• 1. Company Information

  • Q.01. Please give an outline of the Sumitomo Mitsui Trust Group.
  • Q.02. Describe the officers and management structure.
  • Q.03. Describe the corporate governance system.
  • Q.04. Describe the CSR in Sumitomo Mitsui Trust Group.
  • Q.05. Describe the holding company aspects of SMTH.
  • Q.06. Describe your history.

• 2. Business Description

  • Q.07. How is a trust bank different from an ordinary commercial bank?
  • Q.08. Please describe your businesses in a little more detail.

1. Company Information

Q.01. Please give an outline of the Sumitomo Mitsui Trust Group.

A.01. Sumitomo Mitsui Trust Holdings, Inc. ("SMTH") is a financial holding company which was launched on April 1, 2011, through the management integration of Chuo Mitsui Trust Group ("CMTH Group") and Sumitomo Trust and Banking Group ("STB Group"). Sumitomo Mitsui Trust Group ("SMTH Group") is comprised of group companies engaged in a wide range of businesses such as retail financial services, wholesale financial services, stock transfer agency services, real estate, fiduciary services, global markets, centered on Sumitomo Mitsui Trust Bank, Limited (*"SMTB").
(*) SMTB was established through the merger of Chuo Mitsui Trust and Banking Company, Limited ("CMTB"), The Chuo Mitsui Asset Trust and Banking Company, Limited ("CMAB") and The Sumitomo Trust and Banking Co., Ltd. ("STB") on April 1, 2012.
For more details, please refer to "Corporate Profile", "Outline of Business", and "Group Companies."

Q.02. Describe the officers and management structure.

A.02. Regarding our officers, please refer to "Board of Directors and Executive Officers."

Q.03. Describe the corporate governance system.

A.03. In order to enhance transparency of management and for quick decision making, SMTH has introduced an executive officer system and clarified the authority and responsibilities of each Directors and Executive Officers, as its works to develop an efficient management system. SMTH has also adopted a corporate auditor system. The Board of Corporate Auditors has six members including four external auditors, who conduct audits of Directors' execution of duties, based on audit policy and plans developed by the corporate auditors.
For more details, please refer to "Corporate Governance."

Q.04. Describe the CSR in Sumitomo Mitsui Trust Group.

A.04. Regarding our CSR activities, please refer to "CSR."

Q.05. Describe the holding company aspects of SMTH.

A.05. SMTH is a financial holding company with subsidiaries centered on SMTB. Each subsidiary has a management system that is able to complete its own business independently. SMTH focuses on the management of business operations as the holding company, and is in charge of the following functions:

• (1)Formulating group management strategy
• (2)Allocation of management resources
• (3)Monitoring administration of business activities
• (4)Supervising risk management
• (5)Supervising compliance management
• (6)Managing internal auditing

Q.06. Describe your history.

A.06. CMTH Group and STB Group reached a basic agreement in November 2009 to undergo a management integration, in order to establish "The Trust Bank." Both group reached the final agreement in August 2010, and after that, SMTH Group was established in April 2011.
For more details, please refer to "The Group's History."

2. Business Description

Q.07. How is a trust bank different from an ordinary commercial bank?

A.07. In addition to ordinary commercial bank business, a trust bank provides a wide range of services concerning asset management and administration, and disposal of assets, with trustee business such as pension trusts and investment trusts, and complementary businesses such as real estate brokerage and stock transfer agency services. A trust bank has strong business foundations based on high levels of expertise in the fields of asset management and administration, regardless of whether for individuals, corporations or institutional investors, which can be considered its greatest feature.

Q.08. Please describe your businesses in a little more detail.

