Embed Size (px)
Citation preview
By Hiroshi Yomo, PresidentBy Hiroshi Yomo, President
June 1 (Wednesday), 2011The Gunma Bank, Ltd.
IR Briefing Session
I.
1. Earnings conditions…………………………………………………………………… 12. Breakdown of core business gross profits………………………………………… 23. Changes in individual profits…………………………………………………………… 34. Comparison with other banks in core business net profit (over the last two years)…… 4
II. Recent Business Status1. Status of loans
(1) Rate of growth in year-end loan balances by borrower's type and size…… 5(2) Rate of growth in retail loans by region…………………………………………6(3) Rate of growth in loans to SMEs (based on actual SMEs) by region……… 7(4) Rate of growth in loans to individuals by region……………………………… 8
2. Status of credit risks(1) Status of credit cost…………………………………………………………… 9(2) Status of upgrade and downgrade of borrower rank…………………………10(3) Change in default rates (quarterly, borrower basis)………………………… 10
3. Status of personal financial assets under custody……………………………………11
III. Status of Capital1. Change in dividend policy………………………………………………………………122. New risk management…………………………………………………………………15
Inquiries on this matter………………………………………………………………………16
Summary of the Financial Results for Year Ended March 2011 and BusinessForecasts for Year Ending March 2012
I.I. Summary of the Financial Results for Summary of the Financial Results for Year Ended March 2011 and Business Year Ended March 2011 and Business Forecasts for Year Ending March 2012 Forecasts for Year Ending March 2012
(Unit: billion yen)1. Earnings conditions1. Earnings conditions
11
No.Mar. 2010Results
Mar. 2011Results
Mar. 2012Forecast
Mar. 2011Year-on-year
increase/decrease
Mar. 2012Year-on-year
increase/decrease
Core business gross profit 1 100.2 100.2 96.0 0.0 -4.2Interest income 2 89.6 90.2 86.2 0.6 -4.0Fees and commissions 3 9.7 9.3 9.1 -0.4 -0.1Other operating profit (*1) 4 0.8 0.6 0.6 -0.1 -0.0
Expenses (-) 5 59.3 59.1 60.0 -0.1 0.8Personnel expense 6 30.8 31.3 31.8 0.4 0.5Non-personnel expense 7 26.0 25.6 25.8 -0.4 0.2
Core business net profit 8 40.9 41.0 36.0 0.1 -5.09 -4.8 -1.7 -1.9 3.0 -0.2
Gain and loss on bonds 10 -0.7 0.7 - 1.5 -0.7Gain and loss on stocks, etc. 11 -1.0 -0.4 -0.2 0.6 0.2Expenses related to retirement benefits 12 -2.9 -2.0 -1.7 0.9 0.2
Credit cost (-) 13 7.0 9.2 9.0 2.2 -0.2Transfer to general reserve for possible loan losses 14 1.4 -5.9 5.0 -7.3 10.9Disposal of non-performing loans 15 5.5 15.2 3.9 9.6 -11.2
Ordinary profit 16 28.6 30.8 26.0 2.1 -4.8Extraordinary profit and loss 17 -0.8 -0.2 -0.1 0.5 0.0Net income before tax 18 27.8 30.5 25.8 2.7 -4.7
19 -0.7 0.8 -2.1 1.5 -2.9Net income 20 17.7 17.8 17.5 0.0 -0.3
21 12.40 12.83 13.09 0.43 0.26 Consolidated Tier I ratio (%) (*2) 22 10.69 11.65 11.88 0.96 0.23
(*1) Does not include gains and losses on bonds, which are assigned under gain and loss on securities.(*2)
(*3)
Gain and loss on securities, etc. (*1)
The foundation internal ratings-based (FIRB) approach has been used for measuring credit risk since the year ended March 2010. The gross profit allocation methodhas long been used for measuring operational risk.All amounts are rounded down.
Consolidated capital adequacy ratio (%) (*2)
(Release of deferred tax assets (-))
2. Breakdown of core business gross profits2. Breakdown of core business gross profits(Unit: billion yen)
22
-4.2
96.0(Year-on-year
decrease)
100.2(Year-on-year
decrease)
0 0
100.2(Year-on-year
decrease)
<Year ending March 2012 (Year-on-year increase)>
Domestic International
Loans Securities
Fees Other
<Year ended March 2011 (Year-on-year increase)>
Domestic International Fees OtherLoans Securities
Year endedMarch 2011
Year endedMarch 2010
0+0.6
-0.4
Interest income
Year endingMarch 2012
-4.2
-0.9-3.3
0.1
0-0.1
Interest income
-0.8
1.0 0.3
-0.1
-4.0
(Note)The average securitiesbalance was approximately110 billion yen less thannormal. As a result, interestincome fell by 0.6 billion yen.
-7.1 -6.5 -7.0 -9.2 -9.0-2.4
-21.2
-4.8 -1.7 -1.9
Gain and loss on securities, etc.Credit cost
20.3
10.317.7 17.517.8
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012
Net income
(Unit: billion yen)
(Forecast)
(Forecast)
102.5 100.1 100.2 100.2 96.0
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012
Core business gross profit
(Forecast)
(Forecast)
44.7 40.3 41.036.040.9
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012
Core business net profit
Losses are indicatedwith a minus (-) sign.
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012
3. Changes in individual profits3. Changes in individual profits
33
4.4. Comparison with other banks in core Comparison with other banks in core business net profit (over the last two years)business net profit (over the last two years)
44
Gunma Bank(Unit: billion yen)
(Unit: %)
(Note)
Average for 14 othermajor banks
1. The 14 other major banks are Yokohama, Chiba, Fukuoka, Shizuoka, Joyo, Kyoto, Nishi-Nippon City, Hiroshima, 77, Hachijuni, Hokuriku, Chugoku, Yamaguchi, and Iyo Banks (regional banks as listed in descending order by total amount of funds).2. The average balance of retail loans (individual and SME loans) indicates the average of the beginning and year-end balances. Figures for some of the 14 major banks are estimates.
(1) Overall increase/decrease in core business net profit over the last two years
Retail loans Individuals SMEs
Core business net profit Breakdown: Interest income Breakdown: Loan interest income
(2) Overall ratio of increase/decrease in average outstanding loan balances over the last two years
+0.7
-6.8
+2.1
-4.7
8.1
17.8
7.0 +0.8
-0.2
-3.7
-4.7
+0.5
II. Recent Business II. Recent Business StatusStatus
0.5
6.7
-1.3
2.3
0.2
7.28.99.3
2.11.80.4
-1.7
2.0
-2.9
1.2
-7.8-3.0-3.7-2.9
20.1
Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
All branches
Individuals
SMEs (based on actual SMEs)
Large and second-tier enterprises
1. Status of loans1. Status of loans
Note: “All branches” represents the total loans for all domestic branches (individuals + SMEs (excluding public corporations and actual large companies) + large and second-tier enterprises (including actual large companies and local government)).
(1) Rate of growth in year(1) Rate of growth in year--end loan balances by borrowerend loan balances by borrower’’s type and sizes type and size
55
(Year(Year--onon--year percentage at end of year)year percentage at end of year)
-0.5-1.3
2.5 3.0
3.7
6.0
11.2
7.0
13.6
-11.6
1.4
4.6
3.7
1.0
5.8
9.4
1.5
5.7
8.0
5.0
1.8
5.3
-9.3
12.8
5.2
Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
Gunma
Northern Saitama
Southern Saitama
Tochigi
Tokyo, Yokohama,and Osaka
Note: This graph shows loans to SMEs (based on actual SMEs) and loans to individuals.
(2) Rate of growth in retail loans by region(2) Rate of growth in retail loans by region
66
(Year(Year--onon--year percentage at end of year)year percentage at end of year)
(3) Rate of growth in loans to SMEs (based on actual SMEs) by re(3) Rate of growth in loans to SMEs (based on actual SMEs) by regiongion
Note: Loans to SMEs (based on actual SMEs) are calculated by deducting those to SMEs that are practically considered to be large companies (holding companies, financial subsidiaries, and other subsidiaries of large companies, as well as government-affiliated companies and so forth) from total loans to SMEs.
In June 2007, hedge funds under the control of Bear Stearns Securities essentially failed.
Lehman Brothers collapsed
in September 2008.
In April 2009, thegovernment announced
countermeasures againstthe economic crisis.
77
(Year(Year--onon--year percentage at end of year)year percentage at end of year)
4.42.6
15.3
-9.7
5.5
-3.1
-1.6
-0.7-0.60.7
4.3
-0.7
0.6
-1.1-2.3
4.3
8.1
-0.4
-1.3
3.24.2
0.2
-1.9
-15.6
2.0
Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
Gunma
Northern Saitama
Southern Saitama
Tochigi
Tokyo, Yokohama, and Osaka
0.8 0.9
6.2 5.6
7.0
15.6
11.0
-7.0
42.3
3.9
10.8 10.5
2.83.1
17.8
21.4
2.4
4.9
13.812.9
6.03.73.5
13.920.4
Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
GunmaNorthern SaitamaSouthern SaitamaTochigiTokyo, Yokohama, and Osaka
(4) Rate of growth in loans to individuals by region(4) Rate of growth in loans to individuals by region
Second half of 2007Establishment of a new northern Maebashi loan station (+3 persons).
First half of 2008Staff increased at the Kawagoe & Koshigaya loan stations (+4 persons).Upgrade of the Oyama housing loan center to a loan station (+3 persons).
First half of 2009 (stepping up promotion in southern Saitama)Assignment of personnel to apartment loan sales promotion in Omiya (+3 persons).Upgrading of the Omiya housing loan center to a loan station (+7 persons).
In August 2008, Gunma Bank began to accept online provisional applications for, and requests for advice on, housing loans.
Second half of 2009Establishment of a new Hachioji loan station (+6 persons).
First half of 2010Assignment of a receptionist to strengthen the Internet housing loan business in greater Tokyo area (+1 person).Assignment of an additional person to apartmentloan sales promotion in Omiya (+1 person).Assignment of additional persons to apartmentloan sales promotion in Oyama (+2 persons).
