Review For the Year Ending in March 2010 Presentation

Transcription

1 Aiming to be The Premier House Review For the Year Ending in March 2010 Presentation June 2010 Tokai Tokyo Financial Holdings, Inc.

2 Contents Overview of Tokai Tokyo Financial Holdings Company Overview FY09 Result Analysis Overview of Financial Result Supporting Factors for Performance Primary Measures Taken Strategic Targets and Progress Report TT Revolution Compliance and Risk management Reference Data Contact Comparison with Peers 1 * Unless otherwise stated, all the numeric data are presented on consolidated basis.

3 Overview of Tokai Tokyo Financial Holdings

4 Company Overview Profile Company Name: Date of Incorporation: June 19, 1929 Capital: 36 Billion Yen Number of Employees: Number of Employees on Consolidated Basis: 2,194 (As of March 31, 2010) Distribution of Shareholders Other Domestic Institutions 14.13% Foreign Investors 11.10% Securities Houses 0.98% Tokai Tokyo Financial Holdings, Inc 57 (excluding 4 on temporary contract) Treasury Stock 0.33% Personal Investors and others 27.82% Major Shareholders Shareholder's name Number of Shares held (in thousand) 1 Mitsui Sumitomo Insurance Co., Ltd. 28, Japan Trustee Services Bank, Ltd. (Trust Account) % 21, Toyota Financial Services Corporation 14, The Bank of Tokyo-Mitsubishi UFJ, Ltd. 12, The Master Trust Bank of Japan, Ltd. (Trust Account) 10, Meiji Yasuda Life Insurance Company 5, The Chuo Mitsui Trust and Banking Company, Ltd. The Chase Manhattan Bank NA London SL Omnibus Account Japan Trustee Services Bank, Ltd. (Trust Account for The Sumitomo Trust and Banking Co., Ltd. retirement benefit trust account for Toyota Motor Corporation) 4, , , State Street Bank and Trust Company , (As of March 31, 2010) 3 (As of March 31, 2010) Financial Institutions 45.64% Domestic Subsidiaries: 9 Domestic Affiliates: 3 Overseas Subsidiaries: 3

5 FY09 Result Analysis

6 Overview of Financial Results (Consolidated) Total Revenues, Ordinary Income 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Total Revenues Ordinary Income Income Before Tax Net Income Income before Tax, Net Income 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, ,000 FY2005 FY2006 FY2007 FY2008 FY2009-5,000 5

7 Supporting Factors for Performance Growth of Investment Trust Continuous High Level Sales of Foreign Currency Bonds and Structured Bonds Expanding Foreign Stocks Recovery of Dealing Growth of Customer Related Trading Revenue Cost Control 6

8 Primary Measures Taken Business Portfolio Reform Focusing on Investment Banking and the Result Expansion of Retail Business and Strategies Undertaken Regional Distribution of Customers 7

9 Comparison with Peers Profitability Ranked by Ordinary Income Comparative Trend of Stock Price in Relation to General Stock Price Change Stock Indices 8

10 Strategic Targets and Progress Report Where are we now?

11 TT Revolution Innovation Jump Up 5 (Apr 2006~Mar 2009) TT Revolution (Apr 2009~Mar 2012) Reform corporate governance/ corporate culture Reform the business portfolio/ the business model Reform the network Reform products and services Reform employee duty assignment and productivity Productivity Growth Potential Customer Loyalty Communication Super Community House 10

12 TT Revolution ~Key Factors for Success~ Productivity Growth Potential Customer Loyalty Communication Super Community House 11

13 Productivity Improvement Productivity Booster Prioritize Young Employees Branch Network Optimization Focus on High Wealth Clientele Product Lineup and Information Provision Awaken Inactive Accounts 12

14 Growth Strategy Blue Ocean Strategy Alliance with Regional Banks Partnership with Toyota Group (Integration with Toyota FS Securities and Subsequent Game Planning ) M&A 13

