Financial Results for FY2017
May 23, 2018
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation
(Tokyo Stock Exchange First Section: 8331) The 13th Medium Term Management Plan Table of Contents Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Summary of Financial Results Business Strategies Summary of Financial Results 3 Loans for Corporate Customers (1) 16 Net Interest Income 4 Loans for Corporate Customers (2) 17 Deposit and Loan Portfolios 5 Loans to Real Estate Leasing Sector (1) 18 Securities Portfolio 6 Loans to Real Estate Leasing Sector (2) 19 Net Fees and Commissions Income 7 Housing Loans 20 Expenses 8 Unsecured Consumer Loans 21 Net Credit Costs 9 Group Total Balance of Financial Products 22 Earnings Projections 10 Trust Business and Inheritance-related Services 23 International Business 24 Medium Term Management Plan and Chiba-Musashino Alliance 25 Environment Awareness TSUBASA Alliance 26 Summary of Medium Term Management Plan 12 TSUBASA FinTech Platform 27 Progress toward Numerical Targets in the Plan 13 Economic Environment 14 Initiatives Aimed at Efficiency and Productivity Enhancement Improved Work Efficiency and Personnel Strategy 29 Branch Network Strategy 30
ESG and Capital Policy 31
ESG (1) 32 ESG (2) 33 Capital Policy (1) 34 Capital Policy (2) 35
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 1 The 13th Medium Term Management Plan Best Bank 2020
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Summary of Financial Results
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 2 The 13th Medium Term Management Plan Summary of Financial Results Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Non-consolidated Non-consolidated gross business profits (¥Bil.) 2017/3 2018/3 Change 160 Gross business profits 144.0 149.4 5.3 151.7 150.0 149.4 p.4 Net interest income 121.1 121.5 0.3 (¥Bil.) 144.0 Net fees and commissions income 19.1 23.7 4.6 p.7 140 19.2 19.0 23.7 Trading income 2.5 2.0 -0.5 Net fees and 19.1 Profit from other business transactions 1.2 2.1 0.9 commissions income Gains (losses) related to bonds -1.1 -0.5 0.5 120 126.0 125.4 Expenses（-） 83.1 82.8 -0.2 p.8 121.1 121.5 Real net business income 60.9 66.5 5.5 Net interest income Core net business income 62.1 67.1 4.9 100 Net transfer to general allowance for loan losses (-) - - - p.9 2015/3 2016/3 2017/3 2018/3 Net business income 60.9 66.5 5.5 Non-recurrent income and losses 9.0 4.0 -4.9 Key Points of FY2017 results Disposal of non-performing loans (-) -3.7 0.8 4.5 p.9 Gains (losses) related to stocks, etc. 1.5 1.6 0.0 Ordinary profit 70.0 70.6 0.6 Owing to an increase in net interest income and net fees and commissions income, gross business profits Extraordinary income (loss) -1.0 -1.3 -0.3 increased by ¥5.3Bil. YoY Profit 48.6 49.6 1.0 Some foreign securities, etc. were sold to improve the portfolio (¥3.0Bil. in loss due to sale, etc.) Net credit costs（-） -3.7 0.8 4.5 p.9 Expenses controlled at target level Consolidated Secured non-consolidated profit and profit (¥Bil.) 2017/3 2018/3 Change attributable to owners of parent at the third highest Ordinary profit 77.6 78.4 0.8 level ever Profit attributable to owners of parent 52.7 53.7 1.0 The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 3 The 13th Medium Term Management Plan Net Interest Income Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Firm increase in domestic loans and marginal yield declined at a slower pace
Average balance and yield of domestic loans (¥Bil.) 2017/3 2018/3 Change -10 bp -8 bp Net interest income 121.1 121.5 0.3 10,000 (¥Bil.) 1.26% 1.16% 1.07% Domestic 115.9 116.6 0.7 9,500 Loans and deposits 98.8 97.0 -1.7 9,093.1 Loans 100.1 98.0 -2.0 9,000 Deposits（-） 1.3 0.9 -0.3 8,631.0 +5.3% 8,500 Securities 17.0 19.3 2.2 8,290.5 +4.1% +3.3% Bonds 5.4 3.9 -1.5 8,000 Stocks 6.9 8.0 1.1 2016/3 2017/3 2018/3 Investment trusts (dividends) 3.3 3.9 0.6 Domestic net interest income Investment trusts (sold) 1.3 3.3 1.9 1.30 (quarterly comparison) International 5.2 4.8 -0.3 (%) 1.20 Loans and deposits 2.6 4.5 1.9 1.25 1.19 1.09 1.08 Loans 5.7 8.9 3.1 1.07 1.06 1.10 1.16 1.15 1.13 Deposits（-） 3.1 4.3 1.2 1.00 Bonds 10.6 9.4 -1.2
Bonds（-） 8.0 9.1 1.0 0.90 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016/3 2017/3 2018/3
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 4 The 13th Medium Term Management Plan Deposit and Loan Portfolios Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
SME loans, housing loans and unsecured consumer loans growth remain strong
