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Frequently Asked QuestionsJAPANESE

Questions frequently asked by clients concerning various procedures and IR information is summarized in Q&A format.

Company Information

  • 1. Company Information

  • 2. Business Description

    • Q.06. How is a trust bank different from an ordinary commercial bank?
    • Q.07. Please describe your businesses in a little more detail.
    • 1. Company Information

      Q.01. Please give an outline of the Sumitomo Mitsui Trust Group (“SuMi TRUST Group”).

      A.01. Sumitomo Mitsui Trust Holdings, Inc. (“SuMi TRUST Holdings”) 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"). SuMi TRUST 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 ("SuMi TRUST Bank").
      For more details, please refer to "Corporate Profile", "Outline of Business", and "Group Companies."

      Q.02. Describe your history.

      A.02. SuMi TRUST Group was established on April 1, 2011 through management integration of CMTH Group and STB Group. On April 1, 2012, SuMi TRUST Bank was established through a merger among The Chuo Mitsui Trust and Banking Company, Limited, Chuo Mitsui Asset Trust and Banking Company, Limited and The Sumitomo Trust and Banking Co., Ltd.
      For more details, please refer to "The Group's History."

      Q.03. Describe the corporate governance system.

      A.03. In June 2017, the SuMi TRUST Group changed to become a “company with Three Committees, in order to enhance the transparency and soundness of its management further and accelerate its decision-making to ensure flexible adaptation to changes in business environment.
      Regarding the composition of the members of the Board of Directors, 7 out of 15 are elected as external directors and the chairman of the Board is also appointed from external directors. As for three statutory committees set under the Board of Directors, Nominating committee, Compensation committee and Audit committee, majority of each committee are external directors and the chairmans are elected from them.
      In addition, in order to ensure the effectiveness of its corporate governance system and further enhance the soundness and reliability of the business model and the transparency of its management of SuMi TRUST Group, SuMi TRUST Holdings shall establish a Risk Committee and a Conflicts of Interest Committee, in which independent external directors shall participate, as advisory bodies to the Board of Directors, in addition to the Nominating Committee, the Compensation Committee and the Audit Committee, which are required to be established under the Companies Act.
      For more details, please refer to "Corporate Governance."

      Q.04. Describe the officers and management structure.

      A.04. Regarding our officers, please refer to "Board of Directors and Executive Officers."

      Q.05. Describe the holding company aspects of SuMi TRUST Holdings.

      A.05. SuMi TRUST Holdings is a financial holding company with subsidiaries centered on SuMi TRUST Bank. Each subsidiary has a management system that is able to complete its own business independently. SuMi TRUST Holdings 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)Monitoring administration of business activities
      • (3)Allocation of management resources
      • (4)Supervising risk management
      • (5)Supervising compliance management
      • (6)Managing internal auditing

      2. Business Description

      Q.06. How is a trust bank different from an ordinary commercial bank?

      A.06. 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.07. Please describe your businesses in a little more detail.

      A.07. SuMi TRUST group provides a wide range of products and services to our clients, mainly by SuMi TRUST Bank, fusing following 7 business functions.
      (1) Retail total solution services: Investment management consulting, Support for asset formation through installments, Loans such as mortgage loans, Deposits, Testamentary trust/ business succession, etc.
      (2) Wholesale total solution services: Loans and arrangement of various financing scheme, Corporate consultations and M&A advisory services, etc.
      (3) Wholesale asset management: Comprehensive services from asset management proposals to product development, risk management and monitoring, etc.
      (4) Stock transfer agency services: Stock administration services, IPO consulting and IR / SR consulting, etc.
      (5) Real estate: Real estate brokerage, Securitization, Fund management, etc.
      (6) Fiduciary services: Pension trust, Asset management and administration, Overseas asset management, etc.
      (7) Global markets: Securities investment, Derivatives, etc.
      For details regarding each business and the scale of its operations, please refer to "Outline of Business."

      3. Sustainability

      Q.08. Describe the Sustainability initiatives in SuMi TRUST Group.

      A.08. Regarding our Sustainability initiatives, please refer to "Sustainability."

Results and Finances

1. Financial Results for FY2017

Q.01. Please give an overview of financial results for FY2017.

