ANNUAL REPORT - smth.jpsmth.jp/en/ir/annual/2011/all.pdf · Contents 2 Sumitomo Mitsui Trust Holdings, Inc. 2012 Annual Report Financial Highlights Special Feature Review of Operations

ANNUAL REPORTY e a r e n d e d M a r c h 3 1 , 2 0 1 2

2012

SuMi TRUST is the overseas marketing name of the Sumitomo

Mitsui Trust Group and its affiliated companies.

Based on the Trustee Spirit and with significant expertise and

comprehensive capabilities, SuMi TRUST will create distinct values

by leveraging a new business model, combining its banking, asset

management and administration, and real estate businesses, and will

move onto the global stage as a leading trust bank group which boasts

the largest and highest status in Japan.

Symbol MarkThe symbol mark features Future Bloom representing the vision of Sumitomo Mitsui Trust Group, which is to gener-

ate new value through the combination of significant expertise and comprehensive capabilities, and to help the future ofour clients and society bloom.

Corporate ColorThe corporate color is Future Blue, which represents the integration of the sense of value that the symbol mark

implies, and evokes the closeness and the future.

1Sumitomo Mitsui Trust Holdings, Inc. 2012 Annual Report

Codes of Conduct (Value)

Management Principles (Mission)

(I) Swiftly provide comprehensive solutions to our clients by fully utilizing the significant expertise and com-prehensive capabilities.

(II) Adhere to the principles of sound management based on a high degree of self-discipline with the back-ground of Trustee Spirit and establish strong credibility from society.

(III) Strive to fulfill all shareholder expectations by creating distinct values through fusing the various functionsfeaturing the trust bank group.

(IV) Offer a workplace where the diversity and creativity of its employees are more fully utilized to add value tothe organization and where employees can have pride and be highly motivated in fulfilling their missions.

Based on the Trustee Spirit and with significant expertise and comprehensive capabilities, Sumitomo MitsuiTrust Group will create distinct values by leveraging a new business model, combining its banking, asset man-agement and administration, and real estate businesses, and will move onto the global stage as a leading trustbank group which boasts the largest and highest status in Japan.

Ideal Model (Vision)Towards The Trust Bank

In order to pursue the Management Principles of Sumitomo Mitsui Trust Group, the executives and employeescommit themselves to comply with the six Codes of Conduct described below.

Completely Client-orientedTruthfulness and LoyaltyWe will adhere to the highest degree of Truthfulness and Loyalty as well as credibility and sureness, andwill carry out all our responsibilities for client satisfaction and comfort as our top priority.

Contribution to SocietyDedication and DevelopmentWe will remain dedicated in all our efforts, with Frontier Spirit, and continue to contribute to society.

Realization of Organizational CapabilityTrust and CreativityWe will realize our organizational capabilities with full of mutual trust and creativity through improvement bymutual learning and continuous personal transformation of various people who share the enthusiasm for trust.

Establishment of IndividualitySelf-help and Self-disciplineWith a spirit of self-help and self-discipline as well as a sense of ownership, we will carry out our responsibilities.

Strict Compliance with Applicable Laws and RegulationsWe will strictly comply with all applicable laws, rules and regulations, and will ensure that all our corporateactivities meet the highest standards of social norms.

Resolute Stance against Antisocial ForcesWe will continue to take a resolute stance against antisocial forces, which may threaten public order andthe security of civil society.

Contents

2 Sumitomo Mitsui Trust Holdings, Inc. 2012 Annual Report

Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

27 Review of Operations28 Business Outline

30 Retail Financial Services Business

34 Wholesale Financial Services Business

39 Stock Transfer Agency Services Business

44 Real Estate Business

50 Fiduciary Services Business

58 Global Markets Business

60 Other Subsidiaries

15 Special Feature16 The Challenge of Being The Trust Bank

18 Retail Business

20 Global Business

22 Topics

The topics covered include our next core businesses, taking into account the current business environment, as well as the estab-lishment of Sumitomo Mitsui Trust Bank, Limited, its new character, and other topics.

4 Top Message6 Top Interview

Chairman Tsunekage and President Kitamura explain the Groupsstrengths, the Midterm Management Plan, and priority policies, etc.

11 Financial Highlights

3

Contents

Sumitomo Mitsui Trust Holdings, Inc. 2012 Annual Report

FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Website http://www.smth.jp/en/

We disclose information about the Groups overall financial condition in a time-ly, fair, and forthright manner on our website.

Website of Sumitomo Mitsui Trust Bank, Limitedhttp://www.smtb.jp/tools/english/

61 Management Structure62 Corporate Governance, Internal Control

65 Compliance System

67 Client Protection Management

68 Risk Management

70 Capital Management

71 Information Disclosure System and Internal Auditing

72 Efforts to Enhance Customer Satisfaction

74 CSR (Corporate Social Responsibility)

Details are provided on essential elements for establishing management foundations,including corporate governance, internal controls, compliance, risk management, and CSR.

81 Corporate Data82 Sumitomo Mitsui Trust Holdings, Inc.

84 Sumitomo Mitsui Trust Bank, Limited

95 Financial and Capital Adequacy Ratio Related Data525 Stock Information526 Disclosure Policy527 Corporate Information527 Rating Information

Top Message


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

First, we would like to extend our heartfelt

thanks to all stakeholders for your invaluable

support. This annual report was created

to explain our fiscal year 2011 results and the

situation of each business. We hope it proves

useful to you.

Regarding the economic environment in fiscal year 2011, we faced a global eco-

nomic slowdown, amid a deepening of Europes sovereign debt crisis. In Japan,

reconstruction demand following the Great East Japan Earthquake had a positive

impact, but the pace of the countrys economic recovery slowed as the yens his-

toric appreciation and other factors held down exports and curbed growth in cor-

porate profits.

Amid this economic and financial environment, Sumitomo Mitsui Trust Group

(the Group) was established in April 2011 through the management integration

of Chuo Mitsui Trust Holdings, Inc., and The Sumitomo Trust and Banking Co., Ltd.

To consolidate our position as The Trust Bank, a leading trust bank group which

boasts the largest scale and highest status in Japan, and to achieve the early real-

ization of synergy effects of the management integration, we proceeded with

preparations to establish our new bank and to integrate our affiliated companies.

We also worked to enhance our earnings power through cooperation among

group companies.

(Right)

Hitoshi TsunekageChairman

(Left)

Kunitaro KitamuraPresident

In fiscal year 2011, on a consolidated basis, net business profit before credit

costs increased by 51.5 billion year on year to 342.2 billion, and net income

amounted to 164.6 billion.

The increase in net business profit before credit costs was attributable to such

factors as steady growth in market-related earnings as well as the effects of consoli-

dated accounting treatment following the management integration. If transient

accounting factors such as the gain on negative goodwill and the lower corporate

tax rate are excluded, net income remained virtually on par with the previous years

level, as the increase in net business profit before credit costs, etc., absorbed the

negative factors, such as losses on devaluation of stocks and other securities.

We have decided to pay a year-end dividend of 4.5 per share.

Including the interim dividend paid last December, the total annual dividend for

the fiscal year ended March 31, 2012 will be 8.5.

Finally, we must report a regrettable incident and apologize.

The Securities and Exchange Surveillance Commission has recently made a rec-

ommendation for the issuance of an order for the payment of an administrative

monetary penalty against Sumitomo Mitsui Trust Bank, Limited, for the violation of

the Financial Instruments and Exchange Act (insider trading) with respect to the

sale of shares, etc., on several occasions in 2010 by the former Chuo Mitsui Asset

Trust and Banking Company, Limited. The Group recognizes this to be a very seri-

ous incident, and has reflected deeply on this matter. We are strengthening the

compliance systems of all group companies by taking measures to prevent a similar

transgression, and all of us, including both executives and employees, will do our

best to quickly recover the trust of shareholders, clients and the market.

