The Hyakujushi Bank, Ltd.
INTEGRATED
REPORT
2024
Year ended March 31, 2024
2023百十四銀行統合報告書 （ディスクロージャー誌 情報編）
発行 2023年7月
編集 株 式会社百十四銀行経営企画部広報・SDGs推進室 〒760-8574香川県高松市亀井町5番地の1
TEL(087)831-0114
Introduction
For Our Stakeholders
By fulfilling our role as a regional financial institution, the Hyakujushi Bank aims for the sustainable growth of local communities together with stakeholders.
Our purpose of this Integrated Report is to obtain the understanding of our shareholders and investors, as well as our customers and local residents regarding the Bank's initiatives, in addition to conveying our commitment to you all.
CONTENTS
Introduction
01 For Our Stakeholders
03 The Hyakujushi Bank in Numbers
04 The Bank's Operational Foundation
Hyakujushi Group'sVision
05 Message from the President
11 Hyakujushi Group's Value Creation Process
13 Long-term Vision
Hyakujushi Group's Growth Strategy
15 Sustainability Management Framework
17 Medium-term Management Plan
19 Growth Engines Supporting Strategies: HRX and DX Initiatives
27 Key Strategies: Evolution of the General Consulting Group
31 Message from the Director in Charge of Finance
35 Initiatives to Address Environmental Issues such as Climate Change
Communication with Stakeholders
41 Corporate Governance
45 Board of Directors and Audit and Supervisory Committee Members
- Outside Director Interview
- Enhancement of Shareholder Value
- Efforts toward Risk Management and Compliance
CorporateVision
- Prosper together with customers and communities
- Create a vigorous corporate culture
- Ensure sound business management and enhance corporate value
Code of Conduct
- Promote close dialogue to deepen mutual trust
- Spare no effort to grow as professionals
- Understand diversity and respect human rights
- Strive to reduce environmental burden and contribute to regional vitalization
- Take actions that exceed our shareholders' expenctations
Editing Policy
The Hyakujushi Bank has prepared this report with the aim of communicating to our stakeholders in straightforward terms the Bank's initiatives for sustainable value creation from both the perspective of financial and non-financial information.When editing this report, we referred to the Integrated Reporting Framework established by the International Integrated Reporting Council as guidelines, and theTask Force on Climate-Related Financial Disclosures (TCFD) for sustainability-related information. This report (both the informative and reporting editions) also integrates disclosure materials in accordance with Article 21 of the Banking Act (explanatory documents related to the status of performance and financial condition of the bank). Please see the reporting component for figures.
The Hyakujushi Bank, Ltd. | (as of March 31, 2024) | |||||||||||
Head Office | 5-1,Kamei-cho,Takamatsu, Kagawa | |||||||||||
Established | November 1, 1878 | |||||||||||
Total assets | ¥5,805.8 billion | |||||||||||
Deposits and negotiable certificates of deposit | ¥4,765.2 billion | |||||||||||
Loans and bills discounted | ¥3,433.1 billion | |||||||||||
Paid-in capital | ¥37.3 billion | |||||||||||
Total shares issued | 28,790,000 shares | |||||||||||
Employees | 1,963 | |||||||||||
Offices | 133 (Head Office, 99 branches, 22 | |||||||||||
sub-branches, 6 Quick Square, 5 | ||||||||||||
Consulting Plaza) | ||||||||||||
Non-branch ATMs and CDs | 140 |
01 The Hyakujushi Bank, Ltd . Integrated Report 2024 | The Hyakujushi Bank, Ltd . Integrated Report 2024 02 |
Introduction
The Hyakujushi Bank in Numbers
Thanks to the support of the local community, the Hyakujushi Bank has continued operations for almost 150 years, making us one of the few number banks* still in existence today (a bank that uses the number of the temporary license issued upon establishment as its bank name).
The Bank's Operational Foundation
- Solid customer foundation and far-reaching network
Although we are a regional bank with Kagawa Prefecture as our operational foundation, we have been branching out of our home location from an early stage. In 1923, we opened our first branch in Shikoku outside of Kagawa Prefecture.With the expansion into Osaka in 1950 as our first branch in Honshu, we opened branches inTokyo, Okayama, and Hiroshima.We have built an extensive network with 133 branches in 11 prefectures, with our operations firmly rooted in each
Established
No. of customers
Credit rating
locality.
146years ago
Since 1878
(as of March 31, 2024)
Retail customers1.21 million
Corporate customers
54,361
(Mar 31, 2024)
JCRR&I
(Japan Credit Rating Agency) (Rating and Investment Information, Inc.)
AA-
Long-term Issue | Issue Rating |
Rating |
Kagawa (95 branches)
Hyogo
Okayama
Hiroshima
Kagawa
Osaka
Tokyo
Aichi
Urban areas (8 branches)
Tokyo, Aichi, Osaka
Ehime
Tokushima
Deposits and negotiable certificates of deposit
(non-consolidated)
¥4,765.2billion | ||
(Billions of yen) | 4,795.8 | 4,765.2 |
4,648.3 | ||
Loans and bills discounted
(non-consolidated)
¥3,433.1billion | ||
(Billions of yen) | 3,366.8 | 3,433.1 |
3,164.8 |
Core business net income
(excludes gain/loss of cancellation of investment trusts, non-consolidated)
¥15.3billion | |
(Billions of yen) | 23.5 |
15.0 | 15.3 |
Fukuoka | Kochi |
Greater Setouchi area (30 branches)
Okayama, Hiroshima, Fukuoka, Hyogo,
Ehime, Kochi,Tokushima
No. 1 | No. 1 |
Deposit market | Loan market |
share | share |
(within Kagawa pref.) | (within Kagawa pref.) |
(Mar 31, 2024) | (Mar 31, 2024) |
47.7% | 36.9% |
(as of March 31, 2022) (as of March 31, 2023) (as of March 31, 2024)
(as of March 31, 2022) (as of March 31, 2023) (as of March 31, 2024)
(Year ended March 31, 2022) | (Year ended March 31, 2023) (Year ended March 31, 2024) |
■ Hyakujushi City banks/regional banks (other than Hyakujushi), secondary regional banks, credit unions, etc.
