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May 25, 2017
Financial Results Briefing Session for the Year Ended March 2017
By Kazuo Saito, President
Value for Tomorrow
The Gunma Bank, Ltd.
The Gunma Bank, Ltd.
I. Summary of Financial Results1. Earnings Conditions …………………………………………P.2. Status of Net Interest Income …………………………………………P.3. Status of Loans(1) Breakdown of Loans …………………………………………P.(2) Status of Retail Loans by Region …………………………………………P.(3) Status of New Branch Offices …………………………………………P.(4) Status of Housing-related Loans …………………………………………P.(5) Status of Yield on Loans (Domestic Transactions) …………………………………P.4. Status of Securities …………………………………………P.5. Status of Fees and Commissions Income …………………………………………P.6. Efforts to Improve Business Efficiency …………………………………………P.7. Status of Credit Costs, etc. …………………………………………P.
II. Efforts to Provide Region-Based Relationship Banking1. Demonstration of Function for Customer Consulting Service ……………………… P.2. Efforts to Regional Regeneration …………………………………………P.
III. Business Forecast for the Year Ending March 2018 P.
IV. Status of Capital, etc. P.
V. Status of Per Share Indicators and Shareholder Return P.
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Contents
Value for Tomorrow
No.Compared to
announced figuresfor Nov. 2016
Year-on-year
Core business gross profit 1 91.6 88.6 0.7 -3.0 Net interest income 2 81.4 79.0 1.4 -2.4
International transactions 3 6.2 6.1 1.0 -0.1 Non-interest business profit 4 10.1 9.5 -0.6 -0.5
Net fees and commissions 5 9.3 8.7 -0.5 -0.5 Other operating profit (*1) 6 0.8 0.8 -0.1 -0.0
Expenses (-) 7 56.7 56.6 -0.6 -0.0 8 21.7 21.3 -0.7 -0.3
Core business net profit 9 34.9 31.9 1.4 -2.9 10 2.7 8.9 2.6 6.1 11 0.8 -3.2 -4.0 12 1.8 12.1 10.2
Credit cost (-) 13 -0.5 4.7 2.5 5.3 Others 14 1.5 -1.5 0.0 -3.1
Retirement benefits (-) 15 0.4 3.7 3.3 Ordinary profit 16 39.7 34.5 1.5 -5.2 Net income 17 26.6 25.2 0.2 -1.3
18 28.6 26.3 0.3 -2.3 Consolidated ROE (%) 19 5.6 5.1 -0.1 -0.5
3. All amounts are rounded down to the nearest 100 million yen.
Mar. 2016 Mar. 2017
(Note) 1. Gains and losses on government bonds, etc. are assigned under gain and loss on securities, etc.2. Net income attributable to owners of parent
Non-personnel expenses
Gain and loss on securities, etc.
Gain and loss on government bonds, etc.
Gain and loss on stocks, etc.
Consolidated net income (*2)
1. Earnings Conditions (Unit: billion yen)
-1- Value for Tomorrow
The main factor is the continuous low interest rate caused by the negative
interest rate policy.
Improving the loan structure・Retail loans・Unsecured consumer loans・Cross-border
Improving securities portfolios
I. Summary of Financial Results
Offset
Ensuring above 5% in consolidated ROE
<Measures>
Increase due to conservative provision for possible loan losses
The Gunma Bank, Ltd.
Decrease in core business net profit+
Increase in retirement benefits
1.261.17 1.091.04
1.15 1.18
0.921.04 1.01
Profit margins of interest rateson domestic loans
Profit margins of interest rateson domestic securities
Profit margins of interest rateson international transactions
57.2 55.7 53.9
17.8 18.5 18.1
5.8 6.2 6.1
Loan interest income bydomestic transactions
Securities income bydomestic transactions
Internationaltransactions
Balance factor
Profit marginfactor
Profit marginfactor
Total
Balance factorTotal
+1.8
-3.7
-1.9-1.0
+0.6-0.4
Domestic loans Domestic securities
4,559.0 4,771.8 4,928.1
1,716.6 1,616.7 1,530.0
634.0 601.8 603.7
Loan by domestic
transactions
Securities by domestic
transactions
International
transactions
(+3.3)
(-5.4)
(+0.3)
(+4.7)
(-5.8)
(-5.1)
(+4.4)
(-0.8)
(+24.9)
Mar. 2015 Mar. 2016 Mar. 2017
(Unit: billion yen, %)
2. Status of Net Interest Income
Mar. 2015 Mar. 2016 Mar. 2017 Breakdown of changes in net
interest income
-0.1
-0.4
-1.9
-2-
Changes in net interest income
Changes in average balance Changes in profit margins
Mar. 2015 Mar. 2016 Mar. 2017
Number in brackets denotes percent change
+156.3
-86.6
+1.9
The Gunma Bank, Ltd.
Value for Tomorrow
Amount ofchange
Rate ofchange
Amount ofchange
Rate ofchange
Loans 5,047.3 208.5 4.3 5,224.2 176.9 3.5
Retail 3,881.3 277.1 7.7 4,121.4 240.1 6.2
1,841.9 150.2 8.9 1,962.1 120.2 6.5
Individuals 2,039.4 126.9 6.6 2,159.3 119.9 5.9
Housing-related loans 1,972.2 121.8 6.6 2,087.6 115.4 5.9
1,285.1 34.5 2.8 1,300.5 15.4 1.2
491.9 50.9 11.6 546.9 55.0 11.2
195.1 36.3 22.9 240.1 44.9 23.0
38.6 6.9 21.9 44.8 6.1 16.0
Others 1,006.2 -65.8 -6.1 929.7 -76.4 -7.6
788.2 -65.3 -7.7 693.6 -94.6 -12.0
Cross-border 63.2 17.9 39.7 80.3 17.1 27.2
Overseas branches 53.2 -3.5 -6.3 48.2 -5.0 -9.5
Public entities 106.5 0.8 0.8 124.7 18.2 17.1SMEs do not include regional public corporations or Tokyo/Osaka Branches.Unsecured consumer loans do not include unsecured housing loans.*2
Housing loans
Apartment loans
Others
Unsecured consumerloans*2
*1
SMEs*1
Domestic large and second-tier enterprises
Compared to end of Mar. 2016End of
Mar.2016
End ofMar.2017
Compared to end of Mar. 2015
(Unit: billion yen, %)
Value for Tomorrow-3-
We continued to maintain an upward trend
(1) Breakdown of Loans
Cross-border
SMEs
Individuals(Apartments)
Progress in structural
improvement
Decrease for three consecutive terms
3. Status of Loans
The figure contains a loan of 20.9 billion yen for the Ministry of Finance (MOF)(Short-term investment of the funds of redeemed government bonds)
Percentage of retail loans
78.9%<Year-on-year
increase of 5.4%>
(Unsecured consumer loans)
The Gunma Bank, Ltd.
End of Mar.2015
End of Mar.2016
End of Mar.2017
(7.4)
(7.5)
(5.5)
(7.4)
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2015
End of Mar.2016
End of Mar.2017
(7.4)
(7.5)
(5.5)
(7.4)
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2015
End of Mar.2016
End of Mar.2017
(Unit: billion yen, %)* Number in brackets
denotes year-on-year rate of change.(All branches)
SMEs
(Gunma)
(Saitama)
Year-on-year as of Mar. 2017
Breakdown of increase
Gunma19.6
Saitama35.7
Tochigi17.4
Tokyo and Yokohama
45.5
Others1.8
Gunma13.7
Saitama27.8
Tochigi12.8
Tokyo, Yokohama, and Osaka
58.5
Others6.9
Year-on-year as of Mar. 2017
Breakdown of increase
(All branches)(Gunma)
(Saitama)(Tochigi) (Tokyo, Yokohama, and Osaka)
120.2
119.9
(2) Status of Retail Loans by Region
1,691.61,841.9
1,962.1
966.7 1,006.5 1,026.2
387.6 435.5471.3
165.1 188.7 206.1158.1 192.9
238.5
1,912.4 2,039.4 2,159.3
1,023.9 1,046.0 1,059.8
470.8 502.6 530.4
224.7 237.5 250.4
158.7213.2
271.7
(6.5)(8.9)
(6.5)(2.4) (4.1) (2.0)
(12.3) (12.4) (8.2)
(4.5)(14.3) (9.2)
(21.1) (22.0)(23.6)
(7.6)(6.6) (5.9)
(3.0) (2.2) (1.3)
(8.6) (6.7) (5.5)
(8.2) (5.7) (5.4)
(38.6)(34.3)
(27.4)
(Tochigi) (Tokyo and Yokohama)
Individuals
-4-
The Gunma Bank, Ltd.
Value for Tomorrow
1.0 1.0 1.1 1.4 1.7
2.0 2.4
2.7 3.2
4.2
0.6 0.4 0.3 0.4 0.6 1.0
1.3 1.5 1.5 2.1
Mar.2008
Mar.2009
Mar.2010
Mar.2011
Mar.2012
Mar.2013
Mar.2014
Mar.2015
Mar.2016
Mar.2017
Business gross profit
Profit after the deduction ofcredit costs
82.0100.5 121.4
138.1 173.1
214.8 267.1
333.5
419.4
516.9
Mar.2008
Mar. 2009
Mar.2010
Mar.2011
Mar.2012
Mar.2013
Mar.2014
Mar.2015
Mar.2016
Mar.2017
Kasai (May 2016)
Kawasaki (Oct. 2015)
Ogikubo (Dec. 2014)
Sagamihara (Feb. 2013)
Matsudo (Oct. 2011)
Tachikawa (May 2011)
Ueda (Oct. 2007)
Koshigaya (Aug. 2007)
Tokorozawa (Oct. 2006)
Kawagoe (Nov. 2004)
Urawa (Feb. 2001)
(3) Status of New Branch Offices Continuing the strategy of expanding our
market into promising regions(Unit: billion yen)
Value for Tomorrow-5-
* Adachi
* Adachi BranchTo be opened in July 2017
Making major contributions to an increase in retail loans
Pace of opening new branch offices:
1/year
Earnings conditions at new branch offices over the last 10 years
Loans at new branch offices (ending balance) over the last 10 years
(23.2%)
* Number in brackets denotes year-on-year rate of change.
The Gunma Bank, Ltd.
Fukaya Kamishiba
Musashiurawa
Kamisato
Koshigaya
Kagohara
Kumagaya
HonjoMinami
Fukaya
Honjo
Gyoda
Kasukabe
Hanyu
Yono
Urawa
Toda
Kawaguchi
Konosu
Menuma
Tokorozawa
Kawagoe
Fukiage
TokyoYotsuya
UenoIkebukuro
Ageo
Omiya
Hachioji
Sagamihara
OgikuboKasai
Kawasaki
Tachikawa
Matsudo
Yokohama
Ueda
198.7 208.1 220.8 233.1 247.0
79.3 88.9 100.8 113.5 126.567.074.1
85.294.3
103.1
16.024.2
34.050.8
70.3
361.2395.4
440.9491.9
546.9
6,4777,219
8,047
9,00710,005
End ofMar.2013
End ofMar.2014
End ofMar.2015
End ofMar.2016
End ofMar.2017
Tokyo andYokohamaTochigi
Saitama
Gunma
FY2013 FY2014 FY2015The number of defaults 0.23 0.22 0.19
Amount 0.18 0.21 0.16
1.33 1.33 1.34 Remaining at a satisfactory level
Vacancy rate (%) 7.5 6.4 5.9 Remaining at a low level
Default percentage(%) Stable at a low level
DSCR (times) rental income/principal andinterest amount to be repaid
(4) Status of Housing-related Loans
-6-
(Unit: billion yen) The number and balance of
apartment loans
Status of apartment loan default percentage, the Debt Service Coverage Ratio (DSCR) and vacancy rate
The number of loans (cases)
* Default means borrowers requiring special attention and borrowers in lower classifications.
