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ANNUAL REPORT

2022

Purpose (Signicance of Existence)

Open Up a Bright Future from Yamanashi

Local Industries in Yamanashi Prefecture

Yamanashi Prefecture, with about 80% of its total area covered by forests, is blessed with abundant nature, including Japan's tallest mountain Mt. Fuji (registered as a World Heritage Site) and the Akaishi Mountains. The prefecture is also home to many unique local industries that take advantage of its natural environment, including agricultural products such as peaches and grapes, as well as wine and jewelry.

Preparations for

High-Speed Transportation Network

Expected	Increase in tourists from Kansai and Tokai regions, increase in opportunities for receiving
Effects
orders, expansion of logistic facilities, and increase in residents due to expanded
	commuting radius to Greater Tokyo, etc.

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Yamanashi

Prefecture

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Shinkansen Maglev Train

• Oct. 2014: Minister of Land, Infrastructure, Transport and Tourism approved the start of construction, with opening planned for 2027.
• Dec. 2015: Construction began on the Yamanashi section of the Southern Alps Tunnel (communication route).
• Jan. 2016: Shinagawa Station construction began.
• Nov. 2016: Construction began on the Nagano section of the Southern Alps Tunnel.
• Mar. 2017: Yamanashi Prefecture creates "Linear Environmental Future City Improvement Policy."
• Apr. 2018: Construction began on the Yamanashi section of the Southern Alps Tunnel (mail line).
• Nov. 2019: Construction began on Kanagawa Prefecture Station (tentative name)

Map of Shinkansen Maglev Train Route

Scheduled to start operation in 2027

Kofu	Shinagawa
Iida
Nakatsugawa
	Sagamihara

Yamanashi Maglev Test Line

Nagoya

Osaka

Nara

(*) Station locations further west of Nagoya are	Travel	Shinagawa - Kofu	25 min
undecided.
Shinagawa - Nagoya	40 min
	time
	Shinagawa - Osaka	67 min

Local

Industries

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Chubu Odan Expressway

Saku-Komoro

JCT

Joshin-Etsu Expressway

	Yachiho	Nagasaka JCT - Yachiho IC		Okegawa-
	Completed "planning stage
Chuo Expressway		Nishi Kanto Expressway
	assessment" in Apr. 2015	Kitamoto IC
	Nagasaka		Connected to Kanetsu
		Expressway bound for
			Ken-O Expressway
			Saitama and Hanazono
	Futaba

Chubu Odan Expressway

Shirane	Otsuki	Hachioji JCT
	Kofu
Minami-Alps		Takaosan IC

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8

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Rokugo IC - Shimobe Onsen

Hayakawa IC

Opened to trac on Mar. 10, 2019

Masuho
Rokugo
	Fujiyoshida
Nakatomi
Shimobe	Higashifujigoko Road

Chuo Expressway

Subashiri IC - Gumisawa IC Scheduled to open to trac in FY20

Sagamihara- Aikawa IC

	Wine		Silk Fabric		Traditional Japanese Paper
1	2	3

Shimobe Onsen Hayakawa IC -

Nanbu IC Opened to trac

Onsen	Subashiri IC
Hayakawa

Ebina IC

Gotenba IC

22.8% share of shipment amount ranks second in Japan. Yamanashi wine was designated for a special label by the National Tax Agency.

4 Fruits

Harvest of grapes, peaches and Japanese plums ranks first in Japan.

7 Knit Products

Shipment amount of down quilts ranks third in Japan.

5 Jewelry

Shipment amount of jewelry ranks second in Japan.

8 Sake

Shipment amount of shoji paper and calligraphy paper ranks third in Japan.

6 Mineral Water

38.8% share of shipment amount ranks first in Japan.

9 Inden Leather

on Aug. 29, 2021

Nanbu IC - Tomizawa IC Opened to trac on Nov. 17, 2019

Tomizawa IC - Shin-Shimizu JCT Opened to trac on Mar. 10, 2019

Whole route opened to trac on Aug. 29, 2021

Minobusan	Shin-Tomei
	Expressway
Nanbu
Tomizawa
Shin-Shimizu
JCT	Tomei Expressway

Gotenba JCT

Access between Kofu City and Shizuoka City within 1 hour and 40 minutes (1 hour faster) via the Shizuoka- bound opening of the Chubu Odan Expressway

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THE YAMANASHI CHUO BANK 2022

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Our Mission

Region-Based Operations and Sound Management

Maintaining a close relationship with the communities in the region where we

operate, we will contribute to the prosperity of the region and the development of its

economy, with a commitment to sound management that enjoys the trust of our

customers, while bolstering our business operations.

