briefing session on mid-term business plan2016/04/07 · april 7, 2016 briefing session on mid-term...

April 7, 2016

Briefing Session on Mid-Term Business Plan

Presenter: Akihiko Fukai, Executive Managing Director

The Gunma Bank, Ltd.

I. Overview of the Previous Mid-term Business Plan (V-Plan)

Overview of the Previous Mid-term Business Plan ……………………………………………P. 1Main Outcomes of the Basic Strategies ……………………………………………P. 2Changes in Key Indices ……………………………………………P. 3(Reference) Numerical Review ……………………………………………P. 4

II. Framework of the Mid-term Business Plan

Surrounding Environment and Business Issues ……………………………………………P. 5Framework of the Mid-term Business Plan ……………………………………………P. 6Direction of Strategies ……………………………………………P. 7Basic Policies ……………………………………………P. 8Numerical Targets ……………………………………………P. 9Focused Staff Deployment in Key Areas ……………………………………………P. 10Breakdown of Changes to Profit Figures of Numerical Targets …………………………… P. 11

III. Key Measures

Basic Strategy and Key Measures ……………………………………………P. 12Proactive Measures for Regional Revitalization ……………………………………………P. 13Measures Based on evaluation of customers business potentials …………………………P. 14Reinforcement of Consulting-based Sales (Corporate Customers) …………………………P. 15Reinforcement of Consulting-based Sales (Individual Customers) …………………………P. 16

……………………………………………………………………P. 17

BPR Promotion and Productivity Improvement through the Use of IT ………………………P. 18Innovation of Work Styles and Support for Every Individual Employee …………………P. 19

Overhaul of Sales Structure Based on RegionalStrategy and Bolstering of Channel Alliance

<Table of Contents>

Value for Tomorrow


I. Overview of the Previous Mid-term Business Plan (V-Plan)

Value for Tomorrow


Enhancement of the function for corporate customer

consulting service

Actively offered attractive proposals to customers

-1-

Overview of the Previous Mid-term Business Plan

V-Plan April 2013 to March 2016

–Evolution into a value-proposal bank–

Aimed for enhancement of profitability while maintaining growth potential and status of

soundness

Value-added proposals Expansion of market

Expansion of retail customer marketing and direct

banking

Improvement in the value-added proposal

capabilities

Reinforcement of management

foundation and pursuit of management

eff iciency

Emphasis on staff development and reinvigoration of

organization

Contribution to the regional community

Sales Strategies Management Foundation Strategies

Strategies for corporate customers

Strategies for individual customers

Regional and channel strategies

Market investment strategies

Risk management strategies

IT/Operations strategies

Management/capital strategies

Organization/HR strategies

Contribution to regional community

4 Basic Policies

9 Basic Strategies

Basic Policies and Strategies Previous Mid-term Business Plan

Value for Tomorrow


Main Outcomes of the Basic Strategies

Continuing to open branches in promising markets

(Dec. '14 Ogikubo Branch, Oct. '15 Kaw asaki Branch Loan Station, May '16 Kasai Branch Loan Station (planned))

Increased investment in JGB for rolling effects and in pass-through MBS (guaranteed by GNMA)

Deployed a designated representative for lending to non-residents, aiming to build up assets w ith high profit margins of interest rates

Launched "IT Strategy Office" to establish "IT investment policy." Launched "Gungin CSIRT" in the cyber security f ield

Reinforcement of risk management by preparing to respond to RCSA and opening the "Operational Risk Management Section"

Support of employee development by holding the "Gungin Financial College" and the introduction of the "brow sing at home system"

Promotion of w omen in the w orkforce by setting up "Women in the Workforce Promotion Committee" and "Women-focused teams"


Man

agem

ent

Foun

datio

n St

rate

gies

IT/Operation strategy

Risk management strategy

Organization/HR strategy

Management/capital strategy

Sale

s st

rate

gies

Reinforcement of cost management through the new "Cost Management Section" and the introduction of "Cost Management System" and "ProcurementPlans"

Enhancement of individual marketing functions by introducing/expanding the "EBM system," "portfolio analysis system," and "mobile information devices"