We humbly request your continuing support.

July 2012

5

Top Message


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Chairman

President

Top Interview


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Full-scale Commencement of Operations as The Trust BankWith the establishment of Sumitomo Mitsui Trust Bank, Limited on April 1, 2012, Sumitomo

Mitsui Trust Groups The Trust Bank possessing both significant expertise and comprehensive

capabilities, has gotten off to a full-fledged start. Chairman Tsunekage and President Kitamura

discuss the Groups strengths and the Midterm Management Plan.

With regard to individual clients, taking into account

this current operating environment, characterized by

prevailing uncertainty about the future, our clients are

showing a growing need to provide an inheritance for

their family members and build assets to cover living

expenses after retirement. Our clients, including corpo-

rate clients, are facing increasingly advanced and com-

plex issues. Comprehensive solutions are required now

more than ever, and as a financial institution, we need to

adopt a multifaceted approach to problems and deliver

total solutions, instead of providing services that

address a single aspect of a given issue.

Under these circumstances, we believe that among all the

financial services available, the trust function is the one that

provides the most flexible and diverse response, and affords

the greatest opportunities for meeting clients needs.

Currently, many people, faced with persistent uncertainties about the future, have deepening con-cerns about asset management and administration. Wouldnt you agree that the result is height-ened expectations for a trust bank?

Question

7

Top Interview


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

The Group, an independent financial group specialized

in trust banking, conducts its banking, trust and real estate

businesses in an integrated manner. Our greatest strength

is the ability to choose, from a wide range of products and

services, those products and services that meet the specif-

ic needs of individual clients, while fully leveraging our sig-

nificant expertise and comprehensive solution capabilities,

Please explain the unique strengths that distinguish Sumitomo Mitsui Trust Group from otherfinancial groups.

Question

based on the Trustee Spirit, which makes clients profits

the first priority. Also, we will work to provide professional

total solutions that are not available from other financial

groups by featuring the superiority of individual products,

the high quality of our comprehensive solutions, the agility

with which we make proposals, and the excellence of our

follow-up services.

8

Top Interview


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

The plan covers the four years from fiscal 2012 to 2015.

During this period, we aim to pave the way for Sumitomo

Mitsui Trust Group to get on a sustainable growth path

and to consolidate our position as The Trust Bank,

which is capable of creating unique added value to distin-

guish the Group from other financial groups.

We will make extensive efforts to fully realize the syner-

gy effects of the management integration. In fiscal year

2015, we plan to achieve revenue synergies of 27.0 billion

and cost synergies (cost reduction benefits) of 33.0 bil-

lion, for aggregated synergies of 60.0 billion.

We aim to realize the revenue synergies by reassigning

Please describe your Midterm Management Plan formulated last November.

Question

The integrationsimpact on revenue

FY2015revenue synergies

The integrationscost reduction benefits

FY2015cost synergies

Reassignment of head office staff to sales depts., etc. 27.0 billion/year

Consolidation of head office depts. & branches

Cost reduction through IT system integration, etc.

33.0 billion/year

In fiscal year 2015, we aim to achieve synergy effects of 60.0 billion per year from the management integration.

Assumptions: March 31, 20163-month TIBOR (short-term interest rate): 0.725%10-year JGB (long-term interest rate): 1.60%Nikkei Stock Average: 13,000

Consolidated net businessprofit before credit costs: Approximately 400.0 billionConsolidated net income: Approximately 200.0 billion

Consolidated ROE: Approximately 10%Non-consolidated OHR: Approximately 40%

FY2015 revenue targets

Medium-term financial targets

Through these initiatives, we aim to achieve our

Midterm Management Plan revenue targets of approxi-

mately 400.0 billion in consolidated net business profit

before credit costs and approximately 200.0 billion in

consolidated net income in fiscal year 2015.

We also aim to attain our medium-term financial targets

of a consolidated ROE of approximately 10% and a non-

consolidated overhead ratio (OHR) of approximately 40%.

staff members that were freed up in the management inte-

gration, transferring them mainly from head office depart-

ments to strategic business areas that include the sales

operations for investment trust and insurance products,

and the asset management and administration, real

estate, and global markets businesses.

We will pursue cost synergies by reducing non-person-

nel expenses through the reorganization of the head

offices departments and branch offices, and also by lower-

ing maintenance and operational expenses through IT sys-

tem integration, among other measures.

9

Top Interview


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

In fiscal year 2012, with a particular focus on enhancing

retail and global business operations, we will work to

establish a new business model that creates unique added

value by reforming each group companys products and

services, business structure, and business processes, and

by strengthening our group-wide capabilities for providing

effective solutions.

Specifically, we will work to strengthen various fee busi-

nesses, such as the investment management consulting

business for clients that include both individuals and finan-

cial institutions. We will also make efforts to enhance the

basic earnings power of our banking business, primarily

through the provision of loans to Japanese corporations

operating overseas and major foreign corporations to

meet their strong demand for borrowing.

We will also establish a practical and advanced risk

management system that is well adapted to our new busi-

nesses. With regard to compliance, we take the recent vio-

lation of the insider trading regulations extremely

seriously. Accordingly, we will work to prevent a similar

transgression in the future. We will put in place, and duly

enforce, rigorous measures to restore the publics trust.

Such measures will include the group-wide implementa-

tion of measures aimed at preventing the recurrence of

any violation of insider trading rules.

Under Basel III, banks are required to secure even high-

er levels of capital adequacy in terms of both quality and

quantity. For example, the Common Equity Tier I ratio

(the new regulatory capital component) will have to be

raised to 7% or higher by the end of March 2019. We

expect to be able to comfortably meet such requirements

through the steady accumulation of retained earnings in

line with the Midterm Management Plan.

Specifically, the Groups Common Equity Tier I ratio

stood at between 6.0% and 6.5% as of the end of March

2012 (preliminary calculations that assume the full intro-

Please describe your priority policies for fiscal year 2012, based on the Midterm Management Plan.

Question

Please describe your response to the phased introduction of new BIS capital adequacy regulations(Basel III, which will start at the end of March 2013).

Question

duction of the new regulatory standard without regard for

phase-in arrangements and that will remain in effect dur-

ing the phased rollout). At the end of fiscal year 2015

(March 31, 2016), the final fiscal year of the Midterm

Management Plan, we expect our Common Equity Tier I

ratio to stand at approximately 8%, which is well above the

required capital level.

The Group will further strengthen its sound financial

position and enhance capital efficiency. We thereby aim to

maximize shareholder profits.

10

Top Interview


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

We regard the return of profits to shareholders as one

of our important management policies. Our basic policy is

to return profits to shareholders commensurate with busi-

ness results. We will satisfy shareholders expectations

through the return of profits, while simultaneously working

to increase our enterprise value through strategic invest-

ments that will lead to new growth.

To be more specific, regarding dividends on common

shares, we aim to ensure a consolidated dividend payout

ratio of approximately 30% in light of a comprehensive

evaluation of such factors as our medium-term ROE target

and the strategic investment environment.

Based on this policy, we plan to pay a dividend of 8.5

per common share for the fiscal year ending March 2013

on forecasted consolidated net income of 120.0 billion.

Following the establishment of Sumitomo Mitsui Trust

Holdings, Inc. last year, the Group merged its three trust

banks this April, thereby creating Sumitomo Mitsui Trust

Bank, Limited. The Group affiliates also made a fresh start

with new names that begin with Sumitomo Mitsui Trust,

in principle.

As a result of our recent management integration, we

have gained the top market share for major trust and asset

administration operations in Japan. However, we will

never forget our spirit as a challenger. All of us within

the Group, including both executives and employees, will

keep working diligently and make our utmost efforts to

enhance the quality of our services.

