Message from the President

First of all, I would like to express our deep appreciation for your continued patronage and support of The Bank of Yokohama.

Tough Economic Environment Lingers
A worsening global financial crisis, coupled with the recession that followed and spread worldwide, has been responsible for the rapid deterioration of the Japanese economy since the second half of last year. While the Japanese economy is on the path to recovery, stimulated by both the effects of economic measures taken by the Japanese government, and encouraging signs in the global economy, the pace of the upturn is slow.

Similarly, while the economy in Kanagawa Prefecture has also witnessed a partial upturn, with drops in exports subsiding, personal consumption and capital expenditure remain weak, meaning that it continues to be likely that a full-fledged recovery will take more time.

Although, the current economic environment remains tough, it is nevertheless our firm belief that we will continue to grow in the future as a bank, and continue to offer value to our local customers under these circumstances. The Bank of Yokohama, together with its affiliated companies, needs to further improve its capabilities in responding properly to the needs of its customers by securing a robust financial base in preparation for the future and by expanding its lineup of services.

Development of Core Measures for the Future
As specific measures toward such ends, our main efforts are focused on: a smooth transition from the current banking system to the “MEJAR” shared use system, which we are developing jointly with The Hokuriku Bank, Ltd. and The Hokkaido Bank, Ltd.; provision of proper financial services to customers through our Shanghai Branch; and offering asset management proposals to meet our customers’ needs through Hamagin Tokai Tokyo Securities Co., Ltd. (“Hamagin TT Securities”), which has started operations of a combined banking and securities branch. Each one of these measures is essential in establishing a stable foundation for our management and operations.

With regards to the “MEJAR” shared use system, the Bank will introduce the system in January 2010, ahead of two other banks. This will enable our mission-critical system to be equipped with state-of-the-art functions, allowing us to offer new products and services in a timely manner, which will benefit our customers through improved convenience.

Furthermore, the Shanghai Branch, which opened in November 2009, becoming the first overseas branch established in nearly 11 years, is expected to grow as a critical base for the provision of proper financial services for our business partners already operating in China, and for the provision of detailed information that customers planning to expand and operate into China would expect to receive in Japan.

In addition, Hamagin Tokai Tokyo Securities, a securities firm within the Bank of Yokohama Group since November 2008, established the Nakayama Branch, its first combined banking and securities branch in July 2009, followed by the Odawara Branch in October 2009. We plan to open more combined branches in the future in response to the diverse needs of customers in the area of asset management by making the most of our networks in the region.

Toward the Final Year of the Medium-term Management Plan
Toward the final year of our medium-term management plan, which sets up our long-term vision of focusing on becoming an attractive financial institution for customers, shareholders, employees and communities, we have steadily taken each and every step in achieving these goals in the current fiscal year, the final year of “New Horizon,” our three-year medium-term management plan toward realizing our long-term vision.

With the recent and rapid changes in the social and economic environment, and increasingly competitive conditions across all business categories, all executives and employees of the Bank are determined to make an even more concerted effort in considering and working together with their communities toward successful advances.

We look forward to your continued support in the future.