INTEGRATED REPORT 2022

INTEGRATED REPORT 2022

英文

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ブランドマーク

1-1, Hakata-ekimae 3-chome, Hakata-ku,
Fukuoka, 812-0011, Japan
Phone: +81-92-461-1867

和文

英文This brochure is printed on "Kininaru Kami" paper using vegetable oil ink.
"Kininaru Kami" is made from timber thinned from forests in Fukuoka andother parts of the Kyushu Region.

Printed in Japan

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Group Management Philosophy
Aiming high and motivated by pride in our services, we are committed to becoming a leading financial group through our ability
to respond to change and to grow with our customers

Group Brand Slogan

Contents
Profile of the Company (Joint Holding Company)/Organization Chart�����������������

02

Board of Directors of Nishi-Nippon Financial Holdings������������������������

03

Outline of the Nishi-Nippon Financial Holdings Group������������������������

04

Providing Broader/Deeper Support for International Business��������������������

05

Strengths of the Nishi-Nippon Financial Holdings Group�����������������������

06

A Brief Sketch of Our Operating Base�������������������������������

08

Financial/Non-Financial Highlights��������������������������������

10

Message from the President�����������������������������������

12

Value Creation Process/Medium-Term Business Plan������������������������

18

Growth Strategy: (i) Reinforcement of the Collective Strength of the Group���������������

20

Growth Strategy: (ii) Human Resource Strategy���������������������������

22

Growth Strategy: (iii) Digital Strategy�������������������������������

24

Special Feature: Work Reform����������������������������������

28

Growth Strategy: (iv) Initiatives for the SDGs and ESG������������������������

30

Editorial Policy

Corporate Governance�������������������������������������

42

The Nishi-Nippon Financial Holdings, Inc. (NNFH) has put together this Integrated Report 2022 in a bid to help investors andother stakeholders understand the initiatives by the NNFH Group to sustain business growth and create value. It has been
compiled with reference to the International Integrated Reporting Framework released in December 2013 by the International
Integrated Reporting Council (IIRC), bringing together financial and non-financial information, including management philosophy,
management plans, and ESG (environmental, social, and governance) information.
Scope of Report
Period covered: April 2021 to March 2022 (Some subsequent information is also included.)
Organizations covered: The Nishi-Nippon Financial Holdings, Inc. and its subsidiaries and affiliates

Risk Management���������������������������������������

46

Compliance������������������������������������������

50

Initiatives for Improving Customer Satisfaction���������������������������

52

Communication with Shareholders and Investors��������������������������

54

Management of Securities and Status of Cross-Shareholdings��������������������

56

Cautionary Statement Regarding Forward-Looking Statements

Financial Information��������������������������������������

58

The Report contains statements about the NNFH Group’s future operating results. These forward-looking statements are nota guarantee of future performance but involve risks and uncertainty. Please note that actual results could differ from thoseindicated due to a variety of factors, including changes in the operating environment.

Outline of Banking Subsidiaries����������������������������������

62

Organization Chart of Banking Subsidiaries����������������������������

63

Sincere Relationships, Best Solutions
Meaning behind Our Logo

英文

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Our logo uses the motif of the “Sun,” the energy which creates our future, and the vibrant image of “Wings.” The radiating wings
symbolize the infinite future. And the color gradation from light to dark orange expresses the Nishi-Nippon Financial HoldingsGroup’s commitment to evolving and transforming itself toward the future.

Notes
1. Amounts have been rounded down to the nearest unit in principle.
2. Conversion into U.S, dollars (solely for the convenience of readers outside Japan) has been made at the exchange rate of¥122.39 to $1.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

1

Profile of the Company (Joint Holding Company)

Board of Directors of Nishi-Nippon Financial Holdings

Name: Nishi-Nippon Financial Holdings, Inc.
Location

1-1, Hakata-ekimae 3-chome, Hakata-ku, Fukuoka, Japan

Business

Management and operation of banks and other companies that NNFH may have as
subsidiaries under the Banking Act and any all businesses incidental or related thereto.

Capital50 billion yen

Date of establishment

October 3, 2016

Fiscal year end

March 31

Stock exchangeTokyo Stock Exchange Prime Market and Fukuoka Stock Exchange Main Board

Share-trading unit

100 shares

Credit Ratings

R&I: A (Stable)
JCR: A (Positive)(As of 30th June, 2022)

Chairman

Deputy Chairman

President

Isao Kubota

Hiromichi Tanigawa

Hideyuki Murakami

Chairman���������������������� Isao Kubota
Deputy Chairman������������������� Hiromichi Tanigawa
President���������������������� Hideyuki Murakami

Organization Chart

Directors����������������������� Kiyota Takata
Takashige Honda
Directors (Audit and Supervisory Committee Members)��� Kiyotaka Tomoike
Toshio Sakemi (outside)
Chiharu Kubo (outside)

Nishi-Nippon Financial Holdings, Inc.

Sachiko Miyamoto (outside)
General Shareholders’ Meeting

Nomination and Remuneration
Advisory Committee

Board of Directors(As of 30th June, 2022)

Audit and Supervisory
Committee* Directors/Audit and Supervisory Committee Members Toshio Sakemi, Chiharu Kubo, and Sachiko Miyamoto are Outside Directors as prescribed in Article 2 (xv) of the Companies Act of Japan.
* The name of Director (Audit and Supervisory Committee Member) Ms. Sachiko Miyamoto on the family register is Sachiko Miki.

Audit and Supervisory
Committee Members Office

Major Shareholders (Common Stock)
Name
Executive Committee

Group Strategy Planning
Division

Compliance & Risk
Management DivisionCorporate Planning
DivisionInternal Audit Division(As of 30th June, 2022)

Shares held (thousands) (Note 1)(%) (Note 2)

The Master Trust Bank of Japan, Ltd. (Trust Account)

18,501

12.81

Custody Bank of Japan, Ltd. (Trust Account)

11,936

8.27

Custody Bank of Japan, Ltd. (Trust Account No.4)

6,628

4.59

Nippon Life Insurance Company

2,780

1.92

Meiji Yasuda Life Insurance Company

2,765

1.91

The Nishi-Nippon City Bank Employee Shareholding Association

2,442

1.69

Aso Corporation

2,410

1.66

Resona Bank, Ltd.

2,200

1.52

JA Mitsui Leasing, Ltd.

2,017

1.39

Sumitomo Life Insurance Company

1,959

1.35

Total

53,64237.16(As of 31st March, 2022)

Notes: 1. The figures are rounded down to the nearest thousand.
2. Shareholding ratio (excluding treasury Shares)

2

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 20223

Outline of Nishi-Nippon Financial Holdings Group

Providing Broader/Deeper Support for International Business

Strengths as a “Comprehensive Financial Group”

The NNFH Group supports local businesses by addressing their requirements for doing business in
Asia and other parts of the world. To this end, the NNFH Group offers consulting services that go
beyond the definition of financial support, together with advanced products/services, through allianceswith local partners and specialists with experience in international business.

The NNFH Group has adopted a “parallel” structure whereby NNFH serves as a “control tower”to direct and guide each Group
company whilst also assuming a birds-eye perspective in order to oversee them across the board, thereby building amanagement framework that allows this comprehensive financial group to best exploit its strengths.

Holding company
Nishi-Nippon Financial Holdings, Inc.

Banking
The Nishi-Nippon City Bank, Ltd.

Management and maintenance ofinvestment partnership assets
NCB Venture Capital Co., Ltd.

Banking
The Bank of Nagasaki, Ltd.

Information system service
NTT Data NCB Corporation

Credit cards, credit guarantee
The Kyushu Card Co., Ltd.

Payment Service
Japan Payment Service CO., LTD.

Financial instruments exchange
Nishi-Nippon City Tokai Tokyo Securities Co., Ltd.

Credit guarantee
Nishi-Nippon Credit Guarantee Co.

Nishi-Nippon
City Bank• International Business Support Office, International Business Div.
Support for international business provided by personnel with professional skills and know-how• “NCB Forex Super Direct”, “NCB Direct Forward Exchange Contracts”
A broad range of forex transactions, including foreign remittance and application for/inquiry on import letters ofcredit via the internet.

• International Consultation Office
Finely tuned support for overseas expansion offered by personnel with extensive international experience throughcollaboration with international partner financial institutions, lawyers, insurance companies, etc.
NCB Research &• “Door to Asia” (website)
Consulting
Detailed information provision• Asia Business Seminars
Sponsorship of seminars on international business
Kyushu Card

Research studies, management consultancy,
Fee-charging employment placement business
NCB Research & Consulting Co., Ltd.
Claims servicing
Kyushu Servicer

Multifaceted windows for international business support• A variety of credit cards
Support for all major cards, including VISA, MasterCard, JCB, AMEX, and UnionPay

NCB Venture Capital Co., Ltd.
and Japan Payment Service
CO., LTD. are consolidated,
non-equity method subsidiaries.
NTT Data NCB Corporation isan equity-method affiliate.

Broad area coverage by our overseas bases and partner institutions(As of 30th June, 2022)

Bank of China
Shinhan Bank
JBIC
Shanghai Representative OfficeGroup Management Strategy
Under the holding company structure, we will promote two Group Management Strategies: “Development of comprehensive
financial services that exceed the expectations of customers and host communities (Realization of matrix management)” and“Advancement of a group management framework and risk management system (Realization of a monitoring model).”Hong Kong Representative Office

The holding company, from thestandpoint of meeting individual
customer needs, will develop
strategies that embrace theentire group.

Development of comprehensive financial
services that exceed the expectations ofcustomers and host communities(Realization of matrix management)

Advancement of a group management
framework and risk management system(Realization of a monitoring model)

TAITRAHKTDC

Bangkok Bank

Matrix management

The Bank of Yokohama

OCB
BNP Paribas

Monitoring model
The holding company will
demonstrate its oversightfunction over the subsidiaries
while continuously monitoring
their business execution.

Nishi-Nippon City Bank’s overseas operations..........................................3 in Asia

Representative Office Registered in Singapore

Partner financial institutions...................................9 institutions

DBS Bank(7 foreign, JBIC, and Bank of Yokohama)Bank Resona Perdania

Partner institutions...................................2 institutions(As of 30th June, 2022)* Nishi-Nippon City Bank concluded Basic Agreement for Overseas Business Support Services with The Bank of Yokohama in September 2016.

4

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

5

Strengths of the Nishi-Nippon Financial Holdings GroupA Solid Customer Base Built upon Mutual Trust
Number of main customers (current as of 31st March, 2022)

Nishi-Nippon City Bank

22,773Financial Service for the
Benefit of Local Communities% of loans by prefecture
KyushuNishi-Nippon
City Bank

Fukuoka Prefecture

87.8% 78.0%% of loans to SMEs, etc.

Nishi-Nippon
City Bank

78.7%(current as of 31st March, 2022, excluding loans to the Ministry of Finance, Japan)

Under the belief that “Without regional development,
there will be no growth of the Group,” the NNFH Groupremains committed to developing and supporting local
businesses and industries.
The Nishi-Nippon City Bank preferentially caters to its
host region, with approximately 90% of its borrowers
based in the Kyushu region and 80% in Fukuoka
Prefecture, and approximately 80% of its borrowers are
SMEs or individuals. The Nishi-Nippon City Bank makes
a fair assessment of the feasibility of their businesses andgrowth potential and, if needed, suggests solutions andprovides support.

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Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Extensive Global Network
Japan

Since its foundation in October 2004, the Nishi-Nippon
City Bank, Ltd., the primary subsidiary of Nishi-Nippon
Financial Holdings, Inc. (NNFH), has continuously
expanded its scale of operations. It now boasts total
assets of 12,821,700 million yen, a balance of deposits
and negotiable certificates of deposit (NCD) of 9,591,900
million yen, a balance of loans of 8,236,000 million yen,and 22,773 main customers (current as of 31st March,2022).
The Kyushu Card Co., Ltd., on the other hand, offers
full brand settlement services to support all majorinternational credit card brands, thus building one of thelargest customer bases among bank-affiliated credit cardi s s u e r s . I t h a s 942,000 c a r d m e m b e r s , 60,000
merchants, and a transaction volume of 393,900 million
yen (current as of 31st March, 2022, except thetransaction volume, which is for fiscal year ended 31st
March, 2022).

Nishi-Nippon City Bank

Bank of Nagasaki

Nishi-Nippon City Tokai Tokyo Securities*The number does not include online
branches and in-store branches.

Nishi-Nippon
City Bank

3,422 cases / ¥83.5 billionR ecipients of The Excellent Executive Award(current as of 30th April, 2022)

Total :

177 executives

Having started as a financial service catering exclusively
to small- and medium-sized enterprises, the NNFH
Group maintains the unaltered DNA of developing SMEs.
The Nishi-Nippon City Bank remains committed tosupporting business startups in a bid to create industries
and jobs in the region; listening carefully to the needs ofmany SMEs, including fledgling businesses, they offer
finely-tuned support. For fiscal 2021, their support was
extended to 3,422 startups and second startups, withthe total amount of loans reaching 83,500 million yen.
Since 1973, they have granted the Excellent Executive
Award to outstanding business managers who haveprovided distinguished services to the development of theregional economy via the Prize of Excellent Executive. A
total of 177 executives have been commended thus far.

locations*23

locations13

outlets(current as of 30th June, 2022)

Overseas

3

Nishi-Nippon City Bank’s
overseas operationsin Asia

Partner financial institutions

9

institutions

Partner institutions

2

institutions

1,150,000

downloads

DNA of Developing SMEs
N
 umber/amount of loans support
startups and second startups (fiscal 2021)

159

The NNFH Group has built an extensive network thatspans domestic and international locations.
In Japan, we maintain a network of sales locations forbanking and brokerage services in Fukuoka, Kyushu, tooffer services with a “human touch” that can only bedone through physical channels. Meanwhile, we are keen
to enhance convenience for customers by strengthening
the functions of our digital channels: the Nishi-Nippon
City Bank app, a smartphone app for retail customers
and the “NCB Business Station,” a platform for corporate
customers.
Overseas, we meet customers’ needs for theirbusiness in Asia and elsewhere at the Nishi-Nippon City
Bank’s three overseas operations in Shanghai, Hong
Kong, and Singapore and through collaboration with ourpartner institutions and experts in respective regions.

The Nishi-Nippon City Bank app(current as of 31st March, 2022)

Total :A Group Capable of Offering
Comprehensive Financial Services

Collaboration with Partner Companies
and External Organizations

In October 2016, the Nishi-Nippon City Bank and six
other companies transformed themselves to establish aholding company (NNFH) to further bolster their collective
strengths. With seven subsidiaries offering a diverse
range of distinctive services in parallel, including banking,financial instruments exchange, and credit cards, under
its umbrella, the NNFH Group offers comprehensive
financial services. Implementing matrix management,
which oversees business activities by each Group
company in an integrated manner, the new Groupstructure makes it possible to offer a broad range offinancial services.
On the premise of the relevant authorities’ approval,
City Ascom Co., Ltd., a top-class ICT company inKyushu, and Kyushu Leasing Service Co., Ltd., a leasing
company with the largest business scale in Kyushu, will
join the NNFH Group in October 2022. With the additionof two functions, digitalization/digital transformation (DX)solutions and leasing, we will evolve into a regional
financial group that offers a diverse range of solutions
beyond the scope of finance.

The NNFH Group enjoys close ties with a group of
influential companies with a diverse array of businesses,
which allow us to respond to a broad spectrum ofcustomer needs through alliances with such external
partners, as well as our Group companies.
Among the partner companies are City Ascom Co.,
Ltd. and Kyushu Leasing Service Co., Ltd., mentioned on
the left, and Nishi-Nippon Yuukoh shoji, Inc., one of thelargest insurance agents for financial institutions in the
Kyushu region.
We are also proactive in forming open and innovative
partnerships and alliances with external companies, local
governments, universities, and others, with a view toward
providing diverse and advanced services and revitalizing
the local economy.
Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

7

A Brief Sketch of Our Operating Base
- An Unmatched Potential of Fukuoka, Kyushu -Fukuoka and other areas in the Kyushu Region, the NNFH Group’s main market, offer anumber of favorable business opportunities, including a strong economy and series oflarge-scale urban redevelopment projects.

KyushuThe Kyushu region
accounts for 10% of Japan’s economy.

Kita-Kyushu City

Kita-Kyushu City’s approach to create “harmony
between industry and environment” has been met withgreat acclaim both in Japan and abroad.
Designated as an SDGs Model City by the OECD (2018)
Designated as an SDGs Future City and an Environmental Future City by the Japanese government (2018)
Became the sole winner of the Grand Prize (also a winner of digital human resource development
section, administrative job/service reformation section, and the local industry digitalization promotion
department) in the 1st Nikkei municipality DX award (2022)

A robust economy of a size (national share) smaller only than
the three major metropolitan areas
Population (2021)
Nominal GDP within Number of businessthe region (2018)
offices (2019)

Signed an agreement on cooperation for the achievement of the SDGs with Kita-Kyushu City
12,884K¥47 trillion

10.2%

8.4%

In January 2020, the Nishi-Nippon City Bank and Kita-Kyushu City agreed to support regional businesses’ SDGs
initiatives toward the shared target of achieving the SDGs.

650K

10.2%

Fukuoka City

Kyushu maintains close mutual relationships
with fast-growing Asian countries.
Kyushu hosts a diverse range of industries.
Automobiles

Unit production of automobiles in the Kyushu region
National market share: 14% (2021)

Agriculture

Agricultural production value in the Kyushu region
National market share: 19% (2020)

Semiconductors

Production value of integrated circuits (ICs) in the Kyushu region
National market share: 40% (2021)

Fukuoka City’s population growth rate (4.8%) is thehighest among government ordinance cities.
* Growth between 2015 and 2020

Source: 2020 Population Census, Statistics Bureau of Japan

Fukuoka City plays host to universities and othereducational institutions

Fukuoka has the largest number of schools per 100,000 persons in Japan (2015)* A comparison of the number of schools (universities, graduate schools, junior colleges, colleges of technology, and specialized training colleges)
in the 21 large cities, including government ordinance cities and special wards of Tokyo

Source: Fukuoka Facts, Fukuoka City

Fukuoka City ranks highest among 21 large city areas inJapan at 7.2% in terms of the startup rate

Source: Summary of Kyushu economy, Kyushu Bureau of Economy, Trade and Industry

Increasing capital expenditures for semiconductor-related facilities* FY2020. National average: 5.1%

Large-scale capital expenditures have been increasing in Kyushu to boost semiconductor
production. Most notably, Taiwan Semiconductor Manufacturing Company Limited (TSMC),
a global semiconductor manufacturer, established a subsidiary in Kumamoto Prefecture.

Nagasaki Prefecture

Source: Overview of Fukuoka City’s Economy, Economy, Tourism & Culture Bureau, Fukuoka City

Fukuoka Prefecture

Nagasaki Prefecture has awealth of tourism resources.

Fukuoka Prefecture accounts
for 40+% of Kyushu’s GDP.

Registered as UNESCO’s World Cultural Heritage

Fukuoka Prefecture driving the Kyushu economy-S ites of Japan’s Meiji Industrial Revolution (2015)-H
 idden Christian Sites in the Nagasaki Region(2018)Of 370,000 SMEs based in the Kyushu region,

The Nishi-Kyushu Shinkansen (between
Takeo-onsen and Nagasaki) will begin service
in 2022

8

Nishi-Nippon Financial Holdings Group

130,000 are in Fukuoka (2016).
Source: 2022 White Paper on Small and Medium Enterprises inJapan, The Small and Medium Enterprise Agency

INTEGRATED REPORT 2022

Fukuoka City plays host
to many urban
redevelopment projects.