Second half of 2010Upgrading of the Fukaya housing loan center to a loan station (+3 persons)Tokorozawa loan station (+7 persons)Yokohama loan station (+6 persons)
88
(Year(Year--onon--year percentage at end of year)year percentage at end of year)
Credit cost 7.0 9.2 9.0-1.9 -2.1 -0.3
Other factors 8.9 11.4 9.4Sudden bankruptcies 3.2 3.7 4.0Downgrade in borrower rank(excluding sudden bankruptcies) 5.4 13.1 4.4Others 0.3 -5.4 1.0
Due to change to non-performing rate
Note: Sudden bankruptcies refer to a situation in which a borrower in the “normal or requiring caution” category becomes virtually or actually bankrupt without passing through the threatened with bankruptcy category.
Mar. 2010 Mar. 2012(Forecast)Mar. 2011
(Unit: billion yen)
1. Status of credit risks1. Status of credit risks
Non-performing rate (expected loss rate)(Unit: %)
(1) Status of credit cost(1) Status of credit cost
99
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
Normal 0.14 0.16 0.16 0.10Without feasible drasticmanagement
Expected lossclassification 1 2.36 2.07 1.95 1.69
With feasible drasticmanagement -
14.07 Threatened with bankruptcy, Classification III 58.68 52.60 48.29 40.05
9.34 8.15 10.50 Requiring special caution
Expected lossclassification 2
Requiring cautionother than specialcaution
0.12 0.21 0.19 0.21 0.21 0.09 0.11 0.03 0.02 0.06 0.02 0.08
2.202.50
1.97
2.63
1.96
0.92
1.42 1.351.59 1.69
2.012.12
2008/1Q 2008/2Q 2008/3Q 2008/4Q 2009/1Q 2009/2Q 2009/3Q 2009/4Q 2010/1Q 2010/2Q 2010/3Q 2010/4Q
NormalRequiring caution
15.7 20.0 15.78.4
25.515.6
7.8 7.516.3 13.0 12.6 8.2
-52.2
-2.7-12.2
-37.1
-11.5
-33.6-27.9-41.1
-31.3-25.0 -29.5
-43.0-41.6
-37.0
-45.5-40.8
-18.5 -44.0
-20.8 -16.9-12.0-15.0
-26.0 -35.2
2008/1Q 2008/2Q 2008/3Q 2008/4Q 2009/1Q 2009/2Q 20093Q 2009/4Q 2010/1Q 2010/2Q 2010/3Q 2010/4Q
Up Down Net
(2) Status of upgrade and downgrade of borrower rank(2) Status of upgrade and downgrade of borrower rank (quarterly, monetary basis, Unit: billion yen)
Note 1: Shifts are calculated according to the expected loss classification category: “Normal”, “Expected loss classification (1)”, ”Expected loss classification (2)” and “Threatened with bankruptcy, virtually bankrupt, and bankrupt.”
Note 2: Expected loss classification (1) consists of the “Other borrowers requiring caution” category but excludes the “Borrowers with feasible drastic management” category. Expected loss classification (2) consists of the following two subcategories of the “Other borrowers requiring caution” category: “Borrowers with feasible drastic management” and “Borrowers requiring special caution.”
Note: The default rates above are based on a quarterly survey of borrowers whose outstanding loan balance exceeds 10 million yen at the start of each quarter. A default occurs when a borrower enters the “threatened with bankruptcy, virtually bankrupt, and bankrupt” category or falls into arrears for 3 months or more.
(Unit: %)
1010
(3) Change in default rates (quarterly, borrower basis)(3) Change in default rates (quarterly, borrower basis)
12.9 14.0
5.2 6.2 8.812.2 13.7 14.3 11.6 10.4 11.9 12.7
12.8 13.1
5.0
13.814.0
14.2 13.016.0
12.119.6
10.9
19.4
32.0
25.7 27.1
10.2
19.922.7
26.4 26.730.4
23.7
30.0
22.8
2008/1Q 2008/2Q 2008/3Q 2008/4Q 2009/1Q 2009/2Q 2009/3Q 2009/4Q 2010/1Q 2010/2Q 2010/3Q 2010/4Q
(Year-on-year increase)(+2.2%)
(Unit: billion yen)108.4106.282.9
Pensionpremiums
Investmenttrusts
Lehman Brotherscollapsed
in September 2008.
(Year-on-year increase)(+28.1%)
3. Status of personal financial assets under custody3. Status of personal financial assets under custody
Change in quarterly sales of pension premiums and stock investmeChange in quarterly sales of pension premiums and stock investment trustsnt trusts
Note: All amounts are rounded to one decimal place.
1111
III. Status of CapitalIII. Status of Capital
1.1. Change in dividend policyChange in dividend policy
1212
(1) Description of change
Increase in dividend payout ratio
Dividend per share to date vs. dividend per share going forward
To date: Mainly 20% of non-consolidated net income
Going forward: Mainly 25% of non-consolidated net income
25% increase in dividend if profit remains the same amount
10 Net income (billion yen) 10.0 15.0 17.8 20.0
Dividend per share (yen) 5.0 6.0 7.5 8.5
Dividend payout ratio (%) 24.5 19.6 20.7 20.8
Dividend per share (yen) 5.0 7.5 9.0 10.0
Dividend payout ratio (%) 24.5 24.5 24.8 24.5
Dividend payoutratio: 20%
Dividend payoutratio: 25%
1313
(2) Reason for change in dividend policy
1. Change in capital ratio in the past (Basel II)
2. Tentative calculation of capital ratio based on Basel III (after increase in dividend payout ratio)
Calibration of the Capital Framework (Basel III)Profit of 10billion yen
Profit of 15billion yen
(2011 and onw ard) (2011 and onw ard)
Mar. 2011 Mar. 2019 Mar. 201912.06 12.38 13.30 4.5 712.16 12.47 13.39 6 2.5 8.512.29 12.58 13.50 8 10.5
Main preconditions for tentative calculation:
• With regard to risk assets, deduction items are adjusted.
• The average profit for the past ten years is 10 billion yen, and the avergae profit for the past seven years is 15 billion yen.
Minimum +Conservation Buffer
現状
The foundation internal ratings-based approach （FIRB) has been adopted for credit risks since the year ended March 2010. For operational risks, the grossprofit allocation method has been used since the year ended March 2008.
• Accumulated other comprehensive income is included in the shareholders’ equity. Also, prepaid pension expenses, intangible fixed assets and investment in non-consolidated subsidiaries are deducted, and minority interest is adjusted.
Common Equity Tier I
Tier I CapitalTotal Capital
Common Equity Tier I
Tier I CapitalTotal Capital
Minimum ConservationBuffer
8 years later
Strengthening of management foundation including increase inshareholders’ equity
Approximately 12% in Mar. 2011, and 12% or more in Mar. 2019 (full implementation of Basel III)
Currentstatus
(Unit: %)
Consolidated basis Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
Capital Ratio 11.45 11.50 12.13 11.89 11.26 12.40 12.83
Ｔier I Ratio 7.73 7.86 8.40 9.20 9.46 10.69 11.65
1414
3. Status of risk capital allocation (first half of 2011)
Operational risk
Strategic stockrisk
Market risk
Credit risk
Reserve
Operational risk14.3
Strategic stock risk11.5
Market risk49.8
Credit risk63.2
Operational risk14.3
Strategic stock risk24.7
Market risk75.3
Credit risk69.9
Buffer131.6
Tier 1 Capital315.8
Risk capitalallocation
Allocatedcapital
Quantified risk Post-stresstests
Evaluation of bufferadequacy
Stress
(Unit: billion yen)
• Stress tests in consideration of “additional risks under worsening economic circumstances” as mentioned above are conducted to verify the sufficiency of capital.• Sufficient reserve is left after the above-mentioned stress tests are conducted, even in consideration of risks not responded by allocation categories, reserve for management strategies such as access to new businesses, increase in return to shareholders, etc.
Maintainig sufficient capital to access to new business and to increase return to shareholders
<Main details of stress scenarios>Item Scenario 1 Scenario 2
Default rate
Addition of the actual value in2008 (at the time of theLehman crash) to the currentdefault rate
Addition of the pastmaximum actual value tothe current default rate
Ratingtransition
Rating transition scenarioequivalent to the actualperformance for 2008
Scenario synthesized bychoosing the largestpast downward trend foreach rating
Real estateprice
6.6% decline in real estateprices (the most drasticdecline ratio in residentialareas in Gunma prefecturesince 1995)
10% decline in realestate prices
Stock price Nikkei 225:7,000 yen
Nikkei 225:5,000 yen
Reserve 94.1 billion yen 60.8 billion yen
2. Challenge to new risk management2. Challenge to new risk management
1515
<Goal> Measuring probable losses that will affect P/L for the period by VaR on a low confidence level.
<Specific method under review> (Unit: billion yen)(1) Expected maximum decline in the market value of securities over six months (influence of P/L) ⇒ adoption of a “VaR with a confidence level of 80%”
<Mar. 2011> Risk of decline in stock pricesTotal Strategic stocks Investment trusts Investment stocks
15.1 11.0 1.8 2.3 12.6• Calculate loss for the next six months based on an occurrence probability of 20%.
(2) Expected maximum impairment loss on strategic stocks for six months
<Mar. 2011> Strategic stocks0.2
• Estimate the level of stock prices equivalent to the confidence level of 80%.• Calculate expected impairment loss based on the estimated level of stock prices.
(3) Expected maximum annual credit cost ⇒ adoption of a “VaR with a confidence level of 80%”
<Mar. 2011> Loans to businesscorporations
24.0• Monitor the maximum loss with an occurrence probability of 20% by positioning it as the “maximum credit cost that is expected to be caused by an economic downturn once every 5-10 years.”
Domesticbonds
Expected maximum decline in market value
Expected maximum impairment loss
Expected maximum credit cost
⇒ Expected impairment loss in the event of a decline in stock prices equivalent to a “VaR with a confidence level of 80%”
<Image of loss distribution>
0
Confidencelevel
80.0%
Confidencelevel
99.9%
Profit Loss
• Market risk
Confidencelevel
99.9%
Confidencelevel
80.0%
Loss
0
• Credit
HP: http://www.gunmabank.co.jp
This material has been prepared to provide information, not to solicit the transactions of specific securities.
Descriptions in this material are subject to change without notice. Descriptions of future business performance are included in this material. However, future business results are not guaranteed for securities, which involve risks and uncertainties. Please be advised that future achievements may be different from targets due to changes in business environment, etc.
1166
The Gunma Bank, Ltd.
Business Management Office,
Corporate Planning Dept.
