31
Explanatory Meeting of Financial Results for the Fiscal Year Ended March 2016 June 3, 2016 Tateki Ataka, President
Explanatory Meeting of Financial Results for the Fiscal Year Ended March 2016June 3, 2016Tateki Ataka, President
Part 1 About the Bank
1
Corporate Profile
Name The Hokkoku Bank, Ltd.
Stock code 8363(First Section, Tokyo Stock Exchange)
Location of Headquarters
2-12-6 Hirooka, Kanazawa, Ishikawa
Founded December 18, 1943
Deposits(Excluding negotiable certificate of deposit)
3,091.4 billion yen
Rating S&P : A- (Long term)R&I : A+ (Long term)
Total Assets 3,885.7 billion yen
Loans 2,335.5 billion yen
Total outstanding shares
299,901 thousand shares
Corporate Profile
Ishikawa88
Fukui2
Toyama10
Branch Network
Tokyo 1
Osaka 1
Nagoya 1
Singapore 1
Branches in metropolitan areas and overseas
Overseas representative officeShanghai 1
Plaza Base ATM NetworkATM networks in three Hokuriku prefectures
The Hokkoku Bank
408 ATMs
Convenience stores(Lawson, Enet, Seven-Eleven)
About 1,000 ATMs
＋Affiliates
The Hokkoku General Leasing Co., Ltd.The Hokkoku Credit Service Co., Ltd.The Hokkoku Credit Guarantee Co., Ltd.
The Hokkoku Management, Ltd.The Hokkoku Servicer, Ltd.
Loan Center
Money Plaza
Insurance Plaza
11
5
5
2
Share of Financial Institutions in Ishikawa Prefecture (2010-2015)
Source: Special Issue of Monthly Financial Journal, Financial Map 2016
Loans
Deposits
The Bank41.0%
Regional banks (other than the Bank)20.8%
Major banks5.0%
Credit unions20.1%
Others13.1%
As of the end of March 2010:3.8 trillion yen
The Bank44.8%Regional
banks (other than the Bank)20.5%
Major banks5.3%
Credit unions17.0%
Others12.4%
As of the end of March 2015: 3.9 trillion yen
The Bank31.2%
Regional banks (other than the Bank)11.7%
Major banks6.7%
Credit unions15.8%
JAPAN POST BANK Co., Ltd.18.8%
Others15.8%
As of the end of March 2010: 8.4 trillion yen
The Bank32.0%
Regional banks (other than the Bank) 12.9% Major
banks 7.0%
Credit unions 14.6%
JAPAN POST BANK Co., Ltd.17.5%
Others16.0%
As of the end of March 2015: 9.0 trillion yen
（＋3.8％）
（＋0.8％）
3
Distinguishing Characteristics of Hokkoku Bank: Establishing the Hokkoku Brand
Upholdingtrue client-oriented principles Solid business foundation
Maintaining a commitment to speed and quality➡Active utilization of ICT➡Understanding of business feasibility and consulting
servicesAddressing increasingly diverse and sophisticated needs➡Established Singapore Branch➡Expanding Money Plaza and Insurance PlazaAbolishing sales target➡Introducing action evaluationRaising regional productivity➡Improving cashless environment
High market share in Ishikawa Prefecture➡Deposits: Over 30% / Loans: Over 40％Sales base centering on SMEs➡Number of SME borrowers: About 100,000Enhanced ATM network (three prefectures in Hokuriku area)➡About 1,400 ATMs in banks and convenience stores
+ Alliance ATMsE-banking customers (virtual banking channels)➡Number of Internet banking customers
(For retail) 120,000 customers(For business) 16,000 customers
Increasing equity and return of profits to shareholders Governance with high transparencyGovernance with high transparency
Capital adequacy ratio exceeding global standard (8%)➡Non-consolidated capital adequacy ratio: 12.81%Stable dividends + Earnings distributions➡Aiming dividend payout ratio of 25-30%Purchases of treasury stock➡Purchased 5,000 thousand shares in fiscal year endedMarch 2016
Corporate Governance Code compliance➡Ensuring a more objective and neutral oversight
frameworkAssigned three independent outside directors➡Appointing human resources with managerial and
overseas experienceSupporting career advancement of the female workforce
4
Topics (Established Singapore Branch)
・In March 2016, we opened the Singapore Branch in amove to bolster support for overseas expansion towards Southeast Asia by local companies
Supporting local companies to expand businesses in Southeast Asia
