The Mid-Term Business Plan 2022
(Plan period: April 2022–March 2025)

The Gunma Bank, Ltd.

The Gunma Bank, Ltd.

Contents

We spin the threads of the future for local
communities with our strengths in “Connections”

I. Review of Previous Mid-Term Business Plan

III. Key Measures

 Main Results

P. 1

 Review of Key Figures of Previous Mid-Term Business Plan

P. 2

II. Overview of the Mid-Term Business Plan

 Sales Process Reforms with Emphasis on Progress andAutonomyP. 13

 Business Process Reforms that Contribute to Increasing
Productivity

P. 14

 Channel Reforms that Adapt to Changes in the Environment P. 15
and Customer Needs

 The Gunma Bank Group’s Purpose

P. 3

 Personnel Reforms for Exercising Creativity

 Concept of the Mid-Term Business Plan

P. 4

 Reforms in Collaboration with External Parties for Improving P. 17
Strengths

 Framework of the Mid-Term Business Plan

P. 5

 Positioning and Background of the Mid-Term Business Plan

P. 6

 Numerical Plan (Quantitative Target)/Risk-Taking Policy

P. 7

 Numerical Plan (KPIs in Connections)P. 8III. Key Measures Strategic Themes and Key Measures

P. 9

 Implementation of Digital Strategies as the Foundation for“Connections and Spinning the Threads”

P. 10

 Implementation of Digital Strategies– Advanced Data Utilization

P. 11

 Roadmap for Realizing Digital Strategies

P. 12

P. 16

 Involvement or the like in Regional Sustainability/Initiatives
for SDGs and ESGs (1)P. 18

 Involvement or the like in Regional Sustainability/Initiatives
for SDGs and ESGs (2)P. 19

 Coronavirus-ready Support for Finance, Core Business and P. 20
Succession of the Businesses Personalized Consulting Service for Each Individual
CustomerP. 21

 Exploring New Business Opportunities through the Group’sComprehensive Capabilities and Deepening Existing
Businesses

P. 22

 The Group’s Comprehensive Capabilities – Promotion of
Local Cashless Services

P. 23

 Reinforcement of Our Management Structure toConsistently Demonstrate our Strengths in “Connections”

P. 24

 Risk Management in the implementation of the Mid-term
Business Plan

P. 25

 Gunma Bank Group SDGs Declaration

P. 26

Ⅰ. Review of Previous Mid-TermBusiness Plan

The Oze National Park

Tomioka Silk Mill

Main Results

Transformation of our business platform through three reform initiatives
Process reforms
for work quality improvement○ Shifted to “District Governance Structure” and assignment of District Supervisors○ Eliminated wastefulness through business reform projects (1,041 cases made project)○ Progressed in workstyle reform through introduction of mobile PCs, Office 365, etc.

Channel reforms
for enhancing the customer interface○ Consolidated and closed 28 branches over three years, reviewed branch functions in Ota, Kiryu andTatebayashi areas○ Expanded Individual Consulting Plazas (three branches) and strengthened the promotion of housing loans
in the Gunma prefecture○ Digitalized contracting procedures (investment trusts, unsecured loans, insurance, loan contracts, etc.)

Personnel reforms
for exercising creativity○ Introduced one-on-one meetings and enhanced engagement surveys○ Implemented a talent management system○ Revised the personnel system for 56 years and older personnel and specialized personnel

Advanced value realization through business model evolution
Initiatives for fostering and vitalizing
regional industries and businesssuccession service○ Achieved KPIs (20 proposals for comprehensive partnerships, 2,000 recipients for business founding aid,
6,000 recipients for business succession support)
Strengthened initiatives for structured finance with covenants and M&A

Provision of appropriate consulting
service to assist customers’ growth○ Achieved KPI (1,500 issues resolved based on business feasibility tests)○ Started HR industry operations and introduced business matching systems

Stepping up the initiatives to steadily
grow customer assets○ Increased deposit financial assets and housing loans by reinforcing cooperation between banks andsecurities companies○ Strengthened wealth management functions (appoint advisors in each field)

Bolstering a business structurethat adapts to the changing
environment○ Established standard profit margin based on RORA
○ Concluded wide-area and regional alliances with regional banks

Catering for broad needs by
exercising the Group’s comprehensive
capabilities○ Strengthened equity business by establishing Gunma Regional Advanced Solution Partners○ Reinforced cooperation through secondment of staff from Gungin Leasing and Gungin System Service
1

Review of Key Figures of Previous Mid-Term Business Plan

■ Consolidated quantitative target
FY2019 results

FY2020 results

FY2021 projection

FY2021 target

Profitability index
Net income attributable to owners of the parent

22.2 billion yen

13.5 billion yen

26.0 billion yen

24.0 billion yen

Non-interest business income

17.1 billion yen

19.1 billion yen

20.4 billion yen

20.0 billion yen

RORA (consolidated net income divided by risk assets)

0.5%

0.3%

0.6%

0.5% or higher

ROE (long-term target)

4.4%

2.6%

4.8%

5% or higher

66.3%

64.1%

59.8%

65% or so

11.95%

12.74%

12.05%

12% level

Efficiency index
OHR
Soundness index
Consolidated total capital ratio■ Key figures for achieving the plan’s targets
Contents

FY2019 results

FY2020 results

FY2021 projection

FY2021 target

4,550.5 billion yen

4,657.3 billion yen

4,647.0 billion yen

4,780.0 billion yen

54.6 billion yen

54.7 billion yen

57.4 billion yen

60.0 billion yen

2.9 billion yen

3.0 billion yen

4.2 billion yen

4.2 billion yen

850.8 billion yen

935.8 billion yen

1,000.0 billion yen

1,000.0 billion yen

739 cases

1,312 cases

1,811 cases

1,500 cases

Number of business succession aid recipients

3,083 recipients

5,069 recipients

7,200 recipients

6,000 recipients

Number of business founding aid recipients

565 recipients

1,489 recipients

2,550 recipients

2,000 recipients

Number of female managerial employees (compared to

Increase of 9%

Increase of 22%

Increase of 39%

Increase of 20%

Net interest income
Ending balance of retail loans
Ending balance of unsecured consumer loans
Non-interest business profit
Corporate service revenue (consolidated)
Balance of deposit financial assets (consolidated)
Regional revitalization/SDGs
Number of issues resolved according to businessassessment

end of March 2019)2

Ⅱ. Overview of the Mid-Term Business
Plan

Kusatsu Onsen

Ikaho Onsen

The Gunma Bank Group’s Purpose

We use our strengths in connections to spin the threads ofthe future for local communities
Using our strengths in connections
Ever since our establishment as the Gunma Daido Bank in 1932, our roots have always been in connecting lenders and borrowers
together. We receive deposits and offer loans to people in order to keep the economy running, and this has been and will continue tobe a key role for us.
Apart from our work in finance, we connect local communities, companies and people together, and we also connect them with ourservices, information, and other resources. Through these efforts, we connect many kinds of value together, and create new value. We
believe that this is what society expects from us.
To meet these expectations from society, we will harness our unique strengths that we have nurtured over the years to engage ininitiatives for each and every one of us to connect.
For example, we can utilize our networks and information capabilities to connect our customers with our resources and solve
management issues. We can also connect customers who have no successor with someone who can lead such customers’ businesses or
the like to the next generation, thereby enabling a sustainable future for our customers and the local community. By connecting
customers with global investment opportunities, we can also bring them a fulfilling and secure future. Each of these connections may
be small by itself, but many of them together can produce a surging momentum like Japan’s mighty Tone River to bring an enriching
future to local communities.

