Sustainable Growth of Local Businesses

We aim to be the fi rst choice as a partner for our clients by utilizing group functions and deepening cooperation with outside businesses, by strengthening the provision of strategic solutions that deeply engage management strategies for business, finance and capital, and by responding to increasingly diverse and sophisticated needs.

In the previous medium-term management plan, we expanded loan balance and corporate client service revenue mainly through structured finance, which is a highly profi table asset, by strengthening our provision of strategic solutions. On the other hand, we recognize that there is room for further growth in loans to small & medium sized businesses, given the growth potential of the home market.

The strengths of the Group's solution business lie in its strong customer base, advanced solution provision know-how and risk-taking capacity backed by sound capital. The Group has opportunities to provide strategic solutions by utilizing the customer base it has cultivated over many years in Kanagawa Prefecture and Tokyo, where customers, both small and medium-sized customers and large customers such as listed companies, are concentrated. In 2019, we established the Financial Solutions Department, a direct sales unit at the head offi ce, and have accumulated advanced solution know-how. By spreading this know-how throughout sales branches, we are able to identify the needs of even more customers and solve their problems. In addition, our capability to propose capital strategy solutions has improved through strengthening relationships with funds, and our market presence has been steadily growing. Furthermore, with suffi cient capital and our distribution capabilities utilizing regional bank networks, we are able to handle loans of tens of billions of yen, and have established a unique position in which we can address the challenges of not only middle and small caps but also customers at all stages. In addition to these strengths, LBO loans, a type of M&A fi nancing, have been growing strongly against the backdrop of the Tokyo Stock Exchange's request for “management that is conscious of the costs of capital and stock prices,” as well as growing need for business succession among small & medium sized businesses. We will continue to work to expand high-value-added businesses through providing advanced strategic solutions that contribute to our customers’ management strategies.

The Group provides comprehensive support for its customers’ business development in Japan and overseas. In our overseas business, we leverage our extensive overseas network centered on the growing Asian region, our high level of expertise and our domestic network to provide tailored services to customers seeking to expand globally and to support their overseas expansion and business expansion.

Specifi cally, we provide tailored support, such as providing local information, assisting with the establishment of local corporations, developing business transactions, fi nancing, and hedging foreign exchange risk. In addition, we provide optimal solutions, such as on-site surveys, business meetings, seminars, and cross-border loans, in accordance with each stage of our customers’ overseas businesses (initial expansion stage, full-scale operation stage, and restructuring stage), as well as focus on foreign exchangerelated services, such as money transfers, foreign currency deposits, letter of credit transactions, foreign exchange contracts, and derivative products to respond to the diverse needs of our clients.
In recent years, non-Japanese businesses such as corporate loans and structured fi nance have expanded, and we are developing highly specialized solutions to meet diverse needs.
In the future, we will promote initiatives to provide comprehensive support for customers' overseas businesses by supporting them from the beginning and combining fi nance, foreign exchange and solutions.

With a focus on Asia, which is a growth region, our domestic sales branches and overseas offices will work together to strengthen the provision of solutions to our customers.
Specifically, in addition to strengthening financial support such as loans to overseas subsidiaries of our customers, we will provide solutions such as overseas expansion support and M&A in cooperation with external experts and other regional banks. In addition, we will enhance profitability by strengthening our efforts in overseas operations, including loans to non-Japanese corporations.

Initiatives

① Increase in lending to customers’ overseas subsidiaries

② Borderless development of solution business

③ Strengthening initiatives for overseas operations

Aiming to be a “total partner for small and medium-sized enterprises,” we will provide optimal solutions for each customer’s lifecycle by providing sympathetic “face to face” service.
In addition, by increasing branch efficiency, consolidating operations at headquarters, and concentrating management resources in the 23 wards of Tokyo, we will achieve an operating structure that achieves overwhelming efficiency as a regional bank in the 23 wards of Tokyo.

Through business feasibility assessments, we will better understand the needs and issues of our cust omers and enhance our solution offerings for all lifecycle issues, thereby contributing to the sustainable enhancement of their corpor ate value.

We will establish an efficient sales structure in the 23 wards of Tokyo by increasing the number of sales personnel in this area and centralizing the administrative work of sales branches into head office.

THE KANAGAWA BANK is benefiting from the shared insights and expertise of the Bank of Yokohama in sustainable finance and other areas, which help its customers solve their problems. By fully drawing from the Group’s capabilities, we will strengthen our solution business to meet the diversifying needs of our customers.

The Bank of Yokohama has strengths in providing high value-added solutions that are deeply engaged with management strategies for relatively large companies, while THE KANAGAWA BANK has strengths in providing consulting services to small and medium-sized companies to support their core businesses, startups, and second foundings. In addition to expanding the customer base in Kanagawa Prefecture by bringing the two banks, which have few competitive relationships and complement each other, into the same group, the two banks will strengthen face-to-face sales in areas where each bank has strengths, and THE KANAGAWA BANK use of the Bank of Yokohama’s digital channel functions to expand customer contact points will be promoted.

We will improve management efficiency by consolidating capital, human resources digital tools, and other management resources and reducing costs through effective utilization of functions, thereby further strengthening the management foundation of the group as a whole.