By establishing Singapore Branch
Expansion oftrading company-
like support services (matching)
Support throughbanking services
<<Japanese companies expanding overseas>>
32.7%
24.2%9.4%
13.2%
11.6%8.9%
Japan：
Number of overseas affiliates 23,927
China Sotheast AsiaOther regions in Asia North America/CanadaEurope Other regions
47.0%26.5%
8.7%
9.3%6.4% 2.1%
Three Hokuriku prefectures：Number of overseas locations 838
China Southeast AsiaOther regions in Asia North America/CanadaEurope Other regions
0
50
100
150
200
250
2007 2011 2013
Three Hokuriku prefectures：Number of overseas locations
Thailand Singapore VietnamIndonesia Malaysia Others
(companies)
Reference: AJEC Warm TOPIC VOL127
5
Topics (Improving cashless environment)
• We are developing an environment for cashless transactions locally in the Hokuriku area by introducing Visa debit cards and launching services for card-affiliated stores.
Delivering new services to all of our clients
Building an environment conducive to card use anytime, anywhereBringing about productivity gains on a local basis by removing the task of cash management
Service for card affiliated stores• Started in February 2016 (First bank in
Japan)• No. of devices applied for by affiliated
stores: About 1,500 (As of May 13, 2016)
Visa Debit Card• Started in April 2016• Application: About 24,000 (per month)
6
Part 2 Outline of Financial Statements
7
Financial Results for the Fiscal Year Ended March 2016 (Overall)
• Ordinary income 64,125 million yen (up 963 million yen YOY, increase for the second consecutive year)• Ordinary profit 16,638 million yen (down 517 million yen YOY, first decrease in three years)• Profit 9,629 million yen (up 2,170 million yen YOY, increase for the fourth consecutive year)• Overall, both income and profit have increased over the last two consecutive years• Non-consolidated capital adequacy ratio (global standard) 12.81%
8
1717
1815 17 17
7 7 10
Mar. 2014 Mar. 2015 Mar. 2016
Billions of yen Non-consolidated profit and loss, and capital adequacy ratio
Net business profit Ordinary profit Profit
12.46%
11.18%
12.81%
(1) Outline of profit and loss [Non-consolidated] （Millions of yen)
FY2014 FY2015 Change Change (%)
Ordinary income 63,162 64,125 963 1.5%
Ordinary profit 17,155 16,638 517 3.0%
Profit 7,459 9,629 2,170 29.0%
Net business profit 16,856 17,974 1,118 6.6%
[Consolidated] （Millions of yen)
FY2014 FY2015 Change Change (%)
Ordinary income 74,109 74,686 577 0.7%
Ordinary profit 18,941 17,601 1,340 7.0%
Profit*1 7,989 9,569 1,580 19.7% *1 Profit attributable to owners of parent
(2) Dividends per share (Yen)
FY2014 FY2015 Change
Annual dividends 7.00 8.00 1.00
Interim dividends 3.00 4.00 1.00
Year-end dividends 4.00 4.00 －
Global standardDomestic standard
(3) Capital adequacy ratio [Non-consolidated]
FY2014 FY2015
― 12.81%
11.18% ―
*2 Global standard *3 Domestic standard
Non-consolidated capital adequacy ratio*2
(Reference) Non-consolidated capitaladequacy ratio*3
Financial Results for the Fiscal Year Ended March 2016 (Non-consolidated)
• Gross business profit 46,414 million yen (down 748 million yen YOY)• Expenses 28,439 million yen (down 1,867 million yen YOY)• Net business profit 17,974 million yen (up 1,118 million yen YOY)• Ordinary profit 16,638 million yen (down 517 million yen YOY)• Profit 9,629 million yen (up 2,170 million yen YOY)
Net business profit 17,974 million yen, up 1,118 YOY・
・
Ordinary profit 16,638 million yen, down 517 million yen YOY・
・
Profit 9,629 million yen, up 2,170 million yen YOY・
Gross business profit decreased by 748 million yen, despite anincrease in interest and dividends on securities, due to decreasesboth in interest on loans and discounts as w ell as in fees &commissions.Meanw hile, expenses decreased sharply, by 1,867 million yenYOY, mainly due to one-time expenses associated w ith upgradingcomputer systems and relocating to a new head off ice.