Spinning the threads of the future for local communities
By “local communities,” we do not refer only to Gunma Prefecture where our headquarters is located,but also all the regions, companies, people, and other stakeholders within our network.
We aim to utilize our strengths in connections to create a future that is not only economicallyenriching, but that also brings about a sustainable society through the preservation of the global
environment and efforts to tackle social issues including an aging and shrinking population.
Threads are spun using fibers from silkworm cocoons, and the home of our headquarters inGunma Prefecture is a central location within the development of the fiber industry, including
the Tomioka Silk Mill, a World Heritage Site. We use the phrase “spinning threads” in our Purpose
to signify our desire to create an enriching future for the local community while cherishing and respecting
its history.
The Gunma Bank Group will use its strengths in connections to spin the threads of an enriching future while working witheveryone in the local community.
(Established on November 20, 2021)
The Gunma Bank Group’s Purpose was decided through multiple discussions based on 755 comments from executives and employees, which took approximately six months.

3Concept of the Mid-Term Business Plan The Mid-Term Business Plan 2022 “Innovation for ‘Purpose’” was defined from the following perspectives

The Mid-Term Business Plan based on “Purpose”✔ In order to realize our “Purpose,” evolve “Innovation,” which we have been working
on since the previous Medium-Term Business Plan
→ Innovation for “Purpose”✔ Set the framework and basic policy from the viewpoint of what to do to strengthen
and demonstrate “Connections” and “Spinning the Threads” as the conceptof Purpose.

Balance between ‘social value’ and ‘economic value’

Collective
strengths of
the Group

Expectations
from society

PurposeWe use our strengths in “Connections” tospin the threadsof the future for local communities

Mid-Term Business Plan
Innovation for “Purpose”

Solving social issues and sustainable growthof local communities

Social value✔ Try to balance between social and economic value by Purpose-based problem-solving for
local communities and customers (social value) and thereby generating consistentprofits (economic value)✔ Set KPIs in Connections as quantitative targets measuring both social value andeconomic value

Balance
Economic value
Consistent profits of the Group

Initiatives for forecasting and backcasting✔ Decide both what to deepen for realizing Purpose in the next three years from now(forecasting) and what to do looking backward from the to-be future state based on
Purpose (backcasting)✔ Focus on exploring new business areas and goal-based sales activities backcast fromthe customer’s future

4

Discontinuous

Exploring new
business areas

Initiatives on both sides(Innovation)

Deepening
existing businessareas
Continuous

Framework of the Mid-Term Business Plan

The Mid-Term Business Plan 2022: Innovation for “Purpose”(Plan period: April 2022–March 2025)
Basic
policyBasic
policyStrategic
themes1

Implementation of digital strategies as the foundation for“Connections and Spinning the Threads”

Reinforce strengths in “Connections”
with five reform initiatives

2

3

exercising our strengths in “Connections”■ Involvements or the like in regional sustainability/Initiatives for SDGs and ESGs
■ Coronavirus-ready support for finance, core business and succession of thebusinesses■ Personalized consulting service for each individual customer■ Exploring new business opportunities through the Group’s comprehensive
capabilities and deepening existing businesses■ Reinforcement of our management structure to consistently demonstrate ourstrengths in “Connections”■ Sales process reforms with emphasis on progress and autonomy■ Business process reforms that contribute to increasing productivity■ Channel reforms that adapt to changes in the environment and customer
needs■ Personnel reforms for exercising creativity■ Reforms in collaboration with external parties for improving strengths

Reinforce strengths in “Connections”
by five reform initiatives in order to“deepen” and“extend (new strengths)”“Spinning the Threads” of the future by

Spinning the threads of the future by
exercising our strengths in “Connections”
in order to meet expectations from society
and customers, and both apparent andinapparent needs

Strive to realize Purpose
through committing
to the Mid-Term Business Plan

PurposeExtend our strengths(acquire new strengths)

Our
Strengths(to deepen)

Information, trust, humanresources,
network, etc.

Reinforce strengths
in “Connections”

Exercise strengths
in “Connections”

We use our strengths
in “Connections” to spin
the threads of the future for local communities

Inapparent needs

Expectations fromsociety and customers
Financial intermediation,
consulting, vitalizing regional
industries, business matching, etc.
Unnoticed values5Positioning and Background of the Mid-Term Business Plan

FY2019 –FY2025 – for the future

FY2022 –In the Mid-Term Business Plan 2022, we defined a three-year plan using
both approaches: deepening actual areas (forecasting) and thinking
backward from the to-be future state (backcasting)PurposeWe use our strengths in “Connections”
to spin the threadsof the future for local communities

The Mid-Term Business Plan 2019
“Innovation New Dimension”—for realizing value

Basic Policy(1) Transformation of our business platform through threereform initiatives(2) Advanced value realization through business model
evolution

Results(1) Significant progress in efficiency through business reformprojects indicated in the “three reform initiatives” andreorganization of branches underway (OHR to be greatly
improved by approx. 60％ (forecast)).
(2) Facing prolonged low interest rates, in order to pursue adrastic transformation in its profit structure, improve
non-interest business income. As a result, non-interest
business income increases from 16.7 billion yen in
FY2018 and it is expected to achieve its target of 20.0
billion yen for FY2021.

Issues(1) Inadequate progress in measures related to digitalization
among “three reform initiatives.” More to be done in thenext three years.
(2) Transformation in its profit structure under way. With
prolonged coronavirus pandemic and decarbonization,
we have to strengthen financial support and look in
depth at consulting services so as to improve noninterest business income.

What to be done in three years■ Promote decarbonization of the Bank and the
local communities■ Sustainable industrial growth and creation of
new industries■ Explore new businesses (planting seeds)■ Promote cashless payments in the region■ Strengthen business succession andinheritance services■ Improve human resource capabilities in light ofthe changing environment■ Corona support (financial and core businesssupport)■ Consulting services in depth■ Promote digitalization of the Group and theregionThree-year
results will lead torealization of the
Purpose6

The “to-be future”
based on the Purpose■ The “to-be future” of the Group
Sustainable development of local communities andthe Group■ Toward the future we aim for, we regard FY2030 as anintermediate point and will focus on the followings.

