About The 77 Bank, Ltd.

1878.12The Trajectory ofTrust and Growth

1972.10

Started operations as
The 77th National Bank

1985.10

Established Miyagi SavingsBank（Renamed Gojo Bank in
1921）

Current Head Office

1910.6

Established Tohoku
Jitsugyo Bank, Ltd.

1980
1978.10

1961.5

Established 77 Shin-Yo Hosyo
Co., Ltd.

The Bank Creed establishedas the basic principle of management

1898.3

1978.12Name changed to The 77 Bank, Ltd.

1973.8Celebrated the 100th anniversaryof our founding. Increased capitalto ¥12.0 billion

Share listing changed to the Firs Sectionof the Tokyo Stock Exchanget

1882.7

Opened theTokyo BranchTransitioned to a Company with an
Audit & Supervisory Committee

2018.4

1999.8

1990
1988.4Opened the New York
Representative Office

1988.10

Increased capital to ¥22.2 billion

2018.7

Established 77 Research andConsulting Co., Ltd.

2000

2010
2006.11

1998.4

Established the Aomori
Corporate Sales Office

Established 77 BusinessSupport Foundation

Established The 77 Card Co., Ltd.

Started operation of the common use system（MEJAR）

2016.5Opened the Singapore
Representative Office

Established 77 Capital Co., Ltd.

1997.12

Established 77 Credit
Services Co., Ltd.

1983.2

2016.1

2016.72016.7
Building housing theShanghai Representative
Office2005.7

Tokyo Branch
Shibusawa warehouse during the Meiji era, where the first
Tokyo Branch of The 77th National Bank was locatedStart of the Medium-term Management Plan
“For The Customer & For The Future”—Best Consulting Bank Project—

Merged The 77 Card Co., Ltd. and
77 Credit Services Co., Ltd., with The 77th Card Co., Ltd.
as the surviving company

Upgrade the New York
Representative Office
to the New York Branch

Head Office relocatedto a new building at
Sendai Chuo 3-chome1970

2017.6

1990.111977.9The current The 77 Bank, Ltd. was established throughthe merger of The 77 Bank,
Tohoku Jitsugyo Bank, and Gojo Bank

1960

Opened the London
Representative Office

Established 77
Lease Co., Ltd.

1932.1

Started business of 77 Securities Co., Ltd.

Abolished the New York Branch andLondon Representative Office

1974.11
1893.52017.4

1999.3

Shares listed(Second Section of theTokyo Stock Exchange
and the Sapporo Securities
Exchange)

Head Office at the time of our foundationin 1878 (former Hinoya site)

Since its foundation in 1878, based on our management philosophy of dedication to serve
the local community for the prosperity of the local community, throughout the four
generations of Meiji, Taisho, Showa, and Heisei, The 77 Bank, Ltd. has developed steadily
by overcoming many difficulties while pursuing sound management. In this generationof Reiwa, we will continue to walk together with the region.

Opened the Shanghai
Representative Office

Building housing theSingapore
Representative Office

Established 77 Securities Preparatory
Establishment Co., Ltd.（trading name was changed to
77 Securities Co., Ltd. in January 2017）2016.9Established the Hachinohe Corporate Sales Office2016.11

Converted 77 Lease Co., Ltd., 77 Shin-Yo Hosyo Co., Ltd.,and The 77 Card Co., Ltd. into wholly-owned subsidiaries,
The roots of the 77 Bank s uniqueness3

1. Deep connection with Eiichi Shibusawa

2. Trust relationship with the Tokyo Stock Exchange

Eiichi Shibusawa, a businessman who was known as “the father of Japanese capitalism,”
had a strong interest in the Tohoku region through Munenari Date, who provided him withthe opportunity to enter the Ministry of Finance. At the time, there was no bank based in
Miyagi Prefecture and for this reason, when The 77th National Bank was established,
Shibusawa not only provided investment and various advice regarding such matters as thenature of the banking business and basic management concepts, he also seconded
exceptional talent including Keishi Endo (the second and fourth President) and Seikei Onofrom The Dai-Ichi Bank Limited. Furthermore, Shibusawa provided both mental and practicalsupport to the Bank over many years, including his transfer of The Dai-Ichi Bank Limited’sbanking business in Miyagi Prefecture to The 77th National Bank and his appointment as
Advisor in 1908. Eiichi Shibusawa’s spirit of “harmony of morality and the economy” lives ontoday in the line from the Bank Creed, which describes the Bank’s management philosophy,that states “the Bank’s progress goes hand in hand with prosperity in the local community.”

