Post on 24-Aug-2020
Chuo Mitsui Trust GroupManagement Strategies
September 17, 2008
Chuo Mitsui Trust Holdings, Inc.
The 10th Japanese Financial Service Conference
1
Table of Contents
I. Overview of Our Group and Management Direction 2
III. Business Model with High Profitability 9
II. Sound Asset Quality 5
IV. Differentiation Based on Strengths and Unique Capabilities 14
V. Overview of Our Capital 24
VI. Appendix 26
2
I. Overview of Our Group and Management Direction
3
+22 Consulplazas
Trust bankTrust bank Asset managementAsset management
Group Overview
Note: Figures are as of end of March 2008 *Combined total of investment trust and investment advisory assets **Commitment amount
Deposits
Sales of Investment trust andAnnuity insurance
Housing loans, etc.
Individual clients
Lending business
Real estate business
Stock transfer agency business,etc.
Corporate clients
¥13.6trn
¥7.4trn
67 branches
6,173
Pension trust
Securities trust
Institutional investor clients
¥0.1trn
¥40.7trn
617
Total assetsTotal assets
Total trust assetsTotal trust assets
Number of employeesNumber of employees
Investment advisory andinvestment trust management
Individual clients andInstitutional investor clients
¥2.2trn
76
Asset undermanagement*Asset undermanagement*
Number of employeesNumber of employees
Total assetsTotal assets
Total trust assetsTotal trust assets
Branch networkBranch network
Number of employeesNumber of employees
Private equity fundmanagement
Corporate clients andInstitutional investor clients
¥273.9bn
37
Funds undermanagement**Funds undermanagement**
Number of employeesNumber of employees
Chuo Mitsui Asset Trust & BankingChuo Mitsui Asset Trust & BankingChuo Mitsui Asset Trust & Banking Chuo Mitsui Asset ManagementChuo Mitsui Asset ManagementChuo Mitsui Asset ManagementChuo Mitsui Trust & BankingChuo Mitsui Trust & BankingChuo Mitsui Trust & Banking Chuo Mitsui CapitalChuo Mitsui CapitalChuo Mitsui Capital
4
Management DirectionWe aim to increase gross operating profit through continued recomposition of our revenuestructure
Strengtheningof the
Balance Sheet
Enhancement
of
Profitability
Continuous Focus on the Maintenance and Improvement ofthe Balance Sheet
Increaseof Gross
OperatingProfit
Recompositionof RevenueStructure
Concentration onHigh Margin &High GrowthAreas within
StrategicBusinesses
5
Table of Contents
II. Sound Asset Quality
6
Portfolio with Market Value
As of Jun-081Q
FY3/09 FY3/08
(JPY in billions)Acquisition
CostUnrealizedGain (Loss)
RealizedLoss
RealizedLoss
Sub-prime Loans and Investments None
OthersCDOs 10.0 - (0.0) (5.0)Investment Trusts(Bond Funds) 4.8 (0.3) - (0.2)Investment Trusts(Credit Funds) 24.9 (1.7) - - Investment Trusts(Equity Funds, etc.) 11.0 (1.0) - - Foreign Bonds, etc. 280.6 (5.6) - -
Total 331.4 (8.7) (0.0) (5.2)
Foreign Government Bonds 106.6 (4.6)US Agency Mortgage-Backed Securities 771.8 (19.6)Total 878.4 (24.3)
Portfolio without Market Value
As of Jun-08(JPY in billions)
Sub-prime Loans and Investments None
OthersCorporate Loans 106.7Unlisted Stocks 9.4Acceptances and Guarantees (Corporate) 4.0
Total 120.2
Sub-prime Related AssetsWe have no exposure to ABS and CDOs backed by sub-prime related loans
Overseas Investment / Loan Portfolio (Jun-08)
No exposure to sub-primemortgage loans or “Alt-A”loans
Limited exposure tosecuritized assets, etc.
Small impact fromunrealized losses
1. Credit derivative portion of this CDO is bifurcated, ¥5.0bn posted as derivative cost last fiscal year, ¥0.0bn is posted as derivative cost in 1Q.FY3/09. There is no related change inacquisition cost and since all unrealized loss has been recognized, there is no unrealized loss as of Jun-08.