15 Reference Data

16 Group Structure Effective April 1st 2009, the group moved into holding company structure with the following purposes. Separation of the daily routine of security house operation from the group management duty to expedite the decision making process Holding company structure intended to secure mobility and flexibility to implement expeditiously regional strategy and alliance strategy The group picture under holding company structure Holding Company (Listed Company) Tokai Tokyo Financial Holdings, Inc. Overseas Business Alliance Nishi-Nippon City Tokai Tokyo Securities Hamagin Tokai Tokyo Securities YM Securities Tokai Tokyo Securities (USA) Tokai Tokyo Securities Europe Tokai Tokyo Securities (Asia) Tokai Tokyo Business Service Tokai Tokyo Service Tokai Tokyo research Center Tokai Tokyo Investment Tokai Tokyo-Sumishin Wealth Partners & Consulting Tokai Tokyo Finance & Real Estate Tokai Tokyo Investment Management Utsunomiya Securities Tokai Tokyo Securities Guotai Junan Securities (China) Daewoo Securities (Korea) Saigon Securities (Vietnam) Equity Method Affiliates Consolidated Subsidiaries * In April 2010, Tokai Tokyo Securities Co., Ltd. and Toyota Financial Services Securities Co., Ltd. were merged. 15

17 Tokai Tokyo Securities Network 70 Nation-wide 3 Overseas As of May 17, 2010 Koushin etsu /Hokuriku 4 branches Hokkaido/Tohoku 2 branches Kinki 4 branches Kanto 13 branches Chugoku/Shikoku 4 branches Including 7 in Tokyo Hamagin Tokai Tokyo Securities 9 branches YM Securities Co., Ltd. Tokai 39 branches 13 branches Including 29 in Aichi Kyushu 4 branches Nishi-Nippon City Tokai Tokyo Securities Started operation with 3 branches 16

18 Overview of Financial Results (Consolidated) FY2005 FY2006 FY2007 FY2008 FY2009 Year on Year April 1, 2005 March 31, 2006 April 1, 2006 March 31, 2007 April 1, 2007 March 31, 2008 April 1, 2008 March 31, 2009 April 1, 2009 March 31, 2010 Previous year = 100 Total Revenues 71,776 63,765 63,152 43,627 58, Interest expense 960 1,364 2,147 1,977 1, Net Revenues 70,816 62,400 61,004 41,649 57, SG&A Expenses 44,272 44,403 46,931 42,546 46, Operating Income 26,543 17,997 14, ,516 - Ordinary Income 27,191 18,723 14, ,008 - (Total Revenues = 100) Income Before Tax 26,225 18,536 15,508 2,439 11, (Total Revenues = 100) Net Income 22,085 10,668 9,025 2,482 7, (Total Revenues = 100) Income Tax - current & deferred 4,078 7,843 6, ,618-17

19 Trading Profit and Loss (Consolidated) FY2005 FY2006 FY2007 FY2008 FY2009 Year on Year April 1, 2005 April 1, 2006 April 1, 2007 April 1, 2008 April 1, 2009 Previous year March 31, 2006 March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010 = 100 Stocks 11,252 6,613 7,659 1,358 9, (Foreign Stocks) 5,265 4,740 6, , (Stock Proprietary trading) N.A. 1,623 1, , Bonds & Currencies 5,316 6,968 8,353 14,638 17, (Foreign Bonds & Structured Bonds) 4,845 6,084 7,804 13,470 15, (Bond Proprietary Trading) N.A Trading Profit and Loss 16,568 13,581 16,013 15,996 26, * Numeric data in parentheses account only for the operation of Tokai Tokyo Securities Co., Ltd. and they were extracted from the internal managerial record of the same. 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Stocks Bonds & Currencies Trading Profit and Loss FY2005 FY2006 FY2007 FY2008 FY

20 Growth of Investment Trust Investment Trust Sales 75,000 70,000 65,000 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Monthly Investment Trust Sales FY2008 FY2009 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 FY2007 FY Q 1-4Q 1-4Q 1-4Q= Q=100 Total Sales 453, , , * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

21 Continuous High Level Sales of Foreign Currency Bonds and Structured Bonds FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 Bonds in foreign currencies 100, ,989 92, US Dollar 3,160 6,537 2, Australian Dollar 26,844 27,317 10, New Zealand Dollar 58,131 14,660 23, Euro 1,127 2, Canadian Dollar British Pound 11, South African Rand 0 113,767 28, Turkish Lira 0 0 6, Brasilian Real , Structured bonds 137, , , Interest rate and foreign exchange-linked Interest rate and foreign exchange-linked, publicly offered 26,393 16,663 23, , Equity-linked 27,650 64,067 89, Equity-linked, publicly offered 83,729 40,923 30, Total sales 235, , , , , , , ,000 80,000 60,000 40,000 20,000 0 Bonds in foreign currencies Structured bonds Total sales 1-4Q 1-4Q 1-4Q FY2007 FY2008 FY , , , , , ,000 50, * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