The Tokyo Stock Exchange (currently Tokyo Stock Exchange, Inc.), which wasestablished in May 1878, along with an increase in trading volume, in 1894 designated
The 77th National Bank as the only bank among many banks to handle receipts anddisbursements operations (*) for all trades of shares cleared. The reasons for thisdesignation include a recommendation from Eiichi Shibusawa and the provision of relief
financing to the Tokyo Stock Exchange during a stock market crash caused by arecession when Seikei Ono, who became the fifth president, was manager of the Tokyo
Branch, which rescued the exchange. Over the next 120 years and to the present,
The 77 Bank, Ltd. remains the only regional bank designated as a funds settlementbank, alongside the mega banks.

THE 77 BANK INTEGRATED REPORT

Eiichi Shibusawa（The photograph in the possessionof Fukaya City.）* Receipts and disbursements operations refers to account processing for the trading floor of a stock exchange

Seikei Ono
5th President

THE 77 BANK INTEGRATED REPORT

4

Financial and Non-financial Highlights■ Financial information■ Non-financial information￥7, 888.5 billion

Balance of deposits and certificates of deposit(Billions of yen)

￥4 , 894.6 billion

Balance of loans and bills discounted(Loans to SMEs / ¥ 1,915.2 billion / Loans to retail customers / ¥ 1,176.3 billion)■Balance of loans and bills discounted■ Balance of loans to SMEs

■Balance of loans to retail customers(Billions of yen)

7,964.3

8,000.0

7,891.8

7,888.5

6,000.0(clients)

2,000.0

1,096.5

1,825.4
1,134.2

1,915.2
1,176.3

March 31,2018

March 31,2019

0March 31,2020

Balance of assets in custody (the Group)￥600.4 billion

March 31,2018

Securities balance■77 Securities■Structured bonds, etc. (brokerage)■Foreign currency deposits (excluding deposits by financial institutions and offshore accounts)■Public bonds ■Insurance■Investment trusts■Stocks(Billions of yen)(Billions of yen)

800.0
606.2
133.8

33.2

619.3

14.2
18.1

600.4

24.9
107.6

400.0

0

4,000.0
58.2
13.4

77.4

309.8

324.4

97.1

90.8

72.0

March 31,2018

March 31,2019

March 31,2020

Net income (consolidated)

81.5■Others

2,000.0

March 31,2020

￥2 , 913.4 billion

17.6

18.2

March 31,2019

■ Share succession measures

2,330.6

2,964.9
137.8

591cases

2,169.5

657.6

640.9

March 31,2018

March 31,2019

March 31,2020

Core OHR(core gross operating income expense ratio)

71.4 %

591
600
367

404

15

341

349

FY2018FY201919

18

0

FY2020326 Cases /￥134.9 billion(Billions of yen)

(Cases)

60.0

60
43
38

40
32.8

40

26.0

FY2019FY2020FY2018FY2019FY2020

310
66
65

11

168
FY201873238
FY2019

14

37
36

178
137
265
FY2020ESG

70FY2018

400

69
84

200

■Insurance

631
500

ESG-based investment and lending

Cumulative results(until March 31, 2020)

71.4

631case■Estate liquidation/Inheritance trouble support services■Rough evaluation of inheritance tax

600

504

Renewable energy-related funding

40.0

0

■Will trust■Apartment loans(Cases)

68

37

11

0

80

73.3

FY2020800

2,155.9635.9

FY2019Number of inheritance and asset succession
support recipients■Rough evaluation of own shares

