Sumi TRUST Management Strategy － for Stable and Sustainable Growth －

Daiwa Investment Conference Tokyo 2018

SuMi TRUST Management Strategy － for stable and sustainable growth －

Tetsuo Ohkubo Director, President Sumitomo Mitsui Trust Holdings, Inc. March 6, 2018

Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. This presentation material contains information that constitutes forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors including changes in managerial circumstances. Please refer to the most recent relevant materials including financial results (“Kessan Tanshin”)(including attached explanatory materials), the securities report and other presentations disclosed by Sumitomo Mitsui Trust Holdings and its group companies, for further information that could significantly influence its financial position and operating results as well as investment decisions by investors. Information regarding companies and other entities outside the group in this document has been obtained from publicly available information and other sources. The accuracy and appropriateness of that information has not been verified by the group and cannot be guaranteed. This presentation does not constitute an offer to sell or a solicitation of an offer to subscribe for or

purchase any securities.

Who we are

Business Strategy

Initiatives for ESG

Summary （as of December 2017） Major group companies

Company Name Sumitomo Mitsui Trust Holdings, Inc. Sumitomo Mitsui Trust Bank February 1, 2002 Date of Establishment Sumitomo Mitsui Trust Guarantee (Change of the company name: April 1, 2011) (Housing loan guarantee business) Paid-in Capital 261.6 billion yen Sumitomo Mitsui Trust Club Listing Tokyo, Nagoya (Credit card business) Security Code 8309 Sumitomo Mitsui Trust Panasonic Finance Number of employees Approx. 22,000 (Consolidated) (General leasing business, etc.) Number of shares issued 390.3 million (Common stock) Sumitomo Mitsui Trust Loan & Finance Total assets 64.2 trillion yen (Consolidated) (Money lending business) Loans and bills discounted 28.1 trilion yen (Consolidated) Sumitomo Mitsui Trust Realty Total liabilities 61.3 trillion yen (Consolidated) (Residential real estate brokerage business) Deposits 34.0 trillion yen (Consolidated) Sumitomo Mitsui Trust Asset Management Total net assets 2.8 trillion yen (Consolidated) (Asset management business) Shareholders' equity 2.0 trillion yen (Consolidated) Nikko Asset Management (Asset management business) (Total trust assets of Assets under custody 279 trillion yen group companies) Rating (Sumitomo Mitsui Trust Bank) Net business profit before 232.3 billion yen (Results of FY2016) credit costs S&P Moody's Fitch JCR R&I Net income attributable to 121.4 billion yen (Results of FY2016) owners of the parent A/A-1 A1/P-1 A-/F1 AA- A+/a-1

Common Equity Tier1 11.04％ (Fully-loaded basis) capital ratio

The Mitsui Trust & Banking Sumitomo Mitsui Trust Group Financial Group with The Chuo Trust & Banking Trust Bank as its core Sumitomo Mitsui Trust Bank The Sumitomo Trust & Banking

The Bank of Tokyo-Mitsubishi Mitsubishi UFJ Financial Group The Sanwa Bank The Bank of Mitsubishi UFJ Trust & Tokyo-Mitsubishi UFJ Banking The Tokai Bank

Mitsui Bank Sumitomo Mitsui Financial Group Taiyo Kobe Bank Financial Group with Commercial Bank as its core Sumitomo Mitsui Banking Corporation The Sumitomo Bank

The Daiichi-Kangyo Bank Mizuho Financial Group The Fuji Bank

Mizuho Bank Mizuho Trust & Banking The Industrial Bank of Japan

Loan/Investment business Loan/investment business Fee business Fee income ratio（1HFY2017） (Banking business) (Trust business) Loan/investment business Fee business Fiduciary Investment trust 100% services Pension 75%

50% Brokerage Real estate 25% 57.2% Real estate AM 32.5% 0% SuMi TRUST Holdings Mega banks (Average) Stock transfer Shareholder admin. agency services IR SR consulting Breakdown by business segment（FY17 plan）（Substantial gross business profit）

Retail Deposit・Lending Inheritance total solution 65.0 ■ services Investment mgmt. consulting 161.0 Fiduciary services ■ Real estate ■ Stock transfer Wholesale ・ Agency services Deposit Lending Securitization 179.0 Total ■ financial Retail total solution ¥685.0bn 54.0 services services Real estate finance ■ Wholesale financial 36.0 services ■ Global markets etc. Security investment Global markets 190.0 Derivatives

among Japanese Asset under management ¥84 trillion Investment Managers No. 1 among Japanese Bank Asset under custody*1 ¥271 trillion No. 1 Fiduciary services Groups Assets from corporate pension among Japanese Trust ¥13 trillion Fee Business (Asset Management and fund Banks No. 1 Administration) Number of corporate pension fund among Japanese Trust 1,346 funds lead-agent Banks No. 1 Entrusted balance of investment among Japanese Trust ¥68 trillion trusts Banks No. 1

