Mar. 10, 2010 Daiwa Investment Conference 2010

Daiwa Securities Group Business Strategy

Shigeharu , President and CEO Daiwa Securities Group Inc.

This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other “forward-looking”information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Group’s actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the industries in and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group. Contents

Current situation of Daiwa Securities Group after the dissolution of JV with SMFG ････ 3

Financial Summary ････ 4

Business Strategy

Retail ････ 6

Wholesale ････ 13

Investment ････ 20

Asset Management ････ 22

Entry into Banking Business ････ 24

2 Current situation of Daiwa Securities Group after the dissolution of JV with SMFG

FasterFaster decisiondecision makingmaking inin humanhuman andand managemanagementment resourcesresources allocatallocationion amongamong thethe GroupGroup companiescompanies

„„ UpgradeUpgrade thethe HongHong KongKong subsidiarysubsidiary toto thethe “second“second headhead quarters”quarters” status status toto strengthenstrengthen wholesalewholesale businessbusiness inin AsiaAsia

DissolutionDissolution ofof JVJV hashas positivepositive effecteffect onon wholesawholesalele operationsoperations

„„ DaiwaDaiwa SecuritiesSecurities CapitalCapital Markets’Markets’ pipeline pipeline hashas diversifieddiversified inin finafinancence dealsdeals ofof financialfinancial institutionsinstitutions andand corporatecorporate clientsclients

SolidSolid financialfinancial basebase andand ampleample liliquidityquidity havehave beenbeen maintainedmaintained foforr thethe futurefuture businessbusiness expansionexpansion

„„ ConsolidatedConsolidated totaltotal owners’owners’ equity equity：：JPYJPY 932.5bil932.5bil (end(end ofof Dec.Dec. 2009)2009) „„ TotalTotal portfolioportfolio ofof high-liquidityhigh-liquidity assetassets:s: JPYJPY 2,322.4bil2,322.4bil (e(endnd ofof Dec.Dec. 2009)2009)

RatingRating companiescompanies havehave moremore positivepositive viewsviews

„„ FitchFitch RatingsRatings hashas assignedassigned ““A-A- (negative) (negative) longlong-term-term foreignforeign andand locallocal currencycurrency IssuerIssuer DefaultDefault RatingRating””to” to DaiwaDaiwa SecuritiesSecurities CapitalCapital MaMarketsrkets (Nov.(Nov. 9,9, 2009)2009) „„ JCRJCR revisedrevised DaiwaDaiwa SecuritiesSecurities GroupGroup Inc.Inc. andand DaiwaDaiwa Securities’Securities’ rating rating ououtlooktlook fromfrom “A+“A+ (negative)”(negative)” to to “A+“A+ (stable)”(stable)” (Dec. (Dec. 28,28, 2009)2009) „„ R&IR&I revisedrevised DaiwaDaiwa SecuritiesSecurities GroupGroup IncInc.,., DaiwaDaiwa SecuritiesSecurities andand DaiwaDaiwa SecuriSecuritiesties CapitalCapital Markets’Markets’ rating rating outlookoutlook fromfrom “A“A (negative)”(negative)” to to “A“A (stable)”(stable)” (Feb. (Feb. 5,5, 2010)2010)

3 Financial Summary

4 Consolidated Financial Summary

FY2009 FY2008 % Change FY2009 % Change (Y mil) vs vs FY2008 1-3Q 1-3Q 1-3Q FY08 3Q 2Q 2Q FY09

Operating revenues 421,365 335,500 25.6% 183,615 105,631 73.8% 413,936

Net operating revenues 360,011 145,540 147.4% 165,509 87,137 89.9% 199,544

SG&A 271,897 261,346 4.0% 99,775 85,569 16.6% 343,270

Ordinary income 92,756 -113,226 ― 67,891 2,037 ― -141,150

Net income 46,227 -67,676 ― 26,366 1,991 ― -85,039

Total assets 14,873,191 15,113,175 14,873,191 16,129,373 14,182,579

Net assets 938,405 996,110 938,405 1,249,909 952,329

Shareholders' equity* 925,983 746,953 925,983 988,324 720,272

EPS (Y) 28.72 -50.27 15.08 1.15 -63.16

BPS (Y) 529.60 554.82 529.60 565.26 534.99

ROE (Annualized) 7.5% ― 11.0% 0.9% ―

* Shareholders’ equity = owners’ equity + valuation and translation adjustments

ROE (Annualized) 1-3Q 3Q

Daiwa Securities 9.3% 6.6% Daiwa Securities Capital Markets 9.2% 18.9% (consolidated) 5 Retail