2,913.4
116.6

FY2018* Start-up plan formulation support, financing clients in the start-up stage, introduction of
government-affiliated financial institutions and start-up support organizations, subsidies,financing, and investment in venture companies

March 31,2020

900
3,126.0

69.5
15.0

March 31,2018

Number of business succession support cases

(%)

18.3

800

0
0

■Referral of external experts

327.2￥18.2 billion

2,713

300

0

818

(Cases)

159.5

27.5
14.8

(Billions of yen)

20.0

■BondsMarch 31,
2019

877

864

1,469

2,000.0
0

900

3,447

3,255

4,000.0877cases(Cases)

5,835
4,978

4,000.0
1,751.5

Number of start-up support projects (*)■ Issue resolution measure agreement by entities

6,000.0
7,000.0

Issue resolution measure agreement by entities

5 , 835 clients 3 , 447clients■Number of clients evaluated

4,894.6

4,725.0

4,627.1

Consulting
Number of clients evaluated

20.0

15.0

20

15 cases /￥12.5 billion
8 cases / 9.0 billion
3 cases / 1.3 billion
3 cases / 1.1billion
1cases / 1.1billion

Cumulative results(until March 31, 2020)

Green bond

Sustainability bondSocial bond

Sustainability Linked Loan
0

3.9 %

ROE (consolidated)

10.3 %

(%)

(%)

5

Capital adequacy ratio(domestic standards / consolidated)

3.8

3.6

3.9

FY2019FY20200Privately placed corporate bonds

Percentage of women in management positions

77 Privately Placed Corporate Bonds for Social Contribution (Donation-Type)

20

10.4
2.5

FY2018

10.4

10.3

10

253 cases /￥19.5 billion
10 cases / ￥0.5 billion
28 cases / ￥2.9 billion

13.4 ％(%)

20

77 Privately Placed Corporate Bonds for Local Professional Sports Support (Donation-Type)

12.8

13.2

13.4

March 31,2018

March 31,2019

March 31,2020

1077 ESG Privately Placed Corporate Bonds
05

FY2018

THE 77 BANK INTEGRATED REPORTFY2019FY20200March 31,2018

March 31,2019

March 31,
2020

Cumulative results(until March 31, 2020)0

THE 77 BANK INTEGRATED REPORT

6

The Economy and Potential of Miyagi Prefecture■ Industrial transformation

Miyagi Prefecture, where further potential lies unnoticed

・ Accumulation of manufacturing industry

Although Miyagi Prefecture experienced significant damage due to the Great East Japan Earthquake,

Expansion of manufacturing
Company has created new jobs
and grown peripheral industries

particularly in coastal areas, reconstruction projects have now reached the final phase thanks
to joint efforts by the public and private sectors.

● Toyota Motor East Japan(Integration of production of small cars)● Tokyo Electron Miyagi, etc.

・ Number of offices

In addition, with the expansion of major automotive and electronics companies,
the manufacturing industry is expected to become a driver for post-recovery economic growth while economic

Growth rate +3.9%(Offices)

concentration is advancing owing to active construction investment related to redevelopment projects in Sendai.

120,000
80,00040,000No.1 in Japan in terms of the growth rate

98,190

0

2012

2016

Source: Statistics Bureau, Ministry of Internal Affairs and Communications

・ Manufactured good shipment amounts（JPY th）

102,026

since the last survey (2012)

Increasing for six consecutive years since the Great East Japan Earthquake

6.00
4.00
2.00
0.00

3.42

3.73

3.97

4.02

2012

2013

2014

2015

4.47

4.11
2016

2017

Source: Tohoku Bureau of Economy, Trade and Industry■ Progress of regional development projects
・Sendai Urban Restructuring Project（launched by Sendai City in October 2019）* Project period : through FY2031
First measure for thereconstruction of obsolete
buildings and promotion of
corporate relocation into the city

