77 Bank, Ltd.TSE: 8341

Results for the First Half of Fiscal Year Ending March 31, 2025 (December 3, 2024)

· Issued by 77 Bank, Ltd.

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Results for the First Half of

Fiscal Year Ending

March 31, 2025

IR Presentation

Materials were prepared for the Bank's presentation of its results for first half of the fiscal year ending March 31, 2025 held on December 3, 2024.

December 3, 2024

IR Presentation Key Points

Posted the highest ordinary profits and net income ever 01 recorded for a first half and revised upward the projected

performance and year-end dividends forecast

  • Achieved record-high ordinary profits and net income for a first half as a result of the increase in income from customer services due to increased yields of loans and bills discounted, etc.
  • Increased the amount of interim dividends and revised upward the year-end dividends forecast in order to meet stakeholders' expectations

02 Various initiatives of "Vision 2030" steadily advanced

  • Initiatives for finance & consulting improved profitability of the customer sales department
  • Core OHR improved through various initiatives to increase productivity, including branches within branches
  • Capitalize on the rise in stock prices and flexibly utilize unrealized gains on securities in order to sustainably generate income from marketable securities trading

03 Initiatives to grow the 77 Bank Group and enhance the value of local communities

  • Strengthen the Group business strategy and governance in order to establish a third pillar of income after the customer sales department and marketable securities trading
  • Contribute to the revitalization of local communities through developing and supporting medium- sized enterprises and SMEs with the 77 Bank Group working together

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

1

Table of Contents

1. First Half Financial Summary ・・・ 3

2. Projected Performance

・・・ 13

3. The 77 Bank Group's

・・・

Value Enhancement

18

4. Business Strategy

・・・

27

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

2

01

First Half

Financial

Summary

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

3

Summary of Profits and Losses

(Unit: JPY bn, %)

Gross operating profit

Net interest income

Net fees and commissions income

Net other operating income

Expenses

Substantial net operating income

[

Core net operating income

]

[

Core net operating income (excl. gains (losses) on

]

cancellation of investment trusts)

Provision of general reserve for loan losses

Net operating income

Special income and losses

Ordinary profits

Extraordinary gains/losses

Profit

Credit-related expenses

Total gains (losses) from securities

After excluding procurement costs

Income from customer services

After excluding foreign currency-denominated procurement costs

Ordinary profits

Profit attributable to owners of the parent

FY2023

FY2024

YoY change

1H

1H

Amount

%

45.3

45.9

0.6

1.4

47.7

54.4

6.7

14.1

6.7

7.3

0.6

9.0

(9.1)

(15.8)

(6.7)

24.4

23.5

(0.9)

(3.6)

20.9

22.4

1.5

7.5

[

24.3

]

[

31.8

]

[

7.5

]

[

31.4

]

[

17.4

]

[

23.6

]

[

6.2

]

[

35.8

]

-

-

-

20.9

22.4

1.5

7.5

3.9

6.0

2.1

24.8

28.4

3.6

14.6

(0.0)

(0.0)

0.0

17.5

19.9

2.4

13.4

(1.1)

(0.3)

0.8

23.4

23.3

(0.1)

18.1

17.0

(1.1)

6.6

11.2

4.6

4.7

9.1

4.4

25.4

28.7

3.3

13.0

17.7

19.8

2.1

11.8

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

4

Net Interest Income

Interest on loans and bills discounted increased due to an improvement in their interest rates, primarily

market-based interest rates, in addition to capturing their needs

Interest and dividends on investment securities also increased, capitalizing on favorable market conditions

Net interest income

(Unit: JPY bn, %)

FY2023

FY2024

YoY change

1H

1H

Amount

%

Net interest income

47.7

54.4

6.7

14.1

Interest income

49.0

56.5

7.5

15.4

(Interest on loans and

25.4

28.4

3.0

11.8

bills discounted)

(Interest and dividends

on investment

23.1

26.9

3.8

16.1

securities)

Interest expenses

1.3

2.1

0.8

65.7

(Interest on deposits)

0.4

1.4

1.0

223.8

(Reference) Change factors in net interest income (Unit: JPY bn)

Factors in securities

+3.8

Yen-denominated: +3.1

Foreign currency-denominated: +0.7

Factors in loans

+3.0

Net interest

Yen-denominated: +2.9

Yield

Others income

Foreign currency-denominated: +0.1

+4.8

+0.9

54.4

Net

Average

Yield

Factors in

interest

balance +1.7

deposits

income

+1.3

Average

(1.0)