6 Retail “Daiwa Consulting” Course ～Equity investment trust～

IncreaseIncrease agencyagency commissioncommission (recurring(recurring feefee fromfrom customercustomer assets)assets) throughthrough thethe assetasset gatheringgathering

SalesSales ofof EquityEquity InvestmentInvestment TrustsTrusts AgencAgencyy CommissionCommission TrendTrend ImageImage

（Y bil / Q） （Y bil / month）

800 6.0

600

4.0

400

2.0 200

0 0.0 4Q/09 4Q/10 4Q/11 1Q/07 2Q/07 3Q/07 4Q/07 1Q/08 2Q/08 3Q/08 4Q/08 1Q/09 2Q/09 3Q/09 Note: Include switching transaction between funds. 1Q/07 1Q/08 1Q/09 7 Retail “Daiwa Consulting” Course ～Equity～

ExpandExpand foreignforeign equityequity tradingtrading byby collaboratingcollaborating withwith thethe otherother GroupGroup companiescompanies

Foreign Equity Trading Volume Collaboration with Daiwa Securities Capital Markets

（Y bil / Q）

200 North America and others Brazil China, Hong Kong, India

150 DaiwaDaiwa SecuritiesSecurities Increase order flow

Value-added 100 information & DaiwaDaiwa SecuritiesSecurities trading infrastructure CapitalCapital MarketsMarkets

50

0

4Q/08 3Q/09 8 Retail “Daiwa Consulting” Course ～Foreign currency-denominated bonds～

ExpandExpand andand maintainmaintain stablestable salessales byby offeringoffering attractiveattractive productsproducts

Sales of Foreign Currency-denominated Bonds

（ Y bil / Q）

400

300

200

100

0

1Q/07 2Q/07 3Q/07 4Q/07 1Q/08 2Q/08 3Q/08 4Q/08 1Q/09 2Q/09 3Q/09 9 Retail Our Approach to Impact Investment

Vaccine Bonds Microfinance Bonds

Issuer: IFFIm Issuer: IFC Purpose: Raise funds in the capital markets to accelerate Purpose: Support for microfinance business with the funding available for health and immunization purpose of fostering economic independence by programmes in 70 of the developing countries providing small scale financial services to the poor around the world. segments. Issue date and amount: Mar. 19, 2008 JPY 20.8bil Issue date: Nov. 20, 2009 Feb. 20, 2009 JPY 40.4bil Issue amount: JPY 24.3bil Mar. 24, 2010 JPY 30.0bil (scheduled) THE WORLD GAVI Green World Bonds Immunization practice BANK by each country Financial Issuer: IBRD Support for vaccine management securing program Purpose: Support projects in the World Bank’s member countries that meet specific criteria for low-carbon project. Funding Investors Donator Issue date: Feb. 3, 2010 Investment Donation for up to in capital market 20 years Issue amount: JPY 9.5bil

World CO2L(“Cool”) Bond Water Bond

Issuer: IBRD Issuer: ADB Purpose: Indirectly participate in greenhouse gas reduction Purpose: Support for water project by developing countries

project as using emissions credit trading based on in Asia and the Pacific. the Kyoto Protocol. Issue date: Apr. 2010 (scheduled) Issue date: Jun. 26, 2008 Issue amount: TBD Issue amount: JPY 2.6bil

10 Retail “Daiwa Consulting” Course ～Wrap account service～

LeadLead marketmarket expansionexpansion asas aa pipioneeroneer ofof wrapwrap accountaccount serviceservice

Contract asset under management & Number of customers of Wrap Account Service Market Share in Wrap Account Service

(Y bil) (# of customers: 000)

400 Daiwa SMA Contract AUM (left) 60% Contract AUM Daiwa Fund Wrap Contract AUM (left) 20 # of accounts # of customers of wrap account (right)*

300 45% 15

200 30% 10

100 15% 5

0 0% 0 3/07* Total 6/07of Daiwa 9/07 SMA 12/07 and Daiwa 3/08 Fund 6/08 Wrap 9/08 customers 12/08 3/09 6/09 9/09 12/09 Source: Japan3/07 Securities 6/07 9/07 Investment 12/07 Advisers 3/08 Association 6/08 9/08; compiled 12/08 by 3/09 Daiwa 6/09 Securities 9/09 11

Retail “Daiwa Direct” Course

ExpandExpand serviceservice contentscontents toto attractattract activeactive investorsinvestors

“Daiwa Direct” Number of account Approach for expansion of active transactions

(# of account: 000) “ 1,500 Increase recognition of Daiwa 365FX” (FX margin trade on exchange)