■ Basic data of Miyagi prefecture［Area / Population / Living］
Total area

7,282km2

Population

2,303,098 Persons

Number of households

997,384

Number of new housing starts

17,591Gross Prefectural Product(nominal)¥9,475.5billion

Number of private sector offices

102,026

Agricultural output

Fisheries and aquaculture
production amount

Manufactured goods shipment amountWholesale/retail annual product sales¥190.0billion¥4,469.6billion¥81.9billion¥11,554.9billion* Reprinted from “2020 Shape of Miyagi（Miyagi Prefectural Handbook）”

7

THE 77 BANK INTEGRATED REPORT・Next-generation synchrotron radiation facility maintenance project（Scheduled for completion at the end of March 2023）

Economic ripple effects ofthe synchrotron radiation
facility（estimated by Tohoku
Economic Federation）[Industry / Economy]

Concentrated
industrial area

Miyagi Prefecture
Economic
concentrationis advancing
in Sendai● Establishment of “Subsidy System for Promoting Building Reconstruction in
Sendai City Center”● Relaxation of floor-area ratio with a view toward “developing highly functional office”● Enhancement of business attraction framework and subsidy systems, etc.

● JPY 1,901.7 billion in ten years after the commencementof operation（including JPY 1,624.0 billion of market
creation effects across Japan such as new productdevelopment utilizing the research results）● Local ripple effects within Miyagi Prefecture is JPY
277.7 billion● The project is believed to contribute particularly in theareas such as fuel cell, gene drugs and nanocarbon
materials

Next-generation synchrotron
radiation facility (image)

Provided by: Photon Science Innovation Center・Publicly assessed land prices (change in percentage) in Miyagi Prefecture
（%）
8.0
6.0

Commercial district : Increasing for seven consecutive years
Residential district : Increasing for eight consecutive years

4.0
2.0
0.0

0.0

1.4

2013

1.7 2.5

2.3 2.3

2014

2015

3.2

4.7

1.9
2016

2.4
2017

Commercial district

4.8

Residential district

6.2

5.9
2.7
2018

3.5

2019

3.5

2020

THE 77 BANK INTEGRATED REPORT

8

Growth Vision of The 77 Bank, Ltd.
As the regional market is expected to contract due to a declining population over the medium to long term, competition has become
institutions. Within this business environment, the Bank will overcome management issues through efforts under the Medium-term

Business

The 77 Bank Group's Strengths (Source of Value Creation)

increasingly intense, with the entry of other business formats and FinTech companies into the financial field, in addition to traditional financial
Management Plan and aim to establish a robust business foundation that is resistant to changes in the external environment.

Creation value

model

Financial capital・Capital adequacy ratio (domestic standards,
consolidated) : 10.31%
・Ratings : AA (JCR), A (R&I), A3 (Moody's)(As of June 30, 2020)

Growth strategy

Manufactured capital

・Number of branches : 143(Head office / Branches : 137, Sub-branches : 6)
・Corporate Sales Offices : 2・Overseas Representative Offices : 2(Shanghai and Singapore)・ATM locations : 398

Intellectual capital・Group companies: 6 companies(77 Lease, 77 Shin-Yo Hosyo, 77 Card, 77 Securities,
77 Research and Consulting, 77 Capital)

・MEJAR system(Shared with Bank of Yokohama, Hokuriku Bank,
Hokkaido Bank, and Higashi-Nippon Bank)

・Know-how on business reform and corporate
rehabilitation support through the recovery from theGreat East Japan Earthquake

Human capital

・Number of employees (consolidated) : 2,836
・Number of employees with qualifications :105 1st grade Certified Financial Planner, CFP,
36 Small and Medium enterprise Management
Consultants, 20 Movables Valuation Advisors,
21 Agricultural Management Advisors,
2 In-house attorneys, 1 In-house certified public
accountant

