November 16, 2020－Financial Results for the First Half of FY2020 ending March 31, 2021
Main Questions and Answers
Q. How have you communicated the self-evaluation of the current financial results to the Bank’s executives andemployees? Also, how do you think of issues and risks based on financial results?
A. The current fiscal year began in a challenging environment with social turmoil due to the pandemic ofCOVID-19. However, we have continued business by split work and have been sincerely supporting
customers through loans, etc. As COVID-19 has somewhat converged and we have resumed active sales, wehas responded to customer needs related to financial products sales and advisory services, etc. I
communicated that financial results are the result of efforts by executives and employees even in COVID-19.
The challenge is to respond to future environmental changes securely due to the impact of COVID-19.
Q. How will you strengthen and accelerate the structural reform in the future based on the impact ofCOVID-19? Compared to the thinking before COVID-19, what changes have been made from theperspectives of channel strategies such as branch, working styles, the way organization should be and DX?
A. Digital Strategy is a pillar of the medium term management plan before COVID-19 and it will be accelerated
in consideration of the impact of COVID-19. The new headquarters office building is adopted a free address
office system and equipped free spaces which staff in various departments can easily communicate inaccelerate digitize. In addition, we set out the moonshot goals in the pandemic of COVID-19 and aim toprovide "Best apps" and "Best corporate portal," and to create system that centralize information scatteredacross various departments to obtain the high valuable information "anytime," "what you want," and "in what
you want". Due to the impact of COVID-19, the number of customer visiting branch is declining, so we will
review the number of clerical staff in line with the current situation and allocate the staff that is made byreviewing to the sales representative. In terms of branch strategy, we have been reducing personnel andconsolidating branch in mature regions up to the present time. In April, Tateyama Area Sales Office wasnewly established in Tateyama area and the area collaboration system was built. It enabling it toaccommodate staff within the area and work on regional revitalization throughout the area. The Tateyama
area achieved its first half of FY2020 target and got results in sales promotion, because each branch’s generalmanager, such as the Shirahama branch, was set up to follow up their own customers while they were
stationed at the Tateyama branch at the same time reducing the number of personnel. We would like toconsider expanding it to other areas in the future. We undertake these initiatives to improve overall
productivity. Following the impact of COVID-19, we will change the business model to become prominentbank in digital.
Q. Please tell us about the possibility of applying the BOJ’s special current account system and the timing of its
achievement.
A. We don’t think applying the system by merger requirement at present. Regarding applying the system withOHR or cost reductions requirement, we work on actively toward applying the system and intend to further
improve operational efficiency. If the medium term management plan is realized, we expect to meet therequirement and advance ahead of the schedule of the medium term management plan steady.
Q. Is there any difference between the absolute amount of gross profit per digital customers and non-digital
customers, while the composition ratio of digital and non-digital gross profit is disclosed?
A. Digital customers include many of the Bank's core customers such as housing loan customers. The grossbusiness profit per digital customers is 1.6 times more than that of non-digital customers and it is highlyprofitable. We will continue to create highly profitable digital customers who will be our base customers by
expanding the functionality and convenience of the apps, etc.
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Q. After the medium term management plan was announced, the environment changed dramatically due to theimpact of COVID-19. Whether net interest income is expected to fluctuate strongly or weakly compared tothe initial medium term management plan because of changes in balance and interest rates, etc.
A. As the large number of loans related to COVID-19 executed in the latter half of the first half of FY2020, thecontribution to net interest income in yen currency is expected to increase further in the second half ofFY2020. With regard to foreign currency, we suspect that the decline in net interest income will not continue
because we normalize market operation in the second half of FY2020. Net interest income for the first half of
FY2020 as a whole decreased by ¥1.4 billion compared with the corresponding period of previous fiscal year,
but only for the second half of the fiscal year, it is expected to increase by ¥0.2 billion compared with thecorresponding period of previous fiscal year. As of September, net interest income per day on loans in yen
currency increased by ¥1.7 billion on an annualized basis compared with the corresponding period ofprevious fiscal year. Considering that the majority of loans related to COVID-19 are long-term loans, it isexpected continuously to contribute to an increase in net interest income in yen currency. The amount ofincrease in net interest income in yen currency was expected to increase by ¥2.4 billion in three years at thestart of the medium term management plan, but we think there is a good chance that it will increase further.
Net interest income in foreign currency decreased in the first half of FY2020 not only due to the volumefactor, but also we conducted cautions market operation on funding and longer-term funding with highinterest rates increased because the market was unstable by the pandemic of COVID-19. From the beginningof the second half of FY2020, it has returned to normal not only investment but also funding, and we aim toincrease by ¥1.9 billion in the three years that it had planned at the beginning of the medium term
management plan. As a result, we think there is a good chance that net interest income in the final year of themedium term management plan will be stronger than the projection of an increase by ¥4.3 billion in the threeyears that were initially planned in the medium term management plan.
