The Juroku Bank 29th Financial Results Briefing

Transcription

1 The Juroku Bank 29th Financial Results Briefing (TSE Code: 8356) [Fiscal year ending in March 2017] May 31, 2017

2 Table of Contents Section I Overview of Financial Results for FY3/17 Overview of financial results for FY3/17 4 Key data (deposits, etc.) 5 Key data (loans) 6 Key data (individual client assets on deposit) 7 Key data (marketable securities) 8 Credit costs and non-performing loans 9 Capital policy 10 FY3/18 earnings forecasts 11 Section II 14 th Medium-Term Management Plan Summary of the 13 th medium-term management plan 13 Overview of the 14 th medium-term management plan 14 Strategy mapping and numerical targets 15 Six basic strategies 16 Description of earnings forecasts and other future developments is based on information currently held by the Bank and a certain level of assumption that is considered to be rational. Actual business performance, etc. could be significantly different due to a variety of factors. 2

3 Section I: Overview of Financial Results for FY3/17

4 Overview of Financial Results for FY3/17 ~Consolidated and non-consolidated~ Non-consolidated No Calculation formula *Net income from shareholders of the parent company FY3/16 FY3/17 Change (year-on-year) 1 Gross operating profit [3+4+5] (Core gross operating profit) [1-6] (651) (616) ( 35) 3 Net interest income Fees and commissions Other operating profit Gains / losses on JGBs and other debt 6 securities Expenses Personnel expenses Non-personnel expenses Taxes Net business profit [1-7] Net core operating profit [2-7] Net operating profit [11-15] Credit costs [ ] Provision of general loan-loss reserves Write-downs of non-performing loans Gain on reversal of loan loss reserves Gain on collection of written-off loans Gain on reversal of contingent loss - 20 Gains / losses on equities Other extraordinary gains / losses Investment trust financing expenses Ordinary profit [ ] Extraordinary gains / losses Net income before taxes [23+24] Total income taxes Net income [25-26] Consolidated FY3/ (683) *100 Overview of non-consolidated results Gross operating profit Gross operating profit fell by 14.4 billion yen year-on-year to 56.7 billion yen, due mainly to a decline in gains / losses on JGBs and other debt securities as a result of review on the marketable securities portfolio. Ordinary profit Net business profit fell by 7.1 billion yen year-on-year to 11.9 billion yen despite a decline in non-personnel expenses and an increase in gains / losses on equities. Net income Net income totaled at 9.1 billion yen. 4

5 Key data (deposits, etc.) The amount of total deposits grew by 2.2% with deposits from individuals increasing solidly, and deposits from businesses also made a positive turn, while efforts were made to reduce fund procurement costs. Transition in deposits Indivi duals Busin esses Public-sector, etc. 53,874 53,502 54,686 Deposits by region Gifu Prefecture Aichi Prefecture Others Transition of average contract interest rates for month of yen deposits (Unit:%) FY3/15 FY3/16 FY3/17 FY3/15 FY3/16 FY3/17 The acquisition of fund inflow pipelines, e.g. salary / pension remittance accounts, solidly increased fluid deposits, achieving an increase in deposits from individuals. Deposits from businesses also grew despite scaling down fund procurement spending. By region, deposits in Aichi Prefecture achieved an upturn. FY9/14 FY3/15 FY9/15 FY3/16 FY9/16 FY3/17 5

6 Key data (loans) The total amount of loans grew 2.4% to top 4 trillion yen, thanks to a solid increase in personal loans and recovery in loans to SMEs. Transition of loans by sector 38,656 Business loans , ,011 Personal loans Public-sector ,404 YoY change in business loan balance by company size Businesses = Large / mid-sized companies + SMEs FY3/15 FY3/16 FY3/17 Second consecutive year of growth for SMEs Solid performance in personal loans Annualized growth of loan balance by region (Unit:%) FY3/15 FY3/16 FY3/17 Gifu Aichi Prefecture Prefecture Large / mid-size companies Transition of home loan balance by region Gifu Prefecture +1,256 13,070 SMEs Individuals Public-sector loans +1,041 Aichi Prefecture 14,326 Others +1, , FY9/14 FY3/15 FY9/15 FY3/16 FY9/16 FY3/17 FY3/15 FY3/16 FY3/17 6

