We wish to express our heartfelt condolences for the victims of the Great East Japan Earthquake and Tsunami on March 11 2011, and deepest sympathies to those who suffered from the disaster. We offer prayers for the early reconstruction and recovery of the disaster-affected regions.

he Japanese economy recovered moderately in the first half of fiscal 2010 due to the increase in exports stimulated by the improvement in overseas economies, and the effects of the government’s stimulus measures. However, in the second half the improvement slowed down as a result of the reduced effect of the stimulus measures due to the completion of the first round of the measures, and as a result of the rise in the yen dollar exchange rate. The economy of Ibaraki Prefecture similarly showed several signs of a recovery in the first half which then weakened in the second half. Moreover, the major earthquake and tsunami that occurred in March 2011 had a serious impact on the outlook for the economy.

　In this difficult business environment, we continued to pursue our 10th Medium-Term Business Plan which has the basic aims of “Strengthening profitability on a consolidated basis,” “Strengthening management organization,” and “Building on management resources.” We explain the various measures taken by the Bank in fiscal 2010, which was the final year of the business plan, as follows.

　In our corporate banking services, we responded proactively to our regional customers’ fund procurement needs, particularly small and medium-sized enterprises, and also enhanced our support for business including continuing to hold “the Ibaraki Commercial Food Fair” and “the Joyo Manufacturing Forum” and holding “the new Medical Seminar” for our customers that operate medical institutions. Moreover, we established the Environmental Rating and Evaluation System to support the environmental conservation initiatives of our customers, including utilization of the financing facility of the Ministry of the Environment.

　In retail banking services, we aimed to meet the customers’ fund procurement needs by responding proactively to their inquiries about housing finance, and our mortgage loan balance reached \1 trillion. Furthermore, we enhanced our systems for meeting diverse fund management needs. For example, we commenced handling educational endowment insurance.

　And we also expanded the number of branches offering intermediary services for financial instruments. We enhanced our sales network by newly opening the Hitachino-Ushiku Branch, the Miraidaira Branch, the Utsunomiya-Higashi Branch, and the J Plaza Mito, a comprehensive financial center for retail customers.

　We also responded to the earthquake disaster by opening for business on the day after the earthquake, a non-business day, to enable our customers to withdraw the deposits they needed, and by working to provide easily-accessible financial functions, including offering an emergency financing facility for customers who had been affected by the disaster.

　As a result of these measures, in fiscal 2010 gains on sales of bonds increased, and we made more progress in cutting costs, but due to factors such as the increase in credit costs resulting from the disaster, ordinary income posted a year-on-year increase of only \300 million to reach \18.9 billion, while net income came to \12.9 billion, the same level as last year. We continued to maintain the capital ratio, an indicator of the financial soundness of the bank, at the high level of 12.77% (consolidated).

　From April this year we have started the 11th Medium-Term Business Plan: Strategic plan for strong management base ‘J-Cube’. The mission of the plan is “Being best partner that goes along with our customers.” Specifically, this means that we will contribute to our customers and region’s revival and development by offering sophisticated financial services.

　Everyone in the Joyo Bank Group is committed to meeting the expectations of our customers, our shareholders, and this region. I hope you will all continue to support us in the future.