2. Includes leveraged finance loans of JPY 2.9 billion extended to the electricity and gas sector. There is no undrawn overseas leveraged finance commitments as of Jun-08.
1
2
1 1 1
7
37%
9%
31%
2%
19%
2%
0%
20%
40%
60%
80%
100%
当社
5%
3%
国内銀行
30%
14%
22%
15%
24%
0%
10%
20%
30%
当社 A社 B社 C社 D社
37%
9%
8%
43%
2%1%
0%
20%
40%
60%
80%
100%
Loan Portfolio
1. Managerial accounting-basis, CMTB non-consolidated. Balance at year end, post-securitization
2. Loan providers that apply interest rates in excess of the upper limit set by theInterest Rate Restriction Law (“Grey Zone” Interest Rates)
3. Does not include bond-types4. Pay-out rate on guarantees by Chuo Mitsui Guarantee (FY3/08)
High quality loan portfolio leads to limited downside risk
Loans to IndividualsLoss rate4 on housing loans,which are the main type ofloans to individuals: 0.06%
Real Estate Asset Finance3
No credit losses to dateLTV of 70% and below : 95.3%DSCR of 2.0 and above : 79.9%
Real estate companiesLarge companies and theirgroup companies:63%20 largest borrowers: 65%Internal rating above C+(External rating: around BBB- ):71%
Consumer finance2
We have curtailed our exposureto consumer financecompanies, including salesfinance companies and creditcard companies.
Loans by Industry1 (Jun-08) Loans by Size of Borrowers( Jun-08 )
1 2
Mid-sized companies4Large companies3
SMEs5 Others7Loans to individuals
Ratio of Housing Loans to TotalLoans1 (Comparison of MajorBanking Groups) (Mar-08)
Companies excluding Construction, Consumer finance2, Real estate relatedConstruction Real estate companiesConsumer finance2
Real estate asset finance3 Loans to individuals
17%
Real Estate Asset Finance 6Securities / Brokerages
SMEs5
CMTH1 Domesticbanks total2
1. Managerial accounting-basis, CMTB non-consolidated. Balance at year end, post-securitization
2. Source: Bank of Japan3. Large companies: capital of JPY 1bn or more and with more than 300 employees4. Mid-sized companies: companies that are not large companies or SMEs5. SMEs: capital of JPY 300 mn or less or less than 300 employees6. Does not include bond-types7. Local governments + Overseas yen loans, Domestic loans transferred overseas
Source: Company disclosures1. As of Mar-08, non-consolidated, post-securitization
CMTH A B C D
4%Securities /Brokerages
Real EstateAsset
Finance
20%
44%
28%
8
Non-Performing LoansWe have reduced our NPL ratio through stringent management of our loan portfolio
Balance of NPLs and NPL Ratio¹
1. Based on claims disclosed under the Financial Revitalization Law, banking account + trust account, CMTB non-consolidated
283.1165.2
89.1 61.5 76.0 84.8
184.9
94.9
71.8 82.8 79.5 75.2
260.1
468.0
160.9 144.3 155.6 160.01.8%1.7%1.7%
2.8%
1.8%
4.9%
0
200
400
600
Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Jun-080%
1%
2%
3%
4%
5%
Claims under Close ObservationClaims under High Risk & Claims under Bankruptcy and Virtual BankruptcyNPL Ratio
<Reason for Increase from Mar-08> NPL balance increased due to stringent assessment of loans to certain sector
(JPY in billions)
9
III. Business Model with High Profitability
10
3% 3% 2%
5% 6% 5% 5%
9% 9% 10% 10%
3%14% 12%
14%16%
17%
9%
9%4%
11%
12%
13%
15%
5%
11%2%
2% 2%
4%
4%
4%
2%
FY3/03 FY3/06 FY3/07 FY3/08
40%
14%9%
13%
23%18% 15% 16%
Recomposition of Revenue StructureBy focusing on our higher margin & higher growth businesses, we aim to expand our grossoperating profit
Strategic Businesses
Conventional BankingBusinesses
Recomposition of Revenue Structure
● Investment Trust &Annuity Insurance
● Real Estate FeeBusinesses
● Pension Trust
● Stock Transfer Agency
● Other Asset ManagementBusinesses16% 37% 43% 44%
Breakdown of Gross Operating Profit by Business Activity (CMTB+CMAB non-consolidated)
● Loans to Individuals
● Real Estate Asset Finance
● Alternative Investments
● Other Banking RelatedBusinesses
37%
71%
● Corporate Loans● Bond Investment, etc.