Launch of "Smile Partner," a card loan product, partnered (student/home improvement) loans, and "Gungin online loans," an Internet-based loan product

Working on streamlining operational processes through "BPR Implementing Project" and the "Loan Operation Streamlining Project"

Strategies for corporatecustomers


Regional/channel strategy

Assistance for corporate rehabilitation by external entities like SME Business Rehabilitation Support Co-operative and REVIC, as w ell as DDS and ABL

Market investment strategy

Capital management by issuance of euro/dollar-denominated convertible bonds and responding to Basel III and other regulations

Taking advantage of the registration of Tomioka Silk Mill and related sites as w orld heritage sites, and the Volleyball team being promoted to the V-League

Enhanced support system for regional revitalization through cooperation betw een the regional revitalization promotion manager and the HQ

Offering information by the "Gunma Bank Management Club," holding the "Gunma Bank Management School," information dissemination and assistancefor applications by the "Help Desk for Subsidy," start of the "SME Revitalization Support Service" and other services to help solve companies' issues

Bolstering support for companies' overseas expansion, revamping the overseas sites netw ork in Asia, sending the "Investment EnvironmentInspectorate" to the Philippines and Vietnam. Enhancement of the corporate IB forex function, reinforced hedging proposals by reintroducing currencyderivatives w ith knock-out provisions

-2- Value for Tomorrow


18.9 18.221.6

25.5

20.6 19.8

25.9 27.5

5.0%4.4%

5.3% 5.3%

FY 2012 FY 2013 FY 2014 FY 2015

34.2 33.7 33.9 34.0

58.9 57.8 58.3 57.6

93.2 91.5 92.2 91.6

63.3% 63.2% 63.2% 62.9%

FY 2012 FY 2013 FY 2014 FY 2015

1,553.2 1,588.7 1,691.6 1,786.0

1,650.4 1,777.8 1,912.4 2,032.0

3,203.6 3,366.5 3,604.1 3,818.0

+ 5.1% + 7.1%+ 5.9%

FY 2012 FY 2013 FY 2014 FY 2015

Retail loans

Core business gross profit

SME

Individuals

Core business net profit

Expenses

Core business

profit

OHR

Retail

Net income

ROE

Consolidated

Stand-alone

3,022.8 3,220.9 3,548.5 3,632.8

11.5%11.7% 11.7%

12.2%

FY 2012 FY 2013 FY 2014 FY 2015

Tier 1 ratio

Tier 1

Risk assets

Changes in Key Indices

-3-

(Unit: billion yen)

(Projection)

(Projection)

(Projection)

(Projection)

349.9 378.6 417.6 445.7

Value for Tomorrow

Consolidated common equity Tier 1 ratio


　Retail loan balance at year-end

Loans to individuals

・ The retail loan balance grew across all areas in both SME and individual sections, greatly exceeding the targets.�

・ Newly opened branches contributed greatly to the growth in retail loans�.

　Core business gross profit

　Core business net profit

　Net income

However, net income greatly exceeded the target owing to the decrease in credit cost.

　Core business net profit ROA

　OHR

Core business net profit ROA narrowly missed the target.

Slightly below target due to the decrease in core business gross profit.

　

The ratio remained around the 12% level owing to the increase in risk assets from the stable growth in loans.

%

Status ofsoundness

index

13.5 %approx. 12.2 % -1.3

Profit margins of interest rates for loans contracted due to the continued low-interest environment exceeding expectations. Wereduced the bond portfolio and emphasized retail loans, the international division, and fee business, but core business net profitfailed to reach the target.

Consolidated common equity and other Tier1 capital ratio

%

bil yen

%

%approx. 62.9 % 0.9Efficiencyindices

0.5 %approx. 0.47 % -0.03

62

Profitabilityindices

bil yen

36 bil yen 34.0 bil yen -2.0 bil yen

96 bil yen 91.6 bil yen -4.4

19 bil yen 25.5 bil yen 6.5

bil yen

1,932 bil yen 2,032 bil yen 100 bil yen

bil yen 3,818 bil yen 298 bil yen

1,588 bil yen 1,786 bil yen 198 Loans to SMEs (excl. strategic branches)

ItemPlan's final year (FY 2015)

Numerical targetProjection

Difference

Growth potentialindices

3,520

(Reference) Numerical Review

-4- Value for Tomorrow


II. Framework of the Mid-term Business Plan


Value for Tomorrow

Surrounding Environment and Business Issues

Surrounding environment Business issues

-5-

* “Fin-tech” is a combination of “finance” and “technology” and mainly refers to innovative financial services that make active use of IT.