Project Names

Hakata ConnectedTenjin Big Bang

Construction investment

Knock-on effect/year¥260.0 billion ¥500.0 billion¥290.0 billion ¥850.0 billion
Source: Fukuoka City

Relocated to the Tenjin Business Center, the first project ofTenjin Big BangIn November 2021, the NNFH Group relocated the following offices to the Tenjin
Business Center, completed as the first project of Tenjin Big Bang deregulation initiative.
The Nishi-Nippon City Bank
Tenjin Branch, Tenjinkita Branch, NCB Alpha Tenjin Branch
Nishi-Nippon City Tokai Tokyo Securities
Headquarters, Tenjin Branch

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

9

Financial/Non-Financial Highlights

Financial Highlights

Non-Financial Highlights

Ordinary income

Profit attributable to owners of parent

Balance of deposits/NCD(consolidated)(consolidated)(two banks combined)

Number of private
customers
Two banks
combined¥37.8 billion¥24.2 billion¥9,854.6 billion

4,154

Kyushu Card
(membership)

K

942
35

Nishi-Nippon City
Tokai Tokyo Securities

Two banks
combined

139

K

Kyushu Card
(member stores)

K

Nishi-Nippon City
Tokai Tokyo Securities
NCB Research &Consulting (membership)

FY2019FY2020

FY2021FY2019FY2020

FY2021

31st March, 31st March, 31st March,
2020
2021
2022

Balance of loans

Balance and % of loans to SMEs*

Management of client assets(two banks combined)(two banks combined)(Group total)

Number of main customers

Number of corporate
customers(Nishi-Nippon City Bank)

K

60
3
5

K
K
K

22,773(as of 31st March, 2022)(as of 31st March, 2022)(as of 31st March, 2022)

Number/amount of loans to support
startups and second startups(Nishi-Nippon City Bank)

Recipients of The Excellent
Executive Award*

the Nishi-Nippon City Bankapp

* excluding loans to the Ministry of Finance, Japan

¥8,512.0 billion
31st March, 31st March, 31st March,
2020
2021
2022

31st March, 31st March, 31st March,
2020
2021
2022

31st March, 31st March, 31st March,
2020
2021
2022

Ratio of loans subject to mandatory disclosure ofclaims under the Financial Reconstruction Law(two banks combined)

Capital adequacy ratio

OHR(consolidated)(consolidated)

1.64 %

9.28 %

64.2%

31st March, 31st March, 31st March,
2020
2021
2022
10

78.8 %¥1,116.9 billion¥6,414.4 billion

Nishi-Nippon Financial Holdings Group

31st March, 31st March, 31st March,
2020
2021
2022

INTEGRATED REPORT 2022

FY2019FY2020

FY2021

3,422 cases¥83.5 billion

Total:

177 executives

Total:

1,150,000*Granted by the Prize of Excellent Executive

downloads(FY2021)(January 1973-April 2022)(as of 31st March, 2022)

Number/amount of SDGs
supporting loans(two banks combined)

Number/amount of SDGs Private
Placement Bonds underwritten(Nishi-Nippon City Bank)

Reduction of CO2 Emissions*899 cases / Total: 369 cases /Total:¥32.1 billion¥32.1 billion(as of 31st March, 2022)(Nishi-Nippon City Bank)

Vs. FY2013-36.4 %* As measured according to the standards on periodical
reports stipulated in the Act on the Rational Use of Energy(as of 31st March, 2022)
Nishi-Nippon Financial Holdings Group(FY2021)
INTEGRATED REPORT 2022

11

Message from the President

Demonstrate the Group’s
Collective Strength to Help
Solve Regional Issues
Introduction

It gives me great pleasure to report on the businessperformance of Nishi-Nippon Financial Holdings, Inc.
(NNFH) for the fiscal year ended 31st March, 2022.
I believe that currently the key concern for the NNFH
Group (the Group) in terms of its management strategies is
how we will address social challenges, including the
Sustainable Development Goals (SDGs); Environmental,
Social, and Governance (ESG) issues; and digitaltransformation (DX), given Japanese society’s steadily
declining and aging population, and low birthrate.
As a means of dealing with such major changes insociety, we have made solid progress in strengthening theGroup’s management foundation by implementing thestrategies and measures I describe hereafter. It is fair tosay that we have now largely established the optimal setup
for providing solutions to customers.
All Group companies will continue seeking solutions tosocial challenges and improving the Group’s performanceand enterprise value by striving to improve themselves,
while collaborating ever more closely to enhance thequality of the solutions they provide to customers.

Overview of the Japanese Economy and
the Kyushu Economy

During fiscal 2021 (the fiscal year ended 31st March,2022), the prevailing trend of Japan’s economy was
toward recovery, although there was a stage during which
growth in consumer spending and production weakened
due to the effects of the novel coronavirus disease(COVID-19) and worldwide supply constraints, among
other factors. Despite the progress toward recovery,
however, around the end of the fiscal year, the mood of
uncertainty regarding future prospects intensified as thesituation in Ukraine grew increasingly tense.
The economy in our home territory of Kyushu
demonstrated the same trends as the national economy.

The Second Year of the MTBP in Review

Fiscal 2021 was the second year of our Medium-TermBusiness Plan, “Leaping Forward 2 0 2 3 -Creating
Vibrancy to the Region and Beyond-”(the MTBP),
which commenced in April 2020. During the year, we
kept a close watch on changes in our external
environment resulting from the COVID-19 pandemic

12

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

and maintained a sense of urgency as we focused on
measures such as providing hands-on support forcustomers, reinforcing the collective strength of theGroup, accelerating digital strategy and work reform,and strengthening initiatives for the SDGs and ESG.
If we look at the numbers for fiscal 2021, our net
income increased by 6.1 billion yen year-on-year to 24.2
billion yen. Contributory factors included an increase in
net business profits, primarily as a result of higher net
interest income and net fee and commission income, as
well as reduced credit costs.
Looking back on fiscal 2021, our business environment
remained extremely opaque, as the COVID-19 pandemic
persisted and Russia’s invasion of Ukraine led toincreased geopolitical risk, while negative interest rates
continued adding downward pressure on our earnings.
The business environment we faced was extremely
difficult to navigate, but we pushed ahead with efforts toimplement measures under the MTBP, including
provision of “One to One Solutions” to corporate andretail customers, strengthening management of
securities, and accelerating work reform. And I think ourfiscal 2021 financial results demonstrated the success ofthese strategies and measures. This being the case, I
regard our financial performance for the year as positive
evidence that the benefits of measures implemented inline with the MTBP led directly to actual results.

Reinforcement of the Collective Strengthof the GroupThe Group has strived to bolster its collective strength bystrengthening its capabilities in a variety of ways inanticipation of future changes in the businessenvironment. Efforts to that end include establishing
Kyushu’s first securities firm connected to a regional bank(Nishi-Nippon City Tokai Tokyo Securities Co., Ltd.),
moving to a holding company structure with NNFH at its
head, and establishing a payment services company(Japan Payment Service CO., LTD.).
In addition, NNFH plans to make City Ascom Co., Ltd.
a consolidated subsidiary, and Kyushu Leasing Service
Co., Ltd. an equity-method affiliate, aiming to do so in
October 2022, assuming we can obtain the relevant
authorities’ approval.

Hideyuki Murakami
President
Nishi-Nippon Financial Holdings, Inc.
(Concurrently President of The Nishi-Nippon City Bank, Ltd.)

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

13

Message from the President

City Ascom operates an ICT business, and Kyushu
Leasing Service operates a leasing business; both areamong the largest companies of their kind in Kyushu.
For us, it is extremely valuable to gain the two newcapabilities of digitalization/DX solutions and leasing, as
it will greatly increase the number of customer issues we
can deal with inside the Group, dramatically enhancing
the Group’s collective strength.
We are determined to take maximum advantage ofthe know-how, customer bases, and networks of theGroup and these two companies, thereby reinforcing theGroup’s collective strength and providing solutions
beyond the scope of finance to support customers insolving their issues.

Human Resources Strategy
Since becoming president at NNFH, I have constantly
reiterated that I want the NNFH Group to be a diverse andvibrant organization. In a time of change like this, for us tolive up to our Group Management Philosophy and“respond to change and grow with our customers,” it isindeed vital that ours is a diverse and vibrant organization.
For many years the Group has invested effort indevelopment of human resources, promotion of diversity,and other initiatives to enable talented personnel of all
kinds to participate actively in the workplace.
The Group sought to increase customers’ satisfaction
and offer them inspiring experiences by setting provisionof customer-oriented “One to One Solutions” as a basic
strategy within the MTBP; we are using physical (“humantouch”) and digital solutions to conduct business activities
committed to a customer-oriented approach.
As an initiative involving the human touch, during thecurrent fiscal year we started a new program that
supplements our existing human resource development
for each job class by systematically developing strategic
human resources in the form of consulting, DX, andplanning personnel who will build the future of the Group.
We are using the program for such systematic humanresource development by supporting the acquisition ofvarious challenging qualifications and providing on-the-job
training (OJT) in specialized organizations within the bank,as well as dispatching employees to business schools, orto specialist companies outside the bank.
In recent years, we have aggressively recruited new
graduates with natural science degrees, as well as a wide
range of mid-career professionals.
For the Group to sustain its business growth, allemployees must be given equal
opportunities to shine, regardless of theirgender. As a result of our efforts to that
end, including expansion of the work-lifebalance program, I am pleased to reportthat the number of female managers has
increased by around 130, from 69 to 200,
over the last ten years. Furthermore, theratio of women at the assistant manager
level, who are future candidates for
management, has increased to 55%, so I
am sure that the ratio of female managers
will continue to increase substantially.

Digital Strategy
Our initiatives in the digital sphere entail
providing optimal “One to One” solutions
to customers by focusing on thedevelopment of DX personnel, strategic
system investments, and alliances withexternal partners as the foundation forstrengthening the functions of digitalchannels and centrally managing customer
information.
In fiscal 2022 we will commence ourdevelopment of DX personnel in earnest,
aiming to build a portfolio of DX personnel
during the next MTBP, starting with 2,000
DX base members (employees who haveacquired IT Passports qualifications).
14

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Medium-Term Business Plan Leaping Forward 2023 - Creating Vibrancy to the Region and Beyond - Basic Strategies and Priority Measures
Basic strategy

1. Demonstrating the Group’s collective strength with which to lead the regional development [Revitalizing the regional economy](1) Supporting business startups to create industries and jobs in the region

Priority
measures(2) Showing leadership in regional development(3) Building a support structure to address regional issues(4) Social services designed to enhance regional appeals

Basic strategy
Priority
measures
Basic strategy

2. Providing customer-oriented “One to One Solutions”[Increasing customer satisfaction](1) Building a structure for providing customer-oriented solutions(2) Providing solutions to corporate customers(3) Providing solutions to retail customers

3. Innovating resources for sustainable growth[Solid management foundation](1) Accelerating work reform

Priority
measures(2) Strategically re-allocating management resources(3) Strengthening management of securities(4) Reinforcing forward-looking strategic investments(5) Developing HRs who challenge themselves and reforming the corporate culture
Target management indices (FY 2022)¥21.5 billion

Consolidated net income*1% of non-interest-earnings*2

Approx. 22%
60–69%
Approx. 10%

Consolidated OHR
Consolidated adequacy ratio*1 Net income attributable to owners of parent*2 (Net fee and commission income + Net trading income + Net other operating income excluding net gains (losses) related to bonds and the cost of currency swaps) / Gross operating profit(all consolidated numbers)

Since the release of the Nishi-Nippon City Bank app
as a service for retail customers in 2015, we haveconstantly added new functions, and by the end of
March 2 0 2 2, the cumulative number of downloads
topped 1.15 million. As the number of app users steadily
grows, the app usage rate for various transactions is
also increasing. During fiscal 2022, we plan to add afunction for opening investment trust accounts andconducting buying and selling transactions using thoseaccounts. We intend to continue expanding the app’s
functions in order to both improve convenience forcustomers and increase our own operational efficiency
and earnings.
We are also focused on adding functions to NCB
Business Station, the digital platform we offer as aservice for corporate customers. During fiscal 2022, weplan to add functions including transaction lending andaccount aggregation to NCB Business Station. These
new functions will dramatically increase the convenienceof this platform.
We are addressing the need to digitalize amongcorporate customers by leveraging the specialist
knowledge of external partner businesses, having
established the Digital Solutions Team in October 2020.
We will continue to provide DX-related support that iscustomized for each individual customer, drawing on thedevelopment capabilities of prospective Group company
City Ascom.

Work Reform
The work reform initiatives commenced by the NishiNippon City Bank in April 2018 comprise three key pillars:“work flow innovation,” “digital innovation,” and “resource
innovation.” Measures such as thoroughly reviewing
operations and reallocating resources are bringing abouta massive qualitative change throughout the entire
organization.
Specific measures involve thoroughly streamlining thework flow; digitalizing operations through the strategic useof tablet computers, RPA (Robotic Process Automation),and other techniques; and optimizing branch functions. In
conjunction with this, we reallocate the personnel freed upby these measures to priority fields such as IT and digital,
corporate solutions, and management of securities.
The roll-out of these initiatives across other Group
companies is now fully under way.
The Nishi-Nippon City Bank’s efforts to reduce
paperwork at its Headquarters and branches andreallocate personnel to priority fields are proceeding fasterthan planned, and the MTBP’s three-year target has beenachieved ahead of time. What is more, these work reform
initiatives have contributed substantially to raisingproductivity throughout the entire Group, as indicatedespecially by the remarkable improvement in consolidated
OHR.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

15

Message from the President

Going forward, we will continue reducing paperwork
and reallocating personnel to priority fields byimplementing measures to improve efficiency further,
thereby raising productivity.

Initiatives for the SDGs and ESG
The Group prioritizes contributing to the realization of asustainable society in its management strategies, and has
committed to this in the Nishi-Nippon Financial HoldingsGroup Sustainability Declaration.
In fact, we have always believed that “Without regional
development, there will be no growth of the Group,” andhave remained committed to a diverse range ofcommunity services in addition to offering solutions
addressing regional challenges, such as developing andsupporting local businesses and industries, and funding
environmental projects.
In March 2022, we started using the term “sustainablefinance” to describe support for business startups, lendingfor environmental projects, and other financing that
contributes to the realization of a sustainable society. We
announced a target of providing a cumulative total of 2
trillion yen in sustainable finance during the period fromfiscal 2021 to fiscal 2030. In conjunction with this, welaunched our own initiative to address climate change asa Group, setting a CO2 emissions reduction target withthe aim of achieving carbon neutrality by fiscal 2030.
Looking ahead, the Group will continue contributing to
the achievement of a sustainable society by addressing
various environmental and social challenges, and working
alongside customers and host communities to solvethese challenges.
● Initiatives
for the Environment and Climate

ChangeIn August 2021, the Sixth Assessment Report of theIntergovernmental Panel on Climate Change (IPCC)
affirmed that humans are the cause of global warming,
stating “It is unequivocal that human influence has
warmed the atmosphere, ocean and land,” and thisstatement was widely reported in the news.
In Kyushu, the damage caused as a result of torrential
rains in July 2020 is still fresh in our minds: the downpourscaused flooding of the Chikugo River, the Kuma River,and other rivers all over Kyushu.
Many countries, including Japan, have set carbon
neutrality in 2050 as a long-term target, and Japan has
also set a medium-term target of reducing its greenhousegas emissions by 46% in fiscal 2030 from its fiscal 2013
levels, and continuing strenuous efforts in its challenge tomeet the lofty goal of cutting its emission by 50%.
National and local governments, business enterprises,
and individuals must continue making efforts to reduce

16

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

greenhouse gases (GHGs) and put a stop to global
warming.
In April 2021, the Group expressed its support for therecommendations of the Task Force on Climate-related
Financial Disclosures (TCFD), and with our Integrated
Report released last fiscal year, we started disclosing
information in line with the recommendations.
We remain committed to pursuing our own initiatives toaddress climate change as a Group, and will strive tofurther enhance information disclosure. We will also
actively support our customers in implementing measuresthat contribute to decarbonization.
● SupportingCorporate Customers’ SDGs/ESG

Initiatives
For our corporate customers, we aim first to ascertain
their business challenges and establish a sharedunderstanding of these challenges, then to offer them theGroup’s broad range of solutions (i.e., provide hands-on
support for companies). In doing so, the key areas we
address include not only their general needs, such as theneed for cash flows, but also the societal trends andissues of the time, which for Japan at the moment include
the SDGs and ESG, DX, and business succession.
We support customers’ own initiatives to address the
SDGs and ESG issues through a diverse range ofsustainable finance and solutions catering to their own
individual operational scale and circumstances. Of
particular note are the SDGs supporting loans we started
offering in August 2021, which have been well received bymany customers and have made significant gains in termsof both the number and value of loans extended.
Going forward, we will focus on supporting ourcustomers’ decarbonization efforts in terms of bothfinancing and consulting, addressing everything frommonitoring their CO2 emissions to measures to reduce
those emissions.
● SupportingRetail Customers’ SDGs/ESG

Initiatives
For retail customers, we are looking ahead to the coming
era of 100-year lifespan and providing optimal solutions tomeet their needs in relation to issues such as building andpassing on their assets.
In May 2022, we undertook a major upgrade of the
Nishi-Nippon City Bank’s automated recommendation
system for investing assets on deposit, known as ASSETDIRECTION. This enables the bank to gain an overview of
the customer’s financial assets as a whole before offering
the optimal investment recommendations for that
customer calculated by AI.
We will continue to provide meticulous service closelyaligned with each individual customer’s specificrequirements regarding inheritance and the passing onof assets by offering a lineup of trust products to meettheir diverse needs in terms of gifting, preparing, anddividing their assets, and leaving a bequest.

We will remain committed to creating industries andjobs in the region through the provision of finely-tuned
support for startups and the utilization of funds.

● Initiatives
to Create Industries and Jobs in the

The operating environment that regional financial
institutions find themselves in is now more uncertain
than ever. Japan’s declining, aging population and low
birthrate, and the continuing low interest rateenvironment are now compounded by additional
problems, such as the prolonged COVID-19 pandemic,
accelerating price escalation following Russia’s invasionof Ukraine, increasingly serious supply constraints, andthe impact of U.S. monetary policy on the real
economy.
At the same time, the social environment istransforming at a dizzying pace, with changes in work
styles and lifestyles, accelerating digitalization and DX,
the SDGs and ESG issues, and in particular aheightened awareness of decarbonization. In regional
economies, as elsewhere, a diverse range of measures
is called for, including efforts to adapt to the “newnormal,” and initiatives to achieve sustainability.
Under such circumstances, many of our corporate
customers are facing various business challenges,
including being forced to transform their business models.
Among our retail customers, it is becoming more
important than ever to build assets that will support theirlife plans.
We want to help revitalize the regional economy andrealize a sustainable society by demonstrating theGroup’s collective strength to support such customers infinding solutions to their challenges and achieving growth,
thereby creating common value with our customers.
We will therefore continue working with others in the
Kyushu region, placing value on partnerships, as we
dedicate ourselves fully to these goals. I sincerely hope
we can rely on your continued support for and guidancein our future endeavors.

RegionThe Group’s founding business is a financial service
provider exclusively for SMEs. Having inherited the “DNAof developing SMEs” from our former entities, we arecontributing to the creation of industries and jobs in theregion.
In May 2022, the Nishi-Nippon City Bank opened acoworking space, The Company DAIMYO, on the 5th
and 6th floors of the Daimyo Branch building. The 7th
and 8th floors of the same building already housed theNCB Startup Support Salons and NCB Venture CapitalCo., Ltd., respectively. Through collaboration among
these entities and their capabilities, we intend to provide
better support than ever before to customers starting up
their businesses.
With regard to the utilization of funds, in April 2022, theQB Fund No. 2, a vehicle formed in April 2021 to invest in
university-launched venture businesses and the like,finished raising funds from investors with a total of around
7.0 billion yen. This makes it the largest venture fund foruniversity-launched businesses in the entire region
encompassing Kyushu, Chugoku, and Shikoku.
In April 2022, Nishi-Nippon City Tokai Tokyo Securities
became Japan’s first securities firm connected to aregional bank to offer lead-managing service, with the aimof supporting companies seeking to list on the Fukuoka
Stock Exchange.
In the same month, we also launched the NCB Open
Accelerator@Fukuoka program, which provides full
support for new businesses started by core enterprises in
the region. The program is designed to create new
businesses by matching the business resources of suchcore enterprises with startups’ resources including ideas
and technologies.

In Conclusion

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

17

Value Creation Process/Medium-Term Business Plan
One to One Solutions

Group Management Philosophy

Providing products and services that perfectly match the needs andAiming high and motivated by pride in our services, we are committed to becoming a leading
financial group through our ability to respond to change and to grow with our customers.

problems of individual customers in order to enhance customer
satisfaction (experience) and build long-lasting business
relationships– Creating Vibrancy to the Region and Beyond –The NNFH Group will provide customer-oriented “One to One Solutions” via physical (“human touch”)
and digital contributions to the development of the host community and customers.

Host community
Job creation

Contributing
to theSDGs

Creation/revitalization of local industries

Corporate customers

Support forbusiness
startups

Having young families(with or without children) settle down

Creating greater
vibrancy to Fukuoka
and other areas in
the Kyushu Region

Better corporate earnings

Higher income levels

More investments

Expanded consumption

Retail customers

Regional
development

Providing customer-oriented “One to One Solutions”
Human touch

Solving
regional
issuesPartnercompanies(leasing, insurance,
guarantee,
systems)

DigitalBanking

Credit cards

Securities

Consultancy

Externalorganizations

Shareholders and investors

Group employees

Return to shareholders

HR development

Higher shareholder value

Greater job satisfaction

Fukuoka and other areas in the Kyushu Region, the NNFH Group’s main market, offer a number of favorable business opportunities,
including a strong economy and series of large-scale urban redevelopment projects.
Meanwhile, the operating environment in which financial institutions find themselves is undergoing significant changes, including theincreasingly diversified and advanced customer issues and needs against the backdrop of the ever-declining and aging population
with a lower birth rate, changes in people’s lifestyles, progress in digitalization, etc., and a prolonged low interest rate environment.

Basic Strategies of the Medium-Term Business Plan,“Leaping Forward 2023 - Creating Vibrancy to the Region and Beyond -”Basicstrategies

1. Demonstrating the Group’s collective strength with which to lead the regional development [Revitalizing the regional economy]
2. Providing customer-oriented “One to One Solutions”[Increasing customer satisfaction]
3. Innovating resources for sustainable growth[Solid management foundation]

Key Social Challenges and Changes in the Business Environment
Changes in lifestyles

Progress in digitalization

Socialcontributions

Open and innovative collaboration with partner companies and external organizations

The NNFH Group’s Business Environment

Declining, aging population and low birthrate

Lively and vibrant city

Global warming, climate change, and natural disasters

NNFH’s priority SDGs

Extension of low interest rate environment…etc.

