Chuo Mitsui Trust Group Chuo Mitsui Trust Group Management Strategies Management Strategies February 2009 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 ・ Recomposition of Revenue Structure ・ Revenue Trends ・ Factors of Increase / Decrease in Gross Operating Profit ・ Revenues by Business Unit ・ Expense Situation ・ Financial Summary 4
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 5
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 6
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 7
Revenues by Business Unit Revenues by Business Unit 3Q.FY3/09 Accumulated total ( 9 months ) a b c:b-a CMTB+CMAB, non-consolidated 1Q 2Q 3Q (3 months) (3 months) (3 months) 3Q.FY3/08 3Q.FY3/09 Change % 22.9 27.2 18.3 94.0 68.5 (25.5) (27)% Asset management businesses Investment trust & Annuity (34)% 8.7 9.5 5.6 36.1 23.9 (12.2) insurance 2.5 7.7 1.6 23.1 11.8 (11.2) (49)% Real estate 6.6 6.3 5.7 20.2 18.7 (1.4) (7)% Pension 4.5 2.7 4.6 11.4 11.9 0.4 4% Stock transfer agency Banking related businesses 34.4 36.7 36.0 107.7 107.2 (0.4) (0)% - - - 52.6 64.0 11.4 22% Conventional banking businesses - - - [30.6] [34.4] [3.8] [12%] [Corporate loans, etc.] - - - [21.9] [29.5] [7.6] [35%] [Bond investments, etc.] - - - 29.1 32.7 3.5 12% Loans to individuals - - - 6.9 7.2 0.2 4% Real estate asset finance - - - 13.9 0.4 (13.5) (97)% Alternative investments [(9.0)] - - - [13.9] [4.8] [(65)%] [Investment return] [ - ] [ - ] [(4.4)] - - - [(4.4)] [CDO loss disposition] Other banking related businesses - - - 5.0 2.8 (2.2) (44)% Gross operating profit 57.4 63.9 54.3 201.8 175.8 (26.0) (13)% 8
Expense Situation Operating Expenses (CMTB+CMAB, non-consolidated) Operating expenses OHR OHR increased YoY, due to both the decreased Policy of restraining total amount of operating expenses ⇒ Excluding the increase in retirement benefit cost, gross operating profit and increased operating operating expense remained almost flat expenses Trend of OHR * Trend of Operating Expenses ( CMTB+CMAB, non-consolidated ) ( CMTB+CMAB, non-consolidated ) (Yen bn) Personnel Non-Personnel Tax 87.3 ( % ) 83.5 +3.8 4 9 . 6 % 3.2 +10.2 74.6 4.1 (1.4) 73.2 80 5 0 % 3.6 3.4 4 1 . 3 % 44.4 3 9 . 9 % 60 3 9 . 0 % 45.7 4 0 % 44.8 47.2 40 20 39.6 3 0 % 33.5 26.0 22.5 0 3Q.FY3/06 3Q.FY3/07 3Q.FY3/08 3Q.FY3/09 2 0 % Net periodic retirement benefit cost within personnel expense 1 0 % (8.3) (13.1) (5.8) (0.3) 0 % (4.8) +7.3 +5.4 3 Q . F Y 3 / 0 6 3 Q . F Y 3 / 0 7 3 Q . F Y 3 / 0 8 3 Q . F Y 3 / 0 9 Decreasing factor Increasing factor of expense of expense * operating expenses / gross operating profit 9
Financial Summary 2Q.FY3/09 and 3Q. FY3/09 Highlights & FY3/09 Outlook 2Q.FY3/09 ( 6 months ) 3Q.FY3/09 ( 9 months ) FY3/09 Outlook a b c:b-a d e f:e-d g h i:h-g (Yen bn) Outlook Revised on CMTB+CMAB, non-consolidated Actual Actual Jan 30, 2009 2Q.FY3/08 2Q.FY3/09 Change 3Q.FY3/08 3Q.FY3/09 Change FY3/08 FY3/09 Change % Gross operating profit *1 136.7 121.4 (15.2) 201.8 175.8 (26.0) ( minus ) 55.1 59.0 3.8 83.5 87.3 3.8 Operating expenses [Net periodic retirement [(3.8)] [(0.2)] [3.6] [(5.8)] [(0.3)] [5.4] ( minus ) benefit cost] Pre-provision profit *2 81.5 62.4 (19.1) 118.3 88.5 (29.8) 154.4 130.0 (24.4) (16)% (17.8) (35.0) (17.2) (13.7) (80.6) (66.9) Net other profit (loss) and other [(1.6)] [(16.2)] [(14.6)] [(1.6)] [(56.4)] [(54.8)] [Losses on devaluation of stocks] 63.7 27.3 (36.3) 104.6 7.8 (96.7) 126.8 40.0 (86.8) (68)% Ordinary profit 3.0 9.8 6.8 4.1 10.4 6.2 Extraordinary profit ( minus ) 20.6 15.7 (4.9) 31.2 (1.3) (32.6) Deferred income taxes 40.5 17.1 (23.4) 69.7 14.0 (55.7) 81.9 35.0 (46.9) (57)% Net income ( minus ) 16.9 0.3 (16.6) 17.6 3.9 (13.6) 9.5 10.0 0.5 Credit Costs CMTH, consolidated 2Q.FY3/08 2Q.FY3/09 Change 3Q.FY3/08 3Q.FY3/09 Change FY3/08 FY3/09 Change % 64.0 26.9 (37.1) 105.2 7.6 (97.5) 125.3 40.0 (85.3) (68)% Ordinary profit 35.5 13.7 (21.7) 63.0 9.1 (53.9) 71.8 30.0 (41.8) (58)% 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 10
Ⅲ . Status of Assets ・ NPL ・ Status of Loan Portfolio ・ Credit Costs Situation ・ Overseas Investments / Lending 11
NPL NPL ratio remain at the 1% level Balance of NPL and NPL Ratio ( CMTB, non-consolidated, Bank a/c + Trust a/c) (Yen bn ) 8% 702.3 750 7.0% NPL decreased steadily 6% Due to the downgrades of loans to Lehman Brothers 468.0 Group (JPY 15.0bn) and some real 4.9% estate related loans, claims under high risk & 500 410.6 (virtual) bankruptcy increased 4% 260.1 184.9 2.8% 160.9 144.3 155.6 250 1.8% 123.5 1.7% 1.7% 94.9 2% 1.3% 291.7 283.1 11.5 71.8 79.5 82.8 165.2 111.9 89.1 76.0 61.5 0 0% 3/03 3/04 3/05 3/06 3/07 3/08 12/08 As of Claims under High Risk & (Virtual) Bankruptcy Claims under Close Observation NPL Ratio 12
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