The potential of Kagawa Prefecture - the Bank's home location
Industrial structure adapts well to change
Profit (non-consolidated/consolidated*) | Consolidated capital ratio |
(Non-consolidated) (Consolidated) | 9.12% |
¥8.8billion ¥9.6billion |
OHR (non-consolidated)
*Operating costs/gross operating profit
74.9%
Home to factories of Japan's top-ranking corporations engaged in fields that include construction machinery and electrical machinery, Kagawa Prefecture attracts a large number of such companies' partner enterprises equipped with sophisticated core manufacturing technologies mainly in those fields.The prefecture also hosts large factories that handle basic materials such as chemicals and non-ferrous metals, mainly located in industrial zones situated in the prefecture's coastal region. In addition, many food-related companies handling frozen foods, seasonings, and other such products have operations there.
As such, Kagawa Prefecture tends to be resilient to economic shocks due to its well-balanced industrial structure not skewed toward any particular industry. Another distinctive feature of Kagawa is its many niche leaders that are active in numerous specialized market segments.
(Billions of yen)
Non- | Consolidated | ||||
consolidated | 11.7 | Non- | Non- | Consolidated | |
10.8 | Consolidated | consolidated | |||
consolidated | 9.6 | ||||
8.3 | 9.1 | 8.8 |
(%)
9.349.109.12
(%)
76.174.9
71.6
Industrial products and agricultural/fishery products of which Kagawa Prefecture has Japan's top share
Leather gloves for sport | Uchiwa (round fan)/Sensu (folding fan) | Construction cranes |
(including synthetic leather) | (including the bone part) | |
(Year ended March 31, 2022) (Year ended March 31, 2023) (Year ended March 31, 2024)
(as of March 31, 2022) (as of March 31, 2023) (as of March 31, 2024)
(Year ended March 31, 2022) (Year ended March 31, 2023) (Year ended March 31, 2024)
Population
Natural disaster damage
74.7% | 49.6% | 46.8% |
- Consolidated profit is "Profit attributable to owners of parent"
External recognition
930,000
38th in Japan
Kagawa Prefecture
Prefecture GDP (nominal)
Per capita
¥3,930 thousand
26th in Japan
¥241 million
5th smallest
in Japan
¥3,343 million | ¥2,691 million | ¥102,379 million | |
No.1 in Japan | No.1 in Japan | No.1 in Japan | |
Kintoki carrots | Olives | ||
96% | 90% | ||
1,933tons | 490tons | ||
No.1 in Japan | No.1 in Japan |
Platinum Kurumin Plus | L-boshi | Health and productivity | Green Partner 2023 |
Certification as a company | Certification as a company | Certification as a company | Certification as a company |
committed to creating a workplace | with excellent initiatives for | practicing excellent health | contributing to decarbonization |
environment that facilitates both | promoting the active | management | through support for forest |
infertility treatment and work | participation of women | maintenance, etc. |
*Source:"Kagawa's Ranking by 100 Indicators 2024" published by Kagawa Prefectural Government
Transportation and logistics hub
Kagawa Prefecture serves as a gateway to Japan's Shikoku region. It is accordingly equipped with an extensive regional transportation network that includes Seto Ohashi Bridge, Shikoku Odan Expressway,Takamatsu Airport, andTakamatsu Port. The prefecture features convenient transport access to theTokyo metropolitan area and the Kansai region, and occupies a key position in transport networks connecting Shikoku and Honshu.
*Source:The survey of the Census of Manufacturers 2020 published by METI and "Kagawa's Agricultural/Fishery Industries by Statistics 2023" published by the Department ofAgriculture and Fisheries, Kagawa Prefectural Government
Number of ships enteringTakamatsu Port (overseas + coastal) | No. 14 in Japan |
29,504 ships | No. 1 in Shikoku |
(2021) | |
*Source: Ministry of Land, Infrastructure,Transport andTourism website
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Hyakujushi Group's Vision
Message from the President
By achieving the well-being of our stakeholders with the "Power of Support," we will strive to enhance environmental and social value, as well as the sustainability of the Group.
July 2024
Masashi Mori, President
"Power of Support," our slogan
I sincerely thank you for your continued patronage of the Hyakujushi Bank.
My name is Masashi Mori, and I was appointed as the 16th President on April 1, 2024.We are experiencing a return to a world with interest rates, and while the business environment poses challenges, I am committed to taking the helm of management.
The Bank has set forth the Long-term Vision 2030, which represents our desired state for FY 2030, and is currently working toward realizing the first phase of the medium-term management plan "Let's Create a Good 114 ." Upon assuming office as President, I have adopted the slogan "Power of Support" to further accelerate our progress.
The slogan "Power of Support" embodies our desire to effectively utilize the invaluable management resources that the Bank has accumulated over time since its establishment, with the support of various stakeholders such as customers, shareholders, and employees, to offer thorough support for our customers and communities.
