A Focus on Strategies Special Feature 1 the Management Integration with Chuo Mitsui Trust Group

A Focus on Strategies Special Feature 1 The Management Integration with Chuo Mitsui Trust Group

1. The Post-Integration Vision

Through the integration, the new trust bank group will their corporate clients including those of Mitsui Group and be able to further strengthen its high levels of expertise as a Sumitomo Group. There is not more than 25% overlap trust bank developed over the past decades by the Chuo between the two companies’ top 100 corporate borrowers. Mitsui Trust Holdings, Inc. (CMTH) and the STB Groups. This is evidence that our complimentary client base is also a At the same time, CMTH and STB believe that the new trust very effective combination of portfolios in the sense of reduc- bank group will possess the status and capabilities as one of ing concentration risk. Japan’s leading financial institutions, in addition to its leading Second, regarding our retail client base, looking at our role in the trust bank sector. regional distribution you can confirm that Sumitomo Trust has a strong base in the Kansai area, while Chuo Mitsui Trust Reinforcing and combining client bases and is strong in the Tokyo metropolitan and Chubu areas, making branch networks it clear that our combination produces a very balanced retail First, the two groups have limited overlap between their client base. client bases, and possess broad business relationships with

• Retail Client Base (Trillions of yen)

(as of September 30, 2009) Chuo Mitsui Trust Sumitomo Trust Total

Total retail depositary asset balance (Note) 9.83 100.0% 9.95 100.0% 19.78 100.0%

Tokyo metropolitan area 5.27 53.7% 2.91 29.2% 8.18 41.4%

Kansai area 1.56 15.9% 4.31 43.4% 5.87 29.7%

Chubu area 1.76 18.0% 1.10 11.1% 2.86 14.6%

Other 1.21 12.4% 1.62 16.3% 2.83 14.4%

Note: Total depositary assets: Deposits (including foreign currency deposits), loan trusts, money trusts, investment trusts, annuity insurances, Japanese government bonds

The new trust bank group will be better able to offer well as the Kansai and Chubu areas. products and services to a broad base of individual clients By leveraging the overseas networks of the CMTH and through the creation of a balanced branch network through- STB Groups, the new trust bank group will be able to offer out Japan, with a focus on the Tokyo metropolitan area, as global financial services to its clients in Japan and overseas.

• Domestic Network (Excluding Domestic Sub-branches)

(as of September 30, 2009) Chuo Mitsui Trust Sumitomo Trust Total Overlapping Branches (Note)

Metro Tokyo 33 49.3% 17 33.3% 50 42.4% 11

Kansai Area 10 14.9% 18 35.3% 28 23.7% 7

Chubu Area 13 19.4% 6 11.8% 19 16.1% 5

Other Areas 11 16.4% 10 19.6% 21 17.8% 6

Total 67 100.0% 51 100.0% 118 100.0% 29

Note: Reorganization of branch networks will be considered later

10 E Message CEO

• Overseas Network (Excluding Overseas Representative Offices)

