ANNUAL REPORT

2023

Profile
Musashino Bank is the only regional bank whose operationalbase consists of Saitama Prefecture in the Tokyo metropolitan
area. The prefecture lies immediately to the north of Tokyo,
and many of its residents commute to work in the capital.
Currently, 7.33 million people (estimated) live in Saitama,
making it the country’s fifth most populous prefecture after

Tokyo, Kanagawa, Osaka, and Aichi. Since its establishment in 1952, Musashino Bank has been one of Saitama
Prefecture’s core financial institutions, and has played a majorrole in supporting the development of the regional economy
and local industries for over 70 years.

Corporate Philosophy“Working in harmony with the local community it serves”

To contribute to the prosperity of the local community and to secure growth and development in partnership with the region.

“Maintaining a deep respect toward customers”

To engage in bold management that anticipates change while providing the highest-quality services throughout the organization
as a whole.

Bank Data (non-consolidated basis, as of March 31, 2023)

Musashino Bank Group (subsidiaries)

Head Office:10-8, Sakuragi-cho 1-chome, Omiya-ku, Saitama

Home page:https://www.musashinobank.co.jp

Established:

March 6, 1952

Networks:

Number of branches: 99 (Saitama Prefecture: 93 [of which
2 are sub-branches], outside Saitama Prefecture: 6)Name
The Bugin General Lease
Co., Ltd.
The Bugin Guarantee
Co., Ltd.
The Musashino Card
Co., Ltd.

Number ofmortgage loan centers:

8

Employees:

1,920

Total assets:¥5,309.1 billion

Deposits:¥4,906.9 billion

Loans:¥3,921.6 billion

Common stock:¥45.7 billion

Capital adequacy ratio:

9.01%

Number of correspondent111
arrangements:
Issued common stock:33,805 thousand sharesLine of Business
General leases, installment-payment
services, auto leasing services
Loan guarantees for individuals

Credit card business (JCB, VISA),
loans and loan guarantees related tocard services
The Bugin System Service Development, sale and maintenanceCo., Ltd.
of computer systems
The Bugin Economic
Research into the regional economy,
Research Instituteconsultation, information services,Co., Ltd.
and holding of seminars
The Bugin CapitalManagement support for ventureCo., Ltd.
businesses
The Musashino Harmony Outsourcing of operational businessCo., Ltd.
The Musashino Mirai
Regional trading company business
Partners Co., Ltd.

Contents
1 Message from the President
6 Financial and Non-Financial Highlights
10 Musashino Bank’s Value Creation Process
12 Long-term Vision/Medium-term Management Plan
13 Operational Base of Saitama Prefecture/Group Strategy
14 Providing SME Management Assistance15	Contributing to the Local Economy/
Initiatives for Regional Revitalization
16 Sustainability Management Initiatives
19 Practicing Human Capital Management

21 Communication with Stakeholders
22 Corporate Governance23 Compliance
24 Risk Management
25 Consolidated Balance Sheets
27	Consolidated Statements of Income andConsolidated Statements of Comprehensive Income
28 Consolidated Statements of Changes in Equity
30 Consolidated Statements of Cash Flows
31 Directory

Forward-Looking Statements: This annual report contains forward-looking statements regarding the Bank’s financial condition and results of operations. These forward-looking
statements, which include the Bank’s views and assumptions with respect to future events, involve certain risks and uncertainties. Actual results may differ from forecasts due to changes
in economic conditions and other factors.

Message from the President

Continuing to Grow Together
with Communities
for inbound tourism and consumer spending. In May 2023,
COVID-19 was reclassified as a Category V infectious
disease. This has hastened the transition from emergency tonormalcy, leading us to the present.
In this environment, fiscal 2022 was the final year of theBank’s four-year Medium-term Management Plan “MVP70.” In order to fulfill our responsibility to support the com-

Kazumasa Nagahori
President
Business Environment in Fiscal 2022
Looking back at fiscal 2022, the year ended March 31, 2023,
Japan experienced its seventh and eighth waves of COVID19 infections, which spread rapidly. Furthermore, the effects
of international political and economic turmoil, such as
the protracted Russia-Ukraine conflict, and rapidly rising
prices centered on raw materials and energy, had profoundeffects on the daily lives of Saitama Prefecture residents andcorporate business activities, regardless of whether thoseeffects were felt directly or indirectly.
Since the beginning of 2023, people have become more
hopeful that the economy and society will return to normal.
Positive trends have emerged, such as a resurgence in demand

munity, as we looked ahead to the advent of a post-pandemic
society, we fully served our customers and local communities
as a reliable partner and focused on supporting the corebusinesses of each local company, while striving to identify
needs and solve issues in support of the life planning of
every customer. As a result of these measures, the balances ofdeposits and loans remained on a firm growth trajectory. On
the profit front, net income on a non-consolidated basis was¥10.3 billion, surpassing our ¥10.0 billion target laid out inthe Medium-term Management Plan.
Regional financial institutions are being called upon toestablish sustainable business models that help to revitalize
the economy and society by fulfilling even more financial
intermediary functions and practicing fiduciary duty. In
addition, they must make unceasing efforts to further improve
management soundness and transparency, which are preconditions for sustainable business models.
The global economic outlook has remained uncertain
mainly due to factors such as inflation in Europe and the
U.S. and the monetary tightening policies implemented in
response to inflation, as well as the worsening Russia-Ukraine
conflict and the rising geopolitical risk associated with China
and North Korea.
Meanwhile, in Japan, against this backdrop of international circumstances, a seamless shift to a post-pandemic
society has become an urgent priority amid soaring prices fordaily necessities and energy.
Saitama Prefecture, the Bank’s local market, has hurtled
into an era of population decline since 2022. Combined1with the fact that the population is aging at the fastest ratein Japan, Saitama Prefecture is standing at a major turning
point. It is now essential for us to develop and implement aunique growth strategy as a regional financial institution.

Formulating the New Long-term Vision“MCP—Musashino mirai-Creation Plan—”
In 2013, we formulated our Long-term Vision “MVP(Musashino Value-making Plan)”—“the number one bank in
the region that creates value in Saitama”—in order to achievesustainable growth together with local communities. To
realize this vision, we have been implementing medium-term
management plans that span 3 time periods over a 10-year
timeframe.
And in March 2023, we formulated our New Long-term
Vision “MCP (Musashino mirai-Creation Plan)”—“Bringing
together diverse value to create Saitama’s future with theregion’s number one solutions”—as our business roadmap forthe next 10 years.
As the business environment becomes increasingly
complex, our vision establishes the ideal profile we will needto stay true to the reason for our existence: to contribute to
the sustainable growth of the economy and society as a bankthat is essential to local communities.
In the process of formulating the vision, we asked customers and other stakeholders about their expectations andrequests for the Bank, and for the first time in 10 years, weorganized a study group comprising primarily younger bank
employees. We studied issues and held lively discussions froma variety of perspectives.
Guided by the two basic policies of “Evolve into a partnerthat surpasses the expectations of communities and customers” and “Maximize the capabilities of the organizationand employees,” we will focus on solving customer issues
and fostering community vitality through financial andnon-financial services. In addition, we will endeavor to build
a highly resilient organization, develop a high level of specialization and provide a variety of work styles to maximize theabilities of each employee.

2

Overview of Medium-termManagement Plan
“MCP 1/3 (One-Third)”
In April 2023, the Bank started the Medium-termManagement Plan “MCP 1/3” as the first stage for realizing
the Long-term Vision “MCP.” We have positioned thisstage as a period for fully serving our customers and local
communities, while laying a solid foundation for the future
by enhancing the diversity of the organization and theautonomy of employees.
We will strive to further strengthen our touchpoints
with customers and create new services through intensive
investment in digital and human capital based on twothemes: “Grow together with communities and customers
by integrating the real and digital” and “Empower diverse
human resources to flourish based on mutual acceptance ofmany and varied values.” In addition, efforts will be madeto develop human resources who have advanced proposal
generation and problem-solving capabilities.

Initiatives for Corporate Clients andIndividual Customers
The Bank will provide optimal problem-solving proposals
with a diverse lineup of products and services and a high levelof specialization premised on a thorough understanding ofcustomers.
For corporate clients, we will further enhance our solutions proposal menu to include consulting and recruitment.
Furthermore, we will focus on providing support basedon the growth stage of each corporate client, through suchmeans as seamless business succession and M&A.
For individual customers, we will redouble our commitment to practicing fiduciary duty. We will also focus onpriorities such as enhancing proposal generation capabilities
that contribute to long-term, stable asset formation andaddressing inheritance and asset succession needs leveraging
trust functions.

Regional Revitalization Strategy
The Bank will implement distinctive measures in partnershipwith local governments, universities, and local companies, inorder to achieve regional revitalization unique to Saitama.
In June 2023, we initiated the Musashino

Agri-Innovation Project, which carries out rice cultivation
within Saitama City. By engaging in hands-on rice cultivationas part of this project, we will gain knowledge and expertise,with the goal of assisting in the resolution of agriculturalissues in Saitama Prefecture.
In this way, the Bank will use its platform forpartnership among industry, academia, government, and thefinancial sector to strengthen tourism and city promotion
initiatives, while continuing to concentrate our efforts on
discovering and creating local resources, such as the Minuma
Tambo “Wheat” Senary (Sixth-Order) Industry Creation
Project.

Digital Promotion Division, which was newly established inconjunction with the start of the Medium-term ManagementPlan.
We will work to further upgrade and expand oursmartphone app’s functions and enhance digital services forcorporate clients. At the same time, we will accelerate efforts
such as shifting to digital account opening and loan application processes.
Furthermore, we will actively take steps such as raising
the sophistication of customer proposals through the use of
AI and big data and strengthening the digital communication
platform within the Bank.

Digital Strategy

Practicing Human Capital Management

The Bank will utilize cutting-edge digital technology toengage with a sense of urgency in efforts to improve customer
convenience and satisfaction. These efforts will be led by theBased on the belief that human capital management is thesource of corporate value, the Bank has formulated theLong-term Vision “SOU” for promoting the success ofProfit attributable to owners of parent/
Net income

Dividend per share and total payout ratio(¥ billion)

(¥)

10.8
8.0

7.0

FY2019

8.0

9.0
7.3

FY2020

(%)

(%)

10.3
37.7%

8.3

FY2021

Trend in the equity ratio(Non-consolidated)

36.6%

36.2%
30.7%

FY2022

Consolidated
Non-consolidated

40

40

50

50

40

40

40

45

FY2019FY2020

FY2021

FY2022

Interim dividend
Total payout ratio

Year-end dividend

8.46%

8.54%

8.48%

8.13%

8.19%

8.11%

FY20209.01%

Foundationinternal ratingbased approach

Standardized approach

FY20199.44%

FY2021

FY2022

Consolidated
Non-consolidated* From fiscal 2022, the Bank changed its credit risk
measurement approach from the “standardized
approach” to the “foundation internal rating based
approach.”

Consolidated ROE

Consolidated core OHR (Over Head Ratio)
4.3%

3.4%

3.3%

FY2019FY2020

74.3%

3.6%

FY2021

FY2022FY2019

69.8%

68.6%

70.2%

FY2020

FY2021

FY20223

human resources.
We will focus on the development of professionals anddigital specialists with exceptional problem-solving skills,
while also bolstering our diversity and inclusion initiatives.
Moreover, we will concentrate on reforming various
systems, including the personnel system, as well as reskilling
employees and increasing their engagement.

