#1Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. First Half of Fiscal 2022 Earnings Briefing Materials (April 1, 2022 - September 30, 2022) Investor Relations 2022 lyogin Holdings December 2, 2022#2Index I. Summary of Earnings for the First Half of Fiscal 2022 II. Transition to Holding Company Structure III. Group Medium-Term Management Plan III-1. Overview of Medium-Term Management Plan III-2. Major Numerical Targets of Medium-Term Management Plan III-3. Main Strategies and Progress of Medium-Term Management Plan III-4. Efforts for Sustainability III-5. Profit/ Loss Forecasts and Capital Policy Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Bank Holding Company Holding Company - 1 -#3Profit and Loss Overview for the First Half of Fiscal 2022 (Bank Consolidated) Profit attributable to owners of parent increased significantly year-on-year due to a decrease in credit costs and an increase in gain (loss) related to securities, in addition to securing a high level of core business gross profit Bank Consolidated (Units: Millions of yen) Core business gross profit First half of First half of fiscal 2022 YOY Increase/ Decrease fiscal 2021 44,969 +26 +0.05% Interest and dividend income 37,727 +692 44,943 37,035 Fees and commissions 4,625 (146) 4,771 Other operating income (Excluding profit/loss related to bonds 2,616 (520) 3,136 including JGBs, etc.) Expenses (-) (Excluding extraordinary retirement benefits, etc.) Personnel expenses Nonpersonnel expenses 26,157 +622 +2.43% 25,535 14,627 (111) 14,738 9,990 +400 9,590 Taxes 1,540 +334 1,206 Core business net income 18,811 (597) (3.07%) 19,408 Credit costs (-) 1+2-3-4 (761) (4,682) 3,921 Provision of reserve for general loan losses 1 - (364) 364 Amortization of non-performing loans ② 312 (3,502) 3,814 Reversal of allowance for loan losses ③ Recoveries of written off claims ④ 923 +923 150 (107) Gain (loss) related to securities 7,520 +3,564 257 3,956 Gain (loss) related to bonds including 5,846 +5,675 171 JGBs, etc. Gain (loss) related to stock, etc. 1,673 (2,112) 3,785 Other temporary gain (loss) 1,822 +94 1,728 Ordinary income 28,915 +7,743 +36.57% 21,172 Extraordinary income (loss) (122) (56) (66) Income before income taxes 28,793 +7,688 21,105 Net income 20,312 +5,379 +36.02% 14,933 Profit attributable to owners of parent 19,877 +5,010 +33.69% 14,867 Ordinary revenue 86,212 +15,587 +22.07% 70,625 Business net income 24,658 +5,443 +28.32% 19,215 Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Core business gross profit Up ¥26 million YoY Interest and dividend income increased, mainly in foreign-denominated loans and securities. ✓ Other operating income decreased due to decreases in gain (loss) on derivatives and revenue on bond trading. ■Expenses (-) Up ¥622 million YoY ✓ Nonpersonnel expenses such as depreciation increased due to an increase in strategic investments. Also, taxes increased due to an increase in the consumption tax. Credit costs (-) Down ¥4,682 million YoY ✓ Credit costs decreased due to reversal of provision for COVID-19 measures and a decrease in bankruptcies, etc. (Since the amount of reversal exceeded the total amount of provision of reserve for general loan losses and provision of reserve for specific loan losses, reversal of allowance for loan losses was recorded.) Gain (loss) related to securities Up ¥3,564 million YoY ✓ Gain (loss) related to bonds including JGBS, etc. increased due to the recording of a gain on sales of foreign bonds without hedges. Gain (loss) related to stock, etc. decreased due to decreased gain on sales of strategic equity holdings. Profit attributable to owners of parent Up ¥5,010 million YoY -2-#4Factors in Increase / Decrease in Core Business Gross Profit for the First Half of Fiscal 2022 (Bank Consolidated) A high level of core business gross profit was secured due mainly to an increase in interest and dividend income Year-on-year (First Half of Fiscal 2022 - First Half of Fiscal 2021) (Units: Billions of yen) (Note) Differences in yield of domestic currency utilize yield differences with domestic deposits, etc. Differences in yield of foreign currency utilize yield differences with foreign currency funding costs Gain on loan management (¥25.3 billion) +1.29 Interest and dividend income (¥37.7 billion) +0.69 Core business gross profit (¥44.9 billion) +0.03 Gain on securities management (¥11.9 billion) (0.97) Other (¥0.5 billion) +0.37 Of which, domestic currency (¥19.8 billion) (0.53) Of which, foreign currency (¥5.5 billion) +1.82 Of which, domestic currency (¥6.2 billion) (1.73) Of which, foreign currency (¥5.6 billion) +0.76 Volume factors (0.06) (Average loan balance down ¥12.9 billion) -Yield difference factors (0.47) (Yield difference down 0.02%) -Volume factors +1.12 (Average loan balance up ¥186.3 billion) -Yield difference factors +0.70 (Yield difference up 0.17%) -Volume factors (1.05) (Average securities balance down ¥121.7 billion) Yield difference factors +1.61 (Increase in stock dividends, fund distributions, etc.) Gain on fund cancellation factors (2.29) (Recorded loss on cancellation of investment trusts, etc.) -Volume factors (0.27) (Average securities balance down ¥27.6 billion) -Yield difference factors +1.03 (Yield difference up 0.38%) Increase in interest on deposits with banks due to special interest granted by the Bank of Japan, etc. Fees and commissions (¥4.6 billion) (0.14) Other (¥2.6 billion) (0.52) . Solutions-related commissions +0.08, revenue on assets in custody +0.02, commission received on domestic exchange (0.13), loan- related commissions (0.14), etc. . +1.43 from gain (loss) on foreign exchange transactions, (1.55) from gain (loss) on derivatives, (0.30) from revenue on bond trading, etc. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. -3-#5Loans, Deposits, and Assets in Custody for the First Half of Fiscal 2022 Deposits, etc. Deposits, etc. were up 1.0% year-on-year Loans Loans were up 6.0% year-on-year Balance of deposits, etc. by region (Units: Billions of yen) Balance of loans by region (Units: Billions of yen) First Half of Region Fiscal 2021 First Half of Fiscal 2022 YoY Increase/ Decrease Region First Half of Fiscal 2021 First Half of Fiscal 2022 YOY Increase/ Decrease Within Ehime Prefecture 4,990.7 5,179.2 +188.5 +3.8% Within Ehime Prefecture 2,496.4 2,675.8 +179.4 +7.2% Shikoku (excluding Ehime) 291.4 290.5 (0.9) (0.3)% Shikoku (excluding Ehime) 340.1 343.5 +3.4 +1.0% Kyushu 185.1 186.5 +1.4 +0.8% Kyushu 318.6 333.3 +14.7 +4.6% Chugoku 285.7 289.0 +3.3 +1.2% Chugoku 483.5 482.5 (1.0) (0.2)% Kinki 193.4 191.6 (1.8) (0.9)% Kinki 388.2 380.4 (7.8) (2.0)% Tokyo and Nagoya 496.8 422.0 (74.8) (15.1)% Tokyo and Nagoya 620.9 671.1 +50.2 +8.1% Singapore 34.3 81.8 +47.5 +138.5% Financial Market Business Office 112.6 135.8 +23.2 +20.6% Offshore, etc. 125.2 28.8 Total 6,603.0 6,669.7 (96.4) +66.7 (77.0)% Total (domestic branches) 4,760.5 5,022.7 +262.2 +5.5% +1.0% Singapore 198.5 234.6 +36.1 +18.2% Total 4,959.1 5,257.4 +298.3 +6.0% Assets in Custody Balance of assets in custody Balance of assets in custody were up 1.9% year-on-year (Units: Billions of yen) Share within Ehime Prefecture as of September 30, 2022 (excluding Japan Post, agricultural cooperatives, etc.) First Half of Fiscal 2021 First Half of Fiscal 2022 Increase/ YOY Decrease Group assets in custody 600.2 611.9 +11.7 +1.9% Balance at the lyo Bank 353.9 357.7 +3.8 +1.1% Balance at Shikoku Alliance 246.3 254.2 +7.9 +3.2% Loans Deposits 52.6% 6.9% 6.7% 23.2% 10.6% 35.6% 20.2% 12.3% 25.3% 6.6% Securities Sales of Group assets in custody 75.1 64.6 (10.5) (14.0)% 0% 10% 20% Sales at the lyo Bank 30.4 30.0 (0.4) (1.3)% The Bank Sales at Shikoku Alliance 30% 40% Regional banks other than the Bank 50% 60% City banks/ Trust banks 70% 80% 90% 100% Second regional Credit unions banks 44.7 34.5 (10.2) (22.8)% Securities Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 4-#6Credit Costs and Disclosed Non-performing Loans for the First Half of Fiscal 2022 (Bank Consolidated) Credit Costs (4.6) Credit costs were down ¥4.6 billion year on year due to a decrease in provision of reserve for general loan losses as a result of reversal of provision for COVID-19 measures, and a decrease in amortization of non-performing loans owing to decreased bankruptcies Since the total amount of provision of reserve for general loan losses and provision of reserve for specific loan losses is negative, reversal of allowance for loan losses is recorded in the financial statements. However, it is not shown in the table on the left for the purpose of comparative analysis with the past results. Credit costs by factor (Units: Billions of yen) Fiscal 2022 Fiscal 2020 Fiscal 2021 First Half First Half First Half YOY Credit costs total 2.1 13.3 3.9 4.3 (0.7) Provision of reserve for general loan 0.7 9.5 0.3 (0.7) (2.5) (2.8) losses Amortization of non-performing loans 1.6 4.4 3.8 5.7 1.9 (1.9) Bankruptcies 0.3 0.5 1.4 1.4 0.0 (1.4) Downgrades, etc. 2.6 6.2 3.4 6.5 3.3 (0.1) Upgrades and collections (1.7) (2.8) (1.5) (2.8) (1.6) (0.1) Other Group companies 0.4 0.5 0.5 0.6 0.2 (0.3) Recoveries of written off claims (-) 0.1 0.6 0.2 0.5 0.1 (0.1) [Reference] Credit management expense ratio (Nonconsolidated*) 0.06% 0.26% 0.14% 0.08% (0.03)% (0.17)P (*) Credit management expense ratio = Credit costs (Bank Nonconsolidated) / Average loan balance (Bank Nonconsolidated) Ratio of Disclosed Non-Performing Loans Amounts and ratios of disclosed non-performing loans under the Financial Reconstruction Act (Units: Billions of yen) Fiscal 2020 Fiscal 2021 First Half Fiscal 2022 First Half YOY Loans to bankrupt or effectively bankrupt borrowers Doubtful assets 3.8 2.0 1.9 1.7 (0.3) 54.2 59.0 63.3 66.3 +7.3 Although amounts of disclosed non-performing loans have been on an increasing trend amid the Credit subject to specific risk management 16.8 23.9 23.7 24.3 +0.4 Total disclosed non-performing loans 74.8 85.0 89.1 92.4 +7.4 COVID-19 pandemic, ratio of non-performing loan continued at a low level of 1.67%. Ratio of disclosed non-performing loans 1.42% 1.62% 1.66% 1.67% +0.05P Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. -5-#7Evaluation Gain (Loss) on Securities and Equity Ratio for the First Half of Fiscal 2022 (Bank Consolidated) Evaluation Gain on Securities >>> ¥255.2 billion Maintained a top level among regional banks Equity Ratio >>> 14.55% Secured high soundness, sufficiently exceeding required equity ratio (Hundreds of Millions of Yen) 4,000 3,600 29,178 Nikkei Average (Yen) 30,000 (%) 18.00 28,000 3,324 27,821 3,200 26,000 16.00 25,937 2,833 14.85 2,800 24,000 14.65 14.58 14.55 2,484 2,500 2,400 2,378 2,254 21,454 21,205 2,000 1,600 18,909 1,200 2,552 14.31 14.38 14.32 22,000 14.00 20,000 18,917 18,000 12.00 16,000 14.73 14.58 14.31 14.33 14.28 14.50 14.03 800 14,000 10.00 400 12,000 0 March 2017 10,000 8.00 September March 2018 March 2019 March 2020 March 2021 March 2022 March 2017 2022 Gain/loss on securities (left axis) (Note) Excludes evaluation gains / losses on money held in trust Nikkei average (right axis) Tier 1 ratio for common stock, etc. March 2018 March 2019 Gross equity ratio March 2020 March 2021 March 2022 September 2022 Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. -6-#8Index I. Summary of Earnings for the First Half of Fiscal 2022 II. Transition to Holding Company Structure III. Group Medium-Term Management Plan III-1. Overview of Medium-Term Management Plan III-2. Major Numerical Targets of Medium-Term Management Plan III-3. Main Strategies and Progress of Medium-Term Management Plan III-4. Efforts for Sustainability III-5. Profit / Loss Forecasts and Capital Policy Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Bank Holding Company Holding Company -7-#9Transition to Holding Company Structure Group structure after the transition (established on October 3, 2022) lyogin Holdings lyo Bank lyogin Business Service lyogin Challenge & Smile 4 affiliates lyogin Credit Guarantee lyogin Capital 7 consolidated subsidiaries Banking services Business support services Business support services *Special subsidiary company Management business of investment fund, etc. (3 companies) Support business for branding and development of sales channels* Credit guarantee services Investment business Venture fund 2 non-consolidated subsidiaries Venture fund lyogin Regional Economy Research Center lyogin DC Card lyogin Leasing lyogin Computer Service Shikoku Alliance Securities Investigation and research business regarding finance, economics, etc. Management consulting business Credit card business Lease business Business related to computer, etc. Financial instruments business *An advanced banking service company (Trade name: Shikoku Brand) Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Inheriting the spirit of the lyo Bank's Corporate Credo The Group's Corporate Credo "Creating a bright and prosperous future for the region" "Offering the best service and being worthy of people's trust" "Rendering our best service with gratitude in our hearts" Purpose of the transition to a holding company structure Expansion of business fields in light of relaxation of regulations Enhanced group governance by strengthening business management functions Maximizing group synergies by changing employee and officer awareness and behavior -8-#10Index I. Summary of Earnings for the First Half of Fiscal 2022 II. Transition to Holding Company Structure III. Group Medium-Term Management Plan III-1. Overview of Medium-Term Management Plan III-2. Major Numerical Targets of Medium-Term Management Plan III-3. Main Strategies and Progress of Medium-Term Management Plan III-4. Efforts for Sustainability III-5. Profit / Loss Forecasts and Capital Policy Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Bank Holding Company Holding Company -9-#11Plan Group Medium-Term Management Plan Toward achieving a long-term vision of a "corporate group continuing to create and provide new value," the Group Medium-Term Management Plan consists of six business strategies including "New Business Strategies" aiming for expansion of business fields and four plans. We will work to further deepen and evolve the DHD model by the Group as a whole to improve sustainability as a corporate group. The Group Business