Annual Repor t 2017

Our Mission
Region-Based Operations and Sound Management
Maintaining a close relationship with the communities in the region where we operate,
we will contribute to the prosperity of the region and the development of its economy, with a commitment to sound managementthat enjoys the trust of our customers, while bolstering our business operations.

Management Vision (Ideal and prospective image)
Yamanashi

A Bank that grows and develops together with Yamanashi andits surroundings as a driving force for regional economic revitalization

Tokyo

Theme During the Medium-Term Management Plan

Mt. FujiLive up to the trust accorded by customers and contribute to regional
revitalization

Slogan (3Cs)
Concern, Change, Challenge
Head office

Basic Strategies ofMedium-Term Management Plan S.T.E.P. up 2019 ealization of a business model adapted to changes in the environmentR— Selection and concentration, and differentiationfrom other financial institutions—● Build and strengthening a robust management structure●

Profile (as of March 31, 2017)
Corporate Name:

Contents

The Yamanashi Chuo Bank, Ltd.

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

Established:
December 1, 1941

President:
Mitsuyoshi Seki (as of June 27, 2017)

Common Stock:¥15,400 million

Number of Shares Issued:
174,915,000 shares

Stock Listing:First Section of the Tokyo Stock Exchange

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

Network:
Domestic: 	91 locations (Head Office and Branches: 89, District Offices: 2)
Overseas: Hong Kong Representative OfficeBusinesses:
The Yamanashi Chuo Bank Group comprises the Yamanashi Chuo Bankand four consolidated subsidiaries. Centered on its core banking business,
the Group provides an integrated financing service that includes a leasing
and credit-card business. The Bank is the leading local bank in Yamanashi
Prefecture, and its sphere of operations encompasses both the prefecture
and the western part of the Tokyo metropolitan region.
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
and uncertainties. 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 Company’s projections.

1 Consolidated Financial Highlights
2 Message from the President
4 Medium-Term Management Plan S.T.E.P. up 20196 Region-Based Financial Services
8 Operational Review
10 Financial Review (on a consolidated basis)
11 Consolidated Balance Sheets
13 Consolidated Statements of Income
15 Consolidated Statements of Comprehensive Income
16 Consolidated Statements of Changes in Net Assets
19 Consolidated Statements of Cash Flows
21 Notes to Consolidated Financial Statements
46 Corporate Data
47 Board of Directors and Corporate Auditors
47 Organization
48 Internal Control and Risk Management

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

Millions of yen

2013

2014

2015

2016

2017

Ordinary Income

50,47050,51850,33555,71855,736

Ordinary Profit

10,912

12,826

13,464

13,82910,001

Profit Attributable to Shareholders of the Parent

6,362

8,736

8,753

9,452

7,282

Comprehensive Income

23,393

8,617

40,346

106(15,464)

Net Assets

193,620

199,258

237,440

235,158

216,977

Total Assets

3,028,916

3,041,323

3,155,903

3,239,117

3,285,408

Net Assets per Share (Yen)

1,093.22

1,136.72

1,367.58

1,370.62

1,277.73

Net Income per Share (Yen)

35.69

49.86

50.38

54.91

42.95

Capital Adequacy Ratio (Domestic Standard, %)

16.75

17.28

17.35

18.05

16.82

Return on Equity (%)

3.50

4.48

4.40

4.03

3.25

Price Earning Ratio (Times)

12.02

9.34

10.44

7.52

11.59

Cash Flows from Operating Activities

72,87088,999(3,806)70,287(91,511)

Cash Flows from Investing Activities(70,360)(50,148)(61,232)(17,638)

245,900

Cash Flows from Financing Activities(2,467)(1,625)(2,018)(2,397)(2,868)Cash and Cash Equivalents

88,889126,115

59,058109,309260,830

Notes(1) Amounts do not include consumption and local taxes payable by the Bank and its consolidated subsidiaries.
(2) Capital adequacy ratio is calculated on a consolidated basis in accordance with the Bulletin Notification No. 19 issued by the Financial Services Agency in2006 under Paragraph 2, Article 14 of the Banking Law. Because the amended capital adequacy rules have been applied to banks that focus on domestic
operations since the fiscal year ended March 31, 2014, from the fiscal year ended March 31, 2014 to the fiscal year ended March 2017, the Bank calculated
the capital adequacy ratio based on the formula set forth in the notification after the amendment.

Total assets

Profit attributable toshareholders of the parent

ROE/
Capital adequacy ratio(Domestic standard)(¥ billion)(¥ billion)

(%)

3,300

10.0

18.0

3,200

15.0

8.0

Capital adequacy
ratio

12.0

3,100
6.0

9.0

3,000

ROE

4.0
6.0

2,900
2.0

2,800

2,700

March 31

2013

2014

2015

2016

2017

0.0
FY

3.0

2013

2014

2015

2016

THE YAMANASHI CHUO BANK 2017

1

2017

0.0
FY

2013

2014

2015

2016

2017

Message from the President

I would like to take this opportunity to thank our shareholders andother stakeholders for their steadfast support for the Bank and its
Group companies.
Under its S.T.E.P. up 2019 medium-term management plan forthe period April 2016 to March 2019, the Bank and all management
and employees are working together to implement various
measures in order to realize the Bank’s ideal and prospective image(management vision) as “A Bank that grows and develops together
with Yamanashi and its surroundings as a driving force for regional
economic revitalization.”
The Bank will continue to maintain a sound financial content
that earns the trust of local communities, customers andshareholders, and strive to provide even higher quality services.
Below, we present an overview of our business performancefor fiscal 2016 (April 2016 to March 2017), together with a report on
future management plans.

President

Mitsuyoshi
Seki

Overview of fiscal 2016 performance

operators, and conducted the “Yamanashi Food Sector Business Matching

In the fiscal year ended March 31, 2017, during the first half of the fiscal

In the tourism field, we supported our clients through a tourism advisor,

year the Japanese economy experienced a steady decline in exports andheld seminars on in-bound tourism, and helped our business customers

production against the backdrop of the slowdown of the economies ofregister as tax-free shops. In international operations, we strengthened

emerging countries and the appreciation of the yen, and capital invest-

our solutions businesses for export companies, and recorded a record

ment and personal spending also lacked strength overall. However, intrade volume. We formed a new alliance with the Vietnam Joint Stockthe second half of the fiscal year, as the sentiment of a slowdown in theCommercial Bank for Industry and Trade (of Vietnam), in addition to our

economies of emerging economies weakened, there was a rebound in

existing operation tie-ups with seven other overseas banks, thus further

exports and production.

enhancing our preparedness for overseas expansion support.

Fair” to support customers’ development and expansion of sales channels.

Looking at the financial situation during the first half of the fiscal year,

Turning to individual customers, we have responded to a wide range

foreign exchange was marked by appreciation of the yen, mainly due toof asset management needs of individual customers through measures

the problem of the UK’s withdrawal from the EU, and the Nikkei Stock

including enhancing our product lineup with investment trusts, and a

Average also softened. In the second half of the fiscal year, the situation

variety of insurance products. Additionally, we have also addressed thechanged to ongoing depreciation of the yen and rising stock prices in

asset-building needs of customers through such means as proposing a

the wake of the US presidential election. However, the yen appreciated“household budget review,” and introducing new plans that correspondagain at the end of the fiscal year mainly due to a cautionary sentimentto personalized defined contribution pension schemes (product name:regarding the protectionist policy of the US, and rises in stock prices also

iDeCo). Meanwhile, to fulfill the financial needs of its customers, thetended to be sluggish.

Bank also worked to provide products and services focused on the life
events of its customers, including housing, education and auto loans.

Moreover, domestic interest rates remained low due to the impact of

As a result of the foregoing, in the fiscal year ended March 31, 2017,

negative interest rates.

ordinary profit decreased ¥3,828 million year on year to ¥10,001 million

Against this financial and economic backdrop, in the first year of
S.T.E.P. up 2019, the Bank’s three-year medium-term management

on a consolidated basis. Net income attributable to owners of parent

plan running from April 2016 through March 2019, we proactively

declined ¥2,169 million to ¥7,282 million on a consolidated basis.
In the Bank’s main accounts (consolidated basis), the Bank enhanced

implemented the following measures.

its deposit products and services to appropriately and swiftly meet the

The Bank supported the growth and development of our corporate
and sole proprietorship customers by providing optimal solutions todiversifying asset management needs of customers. The year-end balance

resolve their business issues based on an appropriate assessment of theirof total deposits increased ¥80.5 billion to ¥2,800.4 billion mainly due to an

business models, growth potential and other aspects (business feasibility

increase in deposits held by both individual and corporate customers.
Total deposits including negotiable certificates of deposit (NCDs)

studies), thereby strengthening its measures to facilitate regional

increased ¥20.0 billion during the year to ¥2,862.2 billion.

revitalization. In the fields of supporting the startup and establishment
phase, we implemented support for business planning formulation and

The year-end balance of over-the-counter Japanese government

for business growth and development after establishment. In agriculture-bonds and investment trusts declined ¥11.3 billion during the year toand food-related fields, we held our Agri-Business School for business¥126.0 billion.

THE YAMANASHI CHUO BANK 20172

Message from the President

The Economy of Yamanashi Prefecture—Our Business Base (fiscal 2015)
Shares in Yamanashi Pref. (%)¥3,480 billion
Real Growth Rate:
0.5%
Shipment Value of Production in Prefecture: ¥2,133 billion
General Prefectural Production:(as of March 31, 2017)
13.1

Major Products and Their Share in Japanese Market
Products

Shipment Value

Share

Ranking

Mineral Water

41.2

29.3

No. 1

Precious Metal Products

25.9

25.5

No. 1

Numerical Control Robots

169.6

69.6

No. 1

Quartz Crystal Units (excluding for clock and watch use)

13.1

9.8

No. 3

Flat-Panel Display Manufacturing Equipment

18.8

6.6

No. 3

Medical Apparatus and Instruments

40.2

7.0

No. 5

(¥ billion)

(%)

1.7

9.2
6.7

Deposit
SharesLoan
Shares

49.6

28.6

34.2
8.8

7.0
Yamanashi Chuo Bank
Major banks
Shinkin banks/credit unions
Agricultural cooperatives
Semi-government institutions/
other

Yamanashi Chuo Bank
Major banks
Shinkin banks/credit unions
Agricultural cooperatives
Semi-government institutions/othermore on the customers’ perspectives.

Turning to loans, we proactively expanded lending to second-tiercompanies and SMEs through solution banking based on businessIn regard to regional revitalization, the Bank utilized its accumulated

feasibility studies and also increased loans to individuals. As a result, theexpertise to work in coordination with local municipalities and otherbalance of loans increased by ¥27.1 billion to ¥1,541.6 billion.

entities to advance their comprehensive regional strategies, thereby

Future management policies

contributing to regional economic revitalization.
In order to improve customer convenience, the Bank will work to

In Yamanashi Prefecture, progress is being made on several large-scaleenhance our over-the-counter (OTC) sales channels, including by

national projects in the prefecture, such as the Linear Chuo Shinkansen.

opening new sales offices and increasing office hours to weekday

Meanwhile, with Yamanashi Prefecture’s population recently dropping

evenings and holidays, and to expand the functions of its non-OTC

below 830,000, there are concerns about a possible economic contrac-

sales channels, including Internet banking.

tion in line with the prefecture’s declining population.
In the financial sector, the Bank of Japan’s negative interest rate

To cope with the changes in the environment caused by innovation

policy will make it even more challenging for banks to secure stablein IT, the Bank will gather market intelligence and do research on new

earnings. In this environment, innovation in IT is expected to profoundly

financial functions and services, develop its human resources, and willtransform conventional financial functions and services, as underscoredappropriately strengthen cybersecurity.

by the emergence of Fintech.
To tackle the issues presented by these environmental changes, and

The Bank will focus further on improving CS (customer satisfaction) andto build a stable, highly profitable management structure in anticipation

ES (employee satisfaction), both of which are indispensable for carryingof conditions five to ten years from now, under the Bank’s S.T.E.P. up 2019

out these various measures. Moreover, we will strive to continue to havemedium-term management plan for the period April 2016 to March 2019,

everyone’s trust regarding our compliance initiatives by appropriately

the Bank has formulated its ideal and prospective image (management

responding to society’s requests and expectations, in addition tovision) as “A Bank that grows and develops together with Yamanashi andobserving all the relevant laws and regulations.
Furthermore, regarding the Corporate Governance Code, which

its surroundings as a driving force for regional economic revitalization,”prescribes the behavioral standards for listed companies, the Bank aims

and the Bank is focusing on developing the following initiatives.

to pursue the optimum form of corporate governance for the Bank, fullyIn order to provide more sophisticated solutions to corporate andtaking into account the intentions of the Corporate Governance Code,sole proprietorship customers, the Bank will assign to Head Officeand to enhance its corporate value over the medium to long term.

about half of the 50 employees who have been transferred to regional

The Group and all management and employees will work together

companies over the past five years where they have developed their

to contribute to community prosperity and economic development.

ability to make good judgments, thereby strengthening support for
branch operations related to business feasibility studies.

