ANNUALREPORT

2022

Purpose (Significance of Existence)

Open Up a Bright Futurefrom Yamanashi

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

Preparations forHigh-Speed Transportation Network
Expected
Effects

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

Shinkansen Maglev Train

12

Map of Shinkansen Maglev Train Route•	Oct. 2014: Minister of Land, Infrastructure,
Transport and Tourism approved the start ofconstruction, with opening planned for 2027.

3

Scheduled to start operation in 2027

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

Yamanashi
Prefecture

Nakatsugawa

Yamanashi Maglev Test Line

NagoyaOsaka•	Mar. 2017: Yamanashi Prefecture creates “Linear
Environmental Future City Improvement Policy.”•	Apr. 2018: Construction began on the Yamanashi
section of the Southern Alps Tunnel (mail line).

4

Nara

(*) Station locations further west of Nagoya are
undecided.

Traveltime•	Nov. 2019: Construction began on Kanagawa
Prefecture Station (tentative name)

Local
Industries

Shinagawa

Kofu

Sagamihara• Jan. 2016: Shinagawa Station construction began.
•	Nov. 2016: Construction began on the Nagano
section of the Southern Alps Tunnel.

Iida

Shinagawa – Kofu
25 minShinagawa – Nagoya 40 min
Shinagawa – Osaka 67 min

Chubu Odan Expressway
Saku-Komoro
JCT

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

Yachiho5Chuo Expressway

6

Connected to Kanetsu
Expressway bound for
Saitama and Hanazono

Nagasaka

Chubu Odan Expressway

OkegawaKitamoto IC

Nishi Kanto Expressway

Ken-O Expressway

FutabaHachioji JCT

OtsukiShiraneKofu

Takaosan IC

Minami-Alps
MasuhoChuo Expressway
Rokugo

7

1

8

Wine

22.8% share of shipment amount ranks secondin Japan. Yamanashi wine was designated for a
special label by the National Tax Agency.
4

FruitsHarvest of grapes, peaches and Japanese plums
ranks first in Japan.
7ii

Knit Products
THE YAMANASHI CHUO BANK 2022

2

9Silk Fabric

Shipment amount of down quilts ranks third inJapan.

5

Jewelry

Shipment amount of jewelry ranks second in Japan.

8

Sake

3

Traditional Japanese Paper

Shipment amount of shoji paper and calligraphy
paper ranks third in Japan.

6

Mineral Water

38.8% share of shipment amount ranks first inJapan.
9

Fujiyoshida

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

Inden Leather

Nakatomi
ShimobeOnsen
Hayakawa

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

Minobusan

Whole route opened to traffic onAug. 29, 2021

Shin-Tomei
Expressway

SagamiharaAikawa IC

Ebina IC

Subashiri IC

Nanbu

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

Higashifujigoko Road

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

Gotenba IC
Gotenba JCT

Tomizawa
Shin-Shimizu
JCT

Tomei Expressway

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

Our Mission

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

Region-Based Operations and Sound Management

Millions of yen

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

2018

2019

2020

2021

2022

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

Ordinary income

54,12052,35344,87849,602

46,310economy, with a commitment to sound management that enjoys the trust of ourOrdinary profit

7,570

7,458

6,726

6,229

6,624

Profit attributable to shareholders of the parent

4,920

4,908

3,764

3,090

4,241

Comprehensive income

2,135

6,740

(20,412)22,851(8,867)

Net assets

217,311

222,388

199,661

221,439

211,494

Total assets

3,306,502

3,480,808

3,511,412

4,185,672

4,469,779

Net assets per share (Yen)

6,430.17

6,652.04

6,183.83

6,849.57

6,515.85

Profit per share (Yen)

146.48147.15116.4396.92

132.73

Capital adequacy ratio (Domestic standard, %)

14.14

13.80

13.22

12.78

11.71

Return on equity (%)

2.29

2.25

1.80

1.48

1.98

Price earning ratio (Times)

14.95

9.31

6.32

9.48

7.17

Cash flows from operating activities

79,72582,750(23,354)446,423

267,979

Cash flows from investing activities(27,367)

124,502(134,180)(62,012)(112,069)• Strategy to double the productivity:
Dramatic improvement in productivity by zero clerical workand channel reform

Cash flows from financing activities(1,783)(1,681)(2,287)(1,117)(1,120)Cash and cash equivalents

311,403516,974

357,152

740,447

895,241• Strategy of pursuing sustainability:
Realization of coexistence of sustainable management andregional communities

Notes

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

The 3S Action
Guidelines
Smile, Speed and Simple

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

YamanashiTokyo

Mt. Fuji1
2

Profile (as of March 31, 2022)
Corporate Name:The Yamanashi Chuo Bank, Ltd.

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

Established:

December 1, 1941

President:

Mitsuyoshi Seki

Common Stock:¥15,400 million

Number of Shares Issued:

32,783,000 shares

Stock Listing:First Section of the Tokyo Stock Exchange

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

Network:

Domestic: Head Office and Branches: 90 (including 1 Internet Branch), District Offices: 2
Overseas: Hong Kong Representative OfficeBusinesses:

3

Amounts do not include consumption and local taxes payable by the Bank and its consolidated subsidiaries.
The Bank consolidated its shares at a ratio of five shares to one share on the effective date of October 1, 2018. Accordingly, net
assets per share and net income per share are calculated on the assumption that the consolidation of shares was conducted at the
beginning of the fiscal year ended March 31, 2018.
The capital adequacy ratio is calculated on a consolidated basis in accordance with Bulletin Notification No. 19 issued by the
Financial Services Agency in 2006 under Paragraph 2, Article 14 of the Banking Law. The Bank has adopted the Japanese standard
for the calculation.

Total assets(¥ billion)

Head Office

The Yamanashi Chuo Bank Group comprises the Yamanashi Chuo Bank and four consolidated subsidiaries. Centered on its core banking business, the Group provides an integrated financing service that
includes 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.

ROE/
Capital adequacy ratio

Profit attributable toshareholders of the parent(%)(¥ billion)
5.0

4,600

(Domestic standard)

15.0

4,400
4,200
4,000

4.0

12.0

3.0

9.0

2.0

6.0

1.0

3.0

Capital adequacy
ratio

3,800
3,600

ROE

3,400

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

iv

THE YAMANASHI CHUO BANK 2022

3,200
3,000

March 31

2018

2019

2020

2021

2022

0.0
FY

0.0

2018

2019

2020

2021

2022

FY

2018

2019

2020

2021

2022

v

Non-Financial Highlights
Activities to tackle environmental problems
Reduction ofelectricity consumption

Reduction of
CO2 emissions*(Unit: 1,000 kWh)

9,812

9,074

Reduction of
paper consumption

4,780

8,470

4,312

(Unit: 1,000 sheets)

29,095(Unit: t-CO2)

26,426

4,050

16,887

CONTENTS
2	Message from the President(FY) 2019

2020

2021

(FY) 20192020
2021* The Bank’s Scope 1 (kerosene, fuel oil, petroleum gas, andcity gas) and Scope 2 (electricity) emissions in periodical
reports as stipulated in the Energy Conservation Act(FY) 2019

2020

2021

Initiatives to revitalize regional economy
Number of consulting
support cases

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

4,102

615

(FY2021)(FY2021)

Number of customers
for M&A support

414(FY2021)

Number of business matching cases

707(FY2021)32 /8,531
times

peopleTotal number ofvisitors to the
Financial Museum

63,453

Percentage ofoutside directors

33%

Number of volleyball workshops
held and number of participants(FY2021)

Number of male employees
taking childcare leave

406

48

Organization

49

Consolidated Subsidiaries

26	Basic Strategy 2: Strategy to
Double the Productivity
28	Basic Strategy 3: Strategy of
Pursuing Sustainability

Past Initiatives

14	Long-Term Vision andMateriality (Material Issues)

33	Activities for Regional
Revitalization

16	Medium-Term Management
Plan “TRANS3 2025”

34

19	DX: Digital Transformation
19	SX: Sustainability
Transformation22

people24	Basic Strategy 1: Strategy to
Increase Business Capacity31	Leveraging Consulting
Functions Based on BusinessFeasibility Studies

Feature32 /523

Corporate Data

12	Purpose of the Yamanashi
Chuo Bank Group(Significance of Existence)20	Feature 1: The ShizuokaYamanashi Alliance

Number of female employees
taking childcare leave

Initiatives to utilize diverse human resources

10	Review of Value+ 2022, thePrevious Medium-Term
Management Plan

18	AX: Alliance Transformation

times

Initiatives for corporate governance8	Yamanashi Chuo Bank
Group’s Value Creation
Process

Three Transformation
Drivers

Initiatives to contribute to regional society
Number of seminars
held for customers andnumber of participants

Yamanashi Chuo Bank
Group’s Value Creation
Process

Basic Strategies for the
Medium-Term Management
Plan

Feature 2: DX Initiatives

Corporate Governance36	Compliance – Protecting
Customers

Initiatives for Sustainable
Management48	Board of Directors andCorporate Auditors

Financial Review
50	Financial Review
51	Consolidated Balance
Sheets53	Consolidated Statements ofIncome55	Consolidated Statements ofComprehensive Income
56	Consolidated Statements of
Changes in Net Assets
59	Consolidated Statements ofCash Flows
61	Notes to Consolidated
Financial Statements

38	CSR Message, Basic Policy
on CSR
39	Support for the
Recommendations of the
Task Force on Climaterelated Financial Disclosures(TCFD)
40	Initiatives to Revitalize theRegional Economy
42	Activities to Tackle
Environmental Problems
46	Activities to Contribute to
the Regional Community

51

Number of people engaging in a side business
Number of
female officers
Directorsvi

2

THE YAMANASHI CHUO BANK 2022

Corporate
auditor1

Female managers
and supervisors99(As of June 30, 2022, Side businesssystem started in April 2022)

8vii

Message from the President

President

The Purpose of the Group (significance of existence):“Open up a bright future from Yamanashi”
Ever since its establishment, the Bank has grown with thelocal economy of Yamanashi Prefecture, under the
management philosophy of “Keeping Close Ties with the
Local Community and Ensuring Sound Management.” The
only way a regional bank such as ours can continue togrow sustainably is to contribute toward achieving asustainable regional society.
Meanwhile, in recent years, stakeholders have become
increasingly interested in initiatives companies taketoward social issues, as represented by ESG/SDGs.
Yamanashi Prefecture, where we have our businessfoundation, also faces various social issues which need tobe addressed, similar to other regional areas.
Against this backdrop, we believe that there is a need tocommunicate and state clearly to internal and external
stakeholders with regard to what the Bank’s goals are andthe reason the Bank exists, in order to achieve growththrough cooperation with the regional society toward thefuture. For this reason, we have established our Group’s
Purpose (significance of existence) as “Open up a bright
future from Yamanashi” to be launched together with thestart of the new Medium-Term Management Plan “TRANS3
2025.”We are aware that one issue is that “Yamanashi is blessedwith abundant nature and located adjacent to Tokyo andKanagawa, but has a decreasing population.” Despiteindustries such as local manufacturing, agriculture, and2

THE YAMANASHI CHUO BANK 2022

tourism doing their best as individual companies andbusinesses, this decrease may be caused by thesebusinesses not being able to communicate their appeal
on a wider level. There is a need for revitalization and theactive provision of information on the appeal of local
businesses and culture, or the younger generation will
leave the area. This will make it even more difficult to
rejuvenate local businesses and culture. To make most of
Yamanashi Prefecture’s attractive resources, there is aneed to have individual businesses and people who wantto make a change gather and work together to spread theword about the appeal of Yamanashi Prefecture’s richnatural environment and industries so Yamanashi can
become a contender in markets outside the prefecture
and on a global scale.
As a leading bank, I believe the significance of ourexistence is to create opportunities especially for the
younger generation so they can play active roles, toconnect individual businesses, and provide support bymaking most of the diverse expertise of the Bank’s talent,
toward maximizing the potential of Yamanashi Prefecture.
These sentiments were put into the Group’s Purpose“Open up a bright future from Yamanashi.” In this way, theJapanese term “kirihiraku” in our Purpose expresses ourhopes for the further development of Yamanashi
Prefecture through communicating its appeal andindustrial strengths.

Toward realizing “Well-being in Yamanashi”
With our Purpose in mind, we have defined the ideal
future image of Yamanashi Prefecture as “Well-being inYamanashi.” Although it is important to strive for the
economic development of local regions, there is also aneed to simultaneously achieve spiritual and social gains
to attain true abundance. We want to create a society that
achieves economic growth, in which all people live inhappiness, take on the challenge of new things, and live
vibrantly through self-fulfillment. This is the essence of“Well-being in Yamanashi,” and the society that we wantto create.
I believe that creating a town in which the energetic
younger generation would want to live and settle in is themost important factor in creating this ideal society.
Although the COVID-19 pandemic has had many negative
aspects, it has also been in our favor in terms of bringing
younger people to Yamanashi Prefecture. For a long time,
the population of Yamanashi Prefecture had been
declining. There had been more people flowing out thatflowing in. However, with the COVID-19 pandemic, there
is now more people coming into the prefecture thanleaving it.
Additionally, according to the “Regional SDGs Survey
2021” conducted by the Brand Research Institute, Inc.,
Yamanashi Prefecture placed fourth place within Japan’s
47 prefectures in terms of level of happiness, so it can besaid that it is one of the happiest regions in Japan. The

survey also discovered that the more people appreciate
the SDGs efforts made by the prefecture they reside in,
the higher their “happiness” ratio is, and they have astrong willingness to settle down in the region. In otherwords, making prefecture-wide efforts to resolve social
issues will result in a population increase.
For instance, say that there is a young entrepreneur froma metropolitan area, who comes back to Yamanashi,
wanting to work in agriculture there. That person brings
other younger people to do farming together with him or
her. Conventionally, many may have an image of farming
as very hard work. However, with recent advances in ICT
and machinery, along with the development of digital
environments that enable farmers to promote theirbrands (such as Shine Muscat) to the world, a trend thatwill make agriculture an enjoyable and profitable industry
may occur. I also believe that it is the younger generation,
which have a high interest in social issues and are willingto challenge themselves, who will create such trends.
To support trends like this, the Bank believes that it isimportant to take the initiative in resolving social issues
through the creation of environments in which the young
generation can take on challenges, in cooperation withindustry, government and academia. As a detailed
measure to achieve these goals, we are actively
supporting local development by establishing the
Yamanashi Chuo Bank Regional Revitalization Fund, along3with provision of institutional loans, funds, etc. to individuals and small and medium-sized enterprises to support
promising venture companies and new businesses. We
want to contribute toward the attainment of “Well-beingin Yamanashi” through our financial services, and also

by endorsing attractive Yamanashi products at various
events and facilities (wineries, glamping, etc.) andsupporting start-up businesses in Yamanashi Prefecture
by fully utilizing the Bank’s expertise and network both inand outside of the prefecture.

+

Looking back at Value 2022, the previous Medium-Term Management Plan
The long-term vision “Value Creation Bank” was established at the time the previous Medium-Term
Management Plan “Value+ 2022” was formulated, toward
the 150th anniversary of the Bank’s founding in 2027,
which will be a major milestone. Without being
constrained by conventional bank frameworks and while
continuing to create new values from the perspectives ofregional society and our customers, we have set our sights
on a goal of sustainable growth while enhancing values
provided to various stakeholders around us and establishing a management structure that is less susceptible tobeing affected by the market and interest rate environments.
The previous Medium-Term Plan, which is the 1st Stage inthe three steps to realize our Vision, has been positioned
as a stage of structural reforms for growth. As the world
goes under dramatic changes due to the COVID-19
pandemic, we have been working diligently on customer-oriented consultation.
The previous Medium-Term Plan consists of three basic
strategies, of which the first was “Enhance Customer
Touchpoints,” in which we expanded non face-to-facecontact points with customers through incorporating thesmartphone app “Wallet+,” and the Yamanashi Chuo Bank
bankbook app “with CRECO,” along with other initiatives.
As non-face-to-face contact points with customers using
smartphones and computers continue to increase, we
reviewed branch functions and optimized our network ofbranches with regard to face-to-face channels.

For our second strategy, “Create Common Values,” weexpanded our staffing in the consulting field, which includes
M&A and talent recruitment, to deepen and widen ourconsulting field. Furthermore, we were able to increase loans
and bills discounted, and profits from corporation service,through actively adopting new financial methods such as
structured finance. Additionally, through BPI (Business
Process Innovation), various operations were streamlined
and made more efficient, leading to improved productivity
throughout the Bank, such as having personnel shift fromclerical work to sales.
In the third strategy of “Improve Personnel Motivation,” wereinforced efforts to boost employee motivation and talentdevelopment by introducing a job-based personnel system
in October 2021, along with other initiatives such as
one-on-one training.
As a result, we attained and exceeded three out of the four
quantitative objectives of the previous Medium-Term
Management Plan, namely “non-interest revenue,” “netincome” and “OHR,” but did not attain the fourth, “interest on
loans and bills discounted.”
In addition to the quantitative result, we have also attained
significant reforms, such as the upgrade of groupware andthe development of paperless systems for a dramaticincrease in productivity, along with work style reforms basedon a new human resource system. We aim to have the seedsof reform, which have been nurtured within the previous
Medium-Term Plan, grow even further with the new
Medium-Term Plan.

The evolution of “Value Creation Bank” as the Long-term Vision for 2027
In formulating the new Medium-Term Plan, we havefurther evolved and redefined our Long-Term Vision for2027, “Value Creation Bank.” There is a need to meet the
expectations of our customers and various stakeholders
through our business and enhance our corporate value torealize “Well-being in Yamanashi” and to continue
creating values during this process. To clearly communicate this, our Long-Term Vision has been redefined andbased on values the Bank should provide to stakeholders.
Specifically, a clarification was made of what and how
values are provided to stakeholders such as “regionalsociety,” “individual customers,” “corporate customers,”“employees,” “shareholders and investors,” and “future
generations.”
Our clear awareness of “future generations” as stakeholders

4

THE YAMANASHI CHUO BANK 2022

was particularly emphasized in this initiative.
I believe that the driving force that will transformYamanashi Prefecture into an economically and spirituallyrich region is younger people and future generations. The
background for this idea is my astonishment at previously
hearing a story about how “In Europe, young people havebeen actively coming forward and moving older generations to solve environmental issues.” It is mainly theyounger generations who are thinking more seriously
about decarbonization in Japan as well, and the future
generations are the ones that will be dramatically affectedby climate change. Yamanashi Prefecture was able to growto this point by making most of its abundant nature andenvironment. That is why there is no questioning our
responsibility to preserve the rich natural environment of

Innovation Lounge which opened in July 2021 to give birth to new ideas

the region and world for future generations. This is not
limited to environmental issues, as we have decided toinclude contributions toward achieving a decarbonizedsociety, which is the most important social issue in the
Bank’s mission toward future generations, as has beenclearly defined in our Vision.
Furthermore, we have established financial and non-financial
KPIs to further clarify achievement targets and to promote

effective initiatives toward attainment. To be specific, theseinclude the improvement of OHR and ROE through boosting
added value for provided services and streamlining
operations, the promotion of diversity and inclusion,
employee reskilling, and the expansion of investment andfinancing through sustainable finance and other means.
Although the timing of the achievement of these KPIs varies
depending on the indicator, the target is roughly 2027 to 2030.

3

The new Medium-Term Management Plan “TRANS 2025”
We will work on our new Medium-Term Management Plan
“TRANS3 2025,” for three years from FY2022, towardrealizing our Long-Term Visions. While the former
Medium-Term Plan was positioned as a structural-reform
stage, the new Medium-Term Plan is positioned as athree-year period to get the Bank on a growth trajectory,
through linking value creation for stakeholders throughour business with the economic value of the Bank. The new
Medium-Term Plan is created from three core strategies.

in which we can focus human resources on measures toincrease business capacity, by increasing overall productivity at the Bank through next-generation channel reforms
that include the expansion of digital channels and branchreorganization.

The first strategy is to “Increase Business Capacity,” which
will increase profits through diversifying and deepening
values for customers. To be specific, we will (1) further
deepen and expand the core business of general financethrough activities such as specialty sales and enhancing
consulting, along with (2) explore new business models
that will benefit the community, customers, and the Bank,
through activities such as resolving issues in the local
region.

The third strategy is to “Pursue Sustainability” to ensure
these activities are feasible and in harmony with theenvironment and society. Although these initiatives arealso for the purpose of resolving materiality, during the
new Medium-Term Plan period, we will especially focus on(1) realization of human capital management, which
includes promotion of diversity and inclusion along withreskilling human resources, and (2) attaining a high level ofgovernance to create an organizational structure that can
carry out strategies. As part of these initiatives, we havefurther divided the Bank’s sales area into six districts andestablished Regional Head Offices for each of them in ourefforts to restructure branch business operations.

The second strategy is to attain “Double Productivity,”through enhancing efficiency with elements such as digitaltechnology. As the Bank aims to increase its businesscapacity, the Bank’s human resources will be the source ofvalues to be provided to customers. That is why we will (1)attain zero clerical work through simplifying, centralizing,and systemizing tasks, and (2) create an environment

Furthermore, the tools (methods) that will execute andrealize the three basic core strategies are the three transformation drivers of “AX (Alliance),” which will strengthen ties
with Shizuoka Bank and other organizations, “DX (Digital)”for regional society, customers, and the Bank, and “SX(Sustainability),” which focuses on initiatives related tomateriality.

5The human capital management challenge
One element we are especially focused on within the new
Medium-Term Plan is the realization of human capitalmanagement, which develops and makes most of humanresources who will be the driving force in promoting thesethree strategies. There is a need for human resources withexpertise related to business, industries and social issues toenhance our consultation functions and to create new
businesses. There is also a need for human resources thatcan use digital technology to solve problems, promote theBank’s DX and support customer DX. Therefore, I believethat creating an organization in which diverse employees
are able to make most of their individual abilities is arequirement to maintain and sustain our growth trajectory.
A job-based personnel system has been introduced aheadof other regional banks in Japan, as a policy in the former
Medium-Term Plan and to support the aforementioned
initiatives. This system aims to encourage the development
and active participation of human resources with diverse
expertise by dividing up duties and career paths. For
instance, this will allow system personnel to be selected andsecured at the time when they join the Bank, and to offer
more generous treatment in the case of difficult work that
calls for expertise, such as that of consultants. What is more,as a policy for the new Medium-Term Plan, we are also
aiming to increase the ratio of female managers and have
100% of male employees take childcare leave by reinforcing
diversity and inclusion initiatives.

Naturally, this is not only about changing the system of
evaluation and treatment. The goal is to encourage thedevelopment and active participation of diverse humanresources, and not to just evaluate them. That is why wehave also started new initiatives in training and job
positioning. One effort we are especially focused on is asystem for open recruitment. We have started efforts toselect employees through in-house recruitment, such asindividuals who have studied structured finance orinnovation through our alliance with Shizuoka Bank, or
individuals who have studied IT at systems companies both
inside and outside of Yamanashi Prefecture. Additionally,
employees who have come forward during in-house recruitment have been playing active roles in the new
Medium-Term Management Plan policies, in exploring new
businesses, and in other initiatives as well. In order tonurture human resources in various specialty fields, it isimportant to encourage people to come forward with what
they are interested in and what they want to do, and havethem learn by utilizing networks outside the company. In
fact, the scope of our consulting service has started tobroaden as human resources with a variety of expertiseincrease. We will continue to accelerate initiatives that will
support the growth and active participation of diverse,
expert human resources, while making most of the positive
aspects of the job-based personnel system.