Real estate business related among Japanese Trust ¥52.5 billion revenue*2 Banks No. 1 Real estate Entrusted balance of securitised among Japanese Trust ¥14 trillion real estate Banks No. 1

Stock transfer agency Number of shareholders under 25.1 million among Japanese Trust services administration shareholders Banks No. 1 Sales volume of investment

Banking Business Banking ¥1.1 trillion among Japanese Banks trust/discretionary investment*2 No. 1 Retail total solution among Japanese Trust Number of will trust 29,878 cases No. 2 services Banks Balance of loans to individuals ¥9 trillion among Japanese Banks No. 4

Wholesale financial Balance of loans to corporates ¥19 trillion among Japanese Banks No. 4

services Total loan balance ¥28 trillion among Japanese Banks No. 4

Figures above include estimation based on our investigation (as of the end of September 2017) *1 Aggregation figures as SuMi TRUST Group, *2 Figures for FY2016

Pursue growth through strengthening our Strengthening 1 edge as the sole specialized trust bank group 2 of cost competitiveness Goals Capital policy conforming to Strengthen effectiveness of 3 our business model 4 governance and enhance fiduciary duty

Total solution model “Best partner for our clients” Individual clients Corporate clients

Relationship manager with clients ►Accurately grasp current and Wholesale total solution Total potential needs of our clients Retail total solution services solution ►Propose a diverse range of products services Wholesale asset and services as the best solution management

Continuous improvement of Joint effort to provide specialized services client oriented proposals

Real Stock Global Fiduciary estate transfer markets Divisions with ►Offer a wide range of highly specialized products and services Specialized Business divisions with wide-ranging specialized knowledge ►Develop products and services for a knowledge wide array of clients’ needs SuMi TRUST Group

Who we are

Business Strategy

Initiatives for ESG

Business segments Goals

Asset management Expand AM businesses and administration

Fee related Investment management Increase businesses consulting administration fees Seek growth Real estate Increase brokerage fees

Loans to individuals Stable growth (mortgage loans) Loan/ Investment businesses Loans to corporates Improve profitability

Pursue General expenses Group based control efficiency Expenses/ Productivity Expand time for Digitalization serving client

Shift to profit structure with higher capital efficiency by increasing fee income steadily Growth driven by stable profits from continuous transactions with promising growth prospects

Trend of fee income (consolidated) Efforts to increase recurring fee ratio

(Yen bn) Other Credit card (Yen bn) Real estate Other fees 450 Investment management consulting 450 Stable fees (Mainly recurring fees) Fiduciary (Asset management/administration) Stock transfer agency services 398.6 398.6 400 400 369.4 369.4 42.1 355.8 349.2 355.8 349.2 350 35.2 350 95.6 46.1 41.2 14.9 42.1 301.2 91.7 301.2 2.2 102.6 300 2.2 300 106.4 44.9 46.4 52.2 50.2 47.1 250 94.3 250 2.2 66.9 67.6 31.5 59.5 58.8 200 200 48.8 150 302.9 150 277.7 242.8 253.1 162.0 169.3 173.9 171.1 100 206.9 100 142.2

50 50 26.0 32.0 31.1 31.2 32.0 0 0 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 9 Business Strategy (1) Fee Business ---Business environment (Retail)---

Household financial assets amount to over ¥1,800 trn and investment trust reaches ¥100 trn Substantial room for equity and investment trust to expand compared to the U.S. and Europe

Household financial assets Household financial assets by age group

< Comparison (Mar. 17) > (Yen trn) Others Two-thirds of household Insurance / Annuity 600 (Yen trn) 4% financial assets concentrated Equity 500 2,000 Investment trusts 29% to 60’s or above 1,845 400 Cash / Deposits Japan 52% 80 300 1,750 10% 200 1,491 5% 1,500 521 100 86 0 9% 13% 30's or 40's 50's 60's 70's or 1,250 below above 466 198 11% 31% US Age distribution of our individual clients 1,000 104 84 30’s or 30’s or 48 36% below 750 40’s below 6% 13% 7% 40’s 50’s 500 943 5% 60’s or 12% 60’s or 806 above Number of above AUM 13% 33% clients 250 34% 60% 50’s 74% Europe 15%

SuMi TRUST is one of the largest financial institution in Asia in terms of AUM (¥88 trn) Our business is steadily expanding with trust bank and group companies each demonstrating their strengths