7 Key data (individual client assets on deposit) The amount of individual client assets on deposit rose by 67.1 billion yen to 4,344.4 billion yen. Transition of individual client assets on deposit Balance of individual deposits 42, Balance of other client assets 42, ,444 Transition of investment- and insurance-related fees and commissions (Unit: million yen) Investment-related fees and commissions Insurance-related fees and commissions FY9/14 FY3/15 Transition of the balance of other client assets on deposit FY9/15 FY3/16 FY9/16 FY3/17 FY3/15 FY3/16 FY3/17 Year-onyear FY3/15 FY3/16 FY3/17 (A) (B) (C) (C)-(B) Investment trust 1,868 1,761 1, Personal pension insurance, etc. 4,241 4,708 4, Public bonds Total 6,662 6,698 6,

8 Key data (marketable securities) The proportion of foreign bonds and long-term Japanese government bonds in the portfolio was reduced to secure flexibility and mobility in future fund management. Transition of the balance of marketable securities Shares Others 16,626 Japanese government bonds 17,958 4,529 13,429 Basic policy of fund management in FY2017 Maximize revenues within the scope of risk tolerance. Pursue income yield and capital yield from mid-term perspectives. Distribute risks to optimize the risk return balance. Maintain a certain level of fluidity to dynamically address any change in market trends. Valuation gains and losses for marketable securities (Unit: 100 million yen) FY3/ Valuation gains / +2,158 losses 債券評価損益 on bonds 1,099 FY3/16 Valuation gains / losses on shares 921 2, ,084 FY3/17 Valuation gains / losses on other securities 670 Fund management environment in FY2017 Low interest level despite the initial outlook of an upturn from the global trend of low interest rate amidst concerns of U.S. interest hike and the scale-down of financial deregulations in Japan / Europe. Risk-distributed fund management リスク分散運用 Make use of stable inverse correlation between interest rate assets and risk assets (shares, etc.) to control the risk of interest rates rising. Retain bonds, shares, etc., which are in stable inverse correlation in the mid-term, in a way that has equal level of risks. Focus mainly on bond yields (income yield + rolldown yield) while covering a decline in bond values, attributable to interest rate hike (expansion of valuation losses) with the increase in risk asset values (expansion of valuation gains). FY3/15 FY3/16 FY3/17 8

9 Credit costs and non-performing loans The ratio of non-performing loans dipped below 2% at 1.97% as of the end of March Transition of credit costs H27/3 FY3/15 H28/3 FY3/16 FY3/17 H29/3 Credit costs ( ) Provision of general loan loss reserves (gain on reversal) Write-downs of non-performing loans Loans written off Provisions for specific loan loss reserves Losses on bulk sales Other Gain on reversal of loan loss reserves Gain on collection of written-off loans Gain on reversal of contingent loss (Unit: million yen) Transition of non-performing loans (Financial Revitalization Law basis) 1,122 Write-downs of non-performing loans by sector 1,038 FY3/15 FY3/16 FY3/17 Loans to bankrupt and quasi-bankrupted borrowers Doubtful loans Loans requiring monitoring Non-performing loan ratio 804 (Unit:%) Manufacturing Construction Retail / Real estate Services / wholesale other FY3/15 FY3/16 FY3/17 9

10 Capital policy Dividends Offering the 140 th anniversary commemorative dividends in mid-year in FY2017, and planning a dividend increase of 1 yen per share 9/15 Term 3/16 Term 9/16 Term 3/17 Term 9/17 Term (plan) Dividend per share 3.5 yen 3.5 yen 3.5 yen 3.5 yen 4.5 yen (+1.0 yen) 140 th anniversary commemorative dividend Transition of equity The equity ratio as of the end of March 2017 (consolidated) stood at 9.88%, or 8.84% on a full implementation basis. 5,000 4, Equity Equity ratio Full implementation basis (Unit:%) Improvement in quality of capital Subordinated financing was reduced by 48 billion yen (from the end of March 2011 to the end of March 2017) Eight billion yen of subordinated financing was repaid in advance in FY3/17. Transition of equity (Non-consolidated) 3,000 2,500 Preferred shares Excluding preferred shares / subordinated financing Subordinated financing 2,785 2, ,710 2,739 2,729 2,525 2,393 3, ,000 2,000 1,000 2,739 2,789 2,729 3,000 3,057 2, ,500 1,000 1,945 1,963 2,195 2,304 2,500 2,559 2,629 Base II Basel III 0 FY3/16 (non-consolidated) FY9/16 (non-consolidated) FY3/17 (non-consolidated) FY3/16 (Consolidated) FY9/16 (Consolidated) FY3/17 (Consolidated) H23/3 FY3/12 H24/3 FY3/13 H25/3 FY3/14 H26/3 FY3/15 H27/3 FY3/16 H28/3 FY3/17 H29/3 FY3/11 Due to be repaid on December 21,