While there is uncertainty about the world economy, the domestic economy continues on a moderate recovery trend.

Quantitative and qualitative easing with negative interest rates. Inflation rate likely to stay subdued from the economic outlook, and easing monetary policies likely to continue.

Declining regional population, rising gap between regions and concentration in metropolitan areas. Hopes for women and older people to enter into the workforce as working population declines

Gunma offers an advantageous business environment. Hopes for development of growth industries. Advantageous location adjacent to the Tokyo metropolitan market with growth prospects

Increasing needs for consulting-based sales. Diversified needs in transaction methods, transaction hours and more use of IT

Achieving larger business size through reorganization of regional financial institutions. Entry into banking from other fields. Expansion of Japan Post Bank (e.g. increase of deposit limit)

Economy

Monetarypolicy

Social structure

Region

Customerneeds

Competition

Organization/governance

Regulation

Increase in value added through Fin-tech, spread of smartphones and tablet PCs, demand for strengthened cyber securityTechnology

Basel regulation, extension of the operating hours of the Zengin System, "My Number" system, amendment of Act on Prevention of Transfer of Criminal Proceeds, changes to the financial group regulations, increase in the consumption tax and introduction of a reduced tax rate

Expecting productivity improvements through operational streamlining. Demand for improved governance and ROE-based management. Increased awareness of work-life balance.

Contribution to regional revitalization and nurturing of and support for regional industry

Bolstering retail loans to respond to local financial needs

Securing of various revenue sources through implementation of value-added proposals

Use of Fin-tech and enhancement of cyber security

Reinforcement of group capabilities with a view to increasing ROE

Enhancement of the status of governance and risk management

Development and deployment of personnel with high levels of expert knowledge

Increased job satisfaction and promotion of diverse personnel


Value for Tomorrow

: 2016 Mid-term Business Plan “Value for Tomorrow,” or value-added proposals for tomorrow

Name

Plan period

What we aspire to be

Strategic themes

: April 2016 to March 2019 (three years)

: A regional financial group that supports the regional community and customers into the future and that grows together with them

Internal name: VT-Plan

Framework of the Mid-term Business Plan

-6-

Inheriting "value-added proposals," which is the basic concept of 2013 Mid-term Business Plan "V-Plan," we are aiming to construct a sustainable business model for tomorrow by creating new revenue opportunities, and have named the plan "Value for Tomorrow." Taking the first letters, the plan will be internally called the "VT- Plan."

We will face squarely the diverse needs of the regional community and customers and provide truly helpful financial solutions, thereby aiming to become a regional financial group that takes a step forward together with them to the next stage.

We will continue with our growth strategy centering on bolstering retail loans and will further develop value-added proposal actions, thereby helping the regional community and customers to grow.

Further development New endeavors

<Continuation of the growth strategy and further development of value-added proposals>

<Expansion of business domains and deployment of group capabilities>

Through the reinforcement of fee-based businesses by way of bank-brokerage collaborations, the overhaul of the consulting-based sales structure, and the strategic use of Fin-tech, we will aim to secure diverse revenue sources as a regional financial group.


Value for Tomorrow

Direction of Strategies

-7-

Establishment of a sustainable

business modelValue-added proposalsfor tomorrow

Value for Tomorrow(VT-Plan)

Apr. 2016 to Mar. 2019

<With an eye toward 10 years from today>

Further development

Continuation of growth strategy and further development of value-added proposals

A regional financial group that helps the regional community and customers look forward to tomorrow and to grow together

Expansion of business domains and deployment of group capabilities

New endeavors

Two strategic themes

What we aspire to be

<Securing diverse revenue sources>

Reinforcing brokerage business through bank-brokerage collaborations

Overhaul of the consulting-based sales structure

Strategic use of Fin-tech

Actual measures under "new endeavors"