Asset Under Management (AUM) Balance of Public Equity Investment Trusts

(Yen trn) SuMi TRUST Bank (Yen trn) SuMi TRUST AM 224 100 SuMi TRUST AM 22.5 Nikko AM Nikko AM 88.1 SuMi TRUST Group (Index) 20.0 80.9 Market (Index) 80 76.6 70.6 17.5 190 63.3 14.9 15.0 60 55.1 51.1 12.6 12.5 51.0 100 11.2 11.2 49.5 10.0 40 8.6 46.4 8.0 7.5 6.6 10.0 9.5 8.1 5.0 20 4.8 3.8 23.0 17.4 20.3 2.5 12.9 16.3 0 0.0 Mar. 2012 Mar. 2014 Mar. 2016 Mar. 2017 Dec. 2017 Mar. 12 Mar. 14 Mar. 16 Dec. 17

Pension market: Shift from DB add-on tier(Kosei-nenkin-kikin) to DB and DC DC: Number of plan members is No.1 in the industry due to our high-quality investment education

Balance / Number of Corporate Pension Plan members (Market) Number of DC Participants (Number Balance Plan members of Plan (Number of members, SuMi TRUST Bank DC Plan Members 1.31 DB add on tier clients, DB add on tier mn) SuMi TRUST Bank (Index) (Yen trn) 1.20 DB base tier million) DB base tier 1.20 Market (Index) 169 100 DC 10 DC 1.01 88.9 1.00 0.94 8.01 8.18 0.77 0.80 78.2 0.80 80 19.0 8 CAGR 146 0.60 26.8 5.92 11.1% 60 6 0.40 4.40 0.20 CAGR 100 7.8% 40 59.4 4 4.23 0.00 45.3 Mar. 12 Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 20 2 SuMi TRUST Bank DC Plan Market Since FY12 10.4 1.39 members 5.9 Selecting 0 0 56％ 69％ 46％ Mar. 2012 Mar. 2017 Mar. 2012 Mar. 2017 Investment trust Provision of ％％％ matching funds 39 75 27 Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 12 Business Strategy (1) Fee Business (Asset Management / Administration)

One of the largest financial institution in Asia in terms of AUC (¥279 trn) and overseas entrusted balance also expand steadily No.1 in industry at entrusted balance of investment trusts, capturing market expansion successfully

Asset Under Custody (AUC) Entrusted Balance of Investment Trusts

(Yen trn) Domestic entrusted assets (left) (*1) (USD bn) (Yen trn)

Overseas entrusted assets (right) (*2) 70 300 279 500 261 60 250 236 223 400 333.2 50 200 305.4 265.7 277.4 300 40 150 72.9 64.5 200 30 100 55.6

100 20 40.3 50 32.1 10 0 0 Mar. 2015 Mar. 2016 Mar. 2017 Dec. 2017

*1 Total trust assets of the SuMi TRUST Group 0 *2 Global custody, Combined figures of SuMi TRUST Bank (USA), SuMi Mar. 12 Mar. 14 Mar. 16 Mar. 17 Dec. 17 TRUST (UK), and SuMi TRUST Bank (Lux.) Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 13 Business Strategy (1) Fee Business (Investment Management Consulting) Provide investment knowledge accumulated through business with institutional investors such as Pension funds, to individual clients Steady increase of balance of investment trust, fund wrap and SMA through consulting based sales approach Balance of investment trust, etc Composition of gross business profit

(Yen trn) Upfront fees Investment trust (Yen bn) Fund wrap, SMA Recurring fees 4.0 3.80 Recurring fees ratio 3.56 56% 3.49 120 53% 51%

100 3.0 2.83 37% 80 32% 2.21 2.96 66.9 66.5 2.64 2.79 2.0 58.8 58.0 60 48.8 2.45 29.0 42.0 28.9 27.5 40 2.07 1.0 33.2 20 37.5 24.9 29.9 30.5 0.84 0.76 0.83 15.6 0.37 0 0.0 0.13 FY12 FY14 FY16 FY17 FY19 Mar. 12 Mar. 14 Mar. 16 Mar. 17 Dec. 17 actual actual actual plan target Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 14 Business Strategy (1) Fee Business (Investment Management Consulting)

Investor base of the instalment investment program is rapidly expanding especially in the asset formation generation Level premium insurance contracts are steadily increasing, contributing to stability of future profit

Number of investors of instalment investment program Number of level premium insurance

(Number of (Number of contracts, thou) clients, thou)

25 30

25 20 Increased by 48 times Increased by 4 times in 1.5 years in 1.5 years 20 15 26 15 30

10 25 10 13 15 5 5 8

1 0 0 0 Mar. 16 Sep. 16 Mar. 17 Sep. 17 Mar. 16 Sep. 16 Mar. 17 Sep. 17

Will Trusts create business opportunities both before and after inheritance event Support needs of inter-generational asset transfer through business unique to trust banks

AUM of Will Trusts At time of will execution (timing of inheritance)

Our AUM Around 15% Our AUM Increase to 30%

Access to AUM (including At the timing of will execution, real estate) 5 times larger Total Asset expand transactions with than our AUM (AUM) heirs ¥3.2 trn ■ Our AUM ※Sample survey of transaction status ■ Other banks AUM of heirs with our bank ■ Real estate etc.