68%
Our Strategic Focus Areas(Loans to Individuals, Investment Trust & Annuity Insurance, Real Estate Fee Businesses)
76%
Our Strategic Focus Areas
1. CMTB+CMAB non-consolidated2. Excluding one-off effect from securitization gains and
amortization cost for the following years
Gross Operating Profit (excl. Securitization)1,2
298.1
283.3
275.3
286.7
274.0
265.2
275.1
267.4
0
220
240
260
280
300
FY3/05 FY3/06 FY3/07 FY3/08Gross Operating Profit
Gross Operating Profit (excl. Securitization and Amortization)
~~
(JPY in billions)
11
High Proportion of Fee IncomeHighest proportion of fee income among our Japanese bank peers resulting from our focuson asset management businesses
1. CMTB+CMAB non-consolidated
Asset Management Related Revenues1 Fee Income / Total Gross Operating Profits1
(Comparison of Major Banking Groups)
Source: Company disclosures1. FY3/08, non-consolidated2. Sum of net fees and commissions income and trust fees excluding loan trust and
JOMTs divided by gross operating profit before trust account credit costs3. Sum of net interest income, loan trust fees, JOMTs fees, net trading income, and
net other operating income divided by gross operating profit before trust accountcredit costs
48%38%
26% 24% 23%
52%62%
74% 76% 77%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CMTH SumitomoTrust
MUFG Mizuho SMFG
Fee Income / Gross Operating Profit² .Other Income / Gross Operating Profit³
13.3 13.7 16.4 10.6
15.7 16.7 14.513.6
24.0 24.5 26.026.6
25.330.3
38.731.7
30.0
40.5
43.0
45.2108.5
125.9
138.9
128.0
0
20
40
60
80
100
120
140
FY3/05 FY3/06 FY3/07 FY3/08
(JPY in billions)
OthersStock Transfer
Pension TrustReal EstateInvestment Trust / Annuity Insurance
A B C D
12
41.7% 43.1%
56.0%
49.9%
44.7%
0%
10%
20%
30%
40%
50%
60%
CMTH SumitomoTrust
MUFG Mizuho SMFG
EfficiencyOne of the highest efficiency ratio among our Japanese bank peers
Operating Expenses and OHR1,2 OHR1,2 (Comparison of Major Banking Groups)
1. CMTB+CMAB non-consolidated2. Expenses, excluding extraordinary items, divided by gross operating profit before trust account
credit costs
Source: Company disclosures1. FY3/08, non-consolidated2. Expenses, excluding extraordinary items, divided by gross operating profit before
trust account credit costs
87.0
40.1 34.4 30.3 44.0
96.0
61.3 60.5 63.261.1
6.8
5.5 5.2 4.65.5
190.0
107.0 100.2 98.2110.8
54.0%
35.3% 35.6%
41.7%
35.8%
0
50
100
150
200
250
FY3/00 FY3/05 FY3/06 FY3/07 FY3/080%
10%
20%
30%
40%
50%
60%
Personnel Non-personnel Taxes OHR
(JPY in billions)
A B C D1,2
13
CMTH
MUFG
SMFG
Mizuho
Sumitomo Trust
0.0%
0.5%
1.0%
1.5%
40% 45% 50% 55% 60%
Pre-provision Profit / Gross Operating Profit¹,²
Pre-
prov
isio
n Pr
ofit
/ Tot
al A
sset
s¹
Good
High Profitability
FY3/08 Comparison of Major Banking Groups
Source: Company disclosures1. FY3/08, non-consolidated basis2. Gross operating profit before trust account credit costs
Poor
AB
C D
14
Table of Contents
IV. Differentiation Based on Strengths and UniqueCapabilities
Investment Trust and Annuity InsuranceReal EstateHousing LoansAsset Management and Custody
15
3.9 6.1 9.0 10.68.8
12.2
21.0 20.317.1
22.1
13.0 14.2
2.9 6.110.3 13.1
30.0
40.543.0
45.2
0
10
20
30
40
50(JPY in billions)
FY3/05 FY3/06 FY3/07
Trustee Fee & Investment Advisory Fee1,2 .Investment Trust Sales Fee1 .Annuity Insurance Sales Fee1 .
