Prime Market of the Tokyo Stock Exchange︓8359

The 51st Information Meeting
May 18, 2023

＜Inquiries＞
Planning & Coordination Dept. Investor Relations
TEL︓026-224-5512
FAX︓026-226-5077
E-mail︓ irtantou@82bank.co.jp
・This document has been prepared for information purpose only. It should not be construed as an offer or solicitation
to buy or sell any securities.
・This document includes statements concerning future business results. These statements do not guarantee futurebusiness results but contain risks and uncertainties. Please note that future business results may differ from projections
for reasons such as changes in the business environment.
・Information contained herein may be changed or revised without prior notice.
THE HACHIJUNI BANK,LTD. The51st Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Hachijuni Bank’s Profile
Company nameTHE HACHIJUNI BANK, LTD.

Head office

Nagano City, Nagano Prefecture

Date ofestablishment

August 1st, 1931
Domestic 151
in Nagano: 131, outside Nagano: 20

Branch network

Overseas
Branches: 2（Singapore, Hong Kong）

Representative Offices: 2(Shanghai, Bangkok）

No. of employees

3,041（▲26 from FY2021）

Capital stock¥52.2bn

Issued shares

491,103 thousand shares

Total assets¥12,887.4bn（▲¥377.7bn from FY2021)

Net assets¥835.4bn（+¥1.4bn）

Deposits¥8,186.4bn（+¥119.7bn）

Loans¥6,156.1bn（+¥182.0bn）

Total capital ratio（Basel Ⅲ）

Consolidated: 18.36％（▲0.70％）
Non-Consolidated: 16.55％（▲1.07％）

Ratings

S&P Global Ratings︓ AR&I
︓ A+
JCR
︓ AA

THE HACHIJUNI BANK,LTD. The51st Information Meeting2＂From Competition to Co-Creation＂
On January 20, 2023, The Hachijuni Bank, Ltd. and The
Nagano Bank, Ltd. agreed to a business merger plan
through a share exchange and the two banks signed ashare exchange agreement. As per the agreement, The
Nagano Bank, Ltd. became a wholly owned subsidiary of
The Hachijuni Bank, Ltd. on June 1, 2023.
The theme of both banks moving forward is "FromCompetition to Co-Creation,". Cooperation and a spirit ofequality will be the backdrop as the know-how,relationships, and human resources that the two banks
have cultivated to date will unlock better value to ourcustomers, local communities, shareholders, employees,
and others.

As of Mar 31, 2023
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Index3

１．Outline of FY2022 Financial Results・・・・・・・・・・・ 4
２．Status of Medium-Term Management Initiatives ・・・ 24
３．Business Integration・・・・・・・・・・・・・・・ 39

THE HACHIJUNI BANK,LTD. The51st Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

4

１．Outline of FY2022 Financial Results

THE HACHIJUNI BANK,LTD. The51st Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Outline of FY2022 Financial Results◆ Non-Consolidated◆ Consolidated
3/2023

Change

938

915

▲23

684

727

42

164

172

7

20

9

▲11

69

6

▲62

General & administrative
expenses

540

566

25

Credit related expenses

19

42

23

21

87

65

5

▲3

▲8

Ordinary profit

380

348

▲31

Profit attributable toowners of parent

266

241

▲25

Consolidated grossbusiness profit
Profit on interest
Profit on fees &commissions
Trading profit
Profit from otherbusiness transactions

Gains/losses related tostocksGains/losses on money
held in trust

Ratio of consolidated profits toparent company's profits(times)

1.19

1.11

▲0.07

◆ 3/2024 Forecasts (Consolidated)(¥100mn)

3/2023

ChangeGross business profit (A）

817

805

▲12

813

Profit on interest

684

727

43

686

Profit on fees & commissions

99

106

6

103

31

▲30

▲62

16

19

▲46

▲66

-

G&A expenses (C)

508

528

20

536

Actual net business profit (A-C)

309

276

▲32

280

Core net business profit(A-B-C)

289

323

34

280

339

369

29

-

▲19

9

28

4

328

266

▲61

275

21

86

64

33

5

▲3

▲8

-

Disposal of NPL

39

32

▲7

12

Ordinary profit

313

302

▲11

285

0

0

0

-

3

15

11

-

3

14

11

-

223

215

▲8

200

41

39

▲2

33

19

41

22

17

Profit from other business
transactions
Gains/losses related tobonds (B)Excl. gains/losses on cancellationof investment trusts

Transfer to general reserve forpossible loan losses (D)Net business profit (A-C-D)

Gains/losses related to stocks(E)
Gains/losses on money held in
trust

Extraordinary gains/losses
Gains/losses on disposal of non-current assets
Impairment losses

ProfitOrdinary profit¥33.0bn

Profit/losses related to securities（B+E）

Profit attributable to owners of parent¥23.0bn

Credit related expenses

THE HACHIJUNI BANK,LTD. The51st Information Meeting

3/20243/2022

Temporaryprofit/losses

3/2022(¥100mn)5

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

Plan

All Rights Reserved.

Review of FY2022 Financial Results

6◆ Non-Consolidated
・ Core net business profit was ¥32.3bn (+¥3.4bn from FY2021) due to an increase in profit oninterest (interest on loans of international operations, interest & dividends on securities)
despite an increase in G&A expenses (personnel expenses, non personnel expenses).
・ Ordinary profit was ¥30.2bn (△¥1.1bn) due to increases in losses on sales of bonds andcredit related expenses despite an increase in gains on sales of stocks.
・ Profit was ¥21.5bn (△¥0.8bn).

◆ Consolidated
・ Ordinary profit was ¥34.8bn (△¥3.1bn) due to decreases in profit of non-consolidated accountand profit of Hachijuni Securities Co., Ltd.
・ Profit attributable to owners of parent was ¥24.1bn (△¥2.5bn).
・ Ratio of consolidated profits to parent company's profits was 1.11 times (cf. 1.19 times of FY2021).

◆ FY2023 (3/2024) Forecasts
・ Non-consolidated ordinary profit will be ¥28.5bn (△¥1.7bn from FY2022), profit will be ¥20.0bn(△¥1.5bn).
・ Consolidated ordinary profit will be ¥33.0bn (△¥1.8bn), profit attributable to owners ofparent will be ¥23.0bn (△¥1.1bn).

THE HACHIJUNI BANK,LTD. The51st Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Gross Business Profit (Non-Consolidated）

7

Gross business profit decreased by ¥1.2bn from FY2021 due to an increase in losses on sales of bonds
despite an increase in profit on interest.

◆ Gross Business Profit
NET

Profit from other 832
business
29
transactions

92
Profit on fees &commissions

Profit oninterest

708

817

805

31

106

99

684

(¥100mn)

813
16
103

727

686

◆ 3/2023 Increase/Decrease Factors
3/2022

3/2023

ChangeProfit on interest

684

727

+43

Profit on fees &commissions

99

106

+6

31

▲30

▲62

(¥100mn)

Profit from otherbusiness transactions(Of which gains/losses
related to bonds)

3/2021（¥100mn）
Profit on interest
Of which gains/losses
on cancellation of
investment trusts

3/2022

3/20233/2024(Plan）

3/2021

3/2022

3/2023

708

684

727

2

▲50

▲45

THE HACHIJUNI BANK,LTD. The51st Information Meeting

(▲46)

(▲66)

See page 8

Profit on Interest

See page 12
Profit on Fees &Commissions

See page 15
Profit/Losses
Related toSecurities◆ 3/2024 Initial plan at the beginning of the fiscal year

Profit from obt

-30

(19)

For reference(¥100mn) Gross business profit: 813 (+8 from 3/2023)
 Profit on interest: 686 (▲41)
Profit on fees & commissions: 103 (▲3)
Profit from obt: 16 (+46)

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Profit on Interest (Non-Consolidated）

8

Profit on interest increased by ¥4.3bn from FY2021 due to increases in interest on loans andinterest & dividends on securities despite an increase in funding costs of international operations.
(¥100mn)◆Profit on Interest

3/2021

3/2022

3/2023

708

684

727

433

419

497

Domestic

406

396

395

International

26

22

101

Interest & dividends
on securities

323

268

365

Domestic

241

182

220

International

81

86

145

Interest on deposits

▲9

▲5

▲28

Domestic

▲3

▲2

▲1

International

▲5

▲3

▲26

Interest payment on
swaps, etc.※

▲41

▲33

▲106

Domestic

▲23

▲19

▲18

International

▲17

▲14

▲88

Profit on interest
Interest on loans※ Interest on interest swaps, interest payables under repurchaseagreements, interest on payables under securities lending transactions,and other interests were included.