Yamanashi Chuo
Bank Group’s Value
Creation Process

Three
Transformation
Drivers

Annual Report
THE YAMANASHI CHUO BANK

2022

Basic Strategies for
the Medium-Term
Management Plan

Our transition to the Prime Market and future motivation
At the 2022 TSE reorganization, we chose the Prime
Market. This is because we believe that efforts should bemade to enhance economic values and fulfill our responsibility to investors, under the stern watch of stakeholders,
while focusing on boosting social values based on our
Purpose to achieve “Well-being in Yamanashi” as a leadingbank.
In accordance with our transition to the Prime Market, wehave restructured the Bank’s value creation story this fiscal
year, and also restructured our Annual Report tocorrespond to this, in hopes of engaging in more active
dialogue with our stakeholders. To be specific, as I havementioned in this message, the regional society the Bank
wants to realize based on our Purpose has been defined. To
achieve this, we redefined our Long-Term Vision “Value
Creation Bank” from the perspective of the ideal company
we want to be by 2027, and we have also establishednon-financial KPIs. Furthermore, we have formulated the
new Medium-Term Management Plan “TRANS3 2025,” as a
strategy/plan for the next three years, to resolve material
issues that we need to engage with (materiality), to create
both economic and social values, and achieve ourLong-Term Vision. We hope to continue making most of
the Annual Report in the future, as a tool for dialogue
between regional society and the Bank toward the6

THE YAMANASHI CHUO BANK 2022

attainmentof sustainable growth, to communicate to all stakeholders
about what type of society and corporation the Bank isaiming for, along with what we are planning and how wewill make those plans happen.
We hope all of our executives and employees will share thesentiment of “Open up a bright future from Yamanashi” inthe Purpose, for the bright future of the region and of the
Bank striving to support it, along with providing
excitement for future generations. To achieve these goals,
we intend to carry out a Plan that is visibly clearer and has
more positive changes than the former Medium-Term Planin the upcoming three years.

Corporate Data

Past Initiatives

Initiatives for
Sustainable
Management

7

Yamanashi Chuo Bank Group’s Value Creation Process
1. Yamanashi Chuo Bank Group’s Value Creation Process
Materiality
identified

Input
Capital that Supports Strengths

Maintenance of arich naturalenvironment topass it on to the
futureStrengthening ofvariousrelationships andincrease ofregional
economic activity
Realization ofdigitaltransformation(DX) anddigitalization ofregional society

Creation ofcommon value
throughhigh-quality
UI/UX

Organization
establishment tosupport growthand success ofvarious humanresources

SocialCapital Dominant market
share in Yamanashi
PrefectureManagement Strategies and Materiality

Medium-Term Management Plan

3

—Transformation and challenge based on three drivers and three strategies—

 Productive Tokyo
market base Industrial base madepossible by richnatural environment

Human
Capital History and tradition from
Dai-Ju National Bank
 Insights and know-how of
personnel with a wealthof experience working on
assignment in otherorganizations

AX

DX

SX

Alliance

DigitalSustainability

THE YAMANASHI CHUO BANK 2022

Employment

Financial
CapitalMarriage
Traveling andshopping
Insurance

Strategy to increasebusiness capacity
Deepening and expanding
core business

Asset management andpreparation for old age
Nursing careBusiness succession,
M&A
Capital increaseNew
construction
Remodeling
Medical care

Strategy of pursuing

Challenge of achieving zeroclerical work
Next-generation channel
reformRealization of human capitalmanagement

NaturalCapitalDramatic improvement inproductivity by zero clerical work andchannel reform

Realization of coexistence ofsustainable management andregional communities

 Rich naturalenvironment of
Yamanashi Prefecture

sustainability

High level of governance Support of enriched lifestyles and enhancementof happiness through the provision of services
tailored to customers’ lifestyles

 Contribution to resolving issues and sustainablegrowth by providing comprehensive financial
services

Employees
 Improvement of job satisfaction and fulfillment
 Fostering and establishment of the spirit to takeon new challenges

KPI (FY2024)
 OHR (Operating expenses/Core gross business profit): 73.5% or less
 Ratio of female managers and supervisors: 15% or more

Strategy to double theIndividual Customers

Corporate Customers
Car ROE: 3% or more
 Stable financial baseand capacity forrisk-taking

 Realization of a sustainable regional communitythat overcomes the declining birthrate, aging
population, and decrease in population

Child-rearing

Exploring new business
Refinement of the core business andtaking on the challenge of new
business opportunities

Value Creation Bank

Subsidies

DX promotion

Three Strategies

2027 Vision

Regional Society

Trade
BCP

Sales channel
expansion

Purpose: Open up a bright future from Yamanashi

8

Capitalinvestment

Three Transformation Drivers

productivity

Strengthening ofcorporate
governance andcomplianceto meet diverse needs

 Diverse personnel
possessing high levelsof expertiseIntellectual
CapitalValues Created for Stakeholders

Comprehensive financial services

Overseas
expansion

TRANS 2025

Outcome

Output Rate of reskilling-based reallocation of clerical workers: 30% or
more

Shareholders and Investors
 Increase in corporate value through the growthof the Group Cumulative sustainable finance investment and loan amount:
250 billion yen or more
 Reduction rate of greenhouse gas (CO2) emissions: 46% or more

Future Generations

KGI (FY2024)
 Profit attributable to shareholders of the parent: 6 billion yen
or moreSociety that wewant to realize

 Preservation of a safe and secure environment
for future generations

Well-being in Yamanashi, which is richand full of energy and happiness9

Yamanashi Chuo Bank Group’s Value Creation Process

2. Review of Value+ 2022, the Previous Medium-Term Management Plan FY2021 results
Interest on loans and bills discounted

15

Interest on loans and bills discounted: Plan

An increase of 1 billion yen compared with FY2018(0.5 billion yen less than the plan)
16.9 17.5
16.5
15.8
15.8

(billion yen)
15

■Non-interest profits: Results

An increase of 2.1 billion yen compared with FY2018(0.5 billion yen more than the plan)

1010Non-interest profits: Plan

9.5 9.0

8.4

7.3

7.7

FY2018FY2019Createcommon values

20■Interest on loans and bills discounted: Results

550(billion yen)
10
80
60
40

FY2018FY2019FY20200

FY2021

Net income■Net income: Results

Profit increase of 1.1 billion yen in FY2021
compared with the previous year
(0.3 billion yen more than the plan)
4.4

3.4

2.6

3.8 3.50

FY2021

Basic strategy 2: Create common values● Growth in corporate-related fees and commissions mainly
through structured finance, M&A, and fee-based consulting
services, due to establishment of consulting operations based on
business feasibility studies and alliance with Shizuoka Bank
● Penetration of individual consulting operations in the sale offinancial instruments based on customers’ life plans and total
assets

80

73.4

60

87

40

OHR: Plan

13.3-point improvement compared with FY2018(6.6 points better than the plan)

FY2018FY2019FY2020(branches)

70

69

65

61

0

99,417(contracts)

64,253

61

1,993 3,966
Mar
2018

Mar
2019

Mar
2020

Mar
2021

Mar
2022

Mar
2018

Mar
2019

Mar
2020

Mar
2021

Mar
2022

Change in revenue from financial instruments andcorporate-related fees and commissions
2.52■Financial instruments
2.85
2.77
1.86
■Corporate-related services 2.42
1.80
1.96
1.79
1.91
1.30
0.95
0.72
0.51 0.60
0.37
0.25

(billion yen)
5
4
3
2
1
0

FY2017
Results

FY2018Results

FY2019Plan/Results

FY2020Plan/Results

FY2021
Plan/Results

Basic strategy 3: Improve personnel motivation● Certified as Health and Productivity Management
Organization (4 consecutive years) and Yamanashi Health andProductivity Management Organization● Maintenance of small-class OJT under the initiative of theheadquarters by newly establishing Y-Support, a personalized
training program● Outside temporary transfer and dispatch to improve/expand
expertise and job skills (Dispatch results: 18 persons in Japan,
5 persons to overseas countries, 58 trainees, and 9 persons tolocal companies)

10

THE YAMANASHI CHUO BANK 2022

● High-quality targeted sales● Establishment of an efficient approach method to themass class● Making existing branches leaner inside and outside
Yamanashi Prefecture (area grouping and restructuring,
branches in branches)● Improvement of branch functions in line with thepersonnel system reform● Review of the square system● Introduction of non-face-to-face services (smartphone
apps)● Expansion and enhancement of non-face-to-faceservices (examination of the introduction of portal
services for corporate customers, improvement of theawareness of web-based consultation services forcorporate customers, etc.)● Further spread of cashless payments

Deepening and expanding our consulting fields

Productivity improvement through BPI● Improvement of consulting support quality anddevelopment of human resources● Development of the consulting service menu andreconstruction of the existing support menu
● Deepening and establishment of structured finance● Systematization of individual consulting operations andreview of the sales structure● Achievement of zero clerical work at branches● Consolidation of administrative departments under thecontrol of departments at the headquarters● Integration and joint implementation of clerical workthrough the Shizuoka-Yamanashi Alliance, efficiency
improvement and centralization at the headquarters of
housing loan operations● Promotion of DX through the use of AI and otheradvanced technologies

Personnel management that leads to theimprovement of each employee’s motivation

Development of specialist humanresources (professionals)● Promotion of diversity and diverse and flexible working
practices● Visualization of abilities and skills and assignment of theright personnel to the right positions● Promotion of autonomous career development● Personnel exchanges to improve the effectiveness ofalliance-based measures● Review of the career support system and OJT system● Fostering of self-improvement awareness andstrengthening of growth support by visualizing the
growth level● Joint training and exchange meetings by utilizing thealliance Review of the basic priorities
Sophistication of management and administration approach

29,961
Sep
1996

Expansion of non-face-to-face channels

20

FY2021

Number of Wallet+ andbankbook app contracts

Number of branches
in the prefecture

Basic strategy 1: Enhance customer touchpoints● Workforce generation to improve and expand points of contact withcustomers through optimization of the number of branches in the prefecture● Improvement and expansion of cashless payment service lineups
through introduction of &Pay, a QR-code payment service, and branddebit cards● Strengthening of transaction points of contact with young customers
due to channel shifts through expansion of Wallet+ users andintroduction of accounts without bankbooks

74.7

OHR: Results

40

0

FY2020

(%)

80.0

60

20

FY2019

81.1

80

20

FY2018

86.7

Optimization of face-to-face channels

FY2021

OHR

(%)
10

Net income: Plan

FY2020

Improve personnel
motivation(billion yen)25

Non-interest profits

 Review of the basic strategies
Enhance customer
touchpoints

Regarding the results of the quantitative goals set forth in Value+ 2022, the Previous
Medium-Term Management Plan, the goals were exceeded for three out of the four
items, excluding interest on loans and bills discounted.

● Creation of a system for the acquisition of highly difficult
qualifications(Number of applicants: 8 persons for SME consultants and 3
persons for securities analysts)● Holding of online seminars for qualification acquisition(Number of participants: 19 persons for 1st class FP and 85
persons for real-estate transaction specialists)● Introduction of a new personnel system (role/class system)and transfer to job-based employment

Enhancement of RAF-based profit/risk management approach

Sophistication of capital market investment● Optimal capital allocation and maximization of profits basedon an integrated consultation system for profit, risk, andcapital● Strengthening of the management method and profitability
analysis in line with the Bank’s management and organization(enhancement of the risk management approach,examination of profitability indicators, sophistication ofdivisional profit/loss)● Portfolio construction from the single-year profit andmedium- to long-term perspectives● Development of human resources for capital market investment● Introduction of external investment know-how● Strengthening of risk management approach balanced withprofit generation● Support for promotion of marketable financial instruments forcustomers

Strengthening of CSR initiatives through SDGs/ESG
Strengthening of CSR initiatives throughnew perspectives (SDGs/ESG)● Setting of CO2 reduction targets and strengthening of efforts
to reduce CO2 emissions toward a decarbonized society● Development of products and services to address climatechange● Responses to sustainability-related challenges● Utilization of the Bank’s human resources, know-how, etc. tosupport customers’ SDGs initiatives

Contribution to regional economic revitalization● Efforts to create sustainable communities (promoting
cooperation with local governments for the promotion ofliving in two locations, teleworking, measures to deal withabandoned houses, digitalization, etc.)● Promotion of personal and economic exchanges with
Shizuoka Prefecture upon the full opening of the
Chubu-Odan Expressway● Support for administrative measures for the opening of the
Linear Chuo Shinkansen

Development and enhancement of the IT platform to help increase corporate value● Creation of a system to continuously secure human resources for system development● Deployment of cloud computing for core banking systems● Sophistication of cloud utilization through multi-cloud deployment for subsystems● Building of a data utilization platform that enables data-driven management

11

Yamanashi Chuo Bank Group’s Value Creation Process

3. Purpose of the Yamanashi Chuo Bank Group (Significance of Existence)
Purpose of the Yamanashi Chuo Bank Group (significance of existence)

Defining the purpose (significance of existence)
The Bank has announced its purpose (significance of existence) in society in writing in line with theformulation of the Medium-Term Management Plan to promote human resources with various values in
the future, in consideration of the sustainability-oriented society.
The Bank has redefined its long-term vision “Value Creation Bank” to further clarify “why it exists andengages in business activities and what kind of value it continues to give to stakeholders.”“Open up a bright future from Yamanashi”
Toward high level of sustainability management, Yamanashi Chuo Bank has identified themes ofmateriality (material issues), such as the strengthening of various relationships and increase of regional
economic activity, realization of digital transformation (DX) and digitalization of regional society, andmaintenance of a rich natural environment to pass it on to the future, which it endeavors to solve.

Yamanashi Prefecture has rich nature, including Mt. Fuji, Yatsugatake, and the Akaishi Mountains, and“Keeping Close Ties with the
Local Community and Ensuring Sound Management”“Value Creation Bank”



Medium-Term Management Plan 

Purpose(significance of existence)Management
philosophy

VisionWhile the management philosophy
never changes, the purpose ispositioned as an easy-to-understandmessage both inside and outside theBank, in which the concept underlying
the management philosophy, visions,etc. is clearer.

boasts to the world many regional resources and industries. The development of high-speed traffic
networks such as Linear Chuo Shinkansen and Chubu-Odan Expressway is scheduled and remarkabledevelopment in the future is expected with an increasing inflow of people from outside the prefecture.
As a leading regional bank, Yamanashi Chuo Bank realizes well-being in Yamanashi, which is rich and full ofenergy and happiness. By making use of many human and organizational connections including a sales
base in the Tokyo area, which have been built over many years, the Bank creates a prosperous future from
Yamanashi to the world.

Management strategy
Management planning

Action guideline (3C and 3S)
Semiannual plan based on the 
Medium-Term Management Plan

Action guideline
Business operation policy
and measures
Scan the QR code to access a video
about the Bank’s purpose.

12

THE YAMANASHI CHUO BANK 2022

13

Yamanashi Chuo Bank Group’s Value Creation Process

Value Creation Bank
As we approach our 150th founding anniversary, we aim to be a financial groupthat all stakeholders can rely upon to realize an enriched regional community,
delighted customers, fulfilled employees, and satisfied shareholders.

Value provided to stakeholders
Regional society

Employees

Contribute to the realization of a sustainableregional society that overcomes the declining
birthrate, aging population, and decrease inpopulation

Promote diversity and inclusion (D&I) and work
styles based on diverse values to foster andestablish the spirit to take on new challenges
and increase job satisfaction and fulfillment.

Individual customers

Corporate customers

Contribute to the support of enriched lifestyles
and enhancement of happiness through theprovision of financial and non-financial services
tailored to diversifying lifestyles of customers.

Contribute to resolving issues and sustainablegrowth of counterpart companies by providing
comprehensive financial services throughconsulting and expansion of group functions.

Shareholders and investors

Future generations

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

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

Well-being in Yamanashi, which is richand full of energy and happiness14

THE YAMANASHI CHUO BANK 2022

 The Bank’s materiality (material issues)
The Bank is working to realize a sustainable world and regional society along with a continuous increase incorporate value by increasing its level of sustainability management. As part of this effort, the Bank has identified
materiality (material issues) that it needs to engage with.

Materiality identification process
The Bank has identified its materiality through the process shown below.
Understand issues
and identify
candidates

Discuss impact
on society andbusiness

Extract andidentify the
Bank’s materiality

After organizing the main megatrends,
identified the candidate social issues that the
Bank should address, making reference tovarious guidelines such as SASB and opinionsfrom our executives and employees.

Held internal discussions with top management,
the executives and employees involved with CSR
and management strategy formulation, andexternal experts. Discussed the impact each issue
has on the Bank’s business and the impacts andseverity the Bank’s activities has on each issue,
narrowing the candidates down to 21 issues.
Based on the results of the internal discussion,
formulated a materiality map by weighting
the severity of issues from the perspective of
their impacts on stakeholders and on the
Bank’s business. Grouped the issues by theme
and identified the Bank’s materiality throughdiscussion among the Board of Directors.

Materiality map formulatedHigh The value we want to provide as a “Value Creation Bank”

Materiality for stakeholders (social value)

4. Long-Term Vision and Materiality (Material Issues)- Stakeholder
engagement- Maintenance anddevelopment oflifestyle infrastructure- Regional resources andenvironment- Access to finance- Product and service
quality- Climate change andglobal warming- Declining birthrate andaging population, anddecrease in population- Sustainable growth ofregional companies- Regional innovation- Digital transformation- Compliance andcorporate ethics- Risk management- Children and youth
education- Diversity and inclusion- Changes in customers
banking patterns andneeds- Job satisfaction andworkstyle reforms- Mental safety- Governance andinternal control- Human resource
development- Agile organization- Portfolio management

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

Six materiality issues
ESG

Materiality theme

Overview

Related issues

E

Maintenance of a richnatural environment topass it on to the future

The Bank will promote CO2 reduction initiatives to help
achieve decarbonization, while supporting
environmentally conscious initiatives undertaken byregional societies through the provision ofenvironmental products, services, and information.

● CO2 reduction initiatives to help
achieve decarbonization*1● Realization of next-generation clean
energy*1

S

Strengthening of various
relationships and increaseof regional economic
activity

We will strengthen relationships with other banks andbetween industry, academia and government, while
supporting the revitalization of regional society andindustries through business activities. In addition, we willcontribute to the prosperity of sustainable regional societies
and regional economic development by communicating theattractive resources of Yamanashi Prefecture.

● Declining birthrate, aging
population, and decrease inpopulation● Sustainable growth of regional
companies● Regional innovation

Realization of digitaltransformation (DX) anddigitalization of regionalsociety

Lead the digitalization of the whole regional society bytransforming the Bank itself with digital technology andreturning this knowhow to local companies.

● Internal DX*2
● Digitalization of the whole ofregional society*2

Creation of common value
through high-quality
UI/UX*3

Create customer value and build new service andbusiness models leading the Bank to create economic
value by providing high-quality services to meetcustomers’ needs, rooted in the local community.

● Changes in customers banking
patterns and needs● Access to finance● Product and service quality

Organization
establishment to support
growth and success ofvarious human resources

Develop highly specialized employees and build
workplace environments that allow diverse personnel torespect one another and succeed, thereby fostering a
corporate culture that makes work satisfying andrewarding.

● Human resource development● Diversity and inclusion● Job satisfaction and workstyle reforms● Mental safety

G

Strengthening of corporate Ensure the soundness and transparency of management andestablish trust with all manner of stakeholders by working togovernance anddevelop our organizational structure, enhance information
compliancedisclosure and engage in dialogue with stakeholders.

Related SDGs

● Governance and internal control● Compliance and corporate ethics● Risk management*1 These items break down “climate change and global warming” from the perspectives of the Bank and the region.
*2 These items break down “digital transformation” from the perspectives of the Bank and the region.
*3 UI: Abbreviation of User Interface. The contact point between customers and the Bank.
UX: Abbreviation of User Experience. New experiences and satisfaction that customers obtain through the use of the Bank’s products and services.

15

Yamanashi Chuo Bank Group’s Value Creation Process

5. Medium-Term Management Plan “TRANS3 2025”
 Positioning of the Medium-Term Management Plan toward the achievementof long-term vision
3rd Stage

Long-term vision

Value Creation Bank

From April 2025 to March 2028

Backcast from thelong-term vision

 Medium-Term Management Plan “TRANS3 2025” (structural diagram)Management
philosophy

Period for realization of Value Creation Bankas the long-term vision

Long-term vision

Growth-sustainment stage

Medium-Term Management Plan

1st Stage: Value 2022

—Transformation and challenge based on three drivers and three strategies—3

Three transformation
drivers

Period for continuous creationof new value on a growth path

From April 2019 to March 2022
Period for drastic structural reforms toward
new value creation and future growth

EconomySociety

Progress of deregulation

Technology

16

Strategy of pursuing

Deepening andexpanding core business

Challenge of achieving
zero clerical work

Realization of humancapital management

Exploring new business

Next-generation channel reform

High level of governanceAs the inflation target has not been achieved, the policy will be continued.

Refinement of the core businessand take on the challenge of new
business opportunities

Dramatic improvement inproductivity by zero clerical workand channel reform

Realization of coexistence ofsustainable management andregional communities

Deregulation has progressed, including the establishment of an advanced
banking service company.
Establishment of financial services intermediary legislation and review of
payment legislation

 Quantitative goals

Entry of different industries

Businesses from different industries, such as logistics and retail, entered thefinance business with a focus on the platform business.

KPI

DX promotion bycorporate enterprises

Many corporate enterprises are promoting DX, expecting to transform theirbusiness models, improve sales practices, and increase productivity andoperational accuracy.

Rise of Fintech

Payment service providers that enable non-face-to-face transactions anddirect transactions between individuals have emerged.

Lifestyle changes
through COVID-19

Customers are becoming more digitally astute through remote working,etc. under COVID-19.

Diversification of values
and work styles

People’s values that place emphasis also on things other than work, theincrease in dual employment and side jobs, and the diversification of
options for where and when to work

Declining birthrate andaging population

The declining birthrate and aging population have advanced due to thecontinuing low birthrate and increasing life expectancy.

THE YAMANASHI CHUO BANK 2022

Concentration of experts in urban centers and lack of core humanresources in regional companies
Various platforms are openly linked, evolving into a seamless service.
New value creation by combining AI, 5G, AR, etc.

productivity

Purpose(significance of existence)

Establishment of the Digital Agency to promote the digitalization of
government agencies, such as improved user-friendliness for online public
services

Platform
Evolution of technologies
Innovation through thefusion of technologies

Sustainability (SX)

Strategy to double theEstablishment of
the Digital Agency

Shortage of human resources

Digital (DX)

Strategy to increasebusiness capacity

 External environment recognition
Negative interest rate policy

Alliance (AX)Growth-path stage

Structural-reform stage

Politics

3

TRANS 2025

Medium-Term Management Plan “TRANS 2025”
From April 2022 to March 2025+

Keeping Close Ties with the Local Communityand Ensuring Sound Management
Value Creation Bank

sustainability“Open up a bright futurefrom Yamanashi”
FY2024FY2021(Results)(Final year of the Medium-Term
Management Plan)

OHR (operating expenses/core gross business profit)

73.41%

73.5% or lessLevel of 60%

ROE (current net income basis)

1.82%

3% or more

5% or more

Ratio of female managers and supervisors

13.1%

15% or more

40% or more—

30% or more

70% or more

71.5 billion yen

250 billion yen or more

800 billion yen or more

32.25%

46% or more

60% or more

4.2 billion yen

6 billion yen or more

10 billion yen or more

Rate of reskilling-based reallocation of clerical workers
Cumulative sustainable finance*1 investment and loan amount
Reduction rate of greenhouse gas (CO2) emissions*2

Ideal

KGI
Profit attributable to shareholders of the parent*1 Investment and loan that contribute to creating sustainable regional society (environment, education, start of business, succession of business, etc.)*2 Comparison with FY2013; target scope: Scope 1 + Scope 2 (excluding gasoline)

17Three Transformation Drivers
Tools (means) to realize the Medium-Term Management Plan

2. DX: Digital Transformation

1. AX: Alliance Transformation

DX realization for regional society, customers, and the Bank

Construction of a sustainable business model through the Shizuoka-Yamanashi Alliance
The Bank aims to achieve sustainable growth together with the region by advancing comprehensive businesscooperation with Shizuoka Bank.