Long-Term Vision		The 3S Action
(Value Creation Bank)		Guidelines

Consolidated Financial Highlights

The Yamanashi Chuo Bank, Ltd. and Consolidated Subsidiaries Fiscal years ended March 31

							Millions of yen
	2018	2019	2020	2021		2022
Ordinary income	54,120	52,353	44,878	49,602	46,310
Ordinary profit	7,570	7,458	6,726	6,229	6,624
Profit attributable to shareholders of the parent	4,920	4,908	3,764	3,090	4,241
Comprehensive income	2,135	6,740	(20,412)	22,851	(8,867)
Net assets	217,311	222,388	199,661	221,439	211,494
Total assets	3,306,502	3,480,808	3,511,412	4,185,672	4,469,779

As we approach our 150th founding anniversary, we aim to be a financial group that all stakeholders can rely upon to realize an enriched regional community, delighted customers, fulfilled employees, and satisfied shareholders.

Basic Strategies of the Medium-Term Management Plan "TRANS3"

• Strategy to increase business capacity:
  Refinement of the core business and taking on the challenge of new business opportunities
• Strategy to double the productivity:
  Dramatic improvement in productivity by zero clerical work and channel reform

Smile, Speed and Simple

Yamanashi Tokyo

Mt. Fuji

Net assets per share (Yen)	6,430.17	6,652.04	6,183.83	6,849.57	6,515.85
Profit per share (Yen)	146.48	147.15	116.43	96.92	132.73
Capital adequacy ratio (Domestic standard, %)	14.14	13.80	13.22	12.78	11.71
Return on equity (%)	2.29	2.25	1.80	1.48	1.98
Price earning ratio (Times)	14.95	9.31	6.32	9.48	7.17
Cash flows from operating activities	79,725	82,750	(23,354)	446,423	267,979
Cash flows from investing activities	(27,367)	124,502	(134,180)	(62,012)	(112,069)
Cash flows from financing activities	(1,783)	(1,681)	(2,287)	(1,117)	(1,120)
Cash and cash equivalents	311,403	516,974	357,152	740,447	895,241

• Strategy of pursuing sustainability:
  Realization of coexistence of sustainable management and regional communities

Profile (as of March 31, 2022)
Corporate Name:	The Yamanashi Chuo Bank, Ltd.
Head Office:	20-8, Marunouchi 1-chome, Kofu, Yamanashi
Established:	December 1, 1941
President:	Mitsuyoshi Seki
Common Stock:	¥15,400 million
Number of Shares Issued:	32,783,000 shares
Stock Listing:	First Section of the Tokyo Stock Exchange

Notes

1. Amounts do not include consumption and local taxes payable by the Bank and its consolidated subsidiaries.
2. The Bank consolidated its shares at a ratio of five shares to one share on the effective date of October 1, 2018. Accordingly, net assets per share and net income per share are calculated on the assumption that the consolidation of shares was conducted at the beginning of the fiscal year ended March 31, 2018.
3. The capital adequacy ratio is calculated on a consolidated basis in accordance with Bulletin Notification No. 19 issued by the Financial Services Agency in 2006 under Paragraph 2, Article 14 of the Banking Law. The Bank has adopted the Japanese standard for the calculation.

	Profit attributable to	ROE/
	Capital adequacy ratio
Total assets	shareholders of the parent	(Domestic standard)

Long-Term Credit Rating:	A− (Rating and Investment Information, Inc.)	Head Office
Network:	Domestic: Head Office and Branches: 90 (including 1 Internet Branch), District Offices: 2
	Overseas: Hong Kong Representative Office
Businesses:	The Yamanashi Chuo Bank Group comprises the Yamanashi Chuo Bank and four consolidated subsid-
	iaries. Centered on its core banking business, the Group provides an integrated financing service that
	includes a leasing and credit card business. The Bank is the leading local bank in Yamanashi Prefecture,

and its sphere of operations encompasses both the prefecture and the western part of the Tokyo metropolitan region.

