Corporate Profile & Business Strategy. March 2018

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Giles Chase
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1 Corporate Profile & Business Strategy March 218

2 1 Contents Company Overview Business Results New Management Plan New Age s Flag Bearer 5 Supplementary Material * Unless otherwise specified, the numerical data we quote here were all compiled as consolidated figures of the Tokai Tokyo Financial Holdings, Inc.

3 2 Company Overview Profile and History Corporate Profile Company Name: Tokai Tokyo Financial Holdings, Inc. (TSE, NSE:8616) Representative: Tateaki Ishida, President & CEO Consolidated Net Assets: billion yen Client Assets under Custody of Tokai Tokyo Securities: 4,87.3 billion yen (Retail Client Assets: 2,89.1 billion yen) Market Capitalization: billion yen Number of Employees: Holding Company 184 Consolidated Basis: 3,427 (As of December 31, 217) Group History Current group configuration was formed in October 2 through merger between Tokyo Securities and Tokai Maruman Securities Group company of the Nikko Securities (a) Tokyo Securities Tokai Maruman Securities Group company of the Tokai Bank(b) Tokai Tokyo Securities Oct. 7 YM Apr. 9 Tokai Tokyo Financial Holdings was established Nov. 8 Hamagin TT Apr. 1 May 1 Nishi- Nippon City TT Relocated HQ of TTSC to Nagoya City Apr. 1 TTSC merged with Toyota Financial Services Sec. Oct. 12 Senshu Ikeda TT March. 17 Acquired ETERNAL Jan. 17 Hokuhoku TT Apr. 17 Acquired Takagi Sec. Apr. 17 Tochigi Bank invested in Utsunomiya Securities Sep. 17 Acquired Pinnacle * Currently, (a) SMBC Nikko Securities, (b) Bank of Tokyo-Mitsubishi UFJ

4 3 Company Overview AUC and Shareholder Information Asset Under Custody (Billion Yen) 7, 6, 5, 4, 3, 2, JV Securities Total Takagi Securities Tokai Tokyo Securities 1, Mar-9 Mar-1 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Sep-17 Distribution of Shareholders Foreign Investors 21.3% Other Domestic Institutions 1.2% Securities Houses 2.6% Treasury Stock 6.7% Individuals & Others 2.7% Financial Institutions 38.5% Major Shareholders No. of shares (K) Ownership Ratio (%) - "Schroders Group"(*) 18, Japan Trustee Services Bank, Ltd. (Trust Account) 12, The Bank of Tokyo-Mitsubishi UFJ, Ltd. 12, The Master Trust Bank of Japan, Ltd. (Trust Account) 1, Mitsui Sumitomo Insurance Co., Ltd. 9, Toyota Financial Services Corporation 8, The Bank of Yokohama, Ltd. 7, Nippon Life Insurance Company 5, J. P. Morgan Chase Bank , Sumitomo Mitsui Trust Bank, Limited 4, Meiji Yasuda Life Insurance Company 4, (As of September 3, 217) * The data of the shareholder ranking No. 1 through 1 were identical in substance to what we had publicized for disclosure purpose. However, the Change Report Pertaining to the Report of Possession of Large Volume submitted on November 7, 217 Schroder group show that their 4 companies altogether owned 7.55% of Tokai Tokyo Financial Holdings, Inc. as of October 31, 217

5 4 Company Overview Group Structure Group Structure Tokai Tokyo Financial Holdings, Inc. a holding company listed on TSE and NSE Overseas Business Alliance Philip Tokai Tokyo Investment Management All Nippon Asset Management Ace Securities Utsunomiya Securities Hokuhoku Tokai Tokyo Securities Senshu Ikeda Tokai Tokyo Securities Nishi-Nippon City Tokai Tokyo Securities Hamagin Tokai Tokyo Securities YM Securities Tokai Tokyo Global Investments Tokai Tokyo Investment Management Singapore Tokai Tokyo Securities (USA) Tokai Tokyo Securities Europe Tokai Tokyo Securities (Asia) Pinnacle Eternal Tokai Tokyo Business Service Tokai Tokyo Service Tokai Tokyo Academy Tokai Tokyo Research Institute Tokai Tokyo Wealth Consulting Tokai Tokyo Investment Tokai Tokyo Asset Management Takagi Securities Tokai Tokyo Securities* Guotai Junan Securities (China) Mirae Asset Daewoo Securities (Korea) Phillip Securities (Singapore) First Metro Investment Corporation (Philippines) The Bank of East Asia (Hong Kong) Stifel Financial Corp. (USA) Bualuang Securities (Thailand) Kenanga Investment Bank (Malaysia) Bao Viet Securities (Vietnam) Consolidated Subsidiaries * In April 21, Tokai Tokyo Securities Co., Ltd. and Toyota Financial Services Securities Co., Ltd. merged. Equity Method Affiliates as of December 31, 217