22 Expanding Foreign Stocks Revenues from foreign stocks 7,000 6,000 5,000 FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY Q=100 FY Q=100 Revenues from foreign stocks 6, , ,000 3,000 2,000 1, Q 1-4Q 1-4Q FY2007 FY2008 FY * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

23 Recovery of Dealing Earnings of Proprietary Dealing Division 3,500 3,000 Stock Proprietary Trading Bond Proprietary Trading Proprietary Trading Profit/Loss 2,500 FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 Stock Proprietary Trading 1, , Bond Proprietary Trading Proprietary Trading Profit/Loss 1, , ,000 1,500 1, Q 1-4Q 1-4Q FY2007 FY2008 FY * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

24 Growth of Customer Related Trading Revenue Corporate Assets Division/Corporate Products Division Revenues FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 Corporate Assets Division 3,294 2,566 2, Domestic stocks 1, Bonds 1,429 1,217 1, Government bonds, , Structured, exchangeable bonds Investment trusts Derivatives Others Corporate Products Division 3,252 4,307 8, * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

25 Cost Control Selling, General and Administrative Expenses (Consolidated) FY2005 FY2006 FY2007 FY2008 FY2009 Year on Year April 1, 2005 March 31, 2006 April 1, 2006 March 31, 2007 April 1, 2007 March 31, 2008 April 1, 2008 March 31, 2009 April 1, 2009 March 31, 2010 Previous year = 100 Trading-related expenses 5,776 6,769 7,391 6,617 7, Personnel expenses 27,669 25,437 24,942 20,460 24, Occupancy and rental 5,074 5,461 5,758 5,909 5, Operational expenses 3,200 3,524 4,489 5,415 4, Depreciation expenses 832 1,596 2,566 2,456 2, Others 1,718 1,615 1,782 1,687 1, Total SG&A expenses 44,272 44,403 46,931 42,546 46, ,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 FY2005 FY2006 FY2007 FY2008 FY2009 Others Depreciation expenses Operational expenses Occupancy and rental Personnel expenses Trading-related expenses 24

26 Performance Review of Units Total Revenue Retail Business Unit Investment Banking Business Unit FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 FY2007 FY Q 1-4Q 1-4Q 1-4Q= Q=100 49,954 32,023 39, % ,995 9,214 17, % Revenues by Business Unit 25 Retail 70% Investment Banking Others 30% 25% Dealing 5% * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd. (Tokai Tokyo Securities Co., Ltd. started profit center management practice in September 2005, dividing its operation internally into two companies.) Number of Employees by Business Unit Investment Banking 20% 377 Retail 80% 1,500 Assets under Custody by Business Unit (100 million yen) Investment Banking 33% 11,514 Retail 67% 23,373

27 Revenue Trend of Investment Banking Revenues by Division FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 Investment Banking B.U. 9,995 9,214 17, Corporate Assets & Corporate Products Division 6,547 6,874 10, Corporate Solutions Division Dealing Division 1, , Stock Proprietary Trading 1, , Bond Proprietary Trading Others 1,649 1,047 3, * Beginning FY2009, the figures of former Corporate Asset Division include those of Corporate Product Division as well. 12,000 10,000 8,000 6,000 4,000 2,000 0 Corporate Assets & Corporate Products Corporate Solutions Dealing Stock Proprietary Trading Bond Proprietary Trading 1-4Q 1-4Q 1-4Q FY2007 FY2008 FY * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