■ Materiality･Sustainable development of local economy･Preservation and creation of the global environment･Promote diverse human resources ･Promote partnerships■ Key initiatives and goals

・Comprehensive regional group contributing to solving regional
issues→ Explore, commercialize, and grow non-financial business areas→ Create a regional ecosystem (combined financial and nonfinancial platform)
・Decarbonize the Bank (net zero) and the region
・Sustainable growth of local industries
・Stable asset formation for individuals
・Local sustainability through solutions for “connecting to the next
generation”
・Digital channels for all financial transactions
・Realization of women empowerment and wellbeing of employees

Numerical Plan (Quantitative Target)/Risk-Taking PolicyRisk-Taking Policy○ Invest management resources to solve issues to revitalize the local economy and achieve sustainable growth/actively engage in risk-taking○ Aim to expand earnings by taking on risks in growth areas such as decarbonization, while securing equity capital to supply funds to the region○ In securities management, build a long-term stable portfolio by diversifying assets under management with a focus on diversification and securing liquidity

Consolidated quantitative target for the final year of the plan (FY2024)
Previous Mid-Term Business Plan

Mid-Term Business Plan

(FY2021)(FY2024)

TargetItem (consolidated basis)

Projection

Change fromFY2021

TargetSupplementary explanations-

36.5 billion yen

45.0 billion yen+8.5 billion yen

Non-interest business income

20.0 billion yen

20.4 billion yen

25.0 billion yen+4.6 billion yen

Net interest income + Non-interest business income − Expenses*Gain(loss)on cancellation of investment trusts
Net fees and commissions + Net other business income (Gain(loss) on bonds excluded)

Net income attributable to ownersof the parent

24.0 billion yen

26.0 billion yen

30.0 billion yen＋4.0 billion yen

Net income attributable to owners of the parent in net income inconsolidated statements of income

Consolidated final profit

2.6 billion yen

2.9 billion yen

4.0 billion yen+1.1 billion yen

0.5％ or higher

0.6％

0.7％ or higher

+0.1％

OHR

65％ or so

59.8％

55％ or so-4.8％

Expenses / (Gross business profit − Gain(loss) on bonds)

ROE(Long term) 5％ or higher

4.8％

5％ or higher+0.2％

Net income attributable to owners of the parent / Average own
capital at beginning and end of period

12％ level

12.1％

13.5％ or higher+1.4％

Total equity / Risk-weighted asset

Core business profit

RORA

Consolidated total capital ratio

Net income attributable to owners of the parent − Net income (nonconsolidated)
Net income attributable to owners of the parent / Risk-weighted
asset

Breakdown of changes in consolidated core business profit
Corporate service
revenue
Profit on loans

1.8

36.5

Profit on securities

2.5

0.5
Financial support
Core business support
Business succession
support

1.1
0.8
0.6

Deposit financial asset
revenue

1.4

Investment trusts &insurance
Securities
Inheritance

FY2021
Forecast-3.1
Expense

0.6
0.6
0.2

-0.8
Others(Minus factor)

45.0(Plus factor)+8.5
FY2024
Target7billion yen

Numerical Plan (KPIs in Connections)Set following “KPIs in Connections” as key figures for the three years leading to the realization
PurposeConcept“Spinning the Threads” of the future for
local communities

Image of “Connections”
Human
resources

Goods
Service

Money
Lender (deposit)

Borrower (lending)

Region, business, individual

Region, business, individual

Resources of the GroupRegion, business, individualSocial value
Solving social issues andsustainable growth of local
communities

Information
Know-how

Economic value

Time (future)

KPIs in Connections“Connect” lender and borrower“Connect” customers“Connect” businesses and individuals“Connect” customers’ asset with their
futureSustainable growth of the Group

Item

TargetSupplementary explanations

Amount of sustainable finance executed (three-year cumulative total)

500 billion yen

Amount of investments and loans for the purpose of solving
environmental and social issues

Amount of housing loan executed (three-year cumulative total)

400 billion yen

Execution amount of housing loan

Balance of unsecured consumer loan (as of March 31, 2025)

75 billion yen

Balance of Unsecured consumer loan , including car loans

Number of business matching cases (cumulative for three years)
Number of staffing cases closed (cumulative for three years)

3,000 cases
200 cases

Balance of deposit financial assets (consolidated, as of March 31, 2025)
Of which, investment trusts (consolidated, as of March 31, 2025)
Number of business succession issues resolved (cumulative for three years)
Inheritance-related business contracts (cumulative for three years)

Excluding matches between companies of the Group
Number of “one-handed” or “two-handed” agreements concluded

1,250 billion yen

Including those of Gungin Securities

400 billion yen

Including those of Gungin Securities

600 cases

Number of deals of resolving issues that generated revenue bycontributing to business succession

1,000 cases

Number of testamentary trusts or estate liquidation contracts
signed“Connect” for the next generation

Key figures for Purpose-based sales
operation

Set key figures
for both values(KPIs inConnections)

Profit on loans (FY2024)

54.5 billion yen

Interest on loans − Funding costs

Corporate service revenue (FY2024, consolidated)

6.5 billion yen

Sum of revenues from corporate services

Deposit financial asset revenue (FY2024, consolidated)

9.0 billion yen

Deposit financial asset revenue (including Gungin securities) +inheritance-related revenue

8Ⅲ. Key Measures

Mt.Haruna

Mt.Akagi

Mt.MyogiStrategic Themes and Key Measures
Basic policy 1

Basic policy 2

Implementation of digital strategies as the foundation for “Connections and Spinning the Threads”
Basic policy 3

Reinforce strengths in “Connections” by five reform initiatives

Sales process reforms with emphasis on progress and autonomy“Spinning the Threads” of the future by exercising our strengths in“Connections”

Involvement or the like in regional sustainability/Initiatives for SDGs and
ESGs○ Clarification of regional strategies through “District Governance Structure” and autonomous sales branch
operations○ Strengthen problem-solving capabilities through effective division of functions between branches andheadquarters○ Establish a new sales style based on the New Normal○ Improve CS by strengthening medium- and long-term relationships with customers on a goal basis○ Proactive response to regional issues through industry-government-academia collaboration, etc.
○ Foster local industry and aid business founding for sustainable development of the local economy○ Strengthen initiatives for sustainable finance○ Expansion of products, services, and consulting to promote SDG initiatives○ Efforts toward carbon neutrality and TCFD complianceBusiness process reforms that contribute to increasing productivity

Coronavirus-ready support for finance, core business andsuccession of the businesses○ Efficient branch operations through administrative reforms○ Review of existing operations centered on the advancement of business reform projects○ Initiatives to optimize system costs○ Enhance information and data utilization○ Appropriate financial support in line with the customer’s situation○ Strengthen support for core business based on customers’ apparent and inapparent needs○ Solution proposals with business succession support as a starting point○ Strengthen initiatives in structured finance○ Expand support for overseas expansion, overseas transactions, and foreign exchangetransactions

Channel reforms that adapt to changes in the environment and customer
needs

Personalized consulting service for each individual customer○ Enhance marketing to individuals○ Expand wealth management functions and services for seniors○ Enhance support in the area of asset formation○ Respond to diverse investment needs by strengthening cooperation between banks and securities companies○ Strengthen lending to individuals○ Enhance “DigiCal” strategy by strengthening channel collaboration○ Expand digital channels such as personalized apps
○ Improve customer experience through face-to-face channels, including expansion of specialized consultation
centers○ Optimize branch network and functions based on regional characteristics○ Improve financial services through renewal of API infrastructure

Personnel reforms for exercising creativity

Exploring new business opportunities through the Group’s
comprehensive capabilities and deepening existing businesses○ Transition to a future-oriented personnel system that emphasizes job performance○ Strengthen comprehensive human resource capabilities that contribute to social and customer needs○ Develop specialized human resources in light of the changing environment○ Maximize performance by strengthening talent management○ Enhance the organization by realizing the wellbeing of each executive and employee○ Business development in the areas of human resources, regional trading companies, and ICT/DX○ Explore new business areas in finance○ Explore non-financial business areas that contribute to solving regional issues○ Promote cashless services to build regional ecosystems○ Maximize consolidated earnings by leveraging the Group’s comprehensive strengths

Reforms in collaboration with external parties for improving strengths

Reinforcement of our management structure to consistently demonstrate
our strengths in “Connections”○ Collaboration with other banks to create profit-earning opportunities and improve productivity○ Regional collaboration to strengthen response to regional issues○ Cross-industry collaboration to gain new strengths and complement weaknesses○ Improve profitability by upgrading market management systems○ Efforts toward integrated management and operation of earnings, risk, and capital○ Enhance corporate governance and implementation of a balanced capital policy○ Enhance compliance and prevention systems against money laundering, etc.
○ Sustainable development of financial infrastructure in consideration of changes in the environment9

Basic policy 1

Implementation of Digital Strategies as the Foundation for “Connections and Spinning the Threads”
for “Purpose”

Promote digitalization as a base for each strategic theme in order to reinforce strengths in “Connections” and spin the threads ofthe future

Concept of digital strategy
1

Through “enhancement of information and data utilization” and reform of organizations,pursue digitalization in the following three areas:

Digitalization of the community・Support for local digitalization, including SMEs, etc.
・Build a digital ecosystem in the region (cashless, data
distribution, etc.)

