JAPAN POST BANK : Investors Meeting FY2024/3

Investors Meeting FY2024/3

May 21, 2024

Director, President and Representative Executive Officer

Takayuki Kasama

Disclaimer

This document is written solely for the purpose of disclosing relevant information regarding JAPAN POST BANK Co., Ltd. ("Japan Post Bank") and its consolidated subsidiaries (the "Japan Post Bank Group"). This document does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States, Japan or any other jurisdiction.

This presentation contains forward-looking statements including forecasts, targets and plans of the Japan Post Bank Group. These statements are based on estimates at the time in light of the information currently available to Japan Post Bank. The statements and assumptions may prove to be incorrect and may not be realized in the future.

Any uncertainties, risks and other factors that may cause such a situation to arise include, but are not limited to, risks related to the effectiveness of risk management policies and procedures; market risks, market liquidity risks, credit risks and operational risks (such as risks related to Japan Post Bank's IT systems, Japan Post Bank's reputation, natural disasters, litigation and violations of applicable laws or regulations); risks related to Environmental, Social and Governance, or ESG, factors including climate change; risks related to business strategy and management planning; risks related to the expansion of the scope of operations; risks related to the business environment; risks related to Japan Post Bank's relationship with JAPAN POST HOLDINGS Co., Ltd. and JAPAN POST Co., Ltd.; risks related to domestic and overseas monetary policies; and other various risks. Please also see the Securities Report and the Semi-annual Securities Report for material facts that Japan Post Bank recognizes as potentially affecting the Japan Post Bank Group's actual results, performance or financial position. The Japan Post Bank Group's actual results, performance or financial position may be materially different from those expressed or implied by such forward-looking statements.

The statements in this document are current as of the date of the document or the date otherwise specified, and Japan Post Bank has no obligation or intent to keep this information up to date.

The information concerning companies or parties other than the Japan Post Bank Group and the Japan Post Group is based on publicly available and other information as cited, and Japan Post Bank has neither independently verified the accuracy and appropriateness of, nor makes any warranties with respect to, such information. The information of the document may be revised without prior notice.

Consolidated Subsidiaries, etc. (as of Mar. 31, 2024)

	13 companies
Consolidated subsidiaries	Principal companies:
JAPAN POST BANK LOAN CENTER Co., Ltd.
	Japan Post Investment Corporation
Affiliates accounted for	ATM Japan Business Service, Ltd.
by the equity method	JP Asset Management Co., Ltd.

Note: All Japanese yen figures in the financial statements of JAPAN POST BANK Co., Ltd. (the "Bank") and its consolidated subsidiaries have been rounded down, unless otherwise noted.

Note: Accordingly, the total of each account may not be equal to the combined total of individual items.

Copyright© JAPAN POST BANK All Rights Reserved.

1

01 Executive Summary

02 FY2025/3 Financial Forecasts

03 The revision of Medium-term Management Plan (Mid-term Plan)

04 Appendix

P.35

P.13

P.17

P.58

Financial Data (Non-consolidated Basis) disclosed on the Investors Meeting materials until FY2024/3 H1, is available in Selected Financial Information. Selected Financial Information For the Fiscal Year Ended March 31, 2024 https://www.jp-bank.japanpost.jp/en/ir/press/2024/pdf/pr240515_03.pdf

Copyright© JAPAN POST BANK All Rights Reserved.

2

1. Summary	2. Forecasts	3. Revision of	4. Appendix
Mid-term Plan

Executive Summary (1) FY2024/3 Results

For FY2024/3, net income attributable to owners of parent reached JPY 356.1bn, the highest on record since the Bank was listed on the stock exchange, and also exceeded the full-year forecast of JPY 335.0bn.

The dividend per share increased by JPY 1 to JPY 51.

