Claims to be disclosed under the Banking Act and Act on Emergency Measures for the Revitalization of the Financial
Functions are included in the following accounts in the consolidated balance sheet: corporate bonds (limited to those
whose principal and interest are fully or partially secured and issued under private placements as permitted in Article
2, Paragraph 3 of the Financial Instruments and Exchange Act) under “Securities,” loans and bills discounted, foreignexchange, accrued interest, suspense payments under “Other assets,” including customer liability for acceptancesand guarantees.

THE YAMANASHI CHUO BANK 2023

(Millions of yen)
¥3,678• “Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27, October 28, 2022)

84(Millions of yen)

As of March 31, 2023

(Millions of yen)

Assets pledged as collateral
Investment securities¥433,293

Loans and bills discounted

186,822

Liabilities related to pledged assets
Deposits

10,209

Payables under securities lending transactions

135,184

Borrowed money

458,200

Other assets include central clearing counterparty margin requirements and guarantee deposits, the amountsof which are as follows.
As of March 31, 2023
Central clearing counterparty margin requirements(Millions of yen)
¥17,000

Cash collateral paid for financial instruments

480

Guarantee deposits

208*5 Lease contract assets (the total sum of lease investment assets included in Other assets and interest receivables onlease investment assets) for the remaining lease periods, which were pledged as collateral for a portion of borrowed
money, were as follows:
As of March 31, 2023

(Millions of yen)

Lease contract assets¥665

Corresponding borrowed money

477

85

*6 Commitment line contracts on overdrafts and loans are agreements to lend to customers when they apply for

In this method of asset grouping, operating assets as a rule are treated as business premises units (however

borrowing, up to a prescribed amount, as long as there is no violation of any condition established in the contract.

business premises groups that handle combined businesses are treated as Group units), and idle assets are treated

The amounts of unused commitments as of March 31, 2023 were as follows:

as individual asset units. Head Office, computing centers, company residences and dormitories, etc., are regarded

As of March 31, 2023

as shared assets.

(Millions of yen)

Total amount of unused commitments as of theend of the period:

Recoverable amounts are whichever is the higher of net selling prices and value in use. In the case of net¥448,582

Amount of unused commitments whose originalcontract terms were within one year or
unconditionally cancelable at any time

selling prices, the calculation involves deduction of expected disposal expenses from the sum reasonably calculated
by real estate asset valuation, etc. In the case of value in use, the calculation involves discounting future cash flows

413,872

by a discount rate.

Since many of these commitments are expected to expire without being drawn upon, the total amount of unused
commitments does not necessarily represent actual future cash flow requirements. Many of these commitments haveclauses that allow the Bank to withdraw the commitment line offer or reduce the contract amounts in situations where
economic conditions are changed, the Bank needs to secure claims, or other conditions are triggered. In addition, theBank requires the customers to pledge collateral such as premises and securities and takes necessary measures
such as seizing the customers’ financial positions, revising contracts when the need arises and securing claims after
conclusion of the contracts.

2023 represent net selling prices.

(Relating to Consolidated Statements of Comprehensive Income)*1 Reclassification adjustment and tax effect related to comprehensive income
From April 1, 2022 to March 31, 2023
(Millions of yen)
Valuation difference on available-for-sale securities:
Difference arising during the fiscal year

*7 Accumulated depreciation of tangible fixed assets¥(33,067)

Reclassification adjustment to profit and loss

As of March 31, 2023

(Millions of yen)

Total amount of accumulated depreciation

As of March 31, 2023
Deferred gains¥740(Reduction entry amount for the consolidated fiscal year)(—)

Income tax effectFinancial Instruments and Exchange Act, Article 2, Paragraph 3) was as follows:(Millions of yen)

(Relating to Consolidated Statements of Income)*1 “Other ordinary income” includes the following item:(Millions of yen)
¥6,428——Amount before income tax effect—

Income tax effect—Gains or losses on deferred hedges—

Gains (losses) arising during the fiscal year

144

Reclassification adjustment to profit and loss

585

Amount before income tax effect729

Income tax effect(222)

Remeasurements of defined benefit plans

507

Total other comprehensive income*2 “General and administrative expenses” include the following:¥(20,828)(Relating to Consolidated Statements of Changes in Net Assets)
From April 1, 2022 to March 31, 2023
1. Items relating to kind and total number of shares outstanding and treasury stock(Millions of yen)

Salary allowance

Difference arising during the fiscal year
Reclassification adjustment to profit and loss

Remeasurements of defined benefit plans¥8,433

From April 1, 2022 to March 31, 2023

9,428
(21,335)

Deferred gains or losses on hedges:*9 The amount of guarantee liabilities for private placement bonds in “Securities” (provided in accordance with theGain on sales stock(30,764)

Valuation difference on available-for-sale securities(Millions of yen)

From April 1, 2022 to March 31, 2023

2,302

Amount before income tax effect¥34,489*8 Deferred gains on tangible fixed assets deductible for tax purposes:

As of March 31, 2023

All of the recoverable amounts for the fiscal year ended March 31, 2022 and the fiscal year ended March 31,¥10,995(Thousands of shares)*3 “Other ordinary expenses” include the following:
From April 1, 2022 to March 31, 2023

(Millions of yen)

Loss on sales of equity securities¥120

Loss on devaluation of stocks and other securities

50

86(Millions of yen)
Total
impairment loss

Location

Use

Category

Yamanashi Prefecture

Idle assets

Land

¥0

Outside Yamanashi Prefecture

Operating assets

Land and other tangible fixed assets

2

—

—

¥3

THE YAMANASHI CHUO BANK 2023

Decrease in
number of shares
during FY2022

Number of sharesat the end of
FY202232,783——32,783

807

891

36

1,662

Remarks

Common stock
Treasury stock

prices and lower net cash from operating activities, and differences have been recorded as impairment losses.

Total

Increase in
number of shares
during FY2022

Shares outstanding*4 In the case of the following asset groups, book values were written down to the recoverable levels due to falling land
From April 1, 2022 to March 31, 2023

Number of sharesat the beginningof FY2022

Common stock

Notes

Notes: 1. The breakdown of the increase in treasury shares during the fiscal year under review is as follows:
Increase due to the purchase of treasury shares by resolution of the Board of Directors: 891 thousand shares
Increase due to the demand for purchase of shares less than one unit:
0 thousand shares
2. The decrease in the number of treasury shares during the fiscal year under review is due to the allotment of restricted shares.