Value for Tomorrow

Basic Policies

Basic policies To become the group of companies that we aspire to be

-8-

New challenges

Proactiv e measures f or regional rev italization

Pursuit of v alue-added proposals and bolstering

of prof itability

Strengthening the management f oundation and deploy ment of group

capabilities

Innov ation in work sty les and support f or each indiv idual employ ee

Regional revitalization strategy

Strategies for corporate customers


Regional/channel strategy

Market investment strategy

IT/Operations strategy

Risk management strategy

Management/capital strategy

Organization/HR strategy


A regional financial group that helps the regional community and customers look forward to tomorrow and to grow together

Further development

Proactive measures for regional revitalization

Pursuit of value-added proposals and bolstering of profitability

Strengthening the management foundation and deployment of group capabilities

Innovation in work styles and support for each individual employee

We will strengthen the management foundation toward providing a broad range of financial services while streamlining operations and enhancing internal control such as governance. We will also aim to increase the corporate value as a group by working together to enable each company to demonstrate their capabilities.

We will endeavor to foster an active corporate culture where each employeethinks independently and works proactively through innovation of work styles for a better work-life balance and the development and deployment of personnel with expert knowledge.

We will implement customer-centered, consulting-based sales based on customer relations. We will also bolster the content and convenience of financial solutions through strengthening key organizations and using fin-tech, with a view to reinforcing loan management and the fee-based business.

We look to live up to community expectations through active participation in regional revitalization by the implementation of a regional comprehensive strategy and measures for regional economy reactivation by way of enhanced support for companies.

Management foundation strategiesSales strategies


Value for Tomorrow

Numerical Targets

Numerical targets for the plan’s final year (FY 2018)

-9-

　Retail loans outstanding at year-end

　Non-interest business profit (consolidated)

　Net income (consolidated)

　ROE (consolidated)

　OHR (consolidated)

　Common equity Tier 1 ratio (consolidated)

Item Target

4,350.0 Bil yenGrowth potential index

FY2015 estimate

Bil yen

12

5.3

60.8 %

Profitability indices

Status of soundness index

Efficiency index

Bil yen18.0

65 % level

5 % level

28.0 Bil yen

Bil yen

Bil yen

% level

3,818.0

15.0

27.5

%12.2

%

(Glossary) :

:

:

:

:

:

Retail loans outstanding at year-end

Non-interest business profit(consolidated)

Net income (consolidated)

ROE (consolidated)

OHR (consolidated)

Common equity Tier 1 ratio(consolidated)

Net income attributable to the parent company's shareholders

Sum of SME (excl. local governmental entities and Tokyo/Osaka branch accounts) and individual loans

Sum of service fee income and other business profit minus losses or gains from bonds

ROE (consolidated) = Net income (consol.) / Average shareholders' capital (consol.)

OHR (consol.) = Operating expenses (consol.) / (Gross business profit (consol.) - Losses or gains frombonds (consol.))

Common equity Tier 1 ratio (consol.) = Common equity Tier 1 (consol.) / Risk assets (consol.)


Value for Tomorrow

Focused Staff Deployment in Key Areas

Numerical targets and key measures Measures for focused staff deployment

-10-

Loans to SMEs

*Excl. local government entities,Tokyo/Osaka Branch accounts

Loans to individuals

Unsecured consumerloans

Marketing capability fordeposit financial assets

(consolidated)

Retail loans outstanding at year-

end 4,350 bil yen (Plan's final year)

Non-interest business profit (consolidated)

18 bil yen(Plan's final year)

Bolstering corporate service fees

Boosting foreign exchange service revenues

Promoting protection-oriented insurance

Boosting base service commissions

Setting branch offices that promoteretail loans

Overhaul of sales structure based onregional strategy

Efficient promotion of housing loans at loan stations

Bolstering of the team to promoteapartment loans

Improvement of products

Enhancement of non-face-to-faceservices

Bolstering asset management-oriented sales

Establishment of Gungin Securities and bank-brokerage collaboration

○ Establishment of the team to promotecorporate customer consulting

○ Providing optimal solutions based on evaluation of customers business potentials