(as of September 30, 2009) Chuo Mitsui Trust Sumitomo Trust Strategies on Focus A New York Branch Chuo Mitsui Investments, Inc. USA Sumitomo Trust and Banking Co. (U.S.A.) (Asset management business) (Asset management and global custody business) London Branch Chuo Mitsui Trust International Ltd. Europe Sumitomo Trust and Banking (Luxembourg) S.A. (Securities business) (Global custody business) Singapore Branch, Shanghai Branch Chuo Mitsui Investments, Singapore Pte. Ltd. STB Cons (Asset management business) ulting (China) Co., Ltd. Asia (Consulting business) Chuo Mitsui Investments Hong Kong Limited The Sumitomo Trust Finance (H.K.) Limited (Asset management business) (Finance business, asset management business) uiesRpr oenneReport Governance Report Business Strengthening high levels of expertise and sonal financial assets “from savings to investments.” expanding operations Assets under custody will total over 181 trillion yen, the Assets under management, including corporate pension largest balance in Japan, and the new trust bank group will funds and investment trusts, will total approximately 58 tril- also be one of Japan’s leading firms in trust-bank-related busi- lion yen through the integration. The new trust bank group nesses such as real estate and stock transfer agency services. will become Japan’s largest asset management group, and With approximately 61 trillion yen of total employable will be able to provide its clients, ranging from individual to funds, the new trust bank group will be one of Japan’s core institutional investors, with an array of global asset manage- financial intermediaries and will be better able to smoothly ment services. provide credit and to support sustainable economic growth by In addition, the new trust bank group will become one of appropriately meeting the financing needs of its individual Japan’s top three banks in terms of sales of investment trusts and corporate clients. and annuity insurance to individual clients, with a combined The new trust bank group, through the integration, will balance of approximately 4 trillion yen. As a result, the new aim to optimally allocate its expanded management resources trust bank group will become one of Japan’s leading asset in order to offer superior products and services across its busi- management consulting groups, promoting the shift of per- ness fields.

• The Largest Scale and the Highest Status in Japan (as of September 30, 2009) Assets under Management Approx. 58 trillion yen No.1 among Japanese Bank and Securities Company Groups Balance of Corporate Pension Funds Approx. 12 trillion yen No.1 among Trust Banks ikManagement Risk Section/ Financial Lead Manager for Corporate Pension Funds 2,033 funds No.1 among Trust Banks Assets under Custody Approx. 181 trillion yen No.1 among Japanese Bank Groups Real Estate Business-Related Revenue Approx. 25 billion yen No.1 among Trust Banks Stock Transfer Agency Services / Corporate Clients 2,887 No.2 among Trust Banks Balance of Investment Trusts, Annuity Insurance and Other Sales Approx. 4 trillion yen No.3 among Japanese banks Number of Will Trusts 18,620 No.2 among Trust Banks Lending Business / Total Loan Balance Approx. 20 trillion yen No.5 among Japanese banks Lending Business / Balance of Loans to Individuals Approx. 5 trillion yen No.5 among Japanese banks T ai Information Basic STB

Sumitomo Trust and Banking 2010 Annual Report 11 2. Management Integration Overview

The management integration will be accomplished which are STB, The Chuo Mitsui Trust and Banking through a holding company structure. From the perspective of Company, Limited and Chuo Mitsui Asset Trust and expediting the management integration, the new trust bank Banking Company, Limited, into a single trust bank group will utilize CMTH, which is currently the holding com- (“Combined Trust Bank”) in order to further improve their pany of Chuo Mitsui Trust Group, as its holding company. expertise and comprehensive capability. (The Second Step) On April 1, 2011, CMTH and STB plan to conduct the From the perspective of creating a management structure management integration through a share exchange between appropriate for Japan’s largest asset management group, CMTH and STB and to position CMTH, planned to be Integrated Holding Company will explore ways to reorganize renamed Sumitomo Mitsui Trust Holdings, Inc., as a new its asset management subsidiaries by function and thus to holding company (“Integrated Holding Company”). (The directly oversee their management. First Step) Other group companies of Integrated Holding Company On April 1, 2012, Integrated Holding Company will will also be examined for possible reorganization in light of plan to merge the three trust banks operating beneath it, the objectives of the management integration.

3. Management Integration Through a Holding Company Structure (The First Step)

CMTH and STB will move ahead with the first stage of conducting the management integration through a holding company structure, based on the following basic policies.