In the medium-term management plan, we aim to enhance our ability to find solutions to the issues that our customers and communities face
through the "evolution of the general consulting group," but in order for us to fully utilize the "Power of Support," we believe it is essential to strengthen the supportive power among our officers and employees, which serves as the driving force.
Shifting our focus to the environment surrounding our customers and communities, we observe positive signs such as the recovery of tourism demand and the expansion of personal consumption in Kagawa Prefecture, which is the Bank's operational foundation, as we transition to the post-COVID and with-COVID era.We also feel, however, that the challenges we need to address are becoming more diverse and complex, such as labor shortages, soaring prices, and the depreciation of the yen.
My guiding principle is based on the proverb ofYukichi Fukuzawa, "Those who do not advance will surely retreat, and those who do not retreat will surely advance." As the leader of the Group, I intend to constantly move forward with the "Power of Support" even under these circumstances in order to improve the well-being of all stakeholders and enhance the Group's corporate value.
05 The Hyakujushi Bank, Ltd . Integrated Report 2024 | The Hyakujushi Bank, Ltd . Integrated Report 2024 06 |
Hyakujushi Group's Vision
Message from the President
Support for communities
neutrality goal set by the Hyakujushi Group to regional communities, and support the communities' and customers' decarbonization efforts
this belief, we have been revising the evaluation system for branches since April 2024, aiming to realize the well-being of communities by
In the Long-term Vision 2030, we define the well-being of the community as a state where future generations can continue living with peace of mind by vitalizing the local economy and solving key environmental and social issues.
The Bank boasts its extensive network of 133 branches across 11 prefectures nationwide, including Kagawa Prefecture which serves as our main operational foundation. Our aim is to provide group-wide support to these regional communities in addressing social issues such as
revitalizing communities and increasing the number of non-resident population in the region.
In addition, in December 2023, we signed an agreement with Takamatsu City regarding the Corporate Version of Hometown Tax Donation System. By providing information to our customers on regional revitalization projects in various local governments, we aim to promote the use of this system and contribute to the revitalization of the regional economy.
through financing and investment activities such as sustainable finance.
It is my belief that supporting communities is an extremely important initiative that, through the strengthening of social capital and natural capital in the Hyakujushi Group's value creation process
( P.11-12 "Hyakujushi Group'sValue Creation Process"), will ultimately lead to the enhancement of our financial capital. Based on
placing greater value on the initiatives that each employee voluntarily undertakes to support them, and I hope that these efforts provide our employees a sense of fulfillment and pride in working for the Hyakujushi Group.
P.27 "Community Co-creation Strategy"
Support for customers
falling birthrate and aging populations, declining population and alleviating environmental burden from a mid- to long-term perspective, and to achieve the "well-being of the community."
In FY 2023, to attract affluent overseas visitors, we collaborated with Kotohira-Gu in Kotohira Town to create high value-added experiential tourism content and opened a new type of store, "#114base," in the redeveloped JR Takamatsu Station area. At "#114base," we have a sales corner for local products and host live demonstrations and workshops by our customers who do business with the Bank, contributing to the creation of a vibrant atmosphere, while also focusing on providing hospitality to overseas tourists, centered around foreign currency exchange services. As a new type of store without bank counter services, I believe that "#114base" still has much more to offer in terms of
Regarding efforts to alleviate environmental burden in regional communities, the Hyakujushi Group aims to take the lead in new initiatives within communities and share the knowledge and expertise gained from these efforts with the local community members.
Specifically, we have reduced CO2 emissions through the use of a "self- utilization scheme" whereby the electricity generated by the solar power system installed at the former site of the Bank's recreation facility is consumed by the Bank itself. Our Takamatsu Higashi Branch, newly built and relocated in November 2023, became the first financial institution in Kagawa Prefecture to be certified as a net zero energy building (ZEB) by combining energy-saving features with solar power generation to achieve a net-zero or lower energy consumption level for the building.We aim to extend the scope of such new initiatives toward the 2050 carbon
We define the well-being of corporate customers as a state whereby corporate customers can gain a real sense of their achieving business growth by solving important financial and non-financial management issues.
In order to respond to the increasingly diverse and complex management challenges faced by our customers, we established a local consulting subsidiary in Vietnam in July 2023 and an investment company in April 2024, and expanded into new business areas such as the advertising business.
We have also been steadily deepening the existing consulting areas that have been developed since the previous medium-term management plan, and in particular, consulting to resolve issues related to personnel systems and human resources is growing steadily, as it is an area where customer needs are high. Furthermore, in our pursuit of the "evolution of a general consulting group," we are developing consulting personnel as a specialized consulting group.
I place importance on revenue per specialized consulting personnel as a metric to measure the evolution of our specialized consulting group, and that is because I believe that the consulting fees we receive from
customers are a reflection of the value they place on the services we provide. Currently, the revenue per specialized consulting personnel is ¥15.0 million, which is already on par with specialized consulting firms. Going forward, however, we aim to increase the added value of our consulting services to ¥20.0 million.
We define the well-being of retail customers as a state where retail customers can live without anxiety regarding the future through realization of steady asset formation, etc. in line with life plans appropriate for the era of 100-year lifetimes, and I believe that supporting the improvement of financial literacy in regional communities is one of the major roles of a regional financial institution. In FY 2023, we conducted financial education activities at schools and workplaces for 4,132 people in the asset formation age group who will be the future of their communities. Consequently, we have made an upward revision to the sustainability KPI for the number of financial education participants for FY 2030 from 10,000 to 30,000, and will be more actively involved in the life design of our younger customers than ever before.