Social capital・Deposit share in Miyagi Prefecture : 55.6%
Ranked No. 1 in Japan for 23 consecutive years interms of the share of deposits in the prefecture(FY3/1997–FY3/2019) (Source: KINYU JOURNAL)・Loans and bills discounted share in Miyagi Prefecture:
43.0%
・Number of signing of a cooperation agreement with
regional public bodies : 33 (as of June 30, 2020)
・Certifred"Platinum Kurumin," "Gold Certified
Company," "Eruboshi (Grade 3)," and “Health andProductivity Management Organization 2020 (White
500)”
・Chosen as a constituent of MSCI Japan Empowering
Women Index
・Management Philosophy that inherits the spirit ofEiichi Shibusawa’s “harmony of morality and theeconomy”* As of March 31, 2020, for those without a date9

THE 77 BANK INTEGRATED REPORT

2

1

Social Issues

・Training of specialists
・Consulting through businessevaluation
・Support for asset formation
and asset succession

・Lack of successors for SMEs
・Labor shortage
・Advance of an aging society
・Continued low economic growth・Progress in globalization
・Diversification of lifestyle
・The occurrence of large-scale disasters
due to global warming
・Drop in demand related to reconstruction
from the Great East Japan Earthquake
・Outflow of students to Tokyo area

Business
Further enhance thesatisfaction andthrough consulting
solutions by identifying
i s s u e s . M o r e o v e r,
employee satisfaction

4
Governancestrategy

Regional economy
vitalization strategy
・Response to COVID-19
・Earthquake reconstruction
support・Initiatives for regional
revitalization

model

degree of customer
confidence in the Bank
offering the optimum
customers’ needs andenhance profitability andthrough these initiatives.

Medium-termManagement Plan

“For The Customer& For The Future”—Best Consulting

Bank Project—[from April 1, 2018

・Strengthening and enhancementof corporate governance・Dialogue with shareholders

3
Productivity
enhancement strategy
to March 31, 2021]

・Promotion of paperwork-free・Utilization of digital technology
・Promote Work Style Reform

Customers

・Improving customer satisfaction
through problem solving
・Sustained growth of clientcompanies
・Stable asset formation andasset succession for customers

Local
community

・Realization of a sustainable
society

Employees

・A workplace where eachand every employee can engage
in a diverse range of activities
・Improvement of employee
satisfaction( job accomplishment
and sense of fulfillment)

Shareholders

・Improvement of shareholder value
over the medium to long term

Realization of our management philosophy andcontribution to the achievement of the SDGs
Bank Creed
1. Elevate the Spirit of Voluntary Service
Acknowledge that the Bank’s progress goes hand inhand with prosperity in the local community, and seek
to elevate the spirit of voluntary service at all times.
2. Improve Creditworthiness
Bear in mind that credit is the Bank’s lifeblood, andendeavor to improve credit at all times.
3. Nurture the Spirit of Harmony
Recognize that the spirit of harmony is fundamental tothe execution of duties, and strive to nurture suchspirit at all times.

Management
Issues・Shrinking interest margins due to theintroduction of negative interest rates
・Decrease in revenue opportunities
through the emergence of other businessformats and FinTech companies
・Increasing difficulty in securing humanresources due to a deterioration ofbank performance

THE 77 BANK INTEGRATED REPORT

10

Message from the President

A bank’s mission is to serve its customers.
We Aiming aim to further improve
our its services through enhanced
utilization of “digital” and “human” elements.
President

Hidefumi Kobayashi

Introduction
We would like to express our deepest sympathy to all
those who have been affected by the spread of COVID-19
infection.
In addition to setting up a loan consultation desk andproviding information on government and prefectural
systematic loans, the Bank has made it a priority fromearly on to hear directly from customers about theircircumstances and requests. Moreover, we have set up
support teams and dispatched specialized personnel tobranches to enable speedy decision-making on loans.
The contents of our consultations have become more
complex as time goes by. We are now entering a phase
where we need to provide multifaceted advice not only on

11 THE 77 BANK INTEGRATED REPORT

cash flow but also on how to continue our clients’businesses.
We will continue to work hand in hand with our customers
to solve their problems by providing as much support as
possible, including by improving BS and PL.
In the midst of these activities, we have reaffirmed ourrole as a bank. Each and every one of us feels strongly that
our mission is to support the development of all people,
including local businesses, individuals, and local
governments, in a way that can only be done by aregional financial institution that deeply understands
the characteristics and background of this community.