THE HACHIJUNI BANK,LTD. The51st Information Meeting◆Yield （％）

3/2021

3/2022

3/2023

Yield on loans

0.77

0.72

0.81

0.75

0.71

0.68

0.81

0.77

0.89

International

1.25

0.88

3.26

Yield on securities

1.15

0.99

1.64

Domestic

1.05

0.81

1.22

International

1.66

1.79

3.37

0.06

0.03

0.15

Domestic

0.02

0.01

0.01

International

0.57

0.31

2.10

Interest margin ofinternational operations

3/2022

3/2023

ChangeInterest margin on loans※

0.57％

1.16％

+0.59pt

Interest margin on
securities※

1.48％

1.27％

▲0.21pt

Domestic
Excl. loans to theJapanese govt.

Funding costs※ Interest margin was the difference between yield and funding cost.

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Major Accounts (Loans/Deposits)9

Average balance of loans and that of deposits both marked new records.



Loans inside and outside Nagano Prefecture increased firmly, and the increasing trend will continue.

(¥100mn)

73,411

56,162

58,11260,921

62,22732,007

33,115

Outside 28,092
Nagano29,440Inside 28,070
Nagano28,671

28,9143/2021

3/2022

3/2023

OutsideNagano5,713

InsideNagano67,69780,96382,235

6,184

6,711

72,152

74,77975,5243/2022

3/20233/2024

77,923
5,770

29,112

3/2024（Plan）

3/2021（Plan）（Plan）

Inc/Dec
ratio(Annual︓％）

3/2021

3/2022

3/20233/20244.83

2.14

All offices

7.88

6.14

3.90

1.57

4.79

8.71

3.46

OutsideNagano

▲2.39

7.82

7.17

8.52

2.14

0.84

0.68

InsideNagano

8.85

6.00

4.20

0.99

Inc/Dec
ratio

3/2021

3/2022

3/20233/2024

All offices

3.39

3.47

OutsideNagano4.78

InsideNagano2.04（Annual︓％）(¥100mn)■Average Balance of Deposits◆Average Balance of Loans

THE HACHIJUNI BANK,LTD. The51st Information Meeting（Plan）

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Main Figures (Business Loans)

10

Business loans increased by ¥219.6bn from FY2021 due to financing support for customers in prolonged COVID19 pandemic and recovery of depressed capital investment demand.

◆ Business Loans by District (Outstanding balance)
31,67732,89333,72535,921 (¥100mn)

Outside20,317
Nagano20,50921,18923,350InsideNagano 11,359

12,383

12,536

12,5703/20203/2021

3/2022

3/2023◆ Business Loans for SMEs※ (Outstanding balance)(¥100mn)

The ratio of SMEs loans to total business loans

46.2%

25,00024,50024,00023,50023,00022,50022,00021,50021,00020,50020,00019,50019,00018,50018,00017,50017,00016,50016,00015,50015,00014,50014,00013,50013,00012,50012,00011,50011,00010,50010,000
9,500
9,000
8,500
8,000
7,500
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

48.9%

48.5%

48.4%

50.0%
48.0%
46.0%

14,63916,087

17,447

16,332

44.0%
42.0%

3/2021

3/2022

3/2023※ SMEs (excl. local public entities)＋self-employed company owner◆ No. of Customers by District（No. of customers)

OutsideNaganoInsideNagano27,606
3,635
23,971

3/2020(Outstanding balance）(¥100mn)

Outbreak of COVID-19 ≪Dec 2019≫

3/20193/2022

3/2023

Change from3/2019Manufacturing

3,542

3,881

3,968

+426(+12.0%)

Agriculture/Forestry

224

238

261

+37(+16.5%)

Fishery

0

1

0

―

Mining/Quarrying/
Gravel collecting

13

10

9

▲4(▲30.7%)

Construction

714

1,002

911

+197(+27.5%)

Electricity/Gas/
Heat supply/Water

9

11

11

+2(+22.2%)

Information &telecommunications

130

160

142

+12(+9.2%)

Transportation/Postal service

279

366

374

+95(+34.0%)

Wholesale/Retail

2,359

2,444

2,359

―

Finance/Insurance

78

54

72

▲6(▲7.6%)

40.0%
38.0%

3/2020◆ Business Loans by Sector in Nagano

28,57728,91629,078

Real estate/Rental& leasing

2,238

2,341

2,401

+163(+7.2%)

3,649

3,646

3,762

Other services

2,062

2,313

2,308

+246(+11.9%)

24,92825,27025,316

Local public entity

6,463

6,027

5,736

▲727(▲11.2%)

Others

45

47

45

―

Total

18,162

18,901

18,602+440(+2.4%)

3/2021

3/2022

THE HACHIJUNI BANK,LTD. The51st Information Meeting

3/2023Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Main Figures (Personal Loans)11Personal loans increased by ¥38.3bn from FY2021, hitting record high.



Housing-related loans increased by ¥40.5bn due to capturing financial demand for condominiums andhome purchases, hitting new record high.

◆ Personal Loans (Outstanding balance)◆ New Increase in Housing-Related Loans(¥100mn)

Other
loans

12,481

12,700785

704

13,339667

13,722645（¥100mn）

New increase

Floating-rate(ratio)Housingrelatedloans

11,695

11,996

12,672

13,07710-year fixed
rate(ratio）

3/20203/2021

3/2022

3/2023

1,194

1,127

1,617

1,330

672

（56.2％）

497（41.6％）

723（64.1％）

382（33.8％）

1,227（75.8％）

354（21.8％）For reference: Migration/Settlement Loans

New increase
3/20203/2021

3/2022

THE HACHIJUNI BANK,LTD. The51st Information Meeting

16

22

1,152

（86.6％）

156（11.7％）（¥100mn）

36

29

3/2023Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Profit on Fees & Commissions（Non-Consolidated）


12Profit on fees & commissions was ¥10.6bn (+¥0.6bn from FY2021) due to increases in consulting-related fees
and insurance agency fees despite a decrease in securities-related fees.