Life planning

Banking- Business matching- M&A, etc.

- Securities brokerage- Trust by will, etc.

- Structured finance- Syndicate loans, etc.

Vitalizing local economy

Shared activity/BPO

DX- Support for regional
entrepreneurs- Joint events, etc.

- IT system integration- Clerical work integration,etc.

- New business research- Digital technology
utilization, etc.

The Bank's strengths● Management
independence● No. 1 regional brand● Pride that supports
regions● Branch network in
Tokyo area

Alliance effect● Business domain
expansion● Cost structure
improvement● Quality improvement invalues to be provided● Corporate culture
reformTarget18

Corporate● Overwhelming regionalpresence● Acquisition of new
management knowledge● Diversification of profit
sources● Increase in profit
opportunities

THE YAMANASHI CHUO BANK 2022

(billion yen)

■ Banking■ Life planning■ Other

Offensive DX● DX support for customers● Participation in regional DX platform● Customer experience transformation● Innovation-based business strengthening

Realization of
Value Creation Bank

Governance to keep on changing

Agile evolution of the Bank

Defensive DX

Supportive DX● Completely operation-less transactions● Pursuit of the best IT technology and security● Arrangement to achieve data-driven management ● Strategic allocation of IT resources● Working practices reform to create added value ● Development of DX human resources

DX-based X (transformation) of the Bank
Servicereform(cost reduction, etc.)

10 billion yen
or moreBusinessreformHuman
resources andculture reform

Return of expertise andknowledge, obtained
through the Bank’s DX
activities, to regionalsociety and customers

Business model reform

Establishment ofcompetitive advantage

10

3. SX: Sustainability Transformation
Six materiality issues toward high level of sustainability management
50Achievement of the Yamanashi Chuo Bank Group’s
sustainability management (SX)

Mar
2022

Mar
2023

Mar
2024

Mar
2025

Mar
2026

● 10 billion yen or more if the five-year
totals for the two banks are combined● Synergy effects are equal for bothbanks at 50:50● FY2021 results: approx. 6.1 billion yen

Organization establishment to support
growth and success of diverse human resources

Strengthening of corporate governanceand compliance

Maintenance of a rich natural environment topass it on to the future

Strengthening of various relationships andincrease of regional economic activity

Creation of common value throughhigh-quality UI/UXRealization of digital transformation (DX) anddigitalization of regional society

Continuous provision of new value to stakeholders by addressing material issues (materiality)

Regional society

Customers

Shareholders

Employees

Future generations

Creation ofa rich society

Contribution to the eraof the 100-year lifespanSustainable improvement
in corporate value

Promotion of genderequality and D&I

Maintenance of a richnatural environment

Contribution to increasein prefectural GDP

Increase in the rate of holding
financial instruments

ROE increase

Increase in the ratio of female
managers and supervisors

Reduction in CO2 emissions

19

Three Transformation Drivers

Feature 1: The Shizuoka-Yamanashi AllianceComprehensive business alliance with Shizuoka Bank

Main alliance measures that have been realized

To realize Value Creation Bank, our long-term vision, we are aiming to achieve sustainable growth together withthe region, and as such on October 28, 2020 we concluded a comprehensive business alliance (the Shizuoka-Yamanashi Alliance) with Shizuoka Bank, which is based in Shizuoka Prefecture.

Start of collaboration with Shizugin TM Securities Co., Ltd. on financial instruments
introduction service [life planning needs]
On April 20, 2021, Shizuoka Bank Group company
Shizugin TM Securities Co., Ltd. opened a branchinside the Yamanashi Chuo Bank’s Head Office.
The Bank has started introducing its customers to
Shizugin TM Securities Co., Ltd., enabling it torespond with an even wider range of solutions toregional customers’ asset management needs.

Collaboration in the finance field [banking needs](1) Personnel exchanges and organization of collaborative projects
We have continuously dispatched our employees to Shizuoka Bank with a view to sharing know-how in the fields ofstructure finance and syndicate loans, and to enhance the effectiveness of collaborative initiatives in these fields.
Through this initiative, we have seen results in organizing collaborative projects in the field of corporate finance,such as structured finance, syndicate loans, and venture debt.

Purpose of the alliance
While maintaining their management independence and unique corporate brands and customer bases, bothbanks will share know-how and utilize each other’s management resources to achieve their missions in theirrespective regions, contributing to continuous maintenance and the vitalization of local industries.

Effects and major initiatives of the alliance
By working with a sense of speed on the following items, we aim to increase revenue and reduce expenditures
on a cumulative basis over five years, with both banks realizing synergies totaling over ¥10.0 billion.

20

Corporate needs

DX/Shift to cashless operations

 Sharing of information on M&A (conclusion ofcollaborative agreement) Sharing of information on business matching Utilization of Shizuoka Bank’s overseas networkand dispatching of bank staff

 Joint research for utilization of digitaltechnologies including AI and RPA
 Dispatching of bank staff to the Innovation
Promotion Office of Shizuoka Bank and researchon new businesses

Banking needs

Life planning needs

 Joint creation of syndicate loans
 Joint study of structured finance Dispatching bank staff to the structured financedepartment
 Joint investment in PE funds

 Establishment of a new scheme for securities
intermediary through Shizugin TM Securities Co.,Ltd.
 Development of a fund reserved for the alliancethrough Commons Asset Management

Vitalizing local economy

Shared activity/BPO

 Holding of joint events to promote economic
exchange between Shizuoka and Yamanashi
Prefectures
 Conclusion of collaborative arrangement in case ofdisaster (Mutual use of mobile branch vehicles, etc.)

 Opening of joint stores by utilizing unoccupied spacein branches in the strategic areas of both banks
 Examination for integration and sharing of various IT
systems
 Examination on the integration of various clerical work
and BPO that utilizes Shizuoka Bank Group companies

THE YAMANASHI CHUO BANK 2022

(2) Started handling FUJIBON private placement bond in commemoration of the alliance
On April 30, 2021 we started handling FUJIBON private placement bond as a commemoration of the alliance.
This product has a feature in which, when customers issue a private placement bond,part of the commissions received by the Bank and Shizuoka Bank (0.2% of the issued
amount) is donated to the FUJISAN Fund, which is operated by the NPO National Council
on Fujisan World Heritage.
Both banks will respond to customers’ desire to contribute to protecting the earth’s
environment through handling this product.

Other alliance measures
Corporate needs
 Concluded an agreement on M&A business Concluded an agreement on support for customers’ overseas business
Vitalizing local economy
 Held individual business meetings with business partners
 Held joint seminars on business startup and establishment,
agri-business, and relocation/living in two locations
Joint clerical work Integration of clerical work for inheritance, etc.
Other Personnel exchanges between both banks
Individual business meetings
 Online exchange meetings between young employees, andonline exchange meetings between prospective employees
 Conclusion of agreements on “free mutual ATM use” and “mutual
vehicle use in case of disaster”
 Fivefold Point Campaign by DC card companies of the two banks

Alliance logo
Representing the aim of the alliance to enable both banks to growwhile retaining their independence featuring the corporate colorsof both banks together with Mt. Fuji, as well as the diversity ofboth banks’ employees with a colorful triangle.
21

Three Transformation Drivers

Feature 2: DX Initiatives
 Specific initiatives

 Future initiatives

We will advance the systems and human resources that support DX to the next stage and strengthen our organizational structure to drive DX. In this way, we will help our customers and regional communities achieve DX
while driving the transformation of our own business model.

We are currently reforming our internal structure under the initiative of the DX Promotion Committee, with theaim to effectively utilize data and strengthen the IT investment governance across the Head Office. We will alsoendeavor to build an organizational structure to drive innovations in the Bank and regional communities andexternal collaboration.

Initiatives to migrate to core banking cloud

Data utilization

Organization for DX andinnovation strategies

We will migrate to a next-gen system utilizing a public cloud in May 2023.

Build an organizational structure
for data-driven management

Promote the symbiosis of
DX and innovation

Next-gen core banking system(BankVision on Azure)

H1 2021
Prepare theorganization anddeploy tools

H2 2021

H1 2022–

Start and run
analysis

Expand andadvanceanalysisCreate new values

Marketing

Enables flexible external collaboration to accelerate
DX and open innovation

Operational
streamlining

Robust and safe

Ensure sufficient reliability and safety andoperational continuity in case of disasters

Cost performance

Reduce the operation cost while maintaining
the functional level of the core banking system

Initiatives to develop DX talent
Digital-enabled initiatives to develop human resources who will provide solutions to
our customers and support for their operational transformation

Highlyspecialized DX
talent22

This category includes specialists
such as data scientists, digitalbusiness designers and IT strategists.

DX manager
Target quota: 100

They work together with specialized
departments of the Head Office to propose
optimal solutions to customers.

DX planner
Target quota: 500

They have basic knowledge of DX and are responsible
for leading internal digitalization initiatives andproposing various digitalization services to customers.

THE YAMANASHI CHUO BANK 2022

Digitalization Promotion Team (since December 2017)
DX Promotion Team (since December 2020)

DX and Innovation Promotion Office(June 2022–)
Human resource
development

Open innovation

DX support

Strategic investment

Strategic investment
management

Regional DX platform

Manage DX-related investments tostrategically increase investment

Create DX-triggered innovationsin the region
Regional DX Advisor
Agreement

Investment
amountDX strategic investment
IT maintenanceand management
Duration

DX Promotion
Committee
Pre- and post-investment
assessment

With Mr. Hiroshi Fujino as
an advisor, we will provide
quality services to ourcustomers and work torevitalize communities
through promoting DX, bydrawing on his extensive
experience and broad
insight.
Launch of Regional
Co-creation Lab
We have established“Takeda Street Base,” which
serves as a place (lab) for
connecting with local
players and creating new
ideas and activities. Thisfacility will help us further
optimize our organization
for regional DX initiatives.
23

Basic Strategies for the Medium-Term Management Plan
1. Basic Strategy 1: Strategy to Increase Business Capacity
Deepening and Expanding the Core Businesses

Exploring New Businesses

We have updated the Western Tokyo strategy to the more specific Tokyo strategy to deepen and expand ourcore businesses. This will enable us to demonstrate our true value as a consulting bank, thereby establishing asustainable revenue structure.

We will explore and establish solution businesses for regional issues and pursue new revenue sources. We will
also prepare ourselves to systematically explore and implement new businesses to revitalize the regional
economy while building a new business model.

Clarifying strategies and target classes

Exploring new businesses

Refine the Yamanashi Policy
Comprehensive Regional FinanceRefine the Tokyo Policy to Link
Yamanashi∞Tokyo
Increase the topline by utilizing
commercial distribution andinterpersonal networks

Provide one-stop support for each life stage bystrengthening, improving, and expanding
consulting functions● Provide the best consultation services for customers
and strengthen our functions to meet their needs

Area I(Downtown area)
Create revenue
opportunities● Address all consulting needs, such as support forstarting businesses, revitalization efforts, andbusiness succession

Further expand financial instrumenttransactions throughout the region byimplementing segment strategies● Sales for a wide geographic area, mainly
including the 23 wards● Strengthen the schemes for commercial
distribution and sales

Roll out the wealth managementbusiness● Asset management and asset succession
management● Comprehensive support for real-estate
investment and management● Support for relocation/dual residence
and large-sized housing loans● Promote the Head Office involvement in sales to
wealthy customers and mass sales

Develop lasting relationships withnew business partners

Expand general transactions by implementing
the life plan strategy● Active development sales for regional
leading enterprises● Provide high-value-added consultation
services

Area II● Strengthen customer-oriented asset management,
succession, and insurance proposals to meet the needsof the era of the 100-year lifespan(Tama area)
Expand revenue
opportunities● Provide services that bridge generations by building aplatform for seniors● Expand lifelong transactions based on housing loans

Common Policy

Market Policy

Refine the securities
investment service

Provide solutions for regional issues

Build stable revenue sources● Strengthen various collaborative relationships andrevitalize the regional economy● Develop subscription-type services● Maintain the rich natural environment to pass it on
to the future● Collaborate with peers (e.g. agencies)● Provide services for local governments● Achieve digital transformation for regional communities,
our customers and the Bank

Approaches to exploring various new businesses
Solutions for businesses
Relocation/permanent residency/dual residence

Carbon neutrality● Integrate the real and digital worlds

Refine the advanced
financial method“Solutions for regional issues” × “Stable revenue sources”

Total asset sales for middle andupper classes● In-person channel for differentiation● Establish services for asset management
and succession

Strengthen housing loan sales by
optimizing the locations● Solve regional issues and acquire revenue opportunities by utilizing structured financeand techniques● Maintain stable revenue flows by improving
the quality of securities portfolios● Optimize the risk and return

Strengthen the investment approachwith an emphasis on total profit (loss)

Distribution of regional products

Establish various business operation methods
Establish various business operation methods

Launch new businesses as new revenue sources

Yamanashi Chuo Bankor

CSR business

Advanced banking service company
Internal entrepreneurship

Distribution of regional products

Collaboration with regional enterprises

Solutions for businesses

Collaboration with other business sectors

Relocation/permanent residency/
dual residence

Collaboration with start-ups

Carbon neutrality

Corporate (business division) acquisition

Establish a sustainable
revenue structure

24

THE YAMANASHI CHUO BANK 2022

Non-interest income from total consulting services: 5.5 billion yen
Ratio of financial instrument holders (#) (Yamanashi): 12% (70,000)
Number of business loan clients (Tokyo): 4,000
Amount of newly-executed housing-related loan agreements:
200 billion yen
Total securities profit/loss (Market): 12 billion yen per annum

Experts utilization

Stable andprofitable business

Establish a business model that is beneficial for all the three parties, i.e.,
the regional community, customers, and the Bank
25

Basic Strategies for the Medium-Term Management Plan

2. Basic Strategy 2: Strategy to Double the Productivity
Challenge of Achieving Zero Clerical Work

Next-generation Channel Reform

We will improve customer convenience and reallocate management resources by implementing initiatives to eliminate
clerical work at both branches and the Head Office, thereby improving the productivity of the Bank as a whole.

We will address diversifying customer needs and build channels to support sales strategies. In addition, we will
position the digital channel as the main channel for retail customers, while strengthening the consulting
functions of the real world channels to solve customers’ issues.

Eliminate clerical work at branches

Drastically improve productivity of divisions
responsible for a high volume of operations● Reform clerical work mainly by simplifying,
consolidating and systemizing it
Simplify clerical work by reforming complicatedclerical and verification work and appropriately
taking risks
Further consolidate routine clerical work related
to back office work (including loan-related clericalwork) and non customer-facing clerical work to
the Head Office (considering switching to remotework)
Rationalize reception services by deploying
semi-self-service terminals and streamline clerical
work by utilizing digital technologies including
AI/RPA● Select and consolidate operations according tomarket characteristics● Reallocate personnel through multi-skill
development and improve support for branches● Streamline operations through digitization andworkflow reform
Reform the organization and strengthen
the system to eliminate clerical work

● Restructure and integrate the Head Office
operations and reform the organization toeliminate clerical work
● Integrate and jointly run operations with otherfinancial institutions in non-competing business
areas

Address diversifying customer needs and build channels for supporting sales strategies
Strengthen digital channels

Restructure real channels● Digitize operations by expanding completely
online services● Improve UI/UX by introducing a bank app● Introduce eKYC to digitize the procedures for
opening accounts● Promote Web-based smooth financing methods● Shift to a next-generation branch model focusedon consultation● Restructure the branch network in light of the
future expansion of digital channels, etc.
● Work to eliminate almost all ATMs located outside
branches (Yamanashi Chuo Bank ATMs) and also
strengthen collaboration with banks run by
convenience store chains.

Respond to digitization trends

Establish new marketing methods● Build a cashless-ready eco-system● Reform operations by expanding paperlesstransactions, etc.

Reduce clerical work

Reskill employees

Reallocate clerical workers

Reduce 200,000 hours worth of work

Empower clerical personnel

Reallocate 200 employees

Digitize bank transactions

Expand and promote efficient practice forcollecting and paying taxes and public funds

We will deploy semi-self-terminals to branch receptions to improve customer convenience andbusiness efficiency by realizing voucher-less, operation-less and cashless procedures.

With the government-led initiative to rationalize anddigitize government and financial operations gaining
momentum, we are working on a project to promotestatement-less and cashless payments, thereby benefitting the three parties involved, namely, taxpayers, local
governments, and financial institutions. Through thisproject, we aim to help drive DX for local governmenttransactions and also administrative and financial operations, and expand and promote efficient practices forcollecting and paying taxes and public funds.

● Bank app adoption rate: 15%  50%● Email address acquisition rate: 60%  75%● Shift to the next-gen branch model: 3 branches● Reduce ATMs located outside the branches(Yamanashi Chuo Bank ATMs): 50% (132  66 units)

e-storage
Smartphone storage
Account transfer
Eliminate vouchers
Accept cardtransactions
Accept multiple
transactions

26

THE YAMANASHI CHUO BANK 2022

Improve customer
convenience
Streamline operations* Participated in by local
governments, financial
institutions, and relevantorganizations in theprefecture● Prepare the organization and lay the foundations
for data utilization● Sophistication of sales promotion methods
utilizing data analysis● Establish an online sales scheme utilizing digitaltechnologies● Switch from full-banking branches to function-specificbranches: at least 5 branches● Consolidate branches by placing branches in branches:at least 5 branches● Strategic personnel reallocation: at least 40 employees● Number of accounts without bankbooks: 10,000  80,000

Customers
Real channels
Solutions for customers

Accumulate and utilize data
Integrate the real and digitalworlds based on data

Strengthen touchpoints (quality/quantity)

Digital channels
Contact points between
customers and the Bank

Increase revenue and reduce cost27

Basic Strategies for the Medium-Term Management Plan

3. Basic Strategy 3: Strategy of Pursuing Sustainability
Realization of Human Capital Management

Human resource management that helps improve each employee’s vitality

We will work to ensure diversity in human resources and work styles by promoting diversity and inclusion whiledeveloping a framework to integrate management and human resource strategies. In addition, we will promote
the personal growth of each employee by working to reform our training and OJT.

By maximizing each employee’s strengths, we aim to create a vibrant organization where all
employees can feel a sense of job satisfaction and pride and can become successful.
nd growthForm corporate culture that is adaptive to transformation
Employees

Integrate management and personnel strategies

Precisely operate the new personnel system● Expand and share the Bank’s purpose● Establish a strategic personnel allocation
scheme through collaboration between the
Corporate Planning and Human Resources
Departments● Develop and promote human resources forimportant positions● Quickly embed the organization with theevaluation system and practice of one-on-one
meetings● Visualize and utilize skills for careerdevelopment

Personal growth

Ensure diversity in human resources and work styles● Introduce a side job system● Enhance personalized training programs andreform OJT for new and young bank
employees● Create opportunities for alliance-based
personnel exchanges and actively dispatch
employees to external companies● Promote diversity & inclusion● Practice aggressive recruitment by hiring
specialists● Promote flexible work styles (introduce a
flextime system, promote the empowerment
of senior human resources, and encourage
employees to take childcare leave)● Strategically allocate personnel through open
recruitment: 10 or more people a year
● Ratio of female managers and supervisors:
15% or more
Initiatives to achieve the 100% acquisition of
long-term childcare leave by male employees

Support for employees seeking to
get high-level certificates

We provide childcare allowance to employees who
have taken long-term childcare leave (one month or
longer or at least 20 business days in the case of split
leave), to ensure that ouremployees can take childcare
leave without worrying.

We help employees seeking to get high-level certificatessuch as the Certificate for Small and Medium Enterprise
Consultants by providing specialized learning tools free ofcharge.

By cooperating in parenting,couples can reduce theparenting burden on theirspouse. This also enables theemployees to effortlessly
participate in parenting after
their childcare leave, thereby
promoting their work-lifebalance.
Male employee giving baby
formula to his baby28

● Rate of long-term childcare leave taken bymale employees: 100%
● Number of employees with high-level
certificates: 50 or more

THE YAMANASHI CHUO BANK 2022

After they get the certificates, we assign them to positions
where they can effectively utilize the certificates.

Selfdevelopment

OJT

External
dispatchion a
job satisfact
A sense of

Organization
where diverse
talent can
succeedIntroduction of a side job system

Initiatives to support work-life balance

We have introduced a side job system so our employees
can have opportunities to take on challenges outside ofwork. With this system, we aim to promote our
employees’ proactiveness and independence, enableinterpersonal networking and growth that cannot be
achieved solely at work and bring diverse values to theBank, thereby creating innovations.

We provide extensive employee leave benefits to help
our employees balance their work and personal lives.

Initiatives for women's empowerment
The diversity promotion team, whose members wererecruited in an open manner from across the organization, is implementing a variety of measures to foster asense of job satisfaction for each employee, including
measures to promote women’s empowerment.
These activities and initiatives to create a work environment that facilitates parenting for both male andfemale employees and establish diverse work conditions for our employees, regardless of parenting status,
were highly evaluated and received the “Kurumin Certification” and “Eruboshi Certification.”

Kurumin Certification

Eruboshi Certification

Introduction of a new personnel system
In October 2021, we introduced a job-based employment system, where jobs are graded by the significance of duties and roles.

Family leave benefit
Employees can utilize this benefit for parenting,nursing and caring of their family members. This
benefit also covers health problems during pregnancy,
infertility treatment and children’s school events.

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

Support for employees returning to work afterchildcare leave
We regularly hold briefings for employees on childcare
leave with the aim of alleviating their anxiety about
returning to work and enabling their smooth return.

Dispatch to external companies and institutions
With the aim of helping our employees improve theirdiscernment capabilities by learning about the characteristics and knowhow of other industries, we
dispatched 50 employees to external companies,
mainly in local industries, over five years from FY2012.
In order to effectively utilize the specialized knowledge
and experience of the employees who have completed
the dispatch program, we assign them to the Head
Office departments in charge of supporting clientcompanies and revitalizing regional communities, aswell as to branches where such employees can makethe most of their dispatch experience.
We continue to dispatch two to three employees toexternal companies every year.

We aim to improve the vitality of each employee anddevelop human resources who can demonstrate theirexpertise by recruiting and training specialists, establishing job groups and processes that enable our
employees to envision their future career paths, and by
preventing discrepancies between employees’ job
descriptions and their actual jobs.

29Basic Strategies for the Medium-Term Management Plan

Past Initiatives
1. Leveraging Consulting Functions Based on Business Feasibility Studies

High Level of Governance
The Bank has constructed a governance system to promote activities toward three-driver-based transformation(AX/DX/SX) and have been working to reconstruct the business operation system at the headquarters and branches.