2017/3 2018/3 SME loans (¥Bil.) Change % 5,000 (¥Bil.) 4,410.9 Deposits 11,565.7 12,017.0 451.2 3.9% 4,141.6 Domestic deposits 11,116.2 11,604.1 487.9 4.3% 3,786.6 +6.5% 4,000 3,583.9 Personal deposits 3,383.8 +9.3% 8,350.3 8,660.6 310.2 3.7% +5.6% +5.9% 3,000 2017/3 2018/3 Change (¥Bil.) % 2014/3 2015/3 2016/3 2017/3 2018/3 Loans 9,305.3 9,816.0 510.6 5.4% Domestic loans 9,115.8 9,606.1 490.2 5.3% Housing Loans 3,500 3,431.1 ex. Public sector 8,912.2 9,388.2 476.0 5.3% 3,281.7 (¥Bil.) 3,140.5 +4.5% Corporate loans 5,491.2 5,803.7 312.4 5.6% 3,016.3 +4.4% 3,000 2,881.7 Large corporates 1,349.6 1,392.7 43.1 3.1% +4.1% +4.6% SMEs 4,141.6 4,410.9 269.3 6.5% Consumer loans 3,420.9 3,584.5 163.6 4.7% 2,500 2014/3 2015/3 2016/3 2017/3 2018/3 Housing loans 3,281.7 3,431.1 149.3 4.5%
Unsecured consumer loans 126.3 142.2 15.8 12.5% Unsecured Consumer Loans 150 142.2 Public sector 203.6 217.8 14.1 6.9% (¥Bil.) 126.3 +12.5% 120 107.8 Domestic loans 9,115.8 9,606.1 490.2 5.3% +17.1% Branches in Chiba 6,536.4 6,797.6 261.2 3.9% 89.5 +20.3% 90 77.0 Branches outside Chiba 2,579.4 2,808.4 229.0 8.8% +16.3%
Special Branches* 1,395.5 1,461.2 65.7 4.7% 60 Retail Branches 1,183.8 1,347.1 163.2 13.7% 2014/3 2015/3 2016/3 2017/3 2018/3 The 13th Medium Term Management Plan Best Bank 2020 *Tokyo Head Office, Shinjuku Branch and Osaka Branch Final Stage - 3 years of value co-creation 5 The 13th Medium Term Management Plan Securities Portfolio Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Controlling interest rate risk while diversifying investment
Balance of securities at term-end* Duration of securities* *After hedging with asset swaps *Excluding unrealized gains (losses) 5 2,500 (Year) Yen bonds Foreign bonds 2,308.8 3.6 (¥Bil.) 4 3.5 3.5 2,187.6 2,226.4 3.2 2,092.7 2.9 3 Foreign currency 1,995.6 mismatch ratio 2,000 [YoY] 48％ 34％ 651.9 821.1 Government 2 2.3 2.4 871.9 446.9 bonds 2.2 -31.4% 1.8 1 1.6 972.9 1,500 2014/3 2015/3 2016/3 2017/3 2018/3
Corporate Unrealized gains (losses) on other securities* bonds etc. 230 *Including overseas CDs 646.6 765.1 771.8 +0.8% (¥Bil.) 168.1 1,000 585.4 161.0 170 147.1 Investment 25.1 139.0 10.6 9.3 Unrealized gains 556.4 trusts, etc. 3.1 12.6 10.8 (deferred hedge) 172.1 14.4 12.8 203.5 +28.7% 2.5 on derivatives 110 20.9 +3.5 118.9 261.9 86.2 119.3 Stocks 122.6 122.7 11.5 500 95.0 -5.8% 115.5 10.4 144.1 124.0 128.9 124.0 Net unrealized 50 101.2 gains Foreign 549.4 65.1 +0.4 488.6 483.1 bonds 344.1 399.3 ↑ Gains -17.3% -1.0 -2.3 -3.0 -10 2014/3 2015/3 2016/3 2017/3 2018/3 0 2014/3 2015/3 2016/3 2017/3 2018/3 ↓ Losses Others Foreign bonds Yen bonds Stocks The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 6 The 13th Medium Term Management Plan Net Fees and Commissions Income Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Solution-related fees from corporate customers brought large increase in net fees and commissions income Solution-related fees from corporate customers 2017/3 2018/3 (¥Bil.) Change (Private placement bonds, syndicated loans, etc., M&A, business matching, inheritance-related services and others) Net fees and commissions income 19.1 23.7 4.6 10 9.0 (¥Bil.) Fees and commissions income 39.4 43.4 4.0 8 6.8 Fees and commissions payments（-） 20.3 19.7 -0.6 Full year 6
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 7 The 13th Medium Term Management Plan Expenses Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Further improving work efficiency and controlling expenses
2019/3 2017/3 2018/3 OHR (¥Bil.) Change (Projection) Change
Expenses（-） 83.1 82.8 -0.2 83.0 0.1 Ave. of 3 mega group*1: 68% Chiba Bank Personnel（-） 42.1 42.4 0.3 42.2 -0.2 55% < 2 Non-personnel（-） 35.0 34.5 -0.5 34.9 0.3 Ave. of 64 regional banks* : 68%
Tax（-） 5.9 5.9 0.0 5.9 0.0 *1 Expenses ÷ (Consolidated gross business profits - Gains/losses related to bonds) [2018/3]: Calculation based on disclosed information *2 Expenses ÷ (Non-consolidated gross business profits - Gains/losses related to bonds) OHR 57.59% 55.26% -2.32% [2017/9]: Disclosed by Regional Banks Association of Japan
Main factors behind increase/decrease in expenses Strategic investment plan
Strategic investment (3 years) Key details 2018/3 (Actual) 2019/3 (Projection) • Ebisu Branch Total ¥15Bil. (¥Bil.) • TSUBASA FinTech Platform • Improving efficiency of for front-of- Salaries +0.2 Social insurance premium +0.1 branch and in-branch operations Personnel Co-creating customer value 0.3 -0.2 Cost-cutting initiatives -0.3 • Improving efficiency for loan （-） operations etc. ¥7.2Bil.
2018/3 ¥1.7Bil. Realizing work style reform Non- Work style reform +0.1 Work efficiency and digitalization +0.5 for all employees personnel -0.5 Cost-cutting measures -0.5 0.3 Deposit insurance fee -0.1 ¥2.7Bil.
（-） Deposit insurance fees -0.3 Cost-cutting initiatives -0.1 2019/3 (plan) ¥3.9Bil. Strengthening a sustainable Business tax ＋0.1 Same as previous term Tax（-） 0.0 0.0 management structure Other tax -0.0 ¥5.1Bil.
