24th Results Briefing
The Juroku Bank, Ltd.

[First half of the year ending
March 2015 (FY3/15 1H)]

Providing Wholehearted Services

Table of Contents

Providing Wholehearted Services

Part 2: The 13th Medium-term Management Plan

Part 1: Overview of results for FY3/15 1H
Overview of results for FY3/15 1H..... 4Main factors behind change in gross banking profit(non-consolidated)..... 5

Outstanding balances for key items (deposits, loans) ..... 6
Outstanding balances for key items (marketable securities)..... 7

Conditions in the Chubu region..... 14

Share of deposits and loans..... 19

Progress with 13th Medium-term Management Plan..... 20

Part 3: Basic Strategies
Seven basic strategies..... 24

Credit-related costs and nonperforming loans..... 8Equity / subordinated financing / dividends..... 9Improve the quality of services by focusing on the customer..... 25

Total value at risk..... 10

Region-specific strategies

FY3/15 earnings forecasts..... 11..... 28

Further promote community-based financial services ..... 31
Reinforce investment capabilities..... 33

Conclusion..... 34

Reference◆ Earnings forecasts and other forward-looking statements in thisdocument are based on management’s assumptions andbeliefs in light of information available at the time of publication. Actual results may different materially from forward-looking
statements due to a wide range of factors.
2

Part 1: Overview of results for FY3/15 1H

Overview of results for FY3/15 1H(Billion yen) ▼Consolidated▼ Consolidated▼Non-consolidated▼Non-consolidated
FY3/141H

FY3/15
1H

ChangeOrdinary income
Extraordinary gains/losses
Total income taxes(*2)
Interim net income

35.0(35.0)
31.2
3.3
0.5
0.0
26.4
14.6
10.5
1.3
-0.5
9.2
(8.5)
0.8
1.7
0.0
1.4
1.0
10.0
-0.0
2.1
7.8

38.0
(35.3)
31.5
3.5
2.9
2.7
26.5
14.5
10.5
1.4
11.5
(8.7)
3.0
0.4
0.6
0.0
1.1
1.6
14.4
-0.0
4.4
9.9

3.0
(0.3)
0.3
0.2
2.4
2.7
0.1
-0.1
0.0
0.1
0.5
2.3
(0.2)
2.2
-1.3
0.6
0.0
-0.3
0.6
4.4
0.0
2.3
2.1

13.0
(10.3)
3.1
0.4
0.8
0.0
1.1
1.6
16.2
0.2
5.0
10.9

<Credit-related costs (1+2-3-4)>

1.1

-0.2

-1.3

-0.4

Gross banking profit(Gross core banking profit)
Net interest income (*1)
Fees and commissions
Other banking profit
Gains/losses on JGBs and othersecurities

Expenses
Personnel expenses
Non-personnel expenses
Taxes
Provision for general loan-loss reserves (1)Net banking profit(Net core banking profit)
Extraordinary gains/losses
Write-downs of nonperforming loans (2)Gain on reversal of loan loss reserves (3)Gain on collection of written-off loans (4)Gains/losses on equities
Other extraordinary gains/losses

FY3/151H

41.2(38.5)
31.5
5.4
4.2
2.7
28.2

 Net banking profit increased ¥2.3 billion YoY on
the back of growth in gross banking profit
 Ordinary income rose ¥4.4 billion YoY, mainlyreflecting an increase in net banking profit and a
decline in write-downs of non-performing loans(*1)* Gross core banking profit= Gross banking profit – gains/losses on JGBs and other securities(balances of five accounts)* Net core banking profit= Net banking profit + provision for general loan-loss reserves –gains/losses on JGBs and other securities (balances of five accounts)

 Gross banking profit rose ¥3.0 billion YoY due toincreases in net interest income and fee andcommission income and an increase in gains on
JGBs and other securities<Breakdown of net interest income (non-consolidated)>(Billion yen)

FY9/13

FY9/14

ChangeNet interest income on yen deposits
and loans

31.2
30.1

31.5
29.7

0.3
-0.4

23.7

22.5

-1.2

(Interest income on yen loans)(26.0)(2.3)(24.6)(2.1)(-1.4)(-0.2)

6.5

7.3

0.8

1.0

1.8

0.8

Net interest income
Domestic operations(Interest payments on yen deposits)
Dividend income from yendenominated marketable securities

International operations(*2)<Factors causing
difference in net income (¥1.0bn)＜連単差＋１０億円の理由＞

between non-consolidated and consolidated results>

・連結子会社の損益影響額- Impact of profits at consolidated subsidiaries- Negative goodwill related to purchase of・子会社株式の追加取得にかかる負ののれん発生益等
additional shares in subsidiaries, etc.

＋６億円+¥0.6bn＋３億円+¥0.3bn

4

Main factors behind change in gross banking profit (nonconsolidated)
Gross banking profit increased ¥3.0bn to ¥38.0bn

Interest¥35.0bn
350

Gains (losses) on
JGBs and other
Other
その他
国債等債券損益
bonds(-¥0.3bn)(+¥2.7bn)
（△3）
（＋27）

(Billion yen)¥38.0bn380

役務取引
Fees andInterest on
commissions
marketable
等利益
有価証券利息(+¥0.2bn)
securities（＋2）(+¥1.5bn)
（＋15）

貸出金利息
on loans(-¥1.3bn)（△13）
Interest on
預金等利息
deposits, etc.
B: +1.2
Ｖ：＋12(+¥0.2bn)
Y: -2.6
（＋2）
Ｒ：△26
Ｖ：△0
B: -0.0
Y: +0.3
Ｒ：＋3

Ｖ：＋8
B: +0.8
Y: +0.6
Ｒ：＋6

B:V：残高要因
Balance factors
Y:R：利回要因
Yield factors

FY3/141H
Ｈ２５／９

FY3/151H
Ｈ２６／９
5

Outstanding balances for key items (deposits, loans)▼Deposits (non-consolidated)▼Deposits by region (non-consolidated)(Billion yen)(Billion yen)

