2019
Annual Report
Year Ended March 31,2019

The Keiyo Bank, Ltd.

Message from the President
Establishment of omnichannel
To properly respond to diverse customer needs, we arepromoting our omnichannel services. We are enhancing
our services for non-face-to-face channels which
proactively utilize information and communications
technology (ICT), such as increasing the types of loan
products for which customers can complete applications
online, and strengthening our partnerships with fintech
companies. In face-to-face channels, we are expanding
the types of operations that customers can complete atour “interactive counters” without filling out any paper
forms, etc. By shortening the waiting time and reducing
the burden on customers, we are creating branches wherecustomers can personally experience our high-quality
consulting services.

Toshiyuki Kumagai
President

We appreciate your continued patronage extended to theKeiyo Bank.
The Japanese economy is expected to continue following
a moderate recovery path given the continuing
improvements in employment and income despite
increasing uncertainty regarding the global economy.
Meanwhile, the business climate in which local financial
institutions operate is becoming increasingly more severe
due to the prolonged low-interest-rate policy, in addition
to further progression of social problems such as thedecreasing population, and also the aging population andthe falling birthrate.
Under these circumstances, the Keiyo Bank is promoting
the “α ACTION PLAN 2021”, our 18th mid-termbusiness plan; this year marks the middle year. The basic
policy of the plan is to become “a bank boasting thehighest satisfaction from both customers and employees”.
By engaging in the four key strategies below, we aim tobuild a sustainable business model for a company that
does not waver even in the face of changes in thebusiness environment.
Business operations tailored to customers’ needs
We established Keiyo Bank Capital & Consulting Co.,
Ltd. in April of this year in order to provide optimal
solutions for the business issues our corporate customers
face. By strengthening our ties with external experts, weare offering high-quality consulting services, businesssuccession support, etc. With respect to individualcustomers, we are committed to our customer-firstbusiness operations, and are strengthening our support for
asset building to the working generation and transferring
financial assets between generations. We continue tostrive to enhance higher added-value services and carryon business operations tailored to customers’ needs.

1

Reforms to become a professional group where all
employees can shine
In order to offer added-value (of “plus something”)
services to our customers, we support diverse careerdevelopment for our employees and strive to nurture
professional human resources who possess expert
knowledge, skills, and experience. Furthermore, bypromoting diversity and work-style reforms, we create aworking environment in which employees can achieve awork-life balance and each employee has a meaningful
job while we also seek to boost productivity.
Low cost operations and profit growth
While improving the convenience for our customers, weare increasing the pace of efficiency improvements inour operations by shifting to paperless application
procedures, etc. We are facilitating the transfer of clericalstaff to sales positions by promoting the streamlining of
branch operations, and enhancing the contact point withcustomers by implementing efficient branch strategies.
We are also strengthening our commitment to low cost
operations and efforts to grow profits.
In addition to these initiatives, we will improve“Environmental, Social and Governance” (ESG) andconduct operations with awareness of “SustainabilityDevelopment Goals” (SDGs), which the United Nations
advocate. In particular, we recognize that compliancewith laws and regulations is one of the priority issues for
management and we are striving to further strengthen ourcompliance system. All officers and employees of theKeiyo Bank Group are determined to make utmost
efforts to earn the trust and meet the expectations of all
stakeholders. We therefore would like to seek yourcontinued support of the Keiyo Bank.
July 2019

Corporate Profile
Name:
Date of foundation:
Capital:Headquarters:
Network of offices etc.:
Headquarters/branch officess:Sub-branch offices:
ATM installments:
Employees:
Total assets:
Deposits:
Loans:
Capital adequacy ratio:

Credit rating:

The Keiyo Bank, Ltd.
March 31, 1943
JPY49.7 billion
11-11, Fujimi l-chome, Chuo-ku, Chiba City, Chiba
Prefecture, Japan
281 locations in total:
1202159
2,010 people
JPY 4,890.7 billion
JPY 4,558.4 billion
JPY 3,613.3 billion
10.78% (non-consolidated)
10.78% (consolidated)(Based on new standards for a domestically-operating banks)
A– (by S&P Global Rating)A+ (by Japan Credit Rating Agency)(As of March 31, 2019)

Board of Directors and Corporate Auditors
President (Representative Director)
Toshiyuki KumagaiVice President (Representative Director)
Kiyoshi Hashimoto
Director
Director Senior Managing Executive Officer
Hiroshi Oshima
Director Managing Executive Officer
Ichiro Kimizuka
Satoru Akiyama
Tatsushi Ichikawa
Director (Outside Director)
Yasushi Saito
Katsusada Akiyama
Hiroshi Uchimura

Executive Officer
Managing Executive Officer
Kazuo Fujisaki
Seiji Sato
Executive Officer
Kenji Saito
Masato Nakatani
Genichi Ashiya
Katsuya Taniai
Hiromi Kosaka
Minoru Yoshida
Tomoyuki Kunii
Corporate Auditor
Standing Corporate Auditor
Masatsugu Miyama
Koichi Takahashi
Corporate Auditor (Outside Corporate Auditor)
Isao Ono
Masayuki Shigeta
Tsutomu Hanada

