Developing Human Resources for Value Creation

Cultivating a Healthy Corporate Culture with Participation of Diverse Human Resources

Cultivating “Unconventional” Human Resources
Basic Policy
Human resources are the Nanto Bank Group’s most valuable management capital. It isessential that we secure and develop highly skilled, well-qualified human resources torealize our Management Plan.
We are developing personal and professional growth opportunities by increasing
our external secondments, dispatching trainees, and promoting exchanges among
Group companies. We are also diversifying our human resources by introducing a side
job system and expanding our career recruitment.

What are “Unconventional”
human resources?
Employees who would be theircolleagues’ and our customers’
first choice as collaborating
partners.

Fiscal 2023 Action Plan
Competencies
required of staff

Goal to beachieved

Human resources creation cycle
New graduate
and career
recruitment

Evaluations to
optimize useof human
resources

Ability to engage
in management
decision-making
with customers
Business planningcapability
Ability to innovate

Philosophy sharing

Unconventional
human resources

Careerdevelopment
and training

Diversification ofhuman resources

Skill development
and growth opportunity
enhancement

Positive working
environment

Why do we need unconventional human resources?
About Nanto Bank

Our Shared Vision

Developing Human Resources
for Value Creation

Value Creation by the Group’s
Human Resources

Cultivation of
unconventional
human
resources

What kinds of personnel does the Group seek?

Governance Supporting Our
Proactive Human Resources

About Nanto Bank

About Nanto Bank

Our Shared Vision

Developing Human Resources
for Value Creation

Value Creation by the Group’s
Human Resources

Governance Supporting Our
Proactive Human Resources

Developing Human Resources for Value Creation

Cultivating a Healthy Corporate Culture with Participation of Diverse Human Resources

President’s Message
Organizational
overview and external
environment

GovernanceBusinessmodel

Risks andopportunities

Strategies
and resources
allocation

Performance

Outlook

GovernanceBusiness
model

Strategies
and resources
allocation

OutlookRoundtable Discussion with the Outside Directors

The Nanto Bank Group’s“unconventional” humanresources provide
support for issues facedby customers and theregion.

Cultivating “unconventional human resources”
Three of Nanto Bank’s outside directors, Hidetaka Matsuzaka, Kozue Nakayama, and Shuhei Aoki, joined
Executive Vice President and Director Satoshi Ishida and Director and Senior Managing Executive Officer Kazuya
Yokoya in an exchange of opinions concerning their impressions and evaluations of the Group’s personnel, witha special focus on the actions the Group should take to cultivate unconventional human resources.

Introduction

Nakayama: I have been an outside director of Nanto Bankfor one year now, and I have found that most of the Board
members are serious, sensible people. I honestly find it
difficult to say whether creative, innovative personnel are
likely to emerge from within the Group immediately. On
the other hand, the love the executives and employees soclearly feel for their local region is one of the Bank’s mostcompelling features.

The Japanese economy is currently showing signs of recovery, as economic
activity returns to normal following the downgrading of the new coronavirus
strands to category 5. Consumer spending is recovering steadily, boosted
by rising wages and a positive appetite for investment, including capital
investment in the corporate sector.
Downside risks to the economy are increasing at the same time, however,
due to proliferating geopolitical risks and rising prices of resources and raw
materials. In the financial markets, the environment surrounding financial
institutions remains uncertain due to financial system instability and prolonged
monetary tightening in the United States and Europe.
In Nara Prefecture, which forms the primary business base of the
Nanto Bank Group, consumer spending and corporate activity are gradually
recovering, and demand for tourism, driven largely by foreign visitors toJapan, is picking up. On the other hand, structural social issues, such as
contraction of the regional economy due to a declining birthrate and aging
population and a shortage of successors to take over private companies,
are increasing in severity. As a regional financial institution, we consider it
our role and responsibility to continue contributing to regional development
by confronting these issues head-on. We are working together with ourcustomers and local communities to resolve them, attaining sustainablegrowth of the Group as a result.