40,0004,000

55,0005,500

35,0003,500

5,000
50,000<Gifu>
No. of branches: 101
No. of loan service centers: 6

45,0004,500
40,0004,000

5,182.0
51,8205,275.5
52,755

3,746.3
37,463

3,677.7
36,7773,503.2
35,03230,0003,000

25,0002,500

20,0002,000

4,848.1
48,481

1,479.5
14,795

1,408.7
14,087

15,0001,500

1,304.3
13,04335,0003,500
1,000
10,000
岐阜県
Gifu

3,000
30,000

H24/91H
FY3/13

H25/91H
FY3/14▼Loans (non-consolidated)

愛知県
Aichi,
Mie
三重県
H24/9

FY3/13 1H

H26/91H
FY3/15

岐阜県
Gifu

愛知県
Aichi,
Mie
三重県
H25/9

FY3/14 1H

岐阜県
Gifu

愛知県
Aichi,
Mie
三重県
H26/9

FY3/15 1H▼Loans by region (non-consolidated)(Billion yen)(Billion yen)
20,0002,000

40,0004,000<Mie>No. of branches: 1

1,722.8
17,2283,000
30,0003,650.1
36,501

3,662.2
36,622

3,796.6
37,966

1,693.3
16,933

1,683.9
16,8393,500
35,000<Aichi>
1,500
No. of branches: 50
15,000No. of loan service centers: 13

1,580.7
15,807

1,542.1
15,421

1,627.5
16,27525,0002,500* No. of branches does notinclude three virtual branches
20,0002,000

FY3/131H
H24/9

FY3/141H
H25/9

FY3/15
H26/91H

1,000
10,000
岐阜県
Gifu

愛知県
Aichi,
Mie
三重県

H24/9

FY3/13 1H

岐阜県
Gifu

愛知県
Aichi,
Mie
三重県

H25/9

FY3/14 1H

岐阜県
Gifu

愛知県
Aichi,
Mie
三重県

H26/9

FY3/15 1H

6Outstanding balances for key items (marketable securities)▼Gains (losses) on valuation of securities (nonconsolidated)▼Marketable securities (non-consolidated)(Billion yen)
（単位：億円）
20,0002,000(Billion yen)
（単位：億円）+¥111.2 billion

2,000
200

11,673.5
6,735
1,500
15,0001,000
10,00011,383.9
3,839
102.0
1,020
80.3
803

+¥21.7 billion

1 1,784.7
7,847
279.6
2,796

181.7
1,817
123.1
1,231

1166.1,661
1144.4
,444

150
1,500

133.9
1,339

398.2
3,982

453.9
4,539

306.2
3,062

23.9
239

22.9
229

569
56.9
1,000
100

48.6
486

665.9
59
317.3
3,173

364.6
3,646

333.3
3,333

500
50

26.8
268
6.0
60

500
5,000
577.8
5,778

605.7
6,057

33.1
331

583.7
5,837
00

FY3/13 1H

H24/9

00
FY3/13
1H
Sep
2012
H24/9

国債JGBs 地方債
Municipal bonds

FY3/14
1H
Sep 2013

H25/9

FY3/15
Sep 1H2014

H26/9

securities
株式 Other
その他の証券

Corporate bonds

社債

85.3
853

72.9
729

Gains (losses) on
株式評価損益valuationof equities

FY3/14 1H

FY3/15 1H

H25/9

Gains (losses) on
債券評価損益valuationof bonds

H26/9

Gains (losses) on other
その他の評価損益
valuations▼Modified duration (non-consolidated)

Equities

FY3/13 1H FY3/14 1H FY3/15 1H▼Gains (losses) on sales of securities and impairment
losses of securities (non-consolidated)

Yen-denominated securities
Foreign currencydenominated securities

4.26

3.88

3.64

2.72

3.73

5.30

(Million yen)

Gains (losses) on equities
Gains (losses) on JGB andother bonds
Total

FY3/13 1H FY3/14 1H FY3/15 1H
-252
1,477
1,124
-570

65

2,745

-822

1,543

3,869

• Marketable securities increased ¥111.2 billion due to efforts
to diversify the investment portfolio and an increase invaluation gains amid buoyant market conditions• The duration for foreign currency-denominated securities
increased, as buying was focused on long-term Eurobonds
7

Credit-related costs and nonperforming loans▼Credit-related costs (non-consolidated)(Billion yen)

Credit-related costs (1+2-3-4)(1) Provision for 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

FY3/131H

FY3/141H

FY3/15
1H

0.1
0.4
0.0
0.2
0.2
0.2
0.0

1.1
-0.5
1.7
1.4
0.0
0.2
0.0

-0.2
0.4
0.1
0.2
0.6
0.0

▼Write-downs of nonperforming loans bysector (non-consolidated)(Billionyen)（単位：億円）
2,000
200

3.89

（単位：％）
3.73

(%)
4.00
4.00

3.03
150
1,500

3.00
3.00
22.2
222

179
17.9
16.2
162

100
1,000

1,084
108.4

1,086
108.6

89.0
890

50
500

(Million yen)
（単位：百万円）

2.00

1.00

FY3/13
1H
H24/9

2,000

1,689

FY3/141H
H25/9
FY3/15
1H
H26/9

1,500
1,044

977

1,000
500

▼Nonperforming loans (Financial Revitalization
Law basis; non-consolidated)

12.7
127

11.7
117

FY3/13
H24/91H

FY3/14
H25/91H

H26/91H
FY3/15単体

Loans
to bankrupt and quasi-bankrupt borrowers
破産更生債権及びこれらに準ずる債権

460
165

143

144
14.4

Loans
requiring monitoring
要管理債権

456

385

00

0.00

危険債権
Doubtful loans
Nonperforming loan ratio
不良債権比率55

0△- 500△- 71△- 113△- 351△- 409△- 52△- 517△- 1,000
Manufacturing
製造業

Construction
建設業

Retail /小売・卸売業
WholesaleRealestate
不動産業

Services /
サービス業
other
その他

• Nonperforming loan ratio was 3.03% as of endFY3/15 1H• Nonperforming loan ratio was 2.81% after partial
direct write-offs
8Equity / subordinated financing / dividends▼Equity (domestic GAAP)▼Subordinated financing

