28th Results Briefing(TSE code: 8356)

The Juroku Bank
[First half of the year ending
March 2017 (FY3/17 1H)]
November 24, 2016

Photo credit: Gifu City

Photo credit: Takayama City
Photo credit: Gifu City

Photo credit: Gifu Prefecture
Photo credit: Gifu City
Photo credit: Gifu Prefecture

Contents

Overview of Results for FY3/17 1H
Overview of results for FY3/17 1H......4

Factors affecting gross operating profit......5

Key data (deposits)......6

Key data (loans)......7

Key data (fees and commissions)......8

Key data (marketable securities)......9

Credit costs and nonperforming loans......10

Capital policy......11

FY3/17 Earnings Forecasts
FY3/17 earnings forecasts......13

Forecasts of factors affecting grossoperating profit......14

13th Medium-term Management Plan:
Progress
13th Medium-term Management Plan:
current position......16

Basic Strategies
Conditions in Gifu and Aichi Prefectures......18

Branch and ATM networks......19

Individual customer strategy......20

Business client strategy......23

Strengthening the regional economy......25

Business reform measures......28

Enhancing the skills of our personnel......29◆ Earnings forecasts and other forward-looking statements in this document are based on management's
assumptions and beliefs in light of information available at the time of publication. Actual results may differ
materially from forward-looking statements due to a wide range of factors.
2

Overview of Results for FY3/17 1H

Overview of results for FY3/17 1H– Consolidated and Non-consolidated –▼Non-consolidated
No

Calc. formula

1

Gross operating profit

2(Core gross operating profit)

3
4
5
6
7

▼Consolidated(Billion yen)

FY3/161H

FY3/17
1H

Forecasts f or
FY 3/17 1H

Change[3+4+5]

36.5

34.4

-2.1

37.7

[1-6]

(33.4)(31.7)(-1.7)(35.0)Net interest income

28.9

28.0

-0.9

28.0

Fees and commissions

3.7

2.5

-1.2

4.6

Other operating profit

3.7

3.8

0.1

4.9

3.0

2.6

-0.4

2.6
27.7

Gains/losses on JGBs andother debt securities
Expenses

26.3

25.9

-0.4

8

Personnel expenses

14.6

14.4

-0.2

9

Non-personnel expenses

10.0

9.8

-0.2

10

Taxes

1.6

1.6

0.0

[1-7]

10.1

8.4

-1.7

8.0

9.9

12 Net core operating profit

[2-7]

7.1

5.7

-1.4

6.4

7.2

[11-15]

10.1

8.5

-1.6

7.7

9.9

[15+16-17-18-19]

-0.8

0.9

1.7

1.8

1.4

14 Credit costs
15

Provision of general loan-loss reserves

-

-0.0

-0.0

-0.0

16

Write-dow ns of nonperforming loans

0.1

1.0

0.9

1.5

17

Gain on reversal of loan loss reserves

0.9

-

-0.9

-

18

Gain on collection of w ritten-off loans

0.0

0.0

-0.0

0.0

19

Gain on reversal of contingent loss

-

-

-

-

20 Gains/losses on equities

0.5

-0.0

-0.5

-0.0

21 Other extraordinary gains/losses

1.7

1.2

-0.5

1.2

22 Investment trust financing expenses

0.0

0.0

-0.0

23 Ordinary profit

13.3

8.6

-4.7

24 Extraordinary gains/losses

-0.1

-0.1

0.0

-0.1

25 Interim net income before taxes [23+24]

13.1

8.5

-4.6

9.5

26 Total income taxes

3.5

2.3

-1.2

2.7

9.5

6.1

-3.4

27 Interim net income[11-14+20+21-22][25-26]Gross operating profit
 Gross operating profit fell ¥2.1 billion YoY to¥34.4 billion, due mainly to a decline in fees
and commissions.

Net business profit

11 Net business profit
13 Net operating profit

Overviews of non-consolidated results

FY3/17 1H

0.0
7.5

5.5

 Personnel expenses and non-personnel
expenses declined, but net business profit fell
¥1.7 billion YoY to ¥8.4 billion due to the drop
in gross operating profit.

Ordinary profit
 Ordinary profit declined ¥4.7 billion YoY to¥8.6 billion, primarily reflecting an increase incredit costs.

