#1Investors Meeting FY2024/3 H1 November 16, 2023 Director, President and Representative Executive Officer Norito Ikeda P JAPAN POST BANK BANK#2Disclaimer This document is written solely for the purpose of disclosing relevant information regarding JAPAN POST BANK Co., Ltd. ("Japan Post Bank") and its consolidated subsidiaries (the "Japan Post Bank Group"). This document does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States, Japan or any other jurisdiction. This presentation contains forward-looking statements including forecasts, targets and plans of the Japan Post Bank Group. These statements are based on estimates at the time in light of the information currently available to Japan Post Bank. The statements and assumptions may prove to be incorrect and may not be realized in the future. Any uncertainties, risks and other factors that may cause such a situation to arise include, but are not limited to, risks related to the effectiveness of risk management policies and procedures; market risks, market liquidity risks, credit risks and operational risks (such as risks relating to Japan Post Bank's IT systems, Japan Post Bank's reputation, natural disasters, litigation and violations of applicable laws or regulations); risks relating to Environmental, Social and Governance, or ESG, factors including climate change; risks related to business strategy and management planning; risks related to the expansion of the scope of operations; risks related to the business environment; risks related to Japan Post Bank's relationship with JAPAN POST HOLDINGS Co., Ltd. and JAPAN POST Co., Ltd.; risks related to domestic and overseas monetary policies; and other various risks. Please also see the Securities Report and the latest quarterly financial report for material facts that Japan Post Bank recognizes as potentially affecting the Japan Post Bank Group's actual results, performance or financial position. The Japan Post Bank Group's actual results, performance or financial position may be materially different from those expressed or implied by such forward-looking statements. The statements in this document are current as of the date of the document or the date otherwise specified, and Japan Post Bank has no obligation or intent to keep this information up to date. The information concerning companies or parties other than the Japan Post Bank Group and the Japan Post Group is based on publicly available and other information as cited, and Japan Post Bank has neither independently verified the accuracy and appropriateness of, nor makes any warranties with respect to, such information. The information of the document may be revised without prior notice. Consolidated subsidiaries 9 companies Principal companies: Consolidated Subsidiaries, etc. JAPAN POST BANK LOAN CENTER Co., Ltd. Japan Post Investment Corporation Affiliates accounted for by the equity method ATM Japan Business Service, Ltd. JP Asset Management Co., Ltd. Note: All Japanese yen figures in the financial statements of JAPAN POST BANK Co., Ltd. (the "Bank") and its consolidated subsidiaries have been rounded down, unless otherwise noted. Accordingly, the total of each account may not be equal to the combined total of individual items. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 1#301 Executive Summary 04 P.3 02 How to Increase the Corporate Value P.7 03 Appendix FY2024/3 H1 Financial Data (Non-consolidated Basis) JP JAPAN POST BANK BANK P.22 P.62 Copyright© JAPAN POST BANK All Rights Reserved. 2#41. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Executive Summary (1) FY2024/3 H1 Results Net income attributable to owners of parent increased by JPY 23.5bn year on year to JPY 182.1bn. It equated to 54.3% of the full-year earnings forecast and remained strong, so full-year earnings forecast and annual dividend forecast have been unchanged from the latest announced forecasts. Results of Operations (Consolidated) Investment Assets (Non-consolidated) Net income attributable to owners of parent Net ordinary income JPY 182.1bn [Progress rate to forecast 54.3%] JPY 253.8bn [Progress rate to forecast 54.0%] Investment assets Securities JGBs JPY 226.8tn [vs Mar. 31, 2023 JPY +0.4tn] JPY 137.7tn [vs Mar. 31, 2023 JPY +4.9tn] JPY 38.9tn [vs Mar. 31, 2023 JPY +0.7tn] Net interest income JPY 337.9bn [YOY JPY (91.9)bn] Net fees & commissions JPY 77.5bn [YOY JPY +2.4bn ] Net other operating JPY (37.7)bn [YOY JPY (109.0)bn] income (loss) G&A expenses JPY 467.6bn [YOY JPY +1.5bn ] (Exclude non-recurring losses) Non-recurring gains JPY 343.6bn [YOY JPY +233.7bn ] (losses) FY2024/3 Financial Forecast / Annual Dividend Forecast (Unchanged) Financial Forecast (consolidated): Net income JPY 335.0bn Annual Dividend Forecast : DPS JPY 50 Foreign securities, etc. JPY 81.8tn [vs Mar. 31, 2023 JPY +3.4tn] More than 7 years to 10 years JPY 1.5tn [vs Jun. 30, 2023 JPY +0.8tn] Net Unrealized Gains (Losses) on Financial Instruments (Non-consolidated) Unrealized Gains (Losses) on Financial Instruments (Available-for-sale) (After taking into consideration gains (losses) from hedge accounting) JPY (556.4)bn [vs Mar. 31, 2023 JPY (770.4)bn] Capital Adequacy Ratio and CET1 Ratio (Consolidated) Capital adequacy ratio 15.30% [vs Mar. 31, 2023 (0.22)%] CET1 ratio* (estimate) [Dividend payout ratio: 54.0%] *Excluding unrealized gains on available-for- sale securities 12.38% [vs Mar. 31, 2023 (1.62)%] EP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 3#51. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Executive Summary (2) Roadmap to Increase Corporate Value Our cost of shareholders' equity has remained approximately 5%. As a 1st step, we will work to achieve ROE that exceeds the cost of shareholders' equity and then aim to achieve higher ROE in the medium-to long-term. Trends in ROE* and Roadmap to Achieve Targets 7% 6% 5% Cost of Shareholders' Equity: approx. 5% 3.80% 4% 3.44% -3.50% 2.97% 3.03% 3.06% 3% (Plan) 2% 1% 0% First, aim for a level of ROE exceeding the cost of shareholders' equity Aim to achieve a higher ROE in the medium-to long-term FY18 FY19 FY20 * Consolidated and shareholders' equity basis. Efforts to date to improve ROE FY21 FY22 FY23... - Investment in risk assets increased (net interest income, etc. from risk assets approximately doubled over the past seven years) in a difficult environment where interest income from Japanese government bonds, etc. continues to decline due to persistently low interest rates in Japan. -Through efforts to enhance the sophistication of the retail business model, increased service revenues by JPY 56.6bn over seven years and reduced operating expenses by JPY 139.2bn. JP JAPAN POST BANK BANK 1st Step Next Step We are currently considering a revision of the Mid-term Plan (FY2022/3-FY2026/3), and plan to disclose the specific ROE performance targets, achievement timeline, measures, etc. in May 2024, along with the revised Mid- term Plan. Copyright© JAPAN POST BANK All Rights Reserved. 4#61. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Executive Summary (3) Restructuring of the Yen Interest-rate Portfolio Yen interest rates have risen following the Bank of Japan's monetary policy tweaks in July and October 2023. Within FY2024/3 Q2, we reverse the balance of JGBs, which has been continuously declining since the BOJ adopted a negative interest rate policy in 2016, and turn into a phase of earnings expansion. (trillion yen) 100 80 60 60 40 40 Balance of JGBs*1 Market Business Earnings *2 (billion yen) To Reverse & Expand To Reverse & Expand 1,500 Shrank to approx. 1/5 in 7 years 931.3 Shrank by approx. 50% in 7 years More than 7Y to 10Y Over 10Y More than 3Y to 7Y 1,000 500 214.4 Yen interest rate assets' 1,009,0 net interest income, etc. 20 20 More than 1Y to 3Y $22.0 Risk assets' net interest income, 1Y or less etc. 0 0 End End End End End End End FY15 FY17 FY19 FY21 FY22 Mar. Mar. Mar. Mar. Mar. Jun. Sep. 16 18 20 22 23 23 23 (trillion yen) JGB Balance 82.2 62.7 53.6 49.2 38.1 37.6 38.9 More than 8.1 5.8 4.6 6.5 1.3 0.7 1.5 7Y to 10Y (Ref.) JGB 10Y yield (0.04%) 0.04% 0.03% 0.21% 0.38% 0.42% 0.77% Reverse and expand yen interest rate assets' net interest income, etc. Pursue sustained growth of risk asset's net interest income, etc., which had expanded under the low yen interest rate environment Source: JGB interest rate information - Ministry of Finance Japan *1 Except JGBs in money held in trust. *2 Non-consolidated and management accounting basis. "Risk assets" consist of Japanese local government bonds, corporate bonds, loans, stocks (money held in trust), foreign securities, and strategic investment areas, etc. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 5#701 Executive Summary 04 P.3 02 How to Increase the Corporate Value P.7 03 Appendix FY2024/3 H1 Financial Data (Non-consolidated Basis) JP JAPAN POST BANK BANK P.22 P.62 Copyright© JAPAN POST BANK All Rights Reserved. 6#81. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data How to Increase the Corporate Value: Analysis & Assessment (1) The Bank's PBR is higher than the banking sector simple average, but lower than 1x. To achieve a PBR of 1x or higher, ROE must exceed the "cost of shareholders' equity minus expected earnings growth rate" by means of (1) increasing ROE, (2) controlling the cost of shareholders' equity, and (3) increasing the expected earnings growth rate. PBR Trends*1 1.0 x (Ref.) PBR as of Sep. 30, 2023*² 0.9 x - Simple average of the banking sector :0.43x 0.8 x 0.7 x 0.6 x 0.5 x 0.42 0.41 0.40 0.36 0.4 x 0.35 0.3 x 0.2 x 0.1 x 0.52 PBR Analysis PBR = ROE ☑ PER II = ROE (Cost of Shareholders' Equity - Expected Earnings Growth Rate) Theoretically, ROE ≥ (cost of shareholders' equity - expected earnings growth rate) is required for PBR to be 1x or higher. (Ref.) PBR and ROE Regression Analysis for the Banking Sector (TOPIX)*3 PBR (as of Sep. 30, 2023) 1.0 x 0.9 x 0.8 x 0.7 x JPB 0.6 x 0.5 x 0.4 x 0.3 x 0.2 x 0.0 x End End End End End End 0.1 x Mar. Mar. Mar. Mar. Mar. Sep. 19 20 21 22 23 23 0.0 x 0% *1 Excluding treasury stock. *2 Source: Compiled by Japan Post bank based on financial data from each company (simple average of the banking sector shares included in the TOPIX) JP JAPAN POST BANK BANK Who ch.080.com Simple average -PBR: 0.43x -ROE: 4.29% (Ref.) Weighted average -PBR: 0.65x -ROE: 6.48% R² = 0.81 *3 Source: Compiled by Japan Post bank based on financial data from each. 4% 8% 10% company (The graph shows companies with PBRs of 1x or less). 2% 6% Expected ROE (Based on shareholders' equity and FY23 forecasts) Copyright© JAPAN POST BANK All Rights Reserved. 7#9How to Increase the Corporate Value: 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Analysis & Assessment (2) / Policies, Goals, and Initiatives Towards Improvement (1) The Bank's ROE is in the mid-3% range, and has consistently remained below the cost of shareholders' equity (approximately 5%) as calculated using the Capital Asset Pricing Model (CAPM). While complying with business regulations based on the Postal Service Privatization Act and fulfilling our responsibility to provide universal financial services*1, as a 1st step, we will work to achieve ROE that exceeds the cost of shareholders' equity (approximately 5%), and then aim to achieve higher ROE in the medium-to long-term. Trends in ROE*2 and Roadmap to Achieve Targets 7% 6% 5% 4% 2% 1% do do do do do do do go First, aim for a level of ROE exceeding the cost of shareholders' equity Cost of Shareholders' Equity: approx. 5% 3.80% 3.44% -3.50% 2.97% 3.03% 3.06% (Plan) 3% 0% FY18 FY19 FY20 FY21 FY22 FY23... Aim to achieve a higher ROE in the medium-to long-term Efforts to date to improve ROE 1st Step - Investment in risk assets increased (net interest income, etc. from risk assets approximately doubled over the past seven years) in a difficult environment where interest income from Japanese government bonds, etc. continues to decline due to persistently low interest rates in Japan. -Through efforts to enhance the sophistication of the retail business model, increased service revenues by JPY 56.6bn over seven years and reduced operating expenses by JPY 139.2bn. Next Step We are currently considering a revision of the Mid-term Plan (FY2022/3-FY2026/3), and plan to disclose the specific ROE performance targets, achievement timeline, measures, etc. in May 2024, along with the revised Mid- term Plan. *1 In accordance with laws and regulations, Japan Post Bank pays contributions to the Organization for Postal Savings, Postal Life Insurance and Post Office Network as part of the costs required to maintain the post office network, which are indispensable costs for ensuring the provision of universal financial services (the amount of contributions to be paid in FY2024/3 is JPY 243.6bn). *2 Consolidated and shareholders' equity basis JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 8#101. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data How to Increase the Corporate Value: Policies, Goals, and Initiatives Towards Improvement (2) We will pursue a growth strategy that leverages our unique strengths while reinforcing our management base, aiming to sustainably increase ROE and thereby PBR. We plan to disclose the specific measures to increase ROE in May 2024, along with the revised Mid-term Plan. Growth Strategies Market Business Retail Business Σ Business Secure Financial Soundness Increase Shareholder Returns Strengthen the Management Base Reduce Business Risk ROE = RORA x financial leverage (inverse of CET1 ratio) →Improve RORA while maximizing use of capital (increase financial leverage) ● Improve earnings by restructuring the yen interest-rate portfolio with no risk assets • Improve earnings by increasing the balance of risk assets and strategic investment areas through the use of capital, and improve RORA by optimizing asset allocation Increase earnings by boosting transaction volume and optimizing commissions through realizing complementarity between the physical and the digital Pursue business reform and drastic cost cuts through the use of digital technology Maintain relationships and a stable deposit base by providing services that meet customer needs Promote unique GP Business in JPB appropriate manner by identifying small and medium-sized enterprises with growth potential, providing equity capital through various frameworks, and offering marketing support for investees Ensure capital adequacy ratio and CET1 ratio (excluding unrealized gains on available- for-sale securities) of approximately 10% in ordinary times Aim to increase dividends in line with profit growth, based on a dividend payout ratio of approximately 50% Consider share repurchases based on market conditions, internal reserves, etc. Promote sustainability management and human capital management Enhance information disclosure and IR activities Practice effective control of major risks Curtail earnings volatility Largest customer base of any Japanese bank 120 million ordinary deposit accounts JP JAPAN POST BANK BANK Japan Post Bank's Unique Strengths Most extensive and stable deposit base in Japan JPY 194tn in deposits, centered on retail banking customers Strive for Sustained Increase of ROE Enhance Control the cost of shareholders' equity Nationwide network corporate value (Increase PBR to above 1x) covering every corner of the country Network of approx. 24,000 branches Copyright© JAPAN POST BANK All Rights Reserved. 0#111. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Restructuring of the Yen Interest-rate Portfolio (1) Paradigm Shift in Portfolio + Next Actions We achieve a paradigm shift in the portfolio by shifting investments from JGBs to risk assets in the face of declining yen interest rates. From 2023 onward, we capture the reversal trend of yen interest rates by shifting investments from due from banks, etc. to JGBs (restructuring of the yen interest-rate portfolio). (%) 2.0 1.5 1.0 0.5 0.0 Sophisticated Risk Management and Timely and Appropriate Actions in Line with Market Fluctuation As of Oct. 1, 2007 (Corporatization) As of Mar. 31, 2016 (FY end of IPO) As of Mar. 31, 2023 (the end of FY2023/3) Foreign securities, etc. 0.1% Others 9.2%2 Others 15.3%*² JGBs JGBs Others*2 18.3% 16.8% 40.1% Due from banks, etc. 2.5% AUM JPY 220.7tn To Reverse & Expand AUM JPY 204.8tn JGBs"1 88.0% Foreign securities, etc. 22.1% Due from banks, etc. 22.3% Foreign securities, etc. 34.6% AUM JPY 226.3tn Due from banks, etc. 30.1% (0.5) End Mar. 07 Interest rate of 10-year JGB Source: JGB interest rate information 2008- Commenced and Expanded Investments in Overseas Credit Assets Jan. 2016 QQE with negative interest rates by BOJ 2016- Commenced Investments in Strategic Investment Areas Assets, and focused on them PE and Real estate funds revenue in full swing 2020- Enhanced Stress Resilience of Investment Portfolios 2023- Restructuring of the Yen Interest- rate Portfolio - Ministry of Finance Japan Apr. 2013 Quantitative and Qualitative Monetary Easing ("QQE") by BOJ End Mar. 09 End Mar. 11 End Mar. 13 Sep. 2016 QQE with Yield Curve Control (YCC”) by BOJ End Mar. 15 Mar. 2020 Corona crisis End Mar. 17 Mar. 2021 Clarification of YCC policy (approx. ±0.25%) by BOJ End Mar. 19 End Mar. 21 Dec. 2022, Jul. 2023, Oct. 2023 YCC tweak by BOJ End End Mar. Oct. 23 23 *1 Include deposits to the Fiscal Loan Fund which were postal savings funds deposited with the Ministry of Finance Japan. All deposits to the Fiscal Loan Fund were redeemed through November, 2010. *2 Consist of Japanese local government bonds, corporate bonds, money held in trust, loans, short-term investments, etc. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 10 10#12Restructuring of the Yen Interest-rate Portfolio (2) Reverse Balance of JGBS and Expand Profits 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Within FY2024/3 Q2, we reverse the balance of JGBs, which has been continuously declining since the BOJ adopted a negative interest rate policy in 2016, and turn into a phase of earnings expansion. (trillion yen) 100 80 60 60 40 40 Balance of JGBs*1 Shrank by approx. 50% in 7 years More than 7Y to 10Y Over 10Y More than 3Y to 7Y Market Business Earnings*2 (billion yen) To Reverse & Expand To Reverse & Expand 1,500 Shrank to approx. 1/5 in 7 years 931.3 1,000 500 214.4 Yen interest rate assets' 1,009,0 net interest income, etc. 20 20 More than. 1Y to 3Y $22.0 Risk assets' net interest income, 1Y or less etc. 0 0 End End End End End End End FY15 FY17 FY19 FY21 FY22 Mar. Mar. Mar. Mar. Mar. Jun. Sep. 16 18 20 22 23 23 23 (trillion yen) JGB Balance 82.2 62.7 53.6 49.2 38.1 37.6 38.9 More than 7Y to 10Y 8.1 5.8 4.6 6.5 1.3 0.7 1.5 (Ref.) JGB 10Y yield (0.04%) 0.04% 0.03% 0.21% 0.38% 0.42% 0.77% Reverse and expand yen interest rate assets' net interest income, etc. Pursue sustained growth of risk asset's net interest income, etc., which had expanded under the low yen interest rate environment Source: JGB interest rate information - Ministry of Finance Japan *1 Except JGBs in money held in trust. *2 Non-consolidated and management accounting basis. "Risk assets" consist of Japanese local government bonds, corporate bonds, loans, stocks (money held in trust), foreign securities, and strategic investment areas, etc. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 11#13Restructuring of the Yen Interest-rate Portfolio 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data (3) Scope and Feasibility of Expanding JGB holdings While the Bank of Japan's holdings of JGBs have increased due to its unprecedented monetary easing, JGB holdings by Japan Post Bank and other banks have decreased. - There is significant capacity for expansion in our JGB holdings due to the BOJ's monetary policy tweaks. Balance of JGB Holdings by Business Type* (trillion yen) 600 BOJ (Ref.) JGB Issuance Plan for FY2024/3 (trillion yen) FY2024/3 (Initial) VS 500 per time times total FY2023/3(2nd Supplementary Budget) 400 40-Year 0.7 х 6 4.2 30-Year 0.9 ✗ 12 10.8 300 Insurance 20-Year 1.2 × 12 14.4 200 Foreigners To Reverse & Expand 10-Year 2.7 ☑ 12 32.4 5-Year 2.5 100 2-Year 2.9 x х 12 30.0 12 34.8 0.9 Banks (exc. JPB) JPB 0 End End End End End End End End Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. TBs 10-Year Inflation-Indexed 50.7 (13.9) 0.25 X 4 1.0 0.2 09 11 13 15 17 19 21 23 BOJ's 8% 8% 13% 26% 39% 43% 44% 47% Liquidity Enhancement 12.0 share JPB's 19% 16% 14% 10% 6% 5% 4% 3% Auction Total 190.3 (12.8) share Source: Compiled by Japan Post Bank based on Bank of Japan "Flow of Funds Accounts" Source: "Market Issuance Plan by Issue" - Ministry of Finance Japan * Total of JGBS, FILP bonds and treasury discount bills. In addition to the above business types, Public pension, Securities firms, and others also have JGB holdings. Percentage of market share is based on the total that includes holdings by these business types. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 12#14Restructuring of the Yen Interest-rate Portfolio (4) Robust B/S Structure to Support Investments 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data With the huge retail customer base and stable funds supported by the largest physical branch network among Japanese banks, we have expanded risk assets, and in addition, restructured the yen interest-rate portfolio deploying due from banks, etc. Held-to-maturity Approx. JPY 16tn Available-for-sale: Approx. JPY 23tn Large amount of standby funds available for investment The Bank's BS (non-consolidated) Total assets JPY 230tn (as of Sep. 30, 2023) JGBs*1 JPY 40tn Ordinary Deposits JPY 108tn The huge retail customer base and stable funds supported by the largest physical branch network among Japanese banks Retail Deposit Ratio Approx. 97% Insured Deposit Ratio³ Approx. 91% Number of Ordinary Deposit accounts Due from banks, etc. JPY 63tn Deposits JPY 194tn More than 50% are sticky core deposits. Deposits Approx. JPY 194tn Foreign securities² JPY 85tn TEIGAKU deposits JPY 68tn Others Sovereign bonds: Approx. JPY 8tn Corporate bonds: Approx. JPY 64tn : Approx. JPY 13tn (PE Approx. JPY 6tn) Number of Branches* Approx. 24,000 *4 Others Others JPY 41tn Others / Net assets JPY 36tn Approx. 120 million Number of ATMs Approx. 31,000 *1 Include JGBs in money held in trust. *2 Include real estate funds and direct lending funds in money held in trust. *3 Deposits that meet the requirement under the Deposit Insurance System in the Deposit Insurance Act divided by total deposits. *4 Includes post offices. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 13#15Restructuring of the Yen Interest-rate Portfolio 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data (5) Impact of Rising Yen Interest Rates on P/L (Simple Illustration)*1 Due to rising yen interest rates, the Bank's P/L has improved (Increased interest received > Increased foreign currency funding costs). Restructuring of the Yen Interest-rate Portfolio (Example) Increase in long-term interest rates : Annual net income (abandonment of the YCC policy) increase of JPY 100bn (In case of an additional investment of JPY 10tn in 10-year bonds yielding 1%) New Investments : Improvement in investment yield x Increase in investment amount Existing Holdings Bulk is in fixed bonds, and the impact is neutral The Bank's BS (non-consolidated) Total assets JPY 230tn (as of Sep. 30, 2023), JGBs*2 JPY 40tn Due from banks, etc. JPY 63tn Deposits JPY 194tn Ordinary Deposits JPY 108tn More than 50% are sticky core deposits. If deposit interest rates rise, interest payments will increase. (Impact on both exisiting deposits and new deposits. However, interest rate spreads would still be secured due to the lag behind the rise in market interest rates) Lifting of negative interest rate policy. (increase in short-term interest rates) Annual net income increase of JPY 50bn (In case of a 10bp rise in yen short-term interest rates) Foreign securities³ JPY 85tn TEIGAKU deposits JPY 68tn Decrease in foreign currency funding costs*4 - Yen short-term interest receivables position is approx. JPY 50tn →Immediate improvement in yields Others JPY 41tn Others Others / Net assets JPY 36tn If deposit interest rates rise, interest payments will increase. (Impact on only new deposits (including reposits). However, interest rate spreads would still be secured due to the lag behind the rise in market interest rates) *1 Theoretical impact on the Bank's P/L from potential movements of market environment. Actual impact may differ due to changes in market conditions and the Bank's ALM policy. *2 Include JGBs in money held in trust. *3 Include real estate funds and direct lending funds in money held in trust. *4 Investment trusts raise capital within the fund, and foreign currency funding costs depend on differences in yen and foreign interest rates. EP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 14#161. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Market Business: Risk Assets and Strategic Investment Areas We will continue to utilize capital and expand the balance of risk assets as well as strategic investment areas toward the end of FY2026/3. Risk Assets*1 (Non-consolidated) Strategic Investment Areas *² (Non-consolidated) (trillion yen) 120 (trillion yen) Approx. JPY 11-12tn Approx. JPY 110tn 12 11.2 103.0 99.4 Approx. JPY 100tn 10.1 0.9 Approx. JPY 10tn*3 (to be revised) 100 10 94.9 Strategic Others 91.1 11.2 investment areas 0.8 10.1 84.8 6.4 4.2 3.3 2.6 2.9 2.6 2.8 2.6 2.3 2.6 2.0 Stocks (money 80 2.2 held in trust), etc. Loans 4.0 8 2.2 3.5 Real estate funds 6.4 (Unrealized gains: JPY 0.1tn) 0.6 60 68.2 69.8 71.3 74.0 63.4 ☑Foreign securities, etc. 4.2 2.6 40 40 4 0.4 3.3 0.4 1.5 5.6 6.2 Private equity funds (PE) (Unrealized gains: JPY 1.2tn) 20 20 2 1.0 3.2 Corporate bonds, etc. 7.5 5.9 7 5 7 5 59 7.5 5.4 54 2.2 7.4 7.3 5.5 5.6 36 7.3 Japanese local 1.7 5.7 government bonds 0 0 End End End End End Mar. Mar. Mar. Mar. Sep. 20 21 22 23 23 End End Mar. Mar. 24 26 End End End End End End End Mar. Mar. Mar. Mar. Sep. Mar. Mar. 20 21 22 23 23 24 26 (actual) (outlook) Mid-term (actual) (outlook) (Mid-term) Plan Plan Note: Following the application of "Implementation Guidance on Accounting Standard for Fair Value Measurement" (revised 2021), private equity funds and real estate funds, excluding some assets, are calculated on a fair value basis from FY2023/3 onward. *1 Assets other than yen interest rates (JGBs, etc.) *2 Private equity funds, Real estate funds, Direct lending funds and Infrastructure debt funds, etc. *3 The target balance as of the end of Mar. 2026 will be revised, because the balance of strategic investment areas is based on a fair value basis from the end of Mar. 2023 (as noted above) and the balance is currently higher than the target. The revision of target will be announced in May 2024, along with the revised Mid-term Plan. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 15#171. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data (Ref.) Capital Investment Targets and Prospect for CET1 Ratio Due to additional investment in risk assets and reinforcement of financial regulations, the CET1 ratio is expected to fall gradually by March 31, 2026. However, we will ensure sufficient financial soundness, keeping a CET1 ratio over 10%, the minimum level to be secured in ordinary times. 12.38%*1 (estimate) <Numerator> Capital Investment Targets and Prospect for CET1 Ratio (Excluding Unrealized Gains on Available-for-sale Securities) Expected to fall gradually to around 10% (the minimum level to be secured in ordinary times, that was formulated in the Mid-term Plan) Steady accumulation of profit around 10%*2 (estimate) (Ref.) Minimum levels to be secured in ordinary times Although the Bank is a domestic standard bank, given certain factors such as the size of the Bank's overseas credit, we set a CET1 ratio of approx. 10%*2 as the minimum level to be secured in ordinary times, based on the idea that we should aim for capital management of a level commensurate with large-scale domestic financial institutions. Minimum levels to be secured in ordinary times End (Shareholder returns based on a dividend payout ratio approx. 50%) <Denominator> • Investment in risk assets • Reinforcement of financial regulations (Basel II finalization) The impact of increasing the denominator is greater than that of increasing the numerator. Sep. 2023 JP JAPAN POST BANK BANK End Mar. 2026 approx. 10% 10.0% 2.5% 7.5% 0.5% 7.0% Risk buffer Ensuring sufficient tolerance even in the event of unexpected stress events Additional buffer 2.5% Capital conservation buffer 4.5% 4.5% Minimum common equity Tier1 ratio CET1 ratio *1 Calculation for some items are simplified. *2 CET1 ratio of FY2026/3 is based on full implementation of Basel III. Copyright© JAPAN POST BANK All Rights Reserved. 16#181. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Retail Business (1) Digital Strategy (Platform Strategy) Provide safe and secure services to customers throughout Japan through complementarity between the physical and the digital Our goal is to increase transaction volume by advertising and linking optimal services to customers through our applications, while also expanding the number of the Bankbook App users. [Platform Strategy] Refer customers to the Bankbook App Expand the Bankbook App Expand PFM (Personal Financial Management) App Establish Co-creation Platform [Mobile App development] Digital ゆうちょ通帳アプリ Influx Physical 02 Consultation Support Yucho Bankbook App (Yucho In Hand) Basic banking features As of Sep. 30, 2023 8.91mn accounts (Compared with as of Mar. 31, 2023 +1.46mn accounts) Target (KPI) as of Mar. 31, 2026 10mn accounts Step up ◎ ゆうちょレコ PFM (Personal Financial Management) App “Yucho Reco” Manage finances and visualize assets Recommendation based on data analysis • Life planning Advertisement / Referring customers ゆうちレコ Referring customers Advertisement / [Building a platform] Co-creation Platform (Partner companies) An alliance with various business operators to meet customer needs Products of Japan Post Group Loans Insurance Securities AI ((E.g.) Robo-advisors) E-commerce ...etc. Oct. 2023 Sony Bank Pilot advertisement to introduce "Sony Bank's Foreign Currency Deposits" Current Situation Increase steadily in users, mainly in their 20s- 30s (8.91mn accounts) Offer a full range of banking services by adding features of ordinary in-payments and ATM deposit and withdrawal (May 2023) JP JAPAN POST BANK BANK Release PFM App (Feb. 2023) Improve UI/UX based on user feedback after release Consider advertisement and customer referral strategies based on customer data from the Bankbook App & PFM App with a lineup in both financial and non-financial services Launch a pilot advertisement to introduce "Sony Bank's Foreign Currency Deposits" (Oct. 2023) Copyright© JAPAN POST BANK All Rights Reserved. 17#191. Summary 2. How to Increase Corporate Value 3. Appendix Retail Business (2) Progress in Improving the Work Efficiency from Quantitative Aspects 4. Financial Data We have steadily reduced G&A costs and increased profits in our retail business. From now on, we will attempt to sustain G&A cost reductions through digital technologies as well as other means, and to maximize retail business earnings through increased transaction volume, price optimization, etc. G&A Expenses / Retail Business Earnings*1 Headcount Reduction, Work Reforms and Productivity Improvements (billion yen) 1,100 1,000 900 G&A expenses 1,064.0 IN (1)G&A expenses (billion yen) 130 Personnel expenses (Left) Average annual salary (Right) (thousand yen) 7,000 6,845 6,699 6,759 6,746 6,770 6,546 6,502 120 6,500 Reduced 924.7 JPY 139.2bn in 7 years (Improved approx. 13%) 126.4 123.2 123.2 124.2 110 120.6 6,000 117.2 115.1 + 113.7 0 0 0 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 (billion yen) 200 Total improvement (No. of employees) JPY 195.8bn (No. of employees) 20,000 7,000 18,618 18,382 17,937 147.8 150 + 18,000 17,161 6,000 16,472 5,425 5,531 5,457 15,933 (2) Fees & 16,000 5,191 5,000 15,221 commissions 4,925 14,625 100 91.1 Fees & 14,000 Total Headcount"² (Left) 4,303 4,000 Increased commissions 3,904 0 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 JPY 56.6bn in 7 years (Increased approx. 60%) Total Headcount at 0 16/4 *2 As of Apr. 1. *1 FY16 and earlier: non-consolidated basis, after FY17: consolidated basis. directly-operated branches "2,3 (Right) 17/4 18/4 19/4 20/4 21/4 *3 Until FY2023/3, headcount of Counter Services, Financial Consulting and Fund managing Depts. From April 2023, headcount of Financial Services (2 Depts. merged) and Fund managing Dept. 3,526 0 22/4 23/4 JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 18#201. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Σ Business: New Corporate Banking Business Strategy We started Σ Business in Oct. 2022 and set the initial two-year preparation period (ending Sep. 30, 2024). So far, we have selected three investment vehicles. We will continue to expand our GP business in a JPB appropriate manner. Local Financial and Other Institutions Equity Debt Return Business Operators with a Willingness to Grow in the Region Investment Equity Management Support Return Business Operator Information from Each Financial Institution Regional Headquarters Information Collaboration Σ Business Screw (Investment Vehicle) Common Investment Projects + Investment Projects in Fields of Expertise Japan Post Investment Corporation Regional Development and Impact Fund Majority Investment Fund FRONTIER CAPITAL INC. PROSPER Inc. Plan Do See Inc. Hands-on Support for Core Regional Companies Hands-on Support Centered on the Tourism Business Business Revitalization Investment Company Destination for Regional Businesses Venture Investment Company Venture Investment Hands-on Support Trading Company Newly Established Joint Venture Trading Company Function Hands-on Support Nationwide Business Operator Information Human Resources Investment Joint Ventures (Partners) JAPAN POST BANK EP JAPAN POST BANK BANK Investment Local Financial and Other Institution Investors (Anchor Investors / Partners) Information Collaboration Copyright© JAPAN POST BANK All Rights Reserved. 19#211. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Enhancement of Shareholder Returns Dividend per share for FY2024/3 is planned to be JPY 50 (dividend payout ratio of 54.0%), based on FY2024/3 earnings forecasts and the shareholder return policy. Additional shareholder return policies (incl. share buyback) will be considered in light of future earnings growth, internal reserves, regulatory trends, and the Japan Post Group's disposal policies, etc. Realize Stable Profits and Dividends Continue stable profits and dividends Profits: In FY21, we achieved the highest profits since listing We have steadily increased profits in the harsh environment DPS: Since listing, we have continued JPY 50 DPS <Net Income (Consolidated) / Dividends> Shareholder Return Policy Taking into consideration the balance between shareholder returns, financial soundness and growth investments, throughout the term of the Mid-term Plan (FY2022/3 through FY2026/3), the basic policy is to maintain approx. 50% dividend payout ratio Target dividend payout ratio of 50-60% while keeping in mind the stability and sustainability of dividends, and target to increase dividends from the dividends from the initial FY2022/3 forecast (billion yen) 400 Stable increase of profits 300 266.1 273.4 280.1 The highest profits 70.4% 68.5% 200 66.9% Dividend payout ratio Net income 100 Total dividend payment 0 FY18 FY19 since listing 355.0 52.7% Continue JPY 50 DPS FY20 JP JAPAN POST BANK BANK 335.0 (Forecast) 325.0 57.5% 54.0% (Forecast) Financial Soundness FY21 FY22 FY23 Shareholder Returns Well-balanced Capital Management Growth Investments Copyright© JAPAN POST BANK All Rights Reserved. 20 20#2201 Executive Summary P.3 02 How to Increase the Corporate Value P.7 04 03 Appendix FY2024/3 H1 Financial Data (Non-consolidated Basis) JP JAPAN POST BANK BANK P.22 P.62 Copyright© JAPAN POST BANK All Rights Reserved. 21 21#23Overview of FY2024/3 H1 Results (1) Results 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance For FY2024/3 H1, net income attributable to owners of parent stands at JPY 182.1bn. It equated to 54.3% of the full-year earnings forecast and remained strong, so full-year earnings forecast and annual dividend forecast have been unchanged. Results for FY2024/3 H1 (Consolidated) (billion yen) Net interest income, etc. General and administrative expenses I Net fees and commissions Net ordinary income (billion yen) FY2023/3 H1 FY2024/3 H1 FY2024/3 (Ref.) FY2023/3 Actual (A) Actual (B) Increase (Decrease) Forecast Actual (B)-(A) Net income attributable to owners of parent Net interest (1) *1 608.9 641.0 32.0 1 1,260.0 1,231.6 (1) 490.8 income, etc. 455.5 Main drivers of increase and decrease 253.8 220.1 355.0 325.0 Net fees and commissions 75.0 77.5 2.4 1 153.0 147.8 182.1 158.6 128.4 147.8 General and administrative 465.2 466.9 1.6I 944.0 924.7 I expenses 75.0 77.5 1,327.5 1,231.6 Net ordinary 220.1 253.8 33.6 470.0 455.5 income 608.9 641.0 Net income (465.2) (466.9) attributable to owners of parent 158.6 [Progress rate*2] 182.1 [54.3%] 23.5 335.0 325.0 [101.5%] (981.4) (924.7) Dividend per share [Dividend payout ratio] JPY 50 [54.0%] JPY 50 [57.5%] FY21 FY22 FY22 FY23 H1 *1 Net interest income, etc. = Interest income - Interest expenses (including gains (losses) on sales, etc.) H1 (3) *2 The progress rate to forecast for net income attributable to owners of parent (the achievement rate in FY2023/3) JP JAPAN POST BANK BANK Operations for risk controls [Sales of stocks, etc. approx. JPY +267.0bn] Foreign bond investment trusts Strategic investment areas [approx. JPY +16.0bn] [approx. JPY (98.0) bn] - Private equity funds [approx. JPY (77.0)bn] Real estate funds [approx. JPY (20.0) bn] JGBs, etc. [approx. JPY (20.0) bn] Others [approx. JPY (133.0)bn] Increase in foreign currency funding costs ATM related commissions [approx. JPY +2.0bn] Increase in IT expenses [approx. JPY +6.0bn] Agency commissions paid to Japan Post and Contributions paid to the Organization for Postal Savings, Postal Life Insurance and Post Office Network [approx. JPY (4.5)bn] Copyright© JAPAN POST BANK All Rights Reserved. 22 22#24(Ref.) Changes in Net Ordinary Income for Earnings Forecasts (Simple Illustration) (1) vs Forecasts 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Σ Business Governance Asset Management Causes of Changes in Net Ordinary Income (Consolidated) [FY2024/3 H1 Forecasts vs FY2024/3 H1 Actual] Note: The addition of total changes to the forecast for FY2024/3 H1 does not equal the FY2024/3 H1 results due to rounding, other ordinary income/expenses and similar factors. (billion yen) Net interest income, etc. 15.0 Deepening Market Operations and Risk Management Innovations in Retail Business Work Reforms and Productivity Improvement, etc. Net ordinary Income 470.0 Net ordinary income 233.0 Net income 166.0 (28.0) 65.0 Strategic investment areas (27.0) Gains on sales of stocks, etc. Foreign bond investment trusts FY2024/3 H1 (Forecast) JP JAPAN POST BANK BANK Net ordinary Net income 335.0 (5.0) income 253.8 2.5 0.5 2.5 Net fees Others JGBs, etc. (Foreign and commissions G&A expenses currency funding costs, etc.) Positive factors : Negative factors Net income 182.1 FY2024/3 H1 (Actual) FY2024/3 (Forecast) Copyright© JAPAN POST BANK All Rights Reserved. 23#25(Ref.) Changes in Net Ordinary Income for Earnings Forecasts (Simple Illustration) (2) YoY 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Causes of Changes in Net Ordinary Income (Consolidated) [FY2023/3 H1 Actual vs FY2024/3 H1 Actual] Note: The addition of total changes to the FY2023/3 H1 results does not equal the FY2024/3 H1 results due to rounding, other ordinary income/expenses and similar factors. (billion yen) Net interest income, etc. 32.0 Deepening Market Operations and Risk Management Innovations in Retail Business Work Reforms and Productivity Improvement, etc. Net ordinary Income 470.0 Net ordinary income 220.1 Net income 158.6 (98.0) Strategic investment areas (20.0) JGBs, etc. FY2023/3 H1 (Actual) JP JAPAN POST BANK BANK (133.0) Net ordinary Net income 335.0 2.5 1.5 Income 253.8 Net fees 267.0 Others (Foreign currency funding 16.0 Foreign bond investment trusts and commissions G&A expenses costs, etc.) Gains on sales of stocks, etc. : Positive factors : Negative factors Net income 182.1 FY2024/3 H1 (Actual) FY2024/3 (Forecast) Copyright© JAPAN POST BANK All Rights Reserved. 24#26Overview of FY2024/3 H1 Results (2) Capital Adequacy Ratio and CET1 Ratio 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance The consolidated capital adequacy ratio as of September 30, 2023 was 15.30%, down 0.22% compared to March 31, 2023. This decrease in consolidated capital adequacy ratio was the result of the increase in the total amount of risk-weighted assets (denominator), mainly due to an increased balance in strategic investment areas. Capital Adequacy Ratio and CET1 (Common Equity Tier1 Capital) Ratio (Consolidated) (trillion yen) Credit risk-weighted assets I Operational risk equivalent / 8% Capital adequacy ratio As of Mar. 31, As of Sep. 30, (billion yen) Increase (Decrease) 2023 (A) 2023 (B) (B) - (A) Main drivers of increase and decrease Capital adequacy ratio 15.53% 15.30% (0.22)% 15.56% 15.29% 15.53% Total capital 9,224.4 9,345.6 (1) 121.1 (1) 15.30% Risk-weighted assets 59,395.1 61,051.1 1,656.0 Minimum level to be secured is approx.10% in ordinary times (2) Credit risk-weighted assets 56,938.2 58,760.5 (2) 1,822.2 Regulatory level is 4% or more Increases in profit FY2024/3 H1 net income: [JPY +182.1bn] Mainly due to an increased balance in strategic investment areas (trillion yen) 61.1 61.0 59.1 59.3 2.4 2.2 2.5 2.4 As of As of Increase Mar. 31, Sep. 30, (Decrease) 2023 (A) 2023 (B) (B) - (A) CET1 ratio (estimate*) 14.28% 12.38% (1.89)% 58.6 58.7 Excluding unrealized gains on 56.5 56.9 14.01% 12.38% (1.62)% available-for-sale securities Total capital 8.8 8.5 (0.2) (3) Risk-weighted assets 63.3 69.2 (3) 5.9 End End Mar. Sep. Mar. 22 22 23 End End Due to an increased balance in strategic investment areas, yen depreciation, etc. Sep. 23 *Calculation for some items are simplified. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 25 25#27Overview of FY2024/3 H1 Results (3) Financial / KPI Targets Profitability Result for FY2024/3 H1/ Efficiency 1. Summary Financial Results FY2026/3 Target > Result for FY2024/3 H1/ FY2026/3 Target OHR Consolidated Net income JPY 182.1bn JPY 350.0bn or more Financial basis including gains (losses) on money held in trust 65.07% 66% or less 2. How to Increase Corporate Value Asset Management 3. Appendix 4. Financial Data Σ Business Governance Soundness Result as of Sep. 30, 2023 15.30% As of Mar. 31,\ 2026 Target approx. 10% level to be secured Capital adequacy ratio ( domestic standard ) Target Items <Consolidated> ROE based on shareholders' equity *1 Annualized basis Balance of risk assets Target KPIs Balance of strategic investment areas 3.6% 3.85%*1 or more Investment Result as of Sep. 30, 2023 JPY 103.0tn as of Mar. 31, 2023 JPY 99.4tn JPY 11.2tn As of Mar. 31, 2026 Target approx. JPY 110tn Retail General and administrative expenses [ JPY (36.8)bn JPY (55.0) bn compared to FY2021/3 H1 (compared to FY2021/3 As of Mar. 31, 2026 Target 10mn accounts CET1 Ratio (international standard] excluding unrealized gains on available-for-sale securities 12.38% *2 Based on full implementation of Basel III. approx. 10%*2 level to be secured Regional Relationship Regional vitalization fund participation cases Result as of Sep. 30, 2023 cumulatively 48 cases as of Mar. 31, 2023 cumulatively 45 cases ] As of Mar. 31, 2026 Target cumulatively 50 cases Number of accounts registered in the Bankbook App as of Mar. 31, 2023 JPY 10.1tn approx. JPY 10tn Number of Tsumitate NISA Operation Accounts Result as of Sep. 30, 2023 8.91mn accounts as of Mar. 31, 2023 7.45mn accounts 29 ten thousand accounts as of Mar. 31, 2023 23 ten thousand accounts 40 ten thousand accounts Number of financial institutions that have aggregated operational processes cumulatively 5 financial institutions as of Mar. 31, 2023 cumulatively 5 Financial institutions roughly 20 financial institutions Balance of ESG-themed investments JPY 3.7tn as of Mar. 31, 2023 JPY 4tn JPY 3.2tn JP JAPAN POST BANK BANK (Ref.) ATM Network (As of Sep. 30, 2023) Number of ATMs approx. 31,000 Number of partner financial institutions available at ATMs approx. 1,250 Of which institutions sharing ATM network platform*³ 21 (In FY2024/3 H1: 1 institution) *3 A partnership arrangement for waiving fees when an ATM card of a regional financial institution is used at a JP Bank ATM. Terms and conditions for waiving fees are set by each financial institution. Copyright© JAPAN POST BANK All Rights Reserved. 26 46#28Deposit Balance 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Deposits on September 30, 2023 amounted to JPY 194.1tn, down JPY 0.8tn from March 31, 2023. Ordinary deposits increased by JPY 2.5tn due to transfers from time and TEIGAKU deposits at maturity, etc. Deposit Balance (Non-consolidated) (trillion yen) (trillion yen) Fixed-term deposits Liquid deposits As of Mar. 31, 2023(A) As of Sep. 30, 2023 (B) Increase (Decrease) (B) - (A) Main drivers of increase and decrease Other deposits Liquid deposits 119.6 122.1 2.5 193.4 0.1 193.7 0.1 194.9 0.1 194.1 0.1 Transfer deposits 12.7 12.7 0.0 (1) (2) Ordinary deposits, etc.* 106.1 108.6 (1) 2.5 Transfers from time and TEIGAKU deposits to ordinary deposits at maturity, etc. 112.2 115.2 119.6 Savings deposits 0.7 0.7 0.0 122.1 Fixed-term deposits 75.2 71.8 (2) (3.3) i Time deposits 3.3 3.1 (0.1) TEIGAKU deposits 71.9 68.7 (3.1) 81.0 78.3 75.2 71.8 Other deposits 0.1 0.1 (0.0) Total 194.9 194.1 (0.8) End Mar. 22 End Sep. 22 End Mar. 23 End Sep. 23 * Ordinary deposits, etc. = Ordinary deposits + Special deposits (equivalent to ordinary savings) JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 27 27#29Fees and Commissions 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Net fees and commissions for FY2024/3 H1 increased by JPY 2.5bn year on year to JPY 76.8bn. Net fees and commissions have steadily increased from the previous year due to the impact of the April 2023 fee revision, etc. Fees and Commissions (Non-consolidated) (billion yen) Exchange and settlement transactions ■ATM related commissions (billion yen) Increase FY2023/3 H1 (A) FY2024/3 H1 (B) (Decrease) (B) - (A) Investment trust related commissions Net fees and commissions 74.2 76.8 2.5 Other than the above (1) 146.3 10.4 127.4 11.8 7.2 13.6 32.8 22.7 Exchange and settlement transactions 46.4 45.5 (1) (0.8) Zengin-net fee 6.3 7.0 0.6 ATM related commissions 16.6 18.6 (2) 2.0 (2) Investment trust related 6.1 5.9 (0.1) commissions 74.2 76.8 6.6 5.1 Variable annuities 0.1 1.2 (3) 1.0 I 6.1 5.9 16.6 18.6 JGBS related commissions 0.9 1.1 0.1 91.1 83.7 Credit cards 1.7 1.7 0.0 46.4 45.5 Consumer loans 0.6 0.7 10 0.1 Others 1.6 1.7 0.0 00 FY21 FY22 FY22 H1 FY23 H1 * Include Yucho Fund Wraps (discretionary investment contract services). JP JAPAN POST BANK BANK Main drivers of increase and decrease Decrease in the number of ordinary in- payments One of the reasons is digital payments that have become increasingly popular The impact of the fee revision in April 2023 Fee increases in Seven Bank's ATMs Increase in number of sales transactions Copyright© JAPAN POST BANK All Rights Reserved. 28#30General and Administrative Expenses 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance General and administrative expenses for FY2024/3 H1 increased by JPY 1.4bn year on year to JPY 465.6bn. While personnel expenses and commissions on bank agency services, etc. paid to Japan Post steadily decreased, IT expenses have increased due to core system renewals. G&A Expenses (Non-consolidated) Main drivers of increase and decrease Reductions in employee numbers brought about by factors such as fewer new hirings (Ref.) Number of employees (Refer to page 71) as of Sep. 30, 2023: 11,852 people [YOY: (286) people] as of Sep. 30, 2022: 12,138 people Increase in IT expenses [approx. JPY +6.0bn] Commissions on bank agency services, etc. paid to Japan Post and Contributions paid to the Organization for Postal Savings, Postal Life Insurance and Post Office Network [approx. JPY (4.5)bn] (billion yen) (billion yen) Increase FY2023/3 H1 (A) FY2024/3 H1 (B) (Decrease) Personnel expenses ■Non-personnel expenses (B) - (A) Personnel expenses* 56.2 55.3 (0.8) ■Taxes and dues Salaries and allowances 45.9 45.0 (1) (0.8) (1) 979.0 44.9 922.1 35.4 Non-personnel expenses 389.8 392.7 (2) 2.9 i Commissions on bank agency services, 174.2 163.3 (3) (10.9) etc. paid to JAPAN POST Co., Ltd. Contributions paid to the Organization 819.0 772.9 464.2 18.1 465.6 for Postal Savings, Postal Life Insurance and Post Office Network 115.3 121.8 6.4 17.4 Deposit insurance expenses paid to Deposit Insurance Corporation of Japan 13.7 13.9 0.2 389.8 392.7 Taxes and dues 18.1 17.4 (0.6) 115.1 113.7 FY21 FY22 56.2 FY22 H1 55.3 FY23 H1 Total 464.2 465.6 1.4 * Personnel expenses include non-recurring losses. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 29 29#31Market Situation 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance In FY2024/3 H1, main risk factors such as domestic and foreign interest rates exceeded expectations* due to a number of issues, such as trends in monetary policy in U.S. and Japan. Domestic and Foreign Interest Rates / Dollar Funding Cost * Assumptions at the time of formulating the FY2024/3 earnings forecast US IG and HY Spread / US Dollar/Yen (%) 1.8 1.5 1.2 0.9 Actuals 0.6 20-year JGB 10-year JGB 0.3 0.0 End Mar. (%) 22 7.0 6.0 WA UO 5.0 5-year UST 4.0 Assumptions* (Ref.) Mid-term Plan 1.72 (23/10) 1/48 (bp) 600 500 Actuals 400 0.95 (23/10) 0.77 300 US HY spread 200 Assumptions* 394 (Ref.) Mid-term Plan 437 (23/10) 121 129 (23/10) 100 US IG spread 0 End End End End End Dec. Mar. Jun. Sep. Dec. 22 23 23 23 23 End Mar. 24 End End End End End End End Mar. Dec. Mar. Jun. Sep. Dec. Mar. 22 22 23 23 23 23 24 (dollar/yen) 170 6.06 6.00 (23/10) 160 4.85 (23/10) 150 150 (23/10) 150 4.61 140 130 US dollar/yen 120 110 100 End End End End End End End Dec. Mar. Jun. Sep. Dec. Mar. Mar. 22 23 23 23 23 24 22 End End End End End End Dec. Mar. Jun. Sep. Dec. Mar. 22 23 23 23 23 24 3.0 2.0 Dollar funding cost (3M) 120 1.0 0.0 End Mar. 22 EP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 30 50#32Unrealized Gains (Losses) on Financial Instruments 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Net unrealized losses on financial instruments (available-for-sale) after taking into consideration gains (losses) from hedge accounting were JPY 556.4bn as of September 30, 2023 (before application of tax effect accounting), decreasing by JPY 770.4bn from March 31, 2023. Unrealized gains decreased mainly as a result of rising domestic and overseas interest rates. (trillion yen) JGBs Investment trusts Others Foreign bonds Domestic stocks Total Available-for-sale Securities (Non-consolidated) Available-for-sale As of Sep. 30 2023 Amount on the balance sheet / Notional amount As of Sep. 30, 2023 Net unrealized gains (losses) / Net deferred gains (losses) (billion yen) VS Mar. 31, 2023 (189.8) (1) 922.2 Main drivers of increase and decrease Due to rising domestic interest rates VS Mar. 31, 2023 113,600.5 834.4 927.4 Securities (a) 107,285.5 1,084.2 2,138.4 Japanese government 22,673.0 (399.1) bonds 1.2 10 204 0.01.2 1.4 0.0 10 1.0 2.6 (0.3) 0.0 0.1 1.4 州 (1.6) (0.0) (3.2) (0.4) (2.1) 0.9 Foreign bonds 22,560.9 195.6 0.3 Investment trusts' 53,740.2 1,630.0 1.1 Others 8,311.3 (342.2) 2.7 Effect of fair value (949.0) (1) (525.2)! 2,769.9 (2) 1,293.8 365.7 (3) 181.7 (48.2) (28.0) (2,226.4) (4) (920.4) 0.2 hedge accounting (b) (0.5) Money held in trust (c) 6,314.9 (249.8) 1,015.5 (191.6) (0.9) (5) Domestic stocks 1,471.4 (386.1) Others 4,843.4 136.3 961.0 (5) (143.8) 54.4 On the asset side, unrealized gains due to the positive impact of yen depreciation exceed unrealized losses due to the negative impact of rising long term overseas interest rates. (currency hedges with (4) (6)) Improved unrealized losses on foreign investment bonds due to tightening credit spread and increased unrealized gains from private equity funds Decrease in stocks as a result of operations for risk controls (47.8) (3.7) Derivatives for (4)(6) which deferred hedge 17,767.2 (310.7) (1,483.9) (6) (580.6) As for currency hedging positions accounting is applied (d) (corresponding to (2)), unrealized losses due to yen depreciation Total (a) + (b) + (c) + (d) (556.4) (770.4) End Mar. End Sep. 22 22 End Mar. 23 End Sep. 23 * Investment trusts are mainly invested in foreign bonds. Including unrealized gains on private equity funds (as of September 30, 2023, JPY 1,215.9bn; as of March 31, 2023, JPY 1,050.0bn). JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 31#33Income Analysis 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Net interest income for FY2024/3 H1 decreased by JPY 92.1bn year on year to JPY 337.5bn. Net interest income decreased mainly due to an increase in foreign currency funding costs associated with a rise in overseas interest rates. Income Analysis (Non-consolidated) (billion yen) Net interest income (Domestic) FY2023/3 H1 (A) FY2024/3 H1 (B) (billion yen) Increase (Decrease) (B)-(A) Main drivers of increase and decrease I Net interest income (Overseas) Interest rate spread Domestic (1) Net interest income (1) 257.1 117.5 (139.6)! Interest income 280.4 132.7 (147.7) 0.52% Impact of change in method of calculating the amount of elimination of internal funding transactions between domestic and overseas business division 0.37% * 0.34% Interest on Japanese government bonds 130.5 92.9 (37.5) (Ref.) The amount of elimination 0.29%* Interest expenses 23.3 15.1 (8.1) - FY2024/3 H1: JPY 0.01bn 1,147.5 Overseas [YOY JPY (114.5)bn] - FY2023/3 H1: JPY 114.5bn Net interest income 172.5 220.0 47.4 785.1 745.2 Interest income 445.1 544.9 99.7 (2) Interest on foreign securities 442.8 539.5 (2) 96.7 Increase in gains on assets such as foreign corporate bonds 508.9 429.7 Strategic investment areas 100.3 54.5 (3) (45.7)! (3) 337.5 172.5 Interest expenses (1) 272.5 324.9 (4) 52.3 Mainly due to postponed timing of private equity funds profit generation 220.0 (4) 402.2 Total 276.1 257.1 117.5 Net interest income 429.7 337.5 (92.1) FY21 FY22 FY22 H1 FY23 H1 Despite decrease in amount of elimination (See (1) above), increase in foreign currency funding costs Interest income 611.0 677.6 66.5 * Annualized basis Interest expenses 181.2 340.0 158.7 Notes: 1. "Domestic" represents yen-denominated transactions while "overseas" represents foreign currency-denominated transactions (except that yen-denominated transactions with non-residents of Japan are included in "overseas"). 2. Interest income from "domestic" and expenses from "overseas" include interest on transactions between "domestic" and "overseas", respectively. The interest are offset to calculate totals. And, the Bank revised calculation method of the interest from the fiscal year ended March 31, 2023. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 32#34(Ref.) Net Interest Income (Financial Accounting) vs. Net Interest Income, etc. (Management Accounting) (Simple Illustration) Net Interest Income, Net Other Operating Income (Loss), Non-recurring Gains (Losses) (Financial Accounting) Net Interest Income Domestic Overseas Net Other Operating Income (Loss) Interest income Interest expenses Interest income Interest expenses management Investment Main Breakdown Japanese government bonds, Japanese local government bonds, Japanese corporate bonds, Corporate loans, Amount of elimination (between domestic and overseas) Deposits Foreign bonds Foreign bond investment trusts (IG, HY, etc.) * Including Hedging costs, Redemption gains (losses), Gains (losses) on cancellation Private equity funds (Profit distribution) (1) Real estate funds (Debt) (Investment trusts) Foreign bond hedging costs, Amount of elimination (between domestic and overseas) Foreign bonds (Redemption, Sales) Foreign bond hedging costs 1. Summary Financial Results 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Σ Business Governance Asset Management Net Interest Income, etc. (Management Accounting) Yen interest rate PF (PF: Portfolio) Credit PF Foreign government bond PF Gains (losses) on foreign exchanges Stock PF Gains (losses) on bonds Japanese government bonds (Sales), Foreign bonds (Sales) Gains (losses) related to stocks Private equity funds (Redemption gains (losses)) (2) Bear funds Finance PF Alternative PF management Investment Main Breakdown Japanese government bonds (including Sales) Deposits Japanese local government bonds, Japanese corporate bonds Foreign bonds (Foreign corporate bonds) Foreign bond investment trusts (IG, HY, etc.) * Including Hedging costs, Redemption gains (losses), Gains (losses) on cancellation Real estate funds (Debt) Direct lending funds Foreign bond hedging costs Foreign bonds (Foreign government bonds (including Redemption and Sales)) Foreign bond hedging costs Domestic stocks, Bear funds Private equity funds (1) + (2) Real estate funds (Equity) Corporate loans Net Interest Income, etc. Non- recurring Gains (Losses) Gains (losses) on money held in trust Domestic stocks Japanese government bonds Real estate funds (Equity) Real estate funds (Debt) (Money held in trust) Direct lending funds EP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 33#35Asset Management (1) Investment Assets 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance At the end of September 2023, investment assets were JPY 226.8tn, up by JPY 0.4tn compared to the end of March 2023. The balance of JGBs increased in response to rising yen interest rates and the balance of risk assets was also accumulated. As a result, due from banks, etc., decreased significantly. Investment Assets (Non-consolidated) (billion yen) (trillion yen) ■Japanese government bonds ■Japanese local government bonds, corporate bonds, etc. ■Foreign securities, etc. Balance As of Sep. 30, 2023 VS % Money held in trust ■Loans Due from banks, etc. Mar. 31, 2023 Main drivers of increase and decrease Securities 137,740.6 60.7 4,971.2 (1) Short-term investments and others Japanese government bonds 38,904.5 17.1 i (1) 789.8 • Increase in balances of long-term bonds 229.6 226.3 226.8 222.8 Japanese local government bonds, 13.2 13.1 13.6 corporate bonds, etc." *1 17,001.0 7.4 13.6 Foreign securities, etc. 81,835.1 36.0 66.6 60.1 68.2 63.3 Foreign bonds 27,973.2 12.3 (2) 1,834.2 i 4.4 5.4 5.7 Investment trusts*2 53,740.2 23.6 (3) 1,630.0 i (3) 5.6 5.8 6.4 6.3 6.5 Money held in trust 6,314.9 2.7 (249.8) 703.5 3,477.8 (2) Increase in balances of assets such as IG bonds Increase in balances of private equity funds, foreign bond investment trusts, etc. Domestic stocks 1,471.4 0.6 74.1 (386.1) 78.3 78.3 81.8 Loans 5,750.9 2.5 146.5 16.1 Due from banks, etc.*3 63,381.6 27.9 (4) (4,901.9) (4) 16.8 16.2 17.0 *4 Short-term investments and others" 13,618.8 6.0 460.4 ● Impact of using Bank of Japan deposits as investment capital 49.2 41.9 38.1 38.9 Total 226,806.9 100.0 426.5 End End End End Mar. 22 Sep. Sep. Mar. 23 Sep. Sep. *1 "Japanese local government bonds, corporate bonds, etc." consists of Japanese local government bonds, short-term corporate bonds, Japanese corporate bonds and Japanese stocks. *2 Investment trusts are mainly invested in foreign bonds. Investment trusts include private equity funds, etc. *3 "Due from banks, etc." consists of negotiable certificates of deposit, Bank of Japan deposits and monetary claims bought. *4 "Short-term investments and others" consists of call loans and receivables under resale agreements, etc. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 34#36Asset Management (2) Exposure Profile of Investment Assets 1. Summary Financial Results 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Asset Management Σ Business Governance Exposures Classified by Ratings (Non-consolidated) Exposures Classified by Sector and Region (Non-consolidated) Financials rated "BBB" 1.1% Financials rated "A and above" 9.5% BBB 10.6% BB and below 3.7% Financials rated "BB and below" Less than 0.1% Others 26.0% Sovereign* Financials 10.7% 63.2% * "Sovereign" includes exposures to national and/or local governments and central banks, etc. Middle- Latin- Eastern America 0.2% Asia 0.2% 1.2% Oceania 1.2% A and above 85.6% Approx. 96% are rated IG. Europe 10.0% Sep. 30, 2023 JPY 203tn Notes: 1. The range of assets covered in this page includes bonds and/or loans to sovereign entities, financial institutions and industrial corporations, etc. 2. Exposures are calculated on the management accounting basis. 3. Rating categories are calculated based on the Bank's internal ratings and the external ratings. JP JAPAN POST BANK BANK North America Africa Less than 0.1% International Organization Less than 0.1% 20.2% Japan 66.5% Copyright© JAPAN POST BANK All Rights Reserved. 35#37Asset Management (3) Balances of Securities Based on the Remaining Time to Maturity, etc. Balances Based on the Remaining Time to Maturity (Ending Balance Basis, As of Sep. 30, 2023) Balance of Japanese Government Bonds: JPY 38,904.5bn (Held-to-maturity: JPY 16,231.5bn, Available-for-sale: JPY 22,673.0bn) (billion yen) 1. Summary Financial Results 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Σ Business Governance Asset Management Balances (Based on Average Balances, FY2024/3 H1) Balance of Japanese Government Bonds and Foreign Securities, etc. Over 10 years More than 7 years 1,556.3 to 10 years More than 5 years 1,498.4 to 7 years More than 3 years 867.8 to 5 years More than 1 year to 3 years 1 year or less 4,483.7 11,137.7 19,360.2 (billion yen) FY2024/3 H1 Average Balance (Ref.) Ending Balance Japanese government bonds 39,605.2 38,904.5 Foreign securities, etc. 82,000.7 81,835.1 Foreign bonds Investment trusts 29,037.2 27,973.2 52,858.3 53,740.2 Balance of Foreign Bonds: JPY 27,973.2bn Balance of Deposits (Held-to-maturity: JPY 5,412.3bn, Available-for-sale: JPY 22,560.9bn) (billion yen) 4,395.4 Over 10 years More than 7 years 3,118.6 to 10 years More than 5 years 3,216.2 to 7 years (trillion yen) FY2024/3 H1 Average Balance (Ref.) Ending Balance Liquid deposits 121.5 122.1 Transfer deposits 12.8 12.7 More than 3 years to 5 years More than 1 year to 3 years 7,596.5 Ordinary deposits, etc." 107.9 108.6 Savings deposits 0.7 0.7 6,031.3 Fixed-term deposits 73.5 71.8 1 year or less 3,615.0 Time deposits TEIGAKU deposits 3.2 3.1 70.3 68.7 Other deposits Total 0.2 0.1 195.3 194.1 JP JAPAN POST BANK BANK * Ordinary deposits, etc. = Ordinary deposits + Special deposits (equivalent to ordinary savings) Copyright© JAPAN POST BANK All Rights Reserved. 36#38Investment Policy (Risk Appetite) 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Strengthening risk tolerance of our portfolio and focusing on risk-return improvement, we conduct portfolio management flexibly while adopting to changes in market environment. Credit Appetite (Domestic) (Overseas) Interest IG XOVER HY CLO Stocks Foreign Exchange Private equity funds funds Real estate Strategic Investment Areas Equities Debts Direct lending funds Infrastructure debt funds 4 x+4 Medium-term investment policy Domestic interest related assets: Portfolio is flexibly restructured in light of BOJ's monetary policy Overseas interest related assets: Take on and/or curb risk according to market conditions (Ref.) Capital Efficiency FY2024/3 (Expected RA Distribution Yield") (No Risk Assets) Focus on investing in IG area while paying attention to improving credit quality Carefully consider investing in HY areas according to market conditions 1-2% Continue to invest, keeping market share in mind Take on and/or curb risk according to market conditions Take on and/or curb risk according to market conditions 6% 2% 5% 1% Continue to invest selectively in high-quality funds, focusing on debt assets Regarding private equity funds, keep the ratio of funds aiming to generate income gains in mind 1% 2% 1% Hedge funds Continue initiatives to cancel all contracts * Distribution yield on risk assets. Expected RA Distribution yield is presented on a management accounting basis and represents the expected dividends, inclusive of non-revenue dividends, received from new investments in the relevant category (expected earnings yield in strategic investment areas) divided by risk assets represented by such category. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 37#39Building a Strong Operational Structure (1) 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance The organization comprises eight departments and one office, specializing in different fields, under the supervision of the dedicated Executive Officer in charge of the Investment Division. A variety of specialized personnel are assigned as General Manager-level management. They are actively engaged in passing on their expertise, as well as training young employees. Investment Division (Eight departments and one office) (As of Oct. 2023) Executive Officer in charge of the Investment Division Managing Executive Officer Hideki Nakao Japan Post Bank CIO Office (Department) Quants Team (Office) Global Credit Investment Department Rates and FX Investment Department Equity Investment Department Private Equity Investment Department Real Estate Investment Department Note: Main former appointment listed below name. JP JAPAN POST BANK BANK Treasury Department Treasury Administration Department [General Manager] Katsuya Yamamoto Japan Post Bank Executive Managing Director Yuko Yoshida JPMorgan Securities [Head] Managing Director Tatsuo Ichikawa Morgan Stanley MUFG Securities [General Manager] Executive Managing Director Kazutoshi Rokushima Deutsche Securities Executive Managing Director Shunsuke Sone Mizuho Securities [General Manager] Managing Director Taro Matsuura MUFJ Bank [General Manager] Executive Managing Director David Sancho Shimizu Mizuho Securities [General Manager] Executive Managing Director Hideya Sadanaga Nippon Life [General Manager] Executive Managing Director Kazunari Yaguchi Development Bank of Japan Managing Director Hiroyuki Tanaka Phoenix Property Investors [General Manager] Managing Director Kazuhiro Adachi Mizuho Bank [General Manager] Managing Director Mari Ishikawa HSBC Securities Copyright© JAPAN POST BANK All Rights Reserved. 38#40Building a Strong Operational Structure (2) 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Σ Business Governance Asset Management We manage the investment implementation, etc., while ensuring adequate checks and balances by the Risk Management Division and the Compliance Division. Advisory Board for the Board Risk Committee of Directors Board of Directors (As of Oct. 2023) Deciding fundamental matters in relation to the Risk Appetite Framework ●Supervising the execution of operations by the executive side based on the Risk Appetite Framework Reports/Advice President and Representative Norito Ikeda Executive Officer Representative Executive Vice President (Assistant to the President) Susumu Tanaka Representative Executive Vice President (Assistant to the President) Takayuki Kasama Advisory Board for the President and Representative Executive Officer Executive Committee Internal Control Committee Advisory Board for the Executive Committee ALM Committee Chairperson Harumi Yano (Executive Vice President) Risk Management Committee Chairperson Masato Tamaki (Risk Management Division Senior Managing Executive Officer) Compliance Committee Chairperson Kenji Ogata (Compliance Division Executive Vice President) Investment Division Managing Executive Officer Hideki Nakao Formulating basic ALM plans Corporate Administration Division Executive Vice President Harumi Yano [Corporate Planning Dept.] [ALM Planning Dept.] [CIO Office] [Global Credit Investment Dept.] [Rates and FX Investment Dept.] [Equity Investment Dept.] [Private Equity Investment Dept.] [Real Estate Investment Dept.] [Treasury Dept.] [Treasury Administration Dept.] Capital Allocation Monitoring, etc. Monitoring and Training Market transactions JP JAPAN POST BANK BANK Verifying management sustainability Risk Management Division Senior Managing Executive Officer Masato Tamaki (Conducting stress tests to investment plans) [Risk Management Dept.] [Credit Dept.] Compliance Division Executive Vice President Kenji Ogata [Compliance Management Dept.] [Anti Money Laundering Dept.] Copyright© JAPAN POST BANK All Rights Reserved. 39#41Status of Credit Risk, etc. Existing Holdings approx. JPY 40tn (Bulk is in fixed bonds.) Yen interest rates risk Profit Profit 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance New Investments Impact of investment allocation Repeated from previous page ] The Bank's BS (non-consolidated) Total assets JPY 230tn (as of Sep. 30, 2023) Interest Rates Impact of raising interest rates on deposits If deposit interest rates rise, interest payments will increase (Impact depends on deposit types). However, interest rate spreads would still be secured due to the lag behind the rise in market interest rates. Of these, those impacted approx. JPY 67tn by non-revenue dividends: approx. JPY 22tn Interest Rates Considering shifts from due from banks, etc. in preparation for potential interest rate increases JGBs JPY 40tn Credit risk* * Mainly taking credit risks (Hedged interest rates: approx. 70-80% of foreign securities, Hedged foreign exchange: approx. 90%+% of foreign securities) Foreign currency interest rates risk (Difference in long- and short-term interest rates) Profit Spread Impact of non-revenue dividends Non-revenue dividends are generated in some foreign bond investment trusts. However, return gains are generated upon cancellation or redemption. Of these, those impacted approx. JPY 16tn by non-revenue dividends: approx. JPY 7tn Yield Yield Curve Short-term (Funding Side) میرا Long-term (Investment Side) Profit 2 Spread Non-revenue dividends are generated in the case that credit spreads widen following new investment. Yield Yield Curve Short-term (Funding Side) Long-term (Investment Side) Maturity A decline in short-term interest rates in the future is expected to reduce foreign currency funding costs, which will have a positive impact on earnings. JP JAPAN POST BANK BANK Maturity The impact on profits depends on the difference in long- and short-term interest rates. Due from banks, etc. JPY 63tn Deposits JPY 194tn Foreign securities JPY 85tn Others JPY 41tn Others / Net assets JPY 36tn Copyright© JAPAN POST BANK All Rights Reserved. 40 40#42Private Equity Investments (1) Situation to Date 1. Summary Financial Results 2. How to Increase Corporate Value Asset Management 3. Appendix Σ Business 4. Financial Data Governance The current book value balance stands at JPY 4.9tn. The portfolio as a whole has maintained unrealized gains of JPY 1.2tn due to strong corporate earnings and the impact of yen depreciation. Net Realized Gains*¹ were weaker due to sluggish exits as a result of market conditions including higher interest rates. *1 The sum of interest/dividends derived from securities (interest income) and capital gains/losses arising from the disposal of securities net of cost (gains (losses) related to stocks). Return Target/Actual Results Status of Balance and Net Realized Gains [Target] ● Net*2 IRR : 8.0% ● Net*2 TVPI: 1.30x (TVPI: Total Value to paid in) <Balance> The fair value reported tends to reflect the PE fund fair values from approx. three months ago*3. (For each PE fund, investee companies are evaluated using methods such as EV/EBITDA multiple method or discounted cash flow (DCF) method based on their individual circumstance, and valuation fluctuations tend to be milder, as compared to the stock price fluctuations for listed companies.) *3 In case of fund of funds such as secondary fund of funds, valuation used may be based on valuation reports from six months ago. (trillion yen) Value Appreciation has resulted in a sizable Unrealized Gain amount. <Net Realized Gains> The Net Realized Gains recognized in various financial results are the Net Realized Gains of PE funds up to approx. six months ago. Fair Value JPY 6.2tn (billion yen) 1.2 1.0 Reflects the current exit environment. However, unrealized gains remain at a favorable level. 260 [Actual Results] (as of Sep. 30, 2023) • Net*² IRR 11.5% ● Net*2 TVPI 1.32x *2 After deduction of expenses; Japanese yen basis The net IRR remains ahead of original plan. 1.2 Unrealized gain (before application of tax effect accounting) 125 4.9 4.5 Approx. JPY 70bn Book value balance 3.2 2.2 40 40 1.7 20 1.2 10 0.1 0.4 0 1 End End End End Mar. Mar. Mar. 17 18 19 End End Mar. Mar. Mar. Mar. End End Sep. FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1 20 21 22 23 23 Copyright© JAPAN POST BANK All Rights Reserved. 41 EP JAPAN POST BANK BANK#43Private Equity Investments (2) The Portfolio 1. Summary Financial Results 2. How to Increase Corporate Value Asset Management 3. Appendix Σ Business 4. Financial Data Governance At present, while the aim is to earn capital gains by predominantly focusing on buyouts, we are also allocating to income strategies*, we are aiming to earn stable interest or dividend income to supplement realizations from our buyout-centric portfolio in case the economy should experience weakness. * Investment strategies focused primarily on generating income, such as infrastructure investments and mezzanine investments. Strategy Diversification Geography/Sector Diversification (Capital Commitment Basis) (Fair Value Basis) FY2017/3 Strategy FY2024/3 Strategy As of Sep. 30, 2023 Secondary 30% Primary 70% Buyout Strategies primarily aiming to generate income <Note> Inner ring: primary vs. secondary split Outer ring: investment strategy JP JAPAN POST BANK BANK Secondary 10% Primary 90% <Total number of investee companies> approx. 47,800 (Average investment amount: approx. JPY 127mn per company) Buyout Japan 5% Information Technology 25% Asia (exclude Japan) 10% Europe 30% North America 55% Financials 10% Industrials 15% Strategies primarily aiming to generate capital gains Consumer Discretionary 10% <Note> Healthcare 10% Inner ring: geography diversification (location of the investee companies) Outer ring: sector diversification Copyright© JAPAN POST BANK All Rights Reserved. 42#44Private Equity Investments (3) Current Investment Market Both exit activity and fund offerings slowed in 2022 and thru 2023. 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Although there are signs of a slight recovery in exit activity at present, we will closely monitor trends in M&A activity, which has declined in light of higher interest rates and other factors. Status of PE Fund Exits / Fund Offering Amounts and Number of Offered Funds (Global) Investment in Companies from PE Funds (Buyout) / Global M&A Deal Valuations Source: Created based on data from PitchBook and Preqin*. Source: Created based on data from Preqin*. Total exit amount ($1bn) Number of exits 2,723 2,284 2,192 1,896 1,729 384 404 402 348 Total amount of deals ($1bn) Number of deals 10,763 9,237 7,846 7,131 7,212 7,018 1,582 1,291 693 425 247 573 497 488 519 941 687 349 5,650 2017 2018 2019 2020 2021 2022 2023 (until Sep.) (year) 2017 2018 2019 2020 2021 2022 2023 (year) (until Sep.) I Fund offering amount ($1bn) Number of offered funds 4,764 3,710 3,547 3,531 3,373 3,396 Valuation 10.4x 10.3x 10.2x 9.7x 10.5× 10.0x 1,364 785 889 1,005 804 867 874 624 2017 2018 2019 2020 2021 2022 2023 (until Sep.) (year) 8.9x 2017 2018 2019 2020 2021 2022 2023 (year) (until Jun.) * Due to changes in calculation methods, the historical figures do not equal to ones in the previous materials (page 49 of materials for the Investors Meeting FY2023/3). JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 43 33#45Real Estate Fund (1) Current Status 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Long term investments in the equity/debt financial products backed by the high-quality diversified commercial real estate assets. AUM of approximately JPY 4.0tn. Unrealized gain on the equity portfolio is JPY 0.2tn. With regard to net realized gains, allowances were recorded for some loans to office properties. Nonetheless, income revenue in terms of local currency has continued to grow. Return Target/Actual Status of Balance and Net Realized Gains* [Target] • Equity Net*2 IRR: 5-6% • Debt Excess spread to the corporate bond with equivalent credit risk [Actual (as of Sep. 30, 2023)] Equity Net*2 IRR: 9.7% Debt Excess spread of approx. +90bps <Balance> The reported fair value generally lags three months behind the fair value of real estate fund, NRL and CMBS. (Fair values of commercial real estate are based on appraisal values which are less volatile than stock prices of listed companies.) *1 <Net Realized Gains> The reported net realized gains generally lags three months behind the net realized gains of real estate fund, NRL and CMBS. (trillion yen) 0.7 Approx. JPY 4.0tn (billion yen) 0.2 Unrealized gain 0.2 1.1 1.0 Equity 2.8 0.4 2.5 0.3 1.9 0.3 1.1 0.1 0.7 0.0 0.4 0.1 0.2 End End End Mar. 17 End End End End End Mar. Mar. 18 19 21 Mar. Mar. Mar. 20 Mar. Sep. 22 23 23 *1 Management accounting basis. Net realized gains including the amount of scheduled tax claim *2 After fees, expenses, and hedging costs P JAPAN POST BANK BANK Debt 18 49 45 24 21 11 10 Approx. JPY 9bn 24 24 7 Equity 6 2 7 01 4 3 Debt FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1 Copyright© JAPAN POST BANK All Rights Reserved. 44#46Real Estate Fund (2) The Portfolio 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Pursue income gain backed by the stable rental revenue and capital gain by the long-term value growth of underlying properties. Highly and strategically diversify the portfolio with regard to the strategy, region, sector, timing, manager as well as property. Mainly invest in highly occupied properties located in the developed economies through private products. Product Allocation Strategy Diversification (Fair Value Basis, As of Sep. 30, 2023) Strategy Allocation Geography Diversification (Fair Value Basis, As of Sep. 30, 2023) Geography Allocation Relative 65% Public 3% Private 31% Equity 31% Debt 69% Listing 1% Core 69% Equity 31% Debt 69% Core 27% Other 1% Australia 3% Japan 10% 8% 16% Non-Core 4% Europe 27% 3% 30% 42% North America 59% JP JAPAN POST BANK BANK [Core] Strategy pursuing the stable rental income earned by the high occupancy properties. [Non-core] Strategy pursuing the excess return over core strategy by active property management such as lease up and refurbishments. <Note> Inner ring: Market size (as of Dec. 31, 2022, estimate by MSCI*) Outer ring: Portfolio (as of Sep. 30, 2023) Reproduced by permission of MSCI Inc. ©2023. All rights reserved Copyright© JAPAN POST BANK All Rights Reserved. 45#47Real Estate Fund (3) The Portfolio 1. Summary Financial Results 2. How to Increase Corporate Value Asset Management 3. Appendix Σ Business Overweight to the industrial, including logistics facilities for e-commerce businesses, and rental residential sectors and underweight to the office sector relative to the benchmark index. 4. Financial Data Governance While keep the constant pace of the investment, tactically accelerated the pace in FY2022/3 to capture the timing of price recovery after the Covid-19 dislocation. Sector Diversification (Fair Value Basis, As of Sep. 30, 2023) Vintage Diversification (Capital Commitment Basis) Other Hotel 3% 2% Office 24% 4% 2% 32% Industrial 26% 33% Retail 7% 13% 23% Residential 31% <Note> Inner ring: Market size (as of Dec. 31, 2022, estimate by MSCI*) Outer ring: Portfolio (as of Sep. 30, 2023) Reproduced by permission of MSCI Inc. ©2023. All rights reserved JP JAPAN POST BANK BANK FY2023/3 19.2% FY2024/3 8.9% FY2017/3 1.4% FY2018/3 4.7% FY2022/3 26.9% FY2019/3 16.6% FY2020/3 11.9% FY2021/3 10.5% Investment Diversification (As of Sep. 30, 2023) No. of Funds No. of Loans 206 288 No. of underlying property Approx. 14,000 Copyright© JAPAN POST BANK All Rights Reserved. 46 46#480 10 20 20 Real Estate Fund (4) Current Investment Market 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Σ Business Governance Asset Management Contrasting rental market with solid NOI*¹ growth in the industrial and residential by tight supply/demand balance while weak in the gateway cities' office by prolonged WFH and stagnant economy. Only high-quality office keeps attracting tenant and investor. Cap rate*2 expansion (price decline) under the rate hike process across the developed economies, though inflation-linked rent growth partially offsets the impact. *1 NOI (Net Operating Income) is all revenues including rent form the property minus all operating expenses. *2 Cap Rate is the ratio of the NOI to its current value. Rental Market Source: Created based on data from MSCI* * Reproduced by permission of MSCI Inc. ©2023. All rights reserved (pt) Net Operating Income (%) Vacancy Rate (US) (%) Cap Rate (US) 25 25 25 10 15 10 Residential 5 Industrial Office 1999 2002 2005 2008 2011 2014 2017 2020 2023 0 (year) 5 1999 Note: Calculated based on NOI of end of March, 1999 being 1 JP JAPAN POST BANK BANK 20 Office 15 6 2002 Residential Industrial 2005 2008 2011 2014 2017 2020 2023 (year) 0 2 Transaction Market Source: Created based on data from MSCI* * Reproduced by permission of MSCI Inc. ©2023. All rights reserved (%) Cap Rate & Interest Rate (US) 10 8 Europe 8 Cap Rate Japan 4 2006 2008 2010 10 6 US 4 2 Mw Long-term Rates 2012 2014 2016 2018 2020 2022 (year) 0 2006 2008 2010 2012 2014 2016 2018 2020 2022 Note: The shaded area in the graph shows the interest rate rise Copyright© JAPAN POST BANK All Rights Reserved. 