P.28-30 "Retail Customer Strategy and Corporate Customer Strategy"
Support for employees
We define the well-being of employees as a state where employees can fully demonstrate their individual capability and achieve self-realization in a motivating and comfortable work environment. I believe that in order to strengthen the power of the Bank to support the communities and our customers, we must first thoroughly develop the power of our employees to support each other.
Through the activities of our badminton and table tennis teams that play at the works team league level, the Bank is actively involved in the promotion of sports in regional communities, including coaching junior players who will lead the next generation and holding various lectures. In May 2024, we held a home match of the Japan Table Tennis League in Kagawa Prefecture, which attracted a large cheering squad of over 500 people, and I believe that the players and the employees who participated
07 The Hyakujushi Bank, Ltd . Integrated Report 2024 | The Hyakujushi Bank, Ltd . Integrated Report 2024 08 |
Hyakujushi Group's Vision
Message from the President
such as 1st grade Certified Skilled Professional of Financial Planning and management consultant.We actively support voluntary self-development that individuals wish to pursue in order to develop diverse human resources.
Furthermore, we introduced the 114 Meister system in FY 2017 as an in-house certification system, helping employees with their efforts to obtain qualifications in fields of their choice.This system classifies banking operations into eight fields including consulting, financing management, life planning, and DX, and three levels of qualification are provided in each field, which are Officer (beginner level), Leader (advanced level), and Meister (top level).The number of Meister holders
introduced 1-on-1 meetings across all branches.These are meetings that were conducted on a trial basis at some branches and headquarters and aim to improve the engagement score by strengthening trust through improving the coaching skills of supervisors and encouraging awareness and autonomous actions among employees. Although the Bank's current engagement score is characterized by a favorable score for the work environment and human relations, we recognize there are challenges in areas such as empathy for the mission and vision and understanding of management strategy, where scores are lower than the benchmark. I
would like to focus on fostering engagement by visiting the field as much as possible, explaining the vision we aim for in Long-term Vision 2030 in detail, and exchanging opinions with employees.
I regularly tell employees that it is important not to act passively but to take action proactively, voluntarily, and positively in such a rapidly changing era. I would like to instill a culture where each employee takes action with the determination that we will change the Hyakujushi Group by ourselves.
P.19-22 "HRX Initiatives"
is on the rise every year. In this manner, we aim to build a human resource portfolio necessary for achieving the "evolution of the general
Strengthening the "Power of Support" with DX
in the cheering may have truly felt the power of supporting each other toward a common goal. I would like to create a Team 114 where every member with diverse personalities and abilities gives due consideration to how to contribute to the team, drawing on the "Power of Support" to achieve results beyond expectations.
To achieve my vision of Team 114, the medium-term management plan positions HRX (human resources transformation) as a growth engine that maximizes human capital by linking management strategy with human resource strategy, focusing on two pillars: strengthening human resource capability and fostering engagement.
Firstly, in terms of strengthening human resource capability, we are engaged in various hands-on training programs aimed at realizing the "evolution of the general consulting group," set forth in the medium-
consulting group" by doubling our current investment in human capital, including education and training, to ¥400 million in the final year of the medium-term management plan, and maximize our ability to provide value to customers and communities through strengthening our human resource capabilities.
Next, in terms of "fostering engagement," we aim to create a workplace where everyone can work with peace of mind, promote the active participation of women, expand the roles of senior employees, and strengthen health management.The Bank has been certified as a KENKO Investment for Health Outstanding Organization for six consecutive years since its Health Management Declaration in August 2018. Over the past year, it has conducted systematic initiatives such as intra-bank walking events and group analysis of stress checks, resulting in our recognition as the only financial institution in Shikoku in the White 500 Large Enterprise Category.
In addition to these initiatives that improve the ease of working for employees, I want to focus on initiatives that enhance the willingness to voluntarily contribute to the organization, which is the essence of the word "engagement."
The Group has defined DX as the growth engine that will transform business through data and digital technology, and work to provide customers and communities with new values and experiences as well as dramatically improve productivity.
In terms of providing customers and communities with new values and experiences, we are enhancing the functions of the 114 Banking App for retail customers and preparing to introduce the corporate portal for corporate customers to strengthen non-face-to-face channels for securing various contact points.
Furthermore, with respect to supporting our customers' DX initiatives, we launched the ICT consulting services in October 2020, which has become one of the Bank's strengths over the past year. At the start of the service, some of our external partners were concerned that we might be spending too much time on consulting. Despite those concerns, we remained true to our policy of providing ICT consulting that focuses not on IT or digital tools alone, but on supporting our customers' efforts in their overall transformation, including DX.
As a result, the number of ICT consulting initiatives in FY 2023 reached 104, significantly ahead of schedule in achieving the sustainability KPI of
100 initiatives annually by FY 2030.The feedback from our customers we have been supporting may point us to the factors behind this. It is clear that in regions where the decline in the workforce is accelerating, promoting DX to improve productivity and reduce costs has become unavoidable steps for improving corporate competitiveness. However, because there is a shortage of DX human resources in these regions, I believe that our ICT consulting is effectively synonymous with our bank taking on the role of DX personnel within these regions.We will continue to focus our efforts in this area.
In terms of "dramatic improvement of productivity," we introduced over the past year in-store tablet devices to reduce the burden on customers of filling out documents and to shorten waiting times, and promoted the adoption of online processes for personal loans and financing contracts, aiming to improve customer convenience and save paper resources. By improving operational efficiency within the Bank through these efforts, we aim to create time and personnel for face-to- face consulting sales to solve customer issues.