11 FY3/18 Earnings Forecasts ~Consolidated and non-consolidated~ Non-consolidated Consolidated No Calculation formula FY3/17 (actual) FY3/18 (forecast) Change (YoY) FY3/18 (forecast) Full-year forecast for FY3/18 1 Gross operating profit [3+4+5] (Core gross operating profit) [1-6] (616) (589) 27 3 Net interest income Fees and commissions Other operating profit Gains / losses on JGBs and other debt securities Expenses Personnel expenses Non-personnel expenses Taxes Net business profit [1-7] Net core operating profit [2-7] Net operating profit [11-15] Credit costs [ ] Provision of general loan-loss reserves Write-downs of non-performing loans Gain on reversal of loan loss reserves Gain on collection of written-off loans Gain on reversal of contingent loss - 20 Gains / losses on equities Other extraordinary gains / losses Investment trust financing expenses Ordinary profit [ ] Extraordinary gains / losses Net income before taxes [23+24] Non-consolidated Ordinary profit Net income Consolidated Ordinary profit Net income attributable to owners of the parent 11 billion 8.2 billion 13.5 billion 9 billion 26 Total income taxes Net income [25-26] *Net income from shareholders of the parent company *90 11

12 Section II: 14 th Medium-Term Management Plan

13 Summary of the 13 th Medium-Term Management Plan Main topics Corporate value 12 th Medium-Term Management Plan Emergence of merger s cost synergy 50 branches in Aichi 5 trillion yen in deposits 13 th Medium-Term Management Plan Customer-oriented approach in improving service quality Strengthening contact points with customers Reforming business operations from customers perspectives Growth strategy centered around Aichi Outcome Achieving 4 trillion yen in loans with Aichi-centric strategy Opening offices in Singapore and Bangkok Opening two currency exchange shops All-day fee-free ATMs for Juroku transactions Launching Holiday Juroku services for public holidays 14 th Medium-Term Management Plan launched April 2011 April 2014 April 2017 Numerical targets and achievement status Growth potential (customer base) Earning capability Financial soundness Targets Deposit balance 5,600.bn 5,155.4bn 5,468.6bn Number of retail borrowers Net income Core equity ratio Ratio of credit cost to total loans 100, bn 8.8%+ Less than 0.2% Start of plan 97, bn 8.66% 0.09% Achievement status 112, bn 8.57% 0.07% 13

14 Overview of the 14 th Medium-Term Management Plan Title All For Your Smile ~2nd Stage~ Period Period: From April 2017 to March 2020 (3 years) Long-term vision Financial group that is needed by customers and grows with customers Basic policy Business model Ensuring customer-oriented approach Succeeding the stance of the 13th Medium-Term Management Plan Exploring core business operations deeper and taking on fresh income-generating opportunities Responding to changes in external environment speedily Transforming the business model to create a positive cycle of Contributing to the growth of customers and local economy and Building a stable and indefinite revenue-generating structure to support local communities Action base Engagement First Prioritizing the establishment of a strong trusting relationship with customers Six strategies for fulfilling the plan 14