Company Overview Characteristics Solid Business Base in

1 in Value of Shipment of Manufactured Goods - Linear

Regional Jet (MRJ) Alliance & Platform Advanced

Brokers Broker Business Sound Management - Outside

Committee - 3 Defense Lines - Wealth Management (Orque

6 Company Overview Characteristics Solid Business Base in Chubu Area Chubu Area - No.1 in Value of Shipment of Manufactured Goods - Linear Bullet Train - Hydrogen Fuel Cell Vehicle - Mitsubishi Regional Jet (MRJ) Alliance & Platform Advanced Business Model - 6 Joint Ventures with Regional Banks - Brokers Broker Business Sound Management - Outside Directors - Company with an Audit & Supervisory Committee - 3 Defense Lines - Wealth Management (Orque d or) - Retail (MONEQUE) - Market (Foreign Stocks, Structured Notes) - Investment Banking (Debt, IPOs) 5

6 Company Overview Financial Summary Financial Results [Quarterly] and Nikkei 225 Nikkei 225 (Yen) 24, 2, 16, Operating revenue, Ordinary income (Million Yen) 35, 3, 25, 2, 15, 1, 5, 11.

7 6 Company Overview Financial Summary Financial Results [Quarterly] and Nikkei 225 Nikkei 225 (Yen) 24, 2, 16, Operating revenue, Ordinary income (Million Yen) 35, 3, 25, 2, 15, 1, 5, billion gain of negative goodwill by acquiring Takagi Securities Operating Revenue(LHS) Ordinary Income(LHS) Net Income(RHS) 12, 8, Net income (Million Yen) 17,5 15, 12,5 1, 7,5 5, 2,5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY212 FY213 FY214 FY215 FY216 FY217 Recorded positive ordinary income non stop for 29 consecutive quarters

8 7 Business Results Major Initiatives and Project Progress Wealth Management FYE March 216 FYE March 217 Asset Management Brokerage Brokerage Brokerage Ace Sec Utsunomiya Sec Insurance Hokuhoku TT Sec One Stop Channel FYE March 218 Brokerage Takagi Sec M&A Advisory

9 27/4 28/4 29/4 21/4 211/4 212/4 213/4 214/4 215/4 216/4 217/4 8 27/4 28/4 29/4 21/4 211/4 212/4 213/4 214/4 215/4 216/4 217/4 217/1 Business Results Comparison Study Market Cap Trend in comparison with Nomura and Daiwa (Million Yen) 5,35, 1. Market Cap Multiple 4,35, 3,35, Nomura 野村 6. 2,35, Daiwa 大和 11. 1,35, 35, , 3, Tokai Tokyo 21. 対大和倍率 Daiwa/Tokai Tokyo 25, 2, 26. 対野村倍率 Nomura/Tokai Tokyo 15, 31. 1, 5,

10 9 Business Results Financial Summary and Performance in Comparison with Peers FY217 9 months Operating revenue Company FY217 9 months Net Income Company Amounts (million yen) Amounts (million yen) Y on Y 1 Nomura *1 1,46, % 2 Daiwa 527, % 3 SMBC Nikko 292,8 16.9% 4 Mitsubishi UFJ 282,8 (1.9%) 5 Mizuho 279,213 (14.4%) 6 Tokai Tokyo 63, % 7 Okasan 61, % 8 SMBC Friend 23,599 (24.4%) 9 Ichiyoshi 19,75 3.8% 1 IwaiCosmo 15, % Y on Y 1 Nomura *1 196, % 2 Daiwa 73,998 (9.4%) 3 SMBC Nikko 49, % 4 Mitsubishi UFJ 31,184 (13.7%) 5 Mizuho 24,59 (86.4%) 6 Tokai Tokyo 21, % 7 Okasan 4,266 (46.6%) 8 Ichiyoshi 3, % 9 IwaiCosmo 3, % 1 Kyokuto 2, % : Bank-affiliated companies *1 US GAAP based Note: Excluding online brokers Tokai Tokyo Financial Holdings prepared the table compiling from publicly disclosed data (Yen) (%) (%) 2.3 Tokai Tokyo Nomura Daiwa EPS ROE Dividend Yield FY212 FY213 FY214 FY215 FY216 FY217 2Q *EPS and ROE is annualized by multiplying 2 to actual semi-annual figures.