Inquiries on this matter
DataData
June 1 (Wednesday), 2011
The Gunma Bank, Ltd.The Gunma Bank, Ltd.
IR Briefing Session
Contents
This material has been prepared to provide information, not to solicit the transactions of specific securities. Descriptions in this material are subject to change without notice. Description on future business performance is included in this material. However, future business results are not guaranteed for the securities, which involve risks and uncertainties. Please be advised that future achievements may be different from targets due to changes in business environment, etc.
Economic Trends in Gunma Prefecture ………………………………… 1 Quality of Assets
Economic Trends in Gunma Prefecture ………………………………… 2 17
Economic Trends in Gunma Prefecture ………………………………… 3 Coverage Ratio ……………………………………………………… 18
Economic Trends in Gunma Prefecture ………………………………… 4 Transition in Borrower Categorie……………………………………… 19
………………… 5 20
……… 6 ………………………… 21
Status of Loans and Deposits by Region ………………………… 22
………………… 7 ………………………… 23
8 ………………………… 24
…………………… 9 ………………………… 25
…………………… 10 ……………………………………… 26
…………… 11 …………………… 27
…………… 12 …… 28
Change in the Breakdown of Loans (Year-end Balance) Rating ……………………………………………………… 29
…………………… 13 ……………………………………… 30
…… 14 ……………………………………………… 31
Rates of Yield and the Profit Margins of Interest Rates ………………………………… 32
………………………… 15 ………………………………… 33
………………………… 16 ………………… 34
………………… 35Mid-Term Business Plan (Metric targets)
Mid-Term Business Plan (Management strategy)
Change in Average of Earning Assets and Funds Balance (Plan)
Changes in the Loan Growth Rates by Region and Type
Change in the Deposit Growth Rates by Region and Type …………………
Consolidated Accounting (Comparison betweenConsolidated Accounting and Non-Consolidated Accounting)
Changes in the Breakdown of Loans (Outstanding Loans by Industry)
gProfit Margins of Interest Rates Rates(Plan)
Category of Borrow ers and Classification of Loans (Before Provision)
Change in the Breakdown of Credit Cost
Valuation Profit or Loss on Securities
Change in the Outstanding Balances of Loansand Deposits by Region
Branch Office Locations
Mid-Term Business Plan (Outline)
Changes in Personal Financial Assets underCustody (Term-end Balance)
Changes in the ratio of housing
Change in Average of Earning Assets and Funds BalanceChange in the Outstanding Balances of Risk ManagementLoans and Breakdown of Risk Management Loans by Industry
Mid-Term Business Plan (Basic policies)Changes in the Rates of Yield and theProfit Margins of Interest Rates
Gain and Loss on Securities, etc.
Change in the Breakdown of (Consolidated)Capital Adequacy Ratio
Changes in Business Policies
Change in the Composition Ratios of Loansand Deposits by Region
Changes in Gunma Bank’s Shares in Loans andDeposits in Saitama and Tochigi Prefectures
Changes in balances divided by type and size
Historical and Forecast ExpensesChange in Gunma Bank’s Shares in Loans andDeposits in Gunma Prefecture
0
10,000
20,000
30,000
40,000
50,000
60,000
Feb.2009
May Aug. Nov. Feb.2010
May Aug. Nov. Feb.2011
-20
-15
-10
-5
0
5
10
Sales in mass merchandisers (includes new stores)Year-on-y ear comparison (includes new stores)Year-on-y ear comparison (Nationwide, includes new stores)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Mar.2009
May Jul. Sep. Nov. Jan.2010
Mar. May Jul. Sep. Nov. Jan.2011
Mar.-80
-60
-40
-20
0
20
40
60
Common passenger cars Small passenger carsMinivans Year-on-year changeYear-on-year change (Nationwide)
-32
-24
-16
-8
0
8
16
24
32
-60 -40 -20 0 20 40 60
Feb. 2011
Economic contraction
Economic expansion
2009/II
2009/I
2008/IV
2008/I2008/II
2009/IV
2008/III
2007/IV
2007/II
2010/II
2010/I
2009/IV
2009/III
Jan. 2011
2009/III
Economic Trends in Gunma Prefecture 1Economic Trends in Gunma Prefecture 1
% %
Sources: Issues of Research Monthly by Gunma Economic Research Institute
%
Quarterly shipment, year-on-year change
-1-
Million yen
%
Qua
rter-
end
inve
ntor
y,ye
ar-o
n-ye
ar c
hang
e
No. of units
Sales in mass merchandisers Sales of passenger cars
Inventory cycle chart
Source: Gunma Prefecture, Ministry of Economy, Trade and Industry
Source: Ministry of Economy, Trade and Industry
Sources: Japan Automobile Dealers Association, Japan Mini Vehicles Association, Japan Automobile Dealers Association Gunma Branch, Japan Mini Vehicles Association Gunma Branch
* The year-on-year changes of the quarterly figures were taken and plotted on a chart.Figures for January and February 2011 are monthly dataSource: Gunma Prefecture
0255075
100125150175200
21/2 5 8 11 22/2 5 8 11 23/2-100
-75
-50
-25
0
25
50
75
Seasonally adjusted indexesYear-on-year comparison (Gunma: Original index)Year-on-year comparison (Nationwide: Original index)
%
Feb. 2009 May Aug. Nov. Feb. 2010 May Aug. Nov. Feb. 2011
Mining and manufacturingproduction index (Year 2005 = 100)
600
800
1,000
1,200
1,400
1,600
1,800
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
2008 2009 2010 2011
Economic Trends in Gunma Prefecture 2Economic Trends in Gunma Prefecture 2
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Feb.2009
Apr. Jun. Aug. Oct. Dec. Feb.2010
Apr. Jun. Aug. Oct. Dec. Feb.2011
-100
-80
-60
-40
-20
0
20
40
60
80
Owned houses Houses for rentHouses for installment sale Year-on-year changeYear-on-year change (Nationwide)
戸
Source: Ministry of Land, Infrastructure, Transport and Tourism
No. of houses
%
%
Source: Ministry of Land, Infrastructure, Transport and Tourism
Source: Ministry of Land, Infrastructure, Transport and Tourism Source: East Japan Construction Surety Co., Ltd., etc.
Sources: Issues of Research Monthly by Gunma Economic Research Institute-2-
No. of houses
Feb. 2011
%
New housing starts Monthly movements in new housing starts
Value of public works contracts
Month
Million yen
0
50
100
150
200
250
300
Feb. 2009 May Aug. Nov . Feb. 2010 May Aug. Nov . Feb. 2011-400
-300
-200
-100
0
100
200
Total floor space (Gunma) Year-on-year changeYear-on-year change (Nationwide)
Total floor space of construction starts (Non-residential)
Thousand m2
0
25,000
50,000
75,000
100,000
Mar.2009
Jun. Sep. Dec. Mar.2010
Jun. Sep. Dec. Mar.2011
-60
-40
-20
0
20
40
60
80
100
120
140
Total contract v alue Year-on-y ear changeYear-on-y ear change (Nationw ide)
%
0.00
0.50
1.00
1.50
2.00
Feb.2009
May Aug. Nov . Feb.2010
May Aug. Nov . Feb.2011
-60 -40 -20 020406080100
Effective demand-supply ratio of labor force Effective demand-supply ratio of labor force (Nationwide)
No. of new job openings (year-on-year) No. of new job applications (year-on-year)
-50-40-30-20-10
0102030
Jan. 2009 May Sep. Jan.2010
May Sep. Jan. 2011
Year-on-year Year-on-year (Nationwide)
%
98.0
99.0
100.0
101.0
102.0
Feb.2009
Jun. Oct. Feb.2010
Jun. Oct. Feb.2011
General index Excluding perishable foodGeneral index (Nationwide)
Economic Trends in Gunma Prefecture 3Economic Trends in Gunma Prefecture 3
Source: Gunma Labour BureauAll industries and offices with five employees or moreSources: Ministry of Health, Labour and Welfare, Gunma Prefecture
Sources: Ministry of Internal Affairs and Communications, Gunma Prefecture
Source: Teikoku Databank
Sources: Issues of Research Monthly by Gunma Economic Research Institute
Number of bankruptcies
-3-
0
10
20
30
Mar.2009
May Jul. Sep. Nov . Jan.2010
Mar. May Jul. Sep. Nov . Jan.2011
Mar.-200
0
200
400
No. of bankruptcies Year-on-year Year-on-year (Nationwide)
Times
Total overtime hoursEffective demand-supply ratio of labor force and number of new job openings and new job applications
%
%
0
No. of bankruptcies
Consumer price index (Year 2005 = 100)
15.724.4
56.0
43.3
21.3
16.8
49
72
60 58
92
55
0
20
40
60
80
100
0
10
20
30
40
50
60Totalliabilities
No. ofbankrupt
Economic Trends in Gunma Prefecture 4Economic Trends in Gunma Prefecture 4
(*) Based on Teikoku Databank figures, includes only bankruptcies with liabilities of 10 million yen or more. Excludes voluntary liquidations (e.g., suspension of banking transactions) and includes only bankruptcies under the five bankruptcy laws (e.g., Corporate Rehabilitation Law).
(*) First half: April-September, Second half: October-March
Number of bankruptcies of Gunmacompanies and total liabilities
Industry breakdown of bankruptcies inGunma (Number of bankruptcies, %)
-4-
0
20
40
60
80
100
Construction
Manuf acturing
Wholesale/retail
Real estate
Transportation
Serv ice and other
(No. of bankruptcies)(%)(Billion yen)
First halfof 2008
Second halfof 2008
First halfof 2009
Second halfof 2009
First halfof 2010
Second halfof 2010
First halfof 2008
Second halfof 2008
First halfof 2009
Second halfof 2009
First halfof 2010
Second halfof 2010
Change in Average of Earning Assets and Funds BalanceChange in Average of Earning Assets and Funds Balance
-5-
(Unit: billion yen)
No. Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Comparison withMar. 2010
Actualincrease ordecrease *3
1 3,655.4 3,743.2 3,934.6 3,941.7 7.1 32.02 595.4 649.7 738.0 666.9 -71.1 -68.93 135.5 127.8 117.2 114.9 -2.3 -8.74 1,592.1 1,556.8 1,557.7 1,573.1 15.4 44.25 1,107.0 1,172.7 1,272.0 1,378.6 106.6 106.96 204.7 210.8 225.1 186.9 -38.2 -38.27 1,877.6 1,934.0 1,840.6 1,890.2 49.68 101.5 90.8 70.5 95.0 24.59 5,634.7 5,768.1 5,845.8 5,926.9 81.1
No. Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Comparison withMar. 2010
1 5,225.9 5,239.9 5,289.5 5,374.0 84.52 3,887.3 3,958.2 4,028.7 4,095.2 66.53 1,042.2 1,039.2 1,061.5 1,075.7 14.24 2,823.4 2,863.7 2,955.8 3,055.5 99.75 2,402.4 2,376.2 2,333.7 2,318.5 -15.26 117.3 157.0 80.3 35.4 -44.97 82.7 176.5 275.2 296.3 21.18 5,426.0 5,573.5 5,645.1 5,705.7 60.6
*1 Average balances totaled from all domestic branches are shown as breakdowns.*2 Loans to SMEs include loans to local public corporations.*3 Actual increases or decreases are calculated based on a comparison after adjustments of loans, such as sales, write-off,
forgiveness, voluntary sales, auction, collection of payment in substitution, and size change, are made.
