Hokuhoku Financial Group, Inc. · TSE:8377

Hokuhoku Financial — FY2012 Earnings Presentation

81 slides from Hokuhoku Financial's earnings presentation, May 2013

1. Slide 1: Investor Meeting: Financial Results for FY 2012

   Investor Meeting ～Financial Results for FY 2012～ (ended March 31, 2013)

2. Slide 2: Table of Contents

   Table of Contents Hokuhoku Financial Group,Inc. 【Summary of Financial Results for FY 2012】 ・Summary of Financial Results Ⅰ-① (P/L:consolidated) 1 ・Breakdown of Business Profits③～G&A expenses 15 ・Summary of Financial Results Ⅰ-② (P/L:each bank) 2 ・Net Gains (Losses) related to Securities 16 ・Summary

3. Slide 3: Summary of Financial Results I-① P/L Consolidated and Total of two banks

   Summary of Financial Results Ⅰ-① Hokuhoku Financial Group,Inc. ＜P/L : Consolidated and Total of two banks＞ (JPY Bn) 【Consolidated】 FY2012 change FY2011 【Consolidated】 Ordinary income 199.1 (8.8) 207.9 Ordinary profits 29.3 (9.5) 38.8 Net income: ¥18.1Bn Net income [A] 18.1 3.9 14.1 +¥3.9Bn compared

4. Slide 4: Summary of Financial Results I-② P/L each bank

   Summary of Financial ResultsⅠ-② Hokuhoku Financial Group,Inc. <P/L : Non-Consolidated, each bank> Hokuriku Bank (JPY Bn) Hokkaido Bank (JPY Bn) FY2012 change FY2011 FY2012 change FY2011 Core gross business profits 82.3 (6.1) 88.5 63.1 (4.6) 67.8 Net interest income 69.9 (3.5) 73.5 54.3 (3.2) 57.6 Ne

5. Slide 5: Summary of Financial Results II-① B/S Consolidated and Total of two banks

   Summary of Financial Results Ⅱ-① Hokuhoku Financial Group,Inc. <B/S : Consolidated and Total of two banks> (JPY Bn) 【Total of two banks】 Mar-13 Mar-12 change 【Total of two banks】 Loans 7,402.0 115.0 7,287.0 Loans to SMEs & individuals 4,692.5 (72.4) 4,765.0 ・Loans: +¥115.0Bn compared to Mar-12 …Loan

6. Slide 6: Summary of Financial Results II-② B/S each bank

   Summary of Financial Results Ⅱ-② Hokuhoku Financial Group,Inc. <B/S : Non-Consolidated, each bank> Hokuriku Bank (JPY Bn) Hokkaido Bank (JPY Bn) Mar-13 Mar-12 Mar-13 Mar-12 change change Loans 4,332.7 98.8 4,233.9 3,069.3 16.2 3,053.0 Loans to SMEs & individuals 2,797.5 (28.9) 2,826.5 1,895.0 (43.4)

7. Slide 7: Core net business profits / Net business profits / Ordinary profits / Net income

   Core net business profits/ Net business profits Hokuhoku Financial Group,Inc. before credit costs/Ordinary profits/Net income 【Core net business profits/Net business profits before credit costs /Ordinary profits/Net income】 〈 Total of two banks 〉 (JPY Bn) 【 Breakdown of Core net business profits】 76

8. Slide 8: Breakdown of Business Profits ① Net interest income

   Breakdown of Business Profits① Hokuhoku Financial Group,Inc. <Net interest income> Balance of loans grew , while tougher competitive environment had interest margin of loans narrow. Interest margin of securities decreased because of lower interest rate. 【Breakdown of net interest income (domestic)