Corporate Customers’ Needs

Retail Customers’ Needs

Corporate executives have a wide range of management challenges to deal
with, not only from a financial perspective, but also in terms of sales channel
expansion, recruitment, business succession, and other concerns.
Founders
SMEs
Medium/Large enterprises

Customer needs are becoming increasingly diverse and advanced withregard to convenient services, asset building, inheritance planning, andother requirements.
Young customers, those building their assets
Retired customers
Elderly/wealthy customers

Expansion of sales channels
Cash flows & fundraising
Lack of financial, tax, and legal knowledge

18

Nishi-Nippon Financial Holdings GroupR ecruitment and HR development
Business succession
Digitalization of operations
…etc.

INTEGRATED REPORT 2022

Convenient services
Saving for old age
Quality asset buildingM anagement of
Preparing for dementia
retirement benefitsP ersonalized investment
Passing on assets during lifetime products
Preparation for inheritance …etc.

Target management indices

FY2019 results

FY2020 results

FY2021 results

Consolidated net income*1¥20.2 billion¥18.0 billion¥24.2 billion¥21.5 billion% of non-interest-earnings*2

20.2%
69.8%
9.36%

18.5%
67.7%
9.49%

19.3%
64.2%
9.28%

Approx. 22%
60–69%
Approx. 10%

Consolidated OHR
Consolidated capital adequacy ratio

FY2022 targets*1 Net income attributable to owners of parent*2 (Net fee and commission income + Net trading income + Net other operating income excluding net gains (losses) related to bonds and the cost of currency swaps) / Gross operating profit(all consolidated numbers)

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

19

Growth Strategy: ( i ) Reinforcement of the Collective Strength of the GroupIn October 2016, the Nishi-Nippon City Bank, one of the largest regional banks in Japan, and six other companies
transformed themselves to establish a holding company (NNFH). With the Nishi-Nippon City Bank at the core andsubsidiaries offering a diverse range of distinctive services, including banking, credit cards, and financial instruments
exchange, the NNFH Group offers comprehensive financial services.
Furthermore, City Ascom Co., Ltd. and Kyushu Leasing Service Co., Ltd., Kyushu’s top-class ICT and leasing businesses
respectively, will join the Group in October 2022.
With the addition of two functions, digitalization/DX solutions and leasing, we aim to evolve into a regional financial groupthat offers a diverse range of solutions beyond the scope of finance.
Initiatives to reinforce the collective strength of the Group
October 2004
May 2010
October 2016
July 2017
May 2020—Scheduled—

Nishi-Nippon Bank and Fukuoka City Bank merged to establish the Nishi-Nippon City Bank
Nishi-Nippon City Tokai Tokyo Securities was founded
Holding company Nishi-Nippon Financial Holdings was establishedJapan Payment Service was established
NCB Venture Capital was established

October 2022

City Ascom becomes a consolidated subsidiary, and Kyushu Leasing Service becomes an equity-method affiliate

Until September 2022

Bank-Securities Cooperation to Roll Out Strategies for the Wealthy Individuals
In November 2021, Nishi-Nippon City Tokai Tokyo Securities opened in the Tenjin Business Center a sales floor for wealthy
individuals, starting full-fledged sales activities for them in cooperation with the Nishi-Nippon City Bank.
The Nishi-Nippon City Bank, Ltd.

Nishi-Nippon City Tokai Tokyo Securities Co., Ltd.

Comprehensive solutions
for the wealthy individuals
Business
succession plans

Inheritanceplans

Asset management proposals attractive
for the wealthy individuals

Cooperation

Personalized
products

etc.

etc.

Stocks, corporate
bonds<SAINO MICRA exclusive salon for the wealthy>

Joining the NNFH Group in October 2022

［ グループ経営理念 ］

私たちは、高い志と誇りを持って時代の変化に適応し、お客さまとともに成長する総合力No.１の地域金融グループを目指します。

Special services are offered and various events (painting exhibitions, etc.) are held at the exclusive salon to attract a wider range of customers.

Address customers’ issues

Banking The Nishi-Nippon
City Bank, Ltd.
［ グループブランドスローガン］

Systemsココ
ロ が あ Ltd.
る 。コ タ エ が あ る 。
Banking The Bankof Nagasaki,
Credit cards,
The Kyushu Card Co., Ltd.
credit guarantee

Support for Going Cashless

City Ascom［ シンボルマーク ］

Rapid changes in thesocial environment

Financial Nishi-Nippon City
instruments Tokai Tokyo Securities
exchange Co., Ltd.

Digitalization and DX
SDGs/ESG(increasing awareness toward
carbon neutrality), etc.

このシンボルマークは、
未来を拓くエネルギーである「太陽」と、
躍動感あふれる「羽」をモチーフとClaims servicing しています。
Kyushu放射状に伸びる羽は、Servicer
無限に広がる未来を表現しています。さらに、淡いオレンジから深Leasingいオレンジへと変化を重ねる姿には、西日本FHグループを未来に向けて進化・変革させていこうと

Credit guarantee Nishi-Nippon
いう決意が込められています。
Credit Guarantee Co.

Creating Shared Value

Research studies,
management consultancy,
fee-charging employment NCB Research & Consulting Co., Ltd.
placement business

Kyushu Leasing
ServiceBy promoting the use of expense settlement systems and corporate cards, the Nishi-Nippon City Bank and the Kyushu Card help
corporate customers adopt cashless expense settlements.
The Kyushu Card and Japan Payment Service help customers go cashless, by taking advantage of the full brand settlement
services to find new merchants. They also offer bank cards with a credit card function, which are appealing to the young generation.
The Kyushu Card aims to further expand its business in line with the government’s target of 40% cashless settlement rate in 2025.
FY2021 results

FY2025 targets¥393.9 billion¥500.0 billion

Cardmembers

942,000

1,000,000

Merchants

60,00070,000Card transaction volume

Dramatic increase in the collective strength of the Group(Stronger digital and DX solutions + Acquisition of the leasing function)

Revitalizing the regional economy

Offering Staffing Solutions

City Ascom Co., Ltd.

Kyushu Leasing Service Co., Ltd.

(becomes a consolidated subsidiary in October 2022)(becomes an equity-method affiliate in October 2022)

City Ascom is a top-class ICT company in Kyushu, and has
mainly developed systems and offered IT solutions since its
foundation 50 years ago.

Kyushu Leasing Service is the largest leasing company inKyushu, and engages in its mainstay leasing and installment
business, as well as finance, real estate, environment-related,and other businesses.

System development
Contracted
development[FY2021 consolidated
financial results]

System integration

Provision of IT solutions
DX support

20

Realizing a sustainable society

Cloud services

Nishi-Nippon Financial Holdings GroupA variety of financing functions forcapital expenditures[FY2021 consolidated
financial results](million yen)

Net sales

10,736

Net income

686

Total assets

9,475

Number of
employees

INTEGRATED REPORT 2022

478

(million yen)

Leasing

Financing

Real estate

Initiatives for environment-related fields
Renewable energy

LED, etc.

Net sales

29,555

Net income

2,127

Total assets

169,417

Number of
employees

159

After gaining the license for a fee-charging employment placementbusiness in April 2019, NCB Research & Consulting Co., Ltd. has been
engaging in the staffing agency business for the NNFH Group’s
customers.
The January 2022 partnership agreement with a staffing agency forforeign caregivers has enhanced the ability to meet customers’ humanresources needs (see p.39).

Staffing contracts (cumulative total)(Cases)160

Of which 31 were pioneering HR matchings

120
80
40
0

152

83
30
the end of
March 2020

the end of
March 2021

the end of
March 2022

Increased Presence in the Nagasaki Area
The NNFH Group is working to increase its presence in the Nagasaki Area through group-wide promotional campaigns, the Bank ofNagasaki’s 110th anniversary project, and other initiatives.
The Bank of Nagasaki is working to expand its customer base by enhancing the ability to offer solutions to corporate and retailcustomers. Specific initiatives include strengthening the structure of corporate sales, increasing staff dedicated to deposit asset
sales, laying stronger emphasis on developing such staff, and taking other measures to strengthen sales capabilities.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

21

Growth Strategy: (ii) Human Resource Strategy
The NNFH Group strives to foster financial professionals full of humanitarianism and expert knowledge by developing
trustworthy human resources, enhancing organizational resilience, and fostering a corporate culture that supports thegrowth of its people.
In fiscal 2022, the final year of the current Medium-Term Business Plan, we will clearly define strategic human resources
who build the future of the Group and support each employee’s self-development toward the achievement of their career
visions. We will thus strengthen initiatives to foster an organizational culture that supports growth.

Recruitment Activities
Recruitment of New Graduates
To hire talented and diverse human resources, the Nishi-Nippon City Bank posts job details, message from its employees, and otherinformation on the recruitment website. In addition, the Bank actively conducts remote interviews to have contact with students in awide range of areas.
In recent years, a stronger focus on DX has prompted the Bank to turn to students with natural science backgrounds.

HR Development

Number of new recruits

Development Programs for Each Job ClassNew Graduates (Special Training Program)At the Nishi-Nippon City Bank, all new graduates undergo initial
in-service training at Kokoro-kan, the HR development facility,
to take their first step on their career path. As they readythemselves for their career and foster camaraderie with peers,
they learn the fundamental knowledge required to take the leadin shaping the future of the bank.
After the initial in-service training, the trainees take both offthe-job training outside of their workplaces, including follow-up
training sessions, and on-the-job training (OJT), includingcoaching at their branches, to establish themselves as fullfledged salespersons two years later.
For the OJT at branches, they are taken care of by “buddies”
who assist them in acquiring the knowledge they need topursue their career and give them advice on their private life,and by coaches, who provide them with professional guidance.
The trainees are also given numerous opportunities to selfstudy, such as holiday seminars and a home learning support
system.
Younger Employees
Employees will take more practical training sessions and followup training sessions from their third year on, alternating
between OJT and classroom lectures.
They are also given opportunities to have dialogues with theirsupervisors to give shape to the career path they desire basedon their vocational aptitude and preferences.

Middle-Ranking Employees
At the midpoint in their career, they take follow-up training
sessions or are put on temporary assignments to learn about
advanced solutions that are required to provide products andservices tailored to the needs of each customer.
Depending on their vocational aptitude and preferences, they
may be assigned to the planning department or IT/digitaldepartment of any division, where they may gain greater job
satisfaction, which also helps to enhance the organizational
strength of the NNFH Group.
Managerial Candidates
Managerial candidates undergo the most rigorous assessments
to determine if they have the aptitudes and skills required ofmanagers.
Upon promotion, they are required to take periodical
management seminars and training sessions for which outside
experts are invited, so that they can continue to hone their skills
as managers.
Experienced Employees
Amid the drastic changes in the environment that financial
institutions find themselves in, experienced employees areencouraged to change their career for the purposes ofmaintaining/increasing job satisfaction for all employees,
prompting a generational shift, and making better use of theirplentiful knowledge and experiences.

Systematic Development of Strategic Human Resources (April 2022–)
The NNFH Group defines consulting, DX, and planning personnel as strategic human resources who build the future of the Group.
We help each employee clarify their career visions and achieve the career they envision, thereby systematically developing strategic
human resources.

Development of Strategic Human Resources

Consulting personnel

DX personnel

Planning personnel

Development of humanresources who have highconsulting sales skills

Development of humanresources who drive
forward DX

Development of human resources
who drive forward management
and sales strategies

Program to support the acquisitionof 1st-grade Certified Skilled
Professional of Financial Planningcertification, etc.

DX development programby job type, etc.

Business school dispatch,
etc.

Systematically develop strategic human resources by supporting the acquisition ofvarious certifications and dispatching employees to external institutions

Clarification of career visions
Special training program for new recruits

The Nishi-Nippon City Bank, Ltd.
Of which those with naturalscience backgrounds

FY2017FY2018FY2019FY2020

FY2021

190

190

149

154

158

11

14

2

18

21

Mid-Career Hiring
The Nishi-Nippon City Bank recruits a wide range of mid-career professionals, such as lawyers, certified public accountants,
certified tax accountants, and DX personnel and assigns them to the Headquarters.

Diversity & Inclusion
Promotion of Women to Managerial Positions
Over the last decade, the number of women in managerial positions at the NNFH Group has increased by roughly 130 (from 69 to 200).
In particular, the Nishi-Nippon City Bank has been working on the expansion of roles women play at workplace, having set
personnel reform (active promotion of female employees) as a basic strategy in “New Stage 2008,” the Medium-Term Business Plan
started in 2008. Female employees currently account for 32% of sales positions and 55% of managerial candidates (assistantmanagers).
(current as of 31st March, 2022; numbers in the parentheses indicate changes from 31st March, 2012)

Number of women in
managerial positions
NNFH

Executive
officers

1

—

—

—

—

3（+3）

10（+5）

163（+112）

411（+205）

—

6（+6）

17（+4）

21（-6）—

12.4%(Reference) Assistantmanager-level positions

Directors

The Nishi-Nippon City Bank（ * ）—The Bank of Nagasaki

General managers and Other managerial
positions equivalent to thempositions

Ratio of women in managerial positions*One new female director was appointed in June 2022 (the first female director of the Nishi-Nippon City Bank promoted internally)

3.8%
the end of
March 2012

the end of
March 2022

Programs for Good Work-Life Balance
The Nishi-Nippon City Bank supports employees in balancing work and family life, with programs more generous than statutory
requirements.
The Nishi-Nippon City Bank’s programsfor good work-life balance(Reference)
Childcare and Caregiver Leave Act

Short-hour shift
Until a child finishes third grade inelementary school
Until a child becomes 3 years of age

Childcare leave
Until a child becomes 4 years of age
Until a child becomes 2 years of age

Initiatives for Health and Productivity Management
The Nishi-Nippon Financial Holdings Group Health and Productivity Management Declaration
The NNFH Group promotes health and productivity management under the Nishi-Nippon Financial Holdings Group Health andProductivity Management Declaration. The declaration was formulated in June 2022 based on the understanding that promoting
officers’ and clerks’ mental and physical health and creation of workplaces with greater job satisfaction will lead to better services
for customers.

The Nishi-Nippon Financial Holdings Group Health and Productivity Management Declaration
To realize the Group Management Philosophy and the Nishi-Nippon Financial Holdings Group Sustainability Declaration, we the
Nishi-Nippon Financial Holdings Group maintain and enhance the health of our officers and clerks, who are our customers’ partners.
We actively help our officers and clerks, as well as their families, promote mental and physical health.
We create a workplace environment where each and every officer and clerk can work feeling empowered.
We contribute to the creation of healthy and lively communities through service provision and other business activities.

New, enhanced program for the development of young employees (April 2021–)– New employees are not included in branch personnel headcounts and undergoa rigorous two-year development program

22

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

23

Growth Strategy: (iii) Digital Strategy
In an effort to meet increasingly diversified and advanced customer needs, the NNFH Group provides customer-oriented“One to One Solutions” in the forms of human touch and digital solutions, thus contributing to the development ofcustomers and the regional community.

Providing Customer-Oriented “One to One Solutions”

Overview of Digital Strategy
The NNFH Group will strengthen the functions of digital channels and centrally manage customer information by focusing on thedevelopment of DX personnel, strategic system investments, and alliances with external partners. We will thus provide optimal “Oneto One” solutions to customers.

<Goal of Digital Strategy>

Given the ongoing digitalization of banking and the resultant decline in customer traffic, we will expand contact with customers byenhancing the functions of digital channels (PCs, smartphones, etc.), while at the same time strengthening our consulting function(discovering customers’ issues and true needs and providing solutions) through physical channels (clerks, branches).

Digital channels
The Nishi-Nippon NCB Business
City Bank app
StationRoles of each channel in meeting diverse customer needs

Customer needs

Warm and reliable persons to consult / Advanced expertise / Convenient, hassle-free, pleasant, comfortable
Consultancy only
humans can doInforDiversification of lifestyles / Progress in digitalization / Decline in visitors and ATM users

Central management ofcustomer information
Strategy development
based on data

Business that takes advantagesof digital technology

Physical channels

Digital channels

Contact center(clerks, branches)(PCs, smartphones, and ATMs)

Full cloud contact center system

Easy 24/7 access, completing transactions promptly
Discovering customer needs to guide them to physicalchannels(introduced in May 2022)“Good advisers for customers,” who, throughdialogues, get to know customers better to address theirissues and true needs“Places specializing in consulting service,” where
technical and advanced solutions are offered

g
rin
ha

Changes in theenvironment

Info
rm
ati
on
s

Improved functions
that provide financial
and non-financial
services

ing
har
s
on
ati
m

Branch offices
Full cloud CRM system

Provision of“One to One Solutions”(to be introduced in FY2024)

Information
sharing

Initiatives in Digital Strategy

Enhancing development of DX personnel
Provision of customer-oriented “One to One Solutions”
Ideal portfolio of
DX personnel

Physical channels

Digital channels(clerks, branches)(PCs, smartphones, and ATMs)

Improving both quality and quantity of dialogues
with customers by increasing work efficiency tosave time and developing HRs
Increasing efficiency in office work at branch
offices by accelerating work reform
Strengthening the branch office support structure
HR development
Reshuffling positions across job categories toallocate more persons to sales

24

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Sharing info
and developing
data foundation

Increase customer contact by enhancing theconvenience of digital channels and theirservice menus, thus sending more customers
to physical channels
Expanding service menus for the Nishi-Nippon
City Bank app
Introducing the “NCB Business Station,” aplatform for corporate customers
Introducing automating marketing

Specialist

Classify DX personnel into three layers, define eachlayer of personnel, and formulate layer-specific DX
personnel development plans

Support forcustomers’ DX

Transformationof NNFH

DX consultants

DX expertsetc.

400–500
employeesCore

DX advisors

Data analysts
etc.

2,000
employees

Base

Reinforcing strategic system investments<Capital expenditures during theperiod covered by the previous
Medium-Term Business Plan><Capital expenditures during theperiod covered by the current
Medium-Term Business Plan>

Strategic system
investments 5%

Strategic system
investments 25%
Quintuple

System investments
20%

System investments
50%(FY2017–FY2019)(FY2020–FY2022)

DX basemembers

Strengthening alliances(= Employees with IT Passports)

Strengthen alliances with City Ascom Co., Ltd., other companies outside the Group, etc.
Participate in the Kyushu regional consortium for DX promotion comprised of businesses,
academic institutions, local governments, and financial institutions)

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

25

Growth Strategy: (iii) Digital Strategy

Services for Retail Customers

Services for Corporate Customers

Expanding Functions of the Nishi-Nippon City Bank App

Introducing the “NCB Business Station,” a Platform for Corporate Customers

Since the March 2015 launch, the Nishi-Nippon City Bank app, a smartphone app offered by the Nishi-Nippon City Bank, hasconstantly expanded its functions and services that improve convenience for customers. The app started with the concept of “Havea bankbook in your smartphone!” The expansion of functions also expanded the scope of financial transactions and proceduresthat can be completed within the app. It can now be said that functions of the entire bank, except for cash handling, are insmartphones. The catchphrase has therefore been changed to “Have a bank in your smartphone!” We will continue to provide
convenient services and expand contact points with retail customers.

In December 2020, the Nishi-Nippon City Bank opened the “NCB Business Station,” a platform for corporate customers. The online
platform aims for a one-stop service providing financial and non-financial transactions, under the concept of “24/7 access to an
online counter!” The unique system was jointly developed with NTT DATA Corporation and is the first of its kind launched by aregional bank in Kyushu.

Have a bank in your smartphone!
Total downloads

Pay

InquireOther● Transaction lending

Expansion ofloan function

Number of users (registered accounts)

1,150,000 downloads●Small amount transfer COTRA (to be introduced in FY2022)● Aggregate account information of multiple financial●Borrowing and repayment of card loans

Financial services●App loan application● Bundle transfer, salary transfer

800● Deposit balance and accountactivity inquiries
etc.

650,000●Opening accounts

registered accounts●Various procedures (address changes, reissuance of lost items)

institutions in the NCB Business Station and support thesophistication of money management

Non-financial services● Single transfer●Card loan balance, investment trust profit and loss

No need to submit
financial statements

1,200

1,000

●Deposit balance/transaction history

Completed online

Prior notification of borrowing conditions(thousand)●App-to-app transfer ●Smartphone ATM

Save ●Special purpose savings accounts
Increase ●Opening of investment trust accounts, buying and selling transactions (to be introduced in FY2022)
Borrow

24/7 Access to an Online Counter!

Major functions to be added in FY2022● Business matching● Provision of subsidy and grantinformation● Provision of seminar andAddition of
account
aggregation
function

Aggregate accountinformation(account aggregation)

NCB Business
Stationmanagement information● Employee benefits services

etc.

600

Digital Solutions
400

The Nishi-Nippon City Bank established the Digital Solutions Team in October 2020. The team supports digitalization of customers
to help them increase operational efficiency and sales, as well as works with external partners to support DX of customers’
businesses for reform.

200

0
the end of
March 2015

the end of
March 2016

the end of
March 2017

the end of
March 2018

the end of
March 2019

the end of
March 2020

the end of
March 2022

App loan balance

Number of transfers from app, etc.

(Total balance of specific-purpose loans, multi-purpose loans, and card loans)(Number of retail internet banking transfers, including transfers from the app)

8.2

(billion yen)

the end of March 2021

1,603

5 Steps

Step 3

Step 1

Step 2

Step 5

DesignVerification

Step 4

Conception

Implementation

Operation

Idea conception,
vision formulation,
etc.