Group Strategy
The Bank will foster even closer collaboration throughout theGroup, including The Musashino Mirai Partners Co., Ltd., aregional trading company we established in June 2022, withthe aim of maximizing synergies.
We will also work to expand business domains throughefforts such as creating a program to call for new businessideas.
With Musashino Mirai Partners, the Bank aims to solve
local issues through business and build a local ecosystem thatwill bring about a beneficial cycle for Saitama Prefecture’s
economy. Sai Hakken, a fee-based membership service forindividuals, and IBUSHIGIN, a purchase-type crowd funding site to support commercial value chains for businesses,
were launched in October, and both are gaining market
awareness and penetration faster than initially anticipated.
In August 2023, Musashino Mirai Partners opened a new
e-commerce website. In the future, it will continue working
to enhance services that benefit customers and communities
through such means as developing the Sai Hakken app.

Strengthening Sustainability Management
The Bank will work to continuously strengthen sustainability
management that will contribute to the creation of a sustainable regional economy and society under guidelines such as
the Musashino Bank SDGs Declaration and the Basic Policy
on Sustainability.
Through loans and consulting, which are the Bank’s corebusinesses, we will focus on encouraging sustainable corporate behavior, such as promoting decarbonization measuresby businesses. In addition, we will actively work to reduce theenvironmental impact of our business activities.
Regarding our response to the TCFD recommendations,
we are enhancing the disclosure of information to stakeholders, including increasing the precision of global warming
scenarios and estimating Scope 3 greenhouse gas emissions.

4

In the future, we will continue to strengthen the management
team’s commitment to the TCFD recommendations anddirect these efforts toward more effective global warming
prevention measures.
Apart from this, the Bank will strengthen initiatives that
help to enhance financial and economic literacy and address
the issue of child poverty, among other areas.

Toward Increasing Corporate ValueIn March 2023, the Tokyo Stock Exchange requested listedcompanies to implement management that is conscious of
the cost of capital and profitability based on the balance
sheet, and to disclose and implement specific actions to raise
their stock prices.
As a listed company on the Prime Market, the Bank willcontinuously enhance measures to improve its profitability
based on the balance sheet with a view to achieving a PBR of 1.
The Bank will strive to improve ROE through measures
including improving the RORA of lending and investment
divisions and raising the sophistication of credit risk management, along with achieving profit growth through steady
execution of each strategy laid out in the Medium-termManagement Plan as a matter of course. Concurrently, theBank’s policy is to achieve an optimal balance of financial
soundness, profitability and shareholder returns and to
consistently increase the total payout ratio.
Furthermore, we will endeavor to enhance shareholder
returns alongside efforts to increase ROE.
The Bank has declared an annual dividend for fiscal
2022 of ¥95 per share, following an increase in the year-end
dividend of ¥5. For fiscal 2023 (the year ending March 31,2024), the Bank is forecasting an annual dividend of ¥100
per share.
In addition, the Bank is striving to increase the total
payout ratio by conducting stock buybacks of up to ¥1.0
billion from May through August 2023.
The total payout ratio for fiscal 2022 was in the lower
30% range. We consider this level to be a bare minimum andwill strive to raise it higher.

Serving Customers and Communities
The Bank started in April 1952 as a regional bank headquartered in Omiya City (currently Saitama City). Responding
to expanding demand for finance as the post-war recovery
hit full stride, the Bank commenced business with eight
branches in Saitama Prefecture, aiming to contribute to thedevelopment of the prefectural economy. From that time up
to the present, the Bank has remained firmly committed toautonomous, independent management with the support ofits stakeholders.
Against this backdrop, the Bank received an administrative action (business improvement order) from the Kanto
Local Finance Bureau of the Ministry of Finance in June
2023, in accordance with Article 51-2 of the Financial
Instruments and Exchange Act. This was in connection withcircumstances in which an investor protection problem was
identified in relation to financial intermediary operations
involving solicitation and sales of structured bonds.
In light of this administrative action, the Bank submitted
a business improvement plan to the Kanto Local Finance
Bureau in July. Furthermore, in August, the Bank announced
improvement and recurrence prevention measures based on
an analysis of the incident’s root causes, taking into accountthe findings of an internal investigation. The Bank alsoannounced the actions taken against the individuals involvedin the incident.
The Bank extends its most sincere apologies to all parties
involved, including customers with whom it has business
relationships, for the tremendous inconvenience and concern
this situation has caused.

deep respect toward customers” are perennial themes for the
Bank. The Bank’s Founding Prospectus from the time of its
founding states that it will endeavor to be a Bank that truly
alleviates Saitama Prefecture’s financial difficulties and onethat is loved by its residents.
We believe that the process of establishing a corporate
atmosphere and culture is synonymous with efforts to placesuch a Corporate Philosophy and reason for existence at
the forefront of all officers’ and employees’ awareness andbehavior, and to embody these principles in our everyday
actions.
All officers and employees will make sincere efforts
to restore trust and will strive to conduct operations that
contribute to the sustained growth of customers andcommunities.
In closing, we ask for your continued support for andunderstanding of the Bank from the bottom of our hearts.

Kazumasa Nagahori
President

Currently, we believe that the Bank should give top priority to rigorously enforcing and instilling compliance, taking
this administrative action into account, in all aspects of its
activities, from bank management to day-to-day operations.
In addition, we believe that the Bank should take a fresh lookat its corporate atmosphere and culture and devote even more
effort than before to creating a corporate atmosphere andculture that embraces a true customer-first philosophy and isprimarily committed to contributing to the development oflocal communities.
The Bank’s Corporate Philosophy of “working in harmony with the local community it serves” and “maintaining a

5

Financial and Non-Financial Highlights
The Musashino Bank, Ltd. and Consolidated Subsidiaries Years Ended March 31, 2023 and 2022

Thousands of
U.S. Dollars(Notes 1 and 2)
2023

Millions of Yen (Note 1)
2023
2022

At Year-end
Total assets....................................................................................................
Deposits including negotiable certificates of deposit......................................
Loans and bills discounted............................................................................
Trading account securities and securities.......................................................
Total net assets..............................................................................................
Capital adequacy ratio (based on domestic standards) (%)............................

¥5,327,096
4,891,294
3,909,853
810,303
252,917
9.44¥5,486,283
4,781,100
3,841,638
735,266
250,554
8.48$39,894,376
36,630,675
29,280,708
6,068,322
1,894,084

For the Year
Ordinary income...........................................................................................
Ordinary expenses.........................................................................................
Profit before income taxes.............................................................................
Profit attributable to owners of parent...........................................................

¥   81,901
66,266
15,548
10,865¥   71,186
57,693
13,4219,001$   613,353
496,263
116,438
81,367

Notes: 1. In this annual report, Japanese yen (in millions) and U.S. dollars (in thousands) are indicated with fractions rounded off.
2. U.S. dollar figures have been translated at a rate of ¥133.53 to U.S.$1, the prevailing exchange rate as of March 31, 2023.

Deposits including negotiable certificatesof deposit

Loans and bills discounted

Trading account securities and securities(¥ million)(¥ million)(¥ million)

4,343,879

FY20194,657,956 4,781,100 4,891,294

624,188

FY2020

FY2021

FY2022FY2019FY2020Ordinary income

Ordinary expenses(¥ million)(¥ million)

81,901

6

3,571,715

3,789,948 3,841,638 3,909,853

67,852

71,418FY2019FY202071,186FY2021

FY2022

59,106FY2019FY2021

FY2022FY2019683,441

FY2020735,266

FY2021

810,303

FY2022

Profit attributable to owners of parent(¥ million)

58,611

FY202066,266

10,86557,693

FY2021

FY2022

8,066

8,022

FY2019FY20209,001

FY2021

FY2022Governance
Composition of the Board of Directors
Ratio ofoutside directors

Composition of the Board of Corporate Auditors

37.5% (3 out of 8 members)

Internal directors

Ratio of outside
corporate auditors

60.0% (3 out of 5 members)Standing corporate
auditors

Outside directors(As of July 2023)

Outside corporate
auditors(As of July 2023)

Environment
Greening activities

CO2 emissions(Tons)

6,724

2021.3

Subsidies provided
by the Musashino Green Fund public trust

6,596

6,550

2022.3

Total of

¥79.4
346

millionTotal ofenvironmental organizations
provided with assistance

2023.3(July 1992 to April 2023)

SocialCustomer base
Number ofcorporate borrowers

Support for customers’ core business activities

21,370 companies

20,871

21,009Start-up support

829 projects

1,180

21,370829
652

2021.32022.32,580 companies
2,580

1,958

358

Support forbusiness
succession

companies

2022.32023.32023.32021.3413

Support for
M&As

358

1,992
202

2021.32022.3

Solving issues such as business succession

Support for customers’ core business activities
Support fordeveloping sales channels

2021.32023.3companies

413

413

2022.32023.3283
1592022.32023.32021.37

Support for sustainable management

Support for sustainable management

Amount of sustainable finance executed

Support for formulating SDGs declarations¥188.6

相続関連支援

81

billioncompanies

Financing to solve environmental and social issues(Years ended March 31, 2022 through March 31, 2023)

Solving inheritance-related issues

Initiatives for regional revitalization

Comprehensive alliance agreementswith local governments

Inheritance-related support
836

843

(October 2021 to March 2023)

874

874

cases

Saitama Prefecture and16municipalities

Number of organizations participatingin the Regional Revitalization Consortium
2021.32022.3

Total of2023.3organizations

Promoting local attractions throughthe local newsletter “Bratte Series”

Crowd funded projects

11 volumes 12 regions

38

Number of copies issued

430,000

projects

copies(March 2007 to March 2023)

Developing specialized human resources(October 2022 to June 2023)

Developing specialized human resources

Number of professional qualification holders(1st grade Certified Skilled Workers of Financial Planning,
Small and Medium sized Enterprise Consultants,
securities analyst qualifications, etc.)

185

employees(As of March 31, 2023, Group-wide)8(As of March 2023)

Support for commercial distribution throughregional trading companies

Initiatives for regional revitalization

Over

163

(local governments, universities, companies, etc.)

Number of IT Passport qualification holders

1,062

employees(As of March 31, 2023, Group-wide)Promoting active roles for diverse human resources
Ratio of female managers

25.3%

Promoting active roles for diverse human resourcesChildcare leave acquisition rate for men

19.2%

104.4%

2019.32023.3External assessments of companies promoting active roles fordiverse human resources

Platinum Kurumin(Obtained in 2017)

Recognized under the Act on Advancement of Measures
to Support Raising Next-Generation Children(Year ended March 31, 2023)

External assessments of companies conducting
health & productivity management

Eruboshi2023 Certified Health & Productivity Management Outstanding Organization

Recognized under the Act on Promotion of
Women's Participation and Advancement in the Workplace

A program established by the Ministry of Economy, Trade and Industry (METI)
to recognize business enterprises that implement outstanding health and productivity management practices(Obtained in 2016)

Creating work opportunities for people with disabilities(Obtained in 2023)

Financial and economic literacy through“Musashino Mirai Academy”
Number of participants in programs
for junior high and high school students

Ratio of employees with disabilities(Started in November 2022)

2.43%

338

participants

Number of participants in programsfor elementary school students(2010 to 2022)(As of March 31, 2023, Group-wide)

Support for promotion of local culture and art

Classical concerts at elementary schools
within Saitama Prefecture

54

Total ofconcerts (June 2009 to June 2023)

Concerts for customers
Total of12

Total of924

participants

Regional communication and co-creation
Number of events held at M’s SQUARE,
a regional revitalization space at our Head Office(seminars, exhibitions, markets, etc.)

