December 4, 2023 Our challenges build our future. Chugin Financial Group, Inc. 1.  1H FY2023 earnings results were favorable and the new Medium-term Management Plan has made a successful start ▷ Interim profit attributable to owners of parent was 10.4 billion yen (+ 2.2 billion yen as compared to the plan, -3.5 billion yen as compared to the previous fiscal year) A The performance has been favorable, accounting for 69% of the full-year earnings (The new Medium-term Management Plan has made a successful start.) 2. The full-year earnings forecast remained unchanged (“preparation” for the next fiscal year and beyond) ▷  Consideration of prior implementation of strategic investments (mainly in the digital and innovation-related fields) ▷  Enhancement of assets through the use of capital reserves (accumulation of general allowance for loan losses) ▷ Agile handling of securities, etc. Actions to increase profits in FY2024 and beyond
3. Toward improvement of corporate value
▷ Through the measures in the Medium-term Management Plan, we will: “ROE” ••• Improve RORA and financial leverage (capital adequacy control) “PER” ••• Realize “sustainable growth of profits” centered on the “deepening of regional revitalization SDGs” 2 I. Earnings Results for 1H FY2023 and Forecasts for FY2023 . Summary 4 Consolidated for the FG 5 Status of the Group Companies (Non-consolidated for the Bank) 6 Status of the Group Companies (Excluding the Bank) 7 . Earnings Forecasts 8 ll. Initiatives toward Enhancement of
Corporate Value
. Awareness of the Current Situation and Enhancement of Corporate Value through the Medium-term Management Plan 10 . Overview of the Medium-term Management Plan 11 . Initiatives toward Improvement of ROE 13 Boosting Net Sales 14 Optimal Allocation of Management Resources 20 Control and Strategic Use of Capital 21 Shareholder Returns 23 . Initiatives toward Improvement of PER 24 Co-creation of a Prosperous Future 25 . Conclusion 30 III. Appendix Section I Earnings Results for 1H FY2023 and Forecasts for FY2023
Interim profit attributable to owners of parent was 10.4 billion yen •  Profits decreased as compared to the previous fiscal year due mainly to increases in foreign-currency procurement costs at The Chugoku Bank and credit costs associated with an increase in the loan balance. •  Meanwhile, revenues of the Group companies (other than the Bank) remained robust, and The Chugoku Bank pushed forward with the improvement of the securities portfolio ahead of the plan. Consequently, the interim profit attributable to owners of parent remained favorable, recording 2.2 billion yen more than the announced forecast.

Core business net profit
• Compared to the previous fiscal year, core business net profit decreased by 4.7 billion yen (a decrease of 2.7 billion yen excluding cancellation of investment trusts), due mainly to an increase in foreign-currency procurement costs and a decrease in net interest income due to the absence of the recording of gains on cancellation of investment trusts, which had been recorded in the previous fiscal year. • The percentage of progress in the fiscal year remained high at 69%, due in part to an increase in the loan balance, an increase in net interest income thanks to the improvement of the securities portfolio, and robust growth of the net fee income.
Credit costs
• Credit costs increased by 2.3 billion yen as compared to the previous fiscal year as the general allowance for loan losses increased due mainly to the accumulation of the loan balance.
Securities-related income and loss
• We will continue to improve the portfolio. (As of the end of Sep. 2023) The duration of yen bonds was 4.8 years (1.0 year shorter than the previous fiscal year) The duration of foreign currency bonds was 1.6 years (1.8 years shorter than the previous fiscal year) * The details of the major numerical figures are indicated in III. Appendix (p. 31 onward).
