Analyst Meeting Analyst Meeting Presentation Material Presentation Material December 2, 2004 Mitsui Trust Financial Group
Agenda Ⅰ . Management Strategies ・ Management Direction ・ Recomposition of Revenue Structure ・ Thorough Low Cost Operations ・ Strengthen Financial Base ・ Financial Summary ・ Revenues by Business Unit Ⅱ . Implementation 1. Efficiency in Banking Business 2. Enhancement of Fee Business Ⅲ . Strengthening of Balance Sheet ・ Disposal of NPLs ・ NPLs Balance & NPLs Ratio ・ Equity Portfolio ・ Bond Portfolio ・ Deferred Tax Assets ・ Capital Adequacy Ratio Mitsui Trust Financial Group 1
Ⅰ . Management Strategies • Management Direction • Recomposition of Revenue Structure • Thorough Low Cost Operations • Strengthen Financial Base • Financial Summary • Revenues by Business Unit Mitsui Trust Financial Group 2
Management Direction Management Direction Mitsui Trust Financial Group Actions FY3/05 ~ Enhancement of Profitability ~ ~ ~ ~ ~ ~ ~ ・ ・ Increase Revenues *1 ・ ・ Recomposition of Revenue Structure ・ ・ ・ Promote Efficiency ・ Thorough Low Cost Operations *1 Gross operating profit ~ ~ Strengthen Balance Sheet ~ ~ ~ ~ ~ ~ ・ ・ ・ Final Disposal of NPLs ・ Completion ・ ・ Reduction of Equity Portfolio ・ ・ Mitsui Trust Financial Group 3
Recomposition of Revenue Structure ① ① ① ① 1H.FY3/05: Weight of strategic products relative to total revenues exceeded 50% Recomposition of Revenue Structure FY3/03 Actual FY3/04 Actual Full FY3/05 Planned 1H.FY3/05 Actual Conventional Banking Business *1 [Composition of gross operating � Corporate loans profit] � Bond investment, etc. 49% 57% 44% 63% *1 Financial intermediary business from household to corporate sector and bond investments Strategic Products � Loans to individuals (Housing loans, etc.) � Real estate non-recourse loans 17% � Asset management 16% — Investment trust & variable 14% 56% annuity sales 13% 51% 9% 8% 43% — Real estate 5% 2% 37% — Stock transfer agency 25% 29% — Pension/Securities, etc. 22% 23% � Alternative investments 2% 1% 1% 0% Mitsui Trust Financial Group 4
Recomposition of Revenue Structure ② ② ② ② Recomposition of Revenue Structure Contents 1H. Actual Full FY Planned New housing loan origination of Revise full FY target upward to Enhancing ¥ 300.1 bn ¥ 630 bn housing loans [Initial target: ¥ 300 bn ] [Initial target: ¥ 600 bn ] Enhancing real Revise full FY target upward to End balance of ¥ 927.0 bn estate asset ¥ 1.05 trn [Initial target: ¥ 900 bn ] finance [Initial target: ¥ 1 trn ] Reducing Planning full FY decline of 10 bp decline (Managerial basis, avg. balance basis) funding (time 10 bp from last FY, [Initial target: 10 bp decline from 1H.FY3/04 ] deposits) costs as initially targeted Strengthening Revise full FY target upward to Revenues of ¥ 12.4 bn investment trust & ¥ 24.5 bn variable annuity [Initial target: ¥ 10.0 bn ] [Initial target: ¥ 20.0 bn ] sales Enhancing of Revise full FY target upward to Revenues of ¥ 11.2 bn real estate ¥ 22.0 bn [Initial target: ¥ 8.0 bn ] business [Initial target: ¥ 19.0 bn ] Mitsui Trust Financial Group 5