(¥100mn)

Profit on fees &commissions
Fees & commissions

3/2021Full
year

3/2022
Fullyear

3/2023Fullyear

3/2024
Plan

92

99

106

103

175

178

182

◆ Corporate Banking (Major items)※
Syndicated loans, private
placement bonds
Derivatives-related
M&A, consulting-related

1,281〈 Major items
〉

183

1,319

1,098
284
670

806

1,006

3/2021

3/2022

3/2023

74

80

89

―

Exchange business

59

55

51

―

3/2020

Securities-related
business

21

22

17

―

Fees & commissions
payment

9

12

―

1,506

549

◆ Personal Banking (Investment type products)※
Public bonds

2,759Life & non-life
insurance

907

Investment trusts
Financial instrumentsintermediary/introduction〉〈 Major items

82

78

76

79

Fees related to
payment loans

57

57

57

―

369

Exchange business

11

9

6

―

3/2020THE HACHIJUNI BANK,LTD. The51st Information Meeting

2,052

2,122

106
694

8

3,864
1,352

2,636

Deposit/loanbusiness

Agency business(¥1mn)

Foreign currency
deposits

1,149

310

24

2,308

43

2,480

(¥1mn)

2,661
29

637

884

1,074

1,358

1,220

485

355

3/2021

3/2022

581

124

101

31

151
375

3/2023※ Incomes from consulting business in each field were shown in the above figures. Incomesother than “profit on fees & commissions” such as “profit from other business
transactions” were also included.
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Investment-Type Related Income

13◆ Investment Type Products of Personal Banking（Outstanding balance）（Market price, ¥100mn)

Foreign currency 5,036
deposit147

Financial instruments
Intermediary
443

165
124

505

148
81

1,337

intermediary fee

69.2

118 7476(¥100mn)

611

60.3

1,791

1,599

Structured
bonds

1,828

Trust fees

Sales ofinvestment
trustsStocksLife
insurance

2,985

3/202058.3
27.1

Public bonds
Investment
trusts542(Bank + Hachijuni Securities) ※After deduction of the Bank’s

5,688

5,641

5,396

◆ Investment Type Income

3,084

3,046

18.6

6.6

3.9

12.0

9.9

Bank

Bank

Bank

27.5

23.0

24.8

26.6

3/20203/2021

3/2022

3/2023

7.5

3.6

3.5
1.5
9.0

3,057

3/2022

3/2023◆ Investment Trust Accumulation
投信積⽴

3/20203/2021

3/2022

3/2023

No. of accounts

32,78740,701

48,78554,59958,099Tsumitate NISA

10,27816,54923,132

28,822

31,822Monthly installments(¥1mn)

907

1,170

1,478

1,597

1,697

THE HACHIJUNI BANK,LTD. The51st Information Meeting

47.3

3.2
3.7

2.8
3.7

Bank

3/202115.9

9/2023（Plan）◆Offering investment trust accumulation as aneffective means of asset building to manycustomers.
◆The number of accounts of the "Tsumitate
NISA" is one of the highest in Japan, partly due
to the use of the asset accumulation support
plan "Tsumitama."
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

General & Administrative Expenses (Non-Consolidated)14 Personnel expenses increased by ¥1.0bn from FY2021 due to review of treatment by revision of personnel
system.
 Non personnel expenses increased by ¥0.6bn from FY2021 due to increases in system investment andoutsourcing expenses relating to business streamlining despite a decrease in deposit insurance premiums.

◆ G&A Expenses
537
Tax

32

223
Non
personnel
expenses

523
35

216

(¥100mn)

508
33

212

◆ Depreciation and Investment Amounts
3/2022

3/20243/2023528(¥100mn)37

Depreciation

34

34

Investment
amounts(Initial plan: 40)(Initial plan: 47)

・Reconstruction of
branches・Maintenance andrenewal of ATMs

・Introduction of
office365
・New constructionof ZEB branches(3 branches)
・Renewal ofsystems219

Main
investments

43(Plan)

44（Plan︓47)

37・Adaptation ofATMs/equipment
to new banknotes
・Renewal of PC,
etc.

◆ Increase/Decrease Factors(¥100mn)
Personnel 281
expenses

271

261

272

Personnel
expenses
Non personnel
expenses

3/20203/2021

3/2022

THE HACHIJUNI BANK,LTD. The51st Information Meeting

3/2023(Of which deposit
insurance premiums）

3/2022

3/2023

Change

261

272

+10

212

(21)

219

(11)

+6

(△10)

Main factors
・Review of treatment
by revision of
personnel system
・Increased in system
expenses
・Increased in waterand utility expenses
・Decreased in deposit
insurance premiums

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Profit/Losses Related to Securities (Non-Consolidated)

15

Valuation losses related to bonds and that of others (investment trusts, etc.) increased due to rising interest
rates of domestic and overseas, but net G/L after hedge kept the same level as FY2021.

◆ Profit/Losses Related to Securities◆ Valuation Gains/Losses on Securities(¥100mn)

NET 81

64

NET 36

NET 47

86

21
19

▲7
▲ 46※

3/2021
G/L related to stocks
G/L related to bonds
G/L on money held in trust

3/20193/20203/2021

3/2022

3/2023

2,355

2,276

3,900

3,915

4,165

2,266

2,215

3,800

3,405

3,698

Bonds

440

224

120

▲55

▲280

Others

136

148

171

▲32

▲73

Total

2,932

2,649

4,193

3,826

3,811

Valuation G/L on
interest rate
swap with hedge

▲137

▲276

55

255

322

2,795

2,373

4,248

4,081

4,133

Stocks524(¥100mn)

3/2022▲3

3/2023※Gains/losses on cancellation of
investment trusts (▲¥4.9bn) was
included in redemption losses ofbonds.

THE HACHIJUNI BANK,LTD. The51st Information Meeting

Crossshareholdings

ＮＥＴ

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Market Investment (Yen-Denominated Bonds)

16

Total realized P/L was ¥15.0bn by securing gains on sales of asset swaps, etc. and interest income.

◆ Holding Amounts◆ Profit/Losses
Total
realized P/L

65(Outstanding balance, Market price)95

150(¥100mn)

G/L on cancellation of asset swaps, etc.
Gains on sales of bonds
Interest on bonds

Valuation G/Lbefore hedge

123

Valuation G/Lafter hedge

155

Losses on sales of bonds

57

64

17
8

10

72

81

77

▲ 21
▲ 11

▲ 17

▲ 17

▲ 36

Corporatebonds etc.

6,124

Municipal
bonds

3,523

3/2022

THE HACHIJUNI BANK,LTD. The51st Information Meeting

3/2023114▲42(¥100mn)

17,864

16,374

6,576
7,488
3,082

JGBs

3,419

11,811
8,205

▲ 128

3/2021▲290

21,459155

Interest on swaps received/paid▲57

3/2021

3/20225,467

3/2023※The above figures were based on ALM accounting, so they were different
from the figures on Financial Statements.
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Market Investment (Foreign Currency-Denominated Bonds)


17

Total realized P/L was ▲8.2bn as promoting risk reduction of fixed-income bonds to curb future negative
spread risk and valuation losses.

◆ Holding Amounts (Outstanding balance)◆ Profit/Losses
Total
realized P/L

44

9

▲82
(¥100mn)

Valuation G/Lbefore hedge

4

▲127

▲123

Valuation G/Lafter hedge

44

▲41

▲48

107

31
58
▲ 12
▲6
▲4
▲ 22

15
54
▲ 18
▲8
▲ 25
▲8

G/L on cancelation of asset swaps, etc.
Gains on sales of bonds
Interest on swaps received/paidInterest on bonds
Funding costs
Losses on sales of bonds

8

3,890
0

Denominatedin Euro

770
2,970

65

737

3/2022

THE HACHIJUNI BANK,LTD. The51st Information Meeting

2,717
213

▲ 69

Denominatedin USD

3,119
2,232

▲ 195

3/2021
3/2021(¥100mn)

3/20233/20222,504

3/2023※The above figures were based on ALM accounting, so they were different
from the figures on Financial Statements.
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

The Change in Outstanding Balance of Securities


18

Amid the continued uncertainty of the market environment, the Bank aims to secure profits through flexible
trading and promote portfolio restructuring by deepening and expanding diversified investments based on macroand financial trends.
9/2021(Cost basis, ¥100mn)

3/20229/2022

3/2023

Domestic bonds

19,806

17,92015,386

16,663

JGBs

10,366

8,256

6,820

5,703

Municipal bonds

3,177

3,076

2,409

3,417

Public bonds, corporate bonds, etc.