P.23-26 "DX Initiatives"
term management plan.These include the intra-bank exchange system which aims to develop and discover specialized personnel through
Since April 2021, the Bank has been measuring the overall score of the engagement survey Wevox, and starting from June 2024, we have
Enhancing corporate value
short-term headquarters work experience, in addition to career training for different generations.We also established the 114 Reskilling Support System in October 2023, which provides financial assistance for employees to learn subjects of their choice (such as language schools or external seminars) regardless of their current job, as well as for the qualification exams specified by the intra-bankself-development system,
FY 2023 result | FY 2025 target | |||
Investment in human | ¥213 million | ¥400 million | ||
capital | ||||
Engagement score | 65 pt | 69 pt | ||
Improving price book-value ratio (PBR) has been receiving attention as a measure to enhance corporate financial value.We will strive to achieve the ROE target of 5% as set out in our Long-term Vision at the earliest possible stage and ensure profitability that exceeds shareholders' expectations by continuing to implement initiatives that realize the well-being of all stakeholders through the "Power of Support." Moreover, I consider my top priority to be enhancing the value of the Group as an
organization within regional communities and the corporate value of the Group by strengthening engagement with shareholders and other stakeholders regarding the progress of these initiatives.
We are determined to work with all our strength to ensure that 50 or 100 years from now, people will say, "I am so glad Hyakujushi Bank is here for us." I sincerely thank you and humbly request your continued support and patronage of the Bank.
09 The Hyakujushi Bank, Ltd . Integrated Report 2024 | The Hyakujushi Bank, Ltd . Integrated Report 2024 10 |
Hyakujushi Group's Vision
Hyakujushi Group'sValue Creation Process
INPUT
Hyakujushi Group's strengths
Social and relational capital
Overwhelming market share and presence in Kagawa Prefecture
Loans and deposits shares: | No.1 | |
Customer base | ||
Retail customers: | Approx. 1.21million | |
Corporate customers: | Approx. 50,000 | |
Extensive network of branches | 11 prefectures |
ACTIVITY | OUTPUT |
Management strategy | The value we offer |
Enhance local community well-being
1 Prosper together with customers and communities
Corporate | Create unique local industries | ||
2 | Create a vigorous corporate culture | Discover attractive local | |
Vision | |||
3 | Ensure sound business management and enhance corporate value | resources | |
Solve key environmental and | |||
social issues | |||
Business deployment based on the Hyakujushi Group Material Issues | |||
Enhance corporate customer well-being | |||
OUTCOME
The values we want to achieve
Environment and social values
Realize a society with well-being where local community members can continue enjoying a better life.
Achieve sustainability
Human capital
Personnel with advanced qualifications SME management consultants: 29 1stgradeCertifiedSkilledProfessionalofFinancialPlanning:127
114 Meister system*1
Certified Meisters: | 73 |
*1 The Bank's internal system for certifying three levels of qualification, with Meister being the highest level, in each of the eight fields related to banking services.
Intellectual capital
Provision of solutions as Group-wide efforts Financial and non-financial services and knowledge
Financial capital
Deposits and negotiable certificates of deposit: | ¥4.7 trillion |
Loans and bills discounted: | ¥3.4 trillion |
Consolidated capital ratio: | 9.12% |
External ratings*2: | "A" (JCR), "A-" (R&I) |
*2 (as of March 31, 2024)
Natural capital
Regional environment with few natural disasters
Warm and rich natural environment
Transportation and logistics hub Abundant tourism resources
Efforts to revitalize the local economy | Respond to the era of 100-year lifetimes | ||
Establish an environment where diverse | Digital transformation of our operations and local | ||
human resources can participate and grow | communities | ||
Initiatives to address environmental | Establish a sustainable management foundation | ||
issues such as climate change | |||
New Medium-term Management Plan
As Phase 1 of our Long-termVision, we will advance transformation based on the three growth engines (SX, HRX, and DX), and accelerate initiatives aimed at the evolution of the general consulting group.
The 3 transformations that will serve as growth engines
HRX | SX | DX | |
Human ResourcesTransformation | Sustainability | Digital Transformation | |
Transformation | |||
Key Strategies | |||
Evolution of the general consulting group | Dramatic improvement of productivity | ||
Enhancement of employee well-being | Establish a sustainable management foundation |
Power of Support
Exercise a financial intermediary function
Support the solving of financial and non-financial-related management issues
Enhance retail customer well-being
Improve financial literacy
Offer financial services by the best balance of real and digital
Support total life design
Enhance employee well-being
Reform corporate culture by encouraging employees to take on challenges
Promote diversity and inclusion (D&I)
Establish a comfortable workplace environment
Professional development Enhance health management
Enhance shareholder value
Enhance mid- to long-term corporate value
High-transparency information disclosure
Implement sustainability management Enhance shareholder return
KPIs
Long-termVision 2030
Through evolution of the general consulting group, we will create a society with well-being together with local community members
Achieve environmental/social values as well as economic values
Economic values
Enhance the Hyakujushi Group's management sustainability through improving profitability and strengthening management foundation.
Long-term target levels
Consolidated ROE of around 5% Consolidated capital ratio of around 10%
Strengthen management capital and contribute to the solution of social issues
External | Poor regional economic growth Declining population, declining birthrate and aging population |
Shift to decarbonization and a circular economy | Social and economic digital shift Ongoing low interest rate environment |
environment | |
Intensified competition due to entrants from outside the | industry Expansion of business areas due to deregulation |
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Hyakujushi Group's Vision
Long-termVision (theVision Hyakujushi Group Aims for over the LongTerm)
In addition to the declining population, falling birthrate, and aging population, issues related to sustainability in the region are becoming increasingly diverse and complex, such as the transition to a decarbonized, recycling-oriented society and the response to the accelerating digital shift. In order for us, the Hyakujushi Group, to grow sustainably together with the community in this changing environment, we need to enhance the sustainability of our management by proactively addressing local sustainability issues from a long-term perspective.