15 Strategy mapping and numerical targets Strategy mapping Rationalizing / streamlining Improving management efficiency to survive competition Accelerating business reform Slimming down head office organization Achieving efficient branch operation Improving organizational strength Helping each employee improve performance HR development Work style reform Sales stance of sincerely tackling customers diverse needs and tasks Expanding contact points with customers and offering solutions above and beyond expectations Business customers 法人 Individual customers Improving problem-solving capacity through bi-directional communication Supporting the improvement of corporate values based on business viability evaluation Offering financial intermediary functions to local SMEs Providing support according to their growth stage Offering goods / services according to customers life stages to explore their needs Offering consultation functions Enhancing and expanding goods and services on offer (unsecured loans without involving face-to-face consultation, etc.) Improving channel functions SME loans Non-interest income Personal loans FY2019 targets Earning capability Growth potential (customer base) Financial soundness Long-term targets Item FY2016 results Targets Net income (consolidated) 10bn 10bn Community presence (daily-average deposits +daily-average loans) Daily-average deposits Daily-average loans Equity ratio (consolidated) Full implementation basis 9,350.1bn 5,410.8bn 3,939.3bn 10,000bn 5,700bn 4,300bn 8.84% Around 8.7% Item FY2016 result Target Earning capability ROE (consolidated) 3.0% 5%+ 15

16 Six basic strategies Strategy 1 Expanding contact points with customers and offering solutions above and beyond expectations Strategy 2 Actively getting involved in community tasks Strategy 3 Building strategies by region Strategy 4 Improving fund management capacity Strategy 5 Improving management efficiency to survive competition Strategy 6 Helping each employee improve performance 16

17 Strategy 1 Expanding contact points with customers and offering solutions above and beyond expectations Full introduction of the activity evaluation system Substantially revising the previous performance evaluation system Overview of the activity evaluation system Business model innovation Establishing the Sales Activity Guideline for activity evaluation as the basic principles of all sales activities Evaluating sales branches qualitatively according to sales branch activity evaluation criteria Examining the rate of achievement against key data in block evaluation Introducing the head office activity evaluation criteria as the criteria for evaluating the activities of head office departments in support of sales branch activities based on the sales branch activity evaluation criteria 営業店 Sales branches Block Head office Sales branch activity evaluation Defining the number of items and their balance so that they are easy to understand for sales branches Sales-related items + Administration-related items + Unique items Clarifying subject activities and quantifying evaluation indicators Clearly showing items related to benchmarking Engagement award Recognizing not only standalone cases but also good practice activities that an entire branch has worked on steadily Block activity evaluation Key data Evaluating the rate of achievement Head office activity evaluation Focusing on supporting sales branch activities Clearly showing items related to benchmarking Customer-oriented business administration 17

18 Strategy 1-2 Specific details of activity evaluation criteria Sales branch activity evaluation criteria (excerpts) No Item Department in charge Activity evaluation criteria 2 Sales stance Sales Management Division / Aichi Sales Division Working on strengthening relationship with clients to turn them into main accounts? Details 10 Sales stance Individual Customers Sales Department Establishing a consulting sales structure in deposit asset sales? 21 Sales stance Business Customers Sales Department Engaging in in-depth dialogs with customers to identify true tasks / needs in offering solutions? Sales branch activity evaluation criteria (No.10) Activity evaluation criteria (detail) Attentively listening to customers life plan and stance to identify their needs and tasks, and offering products that help solve the tasks Using an achievement level checklists (held by all Fas, accounts staff, liaison staff, etc.) for skills and HR development Conducting study sessions and leads meetings as appropriate to boost all qualified sales representatives knowledge level and motivation, while making efforts to offer optimum products Setting and managing targets that suit own branch s characteristics, market and actual conditions concerning deposit assets to maintain / boost branch workers motivation and achieve customer satisfaction Sales branch activity evaluation criteria (No.21) Activity evaluation criteria (detail) Actively grasping clients business succession policy and working with the head office to ensure smooth business succession Identifying client companies retirement benefit / pension scheme and offering a defined-contribution business pension plan Offering a means of payment clearance other than checks (electronic settlement, batch settlement system) Accurately grasping clients management tasks and needs and providing information about functions, seminars, etc. offered by Juroku Bank affiliates Evaluation indicators <Voluntary targets on deposit asset sales and their results> Evaluating difficulty, progress and PDCA <Skills and HR development> Evaluating the status of utilizing the achievement level checklist <Post-sales follow-up> Evaluating the number of clients with deposit assets followed up after sales and the number of seminars held Evaluation indicators Number of business succession consultation sheets submitted (evaluating the number of effective consultation cases) Number of retirement benefit / pension scheme consultation request forms collected Number of new electronic settlement transactions Number of information communication tables, etc. 18