Gains related to securities decreased by 3,612 million yen to4,469 million yen, due to diminished performance in relation tobond trading.The amount of credit costs decreased by 1,921 million yen YOY.This w as a result of there having been no bankruptcies amongmajor clients during the f iscal year, unlike the prior f iscal year, anddespite having extended the applicability of the allow ance fordoubtful accounts to cover all potentially bankrupt borrow ersusing the discounted cash flow (DCF) approach (w ith the soleexception of consumer loan customers).
Extraordinary loss w as 770 million yen, a decrease of 1,994million yen, as a result of having stopped recording impairmentloss on the site of the former head off ice.
（Millions of yen）FY2014 FY2015 Change
Gross business profit 47,162 46,414 748Net interest income 40,887 40,881 6
Interest on loans and discounts 30,335 29,671 664Interest and dividends on securities 11,805 12,483 678Interest on deposits, etc. (△) 826 762 64
427 511 84
Fees & commissions 5,957 5,186 771Other business profit (Excluding gain/loss on bonds) 318 346 28
Expenses (△) 30,306 28,439 1,867Personnel Cost (△) 14,748 14,445 303Non-personnel cost (△) 13,376 12,131 1,245
Net business profit 16,856 17,974 1,118Loss (gain) related to securities 8,081 4,469 3,612Amount of credit costs (△) 7,651 5,730 1,921Ordinary profit 17,155 16,638 517Extraordinary gain/loss 2,764 770 1,994Profit 7,459 9,629 2,170
Interest margin for total fund interest rate 0.31 0.30 0.01Core OHR (Expenses/Gross business profit) 64.25 61.27 2.98
Interest associated with short-term investmentand fund-procurement, etc.
9
Loans
• Total loan balance decreased by 27.6 billion yen from the end of the previous fiscal year to 2,335.5 billion yen due to a decrease in loans to large companies, and despite an increase in loans to SMEs.
• Housing loans increased by 43.4 billion yen from the end of the previous fiscal year, and other loans (credit card loans, automotive loans, etc.) increased by 2.5 billion yen.
○Breakdown by company size (Billions of yen)End of Mar.
2014End of Mar.
2015End of Mar.
2016Change (fromMar. 2015)
Change (fromMar. 2015)
Total loans 2,358.6 2,363.1 2,335.5 27.6 1.1%
SMEs, etc. 1,410.9 1,483.1 1,552.0 68.9 4.6%
Large companies 405.6 348.9 301.8 47.1 13.4%
○Breakdown by area (Billions of yen)End of Mar.
2014End of Mar.
2015End of Mar.
2016Change (fromMar. 2015)
Change (fromMar. 2015)
Hokuriku Area 2,006.5 2,053.0 2,068.6 15.6 0.7%
Others 352.1 310.0 266.8 43.2 13.9%
○Breakdown by type (Billions of yen)End of Mar.
2014End of Mar.
2015End of Mar.
2016Change (fromMar. 2015)
Change (fromMar. 2015)
Loans for business 1,220.1 1,169.4 1,158.3 11.1 0.9%
Consumer loans 610.4 667.5 713.4 45.9 6.8%
Housing loans 581.6 634.2 677.6 43.4 6.8%
Other loans 28.7 33.2 35.7 2.5 7.5%
Local governments, etc. 528.0 526.2 463.7 62.5 11.8%
1.47%1.36%
1.28% 1.27%
1.00%
1.25%
1.50%
1.75%
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016
Yield of loans
1,229 1,220 1,169 1,158
570 610 668 713
533 528 526 464
0
1,000
2,000
3,000
Mar. 2013 Mar . 2014 Mar. 2015 Mar. 2016
Billions of yen Loan balance at end of fiscal year
For business Consumer loans Local governments, etc.