Idea design, strategy
development, etc.

Research, interviews,
etc.

System development
and design, etc.

KPI management,
customer support,etc.

HR development/Promote corporate manager’s understanding of DX
the end of March 2022

FY2020

Ratio of app loan contracts(Ratio of app products in new specific-purpose and multi-purpose loan contracts)

12%

FY2020

Nishi-Nippon Financial Holdings Group(thousand)for DX

981

2.3

26

the end of
March 2021

DX Support
To implement DX, it is necessary not only to understand existing businesses from the employee, customer, and corporate
perspectives but also to have knowledge and know-how of new digital technologies.
In cooperation with external partners with expertise and experience, the Nishi-Nippon City Bank offers hands-on support
throughout the five steps necessary for the implementation of DX.

INTEGRATED REPORT 2022

FY2021DX Solutions
We identify issues such as conception of new businesses using digital technologies and development of digital personnel, andprovide solutions tailored to each customer.

39%
FY2021

Conception and operation of
new businesses using digitaltechnologies, businessprocess improvement

Development and acquisitionof digital personnel

Planning of operation
system introduction anddigitalization in line withmanagement strategies

Plans for sales increaseusing data

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

27

Special Feature: Work Reform
In April 2018, the Nishi-Nippon City Bank embarked on a series of work reforms, comprising the three pillars of work flow
innovation, digital innovation, and resource innovation. These attempts to carry out work reform have helped reduce theamount of paperwork and expenses, and brought about qualitative changes in the entire organization on a scale that isarguably the largest in the company’s history by a wide margin.
Since October 2021, the NNFH Group has been conducting group-wide work reform, rolling out the reform carried out
by the Nishi-Nippon City Bank throughout the Group.

A General Picture of Work Reform

Work Flow Innovation and Digital Innovation
By thoroughly streamlining the work flow, digitalizing operations through the strategic use of tablet computers, RPA, andother techniques, and restructuring the branch office network, we have drastically improved efficiency of operations at
branch offices and the Headquarters.
Overview

FY2018Key initiatives

Centralized branch offices’ office work

Centralized rating tasks to the Headquarters, etc.

Abolished excessive checking work

Reviewed the bill checking and approval authority

Introduced work flow and electronic conferencing systems

Digitized approval documents, meeting materials, etc.

Standardized the counter reception structure

Reduced counter personnel by dividing duties and improving compatibility

Introduced in-store tablet computers

Reduced office work necessary for opening accounts

Introduced multifunction machines with scanner functions

Digitized centralized office work

Introduced RPA for loan-related work

Significantly improved efficiency of preparing approval documents and providing loans

Renewed salespersons’ tablet computers

Installed remote meeting and digital pamphlet functions

Introduced tablet computers for online meetings

Introduced remote training and meetingsThree pillars of work reform
Work flow innovation

Digital innovation

Resource innovation
Reviewing theconfiguration of
branches according
to market needs

Utilizing ICT(RPA, tablet computers, etc.)

Thoroughly streamlining work flow

Streamlining
labor atbranch offices

FY2019FY2020What we have achieved (April 2018–March 2022)

FY2021
Reducing the amount of paperwork, branch offices, expenses, etc.
Paperwork at HQ
and branches

Number ofATMs

Number of
branches−1,031−20

human-minutes−313

Building an organization with a trend of increasing productivity

Re-allocating personnel to priority fields
Digital field

Reducing expenses(approximately 2.0 billion yen was cut due to work reform)

Factors for a reduction in expenses (Nishi-Nippon City Bank)(billion yen)
Benefits of work reform:

71.0 Work reform

Work reform−0.9

Labor costs−2.1

the end of March 2018

−2.0

66.0

Non-personnel expenses
and taxes* (Balance of loans and bills discounted × Loan-to-deposit spread + Net fee and commission
income − General and administrative expenses) ÷ Average number of employees during the
fiscal year

¥4.9

72.1%

OHR

−7.7%pt

FY2021

64.4%

millionApprox.

1.2 times¥5.8
millionmore

Enhancing theearnings power andproductivity of the
NNFH Group

Introduced smart workstyles for outside sales

Introduce a loan-integrated screening system

Introduce paperless reception and screening and electronic contracts

Store images of bills and other documents

Reduce the time and burden related to checking and storing of bills and forms

Introduce electronic contract services for business loans

Introduce paperless contracts without seals

Optimizing branch functions and operations according to the market
We have been drastically optimizing branch functions and personnel allocation. While selectively allocating personnel who havestrengths in assets on deposit to retail-focused branches, we concentrate corporate sales specialists at corporate-focused branches.

Re-allocating personnel to priority fields
Personnel created through work reform initiatives have been re-allocated to priority fields. During the four years from April 2018,
approximately 160 employees were re-allocated in total.

Re-allocation of personnel to priority fields

FY2021163

Our Goals

Rolling out work
reform initiatives
throughout theGroup

Introduced work smartphones

Achieved the three-year target (KPI + 100) in theMedium-Term Business Plan ahead of time

Branch office employees spend 1.5 times
more hours on sales activities

FY2017

Started automatic distribution of necessary information and materials to salespersons visiting customers

We have been optimizing branch functions and operations according to the scale and characteristics of the market. We
are starting to see expected effects in such forms as decrease in the number of branches and fulfillment of roles
according to the quality of each branch. Personnel created through work reform initiatives will be re-allocated to priority
fields, such as digital and corporate solutions.

323

Profit from customer service operations per employee*(Nishi-Nippon City Bank)−2.9(Plan)

Digitalized account opening procedures, etc.

Introduced RPA for information provision

Resource Innovation

the end of March 2022

163

−0.8

Group
companies,
etc.

NearlydoubledOther
factors−2.1

FY2017

Marketoperation
field

Headcount for the priority fields above

Other
factors−1.2

Corporate
solutions
field

FY2022Connected in-store tablet computers to the account system

15
65
13
70

Making branch
offices a hub for
consulting services

the end of March 2018

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

More than
330

323
+110

46
85
13
69
the end of March 2020

+160

IT and digital field +93

28

+50

213

Personnel created through efficiency
improvement will be re-allocated again

Market operation field +10

108
98
23
94
the end of March 2022*
the end of March 2023 (plan)* Reflects transfers in the beginning of the following fiscal year

Corporate solutions field +33

Group companies, etc. +24

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 202229

Growth Strategy: (iv) Initiatives for the SDGs and ESG
With the firm belief that “Without regional development, there will be no growth of the Group,” the NNFH Group has dedicated itself towide-ranging community activities as we offer solutions that address regional challenges through our primary services of support forstartups and funding environmental projects.
In the current Medium-Term Business Plan, “Leaping Forward 2023 - Creating Vibrancy to the Region and Beyond -,” which was
kicked off in April 2020, we prioritize the Sustainable Development Goals (SDGs) and Environmental, Social, and Governance (ESG)
criteria in our management strategies. Meanwhile, we established the specialized organization to promote the SDGs and determined
the NNFH’s priority SDGs, in an effort to orchestrate diverse initiatives taken in this regard within the Group.
Going forward, the NNFH Group will continue to bolster its SDGs/ESG initiatives in ways exclusive to regional financial institutions.

Milestones in the NNFH Group’s SDGs/ESG Initiatives
2022

Initiatives for theEnvironment andClimate Change

Fulfillment of the TCFD Recommendations
Eco-Friendly Branches
Investment in SDGs Bonds
Participation in Environmental Initiatives

 raws up the NNFH Group-D
Sustainability Declaration
 eclares support for the-D
TCFD Recommendations-E stablishes the specializedorganization to promote theSDGs-S ets the CO2 emissions
reduction target stablishes the Sustainability-E
Committee
 raws up the investment and-Dlending policy for specificsectors, etc.

Supporting
Customers’
SDGs/ESG
Initiatives

 etermines the NNFH’s-Dpriority SDGs

Group Management Philosophy

Aiming high and motivated by pride in our services, we arecommitted to becoming a leading financial group through ourability to respond to change and to grow with our customers.
The Nishi-Nippon Financial Holdings Group Sustainability Declaration

Guided by the Group Management Philosophy, we at
the NNFH Group aim to develop the regional economy
and enhance our enterprise value, while at the same time
contributing to the realization of a sustainable society.
NNFH’s priority SDGs

Efforts to Create
Industries andJobs in the
RegionPartnership with
the Local
Community

Multifaceted
Programs
Benefitting the
Local Community(For corporate customers)
Provision of Solutions to Social Issues (Hands-on Support
for Corporate Customers)
Initiatives for Sustainable Finance(For retail customers)
Provision of Optimal Solutions to Customers’ Needs for
Asset Building and Business Succession
Sale of SDGs/ESG-related Investment Trust
See p.36–p.37

Finely-Tuned Startup Support
Business Support through Funds
Solutions to Diverse Challenges Facing Local Companies
See p.38–p.39

Collaborating with Local Governments
Collaborating with Universities
See p.40

Commendation
Provision of Economic/Financial Information and Finance
Education
Support for Customers’ Efforts to Achieve the SDGs
Regional Contributions by Employees
Cultural/Artistic Activities

Target amount of sustainable finance2 trillion from FY2021 to FY2030

Total ¥

See p.32–p.35-S
 ets the target amount ofsustainable finance

2021

2020

Corresponding
SDGs

Selected measures

CO2 emissions reduction target
Achieve carbon neutrality by FY2030* Covers Scope 1 (direct emissions) and Scope 2 (indirect emissions generated
from purchased electricity, etc.) emissions

See p.41

HR Development

Human Resource
Strategy

Recruitment Activities
Diversity & Inclusion
Initiatives for Health and Productivity Management
See p.22–p.23

30

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 202231

Growth Strategy: (iv) Initiatives for the SDGs and ESG

Initiatives for the Environment and Climate Change
Recent years have seen frequent cases of serious damage throughout the world caused by abnormal weather patterns and otherinstances of climate change. In our main market of Fukuoka Prefecture, too, natural disasters are increasing in severity andfrequency, as evidenced by the fact that heavy rain emergency warnings have been announced for five consecutive years since theNorthern Kyushu floods in July 2017. As such, addressing climate change has become a major challenge for the realization of asustainable society in the region.
Having included initiatives to address climate change in its priority issues in the management strategies, the NNFH Groupdeclared its support for the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)* in April 2021, andhas since disclosed relevant information, while supporting its customers in dealing with the challenges posed by climate change.
* A set of recommendations that the TCFD, created by the Financial Stability Board (FSB), published in June 2017 to help public companies and other organizations disclose the impact ofclimate-related risks and opportunities to investors and other stakeholders.

Fulfillment of the TCFD Recommendations
Governance
The NNFH Group discusses its policies and important matters concerning sustainability, including
climate change, at its Sustainability Committee chaired by the President in order to monitor the
status of relevant initiatives. Discussions at the Sustainability Committee are reflected in its
management strategies and risk management measures and reported to the Board of Directors,
after deliberations and decisions are made by the Executive Committee.
Day-to-day operations are left to central supervision by the specialized organization to promote theSDGs of the NNFH Corporate Planning Division, which monitors the status of the measures taken by
the NNFH Group companies and follows up on such efforts.

Sustainability Management
Structure
Board of Directors
Executive Committee

Risks Associated with Climate Change
The NNFH Group recognizes major risks associated with climate change as follows.
Descriptions of risks

Timeline*

Risk category

Tightening ofenvironmental
regulations

Losses generated by changes in policies/
regulations, such as introduction of a carbon
tax and tightening of greenhouse gas (GHG)
emissions regulations, on the part ofinvestees/borrowers

Medium tolong term

Credit risk

Development ofinnovativetechnologies

Degradation of asset value and/or loss
generated on the part of investees/borrowers
due to technological innovation and rapid
structural changes associated with thetransition to a carbon neutral society

Medium tolong term

Credit risk

Reputation changes

Loss of NNFH Group’s enterprise value due
to discrepancies between the Group’s
responses to climate change andstakeholders’ expectations

Medium tolong term

Operational risk
(Reputation risk)

Damage to the Group’ sales offices

Short tolong term

Operational risk
(Tangible asset risk)

Degradation of the value of assets pledged
by investees/borrowers

Short tolong term

Credit risk

Loss generated by the shutdown ofoperations by investees/borrowers

Short tolong term

Credit risk

Confusion in the financial market due toserious/extensive damage

Short tolong term

Impact on business activities, etc. of the
NNFH Group and its investees/borrowers
brought on by the chronic climate changesuch as temperature variation and changes inweather patterns

Long termWind and flood
damage due totyphoons, torrential
rains, etc.
Physical risks

Temperature variation
and rising sea levels* Short term: Less than 1 year, medium term: 1–3 years, long-term: more than 3 years

32

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Physical risks

Object ofanalysis

The electricity sector, which is most susceptible to thetransition to a carbon neutral society

Degradation of the value of collaterals by floods,
whose frequency of occurrence is particularly high (ofcollaterals for business loans, buildings located within
Fukuoka City)

Analysis
methods

Analyze for each scenario the impact that a rise incarbon prices due to the introduction of a carbon tax,
etc. and changes in the market environment, etc.
might have on corporate earnings

Based on a hazard map, calculate the amount ofdamage due to floods for each collateral

Scenarios
usedMultiple scenarios including the 1.5°C scenario
published by NGFS

2°C and 4°C scenarios published by IPCC

Analysis
results

Additional credit costs that may be incurred up to
2050: approximately 7.0 billion yen

Additional credit costs that may be incurred up to
2050: approximately 3.0 billion yen on a single-year
basis

Carbon-related Assets
The ratio of the Nishi-Nippon City Bank’s carbon-related assets (credit extended to electricity, gas, energy, and other sectors,
excluding that extended to the renewable energy sector) in its outstanding credit balance is limited at 1.9%.

The NNFH Group has made it clear that it “aims to develop the regional economy and enhance its enterprise value while
contributing to the realization of a sustainable society” in its Group Sustainability Declaration, which describes its policies on its
initiatives for the SDGs and ESG. Furthermore, the Group has selected “Goal 13: Take urgent action to combat climate change andits impacts” as one of its priority SDGs, thus including initiatives to address climate change in its priority issues for its management
strategies and deploying a variety of environment-related measures based on risks and opportunities associated with climatechange.

Transition
risks

Transition risks

Sustainability Committee

Strategies

Climate change risks

Scenario Analysis
NNFH analyzes multiple future scenarios by assuming certain factors for anticipated natural disasters and an object of analysis for
the Nishi-Nippon City Bank, which is presumably most susceptible to the impacts of climate change risks once they emerge, andestimates the quantity of anticipated risks.
For the object of analysis chosen and under the assumed scenarios, transition risks are estimated at a total of approximately 7.0
billion yen up to 2050 and physical risks are estimated at up to 3.0 billion yen on a single-year basis up to 2050. It was concluded
that the impact that transition risks and physical risks might have on our financial position is limited for the object of this scenario
analysis.

Opportunities concerning Climate Change
Under the belief that “Without regional development, there will be no growth of the Group,” the NNFH Group remains actively
committed to solving regional challenges through its main businesses of funding environmental projects, supporting startups, etc.
We set a target amount for investments in such sustainability initiatives that help to realize a sustainable society and are aggressively
working to achieve the targets.
In addition, through the sale of investment trusts, etc., which invests in companies engaged in businesses related to theachievement of the SDGs, we provide customers with opportunities to invest in SDGs/ESG-related initiatives.
In support of customers in their attempts to deal with climate change, including a transition to a carbon neutral society, we will
aggressively offer consulting services, which includes a tool to visualize the amount of CO2 emissions.
Through these initiatives, the NNFH Group will work to realize a sustainable society together with local residents.
Products andservices offered tocustomers

SDGs supporting loans
SDGs Private Placement Bonds(donation type, environment, CSR)
Sustainability Linked Loans

Financing renewable energy power
generation business
Sale of SDGs/ESG-related investment trust See p.36–p.37
Provision of a tool to visualize theamount of CO2 emissions
etc.

Risk Management
Through the results of scenario analysis, etc., NNFH is aware of the fact that physical risks and transition risks attributable to climatechange will have an impact on the NNFH Group’s business administration and financial position. We will continue to expand thescope of sectors subject to scenario analysis and advance analytical methods, while at the same time building a framework forcontrolling such risks.
For investment in and lending to specific sectors, etc. that are highly likely to have a major impact on the environment and society,we appropriately deal with them in accordance with the following policies.

Policies on Investment in and Lending to Specific Sectors, Etc.
1. Coal-fired power
generation

We will not, in principle, offer investments or funds whose application is the construction of new coalfired power plants or the expansion of existing coal-fired power plants. Should we consider offering
one as an exception, we will make the most careful decision for each proposed project individually
after taking into account energy policies and situations of host countries, power generation efficiency,
impacts on the environment and society, etc.

2. Deforestation
business

When we consider offering investments or funds to projects that involve deforestation, we will make themost careful decision individually after taking into account the acquisition status of international
certifications, impacts on biodiversity and ecosystem, environmental and societal considerations, etc.

Market risk

3. Development of palm
oil farms

When we consider offering investments or funds to projects that develop palm oil farms, we will makethe most careful decision individually after taking into account the acquisition status of international
certifications, impacts on biodiversity and ecosystem, environmental and societal considerations, etc.

Credit risk
Operational risk
(Tangible asset risk)

4. Production of cluster
bombs and otherinhumane weapons

We will not offer investments or funds to projects whose involvement in production of cluster bombs
and other weapons we consider to be inhumane, regardless of their intended purpose.

5. Infringement of
human rights

We will not offer investments or funds to projects that involve human trafficking, child labor, forcedlabor, and other human rights violations, regardless of their intended purpose.
Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

33

Growth Strategy: (iv) Initiatives for the SDGs and ESG

Metrics and Targets
CO2 Emissions
In March 2022, the NNFH Group drew up its CO2 emissions reduction target of “achieving carbon neutrality by fiscal 2030.” In orderto achieve this target, we will monitor CO2 emissions from business activities and launch concrete initiatives that reduce CO2
emissions.

The Amount of Sustainable Finance Extended
In March 2022, the NNFH Group set up “sustainable finance,” a new category of financing service designed to realize a sustainable
society by way of funding environmental projects, supporting startups, etc., with its target amount being a total of two trillion yen
from fiscal 2021 to fiscal 2030. Going forward, we aim to achieve the target by assisting customers in resolving their environmental
and social challenges including addressing climate change.

Amount of Sustainable Finance Offered (Total of the two Group banks)
CO2 Emissions* (Nishi-Nippon City Bank)(t-CO2)2,000

18,13820,0002,000(billion yen)

1,500
15,000

24.7%

27.9%

10,00013,6505,000
0FY2013CO2 emissions
reduction target

13,064FY2017

46.7%

46.6%

9,664

FY201836.4%

FY20199,670

11,530

FY2020Target amount of sustainable finance

1,000

Achievecarbon neutrality
by FY2030

500(Scope 1 + Scope 2)02

Total ¥
trillionfrom FY2021 to FY2030

208.7
FY2021

FY2030

FY2021* As measured according to the standards on periodical reports stipulated in the Act on the Rational Use of Energy

Environment-related Data
Unit
Scope 1
(Direct emissions)
Scope 2
(Indirect emissions)

Initiatives to Realize Carbon Neutrality
FY2019FY2020

Reduce energy consumption

FY2021

t-CO2

742

605

599

t-CO2

8,921

9,064

10,931

Scope 1 + Scope 2

t-CO2

9,664

9,670

11,530

Energy consumption

GJ

263,505

249,497

236,814

STEP 1

STEP 2- Introduce LEDs, energy-saving air-conditioners- Renovate branches to fully equip them with eco-friendly
features (The new HQ Building equipped with the latest
environmental performance will be completed in fiscal
2025.), etc.

Investment in SDGs Bonds
As part of its investment activities designed to ameliorate environmental andsocial challenges, the Nishi-Nippon City Bank invests in various SDGs bonds,
such as green bonds and social bonds.

Investment records¥11.1 billion(FY2021)

Reduce electricity-derived CO2 emissions
to zero- Switch to electricity derived from renewable energy, etc.

Participation in Environmental Initiatives

Reduce residual CO2 emissions to zero

STEP 3- Conduct carbon offsetting by using the J-Credit
Scheme, etc.

Eco-Friendly Branches
The Nishi-Nippon City Bank is renovating its branches to make them fully equipped with eco-friendly features, such as solar power
generation, rainwater utilization, LED lighting, and energy-saving air-conditioning (27 branches renovated current as of 31st March,2022). Opened in September 2021, the Itoshima Branch received a four-star rating under the Building-Housing Energy-efficiency
Labeling System (“BELS”) for reducing design primary energy consumption by 30%.

(Nishi-Nippon Financial Holdings)(The Nishi-Nippon City Bank)

Eco-Friendly Branches (Nishi-Nippon City Bank)(Branches)

27

30

20

10

0

34

10

31st March,
2014

Nishi-Nippon Financial Holdings Group

31st March,2022

Nishi-Nippon City Bank Itoshima Branch(Opened in September 2021)

INTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

35

Growth Strategy: (iv) Initiatives for the SDGs and ESG

Supporting Corporate Customers’ SDGs/ESG Initiatives

Supporting Retail Customers’ SDGs/ESG Initiatives

Provision of Solutions to Social Issues (Hands-on Support for Corporate Customers)

Provision of Optimal Solutions to Customers’ Needs for Asset Building and Business Succession

The NNFH Group picks up on key topics from among the social trends and issues of the time, some of the contemporary ones
being carbon neutrality, digital transformation (DX), and business succession, to understand and share customers’ management
issues. With a broad range of solutions, the NNFH Group aims to resolve customer issues and enhance its earnings power.