Forward-looking statements

Statements contained in this report regarding the Bank's future performance do not constitute statements of historical fact, and are thus subject to a number of risks and uncertainties. Readers are therefore cautioned not to place undue reliance on forward-looking statements, as factors beyond the Bank's control and outside its ability to predict, including general economic conditions and market fluctuations, could cause results to diverge materially from the Bank's projections.

(¥ billion)
4,600
4,400
4,200
4,000
3,800
3,600
3,400
3,200
3,000
March 31	2018	2019	2020	2021	2022

(¥ billion)						(%)
5.0						15.0
4.0						12.0
								Capital adequacy
3.0						9.0			ratio
2.0						6.0
1.0						3.0			ROE
0.0						0.0
FY	2018	2019	2020	2021	2022	FY	2018	2019	2020	2021	2022

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THE YAMANASHI CHUO BANK 2022

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Non-Financial Highlights

Activities to tackle environmental problems

Reduction of electricity consumption

9,812		(Unit: 1,000 kWh)
9,074	8,470

Reduction of

CO2 emissions*

	(Unit: t-CO2)
4,780	4,312	4,050

Reduction of
paper consumption	(Unit: 1,000 sheets)

29,095	26,426
	16,887

CONTENTS

(FY) 2019

2020

2021

(FY) 2019

2020

2021

(FY) 2019

2020

2021

2 Message from the President

Yamanashi Chuo Bank

Basic Strategies for the Medium-Term Management Plan

Corporate Data

48 Board of Directors and

• The Bank's Scope 1 (kerosene, fuel oil, petroleum gas, and city gas) and Scope 2 (electricity) emissions in periodical reports as stipulated in the Energy Conservation Act

Initiatives to revitalize regional economy

Number of consulting	Number of customers for asset succession
(business succession and inheritance measures) and M&A support
support cases	Number of customers for	Number of customers
4,102
asset succession support	for M&A support
(FY2021)	615	414
	(FY2021)	(FY2021)

Number of business matching cases

707(FY2021)

Initiatives to contribute to regional society

Group's Value Creation Process

8 Yamanashi Chuo Bank Group's Value Creation Process

10 Review of Value+ 2022, the Previous Medium-Term Management Plan

12 Purpose of the Yamanashi Chuo Bank Group (Significance of Existence)

14 Long-Term Vision and Materiality (Material Issues)

16 Medium-Term Management Plan "TRANS3 2025"

Three Transformation Drivers

18 AX: Alliance Transformation

24 Basic Strategy 1: Strategy to Increase Business Capacity

26 Basic Strategy 2: Strategy to Double the Productivity

28 Basic Strategy 3: Strategy of Pursuing Sustainability

Past Initiatives

31 Leveraging Consulting Functions Based on Business Feasibility Studies

1. Activities for Regional Revitalization
2. Corporate Governance

36 Compliance - Protecting Customers

Initiatives for Sustainable Management

Corporate Auditors

1. Organization
2. Consolidated Subsidiaries

Financial Review

1. Financial Review
2. Consolidated Balance Sheets

53 Consolidated Statements of Income

1. Consolidated Statements of Comprehensive Income
2. Consolidated Statements of Changes in Net Assets

59 Consolidated Statements of Cash Flows

61 Notes to Consolidated Financial Statements

Number of seminars held for customers and number of participants

32times/8,531people

Initiatives for corporate governance

Percentage of outside directors

33%

Initiatives to utilize diverse human resources

Number of volleyball workshops

Total number of held and number of participants visitors to the

Financial Museum

63,453 32times/523people

		(FY2021)
	Number of female employees	Number of male employees
	taking childcare leave	taking childcare leave
	406	51

19 DX: Digital Transformation

19 SX: Sustainability Transformation

Feature

20 Feature 1: The Shizuoka- Yamanashi Alliance

22 Feature 2: DX Initiatives

1. CSR Message, Basic Policy on CSR
2. Support for the Recommendations of the Task Force on Climate- related Financial Disclosures (TCFD)
3. Initiatives to Revitalize the Regional Economy

42 Activities to Tackle Environmental Problems

46 Activities to Contribute to the Regional Community

Number of female officers

Directors 2 Corporate 1 auditor

Female managers

and supervisors

99

Number of people engaging in a side business

(As of June 30, 2022, Side business system started in April 2022)

8

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THE YAMANASHI CHUO BANK 2022

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Message from the President

President

The Purpose of the Group (signicance of existence): "Open up a bright future from Yamanashi"

Toward realizing "Well-being in Yamanashi"

With our Purpose in mind, we have dened the ideal future image of Yamanashi Prefecture as "Well-being in

survey also discovered that the more people appreciate the SDGs eorts made by the prefecture they reside in,

Ever since its establishment, the Bank has grown with the local economy of Yamanashi Prefecture, under the management philosophy of "Keeping Close Ties with the Local Community and Ensuring Sound Management." The only way a regional bank such as ours can continue to grow sustainably is to contribute toward achieving a sustainable regional society.

