JAPAN POST BANK : "JPB Symposium"(Briefing session for the press/November 30)

【JAPAN POST BANK Symposium Materials】

UNOFFICIAL TRANSLATION

Although the "Bank" pays close attention to provide English translation of the information disclosed in

Japanese, the Japanese original prevails over its English translation in the case of any discrepancy

Current Status of JAPAN POST BANK and

Outlook for the Second Half of the Medium-term Management Plan

－ Realizing JAPAN POST BANK's Vision －

November 30, 2023

Director, President and Representative Executive Officer

Norito Ikeda

1. JPB's Vision

• Support the growth of customers nationwide by fully harnessing the Bank's unique characteristics in partnership with local financial and other institutions

JPB's Unique	Strong JPB's network known		large number of savings
Strategic	+
Features	throughout Japan		and accounts

		Growth Engines
	Three strategic businesses
	driving growth
JPB's Vision	① Retail Business
②Market Business

③Σ Business

with the aim of building a sustainable earnings base

Vision

Place the utmost importance on utilizing the Bank's vast assets and management resources to contribute to the vitality of the economy rather than simply transitioning to a private bank

Utilize useful management resources and work in partnership with local financial and other institutions

as a co-creation platform to become a bank

that supports the growth of customers nationwide

from a medium- to long-term perspective

Local Financial and

Other Institutions

(Partners)

JPB is anticipating chronic shortages in each of the following:

① Necessary capital

②Information

③Human resources (human capital)

Consider application of the Bank's useful management resources

1

2. Current Status of JPB (Six Months Ended September 30, 2023) and Outlook

●Number of accounts registered

●Secured profits of ¥641.0 billion

in the Yucho Bankbook app

for the H1 period by expanding the

surpasses 9 million accounts

balances of risk assets and strategic

Three Engines (earnings base)

(As of October 31, 2023)

investment areas

・Also, steady net fees and commissions growth (¥77.5 billion)

(FY2-24/3 net interest income, etc. forecast: ¥1.26 trillion)

that underpin sustainable

R

M

【1nd Engine】

【2nd Engine】

management

Retail Business

Market Business

■ Working

Digital Strategy

toward a new business

■ Restructuring of the yen

Establish Co-creation Platform

model that goes beyond

interest-rate portfolio

traditional banking operations

▶In addition to pursuing sustained growth

[Building a platform]

▶Build a more robust customer base in line

of risk assets' net interest income, etc.,

Co-creation Platform

with digitalizationby expanding the number

which had expanded under the low yen

(Partner companies)

of accounts registered in the Bankbook app

Financial

Interest rate environment

▶Expand investment trust acceptance

▶Take the next action toward reversing

An alliance

Platformer

channels using DX

and expanding yen interest rate assets'

with various business operators

to meet customer needs

▶Realize complementarity between

net interest income, etc.

Products of Japan

Securities

the physical and the digital

Post Group

●Assuming that the domestic PE market will grow to the level of

AI

Loans

((E.g.) Robo-advisors)

Europe and the U.S. in the future (*1),

¥1 trillion

Insurance

E-commerce

...etc.

contribute to the region with equity capital of

Maintain a balance between screws and work toward long-term, stable profit

Oct. 2023

Σ

【3nd Engine】

Pilot advertisement

Σ Business

to introduce "Sony Bank's

Foreign Currency Deposits"

■ Working to realize

a "Co-creationPlatform" as a partner

through collaboration and cooperation with various

A（

business operators

▶Solve local issues by utilizing the "7 Screws" (investment vehicles)of the ∑ Business

Considering trial distribution of ads

▶Collect, store, and utilize nationwide information through the "∑ Data Platform"

from out side the financial domain.