We sincerely hope to continue receiving your support.

Please explain your dividend policy.

Question

Please give a message to stakeholders.

Question


Financial Highlights

FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

FY2011 (A) FY2010 (B)

FY2011 (A) FY2010 (B)(1) Rate of changeChange (A)(B)

In the consolidated financial results for fiscal year 2011, net business profit before credit costs increased by 51.5 billion

year on year to 342.2 billion, due to the growth in market-related profit as well as the effects of consolidated accounting

treatment following the management integration.

Net income increased by 33.8 billion year on year to 164.6 billion. Although stock-related losses of 33.9 billion were

recorded primarily as losses on devaluation of stocks and other securities, credit costs were somewhat limited, and

there was a gain on amortization of negative goodwill (43.4 billion) arising from an exchange of shares.

Regarding our year-end dividend, based on approximately a 30% consolidated payout ratio, we intend to distribute

a year-end dividend of 4.5 per common share. The annual dividend for the fiscal year will be 8.5 per common share (which

is 0.5 more per share than our initial forecast, and includes the 4 interim dividend per share we paid last December).

Net Business Profit before Credit Costs*

Ordinary Profit

Net Income

Return on Equity

Net Income per Common Share (Yen)

Total Credit Costs*

Billions of Yen (Unless specified otherwise)

FY2011 Financial Results:

342.2

272.1

164.6

9.58%

38.54

(8.9)

290.6

185.4

130.7

(24.3)

51.5

86.6

33.8

15.3

17.7%

46.7%

25.9%

63.3%

Rate of changeChange (A)(B)

Net Business Profit before Credit Costs*

Net Interest Income and Related Profit*

Net Fees and Commissions and

Related Profit*

Net Trading Profit

Net Other Operating Profit

General and Administrative Expenses

Net Non-recurring Profit, etc.

Ordinary Profit

Extraordinary Profit

Net Income

Total Credit Costs*

The Former Chuo Mitsui Trust and Banking (Non-consolidated) + Former Chuo Mitsui Asset Trust and Banking (Non-consolidated) + The Former Sumitomo Trust and Banking (Non-consolidated)

Billions of Yen (Unless specified otherwise)

239.0

228.3

164.9

12.5

81.8

(248.6)

(80.8)

158.1

(44.5)

56.4

1.1

233.3

247.2

170.6

15.2

42.2

(242.1)

(83.9)

149.4

0.7

123.0

(7.4)

5.6

(18.9)

(5.6)

(2.7)

39.5

(6.5)

3.0

8.7

(45.3)

(66.6)

8.5

2.4%

(7.7%)

(3.3%)

(17.8%)

93.5%

(2.7%)

3.7%

5.9%

(5,859.2%)

(54.2%)

115.0%

(Note) Amounts less than 100 million are rounded down.

(1) Consolidated figures for the previous fiscal year: Unadjusted total of the results of former Chuo Mitsui Trust Holdings (Consolidated) and the former Sumitomo Trust andBanking (Consolidated)

FY2011 (A) FY2010 (B) Change (A)(B)

Dividend per Share on Common Share (Yen)

8.50

Terms with an asterisk are explained in Glossary on page 12.

12



Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Net Business Profit before Credit Costs*Net business profit before credit costs increased on botha consolidated and a non-consolidated basis, due to steadygrowth in market-related earnings.

On a non-consolidated basis, net business profit before credit costsincreased by 5.6 billion year on year to 239.0 billion as a steep increase innet gains on bonds offset declines in net interest income and related profitand net fees and commissions and related profit. On a consolidated basis,net business profit before credit costs increased by 51.5 billion year on yearto 342.2 billion due to the positive effects of consolidated accounting treat-ment following the management integration.

Status of Profit and Loss

400.0

300.0

200.0

100.0

0FY2009 FY2010 FY2011

316.3284.4 290.6

233.3

(Billions of Yen)

Non-consolidated (Three-company total(1)) Consolidated

342.2

239.0

(1) Total of the results of the former Chuo Mitsui Trust and Banking, former Chuo Mitsui Asset Trust and Banking, and the former Sumitomo Trust and Banking (The same shall apply in the following charts.)

Net Interest Income and Related Profit*Despite a rise in the yields on securities, net interest incomeand related profit declined due to a shrinkage in the loan-deposit margin.

On a non-consolidated basis, net interest income and related profitdecreased by 18.9 billion year on year to 228.3 billion. Although secu-rities investment income improved, the loan-deposit margin narrowedas a result of a decline in market interest rates, etc. On a consolidatedbasis, net interest income and related profit decreased by 0.5 billionyear on year to 264.1 billion, due to the effects of consolidatedaccounting treatment following the management integration.

400.0

300.0

200.0

100.0

0FY2009 FY2010 FY2011

(Billions of Yen)

315.5311.1

247.2 264.7 264.1228.3

Non-consolidated (Three-company total) Consolidated

Net Fees and Commissions and Related Profit*While fees from real estate brokerage transactions declined,sales of investment trust and insurance products grew steadily.

Although fees from sales of investment trust and insurance productsgrew, fees from real estate brokerage transactions declined due to theimpact of the Great East Japan Earthquake, among other factors. As a result,net fees and commissions and related profit decreased by 5.6 billion yearon year to 164.9 billion on a non-consolidated basis. On a consolidatedbasis, net fees and commissions and related profit increased by 30.5 billionyear on year to 291.0 billion, mainly due to the addition of Japan TrusteeServices Bank as a consolidated subsidiary.

300.0

200.0

100.0

0FY2009 FY2010 FY2011

(Billions of Yen)

237.4

166.7 170.6

260.5291.0

164.9


Net IncomeNet income increased due to the gain on the amortizationof negative goodwill related to share exchange.

On a consolidated basis, net income increased by 33.8 billion year onyear to 164.6 billion, partly due to one-time factors such as the gain onthe amortization of negative goodwill related to the exchange of shares,and effects of the lower corporate tax rate. However, even excludingthese one-time effects, we maintained substantially the same incomelevel as the previous fiscal year.

On a non-consolidated basis, net income decreased by 66.6 billionyear on year to 56.4 billion, partly due to one-time effects such the losson cancellation of shares due to absorption of a subsidiary.

200.0

100.0

150.0

50.0

0FY2009 FY2010 FY2011

(Billions of Yen)

100.079.3

123.0 130.7

164.6

56.4


Terms with an asterisk are explained in Glossary below.

Net Business Profit before Credit CostsSubstantial profit of a banks core businesses, calculated by eliminatingthe effects of non-recurring factors, such as total credit costs and netgains on stock from ordinary profit.

Total Credit CostsCosts incurred in posting allowances for losses on loans and writing off loans.

Net Interest Income and Related ProfitNet revenues after subtracting interest paid on deposits, etc., from rev-enues on loans and securities investment.

Net Fees and Commissions and Related ProfitNet profit of the sales fees of investment trusts, real estate brokeragefees, and trust fees for assets under management, etc.

Glossary

13



FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Financial Status

Loans and Deposits(Non-consolidated(Two-company total)(1))

While loans decreased, deposits solidly increased.Loans decreased by 0.4 trillion year on year to 21.0 trillion. Although

loans to individuals were solid, loans to corporate clients decreased.Deposits, etc.(2) increased by 0.1 trillion year on year to 23.4 trillion,because the deposits of both individuals and corporate clients remainedfirm, while trust principal decreased.

(1) Two-company total: Total of the results of the former Chuo Mitsui Trust andBanking and the former Sumitomo Trust and Banking (The same shall apply in thefollowing charts.)

(2) Deposits, etc. include the principal guaranteed trust account (loan trusts andjointly-operated money trusts), but exclude negotiable certificates of deposit.