2Summary of Performance Results (non-consolidated)
Operational results (non-consolidated basis)
Highlights
As for the operational results for FY2018 (ended March 31, 2019), the balances of deposits and loans
posted a steady increase from the previous fiscal year.
In terms of revenue, because interest on loans and discounts exceeded that in the previous fiscal year
for the first time in ten years, coupled with increased net fees and commissions, lower expenses, etc.,
the core net business profit, which indicates the earning power of the core business, increased JPY359
million to JPY18,560 million, the first increase in eight years.
In addition, the Keiyo Bank posted ordinary profit of JPY15,326 million and profit of JPY10,526 million.
‌net business profit = Net business profit + Provision of general allowance for doubtful accounts* Core- Gains (losses) on bonds

Balance of Deposits
JPY4,558.4 billion (Annual increase of 3.0%)
Due to expansion of the salary deposit and pension payment transactions with our bank accountholders, the balance of deposits increased to JPY4,558.4 billion as of March 31, 2019, up JPY136.8
billion from the previous fiscal year (i.e., an annual increase of 3.0%), mainly in deposits byindividuals.

Balance of LoansJPY3,613.3 billion (Annual increase of 4.6%)
As a result of our aggressive approach in promoting retail loans business, mainly housing loans, andloans to small and medium-sized companies, the balance of loans reached JPY3,613.3 billion as ofMarch 31, 2019, up JPY158.9 billion from the previous fiscal year (i.e., an annual increase of 4.6%).

Core net business profit and Ordinary Profit and Profit
Core net business profit: JPY18.5 billion/Ordinary profit: JPY15.3 billion/Profit:
JPY10.5 billion
Core net business profit was JPY18,560 million, up JPY359 million from the previous fiscal year,ordinary profit was JPY15,326 million, down JPY2,038 million from the previous fiscal year, and profit
was JPY10,526 million, down JPY1,566 million from the previous fiscal year.

Capital Adequacy Ratio
10.78%
The capital adequacy ratio of the Keiyo Bank was 10.78%, down 0.17 percentage point from theprevious fiscal year due to an increase in risk assets stemming from increased loans, and other factors.
Nevertheless, this capital adequacy ratio was still relatively high.

3Non-performing loans ratio(based on the Act on Emergency Measures for Revitalizing the Financial Functions of Japan)

1.16%
The Keiyo Bank’s non-performing loans ratio was 1.16% as of March 31, 2019, down 0.17 percentage
point from the previous fiscal year, based on the Act on Emergency Measures for Revitalizing theFinancial Functions of Japan.
* The lower the percentage of the non-performing loans ratio is, the stronger the financial institution is.

Balance of loans to small and medium-sized companies
JPY1,412.8 billion
As a result of strengthening our business operations and enhancing our consulting services based on
business potential assessment, the balance of loans to small and medium-sized companies reached
JPY1,412.8 billion, up JPY68.2 billion (i.e., annual increase of 5.0%) from the previous fiscal year.

Balance of housing loans
JPY1,461.8 billion,
As a result of our aggressive approach in responding to customers needs for housing finance, thebalance of housing loans as of March 31, 2019 reached JPY1,461.8 billion, up JPY66.1 billion from theprevious fiscal year (i.e., annual increase of 4.7%).

Balance of other loans (*)
JPY46.9 billion
The balance of other loans(*) reached JPY46.9 billion as of March 31, 2019, up JPY1.4 billion from theprevious fiscal year (i.e., annual increase of 3.3%), as a result of our endeavor to offer a wide variety ofloan products in response to various needs of our customers, in addition to increasing convenience forthem in applying for such loan products.
* “Other loans” means consumer loans excluding housing loans.

Credit rating
The credit rating (the long-term obligor rating) for the Keiyo Bank given by S&P Global Ratings, one,of the world s top three credit-rating companies, was “A‒” as of June 30, 2019. The credit rating (thelong-term obligor rating) by Japan Credit Rating Agency remained “A+” as of June 30, 2019. Bothrating companies gave higher ranking appraisal to the Keiyo Bank.

4

(Unaudited)

Consolidated Balance Sheets
Unit:Thousands ofU.S. dollars

Unit:JPY milion

2018

2018

¥ 291,325
9,900
4,195
928,118
3,454,643
4,292
31,89865,70628,077
31,175
409
6,043
4,471
2,329
1,941
200
424,400△9,495¥ 275,936
6,265
4,247
888,553
3,613,625
2,949
40,33563,385
26,684
31,106
94
5,499
5,661
2,261
3,200
199
37
3,915
△9,545$ 2,486,133
56,44638,2648,005,703
32,558,113
26,569363,411571,087
240,418
280,259846
49,54551,004
20,371
28,831
1,792
333
35,273△85,998

4,789,498

4,895,368

44,106,387¥4,419,524
13,50031,400225
10,324
1,281
66
2,631
5
12
622
680
6,316
4,643
4,400