Improvement trend
The Gunma Bank, Ltd.
Value for Tomorrow
Year-on-year Change Rate of
changeYear-on-
year
1,972.2 2,087.6 100.0% 115.4 5.9% 260.9 3.3
Housing loans 1,285.1 1,300.5 62.3% -2.9% 15.4 1.2% 111.3 -13.8 94,179
720.4 712.8 34.1% -2.4% -7.6 -1.1% 47.3 -7.9 58,472
320.0 323.8 15.5% -0.7% 3.8 1.2% 28.2 -4.5 20,964
119.9 118.1 5.7% -0.4% -1.8 -1.5% 7.3 -1.7 8,376
124.6 145.6 7.0% 0.7% 21.0 16.8% 28.5 0.3 6,367
Floating 839.0 922.8 71.0% 5.7% 83.7 10.0% 103.9 -15.6 61,529
Fixed 446.0 377.6 29.0% -5.7% -68.3 -15.3% 7.4 1.8 32,650
Apartment loans 491.9 546.9 26.2% 1.3% 55.0 11.2% 84.7 6.7 10,005
233.1 247.0 11.8% 0.0% 13.8 5.9% 29.4 2.1 4,781
113.5 126.5 6.1% 0.3% 12.9 11.4% 19.0 0.6 2,332
94.3 103.1 4.9% 0.2% 8.7 9.3% 14.3 0.1 1,721
50.8 70.3 3.4% 0.8% 19.4 38.2% 22.0 3.9 1,771
195.1 240.1 11.5% 1.6% 44.9 23.0% 64.9 10.4
Gunma
Saitama
Thenumber of
loans(cases)
Mar.2017
Mar.2016
Year-on-year Amount of new loansgrantedComposition rate
Housing-related loans
Tokyo and Yokohama
Tochigi
Tokyo and Yokohama
Other housing loans
Gunma
Saitama
Tochigi
Floating Fixed rate2:98
1.62 1.29 1.36
0.99
1.53 1.18 1.23
0.92
GunmaPrefecture
SaitamaPrefecture
TochigiPrefecture
Tokyo,Yokohama, and
Osaka
Mar. 2017Mar. 2016
Year-on-year
1.20 1.11 -0.09Retail 1.40 1.27 -0.13
1.33 1.19 -0.14
Individuals 1.45 1.34 -0.11
Housing-related loans 1.33 1.21 -0.12
Housing loans 1.33 1.23 -0.10
Apartment loans 1.33 1.16 -0.17
8.33 8.16 -0.17
0.44 0.35 -0.09
Public loans 1.03 0.90 -0.13
SMEs*2
Mar.2017
Mar.2016
Loan by domestic transactions*1
Large and second-tier enterprises
Unsecured consumer loans
1.35 1.29 1.18 1.46
1.21 1.18 1.04 1.31
GunmaPrefecture
SaitamaPrefecture
TochigiPrefecture
Tokyo andYokohama
Mar. 2017Mar. 2016
1.84 1.68
1.56 1.45
1.34
1.73 1.60
1.46 1.33
1.19
1.51 1.38
1.29 1.20
1.11
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
IndividualsSMEsTotal
(Unit: %)
(5) Status of Yield on Loans (Domestic Transactions)
Breakdown of yield on loans
*2 SMEs do not include those of the accounts of regional public corporations and Tokyo/Osaka Branches.
*1 The rates of yield on loans other than those marked with *1 do not include non-performing debt.
Value for Tomorrow-7-
[Individuals][Corporate]
Apartment loans25.5
Floating Fixed rate69:31
* Average balance-based component ratio
( )
Housing loans59.7
Linked with market rate fluctuations
37.3Short-term(prime rate)
8.7
Long-term floating (long-term prime
rate)34.4
Long-term fixed19.6
General loans (housing, etc.)
12.7
Consumer loans 1.1Card loan 1.0
Effect ofstructural
improvement
Total -0.09
Retail -0.13
The Gunma Bank, Ltd.
Changes in yield on loans (domestic transactions)
Yield of loans to SMEs (Mar. 2016–Mar. 2017)
Yield of loans to individuals(Mar. 2016–Mar. 2017)
Balance composition by interest type (end of Mar. 2017)
( )
Mar. 2016 Mar. 2017 Mar. 2016 Mar. 2017
3.25 3.57 3.03 3.70
0.82 0.78 1.51 1.78
-46.0 -44.6 -12.0 -15.9
(Domestic bonds) (Foreign bonds)
Modified duration (year)
Bond yield (%)
100 BPV (billion yen)
38.8%43.9%
36.1% 36.6%32.8%
End of Mar.2014
End of Mar.2015
End of Mar.2016
End of Mar.2017
End of Mar.2018
75.5 133.0
427.1453.2
93.9104.3
266.4272.0
555.0563.6
550.2 409.3
1,968.4 1,935.7
Mar. 2016 Mar. 2017
+40.3Sale -17.9
-163.3
+68.0Sale -
-59.4
+57.9 Sale -1.8
-50.4
+24.8 Sale -14.4
+286.2 Sale -211.6
-46.4
( (-2.0) )
+85.8 -28.2
Purchase
Purchase
Sale
Redemption,etc.
Subscription
Redemption,etc.
Purchase
Purchase
Redemption,etc.
Purchase
Foreign exchangef actor
+5.5
Stocks+10.4
Investment trust, etc.
+57.5
Foreign securities+26.0
Redemption,etc.
Government bonds
-140.9
Municipal bonds+8.6
Corporate bonds
Government bonds
Municipal bonds
Corporate bonds
Stocks
Foreign securities
Investment trust, etc.
-0.1
5.4 -4.1 5.08.5 2.1 1.0 3.1
2.1 -3.2 12.111.0
End ofMar. 2016
End ofMar. 2017
: Yen conversion foreign bonds
Grand total
4.0
Total
-8.1161.5
153.4
-11.1
+3.0
BondsGain on
cancellation Stocks
37.8
13.9-8.5-6.314.8
26.7
123.7 126.7
+17.9112.7
94.8
4. Status of Securities Breakdown of ending balance of
securities (On the basis of not including gain and loss from valuation)
-8-
(Unit: billion yen)
(Unit: billion yen)
Direction
Duration, yield, 100 BPV
◎ Changes in profit/loss from valuation of other securities
▲ Book value basis■ Market price basis
(Forecast)
(Unit: billion yen)
20.3%
17.8%16.7% 15.1% 13.6%
Operations for Mar. 2017(Gain and loss on
securities, etc.)
Bonds
Stocks
Foreign
Others
securities
155.0165.9152.6175.0140.1
70.4 64.070.7 68.373.5
The Gunma Bank, Ltd.
Percentage of strategically held stocks for Tier 1
Value for Tomorrow
0.10 0.070.15 0.19 0.20
0.050.06
0.06 0.020.030.16
0.12
0.100.17
0.33
0.06
0.04
0.11
0.07
0.05
0.04
0.08
0.070.11
0.14
0.01
0.01
0.030.04
0.03
0.05
0.03
0.40.4
0.5
0.6
0.8
2nd halfended
Mar. 2015
1st halfended
Sep. 2015
2nd halfended
Mar. 2016
1st halfended
Sep. 2016
2nd halfended
Mar. 2017
Corporate business insuranceDefined contr ibution pensionsBusiness matchingM&ASyndicate loansCorporate f inancial instruments, etc.Private placement bonds
55.464.1
33.919.5
32.9
42.6 26.5
22.6
12.6
14.5
98.190.6
56.5
32.1
50.0
2nd halfended
Mar. 2015
1st halfended
Sep. 2015
2nd halfended
Mar. 2016
1st halfended
Sep. 2016
2nd halfended
Mar. 2017
Pension insurance, etc.Investment trusts
2.4 2.4 2.4 2.3 2.4
1.7 1.7 1.3 1.0 1.3
0.7 0.5 0.8 0.7 0.5
3.8 3.8 3.9 4.2 4.2
8.8 8.5 8.7 8.4 8.4
2nd halfended
Mar. 2015
1st halfended
Sep. 2015
2nd halfended
Mar. 2016
1st halfended
Sep. 2016
2nd halfended
Mar. 2017
Other commissionsCommissions for pension insurance, etc.Investment trust commissionsExchange commissions
0.5 1.74.6
6.28.5
13.5
905
1,730
2,5263,023
3,776
4,940
Oct.2016
Nov. Dec. Jan.2017
Feb. Mar.
Tota l sales amount
Tota l number ofaccounts opened
Year-on-year
Net fees and commissions 9.3 8.7 -0.5
(10.2) (9.9) (-0.3)
17.2 16.9 -0.2
4.4 3.6 -0.8
1.0 1.4 0.4
7.9 8.1 0.2
4.1 4.1 0.0Insurance prem iums for loans wi th l i fe insurance
Mar.2017
Mar.2016
(% of core business gross profit)
Fees and commissions income
Fees and commission expenses
Investment trusts and insurance commissions
Corporate fees and commissions
5. Status of Fees and Commissions Income Changes in fees and commissions income
Changes in corporate service fees income
(Unit: billion yen)
Changes in fees and commissions income
Changes in sales amounts for marketing capability for personal deposit financial assets
-9- Value for Tomorrow
(Unit: billion yen)(Unit: billion yen) (Unit: billion yen)
47.4
Financial instruments intermediary service
2.6
(Unit: the number of accounts/billion yen)
Increasing trend
Turned to an increase due to the introduction of the bank brokerage
collaboration measure
◎ Changes in the total sales amount and the number of accounts opened at Gungin Securities
The number of accounts opened and the sales amount have been steadily increasing since the start of business in October 2016.
(Gungin Securities)
The Gunma Bank, Ltd.
Time
Cutover ofmajor systems
Mar. 2017 Sep. 2017 Sep. 2018Mar. 2018
Start of the operation of a new loan support
system
Start of the operation of a new CRM system
Start of the operation of a new front office compliance system
Start of the operation of a new system for sales branch offices
Trial operation will start in January 2018(To be implemented at all branches in one year)Fund transfer management system
To be implemented at all branches in six months starting from June 2017
Establishment of call centers To be established for all branches in six
months starting from April 2017
6. Efforts to Improve Business Efficiency By promoting BPR:
-10-
Schedule of the implementation of various measuresMay 2017
Implemented
Sales branch offices are converted from the location of clerical work to the location of sales
Effect of reduction in the workforce for 200 employees (for clerical work at sales branch offices)
Depreciation following the introduction of various systems(the cost increase is included in the mid-term business plan)
An increase of 0.6 billion yen for the second year and an increase of 1.2 billion yen for the third year of the mid-term business plan
To be utilized to enhance the sales force (a principal measure for the mid-term business plan): personnel and training systems have been revised
Deposit, money transfer and loan business
Business of assets in custody- Elimination of paper documents for clerical work for investment trusts, the automatic preparation of
order slips, etc.