5,694

5,953

5,527

6,783

568

635

630

760

Domestic stocks

1,048

1,016

1,001

985

Domestic investment trusts etc.

2,918

2,315

2,684

2,791

Foreign bonds

3,475

3,098

2,713

2,842

Foreign stocks

55

44

14

12

Foreign investment trusts etc.

307

366

440

351

Total

27,60824,75822,23823,645

Domestic bonds duration (years)

4.28

3.09

3.58

3.79

Beneficiary interest in trust

Bonds

StocksInvestment
trusts etc.

Directions※The above figures were basedon ALM accounting, so they
were different from the figures
on Financial Statements.

＜2H FY2022＞＜1H FY2023 plan＞【Domestic bonds】 Secured gains from sales and purchasesof mainly medium- and short-term bonds.
【Foreign bonds】 Sold fixed-income bonds to reduce risk.

【DB】 When interest rates rise, the balance will be restored.
【FB】 Taking a cautious stance in purchasing fixed-rate bonds and focusing
on spread assets such as floating-rate bonds, while paying attention tocredit trends, in an effort to curb the negative spread in the portfolio.

Secured earnings through flexible trading, mainly ofdomestic stocks.

Securing earnings through flexible trading, focusing on domestic stocks

While reduced risk in interest rate-related investment
trusts, expanded its diversified investments in J-REITs,
equity-related investment trusts, etc.

Expanding diversified investments in J-REITs, exchange-related
investment trusts, and alternative products, while keeping a close eye onmarket conditions.

THE HACHIJUNI BANK,LTD. The51st Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Credit Related Expenses

19◆ No. of Upgrade/Downgrade

Credit related expenses increased by ¥2.2bn fromFY2021 due to some large borrowers’ businessdeterioration.

<General Reserve>

Transfer togeneral reservefor possible
loan losses
Disposal of NPL（More than±¥1.0bn
impact）

▲3

6

0

5

82

86

44

▲19

39

19

12

9

32

41

31

▲ 235

▲ 263

(Forecasts)

4

12

17

0

▲ 130

"Need attention" to"Normal" to "Needattention," downgrade in "Normal," upgrade in"Need attention" category "Need attention" category

3/20219/2021

3/20229/2022

3/2023<Disposal of NPL (Specific Reserve)>
20

15

20

26

53

47

13

20

3/20219/2021

14

17

19

27

29

57

51

16

31
3/202232
35

18

9/2022

3/2023"In danger ofbankruptcy "orlower to "Normal"or "Need attention""Bankrupt/De facto
bankrupt" to "Indanger of bankruptcy"

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

"In danger ofbankruptcy" to"Bankrupt/De
facto bankrupt"

THE HACHIJUNI BANK,LTD. The51st Information Meeting

▲ 151

113

Downgrade

Factors oflarge
borrowers

9

3/2024▲ 133

194

UpgradeCredit related
expenses

3/2020 3/2021 3/2022 3/2023

135

Downgrade◆ Credit Related Expenses(¥100mn)

138

79

UpgradeNo major credit costs are expected in FY2023.

"Normal" or "Needattention" to "Indanger ofbankruptcy" or lower

Non-Performing Loans, Reserve for Loan Losses◆Non-Performing Loans◆ Reserve for Loan Losses(¥100mn)※ Disclosure of loans based on the Financial Revitalization Law

20(¥100mn)
2.00%

1.78%

1401

1201

1.74%

1.71%

NPL ratio

1.41%

1001

782

801

Substandard

assets
601

1,011

1,061

1,074

221

194

254

1.40%

1.20%

196

Generalreserve

475

826

777

639

0.60%

0.40%

201

Bankrupt andquasi-bankrupt
asset

187

177

191

1.00%

231

401

assets

388

352

311

1.60%

0.80%

Doubtful

1

387

1.80%

Specific
reserve119
3/2020

190

174

201

3/2021

3/2022

3/20230.20%

75
3/2020116
3/202161
3/202253
3/20230.00%(¥100mn)

General reserve3/20203/2021

3/2022

3/2023

191

196

177

187

(¥100mn)

3/20203/2021

3/2022

3/2023

Substandard assets

231

254

221

194

Normal

65

64

65

70

Doubtful assets

475

639

777

826

Need attention

67

72

67

61

Bankrupt andquasi-bankrupt assets

75

116

61

53

Special attention

58

59

44

54

Total

782

1,011

1,061

1,074

Specific reserve

119

190

174

201

NPL ratio

1.41%

1.78％

1.74％

1.71％

In danger of bankrupt

77

107

154

185

1.34%

1.64％

1.71％

1.69％

Bankrupt/De facto
bankrupt

41

82

19

15

Total

311

387

352

388

After partial direct
charge-off（※）※ Partial direct charge-off was not executed.
The above figures were disclosed only for reference.
THE HACHIJUNI BANK,LTD. The51st Information Meeting

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Shareholder Returns and the Reduction Plan of Cross-Shareholdings

21

The share buyback of up to ¥10.0bn set in April 2022 was completed as planned.
Numerical targets for reduction was set based on the Bank’s policy of cross-shareholdings in line with the intent of the
Corporate Governance Code.
Reduction target: 20% reduction from 3/2021 (at the start of Medium-Term Management Vision)◆ Shareholder
Returns (¥100mn) 3/2021

3/2022

3/2023

68

78

95

94

Dividend per share(full year）

¥14.0

¥16.0

¥20.0

¥20.0

Interim dividend

¥6.0

¥6.0

¥10.0

¥10.0

Purchase of own
stocks ②

―

―

100

Undecided

Shareholder returns
③＝①＋②

68

78

195

(94)

223

266

241

230

30.6%

29.3%

40.0％

40.9％

30.6％

29.3％

80.9％

(40.9％)

Annual dividends ①

Profit（consolidated）④

Dividend payout
ratio (consolidated)①÷④
Ratio of shareholder
returns (consolidated)③÷④

Topics3/2024◆ Reduction Status of Cross-Shareholdings(Forecasts）※【Definition of cross-shareholdings】
Listed stocks/book value,
excluding deemed holdings

840
788

(¥100mn)

776
672

Reduction target

20% reduction from
3/2021 (▲168)

3/2021 3/2022 3/2023

3/2026◆ Annual dividend per share reached a new record high.
◆ Ratio of shareholder returns of 80.9% is a top level of Japanesebanks.

THE HACHIJUNI BANK,LTD. The51st Information Meeting

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All Rights Reserved.

Outline of the Group Companies

22

Business started in Oct 2022

Hachijuni Link Nagano Co., Ltd.
Regional trading business/electric powerbusiness

Hachijuni Capital Co., Ltd.

Sustainability No. 1 fund: ¥30.0bn(Cumulative total of investments: ¥4.6bn)

Hachijuni Investment Co., Ltd.

Investment business

Fund establishing/management business

Consolidated subsidiaries

Started fund management in Apr 2022
Total asset under management as of the end of FY2022: ¥64.7bn

Hachijuni Securities Co., Ltd.

Hachijuni Asset Management
Co., Ltd.

Trading of securities etc.

Discretionary investment business/investment advisory business, etc.