Based on this awareness, the Hyakujushi Group has identified key sustainability issues that should be prioritized as the "Hyakujushi Group Material Issues" and formulated the "Long-term Vision 2030" as a long-term
direction to resolve such material issues.
In order to realize our vision, we are currently working on various measures under the phase 1 of the medium-term management plan, "Let's Create a Good 114 ."
g | ||||||||
in | ||||||||
t | ||||||||
s | ||||||||
a | ||||||||
c | ||||||||
k | ||||||||
c | ||||||||
a | ||||||||
B |
The Hyakujushi Group'sVision anticipating FY 2030
Long-termVision 2030
Through evolution of the general consulting group, we will create a society with well-being together with local community members
Phase 1 | ||
Medium-term management plan | Phase 2 | Phase 3 |
"Let's Create a Good 114 " | ||
Solve Hyakujushi Group Material Issues |
Create local communities with well-being
New business "challenge" areas
Regional | Investment | |
vitalization | company | |
Previous medium-term management plan | |||
Long-termVision 2030 | |||
"Try | Mirai (Future)!" | ||
Strengthen consulting function and explore new business | |||
Brand development for local resources | |||
Signed an agreement with Takamatsu City | |||
regarding the Corporate Version of Hometown |
Well-being of our
corporate customers
A state whereby corporate
customers can gain a real sense
of their business growing through solving important financial and non-financial management issues.
Well-being of the
community
A state where future generations can continue living with peace of mind by vitalizing the local economy and solving key environmental and social issues.
Well-being of our retail customers
A state where retail customers can live without anxiety regarding the future through realization of steady asset formation, etc. in line with life plans appropriate for the era of 100-year lifetimes.
Advertising | Environment | |
related | ||
Digital/BPO | Senior life | |
support | ||
Consulting area
Business | Business continuity | |
management and | ||
revitalization | ||
Human resources | ICT | |
Overseas support | Area design | |
Traditional bank operations
Promote sustainable finance and other
high value-added products
Introduce new products and services
utilizing digital technologies
Enrich our consulting service lineup and | Tax Donation System P.27 | Evolution | |||||
build a sales framework | Establishment of a specialized investment | ||||||
into the general | |||||||
subsidiary P.30 | |||||||
Expansion of carbon neutrality | consulting group | ||||||
support services P.36 | |||||||
Transformation | Strengthen ability to find solutions | New business areas | |||||
to a general consulting | to issues and increase profit of main | ||||||
group | |||||||
business | |||||||
Launched Manufacturing Support Service | P.29 | ||||||
Established a local subsidiary in Vietnam | P.30 | Consulting area | |||||
Introduction of new sustainable finance products | ||
P.30 | Traditional bank | |
Introduction of support service for opening | ||
investment trust accounts and NISA accounts online | operations | |
Introduction of in-store tablet devices | P.26 | |
Sophisticate finance area | Create synergism by merging | |
(new products/digitalization) | financial/non-financial |
Non-financial area
Financial area
Well-being of employees
A state where employees can fully demonstrate their individual capability and achieve self-realization with a sense of being in a motivating and comfortable work environment.
Enhancement of the Hyakujushi Group's
management sustainability
Enhancement of shareholder value
at | ||||||||
environmental/socialAchievevalues economicastimesamethe values | ||||||||
Environment and | Economic values | |||||||
social values | Long-term target levels | |||||||
Achieve sustainability KPIs | Consolidated ROE of around 5% | |||||||
relating to | Consolidated capital ratio of | |||||||
Group material issues | around 10% | |||||||
13 The Hyakujushi Bank, Ltd . Integrated Report 2024 | The Hyakujushi Bank, Ltd . Integrated Report 2024 14 |
Hyakujushi Group's Growth Strategy
Sustainability Management Framework
Governance system related to sustainability
The Bank has established a framework for the promotion of sustainability-related measures under the supervision of the Board of Directors, to help solve various issues local communities face from a long-term perspective in order to realize our Corporate Vision.
Specifically, we have established the Sustainability Committee chaired by the President, to formulate and implement policies, plans, and initiatives to address social and environmental opportunities and risks, including climate change. Important matters are submitted or reported to the Board of Directors.The Audit and Supervisory Committee members and the General Manager of the Auditing Division are involved in the formulation of initiatives and discussions on strategies and measures as observers in the Sustainability Committee, and receive progress reports. In addition, the achievement of sustainability management targets (reduction of CO2 emissions, increase in the share of females in junior management, etc.) is taken into account in determining the officer remuneration from FY 2023 onward.
We aim to promote and strengthen sustainability management through cross-organizational discussions on initiatives aimed at improving the sustainability of customers and local communities.