Due to increase of Will Trusts under administration, Enhance B/S Consultation number of executed cases on the increase 800 Number of execution (Left) 30,000 Number of will trust (Right) Alliance with 28,000 Product Better 600 Regional Improvement Processing 26,000 Banks 400 24,000 By extending Will Trusts to a broad client base, 200 22,000 promote smooth and safe inter-generational asset transfer 0 20,000 1HFY14 2HFY14 1HFY15 2HFY15 1HFY16 2HFY16 1HFY17 Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 16 Business Strategy (1) Fee Business (Obtain client base and promote generational cycle)

Client base: Expand client base centering on Seniors and Pre/post retirement generation to asset formation generation Inter-generation transfer: Utilizing inheritance related products as a point of entry, promote inter-generational shift of our client base to achieve sustainable growth Total solution marketing model for retail clients Expand stable income base

Instalment investment program Need for financing Level premium insurance retirement AM base client robust Establish Mortgage Retirement Inheritance Asset allowance loans Enhance Enhance Will

Asset formation Pre/post Seniors generation retirement Mortgages, DC/Company employees’ savings, generation Diners Club clients etc. 10's 20's 30's 40's 50's 60's 70's 80's

Gift/Inheritance (Inter-generation transfer) Strengthen core competence Liability

Increase of client needs for investment including security investment due to continuous downward trend of loan-deposit ratio Decrease in JGB yield lead to a increase of alternative needs for investments

Loan-deposit ratio of regional banks Security portfolio of regional banks

Due from banks JGB Local government bonds Corporate bonds 90% Japanese stocks Foreign bonds Other securities 100% 2% 3% 5% 8% 8% Regional Banks 85% Second-tier Regional Banks 80%

80% 60%

75% 20% 40% 23% 32% 41% 41%

70% 20% 30% 33% 21% 13% 13% 65% 0% 96/3 99/3 02/3 05/3 08/3 11/3 14/3 17/3 Mar. 11 Mar. 13 Mar. 15 Mar. 17 Dec. 17

Products：Provide investment products conforming with clients’ needs and risk tolerance Business support: Support client business utilizing expertise in asset management business

AUM of Wholesale asset management business AUM of Joint Venture Asset Management Company

(Yen trn) (Yen bn) 2.4 90 Sky Ocean Asset Management (*1) Joint money trust etc. AUM JP Asset Management (*2) Alternative assets etc. AUM 2.0 75

1.6 60

1.2 45 87.8

68.0 0.8 30 56.4 53.4

35.1 0.4 15 21.6 23.9 23.5 16.2 8.7 0.0 0 Mar. 15 Mar. 16 Mar. 17 Sep. 17 Mar. 16 Sep. 16 Mar. 17 Sep. 17 Dec. 17 (*1) Bank of Yokohama, Bank of Kyoto, Gunma Bank, Tokyo TY FG, SuMi TRUST Bank (*2) Japan Post Bank, Japan Post, Nomura Holdings, SuMi TRUST bank Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 19 Business Strategy (1) Fee Business (Real estate)

 Real estate brokerage: Brokerage fees from both corporate and retail clients increased, backed by market recovery  Real estate asset administration: Expansion of stable revenue source through solid growth

Real estate brokerage Real estate asset administration

(Yen trn) (Yen bn) Assets under custody from J-REITs SuMi TRUST Bank (Commercial properties) 60 Securitized real estate 14.8 SuMi TRUST Realty (Residential properties) 15.0 14.1 13.1 13.0 50 46.5 12.4 44.4 12.5 11.9 10.6 40 38.3 36.9 38.0 10.0 8.7 25.4 27.0 30 21.1 23.5 22.0 21.9 7.5

20 11.7 5.0

10 18.9 19.5 16.2 15.0 16.9 11.8 2.5

0 FY12 FY13 FY14 FY15 FY16 FY17 0.0 Actual Actual Actual Actual Actual Plan Mar. 15 Mar. 16 Mar. 17 Dec. 17

Business segments Goals

Asset management Expand AM businesses and administration

Fee related Investment management Increase businesses consulting administration fees Seek growth Real estate Increase brokerage fees

Loans to individuals Stable growth (mortgage loans) Loan/ Investment businesses Loans to corporates Improve profitability

Pursue General expenses Group based control efficiency Expenses/ Productivity Expand time for Digitalization serving client

Policy: Steady increase of loans to individuals, while shifting to emphasizing efficiency for corporate loans Portfolio: High quality portfolio, mainly credit to domestic large corporates and individuals

Trend of credit portfolio Comparison of NPL ratio (Non-consolidated)

