Message From The President

We will provide customers and communities solutions through comprehensive financial services.

I n fiscal 2015, Japan’s economy showed signs of a gradual recovery from the start of the fiscal year, with the impact of a consumption tax increase running its course and companies posting favorable results. The turnaround was generally weak, however, in light of concerns about slowdowns in China and other emerging nations, as well as declining business confidence as the yen rose and share prices slid from the start of the year.

 The economy in Ibaraki Prefecture was generally weak, mainly due to observable lackluster production, despite firm personal consumption throughout the year.

 Operating in this economic environment, Joyo Bank is carrying out its 12th Medium-Term Business Plan (from fiscal 2014 to fiscal 2016), which represents our vision for becoming the “Best Partner Bank for the Collaborative Creation of the Region’s Future.” The fiscal year under review was the middle year of the plan, and we carried out the following policies, centering on the “PLUS+” Project for the Collaborative Creation of the Region’s Future. Our objective is to help customers and communities solve local issues arising due to structural changes in society and the economy through provision of comprehensive financial services while translating these efforts into our own growth as the Joyo Bank Group.

 In July 2015, we celebrated our 80th anniversary. We are deeply grateful to our customers, the local community, and our shareholders for the support over the years that enabled us to reach that milestone. We marked the occasion by carrying out commemorative programs to express our gratitude and our commitment to collaborative creation for the future.

 In corporate banking, we continued to streamline funding to customers. We set up the Joyo Establishment Support Plan to provide funding to support starting up a business, and began handling medical institution debentures for medical institution customers. These initiatives were part of efforts to diversify funding vehicles for customers launching operations, creating new businesses, or pursuing growth.

 We again held food fairs and forums for manufacturing enterprises. We also held fairs and business seminars in Asian nations in which growth is expected as part of efforts to reinforce support for customers seeking to deploy operations overseas.

 We helped to commemorate our 80th anniversary by creating the Joyo Mirai Kyoso Juku. This educational program promotes learning and the exchange of ideas among young managers and business owners who are vital to the future of Ibaraki Prefecture as part of a focus on cultivating local human resources.

 In retail banking, we bolstered our investment trust and insurance product lineup. We also worked to accommodate the diversifying asset management needs of our customers. For example, we began handling Mirai Select, an offering for new investors that combines several investment trust products and allows people to diversify their portfolios with small payments. We also started offering a workplace reserve fund program, which is used in the Nippon Individual Savings Account (“NISA”) tax exemption system for small investments in corporate welfare programs and asset formation for employees and officers.

 In the area of individual financing, we continued to increase our handling of housing loans that encourage long-term residency in coordination with a municipal grant program. We also enhanced our range of loan products for women in keeping with ongoing contributions to regional social and economic progress as a financial intermediary.

 On the sales channel front, we enhanced our branch network along the Tsukuba Express Line. We launched the Tsukuba Shintoshi Branch in August 2015 and opened a Loan Plaza within the Misato Branch. We opened Money Advice Desks in three branches in Ibaraki Prefecture from April 2016 to provide more finely tuned financial services. These desks provide asset management and other information on weekday evenings and weekends.

 Our range of social contribution activities included advising people affected by the Kanto-Tohoku Heavy Rainfall Disaster of September 2015 and providing a temporary ATM service through our mobile customer inquiry vehicle.

 One regional initiative was our creation of the Ibaraki Shopping Street Revitalization Fund, which draws on cooperation with the Regional Economy Vitalization Corporation of Japan. We stepped up efforts to resolve local issues through public and private-sector cooperation. For example, we signed the Partnership Agreement on the Promotion of Relocation to Ibaraki Prefecture with the Ibaraki Prefectural Government and the Japan Trans-Housing Institute. This accord focuses on using the Yutori Life Ibaraki Appeal Residual Value Guarantee-type Relocation Plan, a pioneering new housing loan product that incorporates a rental guarantee from the Japan Trans- Housing Institute.

 As a result of these initiatives, in fiscal 2015 non-consolidated net income increased \3.8 billion, to \27.7 billion. On a consolidated basis, profit attributable to owners of parent rose \2.3 billion, to \31.0 billion. The consolidated return on equity was 5.2%. The capital ratio, an indicator of banking soundness remained high, at 12.00%.

 In recognition of our shareholders’ support over the years, we have increased the annual dividend for fiscal 2015 by \3.0 per share, to \13.0 per share. The increase included a special dividend of \1.0 to commemorate our 80th anniversary. We plan to pay an interim dividend of \6.0 per share in fiscal 2016.

 On November 2, 2015, we entered into a basic agreement for business integration with Ashikaga Holdings Co., Ltd. We set up an Integration Preparation Committee and engaged in deliberations and assessments.

 On April 25, 2016, we concluded share exchange and business integration agreements. We aim to launch the Mebuki Financial Group, Inc., on October 1, 2016. While maintaining and enhancing customer relations and the deep understanding of local communities that we and Ashikaga Holdings subsidiary The Ashikaga Bank, Ltd., have built over the years, we will provide more convenient, highquality comprehensive financial services that can only come from the integration of leading regional banks.

 Everyone at Joyo Bank will continue striving to meet the expectations of customers, community members, and shareholders. We look forward to your ongoing support and encouragement for our efforts in the year ahead.

Kazuyoshi Terakado
July 2016