Loans
Funds in total
Earning assets in total
Deposits
Call moneyOthers
Liquid depositsFixed deposits
(Breakdown: public loans)
(Breakdown: individuals)(Breakdown: corporations)
(Breakdown: large enterprises)
SecuritiesOthers
(Breakdown: second-tier enterprises)(Breakdown: SMEs*2)
(Breakdown: individuals)*1
*1
Change in Average of Earning Assets and Funds Balance (Plan)Change in Average of Earning Assets and Funds Balance (Plan)
-6-
(Unit: billion yen)
No. Mar. 2011 Mar. 2012 Comparison withMar. 2011
Actual increase ordecrease *3
1 3,941.7 3,980.2 38.5 62.72 666.9 630.5 -36.4 -34.93 114.9 115.0 0.1 -4.94 1,573.1 1,590.5 17.4 44.85 1,378.6 1,475.5 96.9 97.26 186.9 147.0 -39.9 -39.97 1,890.2 1,680.3 -209.98 95.0 305.5 210.59 5,926.9 5,966.1 39.2
No. Mar. 2011 Mar. 2012 Comparison withMar. 2011
1 5,374.0 5,462.0 88.02 4,095.2 4,178.7 83.53 1,075.7 1,093.2 17.54 3,055.5 3,137.5 82.05 2,318.5 2,324.4 5.96 35.4 45.2 9.87 296.3 231.9 -64.48 5,705.7 5,739.2 33.5
*1 Average balances totaled from all domestic branches are shown as breakdowns.*2 Loans to SMEs include loans to local public corporations.*3
Fixed deposits
(Breakdown: large enterprises)(Breakdown: second-tier enterprises)(Breakdown: SMEs *2)(Breakdown: individuals)(Breakdown: public loans)
(Breakdown: individuals)(Breakdown: corporations)
Liquid deposits
Actual increases or decreases are calculated based on a comparison after adjustments of loans, such as sales, write-off,forgiveness, voluntary sales, auction, collection of payment in substitution, and size change, are made.
Loans
Securities
Funds in total
Earning assets in total
Deposits
Call money
Others
Others
*1
*1
1.1
5.37.1 6.7 6.2
4.3
11.6 12.911.0
13.8 12.9
-0.12.30.9
-2.2
-0.7
6.2 5.6 5.6 4.93.9
-3.1
0.1
1.83.01.3
-1.4-0.6-0.5-1.1
0.4
6.3 5.8 6.2 6.2 5.1
11.113.813.5
15.413.9
0.4-0.20.71.5
Change in the Loan Growth Rates by Region and TypeChange in the Loan Growth Rates by Region and Type
Saitama Prefecture
Total loan
Tochigi PrefectureGunma Prefecture
Change in the month-end loan growth rates (per year)by region and type
8.3 8.96.7
0.5 0.22.3
5.4
9.37.2
8.4
-3.0-2.6-0.5
3.7
6.6
All branch offices
Mar. 2009 Sep. 2009 Mar. 2010 Sep. 2010 Mar. 2011 Mar. 2009 Sep. 2009 Mar. 2010 Sep. 2010 Mar. 2011
-7-
(unit: %)Loans to corporations
Loans to individuals
* Totaled from all domestic branches.
-0.8 -0.5
4.80.4
-0.9
-1.1 -0.1
-0.5
-0.2 -1.1
-1.0
-5.2
-2.3-2.2-1.2
1.9
1.8
3.8
0.40.7 1.8
1.92.32.12.2
0.70.5
4.4
0.6
3.6
-2.3
0.5
4.3
1.63.4
0.6 0.21.2
1.81.8
2.11.6
1.6
2.3
0.9
Change in the Deposit Growth Rates by Region and TypeChange in the Deposit Growth Rates by Region and TypeChange in the month-end deposit growth rates (per year) by region and type
* Totaled from all domestic branches.
Mar. 2009 Sep. 2009 Mar. 2010 Sep. 2010 Mar. 2011 Mar. 2009 Sep. 2009 Mar. 2010 Sep. 2010 Mar. 2011
-8-
6.02.0 2.0 3.0
1.0
2.11.4
1.31.1 2.21.1
4.96.15.7
-0.7
Saitama Prefecture
Tochigi PrefectureGunma Prefecture
All branch offices
(unit: %)
Total deposit
Deposits to corporations
Deposits to individuals
Change in the Outstanding Balances of Loans and Deposits Change in the Outstanding Balances of Loans and Deposits by Regionby Region
-9-
(Unit: billion yen)
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Gunma 2,017.3 56.1% 2,074.9 55.3% 2,043.5 53.3% 2,136.3 54.0% 2,079.8 53.0% 2,137.7 53.8% 2,064.8 52.5% -15.0 -0.5%
Saitama 583.7 16.2% 598.9 16.0% 620.6 16.2% 633.9 16.0% 658.8 16.8% 673.0 16.9% 692.4 17.6% 33.6 0.8%
Tochigi 282.3 7.9% 288.7 7.7% 294.3 7.7% 304.1 7.7% 315.4 8.0% 324.3 8.2% 335.0 8.5% 19.6 0.5%
711.3 19.8% 791.9 21.0% 876.5 22.8% 881.4 22.3% 870.1 22.2% 840.7 21.1% 840.1 21.4% -30.0 -0.8%
Total 3,594.6 100.0% 3,754.4 100.0% 3,835.0 100.0% 3,955.7 100.0% 3,924.1 100.0% 3,975.7 100.0% 3,932.3 100.0% 8.2
(Unit: billion yen)
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Endingbalance
Compositionratio
Gunma 4,246.2 81.2% 4,294.3 81.5% 4,273.8 81.3% 4,312.7 81.7% 4,357.0 81.9% 4,390.4 81.8% 4,522.0 82.2% 165.0 0.3%
Saitama 503.0 9.6% 503.6 9.6% 507.8 9.7% 513.5 9.7% 518.3 9.7% 523.7 9.8% 533.7 9.7% 15.4 -0.0%
Tochigi 339.9 6.5% 340.1 6.5% 337.2 6.4% 341.5 6.5% 334.1 6.3% 337.6 6.3% 332.4 6.0% -1.7 -0.3%
138.6 2.7% 130.4 2.4% 139.3 2.6% 111.4 2.1% 112.7 2.1% 113.9 2.1% 115.3 2.1% 2.6 -0.0%
Total 5,227.7 100.0% 5,268.4 100.0% 5,258.2 100.0% 5,279.2 100.0% 5,322.3 100.0% 5,365.8 100.0% 5,503.5 100.0% 181.2
* Totaled from all domestic branches.
Tokyo, Yokohama,Osaka, etc.
Mar. 2009
Sep. 2010
Sep. 2010
<Loans>
<Deposits>
Sep. 2009Mar. 2008
Mar. 2008
Tokyo, Yokohama,Osaka, etc.
Mar. 2011
Mar. 2011
Change fromMar. 2010
Sep. 2008 Sep. 2009 Change fromMar. 2010
Sep. 2008 Mar. 2010
Mar. 2010
Mar. 2009
Change in the Composition Ratios of Loans and DepositsChange in the Composition Ratios of Loans and Depositsby Regionby Region
16.2%
7.9% 8.5%
19.8% 21.4%
52.5%56.1%
17.6%
Mar. 2008 Mar. 2011
Change in Gunma Bank’s composition ratio of loans by region
9.6%
81.2% 82.2%
9.7%6.5% 6.0%
2.1%2.7%
Mar. 2008 Mar. 2011
Change in Gunma Bank’s composition ratio of deposits by region
0%
100%
20%
40%
60%
80%
-10-
Gunma Saitama Tochigi Tokyo, Yokohama, Osaka, etc.