2017.4 2018.3 2020.3 The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 8 The 13th Medium Term Management Plan Net Credit Costs Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Maintain a sound loan portfolio through strict credit controls
2019/3 2017/3 2018/3 (¥Bil.) Change （Projection） Change (Note) The total sum of transfer to allowance Net credit costs（-） - 3.7 0.8 4.5 4.5 3.6 for loan losses is expressed as “Reversal of allowance for loan losses”, in the Net transfer to general allowance for loan losses (-) - 0.0 - 3.0 - 3.0 0.3 3.3 case of a reversal. However, it is indicated separately as Net Disposal of non-performing loans（-） - 3.7 3.9 7.6 4.2 0.2 transfer to general allowance for loan losses and Net transfer to specific Write-offs / Net transfer to specific allowances, etc.（-） - 1.6 5.5 7.2 6.2 0.6 allowance for loan losses in the left hand New downgrades（-） 3.9 7.3 3.3 8.0 0.6 table to enable comparison with previous figures. Decreases in collateral value, etc.（-） 0.2 0.2 - 0.0 0.2 0.0 Collections, etc. 5.8 1.9 - 3.8 2.0 0.0 Recoveries of written-off claims 2.0 1.6 - 0.4 2.0 0.3
Net credit cost ratio（-） -4bp 0bp 4bp 4bp 4bp Customer default cases Disposal of non-performing loans 200 159 159 15 (new downgrades) (Cases) (2H 97) (1H 02) (¥Bil.) 150 150 12 7.0 130 7.5 98 9 6.9 110 70 100 (2H 08) 2.8 75 90 69 6 4.5 3.4 4.0 2H 28 19 4.9 70 50 45 (2H 17) 7.5 34 40 3 5.7 5.5 6.1 2.0 50 4.1 4.2 4.0 49 1H 75 1.9 2.3 30 61 0 57 55 20 0 41 42 40 1995 2000 2005 2010 2015 2017 2010 2011 2012 2013 2014 2015 2016 2017 2018 10 19 23 (Projection) The 13th Medium Term Management Plan Best Bank 2020 -10 2010 2011 2012 2013 2014 2015 2016 2017 2018 Final Stage - 3 years of value co-creation 9 （見込） The 13th Medium Term Management Plan Earnings Projections Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Non-consolidated 2019/3 Average balance and 2018/3 (¥Bil.) (Projection) Change yield of domestic loans plan Gross business profits 149.4 152.5 3.0 1.16% 1.07% 1.03% 10,000 Net interest income 121.5 120.8 -0.7 (¥Bil.) Net fees and commissions income 23.7 24.0 0.2 9,500 9,503.8 Trading income 2.0 3.4 1.3 9,093.1
Profit from other business transactions 2.1 4.3 2.1 9,000 8,631.0 Gains (losses) related to bonds -0.5 2.6 3.1 8,500 +4.5% Expenses（-） 82.8 83.0 0.1 increase Real net business income 66.5 69.5 2.9 8,000 Core net business income 67.1 66.9 -0.2 2017/3 2018/3 2019/3 Net transfer to general allowance for loan losses (-) - 0.3 0.3 (Projection) Net business income 66.5 69.2 2.6 Domestic net interest income (YoY) Non-recurrent income and losses 4.0 3.3 -0.7 2019/3 2017/3 2018/3 Disposal of non-performing loans（-） 0.8 4.2 3.3 (projection) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Domestic net Gains (losses) related to stocks, etc. 1.6 4.0 2.3 (¥Bil.) interest reversing Ordinary profit 70.6 72.5 1.8 0.0 -0.2 Extraordinary income (loss) -1.3 -0.7 0.6 -0.4 -0.4 Net credit costs（-） 49.6 51.0 1.3 -0.5 -0.8 Net credit costs（-） 0.8 4.5 3.6 -0.9 2019/3 Consolidated -1.0 -1.2 2018/3 -1.3 (¥Bil.) (Projected) Change -1.4 Ordinary profit 78.4 80.0 1.5 -1.5 Profit attributable to owners of parent 53.7 54.5 0.7 The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 10 The 13th Medium Term Management Plan Best Bank 2020
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Medium Term Management Plan and Environment Awareness
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 11 The 13th Medium Term Management Plan Summary of Medium Term Management Plan Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
A financial group with Best Bank 2020 Best Bank 2020 Final Stage －3 years of value "advancement" －3 years of value co-creation "high productivity" and creation "unwavering Previous medium term New medium term trustworthiness." 2014.4 management plan 2017.3 2017.4 management plan 2020.3 Striving for sustainable growth with the region amidst an increasingly stringent environment
Creating the “Best Retail” “Co-creating value” with a wide banking group* variety of stakeholders *A financial group which provides top-class satisfaction through advanced services and is highly regarded by local customers, both individuals and SMEs. Key issues involved in “Best Bank 2020 Final Stage －3 years of value co-creation”
Co-creating customer value Realizing work style reforms that Strengthening a sustainable allow all employees to shine management structure Further enhancement of initiatives that offer core business support Developing a professional Further strengthen alliances with for business partners based on workforce other banks such as the “Chiba- evaluation of their businesses Promoting further diversity Musashino Alliance” and the and that contribute to regional Review the way individual “TSUBASA Alliance” revitalization employees work to develop a Achieve low-cost operations Extensive focus on “fiduciary structure that allows them to through drastic reviews of duties” in the asset management specialize in business with a high business processes business added-value Positive and pro-active response Creating advanced services with to ESG issues high added-value that utilize FinTech, etc. in response to the digitalization of society as a whole
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 12 The 13th Medium Term Management Plan Progress toward Numerical Targets in the plan Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Profit attributable to owners of parent Consolidated CET1 capital ratio Profit attributable to owners of parent ¥60.0Bil. 65 14 (¥Bil.) (%)
60 13 12.48% Consolidated ROE ¥54.5Bil. (based on total shareholders’ equity) 55 ¥53.7Bil. 12 7% range 50 11
Consolidated CET1 Capital Ratio 45 10 12% range 2016/3 2017/3 2018/3 2019/3 2020/3 2016/3 2017/3 2018/3 2020/3 (Projection) (Target) (Target)