872. Items relating to share subscription rights and own share options
Class of shares
to be issued or
Breakdown oftransferred uponshare
the exercise ofClassification
share
subscription rights
subscription
rightsThe Bank

2. Expected amounts from the collection of gross lease receivables and net investment in leases for the year ended March

Number of shares to be issued or transferred upon
the exercise of share subscription rights (shares)
Beginningof FY2022

Stock options as
share
subscription rights

FY2022
Increase

Decrease

End of
FY2022—

Total

Balance asof the endof FY2022(Millions of
yen)

¥109

—

¥109

31, 2023 are as follows:
As of March 31, 2023

(Millions of yen)
Gross lease receivables

Net investment in leases

1 year or less¥85

¥2,681

1 to 2 years

85

2,010

2 to 3 years

78

1,479

3 to 4 years

63

929

4 to 5 years

51

485

Over 5 years

438

380

Total

¥802

¥7,9663. Items relating to dividends(1) Dividend paid during FY2022
Type of stock

Total dividend(Millions of yen)

Dividends per
share (Yen)

Reference date

Effective date

Annual General
Meeting of
Shareholders on
June 24, 2022

Commonstock¥719¥22.50March 31, 2022

June 27, 2022

Board of Directors’Meeting on
November 11, 2022

Commonstock(Resolution)

622

20.00

September 30, 2022

December 5, 2022

the end of FY2022.

Annual General
Meeting of
Shareholders on
June 27, 2023

(1) Policy for financial instruments
The Group is involved in financial services including the leasing and the credit card business, etc., around the banking
business. Within banking, we are involved in the business of taking deposits, making loans, and trading securities,
as well as domestic and foreign exchange operations, corporate bond underwriting, over-the-counter sales of public(2) Dividends whose reference date falls in the current fiscal year, but where the effective date of dividend occurs after(Resolution)(Financial Instruments and Related Disclosure)
1. Qualitative Information of Financial Instruments

Type of stock

Total dividend(Millions of yen)Fund fordividend¥778

Retainedearnings

Commonstock

Dividends per
share (Yen)

Referencedate

Effective
date¥25.00March 31,2023

June 28,2023

equivalents at March 31, 2023, is as follows:
Cash and due from banks
Cash and cash equivalents

customers, hedges against interest rate risk or the risk of exchange fluctuations and may involve transactions suchas interest rate swaps, coupon swaps, forward exchanges or currency swaps. However, we do not conducttransactions which have complicated structures and are speculative. Because we hold financial assets and liabilities
with interest rate risk, we conduct Asset Liability Management (ALM) to limit the disadvantageous influence fromfluctuations in interest.
(2) Nature and extent of risks arising from financial instruments

securities are mainly bonds, stocks and investment trusts. The Group holds these securities for the purpose of holding
to maturity, investment available for sale and policy investment. Securities have issuer’s credit risk, interest rate risk

(Millions of yen)and market price risk.

¥896,640

The Group regards the deposits from customers as its main supply of financial funds. The Group secures stable(348)

financing by maintaining the soundness of financial affairs, but has liquidity risk that it may not be possible to obtain¥896,292

necessary funds due to the outflow of unexpected funds.
As with other transactions, derivative transactions are subject to risks such as market, credit, and liquidity risks.

(Relating to Lease Transactions)

Hedge accounting is applied for derivative transactions that meet the requirements of hedge accounting based on

Finance leases

internal standards in accordance with JICPA Industry Audit Committee Report No. 25, October 8, 2020, “Treatment(Lessor)
1. Details of net investment in leases for the year ended March 31, 2023 are as follows:
As of March 31, 2023

Derivative transactions are primarily meant as a response to the diverse investment and financing needs ofLoans have credit risk, brought about by the borrower’s nonperformance of contractual obligations. The contents of*1 The reconciliation of the cash and due from banks in the consolidated balance sheets and the cash and cash

Due from banks, excluding due from Bank of Japan

addition, for the purpose of short-term fund raising, we enter into call loans and call money in the interbank market.

The financial assets that the Group holds are loans for domestic customers and domestic and foreign securities.

(Relating to Consolidated Statements of Cash Flows)

From April 1, 2022 to March 31, 2023

bonds such as Japanese government bonds, investment trusts and insurance, and various consulting services. In(Millions of yen)

Gross lease receivables¥7,966

Estimated residual value

180

Unearned interest income(750)

Net investment in leases¥7,396of Accounting and Auditing concerning Accounting for Foreign Currency Transactions in the Banking Industry.”(3) Risk management systems for financial instruments
1) Credit risk management
The Group performs maintenance of the credit screening system, fosters talented human resources and positively
advances credit risk management. The credit screening system keeps the credit screening section independentand performs strict screening in advance, performs interim screening and assesses credit enhancements and credit
risk management after lending. Regarding administration, the marketing section and credit screening section or theheadquarters and business offices perform mutual check functions. The Group tries for the observance of thefinancing rule and appropriate use and thereby acts in enhancement of system support such as the practical use of88

THE YAMANASHI CHUO BANK 2023

89

the financing support system. Furthermore, for coping with risk fluctuating continually, the Group monitors the actual

holding period of 10 days. Financial instruments that are considered to have little relevance to market risks,condition of customers through credit rating and self-assessment to be performed regularly or at any time. The

including shares of non-listed companies, are managed on a credit risk basis. Taking into consideration theGroup introduced the “Credit risk information integration service,” which is a joint undertaking of the banks that

nominal amount of market risk applicable to the financial instruments held by consolidated subsidiaries, thesejoined the Regional Bank Association, aiming at upgrading credit risk management and refining measurement offinancial instruments are excluded from the scope of VaR measurement.

value at risk (VaR).
We monitor credit information, current-prices and VaR, and manage the credit risk of issuers of securities
and counterparty risk of derivative transactions in the risk management section.
The situation of these risk management activities is reported to management regularly in the ALM Committee

The Group’s VaR (excluding trading account securities) amounted to ¥50,173 million as of March 31, 2023
compared with ¥61,263 million as of the end of the previous fiscal year. The VaR of trading account securities
amounted to ¥0 million. (Previous fiscal year: ¥0 million). The Group undertakes backtesting to compare VaR,
calculated using VaR measurement models with actual income and loss. The results of this comparison are

and the board of directors.

reported to the ALM Committee on a monthly basis. As a result of this backtesting, the Group is confident that the2) Market risk management

VaR measurement models used are more than adequate in accurately identifying market risks. However, VaR(A) Interest-rate risk management

represents the amount of market risks arising with a certain probability using a statistical methodology based on

The Group supports the needs of customers properly and, for the earning capacity improvement of the bank,historical market volatilities. Accordingly, situations may arise where it is not possible to identify risks appropriately

conducts interest rate risk management as a basic policy. We devised “the basic policy for the interest rate risk

due to market environment volatility that exceeds normally recognized parameters.

hedge” as a general rule every half term to control interest rate risk properly in the ALM Committee in which

3) Liquidity risk management

management is involved as the main members and involved in examining interest rate changes and reviews it

The Group controls liquidity risk by managing the mismatch between the terms of investing and procuring funds as

regularly. In addition, in the ALM committee meeting held monthly, the Group examines a market predictive reportwell as holding highly liquid assets. Financing risk is limited by holding assets with high liquidity as payment reserves

that the market prediction committee produces and monitors the change in the interest rate risk amount of thefor unexpected capital outflows, and a smooth financing resource is secured. Moreover, the Group reports regularly

whole bank account closely. In the risk management section, the Group calculates VaR and basis point value

to management in the risk management committee and the board of directors, etc.