- Centralization of correcting errors of money transfers and clerical work for inheritance and attachment to the head office and the preparation of pre-printed forms
- Systematization of preparing applications, streamlining of clerical work for making contracts and the execution thereof, etc.
The Gunma Bank, Ltd.
Value for Tomorrow
Compared toMar. 2016
Normal borrowers Entire claimamount 1 yr 0.026 0.029 0.027 0.039 0.012
Borrowers without realistic,comprehensive business
reconstruction plansClassification 1
Entire claimamount 3 yrs 1.624 1.394 0.821 1.111 0.290
Borrowers with realistic,
comprehensive business
reconstruction plans
Entire non-coverage amount 3 yrs 42.715 42.140 42.016 39.488
Borrowers requiring specialattention
9.6803 yrsClassification 2
Classification III borrowers threatened withbankruptcy
0.228
Mar.2014
Mar.2015
Mar.2016
Entire claimamount 11.115
Mar.2017
7.878 8.106
Provisiontarget
Period
Borrowersrequiringattention otherthan specialattention
Credit costs 6.5 1.9 -0.5 4.7
-1.8 -1.9 -3.2 0.8
8.4 3.7 2.7 3.9
0.2 1.6 -1.4 -0.4
8.7 5.8 5.3 6.2
-0.5 -3.7 -1.3 -1.9Collection, upgrade, etc.
Mar. 2016Mar. 2014
DCF
Downgrade of borrowerrank
Mar. 2017
Other factors
Due to changes to the provision ratio
Mar. 2015
7. Status of Credit Costs, etc. Breakdown of credit costs
Provision ratios for possible loan losses
(Unit: billion yen, %)
Remaining at a low level in real terms
Longer observation period for estimating the loss ratio
Loss ratio ↑ ⇒ Provision ratio ↑
Due to changes to the provision ratio: 0.8 billion yen
Others: -1.8 billion yen
Conservative provision for possible loan losses
Effect of review: +2.6 billion yen
If it had not been reviewedCredit costs: 2.1 billion yen
Value for Tomorrow
-2.528A credit cost of 2.0 billion
yen for Mar. 2018
-11-
The Gunma Bank, Ltd.
Start-up Decline Phase/Business RejuvenationMaturityGrowth
II. Efforts to Provide Region-Based Relationship Banking
1. Demonstration of Function for Customer Consulting Service
SME Revitalization Support Service, “Gunma Bank Management Club,” Help Desk for Subsidies
Local community collaboration program
Funds for regional economic revitalization
Support for international operations
Business succession, M&A (merger and acquisition)
Business matching service
Syndicate loans, Support for corporate bonds issued by private placement bonds
Start-up support
Industry-academia-government collaborationGunma SME Rejuvenation
Support Fund,DDS (Debt for Debt Swap)
Collaboration with business innovation support institutions
Provision of optimal solutions based on evaluation of customers business potentials
Value for Tomorrow-12-
The Gunma Bank, Ltd.
117
7629
76Manufacturing
Services
Growing fields
Regionalrevitalization
Efforts to revitalize regional economies
Gunma Bank Business Support
AwardFunds
Help Desk for Subsidies
Assignment of dedicated persons for business succession and M&A
Business development utilizing buried regional resources
Improvement of productivity of service industry, etc.
Support for environment development, business succession, etc. toward a fresh start
Main support measuresSupport items according to the stage in the business’s life
SME Revitalization Support Service
Provision of optimal solutions based on
evaluation of customers business
potentials
Gunma Bank New Senior Leader
Exchange Meeting
Provision of optimal solutions based on evaluation of customers business potentials Evaluation of customers' business potentials: nine companies in the automobile related
industry, 297 corporate customers of sales branch offices Focusing on providing solutions for challenges to business management recognized
through evaluation of customers business potentials
Efforts to revitalize regional economiesContribution to communities through Gunma Bank
Management Club (since October 2012)
(Number of members: 1,092 (Mar. 2013) ⇒ 8,556 (Mar. 2017))
Opening Gunma Bank Management
School
Distribution and provision of business information
Holding seminars/
study sessions
Gunma Bank
Manage-ment Club
“Silk Heritage of Gunma” (Total amount of contribution: 2.9 million yen)“Oze Kiko” (Total amount of contribution: 11.7 million yen)Donation through the “Gunma Bank Private Placement Bond for the Revitalization of Regional Economies” (Total amount of contribution since January 2017: 4.5 million yen)
Donation efforts by contributing to community activities
Conclusion of comprehensive partnership agreements with municipalities: Gunma Prefecture, six other cities and one town (since June 2016)
2. Efforts to Regional Regeneration
Value for Tomorrow
Changes in the number of members of the Gunma Bank Management Club
Status (Number) of entries for the Gunma Bank Business Support Award
FY2013 FY2014 FY2015 FY2016
382
217258
298
Oct. Mar. Mar. Mar. Mar. Mar. 2012 2013 2014 2015 2016 2017
8,5566,925
5,361
3,5501,092409
-13-
The Gunma Bank, Ltd.
<<Mar. 2017>> <<Mar. 2018>>-1.7
88.6(Year-on-year
decrease of 3.0)
87.7(Year-on-year
decrease of 0.8)
V: +2.2R: -3.9
V: -1.5R: +2.0
V: -0.2R: -1.9
+0.5-2.1
+2.4
Year-on-year
Rate ofchange
Year-on-year
Loans 5,285.3 213.1 4.2 1.06 -0.06
5,133.6 205.4 4.2 1.03 -0.08
Securities 1,819.5 -159.0 -8.0 1.53 0.18
1,398.1 -131.9 -8.6 1.34 0.14
Deposits 6,362.5 118.9 1.9 0.02 -
6,295.9 139.5 2.3 0.01 -
1.02 -0.08
Domestictransactions
Deposit and loan direct profit margin fordomestic transactions
Averagebalance Yields
Domestictransactions
Domestictransactions
No. Mar.2017
Mar.2018
Year-on-year
1 88.6 87.7 -0.8
2 79.0 75.6 -3.3Domestic transactions 3 72.9 71.7 -1.2International transactions 4 6.1 3.9 -2.1
5 9.5 12.0 2.4Expenses (-) 6 56.6 56.8 0.1Core business net profit 7 31.9 30.9 -1.0
8 8.9 11.6 2.6Gain and loss on stocks, etc. 9 12.1 11.6 -0.5
Credit costs (-) 10 4.7 2.0 -2.7Others 11 -1.5 -3.2 -1.7
12 3.7 3.3 -0.4Ordinary profit 13 34.5 37.2 2.6Net income 14 25.2 25.5 0.2
15 26.3 27.0 0.7
16 5.1 5.2 0.1
2. All amounts are rounded down to the nearest 100 million yen.
(Note)
Net interest income
Non-interest business profit
Retirement benefits
Consolidated ROE (% )
1. Net income attributable to owners of parent
Core business gross profit
Gain and loss on securities, etc.
Consolidated net income (Note)
Breakdown of changes in core business gross profits
Profit and Loss Average balance and yields (Mar. 2018)
(-3.3)
(Unit: billion yen, %)
III. Business Forecast for the Year Ending March 2018
Value for Tomorrow-14-
Investment trusts, insurance: +0.7Corporate service: +0.6Group credit life insurance: +1.2
Loans Securities International transactions
Non-interest businesses
Effect of the review in the year ended March 2017: +2.6
Domestic transactions
Corporate: -0.04Individuals: -0.08
Effect of the loan to the MOF: -0.02
The Gunma Bank, Ltd.
11.5 12.58
13.3 13.5 13.9 14.5
16.3 16.6
20.6
A Gunma C D E F G H IOperational risk
13.1 13.1
Strategically held stocks
11.9 0.0
Market risk
105.0 73.1
Credit risk 111.5
100.1
Buffer98.1
339.6
Distribution source Distribution capital Mar. risk amount
Common equity and other Tier 1 capital adjusted
for valuation gain and loss
349.7 378.3 417.3 436.7 473.5
63.1 55.257.3 30.2
25.1
13.65% 13.46% 13.37% 12.62% 12.58%
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Tier 1 capital Tier 2 capital Consolidated capital ratio
• The sufficiency of the buffer was verified by a stress test
• The capital level has been prepared assuming a risk
• Acceptable level in comparison to adequacy requirements and also based on a stress test
• However, its level is slightly inferior in comparison with banks that comply with international standards
3,022.8 3,220.93,548.5 3,698.3 3,962.8
9.3% 6.6%10.2% 4.2%
7.1%
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Framework to assess capital adequacy based on risk status and adequacy requirement ratio
<<Assessment>>
<Status of risk (for the year ended Mar. 2017, non-consolidated)>
<<Assessment>>
<<Background on the short-term fall ratio>>
Steady increase in loans (for SMEs, etc.)
(Unit: billion yen)
(Unit: billion yen)
(Unit: billion yen)
<Status of adequacy requirement ratio (end of Mar. 2017, consolidated)>
(Unit: %)
-15- Value for Tomorrow
Capital adequacy assessment Changes in consolidated capital ratio
Bolstering capital (Issuing subordinated bonds)
(%: year-on-year percentage increase)
412.8433.6 474.6 467.0
498.7
Changes in consolidated risks/assets
IV. Status of Capital, etc. The Gunma Bank, Ltd.
Means toincrease capital Term Amount Coupon Issue date
Effect ofincreasing
capital-to-assetratio
Basel III, Tier 2 capitalinstruments 10-year bond 0.40%
(For institutionalinv estors) (NC 5 years ) (L + 0.44% in the f if th y ear and
later)Basel III, Tier 2 capital
instruments 10-year bond 0.50%
(For indiv iduals) (NC 5 years ) (5 y ears SWAP + 0.43% in the f if thy ear and later)
10 billion yen 0.26%
10 billion yen 0.26%
Oct. 28,2016
Apr. 28,2017
776
1,188
Mar.2007
Mar.2008
Mar.2009
Mar.2010
Mar.2011
Mar.2012
Mar.2013
Mar.2014
Mar.2015
Mar.2016
Mar.2017
Mar.2018
■Amount of net assets per share (consolidated, year-end)
Forecast
1.5 times over 10 years
(Unit: yen)
38.4
59.5
Mar.2007
Mar.2008
Mar.2009
Mar.2010
Mar.2011
Mar.2012
Mar.2013
Mar.2014
Mar.2015
Mar.2016
Mar.2017
Mar.2018
■Net income per share (consolidated)
Forecast
(Unit: yen)
1.5 times over 10 years
18.9 18.2
21.6
26.625.2 25.5
20.6 19.8
25.9
28.626.3 27.0
5.04.4
5.35.6
5.1 5.2
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018
Non-consolidatedConsolidatedConsolidated ROE (%)
(Unit: billion yen)
■Changes in profit levels
Fourth
Third
Second
Record-high profit
Forecast
4.9 4.4 5.0 5.4 5.3 5.2
2.0 2.2
9.55.5 4.6 5.0
10.5 9.511.0
12.0 12.0 12.0
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018
Value for Tomorrow
(Unit: billion yen, %)
Commemorative dividend of
1 yenAcquisition associated
with the issuance of convertible bonds: 6.5 40.0%
37.2% 37.0%
67.5%
41.0% 39.7%
Dividend per share (yen)Ratio of return to share holdersShare buy-backsDividends
-16-* Shareholder return policy: Targeting around 40% of non-consolidated net income ≈ (Total dividends + Amount of share buy-back) / Net income
Forecast
■ Status of shareholder return
V. Status of Per Share Indicators and Shareholder Return The Gunma Bank, Ltd.
If you have further inquiries, please contact:
This presentation contains forward-looking statementsconcerning Gunma Bank’s performance.However, such statements do not guarantee the Bank’sfuture performance and contain risks and uncertainties.Please note that the Bank’s future performance may bedifferent from the target figures due to fluctuations in theBank’s management environment and other factors.
