2019 Annual Report

2019 ANNUAL REPORT (April 1, 2018~March 31, 2019) Please note that this material is an English translation of the Japanese original for reference purposes only without any warranty as to its accuracy or completeness. Please be advised that there may be some disparities due to such things as differences in nuance that are inherent to the difference in languages although the English translation is prepared to mirror the Japanese original as accurately as possible. This book is a disclosure material (explanation materials for business and property) which is prepared based on Article 21 of the Banking Act and Article 19 (2) of the Ordinance for Enforcement of the Banking Act. Contents Corporate Management Philosophy 2 Core Values of SMBC Trust Bank 2 Management Vision 4 Top Message 4 Medium-Term Management Plan 5 Bank Outline 6 Company Profile 6 Major Shareholders 6 History 6 Officers 7 Office Information 8 Organization Chart 1 Matters concerning Bank Agent of SMBC Trust Bank 11 Matters concerning Agent of SMBC Trust Bank for Trust Agreements 17 Our attitude towards improving management of small and medium enterprises and vitalizing communities 17 Business Guidance 18 Our Business 18 Business Overview 28 Corporate Infrastructure 3 Corporate Governance System 3 Customer-Oriented Business Operation 31 Risk Management System 32 Compliance System 36 Internal Audit System 37 Designated Dispute Resolution Institutions 37 Human Resource Strategy 38 Towards Sustainable Development of Society 4 Financial Information 43 Financial Data 44 Disclosure Items based on Pillar of Basel 67 Confirmation 78 SMBC TRUST BANK ANNUAL REPORT 2019 1 Corporate Management Philosophy Philosophy Corporate Management Core Values of SMBC Trust Bank SMBC Trust Bank has established the following core values to promote the Company’s “Customer First” approach in all our dealings. We will uphold these Management Vision Bank Outline values across all departments of the Company alongside the “Five Values” of SMBC Group. Corporate Management Philosophy Seven core values to follow SMBC Trust performs our business with the following “Corporate Management Philosophy”. Passion Business Guidance Corporate We aim to be a company trusted by our stakeholders including the society by placing importance on sound company Respect management based on the spirit of legal compliance Infrastructure We provide value-added unique services Excellence to our customers and evolve with them With due respect to diversity, we create a workplace that encourages employees Synergy Financial Data to thoroughly use individual abilities as professionals while fully participating in teamwork built on reliability and responsibility Trust Disclosure Items based on Pillar Disclosure Iconic Accountability of Basel 2 SMBC TRUST BANK ANNUAL REPORT 2019 Philosophy Corporate Management Management Vision Bank Outline The Company’s core values have been distilled into SMBC Trust Bank’s core values as an seven key elements, each beginning with one letter of our “PRESTIA” brand, that together represent extension of SMBC Group’s “Five Values” our corporate management philosophy and guiding With the “Five Values” of SMBC principles that form the way we think and act on. Group at their foundation, the core values of SMBC Trust Bank are aimed at fostering a unique, vibrant, We approach our work with passion and pride as employees of SMBC Trust Bank. and productive corporate culture. We pursue high quality in our work through SMBC Group SMBC TB positive thinking and actions. “Five Values” “Core Values” Business Guidance We appreciate every encounter and show respect and gratitude to everyone we work P with. We learn from and help each other grow individually. A R We offer a sophisticated customer experience. We provide products and services that Infrastructure Corporate exceed customer expectations and enhance the value of SMBC Trust Bank. We develop supportive relationships across I E teams and pursue synergies. We share common commitment and achieve our goals. Financial Data We maintain high standards of care and improve our expertise as trusted professionals. We T S demonstrate integrity in all dealings with customers, and think and act in the customer’s best interests. Disclosure Items based on Pillar Disclosure We reﬁne and build on our strength to ensure that SMBC Trust Bank remains an iconic brand and customers’ ﬁrst choice. We take responsibility for our actions as ambassadors of SMBC Trust Bank. We use empowerment to make good judgments in all situations. of Basel SMBC TRUST BANK ANNUAL REPORT 2019 3 Management Vision Philosophy Corporate Management Top Message We sincerely thank for your continued support and patronage. SMBC Trust Bank started in October 2013 with Management Vision predecessor bank