9. Slide 9: Deposits

   Deposits Hokuhoku Financial Group,Inc. Deposits(including NCD) +¥307.3Bn(+3.16%) compared to Mar-12 Liquidity +¥298.2Bn(+5.94%) compared to Mar-12 Individuals +¥140.1Bn(+2.07%) compared to Mar-12 【Balance of deposits (including NCD）】 〈Total of two banks〉 (JPY Bn） (JPY Bn） 10,008.1 10,008.1 10,000

10. Slide 10: Loans

    Loans Hokuhoku Financial Group,Inc. Loans +¥115.0Bn(+1.57%)compared to Mar-12 Loans to SMEs and individuals -¥72.4Bn(-1.52%) compared to Mar-12 Housing and consumer loans +¥51.6Bn(+2.55%)compared to Mar-12 Hokuriku bank 【Balance of loans】〈Total of two banks〉 4,000 4,293.3 4,252.3 4,233.9 4,332.7

11. Slide 11: Loans guaranteed by Credit Guarantee Corporations

    Loans guaranteed by Credit Guarantee Corporations (CGCs) Hokuhoku Financial Group,Inc. (Maruho Loan) Balance of loans guaranteed by CGCs -¥8.8Bn(-1.32%) compared to Mar-12 【Balance of loans guaranteed by CGCs】 Hokuriku bank 〈Total of two banks〉 600 523.3 530.8 (JPY Bn） 485.4 511.3 488.6 39.1 39.7 3

12. Slide 12: Housing Loans

    Housing Loans Hokuhoku Financial Group,Inc. Balance of housing loans +¥51.4Bn(+2.69%) compared to Mar-12 Hokuriku bank 【Balance of housing loans】 1,010.8 1,066.1 960.8 986.0 <Total of two banks> 1,000 913.2 114.2 113.3 111.3 110.6 107.5 (JPY Bn） 750 1,963.8 2,000 1,885.5 1,912.3 Apartment loans 1,8

13. Slide 13: Interest Margins ①

    Interest Margins① Hokuhoku Financial Group,Inc. Loan rate -0.10% compared to FY2011 Deposit rate -0.03% compared to FY2011 Net interest margin Almost flat compared to FY2011 【Interest margin between loans and deposits (Domestic operations)】 〈Total of two banks〉 （％） 2.01 1.87 2.00 1.75 1.64 1.54 1

14. Slide 14: Interest Margins ②

    Interest Margins② Hokuhoku Financial Group,Inc. FY12/4Q Loan rate 1.50% (-0.11% compared to FY11/4Q) FY12/4Q Deposit rate 0.06% (-0.02% compared to FY11/4Q) 【Interest rate of yen denominated loans and deposits】 【Interest rate of yen denominated loans】 〈Total of two banks〉 〈Total of two banks〉 （％）

15. Slide 15: Breakdown of Business Profits ② Fee revenue

    Breakdown of Business Profits ② Hokuhoku Financial Group,Inc. <Fee revenue> Income from investment trust decreased and 【 Core gross business profits】 loan related expenses increased. 〈 Total of two banks 〉 Income from net income on derivatives decreased. (JPY Bn ） 20.7% 19.0% 200 15.9% 16.1% 【Brea

16. Slide 16: Investment products

    Investment products Hokuhoku Financial Group,Inc. Sales of both investment trusts and insurance decreased Total of two banks Hokuriku bank Hokkaido bank （JPY Bn） FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 Sales amount of investment trusts 84.2 138.3 121.3 98.7 87.4 4

17. Slide 17: Breakdown of Business Profits ③ General and administrative expenses

    Breakdown of Business Profits ③ Hokuhoku Financial Group,Inc. <General and administrative expenses> Decrease in expenses of IT system and deposit insurance premiums 【G&A expenses・OHR】 〈Total of two banks〉 【Breakdown of G&A expenses】 （JPY Bn） (JPY Bn） 63.47% 64.37% 65.37% 58.68% 【Total of two banks】