○ Establishment of loan/insurance consulting plaza

○ Fostering core customer relationships

Streamlining existing branches

Overhaul of HQ organization

Promotion of BPR

Revamping HR systems

Promotion of diversified personnel

Development and deployment ofpersonnel with expert knowledge

Organizational/operational efficiency

Enhancing staff capabilities by supporting and promoting their

activities


Value for Tomorrow

0.2

15.0

18.0

1.1-0.9

0.2

Mar. '16 Mar. '19

0.20.5

0.2

1.5

Base service commissions

Corporate service fees

Derivatives

Marketing capability for deposit f inancial

assets

Gungin Securities

Gunma Credit Guarantee Service expenses

(Guarantee fees)

Gungin Leasing

Mar. '19

-5%

-1.5

Mar.'16

+5% +2.5% +8% +20%

56.5

55.5

1.8-2.3

1.3

1.7

SMEs Housing loans

Apartment loans

Unsecured loans

V: +4.0 (Increase in outstanding annual 2.7%)R: -3.0 (Decrease in profit margin of interest rates -0.06%)

Change in outstanding

(annual %)

Large/second-tier,

gov ernment entities

Breakdown of Changes to Profit Figures of Numerical Targets

-11-

(Unit: billion yen)

Deployment of group capabilities <Interest scenario>

ST rates to remain low. No change in ST prime rate.

LT rates to rise moderately in response to stimulus measures (Feb. ’16: 0.04% Apr. ’19: 0.82%)

Interest on domestic loans (+1.0) Non-interest business profit (consolidated ) (+3.0)


Value for Tomorrow

III. Key Measures


Value for Tomorrow

Basic Strategy and Key Measures

-12-

Regional revitalization strategies IT/Operation strategies

Active participation in regional revitalization Productivity improvement through BPR promotion Enhanced company support for reactivation of regional economy Strategic use of IT and improvement of system infrastructureMeasures based on business viability Reduction of operational errors by ensuring proper operations

Strategies for corporate customers Risk management strategies

Strengthening consulting-based sales for corporate customers Strengthening of compliance structure

Reinforcing SME loans and non-interest business profit Bolstering management structures, such as customer protection

Expansion of customer base through indiv idualized management and f ostering of core customers Increasing the sophistication of the risk management structure

Support for overseas expansion and bolstering foreign exchange service revenues Strengthening of the cyber security management structure

Bolstering support for management improvement and rehabilitation Enhancement of the risk management structure

Bolstering and streamlining of business with local government entities Increasing the sophistication of the internal control structure

Strategies for individual customers Management/capital strategies

Strengthening consulting-based sales for individual customers Increasing the sophistication of the corporate governance structure

Implementation of asset-management-based sales through bank-brokerage collaborations Increasing the sophistication of the revenue management structure

Expansion of customer base through marketing implementation and f ostering of core customers Bolstering the capital management structure

Promotion of housing loans and bolstering apartment loans Deployment of group capabilities and measures to improve corporate value

Bolstering unsecured consumer loans Responding to legal/regulatory changes

Reinforcing funding base by bolstering deposits by individuals

Organization/HR strategiesRegional/channel strategies

Promotion of innovation in work styles for a better work-life balance

Overhaul of sales structure based on regional strategy Efforts to promote the activities of diverse personnel

Active use of fin-tech and bolstering of channel collaborations Development and deployment of personnel with expert knowledge

Improvement in customer satisfaction and loyalty

Contribution to regional communityMarket investment strategies

Efforts to promote environmental protection and social contributions

Enhancing investment capabilities by diversifying investment/loan targets

Bolstering foreign currency funding measures and cash flow stability

Sales strategies Management foundation strategies


Value for Tomorrow

- Participation in council of adv isors

- Help implement regional comprehensiv e strategy

- Industry clusters through collaboration betweenindustry , academia, gov ernment, f inancialcommunity and labor

The Bank's Regional revitalization promotion organization

Local governments

Industry

Business associations

Universities and research institutes

Labor organizations

Mass media

Collaboration

Size and profitability

We recognize that regional revitalization is important from the perspective of maintaining and reinforcing our operating base.