PresidentIn order to support stable asset-building by individual customers, theMitsuyoshi Seki

Bank will make proposals regarding asset management based even
THE YAMANASHI CHUO BANK 2017

3

41.1

Medium-Term Management Plan
S.T.E.P. up 2019
Overview

steadily and promptly execute two basic strategies, namely

In April 2016, the Bank launched its medium-term management

environment—Selection and concentration, and differentiation

plan S.T.E.P. up 2019 for the period April 2016 to March 2019.

from other financial institutions” and “Build and strengthen a“Realization of a business model adapted to changes in the

Under this plan, we have formulated our management visionrobust management structure,” and advance individual strategies(ideal and prospective image) as “A Bank that grows and develops

formulated based on those two strategies. In parallel, the Bank will

together with Yamanashi and its surroundings as a driving force forseek to win the resounding trust of the people of Yamanashi byregional economic revitalization.” Moreover, to realize this vision,

providing comprehensive financial services that are pertinent to

we have embraced “Live up to the trust accorded by customers

changing customer needs and economic conditions in a timely

and contribute to regional revitalization” as our theme during

and appropriate manner through rigorously enforcing compliancethe medium-term management plan, and “Concern, Change,

and the protection of customers and their privacy. The Bank will

Challenge” as our slogan. With these principles in mind, the Bank

also seek to earn trust by contributing to the development of thewill work to implement various strategies.

regional economy, as well as local industries and businesses, with
its financial intermediation capabilities.

Moreover, to achieve our management vision, we will

(Diagram of S.T.E.P. up 2019: April 2016 to March 2019)

Management vision
Ideal andprospective image

A Bank that grows and develops together with Yamanashi andits surroundings as a driving force for regional economic revitalization

Theme during the plan

Live up to the trust accorded by customers and contribute to regional revitalization

Enhance stakeholder satisfaction (society, customers, shareholders, and employees)
Establish a financial and revenue base supporting sustainable growth

Realization of a business model adapted to changes in the environment
Selection and concentration, and differentiation from other financial institutions
Strengthen retail
solution banking

Strengthen coordination
with industrial, government,
and academic funds

Strengthen corporate
solution banking

Strengthen and expand
the capital markets
investment approach

Build and strengthen a robust management structure
Develop human resources andstrengthen organizational capabilities

Optimally redistribute management resources
such as branches, human resources and IT systems

Fundamentally reform and reengineer operations
based on sophisticated risk management approaches

Strengthen the approach and enhancethe effectiveness of internal control

Strengthen the enhancement ofcustomer and employee satisfaction

Strengthen CSR activities

Rigorously enforce compliance andthe protection of customers and their privacy

THE YAMANASHI CHUO BANK 20174

Advance IT utilization

Medium-Term Management Plan
S.T.E.P. up 2019

Quantitative targets
Item

Net business profit

Profit attributable toshareholders of the parent

Year-end deposit balance*

Year-end loan balance

Target¥9.5 bn¥6.0 bn¥3,260.0 bn¥1,590.0 bn(Year ending March 2019)* Deposit balance: Deposits + Investment trusts + Public bonds

CSR Within the Medium-Term
Management Planeconomic revitalization through our core businesses, we will

At the Yamanashi Chuo Bank, we have been working to fulfill our

citizen, thereby contributing to the sustainable development ofcorporate social responsibilities, as we recognize that this, along

the regional community. In parallel, the Bank will actively disclosewith sustained value creation and improved competitiveness, isinformation on the status of its CSR activities as part of efforts

essential in forging even stronger ties with all our stakeholders,to build relationships of trust with stakeholders and enhance its

including the regional community, our customers and sharehold-corporate value and competitiveness, which will pave the way forers, other market investors, and our management and employees.

earnings growth.

continue taking further measures to contribute to society andprotect the environment to meet our obligations as a corporate

Looking ahead, in addition to contributing to regional

Strengthening CSR activities
in the medium-term management plan S.T.E.P. up 2019
Enhance corporate value
and competitiveness

Increase earnings

Sustainable developmentof the regional community

Activities
to promote regional
economic revitalization

Help communities revitalize industries
Coordinate with local authorities
Participate in local projects
Collect and use market intelligence

Activities
to contribute to
the regional community

Strengthen support for education
Proactively take steps to promote artsand culture, sports and other activities
Promote corporate activities
from the standpoint of contributing to society,including wellness initiatives

Activities
to tackle environmental
problems

Strengthen activities to reduce the Bank’s
own environmental impact
Support and facilitate activities undertaken
by regional communities, customers andothers to reduce environmental impact

THE YAMANASHI CHUO BANK 20175

Build relationshipsof trust with stakeholders

Proactively disclose
the status of activities

Region-Based Financial Services
Region-Based Financial Services

2019, to realize its management vision (ideal and

The provision of region-based financial services

develops together with Yamanashi and its surroundings(relationship banking) is a long-term issue for the Bank.

as a driving force for regional economic revitalization.”

Accordingly, the Bank will vigorously push ahead with

Looking ahead, we will continue to take measures torelationship banking in the course of executing various

develop the regional economy and community, improvemeasures set forth in the medium-term management

our services for customers in the region, and promoteplan S.T.E.P. up 2019 for the period April 2016 to March

relationship banking.

prospective image) of becoming “A Bank that grows and

1 : Provide consulting services to corporate customers
2 : Proactively participate in broad-based regional revival
3 : Proactively provide information to the community and other stakeholders

Activities to promote relationship banking
in the medium-term management plan1

Provide consulting services to corporate customers• Provide appropriate life-stage solutions to companies• Enhance the depth of solution banking groundedin business feasibility studies• Develop human resources who can address diversifying andincreasingly sophisticated needs

Management vision(Ideal and prospective image)2

Proactively participate in broad-based regional revival• Support the growth and revitalization of industries that

support the region• Proactively engage in regional revitalization and other measuresin coordination with local municipalities and other entities• Conduct social contribution activities such as the promotionof support for education, arts and culture, and sports

3

Proactively provide information to the communityand other stakeholders• Proactively provide clear information through various media,

including the Bank’s website and disclosure reports

THE YAMANASHI CHUO BANK 2017

6

A Bank that grows
and develops together with
Yamanashi and its surroundings
as a driving force for regional
economic revitalization

Region-Based Financial Services

Corporate growth assistance through collaboration with business advisors (April 2001 to March 2017)
Number of investment target and borrower
enterprises, investment amount190¥13.6 bn

Number of business matching deals

89 lines

In the field of corporate growth support, since employment ofbusiness advisors in April 2001, we have provided consulting
services to 614 companies regarding the launching of marketing channels and the evaluation of the potential of technology
and business.

Yamanashi Chugin Management Support Coordination Services,and corporate customer support through business matching services
Number of companies that have received
support (problem-solving) from Yamanashi
Chugin Management Support Coordination
Services

Number of business matching deals successfully concluded via the Bank’s network
or Bank-sponsored business meetings

1,256

The network of contacts linking the Bank Group with external
institutions to offer corporate customers tailored proposals
backed up by specialist know-how(Jan. 2006 to March 2017).

2,359

Business matching has been achieved by using the Bank’s
network to provide data on customer companies, as well as
business fairs such as the Yamanashi Food Sector Business
Matching Fair, the Yamanashi Food Business Liaison
Conference, etc. (FY2005–2016).

Achievements in support for management improvement (April 2016 to March 2017)
Debtors (excluding normal borrowers) as of the start of term: A
Of which, those receiving management improvement support: a

2,491
144

Of which, those upgraded their debtor categories as of the term-end: b

20

Of which, those drawing up reconstruction plans: c

114

Percentage receiving management improvement support: (a/A)

5.8%

Percentage upgraded: (b/a)

13.9%

Percentage drawing up reconstruction plans: (c/a)

79.2%

THE YAMANASHI CHUO BANK 20177

Operational Review

Corporate Banking
Support for companies through our solutions businesses
In collaboration with outside support organizations, theGroup has created approaches to support customers inestablishing businesses, starting up new businesses, andgrowing and revitalizing business, and is working to provide
high-quality financial services.
In fiscal 2016, we continued our previous fiscal year’s
efforts to facilitate smooth financing to local companies,
provide consulting services to corporate customers, andstrengthen our solutions businesses. In response to the “SME
Finance Facilitation Act,” we meticulously consulted withcustomers about financing based on the “Basic Policy for
Financial Facilitation” established by the Bank. At the sametime, we strengthened our support system, formulated
management improvement plans, and provided strong
support for the implementation of those plans.
The Bank supported the growth and development of its
customers by providing optimal solutions to resolve theirbusiness issues based on an appropriate assessment of theirbusiness models, growth potential and other aspects (business feasibility studies), thereby strengthening its measures
to facilitate regional revitalization.
In the areas of supporting the startup and establishment
phase, the Bank implemented support for business planning
formulation, and for business growth and development after
establishment.
In agriculture- and food-related areas, we held our AgriBusiness School for business operators, and conducted the“Yamanashi Food Sector Business Matching Fair” to support
customers’ development and expansion of sales channels.
In the tourism area, we supported our clients through a
tourism advisor, held seminars on in-bound tourism, andhelped our business customers register as tax-free shops.

In the area of international operations, we strengthened
our solutions businesses for export companies, and achieved
the highest recorded trade volume. We formed a newalliance with the Vietnam Joint Stock Commercial Bank for
Industry and Trade (of Vietnam), in addition to our existing
operation tie-ups with seven other overseas banks, thus
further enhancing our preparedness for overseas expansion
support.
In the areas of business succession and inheritanceservices, the Bank reinforced its support readiness throughpartnerships with outside institutions and held complimentary individual consultations to accurately meet the needs ofcustomers.
Moreover, the Bank worked to nurture highly specialized
employees to strengthen support for the revitalizationof local industries and generate new sources of funding
demand. Specifically, the Bank assigned employees toseminars held by the Regional Banks Association of Japan,
as well as to a rigorous training course to acquire advanced
examining abilities, a business feasibility research course, acourse on the legal aspects of financing, and others. The Bank
also assigned employees to external companies primarily
in local industries, with the goal of enhancing employees’
discernment by having them obtain knowledge of the characteristics of each industry and develop industry expertise.
The total of loans outstanding to SMEs as of March 31,2017 was up by ¥37.1 billion year on year to ¥539.0 billion,
accounting for 35.0% of all loans outstanding.
Looking ahead, the Bank will work hard to provide comprehensive financial services and strengthen its consulting
capabilities to better respond to the needs of our corporate
customers who form the bedrock of the regional economy.

Agri-Business School

Yamanashi Food Business Liaison Conference

THE YAMANASHI CHUO BANK 20178

Operational Review

Consumer Banking
Meeting customers’ diverse needs
The Bank has responded to the asset management needsof customers by working to enhance our product lineup,
especially with investment trusts and a variety of insurance
products. Additionally, we have addressed the asset-building
needs of customers through such means as proposing a“household budget review,” and introducing new plans that
correspond to personalized defined contribution pension
schemes (product name: iDeCo).
Meanwhile, the Bank also worked to fulfill the financing
needs of its customers by providing products and services
focused on the life events of its customers, including housing, education, and auto loans.
The balance of loans to individuals as of March 31, 2017,
increased by ¥7.2 billion from the previous year-end to¥379.3 billion, accounting for 25.0% of all loans. The balanceof housing loans outstanding at the year-end stood at ¥374.0
billion, up ¥8.8 billion from March 31, 2016.