19 Strategy 1-3 Offering solutions above and beyond expectations (Supplier search service 1) Outstanding results based on Juroku Bank s original benchmark Supplier Search Service (trademark registered in January 2017) Juroku Bank finds buyers and identifies their needs / tasks. Juroku Bank uses its network of branches to identify suppliers that meet the needs. Buyers screen documents to select suppliers. Past results Catering to the following types of supplier search needs Buyer Buyer 3,000 2,500 2,000 1,500 1, Requesting business meetings with potential suppliers ,044 Entry 1,981 Seller Supplier Supplier 2,853 2, H24/3 FY3/13 H25/3 FY3/14 H26/3 H27/3 FY3/16 H28/3 H29/3 FY3/17 FY3/12 Juroku Bank Cumulative number of business discussions Cumulative number of business matching meetings arranged 78 FY3/15 Supplier Each buyer receives proposals from multiple suppliers. A business deal is struck highly accurately. Finding a supplier capable of handling difficult processing work Arranging multi-vendor procurement with two / three suppliers Finding a supplier capable of handling small-lot production or prototype production Finding a flexible supplier located nearby Finding a new development partner Finding a partner to enter into a new business field 19

20 Strategy 1-3 Offering solutions above and beyond expectations (Supplier search service 2) Organizing value-added business matching meetings featuring prominent buyers Sample entry form ビジネス商談会 in 社航空機器事業部 名古屋商工会議所 と十六銀行は 特長ある技術や商品を有する地域企業の新たな販路開拓や製品開発を支援するため 社航空機器事業部との商談会を開催します 今回の商談会は 一般的に行われているビジネスフェアのように展示ブースを設ける形ではなく 中小企業が大手企業に対して 自社の技術や製品 サービス等を直接アピールいただける 個別商談会 です 商談会の流れ 商談会概要 日時 会場 バイヤー企業 内容 募集対象企業 商談希望ニーズ 参加費 募集企業数 申込方法 サプライヤー企業の募集 ( エントリー ) バイヤー企業による選抜 商談会 平成 2 年 月 日 ( 水 ) (1 社ごとに時間割を設定しますので 開始時刻は個別にご連絡いたします ) 株式会社 社航空機器事業部 - 市 町 15 株式会社 社航空機器事業部 - 市 町 15 事業内容 : 分析 計測機器 医用機器 航空機器 産業機器の製造航空機器事業部は フライト コントロール システム エアーマネジメント システム コックピット ディスプレイ等を製造しています 自社の技術や製品 サービス等をアピールする 個別面談 形式で実施します バイヤー企業が提案を希望する事業分野の商品 商材 技術等を有する 以下の企業さま 十六銀行のお取引先企業さま 名古屋商工会議所の会員企業さま 事前のエントリーが必要です 商談会参加企業は お申込時にご提出いただいたエントリーシートに基づき バイヤー企業が選考し決定します 裏面のとおり 無料 10 社程度 エントリーシートをご記入のうえ 会社案内 設備一覧を添付し 十六銀行各支店にお申込みください エントリーシートは 十六銀行ホームページからダウンロードできます 申込期限平成 2 年 月 日 ( 金 ) 備考 面談のみの商談会ですので ブース等のご準備は不要です 参加企業の希望分野と合致しない場合 事前にお断りすることがございます 本件に関するバイヤー企業への直接のご連絡はご遠慮ください Main buyers that have used the service in recent years Collaborating with the Ministry of Economy, Trade and Industry as well as local governments Offering business matching opportunities (Examples) Company S Manufacturing flight control systems Company K Manufacturing titanium materials and parts Company M Aircraft engine parts Company A Manufacturing equipment Company B Manufacturing turbine engines Business meeting with aircraft engine manufacturers Analysis on the supplier search service Results of monitoring and analyzing the trading status of participating companies 1. Loan balance is durable, maintaining or increasing the level. 2. Loan balance tends to increase when the number of participations is high. Secondary effects 1. Allowing buyer staff in charge to gain in-depth understanding of suppliers, thereby boosting their skills 2. Allowing buyer companies to accumulate information about supplier evaluation, which can be utilized for credit judgment 20