(Yen trn) Loans to individuals 2.0% Loans to corporates 29.4 29.3 30 28.4

25.4 25 1.5% 22.9 7.9 8.9 9.3 7.3 20 6.4

1.0% ％ 15 1.0

0.6％ 10 20.4 20.4 20.0 18.1 16.5 0.5% SuMi TRUST Bank Mega bank A 0.5％ 5 Mega bank B ％ Mega bank C 0.2 0 0.0% Mar. 12 Mar. 14 Mar. 16 Mar. 17 Dec. 17 12/3 14/3 16/3 17/12

Reduce negative impact of low interest rate environment by solid asset and liability management Good sign of improvement in domestic loan-deposit spread

Income from domestic loan-deposit business (*1) Domestic loan-deposit spread (Non-consolidated) (Index: FY12=100) 1.2% 100 Average yield on Loans and bills discounted Average yield on Deposits Loan-deposit spread 95 1.0%

90 0.8%

85 0.6%

80 SuMi TRUST Bank 0.4% Mega bank A 75 Mega bank B 0.2% Mega bank C 70 0.0% FY12 FY13 FY14 FY15 FY16 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 3Q (*1) Income in domestic business = FY12 FY13 FY14 FY15 FY16 FY17 Loan interest income –deposit interest – interest from NCD Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 23 Business Strategy (2) Loan/Investment Business (Credit portfolio: Corporates)

Portfolio: Replace with higher profitability assets, supported by comprehensive risk management capabilities Business transformation：Selective approach, given the rise of foreign currency funding costs

Profitability improvement of credit portfolio Priority areas Product related (Foreign currency) Active effort in the areas which we Product related (Yen) have expertise and insights Corporate loan (Foreign currency) （Yen trn） Corporate loan (Yen) Product related ratio Aiming to commercialize 30% 28% 29% for investors 25 Expand credit to higher profitability assets Aviation finance 20.4 20.0 20 2.8 2.8 Overseas real estate NRL 2.9 15 2.8 Domestic project finance （） 3.9 3.5 renewable energy, etc 10 US high yield loans, CLO

5 10.7 10.6 M&A finance Domestic loans to mid-sized 0 Mar. 17 Dec. 17 Mar. 18 Mar. 20 Mar. 22 corporates Actual Actual Actual Plan Image

Policy：Increase of asset balance by providing competitive rates Quality：Maintain high quality of client base

Balance of loans to individuals High quality client base (Mortgage loans) (As of Mar. 2017) 45% Sumitomo Mitsui Trust L&F Major bank (Yen trn) SBI Sumishin Net Bank C Loss given default (LGD) default given Loss 11.9 12 SuMi TRUST Bank 11.5 0.3 40% 0.3 10.2 2.4 Major bank 10 0.3 2.2 B 8.9 35% 0.2 2.0 8 7.6 1.3 0.2 Major bank 0.9 30% SuMi A TRUST 6

Major bank 9.1 25% 8.9 D 4 7.9 7.3 6.4

2 20% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9%

0 Probability of default (PD) Mar. 12 Mar. 14 Mar. 16 Mar. 17 Sep. 17

Business segments Goals

Asset management Expand AM businesses and administration

Fee related Investment management Increase businesses consulting administration fees Seek growth Real estate Increase brokerage fees

Loans to individuals Stable growth (mortgage loans) Loan/ Investment businesses Loans to corporates Improve profitability

Pursue General expenses Group based control efficiency Expenses/ Productivity Expand time for Digitalization serving client

 Since establishment of SuMi TRUST Bank, expenses have been managed prudently  By reallocating administrative staff to marketing roles, to significantly increase face-to-face consultation hours

Our Efforts to Date Number of branches Number of visiting clients  24% reduction of branches through branch integration (Number of (Visiting Branches) clients, since merger 24% Reduction mn) Remains stable  90% of branches focused on retail marketing, low-counter 150 1.5 for consultation centric layout  Number of client visits stable since 2012 100 1.0

Comparison of G&A Expenses (Non-consolidated) 50 0.5 120 SuMi TRUST Bank (Index: FY11=100) 0 0.0 Mar. 12 Sep. 17 Mega bank A FY12 FY16 Mega bank B Net operating profit Investment Trust AUM Mega bank C per Branch per Branch 110 (Yen bn) (Yen bn)

1.6 25.0 Approx. 1.2 20.0 3 times Approx. 100 15.0 0.8 9 times 10.0 0.4 5.0 0.0 0.0 SuMi TRUST Mega banks SuMi TRUST Mega banks 90 Bank (Average) Bank (Average) FY11 FY12 FY13 FY14 FY15 FY16 Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 27 Business Strategy (3) Next generation trust type branch / Channel

To attain 70% reduction in branch backoffice work through digital transformation To define branch as an important tool for providing consultation services and enhance its value