THE 77 BANK INTEGRATED REPORT

12

Message from the President
Consulting services for survival in this challenging environment
In addition to the impact of the novel coronavirus, theenvironment surrounding banks is becoming more severe
every year. Regional financial institutions are faced with thechallenge of coping with new threats, such as declining
profitability due to negative interest rate policies and otherfactors, a shrinking market over the medium to long term
due to the declining birth rate and aging population, andreduced profit opportunities due to competition with otherbanks and industries.
In Miyagi Prefecture, which is our main business base, therecovery is slowing down, as production and housing
investment are weakening in a rebound to the demand forpost-disaster reconstruction following the Great East Japan
Earthquake.
In order for us to survive in this local economy, we needto make a firm commitment to each and every customer andprovide them with effective business services. This means
providing services not only in the traditional areas of deposits,loans, and foreign exchange but also in nonfinancial areas,
including consulting services, which is also the aim of our
medium-term management plan, concluding this year “‘For
The Customer & For The Future’: The Best Consulting Bank
Project.”“For The Customer & For The Future” -Best Consulting Bank ProjectKey strategies

April 1, 2018March 31, 2021

Main efforts
・Establish systems and structures for strengthening consulting capabilities
・Strengthen and demonstrate consulting-based sales capabilities throughout the Group・Strengthen the channel strategy utilizing digital technologies
・Promote sophisticated management of securities

Growth strategy~Strengthening of profitability~

Regional economy
vitalization strategy~Enhancement of value of the region~

Productivity enhancement
strategy~Effective and efficient allocation of resources~

Governance strategy~Strengthening of governance forsustainable growth~・Continue earthquake reconstruction support
・Contribute to regional revitalization
・Promotion and improvement of regional public bodies trade・Strengthen support for corporate rehabilitation and business reform

Continuity and collaboration among regional public bodies

・Strategic allocation of management resources
・Streamline and increase sophistication of operations
・Promote working style reform

are the keys to regional revitalization.

・Enhancement and strengthening of governance・Initiatives to enhance corporate value

Targets
Item

FY2020 results¥18.2 billion¥ 19.0 billion or more

● Fees and commissions¥ 9.7 billion¥ 11.5 billion or more

Enhancement of profitability ● Interest on loans and bills discounted
Pursuit of efficiency
Pursuit of soundness
Strengthening of corporate
sales capabilites
Strengthening of retailsales capabilities

FY2021 targets● Net income (consolidated)¥41.9 billion● Core OHR (core gross operating income expense ratio)¥ 45.0 billion or more

71.4%

● ROE (consolidated)

70% or less

3.9%

3.7% or more

● Capital adequacy ratio (consolidated)

10.3%

10% or more

● Balance of corporate loans (term-end)¥ 3,027.2 billion¥3,000.0 billion or more

¥ 1,306.6 billion¥1,370.0 billion or more

Of which, Miyagi Prefecture
Of which, Sendai City● Balance of assets in custody, Group (term-end) *● Balance of consumer loans (term-end)¥ 1,778.2 billion¥ 600.4 billion¥ 1,181.6 billion¥1,900.0 billion or more
¥ 740.0 billion or more

¥1,200.0 billion or more

* Sum of assets in custody of The 77 Bank and those of 77 Securities (foreign currency deposits exclude deposits by financial institutions and offshore accounts)

Key performance indicators (KPIs) for strengthening consulting capabilities
Item
Enhancement of consulting
capabilities● No. of employees with qualifications(1st grade Certified
Financial Planner, CFP, and Small and Medium EnterpriseManagement Consultant) (final year)

Strengthening of consulting
for retail customers

700 people or more

12,106 borrowers

13,000 borrowers or more

● No. of clients who signed contracts for customized
solutions based on business evaluation (cumulative total
for 3 years)

1,978 clients

2,000 clients or more

● Fees and commissions from corporate clients (final year)*¥1.5 billion¥1.8 billion or more