 Equity ratio (non-consolidated) was 10.89% asof end-FY3/15 1H, or 9.07% on a full
implementation basis

 Over three and a half years Juroku Bank
has repaid ¥17 billion in subordinated loansand ¥20 billion in subordinated bonds¥58.0bn億円
580(Billionyen)（単位：億円）Equity ratio
自己資本比率

3,500
350
300
3,000
250
2,500
200
2,000
150
1,500
100
1,000

（単位：％） (%)

バーゼルⅢ
Basel III

10.51

10.47

11.61

10.89

12.00

8.35

8.66

9.07

Equity ratio
自己資本比率(full（完全実施ベース）

9.28

implementationbasis)

8.00

Tier I

2,814

321.1
3,211

294.4

2,944

2,212

80億円
¥8.0bnSubordinated
劣後ﾛｰﾝ
loan:

310
億円
¥31.0bnOct
1 2014: repay¥10.0bn
H26.10.1
劣後ﾛｰﾝ100億円
subordinated loan before due date

期限前弁済

Oct 1 2012: repaid ¥10.0bn subordinated loan
beforedate
H24.10.due
1 劣後ﾛｰﾝ100億円期限前弁済
劣後ﾛｰﾝ
Dec
21 2012:
issued ¥10.0bn in subordinated bonds
H24.12.21
劣後社債100億円発行

2１0億円

Subordinatedloan:

Subordinated
劣後社債
bonds:

300億円¥30.0bn

Subordinated
劣後社債
bonds:

280億円¥28.0bn

MarH24.3.31
31, 2012

SepH24.9.30
30, 2012¥21.0bn
210
億円
Subordinated
劣後ﾛｰﾝ
loan:

¥11.0bn
110億円¥21.0bn

Subordinated
劣後ﾛｰﾝ
loan:

150億円
¥15.0bn

Apr 1,
2011
H23.4.1

4.00¥39.0bn390
億円

H25.4.1Apr
1 2013:劣後ﾛｰﾝ80億円
repaid ¥8.0bn
subordinatedloan before due date
期限前弁済

290億円
¥29.0bnTwo ¥15.0bn tranches of subordinatedH24.3.22、H24.9.18にそれぞれ
bonds
redeemed on Mar 22, 2012 andSep18, 2012 before maturity
劣後社債150億円の期限前償還

6.00

Subordinated
劣後社債
bonds:

Subordinatedbonds:
劣後社債

Subordinatedbonds:
劣後社債

100億円¥10.0bn¥10.0bn
100億円

Mar
31, 2013
H25.3.31

Mar31, 2014
H26.3.31

Sep30, 2014
現在残高¥10.0bn
100億円▼Dividends

3.00
Eliminations

2.00

△-50
500
-50

¥28.0bn
280億円

Subordinated
劣後ﾛｰﾝ
loan:

5.00

自己資本
Equity221.2

Subordinated
劣後ﾛｰﾝ
loan:

9.00

7.00
281.4

¥43.0bn億円
430
Subordinated
劣後ﾛ-ﾝ
loan:
30億円
¥3.0bn

10.00

50
500

00

¥28.0bn
280億円

11.00

Tier II
58.0
580

Sep H24.9.
7 2012: 7
secured¥8.0bn subordinated loan
劣後ﾛｰﾝ80億円調達
Sep H24.9.18
18 2012: assumed¥3.0bn subordinated loan
劣後ﾛｰﾝ30億円承継

Subordinated
loan:
劣後ﾛｰﾝ

-0.7
△7
FY3/14
FY3/13
H25/3
H26/3(non(non(単体) consolidated)(単体)
consolidated)

H26/9
(単体)

FY3/15 1H(nonconsolidated)

H26/9
(連結)

FY3/15 1H(Consolidated) Sustained and stable dividends

1.00
0.00
FY3/14

Annual dividend pershare (¥)

Net income(Million yen)

7.00

12,3539

Total value at risk
 Total value at risk exposure is currently within the parameters of Juroku Bank’s management capacity (allocatable capital)
Integrated
risk management
統合リスク管理(Billion yen)250
2,500億円
General loan loss
一般貸倒引当金87億円
reserves: ¥8.7bn【<Buffer>
バッファー】
Credit risk stress¥5.3bn
信用リスクストレス
5 3 億円Market risk stress
市場リスクストレス
1 6 ¥16.5bn
5 億円
Cross-held shares stress5 2¥5.2bn
政策株式ストレス
億円
Other risks
その他のリスク2 7¥2.7bn
億円
Total計2 9¥29.7bn
7 億円* Assuming
valuation gains are ≥ 0※評価益≧０のとき
Risk exposure= VaR – valuation gain
リ スク量＝ＶａＲ－評価益(minimumvalue ０」is 0)）（ 最小値「Valuation

gains on
政策株式
cross-held
評価益
shares5¥54.6bn
4 6 億円Cross-held
政策株式
shares
ＶａＲVaR

3¥30.0bn
0 0 億円

評価益＜０のとき
Assuming
valuation gains are < 0

Riskリ
exposure= VaR + valuation gains
スク量＝ＶａＲ＋評価損

Reserve forstress2¥23.3bn
3 3 億円スト レス時余力200
2,000億円

Risk exposure to cross-held
評価益が政策株式ＶａＲを上shares is zero, as valuation
回っており、リスク量はゼロ
gains exceed VaR

未配分資本 186億円
Unallocatedcapital: ¥18.6bn

1¥15.7bn
5 7 億円バッファー¥29.7bn
297億円
Buffer:2 5 2 億円
¥25.2bn1¥13.0bn
3 0 億円¥20.0bn
2 0 0 億円
150
1,500億円