2

Digitalization of customer
contact points

・New customer experience using digital technology
・Complete all transactions digitally
・Provide financial services that are integrated into daily
life

Digitalization of internalbank operations

3・Visualize various information and data to reflect them inmanagement and staff decisions and actions
・Go paperless, automate routines

Promoting digitalization is essential to effectively advance all strategic themes

Sales process reform

Communication through digital tools

Sustainability in theregionCompetency analysis of sales activities

Business process reform

Channel reform

Personnel reform

Financial, core business,and succession support tocompanies

Data-driven decision making
Promotion of paperless and seal-less operations
Digital channel expansion (e.g., apps)
Strengthen channel collaboration through datautilization

Consulting for individuals

Digitalization support for local SMEs

One-to-one marketing* practices
Optimal face-to-face proposals based on data

The Group’s
comprehensive
strengths

Digital human resource development
Data-driven talent management

Externalcollaboration reform

Digitalization of the region in collaboration withindustry, government and academia

Strengthen digital capabilities through alliances

Strengthen ourmanagement structure

External collaboration using API infrastructure

10

Explore new business in the digital field
Efforts to build regional ecosystems

System optimization
Strengthen cybersecurity*Propose and provide optimal value to each and every customer through the development of a data infrastructure

Basic policy 1

Implementation of Digital Strategies – Advanced Data Utilization

for “Purpose”
1

Transform data into valuable information and connect information with customers,
communities, and the Bank in the most appropriate timing and manner

Customer

Establishment of a new data storage andcollection infrastructure(Data Lake)〜Realize One-to-One Marketing〜
Optimal approach for each customer(1st half of FY2022 – 2nd half of FY2023)

Build a digital marketing infrastructure(1st half of FY2022 – 2nd half of FY2023)

As-Is

To-Be

Customer data is distributed
across systems

Collection

Connect
customers
and the bank

Consolidation and centralized
management of customer data

Data utilization〜Appropriate data cycle circulation〜

Problem solving
Value creation

Realize One-to-One marketing by
the most appropriate means andtiming for each customer

Build a data analysis infrastructure1
Data
accumulationcollection
infrastructure

3(2nd half of FY2022 – 2nd half of FY2023)■Create an environment that enables the extraction
and visualization of necessary information at any
time, depending on the situation■Fact-based management decisions and reduction ofvarious reporting tasks■Visualize staff work status and other information tobuild a business problem-solving cycle

The Bank

Connect thecommunityandcustomers

2
Digitalmarketinginfrastructure(Data Lake)3

Branches
Headquarters

DigitalChannelin the cloud2

Face to face

Build an infrastructure that can collectand store customer data, external data,and internal bank data together

AccumulationData
analysis
infrastructure

RegionAnalysis〜Building of data-driven management system〜〜Contribution to revitalization through datautilization〜

Utilize visualized data for judgment and decision making
Shortened lead time to management
decision-making by building an environment
for data visualization. Reduce reporting work
as well.
Establish optimal business process flow byanalyzing various business data

11

Create a virtuous circle in the local economy through the useof payment data, etc. (regional ecosystem)

Promote cashless services in theregionConnect
thecommunity
and the Bank

Prospects for use in advertising,matching, local points, etc.



Basic policy 1

Roadmap for Realizing Digital Strategies
Initiatives so far
Digitalization of the community[Improvement of infrastructure, increase in users, improvementof human resources]

 Nov. 2021: Establishment of a “direct channel for
support of digitalization” to support customers

 Digitalization support for local SMEs (communication
tools, groupware, attendance, payroll, etc.)

 Apr. 2021: Promote internet banking forbusinesses

 Promote local cashless society Apr. 2022 Gunma Bank application renewal
Complete online from application to contract

 Oct. 2021: Digitalize finance contract
May 2017: Investment trusts, Nov. 2018: Unsecured loans,
May 2021: Deposit receipts, Jul. 2021: Insurance contract

Digitalization of internal bank operations
 Oct. 2018: RPA introduction
 Jan. 2021: Started rolling out mobile PCs toall branches

・Flag-bearer for local digitalization
・Creation of a regional digital ecosystem(“Connect” local businesses and people through cashless,information, non-financial services, etc.)
Become a local platformer with a fusion of the financial& non-financial, the real & digital

Digitalization of customer contact points
 Aug. 2020: Cloud factoring

Long-term direction

The Mid-Term Business Plan 2022

 2nd half of FY2022: Renewal of theBank’s website
 FY2023: Introduce corporation portal[Digital channel]
Functions tobe added
continuously・Complete all financial transactions digitally
・Embedded Finance: Financial services that are integrated
into daily life
・Non-financial services

 FY2023: Digitalize housing procedures
 Establish a comprehensive scheme for nonface-to-face various procedures

 From FY2022: Workstyle transformation
using “Office 365” (evolution ofinternal and external
communication, simplificationof reporting, etc.)[Branches]・Digitalization of OTC operations into a consulting service

・Workstyle that is not restricted by time or location
・Go completely paperless・Fully automated routine and simple tasks
・Eliminate clerical work at sales branches(self-service, centralized)

 FY2023: Introduce in-store tablets Aug. 2021: “Teams” rollout to all branches Further promotion of paperless operations

Advanced data utilization, human/organizational transformation, etc.
 May 2019: Specialized human resource
development system
 May 2020: Financial recommendation
system released Apr. 2021: Satellite office “Ota Lab”

Foundation ofdigitalization of thethree areas Apr. 2022: TSUBASA FinTech common infrastructure
to be released
 FY2023: Build a data utilization infrastructure FY2023: Implement One-to-One marketing Developing digital human resources(raising the level of organizational capacity) System consolidation, shift investment tostrategic systems
12[Advanced data utilization]

・Optimal timing for both face-to-face and non-face-to-face
information delivery (personalization)
・Visualization and centralization of various informationand data
・Data-driven decision making, easy use of data by anyone[Transformation of people and organization,
development of system infrastructure]・Develop human resources to take charge of digitalization
・Agile organization (small start, do it first) (Try it, don’t be afraidof failure)・Utilization of cloud computing, including for accounting
systems

Basic policy 2-1

Sales Process Reforms with Emphasis on Progress and Autonomy
for “Purpose”

Enhance our strengths to “connect” with customers by building an effective sales force

Establish “District Governance
Structure”

BeforeA certain level of authority transferred to districts (autonomous operation from the bottom-up approach, andvalue sustainable activities from the customer’s perspective)

After

Director/
Headquarters

Director/Headquarters

Directives and goal setting(Top-down)

Transfer of authority to districts(Regional strategic planning, goal setting,process evaluation)

Managerial
branchChange ofstructure(Jun. 2021)*Limited and vague role andauthority of the “managerial branch”
that unites the districts

District
supervisor

Autonomous district
management

Set regional
strategies

Share local issues*Clarify the role and authority of the district and assign district
supervisors

Demonstrate comprehensive
capabilities

Branchsales person

Demonstrateexpertise

Headquarters
sales person• Sales activities based on regional
strategies• Sales branches’ goals and evaluation
criteria (process) for each district

Corporate consulting and
Wealth management, etc.