Hachijuni
Bank
Group

Hachijuni Lease Co., Ltd.
LeasingStarted handling of JCB branded credit card in Jul 2022

Hachijuni Card Co., Ltd.

Hachijuni Auto Lease co. Ltd.
Leasing

Yamabiko Services Co., Ltd.

Credit collection and management

Credit card businessObtained an authorization as an Advanced Banking Service
Company in Jun 2022

Hachijuni Credit Guarantee
Co., Ltd.

Hachijuni Staff Service Co., Ltd.
Dispatching workers/introduction service

Credit guarantee services

Scheduled to be merged into the Bank in Oct 2023

Hachijuni System Development
Co., Ltd.
Development of computer systems

Affiliatedorganizations

The General Incorporated Foundation

The Public Interest Incorporated Foundation

Research & study,
management consultation/training businessResearch & study relating to regional culture

Nagano Economic Research InstituteTHE HACHIJUNI BANK,LTD. The51st Information Meeting

Hachijuni Culture Foundation

Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

Financial Results of the Group Companies
Company name

Investment ratio(the Bank +subsidiaries)

Hachijuni Securities Co.,Ltd.

3/2022 (¥1mn)

23
3/2023 (¥1mn)

Special remarks

Ordinary
profitNet profit

Ordinary
profitNet profit

100.0％

912

655

▲256

▲544

Slower growth in sales of stocks etc. reflecting
sluggish market, suspension of sales of structured
bonds

Hachijuni Lease Co., Ltd.

100.0％

1,046

725

1,096

761

An increase in sales of lease business, a decrease in
expensesHachijuni Card Co., Ltd.

100.0％

244

158

188

130

An increase in settlement services amounts, anincrease in advertising expenses of JCB card

Hachijuni Credit
Guarantee Co., Ltd.

100.0％

2,718

1,790

2,609

1,719

An increase in housing loan guarantee fee income,an increase in allowance for loan losses

Hachijuni System
Development Co., Ltd.

100.0％

202

141

99

66

A decrease in outsourcing fee income

Hachijuni Staff Service
Co., Ltd.

100.0％

22

14

▲9

▲8

Decreases in sales of staff dispatching and inreferral sales

Yamabiko Services Co.,
Ltd.

99.0％

163

96

41

43

A decrease in income of entrusted claims

Hachijuni Auto Lease Co.,Ltd.

100.0％

807

531

947

624

An increase in gain on sale of vehicles, a decreasein credit-related expenses

Hachijuni AssetManagement Co., Ltd.

100.0％

▲38

▲27

47

30

First full-year results: surplus due to trustee fees
for set-up funds

Hachijuni Investment Co.,Ltd

100.0％

14

9

64

42

First full-year results: surplus due to management
fees for managed funds

Hachijuni Link Nagano
Co., Ltd.

100.0%▲3▲3

Expenses of establishment

Hachijuni Capital Co., Ltd.

41.0％

94

73

A decrease in management fee from managed
funds, an increase in personnel expenses

Ratio of consolidated profits to parent company’s
profits (times)
THE HACHIJUNI BANK,LTD. The51st Information Meeting

Establishment in
Oct 2022

171
1.19

129

1.11
Copyright （C） 2023 THE HACHIJUNI BANK,LTD.

All Rights Reserved.

24

２．Status of Medium-Term Management Initiatives

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Status of Medium-Term Management Initiatives

25

Providingcomprehensive
financial services andfunctions

Deepening life
support business・・・P29

・・・P31

Sustainability asa core element ofbusiness management
・・・P26

Digital reform ofbusiness operations
and organization
・・・P34

Medium-Term Management Targets

Personnel system
reform to support
growth and job
satisfaction
・・・P36FY2022 results

Profit attributable to owners of parent

FY2025: ¥25.0bn or more

¥24.1bn

Ratio of consolidated profits to parent
company’s profits

FY2025: 1.25 times or more

1.11 times

Consolidated dividend payout ratio

FY2022〜FY2025: 40% or higher, annually

40.0％

Greenhouse gas (CO2) emissions

FY2023: Net zero
FY2030: 60% reduction compared to FY2013

44.9％ reduction

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Status of Medium-Term Management Initiatives

26

Sustainability as a Core Element of Business Management
Toward Achieving Greenhouse Gas Emissions Reduction Targets
Targets① FY2023: Net zero ／ ② FY2030: 60% reduction compared to FY2013

Reduction plan of GHG emissions (Unit: t-CO2)
14,633

3,004

Scope
１

・Conversion of new stores to ZEB
・Utilization of CO2-free electricity produced in Shinshu
・Conversion of air-conditioning to electric
・Offset by J-Credits

8,810

11,629

Scope
２

2,484
6,326

FY2013①FY2023: Net zero

FY2021⇒To be achieved

2,378

2,600

5,681

3,800

(Preliminary)

FY20226,400

FY2023

5,200

5,000

5,000

2,600

2,600

2,600

2,600

2,400

2,400

FY2024FY2025

FY2030

Toward Achieving Sustainable Finance Targets
TargetFY2021 ~ FY2030 (10 years)

Dedicated products

compared to FY2013⇒ To be achieved
in FY2023

8,060(44.9％ reduction)② 60% reduction

Sustainable Finance: Cumulative total ¥1.5tn
Characteristics

FY2022 results

Sustainability Link Loan

Interest rates and other loan terms fluctuate depending on the achievement of ambitious sustainability
challenge targets consistent with international principles.

¥8.0bnHachijuni Sustainability
No.1 Fund

Support for companies that are creating new businesses and new technologies or facing business succession
challenges as well as capital support for decarbonization¥5.4bnInterest rates fluctuate according to the achievement of goals related to the SDGs set by customers
themselves.

¥7.1bnThe Bank and the Nagano Economic Research Institute analyze the environmental, social, and economic
impact of our customers and help them increase and reduce the identified impact.

¥13.2bn

SDGs Loan
Positive Impact Finance

Sustainable Finance (preliminary): Cumulative total ¥410.9bn from FY2021 to FY2022
THE HACHIJUNI BANK,LTD. The51st Information Meeting

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Status of Medium-Term Management Initiatives

27

Sustainability as a Core Element of Business Management
Expansion of Zero Energy Building Store Network
In FY2022, Fujimi, Omachi, and Fukushima
Branches were Net Zero Energy Buildings.

【Omachi Branch】 A geothermal heatpump system for air conditioning【Fujimi Branch】 Appearance

In addition to reducing energy consumption
by energy-saving equipment, the energy will
be covered by solar power.
A geothermal heat pump system for air
conditioning was adopted by Omachi Branch.

≪GHG (CO2) reduction effect≫
About 55t annually (4 Branches total)※Equivalent to about 18 households≪Current ZEB stores≫ Iwamurada, Fukushima, Omachi, Fujimi Branches

Expanding Adoption of Green Hydropower Produced locally in Nagano
The use of Nagano's "Shinshu Green Electricity", previously powering six
branches, was expanded to include three office buildings at Hachijuni
headquarters in Feb 2023.
"Shinshu Green Electricity" is hydroelectric power from plants operated by
the Nagano Prefectural Enterprise Bureau. The electricity used in thethree headquarters office buildings is now substantially 100% renewableenergy produced in Nagano.
The Bank's overall renewable energy ratio has increased from 5% to 50%.
One of its medium-term management targets, a 60% reduction in CO2emissions in FY2030 (compared to FY2013), is projected to be achievedby the end of FY2023, ahead of schedule.

