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Frequently Asked QuestionsJAPANESE

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

Company Information

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").
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 appointed two external directors in June, 2013 to strengthen its monitoring over the management. 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)Monitoring administration of business activities
  • (3)Allocation of management resources
  • (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 on April 1, 2011. On April 1, 2012, SMTB 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."

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 a 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."

SMTH Management Philosophy & Strategy

  • 1. Concepts of Management Integration

  • 2. Midterm Management Plan

  • 3. Growth Strategy, Business Strategy

  • 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 FY2013" (May 21, 2014), page 15 - 30.

    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 May 21, 2014.

    A.04. SMTH group has launched a new Midterm Management Plan on May 21, 2014 in order to accelerate its sustainable growth at the year of the completion of SMTB’s banking IT system which is the final piece of the management integration. As to the midterm revenue and financial targets, SMTH targets the consolidated net business profit of approx. 355.0 billion yen and consolidated net income of approx. 180.0 billion yen, and also targets the consolidated ROE, return on shareholders’ equity, of mid 8% to 9% (approx. 10% as the long-term target) and non-consolidated overhead ratio of approx. mid 40% to 50% in FY2016 which is the final fiscal year of the "Midterm Management Plan."
    SMTH will enhance its unique business model as a dedicated trust bank group and maximize its revenue through the expansion of income from banking businesses including the overseas credit as well as fee related businesses mainly from Retail financial services business and Real estate business.
    For details, please refer to "Announcement of Midterm Management Plan" (May 21, 2014).

    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.) 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 proceed to build a more balanced credit portfolio focused on expanding loans to individuals and credits to Japanese corporations operating overseas and non-Japanese entities.
    For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 16 - 30.

    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 Nikko Asset Management Asia (former DBS Asset Management), NewSmith LLP and so on. In addition to the existing stable "global custody business", we promote the "fund administration business" by enhancing the services of Irish subsidiary acquired in November 2012 to provide the comprehensive global asset administration 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.
    In August 2013, we opened a branch in Hong Kong, which is one of the key financial markets in Asia. In May 2014, SMTB obtained approval to establish a bank subsidiary in Thailand, which is one of the largest manufacturing locations of Japanese companies in South-East Asia and which importance as the center of Greater Mekong Subregion is increasing year by year. We will be responding efficiently to the needs of its clients, including Japanese corporations operating overseas together with each subsidiary of SMTB.

Results and Finances

1. Financial Results for FY2013

Q.01. Please give an overview of financial results for FY2013.

A.01. As for the consolidated financial results for FY2013, "Net business profit before credit costs" increased by 1.2 billion yen from FY2012 to 285.8 billion yen. This was driven by two factors. First, the increase in “Net fees and commissions and related profit” through the expansion of sales of investment trust and insurance and the increase in real estate brokerage fees. Second, the improvement in the contribution from group companies. “Net other operating profit” decreased ,mainly in “Net gains on bonds”, on the other hand.
"Total credit costs" stood at the reversal of 9.1 billion yen due to the posting of the reversal of allowance for loan losses. "Net losses on stocks" stood at 3.7 billion yen mainly due to the devaluation losses of stocks.
As a result, "Ordinary profit" increased by 2.9 billion yen from FY2012 to 258.0 billion yen, and "Net income" increased by 3.9 billion yen from FY2012 to 137.6 billion yen.
For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 5.

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

A.02. Please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 17-30.

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 March 2014 decreased by 71.1 billion yen from the end of previous fiscal year to 234.8 billion yen. The NPL ratio continued to remain at low level of 1.0%.
For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 32.
(*) Problem assets based on the Financial Reconstruction Act.

Q.04. Describe the situation of your capital.

A.04. <Consolidated (SMTH) (Basel III, international standard)>
From the end of March 2013, the new Basel III regulation has been introduced in a phased manner. 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 2014 stood at 9.32%, 10.83% and 14.78%, respectively, all of which exceeded the minimum requirement of 4.00%, 5.50% and 8.00%.
For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 36 - 37.
 Please refer to "Financial status" for the capital ratio in the past.

2. Financial forecast for FY2014

Q.05. What is your financial forecast for FY2014?

A.05. As for the forecast for FY2014, "Net business profit before credit costs" is forecasted to be 295.0 billion yen (consolidated) and 225.0 billion yen (non-consolidated) assuming the increase in fees from sales of investment trust and insurance, and real estate brokerage. "Net income" is forecasted to be 150.0 billion yen (consolidated) and 125.0 billion yen (non-consolidated), which exceed the results of previous fiscal year by 12.3 billion yen and 8.9 billion yen, respectively, taking into account the posting of banking IT system integration cost on SMTB.
For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 14.

Q.06. What is your dividend forecast for FY2014?

A.06. As for the annual dividend forecast for FY2014, dividend per share on common share is forecasted to increase by 1.00 yen from previous fiscal year to 11.00 yen based on the forecasted consolidated net income of 150.0 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 5.50 yen per share, which is equal to one-half of the annual dividend forecast.

3. Rating information

Q.07. Describe the rating for each company of Sumitomo Mitsui 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. SMTH targets the “Common Equity Tier 1 ratio (Fully-loaded basis) of approx. 10%” as the initial target and "ROE of mid 8% to 9% in our Midterm Management Plan. As for ROE, SMTH also set the long-term target of approx. 10%.
For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 43 and 51.

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 capital adequacy regulations (Basel III).

A.03. We think it will be possible to sufficiently achieve the levels required under Basel III, by the accumulation of earnings through steady effort to achieve Midterm Management Plan and the efficient risk weighted asset control and etc..
For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 36 - 38 and 51.

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

A.04. As for the cross shareholdings, we set the three-year reduction policy in FY2011, and we sold approx. 170.0 billion yen of stocks. In the new Midterm Management Plan, we set the reduction target of approx. 50.0 to 100.0 billion yen in 3 years period, and will reduce them continuously.
For details, please refer to Presentation Material "IR Material for FY2013" (May 21, 2014), page 33 and 51.

Q.05. Describe your basic 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%.

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. 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 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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