18. Slide 18: Net gains (Losses) related to Securities

    Net gains(Losses) related to Securities Hokuhoku Financial Group,Inc. Net gains(losses) related to bonds: +¥9.0Bn Net gains(losses) related to stocks: -¥8.5Bn 【Net gains (losses) related to securities】 Total of two banks Hokuriku bank Hokkaido bank (JPY Bn) FY2012 change FY2011 FY2012 change FY201

19. Slide 19: Securities Portfolio

    Securities Portfolio Hokuhoku Financial Group,Inc. Total balance of securities grew owing to increases in JGBs. Valuation difference of bonds increased compared to Mar-12. 【Balance of securities】 (JPY Bn） 2,483.4 2,509.7 Other 2,500 【Balance of securities】 (JPY Bn) 2,326.5 94.6 106.8 131.1 101.7 1

20. Slide 20: Bond Portfolio (yen denominated bonds)

    Bond Portfolio (yen denominated bonds) Hokuhoku Financial Group,Inc. 【Bond portfolio; Balance, Yield, and Value at risk】 ※Internal management base Hokuriku Bank Hokkaido Bank Mar-12 Mar-13 Mar-12 Mar-13 Term-end Balance (JPY Bn) 1,177.3 Term-end Balance (JPY Bn) 1,060.5 1,131.8 Floating rate governm

21. Slide 21: Credit Costs and Non-Performing Loan

    Credit Costs and Non-Performing Loan Hokuhoku Financial Group,Inc. Credit cost ratio was 0.23% (+0.09% compared to FY2011) NPL ratio was 3.11% (-0.06% compared to Mar-12) 【Total credit costs 】 【Non-performing loan 】 〈Total of two banks 〉 (JPY Bn） 0.51% 〈Total of two banks 〉 (JPY Bn） NPL ratio excl

22. Slide 22: SME Support / Financial Facilitation

    SME Support / Financial Facilitation Hokuhoku Financial Group,Inc. Support clients’ management improvement with emphasis on customer relationship. 【Result of management support for corporate clients】 【Support result （Total of 2 banks)】 （Cumulative result from Dec.2009 to Mar.2013） Number of clients

23. Slide 23: Deferred Tax Assets

    Deferred Tax Assets Hokuhoku Financial Group,Inc. Net deferred tax assets：¥24.1Bn (-¥17.5Bn compared to Mar-12) Net deferred tax assets to Tier 1 capital : 6.20% (-4.73% compared to Mar-12) (JPY Bn) 【Deferred tax assets】 【Breakdown of deferred tax assets 】 120 22.77% Net deferred tax assets 〈 Cons

24. Slide 24: Capital Adequacy Ratio

    Capital Adequacy Ratio Hokuhoku Financial Group,Inc.  Capital adequacy ratio was 11.88% (+0.16% from Mar-12). 【Capital adequacy ratio】 (JPY Bn) (JPY Bn） 【Capital adequacy ratio and public funds 】 【Consolidated】 Mar- 13 change Mar- 12 800.0 10.81% 10.83% 11.29% 11.72% 11.88% Capital adequacy ratio 1

25. Slide 25: Forecasts

    Forecasts Hokuhoku Financial Group,Inc. 【Earnings Forecasts for FY 2013】 (JPY Bn) 【Dividend Forecasts for FY 2013】 Interim Full year Change from 【Consolidated】 【Non-consolidated】 Interim Year-end Annual Forecasts Forecasts FY2012 Ordinary income 91.0 181.0 (18.1) Dividend per common share ― ¥3.75 ¥3

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27. Slide 27: Medium-term Management Plan "GO for IT!"