Strategies Corporate related New businesses Personal related BPR DHD Model Digital Touch Points Digital Operations Sincerely serving each customer through human and digital approaches Human Consulting IT Branches Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Ship related Market investment Creation of new services and new businesses Deepening and evolving the DHD model = "DX" Change in company culture (fixed thinking) HR development Review of existing business and reduction in technical debt Human resources Improvement in customer experience value (CX) Achieving a long-term vision -10-#12New Business Strategies <Basic policy> Create earning opportunities by continuously developing businesses and operations that contribute to solving regional issues and improving sustainability through appropriate and bold risk-taking Consideration of new businesses Improving problem solving and earnings power Take on the challenge of new operations that contribute to improvement of sustainability in the region Strengthening operations related to solving increasingly evident regional issues such as depopulation and the need for productivity improvement Banking services, guarantee, investments, credit cards, lease, asset management, insurance, business succession, M&A, business matching, etc. Assumed Issues Reduce risks in procurement and use of energy Revitalize through business attraction, Consideration of Operationalization New Company Select the Best Method for the Group >>> business foundation, tourism, etc. Increase productivity by introducing digital technology Appropriately secure and develop necessary human resources The Bank Increase sales through effective sales Other Group Companies (etc.) -Current- -Vision for the future- Obtained certification as authorized bank holding company Met authorization criteria Equity ratio: 12.0% or more Ratio of Outside Directors: 1/3 or more System to ensure the Appropriately developed appropriateness of business operations: Obtained Authorized bank holding certification company* lyogin Holdings Realization of speedy and agile business development *An authorized bank holding company may have companies exclusively engaged in the services of a special subsidiary company as its subsidiary company (excluding the subsidiary company of a bank which is the subsidiary company of that bank holding company) by notification rather than by permission. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Organize a system for creating sustainable new businesses Establishment of organization in charge Design of the organization in charge is under consideration for raising awareness on new business challenges across the Group and taking speedy action Creation of ventures in the Group Creation of a system is under consideration for bringing out spontaneous ideas from employees, including young people, and enabling them to engage in operationalization -11-#13Index I. Summary of Earnings for the First Half of Fiscal 2022 II. Transition to Holding Company Structure III. Group Medium-Term Management Plan III-1. Overview of Medium-Term Management Plan III-2. Major Numerical Targets of Medium-Term Management Plan III-3. Main Strategies and Progress of Medium-Term Management Plan III-4. Efforts for Sustainability III-5. Profit / Loss Forecasts and Capital Policy Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Bank Holding Company Holding Company -12-#14Medium-Term Management Plan _ Major Numerical Targets I ⚫ Currently, a profit level that exceeds the plan has been achieved, and the numerical targets are proceeding smoothly ⚫ Following the transition to a holding company system, we have newly added "Core business gross profit of Group companies (excluding the Bank)" to the numerical targets, aiming to achieve ¥9.0 billion in fiscal 2023, from the perspective of expanding business fields by the entire Group Major Numerical Targets Items Fiscal 2021 Results Fiscal 2022 Expected Targets for Fiscal 2023 Consolidated core business gross profit ¥90.4 billion ¥87.0 billion ¥86.0 billion Profit attributable to owners of parent ¥26.4 billion ¥28.0 billion ¥23.0 billion Consolidated ROE (shareholders' equity basis) 5.34% Consolidated core OHR Consolidated common stock Tier 1 ratio 14.28% Core business gross profit of Group New ¥8.4 billion 5.41% 4.0% or more 57.05% 60.06% Approx. 60.0% 14.66% Approx. 15.0% ¥8.2 billion ¥9.0 billion companies (excluding the Bank)* *Total core business gross profit of Group companies excluding the Bank before inter-group elimination Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 13-#15Medium-Term Management Plan _ Major Numerical Targets II Deposits, etc. Planning an average balance for fiscal 2023 totaling ¥6,870.0 billion with an increase by approx. ¥685.0 billion for three years Plans for average deposits, etc., balance and assets in custody balance Average deposits, etc., balance Of which, individual deposits (Units: Billions of yen) Fiscal 2021 Fiscal 2022 Fiscal 2023 Fiscal 2020 Results Results YOY Expected YOY Plan YOY Increase/ decrease during the Plan 6,184.6 6,623.1 +438.5 6,790.0 +166.9 6,870.0 +80.0 +685.4 3,658.3 3,807.9 +149.6 3,908.0 +100.1 3,963.0 +55.0 +304.7 593.5 607.1 +13.6 625.0 +17.9 657.0 +32.0 +63.5 348.3 361.1 +12.8 359.0 (2.1) 372.0 +13.0 +23.7 245.2 246.0 +0.8 266.0 +20.0 285.0 +19.0 +39.8 Group assets in custody balance Of which, balance at the lyo Bank Of which, balance at Shikoku Alliance Securities Loans Plans for average loan balance Fiscal 2020 Results Results Planning an average balance for fiscal 2023 totaling ¥5,230.0 billion with an increase by approx. ¥335.0 billion for three years (Units: Billions of yen) Fiscal 2021 YOY Expected Fiscal 2022 YOY Plan Fiscal 2023 YOY Increase/ decrease during the Plan Average loan balance 4,894.4 5,002.1 +107.7 5,195.0 +192.9 5,230.0 +35.0 +335.6 Corporate loans 3,246.8 3,303.7 +56.9 3,458.0 +154.3 3,491.0 +33.0 +224.2 Of which, within Ehime 1,438.6 1,492.5 +53.9 1,597.0 +104.5 1,599.0 +2.0 +160.4 Individual loans 1,130.7 1,157.3 +26.6 1,168.0 +10.7 1,177.0 +9.0 +46.3 Municipal loans 232.2 213.1 (19.1) 199.0 (14.1) 185.0 (14.0) (47.2) Financial Market Business Office 116.3 115.6 (0.7) 132.0 +16.4 136.0 +4.0 +19.7 Singapore Branch 168.2 212.1 +43.9 238.0 +25.9 241.0 +3.0 +72.8 Copyright © 2022 lyogin Holdings, Inc. All Rights Reserved. - 14-#16Index I. Summary of Earnings for the First Half of Fiscal 2022 II. Transition to Holding Company Structure III. Group Medium-Term Management Plan III-1. Overview of Medium-Term Management Plan III-2. Major Numerical Targets of Medium-Term Management Plan III-3. Main Strategies and Progress of Medium-Term Management Plan III-4. Efforts for Sustainability III-5. Profit / Loss Forecasts and Capital Policy Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Bank Holding Company Holding Company - 15-#17Business Strategies _ Corporate Related I Business Feasibility Assessment Customer issues and needs Business foundation Growth Purchase Logistics Production Shipment Distribution Marketing Sales Services Matured Reform/Decline Solution Revenue Results (Millions of Yen) 6,000 Purchase Logistics Production Shipment Sales Distribution Marketing Services 5,000 5,054 139 908 (Various issues and needs in business stages and value chains) Identifying and sharing of customers' management issues lyogin Holdings Banking Securities Systems Lease Formulating concrete supporting measures for enhancement of customers' corporate value Number of Mirai Support Sheet prepared Number of business feasibility assessment investigation committee held Support in Guarantee 1,784 consideration of cooperation with Capital ☑ partner companies, external experts, Think tank local public entities, etc. Credit cards Diverse consulting lineup $ Diverse funding M&A/business succession Staffing business M ICT consulting Lease 2,062 2,198 4,000 3,066 115 3,000 359 2,400 2,200 2,000 2,592 1,000 Others Overseas, derivatives Corporate solutions revenue * * Financing-related (including related derivatives), business succession and M&A, business matching, corporate life insurances, etc. 4,112 202 3,678 171 610 507 2,803 61 4,007 1,178 1,564 3,300 3,000 7,800 7,000 6,669 0 6,257 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan 5,393 Credit cards (etc.) Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2023 Fiscal 2022 Plan Plan Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Aim to expand Group solution revenues by further strengthening cooperation with Group companies - 16-#18Business Strategies _ Corporate Related II - Number of cases for M&As and Business Succession Steadily increased in number of cases for business succession with a record-high result during a half-year period M&A is expected to extend from cases carried over to the second half of fiscal 2022 Staffing Business and Human Resource Development Related Businesses Steadily increased to a total of 1,099 inquiries including 213 contracts since the service started in April 2020 (Number) 200 M&A 150 Business succession 17 35 35 6 13 100 (Number) 600 Number of new inquiries Number of contracts 491 500 400 378 40 300 200 100 129 108 120 110 50 97 0 Fiscal 2020 69 0 Fiscal 2020 99 230 400 400 100 150 45 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan Intra-Group Cooperation Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan Iyo Bank (IBK) Intra-Group Cooperation Iyo Bank (IBK) Holding various seminars Customers lyogin Capital (ICC) lyogin Regional Economy Research Center (IRC) Investment Invest in customers to take over issues such as business succession through cooperation between IBK and ICC Discover new regional businesses by providing risk capital to venture companies (Number) 250 Number of business seminars held (cumulative) (Number) 60 60 52 200 Number of employee seminars held individually by Group companies (cumulative) Number of participants in executive seminars (cumulative) 150 40 124 Management support Customers lyogin Group Companies The entire Group provides multifaceted management support to invested companies Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. 26 100 26 88 20 20 Consider setting up 50 51 77 47 new growth support funds, etc. 12 0 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 -17-#19Business Strategies _ Corporate Related III ICT Consulting Intra-Group Cooperation - Reflecting high demand for DX, both the number of proposals and the number of contracts are on an increasing trend (Number) Number of proposals 700 Number of contracts 700 600 600 483 500 400 301 300 252 200 100 59 75 60 70 44 0 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Fiscal 2023 Plan Plan Lease Intra-Group Cooperation Iyo Bank (IBK) lyogin Leasing (ILC) ✓ Credit Cards <Target: Cumulative number of cards issued> Fiscal 2023: 9,000 <Target: Cumulative number of merchants> Fiscal 2023: 4,000 lyogin Computer Service (ICS) (Millions of Yen) 6,000 (Number) Amount of transactions via corporate cards Number of corporate cards issued (Millions of Yen) 30,000 Amount of transactions (Number) 5,000 Number of merchants of the Group 9,000 Providing technology/advice 5,000 9,000 25,000 4,000- Iyo Bank (IBK) Make optimal proposals through cooperation between IBK and ICS 4,158 2,000 3,773 8,400 20,717 21,131 15,000 Customers 1,000- 8,200 8,800 8,637 8,573 3,000- 8,800 4,000 4,000 3,600 3,261 2,977 -8,600 20,000- 3,000 2,000 Number of contracts (Number) 0 8,000 10,000 1,000 Fiscal 2020 Fiscal 2021 Fiscal 2022 Plan Fiscal 2023 Plan Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023 Plan Plan 2,654 2,711 1,320 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan Customers Support customers in capital investment through cooperation between IBK and ILC Utilize data on equipment needs collected by IBK through meetings and provide proposals for lease utilization by ILC Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Amount of contracts (Millions of Yen) Promote efficiency in expense calculation by cooperating with ICT consulting as well Intra-Group Cooperation Iyo Bank (IBK) ✓ Focus on developing merchants Market has tended to recover partially owing to the resumption of economic activities Jointly manage back-office operations from August 2022 Outsource the Bank's personal card membership operations, etc. to IDC Improve operational efficiency by eliminating similar operations and generate sales resources 12,458 13,258 7,531 lyogin DC Card (IDC) Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan - 18-#20Business Strategies _ Personal Related I Providing integrated solutions and customer experience value for each customer by promoting popularization of DHD services including AGENT app AGENT A bank on your palm HOME House purchasing plan with a smartphone 9:41 =0 マイページ メイン口座 127MASAK 三角 AGENT 125.000 2011/10/06 2 キュウリョウ 2021/10/06 コンビニエンスストア パーソナルアシスタント 也子銀行 コンビニエンスストア いらっしゃいませ 2011/10.06 エミフルMASAK 2540 どのような件ですか? An 162 問い合わせ ライフプラン •ADGE アカウントをしましょう アロランドをお方はグインしてください。 ログイン アカウント Alternative services for branch functions and internet banking The app allows performing procedures from opening of account to inheritance At the end of fiscal 2023 Targeting 100 ✓ Scheduled to implement remitting function in Spring 2023 Creating highly frequent contact points with customers October 2022: Linked with read and write APIs for Visa debit thousands of users Growing as a housing loans infrastructure 73% of HOME rate* and 216 locations of "HOME HOUSE BUILDER," targeting housing companies in the first half of fiscal 2022 ✓ Scheduled to renew main step-up interest rate type products and expand the line-up of group credit life insurance (* Percentage of housing loan application (%) (Hundreds of Millions of Yen) 9,000 Balance of housing HOME rate* 8,900 Customer contact points Building relations with customers 8,800 July 2022: Renewed to UI/UX based on chat function (touch points) Digital touch points by utilizing digital technology 49 Digital operations 8,700 ● Improving usability Life design based on AGENT LIFE PALETTE Simulation tool that allows customers to chart various future plans Customer consultations using HOME) 100 90 80 80 73 70 70 70 60 50 8,950 8,900 40 8,856 8,867 30 Channels that can be used regardless of time and place 8,600- 8,707 20 10 8,500 0 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan LIFE PALETTE P あなたのお金の流れを見ていきましょう シミュレーション結果 LIFE PALETTE- b について 将来どんなことがし たいですか? ° 渡したいもの してください。 