47 (year)#49Pattern 3 Phase of widening credit spreads (Net asset value [fair value] decrease) (Ref.) What are Non-revenue Dividends from Foreign Bond Investment Trusts? 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Σ Business Governance Asset Management Dividends are classified into revenue dividends or non-revenue dividends and paid to the Bank by each fund (quarterly). The Bank recognizes only revenue dividends as income (non-revenue dividends are accounted for as the repayment of principal). 1. Revenue dividends: Dividends that are within unrealized gains (net asset value [fair value] - individual principal [book value]>0; the same applies hereafter) 2. Non-revenue dividends: Dividends that exceed unrealized gains and are equivalent to the repayment of principal General outline of non-revenue dividends (for Sep. dividends) +100 +100 +150 Pattern 1 Phase of tightening credit spreads (Net asset value [fair value] increase) Dividends For simplicity, each fund is viewed as a single bond. gains Unrealized Dividends Bond price value Net asset Bond price principal Individual Pattern 2 1,050 +100 +70 gains Unrealized Dividends Bond price value Net asset +100 (20) Unrealized losses Dividends Bond price value Net asset Bond price principal Individual 1,000 Book value 970 Fair value at dividend payment time (Specific date in early Sep.) Revenue dividends: 70 Non-revenue dividends: 30 (Repayment of principal: 30) 1,000 Book value The amount exceeding unrealized gains 880 Fair value at dividend payment time (Specific date in early Sep.) Non-revenue dividends: 100 (Repayment of principal: 100) Non-revenue dividends are accounted for as the repayment of principal, therefore the gains and losses improve by the amount equivalent to the non-revenue dividends when investment trusts mature or contracts expire after bonds held are redeemed, unless there are defaults on bonds held, etc. or others. Bond price principal Individual Fair value at dividend payment time (Specific date in early Sep.) 1,000 Book value Revenue dividends: 100 3-month cumulative total (May-July) Note: In some cases, there are no dividends. Dividends and fund's unrealized gains and losses (as of a specific date in early Sep.) are compared to classify whether revenue dividends or non-revenue dividends. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 48#50New Corporate Banking Business (1) Contribution to Regional Communities via Various Frameworks 1. Summary Financial Results 2. How to Increase Corporate Value Asset Management 3. Appendix 4. Financial Data Σ Business Governance For the development of regional economies, a variety of investment schemes to contribute to regional vitalization by supplying funds are in progress. Our goal is to be "a essential bank for sustainable development of regional communities" by supporting regional vitalization throughout Japan. In October 2022, we started "New Corporate Banking Business through Investment (we call 'Σ Business')." 2010 2016 Further challenges for contributing to regional vitalization by creating new investment schemes! Send staff to investment vehicles to develop human resources to enable GP operations 2021 Regional Financial Institutions Co-creation with 2022 JP INVESTMENT JPインベストメント 2023 Making further progress to establish a new stage of growth Development of "New Corporate Banking Business (Σ Business) through Investment" "Focus on GP Business" mainly in JP Investment Investment in Frontier Capital Inc. Preparing to Invest in a Fund Focused on Tourism Industry The following vehicles are under consideration Venture capital Investment firm that provide hands-on support "Japan Post Investment Regional Development and Impact Fund I, ILP" Investment in GP entities / LP Established the new fund through Japan Post Investment Corporation Co., Ltd. with the aim to invest into regional businesses to encourage regional development, and impact investments into businesses targeting SDGs impact outcomes, promoting the transition to a sustainable society New Corporate Banking Business Challenges (1) Deal Sourcing business (2) Marketing Support business for investee companies Establishment of business promotion infrastructure (1) Production of Σ Business text book and human resource development (2) Development of corporate customer information platform JP BANK JP BANK ゆうちょ銀行 Initiatives in the renewable energy business Invest in the fund of Z Energy Co., Ltd. and contribute to regional development by creating renewable energy projects and local employment Regional Vitalization Funds Contribute to supply of risk money by investing in 48 regional vitalization funds (as of Sep. 30, 2023) for supporting regional vitalization in cooperation with regional financial institutions Regional Finance Projects (Syndicated Loan / PFI / Project Finance / Loans for local governments, etc.) Investment in GP entities / LP LP Investments Actively participate in project finance and PFI, etc. which contribute to vitalization of regional economies, in partnership with local financial institutions to solve regional challenges ゆうちょ銀行 JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 49 49#51New Corporate Banking Business (2) Σ Business Advancement 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Σ Business Governance Asset Management Definition of Σ Business: "New Corporate Banking Business through Investment (GP Business in a JPB appropriate manner)" Focus on GP Business in a JPB appropriate manner, mainly in JP Investment Utilize our nationwide network in Japan Collaborate with regional financial institutions, etc. Deal Sourcing Supporting for Regional Vitalization Realize Our Purpose, "Contribution to the Development of Society and Region" Create New Corporate Banking Business in JPB appropriate manner We will work to “Unify our passion and action toward new business" with a focus on efforts to foster corporate cultures and develop human resources that promote new corporate banking business. Targeting full-scale business after FY2027/3, we will set an initial two-year preparation period (ending Sep. 30, 2024) and establish business promotion infrastructure. Corporate customers, etc. Building customer relationships through deal sourcing business Deal sourcing of investee Lead GP network company candidates Supporting Customers Sharing information "Lead GP operations" (mainly in JP Investment) Japan Post Business Information Sharing Investment Our own deal sourcing 233 Branches 58 Corporate Marketing Dept. 13 Regional Headquarters Headquarters Utilize our nationwide network in Japan Collabo- ration JP JAPAN POST BANK BANK Management Support (Solutions) Invest Management Support Exit Financial return + Social return Corporate customers, etc. Solving social issues and Vitalizing regions Introduction and mediation of products Investee companies Financial return + Social return Investee companies such as start-up companies, growth companies, business succession companies Co-operating GP network, etc. Regional financial institutions / Consulting firms, etc. Sharing product information that contributes to solve Exploring products of investee companies for marketing support Introduction and Mediation (Supporting for regional vitalization) Find member stores Support expanding sales channels, etc. social issues Copyright© JAPAN POST BANK All Rights Reserved. 50#52Governance Systems, etc. to Support Our Businesses (1) IT Investments 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance Trends in IT Investment (Cash Flow Basis) (billion yen) Strategic IT investments to realize new growth IT investments to realize stable and sustainable business operations Plan 630 IT Investments To strengthen the management base, we advance investment in IT ●In May 2023, we renewed our systems on a massive scale for stable core system operation From FY2024/3 H2 onward, we will continue to invest in IT for "innovating our retail business" Actual 500 +130% 130 +260% 50 Generally progressing as planned Main projects FY2024/3 H1 500 approx. 315 invested [+75] 55 [+15] Renew core systems (May 2023) Renew branch teller terminals 2 (May 2023 Sep. 2024) Add new features to Yucho Bankbook App (ATM deposit/withdrawal, Ordinary in-payment, etc.) (May 2023) Add new features to the teller tablet system (Money transfers, etc.) (May 2023) 450 past 5 years (FY2017/3 - 2021/3) Mid-term Plan (FY2022/3 - 2026/3) 260 [+60] Actual (FY2022/3 - 2024/3 H1) Note: the actual results (on preliminary basis) for FY2024/3 H1 are given in square brackets. EP JAPAN POST BANK BANK Main projects FY2024/3 H2~ Add services in Yucho Reco (Personal Financial Management App) (within FY2024/3) Introduce Yucho Tetsuzuki App (Feb. 2024) Expand BPMS* functions and bases of operation (Jan. 2024) Develop corporate customer information platform (Jan. 2025) Develop a new AML system (Jan. 2024) * Abbreviation of Business Process Management System. This system automatically activates RPAs, and systematically controls work flows that require human confirmation work, etc., and conducts automatic process management. Copyright© JAPAN POST BANK All Rights Reserved. 51#53Governance Systems, etc. to Support Our Businesses (2) ESG management - ESG-themed Investments, etc. Balance of ESG-themed Investments* As of September 30, 2023, the balance of ESG-themed Investments* stands at JPY 3.7tn, making steady progress toward the target KPI, JPY 4tn. We will also plan to set a higher target KPI in the future. JPY 3.2tn Target KPI JPY 4tn JPY 3.7tn 1. Summary Financial Results 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Asset Management Σ Business Governance Roadmap to Decarbonization We built the roadmap to achieve net zero GHG emissions targets by 2050. Net zero GHG emissions (1) Emissions from Own Operations (Scope1, 2) (2) Emissions from the finance portfolio (Scope3 Category 15) Interim Target for ~ FY2023/3 FY2024/3 FY2026/3 FY2031/3 FY2020/3 results approx. 48k t-CO2 Up Switching our car fleet to EV vs. FY2020/3 Complete shift to renewable electricity in all our sites FY2022/3 results approx. 27mn t-CO2 Shifting to renewable electricity, and more Set interim targets for FY2031/3 to help achieve economy-wide reductions in GHG emissions (46%) → (60%) 2050 JPY 2.1tn Power Generation Sector (Emission Intensity) FY2022/3 results 346gCO2e/kWh Support the sector to shift through engagement New 165~213g CO2e/kWh Interim Target for Calculate results/set interim Other Sectors targets Support the sector to shift through engagement Net Zero TBD Decarbonization through Contribute to solve social issues through ESG investment and Financial Services financing Target KPI for the Balance of as of Mar. 31 2023 Investment and Result Target ESG-themed investments JPY 3.2tn Financing as of Mar. 31 2026 JPY 4tn Zero-credit Balance for End Mar. 22 End Mar. 23 End Sep. 23 End Mar. 26 * ESG bonds (Green bonds, Social bonds, Sustainability bonds, etc.), Loans to the renewable energy sector, and Regional vitalization funds, etc. JP JAPAN POST BANK BANK Coal-fired Power Generation (Project Finance) Net Zero Note Results and targets are subject to change in the future due to the upgrade and expansion of data on emissions from companies and data vendors as well as increasingly sophisticated estimation. Copyright© JAPAN POST BANK All Rights Reserved. 52 62#54Governance Systems, etc. to Support Our Businesses (2) ESG management - Human Capital 1. Summary Financial Results 2. How to Increase Corporate Value Asset Management 3. Appendix 4. Financial Data Σ Business Governance To promote human capital management, we focus on securing and nurturing human resources who will take on challenges. At the same time, we will enhance our measures for supporting self-motivated career development, making our employees' own growth and challenges the source of our competitiveness. Mid-term Plan Development of Autonomous Employees Active Recruitment of Specialized Personnel in Enhancement Areas New Graduates Mid-Career Recruitment Internal Recruitment Recruiting Human Resource Development Enhancement of corporate value (sustainable growth) DX personnel Development of Trainings, On-the-job training, etc. Acquiring knowledge through seminars, etc., Promoting young employees, Dispatching employees to domestic and overseas companies Secondments (Japan Post Investment Corporation, fund companies, etc.) Retail Business Market Business New Corporate Banking Business Recruiting by Course (Digital/ Market Operations) Set salaries based on industry compensation standards Recruiting specialized personnel (Digital/Cyber Security) Career Challenge system, Internship system within group companies professional personnel (Market Operations/ Risk Management) Recruiting specialized personnel (Recruiting in Japan Post Investment Corporation) Number of professional personnel in the investment division 93 (as of 23/10) Number of employees recruiting by course 35 (Cumulative total up 23/4) Number of employees dispatched to other companies (Σ Business, etc.) 61 (Cumulative total up 23/4) EP JAPAN POST BANK BANK Number of applicants for the Career Challenge system 204 (FY2024/3) Career Development Support - Trial implementation of strategic side jobs - Career design training / Job level-based training - Career design guidebook - 1-on-1 meeting - Study in domestic and foreign educational institutions, Dispatch to NPO J-Win - E-learning (allow employees to participate in other companies' courses in addition to own ones) - Capacity building program specialized for employees in childcare leave (provided by other companies) Copyright© JAPAN POST BANK All Rights Reserved. 53#55Governance Systems, etc. to Support Our Businesses (2) ESG management - Structure of the Board of Directors Skill Matrix of the Board of Directors 1. Summary Financial Results *1,2 Experience/Expertise 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Asset Management Σ Business Governance Name Indepen- Committee dent Outside -related duties Management Corporate Management Financial Legal/ Compliance Accounting Finance Market Operation/ Risk Management Sales/ Digital Marketing Human Resources Develop- ESG Administ- ration ment Norito 1 Nomination Ikeda Susumu 2 Tanaka Takayuki 3 Kasama Hiroya 4 Masuda Nomination Compensation Katsuyo 5 Yamazaki Audit Risk Keisuke Nomination 6 Takeuchi Compensation Makoto 7 Nomination Kaiwa Risa 8 Compensation Aihara Hiroshi 6 Audit Kawamura Kenzo Audit 10 Yamamoto Risk 11 Keiji Nakazawa Audit Compensation Atsuko 12 Risk Sato Reiko 13 Nomination Amano Independent outside directors 64% (9/14) Female directors 36% (5/14) 14 Akane Kato Audit *1 Nomination: Nomination Committee member Compensation: Compensation Committee member Audit: Audit Committee member Risk: Risk Committee member *2 Those underlined and in bold are the chairmen of their committees. JP JAPAN POST BANK BANK (as of June 20, 2023) Copyright© JAPAN POST BANK All Rights Reserved. 54#56(Ref.) ESG Indices, Initiatives and External Assessments 1. Summary Financial Results FTSE4Good FTSE Blossom Japan Index ESG Indices FTSE Blossom Japan Sector Relative Index Bloomberg Gender-Equality Index 2023 Member EURONEXT POWERED BY V.E INDICES WORLD 120 MSCI JAPAN EMPOWERING WOMEN INDEX (WIN) S&P/JPX Carbon Efficient Index 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Asset Management Σ Business Governance External Assessments 15376374 SPORTS YELL 子育てサポートしています COMPANY 2023 女性が活躍 112 2023 健康経営優良法人 Health and productivity ホワイト 500 仕事と介護の両立支援 Smart Work FORCE NIKKEI FOR GOOD **** 2023 work with Pride WP Gold 2023 TCFD Initiatives TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES ✓ PCAF Partnership for Carbon Accounting Financials CDP GRESB REAL ESTATE member (Ref.) Japan Post Investment Corporation (consolidated subsidiary) signed Signatory of TN Forum FD Member INVESTOR SIGNATORY EP JAPAN POST BANK BANK BELS Building Housing Energy-efficiency Labeling System 27 ΝΙΚΚΕΙ SDGs 經營調查 2022 .::PRI Principles for Responsible Investment インパクト志向金融宣言 Japan Impact-driven Financing Initiative Note: More information for the indices and assessments, etc. can be found on our website. https://www.jp-bank.japanpost.jp/en/sustainability/evaluation/ Copyright© JAPAN POST BANK All Rights Reserved. 55#57Current Status Regarding Privatization (1) Relationship with Group Companies, etc. 