(E03542) Stock Price

Aomori Michinoku Bank is a regional financial institution based in Aomori Prefecture, operating primarily in banking services. In addition to its head office, the company operates 84 branches and 3 sub-branches, providing a wide range of financial services from basic banking services such as deposits and loans to foreign exchange operations and securities investment services. Through five consolidated subsidiaries, the company also engages in diversified financial-related businesses including leasing and credit card operations.

The company's primary customers are individuals and small-to-medium enterprises within Aomori Prefecture, generating revenue through community-focused financial services. The bank's core revenue source is the deposit and lending operations of the bank itself, while subsidiaries also contribute revenue through leasing and credit card businesses. For mortgage loans, risk management is conducted through a credit guarantee subsidiary.

The business is divided into three main segments. The banking division handles deposits, loans, and foreign exchange operations at the parent company, with a real estate management subsidiary providing support services. The leasing division operates equipment leasing services, while the other operations division is structured with specialized subsidiaries handling credit card operations, mortgage credit guarantee services, and consulting services respectively.

Aomori Michinoku Bank is charting a new growth trajectory following its management integration with Michinoku Bank in April 2022. Under the joint holding company Procrea Holdings, the first medium-term management plan titled "Challenge and Innovation" sets targets for the fiscal year ending March 2025 of 3.37 trillion yen in average loan balances, 2.9 billion yen in core operating profit, and 1.3 billion yen in consolidated net income. The company has positioned four core strategies—strengthening financial intermediation functions, expanding business domains, rationalizing and improving operational efficiency, and reinforcing group foundations—and aims to build a robust management platform by realizing synergies from the integration early on.

As a priority investment area, the bank is expanding consulting services beyond traditional financial offerings. Through its wholly-owned subsidiary "Aomori Soseiki Partners," established in 2019, the bank operates a management support business providing personnel recruitment and human resource development services, as well as a regional design business handling community revitalization planning. In fiscal 2021, the subsidiary recorded ordinary profit of 23 million yen, exceeding plan targets. The bank is also actively expanding into non-financial business domains by participating in a project to build a "culture and tourism promotion virtuous cycle model" leveraging historic buildings, developed through industry-academia-government-finance collaboration with Hirosaki City.

In new market development, the bank is expanding its service area through integration with Michinoku Bank while maintaining community-focused services within Aomori Prefecture. By leveraging both banks' customer bases and sales networks, the bank can provide broader financial intermediation services and increase market share. On the human resources front, the bank implemented personnel system reforms based on the concept of "total employee engagement through professional development and professionalization," shifting from seniority-based to merit-based compensation. By abolishing the senior staff system for employees aged 56 and above and restructuring a consistent wage system through age 60, the bank has enhanced employee motivation and organizational strength.

Regarding technological innovation, the bank is actively promoting business digitalization. Tablet terminals have been introduced for deposit account opening and loan applications to improve operational efficiency at branches. Personnel freed up through reduced internal administrative workload have been reassigned to consulting operations, enabling the bank to provide higher-value-added services to customers. The bank is also advancing workplace reforms in parallel, including flexible working hour systems and diversified dress codes, undertaking organizational transformation that transcends traditional banking operations.