Respond to customers’ increasingly diversified, specialized,
and long-term needs by strengthening cooperation
between branches (comprehensive capabilities) andheadquarters (expertise)

800

Increase in experts

53•

Realized byeach district,led by its
district
supervisor

Support for industries associated with EVs
Support for hot spring resorts associated withcoronavirus
Sustainability in areas with declining
populations

86
Apr. 2019(Last Mid-Term)

Consult & propose Application procedure Contract Follow-up

Example for loan tobusinesses

Interviews through visits and in-branch visits

746

701

Apr. 2016(Time before last MidTerm)

e.g.

•
•

Set KPIs byeach district

Respond to the needs of more customers through effective sales activities

Personnel reallocation due tobranch consolidation, etc.

HQ

Priority of
initiatives

Establish a new sales style based on the New Normal

Changes in the numberof sales person

Branches

Progress
step bystep

How to demonstrate our ability to “connect”

District
supervisor

Effective division of functions between branches
and headquarters
Strengthen
cooperation

Realization of
Purpose■ Sustainable development of the community andcustomers■ Sustainable profitability of the bank (each district)

Online meeting & email(“Teams”/”Webex”)

121

E-contract

Corporation portal

Apr. 2022(This Mid-Term)

(Chat

13

Application procedures)

Onlinemeeting

Aim for 100% e-contract forloan (by the end of March
2025)

Completed

To becompleted

Basic policy 2-2

Business Process Reforms that Contribute to Increasing Productivity
for “Purpose”

Invest management resources for our strengths to “connect” by streamlining process
Administrative reforms centered on in-branch tablets (to be introduced in 2023/connected to the corebanking system via API)

Branch administrativereforms

Simplify administrative flow

Paperless

Reduce back-office work

Customers
Seal-lessDeepen centralization at HQ*Picture shown is an image.

Operationless

In-branchtablets

・Reduce branch processing time・Reduce labor for inputting and fillingout forms
・Shift in use of branch space from thatfor paperwork to that which connects
value

By the end of 2027

50% reduction in UBT
terminals

・Phased introduction of account creation, various notifications, etc.
・Provide comfortable operability and linkage with digital channels

Business reform project
Previous Mid-Term Business Plan
904 cases realized
670,000 hours of work
saved per year

1,041 cases adopted
6,069 comments submitted by
employees

・Collect opinions from all employees(elimination of waste)
・Business reforms by cross-divisional working
group

Optimize systems

New Mid-Term Business Plan

Accounting system

94% of employees
wish to continue×

For renewal in 2029,
expect to streamline business with a view tocloud computing

Two themes examined
in depth

・Reduce workload
・Streamline branch floor space
・Curb branch office system costs*Renewal planned for 2028

Classify into priority areas and nondifferentiation areas to create a morebalanced approach

Actual system cost

40% reduction(cumulative over next 10 years)

Informational system
Maximize data utilization formarketing and business management(1) Zero reporting work
*Utilize data infrastructure that is being developed

Sub system(2) Eliminate operational waste bycollecting opinions from employees

Consolidation and elimination of non-focus
areas

14

Allocate to growth areas such as
strengthening points of contact withcustomers through applications, corporate
portals, etc., and information utilizationand suchBasic policy 2-3

Channel Reforms that Adapt to Changes in the Environment and Customer Needsfor “Purpose”

Enhance our strengths to “connect” by reconstructing the existing branch network and expanding consultation centers and digitalchannels

Branch strategy

Continue restructuring of branch network in light of changing environment→ Increase investment in consultation centers and digital channels
Number ofreal branches

Contacttransition

IB,
etc.
ATM
Visit

Apps

80%
increase

IB,
etc.

ATM

ATM

Visit

Visit

Evolution of DigiCal
strategyATM

Number of
branchesconsolidated
or eliminated28

Expansion↔ Functionally(all transactions)specialized* Currently flagship/satellite structure
in place at in Ota, Kiryu and Tatebayashi areas→ target areas to be expanded

Standalone
branchCapture the vitality of a growing
market with a focus on financial
intermediation

Currently 3 branches + about 3 branches planned

Loan stations (open on holidays)

Mar. 2019

Mar. 2022

Mar. 2025(Time before
last Mid-Term)(Last Mid-Term)(This Mid-Term)*Excluding loan stations and online branches

Consultation
specialized center

12 branches in Tokyo and 3 prefectures(to strengthen the in-prefecture operations)

Provide a unique customer experience by effectively mixing digital and face-to-face (physical) sales
Daily

Personal apps

Internet banking

TSUBASA Alliance

400

Projected users(in thousands)

Apps

300

DigitalDatalinkage

DirectCenterCore store

Satellite branch

Individual Consulting Plaza (open on holidays)
10–15

9

Corporate portal

Real

Withinthe pref.

Out ofthe pref.

developed with the participating banks

Branches& Sub-branches

Flagship branch

116
Branches& Sub-branches

5-yearprojection

Past 10-year
transition

139

145

IB,
etc.

10%
decrease40%
decrease

Consolidation& Functional
specialization

150

WebsiteMar. 2023

Mar. 2025

Mar. 2027(Renewal in the 2nd half of FY2022)

E-contract
Individual Consulting
Plazas & Loan stations

Consultation & contracts

Corporate portal

Loan completed on
the website
Web interview(consultation)(to be released in 2023)

15

1st phase(Apr. 2022)
Banking services○ Balance and statement
inquiries○ Transfers○ Fixed term deposit
transactions○ Card loan transactions○ Notification distribution(Distribution of information
on products, etc.)

2nd & 3rd phases+(From Dec. 2022)
Non-financial services○ Receipt of notices, tax
and other public funds○ Mutual funds○ Household management○ One-to-One Information○ Non-financial services– Regional collaboration

From 2023 (tentative at this time)○ Web-based acceptance of various procedures that are currently
conducted in writing○ Centralization of non-personal services, chat function○ Online lending and loan proposals, etc.



Basic policy 2-4

Personnel Reforms for Exercising Creativity
Enhance our strengths to “connect” by refining human resources

for “Purpose”

Transition to a future-oriented personnel system thatemphasizes job performance

Set up a Personal Purpose

Issues of the current system

To-be new system

Strong seniority

Future-oriented system

System that is difficult to understandSimple and fair system

Passive career development

Changes planned for
FY2024

Respect for the willof the individual

Hard to reflect the degree ofdifficulty of the job

Treatment based on the degree ofdifficulty of the job

Respond to changes in the environment

Flexible response to environmental
changesEnhance the organization by realizing the wellbeing of each
executive and employee

Strengthen comprehensive human resource capabilities
and specialized human resources
Raise the level of digital
capabilities

Percentage of paid leave taken

Digital professional
human resources

・Training based on the specialized
human resources development plan
・Mid-career recruitment

National qualifications

Raise the level

Based on the Bank Group’s Purpose, from April 2022, each executive
and employee will establish a “Personal Purpose.”
Based on the Personal Purpose and the already introduced“Declaration of Career Challenge,” the Company will foster a
corporate culture that encourages employees to take on new challenges
in their jobs autonomously.