    Hokuhoku Financial Group,Inc. Medium-term Management Plan “ GO for IT !” May 2013 24

28. Slide 28: Review of previous Medium-term Management Plan "Road to 10"

    Review of previous Medium-term Management Hokuhoku Financial Group,Inc. Plan “Road to 10” Medium-term Management Plan “Road to 10” (3Years : from April 2010 to March 2013) “Establishing a platform to achieve JPY 10 trillion in deposit” Target Closest and Most Reliable Financial Group for Corporate P

29. Slide 29: Financial results of Medium-term Management Plan "Road to 10"

    Review of previous Medium-term Management Hokuhoku Financial Group,Inc. Plan “Road to 10” Financial results of Medium-term Management Plan “Road to 10” (3 Years : from April 2010 to March 2013) FY 2009 FY2012 FY2012 （Total of 2 banks） (Result) (Plan) (Result) Assessment Deposits *1 8,934.8bn 9,550.0

30. Slide 30: Basic Policies of new Medium-term Management Plan "GO for IT!"

    Basic Policies of new Medium-term Management Hokuhoku Financial Group,Inc. Plan ”GO for IT !“ “Optimizing our business strategies for sustainable growth” ( 3Years : from April 2013 to March 2016 ) “ GO for IT !”  “ GO” refers to every employees making an extra effort to expand our business Name whi

31. Slide 31: Basic Policies of new Medium-term Management Plan "GO for IT!"

    Basic Policies of new Medium-term Management Hokuhoku Financial Group,Inc. Plan ”GO for IT !“  Overcome business environment changes and achieve sustainable Basic growth by strengthening relationship with local customers and improving internal control Policies  Attain solid management foundation w

32. Slide 32: Strengthening Marketing Capabilities

    Strengthening Marketing Capabilities Hokuhoku Financial Group,Inc. Outline Strategies  Further increase customer accounts Expand customer base  Become the main bank and promote cross sale of various financial products  Accumulate knowledge and promote sales in priority Strengthen consultation ind

33. Slide 33: Strengthening Marketing Capabilities: Business Matching

    Strengthening Marketing Capabilities Hokuhoku Financial Group,Inc. Enhance quality of business matching service Take advantage of our extensive Offer effective business matching to our local customers utilizing our network group companies and our allied regional banks Hokkaido bullet Hokkaido Specia

34. Slide 34: Strengthening Marketing Capabilities: International Business Support

    Strengthening Marketing Capabilities Hokuhoku Financial Group,Inc. Take advantage of our extensive Enhance quality of international business support network Offer variety of services utilizing our overseas representative office Top-level overseas network among Expand network in continent Plan to ope

35. Slide 35: Strengthening Marketing Capabilities: Personal Customers

    Strengthening Marketing Capabilities Hokuhoku Financial Group,Inc. Intensive marketing Strategies for personal customers  Start marketing approach using MCIF* system *Marketing Customer Information File （=Information data base Marketing according to account by event based marketing ) holder categor

36. Slide 36: Strengthening Marketing Capabilities: Profit Plan

    Strengthening Marketing Capabilities Hokuhoku Financial Group,Inc. Core gross business profits （Total of 2 banks) Net interest income (Total of 2 banks) （¥Bn） （¥Bn） Stop declining trend of core 124.3 121.2 business profits -7.9 150 145.0 120 +0.4 +4.4 Others 2.7 140.1 142.4 137.8 2.6 0.3 1.6 18.3 De

37. Slide 37: Strengthening Marketing Capabilities: Loans, Deposits, Securities

    Strengthening Marketing Capabilities Hokuhoku Financial Group,Inc. Loans* (Total of 2 banks) Deposits* (Total of 2 banks) *average balance, after partial write-off *average balance, including NCD （¥Bn） （¥Bn） 10,110.0 +319.7 1.54% Loan rate 10,000 9,790.3 1.39% +202.2 9,500 +114.3 +5.2 7,480.0 7,500

38. Slide 38: Improving Management Efficiency

    Improving Management Efficiency Hokuhoku Financial Group,Inc. Outline Strategies  Establish more efficient cost structure as a top-level financial group among regional banks Consolidation and pooling of Consolidation of operation in headquarters, Shared back office, Collaboration in operation produ