MTH: Mitsui Trust Holdings Low Cost Operations CMTB: Chuo Mitsui T/B MATB: Mitsui Asset T/B Thorough Low Cost Operations (CMTB+MATB) Operating Expenses 80.0 Personnel Non-personnel Taxes Contents 1H. Actual Full FY Planned (Yen bn) 64.7 57.7 60.0 Reducing Revise full FY target to 1H. on 1H. reduction: ¥ (7.0) bn operating ¥ (13.0) bn reduction 34.0 [Initial target: ¥(3.7)bn] 40.0 3 1 . 1 expenses [Initial target: ¥ (6.0) bn reduction] 20.0 Full FY plan: 37 % Declining Achieved 41 % 28. 1 23.7 OHR [1H.FY3/04 actual: 46 % ] [Targeting below 40 % ] 0.0 1 H.FY3/04 1 H.FY3/05 Operating Expenses (CMTB+MATB) Number of Employees & Branches 54% 190.0 52% Personnel Non-personnel Taxes 200.0 178.4 8,000 200 7,852 50% OHR (Yen bn) 163.6 7,362 44% (people) (branches) 149.4 6,787 166 (Planned) 41% 150.0 6,000 6,021 150 128.0 149 37% 96.0 5,037 92.8 115.0 87.4 ����������������� 5,236 119 76.1 ����������������� 100.0 67.9 4,000 100 ����������������� 62.5 ����������������� 72 68 ����������������� 67 50.0 87.0 ����������������� ����������������� 77.7 69.6 # of employees(left) 2,000 50 67.4 55.4 ����������������� 46.5 # of branches(right) ����������������� 0.0 ����������������� # of Employees: MTH+CMTB+MATB # of branches: CMTB 3/00 3/01 3/02 3/03 3/04 3/05 0 0 FY As of 3/00 3/01 3/02 3/03 3/04 9/04 Mitsui Trust Financial Group 6
Strengthen Financial Base Strengthen Financial Base Contents 1H. Actual Full FY Planned Full FY estimate: ¥ 40.0 bn Actual: ¥ 21.7 bn Credit costs *1 [Initial estimate: ¥ 24.0 bn ] [No revision] NPLs ratio *1 Revise full end-FY estimate to Actual: 3.9 % Halve NPLs ratio from Achieved 6 months ahead of approx. 3.0 % 9.2 % (at 3/02) deadline set by FSA [Initial estimate: approx. 3.8 % ] Equity portfolio relative to Reduction of equity Further reduction: Tier1: 80 % portfolio *2 To approx. 70 % of Tier1 [End-3/04 actual: 95 % ] DTAs relative to Tier1: 40 % Further reduction: Reduction of DTAs *3 To 30 % level of Tier1 [End-3/04 actual: 49 % ] *1 CMTB, Non-consolidated *2 MTH, Consolidated *3 Deferred Tax Assets. MTH, Consolidated Mitsui Trust Financial Group 7
Financial Summary 1H.FY3/05 Highlights & Full FY3/05 Outlook Yen bn CMTB+MATB 1H.Actual Full FY Outlook Combined totals 1H.FY3/04 1H.FY3/05 Change FY3/04 FY3/05 Change Gross operating profit *1 141.4 140.2 (1.1) 309.3 315.0 5.7 64.7 57.7 (7.0) 128.0 115.0 (13.0) Operating expenses [minus] 46% 41% (5)% 41% 37% (5)% Overhead ratio Pre-provision profit *2 76.6 82.5 5.8 181.2 200.0 18.7 38.2 18.8 (19.4) 39.7 16.0 (23.7) Net stock related profit 74.0 71.8 (2.1) 126.8 160.0 33.1 Recurring profit 23.8 33.8 10.0 66.9 58.0 (8.9) Deffered income taxes [minus] 54.2 35.1 (19.0) 83.3 90.0 6.6 (Interim) Net income ���� ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ��� ���� 32.4 21.7 (10.7) 58.3 40.0 (18.3) ��� Credit costs [minus] ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ���� ��� MTH, Consolidated 1H.FY3/04 1H.FY3/05 Change FY3/04 FY3/05 Change 48.0 76.4 28.4 105.3 165.0 59.6 Recurring profit 22.4 35.3 12.8 50.7 85.0 34.2 (Interim) Net income ROE *3 13% 19% *1 Before trust a/c credit costs *2 Effective net operating profit before trust a/c credit costs & transfer to the general reserve *3 Outstanding of capital is average balance Mitsui Trust Financial Group 8
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