100
1,000億円

Core
コア資本
capital
2 ,4 5 3 億円
¥245.3bn

Allocatable
capital(Core capital Generalloan
配分可能資本（コ アreserves)
資本-一般
loss

¥136.8bn

貸倒引当金）¥236.6bn
2 ,3 6 6 億円

1 ,3 6 8 億円

¥120.3bn
1 ,2 0 3 億円

Operationalrisk リスク
オペレーショナル・

Unusedrisk capital:
未利用
リスク資本
¥129.0bn
1 ,2 9 0 億円

Basic
indicator approach (BIA)
バーゼル規制基礎的手法
under the Basel Framework

Cross-heldshare risk
政策投資株式リスク
Holding
period:6ヶ月
6 months
保有期間

信頼水準 level:99%*
Confidence
99%

Marketrisk
市場リスク
Holding
period
保有期間

50
500億円

預貸金 and loan:
6ヶ月
Deposits
6 months
トレーディング
10営業日
10business daysof trading
信頼水準 level: 99%
Confidence
99%¥35.6bn
3 5 6 億円
01¥11.0bn
1 0 億円¥0.0bn0 億円*

Bonds,
shares, 6ヶ月
etc: 6 months
債券・株式等3¥35.0bn
5 0 億円Core capital¥245.3bn
2,453億円(平成26年9月末)(end-Sep
2014)

Allocatable capital
配分可能資本¥236.6bn
2,366億円(end-Sep 2014)(平成26年9月末)

3¥30.2bn
0 2 億円

信用リスク
Credit
risk

保有期間
1年
Holding
period:1 year信頼水準

99%

Confidence level: 99%

コア資本(excluding
application of
measures)（transitional
経過措置の適用なし）＊

1¥18.1bn
8 1 億円Stressscenario
ストレスシナリオ¥213.3bn
2,133億円

Risk capital
リスク資本¥188.3bn
1,883億円

Risk（ 参考）
exposure:
リスク量¥59.3bn(FY(平成26年下期)
3/15 2H)(FY 3/15 2H)(平成26年下期)(平成26年9月）

(Sep
2014)
593億円

10

FY3/15 earnings forecasts (1)(Billion yen)▼Non-consolidated

FY 3/14 FY 3/15
(results) (forecast)Gross banking profit(Gross core banking profit)
Net interest income (*1)
Fees and commissions
Other banking profit

Gains/losses on JGBs and other securities

Expenses
Personnel expenses
Non-personnel expenses
Taxes

Prov ision f or general loan-loss reserv es (1)Net banking profit
Net core banking profit
Extraordinary gains/losses
Write-downs of nonperforming loans (2)Gain on reversal of loan loss reserves (3)Gain on collection of written-off loans (4)Gains/losses on equities
Other extraordinary gains/losses

Ordinary income
Extraordinary gains/losses
Total income taxes
Net income<Credit-related costs (1+2-3-4)>

Change69.5(69.5)
61.8
6.9
0.8

71.4
(69.5)
61.6
7.2
2.6

1.9
0.0
-0.2
0.3
1.8

-0.0

1.9

1.9

51.5
29.0
20.3
2.1
0.4
17.4
(18.0)
0.9
3.0
0.0
2.7
1.2
18.4
0.2
6.3
12.3

52.1
28.9
20.7
2.5
-1.3
20.6
(17.4)
-0.6
3.7
0.0
0.9
2.2
20.0
-0.1
6.4
13.5

0.6
-0.1
0.4
0.4
-1.7
3.2
-0.6
-1.5
0.7
0.0
-1.8
1.0
1.6
-0.3
0.1
1.2

3.5

2.4

-1.1

▼ Consolidated

FY 3/15(f orecast)(*1)<Breakdown of net interest income (non-consolidated)>(Billion yen)

FY3/14
FY3/15(results) (forecast)
Net interest income
Domestic operations

Net interest income on yen deposits
and loans

61.8
59.5

61.6
57.9

-0.2
-1.6

47.1

44.9

-2.2

(Interest income on yen loans)(51.4)(4.2)(48.9)(4.0)(-2.5)(-0.2)

12.6

13.1

0.5

2.2

3.6

1.4

(Interest payments on yen deposits)
Dividend income from yendenominated marketable securities

23.6

23.0
14.5
2.7

The Bank has revised its earnings forecasts for
FY3/15. Details are on the following page.

ChangeInternational operations

 We forecast net banking profit will rise ¥3.2 billion YoY
due to an increase in fees and commissions, a decline inprovisions for general loan-loss reserves and anincrease in gains on JGBs and other securities Despite a projected increase in write-downs of nonperforming loans, we forecast ordinary income willgrow ¥1.6 billion YoY due to growth in net banking profit
 We forecast net income will increase ¥1.2 billion on
growth in ordinary income* Gross core banking profit= Gross banking profit – gains/losses on JGBs and othersecurities (balances of five accounts)* Net core banking profit= Net banking profit + provision for general loan-loss
reserves – gains/losses on JGBs and other securities (balances of five accounts)11

FY3/15 earnings forecasts (2)▼Earnings forecast revisions (announced February 26, 2015)○Revisions to consolidated full-year FY3/15 forecasts○Revisions to non-consolidated full-year FY3/15 forecasts(Million yen)

(Million yen)
Ordinary revenue Ordinary income

Ordinary revenue Ordinary income

Net income

Net income

Previous forecasts (A)111,500

23,00014,500Previous forecasts (A)87,70020,00013,500

New forecasts (B)126,000

36,50021,500

New forecasts (B)102,200

33,50020,500Change (B – A)

14,50013,5007,000

Change (B – A)

14,50013,500

7,000

13.0

58.7

48.3

Change (%)

16.5

67.5

51.9

Change (%)(Reasons) The upward revisions to our earnings forecasts mainly reflect stronger-than-expected income frommarketable securities due to the trading of marketable securities in response to market conditions.