(BPV), and manages the interest rate risk amount of the banking account. In addition, the Group performs stresstests based on a stress scenario extending to each risk category. These results are reported to management
regularly in the ALM Committee and the board of directors.
(B) Foreign exchange risk management(4) Supplementary explanation of the fair value financial instruments
Certain assumptions are used in measuring the fair value of financial instruments. Accordingly, the results of suchmeasurements may vary if different assumptions are used.

The Group manages foreign exchange risk by monitoring exposure to foreign exchange and VaR in the risk
management section. Moreover, it reports regularly to management in the ALM committee and board of directors,
etc.
(C) Market price risk management
Regarding investment in financial instruments including securities, the Group conducts risk management inconformity with a basic administration policy. The basic administration policy is as follows. The Group executes
the market business while attempting to secure fairness and prompt correspondence. The Group realizes theopportunity for earnings by actively taking risks that can be measured and managed. The proof of maximizing
management vitality, like earnings and equity capital, is assumed to be a precondition. The operative plans are
decided by the board of managing directors after discussion with the ALM Committee. In making the plans, theGroup examines the expected rate of return based on the prospect of interest rate and stock prices, market pricerisk and return in consideration of the correlation between the financial instruments invested in. The Groupmeasures market price risks such as stock price risk using the VaR method. The ALM Committee monitors VaR
based on risk limits and the results of stress tests and tries for coexistence of securing of financial soundness andearning profit.
(D) Quantitative information regarding market risk
In principle, the Group undertakes a quantitative analysis of the market risks applicable to all of its financial
instruments. The volume of market risk is mainly managed utilizing the VaR method. In specific terms, market
risks are managed in a manner that ensures that VaR (the amount of risk after writing down investment in shares
undertaken for strategic business purposes for a portion of VaR) does not exceed the maximum amount of risk
(amount of capital allocation) determined by a resolution of the Board of Directors or other appropriate bodies.
The variance-covariance method (holdings period: 240 days; confidence interval: 99%; observation period: 240
business days) is used to measure VaR (excluding trading account securities) while taking into consideration thecorrelation among interest rates for shares and investment trusts. In addition, with respect to the yen-denominatedinterest risk applicable to demand deposits, internal models are used to estimate core deposits and VaR used as
the means for measurement. Trading account securities (trading securities) VaR is measured using the separate

90

THE YAMANASHI CHUO BANK 2023

91

2. Fair Values of Financial Instruments(Note 1)

The consolidated balance sheet amounts for stocks, etc. with no market price and contributions to

The carrying amount, fair value and the difference between the two for financial instruments are shown below. Stocks, etc.

unions, etc. are as follows and are not included under “available-for-sale securities” in fair value

with no market price and investments in partnerships are not included in the table (see Note 1). For cash and due fromfinancial instruments.

banks, call loans and bills purchased, foreign exchanges (assets/liabilities), central clearing counterparty margin

As of March 31, 2023

(Millions of yen)requirement, and payables under securities lending transactions, the disclosure is omitted since their fair value
approximates their carrying amount due to short maturity.

Carrying amount
Stocks, etc. with no market price*1, *2¥694

Contributions to unions*3(Millions of yen)

As of March 31, 2023
Carrying amount inconsolidatedbalance sheets

Fair value

Difference¥6,147*1 Stocks, etc. with no market price are not subject to fair value disclosure in accordance with Paragraph 5 of the “Implementation
Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020).
*2 Classified as available-for-sale securities; in the current consolidated fiscal year, an impairment loss of ¥7 million was recognized.
*3 Contributions to unions are not subject to fair value disclosure in accordance with Paragraph 24-16 of the “Implementation Guidanceon Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021).

(1) Securities
Held-to-maturity
Available-for-sale securities*1(2) Loans and bills discounted¥11,267¥11,152¥(115)

1,075,772

1,075,772—

2,290,653

Accrued income (Interest on loans)

1,028

Deferred income (Interest on loans andguarantee charge)*2(2,722)

Allowance for possible loan losses*3(12,257)

Total assets¥3,363,742¥3,354,248¥(9,494)(1) Deposits¥3,499,929

Accrued expenses (Interest on NCDs)(3) Borrowed money
Total liabilities

Hedge accounting is applied
Total derivatives

Over 3 years
less 5 years

Over 5 years
less 7 years

Over 7 years
less 10 years¥870,321

¥—

¥—

¥—

¥—

¥—

71,28378,748116,884

127,199

157,562

111,081

2,574

4,416

1,234

209

2,840

—

Municipal bonds

—

—

—

—

2,840

—

Corporate bonds

2,574

4,416

1,234

209

—

—

Available-for-salesecurities that havematurities

68,70974,332

115,650

126,990

154,722

111,081

Japanesegovernment bonds

14,00012,00020,40014,00038,00055,000

Municipal bonds

35,95055,15963,76575,35049,46946,631

Corporate bonds

9,143

7,172

31,48437,64035,5609,450

Others

9,614

—

—

—

31,692—¥40

47,7230Over 10years

47,72347,7240Loans and bills
discounted*1

306,625

401,436

386,983

296,829

313,331428,422458,677

458,679

1¥4,006,462¥4,006,504¥42

Central clearing
counterparty margin
requirement*2

17,000

—

—

—

—

—

¥1,265,230¥480,184¥503,867¥424,029¥470,893¥539,503

Total

Derivatives*4
Hedge accounting is not applied

Over 1 year
less 3 years

131¥3,500,101(Millions of yen)
1 year or
less

Held-to-maturity(9,379)(2) Negotiable certificates of deposits

As of March 31, 2023

Securities

2,267,323¥3,500,061

Maturity analysis for monetary claims and securities with contractual maturities

Due from banks

2,276,702

Accrued expenses (Interest on deposits)(Note 2)¥(1,140)¥(1,140)