100

eventsconcerts (June 2007 to June 2023)(December 2021 to June 2023)

9

Musashino Bank’s Value Creation Process
As the environment both in Japan and overseas changes significantly, theBank will strive to capture the full potential of the Tokyo metropolitan area,
centered on Saitama Prefecture, which is the Bank’s operational base. Guided
by the Long-term Vision of “Bringing together diverse value to create
Saitama’s future with the region’s number one solutions,” we will establish asustainable management platform through investment in digital and humancapital, with the goal of continuing to grow as a bank that is essential tocustomers and communities.

Business

Capital deployed
INPUT

Awareness of external
environment surrounding
regional financial institutions

Financial capital• Growing solution revenue• Business model transformation
through digital technology• Accelerating initiatives for regional
revitalization• Creation of business opportunities
and entry into different industries instep with deregulation• Loan-to-deposit ratio at the top
level of the regional bank sector• Sound loan assets and capital
adequacy

Sales promotion system
Strategy for individual
customers

Human capital• Employees’ devotion and senseof mission toward communities• Human resources with strong
specialized expertise• Promotion of a diverse workforce,
including women• Social demand for practicing fiduciary
duty• Responsibility to be carbon neutral
and nature positive

Medium-term Management Plan
Grow together with communities and customers by• Seamless transition to a postpandemic society• Tumultuous economic conditions
both in Japan and overseas

Long-term Vision

Group strategy
Empower diverse human resources to flourish based

Digital strategy
Securities strategy

Social capital

Sustainability strategy• Operating in the Tokyo
metropolitan area, centered on
Saitama Prefecture• Branch networks with close ties
to communities

Saitama Prefecture• A continuously growing
customer base developed since
the Bank’s founding• Progress on urban redevelopment andthe establishment of industries•Arrival of a society with a declining
population• Population aging faster than any otherprefecture in JapanIntellectual capital• Quality and quantity of
information through networks
closely tied to communities• Ability to deliver diverse andsophisticated solutions throughbusiness evaluations

Musashino Bank
Sustainable Development
Goals Declaration
Vision for the Bank
(Key Areas)• Use of digital technologies thatfacilitate the creation of new
businesses and services

The Bank remains close to customers and10Value provided
Value provided

Business model
activities

OUTCOMEOUTPUT

Bringing together diverse value to create Saitama’s futurewith the region’s number one solutions“MCP 1/3”

A prosperous
future for Saitama
Prefecture

Shareholders andother investors• Increase shareholder value

integrating the real and digital

Strategy for corporate clients
Regional revitalization strategy
Channel strategy

Maximize customer
satisfaction by
improving theservice level andreinforcing customer
touchpoints

Local communities• Contribute to innovation forcommunities as a whole• Further promote thedevelopment of industry

on mutual acceptance of many and varied values

Human resource strategy
Alliance strategy
Management andadministration systems

Establish asustainable
management
platform throughinvestment in digitaland human capital

Corporate Governance as the Source ofSustainable Growth

Responding to Climate Change,
Maintaining and Improving
Biodiversity

Sustainable
Regional Economy

A Society in Which People Can Live
Their Own Way for as Long as They Wish

Customers• Increase the corporate valueof customers• Stable asset formation andsuccession

Employees• Diverse and highly fulfilling
work styles• Promote diversity• Create local employment

Global environment• Promoting decarbonization
through investment andfinancing• Store locations withconsideration for theenvironment and biodiversity

solves their issues, thereby achieving growth together with its customers.
11

Long-term Vision/Medium-term Management Plan
In March 2023, the Bank formulated its Long-term Vision “MCP (Musashino mirai-Creation Plan)” as a management guideline
for the next 10 years, and in April it started the Medium-term Management Plan “MCP 1/3,” which marks the first stage towardrealizing the Vision.

Long-term Vision “MCP (Musashino mirai-Creation Plan)”

Bringing together diverse value to create Saitama’s futurewith the region’s number one solutions
Two basic policies to realize the Vision
Basic
PolicyEvolve into a partner that surpasses
the expectations of communities
and customers■ Provide value that surpasses expectations by being
deeply involved in customers’ daily lives and businesses
from both financial and non-financial perspectives,and by remaining steadfastly committed to solving theirproblems■ Achieve a prosperous future by assisting communities insolving underlying issues and supporting thedevelopment and growth of attractive communities

Basic
PolicyMaximize the capabilities ofthe organization and employees■ Establish a highly resilient organization that can addressenvironmental changes as a financial institution essential
to communities■ Provide a high level of specialization and diverse work
styles in order to enable all employees to share in the joyof working at a banking group and maximize the abilities
of individuals

Ten years to realize the VisionFirst stage (3 years)
Medium-term Management Plan

“MCP 1/3 (One-Third)”(April 2023 to March 2026)

Lay a foundation
for the future

Second stage (3 years)

Final stage (4 years)

Next Medium-termManagement Plan

Medium-termManagement Plan
after the next

(April 2026 to March 2029)(April 2029 to March 2033)

Establish a solid position

Become a partner that
surpasses expectations

Medium-term Management Plan “MCP 1/3 (One-Third)” (April 2023 to March 2026)
Two themes
Grow together with communities and customers
by integrating the real and digital

Empower diverse human resources to flourish based on
mutual acceptance of many and varied values

Targeted business model
Aim to maximize customer satisfaction by improving the service level and reinforcing customer touchpoints
while establishing a sustainable management platform through investment in digital and human capitalSpecific strategies
Sales promotion system

Strategy for corporate clients

Strategy for individual customers

Regional revitalization strategy

Group strategy

Channel strategy

Digital strategy

Human resource strategy

Securities strategy

Alliance strategy

Sustainability strategy

Management and administration systems

Targeted management indicators

12

Net earnings
from core businessProfit attributable toowners of parent

Core OHR(consolidated)

Equity ratio(consolidated)

ROE(consolidated)

Targets for the Fiscal Year Ending March 31, 2026

¥20.0 billion¥13.0 billion

65% or less

11% or more

4.5% or more

(Reference) Results for the Fiscal Year Ended March 31, 2023

¥15.2 billion¥10.8 billion

70.29%

9.44%

4.31%

Operational Base of Saitama Prefecture/Group Strategy
Musashino Bank’s Operational BaseGroup Strategy

The Bank’s operational base is Saitama Prefecture, which hasa high concentration of logistics and production bases due to
its well-developed transportation infrastructure, including the
Ken-O Expressway and a nexus for all six of the Shinkansenbullet train lines in East Japan. Total production in Saitama
Prefecture is around ¥23 trillion, making it the fifth largest
prefectural economy in Japan. A large number of companies
have relocated there from outside the prefecture, with the netincrease from corporate relocations over the 10-year period from2013 to 2022 standing at 568 companies, the second highest in
the country. In this environment, the Bank recognizes that its
mission is to promote locally rooted finance, and we strive toprovide our corporate clients with a smooth supply of funds andother support for their core operations.

The Bank will capture synergies with its eight Group companies, including The Musashino Mirai Partners Co., Ltd., aregional trading company it established in June 2022. By providing one-stop solutions through collaboration in financial
and non-financial areas, the Bank will make a Group-wide
effort to solve the issues of customers and communities.
Furthermore, in October 2023, we began conducting a business contest that calls for new business ideas from within the
Bank. Through this initiative, we hope to uncover ideas thatwill pave the way for resolving community and customer issues,
with the goal of turning them into businesses in the future.

NaganoPrefecture

Yamanashi
Prefecture

SaitamaPrefecture

As part of Sai Hakken, a fee-based membershipservice, Musashino Mirai Partners will
provide solutions to daily lifestyle-related
problems faced by active seniors and otherelderly people, along with experiences thatenrich their lives.

IbarakiPrefecture

Tokyo
Kanagawa
Prefecture

Musashino Mirai Partners will develop two businesses, with thegoal of creating a local ecosystem that will serve as a mechanism
for resolving community issues within the community.
Personal (active seniors) support businessTochigi
Prefecture

Gunma
Prefecture

Musashino Mirai Partners

Chiba
PrefectureFee-based membership service Sai Hakken

Newsletter• Solve daily lifestyle-related problems
through such means as housekeeping services• Deliver carefully selected, exceptional products from Saitama
Prefecture twice a year
• Conduct members-only events, such as smartphone workshops

Commercial value chain support businessfor business operators
Musashino Mirai Partners will
provide its client business operatorswith support throughout thecommercial value chain, including
the planning, development,
and branding phases, so that many more
people will become familiar with the superior
products and services that they offer.

An expressway and railway networkthat extends all over Japan

Railway (Shinkansen)
Expressway

Purchase-type crowd funding IBUSHIGIN
Musashino Mirai Partners will support the development of
new loyal customer bases, test marketing and other activities by
providing a mechanism for garnering widespread empathy, alongwith highlighting the appeal of products and services and theaspirations of client business operators.
E-commerce website IBUSHIGIN Official Store
NaritaInternational Airport
Tokyo
International Airport(Haneda)Musashino Mirai Partners will support the sustainable growthof client business operators by providing an online sales channel
to businesses that handle attractive merchandise and other items
from Saitama Prefecture, and to businesses attempting to newly
develop B2C businesses.
13

Providing SME Management Assistance
Promoting Locally Rooted Finance
The Bank recognizes the promotion of locally rooted finance as its mission, and works to implement smooth supply of funds to
its customers and to provide core business support.
The Bank has established systems for providing solutions for general management issues that customers face during their
growth stages, through united efforts by its branches, Head Office, and Group companies. It also provides finely tuned responses
by leveraging its consulting functions while collaborating with external institutions as needed.

Support for Start-Ups and New Entries
The Bank provides detailed support through close cooperation between our “support team for start-ups and new entries” in our
Head Office and branches to assist start-ups and newly established companies.

Offering a Variety of Financing Methods
The Bank has focused on offering a variety of financing methods, including project financing that provides funding after
focusing on the cash flow of a business, private placement bonds that result in improving the corporate image of a company
conducting fund procurement, and Asset-Based Lending (ABL) that makes use of the customer’s product inventory, accounts
receivable or suchlike.

Support through Digital Technology and IT
The Bank is working to help its client companies improve their operating efficiency and productivity through the use of digital technology.
Provide cloud services that
support digitalization

Business matching withdigital solutions providers

Conduct seminars on
digital technology utilization

Recruitment Service
We introduce the most suitable human resources who will contribute to our corporate clients’ business expansion and new business development.
In addition, we have expanded the service to the area of job seeker support to provide comprehensive support for both job seekers
and companies looking for personnel.

Support for Overseas Expansion
We set up a Representative Office Registered in Singapore to support corporate clients’ overseas expansion and business development and address local demands in a flexible manner. Moreover, we provide detailed support through our overseas network basedon collaboration and cooperation.
In addition, we dispatch employees to JETRO Saitama, and actively support the expansion of sales channels for companies in
Saitama Prefecture while collaborating with the JETRO Saitama center.
Funding

Overseas moneytransfers

Sales channel
expansion

Export and importprocedures

Various local
information

Support for Business Succession
We have arranged consulting services to offer comprehensive support to address such concerns as succession issues, businesssuccession and diversification. We also provide support proactively in coordination with specialist institutions.

M&A Support
We offer corporate clients optimal proposals for their future in collaboration with Nihon M&A Center Inc., the Saitama
Prefectural Business Succession and Transfer Support Center, and others.

