Analyst Meeting Analyst Meeting Presentation Material Presentation Material November 28, 2008 Chuo Mitsui Trust Group
Agenda Ⅰ . Management Direction Ⅱ . Status of Profit Ⅲ . Status of Assets Ⅳ . Strategic Business Operations Ⅴ . Status of Capital "CMTH" : Chuo Mitsui Trust Holdings, Inc. "CMTB" : The Chuo Mitsui Trust & Banking Co., Ltd. "CMAB" : Chuo Mitsui Asset Trust & Banking Co., Ltd. "CMTB+CMAB" : Combined totals for "CMTB" and "CMAB", Non-consolidated 1
Ⅰ . Management Direction ･ Management Direction 2
Management Direction Management Direction Chuo Mitsui Trust Group Management Actions Increase of Enhancement Concentration on high Recomposition gross margin & high growth of of revenue operating areas within strategic structure Profitability businesses profit Strengthening Continuous focus on the maintenance of the and improvement of the financial base Balance Sheet 3
Ⅱ . Status of Profit ･ Revenue Trends ･ Recomposition of Revenue Structure ･ Financial Summary ･ Factors of Increase / Decrease in Gross Operating Profit ･ Expense Situation ･ Revenues by Business Unit 4
Revenue Trends Revenues excluding effects of securitization showed a steady growth trend until 1H.FY3/08, but decreased in 1H.FY3/09 YoY Revenue Trend (CMTB+CMAB, non-consolidated) (Yen bn) Gross operating profit * 150 Gross operating profit excluding effects 141.5 of housing loan securitization 136.7 131.4 129.6 125.6 124.6 124.5 121.4 100 ～ ～ 50 0 1H.FY3/06 1H.FY3/07 1H.FY3/08 1H.FY3/09 * Excludes securitization profits which are posted upfront when securitization takes place, and amortization costs which are posted in the following years 5
Recomposition of Revenue Structure Recomposition of Revenue Structure Breakdown of gross operating profit by business segment (CMTB+CMAB, non-consolidated) Conventional Banking Banking related Businesses Businesses 16% ● Corporate loans, etc. 19% 23% ● Bond investments, etc. 9% Strategic Businesses 15% Businesses Banking related ● Loans to individuals 15% ● Real estate asset finance 3% 40% 18% ● Alternative investments 7% ● Other banking related 2% 4% businesses 1% 2% 19% ● Investment trust 75% 15% 66% & Annuity insurance 11% Asset Management ● Real estate 2% Businesses 2% 12% 8% ● Pension 3% 37% 9% 11% ● Stock transfer agency 10% 5% 5% ● Other asset management 6% 5% 2% 1% Sum of businesses loans to individuals, FY3/03 1H.FY3/08 1H.FY3/09 investment trust & annuity insurance, １ ６ ％ ４ ６ ％ ４ １ ％ and real estate 6
Financial Summary 1H.FY3/09 Highlights & FY3/09 Outlook a b c:b-a d e f:e-d (Yen bn) Actual Outlook CMTB+CMAB, non-consolidated 1H.FY3/08 1H.FY3/09 Change % FY3/08 FY3/09 Change % Gross operating profit *1 136.7 121.4 (15.2) (11)% 265.2 264.0 (1.2) (0)% （ minus ） 55.1 59.0 3.8 7% 110.8 117.0 6.2 6% Operating expenses [Net periodic retirement [(3.8)] [(0.2)] [3.6] [(7.7)] （ minus ） benefit cost] Pre-provision profit *2 81.5 62.4 (19.1) (23)% 154.4 147.0 (7.4) (5)% (17.8) (35.0) (17.2) (27.5) (45.0) (17.5) Net other profit (loss) and other [(1.6)] [(16.2)] [(14.6)] [(7.4)] [(16.0)] [(8.6)] [Losses on devaluation of stocks] 63.7 27.3 (36.3) (57)% 126.8 102.0 (24.8) (20)% Ordinary profit 3.0 9.8 6.8 8.1 11.0 2.9 Extraordinary profit （ minus ） 20.6 15.7 (4.9) 42.8 38.0 (4.8) Deferred income taxes 40.5 17.1 (23.4) (58)% 81.9 67.0 (14.9) (18)% Net income （ minus ） 16.9 0.3 (16.6) 9.5 10.0 0.5 Credit Costs CMTH, consolidated 1H.FY3/08 1H.FY3/09 Change % FY3/08 FY3/09 Change % 64.0 26.9 (37.1) (58)% 125.3 100.0 (25.3) (20)% Ordinary profit 35.5 13.7 (21.7) (61)% 71.8 60.0 (11.8) (16)% Net income - - ¥7 ¥7 Dividend per share *1 Before trust a/c credit costs *2 Effective net operating profit before trust a/c credit costs & provision(reversal) of general reserve 7