Digital Transformation Initiatives Next Generation Trust Type Branch

<1st stage> Introduction of hand held tablets for client visits Inter-generational, Client friendly, Backoffice work Increase client contact In Worthy of a trust bank, Consultation space reduction FY17 ％％ Branch 10 10 Core Functions workload reduction Client visits increase Branch Loan & Life Client Visits Counter Planning Zero backoffice

<2nd stage> To enhance functionality of client visit tablet work Backoffice Work Branch Target: workload 50%reduction Plan initiated High Safe Deposit ATM Counter Boxes

<3rd stage> To advance digitalization further Concept Space

Branch 70% reduction To add necessary Target zero Optional Functions workload target in sight functions based High Safe Deposit on demand ATM Counter Boxes Concept Space（Asset transfer / tax Number of Contract Unit Topline Growth ＝ × × planning consulting） Contacts Ratio Profit Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 28 Financial and Capital policies (1) Basic concept

Basic approach to financial and capital policies Well balanced management with respect to reinforcing our financial base, investing for profit growth opportunities and enhancing mid-term shareholder return

Financial Stable profit accumulation and base efficient capital management ►Stable profit accumulation Reinforce ►Reducing financial risks including strategic our financial shareholdings base ►Adroit capital raising while considering efficiency

Invest for Capturing external growth opportunities growth utilizing M&A and partnership Maximize ►Flexible M&A strategies to capture external growth corporate value opportunities via well-balanced ►Inorganic growth strategies focusing mainly on capital management asset management and administration Invest Enhance Share- Dividend payment commensurate with for profit mid-term holder earnings and flexible share repurchases growth shareholder return opportunities return ►Dividend growth backed by stable business performance ►Increase of share value by share repurchase

Adequacy: Aim to maximize shareholder interests by ensuring adequate capital Efficiency: Maintaining 8% level effectively, excluding one-time factors

Common Equity Tier 1 ratio Return on shareholders equity (Fully-loaded basis) 12% 10%

10% 8%

8% 6%

6% 11.68% 10.89% 11.19% 11.04% 8.62% 8.72% 4% 7.81% 7.84% 4% 8.44% 6.99% 6.07% 6.48% 2% 2%

0% 0% Mar. 13 Mar. 14 Mar. 15 Mar. 16 Mar. 17 Dec. 17 FY11 FY12 FY13 FY14 FY15 FY16

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

Shareholder return per share Earnings per share (Index: FY12=100)

Repurchase of own share SuMi TRUST Bank Mega bank A Dividend percommon share (Yen) (Yen) Consolidated net income (right) (Yen bn) Mega bank B Mega bank C 150

166.9 800 159.6 175 250 150.0 125 133.7 137.6 150 200 121.4 600 100 125 162.5 156.0 148.0 151.3 150 100 75 400 75 100 50 50 130 130 130 200 403 433 394 120 344 50 100 312 317 25 90 25

0 0 0 0 FY12 FY13 FY14 FY15 FY16 FY17 FY12 FY13 FY14 FY15 FY16 FY17 forecast forecast Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 31 Stock price volatility risk  In addition to reducing strategic shareholdings in a planned manner, carry out hedging transaction to reduce volatility risk of stock price and control economic value of stock position  While unrealized losses on hedging of strategic shareholdings increased due to recent rise of stock market, overall economic value of available-for-sale securities portfolio improved  Taking into full consideration of impact on our earnings for the period as well as level of stock price, part of hedging position may be closed and reconstructed with realized profits and losses Initiatives for strategic shareholdings

Strategic shareholdings Hedging transaction (Bear-type investment trust)

► Commencing from FY2016, to reduce ratio of Hedging transaction aimed to reduce volatility risk of stock price and controlling economic value of stock position strategic shareholdings to Common Equity Tier1 capital (excluding valuation differences on AFS Currently maintaining approx. 50% hedging ratio (Base-portion) securities) by 50% in approx. 5 years ► Amount would be worth sales of approx. ¥150 to Flexible adjustment of hedging position (Additional-portion) ¥200bn on cost base by end of FY2020

Profit related to strategic shareholdings (Non-consolidated) Amount of risk on strategic shareholdings (*2) (Non-consolidated) Japanese stocks (Yen bn) Hedging of strategic shareholdings (base) Dividends received (Yen bn) 105 Hedging of strategic shareholdings (additional) Valuation differences (*1) Hedging of strategic shareholdings (temporary) (*3) 90 Net gains on stocks Net 75 Change of economic value 250 60 125 45 30 0 15 (125) 0 (15) (250) Mar. 2017 Jun. 2017 Sep. 2017 Dec. 2017 17/1Q 17/2Q 17/3Q (*2) Impact on risk amount when stock price moves 20% (*1) Sum of strategic shareholdings and hedging transaction (*3) Temporary position to be closed Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 32 Profit targets and Financial targets