Business Management Office (in charge of IR), Corporate Planning Department,The Gunma Bank, Ltd.
(Note) The numbers shown in this document are generally rounded down to the nearest number, or rounded off to the nearest number for the rates of changes.
Inquiries on this matter
HP: http://www.gunmabank.co.jp
The Gunma Bank, Ltd.
May 25, 2017
Data
Value for Tomorrow
Financial Results Briefing Session for the Year Ended March 2017
The Gunma Bank, Ltd.
The Gunma Bank, Ltd.
Page Page
1 Economic Trends in Gunma Prefecture 1 19
2 Economic Trends in Gunma Prefecture 2 20 Changes in the Breakdown of Credit Cost
3 Economic Trends in Gunma Prefecture 3 21
4 Economic Trends in Gunma Prefecture 4 22 Breakdown of Other Securities
5 Changes in Av erage of Earning Assets and Funds Balance 23 Changes in Expenses
6 Changes in Av erage of Earning Assets and Funds Balance (Plan) 24 Capital Distribution
7 Changes in the Rate of Change for Loans (by Region and Type) 25 Branch Office Locations
8 Changes in the Rate of Change for Deposits (by Region and Type) 26 Status of Support for Ov erseas Expansion (Transactions)
9 27 Consolidated Capital Ratio
10 28 Changes in Consolidated Accounting
11 29 Status of Consolidated Subsidiaries
12 30 Rating
13 31 Framework of the Mid-Term Business Plan
14 32 Outline of the Mid-Term Business Plan
15 (1) Numerical Targets for the Plan's Final Year (FY2018)
16 33 (2) Focused Staff Deployment in Key Areas
17 34 (3) Structure of the VT-Plan Targets
18 Appendix Major economic indicators
Changes in the Outstanding Balances of Risk Management Loansand Breakdown of Risk Management Loans by Industry
Changes in the Outstanding Balances of Loans and Deposits (byRegion)Changes in Gunma Bank's Shares in Loans and Deposits in GunmaPrefecture
Category of Borrowers and Classification of Loans (Before Prov ision)
Transition in Borrower Categories
Status of Soundness
Changes in Marketing Capability for Personal Deposit FinancialAssets
Changes in Gunma Bank's Shares in Loans and Deposits in Saitamaand Tochigi Prefectures
Changes in Balances Div ided by Type and Size
Breakdown of Loans (Outstanding Loan by Industry)
Changes in the Rates of Yield and the Profit Margins of Interest Rates
Changes in the Rates of Yield and the Profit Margins of Interest Rates(Plan)
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.
The Gunma Bank, Ltd.
The Gunma Bank, Ltd.
-100
-80
-60
-40
-20
0
20
40
60
80
100
0
10,000
20,000
30,000
40,000
50,000
Mar.2015
Jun. Sep. Dec. Mar.2016
Jun. Sep. Dec. Mar.2017
Common passenger cars Small passenger carsMinivans Year-on-year changeYear-on-year change (Nationwide)
-20
-10
0
10
20
0
20,000
40,000
60,000
80,000
Feb.2015
May Aug. Nov. Feb.2016
May Aug. Nov. Feb.2017
Sales at department stores and supermarkets (includes new stores)
Year-on-year change (includes new stores)
Year-on-year change (Nationwide, includes new stores)
-25.0
-15.0
-5.0
5.0
15.0
25.0
-25.0 -15.0 -5.0 5.0 15.0 25.0
Year-on-year change in shipments
%
%
-125
-100
-75
-50
-25
0
25
50
20
40
60
80
100
120
140
160
Feb.2015
May Aug. Nov. Feb.2016
May Aug. Nov. Feb.2017
Seasonally adjusted indexesYear-on-year change (Gunma: Original index)Year-on-year change (Nationwide: Original index)
%
Economic Trends in Gunma Prefecture 1■ Mining and manufacturing production index
(Year 2010 = 100)
Source: Gunma Prefecture, Ministry of Economy, Trade and Industry* The year-on-year changes of the quarterly figures were taken and plotted on a chart.
Data for Jan./Feb. 2017 are monthly figuresSource: Gunma Prefecture
■ Sales at department stores and supermarkets ■ Sales of passenger cars
Source: Ministry of Economy, Trade and IndustrySources: Japan Automobile Dealers Association, Japan Mini Vehicles Association,
Japan Automobile Dealers Association Gunma Branch, Japan Mini Vehicles Association Gunma Branch
No. of unitsMillion yen
■ Inventory cycle chart
Economic contraction
% %
27/I
25/IV
26/III
29/1
29/2
26/IIEconomic expansion
27/II
Year
-on-
year
cha
nge
in in
vent
ory
-1-
The Gunma Bank, Ltd.
-100-80-60-40-20020406080100120
05,000
10,00015,00020,00025,00030,00035,00040,00045,00050,00055,000
Mar.2015
Jun. Sep. Dec. Mar.2016
Jun. Sep. Dec. Mar.2017
Total contract value Year-on-year change
Year-on-year change (Nationwide)
-200.0
-100.0
0.0
100.0
200.0
300.0
400.0
0
50
100
150
200
250
300
Feb.2015
May Aug. Nov. Feb.2016
May Aug. Nov. Feb.2017
Total floor space (Gunma) Year-on-year changeYear-on-year change (Nationwide)
%
600
800
1,000
1,200
1,400
1,600
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
2014 2015 2016 2017
-160-140-120-100-80-60-40-200204060
0250500750
1,0001,2501,5001,7502,0002,2502,5002,750
Feb.2015
May Aug. Nov. Feb.2016
May Aug. Nov. Feb.2017
Owned houses Houses for rent Houses for installments sale
Year-on-year change Year-on-year change(Nationwide)
Economic Trends in Gunma Prefecture 2■ New housing starts ■ Monthly movements in new housing starts
Source: Ministry of Land, Infrastructure, Transport and TourismSource: Ministry of Land, Infrastructure, Transport and Tourism
■ Total floor space of construction starts (non-residential)
■ Value of public works contracts
Source: Ministry of Land, Infrastructure, Transport and Tourism Source: East Japan Construction Surety Co., Ltd., etc.
No. of houses
-2-
Thousand m2
%
%Million yen
No. of houses
Month
Feb. 2017
The Gunma Bank, Ltd.
-200.0
0.0
200.0
0
10
20
30
40
Mar.2015
Jun. Sep. Dec. Mar.2016
Jun. Sep. Dec. Mar.2017
No. of Bankruptcies Year-on-year
Year-on-year (Nationwide)
98.0
99.0
100.0
101.0
102.0
103.0
Feb.2015
May Aug. Nov. Feb.2016
May Aug. Nov. Feb.2017
General index (Maebashi city) Excluding perishable food
General index (Nationwide)
-40
-20
0
20
40
0.00
0.50
1.00
1.50
2.00
Feb.2015
May Aug. Nov. Feb.2016
May Aug. Nov. Feb.2017
Effective demand-supply ratio of labor forceEffective demand-supply ratio of labor force (Nationwide)No. of new job openings (year-on-year)No. of new job applications (year-on-year)
Economic Trends in Gunma Prefecture 3■ Effective demand-supply ratio of labor force and
number of new job openings and new job applications■ Total overtime hours
Source: Gunma Labour Bureau
* All industries and offices with five employees or moreSources: Ministry of Health, Labour and Welfare, Gunma Prefecture
■ Consumer price index (Year 2015 = 100) ■ Number of bankruptcies
Source: Ministry of Internal Affairs and Communications Source: Teikoku Databank-3-
%Times %
No. of bankruptcies %
-10
0
10
Jan.2015
Apr. Jul. Oct. Jan.2016
Apr. Jul. Oct. Jan.2017
Year-on-year Year-on-year (Nationwide)
%
The Gunma Bank, Ltd.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Firsthalf of2014
Secondhalf of2014
Firsthalf of2015
Secondhalf of2015
Firsthalf of2016
Secondhalf of2016
Construction
Manufacturing
Wholesale/retail
Real estate
Transportation
Service andothers
10.7
4.7
8.3
5.9
9.7
10.8
69
46
57
53
43 41
First half of2014
Second half of2014
First half of2015
Second half of2015
First half of2016
Second half of2016
Total liabilities No. of bankruptcies
Economic Trends in Gunma Prefecture 4■ Number of bankruptcies of Gunma companies
and total liabilities■ Industry breakdown of bankruptcies in Gunma (%)
(*) 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 bankruptcies laws (e.g., Corporate Rehabilitation Law).
(*) First half: April–September, Second half: October–March -4-
(Billion yen)(No. of bankruptcies)
The Gunma Bank, Ltd.
Changes in Average of Earning Assets and Funds Balance(Unit: billion yen)
No. Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Comparisonwith Mar. 2016
1 4,216.1 4,438.3 4,667.7 4,905.6 5,072.1 166.5
2 691.9 751.4 776.9 771.9 685.2 -86.7
3 108.2 110.8 110.7 110.4 114.4 4.0
4 1,640.8 1,694.6 1,775.0 1,882.8 2,016.8 134.0
5 1,581.0 1,702.6 1,830.1 1,964.7 2,087.9 123.2
6 161.2 135.4 119.9 122.9 118.5 -4.4
7 2,002.1 2,053.2 2,119.1 2,053.6 1,978.5 -75.1
8 151.6 151.2 160.7 183.5 140.8 -42.7
9 6,370.0 6,642.8 6,947.6 7,142.9 7,191.6 48.7
No. Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Comparisonwith Mar. 2016
1 5,651.4 5,820.3 5,972.0 6,089.8 6,243.5 153.7
2 4,277.8 4,391.7 4,477.2 4,553.2 4,635.5 82.3
3 1,146.6 1,191.7 1,206.9 1,267.5 1,351.2 83.7
4 3,365.0 3,542.5 3,724.6 3,881.7 4,055.7 174.0
5 2,286.4 2,277.8 2,247.4 2,208.1 2,187.8 -20.3
6 98.7 111.6 95.1 66.1 72.9 6.7
7 375.4 457.2 620.3 743.0 872.6 129.5
8 6,125.6 6,389.2 6,687.4 6,899.1 7,189.2 290.1
*1 Average balances totaled from all domestic branches are shown as breakdowns. Loans to regional public corporations are included in public loans.*2 Average balances totaled from all domestic branches are shown as breakdowns.