≪GHG (CO2) reduction effect≫
About 3,000t annually ※ Equivalent to about 1,000 households

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Status of Medium-Term Management Initiatives

28

Local Decarbonization Initiatives
In April, 2023, with the aim of decarbonizing through forest
maintenance in Nagano Prefecture, the Bank partnered with the
Nagano Public Corporation of Forestry (NPCF) and began cooperatingwith the J-Credit Scheme.
Under the scheme, the government officially certifies greenhouse gas
reductions and maintenance of carbon sinks, awarding "J-Credit". The
Bank will continue to partner with local governments and our clients to
identify opportunities to utilize the J-Credit scheme.

Contribution to Local Communities
Supporting SDGs initiatives of local communities through volunteer activities and dedicated products.
OutlineVolunteerDonation

Paper
resource
reduction

FY2022 results

In Jun 2022, rice was planted in terraced rice paddies in
Inakura, Ueda City, and in Obaste, Chikuma City. Rice
harvested through volunteer activities will be donated tovolunteer-run cafeterias for children.

Total 90 participants※The size and frequency ofvolunteer activities was
restricted due to the COVID-19
pandemic

Regional revitalization
support private
placement bonds

A portion of the Bank’s commissions paid by issuers is
discounted. Issuers can donate the discounting amount toschools or SDGs-related organizations.

Amount of bond issues:¥8.8bn/121 cases
Donation: ¥16mn

SDGs foreign currency
time deposits

Donating a portion of foreign exchange commissions to
SDGs-related organizations.

Deposit amount:
USD47mn/282 cases
Donation: ¥2mn

An ordinary deposit account that does not issue passbooks
and allows customers to check transaction details throughinternet banking, resulting in paper reduction.

12,839 cases
Paper resource reduction:
282kg

90th Anniversary
Commemorative
Project:
Terraced rice fieldpreservation activities

Deposit withoutpassbook＜e-livret＞

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Status of Medium-Term Management Initiatives

29

Deepening Life Support BusinessLife Support Services/Real Estate Agent Introduction Services

Life Support Services and Real Estate Agent Introduction Services are services to solve various problems related tocustomers' daily life and real estate. These services will be expanded in the future to further improve convenience.
Results

9/2021

3/20229/2022

3/2023

Life Support Services （※）

No. of cases

9

367

859

995

Real Estate Agent Introduction
Services (for individuals)

No. of cases

33

107

164

126

※Introducing partner companies for garden pruning, housekeeping service, etc.

Enhancement of Inheritance-Related Products and Services
Starting trust services for individuals with the Bank as trustee (money trusts such as testamentary substitution,
testamentary trusts, and estate arrangement services), responding to the asset management needs of our elderly
customers and the inheritance and asset transfer needs to the next generation.
Products/Services
Trustservicesforindividuals
Started in
Oct 2021

Characteristics

Cumulative total
Cases

Relay of hearts

Jointly managed designated money trust with a special clause (with a special clause
for testamentary substitute and bequest and donation)

77

Longevity andpeace of mind

Jointly managed designated money trust with a special clause (with a special clausefor beneficiary's agent)

36

Testamentary
trustsProviding comprehensive support for the preparation, safekeeping of notarized wills
and execution of wills

78

Estate arrangement
services

Handling complicated inheritance procedures such as cancellation and redemption ofdeposits and savings, and name change of real estate on behalf of the heirs

9

Realizing simultaneously "inheritance measures" and rental income by utilizing realestate272

Real estatesmall-lot products※"Trust beneficiary right type" launched in Jan 2019, "Voluntary partnership type" launched in Apr 2022.

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Income¥95mn¥128mnAll Rights Reserved.

30

Status of Medium-Term Management Initiatives

Deepening Life Support Business
Reinforcement of Consulting Functions for Special Needs
Specialized staff at inheritance/insurance plaza respond to the need of every customer.

Insurance
Plaza
Dedicated channel

Aug 2022
open

Inheritance
ConsultingPlaza
Dec 2022
open【Providing quality insurance consulting ~collaboration
with insurance companies~】
Hachijuni Insurance Plaza was established by collaborating withPG Friendly Partners Co., Ltd. This plaza is the first consultingbase in Japan, that is co-operated by a bank and an insurance
agent. Plaza’s staff respond to various insurance needs basedon each customer’s life plan.
≪Aug 2022〜Mar 2023 results≫
No. of consultations: 166 (completed contracts: 99 cases)【Enhancing inheritance and trust services】
Hachijuni Inheritance Consulting Plaza was established as afirst consulting base in Nagano Prefecture. This plaza plays therole of consultation place for inheritance matters of customers
by holding seminars etc.
≪Dec 2022〜Mar 2023 results≫
No. of consultations: 63, Seminar participants: total 45

Smartphone App. "Wallet+""Wallet+" service started in July, 2022 and offers as following functions;・Checking the balance and statements≪No. of cumulative total users as of・Managing monthly income and expenditure
the end of FY2022 ≫ 58,192 cases
・Segregating deposits through a dedicated account・Providing non-financial services such as point services andcoupon distribution for use in the community
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Status of Medium-Term Management Initiatives

31

Providing Comprehensive Financial Services and Functions
Strengthening Consulting Functions
Provided full support to customers affected by the COVID-19 pandemic through the use of subsidies such as "BusinessRestructuring Subsidies," M&A, syndicated loans, and funds. Continuing to provide active support in the post-COVID period.

◆ Supporting Business Restructuring Subsidy (Mar 2021 ~ )1st period

2nd

3rd

4th

5th

6th

7th

8th

Total

No. of application

150

104

139

129

133

75

69

48

847

No. of adoption

68

46

69

67

68

54

42

23

437

Adoption rate

45.3％

44.2％

49.6％

51.9％

51.1％

72.0％

60.8％

47.9％

51.5％

Amount of grant
decision (¥1mn)

1,085

766

650

422

306

127

(Forecasts)

363

4,439

※Fee-charged consulting◆ M＆A

Actively utilizing external networks to meet the businessexpansion and other needs of local companies.
9/2021

3/20229/2022

3/2023

No. of contracts(companies)

4

10

10

17

Income (¥1mn)

55

145

106

203

◆ Business Funds

720(Forecasts)

Achieving one of thehighest numbers ofadoptions among
regional banks inJapan by making a
concerted effort tosupport customers
that are taking new
initiatives in the
midst of the COVID19 pandemic.

◆ Syndicated Loans

Responding to increased demand for funds of the post-COVID such as
capital investment, commitment lines of credit, etc.
9/2021

3/20229/2022

3/2023

Outstanding balance(¥100mn)

9,127

9,279

9,375

9,950

Amount originated by
the Bank (¥100mn)

102

308

533

365

Income (¥1mn)

305

429

556

542

Working to resolve issues faced by customers and local communities through the use of business funds.
Growth support fund investee listed on the Tokyo Stock Exchange Growth Market.

Investment results(Fund amount)

Agriculture

Growth support

Growth support No.2

227
（1,000）

314
（500）

335
（500）

THE HACHIJUNI BANK,LTD. The51st Information Meeting

Reconstruction
support

1,650（4,195）(¥1mn)

Sustainability No.1

Total

4,578
（30,000）

7,106（36,195）

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32

Status of Medium-Term Management Initiatives

Providing Comprehensive Financial Services and Functions
Enhancing Group Functions
The Bank Group works as one to provide a wide range of consulting services related to corporate management.
New

Hachijuni Link
Nagano Co., Ltd.

Oct 2022 Started operations

・Regional trading business︓Support for sales channels development mainly targeting oversea markets≪FY2022 results≫ No. of support customers: 74
・Electric power business︓Generation and supply of renewable energy≪FY2022 results≫ No. of deal information: 45

Hachijuni
Investment Co.,Ltd.