Alliance Strategy—Using Alliances in Various Fields—
The Bank is working to provide management assistance to SMEs through alliances with regionalbanks. As part of the Chiba-Musashino Alliance, the Bank is implementing partnership andcollaboration initiatives with The Chiba Bank, Ltd. in a variety of areas, including the establishment of joint offices and the handling of
syndicated loans and joint financing. Furthermore, the Bank is a member of the TSUBASA Alliance, the largest alliance among regionalbanks with participation from 10 banks from Hokkaido to Okinawa. Through this alliance, the Bank is working to address issues such asincreasing the sophistication of financial services and cashless banking, while utilizing the strengths of the wide-area alliance.
14

Contributing to the Local Economy/Initiatives for Regional Revitalization
Contributing to the Local Economy
The Bank is working to provide various financial services that give consideration to local corporate and individual customers, andcontinuing to increase both deposits from the region and loans for the region.
The Bank is strengthening its capital adequacy and reducing non-performing loans towards a sounder financial position. Its
non-performing loan ratio has gradually decreased, and is at a low level.
Deposits from region/
Ratio of deposits from region (Non-consolidated)

Loans to region/Ratio of loans to region

Non-performing loans(Non-consolidated)(Non-consolidated)(¥ billion)(¥ billion)

98.75%

4,162.4

FY2019Deposits from region
Ratio of deposits from region

98.89%

98.82%

98.80%

4,540.8

4,707.2

4,822.1

85.44%
3,062.5

FY2020

FY2021

FY2022FY2019Loans to region
Ratio of loans to region

86.42%

87.02%

87.28%

3,285.8

3,353.9

3,422.9

FY2020

FY2021

FY2022(¥ billion)

Bankrupt and quasi-bankrupt assets(unrecoverable claims)
Claims on potentially bankrupt borrowers
Substandard loans
Ratio of loans subject to mandatory disclosure ofclaims under the Financial Reconstruction Law

12.1

14.6

31.6
1.98%

36.0

34.9

28.5

1.93%

1.90%

1.82%

15.0

17.8

27.9

23.4

24.1

26.0

FY2019FY2020

FY2021

FY2022* “Region” refers to Saitama Prefecture and the areas bordering the prefecture which are a part of the economic and local-living sphere (the Kumegawa Branch, Itabashi Branch,
Ikebukuro Branch, and Goka Branch sales areas).

Initiatives for Regional Revitalization
The Bank is collaborating with local governments to foster regional revitalization and improve resident services, such as supporting projects thatare being promoted by Saitama Prefecture in its aim to create a sustainable community that is comfortable to live in. In addition, the Bank will
actively work to solve a variety of community issues through collaboration with companies, NPOs, educational institutions and other partners.
Alliances and Partnerships with Local Government Organizations, Etc.
Prefecture

Saitama Prefecture

Municipalities (in order ofalliance formation)

Tsurugashima City, Toda City, Yokoze Town, Gyoda City, Kumagaya City, Kasukabe City, Konosu City, Hasuda
City, Kitamoto City, Yorii Town, Ogano Town, Fujimi City, Kawagoe City, Fujimino City, Soka City

Designated Municipality

Saitama City

City promotion initiatives
The Bank strives to communicate the appeal of communities in order to address the issue of growth in non-resident, connected
and resident populations faced by local public entities and contribute to the sustained development and revitalization of communities. The Bank has so far taken steps such as holding seminars on relocation and dual residency and organizing study groups
to support local governments’ efforts to implement the hometown tax donation program.
Regional revitalization space – M’s SQUARE

Local newsletter “Bratte Series”

The Bank actively disseminates information about
local governments in Saitama Prefecture from
M’s SQUARE, a regional revitalization space in
the Bank’s Head Office building.

In order to foster regional revitalization through tourism,
the Bank produces the “Bratte Series” of town walking maps
in collaboration with Rikkyo University. It has published
11 volumes to date.

Initiatives through the support of agriculture in Saitama Prefecture
We offer solutions that are unique to a regional bank, such as supporting new entrants into agriculture from other industries,
with efforts led by a dedicated team specialized in the agriculture sector. Together with members of the community, we are also
making continuous efforts to launch unique projects in order to create a virtuous cycle of local production for local consumption.
Creation of a new industry

Solving agricultural issues in Saitama Prefecture

We started the Minuma Tambo “Wheat” Senary Industry
Creation Project, aiming to create a new industry andrevitalize wheat production at Minuma Tambo in Saitama
City. The project has been working in collaboration withbusinesses within Saitama City to develop products
and conduct other related activities.

In June 2023, we initiated the Musashino Agri-Innovation
Project, which takes on the challenge of rice cultivation.
We will aim to solve community issues aroundagriculture in Saitama Prefecture based on the expertiseand knowledge we gain from activities such as ricecultivation and processed food manufacturing.

15

Sustainability Management Initiatives
Musashino Bank Sustainable Development Goals Declaration
The Musashino Bank Group declares that all of its officers and employees will strive to contribute to achieving the objectives of
the Sustainable Development Goals (SDGs).
• To contribute to the sustainable development of the regional economy, the Bank always exercises its financial intermediaryfunctions and commitment to practicing fiduciary duty.
•To contribute to the creation of a sustainable community including industry and employment, urban development and livability, the Bank engages in partnerships with various bodies, including municipal governments, companies and NPOs.
• The Bank regards issues such as climate change and human rights as having a direct effect on it, and seeks global sustainability.

Vision for the Bank (Key Areas)
Corporate Governance as the Source ofSustainable Growth

A Society in Which People Can Live Their
Own Way for as Long as They Wish

The Bank positions corporate governance as the source ofsustainable growth, and aims to conduct
steadfast bank management grounded on
its management philosophy, which has
remained unchanged since its founding.

The Bank will actively work to create a society inwhich all people can live in their own way, healthily
and happily.

Sustainable Regional Economy

The Bank will respond to global climatechange and make efforts to maintain andimprove the rich local biodiversity.

The Bank will promote innovation in local industry and local
production for local consumption, as well as contribute to
the development of comfortable,
strong towns and work to realize
sustainable economic growth.

Responding to Climate Change, Maintaining
and Improving Biodiversity

Sustainability Management Initiatives
Formulation of the Basic Policy on Sustainability, etc.
We formulated four policies for promoting sustainability management, which we will translate into more practical initiatives.
Name
Basic Policy on
Sustainability
Environmental Policy

Investment and
Financing Policy
Human Rights Policy

Overview
Under its Corporate Philosophy, “working in harmony with the local community it serves” and “maintaining a deep respect
toward customers,” the Bank aims to achieve stimulation of the local economy and to provide both economic and social
value from a medium- to long-term perspective.
All of our officers and employees are engaging with the issues of climate change, decarbonization, and biodiversity
through business activities, adopting a global perspective while also giving consideration to the local characteristics of the
Saitama region.
We will avoid financing industrial and corporate sectors that have a negative impact on environmental, social, andeconomic sustainability.
In all of our business activities, and provision of products and services, we will respect the human rights and diversity of allof our stakeholders.

System for Sustainability Promotion
Governance System

16Management and Promotion of
Cross-departmental Initiatives

The Bank has a system in which the Sustainability Promotion
Committee, whose chair is the president, and the Sustainability
Subcommittee, which is under the control of the Sustainability
Promotion Committee, carry out activities such as planning andproposal of measures and management of progress. The Board of
Directors receives reports on these activities and supervises them.

We have established the Sustainability Promotion Office as a
dedicated department responsible for managing and promoting
initiatives across the Musashino Bank Group. In addition, threeworking groups have been formed for each type of sustainabilityrelated issue in an effort to enhance the effectiveness of initiatives.

Main agenda items discussed by the Sustainability Promotion Committee

Three working groups• Information disclosure considering the TCFD recommendations• Promotion of sustainable finance• Measures to reduce greenhouse gas emissions• Revitalization of regional economies• Revitalization of local communities• Environmental and diversity initiatives

Product Lineup to Encourage Customers’ Sustainability Management
To encourage sustainability management among local firms, we have enhanced and expanded our lineup of finance and consulting products tailored to the status of initiatives in individual companies.
2019

Finance andloan products

2020

2021

●	Musashino SDGs Private
Placement Bonds

2022● Musashino Sustainability-linked Loans● Musashino SDGs Friends Loan
● Musashino Sustainability Framework Loans● Musashino Blue-chip Company Sustainable Fund
● Musashino SDGs Consulting

Consulting
products● Musashino SDGs Assessment Support● Musashino Decarbonization Consulting

Employee Education for Sustainability Management
We are working to enhance training and e-learning to allow each and every employee to understand sustainability and apply it tohis or her own duties.
Initiative

Training

Description

Ecology College

The Bank’s original environmental course in which
trainees can learn about the natural environmentand biodiversity from various perspectives,
including corporate activities and neighborhood
creation

Training for corporate sales
representatives

Training that allows client companies to understand the background to
why sustainability management is necessary and learn about specificsustainability initiatives

Training using board games

Training that makes use of an SDGs boardgame tailored to Saitama
Prefecture, allowing trainees to learn about SDGs initiatives andrelationships with communities

e-learning for
employees• Launch of an online course that allows trainees to gain comprehensive knowledge of the targets of each
SDG, the best practices of companies and other bodies, and more. (74% of employees had completed thiscourse as of the end of March 2023)• Conducting SDGs-related comprehension tests

Qualifications andcorrespondence
courses• Encourage the acquisition of sustainability-related qualifications such as “Decarbonization Advisor”• Encourage participation in correspondence courses based on the theme of sustainability

Biodiversity Initiatives
The Bank has focused on maintaining and improving biodiversity through initiatives aimed at promoting further greenery in
the region, including the utilization of a public trust scheme. Social demands related to consideration for biodiversity are set toincrease going forward, and the Bank aims to enhance its initiatives in this area further.

Subsidies Provided by Musashino Bank Green Fund Public Trust
The Musashino Bank Green Fund public trust was established in July 1992 with the goal of contributing to the creationof beautiful and comfortable living environments by subsidizing activity funds for businesses that aid the preservation andcreation of natural environments within Saitama Prefecture.
In April 2023, we provided a total of ¥2.90 million in subsidies to 15 organizations.
Businesses Eligible for Subsidies
1. Businesses that contribute to the preservation or creation of natural environments
2. Businesses related to the spread of awareness considered necessary for preservation or creation of natural environments
3. Investigative research necessary for promoting natural environment preservation and creation activities
17

Responding to Climate Change
Initiatives to Address the TCFD Recommendations
The Bank positions climate change initiatives as an important management issue. Accordingly, we strive
to establish governance and risk management systems based on the recommendations of the Task Force on
Climate-Related Financial Disclosures (TCFD) and grasp the opportunities and risks created by climatechange. In addition, the Bank has established and disclosed Sustainable Finance Amount Targets andGreenhouse Gas (GHG) Emission Reduction Targets.

Sustainable Finance Amount Targets
The Bank has set a target amount for the execution of sustainable finance transactions that contribute to the decarbonizationof local communities. We aim to execute a cumulative total of ¥1 trillion in sustainable finance transactions over the 10 years
from fiscal 2021 to fiscal 2030.
Through fiscal 2022, the Bank had executed sustainable finance transactions amounting to ¥188.6 billion.
Sustainable finance is finance in which the funds are used for resolving environmental or social issues and includes financeto support customers’ ESG or SDGs initiatives.