Various asset management seminars held

Western Tokyo Bloc
Seeking greater potential beyond Yamanashi Prefecture
Bordering Yamanashi Prefecture to the east, the westernpart of Tokyo in which we operate, is a large market thatis home to around 530,000 people, and 170,000 businesssites. We call it the Western Tokyo Bloc and it has tremendous growth potential. As of March 31, 2017, we had 15
branches within this Bloc. Most have been in operation for
30 to 40 years and are well-established as a local financial
institution in their local communities. In addition, the Bank
currently operates four Loan Square offices devoted tohousing loans in the Western Tokyo Bloc.
This region has achieved profitability and efficiency
exceeding that within Yamanashi Prefecture and we view
this as one of the pillars for “increasing operating income”
in the medium-term management plan. In this plan, we will
expand the marketing base multi-dimensionally through theactive investment of human resources and the aggressive
expansion of new business bases with the aim of evengreater profitability and efficiency.
In the fiscal year ended March 31, 2017, personal loans
increased by ¥3.5 billion year on year to ¥83.9 billion, whilebusiness loans increased by ¥20.8 billion to ¥114.1 billion.
The total number of commercial borrowers now on our
books increased by 206 to 2,078 (in terms of transactions).

Loan RAROA (earnings after deduction of credit cost/loans), a
prime indicator of profitability, was better than in Yamanashi
Prefecture, reflecting high profitability of our operations in
the Western Tokyo Bloc.

Loans and corporate borrowers
in Western Tokyo Bloc
Personal loans

Business loans

Corporate borrowers(¥ billion)

120

2,078
80

1,872
1,768

40

1,665
0

As of March, 31

2014

2015

2016

* Local public bodies are excluded from corporate borrowers

THE YAMANASHI CHUO BANK 2017

9

2017

Financial Review(on a consolidated basis)

Operating Environment

Overview of Principal Accounts

In the fiscal year ended March 31, 2017, during the first half of the year theJapanese economy experienced a steady decline in exports and production
against the backdrop of the slowdown of the economies of emerging
countries and the appreciation of the yen, and capital investment andpersonal spending also lacked strength overall. However, in the second halfof the year, as the sentiment of a slowdown in the economies of emerging
economies weakened, there was a rebound in exports and production.
Looking at the financial situation during the first half of the year, foreignexchange was marked by an appreciation of the yen mainly due to the
problem of the UK’s withdrawal from the EU, and the Nikkei Stock Averagealso softened. In the second half of the year, the situation changed toongoing depreciation of the yen and rising stock prices in the wake of the US
presidential election. However, the yen appreciated again at the end of the
fiscal year mainly due to a cautionary sentiment regarding the protectionist
policies of the US, and rises in stock prices also tended to be sluggish.
Moreover, domestic interest rates remained low due to the impact of the
Bank of Japan’s negative interest rate policy.
The economy of Yamanashi Prefecture saw strong business sentiment,
especially related to semiconductor manufacturing equipment and smartphone components, but in the tourism sector, the increase in foreign tourists
slowed, and capital investment and personal consumption lacked vigor.

In the Bank’s main accounts, the Bank enhanced its deposit products andservices to appropriately and swiftly meet the diversifying asset management needs of customers. As a result, the year-end balance on a consolidated
basis increased ¥80.5 billion to ¥2,800.4 billion, mainly due to an increase indeposits held by both individual and corporate customers.
Total deposits including negotiable certificates of deposit (NCDs)
increased ¥20.0 billion during the year to ¥2,862.2 billion.
The year-end balance of over the counter Japanese government bonds
and investment trusts declined ¥11.3 billion during the year to ¥126.0 billion.
Turning to loans, we proactively expanded lending to second-tiercompanies and SMEs through solution banking based on business feasibility
studies and increased loans to individuals. As a result, the balance of loans
increased by ¥27.1 billion to ¥1,541.6 billion.
In investment securities, the Bank aimed to secure stable earnings, basedon its strong risk management system, and took management measures inaccordance with market trends. As a result, mainly due to the redemptionof government bonds, the balance of investment securities decreased by¥276.3 billion to ¥1,241.6 billion.
The consolidated capital adequacy ratio (domestic standard) decreased
1.23 percentage points to 16.82%.

Cash Flows
Overview of Earnings

Net cash used in operating activities amounted to ¥91.5 billion (comparedwith a net inflow of ¥70.2 billion in the previous year), with deposits
increasing ¥20.0 billion and payables under securities lending transactions
increasing ¥68.7 billion, despite loans and bills discounted increasing ¥27.1
billion, and call loans increasing ¥152.0 billion.
Net cash provided by investing activities totaled ¥245.9 billion (comparedwith a net outflow of ¥17.6 billion in the previous year), with acquisition of
investment securities totaling ¥453.5 billion and sales and redemption of
investment securities totaling ¥701.1 billion.
Net cash used in financing activities came to ¥2.8 billion (compared witha net outflow of ¥2.3 billion in the previous year), with expenses on acquisition of treasury stock totaling ¥1.2 billion and dividend payments of ¥1.6
billion.
As a result, cash and cash equivalents at the end of the fiscal year came to¥260.8 billion (up ¥151.5 billion from the previous year).

On the earnings front, the Bank worked to strengthen its earnings capacity,
efficiently manage assets, and rationalize and streamline all aspects ofmanagement.
Although interest on loans and bills discounted, and interest anddividends on securities decreased due to lower interest rates, administrative
expenses also decreased, mainly due to a decrease in depreciation andamortization.
As a result, in the fiscal year ended March 31, 2017, ordinary profit
decreased ¥3,828 million year on year to ¥10,001 million on a consolidated
basis. Net income attributable to owners of parent declined ¥2,169 million to¥7,282 million on a consolidated basis.

ROA

OHR

Capital adequacy ratio(Domestic standard)

(%)

(%)

0.8

20.0

80.0

0.6

15.0

75.0

0.4

10.0

70.0

0.2

5.0

65.0

0.0

March 31

2013

2014

2015

2016

2017

0.0

March 31

(%)

2013

2014

2015

2016

2017

60.0

March 31

2013

ROA = Core net business profit / (Average Balance of Total Assets – Average Balance of Customers’ Liabilities for Acceptances & Guarantees)
Capital Adequacy Ratio = On a consolidated basis, domestic standard OHR = Operating expenses / Core Gross Business Profit
Note: A ll except for the capital adequacy ratio are on a non-consolidated basis.
THE YAMANASHI CHUO BANK 2017

10

2014

2015

2016

2017

【Consolidated Financial Statements】①【Consolidated Balance Sheets】
Millions of Yen
End of FY2016(March 31, 2017)

Thousands of U.S. Dollars
End of FY2016(March 31, 2017)

End of FY2015(March 31, 2016)

Assets:Cash and due from banks¥ 260,999¥ 109,493

Call loans and bills bought

192,933

41,2291,719,703

Monetary claims bought

11,181

10,804

99,66590811,241,651

1,518,043

11,067,402

1,541,651

1,514,537

※6

1,629

1,381

14,527※8, ※915,52022,822

138,344

25,414

26,052

226,532

Buildings

8,873

9,392

79,093Land

13,38013,559119,267

Construction in progress

359

15

3,206

Other tangible fixed assets

2,800

3,084

24,965

3,008

3,239

26,813

2,514

2,499

22,411

Software in progress

161

408

1,440

Other intangible fixed assets

332

332

2,962

Deferred tax assets

2,086

2,506

18,598Customers’ liabilities for acceptances and guarantees

4,487

4,561

39,997(15,164)(15,555)(135,170)¥3,285,408¥3,239,117¥29,284,329

Trading account securities
Securities※1, ※8, ※13

Loans and bills discounted※2, ※3, ※4, ※5, ※6, ※7, ※10
Foreign exchanges
Other assets

Tangible fixed assets※11, ※12

Intangible fixed assets
Software

Allowance for possible loan losses
Total assets

11

THE YAMANASHI CHUO BANK 201711¥

2,326,405

13,741,434

Millions of Yen
End of FY2016(March 31, 2017)

Thousands of U.S. Dollars
End of FY2016(March 31, 2017)

End of FY2015(March 31, 2016)

Liabilities:¥ 2,800,429¥2,719,829$24,961,487

61,861

122,418

551,396

152,243

83,4691,357,015

5,486

20,367

48,902

280

74

2,497

28,866

26,552

257,300

47

46

419

3,131

4,152

27,911

Reserve for directors’ and corporate auditors’
retirement benefits

14

9

128

Reserve for reimbursement of deposits

210

261

1,876

Reserve for contingent losses

157

135

1,400

Deferred tax liabilities

11,21622,07999,980Acceptances and guarantees

4,487

4,561

39,997

3,068,431

3,003,959

27,350,308

Common stock

15,40015,400137,267

Capital surplus

8,287

8,287

73,871Retained earnings

158,984

153,207

1,417,101

Treasury stock(3,259)(2,009)(29,055)

Total shareholders’ equity

179,412

174,886

1,599,185

Unrealized gains on available-for-sale securities

39,15963,152

349,049

Remeasurements of defined benefit plans(3,962)(4,866)(35,321)

Total accumulated other comprehensive income

35,19758,285

313,728

173

133

1,551

2,194

1,853

19,558

216,977

235,158

1,934,022¥3,285,408¥3,239,117$29,284,329

Deposits※8

Negotiable certificates of deposit
Payables under securities lending transactions
Borrowed money※8※8, ※9Foreign exchanges
Other liabilities
Accrued bonuses to directors and corporate auditors
Net defined benefit liability

Total liabilities

Net assets:

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

12
THE YAMANASHI CHUO BANK 201712

②【Consolidated Statements of Income and Consolidated Statements of Comprehensive Income】【Consolidated Statements of Income】
Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2016(From April 1, 2016
to March 31, 2017)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2016(From April 1, 2016
to March 31, 2017)

Ordinary income:¥55,736¥55,718$496,800

Interest and dividends income

33,444

36,121

298,103

Interest on loans and bills discounted

16,645

18,101

148,373

Interest and dividends on securities

16,55817,758

147,590

Interest on call loans and bills bought

202

88

1,801

Interest on due from banks

(32)

95

(287)

Other

70

78

626

Fees and commissions

8,031

7,915

71,589Other operating income

9,049

5,346

80,664

Other ordinary income

5,210

6,334

46,444

Ordinary expenses

45,73541,888407,657

Interest expenses

2,083

1,798

18,572

Deposits

950

1,445

8,471

Negotiable certificates deposits

28

93

251

Call money and bills sold

0

1

0

1,049

216

9,356

Borrowed money

55

41

494

Other

(0)

0

(0)

Fees and commissions

2,531

2,062

22,565

Other operating expenses

6,354

4,971

56,64029,07528,944259,167

5,689

4,112

50,713

153

1,549

1,369

5,535

2,562

49,34410,001

13,82989,143

Payables under securities lending transactions

General and administrative expenses※2

Other expenses
Provision of allowance for possible loan losses
Other expenses
Ordinary profit

13

THE YAMANASHI CHUO BANK 201713

Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2016(From April 1, 2016
to March 31, 2017)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2016(From April 1, 2016
to March 31, 2017)

3

292

29

3

292

29

297

409

2,652

Losses on disposal of fixed assets

249

55

2,222

Impairment losses

48

353

430

Income before income taxes and non-controllinginterests

9,706

13,712

86,521

Income taxes – current

2,371

4,152

21,139

Income taxes – deferred

(142)

(50)

(1,267)

Total income taxes

2,229

4,102

19,872

7,477

9,610

66,649

195

158

1,738

¥7,282¥9,452$64,911Extraordinary income:Gain on disposal of fixed assets
Extraordinary losses※3

ProfitProfit attributable to non-controlling interests
Profit attributable to shareholders of the parent

14
THE YAMANASHI CHUO BANK 201714

【Consolidated Statements of Comprehensive Income】
Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2016(From April 1, 2016
to March 31, 2017)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2016(From April 1, 2016
to March 31, 2017)¥7,477¥9,610$66,649(22,941)(9,503)(204,491)(23,845)(4,896)(212,549)(904)(4,606)