39. Slide 39: Cementing Management Foundation

    Cementing Management Foundation Hokuhoku Financial Group,Inc. Outline Strategies  Improve quality of capital in line with Basel III Capital management  Develop capital operations for higher equity value. Enhance asset quality  Raise proportion of asset with a low risk-weighting Strengthen corpora

40. Slide 40: Cementing Management Foundation: HR and Compliance

    Cementing Management Foundation Hokuhoku Financial Group,Inc. HR management Strengthen compliance  Develop reliable employees able to  Cultivate a corporate culture of fair gain trust of customers and stable banking  Steady fulfillment of business improvement plan by Hokuriku Bank and  Raise con

41. Slide 41: Develop relationship with stakeholders

    Develop relationship with stakeholders Hokuhoku Financial Group,Inc. Maintain full communication with stockholders Achieve customer satisfaction and protection  Investors meeting  Customer satisfaction activity and award  Shareholders Meeting program  Information disclosure  Improve customer co

42. Slide 42: Projected figures of Medium-term Management Plan

    Projected figures Hokuhoku Financial Group,Inc. Projected of Medium-term Management Plan (3 Years : Apr 2013 to Mar 2016) ( consolidated / total of 2 banks ) 13/3 result 16/3 plan change Deposits *1 9,790.3 Bn 10,110.0 Bn +319.7 Bn Loans *1 *2 7,277.8 Bn 7,480.0 Bn +200.2 Bn Core net business profit

43. Slide 43: The Hokuriku Bank Medium-term Management Plan

    The Hokuriku Bank Ltd. Medium-term Management Plan “ ” May 2013 40

44. Slide 44: Basic Policies of new Medium-term Management Plan "Next CHALLENGE 2013"

    Basic Policies of new Medium-term Management The Hokuriku Bank Ltd. Plan “Next CHALLENGE 2013” Theme Aim to become closer and more reliable bank to region ～3-YEAR CHALLENGE to establish solid management foundation ( customer base, organization structure and human resources ) and ensure sustainable g

45. Slide 45: Strengthening Marketing Capabilities

    Strengthening Marketing Capabilities The Hokuriku Bank Ltd. Outline Strategies Redefine work of customer  Fully instruct meaning and purpose of customer liaison sales force liaison sales force  Raise quality of negotiation when sales force visit and talk to customers  Increase number of loan cust

46. Slide 46: Strengthening Marketing Capabilities: Corporate and Personal Customers

    Strengthening Marketing Capabilities The Hokuriku Bank Ltd. Corporate customers Personal customers Start relationship Top priority Mutually understand ◆Redefine work of customer liaison sales force Enforce customer and us for Raise quality of negotiation when sales force visit and talk to sales prom

47. Slide 47: Strengthening Marketing Capabilities: Promote consultation service

    Strengthening Marketing Capabilities The Hokuriku Bank Ltd. Alliance with local governments and Promote consultation service academic institutions for new business Support of corporate revitalization Business Offer sound consultation service conversion fit for life cycle of corporate PB,M&A Expansi

48. Slide 48: Strengthening Marketing Capabilities: Profit Plan

    Strengthening Marketing Capabilities The Hokuriku Bank Ltd. Core gross business profits Net interest income （¥Bn） （¥Bn） 69.9 70 +2.3 67.8 82.3 -4.6 +0.2 Others 80.3 1.7 78.3 76.1 2.0 1.9 Net fees & 10.6 0.9 Deposits etc. commissions 10.4 Securities 8.6 9.6 Loans 50 Net interest 13/3 result 16/3 plan

49. Slide 49: Loans, Deposits and Securities

    Loans, Deposits and Securities The Hokuriku Bank Ltd. Loans Deposits (average balance, after partial write-off) ( average balance, including NCD ) （¥Bn） （¥Bn） +202.5 5,770.0 1.46% 5,567.5 1.32% 5,500 4,500 +94.3 +93.2 5,000 13/3 16/3 +102.2 +3.5 4,310.0 result plan Securities -106.8 ( average balanc