In anticipation of the “era of the 100-year lifespan,” the NNFH Group offers one-stop solutions that are optimal to the customer
needs of asset building and business succession.

1. Understanding customer challenges
and needs through feasibility studies, etc.

Expansion ofbusiness domains
Financing
Fundraising
Recruitment
SDGs/ESG
Carbon neutrality

Digitization, DX

Expansion ofsales channels

SDGs/ESG
Carbon neutrality

Challenges and needs ofcorporate customers

Supporting fundraising(financing, private placement bonds, leases)

Conducting interviews with customers on
the state of their initiatives for the SDGs

Consultationon the SDGs

CO2 emissions measuring tools

Increasing efficiency, responding
to legal revisions (digitization)

Tools for providing information on
DX and digitization

Adjusting expenses
Electronification of
invoices

Flyers to raise attention to theneed for digitization

Business
succession

Digitization/DX

Key topics

Support for achievementof low-carbon/carbon
neutral society

etc.

etc.

Business
succession“The era of the 100-year lifespan”
Growing needs for retailcustomers

2. Providing solutions to the issues

Support for
application for
subsidies
etc.

Contributions to themain business (DX)Introducing CRM and BI*

Consultation on DX
Staffing agency* CRM: Customer Relationship Management system
BI: Business Intelligence tool for collection, processing, and analysis of data

etc.

Business succession brochures(business succession menu, cases, etc.)

Successor available
Measures to lift
share prices

No successor
Transferring businessto a third party (M&As)

Business succession proposals(calculating share prices, etc.)

Measures to reduce
inheritance tax

Internal businesssuccession (MBO, etc.)
etc.

etc.

etc.

Solution tosocial issues

Enhance the NNFH
Group’s earnings
power

Building assets inanticipation of greater
longevity

Enhancing the Functions of the Asset Management
Suggestion System
In May 2022, the Nishi-Nippon City Bank significantly enhanced the functions of ASSETDIRECTION, its investment trust suggestion system. This allows us to make a suggestion
on optimal asset management as we take a survey of the entire financial assets of acustomer.

Supporting Asset Building via
Installment-type Investment Trusts
The Nishi-Nippon City Bank proactively offers
suggestions on installment-type investment trusts for thecustomer’s stable building of assets.

(billion yen)
3.0

Supporting Asset Hand-Over Using
Trust Products

August 2021 and the Bank of Nagasaki from February 2022)
Loans offered thus far(two banks combined)

899 cases¥32.1 billion

The Nishi-Nippon City Bank offers a variety of trust
products that cater to the customer’s asset succession
needs to “gift,” “prepare,” “leave a bequest,” and“divide.”(1,000 accounts)
60

Amount deducted monthly
Number of investment trust accounts(right axis)

48

45

37
2.0

0

The NNFH Group defines finance that helps to realize a sustainable society as “sustainable finance” and is accelerating related
initiatives.

The Nishi-Nippon City Bank and the Bank of Nagasaki offer SDGs supporting loans to corporations
and sole proprietors who are interested in establishing SDGs but do not know where to start. In a bid
to support their initiatives to achieve the SDGs, this loan instrument uses a dedicated check list to
keep track of customers’ initiatives in this regard and shares the data with them. In addition, tosupport a customer’s external relations, a PR tool is provided to each customer and is uploaded on
the respective bank’s website and elsewhere.

Amount Deducted Monthly and Number of Investment Trust Accounts

25

1.8

1.6

0.9

1.0

Initiatives for Sustainable Finance

SDGs Supporting Loans (Made available from the Nishi-Nippon City Bank from

Smooth inheritance andtransfer of assets

30
15

31st March, 2020

31st March, 2021

Trust Product Offerings
Testamentary
trustsArrangementof estates

31st March, 2022

Trust Business (Total Number of Trust
Products Administered)
1,465
889

Testamentary substitute trusts
Annually levied gift tax trusts
Senior support trusts(current as of 31st March, 2022)

0

227
31st March, 2020 31st March, 2021 31st March, 2022

SDGs Private Placement Bonds
The Nishi-Nippon City Bank handles SDGs Private Placement Bonds in support of its customers’
initiatives to achieve their SDGs. Based on survey findings by a third-party organization (Kyushu
Economic Research Center), the Nishi-Nippon City Bank grants an SDGs Certificate to issuers of thebonds.

Cumulative total
underwritten

369 cases¥32.1 billion(current as of 31st March, 2022)

Financing Renewable Energy Power Generation Businesses
The Nishi-Nippon City Bank offers financing to renewable energy power generation businesses that
help to reduce GHGs, including solar power generation and wind power generation.

Balance of loans
outstanding

Strengthening Bank-Securities
Cooperation
The Nishi-Nippon City Bank and Nishi-Nippon City Tokai
Tokyo Securities have strengthened cooperation in the
securities brokerage business to make suggestions thatare tailored to customers’ diverse asset management
needs.

Balance of Fund Wraps*(billion yen)
15.8
10.7

The Nishi-Nippon City Bank offers Sustainability Linked Loans, which allow borrowers (corporate
customers) to set sustainability performance targets based on their SDGs/ESG strategies andlenders to offer incentives, such as changing interest rates, according to progress in theirachievements.
36

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

(current as of 31st March, 2022)

37.6
36.8

6.5
31st March, 2020 31st March, 2021 31st March, 2022

31st March, 2020 31st March, 2021 31st March, 2022
* Numbers at Nishi-Nippon City Tokai Tokyo
Securities¥50.5 billion

Sustainability Linked Loans (the first loan extended in September 2021)

Number of Brokerage Accounts*(thousand accounts)
38.7

Sales of SDGs/ESG-related Investment Trust
The NNFH Group provides its customers with opportunities to make ESG investments
through sales of SDGs/ESG-related investment trust.

Sales figures thus far(Group total)¥32.8 billion(FY2021)

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

37

Growth Strategy: (iv) Initiatives for the SDGs and ESG

Efforts to Create Industries and Jobs in the Region
The NNFH Group started as a financial institution specializing in financial services for SMEs. The Group is making active
contributions to the creation of industries and jobs in the region by providing funds and consulting services to venturebusinesses before and after foundation by giving full play to the unaltered DNA of developing SMEs.

NEW

Incubation
facilities

Funds- NCB Venture Fund
- QB Fund (No. 1 and No. 2)- The Company DAIMYO

15000- Leases to support startups

Platforms forcorporate customers- NCB Business Station- NNFH Big Advance

13,000Period total

11,05212000

Period total

9,167

9000

6000
Boosting the
NCB
StartupFinancing
Startup Support Support Salons3000- Loans to support startups- Support by business
Function- NCB Business Loansstartup consultants
0
Leasing

Support Extended to Startups and Second Startups*1: Number of Cases*2(Nishi-Nippon City Bank)
Period total

Progress

NNFH Business Competition 2021—OPEN INNOVATION HUB—
NNFH organized the second open innovation business competition for startups. In November 2021, a total of 57 entrants made an
entry and a shortlist of ten contestants who survived the first two rounds of screening gave presentations at the final round in March
2022. The first and second most outstanding contestants were commended.
NCB Open Accelerator@Fukuoka 2022
In cooperation with KPMG Japan, the Nishi-Nippon City Bank in April 2022 launched the NCB Open Accelerator@Fukuoka 2022
program (hereinafter the “Program”), which offers full support for the creation of new businesses by local companies.
Under the Program, the Nishi-Nippon City Bank teams up with startups and administrative/educational institutions to invite about
five local companies every year for full-support consulting services in their new business creation process up to thecommercialization of businesses thus created. The Program also alms to help participating companies to develop new businesscreation specialists.

71%

Previous Medium-TermBusiness Plan

FY2020–FY2021

Current Medium-TermBusiness Plan (KPI)*1 Definition of “second startup”- Commencement of a new business by a successor, etc. to an existing company- Commencement of a new business by a manager, etc. who has transferred (handed over)an existing business- Restructuring of a company to make a drastic business turnaround (change of business)*2 Extended to business within five years of startup or second startup

Finely-Tuned Startup Support
NCB Startup Support Salons and Business Startup Consultants

11,880 visitors in total(current as of 31st March, 2022)

At the NCB Startup Support Salons in Fukuoka City and Kita-Kyushu City
(opened in February 2016 and November 2017, respectively), the Nishi-Nippon
City Bank offers consultation services on everything to do with starting abusiness, including support for pre-startup business plan formulation, financing
at the time of startup, post-startup management guidance/consultation, andorganization of seminars. The salons also provide entrepreneurs with
opportunities to network with their peers.
At these salons, consultants offer one-stop and finely-tuned consultations
related to the startup. Given the spread of COVID-19, online consultation
services are also available.
Opening a Co-Working Facility, The Company DAIMYOIn May 2022, the Nishi-Nippon City Bank opened a brand new co-working
facility, The Company DAIMYO, within its Daimyo Branch building.
There, our resident business startup consultants offer consultation services ona variety of issues that customers may encounter before and after starting abusiness. Also organized at the facility are periodic consultations by certified tax
accountants and other specialists and gatherings designed to allow the tenants
to build a network.

Business Support through Funds
QB Fund No. 2
In April 2021, the Nishi-Nippon City Bank, NCB Venture Capital Co., Ltd., and QB Capital, LLC jointly formed the QB No. 2
Investment Limited Partnership (a.k.a. QB Fund No. 2) in a bid to leverage universities’ intellect to create innovations that originate
from the region (total value: 3.2 billion yen).
In April 2022, this fund completed its solicitation of capital contributions at a total of approximately 7.0 billion yen, to become oneof the largest venture support funds of university origin in Kyushu, Chugoku, and Shikoku.

Regional Contributions by Employees
Staffing Agency
In January 2022, NCB Research & Consulting Co., Ltd. (“NCB R&C”) signed an alliance agreement with ONODERA USER RUN Co.,
Ltd. (“OUR”) to begin support local companies who find it hard to recruit staff for long-term care for the elderly by introducing foreign
caregivers to them.
NCB R&C identifies the needs of medical and nursing-care service providers by organizing interviews and one-on-one
consultations to inquire about their staffing-related managerial issues. In cooperation with OUR, NCB R&C assists customers inrecruiting and developing foreign-national specified skilled workers in the nursing care field.
Supporting Companies in Going Public
In April 2022, Nishi-Nippon City Tokai Tokyo Securities became the first regional-bank-affiliated securities house in Japan to offer
lead-managing service in order to help local companies to be listed on the Fukuoka Stock Exchange.
Through this brand new service, Nishi-Nippon City Tokai Tokyo Securities help local companies with a variety of businesses
including: 1) providing advice on preparatory work for the listing, such as the development of an internal control system andformulation of a business plan; 2) managing schedules leading up to listing and the preparation of documents to be submitted; and3) supporting fundraising, investor relations, and other businesses after listing.

NCB Business Loans, Bank of Nagasaki Business Loans
In August 2021, the Nishi-Nippon City Bank began offering NCB Business Loans, which are designed to financially support
businesses run by sole proprietors. Everything from application to conclusion of a contract can be completed online anytime,
anywhere without having to visit a physical branch.
Meanwhile, in June 2021 the Bank of Nagasaki started offering Bank of Nagasaki Business Loans. Some of their advantages
include a simple application procedure that doesn’t require applicants to submit income verification documents and speedy
screening that an application may be filed via facsimile and responded to the following day.

38

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

39

Growth Strategy: (iv) Initiatives for the SDGs and ESG

Partnering with the Local Community

Multifaceted Programs Benefitting the Local Community

Collaborating with Local Governments

Commendation
The Excellent Executive Award

The NNFH Group has signed the comprehensive agreement on regional revitalization with 14 local governments and an individual
agreement on solutions to issues facing each region with nine local governments (the SDGs, promotion of immigration andsettlement, tourism promotion, etc.) as part of its commitment to regional revitalization.

Comprehensive agreement partners (14 local governments)
Fukuoka Prefecture
Itoshima City
Kurume City
Tagawa City
Nakagawa City
Itoda Town
Sue Town
Fukuchi Town
Miyako Town
Karatsu City
Tosu City
Individual agreement partners (9 local governments)
Iizuka City
Itoshima City
Ukiha City
Kama City
Keisen Town
Beppu City

Kita-Kyushu City

Nakama City
Hita City

Munakata City

Fukutsu City

Yanagawa City

Comprehensive Agreement on Collaboration and Cooperation with Itoshima City
In October 2021, the Nishi-Nippon City Bank signed a comprehensive agreement oncollaboration and cooperation with Itoshima City to jointly consider and implement businesses
concerning regional revitalization. Under the agreement, the Nishi-Nippon City Bank has been
instrumental in their community-building efforts in a broad range of fields, such as the realizationof the Itoshima Science Village, startup support, tourism promotion, promotion of immigrationand settlement, matching service, parenting support, and the achievement of the SDGs.


Since January 1973, the Prize of Excellent Executive (Chairman: Isao Kubota) has
commended excellent executives who have made outstanding achievements in the
management and/or technology of SMEs in the Kyushu region and Yamaguchi Prefecture,thus contributing to the development of the regional economy. A total of 177 executives havebeen commended current as of 30th April, 2022.

The Asian Contribution Award/The Asian Youth Award
In order to facilitate international mutual understanding, the Nishi-Nippon Foundation(Chairman: Isao Kubota) has annually commended groups, individuals, elementary and juniorhigh schools, and regional groups of children who are working toward the development of
Asian countries and the international exchange among them. Those to be commended are
picked from the Kyushu region and Okinawa and Yamaguchi Prefectures, and the winners of
the awards receive either The Asian Contribution Award (held 23 times current as of 31st
March, 2022) or The Asian Youth Award (held 17 times current as of 31st March 2022).

Provision of Economic/Financial Information and Finance Education
Lectures on Economic Matters
Since January 2008, the Nishi-Nippon City Bank has hosted this popular annual talk by the
NNFH’s Chairman Isao Kubota, to share the latest financial and economic information that
customers may find useful in steering their businesses or developing a business outlook for
the New Year. A total of 15 sessions have been held current as of 31st March, 2022.

Finance Literacy Education

Cooperation with Fukuoka City’s Well-Being&SDGs Registration System
In April 2022, in support of Fukuoka City’s Well-Being&SDGs Registration System, the NishiNippon City Bank became the first financial institution to handle NCB Loans in Support of theSDGs with Well-Being, a new loan product with incentives.


Since August 2007, the Nishi-Nippon City Bank has supported finance literacy education by,
for example, organizing a series of workshops on the topic for young citizens, who will leadthe next generation. A total of 16 sessions have been held current as of 31st March, 2022.

Providing Information to Schools, Etc.


Given the proposed expansion of the curriculum in finance and business for high schoolclasses, the NNFH Group is offering support for those at educational institutions byorganizing seminars for the faculty or otherwise. The Group also organizes informationalseminars for new members of society to provide them with knowledge on finance.

Support for Customer’s Efforts to Achieve the SDGs
colabora
Collaborating with Universities
The NNFH Group concluded the agreement on industry-university collaboration and cooperation with ten local universities toorganize various programs that contribute to the regional development and the advancement of learning.
As part of its community service, in fiscal 2021 the Nishi-Nippon City Bank sent its officers and clerks to universities to provide
students with opportunities to gain practical financial knowledge through lectures.
Industry-university collaboration agreement partners (ten universities)
Kyushu University
Kyushu Institute of Technology
Kyushu Sangyo University
Kurume Institute of Technology
Seinan Gakuin University
Nakamura Gakuen University, Nakamura Gakuen University Junior College
Nishinippon Institute of Technology
Fukuoka University
Fukuoka Institute of Technology
College of Healthcare Management

Industry-University Collaboration with Kyushu University
Based on the industry-university collaboration and cooperation agreement, which was concluded with Kyushu University in
March 2014, the Nishi-Nippon City Bank has organized a networking event since October 2014 with the aim of providing
opportunities to link the cutting-edge technologies developed at universities (seeds) to local companies’ business needs, thus
stimulating scientific research by universities and boosting local companies’ staying power through industry-university
cooperation. At the 22nd networking event, which was held online in July 2021, a case study on Kyushu University’s joint
research project with local SMEs was presented.

40

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

The Nishi-Nippon City Bank runs “colabora,” a website focusing on the SDGs for regional
revitalization, which features articles on the Group’s initiatives for achieving the SDGs, as well
as relevant initiatives by local companies to achieve their SDGs and by local governments torevitalize the region. A total of 22 articles have been uploaded current as of 31st March 2022.

Workshop-style Consulting Service


The Nishi-Nippon City Bank and Kyushu Hakuhodo Inc. agreed on a business alliance, andin April 2021 launched a workshop-style consulting service. Up to 31st March, 2022, a totalof 11 companies have availed themselves of this service, which supports companies whoseek to create ideas for businesses that contribute to the achievement of the SDGs andregional revitalization and work out solutions to social issues.

Solutions to Diverse Challenges Facing Local Companies
Food Drives

In August 2021, the Nishi-Nippon City Bank commenced food drives to donate food thatthey could not consume at home to children’s cafeterias, makeshift eateries for
disadvantaged children, in an effort to support children in the region in leading a healthy andmeaningful life. Up to 30th April, 2022, more than 50 locations, including the Headquarters
and branch offices, have participated in this campaign.

Cultural/Artistic Activities
Music Festival
Since December 2014, the Nishi-Nippon City Bank and the Fukuoka Cultural Foundation(Chairman: Isao Kubota) have co-hosted the Music Festival, an annual event designed toempower people in Fukuoka and Hakata with music. This year-end music celebration has
been held seven times current as of 31st March, 2022.
Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

41

Corporate Governance
Basic Approaches
At the NNFH Group, enhancement of corporate governance is deemed to be a managerial issue of prime importance. Accordingly,
every possible effort is being made to “enhance the soundness and transparency of management,” “accelerate decision-making,”and “perform duties smoothly.”
By establishing an Audit and Supervisory Committee under NNFH, we not only enhance corporate governance, but we have also
built a system for prompt and efficient decision-making by delegating authority over performance of important duties. With NNFH
specializing in management oversight and Group companies focusing on the performance of day-to-day duties, we maintain anadvanced level of business administration for the Group.

Nishi-Nippon Financial Holdings, Inc.
General Shareholders’ Meeting
Board of Directors

Audit and Supervisory Committee

Nomination and Remuneration Advisory Committee

Executive Committee

PDCA cycle for the Group’s business administration
PLA N

NNFH monitors the statusof business execution byeach company

Group companies
Efforts to Strengthen Corporate Governance

Composition of directors(current as of 30th June, 2022)
Outside directors:

3

December 2018
October 2016
• Established Nishi-Nippon Financial Holdings, Inc.
• Became a Company with an Audit and Supervisory Committee• Appointed three outside directors (one female outside director)

Female director:

Directors:

1• Established the Nomination andRemuneration Advisory Committee,
the majority of whose members are
Outside directors, etc.

9Overview of the Corporate Governance Structure

Elect/Dismiss

Audit and Supervisory
Committee
Directors who are Audit and Supervisory Committee members,
the majority of whose members are outside directors

Audit and Supervisory
Committee Members Office

Cooperate

Board of Directors

Nomination andRemuneration
Advisory Committee

Consult

Directors(excluding Audit and Supervisory Committee members)

ReportAccounting auditors
Accounting
Audit

Audit Report

Internal Audit DivisionInternal Audit

Compliance & Risk Management Division
Discuss/Report

The Nishi-Nippon
City Bank, Ltd.

The Bank ofNagasaki, Ltd.

NCB Venture CapitalCo., Ltd.

The Kyushu Card
Co., Ltd.
Japan Payment
Service CO., LTD.

NTT Data NCB
Corporation

42

Nishi-Nippon Financial Holdings Group

Nomination and Remuneration Advisory Committee
NNFH has established the Nomination and Remuneration Advisory Committee, the majority of whose members are outside
directors, etc., with a view toward ensuring objectivity, timeliness, and transparency concerning the election and dismissal of arepresentative director and senior management members (directors with special titles), assuring objectivity and transparency
concerning remunerations for directors, and developing successors in a systematic manner.

NNFH has established the Internal Audit Division, which conducts internal audits independent from all operations divisions and has
41 members as of 30th June, 2022. The Internal Audit Division, in accordance with the Internal Audit Regulations, verifies andassesses the adequacy and effectiveness of internal control systems of the Group, including a compliance structure and a risk
management structure, suggests improvements to problems, etc. to audited divisions, and reports audit findings, etc. to the Boardof Directors, Audit and Supervisory Committee (members), and the Executive Committee every month. By exchanging information
with accounting auditors, the division ensures that internal audits are conducted both objectively and efficiently.

Audit by the Audit and Supervisory Committee
Executive Committee

Corporate Planning Division

Comprised of the representative directors and five directors who are appointed by the President (current as of 30th June, 2022), theExecutive Committee deliberates on and makes decisions on important matters concerning management in accordance withmanagement policies or otherwise, determined by the Board of Directors. One full-time Audit and Supervisory Committee member
is invited to the Executive Committee meeting to provide pertinent advice. The Executive Committee meets whenever necessary.