Interim net income

9.7 Interim net income declined ¥3.4 billion YoY
to ¥6.1 billion due to the drop in ordinary
profit.

* 6.4* Interim net income attributable to shareholders of the parent company

4Factors affecting gross operating profit– Non-consolidated –Interest on loans and fees and commissions declined, but an improvement for interest on deposits andfor interest on marketable securities limited the drop in gross operating profit to ¥2.1 billion YoY
B: Balance factors
Y: Yield factors

36.5(Billion yen)Interest on
marketablesecurities(+0.9)

Interest on
loans(-2.1)
Interest on
deposits, etc.
(+0.9)

Fees andcommissions(-1.2)

Gains/losses on
JGBs and otherdebt securities(-0.3)

B: +0.4
Y: +0.5
B: +0.3
Y: -2.4

34.4

B: +0.0
Y: +0.8

Net interest income(key items)

FY3/16 1H

Other(-0.1)

Fees andcommissions, other

FY3/17 1H
5Key data (deposits)▼Deposits▼Deposits by region(Billion yen)

5,437.9

5,439.4

5,275.5
5,000.0
4,000.0345.0
1,423.7+83.7

5,000.0

-1.5

323.2

(Billion yen)

323.5

4,500.0
4,000.0

1,493.9

1,514.2

3,901.1

3,817.4

3,746.3

3,500.0-20.3

3,000.0
3,000.02,500.0+18.6

2,000.0-44.2

3,506.7

2,000.0
3,620.4

3,601.8

1,542.9

1,479.5

1,500.0

1,498.7

1,000.0

1,000.0

500.0
0.0

0.0
FY3/15 1H
IndividualBusiness

FY3/16 1H

Gifu

FY3/17 1H

Municipal, other

Aichi
Mie

FY3/15 1H

Deposits from individuals increased,
despite a lower promotional interest
rate for deposits

+

Gifu

Aichi
Mie

FY3/16 1H

Gifu

Aichi
Mie

FY3/17 1H

Decline in deposits from businesses
main reason for ¥56 billion drop in
negotiable certificates of deposit

Summer promotional interest rates on time deposits(1 year) in Juroku Bank's sales area
Juroku Bank
Bank ABank B
Shinkin Bank C
Shinkin Bank D
Agricultural Cooperative E

0.05%
0.10%
0.12%
0.15%
0.20%
0.27%

Average contracted interest
rate on deposits down 0.037%

Decline in fundprocurement
costs
6Key data (loans)
Loans to individuals strong, low interest rate loans to large companies decline, loans to SMEs
continue to grow
Loans by sector

Business loans by company size (YoY change)+61.6(Billion yen)(Billion yen)

4,500.0

Loans to individuals still strong

140.0

4,000.0

3,796.6

3,904.5

3,966.1

423.8

416.7

412.4

1,140.6

1,241.3

3,500.0

120.0
100.0
80.0

3,000.0+100.7+100.3100.3

1,341.6

100.7
FY3/15 1H
FY3/16 1H
Second consecutive
FY3/17 1H

year of growth60.0

2,500.0

47.6

16.5

40.0

2,000.0

20.0

1,500.0+14.3

2,232.1

1,000.0-34.4

2,246.4

-20.0

- 4.2

- 7.2

- 12.8-40.0

0.0- 50.9-60.0

FY3/15 1H

FY3/16 1H
Business

Individual

Large/mid-size
companies

FY3/17 1H

Municipal▼Loan balance and annualized growth by region(Billion yen)
7.00
1,900.0

6.95

8.00

6.29
1,862.5

1,800.0

1,834.7

1,750.0
1,700.0

1,726.0

0.08

0.09

1,650.0

1,674.0 1,640.4
1,628.8

1,627.5

6.00

4.02
4.00

1,790.5

0.38- 0.712.00
0.00

1,635.1
1,628.6-2.00- 3.35-4.00

1,500.0
FY3/15 1H

FY3/15

FY3/16 1H

Loans in Gifu Prefecture
Annualized growth in Gifu Prefecture

FY3/16

FY3/17 1H

Loans in Aichi Prefecture
Annualized growth in Aichi Prefecture- 54.1
SMEs

Individual

Loans tomunicipal
bodies▼Housing loans by region(Billion yen)

(%)

7.31

1,850.01,550.0

27.0

15.6

0.0

2,212.0500.01,600.0

125.2

1,000.0
900.0
800.0
700.0
600.0
500.0
400.0
300.0
200.0
100.0
0.0

931.1
833.9
728.2

Gifu

541.5

521.1

498.0

Aichi

FY3/15 1H

Gifu

Aichi

FY3/16 1H

Gifu

Aichi

FY3/17 1H

7Key data (fees and commissions)Individual client assets up ¥19.2 billion YoY to ¥4,281.8 billion, balance of other client assets
also higher YoY
Individual client assets(Billion yen)

4,500.0

4,262.6

4,147.8

4,000.0

4,281.8▼No. of investment trust accounts and NISA
accounts / NISA usage ratio
Total potential non-

661.4

(No. of accounts)

+19.2

660.7

641.1

Largest NISA account balance inthe three Tokai prefectures!