Support by "Hachijuni Sustainability No.1 Fund" (¥30bn)

Hachijuni AssetManagement Co.,Ltd

Apr 2022 Started fund management

Enhancing functions

Hachijuni Staff
Service Co., Ltd.
Hachijuni Card Co.,
Ltd.

Invested mainly in "business succession" projects, an important management issue since establishment.
≪FY2022 results≫ Cumulative total of investments: ¥4.6bn（business succession: ¥4.3bn, venture etc.: ¥0.3bn)

Improved the Group‘s investment performance by strengthening its market management capabilities.
≪Total assets under management as of the end of FY2022≫ ¥64.7bn

Jun 2022 Obtained an authorization as an Advanced Banking Service Company※First obtained an authorization in Japan as a subsidiary engaging in temporary staffing services, etc.
Reinforcing permanent staff dispatching, intermediary services for side and concurrent jobs, and contract work such as
payroll administration. ≪FY2022 results≫ No. of cases: 259, completed contracts: 59

Jul 2022 Started handling JCB brand credit card

Started handling JCB branded credit card following debit card. ≪FY2022 acquisition results≫ 2,476 customers

Hachijuni Lease
Co., Ltd.

Promote leasing that contributes to sustainable financeHachijuni System
Development co.,Ltd.

IT consulting ※Oct 2023 Scheduled to be merged into the Bank

Nagano Economic
Research Institute

Personnel consulting

Promote leasing that contributes to decarbonization by utilizing subsidies etc.
≪FY2022 results of sustainable finance (by utilizing leases)≫ No. of contracts: 959, contract amounts: ¥4.4bn

Support from analysis of the current state of IT utilization to the introduction and establishment of business packages.
≪FY2022 results≫ No. of cases: 35, completed contracts: 10
Support from the design and review of personnel systems to their operation and establishment.
≪FY2022 results≫ No. of cases: 36, completed contracts: 15

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Status of Medium-Term Management Initiatives

33

Providing Comprehensive Financial Services and Functions
Opening of Singapore Branch (Feb 1, 2023)◆ Background of Establishment

In the Asian region, which is experiencing remarkable economic growth,
the Bank has established a Hong Kong Branch, Shanghai Representative
Office, Singapore Representative Office, and Bangkok Representative
Office to support our clients' overseas business expansion. Singapore isthe center of logistics and human flow in Southeast Asia and functions asa financial center in the region.
Continuing to support overseas business development in the ASEAN
region on a long-term and stable basis, the Singapore Branch has been
established through the promotion of the Singapore Representative Office
to the status of a branch. The Singapore Branch will play a pivotal role inproviding coverage and access to a major financial hub as the Hong Kong
Branch is scheduled to be discontinued by the end of FY2023(※).
※ Subject to the approval of the relevant authorities.

◆ Future Development

In addition to supporting the overseas ambitions of Japanesecompanies, investing in and lending to leading Southeast Asiancompanies in Singapore is an opportunity to expand our business byserving as a funding base.
In addition, Hachijuni Link Nagano Co., Ltd will use Singapore as aplatform to support exports of local Nagano products to customers in
the ASEAN region, and leverage our network to gather local information
to support our customers' understanding of the ASEAN market.

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Status of Medium-Term Management Initiatives

34

Digital Reform of Business Operations and Organization
AI-Enabled Data Warehouse
Achieved in-house production of AI models through our DWH, which centrally manages the Bank's data, and DataRobot, aplatform for building AI. Building more than 15 AI models per year by establishing an AI Promotion Team dedicated to data
analysis and AI model creation.
◆DataRobot (Decision-making AI)◆DWH (Data Warehouse)
Introduced in Jan 2020
Operation started in Mar 2019×A large database that centrally manages all data
held by the Bank, including account data and datafrom distributed systems, in a long-term time series.
It is used to analyze customers' transaction histories
and other data for effective sales strategy planning.
In addition, as a joint version of the Judan-kai
system, each Judan-kai bank has already introduced
the same system.

In-house productionof AI model

A machine learning platform that enables data
analysis and future prediction using AI without
advanced expertise. Multiple algorithms areautomatically executed to build highly accurate
machine learning models in a short time. AI
models can be built not only for marketing, butalso for various business domains.

Use Cases and Applications

Expanding the application of AI in areas such as marketing, credit control in the process, new credit screening, and risk
management, providing effectiveness in cultivating potential customer needs and improving the efficiency of internal operations.

ThemesStatus

Product promotion（Marketing）

Nov 2021 ~ present

Predicts and proposes products that match customer needs: 3 to 5 times more effective
than conventional methods

Forecasts of business conditions
changes（Credit control in the process）

Jul 2022 ~ present

Early identification of changes in business conditions of customers and prompt support:
Faster and more sophisticated support for customers

Online lending（New credit screening）

Apr 2023 ~ present

Suspicious transaction
detection（Risk management）

Jan 2023 ~ currently
testing

Creation of an AI screening model that determines risk based on historical account transfer
data: Accelerated responses to examinations and reduced materials through AI
examination
Fraudulent transaction detection model developed by the Bank based on analysis of pastsuspicious transactions: Detects transactions that could not be detected by conventional
methods, preventing the occurrence and expansion of damage

Business streamlining（Generative AI）

Scheduled to be tested
in 1H FY2023

Starting trials with internal bank operations after eliminating the risk of generative AI,
including Chat-GPT: Dramatic improvement in productivity of internal operations

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Outline of implementation

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Status of Medium-Term Management Initiatives

35

Digital Reform of Business Operations and Organization
Electronic Contracting Service
Electronic contracting service was introduced in all stores to promote customer convenience and digitalization ofloan businesses. Now proceeding preparations for acceptance of web-based housing loan application.
E-contracting services

Outline of services≪2H FY2022
results≫

Oct

Nov

Dec

Jan

Feb

Mar

Electronic Contracting Service

No. of contracts

278

436

664

479

560

971

Contract ratio

33.9%

43.6%

51.6%

59.3%

58.7%

57.8%

No. of contracts

122

142

191

189

193

280

Contract ratio

12.8%

15.4%

17.0%

20.6%

21.6%

23.3%

Loan procedures can be completed on the
web using electronic signatures.

Overdraft Borrowing Request
Service

Borrowing application procedures of overdraft
agreement can be completed on the web.

Visit Reservation Service
Aiming to improve customer convenience by reducing waiting times and implementing smooth operations.
≪2H FY2022 results≫

Oct

Nov

Dec

Jan

Feb

Mar

No. of visit
reservation

3,123

3,315

4,768

3,755

4,338

6,307

Percentage of visit
reservation for new
account openings

17.9
％

17.9
％

27.4
％

23.0
％

26.5
％

26.9
％

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36

Status of Medium-Term Management Initiatives

Personnel System Reform to Support Growth and Job Satisfaction
Support for Career Development and Skills Development
Encouraging each staff to improve his or her personal skills and acquire specialized knowledge/skills in order to produce
human resources who embody the image of desired human resources of "establishing strengths," "a progressive spirit,"and "thinking and acting on one's own initiative" and who are needed by customers.
OutlineCareer management
training/career
counseling

Motivating each employee to think about his/her career vision, the implementation of skill
development that necessary to achieve it. In addition to training, Personnel Department staff
conduct career counseling with each employee to support career development.

Out-of-office training

Conducted out-of-office training to acquire a wide range of management skills, field-specificbusiness knowledge, and general business skills to respond to increasingly sophisticated anddiverse customer needs and changes in the environment. A total of 5,319 employees participatedin this training in FY2022.

Voluntary training(Sei-Sei Juku)

In FY2022, a total of 37 courses in business skills, liberal arts, and qualification acquisition support
courses were held, with a total of 2,203 employees participating.

