About Nanto Bank

Our Shared Vision

Governance Supporting OurDeveloping Human
Value Creation by theResources for Value Creation Group’s Human Resources Proactive Human Resources

Consolidated FinancialStatements

Governance

Risks andopportunities

Performance

Furthering Sophisticated Market Management
The market has remained extremely unstable due to the sharp risein interest rates, mainly in Europe and the U.S., in response to theprogression of global inflation, the resulting depreciation of the yen, andthe increase in geopolitical risks. In response to these conditions, we soldall foreign currency-denominated bonds that were in reversal at the endof the previous fiscal year, and also disposed of investment trusts whosebook value is expected to take time to recover.
In FY2023, European and U.S. markets continue to be unstable dueto the risk of rising interest rates and concerns of falling stock prices
accompanying economic recession, while changes in monetary policy arealso being discussed in Japan. Under the uncertain market environment
Executive in Charge of Market Operations Department
both in Japan and overseas, the Bank will work to restructure its portfolio
Director, Managing Executive Officer Ryuichiro Funaki
to minimize the risk of incurring losses when prices of bonds and stocks
fall, while at the same time enjoying stable fund profits when domestic long-term interest rates rise.
One notable feature of the Bank's market management is the outsourcing of investment management to leading external
asset management firms. This arrangement offers two major advantages: First, it facilitates improvement of the Market Operations
Department’s skills by ascertaining these firms’ operations knowhow; and, second, it gives us the ability to gather real-time
information concerning indicators of changes in global markets. We seek to employ these advantages to improve our risk
management techniques and the returns from our own investment management operations as we strive to enhance the overallsophistication of the Bank's Market Operations Department.

Fiscal 2023 Action Plan
External environment
Slow
economic
growthIncreased
geopoliticalrisk

Goal to beachieved

Fiscal 2023 Action Plan
Controlling the impact of increased market risk andconstructing a portfolio that earns a stable yield

Stable,sustainable
operations

Accumulation of stable periodic income through portfolio restructuring

Accumulation of stable periodic income through portfolio restructuring
Securing stable income
Accumulating capital gains through flexible trading
Employing hedging techniques to minimize the risk of rising interest rates and falling stock prices
Market sector earnings
1.21
17.3

Investment balance (unpaid balance basis)
(%)

1.01
0.07

(Billion yen)

14,759
888
851

14.2

1.0

Market sector yield

11.3

17.0

2.8

2022

911
1,049
4,756

2023 (Fiscal year)

Equities
Foreign currency bonds

Capital income

–9.7
2021

13,259

Income10.70.3

6,145

Market sector earnings(Billions of yen)

6,874

6,541

(Outsourced)(Outsourced)

5,827

5,548

2021

2022

Yen bonds
Investment trusts, etc.

(Fiscal year)(Planned)

Nanto Report 2023, the integrated report of Nanto Bank47