+0.7

No. of investment trust accounts

3,500.0

No. of NISA accounts

70,0003,000.0

60,000+18.6

55,12450,0002,500.0
3,620.4

3,601.8

3,506.7

59,163NISA usage ratio

70%

60,234
65.4%

60%
48.7%

40,0002,000.0

63.2%

taxable savings
amount: roughly¥47 billion

39,43135,60732,07140%

30,00030%

20,0001,500.020%

10,0001,000.00FY3/15 1H

FY3/16 1H

5.0(Billion yen)

(B)

(C)

FY3/17 1H(Billion yen)

Other client assets(A)

FY3/16 1H▼Fees and commissions

Balance of other client assets
Balance of individual deposits

FY3/15 1H FY3/16 1H FY3/17 1H

10%
FY3/15 1H

FY3/17 1H

50%

YoY15

YoY

(C)-(A)(C)-(B)

(%)

11.29

12.00

10.13

10.00

4.0

7.99
8.00

3.0

Mutual fund

165.8

174.5

167.2

1.4

-7.3

Individual annuity
insurance

396.0

454.2

477.4

81.4

23.2

2.0

Public bond

79.2

31.9

16.6

-62.6

-15.3

1.0

2.00

Total

641.1

660.7

661.4

20.3

0.7

0.0

0.00

6.00

3.5

FY3/15 1H

3.7

FY3/16 1H

2.5

4.00

FY3/17 1H

Fees and commissions
Ratio of fees and commissions in core gross operating profit

8Key data (marketable securities)
Flexibly adjusting asset class allocations in response to market trends▼Balance of marketable securities▼Valuation gains/losses(Billion yen)(Billion yen)

2,000.0

1,859.3

1,784.7

1,731.2

279.6

604.5

85.8

85.3

90.0

330.1

1,500.0

88.1

100.0

80.0

4.4

70.0

23.9

8.5
18.6

26.4
Decrease indomestic
interest rates

60.0
50.0

1,000.0
1,371.0(bonds)+7.8

40.0

1,254.8

1,125.9

30.0

500.0

(equities)
-15.3

68.3
56.9

53.0

Decline in
the stockmarket

20.0
10.0

0.0

133.9

146.2

128.8

FY3/15 1H

FY3/16 1H
Other securities
JGBs and other domestic bonds
Equities

FY3/17 1H▼Related gains/losses
Gains/losses on JGBs and otherdebt securities
Gains on sale
Gains on redemption
Losses on sale
Amortization
Gains/losses on equities
Gains on sale
Losses on sale
Amortization

0.0
-10.0

(Million yen)
FY3/16 1H

FY3/17 1H

3,014

2,679

-335

4,238
1,224
-

2,848
6
171
4

-1,3906-1,053
4

537
686
90
58

-10
790
752
47

-547
104
662
-11

ChangeFY3/15 1H- 1.1
FY3/16 1H

FY3/17 1H

Valuation gains/losses on other securities
Valuation gains/losses on bonds
Valuation gains/losses on equities▼Cross-held shares (book value basis)
95.0
90.0
85.0
80.0
75.0
70.0
65.0
60.0
55.0
50.0

(Billion yen)
88.3

59.9

59.3

FY3/15

FY3/16 1H

57.5

57.3

FY3/16

FY3/17 1H

9FY3/09…

Credit costs and nonperforming loans
Credit costs(Billion yen)

Credit costs (1+2-3-4-5)(1) Provision of general loan-loss reserves(gain on reversal)(2) Write-downs of nonperforming loans
Loans written off
Provisions for specific loan-loss
reserves
Losses on bulk sales
Other(3) Gain on reversal of loan loss reserves(4) Gain on collection of written-off loans(5) Gain on reversal of contingent loss

FY3/151H-0.2

FY3/161H-0.8

FY3/17
1H
0.9

-

-

-0.0

0.4
-

0.1
-

1.0
-

-

-

0.6

0.1
0.2
0.6
0.0
-

0.1
0.0
0.9
0.0
-

 Credit costs remain low
 Nonperforming loan ratio was 2.45% as ofend-FY3/17 1H▼Nonperforming loans(Financial Revitalization Law basis)