Yokotani: Many of our Group employees were born inthis region and grew up with the Bank as part of theirenvironment. This makes them particularly eager tocontribute to community and regional development through their work.
It is clear that employees such as these have created the Bank’s image as a safe, secure local bank through their steady,conscientious work. They tend to value rules and avoid risk, however, and they exhibit a pronounced hesitancy to takeup new challenges.
Aoki: The Bank’s officers and employees are typical bankers. They are knowledgeable, rational, and imbued with astrong work ethic. At the same time, however, they lack the requisite assertiveness to take up new challenges proactively.
Thanks in large part to the Bank’s current management policy of nurturing “unconventional” staff, the younger employees
seem to be working with considerable freedom of thought. Since these reforms have only just begun, however, boththe new and the more experienced employees are wondering to what extent they can break out of their characteristic
banker shells. Or so it seems to me.
Matsuzaka: I should add without reservation, however, that I feel this reformation of human resources is moving too
slowly, although I do perceive clear signs of progress in the right direction from the perspectives of cost management
and IT introduction. Cultivation of unconventional human resources is the most pressing issue for management, and if
we fail to time it right, we stand to lose out in the competition with other banks. At the same time, I do not think that any
reform of human character will occur simply because management says it should. I believe that employees will change
and grow only when they acquire new awareness through a process in which management strategically allocates people
with unique personalities to positions requiring them to respond to various unfamiliar issues. The banner of reform may
have been raised, but I am not at all sure that every employee has fully embraced change yet.
Vice President

Outside Director

Outside Director

Satoshi Ishida

Hidetaka Matsuzaka

Kozue Nakayama

Outside Director
Member, Audit and Supervisory Board

Director and Senior
Managing Executive Officer

Shuhei Aoki

Kazuya Yokotani

What kind of human resources does the Bank require?
Yokotani: We believe that the Group will be further differentiated by cultivating personnel with the ability to realize
customers’ goals by consulting with them about the real concerns particular to their organization, cooperating with them

Nanto Bank’s human resources development from the outside directors’ perspective

in making decisions, and working with them toward a final resolution.
We also recognize a limitation in our management stemming from the fact that engaging in rule-based banking

Ishida: Four years have passed since I came to Nanto Bank. During early courtesy visits to local customers, I received aalone will not broaden employees’ perspectives beyond the banking business. The process of cultivating more

distinct impression that the Bank’s executives and employees had earned these customers’ genuine trust. I soon came

executives and employees with broad perspectives must

to view this trust as the single most important asset differentiating the Group from others, and as convincing proof thatbegin by systematically assigning personnel to branches

its executives and employees have consistently exhibited a sincere commitment to the community and its customers

outside the prefecture, conducting personnel exchanges

throughout its long history.

between branch offices and headquarters, and transferring

When I turned my attention to the Bank’s internal organization, on the other hand, it struck me that the officers andemployees had formed a homogeneous group, with a resulting rigidity in their organization. Considering today’s rapidly

President (Representative Director)

Takashi Hashimoto

employees to Group companies.
Some employees may no doubt wonder exactly whatchanging business environment, I was concerned that it would be difficult for a bank with a homogenous staff and a rigid

they should do to become unconventional, or to acquire theorganization of this kind to continue addressing the various issues confronting customers successfully in the future. We

requisite skills for consulting sales.

have responded by making cultivation of unconventional human resources the core issue of our business strategy andimplementing a range of other measures

I would like to ask you all what specific skills you think
we should expect our human resources to possess?

Human resources development does not take place overnight. Today, I would like to hear how you, as outside
directors, evaluate the Bank’s human resources?

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President’s Message
See page 4 for details.

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5

22 Nanto Report 2023, the integrated report of Nanto Bank

Nanto Report 2023, the integrated report of Nanto Bank

Roundtable Discussion with the Outside Directors
See page 22 for details.

23About Nanto Bank

Our Shared Vision

Developing Human
Value Creation by theGovernance Supporting Our Consolidated Financial
Resources for Value Creation Group’s Human Resources Proactive Human ResourcesStatements

Strategies
and resources
allocation

Performance

New graduate/career recruitment Recruitment of human resources who share our Group’s Philosophy
Nanto Bank is committed to developing a working environment that adequately rewards employees with a passion for community
development and willingness to improve their capability and value. We seek to imbue our personnel with our Management
Philosophy and Vision, and to encourage them to play active roles in our various Group companies.
At the same time, we envision a reduction in employee workloads and a natural decrease in our employment rolls as we expand
the application of digital technologies and other new approaches. This makes it especially important for every individual staff member
to achieve a high performance level, and for all our Group companies to shift their human resources to high value-added operations
by adopting the so-called “smart work” style and digital technologies to improve their operating efficiency and productivity.
To meet the growing demand for more enhanced employee knowledge and skills in every field of business, the Bank is seeking
to reinforce recruitment of highly specialized personnel through new graduate and career hiring, as well as through Group-wide
human resources development and personnel exchanges.