▼Purchase and retirement of Class 1 preferred shares (announced February 26 and March 10, 2015)
 Type of shares purchased and retired: 20,000,000 Class 1 preferred shares Total cost of purchase: ¥20,090,000,000
 Purchase and retirement date: March 10, 2015
(Reasons) The Class 1 preferred shares were issued to the Bank of Tokyo-Mitsubishi UFJ as part of the merger
with Gifu Bank in September 2012. Given the risk of dilution related to these dilutive shares, the Bank had
considered redeeming all the preferred shares. However, due to prospects for a significant increase in retained
earnings from profits booked in the fiscal year, the decision was taken to purchase and retire the shares.
12

Part 2: The 13th Medium-termManagement Plan

Conditions in the Chubu region (1)▼Regional concentration of aerospaceindustry▼Maglev Project
Extensionscheduled toopen in 2045

Nagano

Gifu

Tokyo

Yamanashi

ShinagawaKanagawa
Shin- Kyoto
Osaka

Osaka

Aichi

Nara

Mie

Chubu
regionMinami Alps

NagoyaShiga

Airframe parts
Aircraft and parts

Chubu
regionShizuoka
OtherregionChuo Shinkansen maglev line

Other
regionFirst section scheduled to open in 2027

Source: Gifu Shimbun

Aircraft and parts: aircraft, airframe parts, auxiliary equipment, generators, other
Airframe parts: airframe parts only

Economic Impact: Reach of Economic Benefit
Opening of
Nagoya sectionHigh
impactTotal benefit

Opening of
Osaka sectionLow
impactSource: “Current Survey of Production Statistics for the Chubu Region,” Chubu
Bureau of Economy, Trade and Industry“Current Survey of Production” (February 2014), Ministry of Economy, Tradeand Industry

Total benefitHighimpact¥10.7 trillion¥16.8 trillion

Source: Special Zone to Create Asia No.1 Aerospace
Industrial Cluster website

Low
impactNagoyaNagoyaShinagawa

Regional concentration of Japan’s
aerospace industry (2013)

ShinagawaShin-Osaka* Projected economic benefit over 50 years, assuming line opens in 2025
* Estimates take into account impacts of declining population andtechnological progress

Source: “Policy Research: Expectations for the Coming Maglev Era,” Mitsubishi
UFJ Research & Consulting

 Construction plans for the Chuo Shinkansen
maglev line targeting a completion date of 2027
have been approved by the government⇒ Significant economic benefits projected for
Aichi and Gifu prefectures
 Official roll out ceremony held for Mitsubishi
Regional Jet (MRJ)⇒ Japanese aerospace industry to concentrate
more activity in Chubu region amid risingdemand for regional jets
14

Conditions in the Chubu region (2)▼Progress with Tokai-Kanjo Expressway project(Mino Seki junction – Seki Hiromi(Yoro junction(Ogaki Nishi interchange –interchange)– Yoro interchange)
Yoro junction)
Scheduled to open in FY17 Opened September 15, 2012 Opened April 18, 2009
Approx. 2.9 km
Approx. 3.3 km
Approx. 6 km

(Toyota Higashi junction – Mino Sekijunction)
Opened March 19, 2005
Approx. 73 km<How the expressway project is
attracting business>
March 2012: Amazon JapanOne of Japan’s largest logistics centers sited in Tajimi

Gifu Pre.

April 2012: Toyota Boshoku
Work started on a new vehicle test course in Tajimi

July 2013: Toyota Motor
Official opening ceremony for mechanic training
facility and vehicle test course in Tajimi
Aich Pre.

July 2014: Mizkan GroupNew plant completed in Minokamo

Mie Pre.

January 2015 (planned): Senshukai
Land acquired in Minokamo for the construction ofa logistics center

Already open (Tokai-Kanjo)
Under construction(Tokai-Kanjo)

Toll roadToll road (under construction)

National highway (UNREADABLE)* Names in brackets are provisional junction andinterchange names

Source: Based on Chubu Regional Development Bureau website⇒Significant potential to energize
existing companies in the area andattract new companies and tourists
to the region⇒Projected ¥480 billion boost to
industrial output in Gifu Prefecture15

Conditions in the Chubu region (3)▼Business cluster in the three
Tokai prefectures (example)

Kawasaki Heavy Industries, Ltd. Gifu Plant<Kakamigahara, Gifu Prefecture>

Gifu
Prefecture

Mitsubishi Heavy Industries, Ltd.
Nagoya Guidance & Propulsion Systems Works<Komaki, Aichi Prefecture>
Prefectural Nagoya Airport zone

Toyota Motor Corporation Head Office and Plant<Toyota, Aichi Prefecture>
Honda Motor Co., Ltd.
Suzuka Plant<Suzuka, Mie Prefecture>

Mitsubishi Heavy Industries, Ltd.
Iwatsuka / Oe / Tobishima plant zone
Kawasaki Heavy Industries, Ltd.
Nagoya Works 1 and Works 2 zone
Mitsubishi Aircraft Corporation
Head Office<Nagoya, Aichi Prefecture>

Aichi
Prefecture

Mie
Prefecture
Centrair / Chubu Rinku zone

Special Zone to Create Asia No.1 Aerospace Industrial Cluster – certifications
Aichi Prefecture

Areas

35

Gifu Prefecture

Local
Companies/
government
groupsagencies

71

30

Areas

19

Mie / Nagano / Shizuoka prefectures

Local
Companies/
government
groupsagencies

52

19

Areas

13

Local
Companies/
government
groupsagencies

55

16

Total

Areas

67

Local
Companies/
government
groupsagencies

178

65

16

Conditions in the Chubu region (4)▼Tourism(Million visitors)(Billion yen)

Number of Tourists (actual) <Gifu Prefecture>

Spending by Tourists <Gifu Prefecture>

40

280

39

260

38

240

37
36
35

220
2011

2012

2013

200

2011

2012

2013

<Seven Bank ATM installed in Takayama Ekimae branch>Improves convenience for overseas visitors⇒Energize local economy
Accepts ten types of overseas bank cards,
including VISA and Union Pay
Services available in English / Chinese / Korean /Portuguese⇒ Number of visitors and spending by visitors on therise in Gifu Prefecture, partly due to the success of
the Shoryudo Project**A project launched by
the Chubu District
Transport Bureau,
Hokuriku-Shinestu
District Transport
Bureau and theCentral Japan
Tourism Promotion
Association to raisethe visibility of the
Chubu region