8,058(15,464)

106(137,842)

Total comprehensive income attributable toshareholders of the parent(15,806)(44)(140,888)

Total comprehensive income attributable tonon-controlling interests

341

151

3,046

ProfitOther comprehensive income※1

Net unrealized gains on available-for-sale securities
Remeasurements of defined benefit plans
Total comprehensive income

15
THE YAMANASHI CHUO BANK 201715

③【Consolidated Statements of Changes in Net Assets】
Millions of Yen
Shareholders' equity
Consolidated FY2016 (From April 1,2016 to March 31, 2017)
Common stock Capital surplus
Balance at beginning of current year
¥15,400¥8,287
Cumulative effect of changes inaccounting policies
Balance at beginning of year
15,4008,287
reflecting changes in accounting
policies
Changes during year:
Cash dividends
Profit attributable to shareholders of
the parent
Purchases of treasury stock
Disposals of treasury stock0

Retainedearnings
Treasury stock¥153,207¥(2,009)110
153,318

Total
shareholders’equity¥174,886110(2,009)174,996(1,616)(1,616)

7,282

7,282
(1,254)
4(1,254)
4Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year

─

0

5,666

(1,250)4,415¥15,400¥8,287¥158,984¥(3,259)¥179,412

Total
Unrealized
accumulated
gains onRemeasurements
otheravailable-for- of defined benefit comprehensive Subscription
rights to sharessale securities
plans
incomeNon-controllinginterests

Millions of Yen
Accumulated other comprehensive income

Consolidated FY2016 (From April 1,2016 to March 31, 2017)
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies¥63,152

63,152¥(4,866)(4,866)¥58,285

58,285¥133

133

Total net
assets¥1,853¥235,158

1

111

1,854

235,270

Changes during year:
Cash dividends(1,616)

Profit attributable to shareholders of
the parent

7,282

Purchases of treasury stock(1,254)

Disposals of treasury stock

4

Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity(23,992)904(23,088)40

340(22,708)

Total changes during year

(23,992)904(23,088)40

340(18,292)

Balance at end of current year

¥39,159¥(3,962)¥35,197¥173¥2,194¥216,977

16

THE YAMANASHI CHUO BANK 201716

Millions of Yen
Shareholders' equity
Consolidated FY2015 (From April 1,2015 to March 31, 2016)
Common stock Capital surplus
Balance at beginning of current year
¥15,400¥8,287
Cumulative effect of changes inaccounting policies
Balance at beginning of year
15,4008,287
reflecting changes in accounting
policies
Changes during year:
Cash dividends
Profit attributable to shareholders of
the parent
Purchases of treasury stock
Disposals of treasury stock(5)
Transfer from retained earnings tocapital surplus

Retainedearnings
Treasury stock¥145,268¥(1,126)

145,268(1,126)

Total
shareholders’equity¥167,829

167,829(1,507)(1,507)

9,452

9,452
(915)
32

(915)
27

5

(5)

─

─

7,938

(882)

7,056

¥15,400¥8,287¥153,207¥(2,009)¥174,886

Total
Unrealized
accumulated
gains onRemeasurements
otheravailable-for- of defined benefit comprehensive Subscription
rights to sharessale securities
plans
incomeNon-controllinginterests

Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year

Millions of Yen
Accumulated other comprehensive income

Consolidated FY2015 (From April 1,2015 to March 31, 2016)
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies

Total net
assets¥68,042¥(259)¥67,782¥124¥1,703¥237,440

68,042(259)

67,782

124

1,703

237,440

Changes during year:
Cash dividends(1,507)

Profit attributable to shareholders of
the parent

9,452

Purchases of treasury stock(915)

Disposals of treasury stock

27

Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity(4,890)(4,606)(9,497)8149(9,338)

Total changes during year

(4,890)(4,606)(9,497)8149(2,281)

Balance at end of current year

¥63,152¥(4,866)¥58,285¥133¥1,853¥235,158

17

THE YAMANASHI CHUO BANK 201717

Thousands of U.S. Dollars
Shareholders' equity
Consolidated FY2016 (From April 1,2016 to March 31, 2017)
Common stock
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies$137,267

Retainedearnings

Capital surplus$73,869$1,365,610

Treasury stock$ (17,908)

985
137,267

73,8691,366,595

Total
shareholders’equity$1,558,838
985(17,908)

1,559,823

Changes during year:
Cash dividends(14,405)(14,405)

Profit attributable to shareholders of
the parent

64,91164,911

Purchases of treasury stock
Disposals of treasury stock(11,186)(11,186)

40

42(11,147)$ (29,055)

39,361$1,599,185

2Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year

2－$137,267－$73,871

50,506$1,417,101

Thousands of U.S. Dollars
Accumulated other comprehensive income

Consolidated FY2016 (From April 1,2016 to March 31, 2017)
Balance at beginning of current year
Cumulative effect of changes inaccounting policies
Balance at beginning of year
reflecting changes in accounting
policies

Total
Unrealized
accumulated
gains onRemeasurements
otheravailable-for- of defined benefit comprehensive Subscription
sale securities
plans
incomerights to shares$562,906

562,906$ (43,379)$519,527(43,379)

519,527$1,191

1,191

Non-controllinginterests

Total net
assets$16,517$2,096,073

10

995

16,5272,097,068

Changes during year:
Cash dividends(14,405)

Profit attributable to shareholders of
the parent

64,911

Purchases of treasury stock(11,186)

Disposals of treasury stock

42

Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity
Total changes during year
Balance at end of current year

(213,857)

8,058(205,799)

360

3,032

(202,407)(213,857)$349,049

8,058$(35,321)(205,799)$313,728360$1,551

3,032$19,558(163,046)$1,934,022

18
THE YAMANASHI CHUO BANK 201718

④【Consolidated Statements of Cash Flows】
Millions of Yen

Thousands of U.S. Dollars

Consolidated FY2016(From April 1, 2016
to March 31, 2017)

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2016(From April 1, 2016
to March 31, 2017)¥9,706¥13,712$86,521

2,252

3,057

20,079Impairment losses

249

55

2,222

Increase (decrease) in allowance for possible
loan losses

(391)

611

(3,487)

1

1

9

0

2,585

0

Increase (decrease) in net defined benefit liability(1,021)

3,181(9,102)

Increase (decrease) in reserve for directors’andcorporate auditors’retirement benefits

4

2

40

Increase (decrease) in reserve forreimbursement of deposits

(51)

24

(455)

Increase (decrease) in reserve for contingent
losses

21

27

195

Interest income recognized on consolidated
statements of income(33,444)(36,121)(298,103)Interest expenses recognized on consolidated
statements of income

2,083

1,798

18,572Losses (gains) on investment securities(8,866)(5,719)(79,031)

Foreign exchange losses – net

943

4,930

8,409

Losses on disposal of premises and equipment

44

61

401

Net increase (decrease) in loans and bills
discounted(27,113)(25,888)(241,676)

Net increase in deposits

80,59918,391

718,423

Net increase in negotiable certificates of deposit(60,557)

18,586(539,778)

Net increase (decrease) in borrowed money(14,881)(2,342)(132,644)

14

9,984

131

Net decrease (increase) in call loans(152,080)(6,030)(1,355,560)

Net increase (decrease) in call money

0(5,287)0

Net increase (decrease) in payables under
securities lending transactions

68,77357,374

613,013Net decrease (increase) in foreign exchanges(assets)

(248)

(313)

(2,214).
Operating activities:
Income before income taxes and non-controllinginterests
Adjustment for:
Depreciation and amortization

Increase (decrease) in accrued bonuses todirectors and corporate auditors
Decrease (increase) in net defined benefit asset

Net decrease in due from banks (excluding cash
equivalents)

19

THE YAMANASHI CHUO BANK 201719

Millions of Yen
Consolidated FY2016(From April 1, 2016
to March 31, 2017)
Net increase (decrease) in foreign exchanges(liabilities)

Thousands of U.S. Dollars

Consolidated FY2015(From April 1, 2015
to March 31, 2016)

Consolidated FY2016(From April 1, 2016
to March 31, 2017)

205

(108)

1,831

Interest income (cash basis)

36,10339,621

321,811

Interest expenses (cash basis)(3,751)(1,554)(33,438)

Other – net

14,133(16,671)

125,982

Total adjustments(87,266)

73,970(777,849)

Income taxes paid

(4,244)(3,682)(37,836)

Net cash provided by (used in) operating activities(91,511)70,287(815,685)

Purchases of investment securities(453,587)(432,021)(4,043,030)

Proceeds from sales of investment securities

399,327

190,4833,559,384

Proceeds from redemption of investment securities

301,816

226,7442,690,227

Purchases of premises and equipment(1,089)(2,216)(9,707)

17

150

157

(586)

(781)

(5,226)1

1

15245,900(17,638)

2,191,819(1,616)(1,507)(14,405)

(1)

(1)

(15)

(1,254)(915)(11,186)

4

27

42

(2,868)(2,397)(25,564)

(0)

0

(2)

Net increase (decrease) in cash and cash equivalents

151,520

50,2511,350,568

Cash and cash equivalents, beginning of year

109,309

59,058974,329¥260,830¥109,309$2,324,897

Investing activities:

Proceeds from sales of premises and equipment
Purchases of intangible fixed assets
Proceeds from sales of intangible fixed assets
Net cash used in investing activities
Financing activities:
Dividends paid
Payment of dividends to non-controlling interests
Repurchases of treasury stock
Proceeds from sales of treasury stock
Net cash used in financing activities
Foreign currency transaction adjustments on cash andcash equivalents

Cash and cash equivalents, end of year

※1

20

THE YAMANASHI CHUO BANK 201720

【Notes to Consolidated Financial Statements】
Important items used as basis for preparing consolidated financial statements
1. Items relating to scope of consolidation(1) 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

3 companies

Yamanashi New Business Support Investment Limited Partnership
Yamanashi Sixth Industrialization Support Investment Limited Partnership
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership
Non-consolidated subsidiaries are excluded from the scope of consolidation since their assets, ordinary income, and ourownership percentage of their net income and retained earnings do not have a material impact on our results of operations
and financial condition.

2. Items relating to application of equity method(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

3 companies

Yamanashi New Business Support Investment Limited Partnership
Yamanashi Sixth Industrialization Support Investment Limited Partnership
Yamanashi Chugin Regional Revitalization Investment Limited Business 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 ourconsolidated financial statements.
(4) Affiliates accounted for by the equity method
Not applicable

3. Items relating to business years of consolidated subsidiaries
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 the related
unrealized gains and losses are included in earnings.
(2) Valuation standards and methods for securities
Held-to-maturity debt securities, which management has the positive intent and ability to hold to maturity are reported atamortized cost, and available-for-sale securities, which are not classified as either of the aforementioned securities, arereported at fair value with unrealized gains and losses, net of applicable taxes, reported in a separate component of equity.
Available-for-sale securities whose fair values are extremely difficult to be determined are stated at cost determined by themoving-average method. The cost of securities sold is determined based on the moving-average method.
(3) Valuation standards and methods for derivative transactions
Derivative transactions are measured at fair value.