47.5% 47.8% 48.1%
5.0% 5.2% 5.0%7.5% 7.3% 7.8%
8.6% 8.1%
24.1% 24.2% 23.9%
7.3% 7.2% 7.1%
8.3%
Mar. 2008 Mar. 2009 Mar. 2010
Change in Gunma BankChange in Gunma Bank’’s Shares in Loans and Depositss Shares in Loans and Depositsin Gunma Prefecturein Gunma Prefecture
Loans Deposits
(Note) Comparison on the basis of ending balancesSource: “Financial Map” from an extra number of the “Financial Journal”
39.5% 39.2%
10.5% 11.5% 10.3%
7.8% 7.4% 8.3%
11.0% 10.4%
24.2% 24.5% 24.6%
7.0% 6.7% 6.5%
39.9%
10.7%
Mar. 2008 Mar. 2009 Mar. 2010
Credit associations
Shinkin banks
Second-tier regionalbanks
City banks andtrust banks
Other regionalbanks
Gunma Bank
-11-
3.4% 3.6% 3.9%
Mar. 2008 Mar. 2009 Mar. 2010
1.7% 1.7% 1.7%
Mar. 2008 Mar. 2009 Mar. 2010
Changes in Gunma BankChanges in Gunma Bank’’s Shares in Loans and Depositss Shares in Loans and Depositsin Saitama and Tochigi Prefecturesin Saitama and Tochigi Prefectures
4.4% 4.3% 4.2%
Mar. 2008 Mar. 2009 Mar. 2010
(Note 1) Comparison on the basis of ending balances, source: “Financial Map” from an extra number of the “Financial Journal”
(Note 2) The following financial institutions are involved in share calculation ... City banks, trust banks, regional banks, second-tier regional banks, shinkin banks and credit associations
Change in Gunma Bank’s Shares in Loans and Deposits in Saitama Prefecture
Change in Gunma Bank’s Shares in Loans and Deposits in Tochigi Prefecture
Deposits
Deposits
Loans
6.3% 6.4%6.9%
Mar. 2008 Mar. 2009 Mar. 2010
Loans
-12-
Change in the Breakdown of Loans (YearChange in the Breakdown of Loans (Year--end Balance)end Balance)
(Unit: billion yen)
3,664.2 in total
3,619.1in total
3,863.5in total
3,947.3in total
3,997.6in total
3,953.4in total
Changes in balances divided by type and size
-13-
1,104.3 1,127.0 1,231.5 1,340.7 1,388.3 1,436.8
1,633.6 1,592.4 1,579.7 1,590.9 1,596.8 1,607.4
604.9 586.2 742.6 721.7 660.4 642.1
123.9 118.5 114.5 108.5128.4142.6
178.6 184.9 185.6 175.2 237.4 158.5
Mar. 2007 Mar.2008 Mar. 2009 Mar. 2010 Sep. 2010 Mar. 2011
Public & overseasentities
Second-tierenterprises
Large enterprises
SMEs
Individuals
Changes in the Breakdown of LoansChanges in the Breakdown of Loans(Outstanding Loans by Industry)(Outstanding Loans by Industry)
Mar. 2011 -Mar. 2010
Compositionratio
Compositionratio
Compositionratio
Compositionratio Change
Manufacturing 644.8 17.9 747.8 19.5 753.2 19.2 713.7 18.1 -39.5
Agriculture, forestry, fishery, and mining 11.8 0.3 18.7 0.5 11.5 0.3 12.0 0.3 0.5
Construction 183.7 5.1 185.9 4.8 180.0 4.6 169.6 4.3 -10.4
Electricity, gas, heat supply, andwaterworks 12.5 0.4 19.9 0.5 25.0 0.6 24.2 0.6 -0.8
Information communications 12.3 0.3 17.4 0.5 22.7 0.6 26.2 0.7 3.5
Transport 105.2 2.9 124.9 3.3 129.1 3.3 124.3 3.2 -4.8
Wholesaling and retailing 426.8 11.9 447.0 11.7 444.4 11.3 432.9 11.0 -11.5
Finance and insurance 179.2 5.0 176.8 4.6 153.0 3.9 135.8 3.5 -17.2
Real estate 223.8 6.2 208.8 5.4 216.7 5.5 229.9 5.8 13.2
All kinds of services 502.7 14.0 496.4 12.9 493.4 12.6 488.2 12.4 -5.2
Government/municipal authorities 160.4 4.5 157.1 4.1 152.1 3.9 137.3 3.5 -14.8
Others 1,130.9 31.5 1,233.8 32.2 1,342.5 34.2 1,437.7 36.6 95.2
Total 3,594.6 100.0 3,835.0 100.0 3,924.1 100.0 3,932.3 100.0 8.2
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
(Unit: billion yen, %)
-14-
* Totaled from all domestic branches. (Any differences from summary reports on financial results are due to the inclusion of loans to governments.)There were no outstanding loans to governments for the period ended March 2011.
* As a result of a revision of the Japan Standard Industrial Classification (November 2007), the outstanding loans by industry since the end of March 2010 lack continuity with earlier data. For a simplified comparison, data since the end of March 2010 given in the table above was adjusted as follows:
“Real estate” was obtained by deducting “Goods rental and leasing” from “Real estate and goods rental and leasing” and “Goods rental and leasing” was added to “All kinds of services.”
Changes in the Rates of Yield and the Profit Margins of Changes in the Rates of Yield and the Profit Margins of Interest RatesInterest Rates
-15-
(Unit: %)
No.
Earning assets yield 1 1.93 1.82 1.67 1.61 - 0.06
2 ( 1.79 ) ( 1.75 ) ( 1.65 ) ( 1.59 ) ( - 0.06 )
Loans yield 3 2.07 2.00 1.82 1.74 - 0.08
(Breakdown: domestic loans yield) 4 ( 2.04 ) ( 1.99 ) ( 1.82 ) ( 1.75 ) ( - 0.07 )
Securities yield 5 1.44 1.39 1.36 1.37 0.01
6 ( 1.32 ) ( 1.32 ) ( 1.34 ) ( 1.34 ) ( 0.00 )
Deposit cost 7 0.32 0.24 0.13 0.08 - 0.05
8 ( 0.22 ) ( 0.22 ) ( 0.13 ) ( 0.08 ) ( - 0.05 )
Funding cost 9 0.39 0.30 0.14 0.09 - 0.05
10 ( 0.23 ) ( 0.23 ) ( 0.13 ) ( 0.08 ) ( - 0.05 )
Ratio of expense 11 1.09 1.13 1.10 1.07 - 0.03
3-7 12 1.75 1.76 1.69 1.66 - 0.03
(Breakdown: domestic depositand loan direct profit margin) 4-8 13 ( 1.82 ) ( 1.77 ) ( 1.69 ) ( 1.67 ) ( - 0.02 )
Overall direct profit margin 1-9 14 1.54 1.52 1.53 1.52 - 0.01 (Breakdown: overall domesticdirect profit margin) 2-10 15 ( 1.56 ) ( 1.52 ) ( 1.52 ) ( 1.51 ) ( - 0.01 )
Overall profit margin 16 0.46 0.45 0.48 0.48 0.00 (Breakdown: overall domesticprofit margin) 17 ( 0.49 ) ( 0.45 ) ( 0.48 ) ( 0.48 ) ( 0.00 )
* Domestic: domestic operation division. Profit margins and changes are calculated on the table.
Deposit and loan direct profitmargin
(Breakdow n: domestic earning assets yield)
(Breakdown: domestic securities yield)
(Breakdown: domestic deposit cost)
(Breakdown: domestic funding cost)
Mar. 2008 Mar. 2011Increase or decreasein comparison with
Mar. 2010Mar. 2010Mar. 2009
Changes in the Rates of Yield and the Profit Margins of Changes in the Rates of Yield and the Profit Margins of Interest Rates (Plan)Interest Rates (Plan)
(Unit: %)
-16-
No.
Earning assets yield 1 1.61 1.51 - 0.10 2 ( 1.59 ) ( 1.49 ) ( - 0.10 )
Loans yield 3 1.74 1.67 - 0.07 4 ( 1.75 ) ( 1.68 ) ( - 0.07 )
Securities yield 5 1.37 1.33 - 0.04 6 ( 1.34 ) ( 1.26 ) ( - 0.08 )
Deposit cost 7 0.08 0.05 - 0.03 8 ( 0.08 ) ( 0.05 ) ( - 0.03 )
Funding cost 9 0.09 0.07 - 0.02 10 ( 0.08 ) ( 0.05 ) ( - 0.03 )
Ratio of expense 11 1.07 1.06 - 0.01 3-7 12 1.66 1.62 - 0.04
(Breakdown: domestic deposit and loandirect profit margin) 4-8 13 ( 1.67 ) ( 1.63 ) ( - 0.04 )
Overall direct profit margin 1-9 14 1.52 1.44 - 0.08 (Breakdown: overall domestic directprofit margin) 2-10 15 ( 1.51 ) ( 1.44 ) ( - 0.07 )
Overall profit margin 16 0.48 0.39 - 0.09 17 ( 0.48 ) ( 0.39 ) ( - 0.09 )
* Domestic: domestic operation division. Profit margins and changes are calculated on the table.
(Breakdown: domestic funding cost)
Deposit and loan direct profit margin
(Breakdown: overall domestic profit margin)
(Breakdown: domestic earning assets yield)
(Breakdown: domestic loans yield)
(Breakdown: domestic securities yield)
(Breakdown: domestic deposit cost)
Mar. 2011Increase ordecrease
in comparisonwith Mar. 2011
Mar. 2012(Estimate)
Category of Borrowers and Classification of LoansCategory of Borrowers and Classification of Loans(Before Provision)(Before Provision)
(Unit: billion yen)
Classification
Not classified Classification II Classification III Classification IV
Bankrupt borrowers
11.6 5.3 9.5 1.7 14.3
Virtually bankrupt borrowers( 1.7 ) (14.3 )
19.4Borrowers threatened with
bankruptcy 15.0 13.0 30.8
58.9 (15.9)
Borrowers requiring specialcaution 4.2 15.519.7
177.1 187.1364.3
Normal borrowers
3,520.3 3,520.3( 3.5)
Total Not classified Classification II Classification III Classification IV
* The Gunma Bank does not apply the partial direct write-off method.
225.3 32.5 14.33,994.5 3,722.2
Bor
row
ers
requ
iring
caut
ion
Borrowers requiring caution other thanborrowers requiring special caution
Special reserves for possible loanlosses are shown in parentheses.
Borrower categories employed inself-assessment
General reserves for possible
loan losses are shown inparentheses.
(2.0)
(14.2)
-17-
Coverage RatioCoverage Ratio
(Unit: billion yen)
11.6 11.631.0
19.4 0.5
77.8
58.9 58.9 28.1 15.9 74.7%
0.714.7
13.9
364.33,889.6
3,520.3Total
3,994.5 3,994.5
7.5
Total
Loans requiring caution
Normal assets
19.7
Borrowers requiring cautionother than borrowers requiring
special caution
Borr
ower
s th
reat
ened
with
ban
krup
tcy
Borrow ers requiringspecial caution
Normal borrowers
Borrower categoriesemployed in self-
assessment
Asset categories in line with thedisclosure standards under theFinancial Reconstruction Law
(Claim-related assets)
15.0 16.0
Coverageamount by
collateral andguarantee
Provisions(provision ratio
to credit)
100.0%
Coverage ratioRisk-managed
loans(amount of loans)
* The Gunma Bank does not apply the partial direct write-off method.