47.7

balance

(1.0)

FY2023

FY2024

1H

1H

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

Average balances and yields of loans

and bills discounted

(Unit: JPY bn)

Yields of loans and

bills discounted

0.86%

0.91%

0.82%

Loans and bills

5,661.6

discounted

5,138.7

5,422.5

(average

balances)

FY2021 FY2022 FY2023

Average balances and yields of

investment securities

(Unit: JPY bn)

Yields of investment

securities

1.06%

1.45%

0.96%

Investment

3,018.4

securities 3,010.1

2,940.6

(average

balances)

FY2021 FY2022 FY2023

* Excluding products and corporate investment funds

5

Deposits

Despite a year-on-year increase in retail deposits, corporate deposits and public deposits, etc. decreased year

on year

Ratio of retail deposits to total deposits remained high

Deposits (average balances)

Deposits by region (average balances)

(including negotiable certificates of deposits)

(Unit: JPY bn)

(including negotiable certificates of deposits)

(Unit: JPY bn)

Total

8,624.8

8,842.8

8,908.5

(0.2)%

Total 8,624.8

8,842.8

8,908.5

(0.2)%

Miyagi

8,074.6

8,284.8

8,354.0

(0.1)%

Prefecture

Outside of

550.2

558.0

554.5

(2.0)%

Retail

5,869.3

5,974.8

+1.1%

Miyagi

5,643.1

FY2021

FY2022

FY2023

YoY change

deposits

Prefecture

(%)

Yen-denominated deposits portfolio

(excluding negotiable certificates of deposits)

Percentages by depositor type

Percentages by amount

Less

JPY

JPY 10 mn

42%

42%

Retail

or less

Corporate

2,179.5

2,193.9

deposits

69%

71%

2,221.6

(0.7)%

More than

deposits

JPY 10 mn

35%

36%

JPY 100 mn

Public

Corporate

or less

802.2

779.6

712.1

(8.5)%

deposits

25%

24%

More than

deposits, etc.

23%

22%

Public

JPY 100 mn

FY2021

FY2022

FY2023

YoY change

6%

5%

deposits,

End-Mar.

End-Sept.

End-Mar.

End-Sept.

(%)

etc.

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

2024

2024

2024

2024

6

Loans and Bills Discounted

Captured customers' needs for loans and bills discounted and corporate loans increased

Yields of loans and bills discounted as a whole increased 0.06 percentage points year on year due to an

improvement in yields of yen-denominated loans and bills discounted

Loans and bills discounted (average balances)

5,661.6

5,422.5

Total 5,138.7

Corporate loans (average balances)

(Unit: JPY bn)

(yen-denominated)

(Unit: JPY bn)

+5.2%

3,690.1

+7.9%

3,434.7

Total

3,188.8

Miyagi

+6.8%

Prefecture

1,898.2

2,036.5

1,773.5

Tohoku region, etc.

(excluding Miyagi

382.6

+8.7%

Prefecture)

305.2

340.4

Tokyo/Nagoya/

+10.2%

+7.9%

Osaka

943.8

990.5

1,030.9

Corporate

3,434.7

3,690.1

Structured

+5.1%

finance

166.3

205.6

240.1

(Yen- 3,188.8 denominated)

FY2021

FY2022

FY2023

YoY change

(%)

Yields of loans and bills discounted

6.62%

Corporate

63.5

80.3

77.7

+6.9%

3.84%

(Foreign

currency-

Foreign

denominated)

currency-

Retail loans

1,231.4

1,277.0

1,317.3

+3.0%

denominated 1.10%

0.91%

0.86%

Overall 0.82%

Yen-

Loans for local

denominated

0.83%

governments

655.0

630.5

576.5

(6.8)%

0.81%

0.81%

FY2021

FY2022

FY2023

FY2021

FY2022

FY2023

YoY change

(%)

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

7

Securities (1)

While working to increase the balances of equity securities and investment trusts, etc. in an effort to increase

income, sold yen-denominated bonds, primarily low-yield bonds, in anticipation of rises in interest rates

Balance of investment securities

(on an amortized cost basis)(Unit: JPY bn)

2,973.4

3,013.4

2,975.0

2,918.0

National

272.9

286.0

2,648.5

gov.