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Σ Business Governance Asset Management Currently, the regulations of the Postal Service Privatization Act (additional regulations) apply in addition to the regulations of the Banking Act. Once Japan Post Holdings has disposed of all of its shares in the Bank, the additional regulations will be rescinded and only the regulations of the Banking Act will apply. Relationship with Group Companies (As of Sep. 30, 2023) Japanese Government Shareholding ratio Approx. 34.81%* (Must own more than 1/3 stake) Japan Post Holdings Limitations on New Business, etc. E.g. Personal loans, trust and inheritance services and bilateral loans for corporations New business Japan Post Holdings' shareholding ratio (Voting rights basis) 50% or less None Notification Over 50% 0% Banking Act"1 Postal Service Privatization Act Banking Act"1 +*1,2 None Permission None None Notification Notification Notification Obligated to hold 100% stake Shareholding ratio | Shareholding ratio i Approx. 61.50%* Owning affiliates Postal Service Approx. 49.84%* Privatization Act*1 Notification Notification None Japan Post Post office Japan Post Bank + [Related Bank] Japan Post Insurance Postal service business Payment of commissions [Related Insurance Company] Other Owning subsidiaries Banks Banking Act"1 Postal Service Privatization Act*1 Banking Act"1 Postal Service Privatization Act*1 Mergers and acquisitions (M&A) Financial -Institutions*5 Permission Prohibited Permission*3 Permission *4 Permission Prohibited Permission*3 Permission Permission *4 None Permission*3 None E.g. : Banks Banking counter operations Insurance counter operations of deposit Postal counter operations Obligation to provide universal services * Excluding treasury stock. Figures are rounded to two decimal places. Other E.g.: Securities firms Restrictions on the maximum amount *1 Permission is to be sought from, and notifications are to be made to: the Commissioner of the Financial Services Agency (Japan) in the case of the Banking Act; the Commissioner of the Financial Services Agency (Japan) and also the Minister for Internal Affairs and Communications in the case of the Postal Service Privatization Act. *2 Businesses that require permissions and notifications are limited to those businesses stipulated in Article 110 of the Postal Service Privatization Act. *3 May provide notification for making into subsidiaries companies that exclusively perform dependent services or specific financial operations. *4 May provide notification for making into subsidiaries companies that exclusively perform dependent services, engaged in financial research and studies, and companies that provide consultation in relation to the accumulation of personal wealth. *5 Banks, long-term credit banks, shinkin banks, credit cooperatives, labor banks, shinkin bank associations, credit cooperative associations, labor bank associations, and Shoko Chukin Bank. *6 Permitted in the case of acquisitions of operations other than deposit operations. Banking Act"1 Postal Service Privatization Act*1 Banking Act 1 Postal Service Privatization Act*1 Banking Act 1 Postal Service Privatization Act*1 Permission Prohibited*6 Permission Permission Permission None Regulated Prohibited*6 Permission Permission Permission None Permission None None Regulated None None JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 56#58Current Status Regarding Privatization (2) Overview of Regulations Surrounding the Bank 1. Summary Financial Results 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Asset Management Σ Business Governance Universal Service Obligation Related to Banking Service (Imposed on Japan Post Holdings and Japan Post) Share Disposal (Japan Post Holdings → the Bank) Regulations on the Bank Regulations under the Banking Act Additional Regulations*1 Restrictions on the Maximum Amount of Deposit Restrictions on Scope of Business Summary of Regulations Obligation to provide basic banking services (acceptances and withdrawals of ordinary, TEIGAKU and time deposits, and remittance, etc.) through the post office network Japan Post has Bank Counter Services Agreement with the Bank Japan Post Holdings must aim to dispose of all of their shares within the earliest possible timeframe while considering the management situation of the Bank, and the impact on the fulfillment of obligations to provide universal services Same regulation is imposed as a "Bank" under the Banking Act Maximum amount of deposits (ordinary deposits: JPY 13mn/fixed-term deposits: JPY 13mn) are stipulated by the enforcement order of the Privatization Act Current After Japan Post Holdings disposes of 50% or more (Voting rights basis) After Japan Post Holdings disposes of all shares Permission from the Commissioner of the Financial Services Agency (of Japan)*2 and the Minister for Internal Affairs and Communications required ( + Consultation with the Postal Privatization Committee + Supervision) Notification to the Commissioner of the Financial Services Agency (of Japan)*2 and the Minister for Internal Affairs and Communications ( + Obligation to care for fair competition + Notice to Postal Privatization Committee + Supervision) Same regulation is imposed as a "Bank" under the Banking Act *1 The regulations of the Postal Service Privatization Act apply in addition to the regulations of the Banking Act. *2 The authority of the Prime Minister of Japan has been delegated to the Commissioner of the Financial Services Agency (of Japan), with some exceptions (such as the decision not to apply part of the Postal Service Privatization Act when 50% or more of shares have been disposed of). EP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 57#59Current Status Regarding Privatization (3) Agency Commissions Paid to Japan Post, etc. 1. Summary Financial Results (2) Agency commissions Contribution System Japan Post (1) Subsidies 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Asset Management Σ Business Governance Structure of Expenses Associated with Outsourcing to Japan Post (1) Subsidies (2) Agency commissions Subsidies are calculated each fiscal year by the Organization for Postal Savings, Postal Life Insurance and Post Office Network and approved by the Minister of Internal Affairs and Communications (Japan) Organization for Postal Savings, Postal Life Insurance and Post Office Network Contributions Related Insurance Company (Japan Post Insurance) Contributions* Related Bank (Japan Post Bank) (2) Agency commissions * Contributions are the subsidies plus the administrative expenses (those incurred by related bank) of the Organization for Postal Savings, Postal Life Insurance and Post Office Network. Basic agency commissions + Sales & service incentives Commission for operating deposits, investment trusts, and for remittance and settlement services, etc. Basic agency commissions are calculated by multiplying the percentage increase or decrease from the previous fiscal year's amount corresponding to the cost of agency services (based on the costs of our directly-operated branches) by the previous fiscal year's basic agency commissions The basic agency commissions will reflect any change in operating efficiency of our directly-operated branches. Paid in line with achievement in sales targets and improvements in service quality JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 58#60Current Status Regarding Privatization (4) Shareholder Composition Japan Post Holdings Co., Ltd. 62% Others 38% 2,225mn shares 1,393mn shares [Total No. of shares excluding treasury stock*: 3,617,532,417] (Ref.) Total No. of outstanding shares No. of treasury stock* 3,617,602,420 70,003 * Treasury stock excludes the Bank's shares held by stock benefit trust. Note: All figures are rounded. JP JAPAN POST BANK BANK As of Sep. 30, 2023 Other domestic companies 5% 75mn shares 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Financial Results Asset Management Σ Business Governance (Ref.) As of Sep. 30, 2022 Financial instruments business operators Other domestic 2% 24mn shares companies 3% 14mn shares Financial instruments business operators 1% 2mn shares Financial institutions 11% 147mn shares Individuals and others 40% 555mn shares Foreign institutions, etc. 42% 591mn shares Financial institutions 17% 71mn shares Foreign institutions, etc. 28% 117mn shares Individuals and others 51% 208mn shares Copyright© JAPAN POST BANK All Rights Reserved. 59#61Current Status Regarding Privatization (5) Market Restructuring (Tokyo Stock Exchange) 1. Summary Financial Results 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Asset Management Σ Business Governance * Japan Post HLDGS. Situation to Date Japan Post Holdings conducted the offer and sale of shares of stock of the Bank (the Global Offering). The shareholding ratio declined from 89.00 % to 61.50% (as of Sep. 30, 2023)* As a Japan Post Group policy, Japan Post Holdings aims to dispose of their equity interests in the Bank to lower the shareholding ratio to 50% or less as early as possible during the Mid-term Plan The Bank After the Global Offering, tradable share ratio improved significantly to 34.5% (as of Mar. 31, 2023). But slightly, we have yet to achieve requirements level (at least 35%) for continued listing the Prime Market, so the Bank will continue to apply transitional measures Progress based on the Plans was disclosed on Jun. 23, 2023 https://www.jp-bank.japanpost.jp/en/ir/press/2023/pdf/pr230623.pdf Based on the Plans, we will continue to make efforts to create an environment in which it is easy for Japan Post Holdings to reduce its shareholding ratio (increase profits and enhance corporate value) Shareholding ratio is the ratio of the number of shares held by Japan Post Holdings against the aggregate number of issued shares (excluding treasury stock). Figures are rounded to two decimal places. JP JAPAN POST BANK BANK TSE Upcoming Schedule Apr. 4, 2022 The New Market Segments Jan. 2023 Clarification of The Bank the End Date of Transitional Measures Now Mar. 2025 End of Transitional Measures/Beginning of Improvement Period Mar. 2026 End of Improvement Period Apr. 4, 2022 Transition Date to the Prime Market Mar. 2023 Conducting the Global Offering After the Global Offering, tradable share ratio improved to 34.5%. So the Bank will continue to apply transitional measures. Jun. 23, 2023 Disclosure of Progress Based on the Plans Mar. 2026 End of Current Mid-term Plan Period Steadily drive forward full privatization process Copyright© JAPAN POST BANK All Rights Reserved. 60 60#6201 Executive Summary 04 P.3 02 How to Increase the Corporate Value P.7 03 Appendix FY2024/3 H1 Financial Data (Non-consolidated Basis) JP JAPAN POST BANK BANK P.22 P.62 Copyright© JAPAN POST BANK All Rights Reserved. 61#631. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Income Analysis For the six months ended (Millions of yen) For the six months ended September 30, September 30, (B) - (A) 2022 (A) 2023 (B) September 30, September 30, 2022 (A) (B) - (A) 2023 (B) Gross operating profit 574,789 376,107 (198,682) Extraordinary income (loss) (185) (508) (322) Net interest income 429,777 Net fees and commissions 74,286 Net other operating income (loss) 70,725 Gains (losses) on foreign exchanges 51,186 (24,545) 337,580 76,882 (38,354) (109,080) (75,731) (92,197) 2,595 Gains (losses) on sales and disposals of fixed assets (185) (504) (319) Losses on impairment of fixed assets (0) (3) (2) Income before income taxes 214,190 254,010 39,820 Income taxes - current (79,025) (75,522) 3,502 Gains (losses) on bonds 19,377 (13,925) (33,303) Income taxes - deferred 20,300 3,422 (16,878) General and administrative expenses (465,015) (466,305) (1,289) Total income taxes (58,724) (72,100) (13,376) Personnel expenses Non-personnel expenses Taxes and dues (18,114) (57,089) (389,811) (392,731) (17,499) (56,074) 1,014 Net income 155,466 181,910 26,444 (2,919) 614 Gains (losses) on money held in trust 53,170 488,932 435,761 Operating profit (before provision for 109,774 general reserve for possible loan losses) Core net operating profit 90,396 Excluding gains (losses) on 49,803 (76,272) (79,289) (90,198) (199,972) (166,668) (129,093) Dividends and interest income Gains (losses) on sales of stocks Impairment losses 70,047 65,622 (4,425) 18 460,491 460,472 (3,281) (581) 2,699 cancellation of investment trusts Provision for general reserve for Withholding income tax, etc. (13,614) (36,599) (22,985) 4 (4) possible loan losses Net operating profit 109,778 Non-recurring gains (losses) 104,598 Gains (losses) related to stocks 51,629 Gains (losses) on money held in trust 53,170 Net ordinary income 214,376 (90,198) 344,717 (133,848) 488,932 254,519 (199,976) 240,119 (185,478) 435,761 40,142 Credit-related expenses Provision for general reserve for 3 (2) (5) 3 (2) (5) possible loan losses EP JAPAN POST BANK BANK Notes: 1. General and administrative expenses exclude non-recurring losses related to retirement benefit costs (JPY 692 million and JPY 814 million recorded as profits for the six months ended September 30, 2023 and 2022, respectively). 2. Core net operating profit = Operating profit (before provision for general reserve for possible loan losses) Gains (losses) on bonds 3. Credit-related expenses are those expenses related to problem assets disclosed under the Financial Reconstruction Act. 4. Numbers in parenthesis indicate the amount of loss, expense or decrease. Copyright© JAPAN POST BANK All Rights Reserved. 62 62#64Summarized Balance Sheets 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data As of March 31, 2023 (A) As of September 30, Increase (Decrease) 2023 (B) (B) - (A) As of March 31, 2023 (A) As of September 30, 2023 (B) (Millions of yen) Increase (Decrease) (B) - (A) Total assets Cash and due from banks Call loans 229,545,202 230,356,168 810,965 Total liabilities and net assets 229,545,202 230,356,168 810,965 68,217,495 63,281,408 (4,936,087) Total liabilities 219,936,223 221,336,186 1,399,963 2,460,000 2,340,000 (120,000) Deposits 194,951,503 194,143,823 (807,679) Receivables under resale Payables under repurchase 9,788,452 9,547,389 agreements (241,062) 18,316,621 19,687,186 1,370,564 agreements Receivables under securities Payables under securities 250,241 borrowing transactions (250,241) lending transactions 1,941,872 2,310,811 368,939 Monetary claims bought 478,286 457,452 (20,833) Borrowed money 1,632,600 1,759,900 127,300 Trading account securities 19 31 12 Foreign exchanges 1,411 1,052 (359) Money held in trust 6,564,738 6,314,922 (249,815) Other liabilities 2,891,096 3,232,190 341,094 Securities 132,769,420 137,740,687 4,971,267 Reserve for bonuses 7,150 6,950 (200) Loans 5,604,366 5,750,933 146,566 Reserve for employees' retirement benefits 138,375 140,951 2,575 Foreign exchanges 124,943 194,262 69,319 Reserve for employee stock Other assets 2,994,691 4,194,379 1,199,687 ownership plan trust 511 269 (241) Tangible fixed assets 190,216 190,015 (201) Reserve for management board benefit trust 424 448 24 Intangible fixed assets 77,118 82,625 5,506 Deferred tax assets 26,245 263,069 236,824 Reserve for reimbursement of deposits 54,655 52,601 Reserve for possible loan (1,033) (1,010) Total net assets 9,608,979 9,019,981 22 (2,053) (588,998) losses Capital stock 3,500,000 3,500,000 Capital surplus Retained earnings Treasury stock 3,500,000 3,500,000 2,480,262 2,398,684 (24,510) (1,523) (81,578) 22,986 Total shareholders' equity Net unrealized gains (losses) on available-for-sale securities Net deferred gains (losses) on hedges 9,455,752 9,397,161 (58,591) 779,268 652,173 (127,095) (626,041) (1,029,352) (403,311) Total valuation and translation adjustments 153,227 (377,179) (530,406) JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 63#65Average Balance, Interest, and Earnings Yield of Interest-Earning Assets and Interest-Bearing Liabilities 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data (1) Domestic For the six months ended September 30, 2022 (A) September 30, 2023 (B) Average Interest Interest-earning assets Loans balance Earnings yield Average balance Earnings Interest yield (Millions of yen, %) Increase (Decrease) (B) - (A) Earnings yield 212,137,338 280,498 0.26 211,088,794 132,719 0.12 (0.13)%pt 4,973,257 4,890 0.19 5,609,423 4,678 0.16 (0.02)%pt Securities 67,285,237 148,476 0.44 59,291,337 112,242 0.37 (0.06)%pt Due from banks, etc. 63,054,105 14,066 0.04 64,937,779 16,170 0.04 0.00 %pt Interest-bearing liabilities 206,171,509 23,306 0.02 205,074,771 15,157 0.01 (0.00)%pt Deposits 194,436,929 6,768 0.00 195,317,191 5,565 0.00 (0.00)%pt Payables under securities lending 7,747 3 0.09 32,681 16 0.09 (0.00)%pt transactions (2) Overseas Interest-earning assets Loans Securities For the six months ended September 30, 2022 (A) September 30, 2023 (B) Average balance Interest Earnings yield Average balance Earnings Interest yield (Millions of yen, %) Increase (Decrease) (B) - (A) Earnings yield 75,589,035 445,151 1.17 79,829,622 544,939 1.36 0.18 %pt 28,014 74 0.53 29,959 83 0.55 0.02 %pt 75,350,555 442,801 1.17 79,602,064 539,519 1.35 0.17 %pt Due from banks, etc. Interest-bearing liabilities 72,380,378 272,564 0.75 75,949,224 324,922 0.85 0.10 %pt Payables under securities lending 1,612,498 13,281 1.64 2,040,535 56,112 5.48 3.84 %pt transactions JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 64#66Average Balance, Interest, and Earnings Yield of Interest-Earning Assets and Interest-Bearing Liabilities 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data (3) Total For the six months ended September 30, 2022 (A) September 30, 2023 (B) Average Interest balance Earnings yield Average balance Earnings Interest yield (Millions of yen, %) Increase (Decrease) (B) - (A) Earnings yield Interest-earning assets Loans Securities 221,864,850 611,050 0.54 220,624,767 677,644 0.61 0.06 %pt 5,001,272 4,965 0.19 5,639,382 4,761 0.16 (0.02)%pt 142,635,792 591,277 0.82 138,893,402 651,761 0.93 0.10 %pt Due from banks, etc. 63,054,105 14,066 0.04 64,937,779 16,170 0.04 0.00%pt Interest-bearing liabilities 212,690,364 181,272 0.16 210,730,345 340,064 0.32 0.15 %pt Deposits 194,436,929 Payables under securities lending transactions 1,620,246 6,768 13,285 0.00 195,317,191 5,565 0.00 (0.00)%pt 1.63 2,073,217 56,128 5.39 3.76 %pt Notes: 1. "Domestic" represents yen-denominated transactions while "overseas" represents foreign currency-denominated transactions (except that yen-denominated transactions with non-residents of Japan are included in "overseas"). 