50. Slide 50: Improving Management Efficiency

    Improving Management Efficiency The Hokuriku Bank Ltd. Outline Strategies Properly allocate human resources to branches and headquarters to Optimize HR allocation ensure high profitability and solid internal control at the same time Organize branch network Establish best branch network fit for fut

51. Slide 51: Cementing Management Foundation

    Cementing Management Foundation The Hokuriku Bank Ltd.  Establish solid framework of Attain win-win relationship Strengthen managerial administration and “co-prosperity with region” compliance internal control by steady fulfillment of business improvement plan Balanced management Develop business 

52. Slide 52: Cementing Management Foundation: Corporate revitalization and risk control

    Cementing Management Foundation The Hokuriku Bank Ltd.  Improve corporate management support in quality and quantity by Curve NPL by active alliance with external skilled institutions (Regional Economy Vitalization Corporation of Japan, SME Business Rehabilitation corporate revitalization Support C

53. Slide 53: Projected figures of Medium-term Management Plan

    Projected figures The Hokuriku Bank Ltd. Projected of Medium-term Management Plan (3 Years : Apr 2013 to Mar 2016) （Hokuriku Bank） 13/3 result 16/3 plan change Deposits *1 5,567.5 Bn 5,770.0 Bn +202.5 Bn Loans *1 *2 4,216.8 Bn 4,310.0 Bn +93.2 Bn Core net business profits 31.4 Bn 28.3 Bn -3.1 Bn Net

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55. Slide 55: The Hokkaido Bank Medium-term Management Plan "ALL 1 UP"

    The Hokkaido Bank Ltd. Medium-term Management Plan “ＡＬＬ ＵＰ” May 2013 51

56. Slide 56: Basic Policies of new Medium-term Management Plan "All 1 UP"

    Basic Policies of new Medium-term Management The Hokkaido Bank Ltd. Plan “All 1 UP ” 基本戦略 HR Organization Product Profitability Business structure Service Efficiency Capability Taking each business step further Basic strategies Reallocation Effective use Consisitent Various Expand Strategically comm

57. Slide 57: Strengthening Marketing Capabilities

    Strengthening Marketing Capabilities The Hokkaido Bank Ltd. Outline Establish organizational structure and sales strategies based on market-in approach  Marketing segmentation based on customer needs in line with life stage (Young customers and customers with needs of asset building , asset Persona

58. Slide 58: Strengthening Marketing Capabilities: Life stage segmentation

    Strengthening Marketing Capabilities The Hokkaido Bank Ltd. Personal Expand product and service lineup for each market segmentation categorized by customers life stage ◆Segmentation categorized by life stage Young customers Building assets Investing assets Succession ◆Life stage Financial Getting a

59. Slide 59: Strengthening Marketing Capabilities: Corporate clients

    Strengthening Marketing Capabilities The Hokkaido Bank Ltd. Corporate clients Grasp business problems and offer solutions 【Raise consultation capability】 Expand our customer base  Share clients’ management problems, growth Raise the quality of banking strategy and long-term vision and offer solutio

60. Slide 60: Strengthening Marketing Capabilities: Profit Plan

    Strengthening Marketing Capabilities The Hokkaido Bank Ltd. Core gross business profits Net interest income （¥Bn） （¥Bn） 54.3 53.3 -3.4 +2.2 Others 63.1 62.1 +2 61.6 61.7 1.0 0.7 0.7 0.8 Net fees & Deposits etc. commissions 7.7 7.6 7.7 7.8 Securities Loans 45 Net interest 13/3resutl 16/3plan income 5

61. Slide 61: Loans, Deposits and Securities

    Loans, Deposits and Securities The Hokkaido Bank Ltd. Loans Deposits (average balance, after partial write-off) ( average balance, including NCD ) （¥Bn） （¥Bn） +117.3Bn 4,340 Loan rate +109.0Bn 1.64% 4,223 1.48% 4,000 Increase in loans with a low risk-weighting +1.7 3,170.0 +83.5 3,500 13/3 16/3 resu