IT Passport
1,000 employees

・Various training programs
・Self-development
support, etc.

(three-year target)

Percentage of female managers

FY2020(Actual)Feb. 2022(Currently)

End of Mar. 2025

(Target of the Mid-Term)

61.3%

70% or higher

14.5%

18% or higher

FY2024(Target of the Mid-Term)

Childcare leaveacquisition
rate

100％
ongoing

External
evaluation(Acquired)Develop and acquire
specialized human resources
Securities & market
management
Risk
International
operations
management

DigitalData

Use of development plans and talent management

Local problem solving

Credit assessment &turnaround

Consulting

Wealth management

Promotion of healthmanagement

16

Promotion of
women’s activities

Enhancement ofchildcare support

Basic policy 2-5

Reforms in Collaboration with External Parties for Improving Strengths

Enhance our strengths to “connect” by leverage outside resources

for “Purpose”
Wide-area
cooperation“Collaboration with regional financial institutions” and“Collaboration with regional industry, government,
academia, and financial institutions”

Regional
cooperation

Wide-area collaboration with regionalbanks nationwide✔ Wide-area collaboration among 10 top regionalbanks✔ Objective: develop consistently the region, enhancefinancial system, strengthen the top line and reduce
costs, etc.

Major
initiatives

Upcoming initiatives
6.0 billion
yen

Revenueeffects(cumulative)

5-yearcumulative
4.5 billion total

1.2 billion yen
yenMar. 2022

Mar. 2025

Mar. 2026○ TSUBASA FinTech common platform(from Apr. 2022)○ Introduce apps developed with participating banks(from Apr. 2022)○ Co-financing, mutual customer referrals→ Cumulative amount executed: approx. 15.5 billion
yen (as of Dec. 31, 2021)○ TSUBASA Alliance✔ Money laundering-related operations (AML Center)✔ Cooperation measures in DX and SDGs areas✔ Consider joint subsystems, etc.

Major themes
for the future

・ “Financial product recommendation system” using AI→ Achieved results in mutual fund proposals
・AI-based “digital document search system”
・Introduce “e-contract service” for loans, etc.
・Introduce “Cloud Factoring” by OLTA
・Data utilization
・Digital marketing
・Digital service development✔ 12.3 million bank accounts✔ Borrowers: about 0.9 million

The volume of datafrom participatingbanks is a majoradvantage

・Cooperation for tourism and product promotion and regional
revitalization
・Business succession, M&A and business matching・Mutual utilization of know-how, branches, etc. of both banks, etc.

Focusing on the Ryomo District, where our sales areas overlap,
revitalize local industries and improve customer service

Objective

・Collaboration to revitalize key industries in the region

Major ・Syndicate loan and sustainable finance partnerships
initiatives

・Collaboration in the areas of business succession, M&A, etc.

Comprehensive collaborative
agreement for community
revitalization
Industry-academia
collaborationagreements

Wide-area collaboration of 8 regional banks
for the purpose of financial digitalization

Major initiatives
Implementation
results

Contribute to the local community by taking advantage ofthe geographical characteristics of neighboring areas andsustainable enhancement of corporate value of both banks

Objective○ Gunma Prefecture and 9 cities and 3 towns/villages

in the Gunma Prefecture✔ Revitalization of local industry✔ Next generation industry development, etc.
○ Gunma University, Maebashi Institute of Technology, etc.
✔ Matching with business partners, etc.

Cooperation with financial
institutions in the Gunma
prefecture

Cross-industrial
collaboration
Proactively work withdifferent industries to acquire
new strengths and tocomplement our strengths

17✔ Provide solution menu
✔ Joint use of ATMs, common office operations, etc.

Governance

Environment
DigitalM&A and businesssuccession

Local businesses

Information & data

API infrastructure
utilization

FinTech companies



Basic policy 3-1

Involvement or the like in Regional Sustainability/Initiatives for SDGs and ESGs (1)for “Purpose”

Spin the threads of the future for local communities through our decarbonization initiatives and support for the SDGs of local
businesses

Promote local
decarbonization

Promote regional decarbonization by decarbonizing the Bank andsupporting local businesses to decarbonize

Our target for greenhouse gas emissions reduction

Ourdecarbonization

SDGs support for local companies

Install solar panels at
branches

SDGs initiatives
support services-5％Compared to
FY2013(Introduced in the first halfof FY2022)-50％

Net zero
FY2020

FY2024(This Mid-Term)

FY2030 Communicate via
interview sheet

Electricity from renewable energy+
Install solar equipment at branches

Significantly accelerated Japan’s
target (2050)

Gunma Bank Environment Foundation’s
initiatives to conserve the natural environment

Support for local
decarbonization

 Examine feedback content
based on the results of theinterview
 Feedback to business partners
 Provide a solution menu

Encouraging local companies todecarbonize through investments, loans,and consulting
Sustainable finance initiatives to help solve
environmental and social challenges

Tree planting

Drive local
decarbonization■ Provide awards and grants for
activities that contribute to the local
environment■ Environmental education for local
children■ Strengthening cooperation with the
Gunma prefecture and municipalities

Of which,environmental
field

FY2024FY2030500 billion yen

1,500 billion yen

300 billion yen

1,000 billion yen* Accumulated amount executed since FY2022* Financing that contributes to solving environmental issues(renewable energy, energy-saving equipment, etc.) and social
issues (start-up financing, BCP financing, medical care, businesssuccession-related issues, SDGs support, etc.) is eligible.

18* Facilities financing for decarbonization,
consulting on SDGs, etc.

Strengthen structured finance, which requires
more advanced know-how,
to support investments that contribute to the SDGs,
such as in the environmental field
Establish a new specialized department
in April 2022
[Specialized Finance & International Department]

Loan balance
34 billion yen (as of March 31, 2022)↓
130 billion yen (as of March 31, 2025)



Basic policy 3-1

Involvement or the like in Regional Sustainability/Initiatives for SDGs and ESGs (2)for “Purpose”

Contribute to the sustainable development of industry through collaboration with the local communities

Initiatives for sustainable growth of local economy andindustries

Government

Industry

Actively connect companies, universities, public agencies, and financial institutions,and deepen collaboration among them in order to engage actively in thesustainable growth of local industries

Connect
Financial
institutions

Academia

Active involvement in sustainable growth of
local industry
Initiatives for the automotive industry and other sectors
in the context of decarbonization

Comprehensive collaborative agreement for regional revitalization (currently Gunma
Prefecture and 9 cities, 3 towns/ villages in the Gunma Prefecture)
Minakami Town “Hot Spring Town Revitalization Model”

Expansion to other hot spring resorts in the
Gunma prefecture(Community Revitalization Project)[Steps of support]
Build
supplier
database

Number of proposals forcollaboration andsupport measures to recipients with which
comprehensive collaboration agreements havebeen concluded, etc.

Interview
Tier 1&2
About 170
companies

Positioning
map

Proposal toeach company
Support PracticeCompetitive
advantage study

20 cases(Cumulative total for FY2022–2024)

The “Business Evaluation Team,”
consisting of experts such as SUBARU
alumni, is playing a central role in the
project.