1. Target date for the management integration 6. Representative directors of April 1, 2011. Integrated Holding Company 2. Integration ratio (share exchange ratio) Integrated Holding Company’s chairman is expected to come The integration ratio (share exchange ratio) will be determined from STB Group, and its president is expected to come from by CMTH and STB based on their discussions, each consider- the CMTH Group. ing the valuation and advice of their financial advisors. 7. Directors of Integrated Holding Company 3. Stock listing of the Integrated Holding Company At the time of the integration, the number of directors of Integrated Holding Company is planned to be listed on the Integrated Holding Company from CMTH Group and STB Tokyo Stock Exchange, the Osaka Securities Exchange and the Group is planned to be equal. Nagoya Stock Exchange. 8. Governance and organizational system of 4. Name of the Integrated Holding Company Integrated Holding Company The planned English name is “Sumitomo Mitsui Trust CMTH and STB will confer with one another to reach a deci- Holdings, Inc.” (tentative). sion on appropriate governance and organizational systems for the new trust bank group. 5. Headquarters location of Integrated Holding Company The planned headquarters location of the Integrated Holding Company is an office building now under construction in Chiyoda-ku, Tokyo, which is being jointly developed by STB and other companies. STB’s current Tokyo headquarters in Chiyoda-ku, Tokyo is expected to be used as the headquarters of the Integrated Holding Company until the new building is ready.

12 E Message CEO A Focus on Strategies Special Feature 1 The Management Integration with Chuo Mitsui Trust Group

4. Merging the Three Trust Banks Under Integrated Holding Company (The Second Step) ou nStrategies on Focus A CMTH and STB will move ahead with the second step of merging the three trust banks under Integrated Holding Company, based on the following basic policies.

1. Target date for the merger of the three trust banks 5. Representative directors of Combined Trust Bank April 1, 2012. Combined Trust Bank’s chairman is expected to come from 2. Name of Combined Trust Bank the CMTH Group and its president is expected to come from The planned English name is “Sumitomo Mitsui Trust Bank, the STB Group. Ltd.” (tentative). 6. Directors of Combined Trust Bank

3. Surviving company for Combined Trust Bank At the time of the merger, the number of directors Report Governance of Report Business STB is planned to be the surviving company. Combined Trust Bank from CMTH Group and STB Group is planned to be equal. 4. Headquarters location of Combined Trust Bank The planned headquarters location of Combined Trust Bank is an office building now under construction in Chiyoda-ku, Tokyo, which is being jointly developed by STB and other companies.

• Outline of Management Integration (Planned) The First Step Chuo Mitsui Trust Holdings, Inc. Share Exchange The Sumitomo Trust and Banking Co., Ltd. On April 1, 2011 (planned)

33% 33% Asset Management Asset Management Banking Subsidiaries Subsidiaries Subsidiaries

The Chuo Chuo Mitsui Chuo Mitsui Chuo Mitsui Japan STB Research Mitsui Trust Asset Trust Asset Other Asset Nikko Asset STB Asset Capital Trustee Institute Other and Banking and Banking Management Management Management Management Company Services Co., Ltd. Subsidiaries Company, Company, Company, Subsidiaries Co., Ltd. Co., Ltd. Limited Bank, Ltd. (think tank) Limited Limited Limited ikManagement Risk Section/ Financial Other Subsidiaries

Sumitomo Mitsui Trust Holdings, Inc. (planned)

The Second Step Planned to be a direct- Asset Management Subsidiaries Consolidated investment -Will be reorganized by function subsidiary of Subsidiary -Planned to be direct-investment subsidiaries of Information Basic STB Merger of Integrated Sumitomo Integrated Holding Company Holding Mitsui Trust 3 Trust Company Holdings, Ltd. Banks (planned) On April 1, 2012 The Chuo Chuo Mitsui The Chuo Mitsui STB Japan Chuo Mitsui (planned) Mitsui Trust Asset Trust Sumitomo Other Asset Asset Nikko Asset STB Asset Research Trustee Capital and Banking and Banking Trust and Management Management Management Management Institute Services Company Company, Company, Banking Subsidiaries Company, Co., Ltd. Co., Ltd. Co., Ltd. Bank, Ltd. Limited Limited Limited Co., Ltd. Limited (think tank)

Other Other Other Subsidiaries Subsidiaries Subsidiaries

Sumitomo Trust and Banking 2010 Annual Report 13