Reconstruction of a business operation systemat the headquarters and sophistication of theheadquarters’ function● Sophistication of RAF-based revenue/riskmanagement methods● Activity to introduce and establish a headquarters
evaluation system● Construction of a headquarters’ system to support
Regional Head Offices

Reconstruction of a business operation
system at branches● Activity to introduce and establish a Regional Head
Office system
 From an 11-block system to a 6-Regional Head
Office system● Activity to reconstruct and establish a branchevaluation system (total budget/performance
awards)Construction of a governance system to develop AX/DX/SX
Construction of a system to develop AX/DX/SX
and put them on a self-development path

Construction of a governance system to solve
sustainability issues and construction of an
information-sharing system for every
officer/employee

Risk Appetite Framework (RAF) initiatives
The business environment for regional financial institutions is becoming increasingly challenging due to factors suchas the declining birthrate and aging population, as well as the prolonged negative interest rate policy. As such,building a sustainable business model has become an urgent task for the Bank. In order to build a sustainable businessmodel, a Risk Appetite Framework (RAF) that optimizes the balance between profits and risk, and comprehensively
and integrally manages the avoidance of risks that have a significant impact on management, is considered useful.
At the Bank, we have been working to increase the sophistication of RAF-based revenue/risk management methods
as a part of the “TRANS3 2025” Medium-Term Management Plan. To build the RAF, we have been conducting discussions in the ALM Committee and other meetings.

Introduction of a Regional Head Office system
We have divided the Bank’s sales areas into six areas and established Regional Head Offices in all six areas. By
working to strengthen area governance, we will improve the effectiveness of management strategies and makespeedy decisions. In addition, the Bank will solve problems in a precise and speedy manner in response toregional characteristics and issues, not only by each area branch but also based on wider relationships.

Area Map

West Regional
Head OfficeCentral Regional
Head Office

Main Office Regional
Head Office30

THE YAMANASHI CHUO BANK 2022

Tokyo 2nd Regional
Head Office
East Regional
Head Office

Tokyo 1st Regional
Head Office

Utilizing the Group’s knowledge and networks, we provide customers in every life stage—from the stages of
establishment to the stages of growth, stable operation, and rehabilitation—with various consulting services,
covering business planning, business succession, ICT, medical care, utilization of public support measures,personnel evaluation system construction, SDGs, BCP formulation, overseas business development, startup/establishment, M&A, human resource placement, real estate, and local industries.
We have been engaging in activities that contribute to improving our customers’ corporate value by leveraging
our consulting functions, while sharing the “thoughts” and “ideas” of business owners through in-depth dialogue.

Support for business startups, new business cultivation, growth fields, and fund procurement
 Support for business startup and establishment

 Support for agri-business

The Bank has a Business Startup and Establishment Support Desk inplace. Here, the Bank, its Group companies and external organizations, have worked together to establish a comprehensive support
platform for customers in the business startup and establishment
phase. The platform provides a wide range of support to suchcustomers, from support for business planning formulation to raising
startup funds and achieving business growth after establishment.
The Bank and Shizuoka Bank jointly sponsored the Shizuoka-Yamanashi Alliance “Business Establishment/Second Business
Establishment School 2021,”
offering an online curriculum for new entrepreneur
customers to learn the basics
of marketing, IT, accounting,and financing, as well aspractical business and management skills.
Through these efforts, weoffer Yamanashi Chuo Bank
startup support loans andprovide support for businessgrowth after establishment,
aiming to contribute toregional economic revitalization.

To support the agricultural field, which is attracting attention due to
growing awareness of the SDGs, as well as the wine business field,
which is a local industry in Yamanashi, we have assigned dedicatedprofessional consultants in the agriculture, food, and wine fields atthe Head Office to support business and management planning,
various types of financing, and entry into the agricultural field
through collaboration with government agencies, as well as toprovide consulting services. The Bank handles a loan program “Kai no
Minori” for business operators in the agricultural field and agriculturalmodernization funds.
Additionally, the Bank and Shizuoka Bank jointly hosted the Agri-Business School 2021 based on
the Shizuoka-Yamanashi
Alliance to nurture andsupportbusiness
operators who are seeking
to conduct agri-businesswith business thinking andan entrepreneurial spirit.
The school implemented acurriculum consisting ofcourses to acquire management knowledge infinance, human resource
development, distribution,
production management,
marketing, and others, aswell as experience fromsenioragriculturalbusiness operators.

 Holding of “Business Succession and M&A
Conference 2021”
In November 2021, we held an online seminar, “Business Succession
and M&A Conference 2021,” against the backdrop of nationwide challenges such as the aging of business owners and the lack ofsuccessors. Many customers showed interest in the online seminarand the number of applications amounted to approximately 8,000
accounts. The seminar delivered 30 lectures on various themes suchas business succession and growth strategy type M&A, experiences
about business succession, and trends by industry. We will continue
to provide proactive support to resolve issues faced by ourcustomers with the Business Succession/M&A Promotion Team
within our Head Office, taking a leading role.

 Web seminars related to public support measures
In order to support customers’ use of subsidies and other public
support measures, we co-hosted the following online seminars with
Shizuoka Bank: “Seminar for Utilizing Public Support Measures,”“Seminar for Utilizing Business Restructuring Subsidies,” “Seminar for
Utilizing Manufacturing
Subsidies,” and “Seminarfor Utilizing Energy Conservation and Carbon
Neutral-related Subsidies.”
We have provided an
overview of a wide rangeofpublicly
available
support measures for thisyear and key points in the
preparation of application
forms.
We will continue to workonrevitalizingtheregional economy byproposing the effective
use of public support
measures.

31

Past Initiatives

2. Activities for Regional Revitalization
 Handling of “Yamanashi Progress”

 Support for tourism-related businesses

Since October 2021, in cooperation with the Japan Finance Corporation (JFC), we have been handling the co-financing scheme“COVID-19 Response Management Reinforcement Affiliated Loans”(known as Yamanashi Progress) as support measures for businesses
impacted by COVID-19 byutilizing Yamanashi Chugin
Capital Loans (20), the
COVID-19 Hybrid Subordinated Loan Program by theJapan Finance Corporation,and other means.

The Bank is assisting the entire tourism industry by providing smoothfinancing support to tourism-related businesses, which have suffereda tremendous impact from the COVID-19 pandemic.
In parallel with financing support, the Bank helps tourism-related
businesses in many other ways. For example, we support new
business development initiatives based on workations at tourism-related facilities and help to improve the earning power oftourism-related businesses through consulting on business rehabilitation issues. The Bank offers these types of support in collaboration
with tourism advisors, external organizations, specialized personnel
and other experts. Such collaboration allows the Bank to leverageeven more sophisticated knowledge and information in offeringvarious forms of support.

Participation in regional development such as
regional revitalization projects
 Promotion of dual residence, relocation,and permanent residence
To promote living in two locations, the Bank has concluded an
Agreement on Promoting Dual Residence with the Yamanashi prefectural government, and started to handle Yamanashi Prefecture-AffiliatedSecond-House Loans in April 2022.

Moreover, the Bank conducts activities such as supporting the development of frameworks that will allow businesses to welcome
inbound tourists more efficiently when the inbound tourism businessrecovers. We also assist with the supply of information on marketingstrategies.

 Support for healthcare and nursing carebusinesses
We have established a support platform for the healthcare andnursing care fields as a collaborative effort among the Bank, its Group
companies and external organizations. Besides financial support,such as loans and leases, the platform provides a comprehensive
lineup of high-quality support services, ranging from free-of-charge
support and information from a dedicated professional consultant in
the healthcare and nursing care fields at the Head Office, to support
from specialized organizations. This support addresses all manner ofneeds, from starting a business to business improvement, entering
new fields and business succession.

 The Yamanashi Chuo Bank startup support
loan “Fine Start”
We offer the Yamanashi Chuo Bank startup support loan “Fine Start,”with the aim of contributing to regional economic revitalization byoffering financial support to customers who are starting new businesses in Yamanashi Prefecture, thereby creating new businesses, aswell as maintaining and expanding employment.
This loan features a “performance-linked preferred interest rate” thatis linked to the level of achievement of the startup plan in order toboost the business motivation and mindset of business founders as
they work to grow and expand their new businesses.
 Financing support for startups/new businesses
Fiscal 2021: 163 loans ¥3,402 million

 Support for environmental businesses Business matching

For customers who are interested in the power generation business,such as solar power and small hydropower, energy management
systems, energy-saving, power conservation, environmental load
reduction management and other areas related to the environment,
we provide management advice from Head Office environment-related field experts, as well as business matching with facility
operators and consultants.

The Bank introduces customers to their ideal business partners,
together with offering consulting support, to solve various management issues they face. Support activities include helping customers
to expand sales channels, reduce costs, and improve productivity.

 Overseas business support

In addition, the Bank provides customers with the B-Line businessmatching site covering an expansive geographic area.

In May 2021, the Bank concluded an Agreement on Overseas
Business Support Operations with Shizuoka Bank in accordance with
the Shizuoka-Yamanashi Alliance. Taking this agreement as an opportunity, the Bank is working to establish a close cooperation with
Shizuoka Bank’s six overseas sites by dispatching an employee to
Shizuoka Bank’s Hong Kong Branch and other means.
We will support our customers also in cooperation with our alliancepartners, such as Shizuoka Bank and Bangkok Bank, to which we havedispatched employees.

The Bank has set up “Move-to-Yamanashi Desks” in its branches in Tokyoand Kanagawa Prefecture. “Move-to-Yamanashi Advisors” have been
appointed by Yamanashi Prefecture to accept inquiries from peopleinterested in relocating to Yamanashi Prefecture and forward theinquiries to the Yamanashi Living Support Center. Additionally, the Bank
offers Municipality Partnership Housing Loan products for 19 municipalities, which are linked to subsidies established by municipalities toencourage inbound migration.
Moreover, to help spread the word
about the attractiveness of
Yamanashi Prefecture, the Bank has
installed special document stands in
its branches in Tokyo and Kanagawa
Prefecture to hold promotional
leaflets on municipalities in
Yamanashi Prefecture, and has
published information on dual
residence and moving to and living
in Yamanashi Prefecture on the
Bank’s website and FUJI_NOTE, a
special information website.

Also, the Bank introduces customers to business partners who canhelp them to reduce fuel, communication, and other costs, enhance
productivity using cloud services, and so forth.

Website for relocation/
dual residence

Special information website“FUJI_NOTE”

 Regional revitalization through the Yamanashi
Chuo Bank Regional Revitalization Fund
The Bank established the Yamanashi Chuo Bank Regional Revitalization Fund in December 2015 in order to contribute to the prosperityof the local community and the revitalization of the local economy byproviding grants to organizations and individuals engaging in efforts
that contribute to regional revitalization.
Since transitioning to become a public interest incorporated foundation in March 2016, the fund has been offering grants to startups as apublic interest purpose business. Through fiscal 2021, aid has beenoffered to a total of 310 businesses.
Going forward, the Bank will continue to work to revitalize the region
by offering grants.

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THE YAMANASHI CHUO BANK 2022

 Activities in collaboration with regional
communities
Aiming to strengthen mutual partnerships targeting regional
economic development, the Bank has concluded partnership agreements with 10 cities in Yamanashi Prefecture. Under these agreements,
the Bank is working in collaboration with partner local governments torevitalize agriculture, commerce and industry, promote relocation toand residence in Yamanashi Prefecture, and promote tourism andtown development by supporting the promotion of decarbonizationand city promotion using the corporate version of Japan’s “hometown
tax system,” as well as supporting solutions to regional issues,
including measures against vacant houses.
As part of the Shizuoka-Yamanashi Alliance, we are working toconvey the appeal of regional products by holding individual
business meetings in which major supermarkets in Shizuoka andYamanashi Prefectures attend as buyers, as well as by holding individual business meetings with businesses tenants in expressway
service and parking areas as buyers in cooperation between Central
Nippon Expressway and Shizuoka Bank upon the full opening of the
Chubu-Odan Expressway between Yamanashi and Shizuoka.

We have also been selected as a PPP (Public Private Partnership)partner of the Ministry of Land, Infrastructure, Transport and Tourism(MLIT), and are working to support town development and efficientadministrative operations under public-private partnership throughthe Yamanashi PPP/PFI Regional Platform operated jointly with
Yamanashi Prefecture.

Initiatives to support industry through cooperation
with industrial, government, and academic institutions
 Collaboration with universities
The Bank has concluded agreements on comprehensive partnerships
with each of the following universities: the University of Yamanashi,
Yamanashi Prefectural University, Yamanashi Gakuin University, andYamanashi Gakuin Junior College.
The Bank publishes “Direct Newson Business Opportunities Originating from the University of
Yamanashi,” which reports on the
research activities of the university. In addition, the Bank has
dispatched an employee to serve
as a Community Collaboration
Coordinator at the University of “Direct News on Business Opportunities
Yamanashi. The Bank is also Originating from the University of Yamanashi”
implementing measures that will
pave the way for regional economic revitalization and promote regional
development, including the development of “winArium,” a search app for
Yamanashi Prefecture wines, jointly with the University of Yamanashi toincrease awareness of Yamanashi wines and promote the developmentof the wine industry in Yamanashi Prefecture.

 University of Yamanashi Guest Social
Collaboration Coordinators
The Bank is working to revitalize the regional economy by creating
and finding promising projects through industry-academia collaboration. To this end, the Bank takes steps such as matching thetechnology seeds held by universities with the needs of companies.
As of March 31, 2022, the University of Yamanashi had appointed 97
Bank employees as “University of Yamanashi Guest Social Collaboration Coordinators.” In this role, these employees serve as liaisons
between industry and academia.

33

Past Initiatives

3. Corporate Governance
Basic policy on corporate governance

Company institution details

Guided by its social responsibility as a banking institution and its public service mission in that role, theYamanashi Chuo Bank aims to secure the trust of various stakeholders, including customers, shareholders, staff
members and the community it serves, by such means as maintaining the Group’s sound management andassuring management transparency, in conjunction with contributing to the prosperity of the regional
community and the development of its economy.

We are a company with a Board of Corporate Auditors. The Board of Directors makes decisions on management
policies and other matters of importance, and also oversees the execution of directors’ duties. Among thedirectors, the Board of Directors has three outside directors participating in positions independent of businessexecution, which enhances the management supervision functions of the Board of Directors.

To this end, the Bank has built a stronger internal control system and organizational structure, along withworking to enhance corporate governance, notably by maintaining high ethical standards among all
management and staff members, and ensuring the active disclosure of corporate activities.

The Board of Corporate Auditors makes decisions on auditing policies, planning, and methods, and audits theexecution of directors’ duties from a perspective that is independent from the Board of Directors.

Corporate governance structural diagram

In accordance with the basic management policies decided by the Board of Directors, there is also the following:
the Board of Managing Directors, which deliberates and resolves priority matters related to the Bank’s overallmanagement and business operations; the Compliance Committee, which deliberates measures toward
developing and establishing compliance structures along with monitoring implementation of these measures;and the Risk Management Committee, which aims for effective and flexible risk management toward changes
in the business environment.

General Meeting of Shareholders

Board of Directors

Board ofCorporate Auditors
Standing
Corporate Auditors

Non-Standing
Directors

ChairmanPresident

Non-Standing
Corporate Auditors

Independent Auditors

Furthermore, the company has established a “Nomination and Remuneration Advisory Committee” as avoluntary advisory body to the Board of Directors, to ensure fairness, transparency and objectivity indecision-making processes related to the appointment and dismissal of senior management (executive
directors and above) and to the appointment and remuneration of directors.

Deputy President
Senior Managing
Director

Office ofCorporate Auditors

Managing Directors
Board ofManaging Directors
Internal Auditing
Division

Directors

Advise andreportNomination andRemuneration
Advisory Committee

Furthermore, the Bank has established an Executive Officers System to enhance corporate governance, in efforts
to separate decision-making management functions from business operation functions.
The Bank has four Group companies engaging in businesses that include credit guarantees, leasing, credit cards,
and consulting, and operates in an integrated manner to provide comprehensive financial functions.

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

Compliance Committee
Risk Management Committee

Head Office Divisions
All Branches

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THE YAMANASHI CHUO BANK 2022

Group Companies

35

Past Initiatives

4. Compliance – Protecting Customers
Compliance – Initiatives to protect customers

Basic policy on the prevention of money laundering and terrorist financing

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

Fulfill the public mission ofbanks

4 Society and communication

7

36

Activities to tackle
environmental problems

THE YAMANASHI CHUO BANK 2022

Provide high-quality
financial services

3

Strict compliance with laws,
regulations and other rules

5 Respect for human rights

6

Workstyle reforms, enhancement of
the workplace environment for
management and employees

9Take steps to mitigate threats such as bysevering any ties with anti-social forces
and countering terrorist financing

2

8Contribute to social
inclusion and development

1. Compliance with relevant laws, regulations, andother rules
The Group will comply with all applicable laws andregulations, policies and other rules concerning theprevention of ML/TF.
2. Development of systems
The Group will clearly define the roles and responsibilities of managers and staff members involved in
Anti-Money Laundering/Counter Financing ofTerrorism (hereinafter, “AML/CFT”). Integrated
management of AML/CFT will be carried out withthe appropriate cooperation of all the relevant
departments.
3. Risk-based approach
In accordance with the risk-based approach, theGroup will identify and evaluate in a timely andaccurate manner the ML/TF risks it faces, andimplement mitigation measures commensuratewith those risks.
4. Suspicious transaction reports
The Group will develop a framework for swiftly
reporting to the regulatory agencies any suspicioustransactions it detects in the course of its operations.

Nine Principles ofCompliance (Business Ethics)

1

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

5. Management of correspondent banks
The Group will strive to gather information on correspondent banks, appropriately evaluate suchinformation, and implement mitigation measures inline with the risk. In cases where the correspondentbank is a shell bank, or if it has permitted a shell bankto use its account, the Group will not conclude or
maintain a correspondent agreement with thatbank.
6. Education and training
The Group will continuously provide the necessary
and appropriate training and other educational
activities to all executives and employees according
to their roles, thereby enhancing their abilities anddeepening their understanding of measures toprevent ML/TF across the entire organization.
Concurrently, the Group as a whole will foster a
corporate culture that resolutely counters ML/TF.
7. Internal audit
The independent Internal Auditing Division willconduct regular audits of the framework to prevent
ML/TF. Based on the audit results, the Group will
strive to further enhance this framework.

37

Initiatives for Sustainable Management
1. CSR Message, Basic Policy on CSR
CSR Message“Together with the region, for the future”

Basic Policy on CSR

Since its foundation, the Yamanashi Chuo Bank Group’s constant mission has been
“Keeping Close Ties with the Local Community and Ensuring Sound Management.”
Guided by this mission, we will work to develop the regional economy through businessactivities in response to the needs of various stakeholders, including regional society,customers, shareholders and employees, with a solid foundation of compliance. At thesame time, we are strongly aware of the social and environmental aspects of ourMission, and will contribute to the realization of a sustainable regional society.

2. Support for the Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD)
In November 2021, we expressed our support for the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD).
We will continue to address climate change issues and work to improve disclosure on climate change issues.

Governance

We have identified “climate change/global warming” as one of our material issues, and are working
to address both opportunities and risks.
Opportunities

Yamanashi Chuo Bank Group’s SDGs Declaration
Guided by our Basic Policy on CSR, we have formulated the Yamanashi Chuo Bank Group’s SDGs Declaration andhave further strengthened our CSR activities accordingly.

In order to decarbonize society, we will continue to actively fund renewable energy projects andprovide products and services for businesses investing in efforts to mitigate and adapt to climatechange.

Strategy

Yamanashi Chuo Bank Group’s SDGs Declaration
Based on Our Mission of “Keeping Close Ties with the Local Community and Ensuring Sound Management,”
we, as a regional financial institution, have supported the development of local companies and industries,
energized communities, and backed the creation of affluent lifestyles for people living in the region while
striving to realize a sustainable society, in order to contribute to the achievement of the SDGs (Sustainable
Development Goals) advocated by the United Nations.
May 10, 2019 President Mitsuyoshi Seki

Key measures

Strive to reduce environmental impact
To protect our lush and pristine natural environment, we will implement
initiatives to reduce our environmental impact through our businessactivities, along with supporting customers who are engaged in environmental protection and environmentally friendly businesses. Through these
initiatives, we will work to energize regional environmental protection
activities and solve environmental problems.

Riskmanagement

As a regional financial institution, we will support the development of regional
companies and industries by providing a wide range of financial services. At
the same time, as we strive to improve financial literacy to develop the next
generation of leaders, we will work to solve a variety of issues.

Organization of the
Sustainability Committee

Establishment of the
Yamanashi Chuo Bank Group
Investment and Loan Policy

38

THE YAMANASHI CHUO BANK 2022

In our efforts to help achieve the SDGs, we have established the Yamanashi Chuo Bank Group
Investment and Loan Policy and are promoting our efforts to fund initiatives that help ourcustomers and regional communities solve environmental and social issues, with the aim torealize sustainable regional communities.

We are aware of transition and physical risks posed by climate change. For transition risks, we
assume an increase in credit risk for our counterparties affected by the transition to a decarbonized society, including responses to tighter climate-related regulations. For physical risks, we
assume credit risks due to the impact of extreme weather on the business activities of our counterparties and changes in their business conditions, as well as operational risks due to damage totheir business branches. We have started to discuss a running analysis of climate change scenarios
for physical and transition risks.
- We recognize that physical and transition risks arising from climate change may have significant
financial impacts in the future, and will work to establish a risk management system for climatechange within the framework of integrated risk management.
- We have established the Yamanashi Chuo Bank Group Investment and Loan Policy and areworking to solve environmental and social issues faced by our customers and regional
communities by actively supporting businesses that help solve environmental and social issues,
while reducing investments and loans for specific sectors that have a negative impact on theenvironment and society.

Long-term goals (FY2030)

60% reduction vs FY2013

Medium-term goals (FY2024)

46% reduction vs FY2013(Unit: t-CO2)

Appoint and utilize diverse human resources

Our region is faced with a wide range of issues. To solve them, it is essential to consider multifacetedand specialized approaches. In this light, in April 2022, we established the Sustainability Committee,
which is chaired by the President, for the entire organization to utilize the knowledge and networksof various divisions of the Head Office. We will continuously strive to help realize sustainableregional communities by discussing and exploring solutions to regional issues and addressing ourpriorities and material issues identified in the Yamanashi Chuo Bank Group’s SDGs Declaration.

RisksCO2 emission reduction targets (Scopes 1, 2)

Develop a sustainable regional economy

By promoting diversity, we will show respect for human rights and individual
differences as we strive to enhance the work, family and daily lives of all
people so that diverse human resources can reach their full potential.

The Sustainability Committee, chaired by the President, deliberates on SDGs/ESG initiatives,
including measures for climate change-related issues, and reports the results to the Board of
Directors to ensure appropriate supervision by the Board of Directors.

Metrics andtargets

Scope 1

Scope 2

Total

Reduction rate

FY2021

192

3,858

4,050

32.25%FY2020

232

4,080

4,312

27.87%* CO2 emissions for Scopes 1 and 2 in the periodic report based on the Energy Conservation Law
Scope of CO2 emissions: Scope 1: Direct emissions (Including heavy oil, gas, etc. Excluding gasoline)
Scope 2: Indirect emissions (electricity)

Sustainable finance goals
Long-term goals (FY2030)
Medium-term goals (FY2024)

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

250 billion yen or more

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

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Initiatives for Sustainable Management

3. Initiatives to Revitalize the Regional Economy
Initiatives to revitalize the regional economy for our customers
 SDGs consultation

 Yamanashi Chuo Bank SDGs Support Loan Yamanashi Chuo Bank Sustainability-Linked Loan Participation in Local Sake Sampling 2021

As part of our ESG finance initiatives, we provide SDGs consultation services to help companies achieve sustainable growth anddrive regional development.

In February 2021, we launched the Yamanashi Chuo Bank SDGs
Support Loan for companies that are actively engaged in efforts
to achieve the SDGs. By providing this loan product, we will meetthe diverse financing needs of our customers and actively help
create sustainable regional communities and contribute to themby promoting initiatives.