10
Yields, etc.
Yield of loans Interest margin
Core OHR
1.47%
1.36%
1.28%1.27%
1.45%
1.34%1.29%
1.34%
1.15%
1.20%
1.25%
1.30%
1.35%
1.40%
1.45%
1.50%
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016Overall loans For business
0.310% 0.290% 0.310% 0.300%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016Interest margin
63.58%64.20%
64.25%
61.27%
59%
60%
61%
62%
63%
64%
65%
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016Core OHR
Expense ratio0.97
0.960.95
0.90
0.86
0.88
0.90
0.92
0.94
0.96
0.98
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016Expense ratio
• Business loan yields have begun to rise.• The interest margin is trending at around 0.30%. The overhead ratio (OHR) is approaching the 60%
threshold.
11
Deposits and Client Assets
○Balance of deposits
• As for deposits, both individual deposits and corporate deposits are showing firm results, having increased by 6.6 billion yen from the end of the previous fiscal year.
• With respect to client assets under management, we have been recommending medium- and long-term investments, and expanding our client base.
○Balance of client assets
2,093 2,125 2,162 2,200
756 730 712 717
167 199 211 175
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
End of Mar. 2013 End of Mar. 2014 End of Mar. 2015 End of Mar. 2016
Billions of yen Balance of deposits
Individual Corporate Public Fin'l
2,093 2,125 2,162 2,200
107 105
113 96 161
178 184 180 87
67 48 36
1,700
2,000
2,300
2,600
End of Mar. 2013 End of Mar. 2014 End of Mar. 2015 End of Mar. 2016
Billions of yen Balance of client assets
Individual deposits Investment trustsOTC sales of insurance Government bonds
7,783
14,160 14,861
0
5,000
10,000
15,000
20,000
End of Mar. 2014 End of Mar. 2015 End of Mar. 2016
Number of contracts of installment investment trusts
3,0853,0543,017
3,091
12
Securities
13
○Remaining balance of securities (based on acquisition cost)
• Balance of securities decreased by 147.1 billion yen from the end of the previous fiscal year to 961.9 billion yen, due to decreases in holdings of government bonds, municipal bonds, corporate bonds, foreign securities and other such instruments.
• Valuation gain on securities decreased by 24.6 billion yen from the end of the previous fiscal year to 54.6 billion yen, with anoverall lower figure due to performance of the financial markets.
349 313 388 378
205 197
192 130
165 186
182 181
44 45
78 81
46 70
213
131 29 30
55
61
0
200
400
600
800
1,000
1,200
1,400
End of Mar. 2013 End of Mar. 2014 End of Mar. 2015 End of Mar. 2016
Billions of yen Remaining balance of securities
Government bonds Municipal bonds Corporate bondsStocks Foreign securities Others
838 841
1,109
962
Factors behind YOY changes
InvestmentInvestmenttruststrusts
Investment policy
ForeignForeignbondsbonds
StockStock
DomesticDomesticbondsbonds
Purchases curbed in line with falling interest rates
Largely unchanged YOY
Curbing balances amid deteriorating financial environment worldwide
Policy geared to curbing balances, Japanese equity ETFs, J-REITsDiversified investment in overseas assets
Largely unchanged YOY
Policy geared to increasing balances in line with opening of Singapore branchSecure revenue spread
Keep interest rate risk under control and maintain the status quo with durationTake a stance geared to curbing balances
Maintain balances in order to secure dividend income
Mar. 2016 Mar. 2017Forecast
Yen 2.94 years 2.75 years
Foreign currencies 5.84 years 5.04 years
Duration
Capital Adequacy Ratio and ROE
14
• The capital adequacy ratios (global standard) are 12.81% and 12.98% on a non-consolidated and consolidated basis, respectively.
• Return on equity (ROE) exceeds 4%.• We are increasing ROE while placing emphasis on striking a balance with the capital adequacy ratios.