21 Strategy 1-4 Offering solutions optimized to customers stages Performance of business startup support desk (Unit: million yen) Amount of loan execution Business startup support desk established in February (Unit: Case) Number of loans executed ,061 FY3/16 H28/3 FY3/17 H29/3 Performance of M&A fees (Unit: million yen) Actual fees collected Number of M&A cases FY3/15 H27/3 FY3/16 H28/3 FY3/17 H29/3 Business matching fees (Unit: million yen) FY3/15 H27/3 FY3/16 H28/3 FY3/17 H29/ (Unit: Case) Strengthening our support structure in ASEAN nations Office to be set up in Hanoi in February 2018 India Partnership State Bank of India Myanmar Partnership Ayeyarwady Bank Thailand Bangkok Representative Office Partnership Kasikorn Bank Malaysia Partnership CIMB Bank CIMB Investment Bank Singapore Singapore Representative Office China Shanghai Representative Office Partnership: Bank of Communications, Bank of China, Industrial and Commercial Bank of China Hong Kong Hong Kong Representative Office South Korea Partnership SBJ Bank (Shinhan Bank s Japanese subsidiary) Number of overseas suppliers by country (As of the end of March 2017) Overseas offices Business partners Juroku Bank Overseas Support Department Philippines Partnership BDO Unibank Hong Kong office to be shut down by the end of the year Vietnam Partnership Bank for Investment and Development of Vietnam Australia and New Zealand Banking Indonesia Partnership Bank Negara Indonesia Country Number of suppliers Number of suppliers China 534 Malaysia 46 Hong Kong 72 Philippines 43 India 32 Singapore 45 Thailand 253 Myanmar 11 Indonesia 115 ASEAN (other) 13 Vietnam 134 ASEAN total 660 Total 1,298 21

22 Strategy 2 Actively getting involved in community tasks ~Strategic alliances~ Nagoya Bank Hyakugo Bank Hokkoku Bank Fukui Bank First Bank of Toyama Hiroshima Bank Hokkoku Bank San-in Godo Bank Mebuki FG Hyakujushi Bank Nanto Bank Yamaguchi FG Tie-ups with local banks of the three neighboring prefectures in the Tokai region and local banks of the Hokuriku region Joint M&A seminars held by three banks Joint corporate briefing sessions held by three banks Joint business meeting Collaboration agreement for the project to revitalize the tourism industry in the Tokai and Hokuriku regions (Six Stars Tourism Project) Deloitte Tohmatsu Nomura Securities Regional financial institutions Cross-sector tie-ups for fostering venture businesses Universities and research institutes Administration of the venture support organization, NOBUNAGA21 Seminars on revitalizing local economy New Business Plan Support Fund First Stage grants for business entrepreneurs Diverse strategic alliances Collaboration Local governments Business community Tie-up in the IT field, mainly in computer systems Establishment of the Infrastructure Council for project financing Launch of the Chance FinTech Lab Establishment of the energy fund Wide-area collaboration for offshore business assistance Chambers of commerce and industry and trade associations Mass media Cooperation with regional banks on the Chance project (regional bank integrated services) Tono Shinkin Bank Japan Agricultural Cooperative MEGUMINO Tie-ups with partners in other areas of the financial sector Tie-up with Tono Shinkin Bank to revitalize local communities Support for the project, Gifu, Seiryu no Kuni (the Land of Clear Water) Food and Agriculture Trade Fair Mutual HR exchange with the Japan Agricultural Cooperative MEGUMINO 22

23 Strategy 2 Actively getting involved in community tasks Support for local governments strategy for vitalizing towns, people and jobs, etc. Support to high school students for product development and marketing of Arare rice crackers (Signing ceremony with the Gifu Prefectural Commercial High School ) <Specific content> Targeting commercial high school students who have established the corporate entity (1) PR at a food trade show in Hong Kong (2) Inter-cultural exchange with international students (3) Visit to overseas factories Development of young future leaders for regional regeneration Presenting Touch-and-Talk communication sheet for international visitors to multiple local governments (Communication using the sheet in Takayama City, Gifu Prefecture) Situational phrases for restaurants, accommodation, shopping and taxis in English, Korean and Chinese Inbound tourism support for welcoming visitors Revitalizing local economy through support for regional companies Marketing support for Gifu s local produces at Nagoya Mitsukoshi department store This collaboration with a department store was a rare tie-up of this kind even on a national level. The event attracted over 20,000 visitors over four days. The Mitsukoshi Isetan Group is to sell the products based on the project stance and consumers response. (Market event at the Aeon Mall Tokoname) Support for the sale of Gifu s local produce with NEXCO Central Japan x Gifu University (Workshop held prior to the business talk session) This was a rare initiative of arranging a business talk session so that 45 local businesses could promote their merchandizes, e.g. food items and handicrafts, to tenants of highway service areas (SA) and parking areas (PA) in the prefecture. Opinions from university students were gathered in a workshop ahead of the event to enhance the relevance of the session. Unconventional cross-sector collaboration for activity supporting local companies 23

