The change in the Bank’s status from that of a governmentaffiliated financial institution to a special company (a jointstock company pursuant to a special act) provides an opportunity for the Bank to reinforce and upgrade its governance,while maintaining its basic role as a financial institution for SMEs, by SMEs, under the governance of its shareholders—SME cooperatives and their members—the government, and market discipline in accordance with the Shoko Chukin BankLimited Act and Japan’s Companies Act. Among other steps,the Bank will appoint a board of directors, auditors and accounting auditors.

Up until now, the Bank has issued financial statements and disclosure publications once a year, but after privatization it will also release consolidated information, in addition to semiannual financial statements and disclosures. The Bank will also prepare and release annual and semiannual securities reports.

All branches will continue to carry out operations as before.There will also be no change in hours of operation for branches and ATMs.

The Bank will continue to offer its bank debentures, including the Warisho one-year discount bonds, Rissho bonds and Rissho Wide five-year bonds, for purchase by anyone.

Until now the Bank has only been able to accept deposits from SME cooperatives and their members and customers who maintain a balance in its debenture safekeeping account,but once it is privatized the Bank will be able to accept deposits from anyone.

The Shoko Chukin Bank will augment its lineup of deposit products such as the new My Harvest time deposit to better meet its customers’ fund management needs. The Bank also plans to expand its over-the-counter sale of individual pension insurance and investment trusts.

In addition, the Bank is moving ahead with plans to expand its Internet banking services for individuals and its ATM affiliations to enhance customer convenience.

Once it is privatized, the depositor eligibility restrictions will be lifted and the Bank’s products will be covered by deposit insurance just as with other financial institutions.

In its loans, the Bank will continue to precisely meet its SME customers’ funding needs and provide long-term, stable loans based on its relationships of trust with customers.

Loans will continue to target primarily the Bank’s shareholders—SME cooperatives and its members (hereafter,“eligible borrowers”)—but after privatization the Bank will be able to provide funding for business successions to people taking over the businesses of eligible borrowers and funding for subsidiaries of eligible borrowers.

As part of its comprehensive financial services, the Bank will continue to accurately ascertain the business needs of its customers, as well as enhance the comprehensive financial functions that the Shoko Chukin Group represents. The Bank will also reinforce its affiliations with regional financial institutions and external specialist organizations to offer a wider range of sophisticated solutions.

The Bank will make no new special loans for the purpose of national policy, but will continue to manage existing special loans.

Moreover, in its role as a government-appointed financial institution, the Bank will continue to provide financing for disaster recovery in the event of major economic and financial instability and large-scale natural disasters.

Further, the Bank will develop its own loan products in affiliation with the policies of the national and local governments to meet its customers’ business needs.