30

10

20

0End of

March 2010End of

March 2011End of

March 2012

(Trillions of Yen)

21.323.0 23.3

21.4 21.023.4

Deposits, Trust Principal Loans

Problem Assets Based on the FinancialReconstruction Act*(Non-consolidated (Two-company total))

The ratio to total loan balance was low, at 1.1%, and a sufficientfinancial provision was made.

The total balance of problem assets based on the FinancialReconstruction Act declined by 11.0 billion from the end of the previous fis-cal year to 234.3 billion, mainly due to upgrades in credit status resultingfrom an improvement in the business conditions of borrowers and also dueto repayments, although some large borrowers went bankrupt. The ratio ofproblem assets based on the Financial Reconstruction Act to the total loanbalance remained stable, at the low level of 1.1%.

As for the ratio of problem assets covered by collateral and the allowance forloan losses, the coverage ratio came to 90% for doubtful loans* and 73% for sub-standard loans*, indicating that a sufficient level of financial provision was ensured.

300.0

100.0

200.0

0End of

March 2010End of

March 2011End of

March 2012

(Billions of Yen) (%)3.0

1.0

2.0

0

294.7

245.3 234.3

1.3 1.1 1.1

Problem Assets Based on the Financial Reconstruction Act (Left)Ratio to Total Loan Balance (Right)

Total Qualifying Capital, etc. (Consolidated)A sufficient level of capital continued to be ensured in terms ofboth quality and quantity.

The consolidated BIS capital adequacy ratio* came to 16.68%, and theconsolidated Tier I capital ratio* came to 11.87% as a result of an increase incapital due to the booking of profits and a decline in risk-weighted assets*centering on credit risk-weighted assets.

3,000

1,000

2,000

0End of March 2012

(Billions of Yen) (Trillions of Yen)30

10

20

0End of March 2011(Trial Calculation)(1)

2,120

2,980

16.68

11.87

2,040

2,920

15.58

10.90

17.818.7

Tier I Capital (Left)Risk-Weighted Assets, etc. (Right)Capital (Left)

BIS Capital Adequacy Ratio (%) Tier I Capital Ratio (%)

(1) The impact of the management integration has been added to the sum of the figures for former Chuo Mitsui Trust Holdings Inc. and the former Sumitomo Trust and Banking Co., Ltd.

Problem Assets Based on the Financial Reconstruction ActAssets for which disclosure is required by the FinancialReconstruction Act, and which are classified as follows. These aregenerally used in referring to non-performing loans.

Assets Bankrupt and Practically BankruptAssets to debtors who are legally bankrupt (due to bankruptcy,corporate reorganization or rehabilitation proceedings, etc.), orvirtually bankrupt.

Doubtful AssetsAssets to debtors who are not legally bankrupt, but whose finan-cial conditions and business results have deteriorated, with a highlikelihood that the lender will not be able to collect the principalor receive interest in accordance with the contract.

Substandard AssetsAssets more than three months past due and assets whose termshave been modified to support debtors through such means asinterest reductions or exemptions.

Capital Adequacy RatioThe ratio of capital to risk-weighted assets, and one of the indicatorsshowing the soundness of banks. Internationally active banks arerequired to maintain the ratio at 8% or higher.

Tier I Capital RatioThe ratio obtained by dividing Tier I capital (composed of core capi-tal, consisting primarily of the capital stock, the capital surplus, andretained earnings) by risk-weighted assets, etc. A high Tier I ratioequals a high core capital ratio, indicating a high quality of capital.

Risk-Weighted Assets, etc.Calculated by multiplying assets, such as loans and securities, bypercentages commensurate with the risk associated with each asset.

Glossary


14



Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Net Business Profit before Credit Costs, by Business

Retail Financial Services Business*While income from the loan-deposit margin declined, feesfrom sales of investment trust and insurance products grew.

Fees from sales of investment trust and insurance products grew.However, as net interest income related to housing loans and depositsdecreased, net business profit before credit costs declined by 4.1 billionyear on year to 16.8 billion on a non-consolidated basis, and by 4.8 bil-lion to 24.2 billion on a consolidated basis.

40.0

30.0

20.0

10.0

0FY2009 FY2010 FY2011

(Billions of Yen)

24.2

16.8

26.1

34.2

21.0

29.0


Wholesale Financial Services Business*Net business profit before credit costs decreased on both aconsolidated and a non-consolidated basis, due to the declinein income resulting from a shrinkage in the loan-deposit margin.

Net business profit before credit costs decreased by 4.5 billion yearon year to 94.6 billion on a non-consolidated basis and by 6.4 billion to119.9 billion on a consolidated basis, mainly due to a shrinkage in theloan-deposit margin caused by a decline in market interest rates.

150.0

100.0

50.0

0FY2009 FY2010 FY2011

(Billions of Yen)

119.9120.8

140.6

99.1

126.4

94.6


Treasury and Financial Products Business*Net business profit before credit costs grew, due to bondinvestments that took advantage of the market conditions.

Net business profit before credit costs increased by 33.9 billion yearon year to 133.8 billion, due to bond portfolio management that tookadvantage of interest rate declines.

150.0

100.0

50.0

0FY2009 FY2010 FY2011

(Billions of Yen)

115.099.8

133.8

Non-consolidated (Three-company total)

Fiduciary Services Business*Despite the steady performance of subsidiaries, net busi-ness profit before credit costs decreased due to a decline inthe balance of assets under management.

On a non-consolidated basis, net business profit before credit costs decreasedby 3.2 billion year on year to 31.0 billion, mainly due to a decline in the total mar-ket value of the balance during the period. However, on a consolidated basis(including Nikko Asset Management Co., Ltd. and others), net business profitbefore credit costs decreased by 1.4 billion year on year to 45.0 billion.

50.0

40.0

30.0

20.0

10.0

0FY2009 FY2010 FY2011

(Billions of Yen)

37.443.1

34.2

46.4 45.0

31.0


Real Estate Business*Net business profit before credit costs decreased due toa decline in brokerage fees.

Net business profit before credit costs decreased by 5.2 billion year onyear to 10.0 billion on a non-consolidated basis, and by 5.5 billion to 11.2billion on a consolidated basis, mainly due to a decline in real estate broker-age fees for corporate clients amid the weakness of the real estate market.

20.0

15.0

10.0

5.0

0FY2009 FY2010 FY2011

(Billions of Yen)

8.4 8.7

15.316.7

11.210.0


Retail Financial Services BusinessProviding portfolio consulting related to financial assets and housingand other loans for individual clients.

Wholesale Financial Services BusinessProviding corporate loans, arranging asset securitization, providingconsulting for corporate clients, investing in corporate bonds andother securities, and providing stock transfer agency service.

Treasury and Financial Products BusinessControlling internal financial risks, undertaking proprietary trading,and providing market-based financial products to clients.

Fiduciary Services BusinessConducting pension-related business for corporate clients, provid-ing asset management products for corporate and individual clients,and providing securities custody services for corporate clients.

Real Estate BusinessEngaging in real estate brokerage and securitization, and providingreal estate-related investment advisory services and real estateappraisal services.


Glossary

Special Feature:

The Challenge of Being The Trust Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Retail Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Global Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

As Japans society ages and matures, the issues and problems being faced by individual clients regarding asset management and administration are becoming increasingly advanced and complex.

As economies become more and more border-less, Japanese companies that are transferring their operations overseas and advancing into foreign markets are seeing a growing need for financial support, as well as global asset management and administration services.

In light of this operating environ-

ment, Sumitomo Mitsui Trust Group

(The Group) will pour its efforts

into utilizing its expertise and com-

prehensive capabilities in its retail

and global businesses so as to quickly

provide total solutions to clients.