● No. of business succession, inheritance, and asset succession
support recipients (cumulative total for 3 years)

2,126 recipients

3,300 recipients or more

● No. of increases in contracts for installment-type assets
in custody [compared with FY2018 term-end]

28,921 contracts

40,000 contracts or more

927 times

1,100 times or more

● No. of seminars for customers(cumulative total for 3 years)

In our medium-term management plan, we are working on
f o u r strategies: a growth strategy, a regional economy
vitalization strategy, a productivity enhancement strategy, anda governance strategy.
Of these, the major theme of regional revitalization includedin the regional economy vitalization strategy contains many
issues that must be addressed continuously in the future.
The main objective of regional revitalization is to disperse thepopulation from the Tokyo metropolitan area to other regions ofJapan. The four pillars of regional revitalization are efforts tohalt the current situation of the increasing concentration ofpeople in Tokyo. In order to make the most of these four pillars,
two major points are continuity over the medium to long term
and cooperation with local governments.
Regional revitalization cannot be achieved unless each ofthese efforts not only bears fruit but also continues to beconnected to the others, becoming an extensive “plane.” To
this end, we are doing our best to support as many start-ups
and new businesses as possible as well as to support andfoster core companies that will support the region and create
jobs.
The other key point, cooperation with local governments,
can be realized by resolving issues such as differences in thesystems and equipment environment of each local
government. Currently, we are at the stage of creating aplatform for cooperation, with the 77 Bank acting as asecretariat, holding study sessions, supporting matching withprivate companies, and offering our videoconference system.
We would like to overcome these issues while looking at
both the short term and the long term to realize regional
revitalization.

FY2021 target

141 people● No. of corporate loan borrowers (final year)

Strengthening of consulting
for corporate clients

FY2020 results

Advancement towards becoming the “Best Consulting Bank”
and continuing efforts for regional revitalization

Prioritized Areas for Regional Revitalization:

Four Pillars

Support for starting newcompanies or businesses

Support and developmentof regional core companies

Promotion ofurban development

Support for promotion of
tourism, etc.

* Fees and commissions for syndicated loans, commitment lines, business matching, M&A, privately placed corporate bonds, manager insurance products, etc.

13 THE 77 BANK INTEGRATED REPORT

THE 77 BANK INTEGRATED REPORT

14

Message from the President
Digitalization and human resource development to create ideal services for the future of banking
Due in part to the impact of COVID-19, the need for internet
banking and cashless payment has increased, anddigitalization is accelerating. For example, the 77 Bank
application for smartphones has become dramatically moreconvenient, as all customers can now use it without having tofill out an application form. I believe that not only individual but
also corporate customers will be able to make more use ofdigitalization as a way to solve a shortage of manpower andeliminate waste in business operations.
The ideal is to be able to choose between face-to-face anddigital services at any given time, taking advantage of the
security, adjustability, and flexibility of human services and theconvenience and efficiency of digital services. We are working
to achieve this ideal model.
I n t h i s s e n s e , h u m a n re s o u rc e d e v e l o p m e n t i s a n
indispensable backbone for us to approach the best consulting
bank. We believe that we need people in order to be mostuseful to our customers and that we can improve our services
by providing both human and digital services.
In order to further enhance the expertise of our consulting
sales staff, we have created an environment where many ofthem can take advantage of training programs and online
courses. The “President’s School,” which will be launched thisyear for mid-career employees in their 30s, is one of theinitiatives.
We are also working to create an organization where all
generations can play an active role, regardless of gender orenvironment. I believe that if we can provide a workplace where
people can work even when they have limited working hours,
such as while raising a child or caring for a family member, we
will be able to understand the feelings of our customers more,which will eventually lead to higher productivity.

77 Bank Group SDG Declaration to achieve goals together with local communities
In July 2020, we announced the 77 Bank Group SDG
Declaration. This is in support of the purpose of the SDGs
(Sustainable Development Goals), which are in line with ourphilosophy of desiring communal prosperity and serving local
communities.
I believe this declaration will help unify the consciousness ofthe entire organization and our group as well as help us
discipline ourselves. From the perspective of the SDGs, banks
have the potential to influence the direction of society throughtheir investments and loans. Therefore, we are also disclosing
our lending policy, which states that we will not take any actionthat would have a negative impact on society.