* Until the previous year (before the transition to FG), each company had recorded intra-group dividends. Therefore, the YoY figures are indicated excluding the intra-group 7

Earnings Forecasts
Although the earnings remain high mainly for The Chugoku Bank, the full-year earnings forecasts remain unchanged from the figures planned at the beginning of the period. ■ Further acceleration of strategic investments related to innovation > > > Development of digital technology-oriented human resources Operational reforms by accelerating DX Expansion of investments toward the use of data (sophistication of marketing), and other initiatives ■ Accumulation of loans toward increasing net interest income in the future and an increase in the general allowance for loan losses associated therewith > An increase of about 400.0 billion yen (locally and at the headquarters) compared to the Medium-term Management Plan Enhancement of assets through the use of capital reserves l Agile improvement of the securities portfolio based on market trends and others Section II Initiatives toward Enhancement of Corporate Value 9
Trends and targets for ROE/PBR Beyond Capital costs Calculated value based on the PBR/ROE results: Around 10% Estimated value based on the CAPM: Around 6% 2015/3 2016/3 2018/3 2021/3 2022/3 2013/3 2014/3 2017/3 2019/3 2020/3
Toward improvement of PBR
The ROE has declined since the introduction of the negative interest rate. Recently, the ROE has steadily improved thanks to the structural and action reforms based on the Long-term Management Plan. However, the PBR has remained low. Structural reforms (Strengthening of hard aspects) April 2017 to March 2020 Action reforms (Strengthening of soft aspects) ● BPR investments (A shift from administrative affairs to sales activities) ● Autonomous sales system and personnel system ● Acceleration of the development of new businesses ● Transition to a holding company system Through the three growth strategies toward the improvement of PBR: Stage Further improvement and enhancement of ROE Accumulation of high-quality assets, expansion of business pillars, etc. Improvement of PER (lowering of capital costs) April 2023 to March 2027 Sustainable growth of profits through regional revitalization SDGs, and others 10
Strategies 1 “Deepening” of regional revitalization SDGs We will contribute to the “sustainable development of communities” by drawing out its appeal and potential. Corresponding materiality (priority issues)
2 Creation of innovations
We will create “new value” toward the next phase of growth.

Corresponding materiality (priority issues) Promotion of DX Active participation by diverse human resources 3 Strengthening of the Group business base
We will build a “solid foundation” to implement growth strategies.
Corresponding materiality (priority issues) Active participation by diverse human resources Sophistication of governance Promotion of DX
and diesel oil) and Scope 2 (indirect emissions from the use of electricity and heat supplied by other companies) by the end of FY2030. *2 The amount of investments and loans from FY2020 included here includes financing for social sectors (healthcare, nursing care, childcare, education, etc.) and environmental sectors (solar, wind, biomass, EV, etc.), as well as support for regional revitalization and SDG/ESG initiatives. *3 Annual number of contracted consultation cases related to business succession, the environment, etc. *4 Annual number of cases handled in relation to testamentary trusts, inheritance support services, etc. *5 Amount invested in employees, such as training- and education-related expenses, study incentives, Chugin Open Lab activity expenses, and personnel expenses for training and secondment
Measures to Improve ROE (Net Income/Capital Adequacy) Profitability RORA (Net income/RWA) X Capital efficiency Financial leverage ratio (RWA/capital adequacy) Boosting Net Sales ▷ An increase in net interest income through the accumulation of high-quality assets ▷ An increase in interest on loans and discounts on account of interest rate hikes ▷ Expansion of consulting revenues of the entire Group ▷ Expansion of business pillars Optimal Allocation of Management Resources ▷ Actions taking into account the acceleration of DX Control and Strategic Use of Capital ▷ Risk-taking through the use of capital > Reduction of cross-shareholdings Shareholder Return ▷ Shareholder return ratio of at least 40% A stable increase in dividends and agile acquisition of treasury shares * RORA = Return On Risk Weighted Asset * RWA = Risk Weighted Asset Improvement of ROE

Sustainable Finance
Consulting service menu Support for realization of carbon neutrality of local communities Municipal governments Support for the planning and development of community decarbonization ini- for the use of renewable energy to solve local iss C Cube Chugin Energy Promote improvement of the entire com Large customers
Support for realization of SX of