Retail Business

CoreBusinesses

Global Business

Special Feature:The Challenge of Being The Trust BankA Trust Bank Group with Comprehensive Capabilities and Expertise


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

1.0

(Trillions of Yen)2.0

0.0FY2011Actual

Sales of Investment Trust and Insurance Products

FY2015Plan

1.3

1.8+38%5.0


0.0FY2011Actual

Balance of Loans to Individuals

FY2015Plan

7.610.0

+31%

50.0

(Billions of Yen)100.0

0FY2011Actual

Asset Management and Administration Fees

FY2015Plan

85.2100.0

1.0


0FY2011Actual

Balance of Lending to Japanese Companies Overseas

FY2015Plan

0.9

2.02 +17% +122%

As this time, when clients asset management needs are

becoming increasingly complex, the Groups ability to propose

products tailored to the needs of individual clients delivers sig-

nificant results. Our consulting-based services that utilize our

broad product lineup and asset management expertise have

contributed to steady growth in the balances of both invest-

ment trust sales and insurance sales. In fiscal year 2015, we plan

to sell 1.8 trillion of investment trusts and insurance, earning

70.0 billion in sales fees.

We have increased the balance of housing loans by strengthen-

ing our sales channels and by taking advantage of our ability to

propose products and services tailored to specific client attributes.

The merger of the former Chuo Mitsui Trust and Banking

Company, Limited (with its client bases in the Tokyo Metropolitan

and Chubu Areas) and the former Sumitomo Trust and Banking

Co., Ltd. (with its client base in the Kansai Area) created a branch

network with greater convenience and access for clients. We will

use this enhanced branch network and our diverse sales channels,

which include SBI Sumishin Net Bank (a bank agency of Sumitomo

Mitsui Trust Bank, Limited), to raise the housing loan balance to

10 trillion, for a market share of 12% by fiscal year 2015.

17

Special Feature


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Strengthen Sales of Investment Trusts and Insurance

Expanding Market Share andRaising the Balance of Loans to Individuals

Aiming to Become a Top Class Asset Management Group Support for Japanese Companies

The Group holds the largest balance of assets under manage-

ment in Japan (63 trillion as of March 31, 2012). We will take

advantage of our asset management expertise, honed through

the management of this huge trove of assets to extend our reach

into foreign markets. We will also invest in and form partnerships

with asset management companies in Europe and acquire some

of their Asia-Pacific equivalents. Through such partnerships and

acquisitions, we will strengthen our overseas asset management

capabilities. Aiming to become a financial institution highly

regarded in terms of its asset management performance, we

have set the goal of earning asset management and administra-

tion fees totaling 100.0 billion in fiscal year 2015.

The Group is working to support Japanese companies oper-

ating overseas by meeting their demand for financing related

to the transfer of production offshore and advancement into

foreign markets. This support, provided mainly through four of

our branches in Europe, the United States and Asia, includes

loans and services based on our trust banking expertise, which

includes project finance and monetary claim securitization. We

aim to double the balance of loans to Japanese companies to

2 trillion by fiscal year 2015. We will also form partnerships and

collaborative relationships with foreign financial institutions in

order to enhance our ability to meet companies increasingly

diverse financing needs.

We help clients lead prosperous lives by providing consulting that meets their needs based on our lineup of services that take advantage of our expertise as a trust bankreal estate-related services, as well as will trust and estate settlement services.

Retail Business of Sumitomo Mitsui Trust Bank

Sumitomo Mitsui Trust Bank has a profes-sional staff of financial consultants who satisfy clients needs regarding the acquisi-tion, administration, management and inheri-tance of assets.

Our financial consultants use the expertise and broad range of solutions that are unique to a trust bank in order to make proposals regarding asset-related problems and client needs at various life stages.

All our financial consultants make self-improvement efforts so that they can propose a better solution to each of our clients by looking at their problems and needs from their standpoint. Feel free to contact our financial consultants.

Mineki NagasawaFinancial Consultant

Asset Administration Consulting

Have you completed all the arrangements for passing on your assets to your loved ones?

Have you taken measures to smooth the succession process and the payment of inheritance tax?

There are some arrangements that can be completed only if thought out ahead of time.

Consultations onWill Writing

InheritanceConsultations

Asset InheritanceConsulting

Social ContributionDonation Trusts

Total

Retail Business

18

Special Feature


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

The strength of Sumitomo Mitsui Trust Banks retail business lies in its ability to draw on a broad lineup of products and services to provide diverse consulting services.

To take advantage of this strength, all branch employees deal with clients conscientiously so that we can make proposals that are carefully tailored to their specific needs.

I also carefully listen to clients, respond to their various requests, and help them with their asset management by making appropriate proposals.

I will do my best to be a trusted resource for my clients and will try to make them smile and feel reassured.

Akiko Maruyama Ueno-Chuo Branch

Asset Management Consulting

I would like to increase my financial assets. How can I do that?

How much money do I have to set aside for my second life?

We provide consulting that answers such client questions.

Real EstateBrokerage

Consulting onEffective Land

Utilization

ApartmentLoans

Asset ManagementProducts

(Investment Trustsand Insurance)

Solutions

19

Special Feature


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Sumitomo Mitsui Trust Group is accelerating efforts to expand its global business operations. In asset management, we are taking advantage of the expertise that we have cultivated in Japan to develop our international business, and are strengthening our management capabilities by acquiring companies and forming partnerships with asset management companies in Asia, Europe and the Oceania region. We are also working to increase loans to Japanese companies operating overseas, thereby boosting our global presence.

Our Growing Global Business

Strengthening Asset Management Capabilities andExpanding Corporate Loans in Asian Markets

The Group is bolstering its presence in Asian markets. To strengthen capabilities for an improved performance in Asian stocks, Sumitomo Mitsui Trust Bank will expand its team for managing Asian stocks to 30 members, creating one of the largest such teams in Japan. Among our subsidiaries, Nikko Asset Management Co., Ltd. (Nikko AM), which is headquartered in Singapore, com-pleted in September 2011 its acquisition of DBS Asset Management Ltd. (currently Nikko AM Asia), which has subsidiaries and affiliates in Malaysia and Hong Kong, among other places. This has greatly expanded Nikko AMs asset management staff. In December 2011, Nikko AM also signed a contract to establish a joint venture company in India with a local partner. As a result of this partnership, Nikko AM will have business bases in both of Asias two huge growth markets, China and India, as the company already has a foothold in China.

In May 2011, Sumitomo Mitsui Trust Bank also formed a comprehensive business partnership with DBS Bank, the parent company of DBS Asset Management. By using the network of DBS Bank, one of Singapores largest banks, we will enhance our ability to provide solutions to Japanese companies operating overseas.

Global Business

20

Special Feature


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Expanding Our Profit Base in Europe

Operations in the Oceania Market

In March 2011, Nikko AM, a subsidiary of the Group, completed its acquisition of the Austra-lian and New Zealand subsidiaries of Tyndall Investment Management Limited. Tyndall has an established reputation for its capabilities for managing Australian and New Zealand bonds and stocks. With the acquisition of the Tyndall subsidiaries, Nikko AM now has branch offices in Japan, China and Australia, the three major asset management markets in the Asia-Pacific region. This has boosted our chance to further expand our business operations in the Asia-Pacific region.

In European markets, we aim to expand our profit base by forming partnerships with asset management companies that can build a complementary relationship with the Group, which has strengths in Asia. In July 2010, we formed a business partnership with Standard Life Investments Limited, a U.K. company which is strong in the U.K. market for pensions for individuals. In May 2012, we formed a business partnership with Man Group plc, a major U.K. company skilled at making diversi-fied investments in multiple hedge funds. Through these partnerships, we will continue to strengthen our management capabilities and expand our product provision capabilities. In December 2011, we acquired interests in NewSmith Capital Partners LLP, a U.K. company which caters to such clients as European pension funds and other institutional investors. As NewSmith Capital Partners has attractive products, we aim to expand our client base and strengthen our management capa-bilities through the mutual provision of financial products with the company.