○ROE (Non-consolidated)
(Billions of yen)
[Global standard] End ofMar. 2016
Capital 225.9
Common stock Tier1 202.8
Other Tier1 0.0
Tier2 23.1
Risk assets 1,763.4
Mar.2013 Mar.2014 Mar.2015 Mar.2016 Mar.2017(Forecast)
ＲＯＥ 3.12% 3.45% 3.32% 4.17% 4.08%
Return on equity (ROE)・・・based on profit
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017Forecast
ROE
○Balance of capital and capital adequacy ratio(Non-consolidated)
Common stock Tier190%
Reserves 5%
Valuation and
translation adjustments
5%
Subordinated bonds 0%
Mar. 2016
Tier2
203186 188
12.46%
11.18%
12.81%
11.50%
End of Mar. 2014 End of Mar. 2015 End of Mar. 2016
Billions of
yen
Common stock Tier1 Capital
Capital adequacy rat io Common stock Tier1 ratio
226
Global standardDomestic standard
Addressing NPLs
• In FY2015, we took steps to more adequately recognize reserve for possible loan losses by extending applicability of the discounted cash flow (DCF) method.
50
55
60
65
70
75
80
85
90
95
100
Coverage ratios of 64 regional banks（％）
Regional Regional bank bank averageaverage83.0183.01%%
FY2015＜Extending applicability of the DCF method＞
Extended to all potentially bankrupt borrowers (with the exception of consumers who only take consumer loans)
Further increased the number of clients the headquarters is directly in responsible for, in need of managerial support
(approx. 560 companies)↓
Calculated allowance for doubtful accounts, estimating future cash flows of individual companies with respect to
all potentially bankrupt borrowers(with the exception of consumers who only take consumer loans)
↓More adequately recognized reserve for possible loan losses
Working toward building frameworks for providing business revitalization and managerial support
that are flexible, bold and speedy
Highest NPL coverage ratio among regional banks
FY2016・Increased the number of headquarter staff visiting clients
in need of managerial support (approx. 750 companies)・Additionally arrange public-private sector revitalization funds
15
Forecast of Results for the Fiscal Year Ending March 2017
• For the fiscal year ending March 31, 2017, we forecast YOY decreases in ordinary profit, profit, and net business profit, amid expectations of decreasing yields of securities and other instruments.
• We estimate dividends of 8 yen per share, on par with the previous fiscal year (dividend payout ratio of 26%).
○Forecast of results for fiscal year ending March 2017 [Non-consolidated] (Millions of yen)
(Full year) (First half)Fiscal year ended
Mar. 2016Fiscal year ending
Mar. 2017 (forecast)Fiscal period ended
Sep. 2015Fiscal period endingSep. 2016 (forecast)
Ordinary profit 16,638 14,000 Ordinary profit 6,298 7,500
Profit 9,629 9,000 Profit 4,127 5,000
Net business profit 17,974 14,500 Net business profit 9,940 7,500
[Consolidated](Full year) (First half)
Fiscal year endedMar. 2016
Fiscal year endingMar. 2017 (forecast)
Fiscal period endedSep. 2015
Fiscal period endingSep. 2016 (forecast)
Ordinary profit 17,601 15,000 Ordinary profit 6,541 8,000
Profit* 9,569 9,500 Profit* 3,899 5,300
* Profit attributable to owners of parent
○Dividend per share （Forecast）Fiscal year ended
Mar. 2013Fiscal year ended
Mar. 2015Fiscal year ended
Mar. 2016Fiscal year ending
Mar. 2017
Annual dividends 6.00 yen 7.00 yen 8.00 yen 8.00 yen
Interim dividends 3.00 yen 3.00 yen 4.00 yen 4.00 yen
Year-end dividends 3.00 yen 4.00 yen 4.00 yen 4.00 yen
7.00 yen
3.50 yen
Fiscal year endedMar. 2014*
3.50 yen* The amount for the fiscal year ended March 2014 includes a commemorative dividend of 1 yen per share (including an interimdividend of 0.50 yen) in recognition of Hokkoku Bank’s 70th anniversary.