0.3
0.0(Billion yen)
0.0
200.0
-

(%)
Loans to bankrupt and quasi-bankrupted borrowers▼Write-downs of nonperforming loans by sector(Million yen)

Doubtful loans
Loans requiring monitoring

FY3/15 1H

1,500

FY3/16 1H
1,192

Nonperforming loan ratio

3.03
150.0

1,000

116.9

686
500

408
109

165

148

253

3.00

2.75

FY3/17 1H

1,044

4.00

2.45

109.1

16.2
14.2

100.0

-10.5

98.6
2.00
16.2

125

0
-71
-264

-500

-409

- 349
-517

50.0

89.0

85.9

1.00
78.2

-1,000-1,100-1,500

0.0
Manufacturing Construction

Retail/wholesale

Real estate

Services/
other

11.7

9.0

FY3/15 1H

FY3/16 1H

4.2
FY3/17 1H

0.00

10

Capital policy▼Equity▼Improvement in quality of capital●Equity ratio (consolidated) was 10.35% as of endFY3/17 1H, or 8.87% on a full implementation basis(%)(Billion yen)

500.0

10.70
450.0

9.99

9.65

●Subordinated financing reduced by ¥40 billion (fromend-FY3/11 to end-FY3/17 1H)
Purchased and retired ¥20 billion of Class 1 preferredshares (March 10, 2015)(Billion yen)

Equity (non-consolidated)
281.4
278.5
271.0
20.0
20.0

12.00 300.0

10.34 10.35

9.64

11.00

252.5

239.3

10.00 250.0

400.0

8.70

8.59

8.61

8.95

8.83

8.87

300.0

8.00
6.00

200.0

5.00

150.0

255.9

200.0

7.00

250.0

278.2

273.9

278.9

305.2

300.0

305.7

4.00
2.00

50.0

1.00

0.0

0.00

FY3/16 1H
FY3/16
FY3/17 1H(non(non(nonconsolidated) consolidated) consolidated)

EquityEquity ratio

230.4

FY3/16 1H
FY3/16
FY3/17 1H(consolidated) (consolidated) (consolidated)

Full implementation basis

250.0

219.5

196.3

194.5

150.0
100.0
Basel II

3.00

100.0

278.9

260.9

9.00
350.0

273.9

Basel III

50.0
58.0

43.0

39.0

31.0

21.0

18.0

18.0

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/171H

0.0
FY3/11

Preferred shares
Excluding preferred shares / subordinated financing
Subordinated financing▼Dividends

Dividend per share (full year)

FY3/15

FY3/16

FY3/17 (forecast)¥8.0(including ¥1.0
commemorative dividend)

¥7.00

¥7.00

Dividend to commemorate
completion of merger

11FY3/17 Earnings Forecasts

FY3/17 earnings forecasts– Consolidated and Non-consolidated –▼Non-consolidated
No

Calc. formulaGrossoperatingprofit[3+4+5]
1[1-6]
2 (Core gross operating profit)
3
4
5

FY3/16
FY3/17(Results)(Forecast)
71.1
68.9
(65.1)(63.2)(Billion yen)
Change(YoY)-2.2(-1.9)Net interest income
Fees and commissions
Other operating profit
Gains/losses on JGBs and6other debt securities
Expenses
7

57.2
6.8
6.9

55.4
6.1
7.4

-1.8
-0.7
0.5

5.9

5.7

-0.2

51.6

51.1

-0.5

8
9

Personnel expenses
Non-personnel expenses

29.0
19.8

28.6
19.5

-0.4
-0.3

10
Taxes
[1-7]
11 Net business profit[2-7]
12 Net core operating profit[11-15]
13 Net operating profit[15+16-17-18-19]
14 Credit costs

2.7
19.4
13.5

3.0
17.8
12.1

0.3
-1.6
-1.4

20.5
2.8
-1.1
3.9

17.3
3.4
0.5
2.9

-3.2
0.6
1.6
-1.0

0.0

0.0

0.0

Gain on reversal of contingent loss
19
20 Gains/losses on equities

0.1

0.1

0.0

21 Other extraordinary gains/losses
22 Investment trust financing expenses

2.3
0.0

1.0
0.0

-1.3
0.0

23 Ordinary profit

19.0

15.5

-3.5

-0.4

-0.2

0.2

[23+24]

18.6
6.3

15.3
4.8

-3.3
-1.5

[25-26]