Fixed deposits
Call money
Others
Funds in total
(Breakdown: public loans)
(Breakdown: individuals)
(Breakdown: corporations)
Earning assets in total
Liquid deposits
Loans
(Breakdown: large enterprises)
(Breakdown: second-tier enterprises)
*1(Breakdown: SMEs)
(Breakdown: individuals)
*2
Deposits
Securities
Others
-5-
The Gunma Bank, Ltd.
(Unit: billion yen)
No. Mar. 2017 Mar. 2018 Comparison withMar. 2017
1 5,072.1 5,285.3 213.2
2 685.2 624.5 -60.7
3 114.4 110.0 -4.4
4 2,016.8 2,111.4 94.6
5 2,087.9 2,185.0 97.1
6 118.5 203.4 84.9
7 1,978.5 1,819.5 -159.0
8 140.8 133.5 -7.3
9 7,191.6 7,238.4 46.8
No. Mar. 2017 Mar. 2018 Comparison withMar. 2017
1 6,243.5 6,362.5 119.0
2 4,635.5 4,738.7 103.2
3 1,351.2 1,397.5 46.3
4 4,055.7 4,186.1 130.4
5 2,187.8 2,176.4 -11.4
6 72.9 79.1 6.2
7 872.6 940.9 68.3
8 7,189.2 7,382.6 193.4
*2 Average balances totaled from all domestic branches are shown as breakdowns.
*1 Average balances totaled from all domestic branches are shown as breakdowns. Loans to regional public corporations are included in public loans.
Loans
Liquid deposits
Fixed deposits
Call money
Others
Funds in total
*1
*2
(Breakdown: large enterprises)
(Breakdown: second-tier enterprises)
(Breakdown: SMEs)
(Breakdown: individuals)
(Breakdown: public loans)
Securities
Others
Earning assets in total
Deposits
(Breakdown: individuals)
(Breakdown: corporations)
Changes in Average of Earning Assets and Funds Balance (Plan)
-6-
The Gunma Bank, Ltd.
* Totaled from all domestic branches
[All branches]End of
Mar. 2015End of
Sep. 2015End of
Mar. 2016End of
Sep. 2016End of
Mar. 2017[Tochigi
Prefecture]End of
Mar. 2015End of
Sep. 2015End of
Mar. 2016End of
Sep. 2016End of
Mar. 2017
Total loans 5.4 5.0 4.4 3.3 3.6 Total loans 6.0 8.1 9.0 7.9 6.4
Loans toindividuals 7.6 7.5 6.6 6.4 5.9
Loans toindividuals 8.2 7.7 5.7 6.0 5.4
Loans tocorporations 4.4 4.3 3.1 1.5 1.5
Loans tocorporations 3.8 8.1 12.8 10.9 8.1
[GunmaPrefecture]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
[Tokyo, Yokohama,and Osaka]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
Total loans 2.4 2.2 2.5 1.8 1.3 Total loans 4.6 3.5 0.9 -0.6 0.7
Loans toindividuals 3.0 2.5 2.2 2.1 1.3
Loans toindividuals 38.6 38.6 34.3 30.7 27.4
Loans tocorporations 2.6 4.2 3.1 2.1 1.6
Loans tocorporations 0.7 -1.1 -4.3 -6.5 -5.2
[SaitamaPrefecture]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
[New branchoffices]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
Total loans 10.1 9.4 9.1 8.2 7.0 Total loans 24.8 25.0 25.8 27.5 23.2
Loans toindividuals 8.6 8.4 6.7 5.7 5.5
Loans toindividuals 27.9 27.2 23.2 22.3 21.7
Loans tocorporations 11.4 10.2 11.5 10.9 8.6
Loans tocorporations 20.8 22.0 29.9 35.8 25.6
(Unit: %)
Changes in the Rate of Change for Loans (by Region and Type)
-7-
The Gunma Bank, Ltd.
* Totaled from all domestic branches
[All branches]End of
Mar. 2015End of
Sep. 2015End of
Mar. 2016End of
Sep. 2016End of
Mar. 2017[Tochigi
Prefecture]End of
Mar. 2015End of
Sep. 2015End of
Mar. 2016End of
Sep. 2016End of
Mar. 2017
Total deposit 2.3 1.9 2.5 1.8 3.5 Total deposit -0.6 -1.5 -0.7 -0.7 1.1
Deposit toindividuals 1.8 1.8 1.4 1.7 2.9
Deposit toindividuals -0.7 -1.2 -1.3 -0.6 0.7
Deposit tocorporations 6.2 3.1 6.5 5.9 6.1
Deposit tocorporations 0.0 -2.5 1.3 -0.9 2.0
[GunmaPrefecture]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
[Tokyo, Yokohama,and Osaka]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
Total deposit 1.9 2.3 2.4 1.6 3.3 Total deposit 7.0 -3.7 21.9 22.9 10.3
Deposit toindividuals 1.9 2.0 1.7 1.8 2.9
Deposit toindividuals 7.2 10.2 5.3 5.5 9.2
Deposit tocorporations 6.5 4.0 4.8 4.8 5.8
Deposit tocorporations 6.6 -11.1 39.2 40.8 11.6
[SaitamaPrefecture]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
[New branchoffices]
End ofMar. 2015
End ofSep. 2015
End ofMar. 2016
End ofSep. 2016
End ofMar. 2017
Total deposit 3.4 2.6 1.6 1.7 4.0 Total deposit 17.4 25.3 24.7 26.0 26.4
Deposit toindividuals 2.0 1.1 0.7 2.0 3.1
Deposit toindividuals 15.0 21.9 27.4 34.7 27.1
Deposit tocorporations 8.0 7.5 4.9 0.9 6.8
Deposit tocorporations 19.5 27.7 22.4 19.4 25.9
(Unit: %)
Changes in the Rate of Change for Deposits (by Region and Type)
-8-
The Gunma Bank, Ltd.
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Gunma 2,210.7 46.2% 2,242.4 45.8% 2,265.8 45.4% 2,282.0 45.1% 2,294.9 44.4% 29.0 -1.0%
Saitama 901.9 18.9% 939.7 19.2% 983.7 19.7% 1,016.8 20.1% 1,053.0 20.3% 69.3 0.6%
Tochigi 406.3 8.5% 422.8 8.6% 443.0 8.9% 456.5 9.0% 471.4 9.1% 28.3 0.2%
Tokyo,Yokohama,and Osaka
1,166.9 24.4% 1,179.3 24.1% 1,177.7 23.6% 1,171.7 23.2% 1,186.1 22.9% 8.3 -0.7%
Head Office,etc.
96.0 2.0% 109.9 2.3% 123.6 2.4% 130.7 2.6% 170.5 3.3% 46.8 0.9%
Total 4,781.9 100.0% 4,894.4 100.0% 4,994.0 100.0% 5,057.8 100.0% 5,176.0 100.0% 181.9 -
* Totaled from all domestic branches
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Balance Compositionratio
Gunma 4,964.7 81.6% 4,929.6 81.3% 5,083.9 81.5% 5,010.6 81.2% 5,253.6 81.4% 169.6 -0.1%
Saitama 595.5 9.8% 603.3 10.0% 605.3 9.7% 613.6 10.0% 629.3 9.8% 23.9 0.1%
Tochigi 355.1 5.8% 354.2 5.8% 352.6 5.7% 351.5 5.7% 356.3 5.5% 3.7 -0.2%
Tokyo,Yokohama,and Osaka
131.5 2.2% 137.8 2.3% 160.3 2.6% 169.3 2.7% 176.9 2.7% 16.5 0.1%
Head Office,etc.
35.5 0.6% 37.1 0.6% 33.0 0.5% 23.3 0.4% 39.7 0.6% 6.6 0.1%
Total 6,082.5 100.0% 6,062.2 100.0% 6,235.2 100.0% 6,168.4 100.0% 6,455.8 100.0% 220.6 -
* Totaled from all domestic branches
(Unit: billion yen)
DepositsEnd of Mar. 2015 End of Sep. 2015 End of Mar. 2016 End of Sep. 2016 End of Mar. 2017 Compared with Mar.
2016
(Unit: billion yen)
LoansEnd of Mar. 2015 End of Sep. 2015 End of Mar. 2016 End of Sep. 2016 End of Mar. 2017 Compared with Mar.
2016
Changes in the Outstanding Balances of Loans and Deposits (by Region)
-9-
The Gunma Bank, Ltd.
33.9% 34.0% 34.3%
3.8% 3.8% 3.9%4.8% 4.7% 4.7%5.7% 5.8% 5.8%
16.6% 16.9% 16.8%
4.5% 4.5% 4.5%3.2% 3.2% 3.3%
9.8% 9.9% 10.0%
17.5% 17.1% 16.7%
Mar. 2014 Mar. 2015 Mar. 2016
Japan PostBank
Agriculturalcooperatives
Rokin banks
Creditassociations
Shinkin banks
Second-tierregional banks
Major banks
Other regionalbanks
Gunma Bank
37.0% 36.9% 36.8%
9.6% 10.5% 13.3%
7.2% 7.4% 5.2%
8.9% 8.8% 8.8%
22.8% 22.3% 22.0%
5.3% 5.1% 5.0%5.1% 5.0% 5.0%4.1% 4.0% 3.9%
Mar. 2014 Mar. 2015 Mar. 2016
Agriculturalcooperatives
Rokin banks
Creditassociations
Shinkin banks
Second-tierregional banks
Major banks
Other regionalbanks
Gunma Bank
Changes in Gunma Bank’s Shares in Loans and Deposits in Gunma Prefecture
Loans Deposits
(Note) Source: "Financial Map" from an extra number of the "Financial Journal" 2017 edition-10-
The Gunma Bank, Ltd.
Changes in Gunma Bank’s Shares in Loans and Deposits in Saitama and Tochigi Prefectures
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
Loans Deposits
Loans Deposits
4.3%
4.6%
4.9%
26/3 27/3 28/3
1.2% 1.2% 1.2%
26/3 27/3 28/3
7.0%7.2%
7.7%
26/3 27/3 28/3
2.7%
2.6% 2.6%
26/3 27/3 28/3-11-
Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2014 Mar. 2015 Mar. 2016
Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2014 Mar. 2015 Mar. 2016(Note) Source: "Financial Map" from an extra number of the
"Financial Journal" 2017 edition
The Gunma Bank, Ltd.