Results of Operations (Consolidated)

Net income attributable to owners of parent JPY 356.1bn [Achievement rate to forecast 106.3%]

Net ordinary income		JPY 496.0bn
	[Achievement rate to forecast 105.5%]
Net interest income	JPY 715.7bn	[ YoY JPY (80.6)bn ]
Net fees & commissions	JPY 153.0bn	[ YoY JPY +5.2bn ]
Net other operating	JPY (135.1)bn	[ YoY JPY (247.2)bn ]
income (loss)
G&A expenses	JPY 929.1bn	[ YoY JPY +2.8bn ]
(Exclude non-recurring losses)
Non-recurring gains	JPY 691.6bn	[ YoY JPY +366.0bn ]
(losses)

Investment Assets (Non-consolidated)

	z		JPY 231.0tn		[YoY JPY +4.6tn]
Investment assets
		Securities		JPY 146.4tn		[YoY JPY +13.6tn]
				JGBs		JPY 43.8tn		[YoY JPY +5.7tn]
				Foreign securities, etc.		JPY 86.6tn		[YoY JPY +8.2tn]

More than 7 years to 10 years JPY 5.1tn

[QoQ JPY +1.9tn]

Net Unrealized Gains (Losses) on Financial Instruments

(Non-consolidated)

Unrealized Gains (Losses) on Financial Instruments (Available-for-sale) (After taking into consideration gains (losses) from hedge accounting)

JPY 122.4bn

[YoY JPY (91.5)bn]

FY2024/3 Annual Dividend

UP Dividend per share JPY 51 [Dividend payout ratio: 51.8%] (DPS increased by JPY 1 from the dividend forecast for FY2024/3 and the dividend for FY2023/3)

Capital Adequacy Ratio and CET1 Ratio (Consolidated)

Capital adequacy ratio	15.01%	[YoY (0.51)％]
CET1 ratio (estimate) *	13.23%	[YoY (0.78)％]

* On the finalized Basel Ⅲ basis. Excluding unrealized gains on available-for-sale securities

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3

1. Summary	2. Forecasts	3. Revision of	4. Appendix
Mid-term Plan

Executive Summary (2) FY2025/3 Financial Forecasts

For financial forecasts, net income attributable to owners of parent is expected to amount to JPY 365.0bn and dividend per share is planned to be JPY 52.

Compared to FY2024/3, we expect an increase in income from the yen interest rate portfolio and recovery of private equity funds (PE), etc.

Earnings Forecasts (Consolidated)

(billion yen)

Note: The addition of total changes to the FY2024/3 results does not equal the

: Positive factors

: Negative factors

FY2024/3

FY2025/3

Increase

forecasts for FY2025/3 due to rounding, other ordinary income/expenses and

(Actual)

(Forecast)

(Decrease)

(billion yen)

similar factors.

(A)

(B)

(B) - (A)*2

Net interest income, etc. 44.0

Net interest

1,267.8

1,312.0

44.0

income, etc.*1

42.0

Net fees and

153.0

150.0

(3.0)

Net ordinary

Credit assets*4

commissions

Net ordinary

Income

General and

Income

86.0

(3.0)

8.0

525.0

927.8

936.0

8.0

496.0

65.0

Net fees

G&A

administrative

Yen interest rate

(268.0)

and

expenses

expenses

portfolio*3

Others

commissions

Net ordinary

496.0

525.0

29.0

119.0

(foreign

income

government

Net

Net

bonds, etc.)

income

Net income

income

365.0

attributable to

356.1

365.0

9.0

356.1

•Increase in JGB interest

Gains from

PE, etc.*5

owners of parent

income

sales of

*1 Net interest income, etc. = Interest income - Interest expenses

•Increase in net interest

stocks, etc.

Rebound in PE exit activity

income due to higher yen

(including gains (losses) on sales, etc.)

short-term interest rates

*2 Figures are rounded.

•Increase in interest

Decrease in sales of stocks

expenses on deposits, etc.

associated with operations

FY2024/3

FY2025/3

Increase

(Actual)

(Forecast)

(Decrease)

for risk controls and other

factors

(A)

(B)

(B) - (A)*2

Dividend per

JPY 51

JPY 52

JPY 1

FY2024/3

*3 Income from JGBs, etc., income related to yen interest rate risk-taking in risk assets, interest expenses on deposits, etc.