21

Special Feature


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Ceremony to Celebrate the Establishment ofSumitomo Mitsui Trust Bank

On April 1, 2012, Sumitomo Mitsui Trust Bank, Limited was estab-

lished through the merger of The Chuo Mitsui Trust and Banking Com-

pany, Limited, Chuo Mitsui Asset Trust and Banking Company,

Limited, and The Sumitomo Trust and Banking Co., Ltd. On the same

day, a ceremony to celebrate the establishment of the new bank was

held at the new head office building, drawing wide media coverage by

newspapers and TV stations.

At this ceremony, Chairman Kitamura and President Tsunekage of

Sumitomo Mitsui Trust Bank cut the ribbon to mark the fresh start as

The Trust Bank, a leading trust bank that boasts the largest scale and

the highest status in Japan. In his speech, President Tsunekage said,

We aim to become the ultimate trust bankThe Trust Bank that

clients rely on as their indispensable partner. All of us at the new bank,

including executives and employees, are resolved to work as a team to

achieve this goal.

g p y ,

achieve this goal.

Topics


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Environmental Actions at the Head Office Building and Other Facilities

Opening of TOKYO SKYTREE, withSumitomo Mitsui Trust Bank as an Official Partner

Sumitomo Mitsui Trust Bank serves as an

official partner of TOKYO SKYTREE, which

opened to the public on May 22, 2012. We are

supporting the TOKYO SKYTREE project, which

aims to create a new future for Japan by demon-

strating the excellence of Japanese culture and

technology under the concept A harmonious

future starts here.

TOKYO-SKYTREE

(Image)

The new head office building, which was completed in

January 2012, was designed and constructed giving consid-

eration to environmental issues, as shown by the installa-

tion of large-scale solar panels on the roof. The addition of

greenery to the lower levels has been rated highly, and the

head office building was assigned Class S, the highest

rating under CASBEE (Comprehensive Assessment System

for Built Environment Efficiency). Meanwhile, environmen-

tal countermeasures are being implemented group-wide.

For example, in June, our branches distributed Japanese

fans featuring a picture of our new mascots

as part of a campaign to encourage elec-

tricity conservation.

23

Topics


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Our New PR Character:Mitsui Sumitomo Shintaku-san

Our new PR character, Mitsui Sumitomo Shintaku-

san, is played by actor Koichi Sato. The character is one

of Japans top-class asset administration professionals,

with a warm heart and a quick mind, an individual who is

ready to offer help whenever he sees someone requiring

assistance. Mitsui Sumitomo Shintaku-san pepped up

the welcome ceremony for our new employees (held at

the start of fiscal year 2012) by attending the event as

New Employee No. 313.

Our New Mascots:Shinjiru & Takuseru

Shinjiru & Takuseru are twin dogs that are good at

finding people afflicted with asset-related problems.

The dog with more black fur is Shinjiru, and the one

with more white fur is Takuseru. Even though they

cannot speak a human language, these two dogs are

wise and gentle, and can understand peoples feelings.

The mascot figures of Shinjiru & Takuseruare also on display in the booths at each branch office.

We have created a new public relations (PR) character and animal mascots to raise awareness

about the establishment of Sumitomo Mitsui Trust Bank, Limited (SMTB). The actor Koichi Sato

plays Mitsui Sumitomo Shintaku-san (Mr. Sumitomo Mitsui Trust), our new PR character. The new

mascots are twin dogs called Shinjiru & Takuseru (Trust & Entrust). With the catch copy Entrust

your assets to someone you trust Meet The Trust Bank, we will use the PR character and mascots

to promote Sumitomo Mitsui Trust Bank as a trust bank of the largest scale in Japan.

24

Topics


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

SMTB TV Commercials

New Trust Bank

Consulting Sumitomo Mitsui Trust Bank rolled out a new

trust bank TV commercial in April 2012 and a

consulting commercial in May. In the new trust

bank commercial, Mitsui Sumitomo Shintaku-san

tells viewers he can single-handedly solve their asset

issues. With the line we produce the best, most

comprehensive solutions, the consulting commer-

cial articulates for viewers the comprehensive

capabilities and significant expertise of Sumitomo

Mitsui Trust Bank. The polished tap dancing of the

nattily-attired Mitsui Sumitomo Shintaku-san, played

by well-known Japanese actor Koichi Sato, is an

eye-catching feature of these commercials.

25

Topics


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

With the Establishment of Sumitomo Mitsui Trust Bank,We are Working to Impress Individual Investors withOur Determination to Lead the Industry

Sumitomo Mitsui Trust Holdings, Inc. is enhancing its IR (investor

relations) activities targeted at individual investors.

In February 2012, we held an individual investor meeting in Osaka. As

the meeting was held just one month before the establishment of Sumi-

tomo Mitsui Trust Bank, more than 400 individual investors attended,

indicating the high expectations for Sumitomo Mitsui Trust Group.

At the meeting, Chairman Tsunekage explained about the Groups

distinctive features and management strategies. In a subsequent discus-

sion with Mr. Yoichi Itoh, an economic commentator, Chairman Tsunekage

emphasized that the Group, as the Japans largest and sole financial group

specialized in trust banking, is determined to create new added value that

contributes to society by providing high-quality products and services in

both banking and trust operations.

A video clip of the meeting is available at our website. Please see the

following URL. (Japanese only).

To Individual Investorshttp://www.smth.jp/investors/index.html

26

Topics


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Review of Operations:

The Review of Operations provides an overview of SumitomoMitsui Trust Groups main businesses, encompassing six businesscategories and centered primarily on the Sumitomo Mitsui TrustBank, Limited.

Business Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Retail Financial Services Business . . . . . . . . . . . . . . . . . . . . . 30

Wholesale Financial Services Business . . . . . . . . . . . . . . . . . 34

Stock Transfer Agency Services Business . . . . . . . . . . . . . . . 39

Real Estate Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Fiduciary Services Business . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Global Markets Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Other Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60


Business Outline (As of the end of March 2012)


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Balance of investment trust, annuity insurance and other salesApprox.

5 trillionLoan business/ Balance of loans to individualsApprox.

6 trillionTestamentary-related business/ Number of will trusts

20,802 cases

Retail FinancialServices Business

Deposits,Investment Trust andInsurance Sales,Loans to Individuals,Will Trust and Estate Settlement Services, etc.

We have an extensive product

lineup to meet a wide range of client

needs pertaining to asset manage-

ment, administration, and succes-

sion. While trying to be reliable

advisers for clients, we provide com-

prehensive and specialized services.

No. 1among

Japanesetrust banks

No. 5among Japanese

bank groups

No. 2among

Japanesetrust banks

Lending business/ Total loan balanceApprox.

21 trillionBalance of accounts receivable-backed securitiesApprox.

10 trillion

Wholesale FinancialServices Business

Corporate Finance, Financial Product Sales,International Business,Intermediation of Corporate M&As, etc.

We provide comprehensive solu-

tions integrating banking, trust bank-

ing, real estate and other functions

to meet the various needs of corpo-

rate clients in order to enhance their

corporate value, increase their asset

value, and facilitate growth.

No. 2among

Japanesetrust banks

No. 5among Japanese

bank groups

Stock transfer agency services/ Number of shareholders*Approx.

23.12 million shareholders

1

Stock Transfer AgencyServices Business

Legal Consulting Services for Stock-related Matters,IR/SR Support Services,Consulting Services for Shareholder Strategy Solutions,IPO Support Services, etc.