▶Promote a local corporate banking business (*2) centered on a regional headquarters

（Announced when ready）

*1 Current status of the domestic PE market2014-20 average annual flow amount GDP ratio 0.2% (¥1-2 trillion)

）

A advertisement

⇔ US 1.3%, UK 1.5%

2

*2 Marketing support business for investee companies,Deal sourcing business

3. Expand the Number of Bankbook App Users

Changes in

the External

Environment

■ Entering an era in which growing digital needs position banks as the preferred choice for digital channel convenience ■ Growing use of banking services in various aspects of daily life (cashless banking and the development of embedded finance) ■ Growing fluidity between industries and dramatic changes in the concepts of traditional financial services

Expand Passbook App Use

Help customers to "live life on their own terms"together with our partners by providing products and services that JPB does not offer

Become indispensablethrough services that go beyond banking boundaries and closely center of clients

Digital Channels

Dramatically expand Passbook app users

Co-creation Platform (Advertising Business)

Provide customers with services that extend beyond the banking sector; Develop new profit-earning opportunities by introducing/advertising the services of various partner companies

Convenience

Improvements

View	Learn
(Balance, cash deposit	(Notification)
and withdrawal)
Grow	Pay
(Investment trust)	(Payment)

10,000,000

accounts

80,000

accounts

FY19end19年度末 FY23end23年度末 FY25end25年度末 FY28end28年度末

Maintain and enhance the customer base Further promote administrative efficiency

Finance

Public utility bills E-commerce

Guide

Attracting Visitors

(Sending Customers to Physical Locations)

Notify	Yucho In Hand	Use
(Change of			(ATM deposit	Realize complementarity
address, etc.)		and withdrawal)
	Borrow	Remit		between the physical and
		the digital
(Account overdraft)	(Remittance)

App notifications by region and customer segment

◇ Notifications regarding JPB and JP Group products
◇ Notifications regarding seminars and events
◇	Notifications regarding local products
	(coordination with the advertising business), etc.	3

4. Expand Investment Trust Acceptance Channels Using DX

■ In applying for investments trusts, customers were historically required to visit directly-operated branches that handle investment trusts or post offices (investment trust handling post offices (branches))

■ Launched a service to accept investment trust proposals also at post offices that do not handle investment trusts in October 2022 ■ This initiative allows customers to apply for investment trusts (NISA) at approximately 20,000 locations nationwide, including

local post offices

Traditional

Refer customers with asset building needs to investment trust handling offices (branches)

Nationwide locations,
including remote islands
and mountainous areas
Investment trust
	introduction
	post offices

While able to open an account at an introduction post office,

forced to physically visit an investment trust handling post office.....

flow

		Approx. 18,000
		Directly-operated	Investment trust
	* Limited to the opening of an investment trust (NISA) account	branches		handling post office
The home	233	Approx. 1,500
	An investment trust handling
		post office is so far away....

Located mainly in urban areas

From October 2022

Applications for investment trusts* can now be made at local post offices!

* Currently limited to Tsumitate (cumulate-type) NISA operation accounts

(plans in place to progressively expand the scope of services)

The home

Investment trust
	Directly-operated		Investment trust
introduction	Remote access using tablets	branches		handling post office
post offices
233		Approx. 1,500
Approx. 18,000

Work to secure a stable customer base by first expanding NISA accounts utilizing an overwhelming number of acceptance channels

spread over approximately 20,000 locations

4

５. Restructuring of the Yen Interest-rate Portfolio：Paradigm Shift in Portfolio + Next Actions

■ Achieve a paradigm shift by shifting investments from JGBs to risk assets in the face of declining yen interest rates

■ Began restructuring the yen interest-rateportfolio in light of the current upward trend in long-term yen interest rates impacted by such factors as the Bank of Japan's decision to review its yield curve control operations in December 2022 and further flexibility in July and October of this year

■ In addition to the sustained growth in earnings associated with risk assets, which have continued to expand against the backdrop of a low interest rate environment, earnings from yen interest rate assets entering a reversal and expansion phase

Sophisticated Risk Management and Timely and Appropriate Actions in Line with Market Fluctuation

As of Oct. 1, 2007 (Corporatization)

Foreign	Others 9.2%*2
securities, etc.
0.1%
Due from
banks, etc.	AUM
2.5%
	JPY 220.7tn
	JGBs*1
	88.0%

As of Mar. 31, 2016 (FY end of IPO)

Others 15.3%*2	JGBs
	40.1%

	AUM
	JPY 204.8tn
Foreign	Due from
securities, etc
22.1%	banks, etc.
	22.3%

As of Mar. 31, 2023 (the end of FY2023/3)