1.5 61.9%(General reserve forpossible loan losses)
Otherclaims= +
Loans to borrowers underbankruptcy procedures
Delinquent loans
Loans past due three months ormore
Restructured loans (w ith easedlending terms and conditions)
Borrow ers threatenedw ith bankruptcy
Virtually bankruptborrow ers
Loans to borrow ers underbankruptcy procedures and
equiv alent loans
Bankrupt borrow ers
Loans at risk
Totalcoverage
ratio 80.4%
Risk-managed loans104.2
(After the application of the
partial direct w riteoff ethod)
89.9
(48.3%)
(51.4%) (10.5%)
Subtotal ofcoverageamounts
50.7
Subtotal ofprovisionamounts
33.5
Claims to bedisclosed under(the disclosure
requirements of)the Financial
Reconstruction Law
104.8(Af ter the applicationof the partial directwrite-of f method)
90.5(27.0%)
(51.6%)
(47.7%)
-18-
Transition in Borrower CategoriesTransition in Borrower Categories
-19-
(The numbers of borrowers are shown in parentheses in the upper columns, and the amounts are shown in billions of y en in the lower columns.)
Others
(18,635) (15,857) (1,059) (104) (38) (39) (6) (1,532) (1,523) (9) - (1,246)
2,056.1 1,947.5 43.1 9.1 0.7 0.5 2.5 54.7 54.6 0.0 - 53.8
(5,264) (431) (4,207) (114) (101) (59) (16) (336) (329) (7) (431) (290)
267.8 36.2 185.5 24.3 9.3 2.2 1.4 8.8 8.7 0.0 36.2 37.3
(472) (5) (23) (351) (31) (18) (11) (33) (16) (17) (28) (60)
100.0 2.6 3.9 65.2 19.2 1.5 5.6 1.6 1.3 0.3 6.6 26.4
(870) - (71) (16) (619) (59) (8) (97) (92) (5)
34.9 - 1.7 1.3 27.1 3.2 0.6 0.7 0.6 0.0
(349) - (2) - (9) (167) (11) (160) (118) (42) (89) -
20.2 - 0.2 - 0.1 11.2 0.5 8.1 2.9 5.1 3.3 -
(119) - - - - - (56) (63) (20) (43)
11.0 - - - - - 6.6 4.3 1.2 3.0
(25,709) (16,293) (5,362) (585) (798) (342) (108) (2,221) (2,098) (123) (548) (1,596)
2,490.4 1,986.4 234.6 100.0 56.6 18.8 15.2 78.4 69.6 8.7 46.2 117.61. What is shown here is transition in borrower categories from the end of March 2010 to the end of March 2011.
Borrowers with no outstanding balances at the end of March 2011 are not included.2.
3.
4.
Borrowershreatened withbankruptcy
March 2011 Total
Upgrade
Downgrade
Borrowersthreatened
withbankruptcy
Virtuallybankruptborrowers
Bankruptborrow ers Breakdown: full
recovery/repayment
Breakdown:transfer and sale
of loans
Mar
ch 2
010
Normalborrow ers
Expectedloss (1)
Expectedloss (2)
Virtuallybankruptborrowers
Bankruptborrowers
Total
Normalborrowers
Expectedloss (1)
Expectedloss (2)
Expected loss classification (1) consists of the “Other borrowers requiring caution” category but excludes the “Borrowers with feasible drasticmanagement” category. Expected loss classification (2) consists of the following two subcategories of the “Other borrowers requiring caution”category: “Borrowers with feasible drastic management” and “Borrowers requiring special caution.”
(Below threateningwith bankruptcy)
“Other” borrowers are those who have resolved outstanding balances in the FY 2010 by full collection or repayment, final disposal (such astransfer of loans), and other means.
Outstanding balances are calculated based on self-assessments, including loans, acceptances and guarantees, and foreign exchanges(excluding overseas balances, government/municipal authorities, and individual borrowers).Those with outstanding balances not calculated based on self-assessments are aggregated into the “Normal” category.
(Notes)
19.5
17.4
9.1
10.210.6
33.2
Change in the Outstanding Balances of Risk Management Loans and Change in the Outstanding Balances of Risk Management Loans and Breakdown of Risk Management Loans by IndustryBreakdown of Risk Management Loans by Industry
13.0 10.4 8.8 12.7 13.9
76.7 70.563.9 61.4
77.8
1.3 2.2 1.3 1.7 0.7
11.911.412.3
11.613.4
Mar. 2009 Sep. 2009 Mar. 2010 Sep. 2010 Mar. 2011Loans to borrowers under bankruptcy proceduresDelinquent loansLoans past due three months or moreRestructured loans (with eased lending terms and conditions)
Manufacturing industry
Wholesaling industry and retailing industry
All kinds of services
Construction industry
Real estate industry
* The ratio of risk management loans tototal loans is 2.6%.
The Gunma Bank does not apply the partialdirect write-off method.
Breakdown of risk management loans by industry (March 2011)
Change in the outstanding balances of risk management loans
(Unit: billion yen)104.5 in
total95.5 in total
85.6 in total
87.7 in total
104.2 in total
-20-
Others(Unit: %)
Change in the Breakdown of Credit CostChange in the Breakdown of Credit Cost
9.09.27.06.57.111.4
38.1
9.4
0.22%0.17% 0.23%0.17%0.25%
1.05%
0.19%0.31%
Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012
Credit cost
Credit cost ratio
Breakdown of credit cost
Change in credit cost
(Credit cost / average balance of loans)
(Forecast)
(Unit: billion yen)
-21-
(Unit: billion yen)
Credit cost (1)+(2) 38.1 9.4 11.4 7.1 6.5 7.0 9.2 9.0
-12.2 -0.1 7.2 -1.8 -2.7 1.4 -5.9 5.0
50.3 9.6 4.1 8.9 9.3 5.5 15.2 3.9Transfer to specific reserve forpossible loan losses 33.3 8.4 2.9 4.4 5.8 4.1 13.8
Write-off of loans, loss on sales, etc. 17.0 1.1 1.2 4.5 3.5 1.4 1.3
Mar. 2009Mar. 2005 Mar. 2006
3.9
March 2012(Forecast)Mar. 2010 Mar. 2011Mar. 2007 Mar. 2008
Transfer to general reserve for possibleloan losses (1)
Others (2)
0.10
0.15
0.20
0.25
0.30
0.35
0.40
Mar. 2001 Mar. 2002 Mar. 2003 Mar. 2004 Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
0.20
0.40
0.60
0.80
1.00
1.20
1.40
Mar. 2001 Mar. 2002 Mar. 2003 Mar. 2004 Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011
<Changes in the ratio of housing loan borrowers delayed in repayments>
* * Borrowers delayed in repayments are defined as borrowers with deBorrowers delayed in repayments are defined as borrowers with delinquent loans at the end of month. linquent loans at the end of month.
<Changes in the ratio of housing loans repaid in substitution>
(%)(%)
(%)(%)
Changes in the Ratio of Housing Loan Borrowers DelayedChanges in the Ratio of Housing Loan Borrowers Delayedin Repayments and in Repayments and the the RRatio of atio of HHousing ousing LLoans oans RRepaid in epaid in SSubstitutionubstitution
-22-
Valuation Profit or Loss on SecuritiesValuation Profit or Loss on Securities
-23-
(Unit: billion yen)
Year-on-year Year-on-year
Mar. 2010 Mar. 2011Mar. 2011 -Mar. 2010 Mar. 2010 Mar. 2011
Mar. 2011 -Mar. 2010
Other securities 1,803.2 1,787.0 -16.1 69.5 54.7 -14.8
Listed stocks 88.1 82.1 -6.0 37.0 20.3 -16.6
Bonds 1,494.3 1,507.8 13.5 29.0 29.6 0.6
Breakdown: national government bonds 748.1 841.5 93.4 11.5 12.6 1.0
Breakdown: securitized products (1) 6.4 4.7 -1.7 0.0 0.0 0.0 →
Modified duration 3.37 years 4.06 years 0.68 years
Others 220.7 197.0 -23.6 3.5 4.7 1.2
Investment trusts 14.0 15.6 1.6 1.4 0.7 -0.6
Foreign securities 205.1 180.0 -25.1 2.1 4.0 1.8
168.2 147.4 -20.7 0.6 2.4 1.7 →
Others 36.9 32.5 -4.4 1.5 1.5 0.0
Japanese enterprise bonds 12.5 11.2 -1.3 0.0 0.0 0.0
4.5 4.0 -0.5 0.0 0.0 0.0 →
Foreign investment trusts (emerging) 6.7 6.7 0.0 1.5 1.5 0.0
Foreign enterprise bonds 13.1 10.5 -2.5 0.0 0.0 0.0
8.5 9.0 0.4 0.0 0.0 0.0 →
Investment partnerships 1.4 1.3 -0.1 0.0 0.0 0.0
(Notes) 1. No subprime investments have been made.
2.Unlisted stocks of 2.6 billion yen and subsidiary stocks of 2.4 billion yen are excluded.
All products backed by domestic assets, includingcorporate bonds issued by Japanese enterprises.
Securitized products including CBs issued by Japanese enterprises (3)
Commercial banks and investment banks (4)
European and U.S. national government bonds, supranational bonds, etc.(2)
European and U.S. commercial banks andinvestment banks
Acquisition cost(amortized cost) Valuation profit or loss
All products backed by domestic loans such ashousing loans issued by the former GovernmentHousing Loan Corporation.
European and U.S. national government bonds,European and U.S. government guaranteed bonds,supranational bonds, GNMA, etc.
Gain and Loss on Securities, etc.Gain and Loss on Securities, etc.
-24-
(Unit: billion yen)
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012(Forecast)
Gain and loss on securities, etc. -2.4 -21.2 -4.8 -1.7 -1.9
Gain and loss on bonds -0.6 -3.9 -0.7 0.7 -
Gain on sale 0.2 0.4 0.3 1.1 0.6
Gain from redemption - 0.0 - 0.0 -
Loss on sale (-) -0.9 -1.4 -0.4 -0.4 -0.6
Redemption (-) - -2.4 -0.0 -0.0 -
Loss on redemption (-) - -0.5 -0.6 - -
Gain and loss on stocks, etc. -2.3 -16.0 -1.0 -0.4 -0.2
Gain on sale 1.0 0.6 4.7 1.7 0.8
Loss on sale (-) -3.0 -4.4 -5.4 -1.9 -0.8
Redemption (-) -0.3 -12.1 -0.3 -0.2 -0.2
0.5 -1.2 -2.9 -2.0 -1.7Expenses related to retirement benefits
Changes in Personal Financial Assets under CustodyChanges in Personal Financial Assets under Custody(Year(Year--end Balance)end Balance)
29.1 25.7 24.0 23.9 22.4 22.5
301.7 317.1 330.2 327.4 319.0 300.7 286.6
134.8 151.2 147.3 180.3 210.0 230.8 253.9
330.5252.0
288.4303.9 284.4 289.8
27.1
353.6
Mar. 2008 Sep. 2008 Mar. 2009 Sep. 2009 Mar. 2010 Sep. 2010 Mar. 2011
(Unit: billion yen)
824.6in total
Investmenttrusts
PensionPremiums,
etc.