Industry-academia-government-financecollaboration project by four institutions

Support for creation and development of next-generation industries

Strengthen support for venturebusinesses through “Collaborative
Agreement for Gunma NextGeneration Industry Creation andDevelopment” and Gunma Regional
Advanced Solution Partners(specialized investment subsidiary)[Support through collaboration within and outside the Group]

Automotive suppliers
Customers

Gunma Next-Generation Industry Creation andDevelopment Consortium

19

Other externalorganizations

Basic policy 3-2

 Coronavirus-ready Support for Finance, Core Business and Succession of the Businesses
for “Purpose”

Spin the threads of the future by connecting the various values of the Bank and the region to businesses
Enhance core business support
menu

Problem-solving loan proposals
Income from corporate
services

Capital investment inbusiness restructuring

2.3 billion yen

Growingareas

Refinancing

Leasing

Capital investment in theenvironmental field

Support for Corona-affected customers to recover theirbusiness performance

Poorly performing
customers

Increased needs
for threesupports becauseof coronavirus

Core businesssupportConsulting promotion teammakes a deal as a hub

Formulation followup of revival planThis MidTerm

Presentations to approx. 7,000 customers
on valuation of company stock

Reinforcement ofSupport for
decarbonization
Digitalization
supportSupport in cooperation withexternal parties

Business
succession
supportDemonstrate the function of“connecting” to the next generation
Last
Mid-Term

Income from corporate
services

3.1 billion yen“Connecting” function – Business matching

FinancialsupportCo-finance with alliance banks

Strengthen the
support system
for accompanying
customers■ Staffing ■ Subsidy support ■ Corporation insurance■ Foreign exchange derivatives■ Financial instruments brokerage, etc.

Customers

business partners
The Bank Our
Alliance partners, etc.

3,000 casesin three years*Excluding matching to the group companies■ M&A ■ Insurance ■ Business matching■ Initiatives for structured finance with covenants, etc.
Number of business succession issues resolved(monetized deals)
Cumulative target for three years: 600 cases

Propose specific solutions toapprox. 3,300 of these customers

Corporate service
revenue

1.1 billion yen

Demonstrate our ability to “connect” through collaboration with the Group andalliances
Financial support

Group-wide
initiatives
Utilization ofalliance

Core business support

Bank support
Branch staff

Business succession
support100%
implemented
within threemonthsThe Gunma Bank

GunginLeasingGungin System Service
Gungin Consulting

Follow-up

Gunma Regional Advanced Solution Partners

Issues and needs
understanding

Number of needs registered
Approx. 8,000 cases in the past
2 years

Problem solving
supportAnnual results (paid):
approx. 800 cases

TSUBASA , Daishi Hokuetsu , Ryomo

20

HQ promotion
team (Stationed
at branch)
Collaborate
HQ functional
team

Increased
members due
to branch
consolidation

Basic policy 3-3

Personalized Consulting Service for Each Individual Customer

for “Purpose”

Contribute to the prosperous future of individuals by supporting them according to their life-stage

Asset building generation

Younger generations
Strengthen unsecured
loan initiatives

Strengthen
housing loan
initiatives

Unsecured consumer loans
outstanding

75 billion yen (as of March 31, 2025)

Executed■ Upgrade marketing byusing data

(billion yen)

■ Upgrade digital channels
and call arrangements

82.4

107.8
Mar. 2022

Mar. 2025(Time before
last Mid-Term)(Last Mid-Term)(This Mid-Term)

Deposit financial assets
Of which, investment trusts

Deals
completed in
WebsiteDirectCenterSavings
investment
trusts1,250 billion yen
400 billion yen(as of March 31, 2025, consolidated)

Connecting to the next
generation

Proposals for testamentary
trusts by “asset succession
advisors,” etc.
Number of contracts forinheritance-related services

1,000 cases
Long-term, accumulated,diversified investment

Combined proposal

Expand the value provided by digital technology

Strengthen collaboration with banks and securities companies(to meet diverse needs)

150.0

Mar. 2019

Level-payment insurance■ Strengthen connections
through apps and SNS

Apps

Three-year
cumulative
400.0

Senior generation

Accumulated investment trust
contracts per month
2.5 billion yen (as of March 31, 2025)

Asset building of customers(over three years)

Focus on expandingbalance
Reinforce initiatives offinancial gerontology

Sophisticated face-to-face follow-up arrangements (the Bank’s strength)
Individual Consulting
Plazas &Loan stations

BranchesSpecialized HQ
departments

In addition to product-based contacts, build long-term relationships (connections) through a combination of real and digital channels to contribute to stable asset formation

Expand wealth management functions

The Wealth Management Group (below) at HQ and sales branches will work together to strengthen consulting services
to resolve customer issues that are increasingly diverse and advanced.

Structure of the Wealth Management Group

Target segment

Direction

Private banking advisors

Upper class

Asset formation advisors

Middle – Upper Middle class

Station at branches to train branch staff and respond to customers’ investment needs

Asset succession advisors

Middle – Upper Middle class

Reinforce inheritance-related operations, and strengthen proposals to real estate and corporate owners, etc.

Real estate utilization advisors

Real estate owner

Strengthen proposals for real estate utilization to owners of real estate whose market has growth potential

Strengthen the organization (personnel, skills) and expand the product lineup21

Exploring New Business Opportunities through the Group’s Comprehensive Capabilities
and Deepening Existing Businesses
for “Purpose”

Basic policy 3-4

Contribute to the future of local communities by providing value that goes beyond existing business areas as a Groupwide effort
Explore new business areas

Deepening existing businesses

ExploreRespond to various issues and needs of customers bystrengthening collaboration within the Group through promotion of
personnel exchange, etc.

The Bank’s resources and the needs of local communities taken
into consideration, the following three areas prioritized
Human resources solution business○ Staffing [two-handed]○ Registration type worker
dispatching[from FY2022 (plan)]○ Employment placement
dispatching[from FY2022 (plan)]

Staffing cases closed
200 cases

Create local value through management
support(Est. Dec. 2020, specialized investment
subsidiary)(for three years)

Provide optimal solutions to
individual company issues

Regional trading company business[From FY2023 (plan)]○ Provide local products andexperiences (e-commercemalls, apps)○ Advertising and rebranding○ Planning, development andsales of new products and services
based on local resources andtechnologies

Support productivity improvement
through systemization○ ICT implementation support[from FY2022 (plan)]○ System sales and development

Respond to effective
equipment installation needs

Gunma Shinyo Hosyo Co., Ltd.
Assist customers with their dreams
for homes, cars, etc.