62. Slide 62: Improving Management Efficiency

    Improving Management Efficiency The Hokkaido Bank Ltd. Outline Strategies Reconsider branch  Strategic allocation of sales force to retail market and priority areas operation  Pursue efficient operation in branch (Reallocation of resources) Thorough control of  Cost control by optimizing business

63. Slide 63: Cementing Management Foundation

    Cementing Management Foundation The Hokkaido Bank Ltd. Provide full instruction of compliance  Expand training menu in compliance education Employee training  Compliance seminars in branches Protect customer  On-site / off-site internal audit interest Strategically foster human resources  Struct

64. Slide 64: Cementing Management Foundation: Corporate revitalization support

    Cementing Management Foundation The Hokkaido Bank Ltd. Corporate revitalization support / Organization change  Continue effective revitalization support after financial facilitation act is Corporate revitalization expired support  Alliance with external institutions and active use of business matc

65. Slide 65: Projected figures of Medium-term Management Plan

    Projected figures The Hokkaido Bank Ltd. Projected of Medium-term Management Plan (3 Years : Apr 2013 to Mar 2016) （Hokkaido Bank） 13/3 result 16/3 plan change Deposits *1 4,222.7 Bn 4,340.0 Bn +117.3 Bn Loans *1 *2 3,061.0 Bn 3,170.0 Bn +109.0 Bn Core net business profits 18.9 Bn 18.6 Bn -0.3 Bn Ne

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67. Slide 67: Appendix

    Hokuhoku Financial Group,Inc. Appendix 62

68. Slide 68: About Hokuhoku FG ①: Outline of Hokuhoku FG and Two Banks

    About Hokuhoku FG ① Hokuhoku Financial Group,Inc. Outline of Hokuhoku FG and Two Banks (As of March 31, 2013） Hokuhoku FG Hokuriku Bank Hokkaido Bank Date of establishment September 26, 2003 July 31, 1943 March 5, 1951 （Started business in 1877） Location of head office 1-2-26 T sutsumicho-dori, T oy

69. Slide 69: About Hokuhoku FG ②: History of Hokuhoku FG

    About Hokuhoku FG ② Hokuhoku Financial Group,Inc. History of Hokuhoku FG Hokuriku area Hokkaido area 1877 Established in Ishikawa Prefecture Ishikawa 1878 Fukui Trade between Hokkaido and Hokuriku area Established in Fukui Prefecture flourished in the 19th century, and A lot of people immigrated fro

70. Slide 70: About Hokuhoku FG ④: Historical Data (Hokuhoku FG)

    About Hokuhoku FG ④ Hokuhoku Financial Group,Inc. Historical Data (Hokuhoku FG ) （JPY Bn） FY2007 FY2008 FY2008 FY2009 FY2009 FY2010 FY2010 FY2011 FY2011 FY2012 FY2012 <Consolidated> Full year Interim Full year Interim Full year Interim Full year Interim Full year Interim Full year Ordinary income 26

71. Slide 71: About Hokuhoku FG ⑤: Historical Data (Hokuriku Bank)

    About Hokuhoku FG ⑤ Hokuhoku Financial Group,Inc. Historical Data (Hokuriku Bank ) （JPY Bn） FY2007 FY2008 FY2008 FY2009 FY2009 FY2010 FY2010 FY2011 FY2011 FY2012 FY2012 Full year Interim Full year Interim Full year Interim Full year Interim Full year Interim Full year Ordinary income 141.2 65.3 124.