New graduate recruitment
All our Group employees are growing
toward their goals and participating
actively in a variety of fields.

Frank roundtable discussion among young employees

Voices of 50 Nanto Bank personnel
Available on
our website.

Number of new graduates hired
Female

Male

85
55

123

(Persons)

95
60

80

30

35

43

2021

2022

2023 (Fiscal year)

Recruiting more mid-career hires

Number of mid-career hires

We are strengthening recruitment for mid-career positions
through the use of both recruitment agencies and direct
recruiting and by increasing the number of open positions.
Efforts to revitalize our organization include hiring promising
personnel with advanced expertise and an ability to make an
immediate impact in the sales arena.

3
2021

I intend to apply my experience andexpertise as an attorney fully in my work.

I intend to leverage my experience as
an alumnus of several companies.

In my previous position at a cooperative financial
institution, I worked in the corporate planningand general affairs departments, where I was
responsible for compliance system development
and personnel and labor affairs. The experienceand expertise I acquired there are extremely
useful in my current position, where my
responsibilities center mainly on legal andcompliance matters.
As a regional financial institution, Nanto
Bank feels a strong responsibility for pursuing
regional economic development. I find it highly
rewarding to work as a member of a bank like
this, which has earned the trust of regionalcustomers over its long history. I hope to
expand the scope of my work
gradually in the future withthe goal of playing the kindof role that is expected of afinancial institution, including
consulting and solution
provision, by drawing
on my expertise in thelegal, labor, tax, andCompliance Control Division
other fields.

After joining Nanto Bank upon graduation in
2009, I worked at other regional banks andcompanies before returning to the Bank lastyear.
I believe that my experience working
at multiple companies has broadened mythinking and perspectives by exposing me
to a varied range of values and corporate
cultures, and that the personal connections I
established through those experiences havebroadened the scope of information andadded value I bring to my work.
In my current position as a corporate
sales representative, I work closely withbusiness owners to share and solve theactual issues facing them. I plan
to continue making the mostof my experience to provide
a wide range of solutions.

Department Chief

Yoshihide Sawa

Previous jobs

10 (Persons)Osaka-chuo Branch

Yousuke Sakai

2022 (Fiscal year)

NumberRegional banks

4

Financial firms

1

General companies

4

Attorneys

1

I am committed to providing
management support based on myprevious experience.
My responsibilities in my previous position ata regional bank primarily involved providing
management and financial support for
distressed corporate clients. I am currently
expanding the scope of my work to include
preventative management support forcustomers whose businesses are deteriorating,while continuing to offer the types of initiatives
I provided in my previous work.
I also participate in a cross-organizational
project team for customers who are
considering business expansion or renewal,
while supporting their projects and engaging
with them in a companionable
manner.
In the future, our teamwill further deepen our
cooperation with others to
expand the range of added
value we can provide
and make greateruse of the Bank’s
consulting function Examination Department Business
Revitalization Officefor the benefit of
Department Chiefthe community.
Takeshi Morimoto

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19

Developing Human Resources for Value Creation

Cultivating a Healthy Corporate Culture with Participation of Diverse Human Resources
Cultivating “Unconventional” Human Resources
Career development and training Helping employees improve their skills and build on their experience to provide added value to customers
Reinforcement and systemization of consulting sales
Individual customer sales

Overview

Corporate sales

Efforts to improve the rate of participation in transactions and breadth of transactions throughBranch managers
and executives practical training meetings
Reenforcement of sales structures to comply with FD and compliance requirements
General public sales Increase in total asset sales, including real estate sales
representatives Enhancement of sales skills conforming to FD and compliance requirements
Younger staff

Overview

Continuation of consultation training (for new branch
Branch managers managers)
Implementation of practical consulting training
Corporate sales Continuation of practical skills training
representatives Video distribution of consulting case studies

Acquisition of fuller knowledge of sales regulations and administrative procedures related toassets under custody
Upgrading of proposal capabilities through acquisition of home loan knowhow (L-Plaza training)

Younger staff

Early acquisition of corporate sales skills
Strengthening of cooperation with guarantee companies

Developing growth opportunities
Main
initiatives

Increased number of secondments
Dispatching trainees
Exchanges among (1Groupto a localcompanies
company, 1 to a regional government)

