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Message from the Management

the Management

Long-term vision
We aim to “Create with Our Community, Customers and Employees a Rich Future that We Can All Share.”

Formulation of the 10-year strategy

I would like to speak of my thoughts that went into formulating the 10-year strategy. In addition to changes to the social structure of Japan in the form of trends such as a declining population leading to an economic deceleration and long-lasting monetary easing policies, the implementation of negative interest rates in February 2016 led to a further deterioration in interest rate standards, creating an increasingly harsh business environment for financial institutions that is expected to persist into the future. In particular, regional banks can be considered a sector that is in a structural recession. It has been said that lending operations, which serve as the core business, are becoming commoditized, and in the absence of diversification methods, it can be expected that profitability will continue to decline due to interest rate competition. To formulate a long-term management strategy to meet such harsh circumstances, our Bank internally launched a “10-year Strategic Project.” Management and project team members heavily discussed what our Bank wishes to become, and strategies to realize these goals.

Positive challenges

Under the current environment, a possible path could be that of “balanced contraction,” in which elimination of personnel and branches is prioritized in an effort to curb declining profitability. However, such goals do not engender dreams, and would not allow Chugin to satisfy and bring happiness to the region and customers. While utilizing available management resources, our Bank will implement thorough structural reforms, providing differentiated added value through various activities such as contributing to the revitalization of the regional economy, raising corporate value for customers, and enabling stable asset creation. This will create a sustainable business model that allows mutual growth, shared among the region, customers, and our Bank. It will also be a “positive challenge” that is linked to our Bank’s growth. To achieve these goals, the “long-term vision,” or what our Bank wishes to become, was formulated, and strategies were proposed to lead to its realization.

Thoughts behind the long-term vision

The most important aspect for our Bank’s future growth is to understand customers.For corporate customers, our Bank will “strengthen regional support activities” and “aggressively pursue solutions sales” toward resolving their management issues,while for individual customers, our Bank will “carry out proposal-based sales for life planning.” As a result, our Bank will become a source of strength for the region and its customers, growing together and moving to create a brighter future in step with its stakeholders. To represent these views, our Bank has designated its long-term vision as: “Create with Our Community, Customers and Employees a Rich Future that We Can All Share.” The slogan is “Let’s do it! Chugin” to signify the importance of positive cooperative initiative and execution.

For the future of the region and customers

To ensure that the region and customers can feel the presence of our Bank even more than before, the thoughts behind the formulation of this 10-year strategy will be shared among all employees. Toward achieving the long-term vision, each employee will work toward “individual growth” and “engendering teamwork” to change the way of thinking and reform organizational culture. Based on the 10-year strategy, the new medium-term management plan will endeavor to build strong foundations and implement structural reforms while considering structures and frameworks that foster “mutual creation.” As managers and employees, we will maintain a forward-looking mindset and engage in daily operations with “Chugin-no-kokoro” as the base, making every effort to create a future in step with the region and customers. We thank you for your continued support of “Chugin” in the future.

June 2017
Masato Miyanaga
Masato Miyanaga,

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