¾ Conduct active promotion ¾ Offer discount commission campaign 1,000

500

Expand “Daiwa CFD” (Contract For Difference) service

0 ¾ Start domestic equities CFD (May 2010 (scheduled)) 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 6/09 12/09 ¾ Improve function (May 2010 (scheduled))

Expand product line-up and improve usability 9 Service through mobile phone Offer more 9 Enhance investment information active lne-up

12 Wholesale

13 Wholesale Expansion into Asia Market

„ Lead managed the world’s first Asian dollar bond (DBS bond), establishing Asian dollar bond market in offshore market in Singapore Beijing Representative Office Tokyo (1971) Est.: Sep. 1983 Head quarters „ Lead managed the world’s first Euro dollar bond by ADB (1978)

Seoul Branch „ Managed the world’s first Asian dollar CP by Corporation’s Est.: Dec. 1982 Hong Kong subsidiary (1980)

Shanghai Representative Office „ Participated in establishment of AFIC, and sent first president (1989) （Daiwa SMBC-SSC Securities） „ Lead managed overseas tranche for privatization of Singapore Airlines, Est.: Aug. 1986 Honk Kong D BS Land and Singapore Telecommunications in Singapore, and Tenaga Est.: Dec. 1970 National Berhad, Malaysian electric company and Petronas Gas in Malaysia Taiwan subsidiary Est.: Jul. 1993 „ Lead managed ADB Yen bond (JPY 30bil), named Dragon yen bond Mumbai subsidiary Hanoi Representative Office (1993) Est.: Feb. 2006 Est.: Oct. 2007 „ Lead managed Malaysian YTL Group’s IPO – the first-ever listing by Philippines subsidiary Bangkok Representative Office Asian company on TSE (1996) Est.: Mar. 1995 Est.: Jan. 2006 „ Cultivated offshore market in the Philippines, and lead managed Philippines offshore yen bond by Development Bank of the Philippines (1997) „ Lead managed SinoCom’s IPO on Hong Kong exchange Singapore subsidiary „ Lead managed POWL deals of PO/IPO including Ping An Insurance, Est.: Jun. 1972 Industrial and Commercial Bank of China Limited, Bank of China, China Tung Bank, China Construction Bank, China Merchants Bank, Shanghai Electric, Singapore Post and Chunghwa Telecom (Taiwan) etc. „ Lead managed China Boqi Environmental Solutions Technology’s IPO – the first–ever listing by a Chinese company on TSE (2007)

14 Wholesale Structural Change for Business Expansion in Asia

UpgradeUpgrade thethe HongHong KongKong subsidiarysubsidiary toto ““SecondSecond headhead quartersquarters”” statusstatus toto strengthstrength AsianAsian operationsoperations

„„AssignAssign fourfour seniorsenior executivesexecutives ledled byby thethe representativerepresentative deputydeputy presidentpresident „„PartialPartial transfertransfer ofof heaheadquartersdquarters functionsfunctions suchsuch asas managementmanagement planning,planning, fromfrom TokyoTokyo toto HongHong KongKong „„StationStation globalglobal headhead ofof equiequityty salessales andand co-globalco-global headhead ofof IBIB divisiondivision inin HongHong KongKong

IncreaseIncrease personnelpersonnel StrengthenStrengthen capitalcapital

„„ MarketMarket division:division: Increase Increase apapprox.prox. 300300 staffstaff inin AsianAsian „„AllocateAllocate approx.approx. JPYJPY 1100bil00bil capitalcapital intointo equity and derivative business equity and derivative business overseasoverseas locationslocations „„ IBIB division: division: Increase Increase approx.approx. 100100 staffstaff inin underwritingunderwriting andand M&AM&A businessbusiness * Increase approx. 70 staff in middle and back office

## ofof staffstaff inin AsiaAsia andand OceaniaOceania Approx. 1,120 TotalTotal capitalcapital forfor overseasoverseas locations*locations* Approx. JPY 190bil

Approx. 650 Approx. JPY 90bil x1.7 x2.1

Sep. 09 Mar. 12 (target) Sep. 09 FY2010 ConsiderConsider toto setset upup thethe AsiaAsia AdvisoryAdvisory BoardBoard „„InviteInvite locallocal influentialinfluential peoplepeople asas ourour advisorsadvisors ObtainObtain adviceadvice andand suggestisuggestionon forfor ourour AsianAsian strategiesstrategies

* Includes only overseas business operated by Daiwa Securities Capital Markets 15 Wholesale Business Expansion in Asia - Enhance Asian Equity Business -