(Unit: billion yen)
End of Mar. 2013 End of Mar. 2014 End of Mar. 2015 End of Mar. 2016 End of Sep. 2016 End of Mar. 2017
Loans 4,382.6 4,582.2 4,838.8 5,047.3 5,100.0 5,224.2
4,343.7 4,536.7 4,781.9 4,994.0 5,057.8 5,176.0
Corporate 2,571.8 2,628.0 2,715.5 2,781.8 2,776.3 2,808.6
Large enterprises 732.8 750.7 742.7 680.2 611.3 579.1
Second-tier enterprises 108.0 111.6 110.8 108.0 115.4 114.4
SMEs 1,730.9 1,765.6 1,861.9 1,993.6 2,049.5 2,115.0
1,553.2 1,588.7 1,691.6 1,841.9 1,892.8 1,962.1
Public entities 121.3 113.3 108.6 109.5 114.5 106.7
3.2 3.1 2.9 3.0 1.9 2.9
118.1 110.1 105.7 106.5 112.6 103.8
Central government - - - - - 20.9
Individuals 1,650.4 1,777.8 1,912.4 2,039.4 2,100.7 2,159.3
Housing loans 1,596.5 1,720.8 1,850.3 1,972.2 2,031.2 2,087.6
1,105.1 1,185.9 1,250.5 1,285.1 1,293.6 1,300.5
130.2 139.4 158.8 195.1 217.7 240.1
Apartment loans 361.2 395.4 440.9 491.9 519.8 546.9
22.9 26.0 31.6 38.6 41.6 44.8
30.9 30.9 30.4 28.5 27.8 26.8
Cross-border 0.0 17.7 45.2 63.2 66.1 80.3
Overseas branches 38.9 45.4 56.8 53.2 42.2 48.2
Domestic branches
Regional public corporations
Municipal authorities
Housing loan products
Housing-related loans
Unsecured consumer loans
Other loans to individuals
* Excluding strategic branches
Changes in Balances Divided by Type and Size
-12-
The Gunma Bank, Ltd.
(Unit: billion yen, %)
Year-on-year
Of which region total Change Of which region totalComposition
ratio Gunma Saitama Tochigi Gunma Saitama Tochigi
676.4 13.1 450.2 295.6 98.3 56.2 -34.6 0.4 -3.9 2.8 1.5
8.1 0.2 8.1 6.5 0.7 0.8 0.1 0.1 0.1 -0.0 0.0
1.9 0.0 0.0 0.0 - - 0.0 0.0 0.0 - -
3.2 0.1 2.9 1.8 0.5 0.5 -0.3 -0.3 -0.2 -0.0 -0.1
177.9 3.5 156.0 109.4 30.5 16.0 3.3 6.1 0.6 3.6 1.8
47.8 0.9 28.0 19.6 2.7 5.6 5.9 5.0 3.2 0.3 1.5
23.2 0.5 10.6 8.4 1.6 0.6 -1.3 -0.4 -0.6 0.1 0.0
150.7 2.9 108.1 61.9 35.7 10.4 2.4 9.0 4.3 3.6 1.0
438.2 8.5 335.8 205.4 90.4 39.8 -15.8 -4.3 -7.7 4.6 -1.1
158.4 3.1 5.8 3.8 1.0 0.9 -20.7 0.4 0.3 -0.0 0.1
632.5 12.3 356.5 167.6 139.2 49.7 56.6 40.5 16.5 17.1 6.8
264.6 5.1 207.7 125.6 66.9 15.0 21.9 9.7 4.3 6.2 -0.8
228.6 4.4 203.4 132.4 49.2 21.6 9.8 8.5 0.6 2.5 5.3
103.8 2.0 103.8 95.2 5.2 3.2 -2.7 -2.7 -2.3 0.4 -0.7
2,239.1 43.4 1,841.9 1,060.9 530.4 250.4 136.2 54.5 13.8 27.8 12.8
5,155.0 100.0 3,819.3 2,294.9 1,053.0 471.4 160.9 126.7 29.0 69.3 28.3
* Totaled from all domestic branches
Real estate and goods rental
March 31,2017
(domesticbranches)
Manufacturing
Agriculture and forestry
Fishery
Mining, quarrying, and gravel-digging
Construction
Healthcare and public w elfare
Other services
Municipal authorities
Others
Total
Electricity , gas, heat supply , and waterworks
Information communications
Transport and postal services
Wholesaling and retailing
Finance and insurance
Breakdown of Loans (Outstanding Loan by Industry)
-13-
The Gunma Bank, Ltd.
Changes in the Rates of Yield and the Profit Margins of Interest Rates
-14-
(Unit: %)
No.
1 1.28 1.23 1.20 1.18 -0.02
(Breakdown: domestic earning assets yield) 2 ( 1.26 ) ( 1.19 ) ( 1.15 ) ( 1.10 ) ( -0.05 )
Loans yield 3 1.38 1.28 1.20 1.12 -0.08
4 ( 1.38 ) ( 1.29 ) ( 1.20 ) ( 1.11 ) ( -0.09 )
Securities yield 5 1.12 1.14 1.25 1.35 0.10
6 ( 1.07 ) ( 1.07 ) ( 1.18 ) ( 1.20 ) ( 0.02 )
Deposit cost 7 0.03 0.03 0.03 0.02 -0.01
(Breakdown: domestic deposit cost) 8 ( 0.03 ) ( 0.03 ) ( 0.03 ) ( 0.01 ) ( -0.02 )
Funding cost 9 0.05 0.05 0.06 0.08 0.02
(Breakdown: domestic funding cost) 10 ( 0.03 ) ( 0.03 ) ( 0.03 ) ( 0.01 ) ( -0.02 )
Ratio of expenses 11 0.97 0.94 0.89 0.86 -0.03
3-7 12 1.35 1.25 1.17 1.10 -0.07(Breakdown: domestic deposit andloan direct profit margin) 4-8 13 ( 1.35 ) ( 1.26 ) ( 1.17 ) ( 1.10 ) ( -0.07 )
Overall direct profit margin 1-9 14 # 1.23 # 1.18 # 1.14 # 1.10 -0.04(Breakdown: overall domestic directprofit margin) 2-10 15 ( 1.23 ) ( 1.16 ) ( 1.12 ) ( 1.09 ) ( -0.03 )
Overall profit margin 16 0.33 0.31 0.32 0.32 -
17 ( 0.30 ) ( 0.26 ) ( 0.27 ) ( 0.27 ) ( - )
* Domestic: domestic operation division. Profit margins and changes are calculated on the table.
(Breakdown: domestic loans yield)
Deposit and loan direct profit margin
(Breakdown: overall domestic profit margin)
Compared withMar. 2016Change
Mar. 2016Mar. 2015Mar. 2014 Mar. 2017
Earning assets yield
(Breakdown: domestic securities yield)
The Gunma Bank, Ltd.
No.
Earning assets yield 1 1.18 1.17 -0.01
(Breakdown: domestic earning assets yield) 2 ( 1.10 ) ( 1.07 ) ( -0.03 )
Loans yield 3 1.12 1.06 -0.06
(Breakdown: domestic loans yield) 4 ( 1.11 ) ( 1.03 ) ( -0.08 )
Securities yield 5 1.35 1.53 0.18
(Breakdown: domestic securities yield) 6 ( 1.20 ) ( 1.34 ) ( 0.14 )
Deposit cost 7 0.02 0.02 -
(Breakdown: domestic deposit cost) 8 ( 0.01 ) ( 0.01 ) ( - )
Funding cost 9 0.08 0.12 0.04
(Breakdown: domestic funding cost) 10 ( 0.01 ) ( 0.01 ) ( - )
Ratio of expenses 11 0.86 0.85 -0.01
Deposit and loan direct profit margin 3-7 12 1.10 1.04 -0.06(Breakdown: domestic deposit and loandirect profit margin)
4-8 13 ( 1.10 ) ( 1.02 ) ( -0.08 )
Overall direct profit margin 1-9 14 1.10 1.05 -0.05(Breakdown: overall domestic directprofit margin)
2-10 15 ( 1.09 ) ( 1.06 ) ( -0.03 )
Overall profit margin 16 0.32 0.27 -0.05
17 ( 0.27 ) ( 0.26 ) ( -0.01 )
* Domestic: domestic operation division. Profit margins and changes are calculated on the table.
Mar. 2017 Mar. 2018(Projection)
Compared with Mar. 2017Change
(Unit: %)
(Breakdown: overall domestic profit margin)
Changes in the Rates of Yield and the Profit Margins of Interest Rates (Plan)
-15-
The Gunma Bank, Ltd.
(Unit: billion yen)
Classification
Not classified Classification II Classification III Classification IV
Bankrupt borrowers
4.4 5.1 6.5 1.6 12.9
Virtually bankrupt borrowers (1.6) (12.9)
21.715.8 7.4 10.9
34.2 (4.5)
12.0 35.5
47.6
92.6 178.4
271.0
4,916.7 4,916.7(1.8)
Total Not classified Classification II Classification III Classification IV
* The Gunma Bank does not apply the partial direct write-off method.
12.5 12.9
(3.8)
(9.3)
5,295.8 5,042.3 228.0
Borrowers threatened with bankruptcy
Borrowers requiring special attention
Borrowers requiring attention other thanborrowers requiring special attention
Normal borrowers
Specific provision for possible loan losses are shown in parentheses.
Borrower categories employed in self-
assessment
Borr
ow
ers
requ
irin
g
atte
ntion
General provision for possible loan losses are shown in parentheses.
Category of Borrowers and Classification of Loans (Before Provision)
-16-
The Gunma Bank, Ltd.
(21,531) (19,326) (993) (53) (24) (18) (8) (1,109) (1,102) (7) - (1,096)
2,610.6 2,506.1 35.2 8.2 1.9 3.5 0.6 55.0 54.8 0.1 - 49.5
(5,825) (967) (4,303) (43) (60) (44) (16) (392) (386) (6) (967) (163)
202.4 36.5 151.1 5.8 2.2 1.1 0.5 5.0 4.9 0.0 36.5 9.7
(505) (22) (45) (369) (40) (8) (1) (20) (20) - (67) (49)
94.2 8.4 5.0 74.4 4.1 1.2 0.0 0.8 0.8 - 13.4 5.4
(725) - (35) (16) (555) (43) (5) (71) (60) (11)
30.1 - 1.3 2.5 22.2 2.3 0.3 1.3 1.1 0.1
(376) - (2) (1) (7) (213) (13) (140) (90) (50) (54) -
18.0 - 0.0 0.8 0.4 11.8 1.3 3.4 1.4 1.9 4.7 -
(76) - - - - - (35) (41) (11) (30)
5.0 - - - - - 3.0 1.9 0.5 1.4
(29,038) (20,315) (5,378) (482) (686) (326) (78) (1,773) (1,669) (104) (1,088) (1,308)
2,960.6 2,551.0 192.9 91.8 31.0 20.0 5.9 67.7 63.8 3.8 54.8 64.7(Note 1. What is show n here is transition in borrow er categories from the end of March 2016 to the end of March 2017.
Borrow ers w ith no outstanding balances at the end of March 2017 are not included.
(Below borrowers threatenedwith bankruptcy)
Breakdown:full
Recovery/repayment
Breakdown:sale and
write-off ofloans
Mar
ch 2
016
Normalborrow ers
Expected loss①
Expected loss②
Borrowersthreatened with
bankruptcy
(The numbers of borrowers are shown in parentheses in the upper columns, and the amounts are shown in billions of yen in the lower columns.)
2. Outstanding balances are calculated based on self-assessments, including loans, acceptances and guarantees, and foreign exchanges (excluding overseas balances, government/municipal authorities, and individual borrow ers).
Virtuallybankruptborrowers
Bankruptborrow ers
Total
March 2017 Total
Normalborrowers
Down-grade
Those w ith outstanding balances not calculated based on self-assessments are aggregated into the "Normal" category.3. "Others" are borrow ers w ho have resolved outstanding balances in FY2016 by full collection or repayment, f inal disposal (such as sale of loans), or other means.