In December 2021, we launched the Yamanashi Chuo Bank
Sustainability-Linked Loan. The interest rates and loan terms
under this loan scheme vary depending on the progress for
SDGs/ESG-related targets (“Sustainability Performance Targets”
or “SPTs*”) set by the customers.

We joined an initiative by iBank Marketing, a subsidiary of the
Fukuoka Financial Group, to organize “Local Sake Sampling
2021—Try Specialty Sake from Across Japan,” an event utilizing
Ennichi, an online store run by iBank Marketing.

Our SDGs consultation services meet various needs of companies, including for backcasting, the building of SDGs-related
declarations, the election of material topics and support for
creating booklets and posting on websites to meet the various
needs of companies.

* SPTs (Sustainability Performance Targets)
Annual target metrics of contributions to social sustainability set
by customers

 Yamanashi Chuo Bank SDGs Private Placement Bond
with an option to donate The Global Impact Investment Fund(nickname: “Better World”)

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THE YAMANASHI CHUO BANK 2022

The Global Impact Investment Fund (nickname: “Better World”) isa fund that mainly selects and invests in stocks of companies
around the world that have innovative technologies and businessmodels and are committed to solving social issues (thereby bringing
about social impact). The Fund’sinvestment themes are “securing
food, clothing, and shelter,”“improving quality of life,” and “environmental issues,” which cover the 17 SDGs.
Therefore, investors can indirectly
participate in efforts to achieve theSDGs by investing in the Fund.

Set SPTs, conclude loan agreements

Report and publish the progress at least once a year

Yamanashi
Chuo Bank

Second opinion

Under this scheme, we offer a preferential underwriting fee for companies issuing this bond so they can
donate the saved amount to organizations that are implementing initiatives for SDGs.

We aim to help businesses that play a key role for the future of
the region and those that are working to improve their corporate
value and competitiveness in accordance with the 17 SDGs,
thereby strengthening local industrial capacity, maintaining andexpanding employment to contribute to the sustainable
development of the regional communities. To this end, we run
the Yamanashi Chuo Bank SDGs Investment Limited Partnership,
an investment fund that invests in businesses at all life stages
ranging from foundation, establishment, growth and management improvement and revitalization to business succession.

We will continue to help revitalize the regional economy bycreating opportunities for local businesses to grow and driving
the expansion of sales channels.

Third-party evaluation organization(JCR, R&I)

In February 2021, we launched the Yamanashi Chuo Bank SDGs
Private Placement Bond. This private placement bond can beissued by companies that meethigh-level requirements and are actively engaged in initiatives to help
achieve the SDGs.

 Yamanashi Chuo Bank SDGs Investment Limited
Partnership

Under this initiative, we utilized the network of nine financial
institutions that use the Wallet+ smartphone app to help expand
sales channels for Sake, which is a typical local specialty, thereby
supporting regional businesses as a regional financial institution.

<Scheme diagram>

In addition, in order to make SDGs initiatives more effective, wehold study sessions on the SDGs for employees and the senior
executives of companies. In these sessions, we help the participants fully recognize the need to tackle the issue of microplastics,
the challenges in achieving a decarbonized society, genderequality, etc., by recognizing the current world situation anddiscussing what we can do.
Through our consultation services, we will continue to build
foundations for regional businesses to voluntarily act to achieve
SDGs and help them engage in such efforts with a sense ofownership.

This product is designed to help our customers practice sustainable management (SDGs/ESGs) to enhance their corporate value,
and realize a sustainable society.

Customers

In order to build a sustainable regional economy, it is importantto promote the SDGs throughout the region. As a regional bank,
we believe that it is our responsibility to encourage a large
number of companies to engage in efforts to achieve SDGs,
thereby developing the regional economy.

 Development of winArium, a search app
for Yamanashi wines
Based on a comprehensive collaboration agreement, Yamanashi
Chuo Bank and the University of Yamanashi have been jointly
running an IT research program since FY2017. As part of thisinitiative, the joint research team of the System Administration
Department of Yamanashi Chuo Bank and the Faculty ofEngineering at the University of Yamanashi have developed“winArium,” a smartphone application to search for wines madein Yamanashi Prefecture, as a joint research project on wine,
which is the prefecture’s specialty.

 Project finance deal for a woody biomass power
generation businessWe arranged a 5 billion yen project finance deal as an arranger ofa syndicated loan for a woody biomass generation development
project by DS Green Power Generation Kai LLC.
The purpose of this project is to construct and operate awood-fired biomass power plant with an output of 6,950 kW,
which will help expand renewable energy to help realize adecarbonized society. The project also helps conserve forest
resources by giving new value as fuel to forest residues that havebeen neglected in the mountains and forests, which makes it asocially significant project in terms of SDGs.
We will continue to meet diverse financing needs of our customers by utilizing project finance and other financing methods, andwill work to solve environmental and social issues faced by ourcustomers and regional communities in order to realize asustainable society in accordance with the Yamanashi Chuo Bank
Group’s SDGs Declaration and the Yamanashi Chuo Bank Group’s
Investment and Loan Policy.

The purpose of this app is to promote Yamanashi wines by helping
users discover new wines and learn more about wines so they canenjoy wine more, enhancing their knowledge and interest in wine,
thereby increasing the number of wine fans, developing the wine
industry, and revitalizing the regional economy.

(Reference) Woody biomass power
generation plant* DS Green Power Generation Wakayama
LLC.

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Initiatives for Sustainable Management

4. Activities to Tackle Environmental Problems
Formulation of Environmental Policy

Strengthen activities to reduce the Bank’s own environmental impact

As environmental problems such as global warming become more serious, as a company rooted in the region, we believe that
it is important for us to proactively address environmental problems and contribute to the creation of a sustainable local society.

 Donation of vegetables harvested through preservation
and rehabilitation projects in socioecological landscapes(satochi-satoyama areas) to Nijiiro no Wa, an authorized
NPO corporation

Under our Environmental Policy, the Bank will promote environmental conservation activities more proactively and continuously than ever before.
The Yamanashi Chuo Bank is a regional bank that operates principally in a region blessed with one of

Yamanashi
Japan’s most picturesque and bountiful natural environments. As such, the Bank is strongly committed
Chuo Bank to protecting the global environment. The Bank believes that activities to tackle environmental probEnvironmental lems are the foundation of its corporate social responsibilities (CSR). The Bank complies with environmental laws and regulations, along with accurately monitoring the impact of its business activities on
Policythe environment. Concurrently, the Bank works to actively and continuously implement environmental
protection activities.

1. The Bank will strive to reduce environmental impact by promoting the conservation of resources andenergy, with a view to harmonizing its business activities with the environment as a financial institution.
2. The Bank will strive to help improve the regional community environment through the supply offinancial instruments, services, information and so forth.
3. Every executive and employee will increase their understanding of environmental problems, andactively implement environmental protection activities in the regional community.
 Participation in the Principles for Financial Action for the 21st Century
The Bank signed the “Principles for Financial Action towards a Sustainable
Society (Principles for Financial Action for the 21st Century)” and is
implementing initiatives aimed at resolving environmental issues.

Support and facilitate activities undertaken by the regional community, customers andothers to reduce environmental impact
 Handling of “Decarbonization-related Global Equity
Strategic Fund”“Decarbonization-related Global Equity Strategic Fund” is a fundthat mainly invests in the equities of decarbonization-relatedcompanies from around the world. This fund invests in companies that have advanced technologies for decarbonization andare developing businesses in the areas of the supply of clean
energy, the electrification of power sources and the use ofalternative materials, as well as the absorption and removal of
CO2 and energy efficiency, which allows investors to indirectly
participate in decarbonization activities.

The Group has been promoting the preservation of socioecological landscapes (satochi-satoyama areas), which are natural
habitats where human activities are undertaken in harmony withnature, since August 2011. To pass on these landscapes to future
generations, the Bank has named a plot of abandoned farmlandin Chuo City, Yamanashi Prefecture “Yamanashi Chuo Bank
Fureai-no-Satoyama.” The Bank is working to rehabilitate theland and grow various vegetables on the site with the advice of
local farmers and forestry cooperative members. In addition, theBank is tending to an abandoned forest next to the site by conducting tree-planting activities. To date, the Bank has organized andheld 54 activities with the participation of a total of 3,077 people
comprising executives, employees, and their family members.
In fiscal 2021, the Bank donated vegetables (sweet potatoes,
potatoes, green onions, and Chinese cabbages) it harvested tothe authorized NPO corporation Nijiiro no Wa to support wholesome daily lives in the community amid the COVID-19 crisis.

 Donation of recycled toilet paper to 14 special-needs
schools in Yamanashi Prefecture
The Bank, as part of efforts to contribute to regional society,donated recycled toilet paper (5,000 rolls) to 14 special-needs
schools in Yamanashi Prefecture. The toilet paper was produced
from recycled paper documents in the Bank. This donation ofrecycled toilet paper was undertaken to foster an interest inenvironmental issues, such as global warming, among children.
(Yamanashi Prefecture’s Superintendent of Education is pictured
on the right of this photo.) Deployment of fuel-cell vehicles
In order to help prevent global warming, we are actively deploying hybrid vehicles and other fuel-efficient vehicles in our fleet ofbusiness vehicles. We have also deployed two MIRAI fuel-cellvehicles (FCV). The MIRAI FCV has been lauded as the “ultimate
eco-car” because it does not emit any carbon dioxide or exhaustemissions when it is driven.

 Activities for the energy conservation program
As part of its financial support for SDGs/ESG, the Bank has
independently developed its “Energy Conservation Program” tosupport customers’ energy-conservation, environmental impact
reduction, and carbon neutrality. Specifically, the Bank
implements consulting sales for customers, where it performs
energy conservation diagnoses by using public measures, andbased on the results, it proposes specific measures for energy
conservation and environmental impact reduction, while using
public support measures such as subsidies and tax incentives, aswell as business matching and other measures.
To promote such activities, the Bank has started to handle the
Yamanashi Chugin Sustainability Linked Loan and other products.

 Installation of solar power generation systems
As part of its measures to reduce the amount of CO2 emissions,
the Bank has installed solar power generation systems at its
Asumi Branch, Ogasahara Branch, and Showa Branch.
Moreover, the Bank has equipped the parking lot of the Saruhashi
Branch with lights that run on solar and wind power.

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THE YAMANASHI CHUO BANK 2022

43

Initiatives for Sustainable Management

Initiatives to reduce CO2 emissions
 Yamanashi Chugin eco Action, an environmental conservation initiative of the Bank and our
executives and employees
In September 2010, we established the Environmental Policy and have been working on various measures to addressenvironmental issues. In November last year, we expressed our support for the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD), and are working to solve issues for our customers, society, and theenvironment to enable the sustainable development of local communities.
To help drive our efforts to achieve our CO2 emission reduction targets, the Bank and our executives/employees
launched “Yamanashi Chugin eco Action,” an environmental protection initiative to build sustainable local communities in April 2022.

[Yamanashi Chugin eco Action]

1. Our main initiatives

2. Initiatives of our executives and employees Introduce renewable energy electricity

 Commit to paperless working

 Introduce EVs and other eco-friendly cars

 Commit to energy conservation

 Expand environmentally-friendly branches(ZEB branches, etc.)

 Consolidate multi-function machines Protect and utilize forest resources Participate in the Yamanashi Cool ChoicePrefectural Campaign

 Making sure to leave the office by 7:00 p.m.

[Illustrative image]

Eliminatefossil fuels- EVs- ZEB branches- Eco-friendly bankbook bags
- Power conservation- Hydroelectricity- Plastic-free44

THE YAMANASHI CHUO BANK 2022

As part of our initiatives to decarbonize society, we
have switched to “Yamanashi Power NEXT ‘Furusato
Hydro Plan,’” a power service plan that uses renewableenergy electricity generated at Yamanashi Prefecture’shydroelectric power plants, for our Head Office andcomputer center building.
This plan provides CO2-free electricity that is generated
at Yamanashi Prefecture’s hydroelectric power plants,
and provided by Yamanashi Prefecture and TEPCOEnergy Partner, Inc. This power service achieves a zeroCO2 emission coefficient by sourcing the power exclusively from Yamanashi Prefecture’s hydroelectric power
plants.
In addition, under this service plan, you can contributeto the prefecture’s environmental conservation efforts
by paying the electricity bills since part of the money
goes to environmental protection initiatives, including
the prefecture’s environmental conservation projects.
This plan will enable us to reduce annual CO2 emissions
by approximately 1,517 tons (equivalent to about
110,000 cedar trees).

 Introduction of paper clear file folders

 Introduction of environmentally-friendly
bankbook bags

As part of our efforts to comply with the Plastic
Resource Circulation Act and promote the SDGs, we are
gradually switching from plastic to paper for clear file
folders for customer documents.

We have switched from polyethylene tobiomass-based bankbook bags. Biomass-basedmaterials are made from corn and other plant-derived
materials. These materials are environmentally friendly
and help reduce global warming.

Specifically, we have switched to procuring clear file
folders that are made entirely of paper and free ofplastic, unlike the conventional plastic equivalents.

Achieve
decarbonization
through the
Yamanashi Chugin
eco Action
Protect andutilize water
resources Introduce renewable energy electricity

Protect andutilize forest
resources

Moreover, this initiative contributes to achieving Goal
12 “Ensure sustainable consumption and production
patterns” and Goal 13 “Take urgent action to combat
climate change and its impacts” of the United Nations
Sustainable Development Goals (SDGs). We willcontinue to proactively implement environmental
conservation initiatives going forward.

- Socioecological landscape(satochi-satoyama areas)
conservation initiatives- Prefectural forest J-ver- Paperless
45

Initiatives for Sustainable Management

5. Activities to Contribute to the Regional Community
As a corporate citizen, the Bank will enhance its activities to contribute to the regional community in various fields such assupport for education and the promotion of culture, arts, sports, and welfare, and will implement these activities on alasting, long-term basis. In the process, the Bank will contribute to the development of the regional community.

Local contribution activities in a variety of fields
 Yamanashi Chuo Bank Financial Museum

 Activities to promote sports

The Yamanashi Chuo Bank Financial Museum presents manydifferent aspects of the histories of currency and finance inJapan. The museum has permanent displays of approximately
2,000 articles of currency, highlighted by its collection of
koshukin gold coins, and Japan’s first passbook. It also holds
planned exhibits and other events as appropriate. Additionally,
the museum has set up a new special display corner featuring
Eiichi Shibusawa, who was involved in the establishment of
Dai-Ju National Bank, the predecessor to the Bank.

The Bank has a women’s volleyball team that has delivered afirst-rate performance on the national stage since it was formed.
In order to popularize volleyball and improve volleyball skills in
Yamanashi Prefecture, the Bank holds the “Fureai Volleyball
Workshop” and the “Sawayaka Kids’ Volleyball Workshop.” The
Bank also holds the Yamanashi Chuo Bank Cup Volleyball Tournament for Mothers in Yamanashi Prefecture.

The museum also hosts off-campus learning programs forelementary school, junior high school and other students, anddispatches instructors to schools for special workshops. The
museum is made available to members of the community as alifelong learning facility.

The Head Office lobby andthe lobbies of branches areused as spots for local residents to engage in cultural activities and for showcasing
their works of art.
In November 2021, the “My
Pride Exhibition 2021—14th
Yamanashi Prefectural HighSchools Student Art Exhibition” was held at 36 of theBank’s branches. The exhibits
featured paintings and calligraphy produced by students
from high schools in Yamanashi Prefecture.

 Food donations
We donated food (about
600 cups of soup) to
Food Bank Yamanashi, acertified NPO, and the
Yamanashi Prefectural
Council of Social Welfare
as relief supplies for children of families receiving school expense subsidies or other welfare.
We will continue ourefforts to achieve a sustainable society by helping enrich the life of
everyone in the community.

46

THE YAMANASHI CHUO BANK 2022

 Installation of voice guidance system

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

We have installed a system that responds to communication
devices carried by people with visual impairments and provides
voice guidance. These devices are available in the Shimoiida
Branch, Kofu Station Sub-Branch (CELEO KOFU), as well as theKofueki Kitaguchi Sub-Branch.
This system is the first of its kind to be installed by a financial
institution headquartered in Yamanashi Prefecture.

The Bank issues statements concerning customers’ deposit
transactions (ordinary deposits, current accounts, etc.) in braillefor those who require it.

 Lobby exhibits

As part of our initiatives related to “Quality Education,” which isone of the SDGs, curators from Yamanashi Chuo Bank Financial
Museum serve as lecturers at local elementary schools to teachstudents about money to improve their financial literacy.
Moreover, the Bank holds the Economics Koshien Yamanashi
Tournament for senior high school students (The event has so far
been held eleven times.). The eleventh event was held in an
online format.

 Installation of handset-equipped ATMs at all branches Transaction statements issued in brailleOpen days: Wednesday through Saturday(except holidays and from December 29 to January 4)
Open time: 9 a.m. to noon, 1 p.m. to 5 p.m. (Last admission at 4 p.m.)
Phone: 055-223-3090

 Activities to provide financial education

Initiatives to create barrier-free facilities

When sending such statements by mail, we affix stickers in braillestating the customer’s name and “Yamanashi Chuo Bank” on theenvelope.

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

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

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

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

47

Corporate Data
1. Board of Directors and Corporate Auditors

3. Consolidated Subsidiaries

As of July 1, 2022

ChairmanManaging Directors

Directors

Standing Corporate Auditors

Nakaba Shindo

Norihiko Tanaka
Fumihiko Furuya
Masahiko Yamadera

Michio Masukawa
Riyo Kano
Miki Ichikawa

Akira Omata
Kimihiro Asai

President

Mitsuyoshi Seki

Corporate Auditors

Kouichiro Horiuchi
Yoshiyuki Nagahara
Minako Mizutani

Senior Managing Director

Yoshiaki Furuya

2. Organization

Name
Date of establishment

As of July 1, 2022

Address

Capital(Millions of yen)Lines of business

Yamanashi Chuo
Bank’s share(%)

Yamanashi Chuo Guarantee Co., Ltd.
July 1, 1986

Kofu,
Yamanashi

20

Loan guarantees

99.8
(0.1)

Yamanashi Chugin Lease Co., Ltd.
April 6, 1987

Kofu,
Yamanashi

20

Leasing

66.0(30.7)

Yamanashi Chugin DC Card Co., Ltd.
July 2, 1991

Kofu,
Yamanashi

20

Credit cards

67.5(37.2)

Yamanashi Chugin Management
Consulting Co., Ltd.
August 2, 1996

Kofu,
Yamanashi

100

Consulting,venture capital businesses

87.5(42.5)

Annual General Meeting of Shareholders

Board of Corporate
Auditors

Board of Directors

Board ofManaging
Directors

President

ReportNon-Standing
Director

Nomination and Remuneration
Advisory Committee

Common Stock : ¥15,400 million
Number of Shares :Authorized 79,600,000 shares
Issued32,783,000 shares
Number of: 6,328
Stockholders
Stock Listing: Prime Market of the Tokyo
Stock Exchange
Transfer Agent: Mitsubishi UFJ Trust & Banking
Corporation

Internet Mt Fuji Branch48

THE YAMANASHI CHUO BANK 2022

Financial Museum

Total

326,674
shares119,589 36.61%

Securities companies

4,556

Other corporations

68,110 20.85%

1.40%

Foreigners

33,135 10.14%

Individuals and others 101,284 31.00%* Shares (1 trading unit: 100 shares)
Note: The category “Individuals and others” contains treasury stock of 8,765 trading
units of shares.

Number of shares held
(thousands)

Percentage of
all shares issued (%)

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

3,651

11.41

The Yamanashi Chuo Bank, Ltd. Employees’ Stockholdings

1,339

4.18

Meiji Yasuda Life Insurance Company

1,209

3.78

Custody Bank of Japan, Ltd. (Trustee Account)

970

3.03

MUFG Bank, Ltd.

716

2.24

Teikyo University

629

1.96

City Index Eleventh Co., Ltd.

615

1.92

Fukoku Mutual Life Insurance Company

600

1.87

FUJI KYUKO CO., LTD.

531

1.66

Tokio Marine & Nichido Fire Insurance Co., Ltd.

501

1.56

10,764

33.66

Name

Corporate Planning Section

DX and Innovation Promotion OfficePublic Relations and Sustainability Promotion Office

ALM and Profit Strategy Section
Budget Section

Personnel and Welfare Section

Health Management Office

Human Resources Development Section

Administration and Finance Section
General Affairs Section

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

Credit Screening Planning Section

Loan Management OfficeEnterprise Support Section
Screening Section

Market Administration Section
Market Operations Section
Market Planning Section

Sub-Branches
Branches
Head Office Sales Division

Consultation Sales Office

Square Sales OfficeLife Planning Support Office
Structured Finance Office

Tokyo Business Development OfficePublic Affairs Promotion Office
Yamanashi Future Creation Office

Administration Control Section

Loan Administration Section

Financial Instruments Administration Section

Zero Clerical Work Promotion Section
Administration Support Section

System Operation Section
System Development Section
System Planning Section

Business Support Planning Section

Loan Center Operations Section
Cash Operations Section
Central Operations Section

Branch Auditing Section
Head Office Auditing Section
Audit Planning Section

Direct Channel Office
Sales Promotion Planning Office
Sales Strategy OfficeDirect Marketing Center

Financial institutions

Major Stockholders(Standing proxy: Custody Bank of Japan, Ltd.)Life Square

Breakdown of Stockholders

Management Strategy

General Affairs Division

Management Control Division

Credit Screening Division

Six Regional Head Offices

Market Credit Risk Management

Sales Management Division

Consultation Sales DivisionTokyo Business
Development Division

Regional Revitalization
Promotion Division

Sales

General Administration
Control Division

Systems Administration Division

Business Support Division

Secretariat

Administration Management

Tokyo Liaison Office

Auditing Division

Office of Corporate Auditors

Auditing

Managing
Directors

International Market Division

Senior Managing
Director

Directors

AdviseDeputy President

Corporate Planning Division

Chairman

Corporate Auditors

Corporate Data (as of March 31, 2022)

Human Resources Division

Standing
Corporate Auditors(Standing proxy: Custody Bank of Japan, Ltd.)

Total

49

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

Overview of Financial Position

which was partly offset by proceeds from sales and the redemptionof investment securities of ¥442.9 billion.

The Bank’s financial position as of March 31, 2022 was as follows.
Deposits stood at ¥3,459.2 billion as of March 31, 2022, up ¥70 billion
from a year earlier due to increases in individual and corporate funddeposits. Total deposits, including negotiable certificates of de-posit(NCDs), rose ¥72.1 billion from a year ago to ¥3,509.7 billion as of the
fiscal year-end. Loans and bills discounted increased by ¥62.9 billion
from a year earlier to ¥2,049.0 billion as of the fiscal year-end. This
increase was mainly due to increases in loans to small- and medium-sized enterprises and loans to individuals. Securities stood at¥1,414.6 billion as of the fiscal year-end, up ¥104.9 billion from a year
ago. This increase was due to the increase in municipal and foreign
securities.

Cash flow from financing activities
Net cash used in financing activities was ¥1.1 billion (compared witha net outflow of ¥1.1 billion in the previous year). Cash was usedmainly to pay dividends of ¥1.1 billion.