¥—

—

—

—

¥(1,140)¥(1,140)¥—*1 Of loans and bills discounted, the portion whose timing of collection is unforeseeable, such as loans to borrowers in legal bankruptcy,
in virtual bankruptcy and in possible bankruptcy, amounting to ¥21,881 million, is not included in the above table. Loans that do nothave contractual maturities, amounting to ¥134,978 million are not included either.
*2 Because no period is set for the central clearing counterparty margin requirement, it is included under “1 year or less.”*1 Available-for-sale securities include investment trusts where the net asset value is deemed as fair value by applying the treatment inParagraphs 24-3 and 24-9 of the “Implementation Guidance on Accounting Standard for Measurement of Fair Value” (ASBJ Guidance
No. 31, June 17, 2021).
*2 Represents deferred interest received on loans and deferred guarantee fees received from a consolidated subsidiary performing
guarantees on the Bank’s loans to customers.
*3 General allowance for possible loan losses and specific allowance for possible loan losses provided to “Loans and bills discounted”
are separately presented in the above table.
*4 Derivative transactions recorded in “Other assets” and “Other liabilities” are aggregated and shown herein. Assets and liabilities
attributable to the derivative transactions are totally offset and the net liability position as a consequence of offsetting would be
represented with brackets.

92

THE YAMANASHI CHUO BANK 2023

93

(Note 3)

Maturity analysis for interest-bearing debt(i)

As of March 31, 2023

the treatment in Paragraph 24-3 is applied(Millions of yen)
1 year or
lessOver 1 year
less 3 years

Over 3 years
less 5 years

Over 5 years
less 7 years

Over 7 years
less 10 years¥3,106,252¥212,985¥55,870

¥—

¥—

¥—

Negotiable certificatesof deposit

47,723

—

—

—

—

—

Payables under
securities lendingtransactions

135,184

—

—

—

—

—

Borrowed money

24,781

205,199

228,696———¥3,313,941¥418,185¥284,567

¥—

¥—

¥—

Deposits*

Total

Reconciliation from the beginning balance to the ending balance for the fiscal year of the investment trusts to which

Over 10years(Millions of yen)

Balance at
beginningof yearProfit or loss or othercomprehensive income
for the period
Recognizedin profit orloss

Recognizedin othercomprehensive
income—(552)

15,573materiality of the inputs used to measure fair value.
Fair value measured using observable inputs, i.e. quoted prices in active markets for assets orBalance at
beginningof yearliabilities that are the subject of the measurement.
Fair value level 3:

Fair value measured using unobservable inputs.

Balanceat end ofyear

Unrealized gains(losses) on investment
trusts held at thebalance sheet daterecognized in profit orloss for the period

6,000

—

—

21,020—(Millions of yen)

The fair value of financial instruments is classified into the following three levels according to the observability andFair value measured using observable inputs other than those in level 1.

Amount of net
asset value ofinvestment funds
determined not to
be deemed fairvalue

the treatment in Paragraph 24-9 is applied

3. Fair value of financial instruments breakdown by level

Fair value level 2:

Amount of net
asset value ofinvestment funds
determined to bedeemed fairvalue(ii) Reconciliation from the beginning balance to the ending balance for the fiscal year of the investment trusts to which* Non-interest-bearing deposits such as checking accounts are excluded. Demand deposits are included in “1 year or less.”

Fair value level 1:

Net amountof purchase,sale, andredemption

Profit or loss or othercomprehensive income
for the period
Recognizedin profit orloss

Recognizedin othercomprehensive
income—335

11,988

If multiple inputs that are significant to the fair value measurement are used, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.

Net amountof purchase,sale, andredemption

Amount of net
asset value ofinvestment funds
determined to bedeemed fairvalue

Amount of net
asset value ofinvestment funds
determined not to
be deemed fairvalue

Balanceat end ofyear

Unrealized gains(losses) on investment
trusts held at thebalance sheet daterecognized in profit orloss for the period

(2)

—

—

12,321—(iii) Breakdown by item of restrictions on cancellation or repurchase requests as of the consolidated balance sheet date(Millions of yen)(1)

Principal restrictions on cancellation or repurchase

Financial instruments measured at fair value in the consolidated balance sheets

As of March 31, 2023
Classification

Items that require several months for cancellation from application to refund(Millions of yen)
Fair value
Level 1

Level 2

Level 3

(2)

Total

Financial instruments other than those measured at fair value in the consolidated balance sheets

Available-for-sale securities

Classification¥152,901¥321,182

Corporate bonds—

Equity securities

50,317

Investment trusts

21,020

As of March 31, 2023

Securities
Japanese government bonds, municipal
bonds, etc.

Consolidated balance sheet amount(Millions of yen)
Fair value
Level 1

Level 2

Level 3

Total—

¥474,083

129,061—

129,061——

50,317

Municipal bonds—¥2,752¥—¥2,752

86,335265,980—

352,316

Corporate bonds

—

—

8,399

8,399

Foreign bonds

8,834

27,802—

36,637Loans and bills discounted——

2,267,323

2,267,323

Foreign stocks

14

—

—

14

Total assets—¥2,752¥2,275,723¥2,278,476

Deposits—¥3,500,101—¥3,500,101

Derivative transactions

Securities
Held-to-maturity debt securities

Interest-related

—

223

—

223

Negotiable certificates of deposit—

47,724—47,724Currency-related

—

661

—

661

Borrowed money—

458,679—

458,679¥298,402¥744,912—¥1,043,315

Total liabilities—¥4,006,504—¥4,006,504

Interest-related

—

¥164

—

¥164

Currency-related

—

1,860

—

1,860

—

¥2,025—¥2,025

Total assets
Derivative transactions

Total liabilities* Securities do not include investment trusts where the net asset value is deemed as fair value by applying the treatment in Paragraphs24-3 and 24-9 of the “Implementation Guidance on Accounting Standard for Measurement of Fair Value” (ASBJ Guidance No. 31, June17, 2021). The consolidated balance sheet amount of investment trusts to which the treatment in Paragraph 24-3 is applied amounted
to ¥21,020 million, and that to which the treatment in Paragraph 24-9 is applied amounted to ¥12,321 million.

94

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(Note 1)

Description of valuation techniques and inputs used for fair value measurement(Note 2)

Information on financial instruments carried at fair value level 3 in the consolidated balance sheets

Not applicable.