A.01. As for the consolidated financial results for FY2017, "Net business profit before credit costs" increased by 38.1 billion yen from FY2016 to 270.5 billion yen, primarily due to a non-recurrence of last year's fall in market-related profit in SuMi TRUST Bank.
"Ordinary profit" increased by 36.2 billion yen from FY2016 to 232.6 billion yen. The increase primarily reflects a decrease in "Total credit costs" from reversal of loan-loss reserves due to decrease in balance of problem loans from repayment by certain borrowers, partilly offset by decrease in "Net gains on stocks".
As a result, "Net income attributable to owners of the parent" increased by 32.5 billion yen from FY2016 to 153.9 billion yen.
For details, please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 35.

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

A.02. Please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 46-49.

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

A.03. The total balance of Non-performing loans (“NPL”) (*) of SuMi TRUST Bank (non-consolidated basis) as of the end of March 2018 decreased by 14.5 billion yen from the end of March 2017 to 56.7 billion yen. The NPL ratio stayed at the same level as the end of March 2017 of 0.2%.
For details, please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 43.
(*) Problem assets based on the Financial Reconstruction Act.

Q.04. Describe the situation of your capital.

A.04. <Consolidated (SuMi TRUST Holdings) (Basel III, international standard)>
Based on the Basel III regulation, "Common equity Tier 1 capital ratio", "Tier 1 capital ratio" and "Total capital ratio" as of the end of March 2018 stood at 11.33%, 13.74% and 16.31%, respectively, all of which exceeded the minimum requirement of 6.75%, 8.25% and 10.25%.
For details, please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 45.
 Please refer to "Financial status" for the capital ratio in the past.

2. Financial forecast for FY2018

Q.05. What is your financial forecast for FY2018?

A.05. As for the forecast for FY2018, "Net business profit before credit costs" is forecasted to be 280.0 billion yen assuming the steady increase in each business segment. "Net income attributable to owners of the parent" is forecasted to be 165.0 billion yen, which exceed the results of previous fiscal year by 11.0 billion yen, taking into account posting credit costs and net gains on stocks through reduction of strategic shareholdings.
For details, please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 51-52.

Q.06. What is your dividend forecast for FY2018?

A.06. As for the annual dividend forecast for FY2018, dividend per share on common share is forecasted to remain at the same amount of 130 yen as previous fiscal year based on the forecasted consolidated net income of 165.0 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 65 yen per share, which is equal to one-half of the annual dividend forecast.
In addition, SuMi TRUST Holdings has conducted share repurchase of approx. 9.0 billion yen, which is equivalent to 5.5% of 165.0 billion yen, forecasted consolidated net income of FY2018, between May and June 2018, based on the policy to gradually raise the total payout ratio to around 40% to enhance shareholder returns.
For details, please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 31.

3. Rating information

Q.07. Describe the rating for each company of SuMi TRUST Group.

A.07. Regarding our rating, please refer to "Rating Information."

Financial & Capital Policy

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

A.01. SuMi TRUST Holdings set the targets as KPIs for “Common Equity Tier 1 ratio (Fully-loaded basis)" of maintaining approx. 10% stably and for "Shareholder ROE" of aiming for 8% or more in our Midterm Management Plan. As for Shareholder ROE, SuMi TRUST Holdings also set the long-term target of approx. 10%.
For details, please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 3.

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

A.02. We are under international standards.

Q.03. Describe your thinking on reduction of cross shareholdings.

A.03. Since the management integration in April 2011, SuMi TRUST Holdings had reduced approx. 210.0 of strategic shareholdings in 5 years. On May 2016, we set the new reduction plan that we reduce ratio of strategic shareholdings to Common Equity Tier 1 ratio (excluding valuation differences on AFS securities) by 50% in approx. 5 years, commencing from FY2016, and we have been reducing strategic shareholdings continuously by 32.2 billion yen in FY2016 and 35.2 billion yen in FY2017.
For details, please refer to Presentation Material "IR Material for FY2017" (May 22, 2018), page 32.

Q.04. Describe your basic policy on returns for shareholders, such as dividend policy, etc.

A.04. As a means of returning shareholders’ profits commensurate with earnings, we will maintain a dividend payout ratio of around 30% with respect to ordinary shares, while considering share repurchases based on the balance between profit growth opportunities and improvement in capital efficiency. In the medium term, we shall aim to gradually raise the total payout ratio to around 40% to enhance shareholder returns.

Stock Related

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 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.  100 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. SuMi TRUST Holdings 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 is not decided yet. We have held the Ordinary General Meeting in Tokyo in late June every year since the management integration in April 2011.

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