Overview of Operating Results
In terms of operating results for the fiscal year ended March 31,
2022, interest income (the balance of interest income and expenses)
decreased by ¥552 million year on year, due mainly to a decrease ininterest and dividends on securities resulting from the impact of the
Bank of Japan’s negative interest rate policy, despite an increase ininterest on loans and bills discounted. Fees and commissions (thebalance of fee and commission income and expenses) increased by¥1,263 million year on year, mainly due to increases in commission
revenue related to deposit and lending operations and commission
revenue from securities-related operations that reflect sales ofinvestment trusts and other products. Other operating income (thebalance of other operating income and expenses) declined by ¥2,823
million year on year, mainly reflecting a decrease in Japanese government bonds and other bond transactions. Credit-related expenses
decreased by ¥421 million year on year. Equity share and similar transactions increased by ¥1,429 million year on year. As a result, ordinary
profit increased by ¥394 million year on year to ¥6,624 million.

Management’s Analysis and Discussion of Operating
Results

Call loans and bills bought

14,488--The following is a summary of our analysis and a discussion of theGroup’s operating results for the fiscal year ended March 31, 2022.

Monetary claims bought

13,56414,309116,918

Forward-looking statements contained herein are based on our
judgment as of the end of the fiscal year ended March 31, 2022.

Trading securities

8

-

-

Since the Group has only one reportable segment, “Banking,”
analysis and discussion by segment are not provided.

Money held in trust

5,000

5,000

40,853

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

1,309,678

1,414,602

11,558,158

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

1,986,132

2,049,047

16,741,953

Foreign exchanges *2, *3

3,630

5,938

48,523

Other assets *2, *4, *5

85,00555,682454,960

Tangible fixed assets *7, *8

22,71722,021

179,932

Buildings

7,903

8,752

71,516

Land

11,427

10,86788,794

Construction in progress

857

1

13

Other tangible fixed assets

2,530

2,400

19,609

3,256

3,033

24,784

2,193

2,266

18,521

Software in progress

795

500

4,089

Other intangible fixed assets

267

266

2,174

6,941

8,361

68,320

864

900

7,358

5,322

7,087

57,906(11,540)(11,707)(95,658)¥4,185,672¥4,469,779$36,520,792

In addition, the Bank will work to improve customer conveniencethrough initiatives aimed at eliminating clerical work at sales
branches and the head office while reducing expenses by reallocating its management resources.

Capital adequacy ratio(Domestic standard)

ROA
(%)

$7,316,785

Looking at investments in securities, the Bank faces a challenging
investment environment. In response, the Bank will work to raise thesophistication of its investments while conducting appropriate risk
management with the aim of boosting investment returns.

Net cash used in investing activities totaled ¥112.0 billion (comparedwith a net outflow of ¥62.0 billion in the previous year). The main useof cash was the purchase of investment securities of ¥553.6 billion,

(%)

0.8

0.6

Assets:¥895,501

In terms of operating results for the fiscal year ended March 31, 2022,
profit attributable to shareholders of the parent increased by ¥1,150
million year on year to ¥4,241 million. The main contributing factors
were an increase in interest on loans and bills discounted and anincrease in fees and commissions due to higher fees related tofinancial instruments and commissions from corporate clients. Thisis despite a decrease in interest and dividends on securities due tolower yields on securities and a decrease in Japanese government
bonds and other bond transactions. The Bank of Japan’s negativeinterest rate policy will keep the current low interest rate environment unchanged. Under these conditions, the Bank will establish asustainable earnings structure by strengthening and expanding its
consulting functions.

Cash flows from investing activities

End of FY2021(March 31, 2022)¥740,601

2) Operating Results

Net cash provided by operating activities amounted to ¥267.9
billion (compared with a net inflow of ¥446.4 billion in the previousyear). The main contributing factors were a net increase in borrowed
money of ¥168.2 billion, a net increase in payables under securities
lending transactions of ¥58.7 billion, and a net increase in depositsof ¥72.1 billion despite a net increase in loans and bills discountedof ¥62.9 billion.

End of FY2021(March 31, 2022)

Cash and due from banks

The Bank’s financial position as of March 31, 2022 was as follows. Total
deposits including negotiable certificates of deposit (NCDs) increasedby ¥72.1 billion from a year earlier, and loans and bills discounted
increased by ¥62.9 billion from a year earlier, as both performed
favorably. Securities increased by ¥104.9 billion during the fiscal year
due to the purchase of municipal bonds and foreign securities.

Cash Flows
Cash flows from operating activities

End of FY2020(March 31, 2021)

As a result, cash and cash equivalents at the end of the fiscal year
came to ¥895.2 billion (up ¥154.7 billion from the previous year).

1) Financial Position

The balance of extraordinary income and losses decreased by ¥34
million year on year. Total income taxes decreased by ¥792 million year
on year. As a result of the above, profit attributable to shareholdersof the parent was up by ¥1,150 million year on year to ¥4,241 million.

Thousands of
U.S. Dollars

Millions of Yen

(%)

85.0

12.0

80.0

9.0

75.0

5.0

70.0

Net defined benefit asset
Deferred tax assets

Allowance for possible loan losses

90.0

15.0

Software

Customers’ liabilities for acceptances andguarantees *2

OHR

18.0

Intangible fixed assets

Total assets

0.4

0.2

0.0
March 31

0.0

2018

2019

2020

2021

2022

March 31

2018

2019

2020

2021

2022

March 31

2018

2019

2020

2021

2022

ROA = Core net business profit / (Average balance of total assets – Average balance of customers’ liabilities for acceptances & guarantees)
Capital adequacy ratio = Domestic standard (on a consolidated basis) OHR = Operating expenses / Core gross business profit
Notes: 1 . All except for the capital adequacy ratio are on a non-consolidated basis.
2. Similar changes have been made to fiscal year ended March 31, 2021 only to reflect the revisions to presentation method of ROA and OHR in fiscal year ended March 31, 2022.

50

THE YAMANASHI CHUO BANK 2022

51

Thousands of
U.S. Dollars

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

End of FY2020(March 31, 2021)

2) [Consolidated Statements of Income and Consolidated Statements of Comprehensive Income][Consolidated Statements of Income]End of FY2021(March 31, 2022)¥3,389,226¥3,459,276$28,264,370

Negotiable certificates of deposit

48,36150,424

411,996

Payables under securities lending transactions *4

12,21570,969579,866

Borrowed money *4, *5

460,831629,080

5,139,970

75

984

8,041

Other liabilities

36,39233,706

275,406

Provision for bonuses

1,030

1,635

13,364

Accrued bonuses to directors and corporate
auditors

34

30

252

Reserve for directors’ and corporate auditors’
retirement benefits

7

11

97

Reserve for reimbursement of deposits

247

202

1,653

Reserve for contingent losses

131

121

990

Deferred tax liabilities

10,355

4,754

38,846

Acceptances and guarantees

5,322

7,087

57,906

3,964,232

4,258,285

34,792,757

Deposits *4

Foreign exchanges

Total liabilities

FY2020(From April 1, 2020
to March 31, 2021)

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

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

Ordinary income:¥49,602¥46,310$378,382

Interest and dividends income

28,341

27,774

226,934

Interest on loans and bills discounted

16,508

16,945

138,457

Interest and dividends on securities

11,575

9,754

79,6983

1

13Interest on due from banks

149

972

7,945

Other

104

100

821

Fees and commissions

9,380

10,602

86,627

Other operating income

9,073

4,711

38,497

Other ordinary income

2,807

3,221

26,324

2,807

3,221

26,324

Ordinary expenses

43,372

39,686324,259

Interest expenses

385

370

3,024

316

296

2,426

5

3

29

Call money and bills sold

(19)

(12)

(99)

Payables under securities lending transactions

56

75

616

Borrowed money

14

6

52

Other

11

(0)

(0)

Interest on call loans and bills bought

Other *1

Deposits
Net assets:

Negotiable certificates deposits

Common stock

15,40015,400125,827

Capital surplus

8,398

8,398

68,624

166,943

170,037

1,389,312(1,263)(1,163)(9,504)

Total shareholders’ equity

189,479

192,673

1,574,260

Fees and commissions

2,418

2,377

19,423

Unrealized gains on available-for-sale securities

30,395

17,257141,004

Other operating expenses

10,674

9,135

74,645

182--

General and administrative expenses *2

26,987

26,679217,984

Remeasurements of defined benefit plans(1,511)(1,583)(12,935)

Other expenses

2,905

1,123

9,182

Total accumulated other comprehensive income

29,066

15,674

128,069

755

490

4,008

138

109

898

2,150

633

5,173

2,755

3,036

24,808

6,229

6,624

54,124

221,439

211,494

1,728,034¥4,185,672¥4,469,779$36,520,792

Retained earnings
Treasury stock

Deferred gains or losses on hedges

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

52

Thousands of
U.S. Dollars

Millions of Yen

Liabilities:

THE YAMANASHI CHUO BANK 2022

Provision of allowance for possible loan losses
Other expenses *3
Ordinary profit

53

Thousands of
U.S. Dollars

Millions of Yen
FY2020(From April 1, 2020
to March 31, 2021)

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

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

17

42

347

17

42

347

586

645

5,272

Impairment losses *4

513

413

1,897

Losses on disposal of fixed assets

73

232

3,375

Income before income taxes and non-controllinginterests

5,661

6,021

49,198

Income taxes – current

2,166

1,484

12,127

Income taxes – deferred

253

143

1,174

Total income taxes

2,420

1,627

13,301

3,241

4,393

35,897

Profit attributable to non-controlling interests

150

152

1,242

Profit attributable to shareholders of the parent¥3,090¥4,241$34,655

Extraordinary income:Gain on disposal of fixed assets
Extraordinary losses

Profit54

THE YAMANASHI CHUO BANK 2022

[Consolidated Statements of Comprehensive Income]Thousands of
U.S. Dollars

Millions of Yen
FY2020(From April 1, 2020
to March 31, 2021)

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

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

Profit¥3,241¥4,393$35,897

Other comprehensive income *1

19,610(13,261)(108,354)

16,518(13,007)(106,278)

209

(182)

(1,491)

2,882

(71)

(585)

¥22,851¥(8,867)$(72,457)

Total comprehensive income attributable toshareholders of the parent¥22,665¥(9,150)$(74,766)

Total comprehensive income attributable tonon-controlling interests

186

282

2,309

Net unrealized gains on available-for-salesecurities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans
Total comprehensive income

55Millions of Yen

3) [Consolidated Statements of Changes in Net Assets]

Shareholders’ equity

Millions of Yen
Shareholders’ equity
FY2020 (From April 1, 2020
to March 31, 2021)

Commonstock

Balance at beginning ofcurrent year

¥15,400

Capitalsurplus¥8,398Retainedearnings

Treasurystock¥165,000

Total
shareholders’equity¥(1,347)

Changes during year:(1,115)(1,115)

Profit attributable toshareholders of the parent

3,090

3,090

Purchases of treasury stock
Disposals of treasury stock(31)

Transfer from retained
earnings to capital surplus

31

(0)

(0)

84

52

Balance at end of current year

Balance at beginning ofcurrent year

¥15,400

Capitalsurplus¥8,398Retainedearnings

Treasurystock¥166,943

Total
shareholders’equity¥(1,263)¥189,479

Cash dividends(1,117)(1,117)

Profit attributable toshareholders of the parent

4,241

4,241
(0)

(0)

100

71

Purchases of treasury stock
Disposals of treasury stock(28)

Transfer from retained
earnings to capital surplus

28

(28)

—

—

3,094

99

3,194

¥15,400¥8,398¥170,037¥(1,163)¥192,673

Net changes in items otherthan shareholders’ equity(31)

Total changes during year

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

Commonstock

Changes during year:¥187,451

Cash dividends

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

—

—

1,943

84

2,027

¥15,400¥8,398¥166,943¥(1,263)¥189,479

Balance at end of current year

Millions of Yen
Accumulated other comprehensive income

Millions of Yen

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

Accumulated other comprehensive income
FY2020 (From April 1, 2020
to March 31, 2021)
Balance at beginning ofcurrent year

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges¥13,912

¥(26)

Total
Subscription
Remeasureaccumulated
rights toments ofothersharesdefined benefit
comprehensive
plansincome¥(4,393)¥9,492¥147

Noncontrollinginterests¥2,570Total net
assets¥199,661

Changes during year:
Cash dividends(1,115)

Profit attributable toshareholders of the parent

3,090

Purchases of treasury stock(0)

Disposals of treasury stock52

56

16,483

209

2,882

19,574(8)

184

19,750Total changes during year

16,483

209

2,882

19,574(8)

184

21,778

Balance at end of current year

¥30,395¥182¥(1,511)¥29,066¥138¥2,755¥221,439

THE YAMANASHI CHUO BANK 2022

Deferred gains
or losses onhedges¥30,395

¥182

Total
Subscription
Remeasureaccumulated
rights toments ofothersharesdefined benefit
comprehensive
plansincome¥(1,511)¥29,066¥138

Noncontrollinginterests¥2,755

Total net
assets¥221,439

Changes during year:
Cash dividends(1,117)

Profit attributable toshareholders of the parent

4,241

Purchases of treasury stock(0)

Disposals of treasury stock

71

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

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

Balance at beginning ofcurrent year

Valuationdifference on
available-forsale securities(13,137)

(182)

(71)

(13,391)

(29)

280

(13,140)

Total changes during year

(13,137)

(182)

(71)

(13,391)

(29)

280

(9,945)

Balance at end of current year

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

57

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

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

Commonstock

Capitalsurplus

Balance at beginning ofcurrent year

$125,827$68,624 $1,364,028

Retainedearnings

Treasury
stock

Total
shareholders’equityFY2020(From April 1, 2020
to March 31, 2021)

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

FY2021(From April 1, 2021
to March 31, 2022)¥5,661¥6,021$49,198

1,991

1,904

15,559Impairment losses

513

413

3,375

Increase (decrease) in allowance forpossible loan losses

117

167

1,366

Increase (decrease) in provision for bonuses

(21)

604

4,943

26,100

Increase (decrease) in accrued bonuses todirectors and corporate auditors

0

(3)

(30)

$(9,504) $1,574,260

Decrease (increase) in net defined benefit
asset(4,541)(1,419)(11,600)

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

(3)

4

39

Increase (decrease) in reserve forreimbursement of deposits

(44)

(45)

(368)

Increase (decrease) in reserve forcontingent losses

(14)

(10)

(83)

(28,341)(27,774)(226,934)

385

370

3,024

Losses (gains) on investment securities

1,356

2,743

22,417

Losses (gains) on investments in money
held in trust

131

(157)

(1,286)

Foreign exchange losses (gains) – net(2,314)(14,156)(115,664)

55

189

1,550

Net decrease (increase) in loans and bills
discounted(184,552)(62,914)(514,052)

Net increase (decrease) in deposits

412,638

70,049572,348

8,545

2,062

16,853

Net increase (decrease) in borrowed money

253,346

168,249

1,374,697

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

(39)

(105)

(859)

Net decrease (increase) in call loans(12,960)

13,743112,290

Net increase (decrease) in payables under
securities lending transactions(23,134)

58,754

480,061(768)(2,308)(18,858).

$(10,319) $1,548,160

Changes during year:

Operating activities:

Cash dividends(9,134)(9,134)

Profit attributable toshareholders of the parent

34,65534,655
(4)

(4)

820

583

Purchases of treasury stock
Disposals of treasury stock(237)

Transfer from retained
earnings to capital surplus

237

Income before income taxes and noncontrolling interests
Adjustment for:
Depreciation and amortization(237)

Net changes in items otherthan shareholders’ equity
Total changes during year
Balance at end of current year—
$125,827—

25,284$68,624 $1,389,312

816

Thousands of U.S. Dollars
Accumulated other comprehensive income
FY2021 (From April 1, 2021
to March 31, 2022)
Balance at beginning ofcurrent year

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges$248,348$1,491

Total
Subscription
Remeasureaccumulated
rights toments ofothersharesdefined benefit
comprehensive
plansincome$(12,350)$237,489$1,135

Noncontrollinginterests

Total net
assets$22,513 $1,809,298

Changes during year:
Cash dividends(9,134)

Profit attributable toshareholders of the parent

34,655Purchases of treasury stock(4)

Disposals of treasury stock

583

Transfer from retained
earnings to capital surplus
Net changes in items otherthan shareholders’ equity(107,345)(1,491)(585)(109,421)

(238)

2,295

(107,363)

Total changes during year

(107,345)(1,491)(585)(109,421)

(238)

2,295

(81,263)

Balance at end of current year

$141,004—$(12,935)$128,069$898$24,808 $1,728,034

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

Losses (gains) on disposal of premises andequipment

Net increase (decrease) in negotiablecertificates of deposit

Net decrease (increase) in foreignexchanges (assets)

58

THE YAMANASHI CHUO BANK 2022

Thousands of
U.S. Dollars

Millions of Yen

59

Thousands of
U.S. Dollars

Millions of Yen[Notes to Consolidated Financial Statements]

FY2020(From April 1, 2020
to March 31, 2021)

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

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

(555)

908

7,423

—

20,000163,412Interest income (cash basis)

31,68428,566

233,402

Interest expenses (cash basis)

(501)

(387)

(3,163)

Other – net

5,964

4,320

35,299447,508

269,791

2,204,359(1,084)(1,812)(14,808)

446,423

267,979

2,189,550.
Net increase (decrease) in foreignexchanges (liabilities)
Net increase (decrease) in central clearing
counterparty margin requirement

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

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 4 companies
Yamanashi New Business Support Investment Limited Partnership
Yamanashi Sixth Industrialization Support Investment Limited Partnership
Yamanashi Chugin Regional Revitalization Investment Limited Business Partnership
Yamanashi Chuo Bank SDGs Investment Limited Partnership
Non-consolidated subsidiaries are excluded from the scope of consolidation since their assets, ordinary income,and our ownership 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

Investing activities:(1) Non-consolidated subsidiaries accounted for by the equity method

Purchases of investment securities(248,539)(553,605)(4,523,293)

Proceeds from sales of investment securities

155,305

338,4762,765,556

Proceeds from redemption of investment
securities

28,351

104,444853,376

(70)

—

—

Proceeds from decrease of money held in trust

4,920

152

1,246

Yamanashi Sixth Industrialization Support Investment Limited Partnership

Purchases of premises and equipment(1,076)(1,039)(8,497)

Yamanashi Chuo Bank SDGs Investment Limited Partnership

Proceeds from sales of premises andequipment

79

119

976

Purchases of intangible fixed assets

(983)

(616)

(5,037)(62,012)(112,069)(915,674)

Increase of money held in trust

Net cash provided by (used in) investing
activities

Not applicable(2) Affiliates accounted for by the equity method
Not applicable(3) Number of non-consolidated subsidiaries not accounted for by the equity method 4 companies
Yamanashi New Business Support Investment Limited Partnership
Yamanashi 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 our consolidated financial statements.
(4) Affiliates accounted for by the equity method
Not applicable

Financing activities:

3. Items relating to business years of consolidated subsidiaries(1,115)(1,117)(9,134)

Payment of dividends to non-controllinginterests

(1)

(1)

(14)

Repurchases of treasury stock

(0)

(0)

(4)

Proceeds from sales of treasury stock

0

0

0

Net cash provided by (used in) used infinancing activities(1,117)(1,120)(9,152)1

4381) Held-to-maturity debt securities, which management has the positive intent and ability to hold to maturity, are

Net increase (decrease) in cash and cash
equivalents

383,295

154,794

1,264,762

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

Cash and cash equivalents, beginning of year

357,152

740,447

6,049,900

Cash and cash equivalents, end of year *1¥740,447¥895,241$7,314,662

Dividends paid

Foreign currency transaction adjustments on cash
and cash equivalents

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 andthe related unrealized gains and losses are included in earnings.
(2) Valuation standards and methods for securities
reported at amortized cost based on the moving-average method (straight-line method), and available-for-salesecurities sold is computed by the moving-average method). Available-for-sale securities without fair values arestated at cost determined by the moving-average method.
Valuation differences on available-for-sale securities are reported as a separate component of net assets.
2) Securities used as trust assets in individually operated money trusts mainly for investment securities areevaluated using fair value measurement.

60

THE YAMANASHI CHUO BANK 2022

61

Housing loans withguarantees from theBank’s subsidiary,etc.

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

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

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

3 to 50 years

Other

2 to 20 years

Claims other thanthose describedabove

The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over 1 year and using aprospective loss ratio determined inconsideration of the outlook and other factors.

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

Claims on borrowers
requiring caution

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

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

Claims on borrowers
requiring supervision

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

Quasi-equity
loans

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

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

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

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

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

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

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

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

The allowance is recorded based on theprospective loss amount for the upcoming 3
years. The prospective loss amount is calculated
by determining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over 3 years and using aprospective loss ratio determined inconsideration of the outlook and other factors.

both premises and equipment and intangible fixed assets – are depreciated by the straight-line method over thelease period.

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

Quasi-equity loans

62

Definition

Calculation method for allowancefor possible loan losses

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

THE YAMANASHI CHUO BANK 2022

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

The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over 1 year and using aprospective loss ratio determined inconsideration of the outlook and other factors.

63

Claims otherthan thosedescribed above

The allowance is recorded based on theprospective loss amount for the upcoming 3
years. The prospective loss amount is calculated
by determining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over 3 years and using aprospective loss ratio determined inconsideration of the outlook and other factors.

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

Quasi-equity
loans

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

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

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

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

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

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

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

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

Claims otherthan thosedescribed above

Claims on potentiallybankrupt borrowers

Effectively bankrupt
borrowers

64

Claims on debtors under the same
circumstances as bankrupt borrowers

THE YAMANASHI CHUO BANK 2022

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

The allowance is recorded based on theoutstanding balance of the claims after deductionof the amounts expected to be collected throughthe disposal of collateral and the execution ofguarantees(6) Provision for bonuses
Provision for bonuses are provided to cover the payment of bonuses to employees, in the amount of the estimatedbonuses payable to employees attributable to each fiscal year.

The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over 1 year and using aprospective loss ratio determined inconsideration of the outlook and other factors.
The allowance is recorded based on theprospective loss amount for the upcoming year.
The prospective loss amount is calculated bydetermining several loss ratios based on the
average value of the actual loan loss ratio over acertain period in the past based on the actual
loan loss record over 1 year and using aprospective loss ratio determined inconsideration of the outlook and other factors.

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

Legally bankrupt
borrowers

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

65

Evaluation of hedge effectiveness is taken as an evaluation of effectiveness when the conditions of the hedge
instrument and hedge object are largely identical.
(16) Cash and cash equivalents(Important Accounting Estimates)
1. Estimates of allowance for possible loan losses(1) Amounts recorded on the consolidated financial statements in the fiscal year ended March 31, 2022

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

From April 1, 2021 to March 31, 2022

Japan.