Consulting Human consulting Extensively renewed in September 2022 Significant improvement in UI/UX ✓ Easy and simple check in approx. 10 minutes Adding new functions such as "Asset Management Simulation" SAFETY New card loan service that issues notifications on insufficient amount Number of contracts is increasing following line-up renewal in February 2022 "Premium" type which offers interest rates based on "risk ranking" instead of the "borrow amount" Number of contracts is increasing due to the differentiation of services and application function increasing the borrow amount has received a favorable reception, it contributed to an increase in balance Expanded target areas in October 2022 to further strengthen promotion Number of cumulative contracts Providing value according to each customer's life plan and life events (Number) 6,000 By having advance knowledge of users' life events, it makes timely proposals for adequate advice and product/service possible Enhancing appeal for customers in the mass retail category by cooperation of various channels 4,500 3,000 1,500 3,187 6,200 3,600 683 2,233 Providing face-to-face consulting services after sharing life plans with advisors 0 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 19-#21Providing consultation Delving into needs Life Stages Business Strategies _ Personal Related II Asset Building Stage (20s - 40s) Start a job Get married Have children Sharing dreams with customers 将来どんなことがし たいですか? 0 Home purchase Visualizing changes in balance and assets LIFE PALETTE 暮らしの イメージ 予定しているもの、実現したいものを すべて選択してください $ Asset Using Stage (50s - 60s) Children leave home Retire Receive pension Sharing needs Asset Bequeathing Stage (70s -) Prepare for Bequeathing TÅ Saving and Increasing: for future Preserving and Bequeathing: for precious family ✓ Preparing: for unexpected events Closely support customers' lives to delving into their needs In the era of 100-year lifespans, as the lifestyles of our customers diversify, it is necessary to build assets in a planned manner according to life plans. LIFE PALETTE enables the sharing of dreams that customers want to achieve and the visualization of changes in balance and assets to create life plans for each customer. 子どもの学習 車にこだわる Providing consulting services for each customer Saving and Increasing Supporting stable, long-term asset formation based on diversification in terms of time, currency, and assets Providing sophisticated asset management consulting services through cooperation between bank and securities <Change in Group Assets in Custody Balance> *Including individual deposits in foreign currencies Preserving and Bequeathing Responding to diversified and enhanced needs for bequeathing by combined efforts of bank branches and headquarters Offering a range of services, including a wealth of life insurance products, will writing support, civil trust, and handling of the bequeathing process <Number of Customers of Trust-Related Contracts> * Cumulated contract number - number decreased due to death, etc. Preparing Providing sophisticated consulting services in cooperation with HOKEN NO MADOGUCHI GROUP to prepare for future risks and deliver safety to customers Developing system for online consultation as well as face-to-face consultations <Number of Customers and Number of Policies Held in Level (Hundreds of Millions of Yen) 7,000 (Number) 800 (Number) lyo Bank Shikoku Alliance Securities 70,000 6,000 700 60,000 Premium Insurance> 68,500 Number of Customers 61,740 Number of Policies Held 57,227 53,826 SHIKOKU 5,000 2,452 2,460 2,542 2,670 2,850 600 48,323 50,000 ALLIANCE 500 4,000 40,000 400 730 3,000 30,000 300 552 512 2,000 3,601 3,711 3,667 3,770 3,920 20,000 200 405 IYO BANK 28,772 31,328 32,458 36,000 39,500 268 1,000 100 10,000 0 0 0 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2023 Fiscal 2022 Plan Plan Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Fiscal 2020 Fiscal 2021 Plan First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 20-#22Business Strategies _ Ship Related I Environment Surrounding Ship Owners Amid large fluctuations in foreign exchange and interest rates as well as market conditions, investment decisions remain difficult for ship owners due to soaring costs of producing new ships and ship management. Ship Owners' Business Status Favorable factors Ongoing weaker yen, up more than ¥20 in six months ✓ Continuing low yen interest Decrease in supply of small and mid- to small-sized bulkers ✓ Extension of cargo transport distance due to geopolitical events Concerns Sharp increase in U.S. dollar interest Continued high price of steel and materials Decrease in demand of cargo transport due to global economic slowdown Sharp decline in container freight rate in last few months Environmental regulations IMO has adopted a goal of reducing total GHG emissions by 50% by 2050. "Strategy on the reduction of GHG emissions" by IMO 2008 Base year of emissions 2023 2030 Target 40% efficiency improvement 2050 Target 50% reduction in total emissions Long-term Target up to 2100 GHG zero emissions (Note) IMO: International Maritime Organization (Note) GHG: Greenhouse Gas New regulations on energy efficiency targeting existing ships will start in 2023 to achieve the 2030 target Our Loan Policies in Line with Solutions in Preparation for Risks of Market Condition Downturn Emphasis on a portfolio not overly depending on short-term charters/charters related to market condition and asset value of ships held Proposing derivatives, etc., that prepare for risks of future fluctuation in foreign exchange and interest rates Emphasis on long-term relationships and make judgements on customers' comprehensive ability in a multilateral manner Financial position, operating balance and market value Comprehensive ability Solid relationships Management policy and future prospects Determine policies on investments and loans by making judgements on customers' comprehensive ability Efforts to Support Decarbonization in Ocean Transport Loans for ships manufactured by Japanese shipbuilding yards that have high fuel efficiency Initiatives on loans for LNG dual-fuel ships Loans for ships following the regulations on energy efficiency starting 2025 in advance Initiatives for Sustainability Linked Loans (March 2021) and Transition Loans (September 2021) Efforts toward matching energy saving device manufacturers with ship owners Ratio of ships designed with environmental initiative in mind in loan cases decided EEDI Phase 3 38.1% 42.6% 19.3% Dual-fuel Ships (LNG, LPG and Methanol) Conventional Ships and Used Ships *Within ship-related cases approved in the recent 6 months Assets with quick turnover rate Decarbonization in Ocean Transport and Asset Value of Ships Relatively high environmental performance Domestic ships on our loans are on average 5 years old and are mostly manufactured in Japan, and have relatively high fuel efficiency Loans for ships, in principle, have a maximum period of 15 years after manufacture, and most ships are sold by around 10 years old, resulting in a quick renewal cycle for the assets Copyright © 2022 lyogin Holdings, Inc. All Rights Reserved. - 21 -#23Business Strategies _ Ship Related II Loan Balance for the Maritime Industry (Hundreds of Millions of Yen) 14,000- For other maritime industries and overseas ¥1,227.1 billion Status of Balance Changes by Segment For Domestic and Overseas Ocean Transport Significant increase in newly executed amount due to the increase in number of cases executed and the trend of ships getting larger and higher priced In addition, significantly weaker yen* during the fiscal year resulted in an increase in foreign- denominated loan amounts when translated into yen For domestic and overseas ocean transport 12,000 12,271 (Hundreds of Millions of Yen) 9,500 3,178 10,000 9,000 *In comparison with the US dollar and Swiss franc Breakdown of changes in balance for domestic and overseas ocean transport in the first half of fiscal 2022 +1,370 +662 9,093 [Reference] March 31, 2022 TTM to US dollar: 122.39 yen TTM to Swiss franc: 132.54 yen 2,960 2,661 8,500 8,000 2,218 8,000 7,684 (465) (158) Compared to fiscal 2021 +1,409 6,000- 7,500 9,093 7,000 September 30, 2022 TTM to US dollar: 144.81 yen TTM to Swiss franc: 148.58 yen Impact from change in exchange rate per yen US dollar: 1.98 billion yen Swiss franc: 1.97 billion yen (As of September 30, 2022) Fiscal 2021 4,000 7,303 7,684 New transactions Scheduled payment Advance repayment Impact of foreign exchange rates First half of Fiscal 2022 6,451 For Other Maritime Industries 2,000 0 Fiscal 2019 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Increase from the end of the previous fiscal year mainly due to capital investment for logistics facilities of coastal trading vessels and maritime businesses For Overseas Offices Increase in amounts when translated into yen owing to ongoing weaker yen despite temporary decrease in balance in dollar due to selling ships and advance repayment from surplus funds Solutions the Bank Aims to Provide Improvement in Risk Consulting Capabilities Concerning the Shipbuilding and Ocean Transport Industries Improvement in Research and Analysis Capabilities Concerning the Maritime Industry in General Providing methods to control risks for ship owners Group-wide efforts to solve issues marine equipment manufacturers we have business relationships with are facing Gathering of extensive information centered on Tokyo and Imabari More advanced case evaluation based on gathered data and market position analysis Acquisition of operational knowledge by dispatching employees to ship management companies Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Provision of Diverse Funding Sources Enrichment in Activities Connecting Domestic and Overseas Maritime Industries Composition of syndicated loans based on the framework of the TSUBASA Alliance, etc. Initiatives for Sustainability Linked Loans and Transition Loans Loans for higher priced next-generation-fuel ships Aiming for business matching and case intermediation through a unique information network - 22-#24Business Strategies _ Market Investment I Investment Policy by Risk Category (Risk category) (Direction) Yen-denominated bonds Foreign bonds Securities Performance (Policy for investment) (Hundreds of Millions of Yen) Keep the balance as a bond including foreign bonds as assets inversely correlated with stocks. 1,500 Realized profit/loss (= Interest and dividend income + gain (loss) related to securities) Total profit/loss (= Periodic profit/loss + change in gain/loss on evaluation) Restore balance For foreign bonds (with forex hedges), the balance is temporarily shrunk in anticipation of rising interest rates. In the future, the balance is planned to be restored gradually. 1,200 900 1,014 (with forex hedges) 600 Foreign bonds (without forex hedges) Not change ● Adjust the balance and implement strategic re-balancing according to the situation while keeping a certain amount to secure stable profit from carry trading. 282 267 300 175 0 Domestic and overseas stocks Decrease Sell off stocks held for strategic purposes if the necessity of holding is not recognized. Purchase stocks held solely for investment purposes of which growth is expected in the medium- to long-term view. -300 Fiscal 2020 (97) Fiscal 2021 (99) First half of Fiscal 2022 Total Yield 1.64% 1.69% (Domestic currency yield) (1.54%) (1.54%) 2.05% (1.54%) Alternatives, etc. Not change Consider investment to secure stable carrying and portfolio diversification. (Foreign currency yield) (1.85%) (1.94%) (2.84%) Balance of Securities at Market Value by Risk Category Domestic and overseas stocks (Hundreds of Alternatives, etc. Millions of Yen) (including investment trust) 20,000 Foreign bonds (without forex hedges) Foreign bonds Yen-denominated (with forex hedges) bonds (Hundreds of Millions of Yen) 5,000 3,502 4,000 2,821 3,000 2,000 1,000 0 Total for last 10 years (right axis) -1,000 * For fiscal 2022, values recorded only for the first half Portfolio Risk Sensitivity and Duration Portfolio risk sensitivity (As of September 30, 2022) Yen-denominated bond portfolio 10BPV Foreign bond portfolio (with forex hedges) 10BPV Foreign bond portfolio (without hedges) 10BPV Stock portfolio Nikkei Stock Average ¥1,000V Duration ¥2.6 billion ¥1.1 billion ¥0.8 billion/exchange ¥10V ¥20.2 billion ¥10.3 billion 6,200 5,100 5,200 15,000 1,885 5,201 (Of which, JGBS) 5,045 1,000 1,017 5,600 5,700 4,274 -9.15- 10,000 3,489 10 years 2,657 8.27 8 years 2,956 3,002 2,928 2,900 2,900 6 years 5,000 4 years 4,088 3,742 3,751 3,700 3,700 4.26 2 years Yen-denominated 1,428 1,467 1,318 1,500 1,500 bonds. 0 years 0 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Plan Fiscal 2023 Plan Fiscal 2019 Fiscal 2022 Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. 5.42 5.21 4:80- -4.93- 3.86 Foreign bonds (with forex hedges) Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2022 Plan Fiscal 2023 Plan - 23-#25Business Strategies _ Market Investment II Loan Balance Plan [Financial Market Business Office] (Hundreds of Millions of Yen) 1,500 Year-end balance 1,180 1,200 900 600 300 1,358 1,193 0 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 1,400 1,350 Investment Status of Foreign Currency Investment and Procurement [September 30, 2022] <Loans + Market Investment (Securities) > Mainly assets with high liquidity Mainly assets with low liquidity Procurementi Deposits, etc. 34.0% Fiscal 2022 Plan Fiscal 2023 Plan 0% 20% Portfolio by Region and Industry [Financial Market Business Office] Loans 77.5% Long-term procurement 30.1% Securities, etc. 22.5% Short-term procurement 28.1% Repo procurement 7.8% Choose foreign currency procurement methods in line with asset composition 40% 60% <Loans, etc.> 5.7% 4.7% Short-term procurement is conducted for substantial short-term loans 9.2% 9.9% Investment Loans Loans with multi- currency terms 13.1% 10.6% Stability gap is positive (excessive investment) 53.4% 49.2% 11.1% 18.6% Procurement Deposits, etc. 41.5% Long-term procurement 36.6% Commitment linel 24.8% 14.5% Japan North America Europe Asia/Oceania Other Electricity and gas Transportation Manufacturing Various services Finance Other Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. 