11 New Management Plan New Age s Flag Bearer 5 Overall Picture New Age s Flag Bearer 5 Further Strengthen Operating Base and Achieve Growth Pursuit Strategic Themes Humanity Orque d or Organization Growth by M&A MONEQUE Matured Asset management Professionality Unique development of retail strategy Defense Mechanism Pension and insurance service Banking service Market & Investment Bank Great Platform Overseas market expansion Expansion to Metropolis Productivity Revolution 1

12 New Management Plan New Age s Flag Bearer 5 5 Giants 11 Nomura Daiwa SMBC Nikko Mitsubishi UFJ Morgan Mizuho Tokai Tokyo Financial Group New Age s Flag Bearer 5

Supplementary Material Solid Business Base in Chubu Area Chubu Area consists of four prefectures,

Value of Shipments of Manufactured Goods Tokyo Area 17% Others 46% 214 Aichi 14% Gifu 2% Mie 4%

Osaka Area consists of Osaka, Kyoto, Hyogo and Nara.

1 share in the 1 (out of 24) industries MRJ Transportation Equipment (39%-Toyota, Suzuki, Yamaha

13 Supplementary Material Solid Business Base in Chubu Area Chubu Area consists of four prefectures, Aichi, Mie, Gifu and Shizuoka. Value of Shipments of Manufactured Goods Tokyo Area 17% Others 46% 214 Aichi 14% Gifu 2% Mie 4% Shizuoka 5% Osaka Area 12% Chubu Area 25% Tokyo Area consists of Tokyo, Kanagawa, Saitama and Chiba. Osaka Area consists of Osaka, Kyoto, Hyogo and Nara. Ongoing 3 Big Projects in Chubu Area Aichi has been No.1 Since 1977 Aichi has No.1 share in the 1 (out of 24) industries MRJ Transportation Equipment (39%-Toyota, Suzuki, Yamaha Motor, Denso, Aishin, Mitsubishi Heavy Industry) Chuo Shinkansen ( ) ( )operated by Superconducting Maglev System Hydrogen fuel cell vehicle Production Machinery (11%-YAMAZAKI MAZAK, Okuma) Business oriented Machinery (16%-Brother Industries) 12

sales activity for corporate and retail Restructuring outlets MONEQUE FinTech - MoneyForward - KALAIS - Life

14 Supplementary Material Pursue Unique Segment-Specific Strategy in Retail Operation Orque d or Nagoya Tokyo Kansai After-death care service Sales activities at affiliates Asset analysis Matured Segment IFA Integrated sales activity for corporate and retail Restructuring outlets MONEQUE FinTech - MoneyForward - KALAIS - Life Plan Simulation Sony Bank Insurance Terrace (by ETERNAL) Online brokers Mutual Fund Counter (by Takagi Sec.) 13

15 14 Supplementary Material Alliance with Regional Banks Top 2 Regional Banks (total deposits) (As of September 3, 217) Bank Date of Bank Name Deposits JV Name Commencing (Trillion Yen) Operation 1 Concordia Financial Group 14.8 Hamagin Tokai Tokyo Sec Nov-28 2 Mebuki Financial Group Fukuoka Financial Group Chiba Bank Hokuhoku Financial Group 1.7 Hokuhoku Tokai Tokyo Sec Jan Shizuoka Bank Yamaguchi Financial Group 8.6 YM Securities Sec Oct-27 8 Kyushu Financial Group Nishi-Nippon Financial Holding 7.7 Nishi-Nippon City Tokai Tokyo Sec May-21 1 The 77 Bank Hiroshima Bank Kyoto Bank Gunma Bank The Hachijuni Bank Chugoku Bank The Juroku Bank The Toho Bank Iyo Bank Senshu Ikeda Holdings 4.8 Senshu Ikeda Tokai Tokyo Sec Sep Ogaki Kyoritsu Bank 4.8 Total Bank Deposits 49 Trillion Yen - Tochigi Bank 2.6 Utsunomiya Sec Apr-217 : Banks that have subsidiary securities companies Denotes Tokai Tokyo Financial Holdings alliance partners