313.2

bonds

402.6

[(9.2)%]

380.5

14.4%

[(5.4)%]

Local

905.2

967.1

gov.

923.3

bonds

800.7

627.5

23.7%

[(21.6)%]

726.8

642.9

24.3%

Corporate 1,023.4

943.8

841.8

[(11.5)%]

bonds

689.6

716.5

27.1%

637.0

[+3.9%]

Investment

549.2

610.5

trusts, etc.

Foreign

204.4

7.6%

150.1

130.4

183.5

222.7

[(8.2)%]

bonds

76.6

72.6

75.6

76.2

75.7

Equity

[+1.3%]

2.9%

securities End-Mar.2021

End-Mar.2022

End-Mar.2023

End-Mar.2024

End-Sept.2024

Composition

[Change from

ratio

March 31, 2024]

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

Total gains (losses) from securities

(Unit: JPY bn, %)

FY2023

FY2024

YoY change

Amount

1H

1H

(Rate)

Interest and dividends on investment securities [A]

23.1

26.9

3.8

Interest on yen-denominated bonds

2.5

2.9

0.4

Interest on foreign currency-denominated

5.9

6.6

0.7

bonds

Stock dividends

3.5

4.4

0.9

Distributions from investment trusts

4.3

4.8

0.5

Gains on cancellation of investment trusts

6.9

8.2

1.3

Gain (losses) on debt securities [B]

(3.4)

(9.4)

(6.0)

Gain on sales

0.4

2.7

2.3

Gain on redemption

0.0

0.0

0.0

Losses on sales

0.3

10.1

9.8

Losses on redemption

3.4

2.0

(1.4)

(Losses on cancellation of investment

3.1

1.9

(1.2)

trusts)

Write-offs

0.1

0.0

(0.1)

Gain (losses) on equity securities [C]

3.1

5.4

2.3

Gain on sales

3.3

5.5

2.2

Losses on sales

0.2

0.1

(0.1)

Write-offs

0.0

0.0

0.0

Gains (losses) on investments in money held in

0.6

0.4

(0.2)

trust [D]

Total gains (losses) from securities [A+B+C+D]

23.4

23.3

(0.1)

After excluding procurement costs

18.1

17.0

(1.1)

(Reference) Total yield from securities

1.17

1.15

(0.02)

(After excluding procurement costs)

8

Securities (2)

As the stock market declined, gains from evaluation of equity securities and investment trusts, etc. decreased,

but remained at a certain level

Sold yen-denominated bonds with the aim of reducing interest rate risks

Gains (losses) from evaluation of securities

Yen-denominated bonds balance by remaining

(Unit: JPY bn)

period/modified duration

(Unit: JPY bn)

End-Mar. 2023

End-Mar. 2024

End-Sept. 2024

Debt securities

(27.5)

(34.9)

(34.2)

National gov. bonds

(12.9)

(16.8)

(17.4)

Local gov. bonds

(8.0)

(9.6)

(8.3)

Corporate bonds

(6.6)

(8.5)

(8.5)

Others

30.0

60.0

44.4

Investment trusts, etc.

31.7

61.3

45.2

Foreign bonds

(1.7)

(1.3)

(0.8)

Equity securities

78.7

143.3

137.7

Investment securities total

81.2

168.4

147.9

Money held in trusts

3.2

7.8

7.1

Modified

5.59

5.42

duration

5.24

Total yen-

denominated

2,082.6

bonds

1,934.3

Over 10 years

270.4

284.3

1,654.8

Over 5 years

779.8

251.1

but no more

641.0

than 10 years

490.0

Over 1 year

but no more

802.1

805.5

706.9

than 5 years

No more than

230.3

203.5

206.8

1 year

End-Mar.2023

End-Mar.2024

End-Sept.2024

Foreign currency-denominated foreign bonds

balance/modified duration

(Unit: JPY bn)

Modified

0.73

0.68

0.89

duration

Total

84.4

176.2

155.0

(Reference) Changes in Nikkei Average, etc.

(Unit: JPY, %)

Nikkei Average

28,041

40,369

37,920

10-year JGBs

0.32

0.72

0.85

10-year US treasury bonds

3.47

4.20

3.78

The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2025

Total foreign

currency-218.4200.6

denominated 179.2 foreign bonds

12.7

7.8

8.9

Fixed rate bonds

End-Mar.2023

End-Mar.2024

End-Sept.2024

9

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