Strategic Initiatives and Actions

21st Century Marketing Strategy
In April 2002, the Bank embarked on a new medium-term management plan, entitled “21st Century Marketing Strategy.” Under the plan, the Bank will seek to strengthen its position as a leading bank in Nagasaki Prefecture in both qualitative and quantitative terms, without reliance on public funds and without the need to merge with other banks. To this end, we will strive to further enhance operating efficiency and improve the soundness of the Bank’s assets. Main initiatives outlined in the plan include reinforcing our consumer loan capabilities, maintaining and improving operating soundness, making employees more efficient and reassessing our personnel system, and strengthening our securities management skills.

To Reinforce Our Consumer Loan Capabilities
We will promote development of products that meet customer needs while using the Internet and other IT technologies to raise convenience. Particularly in regard to mortgage loans, we plan to increase the balance by around 5% per year.

To Improve the Health of Our Operations
The Bank has traditionally enjoyed a reputation for the soundness of its operations. We will build on this position through ongoing implementation of stringent self-assessments aimed at disposing of non-performing loans. We will also support efforts to revamp the Bank’s operations. In the process, we hope to further improve the health of our operations.

To Make Employees More Efficient and Reassess Our Personnel System
Centralization of systems and core administrative functions, together with the establishment of an area-based sales organization, will enable the Bank to reassign employees and solidify its sales prowess. Overall employee efficiency should increase as a result. By the end of March 2004, we plan to reduce the number of employees to 1,650. We will also reexamine the number of directors, as well as director and employee salary and bonus systems, both in the Bank and its affiliates.

To Make More Active Investment in Securities
From the perspective of securing stable revenues, the Bank plans to actively invest in securities. We will also diversify our securities management portfolio with the aim of dispersing risk and raising management efficiency.

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