A.08. SMTH group provides wide range of products and services to our clients, mainly by SMTB, fusing following 6 business functions.
(1) Retail financial services: Deposits, Sales of investment trust and insurance, Loans to individuals, Testamentary trust/ business succession, etc.
(2) Wholesale financial services: Corporate credit, Financial products sales, overseas business, etc.
(3) Stock transfer agency services: Stock administration services, IR / SR consulting, etc.
(4) Real estate: Real estate brokerage, Securitization, Fund management, etc.
(5) Fiduciary services: Pension trust, Asset management and administration, Overseas asset management, etc.
(6) Global markets: Securities investment, Derivatives, etc.
For details regarding each business and the scale of its operations, please refer to "Outline of Business."

• 1. Concepts of Management Integration

  • Q.01. Please explain the ideas and background behind the Management Integration.
  • Q.02. What are your greatest differences from megabank groups?
  • Q.03. What does your symbol mark mean?

• 2. Midterm Management Plan

  • Q.04. Describe SMTH's Midterm Management Plan announced on November 24, 2011.

• 3. Growth Strategy, Business Strategy

  • Q.05. Describe SMTH's growth strategy.
  • Q.06. What are the strengths of SMTH compared to other financial groups?
  • Q.07. Describe your global business development.
  • Q.08. Describe your policy for integration and reorganization of asset management subsidiaries, especially the positioning of Nikko Asset Management within the group.
  • Q.09. What about SMTH's revitalization plan?

• 4. Synergy Effects of Management Integration

  • Q.10. What kind of synergy effects do you expect from management integration?
  • Q.11. Is there a chance that the integration might have a negative impact on business?
  • Q.12. What is the anticipated cost of management integration?
  • Q.13. Describe your initiatives for expansion and early realization of synergy effects.

• 5. Integration Process

  • Q.14. Describe your process for the integration of the trust banks and other group companies?
  • Q.15. Will you proceed to combine and close overlapping branches?

1. Concepts of Management Integration

Q.01. Please explain the ideas and background behind the Management Integration.

A.01. Based on the recognition of an environment with increasingly advanced and complex needs for management and administration of clients' assets, CMTH and STB groups have concentrated their business resources, such as human resources and know-how, to establish "The Trust Bank," which combines significant expertise with comprehensive capabilities. We will move onto the global stage as "leading trust bank group, which boasts the largest and the highest status in Japan, combining banking, asset management and administration and real estate businesses."

Q.02. What are your greatest differences from megabank groups?

A.02. With an ordinary commercial bank business at their core, megabank groups develop securities business, investment banking business, asset management business and a wide range of financial businesses, including consumer finance. In contrast, SMTH Group is strong in the asset management and administration business and the real estate business, aiming at a business model which creates unique added value by fusing these strengths with its banking business.
For details regarding the main business fields and main businesses of SMTH Group, please refer to "Outline of Business", and Presentation Material "IR Material for 1HFY2012" (November 20, 2012), pages 15 - 23.

Q.03. What does your symbol mark mean?

A.03. The symbol mark features "Future Bloom" representing the vision of SMTH Group, which is "to generate new value through the combination of significant expertise and comprehensive capabilities, and to help the future of our clients and society bloom." The four clear petals show our "Mission" to each stakeholder of clients, society, shareholders and employees. The four colors of petals represent our Code of Conduct ("Value"): "Truthfulness and Loyalty" (natural green), "Dedication and Development" (golden orange), "Trust and Creativity" (blue green), and "Self-help and Self-discipline" (sky blue). The corporate color is "Future Blue," which represents the integration of the sense of value that the symbol mark implies, and evokes familiarity and the future.

2. Midterm Management Plan

Q.04. Describe SMTH's Midterm Management Plan announced on November 24, 2011.