In the future, we would liketo restructure our social
contributions from theperspective of this declaration
and work together with local
communities toward therealization of a sustainable
society without turning a blindeye to our societal role.

About Corporate Slogan and Logo
SloganLogo

More than ever, and forever,with our region.
Concept

Our slogan expresses our commitment to our customers. We arecommitted to moving forward with our region, growing with our region,and creating the future with our region. We will do this by providing
highly specialized solutions that harness the collective strengths of theGroup while valuing the traditions, trust, and regional foundations that wehave established over the years.

A simple design that can be recognized at a glanceas representing the 77 Bank Group, with a ring
symbolizing our connections with our regionand our strong group ties and sense of unity.
The logo also promotes the Group’s proactive
work on SDG-related initiatives.

Underlying
meaning“More than ever” expresses the mission and shared values of the 77
Bank Group to always seek to deliver better solutions for customers andmake greater contributions to the prosperity of local communities than
we have made before, by providing the highly specialized solutions that
customers have come to expect from us.
“And forever” includes the dual meaning of “from now on” and “uptill now” and expresses the 77 Bank Group’s commitment to building
everlasting relations with local communities and customers.
“With our region” expresses the Group’s commitments to contributeto regional development and always put customers first in corporated
in the principle “Elevation ofthe Spirit of Service” stated in our Bank Creed.

The colorful ring, which expands as it turns, iscomposed of the 17 colors used to represent
the SDGs and symbolizes the comprehensive
capabilities and solutions customers havecome to expect from the 77 Bank Group as
well as the Group’s constant tackling of newchallenges to create a bright future for theregion, in line with the principle in our Bank
Creed of “Elevation of the Spirit of Service”.

77 Bank Group SDG Declaration〜More than ever, and forever, with our region.〜
The 77 Bank Group, in keeping with the philosophy of the Bank Creed passed down from ourfounders—“The Bank’s progress goes hand in hand with prosperity in the local community”—aims tocontribute to the future of the region and the realization of a sustainable society by working toward theachievement of the Sustainable Development Goals(SDGs) on a Group-wide basis.
1. Revitalization of the regional economy
We aim to contribute to the realization of a sustainable society
through consulting with, and building partnerships with, local
public organizations and corporate and individual customers.

3. Encouraging and supporting the activities ofour employees

Exploring ways to provide support
beyond the framework of finance

We are creating an organization where each and every employee
and director can engage in diverse range of activities.

Connecting “change at the Bank” to trust, security, and regional development
2. Responding to global warming and climate change

4. Advancing corporate governanceThrough our responses to climate change, we will contribute to theprotection of Earth from destruction and contribute to urban
development that is more in harmony with nature.

We will collaborate appropriately with our stakeholders tostrengthen and enhance corporate governance.

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Going forward, we will continue to go back to the basics of “the role of a bank” and pursue how we can meet customer needs, generate
sustainable profits, and be useful to our customers while maintaining soundness. We believe that by responding quickly to the changing
times and upgrading our organization, individuals, and initiatives, we will be able to contribute to our local communities.
The recent response to COVID-19 has made me keenly aware of the importance of corporate financial strength. I also feel that it isimportant to continue to devise and make efforts to increase profits even in a difficult environment, and to work on improving productivity
through efficiency.
The Bank’s role is to provide the local community with management resources in the form of people, goods, money, information, andtime. In September 2020, we plan to enter the recruitment business, and we hope to develop together with the local community while
exploring ways to provide support beyond the framework of finance.
We will continue to deepen our relationship with the local community, and as a local financial institution, we will contribute to thedevelopment of the local economy by providing created value to the local community, customers, employees, and shareholders. Your
continued support will be most appreciated.
THE 77 BANK INTEGRATED REPORT

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