Consulting Support for the calculation and reduction of greenhouse gas enterprises, etc. Small and medium enterprises, etc. Support for the development of SX strategies and the roadmap Support for business portfolio reforms and so forth Promote and support customers' initiatives towar SDGs and decarbonization dentification of issues, s ireparation and public Chugin SDGs Support Chugin Decarbonization Consulting poort for achieving emission reduction targets, and so forth Monitoring and managing CO saving and renewable en Business matching Being involved in local issues from upstream, capturing them from a wide perspective Toward the accumulation of high-quality assets 1,500.0 Cumulative amount of sustainable finance executed (billion yen) FY2020 FY2021 FY2022 FY2023 FY2026 FY2030
Improvement of RORA
RORA on loans * Based on SP FY2018 FY2019 FY2020 FY2021 FY2022 1H FY2023 Initiatives for structured finance (loans to the headquarters) Composition ratio (as of the end of Sept. 2023) Structured finance trends (average balance, billion yen) * Japanese yen : foreign currency = 5 : 5
Improvement of ROE Net sales Return Capital Opening of the Singapore Branch and Strengthening of Ship Finance Purpose
Opening of the Singapore Branch (June 2023)
▷ Support for finance-related services (deposits, loans, and payment functions), which are the most needed by customers’ overseas subsidiaries ▷ Expand trade with not only local companies but also overseas subsidiaries of listed companies, etc. ▷ Strengthen finance for the maritime industry in the region Accumulate high-quality projects and enhance our presence in the ship sector Expand business in fields such as decarbonization and SX High profitability (SP rate and RORA) Development of specialized human resources (accumulation of know- how, etc.) Taking on challenges and pursuing new business opportunities overseas Strengthening of profitability Objectives of the Singapore Branch Aim for the total asset balance of 100.0 billion yen (strengthening of ship finance) Strengthening of ship finance 0.83% (as of the end of Mar. 2023) * Reference Local development 0.72% Strengthening of the Singapore Branch • Strengthening of domestic offices (Setouchi) • Sustainable finance and others
Accumulation of Loans
Capturing local demand for funds (Medium-term Management Plan) Local development Personal loans (average balance) Addition based on the extra capacity for risk taking (beyond the Medium-term Management Plan) Further increase in assets starting from H1 of FY2023 Addition + Approx. 400.0 •Local development, structured finance, etc. billion yen Medium-term Management Plan + Approx. 900.0 billion yen Improvement of ROE Net sales
Status of Yen Deposits and Loans Stable BS structure supported by a wealth of very low-liquid core deposits Composition ratio by interest rate system (Based on the average balance as of 1H FY2023) Yen deposits + NCD: 8 trillion yen Negotiable 3% * Reference trillion yen Yen loans: 5 trillion yen Others 1% Impact on Interest on Loans and Discounts Caused by Interest Rate Hikes Loan interest is expected to significantly increase due to future revisions to the monetary policy Impact on yen Ioan interest in the final fiscal year of the Medium-term Management Plan (FY2026) O� Abolition of YCC and lifting of negative interest rate: + approx. 6.5 billion yen $$ Short-term prime rate hike and further hike in long- term interest rate: + approx. 3.0 billion yen Plus an increase in the yield of reinvestment of en bonds and other factors sideration. " Roughly estimated with a pass-through of 809 ● Abolition of YCC: The long-term interest rate (10 years ) 1% level conti q of the negative interest rate: Policy interest rate 0%, TIBOR increases ● Short-term prime rate: Policy interest rate 0.1%, short-term prime rate increas TIBOR swap rates for each maturity period increase by 10 bp 4 3の(1)
Improvement of ROE Net sales Capital Return An Increase in Consulting Revenues through Collaboration within the Chugin Group People Chugin Human Innovations SETONOWA Products Chugin Energy C Cube Consulting Chugin Capital Partners The Chugin Card Money More diverse and sophisticated needs of customers Chugin Group’s solutions Trends in net fee The Chugin Lease Chugin Asset Management Chugin Securities The Chugoku Bank • The Chugin Operation Center • The Chugin Credit Guarantee •CBS FY2020 FY2021 FY2022 Group collaboration system
Number of contracted consultation cases (KPI)
* Annual number of contracted consultation cases related to business succession, the environment, etc. (for the entire Chugin Group) Unit: case 460 BK: The Bank; Gr: Group companies excluding the Bank
■ Progress image
17 ■Lease Number of cases referred by the Bank Up 24% YoY (2023 H1) ■Card Organized an intergroup “Cashless Promotion Team” in collaboration with the Bank ■ Asset Management Organized an investment trust “Setouchi Supporting Stock Fund" Connected investors and local companies Improvement of ROE Net Capital Return sales
signing DX and SX in the regio
C Cube Consulting