FY2025/3

share

(Actual)

*4 Income related to foreign bond investment trusts, in-house corporate bonds, real estate funds (debt), direct lending funds, etc.

(Forecast)

(excluding income related to yen interest rate risk-taking)

*5 Income related to PE and real estate funds (equity) (excluding income related to yen interest rate risk-taking)

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4

1. Summary	2. Forecasts	3. Revision of	4. Appendix
Mid-term Plan

Executive Summary (3) Overview of Mid-term Plan Review

The FY2026/3 target for net income attributable to owners of parent has been revised upward to "JPY 400.0bn or more" (from the initial target of "JPY 350.0bn or more"), and the Bank is aiming to increase dividends in line with profit growth.

We are targeting an ROE of "4% or more" during the current Mid-term Plan and "5% or more", exceeding the cost of shareholders' equity, in the early stage of the next Mid-term Plan.

Financial Targets / Policy on Shareholder Returns		Medium- to Long-Term ROE Targets

						400.0
					365.0	or more
Net income				or more
	356.1
(billion	yen)
325.0

Achieved the original Mid-term Plan target two years ahead of schedule

Dividend
per share
(yen)
			52
	50	51	Aiming to increase
			dividends in line with
			profit growth
	FY2023/3	FY2024/3	FY2025/3	FY2026/3
	Actual	Actual	Targets	Targets
Dividend	57.5%	51.8%	51.5%	―
payout ratio
OHR	67.1%	65.3%	65%	62% *
or less	or less *

Aim for ROE of 5% or more	Strive for
above cost of shareholders' equity early
further growth
in the next Mid-term Plan
over the
(Net income in the order of JPY 500.0bn)	medium to
	long term

	Cost of shareholders' equity: approx. 5%
	4.0%	Continuously
	3.77% or more
3.80%	increase ROE
or more	and improve
	3.74％	corporate value
	(to a PBR of
	3.44%	over 1x)
		while
		controlling
		the cost of

Period under the current		Period under the next	shareholders'
	equity
	Mid-term Plan		Mid-term Plan
			1st Step	Next Step
FY2022/3	FY2023/3	FY2024/3	FY2025/3	FY2026/3	FY2027/3 ~

Notes: 1. Consolidated basis.

2. ROE is based on shareholders' equity; OHR includes gains (losses) from money held in trust, etc.

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5

1. Summary	2. Forecasts	3. Revision of	4. Appendix
Mid-term Plan

Executive Summary (4) Restructuring of the Yen Interest Rate Portfolio

Seizing the reversal of the trend in yen interest rates, the Bank is promoting an investment shift from due from banks, etc. to JGBs and is restructuring its yen interest rate portfolio.

The balance of JGBs, which had been decreasing under the low interest rate environment, expanded after bottoming out at the end of June 2023, and is growing steadily.

Balance of JGBs*		Balance of JGBs* Based on the Remaining Time
	to Maturity (As of Mar. 31, 2024)
(trillion yen)		Note: Figures in [] represent changes from Dec. 31, 2023.

100									Balance of JGBs: JPY 43,862.0bn [JPY +2,231.3bn]
Over 10Y		Shrank by approx. 50%		To Reverse	(billion yen)
80	More than
		in 7 years			& Expand	Over 10 years
	7Y to 10Y
60									More than 7 years
More than
	3Y to 7Y								to 10 years	5,153.0 [+1,910.9]
40									More than 5 years
More than								to 7 years	1,377.7 [(124.9)]
20	1Y to 3Y
1Y or less								More than 3 years
							to 5 years	1,080.9 [+174.1]
0
End	End	End	End	End	End	End	End
	More than 1 year
	Mar.	Mar.	Mar.	Mar.	Mar.	Mar.	Mar.	Mar.
(trillion yen)	16	18	20	22	23	24	25	26	to 3 years	5,757.5 [(3,435.5)]
Balance of								(Final FY of the
82.2	62.7	53.6	49.2	38.1	43.8
	Mid-term Plan)
JGBs