We promote the growth of young employees by dispatchingthem to external companies/institutions where they can acquire
management literacy and other skills.
We also actively promote secondments within the Group(5 domestically, 3 overseas)
to provide opportunities for acquiring specialized skills.
P ersonnel seconded to otherorganizations in their forties (2)Exchanges among Group companies (3)(1 to a local company, 1 to a regional government)(Seconded full-time directors, 3)

Main
initiatives

 upport for acquisition of qualifications thatS
contribute to problem-solving
Training to strengthen logical thinking skills, joint
training with other companies

We encourage the acquisition of qualifications that contribute toproblem-solving through the provision of learning opportunities
such as preparatory courses to help employees acquire specialized
knowledge to respond to customers’ diverse values (varied needs).
We offer a variety of training programs to help employees
improve their thinking skills, acquire new perspectives throughexposure to diverse cultures and values, and expand their horizons.
Number of personnel with qualifications related to vitality creation(1 to a local company, 1 to a regional government)

1,000Trainees dispatched (8)
458

559

601

2021

2022

(Persons)

Interimtarget(5 domestically, 3 overseas)(5 domestically, 3 overseas)(End March 2023)

2020

2024 (Fiscal year)

full-time directors,
3)
I find it rewarding to(Seconded
participate
in management
decisions in(Seconded full-time directors, 3)close cooperation with management.

Seeking growth as a venture capitalist contributing tocommunity revitalization.

My colleagues and I at Toyo Screen Kogyo Co., Ltd., to which I was
seconded from Nanto Bank, are working to establish a rewarding work
environment by focusing on "our people" as a management resource.
Most recently, we organized a management plan presentation designed
to unify the various vectors within the company. I now hope to apply
experience I acquired working for the Bank’s labor union to help
construct a personnel evaluation system here. My efforts at Toyo Screen
have a greater impact on the direction of the company than they would
at a large company. I am able to participate in management decisions inclose proximity to management, a situation I find extremely rewarding.
At the same time, I have observed major differences in thecorporate culture and scope of individual employees’ work here. The
general affairs work I am currently responsible for is a daily learning
experience.
When I return to the Bank, I plan to make use of
the knowledge and know-how I gained through mysecondment to develop as a banker who can relate
closely with regional customers by implementing
solutions to the problems and issues they face.

I am currently employed as a trainee at XTech Ventures, an independentventure capital firm that invests in seed funding and early-stage support
for startups.
My work as a venture capitalist, investing in newly establishedstartups and supporting their business growth following the investment,
requires me to view companies from a completely different perspectivefrom a banker’s. We refer to financial information when making
investment decisions, but because seed and early-stage startups have
limited track records in terms of sales and profits, we have to makeinvestment decisions based on our assessment of the entrepreneur's
character, the marketability of the business, its growth strategy, and its
superiority.
After returning to the Bank, I hope to employ my investment
expertise, my know-how in working cooperatively to support businessgrowth, and the network I have cultivatedduring my secondment to contribute to regional
revitalization by providing full-scale support forentrepreneurs who are considering starting abusiness in Nara Prefecture.

Section Chief, Management Division Takashi Kawasaki
Seconded to TOYO SCREEN KOGYO CO.,LTD.
Manager, General Affairs Department

20 Nanto Report 2023, the integrated report of Nanto Bank

Nanto Capital Partners Co., Ltd.

Naoya Yamamoto

Trainee dispatched to XTech Ventures, IncAbout Nanto Bank

Our Shared Vision

Developing Human
Value Creation by theGovernance Supporting Our Consolidated Financial
Resources for Value Creation Group’s Human Resources Proactive Human ResourcesStatements

Strategies
and resources
allocation

Friendly work environment Initiatives to improve work styles and retain staff

PerformanceSee page 58 for details.

Full realization of a variety of leave programs

Expansion of childcare support systems

We are pursuing creation of an environmentthat incorporates various types of leave,
including paternity leave and family support
leave, so that employees can make fulluse of their planned leaves, consecutive
holidays, and summer and winter vacations.

We are expanding various childcare support systems
to make it easier for employees to seek careeradvancement while balancing work and child-rearing.