Active participation in regional economic revitalization

Bolstering of support for companies with a view toward regional revitalization

We will work to reactivate the regional economy by efforts to support local companies, such as helping start-ups and fostering growth industries.

Time

Help solve management issues in accordance with each individual company's stage

Business launch

GrowthSlowdown of

growth

Decline and revitalization

Securing personnel w ith expert know ledge and funding

Improvement of productivity, f inancing for growth

Business management, strengthening f inancial position, business conversion, M&A, company split

Radical business revitalization(Reduction of excessive debt, restructuring of

business)

Top manager(Director in charge)

Branch in charge of local governments



Promotion manager(Manager in charge of regional

revitalization)

Promotion contacts

We position the general manager of branches in charge of local governments as regional revitalization promotion managers, and look to foster smooth collaboration with local governments.

We will actively help SMEs with business succession with a view to ensuring local employment and economic restructuring.

Regional revitalization

Value-added proposals

Management foundation

Support for active

engagement

Proactive Measures for Regional economic revitalization

-13-


Value for Tomorrow

Upon completing the evaluation of customers business potentials, thebranch determines the business stance that takes account of thecustomer's management issues, and introduces a response andmanagement mechanism that is continuous and consistent with HQ

Implementing loans that are based on an evaluation of customersbusiness potentials, and which do not rely excessively on collateral orguarantees

Ascertaining business status through contact w ith customers

Gathering information concerning trends in the industry and regional

economy

Utilizing external expertise such as assessments and analysis

methods and application expertise

Implementation of evaluation of customers

business potentialsProposal of optimal

solutions

We identify management issues and report on them to the customer.We provide optimal

solutions, including various financial services and loans.

Support for a wide range of manufacturers

Number of evaluation of customers business potentials:1,000 in three years

Finished product maker

We assess the SMEs and second-tier businesses, centering on clusters of manufacturers in the region.We evaluate the growth potential of businesses based on qualitative analysis and ascertaining/analysis of business models.We will contribute to the growth and development of customers and the regional economy through appropriate risk-taking that does not rely excessively on guarantees or collateral.

Industry-by-industry evaluation of customers business potentials by HQ

Company-by-company evaluation of customers business potentials by branches

Tier 1

Tier 2

…

Analysis and assessment through analysis of distribution channels,operational flow and industryWe emphasize manufacturers that

are clustering in Gunma Prefecture.

Review ratings, policies, and plans accordingly as information is updated

Company rev iew Sales activ ity, proposals rev iews, middle management

Inf ormation obtained through daily activ ities

RatingsQualitativ e analy sis

Business policy

Business plan and its promotion

Structuring and rev iewing proposals

Ascertaining changes in

circumstances

Support by HQ (Inspection & Audit, Corporate Banking, Financial Markets & International, Business Planning & Administration Departments)

Updating and accumulating information in a database that can be viewed at a glance

Measures Based on evaluation of customers business potentials

-14-




Support for active

engagement


Value for Tomorrow

Identifying customer's business issues and proposing solutions based on business assessment Bolstering support for customers through collaboration with special organizations Active financing of growth areas (medical and nursing-care services, environment and energy, food and agriculture) Expansion of customer base through company-by-company management and promotion of core customers

Helping customers go global and expand their overseas distribution networks by collaborating with overseas offices and other banks Bolstered the overseas support network, opened the Bangkok Representative Office Active proposal of forex functions in the online banking service for corporate customers as well as currency derivatives

Close monitoring of rehabilitation customers and continued support for the achievement of the rehabilitation plan Proactive support for customers with ratings-related concerns

In addition to the function-focused Promotion Managers at HQ, we have appointed Corporate Consulting Sales Managers. We have created a one-stop support structure linked with branches, to roll out value-added proposals extensively and meticulously, thereby earnings due revenues.

Enhanced support for management improvement and business

Bolstering of consulting-based sales

Helping companies expand overseas and reinforcing foreign exchange

transactions

Establishment of the team to promote corporate consulting

Through the use of the consulting function aimed at solving customer company's issues, we meet funding needs and provide optimal solutions, thereby increasing non-interest business profit.