－－ 33 yearyear targettarget －－

(Market(Market division)division) SupplySupply powerpower (IB(IB division)division)

TOP5TOP5 AsianAsian equityequity brokerbroker DistributionDistribution TOP10TOP10 AsiaAsia ECMECM LeagueLeague tabletable powerpower

StrengthenStrengthen MarketMarket anandd IBIB divisiondivision simultaneouslysimultaneously toto harnessharness synergeticsynergetic effecteffect asas earlyearly asas possiblepossible

（Y bil) 60 TargetTarget revenuerevenue 50 ImageImage ofof AsiaAsia OceaniaOceania revenuerevenue ofof AsianAsian businessbusiness 40 strategy:strategy: JPYJPY 53bil53bil 30

20

10

0 (FY) 2006 2007 2008 Note: ECM league table：Asia excluding Japan and Australia ECM （Thomson Financial) ResultsResults

16 Wholesale Deals in Asia

Major lead manager deals (including joint lead issues)

Date Deals Type Amount Date Deals Type Amount

China High Precision Tong Yang Life Insurance Nov. 09 IPO US$ 148mil Oct. 09 IPO 340bil won Automation Company

Nov. 09 Hongrun Construction Bond 500mil RMB Oct. 09 Industrial Bank of Korea Bond Y 26.2bil China Korea

May. 09 China Automation Group PO US$ 37mil Sep. 09 Korea Development Bank Bond Y 30.0bil

May. 08 China Taisan IPO US$ 42mil Jan. 08 Hyundai Capital Services Bond Y 47.0bil

Oct. 09 Patel Engineering PO US$ 75mil May. 08 The Kingdom of Thailand Bond Y 55.0bil India Thailand

Feb. 10 Republic of the Philippines Bond Y 100.0bil Jul. 09 Republic of Indonesia Bond Y 35.0bil Philippines Indonesia

17 Wholesale Investment Banking Deals

Major lead manager deals (including joint lead issues) ＆ Major M&A publicly announced deals in 2H FY09

Equity Offerings (including CB) Straight Bonds INDUSTRY Y 100.0bil Mitsubishi UFJ Financial Group Global public offering Y 1,070.0bil Kirin Holdings Total Y 100.0bil Sumitomo Financial Group Global public offering Y 1,009.4bil Mitsubishi Heavy Industries Total Y 100.0bil

T&D Holdings Public offering Y 124.0bil CORPORATION Y 70.0bil

NEC Global public offering Y 123.6bil Y 50.0bil

Mazda Motor Corporation Primary & Secondary offering Y 98.0bil Coca-Cola WEST Total Y 50.0bil

Chuo Mitsui Trust Holdings Total Y 43.0bil

Nissan Financial Service Y 40.0bil Other Bonds Central Japan Railway Company Y 40.0bil TEPCO Y 35.0bil United Mexican States Samurai bond Y 150.0bil Corporation Y 30.0bil Nederland Samurai bond Total Y 69.3bil Tohoku Electric Power Y 30.0bil Australia and New Zealand Banking Group Samurai bond Total Y 60.3bil Republic of Colombia Samurai bond Y 45.0bil Agency Bonds Republic of Poland Samurai bond Total Y 44.8bil Japan Finance Corporation Total Y 90.0bil Microfinance Bond （IFC）Australian dollar-denominated bond Y 25.1bil Japan Housing Finance Agency Total Y 66.6bil

„ The Japan Housing Finance Agency Secured Pass-through Bonds No.S-18 Y 150.0bil (Issue) Y 42.0bil (Underwriting) Structured Finance „ The Japan Housing Finance Agency Secured Pass-through Bonds No.31 Y 71.0bil (Issue) Y 20.0bil (Underwriting)

„ Acquisition of Kionix, Inc. by Rohm (Advisor to Rohm)

M&A „ Sales of all shares and loans of am/pm Japan Co., Ltd by Rex Holdings to Family Mart (Advisor to Rex Holdings) „ TOB for Jupiter Telecommunications by (Tender offer agent) 18 Wholesale Approaches in M&A Operation

Offer M&A advisory services through the global platform – Japan, Europe, the US and Asia –

Manchester Frankfurt London Paris Warsaw Madrid Chicago Zurich Beijing Osaka New York Barcelona Milan Seoul Lyon San Francisco Charlotte Shanghai Tokyo Hong Kong Taipei Bangkok Singapore

Daiwa Securities Capital Markets’ domestic network Daiwa Securities Capital Markets’ Asia network

Sagent Advisors’ network

Close Brothers Corporate Finance’s network

19 Investment

20 Reorganization of Principal Investment Business

December 31, 2009： Daiwa Securities Group acquired all shares of Daiwa Securities SMBC.