28 Revenue Trend of Retail by Product Group 60,000 50,000 Revenue by Product Other Instruments Domestic Stocks FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 Total Revenue 49,955 32,023 40, Domestic Stocks 17,158 10,110 8, Other Instruments % 34.3% 31.6% 21.8% 32,796 21,910 31, % 65.7% 68.4% 78.2% Foreign Stocks 4, , Bonds Foreign Bonds 3,718 5,130 5, Investment Trusts 12,678 5,282 13, Investment Trusts Agency 6,376 4,139 3, Foreign Exchange 1,617 4,134 4, Insurance 2,335 1, Others 1, ,000 30,000 20,000 10,000 0 FY2007 FY2008 FY Q 1-4Q 1-4Q FY2007 FY2008 FY Q 1-4Q 1-4Q The relative weight of domestic stocks and other instruments 21.8% 31.6% 34.3% 78.2% Domestic Stocks Other Instruments 68.4% 65.7% 27 0% 20% 40% 60% 80% 100% * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

29 Retail Trend Per Customer Segment Number of Customers Customer Segment FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 FY2007 FY Q 1-4Q 1-4Q 1-4Q= Q=100 High Wealth 1, , % 0.5% 0.2% 0.4% Wealth 15,620 8,839 12, % 3.8% 2.2% 3.2% Middle 107,968 84,122 95, % 25.9% 20.7% 24.5% General 290, , , % 69.8% 76.9% 71.9% Total 416, , , Number of Customers High Wealth 0% General 72% Wealth 3% Middle 25% High Wealth: Holding over 100 million yen in assets under custody Wealth: 30 million to 100 million yen Middle: 5 million to 30 million yen General: less than 5 million yen Assets under Custody FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 High Wealth 396, , , % 14.2% 10.5% 12.3% Wealth 743, , , % 26.7% 21.8% 25.3% Middle 1,293, ,900 1,117, % 46.5% 50.1% 48.1% General 349, , , % 12.6% 17.7% 14.3% Total 2,782,988 1,911,115 2,324, Assets under Custody General 14% Middle 48% High Wealth 12% Wealth 25% Commissions FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 High Wealth 6,172 2,916 2, % 12.5% 9.0% 7.1% Wealth 15,662 8,827 10, % 31.8% 27.3% 27.5% Middle 22,873 16,609 21, % 46.5% 51.4% 54.4% General 4,493 3,970 4, % 9.1% 12.3% 11.0% Total 49,201 32,323 39, Commissions High General Wealth 11% 7% Middle 54% Wealth 28% 28 * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

30 Revenue and Number of Accounts Attained by Each Region, Retail Revenue by Region FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 Eastern Japan 15,405 9,040 9, % 31.1% 28.1% 25.1% Central Japan 24,242 16,967 21, % 48.9% 52.7% 54.4% Western Japan 9,912 6,211 8, % 20.0% 19.3% 20.4% Total 49,559 32,218 39, Number of Accounts by Region (Accounts) FY2007 FY2008 FY2009 FY09/FY07 FY09/FY08 1-4Q 1-4Q 1-4Q FY2007 FY Q= Q=100 Eastern Japan 122,855 93,716 93, % 30.6% 24.9% 24.8% Central Japan 201, , , % 50.2% 55.9% 56.3% Western Japan 77,161 72,570 70, % 19.2% 19.3% 18.9% Total 401, , , ,000 50,000 40,000 30,000 20,000 10,000 0 (Accounts) 450, , , , , , , ,000 50,000 0 Revenue by Region Western Japan Central Japan Eastern Japan 1-4Q 1-4Q 1-4Q FY2007 FY2008 FY2009 Number of Accounts by Region Western Japan Central Japan Eastern Japan 1-4Q 1-4Q 1-4Q FY2007 FY2008 FY * Numeric data on this slide were extracted from the internal managerial record of Tokai Tokyo Securities Co., Ltd.

31 Table of Ranking (Ordinary Income) *1 US GAAP Based *2 Non-Consolidated Figures (100 million yen) FY2009(April 1, 2009-March 31, 2010) Securities Company Total Revenues Ordinary Income Net Income 1 Nomura Holdings *1 13, , Daiwa Securities Group 5, , Nikko Cordial Securities *2 1, Mitsubishi UFJ Securities 3, Mizuho Securities 3, , SMBC Friend Securities SBI Securities Tokai Tokyo Financial Holdings Matsui Securities Okasan Securities Group Kyokuto Securities Mizuho Investors Securities Rakuten Securities Holdings kabu.com Securities Monex Group :Bank-affiliated companies :Internet-based Operation (Tokai Tokyo Financial Holdings prepared the table compiling from publicly disclosed financial data of each company) 30