• The company was newly founded in September 2022 as a company that offers advanced consulting services centered on DX and SX. •  It executed agreements on services to support the promotion of DX and applications to be certified as Decarbonization Leading Areas with municipal governments. •  In addition, it participated in “DX Sunrise Okayama,” which is a community to support collaboration among industries, academic institutions, governments, and financial institutions in July 2023. It will support the DX of local SMEs in the region through collaboration with Okayama University and companies within the Prefecture. * DX (digital transformation) Using digital technology to bring about innovative changes in business * SX (sustainability transformation) Corporate management balancing sustainability and ESG (environmental, social and governance) issues
Chugin Energy
• The company was newly founded in April 2023 as a local energy company that promotes decarbonization. 1. Photovoltaic power PPA business Three agreements concluded within six months after the foundation of the company 2. Businesses of acquisition of renewable energy power stations and electricity sales 3. Businesses of supporting municipal governments to launch new electricity services, Examples shown on right etc. and investments and loans 4. Environmental energy business utilizing batteries, etc. In the future X Sunrise Okayama Support for strategies provided by C Cube onsulting Support for commercialization Equity participation [New electricity services of municipal governments] PPA agreements [Customers] Municipal governments, etc. Loans, lease, etc.大Chugin Group Initiatives provided by the entire Chugin Group 18
Improvement of ROE Net sales Capital Return
Alliance Strategy
We aim to co-create new value through active collaboration with various stakeholders, including different industry players.
Basic stance
んんCo-creation and promotion of measures that contribute to the enhancement of corporate value of the Group Co-creation and promotion of measures that contribute to the sustainable growth of communities
Wide-area collaboration TSUBASA Alliance Aim to maximize synergies in both net sales and costs generated by leveraging the largest economies of scale as a regional bank munity collaboration kayama Co-creation Partnership JEO日本政第全融公園●  Alliance for Co-creation of Future of Okayama ●  Okayama Consortium for Promotion of Community Decarbonization Further promote a system of collaboration with diverse partners in the community to solve local issues and promote regional revitalization Collaboration among  different industry players ● Agreement for collaboration concerning regional revitalization (PwC Consulting) ●  Investments in ventures by Chugin Capital Partners Chugin Infinity Fund Build a local ecosystem with startups Improvement of ROE sales
Implement Operational Reforms in All Areas, without Any Exceptions Group-wide Optimal Allocation Utilizing the Management Resource Committee(*) (*) Management Resource Committee … A committee for cross- organizational examination and deliberation on optimal allocation of management resources Allocation to revenue departments, etc. Realization of optimal management of business and human resource portfolios Operation volume (in the priority five areas) Expected reduction of  4 more   by FY2026 (as compared with FY2022) Generating management resources At the time of formulation of the Medium-term Management Plan (entire operation volume) 30% reduction Effect of Acceleration of DX In addition to operational reforms, we will aim for greater effects than initially expected by accelerating DX measures including business model reforms and the creation of new businesses. Formulation of the “DX strategy” under way 1.5 billion ven (At the time of the formulation of the Medium-term Management Plan) Greater effect 20
Improvement of ROE Net Capital Return sales Control of Consolidated Total Capital Adequacy Ratio Consolidated for the FG

Expansion of Equity Investments
Chugin Capital Partners Invested amount by 9 funds totaled 5.0 billion yen or more > Startups Business succession Regional revitalization, etc. (Examples of funds operated) Startups: 36 companies, about 0.8 billion yen Of which, 15 companies are related to the region. *Inquiries for projects came from over 400 companies. (Investments were made with the theme of “companies which solve local issues.”) Environment/society: 9 companies, about 1.6 billion yen (decarbonization/energy, social infrastructure) Chugin Group’s “Overall Asset Strategies”
Capital allocation . Risk taking 2019 2020 2021 2022 2023 2024 Improvement of ROE Net sales
Return
Basic Policy We will limit cross-holdings to cases where it is determined necessary for the sustainable growth and enhancement of the corporate value of the Group and the issuers, and reduce them through dialogues with the issuers from the perspectives of capital efficiency and reduction of the risk of holding the shares. ✓ The appropriateness of cross-shareholdings is determined strictly based on the basic policy. ✓ The reduction rate as of September 30, 2023 was minus 11% compared to the reduction plan by March 31, 2027 (minus 20% compared to March 31, 2022, based on book value).