4. Expected loss classif ication ① consists of borrow ers requiring attention other than special attention, excluding those w ith realistic, comprehensive business reconstruction plans. Expected loss classif ication ② consists of borrow ers requiring attention other than special attention w ho have realistic, comprehensive business reconstruction plans and borrow ers requiring special attention.
Expectedloss②
Borrowersthreatened
withbankruptcy
Virtuallybankruptborrowers
Bankruptborrowers
Expectedloss①
Others Upgrade
Transition in Borrower Categories
-17-
The Gunma Bank, Ltd.
2.17 2.27 2.03
1.90 1.81
1.72 1.89
1.75 1.62 1.56
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Prior-application of partial direct write-off
Post-application of partial direct write-off
0.32
0.23 0.22 0.19
0.17 0.10 0.05 0.05 0.05
0.05
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Ratio of housing loan borrowers delayed in repayments
Ratio of housing loans repaid in substitution
〇 Changes in ratio of risk management loans
Mar.2013
Mar.2014
Mar.2015
Mar.2016
Mar.2017
Prior-application of partialdirect write-off
2.17 2.27 2.03 1.90 1.81
Post-application of partialdirect write-off
1.72 1.89 1.75 1.62 1.56
(Unit: %)
* The Gunma Bank does not apply the partial direct write-off method.
Mar.2013
Mar.2014
Mar.2015
Mar.2016
Mar.2017
Ratio of housing loan borrow ersdelayed in repayments 0.32 0.23 0.22 0.19 0.17
Ratio of housing loans repaid insubstitution 0.10 0.05 0.05 0.05 0.05
(Unit: %)
〇 Changes in ratio of housing loan borrowers delayed in repayments and the ratio of housing loans repaid in substitution
Status of Soundness
-18-
The Gunma Bank, Ltd.
24.9
15.3
12.311.3
11.1
25.1
Manufacturing industryWholesaling industry and retailing industryOther service industryHealthcare and public welfareReal estate industry, goods rental industryOthers
31.9 34.8 33.7 31.9 32.8
0.7 0.7 1.0 1.0 1.5
59.9 60.7 55.7 53.9 55.9
5.5 5.15.3 5.3 4.4
98.3 101.595.9 92.2 94.7
Mar. 2015 Sep. 2015 Mar. 2016 Sep. 2016 Mar. 2017
Loans to borrowers under bankruptcy proceduresDelinquent loansLoans past due three months or moreRestructured loans (with eased lending terms and conditions)
Changes in the Outstanding Balances of Risk Management Loans and Breakdown of Risk Management Loans by Industry
Change in outstanding balances of risk management loans
(Unit: billion yen)
Breakdown of risk management loans by industry (March 2017)
(Unit: %)
* The ratio of risk management loans to total loans is 1.81%.
The Gunma Bank does not apply the partial direct write-off method.
-19-
The Gunma Bank, Ltd.
1.0 -2.9 0.2
-4.6 0.4
4.6 9.5
1.6 4.1 4.3
5.7 6.5
1.9
-0.5
4.7
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Transfer to general provision for possible loan losses Others Credit cost (Unit: billion yen)
(Unit: billion yen, %)
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Credit cost 5.7 6.5 1.9 -0.5 4.7
1.0 -2.9 0.2 -4.6 0.4
Others 4.6 9.5 1.6 4.1 4.3
Write-off of loans 0.0 0.0 0.1 0.3 0.0 Transfer to specif ic provision for possible loan losses 3.7 7.7 0.9 3.1 3.5 Transfer to reserve for contingent losses 0.1 0.5 -0.0 -0.1 -0.0
Loss on sales of loans 0.4 0.8 0.3 0.4 0.4 Burden charges, etc. under the Responsibility-sharing System of Credit Guarantee Corporations
0.2 0.3 0.2 0.2 0.2
0.0 0.0 0.0 0.0 0.0
4,382.6 4,582.2 4,838.8 5,047.3 5,224.2
0.13 0.14 0.04 - 0.09 Credit cost ratio
Transfer to general provision for possible loan losses
Gain on the collection of claims written-off (-)
Loans
Changes in the Breakdown of Credit Cost
-20-
The Gunma Bank, Ltd.
○ Balance (Unit: billion yen)
End of Mar. 2015 End of Sep. 2015 End of Mar. 2016 End of Sep. 2016 End of Mar. 2017
871.2 842.7 852.6 821.9 812.3
Investment trust 265.7 254.9 259.6 244.6 253.3
Pension insurance, etc. 483.0 483.3 499.7 495.8 489.7
Public bonds (JGBs) 122.4 104.4 93.3 81.5 69.2
- - - - 2.8
○ Sales amounts (Unit: billion yen)
Mar. 2015
Second half First half Second half First half Second half
98.1 90.6 56.5 32.1 47.4
Investment trust 55.4 64.1 33.9 19.5 32.9
Pension insurance, etc. 42.6 26.5 22.6 12.6 14.5
- - - - 2.6Intermediation by Gungin Securities
Mar. 2016 Mar. 2017
Balance of marketing capability fordeposit financial assets
Sales amount for marketing capabilityfor deposit financial assets
Intermediation by Gungin Securities
Changes in Marketing Capability for Personal Deposit Financial Assets
-21-
The Gunma Bank, Ltd.
Mar. 2016 Mar. 2017 Mar. 2016 Mar. 2017
Other securities 1,956.5 1,922.2 -34.2 161.5 153.4 -8.1
Domestic transactions 1,532.6 1,472.2 -60.3 147.5 148.0 0.4
Government bonds 550.2 409.3 -140.9 16.9 11.4 -5.5
Municipal bonds 555.0 563.6 8.6 17.9 13.5 -4.4
Corporate bonds 264.9 269.3 4.3 2.9 1.7 -1.2
Stocks 86.5 96.8 10.3 94.8 112.7 17.9
Investment trusts 74.9 132.1 57.2 14.8 8.5 -6.3
International transactions 423.9 450.0 26.0 13.9 5.4 -8.5
378.9 401.9 23.0 14.0 4.9 -9.0
Other yen-denominated securities 21.1 14.1 -6.9 0.1 0.0 -0.0
Other Euroyen securities 11.8 10.0 -1.8 0.0 0.0 -0.0
Foreign-currency government bonds 219.3 212.3 -6.9 5.4 1.3 -4.1
Other foreign-currency securities 106.0 149.4 43.4 0.8 0.5 -0.2
Foreign-currency investment trusts 20.6 15.9 -4.7 7.5 2.9 -4.5
45.0 48.0 3.0 -0.0 0.4 0.4
Other foreign-currency securities 45.0 48.0 3.0 -0.0 0.4 0.4
Foreign securities (NY Branch)
Amortized cost (book v alue afteramortization) Change
Valuation difference (profit/lossfrom v aluation) Change
(Unit: billion yen)
Foreign securities (domestic branches)
Breakdown of Other Securities
-22-
The Gunma Bank, Ltd.
58.9 57.8 58.3 56.7 56.6
93.2 91.5 92.2 91.6 88.6
63.3 63.2 63.2 61.9 64.0
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Expenses Core business gross profit OHR
(Unit: billion yen, %)
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
58.9 57.8 58.3 56.7 56.6Personnel expense 32.3 32.7 32.4 32.4 32.0Non-personnel expense 24.4 22.9 23.5 21.7 21.3Tax 2.1 2.1 2.3 2.5 3.2
93.2 91.5 92.2 91.6 88.663.3 63.2 63.2 61.9 64.0
①Expenses
②Core business gross profit
OHR (①/②)
Changes in Expenses
-23-
The Gunma Bank, Ltd.
(Unit: billion yen)Change
Forecast riskamount
Capital to bedistributed A
Compositionratio
Capital to bedistributed B
Compositionratio A-B
Credit risk 97.2 116.3 32.8% 111.5 32.8% 4.8
Total market risks 79.9 101.3 28.6% 105.0 30.9% -3.7
28.8 39.8 11.2% 40.9 12.0% -1.1
Market risk (trading) 0.6 0.6 0.2% 0.7 0.2% -0.1
50.5 60.9 17.2% 63.4 18.7% -2.5
0.0 4.4 1.2% 11.9 3.5% -7.5
13.1 13.1 3.7% 13.1 3.9% 0.0
Total capital distribution ・・・ (a) 190.2 235.1 66.3% 241.5 71.1% -6.4
Distribution source ・・・ (b) - 354.6 100.0% 339.6 100.0% 15.0
Buffer (b) - (a) - 119.5 33.7% 98.1 28.9% 21.4
Risk categoriesFirst half 2017 Second half 2016
Market risk (investment securities shares,investment trusts, etc.)
Market risk (loans and deposits, bonds,etc.)
Operational risk
Strategically held stocks
Capital DistributionThe distribution source for the first half of 2017 is "Common equity and other Tier 1 capital adjusted for valuation gain and loss" as of the end of September 2016.
A sufficient buffer is secured in preparation for unexpected economic environment changes, disaster risk, etc. (33.7%)
-24-
The Gunma Bank, Ltd.
103branches
23
10
18
1 3 1 1GunmaSaitamaTochigiNaganoTokyoChibaKanagawaOsakaOverseas
Branch office Branch office
Branch Sub branch Branch Sub branch
Gunma 103 87 16 103 87 16
Saitama 23 23 0 23 23 0
Tochigi 10 9 1 10 9 1
Nagano 1 1 0 1 1 0
Tokyo 7 7 0 8 8 0
Chiba 1 1 0 1 1 0
Kanagawa 3 3 0 3 3 0
Osaka 1 1 0 1 1 0
Overseas 1 1 0 1 1 0
Total 150 133 17 151 134 17
Conv enience storesATMs
(Unit: location)
End of Mar. 2016 End of Mar. 2017
47,18445,441
Branch Office Locations〇Extensive branch network—151 branches including overseas
The Adachi Branch (Tokyo) will be opened in July 2017.
-25-
The Gunma Bank, Ltd.
General banking transactions
Financial and security services
Provision of information
Provision of information
New York Branch
Gunma Finance (Hong Kong) Limited
Shanghai Representative Office
Bangkok Representative Office
Overseas Business Support OfficeSupport for international operations (trade transactions,support for overseas expansion, proposal for hedgingexchange risks, etc.)