20,003.7

[+242.4]

End Sep. 23

End Dec. 23

End Mar. 24

More than	8.1	5.8	4.6	6.5	1.3	5.1
7Y to 10Y
(Ref.)
JGB 10Y	(0.04)	0.04	0.03	0.21	0.38	0.75
Yield (%)

Source: JGB interest rate information - Ministry of Finance Japan * Except JGBs in money held in trust.

1 year or less

10,489.0 [+3,464.2]

〈Balances based on the holding purpose〉

Held-to-maturity: JPY 20,549.1bn [JPY +2,518.3bn]

Available-for-sale: JPY 23,312.9bn [JPY (287.0)bn]

Copyright© JAPAN POST BANK All Rights Reserved.

6

1. Summary	2. Forecasts	3. Revision of	4. Appendix
Mid-term Plan

Executive Summary (5) ALM Policy

We maintain and sustain a stable funding base and balance of deposits, particularly retail deposits.

We pursue an optimal investment portfolio that combines yen interest assets (JGBs, due from banks, etc.) and risk assets (foreign securities, etc.) while strengthening risk management.

(non-consolidated)>

Total Assets JPY 233tn [JPY +4.3tn]

Note: As of Mar. 31, 2024.

Note: Figures in [] represent changes from Mar. 31, 2023.

• Large amount of standby funds available for investment
• Sovereign bonds: Approx. JPY 8tn
• Corporate bonds: Approx. JPY 68tn

 Others: Approx. JPY 13tn	〈Hedge Ratio〉
 -PE: Approx. JPY 6tn	Foreign currency interest rate:
Approx. 70-80%
	Exchange rate:
	Over approx. 90%

JGBs*1

JPY 45tn

[JPY +5.6tn]

Due from banks, etc.

JPY 57tn

[JPY (10.4)tn]

Foreign securities*2

JPY 90tn [JPY +8.8tn]

Deposits

JPY 192tn [JPY (2.1)tn]

Ordinary Deposits

JPY 110tn [JPY +4.6tn]

More than 50％ are

sticky core

deposits

TEIGAKU deposits

JPY 64tn

[JPY (7.1)tn]

Others

The huge retail customer base and stable funds supported by the largest physical branch network among Japanese banks

				Retail Deposit Ratio
						Approx. 97％
Deposits
		Insured Deposit Ratio*3
Approx.
					Approx. 91％
JPY 192tn
						Number of
			Ordinary Deposit accounts
				Approx. 120 million
Number of Branches*4			Number of ATMs
Approx. 24,000				Approx. 31,200

Others		Others / Net assets
JPY 40tn		JPY 41tn
[JPY +0.2tn]		[JPY +6.4tn]

*1 Include JGBs in money held in trust.

*2 Include real estate funds, direct lending funds and infrastructure debt funds in money held in trust.

*3 Deposits that meet the requirement under the Deposit Insurance System in the Deposit Insurance Act divided by total deposits. *4 Includes post offices.

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7

Executive Summary	1. Summary 2. Forecasts	3. Revision of	4. Appendix
Mid-term Plan

(6) Impact of fluctuation in domestic and overseas interest rates on P/L (Simple Illustration)*1

The Bank's P/L is expected to improve (increase in interest income > increase in funding costs) due to higher yen long- and short- term interest rates and lower overseas short-term interest rates.

Restructuring of

the Yen Interest Rate

(non-consolidated)>	Note: As of Mar. 31, 2024.
Total Assets JPY 233tn [JPY +4.3tn]	Note: Figures in [] represent changes from Mar. 31, 2023.

Portfolio (Ex.)