12.2

10.5

-1.7

15
16

Provision of general loan-loss reserves

17
18

Gain on reversal of loan loss reserves

Write-dow ns of nonperforming loans
Gain on collection of w ritten-off loans[11-14+20+21-22]

24 Extraordinary gains/losses
25 Net income before taxes
26 Total income taxes
27 Net income▼Consolidated
FY3/17(Forecast)

Forecasts for FY3/17▼Non-consolidated
Ordinary profit¥15.5 billion

Net income¥10.5 billion▼Consolidated
Ordinary profit¥18.0 billion

Net income attributable toshareholders of the parent
company¥11.3 billion

18.0* 11.3* Net income attributable to shareholders of the parent company

13Forecasts of factors affecting gross operating profit– Non-consolidated profit/loss –B: Balance factors
Y: Yield factors

71.1Interest
on loans(-4.2)

Interest on
deposits, etc.
(+1.8)

Interest on
marketablesecurities(+1.6)(Billion yen)
Fees andcommissions(-0.7)

Gains/losses on
JGBs and otherdebt securities(-0.2)

Other(-0.5)
68.9

B: +0.6
Y: -4.8

B: +0.0
Y: +1.7

Net interest income(key items)

FY3/16

B: +1.2
Y: +0.4

Fees andcommissions, other

FY3/1714

13th Medium-term Management Plan:
Progress13th Medium-term Management Plan:
current position▼Numerical targets

Targets

Start of plan

Final year
(end-Mar 2017)

Deposit balance¥5,155.4bn¥5,437.9bn¥5,600.0bn

Number of retailborrowers

97,780109,765

100,000 or more

Net income¥12.3bn¥6.1bn¥10.0bn

Core equity ratio

8.66％

8.61％

8.8% or more

0.09％

0.05％

Less than 0.2%

Growthpotential(customerbase)

Earning
capability(Full-implementation basis)

Financialsoundness

FY3/17 1H
Results

Ratio of credit
cost to total loans

Interim■ Number of retail borrowers =SME borrowers (including proprietors) + Number of housing loans and apartment loans (based on the Bank’s standards)
capital ratio■ Core(full implementation basis)=

Core capital (before transitional arrangement)
Risk assets (before transitional arrangement)■Ratio of credit cost to total loans=

Credit costs
Average loan balance16

Basic Strategies

< Regional focus >Conditions in Gifu and Aichi Prefectures▼National population census 2015: population by
prefecture (Confirmed data)
Japan’s population fell for the first time since the census
began in 1920, however, Aichi Prefecture’s population
continued to increase▼Chubu region's share of aircraft and relatedparts production (value basis)(Billion yen)

Chubu region

Other regions

Chubu region’s share (%)(No. of people)
1,400

100,000
80,0001,300

60,00040,0001,200

20,0000-20,000-40,000

Shiga

Mie

Aichi

Shizuoka

Gifu

NaganoFukui

Ishikawa-80,000

Toyama-60,000

Source: Juroku
Bank, based ondata from Statistics
Bureau, Ministry ofInternal Affairs andCommunications

1,100
1,000

900

800

▼Change in official land prices in 2016 by prefecture

700

Residential and commercial land prices have risen in Aichi
Prefecture for three consecutive years and the rate of
decline has slowed in Gifu Prefecture600(%) 3.0400

Residential
Commercial

2.0

500

715.0
300

1.0

200

0.0
-1.0

Shiga

Mie

Aichi

Shizuoka

Gifu

NaganoFukui

Ishikawa

Toyama

-2.0
-3.0

605.8

Source: Juroku
Bank, based ondata from Ministryof Land,
Infrastructure,
Transport andTourism

100
0(year)

Source: Chubu Economy Highlights 2015, Chubu Bureau of
Economy, Trade and Industry

18

< Enhancing communication with customers >Branch and ATM networks▼Reinforcing our branch network
Hongo branch relocated and opened in new
本郷支店・本郷ローンサービスセンター
building
on October 17, 2016

▼No. of our ATMs in Gifu and Aichi Prefectures(Units)
Gifu
700

Aichi

647

655

151

172

181

475

474

475

474

FY3/14 1H

FY3/15 1H

FY3/16 1H

FY3/17 1H

621

625

146

600
500
400
300
200
100
0

– Creating a branch network tailored to local needs –Takayama branch/Takayama Ekimae branch

Okazaki Hane branch primarily
aimed at individual customers
Nagoya Sakae subway station
ATM cornerMeitetsu Higashi
Okazaki Sta.
ATM corner19

< Individual customer strategy >Open branches on holidays: “Holiday Juroku”< Enhancing communication with customers >▼High-quality Holiday Juroku services will be available toindividual customers across all our branches
Open Saturdays, Sundays
and public holidays!

