2018
Annual Report
Year Ended March 31,2018

The Keiyo Bank, Ltd.

Message from the President
Establishment of omnichannel
The Keiyo Bank will strengthen our initiatives in the fieldof fintech in addition to enhancing our services for nonface-to-face channels which proactively utilize
information and communications technology (ICT),
enabling customers to use our convenient services safely
and comfortably at anytime, anywhere. In face-to-facechannels, we are steadily opening “next-generation”
branches and establish an environment for customers touse our services conveniently. We will also make reforms
to create a consulting area in which more in-depth
discussions can take place.

Toshiyuki Kumagai
President

We appreciate your continued patronage extended to theKeiyo Bank.
The Japanese economy continues to experience a
moderate recovery path, whereas social structuralproblems over a long time of period such as thedecreasing population, and also the aging population andthe falling birthrate, have further progressed. Thus,
customer expectations run higher for local financial
institutions like the Keiyo Bank to get more actively
involved in the effort for revitalizing the local economy,
for instance, by advancing their intermediary financialfunctions.
Under these circumstances, the Keiyo Bank started the “αACTION PLAN 2021”, our 18th mid-term business planfor 3 years started from April 2018. The basic policy ofthe plan is to become “a bank boasting the highest
satisfaction from both customers and employees”. By
engaging in the four key strategies below, we aim toachieve “further advancements”.
Business operations tailored to customers’ needs
We established a “Corporate Business Division” in theheadquarters in order to strengthen initiatives to support
companies with financing and productivity improvement
through business potential assessment by starting
dialogues with their management people. We prepared asystem to provide optimized solutions to solve businessissues. With respect to individual customers, we further
promoted customer-first business operations (fiduciaryduty) and newly established a “Retail Business Division”
to support asset building and inheritance. We continue to
strive to enhance higher added-value services and tocarry on 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, the Keiyo Bank will establish
diverse career forms and a system of talent development,
evaluation, and remuneration which fits each and every
employee. Furthermore, we will provide employee
support to promote diversity and strive to nurture
professional human resources and human resources who
possess a wide array of knowledge, skills, andexperience.
With “work style reforms”, we will promote work-lifebalance among our employees and review the business
operations as we seek to boost productivity.
Low cost operations and profit growth
As we concentrate on business operations from acustomer’s perspective, we will conduct business process
re-engineering (BPR) to further boost competitivenessand promote low cost operations. In addition totransferring clerical staff to sales positions, the Keiyo
Bank will attempt to grow profits through efficient
strategies, such as implementing an area system inoperations. Through these initiatives, we aim to achieve asustainable growth and enhance the mid- to -long term
corporate value.
In addition to these initiatives, we will improve“Environmental, Social and Governance” (ESG) andconduct operations with awareness of “Sustainability
Development Goals” (SDGs), which the United Nations
advocate. All officers and employees of the Keiyo Bank
Group are determined to make utmost efforts to be able
to meet expectations of all stakeholders. We therefore
would like to seek your continued support to the KeiyoBank.
July 2018

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
285 locations in total:
120
2
163
2,085 people
JPY 4,785.2 billion
JPY 4,421.5 billion
JPY 3,454.3 billion
10.95% (non-consolidated)
10.98% (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, 2018)

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
Tetsuya Sakasai
Satoru Akiyama
Director (Outside Director)
Yasushi Saito
Katsusada Akiyama
Hiroshi Uchimura

Executive Officer
Managing Executive Officer
Tatsushi Ichikawa
Executive Officer
Kenji Saito
Masato Nakatani
Kazuo Fujisaki
Seiji Sato
Genichi Ashiya
Katsuya Taniai
Hiromi Kosaka
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 FY2017 (ended March 31, 2018), the balances of deposits and loans
posted a steady increase from the previous fiscal year.
In terms of revenue, the Keiyo Bank posted ordinary profit of JPY17,364 million and profit ofJPY12,093 million. The Keiyo Bank posted ordinary profit and profit growth for the first time in fourand two years, respectively.

Balance of Deposits
JPY4,421.5 billion (Annual increase of 4.3%)
Due to expansion of the salary deposit and pension payment transactions with our bank accountholders, the balance of deposits increased to JPY4,421.5 billion as of March 31, 2018, up JPY182.7
billion from the previous fiscal year (i.e., an annual increase of 4.3%), mainly in deposits byindividuals.

Balance of Loans
JPY3,454.3 billion (Annual increase of 5.5%)
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 JPY3,454.3 billion as ofMarch 31, 2018, up JPY183.1 billion from the previous fiscal year (i.e., an annual increase of 5.5%).

Ordinary Profit and Profit
Ordinary profit: JPY17.3 billion / Profit: JPY12.0 billion
Ordinary profit for FY2017 was JPY17,364 million, up JPY125 million from the previous fiscal year.
Profit for FY2017 was JPY12,093 million, up JPY476 million from the previous fiscal year.