¥4,556,163
16,000ー
173
10,782
1,245
66
2,669
58623
867
3,349
4,639
3,915

$41,050,211
144,157
ー
1,558
97,143
11,217594
24,047
45
72
5,613
7,811
30,173
41,79635,273

4,495,633

4,600,513

41,449,797

49,75939,704
174,810△12,789$

Assets:Cash and due from banks
Call loans and bills bought
Trading account securities
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Buildings, net
LandConstruction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Software in progress
Other intangible fixed assets
Deferred tax assetsCustomers' liabilities for acceptances and guarantees
Allowance for loan losses※Note2017

Total assets

Liabilities:
Deposits
Negotiable certificates of deposit
Borrowed money
Foreign exchanges
Other liabilities
Provision for bonuses
Provision for directors' bonuses
Net defined benefit liability
Provision for directors' retirement benefits
Provision for loss on interest repayment
Provision for reimbursement of deposits
Provision for contingent loss
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities

Net assets:
Capital stockCapital surplus
Retained earnings
Treasury shares¥

49,75939,704
167,453△12,947¥

448,319357,725
1,575,006△115,226

Total shareholders' equity

243,970

251,485

2,265,834

Valuation difference on available-for-sale securities
Revaluation reserve for landRemeasurements of defined benefit plans

40,483
6,602△1,39033,642
6,858△1,663

303,108
61,789△14,983

Total accumulated other comprehensive income

45,69538,837349,914

Share acquisition rights
Non-controlling interests

346
3,852

293
4,238

2,639
38,183

293,865

294,8552,656,590

4,789,498

4,895,368

44,106,387

Total net assets
Total liabilities and net assets

Summary of Performance Results (consolidated)
Unit:Thousands ofU.S. dollars

Unit:JPY milion

Ordinary income
Ordinary profit
Profit attributable to owners of parent
Comprehensive income
Total net assets
Total assets
Capital adequacy ratio (Based on standards for a domestically-operating bank)

5

FY2017FY2018FY2018¥¥$

65,13917,787
12,116
13,393
293,865
4,789,498
10.98%

67,465
15,670
10,547
3,824
294,855
4,895,368
10.78%※Note607,847
141,183
95,02634,4532,656,590
44,106,387
10.78%※‌Note:U.S.dollar amounts are shown solely for the purpose of convenience and calculated at the conversion rate of ¥110.99 to US$1.00, the exchange rate
prevailing on March 31, 2019

(Unaudited)

Consolidated Statements of (comprehensive) Income
Unit:Thousands ofU.S. dollars

Unit:JPY milion※Note2017

2018

2018

¥65,139¥67,465$607,847

49,71337,176
11,961106468
0
10,662
1,569
3,193
33,19048,73537,183
10,934140466
911,3701,380
5,97945,974

439,093
335,012
98,513
1,261
4,198
81
102,441
12,43353,86936
53,824¥47,351¥51,794$466,654

860
567
3
△163060
3,811
648
38,389
3,641
916
2,725

811
503
2
△14
320
0
4,003
1,775
37,418
7,785
5,055
2,730

7,306
4,531
18
△126
2,883
0
36,06615,992
337,129
70,14145,544
24,596¥17,787¥15,670$141,183

Extraordinary income
Gain on disposal of non-current assets
Extraordinary losses
Loss on disposal of non-current assets
Impairment loss

106
10628724641ーー
238
101137ーー
2,144
909
1,234

Profit before income taxes

Ordinary income
Interest income
Interest on loans and discounts
Interest and dividends on securities
Interest on call loans and bills boughtInterest on deposits with banks
Other interest income
Fees and commissions
Other ordinary income
Other income
Recoveries of written off claims
Other

Ordinary expenses
Interest expenses
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money and bills soldInterest on payables under securities lending transactions
Interest on borrowings and rediscounts
Fees and commissions payments
Other ordinary expenses
General and administrative expenses
Other expenses
Provision of allowance for loan losses
OtherOrdinary profit¥17,606¥15,432$139,039

Income taxes - current
Income taxes - deferred

5,104
122

4,716
△23

42,490△207

Total income taxes

5,227

4,693

42,283

Profit12,378

10,73996,756

262

191

1,720

¥12,116¥10,547$95,026

Profit attributable to non-controlling interests

Profit attributable to owners of parent

Consolidated Statements of Comprehensive Income
Unit:Thousands ofU.S. dollars

Unit:JPY milion※Note20172018

2018¥12,378
1,014
62952

¥10,739△6,914△6,638△276$ 96,756△62,293△59,807△2,486Comprehensive income

13,393

3,824

34,453Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

13,009
383

3,433
390

30,9303,513

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax

6The Keiyo Bank, Ltd.
Head Office

11-11,Fujimi 1-chome,Chuo-ku,Chiba City,Chiba 260-0015,Japan
Phone:+81 43 2222121
URL: https://www.keiyobank.co.jp

Treasury And Securities Division International Business Group

5-45,Chiba-Minato,Chuo-Ku,Chiba City,Chiba 260-0026,Japan
Phone:+81 43 3068271
Fax:+81 43 3017004
E-mail: kokusaigyom@keiyobk.jp
SWIFT Code:KEIB JP JT