Balance of loans Balance of deposits Balance of Loans ¥10.5Tri. 11 14 (¥Tri.) (¥Tri.) 10 ¥9.8Tri. 13
Balance of Deposits ¥12.0Tri. ¥12.5Tri. 9 12
8 11
Group Total Balance of Financial Products ¥2.5Tri. 7 10 2016/3 2017/3 2018/3 2020/3 2016/3 2017/3 2018/3 2020/3 (Target) (Target) The 13th Medium Term Management Plan Best Bank 2020 * Consolidated ROE ＝ Profit attributable to owners of parent ÷ Total shareholders‘ equity Final Stage - 3 years of value co-creation (Capital stock + Capital surplus + Retained earnings -Treasury shares) 13 The 13th Medium Term Management Plan Economic Environment Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Chiba Prefecture economy remains favorable due to progress in various kinds of projects
Population of Chiba Prefecture 2017 Population Movement Report Major developments in Chiba (Monthly living population (Ministry of Internal Affairs and Joban Expressway survey) Communications) 6.28 Prefecture Net inflows of
百 (Million population people) Tokyo 75,498
6.26 2018 Chiba 16,203 Higashi-Kanto Tokyo- (Joban area) Expressway Saitama 14,923 Gaikan 2017 Expressway 6.24 Kanagawa 13,155
2016 Fukuoka 6,388 Kita-Chiba Road Aichi 4,839 4 3 6.22 2 Osaka 2,961 1 (Bayside Area) (Narita Airport) 2015 Seven cities were among the 6.20 top 20 cities with net inflows of population (highest) Nagareyama-city, Kashiwa-city, Funabashi-city, Chiba-city, Tokyo Bay 6.18 Ichikawa-city, Inzai-city, Matsudo-city Aqua-Line Jan 1月 Apr4月 Jul7月 Oct10 月 (Mobara-niiharu) Hotels Building rush for large logistics facilities (Sodegaura-shiinomori) Logistics facilities Improvement in transport infrastructure Ken-O Commercial Expressway facilities
1. Tokyo-Gaikan Exp. Misatominami IC-Koya JCT E-Commerce One of the largest logistics facilities in Japan (opening planned for June 2018) development 2. Ken-O Exp. Matsuoyokoshiba IC-Taiei JCT by Daiwa House Industry Co., Ltd, (opening planned for FY2024) "DPL Nagareyama" (Nagareyama-shi) 3. Kita-Chiba Rd. Inzai City-Narita City (under construction) 4. Kita-Chiba Rd. Ichikawa City-Kamagaya City (in survey) The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 14 The 13th Medium Term Management Plan Best Bank 2020
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Business strategies
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 15 The 13th Medium Term Management Plan Loans for Corporate Customers (1) Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Strengthening corporate loans, proactive approach to meet client’s need and provide solutions
Balance of SME loans Number of companies using Chiba Bank as a main bank (research by Teikoku Data Bank) +6.5% YoY 4,900.0 21,100 5,000 (Customers) 4,410.9 21,014 (¥Bil.) 20,979 4,141.6 4,000 3,786.6 20,915 20,900 20,828 3,000
20,700 2,000 2014年 2015年 2016年 2017年 2016/3 2017/3 2018/3 2020/3 (Target) PDCA cycle for activities of With-covenant loan scheme evaluation of businesses 2.5 550 600 Initiatives to reinforce our Stable and ongoing (¥Bil.) Cases (right axis) 480 (Cases) propositions establishment of Identification 2.0 • Training by position/theme 401 customer base of issues 1.6 400 Increasing 1.5 customers that 1.2 mainly Evaluation 253 1.0 supported by of business 1.0 Chiba Bank 0.6 200
0.5 Fee income (left axis) Solution • Special recognition for proposals solution proposals 0.0 0 Issue resolution • Sharing examples of success 1H_2016 2H_2016 1H_2017 2H_2017
(Offered since 1H, 2016) The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 16 The 13th Medium Term Management Plan Loans for Corporate Customers (2) Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Further expansion of retail bases within and outside Chiba Prefecture
Balance of domestic loans (by area) 8,000 Expansion of sales bases (sales development (¥Bil.) 6,797.6 6,280.8 6,536.4 in that aspect) Increase our 6,000 Within Chiba Pref. Propositions for various solutions including share in Tokyo support for overseas market entry
4,000 Active utilization of alliances 2,304.7 1,965.8 2,129.7 2,000 Outside Chiba Pref. (Tokyo) 382.1 449.6 503.7 Outlines of Business Succession Fund Outside Chiba Pref. 0 (Others) Musashino Bank 2016/3 2017/3 2018/3 Chiba Bank Limited Limited Loan balances at newly opened partnership (LP) Investment, partnership (LP) ¥1,470Mil. projects brought in ¥1,470 Mil. branches in Tokyo * Before direct partial write-offs
150 Chibagin Capital Bugin Capital [Ikebukuro] (¥Bil.) 2016.10 Corporate General partnership (joint GP) 12.0 banking office ¥30Mil. ¥30Mil. 100 32.5 [Ebisu] Fund Fund 2015.10 Corporate administration administration 4.8 banking office 2017.7 Branch 15.4 80.3 Chiba-Musashino Alliance #1 50 Investment Limited Partnership (total ¥3,000Mil.) 59.1 [Shinagawa] 5.5 2013.10 Corporate banking office 34.3 2015.7 Branch Support smooth business succession 0 th 2016/3 2017/3 2018/3 The 13 Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 17 The 13th Medium Term Management Plan Loans to Real Estate Leasing Sector (1) Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Review from various points as lending based on business viability