Received a prizein the 6th Japan
Tourism Agency
Commissioner’sAwards(ATM corner Juroku Bank Takayama Ekimae branch)⇒More details on next slide

17Conditions in the Chubu region (4)(Additional information)▼Initiatives at the Takayama Ekimae Branch<Outside view of Juroku Bank Takayama Ekimae Branch><ATM corner>(Information pamphlet)(Enlarged view)18

Share of deposits and loans
預金シェア
Share
of deposits▼Gifu Prefecture(FY3/14)15.8

貸出金シェアShare of loans

(%)

4.7

2 2 .017.5

15.5

Juroku
当行 Bank

Eightother regional banks
他の地方銀行(8行)

Shinkin
banks
信用金庫

JA
農協

Megabanks, etc.
メガバンク等Japan Post Bank
ゆうちょ銀行

Shareof deposits
預金シェア

Juroku
当行 Bank

Eight other regional banks
他の地方銀行(8行)Megabanks, etc.
メガバンク等

Shinkin
banks
信用金庫

JA
農協

Other
その他

Share
of loans
貸出金シェア

(%)

(%)

2.1
15.1

2.2

20.6

3.6

Other
その他

▼Aichi Prefecture(FY3/14)

28.1

29.8

4.4

20.1

7.6

10.3

(%)

5.9
5.6

15.3

11.3

4.1
31.2

27.2

32.1
21.9

26.0
Juroku
当行 Bank

Otherregional banks
他の地方銀行

Megabanks,etc.
メガバンク等

JA
農協

Japan
Post Bank
ゆうちょ銀行

Other
その他

Shinkinbanks
信用金庫

Source: Juroku Bank, based on “Financial Map,” Japan Financial News

Juroku Bank
当行

Other
regional banks
他の地方銀行

Megabanks,etc.
メガバンク等

Shinkin banks
信用金庫

JA
農協

Other
その他

19

Progress with 13th Medium-term Management Plan (1)Name:

13th Medium-term Management Plan
All For Your Smile – Providing Wholehearted Services

Period:April 2014 – March 2017 (three years)

Vision:Aim to become a truly dependable regional financial institution with the ability togrow continually

Key themes:

Reform our awareness and actions to ensure an uncompromising focus on thecustomer
Return to our roots as a regional financial institution
Implement a growth strategy focused on our Aichi Prefecture Strategy

20

Progress with 13th Medium-term Management Plan (2)▼Numerical targets
Start of plan(end-FY3/14)

Targets

Growthpotential(customerbase)

Earnings
capability

Final fiscal year

Deposit balance¥5,155.4bn¥5,275.5bn¥5,600.0bn

Number of retailborrowers

97,78099,293100,000 or more

Net income¥12.3bn¥9.9bn¥10.0bn

8.66％

9.07％

8.8% or more

0.09％

- 0.01％Less than 0.2%

Core capital ratio
Financialsoundness

Results(end-FY3/15 1H)(full implementation basis)

Ratio of credit
cost to total loans■ Number of retail borrowers =SME borrowers (including proprietors) + Number of housing loans and apartment
loans (based on the Bank’s standards)
Core capital (before transitional arrangement)■ Core capital ratio ＝(full implementation basis)
Risk assets (before transitional arrangement)■ Ratio of credit cost to total loans ＝Credit cost
Average loan balance

Solid start toward 13th Mediumterm Management Plan targets
21

Progress with 13th Medium-term Management Plan (3)▼Performance vs. targets
KPI
numberKPI

Recent performance
Unit

FY3/14 1H
3,565.5

FY3/15 1H
Plan

FY3/14 2H

FY3/17 2H

ActualAchievement

Plan

3,681.0

3,740.0

○

1.266

1.235

△

72,90073,972○

3,939.8(full year) 3,924.9
1.148(full year) 1.158
77,840

1

Average loan balance¥bn2

Gross loan-deposit spread%

3Home and apartment loans

No.

3,637.2
Actual(full year) 3,601.3
1.316
1.364
Actual(full year)1.340
71,081
72,469 ActualNo.

64,24868,701 Actual

74,00072,454△140,000

No.

25,50725,311 Actual

25,25025,321○25,500No.

734 Actual

40

47

○

70

¥bn

1.5

1.2
Actual(full year) 2.7

1.7

3.8

○

0.7
(full year) 1.8

No.

12

8 Actual

12

12

○

15

10.5

9.8
Actual(full year) 20.4

10.6

10.5

○

Rate ofreduction 1.3%
(143)

144

△

4
5
6
7
8

Internet banking contracts(individuals)
Loans to SMEs (including private
concerns)
Overseas financing service deals
Gains / losses on marketablesecurities
Number of cases of positive customer
support9

Non-personnel expenses

¥bn

10

Rate of reduction in management
division staffing levels%

145

No. ofstaff

10.2(full year) 21.0
Rate of reduction
5.5%
(137)

Clear KPI targets set for each division to ensure steady implementation of Medium-term Management
Plan⇒Targets set every six months and progress versus targets to be reviewed on a regular basis
22

Part 3: Basic Strategies

Seven basic strategies

I

Improve the quality of services by focusing on the customer

PICK UP⇒ P. 25-

II

Implement our region-specific strategies

PICK UP⇒ P. 28-

III

Further promote community-based financial services

PICK UP⇒ P. 31-

IV

Reinforce investment capabilities

PICK UP⇒ P. 33-

V

Optimize the allocation of business resources

VI

Utilize and develop human resourcesVII

Reinforce the bank’s financial position and adopt a more advanced business stance24

<Basic strategy I>

Improve the quality of services by focusing on the customer (1)▼More loan service centers to open on holidays
Name of LSC