Publicbonds
Foreigncurrencydeposits
819.3in total
756.7in total
820.2in total
856.9in total
838.5in total
-25-
852.9in total
2.4 2.4 2.4 2.2 2.2
25.5 27.1 26.0 25.6 25.8
29.7 30.1 30.8 31.3 31.8
59.2%59.7%56.4%
59.0%62.5%
Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012
Historical and Forecast ExpensesHistorical and Forecast Expenses
Historical and planned changes in expenses
(Forecast)
(Unit: billion yen)(OHR: Administrative Expense/Core business gross profit)
(57.8 in total) (59.7 in total) (59.3 in total) (60.0 in total)(59.1 in total)
-26-
Personnel expense Nonpersonnel expense
Tax OHR
Change in the Breakdown of(Consolidated) Capital Adequacy Ratio
-27-
(Unit: billion yen)
No.Mar.2007
Mar.2008
Mar.2009
Mar.2010
Mar.2011
Comparisonwith Mar.
2010
Capital adequacy ratio 1 12.13% 11.89% 11.26% 12.40% 12.83% 0.43%
Tier I ratio 2 8.40% 9.20% 9.46% 10.69% 11.65% 0.96%
Tier I (basic items) 3 280.9 295.1 303.1 319.7 327.8 8.1
Amount equivalent to tax effect 4 22.7 16.8 15.0 17.4 16.7 -0.6
Ratio of the same to total Tier I 5 8.11% 5.69% 4.96% 5.44% 5.11% 0.33%
Tier II (complementary items) 6 126.0 87.8 59.0 52.2 36.3 -15.9
7 70.4 34.6 8.3 31.3 24.6 -6.6
8 12.1 11.6 11.5 10.6 10.6 -0.0
9 31.3 29.5 27.1 1.2 0.9 -0.2
10 12.2 12.0 12.0 7.0 - -7.0
Total qualifying capital 11 405.5 381.5 361.0 370.8 361.0 -9.8
12 3,342.2 3,207.7 3,204.2 2,990.5 2,813.1 -177.4
13 3,098.1 2,969.7 2,965.1 2,725.9 2,566.3 -159.6
14 53.7 57.5 56.2 81.7 65.0 -16.6
Note 1:
Breakdown: unrealized gain on securities 45%
Breakdown: land revaluation excess 45%
Breakdown: subordinated debt
Breakdown: Value of operational risk divided by 8%
Breakdown: off-balance-sheet items
Breakdown: on-balance-sheet items
In calculating the amount of credit risk assets, the standard approach was used until the end of September2009 and the foundation internal ratings-based (FIRB) approach was used since the end of March 2010.
Breakdown: general reserve for possible loan losses
Risk assets
181.7 -1.115 182.8190.4 180.5 182.8
Consolidated Accounting (Comparison betweenConsolidated Accounting (Comparison betweenConsolidated Accounting and NonConsolidated Accounting and Non--Consolidated Accounting)Consolidated Accounting)
<For the period ended March 2011><For the period ended March 2011>
-28-
Consolidatedaccounting
Non-consolidatedaccounting
Ordinary income 135.9 116.0 19.9billionyen 1.17
times
Ordinary profit 33.6 30.8 2.8billionyen 1.09
times
Net income 17.3 17.8 -0.4billionyen 0.97
times
Total assets 6,227.6 6,204.5 23.0billionyen 1.00
times
Stockholders’ equity 377.5 365.0 12.5billionyen 1.03
times
Capital adequacy ratio 12.83 12.42 0.41%
1.03times
Breakdown: Tier I ratio 11.65 11.27 0.38%
1.03times
Comparison betweenconsolidated accounting
and non-consolidatedaccounting
Ratio of consolidatedaccounting to
nonconsolidatedaccounting
Rating
-29-
(As of May 25, 2011)
Rating Agency
Name of bank
Gunma Bank A1 P-1 A + AA
Bank of Yokohama A1 P-1 AA - AA
Chiba Bank A1 P-1 AA -
Bank of Fukuoka A3 P-2 A + A +
Shizuoka Bank Aa3 P-1 AA
Joyo Bank A1 P-1 AA -
Bank of Kyoto A +
Nishi-Nippon City Bank A A
Hiroshima Bank A3 P-2 A + A +
Hachijuni Bank A +
“Long-term” rating by Moody’s means “deposit rating.”
R&I JCRShort-term
Moody’s
Long-term
Changes in Business PoliciesChanges in Business PoliciesFor Enhancing Profitability
R -PLANThe second interim management planf or the new century
April 2004 to March 2007
<The Desired Corporate Image>The bank closest and most helpfulto its customers.
Q-up 802010 Mid-term business planFurther challenge f or becoming a
quality bank
April 2010 to March 2013<The Desired Corporate Image>The bank selected by customersfor its service quality w ith a difference
Q -PLANInterim management plan f or 2007
Becoming a quality bank
April 2007 to March 2010<The Desired Corporate Image>The bank selected by customers forits quality service.
■中小企業貸出の増強 ■組織人材戦略 ■営業戦略法人サポートセンターの設置→小口定型融資商品の推進 サービスの質の向上につながる組織風土作り、行員の意識の向上 営業力を強化するため、人材の再配置などにより営業推進人員を増強格付別融資商品ﾗｲﾝﾅｯﾌﾟ充実→「ぐんぎんﾍﾞｽﾄﾌｧﾝﾄﾞ」等 各戦略に必要な人員の確保や人材の育成 するとともに、店舗・営業体制を見直します。また、非対面チャネルの機営業店駐在審査役の配置→現場でｽﾋﾟｰﾃﾞｨｰな案件審査 能を強化し、お客さまとの接点拡大やお客さまの利便性向上を図ります。店長権限枠の拡大→現場の支店長の積極的な推進 ■営業戦略本部設置の営業店支援ﾁｰﾑの拡充 →埼玉・栃木から群馬県にも拡大 既存のお客様との取引拡大、新規のお客さまとの取引開拓 ■組織人材戦略業種別融資推進の取組強化（医療業に加え、食品製造業） 地域の特性に応じた推進体制の整備やｻｰﾋﾞｽの向上 人材育成の原点であるOJTを強化し、現場で十分にOJTを実施できる総合金融サービスの取組強化→Ｍ＆Ａ、シンジケートローン等 環境づくりに取組みます。また、女性やシニアスタッフなどの一層の活企業育成ファンドを活用した有望ベンチャー企業の発掘、育成 ■事務戦略 用により、人材の活性化を図ります。→群馬キャピタル1、2号投資事業有限責任組合」 効率的で事務ミスの起こりにくい事務体制の推進川越支店（16/11）、所沢営業所（17/8）、越谷営業所（17/10）開設 事務改革PTで検討した改革案の実施、ｼｽﾃﾑ化による事務ﾐｽ防止 ■事務戦略
事務プロセスの改善やシステム化により、業務の効率化や事務ミスの＜19/3末 中計目標15,500億円＞ ■リスクマネジメント戦略 防止、お客さまの負担の軽減などを図ります。16/3（16,102億円）→19/3（16,336億円） +234億円 内部統制の充実、内部管理態勢の向上
コンプライアンス態勢のさらなる整備と質の向上 ■リスクマネジメント戦略■個人貸出の増強 リスク管理の高度化、顧客保護の徹底 コンプライアンス態勢の強化や顧客保護等管理態勢の充実、また、リ
ローンステーションの開設（土日営業の開始） スク管理の高度化、収益管理態勢の高度化などに取組みます。住宅ローンの新商品投入 ■資本戦略→「がん保証特約付」「失業信用費用保険付」 自己資本の充実 ■資本戦略アコム株式会社との提携の「ナイスサポートカード」取扱開始 業績連動の色合いを加味した利益配分の実施 自己資本の充実を図るとともに、適切かつ効果的な資本政策に取組み
ます。＜19/3末 中計目標11,000億円＞ △リテール貸出末残
16/3（10,251億円）→19/3（11,043億円） +792億円 ■地域社会への貢献＜19/3末 中計目標15,500億円＞ 中小企業等に対する金融円滑化、経営改善支援に取組みます。また、
■手数料ビジネスの強化 16/3（16,102億円）→19/3（16,336億円） +234億円 「環境方針」に基づく環境保全活動に取組みます。預り資産窓口専担者、推進専担者の配置預り資産支援チームの本部設置 ●経営戦略投資信託アドバイザーの配置個人向けインターネットバンキングで投資信託を開始店頭営業力強化へ向けたインフラ整備→「資産運用相談専用ブース」の拡充 （19/3全店へ）資産運用相談専担者の配置投信販売サポートシステム全店稼動 △預り資産末残
＜19/3末 中計目標130億円＞ ＜19/3末 中計目標15,500億円＞16/3（103億円）→19/3（150億円） +47億円 16/3（16,102億円）→19/3（16,336億円） +234億円
■各種サービスの提供銀行本体発行ｸﾚｼﾞｯﾄｶｰﾄﾞ「GBﾄﾞﾘｰﾑﾌﾟﾗｽｶｰﾄﾞ」の取扱開始「相談ステーション」の開設→資産運用やローン等の相談業務
■統合収益管理「統合収益管理ｼｽﾃﾑ」の稼動→収益管理体制高度化に向けた取組
＜19/3末 中計目標 15,500億円 16/3 (16,102億円) → 19/3 (16,336億円) +233億円
＜19/3末 中計目標 11,000億円＞ 16/3 (10,251億円) → 19/3 (11,043億円) +791億円
＜19/3末 中計目標 130億円＞ 16/3 (103億円) → 19/3 (150億円) +47億円
＜22/3末 中計目標 30,000億円＞ 19/3 (27,132億円) → 22/3 (29,259億円) +2,125億円（内訳） 中小企業貸出 19/3 (16,089億円) → 22/3 (15,851億円) △238億円 個人貸出 19/3 (11,043億円) → 22/3 (13,407億円) +2,364億円
＜22/3末 中計目標 10,000億円＞ 19/3 (8,091億円) → 22/3 (8,569億円) +478億円
地域社会への貢献
資本戦略リスク
マネジメント戦略
営業戦略 組織・人材戦略 事務戦略
一味違うサービスを提供し、お客さまに選んでいただける銀行
人材の育成と活性化
営業力の強化
経営体質の強化
Enhancement of small and medium corporations Installation of corporate support center -> Promotion of small standard loan productsIncrease in loan products by rating -> Gungin best fund and other such fundsAppointment of full-time examiner in sales offices -> Speedy examination at each branchExpansion of scope of authority of branch managers -> Active promotion of branch managersExpansion of sales office support team installed at headquarters -> Expansion from Saitama and Tochigi Prefectures to Gunma Prefecture Enhanced promotion of loans by industry (food manufacturing industry in addition to medical industry) Enhancement of integrated financial services -> M&A, syndicate loan, and other such servicesDevelopment of promising venture companies by use of corporate development fund -> Gunma Capital No.1 and 2 Venture Capital Investment LP.Opened Kawagoe branch (November 2004), Tokorozawa sales office (August 2005), Koshigaya sales office (October 2005).