Start-up Grow th Maturity Revitalization

Gungin Leasing

Funding

Smooth f unding Gunma Medical-Industry Collaboration Rev italization Fund Gunma Bank Business Support Fund

Sy ndicate loans Priv ate placements

Business matching Helping go global and expand overseas sales networksExpansion

Gungin Business Net Banking Gungin Densai Net Convenient store payment service Fee-based money delivery and collection serviceRationalizing

Gunma Bank Management Club SME Revitalization Support Service Help Desk for SubsidyBusiness strategies

Business succession M&A

Support for entrepreneurs

Gungin Business Support Grand Award

More

MoreLess

Less Number of cross selling dealsBu

sine

ss v

olum

e（

Dep

osits

and

loan

s） Increase volumes of deposits and loans

Increase in cross-selling

Growthstage

Promotion of core customersMain solutions appropriate for growth stage

Work to spread value-added proposals and aim to strengthen relations and customer-by-customer

Core customers

Reinforcement of Consulting-based Sales (Corporate Customers)

-15-



Support for active

engagement



Value for Tomorrow

* Fiduciary duty is broadly defined as the wide range of roles and responsibilities held by one who performs specified duties in fulfillment of trust by others.

Bank customers

Brokerage subsidiary High risk

Low riskBo

lster

ing

prod

uct

sele

ctio

n

Appealing to a wide range of customers

Mass market, asset Wealthy

Major products and services according to the life stage Bolstering proposal capabilities through bank-brokerage collaborations

We aim to increase lifetime transactions by utilizing consulting functions in accordance with the life stage.We work to enhance marketing sophistication to provide services by optimal channels at the optimal time.

Enhancing asset management proposal capabilities and implementation of fiduciary duties Bolstering proposal capabilities to the wealthy through revamping estate management operations Expanding customer base through proposals of NISA (and junior NISA) and savings-type investment trust Increased contact with customers by opening Loan and Insurance Consulting Plaza

Bolstering of consulting-based sales Establishment of Gungin Securities

To be established in February 2016 and to start business in October. We will actively approach customers, centering on the wealthy, by proposing a wide array of products including foreign bonds and structured bonds. We will look to bolster employees' specialized knowledge and proposal skills through personnel exchange with the Bank.

Enhance product appeal in response to the needs of customers and businesses Set up an effective promotion structure for apartment loans

Promotion of housing loans and bolstering apartment loans

Enhancement of product appeal and bolstering of non-face-to-face servicesBolstering unsecured consumer

SeniorYouth Asset formationLife stage

Event

Asset management Small-lot investment (NISA) Savings-oriented

insuranceInv estment trust Securities account Estate management

Protection-oriented insuranceInsurance

Salary account, pension crediting, bank transfer, credit card, online bankingSavings and settlement

Loans Auto loan Housing loan Student loan Home improvement loan

School Buys a home

Child starts college

Rev erse mortgageCard loan

RetirementBirth of a childMarriageStart of a

career

Reinforcement of Consulting-based Sales (Individual Customers)

-16-



Support for active

engagement



Value for Tomorrow

Regional strategy

Revamping of branch/loans station/ATM networks

Bolstering of sales structure by deploying sales promotion staff in focus areas

Designating branch offices that promote retail loans

With a high prefecture-wide market share, we will work toward regional revitalization and take advantage of the growth potential of a promising market outside the prefecture.

Focused deployment of sales promotion staff in promising markets

Revamping of sales structure in existing branchesInput of management resources into promising markets

Bolstering of channel alliances

We will strengthen non-face-to-face channels by strengthening online banking functions and introducing smartphone apps, thereby bolstering channel alliances, centering on the CRM system and EBM system.

Active use of fin-tech

We will work to provide high level of convenience and new financial services through the use of cutting-edge IT technology

Family bookkeeping app for individual customers

Cloud bookkeeping for corporate customers

CRM SystemEBM System

Branches Consulting plaza

ATMs

Loan stations

Direct Center

Smartphone apps

Online banking Website

Customer information and gathering and analysis of

needs

Introduction of "Pepper," a humanoid robot

Overhaul of Sales Structure Based on Regional Strategy and Bolstering of Channel Alliance

-17-



Support for active

engagement



Value for Tomorrow

Streamlining of complicated operational f low <Measures under consideration>

Increased centralization of operations Increased centralization of deposit/exchange/estate management operations

Easing the load of labor-intensiv e operations Linear traf f ic line at the counter through the use of nav igation sy stem

Rev amping of ov erall administrativ e operations Simplif ied consulting memo f or assets-in-custody -based sales, etc.