We take advantage of a wealth of

information of the industrys largest

client base and provide high value-

added, fine-tuned services, including

legal affairs consulting related to

shares practices, support for IR/SR

(informational services for investors

and shareholders), and support for

the preparation and implementation

of shareholder strategies.

* This figure includes the total number of shareholders as of the end of March 2012 at Japan Securities Agents, Ltd., which became our subsidiary in April 2012.

No. 1among

Japanesetrust banks

29

Review of Operations: Business Outline


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Real Estate Business

Real Estate Brokerage,Real Estate Consulting,Real Estate Securitization Arrangement,Real Estate Appraisals and Assessments, etc.

We offer a full line of services from

brokerage to securitization and

investment management services by

providing high-level professional

consulting to a wide range of clients

with real estate-related transaction

needs ranging from large compa-

nies and investors to individuals.

No. 1among

Japanesetrust banks

No. 1among

Japanesetrust banks

Real estate business-related revenue (Total of the whole group)Approx.

32.7 billionBalance of securitized real estateApprox.

10 trillion

Assets under managementApprox.

63 trillionBalance of corporate pension fundsApprox.

13 trillionLead manager for corporate pension funds

1,525 fundsAssets under custody*Approx.

181 trillionBalance of investment trustsApprox.

32 trillion

FiduciaryServices Business

Pension Plan Designing,Management of Subscribers and Beneficiaries,Asset Management, Asset Administration, etc.

As a financial group that boasts one

of the largest assets under manage-

ment and assets under custody in

Japan, we consistently provide vari-

ous cl ients with highest- level

services. Our services using signifi-

cant expertise and know-how have

earned high marks.

* This is the balance of Japan Trustee Services Bank, Ltd.

No. 1among Japanese

bank and securitiescompany groups

No. 1among

Japanesetrust banks

No. 1among

Japanesetrust banks

No. 1among

Japanesetrust banks

No. 1among Japanese

bank groups

Global Markets Business

Financial Operations,Investment Operations,Market-making Operations,Marketing Operations, etc.

We offer timely and accurate solu-

tions by utilizing market-based

financial products that reflect the

Groups market analysis capabilities,

responding to our clients invest-

ment and risk management needs

regarding such matters as interest

rates and foreign exchange.


Retail Financial Services Business


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

As The Trust Bank, the Retail Financial Service Business

provides comprehensive services to meet a wide range of

client needs pertaining to asset management, administra-

tion and succession through a nationwide network of

branches, with a focus on the Tokyo Metropolitan Area, as

well as the Kansai and Chubu areas, and also through SBI

Sumishin Net Bank, Ltd. and other group companies.

Sumitomo Mitsui Trust Group (the Group) conducts

business on the basic premise that it will strive to actively

offer new products and services tailored to meet client

needs. Although the issues related to asset management

and administration for individual clients are becoming

more complex amid the trend toward the aging and matur-

ing of Japanese society, and the advance of economic

globalization, the Group has prepared a product lineup

that can meet these increasingly diverse client needs.

Thanks to our staff, which possess significant expertise

and include financial consultants (an innovation that we

introduced ahead of other banks in 1977), we can provide

comprehensive solutions that are customized to meet the

needs of each individual client.

The main business operations for individual clients

include deposits, sales of investment trusts and annuity

insurance, the individual loan business, will trust and

estate settlement services, and the real estate business.

In the sales operations for investment trusts, annuity

insurance and other products, we have prepared a wide

range of productsfrom investment trusts and annuity

insurance products to discretionary investment manage-

ment productsas well as foreign currency deposits to

meet diverse and growing asset management needs

against the backdrop of mass retirement of baby-boomers

and the reform of the public pension systems. We also

provide high-quality consulting services.

Our loans to individuals include housing loans provided

through real estate company channels such as major

developers and house makers, and the convenient

Internet channel. They also include a selection of products

that reflect unique qualities as a trust bank, to meet user

requirements, taking into account the different life stages

of each generation.

Regarding will trust and estate settlement services, we

see a growing need for effective asset utilization, smooth

asset succession from one generation to the next, and

strategies for asset preservation in line with the declining

birthrate and the aging society. Our professional consult-

ants, possessing extensive knowledge and experience,

provide asset utilization know-how and comprehensive

solutions integrating the Groups various functions.

In all these operations, we try to be trustworthy consult-

ants for our clients, so that we may become their trusted

advisor, and provide comprehensive and professional

services tailored to meet their needs.

Nobuo IwasakiOfficer in charge of Retail Financial Services BusinessSumitomo Mitsui Trust Bank, Limited

We provide comprehensive solutions thatare customized to meet the needs of eachindividual client.

1. Business Outline

31

Review of Operations: Retail Financial Services Business


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Asset Management Support Package

TCA Global Capital Fund(for monthly settlement)

Full Heart W

Sumitomo Mitsui TrustFund Wrap

Deposits

We provide distinctive deposit instruments that include foreign currency

deposits and Good Select, which if held to maturity without cancellation can be

offered at a favorable interest rate. To support clients asset management efforts,

we also provide a plan combining investment trusts and foreign currency deposits

with special interest rate time deposits. For clients who have entered the retire-

ment phase, we offer a time deposit plan to support a second life after retirement.

Investment Trusts

Taking advantage of having two asset management companies in the Group

Sumitomo Mitsui Trust Asset Management Co., Ltd. and Nikko Asset Management

Co., Ltd.we provide useful products for clients asset building. In order to take

advantage of global economic growth driven by emerging nations and meet changes

in the investment environment, we offer products that feature a versatile lineup of

investment targets and styles.

Life Insurance Products

Clients can utilize the insurance mechanism to invest their precious assets. We

provide two insurance products: 1) annuity insurance, which has attracted atten-

tion as a new asset management instrument for covering the shortfall in public

pension benefits, etc., and preparing for a comfortable second life; and 2) single-

premium whole life insurance, which allows clients to securely transfer their pre-

cious assets to their families.

Discretionary Investment Management Products

Discretionary investment management products represent services in which we

make investment decisions and undertake transactions on behalf of clients by taking

advantage of the sophisticated asset management skills and know-how we have devel-

oped as experts in the provision of asset management services for corporate pension

funds and other assets. We offer three discretionary investment management prod-

ucts: the Sumitomo Mitsui Trust Fund Wrap and Sumitomo Mitsui Trust Private

Wrap for proposing efficient investment plans that meet each clients risk tolerance,

and the Sumitomo Mitsui Trust SMA for building custom-tailored portfolios.

Loans

We offer various types of interest rates and repayment methods for housing

loans, and provide loans that meet various lifestyles and needs, including hous-

ing loans tailored for women, with preferential interest rates available after child-

birth. Non-housing loans include a Reverse Mortgage, which is a loan that

uses the house as collateral when borrowing funds for a more comfortable

lifestyle, a Housing Card Loan home equity loan, and an Apartment Loan for

the construction or renovation of apartments.

2. Product and Service Outline

32



Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Asset Inheritance

Professional consultants provide services to secure asset inheritance to

the next generation. In addition to will trust services, in which we provide

consultations on will writing through storage and execution, we provide

inheritance coordination services, pertinent advice on asset succession,

estate planning advice on how to put the inherited assets in order, and

consulting for specific asset succession planning and business inheritance

trusts to promptly implement asset succession without following conven-

tional inheritance procedures, responding to a wide range of client needs.

Asset Administration

We provide the Anshin Support Trust (a life insurance trust) to clients

and their family members who want their assets to be preserved and adminis-

tered over the medium to long term. The Anshin Support Trust has two types:

1) a money trust for clients who have nobody to preserve or administer

their assets for such reasons as the absence of children; and 2) a life insur-

ance trust combining life insurance and trust functions. We also offer such

products as a trust that supports the guardianship system, trusts with a social

contribution donation, stock sale/acquisition trusts, and charitable trusts.