72. Slide 72: About Hokuhoku FG ⑥: Historical Data (Hokkaido Bank)

    About Hokuhoku FG ⑥ Hokuhoku Financial Group,Inc. Historical Data (Hokkaido Bank ) （JPY Bn） FY2007 FY2008 FY2008 FY2009 FY2009 FY2010 FY2010 FY2011 FY2011 FY2012 FY2012 Full year Interim Full year Interim Full year Interim Full year Interim Full year Interim Full year Ordinary income 96.0 47.7 94.3

73. Slide 73: About Hokuhoku FG ⑦: Market Share in Our Home Market (Loans)

    About Hokuhoku FG ⑦ Hokuhoku Financial Group,Inc. Market Share in Our Home Market (Loans, Sep-12) Hokuriku Area Hokkaido Area Shinkin Banks HFG 27.0% Shinkin Banks HFG 25.4% 19.4% 24.2% Other Banks O the r Banks Main 31.0% Competitor 22.6% 9.4% Main 41.0% Competitor S.B 44.5% S.B HFG 17.3% S.B HFG 1

74. Slide 74: About Hokuhoku FG ⑧: Market Share in Our Home Market (Deposits)

    About Hokuhoku FG ⑧ Hokuhoku Financial Group,Inc. Market Share in Our Home Market (Deposits, Sep-12) Hokuriku Area Hokkaido Area Shinkin Banks HFG 27.7% HFG 22.9% 23.5% Shinkin Banks 32.2% O the r Banks Main Other Banks Main 30.3% Competitor 18.5% 12.6% Competitor 32.3% S.B 48.4% S.B HFG 16.0% S.B H

75. Slide 75: About Hokuhoku FG ⑨: Lending in the Region by Industry

    About Hokuhoku FG ⑨ Hokuhoku Financial Group,Inc. Lending in the Region by Industry (Mar-13) Hokuriku Bank Hokkaido Bank Others Manufacturing Manufacturing Others 0.8% 7.5% Construction 12.9% 0.6% 3.8% Construction Communications & 5.1% Transportation Individual 3.6% Communications & 34.7% Individua

76. Slide 76: About Japanese Regional Banks ①: Financial Institutions in Japan

    About Japanese Regional Banks ① Hokuhoku Financial Group,Inc. Financial Institutions in Japan Source: Home page of Japanese Bankers Association of Japan 1 Central Bank - Bank of Japan Hokuhoku Financial Group 2 Private Financial Institutions (Hokuriku Bank, Hokkaido Bank) City banks Banks Regional b

77. Slide 77: About Japanese Regional Banks ②: Outline of Regional Banks

    About Japanese Regional Banks ② Hokuhoku Financial Group,Inc. Outline of Regional Banks Outline of Regional Banks Leading Banks in the Regions The 64 regional banks in Japan consistently The regional banks have formed a dense enjoy wide patronage as banks that develop branch network in the regions,

78. Slide 78: The Present Condition of the Regional Economy ①

    The Present Condition of the Regional Economy ① Hokuhoku Financial Group,Inc. Characteristics of Our Main Business Area Data from Ministry of Internal Affairs and Communications Population and Square Measure Scale matching for Toyama Ishikawa Fukui Total Hokkaido Total Osaka! Prefecture a Prefecture

79. Slide 79: The Present Condition of the Regional Economy ②

    The Present Condition of the Regional Economy ② Hokuhoku Financial Group,Inc. Economic Conditions Monthly Economic Report Regional Economic Report (By the Cabinet Office) (By Bank of Japan) All Japan Hokuriku Area Hokkaido Area April-13 April-13 April-13 Economic Shows movement of picking up Shows s

80. Slide 80: The Present Condition of the Regional Economy ③: Big Projects

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81. Slide 81: Hokuhoku Financial Group, Inc. Planning Group

    Inquiries related to this presentation should be addressed to Hokuhoku Financial Group, Inc. Planning Group TEL(81)76-423-7331 FAX(81)76-423-9545 E-MAIL:honsha2@hokuhoku-fg.co.jp http://www.hokuhoku-fg.co.jp/ This document may not be reproduced or distributed to any third party without prior approva

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