16
Part 3 Management Strategy
17
Business Environment Surrounding the Bank
Negative interest rates adopted by the Bank of Japan
The Bank currently operates in a business environment described as follows:
The Higo Bank, Ltd. and THE KAGOSHIMA BANK, LTD. The Bank of Yokohama, Ltd. and Higashi-Nippon Bank, LimitedFukuoka Financial Group, Inc. and THE EIGHTEENTH BANK, LIMITED, and others
→Sudden and unexpected integration of rival banks
Concerns of further decreases in loan marginDeclining yields of securities
→Pressure on revenues overall
Restructuring of regional financial institutions
Increase in limits on Japan Post Bank deposits
Deposit limit rose to 13 million yen, from 10 million yen
→First time in 25 years→Concerns regarding outflow of deposits
Most harsh environment ever18
Key Changes in the Last 15 Years
“Business models mostly handle corporate transactions → corporate and retail transactions”Consumer loans: 263.0 billion yen in 2001 → 713.6 billion yen (March 2016)Investment trusts: Started handling in December 1998 → 96.3 billion yen (March 2016)OTC sales of insurance: Started handling in October 2002 → 180.0 billion yen (March 2016)
“Major banking channel reform = Departure from full banking services at all branches”Adoption of geographic area banking strategy (25 areas), branch consolidation (155 →104 branches), Loan Centers (11 locations), Money Plaza (5 locations), Insurance Plaza (5 locations)Convenience store ATMs, Internet banking and tablet computers (2,300 devices)
11
22
33“Business models handling deposits and loans → bank having consulting capabilities”Improved consulting capabilities and offered proposal-based banking solutionsIntegrated clerical work of branch offices which enables all branches to be sales-focusedUpgraded human resources development and training
19
Trends in the Last 15 Years (quantitative)
19 15
15 12
0
10
20
30
40
Mar. 2001 Mar. 2016
Personnel and non-personnel costs
Personnel Non‐personnel
2,300 1,782
483
505
1,000
2,000
3,000
Mar. 2001 Mar. 2016
Number of employees
Full‐time Part‐time
12788
9
10
5075100125150175
Mar. 2001 Mar. 2016
Number of branches
Ishikawa Toyama Fukui Metropolitan area
155 (Peak)
104
▲5１
▲518
数値最終確認
FY2000 FY2015 Changes
Gross businessprofit
53,423million yen
46,414million yen
△7,009million yen
Net interest income48,517
million yen40,811
million yen△7,706
million yen
Fees & commissions4,601
million yen5,186
million yen585
million yen
Expenses35,870
million yen28,439
million yen△7,431
million yen
Net business profit17,552
million yen17,974
million yen422
million yen
Deposits2,547.3
billion yen3,188.6
billion yen641.3
billion yen
Loans1,959.8
billion yen2,335.5
billion yen375.7
billion yen
Yields of loans 2.20% 1.27% △0.93％
Yields ofsecurities
2.49% 1.21% △1.28％
Yields ofdeposits
0.31% 0.02% △0.29％
Expense ratio 1.46% 0.90% △0.56％
OHR 67.14% 61.27% △5.87％
Yields of 10-yeargovernment bonds
1.27% △0.09% △1.36％
Number ofbranches
143 branchesand 4 agencies
104 branches △43 branches
Number of employees( N u m b e r o f b u s i n e s s s t a f f )
2,300(483)
1,782(505)
△518(22)
Billions of yen
▲4
▲3
Substantial changes in the earnings environment over the last 15 yearsCutting expenses to make up for decreasing net interest income
20
As a Regional Financial Institution
Helping drive gains in productivity of local companies and industries in order to stimulate regional economies
Roles demanded of regional financial
institutions
Leveraging consulting capabilities
Actively engaging in efforts to boost productivity across entire regions and making the most of our strengths
21
Business area Main actions to take
Corporate banking strategy
Drawing on an understanding of business feasibility and consulting capabilities, take on initiatives that involve providing assistance for enterprise start-up and support for business revitalization and managerial improvement
Retail banking strategy Upgrade and expand Money Plaza locations and virtual banking channels
Securities investment strategy
Enhance investment management through diversified investment andflexible trading
Office efficiency strategy Fully deploy performance-based incentives (PBI) and back-office centers
Future course of action
Part 4 Corporate GovernanceCapital Management
22
Corporate Governance System
監査
監督
Outside Directors
Audit and Supervisory Committee
Outside/Total 4/6
members
Heighten corporate value by ensuring a more objective and neutral oversight framework
取締役会
監査役会
Persons who execute business(Representative Director, etc.)