Lending based on business viability, with Amount of new loans for rental Understanding of the screening including asset situations, etc. as well real estate (by property location) current status Review as income and expenditure forecast. ■ Increased price of land In addition to onboarding review, ongoing 500.0 449.5 and materials system credit management will also be carried out (¥Bil.) 372.0 including checks on occupancy rate and income 400.0 ■ Decrease in good quality 342.9 projects that we can get and expenditure status, etc. Outside 297.3 Chiba Pref. involved in 300.0 (Others) Loans will mainly be provided to landowners ■ We maintain strict Outside Strategy and entrepreneurs and we will not be involved screening criteria 200.0 Chiba Pref. in projects that are aimed for short-term Policy (Tokyo) resale. 100.0 ■ Decrease in the executed Within loan amount for real estate Chiba Pref. Eliminate tampering and falsification, etc. of intended for rentals 0.0 Required screening documents by ensuring that the documents original copies of income certificate and 2015/3 2016/3 2017/3 2018/3 passbooks from other banks, etc. are checked Strengthening of overall * Including the funds for other sectors for obtaining lending, etc. has been real estate intended for rentals (excluding repair costs maintained through and funds for tax payments, etc.) efforts by other sectors Number of new corporate loan customers ■ Borrower attributes Other 2,500 (ex. special branches outside Chiba pref.) Regular ■ For share houses 11% Other (Cases) 2,007 employ Landlor 11% 11 cases / ¥2.0Bil. 2,000 1,659 1,735 ds/Afflu ees Regular (As of the end of 2018/3) 1,434 Landlords ent employees 1,500 Non-real estate 14% /affluent 14% rental business peopl… people 1,039 1,000 943 817 45% 512 Entrepr Entrepre- ■ With sub-lease neurs 500 eneurs 30% 27.7% Real estate rental 30% *The percentage of new loans 0 business at over ¥0.1Bil. 1H_20162016上 22016H_2016下 1H_20172017上 2H_20172017下 （On the basis of amount as of the end of 2018/3） (On the basis of cases for FY2016) The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 18 The 13th Medium Term Management Plan Best Bank 2020 Loans to Real Estate Leasing Sector (2) Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Proactive approach to meet customers’ financial needs while ensuring risk management
*To eliminate outliers, average Balance of loans for rental real estate DSCR/LTV distribution calculated by removing top and (Cases) 25,0002,500 (by property location) (Cases) bottom 5 percentile 2,164.5 1,000 1,000 (¥Bil.) Outside 2,005.2 Chiba Pref. 800 20,0002,000 1,753.5 (Others) 800 1,564.3 600 600 1,416.4 Outside 15,0001,500 Chiba Pref. 400 400 (Tokyo) 10,0001,000 200 200 Within 0 0 5,000500 Chiba Pref. 200% 150% 100% 50% 0% 0% 50% 100% 150% 200%
Good DSCR Bad Good LTV Bad 00 Average* 159% Average* 75% 2014/3 2015/3 2016/3 2017/3 2018/3 * Including the funds for other sectors for obtaining real estate intended for rentals (Excluding repair costs and funds for tax payments etc.) Default* ratio *Default: Downgrade to Occupancy rates of our customers’ apartments potentially bankrupt debtors by property location 3% 2.73% 100.0 89.5 90.4 89.4 90.3 87.487.2 87.787.9 88.188.2 (%) 80.0 Non-real estate 83.8 2% rental business 81.2 80.1 81.2 2.21% 60.0 73.4
40.0 ■ Our customers’ apartments: as of the end of 2016 Overall 1.22% ■ Prefectural average: Based on Ministry of Internal Affairs and 1% 0.72% Communications “Housing and Land Survey” (2013) 0.85% 20.0 Rental occupancy = Number of inhabited properties ÷ (Number of inhabited properties + Number of vacant properties) Real estate rental business 0.17% 0.0 0% Total全体 Chiba千葉県 Tokyo東京都 Saitama埼玉県 Ibaraki茨城県 2009/3 2012/3 2015/3 2018/3 The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 19 The 13th Medium Term Management Plan Housing Loans Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Improving response time by enhancing working efficiency
Balance of housing loans Number of pre-applications 22,000 received 4,000 Strengthen linking +4.5% YoY with branches and 19,453 (¥Bil.) 3,600.0 (Cases) housing companies 3,431.1 3,500 3,281.7 18,000 16,55716,565 3,140.5 Loan concentration 15,466 15,754 (Centers, plazas etc.) 3,000 14,000
2,500 Branches 10,000 2,000 20162016上 20162016下 20172017上 20172017下 1H 2H 1H 2H 2016/3 2017/3 2018/3 2020/3 (Target) Executed amount of Housing start statistics Housing Loan operations flow (Ministry of Land, Infrastructure housing loans 2nd highest 250 and Transport) (¥Bil.) 211.3 208.2 Past Current Future Number of owner- 200 181.8 181.6 Re- 2017 Change 30.7 21.0 occupied/ Pre- Mainly electronic data financed Jan.-Dec. % Paper-based built-for- application 34.3 25.3 sale units App and web application 150 Approx. 88% (2H, 2017) Chiba 30,709 +3.9 Headquarters
Pre- and corporate Headquarters only Tokyo 76,499 +0.8 screening guarantor 100 Newly 180.6 187.1 executed Saitama 36,315 -4.9 147.5 156.2 Concentration at Execute Branches Headquarters 50 Ibaraki 13,603 -4.3
Kanagawa 43,766 -4.2 Improve customer convenience and operations 0 2016 2016 2017 2017 The 13th Medium Term Management Plan Best Bank 2020 2016上 2016下 2017上 2017下 1H 2H 1H 2H Final Stage - 3 years of value co-creation 20 The 13th Medium Term Management Plan Unsecured Consumer Loans Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Responding precisely to the customers’ needs with risk management
Balance of unsecured consumer loans Balance of auto loan and student loans 200 50 (¥Bil.) 170.0 YoY (¥Bil.) 39.3 142.2 150 40 Auto loan 126.3 +12.5% 34.5 YoY 107.8 Loans by 28.6 30 purpose 33.5 +13.7% 100 85.6 74.9 +14.2% 28.3 62.8 20 Student loans 22.9 50 Card loans +18.2% 10 +10.5% 45.0 51.3 56.5 0 0 2016/3 2017/3 2018/3 2020/3 2016/3 2017/3 2018/3 (Target) Our actions
Reinforcement of non- • Receiving written proof of income if "lending over face-to-face channels ¥0.5Mil.“ (since October 2017). Confirmation Cross-selling • Reinforcement of the web system for convenience Utilization of the internet of earnings (uploading the identification documents, written and Loan Direct (call center) Cross-selling to proof of income, etc.). Also available in the evening housing loan on weekdays and on customers, etc. Confirmation • Considering competing debts such as card loans weekends and holidays of from us and other banks, etc., conduct appropriate repayment screening to prevent over-lending. ability
Control of • Regular information exchange with guaranteeing ongoing company and build a system that does not depend credit solely on guaranteeing companies.