Holiday Juroku Masaki
Convenient
shopping malllocation!

Located in a large shopping mallin Gifu
Holiday Juroku
Masaki (Masaki
Branch, 1F MASA 21)

Holiday Juroku target
customers

From Sat,
Nov 5,
2016

Holiday Juroku
Ginan(Ginan branch)

From aroundautumn 2017
(plan)

Roadsidelocation ideal
for customers
in cars!

 People unable to visit
branches on weekdays
 People who want more timefor financial advice

Conveniently
located in frontof the terminal
station!

Holiday Juroku
Nagoya Ekimae
JR Nagoya Station is thelargest terminal station in thethree Tokai prefectures
Nagoya Ekimae branch islocated in the Dai Nagoya
Building

Holiday Juroku Nagoya
Ekimae (Nagoya Ekimae
Branch, 4F Dai Nagoya
Building)

From Sat,Oct 15,2016

Average daily number of visitors
per branch: 18 groups (as ofNovember 13, 2016)< Branch visit booking service >1st for aregional bankin 3 Tokai
pref!

Free online booking service
available all year round!
< Services > Available at 54 branches!

Inheritance advice

Asset management
adviceLoan advice

Banking admin
procedures
20

< Individual customer strategy >Using Fintech to eliminate need for passbooks, cash,
personal seals and cash cards▼Ending use of physical passbooks

Started August
2016▼Ending use of personal seals

Targeting launch
in 2017

Personal seals
not required< Smartphone passbooks >New smartphone app allows users to check deposits,
withdrawals and balances!
Users can choose own passbook cover design!

▼Cashless transactions

Rolled out from
July 2016

Users can debit cash from accounts immediately
using smartphone and web-based apps

Users will be able to set up online banking and bankaccounts on the internet without the need for
personal seals!

▼Ending use of cash cards
Smartphone held up
スマホをＡＴＭにかざす
to ATM

Cash
現金受け取りdispensed
1 0 ,0 0 0Partners

10,000< Prior registration【事前登録】
required>
アプリを起動し支払金額
Activate
app and input
をあらかじめ入力
cash
amountOnline and in-store payments!
Transfers between users also possible!

ＡＴＭ

Targeting launch
in 2018<【カードレス】
No cash card needed >Smartphoneused instead
スマホをキャッシュカード
ofcash card to access
代わりにして支払取引
cash

Users can withdraw cash simply by holding up theirsmartphone to the ATM; cash cards not needed!
21

< Individual customer strategy >Enhancing unsecured loan services with launch of
online loan approval service
Virtual, low-cost channel increasingly important in high-margin unsecured loan business▼Q-loans

Two products now approved online
Started May
2016

Easy General Purpose Loans

Started
October 2016

Q-loans

Online loan
approvals!

No branch
visits(Billion yen)
7.5

14.09%

7.2
7.0

You can apply for a loan
any time 24/7!

Clear pickup
in growthrecently

Average interest rate

I've no timeto go to the
bank!

6.8
6.4

6.5

6.5

6.2
6.0

Use this service while commuting, on weekends, or during any other spare moment!

5.5

FY3/15 1H▼Unsecured term loan book
(Million yen)
1,441

FY3/16

FY3/17 1H

1,600
1,400

2,500

1,200

2,000

901

2,324
1,000

737

800

Strong demand for loan
products with online
application and online approval
options driving growth!

600

1,000
1,287
500

FY3/16 1H(No. of loans)

3,000

1,500

FY3/15

400

995

200

0

0

FY3/15 1H

FY3/16 1H
Value of loans issued
No. of loans

FY3/17 1H

Reinforce virtualchannel forloan products22

< Business client strategy >Enhancing comprehensive banking services with
better business client solutions▼M&A fees(Million yen)
250

Fees booked in FY3/17 1H well
above recent full-year levels

On track forrecord fee
revenue inFY3/17!