Trend in CO2 Emissions (Scope 1 + 2)
The Group’s CO2 emissions are shown in the graph.
The Group’s overall CO2 emissions for fiscal 2022 (Scope 1 + Scope 2) were down 19.4% from fiscal 2013.
In fiscal 2022, although changes in the branch network contributed to savings in electric power consumption, CO2 emissions
rose due to the opening of the new Head Office building in December 2021, and the impacts of extreme summer heat in 2022.
Electric power consumption at the new Head Office building temporarily increased due to an increase in the building’s capacity,which reflected its larger size compared to the former Head Office building. In the future, electric power consumption is expected
to decrease over the long-term owing to efforts to centralize business sites through the consolidation and closure of various sites.
The Bank will continue to work on measures such as conserving electricity and switching over to energy-efficient equipment (including business vehicles), with the aim of achieving the Group’s CO2 emissions target for fiscal 2030, which is areduction of 70% in CO2 emissions from fiscal 2013 levels.
Musashino Bank Group CO2 emissions

Emissions by scope for past years

8,180t
6,724t6,550t

6,596t –19.4%

Target–70.0%FY2013

FY2020 FY2021 FY2022

FY2013

FY2020

FY2021

FY2022

Scope 1

1,049

732

773

806

Scope 2

7,131

5,992

5,777

5,790

Scope 32,454tTotal CO2 emissions

FY2030(t-CO2)

—

—

—

(See
below)

8,180

6,724

6,550

6,596

Scope 3 Category 15 Estimates Emissions from Commercial Loans
The amount of indirect greenhouse gas emissions through investees and borrowers accounts for a large proportion of the
Scope 3 emissions (CO2 emissions in the supply chain) of financial institutions. For this reason, the Bank has estimated theemissions from its loans to domestic business corporations, referring to the FY2021 PCAF Standard* measurement methodology. We estimated emissions from commercial loans as a measurement of emissions under Scope 3 Category 15. In the future,
we intend to successively expand the scope of calculation. The estimated amounts are presented below.
* The Partnership for Carbon Accounting Financials (PCAF) is an international initiative to develop methodologies for measuring and disclosing greenhouse gas emissions associated with the investment and finance portfolios of financial institutions.

Estimated emissions by industry based on classification of the Bank’s borrowers into the TCFD’s 14 industries
Industries

18

Emissions (t-CO2)

Industries

Emissions (t-CO2)

Capital goods

461,395

Maritime and air transportation

15,469

Metals and mining

456,106

Electricity

146,720

Chemicals

297,733

Oil and gas

102,056

Real estate management and development

243,011

Beverage and food

255,429

Construction materials

191,282

Paper and forest products

130,651

Ground transportation

359,353

Agriculture

Automobiles

143,230

Others3,613,860

Total

6,434,846

18,551[Methodology for calculating emissions]
Borrower’s net sales x emissions per¥1 million of net sales (by industry) ×
contribution of the Bank’s loan
[Time]
Loan balance: as of the end of March2023
Financial indicators such as borrower’s
net sales: from the latest financial information for each borrower obtained by
the Bank as of the end of March 2023,
when the estimates were determinedPracticing Human Capital Management
Recognizing that human capital is the source of corporate
value, the Bank is concentrating on advancing humanresources development to increase the specialization of each
employee, while also making efforts, such as diversity andinclusion measures, to create worksites where all employees
can succeed.

Long-term Vision “SOU” forPromoting the Success of Human Resources
In April 2023, the Bank formulated the 10-year Long-term
Vision “SOU” in an effort to continuously develop an
organization that demonstrates a diverse range of abilities andplaces a premium on diverse values.
Furthermore, the Bank designated the three-year period
from fiscal 2023 to fiscal 2025 as Stage 1. During this time,
we aim to “Develop a system for autonomous learning and afield for realizing ambitions” and “Foster a culture of understanding a wide range of values and accepting one another.”Specific Measures in Fiscal 2023
Develop a system for autonomous learningand a field for realizing ambitions• Provide career advancement support by strategically assigning
women to duties they have not experienced before• Implement health and wellness measures and support initiatives
for women in connection with childbirth• Establish systems to personalize skill acquisition
Foster a culture of understanding a wide range of values
and accepting one another•C reate opportunities for building networks within the Bank (consider
holding internal bank networking meetings and other such events)• Ensure familiarity with men’s childcare leave among branch managers and eligible personnel, and rigorously enforce the systematic
acquisition of at least five days of such leave• Provide continuous education aimed at instilling and entrenching an awareness of the importance of understanding diversity
and accepting one another, with a view to improving emotional
security and maximizing the abilities of diverse personnel

S (Sustainable)  O (Only)  U (Unite)“SOU” expresses the Bank’s desire for each member todemonstrate their unique individuality and for employees
to mutually embrace their differences, cooperate, and pull
together in the same direction, thereby contributing to theorganization’s sustained development. In Japanese, “SOU”
also means harmony, accord, and solidarity, embodying ourambition to create a bank that values diversity and provides a
thriving environment for all employees.

Basic Policy
Autonomy and Ambition
Develop autonomous and ambitious human resources whoare committed to personal growthDiversity and Connections
Develop an organization in which diverse human resources
can thrive by understanding and accepting a wide range ofvaluesPeriodStage 1

Accept one anotherFiscal 2023 to fiscal 2025

Stage 2Connect with one anotherFiscal 2026 to fiscal 2028

Human Resources Development Initiatives
As the issues confronting customers and communities become
more diversified, employees must have a broad range of knowledge and skills. In this environment, the Bank encourages
employees to acquire a broad range of knowledge and skills,
including in fields that are not an extension of traditional banking operations, such as digital technology and IT. In addition
to increasing the sophistication of training programs, the Bankis developing its educational environment through e-learningand other programs, as part of efforts to enhance support foreach individual to take the initiative to meet challenges.

Fostering Professional Human Resources
The Bank has long worked to encourage employees to acquire
qualifications that aid in financial planning and problemsolving for companies. Under the Medium-term Management
Plan “MCP 1/3,” the Bank is redoubling these efforts, alongwith focusing anew on developing human resources withknowledge and skills in fields such as digital technology and IT.
Field

Qualifications

Financial planning andproblem-solving forcompanies

1st Grade Certified Skilled Professionalof Financial Planning, Small and Medium
Enterprise Management Consultant

Digital technology
and ITIT Coordinator, Fundamental Information
Technology Engineer

OthersSecurities Analyst, Certified Internal
Auditor, Career Consultant, MBA, etc.
Number of Personnel with Professional Qualifications

Stage 3Grow and Evolve
Fiscal 2029 to fiscal 2032

185
2023/3 Result

300
2026/3 Target

19

Initiatives toDevelop the Bank’s Internal Environment

Action Plan Based on the Women’s Advancement
Promotion Act (April 2023 to March 2026)

The Bank is working to develop an internal environment thatallows all employees to demonstrate their diverse individuality and abilities.

In April 2023, the Bank formulated its Phase 3 Action Planfor developing employment conditions that will enablea diverse array of human resources to be successful inthe workplace regardless of gender. This Action Plan wasformulated in accordance with the Women’s Advancement
Promotion Act (Act on Promotion of Women’s Participation
and Advancement in the Workplace).

Creating Worksites Where Employees Can Work
Energetically over the Long Term
The Bank is working to create workplaces where all employees can work energetically in good health over the long term,
while fulfilling their roles in their private lives at home and in
the community.
Support for balancing workand family(post-reinstatement training,
reduced working hours, etc.)

Various types of support forchildbirth and childcare(childbirth support leave andreinstatement support program)Childcare leave comprising
five days of paid leave

Senior partner program

Employee rehiring program

Encouraging systematic acquisitionof annual paid leave

Work-Life Balance Handbook

Special leave program forencouraging community activities(community leave)

Health and Productivity Management Initiative
To help strengthen and enhance each employee’s health,the Bank arranges for a public health nurse to conductroutine check-ups and health counseling at all branches,
and it makes efforts such as strengthening measures against
passive smoking and promoting participation in walking
events and other health-related activities. As a result of these
efforts, the Nippon Kenko Kaigi has recognized the Bank as
a 2023 Health and Productivity Management Outstanding
Organization (under the large enterprise category).

Diversity & Inclusion Initiatives
Recognizing that respecting the diverse values of employees
will help to establish its resilience as an organization, theBank is concentrating on diversity and inclusion initiatives.

Awareness of issues• The ratio of female managers is lower than the ratio of male managers• Men and those around them have a limited awareness of the significance of their participation in childcare

Description of targets and activities
Target 1  
Increase the ratio of female managers to 30% or more
• Provide fair remuneration according to expected roles, regardless of age
or gender• Conduct a training program that will lead to career advancement andexpanded job duties
Target 2  Increase the ratio of men taking childcare leave to at least 100%
• Ensure that all personnel eligible for childcare leave are aware of the
program and rigorously enforce the systematic acquisition of leave• Foster an organizational culture that encourages personnel to takechildcare leave

Special Subsidiary The Musashino Harmony Co., Ltd.
The Musashino Harmony Co., Ltd. was established with the goalof increasing opportunities for people with disabilities to play arole. The company currently has nine employees and its operations include printing business cards and making novelty items.

Employee Engagement Initiatives
In the course of implementing human resources and othermeasures, the Bank puts emphasis on dialogue by, for example,
conducting employee awareness surveys and various questionnaires. In addition, we are striving to improve our operations
by proactively reflecting employee feedback via the Operational
Improvement Proposal System. Furthermore, the branch working group, whose members are selected through open recruitment, enables us to solicit and listen to candid feedback on avariety of strategies and initiatives in a flat hierarchical setting.

Indicators and Targets Related to Practicing Human Capital Management (Data Sheet)
Indicator
Human resources investment per person

2026/3 Target

2023/3 Result¥85,000¥62,404

Number of personnel with professional qualifications

300

185

Ratio of “IT Passport” holders

80%

57%

30% or more

25.3%

Ratio of female workers in management positions
Ratio of employees with disabilities

2.6%

2.43%

100% or more

104.4%

Average number of annual paid leave days taken

15 days12.6 days

Employee satisfaction(improvement in job fulfillment and engagement)

Consistently improve witha target of 100%

74.4%

Ratio of male workers taking childcare leaveNotes: 1. Human resources investment per person is the sum of training, qualification acquisition and other such expenses divided by the number of employees.
2. With employee satisfaction, the Bank will continue efforts to increase every year the ratio of individual employees responding, “I agree” to questions such as “Are you satisfied
with working in your current workplace?”

20

Communication with Stakeholders
Musashino Bank aims to promote higher quality business operations and corporate activities, and to increase its corporate value throughcommunication with various stakeholders, including customers, shareholders and investors, employees, and local communities.

Customers

Shareholders
and Investors• Creating branches that are convenientand accessible for consultation• Initiatives to increasecustomer satisfaction• General Meeting of Shareholders• Investor meeting presentations• Publication of information bulletin

Employees

Local
Communities• Awareness survey and questionnaire• Proposal system• Dialogue through working groups
and task forces• Various community contribution activities• Utilization of regional revitalization space• Financial and economic literacy• Promotion of culture and sports

Communication with Customers
We will focus on initiatives to enable all customers to use our services with greater confidence and comfort. By listening to customer
feedback, we will strive to enhance our services and develop our human resources with a view to increasing customer satisfaction.

Communication with Shareholders and Investors
We value the dialogue we have at general shareholders’ meetings and investor meeting presentations. We also publish an
integrated report and mini-disclosure booklet, as well as a website, in order to promote deeper understanding of the Bank and to
disclose information appropriately.

Communication with Employees
We are working to improve our operations by reflecting feedback from our employees through measures such as conducting
awareness surveys and questionnaires, as well as operating a proposal system and so forth. We also create opportunities for
dialogue between employees and management by calling for participation in working groups and task forces. In this way, we are
actively incorporating employees’ opinions in management.