21

THE YAMANASHI CHUO BANK 201721

(4) Methods of depreciation of fixed assets① 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 years② Intangible fixed assets (excluding lease assets)
Amortization of intangible fixed assets is calculated principally using the straight-line method.
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 – bothpremises and equipment and intangible fixed assets – are depreciated by the straight-line method over the lease period.
Residual value of those lease assets is zero unless any guaranteed amount is prescribed in the lease agreement.
(5) Allowance for possible loan losses
The allowance for possible loan losses is stated in amounts considered to be appropriate based on management’s
judgment and an assessment of future losses estimated through the Bank’s self assessment of the quality of all loans.
The Bank has a credit rating system and a self assessment system. These systems are used to assess the Bank’s asset
quality based on past experience of credit losses, possible credit losses, analysis of customers’ conditions, such as
business conditions, character and quality and the overall performance of the portfolio. For claims of debtors who haverestructured loans for which cash flows related to the recovery of loan principal or receipt of interest could be reasonably
estimated, an allowance for possible loan losses (based on the cash flow estimate method) is provided for the difference
between the present value of expected future cash flows discounted at the contracted interest rate and the carrying value ofthe claim. All loans are classified into one of five categories for self assessment purposes, “normal,” “caution,” “possible
bankruptcy,” “virtual bankruptcy” or “legal bankruptcy.”
The allowance for possible loan losses is calculated based on the actual past loss ratio for “normal” and “caution”
categories, and the fair value of the collateral for collateral-dependent loans and other factors, including the value of future
cash flows for other self assessment categories.
The policy for the allowance for possible loan losses of consolidated subsidiaries is similar to the Bank’s.
(6) 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.
(7) 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.
(8) Reserve for reimbursement of deposits
Provision is made for possible losses on future claims of withdrawal of deposits which were derecognized as liabilities undercertain conditions in an amount deemed necessary based on historical reimbursement experience.
(9) Reserve for contingent losses
Reserve for contingent losses, which is provided for possible losses from contingent events, is calculated by estimation of
the impact of those contingent events.

22

THE YAMANASHI CHUO BANK 201722

(10) Accounting procedures for retirement benefits
In calculating retirement benefit obligations, the Bank used the benefit formula as the method of attributing the estimatedretirement 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 they occur and recorded
in profit and loss from each of the following year of the occurrence.
(11) Foreign currency items
Foreign currency assets and liabilities are translated into yen at the exchange rates prevailing at the balance sheet date.
(12) Lease transactions(Lessor)
Revenues and cost of revenues of finance lease transactions are recognized when lease payments are made.
(13) Cash and cash equivalents
For the purpose of reporting cash flows, cash and cash equivalents are defined as cash and due from the Bank of Japan.
(14) Consumption taxes
The accounting treatment of national consumption tax and local consumption tax is based on the tax exclusion method.
[Changes in accounting policies][Application of Implementation Guidance on Recoverability of Deferred Tax Assets]
The Implementation Guidance on the Recoverability of Deferred Tax Assets (ASBJ Implementation Guidance No. 26, March 28,
2016; hereafter referred to as "Recoverability Implementation Guidance") has been applied since the fiscal year under review,and the Bank has revised a part of its accounting standard of the recoverability of deferred tax assets.
With regard to the application of the Recoverability Implementation Guidance, the Bank has applied the Recoverability
Implementation Guidance from the beginning of the fiscal year under review and onwards, in accordance with the transitional
treatment set forth in paragraph 49 (4) of the Recoverability Implementation Guidance, and adding the difference between a) theamount of deferred tax assets and deferred tax liabilities when the provisions corresponding to 1) to 3) of paragraph 49 (3) of the
Recoverability Implementation Guidance are applied at the beginning of fiscal year under review and b) the amount of deferred
tax assets and deferred tax liabilities at the end of the previous fiscal year to retained earnings and non-controlling interests at the
beginning of the fiscal year under review.
As a result, at the beginning of the fiscal year under review, deferred tax assets increased by ¥111 million, retained earningsby ¥110 million, and non-controlling interests increased by ¥1 million, respectively.
The balance of retained earnings at the beginning of the fiscal year in the Consolidated Statement of Changes in Net Assets
increased by ¥110 million, reflecting the impact on net assets at the beginning of the fiscal year under review, and the balance of
non-controlling interests at the beginning of the fiscal year increased by ¥1 million.
[Application of Practical Solution on a Change in Depreciation Method due to Tax Reform 2016]
In accordance with the revisions to Japan’s Corporate Tax Act, the Bank has applied the Practical Solution on a Change in the
Depreciation Method due to Tax Reform 2016 (Practical Issues Task Force No. 32, June 17, 2016) from the fiscal year underreview and has changed the depreciation method for facilities attached to buildings and structures that were acquired on or after
April 1, 2016 from the declining-balance method to the straight-line method.
The effect of this change on ordinary income and income before income taxes and non-controlling interests for the fiscal year
under review is insignificant.

23

THE YAMANASHI CHUO BANK 201723

(Relating to Consolidated Balance Sheets)*1 Shares held or investments in non-consolidated subsidiaries and affiliates
As of March 31, 2017

(Millions of yen)

Investments¥636*2 The amounts of loans to customers in bankruptcy and past due loans included in loans and bills discounted were as follows:
As of March 31, 2017

(Millions of yen)

Loans to customers in bankruptcy¥2,394

Past due loans¥30,707

Loans to customers in bankruptcy represent nonaccrual loans to debtors who are legally bankrupt, as defined in Article 96,
Paragraph 1, Subparagraphs 3 and 4 of Enforcement Ordinance for the Corporation Tax Law. Past due loans are defined
as nonaccrual loans except for loans to customers in bankruptcy and loans of which the interest payments are deferred inorder to assist in the financial recovery of a debtor in financial difficulties.
*3 The amount of accruing loans contractually past due three months or more included in loans and bills discounted was asfollows:
As of March 31, 2017

(Millions of yen)

Past due loans of three months or more

¥30

Accruing loans contractually past due three months or more are loans on which the principal or interest is three months ormore past due.
*4 The amount of restructured loans for which the Bank has relaxed lending conditions included in loans and bills discounted was
as follows:
As of March 31, 2017

(Millions of yen)

Restructured loans for which the Bank has¥3,591

relaxed lending conditions

Restructured loans are loans for which the Bank has relaxed lending conditions, such as: reduction of the original interest
rate, deferral of interest payment, extension of maturity date, or reduction of the amount of the debt or accrued interest.
*5 The total amount of loans to customers in bankruptcy, past due loans, accruing loans contractually past due three months ormore and restructured loans for which the Bank has relaxed lending conditions was as follows:
As of March 31, 2017
Total amount(Millions of yen)
¥36,724

The loan amounts identified in the preceding items (2) to (5) are before deducting any allowance for possible loan losses.
*6 Bills discounted are accounted for as financial transactions in accordance with JICPA Industry Audit Committee Report No. 24,
February 13, 2002, “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 and foreign exchanges bought without
restrictions. The face amount was as follows:
As of March 31, 2017

(Millions of yen)
¥4,487*7 The amount of loan participation recorded in the consolidated balance sheet and included in participated principals that were
accounted for as loans to original debtors in accordance with JICPA Accounting System Committee Report No. 3, November
28, 2014, “Accounting Treatment and Representation of Loan Participation” was as follows:
As of March 31, 2017

(Millions of yen)
¥1,01024
THE YAMANASHI CHUO BANK 201724

*8 Assets pledged as collateral were as follows:
As of March 31, 2017

(Millions of yen)

Assets pledged as collateral
Investment securities¥360,405

Liabilities related to pledged assets
Deposits¥10,277

Payables under securities lendingtransactions¥152,243

Borrowed money¥4,936

In addition to the aforementioned, the following items were pledged as collateral for the settlement of foreign currency
exchange and other transactions:
As of March 31, 2017

(Millions of yen)

Investment securities¥65,060

Moreover, guarantee deposits included in other assets were as follows:
As of March 31, 2017

(Millions of yen)

Guarantee deposits¥297*9 Lease contract assets (the total sum of lease investment assets included in Other assets and interest receivables on lease
investment assets) for the remaining lease periods, which were pledged as collateral for a portion of borrowed money, wereas follows:
As of March 31, 2017

(Millions of yen)

Lease contract assets¥1,050

Corresponding borrowed money¥549*10 Commitment line contracts on overdrafts and loans are agreements to lend to customers when they apply for borrowing, up
to a prescribed amount, as long as there is no violation of any condition established in the contract. The amounts of unused
commitments as of March 31, 2017 were as follows:
As of March 31, 2017
Total amount of unused commitments as ofthe end of the period:
Amount of unused commitments whose
original contract terms were within one year
or unconditionally cancelable at any time

(Millions of yen)
¥367,794¥351,736

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, the Bank 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.
*11 Accumulated depreciation of tangible fixed assets
As of March 31, 2017
Total amount of accumulated depreciation(Millions of yen)
¥33,657*12 Deferred gains on tangible fixed assets deductible for tax purposes:
As of March 31, 2017

(Millions of yen)

Deferred gains¥1,03725

THE YAMANASHI CHUO BANK 201725

*13 The amount of guarantee liabilities for private placement bonds in “Securities” (provided in accordance with the Financial
Instruments and Exchange Act, Article 2, Paragraph 3) was as follows:
As of March 31, 2017

(Millions of yen)
¥1,525(Relating to Consolidated Statements of Income)*1 “Other ordinary income” includes the following item:
From April 1, 2016 to March 31, 2017

(Millions of yen)

Gain on sales stock¥4,644*2 “General and administrative expenses” include the following.:
From April 1, 2016 to March 31, 2017

(Millions of yen)

Salary allowance¥12,406

Depreciation and amortization

2,253*3 "Other ordinary expenses" include the following:
From April 1, 2016 to March 31, 2017

(Millions of yen)

Loss on cancellation of investment trusts¥5,234*4 In the case of the following asset groups, book values were written down to the recoverable levels due to falling land prices
and lower net cash from operating activities, and differences have been recorded as impairment losses.
From April 1, 2016 to March 31, 2017

(Millions of yen)

Location

Use

Category

Total impairment loss

Yamanashi Prefecture

Operating assets

Land and buildings¥226

Idle assets

Land

0

Tokyo

Operating assets

Other tangible fixed
assets

22

Total

―

―

¥249

In this method of asset grouping, operating assets as a rule are treated as business premises units (however businesspremises groups that handle combined businesses are treated as Group units), and idle assets are treated as individual asset
units. Head Office, computing centers, company residences and dormitories, etc., are regarded as shared assets.
Recoverable amounts are whichever is the higher of net selling prices and value in use. In the case of net selling prices, thecalculation 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 uses a 1.6% discount rate for future cash flow.
All of the recoverable amounts for the fiscal year ended March 31, 2016 represent net selling prices.
The calculation of recoverable amounts for the fiscal year ended March 31, 2017 employs a 2.3% discount rate in the case ofvalue in use.

26

THE YAMANASHI CHUO BANK 201726

(Relating to Consolidated Statements of Comprehensive Income)*1 Reclassification adjustment and tax effect related to comprehensive income
From April 1, 2016 to March 31, 2017

(Millions of yen)

Valuation difference on available-for-salesecurities:
Difference arising during the fiscal year

¥ (29,784)

Reclassification adjustment to profit and loss

(4,646)

Amount before income tax effect(34,431)

Income tax effect

10,585

Valuation difference on available-for-salesecurities:(23,845)

Remeasurements of defined benefit plans
Gains (losses) arising during the fiscal year

161

Reclassification adjustment to profit and loss

1,138

Amount before income tax effect

1,300

Income tax effect(395)

Remeasurements of defined benefit plans

904

Total other comprehensive income¥ (22,941)(Relating to Consolidated Statements of Changes in Net Assets)
1 Items to kind and total number of shares outstanding and treasury stocks(Thousands of shares)
Number of shares atthe beginning of
FY2016

Number of shares
increased during
FY2016

Number of shares
decreased during
FY2016

174,915――

174,915

4,794

2,170

10

6,954

Number of shares atthe end of FY2016

Remarks

Shares outstanding
Common stock
Treasury stock
Common stock

Notes 1 Breakdown of increases in the number of shares during the consolidated fiscal year under review is as follows:
Increase by acquisition of treasury stock upon resolution of the board of directors
Increase by purchase claims of less than one unit

2,127 thousand
43 thousand

2 Breakdown of decrease in the number of shares during the consolidated fiscal year under review is as follows:
Decrease by exercise of stock option rights

10 thousand

Decrease by purchase claims of less than one unit

0 thousand

27

THE YAMANASHI CHUO BANK 201727

Note 1,2

2 Matters concerning share subscription rights and own share options

Classification

Breakdown of
share
subscription
rightsThe Bank

Stock options as
share
subscription
rightsClass of shares tobe issued ortransferred upon
the exercise ofshare
subscription rights

Number of shares to be issued or transferred upon the exerciseof share subscription rights (shares)
FY2016
Beginning of
Increase
Decrease
End of FY2016
FY2016

Total

Balance as ofthe end of
FY2016(Millions of yen)