A.04. SMTH group has revised the mid-term revenue target, etc. of "The Management Integration Plan", which was disclosed in August 2010, considering recent change of economic environment such as effects of The Great East Japan Earthquake as well as the trend of stock prices and interest rates, and announced them as the "Midterm Management Plan" on November 24, 2011. As to the midterm revenue and financial targets, SMTH targets the consolidated net business profit of approx. 400.0 billion yen and consolidated net income of approx. 200.0 billion yen, and also targets the consolidated ROE of approx. 10% and non-consolidated overhead ratio of approx. 40%, in FY2015 which is the final fiscal year of the "Midterm Management Plan."
SMTH will continue its basic strategy and growth strategy ("Allocating resources to growing trust and asset administration, etc. related fee businesses to develop market and to enhance market position" and "Provide a variety of functions to our wide client base, and enhance basic profitability in the banking business through our further balanced loan portfolio"), which were announced in "The Management Integration Plan", and pursue expansion of earnings.
For details, please refer to Presentation Material "Investor Meeting on Financial results for 1HFY2011" (November 24, 2011), pages 28 - 35, and "IR Material for 1HFY2012" (November 20, 2012), pages 16.

3. Growth Strategy, Business Strategy

Q.05. Describe SMTH's growth strategy.

A.05.  In SMTH Group, fee businesses related to trust and asset administration, etc., (which includes sales of investment trusts and insurance, asset management and administration, and the real estate business, etc.) are positioned as strategic business area, into which we actively invest business resources to develop the market and to expand our market share. Meanwhile, in the banking business, which constitutes a stable earnings foundation, we provide financial intermediary functions both on and off balance sheet and other diverse functions to our expanded client base, as we proceed to build a more balanced loan portfolio focused on expanding loans to individuals and loans to Japanese corporations operating overseas.
For details, please refer to Presentation Material "Investor Meeting on Financial results for FY2011" (May 24, 2012), pages 15 - 23, and "IR Material for 1HFY2012" (November 20, 2012), pages 15 - 23.

Q.06. What are the strengths of SMTH compared to other financial groups?

A.06. Medium- to long-term growth is expected in the asset management and administration business field. SMTH has top-class expertise and business foundations. Our greatest strength may be our ability to quickly provide total solutions by fusing our banking and real estate businesses, regardless of whether for individuals, corporations or institutional investors.

Q.07. Describe your global business development.

A.07. SMTH group has accelerated the development of global business operations by utilizing its overseas network in Asia, Europe and United States. As for the fiduciary services, we have strengthened our asset management capability through the alliance with investment and/or acquisition of the asset management companies in Asia, Europe and Oceania such as DBS Asset Management (current Nikko Asset Management Asia), NewSmith LLP and so on. In addition to the existing stable "global custody business", we will promote the "fund administration business" by enhancing the services of Irish subsidiary acquired in November 2012 to provide the comprehensive Global Asset Services. In the wholesale financial services, we are focusing on making loans to overseas Japanese corporations as a strategic business area. In addition, we promote loan business to non-Japanese corporations as well.

Q.08. Describe your policy for integration and reorganization of asset management subsidiaries, especially the positioning of Nikko Asset Management within the group.

A.08. Subsidiaries which handle asset management-related businesses have reorganized by their function, to develop an organization with direct business management by the holding company. On April 2012, Sumitomo Mitsui Trust Asset Management has established through the merger of Chuo Mitsui Asset Management and STB Asset Management. From the viewpoint of pursuing our growth strategy through further strengthening of sales channels outside of the group, Nikko Asset Management ("Nikko AM") did not merge with Sumitomo Mitsui Trust Asset Management. SMTH　promotes the strategic deployment which emphasizes the independence and neutrality of Nikko AM.

Q.09. What about SMTH's revitalization plan?

A.09. We filed the "Plan for Revitalization of Sound Management" (Japanese only) on December 9, 2011 as the new trust bank group.
For details, please refer to "Overview of a Plan for Revitalization of Sound Management "

4. Synergy Effects of Management Integration

Q.10. What kind of synergy effects do you expect from management integration?

A.10. In FY2015, we estimate approx. 27.0 billion yen in revenue synergies to be achieved through the redeployment of our sales staff and the cross-selling of complementary products and services, and approx. 33.0 billion yen in cost synergies, through improvement of efficiencies in branch-related costs (to be achieved through consolidation), IT costs and personnel costs, etc., for a total benefit of approx. 60.0 billion yen.
For details, please refer to Presentation Material "Investor Meeting on Financial results for 1HFY2011" (November 24, 2011), page 32 and 35. Regarding the results of revenue synergy and cost synergy in 1HFY2012, please refer to "IR Material for 1HFY2012" (November 20, 2012), page 16.