Internal Audit

Elect/Dismiss
Cooperate

Audit/Supervise

Executive Committee

Status of Internal Audit, Audit by the Audit and Supervisory Committee, and Accounting Audit

General Shareholders’ Meeting
Elect/Dismiss

Comprised of nine directors (including four directors who are Audit and Supervisory Committee members, as of 30th June, 2022),
the Board of Directors of NNFH makes decisions about the performance of important duties concerning the Group’s management
and oversees the performance of the duties by directors.
NNFH has elected three independent outside directors (current as of 30th June, 2022) in order to ensure that independent andobjective perspectives augment the highly effective management oversight function by the Board of Directors. To adapt to rapidchanges in the operating environment and clearly determine responsibilities of directors in attaining business results for each fiscal
year, the term of office for directors (excluding those who are Audit and Supervisory Committee members) shall be one year, thus
keeping the Board of Directors actively engaged.
In addition, by introducing the executive officer system, we have separated management decision-making and oversight from theadministration of business operations in order to enhance the oversight function and promote rapid decision-making. The Board of
Directors meets once a month, in principle.

Comprised of four directors who are Audit and Supervisory Committee members (including three outside directors, current as of
30th June, 2022), the Audit and Supervisory Committee audits the performance of the duties by directors and compiles audit
reports. Audit and Supervisory Committee members shall, in accordance with an audit plan drawn up by the Audit and Supervisory
Committee, attend important meetings, inspect important documents, and investigate the status of the operations and the financial
status of NNFH, in order to audit the performance of the duties by directors.
The Audit and Supervisory Committee is also partially responsible for overseeing directors by electing directors (excluding those
who are Audit and Supervisory Committee members) and stating opinions on the remunerations to directors. The Audit andSupervisory Committee meets at least once every three months, in principle.

Each Group company
conducts business according
to Group strategies

C HEC K

Board of Directors

Audit and Supervisory Committee

NNFH draws up Groupstrategies

DO

AC T IO N

Group strategies arereviewed

Descriptions of the Organs of the Company

Group Strategy Planning Division

Business Management
Nishi-Nippon City Tokai
Tokyo Securities Co., Ltd.

NCB Research &Consulting Co., Ltd.

Kyushu Servicer

Nishi-Nippon Credit
Guarantee Co.

The Audit and Supervisory Committee comprises four members, including three outside directors and one full-time director. Every
member of the Audit and Supervisory Committee has considerable knowledge on finance and accounting through many years’
hands-on experience, etc.
The Audit and Supervisory Committee audits the performance of directors’ duties by having directors and others report on thestatus of execution of their business, as well as their development and implementation of an internal control system, and byattending important meetings, consulting documents on important managerial decisions, and investigating the status of directors’
business execution and properties, in accordance with the audit policy and division of business as stipulated by the Audit andSupervisory Committee. The Audit and Supervisory Committee also verifies the appropriateness of the methods and findings ofaudits conducted by accounting auditors by having them report on the status of business execution and by witnessing audits byaccounting auditors.

Accounting Audit
The NNFH’s accounting audit business is executed by certified accountants affiliated with Ernst & Young ShinNihon LLC.

INTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

43

Corporate GovernanceAppointment of Directors
Policy and Procedures for Nomination of Candidates for Directors
For the Board of Directors to effectively fulfill its roles and responsibilities, we believe it important to ensure that its members have adiverse range of knowledge, experience, and skills, on top of knowledge of the business and challenges of the NNFH Group. Ourbasic policy is to ensure that the Board of Directors is well balanced overall by appointing those with diverse expertise andbackgrounds as candidates for outside directors.
From this perspective, we appoint those well-versed in the NNFH Group’s business and challenges as candidates for directors.
We also ensure the objectivity and transparency of the decision-making process of the Board of Directors by allowing each Audit
and Supervisory Committee member to exercise his/her voting right held by the directors at the board meeting and the Audit andSupervisory Committee to exercise the statutory right to state its opinion at the general shareholders’ meeting in relation toappointment/dismissal and remuneration of directors who are not Audit and Supervisory Committee members.
Our articles of incorporation prescribe that the number of directors should be no more than twenty and that the number of
directors who are Audit and Supervisory Committee members should be three or more. Accordingly, we have appointed nine
directors, four of whom are Audit and Supervisory Committee members (current as of 30th June, 2022).

Specialty
NameIsao Kubota

President

Kiyota Takata

Director

Takashige Honda

Director

Kiyotaka Tomoike

Director, Audit and Supervisory
Committee member
Director, Audit and Supervisory
Committee member
Director, Audit and Supervisory
Committee member
Director, Audit and Supervisory
Committee member

We determine the independence of our outside directors based on whether or not we can expect them to proactively offer
suggestions and raise questions on the NNFH Group’s business challenges, assuming that the independence standards stipulatedby the Tokyo Stock Exchange, Inc. are fulfilled.
For instance, we take special care to determine if the independence of a person who has any of the following relationships with
the NNFH Group is compromised because of such relationships, and disclose to shareholders the relationships between the NNFH
Group and said person to the extent necessary.

Chiharu Kubo

A person who was an executing person of NNFH or any of its subsidiaries

2

A person for whom NNFH or any of its subsidiaries is his/her major counterparty(If he/she belongs to a company, an executing person of said company now or in the past)3

A major counterparty of NNFH or any of its subsidiaries*2(If he/she belongs to a company, an executing person of said company now or in the past)

4

A person who is a consultant, accounting professional or legal professional who has received a large amount ofmoney or other compensation*3, excluding remuneration for directors from NNFH or any of its subsidiaries, within
the last three years(If he/she belongs to a company or other form of organization, an executing person of said company or organization now
or in the past)5

A person who is a major shareholder*4 of NNFH
(If he/she belongs to a company, an executing person of said company)

6

A person who has kinship status with a person outlined in 1-5 above

7

An executing person of a company where an officer or a clerk of NNFH or any of its subsidiaries is an outside officer

8

An executing person of a company or other form of organization who has received a large sum of donations*5 from
NNFH or any of its subsidiaries within the last three years*1

Policy and Procedures for Appointment/Dismissal of Senior Management
Our Board of Directors appoints a representative director and senior managements (directors with special titles) after taking into
consideration reports by the Nomination and Remuneration Advisory Committee and, in the event that the performance of any
representative director or member of senior management (director with special titles) falls under the standards of removal as
stipulated by the Board of Directors, deliberates on his/her removal, thereby ensuring objective, timely, and transparent procedures
for appointment/removal of senior management.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Attribute

Corporate
management

Finance andeconomyFinancial affairs
and accounting

Legal affairs andrisk management

Chairman

Hideyuki Murakami

Toshio Sakemi

1

Position at the Company

Hiromichi Tanigawa Deputy Chairman

Independence Standards for Outside Directors*1 A counterparty that has received 2% or more of its consolidated net sales in the latest fiscal year from NNFH or any of its subsidiaries*2 A counterparty from which NNFH or any of its subsidiaries have received 2% or more of their consolidated gross profit in the latest fiscal year
*3 A total of 30 million yen or more in cash or other compensations over the last three years*4 A shareholder who holds 10% or more of the shares outstanding*5 A donation of 15 million yen or more in total received over the past three years

44

Skill Matrix
NNFH has identified corporate management, finance and economy, financial affairs and accounting, and legal affairs and risk
management, as being the four areas of specialty for members of the Board of Directors. Shown on the matrix below are the areasof specialty we expect from each member of the Board of Directors.

Sachiko Miyamoto

Outside independent
director
Outside independent
director
Outside independent
director* The above areas of specialty do not represent all of the knowledge and experience that directors possess.

Analysis and Evaluation of Board Effectiveness
Every year, we analyze and evaluate the effectiveness of our Board of Directors at the board meeting.
At the board meeting held in June 2022, we analyzed and evaluated the effectiveness of our Board of Directors based on thefindings of a self-evaluation questionnaire distributed to all directors to verify that effectiveness is largely ensured.
Going forward, we will seek every opportunity available to provide directors with pertinent information by, for example, making
reference materials for board meetings clearer and to the point, in order to further stimulate discussions among directors.

Support for Outside Directors
We make it a rule to fully explain the business, financial position, organizations, and other matters of the NNFH Group to our outside
directors upon the assumption of their position. We are also taking appropriate measures to develop an environment in which
outside directors can fulfill their roles and responsibilities effectively by, for example, providing prior explanations of the agenda forthe board meeting and briefings on their duties, and organizing on-site visits.
We also appoint full-time Audit and Supervisory Committee members, who support outside Audit and Supervisory Committee
members, and we have established the Audit and Supervisory Committee Members Office, which is directly managed by the Audit
and Supervisory Committee. Full-time members of the Office assist all Audit and Supervisory Committee members, including
outside members, and the Audit and Supervisory Committee in performing their duties.

Directors’ Remuneration System
Policy and Procedures for Decisions on the Content of Remuneration, Etc. of Individual Directors
We established the Nomination and Remuneration Advisory Committee, the majority of whose members are outside directors of the
NNFH Group, in order to enhance the objectivity and transparency of decisions on remuneration, etc. of directors (excluding
directors who are Audit and Supervisory Committee members; the same applies hereinafter).
Remuneration of directors shall comprise the monthly fixed price remuneration, and the stock-based remuneration, which isprovided with the aim of incentivizing directors to improve corporate value over the medium to long term, and the total amount of
the remuneration, etc. shall be no more than 300 million yen per year, which was approved at the general shareholders’ meeting
held on 29th June, 2022.
i) Fixed price remuneration (cash remuneration)
The amount of the remuneration, etc. for each individual director shall be determined according to the duty of the director by aresolution of the Board of Directors and in consideration of reports from the Nomination and Remuneration Advisory Committee,
and shall be paid on a monthly basis.
ii) Stock-based remuneration (non-cash remuneration)
With respect to the stock-based remuneration, each individual director shall, at a designated time of each fiscal year, be granted
points determined according to the duty of the director (with one point corresponding to one share) based on the Director Stock
Benefit Regulations established by NNFH and shall, at the time of retirement, be provided with the number of shares of NNFH’scommon stock (hereinafter “Company Shares”) that corresponds to the cumulative number of those points granted to the director (ifthe director retires at the expiration of his or her term of office, 30% of those Company Shares shall be replaced by the amount ofcash that is equivalent to the market value of that 30% of those Company Shares). The stock-based remuneration shall be
determined so as to account for approximately 10% of the total amount of the remuneration, etc., which is the sum of the fixedprice remuneration (cash remuneration) and the stock-based remuneration.
The Nomination and Remuneration Advisory Committee met in February 2022 to deliberate on remuneration, etc. of directors(excluding directors who are Audit and Supervisory Committee members). Remuneration, etc. of directors who are Audit andSupervisory Committee members has been decided through consultation among Audit and Supervisory Committee members.
Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

45

Risk Management- Internal/external
environments,
managerial issues- Management
strategies
Etc.

- Net income- ROE, RORA
Etc.

Integrated
verification

Integrated
management
Risks- Risk assets- Quantity of risks
Etc.

Capital- Capital
adequacy ratio- Stress testing
Etc.

Earnings plans- Net income- ROE, RORA
Etc.

Risk capital
allocation plans- Amount of capital
allocated, buffers- Capital adequacy
ratio, IRRBB
Etc.

Capital adequacy ratio = Core
capital / Risk weighted assets

Risks
and
returns

How much of what risks
should be taken to achieveearnings targets
If returns commensurate withrisks are generated

RORA: Indicatesprofitability
commensurate withrisks

Returns
andcapitalIf returns commensurate withcapital are generated

ROE: Indicatesprofitability
commensurate withcapitalCapitalandrisks

If capital sufficiency isensured under risk scenarios
or stress scenarios

Capital adequacy ratio:
Indicates capitalsufficiency
commensurate withrisks

Cooperate

ReportDiscuss/Report
Instruct

A Group Financial Crime Prevention Committee

Compliance & Risk Management Division
Categories
of riskOperatingdepartment

Credit risk

Market risk

Liquidity risk

Operational risk
Administrative risk

System risk

Legal risk

Human error risk Tangible asset risk Reputational risk

Internal
audit

Divisions
Discuss/Report

The Nishi-Nippon
City Bank, Ltd.

The Bank ofNagasaki, Ltd.

The Kyushu Card
Co., Ltd.

NCB Venture
Capital Co., Ltd.

Internal Audit Division

Returns

Major monitoring
indicators of risk appetite

Management
policies

Audit and Supervisory Committee

Executive Committee
Instruct

The Group’s approach
ROE =Returns /Shareholder
equityRiskmanagement
supervisingorganization

Discuss/Report

How RAF works
RORA =
Returns /Risk assets

Audit/Supervise
directors

Board of Directors

Instruct

The NNFH Group has introduced a risk appetite framework (RAF), a tool for optimizing risks and returns through integrated
management of strategies and risk management.
In drawing up a business plan (management plan and medium-term business plan), we verify management policies, earnings
plans, and risk capital allocation in an integrated manner based on future forecasts of risks, returns, and available capital.
We also monitor indicators on risk appetite periodically to follow up on the progress of the plans.

Committees
Each Group company establishes a consultative body, such as an ALM Committee and Operational Risk Committee, according to
the characteristics of their operational risks, and deliberates on and assesses matters concerning risk management both periodicallyand cross-sectionally.

Discuss/Report

Risk Appetite Framework (RAF)

Instruct/Monitor policies, etc.
Nishi-Nippon City Tokai
Tokyo Securities Co., Ltd.

NCB Research &Consulting Co., Ltd.

Nishi-Nippon Credit
Guarantee Co.

Kyushu Servicer

Japan Payment
Service CO., LTD.

NTT Data NCB
Corporation

Integrated Risk Management
We evaluate and manage risks by comprehensively identifying potential risk situations that are inherent to a group organization and,thus, are difficult for individual Group companies to deal with, such as the statuses of risks, and the likelihood of them adversely
affecting the Group, and then assessing them against the Group’s financial resilience (equity capital).

Initiatives for Risk Management
Risk management is one of the top priority issues in the management of the NNFH Group. Accordingly, we established the Basic
Policy on Risk Management, which serves as a set of shared norms for the Group, and we make concerted efforts to advance ourrisk management structure to establish a sound management base and ensure stable earnings.

Risk Management System
Centralized Management by the Risk Management Supervising Department
NNFH established a Compliance & Risk Management Division to manage all matters concerning risk management under one
umbrella. This Division periodically monitors the status of risk management within the Group and issues directives for improvement
as necessary, thereby ensuring that the risk management system is effective.

Allocating Risk Capital
NNFH allocates risk capital to each Group company under the framework of integrated risk management.
In more concrete terms, we use consolidated shareholders’ equity to allocate risk capital to each Group company in eachcategory of credit risk, market risk, and operational risk. We also monitor the quantity of risk and earnings results at each Group
company to ensure that risk is taken appropriately within the scope of allocated risk capital.
Stress Tests
The NNFH Group conducts stress tests to verify the impact that deterioration of the economic environment or market environment
may have on the capital adequacy ratio, sufficiency of shareholders’ equity, and appropriateness of risk taking. We also set sharedstress scenarios throughout the Group by taking into account cases of economic free fall from the past and risks that could occur inthe future.

Credit risk

Allocating risk capital toeach Group company basedon management policy andearnings plan

Verifying/reviewing the risktaking policy and risk
management structure
based on results of theassessment

Risk
Management
System basedon the RAF
Grasping/assessing thestatus of risk taking bycomparing/verifying thequantity of risk, earnings,
and shareholders’ equity

46

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

BufferVerify sufficiency of shareholders’ equity

BufferConducting business
operations based on the
management policy, earnings
plan, and risk capital
allocation (risk taking policy)(Consolidated)shareholders’equity(source ofrisk capital
allocation)

Allocaterisk capital

Credit risk

Nishi-Nippon
City Bank

Market risk
Market risk

The Bank ofNagasakiCredit risk

市場リスク

Market risk

Credit risk
Market risk
Operational risk

The Bank ofNagasakiCredit risk
Market risk
Operational risk

Other Group
companies

Credit risk
Operational risk

Shareholders’equityOperational risk

Operational risk

Market risk

Risk capital for allocation

Quantity of risk

Market risk

StressOperational risk

Operational risk

Other Group
companies

Nishi-Nippon
City Bank

Credit risk

Credit risk
Market risk
Operational risk
Credit risk
Market risk
Operational risk

Quantity of risk
(when under stress)

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

47

Risk Management

Risk Management Framework by Category
Credit Risk Management

Crisis Management

Credit risk is the possibility of a loss resulting from a reduction or complete loss of the value of assets (including off-balance assets)
due to such reasons as a deterioration in the financial situation of borrowers. Recognizing credit risk as the most important type ofrisk for the NNFH Group, NNFH established a Credit Risk Management Policy under its Risk Management Regulations, thereby
reinforcing the credit risk management system. The Group objectively and quantitatively monitors the risks of individual borrowers
and feeds any findings back to its credit portfolio management, thereby managing the entire Group in an integrated manner.
Also, in order to control the risk of a major loss occurring to the Group due to a concentration of credit to specific customers, wemanage credit appropriately and ensure the soundness of management. To properly depreciate and provide allowances for assets,
we set unified standards for strict self-assessment of assets.

NNFH has compiled the Business Continuity Regulations, which serve as a basic policy on the development of arrangements
needed to continue with minimal operations required to maintain the functions of the financial system in the face of a large-scaledisaster, system failure, or other unforeseen contingency. In compliance with this basic policy, each Group company has establisheda business continuity plan (BCP) and, by conducting various training, is working to improve the effectiveness of the business
continuity arrangement.

Market Risk Management
Market risk is the possibility of a loss due to fluctuations in the value of assets/liabilities (including off-balance assets) in response to
movements in interest rates, forex market, stock prices, and other parameters, and a loss due to fluctuations in earnings generated
from such assets/liabilities. NNFH established a Market Risk Management Policy under its Risk Management Regulations toreinforce its market risk management system. The NNFH Group sets limits on market risks so as to enable adequate managementof such risks and undertakes them within the limits, thus set to ensure stable earnings.

Liquidity Risk Management
Liquidity risk is the possibility of a loss due to a difficulty in securing necessary funds or being obliged to procure funds at an interest
rate significantly higher than usual because of a timing mismatch between management and procurement or an unexpected outflow
of funds (financing risk). It also refers to the possibility of a loss due to the inability to make transactions in the market on account ofconfusion in the market or other reasons or due to being forced to make transactions at prices significantly less favorable than usual(collectively, market liquidity risk). NNFH established a Liquidity Risk Management Policy under its Risk Management Regulations inan effort to reinforce the liquidity risk management system. In order to prevent tight finances, the NNFH Group maintains thesoundness of its assets so that it can ensure market liquidity and stabilize cash flows.

Our Response to COVID-19
The NNFH Group has established countermeasures headquarters and other organizations at each Group company to gather
information on COVID-19, draw up anti-infection measures, and ensure business continuity arrangements when any employees are
infected. Furthermore, we have established arrangements for information exchange and crisis management across Group
companies to ensure the safety of our customers and employees so that customers may use our services without anxiety.
Our Response to Natural Disasters
The NNFH Group assesses the potential risks of natural disasters such as earthquakes, tsunamis, typhoons, and floods, for eachlocation and reinforces the equipment, stockpiles emergency food and other supplies, and conducts routine safety drills, etc., so as
to ensure business continuity in the wake of a natural disaster.
Our Response to System Failures, Etc.
The NNFH Group is actively working to enhance safety measures for its systems and its backup systems in an effort to ensure thatevery possible precaution has been taken toward safe and uninterrupted operations. In addition, we conduct safety drills on aregular basis to ensure business continuity in the event of a system failure, cyber attack, etc.

Operational Risk Management
Operational risk is the possibility of a loss incurred by inappropriate business processes, behaviors of officers and clerks, or
systems, or by exogenous events. NNFH established an Operational Risk Management Policy under its Risk Management
Regulations, thereby strengthening its operational risk management system. Given that operational risks are so extensive, varied,and diverse that they concern every single operation and section and thus must be avoided as far as possible in business
management, the NNFH Group has developed an organizational setup and system that properly manage such risks, in order toprevent them from becoming actualized and to minimize their impacts should any such risks occur.
We group operational risks into six categories: 1. Administrative risk, 2. System risk, 3. Legal risk, 4. Human error risk, 5. Tangible
asset risk, and 6. Reputational risk, thus managing them according to the characteristics of risks each Group company is faced
with. Meanwhile, our Compliance & Risk Management Division monitors and manages the operational risks faced by the NNFH
Group as a whole.

Categories of Risk

48

Definitions of Risk

1. Administrative risk

Risk of losses being incurred as officers and/or clerks fail to perform their office work accurately or
become involved in accidents, irregularities, etc.

2. System risk

Risk of losses being incurred due to system failures, such as computer system shutdowns andmalfunctioning or unauthorized use of computers

3. Legal risk

Risk of losses/damage being incurred as a result of a breach of duty due to fault involving customers or
inappropriate business/market practices

4. Human error risk

Risk of losses/damage being incurred due to unfair/unjust personnel practices (involving remuneration,
allowance, dismissal, and other issues) and discriminatory behavior (sexual harassment, etc.)