FY2016 FY2019 Annual change Actual Plan growth rate

Net business profit

Profit target Profit ¥232.3bn ¥300bn +¥67.6bn +8.9% before credit cost

Ordinary profit ¥196.3bn ¥275bn +¥78.6bn +11.9%

Net income attributable to owners of the parent ¥121.4bn ¥180bn +¥58.5bn +14.0%

FY2016 FY2019 Major KPIs Actual Plan

Fee income ratio 62.3% 55-60% To be raised to approx.60% Financial target Financial

Overhead ratio 64.5% 55-60% To be reduced to Mid 50% level

Common Equity Approx. Maintain approx. 10% 11.19% Tier1 ratio 10% comfortably

Approx. 8% or more [with a view Shareholder ROE 6.07% 8% to achieving 10% in the future]

Who we are

Business Strategy

Initiatives for ESG

 Transitioned to a Company with Three Committees upon resolution of general shareholders’ meeting in June 2017  External Director elected as Chairman of the Board. External Directors also take major roles in operation of various committees

General Meeting of Shareholders Separation of supervision and execution Supervisory Board of Directors [Supervisory Body] Body Board of Directors (Ensure soundness of management) Statutory Clear separation of roles Nominating Compensation Committee Committee Audit Committee Executive officers [Executive Body] Voluntary (Prompt business execution) Conflicts of Interest Risk Committee Committee Enhancement of supervisory function Supervise Chairman of the Executive External Director Board of Directors Body Executive Committee Ratio of External Representative Executive Officer, 7 out of 15 Executive Officer etc. Directors, etc.

Chairperson of All External Directors Each Committee committees

Contribute to create sustainable society through initiatives distinctive of the SuMi TRUST Group The Group has coined the word “Eco-Trustution” to represent its environmental financial business based on the concept of providing solutions to ecological issues through use of trust function

Contribution to create sustainable society Environmental financial business of SuMi TRUST Group

Businesses that contribute to Investment in Financing for environment and society Environmentally Environmentally Friendly Friendly Climate Change Issues Companies Companies (Responsible (Environmental Natural Capital Investment) Rating Loans) （Biodiversity issues） Environmentally Friendly Property Support for Sustainable Investing Energy Efficiency Valuation of （Responsible investment） (Renewable Natural Capital Energy, Energy (Biodiversity) Super-aging Society Issues Conservation)

Support for Support for Smart City Environmental Projects Friendliness in Real Estate

 Support expansion of various renewable energies to form “societies of net zero carbon emission”  Promote adoption of various forms of renewable energies such as wind and solar power, through provision of project finance  Address climate changes at level of communities and local public authorities to support energy efficiency

Renewable Energy Initiatives A Member of Climate Action 100＋ ►Support expansion of wide range of renewable energies ►International joint engagement with major including solar and wind power from financing side corporate greenhouse gas emitters ►Renewable energy funds set up exclusively for purpose of ►SuMi TRUST Bank responsible for Asia investing in and operating large-scale renewable energy Pacific region projects

Renewable Energy Project Finance ►Total annual power output of projects we involved reached approx. 20,000 GWh

 Address initiatives for both loans and investments to conserve Natural capital, the foundation for all environmental, social, and economic spheres  Promote advanced efforts such as launching new loan product as world’s first attempt to incorporate natural capital evaluation into loan criteria  Through provision of trust products, support initiatives to conserve natural environment and endangered species and prevent erosion of natural capital from financial side

Contribution to conserve bountiful natural capital Exhibit at Eco-Products in Japan ► Support activities of “Association of National ► Since 2007 Trusts in Japan” through social contribution ► Explains economic donation trusts significance of ► Donation to acquire lands where endangered natural capital species live through introduction ► Promote “SuMi TRUST Fish Project” as part of of various activities “Support for the environment and living creatures” initiatives Support for citizen activities through charitable trusts ► Mandated as trustee for the first charitable trust in 1977 ► Support various charitable trusts including “Keidanren Nature Conservation Fund” and “The Suntory Fund for Bird Conservation”

 Proposed many ideas on environmentally friendly properties, since it published a measures to reflect environmental consideration in value of real estate in 2005  Support companies in environmentally friendly construction consulting by utilizing our wealth of experience in development of various real estate  Through promoting widespread use of environmentally friendly properties, we support realization of sustainable society as a pioneer in this market Supporting concept formation Environmentally friendly property consulting of Smart Towns and Cities ► To promote introduction of environmentally friendly ►Collaboration with Panasonic Corporation and property, support installation/adoption of energy- Fujisawa City to open smart town in spring 2014 saving systems and recycle systems in building ►SuMi TRUST Bank participated in creating project- ► Number of projects selected by MLIT*1 and METI*2 specific product plans for environmentally friendly housing loans Examples ►Community-wide comprehensive CO2 reduction efforts praised and selected by MLIT-led project Fujisawa Sustainable Smart Town