* Book value: Including listed shares, unlisted shares, and deemed holding shares
Improvement of ROE Net Capital sales Return
FY2023 Shareholder Return Policy Shareholder return ratio of at least 40% through dividends and share buybacks (consolidated) ✓ The dividend for FY2023 is planned to be 30 yen (interim dividend and year-end dividend of 15 yen, respectively). ✓ We will enhance shareholder returns by increasing stable and continuous dividends and flexibly implementing share buybacks through capital control. Shareholder return ratio 36.2% 38.2% 36.9% 38.9%
40% or more * On a non-consolidated basis up to FY2019 On a Chugoku Bank-consolidated basis since FY2020 On a Chugin Financial Group-consolidated basis since FY2022 Dividend per share Total amount of returns
buybacks *Share buybacks are those carried out within a year from the general meeting of shareholders. Total dividends
Shareholder return ratio of at least 40% through dividends and share buybacks
Measures to Improve PER (Aggregate Market Value (Stock Price)/Net Income) II Expectations for continuous growth Decrease in costs of shareholders’ equity Implementation of corporate philosophy Co-creation of a prosperous future •Communities •Customers •Employees ▷ Initiatives that capture the community from a wide perspective (collaboration with municipal governments) > Startup ecosystem ▷ Overseas consulting ▷ Asset formation ▷ Transformation into next-generation channels through DX ▷ Human capital investments ➤ Re-skilling ➤ Engagement ▷ Diversity and inclusion ▷ Organizational culture Engagement improvement (IR, SR, etc.) Improved external ratings
Initiatives that capture the community from a wide perspective (collaboration with municipal governments) Community collaboration has made further progress, as exemplified by contracted operations performed by C Cube Consulting and investments made by Chugin Energy in new electricity services for the communities.
SDGs x Kagamino-cho
• Agreement concerning comprehensive cooperation related to regional revitalization SDGs SDGs x Maniwa-shi • Agreement concerning comprehensive cooperation related to regional revitalization SDGs
SDGs x Shinjo-son
• Agreement concerning comprehensive cooperation related to regional revitalization SDGs • Forestation project aimed at building sustainable forests • DX promotion support business
SDGs x Takahashi-shi
• Agreement concerning comprehensive cooperation related to regional revitalization SDGs
SX x Fuchu-shi
• Operations to analyze the regional economy toward the realization of a decarbonized society and to conduct survey. on the potential for the introduction of renewable energy • Comprehensive agreement related to regional revitalization SX x Kurashiki-shi • Comprehensive agreement related to regional revitalization DX and SX x Mitoyo-shi • Industrial development utilizing AI, IoT, and other advanced technologies • Agreement concerning collaboration toward the realization of a decarbonized society
SX x Okayama Prefecture
• Comprehensive agreement related to regional revitalization Operations to support applications for certification as a Decarbonization Leading Area Co-proposal for "Decarbonization Leading Areas" • Establishment of a new local electricity company Comprehensive agreement related to regional revitalization
SX x Wake-cho
Comprehensive agreement related to collaboration and cooperation related to regional decarbonization
SX x Okayama-shi
Comprehensive agreement related to regional revitalization SX x Setouchi-shi • Co-proposal for "Decarbonization Leading Areas" SX x Tamano-shi • Comprehensive agreement related to regional revitalization * The red font color indicates contracted operations performed by C Cube Consulting, while the blue font color indicates investments made by Chugin Energy. Improvement of PER