(Ref) Investment Management Fee of CMAM3
FY3/08
“Stock”increase
generatingstable feerevenues
Revenues Breakdown of Sales Fees by“Flow-based” and “Stock-based”
1. CMTB + CMAB non-consolidated2. Including investment management fee from CMAM as follows:
FY3/05: JPY 0.7 billion, FY3/06: JPY1.9 billion, FY3/07: JPY 3.4 billion,FY3/08: JPY 3.9 billion
3. CMAM non-consolidated
Investment Trusts Entrusted (CMAB)
Revenue composed ofboth flow-based salescommission and stock-based agent commission
Increase in stock-basedtrust fee, in proportionto increase in aggregatebalance
Increase in AUM andrevenues fromcollaboration of CMTBand CMAB
Investment Trust and Annuity Insurance (1) Financial PerformanceAggressive expansion of sales of investment trust and annuity insurance products ingrowing marketSteady growth of revenues related to asset management / custody
Chuo Mitsui Asset TrustChuo Mitsui Asset Trustand Banking Company, Ltdand Banking Company, Ltd
The Chuo Mitsui Trust andThe Chuo Mitsui Trust andBanking Company, LtdBanking Company, Ltd
4.0 5.8 8.1 10.0
22.028.5 25.8 24.5
26.0
34.4 34.0 34.6
0
10
20
30
40
FY3/05 FY3/06 FY3/07 FY3/08Upfront Sales Fee (Flow)Annual Fees (Stock)
(JPY in billions)
6.78.5
9.711.0
6.1
9.210.8 10.5
02468
1012
Mar-05 Mar-06 Mar-07 Mar-08Book Value Basis Market Value Basis
(JPY in trillions)
16
1619
2225
0
5
10
15
20
25
30
Mar-06 Mar-07 Mar-08 Sep-08
(branches)
1.2%
98.8%
Clients with housingloans who have
purchasedinvestment trusts
from CMTB
Potential for cross-selling of investment
trusts and annuityinsurance products
Investment Trust and Annuity Insurance (2)Strategy Going ForwardPromoting cross-sales of investment trusts and annuity insurance products to wealthyseniors, while pursuing potential future customers
Promote Marketing to Wealthy Seniors¹
Never purchasedinvestment trusts of CMTB⇒Potential Future Clients
Percentage of wealthy senior clients who have purchased investmenttrusts and annuity insurance products2 (as of Apr-08)
Measures for Customer Acquisition
Potential Future Clients
1. Clients of CMTB aged 50 and above and with AUM of JPY 10 millions or more2. CMTB non-consolidated
Hold neither investment trust nor annuity insurance productsHold investment trust products onlyHold annuity insurance products (many also hold investment trust products)
Cross-Selling
Pursuing Potential Customers
Know-how and consulting skills developed in pension businesses,along with campaigns and attractive products will allow us to …
— Cross-sell products to wealthy seniors— Strengthen marketing towards borrowers
Aggressive expansion of “Consulplazas”Expand internet servicesConduct various seminars for customers
Percentage of clients with CMTB housing loans who have purchasedinvestment trusts1 (as of Mar-08)
Number of “Consulplazas”
1. CMTB non-consolidated
26.6%
17.6%
55.8%
*
* Includes a Consulplaza tobe opened this Oct.