Weekday
Mon

Tue

Wed

Gifu Ekimae sub-branch

Holiday
Thr

Fri

Sat

Sun

Hongo branch

Holiday

Gifu

○

○

○

○

○

○

○

○

Kakamigahara

○

○

×

○

○

○

○

○

Oogaki

○

○

○

○

○

×

○

×

Kani

○

○

○

○

○

×

○

×

Tajimi

○

○

○

○

○

×

○

×

Takayama

○

○

○

○

○

×

○

×

Ichinomiya

○

○

○

○

○

×

○

×

Kasugai

○

○

○

○

○

×

○

×

Nagoya

○

○

○

○

○

○

○

×

Kanayama

○

○

○

○

○

○

○

×

Hirabari

○

○

○

○

○

×

○

×

Fujigaoka

○

○

○

○

○

×

○

×

Midori

○

○

○

○

○

×

○

×

Moriyama

○

○

○

○

○

×

○

×

Toyota

○

○

×

○

○

○

○

○

Okazaki

○

○

○

○

○

×

○

○

Aichi Minami

○

○

○

○

○

×

○

×

Toyohashi

○

○

○

○

○

×

○

×

Handa

○

○

○

○

○

×

○

×

＋

▼Longer opening hours at strategic branches

Strengthen back-up support- Increase convenience for home loan customers- Aim to reduce time needed for loan screening
process (same-day response)

Longer opening hours
from April 1

9:00 – 19:00
on weekdays

Longer opening hours
from April 1

9:00–19:00

Hongo Station 27th busiest of
the 87-station Nagoya Municipal
Subway network (based on
average daily passenger
numbers)
Source: Nagoya Statistical Year
Book (FY2012)

Taking a range of steps to increase contact
with customers in physical channels
25

<Basic strategy I>

Improve the quality of services by focusing on the customer (2)▼Business reforms with a focus on the customer: Utilizing customer complaints and feedback Led by the Customer Service Division, we will actively utilize customer feedback
received by branches to improve our services
Customerfeedback

Meeting to share opinions about service
improvements“Please extend ATM operating hours”“I would like to view my J-Point Style point balance on ATMs”

 Steps taken to extend ATM hours⇒ Now available until 11 p.m.

No. of requests for
improvements: 118

 More information
available via ATM
interface (planned)

Resolved: 46(As of end-September 2014)

J-Point Style
Users can checkpoint balance26

<Basic strategy I>

Improve the quality of services by focusing on the customer (3)▼Expanding services in virtual channels
 Improvements to internet banking(upgrading services, etc.)
Screenshot ofsmartphonebanking app(example) Actively using NISA and other schemes
 Enhancing consulting services for asset inheritance Promoting comprehensive financial relationships
with asset builders

Your registered email address

Using LPCs

Banking Services

Balance Summary

Services
upgraded in
November
2014▼Reinforcing the Retail Division

Yen Time Deposit

32,000 NISA accounts opened
with Juroku Bank – highest
number in the Tokai region

 Life plan consultants (LPCs) offer comprehensive
financial services to customers who sign homeloan contracts, aiming to boost profits from lifelong customer relationships.
Fee and commission income

Transaction History

Transfers

Foreign Currency
Time Deposit(Billion yen)
60
6.0

(%)

9.15

Change password /Register / change email

9.62

10.13

12.00
10.00

4.0
40

8.00

30
3.0

2.0
20

33
3.3

35
3.5

6.00
4.00
2.00

00

0.00
H24/91H
FY3/13
Fee and commission
役務取引等利益
incomeH25/91H
FY3/14

H26/91H
FY3/15

Ratio of fee and commission income to gross banking profit
役務取引等利益のコア業務粗利益に占める割合

27

<Basic Strategy II>

Region-specific strategies (1)▼Gifu Prefecture strategy: strengthening customer relations
Using our extensive branch network in Gifu Prefecture, we will step up contact with customers and steadilybuild up our existing customer base to ensure Juroku Bank remains the dominant brand in the region.
We also aim to enhance our presence as a main bank for clients by building stronger relationships with
SMEs and other clients through the provision of business support and development services and support
for the local economy.

Main bank strategy for individuals
Using our extensive branch network to strengthen
customer contact in the physical channel＝

Building strong, long-term client relationships

 Expand business relationships with asset builders (targeting
specific occupations) Deepen business relationships with high-net worth individuals(HNWI) and sub-HNWIs Step up consulting services for business inheritance deals
 Reinforce low-cost deposit services (attract automatic salarytransfer, pension and household main bank business)
 Secure new home loans and maintain balance of personal loans

Main bank strategy for corporates
Protecting Juroku Bank’s
dominant brand position in Gifu

 Use senior sales staff with their wealth of experience and strong
contacts to build personal relationships with business clients
 Aim to become the first-call bank for business clients (i.e., thefirst bank that clients turn to) Switch to a value-added sales approach based on cooperation
between branch managers and head office Build stronger links with local government agencies
28

<Basic Strategy II>

Region-specific strategies (2)-1▼Aichi Prefecture strategy: promoting greater localization
Led by the Aichi Marketing Strategy Division, which is under the direct control of managing directors in
Nagoya, we will work to expand earnings in Nagoya and in the Mikawa / Chita area and focus on driving
growth in business lending, personal loans and assets in custody(including deposits) in Aichi Prefecture.

Role of the Aichi Marketing Strategy Division
Operational strategy group
 Plan and formulate initiatives based on
economic conditions and data in Aichi
Prefecture

Growth strategy targeting the large Aichi market<Juroku Bank
Nagoya Building>Retail marketing group
Increase deposits, loan balance andclient base in Aichi＝

 Identify demand for new loans byapproaching more clients Provide investment ideas to HNWIs
 Train personnel for asset management
operations

Corporate marketing group
 Generate profits from the provision ofbusiness solutions
 Develop business with leading companies
outside Juroku Bank’s traditional areas
 Train new staff during the businessacquisition process

Important barometer of customer support in Aichi

29

<Basic Strategy II>

Region-specific strategies (2)-2▼Branch strategy: branch network to enhance convenience for customers
 Opening new branches at a pace of 1–2 each year, mainly in Nagoya and the Mikawa region aim is tocreate a branch network on par with our network in Gifu Prefecture Strengthening our network by focusing on the installation of stand-alone ATMs in priority areas- Opened in Jun 1970

Imaike Branch, Tenpaku
Branch(scheduled to move into
new premises in 2015)