Hyakujushi Group Material Issues
Material issue | Opportunity and risk | Main initiatives | Sustainability KPI | FY 2023 | Corresponding | ||||
result | SDGs | ||||||||
Opportunities | |||||||||
Expansion of areas for industry-academia- | No. of initiatives aimed at | ||||||||
government-finance collaboration for regional | Revitalize "towns" by | solving local issues: 150 | 23 | ||||||
revitalization | establishing co-creation | (cumulative total up | |||||||
Efforts to | Expansion of consulting needs due to the | frameworks with local | to FY 2030) | ||||||
increasing sophistication and diversity of | |||||||||
public authorities, etc. | |||||||||
revitalize the | management issues of local companies | ||||||||
As the Hyakujushi Group | |||||||||
local economy | Risks | ||||||||
overall, support corporate | No. of consultations, etc. | ||||||||
Reduced sustainability due to declining local | |||||||||
population and sluggish economy | customers in solving the | provided to corporate | 1,424 | ||||||
issues they face | |||||||||
Deterioration of corporate performance due to | customers: 3,000 a year |
Board of Directors | ||||||||
Supervision | ||||||||
Sustainability Committee | ||||||||
Report | ||||||||
President, Deputy Chairperson: | ||||||||
Director in charge of Corporate Planning
Members: Executive Directors and Managing Executive Directors at head office
SustainabilityWorking Group Members:All Divisions at head office and branches (excluding Auditing Division)
Secretariat: Corporate Planning Division, Public Relations and SDGs Promotion Office
Sustainability Committee
Roles
Formulating policies on efforts to resolve various sustainability-related issues in such realms as the environment, society, and economy
Deliberating on strategy and measures and managing progress of the implementation thereof
Main matters deliberated in FY 2023
Formulation of the FY 2023 Sustainability Plan and report on implementation in FY 2022
Interim report on the FY 2023 Sustainability Plan
delayed response to local companies' management | (FY 2030) | ||||||||
issues | |||||||||
Opportunities | No. of customers provided | ||||||||
As the Hyakujushi Group | with asset formation | 114,000 | |||||||
Greater asset formation/asset management needs | support: 160,000 (FY | ||||||||
Respond to the | overall, support retail | ||||||||
in anticipation of the era of 100-year lifetimes | 2030) | ||||||||
customers with their total | |||||||||
era of 100-year | Risks | ||||||||
life design | |||||||||
No. of people who have | |||||||||
lifetimes | Reduced competitiveness due to delayed response | Provide financial education | completed financial | ||||||
to social structure changes triggered by further | to future generations | education courses: 30,000 | 4,132 | ||||||
progression of the aging society | |||||||||
(cumulative total up | |||||||||
to FY 2030) | |||||||||
Opportunities | Through promotion of D&I, | Sustain improvement of | 65pt. | ||||||
establish a workplace | the engagement score | ||||||||
Establish an | Sustainable growth of human resource capability | environment in which diverse | |||||||
by giving employees a sense of well-being |
Material issue identification process
Having recognized the current external environment and ESG elements required by stakeholders, the Bank has sorted the major themes our Group should address, and identified the "Hyakujushi Group Material Issues."
1 | Selection of elements to be | Selection of a comprehensive list of factors that are important to local expectations, various ESG | ||
considered | issues, and the local community and stakeholders | |||
2 | ||||
Prioritization of issues | Prioritization of the materiality through examining selected issues from the perspectives of our own | |||
sustainability and social environmental sustainability. | ||||
[Prioritization of issues] | [Identification of material issues] | |||
environment | Create new values through promoting | human resources can | Share of females in junior | ||||||
participate | management*1: at least | ||||||||
where diverse | participation by a diversity of human resources | ||||||||
Improve motivation by creating | 30% (by the end of FY | ||||||||
human | Risks | ||||||||
challenging opportunities and | 2026)*2 | ||||||||
resources can | Decline in engagement and outflow of human | improve work comfortability | *1 Junior management refers to | 29.0% | |||||
participate and | resources due to delayed response to changes in | by enriching work-life balance | positions of Deputy Branch | ||||||
social structure and diversification of values | Implement health enhancement | Managers, Deputy Chiefs or | |||||||
grow | Decline in human resource capability due to | above (and includes | |||||||
promotion measures aimed at | management positions) | ||||||||
reduced QOL (quality of life) of employees | |||||||||
promoting health management | *2 New target to be set by FY | ||||||||
2026 | |||||||||
Opportunities | Work process reform | ||||||||
Digital | leveraging digital | No. of digitally-connected | |||||||
Digital shift of work and services through | technologies and | customers: 400,000 (FY | 59,000 | ||||||
transformation | advancements in digital technologies | sophistication of digital | 2030) | ||||||
of our | Increased solution needs in anticipation of digital | channels | |||||||
transformation of local communities | Enrich social media/ | ||||||||
operations and | |||||||||
website content, etc. |
Large
Impact on the sustainability of society
Biodiversity | Era of 100-year lifetimes | |||
Deforestation | Local development/ | |||
DX promotion | ||||
Ocean acidification | local economy revitalization | |||
Response to the next generation | ||||
Recycling | Local business support | |||
Response to environment issues | ||||
Microplastics | ||||
Enhance employee well-being | ||||
Local volunteers | Web3 | (human capital management) | ||
Public policy | Local communities | Strengthen governance/ | ||
management foundation | ||||
Management of the legal | Expand business areas | |||
environment | Respond to new regulations | |||
Impact on the Hyakujushi Group's sustainability | Large |
Material issues
E
Initiatives to address environmental issues such as climate change
S
Efforts to revitalize the local economy
Respond to the era of 100-year lifetimes
Establish an environment where diverse human resources can participate and grow Digital transformation of our operations and local communities