AssetsSecurities
Securities for which unadjusted quoted prices in active markets are available are classified as fair value level 1. Suchsecurities mainly include listed equity securities, listed investment trusts, and government bonds.
Even if available quoted prices are used, securities are classified as fair value level 2 when the relevant markets
are not active. Such securities mainly include municipal bonds and corporate bonds. For investment trusts for which
no quoted market prices are available, the net asset value is used as fair value if there are no material restrictions
that would require compensation for the risk from the market participants with respect to cancellation or repurchaserequests, and their fair values are classified as level 2.
When quoted prices are not available, the fair value is measured by using valuation techniques such as thepresent value technique discounting future cash flows. Observable inputs are used in the valuation to the maximum
extent possible. Inputs include TIBOR, government bond yields, credit spreads, and probability of default. When

(Relating to Securities)*1 In addition to including the “Securities” listed on the Consolidated Balance Sheet, this includes “Trading account securities.”*2 Subsidiary and affiliated company shares are listed as notes to the financial statements.

1. Trading securities
As of March 31, 2023
Trading securities

As of March 31, 2023

Fair value exceeded carrying
amount:floating interest rates reflect the market interest rates in the short-term; thus, the acquisition cost or amortized cost is
used as the fair value of those loans as the fair value approximates the acquisition cost or amortized cost where thecredit situation of the borrowers does not vary significantly after executing the loans. With respect to claims on
borrowers in legal bankruptcy, virtual bankruptcy, or possible bankruptcy, the fair value is measured at the discounted
present value of estimated future cash flows or the discounted present value of estimated collectible amounts through(Millions of yen)
Type

Loans
rate that reflects credit risks, etc. for each category based on the type of loan, internal rating, and maturity. Loans with¥—

2. Held-to-maturity debt securities

significant unobservable inputs are used for the measurement, the fair value is classified as level 3.

The fair value of loans is measured by discounting the aggregate value of principal and interest at the market interest(Millions of yen)
Unrealized gains/losses recognized as income

Fair value not exceeded carrying
amount:Total

Carrying amountin consolidatedbalance sheets

Fair value

Differences

Municipal bonds

¥—

¥—

¥—

Corporate bonds

1,415

1,417

2

Sub-total

1,415

1,417

2

Municipal bonds

2,834

2,752

(81)

Corporate bonds

7,018

6,982

(35)

Sub-total

9,852

9,735

(117)

¥11,267¥11,152¥(115)

collateral or guarantee. Such fair value is classified as level 3.
Liabilities
Deposits and negotiable certificates of deposit
For demand deposits payable immediately on demand as of the consolidated balance sheet date, the fair value ismeasured at the amount payable. The fair value of time deposits and negotiable certificates of deposit is measured
at the discounted present value of future cash flows based on each category during a certain period of time. Market
rates are used to discount future cash flows. For deposits with short maturities (less than one year), the carrying
amount is presented as the fair value since the fair value approximates the carrying amount. The said fair value isclassified as level 2.
Borrowed money
The fair value of borrowed money is measured at the present value calculated by discounting the aggregate amountof principal and interest at the interest rate that reflects the remaining period of each borrowing and its credit risk
based on each category during a certain period of time. Of which, borrowed money with floating interest rates reflects
the market interest rates in the short-term, and the credit status of the Bank and its consolidated subsidiaries has not
significantly been changed after the execution of the borrowings; thus, the carrying amount is presented as the fairvalue since it is deemed that the fair value approximates the carrying amount. For borrowed money with shortcontractual terms (less than one year), the carrying amount is presented as the fair value since the fair value
approximates the carrying amount. The said fair value is classified as level 2.
Derivative transactions
Since derivative transactions are over-the-counter transactions without published quoted prices, their fair values aremeasured using the present value technique depending on the type of transaction and the maturity period. The main
inputs used in those valuation techniques are interest rate and exchange rate, among others. The said fair value isclassified as level 2.

96

THE YAMANASHI CHUO BANK 2023

97

3. Available-for-sale securities

6. Securities for which the purpose for holding has changed

As of March 31, 2023
Fair value inconsolidatedbalance sheets

Type

Fair value
exceeded cost:

Not applicable

Valuationdifferences

7. Securities recognized for revaluation loss

Japanese stocks¥45,443¥15,637¥29,806

Bonds total

115,531

114,006

1,524

Japanese Government bonds

58,22557,184

1,041

Japanese municipal bonds

23,33922,962

377

Japanese corporate bonds

33,96533,859106

72,57970,4472,131

72,56470,4332,131

Foreign bonds

—

—

—

Foreign stocks

14

14

—

233,554200,091

33,462

4,873

5,621

(747)

487,614501,259(13,645)

Japanese Government bonds

94,67599,014(4,338)Japanese municipal bonds

297,842304,513(6,670)Japanese corporate bonds

95,09597,732(2,636)

349,730

374,389(24,659)

Investment trusts

313,093334,854(21,760)

Foreign bonds

36,63739,535(2,898)Foreign stocks

—

—

—

842,218

881,270(39,052)¥1,075,772¥1,081,362¥(5,589)

Other securities
Investment trusts

Sub-total
Japanese stocks
Bonds total

Fair value notexceeded cost:

Cost(Millions of yen)

Other securities

Sub-total
Total

Among securities other than securities for trading purposes (excluding stocks, etc. with no market price and contributions
to unions), for securities that are not recognized as having prospects of recovery after their fair value fell sharply comparedwith the acquisition costs, fair value is recognized in the consolidated balance sheets, and valuation difference is treatedas an impairment loss (“revaluation loss”) in the consolidated year under review.
The amount of impairment losses for the fiscal year under review was ¥42 million (including ¥7 million for Japanesestocks and ¥35 million for foreign stocks).
The impairment accounting standards applied in cases where fair value is judged to have fallen significantly are as
follows:(1)

Across-the-board impairment losses shall be booked for securities whose fair values as of the consolidated balance
sheet date decline by 50% or more compared with their acquisition costs.

(2)

Impairment losses shall be booked for securities whose fair values decline by 30% or more, but less than 50% where
it is deemed that there is little likelihood of a recovery in value after taking into consideration fair value levels over the
past year.

(3)

Impairment losses shall be booked for securities whose fair values decline by less than 30% as and when deemednecessary after taking into consideration the financial standing and related factors of the issuer.