5. Tangible asset risk

Risk of harm/damage to tangible assets being incurred due to wind and flood damage by typhoons,
torrential rain, and other forms of natural disasters, as well as other events

6. Reputational risk

Risk of losses/damage being incurred due to lowering of credibility as a result of reputational damage, thespread of rumors, etc.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

49

Compliance
Initiatives for Compliance
Effective compliance is one of the overriding management issues for the NNFH Group. As such, we have established the Basic
Policy for Compliance for the Group to follow and, based on the recognition that the compliance framework is a key infrastructure
upon which to build a relationship of mutual trust with our local communities and business partners, and our management hasannounced to all employees the resolution to ensure compliance in an effort to foster a corporate culture that considers complianceto be of critical import.

Compliance Management Structure
Unified Management by the Compliance Supervising Organization
Our Compliance & Risk Management Division is responsible for the unified management of matters related to compliance andperiodically monitors the status of compliance initiatives within the NNFH Group. They also work to ensure the effectiveness ofcompliance efforts by issuing improvement orders when deemed necessary.
Compliance Committee
Each Group company has established a Compliance Committee to conduct concrete and substantial discussions and assessmentsof matters regarding compliance that carry weight on their management on a regular basis.
Compliance Program
Pursuant to the Basic Policy for Compliance of the NNFH Group, each Group company draws up a compliance program, an annual
plan for practicing compliance, thus enhancing and reinforcing the compliance risk management framework.

The NNFH Group’s Compliance Management Structure
Audit and Supervisory Committee

Audit/
Supervise
directors

Board of Directors

ReportInstruct

Discuss/Report

A Group Financial Crime Prevention Committee

Instruct(Secretariat: Group Financial Crime Prevention Office)Compliance & Risk Management Division

Cooperate

A Group Financial Crime
Prevention Office

Discuss/
ReportDivisions(Compliance supervising organization)

Internal audit

Discuss/Report
The Nishi-Nippon
City Bank, Ltd.

The Bank ofNagasaki, Ltd.

NCB Venture
Capital Co., Ltd.

The Kyushu Card
Co., Ltd.

NCB Research &Consulting Co., Ltd.

Kyushu Servicer

Nishi-Nippon Credit
Guarantee Co.

Japan Payment
Service CO., LTD.

NTT Data NCB
Corporation

Measures against Money Laundering and Terrorism Financing
As threats of proliferation of weapons of mass destruction and terrorism increase globally, Japan and the international community
must come together to prevent funds from being distributed to criminals or terrorist organizations, making efforts to prevent money
laundering and terrorism financing more important than ever.
The NNFH Group has established the Basic Policy for Measures against Money Laundering and Terrorism Financing, under which
the entire Group commits itself to prevent money laundering and terrorism financing.

Basic Policy for Measures against Money Laundering and Terrorism Financing (Excerpts)
1. Organizational Structure- The NNFH Group’s management recognizes the importance of measures to prevent money laundering and other illegal financialtransactions and is actively committed to the prevention of such activities by appointing an officer in charge of measures to prevent money
laundering and other illegal financial transactions, while at the same time ensuring that all officers and clerks are dedicated to prevention inthis regard, thus reinforcing a framework for their management.
- The NNFH Group establishes a framework for unified management of money laundering and other illegal financial transactions byappointing persons and departments responsible for preventing such illegal financial transactions and has them draw up and manage
policies on our responses, so that we can deal with them cross-sectionally. The concrete content of such policies will be determined after
taking into account specific circumstances, for example, whether or not a Group company falls under “specified business operators” asstipulated in Article 2, Paragraph 2, Act on Prevention of Transfer of Criminal Proceeds.
- The NNFH Group assesses risks that involve the entire Group and develops a framework needed to share information within the Group to
ensure the effectiveness of the measures to prevent money laundering and other illegal financial transactions.
- The NNFH Group makes a confirmation at times of transaction or takes other measures appropriately pursuant to relevant laws andregulations of Japan and other countries and strives to make constant verifications and advance its responses in this regard, in order toprevent customers or officers and clerks of the Group from committing or being involved in money laundering and other illegal financialtransactions.

50

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Severing Relations with Antisocial Forces
Strongly recognizing its social responsibility, the NNFH Group is working to block its relationships with antisocial forces that threaten
the order and security of civil society.
In concrete terms, we designate a department that deals with antisocial forces and, through cooperation with police, lawyers, andother external professional bodies, firmly decline undue claims and interventions from antisocial forces, involving the entire
organization in doing so. Also, we ensure that we include an article to the effect that organized crime groups and other antisocial
forces should be eliminated in various application forms and contracts of the Group, in order to prevent transactions andrelationships with such groups.

In consideration of the purpose of the Whistleblower Protection Act, the NNFH Group has established the Whistle-Blowing
Regulations and a whistle-blowing desk at each Group company, with a view toward the early discovery and correction of acts inviolation of relevant laws and regulations by the Group and strengthening compliance-oriented management. We have alsoestablished a whistle-blowing desk where employees of each Group company may directly report to or seek consultation fromwithout going through their company within NNFH and external law firms, in a bid to improve the effectiveness of the whistleblowing system.

Initiatives to Prevent Bribery and Corruption
Instruct/Monitor policies, etc.

Nishi-Nippon City
Tokai Tokyo Securities
Co., Ltd.

3. Transaction Policy- The NNFH Group takes management measures commensurate with the risk with the customers or transactions in question, andimplements continued management in order to keep their information updated.
- The NNFH Group takes appropriate measures as dictated by relevant laws and regulations with regard to declining/eliminating business
relationships with financial criminals, those penalized for financial crimes, and the like, with whom developing or continuing a relationship isdeemed inappropriate.

Whistle-Blowing System

Executive Committee
Cooperate

Internal Audit Division

2. Initiatives for Reducing Risks- The NNFH Group identifies and assesses the risks that it faces in a timely and appropriate manner and takes measures to reduce suchrisks in accordance with the risk-based approach, in an effort to implement effective measures to prevent money laundering and otherillegal financial transactions.
- In order to put these initiatives into practice, the NNFH Group identifies and assesses the risks associated with the products and services
that it offers based on the content of the National Risk Assessment of Money Laundering and Terrorist Financing released by the National
Public Safety Commission, and compiles its measures to reduce such risks in a Risk Assessment Report.

Offering and accepting entertainment against laws and regulations, other rules, or social customs and practices, as well as giving
and receiving gifts, needs to be prevented. To this end, the NNFH Group sets out its stance and approaches in the ComplianceStandards. The Group keeps its officers and clerks informed of the standards, thereby working to prevent bribery and corruption.

Framework for Customer Protection
For the sake of customer protection, enhanced convenience, and facilitation of financing, the NNFH Group makes constant efforts
to establish a framework for customer protection by, for example, providing explanations to customers, responding to consultationand complaints from customers, managing customer information, supervising third-parties to whom it outsources part of its
operations, and appropriately managing conflicts of interest that may arise from transactions with customers.
To develop a framework for the safe management of customer information, we have established the Privacy Policy for publicannouncements and put it to appropriate use pursuant to applicable laws and regulations.

Initiatives for the Financial ADR System
When a customer has a dispute with a financial institution that they find difficult to resolve, no matter how much they consult witheach other, they can avail themselves of the financial alternative dispute resolution* (ADR) system. Upon application by a customer
or a financial institution, a neutral dispute settlement organization designated by the national government attempts to solve
complaints and problems.
* A procedure for bringing about a flexible solution to daily troubles through the involvement of a neutral and fair third-party, rather than by a court.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

51

Initiatives for Improving Customer Satisfaction

Building a Framework for Customer-Oriented Business Conduct

Increasing Accessibility to Customers

Basic Policy for Management and Building of Customers’ Assets(Basic Policy on Fiduciary Duty)

Barrier-Free Facilities

Under the Group Management Philosophy, the NNFH Group rolls out comprehensive financial services that exceed the expectationsof customers and host communities. To appropriately manage and build customers’ assets, the Group has built a framework forcustomer-oriented business conduct by establishing the Basic Policy for Management and Building of Customers’ Assets (Basic
Policy on Fiduciary Duty).
The Group has set objective and specific KPIs to assess the status of customer-oriented business conduct based on the basic
policy. The status is disclosed regularly and reviewed as needed.
Building a Framework for Customer-Oriented Business Conduct
In accordance with the Group Management Philosophy, the NNFH Group strives to ensure thoroughly customer-oriented businessconduct, aiming to be a comprehensive financial group chosen by customers. Each and every officer and employee works in a way
sincere and fair for customers.
Learning from Customer Surveys
The Nishi-Nippon City Bank and Nishi-Nippon City Tokai Tokyo Securities conduct surveys (NPS®*) targeting customers who haveasset management products, in order to take customer feedback seriously and offer better products and services. Based on thecomments and requests in the NPS® surveys and customer feedback cards, we strive to improve products and services and takeother measures to increase the level of customer satisfaction.
* NPS® stands for Net Promoter Score®, which represents how high level of interest customers have in a company’s brand, product, or staff and how strongly customers would like to recommend
them in charge to friends or family.

Offering Optimal Products and Services for Customers
Through dialogue with customers, the NNFH Group accurately understands customer needs and strives to offer optimal products
and services suited to customers’ asset status, experience, knowledge, and purpose of asset management.
Proposing Optimal Financial Products for Customers
According to customers’ investment policies and risk tolerance, the NNFH Group strives to propose asset management andbuilding based on portfolios of financial products, such as investment trusts, insurance products, and deposits.
* We make efforts to offer more detailed explanations to customers with little financial knowledge or transaction experience, as well as to elderly customers.
* We ask elderly customers to listen to product explanations with a family member, etc. In addition, we ask them to sign the contract at a later day, allowing sufficient time for consideration.

We promote universal design and barrier-free facilities at ourbranches for our valued customers.

Services Friendly to Persons with Disabilities

Entrance with no steps (slope)

The Nishi-Nippon City Bank and the Bank of Nagasaki haveinstalled a total of 868 and 45 ATMs (including those outside
branches) for visually-impaired persons, respectively, with atleast one at every branch (current as of 31st March, 2022).
Customers are also welcome to ask our staff to write/read forthem.

Customers can write here while seated Priority ATM for visually-impaired persons

Accessible Toilet

Initiatives for Security
The Nishi-Nippon City Bank and the Bank of Nagasaki take measures to prevent financial crimes, such as illegal money transfer via
internet banking and fake phone call fraud (bank transfer fraud).

Initiatives for Enhancing Security of Internet Banking
Measures Taken for the Nishi-Nippon City Bank’s Systems
NCB Direct (for retail customers) requires additional secret phrase authentication when customers attempt to connect fromunknown computers. In particular, we strongly recommend the use of one-time passwords. Customers who have conventional
cellular phones or smartphones are provided with an app (soft token), and customers who do not with a keychain-type device togenerate one-time passwords (hard token). Since 2021, one-time passwords have been required for transfers and othertransactions.
NCB Business Direct (for corporate and sole proprietor customers) requires one-time passwords available from soft and hardtokens. In addition, users can connect from registered computers only.
Measures Taken for the Bank of Nagasaki’s Systems
Nagasaki Internet Banking (for retail customers) aims to enhance security by requiring customers to use either one-time passwords
or email notifications passwords.
Nagasaki Business Direct (for corporate and sole proprietor customers) has introduced a system to which users can connect
from registered computers only. In addition, the system requires one-time passwords available from a keychain-type generator (hardtoken).

Providing Information to Customers in a Better Way
The NNFH Group strives to provide important information in a way easy to understand for customers, according to product andservice characteristics, customers’ experience and financial knowledge, and other factors. This helps customers select products
and services that meet their needs.
Making Information Easy to Understand
The NNFH Group strives to provide information to customers in a way easy to understand the characteristics, risks, commissions,and other aspects of products and services. To this end, materials with illustrations and graphs are used.
The Nishi-Nippon
City Bank

In September 2019, NCB Asset Management, an
information provision tool by the Nishi-Nippon City Bank,won the Another Voice Award in the UCDA Awards 2019organized by the Universal Communication Design
Association (UCDA). The Another Voice Award is given tocompanies highly regarded especially by consumers.

52

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

The Bank of Nagasaki

Nishi-Nippon City Tokai
Tokyo Securities

Measures Taken for Customers’ Computers
Free software to tackle illegal money transfer is distributed on the Nishi-Nippon City Bank’s and the Bank of Nagasaki’s websites.
The software prevents users from being directed to fake websites (phishing) and having their passwords and other information
stolen by viruses (spyware).

Initiatives for Preventing Fake Phone Call Fraud (Bank Transfer Fraud) and Other Financial Crimes
The Nishi-Nippon City Bank’s and the Bank of Nagasaki’s employees strive to prevent financial crimes by speaking to customers
who are using cellular phones at an ATM or a counter.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

53

Communication with Shareholders and Investors

Investor Relations

NNFH is engaged in the following to promote constructive dialogue with shareholders and investors.

1

Appointing responsible
persons

A director in charge of the Corporate Planning Division is responsible for ensuring that constructive
dialogue occurs at financial results briefings and other opportunities to engage with shareholders andinvestors and for providing as many of such opportunities as possible.

2

A framework for
promoting constructive
dialogueThrough cooperation with each division and Group company, the Corporate Planning Division develops aframework under which varying management information is gathered, analyzed, and offered toshareholders and investors in an appropriate form.

3

Measures to promote
opportunities for dialogue

As part of dialogues with shareholders and investors, financial results briefings and other events areorganized.

4

Feeding backshareholders’ opinions

Opinions presented in dialogues with shareholders and investors are appropriately fed back to the
management team by persons participating in the dialogues.

5

Control of insider
information

To manage important corporate information appropriately and prevent insider trading, we establish andkeep everyone informed of relevant in-house regulations.
We will not include matters that have yet to be made publicly available in handouts for investors or makeany comment on issues that may be deemed material facts.

For Institutional Investors and Analysts
We organize financial results briefings twice a year for institutional investors, analysts, and others, with the President making thepresentation after announcing the full-year results and interim results.
In addition, we invite a director in charge of IR and others to do one-on-one meetings to explain the financial conditions,management strategies, and other information of the NNFH Group and gather opinions and comments.

For Private Investors

IR Calendar
Jan

Feb

Mar

Apr

F inancial results
announcement
Financial Results releases

 hird-quarter financial
T
settlement

Securities reportand quarterly
reports submission

Third-quarter report

Disclosure materials
issuance

Interim Disclosure Report

May

Jun

Jul

Aug

Sep

Oct

 irst-quarterF
financialsettlement

 ull-year financial
F
settlement

Securities reportFirst-quarter report

Nov

Dec

 econd-quarter
S
financialsettlement
 econdS
quarterreportIntegrated Report (Disclosure Report)
Mini Disclosure Report
Interim Mini Disclosure Report

To help deepen understanding of the NNFH Group, we organize informational meetings for private investors in the hostcommunity as we see fit.

Shareholder Return Policy
In light of the public nature of a bank holding company and the importance of maintaining its sound management, we strive tostrengthen our financial resilience by retaining an appropriate level of internal reserves and continue with stable dividend
payments to our shareholders.
Our basic policy on shareholder returns is as follows:
1. With a stable annual dividend of 25 yen per share as the base,
2. Maintain around 30% of the ratio of total return to net income attributable to owners of parent
With the above as rough guidance for the time being, we will decide what and how much to each term by taking into
account the current economic circumstances, financial conditions, earnings forecasts, and other parameters.

Return to shareholders
The Amount of Profit Distribution to Shareholders and Total Return Ratio

General Meeting of
Shareholders

 nnual General MeetingAof Shareholders

Briefing for
institutional investors
and analysts

 ull-year financial
F
results briefing

Acquisition of treasury stock
Dividends (Nishi-Nippon City Bank)
Dividends (Nishi-Nippon Financial Holdings)
Total return ratio*1

Second-quarter financial results briefing

25.3%
19.9%

At Annual General Meetings of Shareholders held every June, we report our business performance to shareholders in the mostdigestible way possible, using videos and other tools.
We held the 6th Annual General Meeting of Shareholders on 29th June, 2022, by taking appropriate measures to minimize thechance of infection with COVID-19, by placing shareholders’ well-being and safety before everything else.
We make it a rule to send a convocation notice to shareholders well before the meeting and disclose the notice on our and stock
exchanges’ websites prior to the dispatch.
We also make it easy for our shareholders to exercise their voting rights by allowing them to vote on the internet or otherwise andparticipating in the electronic voting platform for institutional investors operated by ICJ, Inc.
For the convenience of international shareholders and other parties, we disclose an English version of the convocation noticealongside its Japanese original on the websites of stock exchanges and NNFH.

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

6.28
1.13

General Shareholder’s Meeting54(billion yen)

5.15

31.0%

6.55

7.10

32.2%

6.72
2.00

5.68

4.72

1.00
1.95

1.90
4.65

33.5%

30.2%

25.6%

25.0%

*3

4.77

30.5%

8.11
3.00

2.50

6.52
2.00

5.47

4.60

4.52

1.00
4.47

5.11

FY2018FY2019FY2020

FY2021

2.73

FY2013

FY2014FY2015FY2016 FY2017

Nishi-Nippon City Bank (consolidated)*2

Nishi-Nippon Financial Holdings (consolidated)*1 Total return ratio: Amount of profit distributed to shareholders (dividends + acquisition of treasury stock) / Net income attributable to owners of parent

100*2 Consolidated with the Nishi-Nippon City Bank as the parent prior to FY2015*3 4.99 billion yen earned during FY2014 minus 3.87 billion yen, which was used for the stock swap to acquire 100% ownership of two subsidiaries

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

55

Management of Securities and Status of Cross-Shareholdings
Management of Securities

Status of Cross-Shareholdings

The Nishi-Nippon City Bank, Ltd. will continue to increase its balance while pursuing an asset allocation that achieves both profitability

From the perspective of ensuring the stability of relationships with business partners, etc. of the Group, the Group has a policy ofholding cross-shareholdings only to the extent that it is recognized as contributing to the realization of “maintaining and strengthening
good business relationships and cooperative relationships with the Group”, “improving the medium- to long-term corporate value of theGroup and issuing companies” and “contributing to the local economy by the issuing companies”.
The Board of Directors comprehensively verifies every year, with regard to cross-shareholdings, whether it is appropriate to continue
holding them in accordance with the above policy and whether the risks and returns are economically rational. As a result, if it isdetermined that improvement is necessary, dialogue with the partner company shall be held. Nonetheless, if there is no signs ofimprovement, reducing the cross-shareholdings that do not show improvement shall be considered.

and resistance to market fluctuations, in order to strengthen its securities earnings power. At the same time, it will continue its efforts tostrengthen the structure of the market divisions.

Initiatives for Strengthening Securities Earning PowerStrengthen Investment Income Earning Power by Increasing Balance and Bond Switching
We are increasing our balance at an annual pace of 200-300 billion yen in order to strengthen the securities earning power. Whilecontinuing to replace low-yield bonds, etc. through bond switching, we will work to increase the balance and improve yields.

Changes in Cross-Shareholdings

Balance of Securities (book value)(billion yen)Domestic bonds

Foreign securities

Investment trusts

Stocks2,000

1,448.5
255.8

1,000

1,702.8
1,287.6

64.7
125.5

1,002.4
031st March, 2018

1,223.3

62.8

269.1

1,400.5

128.8

58.6

264.8

255.3

116.9

59.0

782.9

31st March, 2019

31st March, 2020

57.0

Balance Sheet Amount

380

129.7

150

1,132.1

149.6

20

16.8
3.7

Capital gain

19.1

18.7

6.1

5.8

100

89.8

0.2

51.2

50

13.1

13.0

12.9

10.5

12.6

FY2017FY2018FY2019FY2020

FY2021

0

0.8

-9.0

Foreign securities

7.1

-10.7

Investment trusts

9.7

13.3

Stocks

72.2

57.7

31st March, 31st March,
2021
2022

340

332
320

321
311

50

0

*Capital gains of FY2018 exclude the ¥13.7 billion gain on the sale of Nishi-Nippon Financial
Holdings shares.

111.5

102.3

(billion yen)Domestic bonds

127.0

125.6

31st March, 31st March,
2021
2022

12.8

14.4
3.9

10
0

(billion yen)360

31st March, 2022

Valuation gains on securities

Investment income(billion yen)

155.1

350
31st March, 2021

(Number of stocks)

200

100

Securities-related returns

Number of stocks

169.5

344.1

956.5

826.9

(billion yen)

31st March,
2017

31st March,
2018

31st March, 31st March,
2019
2020

310

31st March,
2021

304

31st March,
2022

300

280

*The figure shows changes in cross-shareholdings of The Nishi-Nippon City Bank, Ltd., and the company with the largest amount of investment shares on the balance sheet of the Group.

Interest Rate Risk
FY2017FY2018FY2019FY2020

FY2021

Duration of yen bonds (annual)

2.95

2.76

4.03

6.43

6.84

Duration of foreign bonds (annual)

4.25

4.25

3.69

4.11

4.48

IRRBB Importance Test Ratio (%)

—

8.9

11.3

5.0

6.6

Efforts to Strengthen the Structure of the Market Divisions
Increase Personnel
Some of the personnel freed fromother tasks through work reform will
be heavily re-allocated to the market
divisions.