Realize payment diversificationand cashless transactions
ICT/DX solutions businessRespond to diverse asset
management needs,
including stocks and bonds

Gunma Chuo Kogyo Co. Ltd.
Support banking infrastructure
through transportation and maintenance*See the next page forcashless initiatives
The Group’s Consolidated final profit (FY2024): 4.0 billion yen[from FY2022 (plan)](+1.1 billion yen from FY2021)

Deepen22



Basic policy 3-４

The Group’s Comprehensive Capabilities – Promotion of Local Cashless Services
for “Purpose”

Connecting payments and settlements across the region with the power of digital to create a sustainable regional
ecosystem

Promotion of cashless payment within
the region
From April 2022, integrate the Group’s card businesses into Gungin Card

○ Expand locations where cashless payment can be made (expansion of member stores)○ Expand cashless payment users (provision of new payment tools, expansion of membership)Cashless promotion for the entire region⤴
Increased consumption and business productivity⤴

Cardless & apps linkage

Debit cards
Expansionofcashlessusers(anyone)Corporate credit cards
Personal credit cards

Code payment linkage

Payment data linkage

✓
✓
✓
✓

Personal and corporate credit card services
Cashless payment member store services
Plan and provide new cashless payment methods
Support for digitalization in line with cashless transactions

Transportation (MaaS)

Circulation and expansionof the local ecosystem

Expandcashless economy○ By means of cashless payment, accumulate and utilize payment data, create new values suchas advertising, sending customers, local points, etc. and further expand circulation in local
economyHouse Paye-TAX, e-LTAX

Improveconsumers’
convenience

Expand inregion/inboundtourism
consumption

Accumulation &utilization of
settlement data

Expandrevenue ofbusinesses

Multi-payment terminals

Advertising,loyalty points, etc.
Expansion of places where cashless payments can be made (anywhere)○ Expand the number of stores, offices, and clinics that accept
cashless payments by distributing multi-payment
terminals

Improve efficiency & productivity

Number of cashless member
stores○ Develop and provide a specialized payment service(House Pay) for retailers and businesses using BankPay

Cashless transaction volume(in billion yen)200

16,000135

12,500○ Consider issuing branded debit cards to expand new
cashless users

March 31, 2022

23

March 31, 2025

March 31, 2022

March 31, 2025



Basic policy 3-5

Reinforcement of Our Management Structure to Consistently Demonstrate Our Strengths in “Connections”

Spin the threads of the future for local communities and demonstrate our “strengths in connections” appropriately and consistently
by strengthening the Bank’s management structure

for “Purpose”

Increase earnings through appropriate risk-taking using the Risk Appetite Framework (RAF)
Direction based on profitability comparisons bybusiness area

12

8
6

Larger profit amount()
RA gross profit(Billions of yen / half year)

Ｒ
Ａ
粗
利
益
額
億
円

10

SMEs

Sustainably fulfill financial
intermediary functions bysecuring earnings commensuratewith risk
Improvement of interest rates andcomprehensive transactions
Improve RORA Increase profit amountFor SMEs that support the local
economy, proactively take risks[On securities]
By making effective use of risk-weighted
assets, diversify assets under management
and build a long-term stable portfolio
New area[FY2024]
Profit on loans 54.5 billion yen(Approx. total loan balance:
6 trillion yen)

Accumulatebalance

Foreignbonds
Domestic&
foreign PE

42

Rental realestate

0
0.50
0.00

1.00
1.00

1.50
2.00

ForeignstocksDomestic
stocksUnsecured loan

HQ lending
2.00
3.00

*Bubble size corresponds to loan balance
ＲＯＲＡ
ＲＯＲＡ（％)(RA gross profit/risk-weighted assets)■ Compliance-first business operations■ Upgrade anti-money laundering system→ TSUBASA Alliance
Collaboration with AML Center■ Strengthen cybersecurity management

Corp.
bonds

New area

RORA (%)

Enhance compliance system,
prevent money laundering, etc.

Muni.
bonds

Risk-weighted asset

Investment
trusts

Housing
Large &
medium-sized

Govt. bonds

2.50
4.00

5.00

6.00

Highly profitable compared to risk

■In addition to optimizing risk-return ratios through the
RAF, enhance our risk management system

Enhance corporate governance■ Enhance corporate governance■ Continue to reduce shares held for policy purposes→ Upgrade use of the skills matrix■ Proactively disclose information to stakeholders→ Data-driven management system■ Strengthen risk governance→ Establish a management system of risks associated withthe execution of strategies (Risk assessment of this MidTerm Business Plan on page 25)24



Risk Management in the implementation of the Mid-Term Business Plan

Risk Management Process○Clarify anticipated risks associated with the implementation of the Mid-Term Business Plan and conduct risk
assessment at the stage of formulating the plan
○During the plan period, monitor the occurrence of anticipated risks and ascertain the risk status○Report the monitoring status to the management (Board of Directors) on a regular basis

Plan implementation
phase

Plan formulation phase

Identify risk
- Clarify anticipated risks

Control risk

Assess risk
- Evaluate its likelihoodof occurrence and impact- Consider control
measures* Risks are examined through collaboration between the departments in charge and Risk Management Department.

Monitor risk
- Review risk status(Identification of indications,checks and balances)* Conducted by Risk
Management Department■ Risk categories to be examined- Conduct risks (social norms, users’ viewpoints, market practices)- 14 items in total, including credit risk, administrative risk, and system risk

■ List of risks (Example)
Key measures

Report monitoring status(List of risks identified and assessed through the above examination)

Examples of anticipated risk

○Solution proposals with businesssuccession support as a startingpoint- Misperception of inappropriate tax avoidance recommendations- Increase in non-performing loans beyond expectations- Infringement of customer interests through contracts that prioritize bankprofits○Expand wealth management
functions and services for seniors- Complaints and troubles due to sales and proposals that are not customeroriented- Preferential sales of products with high commission rates○Efficient branch operations
through administrative reforms- Failure to check and keep documents as required by laws and regulations
due to prioritizing efficiency- Serious errors due to lack of understanding of procedures and equipment
operations

Management(Board of Directors)- Monitor plan
implementation status andrisk status as a whole* Management decisions in a timely
manner○Risk assessments have already been done for key measures in this plan that are considered to have the likelihood to cause conduct risk.
Hereafter, monitoring will be conducted in accordance with the above scheme, and risks will be managed appropriately.
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Gunma Bank Group SDGs Declaration(GB Sustainability Policy 2030)
We strive to build a sustainable society and generate economic value
by contributing to achieving Sustainable Development Goals (SDGs)
through engaging in business activities in ways that always consider
the development of local communities.

Priority issues and initiative policy
1. Sustained development of the regional economy

3. Promote successful engagement by diverse personnel

 We enhance the initiatives to assist the growth of regional business
operators and vitalize regional communities while supporting the sustained
development of regional economies by providing financial services befitting
the diverse needs of customers.
 In order to foster next-generation leaders, we will enhance financial andeconomic education to improve the financial literacy of regional citizens andsupport innovation in regional industries to build sustainable infrastructure.

 We enhance the diversity of directors and employees toward building aworkplace in which all employees such as female, junior, and senior-age
personnel can successfully work and foster them for the work and deliver aflexible work style.

4. Promote partnership

2. Preservation and creation of global environment

 We strive to build a sustainable society as a whole region through partnershipwith municipalities, corporate and individual customers.

 We assist our customers in working to preserve the environment and tocreate a beautiful environment, strive to lower the environmental load fromour operations, and work to enhance our climate change countermeasures.

(Established on February 25, 2019, Revised on April 1, 2022)

The Bank Group believes that its efforts to realize the Purpose (we use our strengths in connections tospin the threads of the future for local communities) in accordance with the Mid-Term Business Plan willcontribute toward achieving the SDGs, realizing a sustainable society and creating economic value.

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This document contains descriptions on the future performanceof the banking group. These descriptions do not guarantee such
future performance, for which naturally there are risks and uncertainty.
Please note that future performance may deviate from the targets
due to changes in the business environment and other reasons.

If you have further inquiries, please contact:
Business Management Office (in charge of IR),
Corporate Planning Department,
The Gunma Bank, Ltd.
https://www.gunmabank.co.jp/