Q.11. Is there a chance that the integration might have a negative impact on business?

A.11. CMTH and STB groups have relatively little overlap in their client bases. This integration enables us to maximize utilization of our business resources and strengths, such as human resources and know-how. Therefore, we expect that even if so-called dis-synergies arise, they will be limited.
For example, in the asset management business, unlike the previous era in which each company provided a similar product line and services, there is now an increasing management trend toward differentiation, drawing on the company's individual strengths and areas of expertise. Thus, we think that this is not a matter of simply discussing market share adjustments.

Q.12. What is the anticipated cost of management integration?

A.12. We estimate aggregated integration costs of approx. 63.0 billion yen from FY2010 to FY2015, centering on system integration costs and costs from consolidation of headquarters and branches. While, we estimate aggregated revenue and cost synergies of 144.0 billion yen over the same period, which far exceeded the above integration costs, thus absorb those costs.

Q.13. Describe your initiatives for expansion and early realization of synergy effects.

A.13. SMTH has been working to expand our business foundations in each business area such as the retail, wholesale and real estate businesses and to enhance our products and services for clients by utilizing our business know-how and operations in Japan as well as overseas at early stage. After the merger of three trust banks, we have further strengthened the measures to realize synergy effects such as the reduction of branch administration costs through the integration of overlapping branches and the shifting of head counts to the sales departments by establishing efficient operations.
For details, please refer to Presentation Material "Investor Meeting on Financial Results for FY2010" (May 26, 2011), pages 24 - 25 and "IR Material for 1HFY2012" (November 20, 2012), page 16.

5. Integration Process

Q.14. Describe your process for the integration of the trust banks and other group companies?

A.14. SMTH established SMTB on April 1, 2012 through the merger of CMTB, CMAB and STB which were under its umbrella. We also conducted the business realignment through the merger of other subsidiaries whose business were overlapped. With the merger of trust bank subsidiaries, SMTH works steadily to realize synergy effects through the concentration of head quarter's function, the integration of personnel systems and so on.
For details, please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 16.

Q.15. Will you proceed to combine and close overlapping branches?

A.15. Of the total 153 branches in Japan after the integration (as of November 30, 2012), 38 branches overlap geographically. We plan to integrate 35 branches of them, and to advance the physical integration of 15 branches out of those 35 branches through "Branch-in-branch method" by the end of FY2012. At the same time, we will also study opening new branches in areas where service improvement is needed.
For details, please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 16.

• 1. Financial Results for FY2011

  • Q.01. Please give an overview of financial results for FY2011.
  • Q.02. What are the past results of your main businesses?
  • Q.03. Describe the situation of your non-performing loans.
  • Q.04. Describe the situation of your capital.
  • Q.05. Describe the impact of European sovereign debt crisis.
  • Q.06. What kind of accounting methods did you adopt for the integration?
  • Q.07. How was your balance sheet as of the effective date of the integration?
  • Q.08. How was SMTB's balance sheet as of the date of the establishment?

• 2. Financial forecast for FY2012

  • Q.09. What is your financial forecast for FY2012?
  • Q.10. What is your dividend forecast for FY2012?

• 3. Rating information

  • Q.11. Describe the rating for each company of Sumitomo Mitsui Trust Group.

1. Financial Results for FY2011

Q.01. Please give an overview of financial results for FY2011.