17
Real Estate (1) Financial PerformanceAlthough the number of transactions decreased due to the difficult fundingenvironment in March 2008, investor demand is robust and the transformation ofreal estate into financial products is expected to continue
Real Estate Revenues1 Balance of Entrusted Real Estate Securitizations1
Impact on investor demand from market turmoil:“Investor-related Transactions” /
Real Estate Brokerage Fees■ 2H FY3/07: 67%■ 1H FY3/08: 64%■ 2H FY3/08: 53%
1. CMTB non-consolidated
2,140.9
2,999.7
4,312.7
5,141.1
0
1,000
2,000
3,000
4,000
5,000
6,000
Mar-05 Mar-06 Mar-07 Mar-08
(JPY in billions)
1. CMTB non-consolidated
5.1 5.8 7.6 7.2
20.124.5
31.0
24.4
25.3
30.3
38.7
31.7
0
5
10
15
20
25
30
35
40
FY3/05 FY3/06 FY3/07 FY3/08
(JPY in billions)
Real estate brokerage fees Real estate trust fees
18
# of Employees Engaged in our Real Estate Businesses
Organizational Enhancements for the Real Estate Business Group
Real Estate Brokerage Fees by Origination Sources1
1. FY3/08, amount basis2. Investors consist primarily of real estate funds
Real Estate BusinessDepartment
Enhance relationship with investors such as real estate fundsand J-REITsPromote marketing to overseas investors
Real Estate Investment AdvisoryDepartment
Consider entry into the real estate investment managementbusinessesAim for steady growth in balance of entrusted real estatesecuritizations
Real Estate InvestmentPromotion Department
Strengthen consulting sales focused on clients’ real estatestrategiesEnhance and expand network of channels, such as SMBC, etc.
Real Estate (2) Strategy Going ForwardWe aim to increase real estate revenues by further enhancing our relationships withinvestment funds and J-REITs, and through additional staffing and organizational changes
2Investors59%Developers and
major contractors27%
Customers7%
Non-customers7%
325361
419439
0
250
300
350
400
450
500
Mar-05 Mar-06 Mar-07 Mar-08
(# of employees)
~~
19
Housing Loans (1) Financial PerformanceWe continue to focus on the growing housing loan market, differentiating ourselves throughour “route-sales” strategy
Balance of Loans to Individuals (Post Securitization)1 Rate of Growth in Balance of Housing Loans1 (FY3/08)(Comparison of Major Banking Groups)
1. Non-consolidated
18.3%
2.9%
1.0% 1.0% 0.7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
CMTH SumitomoTrust
MUFG Mizuho SMFG
1. Non-consolidated
1,858.4 1,918.92,140.9
2,531.9
2,431.8 2,415.72,579.9
2,930.1
573.4 496.8439.0
398.2
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Mar-05 Mar-06 Mar-07 Mar-08
(JPY in billions)
Sole proprietorships, etc. Housing loansA B C D
20
Housing Loans (2) Strategy Going Forward
Approach Customized by Region“Route-sales” Strategy Enhancement of Sales Infrastructure
Increase sales force employees
Mar-07: 604 → Mar-08: 628 (+4% YoY)
Strengthen leadership through theappointment of experienced salespromotion managers
Sharing know-how onrelationship management and“route-sales” channelenhancement
Improve services available via theInternet to enhance convenience
Preliminary loan applications
Early redemption, etc.
Housing Loan Originations by Channel1 Housing Loan Originations by Region2
“Route-sales” Strategy
Differentiation by referral source- major home builders, real estate
agents and developers~ Fast response and high consultation
skills
1. FY3/08, # of origination basis 1. Source: Population Census. Based on total population(growth rate between 2000 - 2005)
2. FY3/08, # of origination basis
Effective Branch Network
Branch network focusing on the KantoRegion (33 out of 67 branches), in
which the population is growing at amuch higher rate (3.0%1) than the
national average (0.7%1)
Kanto67%
Kansai17%
Chubu6%
Other10%
“Route-sales”channel
94%