32 Trend of Stock Price 260 Trend of Stock Price of Each Peer (Levels are expressed in relative indices with each stock price of March 31, 2009 as 100) 150 Nikkei Stock Average (Levels are expressed in relative indices with the Nikkei Stock Average of March 31, 2009 as 100) Tokai Tokyo Nomura Daiwa Mizuho Okasan /31/09 06/30/09 09/30/09 12/31/09 03/31/ /31/09 06/30/09 09/30/09 12/31/09 03/31/10 (Tokai Tokyo Financial Holdings prepared both graphs) 31

33 Comparison; Stock Price and Related Figures Tokai Tokyo Nomura Holdings Daiwa Securiteis Group Mizuho Investors Okasan Securities Group Ichiyoshi 6-Company Average Stock Price (24/5/2010) PER PBR EPS Dividend Yield Dividend * The figures of Nomura Holdings are US GAAP based * EPS is the figure covering the Fiscal Year ending in March 2010 * PER=(Stock Price As of May 24, 2010) EPS * Dividend is the projected annual dividend for the Fiscal Year ending in March 2010 * Dividend Yield=(Projected Annual Dividend for the Fiscal Year ending in March 2010) (Stock Price as of the End of March 2010) (Tokai Tokyo Financial Holdings prepared the data based on each company s publicized information and those derived from QUICK) 32

34 TT Revolution ~ What We Aim to Accomplish ~ TT Revolution Aim to elevate ourselves to a financial service group built around securities house that can weather adversity and outperform others in savage competition Assets under Custody: Aim to double the current asset size to 6 trillion yen or more including both consolidated companies and equity method affiliates of the Group Financial Performance Target: Aim to hit ROE of 10% or higher on consolidated basis 33

35 Assets under Custody (100 million yen) 65,000 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Others Investment Trusts Bonds Stocks Three-year Business Plan Target FY2005 FY2006 FY2007 FY2008 FY2009 FY

36 Return on Equity (%) Three-year Business Plan Target FY2005 FY2006 FY2007 FY2008 FY2009 FY

37 Prioritize Young Employee Distribution of Employees in Retail by the Length of Service (As of Sept. 2009) Employees joined in % Joined in % * Data excludes branch managers and section managers Joined in 2006 or before 50% Joined in % [Employees joined in 2006 or before] 50% [Those joined in 2007 or later] 50% 36 * All the data here cover Tokai Tokyo Securities alone.

38 Streamlining Retail Network Improved service capability by consolidating the retail network; Tokyo Metropolis Area: Mita Branch consolidated into Tokyo Sales Department in September 2009, and both Shimokitazawa and Den en Chofu Branches likewise into Shibuya Branch in November 2009 Nagoya Area: Relocation and renaming of Sakae Branch It It will be located in the LACHIC Building in Sakae Area of Nagoya under the new branch name of Nagoya Branch absorbing Nagoya Chuo Branch effective May 15,

39 Stepped-up Efforts toward High Wealth Clients Ensured higher service capability dedicated to the wealthy clients by the new Main Office Sales Unit Deployed the service by Premier Executive Advisors focusing on the wealthy clients Active use of the expertise of Tokai Tokyo SWP Consulting Sponsoring various seminars and events aimed to capture interest of the Clients Launching The Premier Membership service 38

40 Upscale Product Portfolio and Enhance Information Distribution Put up Asian Equity Marketing Department and US & European Equity Marketing Department Expand International Network Started Tokai Tokyo Internet Broadcasting Featuring wealth of information covering market, Tokai Tokyo s products, and useful guide to investors 39

41 Blue Ocean Strategy Top 10 Japanese Regional Banks Ranked by Deposit Balance March 31, 2009 (100 million yen) Rank Name of Institution Deposit Balance 1 The Bank of Yokohama 101,582 2 Fukuoka Financial Group 99,326 3 Hokuhoku Financial Group 85,906 4 The Chiba Bank 85,013 5 The Shizuoka Bank 71,008 6 Yamaguchi Financial Group 68,442 7 Joyo Bank 65,475 8 Sapporo Hokuyo Holdings 64,455 9 The Nishi-Nippon City Bank 62, Bank of Kyoto 55,279 :Partner Financial Institutions (Tokai Tokyo Financial Holdings prepared the table compiling from publicly disclosed financial data of each company) 40