Private Banking

Professional staff members take maximum advantage of our rich knowl-

edge and experience as a Trust Bank to make proposals that meet a variety

of client needs. We offer a wide range of products, including custom-tailored

and well-designed asset-management products, as well as business inheri-

tance trusts and other asset administration products for asset preservation

and succession. We also provide consulting services through Sumitomo

Mitsui Trust Wealth Partners Co., Ltd. Our entire Group attempts to upgrade

our capabilities for asset management and administration support.

Consulting

Professional financial consultants with extensive knowledge provide con-

sultations not only on deposits, but also on comprehensive asset manage-

ment and administration (including on issues pertaining to inheritance and

real estate), at privacy-protected individual booths. These consulting servic-

es, undertaken for business proprietors, are provided by professional con-

sultants who can comprehensively address matters relating to business

administration, financing and personal assets. Business proprietors can trust

and count on these professional consultants to implement specific meas-

ures for smooth business succession and conduct regular follow-up checks.

We also provide fine-tuned consulting at the counter in our branch offices.

Estate Planning Will Trusts

Anshin Support Trust

Consulting by a financial consultant

Consulting by an over-the-counterstaff member

33



FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

3. Group Companies

Sumitomo Mitsui Trust

Wealth Partners Co., Ltd.

Sumitomo Mitsui Trust Wealth Partners provides high-level professional

consulting services to clients with inheritance and business succession

needs. In addition to the professional consultants at Sumitomo Mitsui Trust

Bank, Limited (SMTB), the company offers custom-tailored consulting

services that meet the requests of each client through collaboration with

tax accountants and lawyers.

Sumitomo Mitsui Trust Card Co., Ltd. In April 2012, Sumishin Card Co., Ltd. and Chuo Mitsui Card Co., Ltd.

merged into Sumitomo Mitsui Trust Card. The company issues the

Sumitomo Mitsui Trust VISA Point Club Gold Card, an affiliated credit

card for earning points through transactions with SMTB, and the

Sumitomo Mitsui Trust VISA Platinum Card, the highest-grade VISA card,

providing higher-value-added credit services.

Sumitomo Mitsui Trust

Guarantee Co., Ltd.

Sumitomo Mitsui Trust Guarantee was founded in 1978 to guarantee loans

to individuals. It provides guarantees for clients using housing and card

loans offered by SMTB. The balance of its loan guarantees has been

increasing in tandem with an expansion in housing loan operations. Upon

the inauguration of SMTB in April 2012, Sumitomo Mitsui Trust Guarantee

made Sumishin Guaranty Co., Ltd. its subsidiary.

SBI Sumishin Net Bank, Ltd. SBI Sumishin Net Bank, a bank that specializes in Internet banking busi-

ness, was founded in 2007. Instead of limiting operations to settlement and

asset management services, the bank has been trying to realize a full-

banking service, Internet-only bank by providing more easy-to-use and

attractive products and services than those offered by other banks, 24

hours a day, 365 days a year. Armed with all the conventional banking

functions (deposits, asset management, loans and settlement), the bank

offers a wide range of services that include cash accounts available 24

hours a day, foreign currency deposits allowing for real-time transactions,

joint services with the accounts of SBI Securities Co., Ltd., and non-face-to-

face transactions for housing and card loan services. SBI Sumishin Net

Bank achieved profitability in its third year of operation. In the year ended

March 2012, the bank had attained steady growth, with outstanding

deposits totaling approximately 2.3 trillion and 1 trillion in housing loans

(accumulated total), while its capital adequacy ratio is 8.0% or higher, indi-

cating a sound financial position. The FY 2011 Japanese Customer

Satisfaction Index (JCSI) survey said SBI Sumishin Net Bank scored the

highest JCSI rating in the banking industry for the third straight year. It has

also received high ratings in many other client satisfaction surveys. The

total number of accounts at the bank has reached approx. 1.4 million.


Wholesale Financial Services Business


Fina

ncia

lHig

hlig

hts

Spec

ialF

eatu

reR

evie

wo

fOp

erat

ions

Man

agem

ent

Stru

ctur

eC

orp

ora

teD

ata

Top

Mes

sag

eTo

pIn

terv

iew

Rikiya HattoriOfficer in charge of Wholesale Financial Services BusinessSumitomo Mitsui Trust Bank, Limited

We provide comprehensive solutions thatonly a trust bank group can offer.

In our Wholesale Financial Services Business, we pro-

vide comprehensive solutions that only a trust bank group

can offer by integrating banking, trust, real estate and

other functions to meet corporate clients diverse needs,

with the focus on raising enterprise value, asset value, and

achieving growth.

Sumitomo Mitsui Trust Group (the Group) covers

a wide range of clients, from large to small and mid-sized

corporations to financial institutions, non-profit organiza-

tions, and overseas financial markets. Our staff, which pos-

sesses significant expertise, draws on a wealth of

experience and expertise cultivated over many years to

meet the needs of our various clients.

In our corporate credit-related operations, we offer vari-

ous methods of financing, utilizing both banking and trust

functions. We offer higher-value-added products and servic-

es that accurately meet our clients financing needs, and

combine investment trust and real estate business functions,

employing various financing techniques that include syndi-

cated loans, project finance, buyout finance, real estate non-

recourse loans, and asset securitization arrangement.

Regarding financial product sales operations, a dedicat-

ed team in the Wholesale Financial Services Business

works in collaboration with the Global Markets Business,

the Fiduciary Services Business and the Real Estate

Business, utilizing the trust function and other features

that only a trust banking financial group can possess,

develops and provides asset management products and

services that match clients businesses, corporate charac-

teristics and needs.

In our international operations, there is a growing

demand for financing among Japanese companies that

are pursuing international expansion and relocating their

production bases to overseas locations. Accordingly, the

Group provides financial support for clients overseas

expansion, leveraging its overseas network to accurately

respond to clients capital needs in the foreign countries

where they are operating. We are simultaneously enhanc-

ing and increasing the provision of loans to non-Japanese

companies, mainly in Asia.

In addition, as a strategic partner to our clients, we are

stepping up consulting services by providing M&A broker-

age services, business succession support, and a Japanese

version of the employee stock ownership plan (ESOP).

1. Business Outline

35

Review of Operations: Wholesale Financial Services Business


FinancialHig

hlights

SpecialFeature

Review

ofO

peratio

nsM

anagem

entStructure

Co

rpo

rateD

ataTo

pM

essage

Top

Interview

Syndicated Loans

A syndicated loan is a fundraising scheme in which an arranger (a lead

financial institution) forms a syndicate of lenders to provide loans on the

same terms and conditions under a single contract to satisfy the funding

needs of clients. The Group uses syndicated loans not only for convention-

al corporate loans but also for real estate non-recourse loans, ship finance,

buyout finance, and other structured finance products.

Real Estate Non-Recourse Loans

A real estate non-recourse loan is a form of financing for purchasing real

estate in which real estate securitization*1 is carried out and the assets are

transferred to an SPC*2. The loan itself is repaid exclusively from the cash

flow originating from the real estate or the proceeds on its sale. The

Wholesale Financial Services Business cooperates with the Real Estate

Business, actively working to advance good quality real estate securitiza-

tion projects.

*1 A type of asset securitization. The security is issued backed by the revenue obtained from realestate, such as rent income, as underlying assets.

*2 SPC: Special Purpose Company

Project Finance

Project finance, which employs the cash flow generated from specific

project

Documents

ANNUAL REPORT - smth.jpsmth.jp/en/ir/annual/2011/all.pdf · Contents 2 Sumitomo Mitsui Trust Holdings, Inc. 2012 Annual Report Financial Highlights Special Feature Review of Operations