Allowance for possible loan losses(Millions of yen)
¥11,707(2) Other information to aid the understanding of estimates among individuals using the consolidated financial
statements
1) How estimates are calculated
The standards for recording the allowance for possible loan losses are presented in “(5) Standards for recording
the allowance for possible loan losses” under “4. Items relating to accounting standards” in “Notes toConsolidated Financial Statements (Important items used as a basis for preparing consolidated financial
statements).”2) Assumptions used to calculate estimated amounts(A) Assumptions regarding forecasts of debtors’ business results, which are used to determine debtor categories
are set based on information available to the Bank. In particular, for debtors whom the Bank supports inbusiness improvement, the Bank determines the category of a debtor based on the reasonableness andfeasibility of its business improvement plan or the prospect of formulating a reasonable and feasible business
improvement plan (hereinafter “effective business improvement plan”). Business improvement plans areprepared based on various assumptions and data. The Bank comprehensively judges the reasonableness andfeasibility of those assumptions and data by considering factors such as the debtor’s financial status, thecondition of the debtor’s industry, the effects of various measures in the business improvement plan, the pastrecord of progress, and the outlook for achieving goals. In cases where the debtor is in the process of
formulating a business improvement plan as of the end of the fiscal year, the Bank determines the debtor
category by assessing the likelihood of the debtor formulating an effective business improvement plan while
taking into consideration the debtor’s willingness to formulate such a plan and the resources available forrebuilding.
(B) The economy has been gradually improving since mid-2020, although the impact of COVID-19 will continue forthe time being. The extensive reach of various COVID-19 countermeasures and the widespread adoption of
vaccines and related initiatives are expected to continue to drive a sustained economic recovery despite theemergence of mutant strains and other effects. Although COVID-19 will temporarily have a serious impact on
certain industries during this period, the Bank assumes that the economic policies of national and local
governments, support from financial institutions and other assistance will continue. In the fiscal year ended
March 31, 2022, there have been no major changes to the assumptions regarding the impact of COVID-19 thatwere presented in the consolidated financial statements for the fiscal year ended March 31, 2021 (ImportantAccounting Estimates).
(C) The Bank assumes that claims on normal borrowers except for quasi-equity loans, claims subject to the DCF
method and claims on borrowers requiring supervision and support will generate similar losses as the claims tonormal borrowers the Bank held in the past. The Bank further assumes that claims on borrowers requiringsupervision will generate similar losses as claims on borrowers requiring supervision the Bank held in the past,and that claims on other borrowers requiring caution will generate similar losses as claims on other borrowers
requiring caution the Bank held in the past. The Bank also assumes that claims on borrowers requiringsupervision and support who are classified as borrowers requiring supervision will generate similar losses asclaims on potentially bankrupt borrowers the Bank held in the past, and that claims on borrowers requiringsupervision and support who are classified as other borrowers requiring caution will generate similar losses asclaims on borrowers requiring supervision the Bank held in the past.
3) Impact on the consolidated financial statements for the following fiscal year

66

THE YAMANASHI CHUO BANK 2022

67

(A) Forecasts of debtors’ business results, which are used to determine debtor categories may differ from resultsthat were initially assumed due to factors such as changes in anticipated events and the external environment. If
the forecasts need to be revised, these revisions could have a significant impact on the consolidated financial
statements for the following fiscal year.
(B) The Bank may incur substantial loan losses if COVID-19 infections spread more widely than expected; if the

Scheduled to be adopted from the beginning of the fiscal year ending March 31, 2023.
(3) Impact of adopting revised accounting standards and implementation guidance
The amount of the impact is currently under evaluation.

effects of various infection countermeasures, vaccines and related initiatives do not materialize as anticipated;(Relating to Consolidated Balance Sheets)

or if economic policies of the national and local governments, support from financial institutions and other*1 Shares held or investments in non-consolidated subsidiaries and affiliates

assistance do not deliver the anticipated benefits. These losses could have a significant impact on the

As of March 31, 2022

consolidated financial statements for the following fiscal year.

Investments(C) The Bank assumes that claims except for quasi-equity loans, claims subject to the DCF method and claims on
borrowers requiring supervision and support will generate similar losses as claims on normal borrowers, claims
on borrowers requiring supervision and claims on other borrowers requiring supervision the Bank held in thepast. The Bank further assumes that claims on borrowers requiring supervision and support will generate similar
losses as claims on potentially bankrupt borrowers and claims on borrowers requiring supervision the Bank heldin the past. These assumptions could differ markedly from the actual loss experience due to factors such aschanges in the business environment of debtors. In this case, there could be a significant impact on the
consolidated financial statements for the following fiscal year.

(Changes in Accounting Standards)(Application of Accounting Standard for Revenue Recognition)
The Bank has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020;
hereinafter “Revenue Recognition Standard”) and other relevant standards from the beginning of the consolidated fiscal
year under review. Under the new accounting standards, revenue is recognized as the amount expected to be received
in exchange for promised goods or services when the control of such goods or services is transferred to the customer.
The Bank applies the Revenue Recognition Standard in accordance with the transitional treatment provided for in theproviso to Paragraph 84 of the Revenue Recognition Standard. The effect of the application on the consolidated financial
statements is immaterial.
In accordance with the transitional treatment set forth in Paragraph 89-3 of the Revenue Recognition Standard, notes onrevenue recognition for the previous consolidated fiscal year are not presented.

(Millions of yen)¥779

*2 Claims to be disclosed under the Banking Act and Act on Emergency Measures for the Revitalization of the
Financial Functions are included in the following accounts in the consolidated balance sheet: corporate bonds(limited to those whose principal and interest are fully or partially secured and issued under private placements aspermitted in Article 2, Paragraph 3 of the Financial Instruments and Exchange Act) under “Securities,” loans andbills discounted, foreign exchange, accrued interest, suspense payments under “Other assets,” including customer
liability for acceptances and guarantees and securities if they are loaned (limited to those under loan for use
contracts or lease contracts).
As of March 31, 2022

(Millions of yen)

Distressed claims and equivalents¥7,853Claims with risk

14,233Claims three or more months past due—

Restructured loans for which the Bank hasrelaxed lending conditions

3,446

Total

25,533Distressed claims and equivalents represent loans to debtors in bankruptcy procedures including thecommencement of bankruptcy proceedings, reorganization proceedings, rehabilitation proceedings, and othersimilar claims.
Claims with risk represent loans other than distressed claims and equivalents for which the debtors have not yet
entered into bankruptcy but their financial condition and business performance have deteriorated, and therefore, it
is highly probable that the principal and interest cannot be collected in accordance with the contracts.

(Application of Accounting Standard for Fair Value Measurement)

Claims three or more months past due represent loans whose principal or interest payments are three or more

The Bank has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019;

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

hereinafter “Fair Value Measurement Standard”) from the beginning of the consolidated fiscal year under review and will

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

prospectively apply the new accounting standards stipulated by the Fair Value Measurement Standard, etc. infavorable to debtors, including reductions or waivers of interest, deferred payment of principal or interest, and debt

accordance with the transitional treatment provided in Paragraph 19 of the Fair Value Measurement Standard andforgiveness, are granted but are not classified as distressed claims and equivalents, claims with risk, or claims

Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). The

three or more months past due.

effect of the application on the consolidated financial statements is immaterial.

The above claim amounts are before deducting allowances for possible loan losses.

In addition, the Bank will include notes on fair value information by level within the fair value hierarchy in the notes on“Financial Instruments and Related Disclosure.” However, in accordance with the transitional treatment provided in
Paragraph 7-4 of the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ
Guidance No. 19, July 4, 2019), notes pertaining to the previous consolidated fiscal year are not presented.

(Unapplied Accounting Standards, etc.)•

Implementation Guidance on Accounting Standard for Fair Value Measurement (Revised ASBJ Guidance No. 31,
June 17, 2021)(1) Overview
The calculation method for the fair value of investment trusts, the handling of the notes thereto, and the handling ofnotes on the fair value of investments in partnerships, etc. which is recorded at the net amount equivalent to equity
interest on the balance sheet have been determined.

68(2) Scheduled adoption date

THE YAMANASHI CHUO BANK 2022

(Change in Presentation Method)
With the “Cabinet Office Order Partially Amending the Regulation for Enforcement of the Banking Act (Cabinet
Office Order No. 3, January 24, 2020)” coming into effect on March 31, 2022, the Bank has changed the asset
categories to be disclosed as “risk-monitored loans” under the Banking Act to those to be disclosed as “claims
under the Act on Emergency Measures for the Revitalization of the Financial Functions.”*3 Bills discounted are accounted for as financial transactions in accordance with JICPA Industry Audit Committee
Report No. 24, March 17, 2022, “Treatment for Accounting and Auditing of Application of Accounting Standard for
Financial Instruments in Banking Industry.” The Bank has the right to sell or pledge commercial bills discounted andforeign exchanges bought without restrictions. The face amount was as follows:
As of March 31, 2022

(Millions of yen)
¥3,15669

(Relating to Consolidated Statements of Income)*4 Assets pledged as collateral were as follows:
As of March 31, 2022

*1 “Other ordinary income” includes the following item:(Millions of yen)

Assets pledged as collateral

From April 1, 2021 to March 31, 2022

Investment securities¥608,826

Loans and bills discounted

202,051

Gain on sales stock

66,082

Payables under securities lending transactions

70,969Borrowed money

628,589¥2,420*2 “General and administrative expenses” include the following:

Liabilities related to pledged assets
Deposits

From April 1, 2021 to March 31, 2022

¥11,447*3 “Other ordinary expenses” include the following:
From April 1, 2021 to March 31, 2022

which are as follows.
As of March 31, 2022

Loss on sales of equity securities¥40,000

15

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

256*5 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 ofborrowed money, were as follows:
As of March 31, 2022

¥321

*4 In the case of the following asset groups, book values were written down to the recoverable levels due to falling

1,030

Guarantee deposits(Millions of yen)

Loss on devaluation of stocks and other securities(Millions of yen)Central clearing counterparty margin requirements(Millions of yen)

Salary allowance

Other assets include central clearing counterparty margin requirements and guarantee deposits, the amounts ofCash collateral paid for financial instruments(Millions of yen)

From April 1, 2021 to March 31, 2022

(Millions of yen)

Location

Use

Category

Total
impairment loss

Yamanashi Prefecture

Operating assets

Land and other tangible fixed assets¥11

Idle assets

Land

388

Operating assets

Land and other tangible fixed assets

12

–

–

¥413

(Millions of yen)

Lease contract assets¥759

Outside Yamanashi Prefecture

Corresponding borrowed money

491

Total

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

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

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

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

The amounts of unused commitments as of March 31, 2022 were as follows:
As of March 31, 2022
(Millions of yen)regarded as shared assets.

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

Recoverable amounts are whichever is the higher of net selling prices and value in use. In the case of net selling¥529,974

Amount of unused commitments whose originalcontract terms were within one year or
unconditionally cancelable at any timetreated as individual asset units. Head Office, computing centers, company residences and dormitories, etc., areprices, the calculation involves deduction of expected disposal expenses from the sum reasonably calculated byreal estate asset valuation, etc. In the case of value in use, the calculation involves discounting future cash flows by

499,044a discount rate.

Since many of these commitments are expected to expire without being drawn upon, the total amount of unused
commitments does not necessarily represent actual future cash flow requirements. Many of these commitments

All of the recoverable amounts for the fiscal year ended March 31, 2021 and the fiscal year ended March 31, 2022
represent net selling prices.

have clauses 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.
*7 Accumulated depreciation of tangible fixed assets
As of March 31, 2022

(Millions of yen)

Total amount of accumulated depreciation¥34,498*8 Deferred gains on tangible fixed assets deductible for tax purposes:
As of March 31, 2022

(Millions of yen)

Deferred gains¥740(Reduction entry amount for the consolidated fiscal year)(–)*9 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, 2022

(Millions of yen)
¥7,47270

THE YAMANASHI CHUO BANK 2022

71

(Relating to Consolidated Statements of Comprehensive Income)

3. Items relating to dividends*1 Reclassification adjustment and tax effect related to comprehensive income
From April 1, 2021 to March 31, 2022
(Millions of yen)

(1) Dividend paid during FY2021

Difference arising during the fiscal year¥(21,545)

Reclassification adjustment to profit and loss

2,868

Amount before income tax effect(18,677)

Income tax effect

5,669

Valuation difference on available-for-sale securities

Type of stock

Total dividend(Millions of yen)

Dividends per
share (Yen)

Reference date

Effective date

Annual General
Meeting of
Shareholders on
June 25, 2021

Commonstock¥558¥17.50March 31, 2021

June 28, 2021

Board of Directors’Meeting on
November 12, 2021

Common
stock

559

17.50

September 30, 2021

December 3, 2021

(Resolution)

Valuation difference on available-for-sale securities:(13,007)

Deferred gains or losses on hedges:(2) Dividends whose reference date falls in the current fiscal year, but where the effective date of dividend occurs after

Difference arising during the fiscal year

(122)

Reclassification adjustment to profit and loss

(140)

the end of FY2021.

(262)(Resolution)

Amount before income tax effect
Income tax effect79

Gains or losses on deferred hedges

Annual General
Meeting of
Shareholders on
June 24, 2022

(182)

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

(614)

Reclassification adjustment to profit and loss

511

Amount before income tax effect31

Remeasurements of defined benefit plans(71)

Total other comprehensive income

32,783——32,783

Remarks

807

Note 1, 2

The Bank

Stock options as
share
subscription rights

Total

72

THE YAMANASHI CHUO BANK 2022

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

Decrease

March 31,2022

June 27,
2022(Millions of yen)
¥895,501(259)¥895,241(Relating to Lease Transactions)
Finance leases(Lessor)(Millions of yen)

Gross lease receivables¥8,376

Estimated residual value

195

Unearned interest income(793)

Net investment in leases¥7,779

2. Expected amounts from the collection of gross lease receivables and net investment in leases for the year ended
March 31, 2022 are as follows:

2. Items relating to share subscription rights and own share options

Increase¥22.50

As of March 31, 2022

Notes: 1. The increase in the number of treasury shares during the consolidated fiscal year under review is due to the demand forpurchase of shares less than one unit.
2. The breakdown of the decrease in treasury shares during the fiscal year under review is as follows:
Decrease by exercise of stock option rights 18 thousand shares
Decrease by allotment of restricted shares 51 thousand shares

FY2021Retainedearnings

1. Details of net investment in leases for the year ended March 31, 2022 are as follows:

Treasury stock

Beginningof FY2021¥719

Cash and cash equivalents

Shares outstanding

Class of shares
to be issued ortransferred upon
Breakdown ofClassification
share
the exercise ofshare
subscription rights
subscription
rightsCommonstock

Due from banks, excluding due from Bank of Japan(Thousands of shares)

Number of sharesat the end of
FY202169

Effective
date

Cash and due from banks

Decrease in
number of shares
during FY2021

0

Referencedate

From April 1, 2021 to March 31, 2022¥(13,261)

Increase in
number of shares
during FY2021

876

Dividends per
share (Yen)equivalents at March 31, 2022, is as follows:

Number of sharesat the beginningof FY2021

Common stock

Fund fordividend*1 The reconciliation of the cash and due from banks in the consolidated balance sheets and the cash and cash

From April 1, 2021 to March 31, 2022
1. Items relating to kind and total number of shares outstanding and treasury stock

Common stock

Total dividend(Millions of yen)

(Relating to Consolidated Statements of Cash Flows)(102)

Income tax effectType of stock

End of
FY2021

As of March 31, 2022
Balance asof the endof FY2021(Millions of
yen)

–

¥109

–

¥109

(Millions of yen)
Gross lease receivables

Net investment in leases

1 year or less

¥11

¥2,7971 to 2 years

11

2,210

2 to 3 years

11

1,528

3 to 4 years

10

996

4 to 5 years

3468Over 5 years

—

374

Total

¥47

¥8,37673

(Financial Instruments and Related Disclosure)
1. Qualitative Information of Financial Instruments

hedge” as a general rule every half term to control interest rate risk properly in the ALM Committee in which(1) Policy for financial instruments

regularly. In addition, in the ALM committee meeting held monthly, the Group examines an interest rate

The Group is involved in financial services including the leasing and the credit card business, etc., around thebanking business. Within banking, we are involved in the business of taking deposits, making loans, and trading
securities, as well as domestic and foreign exchange operations, corporate bond underwriting, over-the-countersales of public bonds such as Japanese government bonds, investment trusts and insurance, and various
consulting services. In addition, for the purpose of short-term fund raising, we enter into call loans and call money inthe interbank market. Derivative transactions are primarily meant for hedges against interest rate risk or the risk of
exchange fluctuations and may involve transactions such as interest rate swaps, forward exchanges or currency
swaps. 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 have credit 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 ofholding to maturity, investment available for sale and policy investment. 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 stablefinancing by maintaining the soundness of financial affairs, but has liquidity risk that it may not be possible to obtainnecessary 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 oninternal standards in accordance with JICPA Industry Audit Committee Report No. 25, October 8, 2020, “Treatmentof Accounting and Auditing concerning Accounting for Foreign Currency Transactions in the Banking Industry.”(3) Risk management systems for financial instruments
1) Credit risk management
The Group performs maintenance of the credit screening system, fosters talented human resources and positively
advances credit risk management. The credit screening system keeps the credit screening section independentand performs strict screening in advance, performs interim screening and assesses credit enhancements andcredit risk management after lending. Regarding administration, the marketing section and credit screening
section or the headquarters and business offices perform mutual check functions. The Group tries for theobservance of the financing rule and appropriate use and thereby acts in enhancement of system support such as
the practical use of the financing support system. Furthermore, for coping with risk fluctuating continually, theGroup monitors the actual condition of customers through credit rating and self- assessment to be performed
regularly or at any time. The Group introduced the “Credit risk information integration service,” which is a joint
undertaking of the banks that joined the Regional Bank Association, aiming at upgrading credit risk management
and 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 andthe board 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

74

THE YAMANASHI CHUO BANK 2022

management is involved as the main members and involved in examining interest rate changes and reviews it
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 the risk management section, the Group calculates VaR
and basis point value (BPV), and manages the interest rate risk amount of the banking account. In addition, theGroup performs stress tests based on a stress scenario extending to each risk category. These results arereported 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 of foreign 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 inconformity with a basic administration policy. The basic administration policy is as follows. The Group executes
the market business while attempting to secure fairness and prompt correspondence. The Group realizes theopportunity for earnings by actively taking risks that can be measured and managed. The proof of maximizing
management vitality, like earnings and equity capital, is assumed to be a precondition. The operative plans are
decided by the board of managing directors after discussion with the ALM Committee.
In making the plans, the Group examines the expected rate of return based on the prospect of interest rate andstock 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 securingof financial soundness and earning 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 a manner that ensures that VaR (the amount of risk after writing down investment inshares undertaken for strategic business purposes for a portion of VaR) does not exceed the maximum amountof risk (amount of capital allocation) determined by a resolution of the Board of Directors or other appropriate
bodies. The variance-covariance method (holdings period: 240 days; confidence interval: 99%; observation
period: 240 business days) is used to measure VaR (excluding trading account securities) while taking into
consideration the correlation among interest rates for shares and investment trusts. In addition, with respect tothe 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 ismeasured using the separate holding period of 10 days. Financial instruments that are considered 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 by consolidated
subsidiaries, these financial instruments are excluded from the scope of VaR measurement.
The Group’s VaR (excluding trading account securities) amounted to ¥61,263 million as of March 31, 2022
compared with ¥48,811 million as of the end of the previous fiscal year. The VaR of trading account securities
amounted to ¥0 million. (Previous consolidated fiscal year: ¥0 million). The Group undertakes backtesting tocompare VaR, calculated using VaR measurement models with actual income and loss. The results of this75

comparison are reported to the ALM Committee on a monthly basis. As a result of this backtesting, the Group is

2. Fair Values of Financial Instruments

confident that the VaR measurement models used are more than adequate in accurately identifying market

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

risks. However, VaR represents the amount of market risks arising with a certain probability using a statisticaletc. with no market price and investments in partnerships are not included in the table (see Note 1). For cash and due

methodology based on historical market volatilities. Accordingly, situations may arise where it is not possible tofrom banks, call loans and bills purchased, foreign exchanges (assets/liabilities), central clearing counterparty margin

identify risks appropriately due to market environment volatility that exceeds normally recognized parameters.

requirement, and payables under securities lending transactions, the disclosure is omitted since their fair value3) Liquidity risk management

approximates their carrying amount due to short maturity.

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

As of March 31, 2022

reserves for unexpected 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
Certain assumptions are used in measuring the fair value of financial instruments. Accordingly, the results of suchmeasurements may vary if different assumptions are used.

(Millions of yen)
Carrying amount inconsolidatedbalance sheets

Fair value

Difference(1) Securities
Held-to-maturity¥10,306¥10,241¥(64)

Available-for-sale securities

1,398,310

1,398,310—(2) Loans and bills discounted

2,049,047

2,036,384

2,038,267

1,883

Total assets¥3,445,001¥3,446,819¥1,818(1) Deposits¥3,459,276¥3,459,477¥53

50,42450,4250629,080

629,080(0)¥4,138,929¥4,138,983¥53¥(4,825)¥(4,825)

¥—

—

—

—

¥(4,825)¥(4,825)¥—

Accrued income (Interest on loans)

1,119

Deferred income (Interest on loans andguarantee charge) *1(2,367)

Allowance for possible loan losses *2(11,415)

Accrued expenses (Interest on deposits)

147
3,459,423(2) Negotiable certificates of deposits
Accrued expenses (Interest on NCDs)(3) Borrowed money
Total liabilities

50,4240

Derivatives *3
Hedge accounting is not applied
Hedge accounting is applied
Total derivatives*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 allowance for possible loan losses and specific allowance for possible loan losses provided to “Loans and bills discounted”
are separately presented in the above table.
*3. Derivative transactions recorded in “Other assets” and “Other liabilities” are aggregated and shown herein. Assets and liabilities
attributable to the derivative transactions are totally offset and the net liability position as a consequence of offsetting would be
represented with brackets.

76

THE YAMANASHI CHUO BANK 2022

77

(Note 1)

The consolidated balance sheet amounts for stocks, etc. with no market price and contributions to(Note 3)Maturity analysis for interest-bearing debt

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

As of March 31, 2022

financial instruments.
As of March 31, 2022

1 year or
less(Millions of yen)
¥602

Contributions to unions*3¥5,383*1. Stocks, etc. with no market price are not subject to fair value disclosure in accordance with Paragraph 5 of the “Implementation
Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, March 31, 2020).
*2. Classified as available-for-sale securities; in the current consolidated fiscal year, an impairment loss of ¥15 million was recognized.
*3. Contributions to unions are not subject to fair value disclosure in accordance with Paragraph 27 of the “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019).

(Note 2)

Maturity analysis for monetary claims and securities with contractual maturities

As of March 31, 2022

(Millions of yen)
1 year or
lessOver 1 year
less 3 years

Over 3 years
less 5 years

Over 5 years
less 7 years

Over 7 years
less 10 years

Over 10years¥825,474

¥—

¥—

¥—

¥—

¥—

Securities

119,090

135,976

170,495

183,719

235,767

113,407

1,371

4,322

1,551

228

2,840

—

Municipal bonds

—

—

—

—

2,840

—

Corporate bonds

1,371

4,322

1,551

228

—

—

Available-for-salesecurities that havematurities

117,719

131,654

168,943

183,491

232,927

113,407

Japanesegovernment bonds

73,10026,00090,4007,000

64,00046,000

Municipal bonds

37,60065,50044,71287,442

66,97757,937

Corporate bonds

6,770

12,371

8,863

26,63061,4609,470

247

27,782

24,96762,41840,489—Loans and bills
discounted*1

288,943

372,538

316,387

247,284

295,037

377,272

Central clearing
counterparty margin
requirement*2

40,000

—

—

—

—

—

¥1,273,508¥508,515¥486,882¥431,003¥530,805¥490,680

Others

Total

Over 3 years
less 5 years

Over 5 years
less 7 years

Over 7 years
less 10 years¥3,080,651¥197,325¥66,070

¥—

¥—

¥—

Negotiable certificatesof deposit

50,424

—

—

—

—

—

Payables under
securities lendingtransactions

70,969

—

—

—

—

—

Borrowed money
Total

Over 10years

423,801

119,834

85,444———¥3,625,846¥317,159¥151,515

¥—

¥—

¥—

* Non-interest-bearing deposits such as checking accounts are excluded. Demand deposits are included in “1 year or less.”

3. Fair value of financial instruments breakdown by level
The fair value of financial instruments is classified into the following three levels according to the observability andmateriality of the inputs used to measure fair value.