(Relating to Money Held in Trust)
1. Money held in trust for investment
As of March 31, 2023

(Millions of yen)

Money held in trust for investment

4. Held-to-maturity debt securities soldFrom April 1, 2022 to March 31, 2023
Type

(Millions of yen)
Cost of securities soldJapanese corporate bonds¥—

Sales costs

Gain (loss) on sale¥—¥—

(Reason for sale) Retirement by purchase

Valuation difference included inconsolidated gains or losses

Balance sheet amount¥9,999¥(0)

2. Money held in trust to maturity
Not applicable

3. Other money held in trust (for objectives beside investment and held-to-maturity)
As of March 31, 2023

5. Available-for-sale securities soldFrom April 1, 2022 to March 31, 2023
Type

Sales costs

Gross realized gains

Gross realized losses

Japanese stocks¥10,032¥5,478¥30

Bonds total

145,645

2,268

147

Japanese Government bonds

122,4892,240

96Japanese municipal bonds

23,15627

50

Japanese corporate bonds

—

—

—

241,060

4,790

15,207

Investment trusts

81,6204,783

130Foreign bonds

159,440

6

15,077

Foreign stocks

—

—

—

¥396,738¥12,536¥15,385

Other securities

Total

98

(Millions of yen)

THE YAMANASHI CHUO BANK 2023

Other money held in trust

Consolidatedbalance sheet
amount(Millions of yen)

Acquisition cost
(Millions of yen)

Difference(Millions of yen)Those whose
consolidatedbalance sheet
amountexceeds theacquisition cost
(Millions of yen)

475

475

—

—

Those whose
consolidatedbalance sheet
amount does
not exceed theacquisition cost
(Millions of yen)—99

(Relating to Net Unrealized Gains/Losses on Available-for-Sale Securities)(2)

Available-for-sale securities were valued at market and net unrealized gains/losses on valuation were as follows:

As of March 31, 2023

As of March 31, 2023

Currency-related derivative instruments(Millions of yen)Type

Amounts
Valuation difference¥(5,539)

Other securities(5,539)Deferred tax assets

1,788

Deferred tax liabilities

Financial
instruments
exchange(3,750)Non-controlling interests¥(4,065)

—

—

—

—

Buy

—

—

—

—

Sold

—

—

—

—

Buy

—

—

—

—

¥73,976¥73,976¥(864)¥(864)

Sold

39,175

—

(796)

(796)

Buy

29,042

—

462

462

Sold

—

—

—

—

Buy

—

—

—

—

Sold

—

—

—

—

Buy

—

—

—

—

¥—

¥—

¥(1,198)¥(1,198)

Forward rate agreements

Regarding the derivative instruments which are not accounted for as hedge transactions, Contract Amount or Notional
Amount, Fair Value and Unrealized Gain or Loss for each type of derivative transactions, respectively, at the end of the

OTC

Currency options

consolidated balance sheet date are as follows. Contract or Notional Amounts do not show market risk of derivative
instruments.

Other

Interest-related derivative instruments

As of March 31, 2023

(Millions of yen)Type

Unrealized
Gain/Loss

Fair Value

Sold

Currency swaps(Relating to Derivative Transactions)
1 Derivative instruments not accounted for as hedges(1)

Over 1 Year

Currency options

314

Net unrealized gains on available-for-sale securities

Contract Amountor Notional
AmountCurrency futures—

Net unrealized gains (before non-controlling interests)(Millions of yen)Contract Amountor Notional
AmountOver 1 Year

Unrealized
Gain/Loss

Fair Value

Total

Note: Derivative instruments are revalued to fair value. Changes in fair value are included in the consolidated statement of operations.

Interest rate futures
Financial
instruments
exchange

Sold

—

—

—

—

Buy

—

—

—

—

Interest rate options
Sold

—

—

—

—

Buy

—

—

—

—

—

—

—

—

Buy

—

—

—

—

Interest rate swaps(5)¥4,558¥4,558¥(164)¥(164)

Variable receipt andfixed interest payment

4,558

4,558

223

223

—

—

—

—

Sold

—

—

—

—

Buy

—

—

—

—

Interest rate options

Not applicable
Credit derivative transactions
Not applicable

2 Derivative instruments accounted for as hedges
amount determined in the contract and fair value as of the consolidated balance sheet date for each type of transaction
and hedge accounting method are as follows. Furthermore, the contract amount itself does not indicate the market risk
associated with the derivative transaction.
(1)

Interest-rate related transaction
Not applicable(2)

Currency-related transactions
Not applicable

(3)

Other

Share-related transactions
Not applicable

Sold

—

—

—

—

Buy

—

—

—

—

¥—

¥—

¥58

¥58

Total

Commodity-related derivative instruments

With regard to derivative transactions to which hedge accounting is applied, the contract amount or notional principal

Fixed receipt andvariable interest payment

Variable receipt andvariable interest payment

Liability-related transactions
Not applicable

(6)

Sold

Share-related transactions
Not applicable(4)Interest rate forward
contracts

OTC

(3)

(4)

Liability-related transactions
Not applicable

Note: Derivative instruments are revalued to fair value. Changes in fair value are included in the consolidated statement of operations.

100

THE YAMANASHI CHUO BANK 2023

101

(Relating to Employees’ Retirement Benefits)
1. Outline of employees’ retirement benefits(4)

From April 1, 2022 to March 31, 2023

(Millions of yen)

To provide for employees’ retirement benefits, the Bank has adopted a funded defined-benefit pension plan and a definedService cost

¥1,025

contribution pension plan.

Interest cost

117

The defined-benefit corporate pension plan (funded plan) pays a lump sum or a pension based on employee
A retirement benefit trust has been established within the defined-benefit corporate pension plan.

Past service costs recorded in expenses

The lump-sum retirement plan (an unfunded plan, but as a result of the establishment of the retirement benefit trust,Other

2. Funded defined benefit pension plan

Retirement benefit obligations at beginning of year

(Millions of yen)
¥31,058

Service cost

1,025Interest cost

117

Actuarial gains and losses

296

Retirement benefits payment(1,313)

Past service cost

—

Other

—

Retirement benefits obligations at end of year
(2)

(5)

Reconciliation of retirement benefits obligations at beginning of year and end of year

From April 1, 2022 to March 31, 2023

¥31,184

From April 1, 2022 to March 31, 2023

(Millions of yen)

Pension assets at beginning of year

¥39,420

Expected return on plan assets

1,082

Employer’s contribution

890

Retirement benefits payment

(780)

Other
Pension assets at end of year
(3)

440

—
¥41,053

Reconciliation of retirement benefits obligations and pension assets at end of year and liabilities and assets ofretirement benefits recorded in the consolidated balance sheets

As of March 31, 2023

(Millions of yen)

Retirement benefits obligations of funded plan

¥31,184

Pension assets(41,053)(9,869)Retirement benefits obligations of unfunded plans
Assets and liabilities recorded in consolidated balance sheets, net—¥(9,869)(Millions of yen)

Liability of retirement benefits—

Assets of retirement benefits¥(9,869)

Liabilities and assets recorded in the consolidated balance sheets, net¥(9,869)

THE YAMANASHI CHUO BANK 2023

592
(7)
¥645

Remeasurements of defined benefit plans

Breakdown of items (before tax-related effects) recorded in remeasurements of defined benefit plans are as follows:
From April 1, 2022 to March 31, 2023
Past service costs
Actuarial gains and losses
Other
Retirement benefit costs of defined benefit plan
(6)

(Millions of yen)
¥7
(736)
—
¥(729)

Accumulated adjustment for retirement benefits

The breakdown of items (before the deduction of tax effects) recorded in accumulated adjustment for retirement benefits
is as follows:
As of March 31, 2023

Reconciliation of pension assets at beginning of year and end of year

Actuarial gains and losses(1,082)—Retirement benefit costs of defined benefit planit has become a funded plan) pays a lump sum based on employee compensation and length of service.