Others*2	JGBs
16.8% To Reverse
18.3%
	& Expand
AUM	63trillion yen
JPY 226.3tn
	Due from	( At the end of
Foreign	September 2023 )
banks, etc.
securities, etc.	30.1%
34.6%

2008- Commenced and Expanded Investments in Overseas Credit Assets

(%)

2016- Commenced Investments in Strategic Investment Areas Assets,

2.0

and focused on them

PE and Real estate funds

revenue in full swing

Jan. 2016

2020- Enhanced Stress Resilience of

1.5

QQE with negative interest

rates by BOJ

Investment Portfolios

2023-

Restructuring of

1.0

the Yen Interest-

Mar. 2020

Mar. 2021

rate Portfolio

Clarification of YCC policy

Interest rate of 10-year JGB

Corona crisis

0.5

(approx. ±0.25%) by BOJ

Source: JGB interest rate information

- Ministry of Finance Japan

0.0

Apr. 2013

Sep. 2016

Quantitative and Qualitative Monetary

QQE with Yield Curve

Dec. 2022, Jul. 2023, Oct. 2023

Easing ("QQE") by BOJ

Control ("YCC") by BOJ

(0.5)

End

YCC tweak by BOJ

End

End

End

End

End

End

End

End

End

2007

2009

2011

2013

2015

2017

2019

2021

2023

Oct.

Mar.

Mar.

Mar.

Mar.

Mar.

Mar.

Mar.

Mar.

Mar.

07

09

11

13

15

17

19

21

23

23

5

*1 Include deposits to the Fiscal Loan Fund which were postal savings funds deposited with the Ministry of Finance Japan. All deposits to the Fiscal Loan Fund were redeemed through November, 2010.

*2 Consist of Japanese local government bonds, corporate bonds, money held in trust, loans, short-term investments, etc.

6. ∑ Business Strategies (Current Status and Outlook)

■ Selected 7 screws (investment vehicles) in a bid to fully develop the GP Business in a JPB appropriate manner; concluded an MOU* common to 6 companies

■ In addition to the ESG investment vehicle included in the aforementioned screws, efforts to develop a structure that is capable of injecting equity funds in the order of ¥1 trillion currently underway

Regional Financial Institutions, etc.

* Memorandum of Understanding

Equity

Debt

Return

Business Operators with a Willingness to Grow in the Region

Business

Operator

Information

from Each

Financial

Institution

Information

Collaboration

Equity	Management	Return
	Support

∑Business Investment Vehicles (７Screws + ESG)

Directly-operated Branches / Regional Headquarters

All Regions		Growth Investment / Business Succession / Business Revitalization

Venture Investment ESG Investment

• Data Platform (∑DP )

Japan Post	FRONTIER	PROSPER/
Investment	CAPITAL INC.	Plan･Do･See
Corporation
Business succession	Hands-on Support	Hands-on Support
investment
for Core Regionals	Centered in the
Growth investment
Companies	Tourism Business
Venture investment
(Number of employees: 84)	（Number of employees: 23）	(Number of employees: 11)
	(Consolidated parent company: 369)	(Plan･Do･See Inc. total: 989)

J-Will Group	Trading
Company
Destination for	Trading Company
Function Hands-on
Regional Businesses
Support
(Number of employees: 132)

Spiral	Tokai Tokyo	ESG-related
Capital	Financial	Investment
	Group	Company
		Renewable Energy
Venture Investment	Venture Investment
Investment
Company	Company
Hydrogen Business
CVC Fund	Regional Collaboration	Investment
(Number of employees: 16)	(Number of employees: 2,747)

Proposal System Introduction

Nationwide Business

Operator Information

Investigation

Results

Human	Investment	Investment
Resources
Joint Ventures	JAPAN POST	Local Financial and Other Institution Investors
(Partners)	BANK	(Anchor Investors / Partners)

Information Collaboration

6

７. ＪＰインベストメント・シグマ地域事業承継１号ファンドへの投資確約 Please refer to the original Japanese text.