Supervision, audit, etc.
General Meeting of Shareholders
Board of
Directors
Audit and S
upervisory C
omm
ittee
Nom
ination and C
ompensation C
omm
ittee
Decision of remuneration
Candidates for
Directors
Election and dism
issal
Audit
Election of D
irectors
Name Occupation
Hideo Nakashima Corporate officer
Masahiro Kijima Corporate officer
Ichiro Sasaki Corporate officer
Masako Osuna University professor
Election of D
irectors
Audit
23
Creating a Workplace Environment That Empowers Women
Establish an encouraging and comfortable environment for female employees
0
5
10
15
20
Apr.2010
Apr.2011
Apr.2012
Apr.2013
Apr.2014
Apr.2015
Apr.2016
Number of female managers
Manager Branch manager
1111
55
11
Female Female branch managersbranch managers
Work arrangements tailored to employees’ lifestyles
Staggered work schedulesReduced work hours for childcare
Workplace environment geared to enabling career advancement
As of July 2016, entire workforce pursuing managerial-track employment (the general clerical-track employment category has been eliminated)
Every employee taking on challenges
involving various business operations
Systems that enable employees
to focus their efforts on taking a
solutions-oriented banking approach
Workplace environment conducive to
working energetically with
pride
24
Capital Management
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017Forecast
Annual dividends per share 6.00 yen 7.00 yen 7.00 yen 8.00 yen 8.00 yenPurchase of treasury stock(thousand shares)
9,785 2,800 10,000 5,000Cancellation of treasury stock(thousand shares)
10,000 2,800 - 14,700Yield of dividends (Dividends/Stock price as of theend of the fiscal year)
1.53% 1.93% 1.67% 2.70%
Net assets per share 654.18 yen 679.15 yen 775.53 yen 752.40 yen -
Price book value ratio (PBR) 0.60 0.64 0.54 0.39 -
○Amount of dividends, etc.
• Purchase of treasury stock: purchased treasury stock of 5,000 thousand shares in the fiscal year ended March 2016
• Providing dividends at a targeted dividend payout ratio of 25 to 30%, consisting of stable dividends (annual dividends of 6 yen) plus dividends linked to financial results
(Millions of yen)○Yield of dividends ○Amount of dividends, etc.
25
Part 5 Reference Materials
26
Changes in Key Figures of Hokkoku Bank ①
YOY Change
49,177 50,433 45,925 52,403 48,043 △ 4,360
(48,669) (46,951) (46,384) (47,162) (46,414) △ 748
42,405 40,845 40,011 40,887 40,881 △ 6
Fees & commissions 5,902 5,772 6,114 5,957 5,186 △ 771
869 3,813 △ 200 5,558 1,975 △ 3,583
Gain/loss on bonds 508 3,482 △ 459 5,240 1,628 △ 3,612
（△） 30,398 29,852 29,778 30,306 28,439 △ 1,867
16,321 15,762 15,524 14,748 14,445 △ 303
12,620 12,568 12,629 13,376 12,131 △ 1,245
1,456 1,522 1,625 2,181 1,862 △ 319
18,270 17,098 16,606 16,856 17,974 1,118
（△） △ 273 △ 1,735 △ 252 2,871 335 △ 2,536
19,052 22,316 16,399 19,225 19,267 42
△ 5,602 △ 10,364 △ 1,611 △ 2,070 △ 2,628 △ 558
△ 359 △ 1,988 806 2,841 2,841 0
（△） 6,008 8,369 4,019 5,995 5,949 △ 46
1,536 836 2,147 1,216 555 △ 931
13,450 11,951 14,787 17,155 16,638 △ 517