Communication with Local Communities
We actively engage in various community contribution activities, while also using the regional revitalization space, M’s SQUARE,
at our Head Office to focus on regional communication and co-creation. Moreover, we are also actively engaged in initiatives
such as financial and economic literacy and promotion of culture and sports.

Communication and Co-creation with Community Members
At the regional revitalization space, M’s SQUARE, located on the second floor of
the Head Office building, we disseminate information about the attractions of theregion and challenges to be addressed, as well as host events that serve as networking forums for community members, in coordination with local governments,
companies, organizations and other partners.

Market for products
made with wheat grownin Saitama

Parasports Experience
Event

Food drive initiative

Networking event foryoung carers

Toward Solving Social Issues
The Bank organizes a Food Drive Movement in which unused food is collected anddonated to volunteer-run children’s cafeterias in Saitama Prefecture, in order to support
the healthy development of local children. Furthermore, young carers who act as caregivers to family members have become a social concern. Working closely with Saitama
Prefecture, support organizations, and other partners, the Bank actively provides
support by holding networking meetings for young carers, and seminars for supporters.

21

Corporate Governance
Enhance Management Oversight Systems
Musashino Bank recognizes that upgrading and expanding
its corporate governance capabilities are key priorities ofmanagement. In addition to adhering strictly to a policyof compliance with statutory and regulatory requirements
as well as in-house rules and regulations, every effort ismade to ensure that the Board of Directors and the Boardof Corporate Auditors stringently monitor directors in theexecution of their duties.
Three outside directors and three outside corporate
auditors who pose no risk of any conflict of interests withordinary shareholders have been selected to monitor andaudit directors in the execution of their duties. They also takepart in meetings of the Board of Directors where they areable to proactively voice their opinions and offer advice onmanagement from a broad, independent and neutral perspective. This ensures that the management monitoring function
is both objective and impartial.

In addition, the introduction of an executive officer system has reduced the number of directors, allowing for rapid
management decision-making. The directors have delegatedauthority to the executive officers. The executive officers’
principal responsibility as leaders of the primary departments
is to execute business operations in a timely and efficientmanner.

Management Advisory Committee
The Management Advisory Committee, as an advisory bodyto the Board of Directors, deliberates on matters such as
the selection, dismissal, and remuneration of directors andcertain other personnel. The Board of Directors reflects thedeliberations of the committee in its decision-making. The
committee is made up of five people: three outside directors,
including the committee chair, and two internal directors.

Corporate Governance Structure (As of July 1, 2023)

General Meeting of Shareholders
Assignment

Management
Advisory
Committee

Assignment

Inquiry
Audit

Board of Directors
Directors

Board of Corporate Auditors
Corporate auditors

ReportSupervision

Discussion

ReportDiscussion

Assignment

ReportBusiness execution functions
Executive Committee

Indication/
Verification
Compliance Committee

Audit

Accounting auditors

Executive officers

Head Office/Branches

22

Audit

AdviceAuditing Division

Law officeLicensed tax accountants

Compliance
Compliance Framework
The social and public mission of the banking business makes
high demands for operations based on fair and transparent
corporate activities in compliance with laws, regulations,and social norms and in accordance with the principles ofself-discipline and self-responsibility. Accordingly, the Bank
considers the thorough compliance of its directors andemployees in business operations to be a top priority, and to
this end management is actively involved in the fulfillmentof the Bank’s social and public mission as the Bank works tostrengthen its compliance framework through steps such assystem improvements and the establishment of instruction
methods.
In the future, the Bank will further strengthen its corporate activities based on a strong sense of ethics and integrity
and its management approach in accordance with principles
of self-responsibility as it further strengthens the complianceframework so that the Bank’s daily business activities andactions ensure compliance with laws, regulations, and social
norms.

Basic Compliance Policy
Musashino Bank’s basic compliance policy entails that officers
and employees go about their daily duties in accordance with
the Bank’s two fundamental management guidelines, namely
its Corporate Philosophy and Code of Behavior.
Under its unwavering Corporate Philosophy, the Bank
strives to work in harmony with the local community it
serves while maintaining a deep respect toward customers.
As a local bank in Saitama Prefecture, we continue tocontribute to the local community and society. Furthermore,
the Code of Behavior is founded on “the public mission of
the Bank” and stipulates “provision of high-quality financial
services,” “compliance with laws, regulations, rules, etc.,”“open business management through communication withsociety,” “respecting the personalities of employees,” “tacklingenvironmental problems,” “implementing social contribution
activities,” and “resolute responses to anti-social forces,” anddirectors and employees go about their daily duties guided bythese basic policies.

Compliance Management Structure
The Legal Affairs Office of the Risk Management Division
serves as the compliance management department for the
Bank. This office undertakes the uniform managementof all legal issues relating to compliance while providing
instructions based on investigation and research. At the sametime, the office coordinates with officers responsible for legal
compliance appointed to all departments and branches whileworking to strengthen the compliance structure. Regularmeetings are held with the officers responsible for legal
compliance appointed to each branch in order to improve
the level of compliance through the sharing of informationand training, and meetings are held each month with theofficers responsible for legal compliance in each head office

department. These meetings serve as a forum to deliberate oncompliance issues and to share information.
In addition to the aforementioned, the employees of all
departments and branches are made to conduct periodic
self-compliance checks. In this manner, the compliance management department has adopted a mechanism that enables it
to grasp the status of compliance management.
Furthermore, Musashino Bank has established theCompliance Committee with the president of the Bank serving as the chairperson, which serves as the organization thatchecks the status of compliance on a Bank-wide basis whileconsidering any and all other important matters throughregular meetings. In addition, the committee evaluates andchecks on the progress and implementation status of theCompliance Program approved by the Board of Directors.
The Compliance Program sets forth a specific action plan
for realizing compliance, and it is reviewed every year by theCompliance Committee.

Compliance ManualTo ensure the compliance of its officers and employees, theBank uses a compliance manual that has been approved by
the Board of Directors to instill awareness in all of its officers
and employees.
The compliance manual contains sections on the Bank’s
Corporate Philosophy, Code of Behavior, and basic policies.
It contains a section on compliance standards that stipulates
the matters officers and employees should comply with, asection on the compliance framework that provides an explanation on various structures at the Bank including educationand verification structures, and a section that provides an
explanation of the laws and regulations that Bank employees
are required to be knowledgeable of. The compliance manualserves as a standard for making decisions and taking actions
in everyday business activities.

Efforts Regarding Anti-Money Laundering andCountering the Financing of Terrorism
The Bank has positioned anti-money laundering andcountering the financing of terrorism (hereinafter, “AML/
CFT”) as important issues in its management strategy. We
are working to build control structures for AML/CFT in
accordance with our basic policies.
In addition, we provide ongoing training for all officers
and employees as part of our efforts to increase theirunderstanding of the importance of AML/CFT, with a viewto helping ensure that everyone is aware of relevant laws andregulations, and takes appropriate operational measures.

23

Risk Management
Risk Management Policy
As the risks associated with banking operations become
increasingly varied and complex, the Bank has formulated
a set of internal management policies that take into consideration the Bank’s strategic targets, in order to ensure thatthe manner in which it manages its business is both soundand pertinent. Guided by these policies, the Bank works
diligently to manage risk.
In specific terms, the Bank classifies the risks it should
manage as (1) comprehensive risks; (2) credit risks;(3) market risks; (4) liquidity risks; and (5) operationalrisks (including administrative and system risks). The Bank
conducts appropriate risk management according to risk
characteristics.

Management Structure by Type of Risk
(1) Comprehensive Risk Management
In order to appropriately manage the wide variety of risks on acomprehensive basis, the Bank has developed and establisheda management structure by setting up the Comprehensive
Risk Management Department. The Comprehensive Risk
Management Department puts in place rules and criteria for
determining the scope of comprehensive risk management,
management methods, evaluation of new products and operations as well as the level of acceptable risk after taking into
consideration management strategies, management capacity as
well as business scale and characteristics. Based on these rules
and criteria the ALM (Asset Liability Management) and otherappropriate committees monitor and control risks. The resultsof these activities are reported to the Board of Directors andother relevant bodies on a regular basis.

(2) Credit Risk Management
Musashino Bank has historically taken steps to maintain the
independence of the Credit Division and to build a stringent
screening and management structure in order to maintainand strengthen the soundness of its assets. At the same time,
the Bank has adopted a ranking system and endeavored to
upgrade and expand its credit risk management capabilities asa part of its efforts to establish objective decisions and lending policies on an individual transaction counterparty basis.

(3) Market Risk Management
Musashino Bank has established the Market Risk
Management Department in order to appropriately manage
market risks. Relevant steps are taken to ensure the independence of the department from the Market Management
Department and Business Promotion Division, and to establish and develop a structure that is capable of harnessing thechecks-and-balances function. At the same time, the ALM
and Credit Portfolio Management Committees deliberate as
and when required.

(4) Liquidity Risk Management
Musashino Bank has established the Liquidity Risk
Management Department and Cash Management
Department in order to appropriately manage liquidity risk.
While ensuring the independence of the Liquidity Risk
Management Department from the Cash Management24

Department, Market Management Department and Business
Promotion Division, every effort is made to establish
and develop a structure that is capable of harnessing thechecks-and-balances function. At the same time, the ALM
Committee deliberates as and when required.

(5) Operational Risk Management
Musashino Bank confronts broad and varied operationalrisks. For this reason, the Bank classifies risks as (i) administrative risk, (ii) systems risk, and (iii) other operational risks(a. legal risk, b. human risk, c. tangible asset risk, and d.
reputation risk), puts in place rules on an individual risk basis
and promotes the management of each risk by the appropriate management department. In addition, the Bank has
established the Operational Risk Management Department
to undertake the management of operational risks on acomprehensive basis. The Bank also pushes forward measures
aimed at establishing and developing a management structurethat is capable of harnessing the checks-and-balances function with respect to each business division. Moreover, theOperational Risk Management Committee deliberates on
issues as and when required.

Crisis Management/BCP Framework
The Bank has established a Business Continuity Plan (BCP)as part of its contingency planning to ensure operations
will continue in case of events such as a major earthquake,system disruption, or outbreak of pandemic influenza. The
Bank has compiled manuals that establish concrete codes of
behavior and countermeasures. In parallel, the Bank holds
systematic drills to improve the responsiveness and awarenessof all officers and employees. Additionally, the Bank makes
improvements to address issues it identifies and related
matters, as part of efforts to further increase the effectivenessof the BCP.
In response to the current coronavirus pandemic, the Bank
set up an Emergency Response Headquarters immediately,in order to maintain financial intermediary functions as
an essential service that is vital to people’s daily lives. We
have swiftly implemented response measures in line withconstantly changing conditions.

Cyber Security Management Framework
We established the Cyber Security Management
Subcommittee as a CSIRT* within the Bank, with the aimof ensuring a highly effective cyber security framework that
includes trying to prevent any impact from the occurrence ofcyber-attacks, and minimizing the damage and achieving an
early-stage recovery if there is any.
This subcommittee is developing diverse activities fornormal times and for emergencies (if some incident occurs).
*CSIRT: Computer Security Incident Response TeamA general term for teams responsible for cyber security management within an organization. At the Bank, the Cyber Security
Management Subcommittee and its secretariat are CSIRTs.