Meanwhile, in recent years, stakeholders have become increasingly interested in initiatives companies take toward social issues, as represented by ESG/SDGs. Yamanashi Prefecture, where we have our business foundation, also faces various social issues which need to be addressed, similar to other regional areas.

Against this backdrop, we believe that there is a need to communicate and state clearly to internal and external stakeholders with regard to what the Bank's goals are and the reason the Bank exists, in order to achieve growth through cooperation with the regional society toward the future. For this reason, we have established our Group's Purpose (signicance of existence) as "Open up a bright future from Yamanashi" to be launched together with the start of the new Medium-Term Management Plan "TRANS3 2025."

We are aware that one issue is that "Yamanashi is blessed with abundant nature and located adjacent to Tokyo and Kanagawa, but has a decreasing population." Despite industries such as local manufacturing, agriculture, and

tourism doing their best as individual companies and businesses, this decrease may be caused by these businesses not being able to communicate their appeal on a wider level. There is a need for revitalization and the active provision of information on the appeal of local businesses and culture, or the younger generation will leave the area. This will make it even more dicult to rejuvenate local businesses and culture. To make most of Yamanashi Prefecture's attractive resources, there is a need to have individual businesses and people who want to make a change gather and work together to spread the word about the appeal of Yamanashi Prefecture's rich natural environment and industries so Yamanashi can become a contender in markets outside the prefecture and on a global scale.

As a leading bank, I believe the signicance of our existence is to create opportunities especially for the younger generation so they can play active roles, to connect individual businesses, and provide support by making most of the diverse expertise of the Bank's talent, toward maximizing the potential of Yamanashi Prefecture. These sentiments were put into the Group's Purpose "Open up a bright future from Yamanashi." In this way, the Japanese term "kirihiraku" in our Purpose expresses our hopes for the further development of Yamanashi Prefecture through communicating its appeal and industrial strengths.

Yamanashi." Although it is important to strive for the economic development of local regions, there is also a need to simultaneously achieve spiritual and social gains to attain true abundance. We want to create a society that achieves economic growth, in which all people live in happiness, take on the challenge of new things, and live vibrantly through self-fulllment. This is the essence of "Well-being in Yamanashi," and the society that we want to create.

I believe that creating a town in which the energetic younger generation would want to live and settle in is the most important factor in creating this ideal society.

Although the COVID-19 pandemic has had many negative aspects, it has also been in our favor in terms of bringing younger people to Yamanashi Prefecture. For a long time, the population of Yamanashi Prefecture had been declining. There had been more people owing out that owing in. However, with the COVID-19 pandemic, there is now more people coming into the prefecture than leaving it.

Additionally, according to the "Regional SDGs Survey 2021" conducted by the Brand Research Institute, Inc., Yamanashi Prefecture placed fourth place within Japan's 47 prefectures in terms of level of happiness, so it can be said that it is one of the happiest regions in Japan. The

the higher their "happiness" ratio is, and they have a strong willingness to settle down in the region. In other words, making prefecture-wide eorts to resolve social issues will result in a population increase.

For instance, say that there is a young entrepreneur from a metropolitan area, who comes back to Yamanashi, wanting to work in agriculture there. That person brings other younger people to do farming together with him or her. Conventionally, many may have an image of farming as very hard work. However, with recent advances in ICT and machinery, along with the development of digital environments that enable farmers to promote their brands (such as Shine Muscat) to the world, a trend that will make agriculture an enjoyable and protable industry may occur. I also believe that it is the younger generation, which have a high interest in social issues and are willing to challenge themselves, who will create such trends.

To support trends like this, the Bank believes that it is important to take the initiative in resolving social issues through the creation of environments in which the young generation can take on challenges, in cooperation with industry, government and academia. As a detailed measure to achieve these goals, we are actively supporting local development by establishing the Yamanashi Chuo Bank Regional Revitalization Fund, along

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THE YAMANASHI CHUO BANK 2022

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