In addition to our “route-sales” strategy utilizing our network of real estate relationships, we aim to growour housing loans business through regionally customized strategies and enhancement of our sales force
Referral fromcompanies
2%
Over-the-counter,etc.4%
21
25% 28% 30% 34%
4%10% 10%
10%
62% 60% 56%71%
0%
20%
40%
60%
80%
100%
FY3/03 FY3/06 FY3/07 FY3/08
Corporate LoansReal Estate Asset FinanceLoans to Individuals
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
FY3/061H
FY3/062H
FY3/071H
FY3/072H
FY3/081H
FY3/082H
Loans to IndividualsReal Estate Asset FinanceCorporate LoansDeposits and Principal
3
2
4
* Managerial accounting-based, CMTB non-consolidated, average balance basis1. Calculated based on the banking account (domestic funds) + Loan Trusts + JOMTs +
yen denominated loans to non-residents, after securitization of housing loans and realestate non-recourse loans
2. Corporates + Restructuring and Revitalization-Related Financing, etc3. Does not include bond-types
Loan Portfolio
Loan Portfolio1 Yield on Loans and Funding1
We have built a profitable loan portfolio
* Managerial accounting-based, CMTB non-consolidated, average balance basis1. Calculated based on the banking account (domestic funds) + Loan Trusts + JOMTs + yen
denominated loans to non-residents2. Does not include bond-types3. Corporates + Restructuring and Revitalization-Related Financing, etc4. Calculated based on the banking account (domestic funds) + Loan Trusts + JOMTs
More than 30% of totalloans are profitableloans to individuals
Focus on loans withgood risk-return profile
From FY3/08 onwardProactively increasingprofitable overseaslending(External rating abovesingle A and welldiversified by industry)
2
3
22
Chuo Mitsui Asset Trust & Banking Awarded by third party agencies Stable revenue growth with focus on pension businesses
Revenues from Entrusted PensionAUM of Entrusted Pension¹
“Mercer MPA (Japan) Award”Awarded Japan Domestic Equities for5 consecutive years since the award was started
1. Includes discretionary assets
6,361.4 6,570.77,121.5 7,344.4
6,720.6
7,950.8
8,625.9
7,657.1
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Mar-05 Mar-06 Mar-07 Mar-08Book value basis Market value basis
(JPY in billions)
24.0
24.5
26.0
26.6
0
23
24
25
26
27
FY3/05 FY3/06 FY3/07 FY3/08
(JPY in billions)
~~
23
Chuo Mitsui Asset Management / Chuo Mitsui Capital
1. Outstanding principal amount (net of sales, repurchases and redemption amount)2. Sum of investment trust and investment advisory fees (market value basis)3. CMAM non-consolidated
Strong presence in the mutual funds market
Channel expansion among regional banks, etc
A major player in the domestic mezzanine marketRevenue source diversification through external fundraising
AUM
Management Fees from Investment Trust3
AUM1
Chuo Mitsui Capital (CMC)Chuo Mitsui Asset Management (CMAM)
Market EnvironmentSteady demand for capital restructuringTotal transaction value of buyouts for the first 3months of 2008 exceeds those of same period lastyear
Chuo Mitsui CapitalWith lower activity levels for foreign investmentbanks, expectations for CMC are growing
779.2
1,311.0
1,864.9
860.3
1,574.2
2,234.9 2,179.4 2,209.5
0
500
1,000
1,500
2,000
2,500
Mar-05 Mar-06 Mar-07 Mar-08Principal basis¹ Market value basis²
(JPY in billions)
2.96.1
10.313.1
0
5
10
15
FY3/05 FY3/06 FY3/07 FY3/08
(JPY in billions)
13.1
84.6 105.1 116.3
34.9
142.9
214.5
273.9
050
100150200250300
Mar-05 Mar-06 Mar-07 Mar-08Investment amount Commitment amount
(JPY in billions)
1. Total assets under management by Chuo Mitsui Capital
24
V. Overview of Our Capital
25
Overview of Our CapitalWe have steadily accumulated retained earnings, which now exceeds the outstanding amountof public funds
Capital Adequacy Ratio1 & Tier I Ratio1
Status of Outstanding Public Preferred Shares
Group Retained Earnings2,3/ Public Funds3