Q. Can I expect a total return ratio at the same level as the return in the past?
A. With the pandemic of COVID-19 continuing worldwide and the third wave concerning domestically, we arerefraining from announcing the future returns policy. The Bank's policy of "return profits to shareholders bybalancing growth-investments and a sound capital base" remains unchanged, but we would like todetermine the future return policy while taking into account the progress in results and the accumulation ofrisk assets.
Q. If the share buyback is postponed in the current fiscal year, can you consider making more than expected theamount in a single fiscal year from the next fiscal year by turning the share buyback amount that it has
postponed this fiscal year into the next fiscal year?
A. If we achieve V-shaped recovery at the financial results for the next fiscal year compared to the current fiscalyear, there is a possibility that we will make the extra share buyback, while we will be look at theaccumulation of capital and risk assets.
Q. What do you think the risk that net credit costs will be higher in the next fiscal year compared to the current
fiscal year if the impact of COVID-19 continues?
A. Even if the impact of COVID-19 continues in the next fiscal year, net credit cost related to COVID-19 willbe ¥8.3 billion and increase by only ¥3.4 billion from the ¥4.9 billion forecast in the current fiscal year. The
amount of upside in net credit costs can be suppressed to a certain extent. The Financial System Report
assumes that the credit cost ratio of domestic banks will remain high in the next fiscal year and next fiscalyear. However, we believe the Bank doesn’t correspond this scenario considering the business base and thecomposition of borrowers' industries.

2Q. How do you think the risk of a "cliff in three years" while repayment and interest payments on loans withguarantee of the Associations begin three years later?
A. Three years later, the noninterest-free period expires, but we don't think that this will cause the customers'
funding to suddenly deteriorate. Among customers who borrowed with guarantee of the Associations related
to COVID-19, 85% of them are with an application amount of less than ¥50 million and many of them are in
a condition where additional borrowing is possible. We believe that it is possible to continue to provide
financial support in the future.
Q. Are COVID-19-related loans to corporations transferred to capital loans in the future?
A. Credit risk will increase if it transferred to capital loans, but consultation is limited at this point and thetransfer to capital loans is not expected to proceed significantly. We establish the system to support
customers who have suffered financial damage, but we do not think there are so many such customers.
Q. Are you considering a transition to a holding company?
A. We believe that there are not so many tax and regulatory advantages. Since there is a large difference in thescale of profits and other factors between the Bank itself and its subsidiaries, we think that it is more efficient
to keep them as subsidiaries of the Bank itself and that it also has advantages in terms of governance. Insteadof a holding company, TSUBASA Alliance Co., Ltd. was established by the equal investment by eachTSUBASA alliance bank. In the company, AML-center was established as a business related to money
laundering and preventing terrorist funding. Going forward, TSUBASA Alliance Co., Ltd. will continue toplay a role of a platform to consolidate the businesses and functions common to each bank with the aim offurther efficiency and sophisticated collaboration measures.
Q. How do you think the factors behind underperformance compared to the initial financial plan and how will it
cover them in the future, while the plan was bullish? Net fees and commissions incomescontinue tomake a downturn in the future, while it has been declining substantially?
A. In the first half of FY2020, while net fees and commissions incomes decreased due to the impact ofCOVID-19 on financial products sales, net fees and commissions incomes related to corporate solution andloans were robust. As a result, consolidated ordinary profit progressed 97% of the original projection. In thefull-year plan, although the breakdown of the fees plan was changed according to the progress in thefinancial results and the environment, the projection for consolidated ordinary profit has been remained at
the initial plan of ¥48.5 billion. If the downturn in net interest income in foreign currency subsides, overall
net interest income is expected to exceed the forecast due to an increase in COVID-19-related loans. Net feesand commissions incomes related to corporate solution can also be expected to improve as a result ofconcrete projects in the second half of FY2020 and the strong performance of syndicated loans withTSUBASA alliance, Chiba-Musashino alliance, and Chiba-Yokohama partnership. Taking these factors intoaccount, we believe there is a reasonable possibility of achieving its full-year projection.
Q. What is the view of the BOJ’s special current account system?
With respect to the level of OHR, we will continue to increase gross business profits and reduce expenses inorder to meet the requirements of the BOJ. In the personnel plan, we will proceed with the reallocation to theprofit division and strive to reduce OHR level by 4% in three years.

3Q. In the cashless business, how much participation of TSUBASA alliance can be expected?
A. It is in discussions with each bank and several banks has been considering concretely. Visa Debit is named"TSUBASA Visa Debit Card" and we would like to encourage many banks to participate. TSUBASA
cashless payment platform is also available to banks other than TSUBASA alliance. It will gradually expand,
while TSUBASA alliance banks begin handling each time. We want you to look forward to it. There aresome banks that have already dispatched trainees to the cashless business of the Bank, so in the future wewill proceed toward realization.
Q. What is Chiba Bank's policy of overseas network while some other banks have closed their overseas offices.
Will you expand your current network?
A. We have been continuing to support our customers even in the pandemic of COVID-19 and we will continue
to do so in the future in our three branches in New York, London, and Hong Kong, as well as in our three
representative offices in Shanghai, Singapore and Bangkok. We will consider opening new bases asnecessary, as looking at the status of trade-related agreements and others.
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