Startup ecosystem • Support for startups aiming to create companies that represent the communities Overseas consulting Opened in Jun. 2023 Singapore Branch •Financial support toward growth Institutional Nov. 2023 loans "Mebuki" Okayama Innovation Contest • Okayama Tech Planter Startup loan programs for companies that have ever been finalists Provide medium- to long-term support for founders' business growth through a wide range of financial services and the exercise of consulting functions Asset formation ■ : Number of NISA accounts (unit: 10,000) Encourage “a shift from savings to investments” by also utilizing the new NISA system 6.9 Co-creation of a Prosperous Future —Communities and ustomers- Transformation into next-generation channels through DX • Chugin App • Expansion of web-based transactions Rate of transactions that can be completed on a non-face- to-face basis (BK) * Aiming for 90% The targeted transactions are those that can be shifted to non- face-to-face transactions, excluding cash, etc. handled at branches Opening of NISA accounts through smartphones End of FY2021 End of FY2022  Sep. 30, 2023  End of FY2024 End of FY2025 End of FY2026 • Chugin Business Portal Introduction to Dissemination of information to persons responsible for face-to-face sales • Strengthening of database marketing Realization of “personalization” and “timeliness” Development of human resources for data analysis Improvement of PER Employer
Human capital investments •  Expand human capital investments in line with our business strategy, such as secondment to external organizations for training Investments of time 1H FY2022 0.1 billion yen 0.2 billion yen 1H FY2023
1H FY2023
In addition to the items on the left, • Wage raise by 4% (including regular pay raise) •  Starting operation of the talent management system, etc. FY2026 (target) U.5 billion ven Re-skilling *Program to support changes of job functions (changes of job functions to corporate sales): To be expanded (currently being implemented) Engagement Introduced in Nov. 2023 PU se surveys Surveys are conducted at high frequency. • Emotional aspects of employees ● Reactions to the Company's messages are monitored on a regular basis. *Second career support: Systemized in FY2023 28 Improvement of PER
Diversity and inclusion •  Newly established D&I NEXT10 Promotion Department NEXT10 Promotion Office (from Jun. 2015) Plans and promotes various measures, always with an eye on the next 10 years (CS/ES, diversity, and “Chugin Values”) Acceleration of group-wide initiatives D&I NEXT10 Promotion Department (from Jun. 2023) • Expansion of D&I promotion areas • Planning new initiatives with an eye on the next 10 years • Promotion of active participation by women Ratio of female managers and supervisors (FY2022 result) (Result in Oct. 2023) (FY2026 target) 13.4 % • Mid-career recruitment and specialized course Number of mid-career recruits (plan for the Apr. 2023 to (As of Nov. 2023) Mar. 20period from 27) Recruitment policy [New graduates : Mid-career hires] 2 1
Organizational culture
.
Chugin Open Lab
An internal venture system that started in 2021 Cumulative total of 49 teams and 205 participants so far [Examples of commercialization] Establishment of Chugin Energy and broadcast of PR videos for customers at sales offices, etc. • Brand slogan Our challenges build our future. Conclusion Accelerating measures under the Medium-term Management Plan > > Expanding the use of capital (addition of assets) Yielding results of measures for DX and innovations > Responding to change in the financial environment Accelerating initiatives for regional revitalization SDGs, and others > Improvement of ROE and PER FY ended Mar.
Approx. 7.6 times| At least 8 times Medium to long term
Achievement earlier than the
ROE that exceeds capital costs
PBR to more than 1 time Approx. 8 times Continuous improvement III. Appendix Major Numerical Figures
31
[Loan yield] [Factors behind change in net interest income] ■ Yen based: 27.3 billion yen (-¥2.1 billion YoY) • Interest on loans and discounts: +¥0.8 billion YoY ■ Foreign currency-based: ¥3.6 billion (-¥1.5 billion YoY) Interest on loans and discounts: +¥12.4 billion YoY • Interest on securities: -¥2.1 billion YoY (Of which, gains on cancellation of investment trusts: -¥1.9 billion) • Yen, other: -¥0.8 billion YoY (Short-term investment revenues, swap costs, etc.) Interest on securities: +¥5.1 billion YoY Foreign fund procurement cost: +¥19.4 billion YoY (Foreign currency-based deposits, market procurement) (billion yen) • Yen net interest income: Loan interest increased 0.8 billion yen as compared to the previous fiscal year due to a robust increase in the balance. Securities interest decreased by 2.1 billion yen as compared to the previous fiscal year due mainly to the absence of gains on cancellation of investment trusts (1.9 billion yen) recorded in the previous fiscal year. •Foreign currency net interest income: The income decreased 1.5 billion yen as compared to the previous fiscal year due to a hike in procurement costs following a surge in overseas interest rates.