February 1, 2010： Existing operations of present Daiwa SMBC-PI was transferred to a new successor company. Former Daiwa SMBC-PI allocated 40% of the successor company’s shares to SMBC. The successor company was named Daiwa Securities SMBC Principal Investments Co. Ltd. Former Daiwa SMBC-PI changed its name to Daiwa PI Partners Co. Ltd.

＜Before＞ Daiwa Securities ＜Reference＞ Daiwa Securities SMBC PI Investment Amount SMFG Group Inc. (Y bil) 60% 40% 500

Daiwa Securities SMBC 400 100% 300 Daiwa SMBC-PI

200

＜After＞ Daiwa Securities SMBC 100 Group 100% 60% 40% 0 Daiwa Securities Capital Markets 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09 PE & PIPEs 270 265 258 265 234 223 224 220 92 100% Monetary claims 69 85 87 90 90 77 74 69 62 (successor) Real estate 54 76 74 55 48 44 44 42 37 Daiwa PI Partners Total 397 430 424 414 377 347 342 331 191 Daiwa SMBC-PI 21 Asset Management

22 Asset Management Daiwa Asset Management & Daiwa SB Investments

Assets Under Management Accumulated Net Inflow from Apr. 2009 to Jan. 2010 (Y bil) (Y bil)

20,000 Daiwa AM（Bond funds) 1,200 Daiwa AM（Equity funds) Total net inflow of Daiwa Securities Group’s 17.5% Daiwa SB Investments（ Investment trusts） two asset management companies

Daiwa SB Investments（ Investment advisory） 1,000 Daiwa Securities Group share*（ right ） 17.0% 15,000 800

16.5% 600

Company A 16.0% 10,000 400

15.5% 200

Company B

5,000 15.0% 0 Mar. 2009 Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. ▲200 14.5%

0 ▲400 14.0% Source: The Investment and Trust Association * Daiwa Asset12/07 Management 3/08 (Bond 6/08funds + Equity 9/08 funds) 12/08＋Daiwa SB 3/09 Investments 6/09 (Investment 9/09 trusts) 12/09

23 Entry into Banking Business

‹‹ OfferOffer servicesservices throughthrough DaiwaDaiwa SecuritiesSecurities asas anan agency,agency, leveragingleveraging collaboration collaboration betweenbetween bankbank andand brokerbroker ‹‹ OfferOffer high-yieldhigh-yield depositdeposit toto customerscustomers withwith low-costlow-cost managementmanagement byby useuse ofof InternetInternet andand bankingbanking agencyagency ‹‹ ManageManage fundsfunds withwith middle-riskmiddle-risk fixedfixed incomeincome securitiessecurities

‹ Provide an instrument to support wealth building, rather than just for bill payment ¾ Saving deposit and time deposit with high yield Products & service Products & service ¾ Offer automatic fund transfer and settlement services between the customers’ bank account and account at Daiwa Securities

¾ High net worth clients preferring deposit accounts and Daiwa Securities clients Target client Target client ¾ Fund pooled for purchasing securities products, i.e. securities firm’s MRF or bank’s saving deposit

‹ Make the fullest use of banking agency ¾ Utilize Daiwa Securities’ branches as banking agency in soliciting accounts opening ChannelChannel && promotipromotioonn ‹ Develop Internet banking ¾ Develop Internet banking without branch office or sales person

¾ Deposit will be managed with middle risk in financial market, mainly in fixed income and short-term FundFund mamananagegemmeentnt products etc. ¾ No loan business (may consider in the future)

Year Preparation for banking business (Daiwa Securities Group Inc.) Preparation for banking agency business (Daiwa Securities) 2009 Apr. Begin consideration of entering banking business Apr. Start consultations with Daiwa Securities Group Inc. Oct. Set up department for preparing to start banking business Make a press release on entry into banking operation 2010 Apr. Establish a subsidiary company for preparing to set up a bank (scheduled) Oct. Appl y for preliminary examination (provisional) Dec. Establish bank (change of registration from the preparing subsidiary Dec. Apply for approval of banking agency business status (provisional) (provisional) Apply for banking license (provisional) 2011 Start banking business (pro visional) Start banking agency business (provisional) 24 Daiwa Securities Group Inc. Investor Relations TEL: 03-5555-1300 FAX: 03-5555-0661 E-mail: [email protected] URL: http://www.daiwa-grp.jp/ir/english/