Hotel Okura Tokyo Shimane Bank’s Head Office *1 Ministry of Land, Infrastructure and Transport *2 Ministry of Economy, Trade, and Industry Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 39 Businesses that contribute to environment and society (4) -Responsible Investments-

 As a “Responsible Institutional Investor”, we seek to increase higher investment returns for clients over medium- to-long term through stewardship activities including engagement aimed to increase medium-to-long term corporate value and proxy votes  Actively involved in formulation of international standards in cooperation with UN organizations, foreign companies and NGOs Stewardship Activities Pioneer of Responsible Investment (SRI) Fund ►To encourage sustainable growth and increase ► Launched Japan’s first RI Fund in 2003 corporate value of investee companies, we ► Established Japan’s first Chinese SRI Fund in 2010 implement constructive engagement and appropriate ► Attracting attention in global investment community exercise of voting rights by development of green bonds and biodiversity ►Contribution to development of Japanese economy funds by meeting stewardship responsibility Our RI Investment trusts Process of Stewardship activities SRI Japan Open Biodiversity Fund for Raise question Exercise (Good Company) Supporting Companies Meeting through letter voting rights

Proxy voting Engagement (April to June 2017) (July 2016 to June 2017) Dissenting rate Meetings All Investees 12.1％ 440 Of which ％ clients 12.3 569 China Good Company World Bank Bond Fund

 Collaboration with regional financial institutions and local companies to realize initiatives for vitalizing local economy by utilizing strength and characteristics unique to trust bank  Robustly support initiatives promoted by government and local governments to address issues of depopulation and super-aging society

Support for introduction of PFI in public properties Support for vitalization of city centers in local cities ► Provided research for possible PFI implement- ► Supported realization of town deeply rooted ation and advisory services for Osaka University to local community by attracting tenants as Global Village Facilities Improvement Project trustor of Real estate administration trust

Osaka University Global Village Takamatsu Marugame Shopping Street

 Declared it as a top-management commitment to offer a workplace where the diversity and creativity of its employees are more fully utilized to add value to the organization and where employees can have pride and be highly motivated in fulfilling their missions  Address maintenance of workplace environment to achieve work-life balance Diversity & Inclusion Promotion of active participation by women ► Promote diversity & inclusion, which can be said as ► SuMi TRUST Bank to increase female employees in origin of business model of a trust bank, with speed, management positions at section manager level to and as a group 300 by Mar. 2020 ► Set themes of “Active participation of diversified Mar.17 By Mar. 20 individuals”, “enhancing work-life balance support system”, and “greater understanding of human GM 14 Increase female employees in rights and LGBT” *1 Section 232 management Manager Promotion of active participation of diverse Assistant positions at section human resources Manager 1,069 manager level to 300 Women, disabled persons, global human Certified for childrearing support and promoting resources diversity

Supporting work-life balance ►Certified by MHLW *2 as company supporting Work style reform, Supporting childcare/nursing childcare rearing care, promotion of male employees taking ►Received gold rating, the highest rating in Pride childcare leave Index, Japan’s first benchmark for corporate LGBT initiatives Encouraging greater understanding of human rights and LGBT issues

UN Principles for Responsible Investment The United Nations Global Compact UNEP Finance Initiative (UNEP FI) (UN-PRI) ► A code of conduct ► International network that encourages financial ► These principles require proposed by former institutions to take action to institutional investors UN Secretary-General preserve environment and and fund management Kofi Annan regarding to make development institutions to give human rights, labor, sustainable consideration to ESG environment, and anti- ► Signed in Oct. 2003 as first Japanese trust bank factors when making corruption ► Also became a member of investment decisions ► Signed in Jul. 2005 as working group of property ► Signed in May 2006 first Japanese bank finance since Jun. 2007 Business and Biodiversity Initiatives The Carbon Disclosure Project (CDP)

► Organization of ► Initiatives for institutional companies lead by investors and financial German Government institutions worldwide to that have joined forces urge companies to to protect biological disclose information diversity regarding greenhouse ► Signed in May 2008 Various initiatives that SuMi TRUST gas emissions together with 33 other Group participates ► Joined in Jan. 2007 companies worldwide

BSR (Business for Social Responsibility) Principles for Financial Action for 21st Century Equator Principles

► US based organization ► Guidelines on ► International guidelines to promote CSR and responsibilities and roles concerning project develop sustainable of financial institutions, finance to urge private- business strategies including banks and AM sector financial through collaboration companies to create institutions to take into with over 250 member sustainable society full consideration of companies globally ► Played central role in environmental and social ► Became member in establishment and signed impacts of projects Jan. 2010 in Dec. 2011 ► Signed in Feb. 2016 Copyright © 2018 SUMITOMO MITSUI TRUST HOLDINGS, INC. All rights reserved. 43