0% 20% 40% 60% 80% 100% Liquidity gap is negative (excessive procurement) Cash flow risk is guaranteed with commitment lines 80% 100% 120% 140% Stability gap: Loans, etc. - (Deposits, etc. + Long-term procurement) Liquidity gap: Loans, etc. - (Deposits, etc. + Long-term procurement + Commitment line) - 24-#26Cross-Sectional Efforts Supporting Business Strategies _ BPR Strategy I Added new function "Inheritance procedures" to AGENT app, a bank on your palm Additional functions have been gradually released aiming to lower the load of administrative work both on customer and the Bank sides and to provide unprecedented experiences Effect of BPR at Bank Branches (Amount of administrative work/Number of administrative staff) [Administrative staff in charge of operations] As of September 30, 2022 Minus 365 Administrative Staff [Compared to fiscal 2017] AGENT Tab AGENT APL New Functions Next AGENT Tab AGENT APL [Inheritance procedures] 1,400 1,306 1,300 1,253 Amount of administrative work Number of administrative staff マイページ AGENT P Upload required documents to the app Reception by employees via video chat Available from inheritance application to procedure 1,200 1,142 1,100 1,026 1,000 965 941 Digitalized approx. 40% of administrative works at bank branches 900 Realized "a bank on your palm" Possible to make inheritance procedures from home, etc. Patent 800 applied 800 700 600 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2023 Plan Fundamental review of workflow using the next bank branch system (scheduled) Due to system renewal at bank branches scheduled in 2023, workload equivalent to approx. 156 administrative staff is expected to reduce "New Centralized Operation System" Reducing operations at bank branches Leveling load in peak and off-peak periods Expanding headquarters- centralized operations Reducing administrative work related to ordering <Development of BPR Measures> Fiscal 2015 Medium-Term Management Plan Fiscal 2018 Medium-Term Management Plan "AGENT app," a bank on your palm ✓ Centralizing operations such as slips handled on the day to the headquarters ✓ Paperless handling for deposit and withdrawal, and remitting ✓ Downsizing number of branch terminals, targeting cutting by half Centralized storage of contracts and documents stored in the headquarters Electronic contracting and cooperative execution for business loans System renewal at bank branches Loan support system renewal 2015 2018 [Administrative staff in charge of loans] 450 433 Amount of administrative work Number of administrative staff 403 404 350 As of September 30, 2022 Minus 58 Administrative Staff [Compared to fiscal 2019] 375 350 AGENT app "Inheritance procedures" Operations of the Loan-Related Administrative Work Support Center covered all bank branches ■New online system for international affairs 250 2021 Introduced Branch Link at all bank branches (remote management) 2023 Building taxes and government fees collection system Started trial operation of the Headquarters Operation Support Center Outsourced cash management business to Group company (IBS) Transition to digitization of prospectus delivery 150 Fiscal 2019 Fiscal 2020 Fiscal 2021 First half of Fiscal 2022 Fiscal 2023 Plan - 25- Copyright 2022 lyogin Holdings, Inc. All Rights Reserved.#27Cross-Sectional Efforts Supporting Business Strategies _ BPR Strategy II [Changes] Transitioning to a holding company structure/Centralizing common and overlapping operations lyogin Holdings Securities Systems Lease Banking Credit cards Guarantee Capital Centralizing common and overlapping operations → Utilizing group functions and digital technologies [Current situation] Effect of headquarters workload reduction (Working hour reduction) Reduce headquarters operations, including abolishment and review of operations, through automation of operations utilizing BPR and RPA With development and maintenance structures for application flow database and RPA, entirely created in-house, build internal management structures (Thousand hours) 200 As of September 30, 2022 146 Thousand Hours Reduction 150 Centralizing common and overlapping operations dispersed Think tank Equalizing and improving work levels Minimizing administrative and routine works 100 Development, operation and maintenance of system RPA BPR 50 Licensed [Compared to fiscal 2017] 200 Thousand hours 146 Thousand hours Quill 0 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 First half of Fiscal 2023 Fiscal 2022 Plan [Future] Based on changes and current situation, expanding efforts for productivity improvement to the entire group Centralizing common and routine operations Expanding RPA (including BPR) to the entire Group Establishment and maintenance of business infrastructure Expense payment Document preparation Centralize $ III DB RPA development development team team Expense Document payment preparation ¥ $ Improving productivity by minimizing routine works Digitalization of application procedures RPA automation Going paperless Horizontal expansion of proven RPA following obtaining the license Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Groupware Electronic contracts Electronic approvals I Sharing and effectively using resources Horizontal expansion of proven BPR measures as cross- sectional efforts on a group-wide basis Consideration of sharing and reallocation of resources within the group Taking into account the holding company structure and renovation of the head office, further accelerate BPR to achieve workstyle reforms - 26-#28Cross-Sectional Efforts Supporting Business Strategies _ Branch Plan I Next-generation Branches/Securing Co-working Space for the Bank and Group Companies Kawanoe Branch (and Kinsei Branch) * Newly opened in July 2022 Review the locations and functions of existing channels Review of Branches and ATM Locations New channels and efforts in line with customers' changes in lifestyles AGENT app * Released June 2021 150 148 Number of branches 750 145 142 Number of ATMs 700 140 650 635 135 134 650 130 ✓ 130 128 600 125 530 550 527 ■Shift to Next-generation Branches with Satto Madoguchi (Quick Counter) and AGENT system (Introduced to 102 branches) 524 120 500 115 <Transaction lobby > <Consulting lobby> 110 Released banking app that can provide the same customer experience as at a counter reception ✓ Totally renewed design to be more intuitive ✓ Added functions including various applications and inheritance procedures Gradually increasing transaction menu lyogin SMART * Released August 2021 Micro branches (branches not having account) for the purpose of maintaining contact points with the community after branch closure いよぎん SMART Realizing cashless processing and no filling- out of paper slips (to save customers' work) ■Labor-saving operations by improving administrative efficiency Available until 5:00 p.m. on weekdays for various applications and consultations Listening closely to customers to provide values Holding seminars and consultation events Securing Space for Working with Group Companies and Strengthening Cooperation Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 450 First half of Fiscal 2022 Eliminating excessive branches by optimizing branch locations while maintaining points of contact with customers Reducing the number of installed ATMs against a background of increases in convenience store ATMs and cashless settlements Review of Branch Functions Shift to labor-saving branches Branches located in government offices: 5 branches ■Review of business hours Extension of business hours: 33 branches *Excluding account transactions Adoption of lunch break: 11 branches <Branches> Nakayama and Kaminada (2 branches) lyogin SMART plus * Released August 2022 Branches specialized in function of transactions to respond to customers' persistent needs <Branches> Wake, Johoku, Kuwabara, and Awai (4 branches) いよぎん SMART plus Advanced Use of Branches and Environmental Friendliness <Fukuoka Branch> To be completed in April 2024 <Nagoya Branch> To be completed in July 2024 Expansion of the Group Head System DIK Providing space for business meetings and consultations with customers that can also be used by Group companies ■Securing an open seating working space that can be used both by headquarters and Group companies Providing space with a large capacity to hold seminars and consultation events Copyright © 2022 lyogin Holdings, Inc. All Rights Reserved. Introduction of the Group Head system Core branches (full-service banking): 26 branches Linked branches (branches specialized in individual services): 63 branches ■Newly establishing Matsuyama Chuo Group (August 2022) Strengthening cooperation between Okaido (Okaido Branch) and Gintengai (Minatomachi Branch), the central shopping streets of Matsuyama City Based on regional needs, renovating branches to include rental spaces targeting at third parties to contribute to liveliness Both Fukuoka and Nagoya branches aiming to obtain ZEB Ready certification - 27-#29Cross-Sectional Efforts Supporting Business Strategies _ Branch Plan II Overview and Issues of Current Head Office ■Completion Building Outline <Main Building> October 10, 1952 <Annex> Overview and Concept of New Head Office Building Outline of New Head Office Building <New main building> <New annex> ■Completion Spring 2029 Spring 2025 ΤΑΚΕΝΑΚΑ CORPORATION To be determined Concept Sustainable building creating brightness and prosperity for the region Sustainable design IYO 200 "We will construct a new head office building that will contribute to the region toward the 200th anniversary of our foundation." May 20, 1968 ■Design NIKKEN SEKKEI KOMU NIKKEN SEKKEI KOMU ■Design TAKENAKA CORPORATION ■Construction TAKENAKA CORPORATION TAKENAKA CORPORATION Construction To be determined Total floor area 5,047.4m² Structure Steel-framed reinforced concrete 11,634.6m² Steel-framed reinforced concrete Total floor area Approx. 30,000m² Approx. 13,000m² Create Structure Steel-framed structure Steel-framed structure Number of stories 4 stories above ground 8 stories above ground and 2 stories below ground Number of stories 12 stories above ground, 11 stories above ground 1 story below ground Connect <Main Building> <Annex> Environmental Certification Issues (1) Responding to aging 70 years have passed since construction and defects have occurred in facilities, including air-conditioning equipment. (2) Organizational centralization/ Work style reforms (3) Responding to BCP Headquarters organization and affiliated companies are dispersed in Matsushima City, which causes issues of information sharing, etc. Office space is too small and inappropriate as office environment in the era of coexistence with COVID-19 and post-COVID-19. Issue of disaster resistance of the building in emergency situations such as heavy rainfall and the Nankai Trough earthquake Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. ■ CASBEE (Comprehensive Assessment System for Built Environment Efficiency) BELS Secure Eco-friendly We will create an office that will activate communication and create new value. We will provide places such as a large hall and co-working space where people and the community make a connection. We will create a solid and reliable building with earthquake-proof structure and the latest security system. We will introduce sustainable architecture friendly to people and the earth by actively using wood and adopting energy-saving technologies. Conceptual Images of Buildings (Building-Housing Energy-efficiency Labeling System) Target level is under consideration - 28 -#30Cross-Sectional Efforts Supporting Business Strategies _ IT Plan Enhancement of IT governance Efforts for Optimization of IT Investment lyogin Holdings Banking Securities Systems Lease Credit cards Guarantee Capital Think tank Aiming for optimization of IT investment in the Group as a whole Centralize management of system investment and development projects from the perspective of group-wide optimization ✓ Unify processes of advance verification and check of investment effects for large scale investment cases Development and Improvement of Data Utilization System Centralized Management of Corporate Customers' Information of Each Group Company 12100 BE 2,000,000 a 20 3,000,000- 1,000,000- 300 K IN Contact person at each Group company Contact records Transaction status Revenue status, etc. (scheduled to display) ✓ Considering introduction of a group-wide dashboard that centralizes corporate customers' information of each Group company including the Bank ✓ Aiming for customer-oriented business operations, strengthening relation management for the entire Group to provide optimal products and services Example of Information Enhancement through EBM* Contract rate through EBM "Deposit of Life Insurance Premium" D Number of Persons with Capacity to Utilize Data Analyzing Tool Commonalize IT infrastructure in the 7%г 6.2% Group 6% 5.1% 5% 104 persons 4.2% 3.9% 5 persons (1 dept.) 4% (12 dept.) 3.1% 3.2% 3.0% 3% 2% April 2011 September 2022 1% Contract rate is increasing due to model improvement based on analysis of past contract results 0% First half of Second half of Fiscal 2019 Fiscal 2019 Strengthening Cybersecurity across the Group By upgrading I-CSIRT*, an organization responding to cyberattacks, to the Holding Company's organization, the whole Group will develop a system to facilitate cooperation under emergency and normal situations Management Relevant authorities Emergency Office I-CSIRT Each Group company Police Financials ISAC Japan Industry associations Security vendor Major Efforts of I-CSIRT ✓ System development Build a robust system by introducing "Security by design" Human resource development Focus on developing management in charge of strategies for planning and direction of cyber security, as well as security human resources necessary for respective divisions *CSIRT of the Group CSIRT is a collective term of organizations which deal with matters related to computer security. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. (at the introduction) Expand personnel capable of utilizing data through training and hands-on support by specialized departments Aiming to be a data-driven organization where every department makes decision based on data First half of Second half of First half of Second half of First half of Fiscal 2020 Fiscal 2020 Fiscal 2021 Fiscal 2021 Fiscal 2022 ✓ Contract rate is increasing owing to a change of delivery conditions for "Deposit of Life Insurance Premium" in May 2021 Aiming to enhance EBM by analysis of various data *EBM (Event Based Marketing): Marketing activities based on occurrence of customers' life and financial events. The Group uses EBM as a method to realize customer-oriented CX sales. -29-#31Cross-Sectional Efforts Supporting Business Strategies _ Personnel Development Plan Improving Base Skills Implementing various measures based on three key points to improve the "base skills" of each employee (1) Personnel with an Area of Expertise Revised personnel system (October 2022) → Classify specialized skills into eight career fields Special skills Corporation Individual Ship Market Technology Planning Risk management Support Human resource development in cooperation with specialized departments Digital Innovator Certification 861 persons Digital Business Basic Workshop 47 persons - Improving Special Skills Departments in charge play a central role in the development, and employees may be dispatched to specialized institutions, including those outside the Group, to improve special skills and deliver greater value Corporation/Individual/Ship/Planning Dispatching employees for corporate academy training Training program for young employees Dispatching employees on assignments outside the Group → Acquisition of external expertise Technology ✓ Market Short-term dispatch training in the Funds Operation & Securities Division Securities analyst certification holders →74 persons (As of September 2022) Planning (Digital Business) Redefine and clarify development policies "Starter," "Operating Personnel," and "High Level Personnel" Conducting level-based development measures → Basic workshop, practical training, e-learning, etc. Basic operation knowledge and skills/Finance Base and IT literacy/Business skills/Common sense Skills and morals, etc. Enhancement of short-term dispatch trainings, etc. Accumulated number of examinees ✓ Expanding the scope to Regional Vitalization Division and Shikoku Alliance Securities from fiscal 2022 Accumulated number of trainees ✓ Providing for employees of 8 divisions and companies, in addition to the existing 6 divisions, an opportunity to attend training, as well as autonomously consider their own career development (2) Establishment of an Environment Which Facilitates Autonomous Learning Expansion of online learning tools Making workshops online ☑ Start of shorter classes on demand New initiatives Introduction of education and training apps for all new employees Developed and started trial of skill map for visualizing skills ✓ Formulated guides for each career field Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. (3) Responses to Diversifying Careers Introducing training programs by business (field) open to all employees Promotion of challenges to advanced qualifications (Small and Medium Enterprise Management Consultant, MBA, 1st-grade CFP, etc.) ✓ Continuation and expansion of qualification acquisition incentive system Started trial of one-on-one meetings to improve quality of communication and ensure opportunities Attending cloud-related training Improving IT-related skills Skill Compass Level 3 or higher → Improving the skills of developers Strengthen human resource development and initiatives across the Group Conduct level-based workshops for all Group companies ✓ Jointly conduct from April 2022 (Number of trainees at Group companies (excluding the Bank): 54) Expanded the scope of short-term dispatch trainings to Group companies apart from the Bank ✓ Added Shikoku Alliance Securities in June 2022 Establish a group-wide development system and strengthen initiatives Banking Securities Guarantee Systems Capital Lease Think tank Credit cards Create and provide diversified value - 30-#32Index I. Summary of Earnings for the First Half of Fiscal 2022 II. Transition to Holding Company Structure III. Group Medium-Term Management Plan III-1. Overview of Medium-Term Management Plan III-2. Major Numerical Targets of Medium-Term Management Plan III-3. Main Strategies and Progress of Medium-Term Management Plan III-4. Efforts for Sustainability III-5. Profit / Loss Forecasts and Capital Policy Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Bank Holding Company Holding Company - 31 -#33Efforts for Sustainability I-1 _ Summary of Response to TCFD Recommendations Framework of TCFD Overview of Initiatives Governance Strategies Risk Management Benchmark and Targets Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Established a Group Sustainability Committee operated by the Group Management Meeting and set up a reporting structure to ensure that important matters could be appropriately and timely reported to the Board of Directors Expanded the scope of the "Environmental Policy" and "Policies on investments and loans for specified sectors" to Group companies other than the Bank [Opportunity] Established a support team for carbon neutrality measures Expanded the visualization service of CO2 emissions from customers through collaboration with external organization, in addition to alliance agreements with local electricity companies Promoted sustainable finance initiatives such as green loans, sustainability linked loans and transition loans [Risk] Conducted scenario analysis of physical risks for the Bank's corporate customers regarding risks such as an increase in credit costs, etc., resulting from damage in collateral real estates and interruption on business caused by flood For migration risk, risk importance assessment was conducted on the two cores of risk assessment (impact) by sector and the Bank's portfolio composition ratio (credit amount), and the "Electricity/Gas” sector was selected. Then, we conducted scenario analysis for the sector. Calculated the ratio of carbon-related assets to loans and other assets mainly based on the recommended disclosure items in the TCFD Recommendations [End of fiscal 2021: 28.1%]. Added items concerning environmental friendliness (business status in consideration of climate change and environment) as evaluation items in the "business feasibility assessment," which the Bank has put efforts into Set a CO2 emission reduction target (combining scope 1 and 2) 50% reduction by fiscal 2030 (compared to fiscal 2013) [Fiscal 2021 results: 28.8% reduction] Set a sustainable finance target Cumulated transaction amount from fiscal 2021 to fiscal 2030: ¥1,400.0 billion, including ¥700.0 billion in the environmental area [Cumulated results: ¥151.0 billion] -32-#34Efforts for Sustainability I-2 _ Scenario Analysis Physical Risks Occurrence of flood damage caused by climate change Financial impacts on business borrowers Direct damage Decrease in sales due to suspension of operations Transition Risks Tightening of regulations on restrictions of carbon emissions/ introduction of carbon tax Damage on real-estate collateral Impact on B/S Impact on P/L Impairment of collateral value Increase in capital investment related to renewable energy Increase in borrowings Decrease in sales Occurrence of carbon costs Increase in credit-related expense upon occurrence of flood damage Increase in credit-related expense following a transition to a decarbonized society • Scenarios RCP 2.6 Scenario (2°C Scenario) and RCP 8.5 Scenario (4°C Scenario) publicized by the Intergovernmental Panel on Climate Change (IPCC) Scenarios Analysis target • The Bank's business borrowers Analysis target • Analysis method Calculate an increase in credit-related expenses in consideration of financial impacts on business borrowers and damage on real-estate collateral upon occurrence of flood damage and damage on real-estate collateral, as well as the probability of flood damage for each of the climate change scenarios. Analysis method Below 2°C Scenario (2°C Scenario) and Net Zero 2050 Scenario (1.5°C Scenario) publicized by the Network for Greening the Financial System (NGFS) Electricity generation companies and gas service companies among the Bank's business borrowers (excluding renewable energy related) Calculate an increase in credit-related expenses by calculating impacts of tightening of regulations on restrictions of carbon emissions and introduction of carbon tax following a transition to a decarbonized society on an individual company basis, and estimating future financial forecast until fiscal 2050 Analysis period • Until 2050, based on data as of March 31, 2021 Analysis period Until 2050, based on data as of March 31, 2021 Analysis Analysis • A total of ¥4.6 billion to ¥7.5 billion increase in credit-related expense result result 2°C Scenario: A total of ¥0.08 billion increase in credit-related expense 1.5°C Scenario: A total of ¥2.6 billion increase in credit-related expense -33- Copyright 2022 lyogin Holdings, Inc. All Rights Reserved.#35Efforts for Sustainability II Sustainable Finance Supporting customers' efforts toward sustainable management, which is of increasing social interest Sustainable Finance and Green Bonds -Financial support for customers' sustainable management sophistication - Sustainable Finance Executed Green loans Sustainability linked loans Cumulated transaction amount of sustainable 14,000 finance (Hundreds of millions of Yen) Sustainable finance (Of which, the environmental area) Cumulated transaction amount from fiscal 2021: ¥151.0 billion (including ¥96.6 billion in the environmental area) Transition loans Transaction amount in the first half of Fiscal 2022: ¥58.3 billion (including ¥35.7 billion in the environmental area) 7,000 Key sustainable finance projects Green bonds Renewable energy businesses related ¥54.9 billion 926 1,510 966 Sustainable finance and green bonds ¥14.6 billion 609 Private placement bonds (environmental private placement bonds and SDGs private placement bonds, etc.) Fiscal 2021 ¥18.9 billion First half of Fiscal 2022 Fiscal 2023 Positive impact finance Started handling positive impact finance in July 2022 →lyo Bank comprehensively analyzes and evaluates the environmental, social, and economic impact of customers' corporate activities and supports their initiatives to increase positive impact and reduce negative impact Entered into agreement for the first case with the Educational Corporation SAIBI Gakuen → Utilized the framework of positive impact finance for construction of a new school building for SAIBI High School NEWS RELEASE 伊多銀行 ポジティブインパクトファイナンス評価 <学校法人济美学園 様> Support customers to refine their sustainable management We received a second opinion on the compliance of lyo Bank's positive impact finance with the PIF Principles* from Rating and Investment Information, Inc. *Established in 2017 as principles for financial institutions to proactively make investments and loans with the aim of achieving sustainability Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. ポジティブイン ¬ËSG+SD+++ いたします。 GIT, PIERLOT. FROE ---- TEST, IL PEPOR UCSON COUT, MODERN しています。 SML MOËÁG «SDG BROKE してまいります。 E AURRIERUCAN RE つるため ONPAR A ている RICHEPP A - 34-#36Efforts for Sustainability III Revitalization of the Region by Business Foundation Support Number of Business Foundation Support The First in Japan! Sustainable Tourism Business Utilizing Farmed Tuna Tourism and fishery operators are working together and demonstrating trials of "Pole-and-Line Tuna Fishing Tour" with subsidies from the Japan Tourism Agency. March 2021 March 2022 September 2022 Purpose Business foundation planning support 366 352 202 resources Of which, start-up loans (with/without Credit Guarantee Association) Of which, referrals to government-affiliated financial institutions and start-up support 301 217 105 Creation of profitable local signature products Integrated support from creation of contents to development of sales channels utilizing local tourism Revitalization of primary industry and tourism industry 17 19 9 organizations Uwajima Project Pole-and-line fishing ANA Akindo, etc. lyo Bank challenge by ANA cabin crew Of which, venture companies registered for grants or investments 24 18 1 *Businesses within 3 years of establishment are counted Continuing from last year, the Bank supports the operationalization of customers during the start-up period, centering on "start-up loans" 80 Revitalization of Local Economy by Crowdfunding [Number (cumulative)] Overview of initiative Commercialization of "Uwajima Farmed Tuna Pole-and-Line Fishing Tour" "Live Streaming Tour: Tuna Cutting Demonstration by a young female professional" and sales of tuna products through e-commerce ✓ Local production and consumption of Uwajima farmed tuna at local accommodation facilities in the prefecture Young female professional cutting up a whole tuna [Number by category] Collaboration with Two National Institutes of Technology in Ehime Prefecture for Regional Revitalization 伊予銀行 BO BANK IVO BANK 70 50 60 50- 10 40 30- 20 46 36 28 19 72 65 57 50 50 Business foundation Regional revitalization 22 25 Total 72 New products and services 25 Entered into "Collaboration Agreement on Regional Revitalization and Manufacturing Support" Raise awareness of local companies among students of national institutes of technology to lead to an increase in the rate of finding jobs in the prefecture Activate collaboration with students and professors of national institutes of technology to create value and discover start-up cases National Institute of Technology, Niihama College IYO BANK RIF BANK *** DBANK ** National Institute of Technology, Yuge College lyo Bank 10 Second half First half of 2018 of 2019 Second half. First half. of 2019 of 2020 Second half of 2020 First half of 2021 Second half First half of 2021 of 2022 The Bank subsidizes part of the fees paid by customers to crowdfunding companies to support projects on starting business and regional revitalization in Ehime Prefecture Overview of collaboration Exchange of information and support through promoting industry-academia-government collaboration Collaboration to solve regional