Your Learning

Began offering "Your Learning" (external video content for self-study) free of charge in FY2022. In
the first year, a total of 650 employees took 4 courses.

Support for Acquisition of Official Qualifications
Providing support such as subsidies and incentives of up to ¥500,000 for those who pass public qualifications that are
generally considered difficult to obtain. Eligible qualifications are added every year to promote the acquisition ofexpertise in a wide range of fields.
No. of employeeswith qualification asof the end of FY2022

Small and medium sizedenterprise consultant

FP 1stgrade/CFPFP 2ndgrade/AFP

Securities
analystReal estatetransaction agent

57

129

1,223

55

305

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Status of Medium-Term Management Initiatives

37

Personnel System Reform to Support Growth and Job Satisfaction
Multiple-Track Course System
Multiple-Track Course System was introduced in Jul 2022 to develop high valueadded human resources who can respond to changes in the Bank's businessenvironment and customers' expectations, and to realize the Bank's
transformation into a comprehensive financial service provider.
5 courses - "Professional," "Headquarters Staff," "Standard," and "OTC
Administrative" in addition to the existing "Management" - encourage careerdevelopment that takes advantage of each employee's strengths and aptitudes.

Promoting Participation of Male Employees in Childcare
Setting a target of 100% utilization of childcare leave by male employees, promoting their utilization.
In Oct 2022, revised the Bank’s original leave system for childcare purposes to allow employees totake 10 days of leave at the time of the birth of their spouse or by the end of the month in which thechild reaches the age of two.
In FY2022, 89.5% of male employees took leave for childcare purposes, and the average number ofdays taken was 11.4 days.
Percentage of male
employees taking
childcare leave

FY2018FY2019FY2020

FY2021

FY2022

28.8％

31.9％

35.9％

60.3％

89.5％

Support for Balancing Work and Medical Treatment
Infertility treatment and outpatient cancer treatment have been added to the requirements for taking Special Leavefor Personal Injury or Illness effective in Jan 2023. This Special Paid Leave grants up to 60 days per personal injury orillness when the need for long-term treatment is approved by a doctor. By enhancing the leave system and education
system, the Bank will create an environment where employees can continue to work with peace of mind while
undergoing treatment for injuries and illnesses.
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Status of Medium-Term Management Initiatives

38

Personnel System Reform to Support Growth and Job Satisfaction
Human Capital Situation
Making various efforts to create an organization where every employee can experience growth and satisfaction.

Diversity

Unit

FY2019FY2020

FY2021

FY2022

Person

3,138

3,159

3,067

3,041

Person

1,419

1,461

1,437

1,446

％

45.2

46.2

46.9

47.6

Years

15.1

15.8

16.2

15.8

For male employees

Years

17.8

17.6

18.0

17.5

For female employess

Years

13.5

13.8

14.0

14.1

Percentage of women in management positions

％

9.4

10.8

11.5

12.5

Percentage of women in leadership positions

％

17.4

18.4

18.6

19.8

No. of employees
Of which female employees
Female employees ratio

Average years of employment

Work life balance
Average no. of days of paid leave taken
Percentage of paid leave taken

Unit

FY2019FY2020

FY2021

FY2022

Days

13.3

13.9

14.3

15.9

％

69.4

72.0

74.1

81.5

Health and productivity managenent

Unit

Specific health guidance implementation ratio

％

62.7

49.4

86.4

78.0(※)

Percentage of obese people (BMI: 25 or higher)

％

20.2

20.5

19.8

18.6

Human resource development

Unit

FY2019FY2020FY2019FY2020

FY2021

FY2021

FY2022

FY2022

Total training hours per year

Hours

49,651

39,431

55,21673,247

Average training hours per employee

Hours

16.6

12.5

18.0

24.1

※Preliminary as of the end of Mar 2023
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39

３．Business Integration

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Business Integration

40

Merger Summary
Hachijuni Bank and Nagano Bank merged on June 1, 2023, through a share exchange. Hachijuni Bank became the whollyowning parent company and Nagano Bank became a wholly-owned subsidiary(※). The two banks will promote discussions
and reviews towards early merger after business integration.
※Subject to obtaining the necessary permits and approvals by relevant authorities.

 Merger Structure and Timeline
Jun 2023: Business integration(scheduled)

Early merger after the businessintegration (scheduled)

Hachijuni
Bank
NaganoBank Share exchange ratio

Surviving bankafter merger

For each share of common stock of Nagano
Bank, 2.54 shares of common stock ofHachijuni Bank will be allotted.

Share exchange
ratio

Hachijuni

Nagano１

2.54

Subsidiaries(12)

Subsidiaries (2)Subsidiaries(14)

Jan 20, 2023: Execution of the Share Exchange Agreement andBusiness Integration Agreement
Mar 24, 2023: Extraordinary Meeting of the Shareholders ofNagano Bank
May 30, 2023: Delisting of Nagano Bank (scheduled)
Jun 1, 2023:

Business integration (become wholly-owned parent
and subsidiary) (scheduled)

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Business Integration

41

Expected Synergies From Merger
 Utilization of human capital andtransformation of corporate culture
Making efforts to transform our corporate culture
to be more responsive to the changing times by
maximizing the use of human capital, which isthe driving force behind the growth anddevelopment of both banks.

Early
reconciliation
Personnel exchange

Optimalresource
allocation

Diversity&
inclusion

Joint events
Joint training

Become a newbanking group

Human
resource
development

Respond to changing
times

Careerdevelopment
Attracting
talentChallenging corporate
cultureGrowth and satisfaction
Growing withthe regional
community

・ Initiatives to integrate human resources
・ Reallocation of personnel to growth areas
・ Work style reform, promotion of participation by diverse
human resources
・ Strengthening recruitment of new and mid-career byenhancing the brand・ Support for autonomous career development
・ External training/secondment to specialist areas
・ Personnel changes taking into account of career/lifeplans

Providingfinancial services

 Enhancement of financial intermediary functions andfinancial services
Combining the know-how, data, and networks of the two banks
and utilizing group functions, strengthening support for corebusiness, and fostering and growing local industries.
Improving the convenience of various services and providing
services corresponding to our customers’ needs by expanding
digital channels and services.

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Utilizing groupfunctionsUtilizing expertiseand networks of thetwo banks

Providing diverse
consulting
Providingservices in new
business fields

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Business Integration

42

Merger Outcomes Strengthening business domain expansion
Consolidating human resources, data, andknow-how of the two banks to improve ourComprehensive financial services
comprehensive financial services as well as
Deepening life support services
expanding into new business fields to solve
Management support
local problems, thereby contributing to thefurther development of local industries andEquity financeimproving the quality of life for local residents.

Utilizing human resources
Providing fundamental services

Expand businessfieldsNew business development
Business diversification

Regional trading businessElectric power businessBusiness succession/M&A

DX/GX consulting

Life design support

Asset management

Digital marketing

Utilizing store facilities

 Strengthening management basePromoting management efficiency
through consolidation andelimination of overlapping
branches, reorganization andintegration of head officeorganizations, and commonizationof systems and paperwork,building a sound managementbase that will provide stablefunctions and services in the
future.

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Optimization of store
network
Maintaining convenience
Optimization of network

Commonization ofsystems and paperwork
Unification of core/subsystems
Commonization of paperwork

Integration of head office
and group organizations
Integration of HO organizations
Consolidation of group functions

Promoting digitalization, improving business productivity,
improving efficiency of organizational management
Allocating created management resources to growth areas
Establishing a sound management base that can continue tocontribute to the local community
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