<Interim target as of the end of March 2007: 1,550 billion yen>Up 23.3 billion yen from March 2004 (1,610.2 billion yen) to March 2007 (1,633.6 billion yen)
Increase in loans to individualsEstablishment of loan stations (commencement of business on Saturday and Sunday)Introduction of new housing loan products -> special contracts with cancer insurance and with insurance for unemployment credit expensesCommencement of the Nice Support card in association with Acom Co., Ltd.
<Interim target as of the end of March 2007: 1,100 billion yen>Up 79.1 billion yen from March 2004 (1,025.1 billion yen) to March 2007 (1,104.3 billion yen)
Enhancement of fee businessLocation of exclusive contacts for assets in custody and exclusive staff for promotionEstablishment of headquarters for assets-in-custody support team Appointment of investment trust adviserCommencement of investment trust via internet banking for individualsOrganization of infrastructure for enhancement of point-of-sale businesses -> Expansion of asset management consultation booths (in all stores in March 2007)Location of exclusive staff for consultation on asset managementOperation of investment trust sales support in all stores
<Interim target as of the end of March 2007: 13 billion yen>Up 4.7 billion yen from March 2004 (10.3 billion yen) to March 2007 (15 billion yen)
Provision of servicesCommencement of handling of the GB Dream Plus card, a credit card issued by banksEstablishment of consulting stations -> Consultation on asset management, loans, and the like
Integrated profit managementOperation of an integrated profit management system -> Commitment to an advanced profit management system
Organization and personnel strategyCreation of corporate climate to improve the quality of service, to raise employee awareness, and to procure and develop the staff necessary to implement each strategy
Sales strategyExpansion of business with existing customers, exploitation of business with new customers, organization of promotion system according to regional characteristics, and improvement of service
Office management strategyPromotion of a system for effective error-free office management Implementation of reform examined by office management reform PT and prevention of errors in office management through systemization
Risk management strategyReinforcement of internal controls and improvement of internal management system More organized compliance and improved serviceAdvanced risk control and enhanced customer protection
Capital strategyIncrease of shareholders’ equityDistribution of profit linked to performance to certain extent
Ending balance of retail loans
<Interim target as of the end of March 2010: 3,000 billion yen>Up 212.5 billion yen from March 2007 (2,713.2 billion yen) to March 2010 (2,925.9 billion yen)(Breakdown)Loans to SMEsDown 23.8 billion yen from March 2007 (1,608.9 billion yen) to March 2010 (1,585.1 billion yen)Loans to individualsUp 236.4 billion yen from March 2007 (1,104.3 billion yen) to March 2010 (1,340.7 billion yen)
Ending balance of assets under custody
<Interim target as of the end of March 2010: 1,000 billion yen>Up 47.8 billion yen from March 2007 (809.1 billion yen) to March 2010 (856.9 billion yen)
Sales strategyFor the purpose of strengthening sales and marketing capabilities, we will increase sales promotion staff members by reallocating human resources and review branch offices and sales system. We will also strengthen the function of non-face-to-face channels to make more contact with customers and to improveconvenience for customers.
Organization and personnel strategyWe will strengthen OJT as a basis of the development of human resources and create an environment to fully conduct OJT on site. We will also stimulate human resources by further utilizing women and senior staff members.
Office management strategyBy improving office management process and promoting systemization, we will improve work efficiency, prevent clerical errors and reduce customers’ burden.
Risk management strategyWe will strengthen compliance and enhance a customer protection management system. We will also promote advanced risk control and an advanced profit management system.
Capital strategyWe will not only increase shareholders’ equity but also take appropriate and effective capital policies.
Contribution to regional societyWe will make efforts to facilitate financing to SMEs and support their management improvement. We will also implement environmental conservation activities based on the “environmental policy.”
Management strategy
The bank selected by customers for its service quality with a difference
Strengthening of sales and marketing power
Strengthening of sales and marketing power
Development and stimulation of human resources
Development and stimulation of human resources
Strengthening of management cultureStrengthening of management culture
Sales strategy Organization and personnel strategy
Office management strategy
Risk management strategy Capital strategy Contribution to
regional society
-30-
Branch Office LocationsBranch Office Locations
-31-
NaganoPrefecture
GunmaPrefecture
SaitamaPrefecture
TochigiPrefecture
Tokyo,Yokohama, and
Osaka
◆Branch office
Overseas(One branch office andtwo bases)
Local corporation inHong Kong and liason
office in Shanghai1 overseas branchoffice (New York)
148 branch officesby end of May 2011
宇都宮
太田
熊谷
大宮
JR
渋川
東京
上田
桐生
伊勢崎
前橋
高崎
立川
松戸（23年10
月開設予定）
10 branch offices inTochigi Prefecture
105 branch officesin GunmaPrefecture
One branch office inNagano Prefecture
23 branch officesin SaitamaPrefecture
One branch inOsaka
Prefecture
100 kmfrom
Tokyo
6 branches inTokyo
Metropolis
One branch inKanagawaPrefecture
Ueda
Shibukawa
Maebashi
Takasaki
Isesaki
Kiry u Ota
Utsunomiy a
Ohmiy a
Kumagay a
Toky o
Tachikawa
Matsudo branch(to be established in October
2011)
Under this plan, the following basic policies have been adopted in order to realize the desired corporate image: enhancement of sales and marketing capabilities, development and stimulation of human resources, and strengthening of management culture
MidMid--Term Business PlanTerm Business Plan(1) Outline(1) Outline
Name
In-house name “Q-up 80”: Increase in competitiveness through “Quality Up”
Plan duration Three years (from April 2010 to March 2013)
Desired corporate image
Basic policies
2010 Mid-Term Business Plan:Further Challenge for a Quality Bank
—Establishment of Foundation for New Growth—
The bank selected by customers because it provides quality service with a difference
The bank selected by customers because it The bank selected by customers because it provides quality service with a differenceprovides quality service with a difference
-32-
<Development and stimulation of human resources>
The most important property of a financial institution is “human resources.” The “high quality of humanresources” is a source of competitiveness in the financial services industry. By strengthening OJT andimproving training programs, we will develop human resources that can immediately respond toenvironmental changes and meet customers’ needs. We will also further stimulate human resources bycreating working places in which women can bring out their maximum ability and by making use ofexperiences and know ledge of senior staff members, etc.
<Strengthening of management culture>
We will strengthen management culture to meet trust and expectations of our customers, shareholdersand community residents. To achieve this goal, we will strengthen profitability and increase soundness byimproving operating basis, constructing a highly efficient business processing system and sophisticating arisk management system. By positioning compliance as a basis of every work, we will thoroughly observelaws, regulations, and social norms and establish corporate ethics.
MidMid--Term Business PlanTerm Business Plan(2) Basic policies(2) Basic policies
-33-
<Strengthening of sales and marketing capabilities>
We will further deepen relations with customers, smoothly supply funds, and promote differentiation fromother financial institutions by actively demonstrating the consulting function. To achieve this goal, we willincrease sales promotion staff members, improve employees’ solution and screening capacity and upgradeand expand products and services. We will also expand contact points with customers by increasingchannel convenience.
-34-
MidMid--Term Business PlanTerm Business Plan(3) Management strategy(3) Management strategy
■ Sales strategyFor the purpose of strengthening sales and marketing capabilities, we will increase sales promotion staf f members byreallocating human resources and rev iew branch of f ices and sales sy stem. We will also strengthen the f unction of non-f ace-to-f ace channels to make more contact with customers and to improv e conv enience f or customers.
■ Organization and personnel strategy
We will strengthen OJT as a basis of the dev elopment of human resources and create an env ironment to f ully conduct OJT onsite. We will also stimulate human resources by f urther utilizing women and senior staf f members.
■ Of f ice management strategy
By improv ing of f ice management process and promoting sy stemization, we will improv e work ef f iciency , prev ent clerical errorsand reduce customers’ burden.
■ Risk management strategyWe will strengthen compliance and enhance a customer protection management system. We will also promote advanced risk control and an advanced profit management system.
■ Capital strategyWe will not only increase shareholders' equity but also take appropriate and ef f ectiv e capital policies.
■ Contribution to regional societyWe will make efforts to facilitate financing to SMEs and support their management improvement. We will also implement environmental conservation activities based on the “environmental policy.”
MidMid--Term Business PlanTerm Business Plan(4) Metric targets(4) Metric targets
-35-
Index Target (for the periodending March 2013)
For the period endedMarch 2011
1 Retail loans outstanding at year-end 3,250.0 billion yen 3,039.6 billion yen
2 Core business gross profit 103.0 billion yen 100.2 billion yen
3 Core business net profit 44.0 billion yen 41.0 billion yen
4 Core business net profit ROA Approx. 0.7% 0.67%
5 OHR 50%–59% 59.01%1. Retail loans outstanding at year-end = Outstanding loans for SMEs (local public corporations excluded) + Outstanding loans for individuals2. Core business gross profit = Operating gross profit - Gains and losses on bonds3. Core business net profit = Core business gross profit - Expenses4. Core business net profit ROA = Core business net profit/Average of total assets at the end of the period (including acceptances and guarantees)5. OHR = Administrative expense/Core business gross profit