Sophistication of credit management <Measured under consideration>

Ensuring error-f ree operation Introduction of company assessment (company -by -company handling)

Bolstering coordination of related sy stems Rationalizing deal proposal and assessment by redesigning application f orms

Rationalizing operation processes Automatic printing of contracts, ticketless execution, etc.

BPR implementing projectDeposit

and exchange operations

Loan operation

30% reduction on

deposit/exchange

operations load

30% reduction on back office work for loan/sales

divisions

Freeing-up time and deploying more personnel to strengthen face-to-face sales capabilities

Main points for improvement

Main points for improvement Loan operation streamlining project

BPR promotion

Use of ITIntegrating and bolstering the sales strategy systems that takes into account the system renewal and overall optimization that incorporates BPRmeasures.

We are aiming to reduce the operations workload at branches by 30% through two projects and to bolster non-face-to-face sales capabilities.

Operations Streamlining Promotion Conference

Cross-sectional efforts to improveproductivity

Materialization of BPR measures and progress management

Deliberating redeployment of personnel that accompanies operational streamlining

Deposit and exchange operations

Operation for marketing capability for deposit financial assets Loan operationCustomer management

Branch system Investment trust sales system

Front office compliance system CRM system Loan support system

Bolstering of collaboration and optimization

BPR Promotion and Productivity Improvement through the Use of IT

-18-



Support of active

engagement Regional

revitalization


Value for Tomorrow

Ability to think independentlyand work proactively

Improvement of job satisfaction levels for all employees

Measures to innovate the work styles

Improvement and implementation of structure to innovate work styles

Revision in HR systems that allow all employees to aspire to step up

Improvement of job satisfaction levels for all employees

Support for activities of diverse personnel

Promotion of women in the workforce

Promoting operational staff aged 56 and over/senior employees

Creating a mechanism to develop younger employees

Development and deployment of personnel with expert

knowledge

Increasing staff with specialized skills and helping them obtain certifications

Training expert staff with proposal capabilities

Development of staff in specialized HQ divisions and appropriate deployment of staff

Bolstering management capabilities with an eye to developing leaders

Support in skill improvement for active engagement

Through measures to innovate the work styles, to support the activities of diverse personnel, and the development and deployment of personnel with expert knowledge, we help each employee to think independently for himself or herself, and to work proactively.

Innovation of Work Styles and Support for Every Individual Employee

-19-



Support for active

engagement



Value for Tomorrow

(Reference) Gunma Bank Group

-20-

Improvement in consolidated ROE through deployment of the Group's comprehensive capabilities

The Gungin Card Co., Ltd.

Credit card business, moneylending

Gungin Leasing Co., Ltd.

Leasing operations

Gungin System Service Co.,

Development and sale of software, dispatch of IT

engineers

Gunma Chuo Kogyo Co., Ltd.

Transport of goodsMaintenance of ATMs

Gunma Finance (Hong Kong) Limited

Finance and brokerage businessSupport for companies advancing

into Asia

Gungin Securities Co., Ltd.

Dealing in securities, intermediary trading of securities, brokerage

and proxy handling

Providing credit guarantee for individual loans

Gunma Credit Guarantee Co., Ltd.


Value for Tomorrow


This document contains descriptions on the future performance

of the banking group. These descriptions do not guarantee such

future performance, for which naturally there are risks and uncertainty.

Please note that future performance may deviate from the targets

due to changes in the business environment and other reasons.

If you have further inquiries, please contact:

Business Management Office (in charge of IR), Corporate Planning Department,The Gunma Bank, Ltd.

HP: http://www.gunmabank.co.jp


Value for Tomorrow

briefing session on mid-term business plan2016/04/07 · april 7, 2016 briefing session on mid-term...

Documents