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of 21value co-creation 21 The 13th Medium Term Management Plan Group Total Balance of Financial Products Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Ensuring "customer-focused" business management (fiduciary duties)
Group Total Balance of Financial Products Financial product sales through 3,000 intermediary services of Chibagin Securities (¥Bil.) 150 YoY 2,500.0 (¥Bil.) 116.0 2,500 +1.8％ Investment trusts 100 88.2 Foreign bonds/ 2,013.0 2,012.6 2,049.9 65.2 subordinated 2,000 debt 50 Structured bonds 1,500 0 2016/3 2017/3 2018/3 2020/3 2016/3 2017/3 2018/3 (Target) Balance of assets under management of Growing the customer base Chibagin Asset Management • Seminars for beginner investors Newly opened • Introduction of entirely web-based scheme for opening investment trust account an investment trust account and funded investment trust 8,070 100.0 91.9 • Core and satellite proposition New application for (¥Bil.) Discretionary 24.0 funded investment trust 75.0 68.4 investment Human resource development for sales personnel 12,281 61.3 • Sales personnel development program (2H_2017) 22.4 (Training, temporary branch-based support, information 50.0 32.3 transmission, "Holiday College") Investment trusts • Facilitation of skill improvement within specialist teams 67.8 25.0 45.9 28.9 AC Team The team head supervises promotion activities in each area (10 bases) 0.0 PB Team Assigned to high net worth people in 20 blocks within the prefecture 2016/3 2017/3 2018/3 The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 22 The 13th Medium Term Management Plan Trust Business and Inheritance-related Services Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Further expanding business with alliance banks, broadening products to address aging society
Inheritance-related Number of contracts and income Trust businesses for inheritance-related services services* 600 1,138 cases • Testamentary trust • Land trust (¥Mil.) • Will preparation support service • Public interest trust 500 878 cases 555 • Inheritance sorting service • Specified gift trust 764 cases • Management succession support • Guardianship support trust 400 478 service • Alternative testamentary trust • Family trust support service 300 350 cases 298 cases 200 253 Testamentary trust Alternative testamentary - cases held in trust trust - cases held in trust 100 172 145 1,345 262 (As of the end of 2018/3) (Total as of the end of 2018/3) 0 2014/3 2015/3 2016/3 2017/3 2018/3
Since June 2006 Since October 2015 Since October 2016 Since October 2017 Banks themselves started offering Establishment of Trust Business Commenced alliance with other Increased handling of alternative trust services Division banks testamentary trust
Alliances with Daishi Bank Musashino Bank Chugoku Bank Toho Bank other banks Since October 2016 Since April 2017 Since October 2016 Since June 2017 (Agency method) Customer-facing operations, etc. are (Contracting out method) Chiba Bank is the subcontractor for Tie-up method contracted out by Chiba Bank administrative tasks such as clerical work Advantages for They can enter the market without needing to have an Being able to directly respond to customer inquiries alliance banks administrative division Advantages for Utilization of accumulated operational know-how and access to new business opportunities and increased profitability Chiba Bank Number of applications Cumulative total since the start of tie-up until March 2018: 800 applications / 430 applicants
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 23 The 13th Medium Term Management Plan International Business Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Expanding income sources while diversifying funding
Overseas Office network Lending to Japanese companies at our overseas branches (balance and number of cases) 1,500 93 100 Cases (right axis) (Cases) ($Mil.) 78 80 1,311 68 80
1,076 London Branch 60 1,000 935 Shanghai Rep. New York Branch 939 40 Hong Kong Branch Bangkok Rep.
Singapore Rep. Acceptance of overseas trainees Amount (left axis) 20 Musashino Bank: 1 person (Singapore) TSUBASA: 4 persons (NY, HK) 500 0 Targeting co-rep. office with Musashino Bank 2015/3 2016/3 2017/3 2018/3
Enhancement of foreign exchange businesses operations USD funding (as of the end of 2018/3) Investment Funding Long-term (1) Review of branches offering foreign trades (since October 2017) stable funding ratio* Before change After change Lower liquidity Stable funding As of the end of 129 branches (excluding some branches) assets < 2018/3 offering services to Headquarters offering $2,933 Mil. $4,244 Mil. customers services to customers Loans over one year Deposits 144.7% Currency Swaps (2) Foreign transfer via Web-EB (since April 2018) BOJ operation *Long-term stable Foreign bonds, etc. funding ratio: Before change After change Ratio of stable funding Entered at the (incl. foreign-currency Entered at 157 branches Headquarters Loans of one year or Repo, Money Market deposits, bonds and terms of more than one less Central Bank year) to loans of more Consolidation of operations in back office, establishing Foreign bonds, etc. deposits, etc. than one year
the “foreign exchange business support desk” The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 24 The 13th Medium Term Management Plan Chiba-Musashino Alliance Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Accelerate the alliance to realize further results
Year 4 and 5 Wider tie-up Steady achievement of alliance effects
Stable operation of realized initiatives and deeper tie-up from the long-term perspective • Co-location of branches (Akihabara Branch Hamamatsucho Corporate Banking Office, Year 3 Singapore Rep.) • API (TSUBASA FinTech Platform) Building a "New tie-up model for regional banks" and achieve major initiatives such as inheritance and securities
Year 2 • Chiba-Musashino Alliance Co., Ltd. • Inheritance-related services Quickly implement initiatives through • Intermediary services mainly work groups • Insurance call center • Business Succession Funds Year 1 • Joint ATM • Asset • Joint purchase of Chibagin Securities; Saitama (Omiya), management ATM/deposit machines Urawa, Soka, Tokorozawa
• Lease • Reduction in rent for "1st Alliance Promotion Committee" intermediary branches • Private • Screening tools placement • Partner fund
• Customer • Establishment of foreign introduction currency lines • Syndicate loans etc. Funds handled by Musashino Bank
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 25 The 13th Medium Term Management Plan TSUBASA Alliance Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Deepen cooperation in a wide range of fields
Main frame system cooperation
Chugoku Chiba Bank Daishi Bank Hokuyo Bank Bank Since Jan Since Jan Since May Toho Bank 2016 2017 2017 Main frame system cooperation Main frame system (Mutual back-up) Full evaluation towards participating in the shared system HOKUETSU BANK