56

Nishi-Nippon Financial Holdings Group

Number of personnel in the market divisions (front office)13

23

Planning toincrease to30

31st March, 2020

31st March, 2022

- in the future -INTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

57

Financial Information
Nishi-Nippon Financial Holdings Consolidated Financial Settlement Summary

Nishi-Nippon Financial Holdings Summary of Consolidated Financial Statements

Results Summary

Consolidated Balance Sheet Summary(Million yen)

FY2017FY2018FY2019FY2020

FY2021

Ordinary income

142,613

143,740

141,698

134,949

138,484

Gross operating profit

117,989

116,939

115,234

116,032

121,640

Net interest income

95,33296,753

91,27592,026

97,373

Net fee and commission income

21,074

20,844

20,264

19,046

20,932

Net trading income

2,489

1,433

1,382

1,842

1,919

Net other operating income(907)(2,092)

2,310

3,117

1,415

(306)

(758)

(2,579)(2,751)(955)

Expenses

83,17980,71080,47978,60378,076

Net business profits

34,80936,22834,75437,42943,563

Gains (losses) on equity securities

2,650

3,650

2,205

1,946

(909)

Cost of credit

3,068

5,519

6,445

9,452

4,030

Other extraordinary gains (losses)

(454)

52

(1,797)(3,160)(754)

Ordinary profit

33,93734,412

28,716

26,76337,868Extraordinary profit (loss)(1,515)

(358)

431

(864)

(714)

Income taxes

10,155

10,910

8,771

7,272

12,342

798

244

154

537

575

21,46722,89920,222

18,08824,236(of which net gains (losses) related to bonds)

Profit attributable to non-controlling interests
Profit attributable to owners of parent

Balance Sheet Summary(Million yen)

31st March, 2018 31st March, 2019 31st March, 2020 31st March, 2021 31st March, 2022
AssetsCash and due from banks

1,076,592

1,474,517

1,714,664

1,738,761

2,614,747

Loans and bills discounted

7,041,558

7,341,204

7,554,143

8,543,946

8,470,861

Securities

1,563,859

1,372,367

1,297,874

1,506,834

1,773,344

Total assets

9,961,663

10,449,051

10,822,765

12,075,567

13,127,906

7,866,674

8,092,534

8,481,571

9,295,489

9,570,343

478,620

416,232

349,475

188,520

264,293

Liabilities
Deposits
Negotiable certificates of deposit

9,426,768

Total liabilities

9,939,317

10,314,007

11,524,660

12,597,181

Net assetsof which earned surplus
Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

31st March, 2021 31st March, 2022
Cash and due from banks
1,738,761
2,614,747
Monetary claims bought
36,722
39,621
Trading account assets
131–
Money held in trust
11,273
11,682
Securities
1,506,834
1,773,344
Loans and bills discounted
8,543,946
8,470,861
Foreign exchange assets
11,07422,757
Other assets
115,565
90,311
Tangible fixed assets
117,551
116,172
Buildings
32,49132,542
Land
74,282
74,273
Leased assets
391
324
Construction in progress354
55
Other tangible fixed assets
10,031
8,977
Intangible fixed assets
3,542
4,160
Software
3,123
3,748
Other intangible fixed assets
419
411
Asset for retirement benefits
17,770
7,548
Deferred tax assets
473
2,109
Customers’ liabilities for acceptances and guarantees
16,565
17,639Reserve for possible loan losses(44,068)(42,473)
Reserve for devaluation of securities
(577)
(577)
Total assets
12,075,567
13,127,906

411,048

426,843

440,563

453,140

469,837

134,791

255,229

270,954284,535

304,236

116,426

75,40060,65089,651

52,332

7,420

7,490

7,544

8,114

8,555

534,895

509,734

508,758

550,906

530,724

9,961,663

10,449,051

10,822,765

12,075,567

13,127,906

31st March, 2021 31st March, 2022
9,295,489
9,570,343
188,520
264,293
208,128510,000
194,294
251,120
Guarantee deposits received under securities lending transactions
41,13587,188Borrowed money
1,437,688
1,755,240
Foreign exchange liabilities
210
201
Borrowed money from trust account
3,205
4,794
Other liabilities
107,648
113,952
Liability for retirement benefit
477
4,773
Reserve for retirement benefits for directors and corporate auditors
256
201
Reserve for reimbursement of deposits
1,185
825
Reserve for other contingent losses
1,254
1,096
Reserves under the special laws
12
12
Deferred tax liabilities
13,841
844
Deferred tax liabilities on revaluation of premises
14,746
14,652
Acceptances and guarantees
16,565
17,639Total liabilities
11,524,660
12,597,181
Liabilities and net assets

Deposits
Negotiable certificates of deposit
Call money and bills soldPayables under repurchase agreements

Capital stock
Capital surplus
Earned surplus(Total shareholders’ equity)
Net unrealized gains on securities available for sale, net of taxes
Net deferred gains (losses) on hedging instruments, net of taxes
Revaluation of premises, net of taxes
Retirement benefits liability adjustments, net of taxes
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

58

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Consolidated Statement of Income

AssetsTreasury stock

Shareholders’ equity(Million yen)

50,000127,202284,535(8,597)453,140
65,238(1,428)29,592(3,751)89,651
8,114

50,000121,123
304,236(5,522)469,837
38,616(8)
29,438(15,715)
52,3328,555

550,906

530,724

12,075,567

13,127,906

Ordinary income
Interest and dividend income
Interest on loans and discounts
Interest and dividends on securities
Interest on call loans and bills boughtInterest on deposits with banks
OthersTrust fees
Fees and commissions
Trading income
Other operating income
Other income
Recoveries of written off claims
OthersOrdinary expenses
Interest expenses
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money and bills soldInterest on payables under repurchase agreements
Interest on guarantee deposits received under securities lending transactions
Interest on borrowings
Interest on bonds
OthersFees and commissions
Other operating income
General and administrative expenses
Other expenses
Provision of allowance for loan losses
OthersOrdinary profit
Extraordinary income
Gains on disposition of fixed assets
OthersExtraordinary losses
Losses on disposition of tangible fixed assets
Impairment losses
OthersProfit before income taxes
Current
Deferred
Total income taxes
ProfitNon-controlling interests
Owners of parent

FY2020134,949
94,09082,193
9,985
2
546
1,362
0
30,879
1,842
4,972
3,164
239
2,925
108,186
2,064
659
39
(39)
911
44
253
61
133
11,832
1,855
81,272
11,161
6,218
4,942
26,763
421
401
20
1,285
436
818
30
25,898
6,719
552
7,272
18,626537
18,088(Million yen)

FY2021
138,484
98,228
81,10912,893
0
2,852
1,372
0
32,468
1,919
3,069
2,799
378
2,421
100,616
855
416
26
(113)
383
13
52
–
75
11,536
1,654
79,173
7,397
1,939
5,457
37,868
142
142
–
856
390
465
–
37,154
10,824
1,518
12,342
24,811
575
24,236

Consolidated Statement of Comprehensive Income(Million yen)

ProfitOther comprehensive income
Net unrealized gains on securities available for saleNet deferred gains (losses) on hedging instruments
Retirement benefits liability adjustments
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

FY202018,62629,47818,329413
10,735
48,104FY2021
24,811(37,104)(26,560)
1,419(11,963)(12,293)47,443661(12,928)
635

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

59

Financial Information

The Nishi-Nippon City Bank, Ltd. Summary of Financial Statements

The Bank of Nagasaki, Ltd. Summary of Financial Statements

Balance Sheet

Balance Sheet

Assets2,559,666
40,000131–

11,273

11,682

Securities

1,489,922

1,753,670

Loans and bills discounted

8,318,793

8,236,035

11,07422,757

Call loans
Trading account assets
Money held in trust

Foreign exchange assets
Other assets

102,551

78,110

Tangible fixed assets

113,463

111,825

Buildings

31,84331,591

Land

71,474

71,478

Leased assets

189

160

Construction in progress

354

55

Other tangible fixed assets

9,600

8,540

2,998

3,706

2,618

3,341

379

364

Prepaid pension cost

23,27625,862Customers’ liabilities for acceptances and guarantees

14,60015,849Reserve for possible loan losses(38,432)(458)(36,995)(458)

Intangible fixed assets
Software
Other intangible fixed assets

Reserve for devaluation of securities

12,821,711

Total assets

11,789,458

Liabilities and net assets

31st March, 2021 31st March, 2022

Deposits
Negotiable certificates of deposit
Call money
Payables under repurchase agreements

9,075,506
187,250
208,128

9,334,993
256,964
510,000

194,294

251,120

41,13587,1881,419,110

1,732,473

210

201

Borrowed money from trust account

3,205

4,794

Other liabilities

Guarantee deposits received under securities lending transactions
Borrowed money
Foreign exchange liabilities

75,92079,138Reserve for employee retirement benefits

212

192

Reserve for reimbursement of deposits

1,129

775

Reserve for other contingent losses

1,220

1,082

Deferred tax liabilities

15,6695,938

14,476
14,60014,381
15,849Total liabilities

11,252,071

12,295,093

Capital stock

85,74585,68485,74585,684275,068
446,498

289,932
461,362

Deferred tax liabilities on revaluation of premises
Acceptances and guarantees

Capital surplus
Earned surplus(Total shareholders’ equity)
Net unrealized gains on securities available for sale, net of taxes

62,72435,824

Net deferred gains (losses) on hedging instruments, net of taxes(1,428)(8)

Revaluation of premises, net of taxes

29,59290,88829,43865,255(Total valuation and translation adjustments)
Total net assets
Total liabilities and net assets

Nishi-Nippon Financial Holdings GroupStatement of Income

31st March, 2021 31st March, 2022
1,710,262
30,000Cash and due from banks

60(Million yen)

537,386

526,617

11,789,458

12,821,711

INTEGRATED REPORT 2022

Ordinary income
Interest and dividend income
Interest on loans and discounts
Interest and dividends on securities
Interest on call loans
Interest on deposits with banks
OthersTrust fees
Fees and commissions
Fees and commissions on domestic and foreign exchanges received
OthersTrading income
Gains on trading account securities transactions
Other operating income
Gains on foreign exchange transactions
Gains on sale of bonds
Gains on redemption of bonds
OthersOther income
Recoveries of written off claims
Gains on sale of stock and other securities
Gains on money held in trust
OthersOrdinary expenses
Interest expenses
Interest on deposits
Interest on negotiable certificates of deposit
Interest on call money
Interest on payables under repurchase agreements
Interest on guarantee deposits received under securities lending transactions
Interest on borrowings
Interest on bonds
OthersFees and commissions
Fees and commissions on domestic and foreign exchanges
OthersTrading expenses
Expenses on trading account securities transactions
Other operating income
Losses on sale of bonds
Losses on redemption of bonds
Losses on devaluation of bonds
Expenses for derivatives other than trading derivatives
General and administrative expenses
Other expenses
Provision of allowance for loan losses
Losses on write-offs of claims
Losses on sale of stock and other securities
Losses on devaluation of stock and other securities
Losses on money held in trust
OthersOrdinary profit
Extraordinary income
Gains on disposition of fixed assets
Extraordinary losses
Losses on disposition of fixed assets
Impairment losses
Other
Profit before income taxes
Current
Deferred
Total income taxes
Profit(Million yen)

FY2020
119,626
88,38278,091
9,761
(20)
528
21
0
23,727
7,863
15,863
–
–
4,614
589
3,997
25
2
2,902
189
2,059
14
639
98,572
2,127
736
37
(39)
911
44
241
61
133
15,313
1,792
13,520
4
4
1,854
846
335
88
584
69,366
9,906
7,111
405
94
18
25
2,250
21,053
401
401
1,231
411
817
2
20,223
5,229
155
5,384
14,838FY2021
122,344
92,46877,121
12,546
(23)
2,801
21
0
24,817
7,301
17,515
0
0
2,373
674
1,670
26
2
2,685
345
1,448
10
880
90,313
859
432
23
(113)
383
13
47
–
72
14,694
1,345
13,349
–
–
1,653
417
272
51
912
67,084
6,021
2,101
1,308
0
2,116
15
478
32,031
142
142
806
362
443
–
31,367
9,056
1,267
10,324
21,043

Assets(Million yen)

Statement of Income

31st March, 2021 31st March, 2022

Cash and due from banks

38,70352,921

Securities

6,758

9,029

(Million yen)

FY2020Ordinary income
Interest and dividend income

FY2021

4,711

4,638

3,891

3,880

263,067

275,993

Interest on loans and discounts

3,576

3,525

Other assets

2,348

1,834

Interest and dividends on securities

164

239

Tangible fixed assets

4,633

4,490

Interest on deposits with banks

150

115

600

543

Other interest income

0

0

3,612

3,597

Fees and commissions

Leased assets

202

160

Other tangible fixed assets

218

Loans and bills discounted

Buildings
Land

631

700

Fees and commissions on domestic and foreign exchanges received

102

93

189

Others

528

607

358

285

Other income

188

57

Software

337

257

Reversal of reserve for possible loan losses

21

28

114

–

Other intangible fixed assets

Recoveries of written off claims

233

132

43

27

Deferred tax assets
Customers’ liabilities for acceptances and guarantees

18

12

Others29

29

Reserve for possible loan losses

(379)

(396)

Ordinary expenses

4,596

4,301

Reserve for devaluation of securities

(43)

(43)

Interest expenses

315,699344,261

Intangible fixed assets

Total assets
Liabilities and net assets

31st March, 2021 31st March, 2022

40

35Interest on deposits

57

51

Interest on negotiable certificates of deposit

23Interest on call money

(22)

(23)

0

0

2

3

246,098

250,099

Interest on borrowings

Negotiable certificates of deposit

6,820

12,878OthersCall money

30,00040,000Borrowed money

15,60020,900

Other liabilities

Deposits

991

969

Fees and commissions on domestic and foreign exchanges

19

12

Others972

957

Fees and commissions

1,207

1,184

Reserve for employee retirement benefits

118

14

0

0

Reserve for retirement benefits for directors and corporate auditors

98

100

Losses on redemption of bonds

00

Reserve for reimbursement of deposits

55

50

General and administrative expenses

3,310

3,262

Reserve for other contingent losses

34

14

Other expenses

Deferred tax liabilities on revaluation of premises

509

509

Provision of allowance for loan losses
Losses on write-offs of claims

173

0

Others80

15Ordinary profit

114

336

Extraordinary income

20

–

20

–

9

26

18

12

Total liabilities

300,559

325,763

Capital stock

6,121

7,621

Capital surplus

4,463

5,963

Earned surplus

3,412

3,590

(Total shareholders’ equity)

13,997

17,176

Net unrealized gains on securities available for sale, net of taxes

44

169

Revaluation of premises, net of taxes

1,097

1,151

(Total valuation and translation adjustments)

1,141

1,321

Total net assets

15,13918,497

Total liabilities and net assets

315,699344,261

Acceptances and guarantees

Other operating income

OthersExtraordinary losses

253

33

–

17

Losses on disposition of tangible fixed assets

71

Impairment losses

124Profit before income taxes

125

310

Current(18)

32

Deferred64

45

Total income taxes

45

77

Profit79

232

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

61

Outline of Banking Subsidiaries

Organization Chart of Banking Subsidiaries

As of 31st March, 2021, the Group has a nationwide network of 175 branches of Nishi-Nippon City Bank, and 23 branches of Bank ofNagasaki, and 3 overseas representative offices of Nishi-Nippon City Bank, in Hong Kong, Shanghai, and Singapore.

The Nishi-Nippon City Bank, Ltd.

International Network of

The Nishi-Nippon City Bank, Ltd.
GeneralShareholders’ Meeting

The Nishi-Nippon City Bank, Ltd. Internal Audit DivisionCorporate Planning DivisionCorporate Risk Management Division

Business

Banking

Established

1st December, 1944

Headquarters

1-1, Hakata-ekimae 3-chome, Hakata-ku, Fukuoka 812-0011, Japan

Number of Employees

3,493

Number of Domestic Offices

175

Number of Correspondent Banks

71

Parent Company

Nishi-Nippon Financial Holdings, Inc. (NNFH’s share of voting rights 100%)

INTERNATIONAL BUSINESSDIVISION

Compliance Risk Supervisory Division
Audit and Supervisory
Committee

3-6, Hakata-ekimae 1-chome, Hakata-ku,
Fukuoka 812-0011, Japan
Phone: +81-92-476-2481
SWIFT: NISIJPJTFKK
Fax: +81-92-476-2488

Public Relations Division
Executive Secretariat

Audit and Supervisory
Committee
Members Office(As of 31st March, 2022)

IT Planning & Management Division

Human Resources DivisionCorporate Administration Division
Operations Planning & Management Division
Treasury & Portfolio Investment Division

TREASURY & PORTFOLIOINVESTMENT DIVISION

Treasury & Securities Transaction Division
Board of Directors

Credit Risk Management Division

4th Fl., Nittetsu Nihonbashi Bldg,
13-1, Nihonbashi 1-chome, Chuo-ku, Tokyo
103-0027, Japan
Phone: +81-3-6262-7957
SWIFT: NISIJPJTFax: +81-3-3273-2255

Branches

Board of Directors

Credit Supervision Division
Business Planning Division

Chairman�������������������� Hiromichi Tanigawa
President�������������������� Hideyuki Murakami
Deputy Presidents����������������� Kiyota Takata
Hiroyuki Irie
Hiroyuki Takeo
Representative Exective Director����������� Shigeru Urayama
Exective Director����������������� Masaru Ikeda
Managing Directors���������������� Takashige Honda
Kenichi Ozaki
Kenji Morimoto
Kazuhito Shigiyama
Keitaro Yaji
Director��������������������� Isao Kubota
Directors (Audit and Supervisory Committee Members)� Tomoko Ito
Michiaki Uriu (outside)
Hiroshi Fujioka (outside)

Executive Committee

Digital Strategy Division
Business Promotion Division
Retail Business DivisionInternational Business Division

TREASURY & SECURITIESTRANSACTION DIVISION

Overseas Representative Offices
Hong Kong Representative Office

3-6, Hakata-ekimae 1-chome, Hakata-ku,
Fukuoka 812-0011, Japan
Phone: +81-92-476-2540, +81-92-476-2484
SWIFT: NISIJPJT, NISIJPJTFKK
Fax: +81-92-441-6106

Shanghai Representative Office
Representative Office
Registered in Singapore
Personal Loan Transaction DivisionCorporate Business Solution Division
Private Banking Division

HONG KONG REPRESENTATIVEOFFICE

Regional Relationship Management Headquarters
Kita-Kyushu General Headquarters

Suite 3112, Tower 6, The Gateway, Harbour
City, 9 Canton Road, Tsim Sha Tsui, Kowloon,
Hong Kong
Phone: +852-2526-2259
Fax: +852-2845-9264

Chikuho Regional Headquarters
Chikugo Regional Headquarters(As of 30th June, 2022)

Kyushu Regional Headquarters*Directors/Audit and Supervisory Committee Members Michiaki Uriu and Hiroshi Fujioka are Outside Directors as prescribed in Article 2 (xv) of the Companies Act of Japan.

Tokyo Headquarters

The Bank of Nagasaki, Ltd.

(As of 30th June, 2022)

Business

Banking

Established

11th November, 1912

Headquarters

3-14, Sakaemachi, Nagasaki 850-8666, Japan

Number of Employees

202

Number of Domestic Offices

23

Parent Company

Nishi-Nippon Financial Holdings, Inc. (NNFH’s share of voting rights 100%)SHANGHAI REPRESENTATIVEOFFICE

The Bank of Nagasaki, Ltd.

Room No. 2209 Shanghai International Trade
Center, 2201 Yan-An Road (West), Chang
Ning District,Shanghai, People’s Republic of
China
Phone: +86-21-6219-0600
Fax: +86-21-6278-5940

General Shareholder’s Meeting
Board of Auditors
Internal Audit Division(As of 31st March, 2022)

Board of Directors and Audit and Supervisory Board Members

Corporate Planning Division
Board of Directors

REPRESENTATIVE OFFICEREGISTERED IN SINGAPORE

Human Resource & Corporate
Administration Division

1 Marina Boulevard Unit#25-07
One Marina Boulevard, Singapore 018989
Phone: +65-6222-0115
Fax: +65-6222-0171

Branches

President�������������������� Ryutaro KaichiManaging Directors���������������� Yasuyuki Shigetomi
Kiyotaka Imamura
Hiroshi Akiyama
Directors��������������������� Hiroji MochidaToshihiro Takaki
Takashige Honda
Audit and Supervisory Board Members�������� Kenji Miyata
Mitsuru Kawatani (outside)
Junichi Sakaguchi (outside)

Executive Committee

Credit Supervision Division
Business Management Division
Operations Planning &Management Division(As of 30th June, 2022)(As of 30th June, 2022)*Audit and Supervisory Board Members Mitsuru Kawatani and Junichi Sakaguchi are Outside Audit and Supervisory Board Members as prescribed in Article 2 (xvi) of theCompanies Act of Japan.

62

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

Nishi-Nippon Financial Holdings GroupINTEGRATED REPORT 2022

63

INTEGRATED REPORT 2022

INTEGRATED REPORT 2022

英文

最小使用サイズ

最小使用サイズ

6mm

6mm

ブランドマーク

1-1, Hakata-ekimae 3-chome, Hakata-ku,
Fukuoka, 812-0011, Japan
Phone: +81-92-461-1867

和文

英文This brochure is printed on "Kininaru Kami" paper using vegetable oil ink.
"Kininaru Kami" is made from timber thinned from forests in Fukuoka andother parts of the Kyushu Region.

Printed in Japan

最小使用サイズ

最小使用サイズ

6mm

6mm