• Σビジネスの一環として、JPインベストメント㈱の子会社を通じて組成された、マジョリティ出資を前提とする 地域の事業承継投資を行う「JPインベストメント・シグマ地域事業承継１号ファンド」に投資確約(LP出資)。
• 本ファンドの設立により、地域で事業承継に課題を抱える企業のニーズにより広く応え、地域金融機関等と 協働して、地域活性化に貢献して参ります。

JPインベストメントゆうちょ銀行

出資、業務執行（有限責任組合員）

JPインベストメント・
シグマ地域事業承継合同会社	出資
（無限責任組合員）
100億円
出資・運営管理

経営支援JPインベストメント・シグマ地域事業承継1号ファンド

	約100億円
【当行の期待】	投資
事業承継や組織的な経営への移行を支援し
地域経済や雇用の維持拡大に貢献

事業承継に課題を抱えるお客さま（地域企業）

7

８. 東海東京証券㈱ 主催 「オープンイノベーションカレッジ」への加入 Please refer to the original Japanese text.

• ∑ビジネスにおけるベンチャー投資に関する戦略「地域のスタートアップ・エコシステム構築」の実現に向け、
  2023年11月30日、東海東京証券㈱が主催する「オープンイノーベーションカレッジ」（中部及び東京）の コアメンバーとして加入しました。
• 今後、オープンイノベーションカレッジで開催される各種交流会等に参加し、同社と協働で、地域のスタート アップ・エコシステムの構築を推進して参ります。

主催コアメンバー

東海東京証券 大学関係者 企業経営者 ゆうちょ銀行

運営	加入(2023/11/30)

オープンイノベーションカレッジ（中部・東京）

勉強会、スタートアップピッチイベント等の運営

産･学･官が連携し、スタートアップ企業を支援	東海東京FHと協働で
産業界	大学	行政	日本全国に亘る

地域のスタートアップ・ エコシステムの構築を推進

スタートアップ企業

エクイティ性資金を供給

地域のスタートアップ・エコシステム（中部､東京）	8

9. Major ∑ Business Initiatives Since the Last Symposium (June to November 2023)

• An initial 2-year pilot program currently underway (October 2022 to September 2024) following in the launch of the ∑Business in October 2022; roughly 1 year has passed since the pilot began; major initiative results since the last symposium are presented as follows
• Steps to put in place a medium-term management plan for the ∑ Business are currently underway (plans to announced details in May 2024) in line with a review of the JBP Group's Medium-term Management Plan

Item

• GP Business
• Marketing Support Business for Investee Companie
• Deal Sourcing Business

Summary of Main Tasks

• Put in place a management system and build and investment portfolio that take advantage of the characteristics of each investment company and fund
• Put in place a development system for human resources responsible for GP operations
• Develop commercial products that have an affinity with the Bank based on information from investee companies, etc.
• Draw up sales strategies and promote introduction and mediation operations in accordance with investee companies
• Develop human resources and put in place a marketing system with a view to fully fledged operations
• Foster corporate cultures and unify our passion and action toward new corporate banking business
• Utilize our nationwide network in Japan and develop our own deal sourcing system
• Develop the corporate customer information platform by using regional community information

Main Task Achievements & Efforts

• November 2023: LP investment in the JP Investment Sigma Regional Business Succession No. 1 Fund
• November 2023: Concluded an MOU with 6 screw companiesthat summarizes the ∑ Business Philosophy and agreement details on the maintenance of a long-termrelationship, etc.
• November 2023: Joined the Open Innovation College managed by Tokai Tokyo Securities Co., Ltd. and is participating in steps to build a regional startup ecosystem
• July 2023: Concluded a business partnership agreement with Pie Systems Tokai Tokyo Digital Platform Co., Ltd.
  (Premium Digital Gift Certificate Operations)
• October 2023: Established Pie Systems Japan Co., Ltd. member
  stores: Set up PIE VAT Station a tax free counter at Asakusa Nishisando shopping street
• May 2023: Commenced training using the ∑ Business text book
• August 2023: Started weekly meetings with area general managers to promote sourcing operations in the region
• November 2023: Decision made to develop the ∑ Data Platform (∑DP) system to collect, store, and utilize nationwide business operator information

9