Chiba Bank Daishi Bank
Sharing administrative Shared subsystem operations • Branch system ■ Administration establishment, • CRM changes and abolishment • Call center system ■ Inquiries from branches Research into FinTech ■ Training • Zengin Moretime support, etc. ■ Service center centralization, etc. Name T&I Innovation Center Co., Ltd. Since March 2018: Trial Chiba Bank 40% outsourcing of foreign exchange Staff capacity creation, cost reduction Investme operations Collective know-how and succession nt ratio Daishi Bank, Chugoku Bank, Iyo Bank 10% each Maintenance and development of professional Toho Bank, Hokuyo Bank, IBM Japan Workload reduction through full staff operations The 13th Medium Term Management Plan Best Bank 2020 Creation of reassigned staff Final Stage - 3 years of value co-creation 26 The 13th Medium Term Management Plan TSUBASA FinTech Platform Service introduction on Apr 23, 2018 Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Building a common API platform with a high degree of system freedom to increase the use case
Services for customers Services for banks Service content New service Target Access channels Open API Bank systems groups platforms TSUBASA Retail TSUBASA FinTech Platform Alliance banks Core systems Service content platform External API platforms New service platforms Mobile portal Banking Open API Internal Lending support Web bank book platform Product/ Asset management Service apps
support CRM
Mobile payments API API DWH Reservations for visits Transaction Biometric authentication Authentication/ details OA authorization Links with different Autheapps sectors nticati ・・・・・・Corporate on External back office Data storage services Corporations Portal Externally linked services API management API AI Goal based Managed PFM Mail/Push API /SNS Data analysis/ products/insurance conversion Robot advisor notifications API Open data API Financial institutions outside External EC sites Data capture the TSUBASA banks API Marketing data Local government services ・・・・・ New Credit Guarantee Data capture API Business apps Associations ・・・・・・
Other financial institutions TSUBASA Alliance banks New
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 27
Purpose and effects of cooperation with Purpose and effects of cooperation with PFM finbee 1. Improved user security 1. Reinforce the approach towards asset IB passwords, etc. are not left to the creators PFM operators Expand customer contact points and 2. Improved user convenience catchment of younger generations Entire bank accounts can be managed 2. User data acquisition for advanced on the PFM app marketing 3. IB cost reduction Timely recommendations utilizing the Reduction in usage-based charges for IB purpose of deposits and meeting the is expected savings targets, etc.
Service contents group Public API New service base Banking system
External tie-up External API base New service base Internal API Main frame service Public API base Transaction Ordinary deposit details Balance inquiry Balance inquiry Statement inquiry Term deposit Statement inquiry ...
External tie-up External API base New service base Internal API service Public API base Products/New Balance inquiry services Main frame Balance inquiry App Statement inquiry Ordinary deposit Statement inquiry Transfer Transfer Goal-based Account opening finbee account App ... Account closing Account Account closing management ・・・・ functions, etc. .... The 13th Medium Term Management Plan Best Bank 2020
Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Initiatives Aimed at Efficiency and Productivity Enhancement
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 28 The 13th Medium Term Management Plan Improved work efficiency and personnel strategy Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Maintain the total number of personnel and reassign to growth fields through business reforms
Intensify work efficiency Add work style reform enhancement Reinforce sales capabilities
Staff relocation We have already started business reforms aimed at working something out for around 880 employees 880 (through the conversion of work volumes) employees Of this number, it is likely that around 600 employees Reduction of work volumes through can be relocated over the medium-to-long term. efficiency improvement Improvement efficiency 600 in internal operations [Fundamental employees concepts] Career design training Improvement efficiency 1. Simplification 200 [Reforming attitudes through training] in lending operations 2. Systematization employees 3. Centralization at Internal and loan-related Headquarters the Headquarters clerical work Improvement efficiency 80 in Headquarters operations employees In charge of sales and headquarters planning and promotion Smooth career change
Review of branch functions and networks
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 29 The 13th Medium Term Management Plan Branch Network Strategy Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Improve efficiency in branch operation based on customers’ needs
Review of branch functions and networks Newly establish bases in Tokyo No. of June 2018 domestic Branch type Services branches as Direction Akihabara Branch, of Apr. 2018 Hamamatsu-cho Corporate Sales Office General branch All services 128 Toshima-ku Personal finance Deposits, financial products Minato-ku (around 12 specialization and consumer loans Bunkyo-ku Sumida-ku Hamamatsu-cho) Taito-ku Money plaza Deposits and financial format products 14 Nakano-ku An area where an Shinjuku-ku uptake in demand is Others (Rep. office, plaza, branch-in-store, etc.) 27 ― expected with the on-
Chiyoda-ku going redevelopment Joban Area and development of 3 blocks many large buildings Shibuya-ku Hamamatsu Chuo-ku Koto-ku over the next five years. -cho
Akihabara Minato-ku Block Chiba Area I 5 blocks Meguro-ku
Kinto Area 7 blocks Shinagawa-ku
Chiba Area Ⅱ 5 blocks Utilization of Chiba-Musashino Alliance Special Increase in co-financing, syndicate loan branches formation • H.O. Reinforcement of introductory activities • Tokyo branches • Shinjuku branch and information cooperation • Osaka branch ■ Review of opening hours, etc. introducing lunch break (11:30-12:30) Since Apr 2018: Shirahama Branch, Wada Branch The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 30 The 13th Medium Term Management Plan Best Bank 2020
Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
ESG and Capital Policy
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 31 The 13th Medium Term Management Plan マスタESG タイトルの書式設定 (1) Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Promoting initiatives aimed at realization of sustainable society
ESG initiatives Develop sophisticated corporate governance
General Meeting of Independent Director Shareholders Internal Director
Supervision Environmental Appointment, remuneration, Board of Directors management (E) Advisory boards