―

¥173

―

¥173

3 Items relating to dividends(1) Dividend paid during FY2016(Resolution)
Annual General
Meeting of
Shareholders on June24, 2016
Board of Directors’Meeting on
November 14, 2016

Total dividend

Dividends per share(Millions of yen)

(Yen)

Common stock¥850

Common stock

765

Type of stock

Reference date

Effective date

¥5.00

March 31, 2016

June 27, 2016

4.50

September 30, 2016

December 5, 2016

(2) Dividends whose reference date falls in the current fiscal year, but where the effective date of dividend occurs after the end of
FY2016.
(Resolution)

Type of stock

Total dividend(Millions of yen)Fund for dividend

Dividends per
share (Yen)

Reference date

Effective date

Annual General
Meeting of
Shareholders on
June 27, 2017

Common stock¥755

Retained earnings¥4.50

March 31, 2017

June 28, 2017

(Relating to Consolidated Statements of Cash Flows)*1 The reconciliation of the cash and due from banks in the consolidated balance sheets and the cash and cash equivalents at
March 31, 2017, is as follows:
Cash and due from banks¥260,999 million

Due from banks, excluding due from Bank of Japan(169) million

Cash and cash equivalents¥260,830 million(Relating to Lease Transactions)
Finance leases(Lessor)
1. Details of net investment in leases for the year ended March 31, 2017 are as follows:(Millions of yen)
Gross lease receivables¥7,895

Estimated residual value

87

Unearned interest income(690)

Net investment in leases¥7,29328

THE YAMANASHI CHUO BANK 201728

2. Expected amounts from the collection of gross lease receivables for the year ended March 31, 2017 are as follows:(Millions of yen)
1 year or less

¥2,476

1 to 2 years

1,959

2 to 3 years

1,481

3 to 4 years

1,000

4 to 5 years

545Over 5 years

431

Total

¥7,895(Financial Instruments and Related Disclosure)
1. Qualitative Information of Financial Instruments(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 securities trading, as well as
domestic and foreign exchange operations, corporate bond underwriting, the over-the-counter sale of public bonds such as
Japanese government bonds, investment trusts and insurance. In addition, for the purpose of short-term fund raising, we
enter into call loans and call money in the interbank market. In hedging foreign exchange risk and finance and using different
currencies, we enter into arrangements such as forward exchange contracts and currency swap transactions. However, we
do not conduct transactions whose structures are complicated and speculative transactions. Because we hold financial
assets and liabilities with interest rate risk, we conduct Asset Liability Management (ALM) to limit the disadvantageous
influence from fluctuations in interest.
(2) Nature and extent of risks arising from financial instruments
The financial assets that the Group holds are loans for domestic customers and domestic and foreign securities. Loans havecredit risk, brought about by the borrower’s nonperformance of contractual obligations. The contents of 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 (business promotion). Securities have issuer’s credit risk, interest rate risk and market
price risk.
The Group regards the deposits from customers as its main supply of financial funds. The Group secures stable financing
by maintaining the soundness of financial affairs, but has liquidity risk that it may not be possible to obtain 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. Hedge
accounting is applied for derivative transactions that meet the requirements of hedge accounting based on internal standardsin accordance with JICPA Industry Audit Committee Report No. 25, July 29, 2002, “Treatment of Accounting and Auditing
concerning Accounting for Foreign Currency Transactions in the Banking Industry.”(3) Risk management systems for financial instruments① 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 independent and 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 the headquarters and businessoffices perform mutual check functions. The Group tries for the observance of the financing rule and appropriate use andthereby acts in enhancement of system support such as the practical use of the financing support system. Furthermore, for
coping with risk fluctuating continually, the Group monitors the actual condition of customers through credit rating and self

29

THE YAMANASHI CHUO BANK 201729

assessment to be performed regularly or at any time. The Group introduced the “Credit risk information integration service”
that is a joint undertaking of the banks that joined the Regional Bank Association to attempt to upgrade credit risk
management and is aiming at refining measurement of value at risk (VaR).
We monitor credit information, current-prices and VaR and manage the credit risk of issuers of securities andcounterparty 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 and theboard of directors.
② Market risk management(A) Interest-rate risk management
The Group supports the needs of customers properly and, for the earning capacity improvement of the bank, conducts
interest rate risk management as a basic policy. We devised “the basic policy for the interest rate risk hedge” as a
general rule every half term to control interest rate risk properly in the ALM Committee in which management is involved
as the main members and involved in examining interest rate changes and reviews it regularly. In addition, in the ALM
committee meeting held monthly, the Group examines an interest rate predictive report that the interest rate prediction
committee produces and monitors the change in the interest rate risk amount of the whole bank account closely. In therisk management section, the Group calculates VaR and basis point value (BPV) and manages the interest rate risk
amount of the banking account. In addition, the Group performs stress tests based on a stress scenario extending toeach risk category. These results are reported to management regularly in the ALM Committee and the board of
directors.
(B) Foreign exchange risk management
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. The majority offoreign exchange risk is hedged by forward exchange contracts.
(C) Market price risk management
Regarding investment in financial instruments including securities, the Group conducts risk management in conformity
with a basic administration policy. The basic administration policy is as follows. The Group executes the market businesswhile attempting to secure fairness and prompt correspondence. The Group takes the opportunity for earnings byactively taking risks that can be measured and managed. The proof of maximizing management vitality, like earnings andequity capital, are 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, the Group examines the expected rate of return based on the prospect of interest rate and stock
prices, market price risk and return in consideration of the correlation between the financial instruments invested in. The
Group measures 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) Derivative transactions
For derivative transactions, the aim is for maintenance of strong management so as not to exert a negative influence on
profit and loss, and the Group tries to set position limits and operate loss-cut rules strictly based on the risk management
standard. Moreover, the Group reports regularly to management in the ALM committee and the board of directors, etc.
(E) 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 amanner 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

30

THE YAMANASHI CHUO BANK 201730

(excluding trading account securities) while taking into consideration the correlation among interest rates for shares andinvestment trusts. In addition, with respect to the yen-denominated interest 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 holding period of 10 days. Financial instruments that areconsidered to have little relevance to market risks, including shares of non-listed companies, are managed on a credit
risk basis. Taking into consideration the nominal amount of market risk applicable to the financial instruments held byconsolidated subsidiaries, these financial instruments are excluded from the scope of VaR measurement.
The Group’s VaR (excluding trading account securities) amounted to ¥42,632 million as of March 31, 2017 comparedwith ¥62,133 million as of the end of the previous fiscal year. The VaR of trading account securities amounted to ¥0
million. (There was no VaR of trading account securities in the previous fiscal year). The Group undertakes backtesting tocompare VaR, calculated using VaR measurement models with actual income and loss. The results of this comparison
are reported to the ALM Committee on a monthly basis. As a result of this backtesting, the Group is confident that the
VaR measurement models used are more than adequate in accurately identifying market risks. However, VaR represents
the amount of market risks arising with a certain probability using a statistical methodology based on historical market
volatilities. Accordingly, situations may arise where it is not possible to identify risks appropriately due to market
environment volatility that exceeds normally recognized parameters.
③ Liquidity risk management
The Group controls liquidity risk by managing the mismatch between the terms of investing and procuring funds as well as
holding highly liquid assets. Financing risk is limited by holding assets with high liquidity as payment reserves forunexpected capital outflows, and a smooth financing resource is secured. Moreover, the Group reports regularly to
management in the risk management committee and the board of directors, etc.
(4) Supplementary explanation of the fair value financial instruments
The fair value of financial instruments includes, in addition to the value based on the market price, the value reasonably
calculated if no market prices are available. Certain assumptions are used in the calculation of such amounts. Accordingly,
the results of such calculations may vary if different assumptions are used.

31

THE YAMANASHI CHUO BANK 201731

2. Fair Values of Financial Instruments
Fair value and carrying amounts of financial instruments are shown below. Some instruments, such as unlisted stocks, whose fairvalues are extremely difficult to determine, are not included in the table below (see Note 2).
(Millions of yen)
Carrying amount

Fair value

Difference(1) Cash and due from banks¥260,999¥260,999¥―(2) Call loans and bills bought

192,933

192,933

―

9

9

―

1,525

1,528

3

1,238,952

1,238,952―

1,526,595

1,535,228

8,632

Total

¥3,221,015¥3,229,651¥8,635(1) Deposits¥2,800,429

2,800,964

129

61,863

61,864

1

152,243

152,243―¥3,014,941¥3,015,072¥130(2,782)(2,782)

―

―

―

―

¥(2,782)¥(2,782)¥―(3) Trading account securities
Trading securities(4) Securities
Held-to-maturity
Available-for-sale securities

1,541,651(5) Loans and bills discounted
Accrued income (Interest on loans)

575

Deferred income (Interest on loans and guarantee
charge) (*1)(811)
(14,819)

Reserve for possible loan losses (*2)

405

Accrued expenses (Interest on deposits)

2,800,834
61,861(2) Negotiable certificates of deposits

2

Accrued expenses (Interest on NCDs)(3) Payables under securities lending transactions
Total
Derivatives (*3)
Hedge accounting is not applied
Hedge accounting is applied
Total*1. Represents deferred interest received on loans and deferred guarantee fees received from a consolidated subsidiary performing guarantees
on the Bank’s loans to customers.
*2. General reserve for possible loan losses and specific reserve for possible loan losses provided to “Loans and bills discounted” are separately
presented in the above table.
*3. Derivative transactions recorded in “Other assets” and “Other liabilities” are aggregated and shown herein. Assets and liabilities attributable tothe derivative transactions are totally offset and the net liability position as a consequence of offsetting would be represented with brackets.

(Note 1) Method Used for Determining the Fair Value of Financial Instruments
Assets(1) Cash and due from banks
For due from banks without maturity, fair value is the value closest to acquisition cost or amortized cost. For due frombanks with maturity, the contract period is short (less than one year) and fair value is the value closest to acquisition cost or

32

THE YAMANASHI CHUO BANK 201732

amortized cost.
(2) Call loans and bills bought
The fair values of fixed-rate loans and bills discounted whose terms are short (within one year) approximate theiracquisition cost or depreciable cost, and the fair values are therefore deemed equal to these values.
(3) Trading account securities
The fair values of securities such as bonds that the Bank holds for engaging in dealing are determined by reference toquoted market price on stock exchanges or prices offered by correspondent financial institutions.
(4) Securities
The fair values of stocks are determined by reference to quoted market prices on stock exchanges. The fair values ofbonds are determined by reference to quoted market prices or prices offered by correspondent financial institutions. The
prices of the Bank’s guaranteed private placement bonds are calculated by discounting the estimated future cash flows foreach classification based on the issuers’ internal rating and terms by using the risk-free interest rates plus credit cost rates
and expense rates. Investment trusts are determined by reference to their publicly available net asset value.
Information outlining notes for investment securities according to the purpose for which they are held is contained under“Relating to securities.”(5) Loans and bills discounted
As floating-rate loans and bills discounted reflect market interest rates over short periods, unless the credit standing of theborrower is significantly different after the loan was made or the bill was drawn, the fair value approximates the carrying
value. The fair value is therefore deemed equal to the carrying value.
The fair values of fixed-rate loans and bills discounted are their present values that are estimated for each classification
based on their type, internal rating, status of collateral and guarantee, and terms, and by discounting the future cash flowsof the principal and interest using the rates at which similar new loans would be made or market interest rates plus credit
cost rates in accordance with internal ratings and expense rates. The fair values of fixed-rate loans and bills discounted
whose terms are short (within one year) approximating their carrying values and are therefore deemed equal to thecarrying values.
Losses from loans to borrowers in legal bankruptcy, in virtual bankruptcy and in possible bankruptcy are computed
based on estimated recoverable amounts. Thus, the fair values of those loans approximate the consolidated balance sheet
amounts at the closing date minus the currently estimated losses and are therefore deemed equal to the amounts.
The fair values of loans and bills discounted for which repayment terms are not set because of their attributes (e.g.
loans are limited to the amounts of pledged assets) are assumed to approximate their carrying values, considering the
expected repayment periods and interest rate conditions, and are deemed equal to the carrying values.
Liabilities(1) Deposits and (2) Negotiable certificates of deposit
The fair values of demand deposits are deemed equal to the amounts that would be paid (carrying values) if the payments
were demanded at the balance sheet date. The fair values of time deposits and negotiable certificates of deposit, which areclassified in accordance with their periods, are their present values that are estimated by discounting the future cash flows
using the rates that would be offered for new deposits to be received.
The fair values of deposits and negotiable certificates of deposit with short deposit terms (within one year) or withvariable interest rates approximate their carrying values and are deemed equal to their carrying values.
Derivatives
Derivative transactions are listed under “Relating to derivative transactions.”