(1)

Expected return on plan assets
Actuarial gains and losses recorded in expenses

compensation and length of service.

102

Breakdown of retirement benefit costs(Millions of yen)

Unrecognized past service costs¥(31)

Unrecognized actuarial gains and losses

1,578

Other

—

Retirement benefit costs of defined benefit plan(7)

¥1,546

Pension assets
1) The percentage of each main category for total pension assets is as follows:

As of March 31, 2023
Stocks

29%

Bonds

21

Life insurance general account

13

Other

37

Total

100%

Note: Included in total pension assets is 15% (compared with 11% in the previous fiscal year) for retirement benefit trusts established in
the corporate pension plan, and 25% (compared with 28% in the previous fiscal year) for retirement benefit trusts established in the
lump-sum retirement plan.

2) Method for calculating the long-term expected rate of return on plan assets
To determine the long-term expected rate of return on plan assets, the Bank considers the current and projectedpension assets allocations, as well as the current and expected long-term rate of return for the various assets thatmake up the pension assets.

103

(8)

Basis for calculating actuarial calculations

2) Per share price information
2016 Stock
Options2017 Stock
Option2018 Stock
Option2019 Stock
OptionExercise price (Yen)

¥1

¥1

¥1

¥1

Average price per share upon exercise (Yen)

—

—

—

—

2,025

2,115

2,050

1,061

Basis for calculating main actuarial calculations (weighted average)
From April 1, 2022 to March 31, 2023
Discount rate

0.3%

Long-term expected rate of return on plan assets

2.7

Rate of salary increase
Defined-benefit corporate pension plan

3.6

Lump-sum retirement plan

3.5%

3. Defined contribution funds

Fair value per share at the grant date (Yen)

Note: The average price per share upon exercise and the fair value per share at the grant date reflect the five-to-one stock consolidation
conducted on the effective date of October 1, 2018.

3. Description of restricted stock/Changes in the size of restricted stock(1)

Description of restricted stock

The required contribution for the current consolidated fiscal year under the Bank’s defined-contribution pension plan is¥208 million compared with ¥202 million as of the end of the previous fiscal year.

(Stock Options and Other Related Information)
1. Accounting line item and the amount of stock options charged as expenses
From April 1, 2022 to March 31, 2023

(Millions of yen)

General and administrative expenses¥42

2. Description of stock options/Changes in the size of stock options(1)

The Bank’s directors (excluding outside directors):
The Bank’s executive officers:

Type and number of shares
grantedCommon stock: 53,300 shares

Grant dateAugust 7, 2020

Eligible service period

The period from the Bank’s 117th Annual General Meeting of Shareholders to its
118th Annual General Meeting of Shareholders, which is scheduled to be held in
June 2021 (The period for executive officers, is from July 1, 2020 to June 30,
2021.)

Transfer restriction period

The period from the grant date of the restricted stock to the date of resignation orretirement of eligible individuals from the position of the Bank’s director, executive
officer or employee

Conditions for removal of transfer
restrictions

During the period from the start of the transfer restriction period to the date on
which the first subsequent Annual General Meeting of Shareholders of the Bank isheld (The period for executive officers is from July 1, 2020 to June 30, 2021.), theeligible individuals shall continuously hold the position of the Bank’s director,
executive officer or employee.

Fair value per share at the grant
date

840 yenDescription of stock options
Stock Options

Category and number of people to whom stock options are granted
Type and number of shares granted as stock options

No stock options were grantedin the fiscal year ended March
31, 2023.

Date on which stock options were granted
Vesting terms and conditions
Vesting period
Exercise period

Note: Reflecting the five-to-one stock consolidation conducted on the effective date of October 1, 2018.

(2)

Granted on August 7, 2020
Category and number of people
to whom restricted stockcompensation was granted

Granted on August 5, 2021

Changes in the size of stock options

The following describes changes in the size of stock options that existed during the fiscal year ended March 31, 2023. The
number of stock options is converted into the number of shares.
1) Number of stock options
2016 Stock
Options2017 Stock
Option2018 Stock
Option2019 Stock
OptionStock options which are not yet vested (shares):
As of March 31, 2020

—

—

—

—

Granted

—

—

—

—

Forfeited

—

—

—

—

Vested————Balance of stock options not vested

—

—

—

—

6,060

6,400

6,120

17,900

Vested————Exercised

—

—

—

—

Forfeited

—

—

—

—

6,060

6,400

6,120

17,900Stock options which have already been vested (shares):
As of March 31, 2020

Balance of stock options not exercised

99Category and number of people
to whom restricted stockcompensation was granted

The Bank’s directors (excluding outside directors):
The Bank’s executive officers:

Type and number of shares
grantedCommon stock: 51,500 shares

Grant dateAugust 5, 2021

Eligible service period

The period from the Bank’s 118th Annual General Meeting of Shareholders to its
119th Annual General Meeting of Shareholders, which is scheduled to be held in
June 2022 (for executive officers, the period from the date of appointment to thedate of retirement as determined by the board of directors).

Transfer restriction period

The period from the grant date of the restricted stock to the date of resignation orretirement of eligible individuals from the position of the Bank’s director, executive
officer or employee

Conditions for removal of transfer
restrictions

During the period from the start of the transfer restriction period to the date on
which the first subsequent Annual General Meeting of Shareholders of the Bank isheld (for executive officers, the period from the date of appointment to the date ofretirement as determined by the board of directors), the eligible individuals shallcontinuously hold the position of the Bank’s director, executive officer or employee.

Fair value per share at the grantdate

821 yen612

Note: Reflecting the five-to-one stock consolidation conducted on the effective date of October 1, 2018.