Factors of Increase / Decrease in Gross Operating Profit 1H.FY3/09 Reflecting the market turmoil, fee income on Investment trust and Real estate decreased. As a result, gross operating profit decreased by JPY15.2bn YoY Factors of Increase / Decrease in Gross Operating Profit （ CMTB+CMAB, non-consolidated ） （ Yen bn ） Conventional Banking Strategic Businesses Businesses Loans to Priority Segments individuals Bond investments, etc. 2.1 Profit increase factor (6.8) Corporate 6.5 Profit decrease factor loans, etc. 1.0 (6.5) (8.7) Investment trust & △ 152 (15.2) Annuity insurance Loss on Real estate CDO (3.1) 136.7 (2.7) Alternative investments Others 121.4 1H.FY3/08 1H.FY3/09 8
Expense Situation Operating Expenses (CMTB+CMAB, non-consolidated) Operating expenses OHR In 1H.FY3/09, OHR increased YoY, due to both the Policy of restraining total amount of operating expenses ⇒ Excluding the increase in retirement benefit cost, decreased gross operating profit and increased operating expense remained almost flat operating expenses Trend of OHR * Trend of Operating Expenses （ CMTB+CMAB, non-consolidated ） （ CMTB+CMAB, non-consolidated ） (Yen bn) Personnel Non-Personnel Tax 59.0 55.1 60 +3.8 2.4 ( % ) 49.6 47.8 +7.2 4 8 . 6 % 2.6 (1.7) 2.4 5 0 % 2.1 30.0 40 4 0 . 3 % 30.1 3 8 . 4 % 3 8 . 3 % 29.9 31.3 4 0 % 20 26.4 22.3 3 0 % 17.2 14.3 0 1H.FY3/06 1H.FY3/07 1H.FY3/08 1H.FY3/09 2 0 % Net periodic retirement benefit cost within personnel expense 1 0 % (5.5) (9.2) (3.8) (0.2) 0 % 1 H . F Y 3 / 0 6 1 H . F Y 3 / 0 7 1 H . F Y 3 / 0 8 1 H . F Y 3 / 0 9 (3.7) +5.3 +3.6 Decreasing factor Increasing factor of expense of expense * operating expenses / gross operating profit 9
Revenues by Business Unit Revenues by Business Unit (Reference) （ Yen bn ） a b c:b-a d e f:e-d g:e-b h:g-b Revised Revised Change Actual Outlook Outlook from CMTB+CMAB, non-consolidated 1H.FY3/08 1H.FY3/09 Change % FY3/08 FY3/09 Change % 2H.FY3/09 1H.FY3/09 65.5 50.2 (15.3) (23)% 121.9 110.0 (11.9) (10)% 59.7 9.5 Asset management businesses Investment trust & Annuity insurance 25.0 18.2 (6.8) (27)% 45.2 40.5 (4.7) (11)% 22.2 3.9 16.8 10.2 (6.5) (39)% 31.7 28.5 (3.2) (10)% 18.2 7.9 Real estate 13.4 12.9 (0.5) (4)% 26.6 27.0 0.3 1% 14.0 1.0 Pension 7.4 7.3 (0.1) (1)% 13.6 12.5 (1.1) (9)% 5.1 (2.1) Stock transfer agency 71.1 71.2 0.0 0% 143.2 154.0 10.7 7% 82.7 11.5 Banking related businesses 34.0 41.5 7.5 22% 77.5 86.0 8.4 11% 44.4 2.8 Conventional banking businesses [22.2] [23.2] [1.0] [43.3] [49.0] [5.6] [25.7] [2.4] [4%] [13%] [Corporate loans, etc.] [11.8] [18.3] [6.5] [55%] [34.2] [37.0] [2.7] [8%] [18.6] [0.3] [Bond investments, etc.] 19.6 21.7 2.1 11% 39.5 45.0 5.4 14% 23.2 1.4 Loans to individuals 4.5 4.8 0.3 8% 9.9 10.0 0.0 1% 5.1 0.2 Real estate asset finance 9.6 0.9 (8.7) (91)% 9.5 9.0 (0.5) (6)% 8.0 7.1 Alternative investments [9.6] [4.0] [(5.6)] [(58%)] [14.5] [12.0] [(2.5)] [(18%)] [7.9] [3.9] [Investment return] [-] [(3.1)] [(5.0)] [(3.1)] [3.1] [-] [CDO loss disposition] Other banking related businesses 3.2 2.0 (1.1) (36)% 6.6 4.0 (2.6) (40)% 1.9 (0.1) 136.7 121.4 (15.2) (11)% 265.2 264.0 (1.2) (0)% 142.5 21.0 Gross operating profit 10
Ⅲ . Status of Assets ・ NPL ・ Status of Loan Portfolio ・ Credit Costs Situation ・ Overseas Investments / Lending 11
NPL Maintaining stringent portfolio management Balance of NPL and NPL Ratio ( CMTB, non-consolidated, Bank a/c + Trust a/c) (Yen bn ） 8% 750 7.0% 702.3 NPL decreased steadily 6% Due to the downgrades of loans to Lehman Brothers Group (JPY 15.0bn) and some real 4.9% 500 410.6 estate related loans, claims under high risk & 468.0 (virtual) bankruptcy increased 4% 184.9 2.8% 260.1 144.3 155.6 250 1.8% 1.7% 1.7% 94.9 2% 138.2 160.9 1.5% 291.7 283.1 71.8 21.6 79.5 82.8 165.2 116.6 89.1 76.0 61.5 0 0% 3/03 3/04 3/05 3/06 3/07 3/08 9/08 As of Claims under High Risk & (Virtual) Bankruptcy Claims under Close Observation NPL Ratio 12
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