issues and revitalize the region ✓ Support for manufacturing and human resource exchange and development Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. IO BANK #14 YUSE KUGEIYOHANK 伊子银行 R * YO BANG MORANK MAA YUGE SHOP 伊予银行 AIRON MOBANK IR YUDE EMA 伤 AK BO 菜 MOR SP 3 XBA -35-#37Efforts for Sustainability IV Diversity Review of Personnel System (October 2022) New generalist career track Re-employment age limit 70 years old Specified generalist career track career track 65 years old Generalist Reviewed re-employment system for resigned employees Introduced a referral recruitment system Integrated generalist career track and specified generalist career track into new generalist career track >Creating an environment in which employees can work actively regardless of courses, gender, etc. New generalist career track enables employees to decide whether to transfer →Aiming for a system that makes it easier for employees to balance work and private life without give up promotions Raised the re-employment age limit of senior employees from 65 to 70 >Creating more fulfilling lives and work as well as opportunities for seniors to stay active Reviewed the re-employment system for resigned employees and abolished requirements for period of separation from employment, etc. to allow them to return immediately as the Bank's employees after resignation Introduced a referral recruitment system to ensure diverse recruitment measures Expanded Support System for Employees Who Raise Children while Working Continued to achieve 100% of the childcare leave utilization rate for men and women since fiscal 2016 Newly established parental leave after birth in October 2022 as a more flexible and accessible system to allow employees to take up to 4 weeks of leave within 8 weeks after childbirth Health Management Maintain and Increase Employees' Health Established the health management declaration and implemented measures such as subsidizing costs for health checkups and granting special leave, based on the understanding that the corporate sustainable growth is supported by human resources Providing health checkups, lending out wearable devices and introducing health management system at the lyo Bank 2022 健康経営優良法人 Health and productivity Recognized in the Certified Health & Productivity Management Outstanding Organizations Recognition Program for five years consecutively Developed a Health Management Strategy Map to systematically organize the past health management initiatives. Work Style Reforms Continued to implement the "Smart Working Challenge," an initiative for work style reforms at the lyo Bank [Results at the lyo Bank] Changes in Overtime Working Hours under Labor Standards Act プラチナくるみん っています 18.0 hours 6.6 hours 4.4 hours ✓ Complete flexible working hour system Working-hour interval system Strategy Map Face-to-face guidance for employees working for long hours Ensure full salary and bonus during parental leave after birth Employees can also work during leave from the perspective of promoting flexible work styles Use of Birth Name in Business • Employees can continue to use their birth name in business even if they have changed their family name in the Japanese family register after marriage, etc. January to December 2015 January to December 2018 January to December 2021 Change in Paid Leave Utilization Rate 17.6% Female Manager Ratio/Average Years of Service 16.3% 14.9% Results at the lyo Bank → Increasing steadily year after year 65.2% 73.3% 12 years and 11 months 55.3% 12 years and 4 months 女性が活 “ざいます 11 years and 8 months March 2022 January to December 2015 January to December 2018 January to December 2021 March 2021 March 2020 Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Overtime working hours under Labor Standards Act are decreasing ✓ Employees are encouraged to use at least 11 days of leave per year Paid leave utilization rate is increasing -36-#38Efforts for Sustainability V Environmental Protection Contribution to Local Communities 2. 6 ТЕЗМАСТЕ 555 12 13 TUE 14 15 17 Q lyo Bank Evergreen Forest Established in 2008 Under the "Agreement on Forest Creation Activities" which was entered into with Ehime Prefecture, Ozu City and Forest Fund of Ehime, we are making efforts to foster forests in four locations in Ehime Prefecture. lyo Bank Environment Foundation "Evergreen" (public trust) We support Established in 2008 Applications are invited once every year from April to August organizations and individuals who are engaging in environmental preservation activities in Ehime. To this day, we granted a total of ¥65 million to 179 recipients. Fiscal 2021 "Tada Eco-group Tanpopo" 1 Freu 2. 4 ** 555 10 *J** 11 ABE Iyo Bank Regional Cultural Activity Assistance Program Established in 1992 Applications are invited twice a year from June to July and from December to January We grant part of funds for activities of parties which carry out "grassroots" cultural activities in Ehime and granted a total of ¥250 million to 1,296 organizations. In addition, "special applications" targeting organizations damaged by the heavy rain in July 2018 are also invited. アート 61st recipient "Dozen Daiko LA-BANTA" lyo Bank Social Welfare Fund (Public Interest Incorporated Foundation) Established in 1976 We support improvement in social welfare and human resource development for the next generation in Ehime Granting scholarships to high school students in single or no parent families Employment subsidies for children living in child welfare institutions, etc. lyo Bank Social Welfare Fund (Public Interest Incorporated Foundation) Donation of social welfare equipment to social welfare institutions, etc. Donation of subsidies for buying books to high schools, etc. lyo Bank Evergreen Forest (Matsuyama City) Diversity BUGATT 5 10 H Jyogin Challenge & Smile Established in 2018 lyogin Challenge & Smile Co., Ltd. has been established as a special subsidiary company with the purpose of promotion of employment of persons with disabilities. It engages in various initiatives aiming to create a workplace where they can work actively with local communities, including development of goods, sales of goods at rest stops, event venues, etc. in cooperation with local companies, and succession of traditional industries. SDGs Card Game Started in 2021 lyogin Regional Economy Research Center is conducting "2030 SDGs Card Game" training for local companies and organizations. Anyone can easily learn" "why SDGs are needed" and" "how SDGS are relevant to us" while experiencing in a game format. IRC± SDGS ゲーム 体験型研修のご案内 SDGSに取り組む きっかけづくりになるゲーム研修 社内にSDGSをさせるかに SDGsを通して、 改善や事業開発のヒントを得るきっかけに RT SED. Copyright ©2022 lyogin Holdings, Inc. All Rights Reserved. lyogin Financial Education Class Started in 2007 lyogin is supporting YouTube Videos Publishing videos on themes such as lowering the age of adulthood and banking operations Хуху children 成年年齢引き下げとは? Seminars for kids AFA ARK Seminars for learning about bank mechanisms and healthy financial literacy lyogin Junior Mirai Juku Lesson program in line with school curriculum guidelines and financial literacy map - 37 -#39Index I. Summary of Earnings for the First Half of Fiscal 2022 II. Transition to Holding Company Structure III. Group Medium-Term Management Plan III-1. Overview of Medium-Term Management Plan III-2. Major Numerical Targets of Medium-Term Management Plan III-3. Main Strategies and Progress of Medium-Term Management Plan III-4. Efforts for Sustainability III-5. Profit / Loss Forecasts and Capital Policy Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Bank Holding Company Holding Company -38-#40Profit / Loss Forecasts for Fiscal 2022 Despite interest and dividend income increasing, core business gross profit is projected to be ¥87.0 billion, a decrease of ¥3.4 billion year on year due to a decrease in non-interest and dividend income Profit attributable to owners of parent is forecasted to continue at a high level at ¥28.0 billion due to a significant decrease in credit costs at the Bank [Holding Company Consolidated] Core business net income Credit costs (-) Gain (loss) related to securities Ordinary income Factors Contributing to Increase / Decrease in Consolidated Core Business Gross Profit (Fiscal 2022 - Fiscal 2021) (Note) Differences in yield of domestic currency utilize yield differences with domestic deposits, etc. Differences in yield of foreign currency utilize yield differences with foreign currency funding costs (Units: Billions of yen) Fiscal 2021 results Fiscal 2022 forecast * Fiscal 2021 results are on a consolidated basis at the Bank level Inter- Inter- mediate mediate YOY YOY results forecast Core business gross profit 44.9 90.4 44.9 +0.0 87.0 (3.4) Of which, interest and dividend income 37.0 72.6 37.7 +0.7 74.0 +1.4 Of which, non-interest and dividend 7.9 17.7 7.2 (0.7) 13.0 (4.7) income Expenses (-) 25.5 51.6 26.1 +0.6 52.5 +0.9 19.4 38.8 18.8 (0.6) 34.5 (4.3) Interest and dividend income (¥74.0 billion) 3.9 4.3 (0.7) (4.6) (3.5) (7.8) Core business +1.4 3.9 1.1 7.5 +3.6 0.0 (1.1) gross profit (¥87.0 billion) 21.1 38.2 28.9 +7.8 41.0 +2.8 Profit attributable to owners of parent (3.4) 14.8 26.4 19.8 +5.0 28.0 +1.6 Fiscal 2021 results Fiscal 2022 forecast [Reference: Bank Nonconsolidated] Inter- mediate Inter- mediate YOY YoY results forecast Core business gross profit 41.8 84.5 42.2 +0.4 82.0 (2.5) Expenses (-) 24.3 49.0 24.8 +0.5 50.0 +1.0 Core business net income 17.5 35.4 17.3 (0.2) 32.0 (3.4) Ordinary income 19.7 35.2 27.3 +7.6 38.5 +3.3 (4.8) Net income 14.0 24.6 19.1 +5.1 26.5 +1.9 Fees and commissions (¥9.5 billion) +0.1 Gain on loan management (¥52.4 billion) +4.2 Gain on securities management (¥20.0 billion) (3.5) Other (¥1.5 billion) +0.7 (Units: Billions of yen) Volume factors +2.4 -(Average loan balance up ¥192.9 billion) Yield difference factors +1.8 (Yield difference up 0.03%) Volume factors (3.1) -(Average loan balance down ¥186.3 billion) -Yield difference factors +0.0 Gain on fund cancellation factors (0.4) ... Increase in solution-related fees, etc. Other (¥3.5 billion) Decrease in gain (loss) on foreign exchange transactions and gain (loss) on derivatives, etc. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 39 -#41Capital Policy II _ Ensuring Soundness Status of Integrated Risk Management (September 30, 2022) (Hundreds of Millions of Yen) 7,000 CET 1 ratio 14.5% level I 6,000 Evaluation Gain 1,711 5,000 4,000 Common stock, 3,000 etc. Tier 1 (excluding evaluation gain) 2,000 1,000 Buffer 3,022 Operational risk 130 Capital level to be secured by the Group Economic Capital Basis CET 1 ratio 15% level Market risk 2,830 Operational risk 121 0 Risk capital (¥666.2 billion) Credit risk 680 Risk limit Market risk 1,768 Credit risk CET 1 ratio 8% level Stress test Expected balance Corporations Overseas ocean transport industry Securities Additional required capital Stress scenarios in macroeconomic and financial environment Regulatory required capital 3,674 Estimation of credit costs, impairment loss and evaluation gain (loss) on securities/risk-weighted assets 323 Risk amount (September 30, 2022) Required capital I (Regulatory capital basis) Equity ratio forecast after stress (Interim perspective) Consider whether steady equity ratio can be maintained [Issues in integrated risk management] ⚫Insufficient quantification of industrial concentration risk •Limitations of measuring risk amount by VaR ⚫Aggressive market risk-taking to ensure profitability [Changes in the economic and financial environment amid the COVID-19 pandemic] ⚫Support for revitalization of the stagnant local economy •Active support for ship finance for maritime businesses, one of the local industries ⚫Unexpected increase in market and price volatility Need to calculate required equity in line with characteristics of the Group's portfolio Calculate additional required capital to be secured by the Group Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 40 -#42Capital Policy II _ Cross-Shareholdings/Dividend/Shareholder Return Policy Cross-Shareholdings Basic policy and response status of cross-shareholdings Basic policy Reduce The Board of Directors verifies the rationality of holding at least once a year Policy on holding is set through the evaluation matrix of "investment side" and "policy side" for all stocks held. Shares which are earmarked for divestment are being sold off in stages. (Hundreds of [Changes in the book value of cross-shareholdings (listed)] Dividend and Shareholder Return Policy Basic policy and response status of dividend and shareholder return policy Basic policy Maintenance of long-term and stable dividends Dividends for the fiscal year ending March 2023 are planned to be ¥16 per annum* (%) 30.0 Tier 1 ratio* Ordinary dividend Commemorative dividend (right axis) Purchase of treasury stock ¥3.0 billion May to July 2022 Millions of Yen) 1,000 977 950 950 26.7 26.1 915 900 24.4 25.0 887 872 22.7 852 850 21.4 20.1 813 800 20.0 1 18.7 750 8 8 9 10 12 12 12 12 14 14 14 16 16 700 15.0 March March March March March March 2016 2017 2018 2019 2020 2021 March 2022 March 2023 March 2024 *Tier 1 excludes components of comprehensive income March March March March March 2011 2012 2013 2014 2015 * Following the establishment of lyogin Holdings on October 3, 2022, an interim dividend of ¥8 per share paid by the lyo Bank is included in total dividends for the fiscal year ending March 31, 2023 March March 2016 2017 March March 2018 2019 March 2020 March 2021 March March 2023 2022 (Plan) Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. 41-#43Future business results contained in this document are based on information available as of announcement and assumptions regarding uncertain factors that may affect future business results. ■Future business results may differ due to changes in the management environment, etc. <For inquiries regarding this document> Takeda, General Planning Division, lyogin Holdings TEL:089-907-1034/FAX:089-946-9104 Copyright 2022 lyogin Holdings, Inc. All Rights Reserved.