• Promote environmental finance 1/3 Majority
Execution (Internal Audit Management Meeting and Inspection Governance Society Unit) (G) (S) Operation Business Administration Planning • Develop sophisticated • Promote evaluation of HQ HQ HQ HQ (Credit Unit) corporate governance customers’ business • Strengthen risk • Promote diversity management structure • Contribute to regional New Group Chief Office system • Ensure thorough compliance revitalization • Promote work style reform Group CEO Bank 14 Group Companies Chief Executive Officer Each group company will be allocated an executive officer ESG Promotion Committee Group COO Oversight of operational execution Chief Operating Officer (Chair) President Group CSO Oversight of management strategies, personnel, (Committee Members) Members of the Management Board; Chief Strategy Officer investments and expense allocation general managers of Corporate Planning Division; Group CRO Oversight of risk management, compliance, human Chief Risk Officer resource development Public Relations Division; Human Resources Division; Group CBO Oversight of sales strategies and implementation Diversity Management Division; Corporate Business Division; Chief Business Officer Group CIO Regional Revitalization Division, etc. Oversight of back office work and systems (Secretariat) Corporate Planning Division Chief Information Officer Effective on June 27, 2018 (scheduled) The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 32 The 13th Medium Term Management Plan マスタESG タイトルの書式設定 (2) Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Actual activity examples
Diversity promotion Contribution to regional revitalization
Promote women in the workplace Supporting restoration of old as a management strategy Japanese-style houses Support for restoration of old Japanese-style houses and businesses utilizing disused schools and Proportion 2006 2017 FY2020 facilities in collaboration with local governments by women End of March As of July Target "Chibagin Local Revitalization Lending Scheme"
Management 2.0％ 11.4％ Private placement bonds for regional revitalization positions 20％ （17） （118） We donate goods such as books and musical instruments to schools designated （No. of persons） by the issuer for the purpose of contributing to the local community via the Leadership development of school environments. 9.4％ 29.9％ positions 30％ （98） （260） 1H 2016 2H 2016 1H 2017 2H 2017 (No. of persons) * * Staff members who are in a position with subordinates such as deputy branch 98/¥9.6Bil. 102/¥10.4Bil. 71/¥7.1Bil. 71/¥6.6Bil. managers, etc. and those in an equivalent position with organizational management responsibilities as the person in charge of assigned work. Establishment of agricultural corporations Resolving issues such as increase in disused agricultural land, lack of successor First regional bank for farmers, aging farm workers, etc., and contributing to establishing sustainable agricultural mechanisms and development of regional agriculture and revitalization of regional economy.
"Fresh Farm Chiba Co., Ltd." Local companies FY2017 - the “Nadeshiko Brand” “MSCI Japan Empowering Women Index” ● Large-scale commercial farming through and residents the consolidation of farm land Local farm employees ● More efficient farming using large Working agricultural machinery together Shareholders ● Development of corporate management in agriculture Local government ● Development of sales channels for produce
Ministry of Health, Labor Ministry of Health, (14.5% investment by the Chiba Bank Group) and Welfare Labor and Welfare The 13th Medium Term Management Plan Best Bank 2020 “Eruboshi” (top ranked) “Platinum Kurumin” Final Stage - 3 years of value co-creation 33 The 13th Medium Term Management Plan Capital policy (1) Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Maintain solid capital ratio and improve capital efficiency
Consolidated CET1 capital ratio Book value* of stocks and ratio to Tier1 capital (Consolidated) 8 Risk assets 15 *acquisition cost of other securities with market value (%) (¥Tri.) [Policy regarding cross-shareholdings] 14 Based on economic rationales and forward 6 250 60 12.74 12.65 53.8 looking stock values, taking into account risk 12.48 13 and return, appropriately verify the validity of the rationale for holdings 4 Consolidated (¥Bil.) (%) CET1 capital ratio 12 2 200 12% 11 range 40 0 10 Book value / Tier1 capital (%) 2016/3 2017/3 2018/3 2020/3 189.8 150 (Target) 22.2 20.9 18.3 17.4 16.2 20 Consolidated ROE* * Based on total shareholders’ 14.6 13.4 equity on B/S, ex. changes in 12.6 11.3 8 "unrealized gains or losses" 100 (%)
7 7.51 Consolidated ROE Book value 0 6.86 7% 6.76 range 50 6 6.43 5.97 5.83 (TSE standard) 5 0 -20 2016/3 2017/3 2018/3 2020/3 2001/3 2010/3 2012/3 2014/3 2016/3 2018/3 (Target) The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 34 The 13th Medium Term Management Plan マスタCapital タイトルの書式設定 policy (2) Best Bank 2020 Final FinalStage Stage - 3 years - 3 yearsof value of coco--creationcreation
Active approach toward shareholder returns, targeting around 50% of profit
Shareholder returns
*1 (¥) 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 Agile acquisition of (Projection) Stable dividends treasury stocks Dividend per 20.0200 12 13 14 15 15 16 60 stock Shareholder return (%) Increase増配 Increase増配 Increase増配 Increase (¥Bil.)
(¥Bil.) 50 Non-consolidated 150 43.2 45.8 52.5 48.6 49.6 51.0 15.0 profit Annual cash 10.2 10.8 11.5 12.0 11.7 12.4 40 dividends Payout ratio 23.6% 23.6% 21.9% 24.7％ 23.7％ 24.3％ 10.0100 30 Acquisition of own 9.9 9.9 9.9 14.9 13.9 5.0 shares Total shareholder 20.2 20.8 21.5 27.0 25.7 17.4 return 20 Shareholder 46.8% 45.4% 40.9% 55.5％ 51.9% 34.1% 5.0 return ratio 50 10 During the current medium term management plan Shareholder return ratio* Around 50% 0 0 *1 Acquisition of own shares includes only the amount of ¥5.0Bil. announced in May 2018 2014/3 2016/3 2018/3 2019/3 2020/3 (Projection) (Target) *2 Shareholder return = Total shareholder return (amount of dividend payout + amount of acquiring treasury stocks, etc.) Non-consolidated net income
The 13th Medium Term Management Plan Best Bank 2020 Final Stage - 3 years of value co-creation 35 Inquiries related to this presentation should be addressed to:
The Chiba Bank, Ltd. Corporate Planning Division Investor Relations
Tel: 043-301-8459 Fax: 043-242-9121 E-Mail: [email protected]
This material was prepared only for the purpose of providing information and does not solicit the purchase or sale of any specific securities. All or part of the matters described in this material may be revised or changed without prior notice. This materials contains forward-looking statements. These statements are not represented as providing a guarantee of the Bank’s future performance, and actual results may be subject to risks and uncertainties. Please note that future performance may differ due to change in business environment, etc. Notes Memo