(Million yen)
70

62
60

193

200

▼Business matching fees
High level in FY3/17 1Heven after excluding special
factors in FY3/15
47
47

50
150

37

40

31
30

100
67
50

26
19

20
12

36

32

10
12

6

4

0

0
FY3/141H

FY3/14

FY3/151H

FY3/15

FY3/161H

FY3/16

FY3/171H

FY3/141H

FY3/14

FY3/151H

FY3/15

FY3/161H

FY3/16

FY3/17
1H▼Supplier search service proving popular
Recent major buyers
Achievements

Meeting success rate 27%(based on requests for quotes)!
High success rate in business matching gives
Juroku Bank advantage over competitors

Supplier companies
Juroku
Bank

Entry

Buyer
companies

Negotiation between supplierand aircraft engine maker Total no. of business discussions

SellerRequest for meeting

Buyer

Aircraft engine maker, University hospital,
Aircraft equipment maker, Traditional
Japanese inn, Leading sports goods
retailer etc.

Supplier companies
Supplier companies
FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17(1H)

23

< Business client strategy >Overseas operations▼Strengthening our presence in ASEAN< ASEAN countries >Providing full support for business clients moving
into overseas markets< Hong Kong Food Expo 2016: Helping clients secureoverseas sales channels >Overseas offices
Partner financial institutions
Trainee locations Country Responsible for
Surrounding Area
Laos

Shanghai Representative
OfficeVietnam

1st for aregional bankin 3 Tokai
pref!

MyanmarThailandHong Kong
Representative
Bangkok
OfficeRepresentative OfficeCambodia

Juroku Bank secured exhibition booths and provided support for exhibitors atHong Kong Food Expo, one of Asia's largest food exhibitions – a first for aregional bank in the three Tokai prefectures. Client support officers from bankbranches wore matching happi coats and helped exhibitors' PR efforts,
including handing out English language pamphlets and attracting visitors tobooths, getting hands-on experience in overseas sales channel development.
Demand for overseas sales channel development is growing. To address thoseneeds, we plan to offer comprehensive support, such as training personnel
who can provide that kind of support.

Philippines< Hong Kong Food Expo 2016 >Ref: Juroku Bank press release, August 12, 2016

Malaysia

India

BruneiIndonesia

Singapore

Our client support officers
traveled with their clients
to Hong Kong, where they
helped to hand out English
PR pamphlets

Singapore
Representative OfficeCountry Responsible for
Surrounding Area

Thailand Plus One! Stepping up support for companies
moving into Vietnam

English PR pamphlets prepared by
Juroku Bank

< Vietnam investment promotion seminar and tour hosted by Juroku Bank >Ref: Juroku Bank press release, August 29,
2016
Ref: Juroku Bank press release, November
7, 2016
Meeting with the People's Committee ofNghe An province

English pamphlet

In November 2015, Gifu Prefecture and Vietnam's Nghe An province signed amemorandum to promote cooperation between their regions. As part of that process,Juroku Bank hosted an investment promotion seminar in August 2016 for companies
interested in moving into the Vietnam market.
We also worked with Gifu Prefecture and other partners to plan and run a Vietnam
investment promotion tour in November 2016. Two of Juroku Bank's client companies
have already set up operations in Nghe An province and another client company has
decided to move into the province.

24< Strengthening the regional economy >Promoting our main financing bank role by providing
support for business startups and IPOs
▼IPO support funding (Juroku Frontier No. 3 Fund)▼Support loans for business startups●Number of loans has risen steadily since a startup
support desk was established in February 2015
(Million yen)(No. of loans)
38

37

400
350

200

351

113

0
FY3/16

Execution amount of loans

10

Two more investments worth ¥40 million
in 1H FY3/17

5*Investees are in the service sector and chemical manufacturing sector

0

Fund invests in promising smallscale businesses

15

198

FY3/17 1H
No. of loans▼Funds to support business startups and new
business plans
Attracting businessstartup for support funds

30
20

100

FY3/16 1H

Until recently, only ¥30 million invested in one projectsince fund was established in December 2013

25

19

150
50

40
35

300
250

Invests in companies aiming for IPOs

New business plan award ceremony

Support for startups and new business creation
is a duty for regional banks, potentially leading to
main financing bank relationships▼First stock market listing in six years for a Juroku
main financing bank client from Gifu Prefecture
Gifu Prefecture landscaping
company lists on stock
market – first IPO by a
Juroku main financing bankclient in six years!
25

< Strengthening the regional economy >Six Star Tourism Project: Promoting tourism acrossa wide area
▼Six regional banks from the Tokai and Hokuriku
regions have teamed up to pursue synergies instimulating tourism markets across their respective
prefectures.

< Press conference >FirstBank ofToyamaHokkokuBank

Juroku
Bank

Fukui
Bank

Bank of
NagoyaHyakugoBank

All partners committed to stimulating tourism!