Due from banks

Held-to-maturity

Over 1 year
less 3 years

Deposits *Carrying amount
Stocks, etc. with no market price*1 *2(Millions of yen)

*1 Of loans and bills discounted, the portion whose timing of collection is unforeseeable, such as loans to borrowers in legal
bankruptcy, in virtual bankruptcy and in possible bankruptcy, amounting to ¥22,041 million, is not included in the above table. Loansthat do not have contractual maturities, amounting to ¥129,325 million are not included either.
*2 Because no period is set for the central clearing counterparty margin requirement, it is included under “1 year or less.”

Fair value level 1:

Fair value measured using observable inputs, i.e. quoted prices in active markets for assets or
liabilities that are the subject of the measurement.

Fair value level 2:

Fair value measured using observable inputs other than those in level 1.

Fair value level 3:

Fair value measured using unobservable inputs.

If multiple inputs that are significant to the fair value measurement are used, the fair value measurement is categorized inits entirety in the level of the lowest level input that is significant to the entire measurement.
(1)

Financial instruments measured at fair value in the consolidated balance sheets

As of March 31, 2022
Classification(Millions of yen)
Fair value
Level 1

Level 2

Level 3

Total

Securities
Available-for-sale securities
Japanese government bonds, municipal
bonds, etc.
Corporate bonds¥317,373¥359,125—¥676,499—

126,069—

126,069

Equity securities

55,354——55,354Foreign securities

120,22127,038—147,259

Interest-related

—

85

—

85

Currency-related

—

104

—

104

¥492,949¥512,423—¥1,005,373

—

¥26

—

¥26

Derivative transactions

Total assets
Derivative transactions
Interest-related
Currency-related
Total liabilities

—

4,989

—

4,989

—

¥5,015—¥5,015* The above table does not include investment trusts for which transitional treatment is applied as prescribed in Article 5, Paragraph 6 ofthe supplementary provision of the “Cabinet Office Order to Partially Amend the Regulation on Terminology, Forms, and Preparation
Methods of Financial Statements” (Cabinet Office Order No. 9, March 6, 2020). The consolidated balance sheet amount for suchinvestment trusts is ¥393,127 million.

78

THE YAMANASHI CHUO BANK 2022

79

(2)

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

As of March 31, 2022
Classification

Borrowed money
The fair value of borrowed money is measured at the present value calculated by discounting the aggregate(Millions of yen)amount of principal and interest at the interest rate that reflects the remaining period of each borrowing and its

Fair value
Level 1

Level 2

Level 3credit risk based on each category during a certain period of time. Of which, borrowed money with floating interest

Total

rates reflects the market interest rates in the short-term, and the credit status of the Bank and its consolidated

Securities

subsidiaries has not significantly been changed after the execution of the borrowings; thus, the carrying amount is

Held-to-maturity debt securities
Municipal bonds—¥2,802¥—¥2,802

presented as the fair value since it is deemed that the fair value approximates the carrying amount. For borrowed

Corporate bonds

—

—

7,439

7,439

money with short contractual terms (less than one year), the carrying amount is presented as the fair value since

Loans and bills discounted——

2,038,267

2,038,267

Total assets—¥2,802¥2,045,706¥2,048,508

Deposits—¥3,459,477—¥3,459,477

Negotiable certificates of deposit—

50,425—50,425

Borrowed money—

629,080—

629,080

Total liabilities—¥4,138,983—¥4,138,983(Note 1)the fair value approximates the carrying amount. The said fair value is classified as level 2.
Derivative transactions
Since derivative transactions are over-the-counter transactions without published quoted prices, their fair values aremeasured using the present value technique depending on the type of transaction and the maturity period. The
main inputs used in those valuation techniques are interest rate and exchange rate, among others. The said fairvalue is classified as level 2.

Description of valuation techniques and inputs used for fair value measurement

AssetsSecurities(Note 2): Information on financial instruments carried at fair value level 3 in the consolidated balance sheets
Not applicable.

Securities for which unadjusted quoted prices in active markets are available are classified as fair value level 1.
Such securities mainly include listed equity securities and government bonds.
Even if available quoted prices are used, securities are classified as fair value level 2 when the relevant markets
are not active. Such securities mainly include municipal bonds and corporate bonds.
When quoted prices are not available, the fair value is measured by using valuation techniques such as the present
value technique discounting future cash flows. Observable inputs are used in the valuation to the maximum extent
possible. Inputs include TIBOR, government bond yields, credit spreads, and probability of default. When significant
unobservable inputs are used for the measurement, the fair value is classified as level 3.
Loans
The fair value of loans is measured by discounting the aggregate value of principal and interest at the market
interest rate that reflects credit risks, etc. for each category based on the type of loan, internal rating, and maturity.

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

1. Trading securities
As of March 31, 2022

Unrealized gains/losses recognized as income
Trading securities

As of March 31, 2022

measured at the discounted present value of estimated future cash flows or the discounted present value of
estimated collectible amounts through collateral or guarantee. Such fair value is classified as level 3.
Liabilities
Deposits and negotiable certificates of deposit(Millions of yen)Typeamortized cost is used as the fair value of those loans as the fair value approximates the acquisition cost or
respect to claims on borrowers in legal bankruptcy, virtual bankruptcy, or possible bankruptcy, the fair value is¥—

2. Held-to-maturity debt securities

Loans with floating interest rates reflect the market interest rates in the short-term; thus, the acquisition cost or
amortized cost where the credit situation of the borrowers does not vary significantly after executing the loans. With(Millions of yen)

Fair value exceeded carrying
amount:Fair value not exceeded carrying
amount:Total

Municipal bonds

Carrying amountin consolidatedbalance sheets¥—

Fair value¥—

Differences¥—

Corporate bonds

1,573

1,574

1

Sub-total

1,573

1,574

1

Municipal bonds

2,833

2,802

(31)

Corporate bonds

5,899

5,864

(35)

Sub-total

8,733

8,666

(66)

¥10,306¥10,241¥(64)

For demand deposits payable immediately on demand as of the consolidated balance sheet date, the fair value ismeasured at the amount payable. The fair value of time deposits and negotiable certificates of deposit is measured
at the discounted present value of future cash flows based on each category during a certain period of time. Market
rates are used to discount future cash flows. For deposits with short maturities (less than one year), the carrying
amount is presented as the fair value since the fair value approximates the carrying amount. The said fair value isclassified as level 2.

80

THE YAMANASHI CHUO BANK 2022

81

3. Available-for-sale securities
As of March 31, 2022

(Millions of yen)
Fair value inconsolidatedbalance sheets

Type

Valuationdifferences

Cost

7. Securities recognized for revaluation loss
Among securities other than securities for trading purposes (excluding stocks, etc. with no market price and contributions
to unions), for securities that are not recognized as having prospects of recovery after their fair value fell sharply
compared with the acquisition costs, fair value is recognized in the consolidated balance sheets, and valuation difference

Japanese stocks¥51,164¥18,518¥32,646

Bonds total

303,771297,978

5,793

Japanese Government bonds

205,465

200,665

4,800Japanese municipal bonds

60,942

60,238703

Japanese corporate bonds

37,36437,074289

153,987

144,380

9,607

8,527

8,511

16

508,924

460,877

48,047

4,190

5,258

(1,068)498,796504,869(6,072)

Japanese Government bonds

111,907

113,922(2,014)

Japanese municipal bonds

298,183

301,206(3,022)

Japanese corporate bonds

88,70589,740(1,035)386,399

402,172(15,773)

138,732

144,953(6,220)(Relating to Money Held in Trust)
1. Money held in trust for investment

889,386

912,300(22,913)

As of March 31, 2022

¥1,398,310¥1,373,177¥25,133

Fair value
exceeded cost:

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

Other securities
Foreign securities
Sub-total
Total

4. Held-to-maturity debt securities sold(Millions of yen)
Cost of securities soldJapanese corporate bonds

Sales costs¥50

Gain (loss) on sale
¥50¥0(Reason for sale) Retirement by purchase(Millions of yen)
Sales costs

Gross realized gains

Gross realized losses

Japanese stocks¥4,364¥1,345¥240

Bonds total

14,08079

50

14,08079

50Japanese municipal bonds

—

—

—

Japanese corporate bonds

—

—

—

Other securities

205,854

1,520

3,616

Foreign securities

172,766

209

3,478

Total

¥224,299¥2,946¥3,907

6. Securities for which the purpose for holding has changed
Not applicablefollows:(1)

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

(2)

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

(3)

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

(Millions of yen)
Valuation difference included inconsolidated gains or losses

Balance sheet amount¥5,000¥0

2. Money held in trust to maturity
Not applicableNot applicable

From April 1, 2021 to March 31, 2022

Japanese Government bonds

The impairment accounting standards applied in cases where fair value is judged to have fallen significantly are as

3. Other money held in trust (for objectives beside investment and held-to-maturity)

5. Available-for-sale securities sold
Type

There were no impairment losses for the consolidated fiscal year under review.

Money held in trust for investment

From April 1, 2021 to March 31, 2022Type

is treated as an impairment loss (“revaluation loss”) in the consolidated year under review.

(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:
As of March 31, 2022

(Millions of yen)Amounts

Valuation difference¥25,225

Other securities

25,225

Deferred tax liabilities

7,640

Net unrealized gains (before non-controlling interests)
Non-controlling interests
Net unrealized gains on available-for-sale securities

17,585327¥17,257(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 theconsolidated balance sheet date are as follows. Contract or Notional Amounts do not show market risk of derivative
instruments.

82

THE YAMANASHI CHUO BANK 2022

83

(1)

Interest-related derivative instruments(2)

As of March 31, 2022

(Millions of yen)Type

Contract Amountor Notional
AmountOver 1 Year

Currency-related derivative instruments

As of March 31, 2022

Unrealized
Gain/Loss

Fair Value

Type

Sold

—

—

—

—

Buy

—

—

—

—

Sold

—

—

—

—

Buy

—

—

—

—

Interest rate options

Financial
instruments
exchange

—

—

—

—

Buy

—

—

—

—

Interest rate swaps
Fixed receipt andvariable interest
payment¥4,558¥4,558

¥(26)

¥(26)

Variable receipt andfixed interest payment

4,558

4,558

85

85

Buy

—

—

—

—

OTC

—

—

—

Buy

—

—

—

—

Sold

—

—

—

—

Buy

—

—

—

—

¥23,696¥23,696¥ (790)¥ (790)Sold

75,381—(4,108)(4,108)

Buy

460

—

14

14

Sold

—

—

—

—

Buy

—

—

—

—

Sold

—

—

—

—

Buy

—

—

—

—

¥—

¥—

¥ (4,885)¥ (4,885)

Currency options

Currency options

Other

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

(3)
—

—

—

—

—

—

Sold

—

—

—

—

Buy

—

—

—

—

¥—

¥—

¥59

¥59

Other

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

Share-related transactions
Not applicable

—

—

Total

—

Total

Interest rate options
Sold

Unrealized
Gain/Loss

Fair Value

Forward rate agreements

Sold

Variable receipt andvariable interest
payment

Over 1 Year

Sold

Currency swaps

Interest rate forward
contracts

OTC

Contract Amountor Notional
AmountCurrency futures

Interest rate futures
Financial
instruments
exchange(Millions of yen)

(4)

Liability-related transactions
Not applicable(5)

Commodity-related derivative instruments
Not applicable(6)

Credit derivative transactions
Not applicable

2 Derivative Instruments accounted for as hedges
With regard to derivative transactions to which hedge accounting is applied, the contract amount or notional principal
amount determined in the contract and fair value as of the consolidated balance sheet date for each type of transaction
and hedge accounting method are as follows. Furthermore, the contract amount itself does not indicate the market risk
associated with the derivative transaction.
(1)

Interest-rate related transaction
As of March 31, 2022
Not applicable(2)

Currency-related transactions
Not applicable(3)

Share-related transactions
Not applicable(4)

Liability-related transactions
Not applicable84

THE YAMANASHI CHUO BANK 2022

85

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

From April 1, 2021 to March 31, 2022

(Millions of yen)

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

¥1,035defined contribution pension plan.

Interest cost

116

The defined-benefit corporate pension plan (funded plan) pays a lump sum or a pension based on employee

Expected return on plan assets

compensation and length of service.

Actuarial gains and losses recorded in expenses

A retirement benefit trust has been established within the defined-benefit corporate pension plan.

Past service costs recorded in expenses

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

Other

has become a funded plan) pays a lump sum based on employee compensation and length of service.

Retirement benefit costs of defined benefit plan

2. Funded defined benefit pension plan
(1)

Retirement benefit obligations at beginning of year

(Millions of yen)
¥30,747

Service cost

1,035Interest cost

116

Actuarial gains and losses

643

Retirement benefits payment(1,483)

Past service cost

—

Other

—

Retirement benefits obligations at end of year
(2)

(5)

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

From April 1, 2021 to March 31, 2022

¥31,058(Millions of yen)

Pension assets at beginning of year

¥37,689

Expected return on plan assets

1,038

Actuarial gains and losses

28

Employer’s contribution

1,413

Retirement benefits payment

(749)

Other
Pension assets at end of year(3)—
¥39,420

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

As of March 31, 2022

(Millions of yen)

Retirement benefits obligations of funded plan

¥31,058

Pension assets(39,420)(8,361)Retirement benefits obligations of unfunded plans
Assets and liabilities recorded in consolidated balance sheets, net—¥(8,361)(Millions of yen)

Liability of retirement benefits—

Assets of retirement benefits¥(8,361)

Liabilities and assets recorded in the consolidated balance sheets, net¥(8,361)

THE YAMANASHI CHUO BANK 2022

(1,038)
518
(7)
—
¥625

Remeasurements of defined benefit plans

Breakdown of items (before tax-related effects) recorded in remeasurements of defined benefit plans are as follows:
From April 1, 2021 to March 31, 2022

(Millions of yen)

Past service costs¥7

Actuarial gains and losses

95

Other

—

Retirement benefit costs of defined benefit plan
(6)

¥102

Accumulated adjustment for retirement benefits

The breakdown of items (before the deduction of tax effects) recorded in accumulated adjustment for retirement benefits
is as follows:
As of March 31, 2022

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

From April 1, 2021 to March 31, 2022

86

Breakdown of retirement benefit costs(Millions of yen)

Unrecognized past service costs¥ (38)

Unrecognized actuarial gains and losses

2,314

Other

—

Retirement benefit costs of defined benefit plan(7)

¥2,276

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

As of March 31, 2022
Stocks

28%

Bonds

31

Life insurance general account

13

Other

28

Total

100%

Note:

Included in total pension assets is 11% (compared with 11% in the previous fiscal year) for retirement benefit trusts establishedin the corporate pension plan, and 28% (compared with 29% in the previous fiscal year) for retirement benefit trusts establishedin the lump-sum retirement plan.

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

87

(8)

Basis for calculating actuarial calculations

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

¥1

¥1

¥1

¥1

Average price per share upon exercise (Yen)

849

849

849

849

Fair value per share at the grant date (Yen)

2,025

2,115

2,050

1,061

Basis for calculating main actuarial calculations (weighted average)
From April 1, 2021 to March 31, 2022
Discount rate

0.3%

Long-term expected rate of return on plan assets

2.7

Rate of salary increase
Defined-benefit corporate pension plan

3.6

Lump-sum retirement plan

3.5%

3. Defined contribution funds

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

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

Description of restricted stock

The required contribution for the current consolidated fiscal year under the Bank’s defined-contribution pension plan is¥202 million compared with ¥199 million as of the end of the previous fiscal year.

(Stock Options and Other Related Information)
1. Accounting line item and the amount of stock options charged as expenses
From April 1, 2021 to March 31, 2022

(Millions of yen)

General and administrative expenses¥31

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

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

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

Grant dateAugust 7, 2020

Eligible service period

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

Transfer restriction period

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

Conditions for removal of transfer
restrictions

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

Fair value per share at the grant
date (yen)840

Description of stock options
Stock Options

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

No stock options were grantedin the fiscal year ended March
31, 2022.

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

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

(2)

Granted on August 7, 2020
Category and number of people
to whom restricted stockcompensation was granted

Granted on August 5, 2021

Changes in the size of stock options

The following describes changes in the size of stock options that existed during the fiscal year ended March 31, 2022.
The number of stock options is converted into the number of shares.
1) Number of stock options
2016 Stock
Options2017 Stock
Option2018 Stock
Option2019 Stock
OptionStock options which are not yet vested (shares):
As of March 31, 2020

—

—

—

—

Granted

—

—

—

—

Forfeited

—

—

—

—

Vested————Balance of stock options not vested

—

—

—

—

7,780

9,560

10,14026,600————Exercised

1,720

3,160

4,020

8,700

Forfeited

—

—

—

—

6,060

6,400

6,120

17,900Stock options which have already been vested (shares):
As of March 31, 2020
VestedBalance of stock options not exercised

99Category and number of people
to whom restricted stockcompensation was granted

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

Type and number of shares
grantedCommon stock: 51,500 shares

Grant dateAugust 5, 2021

Eligible service period

The period from the Bank’s 118th Annual General Meeting of Shareholders to its
119th Annual General Meeting of Shareholders, which is scheduled to be held in
June 2022 (for executive officers, the period from the date of appointment to thedate of retirement as determined by the board of directors).

Transfer restriction period

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

Conditions for removal of transfer
restrictions

During the period from the start of the transfer restriction period to the date on
which the first subsequent Annual General Meeting of Shareholders of the Bank isheld (for executive officers, the period from the date of appointment to the date ofretirement as determined by the board of directors), the eligible individuals shallcontinuously hold the position of the Bank’s director, executive officer or employee.

Fair value per share at the grant
date (yen)

821

6
12

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

88

THE YAMANASHI CHUO BANK 2022

89

(2)

Changes in the size of restricted stock
Granted on
August 7, 2020

(Relating to Revenue Recognition)

Granted on
August 5, 2021

(Millions of yen)

Prior to removal of transfer restrictions (shares)
End of previous consolidated fiscal year

53,300—Granted

—51,500Acquired without compensation——

Removal of transfer restrictions

20,600—

Balance with restrictions left in place

32,70051,500Classification
Fees and commissions

1. The tax effects of significant temporary differences and tax loss carry-forwards which resulted in deferred tax assets
and liabilities are as follows:(Millions of yen)

Deferred tax assets:
Net defined benefit liability¥3,473

Allowance for possible loan losses

2,769

Losses on investment securities

1,515

Depreciation

10,602

Deposits and loans business(Relating to Tax Effect Accounts)

As of March 31, 2022

Consolidated fiscal year
under review (From April 1,
2021 to March 31, 2022)

490

Other

2,444

Sub-total

10,692

Valuation allowance(4,617)

Total deferred tax assets

6,075

4,026

Foreign exchange business

1,714

Securities-related business

1,481

Agency business

1,531

Custody and safety deposit box business

241

Guarantee business

261

The above table also includes revenues based on ASBJ Statement No. 10, “Accounting Standard for Financial
Instruments.”(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]
From April 1, 2021 to March 31, 2022

1. Information for service segment

Deferred tax liabilities:
Unrealized gains on available-for-sale securities(7,640)Other(2,289)(Millions of yen)
Loans

Securities investment

Other

Total deferred tax liabilities(9,929)Ordinary income from
customers

Net deferred tax assets (figures in parentheses represent liabilities)¥(3,853)

Note: Instead of the net sales of a non-financial company, ordinary income in gross is indicated.

2. A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in theaccompanying consolidated statements of income is as follows:¥18,931¥12,939

Total¥14,439¥46,310

2. Information for geographic areas(1)

Ordinary income
Since the amount classified as ordinary income from external customers in Japan exceeds 90% of ordinary income

As of March 31, 2022

on the consolidated statement of income, it has been omitted here.

Normal effective statutory tax rate

30.4%

Valuation allowance(3.4)

Income not taxable for income tax purposes(1.5)

Expenses not deductible for income tax purposes

0.4

Other – net

1.1

3. Information about major customers

Actual effective tax rate

27.0%

Since no ordinary income from specific customers represents more than 10% of ordinary income on the consolidated(Relating to Asset Retirement Obligations)Not applicable(Relating to Investment and Rental Property)(2)

Tangible fixed assets
Since the amount of tangible fixed assets located in Japan exceeds 90% of the amount of tangible fixed assets on
the consolidated statement of income, it has been omitted here.

statement of income, it has been omitted here.
[Information about impairment loss of fixed assets in segment]
Since the Group has only a single reporting segment (Banking), disclosure of segments lacks importance and has thus
been omitted here.

Not applicable[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.

90

THE YAMANASHI CHUO BANK 2022

91

[Related-party transactions]

From April 1, 2021 to March 31, 2022

1. Related-party transactions(1)(Millions of yen)

Profit per share

Transactions with parties related to the company submitting consolidated financial statements

Profit attributable to shareholders of the parent

1) The parent company and major shareholders of the company submitting consolidated financial statements(limited to companies, etc.)
Not applicable

Amount not attributable to owners of common stock¥4,241—

Profit attributable to shareholders of the parent related to common stock

4,241

Average balance of common stock (Thousands of shares)

31,953

Diluted profit per share2) Non-consolidated subsidiaries and related companies, etc. of the company submitting consolidated financial
statements

Adjustment amount of profit attributable to shareholders of the parent
Increase in the number of common stock (Thousands of shares)
New share subscription rights (Thousands of shares)

Not applicable3) Companies, etc. with the same parent company as the company submitting consolidated financial statements,and subsidiaries, etc. of other related companies of the company submitting consolidated financial statements.

¥—
68
68

(Important Subsequent Events)(Repurchase of treasury stock)
At the board of directors’ meeting held on May 16, 2022, the Bank resolved to repurchase its treasury stock in

Not applicableaccordance with the provision of Article 156 of the Companies Act replacing Article 165, Paragraph 3 of the Companies
4) Related-party transactions involving directors, corporate auditors and major stockholders (individuals only) of theAct.
1. Type of shares to be acquired: Common stockBank.
From April 1, 2021 to March 31, 2022
Relationship

Name

Officer or his/her relatives

Eiichiro
Yamadera

Company, etc. controlled by
an officer or his/her relatives
through majority ownershipof voting rights

ITUTUYASHOUYU
CO., LTD.
(Note 2)

(Millions of yen)
Votingrights(%)

Details of
businessrelationshipPaid-in
capitalPosition——

Brother-in-lawof the Bank’s
Director

0.11

LendingNirasaki City,
Yamanashi
Prefecture

10

Manufacturing
and sale of soy
sauce and miso—

Lending

Address

Transactions

Transaction
amountAccounting
nameYear-endbalanceLending

¥—

Loans

¥161

Interest
income2——

Lending

—

Loans

10

Interest
income0——

2. Total number of shares to be acquired: 1,000,000 shares (maximum)
3. Aggregate price of shares to be acquired: 1,000,000,000 yen (maximum)
4. Acquisition period: From May 17, 2022 to March 24, 2023
5. Method of acquisition: Market purchase through a discretionary investment management scheme

Notes: 1. Transaction terms and policies for determining transaction terms
Transaction terms are determined in the same manner as with clients in general.
2. A relative of Masahiko Yamadera, a director of the Bank, owns a majority of voting rights.

(2)

Transactions with consolidated subsidiaries and related parties of the company submitting consolidated financial
statements
Not applicable

2. Notes regarding parent company or other important related companies
Not applicable(Relating to Business Combinations, etc.)
Not applicable(Per Share Information)
From April 1, 2021 to March 31, 2022
Net assets per share(Yen)¥6,515.85

Profit per share

132.73

Diluted net income per share

132.45

Note: The basis for calculating net income per share and diluted net income per share is presented as follows.

92

THE YAMANASHI CHUO BANK 202293

20-8, Marunouchi 1-chome, Kofu,
Yamanashi 400-8601, JapanPhone

055-233-2111

URL

https://www.yamanashibank.co.jp/