33

THE YAMANASHI CHUO BANK 201733

(Note 2) Financial instruments, whose fair values are extremely difficult to be determined, are recorded on the
consolidated balance sheet are as follows: The following instruments are not included in ‘Assets (3) Securities’in the above table showing the fair values of financial instruments as of March 31, 2017.
(Millions of yen)
Carrying amountUnlisted equity securities (*1) (*2)¥537

Contributions to unions (*1) (*3)

636

Total

¥1,173*1. They are excluded from disclosure because they do not have a market price and their fair values are extremely difficult to determine.
*2. Classified as available-for-sale securities; in the consolidated fiscal year under review, an impairment loss of ¥1 million was recognized.
*3. Investment in non-consolidated subsidiaries.

(Note 3) Maturity analysis for monetary claims and securities with contractual maturities(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 less10 years

Over 10 years

Due from banks¥222,839

¥―

¥―

¥―

¥―

¥―

Call loans and bills
bought192,933

―

―

―

―

―

Securities

102,806

98,786

142,723

249,764

166,768

26,465

448

543

184

350

―

―

Held-to-maturity

448

543

184

350

―

―

Available-for-salesecurities that havematurities
Japanesegovernment bonds

102,358

98,242

142,539

249,414

166,768

26,46549,20025,00063,70087,100

121,400

20,000

Municipal bonds

37,72850,22537,48023,558

6,578

6,465

Corporate bonds

15,429

9,554

8,411

12,1275,133―

Corporate bonds―

13,462

32,947

126,628

33,657―Loans and bills
discounted (*)

350,276

286,926

227,568

147,438

143,016

222,037

Total¥868,855¥385,713¥370,291¥397,203¥309,784¥248,503

Others* 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 ¥33,102 million, is not included in the above table. Loans that do not have contractual
maturities, amounting to ¥131,071 million are not included either.

34

THE YAMANASHI CHUO BANK 201734

(Note 4) Maturity analysis for interest-bearing debt
(Millions of yen)Over 1 year less
3 years

Over 3 years less
5 years

Over 5 years less
7 years

Over 7 years less10 years

Over 10 years¥2,419,445¥200,317¥99,624

¥―

¥―

¥―

61,861

―

―

―

―

―

152,243

―

―

―

―

―

¥2,633,550¥200,317¥99,624

¥―

¥―

¥―

1 year or less
Deposits (*)
Negotiablecertificates ofdepositPayables under
securities lendingtransactions
Total* Non-interest-bearing deposits such as checking accounts are excluded. Demand deposits are included in “1 year or less.”(Relating to securities)
1. Trading securities(Millions of yen)
Unrealized gains/losses recognized as income
Trading securities

0

2. Held-to-maturity debt securities(Millions of yen)
Carrying amount

Fair value

Differences

Fair value exceeded carrying amount:

Corporate bonds¥1,095¥1,099¥3

Fair value not exceeded carrying amount:

Corporate bonds

430

429

(0)

¥1,525¥1,528

¥3

Total

35

THE YAMANASHI CHUO BANK 201735

3. Available-for-sale securities(Millions of yen)
Fair value

Cost

Japanese stocks¥62,728¥30,228¥32,499

Bonds total

609,632

584,731

24,901

Japanese Government bonds

401,943

381,964

19,978Japanese municipal bonds

156,882

153,241

3,640Japanese corporate bonds

50,80749,525

1,282

207,925

197,560

10,36464,45164,086365

880,286

812,520

67,765

132

155

(23)

10,007

10,019

(11)

―

―

―

Japanese municipal bonds

8,884

8,889

(4)

Japanese corporate bonds

1,123

1,130

(6)

348,526

360,093(11,566)

140,171

141,240(1,068)358,666

370,268(11,601)¥1,238,952¥1,182,789¥56,163

Fair value exceeded
cost:

Other securities
Foreign securities
Sub-total
Japanese stocks
Bonds total
Japanese Government bonds
Fair value notexceeded cost:

Valuation differences

Other securities
Foreign securities
Sub-total
Total

Note: Unlisted stocks that have a fair value and cost of ¥537 million, respectively, are excluded from the table above since there are no market
prices and their fair values are extremely difficult to be determined.

4. Held-to-maturity debt securities sold(Millions of yen)Type

Sales costs

Japanese corporate bonds

Sales proceeds

Gains on sales

¥―

¥―

¥―

The above securities were sold due to redemption by the issuer.

5. Available-for-sale securities sold(Millions of yen)Type

Sales costs

Gross realized gains

Gross realized losses

Japanese stocks¥9,543¥4,055¥96

Bonds total

149,9283,484

95

Japanese Government bonds

54,059

3,383―

Japanese municipal bonds

95,868

100

95

Japanese corporate bonds

―

―

―

107,890

2,215

734

93,086573

718¥267,362¥9,755¥926

Other securities
Foreign securities
Total

36

THE YAMANASHI CHUO BANK 201736

6. Securities recognized for revaluation loss
Among securities other than securities for trading purposes (except securities for which the fair value is extremely difficult toascertain), 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 treated as
an impairment loss (“revaluation loss”) in the consolidated year under review.
No revaluation loss was recognized during the previous fiscal year.
No revaluation loss was recognized during the consolidated fiscal year under review.
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 isdeemed that there is little likelihood of a recovery in value after taking into consideration fair value levels over the pastyear.
(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 Net Unrealized Gains/Losses on Available-for-Sale Securities)
Available-for-sale securities were valued at market and net unrealized gains/losses on valuation were as follows:(Millions of yen)Amounts
Valuation difference¥56,163

Other securities

56,163

Deferred tax liabilities

16,849Net unrealized gains (before non-controlling interests)

39,313154

Non-controlling interests¥39,159

Net unrealized gains on available-for-sale securities

37

THE YAMANASHI CHUO BANK 201737

(Relating to Derivative Transactions)
1 Derivative instruments not accounted for as hedges
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 consolidatedbalance sheet date, and Determination of fair value are as follows. Contract or Notional Amounts do not show market risk ofderivative instruments.
(1) Interest-related derivative instruments
Not applicable(2) Currency-related derivative instruments(Millions of yen)Contract Amount or
Notional AmountCurrency swaps

Over 1 Year

Fair Value

Unrealized Gain/Loss¥23,031

23,031

¥509

¥509

Sold

117,583―(3,894)(3,894)

Buy

51,524

―

602

602

Total

―

―

¥(2,782)¥(2,782)

Forward Rate Agreements
OTC(Notes)1 Derivative instruments are revalued to fair value. Changes in fair value are included in the consolidated statement of operations.
2 Determination of fair value:
Fair value is determined based on the discounted net present value model.

(3) Stock-related derivative instruments
Not applicable(4) Bond-related derivative instruments
Not applicable(5) Commodity-related derivative instruments
Not applicable(6) Credit derivative transactions
Not applicable
2 Derivative Instruments accounted for as hedges
Not applicable38

THE YAMANASHI CHUO BANK 201738

(Relating to Employees’ Retirement Benefits)
1. Outline of employees’ retirement benefits
To provide for employees’ retirement benefits, the Bank has a funded defined benefit pension plan. The defined-benefit
corporate pension plan (funded plan) pays a lump sum or a pension based on employee compensation and length of service.
The defined benefit corporate pension plan has within it a retirement benefit trust.
The lump-sum retirement plan (an unfunded plan, but as a result of the establishment of the retirement benefit trust, it has
become a funded plan) pays a lump sum based on employee compensation and length of service.
2. Funded defined benefit pension plan
(1) Reconciliation of retirement benefits obligations at beginning of year and end of year
(Millions of yen)
Retirement benefit obligations at beginning of year

¥30,976

Service cost

1,112Interest cost

125

Actuarial gains and losses

187

Retirement benefits payment(1,266)

Past service cost

―

Other

―

Retirement benefits obligations at end of year

¥31,136(2) Reconciliation of pension assets at beginning of year and end of year
(Millions of yen)
Pension assets at beginning of year

¥26,824

Expected return on plan assets

714

Actuarial gains and losses

349

Employer's contribution

815

Retirement benefits payment

(698)

Other

―

Pension assets at end of year

¥28,004

39

THE YAMANASHI CHUO BANK 201739

(3) Reconciliation of retirement benefits obligations and pension assets at end of year and liabilities and assets of retirement
benefits recorded in the consolidated balance sheets(Millions of yen)
Retirement benefits obligations of funded plan

¥31,136

Pension assets(28,004)
3,131

Retirement benefits obligations of unfunded plans―

Assets and liabilities recorded in consolidated balance sheets, net¥3,131(Millions of yen)
Liability of retirement benefits¥3,131

Assets of retirement benefits―

Liabilities and assets recorded in the consolidated balance sheets, net¥3,131(4) Breakdown of retirement benefit costs(Millions of yen)
Service cost

¥1,112

Interest cost

125

Expected return on plan assets(714)

Actuarial gains and losses recorded in expenses

1,154

Past service costs recorded in expenses

(16)

Other

―

Retirement benefit costs of defined benefit plan

¥1,662(5) Remeasurements of defined benefit plans
Breakdown of items (before tax-related effects) recorded in remeasurements of defined benefit plans are as follows:(Millions of yen)
Past service costs¥16

Actuarial gains and losses(1,316)

Other―

Retirement benefit costs of defined benefit plan¥(1,300)

40
THE YAMANASHI CHUO BANK 201740

(6) 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:(Millions of yen)
Unrecognized past service costs¥(48)

Unrecognized actuarial gains and losses

5,746

Other

―

Retirement benefit costs of defined benefit plan

¥5,698(7) Pension assets
1. The percentage of each main category for total pension assets is as follows:
Stocks

38％

Bonds

41％

Life insurance general account

10％

Other

11％

Total

100％

Note: Included in total pension assets is 12% (compared with 11% in the previous fiscal year) for retirement benefit trusts
established in the corporate pension plan, and 29% (compared with 30% 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 projected pension
assets allocations, as well as the current and expected long-term rate of return for the various assets that make up thepension assets.
(8) Basis for calculating actuarial calculations
Basis for calculating main actuarial calculations (weighted average)
Discount rate

0.4%

Long-term expected rate of return on plan assets

2.6%

Rate of salary increase
Defined-benefit corporate pension plan

3.6%

Lump-sum retirement plan

3.5%

41

THE YAMANASHI CHUO BANK 201741

(Stock options and other related information)
1. Accounting line item and the amount of stock options charged as expenses(Millions of yen)
Consolidated FY2016(From April 1, 2016 to March 31, 2017)
General and administrative expenses¥44

2. Description of stock options / Changes in the size of stock options(1) Description of stock options
2016 Stock Options
Category and number of people to whom stock options are granted

The Bank’s directors (excluding outside directors): 13

Type and number of shares granted as stock options

Common stock: 110,800 shares

Date on which stock options were granted

July 29, 2016

Vesting terms and conditions

Vesting terms and conditions have not been prescribed

Vesting period

Vesting period has not been prescribed

Exercise period

July 30, 2016 to July 29, 2046

Note: The number of stock options is presented after converting to the number of shares.