42 Alliance with Regional Banks ~ Rationale ~ Sourcing Transaction Flow Capture Return as a Shareholder Cost Sharing 41

43 Progress on Alliances YM Securities Co., Ltd. In January 2010, opened Higashi Hiroshima Branch and its satellite outlet, Momiji Saijo Plaza to reinforce operation in Hiroshima market Referral-induced new account expansion helped continuing increase in Asset under Custody Assets under custody (March 31, 2010) Accounts Branches Employees 196,740 26, Hamagin Tokai Tokyo Securities Co., Ltd. The New Medium Term Management Plan started in April 2010 Odawara Branch opened in October 2009 as the second jointly-run branch. Planning to establish alliance infrastructure through the network of 15 branches by the end of 2012, which operate in concert with the bank s 31 branches across Kanagawa Ken. Bolstering the success rate of customer referral activity by the use of Yokohama Bank s EBM (event driven marketing ). Assets under custody (March 31, 2010) Accounts Branches Employees 174,992 30,

44 Nishi-Nippon City Tokai Tokyo Securities ~ Profile ~ Started its operation with 3 operating offices including two newly set up and another taken over from Tokai Tokyo Securities Co., Ltd. by way of company split Profile Headquarters Hakata Ekimae, Hakata Ku, Fukuoka City, Fukuoka Prefecture Branch Network Main Operating Office & Kitakyushu Branch, (Both Newly opened) Tenjin Branch (Taking over the operation of Fukuoka Branch of Tokai Tokyo Securities Co., Ltd.) Capital 1,575 Million Shareholders Nishi-Nippon City Bank 60%, Tokai Tokyo Financial Holdings 40% Executives and Employees 71 Date of Incorporation September 30,

45 The Merger between Tokai Tokyo Securities with Toyota FS Securities, and the Subsequent Strategy Toyota Financial Services Securities Employee: 145 Customer Base: Approx. 110 Thousand Accounts Assets under Custody: Approx. 560 Billion Branch Network: 5 Branches Merger (As of the end of March 2010) Tokai Tokyo Securities Employee: 2,412 Customer Base: Approx. 510 Thousand Accounts Assets under Custody: Approx. 4 4 Trillion Branch Network: 70 Branches Toyota Business Unit 44

46 The Merger between Tokai Tokyo Securities with Toyota FS Securities, and the Subsequent Strategy Deploying the unique business model Approaching the employees of Toyota group and its related companies with product like Tsumitate, a monthly accumulative purchase of Investment Trust Certificate with automatic fund deduction from their personal bank accounts and other products fitting to this specific clientele segment Drive marketing toward new car buyers via auto dealers as intermediaries with the giveaway of some selected fund products for personal investment and other sales promotional ideas Make the most of Toyota Brand Awareness Acquisition of a new customer base that includes Toyota group employees Business expansion of corporate sector by strengthening the relationship with various Toyota group companies Effective use of Branch Network Higher-caliber operational network for Mikawa-region market to be made possible through the synergy effect of combining Toyota FS Securities network and Tokai Tokyo Securities Premier-Salon in *Mikawa region now under consideration * Mikawa is is the region where Toyota group companies and their employees residences are concentrated. 45

47 Five Key Success Factors Customer Loyalty We conducted major customer survey six times in fiscal 2009 We use the survey result to identify the service and product we must offer to secure customer loyalty, not just for short term customer satisfaction but for never ending process of service capability improvement. Communication With a view to uplift corporate value and organizational strength, we extend communication toward shareholders, customers, communities and employees through PR, IR and business activities. Super Community House We plan engaging ourselves in high profile community rooted activities in Nagoya that include; Sponsoring Nagoya City s 400th anniversary event, Launching Tokai ETF, and Supporting Aichi Prefectural Office with their prefecture-wide campaign for Casual Kindness Dissemination. 46

48 Contact General Planning Department, Tokai Tokyo Financial Holdings, Inc. TEL: FAX: Effective April 1, 2009, 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, 2009 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. 47