Consolidated Balance Sheets
The Musashino Bank, Ltd. and Consolidated Subsidiaries As of March 31, 2023 and 2022

Millions of Yen
2023
2022

AssetsCash and due from banks�����������������������������������������������������������������������������
Monetary claims bought�������������������������������������������������������������������������������
Trading securities�����������������������������������������������������������������������������������������
Money held in trust��������������������������������������������������������������������������������������
Securities������������������������������������������������������������������������������������������������������
Loans and bills discounted���������������������������������������������������������������������������
Foreign exchanges����������������������������������������������������������������������������������������
Lease receivables and investments in leases���������������������������������������������������
Other assets��������������������������������������������������������������������������������������������������
Tangible fixed assets�������������������������������������������������������������������������������������
Buildings, net������������������������������������������������������������������������������������������
Land��������������������������������������������������������������������������������������������������������
Leased assets, net�������������������������������������������������������������������������������������
Other tangible fixed assets�����������������������������������������������������������������������
Intangible fixed assets�����������������������������������������������������������������������������������
Software���������������������������������������������������������������������������������������������������
Leased assets��������������������������������������������������������������������������������������������
Other intangible fixed assets��������������������������������������������������������������������
Retirement benefit asset�������������������������������������������������������������������������������
Deferred tax assets����������������������������������������������������������������������������������������
Customers’ liabilities for acceptances and guarantees������������������������������������
Allowance for loan losses������������������������������������������������������������������������������
Total assets������������������������������������������������������������������������������������

¥  484,394
839
7
1,489
810,296
3,909,853
7,257
17,46940,07754,99926,64625,363
3
2,986
4,941
4,727
26
187
7,596
2,798
4,834
(19,756)¥5,327,096¥  790,922
816
51
1,491
735,215
3,841,638
3,701
19,534
38,22656,163
27,61725,363
8
3,174
5,125
4,882
52
190
8,518
1,103
4,965
(21,191)¥5,486,283

Thousands of
U.S. Dollars*2023$ 3,627,604
6,283
52
11,151
6,068,269
29,280,708
54,347130,825
300,135
411,885
199,551
189,942
22
22,36237,00335,400195
1,400
56,886
20,95436,202(147,952)$39,894,376

25

Millions of Yen
2023
2022

Liabilities
Deposits�������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit������������������������������������������������������������������
Call money and bills sold�����������������������������������������������������������������������������Cash collateral received for securities lent�����������������������������������������������������
Borrowed money������������������������������������������������������������������������������������������
Foreign exchanges����������������������������������������������������������������������������������������
Borrowed money from trust account������������������������������������������������������������
Other liabilities��������������������������������������������������������������������������������������������
Provision for bonuses�����������������������������������������������������������������������������������
Provision for bonuses for directors (and other officers)���������������������������������
Retirement benefit liability���������������������������������������������������������������������������
Provision for retirement benefits for directors (and other officers)����������������
Provision for loss on interest repayment�������������������������������������������������������
Provision for reimbursement of deposits�������������������������������������������������������
Provision for point card certificates��������������������������������������������������������������
Provision for contingent loss������������������������������������������������������������������������
Provision for share-based compensation�������������������������������������������������������
Deferred tax liabilities����������������������������������������������������������������������������������
Deferred tax liabilities for land revaluation���������������������������������������������������
Acceptances and guarantees��������������������������������������������������������������������������
Total liabilities�������������������������������������������������������������������������������

¥4,875,224
16,07057,551
10,63868,276390
7,756
24,278
1,129
37
2,810
35
29
142
110
219
83
331
4,227
4,834
5,074,179¥4,757,810
23,29033,657
17,476358,392
218
5,735
24,766
1,138
37
2,964
27
44
196
109
307
80
284
4,227
4,965
5,235,729$36,510,327
120,347
430,997
79,667
511,316
2,921
58,084
181,8178,455
277
21,044
262
217
1,063
824
1,640
622
2,479
31,65636,20238,000,292

Net assets
Share capital�������������������������������������������������������������������������������������������������
Capital surplus���������������������������������������������������������������������������������������������
Retained earnings�����������������������������������������������������������������������������������������
Treasury shares���������������������������������������������������������������������������������������������
Total shareholders’ equity���������������������������������������������������������������
Valuation difference on available-for-sale securities��������������������������������������
Deferred gains or losses on hedges����������������������������������������������������������������
Revaluation reserve for land�������������������������������������������������������������������������
Remeasurements of defined benefit plans�����������������������������������������������������
Total accumulated other comprehensive income����������������������������
Share acquisition rights��������������������������������������������������������������������������������
Non-controlling interests�����������������������������������������������������������������������������
Total net assets������������������������������������������������������������������������������
Total liabilities and net assets��������������������������������������������������������

45,74338,353
156,284(951)
239,430
6,500
(152)
8,286
(1,219)13,41538
33
252,917¥5,327,096

45,74338,353
148,605(893)
231,809
10,476
124
8,286
(210)
18,67638
29
250,554¥5,486,283

342,567
287,224
1,170,404(7,122)
1,793,080
48,678(1,138)62,053(9,129)100,464285
247
1,894,084$39,894,376* U.S. dollar figures have been translated at the rate ¥133.53 to U.S.$1, the prevailing market rate as of March 31, 2023.

26

Thousands of
U.S. Dollars*2023

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
The Musashino Bank, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2023 and 2022

Consolidated Statements of Income

Ordinary income����������������������������������������������������������������������������������������
Interest income��������������������������������������������������������������������������������������������
Interest on loans and discounts����������������������������������������������������������������
Interest and dividends on securities����������������������������������������������������������
Interest on call loans and bills bought������������������������������������������������������
Interest on deposits with banks����������������������������������������������������������������
Other interest income������������������������������������������������������������������������������
Trust fees�����������������������������������������������������������������������������������������������������
Fees and commissions����������������������������������������������������������������������������������
Other ordinary income���������������������������������������������������������������������������������
Other income�����������������������������������������������������������������������������������������������
Recoveries of written off receivables���������������������������������������������������������
Other�������������������������������������������������������������������������������������������������������
Ordinary expenses��������������������������������������������������������������������������������������
Interest expenses�������������������������������������������������������������������������������������������
Interest on deposits����������������������������������������������������������������������������������
Interest on negotiable certificates of deposit���������������������������������������������
Interest on call money and bills sold��������������������������������������������������������
Interest expenses on cash collateral received for securities lent������������������
Interest on borrowings and rediscounts����������������������������������������������������
Other interest expenses����������������������������������������������������������������������������
Fees and commissions payments�������������������������������������������������������������������
Other ordinary expenses�������������������������������������������������������������������������������
General and administrative expenses������������������������������������������������������������
Other expenses���������������������������������������������������������������������������������������������
Provision of allowance for loan losses�������������������������������������������������������
Other�������������������������������������������������������������������������������������������������������
Ordinary profit�������������������������������������������������������������������������������������������
Extraordinary losses�����������������������������������������������������������������������������������
Loss on disposal of non-current assets������������������������������������������������������
Impairment losses������������������������������������������������������������������������������������
Profit before income taxes��������������������������������������������������������������������������
Income taxes—current���������������������������������������������������������������������������������
Income taxes—deferred��������������������������������������������������������������������������������
Total income taxes��������������������������������������������������������������������������
Profit�����������������������������������������������������������������������������������������������������������
Profit attributable to non-controlling interests�����������������������������������������
Profit attributable to owners of parent������������������������������������������������������

Millions of Yen
2023
2022

¥81,901
42,56934,832
7,066
(5)
0
676
63
14,939
11,10913,218396
12,822
66,266
3,113
420
2
1,671
325
39
654
4,041
11,11635,886
12,108
1,149
10,95815,63486
52
34
15,548
3,970
709
4,679
10,8683¥10,865¥71,186
39,71433,232
5,591
0
0
889
68
15,172
2,561
13,670372
13,297
57,693
1,053
433
5
140
53
41
378
4,032
1,771
34,845
15,9902,564
13,426
13,49270
25
45
13,421
4,147
269
4,417
9,004
2
¥ 9,001

Thousands of
U.S. Dollars*
2023$613,353
318,797
260,855
52,917
(37)
0
5,063
472
111,877
83,19598,9892,966
96,023496,263
23,3133,145
15
12,514
2,434
292
4,898
30,263
83,247
268,749
90,676
8,605
82,064
117,082644
389
255
116,438
29,731
5,310
35,041
81,39022$ 81,367* U.S. dollar figures have been translated at the rate ¥133.53 to U.S.$1, the prevailing market rate as of March 31, 2023.

Consolidated Statements of Comprehensive Income

Profit�����������������������������������������������������������������������������������������������������������
Other comprehensive income�����������������������������������������������������������������������
Valuation difference on available-for-sale securities����������������������������������
Deferred gains or losses on hedges�����������������������������������������������������������
Remeasurements of defined benefit plans, net of tax��������������������������������
Comprehensive income������������������������������������������������������������������������������
Comprehensive income attributable to
Owners of parent�������������������������������������������������������������������������������������
Non-controlling interests�������������������������������������������������������������������������

Millions of Yen
2023
2022

Thousands of
U.S. Dollars*
2023¥10,868(5,261)(3,975)(276)(1,009)¥ 5,607¥ 9,004(4,957)(4,623)435(769)¥ 4,046$ 81,390(39,399)(29,769)(2,067)(7,556)$ 41,991¥ 5,6033¥ 4,0432$ 41,961
22* U.S. dollar figures have been translated at the rate ¥133.53 to U.S.$1, the prevailing market rate as of March 31, 2023.

27

Consolidated Statements of Changes in Equity
The Musashino Bank, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2023 and 2022
Millions of Yen
Shareholders’ equity

Balance as of April 1, 2021................................................
Changes during period:
Dividends of surplus����������������������������������������������������
Profit attributable to owners of parent�������������������������
Purchase of treasury shares�������������������������������������������
Disposal of treasury shares��������������������������������������������
Net changes in items other than shareholders’ equity���Total changes during period�����������������������������������������
Balance as of March 31, 2022...........................................
Changes during period:
Dividends of surplus����������������������������������������������������
Profit attributable to owners of parent�������������������������
Purchase of treasury shares�������������������������������������������
Disposal of treasury shares��������������������������������������������
Net changes in items other than shareholders’ equity���Total changes during period�����������������������������������������
Balance as of March 31, 2023...........................................

Share
capitalCapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity¥45,743¥38,352¥142,286¥(911)¥225,471(2,682)(2,682)

9,001
1

9,001
(4)

(4)

22

24

—

1

6,318

18

6,338

45,74338,353

148,605(893)

231,809(3,185)(3,185)

10,865

10,865

(0)

(71)

(71)

13

13

—

(0)

7,679

(58)

7,620

¥45,743¥38,353¥156,284¥(951)¥239,430

Millions of Yen
Accumulated other comprehensive income

28

Valuationdifference on
available-for-salesecurities

Deferred
gains orlosses onhedgesBalance as of April 1, 2021................................................ ¥15,099
Changes during period:
Dividends of surplus����������������������������������������������������
Profit attributable to owners of parent�������������������������
Purchase of treasury shares�������������������������������������������
Disposal of treasury shares��������������������������������������������
Net changes in items other than shareholders’ equity���(4,623)
Total changes during period�����������������������������������������
(4,623)
Balance as of March 31, 2022........................................... 10,476
Changes of during period:
Dividends of surplus����������������������������������������������������
Profit attributable to owners of parent�������������������������
Purchase of treasury shares�������������������������������������������
Disposal of treasury shares��������������������������������������������
Net changes of items other than shareholders’ equity��� (3,975)
Total changes during period����������������������������������������� (3,975)
Balance as of March 31, 2023........................................... ¥ 6,500¥(311)

Total accuRevaluation Remeasurements mulated otherSharereserve forof defined comprehensive acquisition
land
benefit plansincomerights¥8,286¥   559¥23,634¥47

Noncontrollinginterests

Total net
assets¥26¥249,179(2,682)
9,001
(4)
24

435

—

(769)

(4,957)

(8)

2

435

—

(769)

(4,957)(8)

2(4,964)
1,374

124

8,286

(210)

18,67638

29

250,554(3,185)
10,865
(71)
13

(276)

—

(1,009)(5,261)—

3(5,257)(276)—(1,009)(5,261)

—

3

2,363

¥(152)¥8,286¥(1,219)¥13,415¥38¥33¥252,917

Thousands of U.S. Dollars*
Shareholders’ equity

Balance as of March 31, 2022...........................................
Changes during period:
Dividends of surplus����������������������������������������������������
Profit attributable to owners of parent�������������������������
Purchase of treasury shares�������������������������������������������
Disposal of treasury shares��������������������������������������������
Net changes in items other than shareholders’ equity���Total changes during period�����������������������������������������
Balance as of March 31, 2023...........................................