Toyota Branch
Kasugai

NagoyaTokai

Mikawa region

Owariasahi
Nagakute◆

Kariya Branch(To be relocated to a newbuilding in Nov 2014)- Toyota population: 421,000

Nagoya OfficeNisshinTogo
Toyoake◆MiyoshiObu◆ Chiryu
KariyaToyotaTakahamaAnjo

Okazaki◆

Handa
Taketoyo

NishioOkazaki Branch (Relocated toa new building in Jun 2014)

Kota

Toyohashi Branch- Opened in Jun 1989
- Toyohashi population: 376,000◆

Toyohashi
30

<Basic strategy III>

Further promote community-based financial services (1)▼Provision of solutions to business clients(1) Reverse Trade Fair Meetings

Supplier companies(sellers)

Juroku Bank
• Set up meetingtime and date• Search forsuppliers that meetbuyer’srequirements

Entry

Request forbusiness
conventions

Target companies:
leading local firms

Display parts they wantto purchase

Buyer companies(buyers)⇒ A unique Juroku Bank scheme based on order needs

Supplier companies(sellers)
Supplier companies(sellers)

Regular meetings held around
twice each month<Results in FY3/15 1H>
No. of business conventions: 16
Total meetings to date: 848(2) Market strategy team(3) M&A

Specialist personnel are assigned to the five mainindustries in the Tokai region – (1) medical(healthcare / welfare), (2) manufacturing (cars /aircraft), (3) agriculture, food and retailing,(4) private education, and (5) renewable energy– to provide comprehensive support

Many companies face business succession issues;by capturing the potential needs of thesecompanies, we aim to ensure local companies
remain viable and help protect jobs, while also
actively pursuing profit opportunities.

The medical sector team was established
17 years ago and now provides advice forroughly 200 projects each year, mainly
related to the opening of new medical clinics<Total no. of projects since 2002>

Advisory contracts: 73
Final contracts: 35(no. of conditional contracts: 25)
31

<Basic strategy III>

Further promote community-based financial services (2)▼ Stepping up support for Japanese companies moving
overseas to tap growth in Asia

(No. of companies)(Index) The number of Tokai-based companies moving overseas is rising –mainly in the auto sector – and the pace of growth exceeds thenational rate Juroku Bank generates growth by setting up business sites anddispatching personnel to the growth markets of Asia
No. of companies(Tokai)Tokai

Nationwide

Source: Tokai Local
Finance Bureau*Growth in no. of companies (Tokai and nationwide) indexed to 2002 (=100)

Juroku overseas support network and services<Japan>Juroku Bank: Global Business
Division<South Korea>SBJ Bank
<China>Bank of Communications, Bank of China,
Industrial and Commercial Bank of China<India>State Bank of India<China>Juroku Bank:
Shanghai Representative Office<Myanmar>Ayeyarwady Bank

<Hong Kong>
Juroku Bank:
Hong Kong Representative Office

No. of overseas business projects
Country
China
Hong Kong
South Korea
India
ThailandIndonesia

Total
Country
515 Vietnam
68 Singapore
25 Malaysia
17 Philippines
209 Myanmar
81 Total

Total

62
25
34
38
8
1,082

(As of end-Sep. 2014)<Philippines>BDO Unibank<Thailand>Two Juroku
Bank employees
based locally Kasikorn
Bank<Vietnam>
BIDV, One Juroku Bank employee
based locally (November)
Australia and New Zealand
Banking Group<Singapore and Thailand>
A representative office will beestablished in each country<Indonesia> One Juroku Bank employee
based locally
Bank Negara Indonesia= Overseas offices=海外拠点= Trainee locations=トレーニー派遣先<Malaysia>
CIMB Bank,CIMB Investment Bank
= Partner financial institutions=業務提携金融機関

ASEAN Regional Conference32

<Basic Strategy IV>

Reinforce investment capabilities▼Actively target new earnings opportunities⇒Expand earnings by offering products such as cross-border loans and by diversifying investments inmarketable securities

Value of cross-border loans issued
Yen-denominated
円貨建
Foreign
外貨建 currency-denominated1,044(Million yen)

Yields on investments in marketable securities

20.0
200

1.99
650

FY14/3 2H
H25/下

Sep
2014
H26/9

 Cross-border loans for clients in Singapore (May 2014)
 Cross-border loans for non-Japanese,
non-resident clients (Jun 2014)
 Cross-border loans for clients in Hong Kong / China(under development)

1.64
1.50

1.14

187
187

1.65

15.0
150

100
10.0
394

(%)
（単位：％）
2.00(Billionyen)（単位：億円）

5.0
50

00

1.08

0.98

1.07
0.98
19

8

0.92
11.11

6.1

6.5

7.3

61

65

73

Sep 2012

Sep 2013

Sep 2014

0.8

1.00

1.9

0.50

H24/9

H25/9

Interest and
利息配当金
dividend income(国内）(Japan)Interest and
利息配当金
dividend income(overseas)(国際)

Yield (overseas)
利回り（国際）

Yield (combined)
利回り（全体）

0.00

H26/9

Yield (Japan)
利回り（国内） The combined yield on marketable securities has risen to
1.07% due to moves to diversify investment, backed up by
appropriate risk management
33

Conclusion▼ Working to put even greater emphasis on
the customer
Address small issues when they emerge

Adjustbehavior

Insight
ChangeImprove customer satisfaction
CustomerConcerns /AdviceProvide services
that exceed
expectations

Workplaces that create knowledge
Workplaces that encourage employees to

Personnel training ⇔ be independent and take the initiative

Real issue

BeliefTeamwork

ActionKnowledge▼Summary

Improve employee satisfaction

 Amid signs that Japan’s financial sector is poised to enter a phase of restructuring, we will pursue
even higher levels of customer satisfaction by returning to our roots as a bank while retaining thevaluable know-how gleaned from our successful merger with Gifu Bank
 We will build a solid customer base for the future by reinforcing trust with our customers in Gifu
Prefecture and by tailoring our business to local needs in Aichi Prefecture34

I would like to thank you all for your attention

Providing Wholehearted Services

35