Societe General Private Banking (Japan) brought into the SMBC Group. In November 2015, we took a further step forward by integrating Citibank’s retail banking business in Japan and launched a new brand “PRESTIA”, under which we now offer a broad range of solutions as a trust bank, utilizing our three advantages: “trusts”, “foreign currency”, and “real estate.” Bank Outline Having one of the highest life expectancy rates in the world, Japan is entering into the age of “a 100 year-life”. Customers’ needs for investment, asset management, and inheritance are to further grow, going forward. Our experienced professionals continue to strive to meet our customers’ varied demands with attentive Business Guidance Corporate support and tailor-made products and solutions. As part of our services, we opened currency exchange counters under the name of “PRESTIA EXCHANGE” in April 2018, and, with the launch of a new computer system in July 2018, our customers are now able to use the ATMs of Mitsui Sumitomo Banking Corporation as if they are the ATMs of SMBC Trust Bank. Furthermore, our efforts to provide one- Infrastructure stop shopping of comprehensive financial services of the SMBC Group is now in full swing by housing a branch of Sumitomo Mitsui Banking Corporation, SMBC Nikko Securities, and SMBC Trust Bank in the same building. we continue to conduct co-location of the branches with Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities in order to Financial Data enhance our capability of delivering the comprehensive financial services of the SMBC Group at one -stop. We are now progressing as per our fiscal 2017- 2019 Medium-Term Management Plan. Based on the plan, we are to make our utmost to become a trust bank fully dependable by our customers. Disclosure Items based on Pillar Disclosure We look forward to your continued support and business for years to come. Fumiaki Kurahara President and CEO June 2019 of Basel 4 SMBC TRUST BANK ANNUAL REPORT 2019 Philosophy Corporate Management Medium-Term Management Plan SMBC Trust Bank, a member of SMBC Group, has a three-year medium-term management plan for the fiscal 2017- 2019 period in place. In order to strengthen our business from a longer-range perspective, this plan has been developed based on our five-year vision set in consideration of the expected business Management Vision conditions and changes in operating environment. The medium-term management plan describes what we work on during the first three years to achieve the vision. 1. Vision Our five-year vision is as follows: Bank Outline Become a trust bank that can contribute to customers both inside and outside of SMBC Group by using our three edges (strengths): trusts, foreign currency, and real estate. 2. Management Goals Business Guidance The management goals that we aim to achieve at the end of the three-year period are as follows: (1) Establish a unique trust bank as the “edge of SMBC Group” by devoting the largest amount of resources to the three strengths (2) Complete the ongoing cost restructuring by fundamentally changing the staff structure and cutting non- personnel expenses without sanctuary Infrastructure Corporate 3. Key Strategies Our key strategies based on the vision and management goals are as follows: (1) Strengthening of business with our three edges as the pillars Financial Data Trusts Increase assets under management (AUM) and create a unique identity through innovative business initiatives Foreign currency Become a major player in foreign-currency deposit offerings both at home and abroad Real estate Establish a solid revenue base by real estate business diversification (2) Strong promotion of the cost restructuring Items based on Pillar Disclosure (3) Steady conversion to a new IT system In alignment with these strategies, we will take various measures to improve profitability and strengthen our business foundation. of Basel SMBC TRUST BANK ANNUAL REPORT 2019 5 Bank Outline Philosophy Corporate Management Company Profile (as of June 28, 2019) Company Name : SMBC Trust Bank Ltd. Date of Establishment : February 25, 1986 Capital : 87.5 billion yen Management Vision SMBC Group SMBC Trust is a member of SMBC Group. SMBC Group provides high-value-added financial History Bank Outline services to its customers through commercial banks, trust banks, securities companies, and other group companies. 1986/2 Chemical Trust Bank, the Company’s earliest Holding Company predecessor, is established as an indirect wholly- owned subsidiary of Chemical Bank. 1996/11 Chemical Trust Bank is renamed Chase Trust Bank Bank following a merger and renaming of Chemical Bank. Business Guidance Corporate 2002/6 Societe Generale acquires Chase Trust Bank to form SG Private Banking (Japan) Ltd.,

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