CMTH consolidated. Figures after Mar-07 are calculated on Basel II basis. Figures as of Jun-08 reflects the influence of the reduction of retained earnings (JPY 127.3 billion )due to the share buyback & cancellation conducted in July 08. Total retained earnings of CMTH+CMTB+CMAB less an appropriation for legal reserve, etc. Figures as of Jun-08 reflect the influence of secondary offering and share buyback & cancellation conducted in July 08. No upward reset and downward-only reset. Annual reset date: August 1st
30-day average for common share price, starting from 45 days prior to mandatory conversion date. JPY400 is its final reset floor
We aim to make“Full Repayment”by August 2009
throughsecondary
offerings andshare buybacks
12.2610.34
12.35 12.1313.84
9.278.908.50
6.82
10.82
0
4
8
12
16
Mar-05 Mar-06 Mar-07 Mar-08 Jun-08
Capital Adequacy RatioTier1 Capital Ratio
1
1
(%) (JPY in billions)
Amount
(Yen bn) Type
Year/Month
of Injecti on
Div i dend
Rate(%)
Current
Convers ion
Price*4
Mandatory
convers ion
date
Convers ion Pri ce
at mandatory
convers ion date
Class Ⅰ All shares (JPY 32.0 billion) were sold in the market in July 2006 Class Ⅱ 150.00 Convertible 3/1999 0.90 JPY450 8/1/2009 Market price*5
Class Ⅲ 50.35 Convertible 3/1999 1.25 JPY450 8/1/2009 Market price*5
JPY 37.0 billion were sold in the market in July 2007 JPY 76.5 billion were sold in the market and JPY 86.4 billion were bought back in July 2008
Total 200 .35
Mar-06 Mar-07 Mar-08 Jun-08
254.0343.2
400.4
273.0
432.2 400.2 363.2
200.3
86.4
32.037.0
76.5
0
100
200
300
400
500 Retained earnings Public funds(Book value)Buyback Offering
26
VI. Appendix
27
Actual YoY Actual YoY
(JPY in billions) FY3/07 FY3/08 Change 1Q.FY3/08 1Q.FY3/09 Change<CMTB+CMAB, non-consolidated>
Gross Operating Profit ¹ 275.3 265.2 (10.0) 70.5 57.4 (13.0)
Operating Expenses 98.2 110.8 12.5 28.0 30.0 2.0
Net Periodic Benefit Cost (17.1) (7.7) 9.3 - - -
Pre-provision Profit ² 177.0 154.4 (22.6) 42.5 27.4 (15.1)
Net Other Profit (Loss) and Others (22.9) (27.5) (4.6) - - -
Recurring Profit 154.1 126.8 (27.3) 37.7 20.1 (17.5)
Extraordinary Gain / Loss 18.1 8.1 (9.9) 0.7 1.3 0.5
Income before Income Taxes 172.3 135.0 (37.2) 38.4 21.5 (16.9)
Current Income Taxes 10.5 10.2 (0.2) 2.4 1.8 (0.5)
Deferred Income Taxes 43.3 42.8 (0.5) 10.1 6.5 (3.5)
Net Income 118.4 81.9 (36.4) 25.9 13.0 (12.8)
Credit Costs 29.7 9.5 (20.2) 1.7 4.3 2.5
<CMTH, consolidated>
Recurring Profit 159.9 125.3 (34.5) 34.7 19.1 (15.6)
Net Income 112.7 71.8 (40.9) 20.1 9.6 (10.5)
Dividend (yen per share) 5 7 - -
Actual YoY(JPY in billions) FY3/07 FY3/08 Change<CMTB+CMAB, non-consolidated>
Asset Management Related Businesses 130.1 121.9 (8.1)
Investment Trust & Annuity Insurance 43.0 45.2 2.2
Real Estate Fee Businesses 38.7 31.7 (7.0)
Pension Trust 26.0 26.6 0.6
Stock Transfer Agency 14.5 13.6 (0.8)
Banking Businesses 145.2 143.2 (1.9)
Conventional Banking Businesses 68.2 77.5 9.3
Corporate Loans 42.4 43.3 0.8
Bond Investments 25.7 34.2 8.4
Loans to Individuals 37.1 39.5 2.4
Real Estate Asset Finance 9.7 9.9 0.1
Alternative Investments 25.3 9.5 (15.7)
Other Banking Related Businesses 4.8 6.6 1.8
Gross Operating Profit 275.3 265.2 (10.0)
Summary Financial ResultsDecline in profit for 1Q.FY3/09 due to delay in the recovery of the market
Financial Highlights
1. Before trust account credit costs2. Before trust account credit costs and provision (reversal) of general allowance for possible loan losses
Revenues by Business Unit
Increase in netperiodic benefitcost (JPY 9.3 bn)
Gains on return ofsecurities fromemployeeretirement benefittrust in FY3/07(JPY 15.8 bn),none in FY3/08
Loss from CDO(JPY 5 bn)
Decrease in feeincome from realestate feebusinesses(JPY 7 bn)
* Our Strategic Focus Areas
Decrease in feeincome frominvestment trustand real estate feebusinesses(JPY6.8 bn)
Decrease individend income(JPY 7.5bn)