△ 346 △ 2,664 △ 1,312 △ 2,764 △ 770 1,994
- - - - - -
13,104 9,286 13,475 14,390 15,868 1,478
6,083 6,361 7,254 7,459 9,629 2,170
Recoveries of written off claims ③
Profit
Expenses related to portfolio problems
Gain/loss on equity
Amount of credit costs ②
Recoveries of written off claims ③
Profit before income taxes
Ordinary profit
Extraordinary gain/loss
Net business profit (after reserve)
Other business profit
Expenses
Taxes
Net business profit
Personnel cost
Non-personnel cost
Provision of reserve for possible loan losses ①
FY2015
Net interest income
Gross profit〈Excluding gain/loss on bonds〉
FY2014FY2011 FY2012 FY2013Changes in gain/loss (Non-consolidated)
4,197 5,798 1,620 7,651 5,730 △ 1,921Actual amount of credit costs（①＋②－③）
(Millions of yen）
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Changes in Key Figures of Hokkoku Bank ②
(Billions of yen; ％）
Average
balanceYield
Average
balanceYield
Average
balanceYield
Average
balanceYield
Average
balanceYield
Average
balanceYield
Loans 2,184.3 1.61 2,246.8 1.47 2,313.8 1.36 2,359.9 1.28 2,320.8 1.27 △ 39.1 △ 0.01
Securities 876.4 1.22 844.1 1.17 859.6 1.13 1,022.4 1.15 1,029.9 1.21 7.5 0.06
Call loans, etc. 121.3 100.0 79.9 62.1 509.0 446.9
3,182.1 1.45 3,191.0 1.35 3,253.5 1.27 3,451.0 1.22 3,859.7 1.10 408.7 △ 0.12
Deposits 2,855.4 0.09 2,903.7 0.06 2,978.8 0.03 3,032.5 0.02 3,032.6 0.02 0.1 0.00
Negotiable
certificates of159.0 0.12 145.3 0.10 130.5 0.07 129.6 0.05 118.9 0.04 △ 10.7 △ 0.01
Call money, etc. 64.6 36.8 44.2 31.8 597.1 565.3
3,079.2 0.12 3,085.9 0.07 3,153.6 0.04 3,465.2 0.04 3,748.6 0.05 283.4 0.01
Total interest-earning
assets
Total interest-bearing
liabilities
Average balance,yield, etc.
FY2015YOY Change
FY2014FY2011 FY2012 FY2013
(％）
YOY Change
Interest margin for total
fund interest rate0.34 0.31 0.28 0.31 0.30 △ 0.01
Gap on yields of deposits
and loans1.52 1.41 1.33 1.26 1.25 △ 0.01
Expense ratio 1.00 0.97 0.95 0.95 0.90 △ 0.05
OHR 62.45 63.58 64.19 64.25 61.27 △ 2.98
ROA (based on net businessprofit)
0.54 0.49 0.47 0.44 0.44 0.00
ROE (based on net business
profit)9.25 8.39 7.89 7.50 7.78 0.28
FY2015FY2014FY2011 FY2012 FY2013
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Capital Adequacy Ratio
[Basel III]
Non-consolidated Mar. 2016
Total capital adequacy ratio 12.81％
Tier 1 ratio 11.50％
Common stock Tier 1 ratio 11.50％
Total capital 22,593.8
Tier 1 capital 20,281.5
Common stock Tier 1 capital
202,81.5
Tier 2 capital 2,312.2
Risk assets 176,346.6
(Billions of yen)
Consolidated Mar. 2016
Total capital adequacy ratio 12.98％
Tier 1 ratio 11.62％
Common stock Tier 1 ratio 11.61％
Total capital 23,218.0
Tier 1 capital 20,800.2
Common stock Tier 1 capital
20,773.7
Tier 2 capital 2,417.7
Risk assets 178,862.4
Consolidated Mar. 2016
Leverage ratio 5.25％
・Capital adequacy ratios are calculated based on the “global standard” from the fiscal year ended March 31, 2016.・The Bank expects to begin disclosure for liquidity coverage ratio from the FY2016.
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