(2) 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, 2017. The
number of stock options is converted into the number of shares.
①

Number of stock options
2016 Stock Options

Stock options which are not yet vested (shares):
As of March 31, 2016―

Granted110,800

Forfeited―

Vested110,800

Balance of stock options not vested―

Stock options which have already been vested (shares):
As of March 31, 2015―

Vested110,800

Exercised―

Forfeited―

Balance of stock options not exercised②

110,800

Per share price information
2016 Stock Options

Exercise price (Yen)1

Average price per share upon exercise (Yen)―Fair value per share at the grant date (Yen)

405

42

THE YAMANASHI CHUO BANK 201742

3. Method for estimating the per share fair value of stock options
During the fiscal year ended March 31, 2017, the fair value per share with respect to 2016 stock options was estimated asfollows:(1) Evaluation technique used to estimate the fair value per share: Black-Scholes method(2) Main numerical and estimation methods
2016 Stock Options
Stock price volatility (Note 1)

36.5％

Projected residual period (Note 2)

30 months

Projected cash dividends (Note 3)¥10.00/share

Risk-free interest rate (Note 4)(0.36)％

Notes:
1. Stock price volatility is calculated based on the stock price performance for the period (weekly from the week of January 20, 2014 to theweek of July 25, 2016) that corresponds to the projected residual period.
2. The projected residual period is estimated based on the average period in office of directors (excluding outside directors) who have retiredin the past.
3. Projected cash dividends are based on cash dividend results for the fiscal year ended March 31, 2016.
4. The risk-free interest rate is the yield on government bonds for the period that corresponds to the projected residual period.

4. Estimation method for the number of stock options vested
Because it is difficult to reasonably estimate the number of stock options that will be forfeited in the future, the number of stock
options that has actually been forfeited is solely reflected for the stock options that have already been vested.

(Relating to tax effect accounts)
1. The tax effects of significant temporary differences and tax loss carry-forwards which resulted in deferred tax assets andliabilities are as follows:(Millions of yen)
Consolidated FY2016(From April 1, 2016 to March 31, 2017)
Deferred tax assets:
Net defined benefit liability¥4,331

Allowance for possible loan losses

4,308

Losses on investment securities

1,477
605

Depreciation
Other

1,989

Sub-total

12,712

Valuation allowance(4,244)

Total deferred tax assets

8,468

Deferred tax liabilities:(16,849)

Unrealized gains on available-for-sale securities

(749)

Other
Total deferred tax liabilities(17,598)

Net deferred tax assets (figures in parentheses represent liabilities)¥(9,130)

43

THE YAMANASHI CHUO BANK 201743

2. A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying
consolidated statements of income is as follows:
Consolidated FY2016(From April 1, 2016 to March 31, 2017)
Normal effective statutory tax rate

30.7％

Valuation allowance(8.2)％

Income not taxable for income tax purposes(0.9)％

Expenses not deductible for income tax purposes

0.4％

Other—net

1.0％

Actual effective tax rate

23.0％

(Segment information by type of business)【Segment information】
Segment information is not shown in these statements, since the banking business is the only reportable segment.
【Related information】
1 Information for service segment(Millions of yen)
Loans
Ordinary income from
customers

Securities investment¥17,646

Other¥26,407

Total¥11,682(Note) Instead of the net sales of a non-financial company, ordinary income in gross is indicated.

2 Information for geographic areas
Not disclosed.
3 Information about major customers
Not disclosed.
【Information about impairment loss of fixed assets in segment】
Not disclosed.
【Information about the amortization of goodwill and unamortized balance by reportable segment】
Not applicable.
【Information about the gain recognized on negative goodwill by reportable segment】
Not applicable.

44

THE YAMANASHI CHUO BANK 201744

¥55,736

【Related-Party Transactions】
1. Related-party transactions involving directors, corporate auditors and major stockholders (individuals only) of the Bank.
(Millions of yen)
Relationship

Statutory
auditorDirector’s
consortName

Address

Toshihito
FuruyaMayumi
Nagasaka

Votingrights [%]Details of
businessrelationship

Corporate
auditor of theBank,simultaneously
serving as legal
advisor

0.01

Lending
Compensation
for legal
advisory
services

Director’s consortof the Bank―

Paid-in
capitalPosition

―

―

―

―

Lending

Transactions

Transaction Accounting Year-end
amountnamebalanceLending
Interest
incomeLegaladvisoryfee paid
Lending
Interest
income

―

Loans

101

2

―

―

3

―

―

―

Loans

29

0

―

―

Note: The conditions as applied to general parties with which the Bank enters into transactions are applied.

(Per Share Information)(Yen)
Consolidated FY2016(From April 1, 2016 to March 31, 2017)
Net assets per share¥1,277.73

Net income per share

42.95

Diluted net income per share

42.85

Note: The basis for calculating net income per share and diluted net income per share is presented as follows.
(Millions of yen)
Consolidated FY2016(From April 1, 2016 to March 31, 2017)
Net income per share
Net income¥7,282

Net income attribute to common stock¥7,282Average balance of common stock (thousands)

169,514

Diluted net income per share
Increase in the number of common stock (thousands)

402

New share subscription rights (thousands)

402(Important subsequent events)
Not applicable.

45

THE YAMANASHI CHUO BANK 201745

Corporate Data(as of March 31, 2017)

Common Stock: ¥15,400 million

Breakdown of Stockholders

Number of Shares :	Authorized 398,000,000 shares
Issued		
174,915,000 shares

Financial institutions 68,633
Securities companies 1,701
Other corporations
31,378Foreigners
23,013
Individuals and others 49,101

Total

174,915

Number of
Stockholders: 5,731

Stock Listing: First Section of the Tokyo Stock Exchange

Transfer Agent: Mitsubishi UFJ Trust & Banking Corporation

shares39.48%
0.98%
18.05%
13.24%
28.25%*Shares (1 trading unit: 1,000 shares)
Note: The category “Individuals and others” contains treasury
stock of 2,631 trading units of shares.

Major Stockholders
Name

Number of shares held
(thousands)

Percentage of
all shares issued (%)

10,958
6,047
5,651
5,169
3,290
3,264
3,000
3,000
2,977
2,741
46,099

6.26
3.45
3.23
2.95
1.88
1.86
1.71
1.71
1.70
1.56
26.35

Japan Trustee Services Bank, Ltd. (Trustee Account)
Meiji Yasuda Life Insurance Company
The Yamanashi Chuo Bank, Ltd. Employees’ Stockholdings
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Master Trust Bank of Japan, Ltd. (Trustee Account)
CBNY DFA INTL SMALL CAP VALUE PORTFOLIO
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Fukoku Mutual Life Insurance Company
Teikyo University
CBNY-GOVERNMENT OF NORWAY
Total

Yamanashi Chuo Bank’s Share Price and Trading Volume on the Tokyo Stock Exchange
2,000Tokyo Stock Price Index (TOPIX)

1,500
1,000
500

800

Yamanashi Chuo Bank’s share price (yen)

600
400

9,000
6,000

200

Trading volume (thousands)

3,000
0

Apr.
2015

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2016

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2017

Feb.

Mar.

Consolidated Subsidiaries
Tokyo Stock Price Index (TOPIX)
Name

1,592.79
Yamanashi Chuo Guarantee
Co., Ltd.
1,673.65
Yamanashi Chugin Lease Co., Ltd.
1,630.40
Yamanashi Chugin DC Card
Co., Ltd.
1,659.52
1,537.05
Yamanashi Chugin Management
Consulting Co., Ltd.
1,411.16
1,558.20
1,580.25
1,547.30
1,432.07
1,297.85(yen)
Yamanashi
share price
Chuo
Capital Chuo Bank’sYamanashi
Bank’s share (%)(Millions of yen)

559
570
579
568
594
623
569
641
620
THE YAMANASHI CHUO BANK 201746 561
400

20
20
20
200

99.8
61.0
67.5
87.5

Trading volume (thousands)

Lines of business

3,784
Loan guarantees
3,491
Leasing
4,354
Credit cards 3,131
4,663
Consulting, economic
research
3,681
3,709
4,381
3,932
3,199
5,894

Board of Directors and Corporate Auditors(as of July 1, 2017)

ChairmanManaging Directors

Directors

Standing Corporate Auditors

Nakaba Shindo

Tatsuyuki Miyake
Fumiaki Asakawa
Kazuhiko Kitta

Takeshi Nakajima
Hisanobu Yoshizawa
Hirohiko Yanada
Kimihiro Asai
Yukio Osada
Yutaka Fujita
Norihiko Tanaka
Michio Masukawa
Riyo Kano

Masaki Saito
Akira Omata
Corporate Auditors
Magozaemon Takano
Toshihito Furuya
Koichiro Horiuchi

President

Mitsuyoshi Seki
Senior Managing Director

Kimihisa Tanabe

Organization(as of July 1, 2017)

Annual General Meeting of Shareholders
Corporate Planning
Board of Directors

Chairman

Personnel Division
Planning and
Administration

Corporate
Administration

Management Control Division
General Affairs Division

President
Deputy President
Senior Managing Director

Credit Screening

Credit Screening Division

Financial Markets

Financial Market Division
Business Promotion Division

Managing Directors
Business Planningand Control
Department

Directors
Non-Standing Director

Corporate Planning DivisionMarketing(in charge of International Division)

Corporate Sales Promotion Division
Retail Sales Promotion Division
Operation Administration Division

Operations

Systems Administration Division

Board of Corporate Auditors
Central Operations Division
Standing Corporate Auditors
Corporate Auditors

Secretariat

Office of Corporate Auditors

Tokyo Liaison Office
Auditing Division

Auditing

Branches
THE YAMANASHI CHUO BANK 201747

Internal Control and Risk Management
Enhancing corporate governanceto the prosperity of the regional community and the developmentof its economy.
To this end, the Bank has built a stronger internal control system

Guided by its social responsibility as a banking institution and its
public-service mission in that role, Yamanashi Chuo Bank aims

and organizational structure, along with working to enhance cor-to secure the trust of various stakeholders, including customers,

porate governance, notably by maintaining high ethical standards

shareholders, staff members and the community it serves, by suchamong all management and staff members, and ensuring themeans as maintaining the Group’s sound management and assur-

active disclosure of corporate activities.

ing transparency of management, in conjunction with contributing

The structure of the internal control system
General Meeting of Stockholders
Board of Corporate Auditors

Board of Directors
ChairmanStanding Corporate Auditors

President

Non-Standing Director

Deputy President

Corporate Auditors

Senior Managing Director

Office of Corporate Auditors

Board of Managing Directors

Managing Directors
Directors

Independent Auditors
Auditing Division

Compliance Committee Risk Management Committee
Head Office Divisions
All Branches

Group Companies

Risk management

ethics, to meet the demands and expectations of the broader

The operating environment for financial institutions is changing

entails adapting adroitly to changes in society as we strive toconstantly, and banks consequently face a diversifying array ofensure the protection of customer rights and the enhancement of

increasingly complex risks. To secure a steady earnings stream into

convenience.

community as a corporate citizen. In other words, compliancethe future, it is therefore essential for the Bank to accurately ascer-

At the Yamanashi Chuo Bank, we assign a high management

tain the monetary value of the various risks involved in the conduct

priority to compliance. To maintain and reinforce the relationshipof its banking operations, and then to continuously monitor andof trust we enjoy with our customers, we have set up a compliancemanage those risks.

management system headed by the Compliance Committee, andwe work constantly to further strengthen our compliance stance.

The risks to which the Bank is exposed are broadly categorized
for management purposes as credit risk, market risk, liquidity

To supervise and monitor compliance-related matters at all therisk and operational risk. To ensure integrated risk appraisal andBank’s offices, compliance officers have been appointed in eachanalysis, the Bank’s ALM committee and the Risk Management

department at the Bank’s Head Office and at each branch. We

Committee assess the possible impact of risk materialization on the

conduct the Compliance Program every fiscal year to establish an

Bank’s operations and work out countermeasures. The Bank uses a

effective compliance framework.
We conduct the Compliance Program every fiscal year tosystem of risk-adjusted capital allocation to ensure the soundness

establish an effective compliance framework. The program laysof banking operations and effective use of capital.

out concrete steps to realize compliance with the provisions ofComplianceparticular laws and regulations, as well as compliance training
courses. The staff at the Bank’s Head Office departments and its

With regard to compliance, we believe that our duty is not solely tobranch offices are working together to ensure adequate compli-

abide by the law, but also to ensure the strict observance of a wideance throughout the Bank.

range of social rules, including social norms (ethics) and business
THE YAMANASHI CHUO BANK 201748

20-8, Marunouchi 1-chome,
Kofu, Yamanashi 400-8601, Japan
Phone: 055-233-2111
URL: https://www.yamanashibank.co.jp/