< Six regional banks sign Six Star Tourism Projectagreement to cooperate on tourism across a wide area >In June 2016, Juroku Bank and five other regional banks in the Tokaiand Hokuriku area – Hokkoku Bank, Fukui Bank, First Bank of Toyama,
Hyakugo Bank and Bank of Nagoya – signed an agreement to use theirextensive regional networks and business skills to identify and focus onareas of regional interest that municipal governments and travel
agencies might neglect.
Ref: Juroku Bank press release, June 13, 2016

 Draw up and promote tourist routes thatconnect prefectures
Concretemeasures Publish and promote a tourist guidebook
for six prefectures
 Develop Six Star Tourism information sites
and apps
 Provide syndicated loan for major tourism
projects

26

< Strengthening the regional economy >Multiple Strategic Alliances
Joyo Bank
Hyakujushi Bank
Nanto Bank
Yamaguchi FG

Bank of Nagoya
Hyakugo Bank

Tie-ups with neighboringbanks in three Tokai
prefectures
 Joint M&A seminars held by threebanks Joint corporate briefing session heldby three banks
 Joint business trade fairs held by
three banks

Regional
financial
institutions
Universities/
researchbodiesCooperation with regional banks
on Chance project (regionalbank integrated services)

Multiple Strategic
Alliances

Cooperation
Municipalities

Deloitte Tohmatsu
Nomura Securities

Tie-ups with firms in othersectors to cultivate venturebusinesses
 Venture business support organization NOBUNAGA21
established Seminars about stimulating the regional economy
 New business plan support fund established First Stage grants established for business entrepreneurs

Business
community Tie-up in IT field, focusing on IT systems
 Regional infrastructure body established, joint
financing Mutual assistance during major natural
disasters
 Chance FinTech Lab established, etc.

Chambers ofcommerce andtrade associations

Mass media

Tono Shinkin BankJapan Agricultural
Cooperative MEGUMINO

Tie-ups with partners inother areas of the financial
sector Tie-up with Tono Shinkin Bank to revitalize local
communities
 Tie-up with Japan Agricultural Cooperative
MEGUMINO to promote local agriculture Supporting the project Gifu: Seiryu no Kuni (TheLand of Clear Water) Food and Agriculture Trade
Fair Personnel exchange, etc.
27

< Business reform measures >Radically overhauling business operations▼Juroku Bank will mark its 140th anniversary in October 2017
Founded as the 16th National Bank in October, 1877
Jinkichi Watanabe,
first president of the bank

Adapt to Japan's
declining population,changing businessconditions

30th anniversary of Juroku Bank

Rebuild business model

140th
anniversary of
Juroku Bank
(October 1, 2017)▼Business reform measures

Business reforms

Branches
Store staff system
working group

Enhance communication
with customers

Centralization of
backoffice operationsat head office

Backoffice operations
working group

Cooperation
between crossdivisional
working groups
Reduce non-personnel
expenses

Public relations
working group

Simplify lending
operations andcentralize at head officeLending operations
working groupUse IT devices

Shift to digital
documents

Paperless working group
Cost reduction working
group

Reduce overtime hours

28

< Enhancing the skills of our personnel >Reinforcing our organization through strategic trainingof new employees, active participation of women▼Major reforms to training system for new employees
1st for aregional bankin 3 Tokai
pref!

Training program extended from
2 weeks to 3 months

 Address increasingly diverse nature of bankwork
 Lift ability and readiness of employees whenassigned to first post Reduce burden on branches and increase
efficiency of branch operations
 Use trial & error approach to help employees
handle stress better▼Targets for participation and progress of female
employees< New employee training >▼Supporting participation of women in
the workplace

Targets and promotion(1) Double the number of women in assistant managers
and higher posts, targeting 174 by end-FY3/21⇒107 as of end-FY3/17 1H (increase of 20 women in
18 months / 23.0% achievement rate)(2) Increase the ratio of women in leader positions andhigher posts to 20% by end-FY3/21⇒14.7% as of end-FY3/17 1H (233 women vs. 1,347
men)* Leader positions include office leaders and FA leaders, in addition toassistant managers and higher posts.

1st for aregional bankin 3 Tokai
pref!

On-site childcare center
opened April 2016

< Reference data >Position

No. ofwomen

Branch manager orbranch manager
equivalent3

Deputy director or
deputy director
equivalent22< As of September 30, 2016 >29

We would like to thank you allfor your attention.