A.01. As for the consolidated financial results for 1HFY2012, "Net business profit before credit costs" decreased by 27.9 billion yen from 1HFY2011 to 147.7 billion yen. This is due to the decrease in one-time effects on consolidated accounting method resulting from the management integration, in addition to the decrease in "Net interest income and related profit" and the decrease in "Net gains on bonds" which recorded significant profit in 1HFY2011.
"Ordinary profit" decreased by 50.4 billion yen from 1HFY2011 to 104.8 billion yen due to the devaluation losses of stock resulting from the decline in stock prices in addition to above mentioned, while "Total credit costs" stood at the reversal of 4.3 billion yen. As a result of the above, "Net income" (excluding 43.4 billion yen of gain on amortization of negative goodwill caused by the share exchange) decreased by 23.9 billion yen from 1HFY2011 to 60.7 billion yen, and it represents 110% of the forecast of "Net income" in 1HFY2012.
For details, please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 4-5.

Q.02. What are the past results of your main businesses?

A.02. Please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 16-23.

Q.03. Describe the situation of your non-performing loans.

A.03. <Non-Consolidated (SMTB)>
The total balance of Non-performing loans (“NPL”) (*) as of the end of September 2012 decreased by 1.7 billion yen from the end of March 2012 to 232.6 billion yen mainly due to the improvement of debtors' business condition in addition to the limited occurrence of new NPL. The NPL ratio continued to remain at low level of 1.1%. (*) Problem assets based on the Financial Reconstruction Act.
For historical trend, please refer to "Financial status."

Q.04. Describe the situation of your capital.

A.04. <Consolidated (SMTH)>
Consolidated BIS capital adequacy ratio (No.1 standard) and consolidated Tier 1 capital ratio as of the end of September 2012 stood at 16.36% and 12.05%, respectively, mainly due to the decrease in risk-weighted assets in addition to the increase in Tier 1 capital through accumulation of retained earnings, while unrealized gains/ losses of "Available-for-sale securities" deteriorated as a result of the decline in stock prices.
 Please refer to "Financial status" for the capital ratio in the past.

Q.05. Describe the impact of European sovereign debt crisis.

A.05. SMTH group's credit exposure to Europe (Excl. inter-bank transaction) stood at 876.6 billion yen as of the end of September 2012, mostly constituted by those to Germany, U.K., France, and Switzerland. Since there is no sovereign exposure to GIIPS countries (Greece, Italy, Ireland, Portugal and Spain), we consider that the impact of European sovereign debt crisis is limited.
For details, please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 26.

Q.06. What kind of accounting methods did you adopt for the integration?

A.06. With April 1, 2011 as the integration record date, we have consolidated CMTH's balance sheets to STB's balance sheets by the purchase method, according to accounting standards concerning corporate combinations.

Q.07. How was your balance sheet as of the effective date of the integration?

A.07. As to the simulation of the balance sheet as of the effective date of the share exchange, please refer to "Investor Meeting on Financial Results for FY2011" (May 24, 2012), page 47.

Q.08. How was SMTB's balance sheet as of the date of the establishment?

A.08. As to the simulation of the SMTB's balance sheet as of the date of the establishment, please refer to IR Material "IR Material for 1QFY2012" (August 10, 2012), page 12.

2. Financial forecast for FY2012

Q.09. What is your financial forecast for FY2012?

A.09. As to the forecast for FY2012, "Net business profit before credit costs" is forecasted to be 275.0 billion yen (consolidated) and 210.0 billion yen (non-consolidated) taking into account the decrease in the effect of purchase accounting method as well as the standardization of the profit from Global markets. "Net income" is forecasted to be 120.0 billion yen (consolidated) and 90.0 billion yen (non-consolidated) considering the results of 1HFY2012.
For details, please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 13.

Q.10. What is your dividend forecast for FY2012?

A.10. As for the annual dividend forecast for FY2012, dividend per share on common share is forecasted to be 8.50 yen based on the forecasted consolidated net income of 120.0 billion yen in accordance with our dividend policy which targets a consolidated dividend payout ratio at the 30% level. The interim dividend is forecasted to be 4.25 yen per share, which is equal to one-half of the annual dividend forecast.