Rise of yen long-term interest rates

• Increase in yield on new investments and expansion in investment amount
• An additional investment of JPY 10tn (10-year bonds
• yielding 1%)
• → Annual earnings increase of JPY 100bn

Policy rate hike (BOJ)

• Increase in interest income
• Rise of interest rates by 25 bps
• → Annual earnings increase of approx. JPY 115bn

Rise of yen short-term interest rates

• Improvement in yield on yen short-term interest rate
• receivables position (position of approx. JPY 50tn)
• Rise of yen short-term interest rates by 25 bps
• → Annual earnings increase of approx. JPY 125bn

JGBs*2

JPY 45tn [JPY +5.6tn]

Due from banks, etc.

JPY 57tn

[JPY (10.4)tn]

Foreign securities*3

JPY 90tn [JPY +8.8tn]

Deposits

JPY 192tn [JPY (2.1)tn]

Ordinary Deposits

JPY 110tn [JPY +4.6tn]

More than

50％ are

sticky core

deposits

TEIGAKU deposits

JPY 64tn

[JPY (7.1)tn]

Others

Deposit interest rates hike

(raised on Apr. 8, 2024)

• Increase in interest payments (Impact on both exisiting deposits and new deposits.However, margins would still be secured due to the lag behind the rise in market interest rates)

Deposit interest rates hike

(raised on Apr. 8, 2024)

• Increase in interest payments
  (Impact on only new deposits (including reposits).However, margins would still be secured due to the lag behind the rise in market interest rates)

Decline of overseas short-term interest rates

	Decrease in foreign currency funding costs*4
	Improvement in yield on foreign currency interest rate

Others

JPY 40tn [JPY +0.2tn]

Others / Net assets

JPY 41tn [JPY +6.4tn]

	position for taking on risk (position of approx. JPY 15tn)
	Decline of overseas short-term interest rates by 50 bps
	→ Annual earnings increase of approx. JPY 75bn

*1 Theoretical impact on the Bank's P/L from potential movements of market environment. Actual impact may differ *1 due to changes in market conditions and the Bank's ALM policy.

*2 Include JGBs in money held in trust.

*3 Include real estate funds, direct lending funds and infrastructure debt funds in money held in trust.

*4 Include assets that raise capital within the fund, and foreign currency funding costs depend on differences in *4 domestic and overseas interest rates.

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8

Executive Summary (7) Growing Retail Business Digital Strategy (Platform Strategy)

1. Summary	2. Forecasts	3. Revision of	4. Appendix
Mid-term Plan

Provide Safe Secure Convenient Services to Customers throughout Japan

through Complementarity between the Physical and the Digital

Our goal is to increase transaction volume by advertising and linking optimal services to customers through our apps,

while also expanding the number of the Bankbook App users.

[Platform Strategy]

Refer customers to the Bankbook App

Digital

Influx

Physical

Consultation

Support

Expand the Bankbook App		Establish Co-creation Platform
[Mobile App development]		[Building a platform]
				Co-creation Platform
				(Partner Companies)
	Yucho Bankbook App
	(Yucho In Hand)
Basic banking features		Japan Post Bank	Japan Post Group
	●Investment trusts	●"Post Office Internet Shop"
As of Mar. 31, 2024 10.40mn accounts		●Cashless payments, etc.	●Products of JP insurance,
					etc.

	(YoY +2.95mn accounts)	We will increase
	the app user base	Various Partner Companies
	Target (Revised KPI)		+
		Finance	Utility	E-commerce
	as of Mar. 31, 2026		offer optimized services
		16mn accounts		through in-app ads, etc.,		fee	etc…
					based on data analysis.	[Pilot advertisement]
(mn accounts)			16.00
	10.40		Oct. 2023
	4.81	7.45			Sony Bank's Foreign Currency Deposits
				Feb. 2024~
2.83
End	End	End	End	End		Japan Post Group Products
Mar.	Mar.	Mar.	Mar.	Mar.		(JAPAN POST Co., Ltd.)
21	22	23	24	26

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9