2. Income and expenses for money held in trust are included in "other ordinary income" and "other ordinary expenses", respectively. Accordingly, the average balance of money held in trust (six months ended September 30, 2023, JPY 5,211,247 million; six months ended September 30, 2022, JPY 4,928,131 million) is excluded from interest-earning assets, and the average balance corresponding to money held in trust (six months ended September 30, 2023, JPY 5,211,247 million; six months ended September 30, 2022, JPY 4,928,131 million) and the corresponding interest (six months ended September 30, 2023, JPY 8,409 million; six months ended September 30, 2022, JPY 8,574 million) are excluded from interest-bearing liabilities. 3. For investment trusts, the distribution of profits, which was deducted from the book value as the repayment of principal, was JPY 48,980 million for the six months ended September 30, 2023 (JPY 72,967 million for the six months ended September 30, 2022). 4. Average balance and interest on transactions between "domestic" and "overseas" are offset to calculate totals. And, the Bank revised calculation method of the interest from the fiscal year ended March 31, 2023. 5. "Due from banks, etc." consists of negotiable certificates of deposit, Bank of Japan deposits, call loans and monetary claims bought. 6. Earnings yield is annualized. Interest Rate Spread Yield on interest-earning assets (a) Total cost of funding (including general and administrative expenses) (b) Interest rate on interest-bearing liabilities (c) Overall interest rate spread (a) - (b) Interest rate spread (a) - (c) JP JAPAN POST BANK BANK (%) For the six months ended September 30, 2022 (A) September 30, 2023 (B) Increase (Decrease) (B) - (A) 0.54 0.61 0.06 %pt 0.60 0.76 0.15 %pt 0.16 0.32 0.15 %pt (0.05) (0.15) 0.37 0.29 (0.09)%pt (0.08)%pt Note: All numbers are annualized. Copyright© JAPAN POST BANK All Rights Reserved. 65 55#67Unrealized Gains (Losses) on Financial Instruments (1) Held-to-maturity Securities 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data (Millions of yen) As of March 31, 2023 (A) Japanese government bonds Amount on the balance sheet Net unrealized gains (losses) As of September 30, 2023 (B) Amount on the Increase (Decrease) (B) - (A) balance sheet Net unrealized gains (losses) Amount on the Net unrealized balance sheet gains (losses) 15,042,583 (236,650) 16,231,556 (834,287) 1,188,972 (597,636) Japanese local government bonds 3,581,661 (26,442) 4,047,196 (54,878) 465,535 (28,435) Japanese corporate bonds 4,655,700 (33,719) 5,217,708 (80,159) 562,007 (46,439) Others 3,773,727 (8,507) 5,412,359 189,097 1,638,632 197,604 Foreign bonds 3,773,727 (8,507) 5,412,359 189,097 1,638,632 197,604 Total 27,053,673 (305,320) 30,908,820 (780,227) 3,855,147 (474,907) Note: Net unrealized gains (losses) shown above are calculated by deducting the amount on the balance sheet from the fair value. (2) Available-for-sale Securities (Millions of yen) As of March 31, 2023 (A) Amount on the Net unrealized As of September 30, 2023 (B) Amount on the Increase (Decrease) (B) - (A) Net unrealized Amount on the Net unrealized balance sheet gains (losses) balance sheet gains (losses) balance sheet gains (losses) Japanese stocks 18,827 18,827 Bonds 31,110,108 (443,394) 30,387,042 (994,179) (723,066) (550,784) Japanese government bonds 23,072,127 (423,816) 22,673,014 (949,062) (399,113) (525,246) Japanese local government 2,059,206 2,210 1,695,021 (2,486) (364,185) bonds (4,697) Short-term corporate bonds 1,400,895 1,917,433 516,537 Japanese corporate bonds 4,577,878 (21,788) 4,101,573 (42,630) (476,304) (20,841) Others 75,072,343 1,659,553 76,879,708 3,132,598 1,807,365 1,473,045 Foreign bonds 22,365,282 1,476,129 22,560,928 2,769,973 195,645 1,293,844 Investment trusts 52,110,200 Total 106,201,280 184,011 1,216,159 53,740,238 365,750 1,630,037 181,738 107,285,578 2,138,419 1,084,298 922,260 Notes: 1. Securities shown above include "securities", negotiable certificates of deposit, which is recorded under "cash and due from banks", and "monetary claims bought". 2. Net unrealized gains (losses) shown above are calculated by deducting the acquisition cost from the amount on the balance sheet. 3. Of net unrealized gains (losses) shown above, JPY 2,226,494 million and JPY 1,306,052 million profits were included in the statement of income for the six months ended September 30, 2023 and the fiscal year ended March 31, 2023, respectively, because of the application of fair value hedge accounting. 4. Investment trusts are mainly invested in foreign bonds. Net unrealized gains on investment trusts include those of private equity funds. 5. No impairment losses were recognized for the six months ended September 30, 2023 and the fiscal year ended March 31, 2023. EP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 99 66#68Unrealized Gains (Losses) on Financial Instruments (3) Money Held in Trust Classified as Available-for-sale Money held in trust classified as available-for-sale Domestic stocks 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data (Millions of yen) As of March 31, 2023 (A) Amount on the As of September 30, 2023 (B) Increase (Decrease) (B) - (A) balance sheet Net unrealized gains (losses) Amount on the balance sheet Net unrealized gains (losses) Amount on the Net unrealized balance sheet gains (losses) 6,564,738 1,207,209 6,314,922 1,015,514 (249,815) (191,694) 1,857,660 1,270,609 1,104,910 (58,856) 1,471,483 961,023 (386,177) (143,886) 1,202,971 Domestic bonds (100,111) (67,637) Notes: 1. Net unrealized gains (losses) shown above are calculated by deducting the acquisition cost from the amount on the balance sheet. 2. Impairment losses for the six months ended September 30, 2023 and the fiscal year ended March 31, 2023 amounted to JPY 581 million and JPY 3,195 million, respectively. (41,255) (4) Derivatives under Hedge Accounting (Deferred Hedge Accounting) As of March 31, 2023 (A) As of September 30, 2023 (B) (Millions of yen) Increase (Decrease) (B) - (A) Notional amount Net deferred gains (losses) Notional amount Net deferred gains (losses) Notional amount Net deferred gains (losses) Currency swaps Interest rate swaps Foreign exchange forward contracts Total 8,888,437 (47,645) 8,933,919 9,189,575 (855,658) 8,833,361 125,651 (1,609,565) 45,481 (356,214) 173,297 (753,906) 18,078,012 (903,304) 17,767,280 (1,483,913) (310,732) (580,609) Notes: 1. Net deferred gains (losses) are those before application of tax effect accounting. 2. Hedged instruments are mainly available-for-sale securities. Total (2)+(3) + (4) Total net unrealized gains (losses) As of March 31, 2023 (A) As of September 30, 2023 (B) 214,011 (556,472) (Millions of yen) Increase (Decrease) (B) - (A) (770,484) Note: Total net unrealized gains (losses) exclude gains (losses) which are included in the statements of income because of the application of fair value hedge accounting. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 67#69General and Administrative Expenses 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data For the six months ended September 30, 2022 (A) September 30, 2023 (B) (Millions of yen, %) Increase (Decrease) (B) - (A) Amount % Amount % Amount Personnel expenses Salaries and allowances 56,275 12.12 55,382 11.89 (892) 45,900 9.88 45,088 9.68 (811) Others 10,374 2.23 10,293 2.21 (80) Non-personnel expenses 389,811 83.97 392,731 84.34 2,919 Commissions on bank agency services, etc. paid to 174,297 37.54 163,388 35.09 (10,909) JAPAN POST Co., Ltd. Contributions paid to the Organization for Postal Savings, Postal Life Insurance and Post Office Network* 115,355 24.85 121,814 26.16 6,458 Deposit insurance expenses paid to Deposit Insurance 13,757 2.96 13,962 2.99 205 Corporation of Japan Rent for land, buildings and others 5,414 1.16 5,283 1.13 (130) Expenses on consigned businesses 33,077 7.12 34,554 7.42 1,476 Depreciation and amortization 17,879 3.85 20,693 4.44 2,814 Communication and transportation expenses 7,330 1.57 7,145 1.53 (185) Maintenance expenses 8,226 1.77 9,219 1.98 993 IT expenses 6,075 1.30 7,592 1.63 1,516 Others 8,397 1.80 9,076 1.94 678 Taxes and dues 18,114 3.90 17,499 3.75 (614) Total 464,201 100.00 465,613 100.00 1,411 * The Bank makes payments of contributions to the Organization for Postal Savings, Postal Life Insurance and Post Office Network in accordance with Article 18-3 of the Act on Organization for Postal Savings, Postal Life Insurance and Post Office Network. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 68#70Capital Core Capital: instruments and reserves (a) 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data Domestic Standard (Millions of yen) As of Non-consolidated As of Increase March 31, 2023 (A) September 30, 2023 (Decrease) As of March 31, 2023 Consolidated As of September 30, 2023 Increase (Decrease) (B) (B) - (A) (C) (D) (D) - (C) 9,272,542 9,397,437 124,894 9,280,410 9,405,559 125,148 Core Capital: regulatory adjustments (b) 55,580 59,466 3,885 56,003 59,953 3,950 Total capital (a) - (b) = (c) 9,216,961 9,337,970 121,008 9,224,407 9,345,605 121,198 Total amount of risk-weighted assets (d) 59,383,662 61,033,437 1,649,775 59,395,184 61,051,195 1,656,011 Credit risk-weighted assets Market risk equivalent / 8% 56,934,898 58,751,668 1,816,770 56,938,257 58,760,540 1,822,282 Operational risk equivalent / 8% 2,448,764 2,281,768 (166,995) 2,456,926 2,290,655 (166,271) Capital adequacy ratio (c) / (d) 15.52% 15.29% (0.22)%pt 15.53% 15.30% (0.22)%pt JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 69#71Securitized Products Exposure 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data As of March 31, 2023 and September 30, 2023, the Bank held the following securitized products. The Bank's holdings of securitized products were limited to securitization exposure as final investor. The Bank has never originated any securitized products and thus has no exposure as an originator and no exposure to special purpose entities (SPEs) that should be consolidated. (Millions of yen) As of March 31, 2023 As of September 30, 2023 Acquisition cost Net unrealized gains (losses) Credit Acquisition Net unrealized ratings cost gains (losses) Credit ratings Domestic Residential mortgage-backed securities (RMBS) 1,274,002 (11,695) AAA 1,251,916 (34,117) AAA Held-to-maturity 350,366 (10,365) AAA 366,969 (18,422) AAA Available-for-sale 923,635 (1,330) AAA 884,947 (15,695) AAA Collateralized loan obligations (CLO) Other securitized products 288,156 (111) AAA 260,139 (397) AAA Commercial mortgage-backed securities (CMBS) Collateralized debt obligations (CDO) Domestic subtotal 561 11 AAA 532 9 AAA 1,562,720 (11,795) 1,512,588 (34,505) Overseas Residential mortgage-backed securities (RMBS) 27,906 3,161 AAA 24,093 4,658 AAA Collateralized loan obligations (CLO) 2,326,005 293,625 AAA 2,568,627 652,194 AAA Held-to-maturity 1,408,606 106,062 AAA 1,660,045 319,197 AAA Available-for-sale 917,398 187,563 AAA 908,581 332,996 AAA Overseas subtotal Total (domestic + overseas) 2,353,911 296,787 2,592,721 656,853 3,916,631 284,991 4,105,309 622,347 Notes: 1. The figures in the above table are reference value calculated not on financial accounting basis but on management accounting basis. 2. The underlying assets provided are only those from multiple debtors comprising securitized products. 3. The above table does not include securitized products that might be included in investment trusts. 4. Net unrealized gains (losses) do not reflect the effect of foreign exchange hedging. No hedging activities against credit risks were made. 5. Other securitized products are securitized products of which underlying assets are mainly auto loan claims. 6. "Overseas" does not include U.S. government sponsored enterprises, etc. (GSES) related products. 7. The overseas collateralized loan obligations (CLO) are only those in the United States and Europe. Net unrealized gains (losses) on the overseas CLO including foreign exchange hedging were as follows. Held-to-maturity securities (fair value hedge accounting was not applicable): JPY (8,705) million as of September 30, 2023, compared with JPY (23,642) million as of March 31, 2023. Available-for-sale securities (fair value hedge accounting was applicable): JPY (3,550) million as of September 30, 2023, compared with JPY (17,158) million as of March 31, 2023. JP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 70 70#72Selected Historical Financial Data FY2020/3 FY2021/3 FY2022/3 1. Summary 2. How to Increase Corporate Value 3. Appendix 4. Financial Data FY2023/3 FY2023/3 H1 (billion yen) FY2024/3 H1 Consolidated Consolidated gross operating profit Net interest income*1 Net fees and commissions 1,314.0 1,319.1 1,292.0 1,056.3 576.3 377.7 976.6 961.9 1,147.4 796.3 429.9 337.9 128.8 127.9 128.4 147.8 75.0 77.5 Net other operating income (loss) 208.4 229.1 16.0 112.1 71.3 (37.7) General and administrative expenses" (1,021.5) (1,011.4) (983.2) (926.3) (466.0) (467.6) Provision for general reserve for possible loan (0.0) (0.0) 0.0 losses Consolidated net operating profit 292.5 307.6 308.7 130.0 110.2 (89.8) Non-recurring gains (losses) 86.6 86.5 182.1 325.5 109.8 343.6 Net ordinary income 379.1 394.2 490.8 455.5 220.1 253.8 Extraordinary income (losses) (0.5) (1.5) 5.6 (1.1) (0.1) (0.6) Net income attributable to owners of parent 273.4 280.1 355.0 325.0 158.6 182.1 Consolidated capital adequacy ratio (Domestic standard)*3 *3 Consolidated total net assets" *3 Consolidated total assets 15.58% 15.53% 15.56% 15.53% 15.29% 15.30% 9,003.2 11,394.8 210,910.8 223,870.6 10,302.2 232,954.4 9,651.8 9,479.3 229,582.2 226,644.9 9,065.7 230,396.3 Non-consolidated Number of employees (people)*3 12,477 12,408 12,169 11,742 12,138 11,852 Average number of temporary employees (people)*3 3,865 3,601 3,243 2,898 2,947 2,662 New employees (people)*4 234 230 147 141 *1 Net interest income is calculated by deducting interest expenses (excluding the expenses related to money held in trust) from interest income. *2 General and administrative expenses exclude non-recurring expenses. *3 As of the end of each fiscal period. *4 As of the beginning of each fiscal year. The number of new employees in FY2024/3 is 141. UP JAPAN POST BANK BANK Copyright© JAPAN POST BANK All Rights Reserved. 71