24 Strategy 5 Improving management efficiency to survive competition ~Rationalizing and streamlining~ Improving management efficiency Accelerating business reforms Eliminating hardcopy applications / submissions and the use of seals Expanding administration concentration at the head office (eliminating back office administration) Eliminating the use of paper (and the use of safe / document storage) Streamlining loan / public relations duties for faster work Building an efficient branch operation structure for sales reform Single-line completion process Concentration of back office work at the head office Streamlining branch operations in view of demographics Adopting branch operations specializing in sales (administration with minimal personnel) Considering opening branches in regions of anticipated growth Reinforcement of sales workforce and expansion of business hours Streamlining head office organization (organizational reform) Further optimizing personnel allocation and workforce Actual and planned figures of amended OHR Top-line reinforcement (Unit: %) Amended OHR Toward 60% OHR improvement FY3/15 (actual) FY3/16 (actual) FY3/17 (actual) FY3/18 (plan) FY3/19 (plan) FY3/20 (plan) 24

25 Strategy 6 Helping each employee improve performance HR education reform Two-week new recruit training program Expanding it to 3 months Work style reform Forcible computer shutdown at the end of business hours Addressing diversifying bank operations Reinforcing workers capabilities prior to assignment Enhancing stress resistance through trial and error (Zazen meditation training) Computers are forcibly shut down after an alert message is displayed every Wednesday, the second and third Friday of each month and during Early Finish week, targeting some 1,000 head office workers. Empowerment of women and other diverse human resources Recruiting high-performing non-japanese workers for organizational revitalization Career-course new graduate recruits for FY2016 (Left) Ms. Chu of the head office s sales division (Right) Mr. Cho of the Nagoya sales department Publication of overtime data and ranking on the Intranet The visualization approach makes managers and the rest of the workforce keenly aware of the need to cut back on overtime. SAMPLE 平均退行時刻 Average leaving work time 時間外勤務時間数 Over time hours Branch 店名 name 時刻 Time Ranking 順位 代理 Deputy 一般男性 Male employee Female employee 一般女性一人当たり Per person Ranking 順位 A Branch 支店 18: :45 7:46 10:56 25 B Branch 支店 18: :23 16:23 5:08 12:26 35 C Branch 支店 19: :33 16:55 3:21 11:21 27 D Branch 支店 19: :42 21:20 15:12 20: E Branch 支店 19: :05 24:30 10:47 18: F Branch 支店 17: :50 2:15 4:10 4 G Branch 支店 19: :03 24:08 19:11 25: H Branch 支店 19: :05 21:45 16:23 20: Numerical targets for women s empowerment and actual status (vs. FY2014) Shortening total working hours, streamlining work operations and ensuring correct work-life balance 1 87 women in assistant management positions or above To be doubled to 174 women by the end of FY women as of the end of March 2017 (+27 women in 2 years, up approx. 30%) 2 The ratio of women in leader positions or above to be raised to 20% by the end of FY % as of the end of March 2017 (240 women / 1,355 men) * Leader positions or above refers to those in assistant management positions plus administrative leaders and FA leaders. <As of April 3, 2017> 25

26 Thank you for reading. Improving management efficiency to survive competition Ensuring customeroriented approach Basic Policy Exploring core business operations deeper Taking on new revenue-generating opportunities Addressing changes of external environment swiftly Building strategies by region Engagement First Helping each employee improve performance Expanding contact points with customers Offering solutions above and beyond expectations Actively getting involved in community tasks Improving fund management capacity Contributing to the growth of customers and local economy Positive cycle Building a stable and indefinite revenue-generating structure to support local communities Long-term vision Financial group that is needed by customers and grows with customers