Status of Support for Overseas Expansion (Transactions)Seminars, overseas inspection tours, business
conventions (Second half 2016)
<In Japan>December 2016 Conducting a Seminar on the Latest Currency MovementJanuary 2017 Conducting a Seminar on Overseas M&A<Outside Japan>December 2016 Conducting a 2016 Regional Bank Joint Seminar and Networking
Event in Guangzhou, ChinaFebruary 2017 Dispatching an Observation Group for the Investment
Environment in Ho Chi Minh, Vietnam Conducting a Business Talks and Networking Event in Hong
Kong Conducting a China Business Seminar and Networking Event by
Three Regional Banks in the Kanto Region Conducting a 2017 FBC Hanoi Manufacturing Business Fair
Increased number of business alliances (FY 2016)
May 2016 Alliance with Japan International Training Cooperation
Organization (JITCO)September 2016 Alliance with the State of Guanajuato of Mexico Alliance with the State of Nuevo León of Mexico Alliance with Banamex Bank of MexicoNovember 2016 Alliance with Japan International Cooperation Agency (JICA)
<U.S.>New York Branch (12 employees)
Overseas offices
Business partners(Excerpts)
Shanghai Representative Office (2 persons)
Gunma Finance (Hong Kong) Limited(5 persons)
<China>Hong Kong and Shanghai Banking
Corporation (HSBC), andIndustrial and Commercial Bank of
China
<Indonesia>Bank Negara Indonesia (Persero) Tbk. (1 person)
<Hong Kong>Hong Kong Trade
Development Council
Overseas Business Support Office (8 persons)
<India>State Bank of India
<Vietnam>Vietnam Export-Import
Commercial Joint-Stock BankBank for Investment and Development of Vietnam
<Philippines>Metrobank
<Singapore>United Overseas Bank Limited
Japan Bank for International Cooperation (JBIC)
Japan International Training Cooperation Organization (JITCO)
Japan International Cooperation Agency (JICA)
Gunma Prefecture
Bangkok Representative Office (2 persons)
<Thailand>Kasikorn Bank (1 person)
Bangkok Bank
Ceremony for opening the Bangkok Representative Office in August 2016
<Mexico>Banamex Bank
State of AguascalientesState of Jalisco, State of
Guanajuato, State of Nuevo León
-26-
The Bangkok Representative Office is located on the 16th floor of the Bhiraj Tower in Thailand
Value for Tomorrow
Overseas expansion support system
The Gunma Bank, Ltd.
(Unit: billion yen)
Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
433.6 474.6 467.0 498.7
378.3 417.3 436.7 472.7
19.5 59.9 69.0 93.3
- - - 0.7
55.2 57.3 30.2 25.1
57.5 60.3 33.1 15.8
3,220.9 3,548.5 3,698.3 3,962.8
Consolidated total capital ratio 13.46% 13.37% 12.62% 12.58%11.74% 11.76% 11.81% 11.94%
11.74% 11.76% 11.81% 11.93%
Total capital
Consolidated Tier 1 ratio
Consolidated common Equity and other Tier 1 ratio
Basel III (Interim measures considered)
Common Equity and other Tier 1 capitalCumulative amounts of othercomprehensive income
Other Tier 1 capital
Tier 2 capitalCumulative amounts of othercomprehensive income
Risk weighted assets
Consolidated Capital Ratio
-27-
378.3 417.3 436.7
472.7
11.74% 11.76%11.81%
11.93%
Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Common Equity and other Tier 1 capital Consolidated common Equity and other Tier 1 ratio
The Gunma Bank, Ltd.
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017
Ordinary income Billion yen 128.8 130.5 130.2 136.2 144.1
Ordinary profit Billion yen 33.4 35.7 39.0 43.6 36.5
Net income attributableto owners of parent
Billion yen 20.6 19.8 25.9 28.6 26.3
Comprehensive income Billion yen 58.1 33.4 79.3 -5.3 27.9
Amount of net assets Billion yen 445.7 467.7 523.5 507.7 526.1
Total assets Billion yen 6,844.8 7,141.6 7,550.9 7,631.5 7,986.5
Amount of net assetsper share
Yen 935.59 988.84 1,146.98 1,126.44 1,187.51
Net income per share Yen 43.37 42.58 56.37 63.78 59.46
Diluted net income pershare
Yen 43.35 42.53 56.30 63.68 59.36
Changes in Consolidated Accounting
-28-
The Gunma Bank, Ltd.
(For the year ended March 2017)
Gunma Chuo Kogyo Co., Ltd.
Transportation, collection and delivery ofgoods, and the maintenance, operation andmanagement services for automatic tellermachines
735 -11 22 -19 14 -14
Gungin Securities Co., Ltd. Security services 292 - -214 -182 -216 -183
Gunma Finance (Hong Kong)Limited
Deposits, loans, foreign exchange services,fund transfer transactions, securities andother finance-related services
179 -10 38 16 36 14
Gungin Leasing Co., Ltd. Acquisition and leasing of movable property 23,144 1,099 385 -1,235 156 -925
Gunma Credit Guarantee Co.,Ltd.
Guarantee services 2,521 -20 1,836 -248 1,194 -142
* Gungin Securities Co., Ltd. started business in October 2016.
Year-on-year
Ordinaryprofit
Netincome
(Unit: million yen)
Company name Main business Sales Year-on-year
Year-on-year
Status of Consolidated Subsidiaries
-29-
The Gunma Bank, Ltd.
(As of May 2017)
Rating Agency
Name of Bank
Gunma Bank
Bank of Yokohama
Chiba Bank
Shizuoka Bank
Bank of Fukuoka
Joyo Bank
77 Bank
Nishi-Nippon City Bank
Bank of Kyoto
Hiroshima Bank
Hachijuni Bank
* Long-term ratings by Moody's Corp. indicate those for deposits.
AA-
A- A+ AA
A+
A+
A+
AA
AA-
A+
A+
A+
A+
AA
A
A3
A2
A A-1
A-1
P-2
A
A-2
A-2
A-1
A-1
A
A+
A-
P-1
P-1
P-1
R&I
P-1
AA-
AA-
AA
JCRShort-term
Moody's
Long-term
S&P
Long-term Short-term
A2 P-1
Baa1
A1
A1
A1
P-2
Rating
-30-
The Gunma Bank, Ltd.
We will face squarely the diverse needs of the regional community and customers and provide truly helpful financial solutions, thereby aiming to become a regional financial group that takes a step forward together with them to the next stage.
We will continue with our growth strategy centering on bolstering retail loans and will further develop value-added proposal actions, thereby helping the regional community and customers to grow.
Further development New endeavors <Continuation of the growth strategy and
further development of value-added proposals>
<Expansion of business domains and deployment of group capabilities>
Through the reinforcement of fee-based businesses by way of bank-brokerage collaborations, the overhaul of the consulting-based sales structure, and the strategic use of Fin-tech, we will aim to secure diverse revenue sources as a regional financial group.
Inheriting "value-added proposals," which is the basic concept of 2013 Mid-term Business Plan "V Plan," we are aiming to construct a sustainable business model for tomorrow by creating new revenue opportunities, and have named the plan "Value for Tomorrow." Taking the first letters, the plan will be internally called the "VT-Plan."
: 2016 Mid-term Business Plan "Value for Tomorrow," or value-added proposals for tomorrow
Name
Plan period
What we aspire to be
Strategic themes
: April 2016 to March 2019 (three years)
: A regional financial group that helps the regional community and customers look forward to tomorrow and to grow together with them
Internal name: VT-Plan
Framework of the Mid-Term Business Plan
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The Gunma Bank, Ltd.
(1) Numerical Targets for the Plan’s Final Year (FY2018)
(*) The retail loans outstanding at year-end is the total sum of loans to SMEs (excl. loans to regional public corporations and Tokyo/Osaka Branch accounts) and to individuals.
Reference: Interest scenario at the time of the formulation of the mid-term business plan(Unit: %)
Outlook for domestic rates• ST rates to remain low. No increase in ST prime rate.• LT rates to rise moderately in response to stimulus
measures.
Outlook for US dollar rates• Moderate increases in both ST and LT rates.
Outline of the Mid-Term Business Plan
-32-
Feb. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Apr. 2019 Compared toFeb. 2016
Policy rate (overnight) 0.000 0.250 0.250
10-year JGB 0.040 0.190 0.395 0.595 0.825 0.785
ST prime rate 1.975 2.225 0.250
US dollar policy rate 0.500 0.750 1.250 1.500 1.000
Growth potential index
Mar. 2017
Status of soundnessindex 12 % level 11.9 %
Efficiency index 65 % level 62.0 %
Profitability indices 28.0 bil yen 26.3
bil yen
5 % level 5.1 %
bil yen
18.0 bil yen 14.1 bil yen
Item Target
4,350.0 bil yen 4,121.4Retail loans outstanding at year-end (*)
Non-interest business profit (consolidated)
Net income (consolidated)
ROE (consolidated)
OHR (consolidated)
Common equity Tier 1 ratio (consolidated)
The Gunma Bank, Ltd.
Loans to SMEs
Loans to individuals
Unsecured consumerloans
Marketing capability fordeposit financial assets
(consolidated)
Retail loans outstanding at
year-end4,350 bil yen
(Plan's final year)
Non-interest business profit(consolidated)
18 bil yen(Plan's final year)
Bolstering corporate service fees
Boosting foreign exchange service revenues
Promoting protection-oriented insurance
Boosting base service commissions
○ Setting branch offices that promoteretail loans
○ Overhaul of sales structure based onregional strategy
○ Efficient promotion of housing loansat loan stations
○ Bolstering of the team to promoteapartment loans
○ Improvement of products
○ Enhancement of non-face-to-faceservices
○ Bolstering asset management-oriented sales
○ Establishment of Gungin Securitiesand bank-brokerage collaboration
○ Establishment of the team to promotecorporate customer consulting
○ Provision of optimal solutions based on evaluation of customers' businesspotentials
○ Establishment of loan/insurance consulting plaza
○ Fostering core customer relationships
○ Streamlining existingbranches
○ Overhaul of HQ organization
○ Promotion of BPR
○ Revamping HR systems
○ Promotion of diversifiedpersonnel
○ Development and deployment of personnelwith expert knowledge
Organizational/operational efficiency
Enhancing staff capabilities by supporting and promoting their
activities
Numerical targets and key measuresMeasures for focused staff deployment
Approx. 100 employees
Approx. 130 employees
Approx. 130 employees
Approx. 100 employees
-33-
Outline of the Mid-Term Business Plan(2) Focused Staff Deployment in Key Areas
The Gunma Bank, Ltd.
96.0
-1.5
0.7Core business
gross profit
Core businessgross profit
-0.5 -0.9
-3.5
-3.0
Transactions Domestic loans Domestic securities Internationaltransactions Non-interest businesses Total
Change 1.0 -3.0 -4.0 3.0
1.7
-3.71.8-2.3
1.3
1.1
0.5
28.0Net income
28.6Net income
93.01.5
0.2
0.2
0.2
0.2
Large/second-tier enterprises
SMEs Housing loansHousing f und
Apartment loans
Unsecured loans Bonds
Equity inv estment trusts Loans
Securities
Base serv ice commissions
Corporate serv ice f ees
Deriv ativ es
Marketing capability f or deposit f inancial assets
Gungin Securities
Gunma Credit Guarantee
Gungin Leasing
Serv ice expenses(Guarantee f ees)
(3) Structure of the VT-Plan Targets(Unit: billion yen)
(Structure of consolidated core business gross profit)
<<March 2019>>
<< March 2016>>
OHR (65%)
Core business net profit (32.5)
Other profit/loss (7.5)
↓
↓
+
-34-
Outline of the Mid-Term Business Plan
If you have further inquiries, please contact:
This presentation contains forward-looking statementsconcerning Gunma Bank’s performance.However, such statements do not guarantee the Bank’sfuture performance and contain risks and uncertainties.Please note that the Bank’s future performance may bedifferent from the target figures due to fluctuations in theBank’s management environment and other factors.
Business Management Office (in charge of IR), Corporate Planning Department,The Gunma Bank, Ltd.
(Note) The numbers shown in this document are generally rounded down to the nearest number, or rounded off to the nearest number for the rates of changes.
Inquiries on this matter
HP: http://www.gunmabank.co.jp
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