Share
capitalCapitalsurplusRetainedearnings

TreasurysharesTotal shareholders’equity$342,567$287,224$1,112,896$(6,688)$1,736,007(23,852)(23,852)

81,367(0)81,367
(532)

(532)

97

97

—

(0)

57,508(434)

57,066$342,567$287,224$1,170,404$(7,122)$1,793,080

Thousands of U.S. Dollars*
Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Deferred
gains orlosses onhedgesTotal accuRevaluation Remeasurements mulated otherSharereserve forof defined comprehensive acquisition
land
benefit plansincomerightsBalance as of March 31, 2022........................................... $ 78,454
Changes during period:
Dividends of surplus����������������������������������������������������
Profit attributable to owners of parent�������������������������
Purchase of treasury shares�������������������������������������������
Disposal of treasury shares��������������������������������������������
Net changes in items other than shareholders’ equity��� (29,769)
Total changes during period����������������������������������������� (29,769)
Balance as of March 31, 2023........................................... $ 48,678$   929$62,053$(1,573)$139,864$285

Noncontrollinginterests

Total net
assets$217$1,876,387(23,852)
81,367(532)
97(2,067)—(7,556)(39,399)—22(39,369)(2,067)—(7,556)(39,399)—

22

17,696$(1,138)$62,053$(9,129)$100,464

$285

$247

$1,894,084* U.S. dollar figures have been translated at the rate ¥133.53 to U.S.$1, the prevailing market rate as of March 31, 2023.

29

Consolidated Statements of Cash Flows
The Musashino Bank, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2023 and 2022

Millions of Yen
2023
2022

Cash flows from operating activities
Profit before income taxes����������������������������������������������������������������������������
Depreciation������������������������������������������������������������������������������������������������
Impairment losses�����������������������������������������������������������������������������������������
Share of loss (profit) of entities accounted for using equity method��������������
Increase (decrease) in allowance for loan losses���������������������������������������������
Increase (decrease) in provision for bonuses��������������������������������������������������
Increase (decrease) in provision for bonuses for directors (and other officers)���
Decrease (increase) in retirement benefit asset����������������������������������������������
Increase (decrease) in retirement benefit liability������������������������������������������
Increase (decrease) in provision for retirement benefits for directors (and other officers)���
Increase (decrease) in provision for loss on interest repayment����������������������
Increase (decrease) in provision for reimbursement of deposits���������������������
Increase (decrease) in provision for point card certificates�����������������������������
Increase (decrease) in provision for contingent loss���������������������������������������
Increase (decrease) in provision for share-based compensation����������������������
Interest income��������������������������������������������������������������������������������������������
Interest expenses�������������������������������������������������������������������������������������������
Loss (gain) related to securities���������������������������������������������������������������������
Loss (gain) on money held in trust���������������������������������������������������������������
Foreign exchange losses (gains)���������������������������������������������������������������������
Loss (gain) on disposal of non-current assets������������������������������������������������
Net decrease (increase) in trading securities��������������������������������������������������
Net decrease (increase) in loans and bills discounted������������������������������������
Net increase (decrease) in deposits����������������������������������������������������������������
Net increase (decrease) in negotiable certificates of deposit���������������������������
Net increase (decrease) in borrowed money (excluding subordinated borrowings)���
Net decrease (increase) in due from banks (excluding due from Bank of Japan)���
Net decrease (increase) in call loans��������������������������������������������������������������
Net increase (decrease) in call money�����������������������������������������������������������
Net increase (decrease) in cash collateral received for securities lent��������������
Net decrease (increase) in foreign exchanges—assets�������������������������������������
Net increase (decrease) in foreign exchanges—liabilities�������������������������������
Net increase (decrease) in borrowed money from trust account��������������������
Interest received�������������������������������������������������������������������������������������������
Interest paid�������������������������������������������������������������������������������������������������
Other, net����������������������������������������������������������������������������������������������������
Subtotal������������������������������������������������������������������������������������������
Income taxes refund�������������������������������������������������������������������������������������
Income taxes paid�����������������������������������������������������������������������������������������
Net cash provided by (used in) operating activities������������������������Cash flows from investing activities
Purchase of securities������������������������������������������������������������������������������������
Proceeds from sale of securities���������������������������������������������������������������������
Proceeds from redemption of securities��������������������������������������������������������
Increase in money held in trust��������������������������������������������������������������������
Purchase of tangible fixed assets��������������������������������������������������������������������
Purchase of intangible assets�������������������������������������������������������������������������
Payments for asset retirement obligations�����������������������������������������������������
Net cash provided by (used in) investing activities������������������������Cash flows from financing activities
Dividends paid���������������������������������������������������������������������������������������������
Purchase of treasury shares���������������������������������������������������������������������������
Proceeds from sale of treasury shares������������������������������������������������������������
Net cash provided by (used in) financing activities������������������������
Net increase (decrease) in cash and cash equivalents��������������������������������Cash and cash equivalents at beginning of period������������������������������������Cash and cash equivalents at end of period�����������������������������������������������

¥ 15,548
3,730
34
(8)
(1,435)
(9)
0
(541)
(166)
8
(15)
(53)
1
(87)
3
(42,569)3,113
11
7(3,456)52
44(68,215)
117,413(7,220)(290,116)
46(22)
23,894(6,837)(3,556)172
2,021
41,955(2,804)(2,258)(221,315)
4(4,304)(225,615)¥ 13,421
3,087
45
(5)
(538)
(13)
25
(552)
(208)
(4)
1
(124)
12
(10)
2
(39,714)
1,053
(89)
4
(3,377)25
10(51,689)
171,244(48,100)
47,164(95)(202)(1,769)(2,682)
(543)
(5)
2,452
40,087(1,124)
1,836
129,62123(5,314)
124,330$   116,438
27,934255(60)(10,747)(67)
0(4,052)(1,243)
60
(112)
(397)
7
(652)
22
(318,797)
23,31382
52(25,882)389
330(510,859)
879,301(54,070)(2,172,665)
344
(165)
178,941(51,202)(26,631)
1,288
15,135314,199(20,999)(16,910)(1,657,418)
30(32,232)(1,689,620)(565,412)
269,334
220,853(8)(892)(1,433)(62)(77,621)(222,577)
84,26381,021(5)(11,570)(1,932)(11)(70,810)(4,234,344)
2,017,030
1,653,958(60)(6,680)(10,732)(464)(581,300)(3,185)(71)
13(3,244)(306,481)
790,130¥ 483,649(2,682)(4)
24(2,663)50,856739,274¥ 790,130(23,852)(532)
97(24,294)(2,295,222)
5,917,247$ 3,622,025* U.S. dollar figures have been translated at the rate ¥133.53 to U.S.$1, the prevailing market rate as of March 31, 2023.

30

Thousands of
U.S. Dollars*
2023

Directory
Organization Chart (as of July 1, 2023)
General Meeting of Shareholders

General Planning and Management Division
Strategic Planning Office
Alliance Management Office

Corporate Auditors
Board of Corporate Auditors
OutsideCorporate Auditors

Sustainability Promotion OfficeFinancial Affairs Office
Tokyo Office
Risk Management Division
Legal Affairs Office
Customer Service Promotion Office
Personnel Division

Board of Directors

Secretariat
Career Development Office
Health Support Office* and Representative Directors

Executive Committee

Senior Managing Directors*

President*
Managing Directors
Outside Directors

Human Resources Activities Promotion OfficeBusiness Management Division
Business Planning Office
Assets in Custody Promotion Office
Local Community Support Division
Community Value Creation Office
Solutions Marketing Division
Consulting Office
Digital Promotion Division
Credit DivisionCorporate Management Support OfficeInternational and Treasury Division
Global Business Advisory Office
Representative Office Registered in Singapore
General Affairs Division
Administration Division
Systems Management Office
Operation Services Division
Auditing Division

31

Board of Directors, Corporate Auditors and Executive Officers (as of July 1, 2023)
President

Managing Directors

Corporate Auditors

Managing Executive Officers

Executive Officers

Kazumasa Nagahori

Ken Otomo
Tsutomu Kainuma
Takao Miyazaki

Susumu Kurosawa (standing)Kazuhiro Wakabayashi (standing)
Tomio Kezuka (outside)
Hayato Yoshida (outside)
Akira Nakano (outside)

Manabu Okabe
Yutaka Amada

Masahiro Asano
Yukio Kurosu
Toshitaka Matsuura
Noboru Iijima
Kiyoshi Takizawa
Kenichi Komoriya
Yukinori Watanabe
Hiroshi Takeuchi
Kazuhide Kusao
Masahiro Koyama

Senior Managing Director

Toshiyuki Shirai

Directors

Ryuichi Mitsuoka (outside)
Yukimitsu Sanada (outside)
Ayako Kobayashi (outside)

Investor Information (as of March 31, 2023)
Number of Shares Held by Type of Shareholders

 uthorized: 80,000 thousand shares
A
Issued:33,805 thousand shares
Number of Shareholders 13,040
Common Stock

Financial instruments
business operators
1.48%

Major Shareholders
Name
The Master Trust Bank of Japan, Ltd. (trust account)

3,572

10.65

Custody Bank of Japan, Ltd. (trust account)

2,415

7.20

Custody Bank of Japan, Ltd. (trust account 4)

1,209

3.60

The Chiba Bank, Ltd.

925

2.75

QR Fund Investment Limited Partnership,
General Partner: QR Investment Co., Ltd.

914

2.72

Meiji Yasuda Life Insurance Company

735

2.19

Musashino Bank Industries Employees’ Stockholding Association

716

2.13

SUMITOMO LIFE INSURANCE COMPANY

702

2.09

Maeda Glass Co., Ltd.

602

1.79

Nippon Life Insurance Company

507

1.51

* Shareholding percentages are rounded down to two decimal places.

32

Number of
Shares held assharesa percentage of(Thousands total outstandingof shares)
shares (%)

Other corporations
22.16%

Individuals
and others
21.22%

Foreign companies
and others
14.84%

Financial institutions
40.30%

Notes: 1. Some treasury stock is contained in “Individuals and others.”
2. “Other corporations” includes shares under the name of Japan
Securities Depository Center, Inc.

10-8, Sakuragi-cho 1-chome,
Omiya-ku, Saitama 330-0854
Phone: +81-48-641-6111

Brand Message

The Musashino Bank’s brand message is “More for You.”
The Bank personnel always ask themselves“What can I do for everyone?” and“What kind of service do I want to give everyone?”“Everyone” includes the Bank’s customers,
the members of local communities, our shareholders,and friends of the Bank, together with their families.
Accordingly, the Musashino Bank aspires to provide
everyone with better services and to contribute to
our local communities.