3. Rating information

Q.11. Describe the rating for each company of Sumitomo Mitsui Trust Group.

A.11. Regarding our rating, please refer to "Rating Information."

• • Q.01. Describe your financial targets: capital adequacy ratio, ROE, etc.
  • Q.02. For capital adequacy ratio regulations, is SMTH under international standards or domestic standards?
  • Q.03. Describe your policy for responses to the new capital adequacy regulations (Basel III).
  • Q.04. Describe your thinking on reduction of cross shareholdings.
  • Q.05. Describe your dividend policy.
  • Q.06. Please provide an outline and repayment of public funds.

Q.01. Describe your financial targets: capital adequacy ratio, ROE, etc.

A.01. SMTH targets the "ROE of approx. 10%" as a medium-term financial target. Looking towards Basel III, "Common equity Tier I ratio" will be approx. 8% (after deducting all deduction items) in the final fiscal year of Midterm Management Plan (fiscal year ending Mar. 2016).
For details, please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 31.

Q.02. For capital adequacy ratio regulations, is SMTH under international standards or domestic standards?

A.02. We are under international standards.

Q.03. Describe your policy for responses to the new capital adequacy regulations (Basel III).

A.03. Currently, we think it will be possible to sufficiently achieve the levels required under Basel III without capital increase, through accumulation of retained earnings and control of risk assets.
Please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012). Page 30 shows a medium- and long-term simulation based on calculations as of the end of September, 2012.

Q.04. Describe your thinking on reduction of cross shareholdings.

A.04. The reduction of cross shareholdings has progressed steadily, sold 61.0 billion yen of stocks during FY2011 (combined total of former CMTB and former STB), and we continued to reduce them during 1HFY2012 as well. We target cross shareholding balance (after adjusting hedge effects) of approx. 30% of consolidated Tier 1 under current regulations by the end of March, 2014.
For details, please refer to Presentation Material "IR Material for 1HFY2012" (November 20, 2012), page 27 and 31.

Q.05. Describe your dividend policy on returns for shareholders, such as dividend policy, etc.

A.05. Our basic policy is to share profits with shareholders in accordance with profit level of each fiscal year, and we target the consolidated dividend payout ratio of approx. 30%.

Q.06. Please provide an outline and repayment of public funds.

A.06. As to the 500,875,000 of SMTH’s common shares held by the government as the injection of public funds (equivalent to approx. 12% of issued shares), it is fully repaid through the completion of settlement of the closing price trading as described in the news releases titled "Announcement regarding Results of Repurchase of Own Shares through Closing Price Trading (ToSTNeT-2), Repayment of Public Funds and Change of Major and Largest Shareholder" (March 11, 2013) and "Announcement regarding Full Repayment of Public Funds" (March 14, 2013). We really appreciate the public support to SMTH at our management difficulties in the past, and in the future we aim to boost our share value by working on achievement and building up of synergy effects from the integration.

• • Q.01. On which securities exchanges are you listed? Are you listed on overseas exchanges?
  • Q.02. What is your securities code?
  • Q.03. How many shares in one unit?
  • Q.04. Is it possible to trade American Depository Receipts (ADR)?
  • Q.05. Where and when will you hold the next Ordinary General Meeting of Shareholders?

Q.01. On which securities exchanges are you listed? Are you listed on overseas exchanges?

A.01. We are listed on the 1st section of TSE, OSE and NSE, and are not listed on any overseas stock exchanges.

Q.02. What is your securities code?

A.02. Our security code is 8309.

Q.03. How many shares in one unit?

A.03.  1,000 shares per unit. Also, for stock related information, refer to "Basic Stock Information."

Q.04. Is it possible to trade American Depository Receipts (ADR)?

A.04. SMTH has set up the sponsored ADR program (level 1).
For details, refer to "ADR (American Depositary Receipt) Information."

Q.05. Where and when will you hold the next Ordinary General Meeting of Shareholders?

A.05. It plans to be held in Tokyo around the end of June, 2013.