Capital Adequacy Ratio
10.95%
The capital adequacy ratio of the Keiyo Bank was 10.95%, down 0.27 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)

1.33%
The Keiyo Bank’s non-performing loans ratio was 1.33% as of March 31, 2018, down 0.13 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
JPY1,344.6 billion
Due to our aggressive approach in extending loans to small and medium-sized companies, mainly in thegrowing industries, the balance of loans to small and medium-sized companies reached JPY1,344.6
billion as of March 31, 2018, up JPY108.2 billion from the previous fiscal year (i.e., annual increase of8.7%).

Balance of housing loansJPY1,395.6 billion,
As a result of our aggressive approach in responding to customcrs needs for housing finance, thebalance of housing loans as of March 31, 2018 reached JPY1,395.6 billion, up JPY63.8 billion from theprevious fiscal year (i.e., annual increase of 4.7%).

Balance of other loans (*)
JPY45.4 billion
The balance of other loans(*) reached JPY45.4 billion as of March 31, 2018, up JPY3.1 billion from theprevious fiscal year (i.e., annual increase of 7.3%), 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, 2018. The credit rating (thelong-term obligor rating) by Japan Credit Rating Agency remained “A+ ” as of June 30, 2018. Bothrating companies gave higher ranking appraisal to the Keiyo Bank.

4

(Unaudited)

Consolidated Balance Sheets
Unit:Thousands ofU.S. dollars

Unit:JPY milion※Note2016

2017

2017

¥214,970
6,082
4,192
1,013,957
3,271,474
2,861
17,854
67,23628,594
31,275
871
6,494
3,304
1,642
1,461
200
60
6,159
△9,729¥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$2,742,140
93,18539,486
8,736,050
32,517,347
40,399300,244618,467
264,278
293,439
3,849
56,88042,08321,922
18,2691,882
395
41,415△89,3734,598,425

4,789,498

45,081,871¥4,237,075
13,50032,400
106
8,923
1,292
66
4,056
2
15
573
628
5,762
4,643
6,159

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

$41,599,435
127,070
295,557
2,117
97,176
12,057621
24,764
47
112
5,854
6,400
59,45043,702
41,4154,315,206

4,495,633

42,315,822¥49,759
39,704
158,239△12,973¥49,759
39,704
167,453△12,947$468,364
373,719
1,576,176△121,865

Total shareholders' equity

234,730

243,970

2,296,404

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

40,541
6,602△2,342

40,483
6,602△1,390381,052
62,142△13,083

Total accumulated other comprehensive income

44,802

45,695430,111

Share acquisition rights
Non-controlling interests

287
3,398

346
3,852

3,256
36,257283,219

293,865

2,766,048

4,598,425

4,789,498

45,081,871

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, netLand
Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Software in progress
Other intangible fixed assets
Deferred tax assets
Customers' liabilities for acceptances and guarantees
Allowance for loan losses
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 stock
Capital surplus
Retained earnings
Treasury shares

Total net assets
Total liabilities and net assets

Summary of Performance Results (consolidated)
Unit:Thousands of
U.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

※Note

FY2016FY2017FY2017¥66,570
17,666
11,634
4,156
283,219
4,598,425
11.26%¥65,139
17,787
12,116
13,393
293,865
4,789,498
10.98%$613,130
167,422
114,043
126,0632,766,048
45,081,871
10.98%※‌Note:U.S.dollar amounts are shown solely for the purpose of convenience and calculated at the conversion rate of ¥106.24 to US$1.00, the exchange rateprevailing on March 31, 2018

(Unaudited)

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

Unit:JPY milion※Note2016

2017

2017

¥66,570¥65,139$613,130

51,112
38,26912,30170470
010,434
3,297
1,726
9
1,717

49,71337,176
11,961106468
0
10,662
1,569
3,193
3
3,190

467,931349,924
112,584997
4,405
0
100,357
14,76830,05428
30,026¥48,903¥47,351$445,698

1,105
837
2
△5249
21
3,812
26
39,035
4,923
2,832
2,090

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

8,094
5,336
28
△150
2,880
0
35,871
6,099
361,342
34,271
8,621
25,649¥17,666¥17,787$167,422

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

44558
439
118

106
106
287
246
41997
997
2,701
2,315
385

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 banksOther interest income
Fees and commissions
Other ordinary income
Other income
Recoveries of written off claims
OtherOrdinary 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
Other

Ordinary profit¥17,113¥17,606$165,719

Income taxes - current
Income taxes - deferred

5,330△1285,104122

48,042
1,148

Total income taxes

5,202

5,227

49,199Profit11,91012,378

116,509

276

262

2,466

¥11,634¥12,116$ 114,043

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※Note2016

2017

2017

¥11,910△7,754△8,428673¥12,378
1,014
62952

$116,509
9,544
583
8,960

Comprehensive income

4,156

13,393126,063

Comprehensive income attributable toComprehensive income attributable to owners of parentComprehensive income attributable to non-controlling interests

3,820
335

13,009383

122,449
3,605

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