#44lyogin Holdings First Half of Fiscal 2022 Earnings Briefing (April 1, 2022 – September 30, 2022) Reference Materials Copyright 2022 Iyogin Holdings, Inc. All Rights Reserved. lyogin Holdings December 2, 2022#45Index of Reference Materials Overview of the lyogin Holdings Pg Conditions in Loans and Deposits Pg O Profile 2 O Breakdown of Balance of Loans and Deposits at End of Period 12 O List of Group Companies O Branch Network 3 O Balance and Composition of Loans by Industry 13 + O Table of Changes in Borrower Classification 14 Environment Surrounding the lyogin Holdings Pg Status of Market Investment and Risk Management Pg O Main Industries in Ehime Prefecture O Manufacturing Industry in Ehime Prefecture 5 O Management by Risk Category: Securities Investment 15 6 O Balance of Investments by Region and Sector: Financial Market Business 16 O Industrial Structure of the Setouchi Region 7 O Economic Indicators of the Setouchi Region I 8 O Economic Indicators of the Setouchi Region II 9 Status of Ocean Transport-Related Market O Shipbuilding Yards in Ehime Prefecture O Outlook of Dry Bulk Market Conditions Pg 10 11 Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 1 -#46Profile Trade name Year of establishment / foundation Capital lyogin Holdings, Inc. Established on October 3, 2022 ¥20,000 million Iyo Bank, Ltd. Founded on March 15, 1878 (The 29th National Bank) ¥20,900 million External credit ratings Headquarters / Head Office Consolidated employees AA: Japan Credit Rating Agency (JCR) AA: Japan Credit Rating Agency (JCR) A: Rating and Investment (R&I) A+: Rating and Investment (R&I) A-: Standard & Poor's (S&P) 1 Minami-Horibata-cho, Matsuyama-shi, Ehime, Japan Branch network 3,061 employees (excluding temporary staff) lyo Bank: 151 domestic (including 24 branches within branches, 9 sub-branches), 1 overseas (Singapore), 2 overseas representative offices (Shanghai, Hong Kong) lyogin Leasing: 11 domestic Shikoku Alliance Securities: 6 domestic Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. (As of October 3, 2022) - 2 -#47List of Group Companies lyogin Holdings, Inc. (holding company) (As of October 3, 2022) Banking business 14 consolidated subsidiaries Leasing business 1 consolidated subsidiary Other Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. 2 consolidated subsidiaries lyo Bank, Ltd. lyogin Business Service Company Limited Deposit business, lending business, securities investment business, exchange business Cash organization and inspection business, maintenance and management business of automated cash facilities, etc. lyogin Challenge&Smile Co., Ltd. lyogin Credit Guaranty Company Limited lyogin Capital Company Limited 7 consolidated subsidiaries lyogin Regional Economy Research Center, Inc. lyogin DC Card Co., Ltd. lyogin Leasing Company Limited lyogin Computer Service Company Limited Shikoku Alliance Securities Co., Ltd. * Manufacturing business for office supplies, etc. Credit guarantee business for housing loans and consumer loans, etc. Investment business for stocks and corporate bonds, etc., management of investment funds, etc. Investigation and research business regarding industry, economics, finance, etc. Credit card business, guarantee business, etc. Lease business, etc. Consigned information processing business, software development business, etc. Securities business Apart from the above, the Group has 2 non-consolidated non-equity method subsidiaries and 4 non-equity method affiliates. -3-#48Branch Network Created the No. 1 regional bank group in terms of broad regional coverage, in 13 prefectures centered on the Setouchi region Established a strong operating base by expanding outside of Ehime Prefecture from long ago Timing of opening key branches outside of Ehime 1909: Usuki (Oita); 1919: Nigata (currently Kure, Hiroshima); 1947: Takamatsu (Kagawa), Kochi, Oita; 1950: Hiroshima; 1952: Osaka; 1954: Tokyo; 1958: Tokushima; 1963: Kitakyushu (Fukuoka); 1964: Okayama; 1965: Nagoya (Aichi); 1966: Kobe (Hyogo); 1971: Fukuoka; 1979: Tokuyama (Yamaguchi) Chugoku region lyo Bank: 9 branches lyogin Leasing: 2 branches Hyogo Okayama Tokai region lyo Bank: 1 branch Tokyo region lyo Bank: 2 branches Overseas lyo Bank: 1 branch, 2 offices Kyushu region lyo Bank: 8 branches lyogin Leasing: 1 branch Hiroshima Yamaguchi Within Ehime Kagawa Osaka Fukuoka lyo Bank: 119 branches Kinki region lyogin Leasing: 6 branches Tokushima lyo Bank: 5 branches Shikoku Alliance Securities: 6 branches lyogin Leasing: 1 branch Kochi Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Oita Shikoku region, excluding Ehime lyo Bank: 7 branches lyogin Leasing: 1 branch 11 prefectures in the Setonaikai region Number of branches of lyo Bank 151 domestic, 1 overseas, 2 overseas representative offices (of which, lyogin SMART: 2 branches) (of which, lyogin SMARTplus: 4 branches) (of which, branches within branches: 24 branches) Number of branches of lyogin Leasing 11 domestic Number of branches of Shikoku Alliance Securities 6 domestic - 4-#49Main Industries in Ehime Prefecture ■Industries with top national share concentrated in each region Manufactured product shipments from Ehime Prefecture totaled ¥4.3 trillion (45% of Shikoku) in 2019 ...Total national share of Ehime Prefecture Matsuyama Region The Matsuyama region has companies with large shares in products such as "small once-through steam boilers," "farm machinery," and "dried bonito shavings." P Imabari Region 32.7% (1,199 ships) No. 1 in Japan (Note 2) Number of ocean-going vessels owned by domestic ship owners (as of September 2020) (Note 1) 61.5% (¥32.9 billion) No. 1 in Japan (Note 2) Towels (2019) ¥53.6 billion shipped in Japan 8 3,663 total vessels in Japan D Uwajima Region 13.4% (¥58.6 billion) No. 1 in Japan (Note 2) Sea culture industry (2020) ¥436.8 billion total national production M Niihama Region Manufactured product shipments (2019) ¥1,644.7 billion Approx. 38.2% of shipments of manufactured products in Ehime As a corporate town under the Sumitomo Group, nonferrous metal, chemicals, steel, machinery and equipment are concentrated particularly in the Niihama region. (Note 1) lyogin Regional Economy Research Center, Inc. (IRC) estimates; the ranking in Japan excludes operators. (Note 2) Ranking of Ehime Prefecture Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Uma (Shikokuchuo) Region 7.4% (¥570.2 billion) No. 2 in Japan (Note 2) Pulp and paper industry (2019) ¥7,687.9 billion shipped in Japan Source: Prepared based on the Ministry of Economy, Trade and Industry's "Census of Manufacture 2020" (2019 results) and the Ministry of Agriculture, Forestry and Fisheries' "total fishery output for 2020." -5-#50Manufacturing Industry in Ehime Prefecture Ehime Prefecture has manufacturing industries distinctive to each region Others 20.1% Production machinery 22.7% Coal and oil 4.8% Food products 12.6% Matsuyama ¥440.4 billion Composition of manufactured goods shipment by city (top five cities) ۵۴۵۰ D Chemicals 20.2% General-purpose machinery 19.7% M Others 16.8% -Beverages, tobacco, and feed. 6.3% Transportation machinery- 8.2% Electric machinery 3.0% Transportation machinery Others 61.3% 8 Imabari ¥1,054.0 billion 29.9% Fibers 4.3% Food products 2.4% General-purpose machinery 1.2% Metals 0.8% Food products 3.1%. Fibers 3.5% Production machinery 3.8% Others 3.3% Others 10.2% General- purpose machinery 7.5% Nonferrous metal 42.3% Plastics 7.3% Saijo ¥794.7 billion Nonferrous metal 46.3% Plastics 8.9% Niihama ¥850.0 billion Production machinery 8.5% Steel 13.8% Chemicals 28.0% Source: Prepared by lyogin Regional Economy Research Center, Inc. (IRC) based on the Ministry of Economy, Trade and Industry's "Census of Manufacture 2020" (2019 results). Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Shikokuchuo ¥669.1 billion Pulp, paper, and paper processing 79.0% -6-#51Industrial Structure of the Setouchi Region The Setonaikai coastal region has established various industrial structures Automotive, oil refining, steel Shipbuilding, ocean transport, oil, towels and garments Automotive, shipbuilding, electronics Okayama Hiroshima Shipbuilding, textiles Kagawa Electronics, farm machinery, chemicals, tourism Imabari Niihama Shikokuchuo Matsuyama Saijo Citrus, food processing Oita Ozu Yawatahama Uwajima Steel, automotive, electronics, tourism Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Culture fishery Paper manufacturing and processing Chemicals, electronics, nonferrous metal, general machinery -7-#52Economic Indicators of the Setouchi Region I Total population (Population estimate) Total area (Geospatial Information Authority of Number of offices Number of employees Prefecture total Prefectural gross product Prefectural income per (Private sector, excluding (Private sector, excluding October 2020 Japan) July 2022 public sector) public sector) production (Nominal) growth rate capita (Real) 2021 (Persons) (km²) (Offices) 2021 (Persons) Fiscal 2019 Fiscal 2019 (Billions of yen) (%) Fiscal 2019 (Thousands of yen) Ehime Kagawa Tokushima Kochi Oita Fukuoka Yamaguchi Hiroshima 1,334,841 5,676 59,021 563,282 5,148.3 (0.6) 2,717 950,244 1,877 44,528 435,625 4,008.7 0.7 3,021 719,559 4,147 33,794 304,672 3,222.4 (0.1) 3,153 691,527 7,103 32,839 275,520 2,464.6 (1.0) 2,663 1,123,852 6,341 49,937 473,690 4,525.1 (2.7) 2,695 5,135,214 4,988 205,965 2,294,657 19,942.4 (1.0) 2,838 1,342,059 6,113 55,759 571,202 6,350.5 (2.1) 3,249 2,799,702 8,479 120,069 1,293,541 11,969.1 (2.6) 3,153 Okaya ma 1,888,432 7,115 77,428 835,270 7,842.5 (1.7) 2,794 Total of the above nine prefectures (A) 15,985,430 51,840 679,340 7,047,459 65,473.6 (A)/(C) 12.7% 13.7% 13.4% 12.3% 11.3% Hyogo 5,465,002 8,401 199,966 Total of the ten prefectures (B] 21,450,432 60,241 879,306 2,194,727 9,242,186 22,195.2 (0.2) 3,038 87,668.8 (B)/(C) 17.0% 15.9% 17.3% 16.1% National Total (C) 126,146,099 377,973 5,078,617 57,457,856 15.1% 556,303.7 (1.3) 3,344 Total of ten prefectures 17.0% Total population (Population estimate) (October 2020) Total of nine prefectures (excluding Hyogo) 12.7% Total population (Population estimate) (October 2020) Total of ten prefectures 15.1% Gross prefectural product (Nominal) (Fiscal 2019) Total of nine prefectures (excluding Hyogo) 11.3% Gross prefectural product (Nominal) (Fiscal 2019) Source: Prepared based on the Statistics Bureau of Japan's "2020 Population Census," the Geospatial Information Authority of Japan's "Statistical reports on the land area by prefectures and municipalities in Japan," the Ministry of Internal Affairs and Communications' and Ministry of Economy, Trade and Industry's "2021 Economic Census for Business Activity (preliminary figures)," websites of each prefecture, and Cabinet Office's "Annual Report on National Accounts" Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. -8-#53Economic Indicators of the Setouchi Region II Manufactured product Annual wholesale sales shipments amount Annual retail sales amount Industrial production Number of new housing Jobs-to-applicants ratio index (annual average) starts (annual average) Overall unemployment rate (annual average) 2019 2016 2016 (Millions of yen) (Millions of yen) (Millions of yen) 2020 2015=100 2021 (Homes) 2021 (Times) 2021 (%) Ehime Kagawa Tokushima Kochi Oita Fukuoka Yamaguchi Hiroshima 4,308,818 2,511,264 1,528,554 94.2 8,069 1.28 2.0 2,711,583 2,619,010 1,169,352 92.5 5,718 1.36 2.4 1,908,126 904,487 757,121 95.1 3,044 1.19 2.5 585,527 874,256 753,371 93.0 2,790 1.08 2.5 4,298,945 1,344,689 1,235,257 Unpublished 6,260 1.16 2.2 9,912,191 16,970,699 5,864,032 Unpublished 40,298 1.06 3.0 6,553,479 1,641,957 1,488,895 92.2 7,832 1.33 2.0 9,741,531 9,166,762 3,309,726 89.4 17,809 1.32 2.4 Okaya ma 7,704,136 3,543,971 2,093,111 92.8 11,316 1.39 2.3 Total of the above nine prefectures (A) 47,724,336 39,577,095 18,199,419 103,136 (A)/(C) Hyogo 14.8% 9.1% 12.5% 12.0% Total of ten prefectures (B). (B)/(C) National Total (C) 16,263,313 63,987,649 19.8% 10,219,241 49,796,336 11.4% 5,726,476 94.0 30,284 0.93 2.8 23,925,895 133,420 16.5% 15.6% 322,533,418 436,522,525 145,103,822 90.6 856,484 1.13 2.8 Total of ten prefectures 19.8% Manufactured product shipments (2019) Total of nine prefectures (excluding Hyogo) 14.8% Manufactured product shipments (2019) Total of ten prefectures 15.6% Number of new housing starts (2021) Total of nine prefectures (excluding Hyogo) 12.0% Number of new housing starts (2021) Source: Prepared based on the Ministry of Economy, Trade and Industry's "Census of Manufacture", the Ministry of Internal Affairs and Communications' and Ministry of Economy, Trade and Industry's "Economic Census," each prefecture's materials, the Ministry of Land, Infrastructure, Transport and Tourism's "Survey of Building Construction Work Started," the Ministry of Health, Labour and Welfare's "Employment referrals for general workers" and the Statistics Bureau of Japan's "Labour Force Survey" Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. -9-#54Shipbuilding Yards in Ehime Prefecture Kurinoura Dockyard Co., Ltd. Honai Jukogyo Co., Ltd. Akamatsu Shipbuilding Co., Ltd. Matsuda Shipbuilding Co., Ltd. Miyoshi Shipbuilding Co., Ltd. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Fujiwara Shipbuilding Co., Ltd. I-S Shipyard Co., Ltd. Yamanaka Shipbuilding Co., Ltd. Namikata Shipbuilding Co., Ltd. Okashima Zosen Co., Ltd. Kadota Dock Yard Co., Ltd. Hakata Shipbuilding Co., Ltd. Murakami Hide Shipbuilding Co., Ltd. Shimanami Shipyard Co., Ltd. Onishi Shipyard, Shin Kurushima Dockyard Co., Ltd. Iwagi Zosen Co., Ltd.. Asakawa Shipbuilding Co., Ltd. Head Office and Shipyard, Imabari Shipbuilding Co., Ltd. Shin Kurushima Hashihama Dockyard Co., Ltd. Higaki Shipbuilding Co., Ltd. Yano Shipbuilding Co., Ltd. Saijo Shipyard, Imabari Shipbuilding Co., Ltd. 15 Groups, 22 Offices Source: Prepared by the Bank based on "Documents for Shipbuilding Under Jurisdiction" published by the Shikoku Land Transport Office *Shipbuilding facilities currently in operation either constructing or repairing steel vessels of at least 500 gross tons or 50 m or longer -10-#55Outlook of Dry Bulk Market Conditions Dry Bulk Transport Demand and Supply Unit transport volume and shipping tonnage 6.0% -5.7%- 5.7% 5.0% -4:8% 4.1% 4.4% 4.0% 3.0% 2.2% 2.4% 2.0% 1.0% 0% 2013 1.6% 0.0% 2014 2015 2016 2.9% 2.9% 2.7% Future Market Outlook Baltic Dry Index (BDI) trends 12,000 Growth rate of cargo movement Growth rate of shipping tonnage Maximum value 11,793 (May 2008) 10,000 4.0% 3.9% 3.8% 3.6% 8,000 BDI 6,000 2.8% 2.2% 4,000 2,000 0.8% 0.5% 0.6% 2017 2018 0.4% 2019 2020 2021 2022 (Plan) (Plan) 2023 0 2000/1 Source: "Clarkson Research Shipping Review & Outlook" (Autumn 2022)" 1,760 (September 30, 2022) Minimum value 290 (February 2016) ти 2005/1 2010/1 2015/1 2020/1 Dry bulk transport demand and supply Shipping tonnage of dry bulk vessels for 2022 is expected to increase by 2.8% (up 261 thousand DWT) from 2021. However, the unit transport volume* is expected to increase by only 0.5% due to a decrease in shipment volume of grains, etc. resulting from the situation between Russia and Ukraine. Because it is expected that the unit transport volume will increase but the increase in shipping tonnage will be limited in 2023, concerns over a significant decline in transport demand are considered low at present. * Unit transport volume: Also called ton-mile. Indicates the tonnage and mileage of cargo transported and is an indicator to measure actual demand for ships. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Future market out ●In 2022, although the market is depressed in comparison with 2021 which was a boom period, the market level, especially for small-sized vessels, remains historically favorable. This is mainly due to the fact that certain container cargo continues to be transported by bulk carriers. In 2023, supply and demand are expected to remain steady in the market, as shown on the left. However, the market could be entering into an adjustment phase triggered by a decline in transport volumes beyond the current forecast, mainly due to economic downturn in China, the largest exporting nation of dry cargo, and an intensifying global economic slowdown. -11-#56Breakdown of Balance of Loans and Deposits at End of Period 1. Breakdown of balance of loans at end of period (Units: Billions of yen) OOUU September 2018 March 2019 September 2019 March 2020 September 2020 March 2021 September 2021 March 2022 Total Loans General loans Corporate loans (incl. overseas, etc.) Corporate loans (domestic branches) Individual financing 4,431.5 4,550.8 4,617.5 4,756.6 4,874.5 4,192.2 4,310.7 4,387.7 4,522.2 4,648.1 4,999.3 4,783.6 4,959.1 4,752.4 5,068.8 4,870.3 September 2022 5,257.4 Vs. September 2021 298.3 5,062.0 309.6 3,146.0 3,238.2 3,291.1 3,397.9 3,507.7 3,624.6 3,586.1 3,696.2 3,887.7 301.6 3,060.4 3,135.8 3,158.3 3,248.8 3,347.1 3,434.9 3,387.6 3,479.8 3,653.1 265.5 1,046.2 1,072.4 1,096.5 1,124.3 1,140.3 1,158.9 1,166.3 1,174.0 1,174.3 8.0 Housing loans Apartment and building loans Card Loans, etc. Municipal loans, etc. 758.2 781.0 805.3 831.8 852.6 870.7 879.6 885.5 886.6 7.0 198.0 202.2 203.1 205.2 205.2 205.7 206.2 208.8 209.6 3.4 29.1 239.2 28.3 240.1 27.9 229.7 26.9 234.3 24.5 226.4 23.6 215.6 22.9 206.6 21.9 198.5 21.6 195.3 (1.3) (11.3) (Note) The figures shown for apartment and building loans are the total of the "institutional finance" portion. 2. Breakdown of balance of assets in custody such as deposits, etc. at end of period (Units: Billions of yen) September 2018 March 2019 September 2019 March 2020 September 2020 March 2021 September 2021 March 2022 September 2022 Vs. September 2021 Total Deposits, etc. + assets in custody A 5,894.2 6,070.6 6,174.5 6,094.1 6,532.5 NCD Total Deposits, etc. Total deposits Individual General companies Public Financial Overseas/offshore General companies Public General company funds (incl. NCD) 5,542.2 5,712.6 5,817.3 5,754.3 6,184.6 6,870.9 6,522.6 6,956.9 7,015.2 7,027.4 70.5 6,603.0 6,654.1 6,669.7 66.7 5,057.7 5,247.1 5,288.5 5,265.6 5,652.6 5,983.1 5,956.2 6,041.8 6,099.8 143.6 3,412.0 3,423.6 3,450.2 3,512.5 3,652.2 3,740.7 3,794.0 3,850.8 3,889.9 95.9 1,455.4 1,555.4 1,553.7 1,564.4 1,733.5 1,853.4 1,857.9 1,915.1 1,949.8 91.9 111.4 126.4 113.2 119.8 112.7 162.8 114.0 141.7 118.9 4.9 37.4 61.0 31.9 40.8 32.7 43.4 30.6 45.2 30.4 (0.2) 41.3 80.5 139.4 28.0 121.3 182.6 159.5 88.8 110.6 (48.9) 484.4 465.5 528.8 488.7 531.9 539.4 646.8 612.2 569.9 (76.9) 345.1 348.2 390.0 367.0 384.9 427.4 476.2 445.0 385.6 (90.6) 139.2 117.3 138.7 121.7 147.0 112.0 170.6 167.0 184.1 13.5 1,800.6 1,903.6 1,943.8 1,931.4 2,118.5 2,280.8 2,334.1 2,360.2 2,335.5 1.4 Public funds (incl. NCD) 250.7 243.7 252.0 241.5 Foreign currency deposits (balance) 111.0 111.0 101.6 89.3 259.8 96.3 274.9 284.6 308.8 303.0 18.4 99.0 116.0 133.1 138.6 22.6 Individual deposits + individual assets in custody 3,751.4 3,769.1 3,795.6 3,841.4 3,988.5 4,078.3 4,137.4 4,201.0 4,236.7 99.3 Individual deposits 3,412.0 3,423.6 3,450.2 3,512.5 3,652.2 3,740.7 3,794.0 3,850.8 3,889.9 95.9 Individual assets in custody 339.3 345.4 345.4 328.8 336.3 337.6 343.4 350.1 346.8 3.4 <Assets in custody (Term-end basis)> Assets in custody at the Bank (excl. deposits, etc.) B JGBs 351.9 357.9 357.1 339.7 347.8 348.3 353.9 361.1 357.7 3.8 24.0 22.4 20.3 19.8 19.9 19.2 20.0 21.3 23.9 3.9 Investment trusts Single premium polocies Financial product intermidiary 71.5 68.6 66.7 53.8 58.7 61.6 64.0 67.8 64.4 0.4 210.8 215.7 216.4 214.2 211.3 208.7 207.2 205.4 203.6 (3.6) 45.5 51.0 53.6 51.7 57.7 58.6 62.5 66.4 65.6 3.1 Shikoku Alliance Securities balance C 208.3 199.5 207.8 202.4 226.6 245.2 246.3 246.0 254.2 7.9 Balance of Group's assets in custody B+C=D 560.3 557.4 565.0 542.2 574.5 593.5 600.2 607.1 611.9 11.7 Assets in custody composition (D/A+C) 9.2% 8.9% 8.9% 8.6% 8.5% 8.3% 8.3% 8.4% 8.4% (Note) The figures shown for foreign currency deposits (balance) are the total excluding overseas/offshore. -12- Copyright 2022 lyogin Holdings, Inc. All Rights Reserved.#57Balance and Composition of Loans by Industry There are no major changes in the composition of loans by industry, and the loans are well-balanced 10000 (Units: Billions of Yen, %) September 2017 September 2018 September 2019 September 2020 September 2021 Composition Composition Composition Composition Composition September 2022 Composition Vs. September 2021 Rate of balance Balance increase/decreas Manufacturing 589.4 14.4 629.8 14.5 646.9 14.4 671.7 14.2 652.5 13.7 653.9 13.0 1.4 0.2% Agricultural 2.5 0.1 2.8 0.1 2.8 0.1 2.9 0.1 2.8 0.1 2.8 0.1 0.0 0.0% Forestry 0.2 0.0 0.2 0.0 0.3 0.0 0.4 0.0 0.4 0.0 0.4 0.0 0.0 0.0% Fishing 12.3 0.3 11.1 0.3 11.2 0.2 9.8 0.2 8.1 0.2 6.8 0.1 (1.3) (16.0%) Mining 8.9 0.2 8.5 0.2 8.1 0.2 6.8 0.1 6.4 0.1 4.2 0.1 (2.2) (34.4%) Construction 105.0 2.6 111.2 2.6 108.9 2.4 126.4 2.7 127.7 2.7 138.7 2.8 11.0 8.6% Electricity, gas, heat provision, water 97.5 2.4 122.5 2.8 141.3 3.2 167.4 3.6 197.4 4.1 207.8 4.1 10.4 5.3% Information communications 28.5 0.7 21.7 0.5 20.0 0.4 17.8 0.4 18.2 0.4 17.9 0.4 (0.3) (1.6%) Transportation 649.2 15.8 703.3 16.2 728.8 16.3 801.6 17.0 847.5 17.8 1,030.6 20.5 183.1 21.6% Of which, ocean transport 526.6 12.8 566.5 13.0 593.6 13.2 666.0 14.1 716.6 15.1 904.3 18.0 187.7 26.2% Wholesale and retail 465.4 11.3 500.3 11.5 499.5 11.1 509.9 10.8 510.1 10.7 530.8 10.6 20.7 4.1% Finance and insurance 198.7 4.8 208.9 4.8 190.1 4.2 181.3 3.8 170.0 3.6 201.8 4.0 31.8 18.7% Real estate 238.4 5.8 259.0 6.0 284.1 6.3 312.2 6.6 311.7 6.5 313.6 6.2 1.9 0.6% Various services 426.2 10.4 425.5 9.8 459.2 10.2 483.4 10.3 483.4 10.2 479.5 9.5 (3.9) (0.8%) Of which, medical-related 187.6 4.6 191.5 4.4 194.2 4.3 205.0 4.3 207.6 4.4 204.4 4.1 (3.2) (1.5%) Regional public entities 232.6 5.7 233.9 5.4 224.4 5.0 Other Total 1,049.7 4,105.0 25.6 1,106.5 25.5 100.0 4,345.9 100.0 1,158.1 4,484.6 25.8 100.0 222.1 1,199.4 4,714.0 4.7 25.4 100.0 203.6 1,220.2 4,760.5 4.3 194.6 3.9 (9.0) (4.4%) 25.6 100.0 1,238.7 5,022.7 24.7 18.5 1.5% 100.0 262.2 5.5% (For domestic branches, excludes special international transactions account) * "Goods rental" is included in "real estate" from the six months ended September 30, 2009. "Real estate" for the six months ended September 30, 2022, excluding "goods rental," was ¥296.1 billion, which is an increase of ¥3.1 billion (+1.1%) compared with the six months ended September 30, 2021. In addition, "other" includes "home renting by individuals" (¥218.0 billion for the six months ended September 30, 2022). * As "ocean transport" displays balances applicable to the "ocean transport industry" according to Japan Standard Industrial Classification, this figure does not match "Loan balance for the maritime industry" on page 22 of the Earnings Briefing. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. -13-#58Table of Changes in Borrower Classification Activities for supporting enhancement of corporate value are conducted through business feasibility assessments of customers Corporate revitalization support is provided mainly by the Corporate Support Office Use of various types of revitalization schemes, such as reconstruction funds and the SME Business Rehabilitation Support Co-operative, as well as solution sales Upper row: Number of borrowers 0000 [Changes in borrower classification for business borrowers] (one year) September 30, 2022 Rate of degradation to at Lower row: Credit amount Normal Total Borrowers requiring (Hundreds of millions of yen) borrowers Borrowers under strict observation risk of bankruptcy Borrowers at close monitoring Substantially bankrupt borrowers Improvement Degradation Bankrupt borrowers risk of bankruptcy or below 18,779 17,279 16,697 529 Normal borrowers 36,109 36,955 36,140 772 22 21 20 9 3 0.17% 582 29 14 1 1 0.04% 816 Borrowers requiring close 2,329 2,211 541 1,546 19 103 2 O 4.51% 541 124 monitoring 4,082 3,813 1,088 2,557 28 139 1 0 3.42% 1,088 167 Borrowers under 139 127 13 15 82 13 3 1 12.23% 28 17 September 30, 2021 strict observation 315 294 17 15 234 27 0 0 8.67% 32 27 Borrowers 385 360 22 31 7 295 3 2 60 5 at risk of bankruptcy 565 513 11 30 13 456 1 1 55 2 Substantially 69 46 0 0 0 46 0 0 0 bankrupt borrowers 12 8 0 0 0 8 0 0 0 23 7 0 0 0 0 0 7 0 Bankrupt borrowers 4 1 0 0 0 0 0 1 0 Total 21,724 41,088 20,030 17,273 2,121 129 431 63 13 629 728 41,584 37,256 3,374 304 636 11 2 1,175 1,012 (Note 1) The chart displays the changes in the borrower classification from September 30, 2021 to September 30, 2022. (Note 2) The balances after changes are the balances after write-offs as of September 30, 2022. Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. -14-#59Management by Risk Category: Securities Investment 0000 (Units: Billions of Yen) Six months ended September 30, 2022 Risk Category (*1) Book balance Evaluation Market gain/loss balance Composition Vs. March Total profit /loss (*2) Interest and dividend income Interest received Profit/loss from purchase, Procurement sale, and amortization Increase/ decrease on gain/loss on evaluation (vs. Source of main revenue and profit 2022 cost (*3) (*4) Yen-denominated bonds 498.4 +6.1 504.5 32.1% +1.4% 0.6 1.7 1.7 0.0 (0.0) March 2022) (1.1) Difference in long and short term interest on yen interest Of which, JGBs 96.0 +5.6 101.7 6.5% +0.6% 1.9 0.6 0.6 0.0 0.0 1.2 Of which, inflation-indexed JGBS 80.2 +3.5 83.8 5.3% +0.5% 1.9 0.5 0.5 0.0 0.0 1.5 Rise in expected inflation rate Foreign currency bonds (with hedges) 281.0 (15.3) 265.7 16.9% (3.7%) (22.2) 0.1 2.6 2.5 (12.7) Foreign currency bonds (without hedges) 285.6 +7.2 292.8 18.7% +0.9% 12.5 3.6 3.6 0.0 16.1 (9.6) Difference in long and short term interest on overseas interest (7.2) Gain on foreign exchange /interest revenue Domestic and overseas stocks (incl. stock trusts) 143.2 +231.9 375.1 23.9% +1.8% 4.2 4.2 4.2 0.0 1.3 Alternatives 117.6 +14.3 131.8 8.4% (0.3%) (5.0) 1.6 1.6 0.0 1.7 (1.3) Growth in domestic/foreign companies centered on transaction partners (8.2) Hedge funds 30.3 (3.1) 27.2 1.7% (0.0%) (2.3) (0.0) 0.0 0.0 0.0 Real estate-related 74.7 +16.8 91.5 5.8% (0.3%) (2.6) 1.5 1.5 0.0 1.7 Private equity 7.6 +0.0 7.7 0.5% +0.0% (0.1) (0.1) (0.1) 0.0 0.0 Emerging stocks 4.9 +0.5 5.4 0.3% +0.0% (0.0) 0.1 0.1 0.0 0.0 Total 1,325.7 +244.1 1,569.9 100.0% (9.9) 11.2 13.7 2.5 6.4 (2.3) Strategic diversification by external consigned management (5.8) Revenue from real estate rentals and profit from price increase (0.1) Rise in enterprise value due to management improvement of unlisted stocks, etc. (0.1) Growth and foreign exchange gains in emerging markets (27.4) *1 Assets invested by the Financial Market Division calculated based on primary risk, regardless of accounting item (on the basis of including money held in trust, etc.) *2 "Total profit/loss" and "interest and dividend income" eliminate three-month SOFR interest, etc., as procurement costs, but this differs from actual procurement costs. *3 Interest received includes gain/loss on cancellation of funds, etc., recorded in asset management revenue. *4 Includes derivative-related gain/loss 151.7 (5.4) <Of yen-denominated bonds and foreign currency bonds, investment conditions in credit risk and securitized products, etc.> Credit risk 146.3 9.3% (1.6%) (3.6) (0.9) (0.4) 0.5 Securitized products 1.8 (0.0) 1.8 0.1% (0.0%) 0.0 0.0 0.0 0.0 (0.0) 0.0 (2.7) Business continuity of domestic and foreign companies, etc. (0.0) Loan interest revenue from housing loans, etc. Subtotal 153.5 (5.4) 148.1 9.4% (1.6%) (3.6) (0.9) (0.4) 0.5 (0.0) (2.7) Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. - 15-#60Balance of Investments by Region and Sector: Financial Market Business Balance by Region (Final Risk Country Basis) Balance by Sector (Final Risk Country Basis) (Units: Billions of Yen) September 2022 Loan balance Commitment balance 68.5 10.7 (Units: Billions of Yen) September 2022 Total Composition Loan balance Commitment balance Total Composition 79.3 53.4% Electricity and gas 62.3 10.7 73.1 49.2% 25.6 2.0 27.6 18.6% (Of which, solar power generation) (34.2) (3.6) (37.9) (25.6%) Japan North America (Of which, the U.S.) (24.7) (2.0) (26.7) (18.0%) Manufacturing Europe Financial 19.3 0.0 19.3 13.1% Asia and Oceania Middle East 21.5 0.0 21.5 14.5% 14.5 2.0 16.5 11.1% Transportation 15.7 0.0 15.7 10.6% 13.7 0.0 13.7 9.2% (Of which, aircraft finance) (10.7) (0.0) (10.7) (7.2%) 4.3 0.0 4.3 2.9% Various services 14.6 0.0 14.6 9.9% 2.9 0.0 2.9 2.0% Latin America Other Wholesale and retail 2.4 0.0 2.4 1.6% 1.1 0.0 1.1 0.8% (international organization) Construction Total 135.8 12.7 148.6 100.0% 1.2 0.0 1.2 0.8% * Excluding Singapore Branch Other 3.2 0.0 3.2 2.2% Copyright 2022 lyogin Holdings, Inc. All Rights Reserved. Total 135.8 12.7 148.6 100.0% * Excluding Singapore Branch - 16-