P ercentage of women in management
positions (above the rank of section chief)
(%)

20.0

Paternity leave system Expanded family support leave system
Fertility treatment leave system Expanded child nursing care leave system
Expanded period during which employees can benefit from childcare support
programs such as shorter working hours

14.3
2021

14.8
Target for 2028: 20%

2022

2028 (Fiscal year)

Diversification of human resources Responding to increasingly complex and varied customer issues by increasing the number of staff with diverse values
Promoting gender equality and other diversity initiatives
Nanto Bank is working to raise awareness and develop systems that enablea diverse range of human resources, including women, to play an active role.
We are pursuing initiatives to achieve a balance of work withchildcare, including the introduction of paternity leaves.

Promoting a subsidiary business system
Acting from a belief that diverse experience, advanced expertise and skills,
personal connections, and networks acquired through side-business activities
conducted in addition to employees’ banking responsibilities are indispensable, wehave established an environment that allows employees to engage in side jobs.
Eligible side jobs
Qualification-related: Lecturing,translation, interpreting, consulting, etc.
Internet-related: Web design,
programming, YouTuber, etc.
Others: Sales of handcrafted products(ornaments, paintings, etc.), musicalactivities, etc.

Participants in the side job program(Persons)

19

18

Contributing to regional revitalization through employee participationin second jobs employing their qualifications.
In my side job, I take advantage of my qualification as an SME diagnostician to undertake
preparation of various business plans and other projects introduced by other diagnosticians and
SME support companies in Japan.
This side job enables me to interact with people outside the Bank, and to work on projects
involving unique local industries in various regions of Japan. It is stimulating work providing
rewarding growth experience that introduces variety into my daily life and adds to my store ofknowledge.
I try to make use of this experience in my main business, not only from abanker’s point of view, but also as a means of adding a certain amount of depth
to financial services, such as by sharing and solving problems from the businessowner’s viewpoint.
I hope to continue this side business with the understanding andcooperation of everyone concerned, and to contribute to
Kouriyama Branch
Assistant Manager
revitalization of the region in any way I can.

Ryuta Doi

2021

2022 (Fiscal year)

Employment of personnel withdisabilities
In August 2018, Nanto Bank established
Nanto Challenged Co., Ltd. as a wholly
owned subsidiary committed to promoting
employment of people with disabilities bycreating environments in which they canenjoy safe, rewarding work experiences.
In February 2019, the new company
was certified as a special-purpose subsidiary.

I apply specialized skills in my work.
I have been employed since 2018 by my current company, where I am responsible for conducting data
entry and producing business cards for all Group employees. Since I have advanced computer skills, I
entered the Word Processing event in the National Skills Competition for the Disabled (associated with
the Abilympics) to test my skills against others. Last year, my fourth year of participation,
I took home the gold medal I had set my heart on. In preparing for the competition, I
had continued working hard to hone my skills after work in the evenings by attending
computer classes twice a week.
When I won the gold medal, everyone around me was as happy as if they had won
it themselves. I want to continue challenging myself in a variety Nanto Challenged Co., Ltd.
of fields by participating in friendly competitions.
Mei Antatsu

Evaluations to make the most of human resources Accept and evaluate staff with viewpoints and ideas different from your own.
Centralization of human resources information
Deployment of a talent management system
We have introduced a talent management system for purposes of centralizing theconsolidation, accumulation, and visualization of personnel data and implementing strategic
personnel policies (recruitment, training, assignment, and promotion) based on the data.
The system assesses the qualifications, experience, and abilities of employees
comprehensively, and optimizes our deployment of human resources by assigning the right
personnel to the right positions.

Current
situation

Personnel information system

MS Excel, MS Word

Basic information Work experience
Personnel appraisal Transfer history

Branch inspection reports
Goal-setting

Paper-based

Personnel management information
Recruitment entry sheet,personal history

Independent management / collection (inefficient)

Afterintroduction

Aptitude
test

Talent management system

1-on-1
information

Basic information
Personnel appraisal
Branch inspection reports
Goal-settingWork experience
Transfer history
Personnel management information
Recruitment entry sheet, personal
history

Questionnaire
information
Other
qualitative
information

Centralized management + efficient new information collection system

Capable human resources recruiting system Revisions of various personnel systems currently under consideration (to be implemented in January 2024)
System revisions under consideration
Establishment of career paths to accommodate
varying work styles
Attainment of consistency in roles,
contributions, and compensation

Elimination of homogeneity and uniform
thinking among employees
Promotion of women's activities; job
development for older employees

Objectives of personnel system revisions
Realization of work styles and career paths suited to personnel with diverse values and skills
Diversification of human resources to include more women and older employees
Realization of role-, responsibility-, and contribution-based incentives and compensation

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