16 Supplementary Material Alliance with Regional Banks Mar-8 Sep-8 Mar-9 Sep-9 Mar-1 Sep-1 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep ,4 1,2 1, Assets under Custody - from JVs (6 Entities) (Billion Yen) 1, ,244 1,47 1,24 1, ,444 (Million Yen) 7, 6, 5, 4, 3, 2, 1, -1, (Billion Yen) 1,4 1,2 1, Income Contribution from JV Affiliates Income and Other Benefits Realized from Transactions with JVs Gain on Investments in Partnership Proportion to Consolidated Ordinary Income FY28 FY29 FY21 FY211 FY212 FY213 FY214 FY215 FY216 FY217 1H Assets under Custody by Product 1H 2H 1H 2H 1H 2H 1H FY214 FY215 FY216 FY217 Others Investment Trusts Foreign & Structured Bonds Domestic Bonds Foreign Stocks Domestic Stocks (%)

17 Supplementary Material New Management Plan FinTech Information Education Security brokerage Asset management (IT AI) MONEQUE Trust bank Nishi-Nippon City TT Sec. Hamagin TT Sec. YM Sec. Securities companies IFAs Insurance Consulting Call center Local banks Ikeda Senshu TT Sec. Utsunomiya Sec. Hokuhoku TT Sec. Platform alliances (53 entities as of Sep. 217) Securities companies Local financial firms Mutual Fund Counter (by Takagi Sec.) M&A Overseas Operation High-networth Investment Bank Provided functions Strengthen functions New functions 16

18 Supplementary Material Area Coverage [Brokerage Business] 17 Nationwide network Tokai Tokyo Securities : 68 operating outlets Takagi Securities : 14 operating outlets JV Securities : 75 operating outlets Tohoku 1 outlets Senshu Ikeda TT (7 operating outlets) Chugoku/ Shikoku 4 outlets Kinki 3 outlets Koushin etsu 2 outlets Hokuhoku TT (4 operating outlets) Utsunomiya Securities (6 operating outlets) YM Securities (22 operating outlets) Kyushu 1 outlets Nishi-Nippon City TT (19 operating outlets) Tokai 44 outlets (35 in Aichi Pref.) Kanto 13 outlets (8 in Tokyo) Hamagin TT (17 operating outlets) ETERNAL (Insurance Terrace 72 outlets) (As of December 31, 217)

19 18 Supplementary Material Overseas Network Tokai Tokyo Securities Europe Guotai Junan Securities Mirae Asset Daewoo Securities Stifel Financial Corp. Tokai Tokyo Financial Holdings Bualuang Securities Kenanga Investment Bank Tokai Tokyo Securities (Asia) Bank of East Asia Tokai Tokyo Securities (USA) Phillip Securities Phillip Tokai Tokyo Investment Management Tokai Tokyo Investment Management Singapore Bao Viet Securities Tokai Tokyo Global Investments First Metro Investment Corporation Headquarters Overseas Subsidiary Overseas Affiliate Business Partnership Business Partnership with Capital Injection (As of December 31, 217)

20 Inquiries to be directed to: Corporate Communications Department TEL: FAX: Effective April 1, 29, the Company spun off its financial instrument operation and Tokai Tokyo Security Co., Ltd. (former Tokai Tokyo Securities Spin-off Preparation Co., Ltd.) took it over. The Group (Tokai Tokyo Financial Group) at the same time shifted to a holding company system. Effective the same date, the Company and Tokai Tokyo Securities Spin-off Preparation Co., Ltd. changed their corporate names to Tokai Tokyo Financial Holdings, Inc., and Tokai Tokyo Securities Co., Ltd. respectively. The result for the fiscal year ended on March 31, 29 or any earlier date account for the operation of the former Tokai Tokyo Securities Co., Ltd. under then existing organizational structure. This material is intended to provide information regarding the Company s most recent operational result and NOT to solicit investment in securities issued by the Company. 19

Joint IR Meeting 2008

Joint IR Meeting 2008 Financial Condition of City of Kitakyushu Kitakyushu Airport Kitakyushu Science and Research Park Feb 16, 2008 ~ Feb 27, 2008 Contact: Budget Section, Finance Department, Finance