32 Chugin Financial Group, Inc.
[Net fee income] *: Four products in custody (investment trusts, insurance, municipal bonds, and financial instrument brokerage) + inheritance-related business • Net fee income increased by 658 million yen as compared to the previous fiscal year, to 9,901 million yen. • Revenues related to assets in custody remained favorable, and, in “Other,” there were contribution form factors such as an increase in the housing loan handling fees. 33 Chugin Financial Group, Inc.
[Corporate solution-related revenues] • Revenues in 1H FY2023 decreased year on year due to a fallback after a significant growth of derivative revenues from customers recorded in the previous fiscal year. • It is our policy to continue to strengthen consulting sales activities in accordance with management issues relating to customers. 34 Chugin Financial Group, Inc.
[Breakdown of revenues related to assets in custody] (million yen) *1: A total of operating revenues for Securities and Asset Management (after deducting internal transactions) • Revenues related to assets in custody increased robustly in 1H FY2023 due to the favorable market environment and expansion of group-wide collaboration. Revenues of the entire FG increased by 460 million yen year on year. 35
Chugin Financial Group, Inc. Expenses totaled 26.0 billion yen, up 0.7 billion year on year. The main reason for the increase in “other property expenses” was the business management fee paid to the FG (which is offset for consolidated expenses for the FG). • The entire expenses are controlled by reducing recurring costs while making personnel investments (bonuses, wage raise, etc.) and DX investments. 36

[Credit costs]
(billion yen) [Non-performing loans (NPL) (Loans disclosed under the Financial Revitalization Act)] (billion yen) Provision of specific allowance Provision of general allowance for loan losses for loan losses ■ Other credit costs* *Other credit costs: = Writing off of loans, allowance for credit to specific foreign borrowers, allowance for loss on sale of loans, loss ■ Calculation method of general allowance for loan losses • The expected loss rate is calculated based on the actual loan loss rates for three consecutive calculation periods, with one period being three years. (Each calculation period is moved a half year forward.) • The expected loss rate shall be either the "most recent three-period average" or the "most recent five-period average," or the "long-term average starting from the fiscal year ended in September 2008," whichever is larger (changed from the fiscal year ended September 2022). • Loans to healthy accounts and substandard accounts are adjusted by taking into consideration the average remaining period of the receivables. . Credit costs totaled 3.6 billion yen, up 2.3 billion yen from the previous fiscal year. The main cause for this was an increase in general allowance for loan losses associated with accumulation of the loan balance. The NPL ratio remained low (1% level). . End of Sep. 2022End of Mar. 2023End of Sep. 2023 *The Chugoku Bank does not carry out partial direct write-offs. 37
[Capital adequacy ratio] End of Sep. 2022 End of Mar. 2023 End of Sep. 2023 [Status of capital adequacy (consolidated for the FG)]
• The total capital adequacy increased by 9.8 billion yen from the end of the previous fiscal year due in part to steady increase in profits. • Risk assets increased by 305.0 billion yen from the end of the previous fiscal year due to an increase in loans to local businesses, personal loans, etc., resulting in a decline in the total capital adequacy ratio. (%) 38
Chugin Financial Group, Inc. takes into account cancellations. Investment trusts are based on net assets (including defined contribution pensions). • Deposits + NCD have been increasing steadily for both retail and corporate clients, while the trends in securement of on-hand liquidity, spending restraints, etc. due to the COVID-19 pandemic have been subsiding.
headquarters: Non-Japanese loans and SF centers • Total loans increased by 5.8% per annum. • Local development loans increased by 4.5% per annum due to strengthened sales activities to expand the regional share. Active efforts toward sustainable finance have also been made. • Personal loans, mainly housing loans, performed robustly as well. 40
[Average balance of securities]
investment trusts • The average securities balance decreased by 69.7 billion yen year on year due mainly to a decrease in yen bonds. • With an eye on the normalization of the financial policy, the yen- and foreign-currency durations are shortened by reducing the interest rate risk amount for the time being. 41 Chugin Financial Group, Inc. This material contains forward-looking statements. These statements do not guarantee our future business performance and include risks and uncertainties. It should be noted that future performance may differ from the targets mentioned herein due to changes in the management environment and other factors. For inquiries regarding this document, please contact: Management Planning Department, Chugin Financial Group, Inc. (Shimizu or Matsuo) TEL: +81-86-234-6519 Email: souki01 @chugin.jp