G
Establish a sustainable management foundation
local | Risks | Double the number of ICT | |||||||||
Reduced competitiveness due to delayed response | As the Hyakujushi Group | ||||||||||
communities | to digital transformation and new entrants from | overall, support digital | consulting business | 104 | |||||||
outside the industry | transformation of customer | partners (FY 2030) | |||||||||
operations | |||||||||||
Opportunities | Leading initiatives aimed at | CO2 emissions (Scope 1 & | |||||||||
Initiatives to | achieving a decarbonized/ | 2): 50% reduction | -58.1% | ||||||||
Greater needs for finance solutions aimed at | |||||||||||
circular society for the | compared with FY | ||||||||||
address | solving environmental issues | 2050 carbon neutrality | 2013 level (FY 2030) | ||||||||
environmental | Risks | target pledged by the | |||||||||
Sustainable finance | |||||||||||
Weakened social confidence due to insufficient | Japanese government | ||||||||||
issues such as | Strengthen initiatives aimed | working budget: ¥500.0 | ¥195.4 billion | ||||||||
climate change | response to climate change, etc. | billion, of which ¥200.0 | (including | ||||||||
Deterioration of local business performance due | at decarbonization of | ||||||||||
billion is allocated to | ¥84.6 billion for | ||||||||||
P.35 | to extreme weather events and inability to adapt | customers' operations | |||||||||
environmental initiatives | environmental | ||||||||||
to a decarbonized society | through sustainable finance, | (cumulative total for FY | initiatives) | ||||||||
etc. | |||||||||||
2021 through FY 2030) | |||||||||||
Opportunities | Strengthen governance | Consolidated | |||||||||
Stronger business foundation through |
3 | Discussion by | Discussions in the Sustainability Committee from the perspective of the significance of the |
committee, etc. | company's presence in the region as a regional financial institution, the status of social issues that | |
influence value creation, and the relationship with management issues. | ||
4 | ||
Finalization by Board of | The Board of Directors finalized the Hyakujushi Group Material Issues that were discussed and | |
Directors | identified by the Sustainability Committee. |
sophistication of governance system and profit | Enhance corporate value | Systematic reduction of | net asset ratio | ||||||
Establish a | through profit structure | cross-shareholdings | |||||||
structure reforms, etc. | of 36.5% | ||||||||
sustainable | reforms | ||||||||
Risks | Strengthen capital strategy | ||||||||
management | Weakened social confidence due to insufficient | ||||||||
foundation | governance | and sophisticate risk | |||||||
management system | Enhance dialogue with | ||||||||
Suspension of business activities or weakened | |||||||||
Strengthen system/digital | stakeholders | ||||||||
social confidence due to delayed response to | |||||||||
foundations | |||||||||
cyber attacks, disasters, etc. | |||||||||
15 The Hyakujushi Bank, Ltd . Integrated Report 2024 | The Hyakujushi Bank, Ltd . Integrated Report 2024 16 |
Hyakujushi Group's Growth Strategy
Medium-term Management Plan
The medium-term management plan, which covers the three-year period from FY 2023, is positioned as a period for accelerating initiatives aimed at the "evolution of the general consulting group," with the three transformations of SX, HRX, and DX as growth engines, toward the realization of our Long-termVision 2030.
This name contains our sentiment of offering high value-added services to | |||||||||||
Significance | customers and communities so that they may come to say, "Hyakujushi is | ||||||||||
Name | of name | good!," thus creating a "good world" in which local community members | |||||||||
can enjoy a true sense of well-being.
Period: April 2023 to March 2026
As Phase 1 of our Long-term Vision, we will advance transformation based on the three
policy
Basic growth engines (SX, HRX, and DX), and accelerate initiatives aimed at the evolution of the
general consulting group.
Key | Evolution of the general consulting group | Enhancement of employee well-being | |||||||||
Dramatic improvement of productivity | |||||||||||
strategies | |||||||||||
Establishment of a sustainable management foundation | |||||||||||
Growth | / | / | |||||||||
Promoting three transformations | SX [ Sustainability ] | HRX [ Human Resources ] | DX [ Digital ] | ||||||||
engines | |||||||||||
supporting | -Transformation - | ||||||||||
strategies | |||||||||||
SX (Sustainability) | : Achieve sustainability for both Hyakujushi Group and local communities | ||||||||||
HRX (Human Resources) : Maximize human capital by linking management strategy with human resource strategy | |||||||||||
DX (Digital) | : Transform business through data and digital technology |
Target item/fiscal year | FY 2022 | FY 2023 | FY 2025 | ||||
(finalyearofpreviousmedium-termmanagementplan) | (finalyearofcurrentmedium-termmanagementplan) | ||||||
Result | Result | Management target | |||||
Profitability | Profit | ¥9.1billion | ¥9.6billion | ¥8.5 | billion | ||
(consolidated) | (Profit attributable to owners of parent) | or more | |||||
Soundness | Capital ratio | 9.10 % | 9.12 % | Around | 9.0% | ||
(consolidated) | |||||||
Efficiency | OHR | Around | |||||
76.1 % | 74.9 % | 70.0% | |||||
(non- | (gross operating profit basis) | ||||||
consolidated) |
Aiming for results that significantly exceed targets
Create local communities with well-being
Key Strategy 1 | Evolution of the general consulting group P.27 | |||||||
Community co-creation | Corporate customer strategies | Retail customer strategies | Group strategies | |||||
Promote HRX
P.19
Key Strategy 2 | Enhancement of | employee well-being | Dramatic improvement of productivity Key Strategy 3 | |||||||||||||||
Foster engagement | Strengthen human resource capability | Work reforms | Channel reforms | |||||||||||||||
Key Strategy 4 | Establishment of a sustainable management foundation | |||||||||
Stabilize securities management | Build system/digital foundations | Ensure thorough cost return management | Strengthen governance | |||||||
Enhance Hyakujushi Group's management sustainability
Promote SX
Enhance shareholder value
Promote DX
P.23
17 The Hyakujushi Bank, Ltd . Integrated Report 2024 | The Hyakujushi Bank, Ltd . Integrated Report 2024 18 |