28
0
2,000
4,000
6,000
8,000
10,000
12,000
~24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74 75
~0
5,000
10,000
15,000
20,000
25,000
Average savings Average liabilities Population
(thousands of people) (JPY in thousands)
(Age)
Cash and deposits14%
Bonds9%
Investmenttrusts14%
Shares and equities29%
Insurance andpensionreserves
30%
Others4%
Cash anddeposits
52%
Bonds3%
Investmenttrusts4%
Shares andequities
9%
Insuranceand
pensionreserves
27%
Others4%
Average Savings and Liabilities per Household1
Investment Trust and Annuity Insurance ~ Market Environment
Composition of Financial Assets ofIndividuals in Japan and US
<Japan>
<United States>
Total: JPY 1,490 trillion
Total: USD 44.1 trillion
16.5%
51.7%
Source: Flow of Funds, Bank of Japan (as of Mar-08)
The shift from “savings” to “investments” is expected to continue
Savings
1. Households with at least 2 persons2. Shares, bonds, and investment trusts, etc.
Source: Population Estimates (Dec-07 recalculated basis), Statistics Bureau, Ministry of Internal Affairs and CommunicationsNational Survey of Family Income and Expenditure (2004), Statistics Bureau, Ministry of Internal Affairs andCommunications
“BabyBoomers”
Liabilities
ExcessSavings
14.0%14.8%12.3%
9.5%7.3%6.8% 7.4%
5.1%4.1%3.3% 4.1%
16.3%
Percentage of savings represented by securities²
29
14%FY3/03
FY3/08
CMTB (non-consolidated)
Others
Real Estate ~ Market EnvironmentWe have increased our market share by leveraging the transformation of real estate intofinancial products
Real Estate Securitization Market
Source: Survey of Real Estate Securitization (FY06), the Ministry of Land, Infrastructure,Transport and Tourism
(JPY in trillions)
Market Share of Real Estate Related Revenues forJapanese Trust Banks1
1. The aggregate of real estate related revenues of major Japanese trust banksSource: Company disclosures
(# of transactions)
0
1
2
3
4
5
6
7
8
9
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-080
200
400
600
800
1,000
1,200
1,400
1,600
1,800
J-REITs Others # of transactions
21%
30
43
46
4950
35
40
45
50
55
1995 2000 2005 20100
5
6
7
8
9
10
11
-2525
-2930
-3435
-3940
-4445
-4950
-5455
-5960
-6465
-6970
-74 75-
~~
Although housing starts have decreased due in part to amendments to the BuildingStandards Law, the housing loan market is expected to recover, with robust demand from“junior baby boomers”
Housing Loans ~ Market Environment
Source: Population Projection for Japan (Projections as of Mar-08),National Institute of Population and Social Security Research,Ministry of Land,Infrastructure,Transport and Tourism
Population Distribution by Age Group# of Households in JapanHousing Starts(houses / condominiums) since Apr-07
Although housing starts decreased due inpart to the amendments to the Building
Standards Law in Jun-07, the rate ofdecrease has slowed
Although total population peaked in 2006,the # of households is expected to grow
Demand from first-time buyers in the“junior baby boomer” generation isexpected to sustain housing starts
Forecast
(millions ofhouseholds)
Housing Starts (change from same month of previous fiscal year)
Souce: Housing Starts (Mar-08),Ministry of Land,Infrastructure,Transport and Tourism
(millions of people)
(Age)Source: Population Estimates (Dec-07 recalculated basis), Statistics Bureau, Ministry of Internal Affairs and
Communications
0%
20%
40%
60%
80%
100%
120%
140%
Apr-07 Jul-07 Oct-07 Jan-08 Apr-08
Housing Starts (Houses)Housing Starts (Condominiums)
31
This material contains certain forward-looking statements. These statements are not guarantees of futureperformance, and involve risks and uncertainties. Actual results may differ from these forward-lookingstatements contained in the present material, due to various factors, including, but not limited, to changes inoverall economic conditions.