104

THE YAMANASHI CHUO BANK 2023

105

Granted on July 29, 2022

2. A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in theCategory and number of people
to whom restricted stockcompensation was granted

The Bank’s directors (excluding outside directors):
The Bank’s executive officers:

Type and number of shares
grantedCommon stock: 36,600 shares

Grant dateJuly 29, 2022

Eligible service period

The period from the Bank’s 119th Annual General Meeting of Shareholders to its
120th Annual General Meeting of Shareholders, which is scheduled to be held in
June 2023 (for executive officers, the period from the date of appointment to thedate of retirement as determined by the board of directors).

accompanying consolidated statements of income is as follows:

612

As of March 31, 2023

Transfer restriction period

The period from the grant date of the restricted stock to the date of resignation orretirement of eligible individuals from the position of the Bank’s director, executive
officer or employee

Conditions for removal of transfer
restrictions

During the period from the start of the transfer restriction period to the date on
which the first subsequent Annual General Meeting of Shareholders of the Bank isheld (for executive officers, the period from the date of appointment to the date ofretirement as determined by the board of directors), the eligible individuals shallcontinuously hold the position of the Bank’s director, executive officer or employee.

Fair value per share at the grantdate

1,156 yen

(2)

Normal effective statutory tax rate

30.4%

Valuation allowance

3.0

Income not taxable for income tax purposes(1.2)

Expenses not deductible for income tax purposes

0.3

Other – net

0.3

Actual effective tax rate

32.8%

(Relating to Asset Retirement Obligations)Not applicable(Relating to Investment and Rental Property)
Not applicable(Relating to Revenue Recognition)(Millions of yen)

Changes in the size of restricted stock
Granted on
August 7, 2020

Granted on
August 5, 2021

Granted on
July 29, 2022

Fees and commissions

Prior to removal of transfer restrictions (shares)
End of previous consolidated fiscal year

Consolidated fiscal year
under review (From April 1,
2022 to March 31, 2023)

Classification

32,70051,500—Granted——36,600Acquired without compensation

—

—

—

Removal of transfer restrictions

4,000

4,200

—

Balance with restrictions left in place

28,70047,30036,60010,949Deposits and loans business

4,184

Foreign exchange business

1,604

Securities-related business

1,115

Agency business

2,267

Custody and safety deposit box business

228

Guarantee business

307

The above table also includes revenues based on ASBJ Statement No. 10, “Accounting Standard for Financial(Relating to Tax Effect Accounts)

Instruments.”

1. The tax effects of significant temporary differences and tax loss carry-forwards which resulted in deferred tax assets(Segment Information by Type of Business)and liabilities are as follows:
As of March 31, 2023

(Millions of yen)

Deferred tax assets:
Net defined benefit liability¥3,481

Allowance for possible loan losses

3,036

Unrealized gains on available-for-sale securities

2,284

Losses on investment securities

1,516

Depreciation

454[Segment information]
Segment information is not shown in these statements, since the banking business is the only reportable segment.
[Related information]
From April 1, 2022 to March 31, 2023

1. Information for service segment(Millions of yen)

Other

2,558

Sub-total

13,332

Valuation allowance(4,862)

Ordinary income from
customers

Total deferred tax assets

8,469

Note: Instead of the net sales of a non-financial company, ordinary income in gross is indicated.

Loans¥21,029

Securities investment

Other¥25,131

Total¥14,391¥60,552

Deferred tax liabilities:
Unrealized gains on available-for-sale securities
Other

106

(495)
(2,545)

Total deferred tax liabilities(3,041)

Net deferred tax assets (liabilities)¥5,427

THE YAMANASHI CHUO BANK 2023

107

2. Information for geographic areas
(1)

(2)

Ordinary income

statements

Since the amount classified as ordinary income from external customers in Japan exceeds 90% of ordinary income

Not applicableon the consolidated statement of income, it has been omitted here.
(2)

Transactions with consolidated subsidiaries and related parties of the company submitting consolidated financial

2. Notes regarding parent company or other important related companies

Tangible fixed assets
Since the amount of tangible fixed assets located in Japan exceeds 90% of the amount of tangible fixed assets on
the consolidated statement of income, it has been omitted here.

Not applicable(Relating to Business Combinations, etc.)

3. Information about major customers

Not applicable

Since no ordinary income from specific customers represents more than 10% of ordinary income on the consolidated(Per Share Information)statement of income, it has been omitted here.

From April 1, 2022 to March 31, 2023

[Information about impairment loss of fixed assets in segment]
Since the Group has only a single reporting segment (Banking), disclosure of segments lacks importance and has thus
been omitted here.

(Yen)¥6,129.98

Profit per share

161.78

Diluted net income per share

161.45

Note: The basis for calculating net income per share and diluted net income per share is presented as follows.

[Information about the amortization of goodwill and unamortized balance by reportable segment]

From April 1, 2022 to March 31, 2023

Not applicable.

(Millions of yen)

Profit per share
Profit attributable to shareholders of the parent[Information about the gain recognized on negative goodwill by reportable segment]

Amount not attributable to owners of common stock

Not applicable.
[Related-party transactions]¥5,061—

Profit attributable to shareholders of the parent related to common stock

5,061

Average balance of common stock (Thousands of shares)

31,287

Diluted profit per share

1. Related-party transactions(1)

Net assets per share

Adjustment amount of profit attributable to shareholders of the parent

Transactions with parties related to the company submitting consolidated financial statements
1) The parent company and major shareholders of the company submitting consolidated financial statements (limited
to companies, etc.)

Increase in the number of common stock (Thousands of shares)
New share subscription rights (Thousands of shares)

¥—
64
64

Not applicable2) Non-consolidated subsidiaries and related companies, etc. of the company submitting consolidated financial
statements
Not applicable3) Companies, etc. with the same parent company as the company submitting consolidated financial statements, andsubsidiaries, etc. of other related companies of the company submitting consolidated financial statements
Not applicable4) Related-party transactions involving directors, corporate auditors and major stockholders (individuals only) of the
Bank
From April 1, 2022 to March 31, 2023

(Millions of yen)

Relationship

Name

Address

Paid-in
capitalPosition

Votingrights(%)

Officer or his/her relatives

Eiichiro
Yamadera——

Brother-in-law of
the Bank’s
Director

0.11

LendingCompany, etc. controlled by
an officer or his/her relatives
through majority ownershipof voting rights

ITUTUYASHOUYU
CO., LTD.
(Note 2)

Nirasaki City,
Yamanashi
Prefecture

10

Manufacturing
and sale of soy
sauce and miso—

Lending

Details of
businessrelationshipTransactions

Transaction
amountAccounting
nameYear-endbalanceLending

¥—

Loans

¥155

Interest
income1——

Lending

¥3

Loans

¥12

Interest
income0——Notes: 1. Transaction terms and policies for determining transaction terms
Transaction terms are determined in the same manner as with clients in general.
2. A relative of Masahiko Yamadera, a director of the Bank, owns a majority of voting rights.

108

THE YAMANASHI CHUO BANK 2023

109

20-8, Marunouchi 1-chome, Kofu,
Yamanashi 400-8601, JapanPhone

055-233-2111

URL

https://www.yamanashibank.co.jp/