In the year ended March 31, 2011, total income decreased ¥1,995 million from the previous fiscal year to ¥83,172 million. The decline was largely attributable to a decrease in total interest income due to lower income from interest on loans and discounts.

On the other hand, total expenses decreased ¥2,668 million from the previous fiscal year to ¥72,415 million, mainly due to a decrease in interest expenses, primarily interest on deposits, and a decrease in credit-related expenses.

As a result, income before income taxes and minority interests increased ¥1,164 million year on year to ¥11,739 million. Net income increased ¥1,810 million to ¥7,433 million.

Since April 2010, Hyakugo Bank has been implementing its medium-term management plan, “Soaring toward 2012: Becoming an Excellent Regional Bank.” Our basic strategies in this plan are “Customer- and community-oriented management,” “Enhance sales capabilities,” “Focus on operating efficiency,” “Strengthen management,” and “Enhance Group cooperation.” We are taking a number of initiatives to grow with the region.

In the fiscal year ended March 31, 2011, the first year of the medium-term management plan, we increased convenience for customers by building a new office for Nagashima Branch in June 2010. In October, we opened Toyota Branch, our first branch in Aichi Prefecture to offer the “Do-Nichi Banking” service that allows individual customers to open new deposit accounts, consult with us on asset management and conduct other banking transactions on Saturdays and Sundays. We will continue our efforts to enhance our branch network.

We also augmented our lineup of financial products. In August 2010, we began offering the “Growth Field Support Fund,” the “Small and Medium-Sized Business Support Fund” and the “Farming Support Fund.” In March 2011, we introduced the “Disaster Recovery Support Fund” for customers in our business areas damaged by the Great East Japan Earthquake. In addition, in December 2010, we launched a unique passbook for the “Yume*Pokke” (meaning pocket filled with dreams) savings account and the “You & Me (yume)” (yume means dream in Japanese) installment time deposit, which offers customers the option to print their family’s photo on its cover. These one-of-a-kind passbooks have been well received by customers.

Hyakugo Securities Company Limited, part of the Hyakugo Bank Group, opened outlets in our Ise Branch in September 2010, Yokkaichiekimae Branch in November 2010, and Kuwana Branch in June 2011, enabling these places to provide one-stop financial products and services to meet the diversifying asset management needs of customers.

All of us at Hyakugo Bank will continue to work to earn the trust of our customers and promote the development of the Bank and the region that we serve.

Tsuyoshi Ueda
President